diff --git "a/freelaw/test.jsonl" "b/freelaw/test.jsonl" deleted file mode 100644--- "a/freelaw/test.jsonl" +++ /dev/null @@ -1,496 +0,0 @@ -{"text": "\n720 N.W.2d 716 (2006)\n2006 WI App 132\nLinda T. PETERSON, Plaintiff-Appellant,\nv.\nCORNERSTONE PROPERTY DEVELOPMENT, LLC, Defendant-Respondent.\nNo. 2004AP3358.\nCourt of Appeals of Wisconsin.\nJune 13, 2006.\nOn behalf of the plaintiff-appellant, the cause was submitted on the briefs of Jordan B. Reich of Kohner, Mann & Kailas, S.C., of Milwaukee, with oral argument by Jordan B. Reich.\nOn behalf of the defendant-respondent, the cause was submitted on the brief of Nathaniel Cade, Jr., of Michael Best & Friedrich, LLP, of Milwaukee, with oral argument by Nathaniel Cade Jr.\nBefore FINE, CURLEY and KESSLER, JJ.\n*719 \u00b6 1 CURLEY, J.\nLinda T. Peterson appeals from a judgment, awarding her $3,388.50 in damages for breach of contract, and awarding Cornerstone Property Development LLC (Cornerstone) $3,594.93 in costs, in a suit involving Peterson's purchase of an unfinished condominium unit from Cornerstone. On appeal, Peterson raises two issues: (1) the trial court's grant of partial summary judgment to Cornerstone, following the court's grant of Cornerstone's motion to reconsider, dismissing her claim based on a violation of WIS. STAT. \u00a7 100.18(1) (2003-04);[2] and (2) the trial court's grant of Cornerstone's motion in limine to exclude evidence of consequential damages with respect to her breach of contract claim.\n\u00b6 2 Peterson asserts that the trial court erred in granting Cornerstone's motion to reconsider, arguing that her WIS. STAT. \u00a7 100.18(1) claim is not barred by the economic loss doctrine or the contract's integration clause. Peterson also contends that the trial court erred in granting Cornerstone's motion in limine to exclude evidence of consequential damages, arguing that although she agreed to purchase her condominium \"as is,\" more specific provisions of the contract conflict with the \"as is\" provision and must be given effect, making consequential damages recoverable for breach of a more specific provision.\n\u00b6 3 We conclude that the integration clause bars Peterson from pursuing a claim under WIS. STAT. \u00a7 100.18(1), and that the contract's \"as is\" clause is limited by the contract's Limited Warranty which, if breached, does permit Peterson to pursue a claim for consequential damages. Accordingly, the judgment is affirmed with respect to the WIS. STAT. \u00a7 100.18(1) claim, and reversed in part with respect to consequential damages.\n\nI. BACKGROUND.\n\u00b6 4 In August 2000, Peterson entered into a reservation agreement with Cornerstone, paying $2,000 for the right to make the first offer for the purchase of a luxury condominium located at 1801 North Commerce Street in Milwaukee. In April 2001, Peterson made an offer to purchase the condominium unit for $292,199.89, and in May, Cornerstone made a counter-offer which Peterson accepted. The closing took place on May 18, 2001. The counter-offer, consisting of multiple documents, together with Peterson's offer, became the purchase contract between Peterson and Cornerstone.\n\u00b6 5 Peterson agreed to purchase the condominium at a reduced price \"in an `as is' condition.\" She agreed to complete the construction herself, and she knew that a *720 certificate of occupancy would not be issued until the construction was complete. Prior to the closing, Peterson was given the opportunity to inspect the property.\n\u00b6 6 Exhibit E contained a \"Limited Warranty,\" promising that for one year the unit would be free from \"latent defects due to faulty materials or workmanship,\" that is, defects not apparent at the time of the closing or completion of the work, but that become apparent before the expiration of the warranty. If such latent defects were discovered, Cornerstone would have the choice to either make the repairs or replace the defective item. With the exception of the Limited Warranty, Peterson specifically agreed to \"waive[] any claim against the Seller for patent or latent defects in construction of the Property.\"\n\u00b6 7 The contract included an integration clause, expressed in three separate provisions, excluding all prior negotiations from the contract and specifying that only the text contained in the written documents constituted the actual contract. First, in what was originally part of Peterson's offer, the contract provided: \"ENTIRE CONTRACT This Offer, including any amendments to it, contains the entire agreement of the Buyer and Seller regarding the transaction. All prior negotiations and discussions have been merged into this Offer.\" Next, Exhibit D, which was part of Cornerstone's counter-offer, provides: \"Seller has made no representations other than written in this offer and attached documents concerning the property.\" Finally, Exhibit F contained the following language:\nThe Buyer acknowledges, subject to the Limited Warranty contained in Exhibit E . . ., that, to the fullest extent permitted by law, . . . (c) other than those written representations concerning the condition of the Property contained in the Condominium Offer to purchase, including the Exhibits annexed thereto, she has not relied on any representations made by the Seller in entering into the Condominium Offer to Purchase. . . .\n\u00b6 8 In addition, Revised Exhibit A provided a list of tasks which Cornerstone agreed to fulfill prior to or at the closing, including completing certain unfinished tasks, making certain repairs, and supplying certain materials. Peterson and Cornerstone agreed that should Cornerstone fail to fulfill those obligations, Peterson would receive 150% of the cost of the work and materials. Cornerstone failed to provide the work and materials, and at the closing, the parties agreed that the value of the materials and work that Cornerstone had failed to provide was $2,259.00. Cornerstone made an offer for 150% of $2,259.00, amounting to a total of $3,388.50. Peterson rejected the offer.\n\u00b6 9 According to Peterson, Cornerstone made certain representations to her to induce her to purchase the unit, on which she relied in making her decision to buy it, including: that the property was fit for its intended purpose, well constructed, and, upon completion, ready for occupancy. According to Peterson, the unit did not meet these criteria, and was instead \"poorly designed and constructed,\" and caused her to be unable to complete the required construction. Having failed to complete the construction, Peterson was unable to obtain a certificate of occupancy, and was therefore unable to move into the condominium.\n\u00b6 10 On April 26, 2002, Peterson filed suit against Cornerstone,[3] alleging five different *721 causes of action. Her complaint alleged breach of contract for Cornerstone's failure to provide a unit that was \"well constructed, fit for its intended purpose and, except for final completion, ready for occupancy,\" and for failure to provide the materials and make the repairs as agreed, prior to or at the closing. As a result of the alleged breaches, Peterson claimed she had \"sustained damages, including consequential damages, in an amount to be determined.\" Peterson's complaint also alleged claims of negligent, intentional and strict responsibility misrepresentation. Lastly, she also claimed that Cornerstone had engaged in false advertising by making representations and omissions that were \"untrue, deceptive or misleading,\" in violation of WIS. STAT. \u00a7 100.18(1).\n\u00b6 11 Cornerstone filed an answer denying the allegations and asserting a number of affirmative defenses, including that: (1) Peterson's complaint had failed to state a claim upon which relief may be granted; (2) Peterson had failed to mitigate damages; (3) Peterson's misrepresentation and WIS. STAT. \u00a7 100.18(1) claims were barred by the economic loss doctrine; and (4) Peterson's claims were barred by her own breach of contract because she accepted the condominium \"as is,\" subject only to the Limited Warranty and the delivery of certain materials and work, yet she refused to accept Cornerstone's offer for the materials and work, in the amount agreed to in the contract.\n\u00b6 12 Following extensive discovery, Cornerstone moved for summary judgment, arguing that: (1) the integration clause bars Peterson's claims of misrepresentation; (2) the economic loss doctrine bars all claims for misrepresentation; (3) Peterson's remedies under the contract are limited to those provided by the Limited Warranty and the value of the unsupplied materials agreed to at the closing; and (4) Cornerstone did not violate WIS. STAT. \u00a7 100.18(1) because Peterson must demonstrate an \"untrue, deceptive or misleading\" advertisement or announcement and Cornerstone did not make any such statements.\n\u00b6 13 Peterson filed a response, arguing that: (1) a genuine issue of material fact existed; (2) the economic loss doctrine does not bar all claims of misrepresentation because it does not apply to intentional or strict responsibility misrepresentation; (3) the integration clause does not bar claims of misrepresentation; (4) her contract remedies are not limited to the Limited Warranty; and (5) pre-contract representations are actionable under WIS. STAT. \u00a7 100.18(1) and the economic loss doctrine does not apply to \u00a7 100.18(1) actions.\n\u00b6 14 On March 31, 2003, the trial court denied Cornerstone's motion for summary judgment. The court was not convinced that the economic loss doctrine barred intentional misrepresentation or strict responsibility claims, and ruled that Peterson was not limited to her breach of contract claim. The court noted that summary judgment was also not appropriate because \"integration clauses which negate the existence of any representation not incorporated into the contract may not be used to escape liability for misrepresentations.\"\n\u00b6 15 On June 3, 2003, the supreme court issued its decision in Digicorp, Inc. v. Ameritech Corp., 2003 WI 54, 262 Wis.2d 32, 662 N.W.2d 652. Soon thereafter, Cornerstone filed a motion to reconsider the court's denial of its motion for summary judgment, maintaining that because Digicorp recognized that a fraud in the inducement exception to the economic loss doctrine applies only when the \"fraud is extraneous to, rather than interwoven *722 with, the contract,\" 262 Wis.2d 32, \u00b6 47, 662 N.W.2d 652, and because here the alleged misrepresentation is interwoven with the contract, Peterson's intentional misrepresentation claim is barred by the economic loss doctrine. Cornerstone also argued that the court had misapplied the law in concluding that the integration clause did not bar non-contract claims and maintained that it bars false advertising claims under WIS. STAT. \u00a7 100.18(1).\n\u00b6 16 Peterson filed a response, arguing that her situation falls under the fraud in the inducement exception outlined in Digicorp because before she entered into the contract, \"certain representations were made that were and are not addressed in the contract.\" She also asserted that Cornerstone misreads the law because integration clauses may not be used to escape liability under WIS. STAT. \u00a7 100.18(1).\n\u00b6 17 On October 7, 2003, the court issued a written decision and order granting Cornerstone's motion to reconsider. The court concluded that Peterson's intentional misrepresentation claim was barred by the economic loss doctrine as explained in Digicorp, and that her WIS. STAT. \u00a7 100.18 claim was barred by the integration clause, granting Cornerstone summary judgment as to those claims. The court explained that Peterson could still pursue a breach of contract claim.\n\u00b6 18 Meanwhile, Cornerstone had also filed a motion in limine to exclude evidence of consequential damages with respect to the breach of contract claim because Peterson purchased her condominium \"as is\" and had agreed that the total amount of damages for failure to supply the required materials and work was $3,388.50. Cornerstone submitted that the court should limit Peterson's contractual damages to $3,388.50 because her inability to gain occupancy of her condominium was due to her own inaction, not Cornerstone's action, and because she has failed to adequately itemize the alleged damages.\n\u00b6 19 Peterson responded by arguing that consequential damages are available, irrespective of the \"as is\" clause, both for the cost to complete the condominium and as damages for her inability to use it,[4] because the contract is ambiguous. In a supplemental brief, Peterson referred to the tasks, repairs and materials listed in Revised Exhibit A and the Limited Warranty promising that the unit would be free of latent defects and claimed that Cornerstone had failed to meet those obligations, amounting to a breach, that entitles her to recover consequential damages.\n\u00b6 20 Cornerstone filed a supplemental brief in support of its motion in limine, reiterating its position that Peterson is owed only $3,388.50 and that consequential damages for the cost to complete the unit or for her inability to use her condominium are barred by Peterson's failure to mitigate damages, the \"as is\" clause, and other provisions of the contract that expressly preclude such claims.\n\u00b6 21 On July 21, 2004, the court issued a decision and order granting Cornerstone's motion in limine to exclude evidence of *723 consequential damages for the breach of contract claim. The court explained that a party could recover consequential damages if they were \"proximately caused by\" or \"flowed naturally from\" the breach and were within the contemplation of the parties at the time they entered into the contract. The court observed, however, that because this was an \"as is\" contract, the items a buyer may recover as consequential damages is limited, and concluded that because none of the items for which Peterson sought damages were included in the contract, such evidence was barred by the \"as is\" clause. The court also rejected Peterson's claim that the contract was ambiguous.\n\u00b6 22 With only the breach of contract claim remaining, and as a result of the court excluding evidence of consequential damages, the parties stipulated to the damages being $3,388.50 and judgment was entered against Cornerstone for that amount, and Cornerstone was awarded $3,594.93 in costs. This appeal follows.\n\nII. ANALYSIS.\n\u00b6 23 On appeal, Peterson pursues two issues: (1) whether the trial court erred in dismissing her claim based on a violation of WIS. STAT. \u00a7 100.18(1);[5] and (2) whether the trial court erred in excluding evidence of consequential damages with respect to her breach of contract claim.\n\nA. WISCONSIN STAT. \u00a7 100.18(1)\n\u00b6 24 Peterson contends that the trial court erred in granting Cornerstone's motion to reconsider, dismissing her claim under WIS. STAT. \u00a7 100.18, because it erroneously concluded that the economic loss doctrine and the contract's integration clause bar a \u00a7 100.18(1) claim.\n\u00b6 25 We review the grant or denial of a summary judgment de novo, employing the same methodology as the trial court. Spring Green Farms v. Kersten, 136 Wis.2d 304, 315-17, 401 N.W.2d 816 (1987). Summary judgment is proper if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Id. at 315, 401 N.W.2d 816; WIS. STAT. \u00a7 802.08(2).\n\u00b6 26 WISCONSIN STAT \u00a7 100.18, entitled \"Fraudulent representations,\"[6] protects the public from all \"untrue, deceptive or misleading\" representations made in sales and promotions, including representations made in face-to-face sales. See, e.g., State v. Automatic Merchandisers of Am., Inc., 64 Wis.2d 659, 665, 221 N.W.2d 683 (1974); Bonn v. Haubrich, 123 Wis.2d 168, 173, 366 N.W.2d 503 (Ct.App.1985).\n*724 \u00b6 27 Peterson first responds to the trial court's conclusion that her WIS. STAT. \u00a7 100.18 claim is barred by the economic loss doctrine by pointing to Kailin v. Armstrong, 2002 WI App 70, 252 Wis.2d 676, 643 N.W.2d 132, which explicitly held that the economic loss doctrine does not bar \u00a7 100.18 claims. Kailin, 252 Wis.2d 676, \u00b6\u00b6 2, 43, 643 N.W.2d 132. In her reply, Peterson emphasizes the timing of when the allegedly misleading statements were made and asserts that \"if Cornerstone made the representations asserted by Ms. Peterson in inducing her to purchase the condominium it is actionable under Wis. Stat. 100.18(1),\" and that to prevail she must show only \"that as a covered member of the class the statute protects, Cornerstone[,] in inducing her to purchase the condominium[,] made a representation or representations which were untrue, deceptive or misleading resulting in her suffering damages.\"\n\u00b6 28 Addressing the trial court's second reason for dismissing her WIS. STAT. \u00a7 100.18 claim, Peterson submits that the integration clause does not bar a \u00a7 100.18 claim because \"[i]ntegration clauses cannot be used to escape liability for misrepresentations.\" She relies heavily on Grube v. Daun, 173 Wis.2d 30, 496 N.W.2d 106 (Ct. App.1992) for support, and cites it for the proposition that \"integration clauses do not negate representations which are not part of the written contract\" (underlining by Peterson). In her reply, continuing to cite Grube, she asserts that the integration clause \"cannot eliminate the protection [of] this statute and the remedy it affords\" because \"[t]he purpose of Wis. Stat. 100.18(1) is to protect individuals such as Ms. Peterson from just the type of untrue, deceptive and misleading misrepresentations she alleges were made to her by Cornerstone.\"\n\u00b6 29 Cornerstone responds by first conceding that the economic loss doctrine does not bar a WIS. STAT. \u00a7 100.18 claim and that an integration clause does not bar a misrepresentation claim,[7] but asserts that in arguing that integration clauses cannot be used to escape liability for misrepresentation, Peterson mistakenly combines her \u00a7 100.18 claim, the subject of this appeal, with her misrepresentation claim, which she elected not to appeal, \"to argue incorrectly as to the integration clause's ability to bar a [\u00a7 100.18] claim.\" Cornerstone asserts that Peterson's reliance on Grube heightens her error of combining the \u00a7 100.18(1) and misrepresentation claims because, unlike Peterson's contract, which explicitly precludes a reliance on a representation that is allegedly untrue, deceptive or misleading, the integration clause in Grube dealt with the phrase \"as is.\" Cornerstone submits that the integration clause here bars \u00a7 100.18(1) claims because Peterson never alleged that \"oral representations\" were incorporated into the contract to vary the terms of the written documents, and because there is no case law stating that an integration clause does not bar a \u00a7 100.18 claim.\n\u00b6 30 We begin by noting that Peterson correctly asserts, and Cornerstone properly concedes, that a WIS. STAT. *725 \u00a7 100.18(1) claim is not barred by the economic loss doctrine under Kailin, 252 Wis.2d 676, \u00b6 43, 643 N.W.2d 132 (\"We conclude the economic loss doctrine does not apply to claims under WIS. STAT. 100.18.\"). We therefore need not address the economic loss doctrine further. Consequently, the only issue before us is whether the contract's integration clause bars a \u00a7 100.18(1) claim. We conclude that it does.\n\u00b6 31 The general rule is that when a contract includes an integration clause, evidence of contemporaneous or prior oral agreements relating to the same subject matter are not admissible. Matthew v. American Family Mut. Ins. Co., 54 Wis.2d 336, 341-42, 195 N.W.2d 611 (1972). In conjunction with the parol evidence rule,[8] an integration clause generally bars the introduction of extrinsic evidence to \"vary or contradict the terms of a writing.\" Ziegler Co. v. Rexnord, Inc., 139 Wis.2d 593, 608-09 n. 11, 407 N.W.2d 873 (1987). Absent claims of duress, fraud, or mutual mistake, integration clauses are given effect. See, e.g., Matthew, 54 Wis.2d at 341-42, 195 N.W.2d 611 (giving effect to integration clause).\n\u00b6 32 In Grube, cited by Peterson, this court discussed the applicability of integration clauses. Grube involved the sale of a farm in an \"as is\" condition, where the purchasers sued the real estate broker, seller, previous owner, and the previous owner's liability insurer for making allegedly untrue assertions about the property and for failing to disclose the existence of an underground gasoline tank that was later found to have caused groundwater contamination. Id., 173 Wis.2d at 46-47, 496 N.W.2d 106. The purchasers alleged negligence, intentional misrepresentation, strict liability for misrepresentation, negligent misrepresentation and deceptive or misleading advertisement in violation of WIS. STAT. \u00a7 100.18. Grube, 173 Wis.2d at 47-48, 496 N.W.2d 106. The trial court granted summary judgment on all five counts and the purchasers appealed. Id. at 49, 496 N.W.2d 106.\n\u00b6 33 On appeal, this court discussed the integration clause, phrased as an \"as is\" clause, and addressed the question of \"whether an `as is' clause shields the seller and his agent only from breach of warranty claims in contract, or also from tort claims based on misrepresentation.\" Id. at 59, 496 N.W.2d 106. We acknowledged that \"Wisconsin follows the general rule that integration clauses which negate the existence of any representations not incorporated into the contract may not be used to escape liability for the misrepresentations[,]\" id. at 59-60, 496 N.W.2d 106, ultimately reversing the order granting summary judgment on the misrepresentation claim, id. at 62, 496 N.W.2d 106.\n\u00b6 34 In another discussion, separate from our analysis involving the \"as is\" clause, we addressed the remaining cause of action based on a violation of WIS. STAT. \u00a7 100.18. We concluded that the defendants had not provided any basis for a prime facie defense and therefore also allowed that claim to go forward. Grube, 173 Wis.2d at 62-63, 496 N.W.2d 106.\n*726 \u00b6 35 Peterson's reliance on Grube is misplaced. She apparently fails to realize that although Grube did involve a WIS. STAT. \u00a7 100.18(1) claim, the portions she cites for support address the applicability of the \"as is\" clause as a bar to common law misrepresentation claims, not a \u00a7 100.18 claim. See Grube, 173 Wis.2d at 59, 496 N.W.2d 106. Because Peterson elected not to appeal her misrepresentation claims, she cannot now rely on Grube's holding that integration clauses do not bar misrepresentation claims to support her arguments that she should be allowed to bring a \u00a7 100.18 claim.\n\u00b6 36 However, even if the holding from Grube is applied to Peterson's statutory claim, Grube is still easily distinguishable because Peterson overlooks an important distinction between the integration clause in her contact and the one in Grube. In Grube, we noted that to be effective, disclaimers in the form of integration clauses will not be honored, as matter of public policy, unless the disclaimer is specific as to the tort that is being disclaimed and the disclaimer makes it \"apparent that an express bargain was struck to forego the possibility of tort recovery in exchange for negotiated alternative economic damages.\" 173 Wis.2d at 60, 496 N.W.2d 106 (citing Phillips Petroleum Co. v. Bucyrus-Erie Co., 131 Wis.2d 21, 33, 388 N.W.2d 584 (1986)). Stated differently, although exculpatory clauses are closely scrutinized and void if they violate public policy, Mettler ex rel. Burnett v. Nellis, 2005 WI App 73, \u00b6 13, 280 Wis.2d 753, 695 N.W.2d 861, they are enforceable so long as they \"clearly, unambiguously, and unmistakably inform the signer of what is being waived,\" Yauger v. Skiing Enters., Inc., 206 Wis.2d 76, 84, 557 N.W.2d 60 (1996).\n\u00b6 37 The integration clause in Grube was merely an \"as is\" clause, stating: \"Buyer is buying the property in a [sic] as is condition without any warranties.\" Grube, 173 Wis.2d at 47, 496 N.W.2d 106 (bracketing in Grube). In Peterson's contract, by contrast, three different provisions expressed that all prior negotiations were excluded and that only the text of the written documents constituted the contract: \"This Offer, including any amendments to it, contains the entire agreement of the Buyer and Seller regarding the transaction. All prior negotiations and discussion have been merged into this Offer\"; \"Seller has made no representations other than written in this offer and attached documents concerning the property\"; and finally:\nThe Buyer acknowledges, subject to the Limited Warranty contained in Exhibit E . . . (c) other than those written representations concerning the condition of the Property contained in the Condominium Offer to purchase, including the Exhibits annexed thereto, she has not relied on any representations made by the Seller in entering into the Condominium Offer to Purchase . . . .\n(Emphasis added.) Thus, unlike the clause in Grube, the integration clause here specifically disclaims the purchaser's right to rely on any alleged fraudulent misrepresentations. Indeed, the three provisions of Peterson's contract that expressly stated that the written contract made up the entire contract, to the exclusion of all other provisions, provide exactly the kind of specific disclaimer that makes it apparent that an express bargain had been struck. See Grube, 173 Wis.2d at 60, 496 N.W.2d 106. With an integration clause, worded as clearly and unmistakably as the one in question, we see no reason not to give the integration clause its intended effect.\n\u00b6 38 We are also not convinced by Peterson's emphasis on the timing of the alleged statements and her argument that they occurred before the purchase was completed *727 and that she therefore was induced into purchasing the condominium. In addition to being precluded by the reasons already discussed, she appears to misstate the applicable law. In Grube, we concluded that \"while the `as is' [integration] clause is not a complete bar\" to claims of negligence and misrepresentation, unless the seller makes affirmative misrepresentations, the clause shifts the burden to the buyer to determine the condition of the property:\n[T]he \"as is\" clause put[s] the burden upon a buyer to determine the condition of the property purchased. This shifting of the burden, with nothing more, protects a seller and his or her agent from claims premised upon nondisclosure. But we hold that once the seller or his agent has made an affirmative representation about some aspect of the property, the buyer is entitled to rely upon that statement and expect full and fair disclosure of all material facts relating to that aspect of the property.\nId. at 61, 496 N.W.2d 106 (citations omitted; emphasis in original). In Grube, the defendants made an untrue statement about wells that turned out to be contaminated, and it was this affirmative representation that constituted a viable WIS. STAT. \u00a7 100.18 claim. Grube, 173 Wis.2d at 62, 496 N.W.2d 106.\n\u00b6 39 Here, Peterson does not dispute that she was given the opportunity, and in fact did, inspect the property prior to entering into the purchase contract. She therefore had to show that Cornerstone made affirmative representations upon which she relied. Unlike the situation in Grube, Peterson never provided affidavits alleging that she inquired about the property, and that Cornerstone made an affirmative representation in response to her inquiry. She likewise never provided affidavits alleging that she did not get the property in the condition in which she agreed to purchase it. In fact, Peterson continually states only that Cornerstone made \"representations and omissions\" that entitle her to relief under WIS. STAT. \u00a7 100.18(1), but she fails to specify what those alleged representations or omissions were or even reference portions of the record to indicate exactly what she is referring to.[9] Because Peterson chose to go forward with the closing, having inspected the property, and because she has failed to identify the representations that she alleges were false, she cannot now allege false advertising.\n\u00b6 40 Accordingly, the integration clause governs and bars Peterson's claim under WIS. STAT. \u00a7 100.18(1).[10]\n\nB. Consequential Damages\n\u00b6 41 Peterson also contends that the trial court erred in granting Cornerstone's motion in limine to exclude evidence of consequential damages regarding her breach of contract claim because it erroneously concluded that the fact that she purchased her condominium \"as is\" bars consequential damages.\n\u00b6 42 \"We review a circuit court's decision to admit or exclude evidence *728 under an erroneous exercise of discretion standard.\" Martindale v. Ripp, 2001 WI 113, \u00b6 28, 246 Wis.2d 67, 629 N.W.2d 698 (citations omitted). However, when the exercise of such discretion turns upon a question of law, we review the question de novo, benefiting from the trial court's analysis. Gulmire v. St. Paul Fire & Marine Ins. Co., 2004 WI App 18, \u00b6 10, 269 Wis.2d 501, 674 N.W.2d 629. Here, we are asked to interpret the purchase contract to determine whether it allows for the recovery of consequential damages, which is a question of law. See Ford Motor Co. v. Lyons, 137 Wis.2d 397, 460, 405 N.W.2d 354 (Ct.App.1987). Whether the terms of a written contract are ambiguous is also a question of law that we review de novo. Wisconsin Label Corp. v. Northbrook Prop. & Cas. Ins. Co., 2000 WI 26, \u00b6 24, 233 Wis.2d 314, 607 N.W.2d 276.\n\u00b6 43 Peterson contends that she should be allowed to introduce evidence of consequential damages because she asserts that, as a result of Cornerstone's breach of contract, she is entitled to recover such damages. She maintains that Cornerstone breached the contract by failing to: provide a unit fit for its intended purpose, well constructed and upon her completion ready for occupancy; perform repairs and construction and provide materials prior to or at the closing, as agreed in Revised Exhibit A; provide a unit free from latent defects, as promised in the Limited Warranty; and assume the responsibilities agreed upon in the Limited Warranty in the event a latent defect was discovered. Peterson asserts that these breaches and failures entitle her to recover consequential damages.\n\u00b6 44 Responding to whether the contract's \"as is\" clause bars her from recovering consequential damages, Peterson submits that the contract is ambiguous because it contains an \"as is\" clause, as well as a Limited Warranty, and a clause assuring that Cornerstone would fulfill certain obligations prior to or at the closing (Revised Exhibit A), and that the these conflicting provisions cannot be applied harmoniously. Peterson notes that while Cornerstone could have inserted an \"as is\" clause without a warranty or promising to meet other obligations, or provided specific disclaimers effecting warranties and damages, Cornerstone did not. Peterson further submits that the only way to harmonize these provisions is by giving meaning to either the \"as is\" clause or the Limited Warranty and Revised Exhibit A, and citing Goldmann Trust v. Goldmann, 26 Wis.2d 141, 131 N.W.2d 902 (1965), for the proposition that \"[s]pecific provisions of a contract take precedence over conflicting general provisions,\" she argues that the \"as is\" clause cannot be given meaning. Referring to the \"as is\" clause as a \"poor boilerplate effort . . . to shift responsibility\" to her, Peterson asserts that:\nThe \"as is\" clause has no realistic meaning or effect given the specific provisions of Revised Exhibit A and Exhibit E. These specific provisions must be given effect for them to be meaningfully enforceable contractual provisions. These provisions either created an exception to the \"as is\" clause or negated it completely. Cornerstone's breach of either or both gave rise to a breach of contract claim for which consequential damages are recoverable.\n\u00b6 45 Cornerstone responds that the trial court correctly barred Peterson from introducing evidence of consequential damages, and that the only money Peterson should recover is the $3,388.00 the parties agreed to at the closing.\n\u00b6 46 Cornerstone first notes that Peterson fails to identify the damages she believes constitute consequential damages. Cornerstone then maintains that the contract *729 itself explicitly limits her right to collect consequential damages for several reasons: with the exception of the items identified in the Limited Warranty, it bars her from recovering damages for patent and latent defects in the construction of the property; Peterson herself agreed at the closing that Cornerstone had no additional obligations to her, including the supply of labor, except those specifically agreed to in Revised Exhibit A; and the \"as is\" clause bars consequential damages because an \"as is\" clause puts the burden on a buyer to determine the condition of the property purchased.[11]\n\u00b6 47 We begin by addressing the \"as is\" clause and by examining whether the contract is ambiguous. In Omernik v. Bushman, 151 Wis.2d 299, 444 N.W.2d 409 (Ct.App.1989), we held that \"[a]n `as is' clause in a real estate contract puts the burden upon a buyer to determine the condition of the property purchased.\" Id. at 303, 444 N.W.2d 409. Similarly, as already noted in our discussion about the integration clause, Grube affirmed the same principle. 173 Wis.2d at 61, 496 N.W.2d 106. We agree with Peterson that the contract's more specific provisions, the Limited Warranty and Revised Exhibit A, do conflict with the \"as is\" clause, and we further agree that under Goldmann, the Limited Warranty and Revised Exhibit A should be given meaning. We disagree with Peterson, however, that the existence of a Limited Warranty and the additional obligations set forth in Revised Exhibit A render the \"as is\" clause meaningless. We also disagree that a contract that sells a property \"as is,\" yet provides a Limited Warranty and other obligations, is ambiguous: The only reasonable interpretation of this contract is that with the exception of the specific items covered by the Limited Warranty and Revised Exhibit A the condominium was sold \"as is.\" See, e.g., Jones v. Jenkins, 88 Wis.2d 712, 722, 277 N.W.2d 815 (1979) (\"A contract provision which is reasonably and fairly susceptible to more than one construction is ambiguous.\"). With respect to Revised Exhibit A, because the parties specifically agreed at the closing that the amount owed was $3,388.00, we see no reason to further discuss that provision. With respect to the Limited Warranty, by contrast, we conclude that because the \"as is\" clause is limited by the warranty, the Limited Warranty, if breached, does indeed permit a claim for consequential damages.\n\u00b6 48 Consequently, the items not covered by the Limited Warranty are subject to the \"as is\" provision, and with respect to those it was Peterson's responsibility to inspect the property prior to entering into the contract. See Omernik, 151 Wis.2d at 303, 444 N.W.2d 409. Peterson, as mentioned, was given the opportunity and did inspect the condominium and is therefore precluded from claiming consequential damages for the items that fall under the \"as is\" clause. The question therefore becomes what the Limited Warranty covers.\n\u00b6 49 First, a major problem with Peterson's argument is that in her appellate briefs she fails to specify what the damages *730 she alleges stem from. Indeed, she fails to even provide a dollar amount.[12] Earlier in the proceeding, however, Peterson had specified eleven different areas for which she was seeking consequential damages. Referring to the trial court's ruling excluding consequential damages, her brief-in-chief in fact references \"eleven categories of Ms. Peterson's claimed damages,\" yet she fails to elaborate on what those categories are or explain whether she is still seeking consequential damages for those same categories. What seems to be the most recent list of consequential damages sought by Peterson appears in her Pretrial Report, also presented at a hearing on May 18, 2004, which indicates the following eight categories of damages: (1) mortgage payments of $1,670.00 per month since September 2001; (2) condominium dues since September 2001; (3) real estate taxes since September 2001; (4) storage fees since August 2001; (5) $28,432.28 for undelivered materials; (6) square footage adjustment due to Peterson's misunderstanding as to the size of the unit; (7) $33,373.00 to complete the unit; and (8) Peterson's share of any assessment to repair common elements. We will assume that these are still the damages currently sought by Peterson.\n\u00b6 50 Assuming that Peterson is in fact still seeking the same damages she reported in her Pretrial Report, much of her claim is still problematic. In general, the amount of consequential damages to which a party is entitled \"is limited to such damages as are the natural and probable consequences of the breach and were within contemplation of the parties when the contract was made.\" General Star Indem. Co. v. Bankruptcy Estate of Lake Geneva Sugar Shack, Inc., 215 Wis.2d 104, 119-20, 572 N.W.2d 881 (Ct.App.1997). The damages must \"flow directly and necessarily from the breach of contract, and must be reasonably foreseeable at the time the contract was made as a probable result of the breach.\" Reiman Assocs., Inc. v. R/A Adver., Inc., 102 Wis.2d 305, 321, 306 N.W.2d 292 (Ct.App.1981); see also WIS JI\u0097CIVIL 3710. In addition, under general principles of contract law, \"[a]n injured party is entitled to the benefit of his agreement, which is the net gain he would have realized from the contract but for the failure of the other party to perform[,]\" Thorp Sales Corp. v. Gyuro Grading Co., 111 Wis.2d 431, 438-39, 331 N.W.2d 342 (1983), however, \"[a] party is not entitled to be placed in a better position because of a breach than he would have if the contract had been performed,\" Hanz Trucking, Inc. v. Harris Bros. Co., 29 Wis.2d 254, 268, 138 N.W.2d 238 (1965).\n\u00b6 51 Here, the only contract provision that mentioned damages was the Limited Warranty, and therefore the only damages that Peterson may recover are ones resulting from \"latent defects due to faulty materials or workmanship.\" Because these were the only damages contemplated by the parties at the time they entered into the contract, any other damages do not meet the definition of consequential damages. See General Star, 215 Wis.2d at *731 119-20, 572 N.W.2d 881. It follows that damages for mortgage payments, condominium dues, real estate taxes, storage fees, square footage adjustment, and the cost to complete the unit, are not included as none of these come close to being covered by the Limited Warranty. Particularly baffling is Peterson's demand that she be compensated for the cost of completing the unit, since the contract explicitly provided that she would complete the construction, and it was clearly understood that she was allowed to purchase the unit for a lower price in exchange for completing the construction herself.\n\u00b6 52 Nonetheless, because at this point it is unclear what exactly Peterson is seeking, we conclude that such general descriptions as undelivered materials\u0097 with the exception of those already covered by Revised Exhibit A\u0097and Peterson's share of any assessment to repair common elements, could potentially qualify as \"latent defects due to faulty materials or workmanship.\" Therefore, Peterson may pursue consequential damages under her breach of contract claim, with respect to damage stemming from the alleged breach of the Limited Warranty. We emphasize that only damages resulting from \"latent defects due to faulty materials and workmanship\" are included, and that this narrow definition in particular does not include the cost to complete the property, mortgage payments, real estate taxes, storage fees, or the like.\n\u00b6 53 Moreover, another important consideration in determining damages is that \"[t]he party alleging breach of the contract has a duty to mitigate damages, that is, `to use reasonable means under the circumstances to avoid or minimize the damages.'\" Kramer v. Board of Educ. of the Sch. Dist. of the Menomonie Area, 2001 WI App 244, \u00b6 13, 248 Wis.2d 333, 635 N.W.2d 857 (citing Kuhlman, Inc. v. G. Heileman Brewing Co., 83 Wis.2d 749, 752, 266 N.W.2d 382 (1978)). \"An injured party cannot recover any item of damage that could have been, or was, avoided.\" Id.; see also WIS JI\u0097CIVIL 1731. Cornerstone contends that Peterson failed to mitigate or even attempt to mitigate her alleged inability to use the condominium, and therefore should not be allowed to recover the consequential damages she seeks. For instance, to obtain a certificate of occupancy Peterson was required to install a kitchen sink, but apparently fearing that the sink would sustain damage from the yet to be completed construction, she refused to install the sink and is now claiming damages because she was unable to live in her condominium. Cornerstone notes that although she could have, for instance, covered up the sink, \"Peterson made a conscious, yet expensive choice, to incur damages for her alleged inability to occupy the property.\" Because the law requires mitigation, should Peterson's breach of contract claim under the Limited Warranty succeed, in subsequently determining Peterson's damages, it will be necessary to determine whether she satisfactorily mitigated her damages.\n\u00b6 54 In sum, we affirm the order dismissing Peterson's claim based on a violation of WIS. STAT. \u00a7 100.18; we affirm the judgment awarding Peterson $3,388.00 for breach for contract, for damages under Revised Exhibit A; and we reverse the order granting Cornerstone a motion in limine to exclude evidence of consequential damages under the breach of contract claim with respect to the Limited Warranty only, and affirm the order with respect to all other claims for damages.\nJudgment affirmed in part; reversed in part and cause remanded with directions.\nNOTES\n[2] All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.\n[3] Peterson's suit also initially included a claim against Timothy Dixon, the Cornerstone representative who handled the sale of the condominium; however, the parties subsequently stipulated to the voluntary dismissal of that claim without prejudice.\n[4] Peterson originally sought consequential damages for eleven separate areas; however, her Pretrial Report and a hearing on May 18, 2004, reduced the damages that she sought, to the following eight areas: (1) mortgage payments of $1,670.00 per month since September 2001; (2) condominium dues since September 2001; (3) real estate taxes since September 2001; (4) storage fees since August 2001; (5) $28,432.28 for undelivered materials; (6) square footage adjustment due to Peterson's misunderstanding as to the size of the unit; (7) $33,373.00 to complete the unit; and (8) Peterson's share of any assessment to repair common elements. Whether this is an accurate list of the consequential damages that Peterson is still seeking is unclear because her briefs do not address the issue.\n[5] Although the summary judgment encompassed not only Peterson's WIS. STAT. \u00a7 100.18(1) claim, but also her claims of misrepresentation, she appeals only the dismissal of her \u00a7 100.18(1) claim.\n[6] WISCONSIN STAT. \u00a7 100.18, provides in relevant part:\n\nFraudulent representations. (1) No person, firm, corporation or association, or agent or employee thereof, with intent to sell, any real estate or with intent to induce the public in any manner to enter into any contract or obligation relating to the purchase [or] sale of any real estate shall make, publish, disseminate, circulate, or place before the public in this state, in a newspaper, magazine or other publication, or in the form of a book, notice, handbill, poster, bill, circular, pamphlet, letter, sign, placard, card, label, or over any radio or television station, or in any other way similar or dissimilar to the foregoing, an advertisement, announcement, statement or representation of any kind to the public relating to such purchase [or] sale of such real estate or to the terms or conditions thereof, which advertisement, announcement, statement or representation contains any assertion, representation or statement of fact which is untrue, deceptive or misleading.\n[7] At oral argument, Cornerstone argued that as a result of subsequent developments in the economic loss doctrine in Wisconsin, specifically Kaloti Enters., Inc. v. Kellogg Sales Co., 2005 WI 111, 283 Wis.2d 555, 699 N.W.2d 205, the economic loss doctrine may in fact bar a WIS. STAT. \u00a7 100.18 claim and hence trump contrary language in Kailin v. Armstrong, 2002 WI App 70, 252 Wis.2d 676, 643 N.W.2d 132. Because we conclude that Peterson's \u00a7 100.18 claim is barred by the integration clause, we do not further address the possible applicability of the economic loss doctrine.\n[8] The parol evidence rule can be stated as follows:\n\nWhen the parties to a contract embody their agreement in writing and intend the writing to be the final expression of their agreement, the terms of the writing may not be varied or contradicted by evidence of any prior written or oral agreement in the absence of fraud, duress, or mutual mistake.\nFederal Deposit Ins. Corp. v. First Mortgage Investors, 76 Wis.2d 151, 156, 250 N.W.2d 362 (1977) (footnote omitted).\n[9] Curiously, despite extensive discovery and ample time, Peterson repeatedly refers to the allegations she made in her complaint.\n[10] If one party to a contract with a disclaimer, integration clause, or similar provision lacks the sophistication in business matters or possesses unequal bargaining power, this provides a basis for voiding that clause. See, e.g., Finch v. Southside Lincoln-Mercury, Inc., 2004 WI App 110, \u00b6 22, 274 Wis.2d 719, 685 N.W.2d 154. Here, however, because Peterson was represented by an attorney throughout the entire proceeding, she cannot be said to have lacked the necessary sophistication or to have been disadvantaged by unequal bargaining power.\n[11] Cornerstone also contends that consequential damages for the loss of the property's appreciated value are barred as a matter of law because Peterson \"cannot allege a fraud in the contract formation and avoid its integration clause, yet seek benefit of the bargain damages.\" We decline to address the issue of consequential damages for the loss of the property's appreciated value because it appears as though Peterson is no longer seeking such damages. Although a claim for lost appreciation was among the eleven alleged damages she originally brought, her Pretrial Report did not mention such damages and neither do her appellate briefs.\n[12] In fact, the closest she comes to explaining the alleged damages is on the last page of her reply brief in attacking Cornerstone's assertion that she should have put in her kitchen sink when she notes:\n\nCornerstone over simplifies the condition of Ms. Peterson's unit. It wasn't just the sink. It was poor construction including significant roof issues, ceiling construction, heating and air conditioning design and execution, water leakage and mold. The unit was because of these problems rendered uninhabitable. Ms. Peterson has expended substantial dollars attempting to make the unit habitable.\nThese brief mentions of what she actually alleges was wrong with her unit were not accompanied by citations to the record.\n"} -{"text": " IN THE UNITED STATES COURT OF APPEALS\n FOR THE FIFTH CIRCUIT\n\n\n\n No. 01-41110\n Summary Calendar\n\n\n\nUNITED STATES OF AMERICA,\n\n Plaintiff-Appellee,\n\nversus\n\nGERALD GALLAWAY,\n\n Defendant-Appellant.\n\n --------------------\n Appeal from the United States District Court\n for the Eastern District of Texas\n USDC No. 1:00-CR-62-1\n --------------------\n May 23, 2002\n\nBefore DAVIS, BENAVIDES and CLEMENT, Circuit Judges.\n\nPER CURIAM:*\n\n Gerald Gallaway appeals his 151-month sentence following his\n\njury-trial conviction for conspiracy to distribute and possession\n\nwith the intent to distribute cocaine base and heroin, in\n\nviolation of 21 U.S.C. \u00a7\u00a7 841(a)(1) and 846. Gallaway contends\n\nthat his sentence was imposed in violation of Apprendi v. New\n\nJersey, 530 U.S. 466 (2000).\n\n\n\n\n *\n Pursuant to 5TH CIR. R. 47.5, the court has determined\nthat this opinion should not be published and is not precedent\nexcept under the limited circumstances set forth in 5TH CIR.\nR. 47.5.4.\n\f No. 01-41110\n -2-\n\n Gallaway did not challenge his sentence on these grounds in\n\nthe district court, thus, this court reviews his assertion for\n\nplain error only. See United States v. Vasquez-Zamora, 253 F.3d\n\n211, 213 (5th Cir. 2001). Because Gallaway was sentenced below\n\nthe statutory maximum for the offense charged in his indictment,\n\nthere was no Apprendi violation. See United States v. Keith, 230\n\nF.3d 784, 787 (5th Cir. 2000), cert. denied, 531 U.S. 1182\n\n(2001); United States v. Randle, 259 F.3d 319, 322 (5th Cir.\n\n2001). Gallaway has not shown plain error; indeed, he has not\n\nshown any error at all. Accordingly, we AFFIRM.\n\n AFFIRMED.\n\f"} -{"text": "\n639 S.W.2d 346 (1982)\n277 Ark. 61\nTimothy GILBERT, Appellant,\nv.\nSTATE of Arkansas, Appellee.\nNo. CR 82-66.\nSupreme Court of Arkansas.\nSeptember 27, 1982.\nWilliam R. Simpson, Public Defender and Howard C. Koopman by Deborah R. Sallings, Deputy Public Defenders, Little Rock, for appellant.\nSteve Clark, Atty. Gen. by Alice Ann Burns, Asst. Atty. Gen., Little Rock, for appellee.\nHOLT, Justice.\nOn June 16, 1981, the appellant was charged with committing the offenses of aggravated robbery and theft of property on June 2, 1981. The information also charged that the appellant was a habitual offender, having been convicted of four or more previous felonies and, therefore, should have his sentence increased pursuant to Ark.Stat.Ann. \u00a7 41-1001 (Repl.1977). In January, 1982, a jury found appellant guilty of both offenses and in a bifurcated proceeding assessed his punishment, as a habitual offender, at life imprisonment for aggravated robbery and twenty years imprisonment for theft of property.\nThe trial court determined that the substantive law in effect at the date of the offense governs, and, therefore, the jury was instructed on the range of sentences found in Ark.Stat.Ann. \u00a7 41-1001 (Repl. 1977), which was in effect on the date of the offense, rather than Act. 620 (1981), \u00a7 41-1001 (Supp.1981), which became effective after the offense. On the other hand, the trial court determined that Act 252 (1981), Ark.Stat.Ann. \u00a7 41-1005 (Supp. 1981), by which the court and not the jury determines the number of previous convictions, is procedural rather than substantive. Since the procedural law in effect on the date of the trial, rather than the date of the *347 offense governs, the trial court followed the procedure stated in Act 252. The previous statute, Ark.Stat.Ann. \u00a7 41-1001 (Repl. 1977) provided that the jury would determine the number of previous convictions.\nSummarizing, the appellant was sentenced in accordance with the range of punishments provided in the habitual offender statute, Ark.Stat.Ann. \u00a7 41-1001 (Repl. 1977), which was in effect at the time of the alleged offenses, but the court, rather than the jury, determined the number of prior felony convictions, as Act 252, Ark.Stat. Ann. \u00a7 41-1005 (Supp.1981), provides.\nThe appellant makes three arguments for reversal. First, he argues that the determination of the number of prior felony convictions by the judge deprived him of his right to have the jury determine the facts. Second, Act 252 violates Art. 7, \u00a7 23, Ark. Constitution (1874), which says, \"Judges shall not charge juries with regard to matters of fact, but shall declare the law ...\" Third, if the trial judge was correct in making the determination of the number of prior felonies pursuant to Act 252, he also should have instructed the jury on the new range of punishments found in Act 620 of 1981, which arguably would be less harsh as applied to him.\nThe state responds that the appellant is precluded from raising these arguments on appeal for want of a proper objection below. With respect to the appellant's third argument the state clearly is correct. The appellant's attorney not only failed to object to the use of the range of punishments in the act which existed at the time of the offense, he actually agreed with the trial court that \"it's substantive and would depend on the date of the offense.\" The appellant cannot agree with a ruling by the trial court and then attack that ruling on appeal. Wicks v. State, 270 Ark. 781, 606 S.W.2d 366 (1980).\nThe appellant's first two arguments are but different ways of contending that Act 252 is unconstitutional because it grants to the trial court duties that only the jury may perform. In Price v. State, 276 Ark. 80, 632 S.W.2d 429 (1982), we held that we need not reach the question of the constitutionality of Act 252 if the number of prior felony convictions is not disputed. Here, it is undisputed that the appellant had been convicted of eight prior felonies. The appellant, however, claims that he pleaded guilty simultaneously to the last three felonies, which he understood from plea negotiations, would run concurrently and count as only one conviction. However, each plea of guilty to each offense is considered as a separate and previous conviction, even though concurrent sentences are imposed, under the habitual offender statutes. Blackmon v. State, 272 Ark. 157, 612 S.W.2d 319 (1981). Further, a defendant's claim of innocence with respect to some of the established prior convictions is irrelevant. Harris v. State, 273 Ark. 355, 620 S.W.2d 289 (1981). Since the number of prior felony convictions is not actually disputed by the appellant, this case is in the same posture as Price v. State, supra, where we deemed it unnecessary to reach the question of the constitutionality of Act 252.\nAffirmed.\nGEORGE ROSE SMITH, J., concurs.\nPURTLE, J., dissents.\nGEORGE ROSE SMITH, Justice, concurring.\nIt seems to me that the court is in effect saying that the provisions of Act 252, permitting the trial judge to determine the number of previous convictions, are constitutional and separable when the facts are undisputed. That is certainly my view.\nPURTLE, Justice, dissenting.\nIt is my opinion that the number of prior convictions is a factual question of a substantive nature which should be decided by the jury. I think the provisions of Act 252 allowing the court to determine the number of previous convictions deprive an accused of the right to a jury trial on this portion of the accusations.\n"} -{"text": " United States Court of Appeals\n Fifth Circuit\n F I L E D\n IN THE UNITED STATES COURT OF APPEALS\n FOR THE FIFTH CIRCUIT December 17, 2004\n\n Charles R. Fulbruge III\n Clerk\n No. 04-20299\n Conference Calendar\n\n\n\nUNITED STATES OF AMERICA,\n\n Plaintiff-Appellee,\n\nversus\n\nJUAN GUARDADO-ORTEGA, also known as Jorge Guardado-Ortega,\n\n Defendant-Appellant.\n\n --------------------\n Appeal from the United States District Court\n for the Southern District of Texas\n USDC No. 4:03-CR-438-ALL\n --------------------\n\nBefore KING, Chief Judge, and DeMOSS and CLEMENT, Circuit Judges.\n\nPER CURIAM:*\n\n Juan Guardado-Ortega (\u201cGuardado\u201d) appeals the sentence\n\nimposed following his guilty-plea convictions for use of a non-\n\nimmigrant visa obtained by fraud and for illegal reentry\n\nfollowing deportation subsequent to a conviction for an\n\naggravated felony. Guardado argues that the district court erred\n\nby finding that his California felony convictions for possession\n\nof cocaine and possession of a controlled substance were\n\naggravated felonies for purposes of U.S.S.G. \u00a7 2L1.2(b)(1)(C) and\n\n *\n Pursuant to 5TH CIR. R. 47.5, the court has determined\nthat this opinion should not be published and is not precedent\nexcept under the limited circumstances set forth in 5TH CIR.\nR. 47.5.4.\n\f No. 04-20299\n -2-\n\n8 U.S.C. \u00a7 1101(a)(43)(B), because his offenses were punishable\n\nonly as misdemeanors under federal law.\n\n Guardado\u2019s argument is foreclosed by this court\u2019s opinion in\n\nUnited States v. Hinojosa-Lopez, 130 F.3d 691, 694 (5th Cir.\n\n1997). Accordingly, Guardado\u2019s sentence is AFFIRMED.\n\f"} -{"text": " United States Court of Appeals\n FOR THE EIGHTH CIRCUIT\n ___________\n\n No. 10-1112\n ___________\n\nUnited States of America, *\n *\n Appellee, *\n * Appeal from the United States\n v. * District Court for the\n * Southern District of Iowa.\nTimothy Jermaine Gunn, *\n * [UNPUBLISHED]\n Appellant. *\n ___________\n\n Submitted: July 20, 2010\n Filed: July 28, 2010\n ___________\n\nBefore WOLLMAN, MELLOY, and GRUENDER, Circuit Judges.\n ___________\n\nPER CURIAM.\n\n\n In this direct criminal appeal, Timothy Gunn challenges the sentence the district\n 1\ncourt imposed following his guilty plea to knowingly and intentionally conspiring to\ndistribute at least 50 grams of a mixture containing cocaine base, in violation of 21\nU.S.C. \u00a7\u00a7 841(a)(1), (b)(1)(A), and 846. On appeal, counsel has moved to withdraw\nand has filed a brief under Anders v. California, 386 U.S. 738 (1967). Gunn has filed\na pro se supplemental brief, arguing that the court should have held a hearing to\n\n\n 1\n The Honorable John A. Jarvey, United States District Judge for the Southern\nDistrict of Iowa.\n\fevaluate his competency, that trial counsel was ineffective, and that the district court\nimproperly denied his motion to withdraw his plea.\n\n We conclude that the issues raised in the direct appeal fall within the scope of\nthe appeal waiver that Gunn entered into knowingly and voluntarily and that\nenforcement of the waiver would not result in a miscarriage of justice. See United\nStates v. Andis, 333 F.3d 886, 890-92 (8th Cir. 2003) (en banc).2\n\n Finally, having reviewed the record independently pursuant to Penson v. Ohio,\n488 U.S. 75 (1988), we find no nonfrivolous issues that are not covered by the appeal\nwaiver. Accordingly, we grant counsel leave to withdraw, and we dismiss the appeal.\n ______________________________\n\n\n\n\n 2\n The issues raised by Gunn\u2019s pro se supplemental brief are more properly the\nsubject of a proceeding brought pursuant to 28 U.S.C. \u00a7 2255, and thus we do not\naddress them at this time.\n\n -2-\n\f"} -{"text": " COURT OF APPEALS OF VIRGINIA\n\n\nPresent: Judges Baker, Elder and Fitzpatrick\n\n\nMERCHANT'S TIRE\nAND\nFIRST NATIONAL INSURANCE COMPANY OF AMERICA\n\nv. Record No. 1880-95-1 MEMORANDUM OPINION *\n PER CURIAM\nEDWIN CHARLES HOLDEN DECEMBER 27, 1995\n\n\n FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION\n (Robert C. Baker, Jr.; Mell, Brownell & Baker,\n on brief), for appellants.\n\n (Byron A. Adams, on brief), for appellee.\n\n\n\n Merchant's Tire and its insurer (collectively referred to as\n\nemployer) appeal a decision of the Workers' Compensation\n\nCommission (commission) awarding benefits to Edwin C. Holden\n\n(claimant). Employer contends that the commission erred in\n\nfinding that claimant sustained an injury by accident arising out\n\nof and in the course of his employment on September 5, 1994.\n\nSpecifically, employer argues that the commission erred in\n\nreversing the deputy commissioner's credibility determination and\n\nin not following this Court's holding in Pence Nissan Oldsmobile\nv. Oliver, 20 Va. App. 314, 456 S.E.2d 541 (1995). Finding no\n\nerror, we affirm the commission's decision.\n\n On appeal, we view the evidence in the light most favorable\n\nto the prevailing party below. R.G. Moore Bldg. Corp. v.\n\n *\n Pursuant to Code \u00a7 17-116.010 this opinion is not\ndesignated for publication.\n\fMullins, 10 Va. App. 211, 212, 390 S.E.2d 788, 788 (1990).\n\nFactual findings made by the commission will be upheld on appeal\n\nif supported by credible evidence. James v. Capitol Steel\n\nConstr. Co., 8 Va. App. 512, 515, 382 S.E.2d 487, 488 (1989).\n\n On September 5, 1994, claimant worked for employer as a\n\ngeneral service mechanic. He testified that, on that date, he\n\nfelt a sharp pain in his lower back while twisting his body and\n\nlifting an automobile tire from a stand-up tire machine. The\n\npain was so severe that it caused him to drop the tire and drop\n\nto his knees. Claimant was not able to complete his work shift\n\ndue to increasing back pain. The next day claimant told Jay\n\nMyers, the assistant store manager, about the incident and his\n\ninjury. Thereafter, claimant reported to Sentara Hampton General\n\nHospital's emergency room for treatment. The emergency room\n\nattending physician reported a history of lifting at work the\n\nprevious day, with an acute onset of low back pain. He diagnosed\n\nan acute lumbar strain and referred claimant to Dr. Bruce Reid,\n\nan orthopedic surgeon.\n On September 12, 1994, Dr. Reid noted that claimant's back\n\npain began on September 5, 1994, but that claimant did not admit\n\nto any specific episode at work. Dr. Reid also noted that\n\nclaimant believed the sum total of his work activities caused his\n\nback pain. Dr. Reid diagnosed myofascial-type pain and a\n\nthoracic/lumbar strain. On November 10, 1994, after a short\n\ncourse of physical therapy, Dr. Reid released claimant to return\n\n\n\n 2\n\fto full-duty. Claimant denied telling Dr. Reid that his injury\n\ndid not result from a specific incident at work. Claimant also\n\ndenied telling Dr. Reid that he believed the sum total of his\n\nlifting activities at work caused his injury.\n\n The deputy commissioner did not accept claimant's testimony\n\nbecause it was not consistent with the medical history collected\n\nby Dr. Reid. The full commission reversed the deputy's\n\ndetermination, and found that\n the claimant has met his burden. He\n\n testified that he felt a sharp pain in his\n\n lower back while lifting a tire and twisting.\n\n The record reflects that the claimant left\n\n work due to his pain. His testimony that he\n\n informed the assistant manager of the injury\n\n the following day is uncontradicted. We next\n\n consider whether the medical record supports\n\n the claimant's testimony. A medical history\n\n cannot be relied on to determine how an\n\n accident occurred. Board of Supervisors v.\n\n Martin, 3 Va. App. 139, 348 S.E.2d 540\n\n (1986), appeal dismissed, 363 S.E.2d 703 (Va.\n\n 1987). However, it is admissible as either a\n\n prior consistent or inconsistent statement,\n\n or as an admission of a party opponent. 2\n\n Charles E. Friend, The Law of Evidence in\n\n\n\n\n 3\n\f Virginia, \u00a7\u00a7 18-33, 34 (4th ed. 1993). Here,\n\n the initial treating physician noted a\n\n history of lifting at work, with an acute\n\n onset of lower back pain. His diagnosis of\n\n an acute lumbar strain is more consistent\n\n with an injury from an identifiable incident,\n\n rather than a cumulative trauma injury.\n\n If, as in this case, \"the deputy commissioner's\n\ndetermination of credibility is based upon the substance of the\n\ntestimony rather than upon the witness's demeanor, such a finding\n\nis as determinable by the full commission as by the deputy.\"\nKroger Co. v. Morris, 14 Va. App. 233, 236, 415 S.E.2d 879, 880\n\n(1992).\n\n Claimant's testimony, which is consistent with the emergency\n\nroom attending physician's notes, provides credible evidence to\n\nsupport the commission's finding that claimant sustained an\n\ninjury by accident arising out of and in the course of his\n\nemployment on September 5, 1994. The deputy commissioner's\n\ncredibility determination was based on the evidence and the\n\nsubstance of claimant's testimony. Therefore, the full\n\ncommission could make its own credibility determination. Id. In\n\nits role as fact finder, the commission was entitled to give\n\nlittle weight to Dr. Reid's history notes in light of claimant's\n\ndenial that he made such statements to Dr. Reid. Moreover,\n\nwithout specifically citing to Pence, the commission followed\n\n\n\n\n 4\n\fPence's directive by considering claimant's description of his\n\naccident in light of the medical histories he gave to his\n\nphysicians. 1\n\n The commission could reasonably infer from claimant's\n\ntestimony and the emergency room attending physician's history\n\nand diagnosis that claimant sustained an identifiable incident on\n\nSeptember 5, 1994, which caused an obvious sudden mechanical or\n\nstructural change in his body. \"Where reasonable inferences may\n\nbe drawn from the evidence in support of the commission's factual\n\nfindings, they will not be disturbed by this Court on appeal.\"\nHawks v. Henrico County Sch. Bd., 7 Va. App. 398, 404, 374 S.E.2d\n\n695, 698 (1988).\n\n For the reasons stated, we affirm the commission's decision.\n\n Affirmed.\n\n\n\n\n 1\n The commission stated that \"a medical history cannot be\nrelied on to determine how an accident occurred.\" Martin, 3 Va.\nApp. at 144, 348 S.E.2d at 542. We note that this rule applies\nwhen the claimant fails to testify to facts showing an injury by\naccident. In that situation, the rule prevents the claimant from\nusing a medical history to meet his burden of proof. Pence, 20\nVa. App. at 318, 456 S.E.2d at 543. As the commission correctly\nnoted, medical histories are admissible to corroborate or impeach\ntestimony where a claimant has testified to facts showing an\ninjury by accident. McMurphy Coal Co. v. Miller, 20 Va. App. 57,\n59, 455 S.E.2d 265, 266 (1995).\n\n\n\n\n 5\n\f"} -{"text": " Case: 12-41431 Document: 00512348408 Page: 1 Date Filed: 08/20/2013\n\n\n\n\n IN THE UNITED STATES COURT OF APPEALS\n FOR THE FIFTH CIRCUIT United States Court of Appeals\n Fifth Circuit\n\n FILED\n August 20, 2013\n No. 12-41431\n Conference Calendar Lyle W. Cayce\n Clerk\n\nUNITED STATES OF AMERICA,\n\n Plaintiff-Appellee\n\nv.\n\nJOSE GUADALUPE NORIEGA-CABRERA,\n\n Defendant-Appellant\n\n\n Appeal from the United States District Court\n for the Southern District of Texas\n USDC No. 1:12-CR-605-1\n\n\nBefore HIGGINBOTHAM, SMITH, and GRAVES, Circuit Judges.\nPER CURIAM:*\n The attorney appointed to represent Jose Guadalupe Noriega-Cabrera has\nmoved for leave to withdraw and has filed a brief in accordance with Anders v.\nCalifornia, 386 U.S. 738 (1967), and United States v. Flores, 632 F.3d 229 (5th\nCir. 2011). Noriega-Cabrera has not filed a response. We have reviewed\ncounsel\u2019s brief and the relevant portions of the record reflected therein. We\nconcur with counsel\u2019s assessment that the appeal presents no nonfrivolous issue\nfor appellate review. Accordingly, counsel\u2019s motion for leave to withdraw is\nGRANTED, counsel is excused from further responsibilities herein, and the\nAPPEAL IS DISMISSED. See 5TH CIR. R. 42.2.\n\n *\n Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not\nbe published and is not precedent except under the limited circumstances set forth in 5TH CIR.\nR. 47.5.4.\n\f"} -{"text": "\n235 F.Supp.2d 736 (2002)\nJustine SMELTZER, Plaintiff,\nv.\nNancy R. HOOK et al., Defendants.\nNo. 4:02-CV-137.\nUnited States District Court, W.D. Michigan, Southern Division.\nAugust 29, 2002.\n*737 *738 Justine Smeltzer, Muskegon Heights, MI, Pro se.\n\nOPINION\nMCKEAGUE, District Judge.\nThis is a civil rights action brought by a state prisoner pursuant to 42 U.S.C. \u00a7 1983. Under the Prison Litigation Reform Act, PUB.L. No. 104-134, 110 STAT. 1321 (1996) (\"PLRA\"), \"no action shall be brought with respect to prison conditions ... until such administrative remedies as are available are exhausted.\" 42 U.S.C. \u00a7 1997e(a). Because Plaintiff has failed to demonstrate exhaustion of available administrative remedies, the Court will dismiss his complaint without prejudice.\n\nDiscussion\n\nI. Factual Allegations\n\nPlaintiff is currently incarcerated in the Brooks Correctional Facility. In his pro se complaint, Plaintiff sues the following Brooks employees: Nancy Hook, L. Jones, Mary Berghuis, Jo Ann Bach, R. Brand, J. Minnerick and unknown parties. In addition, Plaintiff sues the Michigan Department of Corrections and the State of Michigan.\nIn August 2001, Plaintiff pled no contest to two counts of third-degree sexual conduct with regard to his minor daughter, and was sentenced to imprisonment of 10-15 years. In March 2002, Plaintiff's parental rights were terminated over his objections by the Hillsdale County Circuit Court. The state court also entered an order that Plaintiff \"shall have no contact, in person, by letter or by phone, with the minor children or Leann Smeltzer [Plaintiff's wife].\" Several administrative hearings were held at Brooks as a result of Plaintiff's attempts to communicate with his wife in violation of the no contact order. The first hearing, held on April 8, 2002, concerned three letters that Plaintiff had written to his wife. (See 4/8/02 Administrative Hearing Report, docket # 5). The hearing officer, Defendant L. Jones, determined that the mail would be turned over to the Hillsdale County Circuit Court. Plaintiff was notified that further attempts to contact his wife or children would result in appropriate disciplinary action.\nThe second administrative hearing, held on April 17, 2002, concerned Plaintiff's attempts to contact his wife by phone. (See 4/17/02 Administrative Hearing Report, docket # 5). In order to use the telephone, a prisoner must complete a form identifying the names and numbers of no more than twenty people and organizations that he wants to be able to call. See MICH. DEP'T OF CORR. Policy Directive 05.03.130, L *739 (\"Prisoner Telephone Use\"). The prisoner is provided a PIN which allows access to the numbers on his list. Id. Plaintiff's wife's telephone number was not on his list, but he allegedly used another prisoner's PIN in order to make nine phone calls to his wife. The telephone policy provides that a prisoner who abuses his telephone privileges may be restricted from using the phone. Policy Directive 05.03.130, FF. Making a call in violation of state law and using another prisoner's PIN are specifically listed in the policy as examples of abuse. Id. at FF(3), (10). As a result of Plaintiff's conduct, he was placed on a permanent telephone restriction, whereby he is only permitted to make calls to attorneys and legitimate legal services organizations. Id. at HH. Under the telephone policy, the warden must receive written approval from the Regional Prisoner Administrator if the restriction exceeds six months. Id. at GG. Accordingly, Warden Berguis sought approval from Regional Prisoner Administrator Jo Ann Bach. (See 5/1/02 Memorandum, docket # 5.)\nAt least three more administrative hearings were held regarding Plaintiff's attempts to send mail to his wife. (See 4/26/02, 6/3/02, 6/19/02 Administrative Hearing Reports, docket # 5). In the June 19 administrative hearing report, Hearing Officer Jones explicitly ordered Plaintiff to cease any and all contact with his wife and children. Defendant Nancy R. Hook also wrote misconduct reports against Plaintiff for writing to his wife in violation of the no contact order. The April 25 major misconduct report indicated that Plaintiff attempted to conceal his conduct by using another prisoner's return address and addressing the letter to his wife using her middle and maiden names. (See 4/25/02 Major Misconduct Report, docket # 5.) Plaintiff was ultimately found guilty of a minor misconduct for unauthorized communication. (See 5/9/02 Major Misconduct Hearing Report, docket # 5.) The hearing officer found that Plaintiff was not guilty of the major offense because the April 8, 2002 administrative hearing report did not include a direct order not to contact his wife or children. Plaintiff was found guilty of two additional charges of unauthorized communication. (See 5/21/02, 5/22/02 Minor Misconduct Violation and Hearing Reports, docket # 5.)\nPlaintiff claims that the permanent telephone restriction violates his First, Eighth and Fourteenth Amendment rights. He further claims that Defendants have opened and interfered with his outgoing and incoming mail in violation of his Fourth, Eighth and Fourteenth Amendment rights. Plaintiff also raises claims regarding the adequacy of the prison grievance process. He contends that Defendants have deprived him of his First Amendment right to petition the government for redress and his Fifth Amendment due process rights by failing to provide a fair and just grievance process.\n\nII. Lack of exhaustion of available administrative remedies\n\nPlaintiff has failed to sufficiently allege and show exhaustion of available administrative remedies. Pursuant to 42 U.S.C. \u00a7 1997e(a), a prisoner bringing an action with respect to prison conditions under 42 U.S.C. \u00a7 1983 must exhaust available administrative remedies. See Porter v. Nussle, 534 U.S. 516, 122 S.Ct. 983, 152 L.Ed.2d 12 (2002); Booth v. Churner, 532 U.S. 731, 121 S.Ct. 1819, 149 L.Ed.2d 958 (2001). The exhaustion requirement is mandatory and applies to all suits regarding prison conditions, regardless of the nature of the wrong or the type of relief sought. Porter, 122 S.Ct. at 984; Booth, 532 U.S. at 741, 121 S.Ct. 1819. A district court must enforce the exhaustion requirement sua sponte. Brown v. Toombs, 139 F.3d 1102, 1104 (6th Cir.), *740 cert. denied, 525 U.S. 833, 119 S.Ct. 88, 142 L.Ed.2d 69 (1998); accord Wyatt v. Leonard, 193 F.3d 876, 879 (6th Cir.1999).\nA prisoner must allege and show that he has exhausted all available administrative remedies and should attach to his \u00a7 1983 complaint the administrative decision disposing of his complaint, if the decision is available. Brown, 139 F.3d at 1104. In the absence of written documentation, the prisoner must describe with specificity the administrative proceeding and its outcome so that the court may determine what claims, if any, have been exhausted. Knuckles El v. Toombs, 215 F.3d 640, 642 (6th Cir.), cert. denied, 531 U.S. 1040, 121 S.Ct. 634, 148 L.Ed.2d 542 (2000). A prisoner must also specifically mention the involved parties in the grievance to alert the prison officials of the problems so that the prison has a chance to address the claims before they reach federal court. Curry v. Scott, 249 F.3d 493, 505 (6th Cir.2001).\nPlaintiff's claims are the type that may be grieved through the three-step prison grievance process. See MICH. DEP'T OF CORR., Policy Directive 03.02.130, \u00b6 E (may grieve \"alleged violations of policy and procedure or unsatisfactory conditions of confinement\") (effective Nov. 1, 2000). Plaintiff wrote a Step I grievance on June 5, 2002, claiming that staff had been wrongfully opening his outgoing mail and preventing it from being delivered. (See Grievance No. LRF XX-XX-XXXXX-XXB). The grievance generally referred to \"staff persons,\" but did not name any specific individuals in his grievance. The grievance was rejected at Step I by Defendant Minnerick because it contained extraneous information and was untimely. A rejection of a grievance may be appealed. MICH. DEP'T OF CORR., Policy Directive 03.02.130, \u00b6 H (effective Oct. 11, 1999 and Nov. 1, 2000); see also Little v. Bahr, 221 F.3d 1335, 2000 WL 921978, at *1 (6th Cir.2000) (holding that a rejection of a grievance is itself a response that must be appealed). Plaintiff does not allege or show that he appealed the rejection of his grievance to Step II.\nA plaintiff must pursue all levels of the administrative procedure before filing an action in federal court. See Freeman, 196 F.3d at 645 (\"While we recognize that plaintiff made some attempt to go through the prison's grievance procedures, we must dismiss plaintiff's complaint because he filed his federal complaint before allowing the administrative process to be completed.\"); Lutchey v. Wiley, 188 F.3d 508, 1999 WL 645951, at *1 (6th Cir.1999) (dismissal of claim for lack of exhaustion was appropriate where prisoners failed to complete the review process before bringing their lawsuit); Parker v. McGinnis, 181 F.3d 102, 1999 WL 283900, at *2 (6th Cir.1999) (\"Furthermore, even though Larkins may not have aborted the grievance procedure regarding the ninth cause of action raised in his complaint, such grievance was not resolved prior to the filing of either his complaint or amended complaint and, consequently, is unexhausted.\"), cert. denied, 528 U.S. 953, 120 S.Ct. 378, 145 L.Ed.2d 295 (1999); Tucker v. McAninch, 162 F.3d 1162, 1998 WL 552940, at *2 (6th Cir.1998) (plaintiff failed to complete the administrative process when he had grieved and appealed to the warden, but had one more appeal remaining to the director of the department). Because Plaintiff failed to complete the grievance process, the Court finds that Plaintiff has failed to demonstrate exhaustion of available administrative remedies with regard to the claims arising from his mail.\nBefore the no contact order was entered by the Hillsdale County Circuit Court on March 21, 2002, Plaintiff wrote two grievances claiming that prison staff *741 failed to update his wife's telephone number on his list. According to Plaintiff, his wife had moved and had a new phone number. Plaintiff wrote the first grievance on January 31, 2002. (See Grievance No. LRF XX-XX-XXXXX-XXA, docket # 5.) The Step I response indicated that Plaintiff's request could not be processed until they received a letter from Plaintiff's wife. The response further indicated that the letter already submitted by Plaintiff did not appear to come from Plaintiff's wife. Plaintiff appealed to Step II on March 6, 2002. By the time Warden Berghuis responded at Step II, the no contact order had been entered. The Step II response stated that, as a result of the no contact order, Plaintiff would not be permitted to add or change telephone numbers with regard to wife and children. Plaintiff maintains that he appealed the Grievance to Step III, but never received a response. In light of Plaintiff's allegations, the Court finds that Plaintiff completed the grievance process with regard to Grievance No. LRF XX-XX-XXXXX-XXA.\nOn March 2, 2002, Plaintiff wrote the second grievance concerning prison staff's failure to update his wife's telephone number. (See Grievance No. LRF XX-XX-XXXXX-XXA, docket # 5.) The grievance was rejected at Step I by Defendant Minnernick because it was duplicative of LRF XX-XX-XXXXX-XXA. As set forth above, the rejection of a grievance can be appealed. See Policy Directive 03.02.130, \u00b6 H. Plaintiff does not allege or show that he appealed the rejection of his grievance to Step II. Accordingly, Plaintiff failed to complete the grievance process with regard to Grievance No. LRF XX-XX-XXXXX-XXA.\nPlaintiff also wrote a grievance on April 15, 2002, challenging the imposition of the permanent phone restriction. (See Grievance No. LRF XX-XX-XXXX-XXXA, docket # 5.) The Step I and Step II responses indicated that the restriction was properly imposed. Plaintiff contends that he appealed to Step III, but did not receive a response. Taking Plaintiff's allegations as true, the Court accepts at this juncture that Plaintiff also completed the administrative grievance process with regard to Grievance No. LRF XX-XX-XXXX-XXXA.\nWhile Plaintiff completed the grievance process with regard to Grievance Nos. LRF XX-XX-XXXXX-XXA (updating wife's phone number) and LRF XX-XX-XXXX-XXXA (phone restriction), Plaintiff did not mention any of the named Defendants in those grievances. In Curry, 249 F.3d 493, a group of African-American inmates at an Ohio state prison sued corrections officers and supervisors under \u00a7 1983, alleging the defendants violated their Eighth Amendment rights. Among other things, the plaintiffs claimed that Officer Scott assaulted each of them while they were connected to each other by a \"rec-chain,\" a long length of chain used to transport prisoners. The plaintiffs further claimed that Officer Howard witnessed Scott's assault on them, but failed to intervene. The Sixth Circuit held that the plaintiffs failed to sufficiently exhaust their administrative remedies with regard to Officer Howard because his name was not referenced in any of the prisoners' grievances. Id. at 505. The Court reasoned:\nThe claim against Howard, however, is a separate claim, against a separate individual, premised on a separate and independent legal theory. Because Howard was not mentioned in the prisoners' grievances, [prison officials] did not know that the prisoners specifically had a grievance against him, so [prison officials] had no reason to pursue any claim or disciplinary action against Howard based on the prisoners' official complaints. As this Court stated in Freeman v. Francis, 196 F.3d at 644, \"the importance of using the prison grievance process [is] to alert prison officials to *742 problems.\" The plaintiffs' grievances may have alerted [prison officials] to problems with Scott, but they did not reasonably alert [prison officials] to problems with Howard.\nId. The logic of Curry does not apply with equal force to this case. Plaintiff does not raise Eighth Amendment claims arising from alleged unauthorized conduct; rather, Plaintiff challenges a permanent telephone restriction that was imposed pursuant to prison policy. In addition to the hearing officer who recommended the telephone restriction, Plaintiff sues Warden Berguis and Regional Prison Administrator Jo Ann Bach, who approved the restriction. Under the circumstances of this case, it does not appear that prison officials responding to Plaintiff's grievances were hampered in their consideration of Plaintiff's claims by his failure to name specific individuals in his grievances.\nAssuming Plaintiff properly exhausted his claims arising from the telephone restriction, his action is nonetheless subject to dismissal pursuant to the \"total exhaustion rule.\" Under the total exhaustion rule, the presence of an unexhausted claim warrants dismissal not just of that claim, but of the entire action. There is currently a split in this District concerning the validity of the \"total exhaustion\" interpretation of 42 U.S.C. \u00a7 1997e(a). Compare Keenan v. Twommy, No. 1:97-cv-549 (W.D.Mich. July 29, 1999) (applying total exhaustion rule) with Jenkins v. Toombs, 32 F.Supp.2d 955 (W.D.Mich.1999) (rejecting total exhaustion rule). In Knuckles El, 215 F.3d at 642, the Sixth Circuit \"reserve[d] to another day the question of whether `exhausted claims' in a `mixed complaint' should be addressed when such claims would otherwise meet the pleading requirement or whether such claims should be dismissed in their entirety.\" The Court has not published any case since Knuckles El expressing any opinion with regard to the total exhaustion rule.\nIn 2000, the Sixth Circuit issued five unpublished decisions, which, at first glance, appear inconsistent with the total exhaustion rule. In each of the opinions, the Court stated, \"If a complaint contains exhausted and unexhausted claims, the district court may address the merits of the exhausted claims and dismiss only those that are unexhausted.\" See Williams v. McGinnis, 234 F.3d 1271, 2000 WL 1679471, at *2 (6th Cir.2000); Fisher v. Wickstrom, No. 00-1162, 2000 WL 1477232, at *1 (6th Cir. Sept. 25, 2000); McElhaney v. Elo, 230 F.3d 1358, 2000 WL at 1477498, at *3 (6th Cir.2000); Wash v. Rout, 215 F.3d 1328, 2000 WL 658925 (6th Cir.2000), cert. denied, 531 U.S. 947, 121 S.Ct. 347, 148 L.Ed.2d 279 (2000); Riley v. Richards, 210 F.3d 372, 2000 WL 332013, at *2 (6th Cir.2000). These cases all relied upon Hartsfield v. Vidor, 199 F.3d 305, 309 (6th Cir.1999). While the Hartsfield Court dismissed the unexhausted claims and reached the merits of exhausted claims, the issue of total exhaustion was not before the Court. Likewise, total exhaustion was not at issue in any of the above cited unpublished cases. As a result, these cases have little instructive value on the issue of total exhaustion.\nDuring the same time period that the unpublished decisions were issued in Williams, Fisher, McElhaney, Wash and Riley, the Sixth Circuit affirmed this Court's denial of Keenan's motion for relief from judgment following dismissal of his civil rights action pursuant to the total exhaustion rule. See Keenan v. Twommey, 229 F.3d 1152, 2000 WL 1175621, at *1 (6th Cir.2000). In the unpublished opinion, the Sixth Circuit did not use the term \"total exhaustion,\" but affirmed this Court's explicit application of the total exhaustion rule, stating, \"Essentially, Keenan did not carry his burden of demonstrating that he exhausted available administrative remedies regarding *743 his claim.\" Keenan, 229 F.3d 1152, 2000 WL 1175621 at *1 (citing Brown, 139 F.3d at 1103). Furthermore, in a recent unpublished decision, the Sixth Circuit again affirmed this Court's application of the total exhaustion rule. See Kemp v. Jones, 42 Fed.Appx. 744, 745 (6th Cir.2002). In that case, the plaintiff claimed that the defendants interfered with his legal mail, were negligent in handling his mail, and retaliated against him. The Sixth Circuit held that this Court properly dismissed the plaintiff's action pursuant to \u00a7 1997e(a) because, while the plaintiff exhausted his other claims, he did not exhaust his administrative remedies with regard to his retaliation claim. Id. (citing Mack v. DeWitt, 40 Fed.Appx. 36, 38) (6th Cir.2002) (\"When a prisoner fails to exhaust his administrative remedies before filing a civil rights complaint in federal court, or only partially exhausts administrative remedies, dismissal of the complaint is appropriate.\") Accordingly, there is some indication that the Sixth Circuit may adopt the total exhaustion rule.\nThe Eighth Circuit, the only federal circuit court deciding the issue, applied the total exhaustion rule in a published opinion. See Graves v. Norris, 218 F.3d 884, 886 (8th Cir.2000). The federal district courts remain split on the issue. Compare Rivera v. Whitman, 161 F.Supp.2d 337, 343 (D.N.J.2001) (holding that plain language and policy interests required \"total exhaustion\" rule), abrogated on other grounds by Ray v. Kertes, 285 F.3d 287, 293 n. 6 (3d Cir.2002), Thorp v. Kepoo, 100 F.Supp.2d 1258 (D.Haw.2000) (same), Taylor v. Clarke, No. C 99-4190, 2002 WL 535421, at *2 (N.D.Cal. Apr. 3, 2002), Julian-Bey v. Crowley, No. 2:99-cv-107, 2000 U.S.Dist. LEXIS 14071 (W.D.Mich. Sept. 21, 2000), Keenan, No. 1:97-cv-549, 1999 U.S.Dist. LEXIS 11829 (W.D.Mich. July 29, 1999) (mem. opinion and order denying FED.R.CIV.P. 60(b) motion) (same), aff'd, 229 F.3d 1152, 2000 WL 1175621 (6th Cir. 2000), Keenan, No. 1:97-cv-549 (W.D.Mich. Sept. 4, 1998) (opinion and order dismissing case) (same), Abenth v. Palmer, No. C 96-3938 MHP, 1997 WL 255332 (N.D.Cal. Apr. 28, 1997) (same), Estrada v. Gomez, No. C 97-297 SI PR, 1997 WL 220313 (N.D.Cal. Apr. 22, 1997) (same), and Eakins v. Stainer, No. C 97-694 SI (pr), 1997 WL 122866 (N.D.Cal. Mar. 5, 1997) (same) with Johnson v. True, 125 F.Supp.2d 186 (W.D.Va.2000) (holding that \"total exhaustion\" rule contradicts congressional intent), Cooper v. Garcia, 55 F.Supp.2d 1090 (S.D.Cal.1999) (same), and Jenkins v. Toombs, 32 F.Supp.2d 955 (W.D.Mich.1999) (same).\nThe total exhaustion rule is supported both by the plain meaning of 42 U.S.C. \u00a7 1997e(a) and strong policy interests. The first rule of statutory interpretation is that \"[t]here is ... no more persuasive evidence of the purpose of a statute than the words by which the legislature undertook to give expression to its wishes.\" United States v. American Trucking Ass'ns, Inc., 310 U.S. 534, 543, 60 S.Ct. 1059, 84 L.Ed. 1345 (1940). Departure from the language of the legislature and resort to judicially created rules of statutory construction is appropriate only in the \"rare cases [in which] the literal application of a statute will produce a result demonstrably at odds with the intentions of its drafters ... or when the statutory language is ambiguous.\" Kelley v. E.I. DuPont de Nemours & Co., 17 F.3d 836, 842 (6th Cir.1994) (citation and internal quotations omitted). The plain meaning of the statute controls the court's interpretation in all other instances. Kelley, 17 F.3d at 842. Statutory words are uniformly presumed, unless the contrary appears, to be used in their ordinary and usual sense, and with the meaning commonly attributed to them. Caminetti v. *744 United States, 242 U.S. 470, 485-86, 37 S.Ct. 192, 61 L.Ed. 442 (1917).\nSection 1997e(a) provides, \"No action shall be brought with respect to prison conditions under section 1983 of this title ... until such administrative remedies as are available are exhausted.\" 28 U.S.C. \u00a7 1997e(a) (emphasis added). By using the word \"action\" instead of \"claim,\" Congress indicated that a prisoner is required to exhaust all claims before his action may proceed. See Rivera, 161 F.Supp.2d at 340; Keenan, 1999 U.S.Dist. Lexis 11829, at *13-14. \"Had Congress intended to permit the piecemeal adjudication of claims relating to prison conditions, the statute would have precluded the bringing of unexhausted claims rather than actions.\" Thorp, 100 F.Supp.2d at 1263 (emphasis in original). The use of the words \"action\" and \"claim\" in other provisions of \u00a7 1997e are further evidence of Congress' awareness of the difference between the two terms. Section 1997e(c)(1) provides that the district court shall dismiss any \"action\" which is frivolous, malicious, or fails to state a claim. However, \u00a7 1997e(c)(2) provides that the district court may dismiss a \"claim\" which is frivolous, malicious or fails to state a claim without first requiring exhaustion of administrative remedies. Congress realized that requiring dismissal without prejudice under \u00a7 1997(a) might prevent a court from dismissing with prejudice for frivolousness or failure to state a claim. Section \u00a7 1997e(c)(2) serves to reconcile \u00a7 1997(a) and \u00a7 1997(e)(1) \"by allowing a court to dismiss an unexhausted claim as frivolous, thus preventing an unexhausted claim from `holding up' the dismissal of a frivolous action comprising otherwise exhausted claims.\" Rivera, 161 F.Supp.2d at 341; see also Thorp, 100 F.Supp.2d at 1263 n. 3.[1]\nThe general intent of the PLRA and other strong policy arguments also support a total exhaustion rule. As noted by the Eleventh Circuit, Congress amended section 1997e(a) largely in response to concerns about the heavy volume of frivolous prison litigation in the federal courts. Alexander v. Hawk, 159 F.3d 1321, 1326 n. 11 (11th Cir.1998) (citing 141 Cong.Rec. H14078-02, *H14105 (daily ed. Dec. 6, 1995)). \"Congress desired `to wrest control of our prisons from the lawyers and the inmates and return that control to competent administrators appointed to look out for society's interests as well as the legitimate needs of prisoners.'\" Id. (quoting 141 Cong.Rec. S14408-01, *S14418 (daily ed. Sept. 27, 1995)).\nThe total exhaustion rule advances the goals of the PLRA by discouraging frivolous prisoner litigation and conserving judicial resources.\nAs the Third Circuit stated in [Nyhuis v. Reno, 204 F.3d 65 (3d Cir.2000)], \"Inmate-plaintiffs often file claims which are untidy, repetitious, and redolent of legal language. The very nature of such complaints necessitates that courts expend *745 significant and scarce judicial resources to review and refine the nature of the legal claims presented.\" 204 F.3d at 74. \"The administrative process can serve to create a record for subsequent proceedings, it can be used to help focus and clarify poorly pled or confusing claims, and it forces the prison to justify or explain its internal procedures.\" Id. at 76 (citing Wyatt v. Leonard, 193 F.3d 876, 878-79 (6th Cir.1999)). Thus, by requiring that all claims be exhausted before the federal court considers them, \u00a7 1997e(a) ensures that prisoner actions are more focused and that some frivolous claims are screened out. Additionally, the provision frees the federal court from the potentially difficult and time-consuming process of determining precisely which of the often-entangled claims have been exhausted and which have not. Keenan, 1999 U.S.Dist. LEXIS 11829, at *8.\nRivera, 161 F.Supp.2d at 342. The total exhaustion rule also discourages prisoners from bringing unexhausted or frivolous claims. Id. (citing Underwood v. Wilson, 151 F.3d 292, 296 (5th Cir.1998) (\"[D]ismissal may serve as a deterrent to premature filing by [prisoners], thus serving the Congressional purpose of providing relief from frivolous prisoner litigation.\"), cert. denied, 526 U.S. 1133, 119 S.Ct. 1809, 143 L.Ed.2d 1012 (1999)). If only the unexhausted claims were dismissed from a mixed complaint, there would be nothing to deter prisoners from raising unexhausted claims indiscriminately. Moreover, the assessment of a second filing fee after the prisoner has properly exhausted all of his claims also serves as a deterrent against filing unexhausted or frivolous claims. Rivera, 161 F.Supp.2d at 342 (citing Keenan, 1999 U.S.Dist. LEXIS 11829, at *9).\nIn addition, application of a total exhaustion rule in the civil rights context promotes comity in much the same way as in the habeas corpus context, where the total exhaustion rule is clearly established. See Rivera, 161 F.Supp.2d at 342-43; Keenan, 1999 U.S.Dist. LEXIS 11829, at *11-13. Regarding the amendments by the PLRA to \u00a7 1997e(a), the Sixth Circuit stated in Brown v. Toombs, 139 F.3d at 1103:\nThe new statute has extensive benefits. It recognizes that it is difficult to explain why we require full exhaustion in habeas corpus cases involving life and liberty, but allow direct access in prison rights cases under \u00a7 1983. As Justice Stewart stated in Preiser v. Rodriguez, 411 U.S. 475, 491-92, 93 S.Ct. 1827, 36 L.Ed.2d 439 (1973):\nSince these internal problems of state prisons involve issues so peculiarly within state authority and expertise, the states have an important interest in not being bypassed in the correction of these problems. Moreover, because most potential litigation involving state prisoners arises on a day to day basis, it is most efficient and properly handled by the state administrative bodies and the state courts, which are for the most part, familiar with the grievances of state prisoners and in a better physical and practical position to deal with these grievances.\nTherefore, under the principles of comity, prison officials should have a full opportunity to address claims raised by prisoners before they are brought to federal court. By requiring total exhaustion, the federal courts will not only promote comity, but reap the benefits of \"more focused complaints and more developed evidentiary records.\" Rivera, 161 F.Supp.2d at 343.\nBecause Plaintiff's complaint contains exhausted claims and unexhausted claims, the Court finds that he failed to exhaust his administrative remedies as required by \u00a7 1997e(a). Dismissal of this action without prejudice is appropriate when a prisoner has failed to show that he *746 exhausted available administrative remedies. See Freeman, 196 F.3d at 645; Brown, 139 F.3d at 1104; White v. McGinnis, 131 F.3d 593, 595 (6th Cir.1997). Dismissal for failing to exhaust available administrative remedies does not relieve a plaintiff from payment of the civil action filing fee. Omar v. Lesza, No. 97 C 5817, 1997 WL 534361, at *1 (N.D.lll. Aug. 26, 1997). Accordingly, the Court will dismiss Plaintiff's action without prejudice.\n\nIII. Motions\n\nPlaintiff filed an ex parte motion for temporary restraining order (docket # 3) and a motion to serve the complaint (docket # 4) contemporaneously with the filing of his complaint. Because Plaintiff's action will be dismissed without prejudice for failure to exhaust his administrative remedies, his motions will be denied as moot.\n\nConclusion\nHaving conducted the review now required by the Prison Litigation Reform Act, the Court will dismiss Plaintiff's action without prejudice because he has failed to show exhaustion as required by 42 U.S.C. \u00a7 1997e(a). In addition, Plaintiff's motion for temporary restraining order (docket # 3) and motion to serve the complaint (docket # 4) will be denied as moot.\nThe Court must next decide whether an appeal of this action would be in good faith within the meaning of 28 U.S.C. \u00a7 1915(a)(3). See McGore v. Wrigglesworth, 114 F.3d 601, 611 (6th Cir.1997). Because the total exhaustion rule presents a novel legal issue in this Circuit, the Court finds that an appeal would be taken in good faith. Should Plaintiff appeal this decision, the Court will assess the $105 appellate filing fee pursuant to \u00a7 1915(b)(1), see McGore, 114 F.3d at 610-11, unless Plaintiff is barred from proceeding in forma pauperis, e.g., by the \"three-strikes\" rule of \u00a7 1915(g). If he is barred, he will be required to pay the $105 appellate filing fee in one lump sum.\nA Judgment consistent with this Opinion will be entered.\n\nORDER OF DISMISSAL\nIn accordance with the Opinion filed this date:\nIT IS HEREBY ORDERED that Plaintiff's action be DISMISSED without prejudice for lack of exhaustion of available administrative remedies as required by 42 U.S.C. \u00a7 1997e(a).\nIT IS FURTHER ORDERED that Plaintiff's motion for temporary restraining order (docket # 3) and motion to serve the complaint (docket # 4) will be DENIED as moot.\nBecause the total exhaustion rule presents a novel legal issue in this Circuit, the Court finds that an appeal would be taken in good faith. See 28 U.S.C. \u00a7 1915(a)(3); McGore v. Wrigglesworth, 114 F.3d 601, 611 (6th Cir.1997).\nNOTES\n[1] In another provision of the PLRA, Congress defined the term \"action with regard to prison conditions\" as \"any civil proceeding ... with respect to the conditions of confinement or the effects of actions by government officials on the lives of persons confined in prison....\" 18 U.S.C. \u00a7 3626(g)(2); see Booth v. Churner, 206 F.3d 289, 295 (3d Cir.2000) (holding that, because \u00a7 1997e(a) and \u00a7 3626(g)(2) are substantially related, \"it follows from the canon of interpretation invoked in [Sullivan v. Stroop, 496 U.S. 478, 484, 110 S.Ct. 2499, 110 L.Ed.2d 438 (1990)] that the identical terms used in the two sections should be read as conveying the same meaning.\"), aff'd, 531 U.S. 956, 121 S.Ct. 377, 148 L.Ed.2d 291 (2001). Giving the words their plain meaning, a clear distinction can be drawn among the terms \"action\" or \"civil proceeding\" and \"claim.\" See Rivera, 161 F.Supp.2d at 341.\n"} -{"text": " IN THE COURT OF APPEALS OF IOWA\n\n No. 17-1605\n Filed December 19, 2018\n\n\nMICHAEL SCOTT WEISS,\n Applicant-Appellant,\n\nvs.\n\nSTATE OF IOWA,\n Respondent-Appellee.\n________________________________________________________________\n\n\n Appeal from the Iowa District Court for Pottawattamie County, James S.\n\nHeckerman, Judge.\n\n\n\n Michael Weiss appeals the denial of his application for postconviction relief.\n\nAFFIRMED.\n\n\n\n\n Katherine Kaminsky Murphy of Kate Murphy Law, PLC, Glenwood, for\n\nappellant.\n\n Thomas J. Miller, Attorney General, and Thomas E. Bakke, Assistant\n\nAttorney General, for appellee State.\n\n\n\n Considered by Danilson, C.J., and Vogel and Tabor, JJ.\n\f 2\n\n\nDANILSON, Chief Judge.\n\n Michael Weiss appeals the denial of his application for postconviction relief\n\n(PCR), asserting his plea counsel provided constitutionally defective\n\nrepresentation. Weiss failed to prove counsel breached an essential duty and\n\nprejudice resulted. Therefore, we affirm the denial of his PCR application.\n\n Weiss was charged with three counts of sexual abuse in the second degree\n\nafter A.A., age eight or nine years old, told her older brother that Weiss had made\n\nher \u201cmilk\u201d his \u201cdick\u201d more than once and that he had tried to get her to kiss it. She\n\nwanted Weiss to stop. Her brother did not immediately tell anyone because A.A.\n\ndid not want to get in trouble. However, after some time, her brother informed their\n\nparents. The parents contacted law enforcement. On August 2, 2015, a police\n\nreport includes the following:\n\n On August 2, 2015, I Deputy Ryan Olderog 78-56, was\n working patrol for the Pottawattamie County Sheriff\u2019s Office. At 1518\n hours I went en route to XXX for a sexual assault call. The narrative\n from this call read:\n \u201cCALLER ADV HER 9 YOA DAUGHTER IS TELLING HER\n THAT A MONTH AGO A EMPLOYEE THAT WORKS FOR THE\n FARMER THAT FARMS THE LAND AROUND THEM HAD THE\n DAUGHTER SIT ON HIS LAP AND STATED\u2014SEE WHAT YOU DO\n TO ME\u2014THAN HE STOOD UP WITH [H]IS PANTS UNZIPPED\n WITH HIS PENIS HANGING OUT SAYING TO HER DAUGHTER\u2014\n COME ON YOU NEED TO MILK IT\u2014SUSP NOT ON LOC.\u201d\n\nA.A. was interviewed at Project Harmony by a sexual-abuse investigator, which\n\nwas recorded. Weiss\u2019s trial counsel, Jennifer Solberg, was provided the State\u2019s\n\nfile. Solberg took A.A.\u2019s pre-trial deposition.\n\n In a letter, Solberg recommended Weiss accept the State\u2019s final plea offer.\n\nSolberg informed Weiss she believed a jury would find A.A. credible and Weiss\n\nwould likely be convicted. She wrote:\n\f 3\n\n\n Each count is a [twenty-five] year prison sentence with a mandatory\n [seventeen and one half] to serve before you are eligible for parole.\n A judge may or may not run the sentences consecutive to each other.\n Due to the risk of loss at trial my recommendation is to accept the\n plea offer.\n\n On November 12, 2015, a record was made of the plea offer:\n\n [PROSECUTOR]: Defendant is currently charged with three\n class B felonies, sex abuse in the second degree. The State will\n amend one count to sex abuse in the third degree, a forcible class C\n felony, and the second count will be amended to lascivious acts with\n a child, soliciting a child to do a sex act, a class D felony. C is a [ten].\n D is a [five]. We\u2019d ask they be stacked, and that he go to prison for\n a maximum of [fifteen] years.\n THE COURT: So instead of [seventy-five] with mandatory\n minimums, he\u2019d be looking at [fifteen] with no\u2014it would not be\n mandatory, just consecutive sentences.\n [PROSECUTOR]: Yes.\n THE COURT: With no mandatory minimums.\n [PROSECUTOR]: No mandatory minimums.\n\n Weiss acknowledged he understood the plea offer. The prosecutor then\n\noffered to estimate earned-time credit. The court stated:\n\n Well, it is a sex abuse case. Not only that, it is up to how well\n he does in sexual offender treatment. There\u2019s a lot of variables\n involved in that.\n I think the big issue for him is he goes from [seventy-five] with\n mandatory minimums to [fifteen] with no mandatory minimums.\n That\u2019s huge. Huge. All right. Think about that.\n\n On November 13, 2015, Weiss entered an Alford plea1 to one count of\n\nsexual abuse in the third degree and one count of lascivious acts with a child. He\n\nelected to proceed to sentencing three days later. Weiss did not file a motion in\n\narrest of judgment. He did not appeal.\n\n\n\n\n1\n An Alford plea is a variation of a guilty plea; a defendant, while maintaining innocence,\nacknowledges that the State has enough evidence to win a conviction, and consents to\nthe imposition of a sentence. See North Carolina v. Alford, 400 U.S. 25, 37 (1970).\n\f 4\n\n\n On September 19, 2016, Weiss filed a PCR application alleging \u201c[t]here\n\nexists material facts, not previously presented or heard that required vacation of\n\nthe conviction or sentence in the interest of justice.\u201d\n\n Counsel was appointed and depositions of plea counsel and Weiss\u2019s\n\ngirlfriend, Carol Gusman, were taken. At the PCR trial, although his application\n\ndid not allege any specific claims, Weiss complained of various aspects of plea\n\ncounsel\u2019s performance.\n\n Weiss testified Solberg had not provided to him the minutes of testimony or\n\nthe underlying police report. He stated, \u201cAccording to the dates on that police\n\nreport, that I wasn\u2019t even working at\u2014for the farmer no more; and according to\n\nwhat [A.A.\u2019s father] has said, I wasn\u2019t even there at the\u2014at the farm.\u201d Weiss\n\ntestified his last day working at the farm where A.A. lived was July 6, 2015.2 He\n\nasserted he would not have pled guilty if he had seen the police report. Weiss also\n\ntestified he told Solberg to give A.A.\u2019s deposition to Gusman to read. But he stated\n\nSolberg should have informed him Gusman \u201cshouldn\u2019t read [A.A.\u2019s deposition] in\n\ncase we went to trial.\u201d Weiss also testified Solberg misled him by stating he would\n\nnot be in prison more than two years. He stated Solberg had not informed him he\n\nwould be required to participate in the sex-offender-treatment class.\n\n Gusman stated that she would have testified at Weiss\u2019s trial that A.A.\u2019s\n\nfather had a motive to lie and A.A. and her brother liked visiting Gusman and\n\nWeiss. Gusman also testified she found out that because she had read A.A.\u2019s\n\n\n2\n At deposition, A.A. testified she did not remember specific dates but the incidents all\noccurred when she was in second grade (she was in third grade at the time of the\ndeposition) and before the Fourth of July parade, \u201c[a] lot before the Fourth of July.\u201d\nMoreover, the police report notes that on August 2, 2015, a report was received by the\nPottawattamie County Sheriff\u2019s office that a man\u2019s daughter had been abused by a farm\nhand \u201ca month ago,\u201d a few days before Weiss left the farm.\n\f 5\n\n\ndeposition, which was given to her by Solberg, she would be disqualified from\n\ntestifying at Weiss\u2019s trial.\n\n Solberg\u2019s deposition was admitted, and she testified she would have\n\nprovided Weiss with all the materials available to her, that Weiss viewed A.A.\u2019s\n\nrecorded interview at Project Harmony, and was present when A.A. was deposed.\n\nShe also testified she recommended Weiss accept the State\u2019s offer because the\n\nrisk of conviction was great. She informed Weiss he would be immediately eligible\n\nfor parole and may have stated Weiss might get a parole hearing within two years,\n\nbut she would not have told him he would be out of prison in two years.\n\n The district court rejected Weiss\u2019s ineffectiveness claims and denied his\n\napplication. Weiss appeals, claiming counsel was ineffective in (1) failing to\n\nprovide him with the police report relating to the sex abuse allegations, (2)\n\npermitting an essential defense witness to spoil her testimony,3 (3) failing to\n\ndiscuss the option of waiving his right to speedy trial, (4) permitting him to enter\n\nhis plea even though he did not understand the proceedings, (5) failing to disclose\n\nthe actual time he should expect to serve, and (6) failing to \u201cget his side of the\n\nstory.\u201d\n\n Because an ineffectiveness claim has as its basis the Sixth Amendment,\n\nour review is de novo. State v. Clay, 824 N.W.2d 488, 494 (Iowa 2012).\n\n To establish an ineffective-assistance-of-counsel claim, an applicant must\n\nshow both that (1) counsel failed to perform an essential duty, and (2) this failure\n\n\n\n3\n We would not agree the witness was \u201cspoiled\u201d or disqualified, but her credibility may\nhave been somewhat undermined by reading the pretrial depositions of other witnesses.\nThe depositions were provided to the witness by defense counsel at the request of Weiss.\nHe asserts, \u201cAlthough Michael had asked his attorney to provide the depositions to Ms.\nGusman, it was his attorney\u2019s job to save Michael from himself.\u201d\n\f 6\n\nresulted in prejudice. Id. at 495. We may affirm the district court\u2019s PCR denial if\n\neither prong is unsatisfied. Anfinson v. State, 758 N.W.2d 496, 499 (Iowa 2008).\n\n In a guilty-plea case, the prejudice element \u201cfocuses on whether counsel\u2019s\n\nconstitutionally ineffective performance affected the outcome of the plea process.\u201d\n\nHill v. Lockhart, 474 U.S. 52, 59 (1985). To satisfy the prejudice requirement,\n\nWeiss must show a reasonable probability exists that, but for counsel\u2019s faulty\n\nadvice, he would not have pled guilty and would have insisted on going to trial.\n\nSee State v. Straw, 709 N.W.2d 128, 138 (Iowa 2006).\n\n On our de novo review, we agree with and adopt the district court\u2019s findings\n\nand conclusions:\n\n The record of the applicant\u2019s plea at Exhibit 1 shows that the\n court reviewed the plea offer, informed the applicant of the nature of\n his charges, as amended, the maximum and minimum punishments,\n his right to a jury trial, right to counsel, right against self-incrimination\n and right to confront and call witnesses in compliance with Iowa [Rule\n of Criminal Procedure] 2.8(2)(b). The court confirmed with the\n applicant that the minutes of testimony, along with the pre-trial\n depositions including the victim\u2019s deposition, established a factual\n basis for the applicant\u2019s plea. It\u2019s clear from this record that the\n applicant understood the charges and evidence against him and\n entered an Alford plea for the benefit of the bargain to avoid the\n consequences of a greater conviction at trial, which he admitted at\n his postconviction trial.\n The applicant\u2019s claims that he would not have accepted his\n plea and would have insisted on going to trial if he had he been\n provided a copy of the initial incident report is simply not credible and\n contradicted by the record.\n\n We have considered all of Weiss\u2019s contentions and conclude Weiss has\n\nfailed to prove he would have insisted on going to trial in any event. Having failed\n\nto establish the necessary prejudice, we affirm the denial of his PCR application.\n\n AFFIRMED.\n\f"} -{"text": "\n23 B.R. 823 (1982)\nIn re D.H. OVERMYER TELECASTING CO., INC., Debtor.\nHADAR LEASING INTERNATIONAL CO., INC., et al., Plaintiffs,\nv.\nD.H. OVERMYER TELECASTING CO., INC., et al., Defendants.\nBankruptcy No. B81-00506, Adv. No. B81-1005.\nUnited States Bankruptcy Court, N.D. Ohio, E.D.\nSeptember 17, 1982.\nJudgment September 24, 1982.\n*824 *825 John Silas Hopkins, III, and William S. Eggeling, Ropes & Gray, Boston, Mass., and Susan B. Collins, and Joseph Patchan, Baker & Hostetler, Cleveland, Ohio, and Martin J. Bienenstock, Weil, Gotshal & Manges, New York City, for The First Nat. Bank of Boston.\nWilliam T. Smith, Calfee, Halter & Griswold, and Harry W. Greenfield, Javitch, Eisen & Greenwald Co., L.P.A., Cleveland, Ohio, for Hadar Leasing Intern. Co., Inc.\nJames M. Wilsman, and Kevin T. Duffy, Parks, Eisele, Bates & Wilsman, Cleveland, Ohio, for D.H. Overmyer Telecasting Co., Inc.\nRonald A. Rispo, Weston, Hurd, Fallon, Paisley & Howley, Cleveland, Ohio, for Daniel H. Overmyer.\nDavid O. Simon, Dettelbach & Sicherman, Cleveland, Ohio, for Creditors' Committee of D.H. Overmyer Telecasting Co., Inc.\n\nMEMORANDUM OF OPINION.\nJOHN F. RAY, Jr., Bankruptcy Judge.\nThis matter came on for hearing on the complaint of plaintiff, Hadar Leasing International Co., Inc. (\"Hadar\"), Chapter 11 *826 debtor, against another Chapter 11 debtor, D.H. Overmyer Telecasting Co., Inc. (\"Telecasting\"), for relief from stay; the complaints of intervening plaintiffs, Daniel H. Overmyer (\"Mr. Overmyer\"), Intermodal Systems Leasing, Inc. (\"ISLI\"), Overmyer Distribution Services, Inc. (\"ODS\") and D.H. Overmyer Co., Inc. (Ohio) (\"DHO\"), against defendant/intervenor, The First National Bank of Boston (\"FNBB\");[1] Telecasting's counterclaim against all of the plaintiffs; FNBB's counterclaim against all of the plaintiffs; the evidence; briefs of counsel; and oral argument of counsel.\nThis case presents for resolution:\n(i) the claim of Hadar against Telecasting to the property and equipment used by Telecasting in the operation of its television station;\n(ii) the purported claims of Hadar and the Overmyer plaintiffs/intervenors, Mr. Overmyer, ISLI, ODS and DHO, against defendant, FNBB, allegedly arising out of certain loan relationships with the Overmyer companies.\n(iii) Telecasting's counterclaims against all of the Overmyer plaintiffs (1) for a determination that it owns the \"leased\" property and equipment in its possession; and (2) for all of the money wrongfully extracted from Telecasting under the purported \"leases;\"\n(iv) FNBB's counterclaims against the Overmyer plaintiffs based upon monies owed to it and fraudulently removed from FNBB's collateral; and\n(v) FNBB's counterclaim for recovery of reasonable collection costs.\nThe Court makes the following findings of fact, conclusions of law and orders.\n\nFINDINGS OF FACT\n\n1. The Trial\n\n1.1 Trial Witnesses. Trial commenced in this adversary proceeding on Monday, February 22, 1982, and concluded April 9, 1982. During this period, 6,373 pages of proceedings were transcribed. The following witnesses were called by the plaintiffs:\nDavid A. Raible, executive vice-president of Hadar (Raible, 1 Tr. 94; see Finding No. 4.6, infra)\nJames Bond, appraiser at Frazier, Gross & Kadlec, appraised equipment he was able to locate at Telecasting for Hadar (Bond, 13 Tr. 1151, 1153)\nEdmund M. Connery, attorney for the Overmyer organization (Connery, 20 Tr. 1881-84, 23 Tr. 2170; see Finding No. 4.4, infra)\nPeter M. Lynch, former accountant for the Overmyer organization, created a new set of Hadar books (Lynch, 16 Tr. 1510-12; see Finding No. 4.7, infra)\nThe following witnesses' testimony was presented by plaintiffs through deposition testimony:\nScott Neely, former vice-president of FNBB (McArdle, 51 Tr. 5174)\nWilliam F. Thompson, executive vicepresident, FNBB (Pl. Ex. 134, p. 4)\nRalph B. Fifield, head of the National Division West, FNBB (Pl. Ex. 136, p. 10)\nJohn H. Chequer, former commercial lending officer, FNBB (Pl. Ex. 137, p. 7)\nJ. Francis Fuge, deposit operations officer, FNBB (Pl. Ex. 138, p. 3)\nDaniel H. Overmyer, intervening plaintiff in this adversary proceeding (see Finding No. 2.3, infra)\nRalph Todd, financial consultant to FNBB (Pl. Ex. 140A, p. 4)\nRichard D. Hill, chairman and chief executive officer, FNBB (Pl. Ex. 141, p. 6)\nJames Howell Short, former Credit Department employee, FNBB (Pl. Ex. 142, p. 5)\nThe following witnesses were called by the defendants:\nEugene I. Winkelman, M.D., head of hepatology section, Department of Gastroenterology, *827 Cleveland Clinic (Winkelman, 5 Tr. 406)\nHoward L. Klein, accountant, audit supervisor, Ernst & Whinney (H. Klein, 28 Tr. 2676)\nJames R. Bowe, vice-president of engineering and operations, Telecasting (Bowe, 39 Tr. 3681)\nDaniel E. Foley, partner, Ernst & Whinney, specialist in privately owned businesses, taxes and bankruptcies (Foley, 41 Tr. 3879-80)\nJerry B. Klein, of Jerry B. Klein, CPA, an accounting firm heavily concentrated in bankruptcy, insolvency and investigative accounting work (J. Klein, 42 Tr. 3985-86)\nKaren Hall, employee of Telecasting, responsible for accounts payable and payroll (Hall, 46 Tr. 4417)\nJohn McArdle, former assistant vice-president, FNBB, reviewed bank records on Overmyer loans and accounts and calculated amounts due on outstanding loans (McArdle, 50 Tr. 5052, 5057)\nWilliam T. Smith, attorney, representing Hadar, DHO, ODS, Mr. Overmyer (until February 3, 1982) and ISLI in this proceeding\nWilliam G. Pearlstein, former legal assistant at Ropes & Gray, involved in discovery at Weathervane Farms, office of the custodial receiver and office of the United States Attorney for the Southern District of New York (Pearlstein, 55 Tr. 5640-42)\nAnne M. Jelson, document examiner (Jelson, 55 Tr. 5689)\nRichard L. Levine, former director and counsel of the Executive Office for United States Trustees, Department of Justice, member of the Advisory Committee on Bankruptcy Rules of the Judicial Conference of the United States, chairman of the commercial department of Hill & Barlow, a Boston law firm (Levine, 56 Tr. 5709, 5712, 5718)\nThe following witnesses' testimony was presented by the defendants through deposition testimony:\nDaniel H. Overmyer, intervening plaintiff in this adversary proceeding (see Finding No. 2.3, infra)\nOhio Citizens Trust Company, by Harry G. Hart, vice-president of the business development, commercial division (Hart, 43 Tr. 4112-13)\nUnited States Trust Company, by L. Edward Hemphill, account officer (Hemphill, 43 Tr. 4122)\nChemical Bank, by Robert J. Keenoy, assistant branch manager (Keenoy, 43 Tr. 4131)\nRepublic National Bank, by Jan Kaplan, legal services coordinator (Republic [Kaplan] Dep., FNBB Ex. 229, p. 3)\nEdwin Tornberg & Company, by Edwin J. Tornberg, president (Tornberg, 43 Tr. 4139)\nEdmund M. Connery, attorney for the Overmyer organization (Connery, 20 Tr. 1881-84, 23 Tr. 2170, 44 Tr. 4154; see Finding No. 4.4, infra)\nEmil Thomas Meissner, former business manager, vice-president and controller of Telecasting (Meissner, 44 Tr. 4187)\nMichael J. Carrieri, accountant for the Overmyer organization, former head of cost accounting and controller for other companies (Carrieri, 45 Tr. 4271-85)\nStuart K. Strang, Mr. Overmyer's son-in-law, president of Hadar (Strang, 45 Tr. 4369, 4385; see Finding No. 4.3, infra)\nBarbara O. Strang, director and officer of various Overmyer entities (B. Strang, 46 Tr. 4437-40; see Finding No. 4.2, infra)\nProducts Analysis & Structural Testing, by Lawrence F. Wilson, did work for Hadar at Channel 24 in Toledo (PAST Dep., FNBB Ex. 236, p. 6)\nCharles E. Slates, of Slates Electric, Inc., licensed contractor, did work for Hadar at Channel 24 in Toledo (Slates, 46 Tr. 4499-4500)\nErnest E. Rety, former chief engineer, possibly former director of engineering at Telecasting (Rety, 46 Tr. 4512)\nWilliam J. Shock, vice-president and general manager of Telecasting (Shock, 46 Tr. 4520)\n\n*828 Arthur M. Dorfner, former president and chief operating officer of Telecasting (Dorfner, 47 Tr. 4549)\nPeter H. Starr, former president of RT Systems, former consultant to Overmyer entities (Starr, 47 Tr. 4574-75)\nCiticom Radio Corporation, by Wake L. Warthen, treasurer (Warthen, 47 Tr. 4585)\nWilliam S. Chi, accountant for the Overmyer organization, former assistant secretary and assistant treasurer of Telecasting (see Finding No. 4.5, infra)\nHundred East Credit Corporation, by J. Walter Corcoran, president (Corcoran, 48 Tr. 4699)\nHundred East Credit Corporation, by Eugene F. Shaw, director of marketing (Shaw, 48 Tr. 4731)\nWeathervane Farms, Inc., by Stuart K. Strang, president (see Finding No. 4.3, infra)\nRussell Morton Brown, attorney (Brown, 48 Tr. 4754-55)\nDeauville, NDS and NDS of California, by Andrew C. Edgerton, employee of DHO (Edgerton, 48 Tr. 4786)\nBank of N.T. Butterfield & Son Limited and Bank of Butterfield Executor & Trustee Limited, by Kenneth Wallace Morgan, assistant manager (Morgan, 48 Tr. 4799)\nSchiff Terhune, Inc., by Lawrence P. McGartland, senior vice-president and director of the property department (McGartland, 48 Tr. 4808)\nShirley C. Overmyer, wife of Daniel H. Overmyer (S. Overmyer, 49 Tr. 4859; see Finding No. 4.1, infra)\nDavid A. Raible, executive vice-president of Hadar (Raible, 1 Tr. 94; see Finding No. 4.6, infra)\nThe plaintiffs called the following rebuttal witnesses:\nEric A. Hanson, accountant with James D. Miller & Co., reviewed records of Mr. Overmyer's accounts with FNBB (Hanson, 59 Tr. 5961-62)\nFrank J. Lake, former banker (commercial lending officer), former treasurer of DHO (Lake, 59 Tr. 6020-23)\nJim T. Nichols, former employee of TOC, member of the committee for cash management decisions for TOC (Nichols, 60 Tr. 6073)\nDaniel F. Nosal, real estate appraiser with Appraisal Consultants, Inc. (Nosal, 60 Tr. 6109-10)\nEdgar W. Lee, vice-president of KLC, Inc. (leasing corporation) (Lee, 61 Tr. 6170)\n\n2. The Parties\n\n2.1. Plaintiff, Hadar Leasing International Company, Inc. Hadar Leasing International Company, Inc. (\"Hadar\") is an Ohio corporation (Hadar Certificate of Amendment, Raible Ex. 121), which operates from a suite of offices at 3 Park Avenue, New York, New York. (Raible, 4 Tr. 375) Hadar is a Chapter 11 debtor in this Court, in In re Hadar Leasing International Co., Inc., case number B81-03124. Hadar had previously filed its petition under Chapter 11 in the Southern District of New York on March 27, 1981, which case was subsequently transferred to this Court. (Answer and counterclaims of Telecasting to second amended complaint of Hadar \u0e16 2) Hadar changed its name from D.H. Overmyer Trucking Company to Hadar Leasing International Company on May 11, 1977, and then to Hadar Leasing International Company, Inc., on August 10, 1979. (Raible, 4 Tr. 340-41) Hadar is purportedly owned by a trust held for Mr. Overmyer's children, but it is controlled by Mr. Overmyer. (Raible, 6 Tr. 569)\n2.2. Plaintiff, Intermodal Systems Leasing, Inc. Intermodal Systems Leasing, Inc. (\"ISLI\") was a Delaware corporation which became inoperative according to the laws of the State of Delaware on March 1, 1979. (Connery, 23 Tr. 2212-13; Certificate of Nonexistence, FNBB Ex. 63) ISLI was formerly known as D.H. Overmyer Leasing Co., Inc. (ISLI Certificate, Raible Ex. 183; Connery, 23 Tr. 2212-13, 20 Tr. 1869)\n2.3. Plaintiff, Daniel H. Overmyer. Daniel H. Overmyer is a resident of New York whose personal residence is on Hog *829 Hill Road, Town of Yorktown, Chappaqua, Westchester County, New York. (D. Overmyer, 43 Tr. 4033; Loan Agreement dated 1/31/71, FNBB Ex. 266) Mr. Overmyer controls all of the other plaintiffs. (Raible, 7 Tr. 623)\n2.4. Plaintiff, D.H. Overmyer Co., Inc. (Ohio). D.H. Overmyer Co., Inc. (Ohio) (\"DHO\") is an Ohio corporation, which has, since November 16, 1973, been a debtor-in-possession in a Chapter XI proceeding in the Southern District of New York, In re D.H. Overmyer Co., Inc. (Consolidated Debtors), Arrangement No. 73 B 1126-1162, 1175 and 1189. (Complaint in Herzog v. FNBB, FNBB Ex. 95; Amended Complaint in DHO v. FNBB, FNBB Ex. 96, \u0e16\u0e16 1, 2, 5) DHO was originally called D.H. Overmyer Warehouse Company, and was started by Mr. Overmyer as a sole proprietorship on October 1, 1947, in Toledo, Ohio. (D. Overmyer Dep., FNBB Ex. 254, p. 12) D.H. Overmyer Warehouse Company, Inc. was incorporated in 1949 or 1950, and began to operate at more than one location in 1949. (D. Overmyer Dep., FNBB Ex. 224, p. 13) DHO currently leases warehouse space in Los Angeles, Nashville, Baltimore, Rochester and Toledo. (D. Overmyer Dep., FNBB Ex. 224, pp. 6-8)\n2.5. Plaintiff, Overmyer Distribution Services, Inc. Overmyer Distribution Services, Inc. (\"ODS\") was a Delaware corporation which became inoperative according to the laws of the State of Delaware on March 1, 1975. (Connery, 23 Tr. 2211-13; Certificate of Nonexistence, FNBB Ex. 64) ODS was incorporated in Delaware in May, 1971, and activated in January, 1972. (Connery, 25 Tr. 2446, 23 Tr. 2211-12) ODS was a marketing company which had subleases of space from DHO. (Connery, 23 Tr. 2212) ODS operated the Overmyer warehouses from January 1, 1972, through November, 1973. (Raible Dep., FNBB Ex. 259, pp. 24, 30-31; Connery, 15 Tr. 1388)\n2.6. Defendant, D.H. Overmyer Telecasting Co., Inc. D.H. Overmyer Telecasting Co., Inc. (\"Telecasting\") is an Ohio corporation (Telecasting Articles of Incorporation, Tele Ex. 27) Telecasting is the licensee of UHF television station WDHO-TV, Channel 24, in Toledo, Ohio. (3/10/81 Telecasting Schedule, Tele Ex. 17, p. 1) Telecasting has been operating as a debtor-in-possession under Chapter 11 (under Title 11, United States Code) in this Court since February 6, 1981.\n2.7. Defendant, The First National Bank of Boston. The First National Bank of Boston (\"FNBB\") is a national banking association having its principal place of business in Boston, Massachusetts. (Loan Agreement dated 1/31/71, FNBB Ex. 266)\n2.8. Defendant, Hundred East Credit Corporation. Hundred East Credit Corporation (\"Hundred East\") is a Delaware corporation with its principal place of business in New York, New York. (Hundred East Complaint for Relief from Stay, \u0e16 4) Hundred East is a sister company to North American Philips Corporation. (Corcoran Dep., FNBB Ex. 244, p. 4) The business of Hundred East is financing equipment to purchasers under conditional sales contracts or leases. (Corcoran Dep., FNBB Ex. 244, p. 4) Hundred East became involved in three transactions involving equipment to be used at Telecasting's studio and transmitter site in Toledo. (Corcoran Dep., FNBB Ex. 244, p. 7; Lease No. H-1043, Pl. Ex. 38; Lease No. H-1044 (2 versions), Pl. Exs. 39, 40; Lease No. H-1045 (3 versions), Pl. Exs. 41, 42, D. Overmyer Ex. 2; Connery, 20 Tr. 1940)\n\n3. Other Overmyer Companies\n\n3.1. The Overmyer Company. The Overmyer Company (\"TOC\") is a holding company which holds the stock of DHO and ODS and formerly held the stock of Telecasting. (D. Overmyer Dep., FNBB Ex. 224, p. 5; Loan Agreement, FNBB Ex. 266, \u0e16 1.4, p. 3)\n3.2. Jeebs Distribution Services, Inc. Jeebs Distribution Services, Inc. (\"Jeebs\") is a New York corporation (Jeebs Certificate of Incorporation, Raible Ex. 500) which operates from a suite of offices on the 29th floor of 3 Park Avenue, New York, New York. (Raible, 5 Tr. 459) The name \"Jeebs\" is formed from the initials of the first names of Mr. Overmyer's children and *830 wife: John, Edward, Elizabeth, Barbara and Shirley. (D. Overmyer, 43 Tr. 4035) The name \"Jeebs\" was also the name of the Overmyer family dog. (B. Strang Dep., FNBB Ex. 235, pp. 27-28) Jeebs was formed to provide management services for Overmyer companies that were not in Chapter XI. (D. Overmyer, 43 Tr. 4034-35)\n3.3. AGG Projects, Inc. AGG Projects, Inc. (\"AGG\") is a New Jersey corporation (AGG Certificate of Incorporation, Raible Ex. 553) which operates from the suite of offices on the 29th floor of 3 Park Avenue. (Raible, 5 Tr. 467) AGG was acquired from a group of medical men in order to obtain additional office space on the 28th floor of 3 Park Avenue. (Raible, 5 Tr. 466-67) Thereafter, AGG took over the service company functions that had been performed by Jeebs. (Raible, 5 Tr. 466)\n3.4. Omega Executive Services, Inc. Omega Executive Services, Inc. (\"Omega\") is a Delaware corporation (Omega Certificate of Incorporation, Raible Ex. 579) which operates from the suite of offices on the 29th floor of 3 Park Avenue. (Raible, 5 Tr. 473) Omega took over the service company function from AGG because the Internal Revenue Service put a lien on AGG's bank accounts. (Chi Dep., FNBB Ex. 243, p. 120)\n3.5. Intermodal Terminals, Inc. Intermodal Terminals, Inc. is the owner of the property on Hog Hill Road, Chappaqua, New York, upon which Mr. and Mrs. Overmyer's residence is located. (D. Overmyer Dep., FNBB Ex. 224, p. 3; S. Overmyer Dep., FNBB Ex. 258, p. 4; Connery, 24 Tr. 2342-43; Deeds to Hog Hill Road Property, FNBB Exs. 86 and 87; Carrieri Dep., FNBB Ex. 233, pp. 51-52) Intermodal Terminals, Inc. is held in trust by the Butterfield Bank. (D. Overmyer Dep., FNBB Ex. 224, p. 3; Raible Dep., FNBB Ex. 259, pp. 46-47)\n3.6. Weathervane Farms, Inc. Weathervane Farms, Inc. is a Delaware corporation, which changed its name on October 31, 1973, from Formodal, Inc. to Weathervane Farms, Inc. (Weathervane Ex. 1) Formodal, Inc. was incorporated on February 6, 1970. (Weathervane Ex. 1) Weathervane Farms, Inc. is owned by the Barbara Overmyer Strang Trust. (Weathervane Dep., FNBB Ex. 246, p. 13) Weathervane Farms, Inc. operates a farm located on Hog Hill Road in Chappaqua, New York on property which is contiguous to Intermodal Terminals, Inc., and occupied by Mr. Overmyer. (Weathervane Dep., FNBB Ex. 246, pp. 3-4, 28) Weathervane Farms, Inc. stores records for the Overmyer organization. (Weathervane Dep., FNBB Ex. 246, p. 14)\n3.7. Deauville Private Rental Homes, Inc. Deauville Private Rental Homes, Inc. (\"Deauville\" pronounced DOUGH-vill) is a Delaware corporation which is controlled by Mr. Overmyer. (Connery, 20 Tr. 1882; B. Strang, 46 Tr. 4439) Deauville was formerly known first as D.H. Overmyer Publishing Co., Inc., and then as Overmyer Europe, Ltd. (Deauville Minute Book, FNBB Ex. 261, p. 8) The president of Deauville is Andrew Edgerton. (3/9/81 and 2/1/80 Deauville Minutes, FNBB Ex. 261) Mr. Edgerton designated by Deauville pursuant to Federal Rule of Civil Procedure 30(b)(6) for a deposition of Deauville, was instructed by his attorney to refuse to answer all questions about Deauville except two, the answers to which were \"I don't know.\" (Deauville/NDS [Edgerton] Dep., FNBB Ex. 252, pp. 35-37)\n3.8. National Distribution Services, Inc. National Distribution Services, Inc. (\"NDS\") is a Delaware corporation incorporated on July 6, 1971, to engage in the public warehousing business. (Certificate of Incorporation, NDS Ex. 28; Connery, 15 Tr. 1475) National Distribution Services of California is a subsidiary of NDS formed to operate a warehouse in the Los Angeles area. (9/8/77 NDS Minutes, NDS Ex. 42; NDS Dep., FNBB Ex. 252, pp. 12-13) NDS eventually came to be owned by Price Wilson Limited, which sold it to the Overmyer organization. (Connery, 15 Tr. 1475)\n3.9. Peerless Manufacturing Corporation. Peerless Manufacturing Corporation (\"Peerless\") is a Delaware corporation incorporated on September 26, 1977 (Certificate of Incorporation, FNBB Ex. 260, p. 11) with its office at 3 Park Avenue. (9/26/77 *831 Peerless Minutes, FNBB Ex. 260; Connery Dep., FNBB Ex. 231, pp. 69-70) Peerless was formed for the sole purpose of acquiring the assets of the Peerless Division of Dover Corporation. (Connery, 15 Tr. 1474; 9/30/77 Peerless Minutes, FNBB Ex. 260, p. 1) The operating and manufacturing facilities of Peerless were located in Louisville, Kentucky. (Connery Dep., FNBB Ex. 231, p. 70) Peerless manufactured industrial space heaters and fireplace equipment. (D. Overmyer Dep., FNBB Ex. 224, p. 117; Connery Dep., FNBB Ex. 231, p. 69; S. Strang Dep., FNBB Ex. 234, p. 24)\n3.10. RT Systems, Inc. RT Systems, Inc. (\"RT Systems\") is a publicly held company that is controlled by Mr. Overmyer. (Raible, 4 Tr. 338; Connery Dep., FNBB Ex. 231, pp. 87-89; Raible Dep., FNBB Ex. 259, pp. 5, 70, 81) The board of directors consists of Mr. Overmyer, Mrs. Overmyer, Mr. Strang and Mr. Raible. (Raible Dep., FNBB Ex. 259, p. 81) Freight Delivery Services of Florida, Inc., T.O.F.C. Terminals, Inc. and RT Leasing, Inc. are subsidiaries of RT Systems. (Raible, 1 Tr. 92)\n3.11. Expediter Warehouse Co. Expediter Warehouse Co. (\"Expediter\") is a small public warehouse company which leases from DHO a small amount of space not occupied by Telecasting. (Raible Dep., FNBB Ex. 259, pp. 75-76) Mr. Strang is an officer of Expediter. (Raible Dep., FNBB Ex. 259, p. 76)\n3.12. The Butterfield Bank. The Bank of Butterfield Executor & Trustee Company Limited is a company incorporated under the laws of the Islands of Bermuda. (Indenture of Settlement, FNBB Ex. 253, Ex. A) The Bank of Butterfield Executor & Trustee Company Limited is a wholly owned subsidiary of the Bank of N.T. Butterfield & Son Limited. (Butterfield Dep., FNBB Ex. 253, p. 3) The Butterfield Bank is a trustee of a trust that Mr. Overmyer created for his children by an Indenture of Settlement dated February 5, 1972. (Butterfield Dep., FNBB Ex. 253, pp. 4, 7; Indenture of Settlement, FNBB Ex. 253, Ex. A) Deauville has maintained a checking account at the Butterfield Bank since November 7, 1973. (Butterfield Dep., FNBB Ex. 253, p. 23)\n3.13. Directors and Officers of Overmyer Entities. Attached hereto as \"Appendix A\" are flow charts showing the tenures of the directors and officers of 12 Overmyer companies, based on the minute books of those companies. (Appendix deleted by publisher) (Telecasting Minute Book, Tele Exs. 28 and 29; Hadar Minute Book, Raible Exs. 13-181; ISLI Minute Book, Raible Exs. 182-372; Jeebs Minute Book, Raible Exs. 500-04 and 506-52; AGG Minute Book, Raible Exs. 553-75; Omega Minute Book, Raible Exs. 576-95; Weathervane Farms, Inc. Minute Book, Weathervane Ex. 1; Deauville Minute Book, FNBB Ex. 261; NDS Minute Book, NDS Exs. 14-74; Peerless Minute Book, FNBB Ex. 260)\n\n4. Other Overmyer Persons\n\n4.1. Shirley C. Overmyer. Shirley Clark Overmyer is married to Daniel Overmyer and is the mother of Barbara, Elizabeth, John and Edward Overmyer. (S. Overmyer Dep., FNBB Ex. 258, p. 3) Over a period of some 30 years, Mrs. Overmyer has been a director and/or officer of probably all the Overmyer companies. (S. Overmyer Dep., FNBB Ex. 258, p. 17) Mrs. Overmyer served as chairman of the board, chief executive officer and vice-president of finance of Telecasting from February 19, 1981, through March 25, 1981. (2/26/81 Telecasting Minutes, Tele Ex. 29)\n4.2. Barbara O. Strang. Barbara Overmyer Strang lives on the farm on Hog Hill Road, Westchester County, New York, that is owned by Weathervane Farms, Inc. (B. Strang Dep., FNBB Ex. 235, p. 21) Mrs. Strang is married to Stuart Strang. (B. Strang Dep., FNBB Ex. 235, p. 4) Mrs. Strang has served as a director and officer of Overmyer entities since 1973. (B. Strang Dep., FNBB Ex. 235, pp. 5-30) Mrs. Strang is a director of Hadar. (B. Strang Dep., FNBB Ex. 235, p. 30)\n4.3. Stuart K. Strang. Stuart K. Strang also lives on the farm owned by Weathervane Farms, Inc. (S. Strang Dep., FNBB Ex. 234, pp. 3-4) Mr. Strang's background includes a high school education, some years *832 in the army as a private first class, work as a driver/helper for a moving company, work for a builder and a roofing company and work making bicycle seat covers. (S. Strang Dep., FNBB Ex. 234, pp. 4-8) Then Mr. Strang met and married Barbara Overmyer in 1974. (S. Strang Dep., FNBB Ex. 234, p. 9) Subsequently, Mr. Strang became an officer and director of numerous Overmyer companies. (S. Strang Dep., FNBB Ex. 234, pp. 10-29) Mr. Strang is the president of Hadar. (S. Strang Dep., FNBB Ex. 234, p. 40)\n4.4. Edmund M. Connery. Mr. Connery is an attorney admitted to practice in 1948 in New York. (Connery, 15 Tr. 1388, 20 Tr. 1860) Mr. Connery joined the Overmyer organization in 1964, as an attorney in the employ of DHO, as its general counsel in which his principal responsibilities were real estate and general corporate work. (Connery Dep., FNBB Ex. 231, pp. 7-8) He was also elected secretary of that corporation. (Connery Dep., FNBB Ex. 231, p. 8) When ODS was formed in 1972, Mr. Connery worked for that entity and was on its payroll. (Connery, 15 Tr. 1388) Mr. Connery's affiliation with the Overmyer companies continued until November 16, 1973, when the Chapter XI was filed, at which time he went to work for Mr. Herzog, the receiver of DHO, and subsequently returned to the Overmyer organization in 1974. (Connery, 15 Tr. 1388-89) In December, 1975, Mr. Connery left the Overmyer organization to work for Rockwood Computer Corporation where he did legal work in the real estate area. (Connery, 15 Tr. 1390) Prior to his leaving in 1975, Mr. Connery was general counsel for ISLI. (Connery, 20 Tr. 1869) In August, 1977, Mr. Connery returned to work for Mr. Overmyer at 3 Park Avenue and established himself as an \"independent\" attorney, because he felt that that would be in his \"best interest.\" (Connery, 15 Tr. 1390) Since that time and to the present, Mr. Connery has done legal work for all of the Overmyer entities at 3 Park Avenue, including legal work for Mr. Overmyer personally. (Connery, 15 Tr. 1390-91) Mr. Connery established his \"independent\" attorney status under a fee arrangement he entered into in 1977 by which he was initially paid by Jeebs, then AGG and presently Omega (Connery, 15 Tr. 1391), which pays him weekly with two checks (Connery, 20 Tr. 1900). Omega also pays for the salary of Mr. Connery's secretary, his office supplies, rent, phone and malpractice insurance. (Connery, 22 Tr. 2159) Even though Mr. Connery characterizes himself as an \"independent\" attorney, he nevertheless maintains his office in the same suite of offices occupied by the Overmyer organization. (Connery Dep., FNBB Ex. 231, pp. 21-22) Since 1977, Mr. Connery has done legal work for all of the Overmyer companies at 3 Park Avenue, including the warehouse company, Telecasting, Peerless, NDS, a few entities formed in the television area (Connery, 15 Tr. 1391-92) and RT Systems (Connery, 15 Tr. 1393). Hadar is the only leasing company for which Mr. Connery has performed legal services. (Connery, 15 Tr. 1392)\n4.5. William S. Chi. William Chi lives in Scarsdale, New York. (Chi Dep., FNBB Ex. 243, p. 3) Mr. Chi works for DHO in the accounting department, and first went to work for Mr. Overmyer in 1967. (Chi Dep., FNBB Ex. 243, pp. 3, 5) Mr. Chi also worked for Telecasting after 1978. (Chi Dep., FNBB Ex. 243, p. 6) Mr. Chi's duties included writing checks for Telecasting, signing leases with Hadar and preparing monthly financial reports. (Chi Dep., FNBB Ex. 243, p. 12) Mr. Chi served as a director of Telecasting from March 20, 1978, through February 19, 1981, and as assistant treasurer from March 20, 1978, through March 25, 1981. (3/20/78 and 2/26/81 Telecasting Minutes, Tele Ex. 29)\n4.6. David A. Raible. Mr. Raible lives at 292 Lafayette Avenue, Brooklyn, New York. (Raible, 1 Tr. 87) Mr. Raible is a graduate of the Wharton School, University of Pennsylvania. (Raible, 1 Tr. 87) Mr. Raible began employment with the Overmyer organization in July, 1970, as operations manager of the Woodbridge, New Jersey warehouse facility of DHO. (Raible, 1 Tr. 88) Subsequently, he moved to the headquarters offices, then located at 201 *833 East 42nd Street in Manhattan, New York. (Raible, 1 Tr. 88) In February, 1972, he moved to Minnesota where he was the general manager of a warehouse for DHO. (Raible, 1 Tr. 89) Up until 1973, Mr. Raible's experience was in the warehousing business. (Raible, 4 Tr. 327) In November, 1973, he became associated with ISLI. (Raible, 4 Tr. 328, 1 Tr. 90) He ultimately became president of ISLI and was an officer of ISLI from May, 1975, to 1980. (Raible, 1 Tr. 92, 4 Tr. 329-30) In 1974, Mr. Raible began to work for Jeebs. (Raible, 1 Tr. 91) Since sometime in 1976, Mr. Raible has been first vice-president and then executive vice-president of Hadar. (Raible, 4 Tr. 328, 1 Tr. 94-95) Mr. Raible is president of RT Systems and several of the subsidiaries of RT Systems: Freight Delivery Service of Florida, Inc., T.O.F.C. Terminals, Inc. and RT Leasing, Inc. (Raible, 1 Tr. 92) Mr. Raible is also employed by DHO in a general management capacity, although he does not hold a title. (Raible, 1 Tr. 93) He is the president of Jeebs and an officer and director of AGG and Omega. (Raible, 1 Tr. 93-94) He was also an officer and director of Telecasting from 1975 to February 19, 1981. (8/26/75 and 2/26/81 Telecasting Minutes, Tele Ex. 29) Mr. Raible testified truthfully both at trial and in his deposition.\n4.7. Peter M. Lynch. Peter M. Lynch lives at 139-24 Laurelton Parkway, Rosedale, New York. (Lynch, 16 Tr. 1507) He is employed by AFS International Intercultural Programs, Inc. in New York, New York. (Lynch, 16 Tr. 1507) Mr. Lynch obtained an associate certificate corporate accountant degree in 1964. (Lynch, 16 Tr. 1508) He worked for the Overmyer organization from March, 1970, through August, 1978. (Lynch, 16 Tr. 1509) From 1970 through December, 1973, he worked for DHO, first in the accounting department in charge of the Canadian books, and then in the quote department or operations department. (Lynch, 16 Tr. 1509-10) From 1974 through the latter part of 1976, he worked for Jeebs as an accountant. (Lynch, 16 Tr. 1511) He then worked for Telecasting up through February, 1978. (Lynch, 16 Tr. 1511) From then until he left the Overmyer organization in August, 1978, he worked for AGG. (Lynch, 16 Tr. 1511-12, 1575) In August, 1981, Mr. Lynch was contacted by Mr. Connery and asked to return to the Overmyer organization to create a set of books for Hadar. (Lynch, 16 Tr. 1579-80) He started that assignment on August 11, 1981, working at night and on weekends. (Lynch, 16 Tr. 1579-80)\n\n5. The FNBB/DHO Term Loans\n\n5.1. The Principal and Interest. Pursuant to a loan agreement dated January 31, 1971, FNBB renewed a 1969 loan of $6,000,000 to DHO. (Loan Agreement, FNBB Ex. 266, p. 2, \u0e16 1.1) This loan was evidenced by a promissory note dated February 16, 1971. (Promissory Note, FNBB Ex. 267) Interest on the loan was agreed on at the rate of one percent above FNBB's prime commercial rate, as long as the loan was not overdue, payable the last day of each month (Loan Agreement, FNBB Ex. 266, p. 2, \u0e16 1.1; Promissory Note, FNBB Ex. 267) and three percent above FNBB's prime commercial rate but no less than nine percent on all overdue payments of principal and interest (Promissory Note, FNBB Ex. 267). DHO agreed to repay $150,000 of the principal amount on the first day of each month starting May 1, 1971, and to pay the balance of the principal amount on December 31, 1971. (Loan Agreement, FNBB Ex. 266, p. 2, \u0e16 1.1.1)\n5.2. The Pledge of Telecasting Stock. DHO, TOC and Mr. Overmyer pledged all the stock of Telecasting to FNBB to secure the loan. (Loan Agreement, FNBB Ex. 266, pp. 2-3, \u0e16\u0e16 1.2 and 1.3)\n5.3. Cost of Collection. DHO agreed to pay to FNBB or any other holder the cost of collection, including reasonable attorneys' fees:\nThe Company (DHO) covenants that if default be made in any payment of the Note, it will pay to the Bank or to any other holder thereof, to the extent permitted under applicable law, such further amount as shall be sufficient to cover the cost and expenses of collection including *834 reasonable compensation to the attorneys and counsel of the holder thereof for all services rendered in that connection.\n(Loan Agreement, Ex. 266, p. 21, \u0e16 6.3) The loan agreement provided that it was to be governed by and construed in accordance with Massachusetts law. (Loan Agreement, FNBB Ex. 266, p. 25, \u0e16 14)\n5.4. The Guarantee of Payment. Mr. Overmyer, personally, and TOC guaranteed payment of the loan and performance of all other obligations of DHO (including payment of the cost of collection):\nThe Individual Guarantor [Mr. Overmyer] and Overmyer [TOC] hereby jointly and severally unconditionally guarantee payment of the Note and the performance of all other obligations of the Company under this Agreement, including any and all renewals, refundings, extensions or modifications of any thereof (all of the aforesaid being hereinafter called the \"Obligations\"). The Individual Guarantor and Overmyer agree that, without the necessity of any reservation of rights against the Individual Guarantor or Overmyer and without notice to or further assent by the Individual Guarantor or Overmyer:\n(a) the covenants and agreements of the Company contained in this Agreement may, from time to time, be amended, modified, waived or terminated;\n(b) the Obligations of the Company may, from time to time, in whole or in part, be renewed, extended, modified, accelerated in accordance with the terms thereof, compromised or released by the Bank;\n(c) the Bank may exercise or refrain from exercising any right, remedy or power (including, without limitation, any power of sale) in law or in equity or otherwise, with respect to the Obligations or any lien (legal or equitable) held, given or intended to be given therefor; and\n(d) any balance or balances of funds with the Bank at any time standing to the credit of the Company may, from time to time, in whole or in part, be surrendered or released by the Bank; all as the Bank may deem advisable and all without impairing, abridging, releasing or affecting the guarantee provided for herein. The Individual Guarantor and Overmyer waive any and all notice of the creation, renewal or extension of the Obligations and also waive presentment, protest, demand for payment and notice of default. This guarantee is a guarantee of payment and not of collectibility and is in no way conditional or contingent. In the event the Note shall not have been paid in full when due and payable (whether at maturity or by reason of notice given as provided hereunder), the Individual Guarantor and Overmyer will promptly, upon receipt of written or telephone notice from the Bank, pay to the Bank the then remaining balance of the principal amount of the Note, with interest accrued thereon to the date of payment by the Individual Guarantor as shall then be due and payable and unpaid.\n(Loan Agreement, FNBB Ex. 266, pp. 4-5, \u0e16 2) DHO pledged as additional security $6,000,000 of key-man insurance on the life of Mr. Overmyer. (Loan Agreement, FNBB Ex. 266, pp. 3-4, \u0e16 1.4; Overmyer Credit File, Neely Ex. A, p. 12)\n5.5. Ownership of Assets. DHO, TOC and Mr. Overmyer warranted to FNBB that DHO owned ISLI, Hadar (formerly known as D.H. Overmyer Trucking Co. [Ohio]), D.H. Overmyer Company of Canada, Ltd., D.H. Overmyer Company (Quebec) Ltd. and Overmyer Canada, Ltd., as well as Overmodal Terminals, Inc., Standard Warehouse Co., Inc., Servicenter, Inc., Southwest Warehouse Co., Inc., Wilkinson Storage Corporation, Merchants & Manufacturers Warehouse, Inc., R-T Realty Corp., Freight Delivery Service, Inc. and Overmyer A.G. (Loan Agreement, FNBB Ex. 266, p. 6, \u0e16 3.2 and Ex. B) DHO, TOC and Mr. Overmyer agreed:\nNeither the Company nor any Subsidiary nor WDHO will sell, lease, or otherwise transfer or dispose of all or any substantial part of its properties or assets, or *835 consolidate or merge with any other corporation, firm or other entity (other than leases in the ordinary course of business).\n(Loan Agreement, FNBB Ex. 266, p. 14, \u0e16 5.7)\nExcept with the prior written approval of the Bank, neither the Company nor any Subsidiary nor WDHO shall enter into any transaction whatsoever with D.H. Overmyer, or any member of his family, or any firm, corporation or other entity . . . of which Mr. Overmyer is an officer, director or partner, or in which Mr. Overmyer and members of his family own beneficially 5% or more of the outstanding capital stock.\n(Loan Agreement, FNBB Ex. 266, pp. 14-15, \u0e16 5.8)\n5.6. Intercompany Indebtedness. DHO TOC and Mr. Overmyer warranted to FNBB that the only existing indebtedness of Telecasting as of January 31, 1971, was real estate taxes, accrued wages, accrued federal and state income taxes and trade payables. (Loan Agreement, FNBB Ex. 266, p. 8, \u0e16 3.4) TOC and Mr. Overmyer agreed to cause Telecasting to refrain from making any advances or loans to DHO or any subsidiary of DHO or anyone else without FNBB's permission. (Loan Agreement, FNBB Ex. 266, p. 16, \u0e16 5.10)\n5.7. Waiver of Notice. DHO, TOC and Mr. Overmyer waived presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of the note. (Promissory Note, FNBB Ex. 267) The provision of the loan agreement regarding ten days notice of default related solely to acceleration of the due date of the principal amount of the loan and was optional with FNBB. (Loan Agreement, FNBB Ex. 266, p. 20, \u0e16 6.1) This latter provision has no application to any of the events involved in this case.\n5.8. The First Amendment. By a first amendment to the loan agreement dated June 30, 1971, when DHO borrowed $4,000,000 from James Talcott, Inc. at an interest rate of seven and one-half percent over prime, FNBB extended the maturity date of the loan from December 31, 1971, to December 31, 1972. (First Amendment to Loan Agreement, FNBB Ex. 268, pp. 1-2, \u0e16 1; McArdle, 54 Tr. 5609) Since December 31, 1972, was a Sunday and January 1, 1973, was a holiday, the effective maturity date became January 2, 1973. (McArdle, 51 Tr. 5181-82) Since DHO had made two principal payments of $150,000 each on the February 16, 1971 promissory note (McArdle, 50 Tr. 5073-75; Promissory Note, FNBB Ex. 267), DHO made a new note to FNBB in the principal amount of $5,700,000. (Promissory Note, FNBB Ex. 269) This note also added a floor of seven percent on the interest rate when the loan was not overdue. (Promissory Note, FNBB Ex. 269) In all other respects, the terms remained the same. (Compare First Amendment to Loan Agreement and Promissory Note, FNBB Exs. 268-69, with Loan Agreement and Promissory Note, FNBB Exs. 266-67) Mr. Overmyer and TOC expressly reaffirmed their guarantees. (First Amendment to Loan Agreement, FNBB Ex. 268, p. 3, \u0e16 4)\n5.9. The Additional $500,000 Loan. Pursuant to a security agreement dated December 8, 1971, FNBB loaned an additional $500,000 to DHO. (Security Agreement, FNBB Ex. 270) This additional loan was evidenced by a promissory note also dated December 8, 1971, and due March 8, 1972, in the principal amount of $500,000. (Promissory Note, FNBB Ex. 271) Like the February 16, 1971 promissory note, this note did not include the floor of seven percent on the interest rate when the loan was not overdue. (Promissory Note, FNBB Ex. 271) Otherwise the terms were the same as those of the $5,700,000 loan. (Compare Security Agreement and Promissory Note, FNBB Exs. 270-71, with First Amendment to Loan Agreement and Promissory Note, FNBB Exs. 268-69) The security agreement contained a guarantee of payment by Mr. Overmyer and TOC similar to that in the loan agreement:\nThe Individual Guarantor [Mr. Overmyer] and Overmyer [TOC] hereby jointly and severally unconditionally guarantee payment of the Loan and the interest thereon, *836 including any and all renewals, refundings, extensions or modifications of any thereof (all of the aforesaid being hereinafter called the \"Obligations\"). The Individual Gurantor [sic] and Overmyer agree that, without the necessity of any reservation of rights against the Individual Guarantor or Overmyer and without notice to or further assent by the Individual Guarantor or Overmyer:\n(a) the Obligations of the Company may, from time to time, in whole or in part, be renewed, extended, modified, accelerated in accordance with the terms thereof, compromised or released by the Bank;\n(b) the Bank may exercise or refrain from exercising any right, remedy or power (including, without limitation, any power of sale) in law or in equity or otherwise, with respect to the Obligations or any lien (legal or equitable) held, given or intended to be given therefor; and\n(c) any balance or balances of funds with the Bank at any time standing to the credit of the Company may, from time to time, in whole or in part, be surrendered or released by the Bank;\nall as the Bank may deem advisable and all without impairing, abridging, releasing or affecting the guarantee provided for herein. The Individual Guarantor and Overmyer waive any and all notice of the creation, renewal or extension of the Obligations and also waive presentment, protest, demand for payment and notice of default. This guarantee is a guarantee of payment and not of collectibility and is in no way conditional or contingent. In the event the Loan shall not have been paid in full when due and payable, the Individual Guarantor and Overmyer will promptly, upon receipt of written or telephone notice from the Bank, pay to the Bank the then remaining balance of the principal amount of the Loan, with interest accrued thereon to the date of payment by the Individual Guarantor as shall then be due and payable and unpaid.\n(Security Agreement, FNBB Ex. 270, pp. 2-4, \u0e16 3)\n5.10. Renewal of the Additional $500,000 Loan. On March 8, 1972, FNBB renewed the $500,000 term loan to DHO and DHO made a new note extending the maturity date to January 2, 1973. (Promissory Note, FNBB Ex. 272) The March 8, 1972 promissory note established a floor of seven percent on the interest rate when the loan was not overdue. (Promissory Note, FNBB Ex. 272)\n5.11. ODS Guaranty of DHO Obligations. On May 8, 1973, ODS executed a guaranty of all obligations of DHO to FNBB on a standard FNBB guaranty form. (Guaranty, FNBB Ex. 337) The form included a waiver of suretyship defenses similar to those in the loan agreement and the security agreement:\n[E]ach of the undersigned waives presentment, protest, notice of acceptance of this guaranty, notice of any loan made, extension granted or other action taken in reliance hereon and all demands and notices of every kind in connection with this guaranty or the Obligations, assents to any renewals, extension or postponement of the time of payment of any of the Obligations or any other indulgence with respect thereto, regardless of the length and number of such renewals, extensions, postponements or indulgences, to any substitution, exchange or release of collateral therefor and to the addition or release of any other person primarily or secondarily liable thereon; and agrees to the provisions of any instrument, security or other writing evidencing any of the obligations. Failure of the Bank in any one instance to make any demand or otherwise to proceed against any or all of the undersigned shall not constitute a waiver of the Bank's right to proceed in respect to any or all other defaults by the Obligor. The undersigned shall not assert any right arising from payment or other performance hereunder until all of the Obligations shall have been fulfilled.\n(Guaranty, FNBB Ex. 337, \u0e16 2) In addition, ODS agreed to pay all costs of collecting *837 DHO's obligations to FNBB, including reasonable attorneys' fees:\nThe undersigned, jointly and severally, guaranty to the Bank the payment of any and all expenses paid or incurred by the Bank (including reasonable attorneys' fees) in connection with the collection of all sums and Obligations guarantied hereunder, whether such collection be from the Obligor or from one or more of the undersigned.\n(Guaranty, FNBB Ex. 337, \u0e16 3B) The guaranty provided that it was to be governed by Massachusetts law. (Guaranty, FNBB Ex. 337, \u0e16 5)\n5.12. The Pledge of $2.9 Million of Telecasting Payables. In the late summer of 1973, FNBB received some Telecasting financials and discovered that Telecasting was carrying approximately $2.9 million of intercompany payables on its books in violation of either paragraph 3.4 or paragraph 5.10 of the January 31, 1971 loan agreement. (Neely Dep., Pl. Ex. 133, pp. 161-63) Mr. Neely told Mr. Overmyer that FNBB wanted these payables assigned as additional collateral and Mr. Overmyer agreed. (Neely Dep., Pl. Ex. 133, p. 163) As a result, on September 17, 1973, Mr. Overmyer, Telecasting, ODS, DHO, TOC, ISLI, D.H. Overmyer Communications Co., Inc. (an Ohio corporation) and D.H. Overmyer Communications Co., Inc. (a Delaware corporation) assigned to FNBB a total of $2,912,012.41 of payables supposedly due from Telecasting to the other six corporations. (9/17/73 Letter, Pl. Ex. 143) As agreed in the assignment (9/17/73 Letter, Pl. Ex. 143, p. 2), five of the six payee corporations had the payable reduced to a negotiable promissory note, and assigned and delivered the note to FNBB. (Promissory Notes, FNBB Exs. 339-343) For some unexplained reason, the note to ISLI was for $36.26 more than the amount of the assigned payable, and the note to DHO was for $76,258.16 less than the amount of the assigned payable. (Compare Promissory Notes, FNBB Exs. 340, 343, with 9/17/73 Letter, Pl. Ex. 143, p. 1) No note was assigned by ODS. (Compare Promissory Notes, FNBB Exs. 339-43, with 9/17/73 Letter, Pl. Ex. 143, p. 1) Corporate authorizations were delivered to FNBB by each corporation except ODS. (Corporate Authorizations, FNBB Exs. 344-49) The pledge agreement provided: \"The pledges by the present guarantors shall secure the respective guaranties of such guarantors.\" (9/17/73 Letter, Pl. Ex. 143, p. 2) The \"present guarantors\" included TOC and Mr. Overmyer (9/17/73 Letter, Pl. Ex. 143, p. 2; Loan Agreement, FNBB Ex. 266, pp. 4-5, \u0e16 2; First Amendment to Loan Agreement, FNBB Ex. 268, p. 3, \u0e16 4; Security Agreement, FNBB Ex. 270, pp. 2-4, \u0e16 3); their \"pledges\" included the stock of Telecasting (Loan Agreement, FNBB Ex. 266, p. 3, \u0e16 1.3; Security Agreement, FNBB Ex. 270, p. 2, \u0e16 2); and their \"guaranties\" included guaranties of the obligations of ODS, including the assigned accounts loan and the overdraft. (Guaranties, FNBB Exs. 323-24)\n5.13. Payments. From August, 1971, through February, 1973, DHO made 19 payments on the $5,700,000 promissory note, reducing the principal amount due on that note to $2,850,000. (Promissory Note, FNBB Ex. 269; McArdle, 50 Tr. 5085-87, 5095) In accordance with the normal procedure of FNBB, each payment was written on the back of the note. Each time a payment was made, the principal amount shown on the front of the note was reduced. (McArdle, 50 Tr. 5073-74, 5085-87; Promissory Note, FNBB Ex. 269) DHO made no payments on the $500,000 promissory note. (McArdle, 51 Tr. 5172; cf. Promissory Note, FNBB Ex. 272)\n5.14. Compensating Balances. As additional consideration for the various loans, DHO, from time to time, agreed to maintain compensating balances on deposit in its commercial accounts at FNBB, and agreed to pay various amounts to FNBB as compensation when it failed to maintain the agreed balances. (Letters and Memorandum, FNBB Exs. 363-70; Lake, 59 Tr. 6034) In particular, DHO agreed on February 16, 1971, in connection with the loan agreement of that date, to maintain compensating balances of at least $1,000,000. (2/16/71 Letter, FNBB Ex. 367)\n*838 5.15. Management Fee. On February 16, 1971, DHO agreed to pay quarterly to FNBB a management fee at the annual rate of $100,000, as additional compensation for services to be rendered under the loan agreement of that date. (2/16/71 Letter, FNBB Ex. 367) At least one such quarterly payment was actually made by DHO. (FNBB Response to DHO/ODS/ISLI Request for Admission No. 28)\n5.16. Demand for Payment. On May 2, 1974, FNBB made demand on DHO, TOC and Mr. Overmyer for payment of the term loans. (5/2/74 Letters, FNBB Exs. 273-74) On November 26, 1975, FNBB made demand on ODS for payment of the term loans. (11/26/75 Letter, FNBB Ex. 359)\n5.17. Amount Due on Term Loan. As of March 31, 1982, the amount due on the two outstanding term loans, including $3,350,000.00 principal and $8,373,754.53 interest, was $11,723,754.53. (Computer Printout, FNBB Ex. 275, p. 9; Chart, FNBB Ex. 362; McArdle, 51 Tr. 5178-79) The correctness of this figure is buttressed by the fact that although he could have calculated the amount due on the term loan, Mr. Hanson, plaintiffs' accounting expert, never did so and was never asked to do so. (Hanson, 59 Tr. 6014-15) In a report to Mr. Overmyer as president of DHO, Mr. Hanson stated: \"Based on our initial review, we conclude that the bank has sufficient documentation to support the unpaid principal balance of the loan made to D.H. Overmyer Co., Ohio of $3,350,000.\" (1/20/81 Letter, FNBB Ex. 441, p. 1) Calculation of the amount due, starting from the $3,350,000 principal amount, is a matter of arithmetic. (McArdle, 51 Tr. 5188-89; Computer Printout, FNBB Ex. 275)\n\n6. The Overmyer Lockbox Systems\n\n6.1. General Description of a Lockbox System. A lockbox system consists of one or more post office boxes (or \"lockboxes\") in one or more cities to which a company directs some or all of its customers to mail their payments and to which it gives one or more banks direct access in order to speed the collection of the company's receivables. (McArdle, 52 Tr. 5258-60) The first step in setting up a lockbox system is a study of the company's customer base to determine from where the customers will be mailing the checks, together with the use of studies by Phoenix Hoecht of mail times from one city to another to determine how many lockboxes and what cities will produce fastest receipt of customers' checks at reasonable cost. (McArdle, 52 Tr. 5258-59) The company then enters into an agreement with a bank in each chosen city, authorizing that bank to receive and process the checks sent to the post office box, and describing what the bank is to do with the contents of each envelope. (McArdle, 52 Tr. 5259) The company also sends each postmaster a letter authorizing the postal service to permit the bank in question to have access to the post office box. (McArdle, 52 Tr. 5259-60) Thereafter, the company directs its customers to send all payments to the proper lockbox, generally by sending them return envelopes addressed to the company at that post office box address, alternatively by simply indicating that that is the address to which to mail payments. (McArdle, 52 Tr. 5260) Several times each day, employees of each bank pick up the mail, remove and photocopy the enclosed checks, immediately deposit those checks to the company's account and mail the photocopies of the checks and whatever else is in the envelopes to the company for processing by its accounting department. (McArdle, 52 Tr. 5261; see Lake, 59 Tr. 6055) A lockbox system saves a company several days on its collections over the time it would take for all customer checks to be mailed to the company's offices, the accounting department to process the payments, and the checks then to be deposited into the bank either by mail or by messenger. (McArdle, 52 Tr. 5261-63) The Overmyer organization set up a lockbox system so that its collection department would be able to check on the speed of collections and work on any problems. (D. Overmyer Rule XI-4 Testimony, FNBB Ex. 440, pp. 216-17)\n6.2. The DHO Lockbox System. In July, 1969, DHO established a lockbox system in four cities: Boston, Atlanta, St. *839 Louis and Los Angeles. (McArdle, 52 Tr. 5264-65; Chart, FNBB Ex. 290) DHO, through its treasurer, Mr. Lake, duly authorized FNBB, Trust Company of Georgia, The First National Bank in St. Louis and Crocker Citizens National Bank to service the lockboxes, and duly authorized the postmaster in each city to permit the bank in that city to have access to the post office box in question. (Authorization Letters, FNBB Exs. 291-298) As of that time, the DHO lockbox system consisted of Post Office Box 3110 in Boston, Post Office Box 50010 in Atlanta, Post Office Box 14303 in St. Louis and Post Office Box 60945 in Los Angeles. (Authorization Letters, FNBB Exs. 291-298; Chart, FNBB Ex. 290; McArdle, 52 Tr. 5265) In October, 1971, DHO authorized FNBB to operate (and the postmaster to permit FNBB access to) a second post office box in Boston (number 3304) as part of its lockbox system. (Authorization Letters, FNBB Exs. 303-04; McArdle, 52 Tr. 5282) On April 1, 1972, the number of the DHO lockbox in Los Angeles was changed from 60945 to 80142. (3/20/72 Letter, FNBB Ex. 319; McArdle, 52 Tr. 5291-92)\n6.3. Transfer of Collections to FNBB. At the inception of the DHO lockbox system, the regional lockbox banks in Atlanta, St. Louis and Los Angeles transferred collections made through the regional lockboxes to FNBB by wire transfer on a daily basis. (McArdle, 52 Tr. 5266, 5273) Each day, FNBB deposited the money that was transferred, as well as the collections made through the Boxton lockbox, to DHO mother account number XXX-XXXX at FNBB. (McArdle, 52 Tr. 5265-66) In May, 1971, DHO changed to the use of a depository transfer system. (McArdle, 52 Tr. 5273) Each regional lockbox bank supplied to FNBB depository transfer checks drawn on DHO's account at that regional bank and with the payee printed right onto the check as \"The First National Bank of Boston for the credit of D.H. Overmyer Co., Inc.\" (McArdle, 52 Tr. 5275; Depository Transfer Check, FNBB Ex. 299) Each day, FNBB learned by telephone precisely how much was available in DHO's account at each regional bank, an FNBB employee filled out a depository transfer check for precisely that amount, and the depository transfer check was deposited to DHO's account at FNBB and collected in the same manner as an ordinary check through the Federal Reserve System. (McArdle, 52 Tr. 5274-78) On May 11, 1971, by letter and vote of the board of directors, DHO authorized each of the regional lockbox banks to honor the depository transfer checks, even though the only signature they bore was \"D.H. Overmyer Co., Inc.\" pre-printed onto the check. (Authorizations, FNBB Exs. 300-02) The advantage of the depository transfer system was that it permitted DHO to play the \"float,\" since the same money would be carried as a balance both in DHO's account at FNBB and in DHO's account at the regional bank until the depository transfer check cleared. (McArdle, 52 Tr. 5278) In this way, DHO could use the same money both to offset the regional banks' charges for the lockbox service and the charges by FNBB (such as the compensating balance requirement). (McArdle, 52 Tr. 5278-79) Starting in November, 1971, collections effected through the DHO lockbox system were deposited to DHO mother account number XXX-XXXX at FNBB, rather than the old mother account number XXX-XXXX. (McArdle, 52 Tr. 5282; 11/8/71 Memorandum, FNBB Ex. 305)\n6.4. The ODS Lockbox System. In December, 1971, ODS established a lockbox system with the same four banks as DHO, consisting of two lockboxes in Boston (Post Office Boxes Nos. 3307 and 3308), one in Atlanta (Post Office Box No. 102058), one in St. Louis (Post Office Box No. 14635) and one in Los Angeles (Post Office Box No. 54837). (McArdle, 52 Tr. 5285-86; Chart, FNBB Ex. 306) In each case, ODS duly authorized the relevant bank to service the lockbox, and duly authorized the relevant postmaster to permit that bank to have access to it. (Authorizations, FNBB Exs. 307-18) On April 1, 1972, the number of the ODS lockbox in Los Angeles was changed from 54837 to 80083. (3/23/72 Letter, FNBB Ex. 320; McArdle, 52 Tr. *840 5292) When the ODS lockbox system first began to operate, collections by the regional banks were transferred daily to FNBB by depository transfer check and deposited into ODS mother account number XXX-XXXX. (McArdle, 52 Tr. 5286-870)\n\n7. The Overmyer Zero Balance Disbursement Systems\n\n7.1. General Description of a Zero Balance Disbursement System. A zero balance disbursement system consists of one or more commercial checking accounts called zero balance accounts and a commercial checking account called the mother account. (Chart, FNBB Ex. 276; McArdle, 51 Tr. 5206-07) All deposits are made to the mother account. (McArdle, 51 Tr. 5206-07) The zero balance accounts should never have positive balances. (McArdle, 51 Tr. 5207) When checks are written on the zero balance accounts, the bank, as authorized by the customer, clears them, thereby creating overdrafts, and each day automatically transfers from the mother account to each zero balance account the exact amount necessary to cover the overdraft and return the balance to zero, hence the name \"zero balance account.\" (McArdle, 51 Tr. 5206-08) Checks can also be written on the mother account or not, as the customer chooses. (McArdle, 51 Tr. 5207-08) The advantage of a zero balance disbursement system is that it permits the company's treasurer to segregate various categories of expense by using a separate account to pay each, while at the same time giving him the ease of not having to transfer money constantly from one account to another and having only one account balance about which to worry. (McArdle, 51 Tr. 5206-07)\n7.2. The First DHO Zero Balance Disbursement System. On September 19, 1969, the first Overmyer zero balance disbursement system was opened at FNBB with DHO special account number XXX-XXXX as the mother account and DHO payroll account number XXX-XXXX as the zero balance account. (McArdle, 51 Tr. 5209; Chart, FNBB Ex. 277) On August 5, 1969, DHO had authorized FNBB to pay checks on DHO payroll account number XXX-XXXX, thereby creating overdrafts, and automatically to transfer sufficient funds to cover the overdrafts out of DHO special account number XXX-XXXX. (FNBB Ex. 280) In March, 1970, DHO opened a new payroll account number XXX-XXXX as a second zero balance account feeding from special account number XXX-XXXX, and then in April, 1970, closed payroll account number XXX-XXXX. (McArdle, 51 Tr. 5210; 3/9/70 Memorandum, FNBB Ex. 281; Chart, FNBB Ex. 277)\n7.3. The Second DHO Zero Balance Disbursement System. In November, 1971, at DHO's request, a second DHO zero balance disbursement system was opened to replace the first one with a new DHO account number XXX-XXXX as the mother account, and with the existing zero balance DHO payroll account number XXX-XXXX as one of the zero balance accounts in the new system, and a new DHO freight account number XXX-XXXX as the other. (11/8/71 Memoranda, FNBB Exs. 283-84; Chart, FNBB Ex. 282; McArdle, 51 Tr. 5215)\n7.4. The ODS Zero Balance Disbursement System. In November, 1971, ODS authorized a zero balance disbursement system at FNBB to begin in January, 1972, with ODS account number XXX-XXXX as the mother account and ODS payroll account number XXX-XXXX and ODS casual payroll account number XXX-XXXX as the zero balance accounts. (McArdle, 51 Tr. 5218-19; 11/12/71 Authorization Letter, FNBB Ex. 286; 12/21/71 Memorandum, FNBB Ex. 287; Chart, FNBB Ex. 285)\n7.5. The Combined Overmyer Zero Balance Disbursement System. In August, 1972, the Overmyer organization opened a zero balance disbursement system at FNBB that, from time to time, included accounts of ODS, DHO, TOC, Telecasting and D.H. Overmyer Co., Inc. (Florida), a subsidiary of DHO. (McArdle, 51 Tr. 5221-24; Chart, FNBB Exs. 288A-C) As established in August, 1972, and formally authorized on August 15, 1972, this zero balance disbursement system had ODS treasurer's account number 529-1308 as the mother account and seven zero balance accounts: ODS *841 account number XXX-XXXX (the former ODS mother account), ODS payroll account number XXX-XXXX and ODS casual payroll account number XXX-XXXX (the former ODS zero balance accounts), DHO account number XXX-XXXX (the second DHO mother account), DHO special account number XXX-XXXX (the first DHO zero balance account), DHO payroll account number XXX-XXXX (a zero balance account in both DHO systems) and D.H. Overmyer Co., Inc. (Florida), account number XXX-XXXX. (McArdle, 51 Tr. 5222-23; 8/15/72 Authorization, FNBB Ex. 278; 8/15/72 ODS Minutes, FNBB Ex. 279; 8/2/72 Letter, FNBB Ex. 334; Chart, FNBB Exs. 288A-C) By authorization of January 18, 1973, the Overmyer organization added four more zero balance accounts to the system: ODS payroll account number XXX-XXXX, DHO payroll account number XXX-XXXX, Telecasting payroll account number XXX-XXXX and TOC payroll account number XXX-XXXX. (McArdle, 51 Tr. 5223-24; 1/18/73 Authorization, FNBB Ex. 289; Chart, FNBB Exs. 288A-C) Thereafter, the Overmyer organization closed DHO special account number XXX-XXXX, DHO payroll account number XXX-XXXX, D.H. Overmyer Co., Inc. (Florida) account number XXX-XXXX and TOC payroll account number XXX-XXXX. (McArdle, 51 Tr. 5224; Chart, FNBB Exs. 288A-C)\n\n8. The FNBB/ODS Assigned Accounts Loan\n\n8.1. The Principal and Interest. Pursuant to a loan and security agreement dated May 26, 1972, FNBB agreed to make a demand loan to ODS of either $1,500,000 or an amount equal to 80 percent of ODS's 60-day accounts receivable, whichever was less. (Loan and Security Agreement, FNBB Ex. 321, p. 1, \u0e07\u0e07 1.6 and 1.7) Interest on the loan was agreed on at a rate of two percent above FNBB's base (or prime) rate and, in addition, a service charge of $1,250.00 per month was agreed on. (Loan and Security Agreement, FNBB Ex. 321, p. 2, \u0e07\u0e07 5.2 and 5.3)\n8.2. The Security and FNBB's Rights with Respect Thereto. ODS assigned to FNBB \"[a]s security for the payment and performance of all liabilities\" all its accounts receivable then in existence or thereafter arising. (Loan and Security Agreement, FNBB Ex. 321, p. 2, \u0e07 7.1[a]) By a separate security agreement of the same date, DHO pledged to FNBB, as additional security for the loan to ODS, $927,162.69 of its accounts receivable, all of which arose before January 1, 1972, when ODS began operations, and all of which were, therefore, already more than 120 days old. (Security Agreement, FNBB Ex. 322, pp. 1, 4; McArdle, 53 Tr. 5311) Section 8 of the loan and security agreement provided for ODS to continue to collect its accounts, but to hold the proceeds in trust for FNBB and to turn them over to FNBB immediately:\nUntil the Bank requests that debtors on accounts receivable of the Borrower be notified of the Bank's security interest the Borrower shall continue to collect them. In this event the Borrower shall hold the proceeds received from collection in trust for the Bank without commingling the same with other funds of the Borrower and shall turn the same over to the Bank, or to such other bank as may be approved by the Bank, immediately upon receipt in the identical form received.\n(Loan and Security Agreement, FNBB Ex. 321, p. 3, \u0e07 8; see also Security Agreement, FNBB Ex. 322, p. 2, \u0e07 3) Section 8 also gave FNBB the right to notify ODS's customers of the assignment:\nThe Borrower shall at the request of the Bank notify the account debtors of the security interest of the Bank in any account and the Bank may itself at any time so notify account debtors.\n(Loan and Security Agreement, FNBB Ex. 321, p. 3, \u0e07 8; see also Security Agreement, FNBB Ex. 322, p. 2, \u0e07 3) In addition, section 10.2 gave FNBB the right to collect or sell the ODS receivables with or without notice to ODS:\nInsofar as collateral shall consist of accounts receivable. . . . the Bank may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose or realize *842 upon collateral as the Bank may determine, whether or not liabilities or collateral are then due and for the purpose of realizing the Bank's rights therein, the Bank may receive, open and dispose of mail addressed to the Borrower and endorse notes, checks, drafts, money orders, documents of title or other evidences of payment, shipment or storage or any form of collateral on behalf of and in the name of the Borrower.\n(Loan and Security Agreement, FNBB Ex. 321, p. 3, \u0e07 10.2; see also Security Agreement, FNBB Ex. 322, p. 3, \u0e07 6)\n8.3. Cost of Collection. ODS also agreed to pay the cost of collection, including reasonable attorneys' fees:\nThe Borrower shall pay to the Bank on demand any and all expenses, including reasonable counsel fees, incurred or paid by the Bank in protecting or enforcing its rights upon or under liabilities or collateral.\n(Loan and Security Agreement, FNBB Ex. 321, p. 4, \u0e07 13) The loan and security agreement provided that it was to be governed in all respects by Massachusetts law. (Loan and Security Agreement, FNBB Ex. 321, p. 4, \u0e07 14)\n8.4. Application of Proceeds of Collection or Sale of Receivables. The loan and security agreement permitted FNBB to apply the proceeds of collection or sale of the receivables to whatever obligations of ODS it chose, including overdrafts:\nAfter deducting all of said expenses [of collection] the residue of any proceeds of collection or sale of liabilities or collateral shall be applied to the payment of principal or interest on liabilities in such order of preference as the Bank may determine, proper allowance for interest on liabilities not then due being made, and any excess shall be returned to the Borrower and the Borrower shall remain liable for any deficiency.\n(Loan and Security Agreement, FNBB Ex. 321, p. 4, \u0e07 13)\n\"Liabilities\" means any and all liabilities of the Borrower to the Bank of every kind and description, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, regardless of how they arise or by what agreement or instrument they may be evidenced or whether evidenced by any agreement or instrument.\n(Loan and Security Agreement, FNBB Ex. 321, p. 1, \u0e07 1.1)\n8.5. Statements of Account. The loan and security agreement provided for FNBB to render to ODS a monthly statement of account, and provided that it became conclusively binding unless objected to within 30 days:\nAt least once each month the Bank shall render a statement of account for the Borrower's Loan Account which statement shall be considered correct and accepted by the Borrower and conclusively binding upon the Borrower unless it notifies the Bank to the contrary within thirty (30) days of the sending of said statement by the Bank to the Borrower.\n(Loan and Security Agreement, FNBB Ex. 321, p. 2, \u0e07 3.1)\n8.6. Guaranties of ODS Obligations. On the day the loan and security agreement was executed, Mr. Overmyer and TOC executed guaranties of all obligations of ODS on the same FNBB form that was used for the ODS guaranty of the obligations of DHO. (Guaranties, FNBB Exs. 323-24; see Requested Finding No. 511, supra)\n8.7. The Mechanics of the Assigned Accounts Loan. On May 26, 1972, Mr. Connery, acting on behalf of ODS, authorized FNBB to deposit the $1,500,000 proceeds of the assigned accounts to the ODS bank account at FNBB (i.e. ODS account number XXX-XXXX, the ODS mother account). (Authorization, FNBB Ex. 325) On May 31, 1972, five days later, Mr. Lake, on behalf of ODS, requested that each day FNBB automatically advance to ODS and deposit to ODS account number XXX-XXXX the exact amount of receivables collected that day, so that the loan balance would remain steady at $1,500,000. (5/31/72 Letter, FNBB Ex. 326; McArdle, 53 Tr. 5319)\n*843 8.8. The Agency Account System. In order to effectuate the provision of section 8 of the loan and security agreement that ODS would hold collections in trust and pay them over to ODS, on May 26, 1972, ODS and FNBB entered into an agency account agreement with each of the regional lockbox banks. (Agency Account Agreements, FNBB Exs. 327-29) Although the copies of these agreements that are in evidence are unexecuted, the agreements were in fact executed. (Agency Account Agreement Amendments, FNBB Exs. 330-32, 1st sentence; see McArdle, 53 Tr. 5327-28) The effect of the agency account agreements was to require the regional lockbox banks to deposit the proceeds collected through the regional ODS lockboxes into agency accounts, i.e. accounts of ODS as agent for FNBB, so that the money could be withdrawn only by or with the permission of FNBB. (Agency Account Agreements, FNBB Exs. 327-29, pp. 1 and 2, \u0e16\u0e16 1 and 2; McArdle, 53 Tr. 5320-23)\nFunds on deposit in the Agency Account may be withdrawn only by, and shall be the property of, the Bank and funds in or credits to the Agency Account shall be transferred to the Bank by wire or otherwise as the Bank may direct.\n(Agency Account Agreements, FNBB Exs. 327-29, p. 2, \u0e16 1) Use of an agency account system is a standard banking procedure for policing an assigned accounts loan. (McArdle, 53 Tr. 5323)\n8.9. Initial Operation of the Assigned Accounts Loan. Starting May 26, 1972, the proceeds of all the ODS and DHO lockboxes went to the Factoring Division of FNBB where they were applied to reduce the principal amount of the loan. The Factoring Division then re-advanced the same amount to bring the loan back to $1,500,000, and deposited that amount into the ODS mother account number XXX-XXXX. (McArdle, 52 Tr. 5297-98, 53 Tr. 5330-31; 5/31/72 Letter, FNBB Ex. 326) None of the collections were deposited to the DHO mother account number XXX-XXXX, and as a result DHO account number XXX-XXXX became overdrawn. (McArdle, 53 Tr. 5331) In order to correct this situation, the combined Overmyer zero balance disbursement system was established in August, 1972. (McArdle, 53 Tr. 5329-30) At about the same time, on July 18, 1972, the agency account agreements were amended to add DHO as a party, direct the deposit of DHO collections into the agency accounts and authorize the use of depository transfer checks to transfer collections to FNBB. (Agency Account Agreement Amendments, FNBB Exs. 330-32) Starting in August, 1972, the proceeds collected through all of the ODS and DHO lockboxes each day were directed to the Factoring Division of FNBB where they were applied to reduce the ODS assigned accounts loan. The Factoring Division then reestablished the loan by depositing a like amount into the combined mother account, ODS treasurer's account number 529-1308, and that mother account fed zero balance accounts operated by DHO, ODS, D.H. Overmyer Co., Inc. (Florida), TOC and Telecasting. (McArdle, 53 Tr. 5332-33; Combination of Charts, [left to right] FNBB Exs. 306, 290, 333, 288A, 288B and 288C)\n8.10. The Additional Advance of $1,500,000 on the Assigned Accounts Loan. On August 31, 1972, at the request of Mr. Overmyer, Mr. Neely of FNBB agreed to advance to ODS on the assigned accounts loan an additional $1,500,000 to clean up an overdraft on the ODS books for the ODS audit, and then reduce the loan back to $1,500,000 by applying against it the first $1,500,000 of receivables collected in September and not readvancing the funds to the ODS mother account. (Neely Dep., Pl. Ex. 133, pp. 98-100 and Ex. H; Responses to Requests of DHO/ODS/ISLI for Admissions from FNBB Nos., 53-54)\n8.11. Increase of the Assigned Accounts Loan to $1,650,000. On May 21, 1973, at the request of ODS, Mr. Neely agreed to increase the amount of the assigned accounts loan to $1,650,000. (McArdle, 53 Tr. 5337-41; 5/21/73 Memorandum, FNBB Ex. 335; Account Status Report, FNBB Ex. 336)\n8.12. Demand for Payment. On November 26, 1975, FNBB made demand on TOC, ODS and Mr. Overmyer with copies to DHO *844 for payment of the assigned accounts loan. (11/26/75 Letters, FNBB Exs. 359-61)\n8.13. Amount Due on Assigned Accounts Loan. During November, 1973, FNBB applied collections of ODS and DHO receivables against the assigned accounts loan until it was reduced to $81,777.68. (McArdle, 53 Tr. 5392-93; 11/73 Statement of Account, FNBB Ex. 356) FNBB was under no obligation to reduce the amount of the assigned accounts loan further, or even to have reduced it at all. (Loan and Security Agreement, FNBB Ex. 321, p. 4, \u0e07 13) Statements of Account showing the $81,777.68 figure were rendered to ODS, and ODS never notified FNBB of any alleged error in the figure. (McArdle, 53 Tr. 5356-63; Statements of Account, FNBB Exs. 351, 356, 357; Pearlstein, 55 Tr. 5660-63) Pursuant to the terms of the loan and security agreement, the $81,777.68 figure became binding on ODS. (Loan and Security Agreement, FNBB Ex. 321, p. 2, \u0e07 3.1) Moreover, the notations on the original of the November, 1973 statement of account sent to ODS and copied during discovery at the Weathervane Farms barn show that the Overmyer accounting department reconciled the amounts of the collections to the Overmyer books. (11/73 Statement of Account, FNBB Ex. 357, pp. 2-3; McArdle, 53 Tr. 5394-97; Pearlstein, 55 Tr. 5660-63; see also Handwritten Note, FNBB Ex. 418, p. 2) Starting from the principal balance of $81,777.68 on January 1, 1974, and applying the terms of the assigned accounts loan (a matter of arithmetic), the amount due on the assigned accounts loan as of March 31, 1982, was $171,947.76. (Computer Printout, FNBB Ex. 350, p. 6; Chart, FNBB Ex. 362; McArdle, 53 Tr. 5369)\n\n9. The ODS Overdraft\n\n9.1. The Creation of the Overdraft. The combined Overmyer mother account, ODS treasurer's account number 529-1308, was consistently overdrawn by amounts ranging up to about $1,000,000 from August, 1972, through August, 1973. (Neely Dep., Pl. Ex. 133, pp. 84-86, 101-04, 108 and Exs. I and J; Connery, 24 Tr. 2350-53; 11/29/73 Overmyer Testimony, FNBB Ex. 440, pp. 234-35; Lake, 59 Tr. 6056-57) Every couple days Mr. Neely called Mr. Overmyer and told him to reduce the overdraft. Each time Mr. Overmyer said that he would. (Neely Dep., Pl. Ex. 133, p. 92)\n9.2. Interest on the ODS Overdraft. On August 28, 1973, Mr. Santarelli of FNBB wrote to Mr. Lake of the Overmyer organization and informed him that although FNBB had been charging six percent flat interest on the overdraft, thereafter it would charge the base (or prime) rate plus one percent with a floor of six percent. (8/28/73 Letter, FNBB Ex. 338) Thereafter, FNBB charged prime plus one percent, and ODS never complained about the increase in the charge. (McArdle, 53 Tr. 5345-47, 54 Tr. 5600) Moreover, the Overmyer organization voluntarily continued to write checks that caused overdrafts and increased the overdraft on ODS treasurer's account number 529-1308 from $1,122,390.40 on August 31, 1973, to $3,981,385.15 on November 30, 1973. (McArdle, 53 Tr. 5347-49; Lake, 59 Tr. 6059-60) The conduct of ODS constituted an acceptance of the terms set forth in Mr. Santarelli's August 28, 1973 letter, and rendered that letter a written contract.\n9.3. Demand for Payment. On November 26, 1975, FNBB made demand on TOC, ODS and Mr. Overmyer with copies to DHO for payment of the overdraft on ODS treasurer's account number 529-1308. (11/26/75 Letters, FNBB Exs. 359-61).\n9.4. Amount Due on Overdraft. After DHO filed a Chapter XI petition in the Southern District of New York on November 16, 1973, FNBB began on November 23, 1973, to apply all collections of ODS and DHO receivables to reduce the overdraft on the combined Overmyer mother account. (McArdle, 53 Tr. 5381, 5387-89, 5393) For several months, a group of persons under the supervision of an FNBB consultant, Mr. Ralph Todd, worked to effect collection of the ODS and DHO receivables. (McArdle, 53 Tr. 5388-89) In mid 1974, FNBB engaged a company owned by Mr. George Friedlander, First Exeter Corporation, to try to collect those accounts that remained *845 open. (McArdle, 53 Tr. 5389; 9/12/74 Agreement, FNBB Ex. 355) Mr. McArdle used as an opening principal balance an overdraft of $3,981,385.15 as of November 30, 1973, which he took directly from the monthly bank statement for ODS Treasurer's account number 529-1308. (McArdle, 53 Tr. 5371-72; Computer Printout, FNBB Ex. 352, p. 7; 11/30/72 Bank Statement, FNBB Ex. 353) The Overmyer organization received these bank statements monthly (Bank Statements, FNBB Ex. 394; Pearlstein, 55 Tr. 5664-65) and reconciled them to the Overmyer books through at least October 31, 1973. (Status of Bank Reconciliations, FNBB Ex. 72, pp. 3, 5, FNBB Ex. 417, pp. 2, 4; Pearlstein, 55 Tr. 5684-85) Mr. McArdle took all interest and principal payments from the bank statements and checked all entries after January 1, 1974, against basic documentation kept by FNBB. (McArdle, 53 Tr. 5379-82) FNBB and the DHO receiver, Mr. Herzog, did not keep basic support from November 16, 1973, through December 31, 1973. (McArdle, 53 Tr. 5381-82) Any items after January 1, 1974, for which Mr. McArdle could not find support he resolved in favor of the Overmyer organization, and any items he found wrong he corrected. (McArdle, 53 Tr. 5382-83) In addition, the figures were reconciled by FNBB with the DHO receiver in 1974. (McArdle, 53 Tr. 5382) After giving credit for all collections and applying the prime plus one percent interest rate, the amount due on the overdraft as of March 31, 1982, was $6,230,742.07. (Computer Printout, FNBB Ex. 352, p. 27; Chart, FNBB Ex. 362; McArdle 53 Tr. 5397)\n\n10. Miscellaneous Overmyer Contentions\n\n10.1. Stock Warrant Agreement. FNBB sought to receive warrants for 100,000 shares of TOC stock. (Response to Request of DHO/ODS/ISLI for Admissions from FNBB No. 41) On October 13, 1969, TOC sent to FNBB a letter drafted by FNBB's counsel agreeing to issue common stock purchase warrants for the right to purchase up to 100,000 shares of TOC common stock for $7.50 per share, expiring December 31, 1974. (Overmyer Ex. 7, pp. 8-10) There is no evidence that such warrants were ever issued.\n10.2. Executor of Mr. Overmyer's Will. There is no evidence that FNBB required Mr. Overmyer to appoint the Old Colony Division executor of his will as a condition for extending credit. There is no evidence even that Mr. Overmyer appointed the Old Colony Division his executor.\n10.3. Collection of Telecasting Receivables Through the DHO Lockbox System. Some Telecasting receipts were collected through the lockbox at The First National Bank in St. Louis. (McArdle, 53 Tr. 5466) These Telecasting receipts were transferred to FNBB and applied in the same manner as any other receipts, i.e. after May 26, 1972, they were used to pay down the ODS assigned accounts loan. (McArdle, 54 Tr. 5488-89) FNBB did not see the checks collected through the St. Louis lockbox, did not receive copies of the items that were deposited in St. Louis and did not find out about the Telecasting receipts being part of what was collected there until after the Warehouse XI was filed. (McArdle, 53 Tr. 5467, 54 Tr. 5491-92) In any event, on July 10, 1970, the board of directors of Telecasting had authorized The First National Bank in St. Louis to deposit Telecasting checks that were mailed to the DHO St. Louis lockbox number 14303 into the DHO account, the proceeds of which were transferred daily to Boston. (7/10/70 Minutes, Tele. Ex. 28; 8/13/70 Authorization Letter, FNBB Ex. 371) Telecasting checks were mailed to the DHO St. Louis lockbox number 14303 only because Telecasting instructed its customers to mail them there. (Dorfner Dep., FNBB Ex. 240, pp. 13-16; see McArdle, 52 Tr. 5260)\n10.4. Dishonoring of Overmyer Checks. In October and November, 1973, FNBB began to dishonor Overmyer checks that created overdrafts on the combined Overmyer mother account, ODS treasurer's account number 529-1308. (Responses to Requests of DHO/ODS/ISLI for Admissions from FNBB Nos. 68 and 75) The Overmyer organization submitted to Mr. Todd, a consultant *846 for FNBB, lists of checks that they thought it was very important to pay. (Todd Dep., Pl. Ex. 140B, pp. 72-73, 76, 80; Overmyer Dep., Pl. Ex. 139B, pp. 155-57) Mr. Todd discussed the list with Mr. Kirby of the Overmyer organization. (11/29/73 Overmyer Testimony, FNBB Ex. 440, p. 236; Overmyer Dep., Pl. Ex. 139B, p. 175) Mr. Todd had FNBB dishonor some checks that had already been mailed out before his approval was sought. (Overmyer Dep., Pl. Ex. 139B, pp. 168-70) There is no evidence that he ever approved a check and later caused FNBB to dishonor it.\n10.5. Inequitable Conduct. There is no evidence that FNBB ever engaged in any conduct with respect to the Overmyer organization that would make it inequitable for FNBB to collect the Overmyer obligations in full or would provide the Overmyer organization with any manner of defense, setoff, counterclaim or other claim. It was the opinion of both Mr. Lake, a banker and former Overmyer treasurer, and Mr. McArdle, a former FNBB assistant vice-president, that although a comprehensive banking arrangement with all the various terms that existed between FNBB and the Overmyer organization is not an everyday arrangement, there is nothing objectionable about it if FNBB and the customer agree to it. (Lake, 59 Tr. 6040-44; McArdle, 54 Tr. 5582-88) With a treasurer of Mr. Lake's education and banking experience (Lake, 59 Tr. 6020-24), and with Mr. Overmyer's experience as the owner of a national bank (D. Overmyer Dep., FNBB Ex. 224, p. 86; D. Overmyer Financial Statements, U.S. Trust Ex. 1, pp. 16, 18) and an offshore bank (Overmyer Organization Chart, Connery Ex. 8), the Overmyer organization obviously had a full and complete understanding of the nature of the banking arrangements it agreed to with FNBB.\n10.6. Precipitating Cause of the Warehouse XI. From 1967 through 1973, DHO sold and leased back almost all of its warehouse facilities. (Connery, 24 Tr. 2344-45) The substantial proceeds of the sale and lease backs were used to cover the deficit created by the operations of the company. (Connery, 24 Tr. 2345-47) In late 1973, DHO ran out of properties to sell and lease back, and the other operations of the company were unable to produce enough cash to support the Overmyer operations. (Connery, 24 Tr. 2346) As a result, DHO and 37 of its subsidiaries filed a Chapter XI petition in the Southern District of New York on November 16, 1973 (the \"Warehouse XI\").\n\n11. Admission of the Amount Due\n\n11.1. Admission by the Overmyer Accountants. During discovery, counsel for FNBB found and copied at the office of the United States Attorney for the Southern District of New York a handwritten note from Mr. Joseph Abrams (\"Joe A.\"), an Overmyer accountant (4/19/74 Overmyer Letter, FNBB Ex. 420, p. 2), to Mr. Bernard Gutilla (\"Bernie\"), the Overmyer controller (Connery, 24 Tr. 2295-96; Lynch, 17 Tr. 1658; 4/19/74 Overmyer Letter, FNBB Ex. 420, p. 2), stating that the debt due from DHO and ODS to FNBB as of February, 1974, exclusive of interest, was $7,038,359.80, plus $81,777.68 for the assigned accounts loan, a total of $7,120,137.48. (Handwritten Note, FNBB Ex. 418; Pearlstein, 55 Tr. 5684-88) The $81,777.68 is the same figure used by Mr. McArdle in calculating the amount due on the assigned accounts loan. (Computer Printout, FNBB Ex. 350, p. 1; McArdle, 53 Tr. 5355) The $7,038,359.80 consisted of $3,350,000 due on the term loans, plus $2,500,000 transferred by FNBB from the overdraft to the assigned accounts loan on December 31, 1973, for internal accounting purposes, plus $1,038,359.80 overdraft as shown by the bank statement for ODS treasurer's account number 529-1308, plus $150,000 due on receiver's certificates. (Handwritten Note, FNBB Ex. 418, p. 2; see McArdle, 53 Tr. 5386-87) The $3,350,000 was the principal balance used by Mr. McArdle in calculating the amount due on the term loans, after adjustment for the two $150,000 payments made in 1973. (Computer Printout, FNBB Ex. 275, p. 2; McArdle, 51 Tr. 5182, 5185) The overdraft figures are from the same set of bank statements that Mr. McArdle used. (McArdle, 53 Tr. 5380-81)\n*847 11.2. Admission by Mr. Overmyer. In sworn testimony before the United States Bankruptcy Court for the Southern District of New York on November 29, 1973, 13 days after the Warehouse XI was filed, Mr. Overmyer admitted that the principal amount due on the term loan was about $3,200,000, that the principal amount due on the assigned accounts loan was $1,650,000, that there was a very large overdraft, and that the total amount owed by the Overmyer organization to FNBB was approximately $7,000,000 or $8,000,000. (11/29/73 Overmyer Testimony, FNBB Ex. 440, pp. 212, 216, 230-32, 234-38)\n\n12. The 1973 Fraudulent Conveyances\n\n12.1. Transfer of ISLI, Hadar and Canadian Operations. Sometime after August 13, 1973, Mr. Overmyer and Mr. Connery transferred ISLI, Hadar, D.H. Overmyer Company of Canada Limited, D.H. Overmyer Company (Quebec) Ltd. and Overmyer Canada, Ltd., and the other nine corporations named in Finding No. 5.5., supra, first from DHO to TOC, then from TOC to Mr. Overmyer, and then from Mr. Overmyer to a trust for his children of which the trustee was The Bank of Butterfield Executor & Trustee Company Limited in Hamilton, Bermuda (the \"Bermuda Trust\"), and created back dated minutes of DHO and TOC purporting to show that the transfer was made on February 8, 1972. (Compare 2/8/72 DHO Minutes, FNBB Ex. 73, and 2/8/72 TOC Minutes, FNBB Ex. 74, with 8/13/73 DHO Minutes, FNBB Ex. 78) The DHO minute book contains numerous minutes dated after February 8, 1972, agreeing to guarantee obligations of one or another of the subsidiary corporations purportedly transferred to the Bermuda Trust on that day. (11/2/72 DHO Minutes, FNBB Ex. 76; 3/27/73 DHO Minutes, FNBB Ex. 77; 8/13/73 DHO Minutes, FNBB Ex. 78) It also contains numerous minutes after that date expressly referring to one or another of the purportedly transferred companies as a \"subsidiary\" of DHO. (3/23/72 DHO Minutes, FNBB Ex. 79, p. 2; 9/6/72 DHO Minutes, FNBB Ex. 80, p. 2; 10/20/72 DHO Minutes, FNBB Ex. 81, p. 2; 4/20/73 DHO Minutes, FNBB Ex. 82, pp. 2, 5; 1/22/73 DHO Minutes, FNBB Ex. 83, pp. 2, 3, 4, 5, 6) A June 1, 1972, Overmyer organization chart shows every company that was purportedly transferred from DHO to TOC to Mr. Overmyer to the Bermuda Trust on February 8, 1972, as still being owned by either DHO or TOC on June 1, 1972. (Compare Organization Chart, Raible Ex. 5, Connery Ex. 8, with 2/8/72 DHO Minutes, FNBB Ex. 73) Mr. Connery's explanation that the June 1, 1972 organization chart was inaccurate when it was made because it was prepared for internal Overmyer use only (Connery Dep., Ex. 231, p. 198) is not credible. The ISLI minute book contains minutes of a January 22, 1973 meeting of the board of directors in which there is a reference to \"its [ISLI's] parent company, D.H. Overmyer Co., Inc. (Ohio).\" (1/22/73 ISLI Minutes, Raible Ex. 323, pp. 2, 5) Both these minutes and the January 22, 1973 DHO minutes include a secretary's certificate signed by Mr. Connery, stating the parent-subsidiary relationship. (1/22/73 ISLI Minutes, Raible Ex. 323, p. 5; 1/22/73 DHO Minutes, FNBB Ex. 83, pp. 5, 6) The waiver of notice for the April 18, 1972 annual meeting of stockholders in the ISLI minute book shows DHO as the stockholder. (4/18/72 ISLI Waiver of Notice, Raible Ex. 304) The corresponding document for ISLI for 1973 is missing from the ISLI minute book, and the corresponding documents for Hadar for both 1972 and 1973 are missing from the Hadar minute book. (Cf. ISLI Minute Book for April, 1973, between Raible Exs. 325-326; 4/18/72 Hadar Minutes, Raible Exs. 117-18; Hadar Minute Book for April, 1973, between Raible Exs. 120-21) ISLI stock certificate number 4 in the ISLI minute book was issued to DHO on February 16, 1972, eight days after the purported transfer to the Bermuda Trust. (Stock Certificate No. 4, Raible Ex. 372) Although the deed of addition adding to the Bermuda Trust the companies purportedly transferred by DHO on February 8, 1972, is dated April 14, 1972, the Bermuda treasury stamp affixed to it is dated December 10, 1973. (Deed of Addition, Butterfield Dep., FNBB Ex. 253, pp. 4, 9-10, Ex. D, p. 1) Mr. *848 Overmyer's testimony that the transfer to the Bermuda Trust occurred in 1971 or 1972 (D. Overmyer Dep., FNBB Ex. 224, p. 24) and Mr. Connery's testimony that the transfer was made in February, 1972 (Connery, 24 Tr. 2303, 2312-13) are not credible. The minute book of TOC contains an action by consent of the sole shareholder, Mr. Overmyer, dated February 9, 1972, agreeing that the price for the transfer of ISLI, Hadar and the various other companies to Mr. Overmyer was to be a note for $182,000 from Mr. Overmyer to TOC, with $35,000 payable on or before July 15, 1973, and the balance on February 8, 1977, with seven percent interest. (2/9/72 TOC Minutes, FNBB Ex. 85) Mr. Overmyer had never paid the note (D. Overmyer Dep., FNBB Ex. 224, p. 28), although TOC has been a debtor-in-possession under Chapter XI since December 15, 1975. (Application, FNBB Ex. 430) Mr. Overmyer and Mr. Connery transferred ISLI, Hadar, the Canadian operations and the other companies to the Bermuda Trust for an inadequate consideration and with deliberate, actual intent to hinder, delay and defraud FNBB in collection of the obligations of TOC, DHO, ODS and Mr. Overmyer. Regardless of when it occurred, the transfer violated paragraphs 5.7 and 5.8 of the loan agreement. (Loan Agreement, FNBB Ex. 266, pp. 14-15, \u0e16\u0e16 5.7 and 5.8)\n12.2. Transfer of Intermodal Terminals, Inc. The TOC minute book contains an action by consent of the sole shareholder, Mr. Overmyer, dated February 8, 1972, purporting to transfer all the stock of Intermodal Terminals, Inc. to Mr. Overmyer in exchange for a release of $167,630.64 of notes payable to Mr. and Mrs. Overmyer, a release of TOC's guarantee of those notes and payment by Mr. Overmyer to TOC of $50,000, plus seven percent interest, no later than July 31, 1973. (2/8/72 TOC Minutes, FNBB Ex. 84) Since the transfer of Intermodal Terminals, Inc. was made at the same time as the transfer of ISLI, Hadar and the other companies (Connery, 24 Tr. 2332), the minutes transferring Intermodal Terminals, Inc. are also back dated. By two deeds dated February 7, 1972, Mr. Overmyer (in one deed) and Mr. and Mrs. Overmyer (in the other) conveyed two parcels of land in Yorktown, New York, to Intermodal Terminals, Inc. for $10.00 each. (Deeds, FNBB Exs. 86-87) The real estate conveyed by the deeds is Mr. Overmyer's residence. (Connery, 24 Tr. 2342-43) One of these deeds was recorded on August 16, 1973 (Deed, FNBB Ex. 87, p. 3), and the other on September 27, 1973 (Deed, FNBB Ex. 86, p. 4). These deeds were also back dated. The stock of Intermodal Terminals, Inc. was transferred to the Bermuda Trust by the same deed of addition as the stock of ISLI and Hadar \u0e42\u0080\u0094 the deed of addition that was purportedly made on April 14, 1972, even though the Bermuda treasury stamp is dated December 10, 1973. (Deed of Addition, Butterfield Dep., FNBB Ex. 253, pp. 4, 9-10, Ex. D, p. 1) Mr. Overmyer and Mr. Connery transferred the Overmyer residence to Intermodal Terminals, Inc., and transferred Intermodal Terminals, Inc. to the Bermuda Trust for nominal consideration and with deliberate, actual intent to hinder, delay and defraud FNBB in collection of the obligations of TOC, DHO, ODS and Mr. Overmyer.\n12.3. The Transfers of Weathervane Farms, Inc. and Deauville Private Rental Homes, Inc. Mrs. Overmyer purportedly purchased all the stock of Formodal, Inc. and Overmyer Europe Ltd. from Mr. Overmyer on May 26, 1973. (Deauville Stock Certificate No. 3, Deauville Minute Book, FNBB Ex. 261; Weathervane Stock Certificate No. 3, Weathervane Minute Book, Weathervane Ex. 1) May 26 is Mrs. Overmyer's birthday. (Insurance Application, Schiff Terhune Ex. 4, p. 2) On May 29, 1973, Mrs. Overmyer purportedly donated 20 percent of the stock of each corporation to the corporation, the corporation purportedly resold the 20 percent to the Harrison M. Overmyer Trust for $100,000, and Mrs. Overmyer purportedly transferred the remaining 80 percent to the Barbara M. Overmyer (now Barbara Overmyer Strang) Trust. (5/29/73 Weathervane Minutes, Weathervane Ex. 1; 5/29/73 Deauville Minutes, FNBB Ex. 261; Deauville Stock *849 Certificates Nos. 4 [indicating issuance to Shirley C. Overmyer] and 5, Deauville Minute Book, FNBB Ex. 261; Organization Chart, Connery Ex. 7) Mrs. Overmyer's checks, however, although dated May 26, 1973, bear on front and back stamps with the date \"101573\" and \"15 OCT,\" indicating that they were not deposited until October 15, 1973. (Checks, Deauville Minute Book, FNBB Ex. 261, pp. 97-98; Weathervane Minute Book, Weathervane Ex. 1, pp. 54-55 and following Stock Certificate No. 2) The fact that the documentation for the transfers of Weathervane Farms, Inc. and Deauville Private Rental Homes, Inc. was back dated is conclusively shown by a confidential memorandum from Mr. Connery to Mr. Overmyer dated September 25, 1973:\nShirley needs to purchase the capital stock of Formodal, Inc. from you. 100 shares par value at $10 per share \u0e42\u0080\u0094 $1,000\nShe also needs to purchase all the capital stock of Overmyer Europe Ltd. formerly the Overmyer Publishing Company now named Deauville Private Rental Homes Inc. Have her make two checks payable to you in the amount of $1,000 each and indicate on the reverse side the following:\nOn reverse side of first check:\nTo purchase all of the outstanding capital stock of Overmyer Europe Ltd., formerly D.H. Overmyer Publishing Co. Inc.\nOn reverse side of second check:\nTo purchase all of the outstanding capital stock of Formodal Inc.\nThe checks should be made payable to you and endorsed by you for deposit to the Ohio company with instructions to Accounting that the appropriate cash receipt should be credited through your personal drawing account.\n(9/25/73 Memorandum, Weathervane Minute Book, Weathervane Ex. 1, p. 53; Deauville Minute Book, FNBB Ex. 261, p. 96) On October 31, 1973, Mr. Connery, using his home address rather than his office address, effected a change of name of Overmyer Europe, Ltd. to Deauville Private Rental Homes, Inc., and a change of name of Formodal, Inc. to Weathervane Farms, Inc. (11/2/73, 10/5/73 and 10/30/73 Letters, 10/31/73 Certificate, Deauville Minute Book, FNBB Ex. 261, pp. 40, 42, 47, 53-56; 10/31/73 Certificate, 11/2/73 and 10/5/73 Letters, Weathervane Minute Book, Weathervane Ex. 1, pp. 3-6, 18, 20) Mr. Overmyer and Mr. Connery transferred Weathervane Farms, Inc. and Deauville Private Rental Homes, Inc. to the Harrison M. Overmyer Trust and the Barbara M. Overmyer (Strang) Trust with deliberate, actual intent to hinder, delay and defraud FNBB in the collection of the obligations of TOC, DHO, ODS and Mr. Overmyer.\n\n13. The Pre-1976 ISLI-Telecasting Leases\n\n13.1. Leasing Pattern Established. In 1966, Telecasting commenced a pattern of leasing its equipment from D.H. Overmyer Leasing Co., Inc., which subsequently changed its name to Intermodal Systems Leasing, Inc. (\"ISLI\"). (Raible, 9 Tr. 796) Telecasting leased virtually all of its telecasting equipment from ISLI. (Raible, 3 Tr. 205) Mr. Overmyer directed that this leasing pattern be established. (Raible, 9 Tr. 796) ISLI leased equipment primarily to DHO and Telecasting. (Raible, 3 Tr. 204-05) Telecasting leased both its equipment and the land in Jerusalem Township upon which its transmitter and tower are located from ISLI. (Raible, 3 Tr. 205; ISLI Transmitter Lease, Pl. Exs. 1A and 1B; ISLI Equipment Leases, FNBB Ex. 105-40)\n13.2. Rental, Renewal and Purchase Option Terms of ISLI Leases. Under the terms of the leases between Telecasting and ISLI, there was a substantial reduction in the amount of monthly rent at the termination of the initial lease period. (Raible, 10 Tr. 891-92; H. Klein, 29 Tr. 2764-67; 11/73 ISLI Memo, FNBB Ex. 10; 7/13/71 ISLI Memo, Raible Ex. 607) ISLI maintained a renewal and purchase option policy which provided that a lease covering equipment would be renewed for an initial 36-month period at a price of ten percent of the equipment cost; if the equipment was costly, such as a transmitter or antenna, for a second 36-month renewal period at five percent of the equipment cost; and at the end *850 of the last renewal period, for a purchase option at one dollar per lease. (H. Klein, 28 Tr. 2751, 29 Tr. 2764-65; 11/73 ISLI Memo, FNBB Ex. 10; see 4/28/77 Unsigned Raible Letter to Dorfner, FNBB Ex. 391)\n13.3. Renewal Leases with ISLI. ISLI maintained control over the leases with Telecasting by using inventory cards. (9/12/73 Memo Cohen to Dorfner with Photocopies of Inventory Cards, FNBB Ex. 141) Leases that expired between September, 1971, and August 31, 1973, were either renewed or had purchase options exercised. (9/12/73 Memo, FNBB Ex. 141) Renewal terms or purchase options for these expired leases were indicated in red on photocopies of the inventory cards. (9/12/73 Memo, FNBB Ex. 141; H. Klein, 28 Tr. 2731-32) The renewal terms and purchase options, as stipulated on the inventory cards, were based on the renewal policy of ISLI. (H. Klein, 28 Tr. 2746-47, 29 Tr. 2764-67)\n13.4. Telecasting's Monthly Rental on Equipment Leases as of December, 1975. Telecasting was paying ISLI in December, 1975, $13,534.56 per month for all of the equipment that Telecasting was leasing from ISLI. (H. Klein, 28 Tr. 2755-57) This amount included $582.82 of sales tax resulting in a net rental of $12,951.74. (H. Klein, 28 Tr. 2756) This rental payment had remained unchanged since 1974. (H. Klein, 28 Tr. 2756) Although changes in lease terms had occurred since 1974, no adjustments to the amount invoiced by ISLI were ever made. (H. Klein, 28 Tr. 2757) Based on an analysis prepared by Mr. Howard Klein, the monthly rentals on the equipment leases with ISLI in force as of December, 1975, should have been $12,277.77. (H. Klein, 28 Tr. 2754; Summary of Lease H-1002, FNBB Ex. 101) The $12,277.77 computed by Mr. Klein was based on the monthly rentals from leases and renewals that were substantiated by documentation from Telecasting's files. (H. Klein, 28 Tr. 2749) There was a difference of approximately $700 between the ISLI invoiced amount and the amount computed by Mr. Klein. (H. Klein, 28 Tr. 2756) The difference was caused by the fact that ISLI did not adjust its monthly rental amount between November, 1974, and December, 1975. (H. Klein, 28 Tr. 2757)\n13.5. Recomputed Monthly Rental Based on ISLI's Renewal and Purchase Option Policy. ISLI discontinued the practice of revising the monthly rental to Telecasting on leased equipment in November, 1974. (H. Klein, 28 Tr. 2756) Mr. Klein prepared an analysis indicating that, if ISLI's renewal and purchase option policy had been continued, only six leases would still have been outstanding on December 31, 1976, since the terms of the ISLI leases were beginning to expire and the one dollar purchase options were becoming available. (Analysis of Lease Renewals, FNBB Ex. 102) Mr. Klein computed Telecasting's monthly rental at $8,662.85 as of January 1, 1976, if ISLI had continued to apply its renewal and purchase option policy to the leases. (Summary of Lease H-1002, FNBB Ex. 101; H. Klein, 28 Tr. 2749-52, 2754) Mr. Klein extended his analysis to July 1, 1976, and December 31, 1976, resulting in monthly rentals of $2,503.48 and $1,935.81, respectively. (H. Klein, 28 Tr. 2754; Analysis of Lease Renewals, FNBB Ex. 102)\n\n14. The Original Service Company\n\n14.1. Creation of Jeebs. On March 8, 1974, Mr. Connery formed a new corporation for Mr. Overmyer, Jeebs Distribution Services, Inc. (Connery, 22 Tr. 2164-65; 3/8/74 Jeebs Waiver of Notice of First Meeting, Raible Ex. 503; 3/8/74 Jeebs Minutes of Meeting of Incorporators, Raible Ex. 506, p. 1; 3/8/74 Jeebs Filing Receipt, Raible Ex. 500, p. 5) So eager was Mr. Overmyer to get the new enterprise off the ground, that he had already opened its first bank account at Manufacturers Hanover Trust Company on February 28, 1974. (2/28/74 Jeebs Banking Resolution, Raible Ex. 507, p. 4)\n14.2. The Service Company Function. Jeebs was formed to provide management services to the Overmyer companies that were not in Chapter XI. (D. Overmyer, 43 Tr. 4034-35; Raible Dep., Ex. 259, pp. 62-64) Jeebs entered into a service agreement to provide tax, accounting, insurance and *851 administrative services to Telecasting for $1,500.00 per month on March 1, 1974, a week before Jeebs even existed. (Compare 3/1/74 Telecasting Minutes, Tele Ex. 29, pp. 3-4; with 3/8/74 Jeebs Waiver of Notice of First Meeting, Raible Ex. 503; 3/8/74 Jeebs Minutes of Meeting of Incorporators, Raible Ex. 506, p. 1; and 3/8/74 Jeebs Filing Receipt, Raible Ex. 500, p. 5) On September 5, 1974, an FNBB credit officer examined the books of Telecasting and learned that $576.00 per week was being paid to Mr. Overmyer as salary, and $1,500.00 per month was being paid to Jeebs, neither of which provided any services. (9/5/74 Memo, Pl. Ex. 146)\n14.3. ISLI Lease Payments Made To Jeebs. Starting at least as early as 1975, Mr. Overmyer directed that Telecasting make lease payments to Jeebs rather than ISLI. (H. Klein, 36 Tr. 3420-21; Raible, 10 Tr. 907-11) A number of Telecasting voucher requests record directions to pay money to Jeebs on account of lease obligations. (H. Klein, 38 Tr. 3557-59; ISLI Mailgrams, FNBB Exs. 14-15; Invoices to Telecasting and Telecasting Voucher Requests, FNBB Exs. 216 and 217)\n\n15. Dilatory Bankruptcy Tactics In 1975-1976\n\n15.1. TOC XI Filed To Frustrate FNBB's Collection Efforts. In an attempt to realize upon its collateral, FNBB gave notice of its intention to sell all of the outstanding capital stock of Telecasting at an auction sale scheduled for December 17, 1975. (Notice of Auction Sale, FNBB Ex. 430, p. 3) In order to block this foreclosure, on December 15, 1975, TOC, a holding company without any active operations for cash flow (Complaint, FNBB Ex. 432; D. Overmyer Affidavit, FNBB Ex. 438, p. 5, \u0e16 14), filed a petition in the Bankruptcy Court for the Southern District of New York for an arrangement pursuant to Chapter XI of the Bankruptcy Act (\"TOC XI\"). (Application for Injunction, FNBB Ex. 430; D. Overmyer, 57 Tr. 5886-87) TOC and its chief executive officer, Mr. Overmyer, thereby sought and obtained an order from the Bankruptcy Court enjoining that sale. (12/15/75 Order, FNBB Ex. 430, p. 4)\n15.2. Telecasting XI Filed To Frustrate FNBB Efforts To Preserve Station Assets. After its attempt to sell Telecasting's stock was frustrated by the TOC XI, FNBB prosecuted an action commenced in the Court of Common Pleas of Lucas County, Ohio, in which it sought to have a receiver appointed to take over the operations of Telecasting and to remove them from Mr. Overmyer's control. (D. Overmyer Affidavit, Exhibit to Telecasting Chapter XI Petition, FNBB Ex. 431) Following an extensive and protracted trial, Common Pleas Judge Robert Franklin announced he was persuaded that the appointment of a receiver was warranted, and that he intended to order such relief. (Application, Exhibit to Telecasting Chapter XI Petition, FNBB Ex. 431) Thereupon, on August 24, 1976, Mr. Overmyer caused Telecasting, then an allegedly solvent and successful company, to file a petition in the Bankruptcy Court for the Southern District of New York for an arrangement under Chapter XI of the Bankruptcy Act (\"Telecasting XI\"). (Original Petition, FNBB Ex. 431) This petition was filed to divest the Ohio Court of Common Pleas of jurisdiction and to frustrate its decision to appoint a receiver to protect Telecasting's assets. (Original Petition with Exhibits, FNBB Ex. 431)\n\n16. Assignment if ISLI Leases To Hadar\n\n16.1. The Assignment. An agreement dated December 8, 1975, transferred from ISLI to D.H. Overmyer Trucking Company, which later changed its name to Hadar, 30 equipment leases between Telecasting and ISLI. (Raible, 3 Tr. 205-07; 12/8/75 Agreement, Pl. Ex. 48) These leases covered substantially all of the broadcasting and studio equipment used by Telecasting as of December, 1975. (Raible, 4 Tr. 350-51) The assignment of the ISLI leases to Hadar was ordered by Mr. Overmyer. (Raible, 4 Tr. 345) ISLI assigned the 30 leases to Hadar when Hadar was an inactive company with no significant assets. (Raible, 4 Tr. 348) The assignment provided for no security interest to ISLI in case of default by Hadar. (12/8/75 Agreement, Pl. Ex. 48) *852 Telecasting was never given the opportunity to purchase the 30 leases from ISLI. (Raible, 4 Tr. 345-46, 352)\n16.2. Assignment Price. ISLI sold and assigned its 30 leases with Telecasting to Hadar for $466,000 payable on an installment basis over three years. (12/8/75 Agreement, Pl. Ex. 48) Hadar rewrote these 30 leases as a single lease, lease ML-2, and charged Telecasting $16,790.40 per month over the same three-year period, a total of $604,454. (H. Klein, 29 Tr. 2806-08) At all times during this three-year period, Telecasting's $16,790.40 monthly payment to Hadar exceeded Hadar's agreed payment to ISLI. (H. Klein, 29 Tr. 2813) At the end of the three-year period, Telecasting had paid approximately $140,000 more to Hadar than Hadar was purportedly obligated to pay to ISLI. (H. Klein, 29 Tr. 2813-14) However, Hadar never made a payment to ISLI during this three-year period or thereafter through March 31, 1981. (H. Klein, 29 Tr. 2812; Raible, 4 Tr. 350, 352) Hadar's amended schedules, filed November 23, 1981, show a claim of $335,698 by ISLI against Hadar based on the assignment. (Raible, 11 Tr. 1039; 12 Tr. 1061)\n16.3. Transmitter Site Lease Not Assigned. The ISLI lease of the transmitter site was not the subject of any assignment from ISLI to Hadar. (Raible, 12 Tr. 1128, 9 Tr. 854-55) On its books, Hadar allocated the full $466,000 purchase price to equipment. (Lynch, 17 Tr. 1650-1651) Mr. Lynch did not allocate any portion of the purchase price to real estate. (Lynch 17 Tr. 1651) He recorded payments with respect to the transmitter site as if ISLI still owned the property. (Lynch, 17 Tr. 1651)\n16.4. The Back Dating of the Assignment. The agreement assigning the ISLI leases to Hadar, which was \"made as of December 8, 1975\" (one week before the TOC XI was filed [12/15/75 Temporary Restraining Order, FNBB Ex. 430, p. 4]), refers to a promissory note \"of even date\" payable to ISLI. (12/9/75 Agreement, Pl. Ex. 48, p. 1) The promissory note, however, is dated \"August 25, 1976,\" (8/25/76 Promissory Note, Pl. Ex. 48A), one day after the Telecasting XI was filed (Petition, FNBB Ex. 431, p. 2). Mr. Dorfner, president of Telecasting, was not even informed that an assignment was to be made until April, 1976, when he was sent a letter that was back dated to December 8, 1975. (12/8/75 Letter Time-stamped 4/23/76, Raible Ex. 606) Throughout the first eight months of 1976, Telecasting continued to make lease payments instead to Jeebs. (Lynch, 16 Tr. 1594-95; Raible, 6 Tr. 501-02) Payments to Jeebs made by Telecasting from January through August, 1976, with certain exceptions, were for the leases that had purportedly already been assigned to Hadar. (H. Klein, 38 Tr. 3555-59) On January 9, 1976, for example, Mr. Overmyer ordered Telecasting: \"Want you to wire $5,000 to Jeebs today. . . . `charge any account you want.'\" (1/9/76 Telecasting Voucher Request, FNBB Ex. 216; H. Klein, 38 Tr. 3558) Telecasting's payments to Jeebs during the period September, 1975, to March, 1976, were recorded on Jeebs' books as being made on behalf of ISLI rather than Hadar. (H. Klein, 37 Tr. 3451, 38 Tr. 3560-61) ISLI sent Telecasting invoices for the ISLI leases right through July, 1976. (7/1/76 ISLI Invoice No. 50353, FNBB Ex. 216; Raible, 10 Tr. 873, 875-76) On May 6, 1976, Mr. Dorfner testified in the action for appointment of a receiver brought by FNBB in Toledo that Telecasting leased its equipment from ISLI. (Dorfner Toledo Testimony, 57 Tr. 5901-02) Telecasting's board of directors (Mr. and Mrs. Overmyer, Mr. and Mrs. Strang, Mr. Dorfner and Mr. Raible) did not authorize Telecasting to enter into leases with Hadar until August 9, 1976, even assuming that the minutes are accurately dated. (8/9/76 Telecasting Minutes, FNBB Ex. 29, pp. 1-2) Hadar did not open a bank account until August 30, 1976 (List of Officers and Directors, FNBB Ex. 8, p. 2; Raible, 9 Tr. 803; 8 Tr. 745-46), six days after the Telecasting XI was filed (Petition, FNBB Ex. 431, p. 2). Telecasting made its first payment to Hadar ($11,000.00) on August 31, 1976. (Hadar Cash Receipts and Cash Disbursements Register, Pl. Ex. 113, p. 3) The pricing of lease ML-2 was not determined until September, 1976. (Raible, *853 10 Tr. 887-89; 9/16/76 Letter, FNBB Ex. 11) Mr. Dorfner expressed displeasure at that time because the proposed new Hadar lease price was greater than the ISLI price. (Raible, 10 Tr. 889) The assignment of the ISLI leases to Hadar was made sometime after the Telecasting XI was filed. The Overmyer organization created numerous back dated documents to make it appear otherwise.\n16.5. The Assignment Was A Fraud On ISLI Creditors. As of the end of 1975, ISLI still had unpaid creditors with regard to some of the Telecasting equipment. (Raible, 12 Tr. 1135) Mr. Overmyer directed that the ISLI leases and equipment be transferred from ISLI to Hadar, but he never instructed that the unpaid obligations of ISLI should also be assigned to Hadar. (Raible, 12 Tr. 1135, 1138-1139) Hadar never paid ISLI for the assignment. (Raible, 12 Tr. 1137) Rather, money that Hadar obtained during 1976 was paid over to Jeebs. (Raible, 12 Tr. 1138) All of these transactions, the assignment, the nonpayment by Hadar to ISLI and the payment by Hadar to Jeebs instead, were directed by Mr. Overmyer. (Raible, 12 Tr. 1138) In order to conceal the assignment to Hadar, Mr. Overmyer continued to send ISLI checks to vendors of equipment covered by the ISLI leases after September, 1976. (7/10/79 Memo and 6/29/79 Letter, Raible Ex. 771, p. 3; Raible, 9 Tr. 802, 12 Tr. 1136-37) As a result of not having funds, ISLI could not pay its creditors and those creditors remain unpaid to date. (Raible, 12 Tr. 1139)\n16.6. Telecasting's Obligations and ISLI's Cost For the 30 Assigned Leases Through December 31, 1975. Through January 1, 1976, Telecasting had total lease obligations to ISLI from the 30 leases of $1,773,446. (H. Klein, 28 Tr. 2753; Summary of Lease H-1002, FNBB Ex. 101, p. 3) The $1,773,446 was computed from the lease files that were maintained at the station. (H. Klein, 28 Tr. 2752-53, 2770-86; Summary of Lease H-1002, FNBB Ex. 101) The total cost of the equipment was $1,321,201. (H. Klein, 28 Tr. 2753; Summary of Lease H-1002, FNBB Ex. 101, p. 3)\n16.7. Comparison Between ISLI Leases and Hadar Leases. Telecasting was being invoiced by ISLI for $13,534.56 per month as of December, 1975. (See Finding No. 13.4, supra) Hadar charged Telecasting $16,790.40 per month, beginning January, 1976, for the same equipment. (H. Klein, 29 Tr. 2806; Raible, 10 Tr. 889) ISLI had a renewal and purchase option policy for its leases. (11/73 Memo, FNBB Ex. 10) Hadar does not have a renewal or purchase option policy. (Raible, 8 Tr. 686-87, 695; Connery, 20 Tr. 1938)\n16.8. Renewal of Lease ML-2. Lease ML-2 between Hadar and Telecasting expired on December 31, 1978. (Lease ML-2, Pl. Ex. 48B) Title did not pass to Telecasting at that time. (H. Klein, 29 Tr. 2812-13) Because lease ML-2 had no provision for a purchase option or renewal policy, a new lease was written and labeled \"Lease H-1002.\" (H. Klein, 29 Tr. 2813) Lease H-1002 covered the same equipment as lease ML-2 for an additional ten-year period at the same rate as lease ML-2, $16,790.40 per month. (H. Klein, 29 Tr. 2813; Lease H-1002, Pl. Ex. 2)\n16.9. Telecasting Obligations Through January 31, 1981, for the 30 Assigned Leases. Telecasting has been invoiced by ISLI and Hadar for the equipment relating to the 30 leases since 1966. (Summary of Lease H-1002, FNBB Ex. 101) ISLI charged Telecasting $1,773,446 on the 30 leases through December 31, 1975. (H. Klein, 29 Tr. 2818; Summary of Lease H-1002, FNBB Ex. 101) Hadar charged Telecasting another $1,024,214 on leases ML-2 and H-1002 through January 31, 1981. (H. Klein, 29 Tr. 2818; Summary of Lease H-1002, FNBB Ex. 101) In total, Telecasting was charged $2,797,660 by ISLI and Hadar for equipment relating to the 30 assigned leases for the period 1966 through January 31, 1981. (H. Klein, 29 Tr. 2818; Summary of Lease H-1002, FNBB Ex. 101)\n16.10. Future Charges Relating to H-1002. Lease H-1002 runs through December 31, 1988. (Lease H-1002, Pl. Ex. 2) Additional lease charges for the period February *854 1, 1981, to December 31, 1988, for which Telecasting is purportedly obligated to Hadar, total $1,595,088. (H. Klein, 29 Tr. 2819-20; Summary of Lease H-1002, FNBB Ex. 101) Total charges that Telecasting will have paid to ISLI and Hadar for the period 1966 through 1988 will be $4,392,748. (H. Klein, 29 Tr. 2820; Summary of Lease H-1002, FNBB Ex. 101) Over a 24-year period Telecasting will have paid $4,392,748 for equipment that had an original cost of $1,321,201, and at the end of lease H-1002 on December 31, 1988, the equipment will still belong to Hadar. (H. Klein, 29 Tr. 2820-21)\n\n17. The Hadar Lease Fraud in General\n\n17.1. Form and Terms of the Hadar Leases. The Hadar lease form was designed by Mr. Connery. (Connery, 20 Tr. 1934-36, 1870) The Hadar leases place all responsibilities on the lessee for maintenance, repair, upkeep, payment of insurance premiums and all other burdens of use of the equipment covered by the leases. (Connery, 20 Tr. 1936; Raible, 4 Tr. 331) The Hadar lease form provides, among other provisions, that: (i) Hadar warrants nothing (\u0e16 4, Pl. Ex. 2); (ii) claims for defects or unsatisfactory equipment must be made only against supplier (\u0e16 6, Pl. Ex. 2); (iii) lessee indemnifies Hadar for all claims arising out of Hadar's ownership, selection and leasing of equipment (\u0e16\u0e16% 3 and 10, Pl. Ex. 2); (iv) if there is any defect in the equipment, lessee may claim against the vendor but must continue to pay rent to Hadar (\u0e16 6, Pl. Ex. 2); (v) lessee must pay for insurance payable to Hadar (\u0e16 11, Pl. Ex. 2; Raible, 6 Tr. 528); and (vi) for any default Hadar may take possession of the equipment and thereby terminate all lessee's rights (\u0e16 16, Pl. Ex. 2). Mr. Raible, the executive vice-president of Hadar, did not need to refer to all the terms and conditions of the Hadar lease, since Telecasting undertook all burdens under the Hadar leases and that was the manner in which Hadar did business with Telecasting. (Raible, 4 Tr. 334)\n17.2. The 20 Percent Deposit. Hadar charged a deposit, generally 20 percent, on most of its leases to Telecasting. (Raible, 2 Tr. 199-200; H. Klein, 29 Tr. 2811) The Overmyer organization calculated the amount of deposits, exclusive of the Hundred East leases, as $188,077.19. (3/16/81 Memo, Raible Ex. 802) These deposits were made by Hadar into its regular bank account, rather than being segregated in a separate account. (Raible Dep., FNBB Ex. 259A, p. 352, 529) Hadar does not have any of the money left. (Raible Dep., FNBB Ex. 259A, p. 352)\n17.3. The Two Percent Commitment Fee. Hadar charged Telecasting a standard two percent commitment fee. (Raible Dep., FNBB Ex. 259A, pp. 353-54) Mr. Overmyer, chairman of the board of Telecasting (3/10/81 Telecasting Schedules, Tele Ex. 17, p. 11), instructed Mr. Raible to charge the two percent commitment fee. (Raible Dep., FNBB Ex. 259A, p. 355) Mr. Raible, executive vice-president of Hadar (Raible, 4 Tr. 328), did not know at the time of his deposition what the commitment fee was for. (Raible Dep., FNBB Ex. 259A, p. 354)\n17.4. No Rental Reduction or Purchase Option. None of the Hadar leases provided for reduced rentals for renewal terms or for an option to purchase the equipment at the conclusion of the initial term of the lease. (Connery, 20 Tr. 1938) At the close of the initial lease term, it is Hadar's regular practice to renew the lease at the same monthly payment as before. (Raible, 8 Tr. 695) It is unusual for renewal terms under a lease to be at the same rental amount. (Bond, 14 Tr. 1306) Hadar never entered into a lease with Telecasting under which title to the property covered by the lease passed to Telecasting at the end of the lease. (Raible, 8 Tr. 686-87) It is common to have a purchase option at the end of the lease term when the original cost of the equipment is recovered within the initial term of a lease. (Bond, 14 Tr. 1306-07) Hadar once contemplated renewal and purchase options, but never implemented them. (See 4/28/77 Unsigned Letter Raible to Dorfner, FNBB Ex. 391; 10/9/77 Hadar Letter and Schedule of Telecasting Lease Obligations, FNBB Ex. 31)\n*855 17.5. Numbering of Hadar Leases. Hadar numbers leases consecutively starting with H-1001 and adds the designation \"A\" to the number to indicate a renewal. (Raible, 4 Tr. 297, 2 Tr. 126) For unexplained reasons, leases H-1003, H-1018, H-1019, H-1020, H-1021, H-1022, H-1023, H-1024, H-1025, H-1026, H-1027, H-1043, H-1044, H-1045 and H-1046 are all out of chronological order. (Leases, Pl. Exs. 2-46, Tele Exs. 5-10, D. Overmyer Ex. 2)\n17.6. Person to Contact: William Schock, President. Hadar leases H-1004A, H-1005A, H-1006A, H-1008A, H-1009A, H-1010A, H-1011A, H-1012A, H-1013A, H-1018A, H-1032A, H-1044, H-1045, H-1047, H-1048, H-1049 and H-1050, all of which are dated prior to February 6, 1981, describe the person to contact as William Schock, President. (Leases, Pl. Exs. 4-6, 8-13, 18, 27, 39-46) Mr. Schock did not become president of Telecasting until February 6, 1981. (2/6/81 Telecasting Minutes, Tele Ex. 29)\n17.7. Negotiation and Execution of Leases. Telecasting personnel determined the need for equipment, prepared specifications, sought out manufacturers of equipment it desired and often obtained quotes for such equipment. (Raible, 4 Tr. 334-35, 6 Tr. 523) The Hadar leases are typed by Mr. Raible's secretary, reviewed by Mr. Raible as an officer of Hadar and then hand-carried within the same suite of offices at 3 Park Avenue to Mr. Chi for execution on behalf of Telecasting. (Raible 4, Tr. 374-75, 2 Tr. 195-96, 5 Tr. 454-55) Hadar retained all four copies of each lease. (Raible, 8 Tr. 669-72; Leases, Pl. Exs. 2-46) No copy of the lease was provided to personnel at the television station in Toledo. (Raible, 2 Tr. 195-96, 8 Tr. 669-72)\n17.8. Discrepancies in Signatures. Mr. Chi signed the following leases after the lease period had begun: H-1004, H-1004A, H-1005, H-1005A, H-1010, H-1011, H-1012, H-1014, H-1047, H-1048 and H-1049. (Leases, Pl. Exs. 4, 5, 10-12, 14, 43-45) He did not know why he signed leases after the lease date. (Chi Dep., FNBB Ex. 243, pp. 31, 32, 37) Mr. Chi also signed leases H-1003, H-1004, H-1005, H-1010, H-1011 and H-1012 which are dated prior to March 20, 1978, when he became assistant treasurer of Telecasting, although he did note on all except H-1003 that he signed it on April 7, 1978. (Compare Leases, Pl. Exs. 3-5, 10-12; with 3/20/78 Telecasting Minutes, Tele Ex. 29) Lease H-1019 was never signed at all by either Hadar or Telecasting. (Lease H-1019, Pl. Ex. 19)\n17.9. Lack of Investigation of Leases by Telecasting. Mr. Chi testified that he signed the leases between Telecasting and Hadar on behalf of Telecasting as a convenience, because he was the only Telecasting employee working in New York. (Chi Dep., FNBB Ex. 243, p. 14) He made no investigation as to the propriety of the leases prior to signing. (Chi Dep., FNBB Ex. 243, pp. 14-17) Mr. Chi did not check with the station personnel prior to signing the leases to ensure that the equipment was at the station. (Chi Dep., FNBB Ex. 243, pp. 21, 22, 33, 34, 35, 36, 38, 41, 42) He relied on Mr. Raible to establish the proper price on the leases. (Chi Dep., FNBB Ex. 243, p. 68) The following leases were signed by Mr. Chi as a representative of Telecasting: H-1002, H-1003, H-1004, H-1004A, H-1005, H-1005A, H-1006, H-1006A, H-1007, H-1008, H-1008A, H-1009, H-1009A, H-1010, H-1010A, H-1011, H-1011A, H-1012, H-1012A, H-1013, H-1013A, H-1014, H-1015, H-1016, H-1017, H-1018, H-1020, H-1027, H-1028, H-1029, H-1030, H-1031, H-1032, H-1032A, H-1033, H-1034, H-1035, H-1036, H-1037, H-1038, H-1039, H-1040, H-1041, H-1042, H-1043, H-1044, H-1045, H-1047, H-1048, H-1049, H-1050. (Leases, Pl. Exs. 2-46) Mr. Chi signed two versions of lease H-1044: one with a monthly rental of $50,492.88, and the other at \"not less than\" $31,557.53. (Leases, Pl. Exs. 39, 40) He signed three versions of lease H-1045: one with a monthly rental of \"not less than\" $5,781.13, one at $9,249.97 and one at \"not less than\" $5,413.63. (Leases, Pl. Exs. 41, 42, D. Overmyer Ex. 2)\n17.10. Leases Starting Before the Equipment Became Operational. The following leases had inception dates before Telecasting began using the equipment:\n*856 Lease H-1015 began in May, 1978, but the equipment was not delivered and installed until October, 1978, and April, 1979. (Lease H-1015, Pl. Ex. 15; H. Klein, 30 Tr. 2894-95)\nLease H-1020 began in May, 1977, but the lease between Design Space and Hadar for the same equipment did not begin until March, 1978. (Summary of Leases, FNBB Ex. 142)\nLease H-1043 began in December, 1979, but the lease between Hadar and Hundred East did not begin until May, 1980. (Summary of Leases, FNBB Ex. 142)\nLeases H-1044 and H-1045 were first invoiced by Hadar to Telecasting in January, 1981. (1/1/81, 2/1/81 and 3/1/81 Invoices, Pl. Ex. 101) A significant amount of the equipment had not been installed as of January 1, 1982. (H. Klein, 32 Tr. 3052-53)\nLease H-1050 began in June, 1980, but the lease between Hadar and Motorola did not begin until November, 1980. (H. Klein, 32 Tr. 3068-69)\n17.11. Hadar's Delinquency In Paying Vendors. Hadar was consistently delinquent in paying its obligations during 1977-1980. (Raible, 8 Tr. 711; 5/23/78, 5/31/78 and 1/25/79 Memos, Raible Exs. 413, 417, 436) Mr. Overmyer's approval was required prior to paying any obligation. (Raible, 6 Tr. 547-48, 568-69, 8 Tr. 711, 9 Tr. 837) The following vendors obtained legal or collection agency assistance in order to collect the amount that Hadar owed them (H. Klein, 30 Tr. 2914):\nLease H-1002 \u0e42\u0080\u0094 General Electric (G.E. Settlement Agreement, Pl. Ex. 123)\nLease H-1010 \u0e42\u0080\u0094 Jamieson (Legal Letters from Ray Andersen, Shield, Trotti and Hemphill, Raible Exs. 633, 634, 636, 637)\nLease H-1013, H-1032, H-1041 \u0e42\u0080\u0094 General Television Network (Legal Letter from Spangler, Nathanson, Heyman, McCarthy & Durfee, Raible Ex. 660)\nLease H-1015 \u0e42\u0080\u0094 Barry Equipment Co. (Legal Letter from Singler & Christenson, Raible Ex. 681)\nLease H-1017 \u0e42\u0080\u0094 A.G.A. Corporation (Collection Letter No. 3, Raible Ex. 687)\nLease H-1019 \u0e42\u0080\u0094 Hood Electrical Contractors\nLease H-1034 \u0e42\u0080\u0094 Tiffin Scenic Studios (Summons, Raible Ex. 717)\nLease H-1036 \u0e42\u0080\u0094 Q-TV (Legal Letters from Abberley, Kooiman, Marcellino & Clay, Raible Dep. Exs. 725, 729; Collection Letters from Dunn & Bradstreet, Inc., Raible Exs. 728, 730)\nLease H-1038 \u0e42\u0080\u0094 Toledo Sash Co. (Legal Letter from Wilkowski, Bloom and Simko, Raible Ex. 733)\nLease H-1039 \u0e42\u0080\u0094 City Loan Business Service Co. (Legal Letter from John P. Evans, Raible Ex. 737)\n17.12. Unpaid Vendors. The following creditors' claims that relate to equipment purchased by Hadar and leased to Telecasting are included by Hadar on its amended schedules:\n\n\nLease No. Vendor Schedule Page Line\nH-1002 RCA A-3 2 22\nH-1002 GE A-3 1 8\nH-1002 GE A-2 1 3\nH-1004-A Pitney Bowes A-3 2 18\nH-1005-A G.T.N. A-2 1 4\nH-1006-A Lipsner Smith A-2 1 7\nH-1007 IBM A-3 1 11\nH-1008-A Design Space A-3 2 25\nH-1010-A Jamieson Film A-3 1 13\nH-1013-A G.T.N. A-2 1 4\nH-1015 Barry Equipment A-2 1 1\nH-1018-A G.T.N. A-2 1 4\nH-1019 Hood Electrical A-3 1 10\nH-1020 Space Rental A-3 2 25\nH-1021 Ohio Citizens A-2 1 9\nH-1032 G.T.N. A-2 1 4\nH-1037 Philips Appliance A-3 2 19\nH-1040 Station Business\n Systems A-3 2 26\nH-1041 G.T.N. A-2 1 4\nH-1043 Hundred East A-2 1 5\nH-1044 Hundred East A-2 1 6\nH-1045 Hundred East A-2 1 6\nH-1050 Motorola A-2 1 8\n\n(Amended Schedules, FNBB Ex. 177; H. Klein, 31 Tr. 2982-3020, 32 Tr. 3026-89)\n17.13. The Overmyer Formula. Hadar used a standard formula in computing the lease terms with Telecasting. (Raible, 2 Tr. 199; Raible Dep., FNBB Ex. 259A, pp. 349-52) The formula is as follows: Hadar's purchase price was multiplied by 100 percent plus 20 percent times the number of *857 years the lease was to run; 20 percent of the resultant amount was charged as a deposit; and the remainder was divided into equal monthly payments over the term of the lease. (Raible, 2 Tr. 199-200; H. Klein, 29 Tr. 2811) This formula was derived by Mr. Overmyer and has been denoted the \"Overmyer Formula.\" (Raible, 10 Tr. 970-72) Leases with Telecasting that conformed to the Overmyer Formula are H-1003, H-1004, H-1005, H-1006, H-1011, H-1012, H-1013, H-1014, H-1017, H-1018, H-1027, H-1028, H-1029, H-1030, H-1031, H-1032, H-1034, H-1035, H-1036, H-1037, H-1038, H-1039, H-1043, H-1047, H-1048, H-1049 and H-1050. (Summary of Leases, FNBB Ex. 142) Leases that applied the mathematical calculations of the Overmyer Formula, but used the incorrect cost or deposit, or some other variation, in deriving the monthly rental payments are H-1008, H-1010, H-1019, H-1020, H-1033, H-1040, H-1041, H-1044 and H-1045. (Summary of Equipment Leases, FNBB Ex. 142; H. Klein, 32 Tr. 3047-50, 3055-56) Only five leases, H-1002, H-1007, H-1009, H-1015 and H-1021, did not apply the Overmyer Formula or a variation of the Overmyer Formula. (Summary of Equipment Leases, FNBB Ex. 142) Mr. Bond, Hadar's witness, in his experience in the leasing of equipment, had never heard of a formula such as the Overmyer Formula being used to calculate rents. (Bond, 14 Tr. 1335-36) When the Overmyer Formula is applied to a three-year lease with a cash purchase price actually paid by Hadar, Hadar obtains a 47 percent rate of return. (H. Klein, 29 Tr. 2835; Bond, 14 Tr. 1336-40)\n17.14. Leases of Financed Equipment. In many instances, Hadar did not pay cash for equipment that it leased to Telecasting, but obtained financing from vendors. (H. Klein, 29 Tr. 2849) Only 2.7 percent of the cost of equipment that Hadar leased to Telecasting consisted of cash payments, whereas 97.3 percent of the equipment was obtained by Hadar over time through financing arrangements. (H. Klein, 29 Tr. 2849) The largest equipment acquired by Hadar for cash was lease H-1012 for $28,368. (H. Klein, 29 Tr. 2853) All other significant equipment that Hadar obtained for use by Telecasting was acquired by financing arrangements. (H. Klein, 29 Tr. 2849; Summary of Leases, FNBB Ex. 142) When Hadar applied the Overmyer Formula to equipment that it obtained through financing arrangements, it used the fully loaded cost (the cost of equipment plus financing charge) in calculating the monthly rental charge to Telecasting. (Raible, 8 Tr. 688; H. Klein, 29 Tr. 2847-48) When the fully loaded cost is used in the Overmyer Formula instead of the original equipment cost, it results in Telecasting paying a higher rental to Hadar. (H. Klein, 29 Tr. 2845-46) When the fully loaded cost was used by Hadar, Telecasting's monthly payment to Hadar usually exceeded Hadar's monthly payment to the vendor. (Summary of Leases, FNBB Ex. 142) Under such circumstances, Hadar's rate of return is infinite. (H. Klein, 30 Tr. 2897-98)\n17.15. Leases for Petty Amounts. The following 21 leases were written by Hadar for equipment that had a cost of less than $5,000:\n\n\n Lease No. Cost\n H-1003 $3,954\n H-1004 $1,954\n H-1007 $3,987\n H-1009 $4,298\n H-1011 $4,289\n H-1014 $4,515\n H-1017 $4,000\n H-1018 $2,450\n H-1027 $4,701\n H-1028 $2,173\n H-1029 $1,760\n H-1030 $ 550\n H-1031 $1,072\n H-1034 $2,809\n H-1035 $4,921\n H-1037 $ 374\n H-1038 $1,770\n H-1042 $2,794\n H-1047 $ 236\n H-1048 $1,600\n H-1049 $ 395\n\n(Summary of Leases, FNBB Ex. 142) Telecasting could have purchased all of this equipment; there was no advantage to leasing *858 it from Hadar. (Raible, 8 Tr. 704-06) Mr. Overmyer was responsible for Telecasting leasing rather than purchasing such equipment. (Raible, 9 Tr. 795-96)\n17.16. No Recourse for Defective Equipment. Hadar leased to Telecasting a computer system that Hadar leased from Station Business Systems. (Lease H-1040, Pl. Ex. 35; H. Klein, 31 Tr. 2923) The computer system was a disaster. (Meissner Dep., FNBB Ex. 232, pp. 16-17) The system never got close enough to completion even to attempt a conversion. (Meissner Dep., FNBB Ex. 232, pp. 16-17) Station Business Systems acknowledged that the computer system would not perform as promised, and the lease between Hadar and Station Business Systems was cancelled in January, 1980. (H. Klein, 31 Tr. 2933; 1/31/80 Letter, FNBB Ex. 160) Station Business Systems allowed Hadar to keep the system free of charge until May 1, 1980, to allow for a smooth transition. (H. Klein, 31 Tr. 2933) Hadar continued to invoice Telecasting for the computer system through August, 1980, although the system was removed in May, 1980. (H. Klein, 31 Tr. 2943) Hadar issued a credit to Telecasting in August, 1980, but only for payments made by Telecasting subsequent to May 1, 1980. (H. Klein, 31 Tr. 2943-44) Hadar's obligation to Station Business Systems was terminated effective January 31, 1980, but Telecasting was required to keep paying Hadar for the defective equipment through May 1, 1980. (H. Klein, 31 Tr. 2944)\n17.17. Unused and Unusable Equipment Covered by Lease H-1002. Much of the equipment covered by Hadar lease H-1002 has been replaced by equipment covered by the Hundred East transactions and major new equipment purchases made since March 25, 1981. (Bowe, 40 Tr. 3821-29; List of New Equipment, Tele Ex. 25) No credit was given to Telecasting for equipment covered by lease H-1002 which was replaced by new purchases of equipment. (Bowe, 40 Tr. 2923) The following table summarizes the status of equipment covered by lease H-1002 that is in storage, missing, replaced, discarded, sold or otherwise not in use. The references are to the former ISLI leases.\n\n\n Lease No. and\n FNBB Exhibit Description of Equipment Status of Equipment\n 0910730 ABTO Film Camera In storage (Bowe,\n (FNBB ex. 110) 39 Tr. 3729)\n 1108010 Microwave Equipment In storage (Bowe,\n (FNBB Exs. 39 Tr. 3749)\n 122-123)\n 1317010 Two calculators and one adding machine In storage (Bowe,\n (FNBB Ex. 126) 39 Tr. 3752)\n 1828010 Microwave antenna and related equipment In storage (Bowe,\n (FNBB Ex. 127) 39 Tr. 3753)\n 1105011 Video switcher In storage (Bowe,\n (FNBB Ex. 107) 39 Tr. 3726)\n 1104010 RCA equipment In storage (Bowe,\n (FNBB Exs. 39 Tr. 3737)\n 115, 116)\n 1084010 Most of the GE 30 kilowatt transmitter In storage (Bowe,\n (FNBB Exs. and related equipment 39 Tr. 3733)\n 112, 113 and\n 114)\n 1084020 GE antenna, transmission line, etc. In storage (Bowe,\n (FNBB Exs. 39 Tr. 3751)\n 124-125)\n 112973 Conversion of equipment to ABTO In storage (Bowe,\n (FNBB Ex. 140) system 39 Tr. 3768)\n*859\n 1107010 Three oscilloscopes In storage (Bowe,\n (FNBB Exs. 39 Tr. 3747)\n 120, 121)\n 0717700 One visual sync generator Missing (Bowe, 39\n (FNBB Ex. 105) Tr. 3722)\n 1317010 One adding machine Missing (Bowe, 39\n (FNBB Ex. 126) Tr. 3752)\n 119690 IBM typewriter Missing (Bowe, 39\n (FNBB Ex. 130) Tr. 3756)\n 1120690 IBM typewriter Missing (Bowe, 39\n (FNBB Ex. 131) Tr. 3757)\n 0517710 IBM Model C typewriter Missing (Bowe, 39\n (FNBB Ex. 139) Tr. 3767)\n 119710 Olivetti calculator Missing (Bowe, 39\n (FNBB Ex. 109) Tr. 3728)\n 1029700 Most of the audio divide pads Replaced (Bowe, 39\n (FNBB Ex. 137) Tr. 3764)\n 114020 RCA color monitor Not being used\n (FNBB Ex. 117) (Bowe, 39 Tr. 3742)\n 0401700 Partitions Discarded (Bowe, 39\n (FNBB Ex. 133) Tr. 3759)\n 1026700 Swivel chair Discarded (Bowe, 39\n (FNBB Ex. 136) Tr. 3764)\n 1827011 Two B & W studio cameras Sold (Bowe, 39 Tr.\n (FNBB Ex. 108) 3727)\n 1105011 Cameras and associated equipment Sold (Bowe, 39 Tr.\n (FNBB Ex. 107) (cables and tripods) 3726)\n 1084020 Antenna Sold, with proceeds\n (FNBB Exs. to Hadar (Bowe, 39\n 124, 125) Tr. 3751)\n 1104010 TR5 recorder Sold (Bowe, 39 Tr.\n (FNBB Exs. 3740)\n 115, 116)\n 0403700 Office equipment Difficult to\n (FNBB Ex. 134) determine status as\n no identifying\n marks are found\n (Bowe, 39 Tr. 3760)\n 1106010 Microwave equipment Stayed at former\n (FNBB Exs. location (Bowe, 39\n 118, 119) Tr. 3743\n 1104010 RCA equipment Is being stored or\n (FNBB Exs. was replaced (Bowe,\n 115, 116) 39 Tr. 3737)\n 1107010 Probes In storage for last\n (FNBB Exs. two years (Bowe,\n 120, 121) 39 Tr. 3747-48)\n\n*860 17.18. Obsolete, Unused and Unusable Equipment Covered by Other Hadar Leases. The following table summarizes the status of equipment covered by Hadar leases, other than lease H-1002, that is obsolete, missing, inoperative, in storage or otherwise not in use.\n\n\n Hadar Lease No. Description of Equipment Status of Equipment\n H-1003 Office equipment, microwave oven and Not at station\n (Pl. Ex. 3) coffee maker (Bowe, 40 Tr.\n 3781-82)\n H-1004 Postage meter Not at studio\n (Pl. Ex. 4) (Bowe, 40 Tr. 3783)\n H-1006 Film cleaning and conditioning unit In storage since\n (Pl. Ex. 6) 1981 (Bowe, 40 Tr.\n 3785-86; Photo of\n stored equipment,\n Tele Ex. 36)\n H-1007 Five IBM typewriters Not being used -\n (Pl. Ex. 7) location unknown\n (Bowe, 40 Tr. 3788)\n H-1008 Mobile office trailer Last used by\n (Pl. Ex. 8) Telecasting in\n Fall, 1980 (Bowe,\n 40 Tr. 3789)\n H-1009 Office equipment: five calculators; six Three calculators,\n (Pl. Ex. 9) metal bookcases; fire fighter file one bookcase, fire\n cabinet; six file cabinets and two typewriters fighter file\n cabinet, all six\n file cabinets being\n used; remainder\n being stored or\n location unknown\n (Bowe, 40 Tr. 3790)\n H-1010 Jamieson Model 23 film processor and Not being used\n (Pl. Ex. 10) desitometer (Bowe, 40 Tr. 3791-92;\n Photo of stored\n equipment Tele Ex.\n 37)\n H-1012 Film camera and related equipment In storage and not\n (Pl. Ex. 12) in use (Bowe, 40\n Tr. 3795)\n H-1013 ENG equipment and test equipment Panasonic recorders\n (Pl. Ex. 13) not in existence;\n rest in storage\n (Bowe, 40 Tr. 3797)\n H-1019 Temporary emergency generator Not in use (Bowe,\n (Pl. Ex. 19) 40 Tr. 3802-03)\n H-1020 New mobile office trailer Last one used in\n (Pl. Ex. 20) Fall, 1980.\n Telecasting does\n not have mobile\n office trailer any\n longer (Bowe, 40\n Tr. 3803)\n*861\n H-1021 Four AMC automobiles (2 jeeps and Located in the\n (Pl. Ex. 21) 2 Matador station wagons) studio parking lot;\n replacements have\n been purchased\n (Bowe, 40 Tr.\n 3803-04; List of\n new equipment,\n Tele Ex. 25)\n H-1027 18,000 watt standby generator Not in use. Sold\n (Pl. Ex. 22) to Raceway Park,\n with Hadar\n receiving proceeds\n when new generator\n was installed.\n (Bowe, 40 Tr.\n 3804-05)\n H-1029 Lighting equipment and lamps Lamps not in use\n (Pl. Ex. 24) since they have\n life expectancy of\n 300 hours (Bowe, 40\n Tr. 3806)\n H-1031 Flow meters and plumbing devices used Not in use (Bowe,\n (Pl. Ex. 26) in connection with heat exchanger at 40 Tr. 3807-08)\n Telecasting\n H-1032-A \u0e1e video equipment, recorders, editors, Not used. Wrong\n (Pl. Ex. 27) test equipment console equipment purchased\n by Hadar (Bowe, 40\n Tr. 3809)\n H-1033 Miscellaneous parts for GE transmitter, Would not rent\n (Pl. Ex. 28) switches, relay meters, plugs and resistors replacement parts\n totaling 50-60 items if given a free\n choice (Bowe, 40\n Tr. 3810)\n H-1039 Sharp 810 plain paper copier Not being used.\n (Pl. Ex. 34) Does not know the\n location of the\n copier and it has\n not been used at\n the station since\n sometime prior to\n January, 1981.\n (Bowe, 40 Tr. 3814)\n H-1040 Computer system No longer in\n (Pl. Ex. 35) existence.\n Replaced. (Bowe,\n 40 Tr. 3815)\n H-1041 JVC color camera, JVC recorder and Camera used only as\n (Pl. Ex. 36) associated equipment, including battery back-up; recorder\n kit good only for\n parts; battery kit\n not in existence\n as life of kit is\n at best two years\n (Bowe, 40 Tr. 3816)\n*862\n H-1042 Two RCA UHF isolators two RCA Equipment never\n (Pl. Ex. 37) oscillators used because a\n necessary exciter\n was never\n purchased. Being\n stored. (Bowe, 40\n Tr. 3817)\n H-1047 A B & K multimeter Not in use,\n (Pl. Ex. 43) replaced by newer\n equipment. (Bowe,\n 40 Tr. 3818)\n H-1049 Two chairs Could not locate\n (Pl. Ex. 45) (Bowe, 40 Tr. 3820)\n\nMr. Bond, Hadar's witness, confirmed that many of the items covered by the purported leases could not be located at the television station (Bond, 13 Tr. 1183, 1193, 1194, 1197-99, 1207-10), although Bond made an item-by-item examination at the station and was assisted by the cooperation of station personnel (Bond, 13 Tr. 1153, 14 Tr. 1289-90).\n17.19. Catch-Up Invoicing. Hadar did not always invoice Telecasting for leases on a timely basis. (6/1/80, 7/1/80 Hadar Invoices, Pl. Ex. 101; 4/6/78 Letter, FNBB Ex. 4; 8/31/79 Hadar Invoice, FNBB Ex. 156; H. Klein, 29 Tr. 2823, 2829-30) Leases not invoiced on a timely basis were leases H-1003, H-1004A, H-1005A, H-1006A, H-1015, H-1019, H-1047, H-1048 and H-1049. (H. Klein, 29 Tr. 2829-30) In the case of each of these leases, Hadar omitted to invoice Telecasting for a period of months, and then invoiced Telecasting for the omitted months on a catch-up invoice. (H. Klein, 29 Tr. 2829-30) In some instances, the catch-up invoice was for more than the original cost of the leased equipment, indicating that Telecasting was able to make payments in excess of the equipment cost, and financing by a lease was not necessary. (H. Klein, 29 Tr. 2830)\n17.20. Back Dated Hadar Invoices. Hadar's invoices to Telecasting for leases H-1001 and H-1002 for January, February, March, April and May, 1977, are on Hadar, 3 Park Avenue letterhead. (1/1/77, 1/18/77, 2/1/77, 2/18/77, 3/1/77, 3/18/77, 4/1/77, 4/18/77, 5/1/77 and 5/18/77 Invoices, FNBB Ex. 101) Hadar's name was not changed from D.H. Overmyer Trucking Co. to Hadar Leasing International Company until May 5, 1977. (5/6/77 Hadar Minutes, Raible Ex. 134) Moreover, Hadar did not move into the 3 Park Avenue office until May 28, 1977. (5/24/77 Letter, Raible Ex. 389) The invoices on Hadar, 3 Park Avenue letterhead bearing dates prior to the name and address changes were created subsequent to those changes and back dated. (Raible, 9 Tr. 847-48)\n17.21. Duplicate Invoices. Two different sets of Hadar invoices have turned up: one from Hadar's files and the other from Telecasting's files. (H. Klein, 30 Tr. 2900) The invoices differ in the following ways:\n(1) There were two invoices dated October 1, 1977, for lease H-1011. The total amount invoiced per Telecasting's record was $7,309.00, as compared with $1,571.61 per Hadar's records.\n(2) There are two different invoices typed for leases H-1004 through H-1013, dated February 1, 1978.\n(3) An invoice dated May 1, 1978 for $11,059.78, relating to lease H-1016, was found in Telecasting's records, but not in Hadar's records.\n(4) An invoice dated May 1, 1978, for $399.94, relating to lease H-1020, was located in Telecasting's files, but not in Hadar's files.\n(5) Invoices dated May 1, 1978, June 1, 1978 and July 1, 1978, relating to the \"month-to-month\" adjustment per letter of April 6, 1978, are typed differently in Hadar's records than in Telecasting's records.\n(6) An invoice dated August 31, 1979, billing Telecasting for 16 months on lease H-1015 and 12 months on the \"month-to-month\" adjustment, and giving Telecasting *863 credit for four months and 21 days on lease H-1019, was found in Telecasting's files, but not in Hadar's files.\n(7) Invoices dated August 1, 1978, through August 1, 1979, relating to the \"month-to-month\" adjustment were not located in Telecasting's files.\n(8) Adjustment invoices dated September 1, 1979, October 1, 1979, and November 1, 1979, for $5,171.50, relating to leases H-1015, H-1019 and the \"month-to-month\" adjustment were found in Telecasting's files, but not in Hadar's files.\n(9) An invoice dated May 28, 1980, for a Camera Mart rental was not in Telecasting's records.\n(10) An invoice dated September 1, 1980, for installation charges was not in Telecasting's files.\n(11) Invoices dated January 1, 1981, February 1, 1981, and March 1, 1981, for $52,250, which relate to the Hundred East equipment, differ as to lease numbers. Telecasting's copies of the invoices give the lease numbers as H-1044 and H-1045. Hadar's copies of the invoices also list lease H-1043. (H. Klein, 30 Tr. 2895, 2900-08; Summary of Differences in Invoices, FNBB Ex. 156)\n17.22. Ohio Sales Taxes. Hadar collected Ohio sales tax with respect to the leases between Hadar and Telecasting, but failed to file tax returns or pay over to the State of Ohio the taxes it collected. (Connery, 21 Tr. 2009) Nothing was done by Hadar to credit Telecasting with the amounts of sales taxes paid by Telecasting to Hadar and then illegally detained by Hadar. (Connery, 21 Tr. 2010)\n17.23. Hadar's Use of Telecasting's Credit. Hadar furnished Telecasting's financial statements to vendors upon request. (Raible, 8 Tr. 708-09) The following vendors received copies of Telecasting financial statements in connection with providing financing to Hadar: RCA, General Television Network, Camera Mart, Ohio Citizens, Hundred East Credit Corporation, Barry Equipment and Continental Bank. (Raible, 8 Tr. 709-711)\n17.24. Lack of Business Advantage to Telecasting. If he were free to decide whether or not to sign one of the Hadar leases, and if his company were in Telecasting's position, Mr. Raible would not be willing to sign it. (Raible, 4 Tr. 356-57; Raible, 10 Tr. 966-67) Many of the items Telecasting leased from Hadar could have been purchased by Telecasting. (Raible, 8 Tr. 705-06) Design Space, a Hadar creditor, informed Hadar that it would prefer to deal directly with Telecasting. (Raible, 11 Tr. 1045) Telecasting derived no business advantage from entering into the leases with Hadar. (Raible, 8 Tr. 704-06, 10 Tr. 955-956)\n\n18. Particular Hadar Lease Scams\n\n18.1. Back Dating of Lease H-1003. Lease H-1003 purports to be dated February 1, 1978. (Lease H-1003, Pl. Ex. 3) On the equipment list attached to lease H-1003, however, there are two items purchased by Hadar in September, 1979, included as part of lease H-1003. (H. Klein, 29 Tr. 2828) The date originally typed on lease H-1003 was July 1, 1980, but it was covered by a sticker and the date February 1, 1978, typed on instead. (Raible, 8 Tr. 747-52, 9 Tr. 793-94; see also Hadar Lease Schedule, Raible Ex. 791, p. 2)\n18.2. Invoices on Lease H-1015 in Excess of the Cash Price for the Equipment. Hadar invoiced Telecasting for $32,448 in May, 1978, as a deposit for two permanent generators relating to lease H-1015. (H. Klein, 30 Tr. 2893; 5/1/78 Invoice, Pl. Ex. 101) In August, 1979, Hadar invoiced Telecasting for another $52,648. (H. Klein, 30 Tr. 2895) These two payments totaled $85,096. The two generators had a cash price of $75,336. (H. Klein, 30 Tr. 2896) The two generators were installed at the station in October, 1978, and April, 1979. (H. Klein, 30 Tr. 2895) Telecasting made sufficient payments to Hadar in lump sums more than adequate to pay cash for the equipment, as opposed to financing the purchase through Hadar.\n18.3. Lack of Refund on Cancellation of Lease H-1016. Lease H-1016 was cancelled prior to execution. (H. Klein, 31 Tr. *864 2999) Hadar had invoiced Telecasting for the 20 percent deposit, two percent commitment fee and sales tax, a total charge of $11,059.78. (H. Klein, 31 Tr. 2999) Hadar never issued a credit to Telecasting when the lease was cancelled. (H. Klein, 31 Tr. 2999)\n18.4. Lease H-1018 for a Price Increase. Lease H-1018 states that it is for two motorized zoom lenses. (Lease H-1018, Pl. Ex. 18) The motorized zoom lenses were replacements for two manual lenses that were originally part of the package covered by lease H-1013. (H. Klein, 31 Tr. 3003) The lease price that Hadar charged Telecasting on lease H-1018 was based on the price increase resulting from the change to motorized lenses. (H. Klein, 31 Tr. 3003) Hadar never actually made any payments to the vendor due to the change. (H. Klein, 31 Tr. 3003)\n18.5. Two Versions of Lease H-1019. In discovery, Hadar produced a copy of lease H-1019 that was identical to lease H-1021, covering four motor vehicles. (Compare Lease H-1019, Chi Ex. 19; with Lease H-1021, Pl. Ex. 21; see Chi Dep., FNBB Ex. 243, pp. 40-41) During discovery, the attorneys and accountants for Telecasting and FNBB deduced that the real lease H-1019 covered a temporary emergency generator that Hadar had leased from Hood Electrical Contractors, Inc. for lease to Telecasting. (See Raible Dep., FNBB Ex. 259A, pp. 447-52; H-1019 Hood File Folders, Raible Exs. 691-92; 6/29/78 and 1/24/79 Hood Memos, Raible Exs. 693, 695; 3/10/79 Hood Invoice, Raible Ex. 694) After repeated requests by counsel (e.g., Raible Dep., FNBB Ex. 259A, p. 452) and an order of this Court (Motion To Compel Production With Order, FNBB Ex. 154, \u0e16 5), the Overmyer organization finally produced an unsigned lease numbered H-1019 for a term of 14 months, describing the leased equipment as \"See Attached List.\" (Lease H-1019, Pl. Ex. 19) No list was attached, nor was any produced. (Raible, 9 Tr. 841; see Lease H-1019, Pl. Ex. 19) The rental between Hadar and Hood Electrical Contractors, Inc. was on a month-to-month basis. (Raible Tr. 843-44; H. Klein, 30 Tr. 2878) The temporary generator which is the subject of lease H-1019 was at the transmitter site for exactly 14 months and nine days. (H. Klein, 30 Tr. 2877-78) It was only after the generator was removed that Hadar knew it would be there for 14 months. (Raible, 9 Tr. 844) Lease H-1019 could only have been written for 14 months after the temporary generator was removed from the site. (H. Klein, 30 Tr. 2880-81; see Raible, 9 Tr. 844) The invoices for lease H-1019 in Telecasting's files show that Hadar charged Telecasting 19 months' rent and later gave Telecasting a credit for four months and 21 days. (See 8/31/79 Invoice, FNBB Ex. 156) The invoices offered by Hadar in this case charge Telecasting on lease H-1019 for 22 months, which is eight months in excess of the lease term. (2/1/78-11/1/79 Invoices, Pl. Ex. 101; H. Klein, 30 Tr. 2878-79)\n18.6. Lease H-1021 for Telecasting's Own Vehicles. Lease H-1021 covers four vehicles: two AMC Jeep Cherokees and two AMC Matadors. (Lease H-1021, Pl. Ex. 21) The two AMC Jeep Cherokees were financed by Hadar through Ohio Citizens Trust Company. (Security Agreement, Pl. Ex. 77, pp. 4-5) The two AMC Matadors were obtained by Hadar through a transfer of ownership from Telecasting to Hadar. (5/26/78 Memo, Pl. Ex. 77; 5/23/78 Memo, Pl. Ex. 77; H. Klein, 30 Tr. 2872-73) Mr. Raible was unable to explain how the price of $30,352 stated in the lease or the $1,096 monthly rental payment was derived (Raible, 8 Tr. 691) Mr. Klein, the Telecasting accounting expert, demonstrated how the $30,352 price relates to the cost of the four vehicles (H. Klein, 30 Tr. 2864-68) and how the monthly rental payment of $1,096 was computed using a variation of the Overmyer Formula based on the cost of the four vehicles. (H. Klein, 30 Tr. 2868-72) Although Telecasting arranged for the acquisition of the two AMC Matadors by bartering advertising time, Hadar obtained title for these two vehicles without consideration to Telecasting, and then leased the two vehicles to Telecasting. (H. Klein, 30 Tr. 2872-74)\n*865 18.7. Continuation of Lease H-1027 After Sale of the Equipment. The temporary generator covered by lease H-1027 was replaced in October, 1978. (H. Klein, 30 Tr. 2886) In December, 1978, Mr. Rety, an employee of Telecasting, arranged the sale of the temporary generator for $2,500. (12/12/78 Letter, Pl. Ex. 103) The proceeds of the sale went to Hadar, rather than Telecasting (12/12/78 Letter, Pl. Ex. 103) Lease H-1027, however, continued in force after the generator was sold through its termination date of January 31, 1979. (H. Klein, 30 Tr. 2885) The total cost to Hadar for the temporary generator was $4,700 less the $2,500 resale resulting in a net cost to Hadar of $2,200. (H. Klein, 30 Tr. 2890) Hadar's profit for this one-year financing was $3,695, or one and one-half times its net investment. (H. Klein, 30 Tr. 2890)\n18.8. Lease H-1028 for Roof Repairs That Were ISLI's Responsibility. Hadar lease H-1028 covers repair of a roof on a building at Telecasting's transmitter site. (Raible, 8 Tr. 706-07) Paragraph six of the lease between ISLI and Telecasting for the transmitter site makes ISLI, not Telecasting, responsible for maintenance and repair of that roof. (Raible, 8 Tr. 708) Moreover, lease H-1028 includes as part of the lease, the cost of removal and disposal of existing sheet metal roofing. (Lease H-1028, Pl. Ex. 23)\n18.9. Lease H-1033 for Spare Parts. Lease H-1033 covers various spare parts purchased by Hadar from Harris Corporation and leased to Telecasting. (Lease H-1033, Pl. Ex. 28) The terms for lease H-1033 were computed using the Overmyer Formula based on a cost of $7,660.10. (H. Klein, 32 Tr. 3032) Based on the attachment to lease H-1033, the total cost of the equipment listed was $6,600.47. (H. Klein, 32 Tr. 3032) The price of the spare parts actually purchased by Hadar and used by Telecasting was $14,258.91. (H. Klein, 32 Tr. 3032) It is not customary in the television industry to lease replacement parts. (Bond, 14 Tr. 1309)\n18.10. The 50 Percent Deposit on Lease H-1040. The lease between Hadar and the vendor of the equipment covered by lease H-1040, Station Business Systems, Inc. (\"SBS\"), required that Hadar pay $2,000 down, $5,000 upon installation, $5,000 within 90 days of installation and, beginning on July 1, 1979, $1,000 per month for 12 months. (H. Klein, 31 Tr. 2927) By applying the Overmyer Formula to lease H-1040 and using the standard 20 percent deposit, a deposit of $6,019.20 would result, which would not be sufficient to cover the initial Hadar start-up costs of $12,000. (H. Klein, 31 Tr. 2928) Lease H-1040 actually required a deposit of 50 percent. (Lease H-1040, Pl. Ex. 35) Hadar was able to increase the deposit by $9,000 to $15,048, more than enough to pay for the equipment, by departing from the Overmyer Formula. (H. Klein, 31 Tr. 2926, 2929)\n18.11. Claim for Hadar's Nonpayment for the Equipment Covered by Lease H-1040 Recorded on Telecasting's Books. SBS is litigating a claim of $9,225 against Hadar and Telecasting. (H. Klein, 31 Tr. 2936) When the lease between Hadar and SBS was cancelled on January 31, 1980, the total obligation due SBS was $18,352. (H. Klein, 31 Tr. 2935) Payments of $7,127 by Hadar and $2,000 by Telecasting reduced the balance due to $9,125. (H. Klein, 31 Tr. 2930-31, 2935-36) In addition to the $2,000 Telecasting paid directly to SBS, Telecasting was invoiced by Hadar for $26,334. (Summary of Equipment Leases, FNBB Ex. 142) The Overmyer organization has recorded the SBS claim of $9,225.23 both on Hadar's books and on Telecasting's books. (H. Klein, 31 Tr. 2936; 12/3/81 Hadar Schedules, FNBB Ex. 177, p. 18; Hadar Journal Entry 3-05, Pl. Ex. 115F; Telecasting Journal Entry 1-17, FNBB Ex. 161)\n\n19. The Hundred East Leases\n\n19.1. Equipment Cost to Hadar. The cash prices of the equipment obtained by Hadar through Hundred East for lease to Telecasting were $88,825 for lease H-1043, $1,818,878 for lease H-1044 and $330,350 for lease H-1045, a total of $2,238,053. (H. Klein, 32 Tr. 3042, 3046; Conditional Sales Contract, Raible Ex. 758, p. 5) Because Hadar chose to finance the purchase, it was *866 forced to agree to pay financing charges that increased the prices to $123,111.60, $3,029,522.88 and $554,988.48, respectively, a total of $3,707,622.96. (H. Klein, 32 Tr. 3041-42, 3045-47; Conditional Sales Contracts, Raible Ex. 753, pp. 3, 7, Raible Ex. 758, pp. 1, 5) Because of the amounts involved, the contracts between Hadar and Hundred East provided for a deposit equal to one monthly payment, $2,051.86 on lease H-1043, $31,557.53 on lease H-1044 and $5,781.13 on lease H-1045. (Finance Plan, Raible Ex. 752, p. 3; Conditional Sales Contracts, Raible Ex. 753, p. 3, Raible Ex. 758, p. 1)\n19.2. Imposition of Leases H-1044 and H-1045 on Telecasting. Because of the high cost of the equipment involved, Hundred East was not willing to sell the second and third packages (leases H-1044 and H-1045) on the basis of Hadar's credit. (Hundred East [Corcoran] Dep., FNBB Ex. 244, pp. 29-31) Hundred East required assignments of the Hadar leases with Telecasting so that Telecasting's credit would stand behind the transactions. (Hundred East [Corcoran] Dep., FNBB Ex. 244, pp. 30-32) For that reason, the Overmyer organization created leases at \"not less than\" the required monthly payment from Hadar to Hundred East and created corporate minutes of Hadar and Telecasting approving those leases and providing that the actual price would be set by the board of directors of Hadar. (Raible, 9 Tr. 860-61; Lease H-1044, Pl. Ex. 40; Lease H-1045 [2 versions], D. Overmyer Ex. 2, Pl. Ex. 41; 10/25/79 and 1/25/80 Telecasting Minutes, Tele Ex. 29; 10/26/79 Hadar Minutes, Raible Ex. 158; 1/25/80 Hadar Minutes, Raible Ex. 162; 3/11/80 Hadar Minutes, Raible Ex. 168) As a director of Telecasting, Mr. Raible voted to approve such leases because he knew that the terms of the lease would be dictated by Mr. Overmyer in any event. (Raible, 10 Tr. 974-75) When the real leases were prepared, the actual monthly rentals were $50,492.88 on lease H-1044 and $9,249.97 on lease H-1045. (Leases, Pl. Exs. 39, 42)\n19.3. Deposit on Lease H-1043. The rental for lease H-1043 was computed by applying the Overmyer Formula to the fully loaded financial price. (Raible, 11 Tr. 985-88) As a result, Telecasting paid a deposit of $51,460.02, including sales tax on lease H-1043. (Raible, 11 Tr. 986) For an additional $37,000, Telecasting could have purchased the equipment for cash directly from the supplier, American Data. (Raible, 11 Tr. 985-88)\n19.4. The Pricing of Leases H-1044 and H-1045. The Overmyer Formula was not used to compute the rental for leases H-1044 and H-1045. (Raible, 9 Tr. 863, 10 Tr. 983-84; H. Klein, 32 Tr. 3048) Had the Overmyer Formula been applied to the loaded cost of $3,029,523 on lease H-1044, a total lease obligation of $7,876,759 would have resulted. (H. Klein, 32 Tr. 3047; Raible, 9 Tr. 862) This would have resulted in a 20 percent deposit of $1,575,352 and 96 monthly payments of $64,639.67. (H. Klein, 32 Tr. 3047-48; Raible, 9 Tr. 862-63, 11 Tr. 983) Had the Overmyer Formula been used for lease H-1045, the deposit of $1,575,352 would have almost equaled the $1,818,878 cash price of the equipment. (H. Klein, 32 Tr. 3048) Even Mr. Overmyer was unwilling to write a lease at so exorbitant a rate. (Raible, 9 Tr. 865) As a result, Mr. Overmyer set the rentals for leases H-1044 and H-1045 at levels derived by applying a multiplier of 1.6, as if they were three-year leases, rather than 2.6, which would normally apply to eight-year leases, and omitting the deposit altogether. (Raible, 9 Tr. 864-65, 10 Tr. 984)\n19.5. Telecasting's Lease Obligations. Telecasting was obligated to pay Hadar $246,223.20 on lease H-1043, $4,847,316.48 on lease H-1044 and $887,997.12 on lease H-1045, a total of $5,981,536.80, or $2,273,913.84 more than Hadar was obligated to pay Hundred East. (Leases H-1043, H-1044, H-1045, Pl. Exs. 38, 39, 42; see Finding No. 19.1, supra.) At the end of the terms of the three leases, Hadar, not Telecasting, will own the equipment. (H. Klein, 32 Tr. 3043-46)\n19.6. Post-Petition Lease Modification. Sometime in March, after the Telecasting 11 was filed, Mr. Overmyer decided to *867 change the price for the three Hundred East packages combined to a flat total of $50,000 per month, starting January 1, and had Mr. Connery prepare back dated minutes for Telecasting and Hadar purporting to show that the change was made before the filing. (Raible, 11 Tr. 989-90; Chi Dep., FNBB Ex. 243, p. 47; 1/5/81 Telecasting Minutes, Tele Ex. 29; 1/5/81 Hadar Minutes, Pl. Ex. 47; Connery, 23 Tr. 2236-37) One effect of the change was to accelerate the date payments were to begin to January 1, 1981, even though the equipment was not installed. (Compare 1/5/81 Telecasting Minutes, Tele Ex. 29; and 1/5/81 Hadar Minutes, Pl. Ex. 47; with Lease H-1044, Pl. Ex. 39; H. Klein, 32 Tr. 3052-53) The purpose of accelerating the starting date was to try to explain the huge overpayment by Telecasting to Hadar.\n19.7. Double Invoicing on Lease H-1043. Hadar invoiced Telecasting twice on lease H-1043 during January, February and March, 1981. (Invoices, Pl. Ex. 101; H. Klein, 32 Tr. 3051-52) The regular monthly invoice that lists numerous leases includes a $3,430.71 charge for lease H-1043; another invoice separately charges $50,000 on leases H-1043, H-1044 and H-1045 combined. (Invoices, Pl. Ex. 101; H. Klein, 32 Tr. 3051-52)\n19.8. The $234,138 or $400,000 Deposit. Mr. Connery directed Messrs. Shock, Chi and Taub to make adjustments to the books of account of Telecasting, including changing the overpayment of Hadar in part into a \"deposit on new leases\" of $234,138. (2/23/81 Connery Memo, Connery Ex. 40) The $234,138 \"deposit on new leases\" was exactly six times Hadar's monthly payments to Hundred East covered by leases H-1043, H-1044 and the original version of H-1045. (Connery Dep., FNBB Ex. 231, pp. 359-63; Hundred East Contracts, Raible Ex. 752, p. 1; Raible Ex. 753, p. 3; Original Lease H-1045, D. Overmyer Ex. 2) Mr. Connery claims that Mr. Overmyer and Mr. Raible stormed into his office to ask him why he selected $234,138 as the Hundred East deposit figure, and to inform him that the correct figure which they had agreed on was $400,000. (Connery Dep., FNBB Ex. 231, pp. 360-63) On March 19, 1981, Mr. Overmyer testified that the $400,000 deposit represents eight monthly payments of $50,000 on an aggregate lease executed in 1979 for equipment financed by Hundred East. (D. Overmyer, Meeting of Creditors 3/19/81, 43 Tr. 4088-89) In his deposition, Mr. Overmyer claimed that he and Mr. Raible agreed on the $400,000 deposit figure sometime in late 1980, early 1981. (D. Overmyer Dep., FNBB Ex. 224, pp. 93-95) However, according to Mr. Raible, he did not enter into any agreement with Mr. Overmyer regarding the $400,000 deposit, nor did he ever tell Mr. Connery that any such agreement existed. (Raible, 11 Tr. 1011) The Court finds that Mr. Overmyer's and Mr. Connery's testimony about the purported deposit is unbelievable and was made up from the very beginning in an effort to explain the huge overpayment by Telecasting to Hadar.\n19.9. Hundred East Leases Intentionally Misrepresented. In a January 2, 1981, affidavit filed in the Southern District of New York, Mr. Overmyer swore that lease H-1044 provided for rental payments in the same amount that Hadar was obligated to pay Hundred East. (D. Overmyer Affidavit, FNBB Ex. 458, \u0e16 8) In fact, it was never intended by Mr. Overmyer that the rental in the original lease of \"no more than $31,557.53\" would be charged by Hadar. (Connery, 23 Tr. 2191; Raible, 9 Tr. 860-61) Thus, Mr. Overmyer's sworn statements were intentionally misleading, as was Mr. Overmyer's contention that lease H-1044 was beneficial to Telecasting and would improve its value to FNBB. (Affidavit, FNBB Ex. 438, \u0e16 9) In his deposition in this case, Mr. Overmyer denied that he was aware of the Hadar board of directors having the right to set the actual rental. (D. Overmyer Dep., FNBB Ex. 224, p. 102)\n19.10. Hadar Has No Interest in the Equipment. Hundred East foreclosed Hadar's interest (if any) in the equipment leases prior to the commencement of Hadar's Chapter 11. (12/8/81 Application for Authority To Install New Transmitter, \u0e16 9; 3/16/81 Letter, FNBB Ex. 429; 3/26/81 *868 Summons and Verified Complaint in Hundred East v. Hadar, filed 3/26/81, FNBB Ex. 426) Under all the circumstances, it would be unconscionable and a fraudulent transfer to grant Hadar any interest in lease payments from Telecasting or in any residual value of the equipment.\n\n20. The Inter-Company Account Between Telecasting and Hadar.\n\n20.1. The Inter-Company Balance Between Telecasting and ISLI. The accountants for Telecasting and ISLI were able to reach agreement in early 1976 that the books of both companies showed a balance due from ISLI to Telecasting of $5,019.09 as of October 22, 1975. (H. Klein, 37 Tr. 3441-42; 1/27/66 Memo, FNBB Ex. 60) An analysis of the activity between Telecasting and ISLI for the period October 22, 1975, through December 31, 1975, demonstrates that ISLI owed Telecasting $8,616.47 as of December 31, 1975. (H. Klein, 37 Tr. 3441-45)\n20.2. Hadar's First Eight Months; Payments Primarily to Jeebs. During the first eight months after the purported effective date of the assignment from ISLI to Hadar, Hadar invoiced Telecasting a total of $172,323.19. (1/1/76-8/31/76 Invoices, Pl. Ex. 101; Hadar Journal Voucher 76-3, Pl. Ex. 115A) During that period Telecasting made only one payment directly to Hadar, $11,000 in August, 1976. (Hadar Journal Voucher 76-1, Pl. Ex. 115A; Summary, FNBB Ex. 218; Lynch, 17 Tr. 1644-45) Mr. Lynch knew that Telecasting had made payments to Jeebs on account of the leases; but, instead of examining the Jeebs' books kept at 3 Park Avenue to determine the actual amount of such payments, he improperly plugged a figure that would make the balance come out to zero as of August 31, 1976 ($172,323.19 - $11,000.00 = $161,323.19). (Lynch, 17 Tr. 1647-49; Hadar Journal Voucher 76-6, Pl. Ex. 115A) The actual amount paid by Telecasting to Jeebs during the first eight months of 1976 was $244,761.97, giving a balance of $83,438.78 due from Hadar and Jeebs to Telecasting as of August 31, 1976 ($244,761.97 + $11,000.00 - $172,323.19 = $83,438.78). (H. Klein, 37 Tr. 3447-52)\n20.3. Total Lease Charges by Hadar. Hadar invoices and lease obligations for the period January 1, 1976, through January 31, 1981, totaled $2,618,315.29. (H. Klein, 37 Tr. 3487) This amount excludes charges pertaining to leases H-1044 and H-1045, the Hundred East equipment and installation charges of $20,153.10 and $249,116.15. (H. Klein, 37 Tr. 3483) The Hundred East equipment had not been installed as of January 31, 1981, and, therefore, no payments were yet due. (H. Klein, 32 Tr. 3053; Lease H-1044, Pl. Ex. 39) Telecasting never agreed to pay Hadar for installation of equipment. (See Lynch, 18 Tr. 1707-08) Moreover, Hadar never paid any of the installation charges other than $18,321 to Slates Electric. (H. Klein, 37 Tr. 3484-85; see Lynch, 18 Tr. 1702-03; Raible, 10 Tr. 973; H. Klein, 38 Tr. 3579-81, 3656-57) Sometime after the Overmyer organization filed this Chapter 11 on behalf of Telecasting on February 6, 1981, Mr. Raible sent to Telecasting an invoice for $249,116.15 of installation charges \"incurred\" by Hadar with regard to Telecasting equipment. (Raible, 10 Tr. 972; Connery, 23 Tr. 2271-75; 2/3/81 Invoice, Pl. Ex. 100) This invoice was prepared after February 23, 1981, since Mr. Connery advised former counsel for Telecasting on that day: \"Invoice will be submitted and I will advise you of the amount.\" (2/23/81 Connery Letter, FNBB Ex. 62, p. 4) The invoice was back dated to February 3, 1981, to make it appear that it had been rendered before the Chapter 11 was filed, and to create fictitious charges to try to offset the huge overpayment that Mr. Connery knew had been made by Telecasting to Hadar. (See Meissner Dep., FNBB Ex. 232, p. 45)\n20.4. Amount Hadar Owes Telecasting. Since the Hadar leases were fraudulent shams designed solely to bleed money out of Telecasting, the amount due from Hadar to Telecasting is the difference between (1) the total payments that Telecasting made to or on behalf of Hadar, and (2) the total payments that Hadar made to or on behalf of Telecasting. (H. Klein, 37 Tr. 3496-98; *869 Summary, FNBB Ex. 220) Telecasting paid $3,191,909.01 to or on the behalf of Hadar for the period January 1, 1976, through January 31, 1981. (H. Klein, 37 Tr. 3487; Summary, FNBB Ex. 218) This amount consists of: $2,779,368.26 payments that Telecasting made directly to Hadar; $244,761.97 payments that Telecasting made to Jeebs on the account of leases; $82,562.64 payments that Telecasting made to GE on obligations of ISLI and Hadar; $19,626.95 miscellaneous payments that Telecasting made on behalf of Hadar; and $65,589.19 petty cash withdrawals from Telecasting for use by Hadar. (Summary, FNBB Ex. 218) The following payments were made by Hadar to or on behalf of Telecasting: $496,683.24 representing Hadar payments to vendors on equipment leased to Telecasting; $36,137.21 representing Hadar payments for equipment purchased or services rendered to Telecasting which were not covered by a lease; $73,048.74 representing Hadar payments to Hundred East for interim interest payments pertaining to equipment of leases H-1044 and H-1045; and $65,800 representing Hadar payments directly to Telecasting. (H. Klein, 37 Tr. 3497-98) The total of the foregoing payments is $671,688.99. (H. Klein's Summary, FNBB Ex. 220) Subtracting $671,688.99 from $3,191,909.01, Hadar owes Telecasting $2,520,240.02. (H. Klein, 31 Tr. 3498; Summary, FNBB Ex. 220)\n20.5. Hadar's Proof of Claim. Hadar filed a proof of claim based on the patently unwarranted assumption that the balance between Telecasting and Hadar on September 1, 1979, was zero. (Lynch, 18 Tr. 1736; Connery, 22 Tr. 2130-31; Hadar Proof of Claim, Raible Ex. 604, p. 2) Even Hadar's own post-petition set of books shows that as of that date, Hadar owed Telecasting $376,835.04. (Hadar 1979 General Ledger, Account 0621, Pl. Ex. 114)\n20.6. Hadar Agreement to Assign Leases to Telecasting. By minutes dated February 9, 1981, Hadar agreed to assign all of the leases to Telecasting for an amount not in excess of the balance due and owing on the purchase price. (2/9/81 Hadar Minutes, Raible Ex. 173) This agreement has never been rescinded or withdrawn by Hadar. (Hadar Response to Telecasting/FNBB Request for Admission No. 1)\n\n21. Overmyer Business Tactics\n\n21.1. Mr. Raible Signed Hadar Checks Without Understanding the Transaction. Mr. Raible signed two Hadar checks on October 2, 1979, without understanding the transactions, at the request of Mr. Chi. (Hadar Requests for Payment, Nos. 1323 and 1324, Carrieri Ex. 2) The first check transferred $650 from Hadar to NDS. (Hadar Request for Payment, No. 1323, Carrieri Ex. 2) The second check transferred $5,000 from Hadar to Weathervane Farms, Inc. \"to cover Expediter $5,000.00 check, which bounced twice, causing an OD [overdraft] due to tax check disbursements.\" (Hadar Request for Payment, No. 1324, Carrieri Ex. 2)\n21.2. Insufficient Funds for Hadar Check to Slates. Mr. Slates, of Slates Electric, Inc., ordered his employees to cease work for Hadar and removed the necessary supplies from the premises, because Hadar did not meet its payment obligations. (Slates, 46 Tr. 4504; PAST Dep., FNBB Ex. 236, p. 21) Mr. Slates attended a meeting at which Hadar offered him a check for $20,925, if he would return the supplies and resume work. (Slates, 46 Tr. 4506-08; 11/14/80 Unexecuted Agreement, PAST Ex. 12) There were insufficient funds in Hadar's account to cover the check. (Slates, 46 Tr. 4507)\n21.3. Problems Created by Telecasting's New York Office. The books and records of Telecasting were maintained in New York through August, 1979. (Meissner Dep., FNBB Ex. 232, p. 6) When the books were moved to Toledo, Mr. Meissner, former business manager, vice-president and controller of Telecasting, was unable to substantiate the balances in the general ledger. (Meissner Dep., FNBB Ex. 232, pp. 5, 7-8) Payments in excess of $1,000 per day had to be made by the New York office. (Meissner Dep., FNBB Ex. 232, p. 28) Mr. Meissner had no control over what bills were paid *870 by the New York office. (Meissner Dep., FNBB Ex. 232, pp. 29-30) When Telecasting's bank accounts were maintained in New York, the Toledo station was constantly hounded by local creditors about delinquent payments. (Meissner Dep., FNBB Ex. 232, p. 11) Mr. Meissner had difficulties reconciling Telecasting's bank statements with the general ledger, because checks had been written and were being held in New York. (Meissner Dep., FNBB Ex. 232, pp. 15-16) Information supplied to Mr. Meissner from New York was inaccurate. (Meissner Dep., FNBB Ex. 232, pp. 15-16, 24)\n21.4. Mr. Overmyer Ordered Payment to Calfee, Halter & Griswold Stopped. On Thursday, October 29, 1981, Mr. Overmyer and Mr. Connery requested an Omega check for $5,000 made payable to Calfee, Halter & Griswold. (Omega Request for Payment, No. 1584, Carrieri Ex. 33, p. 2) Mr. Overmyer ordered that the check not be mailed until Friday, October 30, 1981. (Omega Request for Payment, No. 1584, Carrieri Ex. 33, p. 3) On Monday, November 2, 1981, Mr. Overmyer ordered payment stopped on the check, before the check could possibly have cleared. (Omega Request for Payment, No. 1584 Carrieri Ex. 33, p. 2) As a result, Calfee, Halter & Griswold required payment by bank check or wire transfer only. (See Omega Request for Payment, No. 1584, Carrieri Ex. 33, pp. 1, 2, 5, 6 and 7)\n21.5. Other Overmyer Stop Payment Scams. On July 3, 1980, Mr. Raible wrote a letter to Mr. Todd, of Texcom Computer Leasing Services, enclosing Hadar's check for $3,562 (two lease payments) and the proposed IBM System 43 lease for execution. (Raible Letter, FNBB Ex. 29) At the same time, Mr. Chi wrote to Chemical Bank stopping payment on the $3,562 check to Texcom. (Chi Letter, FNBB Ex. 30) On May 21, 1981, Barry Mansfield, of Lansco, personally went to the Overmyer offices to demand a check. (Note, Carrieri Ex. 43, p. 4) As a result, Mr. Overmyer approved an Omega check for $500 to Lansco. (Omega Request for Payment No. 1292, Carrieri Ex. 43, p. 2) On May 27, 1981, Mr. Overmyer ordered that payment on the check to Lansco be stopped. (Carrieri Ex. 43, pp. 2, 3 and 5)\n21.6. Checks Written and Held. On August 14, 1979, a Hadar check to Barry Equipment for the lump sum of $7,644 was voided, per Mr. Overmyer's instructions. (Hadar Request for Payment No. 1273, Carrieri Ex. 2) Three separate checks were written instead, each for $2,548, to be held pending Mr. Overmyer's instructions for their release. (Hadar Request for Payment No. 1273, p. 2, Carrieri Ex. 2) The first check was not mailed until August 21, 1979, and the second and third checks were not mailed until August 22, 1979. (Hadar Request for Payment No. 1273, Carrieri Ex. 2) Mr. Chi requested and approved a Telecasting check dated February 23, 1981, payable to Warner Bros., Inc., in the amount of $6,998.33, which check was \"to be held by Mr. Chi \u0e42\u0080\u0094 not for immediate release.\" (Telecasting Request for Payment No. 1002, Carrieri Ex. 22)\n21.7. Failure to File Tax Returns. According to the Hadar and Telecasting agreements, the service companies agreed to prepare and file federal and state tax returns, including sales and franchise taxes. (Hadar Service Agreements, Raible Exs. 9-11; Telecasting Service Agreements, 3/1/74, 11/1/80 Telecasting Minutes, Tele Ex. 29, Raible Exs. 773, 774) Federal and state income tax returns for Hadar have not been filed since August 31, 1971. (Raible Dep., FNBB Ex. 259, pp. 140-141, 151-152) Federal income tax returns for Telecasting have not been filed since 1975. (Connery, 21 Tr. 2009-10) Hadar collected sales taxes from Telecasting, but neither filed returns nor paid them over to the State of Ohio. (Connery, 21 Tr. 2009; Hadar Response to Telecasting/FNBB Request for Admission No. 29)\n21.8. Fictitious Address for Leased Car. Mr. Overmyer's 1965 Mustang was registered in Connecticut at his direction. (Raible Dep., FNBB Ex. 259, p. 191) Mr. and Mrs. Overmyer's former address was on Perkins Road in Greenwich, Connecticut. *871 (Raible Dep., FNBB Ex. 259, p. 192) The 1965 Mustang was not registered at that address. (Raible Dep., FNBB Ex. 259, p. 192) Instead, the Mustang was registered at a fictitious address made up by using the street address for the Overmyer organization in New York, but changing the city and state: Overmyer Trucking Co., 3 Park Avenue, Greenwich, Connecticut, 06830. (Registration Card, Raible Ex. 377; Raible Dep., FNBB Ex. 259, p. 194)\n21.9. Defrauding United Way. During 1980 and 1981, certain Telecasting employees consented to payroll deductions for charitable contributions to United Way. (Hall, 46 Tr. 4418, 4422; Consent Forms, Tele Exs. 38, 39) Although the pledges were deducted from the employees' take-home pay, Telecasting, under the control of Mr. Overmyer, did not forward the pledges for 1980 ($356) to United Way. (Hall, 46 Tr. 4420-22) United Way attempted to collect the $356 due from Telecasting. (4/24/81 Letter, Tele Ex. 38) On July 10, 1981, United Way filed a proof of claim with this Court for the $356 due it. (Proof of Claim, Tele Ex. 40) During the first quarter of 1981, while Mr. Overmyer continued to control Telecasting, the amounts pledged to United Way by Telecasting employees were deducted from their pay, but not paid over to the charity. (Hall, 46 Tr. 4422-24) After Mr. Overmyer was removed from control by this Court, the payroll deductions were paid to United Way as charitable contributions by Telecasting employees. (Hall, 46 Tr. 4425) For 1981, $371.28 remains unpaid to United Way. (Hall, 46 Tr. 4428; 1/14/82 Letter, Tele Ex. 39)\n21.10. PAST's Change of Claim. During the period September, 1980, to February, 1981, Mr. Wilson of PAST submitted invoices to Telecasting for services performed in connection with the installation of the Hundred East equipment. (Invoices, PAST Ex. 16) On March 11, 1981, Mr. Strang wrote a letter to Mr. Wilson of PAST, asking him to submit new invoices, charging Hadar instead of Telecasting for the same services. (Letter, PAST Ex. 15) This was done on the same date, March 11, 1981, as this Court's order appointing a fiscal agent for Telecasting. (3/11/81 Order) On March 17, 1981, Mr. Wilson complied with Mr. Strang's request and sent a new set of invoices charging Hadar. (Invoices, PAST Ex. 16; Wilson, 46 Tr. 4482-86)\n21.11. Mr. Overmyer's Bad Business Reputation. Mr. Overmyer's reputation with regard to paying his bills is bad. (Raible, 8 Tr. 713) Knowing what he knows about Mr. Overmyer, Mr. Raible did not know if he would have loaned money to Hadar. (Raible, 8 Tr. 713)\n\n22. The Hadar Conduit\n\n22.1. Hadar's Funds Came from Telecasting. Hadar's cash receipts from all sources totaled $3,074,967.31 for the period January 1, 1976, to January 31, 1981. (Cash Receipts and Cash Disbursements Summary, FNBB Ex. 182) Of this total, $2,803,918.36 (91.18 percent) came from Telecasting. (Cash Receipts and Cash Disbursements Summary, FNBB Ex. 182) Only .56 percent of Hadar's cash receipts came from sources other than Overmyer companies. (Cash Receipts and Cash Disbursements Summary, FNBB Ex. 182)\n22.2. Hadar's Funds Went to Other Overmyer Entities. During the fiscal year 1977, Hadar obtained $460,209.70 from Telecasting and disbursed $424,100 to Jeebs. (Cash Receipts and Cash Disbursements Summary, FNBB Ex. 182) During the fiscal year 1978, Hadar obtained $579,823.20 from Telecasting and disbursed $519,400.15 to Overmyer companies (primarily Jeebs and AGG). (Cash Receipts and Cash Disbursements Summary, FNBB Ex. 182) During the fiscal year 1979, Hadar obtained $854,675.77 (94.2 percent of Hadar's receipts) from Telecasting, disbursed only $174,639.66 to vendors of equipment leased to Telecasting and disbursed $685,081.02 to Overmyer companies (primarily AGG). (Cash Receipts and Cash Disbursements Summary, FNBB Ex. 182) During the fiscal year 1980, Hadar obtained $731,605.09 (92.5 percent of Hadar's receipts) from Telecasting, disbursed only $142,768.96 to vendors *872 and disbursed $545,168.35 to Overmyer companies (primarily AGG). (Cash Receipts and Cash Disbursements Summary, FNBB Ex. 182) During the seven months ended March 31, 1981, Hadar obtained $166,604 from Telecasting, disbursed only $24,907.64 to vendors and disbursed $95,100 to Overmyer companies. (Cash Receipts and Cash Disbursements Summary, FNBB Ex. 182) Of its total cash receipts from 1976 to 1981, $3,074,967.31, Hadar disbursed only $496.683.24 to vendors of equipment leased to Telecasting and $36,137.21 to vendors of equipment and services that Telecasting used which were not covered by leases. (Cash Receipts and Cash Disbursements Summary, FNBB Ex. 182) Of its total cash receipts from 1976 to 1981, Hadar disbursed $34,704.83 to vendors of equipment or services for the offices at 3 Park Avenue, $39,328.16 to vendors of the yacht and cars that Hadar leased to Jeebs and the Overmyer family, $19,051.20 for insurance premiums on the Overmyer family cars and other miscellaneous items and $23,918.39 for maintenance and repairs on Jeebs' yacht. (Cash Receipts and Disbursements Summary, FNBB Ex. 182) All of the above payments were approved by Mr. Overmyer. (Raible, 6 Tr. 568-69; Raible, 9 Tr. 837-38) Over the years 1976 to 1981, Hadar disbursed $2,297,349.52, 74.7 percent of its total cash receipts, to Overmyer entities. (Cash Receipts and Cash Disbursements Summary, FNBB Ex. 182) Among these disbursements were $1,142,312 to AGG, $654,600 to Jeebs, $85,272 to NDS, $8,000 to Gulf Manufacturing, $90,000 to Peerless, $35,050 to Omega and $63,000 to Mr. Overmyer. (Cash Receipts and Cash Disbursements Summary, FNBB Ex. 182)\n22.3. The Matching Checks Scheme. Mr. Overmyer directed Mr. Chi to transfer funds from Telecasting to Hadar to cover what Mr. Overmyer considered to be \"critical requirements of some kind.\" (Overmyer Dep., FNBB Ex. 224, pp. 115-16) Mr. Overmyer's practice was to tell Mr. Chi the amount needed by some Overmyer company other than Hadar or Telecasting; Mr. Chi would write a Telecasting check to Hadar, and Hadar would write a check to the other Overmyer company in precisely the amount of the \"critical requirement.\" (Overmyer Dep., FNBB Ex. 224, pp. 115-17; Raible, 7 Tr. 719-20, 10 Tr. 930-31; Chi Dep., FNBB Ex. 243, pp. 76-81; H. Klein, 34 Tr. 3189-90) Mr. Chi usually delivered Telecasting checks to Mr. Carrieri together with a Hadar deposit slip that Mr. Chi had already made out. (Carrieri Dep., FNBB Ex. 233, p. 54) Mr. Chi's denial that this happened and subsequent lack of memory about the subject (Chi Dep., FNBB Ex. 243, pp. 90-91) are not credible. Matching checks were written to Overmyer companies, Overmyer family members, vendors of leased equipment and many others. (Schedule of Matching Checks, FNBB Ex. 188) The practice of siphoning money out of Telecasting by means of matching checks began at least as far back as July 11, 1977, and continued until March 10, 1981, one day before this Court appointed a fiscal agent to prevent further misappropriation of Telecasting's funds. (Schedule of Matching Checks, FNBB Ex. 188; H. Klein, 34 Tr. 3215)\n22.4. Matching Checks to RCA Then to Jeebs, NDS, Peerless and Sugarman. Hadar took $60,000 of Telecasting funds in order to write RCA a matching check as a down payment on RCA equipment for lease to Telecasting. (Telecasting Checks to Hadar, FNBB Ex. 26; Schedule of Matching Checks, FNBB Ex. 188, Sheet 16; 1/20/78 Letter, Raible Ex. 744; Raible, 11 Tr. 992-93, 995; Hadar Cash Receipts Journal, Raible Ex. 490, p. 14) Hadar stopped payment on the $60,000 check to RCA. (Draft Letters, Raible Ex. 745) The $60,000 was not returned to Telecasting, however; instead, Hadar used the $60,000 to make payments to Jeebs, NDS, Peerless and Mr. Sugarman. (Schedule of Matching Checks, FNBB Ex. 188, p. 16; Raible, 11 Tr. 995-97)\n22.5. Matching Checks to Other Equipment Vendors. By use of checks from Telecasting to Hadar and matching checks to the vendor, the Overmyer organization paid $500 to Jamieson Film Company for the equipment covered by lease H-1010, $700 to Barry Equipment Company for the equipment *873 covered by lease H-1015, $891 to IBM for the equipment covered by lease H-1007 and $2,000 to Hood Electrical for the equipment covered by lease H-1019. (Schedule of Matching Checks, FNBB Ex. 188, Sheet 16; H. Klein, 34 Tr. 3205-07)\n22.6. Matching Checks to Overmyer Family and Overmyer Family Companies. By use of checks from Telecasting to Hadar and matching checks to the payee, the Overmyer organization paid $1,584.21 to Mr. Strang, $23,000 to T.O.F.C. (a subsidiary of RT Systems) $3,200, $2,900 and $2,100 to Manning Telecasting (of which Mr. Overmyer's daughter, Elizabeth, is president), $5,100 and $1,950 to Strang Telecasting (of which Mr. Strang is president), and $1,600 and $950 to the Citizens Committee to Eliminate Waste and Inefficiency in Government (a committee founded by Mr. Overmyer.) (Schedule of Matching Checks, FNBB Ex. 188, pp. 16 and 17; H. Klein, 34 Tr. 3207-09; Raible, 9 Tr. 824-25; Overmyer Dep., FNBB Ex. 139A, p. 69)\n22.7. The Hadar Conduit. Hadar was a mere conduit by which Mr. Overmyer could and did covertly misappropriate Telecasting's funds.\n\n23. The Service Company Fraud\n\n23.1. The Telecasting Service Agreements. The minutes of a board of directors meeting held March 1, 1974, reflect that it was unanimously voted Telecasting should retain Jeebs to render tax, accounting, insurance and administrative services for a monthly fee of $1,500 less the cost Telecasting had already incurred for the salary of Mr. Lynch. (3/1/74 Telecasting Minutes, Tele Ex. 29, pp. 3-4) A new service agreement entered into by and between Jeebs and Telecasting provided that Telecasting pay to Jeebs $2,600 per month from June 1, 1975, to December 31, 1977, for services performed by Jeebs. (12/1/75 Service Agreement, Raible Ex. 773) Subsequently, Telecasting agreed to pay AGG $5,900 per month during the period January 1, 1978, to August 31, 1979, for services rendered. (1/1/78 Service Agreement, Raible Ex. 774) Thereafter, Telecasting agreed to pay Jeebs $10,000 each month during the period September 1, 1979, to October 31, 1980. (9/1/79 Service Agreement, Raible Ex. 774) Finally, a service agreement by and between Omega and Telecasting provided that Telecasting pay $10,000 per month commencing November 1, 1980, for the duration of the contract. (11/1/80 Telecasting Minutes, Tele Ex. 29)\n23.2. Telecasting's Lack of Need for the Services. The only services provided by the service companies to Telecasting were \"accounting, office staffing, office assistance,\" and \"liaison services with New York people.\" (D. Overmyer Dep., FNBB Ex. 224, pp. 58, 59) These support services could all have been performed in Toledo instead of New York. (D. Overmyer Dep., FNBB Ex. 224, pp. 58-59) The primary reason for Telecasting having a New York office was that, had it been in Toledo, the chairman and chief executive officer, Mr. Overmyer, would have had to move back to Toledo. (D. Overmyer Dep., FNBB Ex. 224, p. 60) Mr. Meissner did not know what services Telecasting was getting from AGG for $10,000 per month. When he asked Mr. Chi, Mr. Chi just laughed. (Meissner Dep., FNBB Ex. 232, pp. 38-43) Mr. Arthur Dorfner, president of Telecasting until 1980 and chief operating officer until 1979, could not recall any services provided to Telecasting by Jeebs, AGG or Omega. (Dorfner Dep., FNBB Ex. 240, pp. 16-18)\n23.3. The Hadar Service Agreements. Hadar had service agreements with Jeebs, AGG and Omega by which it was to pay Jeebs $2,000 each month from January 1, 1976, through August 31, 1977, and $5,000 each month thereafter for the duration of the agreement (Jeebs Service Agreement, Raible Ex. 9); AGG $10,000 each month from May 1, 1978, through August 31, 1979, and $25,000 each month thereafter for the duration of the agreement (AGG Service Agreement, Raible Ex. 10); and Omega $10,000 each month beginning November 1, 1980, for the duration of the agreement (Omega Service Agreement, Raible Ex. 11).\n23.4. Lack of Services to Hadar. In actuality, the service companies provided few services to Hadar. Service company personnel *874 might have taken one day each month to type invoices to Telecasting, one day to deal with receipts from Telecasting and one day to negotiate acquisitions of property for lease to Telecasting. (Raible Dep., FNBB Ex. 259, pp. 181-83) Telecasting personnel did most of the work involved in selecting new equipment, including obtaining quotations from vendors. (Raible, 4 Tr. 334-35, 6 Tr. 523) After June, 1980, every AGG employee not related to Mr. Overmyer was removed from the AGG payroll, except Mr. Hicks and Mr. Connery's secretary, Mabel Trow-Abraham. (AGG Payroll Register, Raible Ex. 498) The Omega payroll consisted solely of members of the Overmyer family, the Overmyer attorneys, Messrs. Connery and Conway, and hired help to work at the farm owned by Weathervane Farms, Inc. (H. Klein, 35 Tr. 3286-87)\n23.5. The Hadar Service Agreements Are Back Dated Fabrications. The original journal vouchers for June, 1978, that were identified during Mr. Lynch's testimony recorded Hadar's obligation to the service companies as $2,000 per month to Jeebs from September, 1977, through June, 1978 (6/78 Telecasting Journal Voucher 6-5, FNBB Ex. 59), whereas the service agreements produced by Hadar in this adversary proceeding show obligations of $5,000 per month to Jeebs from September, 1977, through April, 1978, and $10,000 per month to AGG for May and June, 1978 (Jeebs Service Agreement, Raible Ex. 9; AGG Service Agreement, Raible Ex. 10). For the fiscal year ended August 31, 1979, Hadar recorded management and professional service fees of $20,014 on its financial statements prepared at the time (8/31/79 Profit & Loss Statement, FNBB Ex. 38); whereas the service agreements produced in this adversary proceeding show an obligation of $10,000 per month, or $120,000, to AGG (AGG Service Agreement, Raible Ex. 10). The Hadar service agreements produced in this case are back dated frauds created in an effort to justify the incredible amounts of money siphoned out of Telecasting through Hadar by the service companies.\n23.6. The RT Systems Service Agreements. By an agreement dated November 1, 1978, RT Systems agreed to pay Jeebs $4,500 each month for 1977, and $8,000 each month from January 1, 1978, to March 31, 1978. (Service Agreement, Connery Ex. 23) In another agreement dated November 1, 1978, with AGG, RT Systems agreed to pay AGG $8,000 each month, beginning April 1, 1978. (Service Agreement, Connery Ex. 24) A third agreement was made with Omega by which RT Systems agreed to pay Omega $12,000 each month beginning December 1, 1980. (Service Agreement, Connery Ex. 25)\n23.7. Unwarranted Rent Payments by RT Systems and DHO. Both the Hadar service agreements and the RT Systems service agreements provided that the service companies would provide office space at 3 Park Avenue. (Hadar-Jeebs Service Agreement, Raible Ex. 9, p. 4; Hadar-AGG Service Agreement, Raible Ex. 10, p. 4; Hadar-Omega Service Agreement, Raible Ex. 11, p. 4; RT Systems-Jeebs Service Agreement, Connery Ex. 23, p. 3; RT Systems-AGG Service Agreement, Connery Ex. 24, p. 3; RT Systems-Omega Service Agreement, Connery Ex. 25, p. 3) For years, however, RT Systems paid $3,165.25 each month to the Overmyer service companies for the rent at 3 Park Avenue. (TOFC Vouchers, Connery Ex. 26, pp. 1, 2, 7, 15, 17-20, 25 and 26; FDS Vouchers, Connery Ex. 30, pp. 32, 37-39 and 41; Raible, 8 Tr. 727-29) In 1980, while in Chapter XI in New York, DHO made three monthly payments of $2,500 each for the 3 Park Avenue rent. (AGG Cash Receipts Ledger, Raible Ex. 498, pp. 11-13) Beginning in October, 1980, and continuing at least through 1981, DHO made monthly payments of $3,390 or more for the 3 Park Avenue rent. (AGG Cash Receipts Register, Raible Ex. 498, pp. 14-15; DHO Checks, Carrieri Ex. 57; Raible, 8 Tr. 722-26; Chi Dep., FNBB Ex. 243, pp. 124-25) The base rent is substantially covered by RT Systems and DHO. (Raible, 9 Tr. 832) Hadar paid the rent on the 29th floor of 3 Park Avenue in January, 1981. (Hadar Request for Payment No. 1149, Carrieri Ex. 62) Telecasting paid the rent for February, 1981, after the Overmyer organization *875 filed its Chapter 11 petition in this Court. (Telecasting Request for Payment No. 005, Carrieri Ex. 22) While in Chapter XI in New York and Chapter 11 in this Court, the Overmyer organization caused Telecasting to pay at least $56,232.78 to Cross & Brown (the landlord of 3 Park Avenue) via Chemical Bank checks. (H. Klein, 33 Tr. 3103)\n23.8. Sources of AGG Funds. AGG obtained its funds from the following sources:\n\n\n $1,421,605.74 Hadar and Telecasting\n 645,684.55 RT Systems and Subsidiaries\n 359,627.37 Other Overmyer Companies\n 89,509.96 Mr. Overmyer\n 51,881.65 Miscellaneous\n _____________\n $2,568,309.27 Total Receipts\n\n(H. Klein, 35 Tr. 3297-98) Receipts from other Overmyer companies included $78,010 from the debtor-in-possession, DHO. (Sources and Uses of AGG Funds, FNBB Ex. 191, p. 15) Out of the total receipts from Hadar of $1,150,811.66, $743,573.44 represents matching checks from Telecasting to Hadar and Hadar to AGG. (H. Klein, 35 Tr. 3300-01; Schedule of Matching Checks, FNBB Ex. 188)\n23.9. Sources of Omega's Funds. Omega obtained its funds from the following sources:\n\n\n $188,549.37 RT Systems and Subsidiaries (TOFC\n and FDS)\n 50,383.93 Telecasting and Hadar\n 86,910.57 Total Development\n 60,823.71 D.H. Overmyer Co. (Canada)\n 15,580.00 Jeebs\n 8,783.78 Mr. Overmyer\n 21,523.03 Other Sources\n ___________\n $432,554.39 Total Receipts\n\n(H. Klein, 35 Tr. 3276-77; Sources and Uses of Omega Funds, FNBB Ex. 192) Out of total receipts from Hadar of $35,050, $20,550 represents matching checks from Telecasting to Hadar and Hadar to Omega. (H. Klein, 35 Tr. 3278)\n23.10. Omega Funds Received from D.H. Overmyer Co. (Canada) Ltd. Omega received $60,823.71 from D.H. Overmyer Co. (Canada) Ltd. (\"DHO Canada\"). (H. Klein, 35 Tr. 3277) A portion of the $60,823.71 represents DHO Canada's payment for services rendered by Mr. Edgerton since September, 1980. (H. Klein, 35 Tr. 3279; Deauville/NDS [Edgerton] Dep., FNBB Ex. 252, p. 17) During the period Mr. Edgerton rendered services to DHO Canada, he was employed by the debtor-in-possession, DHO, not by Omega. (Deauville/NDS [Edgerton] Dep., FNBB Ex. 252, p. 17) The remaining portion of the receipts pertained to \"loans\" that DHO Canada made to Omega. (H. Klein, 35 Tr. 3279-80)\n23.11. Use of Service Company Funds. The funds of the service companies were used primarily to pay Mr. Overmyer's personal expenses, to fund his litigation and to maintain him in his suite of offices in New York City. For example, Omega disbursed funds for the following purposes:\n\n\n $ 51,231.15 Personal expenses of Mr. Overmyer\n 10,180.37 Payments to IRS on account of Mr.\n Overmyer\n 68,908.85 Related Overmyer Companies\n 184,719.07 Lawyers and court costs\n 116,731.16 Payroll and consulting (primarily\n Messrs. Connery and Conway)\n 60,196.56 Payments to Cross & Brown, landlord\n of 3 Park Avenue\n 18,851.96 Office expenses\n 80,725.17 Miscellaneous payments\n ___________\n $591,544.29 Total\n\n(H. Klein, 35 Tr. 3283, 3287; Sources and Uses of Omega Funds, FNBB Ex. 192)\n23.12. Obligations of Jeebs, AGG and Omega Directly to Telecasting. AGG had receipts of $270,794.08 from Telecasting. (Summary, FNBB Ex. 191, p. 13; H. Klein, 34 Tr. 3296-97) Assuming the validity of the only executed agreement between Telecasting and Jeebs, Telecasting's obligation was $5,000 per month, which would produce a total obligation of only $170,000 for the 34 months the agreement was purportedly in effect (January 1, 1978, through October 31, 1980). (Service Agreement, Raible Ex. 774, pp. 2-4) Even if the unsigned September 1, 1979 service agreement between Telecasting and Jeebs with regard to the obligations of AGG could be considered to have gone *876 into effect and to have been valid, and even if payments to AGG could be considered to have been made pursuant to it, with 20 months at $5,000 per month under the AGG service agreement, plus 14 months at $10,000 per month under the Jeebs service agreement, the total obligation for 34 months would still be only $240,000. (Service Agreement, Raible Ex. 774, pp. 5-7) In the latter case, Telecasting overpaid AGG by $20,794.08; in the former, Telecasting overpaid AGG by $90,794.08. Omega had receipts from Telecasting of $15,333.93. (Summary, FNBB Ex. 192, p. 1) Assuming the validity of its service agreement with Telecasting at $10,000 per month from November, 1980, through February, 1981, the total obligation was $40,000. (11/1/80 Service Agreement, Tele Ex. 29) On that assumption, Telecasting underpaid Omega by $24,666.04. Because of the substantial gaps in the records of Telecasting that were turned over by the Overmyer organization pursuant to this Court's order and in the Jeebs records produced during discovery, it is impossible to determine how much Telecasting paid to Jeebs. (H. Klein, 34 Tr. 3239-43)\n23.13. Obligations of Jeebs, AGG and Omega to Telecasting Through Hadar. Assuming the validity of the service agreement between Hadar and Jeebs at $2,000 per month from January 1, 1976, through August 31, 1977, and $5,000 per month from September 1, 1977, through April 30, 1978, the total obligation of Hadar to Jeebs was $80,000. (Service Agreement, Raible Ex. 9) Even based on the books prepared by Mr. Lynch for Hadar, Jeebs concededly owes Hadar $731,223.76 on the assumption that the service agreement was valid (or $811,223.76 if it was not). (3/31/81 Hadar Trial Balance, Pl. Ex. 116A, p. 2; Lynch, 18 Tr. 1720) The books of Jeebs produced by the Overmyer organization were so incomplete as to make it impossible for Mr. Klein to verify this figure. (H. Klein, 34 Tr. 3239-43) Of the amount owed by Jeebs to Hadar, $60,000 is for amounts paid by matching checks of Telecasting to Hadar and Hadar to Jeebs. (Summary of Matching Checks, FNBB Ex. 188, p. 1; H. Klein, 34 Tr. 3204) Assuming the validity of the service agreement between Hadar and AGG at $10,000 per month from May 1, 1978, through August 31, 1979, and $25,000 per month from September 1, 1979, through October 31, 1980, the total obligation of Hadar to AGG was $510,000. (Service Agreement, Raible Ex. 10) Even based on the books prepared by Mr. Lynch for Hadar, AGG concededly owes Hadar $582,513.89 on the assumption that the service agreement was valid (or $1,092,513.89 if it was not). (3/31/81 Hadar Trial Balance, Pl. Ex. 116A, p. 2; Lynch, 18 Tr. 1723-25) The correct total amount due from Jeebs to Hadar is $1,142,311.66 (not $1,092,513.89) if the service agreement is invalid, or $632,311.66 if it is valid. (H. Klein, 34 Tr. 3293-94) Of the amount owed by AGG to Hadar, $743,573.44 is for amounts paid by matching checks of Telecasting to Hadar and Hadar to AGG. (Summary of Transfers, FNBB Ex. 188, p. 1; H. Klein, 34 Tr. 3204) Assuming the validity of the service agreement between Hadar and Omega at $10,000 per month from November 1, 1980, through March 31, 1981, the total obligation of Hadar to Omega was $50,000. (Service Agreement, Raible Ex. 11) Based on the books prepared by Mr. Lynch for Hadar, Omega concededly owes Hadar $4,007.98 on the assumption that the service agreement was valid (or $54,007.98 if it was not). (3/31/81 Hadar Trial Balance, Pl. Ex. 116A, p. 2; Lynch, 18 Tr. 1726) The correct accounting is that Hadar owes Omega $14,950.00 on the assumption that the service agreement is valid, and Omega owes Hadar $35,050.00 if it is not. (Omega Schedule, FNBB Ex. 192, p. 1; H. Klein, 35 Tr. 3278) Of the amount owed by Omega to Hadar, $20,550 is for amounts paid by matching checks of Telecasting to Hadar and Hadar to Omega. (Summary of Transfers, FNBB Ex. 188, p. 1; H. Klein, 34 Tr. 3212-13) The last two matching checks to Omega were on February 18 and March 10, 1981, after the Overmyer organization filed the Chapter 11 petition for Telecasting in this Court. (Summary of Matching Checks, FNBB Ex. 188, p. 17)\n*877 23.14. Service Company Assets. Jeebs owns a valuable leasehold on the 29th floor of 3 Park Avenue. (Connery Dep., Ex. 231, pp. 386-87; Raible Dep., Ex. 259, pp. 68-69) Mr. Connery estimated the value of that leasehold at $300,000. (Connery Dep., FNBB Ex. 231, p. 387) Jeebs also owns the lease on Apartment 22G at 4 Park Avenue, which is occupied by Elizabeth Overmyer, Mr. Overmyer's daughter. (Raible Dep., FNBB Ex. 259, p. 69; Omega Requests for Payment, Carrieri Ex. 36, pp. 2-4, 8-21) The rent on 4 Park Avenue for December, 1980, and January, 1981, was paid by checks from Telecasting to Hadar, which were used to fund matching checks from Hadar to Chemical Bank, which were, in turn, used to purchase bank checks payable to Century Operating Corporation. (Summary of Matching Checks, FNBB Ex. 188, last page; H. Klein, 34 Tr. 3210-11; Hadar Requests for Payment Nos. 1156 and 1157, Carrieri Ex. 62) The leases on the 29th floor of 3 Park Avenue and apartment 22G at 4 Park Avenue belong in equity to Telecasting.\n23.15. The Purchase of the Overmyer Farm by Weathervane Farms, Inc. On August 15, 1978, Weathervane Farms, Inc. acquired a large parcel of real estate in the Towns of New Castle and Yorktown in Westchester County, New York, from the Estate of Mabel M. Gabriel for $800,000. (Deed, FNBB Ex. 204) The property, on which Mr. and Mrs. Strang reside, consists of 263 acres containing four houses and a barn, and is contiguous to the property of Intermodal Terminals, Inc., on which Mr. Overmyer resides. (Weathervane Dep., FNBB Ex. 246, pp. 3-4, 28) At the closing on August 15, 1978, Mr. Strang delivered checks of Weathervane Farms, Inc. to the Estate of Mabel M. Gabriel in the amounts of $261,000, $764.20 and $493.33. (Checks 1002, 1003 and 1006, Weathervane Ex. 7, pp. 2, 4; Check Stubs 1002, 1003 and 1006, Weathervane Ex. 4; H. Klein, 36 Tr. 3360) He also delivered a Hadar check for $4,550. (Hadar Cash Disbursements Register MHT, Carrieri Ex. 3, p. 2, Check No. T012; H. Klein, 36 Tr. 3383) Mr. Strang had no idea where the money to cover these checks came from. (Weathervane Dep., FNBB Ex. 246, p. 26)\n23.16. Funds from Telecasting, Hadar, AGG and Omega. Weathervane Farms, Inc. has been making payments on a $500,000 mortgage and on the real estate taxes since August, 1978. (Weathervane Dep., FNBB Ex. 246, pp. 26-27; Carrieri Dep., FNBB Ex. 233, pp. 140-41) Out of total cash receipts of $738,919.46 shown on the books of Weathervane Farms, Inc., through March 31, 1981, $7,087.74 came from Telecasting, $55,647.66 came from Hadar, $94,646.25 came from AGG, and $25,846.34 came from Omega. (Summary, FNBB Ex. 205, p. 1; H. Klein, 36 Tr. 3370, 3375, 3380) The books of Telecasting, Hadar, AGG and Omega, some of which cover different periods, show higher amounts of $8,025.74 from Telecasting, $60,448.00 from Hadar, $118,146.25 from AGG and $47,266.34 from Omega. (H. Klein, 36 Tr. 3380-81) Of the money received by Weathervane Farms, Inc. from Hadar, $34,575.66 constituted matching checks from Telecasting to Hadar and Hadar to Weathervane Farms, Inc. (H. Klein, 36 Tr. 3377)\n23.17. Source of Funds for the Purchase. From July 26, 1978, through August 16, 1978, Weathervane Farms, Inc. had cash receipts of $271,390.01, consisting of $176,618.01 from NDS, $70,000 from Expediter, $22,500 from AGG and $2,272 from Hadar. (Weathervane Cash Receipts Journal, Weathervane Ex. 2; H. Klein, 36 Tr. 3359) During that period, $270,513.53 was used to purchase the farm. (Weathervane Cash Disbursements Journal, Weathervane Ex. 2; H. Klein, 36 Tr. 3360) Mr. Klein looked for an NDS check for $166,780.26 that made up part of the $176,618.01, but found that no copy of the check was included with the deposit slip, that the records of NDS produced by the Overmyer organization contained a gap at that period of time and that there was no general ledger, disbursements journal, bank statement, check, check stub or correspondence that would verify the money came from NDS. (H. Klein, 36 Tr. 3360-61)\n23.18. From Where Did the Other Funds of Weathervane Farms, Inc. Really Come? *878 The books of Weathervane Farms, Inc. show cash receipts of $183,168.01 from NDS. (Summary, FNBB Ex. 205, p. 1; H. Klein, 36 Tr. 3370) The accounting records of NDS that were produced during discovery by the Overmyer organization do not include the records of the $183,168.01 supposedly disbursed to Weathervane Farms, Inc., or show from where it came. (H. Klein, 36 Tr. 3360-61, 3363-64, 3372) NDS's books did show that at the time the Overmyer organization acquired NDS, NDS wired $325,000 into a new NDS bank account at Continental Bank in Garden City, Long Island, New York; that during the following two weeks four wire transfers totaling $160,000 were made to the Jeebs bank account at Bank Leumi on Fifth Avenue; and that in the following two months $24,000 more was wired to Jeebs. (H. Klein, 36 Tr. 3362-63; NDS Disbursement Journal, NDS Ex. 12, pp. 1-4; 10/28/77, 11/1/77, 11/2/77 and 11/9/77 Wire Transfer Instructions, NDS Ex. 9, pp. 15, 16, 17, 30) The Jeebs records with regard to the receipt and disposition of the $184,000 were never produced by the Overmyer organization. (H. Klein, 36 Tr. 3363) The Overmyer organization also failed to produce receipt and disbursement records of NDS for an April 24, 1978, mailing of the operating funds of the Atlanta warehouse to New York, which was ordered by Mr. Overmyer and caused the resignation of one of the directors of NDS. (4/26/78 Letter, NDS Ex. 56; H. Klein, 36 Tr. 3364) NDS obtained $85,272 of its funds from Hadar and $24,200 from AGG. (H. Klein, 36 Tr. 3364-65) Of the $85,272 received from Hadar, $69,950 came from Telecasting by matching checks from Telecasting to Hadar and Hadar to NDS. (H. Klein, 36 Tr. 3365) Neither Telecasting nor Hadar did any business with NDS. (Deauville/NDS [Edgerton] Dep., FNBB Ex. 252, pp. 13, 25) The books of Weathervane Farms, Inc. also show receipt of $236,850 from Expediter. (Summary FNBB Ex. 205, p. 1; H. Klein, 36 Tr. 3370) The only financial records produced by Expediter for the relevant time period of July, 1978, through February 1980, were balance sheets and income statements. (H. Klein, 36 Tr. 3366-67) These showed that Expediter had very limited income and was in a constant cash overdraft position (H. Klein, 36 Tr. 3367-68), making it most unlikely that $236,850 could really have come from Expediter. The detailed cash receipts and cash disbursements journals and general ledgers that are necessary to do a detailed study of the sources and applications of Expediter's funds to determine where the $236,850 really came from were suppressed by the Overmyer organization in direct violation of an order of this Court. (H. Klein, 36 Tr. 3367-69, 3372; Motion To Compel Granted 2/3/72, FNBB Ex. 154, p. 2, \u0e16 12) The Overmyer organization also failed to produce financial records of Peerless for the period October, 1977, through March, 1978, during which period bank statements of Peerless showed $4,690,000 of deposits and $4,822,000 of withdrawals, including wire transfers of $4,125,000 for which there was no support. (H. Klein, 36 Tr. 3373-74) For other periods of time, the Overmyer organization produced huge volumes of detailed Peerless financial records. (H. Klein, 36 Tr. 3374-75) Peerless received a total of $90,784 from Hadar, of which $78,084.75 represented matching checks from Telecasting to Hadar and Hadar to Peerless. (Hadar Sources and Applications, FNBB Ex. 182, p. 4; Summary of Matching Checks, FNBB Ex. 188, p. 1) Peerless also received $6,000 directly from Telecasting. (Meissner Dep., Ex. 232, p. 38) Telecasting never purchased any heaters or fireplace equipment from Peerless. (D. Overmyer Dep., FNBB Ex. 224, p. 117) During the same period of early 1978, AGG had bank accounts at Barclay's Bank and Continental Bank that were never recorded on the books of account of AGG. (H. Klein, 36 Tr. 3372-73) The Overmyer organization has turned over very few financial records of Telecasting for the period November, 1977, through June, 1978. The cash receipts and cash disbursements records are missing, and almost none of the cancelled checks and check stubs were turned over. (H. Klein, 36 Tr. 3373) Under the circumstances, it is a reasonable inference that the money for the purchase of the farm owned by Weathervane *879 Farms, Inc. was taken from Telecasting without consideration and with deliberate, actual intent to hinder, delay and defraud FNBB in the collection of obligations of TOC, DHO, ODS and Mr. Overmyer.\n23.19. Ownership of Jeebs and AGG. Weathervane Farms, Inc. owns either 80 or 85 percent of the Jeebs stock. (H. Klein, 36 Tr. 3379; 3/9/74 Jeebs Minutes, Raible Exs. 509, 510; Stock Certificate, Jeebs Minute Book, Raible Ex. 552; Connery, 25 Tr. 2404) Mr. Connery owns either five percent or 5.26 percent of the Jeebs stock. (3/19/74 Jeebs Minutes, Raible Exs. 509, 510; Stock Certificate, Jeebs Minute Book, Raible Ex. 550; Connery, 25 Tr. 2404) In October, 1974, in testimony under oath in the Southern District of New York, Mr. Connery lied about the ownership of Jeebs. He testified that Weathervane Farms, Inc. owned 100 percent of the stock. (Connery, 22 Tr. 2162, 2165-66) Jeebs owns 100 percent of the stock of AGG. (H. Klein, 36 Tr. 3379; Organization Chart, Connery Ex. 7) Ownership of AGG by Jeebs, however, has never been evidenced by Mr. Connery by the formal issuance of stock certificates. (Stock Certificates, AGG Minute Book, Raible Exs. 573-75) Mr. Connery and Mr. Overmyer used the multilevel corporate structure of having Weathervane Farms, Inc. own Jeebs and Jeebs own AGG, in an effort to isolate Weathervane Farms, Inc. from liability for the large debts of Jeebs and AGG to Hadar and Telecasting, with deliberate, actual intent to hinder, delay and defraud the honest creditors of Telecasting in general, and FNBB in particular in its efforts to collect the obligations of TOC, DHO, ODS and Mr. Overmyer. Moreover, there is such a unity of interest and ownership among Jeebs, AGG, Omega, Weathervane Farms, Inc. and Mr. Overmyer that the separate personalities of the five no longer exist and, if their acts are treated as those of each of them alone, inequitable results would follow.\n\n24. Mr. Overmyer's Personal Expenses\n\n24.1. The Bond in the Fidelity Deposit Case. On January 23, 1978, Hadar's bank account at Continental Bank was used to purchase a $50,000 cashier's check to purchase a bond to stay execution of the judgment obtained by Fidelity & Deposit Company of Maryland against Mr. and Mrs. Overmyer, personally, in November, 1974. (Hadar Cash Disbursements Register, Pl.Ex. 113, Continental Bank, 1/23/78; 1/23/78 Hadar Minutes, Raible Ex. 136; see Finding No. 36.12, infra) This cashier's check, plus wire transfers of $10,000 to RT Systems, $20,000 to NDS, $11,000 to Jeebs and $19,000 to Peerless, were matched by deposits of $50,000 from Peerless plus $60,000 from Telecasting. (Hadar Cash Disbursements Register, Pl.Ex. 113, Continental Bank, 1/23/78, 1/26/78 and 1/27/78; Hadar Cash Receipts Register, Pl.Ex. 113, Continental Bank, 1/5/78 and 1/24/78) This $50,000 cashier's check for Mr. Overmyer's personal expenses is a further offshoot of the $60,000 matching check scheme that was first intended to cover the down payment for RCA, but later diverted to related parties. (See Finding No. 22.4, supra; H. Klein, 34 Tr. 3201-03) Hadar minutes dated July 24, 1979, reflect a unanimous consent of the directors (Mr. and Mrs. Strang) to acknowledge and confirm to the Internal Revenue Service that this cashier's check represented a loan made to Mr. Overmyer. (7/24/79 Hadar Minutes, Raible Ex. 153) Hadar minutes dated January 23, 1978, record a meeting \"to consider the application of the use of the company's excess funds\" and a vote to use \"the amount of $50,000 out of surplus corporate funds\" for the bond for Mr. and Mrs. Overmyer, and to accept in return \"the five (5) year non-interest bearing note of Daniel H. Overmyer in favor of this Company.\" (1/23/78 Hadar Minutes, Raible Ex. 136, pp. 1, 2) On January 23, 1978, the prime rate of FNBB was eight percent. (Computer Printout, FNBB Ex. 275, p. 5) One week after Mr. Overmyer took $50,000 from Hadar to pay for the bond, the directors voted to borrow $8,000 from Ohio Citizens Trust Company at 13.35 percent interest. (2/1/78 Hadar Minutes, Raible Ex. 138) As of January 9, 1978, Hadar owed Jamieson Film Co. $9,875 with respect to lease H-1013. (1/9/78 Raible Memorandum, Raible Ex. 487; Raible Dep., FNBB Ex. 259, p. 235) *880 Despite Mr. Raible's efforts to have this obligation paid and despite a lawsuit by Jamieson, the amount remained completely unpaid on June 29, 1978, and has not been paid in full to this day. (1/9/78, 5/31/78 and 6/29/78 Raible Memoranda, Raible Exs. 487-89; Raible Dep., FNBB Ex. 259, pp. 235-40; H. Klein, 30 Tr. 2917-18) Mr. Overmyer and Mr. Connery created the January 23, 1978, Hadar minutes in 1979, after the Internal Revenue Service began investigating, in order to make it appear that the $50,000 was a loan rather than income to Mr. Overmyer.\n24.2. The Fees of Gilman, McLaughlin & Hanrahan. The firm of Gilman, McLaughlin & Hanrahan was retained by Mr. Overmyer to represent him in The First National Bank of Boston v. Daniel H. Overmyer, Civil Action No. 13892. (2/18/81 Letter, Tele Ex. 11) An agreement was reached between Mr. Hanrahan and Mr. Overmyer by which Mr. Overmyer would pay a $75,000 retainer fee to Mr. Hanrahan, of which $60,000 was payable on February 23, 1981, with the balance payable not later than ten days thereafter. (2/18/81 Letter, Tele Ex. 11) At the request of Mr. Overmyer and with Mr. Chi's approval (Chi Dep., FNBB Ex. 243, p. 54; Carrieri Dep., FNBB Ex. 233, pp. 94-95; Telecasting Request for Payment No. 020, Carrieri Ex. 22), a Telecasting check dated February 17, 1981, in the amount of $15,000 was used to acquire an official check from Chemical Bank payable to Gilman, McLaughlin & Hanrahan. (Telecasting Request for Payment No. 020, Carrieri Ex. 22) An additional $338.20 was debited to Telecasting's account to be added to $9,661.80 of other funds to acquire a second cashier's check in the amount of $10,000 to Gilman, McLaughlin & Hanrahan. (Telecasting Request for Payment No. 020, pp. 2-5, Carrieri Ex. 22; Carrieri Dep., FNBB Ex. 233, pp. 92-93) Another check dated February 23, 1981, in the amount of $15,000 was requested by Mr. Overmyer and Mr. Chi, and approved by Mr. Chi, to acquire another official check from Chemical Bank payable to Gilman, McLaughlin & Hanrahan. (Telecasting Request for Payment No. 39551, Carrieri Ex. 22) On March 4, 1981, Telecasting check number 1038 was used to acquire another official Chemical Bank check payable to Gilman, McLaughlin & Hanrahan, this one in the amount of $5,000. (Hadar Journal Voucher 3-9, p. 4, Pl.Ex. 115F) In total, $35,338.20 of Telecasting funds was paid directly to Gilman, McLaughlin & Hanrahan.\n24.3. Weston Hurd Fees. On July 24, 1981, Mr. Overmyer took $5,000 out of Omega Executive Services to pay Weston, Hurd, Fallon, Paisley & Howley to act as his personal counsel in this Court. (Omega Request for Payment for Check No. 1173, Carrieri Ex. 45, pp. 2-4)\n24.4. Mr. Overmyer's Use of Telecasting's Petty Cash. Mr. Overmyer obtained petty cash from Telecasting by having Mr. Chi request Mr. Carrieri to prepare a petty cash voucher to be signed either by himself or by Mrs. Overmyer. (Carrieri Dep., FNBB Ex. 233, pp. 87, 89; Telecasting Request for Payment No. 004, pp. 1-2, Carrieri Ex. 22; Chi 205 Exam, 47 Tr. 4599-4600, 4601-02; S. Overmyer Dep., FNBB Ex. 258, pp. 93-94) Mr. Carrieri then made out a Telecasting check to himself, cashed it, and gave the money to Mr. Chi to take to Mr. Overmyer. (Carrieri Dep., FNBB Ex. 233, pp. 87-88; Telecasting Request for Payment No. 004, p. 1, Carrieri Ex. 22) Except for some small amounts such as $20, $25 or $40, Mrs. Overmyer never received any of this cash. (S. Overmyer Dep., FNBB Ex. 258, pp. 66, 93) Mr. Chi instructed the Overmyer accountants to book all the petty cash payments to Mr. and Mrs. Overmyer to account number 0561, the Hadar account, on Telecasting's books. (Chi 205 Exam, 47 Tr. 4597-98; see Telecasting Request for Payment No. 004, p. 1, Carrieri Ex. 22) They were then booked to account number 0621, Mr. Overmyer's personal account, on Hadar's books. (Carrieri Dep., FNBB Ex. 233, p. 89; Hadar Journal Voucher 8-10, Pl.Ex. 115E; Hadar Journal Voucher 12-4, Pl.Ex. 115F) During calendar year 1980 alone, Mr. Overmyer took $37,235 in cash out of Telecasting through this petty cash scheme. (Hadar Journal Voucher 8-10, *881 Pl.Ex. 115E; Hadar Journal Voucher 12-4, Pl.Ex. 115F; Lynch, 17 Tr. 1617-23, 18 Tr. 1741-43) The practice continued after the filing of the Chapter 11 petition in this Court. Between February 10, 1981, and February 27, 1981, Mr. Overmyer took $2,085 from the Telecasting estate through Hadar petty cash. (Telecasting Requests for Payment, Carrieri Ex. 22, Checks Nos. 004 [$200 out of $389], 006 [$100 out of $400], 007 [$590], 016 [$170 out of $335.14], 39552 [$400], 1013 [$400] and 1019 [$225 out of $273.22]) Now that his use of Telecasting's money has been stopped by this Court, Mr. Overmyer uses the petty cash of Omega instead. (Carrieri Dep., FNBB Ex. 233, p. 88; H. Klein, 35 Tr. 3284-85; Sources and Uses of Omega Funds, FNBB Ex. 192)\n24.5. Matching Checks of $13,000 Paid from Telecasting to Mrs. Overmyer. On October 17, 1979, Telecasting wrote checks of $6,000 and $7,000 to Hadar, and Hadar wrote matching checks of $6,000 and $7,000 to Mrs. Overmyer. (Summary of Matching Checks, FNBB Ex. 188, p. 15; H. Klein, 34 Tr. 3208; Carrieri Dep., FNBB Ex. 233, pp. 64-65) Mrs. Overmyer did not remember ever receiving this money. (S. Overmyer Dep., FNBB Ex. 258, p. 75)\n24.6. Service Company Payments to Overmyer Family Members. The books of AGG and Omega show payments to or on behalf of members of the Overmyer family from May, 1978, through October, 1981, as follows:\n\n\n AGG Omega\nDaniel H. Overmyer $ 245,033.62 $ 60,270.22\nShirley C. Overmyer 196,319.05 4,007.94\nStuart K. Strang 1,572.29 -0-\nBarbara Overmyer Strang 20,243.08 -0-\nElizabeth Overmyer 41,024.00 5,721.00\nJohn Overmyer 3,122.50 400.00\nEdward Overmyer 2,495.85 416.00\n ____________ ___________\nTOTAL: $ 509,810.39 $ 70,815.16\n\n(Summary of Disbursements to Family Members, FNBB Ex. 193; H. Klein, 35 Tr. 3276, 3305-07, 3311-13) As of November 17, 1981, John Overmyer was 19, and Edward was 17 years old. (S. Overmyer Dep., FNBB Ex. 258, p. 3) Neither provided any services to AGG or Omega. (H. Klein, 35 Tr. 3313) From May, 1978, through January, 1979, AGG paid to Mr. Overmyer consulting fees totaling $31,000; thereafter it paid him no more consulting fees. (Summary of AGG Sources and Applications of Funds, FNBB Ex. 191, Section 3\u0e42\u0080\u0094Monthly Disbursements, pp. 18-21; H. Klein, 35 Tr. 3307-11) Conversely, AGG paid Mrs. Overmyer only $275.22 in consulting fees prior to January, 1978, but from January, 1978, through October, 1980, it paid her $91,276.97 in consulting fees. (Summary of AGG Sources and Applications of Funds, FNBB Ex. 191, Section 3 \u0e42\u0080\u0094 Monthly Disbursements, pp. 18-21; H. Klein, 35 Tr. 3307-11) Mrs. Overmyer never received the money shown on the AGG books as being paid to her. (S. Overmyer Dep., FNBB Ex. 258, pp. 35-36, 72-75) Mr. Overmyer started having checks made out to Mrs. Overmyer in January, 1979, to conceal the amount of income that he was receiving from AGG.\n24.7. Hadar Family Leases. Hadar entered into six leases with entities other than Telecasting: leases H-1022, H-1023, H-1026 and H-1046 are for automobiles operated by various Overmyer family members; lease H-1024 is for a Russian sable coat worn by Mrs. Overmyer; and lease H-1025 is for a yacht to Jeebs. (Summary of Family Leases, FNBB Ex. 167; Leases H-1022 to H-1026, H-1046, Tele Exs. 5-10) Mr. Overmyer controlled use of the yacht. (Raible, 4 Tr. 310-11) Mr. Overmyer testified that Mr. Raible decided Hadar should acquire the yacht. (D. Overmyer Dep., FNBB Ex. 224, pp. 59-60) This testimony was not true. In fact, after Mr. Raible decided that Hadar could acquire the yacht, Mr. Overmyer decided that Hadar would acquire it. (Raible Dep., FNBB Ex. 259A, p. 389) The family leases were all written at rates less than the Overmyer Formula (H. Klein, 32 Tr. 3057-58), even though the borrowing resolutions for the automobile loans for leases H-1026 and H-1046 provided that the automobiles were to be leased \"under terms and conditions which will yield this Company [Corporation] not less than its average rate of return on similar investments\" (8/30/79 Hadar Minutes, Raible Ex. 156, p. 1; 2/22/80 Hadar Minutes, *882 Raible Ex. 165, p. 1). Not that it mattered. Hadar never received payment either from Mrs. Overmyer or from Jeebs with regard to the family leases. (H. Klein, 30 Tr. 2862) On top of that, Hadar paid for the maintenance and storage of the yacht. (H. Klein, 33 Tr. 3144)\n24.8. Mr. Overmyer's Personal Account with Hadar. Mr. Overmyer's personal account with Hadar, account number 0620, shows a balance forward of $327,298.88 owed by Hadar to Mr. Overmyer on August 31, 1975, and a closing balance of $144,000.78 owed by Hadar to Mr. Overmyer on March 31, 1981. (Hadar General Ledger, Pl.Ex. 114, 1981 Account No. 0620 and 1976-1978 Account No. 0620) The opening balance represents a contribution to capital that was made before Mr. Raible's association with Hadar. (Raible Dep., FNBB Ex. 259, p. 201) Mr. Overmyer claims that it was a loan, but there was no note, no agreement as to interest and no agreed due date. No interest has been requested or paid, repayment has never been requested and Mr. Overmyer was never concerned about repayment even when Hadar sold all of its assets in 1973. (D. Overmyer Dep., FNBB Ex. 224, pp. 85-89) If it really were a legitimate loan, there would have been no need to create notes covering a $50,000 \"loan\" on January 23, 1978, and a $35,000 \"loan\" on March 6, 1981 (2/23/78 Hadar Minutes, Raible Ex. 136; 3/6/81 Hadar Minutes, Raible Ex. 174), because those sums would simply have been reductions of the \"loan\" from Mr. Overmyer to Hadar. (Cf. D. Overmyer Dep., FNBB Ex. 224, p. 85) In the initial set of schedules filed by Hadar, the Overmyer organization compounded the situation by listing the opening balance on Mr. Overmyer's account of $327,298.88 and the closing balance on his account of $144,000 (rounded), as if they were two separate claims of Mr. Overmyer. (8/81 Hadar Schedules, Raible Ex. 6, p. 20) After inquiry about the double counting on November 10, 1981, during Mr. Raible's deposition (see Raible Unredacted Dep., FNBB Ex. 262E, pp. 401-02), the Overmyer organization filed new schedules listing only the closing balance of $144,000 (12/3/81 Hadar Schedules, Carrieri Ex. 60, p. 18). The $327,298.88 was a contribution to capital, not a loan. Moreover, whatever its nature, the $327,298.88 obligation was extinguished in its entirety on August 30, 1968, when it was assigned to DHO to offset in part an obligation of Mr. Overmyer to ISLI in the amount of $410,446.12. (8/30/68 Hadar Minutes, Raible Ex. 88) Hadar's practice of setting off Mr. Overmyer's obligations against the $327,298.88 opening balance was improper; Mr. Overmyer is liable to Hadar for at least the amount of $183,298.10 ($327,298.88 minus $144,000.78) that was improperly set off.\n24.9. Mr. Overmyer's Personal Account with Telecasting. Mr. Overmyer has owed Telecasting $14,956.07 on his personal drawing account at least since 1973, and has never paid a penny of it. (Chi 205 Exam, 47 Tr. 4609; Ernst & Whinney Telecasting Financials, FNBB Ex. 222, p. 5; Foley, 42 Tr. 3975)\n\n25. The General Electric Settlement Fraud\n\n25.1. The General Electric Lawsuit. General Electric Company filed suit in New York state court on September 3, 1976, against ISLI for recovery of the balance due on equipment purchased from General Electric Company by ISLI that was covered by lease H-1002 and was previously the subject of ISLI lease number XXXXXXXXXX to Telecasting. (Raible, 7 Tr. 656-57; 6/19/79 Settlement Agreement, Pl.Ex. 123, p. 2; H. Klein, 33 Tr. 3099-3101; ISLI Lease File, FNBB Ex. 111) Subsequently, General Electric Company joined Hadar as a defendant because of the assignment of the leases from ISLI to Hadar, and at the time the lawsuit was settled, both Hadar and ISLI were defendants. (Raible, 7 Tr. 657-58) On September 14, 1978, General Electric Company obtained a judgment against ISLI in the Supreme Court of the State of New York, County of New York. (6/19/79 Settlement Agreement, Pl.Ex. 123, p. 2) On September 27, 1978, General Electric Company filed a petition for reclamation of the equipment in the Telecasting XI. (6/19/79 Settlement Agreement, Pl.Ex. 123, *883 p. 3) In actuality, Telecasting had been paying rent to ISLI and Hadar, and was not behind in its payments. (Raible Dep., FNBB Ex. 259, p. 98) Although Telecasting never stopped paying rent (Raible Dep., FNBB Ex. 259, p. 99), ISLI and Hadar did not pay General Electric, which resulted in an indebtedness of $200,000 (Raible Dep., FNBB Ex. 259, p. 99).\n25.2. The Settlement. The litigation was ultimately settled by a June 19, 1979, settlement agreement to which Telecasting was a party. (Raible, 7 Tr. 658; Connery, 25 Tr. 2383; 6/19/79 Settlement Agreement, Pl.Ex. 123) The settlement agreement provides that Telecasting is to pay General Electric Company the sum of $150,000 plus 13 percent interest, payable in a single initial payment of $30,000 and 36 equal monthly payments of $4,043.28. (6/19/79 Settlement Agreement, Pl.Ex. 123) A document attached to the settlement agreement purports to transfer to General Electric Company from Hadar all of its rights to payments from Telecasting for the equipment sold by General Electric Company to ISLI. (6/19/79 Settlement Agreement, Pl.Ex. 123; Connery, 25 Tr. 2384-85) At the same time Telecasting was making settlement payments to General Electric Company, Hadar was charging Telecasting rentals for the General Electric equipment. (Raible, 7 Tr. 659, 12 Tr. 1119; Connery, 15 Tr. 1467) Telecasting's payments to General Electric (Raible, 7 Tr. 659, 12 Tr. 1119), including the $30,000 down payment called for in the settlement agreement (H. Klein, 33 Tr. 3095) and the monthly payments to General Electric of $4,043.28 (H. Klein, 33 Tr. 3098), total $82,562.64. (H. Klein, 33 Tr. 3098-99) Mr. Overmyer caused Telecasting to become a party to the settlement agreement, to make the settlement payments and to pay rent to Hadar for the equipment. (Raible, 12 Tr. 1118) Telecasting, ISLI and Hadar were represented in the settlement negotiations and closing by Mr. Connery, who represented all three entities. (Raible, 7 Tr. 663-64; Connery, 25 Tr. 2384, 2456) Despite Telecasting making payments to General Electric for the equipment, Hadar received title to the equipment (Raible, 11 Tr. 1041-42), and never gave Telecasting credit for the double payments to General Electric or for the rental payments to Hadar (Raible, 12 Tr. 1119, 7 Tr. 660; Connery, 15 Tr. 1467-68). To date, Hadar's proof of claim has not been amended to reflect the double payments Telecasting made to General Electric Company (Connery, 20 Tr. 1933-34), even though Mr. Raible, Hadar's chief operating officer, admitted at the very outset of his deposition on October 29, 1981, that \"Telecasting definitely is due a credit.\" (Raible Unredacted Dep., FNBB Ex. 262B, p. 184).\n\n26. The Studio Lease Fraud\n\n26.1. 1969 Studio Lease. On May 19, 1969, Telecasting and DHO entered into a lease commencing June 1, 1969, and terminating May 31, 1986. (6/1/69 Studio Lease, FNBB Ex. 225) The 1969 lease covers the property upon which Telecasting's studio is located at 300 South Byrne Road in Toledo. (Connery, 21 Tr. 1981-82) The monthly rental called for by the 1969 lease was very favorable to Telecasting. (Dorfner Dep., FNBB Ex. 240, p. 20) The rental was $1,312.50 per month for the first five years from June, 1969, to May, 1974; $1,575 per month for the second five years from June, 1974, to May, 1979; and $1,837.50 per month for the following seven-year period from June, 1979, to May, 1986. (6/1/69 Studio Lease, FNBB Ex. 225; Foley, 41 Tr. 3893; Connery, 21 Tr. 1982) The former president and chief operating officer of Telecasting from 1965 through March, 1980, Mr. Arthur Dorfner, confirmed that the 1969 lease had not expired as of December, 1981. (Dorfner Dep., FNBB Ex. 240, pp. 3-4, 8-9, 20-21)\n26.2. The Invisible Interstate-Telecasting and Mid American-Telecasting Leases. After the execution of the 1969 lease, DHO, in the mid 1970's, leased the studio property to Interstate which, in turn, entered into another purported lease with Telecasting. (Raible, 7 Tr. 606-10) Subsequently, DHO leased the property to Mid-American, which entered into yet another purported lease with Telecasting. (Raible, 7 Tr. 606-12) In 1977, Mr. Overmyer ordered Mr. Dorfner to *884 undertake renegotiation of the property lease despite the existence and validity of the 1969 lease (Dorfner Dep., FNBB Ex. 240, pp. 21-22), which Mr. Dorfner believed still to be valid and in effect. (Dorfner Dep., FNBB Ex. 240, p. 23) Mr. Dorfner \"went through the motions of attempting to discuss it\" with Mr. John Adams, the principal administrator of DHO, the landlord of the property. (Dorfner Dep., FNBB Ex. 240, p. 23) Mr. Overmyer, on March 8, 1977, in the Telecasting XI, testified as follows:\nQ. Now, what kind of a lease payment is made by Telecasting to Interstate?\nA. The lease payment that is made by Telecasting to Interstate is the same lease payment that was made by Telecasting to the D.H. Overmyer Company. The lease, I think, was originally a ten-year lease. It was executed in 1968 or 1969 and it may have options, I don't know. The lease rental was $1,700 a month.\nQ. For the studio?\nA. For the studio.\n(D. Overmyer, 43 Tr. 4108-10) A valid lease between Telecasting and either Interstate or Mid-American remains unseen. (Foley, 42 Tr. 3982, 3963, 3967)\n26.3. More Purported DHO-Telecasting Leases. DHO later entered into two more purported leases with Telecasting. (Connery, 21 Tr. 1986-87, 1990; 6/80 DHO-Telecasting Lease, Tele Ex. 19; 11/20/80 DHO-Telecasting Lease, Tele Ex. 20) The June, 1980 lease, on a one-sheet, month-to-month rental agreement form for warehouse space, recites that it is to be effective on a month-to-month basis, commencing June 1, 1980, at a rental of $11,000 per month. (6/80 DHO-Telecasting Lease, Tele Ex. 19) The November, 1980 lease, on a four-sheet form, recites that it is to be effective from December 1, 1980, to November 30, 1981, at a rental of $7,000 per month. (11/20/80 DHO-Telecasting Lease, Tele Ex. 20)\n26.4. Alternative Available Premises. Mr. Emil T. Meissner, former business manager, vice-president and controller of Telecasting from February, 1979, to March 1, 1981 (Meissner Dep., FNBB Ex. 232, p. 5), had a discussion with Mr. Overmyer during this period about the excessive rent charged Telecasting for the studio. (Meissner Dep., FNBB Ex. 232, p. 54) Mr. Meissner had investigated available properties in the Toledo area, and found that he could lease more space across the street in a definitely superior building for only $2,500 to $2,700 per month. (Meissner Dep., FNBB Ex. 232, pp. 55-56) The excessive rent for the studio was not reduced as a result of Mr. Meissner's discussion with Mr. Overmyer. (Meissner Dep., FNBB Ex. 232, p. 57)\n26.5. Excessive Rental Charges to Telecasting. Rental payments for the period September 1, 1974, to November 30, 1978, were made to Interstate; for the period December 1, 1978, to February 28, 1980, to Mid American; and for the period from January, 1981, to February 17, 1981, to DHO. (Foley, 41 Tr. 3948) No evidence of rental payments by Telecasting for the period March, 1980, to January, 1981, could be located. (Foley, 41 Tr. 3952-53) Telecasting voucher request number 132236, dated January 15, 1979, for payment to Mid American, formerly Interstate Distribution, recites as a description of the request \"Rental on Station Building for the month of Feb. 1979 Amt. Billed *7,000.00 (*Approved amount per contract dated May 19, 1969 and 1,575.00 for period June 1974 through May 1979).\" (Ernst & Whinney Work Papers, FNBB Ex. 223, p. 40) The amount of rent that Telecasting paid for the studio premises from September 1, 1974, to February, 1981, was $357,962.50. (Foley, 41 Tr. 3892, 3950; Ernst & Whinney Work Papers, FNBB Ex. 223, pp. 2-3) Based upon the rental payments provided for in the 1969 lease, Telecasting should have paid $128,362.50 in rent during that period. In other words, Telecasting overpaid rent in an amount of $229,600. (Foley, 41 Tr. 3895; Ernst & Whinney Work Papers, FNBB Ex. 223, pp. 2-3)\n26.6. The Studio Lease Case Was a Deliberate Fraud on the Court. Mr. Overmyer, in sworn testimony in 1977, although claiming that payment was to be made to *885 Interstate, stated that Telecasting was making to Interstate the \"same lease payment that was made by Telecasting to the D.H. Overmyer Company.\" (D. Overmyer, 43 Tr. 4108-10) Mr. Connery knew that the 1969 lease between Telecasting and DHO was still valid, did not expire until 1986 and provided for a rental of $1,837.50 per month. (Connery, 21 Tr. 1981-84; 2/17/81 Connery Letter to Balantzow, Tele Ex. 18, p. 3) The Chapter 11 petition of Telecasting, which Mr. Overmyer and Mr. Connery caused to be filed in this Court, stated that Telecasting's studio rent was paid in full. (Connery, 21 Tr. 1990, 1976-77; 2/17/81 Connery Letter to Balantzow, Tele Ex. 18, p. 3) Mr. Connery helped Mr. Daniel Zimmerman, counsel for DHO, to prepare and present to this Court on August 8, 1981, an application to assume or reject an executory contract (the \"Studio Lease Case\"), in which DHO claimed rentals from Telecasting totaling $98,000 for a period for which Mr. Connery knew no rent was due. (Connery, 21 Tr. 1980-93, 23 Tr. 2180) The prosecution of the Studio Lease Case and the continued efforts of DHO's counsel to obtain a judgment from the Court, despite trying to withdraw from this adversary proceeding, constitute a willful fraud on this Court.\n\n27. Other Improper Telecasting Payments\n\n27.1. Telecasting Payments to Hadar Vendors. Telecasting made the following payments to vendors either for items that it was leasing from Hadar, or for items that members of the Overmyer family were leasing from Hadar:\nLease H-1002 \u0e42\u0080\u0094 Telecasting paid to General Electric $82,567.64 during the period September 1, 1978, to January 31, 1981. (Summary of First Set of Assumptions, FNBB Ex. 218; H. Klein, 33 Tr. 3091-3101; see Findings Nos. 25.1-25.2, supra)\nLeases H-1020 and H-1008 \u0e42\u0080\u0094 Telecasting made several payments to Design Space International for obligations to Design Space International for mobile office trailers that Hadar had obtained and leased to Telecasting. (H. Klein, 31 Tr. 3005-07; Summary of Equipment Leases, FNBB Ex. 142)\nLeases H-1021, H-1026 and H-1046 \u0e42\u0080\u0094 Telecasting made several payments to Ohio Citizens (H. Klein, 31 Tr. 2669) for Hadar obligations to Ohio Citizens for two AMC vehicles that Hadar obtained and leased to Telecasting (H. Klein, 31 Tr. 2969; Summary of Equipment Leases, FNBB Ex. 142). This is the same lease that covers two of Telecasting's own vehicles. (See Finding No. 18.6, supra) These payments also covered Hadar obligations with respect to two of the cars leased by Hadar to Mrs. Overmyer. (H. Klein, 37 Tr. 3480-81)\nLeases H-1022, H-1023 and H-1025 \u0e42\u0080\u0094 Telecasting made seven payments totaling $4,881.24 to Continental Bank for two cars leased to members of the Overmyer family and the yacht leased to Jeebs and used by Mr. Overmyer. (H. Klein, 37 Tr. 3474-75, 3479-80)\nLease H-1034 \u0e42\u0080\u0094 Telecasting paid $2,940.07 to Tiffin Scenic Studios, as payment in full, including the costs assessed against Hadar in a lawsuit, for the drapery system that Hadar had leased to Telecasting. (H. Klein, 31 Tr. 2965-66; 2968-69)\nLease H-1037 \u0e42\u0080\u0094 Telecasting paid Philips Appliance directly for the air conditioner that it was leasing from Hadar. (Raible, 10 Tr. 949-50; H. Klein, 29 Tr. 2836-40) Mr. Shock and Mr. Meissner had to hand deliver a check to Philips Appliance with an apology for the delay in payment, because Philips Appliance was an advertiser of the station and had threatened to cancel its advertisement if the Telecasting debt was not cleared. (Raible, 10 Tr. 949-50)\nLease H-1039 \u0e42\u0080\u0094 Telecasting paid directly to City Loan the two-month advance rental payment required by the lease agreement between Hadar and City Loan. (H. Klein, 31 Tr. 2947-48) After Telecasting paid the $435.28 deposit to City Loan, Hadar leased the equipment to Telecasting and required Telecasting to pay Hadar a deposit of $2,620. (H. Klein, 31 Tr. 2947)\nLease H-1040 \u0e42\u0080\u0094 Telecasting paid to Station Business Systems the $2,000 down payment that was required to be paid by Hadar based on the lease between Hadar and Station *886 Business Systems. (H. Klein, 31 Tr. 2927-31) After Telecasting paid the required down payment to Station Business Systems, Hadar leased the equipment to Telecasting, and required Telecasting to pay Hadar a deposit of $15,048. (H. Klein, 31 Tr. 2926)\nLeases H-1043, H-1044 and H-1045 \u0e42\u0080\u0094 Telecasting made several installment payments to Hundred East, totaling $20,610.27, for equipment that Hadar was leasing to Telecasting. (H. Klein, 33 Tr. 3102)\n27.2 Weathervane Farms Storage Charges. The barn located on the Weathervane Farms premises is used to store documents for various Overmyer-related entities with Weathervane Farms, Inc. charging those companies a rental fee. (S. Strang Dep., FNBB Ex. 246, pp. 15, 50) An agreement between Telecasting and Weathervane Farms, Inc., effective June 15, 1979, provided for the lease of 875 square feet in Building No. 2 of Weathervane Farms, Inc., at a rate of $3.20 per square foot per year, with the total charge being $233.33 per month for the period ending October 31, 1980. (Rental Agreement, FNBB Ex. 247) A second agreement dated November 1, 1980, was entered into between the parties, providing for an increase in the space rented from 825 square feet to 1,200 square feet, bringing the total monthly payments to $320. (Rental Agreement, FNBB Ex. 247) While the two rental agreements show square footage rented to Telecasting by Weathervane Farms, Inc. to be 875 and 1,200, the documents that were obtained from the 3 Park Avenue office and the studio in Toledo, as well as from Weathervane Farms, Inc., are now being stored in various file cabinets that cover a floor area of approximately 32 square feet. (H. Klein, 36 Tr. 3376-77) Mr. Raible, based on his considerable experience in estimating warehouse space requirements (Raible Dep., FNBB Ex. 259, pp. 51-52), estimated that the necessary space to store all of these documents was approximately 100 square feet, including allowance for normal aisle space and the capability of opening drawers. (Raible, 11 Tr. 1037) It was Mr. Raible's opinion that Telecasting was billed for more space than was necessary to store its documents. (Raible, 11 Tr. 1038) Telecasting paid a total of $8,025.74 to Weathervane Farms, Inc. for the rental of barn space. (H. Klein, 36 Tr. 3381) Based on 100 square feet of storage space, the correct charge from June 15, 1979, through January 31, 1981, is only $520.\n\n28. Bankruptcy Finding\n\n28.1. Insolvency. From August 31, 1977, through February 6, 1981, the assets of Telecasting consisted of some or all of the following categories:\n(a) cash and short-term investments;\n(b) trade accounts receivable;\n(c) other receivables;\n(d) unamortized film contract rights;\n(e) prepaid expenses;\n(f) escrow deposit;\n(g) leasehold improvements and equipment; and\n(h) receivables from affiliates.\n(Ernst & Whinney Statements of Assets and Liabilities, FNBB Ex. 222, p. 2) Telecasting's receivables from affiliates may not be assigned any material value, because they are principally owing from affiliates in bankruptcy. (Ernst & Whinney Statements of Assets and Liabilities, FNBB Ex. 222, p. 5; Foley, 41 Tr. 3883-84) The fair salable value of Telecasting's assets may be equal to or less than their book values, but it is not greater than their book values due to (1) the specialized nature and limited market for its owned equipment and leasehold improvements (Bond, 13 Tr. 1181, 1188), (2) the cost and expense involved in collecting receivables, (3) the liabilities and restrictions inherent in film contract rights (Ernst & Whinney Statements of Assets and Liabilities, FNBB Ex. 222, p. 5), and (4) the difficulty or impossibility of retrieving prepaid expenses. The maximum fair salable values of Telecasting's assets as of August 31, 1977, 1978, 1979 and 1980, and February 6, 1981, were:\n(a) $838,779;\n(b) $986,785;\n(c) $2,897,306;\n\n*887 (d) $2,625,398; and\n(e) $1,952,492, respectively.\n(Ernst & Whinney Statements of Assets and Liabilities, FNBB Ex. 222, p. 9) The liabilities of Telecasting as of each of the foregoing dates were equal to or greater than:\n(a) $4,991,907;\n(b) $5,590,826;\n(c) $7,951,171;\n(d) $8,710,038; and\n(e) $9,702,082, respectively.\n(Ernst & Whinney Statements of Assets and Liabilities, FNBB Ex. 222, p. 9; J. Klein, 42 Tr. 3997-99) The liabilities of Telecasting exceeded the fair salable value of its assets as of each of the foregoing dates by more than the following amounts:\n(a) $4,153,128;\n(b) $4,604,041;\n(c) $5,053,865;\n(d) $6,084,910; and\n(e) $7,749,590, respectively.\n(Ernst & Whinney Statements of Assets and Liabilities, FNBB Ex. 222, p. 9; J. Klein, 42 Tr. 3997-99, 4004) From August 31, 1977, continuously through February 6, 1981, Telecasting was hopelessly insolvent. (J. Klein, 42 Tr. 4002)\n28.2 Insufficient Capital To Operate Telecasting's Business and Incurrence of Debt Beyond Its Ability To Pay. From August 25, 1976, through November 30, 1980, Telecasting derived approximately $15,000,000 in revenues, and disbursed all except $175,000 of such revenues for operating expenses. (J. Klein, 42 Tr. 4005) During the Telecasting XI, Telecasting expended substantially all of its revenues, and simultaneously incurred millions of dollars of indebtedness for which it had no source of payment. (Ernst & Whinney Statements of Assets and Liabilities, FNBB Ex. 222; J. Klein, 42 Tr. 4006-07; compare Telecasting Chapter XI Petition, FNBB Ex. 431; with Telecasting Chapter 11 Statement of Affairs, Tele Ex. 17) From August 24, 1976, through November 30, 1980, Telecasting's cash balances were totally inadequate to pay its bills. (J. Klein, 42 Tr. 4007) Telecasting was late in making payroll tax deposits, and had to reverse checks that had been issued due to lack of funds. (J. Klein, 42 Tr. 4007-08) Telecasting needed from $200,000 to $300,000 cash per month to fund its ongoing operations adequately, but had only between $740 and $137,000 cash on hand. (J. Klein, 42 Tr. 4009-11) Given a 60-day collection period, on average, for Telecasting's receivables and a weekly payroll of approximately $45,000 in addition to its other expenses and small cash balances, Telecasting suffered tremendous hardships to meet payrolls and operating costs. (J. Klein, 42 Tr. 4008) It is inconceivable that Telecasting's management, headed by Mr. Overmyer, was not aware of such hardships and Telecasting's incurrence of debt it could not repay from August 25, 1976, through February 6, 1981.\n28.3. Actual Intent to Defraud. Mr. Overmyer filed the Telecasting XI to prevent FNBB from having a state court receiver appointed for Telecasting to prevent waste and wrongful transfers of assets. (D. Overmyer Affidavit, FNBB Ex. 431) FNBB, as well as the creditors listed on Telecasting's Chapter XI petition, have been creditors of Telecasting from August 24, 1976, to date. (Compare Telecasting Chapter XI Petition, FNBB Ex. 431; with Telecasting Chapter 11 Statement of Affairs, Tele Ex. 17) Thereafter, Telecasting entered into purported leases with Hadar for unfair consideration and without disclosure to or approval by the Bankruptcy Court in New York. (Connery, 20 Tr. 1895-96, 21 Tr. 1967-68) All of the various obligations and payments incurred by Telecasting to other Overmyer companies after the filing of the Telecasting XI were incurred with actual intent to defraud FNBB.\n28.4. No Basis For Relief From the Automatic Stay. The vast majority of equipment covered by the purported leases is specialized and has a very thin market. (Bond, 13 Tr. 1154, 1180-81) There is no evidence in the record showing depreciation or lack of maintenance of the equipment. Hadar did not show any loss arising out of the continuation of the automatic stay. *888 There is no evidence to show that Hadar would be any better off if it had possession of the specialized equipment. Indeed, if Hadar were to prove that the purported leases are valid, it appears that Hadar would ultimately be better off without relief from the stay, because it would then be able to assert an administration claim against Telecasting for its use of the equipment for the entire duration of the Telecasting 11. Clearly, the equipment covered by the purported leases is necessary to an effective reorganization. It comprises substantially all of the equipment used by Telecasting in the operation of its business, and is specialized. (Bond, 13 Tr. 1155; Raible, 4 Tr. 350-51)\n28.5. No Basis To Accelerate. Time To Accept or Reject Purported Leases. Hadar does not have a customer for the equipment covered by the purported leases it is seeking to enforce. (Raible, 4 Tr. 297) Some of the equipment is no longer manufactured, and some of its manufacturers have gone out of business. (Bond, 14 Tr. 1286) In any event, there is a very thin used equipment market in the broadcasting industry, because television equipment is specially built and fabricated for use by a given broadcasting facility. (Bond, 13 Tr. 1180-81, 14 Tr. 1249-50) The vast majority of the components covered by the purported leases is specialized. (Bond, 13 Tr. 1154) Hadar offered no evidence to show any depreciation of the equipment covered by the leases, and offered no evidence showing it will suffer any prejudice if Telecasting is not compelled now to accept or reject the purported leases.\n28.6. No Basis for Reclamation. Hadar offered no evidence showing that it demanded in writing reclamation of any goods within ten days after Telecasting received them from Hadar.\n\n29. The Overmyer-Connery Control Machine\n\n29.1. Mr. Overmyer's Use of a Deceptive Corporate Network To Disguise His Control. Mr. Overmyer exercises control through a series of related corporations headquartered at 3 Park Avenue. (Connery, 20 Tr. 1868-69; Organization Charts, Connery Exs. 4-10) These corporate entities were established with the assistance of Mr. Connery (Connery, 15 Tr. 1388-92, Connery, 22 Tr. 2165, Connery, 23 Tr. 2302-06; Connery Dep., FNBB Ex. 231, pp. 92-93), and, at least since the time Mr. Overmyer filed the Warehouse XI in 1973, were structured so that Mr. Overmyer could claim to have neither any legal nor equitable interest in the companies. He could also contend that his only relationship with some of the companies was as an unpaid \"consultant.\" (D. Overmyer Dep., FNBB Ex. 224, pp. 36-38; D. Overmyer Dep., Pl. Ex. 139A, pp. 18-20, 32-33, 41-42, 45-46, 96-97, Pl. Ex. 139B, pp. 151-52; 1/4/79 Letter, FNBB Ex. 209) He and his agents made such representations on numerous occasions, including filings with federal agencies such as the Federal Communications Commission. (1/4/79 Letter, FNBB Ex. 209; Application of Manning Telecasting, FNBB Ex. 211)\n29.2. Pervasive Overmyer Control. Mr. Overmyer made the decision to have so many corporations at 3 Park Avenue, and was the controlling force behind all of those corporations. (Raible, 8 Tr. 733) Mr. Overmyer controls all decisions made on behalf of Overmyer organizations with offices at 3 Park Avenue (Lynch, 16 Tr. 1585-86; Connery, 20 Tr. 1867-68), as he has always ultimately done, except for the period Mr. Herzog was acting as receiver of some of the warehouse companies (Connery, 20 Tr. 1868-69). In particular, Mr. Overmyer controls, and has controlled, DHO (Raible, 4 Tr. 338, 7 Tr. 614-15, 623), RT Systems (Raible, 4 Tr. 338), Interstate Distribution Services (Raible, 6 Tr. 580-82), Mid American Warehouse, Inc. (Raible, 7 Tr. 605), Jeebs (Raible, 7 Tr. 622), AGG (Raible, 7 Tr. 622), Omega (Raible, 7 Tr. 623), Deauville Private Rental Homes, Inc. (Raible, 8 Tr. 733), Weathervane Farms, Inc. (Connery, 20 Tr. 1867-68; Starr Dep., FNBB Ex. 241, pp. 11-14), Intermodal Terminals, Inc. (Lynch, 16 Tr. 1585-86; Connery Dep., FNBB Ex. 231, pp. 20-21), and, to the extent they have any existence, ISLI and ODS (Raible, 7 Tr. 621-22). Until March, 1981, Mr. Overmyer controlled *889 Telecasting. (Raible, 7 Tr. 622) Mr. Overmyer made all of the major decisions in connection with Telecasting in the nonbroadcasting area, and would on occasion make broadcast decisions as to the selection of programming. (Connery, 21 Tr. 2013-14) He made any important decisions about the acquisition of equipment by Hadar for use by Telecasting (Raible, 1 Tr. 338-39), and made the ultimate decision whether to lease or purchase equipment for Telecasting (Raible, 9 Tr. 795). Mr. Overmyer also directed and supervised the General Electric, ISLI, Hadar and Telecasting settlement. (Raible, 7 Tr. 658) In all of his controlled entities, Mr. Overmyer separates operating functions, bookkeeping functions and the receipt and disbursement of funds. (Raible, 7 Tr. 619-20) Mr. Overmyer individually controls each of those functions in all of his controlled entities. (Raible, 7 Tr. 620-21)\n29.3. Giving Apparent Authority To Individuals Actually Controlled By Mr. Overmyer. Upon establishment or activation of these corporations, Mr. Overmyer installed members of his family or employees of his organization into the positions which would normally evidence authority and control over the corporation's activities, i.e., the officerships and directorships. (See, e.g., Organization Charts, Connery Dep., Ex. 10) The employees continued to report to Mr. Overmyer on all subjects, however. (Raible, 7 Tr. 620-21; Connery, 20 Tr. 1867-69; Starr Dep., FNBB Ex. 241, pp. 11-14, 17-18) The Overmyer family members, moreover, engaged in little or no activity in their putative roles as corporate executives. (See Connery Dep., FNBB Ex. 231, pp. 227-32) For example, Barbara Overmyer Strang, Mr. Overmyer's daughter, and Stuart K. Strang, her husband, were at various times directors and senior officers of Deauville Private Rental Homes, Inc., one of the Overmyer companies. (Organization Charts, Connery Dep., Ex. 10; Deauville Minute Book, FNBB Ex. 261) But neither of them had any knowledge regarding the nature or extent of Deauville's business activities (B. Strang Dep., FNBB Ex. 235, p. 23), and Mr. Strang was not even aware of whether he was a director or officer of Deauville (S. Strang Dep., FNBB Ex. 234, p. 24). Mrs. Shirley C. Overmyer is designated as one of the directors of RT Systems, a publicly held company controlled by Mr. Overmyer. (S. Overmyer Dep., FNBB Ex. 258, pp. 21-22) Although she claimed to have attended meetings of RT Systems' board of directors, she did not know whether RT Systems owned any assets, how many employees it had, what its fiscal year was or whether it had any contractual relationships with other Overmyer entities; she could not identify any officers of RT Systems; and she had no knowledge of its most recent revenues or even whether it had made a profit last year. (S. Overmyer Dep., FNBB Ex. 258, pp. 22-26) Mr. Raible, who has served upon boards of directors since December of 1975 with Mr. Overmyer, candidly admitted that he had never cast a vote contrary to that cast by Mr. Overmyer (Raible, 4 Tr. 362-63), and that, although designated president of Jeebs, president of AGG and vice-president of Omega, he reports in all such capacities directly to Mr. Overmyer (Raible, 6 Tr. 569). Mr. Overmyer personally assumed the tax liability of AGG (which had been threatened against Mr. Raible) on the basis of a sworn affidavit that he had at all times been the one and only individual who ever controlled AGG or had responsibility for paying its bills. (Raible, 8 Tr. 731; 8/17/81 D. Overmyer Affidavit, Raible Ex. 809)\n29.4. Overmyer Family Member's Apparent Authority Is Misleading. The Strangs were the only directors of the plaintiff Hadar. (12/8/75 Hadar Minutes, Raible Ex. 131; 8/81 Hadar Schedules, FNBB Ex. 176, Item 21[a]) In addition, Mr. Strang has been Hadar's nominal president and treasurer for the past several years, and Mrs. Strang has been its secretary for a similar period. (12/8/75, 5/8/77, 3/13/78 and 11/1/78 Hadar Minutes, Raible Exs. 131, 135, 140, 145) Mrs. Strang, however, could not even recall that she was an officer or director of Hadar, until she was shown corporate documents reflecting that designation (B. Strang Dep., FNBB Ex. 235, p. 30), and she knew virtually nothing about its business activities. Indeed, although *890 Mrs. Strang was also an officer and director of Telecasting in 1981, she was even unaware as to whether Telecasting was a customer of Hadar. (B. Strang Dep., FNBB Ex. 235, p. 31) Mr. Strang could not even recall such elemental matters as why Hadar had loaned Mr. Overmyer money at interest rates substantially below market at the same time Hadar had to borrow money from a bank at market rates (S. Strang Dep., FNBB Ex. 234, pp. 51-55), or whether Hadar ever had any excess cash (S. Strang Dep., FNBB Ex. 234, p. 51). He had no knowledge of the events concerning the \"settlement\" entered into by Hadar, ISLI, GE and Telecasting. (S. Strang Dep., FNBB Ex. 234, pp. 33-37) He had no knowledge why Hadar had changed its name. (S. Strang Dep., FNBB Ex. 234, p. 50) He was not aware of how the rentals between Telecasting and Hadar concerning the Hundred East equipment were established. (S. Strang Dep., FNBB Ex. 234, pp. 72-73) Further, Mr. Strang not only had no knowledge regarding whether Hadar had ever met its obligations with regard to the filing of corporate income tax returns, but he also expressed virtually no concern on the topic at all. (S. Strang Dep., FNBB Ex. 234, pp. 39-41) And, although he was Hadar's president, he did not know who had decided to have Hadar file a Chapter 11 petition or when that decision was made. (S. Strang Dep., FNBB Ex. 234, p. 98) Although he signed the petition, he was not even aware of who or what Hadar's shareholders were at the time of filing, and his sworn representation to the Bankruptcy Court for the Southern District of New York was, therefore, erroneous. (S. Strang Dep., FNBB Ex. 234, pp. 81-83)\n29.5. Control Exercised Through Trusts. Mr. Overmyer's scheme of establishing a structure, which would purport to remove him from apparent responsibility or control over his operating entities, was extended by placing the stock of many of the corporations in purported trusts in which he vigorously abjured either legal or equitable interests. (D. Overmyer Dep., Pl. Ex. 139A, pp. 18-20, 32-33, 41-42, 45-46, 96-97, Pl. Ex. 139B, pp. 151-52) The distinction between appearance and reality found in the Overmyer corporate network was repeated in these trust arrangements, however. For example, Mrs. Barbara Overmyer Strang is named as the trustee of one of the principal trusts (Organization Charts, Connery Exs. 5, 6, 7 and 10), but Mrs. Strang was not even aware of what its assets were or where the trust was located (B. Strang Dep., FNBB Ex. 235, p. 16). Mrs. Shirley Overmyer was likewise the trustee of another purported trust, but she had no knowledge regarding how long it had been in existence or what assets it might hold. (S. Overmyer Dep., FNBB Ex. 258, p. 38) Further, Mrs. Overmyer had never carried out any duties or responsibilities in her capacity as trustee of that trust. (S. Overmyer Dep., FNBB Ex. 258, pp. 38-39) And Mrs. Strang, a principal beneficiary of that alleged trust, had never heard of it. (B. Strang Dep., FNBB Ex. 235, p. 15)\n29.6. Use of Misleading Corporate Records. Mr. Overmyer and Mr. Connery perpetuated this deceptive scheme of figurehead control by preparing documents (usually unanimous consent forms) that would reflect desired corporate activity. (Connery Dep., FNBB Ex. 231, pp. 49-51) Those documents were thereafter presented to the appropriate token officers or directors for execution. (Connery, 24 Tr. 2288-89) Contrary to the appearance of corporate regularity that was thereby created, neither the Overmyer employees inserted into the positions of apparent authority (see, e.g., Raible, 7 Tr. 614-15; Chi, 47 Tr. 4609-13) nor the Overmyer family members in fact exercised independent judgment or responsibility (Starr Dep., FNBB Ex. 241, pp. 11-14). Although the Strangs made feeble assertions that they normally made some evaluation of the corporate actions thus presented, their almost complete lack of recall regarding either the substance or the purpose of the actions belies that testimony. (See generally S. Strang and B. Strang Deps., FNBB Exs. 234-35) Further, both Strangs admittedly signed at least one such document, a set of purported minutes of a meeting of Hadar's shareholders (6/6/79 Hadar *891 Stockholders' Meeting Minutes, Raible Ex. 148), which was demonstrably and objectively false at the time they signed it. (Connery, 24 Tr. 2291-92) Their testimony is, therefore, not to be believed. A more accurate picture of the normal course of activities in the Overmyer organization was undoubtedly provided by Mrs. Overmyer, who candidly testified that she quite often signed documents presented to her for that purpose by her husband, without examining them and without making any evaluation or even any inquiry into their nature, purpose or effect. (S. Overmyer Dep., FNBB Ex. 258, pp. 56-57, 95)\n29.7. Mr. Overmyer's Control of Hadar Was Typically All Encompassing. No decision involving any substantial amount of money would be made with respect to Hadar without his knowing about it, agreeing to it or directing it. (Raible, 6 Tr. 547-48) Although Mr. Raible was described as Hadar's executive vice-president and chief operating officer (Raible, 6 Tr. 503), his authority was completely illusory (Raible, 1 Tr. 318; Memos and Letters, Raible Dep., Exs. 390-470). Mr. Raible reported not to Mr. Strang, the president of Hadar, but to Mr. Overmyer (Raible, 6 Tr. 569). Mr. Overmyer's dominance was so pervasive that Mr. Raible could not even pay a bill of Hadar without Mr. Overmyer's approval (Raible, 7 Tr. 711), a restriction repeated with the other Overmyer entities (Raible, 6 Tr. 568-69, 9 Tr. 837).\n29.8. Knowingly False Denial of Control by Mr. Overmyer. Notwithstanding this reality, Mr. Connery directed the plaintiffs' counsel to deny that Mr. Overmyer controlled or was connected with Hadar. (Connery, 24 Tr. 2282-83) Mr. Connery also asserted that neither control nor beneficial ownership of the corporations could be traced to Mr. Overmyer, because it had to be presumed that the Overmyer employees and family members had exercised independent judgment and evaluation consistent with their nominal titles and positions. (Connery Dep., FNBB Ex. 231, pp. 36-38) These assertions by Mr. Connery were not only false, they were knowingly so. Mr. Overmyer's sworn testimony on this subject, which was offered by the plaintiffs, was at least equally false. When deposed in the Suffolk County, Massachusetts guarantee suit with FNBB, Mr. Overmyer testified as follows:\nQ. Do you have any relationship with Hadar, sir?\nA. No.\nQ. Did you ever have any relationship with Hadar, sir?\nA. I do lease an automobile from Hadar.\nQ. How long have you leased an automobile from Hadar, sir?\nA. Oh, a couple of years.\nQ. Do you have any other relationship with Hadar, sir?\nA. My wife leases an automobile, too.\nQ. Any other relationship with Hadar, sir?\nA. No.\n. . .\nQ. Do you do any work or business by or on behalf of Hadar Equipment Leasing, sir?\nA. No.\nQ. Have you ever, sir?\nA. No.\n(Overmyer Dep., Pl. Ex. 139A, pp. 41-42, 45-46) It is clear from the evidence in this case, much of which came from Mr. Overmyer's own employees and relatives, that this testimony was false and that he knew it to be so.\n29.9. Use of the Scheme To Obscure Extraction of Money. Part of the basis for the Overmyer corporate network was to provide a method of obscuring the money which Mr. Overmyer withdrew from the business activities. Thus, in addition to the false contentions that Mr. Overmyer's only relationship to the corporations was as a consultant, the corollary assertion that this consultancy was unpaid (see 1/4/79 Letter, FNBB Ex. 209, Attachment A) was similarly false. Mr. Overmyer drew a regular salary from Telecasting (2/20/81 Letter, Connery Ex. 41), from DHO and from one of the subsidiaries of RT Systems (D. Overmyer *892 Dep., FNBB Ex. 224, pp. 4-5). Beyond that, he caused to be diverted for his benefit the cash assets available in the other related corporations. Through Hadar, for example, he both \"borrowed\" money at far less than market rates, and regularly drew funds directly from the available petty cash of Telecasting. (See Findings, Nos. 24.1 and 24.4, supra, and 32.14, infra) Further, the service companies' cash was utilized to pay directly many of Mr. Overmyer's personal expenses. (See Finding No. 24.6, supra) These expenditures and receipts of cash were reported to the Internal Revenue Service as income to Mr. Overmyer. (Connery, 23 Tr. 2203-08) Further, the corporations were required to write checks payable to Overmyer family members in respect of alleged services that were never performed. (See Findings, Nos. 24.5-24.6, supra) Mrs. Overmyer, to whom the largest amount of such checks was written, personally never received such checks. (S. Overmyer Dep., FNBB Ex. 258, pp. 67-75, 96-97) She had no idea how money was deposited into the family bank account for which she was the authorized signatory. (S. Overmyer Dep., FNBB Ex. 258, p. 9) She regularly signed large numbers of blank checks on the account and gave them to her husband to use as he desired. (S. Overmyer Dep., FNBB Ex. 258, pp. 7-8, 47-50) In this manner, Mr. Overmyer was able to continue the illusion that he had little personal control over significant amounts of money generated by his business enterprises, and he could thereby attempt to delude actual or potential creditors into believing he derived little of significant value from his operations.\n29.10. Mr. Connery: Principal Agent In the Overmyer Scheme. Mr. Edmund Connery has served as one of Mr. Overmyer's principal henchmen since he joined the Overmyer organization in 1964. (See Finding No. 4.4, supra) He has consistently participated in, or made, the important decisions taken by the Overmyer organization. (See D. Overmyer Dep., FNBB Ex. 224, pp. 16-17; Connery Dep., FNBB Ex. 231, p. 173, 240-47, 253-54, 382-96) Contrary to his pretense of being an \"independent\" attorney, Mr. Connery is, in fact, an entirely dependent insider within the Overmyer organization, and provides his services for a fixed annual fee, without restriction or differentiation between Overmyer companies and Overmyer family members. (Connery Dep., FNBB Ex. 231, pp. 25-28, 51-52; Connery, 22 Tr. 2149-60; 9/1/77 Retainer Agreements, Connery Ex. 15) The structure of Mr. Connery's relationship with the Overmyer organization was established as a result of his designs (Connery Dep., FNBB Ex. 231, p. 221), his negotiations and his planning with Mr. Overmyer (Connery, 22 Tr. 2159-60; Connery Dep., FNBB Ex. 231, pp. 14-15, 219-21). Mr. Connery's designation as an \"independent\" attorney paid by one of the Overmyer service companies was selected in an attempt to avoid the obligation to have his relationship to the Overmyer companies, then under the protection of the bankruptcy courts, approved and supervised by those courts. (Connery Dep., FNBB Ex. 231, pp. 222-23) After structuring himself as a \"consultant\" supplied by an Overmyer service company, Mr. Connery did not seek or obtain the approval of the Bankruptcy Court, although he was aware of the requirement to do so (Connery Dep., FNBB Ex. 231, pp. 222-23); he knew at the outset that he would be heavily involved in providing services to Telecasting (Connery Dep., FNBB Ex. 231, p. 224); and he knew that his compensation was coming from the funds of Telecasting (see Finding No. 23.11, supra; Connery Dep., FNBB Ex. 231, pp. 60-61). Mr. Connery also obtained guarantees of payment of his fees from each of the Overmyer companies then under the protection of the Bankruptcy Court for the Southern District of New York (TOC, Telecasting and DHO Unanimous Consents, Connery Exs. 16-18), but he did not advise or seek the approval of that Court for these aspects of his compensation agreement (Connery, 20 Tr. 1898-99). Mr. Connery performed far more than merely legal services for the Overmyer companies, and he was effectively a managing agent of those companies. (Connery Dep., FNBB Ex. 231, pp. 350-76, 382-96; Memos and Letter, Connery Exs. *893 40, 42-43; Letter, Tele Ex. 21; Letters, FNBB Exs. 42-44; Bond, 14 Tr. 1326-29, 1331-32; Lynch, 17 Tr. 1641-43; Connery, 21 Tr. 1987-88, 23 Tr. 2180, 24 Tr. 2282)\n\n30. Use of the Court System To Deceive FNBB\n\n30.1. Mr. Overmyer's Misrepresentations. The Overmyer organization has, since 1973, been in continuous litigation. (See Findings Nos. 7.6, 15.1, 15.2, supra) In that time, Mr. Overmyer has deliberately caused to be created intentionally misleading and misrepresentative evidence in the court system in attempts to frustrate FNBB's right to foreclose upon its collateral in order to protect its most valuable asset, the capital stock of Telecasting. (D. Overmyer Affidavit Excerpts, 57 Tr. 5880-95; Applications, Complaints, Orders and Opinions, FNBB Exs. 432-38) In a further effort to thwart FNBB's right to foreclose, Mr. Overmyer tried to recapitalize Telecasting by increasing the authorized common no par value capital stock from 500 to 10,000 shares and by creating a second class of common stock. (11/16/79 and 12/7/79, Telecasting Minutes Tele Ex. 29; Raible, 10 Tr. 911-14) Mr. Overmyer repeatedly filed sworn affidavits replete with duplicitous statements that the Telecasting stock exceeded in value the debts owed to FNBB. (Overmyer Affidavit Excerpts, 57 Tr. 5881, 5885; Opinion, FNBB Ex. 435) Mr. Overmyer's statements were premised upon appraisals made by Mr. Edwin Tornberg at the direction of Mr. Overmyer (D. Overmyer Affidavit Excerpt, 57 Tr. 5891-92), who told him to base his appraisals on Telecasting owning all the equipment used by the station. (Tornberg Dep., FNBB Ex. 230, pp. 9-10) In this adversary proceeding, the Overmyer-controlled plaintiffs have alleged that this premise is not fact. (Hadar complaint) Had Mr. Tornberg's appraisal been based upon the facts as asserted by plaintiffs, the appraised value of the station would have been lowered. (Tornberg Dep., FNBB Ex. 230, p. 11) Mr. Overmyer created and sponsored to several courts misleading appraisals intended to persuade them to assist him in frustrating FNBB's rights. In view of the facts regarding Mr. Overmyer's continual diversion of Telecasting's assets and his overall scheme to remove his personal assets from the prospective reach of his creditors, including particularly FNBB's claim on his personal guarantees, these sworn statements were knowingly false. (See Findings Nos. 13.1-13.5, 14.1-14.3, 15.1-15.2, 16.1-16.10, 17.1-17.21, 18.1-18.11, 19.1-19.10, 20.1-20.6, 22.1-22.7, 23.1-23.19, 24.1-24.9, 25.1-25.2, 26.1-26.6 and 27.1-27.2, supra) They were, moreover, made with the intention of deceiving the courts to which they were submitted and thereby harming FNBB. At the same time, Mr. Overmyer and his companies were using the judicial system and other means to forestall their creditors, and the revenues generated by the Overmyer enterprises (primarily Telecasting) were being used by Mr. Overmyer to acquire new businesses and properties. (Connery Dep., FNBB Ex. 231, pp. 69-71, 76-77, 192-94, 196; Sugarman Case, FNBB Ex. 65; 2/6/78 Deauville Minutes, FNBB Ex. 261; Raible Dep., FNBB Ex. 259A, pp. 523-24; Weathervane Farms [S. Strang] Dep., FNBB Ex. 246, pp. 25-30, 58-59; see also Findings Nos. 23.15-23.19, supra) These acquisitions included attempts to obtain additional UHF construction permits from the Federal Communications Commission. (Connery Dep., FNBB Ex. 231, pp. 202-03)\n30.2. Telecasting Paid TOC's Obligations to FNBB. On June 11, 1980, Judge Lewittes entered an order reaffirming a decision of Judge Babitt, granting FNBB relief from the automatic stay in In re TOC, No. 75-B-2427 (S.D.N.Y.), which prevented FNBB from selling the Telecasting stock that was pledged to it. (In re TOC; FNBB v. TOC, 2 Bankr.Ct.Dec. 992 [S.D.N.Y.1976], FNBB Ex. 196; In re TOC; FNBB v. TOC, No. 75-B-2427 [S.D.N.Y. June 11, 1980], FNBB Ex. 197) On June 20, 1980, Judge Lewittes granted a stay pending appeal on conditions that included payment of interest on the sum of $4,355,558.31. (Order, FNBB Ex. 198, pp. 2-3) Mr. Overmyer directed Mr. Chi to use Telecasting money to make the interest payments and to *894 charge the payments against an obligation of Telecasting to TOC on the Telecasting books. (Chi 205 Exam, 47 Tr. 4603, 4605-06; see D. Overmyer Creditors' Meeting Testimony, 43 Tr. 4092-95) Mr. Chi instructed Mr. Meissner to debit the entire amount of the payments to the TOC account and not to charge any of it as an interest expense. (Meissner Dep., FNBB Ex. 232, pp. 46-48) It was improper accounting not to allocate the payments between the principal amount of the obligation and the interest thereon, and to debit the principal portion to the TOC account and charge the interest portion to interest expense. (Meissner Dep., FNBB Ex. 232, p. 48; H. Klein, 35 Tr. 3335-36) Moreover, the TOC account, against which Mr. Overmyer directed Mr. Chi to charge the payments and to which Mr. Chi directed Mr. Meissner to make the debits, was the $461,560.61 inter-company account that was assigned to FNBB on September 17, 1973. (9/17/73 Assignment, Pl. Ex. 143, p. 1; 9/17/73 Note, FNBB Ex. 341; H. Klein, 35 Tr. 3336) A total of $349,761.41 was improperly transferred from Telecasting to TOC in this manner. (H. Klein, 35 Tr. 3333; Summary of TOC Account No. 0615, FNBB Ex. 203, p. 1)\n30.3. Continued Overmyer Misuse of the Bankruptcy Courts. At the end of October, 1980, the Bankruptcy Court for the Southern District of New York dismissed the Telecasting XI on the ground that Telecasting was not insolvent in 1976 when its petition was filed. (Affidavit, FNBB Ex. 438, \u0e16 2) A stay of this order was obtained from the Bankruptcy Court upon the condition that FNBB be furnished current financial information regarding Telecasting's operations and financial status. (Affidavit, FNBB Ex. 438, \u0e16 3) The required information was not provided to FNBB, however, and it applied to the Bankruptcy Court for termination of the stay. (Affidavit, FNBB Ex. 438, \u0e16\u0e16 5, 17) In January, 1981, Mr. Overmyer opposed termination of the stay and swore that the information was being assembled and would be provided to FNBB. (Affidavit, FNBB Ex. 438, \u0e16\u0e16 5-6) Rather than providing accurate financial information, the appeal from the dismissal of the Telecasting XI was withdrawn, and on the same day Mr. Overmyer caused Telecasting to file its petition under Chapter 11 of the new Code in this Court (the \"Telecasting 11\"). (Connery, 21 Tr. 1975; Litigation Chart, FNBB Ex. 419, pp. 16-17) The petition was accompanied by an affidavit of Mr. Overmyer, in which he swore that FNBB had to be restrained from exercising its rights with respect to the stock of Telecasting, or Telecasting would suffer immediate and irreparable harm. (Affidavit, 57 Tr. 5889-90) These sworn assertions were made in an effort to perpetuate Mr. Overmyer's control over Telecasting, and were knowingly false.\n\n31. Subverting Creditors' Committees\n\n31.1. Packing the Creditors' Committee in the Telecasting XI in New York. The creditors' committee in the Telecasting XI consisted of \"Edmund H. Miller of American Research Bureau,\" \"David L. Cowell of Reyner & Gersin,\" \"Stephen L. Duffy of Edwin Tornberg & Co.,\" \"David Sadkin of Schiff Terhune,\" and \"Charles Carroll of Comte Construction.\" (9/30/76 Order, FNBB Ex. 12) The chairman of this committee, Edmund H. Miller, was, in fact, Mr. Overmyer's personal attorney, and was at that time employed by the Overmyer organization to provide the same services as inside counsel that Mr. Connery now provides. (Raible, 10 Tr. 898-99, 902; Raible Dep., FNBB Ex. 259, p. 112; Connery Dep., FNBB Ex. 231, pp. 35-36; Starr Dep., FNBB Ex. 241, pp. 4, 14-16) Messrs. Cowell, Duffy and Sadkin also all worked for companies controlled by Mr. Overmyer. (Raible, 10 Tr. 899-900, 903; Starr Dep., FNBB Ex. 241, pp. 19-20; Chi Dep., FNBB Ex. 243, pp. 112-15) Mr. Overmyer himself selected all five members of the creditors' committee for the Telecasting XI in New York. (Handwritten Note, FNBB Ex. 13; see Raible, 10 Tr. 904-05)\n31.2. Attempt To Eliminate FNBB Supporters From Telecasting Creditors' Committee. On February 23, 1981, Mr. Connery wrote to former counsel for Telecasting, instructing him on how to keep supporters *895 of FNBB off the Telecasting creditors' committee. (2/23/81 Connery Letter, FNBB Ex. 62) Mr. Connery instructed that Viacom's claim for $322,448.88 be listed as \"$1.00 disputed\" because he believed FNBB to be a substantial lender to Viacom. (2/23/81 Connery Letter, FNBB Ex. 62, p. 1) Mr. Connery also instructed that ASCAP's claim, which he listed as $65,694.11 and which they asserted as $115,000, be listed as \"$1.00 disputed\" because he believed that one of FNBB's counsel in this case was also counsel for ASCAP. (2/23/81 Connery Letter, FNBB Ex. 62, p. 2) In addition, Mr. Connery relayed Mr. Overmyer's personal instructions that thought be given to having this Court ratify a settlement agreement with Katz Agency, if that would eliminate Katz from the creditors' committee, because Mr. Overmyer believed that Katz had negotiated with FNBB to purchase the station. (2/23/81 Connery Letter, FNBB Ex. 62, p. 1) Finally, Mr. Connery increased the claim of Fly, Shuebruk from $37,538.97 to $337,538.97, by adding in an accomplishment fee of $300,000 that was purportedly agreed to between Fly, Shuebruk and Mr. Overmyer during the first three months of 1981. (2/23/81 Connery Letter, FNBB Ex. 62, p. 2; Connery, 21 Tr. 2045-47) As of October 16, 1974, the amount of Fly, Shuebruk's claim was only $78,000, of which Telecasting was willing to acknowledge $64,000 and pay it at the rate of $2,000 per month. (10/16/74 Telecasting Minutes, Tele Ex. 29, p. 5) Mr. Connery's testimony that Mr. Overmyer and Fly, Shuebruk reached agreement on a $300,000 accomplishment fee sometime between 1967 and 1974 (Connery, 21 Tr. 2046) is not credible. Mr. Connery and Mr. Overmyer deliberately changed the amounts of claims in the Telecasting 11, in an effort to exclude creditors friendly to FNBB from the creditors' committee and thereby further hinder, delay and defraud FNBB in collection of the obligations of TOC, DHO, ODS and Mr. Overmyer.\n31.3. Payoff of Counsel for the Hadar Creditors' Committee. Counsel who originally appeared for the creditors' committee in the Hadar Chapter 11 was Mr. Robert Friou, of Wisehart & Koch. (PAST Dep., FNBB Ex. 236, p. 2) Omega paid Mr. Friou $5,000 for his service as counsel for the Hadar creditors' committee. (Checks, Tele Exs. 15, 16; Carrieri Exs. 27-28; Requests for Payment Nos. 1259 and 1228, Carrieri Exs. 25-26) The $5,000 was paid in the form of two checks for $2,500 each, which were personally requested and approved by Mr. Overmyer himself. (Requests for Payment Nos. 1259 and 1228, Carrieri Exs. 25-26; Carrieri Dep., FNBB Ex. 233, pp. 99-104) One of two checks to Wisehart, Friou & Koch expressly stated on the face of it that it was for \"Legal Fees/Representation of Hadar Creditors.\" (Check, Tele Ex. 15, Carrieri Ex. 28) During the time the Overmyer organization was opposing a change of venue in the Hadar Chapter 11 from New York to Cleveland, a number of deliveries were made from the Overmyer offices to Wisehart, Friou & Koch, including two from Mr. Connery's secretary, Mabel Trow-Abraham. (Requests for Payment, Carrieri Ex. 29, p. 13; Carrieri Ex. 30, pp. 6, 10; Carrieri Ex. 31, p. 5; Connery Dep., FNBB Ex. 231, p. 35) Mr. Connery sent the Overmyer receptionist (Raible Dep., FNBB Ex. 259, p. 117) to pick up Hadar's reply brief from Mr. Wisehart of Wisehart, Friou & Koch. (Request for Payment No. 1260, Carrieri Ex. 47, pp. 4-5) Mr. Raible charged a lunch with Mr. Wisehart to Omega petty cash. (Request for Payment No. 1293, Carrieri Ex. 47, p. 11) When Mr. Wilson instructed Mr. Friou to oppose the change of venue, Mr. Friou failed to inform Mr. Wilson of numerous facts that were material to the decision and would have influenced Mr. Wilson to decide to support the change, rather than to oppose it. (PAST Dep., FNBB Ex. 236, pp. 57-61) Mr. Overmyer and Mr. Connery paid Mr. Friou to take a position on behalf of the Hadar Creditors' committee in support of the Overmyer position.\n\n32. Fictitious Corporate Minutes\n\n32.1. Responsibility for Overmyer Minutes. Except for the time he was not working for the Overmyer organization (December, 1975, through August, 1977), Mr. Connery *896 was responsible for keeping the minute books of all of the Overmyer companies except RT Systems and its subsidiaries. (Connery, 15 Tr. 1389, 1392, 23 Tr. 2217)\n32.2. Creating the TOC Minute Book. At the time that D.H. Overmyer Cablevision Company, Inc. changed its name to The Overmyer Company and became the parent of DHO and Telecasting, Mr. Connery directed one of his subordinates in the Overmyer legal department, Mr. Bohm, to create numerous back dated corporate minutes for TOC regarding resignations of officers, annual elections of directors and officers, other elections of officers, change of the corporate name and amendment of the bylaws. (11/13/68 Memorandum, Connery Ex. 33)\n32.3. The Meeting in the Wrong Building. The ISLI minute book contains the first page of the minutes for a November 2, 1973, meeting of the board of directors held at 29 West 34th Street, New York, New York, 10001. (11/2/73 ISLI Minutes, Raible Ex. 334) These minutes are typed on a different typewriter than other ISLI minutes of similar date (compare, e.g., 11/16/73 ISLI Minutes, Raible Ex. 336, with 11/2/73 ISLI Minutes, Raible Ex. 334), and ISLI did not move to 29 West 34th Street until sometime in 1974 (D. Overmyer Dep., FNBB Ex. 224, pp. 28-29).\n32.4. Mr. and Mrs. Overmyer Vote as ISLI Directors After Resigning. On February 12, 1975, and February 18, 1975, Mr. and Mrs. Overmyer waived notice and then voted as \"being all of the Directors and a quorum\" of ISLI to adopt banking resolutions for two ISLI bank accounts. (2/12/75 and 2/18/75 ISLI Minutes, Raible Exs. 355-58) According to the minute book, however, Mr. and Mrs. Overmyer resigned as directors on February 3, 1975, and Mr. Lynch, Mr. Strang and Mr. Raible were elected in their stead. (2/3/75 ISLI Minutes, Raible Ex. 359)\n32.5. Election and Resignation of Mr. Edgerton as an ISLI Officer and Director. On April 16, 1981, Mr. Edgerton was elected vice-president and director of ISLI for the sole purpose of executing an agreement of compromise in Intermodal Systems Leasing, Inc. v. Forsythe, Civil Action No. C-79 0718 SC (N.D.Cal.). (4/16/81 ISLI Minutes, Raible Ex. 367) His resignation as soon as the agreement was signed was accepted in the very same minutes in which he was elected. (4/16/81 ISLI Minutes, Raible Ex. 367, p. 2) At the time recorded in these minutes, ISLI did not exist. (Certificate, FNBB Ex. 63)\n32.6. Connery Resignation as Hadar Director. On November 2, 1973, Mr. Connery resigned as a director of D.H. Overmyer Trucking Company (11/2/73 Hadar Minutes, Raible Ex. 130), even though there are no minutes in the minute book electing him director (cf. 4/18/72 Hadar Minutes, Raible Exs. 117-18). He suddenly appears as a director in the October 20, 1972 minutes, without ever having been elected. (10/20/72 Hadar Minutes, Raible Exs. 119-20)\n32.7. Mr. and Mrs. Strang Elect Themselves Hadar Directors. The Hadar minute book contains an action by unanimous consent of the directors, signed by Mr. and Mrs. Strang, electing Mr. and Mrs. Strang directors. (12/8/75 Hadar Minutes, Raible Ex. 131) There are no previous minutes electing the Strangs.\n32.8. Hadar 1975-1977 Minutes. Mr. Raible went through the minute books of various Overmyer corporations for Mr. Connery, making up current lists of directors and officers. (Raible, 10 Tr. 879; Lists of Directors and Officers, FNBB Ex. 8) These lists must necessarily have been made some time after Mr. Connery returned to employment with the Overmyer organization in August, 1977. (Connery, 15 Tr. 1390) At the time he made up the lists, Mr. Raible was unable to find the Hadar minute book. (Raible, 10 Tr. 881; Lists of Directors and Officers, FNBB Ex. 8, p. 2) He made up a list of officers of D.H. Overmyer Trucking Co., Inc., from a banking resolution dated August 30, 1976. (List of Hadar Officers, FNBB Ex. 8, p. 2; Raible, 10 Tr. 881-82) This banking resolution is not in the Hadar minute book that was produced in discovery. (Raible, 10 Tr. 882; cf. Hadar Minute Book, Raible Exs. 131-35) On the other hand, the minute book produced in discovery *897 does contain minutes dated December 8, 1975, January 8, 1976, May 6, 1977, and May 8, 1977. (12/8/75, 1/8/76, 5/6/77 and 5/8/77 Hadar Minutes, Raible Exs. 131, 132, 134 and 135) Since the minute book was missing in 1977, Mr. Connery must have prepared minutes for these four dates sometime after August, 1977, and back dated them.\n32.9. Hadar Name Change. The Hadar minute book contains minutes of a special meeting of shareholders dated June 6, 1979, changing the name of the company from Hadar Leasing International Company to Hadar Leasing International Company, Inc. (6/6/79 Hadar Minutes, Raible Ex. 148) The minutes recite that \"[a]ll shareholders were present at and throughout the meeting.\" (6/6/79 Hadar Minutes, Raible Ex. 148) This recitation is not true; there was no meeting of shareholders held on June 6, 1979. (Connery, 24 Tr. 2291-92; see Strang Dep., FNBB Ex. 234, pp. 59-61; B. Strang Dep., FNBB Ex. 235, pp. 62-64) The directors of Hadar who voted for the name change did not know why the name was changed. (S. Strang Dep., FNBB Ex. 234, pp. 58-59; B. Strang Dep., FNBB Ex. 235, p. 62) It was Mr. Connery's idea to make the change. (S. Strang Dep., FNBB Ex. 234, p. 58) On March 20, 1977, Continental Bank had written to \"Hadar Leasing International Co., Inc.\" asserting that it was liable to Continental Bank on its guarantee of Mr. Rigg's boat loan. (3/30/79 Letter, Connery, Ex. 38) On March 30, 1977, Mr. Connery wrote back on behalf of \"Hadar,\" which he used as a defined term for \"Hadar Leasing International Co., Inc.,\" asserting failure of the bank to perfect its security interest in the boat and offering to bring the loan current and meet the payment schedule, but saying nothing about the discrepancy in names. (3/30/79 Letter, Connery Ex. 38) On May 25, 1979, the Overmyer organization learned that Hadar had been defaulted in an action brought by Continental Bank in January, and that Continental Bank had restrained Hadar's bank account at Manufacturers Hanover Trust Company. (S. Strang Affidavit, Connery Ex. 35, p. 1) A vote to change the name of Hadar to add \"Inc.\" and make the name the same as the one used by Continental Bank was then recorded in the minute book. (6/6/79 Minutes, Raible Exs. 148-50) The name change was not effected promptly, however. Instead, Hadar moved to set aside the judgment on the basis of a July 6, 1979, affidavit of Mr. Strang asserting that its name was not \"Hadar Leasing International Co., Inc.\" (7/6/79 S. Strang Affidavit, Connery Ex. 35, pp. 1, 3, 5), and Mr. Connery wrote to Manufacturers Hanover Trust Company on July 17, 1979, asserting that the restraining notice was invalid because it was addressed to \"Hadar Leasing International Co., Inc.\" rather than \"Hadar Leasing International Company\" (7/17/79 Letter, Connery Ex. 37). The name change was not filed with the Secretary of State of Ohio until August 10, 1979. (Certificate, Raible Ex. 125, pp. 2-3) Even as late as September 4, 1979, however, Hadar's attorney was asserting to a New York court, under oath, that the name of Hadar was \"Hadar Leasing International Company,\" not \"Hadar Leasing International Co., Inc.\" (9/4/79 Easton & Echtman Affirmation, Connery Ex. 36, p. 1) Mr. Connery's purpose in adding \"Inc.\" to Hadar's name was to defraud creditors, including Continental Bank, who thought the name was \"Hadar Leasing International Company.\"\n32.10. Alteration of the Jeebs Minute Book. The Jeebs minute book, as produced by the Overmyer Organization, contains 12 minutes of which the original set was marked with changes and a new set typed. (Jeebs Minute Book, Raible Exs. 493, 507-10, 513-14, 523-32, 535-36, 540-45) It also includes two minutes made up from handwritten notes. (Jeebs Minute Book, Raible Exs. 493, 518-19, 538-39) The handwriting in the book is Mr. Connery's, and he is the one who made the changes. (Connery Dep., FNBB Ex. 231, pp. 321, 322, 330; Connery, 23 Tr. 2220-21) In his deposition, Mr. Connery first testified that he made the changes to the Jeebs minute book in 1977. (Connery Dep., FNBB Ex. 231, pp. 329-30; see also Connery Dep., FNBB Ex. 231, p. 320) He then changed the date to the end *898 of 1978, but added that it was at the time Jeebs acquired AGG. (Connery Dep., FNBB Ex. 231, p. 330) At trial, he changed the date to December, 1979, but again tied it to the time that Jeebs acquired AGG. (Connery, 25 Tr. 2402-03) Jeebs acquired AGG on December 29, 1977. (12/29/77 Jeebs Minutes, Raible Exs. 536, 559; see 12/29.77 AGG Minutes, Raible Ex. 560) Mr. Connery altered three sets of Jeebs minutes dated after Jeebs acquired AGG, including one set of minutes dated one entire year after the latest date Mr. Connery tried to give. (8/25/78 Jeebs Minutes, Raible Exs. 540-41; 12/15/78 Jeebs Minutes, Raible Exs. 542-43; 11/7/80 Jeebs Minutes, Raible Exs. 544-45; Connery Dep., FNBB Ex. 231, pp. 341-42) He also instructed that a new set of minutes be created and dated March 13, 1978, three months after Jeebs acquired AGG. (3/13/78 Jeebs Minutes, Raible Exs. 538-39) In his deposition and again at trial, Mr. Connery testified that he was just making housekeeping changes to correct technical defects in the keeping of the minutes during the time he was absent from the Overmyer organization. (Connery, 25 Tr. 2403; Connery Dep., FNBB Ex. 231, pp. 320-21, 322-23, 325-26, 328, 333-34) The period during which Mr. Connery was not working for the Overmyer organization was from December, 1975, through August, 1977. (Connery, 15 Tr. 1389-91) Of the 12 sets of minutes that Mr. Connery altered, only one set was made during the time he was not working for Mr. Overmyer. (Compare 7/11/77 Jeebs Minutes, Raible Exs. 523-24, with 3/8/74, 3/9/74, 10/15/74, 9/1/77, 10/15/77, 11/8/77, 11/8/77, 12/29/77, 8/25/78, 12/15/78 and 11/7/80 Jeebs Minutes, Raible Exs. 507-10, 513-14, 525-32, 535-36, 540-45) Indeed, many of the minutes he altered were ones that it was his responsibility to prepare in the first place. (Connery, 15 Tr. 1392) One of the items Mr. Connery added to the minutes was a vote authorizing the issuance of 850 shares of Jeebs to Weathervane Farms, Inc., for $850 on March 9, 1974, a date on which Mr. Connery was counsel for the Overmyer organization. (3/9/74 Jeebs Minutes, Raible Ex. 509, p. 2; Connery Dep., FNBB Ex. 231, pp. 330-35; Connery, 15 Tr. 1389, 1392) According to the stock certificates, Weathervane Farms, Inc. owns only 800 shares of Jeebs. (Jeebs Certificate No. 1, Raible Ex. 552; Connery Dep., FNBB Ex. 231, p. 335; Connery, 25 Tr. 2404) Although supposedly issued on the same day as the other three certificates, the certificate to Weathervane Farms, Inc. gives the date as \"this 9 day of March A.D. 1974,\" whereas the other three are typed \"this 9th day of March A.D. 1974,\" the signature of Mrs. Overmyer was written with a noticeably different pen, the certificate is in the book out of numerical sequence and it is the only original (as opposed to photocopied) certificate in the book. (Certificate Nos. 2, 3, 4, 1, Raible Exs. 493, 549-52) When first asked about the ownership of Jeebs at his deposition, Mr. Connery was surprised that Weathervane Farms, Inc. owned any interest in Jeebs. (Connery Dep., FNBB Ex. 231, pp. 331-32) Back on October 23, 1974, Mr. Connery had testified that Total Development Company owned Weathervane Farms, Inc., and Weathervane Farms, Inc., in turn, owned 100 percent of Jeebs. (Connery, 22 Tr. 2161-63) This testimony was not true. (Connery, 22 Tr. 2166) According to the minute books, Weathervane Farms, Inc. is now, and has since May 31, 1973, been owned 80 percent by the Barbara M. (Overmyer) Strang Trust and 20 percent by the Harrison M. Overmyer Trust; and Weathervane Farms, Inc. now owns, and has since March 9, 1974, owned either 800 out of 950 or 850 out of 1,000 shares of Jeebs. (Weathervane Certificates Nos. 4 and 5, Weathervane Minute Book, Weathervane Ex. 1; Jeebs Certificates Nos. 1-4, Raible Exs. 549-52; 3/9/74 Jeebs Minutes, Raible Exs. 509-10) Mr. Connery's explanation of his alterations of the Jeebs minute book is not credible. Mr. Overmyer was the original owner of 85 percent of Jeebs. Mr. Overmyer and Mr. Connery transferred it to Weathervane Farms, Inc., with deliberate, actual intent to hinder, delay and defraud FNBB in collection of the obligations of TOC, DHO, ODS and Mr. Overmyer.\n*899 32.11. The NDS Transfer of the Chicago Warehouse. When the Overmyer organization acquired NDS at the end of October, 1977, it agreed to keep the company in operation for a minimum of eight months. (Raible, 10 Tr. 921-22, 923) Less than four months later, on February 16, 1978, the NDS board of directors authorized a sublease of the entire Chicago warehouse to Sears, Roebuck & Co., which in effect took NDS out of the public warehousing business in Chicago. (2/16/78 NDS Minutes, NDS Ex. 53; Raible, 10 Tr. 925) To cover up this transaction, Mr. Connery created a second set of minutes, authorizing the same transaction. It was identical, except for the name of the executive vice-president who was authorized to sign, and except that it was dated August 29, 1978, after the eight-month period had run. (8/29/79 NDS Minutes, NDS Ex. 61)\n32.12. Resignation of Mr. Rety and Mr. Steele as Telecasting Directors. Mr. Connery changed the Telecasting minute book to reflect the dates of resignation of Mr. Rety and Mr. Steele that were reported to him by Mr. Shuebruk, Telecasting's former FCC counsel. (Connery, 23 Tr. 2219)\n32.13. Leases H-1043, H-1044 and H-1045. Both the Telecasting minute book and the Hadar minute book contain actions by unanimous consent dated January 5, 1981, fixing the rental for leases H-1043, H-1044 and H-1045 combined at $50,000 per month, effective January 1, 1981. (1/5/81 Telecasting Minutes, Tele Ex. 29; 1/5/81 Hadar Minutes, P1. Ex. 47) Mr. Connery did not prepare these unanimous consents until the first week of March, 1981, after Telecasting had filed its Chapter 11 petition. (Connery, 23 Tr. 2236-37) Mr. Connery back dated them to a date before the filing. (Connery, 23 Tr. 2238) The unanimous consents were executed by Mr. Overmyer, Mr. Raible and Mr. Chi, even though they had all resigned as directors on February 19, 1981, before the unanimous consents were prepared or executed. (2/26/81 Telecasting Minutes, Tele Ex. 29; Connery, 23 Tr. 2237-38)\n32.14. Mr. Hanrahan's Fees. Mr. Overmyer and Mr. Connery created Hadar minutes purporting to convert the $35,338.20 that Mr. Overmyer took from Telecasting to pay his personal attorney in Boston into a $35,000 loan from Hadar at eight percent interest for three years. (3/16/81 Hadar Minutes, Raible Ex. 174; D. Overmyer Dep., FNBB Ex. 224, p. 90) On March 6, 1981, the prime rate of FNBB was 18.5 percent. (Computer Printout, FNBB Ex. 275, p. 8)\n\n33. Falsifying Books of Account\n\n33.1. Mr. Connery's Alteration of the Telecasting Books of Account. On February 17, 1981, Mr. Connery instructed Messrs. Chi, Taub, Shock, Meissner and Raible to supply him with certain information by February 19, 1981, including a schedule of accounts payable, the exact amount of Telecasting deposits with Hadar as of January 31, 1981, and the balance due to or from Hadar as of January 31, 1981. (2/17/81 Memo, Meissner Ex. 3, \u0e16\u0e16 2, 9, 10; Meissner Dep., FNBB Ex. 232, p. 44) Mr. Meissner put together most of the information, including the amount of deposits, $626,003.47. (Meissner Dep., FNBB Ex. 232, pp. 44-45; Telecasting Journal Voucher 1-17, Chi Ex. 50) Thereafter, Mr. Connery directed Messrs. Shock, Chi and Taub to make adjusting entries to the books of account of Telecasting, including changing the accounting for those of the GE notes that had not yet been paid, adding a $300,000 asset consisting of an \"accomplishment fee\" payable to Fly Shuebruk, changing the overpayment of Hadar into a \"deposit on new leases\" of $234,138 and \"other receivables\" of $391,865, and writing off $321,814.61 of a $440,814.61 obligation to DHO. (2/23/81 Memo, Connery Ex. 40, \u0e16\u0e16 2-5) Mr. Connery further advised that there would soon be additional accounts payable to attorneys to be added later. (2/23/81 Memo, Connery Ex. 40, \u0e16 6) Mr. Meissner was also sent from New York City a list of persons to be added to the list of creditors. (Meissner Dep., FNBB Ex. 232, pp. 49-50) Mr. Overmyer telephoned Mr. Meissner at home on the Saturday morning after Mr. Meissner's last day of work, and asked Mr. *900 Meissner to get a balance sheet out. This entailed booking Mr. Connery's adjustments. (Meissner Dep., FNBB Ex. 232, pp. 43-44, 48-49; Telecasting Journal Voucher 1-17, Chi Ex. 50) Mr. Meissner booked all of Mr. Connery's changes as directed, even though he did not understand why a $300,000 unpaid legal fee was being booked as an asset. (Meissner Dep., FNBB Ex. 232, p. 51) The $234,138 \"deposit on new leases\" was exactly six times the monthly payment by Hadar to Hundred East for the equipment covered by leases H-1043 ($2,051.86) and H-1044 ($31,557.53) and the original version of H-1045 ($5,413.63). (Connery Dep., FNBB Ex. 231, pp. 359-61; Hundred East Contracts, Raible Ex. 752, p. 1, Raible Ex. 753, p. 3; Original Lease H-1045, D. Overmyer Ex. 2) The $440,814.61 obligation to DHO that Mr. Connery directed Mr. Meissner to write down to $119,000 was one of the Telecasting obligations that had been assigned to FNBB on September 17, 1973. (9/17/73 Assignment, P1. Ex. 143, p. 1)\n33.2. Mr. Connery Recorded GE Settlement On Telecasting's Books. Mr. Connery ordered Mr. Meissner to record the GE settlement on the books of Telecasting. (Letter, Tele Ex. 16; Connery Dep., FNBB Ex. 231, pp. 353-54) Mr. Connery's entry treats the settlement as if Telecasting purchased the equipment from GE and places the equipment in the balance sheet as an asset. (Connery Dep., FNBB Ex. 231, p. 354; Chi Dep., Ex. 50) At the time, Mr. Connery knew that the settlement documents provided the equipment was to become the property of Hadar and not of Telecasting. (Connery Dep., FNBB Ex. 231, pp. 240-41, 245)\n33.3. Bank Accounts Omitted from AGG's General Ledger. AGG had activity with the Continental Bank and the Bank of Barclay. (H. Klein, 34 Tr. 3252-53) The activity from these bank accounts was never recorded in AGG's general ledger. (H. Klein, 34 Tr. 3252-54)\n33.4. Creation of False Hadar Books of Account. In July, 1981, the Hadar Chapter 11 filed in the Southern District of New York was transferred to this Court. (7/13/81 Second Circuit Order; 7/21/81 District Court Order) In early August, Mr. Connery hired a former Overmyer employee, Mr. Lynch, to prepare a new set of books of account for Hadar. (Lynch, 17 Tr. 1649-50; Connery, 23 Tr. 2238, 2242; compare Lynch, 16 Tr. 1576-80) The books Mr. Lynch created were used by the plaintiffs at trial in this Court. (Hadar Bank Reconciliations, Pl. Exs. 119A-119G; Hadar Journal Vouchers, Pl. Exs. 115A-115F; Hadar Cash Receipts and Cash Disbursements Register, Pl. Ex. 113; Hadar General Ledger, Pl. Ex. 114; Hadar Trial Balances, Pl. Exs. 116A-116F) Hadar already had a set of books of account in existence. (Carrieri Dep., FNBB Ex. 233, pp. 74-78, 79-81, 116; Lynch, 17 Tr. 1674-75, 1683-85, 18 Tr. 1772-76, 1778-80) Mr. Lynch created journal vouchers, a ledger type summary sheet, a trial balance and a balance sheet and income statement as of April 30, 1977, and also as of June 30, 1978. (Lynch, 18 Tr. 1772-76, 1778-80) There were general ledgers in work sheet format for the fiscal years ended August 31, 1976, August 31, 1977, and August 31, 1978. (Carrieri Dep., FNBB Ex. 233, pp. 76-78) In addition, in late 1980 and early 1981, Mr. Yeh, acting under Mr. Carrieri's supervision and control, posted general ledgers for the fiscal years ended August 31, 1979, and August 31, 1980. (Carrieri Dep., FNBB Ex. 233, pp. 75-76) The Overmyer organization distributed the balance sheets and income statements made from the original set of books to prospective vendors and lenders. (Hadar Balance Sheets and Income Statements, FNBB Exs. 21, 34-40, 206; 6/28/77, 7/13/77, 1/30/78, 6/25/79 and 2/19/80 Transmittal Letters, Raible Exs. 788, 764, 766, 767, 770; Connery, 20 Tr. 1929-30; Connery Dep., FNBB Ex. 231, pp. 163-65; Hadar Schedules, Carrieri Ex. 60, p. 5; Raible Ex. 6, p. 4; Hundred East [Corcoran] Dep., FNBB Ex. 244, pp. 19, 24-25) They also filed them with the FCC. (Overmyer FCC Filings, FNBB Ex. 207, p. 13, FNBB Ex. 208, p. 9, FNBB Ex. 209, p. 9, FNBB Ex. 210, p. 8, FNBB Ex. 211, p. 29) These Hadar financial statements are completely different from the books of account prepared *901 by Mr. Lynch in 1981, and cannot be tied to them. (H. Klein, 36 Tr. 3390-3401; Summary of Hadar Financial Statements, FNBB Ex. 212; Lynch, 17 Tr. 1676-84, 18 Tr. 1780-83) For example, the Hadar financial statements all have entries for accounts receivable, but Mr. Lynch did not use an account entitled accounts receivable in making the 1981 Hadar books of account. (H. Klein, 36 Tr. 3394, 3398; Lynch, 17 Tr. 1685-86) Another example is that the April 30, 1977 Hadar income statement was prepared on the basis that leases H-1004 and H-1005 did not exist. (Compare Lynch, 18 Tr. 1780-83; and 4/30/77 Hadar Income Statement, FNBB Ex. 34, p. 2; with Lease H-1004, 1/1/77, Pl. Ex. 4, p. 5; and Lease H-1005, 3/1/77, Pl. Ex. 5, p. 5) The Court ordered the plaintiffs to produce the original set of Hadar's books of account. (Motion to Compel Production, FNBB Ex. 154, \u0e16 6) Nevertheless, the only portion of those books of account that the Overmyer organization produced was a set of journal vouchers prepared by Mr. Lynch in the course of preparing the June 30, 1978 balance sheet and some of the supporting documentation that went with them. (Lynch, 17 Tr. 1685, 18 Tr. 1776-78; 6/78 Hadar Journal Vouchers, FNBB Ex. 59; 6/78 Supporting Documentation, FNBB Ex. 61) These journal vouchers tie to the June 30, 1978 balance sheet that Mr. Lynch prepared in 1978, but they are totally different from the journal vouchers for the same period that he prepared in 1981. (Lynch, 17 Tr. 1685-90, 18 Tr. 1692-98) For example, Mr. Lynch, in 1978, booked the service company management fee as $2,000 per month payable to Jeebs, which is inconsistent with both the Jeebs service agreement and the AGG service agreement that the Overmyer organization produced in this case and Mr. Lynch used in preparing the new set of books in 1981. (Lynch, 17 Tr. 1687-89; compare Jeebs Service Agreement, Raible Ex. 9; AGG Service Agreement, Raible Ex. 10; and 1981 Hadar Journal Voucher for June, 1978, 6-02, Pl. Ex. 115C; with 1978 Hadar Journal Voucher 6-5, FNBB Ex. 59) The Overmyer organization has suppressed the summary sheets and trial balances that go with the 1978 journal vouchers which were produced; has suppressed other journal vouchers, summary sheets and trial balances prepared by Mr. Lynch; has suppressed support for the Hadar financial statements prepared after Mr. Lynch left the Overmyer organization in 1978; has suppressed the 1976, 1977 and 1978 general ledgers in work sheet format that Mr. Carrieri described; and has suppressed the 1979 and 1980 general ledgers that Mr. Yeh posted under Mr. Carrieri's supervision. (Cf. Lynch, 17 Tr. 1674-75, 18 Tr. 1772-76, 1778-80; Carrieri Dep., FNBB Ex. 233, pp. 74-78, 79-81, 116) Mr. Connery and Mr. Overmyer suppressed the existing books of account of Hadar and created an entire set of new books with false entries based on newly manufactured documentation for the deliberate purpose of hindering, delaying and defrauding FNBB in collection of the obligations of TOC, DHO, ODS and Mr. Overmyer.\n33.5. Mr. Connery's Write-Offs of Inter-Company Obligations Due to Hadar. After Mr. Lynch had prepared a March 31, 1981 trial balance for Hadar, Mr. Connery instructed him to write off receivables of $8,000 from Gulf Manufacturing Corporation, $60,350 from NDS and $42,483.75 from Peerless, and to write off 50 percent of receivables of $731,223.76 from Jeebs and $582,513.89 from AGG, all of which were companies controlled by Mr. Overmyer. (3/31/81 Hadar Trial Balance, Pl. Ex. 116A, pp. 2 and 6; Connery Dep., FNBB Ex. 231, pp. 383-89; Lynch, 18 Tr. 1726-32)\n33.6. The Overmyer Daily Cash Reports. During late 1980 and 1981, Mr. Carrieri prepared daily cash reports for the Overmyer organization. (Carrieri Dep., FNBB Ex. 233, pp. 83-84) Prior to 1981, Mrs. Narvas, Mr. Chi's assistant (Raible Dep., FNBB Ex. 259, pp. 162-63), prepared the daily cash reports. (Carrieri Dep., FNBB Ex. 233, p. 84) In late 1981, the daily cash report consisted of a single statement covering four Overmyer companies: Omega, DHO, Jeebs and Weathervane Farms, Inc. (Carrieri Dep., FNBB Ex. 233, p. 84; Chi Dep., FNBB Ex. 243, pp. 123-24) In early *902 1981, the same single statement also included Hadar and Telecasting. (Carrieri Dep., FNBB Ex. 233, pp. 84-86; Chi Dep., FNBB Ex. 243, p. 124) Mr. Carrieri presented the daily cash reports to Mr. Chi. (Carrieri Dep., FNBB Ex. 233, p. 85) Mr. Chi's testimony that he looked only at the figures for DHO, that he did not pass the reports on to Mr. Overmyer, that no one ever reviewed the figures for Telecasting, Hadar, Omega, Jeebs or Weathervane Farms, Inc., and that he just put the reports in his desk and threw them away a couple days later (Chi Dep., FNBB Ex. 243, pp. 123, 125-28) is not credible. The daily cash reports were, in fact, kept for one month before they were disposed of. (Carrieri Dep., FNBB Ex. 233, p. 81) On February 6, 1981, when the Telecasting Chapter 11 was filed, there were daily cash reports in existence that included Telecasting. (Carrieri Dep., FNBB Ex. 233, p. 117) Similarly, on March 27, 1981, when the Hadar Chapter 11 was filed, there were daily cash reports in existence that included Hadar. (Carrieri Dep., FNBB Ex. 233, p. 117) The Overmyer organization has since destroyed all of those reports. (Carrieri Dep., FNBB Ex. 233, pp. 116-17) The creation of a single cash report for Telecasting, Hadar, Omega, DHO, Jeebs and Weathervane Farms, Inc. shows that Mr. Overmyer treated the cash of all six companies as being interchangeably his own.\n\n34. Funding of Litigation\n\n34.1. Use of Service Companies To Fund Litigation. The Overmyer service companies, ultimate recipients of the cash of Telecasting and other assets intended to collateralize FNBB's loans, were used as disbursing agents for payment of the host of lawyers and law firms employed by Mr. Overmyer to effectuate his scheme. (H. Klein, 34 Tr. 3258, 35 Tr. 3283, 3287, 3301) The enormous amounts of money passed through the service companies to Overmyer lawyers ($531,883.85 through AGG and Omega in less than 42 months) are reflective of the degree to which Mr. Overmyer directed his resources to utilizing the judicial system to frustrate and defeat his creditors. (Summary of AGG Projects Cash Receipts and Cash Disbursements, FNBB Ex. 191, part 1; Summary of Omega Cash Receipts and Cash Disbursements, FNBB Ex. 192, part 1; Omega Requests for Payment, Carrieri Ex. 34, pp. 2-3, 6-17; Carrieri Ex. 35, pp. 4-8, 12-15; Carrieri Ex. 36, pp. 27-28; Carrieri Ex. 37, pp. 3-5, 9-13; Carrieri Ex. 38, pp. 2-29; Carrieri Ex. 39, pp. 2-28, 31-32; Carrieri Ex. 40, pp. 2-5; Carrieri Ex. 42, pp. 2-9; Carrieri Ex. 43, p. 6; Carrieri Ex. 44, pp. 2-6; Carrieri Ex. 45, pp. 2-4; Carrieri Ex. 46, pp. 7-8; Carrieri Ex. 48, pp. 2-15; Carrieri Ex. 49, pp. 2-7; Carrieri Ex. 50, pp. 2-3) The lawyers and law firms to whom payments were thus made include many whose only known relationship to the Overmyer companies was their representation of entities under the protection of the Bankruptcy Courts. (See, e.g., Schedule of AGG Legal Expenditures, FNBB Ex. 191, part 2) There is no indication that many of these payments were authorized by, or even disclosed to, the Bankruptcy Court.\n34.2. Use of Bermuda Bank to Pay Levy, Levy and Ruback. In October and November, 1973, FNBB began to dishonor Overmyer checks that created overdrafts on the combined Overmyer mother account, ODS Treasurer's account number 529-1308. (Responses to Requests of DHO/ODS/ISLI for Admissions from FNBB Nos. 68 and 75) On November 5, 1973, FNBB stopped re-advancing the amount of collections of Overmyer receivables to the ODS mother account under the assigned accounts loan. (McArdle, 53 Tr. 5392; Statement of Account, FNBB Exs. 356-57) On October 31, 1973, Mr. Overmyer and Mr. Connery changed the name of Overmyer Europe, Ltd. to Deauville Private Rental Homes, Inc. (Deauville Minute Book, 11/2/73 and 10/29/73 Letters, FNBB Ex. 261, pp. 40-41) and created back dated corporate minutes purporting to show that the name was changed on April 17, 1973 (Deauville Minute Book, 4/17/73 Minutes, FNBB Ex. 261). A few days later, on November 8, 1973, Mr. Overmyer opened an account at The Bank of N.T. Butterfield & Son, Ltd. in Hamilton, Bermuda, in the name of Deauville Private Rental Homes, Inc., with a deposit *903 of $40,000. (Butterfield Dep., FNBB Ex. 253, Ex. K, p. 1; Butterfield Bank Statements, FNBB Ex. 255, p. 1) Five days later, on November 13, 1973 (only three days before the Warehouse XI was filed), Mr. Overmyer transferred $35,500 from the Butterfield bank account of Deauville to Levy, Levy and Ruback, his attorneys in the Warehouse XI. (Butterfield Bank Statements, FNBB Ex. 255, p. 2; Connery, 21 Tr. 2030-32; Raible, 9 Tr. 816-17)\n34.3. Use of Bermuda Bank to Pay Gilman, McLaughlin & Hanrahan. A total of $20,000 was withdrawn from the Bank of Butterfield on February 20, and 23, 1981, for transfer to Coolidge Bank & Trust Company, payable to Gilman, McLaughlin & Hanrahan. (Butterfield Account Statements, FNBB Ex. 255, pp. 33, 35)\n34.4. Use of Bermuda Bank to Pay $40,000 to Calfee, Halter & Griswold. On December 7, 1981, the Overmyer organization withdrew another $40,000 from the Bermuda bank account of Deauville Private Rental Homes, Inc., and transferred the funds to Calfee, Halter & Griswold. (Compare 12/31/81 Deauville Bank Statement, FNBB Ex. 256; and 12/7/81 Debit Advice with Fee Disclosure, FNBB Exs. 421, 422, \u0e16 3) On the same day, Calfee, Halter & Griswold produced for the deposition of Deauville Private Rental Homes, Inc., in violation of Fed.R.Civ.P. 30(b)(6), one Andrew Edgerton, who was woefully ignorant of the company's affairs, was directed not to answer questions as to his connection with the company and who sent him to testify, and did not even know there was a Bermuda bank account. (NDS/Deauville [Edgerton] Dep., FNBB Ex. 252, pp. 35-37) A week earlier, at his deposition, Mr. Overmyer, the individual who knew the most about Deauville Private Rental Homes, Inc. (Raible, 8 Tr. 734), claimed to know nothing about its business. (D. Overmyer Dep., FNBB Ex. 224, p. 36) In January, Mr. Connery claimed the attorney-client privilege as to the affairs of Deauville Private Rental Homes, Inc. (Connery Dep., FNBB Ex. 231, pp. 213-15) Calfee, Halter & Griswold did not disclose that its fees were coming from Bermuda until December 17, 1981 (Fee Disclosure, FNBB Ex. 421), and did not serve the disclosure on counsel for Telecasting and FNBB until December 23, 1981 (Fee Disclosure with Certificate of Service, FNBB Ex. 422, p. 3). Neither the Overmyer organization nor the Butterfield Bank produced the documentation that showed actual transfer of the $40,000 from Bermuda to Calfee, Halter & Griswold. (Cf. Deauville Transfer Advices, FNBB Ex. 257; Deauville Bank Statements, FNBB Ex. 256; Deauville Bank Statements, Butterfield Dep., FNBB Ex. 254, Ex. L) There was a concerted effort to conceal the use of the Bermuda account of Deauville from Telecasting, FNBB and this Court.\n34.5. Payments to Russell Morton Brown. On January 26, 1981, the Overmyer organization wrote a $2,500 check to Hadar and a matching Hadar check to Mr. Russell Morton Brown, who appeared as attorney for Messrs. Raible, Edgerton and Strang and Mrs. Strang as witnesses in this adversary proceeding. (Summary of Matching Checks, FNBB Ex. 188, p. 17; H. Klein, 34 Tr. 3211-12) On January 28, 1981, the Overmyer organization used a $2,500 Telecasting check and a matching Hadar check to Chemical Bank to purchase an official check to Mr. Brown. (Summary of Matching Checks, FNBB Ex. 188, p. 17; H. Klein, 34 Tr. 3212; Hadar Request for Payment No. 1162, Carrieri Ex. 62) Omega made payments of $5,000 and $6,000 to Mr. Brown during February and March, 1981. (H. Klein, 35 Tr. 3288) Mr. Brown, as an attorney, serves Mr. Overmyer regardless of whom he may purport to represent.\n\n35. Improper Post-Petition Payments\n\n35.1. Transfers from New Account to Old Account to Cover Pre-Petition Overdrafts. On February 13, 17, 19 and 23, 1981, Mr. Chi transferred money ($5,000, $5,000, $6,000 and $4,475, respectively) from the new Telecasting account to the old one, to cover pre-petition overdrafts. (Requests for Payment Nos. 008, 009, 019 and 39553, Carrieri Ex. 22; Telecasting Cash Disbursements Register, Carrieri Ex. 24, pp. 3-4; Chi Dep., FNBB Ex. 243, pp. 92-94)\n*904 35.2. Telecasting Payment for Temporary Omega Employee. George Levy, of Bookkeepers Unlimited, performed accounting services for Omega on a part-time basis in early 1981. (Carrieri Dep., FNBB Ex. 233, pp. 48-49; Hadar Answers to Interrogatories, FNBB Ex. 263, p. 2, \u0e16 c) Mr. Levy's services were paid for by Telecasting check number 1025 dated February 27, 1981, in the amount of $129.50. (Telecasting Request for Payment No. 1025, Carrieri Ex. 22; Telecasting Cash Disbursements Register, Carrier Ex. 24, p. 6)\n35.3. Payment of Pre-Petition Petty Cash Vouchers. Mr. Chi requested and approved Telecasting check number 1019, issued February 26, 1981, to cover petty cash vouchers from January 26, 1981, January 30, 1981, and February 2, 1981, in the amount of $273.22. (Telecasting Request for Payment No. 1019, Carrieri Ex. 22; Telecasting Cash Disbursements Register, Carrieri Ex. 24, p. 6)\n35.4. Payments of Pre-Petition Premiums on Mr. Overmyer's Life Insurance. On February 25, 1981, two payments were made by Telecasting to Mutual Benefit Life for Mr. Overmyer's life insurance, one for a $1,128.66 invoice dated January 12, 1981, and the other for a $238.98 invoice dated January 29, 1981. (Invoices Stamped Paid for Checks Nos. 1017 and 1018, Carrieri Ex. 22; Telecasting Cash Disbursements Register, Carrieri Ex. 24, p. 6)\n35.5. Payment of Mr. Overmyer's Pre-Petition Expenses. On February 24, 1981, the following Telecasting checks were issued to cover Mr. Overmyer's expenses incurred from November, 1980, to January 1981:\ncheck number 1006, $121.52 to Mr. Overmyer;\ncheck number 1007, $94.10 to Avis;\ncheck number 1008, $27.60 to Chemical Bank;\ncheck number 1009, $121.94 to Bankers Trust; and\ncheck number 1011, $357.66 to Mr. Overmyer.\n(Voucher Tickets for Checks Nos. 1006, 1007, 1008, 1009, 1011, Carrieri Ex. 22; Telecasting Cash Disbursements Register, Carrieri Ex. 24, p. 6) The voucher ticket for checks 1006-1009 is in Mr. Chi's handwriting. (Chi Dep., FNBB Ex. 243, pp. 97-98)\n35.6. Flowers for Mrs. Overmyer. On December 19, 1980, Mr. Overmyer ordered flowers for Mrs. Overmyer, then hospitalized, with a card reading \"B[est] W[ishes] Your husband & children.\" (Ruth Joyce Invoice Stamped Paid No. 1012, Carrieri Ex. 22, p. 1) The bill was sent to 3 Park Avenue, where someone wrote \"Please\" on the second page and Mr. Chi signed his approval to the first page. (Ruth Joyce Invoice Stamped Paid No. 1012, Carrieri Ex. 22, pp. 2, 1) The $37.26 bill was finally paid on February 26, 1981, by Telecasting. (Ruth Joyce Invoice Stamped Paid No. 1012, Carrieri Ex. 22, p. 1; Telecasting Cash Disbursements Register, Carrieri Ex. 24, p. 6)\n\n36. Overmyer Litigation Strategy\n\n36.1. Historical Perspective. As far back as 1969, DHO had a claims policy for its branch managers which was to respond to every claim immediately with a denial of responsibility on some ground or another, and to settle a claim only where the branch manager believed his own personal negligence caused the loss or damage. (Branch Operations Manual, FNBB Ex. 395, pp. 1, 3, 4) A January, 1970 Overmyer litigation status report is 46 pages long and lists 18 cases in a section entitled \"UNSATISFIED JUDGMENTS,\" 20 in a section entitled \"ON APPEAL,\" 51 in a section entitled \"AWAITING TRIAL,\" 42 in a section entitled \"PRE-TRIAL STAGE,\" 91 in a section entitled \"PLEADING STAGE,\" 37 in a section entitled \"INACTIVE CASES\" and 58 in a section entitled \"CLAIMS NOT IN LITIGATION\" (a total of 317 cases). (Litigation Status Report, FNBB Ex. 396) The comments on the cases on the status report include the following: on a case at the pre-trial stage:\u0e42\u0080\u0094 \"Recent discovery of sub's records indicates much of our claims for overpayment cannot be substantiated\" (Litigation Status Report, FNBB Ex. 396, p. 17); on inactive cases:\u0e42\u0080\u0094 \"Our counterclaim is weak\u0e42\u0080\u0094it would be to our advantage to maintain the status quo,\" \"Plaintiffs not *905 pressing although we have poor defense,\" and \"Cannot find counsel to take case\" (Litigation Status Report, FNBB Ex. 396, pp. 37, 37, 38); and on claims not in litigation\u0e42\u0080\u0094 \"Very weak case\" next to which is written \"pass,\" \"New counsel must be obtained to institute suit for $4,716.00,\" \"Our prospective cause of action appears extremely weak\" next to which is written \"pursue,\" and \"Attempting to find basis for suit\" (Litigation Status Report, FNBB Ex. 396, pp. 41, 44, 41, 41).\n36.2. The Woodward-Clyde-Sherard Litigation. After a judgment of foreclosure on one of the warehouses in Albany, New York, was entered in January, 1970, DHO sought a stay pending appeal and leave to assert a post-judgment counterclaim for malpractice. (2/4/70 Status Report, FNBB Ex. 397) In the status report, of which a copy of was sent to Mr. Connery, one of the staff lawyers stated: \"I have not yet evaluated the merits of the professional malpractice claim, but my general initial impression is that our claim is weak\" and that one thing DHO was trying to accomplish was \"to delay as long as possible the payment of the mortgage.\" (2/4/70 Status Report, FNBB Ex. 397, pp. 2, 1) The status report also stated that the strategy was, if necessary, to pay the mortgage but immediately attach the money paid in order to exert pressure to settle the malpractice counterclaim. (2/4/70 Status Report, FNBB Ex. 397, p. 2) When the District Court denied the stay without a bond, DHO sought a stay without a bond from the Court of Appeals in an effort to delay the foreclosure sale until at least June, 1970, and perhaps October, 1970. (2/16/70 Status Report, FNBB Ex. 398) After the Court of Appeals also refused to grant a stay without the posting of a bond, a memorandum, of which a copy went to Mr. Connery, opined that \"[t]here is almost no possibility that the Court of Appeals will reverse the judgment of foreclosure,\" but that the court might remand and order the District Court to permit the counterclaim to be asserted. (3/30/70 Memorandum, FNBB Ex. 399) The memorandum went on to indicate a possibility that the District Court might then stay foreclosure pending resolution of the counterclaim \"(two years?)\" if a bond in the full amount of the judgment was posted. (3/30/70 Memorandum, FNBB Ex. 399) On June 9, 1970, the judgment was affirmed, including the denial of leave to assert the counterclaim. Woodward v. D.H. Overmyer Co., 428 F.2d 880 (2d Cir.1970). Judge Friendly noted that DHO had begun the action with a motion to dismiss based on \"a contention so utterly trivial and unmeritorious as not to warrant statement here\" (428 F.2d at 883), that three weeks later DHO filed a change of venue motion that was \"almost certainly ill-founded in a mortgage foreclosure action\" (428 F.2d at 883), and that the affidavit of Mr. Connery filed in opposition to plaintiffs' motion for summary judgment \"was so far from meeting the requirements of F.R.Civ.P. 56(e) that discussion or citation of authority would be supererogatory (428 F.2d at 885; see Connery Dep., FNBB Ex. 231, pp. 7, 13). As for the plea that they be allowed to delay the case further by pleading a counterclaim, Judge Friendly concluded his opinion as follows:\nDefendants complain that they have never had a day in court on their claim of professional malpractice and that the statute of limitations may now bar them from having one. While this sort of contention inevitably strikes a responsive chord in the judicial ear, if ever there were a case where a litigant's plight was of his own making, this is it. Bearing in mind the long delay to which plaintiffs have already been put, we think it clear that the interests of justice require affirmance of the judgment.\n428 F.2d at 885. After the Court of Appeals had affirmed the judgment, the same Mr. Russell Morton Brown who is familiar in this adversary proceeding wrote to Overmyer counsel with copies to Mr. Overmyer and Mr. Connery, suggesting that they seek a stay pending disposition of a petition for certiorari to the Supreme Court, and advising that they assert a fraud claim against Woodward-Clyde-Sherard in a state court and ask the court to enjoin Woodward-Clyde-Sherard *906 from proceeding with the foreclosure until the fraud issues were litigated. (6/16/70 Letter, FNBB Ex. 400) A June 17, 1970 memorandum, copies of which went to Mr. Overmyer and Mr. Connery, indicates that the decision was made to sue in state court and try to attach the money paid to redeem the property, in order to \"obtain some settlement leverage.\" (6/17/70 Memorandum, FNBB Ex. 401) On June 18, 1970, the Overmyer attorney in charge wrote to Mr. Russell Morton Brown, with copies to Mr. Overmyer and Mr. Connery, that they had decided to commence a new action in either the state or federal court, even though \"[o]ur position is not strong. The applicable statute of limitations is probably three years, which would have barred lawsuits commenced after April of 1969.\" (6/18/70 Letter, FNBB Ex. 402, p. 1) On October 26, 1970, the attorney in charge sent a memorandum to Mr. Overmyer with a copy to Mr. Connery, stating they would seek an order of attachment based on the foreign residency of the partners of Woodward-Clyde-Sherard, and use it to attach the redemption funds. (10/26/70 Memorandum, FNBB Ex. 404, pp. 1-2) Across the top, Mr. Overmyer wrote: \"E. Connery\u0e42\u0080\u0094Be more Firm\u0e42\u0080\u0094DHO.\" (10/26/70 Memorandum, FNBB Ex. 404, p. 1) On November 6, 1970, Judge Mansfield allowed a $300,000 attachment with only a $10,000 bond that DHO did not have to collateralize. (11/6/70 Memorandum, FNBB Ex. 405) On November 25, 1970, the attorney in charge sent a status report to Mr. Connery, estimating that it would be two or three months before they had to redeem the property by paying $150,000, and that they would immediately attach the $150,000 on the basis of the order of attachment entered by Judge Mansfield in their action against Woodward-Clyde-Sherard for $650,000. (11/25/70 Status Report, FNBB Ex. 406, p. 2) He estimated the value of their $650,000 lawsuit as \"$25,000 to $75,000.\" (11/25/70 Status Report, FNBB Ex. 406, p. 2) The record does not show the outcome of the case.\n36.3. The Frick Case. In D.H. Overmyer Co. v. Frick Co., 405 U.S. 174, 92 S.Ct. 775, 31 L.Ed.2d 124 (1972), DHO defaulted in progress payments on an Ohio construction contract, then gave the contractor 10 percent down and a non-cognovit note to induce it to finish the job and later gave the contractor an Ohio cognovit note in return for spreading out the payment schedule and reduction of the interest rate. 405 U.S. at 179-80, 92 S.Ct. at 779. DHO then defaulted on the cognovit note, brought suit in New York for damages and sought an ex parte stay of proceedings by the contractor on the note:\nOn July 5 Judge Frankel vacated an ex parte stay he had theretofore granted. On August 7 Judge Mansfield denied Overmyer's motion for reinstatement of the stay. He concluded, \"Plaintiff has failed to show any likelihood that it will prevail upon the merits. On the contrary, extensive documentary evidence furnished by defendant indicates that the plaintiff's action lacks merit.\"\n405 U.S. at 181, 92 S.Ct. at 780.\nMr. Russell Morton Brown prosecuted an unsuccessful appeal to the United States Supreme Court on behalf of DHO. 405 U.S. at 175, 92 S.Ct. at 777.\n36.4. The Eveready Heating Case. In Eveready Heating & Sheet Metal, Inc. v. D.H. Overmyer Co., 476 S.W.2d 153, 154 (Mo.App.1972), the Court found nothing in the testimony at trial to substantiate either of DHO's arguments on appeal.\n36.5. The General Electric Case. In General Electric Co. v. D.H. Overmyer Co., 452 F.2d 1388 (8th Cir.1972), the Court upheld a jury verdict against DHO of $3,628.10 in actual damages and $50,001 in punitive damages.\n36.6. In re DHO\u0e42\u0080\u0094Orders Terminating Warehouse Leases. In In re D.H. Overmyer Co., 383 F.Supp. 21 (S.D.N.Y. 1974), the Court affirmed numerous orders terminating leases of warehouses that DHO had sold and leased back. In one case that was appealed, the landlord had won a pre-petition suit for possession, but agreed to let DHO reenter on condition that a consent judgment be paid by December 31, 1973.\n\n*907 The landlord was induced to enter into this stipulation on the specific assurance of the debtor that \"there was no bankruptcy contemplated and as they viewed it, it would not violate [his] right to possession at the end of the year if they didn't pay it.\" Landlord's Motion For Possession (Camden # 2). April 11, 1974, at 14. The stipulation and judgment were signed on October 29, and filed November 9, 1973\u0e42\u0080\u0094only seven days before Overmyer began Chapter XI proceedings.\n383 F.Supp. at 26. In another case:\nOvermyer's defaults in rent and taxes for the St. Louis property were substantial. The landlord sent notice of default in May and notice of termination in June, 1973. Yet when the landlord thereafter commenced an action for possession, Overmyer entered a general denial, clearly a sham answer meant only to create delay.\n383 F.Supp. at 26. As to the Overmyer record in general, the Court stated:\nOn the record it would appear that for a period of years prior to its filing under the Bankruptcy Act, Overmyer's conduct with respect to many of the landlords formed a pattern of consistent failure to meet its rent, repair, mortgage and tax obligations. Just prior to filing its Chapter XI petitions, Overmyer made promises with respect to remedying these defaults which could only have been made with an intention to deceive. This modus operandi is not new to the Courts.\n383 F.Supp. at 24 (citing the Frick case). In a last ditch effort to get the orders reversed, DHO argued that Judge Babitt had prejudged the cases before the trials. The District Court's disposition of this contention was: \"After reading the transcripts of all the cases on appeal, it is apparent that this argument by Overmyer has absolutely no merit.\" 383 F.Supp. at 23 n. 3.\n36.7. Herzog v. Interstate. Interstate Distribution Services, Inc., a company controlled by Mr. Overmyer (Organization Chart, Connery Ex. 7), first failed to carry out a settlement that was agreed to (6/18/76 Letter, FNBB Ex. 407, pp. 1-2), then failed to comply with a stipulation and order of Judge Babitt (7/1/76 and 7/29/76 Letters, FNBB Exs. 408-09), and finally made a highly inflated claim of setoff (8/18/76 Memorandum, FNBB Ex. 410).\n36.8. The Sugarman Case. Sugarman v. Overmyer, FNBB Ex. 65, formerly Fed.Sec. L.Rep. \u0e16 96,554, available on Lexis (S.D.N.Y. 1978), involved an agreement under which Mr. Overmyer was to take over 51 percent of Mr. Sugarman's companies in exchange for supplying $800,000 in working capital, and was to purchase a company in which Mr. Sugarman owned a 51 percent interest for $2,000,000. The Court held that the agreement drafted by Mr. Edmund H. Miller (Mr. Connery's predecessor and, for a time, associate in the Overmyer organization) was so illusory as to be unenforceable. (FNBB Ex. 65, panel 19[2]) The acquiring corporation was to be an Overmyer company called Pinnacle Features, Inc., but as the Court found:\nThe only representation or warranty undertaken by the purchaser was that it was duly incorporated and in good standing (a representation which was false, for there was no corporation in existence at that time bearing the name Pinnacle Features, Inc.).\n(FNBB Ex. 65, panel 10)\nAs previously noted, at the time of the execution of the Agreement and the delivery of the MHSI stock, there was no corporation in existence by the name of Pinnacle Features, Inc., the named purchaser and sole signatory on the Overmyer side. Later in January, Overmyer caused Pinnacle Telecasting, Inc., a shell corporation in the Overmyer group without assets, rights or activities, to change its name to Pinnacle Features, Inc.\n(FNBB Ex. 65, panel 12) The lack of records to prove that Pinnacle Features, Inc. *908 existed did not faze the Overmyer organization when the case came to trial; the evidence might not yet be in existence, but it soon would be:\nAfter the institution of this litigation, the Overmyer personnel prepared a fictitious, back-dated corporate history of Pinnacle, including minutes of meetings which had not taken place, dating from prior to the existence of the corporation under its present name. This documentary history, taken at face value, would have tended to confirm Overmyer's, and discredit Sugarman's, contentions as to the negotiations and the meaning of the Agreement.\n(FNBB Ex. 65, panel 17) Mr. Connery has the responsibility for maintaining the minute books of all the Overmyer companies except RT Systems, Inc. and its subsidiaries. (Connery Dep., FNBB Ex. 231, pp. 104-05) The Court found that the defendants generally, who included not only Mr. Overmyer but also Mr. Connery (FNBB Ex. 65, panel 7), deliberately defrauded Mr. Sugarman:\nThrough affirmative misrepresentations and misleading omissions . . . the defendants intentionally deceived Sugarman as to material aspects of the transaction.\n(FNBB Ex. 65, panel 20)\nIt is interesting to note that the same kind of deception was perpetrated subsequent to the execution of the Agreement and the delivery of the stock. After having reviewed the executed Agreement, Sugarman's lawyer Chatz wrote two letters to Overmyer in which he asked, among other points, that a clarification be spelled out that Pinnacle's payments \"shall be deposited in the nature of requity and not loans.\" (Exh. 5). The only reply he received was the letter from Connery stating \"There is no inclination to do Anything further in connection with the Agreement along the lines mentioned in the second and third paragraphs of your letter of December 21, 1977.\" Neither Chatz nor Sugarman was ever told that Overmyer disagreed with their understanding that payments were to be deposited as equity.\n(FNBB Ex. 65, panel 28) The best that can be said for the Overmyer organization was that when the case came to trial, Mr. Connery did not commit perjury. (FNBB Ex. 65, panel 42) But the Court found repeatedly that the testimony of the rest of the members of the Overmyer organization, including Mr. Overmyer himself, was not to be believed. (FNBB Ex. 65, panels 7, 14-15, 40-44)\n36.9. The Locafrance Case. In Locafrance United States Corp. v. Interstate Distribution Services, Inc., Lucas County Common Pleas No. 79-0443 (October 21, 1980), Locafrance had obtained judgments against Interstate in both a New York Court ($9,922.34) and the Lucas County Court ($30,267.12). (Slip Opinion, Tele Ex. 50, p. 1) Thereafter, the Overmyer organization formed two new corporations, Mid American Warehouse Company and Express Warehouse and Distribution Company, and transferred all of Interstate's operations to the two of them without consideration. (Slip Opinion, Tele Ex. 50, p. 2) Interstate, Mid American and Express are somewhat differently owned, but all are controlled by Mr. Overmyer. (Organization Charts, Connery Exs. 5, 6, 7) The Court granted summary judgment setting aside the transfer as a fraudulent conveyance and awarded punitive damages and attorney's fees because actual malice was proved.\nUnder the second test set out in Columbus Finance actual malice may be proved where there is intentional, reckless, wanton, willful and gross acts which cause injury to persons or property. Actual malice has been shown here and punitive damages are clearly proper.\nThe conduct of defendant Interstate in light of the circumstances can only be considered to fit the above definitions. The acts of defendant Interstate through its officers were certainly intentional and most probably wanton in relation to the rights of the plaintiff. Most simply stated defendant Interstate wound down its operations and created two new corporations *909 to carry on business exactly as before with the intent to avoid a forthcoming judgment against them. Actual malice has been shown here and punitive damages will be awarded.\nWhen punitive damages are awarded, attorney's fees may also be granted. Both punitive damages and attorney's fees are proper here and are awarded against defendants Interstate Distribution Services, Inc., Express Warehouse, Inc., and Mid-American Warehouse, Inc. An award against all three defendants is compelled by the facts of this case, where, in order to avoid a judgment, transfers were made among companies clearly having a common thread of ownership. Based on the evidence set forth in the trial record and an estimation of time expended after trial, the Court finds that $22,865.75 constitutes a reasonable attorney's fee in this case. The Court further finds that an additional award of $60,000.00 is proper as punitive damages. This Court knows of few other situations more appropriate for such an award. To say that a debtor may act as the defendants did here and pay only the judgments previously awarded would make a mockery of the court and the rights of creditor.\n(Slip Opinion, Tele Ex. 50, pp. 5-6)\n36.10. In re DHO\u0e42\u0080\u0094Fee Applications. In In re D.H. Overmyer Co., 3 B.R. 678 (Bkrtcy.S.D.N.Y. 1980), the Overmyer lawyers acting for the debtor-in-possession objected to the fee applications of the receiver and his attorneys and accountants. In setting out his findings of fact Judge Lewittes began: \"Several facts are clear, although disputed quite unreasonably, in my view, by the objectant.\" 3 B.R. at 684. As to one of the objections, the Court ruled: \"Mr. Taub is now in the employ of the objectant. The debtors' objection with respect to Mr. Taub is so patently frivolous that it simply requires no comment.\" 3 B.R. at 688 n. 68. The Court made clear that none of the objections of the Overmyer lawyers was of any substance:\nIt should be noted\u0e42\u0080\u0094and this applies to all the requests here for compensation\u0e42\u0080\u0094 that to the extent that my allowance of compensation is in an amount less than that requested, such reduction should not be construed in any manner, as an endorsement of any of the clearly inflammatory charges levelled against any of these applicants by the objectant.\n3 B.R. at 685 (emphasis in original). Finally, the Court concluded the opinion as follows:\nIt is beyond dispute that the Receiver, his counsel and accountants, have valiantly toiled in this Court on behalf of the estate in one of the most grueling and arduous Chapter XI cases inaugurated in this District. Unfortunately, these applicants have not only been faced with problems expectantly addressed to their professional skills, but they have been afflicted with an unprecedented collage of innuendo, rumor and invective. The fallout of such has even occasioned the precipitous displacement of my colleague, the learned, distinguished and honorable Bankruptcy Judge from presiding over this case which was originally referred to him.\nRegrettably, the burdens and anguish vented upon those who have been touched by this disagreeable aspect of this case, are not compensable by this tribunal.\n3 B.R. at 689.\n36.11. In re DHO\u0e42\u0080\u0094The Houston Warehouse. In In re D.H. Overmyer Co., 12 B.R. 777 (Bkrtcy.S.D.N.Y. 1981), DHO tried unsuccessfully to assert a new affirmative defense on the last day of trial that was neither pleaded nor preserved in the pre-trial order. (12 B.R. at 792 n. 66)\n36.12. The Fidelity Deposit Case. \"This appeal reveals a crass misuse of both the state and federal judicial systems to avoid the payment of a judgment.\" So the Court began in Overmyer v. Fidelity & Deposit Co. of Maryland, 554 F.2d 539, 540 (2d Cir. 1977). The case involved a bonding company that posted an appeal bond for ODS that was guaranteed by Mr. and Mrs. Overmyer, on which the bonding company was forced to pay $25,535.85 in December, 1973. The *910 facts were everything that the Second Circuit previewed them to be:\nFidelity then commenced an action in the New York State Supreme Court, County of New York, seeking to recover the amount of the judgment plus counsel fees. The defendants in that action were Overmyer Inc. and Daniel H. and Shirley Overmyer. Defendants' motion to dismiss the complaint was denied and Fidelity's cross-motion for summary judgment was granted in an order of Justice Nathaniel T. Helman on November 14, 1974. The Overmyers had questioned the good faith of Fidelity in settling the judgment. However, in an opinion in October, 1974 Justice Helman pointed out:\nThere is no affidavit by any of the defendants. Their counsel may raise questions, whether of fact or of law in Texas but his own clients are the best source of the answers. No question exists as to plaintiff's obligation when it is named as a judgment debtor and execution is granted against it. This is not a case where it was solely the surety. In any event, defendants contracted to indemnify upon payment, whether plaintiff was liable or not. Defendants have no defense against their contract obligation and their attorney cannot create one by surmise, conjecture and suspicion.\nOvermyer appealed from the judgment entered in November, 1974, to the Appellate Division, First Department which unanimously affirmed the judgment on May 20, 1975. Overmyer then moved in the Appellate Division for a stay of enforcement of the judgment. The motion was denied as was another motion to reargue the motion for a stay. Overmyer then applied for leave to appeal to the New York Court of Appeals in both the Appellate Division and the Court of Appeals. Both motions were denied. Overmyer then applied to the United States Supreme Court for an extension of time to petition for a writ of certiorari. This was also denied.\nDuring these appellate maneuverings the Overmyer defendants were also active in the State Supreme Court. On February 21, 1975, they moved by order to show cause to vacate the judgment pursuant to N.Y.C.P.L.R. \u0e07 5015(a)(2) upon the grounds of newly discovered evidence. Justice Markowitz denied the motion on April 11, 1975 finding the purported grounds to be without merit.\nAfter the entry of the judgment in November a subpoena to examine Daniel H. Overmyer to determine his financial status was served upon him returnable on January 17, 1975. At his request the return date was postponed until March 17, 1975 at which time Overmyer failed to appear. Fidelity, the judgment creditor, then brought a motion on notice to punish Daniel Overmyer for contempt. On May 6, 1975 Overmyer, who had received notice of this motion, appeared by his attorneys and opposed the motion. Justice George Postel granted the motion and found Overmyer in contempt of court unless he appeared for examination on June 12, 1975. Characteristically, he failed to appear, and on September 30, 1975 after notice Justice Postel signed an order finding Overmyer in contempt of court and imposed a fine of $260. The court directed that the contempt order would be purged and the fine remitted if Daniel Overmyer appeared for examination on October 29, 1975. Although Overmyer paid the fine in installments he did not appear for the October 29, 1975 examination. On June 4, 1976 after his counsel had filed papers in opposition the court once again found Overmyer in contempt directing the sheriff of any county to compel him to appear at the courthouse for examination under oath. Upon the eve of the directed apprehension Overmyer obtained a stay of the enforcement of the judgment and an order directing Fidelity to show cause why Overmyer should not be granted leave to reargue the prior motion to vacate the judgment on the grounds of newly discovered evidence. This \"newly discovered evidence\" was that Fidelity had influenced Overmyer Inc.'s attorneys in the Texas action *911 to act against the Overmyer defendants' interest. With respect to this evidence Justice Tyler concluded:\n[U]pon a full presentation of defendants \"proof\", it is the view of this Court that there is absolutely no basis for a stay, insofar as the newly-discovered evidence is supposed to support it. All that the defendants have presented is a series of allegations that do not lead this Court to the conclusion that the instant motion should be granted. In point of fact, after reviewing the \"proof\" adduced by defendants, it is the belief of this Court that the instant motion is merely another ploy utilized by Overmyer in an attempt to avoid the full force and effect of a judgment entered in the Court as well as the several orders emanating thereafter.\nUnpublished opinion in Fidelity and Deposit Company of Maryland v. Daniel H. Overmyer, et al., Index No. 5920/74 (Sup. Ct.N.Y. County, June 23, 1976) at 5. After hearing argument on both sides, Justice Tyler denied the motion to reargue, vacated the stay and once again directed that Overmyer appear for examination. The sheriff of any county was authorized to apprehend Daniel Overmyer and compel his attendance for examination at the courthouse on June 29, 1976.\nIn the same opinion of June 23, 1976 Justice Tyler commented:\nThis court finds the litany of evasion and noncompliance in which the defendant judgment debtor has engaged to be absolutely incredible. The utter disrespect which Overmyer has shown, not just for the prior order of this court, but for the entire system of jurisprudence by which this court and this society operates is reprehensible.\nThe efforts of the Overmyers to delay or defeat the day of judgment however did not end. On June 29, 1976 Daniel and Shirley Overmyer brought an action in the Southern District of New York seeking injunctive relief and damages against Fidelity, the State of New York, Justice Tyler, Thomas J. Delaney, the Sheriff of Westchester County and Edward A. Pichler, the Sheriff of New York County.\n554 F.2d at 540-42. The Court held that none of the claims asserted by Mr. Overmyer was of any substance. It then concluded as follows:\n28 U.S.C. \u0e07 1912 and Federal Rule of Appellate Procedure 88 authorize this court upon a determination that an appeal is frivolous to award just damages and single or double costs to the appellee. [Citation omitted]\nThe history of this litigation in the state courts and its continuation in the federal court, even before the Supreme Court had demolished the only semblance of support plaintiffs could muster, serves to illustrate that this appeal was and is frivolous. This court has been utilized, as were earlier the state and district courts, as a device to frustrate the collection of a judgment of a state court. We assess the appellants double costs and in addition $2000 in attorneys' fees.\n554 F.2d at 543. The footnote to the final quotation is as follows:\nIt has not escaped our attention that appellants were assisted by counsel before both the district court and this court in bringing this sham suit and appeal. We have warned counsel in immigration matters about abusing the process in this court to gain delays in deportation. [Citations omitted] The use of this court solely as a dilatory tactic to avoid paying a judgment is a serious breach of professional ethics. [Citations omitted]\nWe remind the Bar that under Fed.R. Civ.P. 11 the signature of an attorney on a pleading \"constitutes a certificate by him that it is not interposed for delay.\" We will not countenance attempts to pervert the federal judicial process into a Dickensian court where lawsuits never end.\n554 F.2d at 543 n. 4. Mr. Overmyer admitted during the taking of his deposition on December 1 and 2, 1981, that he was the one who decided to take the multitude of appeals that were the subject of condemnation in the Fidelity & Deposit Co. of Maryland *912 case. (D. Overmyer Dep., FNBB Ex. 224, pp. 76-77) Indeed, even after all that the Second Circuit said, Mr. Overmyer took yet another appeal. \"This appeal is totally devoid of merit and the issue sought to be litigated here has been previously determined adversely to the appellants in other litigation in which they were involved.\" Overmyer v. Fidelity & Deposit Co. of Maryland, 66 A.D.2d 816, 411 N.Y.S.2d 205 (1978).\n36.13. Confirmation Letters Regarding Notes Payable. Mr. Connery issued instructions to the accounting department on September 21, 1970, not to send out confirmation letters stating the amount due on one of the company's notes, because in some instances they had withheld payment based on claims of setoff of which the payee was unaware, and because they were intentionally withholding payment in many other cases where the legal department might be able to find \"sustainable chargebacks\" if suit were even brought. (9/21/70 Memorandum, FNBB Ex. 403)\n\n37. Cost of Collection\n\n37.1. Summary of Collection Effort. FNBB commenced its efforts to collect the defaulted obligations of DHO, ODS, TOC and Mr. Overmyer in late 1973, after the Warehouse XI was filed. (Levine, 56 Tr. 5744, 5780) Since that date, FNBB has retained the law firms of Ropes & Gray (Boston), Weil, Gotshal & Manges (New York), Baker & Hostetler (Cleveland), Lovett, Hennessey, Stambler & Siebert (Washington) and Eastman, Stichter, Smith & Bergman (Toledo), among others, to collect the defaulted obligations of DHO, ODS, TOC and Mr. Overmyer. (See Summary, FNBB Ex. 358) These firms rendered services with the primary goal of foreclosing on the stock of Telecasting which had been pledged as collateral to secure the obligations. (Levine, 56 Tr. 5747-48) These services were rendered in connection with 39 separate proceedings in 10 different forums, a majority of which proceedings were initiated by DHO, ODS, TOC or Mr. Overmyer. (Levine, 56 Tr. 5738) In addition, counsel retained by FNBB rendered legal services in connection with 57 appeals, only one of which was commenced by FNBB, the remainder being commenced by or on the instruction of Mr. Overmyer. (Levine, 56 Tr. 5738; 57 Tr. 5839-5840)\n37.2. Complexity of Collection Effort. The various legal proceedings in which FNBB was engaged in its efforts to collect the past due obligations and foreclose on the collateral were extremely complex. (Levine 56 Tr. 5747) The factors that made the proceedings so complex were: (1) many of the pleadings were difficult to comprehend (Levine, 56 Tr. 5748); (2) the strategy and tactic of Mr. Overmyer to engage in legal proceedings in multiple forums (Levine, 56 Tr. 5748, 5758-5761, 5764-68); (3) the conduct and obstructionist tactics of Mr. Overmyer, particularly with respect to discovery by FNBB (Levine, 56 Tr. 5748-49, 5770-72; and (4) the large number of appeals taken in the various proceedings (Levine, 56 Tr. 5763-64) The complexity of the case, particularly the use by Mr. Overmyer of multiple forums, necessitated the retention by FNBB of the multiplicity of law firms involved in the collection effort. (Levine, 56 Tr. 5751-5753)\n37.3. Interim Results of Collection Effort. The results achieved by FNBB in the proceedings in which it has been engaged have been significant. (Levine, 56 Tr. 5803) First, notwithstanding the 57 appeals and the litigation in 10 forums and 39 separate proceedings, FNBB kept its collection efforts on track. (Levine, 56 Tr. 5803) Second, FNBB attained the voting control of the stock of Telecasting, placing FNBB in a position to control Telecasting and ensure preservation of the value of the collateral pledged to secure FNBB's loans. (Levine, 56 Tr. 5803-04) Third, over the past eight years, FNBB has been able to overcome every impediment, roadblock or obstacle Mr. Overmyer has placed in its way. (Levine, 56 Tr. 5804)\n37.4. Nature and Hours of Collection Effort. From November, 1973, through March 26, 1982, Weil, Gotshal & Manges expended 8,551 hours in connection with the collection effort (Levine, 56 Tr. 5780), Ropes *913 & Gray expended 16,976 hours (Levine, 56 Tr. 5780) and starting in February, 1981, Baker & Hostetler recorded 8,982 hours (Levine, 56 Tr. 5780). In addition, Lovett, Hennessey, Stambler & Siebert rendered services relating to FCC compliance by WDHO (see Summary, FNBB Ex. 358), and Eastman, Stichter, Smith and Bergman rendered services in connection with the various judicial proceedings in the Lucas County Court of Common Pleas in Toledo, Ohio (see Summary, FNBB Ex. 358). All of these services were in connection with the collection effort, including the preservation of the value of the pledged stock of Telecasting. (Levine, 56 Tr. 5747-48; see Summary, FNBB Ex. 358)\n37.5. Billing for Collection Effort. The composite hourly billing rates billed by the three principal law firms for the total period during which they were involved in the collection efforts were $104 for Ropes & Gray, $81.50 for Weil, Gotshal & Manges and $84 for Baker & Hostetler. (Levine, 56 Tr. 5783) These composite rates, which are a good indication of the use of the various levels of attorneys within a law firm, reveal that the three principal firms were efficient and cost effective in the use of their personnel. (Levine, 56 Tr. 5783-85) The low composite rates of Weil, Gotshal & Manges and Baker & Hostetler is attributable to effective use of junior attorneys; the higher composite rate for Ropes & Gray is the result of most of the strategizing, negotiation and planning being performed by more senior attorneys at Ropes & Gray. (Levine, 56 Tr. 5784) The manner in which the law firms billed FNBB for their services (i.e., on an hourly basis) and the rates at which FNBB was billed were customary in the communities of Boston, New York and Cleveland for similar work performed by similarly situated firms. (Levine, 56 Tr. 5787, 5795, 5799)\n37.6. Cost of Collection Effort. Through March 26, 1982, FNBB had incurred and paid legal costs and expenses in attempting to collect the obligations of DHO, ODS, TOC and Mr. Overmyer of $4,059,217.45, plus nonlegal collection expenses of $169,265.33 and FNBB employee out-of-pocket collection expenses of $38,848.13. (Summary, FNBB Ex. 358, tab 1, p. 1, tab 2, p. 1, tab 3, p. 1) The figure of $4,059,217.45 given by Mr. McArdle (McArdle, 53 Tr. 5408) and used on the chart (Chart, FNBB Ex. 362) was for the legal collection costs only (see Summary, FNBB Ex. 358, tab 1, p. 1) and inadvertently omitted the nonlegal collection expenses and the FNBB employee out-of-pocket collection expenses. It is, therefore, necessary to adjust the collection expense figure (and the total due and owing figures) by $208,113.46 ($169,265.33 plus $38,848.13). The legal collection expenses consisted of $3,444,301.15 of fees and $614,916.30 of disbursements. (Summary, FNBB Ex. 358, tab 1, p. 1) Of the $3,444,301.15 in fees, $3,218,590.87 were for the three principal law firms involved: $1,769,555 for Ropes & Gray, $694,035.87 for Weil, Gotshal & Manges and $755,000 for Baker & Hostetler. (Summary, FNBB Ex. 358, tab 1, p. 305; Levine, 56 Tr. 5782) In light of all the relevant factors, the collection costs incurred and paid by FNBB were and continue to be reasonable and are, in fact, on the low side of the range of reasonableness. (Levine, 56 Tr. 5825)\n\n38. Unreasonable and Vexatious Increase of Costs by Overmyer Counsel\n\n38.1. The Barn Affair. The Overmyer organization keeps its old records in various files and file cabinets in the barn and garage owned by Weathervane Farms, Inc. (Pearlstein, 55 Tr. 5645; Photos, FNBB Exs. 379, 388-89; S. Strang Dep., FNBB Ex. 246, pp. 14-15, 20, 50) Discovery was conducted by FNBB representatives at the barn during the winter of 1980-1981. (McArdle, 53 Tr. 5360; Pearlstein, 55 Tr. 5644-45; Photo, FNBB Ex. 387) During the course of that discovery, Messrs. Connery and Conway, counsel for Mr. Overmyer and various Overmyer family members, attempted to delay, obstruct or prevent discovery by a series of tactics that included restricting hours for inspection and copying, locking doors of the basement of the barn and the garage, physically taking away documents that had been selected for copying, rearranging documents, removing *914 documents from the barn, burning or other physical destruction of documents, assault and battery on an attorney from Ropes & Gray and an attempt by Mr. Overmyer to have the FNBB representatives arrested. (Pearlstein, 55 Tr. 5647-50, 5651-54; Photos, FNBB Exs. 381-86, 390) For example, the FNBB representatives were prevented from examining and copying not only the Sugarman opinion, but also eight boxes of documents pertaining to the Sugarman case. (Raible, 11 Tr. 1018-21; Barn Inventory, Raible Ex. 374) The abuses continued right into this Court, when counsel brought in on the last day of trial a package of fragments of burned documents that had been removed from the barn in direct violation of an order of the Massachusetts Superior Court. (Rispo, 62 Tr. 6309, 6311-15; Order for Discovery, FNBB Ex. 452, \u0e16 2)\n38.2. Instruction To Resist Control Finding. Mr. Connery, a member of the bar, instructed plaintiffs' counsel in this case to assert to defense counsel and to the Court that Mr. Overmyer was in no way connected with or in control of Hadar. (Connery, 24 Tr. 2282) He knew that this contention was frivolous. (See Finding No. 29.8, supra) This is not the first time that Mr. Connery has raised defenses that he knew to be totally without merit. (See, e.g., 7/25/78 Letter Calhoun to Connery, Raible Ex. 632; Findings Nos. 36.1 and 36.2 supra)\n38.3. No Known Address for Mr. Russell Morton Brown. Mr. Russell Morton Brown has represented Mr. Overmyer and his various entities for many years. (See, e.g., Findings Nos. 36.2 and 36.3, supra) He even has a building pass for 3 Park Avenue. (5/25/79 Letter, Raible Ex. 799) Mr. Brown appeared at depositions on behalf of: Mr. Andrew C. Edgerton, the designated witness for Deauville Private Rental Homes, Inc., and NDS and its subsidiary, on December 7, 1981, (Deauville/NDS [Edgerton] Dep., FNBB Ex. 252); Mrs. Barbara Overmyer Strang personally on November 5, 1981, (B. Strang Dep., FNBB Ex. 235); Mr. Stuart K. Strang personally on November 4-5, 1981 (S. Strang Dep., FNBB Ex. 234); Weathervane Farms, Inc., by its designee, Mr. Strang, on November 20 and December 8, 1981, (Weathervane Dep., FNBB Ex. 245); and Mr. David A. Raible personally on November 9, 10, 11, 23 and 24, and December 14-16, 1981 (Raible Dep., FNBB Exs. 262A-262K) At the time of the taking of these depositions, Mr. Brown gave his address as 1800 M Street, N.W., Suite 290 North, Washington, D.C., 20036, and Law Building, 315 Third Street, West Palm Beach, Florida, 33401. (Business Card, FNBB Ex. 249) Both addresses were false. When counsel attempted to serve him with motions to compel answers to questions he had instructed witnesses not to answer, he never received them. (Raible Unredacted Dep., FNBB Ex. 2621, pp. 946-47; see 12/14/81 Transcript, pp. 21-22) When the court reporters sent him mail, it was returned \"addressee unknown.\" (Envelopes, FNBB Exs. 250-51)\n38.4. Mr. Brown's Obstruction of Mr. Raible's Deposition. During the taking of Mr. Raible's deposition on November 9, 10, 11, 23 and 24, and December 14, 1981, Mr. Brown, on 106 separate occasions, instructed Mr. Raible not to answer a question. (Raible Dep., FNBB Ex. 262D, pp. 352, 357, 361; FNBB Ex. 262E, pp. 400, 406, 406, 410, 411, 412, 430, 434, 436, 436, 438, 463, 466, 493, 494, 495, 496, 497, 497, 529, 531, 535; FNBB Ex. 262F, pp. 542, 542, 549, 555, 562, 563, 576, 579, 589, 589, 596, 613, 626, 628, 630; FNBB Ex. 262G, pp. 655, 659, 660, 667, 667, 668, 669, 669, 673, 678, 687, 689, 703, 704, 706, 712, 725, 727, 727, 728, 729, 733, 734, 739, 746, 747, 750, 754, 755, 759, 776, 780, 781, 781, 782, 782, 783, 783, 788, 789, 789, 790, 790, 791, 791, 795, 801; FNBB Ex. 262H, pp. 828, 833, 844, 846, 846, 854, 855, 864, 866, 874, 915, 919, 920, 920, 922, 922, 926, 941; FNBB Ex. 262I, p. 950) Telecasting and FNBB were forced to file a motion to compel answers in this Court on December 7, 1981. (Motion To Compel, Raible Ex. 661; Raible Dep., FNBB Ex. 262I, p. 947) By an order dated December 10, 1981, this Court granted the motion to compel. (Order, Raible Ex. 662; Raible Dep., FNBB Ex. 262I, p. 947) Plaintiffs' counsel moved for reconsideration of the order compelling answers. (12/11/81 Motion To Reconsider) *915 At a hearing on December 14, 1981, the Court heard all counsel, including Mr. Brown, and reaffirmed the order compelling answers. After Mr. Smith asked Mr. Hopkins not to ask the questions to which answers were ordered until after further argument, Mr. Hopkins immediately requested further argument; further argument was had; and the Court again reaffirmed the order. Mr. Hopkins and Mr. Brown then returned to the deposition, while the Court continued to hear other matters. Mr. Brown promptly instructed Mr. Raible not to answer the very first question he had been ordered to answer, and then tried to prevent a return to the Court for a contempt hearing. (Raible Unredacted Dep., FNBB Ex. 262I, pp. 950-52) Mr. Brown's refusal to obey this Court's direct orders necessitated a further hearing that afternoon during which this Court again ordered that the questions be answered and that Mr. Brown stop obstructing discovery. (12/14/81 Transcript of Proceedings, p. 18) Mr. Brown willfully obstructed the deposition of Mr. Raible, because he knew that Mr. Raible would not lie for Mr. Overmyer.\n38.5. Mr. Smith's Obstruction of Mr. Raible's Deposition. After the Court had put an end to Mr. Brown's tactics, Mr. Smith visited the deposition of Mr. Raible on December 15, 1981, together with two associates of Calfee, Halter & Griswold, plus Mr. Brown. (Raible Unredacted Dep., FNBB Ex. 262J, p. 1056) Even after all of the direct orders of this Court, Mr. Eklund of Calfee, Halter & Griswold, instructed Mr. Raible not to answer three of the questions the Court had ordered answered. Those questions remain unanswered today. (Raible Dep., FNBB Ex. 259A, pp. 502-04; Motion To Compel, Raible Ex. 661, p. 2) The obstructionist tactics of Mr. Brown and Mr. Smith added greatly to the length of the Raible deposition. The transcripts of the November 23 and November 24 sessions, for example, contain 3,886 lines of colloquy and only 3,264 lines of testimony\u0e42\u0080\u009454 percent colloquy. (Raible Unredacted Dep., FNBB Exs. 262G and 262H) In order to offer a coherent deposition in evidence at trial, counsel for defendants were required to perform a major editing job. (Compare Raible Unredacted Dep., FNBB Exs. 262A-262K, with Raible Dep., FNBB Exs. 259-259A)\n38.6. Further Obstruction of Discovery. Mr. Brown twice instructed Mr. Strang during his deposition to not answer a question. (S. Strang, Dep., FNBB Ex. 234, pp. 84, 91) He instructed Mrs. Strang during her deposition not to answer on seven separate occasions. (B. Strang Dep., FNBB Ex. 235, pp. 42, 44, 65-66, 67, 68, 73, 77) During the Deauville/NDS deposition, Mr. Brown instructed Mr. Edgerton, who was designated to testify on behalf of those entities pursuant to Fed.R.Civ.P. 30(b)(6), not to answer a question on ten separate occasions, including questions as to whether he was a director or officer of Deauville Private Rental Homes, Inc., and as to who had told him to testify on its behalf. (Deauville/NDS [Edgerton] Dep., FNBB Ex. 252, pp. 34, 34, 34, 35, 35, 35, 35, 36, 36, 36)\n38.7. Misinformation Supplied by Mr. Connery to Mr. Bond. Mr. Connery wrote a letter to Mr. Bond, the Hadar appraisal witness, setting out a computation as to which he stated: \"Hadar in the past has used a formula of which the following is an example.\" (12/15/81 Connery Letter, FNBB Ex. 43, pp. 2-3) The \"formula\" that Mr. Connery set out used a single mark-up of ten percent instead of 20 percent per year. (12/15/81 Connery Letter, FNBB Ex. 43, p. 3; Connery, 20 Tr. 1949-50) Mr. Connery knew that this was not, in fact, the Overmyer Formula. (Connery, 20 Tr. 1936-37) Mr. Connery's testimony that he did not intend that Mr. Bond rely on this misinformation (Connery, 20 Tr. 1948, 1950) is not credible.\n38.8. Obstruction of the Trial. During the course of trial, Messrs. Rispo and Smith, Overmyer counsel, attempted on no fewer than six occasions to delay or stop the trial because of alleged illnesses of Mr. Overmyer, without ever providing the Court with any assurance, or even estimate, of when, if ever, these purported illnesses could be cured or controlled sufficiently to *916 permit Mr. Overmyer to attend the trial. (Arguments, 1 Tr. 35-40, 5 Tr. 383-438, 19 Tr. 1815-22, 25 Tr. 2364-71, 48 Tr. 4692-98, 49 Tr. 4817-51; Affidavit, Overmyer Ex. 4; Affidavits, Overmyer Exs. 1-3 [identification only]) The Overmyer counsel filed 14 interlocutory appeals, including two interlocutory appeals from the refusals of the Court to stop the trial because of the purported illness. Two of the appeals were presented to the District Court ex parte while counsel for the defendants were right in the courtroom trying this case. (The Court, 7 Tr. 596-98) One of these was the only one of the 14 that was allowed. After this episode, the Court ordered that \"pleadings filed hereafter, when the attorneys are in the courtroom should be served upon them in the courtroom.\" (The Court, 7 Tr. 596) Nevertheless, Overmyer counsel applied ex parte to the New York Bankruptcy Court for an order removing DHO from the trial in this Court. (Smith, 51 Tr. 5103-04) When Mr. Smith refused to disclose his knowledge of this maneuver, he was called as a trial witness. (Smith, 51 Tr. 5104-05) During his testimony and from an affidavit that he tried to withhold from the Court, it became clear that Mr. Smith had participated actively in the decision to proceed ex parte, and that the reason for this extraordinary tactic was the awareness of all Overmyer counsel that they were losing in this Court. (Smith, 51 Tr. 5114-15, 5117, 5120-21; 4/13/82 Findings of Fact and Conclusions of Law, p. 3, \u0e16 5) It also became clear that Mr. Smith's initial characterization of the action of the New York Bankruptcy Court was inaccurate and that, in fact, the New York Court had denied the application to rescue DHO from this Court. (Compare Smith, 51 Tr. 5137-40, 5141-42, with Smith, 51 Tr. 5103) When Mr. Smith testified that the Overmyer counsel intended to present a form of order to the New York Court, this Court once again made clear, over the objection of Calfee, Halter & Griswold, that its order to serve papers on counsel sitting in the courtroom applied to all papers that might affect the trial of this adversary proceeding, wherever counsel might choose to file them. (Smith, 51 Tr. 5150-52; see Smith, 51 Tr. 5114) Nevertheless, Overmyer counsel proceeded ex parte to present an order to the New York Court in flagrant violation of this Court's order. (The Court, 56 Tr. 5774-77) After notice to all interested parties and a proper hearing, this Court entered findings of fact and conclusions of law on April 13, 1982, to the effect that DHO remains a party, and will be bound by this Court's judgment.\n\n39. Amounts Due\n\n39.1. Amount Due From Hadar To Telecasting. The amount due from Hadar to Telecasting, the amount that has been extracted by the Overmyer organization and should be restored to Telecasting, is $2,520,240.02. (H. Klein, 31 Tr. 3498; see Finding No. 20.4, supra).\n39.2. Amount Due From DHO, ODS, TOC and Mr. Overmyer to FNBB. The total amount due from DHO, ODS, TOC and Mr. Overmyer to FNBB, including principal, interest and costs of collection, was $22,393,775.27 ($22,185,661.81 plus $208,113.46) as of March 31, 1982, $22,409,699.13 ($22,201,585.67 plus $208,113.46) as of April 2, 1982, and $22,425,622.99 ($22,217,509.53 plus $208,113.46) as of April 4, 1982. (McArdle, 53 Tr. 5408, 5412-13, 54 Tr. 5634; Chart, FNBB Ex. 362; Calculation Sheet, FNBB Ex. 375; see Findings Nos. 5.17, 8.13, 9.4 and 37.6, supra.)\n\nDISCUSSION\nWhile this case involves a host of legal issues, the most important question is whether any or all of Mr. Overmyer's corporate transfers were fraudulent conveyances.\nThe Uniform Fraudulent Conveyance Act, adopted in Ohio, New York and Massachusetts, provides in Section 7 that: \"Every conveyance made and every obligation incurred with actual intent, as distinguished from intent presumed in law, to hinder, delay, or defraud either present or future *917 creditors, is fraudulent as to both present or future creditors.\"[3]\nFraudulent conveyance law has ancient origins and its analysis usually begins with Twyne's case, 3 Co.Rep. 80b, 76 Eng.Rep. 809 (Star Chamber 1601). In Twyne's case, C. sued Pierce on a debt owed by Pierce to C. While the suit was pending, Pierce transferred all his property (mostly sheep) to another creditor, Twyne, in satisfaction of Twyne's claim. However, Pierce continued to possess, sell, brand and shear the sheep. Realizing the difficulty in proving subjective fraudulent intent, the Court reasoned that fraudulent intent can be found where \"badges of fraud\" are discovered.[4]\nIn Twyne's case, the Star Chamber found:\n(1) the transfer was complete and without exception of Pierce's apparel or anything of necessity;\n(2) Pierce continued to exercise dominion and control over the sheep and other property;\n(3) the transfer was made by a secret trust; and\n(4) the transfer was made while the suit by C. was pending.\nWith the existence of these \"badges of fraud,\" the Star Chamber had little difficulty in concluding that Pierce's conveyance of all his goods to Twyne was made with the intent to defraud C.\nAn examination of the Overmyer case presently before the Court indicates that fraud and deceit have come a long way since 1601. This Court has heard evidence of and witnessed fraudulent and deceitful manipulation of facts, corporate fictions and the court system. This Court has never encountered such a systematic distortion of truth and the legal system. However, as clever as Mr. Overmyer's system was, it still left numerous \"badges of fraud.\"\n1. The transfer of funds or of assets by a debtor for inadequate or non-existent consideration is a \"badge of fraud\" which raises a presumption that the debtor acted with actual fraudulent intent. In Scola v. Morgan, 66 A.D.2d 228, 412 N.Y.S.2d 893 (1979), a transfer of all an individual's major assets to a corporation controlled by his wife, which had no assets before the transfer, was fraudulent as to his creditors where there was no consideration for the transfer. See also Squire v. Raymond, 34 Abs. 79, 35 N.E.2d 976 (Ohio App., 1941). Weathervane Farms, Intermodal Terminals and Jeebs did not provide any consideration for the acquisition of their property interests.\n(a) The deeds conveying the Overmyer farm from Mr. Overmyer to Intermodal Terminals were recorded in August and September, 1973, for a total consideration of $20. (Deeds, FNBB Exs. 86-87) The deeds themselves, however, were back dated to February 7, 1972. (Deeds, FNBB Exs. 86-87; see Findings of Fact 12.2, supra pp. 53-54)\n(b) The evidence demonstrates that Weathervane Farms, Inc. acquired the Weathervane Farm property from the Estate of Mabel M. Gabriel on August 15, 1978, for a purchase price of $800,000. (Deeds, FNBB Ex. 204; see Findings of Fact 23.15, supra pp. 116-17) Stuart Strang, Mr. Overmyer's son-in-law, delivered checks totaling $266,807.53 at the closing on August 15, 1978. (Checks 1002, 1003 and 1006, Weathervane Ex. 7, pp. 2, 4; Check Stubs 1002, 1003 and 1006, Weathervane Ex. 4; H. Klein, 36 Tr. 3360; see Findings of Fact 23.15, supra pp. 116-17) The month preceding this acquisition, Weathervane Farms, Inc. had virtually no assets at all. Mr. Strang has no idea from where the money to cover the checks came. (Weathervane Dep., FNBB Ex. 246, p. 26; see Findings of *918 Fact 23.15, supra pp. 116-17) The accounting records of Weathervane Farms, Inc. show cash receipts totaling $271,390.01 between July 26, 1978, and August 16, 1978. (Weathervane Cash Receipts Journal, Weathervane Ex. 2; H. Klein, 36 Tr. 3359; see Findings of Fact 23.17, supra pp. 117-18) The testimony of FNBB's expert witness at the trial, Mr. Howard Klein, and the inferences to be drawn from the unexplained gaps in Telecasting's records for 1977 and 1978, show by a preponderance of the evidence that the funds used by Weathervane Farms, Inc. to purchase this property were taken from Telecasting for no consideration whatsoever. (Findings of Fact 23.18, supra pp. 118-20) Moreover, payments on the $500,000 mortgage on the Weathervane Farms property have been made directly and indirectly by moneys siphoned from Telecasting. (See Findings of Fact 23.16, supra p. 117) Weathervane Farms, Inc. received moneys from Telecasting, Hadar, AGG and Omega, which were evidenced by cash receipts, even though Weathervane provided no service for these payments. (Findings of Fact 23.18, supra pp. 118-20) At least $34,575.66 of Weathervane's receipts from Hadar were matched by checks from Telecasting to Hadar for no consideration, and it is reasonable to infer that substantially greater amounts were received for no consideration by Weathervane from Telecasting indirectly through Mr. Overmyer's so-called \"service companies,\" AGG and Omega. (Findings of Fact 23.16, 23.18, supra pp. 117, 118-20) All of these transactions were completed at Mr. Overmyer's direction, and were fully intended to deprive FNBB of the value of its collateral, Telecasting.\n(c) Jeebs owns valuable leasehold assets on the 29th floor of 3 Park Avenue and apartment 22G at 4 Park Avenue. (Connery Dep., Ex. 231, pp. 386-87; Raible Dep., Ex. 259, pp. 68-69; Findings of Fact 23.14, supra p. 116) Two rental payments for 4 Park Avenue have been made directly by Telecasting. (Findings of Fact 23.14, supra p. 116) The balance of the rental payments were made almost entirely by the purported \"service companies,\" Jeebs, AGG and Omega. (See Findings of Fact 23.7, supra pp. 110-11) These companies acquired their funds pursuant to \"service\" agreements created by Mr. Overmyer between them and Telecasting. (Findings of Fact 23.8, 23.9, supra pp. 111-12) From March, 1974, through December 31, 1977, Telecasting was obligated to pay Jeebs between $1,500 and $2,600 per month for its \"services.\" (Findings of Fact 23.1, supra pp. 107-08) Thereafter, Telecasting became obligated to pay AGG $5,900 per month for \"services rendered\" through August 31, 1979. (1/1/78 Service Agreement, Raible Ex. 774; Findings of Fact 23.1, supra pp. 107-08) Telecasting's \"service\" obligation was then transferred back to Jeebs in the amount of $10,000 per month through October 31, 1980. (9/1/79 Service Agreement, Raible Ex. 774; Findings of Fact 23.1, supra pp. 107-08) A final \"service\" agreement obligated Telecasting to pay Omega $10,000 per month for the duration of the contract. (11/1/80 Telecasting Minutes, Tele Ex. 29; Findings of Fact 23.1, supra pp. 107-08) In spite of these enormous payments by Telecasting to the \"service companies,\" Arthur Dorfner, the president of Telecasting until 1980 and its chief operating officer until 1979, could not recall any services provided to Telecasting from Jeebs, AGG or Omega. (Dorfner Dep., FNBB Ex. 240, pp. 16-18; Findings of Fact 23.2, supra p. 108) Hadar was obligated to Jeebs, AGG and Omega in amounts varying between $2,000 to $25,000 per month in the period between 1976 and 1981. (Findings of Fact 23.3, supra p. 108) The service agreements with Hadar are back dated fabrications and, like the service agreements made directly with Telecasting, were engineered by Mr. Overmyer to siphon and fraudulently transfer, for his personal use, enormous sums of money from Telecasting for grossly unfair consideration. (Findings of Fact 23.5, supra pp. 109-10) The record before this Court demonstrates that the payments on the leaseholds at 3 and 4 Park Avenue came from Telecasting and were transferred by Mr. Overmyer with actual intent to defraud FNBB.\n*919 2. A common \"badge of fraud\" is the retention of possession of property by a debtor after he purported to transfer it. Takacs v. Kapela, 264 App.Div. 871, 35 N.Y.S.2d 502 (1942); Bemet v. Dean, 246 App. Div. 670, 283 N.Y.S. 172 (1935); Hombeck v. Vanmetre, 9 Ohio 153 (1839); Starr v. Starr, 1 Ohio 321 (1824). The Overmyer farm, though transferred to Mr. Overmyer's nominee corporation, Intermodal Terminals, Inc., has continuously remained in his possession and control. (Findings of Fact 12.2, 29.1, 29.2, supra pp. 53-54, 142-44)\n3. A debtor's conveyance of substantial assets to corporations which he dominates and controls is often evidence of actual intent to defraud creditors. First National Bank of Chicago v. Trebien Co., 59 Ohio St. 316, 52 N.E. 834, 837 (1898); Scola v. Morgan, 66 A.D.2d 228, 412 N.Y.S.2d 893, 896-97 (1979). The evidence in this case has established conclusively that Mr. Overmyer exercises complete and full control over his corporate nominees, Weathervane, Intermodal and Jeebs. (Findings of Fact 29.1, 29.2, supra pp. 142-44) The purpose of Mr. Overmyer's transfers from Telecasting to Weathervane and Jeebs and from himself to Intermodal was to deprive FNBB of the value of its security and guarantee of its loan, and to personally enrich Mr. Overmyer and his immediate family. That purpose, combined with the transfers failing to be supported by fair consideration, enables the inference of an intent by Mr. Overmyer to defraud FNBB.\n4. Another \"badge of fraud\" tending to prove Mr. Overmyer's actual fraudulent intentions is his 1973 transfer of the stock of at least 15 of his nominee corporations, including Weathervane, Intermodal, Hadar and ISLI, to trusts for the benefit of his immediate family. These transfers were made with actual intent to defraud FNBB. The evidence has demonstrated that Messrs. Overmyer and Connery transferred 14 of Overmyer's nominee corporations, including Intermodal Terminals, ISLI and Hadar, to the Bermuda trust between August 13, 1973, and December 10, 1973. (Findings of Fact 12.1, supra pp. 50-53) The deeds and minutes have been back dated by Mr. Overmyer and Mr. Connery, however, such that they purport to show (a) Mr. Overmyer conveyed the Overmyer farm to Intermodal on February 7, 1972; (b) the Intermodal stock was transferred from TOC to Mr. Overmyer the next day, February 8, 1972; (c) that the stock of ISLI, Hadar and 12 other corporate nominees were also transferred from DHO to TOC to Mr. Overmyer on February 8, 1972; and (d) that Mr. Overmyer transferred the stock of all these corporations to the Bermuda trust on April 14, 1972. (Id.) It is evident, however, that all of these transactions actually occurred between August 13 and December 10, 1973. (Id.) The stock of Weathervane Farms, Inc. was transferred to separate trusts during the same period of September and October, 1973. (Findings of Fact 12.3, supra pp. 54-56) Weathervane Farms, Inc. currently holds between 80 and 85 percent of the stock of Jeebs. (Findings of Fact 23.19, supra pp. 120-21) The records created by Messrs. Overmyer and Connery purport to reflect that Mrs. Overmyer purchased the stock of Formodal, Inc., Weathervane Farm's predecessor, on May 26, 1973, from her husband, Mr. Overmyer. (Deauville Stock Certificate No. 3, Weathervane Minute Book, Weathervane Ex. 1; Findings of Fact 12.3, supra pp. 54-56) She then claims to have transferred 20 percent of the Weathervane stock to Weathervane which, in turn, sold it to the Harrison M. Overmyer trust, and claims to have transferred the other 80 percent to the Barbara M. Overmyer (Strang) trust. (Findings of Fact 12.3, supra pp. 54-56) However, the bank endorsement on Mrs. Overmyer's cancelled check shows that it was not deposited until October 15, 1973, and a confidential memorandum from Mr. Connery to Mr. Overmyer conclusively shows that the transaction could not have occurred prior to September 25, 1973. (Checks, Deauville Minute Book, FNBB Ex. 261, pp. 97-98; 9/25/73 Memorandum, Weathervane Minute Book, Weathervane Ex. 1, p. 53; Findings of Fact 12.3, supra pp. 54-55)\n*920 5. The timing of Mr. Overmyer's stock transfer evidences his intent to defraud FNBB. Mr. Overmyer made the stock transfers when he knew his accounts were being seriously overdrawn. All of these back dated stock transfers to trusts for the benefit of the Overmyer family actually occurred between August 13, 1973, and December 10, 1973. (Findings of Fact 12.1, 12.2, 12.3, supra pp. 50-56) In this same period, between August 31, 1973, and November 30, 1973, Mr. Overmyer caused checks to be drawn on the ODS account with FNBB, increasing its overdraft by $2,858,994.75. (McArdle, 53 Tr. 5347-49; Lake, 59 Tr. 6059-60; Findings of Fact 9.2, supra p. 44)\n6. Mr. Overmyer's control over the business affairs of Telecasting also exhibits an intent to hinder, delay and defraud creditors. Telecasting's scheme (while controlled by Mr. Overmyer) to hinder, delay and defraud its creditors by, among other things, entering into unconscionable leases that would enable Hadar to seize all of its earnings, may be summarized as follows:\n(a) On December 15, 1975, Mr. Overmyer caused TOC to file a Chapter XI petition. Mr. Overmyer admitted in an affidavit attached to the petition that the filing was to prevent FNBB from enforcing its security interest in the capital stock of Telecasting, which had been pledged by TOC. (Application for Injunction, FNBB Ex. 430; see Findings of Fact 15.1, supra p. 60) The foreclosure had been scheduled for December 17, 1975. (Notice of Auction Sale, FNBB Ex. 430, p. 3; Findings of Fact 15.1, supra p. 60)\n(b) TOC is still in Chapter XI and has not paid its creditors for more than six years.\n(c) FNBB requested the Court of Common Pleas for Lucas County, Ohio, to appoint a receiver for Telecasting to protect its assets until FNBB could get leave to consummate its foreclosure. (Findings of Fact 15.2, supra pp. 60-61) When the Court indicated a willingness to appoint a receiver, Mr. Overmyer caused Telecasting to commence a Chapter XI case to avoid the appointment of a receiver. (Findings of Fact 15.2, supra pp. 60-61)\n(d) Mr. Overmyer then caused Telecasting to enter into the purported leases with Hadar, which had the effect of transferring Telecasting's money to Hadar for no consideration. The unconscionable and fraudulent nature of the leases may be summarized as follows:\ni. Telecasting's board of directors authorized Telecasting to lease equipment from Hadar at whatever price Hadar would determine. (10/25/79 Telecasting Minutes, Tele Ex. 29) See Sunbeam Farms, Inc. v. Troche, 32 U.C.C.Rep. 733 (N.Y. Civil Ct. Bronx Cty. 1981).\nii. Hadar charged Telecasting a two percent commitment fee for many of the purported leases, but no useful services were rendered for such fees. (Findings of Fact 17.3, supra pp. 67-68)\niii. Mr. Overmyer, an officer and director of Telecasting, directed that Telecasting should be charged the commitment fees. (Raible Dep., FNBB Ex. 259A, p. 355; Findings of Fact 17.3, supra pp. 67-68)\niv. Hadar charged Telecasting rent according to a formula that would repay Hadar the cost of the equipment over the term of the lease and, in addition, provide Hadar a rate of interest far in excess of any rate that would be set in arm's-length bargaining, even though Hadar used Telecasting's moneys and did not invest its own funds. (Findings of Fact 17.13, supra pp. 73-74)\nv. Additionally, the formula provided for Telecasting to pay Hadar a 20 percent deposit at the commencement of each purported lease. (Raible, 2 Tr. 199-200; Findings of Fact 17.2, 17.13, supra pp. 67, 73-74)\nvi. The formula was applied to Hadar's fully loaded price when Hadar financed the equipment, thereby charging Telecasting for the cost of Hadar's financing. (Raible, 8 Tr. 688; H. Klein, 29 Tr. 2847-48; Findings of Fact 17.14, supra pp. 74-75)\nvii. As applied to installment contracts and equipment leases, the formula provided for Telecasting to pay to Hadar at every moment more than Hadar was obligated to *921 pay to its vendors. (Findings of Fact 17.14, supra pp. 74-75)\nviii. Hadar generally failed to pay its vendors for the equipment leased to Telecasting. (Findings of Fact 17.11, 17.12, supra pp. 71-73)\nix. In some instances, Telecasting itself paid for the very equipment it leased from Hadar. (See Findings of Fact 18.6, supra pp. 87-88)\nx. Raible knew of no instance where leases were not renewed at their original terms. (Raible, 8 Tr. 686-87, 695; Findings of Fact 17.4, supra p. 68) Thus, Telecasting was forced to pay for the same equipment over and over again.\nxi. The purported leases did not transfer title of the equipment to Telecasting, no matter how many times Telecasting paid for it. (Findings of Fact 17.4, supra p. 68)\nxii. According to purported lease H-1002 currently relied on by Hadar, Telecasting would have to pay Hadar approximately $4,392,748 for equipment costing Hadar $1,321,201, a markup of over 300 percent. (Findings of Fact 16.10, supra p. 66)\nxiii. Through January, 1981, Telecasting paid Hadar $2,779,368.26, while Hadar paid only $569,731.98 to the vendors of the equipment subject to the purported leases. (Findings of Fact 20.4, supra pp. 97-98)\nxiv. In respect of the equipment that was the subject of the settlement with Hundred East, Hadar relies on three additional leases (H-1043, H-1044 and H-1045), whereby Hadar would charge Telecasting approximately $3.67 million, a 62 percent markup. There was no evidence offered at trial of any services provided by Hadar to Telecasting. The markups, therefore, are for no consideration. (Findings of Fact 19.1-19.10, supra pp. 90-95)\nxv. Hadar warrants nothing under the leases. (Lease \u0e16 4, Pl. Ex. 2; Findings of Fact 17.1, pp. 66-67)\nxvi. If there is a defect in equipment, Telecasting may claim against the vendor, but must continue paying rent to Hadar. (Lease \u0e16 6, Pl. Ex. 2; Findings of Fact 17.1, supra pp. 66-67)\nxvii. Telecasting must maintain and repair the equipment at its own expense. (Connery, 20 Tr. 1936; Raible, 4 Tr. 331; Findings of Fact 17.1, supra pp. 66-67)\nxviii. Telecasting indemnifies Hadar for all claims arising out of Hadar's ownership, selection and leasing of the equipment. (Lease \u0e16\u0e16 3 and 10, Pl. Ex. 2; Findings of Fact 17.1, supra pp. 66-67)\nxix. Telecasting shall maintain insurance payable to Hadar. (Lease \u0e16 11, Pl. Ex. 2; Raible, 6 Tr. 528; Findings of Fact 17.1, supra pp. 66-67)\nxx. For any default, even a nonmonetary default, Hadar may take possession of the equipment and thereby terminate all of Telecasting's rights. (Lease \u0e16 16, Pl. Ex. 2; Findings of Fact 17.1, supra pp. 66-67) United States v. Bedford Associates, 657 F.2d 1300 (2d Cir. 1981); Pittsfield Weaving Co., Inc. v. Grove Textiles, Inc., 32 U.C.C. Rep. 421 (N.H.Sup.Ct.1981); Fleischman Distilling Corp. v. Distillers Co. Ltd., 395 F.Supp. 221 (S.D.N.Y.1975); Louisiana Power & Light Co. v. Allegheny Ludlum Industries, Inc., 517 F.Supp. 1319 (E.D.La. 1981); J.J. White & R. Summers, Handbook of the Law Under the Uniform Commercial Code, \u0e07 4-3 at 151 (2d ed. 1980)\n(e) Hadar disbursed the money from Telecasting to other Overmyer companies almost immediately after receiving it. See In re Thomas, 199 F. 214 (N.D.N.Y.1912). (Findings of Fact 22.3, supra pp. 105-06); see generally Findings of Fact 22.1-22.7, supra pp. 103-07.\n(f) While Telecasting was in Chapter XI from August 24, 1976, until February 6, 1981, as debtor-in-possession it incurred millions of dollars of debt it did not pay, which is evident by, inter alia, simply comparing Telecasting's Chapter XI petition of August 24, 1976, with its Chapter 11 petition of February 6, 1981. (See also Findings of Fact 28.1, supra pp. 138-40)\n(g) Telecasting was paying moneys to Hadar for no consideration, while having insufficient funds to pay its own new debts. See Lytle v. Andrews, 34 F.2d 252 (8th Cir. *922 1929); cf. In re Rockaway Soda Water Mfg. Co., 226 F. 520 (E.D.N.Y.1915).\n(h) At all relevant times from and after August 31, 1977, Telecasting was hopelessly insolvent. (Findings of Fact 28.1, supra pp. 138-40)\n(i) Telecasting and Hadar treated the purported leases as shams. There were no regular payments, there were no matchings of leases to equipment and there were leases for nonexistent equipment. The sole purpose of the purported leases was to provide documents for Hadar to pull out of a hat, at its whim, to use to hinder, delay and defraud FNBB and Telecasting's creditors.\nBased upon the \"badges of fraud\", as heretofore described, this Court concludes that Mr. Overmyer transferred real property among his corporations, transferred stock to trusts and transferred money out of Telecasting with the actual intent to hinder and delay the claims of FNBB and other creditors.\nMr. Overmyer also manipulated the judicial system to prevent FNBB from discovering his fraudulent transactions and to wrongfully deprive FNBB of its valid claims. Mr. Overmyer's pursuit of this scheme has involved (1) the submission of materially false and misleading appraisals of Telecasting's value in an effort to prevent FNBB from enforcing its security interest in Telecasting's capital stock; (2) the submission of sworn affidavits to several courts by Mr. Overmyer, stating that FNBB would not be harmed by further delay in the enforcement of its security interest in Telecasting's capital stock while he continued to fraudulently extract money from Telecasting; (3) the filing of frivolous suits in multiple forums to frustrate FNBB's efforts to protect Telecasting's assets and to enforce its security interests; and (4) to take advantage of the delay and confusion engendered by the existence of multiple forums, pitting one court against another, thereby permitting Mr. Overmyer to siphon funds from Telecasting and to fraudulently convey his own and any other assets FNBB might reach to satisfy its claims.\nMr. Overmyer's submission of Edwin Tornberg's appraisal of Telecasting's value was a false and materially misleading representation to the courts and to FNBB. Mr. Tornberg was told by Mr. Overmyer to base his appraisal on the false premise that Telecasting owned all the equipment it used. Mr. Overmyer submitted this appraisal to several courts, even though he knew that virtually all of the property and equipment utilized by Telecasting was subject to purported leases held by Hadar, one of his nominee corporations. Mr. Overmyer intended the courts and FNBB to rely on this appraisal in preventing them from discovering the true facts. These representations alone, to the extent relied upon by the Court and FNBB, amount to an actionable fraud. See Johnson v. Sachs, 7 App.Div.2d 939, 181 N.Y.S.2d 862 (1959). False and misleading representations are actionable, even if communicated indirectly, if the statement was intended to be so communicated to the injured party. Wells v. Cook, 16 Ohio St. 67 (1865).\nMr. Overmyer intentionally misrepresented in his affidavits that FNBB would not be harmed by delay in the enforcement of its security interest in the capital stock of Telecasting. These statements delayed FNBB's ability to enforce its security interest while allowing Mr. Overmyer to continue to siphon moneys from Telecasting, thereby depriving FNBB of its claim.\nTelecasting's Chapter XI is another example of Mr. Overmyer's fraudulent misuse of the judicial system to avoid payment of FNBB's valid claims. FNBB's initial attempt to sell the capital stock of Telecasting was frustrated by TOC's Chapter XI filing in New York. FNBB thereupon prosecuted its action in the Court of Common Pleas in Lucas County, Ohio, in an effort to remove Telecasting from Mr. Overmyer's control by having a receiver appointed. Once the judge indicated that he intended to appoint a receiver for Telecasting, Mr. Overmyer immediately caused Telecasting, which at trial he had claimed to be solvent, to file a petition for an arrangement under Chapter XI in the Southern District of New *923 York alleging in New York that Telecasting was insolvent. Mr. Overmyer thus divested the Ohio court of jurisdiction and prevented the appointment of the court-ordered receiver. Mr. Overmyer's actions were taken solely for the purpose of retaining control of Telecasting's operations to enable him to continue fraudulently extracting moneys from Telecasting. Mr. Overmyer's manipulation of the courts gives rise to a claim by FNBB for fraud. See Kermit Construction Corp. v. Banco Credito y Ahoro Ponceno, 547 F.2d 1 (1st Cir. 1976); Annot., Right of Creditor to Recover Damages for Conspiracy to Defraud Him of Claim, 11 A.L.R.4th 345.\nThe trial of this adversary proceeding has seen examples of Mr. Overmyer's attempt to pit one court against another. Without notice to any of the parties to this proceeding, DHO petitioned Judge Joel Lewittes, presiding over the TOC and DHO Chapters XI in New York, to declare DHO's intervention and participation in this trial to be a \"nullity.\" Judge Lewittes issued such a declaration without counsel for DHO fully apprising him of the facts or the applicable law. The record in this case is replete with other such instances of dilatory, deceitful and manipulative tactics employed by Mr. Overmyer in attempting to deprive FNBB of its valid claims.\nFNBB is entitled to recover all reasonable attorney fees and other expenses incurred in furtherance of the ultimate goal of collecting an overdue indebtedness, if the parties have agreed that those costs are to be borne by the debtor. In Leventhal v. Krinsky, 325 Mass. 336, 90 N.E.2d 545 (1950), the court stated:\nWe do not concur in the contention of Leventhal that, as the costs and expense are restricted to those incurred, to quote the language of the note, in \"the enforcement and collection hereof,\" only costs and expense arising out of an action on the note or directly connected therewith can be recovered by Krinsky. The foreclosure proceedings, the suit on the guaranty, and the present suit, brought originally to preserve the mortgaged property but now narrowed to establishing the rights of the parties in the fund, are all based on the indebtedness arising out of the mortgage note, and the aims and object of all of these proceedings were directed to collecting the amount due Krinsky on the note. All counsel fees reasonably incurred by Krinsky in these efforts to collect the note are legal expense arising out of the collection of the note.\n90 N.E.2d at 548. (emphasis supplied) Similarly, in Covich v. Chambers, 8 Mass. App. 740, 397 N.E.2d 1115 (1979), the court concluded that the successful defense of actions seeking cancellation and recission was \"intrinsic to establishing a default on the note,\" and that fees attributable to the defense of those actions were recoverable as costs of collection. 397 N.E.2d at 1123.\nThe decision in the Levanthal case makes clear that all reasonable fees paid and expenses incurred by FNBB are recoverable as costs of collection from the obligors. The dockets in actions where FNBB has been involved, of which this Court can take notice, and the unrefuted testimony and analysis of FNBB's expert, Richard L. Levine, Esquire, (hereinafter \"Levine\") demonstrate that the voluminous filings prepared by FNBB's attorneys were necessitated by the obligors' strategy to delay and obstruct FNBB's efforts to collect the outstanding loans. FNBB's expenses in overcoming these obstacles are, in accordance with the decision in the Covich case, recoverable as costs of collection under Massachusetts law.\nThe costs and fees incurred by FNBB from 1973 to the present are recoverable under federal, as well as Massachusetts law. All actions taken by FNBB in all proceedings relating to collection of the loans and foreclosure of the collateral were reasonably calculated to protect FNBB's rights. In In re Continental Vending Machine Corp., 543 F.2d 986 (2d Cir. 1976), the court stated:\nTalcott would be entitled to compensation for such services as were reasonably necessary to obtain the appointment of a *924 receiver for the pledged assets, the filing of proofs of claim in the bankruptcy proceeding, the negotiation and arrangement for the sale and liquidation of the security and the taking of such steps as were essential to preserve Continental as a viable business enterprise so that it could be sold as a going concern.\nId. at 994. In Taylor v. Continental Supply Co., 16 F.2d 578 (8th Cir. 1926), the court stated: \"We think the provision of the notes providing for attorneys' fees covered the cost of legal services to which plaintiff should be put in connection with the collection of its claim by court proceedings.\" Id. at 580. In Duryea v. Third Northwestern National Bank, 606 F.2d 823 (9th Cir.1979), the court affirmed an award of attorney fees incurred by a bank in defending an action brought by its debtor to prevent the enforcement of a note. Agreeing with the trial court's opinion that the fees were recoverable because it was \"necessary for the Bank to defend against such an action in order to collect on the note,\" the Court of Appeals concluded that costs of collection included all costs attributable to collecting on the note. Id. at 826. As stated by the court in In re United Merchants and Manufacturers, 674 F.2d 134 (2d Cir.1982): \"the controlling inquiry with respect to recovery of attorneys' fees is whether the creditor reasonably believed that the services employed were necessary to protect his interests in debtor's property.\" Id. at 140. See also Jaeger v. Canadian Bank of Commerce, 327 F.2d 743, 745-46 (9th Cir.1964).\nFNBB incurred expenses when it participated in various reorganization proceedings commenced by the obligors and other Overmyer entities. These expenses, as well as those resulting from actions directly against the obligors, are recoverable as costs of collection under both Massachusetts and federal law.\nMassachusetts law governs the loans and the validity and construction of provisions in the loan documents for payment of reasonable attorney fees and other related costs of collection upon default. Determination of whether state or federal standards of reasonableness apply, however, is of no import in this case. First, the standards applied under Massachusetts and federal law are similar. Second, the collection costs claimed by FNBB are reasonable, regardless of the standard applied.\nIn Cummings v. National Shawmut Bank of Boston, 284 Mass. 563, 188 N.E. 489 (1934), the Supreme Judicial Court of Massachusetts stated:\nIn determining what is a fair and reasonable charge to be made by an attorney for his services many considerations are pertinent, including the ability and reputation of the attorney, the demand for his services by others, the amount and importance of the matter involved, the time spent, the prices usually charged for similar services by other attorneys in the same neighborhood, the amount of money or the value of the property affected by the controversy, and the results secured. Neither the time spent nor any other single factor is necessarily decisive of what is to be considered as a fair and reasonable charge for such services.\n188 N.E. at 492. Fees of $760,000 were deemed reasonable even though fees based on time spent and customary hourly rate would only have been $102,000. First National Bank of Boston v. Brink, 372 Mass. 257, 361 N.E.2d 406, 411 (1977). In short, reasonable attorney fees are to be determined \"in the light of all relevant circumstances.\" Muldoon v. West End Chevrolet, 338 Mass. 91, 153 N.E.2d 887, 891 (1958).\nThe leading federal case defining the standards for determining reasonable attorney fees is Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974). In Johnson, the court stated that the following 12 factors were to be considered in assessing the reasonableness of attorney fees:\n(1) The time and labor required; (2) The novelty and difficulty of the questions; (3) The skill requisite to perform the legal service properly; (4) The preclusion of other employment by the attorney due to the acceptance of the case; (5) The customary fee; (6) Whether the fee is fixed *925 or contingent; (7) Time limitations imposed by the client or the circumstances; (8) The amount involved and the results obtained; (9) The experience, reputation, and ability of the attorneys; (10) The \"undesirability\" of the case; (11) The nature and length of the professional relationship with the client; (12) Awards in similar cases.\nId. at 717-19. In Northcross v. Board of Education, 611 F.2d 624 (6th Cir.1979), the Sixth Circuit Court of Appeals accepted the Johnson guidelines, which it had relied upon in Monroe v. County Board of Education, 505 F.2d 109 (6th Cir.1974), as \"relevant factors\" in determining reasonable attorney fees. 611 F.2d at 642. However, the court concluded:\nWe have learned through experience . . . that merely providing a check list of factors to consider does not lead to consistent results, or, in many cases, reasonable fees. Many of the factors are overlapping, and there is no guidance as to the relative importance of each factor, or indeed, how they are to be applied in a given case. We conclude that an analytical approach, grounded in the number of hours expended on the case, will take into account all the relevant factors, and will lead to a reasonable result. The number of hours of work will automatically reflect the \"time and labor involved,\" \"the novelty and difficulty of the question,\" and \"preclusion of other employment.\" The attorney's normal hourly billing rate will reflect \"the skill requisite to perform the legal service properly,\" \"the customary fee,\" and the \"experience, reputation, and ability of the attorney.\" Adjustments upward may be made to reflect the contingency of the fee, unusual time limitations and the \"undesirability\" of the case. Thus, applying the approach used in this decision will result in an award reflecting those considerations traditionally looked to in making fee awards, but will also provide a logical, analytical framework which should largely eliminate arbitrary awards based solely on a judge's predispositions or instincts.\nId. at 642-43.\nA comparison of the guidelines established in Cummings, Johnson and Northcross indicates that there is substantial similarity of statement in the Massachusetts and federal court standards. Both tests are consistent with the standards approved by the American Bar Association. In First National Bank of Boston v. Brink, supra, the Supreme Judicial Court of Massachusetts held that the trial court had properly applied the factors set forth in Disciplinary Rule 2-106 of the American Bar Association's Code of Professional Responsibility because those factors were consistent with the criteria previously announced by the court in the Cummings case. 361 N.E.2d at 411. In Johnson, the court also noted that its 12 factors were consistent with Disciplinary Rule 2-106. 488 F.2d at 719.\nThe costs of collection claimed by FNBB are reasonable. Through the testimony of witness, John McArdle, all legal fee bills and legal and nonlegal expense bills and receipts were offered and admitted into evidence as FNBB Exhibit Nos. 358A, 358B and 358C. (McArdle, 53 Tr. 5401-408) These fee bills and expense bills and receipts, summarized in FNBB Exhibit No. 358, evidence that through March 26, 1982, FNBB incurred and paid legal costs and expenses of $4,059,217.45 as a consequence of its efforts to collect the obligations of DHO, ODS, TOC and Mr. Overmyer. In addition, FNBB incurred nonlegal collection expenses of $169,265.33 and FNBB employee out-of-pocket collection expenses of $38,848.13. (Summary, FNBB Ex. 358, tab 1, p. 1, tab 2, p. 1, tab 3, p. 1)[5]\nThe unrefuted expert testimony established that the collection costs incurred and paid by FNBB were reasonable. (Levine, 56 Tr. 5707-5831; 57 Tr. 5833-59) The complexities involved in FNBB's collection *926 effort, the eight-year period over which FNBB has attempted to collect the loans in 10 courts and in 39 separate proceedings (Levine, 56 Tr. 5738), the 57 appeals taken (only one appeal was commenced by FNBB) (Levine, 57 Tr. 5838-40), the voluminous pleadings and the obstructionist tactics and strategy of the obligors all dictate that the fees expended by FNBB are reasonable, as testified to by Levine.[6] The expert testimony and the references to services rendered, set forth in the fee bills, demonstrate that the substantial costs of collection incurred by FNBB were appropriate for the extent and nature of the services necessarily rendered by counsel for FNBB.[7]\nIn Matter of U.S. Golf Corp., 639 F.2d 1197 (5th Cir.1981), a case involving the appeal of a disputed award of attorney fees in a bankruptcy proceeding, the court stated: \"Because judges are themselves familiar with legal fees, expert testimony is not required, although it may of course be taken.\" Id. at 1202. In this proceeding, FNBB has claimed fees, a substantial part of which were incurred in other forums, where this Court had no opportunity to observe for itself the activities of FNBB's attorneys and the high quality of their representation and professional standards. The expert testimony of Levine thus has aided the Court in understanding the wide range, complexity and number of services which FNBB's attorneys have been obliged to perform in their efforts to collect the loans. See In re G.W.C. Financial & Ins. Services, 8 B.R. 122, 126 (Bkrtcy.C.D.Cal. 1981); Brogna v. Pioneer Petroleum Company, 344 Mass. 382, 182 N.E.2d 303, 306 (1962); Cummings v. National Shawnut Bank of Boston, 284 Mass. 563, 188 N.E. 489, 491 (1934).\nThe attorney fees incurred by FNBB are reasonable, for they reflect rates and billing practices customary in the community. In this case, FNBB's attorneys are not asking this Court to evaluate a fee application or award to them fees which the Court deems to be reasonable for the services rendered. Rather, FNBB is seeking a judgment against DHO, ODS, TOC and Mr. Overmyer in the amount of fees actually incurred and paid by FNBB to its attorneys for services rendered in connection with collection of the loans.\nThe fee bills submitted to FNBB by its various counsel (FNBB Exhibit 358A) and the unrefuted testimony of Levine (Levine, 56 Tr. 5735) reflect that FNBB was billed by its attorneys at an hourly rate customary to the legal communities where the law firms were located. Specifically, Baker & Hostetler billed FNBB at a rate and in a manner consistent with the customary practice in Cleveland. (Levine, 56 Tr. 5799) Weil, Gotshal & Manges billed FNBB at a rate and in a manner consistent with the customary practice in New York. (Levine, 56 Tr. 5794-95) Ropes & Gray billed FNBB at a rate and in a manner consistent with the customary practice in Boston. (Levine, 56 Tr. 5787) With respect to the legal fees incurred by FNBB as a consequence of services rendered by Lovett, Hennessey, Stambler & Siebert (FCC counsel in Washington) and Eastment, Stichter, Smith & Bergman (Toledo counsel), the fees billed were in a manner consistent with the practice of the three principal firms, i.e., at an hourly rate customary in the community. Absent considerations of quality of service and other factors which are considered by courts in awarding fees in excess of hourly rates, these fees incurred by FNBB, by their very nature, are reasonable. Under the tests of reasonableness enunciated in both Cummings v. National Shawmut Bank of Boston, supra, and Northcross v. Board of Education, supra, respectively, where standard fees based on time spent and customary hourly rates are to be adjusted upward *927 in appropriate cases to reflect contingency and quality factors, it is implicit that fees based solely upon time spent and customary hourly rates are reasonable.\nThe disbursements paid by FNBB to its attorneys, in addition to nonlegal collection expenses and FNBB employee out-of-pocket collection expenses, are reasonable and recoverable by FNBB. The legal disbursements of $614,916.30, nonlegal collection expenses of $169,265.33 and FNBB employee out-of-pocket collection expenses of $38,848.13 (Summary FNBB Ex. 358, tab 1, p. 1, tab 2, p. 1, tab 3, p. 1), all indisputably billed to and paid by FNBB, are recoverable as \"expenses of collection\" (Loan Agreement, FNBB Ex. 266, p. 21, \u0e16 6.3), \"expenses, including reasonable counsel fees, incurred or paid by the Bank in protecting or enforcing its rights upon or under liabilities or collateral\" (Loan and Security Agreement, FNBB Ex. 321, p. 4, \u0e07 13) and \"expenses paid or incurred by the Bank . . . in connection with the collection of all sums and obligations guaranteed hereunder\" (Guaranty, FNBB Ex. 323). Moreover, as Levine testified, it is the customary practice for clients to reimburse counsel for all \"out-of-pocket\" expenses incurred in the course of rendering legal services. (Levine, 56 Tr. 5826)\nLevine's testimony confirms the reasonableness of the costs of collection incurred and paid by FNBB. Levine and his colleague, Charles Dougherty, carefully reviewed (1) the dockets in all of the cases related to FNBB and the Overmyer entities; (2) virtually all of the pleadings referred to in those dockets; (3) the transcripts of many of the depositions and hearings; (4) results of discovery; (5) the issues involved; and (6) the fee bills submitted by attorneys to FNBB. In addition, they interviewed the lawyers who represented FNBB in the various proceedings (Levine, 56 Tr. 5735). Levine opined that fees approximately $68,000 in excess of those billed by Ropes & Gray, Baker & Hostetler and Weil, Gotshal & Manges would have been reasonable for the services rendered by those firms in connection with the collection of the loans. (Levine, 56 Tr. 5818)[8]\nLevine's computations were conservative and on the \"low side\" of reasonableness. (Levine, 56 Tr. 5825) In addition, Levine concluded that the 16,976 hours expended by Ropes & Gray (Levine, 56 Tr. 5780), the 8,551 hours expended by Weil, Gotshal & Manges (Levine, 56 Tr. 5780) and the 8,982 hours expended by Baker & Hostetler (Levine, 56 Tr. 5780) were all in furtherance of, reasonably calculated to result in and necessary for the collection of the loans and preservation of the value of the stock of Telecasting (the collateral pledged as security for the loans). (Levine, 56 Tr. 5747-48; 57 Tr. 5854) To illustrate and support this opinion, Levine prepared FNBB's Exhibit 419, a summary of proceedings necessarily engaged in by FNBB counsel in numerous courts. This chart and Levine's explanation of it (Levine, 56 Tr. 5754-62) amply demonstrate the lengths to which FNBB was forced to go to assert its rights and protect its security.\nAs further evidence of the protracted litigation in which FNBB has been obliged to engage to assert and protect its right to repayment of the loans, this Court *928 takes judicial notice of the volume and character of filings by the obligors and other Overmyer entities in this adversary proceeding and in the underlying reorganization proceedings of Telecasting. See In re Ingram, 5 B.R. 232, 234 (Bkrtcy.N.D.Ga. 1980); In re Ponn Realty Trust, 4 B.R. 226, 228 n. 2 (Bkrtcy.D.Mass.1980). This Court also takes judicial notice of what is reflected by the docket in the reorganization proceedings of the original plaintiff in this adversary proceeding, Hadar Leasing International Co., Inc. In Board of Trustees v. Charley Toppino and Sons, Inc., 514 F.2d 700 (5th Cir.1975), the court stated: \"It is not error . . . for a court to take judicial notice of related proceedings and records in cases before that court.\" Id. at 704. See also Harrington v. Board of Education, 649 F.2d 434, 441 (6th Cir.1981). The number of hours expended by Ropes & Gray (16,976), Weil, Gotshal & Manges (8,551) and Baker & Hostetler (8,982) further reflects the complexity and difficulty of the collection efforts engaged in by FNBB.\nEach proceeding in which FNBB has attempted to collect its loans, as well as each proceeding in which the Overmyer entities have attempted to frustrate FNBB's efforts to collect the loans, is directly related to FNBB's present claim for costs of collection. This Court further takes notice of proceedings in other courts which \"have a direct relation to matters at issue\" in this Court. St. Louis Baptist Temple v. Federal Deposit Ins. Corp., 605 F.2d 1169, 1172 (10th Cir.1979). The Court also takes notice of the extensive prior litigation between FNBB and those obligated to repay the loans. See Howard v. St. Louis-San Francisco Railway Co., 361 F.2d 905, 907 (8th Cir.1966). In all of these proceedings, FNBB has asserted and sought to protect its rights and remedies under the loan documents.\nLevine's testimony presented the Court with an incisive study of the tenacious collection efforts by FNBB's counsel and the reasonableness of the fees incurred and paid by FNBB to its counsel. On the basis of Levine's thorough analysis and thoughtful testimony and this Court's own review and assessment of fee bills paid by FNBB, this Court can only arrive at the conclusion that the fees paid by FNBB are reasonable.\nOne of the most difficult aspects of the case has been the resolution of defendants' claim against Mr. Overmyer's attorneys under 28 U.S.C. \u0e07 1927.[9] While the ability to award such fees is within the Court's inherent powers (Roadway Express, Inc. v. Piper, 447 U.S. 752, 100 S.Ct. 2455, 65 L.Ed.2d 488 [1980]), there has been an impressive increase of such awards since 28 U.S.C. \u0e07 1927 was amended in 1980. See United States v. Wilder, 680 F.2d 59 (9th Cir.1982); McConnell v. Critchlow, 661 F.2d 116 (9th Cir.1981); Durrett v. Jenkins Brickyard, Inc., 678 F.2d 911 (11th Cir. 1982); Barnd v. City of Tacoma, 664 F.2d 1339 (9th Cir.1982); United States v. 329.73 Acres of Land, etc., 678 F.2d 21 (5th Cir. 1982); Maneikis v. Jordan, 678 F.2d 720, (7th Cir.1982); In re Hartford Textile Corp., 659 F.2d 299 (2nd Cir.1981); Merritt v. International Bro. of Boilermakers, 649 F.2d 1013 (5th Cir.1981); Herrera v. Farm Products Co., 540 F.Supp. 433 (N.D.Iowa 1982); Overnite Transportation Co. v. Chicago Industrial Tire Co., 535 F.Supp. 114 (N.D.Ill.1982); Colucci v. New York Times Co., 533 F.Supp. 1011 (S.D.N.Y.1982); and Regional Transp. Authority v. Grumman Flxible Corp., 532 F.Supp. 665 (N.D.Ill. 1982). Mr. Overmyer's unreasonable and vexatious use of the court system has already been described in this opinion. (See Findings of Fact 15.1-15.2, 29.8, 30.1, 30.3, 31.1-31.3, 36.1-36.13, 38.1-38.8, supra) It is unfortunate that a significant portion of this court misuse was made possible by the *929 active participation of counsel. (See Findings of Fact 38.1-38.8, supra) This Court has accordingly held counsel liable under 28 U.S.C. \u0e07 1927. (See Conclusions of Law 54 infra)\n\nCONCLUSIONS OF LAW\n(1) DHO, ODS, TOC and Mr. Overmyer validly waived presentment, demand, notice, protest and all other demands and notices in connection with FNBB's enforcement of their obligations.\n(2) There is no legal requirement that a bank give its customer notice before exercising its right to refuse to honor a check for which its customer has insufficient funds.[10]\n(3) The contractual obligations of DHO, ODS, TOC and Mr. Overmyer to FNBB are governed by Massachusetts law.\n(4) The agreements of DHO, ODS, TOC and Mr. Overmyer to reimburse FNBB for its costs of collection, including attorneys' fees, are valid.\n(5) The various agreements between DHO, ODS, TOC and Mr. Overmyer and FNBB are valid and enforceable in all respects in accordance with their terms.\n(6) The capital stock of Telecasting was validly pledged to FNBB to secure all the indebtedness of DHO, ODS, TOC and Mr. Overmyer to FNBB.\n(7) FNBB had the right to collect the accounts assigned to it by ODS and DHO without notice.\n(8) FNBB had the right to apply the proceeds of accounts that it collected to whatever obligations of ODS and in whatever order it chose.\n(9) The transfers of ISLI, Hadar, the Overmyer Canadian operations and the other companies named in the TOC minutes dated February 8, 1972, to the Bermuda Trust were fraudulent conveyances as to FNBB and violated the loan agreement.\n(10) The transfer of Mr. Overmyer's residence to Intermodal Terminals, Inc. and the transfer of Intermodal Terminals, Inc. to the Bermuda Trust were fraudulent conveyances as to FNBB.\n(11) Mr. Overmyer's residence is held in constructive trust for FNBB.\n(12) The transfers of Weathervane Farms, Inc. and Deauville Private Rental Homes, Inc. to the Barbara M. Overmyer (Strang) Trust and the Harrison M. Overmyer Trust were fraudulent conveyances as to FNBB.\n(13) All dealings of Telecasting with the Overmyer family and other Overmyer companies since 1973 have been frauds on FNBB.\n(14) Jeebs was created to defraud FNBB.\n(15) Mr. Overmyer and the counsel he has retained to represent himself and his companies have abused the bankruptcy laws of the United States by utilizing them to delay, hinder and defraud FNBB.\n(16) The assignment of the equipment leases by ISLI to Hadar was a fraud on FNBB.\n*930 (17) Hadar owns no interest in the Telecasting transmitter site.\n(18) The Hadar leases are shams designed to conceal the looting of Telecasting by Mr. Overmyer.\n(19) The rates of return on the Hadar leases are unreasonable.\n(20) Hadar has no remaining interest whatever in the Hundred East equipment.\n(21) If Hadar had any interest in the equipment covered by the Hadar leases, it would be contractually obligated to assign that interest to Telecasting for not more than the amount due and owing to vendors, thereby leaving no excess for Hadar.\n(22) The service agreements between Telecasting and the service companies and between Hadar and the service companies are shams designed to conceal the looting of Telecasting by Mr. Overmyer.\n(23) All assets acquired by Overmyer companies since 1973, including the farm acquired by Weathervane Farms, Inc. and the leaseholds on the 29th floor of Park Avenue and apartment 22G at 4 Park Avenue held by Jeebs, were acquired with assets that belonged to Telecasting, and are held in constructive trust for Telecasting.\n(24) Weathervane Farms, Inc., as a stockholder of Jeebs, which is the stockholder of AGG, is responsible for the obligations of Jeebs and AGG to Hadar and Telecasting.\n(25) The August 31, 1975, balance forward on Mr. Overmyer's account with Hadar, $327,298.88, constituted equity rather than debt.\n(26) The August 31, 1975, balance forward on Mr. Overmyer's account with Hadar, $327,298.88, had been extinguished in 1968.\n(27) The June 19, 1979, General Electric settlement was a fraud on the Bankruptcy Court, a misappropriation of Telecasting's assets by Mr. Overmyer and his agents, including Mr. Connery, and a fraudulent conveyance as to FNBB.\n(28) The charges imposed by DHO, Interstate and Mid American for the studio premises, other than those provided for in the 1969 lease and the Studio Lease Case prosecuted by DHO, were a fraud on FNBB and a fraud on this Court.\n(29) The storage agreements that Mr. Overmyer caused to be imposed on Telecasting by Weathervane Farms, Inc. were shams designed to conceal the looting of Telecasting by Mr. Overmyer, and the payments of money by Telecasting pursuant thereto were fraudulent conveyances as to FNBB.\n(30) The Hadar leases are unenforceable because the Bankruptcy Court never approved them.\n(31) The Hadar leases are unconscionable.\n(32) The service agreements are unconscionable.\n(33) The making of the Hadar leases constituted fraudulent conveyances from Telecasting to Hadar.\n(34) Telecasting was insolvent from August 31, 1977, through February 6, 1981.\n(35) Hadar established no basis for relief from the automatic stay.\n(36) Hadar established no basis for accelerating the time within which Telecasting must accept or reject the Hadar leases.\n(37) Hadar established no basis for reclamation.\n(38) Mr. Overmyer's control of the various Overmyer companies, including TOC, DHO, ODS, Hadar, ISLI, Jeebs, AGG, Omega, Intermodal Terminals, Inc., Weathervane Farms, Inc., Deauville Private Rental Homes, Inc., Peerless, NDS, NDS of California, RT Systems and its subsidiaries and Expediter, is so pervasive that the unity of interest between Mr. Overmyer and these corporations makes it inequitable to treat the corporations as separate legal entities. Mr. Overmyer is, therefore, liable for the obligations of every such corporation, and every such corporation is, therefore, liable for the obligations both of Mr. Overmyer and of every other corporation.\n(39) The creation of fictitious corporate records and false books of account, and the destruction of accounting records, by the *931 Overmyer organization in general and by Mr. Overmyer, Mr. Connery and Mr. Chi in particular, were frauds on FNBB.\n(40) Mr. Overmyer, with and through his companies and agents, has deliberately and willfully subverted the judicial process in this and other courts as part of a scheme to obstruct justice and to hinder, delay and defraud FNBB.\n(41) Mr. Overmyer has used Jeebs, AGG, Omega and Deauville Private Rental Homes, Inc., as well as secret Bermuda bank accounts, to support his legal maneuvering and thereby aid in defrauding FNBB.\n(42) Mr. Overmyer and the other officers of Telecasting dominated by him usurped corporate opportunities of Telecasting by having Hadar acquire property for use in Telecasting's business and lease it to Telecasting, rather than having Telecasting acquire it directly.\n(43) Mr. Overmyer and the other officers and directors of Telecasting dominated by him failed to carry out their fiduciary obligations to that corporation, and have thereby caused damage to Telecasting and FNBB.\n(44) Mr. Connery, acting as counsel to Telecasting, failed to carry out his fiduciary obligations to that client, and permitted Telecasting to be defrauded in transactions in which he, as its counsel, was obligated to act to prevent its being harmed. Mr. Connery breached his obligations to Telecasting and its creditors by subverting its interests to those of Mr. Overmyer, which he knew to be inimical to Telecasting.\n(45) The plaintiffs failed to introduce sufficient evidence even to create issues of material fact regarding the following affirmative defenses raised by Hadar and adopted by the other plaintiffs, (the numbers of which correspond to the appropriate paragraphs of Hadar's reply to FNBB's counterclaim): (9) acquiescence, etc.; (10) payment and setoff; (14) failure to mitigate, etc.; (15) unclean hands, etc.; (16) wrongful dominion, etc.; (17) res judicata and collateral estoppel; (18) wrongful commingling of funds, etc.; (19) equitable subordination; (20) misrepresentation, wrongful dishonor, etc.; and (21) tortious interference. As a matter of law, therefore, those affirmative defenses are without merit.\n(46) As to the following affirmative defenses raised by Hadar and adopted by the other plaintiffs, their merits are primarily, if not entirely, questions of law: (4) defendant's failure to state a claim; (5) prior action pending; (6) failure to plead fraud with particularity; (7) failure to name indispensable parties; (8) limitations/laches; (11) lack of jurisdiction; and (13) \"stay.\" As to all such affirmative defenses, the plaintiffs have failed to establish the merits of any such defense.\n(47) Hadar has commingled advances and deposits of Telecasting, thereby converting Telecasting's moneys and entitling Telecasting to the immediate return of all of Telecasting's deposits.[11]\n(48) Hadar is barred from sharing in any distribution from Telecasting because Hadar has not disgorged to Telecasting *932 all funds which were fraudulently transferred to Hadar out of Telecasting.[12]\n(49) Hadar has no right, title or interest in or to the property described in the Hadar leases. Title to the property is in Telecasting.\n(50) Hadar's proof of claim is fraudulent and is rejected.\n(51) Hadar, ISLI, DHO, ODS, TOC and Mr. Overmyer have all been guilty of inequitable and illegal conduct such as to bar them from any equitable relief.\n(52) Mr. Connery has actively advanced the fraudulent scheme perpetrated by Mr. Overmyer on FNBB, and has thereby caused damage to FNBB.\n(53) Mr. Chi has knowingly participated in the fraudulent scheme perpetrated by Mr. Overmyer on FNBB, and has thereby caused damage to FNBB.\n(54) Mr. Connery and Mr. Brown, as counsel for the plaintiffs in this adversary proceeding, have unreasonably and vexatiously multiplied the costs of these proceedings, and they are liable to the defendants for those costs and damages pursuant to 28 U.S.C. \u0e07 1927. The Court has determined those damages to be in the amount of $5,000.00.\n(55) DHO, ODS, TOC and Mr. Overmyer are indebted to FNBB in the amount of $22,425,622.99, plus interest at the agreed rates as of April 4, 1982, and costs of collection since March 26, 1982.\n(56) Hadar, Jeebs, AGG, Omega, Weathervane Farms, Inc., Deauville Private Rental Homes, Inc. and Mr. Overmyer are indebted to Telecasting in the amount of $2,520,240.02. (See Findings of Fact 20.4, supra)\n(57) Mr. Overmyer is liable to Telecasting and FNBB for punitive damages in the amount of $100,000 and $150,000, respectively.\nThe attorneys for the defendants shall prepare and submit forthwith an order consistent herewith.\n\nJUDGMENT\nThis action came on for trial before the Court and the issues having been duly tried and a memorandum of opinion including findings of fact, discussion, and conclusions of law having been duly rendered,\nIT IS ORDERED AND ADJUDGED that:\n1. The claim of the plaintiff Hadar Leasing International Co., Inc. (\"Hadar\"), against the defendant D.H. Overmyer Telecasting Co., Inc. (\"Telecasting\"), as set forth in its proof of claim is fraudulent and is hereby denied.\n2. All agreements between Telecasting and Jeebs Distribution Services, Inc. (\"Jeebs\"), AGG Projects, Inc. (\"AGG\"), Omega Executive Services, Inc. (\"Omega\"), or Weathervane Farms, Inc., were fraudulent devices and are hereby declared to be void and of no force and effect.\n3. All agreements between Hadar and Jeebs, AGG or Omega were fraudulent devices and are hereby declared to be void and of no force and effect.\n4. Hadar is hereby declared to own no interest in the Telecasting transmitter site.\n5. The plaintiffs Hadar, Daniel H. Overmyer (\"Mr. Overmyer\"), D.H. Overmyer Co., Inc. (\"DHO\"), as debtor in possession except as to subparagraph (g), and Intermodal Systems Leasing, Inc. (\"ISLI\"), are jointly and severally liable to make restitution to Telecasting for fraud, in the following amounts which are cumulative:\n(a) $8,616.47 plus interest for the overpayment by Telecasting to ISLI in 1975;\n\n*933 (b) $2,520,240.02 plus interest for the overpayment by Telecasting to Hadar from 1976 through 1981;\n(c) $270,794.08 plus interest for the payments by Telecasting to AGG from 1978 through 1980;\n(d) $15,333.93 plus interest for the payments by Telecasting to Omega in 1980 and 1981;\n(e) $35,338.20 plus interest for the payments by Telecasting to Gilman, McLaughlin & Hanrahan in 1981;\n(f) $2,085.00 plus interest for Telecasting petty cash taken by Mr. Overmyer between February 10, 1981, and February 27, 1981;\n(g) $14,956.07 plus interest owed by Mr. Overmyer to Telecasting since 1973 or before;\n(h) $229,600.00 plus interest for overpayments by Telecasting to DHO for studio rent from September 1, 1974, to February, 1981;\n(i) $8,025.74 plus interest for payments by Telecasting to Weathervane Farms, Inc., for purported storage charges from 1979 through 1981;\n(j) $349,761.41 plus interest for money transferred by Telecasting to The Overmyer Company, Inc. (\"TOC\"), and used to make payments of interest to the defendant The First National Bank of Boston (\"FNBB\") in 1980;\n(k) $129.50 plus interest for a payment by Telecasting to Bookkeepers Unlimited on account of services of George Levy in 1981;\n(l) $1,367.64 plus interest for payments by Telecasting for insurance on the life of Mr. Overmyer in 1981;\n(m) $722.82 plus interest for payments by Telecasting of Mr. Overmyer's expenses in 1981;\n(n) $37.26 plus interest for a payment by Telecasting for flowers for Shirley C. Overmyer in 1981.\n6. The interests of Hadar in equipment used by Telecasting are hereby divested and vested in Telecasting subject to any valid and perfected security interests.\n7. The June 1, 1969, lease of the Telecasting studio site between DHO and Telecasting is hereby declared to be valid and existing, subject to Telecasting's past overpayments of rent.\n8. All right, title, and interest of Weathervane Farms, Inc., in and to the following described property is hereby divested and vested in D.H. Overmyer Telecasting Co., Inc.\nALL THAT CERTAIN piece, plot or parcel of land situate, lying and being on the northerly side of Millwood-Mt. Kisco Road and the westerly side of Hog Hill Road in the Town of New Castle, County of Westchester and State of New York and being more particularly described as follows:\nBEGINNING at a point formed by the intersection of the westerly side of Hog Hill Road with the northerly side of Millwood\u0e42\u0080\u0094 Mt. Kisco Road, thence in a westerly direction and along the said northerly side of Millwood\u0e42\u0080\u0094Mt. Kisco Road the following courses and distances,\n\n\n S. 62\u0e10 20' 30\" W. 83.02 feet,\n S. 66\u0e10 15' 30\" W. 20.01 feet,\n S. 67\u0e10 47' 00\" W. 78.17 feet,\n S. 66\u0e10 54' 30\" W. 50.79 feet,\n S. 66\u0e10 45' 10\" W. 130.38 feet,\n S. 75\u0e10 36' 50\" W. 65.97 feet,\n S. 75\u0e10 47' 20\" W. 137.49 feet,\n S. 73\u0e10 49' 55\" W. 171.25 feet,\n S. 86\u0e10 15' 45\" W. 51.14 feet,\n S. 60\u0e10 45' 35\" W. 101.01 feet and\n S. 41\u0e10 46' 15\" W. 54.81 feet to the\n\nnortherly side of Whitlaw Lane, said Whitlaw Lane being shown on a \"Map of Whitlaw Close, etc.,\" said map being filed in the office of the County Clerk of Westchester, Division of Land Records, as No. 16399, thence in a northwesterly direction, partly along the aforementioned line side of Whitlaw Lane and partly along the dividing line between lands now or formerly of Gabriel and lands shown on the above described map of Whitlaw Close the following courses and distances,\n\n\n N. 64\u0e10 48' 05\" W. 107.17 feet,\n N. 64\u0e10 26' 15\" W. 154.19 feet,\n*934\n N. 65\u0e10 34' 55\" W. 132.52 feet, to a\n point\n\non the northerly side of Whitlaw lane. Said point being 1393.88 feet from the corner formed by Whitlaw Lane to the West and Millwood\u0e42\u0080\u0094Mt. Kisco Road to the northeast thence following the following courses and distances\n\n\n N. 54\u0e10 34' 30\" E. 2300.15 feet\nto a point thence\n S. 65\u0e10 04' 55\" E. 375.25 feet to a point\nthence\n N. 30\u0e10 09' 00\" E. 94.16 feet\n N. 18\u0e10 10' 00\" E. 123.86 feet\n\nto a point on the westerly side of Hog Hill Road. Said point being 2,002.01 feet from the corner formed by Hog Hill Road to the northerly side and Millwood\u0e42\u0080\u0094Mt. Kisco Road to the southwesterly side thence following the following courses and distances,\n\n\n S. 67\u0e10 00' 00\" E. 40.81 feet,\n S. 8\u0e10 25' 50\" W. 115.08 feet,\n S. 9\u0e10 11' 10\" E. 83.34 feet,\n S. 42\u0e10 59' 10\" E. 286.25 feet,\n S. 7\u0e10 58' 10\" E. 130.94 feet,\n S. 13\u0e10 57' 50\" W. 264.98 feet,\n S. 30\u0e10 15' 50\" W. 192.12 feet,\n S. 38\u0e10 02' 50\" W. 268.62 feet,\n S. 16\u0e10 02' 50\" W. 273.46 feet, and\n S. 5\u0e10 11' 50\" W. 180.23 feet to the\n\nnortherly side of Millwood\u0e42\u0080\u0094Mt. Kisco Road and the point or place of BEGINNING.\nPARCEL B:\nALL THAT CERTAIN piece, plot or parcel of land situate, lying and being on the northerly side of Whitlaw lane in the Town of New Castle, County of Westchester and State of New York and being more particularly described as follows:\nBEGINNING at a point 1393.88 feet West of the corner formed on the westerly side by Whitlaw Lane and on the northerly side by Millwood\u0e42\u0080\u0094Mt. Kisco Road thence in a westerly direction and along the said northerly side of Whitlaw Lane the following courses and distances,\n\n\n N. 65\u0e10 34' 55\" W. 66.55 feet,\n N. 65\u0e10 57' 55\" W. 307.43 feet,\n N. 65\u0e10 10' 00\" W. 103.03 feet,\n N. 64\u0e10 38' 15\" W. 94.80 feet,\n N. 63\u0e10 38' 15\" W. 285.00 feet,\n N. 72\u0e10 01' 15\" W. 114.00 feet,\n N. 66\u0e10 10' 15\" W. 46.00 feet,\n N. 60\u0e10 37' 15\" W. 62.70 feet,\n N. 68\u0e10 42' 15\" W. 80.60 feet, and\n N. 63\u0e10 58' 05\" W. 66.52 feet to a corner,\n\nthence in a northerly direction, still along the aforementioned dividing line,\n\n\n N. 18\u0e10 52' 35\" E. 59.06 feet,\n N. 1\u0e10 10' 15\" W. 57.00 feet,\n N. 5\u0e10 20' 05\" W. 39.70 feet,\n N. 3\u0e10 51' 45\" E. 122.23 feet,\n N. 15\u0e10 30' 05\" E. 25.29 feet,\n N. 9\u0e10 58' 50\" W. 84.45 feet and\n N. 0\u0e10 20' 45\" E. 113.81 feet to a corner\n\nand lands of Consolidated Edison Co., thence in a northeasterly direction and along the dividing line between lands of Consolidated Edison Co. and lands of Gabriel the following courses and distances,\n\n\n N. 39\u0e10 25' 25\" E. 902.06 feet,\n N. 24\u0e10 31' 11\" E. 112.40 feet and\n N. 9\u0e10 36' 58\" E. 414.23 feet to the\n southerly\n\nside of Saw Mill River Road, thence in a northeasterly direction and along the southerly side of Saw Mill River Road N. 44\u0e10 40' 30\" E. 104.35 feet to a corner, thence in an easterly direction and through lands of Gabriel and approximately along the Town line between the Towns of New Castle and Yorktown the following courses and distances,\n\n\n S. 88\u0e10 59' 17\" E. 1837.73 feet,\n S. 81\u0e10 00' 10\" E. 34.82 feet,\n N. 87\u0e10 21' 50\" E. 62.22 feet,\n S. 88\u0e10 11' 10\" E. 113.00 feet,\n S. 89\u0e10 33' 10\" E. 104.05 feet,\n S. 87\u0e10 40' 10\" E. 112.88 feet,\n N. 84\u0e10 03' 50\" E. 20.10 feet,\n S. 88\u0e10 56' 10\" E. 167.05 feet,\n S. 87\u0e10 53' 10\" E. 63.44 feet,\n N. 88\u0e10 10' 50\" E. 33.02 feet,\n N. 69\u0e10 38' 50\" E. 11.74 feet,\n*935\n S. 88\u0e10 47' 40\" E. 161.84 feet, and\n S. 88\u0e10 07' 40\" E. 193.00 feet to a corner\n\nand the westerly side of Hog Hill Road, thence in a southerly direction and along the westerly side of Hog Hill Road the following courses and distances,\n\n\n S. 18\u0e10 27' 20\" W. 160.42 feet,\n S. 28\u0e10 54' 10\" W. 309.50 feet,\n S. 1\u0e10 48' 50\" W. 255.58 feet,\n S. 20\u0e10 04' 00\" W. 190.31 feet to a point\n\non the westerly side of Hog Hill Road said point being a total distance of 1,835.83 feet from the corner formed by Hog Hill Road to the northerly side and Millwood\u0e42\u0080\u0094Mt. Kisco Road to the southwesterly side, thence following the following courses and distances,\n\n\n S. 18\u0e10 10' 00\" W. 123.86 feet,\n S. 30\u0e10 09' 00\" W. 94.16 feet\n\nto a point thence\n\n\n N. 65\u0e10 04' 55\" W. 375.25 feet,\n S. 54\u0e10 34' 30\" W. 2300.15 feet\n\nto the point of BEGINNING.\nPARCEL C:\nALL THAT CERTAIN piece, plot or parcel of land situate, lying and being on the southerly side of Saw Mill River Road in the Town of Yorktown, County of Westchester and State of New York and being more particularly described in two (2) parcels as follows:\nBEGINNING at a point on the southerly side of Saw Mill River Road said point being determined as follows, starting at a point on the southerly side of Saw Mill River Road said point being formed by the intersection of the dividing line between lands now or formerly of Gabriel and lands of Consolidated Edison Co. with the said southerly side of Saw Mill River Road, thence from starting point, in a northeasterly direction and along the southerly side of Saw Mill River Road N. 44\u0e10 40' 30\" E. 104.35 feet to the aforementioned point of beginning, thence from said point of beginning, in a northeasterly direction and along the southerly side of Saw Mill River Road N. 41\u0e10 19' 50\" E. 471.28 feet to a corner and lands of the City of New York, said lands of the City of New York being shown as Parcel 160, Sheet 15, on maps of New Croton Reservoir, thence in an easterly direction and along the dividing line between lands of City of New York and lands of Gabriel N. 88\u0e10 59' 00\" E. 554.57 feet to a corner, thence still along the aforementioned dividing line N. 21\u0e10 50' 20\" E. 171.48 feet and N. 22\u0e10 06' 10\" W. 413.59 feet to a corner and the southerly side of Dell Avenue, thence in a northeasterly direction and along the southerly side of Dell Avenue the following courses and distances,\n\n\n N. 43\u0e10 56' 40\" E. 133.90 feet,\n N. 40\u0e10 07' 10\" E. 186.22 feet,\n N. 41\u0e10 15' 50\" E. 258.22 feet,\n N. 49\u0e10 26' 30\" E. 88.58 feet and\n N. 57\u0e10 50' 10\" E. 237.07 feet to a corner,\n\nand lands now or formerly of Adam, thence in a southeasterly direction and along the dividing line between lands of Adam and lands of Gabriel S. 34\u0e10 53' 30\" E. 196.79 feet to a corner, thence in a northeasterly direction N. 46\u0e10 16' 30\" E. 227.20 feet and N. 58\u0e10 57' 20\" E. 219.85 feet to a corner, thence in a northwesterly direction, still along the aforementioned dividing line, N. 33\u0e10 02' 20\" W. 152.78 feet to a corner and the southerly side of Dell Avenue, thence in a northeasterly direction and along the southerly side of Dell Avenue the following courses and distances,\n\n\n N. 58\u0e10 55' 20\" E. 281.76 feet,\n S. 88\u0e10 36' 50\" E. 157.46 feet,\n N. 47\u0e10 33' 10\" E. 185.48 feet,\n N. 30\u0e10 17' 30\" E. 105.27 feet,\n N. 38\u0e10 00' 30\" E. 90.62 feet,\n N. 49\u0e10 43' 00\" E. 70.52 feet and\n N. 37\u0e10 32' 30\" E. 242.23 feet to a corner\n\nand lands now or formerly of Dearborn, thence in a southerly direction and along the dividing line between lands of Dearborn and lands of Gabriel, S. 22\u0e10 47' 00\" E. 111.57 feet, S. 21\u0e10 05' 10\" E. 400.52 feet, S. 22\u0e10 12' 30\" E. 310.32 feet and S. 23\u0e10 53' 10\" E. 113.24 feet to lands now or formerly of Mino, thence still southerly and along the dividing line between lands of Mino and *936 lands of Gabriel S. 22\u0e10 23' 30\" E. 179.29 feet to a corner and lands now or formerly of Crawford, thence in a westerly direction and along the dividing line between lands of Crawford and lands of Gabriel S. 77\u0e10 48' 40\" W. 425.77 feet N. and 88\u0e10 22' 30\" W. 492.84 feet to a corner, thence in a southerly direction still along the aforementioned dividing line the following courses and distances,\n\n\n S. 8\u0e10 32' 10\" W. 302.15 feet,\n S. 17\u0e10 26' 30\" W. 378.44 feet,\n S. 14\u0e10 56' 50\" W. 261.92 feet,\n S. 12\u0e10 20' 50\" W. 181.34 feet,\n S. 13\u0e10 33' 50\" W. 212.08 feet and\n S. 11\u0e10 28' 50\" W. 54.91 feet to a corner,\n\nthence in a westerly direction and through lands of Gabriel and approximately along the Town lines between the Towns of New Castle and Yorktown N. 88\u0e10 59' 17\" W. 1837.73 feet to the southerly side of Saw Mill River Road and the point or place of beginning.\nPARCEL D:\nALL THAT CERTAIN piece, plot or parcel of lands situate, lying and being on the westerly side of Seven Bridge Road in the Town of Yorktown, County of Westchester and State of New York and being more particularly described as follows.\nBEGINNING at point on the westerly side of Seven Bridge Road said point being formed by the intersection of the dividing line between lands of Central School District No. 4 and lands now or formerly of Gabriel with the said westerly side of Seven Bridge Road, said point also being approximately on the Town line between the Towns of Yorktown and New Castle, thence from said point of beginning, in a westerly direction and along the aforementioned dividing line and approximately along the above described Town line, N. 86\u0e10 06' 00\" W. 245.18 feet, N. 86\u0e10 12' 30\" W. 523.62 feet, N. 86\u0e10 34' 30\" W. 161.99 feet and N. 86\u0e10 25' 00\" W. 406.45 feet to a corner and the easterly side of Hog Hill Road, thence in a northerly and easterly direction and along the easterly side of Hog Hill Road the following courses and distances,\n\n\n N. 15\u0e10 25' 00\" E. 221.41 feet,\n N. 22\u0e10 28' 20\" E. 175.15 feet,\n N. 33\u0e10 28' 30\" E. 58.71 feet,\n N. 48\u0e10 40' 00\" E. 136.66 feet,\n N. 58\u0e10 36' 50\" E. 80.29 feet,\n N. 60\u0e10 17' 00\" E. 94.77 feet,\n N. 57\u0e10 54' 00\" E. 173.34 feet,\n N. 61\u0e10 30' 50\" E. 126.99 feet,\n N. 57\u0e10 56' 50\" E. 65.13 feet,\n N. 39\u0e10 29' 30\" E. 151.44 feet,\n N. 26\u0e10 26' 20\" E. 60.00 feet,\n N. 13\u0e10 42' 00\" E. 99.80 feet and\n N. 20\u0e10 04' 50\" E. 35.84 feet to a corner\n\nand lands now or formerly of Coleman, thence in an easterly direction and along the dividing line between lands of Coleman and lands of Gabriel S. 60\u0e10 08' 40\" E. 335.63 feet, N. 73\u0e10 25' 20\" E. 63.47 feet, N. 18\u0e10 44' 20\" E. 7.94 feet and S. 68\u0e10 14' 40\" E. 20.20 feet to a corner and the westerly side of Seven Bridge Road, thence in a southerly direction and along the westerly side of Seven Bridge Road the following courses and distances,\n\n\n S. 4\u0e10 11' 50\" E. 156.84 feet,\n S. 19\u0e10 31' 00\" E. 225.68 feet,\n S. 0\u0e10 58' 30\" E. 43.56 feet,\n S. 1\u0e10 21' 10\" E. 50.00 feet,\n S. 0\u0e10 42' 30\" W. 250.17 feet,\n S. 3\u0e10 04' 20\" E. 100.04 feet,\n S. 1\u0e10 21' 30\" W. 37.99 feet and\n S. 4\u0e10 14' 15\" W. 179.00 feet to the\n point\n\nand place of beginning.\nTOGETHER with the appurtenances. This Judgment shall be operative as a conveyance of the above-described property; and, further, the County Clerk of Westchester, Division of Land Records, be and is hereby authorized and directed to accept a certified copy of this Judgment as such conveyance without necessity of any further evidence of transfer or conveyance and duly to record this Judgment in the same manner as a deed.\n9. The actions of the plaintiffs are hereby declared to have been part of an intentional *937 scheme to defraud FNBB and to prevent it from obtaining repayment of the debts owed to it by DHO, Overmyer Distribution Services, Inc. (\"ODS\"), TOC and Mr. Overmyer.\n10. It is hereby declared that, by reason of the fraud perpetrated on FNBB by the plaintiffs and related Overmyer entities, FNBB has equitable liens and constructive trusts upon the assets controlled by Mr. Overmyer that have been used as instruments of fraud, to the full extent of the debts owed to FNBB by DHO, ODS, TOC and Mr. Overmyer for which debts the plaintiffs Hadar, Mr. Overmyer, DHO and ISLI are jointly and severally liable to the defendant FNBB in the following amounts which are cumulative:\n(a) $11,723,754.53 plus interest at the prime rate of FNBB as from time to time established plus 3% with a minimum of 9% since April 1, 1982;\n(b) $171,947.76 plus interest at the prime rate of FNBB as from time to time established plus 2% since April 1, 1982;\n(c) $6,230,742.07 plus interest at the prime rate of FNBB as from time to time established plus 1% with a minimum of 6% since April 1, 1982;\n(d) $4,267,330.91 plus interest for costs of collection.\n11. In order to implement FNBB's equitable rights as aforesaid and as a remedy for the fraud on FNBB, the Court hereby vests the assets in question in nominees of FNBB as provided in paragraphs 12 through 22, inclusive, of this Judgment.\n12. All right, title and interest of Intermodal Terminals, Inc., and Shirley C. Overmyer in and to the following described property is hereby divested and vested in GTA Realty, Inc.\nAll that certain plot, tract or parcel of land together with the buildings and improvements situate thereon lying and being in the Town of Yorktown, County of Westchester, and State of New York, located on Hog Hill and consisting of two parcels as described in the Deed dated October 22, 1968, from M. Francis Crawford also known as Mark Francis Crawford, to Daniel H. Overmyer and Shirley C. Overmyer, his wife as recorded in book 6816, page 419 Westchester County Clerk's Office, White Plains, New York, on October 23, 1968.\nKNOWN and designated on the tax map of the Town of Yorktown as Section 19.03 parcel 20, and Section 19.03 parcel 21.\nTogether with the appurtenances.\nAll that certain plot, piece or parcel of land, with the buildings and improvements thereon erected, situate lying and being in the Town of Yorktown, County of Westchester, State of New York, being the same lands located in Town of Yorktown, Westchester County known as a part of Lot 1, Section 19, Parcel 21, and conveyed by J.M. Dryfoos 1120 Park, to Daniel H. Overmyer, 201 East 42nd Street, New York, N.Y. by Deed dated December 15, 1969, and recorded in Book 6904, Page 57-60 on January 20, 1970, in Westchester County Clerk's Office, White Plains, New York, consisting of 12.179 Acres, more or less.\nBeing Section 19.03 Parcel 21, on Tax Map of Town of Yorktown. Together with the appurtenances.\nThis Judgment shall be operative as a conveyance of the above-described property; and, further, the County Clerk of Westchester, Division of Land Records, be and is hereby authorized and directed to accept a certified copy of this Judgment as such conveyance without necessity of any further evidence of transfer or conveyance and duly to record this Judgment in the same manner as a deed.\n13. The leasehold interests of Jeebs in the premises on the 29th floor of 3 Park Avenue, New York, New York, and in Apartment 22G, 4 Park Avenue, New York, New York, are hereby divested and are vested in GTA Realty, Inc.\n14. All right, title, and interest in and to all the outstanding shares of capital stock, or similar evidences of investment, in TOC is hereby vested in Bellerophon, Inc.\n*938 15. All right, title, and interest in and to all the outstanding shares of capital stock, or similar evidences of investment, in D.H. Overmyer of Canada, Ltd. (\"DHO Canada\"), D.H. Overmyer Company (Quebec) Ltd. (\"DHO Quebec\") and Overmyer Canada, Ltd., is hereby vested in Heracles, Inc.\n16. All right, title, and interest in and to all the outstanding shares of capital stock, or similar evidences of investment, in Intermodal Terminals, Inc., is hereby vested in Bilbo Baggins, Inc.\n17. All right, title, and interest in and to all the outstanding shares of capital stock, or similar evidences of investment, in Weathervane Farms, Inc., is hereby vested in Medea, Inc.\n18. All right, title, and interest in and to all the outstanding shares of capital stock, or similar evidences of investment, in Expediter Warehouse Co. (\"Expediter\") is hereby vested in Theseus, Inc.\n19. All right, title, and interest in and to all the outstanding shares of capital stock, or similar evidences of investment, in Deauville Private Rental Homes, Inc. (\"Deauville\"), is hereby vested in Perseus, Inc.\n20. All right, title, and interest in and to all the outstanding shares of capital stock, or similar evidences of investment, in Freight Delivery Service, Inc. (\"FDS\"), Hadar, ISLI, Merchants & Manufacturers Warehouse, Inc. (\"M & M\"), Overmodal Terminals, Inc. (\"Overmodal\"), Overmyer, A.G., R-T Realty Corp., Servicenter, Inc., Southwest Warehouse Co., Inc. (\"Southwest\"), Standard Warehouse Co., Inc. (\"Standard\"), and Wilkinson Storage Corporation (\"Wilkinson\") is hereby vested in Cadmus, Inc.\n21. All right, title, and interest in and to all the outstanding shares of capital stock, or similar evidences of investment, in AGG, Jeebs, National Distribution Services, Inc. (\"NDS\"), National Distribution Services of California, Inc. (\"NDS of California\"), Omega and Peerless Manufacturing Corporation (\"Peerless\") is hereby vested in Siegfried, Inc.\n22. Subject to the provisions of paragraph 8 of this Judgment and subject to valid claims of legitimate creditors, all right, title, and interest in and to the assets of AGG, Deauville, DHO, Expediter, Hadar, ISLI, Intermodal Terminals, Inc., Jeebs, NDS, NDS of California, Omega, Peerless, TOC and Weathervane Farms, Inc., is hereby vested in Gawain, Inc.\n23. Hadar, Mr. Overmyer, DHO and ISLI, and their officers, agents, servants, employees and attorneys are hereby enjoined from performing any act with respect to AGG, Deauville, DHO, Canada, DHO Quebec, Expediter, FDS, ISLI, Intermodal Terminals, Inc., Jeebs, M & M, NDS, NDS of California, Omega, Overmyer, A.G., Overmyer Canada, Ltd., Peerless, R-T Realty Corp., Servicenter, Inc., Southwest, Standard, Weathervane Farms, Inc., and Wilkinson other than in the ordinary course of their businesses or as provided in paragraph 24 of this Judgment.\n24. Within two business days of the entry of this Judgment Hadar, Mr. Overmyer, DHO and ISLI are enjoined to turn over to FNBB all assets and records of AGG, Deauville, DHO Canada, DHO Quebec, Expediter, FDS, Hadar, ISLI, Intermodal Terminals, Inc., Jeebs, M & M, NDS, NDS of California, Omega, Overmyer, A.G., Overmyer Canada, Ltd., Peerless, R-T Realty Corp., Servicenter, Inc., Southwest, Standard, Weathervane Farms, Inc., and Wilkinson, the foregoing not being property of the estate of either Mr. Overmyer or DHO.\n25. It is hereby declared that the capital stock of Telecasting was validly pledged to FNBB to secure all indebtedness of DHO, ODS, TOC and Mr. Overmyer to FNBB.\n26. FNBB shall render monthly accountings to Hadar, Mr. Overmyer, DHO and ISLI by registered or certified mail addressed to each at such address as each may specify in a writing actually received by FNBB, or, if no such address shall be so specified, by filing in this Court as a part of the record in this adversary proceeding, such accountings to show the amounts realized on disposition of the assets listed in paragraphs 12-22, inclusive, of this Judgment *939 and said accountings shall become final and conclusively binding on FNBB, Hadar, Mr. Overmyer, DHO and ISLI unless objected to in this Court within thirty (30) days. Any objection to such accountings, including any objection to the amount realized, shall be tried and heard only in this Court without jury and not in any other court or tribunal. In the event the obligations of Hadar, Mr. Overmyer, DHO and ISLI to FNBB shall at any time become totally satisfied, FNBB shall return to their former owners any of the assets listed in paragraphs 12-22, inclusive, of this Judgment still in its possession and any excess proceeds from the disposition thereof.\n27. Mr. Overmyer is liable to Hadar in the amount of $183,298.10 plus interest.\n28. Mr. Overmyer is liable to Telecasting for $100,000.00 plus interest as punitive damages for his fraud.\n29. Mr. Overmyer is liable to FNBB for $150,000.00 plus interest as punitive damages for his fraud.\n30. Edmund M. Connery, Esquire, and Russell Morton Brown, Esquire, are jointly and severally liable to Telecasting in the amount of $5,000.00 plus interest.\n31. As to Hadar's claims against Telecasting asserted in this adversary proceeding, Hadar shall take nothing and the claims are hereby dismissed on the merits.\n32. It is hereby declared that ODS became inoperative on March 1, 1975, and no longer exists or has capacity to sue or be sued.\n33. All claims asserted by Mr. Overmyer, ODS, ISLI and DHO against FNBB are hereby dismissed with prejudice in accordance with the Court's Findings of Fact and Conclusions of Law entered on March 23, 1982.\n34. All claims asserted by FNBB against ODS are hereby dismissed with prejudice and without costs.\n35. Telecasting's Counterclaim against General Electric Company is hereby dismissed without prejudice and without costs.\n36. Telecasting is to have costs against Hadar, Mr. Overmyer, DHO and ISLI.\n37. This Judgment adjudicates all the claims of all the parties.\nNOTES\n[1] Hadar, Mr. Overmyer, ISLI, ODS and DHO are hereinafter sometimes collectively referred to as \"Overmyer plaintiffs.\"\n[2] The Lexis printout that was admitted as FNBB Ex. 65 is one long scroll without numbered pages. It is cited by \"panels\" that coincide with one screen of text. Panel 1 is the caption and first paragraph, panel 2 the next two paragraphs, panel 3 the next two and one-half paragraphs, etc.\n[3] O.R.C. \u0e07 1336.07, 7 N.Y. Debtor and Creditor Law \u0e07 276 (McKinney) and Mass.Gen.Laws Ann. c. 109A.\n[4] In taking this important step in fraudulent conveyance law, the Court reasoned that \"because fraud and deceit abound in these days more than in former times, it was resolved in this case by the whole Court, that all statutes made against fraud should be liberally and beneficially expanded to suppress the fraud.\" Twyne's case, supra at 815-16.\n[5] The figure of $4,059,217.45 given by Mr. McArdle (McArdle, 53 Tr. 5408) and used on the collection expenses chart (Chart, FNBB Ex. 362) was for legal collection expenses only. (See Summary, FNBB Ex. 358, tab 1, p. 1) The nonlegal collection expenses and FNBB out-of-pocket collection expenses were inadvertently omitted.\n[6] Levine and his colleague, Charles Dougherty, spent over 600 hours reviewing the collection efforts of FNBB's counsel, Ropes & Gray, Wiel, Gotshal & Manges and Baker & Hostetler, during the period commencing November, 1973, and ending March 26, 1982.\n[7] Of the $3,444,301.15 of legal fees incurred by FNBB (excluding disbursements), $3,218,590.87 were for attorney fees billed by Ropes & Gray, Wiel, Gotshal & Manges and Baker & Hostetler.\n[8] While Richard L. Levine, Esquire testified he did not review or consider approximately 125 hours of Baker & Hostetler's time because the services rendered were considered by Baker & Hostetler to be privileged (Levine, 56 Tr. 5819-20), the services rendered during those hours were rendered in connection with these proceedings and FNBB was billed accordingly. Similarly, Levine testified that he considered 40 hours of Weil, Gotshal & Mange's billed time arguably to be unrelated to the collection efforts, and accordingly did not consider this time in his determination of reasonable fees (Levine, 56 Tr. 5820-21). Levine discounted this time in an effort to be as conservative in his evaluation as possible. Levine computed his own fee for the services rendered by Baker & Hostetler, Ropes & Gray and Weil, Gotshal & Manges, after discounting the 125 hours of Baker & Hostetler's time and 40 hours of Weil, Gotshal & Manges' time. In addition, Levine eliminated $36,000 of Weil, Gotshal & Manges' 1973 billings of $136,000, not because they were improperly billed, but because the original time records for that period were unavailable and Levine wanted to be sure his fee calculation was conservative. (Levine, 56 Tr. 5821-22)\n[9] 28 U.S.C. \u0e07 1927. Counsel's liability for excessive costs\n\nAny 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.\nAs amended Sept. 12, 1980, Pub.L. 96-349, \u0e07 3, 94 Stat. 1156.\n[10] Uniform Commercial Code \u0e07\u0e07 4-401 and 4-402:\n\n\u0e07 4-401. When Bank May Charge Customer's Account\n(1) As against its customer, a bank may charge against his account any item which is otherwise properly payable from that account even though the charge creates an overdraft.\n(2) A bank which in good faith makes payment to a holder may charge the indicated account of its customer according to\n(a) the original tenor of his altered item; or\n(b) the tenor of his completed item, even though the bank knows the item has been completed unless the bank has notice that the completion was improper.\n\u0e07 4-402. Bank's Liability to Customer for Wrongful Dishonor\nA payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. When the dishonor occurs through mistake liability is limited to actual damages proved. If so proximately caused and proved damages may include damages for an arrest or prosecution of the customer or other consequential damages. Whether any consequential damages are proximately caused by the wrongful dishonor is a question of fact to be determined in each case.\n[11] New York General Obligations Law \u0e07 7-101. Money deposited or advanced for use or rental of personal property; waiver void\n\n1. Whenever money shall be deposited or advanced on a contract for the use or rental of personal property as security for performance of the contract or to be applied to payments upon such contract when due, such money, with interest accruing thereon, if any, until repaid or so applied, shall continue to be the money of the person making such deposit or advance and shall be a trust fund in the possession of the person with whom such deposit or advance shall be made and shall be deposited in a bank or trust company and shall not be mingled with other funds or become an asset of such trustee.\n2. Any provision of a contract whereby a person who has deposited or advanced money on a contract for the use or rental of personal property as security for the performance of the contract waives any provision of this section is absolutely void.\n3. This section shall not be applicable to any deposit or advance of money made in connection with the borrowing of securities for any lawful purpose.\n[12] Bankruptcy Code \u0e07 502(d):\n\nNotwithstanding subsections (a) and (b) of this section, the court shall disallow any claim of any entity from which property is recoverable under section 542, 543, 550, or 553 of this title or that is a transferee of a transfer avoidable under section 522(f), 522(h), 544, 545, 547, 548, 549, or 721(a) of this title, unless such entity or transferee has paid the amount, or turned over any such property, for which such entity or transferee is liable under section 522(i), 542, 543, 550, or 553 of this title.\n"} -{"text": " FILED\n United States Court of Appeals\n UNITED STATES COURT OF APPEALS Tenth Circuit\n\n FOR THE TENTH CIRCUIT March 6, 2020\n _________________________________\n Christopher M. Wolpert\n Clerk of Court\n BILLY JOE BARKER, JR.,\n\n Petitioner - Appellant, No. 19-3266\n (D.C. No. 5:19-CV-03213-SAC)\n v. (D. Kan.)\n\n DAN SCHNURR,\n\n Respondent - Appellee.\n _________________________________\n\n ORDER DENYING CERTIFICATE OF APPEALABILITY\n _________________________________\n\nBefore HARTZ, PHILLIPS, and EID, Circuit Judges.\n _________________________________\n\n Applicant Billy Joe Barker Jr., a pro se prisoner in the custody of the Kansas\n\nDepartment of Corrections, requests a certificate of appealability (COA) to challenge the\n\ndenial by the United States District Court for the District of Kansas of his application for\n\nrelief under 28 U.S.C. \u00a7 2254. See 28 U.S.C. \u00a7 2253(c)(1)(A) (requiring a COA for a\n\nprisoner in state custody to appeal from the denial of relief under \u00a7 2254). Because\n\nApplicant has failed to make a substantial showing of the denial of a constitutional right,\n\nas required by 28 U.S.C. \u00a7 2253(c)(2), we deny a COA and dismiss the appeal.\n\n In 1998 Applicant was convicted on multiple charges including attempted first-\n\ndegree murder of three police officers and the aggravated assault of a fourth. He was\n\nsentenced to a total term of 562 months\u2019 imprisonment. On appeal the Kansas Court of\n\nAppeals (KCOA) affirmed Applicant\u2019s convictions and sentences except it dismissed the\n\fconviction of aggravated assault and set aside one of the attempted-murder convictions,\n\npermitting the State to retry that charge on remand. See State v. Barker, No. 81,092,\n\n2000 Kan. App. LEXIS 609, at *1 (Kan. Ct. App. May 26, 2000) (unpublished). On\n\nremand the State declined to retry the attempted-murder charge; and in 2001 the district\n\ncourt resentenced Applicant on the remaining convictions again to 562 months\u2019\n\nimprisonment.\n\n In 2016 Applicant claimed his sentence was illegal based on new case law\n\ngoverning his criminal-history score. The Kansas district court reduced his sentence to\n\n514 months, but it rejected his claim that the court had lacked jurisdiction to resentence\n\nhim in 2001. The KCOA affirmed on appeal, stating, among other things, that the\n\nresentencing under a new statute did not violate Applicant\u2019s due-process rights because\n\nhis sentence was not increased and the statute did not change existing law but merely\n\nclarified it. See State v. Barker, No. 117,901, 2018 WL 5093294, at *3 (Kan. Ct. App.\n\nOct. 19, 2018).\n\n Applicant filed his \u00a7 2254 application in federal district court on October 21,\n\n2019. The application asserted only one ground for relief: \u201c28 U.S.C. 2254 \u2013\n\nRule 1.[a][1][2][b], Guarantee Fundamental 6th Amendment Right To A Fair And\n\nSpeedy Trial, Due Process Of Law.\u201d R., Vol. 1 at 8. For supporting facts, the application\n\nstated only:\n\n The facts outlined in the Kansas Supreme Court\u2019s decision [accompanying\n as appendix i] substantially states the nature and procedural posture of this\n case. No further statement of facts is necessary except for . . . the timeliness\n of this petition\u2019s one-year statute of limitation as contained in 28 U.S.C.\n 2244[d] October 19[], 2018, [does-not bar pro se petitioner\u2019s petition].\n\n\n 2\n\fR., Vol. 1 at 8 (brackets in original, capitalization omitted). (We note, however, that in\n\nresponse to a question on the court\u2019s form (\u201cIs there any ground in this petition that has\n\nnot been presented in some state or federal court? If so, which ground or grounds have\n\nnot been presented, and state your reasons for not presenting them[?]\u201d), the application\n\nstated: \u201cIn light of the court\u2019s May 26th, 2000 decision for a \u2018new trial,\u2019 I still set in\n\nstate-prison beyond my right to a \u2018speedy trial.\u2019 Imprisonment beyond one\u2019s\n\nconstitutional term violates U.S.A. the 8th amendment to cruel and unusual punishment\n\nand the 14th amendment due process.\u201d R., Vol. 1 at 14. (capitalization and citation\n\nomitted).)\n\n Unable to discern any comprehensible claim in the ground for relief stated in the\n\napplication, the district court issued a five-page order to show cause on October 24. The\n\norder explained why the application did not appear to raise any cognizable claim and\n\nordered Applicant to show cause why the petition should not be summarily dismissed for\n\n(1) failure to state a violation of a federal right; (2) failure to exhaust state-court\n\nremedies; and (3) failure to state a clear and viable due-process claim. The order required\n\nApplicant to respond by November 25, 2019. But Applicant submitted no response, and\n\non November 27 the district court dismissed the case and declined to issue a COA.\n\nApplicant filed a timely notice of appeal.\n\n A COA will issue \u201conly if the applicant has made a substantial showing of the\n\ndenial of a constitutional right.\u201d 28 U.S.C. \u00a7 2253(c)(2). This standard requires \u201ca\n\ndemonstration that . . . includes showing that reasonable jurists could debate whether (or,\n\nfor that matter, agree that) the [application] should have been resolved in a different\n\n\n 3\n\fmanner or that the issues presented were adequate to deserve encouragement to proceed\n\nfurther.\u201d Slack v. McDaniel, 529 U.S. 473, 484 (2000) (internal quotation marks\n\nomitted). In other words, the applicant must show that the district court\u2019s resolution of\n\nthe constitutional claim was either \u201cdebatable or wrong.\u201d Id.\n\n The Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), provides\n\nthat when a claim has been adjudicated on the merits in a state court, a federal court can\n\ngrant habeas relief only if the applicant establishes that the state-court decision was\n\n\u201ccontrary to, or involved an unreasonable application of, clearly established Federal law,\n\nas determined by the Supreme Court of the United States.\u201d 28 U.S.C. \u00a7 2254(d)(1).\n\nThus, a federal court may not grant relief simply because it concludes in its independent\n\njudgment that the relevant state-court decision applied clearly established federal law\n\nerroneously or incorrectly. See id. Rather, \u201c[i]n order for a state court\u2019s decision to be an\n\nunreasonable application of this Court\u2019s case law, the ruling must be objectively\n\nunreasonable, not merely wrong; even clear error will not suffice.\u201d Virginia v. LeBlanc,\n\n137 S. Ct. 1726, 1728 (2017) (per curiam) (internal quotation marks omitted).\n\n\u201cAEDPA\u2019s deferential treatment of state court decisions must be incorporated into our\n\nconsideration of a habeas petitioner\u2019s request for [a] COA.\u201d Dockins v. Hines, 374 F.3d\n\n935, 938 (10th Cir. 2004).\n\n Applicant\u2019s brief in this court is scarcely more informative than his \u00a7 2254\n\napplication; and, of course, he cannot now raise claims not raised in the district court, see\n\nParker v. Scott, 394 F.3d 1302, 1319\u201320 (10th Cir. 2005) (issues not raised in district\n\ncourt in \u00a7 2254 proceeding are waived). We agree with the district court that the\n\n\n 4\n\fapplication is inadequate to state a claim for relief. Applicant does not explain how his\n\ntrial was unfair. Insofar as he is claiming that he has not obtained a speedy trial on the\n\nremanded attempted-murder charge, the State\u2019s dismissal of the charge on remand\n\neliminated any need for a new trial. And insofar as his due-process claim is a reiteration\n\nof the state-court due-process claim he made in challenging his resentencing, he has\n\nprovided no argument (and we can think of none) why the KCOA\u2019s resolution of the\n\nclaim was an unreasonable application of United States Supreme Court law. Thus, no\n\nreasonable jurist could debate the propriety of the district court\u2019s dismissal of the \u00a7 2254\n\napplication\n\n We DENY a COA and DISMISS the appeal.\n\n\n Entered for the Court\n\n\n Harris L Hartz\n Circuit Judge\n\n\n\n\n 5\n\f"} -{"text": " IN THE UNITED STATES COURT OF APPEALS\n FOR THE FIFTH CIRCUIT United States Court of Appeals\n Fifth Circuit\n\n FILED\n June 22, 2009\n No. 08-50793\n Summary Calendar Charles R. Fulbruge III\n Clerk\n\nCRAE ROBERT PEASE\n\n Plaintiff-Appellant\n\nv.\n\nFIRST NATIONAL BANK, Giddings; BILLY MORGAN; T MARK ROGSTADT\n\n Defendants-Appellees\n\n\n Appeal from the United States District Court\n for the Western District of Texas\n USDC No. 1:07-CV-631\n\n\nBefore JONES, Chief Judge, and STEWART and OWEN, Circuit Judges.\nEDITH H. JONES, Chief Judge:*\n Crae Robert Pease sued Appellees for deprivation of his Fourth, Fifth, and\nFourteenth Amendment rights. Because Pease has not stated a claim cognizable\nin federal court, we affirm the district court\u2019s dismissal of all claims.\n I. BACKGROUND\n In 2002, Pease executed a note to First National Bank, Giddings, for\n$111,236.36. Pease also signed an extension of real estate lien note for\n$110,204.77. The bank recorded a deed of trust to secure these loans. Some\n\n *\n Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not\nbe published and is not precedent except under the limited circumstances set forth in 5TH CIR .\nR. 47.5.4.\n\f No. 08-50793\n\ntime later, the Bank provided notice to Pease that he had defaulted on the loan\nand then gave notice of a substitute trustee\u2019s sale on April 7, 2006. Billy\nMorgan, an officer of the Bank, appointed T. Mark Rogstadt, an attorney\nemployed by the Bank, as substitute trustee to sell the property. Pease filed a\nsuit to quiet title to the property in state court on April 28. The property was\nsold on May 5, and Lee County Sheriff Rodney Meyer gave notice to Pease to\nvacate the property.\n The Bank counterclaimed for forcible detainer in the quiet title action. On\nOctober 17, 2006, Judge Reva Towslee-Corbett held that the bank was the owner\nand title holder and ordered Pease to vacate the property. At the time of this\nappeal, Pease continued to occupy the property.\n In federal court, Pease sued the Bank, Morgan, Rogstadt, Sheriff Meyer,\nand Judge Towslee-Corbett, alleging that the home foreclosure deprived him of\nhis rights and property without due process through fraud and deceit in violation\nof the Fourth, Fifth, and Fourteenth Amendments. He sought $150,000 in\ndamages and $350,000 in punitive damages. The district court granted the\nBank\u2019s, Morgan\u2019s, and Rogstadt\u2019s Motion to Dismiss, finding that Pease had not\nadequately alleged that these defendants were state actors for the purposes of\n42 U.S.C. \u00a7 1983 and \u00a7 985.1 The district court also declined to exercise\njurisdiction over any pendent state claims.\n Pease appeals.\n II. DISCUSSION\n The grant of a motion to dismiss under Rule 12(b)(6) is reviewed de novo.\nKennedy v. Chase Manhattan Bank USA, NA, 369 F.3d 833, 839 (5th Cir. 2004).\nWe construe the complaint in the light most favorable to the plaintiff and draw\nall reasonable inferences in the plaintiff's favor. See Lovick v. Ritemoney Ltd.,\n\n\n\n 1\n In a separate order that is not before us, the district court also dismissed all claims\nagainst the remaining parties.\n\n 2\n\f No. 08-50793\n\n378 F.3d 433, 437 (5th Cir. 2004). To survive a Rule 12(b)(6) motion to dismiss,\nthe plaintiff must plead \u201cenough facts to state a claim to relief that is plausible\non its face.\u201d Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1974\n(2007).\n In his pro se brief to this court, Pease argues that the state counter-claim\nin the quiet title action was improperly presented, brought in the wrong court,\nand was never properly served on him. Because the state court did not have\njurisdiction to try a forcible detainer case, he contends that any resulting order\nwas void. He also claims that no landlord-tenant relationship existed between\nhimself and the Bank, that the promissory note and underlying deed of trust\nwere satisfied, and that the deed of trust had expired. This court will construe\na pro se appellant\u2019s claims liberally rather than hold him to the standards\nexpected of lawyers. See United States v. Glinsey, 209 F.3d 386, 392 n.4 (5th Cir.\n2000). We, therefore, divide Pease\u2019s arguments on appeal into two\ncategories\u2014those attacking the procedure in the state court and those attacking\nthe merits of the state court\u2019s judgment.\n Section 1983 claims arising from foreclosure proceedings are not new. The\nSupreme Court has held that foreclosure procedures implicate the Fourteenth\nAmendment only where there is at least some direct state involvement in the\nexecution of the foreclosure or seizure. See Fuentes v. Shevin, 407 U.S. 67, 70-71,\n92 S. Ct. 1983 (1972). The Court has contrasted what types of actions will\namount to actions of the state. Compare Lugar v. Edmonson Oil Co., 457 U.S.\n922, 102 S. Ct. 2744 (1982) (finding state action where a creditor\u2019s ex parte\npetition for a writ of prejudgment attachment was executed by the county\nsheriff, sequestering the property pending adjudication of the claim) with Flagg\nBros., Inc. v. Brooks, 436 U.S. 149, 98 S. Ct. 1729 (1978) (holding that the\nlegislative approval of a private self-help remedy is not sufficient to convert\nprivate conduct into state action). Fatal to Pease\u2019s claims, this court has held\nthat \u201cno significant state action is involved in non-judicial foreclosures under a\n\n 3\n\f No. 08-50793\n\ndeed of trust.\u201d Barrera v. Security Bldg. & Inv. Corp., 519 F.2d 1166, 1170 (5th\nCir. 1975).\n In Earnest v. Lowentritt, 690 F.2d 1198, 1201 (5th Cir. 1982), a property\nwas sold in a foreclosure action by sheriff\u2019s sale. The original property owners\u2019\n\u00a7 1983 and \u00a7 1985 claims were dismissed because they failed to meet the state\naction requirement. The owners alleged, as in this case, that a conspiracy\nexisted between the state judge and the defendant sufficient to satisfy the state\naction requirement. This court held that \u201cunlike the situation involving\npre-adjudicative seizures, the execution order permitting the sheriff to sell the\nEarnest property was obtained only after notice to the debtor and the\nopportunity to be heard concerning the merits of the seizure.\u201d Id. at 1202.\nConsequently, neither the forcible detainer action nor the actions of Appellees\nin pursuing it gave rise to state action sanctionable under \u00a7\u00a7 1983 and 1985.\n Pease\u2019s suit fails for an additional reason. Pease claims that he is \u201cnot\ncomplaining of the foreclosure, [he] is complaining that the bank, acting under\ncolor of law (forcible detainer) conspired with state actors, Towslee-Corbett and\nMeyers [sic] to implement an ejection action in a court that was without subject\nmatter jurisdiction.\u201d In short, Pease asserts that his due process rights were\nviolated when the counterclaim was heard in the incorrect state court. Even\nassuming that his jurisdictional arguments are correct, the Constitution\u2019s\nguarantee of due process is not offended when the wrong state court determines\na matter of state law. Cf. Kremer v. Chem. Constr. Corp., 456 U.S. 461, 483, 102\nS. Ct. 1883, 1898 (1982) (holding that in the \u201cfull faith and credit\u201d context that\n\u201cno single model of procedural fairness, let alone a particular form of procedure,\nis dictated by the Due Process Clause\u201d).\n Finally, to the extent Pease is challenging the merits of the foreclosure, we\nwill not entertain a collateral attack on the final judgment of a state court. As\n\n\n\n\n 4\n\f No. 08-50793\n\nwe read the briefs and the record, Pease\u2019s state court case is over.2 In light of the\nfinality of the state court proceedings, Pease\u2019s claims are barred by the Rooker-\nFeldman doctrine, which deprives federal courts of subject matter jurisdiction\nto review a final state court decision arising out of a judicial proceeding unless\na federal statute specifically authorizes such review. See D.C. Court of Appeals\nv. Feldman, 460 U.S. 462, 103 S. Ct. 1303 (1983); Rooker v. Fidelity Trust Co.,\n263 U.S. 413, 44 S. Ct. 149 (1923); see also Johnson v. De Grandy, 512 U.S. 997,\n1005-1006, 114 S. Ct. 2647 (1994) (Rooker-Feldman bars a losing party in state\ncourt \u201cfrom seeking what in substance would be appellate review of the state\njudgment in a United States district court, based on the losing party\u2019s claim that\nthe state judgment itself violates the loser\u2019s federal rights\u201d). The Supreme Court\nrecently reaffirmed that a federal court has no jurisdiction over \u201ccases brought\nby state-court losers complaining of injuries caused by state-court judgments\nrendered before the district court proceedings commenced and inviting district\ncourt review and rejection of those judgments.\u201d Exxon Mobil Corp. v. Saudi\nBasic Indus. Corp., 544 U.S. 280, 284, 125 S. Ct. 1517, 1521-22 (2005). The\nRooker-Feldman doctrine would bar this court from hearing any challenge to the\nforeclosure order because it is a challenge \u201cin which the constitutional claims\npresented . . . are inextricably intertwined with the state court\u2019s grant or denial\nof relief.\u201d Hale v. Harney, 786 F.2d 688, 691 (5th Cir. 1986).\n III. CONCLUSION\n For the foregoing reasons, the district court\u2019s judgment of dismissal is\nAFFIRMED.\n\n\n\n\n 2\n Pease contended below that his state court proceeding was not yet final. We, however,\nfind no evidence of this in the record. In fact, Pease admits in his brief to this court that his\nstate appeal was dismissed for want of prosecution.\n\n 5\n\f"} -{"text": " TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN\n\n\n NO. 03-10-00611-CV\n\n\n\n In re Charles W. Bishop, II\n\n\n ORIGINAL PROCEEDING FROM TRAVIS COUNTY\n\n\n\n MEMORANDUM OPINION\n\n\n The petition for writ of mandamus is denied. See Tex. R. App. P. 52.8(a).\n\n\n\n\n __________________________________________\n\n Bob Pemberton, Justice\n\nBefore Chief Justice Jones, Justices Puryear and Pemberton\n\nFiled: September 23, 2010\n\f"} -{"text": "\f IN RE ELIANAH T.-T.\u2014CONCURRENCE\n\n ROGERS, C. J., with whom EVELEIGH, J., joins, con-\ncurring. I agree and join with the majority\u2019s holding\nthat General Statutes \u00a7 17a-10 (c)1 does not authorize\nthe Department of Children and Families (department),\nto vaccinate children in the temporary custody of the\npetitioner, the Commissioner of Children and Families\n(commissioner), over the religious objection of the\nrespondent parents, Giordan T. and Nicanol T. I write\nseparately in order to more fully address the commis-\nsioner\u2019s claim that, as the guardian of children commit-\nted to her temporary custody pursuant to General\nStatutes \u00a7 46b-129 (j) (4),2 she has all of the rights and\nobligations of a guardian as set forth in General Statutes\n\u00a7 17a-1 (12),3 including the right to authorize the vacci-\nnation of such children. In support of this contention,\nthe commissioner points out that, on August 23, 2016,\nthe trial court issued a form order stating that \u2018\u2018[t]he\nchild or youth is committed until further order of the\ncourt to the Commissioner of Children and Families\nwho shall be the guardian of the child or youth\naccording to the statutes in such cases.\u2019\u2019\n The genealogy and legislative history of the relevant\nstatutes, however, do not support the claim that the\ncommissioner is the exclusive guardian of children who\nare temporarily committed to her custody, with all of\nthe rights and obligations set forth in \u00a7 17a-1 (12). In\n1971, the predecessor to \u00a7 46b-129 (j) (4) provided that\nthe \u2018\u2018welfare commissioner\u2019\u2019 was the guardian of a child\nwho was committed to his custody. See General Stat-\nutes (Supp. 1969) \u00a7 17-62 (d). Notwithstanding this pro-\nvision and the fact that certain children were committed\nto both the Welfare Commissioner and the Commis-\nsioner of Children and Youth Services, at some point\nin 1970 or 1971, the Attorney General wrote an opinion\nindicating that the Commissioner of Children and Youth\nServices could not authorize medical treatment for chil-\ndren in his custody because he was only their custo-\ndian.4 See Conn. Joint Standing Committee Hearings,\nCorrections, Welfare and Humane Institutions, 1971\nSess., Pt. 1, p. 185\u201386, remarks of John Dorman, Special\nAssistant to the Commissioner of Children and Youth\nServices (referencing \u2018\u2018dual commitments\u2019\u2019 where child\nis committed to the Department of Welfare and Com-\nmissioner of Children and Youth Services, and noting\nrecent opinion of Attorney General that state cannot\nauthorize medical treatment for children in its custody\nbecause it has \u2018\u2018mere custody of the child and not guard-\nianship\u2019\u2019); 14 H.R. Proc., Pt. 5a, 1971 Sess., p. 2201,\nremarks of Representative John F. Papandrea (\u2018\u2018[This\nbill] provides that the Commissioner of Children and\nYouth Services shall be empowered and authorized to\nhave emergency medical treatment given to any ward\nplaced in his custody . . . . This presently is not possi-\n\fble and the Attorney General last year was forced to\ngive a ruling indicating that the commissioner had no\npower even in the face of an emergency.\u2019\u2019). Because\nthese agencies lacked authority to authorize medical\ntreatment for children in their custody, the legislature\nenacted No. 295 of the 1971 Public Acts, enabling the\nCommissioner of Children and Youth Services to autho-\nrize medical treatment for children in his custody. See\nGeneral Statutes (Supp. 1971) \u00a7 17-418 (c). Notably,\nhowever, neither the original version of \u00a7 17a-10 (c),\nwhich referred to the Commissioner of Children and\nYouth Services; see Public Acts 1971, No. 295, \u00a7 1; nor\nthe current version, which refers to the commissioner;\nsee Public Acts 1993, No. 93-91 (amending \u00a7 17a-10 [c]\nto substitute \u2018\u2018Commissioner of Children and Families\u2019\u2019\nfor \u2018\u2018Commissioner of Children and Youth Services\u2019\u2019);\nexpressly provides that the agency to which a neglected\nor abused child is committed, or the commissioner of\nthat agency, is the child\u2019s guardian. Moreover, as the\nmajority opinion points out, the legislative history of\n\u00a7 17a-10 (c) indicates that it was intended only to grant\nthe Commissioner of Children and Youth Services the\nauthority to authorize medical treatment in emergency\nsituations when that commissioner could not obtain\nthe consent of the parents. See 14 H.R. Proc., supra, p.\n2201. Accordingly, the statute cannot reasonably be\ninterpreted as giving the agency to which a child is\ntemporarily committed all of the broad rights of a guard-\nian with respect to the medical treatment of a child.5\n It follows, therefore, that \u00a7 17a-1 (12), which was\nenacted in 1998; see Public Acts 1998, No. 98-241; also\ncannot be interpreted as giving the commissioner all\nof the rights of a guardian. First, as I have just explained,\nthe enactment of Public Act 1971, No. 295, in 1971 was\npremised on the legislature\u2019s understanding that the\nstate agency having temporary custody of neglected or\nabused children was not the guardian of those children\nfor all purposes, notwithstanding the fact that General\nStatutes (Supp. 1969) \u00a7 17-62 (d) provided that the Wel-\nfare Commissioner was the guardian of a child also\ncommitted to the custody of the Commissioner of Chil-\ndren and Youth Services. I am aware of no intervening\nlaw that broadened the guardianship rights of those\ncommissioners. A statute, such as \u00a7 17a-1 (12), that\ndefines guardianship rights and obligations does not,\nipso facto, confer guardianship rights and obligations\non any particular person or entity.\n Second, by its plain terms, \u00a7 17a-1 (12) applies to \u2018\u2018a\nperson who has a judicially created relationship\nbetween a child or youth and such person that is\nintended to be permanent and self-sustaining . . . .\u2019\u2019\n(Emphasis added.) This is not the case when the com-\nmissioner has only temporary custody of a child and\nthe parents\u2019 rights have not yet been terminated. Third,\nthe legislative history of \u00a7 17a-1 (12) provides no sup-\nport for the proposition that it was intended to give\n\fthe commissioner exclusive guardianship rights over\nchildren in her temporary custody.6\n Thus, the legislative genealogy and history of the\nrelevant statutory scheme support the conclusion that,\nwhen the legislature enacted the predecessor to \u00a7 17a-\n10 (c) in 1971 it contemplated that the Commissioner\nof Children and Youth Services had, at most, a form of\njoint guardianship with the parents of a child who had\nbeen temporarily committed to him, and the rights of\nthe parents had not been terminated. The legislature\ndid not intend to confer the exclusive and unfettered\nauthority to authorize any and all forms of medical\ntreatment, provided only that such treatment was in\nthe child\u2019s best interest. Moreover, the enactment of\n\u00a7 17a-1 (12) in 1998 did not expand the commissioner\u2019s\nrights as a coguardian of children in her temporary\ncustody. Indeed, the department\u2019s own guidelines pro-\nvide that \u2018\u2018[t]he Area Office Social Work or Juvenile\nJustice staff shall refer a case to the Medical Review\nBoard when . . . the treatment may be contrary to the\nwishes of a parent or legal guardian . . . .\u2019\u2019 Department\nof Children and Families, \u2018\u2018Practice Guide: Standards\nand Practice Regarding the Health Care of Children in\n[the Department of Children and Families\u2019] Care\u2019\u2019\n(2014), p. 22. Those guidelines also provide that the\nstaff member who refers a case to the Medical Review\nBoard \u2018\u2018shall work with the [Regional Resource Group]\nNurse or Nurse Practitioner to make personal contact\nwith the parents . . . and the parents\u2019 . . . attorneys\n. . . to ensure that they each understand the medical\nplan, understand the risks and benefits, are in\nagreement with it, and consent.\u2019\u2019 Id., p. 23. Thus, the\ndepartment clearly is operating under the assumption\nthat parents continue to have an important role in mak-\ning medical decisions for their children even when they\nhave temporarily lost custody of them.7 This interpreta-\ntion is also consistent with the important constitutional\nrights at issue, namely, the parents\u2019 substantive due\nprocess right to raise their children as they see fit,\nincluding the right to control the children\u2019s religious\nupbringing. See Santosky v. Kramer, 455 U.S. 745, 753,\n102 S. Ct. 1388, 71 L. Ed. 2d 599 (1982) (\u2018\u2018The fundamen-\ntal liberty interest of natural parents in the care, cus-\ntody, and management of their child does not evaporate\nsimply because they have not been model parents or\nhave lost temporary custody of their child to the [s]tate.\nEven when blood relationships are strained, parents\nretain a vital interest in preventing the irretrievable\ndestruction of their family life.\u2019\u2019); see also State v.\nDeCiccio, 315 Conn. 79, 149, 105 A.3d 165 (2014) (\u2018\u2018[i]t\nis well established that this court has a duty to construe\nstatutes, whenever possible, to avoid constitutional\ninfirmities\u2019\u2019 [internal quotation marks omitted]).\n Accordingly, it is reasonable to conclude that \u00a7 17a-\n10 (c) was intended to apply only when the commis-\nsioner has a compelling reason to seek immediate medi-\n\fcal treatment for a child in her temporary custody and\nthere may be insufficient time to obtain the consent of\nthe parents, i.e., in medical emergencies. When immedi-\nate medical treatment is not required to ensure the good\nhealth of the child the statute does not apply, and, in\nthe absence of any other express statutory source to\nauthorize medical services or treatment for the child,\nthe commissioner must attempt to obtain the consent\nof the parents as the child\u2019s coguardians. If the parents\ncannot be found, I would conclude that the commis-\nsioner must make that representation to a court and\nseek to obtain an order allowing the commissioner to\nauthorize medical treatment. Similarly, the commis-\nsioner must obtain a court order if the parents object\nto the medical treatment.8\n With respect to the legal standard to be applied in\ncases in which the commissioner is seeking a court\norder authorizing the medical treatment of a child in\nits temporary custody over the objection of the parents,\nmy research has revealed no Connecticut case that\naddress this issue, or the issue of when a court may\norder medical treatment for a child in the parents\u2019 cus-\ntody over the objection of the parents. In the Matter\nof McCauley, 409 Mass. 134, 136\u201337, 139, 565 N.E.2d 411\n(1991), the Supreme Judicial Court of Massachusetts\naddressed the latter question and concluded that the\nrights of parents to make decisions for their children,\nthe child\u2019s interest in continuing good health and the\nstate\u2019s parens patriae interest must be balanced.9 I\nbelieve that this is an appropriate standard, and I would\napply it even when the parents have lost temporary\ncustody of their children to the commissioner.\n With respect to the narrow question of whether the\ncommissioner may authorize the vaccination of a child\nin her temporary custody over the religious objection\nof the child\u2019s parents, the Connecticut legislature has\nalready concluded as a matter of public policy that\nthe interest of parents in opting not to vaccinate their\nchildren on religious grounds outweighs the child\u2019s\ninterest in being immune from certain diseases and the\nstate\u2019s parens patriae interest in ensuring the well-being\nof the child and the public at large. See General Statutes\n\u00a7 10-204a.10 In my view, the courts are bound by this\npolicy determination. Accordingly, I would conclude in\nthe present case that the commissioner had no authority\neither under \u00a7 17a-10 (c) or as the coguardian of the\nchildren in her temporary custody to authorize their\nvaccination over the parents\u2019 religious objection.\n 1\n General Statutes \u00a7 17a-10 (c) provides: \u2018\u2018When deemed in the best inter-\nests of a child in the custody of the [Commissioner of Children and Families],\nthe commissioner, the commissioner\u2019s designee, a superintendent or assis-\ntant superintendent or, when the child is in transit between [Department\nof Children and Families] facilities, a designee of the commissioner, may\nauthorize, on the advice of a physician licensed to practice in the state,\nmedical treatment, including surgery, to insure the continued good health\nor life of the child. Any of said persons may, when he or she deems it in\nthe best interests of the child, authorize, on the advice of a dentist licensed\nto practice in the state, dentistry, including dental surgery, to insure the\n\fcontinued good health of the child. Upon such authorization, the commis-\nsioner shall exercise due diligence to inform the parents or guardian prior\nto taking such action, and in all cases shall send notice to the parents or\nguardian by letter to their last-known address informing them of the actions\ntaken, of their necessity and of the outcome, but in a case where the\ncommissioner fails to notify, such failure will not affect the validity of\nthe authorization.\u2019\u2019\n 2\n General Statutes \u00a7 46b-129 (j) (4) provides in relevant part: \u2018\u2018The commis-\nsioner shall be the guardian of [a] child [committed to the custody of the\ncommissioner] for the duration of the commitment . . . .\u2019\u2019\n 3\n General Statutes \u00a7 17a-1 (12) (B) defines \u2018\u2018 \u2018guardian\u2019 \u2019\u2019 in relevant part\nas \u2018\u2018a person who has a judicially created relationship between a child or\nyouth and such person that is intended to be permanent and self-sustaining\nas evidenced by the transfer to such person of the following parental rights\nwith respect to the child or youth . . . the authority to make major decisions\naffecting the child\u2019s or youth\u2019s welfare, including, but not limited to . . .\nmajor medical, psychiatric or surgical treatment . . . .\u2019\u2019\n The commissioner contends that, because she is the guardian of children\nin her temporary custody, she has the authority under General Statutes \u00a7 10-\n204a (a) to determine whether to invoke the exemption to the immunization\nrequirement when immunization would be contrary to the religious beliefs\nof such children. See General Statutes \u00a7 10-204a (a) (3) (exempting from\nimmunization requirement \u2018\u2018[a]ny such child who . . . presents a statement\nfrom the parents or guardian of such child that such immunization would\nbe contrary to the religious beliefs of such child . . . shall be exempt from\nthe appropriate provisions of this section\u2019\u2019). If \u00a7 17a-1 (12) confers this\nauthority, however, it necessarily confers the authority to make all decisions\nconcerning the welfare of such children, including the authority to authorize\nvaccinations in the first instance. Thus, the commissioner effectively con-\ntends that the authority conferred on it by \u00a7 17a-10 (c) is superfluous to its\nauthority as the guardian of children in its temporary custody.\n 4\n This opinion is not available in the Connecticut State Library. Accord-\ningly, it is unclear to which state entity\u2014the Welfare Commissioner or the\nDepartment of Children and Youth Services\u2014the opinion was directed. As\nI discuss later in this concurring opinion, however, the legislature responded\nto the Attorney General\u2019s opinion by authorizing the Commissioner of Chil-\ndren and Youth Services to authorize medical services for children in his\ncustody. Accordingly, it is reasonable to conclude that the opinion was\ndirected at that commissioner.\n 5\n Although General Statutes (Supp. 1969) \u00a7 17-62 (d) provided that the\nWelfare Commissioner was the guardian of children committed to his cus-\ntody, and No. 295 of the 1971 Public Acts was directed at the Commissioner\nof Children and Youth Services, it is clear that the Welfare Commissioner\ndid not have all of the rights and obligations of a guardian. If he had, then\nhe could simply have authorized the Commissioner of Children and Youth\nServices to provide medical treatment to children in his temporary custody.\n 6\n Section 17a-1 (12) was enacted in response to Congress\u2019 enactment of\nthe Adoption and Safe Families Act of 1997, Pub. L. No. 105-89, 111 Stat. 2115\n(1997) (ASFA). See Conn. Joint Standing Committee Hearings, Judiciary, Pt.\n7, 1998 Sess., p. 2175, written testimony of Kristine D. Ragaglia, Commis-\nsioner of the Department of Children and Families (explaining that \u00a7 17a-1\n[12] was intended to address AFSA requirement that states define guardian).\nSection 101 (b) of the AFSA, codified at 42 U.S.C. \u00a7 675 (7) (2012), defines\n\u2018\u2018legal guardianship\u2019\u2019 as \u2018\u2018a judicially created relationship between child and\ncaretaker which is intended to be permanent and self-sustaining as evidenced\nby the transfer to the caretaker of the following parental rights with respect\nto the child: protection, education, care and control of the person, custody\nof the person, and decisionmaking.\u2019\u2019 (Internal quotation marks omitted.)\nTitle 42 of the United States Code, \u00a7 675 (2), provides: \u2018\u2018The term \u2018parents\u2019\nmeans biological or adoptive parents or legal guardians, as determined by\napplicable State law.\u2019\u2019 (Emphasis added.) When the ASFA was enacted in\n1997, however, Connecticut\u2019s laws governing commitment of a child and\ntermination of parental rights did not define \u2018\u2018legal guardian.\u2019\u2019 Accordingly,\nto address this gap, the legislature enacted \u00a7 17a-1 (12), apparently taking\nthe language \u2018\u2018permanent and self-sustaining as evidenced by the transfer\n. . . of the following parental rights\u2019\u2019 from the federal statute, and the\nenumerated rights and obligations from General Statutes \u00a7 45a-604 (5); see\nPublic Acts 1973, No. 156; that defines \u2018\u2018guardianship\u2019\u2019 for probate purposes.\nThe legislative history of No. 98-241 of the 1998 Public Acts, which, in\naddition to enacting \u00a7 17a-1 (12), made numerous changes to the statutes\n\fgoverning commitment to the commissioner and termination of parental\nrights, indicates that the general purpose of the legislation was to shorten\nthe period in which children committed to the commissioner are in limbo.\nSee Conn. Joint Standing Committee Hearings, Judiciary, Pt. 6, 1998 Sess., p.\n1856, remarks of Attorney General Richard Blumenthal (\u2018\u2018this bill essentially\naims to move [decisions regarding the disposition of abused and neglected\nchildren] more quickly . . . [and] [t]he thrust of this measure is to provide\nfor adoptive homes as soon as possible so that they can be secure, permanent\n[and] stable, where reunification is not a realistic hope\u2019\u2019). I see no evidence\nthat the purpose of \u00a7 17a-1 (12) was to make the commissioner the exclusive\nguardian of children in her temporary custody.\n 7\n I emphasize that my sole focus in this concurring opinion is on the right\nof the commissioner to make medical decisions for children in her temporary\ncustody when the rights of the parents have not been terminated. I express\nno opinion on the rights or obligations of the commissioner to care for\nchildren in her temporary custody in other contexts.\n 8\n Of course, as a matter of common sense, the commissioner may also\nauthorize medical treatment for children in her temporary custody with\nrespect to the minor scrapes and bruises that are an everyday occurrence\nduring childhood without obtaining the consent of the parents or a court\norder. I need not, however, determine the outer limits of that authority here.\n 9\n The court stated in McCauley: \u2018\u2018We are faced with the difficult issue of\nwhen a [s]tate may order medical treatment for a dangerously ill child over\nthe religious objections of the parents. . . . [T]here are three interests\ninvolved: (1) the natural rights of parents; (2) the interests of the child; and\n(3) the interests of the [s]tate. . . .\n \u2018\u2018Courts have recognized that the relationship between parents and their\nchildren is constitutionally protected, and, therefore, that the private realm\nof family life must be protected from unwarranted [s]tate interference. . . .\nThe rights to conceive and to raise one\u2019s children are essential . . . basic\ncivil rights . . . . The interest of parents in their relationship with their\nchildren has been deemed fundamental, and is constitutionally protected.\n. . . Parents, however, do not have unlimited rights to make decisions for\ntheir children. Parental rights do not clothe parents with life and death\nauthority over their children. . . . The [s]tate, acting as parens patriae, may\nprotect the well-being of children. . . .\n \u2018\u2018The right to the free exercise of religion, including the interests of parents\nin the religious upbringing of their children is, of course, a fundamental right\nprotected by the [federal] Constitution. . . . However, these fundamental\nprinciples do not warrant the view that parents have an absolute right to\nrefuse medical treatment for their children on religious grounds. . . .\n \u2018\u2018The [s]tate\u2019s interest in protecting the well-being of children is not nulli-\nfied merely because the parent grounds his claim to control the child\u2019s\ncourse of conduct on religion or conscience. . . . The right to practice\nreligion freely does not include liberty to expose the community or the child\nto communicable disease or the latter to ill health or death. . . . [T]he\npower of the parent, even when linked to a free exercise claim, may be\nsubject to limitation . . . if it appears that parental decisions will jeopardize\nthe health or safety of the child, or have a potential for significant social\nburdens. . . . When a child\u2019s life is at issue, it is not the rights of the parents\nthat are chiefly to be considered. The first and paramount duty is to consult\nthe welfare of the child.\u2019\u2019 (Citations omitted; footnote added; internal quota-\ntion marks omitted.) In the Matter of McCauley, supra, 409 Mass. 136\u201337;\nsee also Diana H. v. Rubin, 217 Ariz. 131, 136, 171 P.3d 200 (App. 2007)\n(under federal constitutional due process principles, when parents object to\nvaccination of child in temporary custody of state, \u2018\u2018state must demonstrate a\ncompelling interest to justify overriding the combination of religious and\nparental rights involved\u2019\u2019); In re G.K, 993 A.2d 558, 566 (D.C. App. 2010)\n(under statute defining \u2018\u2018residual parental rights,\u2019\u2019 parents retained right to\nconsent to certain medical treatment for child in legal custody of state); In\nthe Mattter of Lyle A., 14 Misc. 3d 842, 850, 830 N.Y.S.2d 486 (2006) (implicit\nin routine procedures used by Department of Human Services was that \u2018\u2018[a]\nparent whose child is in foster care has the right to make the decision\nregarding whether or not his or her child will be given psychotropic drugs\u2019\u2019);\nIn the Matter of Martin F., 13 Misc. 3d 659, 676, 820 N.Y.S.2d 759 (2006)\n(if parent of child in temporary foster care opposes administration of mental\nhealth medicine it cannot lawfully be prescribed unless court determines\n\u2018\u2018whether the proposed treatment by medication is narrowly tailored to give\nsubstantive effect to the [child] patient\u2019s liberty interest\u2019\u2019); Guardianship\nof Stein, 105 Ohio St. 3d 30, 35\u201336, 821 N.E.2d 1008 (2004) (\u2018\u2018the decision\n\fto withdraw life-supporting treatments goes beyond the scope of making\nmedical decisions,\u2019\u2019 and, therefore, \u2018\u2018[t]he right to withdraw life-supporting\ntreatment for a child remains with the child\u2019s parents until the parents\u2019\nrights are permanently terminated\u2019\u2019); but see In re Deng, 314 Mich. App.\n615, 626\u201327, 887 N.W.2d 445 (because determination of unfitness \u2018\u2018so breaks\nthe mutual due process liberty interests as to justify interference with the\nparent-child relationship,\u2019\u2019 state could vaccinate children in temporary cus-\ntody over objection of parents pursuant to statute allowing parents to opt\nout based on religious objections [internal quotation marks omitted]), appeal\ndenied, 500 Mich. 860, 884 N.W.2d 580 (2016).\n 10\n See footnote 3 of this concurring opinion for the relevant text of\n\u00a7 10-204a.\n\f"} -{"text": " SUPREME COURT OF THE STATE OF NEW YORK\n Appellate Division, Fourth Judicial Department\n\n1329\nKA 12-00684\nPRESENT: SCUDDER, P.J., FAHEY, PERADOTTO, CARNI, AND VALENTINO, JJ.\n\n\nTHE PEOPLE OF THE STATE OF NEW YORK, RESPONDENT,\n\n V MEMORANDUM AND ORDER\n\nJOSEPH J. PUGLIESE, DEFENDANT-APPELLANT.\n\n\nJOHN HERBOWY, ROME, FOR DEFENDANT-APPELLANT.\n\nJEFFREY S. CARPENTER, DISTRICT ATTORNEY, HERKIMER (JACQUELYN M. ASNOE\nOF COUNSEL), FOR RESPONDENT.\n\n\n Appeal from a judgment of the Herkimer County Court (Patrick L.\nKirk, J.), rendered November 10, 2011. The judgment convicted\ndefendant, upon his plea of guilty, of assault in the third degree.\n\n It is hereby ORDERED that the judgment so appealed from is\nunanimously modified on the law by reducing the amount of restitution\nto $5,915.07 and as modified the judgment is affirmed.\n\n Memorandum: On appeal from a judgment convicting him upon his\nplea of guilty of assault in the third degree (Penal Law \u00a7 120.00) and\nordering him to pay restitution in the amount of $7,115.07, defendant\ncontends that County Court erred in failing to consider his ability to\npay restitution. Defendant failed to preserve that contention for our\nreview inasmuch as he \u201cdid not request a hearing on that issue or\notherwise object to the amount of restitution ordered on that basis\u201d\n(People v Naumowicz, 76 AD3d 747, 748; see People v Willis, 105 AD3d\n1397, 1397, lv denied ___ NY3d ___ [Oct. 7, 2013]; People v Dillon, 90\nAD3d 1468, 1468-1469, lv denied 19 NY3d 1025). In any event, the\nrecord establishes that the court considered defendant\u2019s ability to\npay restitution pursuant to Penal Law \u00a7 65.10 (2) (g) (see Dillon, 90\nAD3d at 1469; Matter of Jessie GG., 190 AD2d 916, 917). The court\ninquired at the restitution hearing about defendant\u2019s employment\nstatus and whether he had any dependents, and the presentence report\nreviewed by the court detailed defendant\u2019s educational background and\nemployment income (see Dillon, 90 AD3d at 1469).\n\n Defendant next contends that the People failed to meet their\nburden of establishing the amount of restitution by a preponderance of\nthe evidence (see People v Tzitzikalakis, 8 NY3d 217, 221).\nSpecifically, defendant contends that the court erred in directing him\nto make restitution for the business income and the value of the sick\nleave that the victim allegedly lost as a result of the assault.\nContrary to the contention of defendant, we conclude that the People\n\f -2- 1329\n KA 12-00684\n\nestablished the value of the sick leave through the victim\u2019s testimony\nat the restitution hearing and supporting documentation from the\nvictim\u2019s employer and physician (see People v Wilson, 108 AD3d 1011,\n1013; People v LaVilla, 87 AD3d 1369, 1370). We agree with defendant,\nhowever, that the People failed to establish the amount of income, if\nany, the victim lost from his auction business as a result of the\nassault (see People v Wilson, 59 AD3d 807, 808-809). The\ndocumentation in the record does not substantiate the victim\u2019s claimed\nloss of income and, indeed, the victim acknowledged that any lost\nincome from his business during the period of time at issue was purely\nspeculative (see id.). We therefore modify the judgment by reducing\nthe amount of restitution to $5,915.07.\n\n\n\n\nEntered: January 3, 2014 Frances E. Cafarell\n Clerk of the Court\n\f"} -{"text": "\n96 Wn.2d 601 (1981)\n638 P.2d 77\nWASHINGTON EDUCATION ASSOCIATION, ET AL, Appellants,\nv.\nORIN SMITH, ET AL, Respondents.\nNo. 47164-9.\nThe Supreme Court of Washington, En Banc.\nDecember 24, 1981.\nWatson, Grosse & Feinstein, by C. Kenneth Grosse and Ronald E. Farley, for appellants Washington Education Association, et al.\nAudrey B. Eide, for appellant Washington Public Employees Association.\nKenneth O. Eikenberry, Attorney General, and Robert F. Hauth and Richard M. Montecucco, Senior Assistants, for respondents.\nDIMMICK, J.\nThis action for a declaratory judgment is to *603 determine whether the state budget director is authorized to permit voluntary payroll deductions for employees for the purpose of making direct contributions to the political action committee of the employees' labor associations. The trial court granted the State's cross motion for summary judgment holding there was no statutory authority for such a deduction nor any constitutional right for the political action committees to receive state funds from wages of the employees, nor any right for the employees to have their wages paid to someone other than themselves. We affirm.\nAppellant Washington Education Association (WEA) is an employee association representing teachers and other state workers. Appellant Washington Education Association/Association for Higher Education (WEA/AHE) is an affiliate of the WEA and represents the various local associations for higher education in the state. Appellant Washington Public Employees Association (WPEA) represents public employees including 4,000 state government workers and nonacademic staff at community colleges. Each has established a political action committee to endorse and support candidates for public office. The WEA's political action committee, \"Political Unity of Leaders in State Education\" (PULSE), is comprised of teachers and educators. \"Political Action by Concerned Employees\" (PACE), the WPEA's political action committee, consists of state and other public employees and their families, as well as interested parties. The funds collected by the two political action groups are used to support candidates for public office, in state as well as in federal elections. In addition, PULSE funds are given to the National Education Association's political committee.\nThese political action committees had received a large proportion of their funds by way of voluntary payroll deductions by their members. Some associations of college educators had this procedure written into their collective bargaining agreements.[1] The PULSE membership fee is *604 $10 per year. PACE requires a minimum contribution of $10 per year. A 7-step process is involved in payroll deductions. As of January 1980, there were 76,874 state employees in 128 different agencies. Each payroll deduction represents additional cost to the State. The main personnel/payroll system has a maximum capability of handling 10 deductions per individual. It is therefore possible that the addition of 1 more deduction for political contributions would cause some employees to exceed this maximum.\nIn 1978, Orin Smith, Director of the Office of Fiscal Management, requested an Attorney General opinion regarding the statutory authority, or constitutional requirement for these deductions. The Attorney General opinion concluded that the respondent director[2] had no statutory authority to permit a state employee to establish a payroll deduction for the specified purpose of making a voluntary contribution to a labor union or other employee organization for political purposes. Attorney General Opinion, Oct. 26, 1978. As a result, the director terminated these payroll deductions. In response, the appellants filed this suit for declaratory and injunctive relief on stipulated facts and affidavits.\n\nI\nAppellants' major contention is that voluntary payroll deductions for political contributions by state employees are \"clearly related to state employment\" and therefore may be authorized by the budget director exercising his discretion pursuant to RCW 41.04.\nRCW 41.04.230 authorizes state disbursing officials to deduct money from the salaries and wages of public officers or employees. Specifically, this statute permits deductions for (1) credit unions, (2) parking fees, (3) United States *605 savings bonds, (4) board, lodging or uniforms, (5) membership dues to any professional organization formed primarily for public employees or college and university professors, (6) other labor or employee organization dues, (7) accident and casualty premiums, and (8) certain other insurance contributions. See also RCW 41.04.036 (permitting deductions for United Fund); RCW 41.04.233 (permitting deductions for health maintenance organizations).\nIn addition, RCW 41.04.230 contains a general provision permitting deductions for activities \"clearly related to state employment\" which reads in pertinent part:\nDeductions from salaries and wages of public officers and employees other than those enumerated in this section or by other law, may be authorized by the director of financial management for purposes clearly related to state employment or goals and objectives of the agency ...\n(Italics ours.)\nThe thrust of appellants' argument is that these deductions are for \"purposes clearly related to state employment\", and, therefore, come within the general provision as political activity is an essential element of state employment. Appellants note that since state employees' working conditions are in part established by the legislature, the employees are at the mercy of the political process. Thus, voluntary political contributions are necessary to insure that employees have some voice in the establishment of working conditions. We do not find this argument persuasive.[3]\nFirst, it is unclear whether these contributions directly impact the employees' bargaining position. There is no guaranty that either PULSE or PACE will spend these funds exclusively on state elections. In fact, some of the *606 funds are contributed to candidates for federal offices who have little, if anything, to do with establishing wages, hours and conditions of employment for Washington state employees. Further, the interests of the members are diverse in that the associations are comprised of public employees and their families as well as state employees and \"others\".\nSecond, we can find nothing in the legislative history of the act indicating that the legislature intended to permit deductions for political purposes. In other legislation, the legislature has expressed its disapproval of using state property in connection with the solicitation or making of political contributions. See RCW 41.06.250(1) (prohibiting the solicitation on public property of political or partisan contributions); RCW 42.17.130 (prohibiting the use of any facilities of a public office or agency, directly or indirectly, for campaign purposes).\n[1] Finally, the opinion of the Attorney General concludes that these political contributions are not authorized. Attorney General Opinion, Oct. 26, 1978. Although not binding, opinions of the Attorney General in construing statutes are entitled to considerable weight. In re Chi-Dooh Li, 79 Wn.2d 561, 488 P.2d 259 (1971); Kasper v. Edmonds, 69 Wn.2d 799, 420 P.2d 346 (1966). This is especially true in the instant case given the legislature's acquiescence to the Attorney General's interpretation of RCW 41.04.230 as evidenced by its failure, in subsequent legislative sessions, to modify the statute.[4]See White v. State, 49 Wn.2d 716, 306 P.2d 230, appeal dismissed, 355 U.S. 10, 2 L.Ed.2d 21, 78 S.Ct. 23 (1957); State ex rel. Pirak v. Schoettler, 45 Wn.2d 367, 274 P.2d 852 (1954).\n[2, 3] There being no specific provision for such deductions within the statutes of the state, the problems of fiscal impact and the strict adherence of the legislature to refrain *607 from participation by the State in partisan politics, lead us to the conclusion that the legislature did not intend to include political contributions within the limited general classification of activity \"clearly related\" to state employment. If there is a fair or reasonable doubt as to whether or not a particular power has been granted, it must be denied. Pacific First Fed. Sav. & Loan Ass'n v. Pierce County, 27 Wn.2d 347, 178 P.2d 351 (1947); Griggs v. Port of Tacoma, 150 Wash. 402, 273 P. 521 (1928). Therefore, we hold the director does not have discretionary power in this case.\n\nII\nAppellants next assert that if RCW 41.04 does not permit voluntary payroll deductions for political contributions, it is violative of the First Amendment rights of political association and speech. They argue that not allowing the payroll deduction \"becomes a limitation on political contributions and expenditures and therefore a regulation of speech\" in direct conflict with Buckley v. Valeo, 424 U.S. 1, 46 L.Ed.2d 659, 96 S.Ct. 612 (1976). Such a prohibition also \"takes away from public employees their First Amendment right to political speech and association as a condition of their employment,\" in violation of Abood v. Detroit Bd. of Educ., 431 U.S. 209, 52 L.Ed.2d 261, 97 S.Ct. 1782 (1977). These arguments, however, ignore the fact that state workers are not prohibited entirely from contributing to the political action committees. Rather, only one method of facilitating contributions is prohibited. Thus, the federal constitution does not require the State to make this type of deduction.\n[4] Certainly, contributing to an organization for the purpose of spreading a political message is protected by the First Amendment. See Abood (holding that a mandatory state-employee union could not use union dues for political or ideological causes without the consent of the members individually); Buckley v. Valeo, supra (a very divided Supreme Court holding that while federal limitations on political contributions and disclosure requirements were constitutional, expenditure limitations were not). See also *608 Charlotte v. Local 660, Int'l Ass'n of Firefighters, 426 U.S. 283, 48 L.Ed.2d 636, 96 S.Ct. 2036 (1976) (holding that the City did not violate equal protection guaranties by refusing to withhold union dues when a rational basis (administrative convenience) could be perceived). Yet, the protection afforded by the First Amendment is not necessarily extended to tangential infringements such as are involved in the instant case. Just as \"[t]he right to speak and publish does not carry with it the unrestrained right to gather information\", Zemel v. Rusk, 381 U.S. 1, 17, 14 L.Ed.2d 179, 85 S.Ct. 1271 (1965), the right to make political contributions does not necessarily include the right to compel the State to deduct the contributions from one's paycheck.\nA decision by the Federal District Court for the Eastern District of Virginia is on point. In Local 995, Int'l Ass'n of Firefighters v. Richmond, 415 F. Supp. 325 (E.D. Va. 1976), the district court held that the City's refusal to withhold union dues from the wages of firefighters, and to transfer those funds to the union treasury, was not constitutionally mandated:\nFailure of the City to provide \"check-offs\" does not in this Court's view significantly impair the union's ability to organize and provide services for its members.\nFurthermore, while the First Amendment protects the right of American citizens to freely associate, it was never intended to provide an affirmative weapon in forcing the state to aid union organizational activities. While a state may be prohibited from penalizing or restricting union activities, the First Amendment imposes no duty on the state to provide services or engage in policies that will affirmatively assist a union to carry out its function and purpose. It follows, therefore, that even if it can be said that the City's refusal to provide check-offs effects [sic] the union's ability to organize, no constitutional rights of the plaintiffs are being infringed.\n(Citations omitted.) Local 995, at 326. Similarly, in the instant case, even if the State's refusal to deduct for political contributions impairs the union's ability to take political *609 action, none of appellants' constitutional rights are involved. There are many other methods of soliciting contributions, foremost of which is mail solicitation.\n\nIII\nAppellants also allege that prohibiting payroll deductions for political action committees for community college teachers and other state employees while permitting these deductions for employees of common schools is violative of the equal protection clause of the Fourteenth Amendment. RCW 28A.67.095 allows disbursing officials authorized to pay the salaries and wages of certificated employees of school districts to make any deductions authorized by those employees if 10 percent so request, subject to the limitations of district equipment and personnel. Thus, some teachers in grades K through 12 have their contributions to political action committees deducted automatically from their paychecks. Appellants assert that this disparate treatment of teachers, based solely on the educational level they teach, is so arbitrary and unreasonable that it violates the equal protection guaranty.\n[5, 6] The burden of proving that the classification is arbitrary and unreasonable rests upon the party assailing the classification. State School Directors Ass'n v. Department of Labor & Indus., 82 Wn.2d 367, 376-77, 510 P.2d 818 (1973); State v. Persinger, 62 Wn.2d 362, 368-69, 382 P.2d 497 (1963). Appellants, however, are unable to meet this burden. Community college teachers and common schoolteachers are two very distinct classes of employees; the former are paid and administered by the State, whereas the latter are paid and administered by the school districts. These two groups are often treated differently. RCW Title 28A deals in its entirety with special provisions for common schools; RCW Title 41 deals with state employment. As an example, teachers in common schools are not given the \"floating holiday\" that other state employees are granted. Prante v. Kent School Dist., 27 Wn. App. 375, 618 P.2d 521 (1980). Moreover, the State's fiscal and payroll management *610 is vastly more complex than that of any of the separate and semiautonomous school districts due to the far greater number of employees working in separate agencies all under the payroll supervision of one office. In fact, their only common characteristic is that they are both \"public teachers\".\n\nIV\n[7] Appellants next contend that respondents are estopped from contesting the collective bargaining agreements between the respondent community college districts and appellant education associations which provide for payroll deductions for political action committee contributions. We have held that the State can be estopped where the other party has acted to his or her detriment in reliance upon the State's commitment. State ex rel. Shannon v. Sponburgh, 66 Wn.2d 135, 401 P.2d 635 (1965). The doctrine of estoppel, however, is only applied to prevent manifest injustice. Finch v. Matthews, 74 Wn.2d 161, 443 P.2d 833 (1968). Most importantly, estoppel will not be applied against a governmental body whose acts are ultra vires and void. Finch v. Matthews, supra; Arbogast v. Westport, 18 Wn. App. 4, 567 P.2d 244 (1977); Fitzgerald v. Neves, Inc., 15 Wn. App. 421, 550 P.2d 52 (1976).\nAppellants' estoppel argument, therefore, is dependent upon the authority of the respondent districts to agree to the payroll deductions involved herein, which in turn is dependent upon our interpretation of RCW 41.04.230. Since we hold today that the statute does not permit the deductions, and that the United States Constitution does not require them, we find that the contract was ultra vires. Therefore, the respondent is not bound. See Finch.\n\nV\n[8] Lastly, appellants contend that if RCW 41.04.230 does not permit political action payroll deductions, it is in conflict with and therefore preempted by 2 U.S.C. \u00a7\u00a7 431-56 (1976) (Federal Election Campaigns Act (FECA)). This argument fails for two reasons. First, that act affects federal *611 elections only. 2 U.S.C. \u00a7\u00a7 431, 453. State law still governs state elections. Cf. Cort v. Ash, 422 U.S. 66, 45 L.Ed.2d 26, 95 S.Ct. 2080 (1975) (holding that if state law permits contributions in state elections which would violate the federal act if made in a federal election, federal law provides no remedy). In the instant case, appellants make no claim of being substantially involved in federal elections.\nSecond, there is nothing in the FECA that requires any employer to establish a payroll deduction plan for its own employees. Appellants' reference to 2 U.S.C. \u00a7 441b(b)(5) is inapposite, for this provision merely states that a corporation must establish a payroll deduction plan for voluntary contributions by union employees if it has such a plan for stockholders and executive or administrative personnel. Otherwise, such a payroll deduction plan is not required. See the FECA regulations at 11 C.F.R. \u00a7 114.5(k)(4) (1981).\nThe legislature is the proper body to determine the practicalities of expanding the list of payroll deductions. Since, at the present time, contributions for political activities are neither permitted by statute, nor required by the constitution, we affirm the trial court.\nBRACHTENBACH, C.J., and STAFFORD, UTTER, DOLLIVER, and HICKS, JJ., concur. DORE, J. (dissenting)\nI dissent because I find payroll deductions for political activities by state employees are clearly related to their employment and, therefore, I would authorize employee payroll deductions for union contributions. The majority holds that the activities for which employee deductions are contributed do not impact the employees' bargaining position. I disagree.\nRCW 41.04.230 provides:\nDeductions from salaries and wages of public officers and employees other than those enumerated in this section or by other law, may be authorized by the director of financial management for purposes clearly related to state employment or goals and objectives of the agency. ...\n*612 (Italics mine.)\nThe primary role of the court in construing this statute is to determine the intent of the legislature, and to give effect to that intent. Burlington N., Inc. v. Johnston, 89 Wn.2d 321, 572 P.2d 1085 (1977). To this end, the statute must be read as a whole; intent is not to be determined by a single sentence (or, in this case, the single phrase \"clearly related to state employment\"). State v. Fenter, 89 Wn.2d 57, 569 P.2d 67 (1977). RCW 41.04.230 provides specifically for payroll deductions for credit unions, parking fees, United States savings bonds, board, lodging and uniform fees, professional and union dues, accident and casualty premiums, insurance contributions and health maintenance payments. The legislature also provided for any payroll deductions for purposes \"clearly related to state employment or goals and objectives of the agency\".\nThe majority used a vacuum of legislative history as affirmative evidence that the legislature intended to prohibit deductions for political purposes. In my opinion, this analysis is totally unjustified. Footnote 3 of the majority opinion, on page 605, specifically notes that union dues may be used to finance legislative lobbying, collective bargaining and other political activity, as long as each employee is afforded the opportunity to refuse to contribute to a specific activity.[5]Abood v. Detroit Bd. of Educ., 431 U.S. 209, 52 L.Ed.2d 261, 97 S.Ct. 1782 (1977); Association of Capitol Powerhouse Eng'rs v. State, 89 Wn.2d 177, 188-89, 570 P.2d 1042 (1977). The majority's contention that political deductions should not be allowed because there is no specific provision for their deductions is unfounded. The legislature provided for payroll deductions to be added later with its \"catchall\" provision, RCW 41.04.230. The history of the legislation does not indicate that deductions for political purposes are excluded. I would argue that on this *613 record political contributions are more related to state government than the specifically enumerated allowances for United States savings bonds, charitable organizations, and accident and casualty premiums.\nThe majority at page 608 sees the invasion of the union members' First Amendment rights of association and free speech as mere \"tangential infringements\". Yet, without the allowance of payroll deductions for these political activity funds, teacher unions and their associated political action groups will be restricted in securing minimum benefits for their members. The majority cites Local 995, Int'l Ass'n of Firefighters v. Richmond, 415 F. Supp. 325 (E.D. Va. 1976) as legal authority for its position. In Richmond, however, the court found that the absence of \"check-offs\" did not significantly impair the union's ability to organize and provide services for its members because there were viable alternative methods available. This is simply not true in the present case. Affidavits show that physical solicitations at employee work sites or on state property are prohibited. Admittedly it is extremely difficult, if not impossible, to coordinate solicitation and receipt of cash contributions in a manner wherein members do not have easy access to union representatives. Affidavits further show that direct mail solicitation has proved ineffective and costly. Pleas in monthly newsletters are a waste of money. Alternative methods to the payroll deduction system are ineffective.[6] The importance of the payroll deduction method to the participation of teachers in these political action groups is illustrated by the immediate reduction of membership upon the discontinuation of payroll deductions.[7] The majority fails to recognize the realistic *614 result of not allowing these payroll deductions: without this method of contribution, the survival of these political action organizations is threatened and state employees' rights to freely associate and speak regarding their employment concerns and needs will be lessened.\nThe majority claims that teacher payroll deductions are not clearly related to state employment because there is no guaranty that the funds will be spent exclusively on state elections. The language of RCW 41.04.230, however, requires only clear, not exclusive, relation to state employment. It is true that some of the funds are contributed to candidates for federal offices who have little to do with establishing teacher employment terms. The majority of the money withheld, however, is used to finance legislative lobbying, collective bargaining and political activities designed to further political impact of the involved unions.\nThe majority mistakenly relies upon the opinion of the Attorney General, which concludes that teacher political deductions are unauthorized. Attorney General Opinion, Oct. 26, 1978. Attorney General opinions should be considered when interpreting an ambiguous statute. Bradley v. Department of Labor & Indus., 52 Wn.2d 780, 329 P.2d 196 (1958). But such an opinion is not controlling, and this court has frequently declined to follow opinions of the Attorney General. Kasper v. Edmonds, 69 Wn.2d 799, 420 P.2d 346 (1966) and cases cited therein; Davis v. County of King, 77 Wn.2d 930, 468 P.2d 679 (1970). The subject Attorney General opinion is conclusory on the issue of whether political deductions are related to state employment, stating at page 8:\n[T]o the extent that state property may be used at all in connection with the solicitation or making of political contributions, it is hedged with very careful restraints. See, for instance, RCW 42.17.130 [forbids use of public offices and agency facilities in political campaigns]; also, RCW 41.06.250(1) [forbids compulsory assessments or involuntary political contributions and prohibits solicitation on state property for partisan, political purposes]. *615 Accordingly, while payroll deductions for political contributions might not clearly conflict with either of those expressed purposes, we can find no basis for holding that this type of deduction would satisfy the express statutory requirement that it must be \"clearly related.\"\nThe statutes cited are not applicable. The opinion admits that teacher payroll deductions do not conflict with the general provision statute. In the absence of any affirmative rationale for denying payroll deductions for political union activities, the Attorney General opinion is of little value.\nIn recent days, this court has denied a state school request for a temporary injunction to prevent a wholesale 10.1 percent reduction of common school appropriations.[8] Teachers claim that the 1981-83 appropriations for schools constitute minimum support for \"basic education\" of our children throughout the state. They argue that if a cut of such magnitude is effectuated, hundreds of teachers will become unemployed. A special session of the legislature has been called to address our economic situation including the threatened cut in school funding. It is clear that if the subject payroll deductions had been in effect for the past 2 years, these funds would now be available to use as a public relations mechanism to disseminate information as to what impact these suggested school cuts will have on basic education and the number of teachers that will be terminated in the event large cuts are mandated. Such monies also could be made available to hire lobbyists, for travel and expense money for teachers to go to the special session and converse with legislators, and for political contributions to individual legislators.\nThis unexpected and dramatic calling of the special session highlights the importance of these political contributions and how closely they are related to state government and the continued employment and welfare of teachers. *616 The majority states at page 607 that \"the legislature did not intend to include political contributions within the limited general classification of activity `clearly related' to state employment\". The pending school crisis strongly emphasizes the degree to which these payroll deductions are related to their status as state employees.\n\nCONCLUSION\nThe majority's denial of payroll deductions will seriously restrict the ability of our teachers to actively participate in the political process which determines their working conditions. In addition, its decision continues to mandate a drastic dwindling of teacher political action groups, as is illustrated by the sharp decline in membership already experienced.\nI would hold that the language of RCW 41.04.230 permits payroll deductions for political purposes, including candidate contributions, by state teachers. I would reverse.\nROSELLINI and WILLIAMS, JJ., concur with DORE, J.\nNOTES\n[1] These associations included the Wenatchee Valley College Association for Higher Education and the Skagit Valley College Association for Higher Education, who are also appellants in the instant case.\n[2] Other respondents include the Office of Fiscal Management, Wenatchee Valley Community College, and Skagit Valley Community College.\n[3] In fact, union dues may be used to finance legislative lobbying, collective bargaining, and other political activity, as long as each employee is afforded the opportunity to refuse to contribute to a specific activity. Abood v. Detroit Bd. of Educ., 431 U.S. 209, 52 L.Ed.2d 261, 97 S.Ct. 1782 (1977); Association of Capitol Powerhouse Eng'rs v. State, 89 Wn.2d 177, 188-89, 570 P.2d 1042 (1977).\n[4] At oral argument, counsel for Washington Education Association (WEA) stated that WEA had tried, unsuccessfully, to have RCW 41.04.230 amended to specifically permit deductions for political action committees.\n[5] Neither party denies that these payroll deductions to political action groups are entirely voluntary, and the individual employee is free to refuse authorization of this deduction.\n[6] See Affidavit of Michael Sayan, Clerk's Papers, at 40-42; Affidavit of Carol Coe, Clerk's Papers, at 43-45.\n[7] During the 1977-78 year, in which payroll deductions were allowed, PULSE boasted a total of 905 members. When the payroll deductions were discontinued late in 1978, PULSE membership dropped to 801 for the 1978-79 year. And during the 1979-80 year, PULSE membership dropped to an all-time low of 124 members.\n[8] The constitutionality of pending 1981-82 school appropriation cuts is currently before this court in the case of Seattle School District No. 1 of King County v. State, cause No. 47947-0.\n"} -{"text": "\n280 S.W.3d 796 (2009)\nSTATE of Missouri, Plaintiff/Respondent,\nv.\nMichael J. MUGLER, Defendant/Appellant.\nNo. ED 91482.\nMissouri Court of Appeals, Eastern District, Division Three.\nApril 21, 2009.\nIrene Karns, Columbia, MO, for appellant.\nChris Koster, Dora A. Fichter, Jefferson City, MO, for respondent.\nBefore ROBERT G. DOWD, JR., P.J., CLIFFORD H. AHRENS, J., and SHERRI B. SULLIVAN, J.\n\nORDER\nPER CURIAM.\nMichael Mugler (Defendant) appeals the circuit court's judgment upon his conviction after a bench trial on one count of forgery in violation of 566.034 RSMo 2000. Defendant asserts that the court abused its discretion by denying his request for a Frye hearing and permitting law enforcement officers to conduct and opine on a handwriting comparison.\nWe have reviewed the briefs and the record on appeal, and we conclude that the trial court did not err. No precedential or jurisprudential purpose would be served by an opinion. A memorandum has been provided to the parties for their use only, setting forth the reasons for this order. We affirm pursuant to Rule 30.25(b).\n"} -{"text": " FILED\n NOT FOR PUBLICATION OCT 15 2013\n\n MOLLY C. DWYER, CLERK\n UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS\n\n\n\n FOR THE NINTH CIRCUIT\n\n\nJACO VAN MAANEN, No. 12-15515\n\n Plaintiff - Appellant, D.C. No. 1:10-cv-00493-AWI-JLT\n\n v.\n MEMORANDUM*\nUNIVERSITY OF THE NATIONS, INC.,\nDBA YWAM-University of the Nations\nand DOES, 1-10,\n\n Defendants - Appellees,\n\n And\n\nYOUTH WITH A MISSION\nINTERNATIONAL, INC., DBA YWAM-\nOffice of The Founders and YOUTH\nWITH A MISSION-BISHOP,\n\n Defendants.\n\n\n Appeal from the United States District Court\n for the Eastern District of California\n Anthony W. Ishii, Senior District Judge, Presiding\n\n Argued and Submitted October 9, 2013\n San Francisco, California\n\n\n *\n This disposition is not appropriate for publication and is not precedent\nexcept as provided by 9th Cir. R. 36-3.\n\fBefore: D.W. NELSON, M. SMITH, and IKUTA, Circuit Judges.\n\n Jaco van Maanen appeals the district court\u2019s decision granting summary\n\njudgment in favor of the University of the Nations (University) on van Maanen\u2019s\n\nclaim of ostensible agency under California law. We have jurisdiction pursuant to\n\n28 U.S.C. \u00a7 1291.\n\n The evidence in the record does not establish any genuine dispute of\n\nmaterial fact suggesting that van Maanen relied on a belief that Youth With a\n\nMission-Bishop (YWAM-Bishop) was the agent of the University when he decided\n\nto enroll in the SOAR course. See Cal. Civ. Code \u00a7 2300; Associated Creditors\u2019\n\nAgency v. Davis, 13 Cal. 3d 374, 399 (1975). Van Maanen testified that he relied\n\non the inclusion of the YWAM-Bishop SOAR course as part of the University\n\ncourse catalog because it informed him that the course was part of the YWAM\n\nmovement and complied with YWAM\u2019s values. But Van Maanen did not identify\n\nany other reason why the inclusion of the SOAR course in the University was\n\nimportant to him. Cf. J.L. v. Children\u2019s Institute, Inc., 177 Cal. App. 4th 388,\n\n403\u201304 (2009). Accordingly, there is no evidence that in making his decision to\n\nenroll in the SOAR course van Maanen relied on the ability of the University to\n\nexercise control over YWAM-Bishop. Cf. Kaplan v. Coldwell Banker Residential\n\n\n\n\n 2\n\fAffiliates, Inc., 59 Cal. App. 4th 741, 744\u201348 (1997); Beck v. Arthur Murray, Inc.,\n\n245 Cal. App. 2d 976, 977\u201378 (1966).\n\nAFFIRMED.\n\n\n\n\n 3\n\f"} -{"text": "\n229 N.W.2d 274 (1975)\nIn re the MARRIAGE OF F. Robert WOODWARD, Jr., and Judith A. Woodward.\nUpon the Petition of F. Robert WOODWARD, Jr., Appellant, and concerning Judith A. WOODWARD (now Judith A. Woodward Graves), Appellee.\nNo. 56642.\nSupreme Court of Iowa.\nMay 21, 1975.\nRehearing Denied June 16, 1975.\n*275 Fuerste, Carew & Coyle, Dubuque, for appellant.\nAlfred E. Hughes, Dubuque, for appellee.\nHeard before MOORE, C. J., and MASON, LeGRAND, REES, and McCORMICK, JJ.\nMASON, Justice.\nThis appeal arises from a controversy over whether periodic payments to the wife as provided for in a dissolution decree should terminate upon her remarriage. Implicit in this problem is whether the term \"alimony\" as used by the district court actually referred to a property settlement. Petitioner, F. Robert Woodward, Jr., is appellant and respondent, Judith A. Woodward, now Judith A. Woodward Graves, is appellee.\nJune 10, 1959, Robert and Judith were married in Dubuque, Iowa. Three children were born of the marriage, namely Frederick Robert, III, January 11, 1960; Mona Jeanne, June 20, 1961; and John Duncan, October 21, 1963. The trial court found Robert and Judith were both good parents.\nThe marriage was a prosperous one, and the parties acquired substantial property, including a home valued at $35,000, a summer cottage, two automobiles, a houseboat and small runabout, stocks in various companies and several life insurance policies. Robert, employed at a newspaper company, was earning approximately $42,000 gross income per year. Judith was not employed and had no particular skills.\nUnfortunately, the marriage relationship crumbled and was dissolved June 1, 1971. In its original decree, the trial court awarded Judith the family home, furniture and adjacent grounds, free of debts and encumbrances, one of the automobiles, 225 shares of stock of the Dubuque Bank and Trust Company, and custody of the children.\nRobert was ordered to assume the $11,000 debt on the family home and was awarded the remainder of the assets. The court further provided for the support of Judith and the children as follows:\n\"For the support of said children, Petitioner shall pay into the Clerk of the above-entitled Court for the use of Respondent the sum of $1,300.00 per month on the 10th day of each month commencing with the 10th day of June, 1971 and continuing monthly thereafter until the youngest child then living shall have attained the age of 18 years. Further, as each child completes secondary school education, jurisdiction is retained for the purpose of determining whether Petitioner shall, at such time, provide such child with post high school training.\n\"The foregoing payments of support money shall be deemed to include alimony, and upon the youngest then living child having attained his 18th birthday, such monthly installments shall be reduced to the sum of $300.00 and continue thereafter until Respondent remarries or dies whichever occurs first. If Respondent has remarried prior to said child having attained the age of 18 years, then all payments shall cease on said child's 18th birthday.\"\nAfter the decree was initially entered, neither party appealed.\nJune 23, 1971, petitioner and respondent filed their \"Motion for Enlargement or Amendment of Findings of the Court and Modification of Judgment.\" Basically, the parties desired a more definite recital of Robert's visitation rights and, more important, a finding as to what portion of the $1,300 per month was alimony. The latter request was related to the determination of alimony for income tax purposes.\nJune 25 the court amended its judgment and decree in relevant part as follows:\n*276 \"As alimony and for the support of the children, Petitioner shall pay into the Clerk of the above-entitled Court for the use of Respondent, the sum of $1,300.00 per month on the 10th day of each month commencing with the 10th day of June, 1971 and continuing monthly thereafter until the youngest child then living shall have attained the age of 18 years. Further, as each child completes secondary school education, jurisdiction is retained for the purpose of determining whether Petitioner shall, at such time, provide such child with post-high school training. Of said $1,300.00 payment, $300.00 shall constitute alimony and $1,000.00 shall constitute support money.\n\"Upon the youngest child then living having attained his 18th birthday, such monthly installments shall be reduced to the sum of $300.00 and continue thereafter until Respondent remarries or dies whichever occurs first. If Respondent has remarried prior to said child having attained the age of 18 years, then all payments shall cease on said child having attained its 18th birthday.\"\nRobert apparently paid the $1,300 monthly. However, Judith remarried June 2, 1973, and June 13 Robert applied to the same court for an order terminating the $300.00 monthly alimony payments.\nBoth parties appeared with counsel and the court issued its order July 7, which appears in pertinent part as follows:\n\"Examination of the Decree originally written discloses that the Court found that the Respondent's expenses in maintaining a family for herself and her three children were approximately $15,500.00 and consequently set the monthly payments at $1,300.00 or $15,600.00 per year. Further, the Court made findings of the accumulated properties of the parties together with those properties owned separately by Petitioner and found that the nature of the same was such that division in kind would not be practical. On the other hand, Petitioner's income, after taxes, was such that it did not seem practical that he could bear any alimony payments made in the way of property settlement in addition to the monthly payments of $1,300.00. For that reason the Court assigned an arbitrary figure of $300.00 to that portion of the monthly payments attributable to alimony. It was for the reason that Respondent seemed entitled, in equity, to more than the home, automobile, and bank stock that she received as her share of the accumulated property of the parties, that the Court assured her of $300.00 a month until the youngest child attained the age of 18 years under any circumstances.\n\"IT IS THEREFORE ORDERED that it is the Court's present interpretation of what was in the mind of the Court at the time of the entry of the Judgment and Decree that remarriage prior to the youngest child attaining the age of 18 years does not terminate the $300 alimony since the same, until that time, is in the nature of property distribution.\"\nRobert appeals from this order and asserts the $300 should have terminated upon Judith's remarriage.\nI. Since this is an equity case, the supreme court reviews the facts de novo. \"Review of a decree granting dissolution of marriage, determining property rights and ordering alimony payments is de novo. It is our duty to examine the whole record and adjudicate rights anew on those propositions properly presented, provided issue has been raised and error, if any, is preserved in the course of the trial proceedings; while we give weight to the findings of the trial court, we will not abdicate our function as trier de novo on appeal. * * * [citing authority].\" In Re Marriage of Novak, 220 N.W.2d 592, 597 (Iowa 1974).\nThe parties in this appeal do not question the propriety of the amount of alimony and child support or the property division, but simply Judith's continued right to receive the monthly $300 \"alimony\" after her remarriage to Dr. Graves.\nRobert as appellant contends the provision in both the original decree and the *277 decree as modified on the joint application of the parties is an award for alimony and not a portion of a property settlement made in connection with a just and equitable division of the property of the parties. He maintains that although Judith's marriage to Graves did not automatically terminate her right to receive alimony from her former husband, her second marriage created a prima facie case for termination of her right to alimony from Robert, absent unusual circumstances.\nJudith, on the other hand, maintains the financial provisions made for her in the original decree as modified constituted a portion of a property settlement even though such provisions were labeled \"alimony\"; thus such provisions cannot be modified in the absence of fraud, duress, coercion, mistake or other grounds as would justify the setting aside or changing a decree in any other case.\nII. The first problem is the question of the trial court's intent in entering the dissolution decree requiring Robert to pay $1300 per month as alimony and for support of the children. Paragraphs 3 and 4 of the original decree as well as paragraphs 3 and 4 of the decree as modified June 25, 1971, have been set out earlier.\nThe court in its ruling on the joint application of the parties to enlarge or amend the findings of the court in the original decree \"to cover specifically the matter of what, if any, portion of the $1,300.00 per month support money required under paragraph 3 of the Court's Judgment and Decree are or will be alimony, the parties being uncertain as to the tax consequences of such provisions, covered or alluded to in * * * paragraphs 3 and 4 of the Court's Judgment and Decree\" declared \"of said $1,300.00 payment, $300.00 shall constitute alimony and $1,000.00 shall constitute support money.\"\nThe modified decree did not specifically provide that the sum of $300 per month alimony due Judith should cease upon her remarriage prior to the youngest living child having attained his 18th birthday.\nRobert's application of June 13, 1973, alleged Judith had remarried June 2, 1973. He asked the trial court to enter a decree establishing that his obligation to pay alimony to Judith ceased upon her remarriage.\nJudith in answer admitted she had remarried but urged the court to continue the payments required of Robert in the sum of $1300 per month until the youngest living child attained his 18th birthday.\nThe court in interpreting its original decree expressed the view in its July 7 ruling the nature of the property accumulated by the parties during their marriage was such that division in kind would not be practical; Robert's income, after taxes, was such it did not seem practical he could bear any alimony payments made in the way of property settlement in addition to the $1300 monthly payments required of him in the original decree. The court expressed the further view Judith was entitled to more than the home, automobile and bank stocks she received and for that reason it was the court's intention to assure her the $300 a month payments until the youngest child attains the age of 18 years under any circumstances.\nThe court then concluded the $300 alimony payments should continue until the youngest living child attains the age of 18 in the nature of a property distribution.\nIn the matter before us the same judge who entered the original decree entered the June 25, 1971 modification decree and heard Robert's application for modification. Peters v. Peters, 214 N.W.2d 151, 157 (Iowa 1974), has this statement:\n\"* * * [W]e recognize the advantage a trial court has in interpreting its own prior decree. We have said a court's construction of its own decree is given great weight in determining what the decree means. * * * [citing authority].\"\n\"`A judgment is to be construed like other written instruments. The determinative factor is the intention of the court as gathered *278 from all parts of the judgment. Effect must be given to that which is clearly implied as well as to that which is expressed. * * * [citing authorities].'\" (Emphasis supplied). Cooper v. Cooper, 158 N.W.2d 712, 713 (Iowa 1968). See also Dairyland, Inc. v. Jenison, 207 N.W.2d 753, 754 (Iowa 1973); Sound Storm Ent., Inc. v. Keefe In and For Fayette Cty., 209 N.W.2d 560, 566 (Iowa 1973); and Peters v. Peters, 214 N.W.2d at 157.\n\"A decree in equity is to be given construction in the light of the circumstances appearing of record under which it was entered.\n\"`It will be construed and restricted in accordance with the pleadings and even with reference to other parts of the record.' * * * [citing authority].\" Hargrave v. City of Keokuk, 208 Iowa 559, 562-563, 223 N.W. 274, 276.\nIn order to resolve Judith's contention set out in division I, supra, that the financial provisions made for her in the original decree as modified constituted a portion of a property settlement even though such provisions were labeled \"alimony,\" it is necessary to discuss the meaning of the terms \"alimony\" and \"property division.\" This problem was before this court in Knipfer v. Knipfer, 259 Iowa 347, 144 N.W.2d 140, where a stipulation dictated by the parties, not transcribed, not signed, filed or made a part of decree was involved.\nIn the course of the opinion the court said:\n\"The term `alimony' has always had a technical signification, and, while in modern times, there have been many definitions of `alimony' set out in the decisions of the courts, which differ more or less in details, they all agree that primarily alimony is an allowance to the wife from the husband for her support in a divorce action, in lieu of the legal obligation of the husband to support her * * *.\n\"* * *\n\"The doctrine of alimony is based upon the common law obligation of the husband to support his wife, which obligation is not removed by her obtaining a divorce for his misconduct.\" Id., 259 Iowa at 352-353, 144 N.W.2d at 143.\nHowever, simply because the term alimony is employed in a decree does not always dictate it is used in the sense set out above. \"The term `alimony' usually and technically means an allowance for wife support and is distinguishable from property settlement and child support. But it has been said that `in a broader sense it covers an award made for the support of minor children' and `is used in some instances to designate the amount allowed the divorced wife in settlement of property rights.' * * * [citing authority].\" Brin v. Brin, 240 Iowa 659, 661, 37 N.W.2d 261, 262.\nThe fact the award was to be paid in installments rather than in a lump sum is immaterial. Farrand v. Farrand, 246 Iowa 488, 493, 67 N.W.2d 20, 23.\nIn other words, \"* * * the trial court's employment of the term `alimony' is not conclusive. It is not what the arrangement is called but what it is that fixes its legal status. It is the substance not the form which is controlling. * * * [citing authority]. If an order constitutes a property settlement as distinguished from alimony, its character is not affected by the name given it. * * * [citing authorities].\" Knipfer, 259 Iowa at 351, 144 N.W.2d at 142-143.\nNevertheless, alimony and property division do have distinct meanings. \"* * * Division of property has for its basis the wife's right to a just and equitable share of that property which has been accumulated by the parties as the result of their joint efforts during the years of the marriage to serve their mutual needs. * * * [citing authority].\" Knipfer, 259 Iowa at 353, 144 N.W.2d at 143.\nNo single factor is controlling in determining whether a particular award constitutes alimony or a property division. All *279 relevant factors must be taken into consideration including the extent and nature of the property accumulated by the parties which the court is called upon to distribute in a just and equitable manner, the provisions of the original decree terminating the marital relationship, as well as the guidelines set out in Schantz v. Schantz, 163 N.W.2d 398, 405 (Iowa 1968), excluding consideration of reward or punishment on the basis of fault. In Re Marriage of Winter, 223 N.W.2d 165, 169 (Iowa 1974).\nIn its original decree the court made a finding that at the time of the dissolution Judith was unemployed and had no special skills. Obviously, the court felt some provision should be made for Judith's maintenance and support. The court also made a finding Judith's expenses in maintaining the family home for herself and the three children were, at the time, approximately $15,500 per year. The total amount awarded to meet these expenses was $15,600.\nWhen consideration is given to the extent and value of the assets of the parties and the division made thereof by the court in the original decree, this court reaches the conclusion the provision for the periodic payment of $300 is alimony.\nIII. With the foregoing conclusion there still remains to be determined whether the $300 per month alimony should be continued notwithstanding Judith's remarriage. This seems particularly true in light of the provisions of the trial court's order from which this appeal arises.\nThere are two separate views as to the effect of remarriage on an alimony decree. One is that it automatically terminates alimony. The other is that remarriage does not ipso facto terminate alimony but ordinarily justifies an application for termination of alimony. In Myers v. Myers, 195 N.W.2d 113, 114 (Iowa 1972), this court recognized, \"where no child support is involved a majority of jurisdictions hold a wife's remarriage does not in and of itself terminate her right to alimony. It does constitute a strong ground for termination of the alimony decreed. Annot., 48 A.L. R.2d 270, 283, Alimony\u0097Effect of Remarriage.\"\nThis statement regarding the problem appears in Wolter v. Wolter, 183 Neb. 160, 158 N.W.2d 616, 619:\n\"The basic principle that supports both views is that it is against public policy that a woman should have support or its equivalent during the same period from each of two men. On this issue, this court said: `\"Aside from positive unseemliness, it is illogical and unreasonable that she should have the equivalent of an obligation for support by way of alimony from a former husband and an obligation from a present husband for an adequate support at the same time. It is her privilege to abandon the provision made by the decree of the court for her support under sanctions of the law for another provision for maintenance which she will obtain by a second marriage; and when she has done so, the law will require her to abide by her election since there is no reason why she should not do so.\"' Bowman v. Bowman, 163 Neb. 336, 79 N.W.2d 554.\n\"* * * Even cases which adopt the automatic termination approach tend to concede that there may be exceptional circumstances under which alimony might be considered as continuing, or that, at least, judicial determination of the question as to whether it continues might be advisable. This is perhaps due to problems involved in the use of the term `alimony' in decrees or orders as representing an allowance for support or property division or settlement, or both. For example, see comments in Bowman v. Bowman, supra, indicating that the alimony award represented, in whole or in part, repayment to the wife for her material contributions to the marriage and to the assets of the husband. Other courts have indicated concerns in the area of the validity of the remarriage, particularly where the mental capacity of the wife to contract the second marriage is in issue. The obvious result of an automatic termination *280 would be that the court would lose all jurisdiction and the wife would have no judicial recourse, even though there were extraordinary equities.\"\nIn Myers v. Myers, 195 N.W.2d at 114, after noting the conclusion reached by the majority of jurisdictions appears to be well supported by the cases, this court stated, \"We agree.\"\nCases from other jurisdictions supporting the rule recognized in Myers v. Myers are collected in the annotation in 48 A.L.R.2d 270 and in the Later Case Service for that volume.\nWe now hold the remarriage of a woman whose previous marriage has been terminated in a dissolution of marriage proceeding does not of itself terminate her right to alimony but it does make out a prima facie case which requires the court to end it, in the absence of proof of some extraordinary circumstances justifying its continuance.\nRobert made out a prima facie case for termination of the $300 monthly payments. In our de novo review we fail to find any extraordinary circumstances justifying continuance of these payments.\nThe present case does not present the factual circumstances before the court in Peters v. Peters, 214 N.W.2d 151. In that connection see Annot., 45 A.L.R.3d 1033.\nIV. On remand the trial court shall set aside its order of July 7, 1973, and provide for the termination of $300 monthly payments required of Robert as of the date the procedendo is issued in this matter. See Siver v. Shebetka, 245 Iowa 965, 968-969, 65 N.W.2d 173, 175.\nThe costs on this appeal shall be taxed to the appellee, now Judith A. Woodward Graves.\nWith directions to the trial court the case is therefore\nReversed and remanded.\n"} -{"text": " FILED\n United States Court of Appeals\n Tenth Circuit\n\n February 3, 2011\n UNITED STATES COURT OF APPEALS\n Elisabeth A. Shumaker\n Clerk of Court\n TENTH CIRCUIT\n\n\n LINDA A. DOUGHERTY,\n\n Plaintiff-Appellant,\n v. No. 09-6068\n UNIVERSITY OF OKLAHOMA (D.C. No. 5:05-CV-01341-F)\n BOARD OF REGENTS, State of (W.D. Okla.)\n Oklahoma ex rel., a constitutional\n state agency,\n\n Defendant-Appellee.\n\n\n ORDER AND JUDGMENT *\n\n\nBefore LUCERO, BALDOCK, and HOLMES, Circuit Judges. **\n\n\n Plaintiff Linda A. Dougherty appeals from the district court\u2019s denial of her\n\nmotion to enforce a settlement agreement against Defendant University of Oklahoma\n\nBoard of Regents. Because we conclude the district court lacked subject matter\n\njurisdiction, we remand this case to the district court with instructions to remand to\n\nthe state court.\n\n *\n This order and judgment is not binding precedent except under the doctrines\nof law of the case, res judicata, and collateral estoppel. It may be cited, however,\nfor its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.\n **\n After examining the briefs and appellate record, this panel has determined\nunanimously that oral argument would not materially assist in the determination of\nthis appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). This case is,\ntherefore, submitted without oral argument.\n\f I.\n\n The parties are familiar with the facts of this case, and we do not recite them\n\nat length here. In 2005, Plaintiff sued Defendant in Oklahoma state court, alleging\n\nbreach of contract. Defendant removed the action to federal district court, alleging\n\nsubject matter jurisdiction on the basis of diversity of citizenship. 28 U.S.C.\n\n\u00a7 1332(a)(1). Plaintiff is a citizen of Alabama, and both parties appear to have\n\nassumed Defendant, a \u201cConstitutional body of the State of Oklahoma,\u201d was\n\nconsidered a citizen of Oklahoma. Defendant also alleged an amount in controversy\n\nexceeding $75,000. 1\n\n After the complaint and answer were filed in federal district court, the parties\n\nreached a settlement agreement. 2 In a short order, the district court administratively\n\nclosed the case but retained jurisdiction for the purpose of enforcing the settlement\n\nagreement. Plaintiff became dissatisfied with Defendant\u2019s actions pursuant to the\n\nsettlement agreement and filed a motion to enforce the settlement agreement in 2008.\n\nThe district court concluded the agreement was unambiguous and that Defendant had\n\ncomplied with it. The court, therefore, denied her motion to enforce. Plaintiff\n\nappealed. We subsequently issued an order to show cause why we should not\n\n\n 1\n Because we conclude diversity of citizenship does not exist in this case, we\ndo not reach the question whether the amount in controversy requirement is satisfied.\n 2\n In her amended complaint before the federal district court, Plaintiff alleged\nnegligent supervision, training and retention claims in addition to her breach of\ncontract claim against Defendant.\n\n 2\n\fremand to the district court with instructions to remand to the state court for lack of\n\nsubject matter jurisdiction. In simultaneous briefings, both parties concede we lack\n\nsubject matter jurisdiction. 3\n\n II.\n\n In every case, we must \u201csatisfy ourselves not only of our own jurisdiction, \u2018but\n\nalso that of the lower courts in the cause under review.\u2019\u201d Estate of Harshman v.\n\nJackson Hole Mountain Resort Corp., 379 F.3d 1161, 1164 (10th Cir. 2004) (quoting\n\nMitchell v. Maurer, 293 U.S. 237, 244 (1934)). Thus, \u201c\u2018[w]e have jurisdiction to\n\ndetermine our jurisdiction.\u2019\u201d Hamilton v. Gonzales, 485 F.3d 564, 565 (10th Cir.\n\n2007) (quoting Schroek v. Gonzales, 429 F.3d 947, 950 (10th Cir. 2005)).\n\n The only defendant in this case is the University of Oklahoma Board of\n\nRegents. The Board of Regents, like the University of Oklahoma itself, is an arm of\n\nthe state of Oklahoma. Cornforth v. Univ. of Okla. Bd. of Regents, 263 F.3d 1129,\n\n1131 n.1 (10th Cir. 2001); Hensel v. Office of Chief Admin. Hearing Officer, 38\n\nF.3d 505, 508 (10th Cir. 1994); see also Okla. Const. Art. XIII-A, XIII-B (2006);\n\nOkla. Stat. tit. 70, \u00a7\u00a7 3301\u20133305 (2005). \u201cA state, or the arm or alter ego of a state,\n\n\n 3\n Defendant notes: \u201c[I]t would seem that an incorrect presumption was shared\nby all\u2013counsel for the University, counsel for Dougherty, the District Court, and\neven this honorable Court, at least for some period of time\u2013that the University\u2019s\nstatus constituted that of a \u2018citizen\u2019 for purposes of diversity jurisdiction.\u201d\nCounsel\u2019s candid admission of his mistake is well-warranted, but his implication that\nthis court has made the same mistake is not. It cannot be said that the court which\nordered the parties to explain why the district court had jurisdiction allowed \u201cthe\nissue of subject matter jurisdiction . . . to slip through the cracks.\u201d\n\n 3\n\fhowever, does not constitute a \u2018citizen\u2019 for diversity purposes.\u201d State Ins. Fund v.\n\nAce Transp. Inc., 195 F.3d 561, 563 (10th Cir. 1999); see also Stone v. South\n\nCarolina, 117 U.S. 430, 433 (1886) (\u201cThere is no statute which authorizes the\n\nremoval of a suit between a state and citizens on the ground of citizenship, for a state\n\ncannot, in the nature of things, be a citizen of any state.\u201d); Okla. ex rel. Williams v.\n\nOkla. Natural Gas Corp., 83 F.2d 986, 988 (10th Cir. 1936) (\u201c[A] state is not a\n\ncitizen for the purpose of constituting the requisite diversity.\u201d). Because Defendant\n\ncannot be considered a citizen for diversity purposes, the district court lacked subject\n\nmatter jurisdiction. Accordingly, we remand this action to the district court with\n\ninstructions to remand to the state court.\n\n\n\n Entered for the Court,\n\n\n\n Bobby R. Baldock\n United States Circuit Judge\n\n\n\n\n 4\n\f"} -{"text": "\n334 S.W.2d 506 (1960)\nJames DONEGHY, Appellant,\nv.\nSTATE of Texas et al., Appellees.\nNo. 6920.\nCourt of Civil Appeals of Texas, Amarillo.\nFebruary 15, 1960.\nRehearing Denied April 11, 1960.\n*507 Bullington, Humphrey, Humphrey & Fillmore, Wichita Falls, for appellant.\nR. L. Templeton and O. T. Lackey, Wellington, for appellees.\nCHAPMAN, Justice.\nThis is an appeal from a summary judgment granted by the trial court for the State of Texas and Collingsworth County, appellees, against appellant, James Doneghy, for delinquent taxes for the years 1947 and 1948. The taxes had been assessed against appellant's shares of stock in the City State Bank of Wellington.\nAppellant's appeal is predicated upon the insufficiency in form and substance of the Motion for Summary Judgment; upon the proposition that he having alleged nonuniformity and inequality in the assessment there existed a material issue of fact; upon the error of the trial court in holding that his injunction suit enjoining the collection of taxes for a period of time tolled the four-year statute of limitation, Vernon's Ann.Civ.St. art. 7298; and upon a holding by the court that an alleged tender by appellant in Cause No. 3527 in the trial court is binding upon him in the case at bar. Because of our view of the case the last point mentioned on the question of admissibility of evidence is immaterial and requires no treatment by us in this opinion.\nThough we would not say the Motion for Summary Judgment was in the best form we believe it was sufficient to justify the judgment rendered. It included affidavits of the County Attorney and County Judge; affidavits of the Commissioners Court at the time and their certificates of approval of the correctness of the assessments; and certified copies of the delinquent tax rolls for the years involved showing the assessments of the owners of the shares of stock in said bank, including appellant's shares. This motion was filed on June 5, 1958, and granted on January 19, 1959. If we have read the transcript properly appellant did not file anything whatever in this interim, so the court had before it to counter appellees' Motion for Summary Judgment, the delinquent tax records, and the affidavits just described only appellant's plea in abatement and answer filed in response to appellees' petition. In his unsworn answer he raises the limitation question and illegality of assessments for the years involved. He nowhere asserts in any pleadings or any place in the record that he was *508 substantially injured, nor does he allege any facts by which the trial court could so find. His pleadings assert:\n\"The defendant would further show unto the court that the alleged taxes for the years 1947 and 1948 are on an assessed valuation of said bank stock of 60 per cent of its value, and that other personal property in said county for said two years of 1947 and 1948 are assessed of the valuation of 80 per cent of its value, and the real property in Collingsworth County for the years 1947 and 1948 are assessed at the valuation of 14.63 per cent of its value which is not equal and uniform as provided by law.\"\nFrom the pleadings just quoted if appellant owned only personal property in the county the system of taxation by which his bank stock was assessed on the basis of 60 per cent of its value, and other personal property upon the valuation of 80 per cent of its value, appellant was benefited rather than substantially injured. If he owned any substantial amount of real property in the county, his benefit from a valuation of 14.63 per cent of its value might very well more than offset the assessment of his bank stock at 60 per cent of its value. So far as the record is concerned there is no showing that appellant owned any property in the county other than the bank stock upon which the suit for delinquent taxes was based. Accordingly, there was not any showing before the court or even any inference of a substantial injury to appellant because of his alleged inequality and lack of uniformity in the assessments.\nThe Supreme Court majority has held that where an attack is made because the taxing authority has followed an illegal system of taxation, the taxpayer, in order to prevail, must show that the use of the plan worked to his substantial injury. State v. Whittenburg, 153 Tex. 205, 265 S.W.2d 569. If we understand their latest pronouncement on the subject they have also held that the taxpayer must show in dollars that he is worse off. State v. Federal Land Bank of Houston, Tex., 329 S.W.2d 847, para. 1, lines 16 and 17 of Syl. 4. That question is not raised in this record even by inference.\nAs heretofore stated, the trial court had before it in the Motion for Summary Judgment the delinquent tax records on the property involved. These constitute prima facie proof of the true and correct amount of taxes due by the taxpayer. Article 7326, Vernon's Ann.Civ.St.; Billingsley v. City of Fort Worth, Tex.Civ. App., 278 S.W.2d 869 (N.R.E.); Stone v. City of Dallas, Tex.Civ.App., 244 S.W.2d 937 (writ dismissed); City of Orange, Texas v. Levingston Shipbuilding Co., 5 Cir., 258 F.2d 240.\nAppellant had only the unsworn pleadings above mentioned to counter appellees' Motion for Summary Judgment. It has been textually stated by a well-known authority on pleadings, the Hon. Robert W. Stayton, Professor of Law, University of Texas, as follows: \"But, while there are decisions to the contrary, the better reasoned cases decide that mere pleadings do not show that there is a genuine issue of fact, and thus prevent summary judgment, but that the showing is to be made by depositions, admissions, affidavits, or like `proofs,' one, some or all.\" Vol. 29, Texas Law Review, p. 688. This statement is supported by Christianson v. Gaines, 85 U.S.App.D.C. 15, 174 F.2d 534, 536 and William J. Kelly Co., Inc. v. Reconstruction Finance Corp. 1 Cir., 172 F.2d 865, 866. Our summary judgment rule, 166-A was adopted from Federal Rules of Civil Procedure, rule 56, 28 U.S.C.A. and we have ample case book authority from our State courts following the pronouncement of the federal cases just cited. Schepps v. American District Telegraph Co. of Texas, Tex.Civ.App., 286 S.W.2d 684; Reese v. Davitte, Tex.Civ. App., 255 S.W.2d 1015. We believe the *509 authorities just cited constitute the better reasoning. As said in William J. Kelly Co., Inc. v. Reconstruction Finance Corp., supra (172 F.2d 866), \"In many cases there is no genuine issue of fact, although such an issue is raised by the formal pleadings.\" In Reese v. Davitte, supra (255 S.W.2d 1017) the Fort Worth Court said, \"* * * even though a petition may state a cause of action, nevertheless if on a motion for summary judgment proof fails to show any genuine issue regarding a material fact, the granting of summary judgment is proper.\" Though we do not believe appellant's pleadings even raise an issue of fact under the authorities just cited, even if it should be admitted that unsworn pleadings alone may raise a fact issue appellant's allegations would still be insufficient to bar the granting of the Motion for Summary Judgment because they do not plead any facts from which the trial court could find substantial injury under the authority of the Whittenburg case and State v. Federal Land Bank, supra.\nAppellant's only other point is concerning his plea of limitations. On August 11, 1951, appellant, in Cause No. 3527, filed a suit alleging appellees were about to file suit to collect the 1947 and 1948 taxes illegally assessed against him and secured a temporary injunction on August 27, 1951. The record indicates that a jury trial upon the merits of the case resulted in a mistrial because of the jury's failure to agree. Appellant expressed dissatisfaction with the Hon. Luther Gribble as trial judge and Judge Gribble being the administrative judge of the district later assigned Judge Jesse Owens, District Judge at Vernon at the time, to hear the case. The record reveals that Judge Owens, upon motion of appellant, dismissed Cause No. 3527 without prejudice and adjudged the costs against appellant. Upon the same day appellees filed suit against appellant for delinquent taxes for the years 1947, 1948, 1951, and 1952. He paid the taxes for the last two years named and pleaded the four-year statute of limitation on the 1947 and 1948 texas. Except for the period appellees were enjoined by the court from bringing suit for collection of the delinquent taxes a four-year period from their due date had not elapsed.\nAppellees pleaded appellant was estopped to plead limitations by his action in enjoining a suit for the collection of the taxes for the period of the injunction. We believe the plea was good. The general rule is that where one is prevented from exercising his legal remedy by the pendency of legal proceedings the time in which he is thus prevented should not be counted against him in determining whether limitations have barred his right. Manes v. J. I. Case Threshing Machine Co., Tex. Civ.App., 295 S.W. 281 (writ refused); Cavitt v. Amsler, Tex.Civ.App., 242 S.W. 246 (writ dismissed). There is not anything in this case that takes it out of this general rule.\nAccordingly, the judgment of the trial court is affirmed.\n\nOn Motion for Rehearing\nAppellant's motion for rehearing urges error in the holding of this Court to the effect that his unsworn answer alone was insufficient to preclude the granting of summary judgment where the movants' motion and affidavits showed them to be entitled to same, absent a showing by appellant of a fact issue. We continue to adhere to such holding and cite the following additional authorities: Holland v. Landsdowne-Moody Co., Inc., Tex.Civ. App., 269 S.W.2d 478; Gulf, Colorado & Santa Fe Ry. Co. v. McBride, Tex., 322 S.W.2d 492; Stafford v. Wilkinson, 157 Tex. 483, 304 S.W.2d 364; Rolfe v. Swearingen, Tex.Civ.App., 241 S.W.2d 236; Aydelotte v. Anderson, Tex.Civ.App., 280 S. W.2d 945, 947.\nIn the last cited case this court said:\n\"It has been held that where the moving party's adversary filed no counter affidavit, made no showing *510 other than as stated in his unsworn pleadings, made no showing to the effect that affidavits on his behalf were unavailable, such adversary has in effect admitted the sworn facts alleged by the movant's attached affidavits to be true, for which reason a summary judgment should be granted and under such circumstances the trial court is left without any alternative in the matter. Rolfe v. Swearingen, Tex.Civ. App., 241 S.W.2d 236.\n\"As against appellee's uncontroverted material facts conclusively established under oath in support of his claims, appellant appeared for the hearing before the trial court without anything to refute appellee's claims other than his unsworn pleadings. Under the record before us, supported by the authorities cited, it is our opinion that the trial court was justified in sustaining appellee's motion for summary judgment and rendering its judgment accordingly.\"\nAdditionally, a mere allegation of nonuniformity and inequality in assessment of taxes does not allege substantial injury. It is our opinion that even had there been an admission, affidavit, deposition, or like proof of nonuniformity and inequality in assessment the record would still not have raised a fact issue in this case under the authority of the Whittenburg case and the Federal Land Bank case cited in our original opinion.\nAppellant continues in his motion for rehearing to urge the limitation question asserted in his brief before this court, contending that the injunction in Cause No. 3527 in the District Court of Collingsworth County did not enjoin the bringing of suit but only collection of the taxes. We believe such contention is merely a play on words and that the trial court's judgment in the injunction case refutes such position. The judgment provided \"* * * if not restrained from doing so, the defendants will file suit against the plaintiff to foreclose an alleged tax lien on certain bank stock owned by appellants in City State Bank, Wellington, Texas, such tax alleged to be due for the years 1947 and 1948 and that if such suit is filed the plaintiff will suffer an injury and from which he has no adequate remedy at law; * * *.\"\nThe judgment then provides that the clerk of that court issue a writ of injunction restraining and enjoining the tax authorities \"from doing any act tending to collect such taxes; * * *.\"\nWe do not believe it could be said that doing any act tending to collect such tax would not include the filing of a suit for that purpose.\nIt is obvious that the taxes assessed for 1947 and 1948 are many years past due and the tax units have been deprived of the use of the money during this period of time. We believe from the record in this case we have no alternative except to affirm the judgment of the trial court, which is accordingly done.\n"} -{"text": "176 F.3d 473\nDaniel Scalzov.Insalaco's Markets, United Food & Commercial Workers Union,\nLocal No. 72\nNO. 98-7152\nUnited States Court of Appeals,Third Circuit.\nJanuary 28, 1999\n\n1\nAppeal From: M.D.Pa.\n\n\n2\nAffirmed.\n\n"} -{"text": "\n\nCOURT OF APPEALS\nEIGHTH DISTRICT OF\nTEXAS\nEL PASO, TEXAS\n\n\n\n\u00a0\nJEANNIE COUTTA,\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\n Appellant,\n\u00a0\nv.\n\u00a0\nTHE STATE OF TEXAS,\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\n Appellee.\n\n\n\u00a0\n\u00a0 '\n\u00a0\u00a0 \u00a0\n\u00a0 '\n\u00a0\u00a0 \u00a0\n\u00a0 '\n\u00a0\u00a0 \u00a0\n\u00a0 '\n\u00a0\u00a0 \u00a0\n\u00a0 '\n\u00a0\u00a0 \u00a0\n\u00a0'\n\n\u00a0\n\n\n\u00a0\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 No. 08-10-00039-CR\n\u00a0\nAppeal from the\n\u00a0\n243rd\n District Court\n\u00a0\nof El\n Paso County, Texas\n\u00a0\n(TC# 20040D01265)\n\u00a0\n\n\n\n\u00a0\nO\nP I N I O N\n\u00a0\nA jury found Appellant guilty of one count\nof aggravated promotion of prostitution (Count I) and three counts of engaging\nin organized criminal activity (Counts II-IV).\u00a0\nThe same jury assessed punishment at confinement of ten years for Count\nI, seventeen years for Count II, two years each for Counts III and IV, and a\nfine of $10,000 for each count.\u00a0 Appellant\nappeals her convictions.[1]\u00a0 We affirm.\nBACKGROUND\nAppellant and her business partner, Phyllis\nWoodall, owned and operated the Naked Harem, an adult-entertainment\nestablishment where patrons paid a cover charge for admission to be entertained\nby totally-nude women.\u00a0 For a $1 tip paid\nto a dancer per song, a patron could sit by one of the stages and watch the\ndancer on stage perform in the nude.\u00a0 For\nan additional $10 to $30, a patron could purchase a \u201ctable dance\u201d or \u201clap\ndance,\u201d a term used interchangeably at trial to describe a dance in which the\ndancer was closer and more intimate with the patron.\u00a0 A patron could also purchase a private two-song\ndance in one of four private rooms in the club for $130 cash or $140 if paid by\ncredit card.\u00a0 A patron could purchase\nadditional songs if he wanted more time in the private room.\nThe dancers were independent contractors who\nhad to pay the club a \u201cfloor fee\u201d for the privilege of dancing in the Naked\nHarem.\u00a0 They were not paid a salary.\u00a0 The dancers kept all of the money that\npatrons paid for stage and table dances, but they split with the Naked Harem the\nmoney earned from private dances.\u00a0 For the\ntwo-song minimum private dances, the Naked Harem kept $50 if the patron paid in\ncash, and kept $60 if the patron paid with a credit card.\nThe Naked Harem made most of its money from\nthe private dances because the dancers kept all of the money from their stage\nand table dances and, thus, private dances were the \u201cnumber one\u201d priority of\nthe club.\u00a0 Appellant and Woodall\nencouraged dancers to perform more private dances rather than limiting their\nperformances to stage and table dances, and dancers who limited their dances\nwere viewed as being selfish and not making money for the club.\nAppellant and Woodall were \u201chands-on\u201d owners\nand operators of the Naked Harem, were in control of the club and the\nentertainment provided therein, performed managerial duties when needed, and\nmade all of the decisions regarding who performed duties at the club, including\ndecisions about the hiring and firing of dancers.\u00a0 They made all of the rules and regulations\nregarding activities at the club and if the managers had any questions, they\nwere required to obtain \u201cpermission\u201d from Appellant and Woodall.\u00a0 Appellant was physically present at the Naked\nHarem about 85 percent of the time and, upon arriving at the club, would see\nwhat needed to be done, perform general upkeep, and obtain updates from the\nmanagers about the daily operations which included, among other things, information\nregarding which dancers were making and producing the most money, \u201cwho was\ndoing what,\u201d and who was causing trouble.\u00a0\nThe managers also discussed with Appellant and Woodall the daily ledgers\ndocumenting the club\u2019s revenues and sources thereof.\nAppellant and Woodall had cameras installed throughout\nthe public areas of the club from which they could and did monitor club activities,\nexcept those occurring within private rooms.\u00a0\nAppellant and Woodall monitored the activities from within the club and\nfrom home.\u00a0 Appellant also had recording equipment\ninstalled on the club\u2019s telephones so that she could record and monitor the\nphone conversations of employees and dancers to determine whether they were\nspeaking with police.\nIn addition to Appellant and Woodall, other\nmembers of the combination identified in Counts II through IV of Appellant\u2019s\nindictment included Richard Hamm, Jacob Crum, Sandra \u201cTammy\u201d Zepeda, and Maria\nBrooks, who were employed as managers at the Naked Harem.\u00a0 These managers were paid a percentage of the\nclub\u2019s revenues and had a monetary stake therein.\nWhile Appellant and Woodall handed down an\n\u201cofficial\u201d policy that no sex or sexual contact was permitted within the club\nor the private rooms, the rules enforced by Appellant, Woodall, and the\nmanagers were very different.\u00a0 Hamm, who\nhad been employed at the Naked Harem for approximately nine years, testified\nthat signs stating that sex was not permitted were not posted until \u201cafter the\nwarrant was issued,\u201d and Crum, who had worked at the club for seven years,\nsimilarly testified that the signs were posted after the first raids leading to\nAppellant\u2019s prosecution.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Hamm testified\nthat during the table or lap dances performed on the main floor of the Naked\nHarem, dancers would \u201cgrind\u201d on the patron\u2019s lap.\u00a0 Crum likewise testified that in performing\nsuch dances, the dancer would \u201cgrind\u201d totally nude upon the patron, rubbing her\ngenitals against the patron for the patron\u2019s sexual excitement.\u00a0 Dancers and patrons testified that the\ndancers would rub their genitals and breasts on the patron\u2019s private parts and\nallow patrons to touch their breasts, buttocks, and genitalia for the patron\u2019s\nsexual satisfaction.[2]\u00a0 The sexual contact was visible to the club managers\nand to Appellant and Woodall, who were also able to view the activities within\nthe club through the camera monitors.\u00a0 A\nvideo showing Appellant observing a sex show was introduced into evidence.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Hamm and Crum\nstated that Appellant and Woodall had established the \u201cwhole process of\nprostitution\u201d at the Naked Harem and that the owners and managers were aware\nthat prostitution was occurring in the private rooms of the club.\u00a0 Hamm and Crum testified that they\nspecifically discussed with Appellant and Woodall the prostitution and sex\noccurring within the private rooms.\u00a0 Crum\ntestified that in one instance, in Appellant\u2019s presence, he paid to have sex\nwith two dancers in one of the private rooms and Appellant commented, \u201c[T]hat\nwas great.\u201d\u00a0 Crum acknowledged that\npatrons were paying to have sex in the private rooms and testified that the\nmanagers were aware of those activities.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Francisco\nJavier Cisneros had installed the phone and camera monitoring systems in the\nNaked Harem.\u00a0 Cisneros testified that he\nhad informed Appellant and Woodall that the dancers and patrons were having sex\nin the private rooms but Appellant and Woodall would deny it.\u00a0 Cisneros, without informing Appellant and\nWoodall, placed cameras within the private rooms and recorded the activity\noccurring therein.\u00a0 Cisneros testified\nthat he never presented the recordings to Appellant and Woodall because he\nfigured the owners didn\u2019t want the activity to stop.\u00a0 Cisneros\u2019 recordings of activity occurring within\nthe private rooms were introduced into evidence at trial.[3]\u00a0 The recordings showed numerous sex acts.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Patron\nDonald Glines testified that he paid the Naked Harem for sex.\u00a0 Glines said that when he paid for table or\nlap dances, the dancers would rub their breasts and genitals on him for his\nsexual gratification and some would ask if he wanted to go to the private room\nand have sex.\u00a0 On many occasions, Glines\npaid the fee to go to the private rooms and during at least one-half to\ntwo-thirds of those occasions, Glines engaged in sexual intercourse with the\ndancer and would sometimes tip the dancer.\u00a0\nOn those occasions when he and the dancer did not have sexual intercourse,\nthe dancer would rub her genitals and breasts against him and he would touch\nthe dancer\u2019s breasts and genitals.\u00a0 David\nRuiz testified that he paid for oral sex in the private rooms at the Naked\nHarem once or twice per year between 2001 and 2003, and had sex whether or not\nhe paid the dancer a tip.\u00a0 Patron Jesus\nGarcia visited the Naked Harem about once every three months from 2001 to 2003,\nand testified that after paying for a table dance, some of the dancers would\nask if he wanted to have sex in a private room.\u00a0\nGarcia did pay for sex in the private rooms at the Naked Harem and\ntestified that one of the club\u2019s managers, Maria Brooks, would inform him when\nthere were new girls who wanted to go to the private rooms.[4]\u00a0 The prior testimony of patron Jason Casper was\nintroduced at trial.\u00a0 Casper testified\nthat he paid both for oral sex and to watch live sex shows in a private room at\nthe Naked Harem.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Sylvia\nGarcia was a dancer at the Naked Harem and testified that, on many occasions,\nshe had sex with a patron in a private room after he paid his fee for the\nprivate dance.\u00a0 Mary Snyder testified\nthat when she was a dancer at the club, she had sex in a private room with a\npatron after he had paid his private-dance fee.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Dancer Lucia\nPinedo testified that she was employed as a dancer at the Naked Harem when she\nwas 15 years old.\u00a0 In deposition\ntestimony admitted at trial, Appellant admitted that she and Woodall had hired\nPinedo to work at the club, and Hamm testified at trial that Appellant brought\nPinedo to him and directed that he put Pineda on stage. \u00a0Hamm said Pinedo \u201clooked pretty young\u201d and\nquestioned her about her age.\u00a0 Hamm\ntestified that Pinedo\u2019s identification showed that she was of legal age but Pinedo\ntestified that she showed her high-school identification card, which does not\nhave her date of birth.\u00a0 Crum, who stated\nthat Pinedo looked like a child and did not look 18 years old, testified that\nwhen he discussed his concerns about Pinedo\u2019s age with Appellant and Woodall,\nthey told him not to worry.\u00a0 Pinedo\ndanced topless and totally nude during her performances and table and lap\ndances.\u00a0 She had sex with patrons in the Naked\nHarem\u2019s private rooms and, during the lap and table dances, patrons would touch\nher breasts, buttocks, and \u201cprivate parts.\u201d\u00a0\nWhen police first \u201craided\u201d the club, Appellant, Hamm, and Crum destroyed\na video recording of Pinedo\u2019s stage performance at the Naked Harem.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Deserae\nWilliams Gurrola also danced nude on the stage and topless during lap dances at\nthe Naked Harem when she was 15 years old.\u00a0\nDuring the lap and table dances, Gurrola would sit on and grind the\npatron\u2019s lap.\u00a0 After Gurrola had become\npopular in the club, manager Sandra \u201cTammy\u201d Zepeda, grabbed Gurrola, told her\nto \u201cpretty up,\u201d and escorted her to a VIP room where a doctor who was\npatronizing the club had \u201cbought her out,\u201d meaning that he had paid for hours\u2019\nworth of songs.\u00a0 On that occasion,\nGurrola and Zepeda\u2019s daughter touched and rubbed each other and utilized sex\ntoys while the patron watched.\u00a0 The doctor,\nGurrola, and Zepeda\u2019s daughter then watched while another dancer and patron had\nsex within the same room.\u00a0 Gurrola made\napproximately $2,000 for the evening and when Appellant and Zepeda paid Gurrola\nin cash, Appellant informed Gurrola that Gurrola was going to make a lot of\nmoney at the Naked Harem.\u00a0 Crum testified\nthat he thought Gurrola\u2019s identification resembled her and when he showed the\nidentification to Appellant, Appellant instructed him to allow Gurrola to\ndance.\u00a0 Gurrola testified that she spoke,\nacted, and looked like a 15-year-old girl when she was dancing at the Naked\nHarem and noted that any mature adult would have known the difference between\nher and an 18 year old.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The jury was\npresented with other evidence regarding physical signs of sexual activity and\nprostitution occurring at the Naked Harem. \u00a0Hamm testified that black lights within the\nclub would often show semen spattered all over the dancer\u2019s body and Crum\ntestified that, after exiting the private rooms, male patrons were often seen\nwashing their penises in the men\u2019s bathroom sink.\u00a0 The jury heard testimony and saw photographic\nevidence that used condoms were left in the private rooms, and were presented\nwith testimony that Appellant and Woodall conducted a meeting with the dancers\nand club employees at which they instructed the dancers that they were not to\nleave used condoms in the private rooms or else be subject to a $50 fine for\nfailing to clean up.\u00a0 The dancers\ncomplied with Appellant and Woodall\u2019s instruction at the meeting to flush\ncondoms down the toilet so that police would not find them.\u00a0 Because the flushing of used condoms created\nplumbing problems at the Naked Harem, Appellant and Woodall had a special trap\ninstalled in the sewer lines to catch the condoms.\u00a0 The jury was presented with photographic\nevidence of the condoms collected in the trap and thrown into a trash\nreceptacle near the trap.\nDISCUSSION\nIn ten issues, Appellant complains: (1) that\nshe has been denied a meaningful and speedy appeal; (2) that the evidence is\ninsufficient to corroborate accomplice-witness testimony in Counts I through IV\nof the indictment; (3) that the trial court committed jury-instruction error;\n(4) that the evidence is legally insufficient to support her convictions for\nCounts I and II; (5) that the trial court committed harmful error in\nintroducing a video recording; and (6) that the trial court committed\nreversible error by excluding certain testimony.\nSPEEDY APPEAL\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Appellant\nasserts that she is entitled to a new trial because her appeal was excessively\ndelayed due to the court reporter\u2019s failure to complete preparation of the\ntrial record for appellate purposes in violation of her Fourteenth-Amendment\nright to a meaningful and speedy appeal, and contends that she has been substantially\nprejudiced thereby.\u00a0 We disagree.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The trial\nrecord in this case was due to be filed on April 10, 2010, and the filing of\nthe\u00a0 14-volume reporter\u2019s record was completed\non April 5, 2011.\u00a0 Within that time frame,\nAppellant\u2019s counsel zealously pursued the filing of the reporter\u2019s record, as\nnoted by the trial court, and we twice ordered the trial court to conduct\nhearings to determine the status of the record.\u00a0\nIn each of those hearings, the trial court\u2019s reporter explained under\noath her reasons for the delay, which were based upon the reporter\u2019s heavy work\nload and her own medical and health-related issues. \u00a0During the first of those hearings, the trial\ncourt noted that the reasons for the delay involved the reporter\u2019s health\nissues and the trial court\u2019s heavy docket, and that the trial court had\nattempted to assist by relieving the reporter of some of her duties and by employing\na \u201croving\u201d court reporter.\u00a0 During the\nsecond hearing, the trial court stated that it had changed the reporter\u2019s\nduties to allow her more time to work on preparing the record.\u00a0 After each hearing, we granted extensions for\nthe filing of the reporter\u2019s record, neither of which was met.\u00a0 On March 2, 2011, the court reporter\nrequested an additional extension of time within which to prepare the record,\nand on March 8, 2011, Appellant filed a Motion for New Trial Due to the Failure\nof the Court Reporter to Timely File the Record on Appeal.\u00a0 The following day, we denied Appellant\u2019s\nmotion and ordered the trial court to conduct another hearing and take appropriate\naction to ensure that the record was completed quickly.\u00a0 We also directed that unless the trial court\nappointed a substitute court reporter, the complete record was due by March 28,\n2011, and noted that the court reporter would face possible citation for\ncontempt of court and reporting to the Court Reporter\u2019s Certification Board for\nfailure to comply with the deadline. \u00a0The\ntrial court found that the reporter would be able to meet the deadline and stated\nthat it would take an active role and monitor the completion of the record.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 A convicted\ndefendant does not enjoy a Constitutional or Sixth Amendment right to a speedy\nappeal.\u00a0 See Phynes v. State, 828 S.W.2d 1, 2 (Tex.Crim.App. 1992); see also Rheuark v. Shaw, 628 F.2d 297,\n302 (5th Cir. 1980), cert. denied,\n450 U.S. 931, 101 S.Ct. 1392, 67 L.Ed.2d 365 (1981); Sparkman v. State, 634 S.W.2d 82, 84 (Tex.App.\u2014Tyler 1982, no\npet.).\u00a0 Texas, however, statutorily\nprovides a convicted defendant a right of appeal and the appellate process must,\ntherefore, comport with due-process requirements.\u00a0 See\nRheuark., 628 F.2d at 302.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 No Supreme\nCourt decision holds that excessive delay in a direct appeal denies a criminal\nappellant due process.\u00a0 See Reed v. Quarterman, 504 F.3d 465,\n485 (5th Cir. 2007).\u00a0 We are guided,\nhowever by the opinions of the Fifth Circuit and the Texas courts.\u00a0 The Fifth Circuit has recognized that a court\nreporter\u2019s excessive delay in preparing the appellate record may deny due\nprocess when the delay substantially retards the process of a criminal\ndefendant\u2019s appeal.\u00a0 See Rheuark, 628 F.2d at 302-303.\u00a0\nHowever, not every delay, even an inordinate one, violates a convicted\ndefendant\u2019s due process rights.\u00a0 Rheuark, 628 F.2d at 302-303. \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In\ndetermining whether an appellate delay constitutes a violation of due process, our\ninquiry is guided by the four speedy-trial factors set out by the Supreme Court\nin Barker v. Wingo, 407 U.S. 514, 92\nS.Ct. 2182, 2192, 33 L.Ed.2d 101 (1972).\u00a0\nSee Rheuark, 628 F.2d at 303; United States v. Bermea, 30 F.3d 1539,\n1569 (5th Cir. 1994), cert. denied,\n514 U.S. 1097, 115 S.Ct. 1825, 131 L.Ed.2d 746 (1995). \u00a0Thus, we consider the length of the delay, the\nreasons for the delay, Appellant\u2019s assertion of his right to a speedy appeal,\nand the prejudice to appellant caused by the delay.\u00a0 See\nBermea, 30 F.3d at 1569; Rheuark,\n628 F.2d at 303 n.8; Sparkman, 634\nS.W.2d at 84.\u00a0 The prejudice prong has\nbeen identified as the most important factor of the test.\u00a0 See\nBermea, 30 F.3d at 1569; see also\nUnited States v. Antoine, 906 F.2d 1379, 1382 (9th Cir.), cert. denied, 498 U.S. 963, 111 S.Ct.\n398, 112 L.Ed.2d 407 (1990).\u00a0 Our\nprejudice-factor analysis of the appellate delay focuses on three types of\npossible prejudice: (1) oppressive incarceration during the pendency of appeal;\n(2) the convicted defendant\u2019s anxiety and concern while awaiting the outcome of\nthe appeal; and (3) impairment of the grounds for appeal or viability of\ndefenses in the event of reversal and retrial.\u00a0\nSee Bermea, 30 F.3d at 1569; Rheuark, 628 F.2d at 303 n.8.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The one-year\ndelay of the preparation of the reporter\u2019s record, while undesirable, did not\nsubstantially retard the appellate process in this case and is not so excessive\nas to weigh in favor of finding a due-process violation. \u00a0Bermea, 30 F.3d at 1569 (one\nand one-half year delay in filing reporter\u2019s record after convicted defendant\nfiled notice of appeal was not so excessive as to militate strongly in favor of\nfinding a due-process violation); compare\nAntoine, 906 F.2d at 1382 (three-year delay, two years of which was\nattributable to court reporter\u2019s unwillingness or inability to produce the\ntrial record after convicted defendant paid for it, favored the convicted\ndefendant).\u00a0 Moreover, the State\nrecognizes, as do we, that Appellant had no hand in the delay and that\nresponsibility rests almost exclusively with the trial court\u2019s reporter.\u00a0 Appellant\u2019s appeal was not left to falter,\nhowever.\u00a0 Despite the trial court\u2019s\n\u201cheavy\u201d docket and the court reporter\u2019s health and medical issues which form\nthe foundation of the delay, this Court, the trial court, and Appellant\u2019s\ncounsel exercised their respective powers throughout the period of delay to\ncompel production of the reporter\u2019s record for appeal and, ultimately, it was produced\nand filed.\u00a0 See Tex. R. App. P.\n35.3(c); Johnson v. State, 151 S.W.3d\n193, 196 (Tex.Crim.App. 2004) (identifying those steps which an appellate court\nmay take to compel a court reporter to prepare and file the record).\u00a0 Consequently, we do not find that this factor\nweighs heavily against the State.\u00a0 Cf. Zamorano v. State, 84 S.W.3d 643,\n649 (Tex.Crim.App. 2002).\u00a0 Appellant\nasserted her desire for a timely appeal after the court reporter filed her\nsecond request for extension of time to file the record and thereafter pursued\nthe assertion of her right zealously.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 A violation\nof due process cannot be established without a showing of prejudice to\nAppellant.\u00a0 Bermea, 30 F.3d at 1569.\u00a0 Although\nAppellant is ineligible for an appeal bond and has been incarcerated since her\nconviction and sentencing, she no longer enjoys a presumption of innocence and\nhas not demonstrated that her convictions or sentences are improper.\u00a0 Absent a showing that her incarceration is\noppressive or unjustified in light of the outcome of her appeal on the merits\nor subsequent retrial, if any, we are unable to find that Appellant has been\nsubjected to oppressive incarceration pending her appeal.\u00a0 See Tex. Code Crim. Proc. Ann. art.\n44.04(b) (West 2006); see also United\nStates v. DeLeon, 444 F.3d 41, 59 (1st Cir. 2006) (because a convicted\ndefendant is no longer presumed innocent, it cannot be said that his\nincarceration pending appeal is oppressive); Antoine, 906 F.2d at 1382 (a determination of whether a convicted\ndefendant\u2019s \u201cincarceration is unjustified and thus oppressive depends upon the\noutcome of his appeal on the merits, or subsequent retrial, if any\u201d).\u00a0 It is within reason to state that a convicted\ndefendant who pursues appellate relief experiences some level of concern and\nanxiety during the pendency of the appeal and we have no reason to distinguish\nAppellant in this regard.\u00a0 In fact, Appellant\ndoes not discuss the anxiety or concern she has experienced other than making a\nconclusory statement that she has \u201csuffered immeasurable prejudice.\u201d\u00a0 Although some federal courts have recognized\nthat the anxiety factor is not particularly useful or compelling for purposes\nof due-process analysis, Appellant has neither asserted nor demonstrated that\nshe has suffered a degree of particularized anxiety and concern which\ndifferentiates her case from that of another appellant.\u00a0 See\nDeLeon, 444 F.3d at 59; Antoine,\n906 F.2d at 1382-83. \u00a0Nor has Appellant\nalleged or demonstrated that the delay of her appellate proceedings has\nprejudiced any defense that she may wish to present should the outcome of her\nappeal on the merits result in a reversal or retrial.\u00a0 Where an appellant fails to show such\nprejudice, we are unable to speculate that prejudice or impairment to her\ndefense exists.\u00a0 Because we are unable to\nconclude that Appellant has been prejudiced by the delay in her appellate\nproceedings, we find the delay did not result in a violation of Appellant\u2019s due\nprocess rights.\u00a0 Issue One is overruled.\nAccomplice-Witness\nEvidence and Legal-Sufficiency Issues\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In Issues\nTwo, Three, Four, and Five, Appellant challenges the sufficiency of\nnon-accomplice evidence to corroborate accomplice-witness evidence.\u00a0 In Issue Six, Appellant complains that the\ntrial court erred when it failed to instruct the jury that certain State\u2019s\nwitnesses were accomplice witnesses as a matter of law.\u00a0 In her seventh and eighth issues, Appellant\nasserts that the evidence was legally insufficient to support her convictions under\nCounts II and I of the indictment, respectively.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 We first\nreview the elements of the charged offenses.\u00a0\nThe criminal offense of prostitution occurs when a person knowingly\noffers to engage, agrees to engage, or engages in sexual conduct for a\nfee.\u00a0 Tex.\nPenal Code Ann. \u00a7 43.02(a)(1)\n(West 2011).\u00a0 \u201cSexual conduct\u201d includes:\n(1) deviate sexual intercourse, which includes any contact between the genitals\nof one person and the mouth or anus of another person; (2) sexual intercourse,\nwhich means any penetration of the female sex organ by the male sex organ; and\n(3) sexual contact, which means any touching of the anus, breast, or any part\nof the genitals of another person with intent to arouse or gratify the sexual\ndesire of any person.\u00a0 Tex. Penal Code Ann. \u00a7 43.01(1), (3), (4), (5) (West 2011).\u00a0 Consequently, when a person engages in any\nform of activity defined as \u201csexual contact\u201d for a fee, he or she has committed\nthe offense of prostitution.\u00a0 Tex. Penal Code Ann. \u00a7 43.01(3), \u00a7 43.02(a)(1) (West 2011).\u00a0 \u201cSexual contact\u201d need not be flesh-on-flesh\nbut may occur despite the existence of a cloth or other barrier which prevents\nor impedes flesh-on-flesh contact.\u00a0 See Steinbach v. State, 979 S.W.2d 836,\n838-40 (Tex.App.\u2013Austin 1998, pet. ref\u2019d) (internal citations omitted).\u00a0 A person commits the offense of aggravated\npromotion of prostitution if she knowingly owns, invests in, finances,\ncontrols, supervises, or manages a prostitution enterprise that uses two or\nmore prostitutes.\u00a0 Tex. Penal Code Ann. \u00a7 43.04(a) (West 2011).\u00a0\nIn interpreting this language, the Texas Court of Criminal Appeals has\ndefined \u201cprostitution enterprise\u201d as \u201ca plan or design for a venture or\nundertaking in which two or more persons offer to, agree to, or engage in\nsexual conduct in return for a fee . . . .\u201d\u00a0\nTaylor v. State, 548 S.W.2d\n723, 723 (Tex.Crim.App. 1977).\u00a0\nAggravated promotion of prostitution is the offense alleged in Count I\nand is the predicate offense in Count II of Appellant\u2019s indictment.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 A person who\nemploys or authorizes a child to work in any place of business permitting,\nrequesting, or requiring the child to work nude or topless commits the offense\nof employment harmful to children.\u00a0 Tex. Penal Code Ann. \u00a7 43.251(b)(2)\n(West 2011).\u00a0 For purposes of Section\n43.251 of the Texas Penal Code, \u201cchild\u201d means a person who is younger than 18\nyears of age.\u00a0 Tex. Penal Code Ann. \u00a7 43.251(a)(1) (West 2011).\u00a0 Employment harmful to children is the\npredicate offense alleged in Counts III and IV of Appellant\u2019s indictment.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 A person\ncommits the offense of engaging in organized criminal activity if, with intent\nto establish, maintain, or participate in a combination or in the profits of a\ncombination, she commits aggravated promotion of prostitution (Count II) or\nemployment harmful to children (Counts III and IV).\u00a0 Tex.\nPenal Code Ann. \u00a7 71.02(a)(3) & (7) (West 2011).\u00a0 A \u201c\u2018combination\u2019 means three or more persons\nwho collaborate in carrying on criminal activities[.]\u201d\u00a0 \u00a0Tex. Penal Code Ann. \u00a7 71.01(a) (West\n2011).\u00a0 Engaging in organized criminal\nactivity is the offense alleged in Counts II, III, and IV of Appellant\u2019s\nindictment.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The\nmental-state requirement of the offense of engaging in organized criminal\nactivity consists of two parts.\u00a0 Hart v. State, 89 S.W.3d 61, 63\n(Tex.Crim.App. 2002).\u00a0 The first part\nrequires the State to prove the defendant had the requisite culpable mental\nstate to commit the predicate offense.\u00a0 Tex. Penal Code Ann. \u00a7 71.02 (West\n2011); Hart, 89 S.W.3d at 63.\u00a0 The second part requires that the State prove\nthat the defendant committed the predicate offense with the intent to\nestablish, maintain, participate in, or participate in the profits of a\ncombination and that the members of the combination intended to work together\nin a continuing course of criminal activity.\u00a0\nTex. Penal Code Ann. \u00a7 71.02\n(West 2011); Hart, 89 S.W.3d at 63; Dowdle v. State, 11 S.W.3d 233, 236\n(Tex.Crim.App. 2000).\u00a0 This requires some\nevidence of an agreement to act together in a continuing course of criminal\nactivity.\u00a0 See Renteria v. State, 199 S.W.3d 499, 504 (Tex.App.\u2013Houston [1st\nDist.] 2006, pet. ref\u2019d); Pardue v. State,\n252 S.W.3d 690, 700 (Tex.App.--Texarkana 2008, no pet.).\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Circumstantial\nevidence may be and is often used to prove a person\u2019s intent or knowledge as\ndirect evidence of the same may be scarce.\u00a0\nSee, e.g., Pardue, 252 S.W.3d at 702.\u00a0\nThus, circumstantial evidence may be used to prove, and a jury may infer\nfrom the surrounding facts and circumstances, as here: (1) in support of a\nfinding that she committed the predicate offense of aggravated promotion of\nprostitution, Appellant\u2019s knowledge that prostitution was occurring at the\nNaked Harem; (2) in support of a finding that she committed the predicate\noffense of employment harmful to children, Appellant\u2019s knowledge that Pinedo\nand Gurrola were 15-year-old dancers employed to dance topless or nude in the\nNaked Harem; (3) Appellant\u2019s intent to participate in a combination; and (4)\nthe agreement of the combination members to act together in carrying out\ncriminal activities.\u00a0 See Hart, 89 S.W.3d at 64; Armentrout v. State, 645 S.W.2d 298, 301\n(Tex.Crim.App. 1983); Pardue, 252\nS.W.3d at 701-02; Ledet v. State, 177\nS.W.3d at 213, 218-19 (Tex.App.\u2013Houston [1st Dist.] 2005, pet. ref\u2019d); Munoz v. State, 29 S.W.3d 205, 209\n(Tex.App.\u2014Amarillo 2000, no pet.).\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 A conviction\nmay not be had upon the testimony of an accomplice unless that testimony is\ncorroborated by other non-accomplice witness evidence that tends to connect the\ndefendant to the crime.\u00a0 Tex. Code Crim. Proc. Ann. art. 38.14\n(West 2005).\u00a0 \u201cAn accomplice is someone\nwho participates with the defendant before, during, or after the commission of\na crime and acts with the required culpable mental state.\u201d\u00a0 Druery\nv. State, 225 S.W.3d 491, 498 (Tex.Crim.App.), cert. denied, 552 U.S. 1028, 128 S.Ct. 627, 169 L.Ed.2d 404 (2007);\nsee also Paredes v. State, 129 S.W.3d\n530, 536 (Tex.Crim.App. 2004).\u00a0 This\nparticipation must include an affirmative act in promotion of the commission of\nthe offense with which the defendant is charged.\u00a0 See\nDruery, 225 S.W.3d at 498; Paredes,\n129 S.W.3d at 536.\u00a0 A witness is not an\naccomplice as a matter of law merely because the witness knew of the offense\nand did not disclose it, or even if the witness concealed the offense.\u00a0 See\nDruery, 225 S.W.3d at 498.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 When the\nevidence is clear and shows that there is no doubt that a witness is an\naccomplice as a matter of law, the trial court is required to instruct the jury\naccordingly.\u00a0 Smith, 332 S.W.3d at 439.\u00a0 \u201cA\nwitness who is indicted for the same offense or a lesser-included offense as\nthe accused is an accomplice as a matter of law.\u201d\u00a0 Smith\nv. State, 332 S.W.3d 425, 439 (Tex.Crim.App. 2011).\u00a0 Thus, if the participant witness has been\ncharged with the offense or with a lesser-included offense, the trial court\nshould instruct the jury that the witness is an accomplice as a matter of\nlaw.\u00a0 Druery,\n225 S.W.3d at 498.\u00a0 When the evidence is\nconflicting regarding a witness\u2019s status as an accomplice, the trial court may\ninstruct the jury to determine the witness\u2019s status as a fact issue.\u00a0 Smith,\n332 S.W.3d at 439-40.\u00a0 When the evidence\nis clear and shows that a witness is not an accomplice, the trial court is not\nrequired to provide an accomplice-witness instruction. \u00a0Smith,\n332 S.W.3d at 440.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 An immunity\nagreement is directly relevant to determining whether a witness is an\naccomplice as a matter of law.\u00a0 Jones v. State, 195 S.W.3d 279, 290 n.12\n(Tex.App.\u2013Fort Worth 2006), aff\u2019d,\n235 S.W.3d 783 (Tex.Crim.App. 2007).\u00a0 However,\nthe grant of transactional immunity to a witness does not automatically render\nthe witness an accomplice as a matter of law.\u00a0\nSee Moulton v. State, 508 S.W.2d\n833, 836 (Tex.Crim.App. 1974); Jester v.\nState, 62 S.W.3d 851, 855 (Tex.App.\u2013Texarkana 2001, pet ref\u2019d); Jarnigan v. State, 57 S.W.3d 76, 91\n(Tex.App.\u2013Houston [14th Dist.] 2001, pet ref\u2019d).\nJury Charge Error\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 We commence\nour analysis by examining Issue Six relating to the alleged jury-charge\nerror.\u00a0 It is undisputed that Richard\nHamm and Jacob Crum were clearly accomplices as a matter of law.\u00a0 The issues to be resolved are whether the patron\nwitnesses, dancer witnesses (other than Gurrola), and Cisneros were accomplices\nas a matter of law and whether the trial court was required to instruct the\njury that they were accomplices as a matter of law.\u00a0 Appellant contends that all of these\nwitnesses were accomplices as a matter of law to the charged offenses.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 We first\ndetermine whether a witness was an accomplice to the distinct offenses alleged\nin each count of Appellant\u2019s indictment.\u00a0\nA conviction for aggravated promotion of prostitution as alleged in\nCount I may be had upon the uncorroborated testimony of a party to the offense.\u00a0 Tex. Penal\nCode Ann. \u00a7 43.06(d) (West 2011); Taylor,\n548 S.W.2d at 723.\u00a0 Consequently,\nAppellant cannot show that the trial court erred by failing to include\naccomplice-witness instructions regarding any witness as to Count I.\u00a0 In fact, the trial court erred by failing to\nexclude Count I from the accomplice-witness instruction submitted regarding\nHamm and Crum.\u00a0 This portion of Appellant\u2019s\nsixth issue is overruled.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Although\nCisneros was aware of prostitution activities occurring within the private\nrooms at the Naked Harem, had informed Appellant and Woodall that prostitution\nwas occurring within the private rooms, and surreptitiously recorded the\nprostitution activities, there is no evidence that Cisneros encouraged\nprostitution.\u00a0 Nor does the record show\nor suggest that Cisneros knew that Gurrola was dancing at the Naked Harem or\nwas underage.\u00a0 Moreover, Hamm\u2019s destruction\nof a video showing Pinedo dancing at the club did not render Cisneros an\naccomplice as a matter of law to Appellant\u2019s unlawful hiring of Pinedo to dance\ntopless and nude at the club.\u00a0 See Druery, 225 S.W.3d at 498 (a witness\nis not an accomplice as a matter of law simply because he knew of the offense\nand did not disclose it, or even if he concealed it).\u00a0 As a result, Appellant has failed to show\nthat Cisneros was susceptible to prosecution for any of the offenses for which\nAppellant was charged or that Cisneros in any way promoted, assisted, or had\nany specific intent to aid Appellant in the commission of those offenses.\u00a0 That Cisneros was granted transactional\nimmunity from prosecution for a different offense than that with which\nAppellant was charged does not transform him into an accomplice witness.\u00a0 See\nMoulton, 508 S.W.2d at 836; Jester,\n62 S.W.3d at 855; Jarnigan, 57 S.W.3d\nat 91. \u00a0Consequently, Cisneros was not an accomplice witness\nas a matter of law to Counts II, III, and IV.\u00a0\nSee Druery, 225 S.W.3d at 498.\u00a0 In fact, because Cisneros was not an\naccomplice as a matter of law, his testimony could be used to corroborate\nHamm\u2019s and Crum\u2019s accomplice-witness testimony as to these counts.\u00a0 Tex.\nCode \u00a0Crim. Proc. Ann. art. 38.14\n(West 2005).\u00a0 Appellant has failed to\nshow that Cisneros was an accomplice as a matter of law to any of the offenses\nfor which she was charged and, as a result, has failed to show that the trial\ncourt committed error when it did not instruct the jury that Cisneros was an\naccomplice witness as to Counts II, III, and IV.\u00a0 We overrule these portions of Issue Six.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The underage-dancer\nwitnesses identified in Count III (Pinedo) and Count IV (Gurrola) of\nAppellant\u2019s indictment were not susceptible to prosecution for employment\nharmful to children and cannot be considered accomplices to Appellant\u2019s\ncommission of those offenses.\u00a0 The clear\nintent of Texas Penal Code, section 43.251, which comprises the\nemployment-harmful-to-children statute, is to prevent the exploitation of\nchildren under the age of 18 years in the adult-entertainment industry.\u00a0 Tex.\nPenal Code Ann. \u00a7 43.251 (West 2011).\u00a0\nSection 43.251 implicitly mandates that a child\u2019s \u201cconsent\u201d to\nemployment in a sexually-oriented commercial activity or in any place of\nbusiness permitting, requesting, or requiring a child to work nude or topless\nis no defense to prosecution thereunder, as the child\u2019s consent to such\nemployment is not legally operative.\u00a0 Cf. Scoggan v. State, 799 S.W.2d 679, 681\n(Tex.Crim.App. 1990); Tyrone v. State,\n854 S.W.2d 153, 155-56 (Tex.App.\u2013Fort Worth 1993, pet. ref\u2019d) (cases explaining\nthat a child may not provide legally-operative consent to sexual intercourse;\nbecause the child may never be an accomplice to the rape of the child, the\nchild-victim\u2019s uncorroborated testimony can support a defendant\u2019s conviction\nfor statutory rape).\u00a0 Pinedo and Gurrola\ncannot be accomplices under section 43.251.\u00a0\nIn fact, their testimony could be used to corroborate Hamm\u2019s and Crum\u2019s\naccomplice-witness testimony as to Counts III and IV, respectively.\u00a0 Thus, the trial court did not err when it\nfailed to instruct the jury that Pinedo and Gurrola were accomplices as a matter\nof law as to Counts III and IV, respectively.\u00a0\nWe overrule this portion of Issue Six.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Although other\nnon-underage dancers and club patrons who testified at trial acknowledged\nengaging in acts of prostitution at the Naked Harem, there is no evidence that such\nprostitution involved either Pinedo or Gurrola, and none of the testimony from\nthose witnesses suggested that they aided, encouraged, or promoted Appellant\u2019s\nhiring or allowing Pinedo or Gurrola to work at the Naked Harem.\u00a0 No evidence suggested that any of the testifying\nnon-underage dancer- or patron-witnesses were susceptible to prosecution for\nthe offenses of employment harmful to children or engaging in organized\ncriminal activity by employment harmful to children.\u00a0 Because Appellant has failed to show that any\nof these witnesses were accomplices as a matter of law as to Counts III and IV\nrespectively, we overrule this portion of Issue Six.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The State\nagrees that the dancer- and patron-witnesses were susceptible to prosecution\nfor prostitution but does not concede that prostitution is a lesser-included\noffense of the offenses of aggravated promotion of prostitution and engaging in\norganized criminal activity by aggravated promotion of prostitution (Count II).\u00a0 The State does agree, however, that if the\ndancers and patrons were accomplices as a matter of law, the trial court erred\nwhen it failed to instruct the jury regarding Count II, which charged Appellant\nwith engaging in organized criminal activity by aggravated promotion of\nprostitution.\u00a0 In conducting a harm\nanalysis of a failure to properly provide an accomplice-witness instruction, the\nTexas Court of Criminal Appeals has instructed that we are to consider the\npurpose and intended effect of article 38.14.\u00a0\nTex. Code Crim. Proc. Ann.\nart. 38.14 (West 2005); see Herron v.\nState, 86 S.W.3d 621, 631-32 (Tex.Crim.App. 2002) (the instruction merely\ninforms the jury that accomplice-witness testimony cannot be used absent\nnon-accomplice evidence connecting defendant to the offense, and once it is\ndetermined that non-accomplice evidence exists, the instruction\u2019s purpose is\nfulfilled; non-accomplice evidence can render a trial court\u2019s failure to\ninstruct harmless by fulfilling the purpose the instruction is designed to\nserve.); see also Cocke v. State, 201\nS.W.3d 744, 747 (Tex.Crim.App. 2006), cert.\ndenied, 549 U.S. 1287, 127 S.Ct. 1832, 167 L.Ed.2d 332 (2007).\u00a0 Because Appellant failed to object to the\ntrial court\u2019s charge or to request any accomplice-witness-as-a-matter-of-law\ninstruction, she must show egregious harm.\u00a0\nSee Herron, 86 S.W.3d at\n631-34.\u00a0 Under the egregious harm\nstandard, the omission of an accomplice-witness instruction is generally\nharmless unless the corroborating non-accomplice evidence is \u201cso unconvincing\nin fact as to render the State\u2019s overall case for conviction clearly and\nsignificantly less persuasive.\u201d\u00a0 See Herron, 86 S.W.3d at 632, quoting Saunders v. State, 817 S.W.2d\n688, 692 (Tex.Crim.App. 1991).\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 When we\nreview the sufficiency of corroborating evidence under article 38.14, we must\neliminate from consideration any testimony by an accomplice witness and then\nexamine the remaining evidence to determine whether there is any evidence that\ntends to connect the defendant to the commission of the offense.\u00a0 Tex.\nCode Crim. Proc. Ann. art. 38.14; see\nMalone v. State, 253 S.W.3d 253, 257 (Tex.Crim.App. 2008).\u00a0 The non-accomplice evidence need not\ncorroborate the accomplice testimony as to every element of the charged\noffense.\u00a0 See Joubert v. State, 235 S.W.3d 729, 731 (Tex.Crim.App. 2007) (no\nrequirement that non-accomplice evidence corroborate defendant\u2019s connection to\na specific element that elevates an offense from murder to capital murder).\u00a0 Nor must the corroborating evidence by itself\nprove the defendant\u2019s guilt beyond a reasonable doubt.\u00a0 Malone,\n253 S.W.3d at 257.\u00a0 Rather, all that is\nrequired is that some non-accomplice corroborating evidence links the accused\nin some way to the offense and shows that \u201crational jurors could conclude that\nthis evidence sufficiently tended to connect [the accused] to the\noffense.\u201d\u00a0 See Malone, 253 S.W.3d at 257, quoting\nHernandez v. State, 939 S.W.2d 173, 179 (Tex.Crim.App. 1997).\u00a0 In determining the sufficiency of the\ncorroborating evidence, we view the non-accomplice testimony in a light most\nfavorable to the verdict.\u00a0 Hernandez, 939 S.W.2d at 179.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The\ntestimony of Hamm, Crum, the dancers, and the patrons is sufficient to\nestablish that the Naked Harem was a \u201cprostitution enterprise.\u201d\u00a0 Tex.\nPenal Code Ann. \u00a7 43.04(a)\n(West 2011); Taylor, 548 S.W.2d at\n723.\u00a0 We also find that the corroborating\nnon-accomplice evidence is sufficient to show that Appellant owned, invested\nin, financed, controlled, supervised, or managed the prostitution enterprise at\nthe Naked Harem.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In a\ntelevision interview, Appellant acknowledged owning and operating the Naked\nHarem along with Woodall and stated that she would do anything to see that the\nNaked Harem made money.\u00a0 In her\ndeposition, Appellant acknowledged that she and Woodall had personally hired an\nunderage dancer, Pinedo, to work at the Naked Harem.\u00a0 Ledgers detailing the Naked Harem\u2019s revenues\nwere found in the trash at Appellant\u2019s and Woodall\u2019s residence and a police\ndepartment financial analyst testified that the Naked Harem had processed more\nthan $850,000 in credit-card purchases (excluding cash transactions) at the\nclub between 2001 and 2003.\u00a0 The physical\nevidence at the Naked Harem, including the video showing Appellant watching\ndancers perform a sex show on the main stage of the club, the numerous used\ncondoms and condom wrappers found in the private rooms of the club, and the\ntraps that were installed to filter the flushed condoms from the club\u2019s sewer\nlines suggest that Appellant, as an owner and operator of the Naked Harem was\naware of the illicit sexual activity occurring there.\u00a0 Cisneros\u2019 testimony showed that Appellant and\nWoodall, if they did not already know, were informed that sex acts were\noccurring in the Naked Harem, that Appellant was aware of the condoms in the\nprivate rooms and of the other objective indicators of prostitution in the\nclub, and that after a police raid, Appellant observed Hamm destroy a video\nrecording of 15-year-old Pinedo dancing on stage at the club.\u00a0 By camera, Appellant monitored activities at\nthe Naked Harem from her office and home and recorded the club\u2019s telephones to\nmonitor whether the employees were communicating with police but directed\nCisneros not to install cameras in the private rooms to prevent the\nblackmailing of the patrons who used those rooms.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 From this\nevidence, the jury could have inferred that Appellant was actually aware of and\npermitted the prostitution to occur at the Naked Harem.\u00a0 When viewed in the light most favorable to\nthe verdict, this non-accomplice evidence tended to connect Appellant to the prostitution\nenterprise within the Naked Harem in that it tended to show that she owned,\ninvested in, financed, supervised, or managed the Naked Harem where the\nprostitution was occurring. \u00a0See Pardue, 252 S.W.3d at 701-04 (non-accomplice\nevidence that the accused managed and operated a game room where illegal\ngambling activities occurred and gave instructions to game-room employees was\nsufficient to corroborate accomplice-witness testimony describing the illegal\nactivities); see also Williams v. State,\n47 S.W.3d 626, 631 (Tex.App.\u2013Waco 2001, pet. ref\u2019d) (accused\u2019s out-of-court\nstatements can be a source of non-accomplice evidence); Medina v. State, 7 S.W.3d 633, 642-43 (Tex.Crim.App. 1999), cert. denied, 529 U.S. 1102, 120 S.Ct.\n1840, 146 L.Ed.2d 782 (2000) (accused\u2019s\nveiled admissions sufficient to connect accused to offense).\u00a0 In light of the corroborating non-accomplice\nevidence tending to connect Appellant to these offenses, the trial court\u2019s\nerror in failing to properly instruct the jury on the accomplice-witness rule\nwas harmless as to Count II.\u00a0 See Herron, 86 S.W.3d at 631-34; Medina, 7 S.W.3d at 641-43; Williams, 47 S.W.3d at 631-32.\u00a0 This portion of Issue Six is overruled.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 As to Counts\nIII and IV, wherein Appellant was charged with engaging in organized criminal\nactivity by employment harmful to children, the non-accomplice corroborating testimony\nof Pinedo and Gurrola that each was underage and dancing nude and topless at\nthe Naked Harem is sufficient to corroborate the testimony of Hamm and Crum.\u00a0 Hamm\u2019s and Crum\u2019s accomplice testimony was\nsufficient to establish that Appellant had committed the offense of employment\nharmful to children.\u00a0 Tex. Penal Code Ann. \u00a7 43.251(b)(2) (West\n2011).\u00a0 The non-accomplice evidence\nshowed that Appellant encouraged underage Gurrola to continue dancing at the Naked\nHarem because Gurrola was going to make a lot of money.\u00a0 Appellant also admitted hiring Pinedo and was\npresent during the destruction of the video which showed Appellant watching\nPinedo working at the Naked Harem.\u00a0 This\nnon-accomplice evidence, when combined with the other non-accomplice evidence connecting\nAppellant to the ownership, operation, supervision, and management of the Naked\nHarem, tended to connect Appellant to the offenses set forth in Counts III and\nIV.\u00a0 See\nMedina, 7 S.W.3d at 642-43; Williams,\n47 S.W.3d at 631; see also Guevara v.\nState, 152 S.W.3d 45, 50 (Tex.Crim.App. 2004) (an attempt to conceal\nincriminating evidence is probative of wrongful conduct and is a circumstance\nof guilt).\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Because the\nnon-accomplice evidence was ample and more than sufficient to connect Appellant\nto all of the charged offenses in Counts I through IV, the trial court\u2019s error in\nfailing to instruct the jury that any of the complained-of witnesses were accomplices\nto a particular offense was harmless.\u00a0 We\noverrule Issue Six in its entirety.\nSufficiency of the Corroborating Evidence\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 We next\naddress Issues Two, Three, Four, and Five, in which Appellant complains that\nthe non-accomplice evidence was insufficient to corroborate the testimony of Cisneros\nand the State\u2019s dancer- and patron-witnesses as to each respective count in the\nindictment.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Appellant\u2019s\nsecond issue challenges the sufficiency of the non-accomplice evidence to\ncorroborate the accomplice-witness testimony regarding Count I. \u00a0Again, because a conviction for aggravated\npromotion of prostitution as charged in Count I may be supported by the\nuncorroborated testimony of a party to the offense, Appellant\u2019s second issue is\noverruled.\u00a0 Tex. Penal Code Ann. \u00a7 43.06(d) (West 2011); Taylor, 548 S.W.2d at 723-24.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Issues Three,\nFour, and Five raise the same sufficiency of non-accomplice evidence challenges\nregarding Counts II, III, and IV, respectively, as raised in Issue Two. \u00a0As we addressed in Issue Six, Appellant\u2019s own\nstatements and testimony, the testimony of Pinedo, Gurrola, and Cisneros, and\nthe physical evidence presented at trial, showed her ownership and involvement\nin and at the Naked Harem, which was shown to be a prostitution enterprise, and\ntended to connect Appellant to each of the charged offenses in Counts II, III,\nand IV. \u00a0The jury\u2019s implicit rejection of\nAppellant\u2019s defensive postures of plausible deniability and ignorance was\nreasonable in light of the sufficient non-accomplice-witness evidence which\npermitted the jury to reasonably infer and conclude that Appellant knew of the\nprostitution activity and intended to work together with co-owner Woodall and\nthe Naked Harem\u2019s managers to promote the prostitution activities and the\nemployment of underage topless and nude dancers, Pinedo and Gurrola.\u00a0 Issues Three, Four, and Five are overruled.\nLegal-Sufficiency Challenge\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Issues Seven\nand Eight challenge the legal sufficiency of the evidence to support Appellant\u2019s\nconvictions for engaging in organized criminal activity by aggravated promotion\nof prostitution (Count II) and aggravated promotion of prostitution (Count I),\nrespectively.\u00a0 We review the legal\nsufficiency of the evidence to support a conviction in the light most favorable\nto the verdict, and reverse the conviction only if no rational trier of fact\ncould have found that the State had met its burden of proving each element of\nthe offense beyond a reasonable doubt.\u00a0 Jackson v. Virginia, 443 U.S. 307, 99\nS.Ct. 2781, 61 L.Ed.2d 560 (1979).\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 As we have\ndetermined that the non-accomplice witness evidence was sufficient to connect\nAppellant to the offenses alleged in Counts I and II of the indictment, we\nreview all of the evidence, including the accomplice-witness testimony of Hamm\nand Crum and the non-accomplice witnesses, to determine the sufficiency of the\nevidence to support Appellant\u2019s convictions for Counts I and II.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 That\nevidence, including Cisneros\u2019 surreptitiously recorded video, demonstrated that\nnumerous dancers were performing acts of prostitution in the private rooms at\nthe Naked Harem, and that the Naked Harem constituted a prostitution enterprise.\u00a0 Appellant and Woodall owned and operated the\nprostitution enterprise and, although they denied to Cisneros that prostitution\nwas occurring, the collective evidence showed that Appellant knew and had been\ntold about the prostitution, that Appellant viewed prostitution occurring\nfirsthand between Crum and the two dancers whom he paid to have sex, that\nspecific discussions occurred between Appellant, Woodall, Crum, and Hamm about prostitution\nand sex occurring in the private rooms, and that Appellant and Woodall had established\nthe \u201cwhole process\u201d for prostitution to occur within the Naked Harem. \u00a0Evidence similar to the quality and quantity\npresent in this record has been held sufficient to support the convictions of owner-operators\nof adult entertainment business for aggravated promotion of prostitution. \u00a0See,\ne.g., Armentrout, 645 S.W.2d at 299-302; Ringer v. State, 577 S.W.2d 711, 713-16 (Tex.Crim.App. 1979); Taylor, 548 S.W.2d at 723-25; Smithwick v. State, 762 S.W.2d 232, 233-34\n(Tex.App.\u2014Austin 1988, pet. ref\u2019d); Brownwell\nv. State, 644 S.W.2d 862, 863-65 (Tex.App.\u2014Tyler 1982, no pet.).\u00a0 We find the evidence is sufficient to permit\na jury to infer that Appellant was in the business of promoting prostitution.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 With regard\nto the requirement that the State prove that Appellant committed the predicate\noffense with the intent to participate in a combination with Woodall and the\nmanagers of the Naked Harem, the quality and quantity of the evidence in the\nrecord before us has likewise been held sufficient to prove the combination\nelement of the engaging statute.\u00a0 See Pardue, 252 S.W.3d at 699-704.\u00a0 Evidence that a defendant was the leader of\nan organization that functioned as the alleged combination and was involved in\nplanning the organization\u2019s activities is sufficient to prove that the\ndefendant encouraged, directed, aided, or attempted to aid in the commission of\nthe predicate offense of the combination and is sufficient to support a\nconviction for engaging in organized criminal activity.\u00a0 See\nOtto v. State, 95 S.W.3d 282, 284-85 (Tex.Crim.App. 2003).\u00a0 While Appellant emphasizes that there was no\nevidence of a formal agreement between Appellant, her co-owner Woodall, and\nmanagers Hamm, Crum, Zepeda, and Brooks to run a prostitution enterprise,\ncircumstantial evidence may be used to prove the state of mind required to\nsupport Appellant\u2019s conviction.\u00a0 See Munoz, 29 S.W.3d at 209.\u00a0 Such circumstantial evidence may also be used\nto prove the existence of an agreement to work together in continuing criminal\nactivities.\u00a0 See Munoz, 29 S.W.3d at 209; Hart,\n89 S.W.3d at 64.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Sufficient\ncircumstantial evidence showed that prostitution was occurring at the Naked\nHarem when Appellant, Woodall, Crum, Hamm, Zepeda, and Brooks were managing and\noperating the club.\u00a0 From all of the\ndirect and circumstantial evidence of Appellant\u2019s knowledge of, and together\nwith the named combination members, promotion of prostitution at the Naked\nHarem, the jury was rationally justified in rejecting Appellant\u2019s claims of\nignorance that prostitution was occurring at the club and was not required to\naccept Appellant\u2019s defense.\u00a0 See Agripino v. State, 217 S.W.3d 707,\n716 (Tex.App.\u2013El Paso 2007, no pet.).\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Viewed in a\nlight most favorable to the verdict, we find it was reasonable for the jury to\nhave found beyond a reasonable doubt that Appellant was engaged in the\naggravated promotion of prostitution and that Appellant agreed to work in\nconjunction with Woodall, Crum, Hamm, Zepeda, and Brooks as set forth in the\nindictment to run a prostitution enterprise. \u00a0Issues Seven and Eight are overruled.\nAlleged\nTrial Court Error\nAdmission of Video Evidence\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In Issue Nine, Appellant contends\nthe trial court committed harmful error when it allowed the State to introduce\nCisneros\u2019 silent video recordings of sexual acts occurring between dancers and\npatrons in a private room at the Naked Harem.\u00a0\nAppellant specifically contends that she did not \u201copen the door\u201d to the\nintroduction of the video recordings, that the recordings were not relevant and\nwere unfairly prejudicial, and that admission of the video recordings was\nharmful.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 During or\nprior to her first trial (which resulted in a mistrial), Appellant had filed a\n\u201cmotion in limine\u201d asking that the State approach the bench before mentioning\nor offering into evidence the surreptitious video recordings of sexual acts\noccurring at the Naked Harem.[5]\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 At a\npretrial hearing held in advance of Appellant\u2019s retrial, the trial court noted\nthat it was granting Appellant\u2019s motion to suppress \u201cthe electrician video.\u201d\u00a0 At a subsequent pretrial hearing, the State indicated\nits intent to file a motion seeking the trial court\u2019s reconsideration of its ruling\nbased on an alleged absence of privacy interest by Appellant in the private\nrooms of the Naked Harem that were open to the public, but no such motion was\nfiled.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 During\nAppellant\u2019s opening statement at the second trial, defense counsel proffered\nthat if acts of prostitution were occurring in the Naked Harem, the dancers\nwere receiving the money directly and Appellant and the club did not enjoy the\nprofits of the prostitution activity.\u00a0 On\ncross-examination, after Hamm had testified on direct examination about the\nsexual activity in the private rooms at the Naked Harem as well as Appellant\u2019s\nawareness and knowledge thereof, defense counsel elicited testimony from Hamm\nthat when a patron purchased a two-song dance in a private room, sex was not\nguaranteed, that the dancers could negotiate additional pricing for sex, and\nthat the club\u2019s cut of the two-song minimum fee provided access to the private\nroom.\u00a0 Hamm also testified that Appellant\nhad informed him that the club\u2019s attorney had said \u201cthat a patron could\nmasturbate as long as a dancer wasn\u2019t being touched.\u201d\u00a0 Defense counsel attempted to elicit testimony\nfrom Hamm that the dancers would not be having sex for only $80 of their portion\nof the private dance fee and that some additional negotiation between the\ndancer and patron would have occurred when the trial court sustained the\nState\u2019s speculation objection:\nDefense Counsel:\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 I\nmean, what I\u2019m saying is, if there\u2019s 130 or $40.00 [sic] involved, and they\u2019re\ngoing to get 80 \u2013 \n\u00a0\n.\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0 .\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 --it\nwould seem that there would be some negotiation between them, would it not?\nThe State:\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Object to speculation, Your\nHonor.\nThe Court:\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Sustained.\n\u00a0\nThe State contended that Appellant had\n\u201copened the door\u201d to allow the admission of Cisneros\u2019 video recordings of sex\nacts that occurred in one of the Naked Harem\u2019s private rooms into evidence to\nrebut counsel\u2019s implications that the dancers were negotiating and charging\nextra for sex in the private rooms.\u00a0 \u00a0Defense counsel countered that because the\nrecordings were silent, it was impossible to determine whether negotiations or\npayment occurred before or after the dancer and patron entered the private\nroom.\u00a0 The trial court stated that it was\ninclined to believe that if the video recordings showed no exchange of money,\nthe video records would be relevant to rebut defense counsel\u2019s suggestions that\nthe dancers were negotiating additional money for sex, and the court further\nnoted that while the video recordings may fall short of conclusively proving\nthat no further negotiation or exchange of money occurred, absolute proof was\nunnecessary before the recorded evidence would be relevant in proving the fact.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Defense\ncounsel again raised the possibility that dancers were negotiating extra fees\nfor sex when cross-examining Crum, who testified that he assumed that the\ndancers and patrons were always having sex in the private rooms, that because he\nwasn\u2019t present in the private rooms, he could not be certain that every\nencounter resulted in sex, and agreed that some customers complained that they\ndid not get what they expected.\u00a0 Crum\nalso testified that upon cleaning the private rooms, he could tell that the\ncondoms had been used but did not know if the condoms containing semen resulted\nfrom sexual contact or from masturbation. \u00a0Crum explained under cross-examination that\nWoodall had informed him that a patron could legally masturbate in a private\nroom as long as he was not touching the dancer.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Cisneros\ntestified on direct examination that Appellant and Woodall had asked him to\ninstall cameras in all areas of the club except the private rooms and also\nasked Cisneros to check for hidden cameras in the private rooms that Appellant\nand Woodall believed police may have installed.\u00a0\nWithout objection, Cisneros also testified that he had installed a\ncamera in one of the private rooms without being requested to do so by\nAppellant and Woodall and had made video recordings of activity occurring\nbetween dancers and patrons in that room between April 12 and April 16, 2001,\nas well as other times.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Defense\ncounsel objected when the State offered the Cisneros video recordings into\nevidence, arguing that the trial court had already ruled the recordings were\ninadmissible, and that he had not opened the door to admission of the silent recordings\nthrough the eliciting of cross-examination testimony about \u201cnegotiations\u201d and\nused condoms.\u00a0 The trial court overruled\ndefense counsel\u2019s objections, noting that the \u201cnegotiation issue, the condom\nissue and whether or not sex was the norm . . . are three issues that . . . I\nthink opened the door.\u201d\u00a0 The video was\nadmitted into evidence and Cisneros testified that the video showed the dancers\nand patrons having sex in the private room.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0We do not disturb a trial court\u2019s decision to\nadmit evidence absent an abuse of discretion.\u00a0\nSee Ramos v. State, 245 S.W.3d\n410, 417-18 (Tex.Crim.App. 2008); Winegarner\nv. State 235 S.W.3d 787, 790 (Tex.Crim.App. 2007); Torres v. State, 71 S.W.3d 758, 760 (Tex.Crim.App. 2002); Flores v. State, 299 S.W.3d 843, 856\n(Tex.App.\u2013El Paso 2009, pet. ref\u2019d).\u00a0 When\nthe trial court\u2019s ruling is within the zone of reasonable disagreement, is\nreasonably supported by the record, and is correct under any theory of law\napplicable to the case, it must be upheld.\u00a0\nState v. White, 306 S.W.3d\n753, 757 n.10 (Tex.Crim.App. 2010); Ramos,\n245 S.W.3d at 418; Torres, 71 S.W.3d\nat 760; Flores, 299 S.W.3d at 856.\u00a0 This is true even when the trial court gives\nthe wrong reason for its decision.\u00a0 Romero v. State, 800 S.W.2d 539, 543 (Tex.Crim.App.\n1990).\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Evidence\nthat is otherwise inadmissible may become admissible if a party \u201copens the\ndoor\u201d to such evidence.\u00a0 Williams v. State, 301 S.W.3d 675, 687\n(Tex.Crim.App. 2009), cert. denied, ___\nU.S. ___, 130 S.Ct. 3411, 177 L.Ed.2d 326 (2010).\u00a0 Appellant opened the door to the admission of\nCisneros\u2019 video by her opening statement, in which she proffered a defensive\ntheory that if the dancers were committing prostitution, Appellant and the\nNaked Harem did not realize profits from that activity because the dancers were\nreceiving the money directly from the patrons.\u00a0\nSee Bass v. State, 270 S.W.3d\n557, 563 (Tex.Crim.App. 2008) (defendant\u2019s opening statement may open the door\nto otherwise inadmissible evidence to rebut a defensive theory presented in\nthat opening statement); see also Gaytan\nv. State, 331 S.W.3d 218, 225 (Tex.App.\u2013Austin 2011, pet. ref\u2019d) (if\nopening statement presents a defensive theory, it opens the door to rebuttal\nevidence).\u00a0 The video recordings show\nthat no exchange of money occurred between the dancers and patrons in the\nprivate room in addition to the patron\u2019s up-front payment of the fee to the\nclub to gain admission to the private room, and was directly relevant in\nrebutting Appellant\u2019s defensive theory proffered during her opening statement.\u00a0 See\nalso Stewart v. State, 129 S.W.3d 93, 96 (Tex.Crim.App. 2004) (evidence\nneed only provide small nudge toward proving or disproving a fact).\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Appellant\nalso opened the door to the admission of Cisneros\u2019 video recordings through her\ncross-examination of the State\u2019s witnesses by suggesting that the dancers were\nnegotiating their own price for sex in the private room in addition to the\nNaked Harem\u2019s fee for the \u201cprivate dance,\u201d and by suggesting that the used\ncondoms and semen in the private room were the result of patrons masturbating\nin the private room. \u00a0See Wells v. State, 319 S.W.3d 82, 94\n(Tex.App.\u2013San Antonio 2010, pet. ref\u2019d); Houston\nv. State, 208 S.W.3d 585, 591 (Tex.App.\u2013Austin 2006, no pet.) (defense\ncounsel\u2019s cross-examination of a State\u2019s witness that leaves a false impression\nas to some fact may open the door to admission of otherwise inadmissible\nevidence to correct the false impression).\u00a0\nAppellant\u2019s cross-examination created the impression that sex was not the\nnorm when a dancer and a patron entered a private room, that any dancers who\nwere committing acts of prostitution were negotiating and charging extra fees\nfor the activity, and that used condoms and semen that were present in the private\nrooms were the result of patrons masturbating.\u00a0\nSuch implications authorized the State to reply by seeking the admission\nof Cisneros\u2019 video recordings which showed no exchange of money between the\ndancers and patrons in the private room either before, during, or after they\nhad sex, rather than patrons merely masturbating.\u00a0 Appellant\u2019s cross-examination of the State\u2019s\nwitnesses also elicited speculation about what may have been occurring within\nthe private rooms and opened the door to admit the video recordings for the\npurpose of showing exactly what was happening between dancers and patrons\ntherein.\u00a0 See Cameron v. State, 988 S.W.2d 835, 847 (Tex.App.\u2013San Antonio\n1999, pet. ref\u2019d) (defendant\u2019s testimony regarding events regarding car bombing\nopened the door to admission of video recording showing the car bombing, even\nthough the trial court had previously ruled the recording to be inadmissible).\u00a0 Consequently, Appellant has failed to show\nthat the trial court erred or abused its discretion by determining that she\nopened the door to the admission of the Cisneros video recordings.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 We disagree\nwith Appellant\u2019s contention that the video recordings showing sex acts between\ndancers and patrons were not relevant.\u00a0 Evidence\nis relevant if it tends to make the existence of any consequential fact more or\nless probable than it is without the evidence. \u00a0Tex. R.\nEvid. 401; Goldberg v. State,\n95 S.W.3d 345, 366 (Tex.App.\u2013Houston [1st Dist.] 2002, pet. ref\u2019d), cert. denied, 540 U.S. 1190, 124 S.Ct.\n1436, 158 L.Ed.2d 99 (2004).\u00a0 To be\nrelevant in proving a fact, evidence need not prove the fact but it is\nsufficient if the evidence provides a small nudge toward proving or disproving some\nfact of consequence. \u00a0Kirsch v. State, 306 S.W.3d 738, 743\n(Tex.Crim.App. 2010), citing Stewart v.\nState, 129 S.W.3d 93, 96 (Tex.Crim.App. 2004).\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The video\nalone need not show that the Naked Harem was a prostitution enterprise before\nit could be found relevant.\u00a0 See Stewart, 129 S.W.3d at 96.\u00a0 Hamm and Crum each testified that dancers and\npatrons were not permitted to enter private rooms until the patron had paid the\nrequired fee.\u00a0 The video recordings about\nwhich Appellant complains show, as Cisneros described, dancers and patrons\nhaving sex in the private room.\u00a0 The\nvideo thus tended to show that the Naked Harem was a prostitution enterprise\nand was relevant to the charged offenses.\u00a0\nSee Tex. R. Evid. 401; Tex.\nPenal Code Ann. 43.04(a) (West 2011).\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Appellant\nattempts to argue on appeal that probative value of the video recordings were substantially\noutweighed by a danger of unfair prejudice under Rule 403. \u00a0Tex. R.\nEvid. 403.\u00a0 Appellant raised a\nRule 403 objection in her motion in limine in her first trial but sought only\nto have the State approach the bench before mentioning or offering the video\nrecordings in this trial.\u00a0 A motion in\nlimine is a preliminary matter which does not preserve any complaints for\nappellate review and, to preserve such complaint, a party must object at the\ntime the complained-of evidence is offered at trial.\u00a0 Tex.\nR. App. P. 33.1(a); see Fuller v.\nState, 253 S.W.3d 220, 232-33 (Tex.Crim.App. 2008), cert. denied, 555 U.S. 1105, 129 S.Ct. 904, 173 L.Ed.2d 120\n(2009).\u00a0 Neither when addressing the\ntrial court about whether Appellant had opened the door to admission of the\nCisneros video recordings nor when the State offered the video recordings into\nevidence did Appellant make any timely or specific Rule 403 or unfair-prejudice\nobjections or obtain any rulings thereon from the trial court.\u00a0 Tex.\nR. App. P. 33.1(a); Swain v. State,\n181 S.W.3d 359, 365 (Tex.Crim.App. 2005), cert.\ndenied, 549 U.S. 861, 127 S.Ct. 145, 166 L.Ed.2d 106 (2006).\u00a0 Thus, Appellant has failed to preserve this\ncomplaint for our review.\u00a0 Moreover, because\nwe find the trial court neither erred nor abused its discretion in admitting\nthe Cisneros video recordings into evidence, we need not conduct a harm\nanalysis.\u00a0 Issue Nine is overruled.\nExclusion of Testimony\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In Issue Ten,\nAppellant complains that the trial court erred by excluding the testimony of Michael\nGibson.\u00a0 We disagree.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 During\ndefense counsel\u2019s cross-examination, Hamm testified, without objection, that\nAppellant had informed him that the attorney for the club had advised that a\npatron could legally masturbate in a private room if there was no contact\nbetween the patron and the dancer.\u00a0 Over\nthe State\u2019s objection, defense counsel elicited essentially the same testimony\nfrom Crum. \u00a0Crum later testified on\nre-direct examination by the State that, in his opinion, condoms were used for\nsex and not for masturbation.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Before the\ndefense rested, and outside the presence of the jury, Appellant proffered the\ntestimony of attorney Gibson, who testified that he had advised Appellant and\nWoodall that if a patron masturbated in a private room at the Naked Harem\nduring a private dance, the offense of public lewdness would not have been\ncommitted \u201cas long as it was not done for commercial pay.\u201d\u00a0 Defense counsel then sought to call Gibson\n\u201cfor the masturbation issue, what he had advised them,\u201d but proffered no theory\nof the relevance of such testimony.\u00a0 Defense\ncounsel did not respond to the trial court\u2019s inquiry about how Gibson\u2019s\n\u201cmasturbation\u201d testimony was relevant to the charge of prostitution, and the\ntrial court sustained the State\u2019s relevancy objection to Gibson\u2019s testimony.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 On appeal,\nAppellant contends that Gibson\u2019s testimony was relevant because it would have\ntended to provide a legitimate reason or explanation for the presence of the\ncondom machine at the Naked Harem as well as to why the discovery of used\ncondoms in the private rooms would not have placed Appellant on notice that the\ndancers and patrons were having sex in the private rooms.\u00a0 According to Appellant, Gibson\u2019s testimony\nwas critical to her defensive theory that she lacked knowledge of prostitution\nin the club and that the exclusion of such testimony both deprived her of her\nright to present a defense and was harmful.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 When a party\nargues one theory of relevance or admissibility at trial and then argues a\ndifferent theory of relevance or admissibility on appeal, no error has been\npreserved.\u00a0 See Johnson v. State, 181 S.W.3d 760, 762-63 (Tex.App.\u2013Waco 2005,\npet. ref\u2019d) (where defendant argued at trial that excluded evidence was\nrelevant and admissible to show previous relationship between defendant and\nvictim but argued on appeal that the evidence was relevant and admissible to\nshow victim was first aggressor, error was not preserved for appellate review).\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Appellant\u2019s\nfailure to proffer any theory of relevance or admissibility regarding Gibson\u2019s\nexcluded testimony at trial does not afford her the opportunity to do so on\nappeal.\u00a0 See Johnson, 181 S.W.3d at 762-63.\u00a0\nAs a consequence, Appellant has failed to preserve this issue for our\nreview.\u00a0 Issue Ten is overruled.\nCONCLUSION\nThe trial court\u2019s judgment is affirmed.\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 GUADALUPE\nRIVERA, Justice\nOctober 17, 2012\n\u00a0\nBefore McClure, C.J., Rivera, J., and Antcliff, J.\n\u00a0\n(Publish)\n\n\n\n\n[1]\nAppellant\u2019s indictment originally included a fourth count of engaging in\norganized criminal activity (Count V), which the State dismissed during\nAppellant\u2019s first trial.\u00a0 After a jury\nwas unable to reach a unanimous verdict in the first trial as to Counts I-IV,\nthe trial court granted a mistrial.\u00a0 The\ncase before us arises from Appellant\u2019s subsequent trial.\n\n\n[2]\nHamm, Crum, and all of the dancers and patron witnesses called by the State\nwere granted transactional immunity from prosecution. \n\n\n[3]\nWe address Appellant\u2019s challenges to this evidence below.\n\u00a0\n\n\n[4]\nMaria Brooks was named as a member of the combination in Counts II through IV\nof Appellant\u2019s indictment.\n\n\n[5]\nAt the same time, Coutta filed a motion to suppress video and audio recordings\nseized by law enforcement.\u00a0 The video\nrecording at issue was not seized by law enforcement but was provided directly\nby Cisneros to the State.\u00a0 Therefore, no\nFourth Amendment issue is presented and Appellant\u2019s suppression motion is\ninapplicable to our consideration and analysis of Appellant\u2019s ninth issue.\n\n\n"} -{"text": "\n669 S.W.2d 388 (1984)\nMelvin Clifford NEESE, Appellant,\nv.\nDorothy Albina June NEESE, Appellee.\nNo. 11-83-267-CV.\nCourt of Appeals of Texas, Eastland.\nMarch 22, 1984.\nRehearing Denied April 12, 1984.\n*389 Beverly Tarpley, Scarborough, Black, Tarpley & Scarborough, Abilene, for appellant.\nDick R. Crownover, Wilson, Newman, Crownover & Wilson, Abilene, for appellee.\nMcCLOUD, Chief Justice.\nDorothy Neese sued her former husband, Melvin Neese, seeking to enforce a divorce decree awarding her a 43.5 percent interest in defendant's nondisability military retirement benefits.\nThe parties were divorced on June 24, 1976. At that time, defendant was retired from the United States Air Force and he was receiving military retirement pay in the gross amount of $461.94 per month. The divorce decree awarded the wife a \"43.5 percent interest in the gross amount of all U.S. Air Force Retirement Benefits.\" Defendant made monthly benefit payments to the plaintiff until July 1981. He stopped making the payments at that time because of his interpretation of the decision by the United States Supreme Court in McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981).[1] Defendant resumed making monthly payments to plaintiff in January 1983 following the enactment of the Uniformed Services Former Spouses' Protection Act, 10 U.S.C. sec. 1408 (1983).[2]\nPlaintiff sought recovery of 43.5 percent of the retirement benefits received by defendant during the 18 month period between July 1981, when payments were stopped, and January 1983, when payments were resumed. The trial court awarded plaintiff a judgment for $4,968.82 in past benefits, 43.5 percent of the gross amount of all future benefits less \"federal employment and income taxes,\"[3] and attorney's fees. By July 1981, defendant's gross retirement pay had increased to $718.00 per month. In calculating the $4,968.82 judgment, the trial court included increases in defendant's gross retirement pay.\n*390 Defendant argues that his former wife is not entitled to share in the post-divorce increases in his retirement pay. We disagree.\nDefendant recognizes that McCarty has no retroactive effect in Texas. See Segrest v. Segrest, 649 S.W.2d 610 (Tex.1983); Ex Parte Welch, 633 S.W.2d 691 (Tex.App.\u0097 Eastland 1982) (original proceeding). He urges that Section 1408(c)(1)[4] of the Uniformed Services Former Spouses' Protection Act required the trial court to treat the \"disposable retired pay\" payable after June 25, 1981, \"in accordance with the law\" of Texas. Defendant contends that under Texas law his former wife cannot share in the retirement benefit increases because the value of the community interest in the retirement benefits was forever fixed at $461.94 per month at the time of their divorce in accordance with Berry v. Berry, 647 S.W.2d 945 (Tex.1983).\nWe will assume, without deciding, that Section 1408(c)(1) is applicable to the present case. We note that the apparent purpose of the \"June 25, 1981\" date in Section 1408(c)(1) is to place the courts in the same position that they were in on June 26, 1981, when McCarty was decided. See S.Rep. No. 97-502, 97th Cong. 2d Sess. 1, 16, reprinted in, 1982 U.S.Code Cong. and Ad.News 1555, 1596, 1611.\nBerry does not control our disposition. In the instant case, the defendant was retired and receiving retirement benefits from the military when the parties were divorced on June 24, 1976. The retirement benefits had matured and were divided by the trial court in the divorce decree. Berry was a post-divorce suit to partition retirement benefits which had not matured at the time of divorce, and were not divided in the divorce decree. The Supreme Court noted that Mr. Berry had continued to work for 12 years after the divorce and that the improved retirement pay resulted from his post-divorce employment. Relying on Cameron v. Cameron, 641 S.W.2d 210 (Tex.1982), Berry held that the post-divorce increases could not be awarded to Mrs. Berry because to do so would invade Mr. Berry's separate property. The increases in the instant defendant's monthly retirement pay do not constitute his separate property. Our Supreme Court observed in Cearley v. Cearley, 544 S.W.2d 661 (Tex.1976) that a \"serviceman's military pension ... is a form of deferred compensation which is earned during each month of his military service.\" We also note that in Cameron, our Supreme Court approved an award to the wife for 35 percent of the gross present and \"future\" military retirement benefits paid to the husband. It appears that Cameron recognizes that, under facts similar to the instant case, post-divorce increases in future payments do not constitute separate property of the retired spouse. Both parties will share in the future \"increases\" and \"decreases\" in retirement benefits. We overrule defendant's first point of error. Defendant's former wife is entitled to share in the increased retirement benefits.\nDefendant alternatively urges that the trial court erred in awarding a judgment based on \"gross retirement pay\" rather than \"disposable retirement pay.\" He specifically asserts that he is entitled to a deduction from his gross retirement pay for payments to his Survivor Benefit Plan before plaintiff is entitled to 43.5 percent of his retirement pay. Again, we will assume, without deciding, that 10 U.S.C. sec. 1408(a)(4) (1983) is applicable.\nSection 1408(a)(4) provides in pertinent part:\n\"Disposable retired or retainer pay\" means the total monthly retired or retainer pay to which a member is entitled... less amounts which\u0097\n* * * * * *\n\n*391 (F) are deducted because of an election under chapter 73 of this title to provide an annuity to a spouse or former spouse to whom payment of a portion of such member's retired or retainer pay is being made pursuant to a court order under this section. (Emphasis added)\nThere is no evidence that the defendant is providing an annuity to a spouse or former spouse \"pursuant to a court order under this section.\" Defendant's payments, therefore, do not qualify under Section 1408(a)(4). Defendant's point of error is overruled.\nFinally, defendant urges that the trial court did not have the authority to award attorney's fees to plaintiff. We agree.\nWe follow Etzel v. United States Dept. of Air Force, 620 S.W.2d 853, 855 (Tex.Civ. App.\u0097Houston [14th Dist.] 1981, writ ref'd n.r.e.) where the court, when faced with the same issue, stated:\nUpon examination of the record, we find in this case there existed no right for the recovery of attorney's fees at the enforcement proceeding as related to the delinquent retirement benefits. There is no indication that a contract existed for the payment of attorney's fees nor do we find any pleadings reflecting a proper statutory claim authorizing an award of attorney's fees for the recovery of the retirement benefits.\nPlaintiff's reliance on Chess v. Chess, 627 S.W.2d 513 (Tex.App.\u0097Corpus Christi 1982, no writ) and Peissel v. Peissel, 620 S.W.2d 796 (Tex.Civ.App.\u0097Houston [14th Dist.] 1981, no writ) is misplaced. Chess and Peissel were each based on a \"property settlement agreement.\" The authority to award attorney's fees came from the contract nature of the suits. See McCray v. McCray, 584 S.W.2d 279 (Tex.1979) (per curiam); TEX.REV.CIV.STAT.ANN. art. 2226 (Vernon Supp.1982-1983). The instant case does not involve a property settlement agreement.\nPlaintiff also argues that she is entitled to attorney's fees under a new provision of the Family Code. See Act of June 17, 1983, ch. 424, sec. 2, 1983 Tex.Gen.Laws 2346, 2353 (to be codified at Tex.Family Code sec. 3.77).[5] Plaintiff cannot take advantage of this new provision because the trial was held 21 days before the provision became effective. See Shwiff v. Priest, 650 S.W.2d 894 (Tex.App.\u0097San Antonio 1983, writ ref'd n.r.e.); Villiers v. Republic Financial Services, Inc., 602 S.W.2d 566 (Tex. Civ.App.\u0097Texarkana 1980, writ ref'd n.r. e.). We hold that the trial court erred in awarding attorney's fees to plaintiff.\nThe part of the trial court's judgment awarding attorney's fees is reversed and rendered. In all other respects, the judgment of the trial court is affirmed.\nNOTES\n[1] McCarty was decided on June 26, 1981. It held that nondisability military retirement benefits were not divisible as community property by state courts.\n[2] Under the Act, a state court may treat military retirement pay as separate property of the retired spouse or as community property \"in accordance with the law of the jurisdiction of such court.\" The Act limits such division of retirement pay to periods beginning after June 25, 1981. See 10 U.S.C. sec. 1408(c)(1). The purpose of the Act was to reverse the effect of McCarty. Cameron v. Cameron, 641 S.W.2d 210 (Tex.1982).\n[3] The trial court deducted \"federal employment and income taxes\" from defendant's gross monthly payments pursuant to Section 1408(a)(4). See 10 U.S.C. sec. 1408(a)(4). Plaintiff does not challenge these deductions.\n[4] Section 1408(c)(1) provides:\n\nSubject to the limitations of this section, a court may treat disposable retired or retainer pay payable to a member for pay periods beginning after June 25, 1981, either as property solely of the member or as property of the member and his spouse in accordance with the law of the jurisdiction of such court.\n[5] The new Section 3.77 of the Texas Family Code provides:\n\nIn any proceeding to enforce a property division as provided by this subchapter, the court may award costs as in other civil cases. Reasonable attorney's fees may be taxed as costs in any proceeding under this subchapter, and may be ordered paid directly to the attorney, who may enforce the order for fees in his own name by any means available for the enforcement of a judgment for debt.\n"} -{"text": " IN THE COURT OF WORKERS\u2019 COMPENSATION CLAIMS\n AT NASHVILLE\n\nWILLIAM SACHS )\n Employee, ) Docket No.: 2014-05-0015\n )\nv. ) State File No.: 61900-2014\n )\nJOHNSON CONTROLS ) Date of Injury: JULY 30, 2014\n Employer, )\n ) Judge:\nAnd ) BAKER\n )\nINDEMNITY INS. CO. OF NORTH )\nAMERICA. )\n\n DISMISSAL ORDER\n\n THIS CAUSE came before the Court on July 21, 2015, for a hearing of the Motion\nto Dismiss filed by Johnson Controls. The Court conducted the hearing via\nteleconference. The employee, William Sachs, did not respond to Johnson Controls\u2019\nMotion and did not participate in the teleconference. Upon consideration of the Motion\nwith accompanying memorandum of law and the argument of Johnson Controls\u2019 counsel,\nthe Court finds that the Motion is well-taken and should be granted.\n\n History of Claim\n\n On October 7, 2015, Mr. Sachs filed a Petition for Benefit Determination seeking\nworkers\u2019 compensation benefits for an injury to his neck and shoulder that he allegedly\nsuffered in the course and scope of his employment for Johnson Controls. Johnson\nControls paid Mr. Sachs temporary disability and medical benefits but later denied the\nclaim on causation grounds.\n\n The workers\u2019 compensation mediator filed a Dispute Certification Notice, and the\nparties participated in an Expedited Hearing on the issues of temporary disability and\nmedical benefits. The Court ordered Johnson Controls to provide Mr. Sachs additional\nmedical care for his neck but denied his request for temporary disability benefits.\n\n\n 1\n\f On March 26, 2015, the parties appeared before the Court for an Initial Hearing.\nAt the Initial Hearing, Mr. Sachs and counsel for Johnson Controls agreed on discovery\ndeadlines, pretrial filing deadlines, and selected a date for the Compensation Hearing.\nThe Court issued an \u201cInitial Hearing Order\u201d memorializing the agreed deadlines and\nsetting the Compensation Hearing for September 29, 2015. The Initial Hearing Order\nrequired the parties to respond to all interrogatories and requests for production of\ndocuments on or before May 26, 2015. The Order also required both parties to disclose\nthe identity of its expert witnesses to the opposing party on or before June 26, 2015.\n\n When the Court convened the hearing of Johnson Controls\u2019 Motion to Dismiss,\nMr. Sachs did not call in to participate. The file shows that the Court Clerk sent Mr.\nJohnson a notice of hearing to the address on file. The undersigned attempted to call Mr.\nSachs using the phone numbers included on the Petition for Benefit Determination: the\nfirst number was disconnected; the undersigned received a busy signal when he dialed the\nsecond number.\n\n Johnson Controls\u2019 Contentions\n\n Johnson Controls requests dismissal of Mr. Sachs\u2019 claim due to his failure to\ncomply with the Court\u2019s Initial Hearing Order. Specifically, it cites Mr. Sachs\u2019 failure to\ndisclose the expert witnesses he intends to rely upon to establish the causal connection\nbetween the work he performed for Johnson Controls and his alleged injuries. It further\nargues that it timely disclosed the identity of its expert witness to Mr. Sachs and has\nscheduled that expert\u2019s deposition. Because Mr. Sachs bears the burden of proof and has\nnot disclosed an expert, Johnson Controls argues that it should not be required to expend\nthe time and resources to develop a defense.\n\n Additionally, Johnson Controls cites Mr. Sachs\u2019 failure to respond to written\ndiscovery as grounds for dismissal. It sent Mr. Sachs written discovery via certified mail\non May 26, 2015, and had not received a response, or heard from, Mr. Sachs in several\nmonths at the time of the hearing.\n\n For these reasons, Johnson Controls argues that the Court should dismiss Mr.\nSachs\u2019 claim pursuant to Rule 41.02 of the Tennessee Rules of Civil Procedure for failure\nto prosecute his claim and failure to comply with Court\u2019s Initial Hearing Order.\n\n Findings of Fact and Conclusions of Law\n\n Rule 41.02 of the Tennessee Rules of Civil Procedure provides, \u201cFor failure of the\nplaintiff to prosecute or to comply with these rules or any order of court, a defendant may\nmore for dismissal of an action or of any claim against the defendant.\u201d \u201cTrial courts\npossess inherent, common-law authority to control their dockets and the proceedings in\ntheir courts. Their authority is quite broad and includes the express authority to dismiss\n\n 2\n\fcases for failure to prosecute or to comply with the Tennessee Rules of Civil Procedure\nor the orders of the court.\u201d Hodges v. Tennessee Att\u2019y Gen., 43 S.W.3d 918, 920 (Tenn.\nCt. App. 2000).\n\n Johnson Controls moved for dismissal of Mr. Sachs\u2019 claim for his failure to\ncomply with the portion of Initial Hearing Order that required him to provide discovery\nresponses and to disclose the identity of his expert witnesses. While the Court\nappreciates that Mr. Sachs proceeded without the assistance of legal counsel, this does\nnot excuse his failure to comply with this Court\u2019s order. See Id.1\n\n Furthermore, Johnson Controls argued that Mr. Sachs\u2019 failure to participate in\ndiscovery prejudiced it by denying Johnson Controls sufficient notice of the evidence Mr.\nSachs may present at the September 29, 2015 Compensation Hearing. Because Mr.\nSachs failed to respond to discovery and disclose his expert witnesses, and also failed to\nrespond to this motion, Johnson Controls is left in the unenviable position of having to\ndevelop its defense in legal darkness. The Court agrees that requiring such a course of\naction would prejudice Johnson Controls. For this reason, the Court finds Johnson\nControls\u2019 Motion well-taken and grants it.\n\n\nIT IS, THEREFORE, ORDERED as follows:\n\n 1. Mr. Sachs\u2019 claim against Johnson Controls for workers\u2019 compensation benefits\n is dismissed without prejudice to refiling pursuant to Rule 41.02 of the\n Tennessee Rules of Civil Procedure.\n\n 2. The Court assesses the $150 filing fee in this claim to Johnson Controls and/or\n its workers\u2019 compensation carrier pursuant to Rule 0800-02-21-.07 (2015) of\n the Mediation and Hearing Rules of the Tennessee Division of Workers\u2019\n Compensation. Johnson Controls or his carrier shall promptly remit the filing\n fee to the Clerk of the Court of Workers\u2019 Compensation Claims.\n\n 3. Unless an appeal of is filed with the Workers\u2019 Compensation Appeals\n Board or the Tennessee Supreme Court, this order shall become final in\n thirty (30) days.\n\n\n\n\n1\n \u201cParties who choose to represent themselves are entitled to fair and equal treatment by the courts. However, the\ncourts may not prejudice the substantive rights of the other parties in order to be \u2018\u201cfair\u2019\u201d to parties representing\nthemselves. Parties who choose to represent themselves are not excused from complying with the same applicable\nsubstantive and procedural law that represented parties must comply with.\u201d Hodges v. Tennessee Att\u2019y Gen., 43\nS.W.3d 918, 920 (Tenn. Ct. App. 2000) (Internal citations omitted).\n\n 3\n\fISSUED AND FILED WITH THE COURT OF WORKERS\u2019 COMPENSATION\nCLAIMS ON THE 13th DAY OF AUGUST, 2015.\n\n\n\n\n ____________________________________\n Judge Joshua Davis Baker\n Court of Workers\u2019 Compensation Claims\n\n\n\n\n 4\n\fRight to Appeal:\n\nTennessee Law allows any party who disagrees with this Order of Dismissal to appeal the\ndecision to the Workers\u2019 Compensation Appeals Board. To file a Notice of Appeal, you\nmust:\n\n 1. Complete the enclosed form entitled: \u201cCompensation Hearing Notice of Appeal.\u201d\n\n 2. File the completed form with the Court Clerk within thirty (30) days of the date\n the Compensation Order was entered by the Workers\u2019 Compensation Judge. See\n Tenn. Comp. R. & Regs. 0800-02-22-.01(1)(b) (2015).\n\n 3. Serve a copy of the Request for Appeal upon the opposing party.\n\n 4. The appealing party is responsible for payment of a filing fee in the amount of\n $75.00. Within ten calendar days after the filing of a notice of appeal, payment\n must be received by check, money order, or credit card payment. Payments can be\n made in person at any Bureau office or by United States mail, hand-delivery, or\n other delivery service. In the alternative, the appealing party may file an Affidavit\n of Indigency, on a form prescribed by the Bureau, seeking a waiver of the filing\n fee. The Affidavit of Indigency may be filed contemporaneously with the Notice\n of Appeal or must be filed within ten calendar days thereafter. The Appeals Board\n will consider the Affidavit of Indigency and issue an Order granting or denying\n the request for a waiver of the filing fee as soon thereafter as is\n practicable. Failure to timely pay the filing fee or file the Affidavit of\n Indigency in accordance with this section shall result in dismissal of the\n appeal.\n\n 5. After the Workers\u2019 Compensation Judge approves the record and the Court Clerk\n transmits it to the Workers\u2019 Compensation Appeals Board, the appeal will be\n docketed and assigned to an Appeals Board Judge for Review. At that time, a\n docketing notice shall be sent to the parties. Thereafter, the parties have fifteen\n calendar days to submit briefs to the Appeals Board for consideration. See Tenn.\n Comp. R. & Regs. 0800-02-22-.02(3) (2015).\n\n\n\n\n 5\n\f CERTIFICATE OF SERVICE\n\n I hereby certify that a true and correct copy of the Dismissal Order was sent to the\n following recipients by the following methods of service on this the 13th day of August,\n 2015.\n\nName Certified First Via Fax Via Email Address\n Mail Class Fax Number Email\n Mail\nKitty Boyte X kboyte@constangy.com\nWilliam Sachs X 115 Wheeler Street\n Shelbyville, TN 37160\n\n\n\n _____________________________________\n Penny Shrum, Clerk of Court\n Court of Workers\u2019 Compensation Claims\n WC.CourtClek\n\n\n\n\n 6\n\f"} -{"text": "540 U.S. 996\nMULLENSv.UNITED STATES.\nNo. 03-6595.\nSupreme Court of United States.\nNovember 3, 2003.\n\n1\nAppeal from the C. A. 11th Cir.\n\n\n2\nCertiorari denied.\n\n"} -{"text": " United States Court of Appeals\n FOR THE EIGHTH CIRCUIT\n ___________\n\n No. 08-1302\n ___________\n\nCalvin Silva, *\n *\n Petitioner-Appellee, *\n * Appeal from the United States\n v. * District Court for the District\n * of Nebraska.\nRobert Houston, *\n * [UNPUBLISHED]\n Respondent-Appellant. *\n ___________\n\n Submitted: September 25, 2008\n Filed: November 21, 2008\n ___________\n\nBefore BYE, BEAM, and SHEPHERD, Circuit Judges.\n ___________\n\nPER CURIAM.\n\n Robert Houston, Director of the Nebraska Department of Correctional Services,\nappeals the district court\u2019s1 decision to grant Calvin Silva\u2019s Petition for a Writ of\nHabeas Corpus under 28 U.S.C. \u00a7 2254 and to order Silva\u2019s immediate release.\nReviewing the district court\u2019s conclusions of law de novo and its factual findings for\nclear error, Randolph v. Kenna, 276 F.3d 401, 403 (8th Cir. 2002) (standard of\nreview), we affirm, see 8th Cir. R. 47B.\n ______________________________\n\n\n 1\n The Honorable Joseph F. Bataillon, United States District Judge for the District\nof Nebraska.\n\f"} -{"text": "210 F.2d 58\nHARMAN,v.UNITED STATES.\nNo. 6707.\nUnited States Court of Appeals, Fourth Circuit.\nArgued Jan. 15, 1954.Decided Jan. 27, 1954.\n\nJ. Raymond Gordon, Charleston, W. Va., for appellant.\nDuncan W. Daugherty, U.S. Atty., Huntington, W. Va. (A. Garnett Thompson, U.S. Atty., Charleston, W. Va., on the brief), for appellee.\nBefore PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.\nSOPER, Circuit Judge.\n\n\n1\nRoy Harman was convicted in the District Court of removing 15 gallons of distilled spirits, on which the internal revenue tax had not been paid, to place other than a bonded warehouse, and also of possessing the same without having affixed an internal revenue stamp, denoting the quantity of distilled spirits contained therein, to the immediate container thereof, in violation of 26 U.S.C. \u00a7 2803 and 2913. He was sentenced to a term of three years in prison and has appealed on the ground that the liquor was taken in the course of an unlawful search and seizure in violation of the Fourth Amendment to the Federal Constitution, and that the evidence procured by the seizure was therefore wrongfully admitted at the trial. He also contends that certain instructions of the court to the jury were erroneous.\n\n\n2\nOn April 2, 1953 three West Virginia state enforcement officers, having had a number of reports that illicit liquor was being 'run' out of Slate Creek Hollow near Raysal, McDowell County, West Virginia, drove an automobile into the mouth of the Hollow and remained on watch in the car without lights on the edge of a rough road through the woods. They remained on watch from 8 p.m. until 4 o'clock the next morning. They saw a truck coming down the Hollow on the road and when it reached a point 50 to 100 feet from them they put on the lights of their car and drove into the road facing the approaching truck. Thereupon the driver of the truck stopped the vehicle and backed it toward the side of the road in order to turn around and go back, but the motor stalled and the driver leaped from the truck and ran off into the woods and escaped.\n\n\n3\nAs soon as the truck started to go back two of the officers leaped from their car and ran toward the truck. Their way was lighted by the lights of their car and by flashlights which they carried. They got close enough to the truck and to the driver to recognize him as a man they had known for a number of years and to identify him as the defendant at the time of the trial. The truck was also identified at the trial by a number of witnesses as having been driven regularly by the defendant.\n\n\n4\nAfter the driver of the truck ran away the officers examined it and found that it contained a number of gallon glass jugs full of moonshine liquor. Some of the jugs were exposed to view and their contents were plainly visible to the officers when they reached the truck. The officers removed the caps on some of the jugs and ascertained from the smell that they contained whisky.\n\n\n5\nIn view of these facts we find no ground for the contention that the search and seizure of the truck was in violation of the constitutional rights of the defendant. In Carroll v. United States, 267 U.S. 132, 147, 45 S.Ct. 280, 69 L.Ed. 543, the Supreme Court pointed out that Congress made a distinction between the necessity for a search warrant in the searching of a dwelling and in that of an automobile or other road vehicle, and the court held that such a distinction was consistent with the Fourth Amendment because it does not denounce all searches and seizures but only such as are unreasonable. When the officers of the law have probable cause for believing that the law is being violated in their presence and it is impracticable to obtain a search warrant they may proceed with the search without it. In the pending case the officers had information which led them to investigate the suspected neighborhood, the preceived the truck coming out of the Hollow on the woods road at an unusual hour and their suspicions were confirmed when the driver upon seeing them took to his heels and left the truck in their hands. The reasonableness of the search and the impracticability of obtaining a search warrant under these circumstances are obvious. Cannon v. United States, 5 Cir., 158 F.2d 952; Mabee v. United States, 3 Cir., 60 F.2d 209. Cf. Trupiano v. United States, 334 U.S. 699, 68 S.Ct. 1229, 92 L.Ed. 1663, overruled in part by United States v. Rabinowitz, 339 U.S. 56, 70 S.Ct. 430, 94 L.Ed. 653.\n\n\n6\nLikewise there is no substance in the additional contention that the judge erroneously declined to give certain instructions offered by the defendant relating to the unanimity required in the verdict of a jury, and to the doctrine of reasonable doubt. The defendant requested an instruction on the first matter in the form sometimes used in the state courts of Virginia and West Virginia, but the judge refused the request and merely told the jury on this point that their verdict must be unanimous and all of them must agree. There was no error in this action. It was for the judge and not the defendant to determine the form of the charge to the jury and the language used by the judge was clear and unmistakable with respect to the requirement of a unanimous verdict. This requirement is so well understood by the jurymen in attendance upon the courts of this country that in many instances the judge's charge makes no reference to it.\n\n\n7\nThe specific instruction as to reasonable doubt requested by the defendant was to the effect that when two or three witnesses for the government, as in the case at bar, have an equal opportunity to observe an important occurrence which forms the basis of the government's case, and they differ in their testimony as to the existence of the fact, that of itself creates a reasonable doubt as to the defendant's guilt and requires a verdict for the defendant. This request was intended to direct attention to the testimony of the driver of the state officers' car who remained in the car when his colleagues jumped out to apprehend the defendant, and who was unable to identify the defendant as the driver of the truck containing the liquor. The judge correctly rejected this request. He told the jury in substance that the crucial question in the case was one of identity of the driver of the truck; that there was no conflict in the evidence on this point since the defendant had offered the testimony of the three officers, two of whom trained their flashlight on the defendant and recognized him as a man they had known for years while the third officer did not see the defendant at the time and did not attempt to identify him at the trial; and that if all the witnesses had an equal opportunity to see the defendant and one of them could not identify him at the trial, that would justify the jury in entertaining a reasonable doubt of the defendant's guilt; but in order to apply the rule each of the three witnesses must have had the same opportunity to see the occurence. The judge then called attention to the fact that the two officers who identified the defendant were the ones who got out of their car and ran toward him as he left his truck and fled, while the third officer remained in the officers' car. The judge cautioned the jury that it was for them to say from all the circumstances whether they were satisfied beyond a reasonable doubt as to the identity of the defendant with the driver of the truck. Obviously this instruction was entirely fair and the defendant has no just cause of complaint. If anything, the instruction may have been too favorable to him in the suggestion that a reasonable doubt of the identity of a person will arise when one of three persons with an equal opportunity to see, fails to identify him.\n\n\n8\nAffirmed.\n\n"} -{"text": "\n949 P.2d 358 (1998)\n134 Wash.2d 176\nSTATE of Washington, Respondent,\nv.\nRonald TALLEY, Petitioner.\nNo. 64893-0.\nSupreme Court of Washington, En Banc.\nArgued September 24, 1997.\nDecided January 8, 1998.\n*359 Nielsen, Broman & Associates, James Dixon, Eric Nielsen, Seattle, for petitioner.\nNorm Maleng, King County Prosecutor, Erin Riley, Deputy Conty Prosecutor, Seattle, for respondent.\nALEXANDER, Justice.\nThe primary issue presented by this appeal is whether a prosecutor who enters into a plea agreement that requires the State to recommend a standard range sentence, upon the defendant's plea of guilty, breaches that agreement by participating in a court *360 ordered evidentiary sentencing hearing. We hold that the prosecutor's participation, by itself, does not undercut such a plea bargain and thereby violate the plea agreement. Consequently, we affirm the Court of Appeals' decision to remand this case for an evidentiary hearing and resentencing before a judge other than the one who earlier imposed an exceptional sentence on Talley.\nRonald Talley was charged in King County Superior Court with one count of second degree rape. RCW 9A.44.050(1). The charge arose out of an incident at the now defunct Oz nightclub in Seattle, which culminated in D.T. complaining to the Seattle Police Department that Talley forcibly raped her. Talley admitted hitting the woman but claimed that the sexual relations were consensual. The case proceeded to a jury trial, but the trial judge declared a mistrial when the jury indicated that it could not reach a verdict. Thereafter, a deputy prosecutor and Talley entered into a plea bargain agreement in which the deputy agreed, on behalf of the State, to amend the charge against Talley to third degree rape in return for Talley's guilty plea to the amended charge. RCW 9A.44.060. Talley then entered a so-called Alford plea of guilty to the amended charge of third degree rape.[1] In his statement on plea of guilty, Talley indicated he was giving \"the court ... permission to review the certification for determination of probable cause and [the] police reports for this plea....\" Clerk's Papers at 71.\nFollowing Talley's entry of a guilty plea, a sentencing hearing was conducted before a superior court judge who had not presided at Talley's earlier trial. The victim and Talley, as well as family and friends of both, and members of a rape victims support group, testified at this hearing. Consistent with the terms of the plea agreement the deputy prosecutor recommended a sentence of 12 months, the high end of the standard range. The sentencing judge was also presented with a report from a community correction officer who recommended an exceptional sentence of 24 months. Talley's counsel recommended a sentence within the standard range, but expressed concern at this hearing that the sentencing judge might rely upon facts not stipulated to by Talley, including the allegations contained in the certification for determination of probable cause, and impose an exceptional sentence. The sentencing judge responded, \"I am giving an exceptional sentence, and I'll give you a time for an evidentiary hearing.\" Verbatim Report of Proceedings (Aug. 11, 1995) at 15. The judge then adjourned the hearing and scheduled an evidentiary hearing for a later date.\nAt an intervening hearing held at Talley's request, Talley's counsel again objected to the sentencing court's consideration of the certification for determination of probable cause, and any other facts not stipulated to, as a basis for imposing an enhanced sentence. Talley's counsel argued that because Talley had entered an Alford plea and there had been no evidentiary hearing, there were no facts before the court upon which it could base an exceptional sentence. Counsel asserted further that there could be no \"real facts\" hearing because the prosecutor's participation at any such hearing would undermine the plea agreement with Talley. In response, the sentencing judge announced that she was canceling the evidentiary hearing, indicating that she \"understood [the defense was] asking for an evidentiary hearing. But if [it is] not asking for an evidentiary hearing, I'm not going to hold one.\" Verbatim Report of Proceedings (Aug. 24, 1995) at 6.\nAt a later sentencing hearing, the deputy prosecutor again recommended a standard range sentence. Defense counsel reiterated her recommendation for a standard range sentence, noting that she had submitted a presentence memorandum and transcripts of testimony from the aborted trial for the sentencing judge's consideration. After reviewing police reports and the State's certification for determination of probable cause, among other items, the sentencing court imposed an exceptional sentence of 24 months, citing deliberate cruelty, multiple incidents of intercourse, and the negative impact the rape would have on the rape victim as the aggravating *361 circumstances justifying an exceptional sentence.[2] In support of the exceptional sentence the sentencing court entered findings of facts, as follows:\n1. On July 30, 1994, while at the Oz nightclub in Seattle, King County, Washington, the defendant approached [D.T.] under the pretext of asking her to dance.\n2. The defendant had no intention of dancing with [D.T.], but instead intended to take her to an isolated, dark stairwell within the nightclub.\n3. The defendant had been to that stairwell earlier in the evening and knew it was dark and isolated.\n4. Once in the stairwell, the defendant demanded oral sex from [D.T.], which she performed without her consent.\n5. After the oral rape, the defendant had penile-vaginal intercourse with [D.T.] without her consent.\n6. [D.T.] clearly expressed her lack of consent to the defendant, including telling him that she was a virgin.\n7. As a result of the vaginal rape, and consistent with her lack of prior sexual intercourse, [D.T.] suffered tears to her vagina.\n8. During the course of the rapes, the defendant hit [D.T.] in the head repeatedly and bit her on the chest.\n9. During the course of, and after, the rapes, the defendant referred to [D.T.] as a \"bitch\" and a \"whore\".\n10. After raping [D.T.], the defendant left her in the stairwell nude, hysterical, and bleeding from her vagina.\n11. The defendant exhibited an extreme indifference to [D.T.'s] well-being.\n12. The defendant's actions were deliberately cruel, exceeding that which was necessary to commit rape.\n13. As a result of the rapes, [D.T.] and her family have been extremely traumatized.\n14. [D.T.] has lost her ability to trust others, is very fearful, suffers from nightmares, and has required long-term therapy.\n15. [D.T.] has found it difficult to impossible to commence a romantic relationship with a man as a result of the rapes.\nClerk's Papers at 80-81.\nTalley appealed the exceptional sentence to Division One of the Court of Appeals. He urged the Court of Appeals to reverse the sentence and remand with instructions to impose a standard range sentence. The Court of Appeals reversed the sentence, concluding that the sentencing court had violated the Sentencing Reform Act of 1981[3] by relying on facts that were not acknowledged or admitted by Talley or proven by a preponderance of the evidence at an evidentiary hearing, and consequently \"may have prejudged the matter.\" State v. Talley, 83 Wash.App. 750, 763, 923 P.2d 721 (1996), review granted, 131 Wash.2d 1023, 937 P.2d 1102 (1997). It remanded for an evidentiary hearing and sentencing before a different judge. In addition, it rejected Talley's contention that the State's participation in an evidentiary hearing would constitute a breach of the plea agreement. Finally, it held that deliberate cruelty or multiple acts of rape, if proven at the evidentiary hearing, could form the basis of an exceptional sentence. Talley, 83 Wash.App. 750, 923 P.2d 721.[4]\n*362 Talley sought review here, claiming that the Court of Appeals erred in concluding that: (1) the State would not violate the plea bargain agreement by participating in an evidentiary hearing; and (2) on resentencing, the sentencing court could consider deliberate cruelty and multiple acts as potential justification for an exceptional sentence. We granted review.\nWhen Talley and the State entered into their plea bargain agreement they formed a contract. State v. Wakefield, 130 Wash.2d 464, 925 P.2d 183 (1996); State v. Arko, 52 Wash.App. 130, 758 P.2d 522 (1988). Pursuant to that agreement, Talley agreed to give up his right to a trial and plead guilty in exchange for the State's agreement to reduce the charge to third degree rape and recommend a standard sentencing range of 6-12 months.[5] Talley kept his end of the bargain by pleading guilty to the amended charge. However, by entering a so-called Alford plea to the charge he did not admit the allegations contained in the certification for probable cause, notwithstanding his stipulation that the plea judge could consider it in determining the validity of the guilty plea. State v. Young, 51 Wash.App. 517, 754 P.2d 147 (1988).\nThe State is also obligated to adhere to the terms of a plea agreement by recommending the agreed upon sentence. State v. Coppin, 57 Wash.App. 866, 791 P.2d 228, review denied, 115 Wash.2d 1011, 797 P.2d 512 (1990). Although the recommendation need not be made enthusiastically, the prosecutor is obliged to act in good faith, participate in the sentencing proceedings, answer the court's questions candidly in accordance with RPC 3.3 and, consistent with RCW 9.94A.460, not hold back relevant information regarding the plea agreement.[6]State v. Sledge, 133 Wash.2d 828, 947 P.2d 1199 (1997). Although the State does not breach the agreement by not advocating for the sentence beyond making the bargained for recommendation, it has an obligation not to undercut a plea bargain with a defendant. In re Palodichuk, 22 Wash.App. 107, 110, 589 P.2d 269 (1978).\nTalley does not suggest that the State has failed to comply with the plea bargain up to this time. He contends, rather, that the State's participation in an evidentiary hearing to present evidence that may support factual findings justifying imposition of an exceptional sentence would undercut the plea bargain. Whether or not that is the case is the central issue before us. It is an issue that has not been previously confronted by this court.\nAt the outset, we note that we are in agreement with the view expressed by the Court of Appeals in Palodichuk that prosecutorial conduct is very important to the integrity of the plea bargaining process, and that a prosecutor must adhere to the terms of the plea agreement and avoid tainting the sentencing process. Palodichuk, 22 Wash. App. at 109-11, 589 P.2d 269. Talley suggests that under the holding in Palodichuk, which he cites as support for his position, the State is barred from participating in a \"real facts\" hearing because in doing so it would undercut the plea agreement.\nThe facts in Palodichuk were that the State had entered into a plea bargain with the defendant which required the State to recommend a suspended sentence and four years probation. The deputy prosecutor fulfilled that promise by making the agreed upon recommendation to the sentencing judge. He did not stop there, however, but went on to express reservations about the agreement, indicating that the State had received new information about the defendant's *363 past record as a probationer. This information, the deputy prosecutor indicated, had caused him to have \"second thoughts about that recommendation.\" Palodichuk, 22 Wash.App. at 109, 589 P.2d 269. On review, the Court of Appeals concluded that by expressing reservations about its recommendation to the sentencing judge, the State had undercut the agreed upon terms of the plea bargain and thereby breached the plea agreement.\nThe State responds that the instant case is more analogous to Coppin, and asserts that it supports its contention that a prosecutor does not undercut a plea agreement by merely participating in an evidentiary hearing. In Coppin, consistent with the plea agreement, a deputy prosecutor recommended a sentence at the high end of the standard range. At the same time the deputy submitted a California probate report to the sentencing court which described the defendant's prior convictions and his lack of amenability to treatment. After reviewing the report, the sentencing judge asked the deputy prosecutor to explain why he was not seeking an exceptional sentence. In response to the judge's inquiry, the deputy prosecutor stated, \"Number one, your honor, it was not decided that an exceptional sentence could be qualified. The children involved had considerable difficulty isolating the specific events. That was one reason. Second was to save the children from having to go through a trial.\" Coppin, 57 Wash.App. at 869, 791 P.2d 228. The sentencing judge then asked the deputy prosecutor whether he believed an exceptional sentence was not legally justified, or whether he was merely adhering to the terms of the plea bargain in making his recommendation. The deputy prosecutor replied that were it not for the plea bargain, he would have sought an exceptional sentence. The trial judge then imposed an exceptional sentence.\nOn review, the Court of Appeals concluded that the deputy prosecutor's explanation of his reasons for recommending a standard range sentence and bare submission of documents, although prejudicial to Coppin, did not constitute a breach of the plea agreement. Coppin, 57 Wash.App. at 875 n. 6, 791 P.2d 228. The Coppin court contrasted the actions of the deputy prosecutor to those of the deputy prosecutor in Palodichuk, stressing the deputy prosecutor's comments in Coppin did not contain subjective reservations about the recommended sentence and were given only in response to a direct inquiry by the court. The court cited RPC 3.3 and concluded that as an officer of the court, the deputy prosecutor had no choice but to answer the questions honestly. Coppin, 57 Wash.App. at 875, 791 P.2d 228; see also State v. Gutierrez, 58 Wash.App. 70, 76, 791 P.2d 275 (1990) (\"A prosecutor is entitled to present all relevant facts, whether or not they fully support his [or her] recommendation.\"); State v. Davis, 43 Wash.App. 832, 837, 720 P.2d 454 (\"prosecutor did not breach the agreement by informing the court of the two witnesses' concern and their wish to testify\"), review denied, 106 Wash.2d 1017 (1986).\nAlthough we believe that the Palodichuk and Coppin decisions are both sound, neither is precisely on point because in those cases the defendants did not enter Alford pleas and, thus, there were facts known to the court about those defendants' conduct in committing the charged offenses. Coppin, though, is more instructive of the two cases because it concerns the prosecutor's response to the sentencing court's initiative. Adopting its reasoning, we conclude that while the deputy prosecutor is obliged to make the agreed upon sentencing recommendation to the sentencing court at the sentencing hearing, mere participation by the deputy in an evidentiary hearing does not undercut the State's agreed upon recommendation. If we were to conclude otherwise, the sentencing court would be faced with a one-sided hearing, a circumstance that would not promote the ends of justice. In this regard, we believe the Court of Appeals was correct here when it indicated:\n[T]he prosecutor has an obligation as an officer of the court to participate in the hearing and present evidence that will help the court make its decision. Presenting evidence that will help the court make a decision does not amount to advocating against its earlier recommendation. Thus, *364 it does not violate the terms of the plea agreement.\nTalley, 83 Wash.App. at 759, 923 P.2d 721.\nAlthough we conclude that the prosecutor's participation in an evidentiary hearing does not, by itself, violate the plea agreement, we recognize that the State could violate the agreement by advocating for an exceptional sentence in the way that it presents evidence at the evidentiary hearing and in making its sentencing recommendation to the court. While, as we have observed, merely presenting relevant evidence to the sentencing court and responding to its inquiries is an appropriate fulfillment of the prosecutor's duty as an officer of the court, a deputy prosecutor could easily undercut the plea agreement by placing emphasis on the evidence that supports findings that aggravating factors are present.\nIndeed, that is precisely what happened in State v. Sledge, 947 P.2d 1199 (1997), a case that was very recently before this court. In Sledge, the deputy prosecutor had agreed to recommend a standard range sentence for a juvenile defendant. At a disposition hearing, in addition to submitting a probation counselor's \"manifest injustice report\" for the court's consideration, the deputy prosecutor also called the probation counselor to testify about the report. The deputy prosecutor then led the counselor through her report, extensively examining her about the factors that caused her to recommend an exceptional sentence. The deputy prosecutor also presented testimony by the juvenile's parole officer who testified about the defendant's prior problems at a juvenile institution. Finally, the deputy prosecutor gave a detailed and lengthy summary of the aggravating factors, that supported an exceptional disposition. The effect of the deputy prosecutor's presentation, we concluded, was to undermine the plea agreement. In reaching this conclusion, we emphasized the point that if the State's purpose was to have the sentencing court impose a standard range sentence, there was no need for the State to insist upon a hearing with witnesses, as the probation counselor's report was before the court.\nWe wish to stress that we are not indifferent to the difficulties the State may face in maintaining a balance between, on the one hand, its duty to present relevant evidence and respond to the sentencing court's inquiries, and on the other, its equally important obligation not to undercut the plea agreement. Although we are not able to forge a rule of general application that establishes a bright line between adherence and undercutting, we can indicate that the State will not violate its duty of good faith and fair dealing by participating in an evidentiary hearing and presenting evidence to assist the sentencing court, so long as it does not, by its words and conduct at that hearing, contradict its recommendation for a standard range sentence.\nFinally, as noted above, the Court of Appeals also held that deliberate cruelty and multiple acts of penetration, if proven at the evidentiary hearing, could be considered by the sentencing judge as reasons for imposing an exceptional sentence. Talley contends that consideration of facts necessary to prove these aggravating factors by the sentencing court would violate the real facts doctrine. Because we are upholding the Court of Appeals' decision to reverse Talley's sentence and remand for an evidentiary hearing, there are no facts or findings before the court and it is not appropriate for us to speculate about what facts may be proven at such a hearing. We, therefore, decline to address that contention.\nWe affirm the Court of Appeals' decision ordering an evidentiary hearing before a different sentencing judge, as well as its conclusion that the prosecuting attorney's participation in that hearing, by itself, would not constitute a breach of the plea agreement between Talley and the State.\nDURHAM, C.J., and DOLLIVER, SMITH, GUY, JOHNSON, MADSEN, TALMADGE and SANDERS, JJ., concur.\nNOTES\n[1] See North Carolina v. Alford, 400 U.S. 25, 91 S.Ct. 160, 27 L.Ed.2d 162 (1970) (defendant may plead guilty while disputing the facts alleged by the State).\n[2] The other items reviewed by the sentencing judge included: presentence memoranda submitted by Talley, the State, and the Department of Corrections; letters from the victim, the victim's family, and friends; letters from the defendant's family and friends; a transcript of testimony of witnesses who had testified at the earlier trial; and testimony at the original sentencing hearing from the victim, the defendant and family, and friends of each.\n[3] RCW 9.94A.370(2) states:\n\n\"In determining any sentence, the trial court may rely on no more information than is admitted by the plea agreement, or admitted, acknowledged, or proved in a trial or at the time of sentencing. Acknowledgment includes not objecting to information stated in the presentence reports. Where the defendant disputes material facts, the court must either not consider the fact or grant an evidentiary hearing on the point. The facts shall be deemed proved at the hearing by a preponderance of the evidence.\"\n[4] The State conceded at the Court of Appeals that negative impact of the crime on the victim was not so distinctive in this case that it justified an exceptional sentence. Talley, 83 Wash.App. at 760, 923 P.2d 721.\n[5] Plea bargains are authorized by RCW 9.94A.080(4).\n[6] RPC 3.3 states:\n\n\"(a) A lawyer shall not knowingly:\n\"(1) Make a false statement of material fact or law to a tribunal.\"\n\"A prosecutor, like any other attorney, has a duty of candor toward the tribunal which precludes it from making a false statement of material fact or law to such tribunal.\" Coppin, 57 Wash.App. at 874 n. 4, 791 P.2d 228.\nRCW 9.94A.460 states in part:\n\"The prosecutor shall not agree to withhold relevant information from the court concerning the plea agreement.\"\n"} -{"text": "\n422 B.R. 443 (2009)\nIn re Ruby G. EMANUEL, Debtor.\nNo. 97-44969 (SMB).\nUnited States Bankruptcy Court, S.D. New York.\nDecember 23, 2009.\n*444 Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, Andrew N. Goldman, Esq., Charles C. Platt, Esq., Melanie J. Dritz, Esq. of Counsel, Attorneys for Jacoby & Meyers LLP.\nRichard Tanenbaum, Esq., Brooklyn, NY, Attorney for Kenneth Heller.\nSusan Harmon, Esq., Hoboken, NJ, Attorney for Kenneth Heller.\nWindels Marx Lane & Mittendorf, LLP, New York, NY, Howard L. Simon, Esq. Of Counsel, Office of the United States Trustee, New York, NY, Greg Zipes, Esq. Of Counsel, Attorneys for Trustee.\n\nPOST-TRIAL FINDINGS OF FACT AND CONCLUSIONS OF LAW\nSTUART M. BERNSTEIN, Chief Bankruptcy Judge.\nKenneth Heller (\"Heller\") represented the debtor and the estate in a wrongful *445 death action until he was disbarred. Substitute special personal injury counsel, Jacoby & Meyers (\"J & M\"), settled the litigation, and Heller now seeks fees and expenses under a theory of quantum meruit. Any award will reduce the amount of J & M's contingent fee, and J & M has vigorously opposed Heller's application. Alan Nisselson, Esq., the chapter 7 trustee (the \"Trustee\"), and the United States Trustee also oppose his application. The Court conducted a one-day evidentiary hearing, and concludes, for the reasons that follow, that Heller is not entitled to any fees or expenses.\n\nBACKGROUND\n\nA. The State Court Action\nThis matter has its origins in an unfortunate, fatal accident involving the debtor's husband. On December 17, 1992, Mr. Emanuel's employer was performing repairs on a barge in dry dock at the Brooklyn Navy Yard. The task called for the placement of a gangway connecting the barge to the dock. Mr. Emanuel was charged with the responsibility of placing the gangway. While standing on the gangway as it was being hoisted into place, Mr. Emanuel fell 45 feet to the bottom of the dry dock, sustaining massive injuries that rendered him a quadriplegic and ultimately led to his death on August 30, 1994. Emanuel v. Sheridan Transp. Corp., 10 A.D.3d 46, 779 N.Y.S.2d 168, 170-71 (N.Y.App.Div.2004) (\"Emanuel I\").\nThe debtor retained Heller, individually and as administratrix of her husband's estate, to file a wrongful death action. Heller commenced suit against the barge owner, among others, asserting claims under the Jones Act, New York Labor Law and in negligence (the \"Action\"). Prior to the trial, on July 28, 1997, the debtor filed a voluntary petition for relief under chapter 7. By order dated August 10, 1999, the Trustee retained Heller (and Samuel Hirsch) as special personal injury counsel to the Trustee to prosecute the Action.[1]\nThe Action was tried before a jury in 1999. The Jones Act and New York Labor Law claims were dismissed before trial, id. at 171, and the plaintiffs proceeded to trial on the negligence claim. The jury found the barge to be unseaworthy and the defendants to be negligent. It awarded $24,967,660 in damages, but the trial court reduced the amount to $7,613,566, which the plaintiff accepted under protest. Following the entry of judgment, both sides appealed.\nIn May 2004, the Appellate Division reversed and remanded for a new trial. The substance of the reversal turned on the erroneous treatment of Mr. Emanuel as a seaman rather than as a longshoreman. According to the Appellate Division, a vessel owner owes an obligation of seaworthiness, a strict liability doctrine, to a seaman. See id. at 172-73. A longshoreman, on the other hand, may only recover from a vessel owner if he can prove negligence. Id. at 173. The appellate court concluded that Mr. Emanuel was a longshoreman rather than a seaman, id. at 172-73, and accordingly, the trial court erred in submitting the question of seaworthiness, which it intertwined with the issue of negligence, to the jury. Id. at 172, 173-74. One judge dissented in part, concluding that the record contained no evidence of the defendants' negligence, and the case should, therefore, be reversed and dismissed *446 rather than remanded for a new trial. Id. at 182.\n\nB. Heller's Disbarment and Subsequent Contempt\nApproximately one month after the Appellate Division reversal, Heller was disbarred. The charges that triggered the disbarment were unrelated to the Emanuel case. The referee had sustained the majority of the charges following an evidentiary hearing, but recommended only a two-year suspension. The Appellate Division disagreed. Citing Heller's pattern of misconduct, \"utter contempt for the judicial system\" and \"his consistent, reprehensible, unprofessional behavior,\" the court concluded that he should be disbarred rather than suspended:\nIn light of the cumulative evidence of respondent's 24-year history of sanctions, his perverse and persistent refusal to accept adverse rulings, reflective of an utter contempt for the judicial system, and his consistent, reprehensible, unprofessional behavior, which has included screaming at, threatening and disparaging judges, adversaries and experts, intentionally defying court rulings, and disrupting and thwarting proper legal process through both physical and verbal aggression, we are of the opinion that the appropriate sanction here is disbarment.\nIn re Heller, 9 A.D.3d 221, 780 N.Y.S.2d 314, 319 (N.Y.App.Div.), leave to appeal denied, 3 N.Y.3d 607, 785 N.Y.S.2d 25, 818 N.E.2d 667 (2004).\nFollowing Heller's disbarment, the Court approved the retention of J & M as substitute special personal injury counsel to the Trustee under a contingency fee retainer.[2] (Order for the Retention of Substitute Special Personal Injury Counsel to the Trustee, dated Jan. 21, 2005 (ECF Doc. # 23).) J & M sent a letter to Heller requesting the files in the Emanuel case. (Trial Transcript, dated July 1, 2009 (\"Tr.\") at 197.) The request is a common one, made by substituted plaintiff's counsel in personal injury and wrongful death cases. The terminated lawyers normally send their files promptly to the new counsel to be sure that the interests of the client are protected. (Tr. 194.) Heller nevertheless refused. (Tr. 127, 130.)\nJ & M then obtained an order to show cause to be substituted as counsel of record for Emanuel and to compel Heller to turn over the case files in the Action.[3] Heller opposed the motion, and cross-moved for an order fixing his costs and disbursements in the sum of $300,000 to $400,000 immediately, fixing his quantum meruit fee in the sum of $12,184,332.50, and directing that J & M pay the fee immediately, or secure the obligation, as a condition to the release of the files.[4] (J & M Findings, Ex. 8 at 1-2.) In affidavits filed in support of his cross-motion, Heller represented that the case file consisted of *447 43 boxes in his possession. (See id., Ex. 8 at 6; Ex. 9 at \u00b6 58.)\nOn January 13, 2006, the New York Supreme Court issued an order substituting J & M as counsel for the plaintiff and directing Heller and his associate, Susan Harmon, Esq. (\"Harmon\"), \"to turn over the complete, original file of the underlying action to Jacoby & Meyers LLP ... by 2/13/06. Failure to timely comply and completely comply with the above will result in sanctions.\" Finally, all other aspects of the cross-motion were denied. (Id., Ex. 10 (the \"January 2006 Order\").)\nHeller and Harmon failed to comply with the January 2006 Order. (Tr. 199.) As a consequence, the New York Supreme Court issued an order on March 28, 2006, directing Heller and Harmon to show cause why they should not be held in contempt for disobeying the January 2006 Order. (J & M Findings, Ex. 11.) It is not clear how the order to show cause was resolved, but on December 26, 2006, a second order was issued by the New York Supreme Court directing Heller to show cause why he should not be held in contempt for disobeying the January 2006 Order. (Id., Ex. 14.)\nThis time, Heller was held in contempt of court by order dated January 26, 2007 (the \"Contempt Order\") (id., Ex. 15), for failing to turn over the files to J & M. The Contempt Order stated that Heller could purge himself of the contempt by turning over all his records within 20 days. Should he fail to comply, a warrant would issue for his arrest and production for sentencing or fine, or both.\nHeller failed to purge himself of the contempt, and state Supreme Court Justice Silver issued a warrant for Heller's arrest on February 26, 2007. In re Emanuel, 406 B.R. 634, 635 (Bankr.S.D.N.Y. 2009) (\"Emanuel II\"). Heller was arrested that same day, and was subsequently sentenced to 30 days in jail and a $10,000 fine (the \"Sentencing Order\"). Id. The Appellate Division granted an interim stay limited to Heller's incarceration, but the interim stay was dissolved when his motion for a stay pending appeal was denied on May 8, 2007. Id.\nOn January 29, 2009, the Appellate Division affirmed the Contempt Order and the Sentencing Order, stating that Heller's failure to comply with successive orders directing him to turn over his files to Jacoby caused \"resulting prejudice to plaintiff's right to a new trial in this action for maritime wrongful death.\" Emanuel v. Sheridan Transp. Corp., 58 A.D.3d 583, 870 N.Y.S.2d 912, 913 (2009) (\"Emanuel III\").\n\nC. The Settlement\nDeprived of Heller's files, J & M carried on the best it could relying on the Record on Appeal.[5] Eventually, it procured a $3.65 million settlement that the Trustee accepted. On August 18, 2008, the Trustee filed a motion before this Court to *448 approve the settlement, pay J & M a contingent fee and expenses in the respective amounts of $1,214,318.62 and $6,679.80, deny compensation to Heller, pay a lien in the amount of $700,000 and partially pay the surplus of $1,600,000 to the debtor. (Trustee's 9019 Motion, at 1.) Heller objected, but it is unnecessary to recount his reasons.[6] (See Objection of Kenneth Heller to the Trustee's Motion for Approval of Settlement of the Debtor's Wrongful Death Actions, dated Sept. 23, 2008 (ECF Doc. # 29).) By order dated November 10, 2008, the Court approved the settlement, and authorized the Trustee to pay the lien held by the New York State Insurance Fund in the amount of $700,000 and $1,550,000 to the debtor. (ECF.Doc.# 45.) The Court reserved decision on the allocation of the fees as between Heller and J & M since an evidentiary hearing was necessary to resolve Heller's quantum meruit claims.\n\nDISCUSSION\n\nA. Threshold Matters\nBefore turning to the merits, the Court must first deal with two threshold arguments. J & M contends that the New York State courts have already ruled that Heller is not entitled to a legal fee. The state court, however, was presented with and decided a different issue. After J & M moved to compel Heller to turn over his files, Heller cross-moved for an order compelling the payment of his expenses, and the fixing and securing of his legal fee before he was obligated to turn over his files. The state court denied Heller's cross-motion, and directed him to turn over his files, essentially refusing to recognize a retaining lien. The state court never ruled that Heller was not entitled to a legal fee.\nJ & M also argues that Heller failed to comply with the requirements imposed on fee applicants in this Court. Heller was presumably retained pursuant to 11 U.S.C. \u00a7 327(e) as special personal injury counsel to the Trustee.[7] Although Heller started working on the matter pre-petition, he rendered a substantial amount of services as special counsel to the Trustee. He now seeks an award, based on quantum meruit, for those services.\nRule 2016(a) of the Federal Rule of Bankruptcy Procedure states that any entity seeking compensation from the estate for services rendered or reimbursement of necessary expenses must \"file an application setting forth a detailed statement of (1) the services rendered, time expended and the expenses incurred, and (2) the amounts requested.\" The rule applies to professionals who are retained pursuant to pre-approved contingency fee agreements. In re Lenworth Westbrooks, 202 B.R. 520, 522 (Bankr.N.D.Ala.1996). It even applies to persons who did not represent the estate but seek compensation under 11 *449 U.S.C. \u00a7 503(b)(3). 9 ALAN N. RESNICK & HENRY J. SOMMER, COLLIER ON BANKRUPTCY \u00b6 2016.03, at 2016-6 (15th ed. rev. 2009). The rule unquestionably applied to Heller.\nHeller failed to submit a fee application in accordance with Federal Bankruptcy Rule 2016(a). Nevertheless, the Court afforded him an opportunity to prove his entitlement to fees at a trial, and accordingly, will resolve the dispute on the merits.\n\nB. Heller's Quantum Meruit Fee\n\n1. Introduction\nA disbarred attorney may be compensated on a quantum meruit basis for services rendered prior to his disbarment, N.Y. COMP.CODES R. & REGS., tit. 22, \u00a7 603.13(b) (2009) (Rules of First Department); N.Y. COMP.CODES R. & REGS., tit. 22, \u00a7 691.10(b) (2009) (Rules of Second Department); see generally 7 N.Y.JUR.2D, ATTORNEYS AT LAW \u00a7 264, at 174 (2009), provided the misconduct does not relate to the representation for which compensation is sought. In re Bagen, 201 B.R. 642, 644 (S.D.N.Y.1996); Decolator, Cohen & DiPrisco, LLP v. Lysaght, Lysaght & Kramer, P.C., 304 A.D.2d 86, 756 N.Y.S.2d 147, 150 (N.Y.App.Div.2003). An award in quantum meruit should in all cases reflect the courts assessment of the qualitative value of the services rendered, made after weighing all relevant factors considered in valuing legal services. Padilla v. Sansivieri, 31 A.D.3d 64, 815 N.Y.S.2d 173, 174 (N.Y.App.Div.2006). The relevant factors include the difficulty of the matter, the nature and extent of the services rendered, the time reasonably expended on those services, the quality of performance by counsel, the qualifications of counsel, the amount at issue, and the results obtained (to the extent known). Sequa Corp. v. GBJ Corp., 156 F.3d 136, 148 (2d Cir. 1998); accord The Dweck Law Firm, L.L.P. v. Mann, No. 03 Civ. 8967(SAS), 2004 WL 1794486, at *2 (S.D.N.Y. Aug.11, 2004); Decolator, 756 N.Y.S.2d at 151; Rosenzweig v. Gomez, 250 A.D.2d 664, 672 N.Y.S.2d 907, 908 (N.Y.App.Div.1998).\nWhere the discharged attorney had been employed under a contingency fee agreement, the Court may take that into account in determining the value of the services rendered, but the quantum merit recovery does not depend on the terms of the agreement. Dweck Law Firm, 2004 WL 1794486, at *2. It should be borne in mind that the disbarred attorney must be replaced as the result of his own misconduct, and stands in the same shoes as one who has abandoned his client. See In re Woodworth, 15 F.Supp. 291, 293 (S.D.N.Y.), aff'd, 85 F.2d 50 (2d Cir.1936). Although his disbarment does not necessarily foreclose compensation, it nevertheless forces the client to retain a second lawyer to complete the work, and the client should not have to pay twice. Accordingly, in a personal injury action in which all relevant agreements provided for a compensation on a contingent fee basis,... compensation to disbarred, outgoing counsel should be fixed in quantum meruit as a portion of the contingent fee. Padilla v. Sansivieri, 815 N.Y.S.2d at 174; accord Decolator, 756 N.Y.S.2d at 151.\n\n2. The Evidence\nI have no reason to doubt that Heller possessed the skill and experience to try the Emanuel case in state court, although his self-proclaimed reputation as \"one of the preeminent maritime attorneys in the United States,\" (Creditor Kenneth Heller's Memorandum in Support of Post-Trial Findings of Fact and Conclusions of Law to Fix Attorney Compensation, dated July 30, 2009, at \u00b6 28) (ECF *450 Doc. # 118), is hyperbole.[8] I also do not doubt that he put a significant amount of time into the case or that the amount at issue was substantial. However, the party seeking legal fees bears the burden of proof. D'Jamoos v. Griffith, No. 00 CV 1361(ILG), 2008 WL 2620120, at *3 (E.D.N.Y. Feb.29, 2008), and I conclude that Heller failed to prove the amount, value or benefit of his services.\nHeller did not testify at trial, fearing that he would be arrested pursuant to an outstanding warrant issued after he was held in contempt for refusing to turn over his records in this matter to J & M. See Emanuel II, 406 B.R. at 637. Instead, the only evidence of what he did came from Harmon, a trial witness,[9] and the non-contemporaneous time records she created and the Court received as Heller Trial Exhibit A (\"Exhibit A\").\nNeither the time records nor Harmon's testimony were probative or credible. Exhibit A consisted of 143 pages that purported to detail the date of each service, a description of the service and the amount of time expended on the service. It was created in August 2005, (Tr. 74), and depicted services rendered as far back as 1992. Although Harmon testified that she based the time entries on her memory of what had occurred, (Tr. 108-09), she acknowledged that she had no current recollection. (Tr. 109.) She could not even confirm that Exhibit A included the same time records that she said she had prepared back in 2005.[10] (Tr. 101-02, 103) She described the time entries as \"rough estimates,\" (Tr. 108), and \"guesses,\" (Tr. 119), and conceded that she assigned time \"arbitrarily.\" (Tr. 107.) Heller's trial counsel described the time records as \"a quick and dirty way of putting this together. Everything was compiled years after the events.\" (Tr. 168.)\n*451 The time records were also inaccurate on their face. They included entries relating to services rendered prior to the accident and after Heller's disbarment. (Tr. 69-70, 123, 124, 167.) In many cases, the descriptions did not reflect the actual service, (Tr. 91-92, 103, 104, 105-06, 107, 108, 112, 116), the dates on which services were rendered, (Tr. 106, 108, 112), or the actual time spent.[11] (Tr. 165-167, 168.) Pages were also missing. (Tr. 76.)\nIn addition, Exhibit A contained duplicate entries for the same work. The duplication resulted from the manner in which Harmon reconstructed the time. Harmon began by going through Heller's diaries for the years 1992 through 2004, and estimating the time based on the diary entries. The first half of Exhibit A reflected reconstructed time based on the diary entries. Harmon then went through Heller's boxes, and performed a second estimate of time for work done between 1992 and 2004. These estimates begin on page 78 of Exhibit A. Harmon conceded that there was some overlap, but she never checked for duplication. (Tr. 187-88.)\nBased on the foregoing, I decline to credit Harmon's testimony, and at best, I can only infer that Heller obviously spent time on the case because he tried it. He failed, however, to prove the actual amount of time he spent rendering services in the Emanuel case, or even a reasonable approximation of that time. He has also failed to prove the billing rates of all of the attorneys and paraprofessionals, or the value of those services under the \"lodestar\" method.\nFurthermore, Heller has failed to demonstrate that his services provided any benefit to the estate. The Emanuel case was not as complex as Heller makes it sound, although proof of liability posed problems. Mr. Emanuel was a longshoreman. To establish the liability of the vessel owner, the plaintiff had to prove that the vessel owner (1) failed to exercise proper care regarding the condition of the ship prior to turning it over to the stevedore, (2) maintained active control of the vessel following the turnover that negligently contributed to the longshoreman's injury, or (3) had actual knowledge of a dangerous condition in an area under the stevedore's control, and failed to intervene. Emanuel I, 779 N.Y.S.2d at 174-75.\nThe case turned on whether the vessel owner breached its duty of active control to supervise and participate in the securing of the gangway from which Mr. Emanuel fell. See id. at 176. Heller submitted, and the trial court gave, a charge that misstated the law. It improperly placed the primary responsibility on the ship owner after the vessel had been turned over to Mr. Emanuel's employer, the stevedore. Id. at 175. There was only one eyewitness to the accident, and the balance of the trial testimony involved experts and the parties' employees explaining the appropriate way to secure a gangway. Although Heller prevailed in the trial court, he went forward on a faulty theory and ultimately lost the case.\nHaving lost the case before he was forced to hand it off, Heller failed to demonstrate that his work provided any benefit to the estate in the continued prosecution of the lawsuit following his *452 disbarment. He refused to turn over his file to J & M, and was held in contempt for that failure. Heller has nevertheless maintained throughout the case that J & M did not need his files, and could have successfully retried the case using the publicly available Record on Appeal. As Heller's work would be reflected in the Record on Appeal, this implies that J & M, who relied on the Record on Appeal, benefited from his work.\nI reject this argument for several reasons. First, Heller never offered the Record on Appeal into evidence, and thus, he failed to show what it contained much less that it contained everything that J & M needed.[12] Second, the Record on Appeal could not have included everything in Heller's files. The Record on Appeal filled only one or two boxes, while Heller had 43 boxes. (Tr. 134.) Although Harmon insisted that \"the sum and substance of the 41 [other] boxes that was necessary to retry the case was contained in that joint record on appeal,\" (Tr. 134), I reject her statement as unsupported, unsupportable and self-serving. Third, many items were admittedly not part of the Record on Appeal, including notes of witness interviews, (Tr. 183-84, 186, 202), diary notes, (Tr. 183-84), the portions of depositions that were not read at trial, (Tr. 186), and videos of Mr. Emanuel, photographs, memos and witness statements. (Tr. 200.) Fourth, one Appellate Division judge deemed the trial record insufficient as a matter of law to merit a new trial. While the majority disagreed and remanded the case, the dissenter's view might give successor counsel some pause in simply relying on the trial record.\nFinally, Heller's post-disbarment conduct caused prejudice to his former clients. Having lost the case he tried, Heller obstructed J & M's attempts to retry the case he lost. His refusal to turn over the files, in the face of several court orders directing him to do so, was symptomatic of what the Appellate Division described as his \"utter contempt for the judicial system, and his consistent, reprehensible, unprofessional behavior, which has included ... intentionally defying court rulings\" in the Heller disbarment order. In re Heller, 780 N.Y.S.2d at 319. Furthermore, although he argued to the Appellate Division, as he does here, that the Record on Appeal included everything that J & M needed to retry the case, (see J & M Findings, Ex. 25, at 51-53), the Appellate Division concluded that Heller's contemptuous refusal to turn over the files caused \"resulting prejudice to plaintiff's right to a new trial.\" Emanuel III, 870 N.Y.S.2d at 913.[13]\n\n\n*453 CONCLUSION\nIn the final analysis, Heller spent an indeterminate amount of time on a case that he lost, providing services of unproven benefit to his successor and former client. He irrationally disregarded numerous state court orders directing him to turn over his case files to J & M, resulting in prejudice to the debtor and the estate. These facts mandate the denial of his quantum meruit claim for attorney's fees. In addition, Heller failed to offer any evidence of the amount of expenses that he or his firm incurred in connection with the Emanuel case, and his request for reimbursement of expenses is denied for this reason as well.\nThe foregoing constitutes the Court's findings of fact and conclusions of law. Submit order.\nNOTES\n[1] The parties did not submit the Trustee's application to retain Heller or the retention order, but all agree that his retention was on a contingency fee basis. The trial was already underway when the Court signed the retention order, and the record does not indicate whether the retention was nunc pro tunc to an earlier date.\n[2] The debtor had separately retained J & M on August 23, 2004. (Application for the Retention of Substitute Special Personal Injury Counsel to the Trustee Pursuant to Bankruptcy Code \u00a7 327(e), dated Jan. 18, 2005, at Ex. A (ECF Doc. # 22).)\n[3] The opposition to Heller's fee request is based on events that took place in the New York Supreme Court. The Court takes judicial notice of the contents the state court records.\n[4] Less than a year earlier, Heller had sought similar relief. At that time, he represented to the state court that his quantum meruit fee was only $2 million. (Jacoby & Meyers LLP's Post-Trial Memorandum in Support of Proposed Findings of Fact and Conclusions of Law, dated July 17, 2009 (\"J & M Findings\"), Ex. 4, at 6; Ex. 5, at 1; Ex. 6, at 1 (ECF Doc. # 107).)\n[5] Oddly, Heller may have been the only person who still had files that were not part of the Record on Appeal. The defendants were represented by Hill, Betts & Nash whose files were destroyed in the World Trade Center attack on September 11, 2001. (Trustee's Motion for: (I) Approval of Settlement of the Debtor's Wrongful Death Actions Pursuant to Federal Rule of Bankruptcy Procedure 9019(a); (II) Approval of Allowance and Payment of Fees and Expenses of Special Personal Injury Attorneys to the Trustee Pursuant to a Contingency Fee Agreement and Under Bankruptcy Code \u00a7\u00a7 328 and 330; (iii) a Determination of the Amount of Compensation, if any, of Kenneth Heller, Former Special Counsel to the Trustee; (iv) a Determination of the Amount of the Lien of New York State Insurance Fund; (v) Partial Payment of a Surplus to The Debtor; and (vi) Such Other relief as the Court Deems Just, dated August 13, 2008 (\"Trustee's 9019 Motion\"), Ex. D (ECF Doc. # 27).)\n[6] Giving him the benefit of the doubt, Heller's motivation was a concern that the debtor was a seaman's widow, and hence, a \"ward of admiralty.\" As such, a release of her rights was subject to special scrutiny.\n\nPutting to one side the question of Heller's standing to raise Mrs. Emanuel's personal rights, his argument suffered from two flaws. First, a seaman's special status is personal, and his widow is not a \"ward of admiralty\" entitled to special protection. Lampsis Navigation Ltd. v. Ortiz De Cortes, 694 F.2d 934, 936 (2d Cir., 1982). Second, and more important, the Appellate Division determined that Mr. Emanuel was a longshoreman, not a seaman. A longshoreman is not a \"ward of admiralty,\" and his release of personal injuries\u0097even those sustained aboard a vessel\u0097is not entitled to strict scrutiny. Capotorto v. Compania Sud Americana de Vapores, Chilean Line, Inc., 541 F.2d 985, 987 (2d Cir.1976).\n[7] As noted, neither side supplied the Heller retention application or retention order.\n[8] John D. Coulter, Esq., a maritime attorney, testified that Heller had been \"considered one of the preeminent maritime attorneys in New York City ... [i]n the country, really.\" (Tr. 17.) He did not explain how he reached this conclusion or with whom he had discussed Heller's reputation. In addition, Coulter has apparently been working with Heller on this matter, and was charging him $200.00 per hour for his testimony. (Tr. at 38.) While Coulter was sincere, I attribute his high esteem of Heller to his loyalty to one who is essentially his client.\n[9] Saul Rudes, Esq., wrote to the Court after the trial, requesting an opportunity to be heard and making certain statements, some evidentiary in nature, regarding why Heller should receive a substantial fee. (Letter, dated July 9, 2009 (ECF Doc. # 102).) Rudes is a judgment creditor of Heller, but is not a creditor of the estate. As a creditor of a creditor, he lacks standing to be heard. See In re Comcoach Corp., 698 F.2d 571, 573-74 (2d Cir.1983) (\"Bankruptcy Courts were established to provide a forum where creditors and debtors could settle their disputes and thereby effectuate the objectives of the statute. Necessarily, therefore, the Bank must be either a creditor or a debtor to invoke the court's jurisdiction.\"); Southern Blvd., Inc. v. Martin Paint Stores, 207 B.R. 57, 61 (S.D.N.Y. 1997) (\"A creditor, under the Code, is one who has a claim against the debtor or the estate. The concept does not, according to the Second Circuit, encompass a creditor of one of the debtor's creditors.\") (emphasis in original) (internal citations omitted). Furthermore, to the extent he had relevant evidence to offer regarding Heller's quantum meruit fee, the place to do so was at the trial. Accordingly, the Court disregards his unsworn, post-trial \"testimony.\"\n[10] The same or similar records had been submitted to the New York Supreme Court in the course of Heller's efforts to fix the amount of his charging and retaining liens. At trial, Harmon was confronted with an affidavit that she prepared, Heller signed and both submitted to the state court, stating that Heller had reviewed the files and prepared what became Exhibit A. She conceded that the affidavit was \"literally not true,\" invoked the Fifth Amendment and refused to answer any further questions on the subject. (Tr. 60.)\n[11] Harmon contended that she underestimated the amount of time spent on various tasks. The evidence showed, however, that certain entries were wildly excessive. For example, Harmon testified that Heller and his firm spent 80 hours preparing a 14-page document request (Tr. 111), 383 hours preparing an affirmation in opposition to a motion (Tr. 111), 1,000 hours reviewing trial transcripts (Tr. 121), and 2,136 hours preparing a single brief. (Tr. 170.)\n[12] Heller served trial subpoenas the day before trial on Hill, Betts & Nash and Carol R. Finocchio, Esq., the defendants' appellate lawyer, to require them to produce the Record on Appeal as well as certain other documents. The Court quashed both subpoenas at the request of the subpoenaed parties. The subpoenas were served the day before trial and demanded records that had been sent to storage. More importantly, the Record on Appeal was publicly available, and Heller could have obtained a copy from the public source. (Tr. 10-11.)\n[13] Heller's egregious post withdrawal conduct is relevant in fixing his quantum meruit fee. See Williams v. Hertz Corp., 91 A.D.2d 548, 457 N.Y.S.2d 23, 25-26 (N.Y.App.Div. 1982) (remanding to the trial court to determine whether former counsel was discharged for cause and if not, to fix his quantum meruit fee, based on allegations, inter alia, that former counsel had committed post-discharge acts of professional disloyalty, disregarded the client's interest by withholding the file and exhibited professional discourtesy toward substitute counsel), aff'd, 59 N.Y.2d 893, 465 N.Y.S.2d 937, 452 N.E.2d 1265 (1983). Ironically, Heller was also the former counsel in Williams whose egregious conduct in that case led to the remand.\n"} -{"text": "60 F.3d 839NOTICE: Federal Circuit Local Rule 47.6(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.\nNorelene M. HAMLIN, Petitioner,v.DEPARTMENT OF the ARMY, Respondent.\nNo. 95-3140.\nUnited States Court of Appeals, Federal Circuit.\nApril 13, 1995.\n\nBefore MICHEL, RADER and BRYSON, Circuit Judges.\nDECISION\nPER CURIAM.\n\n\n1\nNorelene M. Hamlin appeals from the October 27, 1994 decision of the Merit Systems Protection Board (Board), No. SL-0432-94-0320-I-1, denying review of the August 5, 1994 initial decision of the Administrative Judge (AJ). Because the Board did not abuse its discretion in so denying review, we affirm.\n\nDISCUSSION\n\n2\nOn April 14, 1994, following Hamlin's failure to improve to a satisfactory level in accordance with a Performance Improvement Plan, the Department of the Army (Army) notified Hamlin of her removal. Hamlin made a timely appeal to the Board.\n\n\n3\nPrior to the scheduled hearing, Hamlin settled her case with the Army. In a telephonic conference with the AJ, Hamlin's attorney stated that the provisions of the settlement agreement had been discussed with Hamlin and that she understood them. Finding the settlement agreement lawful on its face and to have been freely reached by the parties, the AJ entered the settlement agreement into the record and dismissed Hamlin's appeal.\n\n\n4\nHamlin subsequently filed a petition for review with the Board. Hamlin sought to have the settlement agreement set aside on the ground that it was tainted with fraud and coercion. Pursuant to 5 C.F.R. Sec. 1201.115 (1994), the Board summarily denied Hamlin's petition for review. She timely appealed to this court.\n\n\n5\nWe have held that \"those who employ the judicial appellate process to attack a settlement agreement through which controversy has been sent to rest bear a properly heavy burden.\" Asberry v. United States Postal Serv., 692 F.2d 1378, 1380 (Fed. Cir. 1982). Thus, Hamlin has the burden of showing that the settlement agreement was, as she alleges, tainted by coercion or fraud. Moreover, we may set aside only those decisions of the Board that are shown to be arbitrary, capricious, an abuse of discretion, unlawful, or unsupported by substantial evidence. 5 U.S.C. Sec. 7703(c) (1988). The controlling question is therefore whether Hamlin has shown that the settlement agreement was tainted such that the Board's refusal to vacate it constituted an abuse of discretion. Asberry, 692 F.2d at 1380.\n\n\n6\nHamlin has made no such showing. No basis exists for her allegation that her execution of the settlement agreement was involuntary. In fact, the record shows that Hamlin was represented by counsel, was informed by counsel of the significance of the settlement agreement, and understood the consequences of signing the settlement agreement. Her allegation that the Army's ability to pursue a complaint against her with the state nursing board constituted coercion is without merit. It is not coercive for an agency to insist upon a legally permissive course of action and to remind an employee of the consequences thereof. See Liebherr Crane Corp. v. United States, 810 F.2d 1153, 1158 (Fed. Cir. 1987). It is also well settled that financial hardship does not constitute coercion: \"Every loss of employment entails financial hardship. If that alone were sufficient to establish economic duress, no settlement involving it would ever be free from attack.\" Asberry, 692 F.2d at 1381. Finally, the record is bereft of any showing of fraud.\n\n\n7\nFor these reasons, we conclude that the Board did not abuse its discretion by declining to set aside the settlement agreement between Hamlin and the Army.\n\n"} -{"text": "\n104 Ariz. 280 (1969)\n451 P.2d 609\nJesus RODRIQUEZ and Anita Rodriquez, husband and wife, Appellants [Respondents],\nv.\nDonald Milo WILLIAMS and Billie June Williams, husband and wife; and Navajo Freight Lines, Inc., a corp'n, Appellees [Petitioners].\nNo. 9452-PR.\nSupreme Court of Arizona, In Banc.\nMarch 13, 1969.\n*281 Charles Christakis, Phoenix, for appellants.\nMcKesson, Renaud, Cook, Miller & Cordova, Phoenix, for appellees.\nUDALL, Chief Justice:\nPlaintiffs sued defendants for personal injuries received in an automobile accident. A jury rendered a verdict in favor of defendants, and plaintiffs appealed to the court of appeals where the case is docketed as # 1 CA-CIV 890.\nShortly thereafter, the trial judge informed counsel for both parties, that the superior court clerk had inadvertently destroyed all of the exhibits in the case. Plaintiffs promptly moved for a new trial. The trial judge properly denied the motion for the reason that his jurisdiction ceased upon perfection of the appeal. This principle is well settled in Arizona. State v. Ruben Federico, 104 Ariz. 49, 448 P.2d 399. Any other rule would permit a trial court *282 and an appellate court to consider the same case at the same time. This would make it possible for the trial court to award a new trial on the same day that the appellate court affirmed the judgment. A rule allowing such a result would be workable.\nAppellants then filed a motion for a new trial in the court of appeals, alleging that the destruction of the exhibits was not due to any fault on their part; that the exhibits were material and essential to their appeal; and that they could not be replaced. Appellees resisted the motion, citing Yerger v. Bross, 68 Ariz. 104, 201 P.2d 121, for the proposition that an appellate court's jurisdiction on appeal is confined to reviewing judgments of lower courts; that a motion for a new trial is an original rather than an appellate proceeding; that an appellate court, therefore, has no jurisdiction to hear a motion for a new trial.\nIn so far as Yerger, supra, holds that a motion for a new trial is not a proper pleading to file in an appellate court, we agree. State v. Davis and Sturgeon, 104 Ariz. 142, 449 P.2d 607. The reason for this rule is that an appellate court is neither equipped, nor intended, to function as a forum for hearing evidence or determining issues of fact. Such proceedings properly belong in the trial court.\nHowever, it does not follow from Yerger, supra, that there is no remedy for an appellant who finds that after perfecting his appeal, there is newly discovered evidence, as in Davis, supra, or that parts of the record are missing, as in the instant case. The appellate courts of this state were created by the Arizona Constitution, Articles 6(4) and 6(9), A.R.S., to hear and decide appeals, and they have inherent power to make any orders necessary to carry out those functions. In the now famous words of John Marshall, in M'Culloch v. Maryland, 4 Wheat 316, 421, 4 L.Ed. 579, 605:\n\"Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist [sic] with the letter and the spirit of the constitution, are constitutional.\"\nThe Supreme Court of Delaware states the principle in these words:\n\"Our jurisdiction over a case tried below attaches when the appeal is filed. We have the power, we think, to order such further proceedings as may insure the completion or re-taking of the lost testimony in order to protect our jurisdiction and to protect the appellant's right of appeal, temporarily impaired by no fault of her own.\" Moore v. Moore, Del., 1 Storey 258, 144 A.2d 765 (1958).\nWhat, then, is a litigant's remedy when, because of new evidence or because of a loss of an essential part of the record, his appeal will not be able to give him justice?\nIn a criminal case, he should file in the court in which the appeal is pending, a motion to suspend the progress of the appeal and to reinstate the trial court's jurisdiction over the case for the limited purpose of hearing evidence, making findings, and entering an order granting or denying a new trial. As we said in State v. Sims, 99 Ariz. 302, 409 P.2d 17:\n\"Our order directing the superior court to determine the supplementary motion for a new trial was a remand for a limited purpose and reinstated the jurisdiction in the superior court to take the necessary and appropriate action.\"\nIn a civil case, the situation is somewhat different. The prevailing party in the lower court has won the case. We cannot lightly deprive him of his victory. R.C.P. 59(d), 16 A.R.S., requires that a motion for a new trial in a civil case be filed within 10 days (except when based upon new evidence, in which case it must be filed before the expiration of the time allowed for appeal).\nOn the other hand, while the appellee has won a valuable right, the appellant's right to a meaningful appeal, is also valuable. When an essential part of the record has been lost without any fault on the part of *283 the appellant, a refusal to grant relief is final and irrevocable and there is no way that the appellant can rectify an erroneous judgment. Obviously, no matter which way this court decides the case, one party's justice is going to be less than complete. But that result is due to the losing of the record, not to our failure to render a just decision.\nThere are many ways that parts of the trial record can become unavailable. The courthouse may burn down. The court reporter may die or become disabled. The clerk may, by mistake, destroy the exhibits, as in the instant case. When such occurrences are clearly proved, the appellant is entited to all the relief possible. In some cases, the missing parts may not be essential. In other cases, it may be possible to reconstruct the lost parts by stipulation or findings, pursuant to R.C.P. 75(h). All of these situations involve facts concerning which evidence must be taken, and findings made. Perhaps some witnesses may be recalled, if a point arises upon which the parties cannot agree and the trial judge cannot remember. All such procedure can best take place in the trial court, which has lost jurisdiction because of the filing of the appeal.\nThe proper procedure, therefore, is to file in the court in which the appeal is pending, a motion to suspend the progress of the appeal and to reinstate the trial court's jurisdiction over the case for the limited purpose of reconstructing the record. Appellant should attach to his motion, a verified statement of facts showing his right to such relief. Among such facts would be the cause of the loss of the record, the materiality of the lost items, the impossibility of reproducing them, etc.\nIf the motion is granted, the trial court should assist counsel to overcome the loss of the missing records, and should determine whether the allegations in appellant's statement are true and sufficient, whether he has properly cooperated in the attempt to reconstruct the record, etc.\nWe have frequently held that we prefer to determine cases on their merits rather than on points of procedure. Colboch v. Aviation Credit Corp., 64 Ariz. 88, 166 P.2d 584. We have also held that we look to substance rather than to form. Goodman v. State, 96 Ariz. 139, 393 P.2d 148. We, therefore, can and do treat the motion for a new trial filed in the instant case, as a motion to suspend the progress of the appeal and to reinstate the trial court's jurisdiction over the case for the limited purpose of reconstructing the record. If the record cannot be supplied and appellant cannot present a meaningful appeal then, consistent with our views expressed in Yerger v. Bross, supra, the appeal must be dismissed.\nThe case is remanded to the court of appeals for the entry of an order consistent with this opinion.\nLOCKWOOD, V.C.J., and STRUCKMEYER, McFARLAND and HAYS, JJ., concur.\n"} -{"text": "\n620 P.2d 652 (1980)\nB.J.B.A., Natural Mother, Appellant,\nv.\nM.J.B. and F.G.B., Adoptive Parents, Appellee.\nNo. 4733.\nSupreme Court of Alaska.\nNovember 21, 1980.\n*653 Bruce Horowitz, Alaska Legal Services, Juneau, for appellant.\nTy R. Settles, Eckert, Kalamarides & Associates, Anchorage, for appellees.\nBefore RABINOWITZ, C.J., CONNOR, BURKE and MATTHEWS, JJ., and COOKE, Superior Court Judge.\n\nOPINION\nMATTHEWS, Justice.\nOn March 9, 1978, B.J.B.A., the natural mother of M.R.B., flew to Anchorage with her child from their home in the state of Washington to place the child for adoption with M.J.B. and F.G.B. Upon her arrival, the natural mother was transported to the office of the attorney for the adoptive parents where, unaccompanied by counsel, she signed a consent to adoption and waiver of notice form. She then returned to Washington that same afternoon.\nOn May 23, 1978, the natural mother unsuccessfully attempted to notify the adoptive parents by telephone of her intention to withdraw her consent to the adoption. On May 24, a hearing was held before the probate master on the appellees' petition for adoption. The master indicated that *654 she would wait until at least June 2 before closing the proceedings to allow for filing of an adoption investigation report pursuant to AS 20.15.100.[1]\nOn May 27, the natural mother notified the master by wire of her desire to withdraw her consent.[2] On May 30, the probate master notified the natural mother that, based on the March 9 consent, \"there appears to be no reason to prevent entry of a decree\" of adoption, but that an appeal from the decree could be taken. On June 5, before filing of the investigation report and without finding a waiver of the report to be in the best interest of the minor child,[3] the master recommended that the petition be granted. On the same day the superior court, relying on the probate master's recommendation, but unaware of the natural mother's attempted withdrawal of consent, signed and entered the decree of adoption. The adoption investigation report was filed with the court on June 12.\nOn June 15, the natural mother moved for relief from the decree, a new trial, and interim visitation rights. This motion was denied, after various delays,[4] on October 10, 1979, and this appeal followed.\nThe issues here involve construction of AS 20.15.070, which provides:\n\nWithdrawal of Consent. a) A consent to adoption may not be withdrawn after the entry of a decree of adoption.\nb) A consent to adoption may be withdrawn before the entry of a decree of adoption, within 10 days, by delivering written notice to the person obtaining the consent, or after the 10 day period, if the court finds, after notice and opportunity to be heard is afforded to petitioner, the person seeking the withdrawal, and the agency placing a child for adoption, that the withdrawal is in the best interest of the person to be adopted and the court orders the withdrawal.\nThe natural mother contends that her consent was invalid because the consent to adoption form did not include a statement of her right to withdraw the consent within ten days. She argues that such a statement was either required by statute, or, alternatively, the failure of the statute to include such a requirement has deprived her of due *655 process of law. Second, she argues that AS 20.15.070(b) required the superior court to grant a hearing on whether she could withdraw her consent.\nThe natural mother's first point is based on a reference to the statutory provision governing relinquishment of parental rights which states that a relinquishment is invalid unless it includes a statement of the ten-day right of withdrawal.[5] The requirement of that provision, however, is not applicable to a consent to adoption. We agree that it might be beneficial to include such a requirement in AS 20.15.070, but that action is appropriate for consideration by the legislature rather than this court. As the Oregon Supreme Court stated in response to a challenge to its consent revocation statute, which bars the natural parents from revoking consent upon entry of a decree at the expiration of six months:\nSince the legislature has enacted statutes prescribing how adoptions shall be accomplished, this court has no power to change in any particular the law as expressed in those statutes... . The role of this court is limited to construing the adoption statutes and attempting to ascertain the meaning of the legislature as expressed therein.\nStrobel v. Garrison, 255 Or. 16, 464 P.2d 688, 689-90 (1970).\nThe natural mother argues in the alternative that if notice of the statutory right to withdraw one's consent to adoption within ten days after it is given is not required by AS 20.15.070(b), then that statute has violated her right to due process of law. No persuasive authority is submitted to support this argument. We have recognized, in several different contexts, that a valid consent may be given without the person whose consent is requested first being advised of his or her statutory or constitutional right to refuse. A driver's right to refuse consent to a breathalyzer test is one example. In Wirz v. State, 577 P.2d 227 (Alaska 1978), we held that in the absence of a specific statutory requirement that arrestees be advised of their right to refuse the test, \"it would be inappropriate for this court to engraft such a requirement onto [the statute].\" 577 P.2d at 230. Similarly, the constitutional right to withhold consent to a police search need not be expressly communicated. Schneckloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973); Frink v. State, 597 P.2d 154 (Alaska 1979); Henry v. State, 621 P.2d 1 (Alaska 1980). We find these authorities persuasive and decline to hold AS 20.15.070 (b) to be unconstitutional as it stands.\nThe natural mother's second point, however, is well taken. AS 20.15.070(b) provides, in addition to the absolute right of withdrawal within ten days, that one may withdraw one's consent to adoption at any time before the entry of the adoption decree if the court finds, after notice and an opportunity to be heard is afforded to all parties involved, that the withdrawal is in the best interest of the person to be adopted. No statement of reasons for the desired withdrawal is called for. The statute clearly calls for a hearing on the best interest of the child if written notice of withdrawal is filed at any time prior to entry of the decree of adoption. Since such a notice was filed, the court's failure to afford the natural mother a hearing was error.\n*656 In summary, we hold that the natural mother is entitled to a hearing to determine whether withdrawal of her consent is in the best interest of the child.[6] We remand for such a hearing and set aside the decree of adoption pending its outcome. Since the consent is valid unless and until the court orders its withdrawal pursuant to AS 20.15.070(b), the adoptive parents shall maintain interim custody. Should the court find withdrawal not in the best interest of the child, the decree may be reinstated nunc pro tunc.\nVACATED and REMANDED.\nBOOCHEVER, J., not participating.\nRABINOWITZ, Chief Justice, concurring in part, dissenting in part, joined by BURKE, Justice.\nI am in agreement with the court's construction of AS 20.15.070(b) and its holding that here the natural mother must be afforded a hearing concerning her withdrawal of consent to the adoption of her minor child. However, in my view, the decree of adoption in the case at bar must be permanently vacated, since the natural mother's consent to adoption is invalid.\nIn Delgado v. Fawcett, 515 P.2d 710 (Alaska 1973), we stated:\nThe correlative rights and duties inherent in the parent-child relationship are natural rights of such fundamental importance that it is generally held that parents should not be deprived of them `except for grave and weighty reasons.' In an adoption proceeding, where an absolute severance of this relationship is sought, the consent provisions are designed to protect the natural rights of a parent to the custody, society, comfort, and services of the child.[1]\nIn recognition of the substantial rights of a natural parent which are implicated in adoption proceedings, the legislature in part has provided that:\nA consent to adoption may be withdrawn before the entry of a decree of adoption, within 10 days, by delivering written notice to the person obtaining the consent.[2]\nGiven the \"essential\" nature of a parent's right to conceive and raise his or her children,[3] I am of the view that unless the natural parent receives actual notice of the protection afforded by AS 20.15.070(b) his or her consent to adoption is invalid.\nIn past decisions, this court has stressed the importance of adequate notification of a party's rights in cases involving economic relations. Aguchak v. Montgomery Ward Co., Inc., 520 P.2d 1352 (Alaska 1974). In Aguchak, a summons to appear in a small claims proceeding did not mention the receiving party's right to file a written pleading rather than make a personal appearance. We held the summons to be defective and a denial of due process because it did not adequately inform the receiving party of his option of filing a written pleading and therefore failed to convey the constitutionally required information sufficient to afford the party an opportunity to be heard. Id. at 1356. Surely notification of a natural mother's rights, when that parent is involved in adoption proceedings which could sever, for all time, her rights and interests as a natural parent, is equally, if not more, significant. As the Supreme Court said in Stanley v. Illinois, 405 U.S. 645, 92 S.Ct. 1208, 31 L.Ed.2d 551 (1972):\nIt is plain that the interest of a parent in the companionship, care, custody, and management of his or her children `come[s] to this Court with a momentum for respect lacking when appeal is made *657 to liberties which derive merely from shifting economic arrangements.'[4]\nThe consent to adoption form which the natural mother signed in this case did not contain an advisement that she had the right to withdraw her consent within ten days. This omission was particularly important here because placement of the child with the adoptive parents and execution of the consent occurred simultaneously.[5] I consider it of further significance that the consent to adoption was executed by the natural parent, without the advice of independent counsel, in the office of the adoptive parent's attorney and acknowledged by that attorney.[6] For these reasons, I conclude that the natural mother, in the factual context of this case, was denied due process of law under Article I, section 7 of the Alaska Constitution and thus that her consent was invalid.[7]\nOne further observation is appropriate. I agree with the majority that, to avoid future injustice, it would be helpful to include a statutory provision in AS 20.15.070 similar to the provisions governing relinquishment of parental rights,[8] which would provide that a consent to adoption is invalid unless it includes a statement that the parent has a ten-day right of withdrawal.\nNOTES\n[1] AS 20.15.100 provides in part:\n\n(d) Except as provided in (g) and (i) of this section, an investigation shall be made by the department or any other qualified agency or person designated by the court to inquire into the conditions and antecedents of a minor sought to be adopted and of the petitioner for the purpose of ascertaining whether the adoptive home is a suitable home for the minor and whether the proposed adoption is in the best interest of the minor.\n(e) A written report of the investigation shall be filed with the court by the investigator before the petition is heard so long as the report is filed within 30 days of the designation by the court of the department, agency or person to make the investigation.\n(f) The report of the investigation shall contain an evaluation of the placement with a recommendation as to the granting of the petition for adoption and any other information the court requires regarding the petitioner or the minor.\n[2] The court was also notified of the withdrawal by counsel on May 30, 1975.\n[3] AS 20.15.100(g) provides:\n\n(g) Unless directed by the court, an investigation and report is not required in cases in which an agency is a party or joins in the petition for adoption, a step-parent is the petitioner, the person to be adopted is within the fourth degree of lineal or collateral consanguinity to the petitioner, or the person to be adopted is an adult. In other cases, the court may waive the investigation only if it appears that the waiver is in the best interest of the minor and that the adoptive home and the minor are suited to each other. The department which is required to consent to the adoption may give consent without making the investigation.\n[4] Part of the delay was occasioned by the adoptive parents' challenge to the natural mother's eligibility for representation by Alaska Legal Services Corporation. \"[T]he determination of `eligibility' is an administrative decision within the scope of decision of the corporation and its recipients.\" Martens v. Hall, 444 F. Supp. 34, 35 (S.D.Fla. 1977). See generally, Dimmick v. Watts, 490 P.2d 483 (Alaska 1971). Although Alaska Legal Services does not have unlimited discretion in determining whether to accept clients, we can see no interests other than vexatious ones that were promoted by counsel for the adoptive parents in challenging such a determination. See Public Defender Agency v. Superior Court, 534 P.2d 947, 952 n. 7 (Alaska 1975).\n[5] AS 20.15.180(b)(1) provides:\n\nb) All rights of a parent with reference to a child, including the right to receive notice of a hearing on a petition for adoption, may be relinquished and the relationship of parent and child terminated by a writing, signed by the parent, regardless of the age of the parent, a copy of which shall be given to the parent,\n1) in the presence of a representative of an agency taking custody of the child, whether the agency is within or outside of the state or in the presence and with the approval of a court within or outside of this state in which the minor was present or in which the parent resided at the time it was signed, which relinquishment may be withdrawn within 10 days after it is signed or the child is born, whichever is later; and the relinquishment is invalid unless it states that the parent has this right of withdrawal;\n[6] As one factor in this determination the court should consider the circumstances as they were in May of 1978 when withdrawal of this consent was attempted. Of course, present circumstances must also be weighed.\n[1] 515 P.2d at 712, quoting In re Parks' Petition, 267 Minn. 468, 127 N.W.2d 548, 553 (Minn. 1964) (footnotes omitted).\n[2] AS 20.15.070(b).\n[3] Stanley v. Illinois, 405 U.S. 645, 651, 92 S.Ct. 1208, 1212, 31 L.Ed.2d 551, 558-59 (1972).\n[4] 405 U.S. at 651, 92 S.Ct. at 1212, 31 L.Ed.2d at 558, quoting Kovacs v. Cooper, 336 U.S. 77, 95, 69 S.Ct. 448, 458, 93 L.Ed. 513, 527 (1949) (Frankfurter, J., concurring).\n[5] Where placement and consent occur at the same time, the 10-day withdrawal provision of AS 20.15.070(b) provides an opportunity for reflection upon the consent decision beyond the potentially emotional moment of placement.\n[6] There is nothing in the record to indicate that the natural parent had notice of her withdrawal right in time for her to exercise it within the 10-day period.\n[7] Although the consent to adoption form that the natural mother signed contained a \"waiver of notice\" provision, this waiver was invalid because it contained no description of what actual rights and provisions were being waived. See Fuentes v. Shevin, 407 U.S. 67, 94-96, 92 S.Ct. 1983, 2001-02, 32 L.Ed.2d 556, 578-79 (1972).\n\nUnlike the authorities referred to in the court's opinion, we are dealing here with an explicit legislative grant of a right to withdraw a consent to adoption. Given the fundamental importance of the parent-child relationship and the right of withdrawal, granted by AS 20.15.070(b), I find the authorities cited by the majority unpersuasive.\n[8] See AS 20.15.180(b)(1). Compare Indian Child Welfare Act \u00a7\u00a7 103(a), (c), 25 U.S.C.A. \u00a7\u00a7 1913(a), (c) (West Supp. 1980).\n"} -{"text": "\n361 So.2d 1195 (1978)\nPhillip MATTHEWS\nv.\nSTATE.\n8 Div. 61.\nCourt of Criminal Appeals of Alabama.\nAugust 29, 1978.\n*1196 Phillip Matthews, pro se.\nWilliam J. Baxley, Atty. Gen. and Elizabeth N. Petree, Asst. Atty. Gen. for the State, appellee.\nCLARK, Retired Circuit Judge.\nA jury found appellant guilty of forgery of a check drawn on First Alabama Bank of Huntsville for the sum of Three Hundred Nine Dollars and Forty Cents, which constitutes forgery in the first degree. Code of Alabama, Recomp. 1958, Tit. 14, \u00a7 199. The court fixed his punishment at imprisonment for five years, which is within the limits prescribed by Tit. 14, \u00a7 207.\nDefendant was at first represented by employed counsel. In the course of such representation a trial of defendant was commenced, but a mistrial was ordered and the case continued for trial at the request of defendant. Upon the call of the case for trial that resulted in the conviction from which this appeal was taken, defendant informed the court that he was dissatisfied with his employed counsel and requested the court to appoint him counsel, and not appoint the counsel whom he had employed. The court complied with the request and appointed counsel to represent defendant as an indigent and held the case in abeyance until the next day, in order for defendant and his appointed counsel to prepare together for the trial.\n*1197 Upon call of the case for trial the next day, his appointed counsel informed the court that defendant had asked him \"to ask the court if he would be allowed to represent himself without the benefit of an attorney.\" After a lengthy colloquy between the court and defendant, in which defendant continued to insist that he be allowed to represent himself, and a warning from the court that he was making a mistake, the court allowed him to represent himself on the trial, with the understanding, which was agreeable to defendant, that his appointed counsel would sit with him and be with him to assist him in defending himself, which said counsel did.\nDefendant made a preliminary motion for a psychiatric examination, but in the course of a discussion of it, he withdrew the motion and requested the court to \"proceed with the trial.\"\nDonna Hopper testified that while she was employed by First Alabama Bank of Huntsville on August 4, 1977, she was presented a check by defendant that purported to be a check drawn on said bank by Sledge Upholstery, dated August 4, 1977, and payable to Reggie Hyder for the sum of Three Hundred Nine Dollars and Forty Cents. She positively identified defendant as the person who presented the check. She recalled that at the time the check was presented she took a nondriver's I.D. card with the name Reggie Hyder thereon as identification. She said defendant presented the check to her for deposit, \"less cash,\" that only thirty dollars of the amount was actually deposited to the account of Reggie Hyder and the balance of two hundred seventy-nine dollars and forty cents was delivered to defendant.\nJames Sledge, owner of Sledge Upholstery, testified that defendant had worked for him about a month, but that the purported check of Sledge Upholstery for three hundred nine dollars and forty cents was not signed by him or by anyone authorized by him to sign such a check. He said the purported signature of James Sledge on the check was not the witness' signature. He further said he did not know Reggie Hyder, whose name was on the check as the payee thereof. According to the witness, the check was on one of the printed forms of checks being used by Sledge Upholstery and that while defendant was working for the company defendant had access to the company checks, which were kept under the office desk. The particular check was similar in form to three cancelled paychecks of the previous month which were payable to defendant and which were admitted in evidence.\nDefendant himself did not testify, but he presented evidence of the operations of the License Department of the Alabama Department of Public Safety showing that upon proper identification and the payment of a fee, a non-driver can obtain an I.D. card, that a Reggie Hyder had been issued a non-driver's I.D. card, but no Reggie Hyder had been located.\nWhen defendant stated he would take an appeal from the conviction, the court first appointed as his attorney on appeal the same attorney that represented him on the trial, but upon the request of appellant that he \"be permitted to perfect and direct his own appeals,\" the court relieved appellant's former attorney \"from further proceeding in this matter\" and appointed another highly regarded attorney of the Huntsville Bar \"to assist the defendant\" on appeal. Appellant has made his appearance in a pro se brief in which he acknowledges the assistance of counsel appointed by the court to assist him.\nIn the first part of his brief, appellant argues for a reversal on account of alleged failure of his counsel to obtain a preliminary hearing and refusal to \"present the probable cause question to the court, as well as the question of illegal arrest.\" There is nothing in the record to support appellant's assertion. Furthermore, as there is an indictment upon which the prosecution is based, the matters complained of furnish no cause for a reversal as they have no bearing on the validity of proceedings that are based upon a valid indictment. Queor v. State, 278 Ala. 10, 174 So.2d 687 (1965); Bowman v. State, 44 Ala.App. 331, *1198 208 So.2d 241 (1968); Core v. State, 50 Ala.App. 533, 280 So.2d 794, cert. denied 291 Ala. 776, 280 So.2d 797 (1973); Jordan v. State, 56 Ala.App. 55, 318 So.2d 793, cert. denied, 294 Ala. 761, 318 So.2d 801 (1974); Scaife v. State, Ala.Cr.App., 337 So.2d 146 (1976).\nIt appears that while Donna Hopper was testifying, she was shown a photograph which she testified had been exhibited to her by Howard Bolling, a parole officer, a short time after August 4, 1977. She testified that the photograph was the likeness of defendant. The photograph was never admitted or offered in evidence, although defendant at one time while holding the photograph in his hand exhibited it to the jury and stated that he would \"like to exhibit it to the jury.\" Reference was made in her testimony to other photographs of defendant that Mr. Bolling had shown her after August 4, 1977. It appears that no photographs of persons other than defendant were shown her by Mr. Bolling.\nAppellant contends that the fact that the witness was shown photographs of defendant by Mr. Bolling, and of nobody else, constituted such impermissibly suggestive identification procedure as to taint and thereby vitiate her in-court identification of defendant.\nWhether an in-court identification has been so tainted by an extrajudicial identification as to vitiate the in-court identification is not to be determined solely by the circumstances of the extrajudicial identification, but all of the circumstances relative to the identification of defendant by the witness are to be taken into consideration, and if it is determinable therefrom that an in-court identification was independent of the extrajudicial identification, evidence of the in-court identification is admissible. Spears v. State, 57 Ala.App. 525, 329 So.2d 579, cert. denied 295 Ala. 420, 329 So.2d 582 (1976); Impson v. State, Ala.Cr. App., 331 So.2d 837, (1976); Cross v. State, Ala.Cr.App., 351 So.2d 698 (1977); Brown v. State, Ala.Cr.App., 342 So.2d 1367 (1977); Donilson v. State, Ala.Cr.App., 350 So.2d 738 (1977).\nObviously cognizant of the principle of law just stated, the trial court questioned the witness on the particular point in a hearing out of the presence of the jury, as shown by the following:\n\". . . Let me ask you this, please M'am; are you testifying in court as to identification of this witness based on the appearance of the photograph or from your own personal knowledge?\n\"A My own personal knowledge.\n\"THE COURT: And your recollection of him at that time?\n\"A Yes, sir.\"\nWe are convinced that the record supports the quoted statement of the witness to the effect that no photographs shown her by Mr. Bolling had any influence upon her in-court identification of defendant, and, therefore, did not taint the incourt identification. She was positive as to her recollection of defendant as he presented the allegedly forged check to her for a \"less cash\" deposit. It was a part of her duty to the bank at that time to identify the one presenting the check as the person named in it as payee and as the person whose photograph on the non-driver's identification card was exhibited to her for comparison. In addition, the witness said that prior to the date of the alleged forgery she had had occasion to see the defendant when she was working out at the drive-in area of the same bank. Appellant asserts as error the action of the court in allowing the State to present testimony by another witness, Connie Tucker, of another forgery by appellant of another purported check of Sledge Upholstery on August 4, 1977. That check was also payable to Reggie Hyder and was for three hundred nine dollars and sixty cents. It appears that a separate indictment was returned against appellant for the forgery of that check, that he has been tried and convicted as to that indictment and has appealed his conviction. Notwithstanding the general rule that evidence of another crime is not usually admissible in a particular case, the evidence here considered is admissible *1199 under at least two exceptions (criminal intent and identity) to the general rule of exclusion.\n\"The crime of forgery in Alabama has, as its crucial element, a requisite intent on the part of the defendant to defraud. As tending to prove this intent, the State is allowed to introduce evidence that the accused forged other paper of a similar kind at or about the time of the commission of the charged offense, which purported to have been executed by the same person.\" Gamble, McElroy's Alabama Evidence, 3d Ed. (1977), \u00a7 70.01(11).\nIncluded among the authorities cited by the author are Christison v. State, 41 Ala.App. 192, 142 So.2d 666 (1916), aff'd, 273 Ala. 564, 142 So.2d 676 (1962); Hall v. State, 21 Ala. App. 476, 109 So. 847, cert. denied 215 Ala. 148, 109 So. 849 (1926); Kirby v. State, 17 Ala.App. 151, 82 So. 641, cert. denied 203 Ala. 473, 83 So. 416 (1919).\nAppellant states in his brief that the State \"presented a witness posing under the disguise of defense witness\" and says that the record incorrectly lists him as a defense witness and incorrectly indicates that he was called as a witness for the defense. The record shows that the witness was first interrogated by defendant and thereafter was cross-examined by the State. We do not find that the record is inaccurate in referring to the witness as defense witness. At any rate, such a reference to him in the record is a formality of the record that did not form a part of the actual trial of the case and thereby come to the attention of the jury and could not have been harmful to defendant.\nAppellant lists a large number of questions asked witnesses by the prosecution and complains that they constitute leading questions. Some of them are not leading. As to some of them, no objections were made. As to any of them that were leading and as to which objections were made, we find that rulings of the court were well within its discretionary province in permitting leading questions on direct examination.\nAppellant argues that the judgment and sentence should be reversed because of the reference to Mr. Howard Bolling as a parole officer during the interrogation of Donna Hopper as a witness for the State as to photographs of defendant shown her by Mr. Bolling. Appellant contends that such reference was prejudicial to him in that it tended to show that he had been previously convicted of crime. There may be good ground for the conclusion of probable injury from such reference, but we do not find that any effort was made by defendant, by objection, motion to exclude, motion for a mistrial, or other action, to eradicate the injury claimed. Defendant invoked no action of the court as to the particular point, and the court should not be charged with error as to it.\nAs a final contention, appellant claims that the attorney appointed by the court to assist him in the defense, he having elected to defend himself, \"interfered with the defense.\" This contention is not supported by the record, in our opinion. The attorney had an obviously difficult role but one which defendant deliberately and knowingly chose for him to assume. On the whole, we find that he performed his duty well and that nothing that he did constituted an interference with the defense, as charged.\nWe have found no error in the record prejudicial to defendant and the judgment of the trial court should be affirmed.\nThe foregoing opinion was prepared by Retired Circuit Judge Leigh M. Clark, serving as a judge of this Court under the provisions of \u00a7 6.10 of the New Judicial Article (Constitutional Amendment No. 328). His opinion is hereby adopted as that of the Court. The judgment below is hereby\nAFFIRMED.\nAll the Judges concur.\n"} -{"text": "\n\nPeople v Flores (2015 NY Slip Op 00634)\n\n\n\n\n\nPeople v Flores\n\n\n2015 NY Slip Op 00634\n\n\nDecided on January 26, 2015\n\n\nAppellate Division, First Department\n\n\nPublished by New York State Law Reporting Bureau pursuant to Judiciary Law \u00a7 431.\n\n\nThis opinion is uncorrected and subject to revision before publication in the Official Reports.\n\n\n\nDecided on January 26, 2015\n\nTom, J.P., Acosta, Saxe, Moskowitz, Feinman, JJ.\n\n\n14043 1411/99\n\n[*1] The People of the State of New York, Respondent,\nvNelson Flores, Defendant-Appellant.\n\n\nSeymour W. James, Jr., The Legal Aid Society, New York (Eve Kessler of counsel), for appellant.\nRobert T. Johnson, District Attorney, Bronx (William Terrell, III of counsel), for respondent.\n\nOrder, Supreme Court, Bronx County (Barbara F. Newman, J.), entered on or about April 5, 2010, which denied defendant's CPL 440.46 motion for resentencing, unanimously affirmed.\nThe court properly exercised its discretion in determining that substantial justice dictated the denial of resentencing (see e.g. People v Rodriguez, 116 AD3d 639 [1st Dept 2014], lv denied 23 NY3d 1042 [2014]). Among other things, defendant absconded and remained a fugitive for many years, during which time he trafficked in drugs in various states, and engaged in such activity even while he was in federal custody. Contrary to defendant's assertion, the court expressly considered evidence of defendant's rehabilitation during his most recent period of\nincarceration, and concluded that it was outweighed by the factors militating against resentencing (see People v Marte, 44 AD3d 442 [1st Dept 2007], appeal dismissed 9 NY3d 991 [2007]).\nTHIS CONSTITUTES THE DECISION AND ORDER\nOF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.\nENTERED: JANUARY 26, 2015\nCLERK\n\n\n"} -{"text": "17 F.3d 394\nNOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.Vincent Sharnee JOHNSON, Plaintiff-Appellant,v.Eddie YLST, Warden; Ward Brown, Chief Medical Officer,Defendants-Appellees.\nNo. 93-15691.\nUnited States Court of Appeals, Ninth Circuit.\nSubmitted Dec. 20, 1993.*Decided Jan. 7, 1994.\n\nBefore: SNEED, NOONAN, and TROTT, Circuit Judges.\n\n\n1\nMEMORANDUM**\n\n\n2\nVincent Sharnee Johnson, a California state prisoner, appeals pro se the district court's order granting summary judgment to defendant Ylst. We conclude that we lack jurisdiction for want of a final appealable order, and we dismiss the appeal.\n\n\n3\nWhile neither party has raised the issue of jurisdiction, we consider our jurisdiction sua sponte. Hoohuli v. Ariyoshi, 741 F.2d 1169, 1171 n. 1 (9th Cir.1985). A district court order dismissing some but not all of the defendants is not a \"final decision\" appealable under 28 U.S.C. Sec. 1291. McGuckin v. Smith, 974 F.2d 1050, 1053 n. 1 (9th Cir.1992); Patchick v. Kensington Publishing Corp., 743 F.2d 675, 677 (9th Cir.1984) (per curiam). Nevertheless, upon an express determination that there is no just reason for delay and upon an express instruction for the entry of judgment, the district court may direct the entry of a final judgment as to one or more but fewer that all of the claims. Fed.R.Civ.P. 54(b); Frank Briscoe Co. v. Morrison-Knudsen Co., 776 F.2d 1414, 1416 (9th Cir.1985). Without a Rule 54(b) certification, orders dismissing some but not all of the defendants or claims are not final. Fed.R.Civ.P. 54(b); Frank Briscoe Co., 776 F.2d at 1416.\n\n\n4\nHere, Johnson's second amended complaint was served on two named defendants, Ylst and Brown. Both Ylst and Brown answered Johnson's complaint. On 3 April 1992, Ylst filed a motion for judgment on the pleadings or, in the alternative, summary judgment. On 18 March 1993, the district court adopted the magistrate judge's report and recommendation granting summary judgment for Ylst.\n\n\n5\nJohnson's notice of appeal was filed on 13 April 1993. Defendant Brown remained in the action after the district court granted summary judgment for Ylst. Therefore, the district court's order granting summary judgment for Ylst is not a \"final decision\" appealable under 28 U.S.C. Sec. 1291. See McGuckin, 974 F.2d at 1053 n. 1. Moreover, because the district court has not issued a Rule 54(b) certification, the order is not appealable. See Frank Briscoe Co., 776 F.2d at 1416.\n\n\n6\nAccordingly, this appeal is premature and is dismissed for lack of jurisdiction.\n\n\n7\nDISMISSED.\n\n\n\n*\n The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a); 9th Cir.R. 34-4\n\n\n**\n This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3\n\n\n"} -{"text": "\n66 P.3d 710 (2003)\n2003 WY 49\nTPJ, a minor, Appellant (Defendant),\nv.\nThe STATE of Wyoming, Appellee (Plaintiff).\nNo. C-01-3.\nSupreme Court of Wyoming.\nApril 16, 2003.\n*711 Kenneth M. Koski, State Public Defender; Donna D. Domonkos, Appellate Counsel; Ryan R. Roden, Senior Assistant Appellate Counsel, Representing Appellant.\nHoke MacMillan, Wyoming Attorney General; Paul S. Rehurek, Deputy Attorney General; D. Michael Pauling, Senior Assistant Attorney General; Georgia L. Tibbetts, Senior Assistant Attorney General; Theodore E. Lauer, Director, and Tari L. Elam, Student Intern, of the Prosecution Assistance Program, Representing Appellee.\nBefore HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.\nGOLDEN, Justice.\n[\u00b6 1] The Juvenile Court of the Ninth Judicial District adjudicated TPJ, age 16, to be delinquent following his admission of committing numerous acts of burglary. Following the adjudication hearing, at a later restitution hearing the juvenile court ordered TPJ to pay a total of $1,964.59 as restitution to the victims of his delinquent acts of burglary. The restitution amount included $41.59 as the cost of a car alarm which one of TPJ's victims purchased and installed in her car after TPJ's burglary of her car and $300.72 as the cost of repair to a garage door allegedly damaged during TPJ's burglary of another victim's residence. TPJ challenged these particular costs at the restitution hearing and renews that challenge on appeal. As for the cost of the car alarm, TPJ asserts that it is not authorized under the statutory language \"any damage or loss caused by the *712 child's wrongful act.\" Wyo. Stat. Ann. \u00a7 14-6-247(a)(v) (LexisNexis 2001). As for the cost of the garage door repair, TPJ asserts that the State failed to prove by a preponderance of the evidence that he damaged the garage door.\n[\u00b6 2] Although the State counters TPJ's challenge on its merits, it first contends that TPJ's notice of appeal is both defective and untimely filed. As we shall explain below, we hold that TPJ's appeal is neither defective nor untimely; the relevant statutory provision of the Juvenile Justice Act does not authorize an award of restitution for the cost of the car alarm purchased and installed by the victim of a delinquent act after the commission of that act; the State's evidentiary standard as to restitution under that relevant statutory provision is a preponderance standard; and, applying that evidentiary standard, the State's proof as to restitution for the garage door repair satisfied that standard. Consequently, we affirm the order of restitution with respect to the cost of the garage door repair and reverse the order of restitution with respect to the cost of the car alarm.\n\nISSUES\n[\u00b6 3] TPJ presents the following issue for our review:\nI. Did the district court abuse its discretion by ordering the appellant to pay restitution for a car alarm and alleged damage to a garage door?\nThe State contends that two issues are present in this appeal:\n1. Does the defective and untimely notice of appeal deprive this court of jurisdiction to consider this appeal?\n2. Did the juvenile court abuse its discretion in ordering appellant to pay restitution for the cost of a car alarm and for damage done to a garage door?\n\nFACTS\n[\u00b6 4] The initial hearing upon the specific allegations in the delinquency petition filed by the county and prosecuting attorney, as authorized by Wyo. Stat. Ann. \u00a7 14-6-226, was held March 29, 2001. TPJ admitted committing numerous acts of burglary, including those involving the Brent Galles residence, where a garage door was allegedly damaged, and a car owned by Barbara Smith, who later purchased a car alarm, and provided a factual basis to support his admissions. Following TPJ's admission, the juvenile court broached the subject of disposition.\n[\u00b6 5] The State expressed hesitancy in proceeding in the initial hearing with disposition because it had \"no idea what the restitutional figure is.\" The juvenile court then expressed the desire to proceed with disposition without having the restitution amounts, subject to TPJ's and his counsel's consent to proceed and subject to the State's supplying those amounts to TPJ and his counsel within twenty days. The juvenile court required TPJ and his counsel to make written objections, if any, within fifteen days after the State supplied the amounts to them. All agreed to the juvenile court's proposed procedure.\n[\u00b6 6] The juvenile court then received the State's recommendation for disposition and comments about that recommendation from others present, including TPJ and his counsel. The juvenile probation coordinator, Teri Van Etten, who had prepared the dispositional report, TPJ's mother and grandmother, and TPJ's uncle were also present. Next, the juvenile court announced its disposition which included, among other matters, TPJ's placement at the Wyoming Boy's School for an indeterminate period of time.\n[\u00b6 7] Before adjourning the hearing, the juvenile court instructed Ms. Van Etten to acquire and deliver the restitution information to the county attorney. Following the initial hearing, the juvenile court entered on April 2, 2001, the Order Following Initial Hearing, approved as to form by the county attorney, TPJ's counsel, and Ms. Van Etten, which order expressly included a provision addressing the court's requirement with respect to the restitution information.\n[\u00b6 8] In April 2001, the county attorney timely provided TPJ's counsel with the required restitution information which included each victim's name and address, property lost or damaged and the amounts sought in *713 restitution for each victim. TPJ's counsel timely objected in writing to certain items contained therein. Not until August 3, 2001, however, did the county attorney move in writing for a restitution hearing to resolve TPJ's objections. The juvenile court scheduled that hearing for August 22, 2001. The hearing took place as scheduled. At the hearing, the juvenile court took evidence and heard argument from counsel concerning Barbara Smith's purchase and installation of a car alarm and the estimated cost of Brent Galles' garage door repair.\n[\u00b6 9] At the conclusion of the hearing, the juvenile court announced its decision, ordering TPJ to pay a total of $1,964.59 as restitution, which included the amounts of $41.59 as the cost of the car alarm and $300.72 as the cost of garage door repair. This appeal followed.\n\nDISCUSSION\n\nStandard of Review\n[\u00b6 10] Our standard of review of restitution orders is limited to a search for procedural error or a clear abuse of discretion. Alcaraz v. State, 2002 WY 57, \u00b6 5, 44 P.3d 68, \u00b6 5 (Wyo.2002). We will not find an abuse of discretion if sufficient evidence shows a reasonable basis for estimating the loss. Id. \"Judicial discretion is a composite of many things, among which are conclusions drawn from objective criteria; it means a sound judgment exercised with regard to what is right under the circumstances and without doing so arbitrarily or capriciously.\" Id.\n[\u00b6 11] TPJ's first issue presents a question of statutory interpretation, and we look first to finding the answer in the language of these provisions. \"Determining the lawmakers' intent is our primary focus when we interpret statutes. Initially, we make an inquiry respecting the ordinary and obvious meaning of the words employed according to their arrangement and connection. We construe together all parts of the statutes in pari materia, giving effect to each word, clause, and sentence so that no part will be inoperative or superfluous. We will not construe statutes in a manner which renders any portion meaningless or produces absurd results.\" In re WJH, 2001 WY 54, \u00b6 7, 24 P.3d 1147, \u00b6 7 (Wyo.2001).\n[\u00b6 12] In considering his second issue, we see that in his reply brief, TPJ agrees with the State that in criminal cases we review whether the amount of restitution was proved by a preponderance of the evidence and that burden of proof should be applied in juvenile restitution cases. We agree and hold that is the burden of proof by which we review whether sufficient evidence proved the amount of damages to the garage door. See Renfro v. State, 785 P.2d 491, 493 (Wyo.1990).\n[\u00b6 13] The State's issue that the appeal was untimely is a jurisdictional challenge. To invoke appellate jurisdiction, appeals must be filed no later than thirty days after the district court enters its final order. In re Interest of BW, 12 P.3d 675, 677 (Wyo.2000); W.R.A.P. 2.01. The timely filing of a notice of appeal is jurisdictional. Holmquist v. State, 902 P.2d 217 (Wyo.1995). \"A late filing of an appeal results in an incurable jurisdictional defect, leaving this Court with no authority to resolve the case.\" Id. at 217-18.\n\nThe Appeal Is Neither Defective Nor Untimely\n[\u00b6 14] The juvenile court's Order Following Restitutional Hearing was entered September 4, 2001. One week later, on September 11, 2001, TPJ's counsel filed a notice of appeal giving notice of the intention to appeal the \"Judgment and Sentence of the Court rendered on the 22nd day of August, 2001, by the Honorable Nancy Guthrie, District Judge, Ninth Judicial District.\"\n[\u00b6 15] Accompanying this notice was a copy of the juvenile court's order following the restitutional hearing referenced above. The appellate proceeding progressed in normal course, with the parties submitting the case to this Court on written briefs. As earlier mentioned, although the State in its brief counters on the merits TPJ's enumerated errors with respect to the restitution ordered for Smith's car alarm and Galles' garage door repair, the State first contends *714 that TPJ's notice of appeal is defective and untimely filed. If the State's contentions are correct, the State reasons, then this Court lacks jurisdiction over this appeal.\n[\u00b6 16] The State's contention that the notice of appeal is defective proceeds on two bases. First, focusing on the wording in the notice of appeal that references \"the Judgment and Sentence of the court rendered on\" August 22, 2001, the State asserts \"[t]here is no judgment and sentence in juvenile cases.... Accordingly, there was no judgment and sentence in this case to appeal from.\" Second, although conceding that \"the tenor of [TPJ's appellate brief] ... strongly indicates that it was the Order Following Restitutional Hearing which he wished to contest in this Court,\" the State condemns TPJ's notice of appeal for \"fail[ing] to identify the juvenile court's Order Following Restitutional Hearing, which was entered September 4, 2001.\"\n[\u00b6 17] TPJ's reply brief addresses the State's contention that the notice of appeal is defective. TPJ correctly points out that an express provision of the Juvenile Justice Act authorizes a juvenile to appeal \"any final order, judgment or decree of the juvenile court ....\" Wyo. Stat. Ann. \u00a7 14-6-233 (LexisNexis 2001). Identifying the crux of the State's contention to be that \"TPJ's counsel did not correctly type the name of the hearing and order\" in the notice of appeal, TPJ asserts that his counsel correctly identified in the notice of appeal the object of the appeal as the juvenile court's order rendered August 22, 2001, and also attached to that notice of appeal a copy of that juvenile court's order following restitutional hearing. Asserting that it is clear what TPJ was appealing, TPJ protests that for one to conclude otherwise is to put form over substance. We agree with TPJ's position and hold that the notice of appeal is not defective.\n[\u00b6 18] The State's contention that the notice of appeal is untimely filed relies upon In re Interest of BW, 12 P.3d 675 (Wyo.2000), which the State contends is controlling. According to the State, in BW, as here, the juvenile court left open the amount of restitution when it entered the dispositional order and the juvenile did not appeal the dispositional order. In BW, according to the State, the juvenile court fixed the amount of restitution three years later; BW appealed, and this Court held that the appeal was untimely, and dismissed the appeal. Id. at 677.\n[\u00b6 19] TPJ addresses the untimeliness issues in his reply brief. Confronting the State's reliance on BW, TPJ distinguishes the facts in that case from the facts in his case. He correctly points out that in BW, unlike in his case, in the initial hearing the juvenile court in fact ordered restitution in an amount to be determined after the victim of BW's sexual assault had received counseling and medical care. Id. We also note that in BW, unlike here, BW's legal contention was that the juvenile court lacked statutory authority to delay setting restitution. Id. at 676. We find that TPJ's analysis of BW is correct. In that case, we found that, unlike here, the juvenile court in the dispositional phase had \"entered an open-ended restitution order from which no appeal had been taken.\" Id. at 677. Here, in contrast to BW, the juvenile court, with the consent of both the State and TPJ and his counsel, reserved the restitutional order to a later time. When the juvenile court later held the restitution hearing and entered its final order on restitution, TPJ timely appealed that final order. W.R.A.P. 2.01. We hold that TPJ's notice of appeal is timely.\nThe Applicable Statutory Provision Does Not Permit Restitution For Car Alarm\n[\u00b6 20] We now turn to TPJ's contention that the cost of Smith's car alarm, which she purchased and installed after he burglarized her car, is not authorized under the statutory language \"any damage or loss caused by the child's wrongful act.\" \u00a7 14-6-247(a)(v). The relevant part of that statute provides:\n(a) For a child at any sanction level, the juvenile court may:\n* * * *\n(v) Require the child and his parents or guardian to make restitution for any damage or loss caused by the child's wrongful act, except that the liability of *715 the parent or guardian shall not exceed the limit established by W.S. 14-2-203[.]\nId. (emphasis added).\n[\u00b6 21] TPJ contends that the statutory language does not cover a victim's post-wrongful act purchase of a car alarm to be installed to prevent future car burglaries and not to replace an existing car alarm that was damaged or stolen during the commission of the juvenile's wrongful act in question. He contends that Smith's car was not equipped with a car alarm at the time of TPJ's wrongful act of burglarizing her car and TPJ did not damage or steal a car alarm in Smith's car when he committed the wrongful act of burglarizing Smith's car.\n[\u00b6 22] TPJ asserts that the facts of his case most resemble the facts in Alcaraz v. State, 2002 WY 57, 44 P.3d 68 (Wyo.2002). There the victim store owner purchased a surveillance camera system because someone was stealing money from the store during hours when it was closed and the system identified Alcaraz as the thief. Id. at 70. This Court reversed the district court's restitution order which ordered Alcaraz to pay for the system and remanded with directions that the district court make a reasonable apportionment of the system cost between Alcaraz and the store owner. Id. at 73. This Court reasoned that Alcaraz should not pay for the system, but only a reasonable proportion, because the store owner realized future benefits from the system, beyond those benefits realized by apprehending Alcaraz. Id. TPJ says Smith will realize no benefits from the car alarm associated with his apprehension because he was apprehended without her having a car alarm; but Smith will realize future benefits from the car alarm in the form of preventing/thwarting possible future car break-ins by other burglars.\n[\u00b6 23] According to the State, TPJ misconceives the nature of the loss suffered by Barbara Smith as a direct consequence of TPJ's actions, and the State argues that although Smith bought the car alarm after TPJ's wrongful act, she bought it because that wrongful act made Smith insecure and afraid that her car would be broken into again. Therefore, reasons the State, her fear, which motivated her to buy the car alarm, was a direct result of TPJ's wrongful act; his wrongful act caused her fear, and to alleviate it, she bought the alarm, and the juvenile court properly considered that buying the car alarm was equivalent to \"damage or loss\" under the statute.\n[\u00b6 24] The juvenile court held that TPJ's wrongful act was \"the direct cause for [Smith's] purchasing a car alarm,\" relying on Dreiman v. State, 825 P.2d 758, 764 (Wyo.1992), a criminal burglary case in which the defendant paid restitution under Wyo. Stat. Ann. \u00a7 7-9-103 for the victim's expense in changing locks to her residence which the defendant had earlier burglarized. The State contends that an evident analogy exists between Dreiman and TPJ's juvenile case: in each case the victim's fear caused by the defendant's criminal act motivated the victim to incur expense.\n[\u00b6 25] The State correctly states that proceedings under the Juvenile Justice Act are not criminal, but are special proceedings. BW, 12 P.3d at 677. The proceedings are equitable and not punitive to accomplish the purpose of providing \"treatment, training and rehabilitation\" for children, and to \"provide for the care, the protection and the wholesome moral, mental and physical development of children coming within its provisions.\" Wyo. Stat. Ann. \u00a7 14-6-201(c)(ii)(C) and (c)(iii) (LexisNexis 2001); see also WJH, \u00b6\u00b6 9, 10. Accordingly, statutes providing for the care and discipline of juvenile delinquents are generally entitled to a liberal effect and a practical construction in favor of the child's welfare. WJH, \u00b6\u00b6 7, 8. The plain language of the statute, however, still controls our search for the legislative intent when it used the term \"restitution for any damage or loss caused by the child's wrongful act.\" Id.\n[\u00b6 26] Plainly, the statute limits the amount of restitution to the damages or losses caused by the juvenile's wrongful act and does not expressly extend to reimbursement of security devices added by the victim after the commission of the crime that will benefit the victim in the future. In Alcaraz, we determined that restitution should be ordered to compensate for legally recognized losses that directly resulted from the criminal act. Alcaraz, \u00b6 14. To comply with this *716 rule in that case, the district court was required to distinguish between those damages that would compensate the victim for monetary losses and the benefits that would continue to inure to the victim and, thus, could not be subject to restitution lest the victim gain a windfall. Id. By requiring there to be a direct causal connection between the juvenile's criminal act and the damages or losses incurred, we see that the car alarm was purchased after TPJ's burglary not because he stole or damaged one from the car, but for the future benefit to the victim of preventing other burglaries. Using Alcaraz' analysis, we hold that the car alarm purchase was not caused by TPJ's criminal act, and we hold that the juvenile court abused its discretion in ordering restitution for reimbursement to Ms. Smith for the car alarm.\nThe Damage to the Garage Door Was Proved by Sufficient Evidence\n[\u00b6 27] TPJ contends that the only evidence presented to the juvenile court was hearsay testimony by Irene Martinez, the victim/witness coordinator, that Mr. Galles had told her that the damage was not present before he and his family left for the weekend. The State contends that the juvenile court had TPJ's admissions that he and a friend had broken into the garage and evidence showing that it was likely that whoever broke into the garage had damaged the door, and the juvenile court found TPJ and his friend jointly and severally liable for the damages caused by their burglaries. An estimate for repairing the door was presented to the juvenile court, and based on the circumstantial evidence, the juvenile court had sufficient evidence to find that TPJ had damaged the door during the burglary in the amount shown by the repair estimate and did not abuse its discretion in ordering restitution. We agree with this assessment and hold that the juvenile court did not abuse its discretion.\n[\u00b6 28] We affirm the order of restitution with respect for the cost of the garage door repair and reverse the order of restitution with respect to the cost of the car alarm.\n"} -{"text": "\n5 N.Y.3d 853 (2005)\nPEOPLE v. JEAN.\nCourt of Appeals of the State of New York.\nOctober 31, 2005.\nApplication in criminal case for leave to appeal denied. (G.B. Smith, J.)\n"} -{"text": "\n410 So.2d 42 (1982)\nThe HEN HOUSE, INC., an Alabama Corporation\nv.\nWilliam Gary ROBERTSON and Mary Vann Robertson.\n80-543.\nSupreme Court of Alabama.\nFebruary 19, 1982.\n*43 Sam R. Shannon, Jr. and Joseph L. Boohaker, Birmingham, for appellant.\nJames R. Bowles, Tallassee, for appellees.\nBEATTY, Justice.\nThis is an appeal from an order of the Circuit Court of Elmore County denying the defendant's motion for relief from judgment filed under Rule 60(b), ARCP. We reverse and remand with directions.\nThe judgment from which relief was sought was a default judgment. The defendant's sole contention on appeal is that the default judgment was void because the plaintiffs failed to give the required three-day notice due a party who has appeared in the action under Rule 55(b)(2), and that, therefore, defendant was entitled to Rule 60(b) relief. Whether the defendant had \"appeared in the action\" is the question, then, which is dispositive. The answer to that question requires a review of the proceedings between the parties.\nThe Robertsons (and others not material here) entered into a lease of premises with The Hen House, Inc., as tenant. A dispute arose between them. On October 24, 1980, the Robertsons filed an action against The Hen House, Inc., No. CV-80-435, in the Circuit Court of Elmore County seeking damages for breach of that lease agreement. A copy of this summons and complaint was served upon the president of The Hen House, Inc., on November 11, 1980.\nNo pleading or other document was filed in this case by the defendant; consequently on December 15, 1980, the plaintiffs filed an application and affidavit for entry of a default judgment, and on December 23, 1980, the circuit court entered a default judgment against the defendant and in favor of the plaintiffs.\nOn March 16, 1981, the defendant filed a motion for relief from judgment. In this motion the defendant alleged, among other things, that it was never notified of either the plaintiffs' application for default judgment or the trial court's action in granting it, even though counsel for the parties had discussed the case during the period of pleadings. Moreover, the defendant maintains that circumstances disclose a \"constructive appearance\" which in law would have required the requisite three days' notice before taking a default judgment.\nThose circumstances include several other lawsuits between these parties together with a letter from defendant's counsel to plaintiffs' counsel. According to defendant's counsel, defendant sent its own summons and complaint to the Elmore County circuit clerk on October 22, 1980, with the request that it be filed. This action also alleged a breach of the same lease which was the subject of the plaintiffs' action which was filed two days later. However, the defendant's action was not filed until October 27, 1980, when it was given the designation: CV-80-438. Because the plaintiffs here did not file an answer to CV-80-438, the effect of this exchange, according to the defendant, was that CV-80-435, the plaintiffs' action, was a response to defendant's CV-80-438.\nThe letter referred to above, dated November 14, 1980, acknowledged receipt of a copy of plaintiffs' summons and complaint (CV-80-435), called attention to defendant's action (CV-80-438) and invited negotiations to clear up any misunderstandings \"in a way that will permit your clients to receive their rent on a regular basis.\"\nThe circumstances also include another lawsuit filed by the plaintiffs against the defendant, this one being a wrongful detainer action filed in the district court of Elmore County, No. DV-80-255, and alleging *44 a breach of the same lease agreement which was the subject of the two circuit court actions. The defendant appeared in this action by filing a motion to dismiss and an answer.\nIt was not until March 5, 1981, that the defendant learned of the default judgment rendered in CV-80-438 whereupon on March 16, 1981, it filed the motion for relief of judgment. Following the denial of that motion the defendant gave notice of appeal, and as parts of the record on appeal sought to have included the complaints in CV-80-435, CV-80-438, DV-80-255, and the answer contained in DV-80-255, as well as defendant's memorandum brief submitted to the trial court in support of defendant's motion for relief from the default judgment. The trial court, after a hearing prompted by the plaintiffs' rejection of this designation, ordered the circuit clerk to include in the clerk's record only the pleadings in CV-80-435, i.e., the plaintiffs' action on the lease.\nOn the question of whether or not the defendant made an appearance in this case, CV-80-435, the relevancy of the complaints in other cases, even though they were not consolidated with CV-80-435, has been decided in our case of Cockrell v. World's Finest Chocolate Co., Inc., Ala., 349 So.2d 1117 (1977) and Dial v. State, Ala.Civ.App., 374 So.2d 361 (1979). See also Lawler Mobile Homes, Inc. v. Ellison, Ala.Civ.App., 361 So.2d 1092 (1978).\nIn Cockrell, supra, this Court expressed its policy favoring the determination of cases on the merits and disfavoring default judgments. In that case a default judgment had been granted without notice to the defendant who had filed a document as an \"answer.\" A majority of this Court held that the filing of that document was an \"appearance\" which necessitated notice to the defendant, and that the default judgment rendered without proof of such notice was due to be vacated regardless of whether or not the defendant had shown a meritorious defense to the action.\nPointing out that courts have refused to apply an overly technical and restrictive definition of \"appearance,\" the Court of Civil Appeals in Dial v. State, supra, found the existence of multiple actions, civil and criminal, in which the district attorney knew that the defendant was represented by the same lawyer, to whom the district attorney had recommended continuances in all pending cases, constituted an \"appearance\" in the case in which a judgment by default had been entered. See also United States v. One 1966 Chevrolet Pickup Truck, 56 F.R.D. 459 (1972). The Court of Civil Appeals found persuasive the federal cases dealing with multiple actions between the same parties and pertaining to Rule 55 judgments:\nThey hold that where two actions have been filed and plaintiff knows that counsel who appeared for the defendant in the first action also represents the same defendant in the second action where no formal appearance is made, by legal construction, there is a technical appearance under Rule 55(b)(2) requiring notice. See, Gomes v. Williams, 420 F.2d 1364 (10th Cir. 1970); Press v. Forest Laboratories, Inc., 45 F.R.D. 354 (S.D.N.Y.1968).\nIn Press, supra, the federal district court vacated a default judgment when it was later shown that the defendant's representatives, who had made an earlier appearance in a case involving the same parties and general subject matter, had sufficient contact with the plaintiff's attorney to constitute an appearance. In H. F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689 (D.C.Cir.1970), it was held that a defendant had \"appeared\" in an action when the parties had exchanged letters seeking a settlement, and a default was ordered set aside when the defendant had not received the required notice.\nGiven the subject matter of the cases filed in district and circuit court, and the defendant's counsel's correspondence with plaintiffs' counsel, it is our conclusion that defendant in this case had also filed an \"appearance\" for the purposes of Rule 55(b)(2). Having made an appearance, it was necessary that he be given notice in order to perfect the default judgment.\n*45 The plaintiffs argue, however, that the final orders in the cases, DV-80-255 and CV-80-438 are res judicata and bar recovery for the defendant in any event. Such an argument is premature since the plea of res judicata, if made subsequently and successfully, would be applied to the merits of this controversy. Those merits, of course, have not been considered by virtue of the default which proceeded only upon the plaintiffs' complaint.\nHaving found that the defendant \"appeared\" for the purposes of Rule 55, we adhere to our view contained in Cockrell, supra, that the failure of notice requires the reversal of the trial court's order on the defendant's Rule 60(b) motion. Accordingly, that order is reversed and the trial court is directed to vacate the default judgment heretofore entered. It is so ordered.\nREVERSED AND REMANDED WITH DIRECTIONS.\nTORBERT, C. J., and MADDOX, JONES and SHORES, JJ., concur.\n"} -{"text": "878 F.2d 1432\nPowellv.Bowen*\nNO. 88-6209\nUnited States Court of Appeals,Fifth Circuit.\nJUN 23, 1989\n\n1\nAppeal From: E.D.Tex.\n\n\n2\nAFFIRMED.\n\n\n\n*\n Fed.R.App.P. 34(a); 5th Cir.R. 34.2\n\n\n"} -{"text": "J.S45044/15\n\n\nNON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37\n\n\nCOMMONWEALTH OF PENNSYLVANIA, : IN THE SUPERIOR COURT OF\n : PENNSYLVANIA\n Appellee :\n :\n v. :\n :\nHEATHER K. HOUSEWEART, :\n :\n Appellant : No. 474 MDA 2015\n\n Appeal from the PCRA Order March 4, 2015\n In the Court of Common Pleas of Lycoming County\n Criminal Division No(s).: CP-41-CR-0001036-2011\n\nBEFORE: BOWES, WECHT, and FITZGERALD,* JJ.\n\nMEMORANDUM BY FITZGERALD, J.: FILED SEPTEMBER 23, 2015\n\n Appellant, Heather K. Houseweart, appeals from order entered in the\n\nLycoming County Court of Common Pleas, dismissing her first petition filed\n\npursuant to the Post Conviction Relief Act1 (\u201cPCRA\u201d). Appellant avers\n\ncounsel was ineffective for failing to call a material witness at trial. We\n\naffirm.\n\n Following a jury trial, Appellant was convicted of aggravated and\n\nsimple assault. These charges arose from an altercation between Appellant\n\nand Jill Suzanne Kinley (\u201cVictim\u201d) in the bathroom of the Eagles Club, a bar\n\nin Williamsport on March 26, 2011. N.T., 3/1/12, at 23, 26.\n\n\n\n*\n Former Justice specially assigned to the Superior Court.\n1\n 42 Pa.C.S. \u00a7\u00a7 9541-9546.\n\fJ.S45044/15\n\n\n On June 4, 2012, Appellant was sentenced to three to six years\u2019\n\nimprisonment. On April 4, 2013, Appellant filed a PCRA petition. On\n\nSeptember 12, 2013, the PCRA petition was dismissed based upon counsel\u2019s\n\nfailure to comply with the June 27, 2013 order of the PCRA court. Order,\n\n9/12/13. On September 30, 2013, Appellant filed a pro se notice of appeal.\n\nOn April 30, 2014, this Court vacated the September 12, 2013 order and\n\nremanded for the appointment of new counsel. Commonwealth v.\n\nHouseweart, 1760 MDA 2013 (unpublished memorandum) (Pa. Super. Apr.\n\n30, 2014).\n\n On July 16, 2014, the PCRA court entered an order stating that\n\nbecause the notes of testimony from the trial were unavailable, \u201cit is the\n\n[c]ourt\u2019s reluctant conclusion that the only realistic way to achieve justice in\n\nthis matter is to order a new trial. The [c]ourt acknowledges that this is\n\nbeing raised sua sponte and would like input from all parties, including the\n\nCommonwealth and new PCRA counsel.\u201d Order, 7/16/14. On September 3,\n\n2014, the PCRA court entered an order directing defense counsel to file\n\neither an amended PCRA petition or a letter pursuant to Commonwealth v.\n\nTurner, 544 A.2d 927 (Pa. 1988) and Commonwealth v. Finley, 550 A.2d\n\n213 (Pa. Super. 1988), within thirty days of the date of the order because\n\nthe notes of testimony had been located. Order, 9/3/14. Counsel filed an\n\namended PCRA petition on October 6, 2014. On March 4, 2015, the PCRA\n\npetition was dismissed. This timely appeal followed. Appellant filed a timely\n\n\n\n -2-\n\fJ.S45044/15\n\n\ncourt-ordered Pa.R.A.P. 1925(b) statement of errors complained of on\n\nappeal. The PCRA court filed a responsive opinion.\n\n Appellant raises the following issue for our review:\n\n The trial court erred by denying Appellant a new trial due\n to trial counsel\u2019s failure to call Doctor John H. Bailey who\n would have offered testimony key to the defense\u2019s\n argument at trial on the issue of causation and specifically\n on whether the victim\u2019s injuries were consistent with an\n accidential [sic] fall brought on in part by the victim\u2019s\n extreme intoxicated state consistent with Dr. Bailey\u2019s\n witness statement filed in the above matter.\n\nAppellant\u2019s Brief at 4. Appellant argues that Dr. Bailey could have rendered\n\nan opinion on causation and potential causes of the injuries sustained by\n\nVictim. Id. at 14. Dr. Bailey \u201cperformed an open reduction and fixation on\n\n[V]ictim\u2019s left both-bone forearm fracture . . . .\u201d Id. Appellant contends\n\ncausation was the key issue at trial because Appellant maintained Victim\u2019s\n\ninjuries were caused after Appellant left the bathroom. Id. at 15. Appellant\n\nclaims counsel acknowledged her ineffectiveness in the Witness Certification\n\nthat she filed pursuant to Pa.R.Crim.P. 902(A)(15). 2 Id. at 16. Counsel\n\n\n2\n Rule 902(A)(15) provides:\n\n (A) A petition for post-conviction collateral relief shall bear\n the caption, number, and court term of the case or cases\n in which relief is requested and shall contain substantially\n the following information:\n\n * * *\n\n (15) if applicable, any request for an evidentiary hearing.\n The request for an evidentiary hearing shall include a\n\n\n\n -3-\n\fJ.S45044/15\n\n\nstated: \u201cI also did not subpoena Dr. John H. Bailey who performed surgery\n\non [Victim] on March 27, 2011 and who would have also been able to offer\n\ntestimony concerning the causation of [Victim\u2019s] injuries, her level of\n\nintoxication and its effects on her physical well being and memory of the\n\nevening\u2019s events.\u201d Id. at 17, (quoting Witness Certification, 10/6/14, at \u00b6\n\n13).\n\n This Court has stated:\n\n Our standard and scope of review for the denial of a\n PCRA petition is well-settled.\n\n [A]n appellate court reviews the PCRA court\u2019s\n findings of fact to determine whether they are\n supported by the record, and reviews its conclusions\n of law to determine whether they are free from legal\n error. The scope of review is limited to the findings\n of the PCRA court and the evidence of record, viewed\n in the light most favorable to the prevailing party at\n the trial level.\n\n * * *\n\n . . . Counsel is presumed effective, and to rebut that\n presumption, the PCRA petitioner must demonstrate that\n counsel\u2019s performance was deficient and that such\n deficiency prejudiced him. In Pennsylvania, we have\n refined the [Strickland v. Washington, 466 U.S. 668\n (1984),] performance and prejudice test into a three-part\n inquiry. Thus, to prove counsel ineffective, the petitioner\n\n signed certification as to each intended witness, stating the\n witness\u2019s name, address, and date of birth, and the\n substance of the witness\u2019s testimony. Any documents\n material to the witness\u2019s testimony shall also be included\n in the petition . . . .\n\nPa.R.Crim.P. 902(A)(15).\n\n\n\n -4-\n\fJ.S45044/15\n\n\n must show that: (1) his underlying claim is of arguable\n merit; (2) counsel had no reasonable basis for his action or\n inaction; and (3) the petitioner suffered actual prejudice as\n a result. If a petitioner fails to prove any of these prongs,\n his claim fails. . . . To demonstrate prejudice, the\n petitioner must show that there is a reasonable probability\n that, but for counsel\u2019s unprofessional errors, the result of\n the proceedings would have been different. A reasonable\n probability is a probability that is sufficient to undermine\n confidence in the outcome of the proceeding.\n\n * * *\n\n [A] defendant [raising a claim of ineffective\n assistance of counsel] is required to show actual\n prejudice; that is, that counsel\u2019s ineffectiveness was\n of such magnitude that it \u201ccould have reasonably had\n an adverse effect on the outcome of the\n proceedings.\u201d\n\nCommonwealth v. Charleston, 94 A.3d 1012, 1018-19 (Pa. Super.)\n\n(some citations omitted), appeal denied, 104 A.3d 523 (Pa. 2014).\n\n To establish counsel\u2019s ineffectiveness for failure to call a witness, a\n\npetitioner must demonstrate that:\n\n (1) the witness existed; (2) the witness was available; (3)\n counsel was informed of the existence of the witness or\n counsel should otherwise have known of him; (4) the\n witness was prepared to cooperate and testify for\n Appellant at trial; and (5) the absence of the testimony\n prejudiced Appellant so as to deny him a fair trial. A\n defendant must establish prejudice by demonstrating that\n he was denied a fair trial because of the absence of the\n testimony of the proposed witness. Further,\n ineffectiveness for failing to call a witness will not be found\n where a defendant fails to provide affidavits from the\n alleged witnesses indicating availability and willingness to\n cooperate with the defense.\n\n\n\n\n -5-\n\fJ.S45044/15\n\n\nCommonwealth v. O'Bidos, 849 A.2d 243, 249 (Pa. Super. 2004)\n\n(citations omitted).\n\n Instantly, the PCRA court opined:\n\n Medical evidence was introduced to show that [Victim]\n suffered a fracture of her left ulna and radius as well as\n ligament tears in her left knee. The Commonwealth\n presented testimony that [Appellant] inflicted the injuries\n on [Victim. Appellant] testified, however, that although\n there was some pushing back and forth with the bathroom\n door, [Victim] was still standing when [Appellant] left the\n bathroom and had not been injured. [Appellant] asserted\n that the injuries were the result of a fall.\n\n In her petition, [Appellant] asserted that trial counsel\n was ineffective for failing to call as a witness John Bailey,\n M.D., who performed the surgery on [Victim\u2019s] arm. The\n court found no ineffectiveness as it believed Dr. Bailey\u2019s\n testimony, as contained in the witness certification filed\n January 6, 2015, would have been more favorable to the\n prosecution than the defense. According to the\n certification, Dr. Bailey would have testified that \u201cit is\n certainly not outside of the realm of possibility\u201d that\n [V]ictim\u2019s injuries were caused by a fall rather than from\n the alleged assault, but that \u201cit is unlikely that a simple fall\n would result in this severity of injuries to both the knee\n and forearm.\u201d The court believed such testimony to be too\n speculative to support [Appellant\u2019s] request for a hearing.\n\nPCRA Ct. Op., 3/31/15, at 1-2. Additionally, in the witness certification, Dr.\n\nBailey stated\n\n I don\u2019t have any specific recall of this patient, but from\n reading my history and physical, operative note, and\n discharge summary, the best that I can tell you is that\n [Victim] reported to me that she was involved in an\n altercation. She sustained fractures of the radius and ulna\n of the left forearm and left knee medial collateral ligament\n and anterior cruciate ligament tears. . . . I would state\n that she was consistent at every step of the process in\n reporting that this was, in fact, an altercation.\n\n\n -6-\n\fJ.S45044/15\n\n\n\nWitness Certification of Doctor John H. Bailey, Jr. in Accordance with\n\n[Pa.R.Crim.P.] 902(A)(15).\n\n At trial, Victim testified that she had started drinking at the Eagles\n\nClub between 11:30 and noon. N.T., 3/1/12, at 23. She had about eight\n\nmugs of beer prior to the incident. Id. She went to the bathroom between\n\nseven and eight p.m. Id. at 24. When she exited the bathroom stall,\n\nMelissa Palmer and Appellant were in the bathroom. Id. at 25. Appellant\n\nstarted yelling and Victim told her \u201c[t]he only thing I want to hear out of you\n\nis that you have the money that you owe me.\u201d Id. Victim stated:\n\n I was drying my hands and I backed up so that another\n girl could get to the paper towels and that put me\n basically, if you would open the door, behind the door of\n the restroom.\n\n * * *\n\n I remember being slammed with the door multiple\n times. I remember hitting the floor. I got back up and I\n started to be slammed with the door again and I was\n knocked unconscious. I came to on the floor and that\u2019s\n when Melissa Palmer asked me if I hit my head, and I\n looked up at my arm and saw that my bones were sticking\n out of my arm and I couldn\u2019t get up because I couldn\u2019t\n move my leg.\n\nId. at 25-26.\n\n At trial, the Commonwealth read from Victim\u2019s medical records. Id. at\n\n29. The Commonwealth stated:\n\n If the manager of the health records department for\n Susquehanna Health was here today she would testify that\n at 8:59 p.m. on March 26, 2011 [Victim] arrived at the\n\n\n -7-\n\fJ.S45044/15\n\n\n Williamsport Hospital. Upon arrival [she] had an IV\n inserted and morphine was administered. At 10:45 p.m. a\n long arm splint was applied to [her] left arm, elbow,\n forearm, wrist, and hand. The splint was secured with two\n four-inch ace wraps. At 11:25 [she] attempted to stand\n and bear weight and was unable to bear weight on her left\n leg.\n\nId. at 29.\n\n The medical records indicated that on March 27th, Victim had surgery\n\non her arm described as \u201copen reduction and internal fixation, left radius and\n\nulnar fracture.\u201d Id. at 34. She had surgery for her left knee at Geisinger\n\nMedical Center. Id. at 35, 37. \u201cThe procedure involved ligament\n\nreconstruction.\u201d Id. at 37. Following surgery, her leg was in a brace and\n\nshe was unable to walk for ten weeks. Id. at 36. Victim did physical\n\ntherapy at Williamsport Hospital three times a week for four months. Id. at\n\n39, 40.\n\n Shannon Louise Wanamaker, a bartender at the Eagles Club, testified\n\nthat she worked on the day of the incident from 10:30 a.m. until 6:30 p.m.\n\nId. at 47. She saw Victim on the floor of the bathroom and asked her what\n\nhappened. Id. at 48. Victim told her Appellant \u201cbeat the shit out of me.\u201d\n\nId.\n\n Erin Dailey, a paramedic, treated Victim as a result of an emergency\n\ndispatch from the Eagles Club regarding an assault victim. Id. at 61-62.\n\nShe arrived at 8:15 p.m. Id. at 65. Victim told her that she had been\n\ndrinking since one o\u2019clock. Id. at 68. When asked if Victim appeared\n\n\n\n -8-\n\fJ.S45044/15\n\n\nintoxicated, Ms. Dailey stated that \u201c[s]he was anxious, so that can be from\n\npain. It could be from drinking. It\u2019s really hard to tell how much is from\n\nwhat.\u201d Id.\n\n Melissa Palmer testified that she was in the bathroom stall at the time\n\nof the incident. Id. at 72. Palmer \u201ccame out of the stall and [Victim] was\n\non the floor trying to stand up and [Appellant] was over her yelling\n\nprofanities.\u201d Id. She observed the following interaction between Victim and\n\nAppellant:\n\n Like, she would say\u2500like, she was saying, you know,\n you\u2019re not so \u201cF\u201d ing tough now, are you, \u201cB?\u201d And\n [Victim] stood up and she looked really dazed and kind of\n confused, and [Appellant] grabbed the door to leave the\n restroom and when she opened it she pinned [Victim] in\n between the door and the wall. [Victim\u2019s] arms were up\n against wall [sic] and [Appellant] took her full body and\n slammed into her in this door five or six times, saying,\n you\u2019re not so tough now, are you, \u201cB\u201d? And you want to\n keep running your mouth, this is what happens.\n [Appellant] walked out of the bathroom.\n\n * * *\n\n When the door was closing [Victim] turned and when\n she went to take a step she fell to the floor, and I thought\n she hit her head or something because I heard like a\u2500that\n wap sound, so I leaned over and said, oh, my God, did you\n just hit your head? And she said, I think I broke my arm.\n She lifted her arm up and it was like\u2500the bones were\n sticking out and stuff.\n\nId. at 72-73, 74.\n\n Walter Zuravensky, Jr., \u201cwas at the Eagles Club shooting pool\u201d with\n\nAppellant on the date of the incident. Id. at 83, 84. Appellant told him that\n\n\n\n -9-\n\fJ.S45044/15\n\n\nshe owed Victim money and Appellant said \u201cI\u2019m tired of her giving me all\n\nthat shit and I should just punch her.\u201d Id. at 87. After he finished shooting\n\npool, he went to go to the bathroom and he saw Appellant. Id. Appellant\n\ntold him she \u201cjust knocked that fucking bitch out.\u201d Id.\n\n Patrolman Jimmie William Rodgers of the Williamsport Police\n\nDepartment testified he \u201cwas dispatched to the Eagles Club for a fight that\n\nhad occurred.\u201d Id. at 99. Victim was lying on the floor in the restroom with\n\na visibly broken arm \u201ccomplaining of an injury to her left knee.\u201d Id. at 100.\n\nShe was \u201chighly intoxicated\u201d in his opinion. Id. Melissa Palmer told him\n\nwhen she came out of the bathroom \u201cshe saw [Appellant] slam the door\n\nopen against [Victim], saw [Victim] drop to the floor and heard [Appellant]\n\ncall her a bitch as she exited the bathroom.\u201d Id. at 100-01.\n\n Appellant testified that as she \u201cwas trying to get out of the bathroom,\n\n[Victim was] pushing the door shut on [her].\u201d Id. at 127. \u201c[W]e were both\n\nfighting, her pushing the door to keep me in and me pushing the door to get\n\nout.\u201d Id. at 129. Appellant stated she \u201chad absolutely nothing to do with\n\nthem [sic] injuries. She was fine when I walked out of that bathroom. She\n\nwas standing and there was no blood.\u201d Id. at 137. Appellant never saw\n\nMelissa Palmer in the bathroom. Id. at 140. According to Appellant,\n\nPalmer\u2019s testimony was false. Id.\n\n We find Appellant has not satisfied the prejudice prong of the\n\nineffective assistance of counsel test. See Charleston, 94 A.3d at 1019.\n\n\n\n - 10 -\n\fJ.S45044/15\n\n\nAppellant has not shown that the absence of the testimony of Dr. Bailey\n\nprejudiced her so as to deny her a fair trial. See O\u2019Bidos, 849 A.2d at 249.\n\nTherefore, her ineffective assistance of counsel claim for failure to call a\n\nwitness is without merit. See id. The evidence of record supports the\n\ndetermination of the PCRA court. See Charleston, 94 A.3d at 1019.\n\n Order affirmed.\n\nJudgment Entered.\n\n\n\n\nJoseph D. Seletyn, Esq.\nProthonotary\n\nDate: 9/23/2015\n\n\n\n\n - 11 -\n\f"} -{"text": "\n67 U.S. 571 (____)\n2 Black 571\nKELLOGG\nv.\nFORSYTH.\nREYNOLDS\nvs.\nFORSYTH.\nSupreme Court of United States.\n\nMr. Ballance, of Illinois, for Plaintiffs in Error.\nMr. Williams, of Illinois, for Defendants.\nMr. Justice CLIFFORD.\nThese are writs of error to the Circuit Court of the United States for the Northern District of Illinois. Both suits were brought in the Court below by the present defendant against the respective plaintiffs in error. They were actions of ejectment, and were respectively commenced on the 18th day of November, 1854, to recover possession of certain but different parts of claim numbered seven in the village of Peoria, as confirmed to Thomas Forsyth under the Act of Congress, approved the 3d day of March, 1823, entitled *572 an Act to confirm certain claims to lots in the village of Peoria, in the State of Illinois. In each case the defendants pleaded the general issue, and for the sake of brevity, it may be well to say, that the proceedings in the two suits, are so nearly alike that it will be unnecessary to refer to them separately, except in a few particulars, which will be specially noticed. Parties went to trial in both cases at the July Term, 1856, and the verdict in each, under the instructions of the Court, was in favor of the plaintiff, and the respective defendants excepted. Plaintiff claimed title in each case under a patent to the legal representatives of Thomas Forsyth, dated the 16th day of December, 1845, and it was admitted at the trial that the plaintiff had that title. On the other hand, the defendants in the respective suits claimed the premises under a patent issued to John L. Bogardus, dated the 5th day of January, 1838, and granting to him the southeast fractional quarter of section nine in township eight north, of range eight east, in the District, of lands subject to sale, at Quincy in the State of Illinois, subject, however, to all the rights of any and all persons claiming under the Act of Congress of the 3d of March, 1823, entitled as already described. Premises in controversy are included in that patent, and it was admitted at the trial that the defendants in the respective suits have had the actual possession of the land for which they are sued by residences thereon for ten years next preceding the commencement of the suits. Other admissions, as to the possession of the premises by the defendants, were made at the same time, but it is not necessary to refer to them in this investigation. Defendants in the first case requested the Court to instruct the jury that the title under which they claimed was a title deducible of record from the United States, and that the plaintiff, inasmuch as he admits that they had been in possession more than seven years before the suit was commenced, is barred by the Illinois Statute of Limitations; but the Court refused the prayer, and among other things instructed the jury that the entry and patent under which defendants claimed were subject to the rights of any and all persons claiming under the Act of Congress of the 3d of March, 1823, so that no one claim *573 ing under the patent, and by virtue thereof, could claim under the Statute of Limitations for seven years to have entered into the possession of the lot under the claim or color of title Prayers for instruction substantially the same were also presented by the defendants in the other case, and the record shows that they were refused by the Court, and that the instructions given to the jury were in all respects the same as those already recited.\n1. It is insisted by the plaintiff, in the first place, that the bill of exceptions does not show that the rulings of the Court in refusing to instruct the jury as requested, and in respect to the instructions given, were properly excepted to at the time the rulings were made. But sufficient appears to show that the prayers for instruction were presented, and the instructions given before the jury retired from the bar of the Court, and the statement at the close of the bill of exceptions and immediately following the instructions given is, that the \"defendants then and there excepted\" to the instructions, rulings, and decisions of the Court. Evidently the objection is substantially the same as that considered in the case of Dredge et al. vs. Forsyth, decided at the present term, and for the reasons there given it is overruled. United States vs. Brietling, (20 How., 252).\n2. In the second place, it is insisted by the plaintiff that the possession of the defendants were not adverse to the title of the plaintiff. He states the proposition, but furnishes no explanation of the grounds on which it rests. Unless it is founded on the saving clause in the patent of the defendants, there is nothing in either case to give it the slightest support; and if it is founded upon that clause, it is a sufficient answer to it to say, that it proceeds upon an erroneous view as to the legal effect of the patent. Bryan et al. vs. Forsyth, (19 How., 338); Mahan et al. vs. Forsyth, (24 How., 175); Gregg vs. Tesson, (1 Black., 150).\n3. Suggestion is also made by the plaintiff that the title of the defendants is not such as is required by law to secure to them the benefit of the seven years Limitation Act of the State of Illinois, but the point has been so frequently ruled otherwise by the State Court, and by this Court, that we do not think it neces *574 sary to give it any further examination. Suffice it to say, that in our opinion the instructions requested should have been given, and those given should have been withheld. The respective judgments of the Circuit Court are accordingly reversed and the causes remanded, with instructions in each case to issue a new venire.\n"} -{"text": "J-S50017-17\n\n\nNON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37\n\nJOHN J. LYNCH IN THE SUPERIOR COURT OF\n PENNSYLVANIA\n Appellant\n\n v.\n\nSTEWART SMITH AND PETER SMITH\n\n No. 3511 EDA 2016\n\n\n Appeal from the Order February 18, 2016\n In the Court of Common Pleas of Philadelphia County\n Civil Division at No(s): November Term 2015, No. 4081\n\n\nBEFORE: PANELLA, J., MOULTON, J., and RANSOM, J.\n\nMEMORANDUM BY MOULTON, J.: FILED OCTOBER 02, 2017\n\n John J. Lynch appeals, pro se, from the February 18, 2016 order\n\nentered in the Philadelphia County Court of Common Pleas granting\n\npreliminary objections filed by Stewart and Peter Smith (\u201cthe Smiths\u201d). We\n\naffirm.\n\n The trial court set forth the following factual history:\n\n [Lynch] alleges that [the Smiths] are liable for the actions\n of [] Andrew Gittelmacher. Mr. Gittelmacher is not named\n as a defendant in this case. [Lynch\u2019s c]omplaint alleges\n that [he] settled an unrelated premises liability case\n against [the Smiths] filed in the Philadelphia Municipal\n Court. In that case, [Lynch] asserted that his car had\n been ruined by sugar while being parked at the same\n property at issue in this case, 9351 Old Bustleton Avenue[,\n Philadelphia County.] Mr. Gittelmacher was named as a\n [d]efendant in that case.\n\n In this case, [Lynch] alleges that . . . Peter Smith\n \u201cfailed to control\u201d Gittelmacher after Gittelmacher offered\n money to a Mr. Rasheed Reid, also not a defendant in this\n\fJ-S50017-17\n\n\n case, to \u201cassault and eject\u201d [Lynch]. [Lynch]\u2019s [c]omplaint\n further alleges that Gittelmacher sprayed [Lynch] with\n WD40 [lubricant spray] and \u201cverbally assaulted\u201d him on\n June 13, 2015. [Lynch] also asserts that Gittelmacher\n \u201cwould harass and annoy\u201d [Lynch] and that [the Smiths]\n did not \u201cstand up and speak out or stop\u201d Gittelmacher.\n The [c]omplaint alleges [Lynch]\u2019s income has been\n severely impacted by Gittelmacher. Nowhere does the\n [c]omplaint assert that Gittelmacher was acting on behalf\n of or as an agent or employee of [the Smiths]. Indeed no\n relationship whatsoever is alleged between Gittelmacher\n and the [Smiths].\n\nOpinion, 4/6/16, at 2.\n\n On December 1, 2015, Lynch filed the above-referenced complaint.\n\nOn December 29, 2015, the Smiths filed preliminary objections, based on\n\ninsufficient specificity and in the nature of a demurrer for failure to state a\n\ncause of action upon which relief could be granted. On January 14, 2016,\n\nLynch responded to the preliminary objections1 and, on January 20, 2016,\n\nfiled a supplement to that response. On February 18, 2016, the trial court\n\nsustained both of the Smiths\u2019 preliminary objections.2 On February 26,\n\n\n____________________________________________\n\n\n 1\n Lynch attached an \u201camended complaint\u201d to his response. However,\nthe docket reveals that Lynch never filed an amended complaint with the\ntrial court.\n\n 2\n The trial court\u2019s order did not indicate whether it dismissed Lynch\u2019s\ncomplaint with or without prejudice, see Order, 2/18/16, which raises an\nissue as to whether the trial court\u2019s order was final under Pennsylvania Rule\nof Appellate Procedure 341 and therefore appealable under section 742 of\nthe Judicial Code. However, because the trial court sustained the Smiths\u2019\npreliminary objection in the nature of a demurrer, we conclude that the trial\ncourt dismissed Lynch\u2019s complaint with prejudice because \u201can order granting\npreliminary objections in the nature of a demurrer is a final order and is,\n(Footnote Continued Next Page)\n\n\n -2-\n\fJ-S50017-17\n\n\n\n2016, Lynch filed a notice of appeal with the Commonwealth Court. Upon\n\nLynch\u2019s application, on October 25, 2016, the Commonwealth Court\n\ntransferred the appeal to this Court.\n\n Lynch\u2019s sole issue on appeal is as follows:\n\n Should the matter be reversed, and remanded because the\n complaint although made in [l]ong hand did comply with\n Pa. Rule of Civil Procedure 1019(c) in pleading the\n performance or occurrence of conditions precedent, it is\n sufficient to aver generally that all conditions precedent\n have been p[er]formed or have occur[r]ed, which [Lynch]\n did do concerning the assaults, and batteries of his person\n while working on the premises.\n\nLynch\u2019s Br. at 6 (unpaginated) (suggested answer omitted).\n\n Lynch argues that the trial court improperly sustained the Smiths\u2019\n\npreliminary objections. Our standard of review on such matters is well\n\nsettled:\n\n [O]ur standard of review of an order of the trial court\n overruling or granting preliminary objections is to\n determine whether the trial court committed an error of\n law. When considering the appropriateness of a ruling on\n preliminary objections, the appellate court must apply the\n same standard as the trial court.\n\n Preliminary objections in the nature of a demurrer test\n the legal sufficiency of the complaint. When considering\n preliminary objections, all material facts set forth in the\n challenged pleadings are admitted as true, as well as all\n inferences reasonably deducible therefrom. Preliminary\n objections which seek the dismissal of a cause of action\n should be sustained only in cases in which it is clear and\n _______________________\n(Footnote Continued)\n\ntherefore, appealable to this Court immediately.\u201d D\u2019Elia v. Folino, 933\nA.2d 117, 121 (Pa.Super. 2007).\n\n\n\n -3-\n\fJ-S50017-17\n\n\n free from doubt that the pleader will be unable to prove\n facts legally sufficient to establish the right to relief. If any\n doubt exists as to whether a demurrer should be\n sustained, it should be resolved in favor of overruling the\n preliminary objections.\n\nHaun v. Community Health Sys., Inc., 14 A.3d 120, 123 (Pa.Super.\n\n2011) (internal citations and quotations omitted). With respect to\n\npreliminary objections for insufficient specificity in a pleading, this Court has\n\nstated that:\n\n [t]he pertinent question under [Pennsylvania] Rule [of Civil\n Procedure] 1028(a)(3) is whether the complaint is\n sufficiently clear to enable the defendant to prepare his\n defense, or whether the plaintiff\u2019s complaint informs the\n defendant with accuracy and completeness of the specific\n basis on which recovery is sought so that he may know\n without question upon what grounds to make his defense.\n\nRambo v. Greene, 906 A.2d 1232, 1236 (Pa.Super. 2006) (internal\n\nquotations omitted).\n\n Lynch asserts that the Smiths \u201care liable to [him] for failure to take\n\naction to prevent their silent partner[,] Andrew Gittelmacher[,] from\n\nassaulting[] and battering [Lynch].\u201d Lynch\u2019s Br. at 11 (unpaginated). Lynch\n\nasserts that the Smiths, to whom he refers in his brief as business owners, 3\n\nare \u201cduty bound, obligated, and absolutely responsible for the safety and\n\nsecurity of all other persons on the premises.\u201d Id. In short, Lynch argues\n\nthat the Smiths had a duty to control Gittelmacher, who Lynch refers to as\n\n____________________________________________\n\n\n In his complaint, Lynch did not refer to the Smiths as \u201cbusiness\n 3\n\nowners,\u201d nor did he refer to Gittelmacher as a \u201csilent partner\u201d of the Smiths.\n\n\n\n -4-\n\fJ-S50017-17\n\n\n\nthe Smiths\u2019 \u201csilent partner,\u201d and who Lynch further alleges the Smiths knew\n\nto have violent tendencies. We disagree.\n\n A review of Lynch\u2019s complaint shows that not only did Lynch fail to\n\nplead when (or in some instances, where) these alleged assaults occurred,\n\nhe also failed to allege that Gittelmacher was acting as an agent or\n\nemployee on behalf of the Smiths. Rather, the complaint merely asserts\n\nthat Lynch brought causes of action for \u201ctermination of [his] part time\n\nmechanical work at 9351 Old Bustleton Avenue . . . [and for the Smiths\u2019]\n\nfailure to provide a safe environment at the times [he] was on location doing\n\nmechanical work.\u201d Compl. at 1. Further, Lynch\u2019s incoherent factual\n\naverments lend no support to these claims, instead listing a series of\n\nincidents between Lynch, Gittelmacher, and Rasheed Reid. See id. at 2-5.\n\nWe agree with the trial court\u2019s conclusions that Lynch\u2019s complaint \u201cprovides\n\nno specific assertions as to what occurred or why there was a duty to\n\ndefend\u201d and \u201cdoes not state any cognizable legal claim.\u201d Opinion, 4/6/16, at\n\n3. Accordingly, we also conclude that the trial court appropriately sustained\n\nthe Smiths\u2019 preliminary objections.\n\n Order affirmed.\n\nJudgment Entered.\n\n\n\n\nJoseph D. Seletyn, Esq.\nProthonotary\n\nDate: 10/2/2017\n\n\n -5-\n\f"} -{"text": "\n546 F.Supp. 314 (1982)\nFORMS, INC.\nv.\nAMERICAN STANDARD, INC.\nCiv. A. No. 81-4933.\nUnited States District Court, E. D. Pennsylvania.\nAugust 23, 1982.\n*315 Jay Barsky, Sharlyn Cohen, Philadelphia, Pa., for plaintiff.\nSteven L. Friedman and Daniel F. Ryan, III, Philadelphia, Pa., for defendant.\n\nMEMORANDUM\nNEWCOMER, District Judge.\nBefore me are cross-motions for summary judgment. Plaintiff Forms, Inc. (\"Forms\") by its owner Laurence Weiss, has brought this action alleging in four counts fraudulent misrepresentation in the sale of Forms to Weiss by the defendant American Standard, Inc. (\"American Standard\"). In Count I (\"Inventory Revaluation Claim\"), the plaintiff alleges that the defendant fraudulently failed to disclose the post-closing adjustment of Forms' inventory. Plaintiff in Count II (\"Computer Documents Claim\") alleges that the American Standard fraudulently misstated in the post-closing adjustment the nature and amount of an outstanding claim by a company called Computer Documents against Forms. In Count III plaintiff alleges that the defendant fraudulently misrepresented to Weiss that all accounts receivable on the closing balance sheet were collectible in full (\"Account Receivable Claim\"). Forms alleges in Count IV (\"David Kercher Claim\") that it was fraudulently induced to exempt David Kercher, the General Manager of Forms when it was owned by American Standard, from the employment restriction clause of the agreement of sale (\"Agreement\"). The defendant seeks summary judgment on all four courts; plaintiff seeks summary judgment on counts II and IV. For the reasons set forth below, I will grant the defendant's motion for summary judgment on the first four substantive counts, as well as Count V (Breach of Contract) and Count VI (Punitive Damages), and enter judgment for the defendant.\n\nI. The Facts\n\nThe record in this case is somewhat complicated and it deserves an extended recitation. The undisputed facts, drawn from the opposing briefs and the depositions, are as follows.\n*316 Laurence Weiss, C.P.A., learned in the summer of 1979 that American Standard was interested in selling the assets of an unincorporated division in its Business Forms Group, known as Forms Inc. Weiss entered into negotiations that continued throughout the summer and fall with James Sears, Vice President of Corporate Development for American Standard, and James Sinclair, then President of American Standard's Business Forms Group. Weiss offered to purchase Forms for book value plus $500,000 on December 3, 1979 (Exhibit \"D\", Defendant's Motion for Summary Judgment). Three weeks later, on December 26, 1979, Weiss made a second offer of book value plus $600,000 and American Standard agreed to negotiate solely with Weiss (Exhibit \"E\", Defendant's Motion for Summary Judgment). Eight draft agreements were made between January 1980 and March 12, 1980, the date the final agreement was executed.\nOn November 12, 1979 James Sinclair wrote a letter to David Kercher in which Sinclair promised that Kercher would remain with Forms until it was sold, and further provided that should Kercher leave Forms at the sale, American Standard would keep him on the payroll for up to one year or such earlier time as Kercher was able to locate employment elsewhere (Exhibit \"C\", Plaintiff's Motion for Summary Judgment). Kercher, in a letter dated January 14, 1980, sought similar assurances from Gerald Tonges, who had replaced Sinclair as President of the Business Forms Group (Exhibit \"D\", Plaintiff's Motion for Summary Judgment). Two days later Tonges confirmed the offer in a letter to Kercher (Exhibit \"E\", Plaintiff's Motion for Summary Judgment). Laurence Weiss sent a letter to Kercher on February 7, 1980 outlining Kercher's compensation package should he remain with Forms (Exhibit \"G\", Defendant's Motion for Summary Judgment). This was followed by a conversation in which Weiss offered a higher base salary (Deposition of Weiss April 19, 1982, at 111). Kercher did not tell Weiss what he planned to do after the settlement. Sometime in mid-February Weiss called Kercher and asked permission to speak with a particular Forms salesman. Kercher thought this improper and refused, but Weiss contacted the salesman anyway (Deposition of Kercher, at 155-157A). On February 19, 1980 a side letter to the Agreement was drafted by American Standard exempting Kercher from the employment restriction that prohibited American Standard from offering employment to any Forms employees at or above their salary for one year after the settlement (paragraph 10(a)(ii) of the Agreement). The side letter appeared in several drafts and was signed by Weiss at the closing on March 12, 1980 (Exhibit \"N\", Defendant's Motion for Summary Judgment).\nThe sale of Forms to Laurence Weiss was consummated on March 12, 1980. There is conflicting evidence about who informed whom of the Computer Documents claim. Charles Gordon, counsel for American Standard, said that he was informed by Weiss (Deposition of Gordon, at 57-58). Weiss recalls being informed at the closing by Gordon or by an unnamed third person (Deposition of Weiss, April 30, 1982 at 62-63). A side letter written by Weiss and executed as part of the Agreement stated that American Standard informed Forms of the claim (Exhibit \"V\", Plaintiff's Response to Defendant's Motion for Summary Judgment). The account executive who handled the claim for Forms, Thomas Reeve, stated that he discussed the claim several times with Kercher and told him that it was in excess of $31,000. (Affidavit of Reeve, Plaintiff's Response to Defendant's Motion for Summary Judgment). Kercher recalls discussing the dollar amount of the claim with Gordon before the closing but did not mention the figure in his deposition (Deposition of Kercher, at 134). Kercher stated, in a February 25, 1980 memorandum to James Sears that he believed the potential liability to be approximately $25,000.00 (Exhibit \"P\", Plaintiff's Motion for Summary Judgment). Gordon also recalled that amount as the figure discussed in his conversation with Kercher (Deposition of Gordon, at 57-58). Gordon next spoke to *317 Kercher about the Computer Documents claim on the closing date. Gordon stated that Weiss mentioned the figure of $22,205 and that he then called Kercher to corroborate the figure (Deposition of Gordon at 57-58). American Standard agreed to assume liability for claims up to $22,205 in a side letter that became part 1 of the agreement (Exhibit \"J\", Defendant's Motion for Summary Judgment).[1]\nOn the afternoon of the settlement Kercher sent a letter of resignation to Weiss, stating his intention to remain with Forms until at least April 30th (Exhibit \"F\", Plaintiff's Motion for Summary Judgment). Kercher's decision to leave Forms was apparently based on his belief, grounded in his experience with Mr. Weiss in the weeks before the closing, that he could not work effectively with Weiss (Deposition of Kercher, at 157-158). Later the same day Kercher sent a letter to Gerald Tonges of the Business Forms Group of American Standard informing Tonges of his resignation and invoking American Standard's one-year employment commitment (Exhibit \"G\", Plaintiff's Motion for Summary Judgment). Kercher did not tell Weiss before the closing that he planned to stay with Forms (Deposition of Weiss, April 19, 1982, at 115), nor was Kercher offered a specific position with American Standard (Deposition of Kercher, at 154), nor did Kercher reveal to anyone at American Standard his intention to leave Forms (Deposition of Kercher, at 68-72). The next day, March 13, American Standard transferred Kercher to its Business Forms Group with the proposed status of Assistant General Manager, retroactively effective as of March 10, 1980 (Exhibit \"J\", Plaintiff's Motion for Summary Judgment).\nSeveral times after the closing, Kercher discussed a transfer to another division of American Standard with Gerald Tonges, and from April 2-8 Kercher travelled to Dallas, Texas to inspect a facility newly acquired by American Standard (Deposition of Kercher at 88-89). Because Kercher was frequently absent or late for work, he was fired by Weiss on April 11th, with an effective date of April 2nd. (Deposition of Weiss, at 143-146; Exhibit \"H\", Plaintiff's Motion for Summary Judgment). In mid-April Kercher was offered and accepted a job as President and General Manager of American Standard's Woehrmyer Business Forms in Denver, Colorado. He assumed his new position in late April (Deposition of Kercher, at 87-97).\nWeiss and American Standard provided in the Agreement that their respective accountants would meet within 60 days of the closing to negotiate any post-closing adjustments. (Agreement, Paragraph 4(d), Exhibit \"L\", Defendant's Motion for Summary Judgment). The provision also included a procedure in which any unresolved disputes between the accounting firms would be submitted to a third independent accounting firm whose decision would be binding. On July 27, 1980 Forms' accountants (Coopers and Lybrand) submitted a list of post-closing adjustments to American Standard's accountants (Arthur Young) (Exhibit \"P\", Defendant's Motion for Summary Judgment). The accountants met on July 21, 1980 and resolved some disagreements, but left unresolved Forms' claims for inventory revaluation, additional credits on the Computer Documents account, and compensation for uncollectable accounts receivable (Counts I, II, and III of this suit). On February 4, 1981 Jay Barsky, attorney for Forms, wrote a letter to Charles Gordon, attorney for American Standard, in which he characterized the claims as part of the post-closing adjustment but suggested that the matter be resolved by the lawyers (Exhibit \"R\", Defendant's Motion for Summary Judgment). The issues were not resolved and Forms filed this suit on December 2, 1981.\n\nII. Procedural Posture\n\nPlaintiff Forms states four counts of fraudulent misrepresentation, a fifth count for breach of contract based on facts alleged in the first four counts, and a sixth count for punitive damages. Forms seeks *318 relief of $43,000.00 in Count I (Inventory Revaluation Claim), $11,198.00 in Count II (Computer Documents Claim), $38,979.00 in Count III (Accounts Receivable Claim), $300,000.00 in Count IV (David Kercher Claim), $378,177.00 in Count V (Breach of Contract Claim which incorporates first four counts), and $1,134,531.00 in Count VI (Punitive Damages Claim).\nDefendant American Standard has moved for summary judgment on the first four counts. Forms has responded first by alleging that Counts I and III present genuine issues of material fact for which it would be improper to grant summary judgment, and second by filing its own motion for summary judgment on Counts II and IV. Defendant has answered plaintiff's motion for summary judgment, and has realleged his own grounds for summary judgment.\n\nIII. Count I: Inventory Revaluation\n\nPlaintiff alleges that the defendant misrepresented the value of Forms' inventory in violation of the good faith provision of the Uniform Commercial Code, Pa. Stat. Ann. tit. 12 \u00a7 1-203 (Purdon 1980), by using an accounting sleight-of-hand in which the plaintiff paid an inflated price for the inventory. Under the Agreement the price Weiss was to pay for the inventory was established by the Forms closing balance sheet for 1979. The closing balance sheet included the 1980 announced price increases, while the prior year's standard cost had been utilized in the interim monthly financial statements. Plaintiff admits that he was put on notice that the closing balance sheet was subject to year-end adjustments, but complains that defendant did not act in good faith because (1) the closing balance sheet used a different standard cost; (2) no explanation was given indicating what method was used to determine the new standard; (3) the use of the January 1980 announced price increase clouded the meaning of year-end adjustments; and (4) the inconsistent accounting methods required plaintiff to make a good faith effort to disclose them. The effect of the alleged misrepresentation, according to the plaintiff, was to make Weiss pay for inventory valued at a price in effect after the effective date of sale (December 31, 1979). In other words, Forms claims that American Standard made Weiss pay an inflated price for the inventory.\nDefendant, in its motion for summary judgment, maintains that there are no triable issues of material fact and that as a matter of law plaintiff has no action on this record. The revaluation of the inventory was provided for in the Agreement and the method used was a generally accepted accounting procedure.[2] Defendant maintains that paragraph 6(e) of the Agreement put plaintiff on notice that the closing balance sheet was not prepared in the same manner as the 1979 unaudited financial statements. The method used was the \"standard cost\" method of valuing inventories, a generally accepted accounting procedure that revalues the inventory on the basis of the standard cost for the up-coming year. The plaintiff was provided with closing financial statements for the years 1976, 1977, 1978, each of which revealed a similar year-end inventory revaluation (Exhibits \"A\", \"B\", \"C\", Defendant's Motion for Summary Judgment, Deposition of Weiss, April 19, 1982 at 82). Plaintiff was also provided in January 1980 with the December 31, 1979 monthly statement, which included the revaluation (Exhibit \"T\", Defendant's Motion for Summary Judgment). Defendant maintains that the aggregate effect of these actions by American Standard *319 was to put plaintiff on notice that the inventory would be revalued.[3]\nPlaintiff at one point characterizes American Standard's alleged failure to fully disclose the method used to revalue the inventory as a violation of the good faith provision of the Uniform Commercial Code. 13 Pa. Cons. Stat. Ann. \u00a7 1203 (Purdon 1980). \"Good Faith\" is elsewhere defined in Article one as \"honesty in fact is the conduct or transaction concerned.\" 13 Pa. Cons. Stat. Ann. \u00a7 1201 (Purdon 1980). This good faith provision proscribes a standard of conduct, not a cause of action. This is because good faith like the truth has been torn in thousand pieces, and the law has yet to reassemble them all. See J. Milton, Aereopagitica. Therefore the law has developed a more humble, but more substantive, standard by which to measure good faith, the tort if misrepresentation.\nAn action for misrepresentation requires the plaintiff to plead and prove (1) a misrepresentation, (2) a fraudulent utterance thereof, (3) an intention by the maker that the recipient will thereby be induced to act, (4) justifiable reliance by the recipient upon the misrepresentation, (5) damage to the recipient as the proximate result. Scaife Company v. Rockwell-Standard Corporations, 446 Pa. 280, 285, 285 A.2d 451, 454 (1972); Neuman v. Corn Exchange National Bank & Trust Company, 356 Pa. 442, 450, 51 A.2d 759, 763 (1947). The Parol Evidence Rule does not bar extrinsic evidence to show fraud or misrepresentation. Betz Laboratories, Inc. v. Hines, 647 F.2d 402 (3d Cir. 1981); Shulman v. Continental Bank, 513 F.Supp. 979, (E.D. Pa. 1981).\nThe issue then is whether plaintiff has submitted any evidence showing fraud or misrepresentation. If not, then the complaint has not stated a cause of action and summary judgment is appropriate. Hubicki v. ACF Industries, 484 F.2d 519, 522 (3d Cir. 1973). I conclude that there is no record evidence for misrepresentation or fraud and will therefore grant defendant's motion for summary judgment as to this count. American Standard used a standard accounting procedure that it had used in the past. It made this information available to Weiss several months before the closing. Moreover, the Agreement provided that the closing balance sheet would reflect year-end adjustments which were prepared in a manner \"consistent with that of the previous year.\" (Paragraph 6(e), see footnote 2 supra). Mr. Weiss was therefore placed on both real and constructive notice that the inventory would be revalued on the basis of the subsequent year's costs. Even if there had been an inconsistency, the fact that plaintiff is dissatisfied with the revaluation does not oblige me to rewrite the contract to ameliorate his mistake. \"A misrepresentation as to the subject of a proposed sale will not support an action for deceit if the subject be open to the buyer's observation.\" Scaife Company, 446 Pa. at 287, 285 A.2d 451 (quoting Emery v. Third Nat'l Bank, 308 Pa. 504, 162 A. 281 (1932).\n\nIV. Count II: Computer Documents\n\nBoth plaintiff and defendant seek summary judgment on this count. Forms alleges in its complaint that American Standard knew that the full amount of the Computer Documents claim was $33,403.00 but that it deliberately misrepresented the claim as being only $22,205.00. The plaintiff avers that it relied on American Standard's good faith and it did so because the negotiations on the claim occurred during the hectic closing proceedings.\n*320 Defendant's motion for summary judgment is based on the language in a side letter, executed as part of the Agreement, that limited American Standard's liability for the Computer Document claim for any amount \"up to $22,205\" (Exhibit \"O\", Plaintiff's Motion for Summary Judgment). Defendant argues that this wording written by Weiss, anticipated a higher claim and expressly limited defendant's liability. Defendant further argues that plaintiff's allegation of fraud is no more than a bold allegation, unsupported by the facts. Moreover, any reliance on a representation contrary to the Agreement's side letter is unjustifiable as a matter of law. Since the wording of the side letter is clear, there is no issue of material fact and defendant therefore maintains that it is entitled to summary judgment.\nIn its response and in its own motion for summary judgment, plaintiff admits that the side letter is clear on its face, but seeks to introduce parol evidence to show that American Standard knew the Computer Documents claim would significantly exceed $23,205.00 and that it fraudulently undervalued the figure. Forms alleges that both Kercher and Gordon knew the liability would exceed $31,000.00; Kercher because he was told by Thomas Reeve, who handled the account, and Gordon because Reeve had discussed it with him prior to the closing (Reeve Affidavit, Plaintiff's Response to Defendant's Motion for Summary Judgment; Kercher Deposition, at 134). Kercher also sent a memorandum to Sears on February 25, 1980 informing him that the liability would be approximately $25,000.00 (Exhibit \"P\", Plaintiff's Motion for Summary Judgment). Forms's allegation that American Standard deliberately suppressed the truth is based first on the putative inconsistent statements of Gordon (who maintains he had no knowledge of the higher figure, Gordon Deposition at 57-60) and those of Reeve and Kercher, and second on American Standard's failure to include the claim on the closing balance sheet, which under the Agreement's paragraph 2(a)(i) determines who assumes liability. Forms argues that its reliance on the lower figure was justified because American Standard brought up the claim and readily assumed liability, and because the hectic activity of closing precluded an accurate check of the claim.\nAmerican Standard argues in response that it is entitled to summary judgment on any one of three grounds. First, Forms violated the Arbitration Clause of the Agreement, which obliges the parties to submit disputed claims to binding arbitration by independent accountants.[4] Second, the Agreement unambiguously limits American Standard's liability to $22,205.00. American Standard points out that its agreement to pay this amount was gratuitous, since it was required to accept liability for goods shipped before December 31, 1979 only when the aggregate claims exceeded $50,000 (Agreement paragraph 13(a)). Third, the misrepresentation claim must fail, because even if a factual misrepresentation did occur, Weiss could not justifiably rely on such a misrepresentation since it was contrary to the plain language of the letter.\nI have been directed to no record evidence of fraud and will therefore grant defendant's motion for summary judgment. Forms has not met the burden mandated by the Federal Rules of setting forth specific facts showing that there is a genuine issue for trial: \"When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.\" Fed. R. Civ. P. 56(e). The initial burden of support under the Federal Rules is upon the movant, who must show that the facts which would warrant summary judgment in his favor are indisputable with the opposing party *321 given the benefit of any favorable inferences. See 6 Moore's Federal Practice \u00b6 56.15[1] at 56-344. But the burden shifts to the opposing party when the movant presents evidence which would require a directed verdict in his favor at trial. Cousins v. Yeager, 394 F.Supp. 595 (E.D.Pa. 1975); 6 Moore's Federal Practice, \u00b6 56.11[3]. \"The party resisting a motion for summary judgment may not rest upon the mere allegations of his pleading; his response must set forth specific facts showing that a genuine issue for trial exists.\" Wire Mesh Products, Inc. v. Wire Belting Association, 520 F.Supp. 1004, 1005 (E.D. Pa. 1981).\nForms has not met the burden of setting forth specific facts showing that there is a genuine issue for trial, so summary judgment is appropriate. The mere assertion that a genuine issue exists, without any showing of evidence, would defeat the whole purpose of summary judgment. The web of facts Forms spins will not support the weight of its allegation. There is nothing in the record to indicate that American Standard knowingly and willfully misrepresented the amount of the Computer Documents claim. Kercher in his deposition said only that he had a conversation with Gordon about the amount of the Computer Document claim, not what the amount was. Kercher's memorandum to Sears is equivocal about the amount of the claim, stating only that \"there may be a potential liability claim of approximately $25,000...\" (Exhibit \"P\", Plaintiff's Motion for Summary Judgment). Finally, there is no evidence, parol or otherwise, that Gordon knew the amount was greater than the $23,205 figure agreed upon at the closing. An argument based upon what Gordon may have known or should have known does not meet the threshold scienter requirement for fraudulent misrepresentation.\nAgain this Court is being asked to rewrite the contract to ameliorate plaintiff's mistake. American Standard agreed at closing to assume liability for up to $22,205 in a letter Mr. Weiss later admitted was poorly drafted (Deposition of Weiss, April 30, 1982 at 70). American Standard was already obliged to assume liability for any claims exceeding $50,000.00. Finally, plaintiff admits to making a mistake of judgment by not requiring further documentation of the Computer Document claim. (Deposition of Weiss, April 30, 1982, at 69-70). This being the case, plaintiff will not now be permitted to use an allegation of fraud to restructure the agreement.\n\nV. Count III: Accounts Receivable Claim\n\nForms alleges in this count that American Standard fraudulently misrepresented that all accounts receivable on the closing balance sheet were collectible, while knowing that a number of them were in fact bad debts. As a result, plaintiff claims damages of $23,979.00.\nDefendant's motion for summary judgment is based on the wording of the Agreement. Weiss requested an absolute warranty of collectibility on accounts receivable during the negotiations, and American Standard repeatedly rejected the request (Exhibit \"K\", Defendant's Motion for Summary Judgment). The final agreement reflects this position by requiring American Standard to provide a warranty for \"all receivables in the closing balance sheet ... [that] are collectible ... in the ordinary course of business.\" (Agreement, paragraph 6(n)). Accounts receivable on the closing balance sheet were $1,392,041.00. Forms failed to collect $23,979.00. This means that Forms collected over 99% of accounts receivable. Defendant maintains that a 99.4% collection rate on accounts receivable comports with the Agreement's terms of collectible \"in the ordinary course of business.\"\nOn September 11, 1979 American Standard discontinued, retroactive to August 31, 1979, the reserve fund it had maintained to cover bad debts. The customer credit allowances were thereafter charged directly to the profit and loss account as incurred. (Exhibits \"F\" and \"G\", Plaintiff's Response to Defendant's Motion for Summary Judgment). Plaintiff's theory is that American Standard's failure to disclose the termination of the bad debt fund, coupled with its *322 knowledge that all of the bad debts could not be collected, constitutes a fraudulent misrepresentation designed to induce Weiss to purchase Forms. Plaintiff maintains that these allegations raise genuine issues of material fact that make summary judgment inappropriate.\nAgain I am obliged to rule in favor of the defendant and grant its motion for summary judgment. Forms has failed to meet its burden of submitting issues of material fact that would justify a trial. The party opposing summary judgment must set forth in its reply specific facts showing there is a genuine issue for trial. Fed. R. Civ. P. 56(e); Wire Mesh Products, Inc. v. Wire Belting Association, 520 F.Supp. 1004 (E.D. Pa. 1981). Forms merely alleges fraud, and this is insufficient to overcome a motion for summary judgment. First, American Standard did not misrepresent the warranty of collection when it eliminated the bad debt reserve since it would still have remained liable for whatever was collectible in the ordinary course of business. Moreover, the elimination of the bad debt reserve in August occurred long before American Standard agreed to negotiate solely with Weiss and therefore can in no way be said to have fraudulently induced the sale. Second, the record evidence clearly shows that there was no fraud in the execution of the contract, since an absolute warranty was discussed and rejected in favor of collectibility in the ordinary course of business. (Exhibit \"K\", Point 27; Exhibit \"S\", Point 27; Agreement, paragraph 6(h), Defendant's Exhibits in Support of Motion for Summary Judgment).\nThe problem, then, is not at bottom one of fraud but of the construction and legal effect of the contract, and this is an issue properly within the purview of the court. Holmes v. Chartiers Oil Co., 138 Pa. 546, 21 A. 231 (1891). \"Summary judgment is properly used for interpreting a contract whose terms are considered by opposing parties to be clear and unambiguous, despite the parties' divergent views of what the agreement provided.\" Goldinger v. Boron Oil Company, 375 F.Supp. 400, 413 (W.D. Pa. 1974); Trans-Fuel Inc. v. Saylor, 440 Pa. 51, 269 A.2d 718 (1970). Summary judgment for defendant is proper on this count because of the evidence that an absolute warranty of collection was repeatedly rejected during the negotiations by American Standard and because the Agreement explicitly limits the warranty to accounts receivable \"in the ordinary course of business.\"\nOne final point remains to be considered: whether the percentage of uncollected bad debts falls within the definition of \"collectible ... in the ordinary course of business.\" This issue would appear to be one of material fact, thus precluding summary judgment for American Standard. However, the party opposing summary judgment, Forms, must do more than rely on contrary and conclusory allegations in a well-pleaded complaint. It must set forth specific facts showing that there is a genuinely disputed factual issue for trial. Fed. R. Civ. P. 56(e); see Tunnell v. Wiley, 514 F.2d 971, 976 (1975). Summary Judgment for the movant who has carried his burden of proof is appropriate if the opposing party does not supplement the record. Fed. R. Civ. P. 56(e); See First National Bank v. Cities Service Co., 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968); Tripoli Co., Inc. v. Wella Corp., 425 F.2d 932 (3d Cir. 1970). Summary judgment is granted on this count because Forms failed to direct my attention to any evidence to support its claim that the percentage of uncollected accounts receivable exceeded the industry standard for collectibility in the ordinary course of business.\n\nVI. Count IV: David Kercher Claim\n\nPlaintiff claims that it was fraudulently induced to exempt David Kercher, the General Manager of Forms, from the employment restriction clause of the Agreement. Both Forms and American Standard have moved for summary judgment.\nForms alleges that Kercher and American Standard concocted a \"sweetheart deal\" in which American Standard surreptitiously agreed to retain Kercher after the sale of Forms and then induced an exemption letter from Weiss in order to invoke it after *323 the closing. Plaintiff contends that American Standard indicated to Weiss that it would offer Kercher a position only if a deal with the new Forms management could not be worked out, and that on the basis of this false representation, Weiss executed the side letter exempting Kercher. In support of its claim plaintiff points to several documents. The first is the letter of November 12, 1979 in which American Standard offered to keep Kercher on the payroll for one year if he chose not to remain with Forms after its sale (Exhibit \"C\", Plaintiff's Motion for Summary Judgment). Plaintiff maintains that Kercher's level of performance declined markedly from this date. Second, there is the personnel transfer order, which assigned Kercher to the Business Forms Group retroactive to March 10, 1980 (Exhibit \"J\", Plaintiff's Motion for Summary Judgment). This transfer was written on March 13, 1980, one day after the sale of Forms and the resignation of Kercher. Plaintiff believes that these two events, the one year payroll extension promise and the act retroactively triggering the promise, sufficiently demonstrate that American Standard misrepresented to Weiss that it would not offer an employment contract to Kercher and that by this misrepresentation Weiss was induced to exempt Kercher from the employment restriction. Plaintiff now seeks summary judgment and relief of $300,000.00. The figure is based on damages allegedly caused by Kercher's diminished performance from November 12, 1980 and by the delay caused by the sweetheart deal in hiring a replacement.\nAmerican Standard has also moved for summary judgment. It contends that plaintiff has failed to set forth a precise misrepresentation, and it specifically denies plaintiff's two general allegations that it misrepresented to Weiss that it would not offer a position to Kercher or that it offered Kercher a position before the closing. The first allegation is based upon a statement allegedly made by Sears to Weiss in which Sears said \"[w]e're not going to take David Kercher away from Forms. We're not going to offer him employment, but should he come to us, you know, we might \u0097 we would be obligated to do something for him.\" (Deposition of Weiss, April 19, 1982, at 103). Defendant maintains that, assuming this statement was made it misrepresents no statement of fact. The uncontroverted evidence is that American Standard first learned of Kercher's decision to leave Forms on the closing date March 12, and offered him a job a month later, sometime in mid-April.[5] Second, American Standard contends that the one-year transition agreement of November 12, 1979 was a courtesy to a long-time employee and not a job offer. Finally, American Standard argues that given the unequivocal language of the side letter exempting Kercher from the employment restriction, any reliance on a contrary representation would be unjustified as a matter of law. (Exhibit \"N\", Defendant's Motion for Summary Judgment). Under the explicit terms of the Agreement American Standard was free to negotiate with Kercher at any time. Therefore no misrepresentation occurred and summary judgment must be awarded to the defendant.\nI agree with the defendant's argument and will therefore grant its motion for summary judgment on this count. Proof in a fraud action in Pennsylvania law must be \"clear, precise, and indubitable.\" Kaufman v. Mellon National Bank and Trust Co., 366 F.2d 326, 330 (3d Cir. 1966), and must provide evidence satisfying the elements of misrepresentation: a material representation was made that was known to be false, the maker intended the representation to be relied upon to the listener's detriment, there was justifiable reliance, and resulting damages. Edelson v. Bernstein, 382 Pa. 392, 115 A.2d 382 (1955); Girard Bank v. John Hancock Mut. Life Ins. Co., 524 F.Supp. 884, 894 (E.D. Pa. 1981). Plaintiff has failed to show that there was a false representation that was known to be *324 false and was uttered with the intent to induce reliance. No possible construction could be placed upon Mr. Sears's comment to Mr. Weiss to bring it within the ambit of tortious misrepresentation. Moreover the November 12, 1979 letter promising Kercher a one year transition salary must be read as defendant describes it: as an accommodation to a long-time employee. In any case, the promise was made almost a month before Weiss's initial offer and a month and a half before American Standard agreed to negotiate solely with Weiss. Since no false representation was made, I am left with the plain language of the agreement, which unambiguously permitted American Standard to offer Kercher a job. Therefore plaintiff has failed to demonstrate an issue for trial and summary judgment must be granted for defendant. Goldinger v. Boron Oil Co., 375 F.Supp. 400, 413 (1974).\n\nVII. Counts V & VI: Breach of Contract and Punitive Damages\n\nAlthough not specifically mentioned in defendant's motion for summary judgment, I have decided to enter judgment for the defendant on these counts for the reasons cited above in the discussion of the substantive counts. An appropriate order will be entered.\nNOTES\n[1] The final claim of $31,902.74, plus a $1,500 letter of credit, was eventually settled as a credit on the Computer Documents account after the sale of Forms to Weiss.\n[2] Paragraph 6(e) of the Agreement provides in relevant part that\n\n[t]he Closing Balance Sheet was prepared by seller in accordance with generally accepted accounting principles, and except for normal year-end adjustments, in a manner consistent with that employed in the preparation of the unaudited balance sheets of Forms as of August 31, 1979, September 30, 1979, October 31, 1979, and November 30, 1979, copies of which have been previously delivered to Buyer and Seller has delivered to Buyer a letter from Arthur Young & Company [American Standard's accounting firm] to the effect that the closing balance sheet was prepared in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceeding year.\n[3] I note at the outset that plaintiff is correct in arguing that the arbitration clause does not apply to this or any other claim made in this lawsuit. Paragraph 8(a) of the Agreement specifically restricts the arbitration to cash activities and post-closing adjustments for the period from the effective date of sale (December 31, 1979) to the closing date (March 12, 1980). The Inventory Revaluation Claim (Count I) relates to the standard cost measure on the closing balance sheet for 1979. The Computer Documents Claim (Count II) is based on a claim for defective goods shipped prior to the effective date. The Accounts Receivable Claim (Count III) relates to uncollected accounts prior to December 31, 1979. The David Kercher claim (Count IV) does not relate to cash activities but to Kercher's exemption from the employment restriction clause.\n[4] See footnote 3 supra.\n[5] The precise date is unclear but, given the exemption addendum, is irrelevant for the purpose of this case.\n"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 17-6682\n\n\nJOSHUA D. BLAIR,\n\n Petitioner - Appellant,\n\n v.\n\nVIRGINIA DOC,\n\n Respondent - Appellee.\n\n\n\nAppeal from the United States District Court for the Eastern District of Virginia, at\nRichmond. Roderick Charles Young, Magistrate Judge. (3:16-cv-00934-RCY)\n\n\nSubmitted: October 17, 2017 Decided: October 19, 2017\n\n\nBefore FLOYD and HARRIS, Circuit Judges, and HAMILTON, Senior Circuit Judge.\n\n\nDismissed by unpublished per curiam opinion.\n\n\nJoshua D. Blair, Appellant Pro Se. Michael Thomas Judge, OFFICE OF THE\nATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for Appellee.\n\n\nUnpublished opinions are not binding precedent in this circuit.\n\fPER CURIAM:\n\n Joshua D. Blair seeks to appeal the magistrate judge\u2019s order dismissing as\n\nuntimely his 28 U.S.C. \u00a7 2254 (2012) petition. * The order is not appealable unless a\n\ncircuit justice or judge issues a certificate of appealability. 28 U.S.C. \u00a7 2253(c)(1)(A)\n\n(2012). A certificate of appealability will not issue absent \u201ca substantial showing of the\n\ndenial of a constitutional right.\u201d 28 U.S.C. \u00a7 2253(c)(2) (2012). When the district court\n\ndenies relief on the merits, a prisoner satisfies this standard by demonstrating that\n\nreasonable jurists would find that the district court\u2019s assessment of the constitutional\n\nclaims is debatable or wrong. Slack v. McDaniel, 529 U.S. 473, 484 (2000); see Miller-\n\nEl v. Cockrell, 537 U.S. 322, 336-38 (2003). When the district court denies relief on\n\nprocedural grounds, the prisoner must demonstrate both that the dispositive procedural\n\nruling is debatable, and that the petition states a debatable claim of the denial of a\n\nconstitutional right. Slack, 529 U.S. at 484-85.\n\n We have independently reviewed the record and conclude that Blair has not made\n\nthe requisite showing. Accordingly, we deny a certificate of appealability, deny leave to\n\nproceed in forma pauperis, and dismiss the appeal. We dispense with oral argument\n\nbecause the facts and legal contentions are adequately presented in the materials before\n\nthis court and argument would not aid the decisional process.\n\n DISMISSED\n\n\n *\n This case was decided by a magistrate judge with the parties\u2019 consent pursuant to\n28 U.S.C. \u00a7 636(c) (2012).\n\n\n 2\n\f"} -{"text": "\n175 Cal.App.3d 146 (1985)\n220 Cal. Rptr. 549\nRICHARD CAPLAN, Plaintiff and Appellant,\nv.\nFIREMAN'S FUND INSURANCE COMPANY, Defendant and Respondent.\nDocket No. B007800.\nCourt of Appeals of California, Second District, Division One.\nDecember 2, 1985.\n*147 COUNSEL\nRose, Klein & Marias and Anthony A. Trendacosta for Plaintiff and Appellant.\nHaight, Dickson, Brown & Bonesteel, Harold H. Brown, Roy G. Weatherup, John R. Seashore and Robert M. Dato for Defendant and Respondent.\nOPINION\nHANSON (Thaxton), J.\nAppellant Richard Caplan (Plaintiff) filed an action in the superior court naming as defendant Fireman's Fund Insurance Company (Fireman's Fund), respondent herein. Plaintiff was injured in the course and scope of his employment with Columbia Pictures whose workers' compensation carrier was Fireman's Fund. In his complaint, Plaintiff prays for general damages, punitive damages in the sum of $5 million and attorney fees for the alleged \"wrongful refusal to pay insurance benefits,\" \"bad faith,\" violation of Insurance Code section 790.03, subdivision (h), and intentional and negligent infliction of emotional distress all essentially based upon an alleged unreasonable delay in paying workers' compensation benefits, including failure to notify him of an available rehabilitation program.\nThe superior court (Hon. Charles E. Jones, Judge Presiding) granted defendant Fireman's Fund's motion to dismiss concluding that exclusive jurisdiction over the claims pursued by plaintiff rests with the Workers' Compensation Appeals Board (WCAB). Plaintiff appeals. We affirm.\n(1) The sole issue on appeal is whether or not the claims alleged by Plaintiff against Fireman's Fund rests exclusively within the jurisdiction of the WCAB.\nPlaintiff's reliance on Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616 [102 Cal. Rptr. 815, 498 P.2d 1063] is grossly misplaced. The *148 conduct complained of in the instant case is markedly distinguishable from that in Unruh. Here, the conduct complained of falls a country mile short of the type of \"outrageous and extreme\" conduct contemplated by Unruh.\nWe flat-out hold that the trial court correctly dismissed the instant action. It is unnecessary to belabor the point or rehash the matter in view of the clear statutory mandate (see Lab. Code, \u00a7\u00a7 3600, 3601, 5300 and 5814) as construed ad nauseam and ad infinitum by a spate of Court of Appeal decisions, many of which petitions for hearing have been denied by the state Supreme Court. (See Everfield v. State Comp. Ins. Fund (1981) 115 Cal. App.3d 15 [171 Cal. Rptr. 164] (petn. for hg. den., Apr. 2, 1981); Fremont Indemnity Co. v. Superior Court (1982) 133 Cal. App.3d 879 [184 Cal. Rptr. 184] (petn. for hg. den., Aug. 18, 1982); Cervantes v. Great American Ins. Co. (1983) 140 Cal. App.3d 763 [189 Cal. Rptr. 761] (petn. for hg. den., May 18, 1983); Ricard v. Pacific Indemnity Co. (1982) 132 Cal. App.3d 886 [183 Cal. Rptr. 502] (petn. for hg. den., Aug. 11, 1982); Depew v. Hartford Acc. & Indem. Co. (1982) 135 Cal. App.3d 574 [185 Cal. Rptr. 472]; Droz v. Pacific National Ins. Co. (1982) 138 Cal. App.3d 181 [188 Cal. Rptr. 10] (petn. for hg. den., Apr. 13, 1983); Denning v. Esis Corp. (1983) 139 Cal. App.3d 946 [189 Cal. Rptr. 118] (petn. for hg. den., Apr. 13, 1983); Argonaut Ins. Co. v. Superior Court (1985) 164 Cal. App.3d 320 [210 Cal. Rptr. 417]; and Santiago v. Employee Benefits Services (1985) 168 Cal. App.3d 898 [214 Cal. Rptr. 679].)\n\"In these days of ever shrinking judicial resources, the plaintiffs' bar would be well advised to heed these rules [re exclusive jurisdiction of the WCAB] and to concentrate its energy on securing swift and simple compensation for the injured employee in the forum which has exclusive jurisdiction over the claims. Its continual efforts to make end-runs around the exclusivity provisions of the workers' compensation system would be more appropriately addressed to the Legislature in which is vested the plenary power to create and enforce the workers' compensation system. (Cal. Const., art. XIV, \u00a7 4.)\" (United States Borax & Chemical Corp. v. Superior Court (1985) 167 Cal. App.3d 406, 411 [213 Cal. Rptr. 155]; fn. omitted.)\nThe judgment of dismissal is affirmed.\nSpencer, P.J., and Baffa, J.,[*] concurred.\nNOTES\n[*] Assigned by the Chairperson of the Judicial Council.\n"} -{"text": "556 F.2d 570\nVuonov.Weinberger\nNo. 76-1870\nUnited States Court of Appeals, Third Circuit\n3/8/77\n\n1\nW.D.Pa.\n\nAFFIRMED\n"} -{"text": "\n24 Cal.App.2d 177 (1937)\nTHE PEOPLE, Respondent,\nv.\nVIRGIL TRANTHAM, Appellant.\nCrim. No. 507. \nCalifornia Court of Appeals. Fourth Appellate District. \nDecember 22, 1937.\n Morris B. Chain and Abram M. Marks for Appellant.\n U.S. Webb, Attorney-General, and R. S. McLaughlin, Deputy Attorney-General, for Respondent.\n Marks, J.\n By the first count of an information defendant was charged with the violation of section 500 of the Vehicle Code (negligent homicide), and in a second count with violation of section 501 of the same code (driving a motor vehicle while under the influence of intoxicating liquor and causing bodily injury to another). He was acquitted of the first offense charged and convicted of the second.\n He presents three grounds for a reversal of the judgment: (1) that the evidence is insufficient to support the verdict and judgment; (2) that the acquittal of the first charge is *179 in effect an acquittal of the second; and, (3) exclusion of evidence proffered by him.\n At about 6 o'clock on the afternoon of June 20, 1937, defendant was driving his automobile west on Fresno Avenue in Kern County. It came into contact with a motorcycle being driven east on Fresno Avenue by James Massey and caused injuries to Massey which resulted in his death. Counsel for appellant admits that the evidence of intoxication was so sufficient that it cannot be challenged here.\n [1] The act forbidden by law, and committed by defendant while driving his automobile when intoxicated, which supports the conviction, is driving on his left-hand side of the road just before the accident.\n The automobile and motorcycle came into a head-on collision on defendant's right-hand side of the road. It is the theory of the people that defendant was driving on his left side of the road; that to avoid the collision, Massey, who was riding on his own right-hand side of the road, swerved to the left; that at the same time defendant swerved to his right; that these maneuvers brought the two vehicles into collision on the north, or defendant's right-hand side of the road.\n The following evidence supports this theory: \"Q. Now, some time shortly after you arrived at the place where the car and motorcycle were, did you make any examination of the road surface, of the road near that car? A. Yes, sir. Q. And what, if anything, did you find? A. Well, I found skid marks on the road where someone had thrown on the brakes and rolled the wheels and skidded from the left hand side of the road over to the right. Q. How close did those skid marks come to the defendant's car? A. Within about six feet. Q. And about how long would you say these skid marks were from the place they began to the place they ended? A. I judge from where the car was standing to where the skid marks started about 23 or 24 feet. ... Q. If you know, Mr. Simms, had any other cars passed and traveled over that portion of the road from the time you arrived at the collision until you saw those marks on the road? A. You mean cars passing the scenes of the accident? Q. Yes, pass over that place where you saw the skid marks? A. No, all cars stopped when they got up there and seen there had been a wreck, stopped the closest place they could stop.\" *180\n In addition to the foregoing testimony the witness made a diagram of the roadway at the scene of the accident on which he showed skid marks starting well over on the south side of the roadway and veering sharply northerly onto its north side and to the place where the vehicles came into contact.\n This evidence supports the implied finding of the jury that defendant, while under the influence of intoxicating liquor, drove his motor vehicle in a manner forbidden by law which act proximately caused bodily injury to Massey (sec. 501, Vehicle Code) for section 525 of the same code requires a vehicle to be driven on its right-hand side of the road except under conditions not in evidence here.\n [2] Defendant urges that the same act of negligence on his part was involved in both of the crimes charged and that an acquittal of the negligent homicide charge of necessity must have been an acquittal of the driving while intoxicated charge.\n In the recent case of People v. Coltrin, 5 Cal.2d 649 [55 PaCal.2d 1161], this question was considered by the Supreme Court, which said:\n \"The constitutional provision referred to relates to a second jeopardy for the same offense. Section 654 of the Penal Code does not apply to statutes which do not make an act or omission punishable in different ways but which name different acts and different offenses, and punish each act separately. (People v. Mehra, 73 Cal.App. 162 [238 P. 802].) If the act involved in one charge is necessarily involved in the other and is merely incidental to that charge but one offense is committed and it cannot be carved into two offenses in order to inflict a double punishment. (People v. Mazzola, 99 Cal.App. 682 [279 P. 211].) But where the two offenses are entirely separate and distinct and the one is not necessarily included in the other, a prosecution for the one is no bar to a prosecution for the other even though the same testimony may be applicable to both. (In re O'Connor, 80 Cal.App. 647 [252 P. 730].) In that case, the court said: 'While a single act may be an offense against two statutes, and thus constitute two crimes, if each statute requires proof of a fact additional to those involved in the other an acquittal or conviction of either does not result in the defendant having been in jeopardy for the other.' In People v. Kerrick, 144 Cal. 46 [77 P. 711], the court said: 'to be \"necessarily included\" in the offense charged, the lesser offense must *181 not only be part of the greater in fact, but it must be embraced within the legal definition of the greater as a part thereof. \"To entitle a defendant to the plea of autrefois convict of acquit, it is necessary that the offense charged be the same in law and fact.\" (People v. Helbing, 61 Cal. 620.)' In People v. Day, 199 Cal. 78 [248 P. 250], the court said: 'It may be conceded that if the two counts stated precisely the same offense that an acquittal upon one count would operate as an acquittal upon the other count. ... It is not the great similarity in most of the facts constituting separate offenses but the presence of a fact necessary in one offense and absent in another that determines whether offenses are separate.'\"\n When we apply these rules to the facts of the instant case the contention of defendant cannot be sustained. In order to support the conviction under the second count it is necessary that it be established that defendant was operating his car while under the influence of intoxicating liquor. No such proof is required to support a conviction of negligent homicide. Therefore, there is here \"a fact necessary in one offense and absent in another that determines\" that the offenses are separate.\n [3] Defendant attempted to prove that Massey was intoxicated several hours before the accident. The evidence was excluded and defendant assigns this ruling as error. This contention cannot be sustained. The evidence was too remote in point of time. There was no causal connection offered to be shown between the accident and Massey's intoxication, if he was intoxicated. One intoxicated motorist may not with impunity run down and kill another intoxicated motorist.\n Defendant relies on a short quotation from People v. Hurley, 13 Cal.App.2d 208, at 218 [56 PaCal.2d 978], to support this argument that evidence of the intoxication of Massey should have been admitted under the theory that this intoxication was the proximate cause of the accident. The trouble with this position is that he failed to offer or to show any connection between Massey's intoxication and the accident. Without some connection between the two the evidence was properly excluded.\n The judgment and order appealed from are affirmed.\n Barnard, P. J., and Jennings, J., concurred.\n"} -{"text": "5 F.3d 535NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.\nRonald S. BURGO, Plaintiff-Appellee,v.Edwin T. SHIMODA, Defendant-Appellant.\nNo. 92-16352.\nUnited States Court of Appeals, Ninth Circuit.\nSubmitted March 10, 1993.Memorandum Filed March 17, 1992.Memorandum Withdrawn Aug. 18, 1993.Decided Aug. 18, 1993.\n\nBefore: WALLACE, Chief Judge, FARRIS, and BRUNETTI, Circuit Judges.\n\nORDER\n\n1\nThe memorandum disposition filed on March 17, 1993 is withdrawn. The attached memorandum disposition is ordered filed.\n\n\n2\nThe panel has voted to deny appellant's petition for rehearing and to reject the suggestion for rehearing en banc.\n\n\n3\nThe full court has been advised of the suggestion for rehearing en banc and no active judge has requested a vote on whether to rehear the matter en banc. Fed.R.App.P. 35.\n\n\n4\nThe petition for rehearing is denied and the suggestion for rehearing en banc is rejected.\n\n\n5\nMEMORANDUM*\n\n\n6\nEdwin T. Shimoda, Administrator of the Oahu Community Correctional Center, appeals the district court's denial of his summary judgment motion based on qualified immunity in an action under 42 U.S.C. Sec. 1983 brought by Ronald S. Burgo, a Hawaii state prisoner. We have jurisdiction to review an appeal of the denial of a summary judgment motion on the ground of qualified immunity. Mitchell v. Forsythe, 472 U.S. 511, 530 (1985). We affirm.\n\n\n7\nWe review de novo the district court's denial of the defense of qualified immunity. Lum v. Jensen, 876 F.2d 1385, 1386 (9th Cir.), cert. denied, 493 U.S. 1057 (1990).\n\n\n8\nBurgo alleged that his eighth amendment right not to be subjected to cruel and unusual punishment was violated when Sergeant Supervisor Melvin Kauhane physically attacked him, breaking his jaw and causing other injuries. It is undisputed that the attack was unprovoked. Sergeant Kauhane had previously assaulted two other inmates. The district court denied Administrator Shimoda's summary judgment motion as premature, without prejudice to his reasserting qualified immunity as a defense, on the ground that there were disputed issues of fact about whether Shimoda knowingly failed to take steps to avert further assaults on inmates by Kauhane, thereby displaying deliberate indifference to Burgo's eighth amendment rights.\n\n\n9\nShimoda contends that the district court erred in denying his motion for summary judgment because (1) the law governing his conduct as Administrator of the prison was not clearly established; and (2) even if the district court had correctly ruled that Shimoda could be liable if he had been \"deliberately indifferent\" to the danger of Kauhane assaulting prisoners, Shimoda had not shown \"deliberate indifference.\"\n\n\n10\nQualified immunity protects government officials who perform discretionary functions from liability for damages if their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known, Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982), and \"could reasonably have been thought consistent with the rights they are alleged to have violated.\" Anderson v. Creighton, 483 U.S. 635, 638 (1987). To determine whether an official is entitled to qualified immunity, a court must determine (1) whether the right allegedly violated was \"clearly established\" at the time of the alleged violation, and (2) whether, in light of that law, a reasonable official could have believed his conduct to be lawful. Act Up!/ Portland v. Bagley, No. 90-35888, slip op. 1071, 1076-77 (9th Cir. Feb. 10, 1993). The officer should prevail if the right asserted by the plaintiff was not \"clearly established\" or if the officer could have reasonably believed that his conduct was lawful. Romero v. Kitsap County, 931 F.2d 624, 627 (9th Cir.1991). Officials are charged with knowledge of relevant law in existence at the time of the alleged violative conduct. Tribble v. Gardner, 860 F.2d 321, 324 (9th Cir.1988), cert. denied, 490 U.S. 1075 (1989). Ordinarily, the district court should resolve the question of qualified immunity before trial, Hunter v. Bryant, 112 S.Ct. 534, 536-37 (1991), but if \"a genuine issue of fact prevents a determination of qualified immunity at summary judgment, the case must proceed to trial.\" Act Up!, No. 90-35888, slip op. at 1079.\n\n\n11\nShimoda disputes the district court's conclusion that it was clearly established \"that a violation of the constitution would occur if a prison official who was in a position to take steps to avert an assault failed to do so intentionally or with deliberate indifference.\" At the time of the assault, in March 1988, it was clearly established that the use of excessive force against prisoners by prison personnel violated prisoners' eighth amendment rights. See McRorie v. Shimoda, 795 F.2d 780, 783-84 (9th Cir.1986). It was also clear that prison officials would be liable in their personal capacities under section 1983 if their conduct caused the violation. Id. (citing Kentucky v. Graham, 473 U.S. 159 (1985)). Prisoners could state a claim against prison personnel under 42 U.S.C. Sec. 1983 \"by establishing that prison personnel acted with 'deliberate indifference' in creating the condition that violates the eighth amendment.\" Leer v. Murphy, 844 F.2d 628, 633 (9th Cir.1988) (citing Johnson v. Duffy, 588 F.2d 740, 743 (9th Cir.1978) and Berg v. Kincheloe, 794 F.2d 457, 459 (9th Cir.1986)).\n\n\n12\nShimoda contends, however, that the \"deliberate indifference\" standard set forth in Leer, 844 F.2d 628, and Berg, 794 F.2d 457, is inapplicable because those cases involved attacks on inmates by other inmates, not attacks on prisoners by prison personnel. Leer made no such distinction, however, and when Leer was decided, we had previously held that prison officials would be personally liable under section 1983 for a deprivation of a prisoner's eighth amendment rights resulting from an assault by a prison guard if the officials' conduct \"caused the deprivation.\" McRorie, 795 F.2d at 783 (citing Kentucky v. Graham, 473 U.S. at 166). Accordingly, the district court correctly determined that Burgo's right not to be subjected to excessive force by prison personnel was clearly established, as was the responsibility of supervisory prison personnel not to act with deliberate indifference to that right. Leer, 844 F.2d 628, 633.1\n\n\n13\nShimoda also contends that even if \"deliberate indifference\" is the applicable standard, he was not deliberately indifferent to Burgo's rights because he did not know that Kauhane was having contact with inmates at the time of the attack on Burgo, and that it was not his direct responsibility to enforce the \"no contact\" order that issued after the first reported assault. Burgo contends, however, that Shimoda did know that Kauhane was in contact with inmates in violation of the order because a second assault by Kauhane on an inmate was reported while Kauhane was under the no-contact order, and Shimoda ordered an investigation into that incident. The parties also disagree about whether Shimoda is responsible for lengthy delays in investigating Kauhane's two previous assaults on inmates and in taking disciplinary action. Because these issues of fact must be resolved in order to determine whether Shimoda \"knowingly violated the law\" by failing to take steps to prevent Kauhane from repeating his physical attacks on inmates, the district court did not err in denying summary judgment. See Hunter v. Bryant, 112 S.Ct. 534, 537; Act Up!, slip op. at 1079.\n\n\n14\nAFFIRMED.\n\n\n\n*\n This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3\n\n\n1\n Shimoda contends that the Supreme Court's recent decision in Hudson v. McMillian, 112 S.Ct. 995 (1992) requires that Burgo prove that Shimoda acted \"maliciously or sadistically\" rather than with \"deliberate indifference\" to Burgo's rights. This decision does not affect our determination of whether Burgo had a clearly established right at the time of the alleged violation, for purposes of Shimoda's claim of qualified immunity. See Anderson v. Creighton, 483 U.S. 635, 640 (1987) (\"[I]n the light of preexisting law the unlawfulness must be apparent.\"); Tribble, 860 F.2d at 324\n\n\n"} -{"text": "\n494 F.Supp. 1037 (1980)\nClovis Carl GREEN, Jr.\nv.\nUNITED STATES DISTRICT COURT FOR the DISTRICT OF COLUMBIA.\nClovis Carl GREEN, Jr.\nv.\nMr. RODAK, Clerk, U. S. Supreme Court.\nClovis Carl GREEN, Jr.\nv.\nNorman A. CARLSON et al. (three cases).\nClovis Carl GREEN, Jr.\nv.\nCLERK, U. S. COURT OF APPEALS FOR the FIFTH CIRCUIT, et al.\nClovis Carl GREEN, Jr.\nv.\nMichael RODAK, Jr., Clerk, U. S. Supreme Court, et al.\nCiv. A. Nos. 80-2080 to 80-2086.\nUnited States District Court, District of Columbia.\nAugust 18, 1980.\n\nMEMORANDUM AND ORDER\nHART, District Judge.\nThis court in recent months has been exposed to litigation tactics utilized by one Reverend Clovis Carl Green, Jr., which can only be described as an enormous and malicious abuse of the judicial process. Since 1973 Mr. Green has filed twenty-nine complaints in this court on his own behalf. In the past several weeks, the number filed have exceeded ten. While these numbers are not relatively large when compared to the hundreds of cases he has filed in the federal courts throughout the country, the complaints and their accompanying motions, petitions and correspondence, when considered with this court's research of Mr. Green's behavior in other courts, are clearly part of a larger scheme whose sole purpose is to impede the machinery of justice.\nThis court has examined several of Mr. Green's reported cases from the Eighth Circuit, *1038 particularly those from the U. S. District Court for the Western District of Missouri. One of those cases, Green v. Camper, 477 F.Supp. 758 (W.D.Mo.1979), presents, in a thoroughly documented opinion, horn book definitions of \"abuse of process\" and \"malicious\" in the context of 28 U.S.C. \u00a7 1915(d). More than nine pages of the opinion are devoted to listing over 500 cases that that court knew had been filed by Mr. Green in the federal and other courts. This list does not include the cases that have been filed in this court. It is reasonable to assume that other cases filed by Mr. Green in other courts were overlooked as well. This opinion goes on to describe the disturbing policy of Mr. Green's alleged church (Human Awareness Universal Life Church) of encouraging all prisoners to continuously file court suits with the hope of eventually quintupling the number of prisoner-related court actions. 477 F.Supp. at 770. This court finds equally disturbing the threatening correspondence received by other courts in connection with Mr. Green's cases. 477 F.Supp. 770-71.\nThis court has also considered several decisions of the U. S. Court of Appeals for the Eighth Circuit dealing with Mr. Green's voluminous litigation; particularly In re Clovis Carl Green, Jr., 598 F.2d 1126 (8th Cir. 1979) and Green v. White, 616 F.2d 1054 (8th Cir. 1980). In 1978 that court had considered over 66 petitions for writs of mandamus from Mr. Green. None were granted. The court ordered that no more mandamus petitions would be accepted for filing. 598 F.2d at 1127. This year that same court severely limited the circumstances under which future applications by Mr. Green for in forma pauperis status under 28 U.S.C. \u00a7 1915 would be entertained by courts in the circuit. The courts of the circuit were prohibited from accepting for filing any of Mr. Green's pleadings for in forma pauperis filing, \"except for those pleadings, if any, that specifically allege constitutional deprivation by reason of physical harm or threats thereof to petitioner's persons.\" 616 F.2d at 1055. The court went on to require Mr. Green in the future to verify all pleadings, to include a list of previous related pleadings within all subsequent pleadings, and to send a copy of every pleading to the Chief Judge of the U. S. District Court for the Eastern District of Missouri. Id. at 1056. Some of these requirements were apparently intended to apply in all federal courts.\nThis court has carefully examined the contents of Mr. Green's most recently filed complaints. There is no nexus between the substance of these complaints and this court's geographic location. These complaints, many of which repeat the same allegations over and over again, mainly deal with Mr. Green's dissatisfaction with the staffs and conditions of confinement in the various places in which he has been incarcerated. It is clear to this court that Mr. Green is attempting to use this court as a vehicle for continuing his malicious pattern of litigation. This court can only conclude that, having been thwarted in his efforts to disrupt the judicial machinery of the Eighth Circuit, Mr. Green now desires to transfer his activities to a new circuit with the hope that he will be able to continue his abusive practices in a court that is unaware of his previous activities. Judge Hunter, in Green v. Camper, concluded with the following:\n[U]nless the Courts of this Nation are to be deemed to be powerless to stop such a flagrant abuse of the judicial process, one man will be able to preempt so much judicial time at the trial and appellate levels as to thwart the very ability of the judicial system to carry out its necessary judicial function of properly processing its criminal and civil dockets of cases filed by other litigants who may have meritorious matters.\n477 F.Supp. at 771.\nFor these reasons the above-captioned cases are hereby dismissed under 28 U.S.C. \u00a7 1915(d) as frivolous and malicious.\n"} -{"text": "859 F.2d 241\n273 U.S.App.D.C. 265\nUnpublished DispositionNOTICE: D.C. Circuit Local Rule 11(c) states that unpublished orders, judgments, and explanatory memoranda may not be cited as precedents, but counsel may refer to unpublished dispositions when the binding or preclusive effect of the disposition, rather than its quality as precedent, is relevant.Edward HANLON and Ruth Sanders, Appellants,v.AMERICAN FEDERATION OF GOVERNMENT EMPLOYEESAnd consolidated case.\nNo. 87-7156.\nUnited States Court of Appeals, District of Columbia Circuit.\nSept. 29, 1988.\n\nBefore BUCKLEY, STEPHEN F. WILLIAMS and SENTELLE, Circuit Judges.\nJUDGMENT\nPER CURIAM.\n\n\n1\nThis case was considered on the record on appeal from orders of the United States District Court for the District of Columbia. The court has determined that the issues presented occasion no need for a published opinion. See D.C.Cir.Rule 14(c). For the reasons stated by the district court in the order filed June 23, 1987, it is\n\n\n2\nORDERED and ADJUDGED that the district court's order dismissing the claims of appellants Hanlon and Sanders be affirmed. It is\n\n\n3\nFURTHER ORDERED on the court's own motion that this case be remanded to the district court to reconsider its September 11, 1987 order dismissing appellee AFGE's counterclaims of malicious and vexatious litigation.\n\n\n4\nThe Clerk is directed to withhold issuance of the mandate herein until seven days after disposition of any timely petition for rehearing. See D.C.Cir.Rule 15.\n\n"} -{"text": "Filed 7/17/15 P. v. Pimentel CA5\n\n\n\n\n NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS\nCalifornia Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for\npublication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication\nor ordered published for purposes of rule 8.1115.\n\n\n\n\n IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA\n\n FIFTH APPELLATE DISTRICT\n\nTHE PEOPLE,\n F067659\n Plaintiff and Respondent,\n (Super. Ct. No. BF144335A)\n v.\n\nPATRICIA PIMENTEL, OPINION\n Defendant and Appellant.\n\n\n\n APPEAL from a judgment of the Superior Court of Kern County. John R.\nBrownlee, Judge.\n Law Offices of Joy A. Maulitz and Joy A. Maulitz, under appointment by the\nCourt of Appeal, for Defendant and Appellant.\n Kamala D. Harris, Attorney General, Dane R. Gillette, Chief Assistant Attorney\nGeneral, Michael P. Farrell, Assistant Attorney General, Kathleen A. McKenna and\nLeanne LeMon, Deputy Attorneys General, for Plaintiff and Respondent.\n -ooOoo-\n\f A jury found defendant Patricia Pimentel guilty of child abuse (Pen. Code, \u00a7 273a,\nsubd. (a)),1 but could not reach a decision on the special allegation of infliction of great\nbodily injury on a child under the age of five years (\u00a7 12022.7, subd. (d)). At the\nsentencing hearing, the People dismissed the allegation of great bodily injury, and\nPimentel was placed on probation for four years and ordered to serve one year in county\njail.\n In this appeal, Pimentel contends she received ineffective assistance of counsel\nwhen her attorney failed to ensure that reference to a prior Child Protective Services\n(CPS) report was kept from the jury. In addition, she contends the trial court abused its\ndiscretion by denying her motion to reduce the conviction to a misdemeanor, and she\nclaims the search condition of her probation is unconstitutional.\n We affirm the judgment.\n FACTS AND PROCEDURAL HISTORY\n In November 2012, the Kern County District Attorney filed an information against\nPimentel charging her with a single count of causing or permitting her son, A., to be\ninflicted with unjustifiable physical pain or mental suffering. It was further alleged that\nPimentel personally inflicted great bodily injury upon A.\n On May 28, 2013, Pimentel filed a motion in limine to exclude, among other\nthings, \u201cevidence of prior bad acts committed by [Pimentel] against her children.\u201d She\nspecifically identified three occasions of prior bad acts. First, Pimentel told a social\nworker in 2006 that she heard voices telling her to kill her daughter, D., and that she\nwould put her hand over D.\u2019s mouth to prevent her from breathing. Second, in late 2011,\nwhen A. was one month old, he fell off a couch while in Pimentel\u2019s care and an\nambulance had to be called. Third, Pimentel told a social worker in April 2012 that she\naccidentally ate a marijuana-laced brownie prior to breastfeeding A. She argued that\n\n1 All further statutory references are to the Penal Code unless otherwise noted.\n\n\n 2.\n\fevidence of these incidents was irrelevant, constituted improper character evidence, and\n(to the extent it might be relevant) was substantially more prejudicial than probative.\n The People separately filed a motion in limine seeking to admit evidence that\nPimentel tried to suffocate her first infant child in 2006. The trial court agreed with\nPimentel that the probative value of evidence that she tried to suffocate her child in 2006\nwas substantially outweighed by the prejudicial effect. The court denied the People\u2019s\nmotion and granted Pimentel\u2019s motion to exclude evidence of prior bad acts committed\nby Pimentel against her children.\nProsecution\n On July 9, 2012, Jed Grant was working as physician\u2019s assistant in the emergency\ndepartment at San Joaquin Community Hospital in Bakersfield. That day, Pimentel\nbrought A., who was about seven months old, to the emergency department because he\nhad pain in his right arm. Grant met Pimentel around 4:00 p.m. She told Grant that A.\nhad been suffering arm pain and was not using his arm normally since she had picked\nhim up from a friend who had been watching the child. Pimentel said she did not know\nhow the injury occurred because the child was being watched by a neighbor.\n Grant observed swelling above A.\u2019s right elbow. He tested A.\u2019s range of motion\nand ordered X-rays. A radiologist reviewed the X-rays and diagnosed a spiral fracture of\nthe mid to distal humeral diaphysis, the long part of the bone between the elbow and the\nshoulder. Grant testified that a spiral fracture would usually require the limb to be caught\nin something or grasped and twisted and the injury can be consistent with child abuse.\n After receiving the X-rays and diagnosis, Grant told Pimentel that A. had a spiral\nfracture, and he asked again how the injury occurred. Pimentel seemed upset. She said\nshe did not know how the injury occurred because A. was at a friend\u2019s house. She said\nA. was fine when she dropped him off and when she picked him up he was not using his\narm correctly.\n\n\n\n 3.\n\f About 5:40 p.m., Grant contacted the Kern County Sheriff\u2019s Office because, he\nexplained, \u201cwe didn\u2019t have a good reason for how the fracture occurred.\u201d He also\nordered a skeletal survey, described as \u201clike an entire body scan.\u201d No other fractures\nwere found. Grant spoke to law enforcement, and A. was discharged from the hospital at\n7:27 p.m.\n Kern County Sheriff\u2019s Deputy Brian Hartley and his Field Training Officer,\nDeputy Braydon Ferguson, were dispatched to San Joaquin Community Hospital around\n6:30 p.m. for a possible child abuse case. Hartley spoke with Grant and Pimentel and\nsaw A. at the hospital. Pimentel told Hartley she left A. with neighbors while she went\njob hunting. She said the neighbors were Mark and Marissa, who lived in an apartment\ndirectly above hers. She told Hartley she felt comfortable leaving A. with her neighbors\nbecause she had known them for two years. Pimentel said she noticed A.\u2019s arm was\ninjured and talked to Mark and Marissa. They said her son was playing with other kids\nand the kids must have been playing rough. Pimentel said she took A. to the hospital\nwithin a half-hour of noticing the injury.\n Hartley then went to the address Pimentel gave for Mark and Marissa. No one\nanswered the door, and the apartment appeared to be vacant. While Hartley was\nknocking on the door, neighbors asked who he was looking for and told him that Mark\nand Marissa moved out about a month or two earlier. They told him the apartment was\nvacant.2\n Hartley went downstairs to Pimentel\u2019s apartment and knocked on the door. A boy\nwho identified himself as Freddie and appeared to be about 16 years old answered the\ndoor. Pimentel and A. were not home. Hartley called Pimentel; she told him she was\nwaiting at the hospital for discharge papers and she would be home shortly. Later that\n\n\n2 Pimentel later confirmed there was \u201cnobody there\u201d upstairs and the former neighbors had\nbeen gone about two weeks.\n\n\n 4.\n\fevening, Hartley met Pimentel at her apartment. A. was not there. Pimentel told Hartley\nshe had left A. with her mother. Hartley asked for her mother\u2019s telephone number, so he\ncould check up on A. At that point, Hartley and Pimentel were speaking outside, near the\nfront door of Pimentel\u2019s apartment. Pimentel hesitated, looked at Hartley, looked at her\nneighbors, and motioned for Hartley to go inside her apartment. When they were in her\napartment, Pimentel said A. was not with her mother, he was with one of her friends.\nHartley told her to call her friends and get A. home, so he could check on his welfare.\nHartley did not ask for the names of the friends. Within about five or 10 minutes, a boy\nin his early teens showed up holding A. Hartley did not interview the boy.\n Pimentel told Hartley that what she said at the hospital was not true. She said she\ncaused A.\u2019s injury, but it was an accident. She said she reached over the back of the\ncouch to pick up A. off the couch. She was holding diapers and other items with her left\narm, and she used her right arm to pick up A. She reenacted what happened,\ndemonstrating that she grabbed A.\u2019s right arm and twisted him up and held on to him.\nPimentel did not think A. was injured at that time because he did not cry. She said that\nseveral minutes later, he started to cry and she became concerned.\n Hartley called CPS. He felt A. was not safe with Pimentel because she had lied at\nthe hospital. He was also concerned that she \u201cpawned him off to some friends\u201d right\nafter A. was discharged from the hospital with an injury. After he called CPS, Hartley\nasked to interview Pimentel again using a digital recorder, and she agreed. Hartley\ntestified that Pimentel was very cooperative and answered all of his questions. He\nattempted to record the interview, but the first half of the interview was not recorded.\nThe part of the interview that was recorded was played for the jury. A CPS worker\narrived and took custody of A.\n In the recorded portion of the interview, Pimentel said she picked up A. because\nshe did not want him to fall and she used one arm. A. was not crying. Later, she said,\n\u201cwhen I was trying to feed him and stuff, and when I touched his arm or something, he\n\n 5.\n\fwas crying.\u201d She realized A. was hurt about five to 10 minutes after she picked him up.\nHer friend, Alicia, drove them to the hospital.3 Hartley asked what Pimentel told medical\nstaff. She responded, \u201cThat I left him with my friend \u2026 while I went \u2026 to do\nunemployment, to look for a house, and when I came back um, my friend told me that\numm his kids were playing with him, so um, he probably got a little bit hurt. Cuz he kept\ncrying when they touched his arm.\u201d Pimentel told Hartley she did go house hunting and\nto an appointment but she \u201clied about leaving him with a friend.\u201d Hartley asked why she\nlied, and Pimentel said, \u201cCuz I was afraid they were going to take my son.\u201d She said her\nfriends, \u201cLaesha, Freddie, and Aaron\u201d were at home while she was at the hospital.\nPimentel admitted she lied when she told Hartley that A. was with her mother. She stated\nthat she had a seven-year-old daughter who lived with her mother.\n The next day, July 10, 2012, Monica Goodell-Bonello, a social worker with the\nDepartment of Human Services (DHS), met with Pimentel at the DHS office. Pimentel\ntold Goodell-Bonello she had an appointment the previous day at 1:30 p.m. with HEAP\nfor assistance to pay her PG&E bills and then she went to look at a couple of apartments\nbecause she was planning to move. She left A. at home with her roommate, Laesha.\nPimentel said she returned home around 2:15 or 2:30 p.m. A. was on the couch and he\nstarted to cry and fuss, and she went to grab him. She only had one arm free, and she\npicked him up by one arm. Pimentel heard a pop, but A. did not cry and she thought he\nwas fine. She reported that Laesha was not present in the apartment at that time.\n Pimentel further told Goodell-Bonello she lied to medical staff that A. was injured\nat a neighbor\u2019s home because she was afraid CPS would take him away. Goodell-\n\n\n\n3 We have listened closely to the recording and read the transcript, both of which are part\nof the record on appeal. According to the transcript, Pimentel said \u201cAlicia\u201d gave her a ride to the\nhospital. We hear either \u201cAlicia\u201d or \u201cAneesha.\u201d It does not sound like Pimentel said \u201cLaesha,\u201d\nalthough we cannot rule out the possibility that she was referring to Laesha, whom she later\nidentified as her roommate.\n\n\n 6.\n\fBonello tried to contact Pimentel\u2019s purported roommate, Laesha, but Pimentel said she\ndid not know Laesha\u2019s last name or how to contact with her.\n Mitchell Adams, a Senior Deputy with the Kern County Sheriff\u2019s Office in the\nchild abuse segment of the Detective Division, was assigned to follow up on A.\u2019s case.\nOn July 11, 2012, Adams interviewed Pimentel. The interview was recorded, and the\nrecording was played for the jury. In the interview, Pimentel stated that A.\u2019s father was\n\u201cnot in the picture\u201d and that she did not know who he was. She told Adams her friend,\nLaesha, was staying at her home but she was \u201cjust staying for a few weeks.\u201d\n Pimentel said that on the day A. was injured, she had an appointment. When she\ngot home, she was trying to clean up and she had a lot of things in her arms. A. was on\nthe couch and she did not want him to fall over. She grabbed him with one arm to set\nhim in his crib. She heard something pop but he did not cry. A few minutes later,\nhowever, she noticed he was not lifting up his arm and, when she touched it, he would\ncry. So she took him to the hospital.\n Pimentel said her friend, who was a next door neighbor, drove them to the\nhospital. Adams asked for the neighbor\u2019s name, and Pimentel responded, \u201cThat\u2019s a lot of\ninformation.\u201d She said a lot of people \u201caround there\u201d do not like to give their names.\nThen she said it was her roommate, Laesha, who gave her a ride.\n Adams asked where Pimentel came up with the story that she left A. with a friend\nand kids may have injured him. She said she did not know and it \u201ccame in [her] head\nbecause [she] was afraid.\u201d Pimentel told Adams she already had a CPS report for her\nson. After they left the hospital, Pimentel gave A. to her friend because she was afraid he\nwould be taken away. The friend was Laesha. Pimentel admitted that she lied to the\ndeputies that she left A. with her mother and said, \u201cI kept making up a bigger story.\u201d\n Adams asked why she did not tell the deputies A. was with a friend. Pimentel\nresponded that there were \u201ca lot of things going through [her] head\u201d because she had\n\u201cbeen in the system.\u201d Pimentel demonstrated to Adams how she grabbed A. when he\n\n 7.\n\fwas on the couch. She \u201cfelt something\u201d and \u201cheard something pop\u201d and it \u201csounded like\na bone.\u201d She did not think she broke A.\u2019s arm, but she thought it popped out of place or\nwas dislocated. Adams observed, \u201cit takes quite a bit\u201d to break an arm. Pimentel said,\n\u201cIt\u2019s cuz\u2014when I pick him up he always moves. [\u00b6] \u2026 [\u00b6] So when he kicks his legs,\nhe moves a lot.\u201d Adams asked if she had been \u201cmaybe a little rough,\u201d and she agreed,\n\u201cprobably a little bit.\u201d She said she had picked him up like that in the past \u201c[a] lot\u201d but\nnothing had ever happened. She said that sometimes she may not notice \u201chow rough I\nam when I\u2019m cleaning.\u201d Pimentel told Adams that she gets frustrated because she is a\nsingle mother doing everything at once. Adams referred to prior CPS reports on\nPimentel, and she stated that she had anger and depression issues in the past.\n For his investigation, Adams spoke to CPS workers and Pimentel. He did not\ninterview any other witnesses, and he did not go to Pimentel\u2019s apartment complex to\nattempt to locate Laesha.\nDefense\n Pimentel testified on her own behalf. At the time of trial, she was 21 years old and\nA. was 18 months old. She and A. moved into their apartment in early 2012. At first,\njust the two of them lived in the apartment. Pimentel was disabled and was not\nemployed. Around April 2012, she took in roommates. They were Laesha Johnson,\nErnest Lery, Aaron Cresswood, and Johnson\u2019s four children. Johnson\u2019s children were all\nunder the age of ten. Johnson was in her late 20\u2019s, Lery was in his early 30\u2019s, and\nCresswood was 16 years old at the time. Lery and Cresswood were brothers.\n Pimentel met Lery the day she moved in because he was her neighbor in the\napartment complex. Lery was living with Johnson, her children, and Cresswood. Lery\nwas the father of two of Johnson\u2019s children. Lery and the others moved in with Pimentel\nbecause she \u201cstarted being in a relationship\u201d with Lery. She heard rumors about Lery\nbeing a pimp and she tried to end the relationship. At first, Lery was a \u201cfriend with\nbenefits,\u201d but then Pimentel ended up working for Lery as a prostitute. Johnson was also\n\n 8.\n\fa prostitute. When Pimentel would try to end her relationship with Lery, he would beat\nher.\n Pimentel moved out of the apartment a few days or a week after A. was taken\naway on July 9, 2012. When she left the apartment, she did not take anything\u2014no cell\nphone, clothes, or furniture.\n On July 9, 2012, Pimentel went to a management company to see if she were\nqualified to rent a house. She also went \u201cfor the PG&E\u201d at 1:00 p.m. She left A. at home\nbecause he had eczema and the sun irritated his skin. Before she left the apartment, A.\nwas not injured. She left him with Lery and the other children. Cresswood and his\nfriend, Freddie, were also in the apartment. Johnson drove Pimentel to her appointments.\nPimentel did not know how to drive.\n When Pimentel returned home, Lery was holding A. Johnson\u2019s children were also\nthere. Pimentel noticed that A. looked sad. Pimentel testified that she did not allow Lery\nto touch her son because she did not trust him. Johnson\u2019s daughter told Pimentel, \u201c\u2018my\ndaddy [Lery] hit your son.\u2019\u201d Pimentel asked Lery if he hit her son, and he did not\nrespond. Pimentel then took A. to the hospital.\n Pimentel testified that, when she spoke to Grant and Goodell-Bonello, she did not\ntell the truth because she was afraid of Lery. Lery would beat her \u201call the time.\u201d He had\nchoked her and she had become unconscious. Pimentel also lied to Hartley when she\nspoke with him at the hospital. She testified that she lied because she was afraid of what\nmight happen to her, A., and her family.\n When A. was discharged from the hospital, Johnson gave Pimentel and A. a ride\nhome. Johnson\u2019s children, along with Cresswood and Freddie, were at home, but Lery\nwas no longer at the apartment. Hartley knocked on Pimentel\u2019s door about 15 to\n20 minutes later. At that time, she was by herself in the apartment. She spoke with\nHartley at her doorway. Pimentel asked Harley to come inside because Lery\u2019s sister and\nLery\u2019s friends were nearby in the apartment complex. She told Hartley that A. was with\n\n 9.\n\fher mother, but this was not true. A. was with Cresswood\u2019s friend, but it was not\nFreddie. Pimentel did not recall the friend\u2019s name. Cresswood\u2019s friend and Johnson had\ntaken A. and Johnson\u2019s children in a Dodge Durango. Pimentel did not know where they\nwere going. Hartley told her to arrange to have her son returned, and Pimentel called\nLery and told him to bring A.\n After Pimentel and Hartley went in her apartment, Pimentel still did not tell\nHartley the truth. At trial, Pimentel explained that she could not speak the truth because\nthe door was open and Lery\u2019s sister \u201cwas right there.\u201d CPS workers arrived and took A.,\nand the deputies left. Shortly after that, Lery, Johnson, her children, and Cresswood\nreturned to the apartment. Pimentel started telling Lery she was angry, and he beat her.4\n The next day, Johnson drove Pimentel to her appointment with Goodell-Bonello.\nThe following day, Pimentel met with Adams. Pimentel did not tell the truth to Adams\nbecause she was afraid of Lery and because Johnson drove her to the appointment and sat\nnext to her in the lobby. Pimentel described to Adams a scenario in which she injured her\nson (by grabbing him from the couch) based on what Grant had told her about how A.\u2019s\nspiral fracture could have been caused by twisting. The scenario she described, however,\ndid not happen. Pimentel denied breaking A.\u2019s arm and denied ever picking him up in an\nawkward position.\n Pimentel testified that she told the truth about A. to her foster mother, Vienna\nFisher. This occurred about a week after A. was injured and after Pimentel left Lery.\nShe told Fisher she believed Lery could have hurt A. Pimentel talked to her therapist,\nAngela Hernandez, and another mental health case worker about her situation. In\nSeptember 2012, Pimentel told the truth about what happened to her attorney in the\njuvenile dependency case involving her son.\n\n\n4 In cross-examination, Pimentel explained that Lery beat her in the head, but not the face,\nand he did not leave bruises a person would see.\n\n\n 10.\n\f Pimentel was arrested for prostitution in September 2012. She was arrested in this\ncase in November 2012. She was not aware that there was a warrant for her arrest for\nchild abuse, and she had visited A. at the DHS the day before her arrest.\n Hernandez, a mental health therapist working for Kern County, had Pimentel as a\nclient until March 2012 and, at the time of trial, had known Pimentel for six years.\nHernandez testified that she talked to Pimentel at the end of October 2012 (when\nPimentel was no longer her client). Pimentel told her a man who was living with her\n\u201cwas making her a prostitute.\u201d Pimentel also said A. had broken his arm, and she told\nHernandez how she believed his arm was broken. Pimentel said she left A. at home with\nthe man who was living with her and, when she returned, A. was crying and something\nwas wrong with him. Pimentel took A. to the hospital.\n Fisher testified that she had known Pimentel for six or seven years and that\nPimentel was her foster daughter. About a week after A.\u2019s injury, Pimentel told Fisher\nthat she did not hurt A. She said her boyfriend had done it. Pimentel was crying and\nupset.\nVerdict and Sentence\n The jury found Pimentel guilty of child abuse. It could not reach a decision on the\nallegation of personal infliction of great bodily injury, and the trial court declared a\nmistrial as to the enhancement. On July 2, 2013, Pimentel filed a motion to reduce the\nchild abuse conviction to a misdemeanor pursuant to section 17, subdivision (b).\n On July 8, 2013, the trial court denied Pimentel\u2019s motion to reduce the conviction\nto a misdemeanor. The court placed Pimentel on probation for a period of four years and\nordered her to serve one year in the custody of the Kern County Sheriff.\n Pimentel filed a notice of appeal on July 22, 2013.\n\n\n\n\n 11.\n\f DISCUSSION\nI. Ineffective assistance of counsel\n As we have mentioned, the trial court granted Pimentel\u2019s motion in limine, ruling\n\u201cevidence of prior bad acts committed by [Pimentel] against her children\u201d was not\nadmissible. On appeal, Pimentel contends her attorney provided ineffective assistance of\ncounsel by failing to ensure that discussion of a prior CPS report was excised from a tape\nplayed for the jury. We disagree.\n A. Background\n On May 31, 2013, the parties discussed the audiotapes and transcripts of\nPimentel\u2019s interviews with Hartley and Adams. The prosecutor raised the issue of\nredacting the interviews. She stated: \u201c[T]here are a couple of transcripts in this case. I\nhad some concerns, based on the Court\u2019s in limines, about mention of her first child in\nthe first interview. She mentions the child a lot in her second interview, which I think\nwe\u2019re going to need to talk about.\u201d\n Pimentel\u2019s attorney responded that he was not concerned about Pimentel\u2019s\nstatement to Hartley that she had an older daughter who lived with her mother. He\nexplained that he did not think it was prejudicial.\n As to the Adams interview, the prosecutor noted, \u201cthere is mention of that first\nchild and the fact that she was taken away, I think several times throughout that\ninterview, and that may be something that we need to [\u00b6] \u2026 [\u00b6] [e]xcise that out.\u201d She\nsuggested Pimentel\u2019s attorney talk to her about \u201cthe areas he\u2019s got a problem with.\u201d\n There is no further discussion on the record between the parties about redacting or\nexcising the interview, but the recording and transcript evidently were edited for content.\nBefore the jury heard the interview, the court stated: \u201cIt\u2019s going to be obvious \u2026\nlistening \u2026 to this, that this tape has been edited.\u2026 [\u00b6] The law states you\u2019re not to hear\ncertain testimony that\u2019s deemed irrelevant by me, so I\u2019ve had that taken out.\u201d\n\n\n\n 12.\n\f During the interview, Pimentel said she told medical personnel she had left A. at a\nfriend\u2019s house because she was afraid. The jury heard the following:\n\n \u201cAdams: Where did you come up with that story?\n\n \u201c[Pimentel]: I don\u2019t know. It just came to my head because I was\n afraid.\n\n \u201cAdams: I mean that just popped in your head? What were you\n afraid of?\n\n \u201c[Pimentel]: Cuz, um, I already had a CPS report for my son. It\n was just the fact that uh, they always bring a lot of things and every time \u2026\n there\u2019s a CPS report, they always bring out the negative parts.\n\n \u201cAdams: Well, sure, sure they do.\n\n \u201c[Pimentel]: So that\u2019s, uh, that[\u2019s] why \u2026 [I] was scared that they\n bring out negative parts and no one sees the new stuff that I\u2019ve been\n doing.\u201d (Italics added.)\n In his closing statement, Pimentel\u2019s attorney referred to her experience with CPS.\nHe argued to the jury:\n\n \u201cIf she had inflicted that injury on [A.], why would she immediately\n take him to the hospital? Wouldn\u2019t she be expected to try and conceal it by\n keeping [A.] and seeing if it was just a bruise or if it was just a sprain?\n Wouldn\u2019t she just keep him in the house and hope it\u2019s going to get better\n and not have to report it to anyone?\n\n \u201cShe knows if she goes into the hospital, they\u2019re likely to call the\n cops. You heard testimony she\u2019s dealt with CPS before. She\u2019s been\n through the system. If she broke [A.]\u2019s arm, why would she rush him to the\n hospital right away \u2026 where it\u2019s going to be discovered right away her\n son\u2019s arm is broken?\n\n \u201cThe reason she took him into the hospital is because she cared for\n her son.\u201d\n\n\n\n\n 13.\n\f B. Analysis\n \u201cEstablishing a claim of ineffective assistance of counsel requires the defendant to\ndemonstrate (1) counsel\u2019s performance was deficient in that it fell below an objective\nstandard of reasonableness under prevailing professional norms, and (2) counsel\u2019s\ndeficient representation prejudiced the defendant .\u2026\u201d (People v. Dennis (1998) 17\nCal.4th 468, 540.)\n \u201cOur review is deferential; we make every effort to avoid the distorting effects of\nhindsight and to evaluate counsel\u2019s conduct from counsel\u2019s perspective at the time.\n[Citation.] A court must indulge a strong presumption that counsel\u2019s acts were within the\nwide range of reasonable professional assistance. [Citation.]\u201d (People v. Dennis, supra,\n17 Cal.4th at p. 541.) \u201cIn general, reviewing courts defer to trial counsel\u2019s tactical\ndecisions in assessing a claim of ineffective assistance, and the burden rests on the\ndefendant to show that counsel\u2019s conduct falls outside the wide range of competent\nrepresentation. [Citations.] In order to prevail on such a claim on direct appeal, the\nrecord must affirmatively disclose the lack of a rational tactical purpose for the\nchallenged act or omission. [Citations.]\u201d (People v. Ray (1996) 13 Cal.4th 313, 349.)\n \u201cWhen a defendant makes an ineffectiveness claim on appeal, the appellate court\nmust look to see if the record contains any explanation for the challenged aspects of\nrepresentation. If the record sheds no light on why counsel acted or failed to act in the\nmanner challenged, \u2018unless counsel was asked for an explanation and failed to provide\none, or unless there simply could be no satisfactory explanation\u2019 [citation], the case is\naffirmed [citation]. In such cases, the ineffective-assistance claim is more appropriately\nmade in a petition for habeas corpus. [Citations.]\u201d (People v. Babbitt (1988) 45 Cal.3d\n660, 707.)\n Pimentel argues that evidence of her previous dealing with CPS was irrelevant and\ninflammatory. She asserts defense counsel clearly viewed the evidence as extremely\ndamaging, as he filed a motion in limine to exclude the evidence. She claims, \u201cThere\n\n 14.\n\fwas no conceivable reason for defense counsel to allow the evidence to come in after he\nhad litigated and won a motion to keep it out. Counsel\u2019s failure to follow through on this\nimportant ruling was inexcusable, and deprived [Pimentel] of her right to effective\nassistance of counsel.\u201d\n As a preliminary matter, we question the premise of Pimentel\u2019s argument that her\nstatements about a CPS report were covered by her motion in limine. She asked for the\ncourt to exclude any evidence of \u201cprior bad acts committed by [her] against her children.\u201d\nReference to prior contact with CPS regarding A., without more, was not evidence of\nprior bad acts committed by Pimentel against A.\n In any event, we cannot say that Pimentel\u2019s attorney\u2019s conduct fell outside the\nwide range of competent representation. The attorney\u2019s rational tactical purpose in\nallowing reference to Pimentel\u2019s prior contact with CPS is demonstrated by the argument\nhe made to the jury. He argued that if Pimentel had personally inflicted injury on A., she\nwould not have taken him to the hospital because she would have known CPS would be\ninvolved.\n Pimentel\u2019s attorney was faced with a client who offered three different stories\nabout how her son was injured and who admittedly allowed her violent pimp to live with\nher and A. Attempting to present Pimentel in the best possible light given the\ncircumstances, Pimentel\u2019s attorney decided to use her CPS history to bolster his argument\nthat simply taking A. to the hospital was evidence that Pimentel had not injured him.\nEven if the jury believed Pimentel\u2019s trial testimony, she likely would be perceived as a\nflawed parent. Her attorney reasonably could have determined that the risk of prejudice\nfrom the reference to a prior CPS report was outweighed by its relevance to show that, in\nspite of her problems, Pimentel was a caring parent who would not hurt her child and\nwould take him to the hospital if he were injured. Given the indisputable evidence that\nPimentel lied at least twice about what happened to A., her attorney also may have\nthought evidence of her prior experience with CPS could help explain why she lied to\n\n 15.\n\fmedical personnel and law enforcement initially. Since we can imagine a rational tactical\npurpose for her attorney\u2019s conduct, Pimentel\u2019s claim of ineffective assistance of counsel\nfails.\nII. Motion to reduce conviction to a misdemeanor\n Pimentel contends the trial court abused its discretion in denying her motion to\nreduce the conviction to a misdemeanor. We are not convinced.\n A. Background\n On July 2, 2013, Pimentel filed a motion to reduce her conviction to a\nmisdemeanor pursuant to section 17, subdivision (b). She argued the facts and\ncircumstances of the case weighed strongly in favor of her request because she was only\n20 years old at the time of the offense, she had little or no prior criminal history, and \u201c[a]t\nworst, it appears that this crime was the result of a young mother who did not have the\nproper life skills to deal with being a single mother and who ended up harming her son by\naccident or through carelessness.\u201d She also briefly recounted her personal history of\nsexual abuse as a child, rejection by her parents, pregnancy at around 13 years old, and\nplacement in foster care, and argued these circumstances militated in favor of lenience.\n The trial court denied the motion. The court stated that it gave \u201cserious\nconsideration on what to do here.\u201d It considered \u201cCalifornia Rules of Court,\nRule [4.410], in addition to similar sentencing guidelines, the nature and circumstances of\nthe offense here, [Pimentel\u2019s] appreciation of [and] attitude toward the offense, her\ntrait[s] and character as evidence by her behavior and demeanor at trial.\u201d\n The court explained:\n\n \u201cThere\u2019s no way I can send her to prison, in my mind, for what\n happened here. In my opinion, what happened here is we had a young,\n frustrated mother who picked her baby up wrong and broke the baby\u2019s arm.\n The problem \u2026 here is that she repeatedly lied about it to law enforcement\n and medical personnel before she finally came clean.\n\n\n\n\n 16.\n\f \u201cAnd I read the probation officer\u2019s report. They interviewed her\n about it, and she continues to deny committing the crime. She said, \u2018I\n didn\u2019t hurt my son. I\u2019m doing someone else\u2019s crime. I\u2019m guilty of neglect\n but not what they\u2019re charging me.\u2019 So in light of the Alvarez[5] case, it\n states whether or not the defendant\u2019s appreciation of [and] attitude toward\n the offense, I don\u2019t see it.\n\n \u201cI certainly wish she had taken a different tack here, admitted her\n offense and was ready to move on but she\u2019s not. So, again, under\n California Rule[s] of Court[, rule 4.410 and] the Alvarez case, it\u2019s not a\n prison case but I\u2019m not prepared to reduce it to a misdemeanor.\n\n \u201cI don\u2019t think she falls in that particular category but it\u2019s close for a\n young mother picking her \u2026 child up incorrectly and breaking the arm.\n The way \u2026 the testimony was of how she picked the baby up, twisting the\n baby and causing the spiral fracture to the arm. I\u2019ll deny the motion.\u201d\n (Italics added, underscoring omitted.)\n B. Analysis\n Pimentel was convicted of violation of section 273a, subdivision (a). This offense\nis punishable by imprisonment in county jail not exceeding one year, or in state prison for\ntwo, four, or six years, making the offense a \u201cwobbler.\u201d6 (\u00a7 273a, subd. (a).)\n Under section 17, subdivision (b), a trial court has discretion to reduce a wobbler\nto a misdemeanor. (See Park, supra, 56 Cal.4th at p. 790.) We review a trial court\u2019s\nsentencing decision under section 17 for abuse of discretion. (Alvarez, supra, 14 Cal.4th\nat p. 977.) Although a trial court is granted \u201cbroad authority\u201d by section 17,\nsubdivision (b), a sentencing decision under the statute must be based on \u201cindividualized\nconsideration of the offense, the offender, and the public interest.\u201d (Alvarez, supra, at\n\n\n5 People v. Superior Court (Alvarez) (1997) 14 Cal.4th 968, 977 (Alvarez).\n6 \u201cThe Legislature has classified most crimes as either a felony or a misdemeanor, by\nexplicitly labeling the crime as such, or by the punishment prescribed.\u2026 There is, however, a\nspecial class of crimes involving conduct that varies widely in its level of seriousness. Such\ncrimes, commonly referred to as \u2018wobbler[s]\u2019 [citation], are chargeable or, in the discretion of\nthe court, punishable as either a felony or a misdemeanor; that is, they are punishable either by a\nterm in state prison or by imprisonment in county jail and/or by a fine. [Citations.]\u201d (People v.\nPark (2013) 56 Cal.4th 782, 789 (Park).)\n\n\n 17.\n\fp. 978.) Relevant considerations include \u201c\u2018the nature and circumstances of the offense,\nthe defendant\u2019s appreciation of and attitude toward the offense, or his traits of character\nas evidenced by his behavior and demeanor at the trial\u2019\u201d and, when appropriate, \u201cthe\ngeneral objectives of sentencing such as those set forth in California Rules of Court,\nrule [4.410].\u201d (Alvarez, supra, at p. 978.)\n We discern no abuse of discretion in this case. The trial court stated the\nappropriate considerations for deciding a motion under section 17, subdivision (b), and\nproperly based its decision on Pimentel\u2019s appreciation of and attitude toward the offense.\nAfter hearing all the testimony at trial and reviewing the probation officer\u2019s report, the\ncourt determined Pimentel personally injured A. by picking him up \u201cwrong,\u201d lied to\nmedical personnel and law enforcement about what happened, and continues to deny that\nshe committed the crime. Under the circumstances, the court decided Pimentel\u2019s\n\u201cappreciation of an[d] attitude toward the offense\u201d (or rather her failure to appreciate and\nacknowledge her offense) did not warrant a reduction of her conviction to a\nmisdemeanor.\n Pimentel argues that because the evidence of guilt was not overwhelming, the trial\ncourt should not have relied on her continued denial of guilt in deciding the motion. She\ncites People v. Key (1984) 153 Cal.App.3d 888, but the case is inapposite. In Key, the\nCourt of Appeal held that lack of remorse was not a valid reason to aggravate a sentence\nin a case where the defendant denied committing the crimes and the evidence was not\noverwhelming. (Id. at pp. 900\u2013901; see Cal. Rules of Court, rule 4.421 [identifying\ncircumstances in aggravation without mention of the defendant\u2019s lack of remorse or\ndenial of guilt].) The Court of Appeal, however, did not have occasion to consider\nwhether a defendant\u2019s lies7 and denial of guilt may be considered by a trial court deciding\na request to reduce a conviction to a misdemeanor.\n\n7 On appeal, Pimentel does not dispute that she lied to medical personnel and law\nenforcement about what happened to A.\n\n\n 18.\n\f Pimentel offers no other legal authority for her position. Without such authority,\nwe decline to hold that the trial court abused its discretion when it denied her request to\nreduce her conviction to a misdemeanor by relying on the facts (1) Pimentel lied to\nmedical personnel and law enforcement the day A. was injured and (2) she continues to\ndeny she personally harmed her son. These facts are related to Pimentel\u2019s appreciation of\nand attitude toward the offense and are appropriate individualized considerations on\nwhich to base a decision under section 17, subdivision (b). (See Alvarez, supra, 14\nCal.4th at p. 978.)\nIII. Probation condition\n At the sentencing hearing, the trial court granted probation with terms and\nconditions including the following: \u201cThat she permit her person, residence, motor\nvehicle, and/or possessions to be inspected or searched for narcotics or dangerous drugs\nby a probation officer or any law enforcement officer at anytime [sic] during her\nprobationary term and without prior notice of intent to inspect or search, with or without\na search warrant, warrant of arrest or reasonable cause.\u201d Pimentel did not raise an\nobjection to this or any of the probation conditions at the hearing.\n Now, Pimentel contends the search condition is unreasonable and violates her\nfederal constitutional rights. We reject this contention because Pimentel forfeited the\nissue and the contention fails on the merits.\n Pimentel claims, \u201cAlthough search conditions are frequently imposed in cases\ninvolving narcotics or weapons, it makes no sense to impose a search condition in a case\nlike this one, in which [Pimentel]\u2014who had no criminal record\u2014picked up her child the\nwrong way off a couch.\u201d This is an argument that the search condition was unreasonable\nbecause it was not related to the crime of which Pimentel was convicted. In People v.\nWelch (1993) 5 Cal.4th 228 (Welch), however, our Supreme Court held that failure to\nraise a timely claim that a probation condition is unrelated to the underlying offense or\n\n\n\n 19.\n\ffuture criminality results in forfeiture of the claim on appeal. (Id. at pp. 230, 233\u2013237.)\nPimentel has forfeited the issue by failing to raise it with the trial court.\n Even if we were to consider her claim, it is without merit. Pimentel correctly\nasserts that a probation condition that requires or forbids conduct which is not itself\ncriminal is valid only if the conduct is reasonably related to the crime of which the\ndefendant was convicted or to future criminality. (See Welch, supra, 5 Cal.4th at\npp. 233\u2013234.) But she does not identify any probation condition that regulates\nnoncriminal conduct. Her probation terms and conditions do not, for example, require\nthat she avoid alcohol. (Cf. People v. Kiddoo (1990) 225 Cal.App.3d 922, 927\u2013928\n[where alcohol was not related to crime, probation condition that the defendant not\npossess or consume alcoholic beverages was invalid], disapproved on other grounds in\nWelch, supra, at p. 237.)\n Here, there is evidence that Pimentel has a history of illegal drug use, which\naffected her child. Of most significance, she admitted to a social worker in April 2012\nthat she accidentally ate a marijuana-laced brownie prior to breastfeeding A.8\n Further, if a probation condition serves the statutory purpose of \u201creformation and\nrehabilitation of the probationer\u201d (\u00a7 1203.1, subd. (j)), such a condition is reasonably\nrelated to future criminality and is valid, even if it is not related to the underlying crime.\n(People v. Moret (2009) 180 Cal.App.4th 839, 851; People v. Balestra (1999) 76\nCal.App.4th 57, 65.) In this case, the search condition is related to Pimentel\u2019s\ndocumented drug use and is therefore valid because it serves to reform and rehabilitate\nher. For all of the foregoing reasons, Pimentel\u2019s challenge to the search condition fails.\n\n\n\n\n8 Pimentel described additional recent drug use at trial. She testified that Lery would drug\nher when she did not want to work as a prostitute and that she \u201csmoked a little weed to put\n[herself to] sleep\u201d after A. was taken away on July 9, 2012. Pimentel told a probation officer\n\u201cshe had a prior history with marijuana abuse but would not elaborate.\u201d\n\n\n 20.\n\f DISPOSITION\n The judgment is affirmed.\n\n\n ___________________________\n KANE, J.\n\nWE CONCUR:\n\n\n___________________________\n HILL, P.J.\n\n\n___________________________\n GOMES, J.\n\n\n\n\n 21.\n\f"} -{"text": "\n\n\n\n\n\n\n\nCOURT OF APPEALS\n\n\n\n\n\n\n\n\nCOURT\nOF APPEALS\nEIGHTH\nDISTRICT OF TEXAS\nEL\nPASO, TEXAS\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 )\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 )\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 )\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 )\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\nNo.\u00a0 08-03-00449-CV\nIN RE:\u00a0 FRANCISCO LIMON, ROSENDA\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 )\nLIMON, PEDRO TORRES, and\nSIERRA\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 )\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0 AN ORIGINAL\nWELDING SUPPLY, INC. d/b/a\nAIRMIX\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 )\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 )\u00a0\u00a0\u00a0\u00a0 PROCEEDING IN MANDAMUS\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 )\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 )\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 )\n\u00a0\nOPINION\u00a0 ON\u00a0\nPETITION\u00a0 FOR\u00a0 WRIT\u00a0\nOF\u00a0 MANDAMUS\n\u00a0\nThis is an\noriginal proceeding in mandamus.\u00a0\nFrancisco Limon, Rosenda Limon, Pedro Torres, and Sierra Welding Supply,\nInc. d/b/a Airmix, Relators, seek a writ of mandamus requiring the Honorable\nJavier Alvarez, Judge, County Court at Law No. Three of El Paso County, Texas,\nto vacate or rescind his order dated March 11, 2003, which found that certain\ndocuments were privileged but fell within the crime-fraud exception.\u00a0 Relators also ask that the trial court be directed\nto grant their motion to seal the documents and prohibit their use by the Real\nParty in Interest, to disqualify counsel, and dismiss the underlying\naction.\u00a0 For the reasons stated below, we\ndeny relief.\nSTANDARD OF REVIEW\n\n\n\n\nMandamus will lie\nonly to correct a clear abuse of discretion.\u00a0\nWalker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992)(orig.\nproceeding).\u00a0 Moreover, there must be no\nother adequate remedy at law.\u00a0 Walker,\n827 S.W.2d at 840.\nClear\nabuse of discretion\nAn appellate court\nrarely interferes with a trial court=s\nexercise of discretion.\u00a0 A clear abuse of\ndiscretion warranting correction by mandamus occurs when a court issues a\ndecision which is without basis or guiding principles of law.\u00a0 See Johnson v. Fourth Court of Appeals,\n700 S.W.2d 916, 917 (Tex. 1985)(orig. proceeding).\u00a0 With respect to resolution of factual issues\nor matters committed to the trial court=s\ndiscretion, the reviewing court may not substitute its judgment for that of the\ntrial court.\u00a0 Walker, 827 S.W.2d\nat 839-40.\u00a0 The relator must therefore\nestablish that the trial court could reasonably have reached only one decision.\u00a0 Id. at 840.\u00a0 Even if the reviewing court would have\ndecided the issue differently, it cannot disturb the trial court=s decision unless it is shown to be\narbitrary and unreasonable.\u00a0 Id.\u00a0 With respect to a trial court=s determination of the legal principles\ncontrolling its ruling, the standard is much less deferential.\u00a0 A trial court has no Adiscretion@ in determining what the law is or\napplying the law to the facts.\u00a0 Thus, a\nclear failure by the trial court to analyze or apply the law correctly will\nconstitute an abuse of discretion, and may result in appellate reversal by\nextraordinary writ.\u00a0 Walker, 827\nS.W.2d at 840.\nNo\nadequate remedy by appeal\n\n\n\n\nAn appellate court\nwill deny mandamus relief if another remedy, usually appeal, is available and\nadequate.\u00a0 Street v. Second Court of\nAppeals, 715 S.W.2d 638, 639-40 (Tex. 1986) (orig. proceeding).\u00a0 Mandamus will not issue where there is Aa clear and adequate remedy at law,\nsuch as a normal appeal.@\u00a0 Walker, 827 S.W.2d at 840, quoting\nState v. Walker, 679 S.W.2d 484, 485 (Tex. 1984).\u00a0 Mandamus is intended to be an extraordinary\nremedy, available only in limited circumstances.\u00a0 The writ will issue Aonly\nin situations involving manifest and urgent necessity and not for grievances\nthat may be addressed by other remedies.@\u00a0 Holloway v. Fifth Court of Appeals,\n767 S.W.2d 680, 684 (Tex. 1989), quoting James Sales, Original Jurisdiction of the Supreme Court and\nthe Courts of Civil Appeals of Texas, in Appellate Procedure in Texas,\nSec. 1.4(1)(b) at 47 (2d Ed. 1979).\nAPPLICATION OF THE LAW TO THE FACTS BEFORE THE\nCOURT\nRelators have\nfailed to establish that Respondent clearly abused his discretion by entering\nthe March 11, 2003 order.\u00a0 Accordingly,\nwe deny the relief requested in the petition for mandamus.\nIt is further\nordered that the sealed original exhibits which were transmitted to this Court\npursuant to an order of the trial court for our review in connection with the\nmandamus petition shall be returned to the official court reporter of the\nCounty Court at Law No. 3.\n\u00a0\n\u00a0\n\u00a0\nDecember 4, 2003\nDAVID WELLINGTON CHEW, Justice\n\u00a0\nBefore Panel No. 2\nBarajas, C.J., McClure, and Chew, JJ.\n\n"} -{"text": "\n85 So.3d 913 (2012)\nMichael Anthony FOUNTAIN, Appellant\nv.\nSTATE of Mississippi, Appellee.\nNo. 2010-KA-01038-COA.\nCourt of Appeals of Mississippi.\nApril 10, 2012.\n*915 Clare Sekul Hornsby, Calvin D. Taylor, Steven Benjamin Dick, attorneys for appellant.\nOffice of the Attorney General by Lisa Lynn Blount, attorney for appellee.\nBefore IRVING, P.J., ISHEE and RUSSELL, JJ.\nISHEE, J., for the Court:\n\u00b6 1. Michael Fountain was convicted in the Jackson County Circuit Court of four counts of sexual battery; sentenced to thirty years for each count with the sentences to run concurrently with one another, all in the custody of the Mississippi Department of Corrections (MDOC) without eligibility for parole or probation; and fined $10,000 for each count. Fountain appeals his conviction arguing: (1) the trial court abused its discretion by allowing K.U.'s[1] testimony under the exceptions in Mississippi Rule of Evidence 404(b); (2) the trial court abused its discretion by excluding evidence of M.G.'s false allegation against her step-brother, Chad Gollott; (3) there was plain error in two of the jury instructions given by the trial court; and (4) the verdict is contrary to the overwhelming weight of the evidence and is not supported by sufficient evidence. Finding no reversible error, we affirm.\n\n\n*916 FACTS AND PROCEDURAL HISTORY\n\u00b6 2. In 2006, M.G. lived with her father, Danny Gollott, her father's then-girlfriend, Michelle Surian[2], and her half-brother, Destin Gollott. M.G. knew Fountain because he was her cousin. He also worked with M.G.'s grandmother at a family business, and Fountain's mother, Iris, lived next to M.G.'s grandmother. Fountain bought M.G. presents, including a cell phone and an Ipod; he also occasionally gave her money. M.G. began to spend time with Fountain at his house, at the warehouse where he worked, and at Iris's house. M.G. stated that when she first began spending time with Fountain, she and Fountain ate pizza and watched television at Fountain's house.\n\u00b6 3. M.G. testified that Fountain began sexually abusing her after she confided in him that her half-brother, Destin, had sexually assaulted her. M.G. was nine years old at the time. The sexual abuse by Fountain occurred at Fountain's house, his office at the warehouse, and at Iris's house. According to M.G., it was during the initial stages of abuse that Fountain told her about his sexual relations with his step-daughter, K.U. He also showed M.G. sexually explicit videos of K.U. in addition to various other nude photographs. M.G. testified that Fountain had sexual intercourse with her, that he had placed his mouth on her vagina, and that he had inserted his penis into her mouth. She also testified to the use of vibrators during the sexual abuse and to his use of condoms.\n\u00b6 4. In early 2008, M.G. told Surian, her father's then-girlfriend, that Destin had sexually assaulted her. Surian then took M.G. to the emergency room. After the emergency-room visit, M.G. revealed to Surian that Fountain had been sexually assaulting her. M.G. was then removed from her home by the Department of Human Services (DHS).\n\u00b6 5. In April 2008, a Jackson County grand jury indicted Fountain on four counts of sexual battery occurring from January 1, 2006, through January 18, 2008. Prior to trial, both the State and Fountain filed motions in limine. The State sought to exclude evidence of M.G.'s past allegations of sexual abuse by persons other than Fountain. The trial court excluded the evidence based on Fountain's failure to comply with the notice requirements in Mississippi Rule of Evidence 412(c). In his motion in limine, Fountain sought to exclude evidence of prior acts of a sexual nature with his step-daughter, K.U. The trial court denied Fountain's motion and permitted the evidence under Mississippi Rule of Evidence 404(b). A jury trial then began on May 25, 2010.\n\u00b6 6. The jury heard the testimony of Terry Hines, an investigator with the Ocean Springs Police Department. He testified regarding the search of Fountain's residence. During the execution of the search warrant, police officers found vibrators and nude photos in a dresser where M.G. described they would be located. The officers also found condoms in Fountain's bathroom and night stand. Although no videos of K.U. were found, the closet shelf on which M.G. said they would be located appeared to have had items recently removed. Investigator Hines also described Fountain's nipple piercing, which M.G. had disclosed during her testimony.\n\u00b6 7. The jury also heard the testimony of two nurses, Melanie Gaston and Edwina Roland, who had examined M.G. on separaterate. *917 occasions. Gaston, a nurse practitioner at Biloxi Regional Medical Center, examined M.G. on January 18, 2008. M.G. arrived at the hospital complaining of a headache, gastric burning, and leg pain. Gaston then performed a visual gynecological exam of M.G. based on her complaints of gastric burning. Gaston noted M.G.'s hymen was not intact, but there was no swelling, nor any bruising, tears, abscesses, or blisters. However, according to Gaston, this was not unusual \"because the last [instance of sexual abuse] was two weeks [prior to the exam] or greater.\" Gaston was referring to the alleged abuse by Destin. Because of this testimony, the trial court allowed testimony about M.G.'s accusations against Destin.\n\u00b6 8. Roland, a registered nurse at Keesler Medical Center, examined M.G. on January 28, 2008, per the request of DHS. Roland also found no evidence of trauma. However, M.G. did reveal to Roland that she was assaulted by Fountain and Destin. M.G. also told Roland that Fountain videotaped her using a vibrator on several occasions.\n\u00b6 9. K.U. also testified during the trial. She testified that she began to live with Fountain after he and her mother had divorced. According to K.U., Fountain began sexually abusing her when she was in the fifth grade. She testified the inappropriate behavior began as playing, which led to touching and feeling, and eventually progressed to sex. In addition, K.U. testified she would occasionally see Fountain watching pornography and masturbating in the living room. When she walked in the living room on those occasions, Fountain did not stop what he was doing. She further acknowledged the abuse continued until she was in her twenties.\n\u00b6 10. Fountain took the stand in his own defense. He denied M.G.'s allegation and also denied any sexual abuse of K.U. He said a sexual relationship with K.U. began after she had graduated high school. Fountain admitted he was alone with M.G. on several occasions, bought her some gifts, and gave her money. He further testified that M.G. knew where the vibrators and nude photographs were located in his house because she liked to look in drawers. Fountain did not remember M.G. telling him about the alleged sexual assault by Destin, and he claimed that M.G. fabricated stories.\n\u00b6 11. The jury convicted Fountain of four counts of sexual battery. He was sentenced to thirty years for each count with the sentences to run concurrently with one another, all in the custody of the MDOC without eligibility for parole or probation. In addition, he was ordered to pay fines in the amount of $10,000 for each count. Fountain now appeals.\n\nDISCUSSION\n\u00b6 12. On appeal, Fountain argues: (1) the trial court abused its discretion by allowing K.U.'s testimony under the exceptions in Mississippi Rule of Evidence 404(b); (2) the trial court abused its discretion by excluding evidence of M.G.'s false allegation against her step-brother, Chad; (3) there is plain error in two of the jury instructions given by the trial court; and (4) the verdict is contrary to the overwhelming weight of the evidence and is not supported by sufficient evidence.\n\nI. Admission of Prior Alleged Acts of Misconduct\n\u00b6 13. \"A trial judge enjoys a great deal of discretion as to the relevancy and admissibility of evidence. Unless the judge abuses this discretion so as to be prejudicial to the accused, the [appellate court] will not reverse this ruling.\" Gore v. State, 37 So.3d 1178, 1183 (\u00b6 13) (Miss. *918 2010) (quoting Price v. State, 898 So.2d 641, 653 (\u00b6 29) (Miss.2005)).\n\u00b6 14. Fountain asserts the trial court abused its discretion by admitting the testimony of K.U. in which she spoke about Fountain's prior sexual abuse. He makes the following arguments regarding the introduction of this evidence: (1) the Mississippi Supreme Court's holding in Derouen v. State, 994 So.2d 748 (Miss.2008), does not render this type of evidence per se admissible; (2) the prejudicial effect of the testimony greatly outweighs any probative value; (3) the limiting jury instruction did not eliminate the prejudice inherent in the testimony; (4) the allegations were too remote in time and dissimilar in detail to be relevant to the current charge; and (5) the testimony violated his right to a fair trial.\n\u00b6 15. Prior to trial, Fountain filed a motion in limine seeking to prohibit the State from introducing evidence of his prior sexual acts with K.U. In K.U.'s testimony, she alleged Fountain began to sexually abuse her when she was in the fifth grade, and the sexual acts continued until adulthood, at which point the relationship became consensual. The State sought to introduce the evidence under the standard announced in Derouen. Fountain claimed M.G.'s accusations have no connection to K.U.'s testimony, and K.U.'s testimony would only serve to show he acted in conformity with his prior acts. He further argued the probative value of the testimony is substantially outweighed by the danger of unfair prejudice. The trial court denied Fountain's motion in limine. The trial court found K.U.'s testimony was relevant to the current case and its probative value was not substantially outweighed by the danger of unfair prejudice.\n\nA.\u00a0Derouen\u00a0Standard\n\u00b6 16. In Derouen, the Mississippi Supreme Court held that evidence of a sexual offense other than the one charged, involving a victim other than the victim of the charged offense, \"if properly admitted under Rule 404(b), filtered through Rule 403, and accompanied by an appropriately-drafted limiting or cautionary instruction to the jury, should not be considered per se error.\" Derouen, 994 So.2d at 756 (\u00b6 20). Derouen overruled the holding in Mitchell v. State, 539 So.2d 1366 (Miss. 1989), later reaffirmed in Lambert v. State, 724 So.2d 392 (Miss.1998), which had found the admission of this type of evidence was per se reversible error. Derouen, 994 So.2d at 754 (\u00b6 17) (citing Lambert, 724 So.2d at 394 (\u00b6 7)). In overruling those cases, the supreme court stated: \"[W]e find that our holding in Mitchell, reaffirmed in Lambert, does irreversible harm to the most innocent and defenseless in society\u0097our young children.\" Id. at 755-56 (\u00b6 18). The supreme court further acknowledged the standard established in those cases had \"eliminat[ed] the balancing test required under Rule 403 ... [which] is totally contrary to our rules of evidence and well-established case law.\" Id. at 756 (\u00b6 18) (citations omitted).\n\u00b6 17. Fountain argues that although the holding in Derouen removed the per-se-inadmissibility standard regarding evidence of a separate sexual offense involving a different victim, Derouen does not render that type of evidence per se admissible. We agree with Fountain that it is clear Derouen did not make this type of evidence per se admissible. The Derouen standard states the evidence is only admissible \"if properly admitted under Rule 404(b), filtered through Rule 403, and accompanied by an appropriately-drafted limiting or cautionary instruction to the jury.\" Id. at (\u00b6 20). In the instant case, the trial court followed the standard announced *919 in Derouen and properly admitted the evidence.\n\u00b6 18. The evidence was properly admitted under Rule 404(b). Rule 404(b) states:\nEvidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.\nIn deciding to admit K.U.'s testimony, the trial judge stated:\nThe nature of the sex abuse, sexual activity testified to by [K.U.] is similar in nature as to the use of pornography or the existence of pornography, and [Fountain's] interest in pornography, [and it is] consistent [with] the use of condoms in statements by the victim. I believe it's relevant to the issues of the licentious nature of [Fountain] in the charges lodged here. I think it would be relevant to [the] opportunity of [Fountain] to engage in such conduct. It would be corroborative of the statements and some of the testimony of the victim here, as I've been informed of.\nUnder Rule 404(b), K.U.'s testimony could not be presented to show \"conformity therewith.\" However, the testimony could be used to show \"proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.\" M.R.E. 404(b). There are several similarities between the two allegations of abuse: both victims were the same age when the abuse took place; Fountain gave both of the victims gifts and money; and several of the sexual acts were the same. The abuse of M.G. also began around the same time K.U. left for college. Furthermore, Fountain used his abuse of K.U. to groom M.G. as part of his general preparation or plan. As the trial judge noted, the licentious nature of the allegations show a motive to engage in the type of activity alleged. Thus, this evidence is permitted under Rule 404(b).\n\u00b6 19. Derouen also requires that the trial court perform a Rule 403 balancing test before admitting the evidence. Rule 403 states: \"Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.\" In this case, the trial court conducted the requisite balancing test and determined the testimony should be allowed.\n\u00b6 20. In Derouen, when discussing the admissibility of evidence of this nature, the supreme court cites the dissent in Lambert in its entirety. In arguing its probative value outweighs the danger of unfair prejudice, the dissent in Lambert stated the following:\nSex crimes against children are furtive, secret events usually lacking evidence other than the conflicting testimony of the defendant and the victim. The only viable proof of motive, intent, plan, knowledge, identity or absence of mistake or accident may be the pattern of abuse suffered by others at the hands of the defendant.\nLambert, 724 So.2d at 395 (\u00b6 14) (Mills, J., dissenting, joined by Roberts and Smith, JJ.). Thus, the necessity of this type of evidence in cases involving sex crimes against children establishes their probative value. In most instances, as in the case at hand, evidence of a sexual offense other than the one charged, by a victim other than the victim of the charged offense, is the only evidence to show \"proof of motive, *920 opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.\" M.R.E. 404(b). In this case, M.G. testified that the first time Fountain had sexual intercourse with her, Fountain told M.G. he had done the same thing to K.U. when she was nine. He also showed M.G. several explicit videos of K.U. This established his plan or preparation in using his abuse of K.U. to further his abuse of others. Furthermore, his prior actions show a motive to engage in the type of act alleged. These facts could not be established without K.U.'s testimony. Thus, the probative value of the evidence outweighs any prejudicial effect the evidence may possess.\n\u00b6 21. Finally, the trial court, after deciding to admit the testimony, issued an appropriately drafted limiting or cautionary instruction to the jury. The trial court issued the following jury instruction:\nThe court instructs the Jury that the testimony of other acts as to a child which is not the subject of the Indictment being charged in this case is not evidence that the Defendant actually committed the crime charged herein or that the Defendant has a certain character and he acted in conformity therewith. Rather, the evidence, if proven beyond a reasonable doubt, may be considered, if you so determine, as to the Defendant's motive, opportunity, intent, preparation[,] and/or plan to commit the act for which he stands charged.\nFountain argues that in cases involving evidence of a separate bad act of a sexual nature against a different child, even a properly drawn limiting instruction cannot be followed by jurors. This argument is flawed. Under Fountain's argument, no limiting instruction would ever suffice in cases involving evidence of prior sexual acts against a victim other than the one bringing the current charges. This is clearly untrue. Otherwise, the supreme court in Derouen would not have made the limiting jury instruction a requirement in admitting this type of evidence. Thus, we find the trial court issued the type of appropriate limiting instruction intended by Derouen. This issue is without merit.\n\nB. Relevance of Prior Acts\n\u00b6 22. Fountain next argues the allegations in K.U.'s testimony were too remote in time to be relevant to the current case. The abuse alleged by K.U. occurred between sixteen and seventeen years prior to the trial in the instant case. In Gore v. State, 37 So.3d 1178 (Miss.2010), the supreme court allowed evidence of the defendant's prior sexual abuse of a different victim that occurred seven years before the abuse of the victim in the case. The Gore court cited the following cases from various jurisdictions: United States v. Hadley, 918 F.2d 848 (9th Cir.1990) (admitted evidence of other crimes occurring up to fifteen years prior to the crime for which the defendant was charged); Ex parte Register, 680 So.2d 225 (Ala. 1994) (allowed testimony of defendant's daughter regarding improper conduct that occurred seven to nine years previously); State v. Jackson, 625 So.2d 146 (La.1993) (permitted evidence of other crimes that occurred twenty-four years previously); State v. Driggers, 554 So.2d 720 (La.Ct.App.1989) (allowed admission of evidence of other acts that had occurred seven to twenty-six years previously). In Driggers, the Louisiana Court of Appeals reasoned that \"even though the other[-]crimes evidence may appear to be remote in time in some instances, the incidents are all within the same time period in terms of the victims' lives because all of the victims were essentially pre-pubescent.\" Gore, 37 So.3d at 1186 (\u00b6 19) (quoting Driggers, 554 So.2d at 727). Based on the age of the M.G. and K.U. when the abuse occurred, the timing *921 of the abuse of M.G. in relation to K.U. leaving for college, and the overwhelming amount of case law, we find K.U.'s testimony was not too remote in time to be relevant.\n\u00b6 23. Fountain further argues the assertions in K.U.'s testimony were too dissimilar to M.G.'s case to permit admission. However, several facts within the testimony of each victim are similar in nature. There are also consistencies in the manner in which the abuse occurred. In both instances of abuse, the victims were approximately the same age; in both cases Fountain bought the victims presents and gave them money; and in both cases Fountain used pornography. Also, as discussed above, Fountain used his prior abuse of K.U. to aid in his abuse of M.G. Small variations in the type of abuse, such as using a vibrator in one instance and not in the other, will not make the two cases too dissimilar to be relevant. Accordingly, we find K.U.'s testimony relevant to the current charge.\n\nC. Fair Trial\n\u00b6 24. In Fountain's final argument regarding K.U.'s testimony, he claims the testimony violated his right to a fair trial. First, Fountain discusses the emotional impact of her testimony. He asserts the testimony about her dependence on Fountain and her emotional reaction when testifying about the abuse in support of this argument. Next, he argues K.U.'s testimony regarding his masturbation and use of pornography was irrelevant and inflamed the jury. Finally, he argues K.U.'s testimony was the most compelling evidence against him, and the State used it as a key piece of evidence of his guilt.\n\u00b6 25. To begin, Fountain cites no legal authority in his argument relating to his right to a fair trial. \"Failure to cite relevant authority obviates the appellate court's obligation to review such issues.\" Simmons v. State, 805 So.2d 452, 487 (\u00b6 90) (Miss.2001) (citing Williams v. State, 708 So.2d 1358, 1362-63 (Miss.1998)). Furthermore, we have already addressed the relevance and admissibility of the testimony. The testimony was properly admitted and did not violate Fountain's right to a fair trial. This issue is without merit.\n\nII. Exclusion of False Allegations\n\u00b6 26. Prior to trial, the State filed a motion in limine seeking to exclude the introduction of evidence regarding M.G.'s past allegations of sexual assault against persons other than Fountain. M.G. previously reported that her half-brother, Destin Gollott, had raped her and that her step-brother, Chad Gollott, had assaulted her. Fountain sought to introduce this evidence under Mississippi Rule of Evidence 412(b)(2)(c) as a false allegation by M.G. of a past sexual offense. The State moved to exclude the evidence under Rule 412(c). Rule 412(c)(1) requires the party seeking to admit such evidence to file a written motion no later than fifteen days before trial, unless the \"evidence is newly discovered and could not have been obtained earlier through the exercise of due diligence[.]\"\n\u00b6 27. During discovery, the State provided Fountain with information regarding M.G.'s prior accusations. However, Fountain argued the evidence he sought to introduce was newly discovered because he did not receive Chad's videotaped denial of the accusation until one day before trial and, therefore, he was unable to meet the fifteen-day notice requirement. Although Fountain argued the false allegations made by M.G. were newly discovered evidence, the trial court held the evidence was not newly discovered. The trial court stated: \"It is conceded that the fact of this allegation was previously disclosed in discovery, *922 and the fact that the alleged perpetrator denied the same adds little to the argument in favor of its admission.\" The trial court found that Fountain failed to comply with the requirements of Rule 412(c). Therefore, the trial court granted the State's motion in limine.\n\u00b6 28. During the trial, M.G.'s accusations against Destin were introduced when the evidence became relevant during the testimony of medical personnel. Thus, on appeal, Fountain only argues the trial court erred by excluding evidence of M.G.'s supposedly false allegation against Chad. Citing Williams v. State, 54 So.3d 212 (Miss.2011), Fountain argues the exclusion of evidence tending to support his theory of defense is too harsh a sanction for discovery violations, without the trial court finding he failed to disclose the evidence with the intent to gain a tactical advantage. However, \"[t]he admission or exclusion of evidence constitutes reversible error only where a party can show prejudice or harm.\" Id. at 216 (\u00b6 14) (citing Ross v. State, 954 So.2d 968, 1001 (Miss. 2007)).\n\u00b6 29. We have previously upheld the exclusion of testimony based on Rule 412 violations of the same nature as is present in this case. In Lofton v. State, 818 So.2d 1229, 1233 (\u00b6 14) (Miss.Ct.App.2002), the defendant, Matthew Lofton, sought to introduce evidence under Rule 412(b)(2)(C), that the victim, M.M., had previously accused her father of fondling her, an allegation the victim later told the grand jury was untrue. M.M. later explained the reason she had denied the allegation and confirmed the allegations as true. Id. The trial court excluded the evidence because Lofton failed to comply with the fifteen-day notice requirement in Rule 412(c). Id. at 1233 (\u00b6 15). On appeal, this Court affirmed the exclusion of the evidence finding the trial court's exclusion of the evidence \"could not have affected the judgment and therefore is not reversible error.\" Id. at 1235 (\u00b6 22) (citation omitted).\n\u00b6 30. In Levy v. State, 724 So.2d 405, 408 (\u00b6 18) (Miss.Ct.App.1998), the defendant sought to introduce evidence of the victim's past sexual behavior. The trial court excluded the evidence. Id. On appeal, this Court held the trial court's exclusion of the evidence was not reversible error because of the defendant's failure to give timely notice or qualify for a procedural exception under Rule 412(c). Id. at 409 (\u00b6 19).\n\u00b6 31. Fountain admittedly did not comply with the fifteen-day notice requirement of Rule 412(c). He also does not fall within one of the procedural exceptions. Although he argues the videotape of Chad denying the allegations is newly discovered evidence, we find the evidence of M.G.'s allegation against Chad was not newly discovered evidence. Furthermore, the tape adds little, if any, value to Fountain's defense. The accusations against Chad were not the only source of evidence to support Fountain's theory of defense. M.G.'s allegations against Destin served the same purpose, and those allegations were introduced during the trial. Thus, the exclusion of Chad's testimony did not prejudice or harm Fountain's theory of defense. The jury returned a guilty verdict despite hearing other evidence of M.G.'s prior allegations of abuse.\n\u00b6 32. We find the exclusion of this evidence did not prejudice Fountain or affect the judgment rendered in this case; therefore, it is not reversible error. Accordingly, this issue is without merit.\n\nIII. Jury Instructions\n\u00b6 33. Fountain argues the trial court committed plain error in two of the *923 jury instructions given. When considering a challenge to a jury instruction on appeal, \"this Court does not review jury instructions in isolation; instead, jury instructions are reviewed as a whole.\" Morgan v. State, 995 So.2d 812, 816 (\u00b6 12) (Miss.Ct. App.2008) (citations omitted). \"Accordingly, this Court will not find reversible error where, when read as a whole, the jury instructions `fairly announce the law of the case and create no injustice.'\" Id. (quoting Foley v. State, 914 So.2d 677, 686 (\u00b6 14) (Miss.2005)).\n\u00b6 34. Fountain did not object to either instruction during the trial. However, he argues the instruction should be reviewed under the plain-error doctrine. Appellate courts will \"only address[] issues on plain[-]error review when the error of the trial court has impacted upon a fundamental right of the defendant.\" Sanders v. State, 678 So.2d 663, 670 (Miss.1996). Thus, the plain-error doctrine's two-part test requires: \"(i) an error at the trial level[,] and (ii) such an error resulted in a manifest miscarriage of justice.\" Stephens v. State, 911 So.2d 424, 432 (\u00b6 19) (Miss.2005) (citation omitted).\n\nA. Response to Jurors' Question\n\u00b6 35. Fountain argues the trial court erred in its response to a question by the jury. During deliberations the jury sent the trial judge a note that said: \"Can we get a copy of testimony of [M.G.]?\" The trial judge responded: \"It is not possible to provide the jury a transcript of any testimony. Please rely upon the collective recollection of the jury and continue your deliberations.\" Fountain claims the trial court's response to the jury question \"directed the individual jurors to acquiesce to the collective will of the other jurors.\" We find the trial court's instruction did not affect Fountain's fundamental rights and, thus, does not constitute a manifest miscarriage of justice. The importance of the response was to inform the jury it would not be provided with a transcript of M.G.'s testimony. Fountain provides no authority to support his interpretation of the trial court's instruction of the jury. Furthermore, nothing in the instruction indicates the trial court directed the individual jurors to submit to the will of the jury as a whole. The trial court's response to the jury question does not constitute plain error, and this issue is without merit.\n\nB. Jury Instruction\n\u00b6 36. Fountain also argues the trial court improperly granted jury instruction 12. The jury instruction read as follows:\nThe Court instructs the Jury that under the law of the State of Mississippi a child under the age of fourteen (14) cannot give consent to the crime of Sexual Battery. Therefore[,] the child's consent or lack of consent is not a material issue to your decision on Defendant's guilt or innocence.\nFountain argues jury instruction 12 presumed an act of sexual battery had occurred by introducing the defense of consent, a defense Fountain did not present at trial. We find the jury instruction was not plain error. The instruction was reasonable in light of the evidence in this case. Based on the evidence, the jury could have assumed that there was no evidence presented to suggest M.G. attempted to stop the sexual assault. There was, however, evidence that M.G. had conformed to some of Fountains suggestions, such as shaving her pubic hair. In addition, K.U.'s testimony regarding the continuation of her relationship with Fountain into adulthood could have indicated some level of consent was involved in the sexual abuse. Jury instruction 12 simply instructed the jury that even if it believed M.G. consented to *924 the assault, she was legally unable to do so. The jury instruction was not plain error. Accordingly, we find this issue to be without merit.\n\nIV. Motions for a Directed Verdict, JNOV, and New Trial\n\u00b6 37. In his final assignment of error, Fountain argues the trial court erred by denying his motions for a directed verdict, JNOV or, alternatively, a new trial. He argues his motions should have been granted because the verdict was contrary to the overwhelming weight of the evidence, and the evidence presented was insufficient to support the conviction.\n\u00b6 38. Fountain was convicted of sexual battery under Mississippi Code Annotated section 97-3-95(1)(d) (Rev.2006), which states: \"A person is guilty of sexual battery if he or she engages in sexual penetration with ... [a] child under the age of fourteen (14) years of age, if the person is twenty-four (24) or more months older than the child.\"\n\nA. Motion for a New Trial\n\u00b6 39. A motion for a new trial challenges the weight of the evidence. Bush v. State, 895 So.2d 836, 844 (\u00b6 18) (Miss.2005). \"[W]e will only disturb a verdict when it is so contrary to the overwhelming weight of the evidence that to allow it to stand would sanction an unconscionable injustice.\" Id. (citation omitted). On appeal, \"the evidence should be weighed in the light most favorable to the verdict.\" Id. (citation omitted). \"When this Court analyzes a jury's verdict to determine whether it goes against the overwhelming weight of the evidence, we must keep in mind that the jury is the ultimate finder of fact.\" Reeves v. State, 825 So.2d 77, 80 (\u00b6 8) (Miss.Ct.App.2002).\n\u00b6 40. In the instant case, the State provided ample evidence of sexual battery, and the jury's verdict does not present an \"unconscionable injustice.\" The jury heard testimony from M.G. detailing her sexual abuse at the hands of Fountain, including penetration. The jury also heard the testimony of Investigator Hines, who stated that M.G. knew where certain items would be located in Fountain's home. Those items included vibrators and nude photographs. In addition, K.U. testified to her prior sexual abuse by Fountain, thus establishing a motive to commit the crime.\n\u00b6 41. A jury is entitled to believe or disbelieve the testimony of any witness. Moore v. State, 969 So.2d 153, 156 (\u00b6 11) (Miss.Ct.App.2007). In this case, the jury choose to believe the testimony of M.G. and other evidence that supported her allegations. Furthermore, the jury was entitled to disbelieve Fountain's testimony in which he denied the allegations of both M.G. and K.U. We do not find the jury's decision was against the overwhelming weight of credible evidence, nor does it constitute an unconscionable injustice. This issue is without merit.\n\nB. Motion for Directed Verdict or for a JNOV\n\u00b6 42. A motion for a directed verdict or for a JNOV implicates the sufficiency of the evidence. Bush, 895 So.2d at 843 (\u00b6 16). In reviewing a motion for a directed verdict or for a JNOV, \"the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.\" Id. (quoting Jackson v. Virginia, 443 U.S. 307, 315, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979)).\n\u00b6 43. As discussed above, the State provided sufficient evidence to support the jury's verdict. Fountain argues *925 the evidence was insufficient because the State did not produce any DNA evidence to prove the abuse. In fact, the items from Fountain's house were tested, and no DNA evidence from M.G. was present. While DNA evidence certainly supports a conviction, it is not absolutely necessary to support a guilty verdict. Because of the inherent secrecy involved in child-abuse cases, there is often little evidence other than the child's testimony to support conviction. To require DNA evidence in these cases would virtually abolish crimes involving child abuse. Furthermore, M.G.'s testimony that condoms were used explains the lack of DNA on items found within Fountain's home. For the foregoing reasons, we find this issue is without merit.\n\u00b6 44. THE JUDGMENT OF THE JACKSON COUNTY CIRCUIT COURT OF CONVICTION OF FOUR COUNTS OF SEXUAL BATTERY AND SENTENCE OF THIRTY YEARS FOR EACH COUNT WITH THE SENTENCES TO RUN CONCURRENTLY ALL IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS WITHOUT ELIGIBILITY FOR PAROLE OR PROBATION AND TO PAY A $10,000 FINE FOR EACH COUNT IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO JACKSON COUNTY.\nLEE, C.J., GRIFFIS, P.J., BARNES, ROBERTS, CARLTON, MAXWELL, RUSSELL AND FAIR, JJ., CONCUR. IRVING, P.J., CONCURS IN PART AND IN THE RESULT WITHOUT SEPARATE WRITTEN OPINION.\nNOTES\n[1] Actual names are not revealed in sexual-abuse cases.\n[2] We note that Surian later married Gollott and changed her last name; however, for the purposes of this opinion, we refer to her as Surian.\n"} -{"text": "\n102 B.R. 587 (1989)\nIn re Larry Gene STOGSDILL and Vicki Marie Stogsdill, Debtors.\nBankruptcy No. 89-10753-LC.\nUnited States Bankruptcy Court, W.D. Texas, Austin Division.\nJune 29, 1989.\nMarsha G. Kocurek, Austin, Tex., Chapter 7 Trustee.\n\nDECISION AND ORDER\nLEIF M. CLARK, Bankruptcy Judge.\nThe Chapter 7 Trustee in this case has filed an Application To Sell Property by Auction free and clear of liens and other interests. In accordance with the standard *588 procedures employed in this district with respect to sales free and clear of liens, the Application was set for hearing. The Trustee at the scheduled hearing indicated his dissatisfaction with the local procedure, stating that in point of fact, he should have been permitted to file his Application with \"negative notice,\" i.e., notice to creditors indicating that, unless objections were filed within a certain period of time, an order would be entered without further hearing on the Application. The Court agrees with the Trustee, and accordingly enters this decision to clarify the procedure both for the benefit of our clerk's office and practitioners in this district.\nThe confusion is created by the precise language of Bankruptcy Rule 6004. Subparagraph (c) of that Rule reads as follows:\nA motion for authority to sell property free and clear of liens or other interests shall be made in accordance with Rule 9014 and shall be served on the parties who have liens or other interests in the property to be sold. The notice required by subdivision (a) of this Rule shall include the date of the hearing on the motion and the time within which objections may be filed and served on the debtor-in-possession or trustee.\nBankr.R. 6004(c) (emphasis added).[1]\nThe \"negative notice\" procedure referenced above is authorized by Section 102(1) and Bankruptcy Rule 9014. The rule specifies that relief in contested matters shall be requested \"by motion, and reasonable notice and opportunity for hearing shall be afforded the party against whom relief is sought.\" Bankr.R. 9014. The language \"notice and an opportunity for a hearing\" is in turn defined in \u00a7 102(1) of the Bankruptcy Code so as to obviate the requirement of an actual hearing, provided due notice and an opportunity for a hearing has been afforded all affected parties and no one has objected to the relief requested in the motion or application. 11 U.S.C. \u00a7 102(1); see In re Wideman, 84 B.R. 97, 99 (Bankr.W.D.Tex.1988). However, Bankruptcy Rule 6004(c) specifies that the notice \"shall include the date of the hearing on the motion.\" Bankr.R. 6004(c). According to Colliers,\nPractice under Rule 604(c) requires a hearing date to be set in the original notice; a hearing must be held even if no responses are filed. (Responses are not required under Rule 9014).\n8 Collier on Bankruptcy \u00b6 6004.08 (15th ed. 1987).\nIn my view, Bankruptcy Rule 6004(c) is at odds with the Bankruptcy Code. Section 363(b)(1) of the Code states that \"the trustee, after notice and a hearing, may use, sell, or lease other than in the ordinary course of business, property of the estate.\" 11 U.S.C. \u00a7 363(b)(1). Subparagraph (f) of that section in turn states that the Trustee may sell property in subsections (b) of \u00a7 363 free and clear of any interest in such property subject to certain conditions precedent specified in the statute. 11 U.S.C. \u00a7 363(f).\nAs this Court discussed at some length in its previous ruling regarding Bankruptcy Rule 6007, the Bankruptcy Rules may not amend the Bankruptcy Code. In re Wideman, supra at 100-101. Section 102(1)'s definition of \"after notice and a hearing\" is Congress' statutorily enacted policy statement regarding the appropriate role of bankruptcy judges in the administration of cases under the Code. The legislative history to that section is explicit:\nParagraph (1) defines the concept of \"after notice and a hearing.\" The concept is central to the bill and to the separation of the administrative and judicial functions of bankruptcy judges. . . . This is a significant change from present law, which requires the affirmative approval of the bankruptcy judge for almost every *589 action. The change will permit the bankruptcy judge to stay removed from the administration of the bankruptcy reorganization case, and to become involved only when there is a dispute about a proposed action, that is, only when there is an objection.\nH.R.Rep. No. 595, 95th Cong, 1st Sess 315 (1977), U.S.Code U.S.Code Cong. & Adm. News 1978, pp. 5787, 6272. Bankruptcy Rule 6004(c) imposes a hearing requirement where the Bankruptcy Code explicitly specifies (by its use of the phrase \"after notice and a hearing\") utilization of the negative notice procedure created by Section 102(1). The Rule thus tends to defeat the clearly expressed purpose of Congress to remove the bankruptcy judge from the administration of the bankruptcy case and \"amends\" Section 363(b) by, in effect, deleting the phrase \"after notice and a hearing.\" In fact, Rule 6004(c) returns bankruptcy courts to the sale practice under the Bankruptcy Act, a result directly contrary to the letter and spirit of the Bankruptcy Code. See \"Report of the Commission on the Bankruptcy Laws of the United States,\" H.R.Doc. No. 137, 93rd Cong, 1st Sess 16-17 (1973). The Code contemplates that hearings will be held on sales of estate property, including sales of property free and clear of liens, \"only when there is an objection.\" See House Report, supra.\nWhere the Bankruptcy Rules and the Bankruptcy Code are inconsistent, the Bankruptcy Code must control. 28 U.S.C. \u00a7 2075; 1 Collier on Bankruptcy, \u00a7 3.04[2][c] (15th ed. 1987). Therefore, this Court holds that for this case and all future such cases, notwithstanding the express language of Bankruptcy Rule 6004(c), a sale free and clear of liens and other interests may be accomplished by means of an application which specifies the requisite information regarding the sale and includes negative notice language which otherwise conforms to the requisites of Bankruptcy Rule 6004(a) and which affords creditors, parties in interest, and affected parties not less than 20 days opportunity to object to the proposed action (unless the Court shortens the notice period upon appropriate motion). See In re Wideman, supra. In general, a hearing on such motions containing negative notice will not be held in this district unless an objection is timely filed.\nSO ORDERED.[2]\nNOTES\n[1] Subdivision (a) of the rule specifies that notice of a proposed use, sale or lease of property must be given in accordance with Bankruptcy Rule 2002(a)(2) (which requires notice to all creditors), 2002(c)(1) (which requires the notice to specify the time and place of sale, the terms and conditions of any private sale, and the time fixed for filing objections), and 2002(i) (which directs notice to committees in lieu of notice to all creditors in certain circumstances). Bankr.R. 6004(a).\n[2] In view of the ruling of this court, there is no further reason to delay approval of the proposed sale. It is therefore further ordered that the trustee's application is in all things approved.\n"} -{"text": "\n472 F.Supp.2d 665 (2007)\nAllah BURMAN, Plaintiff,\nv.\nUNITED STATES of America, Defendant.\nCivil No. L-03-1165.\nUnited States District Court, D. Maryland.\nFebruary 7, 2007.\nAllah Burman, El Reno, OK, Pro se.\nChristopher J. Romano, Office of the United States Attorney, Baltimore, MD, for Defendant.\n\nMEMORANDUM\nLEGG, Chief Judge.\nOn April 17, 2003, Allah Burman (\"Burman\") filed a motion seeking the return of property that the government seized from him in 2001 pursuant to a search warrant in a drug case. The Court will, by separate *666 Order, VACATE the Court's Order dated August 14, 2006, GRANT Burman's motion for the return of $824, and RESERVE JUDGMENT on the remaining property. This Order specifies the facts that the government must supply regarding the remaining property and sets deadlines so that this old case can be decided.\nI. Background\nBurman seeks the return of the following seized property: (i) a 2001 Suzuki GSXR 750 motorcycle, (ii) assorted jewelry, and (iii) United States currency. Law enforcement officers seized these items from a home at 14407 Sequoia Bend Boulevard in Houston, Texas, as part of a drug investigation. The investigation led to the indictment of Burman and others. United States v. Burman, Crim. No. L-00-0115 (D.Md.). On January 29, 2003, after a two-and-a-half week trial, a jury convicted Burman on two counts: (i) conspiring to distribute cocaine and (ii) possession with intent to distribute cocaine.\nSoon after Burman's arrest, the Drug Enforcement Agency (DEA) began civil forfeiture proceedings against the seized property pursuant to 21 U.S.C. \u00a7 881. Property purchased with the proceeds of drug trafficking is subject to forfeiture. 21 U.S.C. \u00a7 881(a)(6). By statute, the government must initiate a forfeiture case, which is administrative, by giving written notice to any interested party. The government is also required to publish notice in a publication of general circulation. 18 U.S.C. \u00a7 983(a)(1)(A)(i); 19 U.S.C. \u00a7 1607(a).\nA person who receives written notice (hereinafter \"Notice\" or \"Notice of Forfeiture\"[1]), or who learns of the forfeiture proceedings by other means has a specified time in which to file a claim. The claimant has two options. He may file a request for judicial forfeiture proceedings with the seizing agency. The agency must refer the request to the applicable United States Attorney, who then files a complaint for forfeiture in federal district court. 18 U.S.C. \u00a7 983(a)(3). The claimant may also elect to remain in the administrative forum by filing a petition for remission or mitigation.[2]\nIf a person to whom notice was sent does nothing and the administrative tribunal declares the property forfeited, the district court, by statute, lacks subsequent jurisdiction over the property with one exception. If the claimant alleges that the government failed to provide him with adequate notice and that he did not otherwise know of the forfeiture proceedings, the district court must decide that issue.[3] If the court concludes that the claimant was adequately advised of the forfeiture proceedings, the court must dismiss the claim. If, however, the court concludes that notice was lacking, then the government must return the property and/or file a new forfeiture action.[4]\n*667 Burman filed the instant Motion for Return of Property on April 17, 2003. He makes a number of claims, including that the property was seized without probable cause, the search warrant was defective, and that the prosecution presented perjured testimony to the grand jury that indicted Burman. By statute, this Court has jurisdiction over only one of Burman's contentions, that he was not adequately notified of the forfeiture proceedings. Accordingly, the Court will treat his filing as a motion to set aside the forfeiture for insufficient notice.\nII. Standard\nUnder 18 U.S.C. \u00a7 983(e), an \"interested party\" may move to set aside a declaration of forfeiture if (i) the government failed to take reasonable steps to provide him with notice, and (ii) the moving party did not otherwise know or have reason to know of the forfeiture in time to file a timely claim.\nThe Fourth Circuit has provided substantial guidance in this area. See United States v. Minor, 228 F.3d 352 (4th Cir. 2000). The Court places the burden on the government to show that it took \"reasonable steps\" to provide notice to the claimant. The case law also spells out the requirements of \"reasonable notice\" to a federal prisoner.[5] The government must (i) send a certified letter, return receipt requested, to the facility where the prisoner is housed, (ii) show that a prison official signed for the letter, and (iii) provide evidence \"that mail delivery procedures existed at that facility that `were reasonably calculated to ensure that the notice, once addressed to [the inmate], would still reach him upon arrival at the prison (and indeed, would only be accepted were [the inmate] actually present).\" Id. at 358 (quoting United States v. One Toshiba Color Television, 213 F.3d 147, 156 (3d Cir.2000)). Notice sent to the inmate's relatives, lawyer, or former residence is insufficient.\nWhile Minor does not address the second prong, logic suggests that the government would also carry the burden of proving that the claimant otherwise knew or should have known of the forfeiture.\nIII. Analysis\nApplying the tests to the instant case is complicated.[6] As will be discussed, the DEA sent multiple Notices of Forfeiture to Burman, addressed to several jails, to his mother, and to attorneys who had represented him. These Notices specified the property involved and advised Burman of the formal requirements for making a claim. There is no direct evidence that any of the notices ever reached Burman. With respect to the Notices that were sent to Burman in jail, the government has failed to offer any proof that Burman was at that particular jail when notice was delivered, that the person who signed for the letter was a prison official, or that mail delivery procedures at the jail were reasonably calculated to ensure that the Notice reached Burman.\nBurman evidently knew that the government was seeking forfeiture of some of his property. He mailed the DEA letters asking what was happening with certain items. The DEA treated these letters as requests for judicial forfeiture proceedings, but denied the requests either because *668 they were untimely or because Burman had failed to submit his claims under oath as required by the statute.[7]\nThe DEA mailed Burman a number of corrective notices advising that his claim must be sworn under oath, subject to the penalties of perjury, and giving him 20 days to cure the defect. Except with respect to one item of property ($824), Burman never filed a claim that met the formal requirements. There is no direct evidence that any of these corrective notices ever reached Burman, however. Moreover, there has been no briefing whether these corrective notices are subject to the \"reasonable steps\" requirement of \u00a7 983. If they are, the government has made no effort to establish that Burman was at the jail to which the corrective notices were addressed or any of the other requirements established by the Fourth Circuit for notice to a federal prisoner.\nBecause the record is deficient, the Government has two options:\n(i) The government can attempt to complete the record by presenting evidence on the \"reasonable steps\" prong. If the government can show that it took reasonable steps, then Burman failed to submit a proper verified claim for any of the items except for $824. Except with respect to this item, Burman's motion to set aside the forfeiture would be denied.\n(ii) The government can, if limitations have not run, re-initiate forfeiture proceedings by addressing Notices of Forfeiture to Burman at his present place of federal incarceration for each of the items except the $824.[8]\nIn a separate order, the Court will give the government a time limit for choosing between these options. The remainder of this opinion outlines the present state of the record with respect to each of the items subject to forfeiture.\nA. Motorcycle (Asset I.D. No. 01-DEA-393568)\n1. History of Notices with Respect to the Motorcycle\nOn July 6, 2001, the DEA sent a Notice of Forfeiture for the motorcycle by certified mail, return receipt requested, to the following addresses:\n(i) 14407 Sequoia Bend Boulevard, Houston, Texas, where Burman resided prior to his arrest. The Notice was returned unclaimed.\n(ii) The Law Offices of Ronald Green, Esq. (\"Green\") in Houston, Texas. Green had at one time represented Burman in a criminal case. A person named \"T. Anderson\" signed for the Notice. On July 16, 2001, Green informed the DEA that he was no longer Burman's counsel and requested that correspondence be directed to the United States Marshal in Baltimore.[9]\n(iii) The Federal Detention Center in Houston, Texas (\"FDC-Houston\"). A person whose name is illegible signed for the Notice.[10]\n*669 In a letter dated December 31, 2001 and received by the DEA on January 8, 2002, Burman stated that he had received no correspondence about the motorcycle and asked for a status report.[11] The DEA treated the letter as a request for judicial forfeiture proceedings, but rejected the request because it was not made under oath, subject to penalty of perjury, as required by 18 U.S.C. \u00a7 983(a)(2)(C)(iii).[12]\nOn January 18, 2002, the DEA issued a corrective notice granting Burman 20 more days to file a timely request for judicial forfeiture proceedings. It sent the corrective notice to the following addresses:\n(i) The Law Offices of Thomas Saunders. Saunders had been appointed as trial counsel in Burman's criminal case on October 5, 2001. (Grim. Case No. L-01-115, D. Md., Docket No. 110). A person whose name is illegible signed for the corrective notice on January 25, 2002.[13]\n(ii) 911 Dartmouth Glen Way, Baltimore, Md. This is the address of Burman's mother, Shirley Burman. Ms. Burman signed for the corrective notice on January 24, 2002.[14]\n(iii) The Maryland Correctional Adjustment Center (\"MCAC\") in Baltimore, Maryland, which was the return address on Burman's December 31st letter. A person named \"Tameka Sally\" signed for the corrective notice on January 24, 2002.[15]\nAlso on January 18, the DEA issued a new Notice of Forfeiture for the motorcycle and sent it to the following addresses:\n(i) The Law Offices of Thomas Saunders. It is unclear whether anyone signed for it.\n(ii) MCAC. A person named \"Tameka Sally\" signed for the Notice of Forfeiture on January 22, 2002.\nOn February 6, 2002, within the 20-day window for correcting the defect, the DEA received another letter from Burman stating that he wished to contest the forfeiture of the motorcycle.[16] Although the return address on the envelope was \"The Law Offices of Thomas J. Saunders,\" Burman explained in his letter that Saunders no longer represented him.[17]\nThe DEA treated the letter as a request for judicial forfeiture proceedings. In a corrective notice dated February 27, 2002, it denied the request because Burman had failed to sign and swear his statement under oath, subject to penalties of perjury. Burman was once again granted 20 days to cure the defect.[18] The DEA sent the corrective notice to Saunders, but the U.S. Postal Service returned the certified mail slip unsigned.[19]\nOn May 2, 2002, the DEA issued a third corrective notice, again giving Burman 20 days to file a proper request for judicial *670 forfeiture proceedings. It sent this notice to the following addresses:\n(i) 911 Dartmouth Glen Way, Baltimore, Md. This is the address of Burman's mother, Shirley Burman. The corrective notice was returned unclaimed.[20]\n(ii) Wicomico County Jail in Salisbury, Md. The corrective notice was returned unclaimed.[21]\nAn internal e-mail reveals that the DEA learned in September 2002 that Burman had been moved to the Central Virginia Regional Jail (\"CVRJ\") in Orange, Virginia. In October 2002, the DEA sent a copy of the third corrective notice to the CVRJ, where an individual named \"Roy Lewis\" signed for it on October 7, 2002.\nBurman never filed a response. Accordingly, the motorcycle was administratively forfeited on May 8, 2003.[22]\n2. Record Is Insufficient with Respect to the Motorcycle\nAs discussed above, the government is entitled to prevail if (i) the DEA made reasonable attempts to provide notice or (ii) Burman knew or had reason to know of the seizure within sufficient time to file a timely claim. 18 U.S.C. \u00a7 983(e).\nIt is clear that Burman knew of the seizure within sufficient time to file a timely claim, because he did, in fact, file a timely request for judicial forfeiture proceedings on February 6, 2002. The DEA rejected the request because it was not properly sworn, not because it was untimely.\nThis may not be the end of the inquiry, however. The government has not briefed two issues. First, whether the DEA was required to send Burman corrective notices (i) informing him that his request was defective, and (ii) giving him a grace period to cure the defect. Second, whether corrective notices are subject to the requirements of \u00a7 983(e).\nIf corrective notices are required and subject to \u00a7 983(e), then the record is incomplete. Burman did not respond to the notices issued on or after February 27, 2002. Moreover, the government has not shown that the corrective notices were \"reasonably calculated\" to reach Burman.[23] The corrective notice sent to Wicomico County Jail on May 2, 2002 was returned unclaimed. It was, therefore, inadequate. This leaves the corrective notice sent to CVRJ in September 2002. Someone named \"Roy Lewis\" signed for this notice, but the government has not shown that (i) Burman was incarcerated at CVRJ when the notice arrived, (ii) Roy Lewis was a prison employee, and (iii) CVRJ had in place adequate procedures to ensure that prisoners received their mail.\nThe government must supply the requested information before the Court can render a decision. Accordingly, the Court will RESERVE JUDGMENT on Burman's motion for the return of the motorcycle.\n*671 B. Jewelry (Asset I.D. No. 01-DEA-393812)\n1. History of Notices with Respect to the Jewelry\nOn July 20, 2001, the DEA sent a Notice of Forfeiture for the jewelry by certified mail, return receipt requested, to the following addresses:\n(i) 14407 Sequoia Bend Boulevard, Houston, Texas, where Burman resided prior to his arrest. Someone named \"Edward Jones, Jr.\" signed for the Notice of Forfeiture on July 21, 2001.[24]\n(ii) The Law Offices of Ronald Green, Esq. in Houston, Texas. Someone named \"T. Anderson\" signed for the Notice on July 23, 2001.[25]\n(iii) The Federal Detention Center in Houston, Texas (\"FDC-Houston\"). A person whose name is illegible signed for the Notice on July 29, 2001, but several days later it was sent back to the DEA, stamped \"return to sender.\"\nOn December 21, 2001, the DEA sent a second Notice of Forfeiture to the Maryland Correctional Adjustment Center (\"MCAC\") in Baltimore, Maryland. A person named \"Tameka Sally\" signed for it on December 26, 2001.[26]\nOn December 31, 2001, the DEA sent a copy of the first Notice of Forfeiture to the Law Offices of Thomas Saunders. On October 5, 2001, Saunders was appointed as Burman's trial counsel in Burman's criminal case on October 5, 2001. (Case No. L-01-115, D. Md., Docket No. 110). It is unclear whether anyone signed for the Notice of Forfeiture.[27]\nThen, in a letter dated December 31, 2001 and received by the DEA on January 8, 2002, Burman stated that he wished to make a claim for his jewelry.[28] The DEA treated the letter as a timely request for judicial forfeiture proceedings, but rejected the request because it was not made under oath, subject to penalty of perjury, as required by 18 U.S.C. \u00a7 983(a)(2)(C)(iii).\nOn January 18, 2002, the DEA issued a corrective notice granting Burman 20 more days to file a timely request for judicial forfeiture proceedings. It sent the corrective notice to the following addresses:\n(i) The Law Offices of Thomas Saunders. A person whose name is illegible signed for the corrective notice on January 25, 2002.[29]\n(ii) 911 Dartmouth Glen Way, Baltimore, Md. This is the address of Burman's mother, Shirley Burman. Ms. Burman signed for the corrective notice on January 24, 2002.[30]\n(iii) The Maryland Correctional Adjustment Center (\"MCAC\") in Baltimore, Maryland, which was the return address on Burman's December 31st letter. A person named \"Tameka Sally\" signed for the corrective notice on January 24, 2002.[31]\nOn February 6, 2002, within the 20-day window for correcting the defect, the DEA *672 received another letter from Burman stating that he wished to contest the forfeiture of the jewelry. Although the return address on the envelope was \"The Law Offices of Thomas J. Saunders,\" Burman explained in his letter that Saunders was no longer representing him.[32]\nThe DEA treated the letter as a request for judicial forfeiture proceedings. In a corrective notice dated February 27, 2002, it denied the request because Burman had failed to sign and swear his statement under oath, subject to penalties of perjury, but gave Burman 20 days to cure the defect.[33] This notice was sent to Saunders's office, but the U.S. Postal Service returned the certified mail slip unsigned.[34]\nOn May 2, 2002, the DEA issued a third corrective notice, again giving Burman 20 days to file a proper request for judicial forfeiture proceedings. It sent this notice to the following:\n(i) 911 Dartmouth Glen Way, Baltimore, Md. This is the address of Burman's mother, Shirley Burman. The corrective notice was returned unclaimed.[35]\n(ii) Wicomico County Jail in Salisbury, Md. The corrective notice was returned unclaimed.[36]\nOn September 11, 2002, the DEA issued a fourth corrective notice granting Burman 20 more days to file a timely request for judicial forfeiture proceedings.[37] It sent the corrective notice to the following addresses:\n(i) 14407 Sequoia Bend Boulevard, Houston, Texas. The corrective notice was returned unclaimed.[38]\n(ii) FDC-Houston. A person named \"Stinebuck\" signed for the corrective notice on September 23, 2002.\n(iii) The Central Virginia Regional Jail (\"CVRJ\") in Orange, Virginia. A person named \"Roy Lewis\" signed for the corrective notice on October 7, 2002.[39]\nBurman did not respond. Accordingly, on May 8, 2003, the DEA forfeited the jewelry.[40]\n2. Record is Insufficient with Respect to the Jewelry\nBurman knew of the seizure within sufficient time to file a timely claim. He filed two timely requests for judicial forfeiture proceedings on January 8, 2002 and February 6, 2002. The DEA rejected the requests because they were not properly sworn, not because they were untimely.\nAs discussed above, this may not end the inquiry. If corrective notices are required and subject to \u00a7 983(e), then the record is incomplete. Burman did not respond to the notices issued on or after February 27, 2002. Moreover, the government has not shown that the corrective notices were \"reasonably calculated\" to reach Burman in prison. Again, the corrective notice sent to Wicomico County Jail on May 2, 2002 was inadequate because it was returned unclaimed. This leaves the corrective notices sent to the FDC-Houston and CVRJ on September 11, 2002. Someone named \"Stinebuck\" signed for the notice at the FDC-Houston on September 23, 2002, and someone *673 named \"Roy Lewis\" signed for the notice at CVRJ on October 7, 2002. The government has not shown, however, that (i) Burman was incarcerated at the FDC-Houston on September 23, 2002 or at CVRJ on October 7, 2002, (ii) Stinebuck and Roy Lewis were prison employees, and (iii) the FDC-Houston and CVRJ had in place adequate procedures to ensure that prisoners received their mail.\nThe government must supply the requested information before the Court can render a decision. Accordingly, the Court will RESERVE JUDGMENT on Burman's motion for the return of the jewelry.\nC. $15,000 in United States Currency (Asset I.D. No. 01-DEA-393660)\n1. History of Notices with Respect to the $15,000\nOn July 20, 2001, the DEA sent a Notice of Forfeiture for $15,000[41] by certified mail, return receipt requested, to the following addresses:\n(i) 14407 Sequoia Bend Boulevard, Houston, Texas, where Burman resided prior to his arrest. The Notice was returned unclaimed.[42]\n(ii) The Law Offices of Ronald Green, Esq. in Houston, Texas. \"T. Anderson\" signed for the Notice.[43] On July 16, 2001, Green informed the DEA that he was no longer Burman's counsel and requested that correspondence be directed to the United States Marshal in Baltimore.[44]\n(iii) The Federal Detention Center in Houston, Texas (\"FDC-Houston\"). A person whose name is illegible signed for the Notice on July 12, 2001.[45]\nOn November 26, 2001, the DEA sent a second Notice of Forfeiture for the $15,000 to the following:\n(i) The Maryland Correctional Adjustment Center (\"MCAC\") in Baltimore, Maryland. A person named \"Karen Gardner\" signed for it on November 29, 2001.[46]\n(ii) The Law Offices of Thomas Saunders. The Notice was returned unclaimed.[47]\nIn a letter dated January 31, 2002 and received by the DEA on February 6, 2002, Burman stated that he wished to make a claim for the $15,000.[48] Although the return address on the envelope was \"The Law Offices of Thomas J. Saunders,\" Burman explained in his letter that Saunders was no longer representing him.\nThe DEA treated the letter as a request for judicial forfeiture proceedings, but rejected it outright because it was untimely. The DEA did not give Burman another chance to request judicial forfeiture proceedings, as it did with the motorcycle and *674 the jewelry. Instead, in a notice dated February 27, 2002 (\"denial notice\"), the DEA informed Burman that he had 20 days to file a petition for remission or mitigation. This notice was mailed to Saunders, but the U.S. Postal Service returned the certified mail slip unsigned.[49]\nOn May 8, 2003, the DEA apparently sent another copy of the denial notice to Burman at MCAC, where a person named \"Theresa Williams\" signed for it on May 13, 2003.[50] To date, the government has provided no evidence that it has completed forfeiture of the $15,000.\n2. Record Is Incomplete with Respect to the $15,000\nThe record is incomplete with respect to the $15,000. First, the government has provided no evidence that the DEA issued a declaration of forfeiture for the $15,000. If the DEA never forfeited the $15,000, the Court lacks jurisdiction over Burman's claim.[51]\nSecond, the government has not shown that its Notices of Forfeiture met the requirements of \u00a7 983(e). It has provided no evidence that Burman knew or had reason to know of the seizure in time to file a timely claim.[52] Moreover, the government has not shown that the Notices of Forfeiture were \"reasonably calculated\" to reach Burman. Burman apparently was not at the FDC in Houston in July 2001, when the first Notice of Forfeiture was delivered.[53] This notice, therefore, was inadequate. This leaves the Notice of Forfeiture sent to MCAC on November 26, 2001 and signed for by \"Karen Gardner.\" What is missing is evidence that (i) Burman was incarcerated in the MCAC when the Notice arrived, (ii) Karen Gardner was a prison official, and (iii) the mail procedures at the MCAC were adequate.\nFinally, the government has not briefed two issues. First, whether the DEA was required to send Burman denial notices (i) informing him that his request for judicial forfeiture proceedings had been rejected, and (ii) advising him of his right to file for remission or mitigation. Second, whether denial notices are subject to the requirements of \u00a7 983(e). If denial notices are required and subject to \u00a7 983(e), then the record is incomplete.[54]\nAccordingly, the Court will RESERVE JUDGMENT on Burman's motion regarding the $15,000. The government shall supplement the record with the requested information.\n*675 D. $6,000 in United States Currency (Asset I.D. No. 01-DEA-393652)\n1. History of Notices with Respect to the $6,000\nOn July 20, 2001, the DEA sent a Notice of Forfeiture for $6,000 by certified mail, return receipt requested, to the following addresses:\n(i) 14407 Sequoia Bend Boulevard, Houston, Texas, where Burman resided prior to his arrest. The Notice was returned unclaimed.[55]\n(ii) The Law Offices of Ronald Green, Esq. in Houston, Texas. Someone named \"T. Anderson\" signed for the Notice.[56] On July 16, 2001, Green informed the DEA that he was no longer Burman's counsel and requested that correspondence be directed to the United States Marshal in Baltimore.[57]\n(iii) The Federal Detention Center in Houston, Texas (\"FDC-Houston\"). The Notice was returned unclaimed.[58]\nOn November 26, 2001, the DEA sent a new Notice of Forfeiture for the $6,000 to the following:\n(i) The MCAC in Baltimore, Maryland, where a person named \"Karen Gardner\" signed for it on November 29, 2001.[59]\n(ii) The Law Offices of Thomas Saunders. The Notice was returned unclaimed.[60]\nOn March 11, 2002, the DEA declared that the $6,000 had been forfeited.[61] Even so, it subsequently sent a new Notice of Forfeiture, dated May 15, 2002, to the following:\n(i) Wicomico County Jail in Salisbury, Md. This Notice was returned unclaimed.\n(ii) 911 Dartmouth Glenway in Baltimore, Md. Burman's mother, Shirley Burman, signed for it.\nThe DEA received correspondence about the $6,000 from Burman on or around June 21, 2002. The government has only provided a copy of the envelope, which lists the return address as Shirley Burman's residence. In any event, the DEA construed the correspondence as a request for judicial forfeiture proceedings, but rejected the request as untimely.\nIn a letter dated June 28, 2002, the DEA informed Burman that he had 20 days to file a petition for remission or mitigation. The letter was sent to Shirley Burman's address, where someone named Eric Johnson signed for it.[62]\nOn July 15, 2002, Burman requested remission of the administrative forfeiture.[63] In a letter dated October 22, 2002, the DEA denied Burman's request. The DEA mailed a notice to the FDC-Houston, but it was returned.[64] The DEA apparently re-sent the denial on May 8, 2003 to:\n(i) Shirley Burman's address, where Eric Johnson signed for it.\n(ii) The MCAC, where Theresa Williams signed for it.\n*676 2. Record is Insufficient with Respect to the $6,000\nAfter the DEA finalized the forfeiture of the $6,000 on March 11, 2002, it continued to send Notices of Forfeiture to Burman and even entertained a request for remission. The government has not briefed whether the Court should limit its inquiry to the notice provided before the forfeiture, or whether the Court should also evaluate the notice sent after the forfeiture.\nEven if the Court limits its inquiry to the notice provided before the forfeiture, the government must provide supplemental briefing. The government has provided no evidence that Burman knew of the pending forfeiture in enough time to file a timely claim. Moreover, the government has not shown that the Notices issued before the forfeiture were \"reasonably calculated\" to reach Burman in prison. Burman apparently was not at the FDC in Houston in July 2001, when the first Notice of Forfeiture was delivered.[65] This leaves the Notice of Forfeiture sent to MCAC on November 26, 2001 and signed for by \"Karen Gardner.\" What is missing is evidence that (i) Burman was incarcerated in the MCAC when the letters arrived, (ii) Karen Gardner was a prison official, and (iii) the mail procedures at the MCAC were adequate.\nThe Court may also be required to consider the adequacy of the Notices sent after the property was forfeited. If it is, then the government must explain why it should prevail even though these Notices appear to have been inadequate,[66]\nThe government must supply the requested information before the Court can render a decision. Accordingly, the Court will RESERVE JUDGMENT on Burman's motion for the return of the $6,000.\nE. $824 in U.S. Currency (DEA Asset I.D. No 01-DEA-393676)\n1. History of Notices with Respect to the $824\nOn July 9, 2001, the DEA sent written Notice of Forfeiture for $824 by certified mail, return receipt requested, to the following addresses:\n(i) 14407 Sequoia Bend Boulevard, Houston, Texas, where Burman resided prior to his arrest. The Notice was returned unclaimed.[67]\n(ii) The Law Offices of Ronald Green, Esq. in Houston, Texas. Green had at one time represented Burman in a criminal case. \"Larry V. Green\" signed for the Notice.[68] On July 16, 2001, Ronald Green informed the DEA that he was no longer Burman's counsel and requested that correspondence be directed to the United States Marshal in Baltimore.[69]\n(iii) The Federal Detention Center in Houston, Texas (\"FDC-Houston\"). A person whose name is illegible signed for the Notice on July 17, 2001, but the Notice was stamped \"Returned to Sender.\"[70]\n*677 On February 12, 2002, the DEA sent another Notice of Forfeiture to:\n(i) The Maryland Correctional Adjustment Center (\"MCAC\"). The Notice was returned unclaimed.[71]\n(ii) The Law Offices of Thomas Saunders. Saunders had been appointed as Burman's trial counsel in Burman's criminal case on October 5, 2001. Steven Spencer signed for the Notice on February 15, 2001.[72]\nOn May 17, 2002, the DEA sent a third Notice of Forfeiture, this time to\n(i) 911 Dartmouth Glen Way, Baltimore, Md. This is the address of Burman's mother, Shirley Burman. The Notice was returned unclaimed.[73]\n Wicomico County Jail in Salisbury, Md.\n The Notice was returned unclaimed.[74]On August 2, 2002, the DEA sent a fourth Notice of Forfeiture to FDC-Houston. A person named \"Stinebuck\" signed for it on August 8, 2002, but the Notice was then stamped \"Returned to Sender.\"[75]\nOn September 26, 2002, the DEA sent a fifth Notice of Forfeiture to the Central Virginia Regional Jail (\"CVRJ\") in Orange, Virginia. Someone wrote \"Not Here\" on the envelope and returned it to the DEA.[76]\nOn November 29, 2002, the DEA sent a sixth Notice of Forfeiture to the MCAC. The certified mail receipt was returned unsigned.[77]\nOn December 11, 2002, Burman, writing from the MCAC, challenged the forfeiture of the $824 and \"all forfeiture property\"; the claim was sworn, subject to penalties of perjury.[78] The DEA treated the letter as a request for judicial forfeiture proceedings for the $824 and referred the case to the United States Attorney for the District of Maryland. A letter informing Burman of the status of his claim was sent to the MCAC;[79] \"Jessica Gandee\" signed for it on January 27, 2003.[80]\nOn February 11, 2003, Assistant United States Attorney Christopher Romano drafted a letter offering to settle with Burman, but the government has provided no evidence that it ever sent the letter to him.\n2. DEA Must Return the $824\nBurman requested judicial forfeiture proceedings for the $824 in December 2002. The government had 90 days to file a complaint for forfeiture in federal district court or obtain a criminal indictment alleging that the property was subject to forfeiture.[81] It did not do so. The settlement offer does not qualify as a complaint. Accordingly, Burman's motion to set aside the forfeiture of the $824 is GRANTED.\nIV. Conclusion\nFor the reasons stated herein, the Court will, by separate Order:\n(i) VACATE the Order dated August 14, 2006;\n\n*678 (ii) GRANT Burman's motion to set aside the forfeiture of the $824;\n(iii) RESERVE JUDGMENT on Burman's motion for the return of the:\n(a) motorcycle,\n(b) jewelry,\n(c) $15,000, and\n(d) $6,000.\nNo later than February 28, 2007, the government shall submit the requested evidence and briefing. Burman will have until March 14, 2007 to respond. Because of the age of this case, the Court will not extend these deadlines, which provide ample time for the parties to supply the necessary factual and legal authority; and\n(iv) DIRECT the Clerk to MAIL a copy of this Order and the accompanying Memorandum to Burman.\n\nORDER\nPending before this Court is Allah Burman's (\"Burman\") Motion for Return of Property. For the reasons stated in the Memorandum of even date, the Court hereby:\n(i) VACATES the Order dated August 14, 2006;\n(ii) GRANTS Burman's motion to set aside the forfeiture of the $824;\n(iii) RESERVES JUDGMENT on Burman's motion for the return of the:\n(a) motorcycle,\n(b) jewelry,\n(c) $15,000, and\n(d) $6,000.\nNo later than February 28, 2007, the government shall submit the requested evidence and briefing. Burman will have until March 14, 2007 to respond. Because of the age of this case, the Court will not extend these deadlines, which provide ample time for the parties to supply the necessary factual and legal authority; and\n(iv) DIRECTS the Clerk to MAIL a copy of this Order and the accompanying Memorandum to Burman.\nIt is so ORDERED.\nNOTES\n[1] Each Notice is labeled \"Notice of Seizure.\" For purposes of clarity, the Court will use the term \"Notice of Forfeiture.\"\n[2] 28 C.F.R. \u00a7\u00a7 9.1-9.9. Claimants are eligible for remission of the forfeiture in some circumstances. They may, for example, establish that if they are \"innocent\" within the terms of the underlying forfeiture statute. 28 C.F.R. \u00a7 9.5(a). Claimants who are not entitled to remission but who can show that they were not involved in the underlying offense and that the forfeiture would cause them extreme hardship may be entitled to mitigation. 28 C.F.R. \u00a7 9.5(b).\n[3] See 18 U.S.C. \u00a7 983(e)(5) (\"A motion under this subsection shall be the exclusive remedy for seeking to set aside a declaration of forfeiture under a civil forfeiture statute.\"); see also United States v. Minor, 228 F.3d 352, 355-57 (4th Cir.2000); Ibarra v. United States, 120 F.3d 472, 474-76 & n. 4 (4th Cir.1997).\n[4] 18 U.S.C. \u00a7 983(a)(1)(F).\n[5] Deciding whether the government's efforts were reasonable requires a \"context-specific inquiry.\" Minor, 228 F.3d at 358.\n[6] The Court previously issued a Memorandum and Order granting Burman's motion with respect to $824, denying it with respect to the jewelry and $6,000, and ordering further briefing on the motorcycle and $15,000 (Docket No. 10). In retrospect, the Court concludes that this Order was based on an inadequate legal and factual basis. Accordingly, the Court will VACATE the August 14th Order in its entirety.\n[7] The claim must \"(i) identify the specific property being claimed; (ii) state the claimant's interest in such property; and (iii) be made under oath, subject to penalty of perjury.\" 18 U.S.C. \u00a7 983(2)(C).\n[8] If the government wishes to pursue this option, it should explain whether it is first required to return the property to Burman under \u00a7 983(a)(1)(F).\n[9] Government's Supplemental Briefing (hereinafter \"Govt. Supp. Briefing\"), Ex. 7 (Docket No. 15).\n[10] The DEA published announcements of the seizure of the motorcycle and the other contested items in The Wall Street Journal for three consecutive weeks during the summer of 2001. The government does not contend that these advertisements were sufficient by themselves to notify Burman of the seizure.\n\nSee Government's Response (hereinafter \"Govt. Resp.\"), Ex. 154 (Docket No. 3); Govt. Supp. Briefing, Ex. 8. Moreover, the Fourth Circuit has stated that notice by publication while a person is imprisoned is a \"mere gesture\" and constitutionally inadequate. Minor, 228 F.3d at 358-59.\n[11] Govt. Supp. Briefing, Ex. 9.\n[12] Govt. Supp. Briefing, Ex. 10.\n[13] Govt. Supp. Briefing, Ex. 11.\n[14] Govt. Supp. Briefing, Ex. 11.\n[15] Govt. Supp. Briefing, Ex. 11.\n[16] Govt. Supp. Briefing, Ex. 15.\n[17] Govt. Supp. Briefing, Ex. 15.\n[18] Govt. Supp. Briefing, Ex. 15, 16.\n[19] Govt. Supp. Briefing, Ex. 16, 17.\n[20] Govt. Supp. Briefing, Ex. 21.\n[21] Govt. Supp. Briefing, Ex. 20.\n[22] Govt. Supp. Briefing, Declaration of Douglas A. Cash.\n[23] To reiterate, when attempting to serve notice on an incarcerated person, the government must (i) send a certified letter, return receipt requested, to the facility where the prisoner is housed, (ii) show that a prison official signed for the letter, and (iii) provide evidence that the facility's mail procedures were \"reasonably calculated\" to ensure that prisoners would receive their mail. Minor, 228 F.3d at 358.\n[24] Govt. Resp., Ex. 143.\n[25] In response to Notices of Forfeiture for other items, Green had already informed the DEA that he was no longer Burman's counsel and requested that correspondence be directed to the United States Marshal in Baltimore. (Govt.Supp.Briefing, Ex. 7).\n[26] Govt. Resp., Ex. 156.\n[27] Govt. Resp., Ex. 157.\n[28] Govt. Supp. Briefing, Ex. 9.\n[29] Govt. Supp. Briefing, Ex. 11.\n[30] Govt. Supp. Briefing, Ex. 11.\n[31] Govt. Supp. Briefing, Ex. 11.\n[32] Govt. Supp. Briefing, Ex. 15.\n[33] Govt. Supp. Briefing, Ex. 15, 16.\n[34] Govt. Supp. Briefing, Ex. 16, 17.\n[35] Govt. Supp. Briefing, Ex. 21.\n[36] Govt. Supp. Briefing, Ex. 20.\n[37] Govt. Resp., Ex. 159.\n[38] Govt. Resp., Ex. 160.\n[39] Govt. Resp., Ex. 161; Govt. Supp. Briefing, Ex. 22.\n[40] Govt. Resp., Ex. 162.\n[41] In his motion, Burman seeks the return of $26,000 in United States currency, but provides no DEA identification number. The government has supplied an affidavit stating that DEA records do not reflect the seizure of $26,000 from Burman. (Docket No. 3, Ex. 4) The government acknowledges, however, that agents seized $21,000 from the house at 14407 Sequoia Bend: $6,000 from one safe and $15,000 from another. The Court will assume that this is the money to which Burman refers. In this section, the Court will address the $15,000. It will address the $6,000 in another section.\n[42] Govt. Supp. Briefing, Ex. 27.\n[43] Govt. Supp. Briefing, Ex. 29.\n[44] Govt. Supp. Briefing, Ex. 7.\n[45] Govt. Supp. Briefing, Ex. 31.\n[46] Govt. Supp. Briefing, Ex. 39.\n[47] Govt. Resp., Ex. 100-103; Govt. Supp. Briefing, Ex. 38-41.\n[48] Govt. Supp. Briefing, Ex. 42.\n[49] Govt. Supp. Briefing, Ex. 43.\n[50] Although it is unclear from what the government submitted, the DEA may also have resent the notice to Burman in Orange, Virginia in October 2002. The DEA identification number for the $15,000 appears on the certified mail receipt that was signed by an individual named Roy Lewis. Govt. Supp. Briefing, Ex. 22.\n[51] See lbarra, 120 F.3d at 475-76.\n[52] Although Burman filed a claim on February 6, 2002, it was untimely.\n[53] Docket No. 15.\n[54] Burman did not respond to either of the denial notices. Further, the government has not shown that the denial notices were \"reasonably calculated\" to reach Burman in prison. The denial notice issued on February 27, 2002 was sent to Burman's attorney, Thomas Saunders. Under Minor, notice sent to an attorney is insufficient. This leaves the denial notice sent to MCAC on May 8, 2003. Although \"Theresa Williams\" signed for the notice, the government has not shown that (i) Burman was incarcerated at the FDC-Houston on May 13, 2003, when the notice arrived, (ii) Theresa Williams was a prison employee, and (iii) MCAC had in place adequate procedures to ensure that prisoners received their mail.\n[55] Govt. Resp., Ex. 89.\n[56] Govt. Resp., Ex. 91.\n[57] Govt. Supp. Briefing, Ex. 7.\n[58] Govt. Resp., Ex. 93.\n[59] Govt. Resp., Ex. 103.\n[60] Govt. Resp., Ex. 101.\n[61] Govt. Resp., Ex. 104.\n[62] Govt. Resp., Ex. 110, 111.\n[63] Govt. Resp., Ex. 112.\n[64] Govt. Resp., Ex. 113, 114.\n[65] Docket No. 15.\n[66] The Notice of Forfeiture sent to the Wicomico County Jail on May 15, 2002 was returned unclaimed. The second Notice, sent to Burman's mother, was also inadequate because the DEA was required to send notice to Burman in jail. The government has not otherwise shown that Burman knew of the seizure in time to file a timely claim. Although Burman did file a claim on or around June 21, 2002, the DEA denied it as untimely.\n[67] Govt. Supp. Briefing, Ex. 46.\n[68] Govt. Supp. Briefing, Ex. 49.\n[69] Govt. Supp. Briefing, Ex. 7.\n[70] Govt. Supp. Briefing, Ex. 51.\n[71] Govt. Supp. Briefing, Ex. 53.\n[72] Govt. Supp. Briefing, Ex. 55.\n[73] Govt. Supp. Briefing, Ex. 57.\n[74] Govt. Supp. Briefing, Ex. 59.\n[75] Govt. Supp. Briefing, Ex. 61.\n[76] Govt. Supp. Briefing, Ex. 63.\n[77] Govt. Supp. Briefing, Ex. 64.\n[78] Govt. Supp. Briefing, Ex. 68.\n[79] Govt. Supp. Briefing, Ex. 67.\n[80] Govt. Supp. Briefing, Ex. 65.\n[81] 18 U.S.C. \u00a7 983(a)(3) The government \"may not take any further action to effect the civil forfeiture of such property in connection with the underlying offense.\" 18 U.S.C. \u00a7 983(a)(3)(B).\n"} -{"text": "GROVER SELLRRS AUSTIN PI.TEXAS\n\n\n This Opinion Overrules Opinion\n #o-834 and Overrules o-1447 In\n part.\n Honorable R. C . Neaves\n County Auditor, Grayson County\n Sherman, Texas\n Dear Sir: Opfnion No. O-5951\n Re: Salaries of various deputies of\n the County Tax-Assessor Collec-\n tor.\n Your letter of April 7, 1944, requesting the opinion\n of this department on the questions stated therein, is, in\n part, as follows :\n \u201c1 o May the County Auditor approve\u2019warrants\n drawn on the Grayson County OffLcers\u2019 Salary Fund,\n payable to the deputy or deputies working in the\n branch office of\u2019the Assessor and Collector of Taxes\n in excess of an aggregate total of $1,200.00 for any\n one calendar year?\n \u201cFor your consideration I submit the following\n lnformation :\n \u201c\u2018The Assessor and Collector of Taxes of Grayson\n County, Texas, with the consent and approval of the\n Commissioners\u2019 Court, maintains a branch office in\n Denison, a city in Grayson County other than the county\n seat. The city of Denlson is located about ten miles\n from Sherman, the county seat, and a great volume of\n business is handled by the deputies stationed in the\n branch office there. Their work consists of collect-\n ing and issuing receipts for property taxes, issuing\n poll tax receipts, registering motor vehicles and is-\n suing license plates therefor. According to the last\n Federal census, Grayson County had a~population of\n 69,499 inhabitants, and the city of Denison had a\n population of 15,581 inhabitantsa\u2019\n \u201cAt the January 1944 Term of the Commissioners\u2019\n Court, the Assessor and Collector of Taxes of Gragson\n County, Texas, submitted his application for deputy\n hlre for the operation of the above mentioned branch\n office for the year 1944, same being approved as pre-\n sented by the Commissioners\u2019 Court as follows:\n \u2018.\n\fHonorable R.C. Neaves, page 2 o-5951\n\n\n \"One full time deputy at an annual salary of $1,440.00\n \"One deputy for four months @ $85.00 per month 340.00\n \"One deputy for month of January 150.00\n \"One deputy for half of month of January\n \"One poll writer for month of January 782$E\n \"One poll writer for half month of January 41:25\n \"Total deputy hire approved for the branch\n office for the year $2,128.75\n \"In other words, would it be mandatory upon the\n County Auditor to refuse to sign a county warrant drawn\n on the County Officers' Salary Fund, in payment of com-\n ensation to the above'mentioned deputies, after the\n $ 1,200.OO has been exhausted, regardless of what portion\n of the year is left?\n \"2. May the County Auditor approve a county war-\n rant in payment of daily travel expense for a deputy\n tax assessor and collector going from Sherman, the\n county seat, to Denison and return, while working in\n said branch office? * * *'\n Article 7256, Vernon's Annotated Civil Statutes, among\nother things, provides, in effect, that in all counties contain-\ning a city or town, other than the county seat, which has in\nexcess of 7,000 inhabitants according to the last Federal Census,\nthe assessor and collector of taxes, withthe consent and ap-\nproval of the commissioners' court, may appoint a deputy assis-\ntant collector of taxes in such town or city,\"who shall have the\nright to collect taxes from all persons who desire to pay their\ntaxes to him, and to issue a valid receipt therefor, and that\nsuch deputy is authorized to receive a fee of not exceeding\ntwenty-five cents when receipt issued covers property taxes, and\nthat such deputy shall receive no other compensation for his\nservices, and that such deputy shall not retain more than $1,200\nfor any one calendar year, and the balance, if any, shall be\ndeposited to the credit of the General Fund of the county.\n Section 61, Article 16 of the State Constitution, pro-\nvides:\n \"All district officers of the State of Texas\n and all county officers in counties having a popula-\n tion of twenty thousand or more, according to the\n then last preceding Federal Census, shall from the\n first day of January and thereafter subsequent to\n the first regular or special sessi~onof the Legisla-\n ture after the adoption of this resolution, be com-\n pensated on a salary basis. In all counti~esin\n\fHonorable R. C. Neaves, page 3 o-5951\n\n\n\n this State, the commissioners court shall be au-\n thorized to determine whether precinct officers shall\n be compensated on a fee basl.sor on a salary basis;\n but in counties having a populati,,on\n of less than\n twenty thousand, according to the then last preced-\n ing Federal Census, the commissioners\u2019 Court shall\n also have the authority to determine whether county\n officials shall be compensated on a fee basis or on\n a salary basis.\n \u201cAll fees earned by district, county and pre-\n cinct officers shall be paid i.ntothe county treasury\n where earned for the a,ccountof the proper fund, pro-\n vided that fees incurred by the State, county and any\n municipality, or in case where a pauper\u2019s oath is filed,\n shall be paid into the county treasury when collected\n and provided that where any officer is compensa,ted\n wholly on a fee basis such fees may be retained by\n such officer or paid into the treasury of the county\n as the Commissioners\u2019 Court may direct. All Notarles\n Public, county surveyors and public weighers shall con-\n tinue to be compensated on a fee basis.\u201d\n Section 1 of Article 3912e, Vernon\u2019s Annotated Civil\nStatutes, prov:,des:\n \u201cNo district officer shall be paid by the\n State of Texas any fees or commission for any serv-\n ice performed by him; nor shall the State or any\n county pay to any county officer in any county con-\n taining a population of twenty thousand (20,000)\n inhabitants or more according to the last preceding\n Federal Census any fee or commission for any service\n by him performed as such officer; provided, however,\n that the assessor and collector of taxes shall continue\n to collect and retain for the benefit of the Officers\u2019\n Salary Fund or funds hereinafter provided for, all fees\n and commissions which he is authorized under law to\n collect; and it shall be his duty to account for an to\n pay all such monies received by him into the fund or\n funds created and provided for under the provisions\n of this Act; provid,edfurther, that the provisions of\n this Section shall not affect the payment of costs In\n civil cases by the State, but all such costs so paid\n shall be accounted for by the officers collecting the\n same, as they are requ.iredunder the provisions of this\n Act to account for fees, commissions and costs collected\n from private parties .\u201d\n Section 5 of Article 3912e, Vernon\u2019s Annotated Civil\nStatutes, reads, in part, as follows:\n\f . --\n\n\n\n\nHonorable R.C, Neaves, page 4 o-5951\n\n\n\n \"It shall be the duty of all officers to charge\n and collect in the manner authorized by law all fees\n and commissions which are permitted by law to be as-\n sessed and collected for all official service performed\n by them. As and when such fees are collected they shall\n be deposited in the Officers' Salary Fund, or funds pro-\n vided in this Act, * + *'\n Article 3902, Vernon's Annotated Civil Statutes, is a\ngeneral statute ~regardingthe appointment of deputies, assis-\ntants or clerks of any district,county or precinct office, and\napplies to all counties within the population bracket therein\ncontained. This statute sets out the przedure to be followed\nwhenever a district, county or precinct officer shall require\nthe services of deputies, assistants or clerks in the perform-\nance of his duties, and Section 4 of this Article reads as\nfollows:\n \"In counties having a population of sixty\n thousand and one 60,001) and not more than one\n hundred thousand I100,000) inhabitants, first as-\n sistant OP chief deputy not to exceed Twenty-four\n Hundred ($2400,00) Dollars per annum; other assist-\n ants, deputies or clerks not to exceed Twenty-one\n Hundred ($2100,00) Dollars per annum each.\"\n In view of the foregoing statutory and constitutional\nprovisions, it is the opinlon of this department, that the\ndeputy assessor and collector of taxes in the branch office\nmentioned in your inquiry, mst pay in all fees collected under\nArticle 7256 to the Officers' Salary Fund. The deputy in the\nbranch office must be paid out of the Officers' Salary Fund of\nsaid county, and the maximum amount of his compensation cannot\nexceed $2,100 per annum.\n It is our further opinion, in view of the foregoing\nstatutory provisions and Section 61, Article 16 of the Consti-\ntution, that Article 3902 supersedes Article 7256 insofar as\nthe salary of the deputy in the branch office is concerned.\n The full time deputy in the branch office can receive\nany compensation for his services as set by the commissioners'\ncourt provided, of course, that his compensation does not ex-\nceed $2,100 per annum. The County Auditor would have no legal\nright to refuse to sign a county warran,tdrawn on the Officers'\nSalaryFund in the payment of compensation to such deputy whose\nsalary or compensation has been fixed by the commissioners'\ncourt at $1440 per annum.\n Article 2971, Vernon's Annotated Civil Statutes, pro-\nvides:\n\fHonorable R.C. Neaves, page 5 0 -5951\n\n\n\n \"In all counties containing a city of ten\n thousand inhabitants or more, other then the county\n seat, such collector shall have a duly authorized\n and sworn deputy to represent him for the purpose\n of accepting poll taxes and giving receipts therefor,\n who shall keep his office for such purpose at some\n convenient place in such city during the entire\n month of January of each year, and he shall publish\n four weeks notice of the authority of such deputy\n and the location of the office.\"\n The foregoing statute authorizes the county tax assessor\nand collector to have duly authorized and Sworn deputy to rep-\nresent him for theourpose of accepting poll taxes and giving\nreceipts therefor in a city of ten thousand inhabitants or more,\nwho shall keep his office for such purpose at some convenient\nplace in said city during the entire month of January. With\nreference to the compensation of this deputy, or deputies; it\nis our opinion that such deputy or deputies, acting under the\nprovisions of Article 2971, would.be compensated under the ap-\nplicable provisions of Article 3902, Vernon'3 Annotated Civil\nStatutes. The compensation of these deputies for the month of\nJanuary would be payable out of the Officers' Salary Fund.\n In answer to your question regarding the traveling ex-\npenses of the deputy assessor and collector of taxes in the\nbranch office mentioned in your letter, who travels daily be-\ntween Sherman and Denison, you are advised that it insour opin-\nion that the county is not legally authorized to pay such travel-\ning expenses. Stated another way, we have failed to find such\nstatute authorizing such expenses to be paid out of county funds.\n All other expenditure of county funds for the compensa-\ntion of various deputies employed in the branch office az set\nforth in the order of the commissidners' court are unauthorized\nand the County Auditor has no legal authority to approve such\nclaims. In other words, the deputy in the branch office and\nthe deputy or deputies performing the duties mentioned in Arti-\ncle 2971 can be paid from the Officers' Salary Fund. The other\ndeputies in the branch office cannot legally be paid.\n Our Opinion No. O-834 is hereby expressly overruled and\nour Opinion No. O-1447 is overruled insofar as it conflicts with\nthis oplnion.\n\fHonorable R.C. Neavas, page 6 o-5951\n\n\n Yours very truly\n ATTORNEY GENERAL OF TEXAS\n\n By s/Ardell Williams\n Ardell Williams\n Assistant\nAW:EP:wc\n\nAPPROVED APR'25, 1944\ns/Gee. P. Blackburn\n(Acting) ATTORNEY GENERAL OF TEXAS\nApproved Opinion Committee By s/BwB Chairman\n\f"} -{"text": " United States Court of Appeals,\n\n Eleventh Circuit.\n\n No. 97-5099\n\n Non-Argument Calendar.\n\n UNITED STATES of America, Plaintiff-Appellee,\n\n v.\n\n Heriberto MAHIQUE, Defendant-Appellant.\n\n Aug. 19, 1998.\n\nAppeal from the United States District Court for the Southern District of Florida. (No. 95-Cr-6124-\nWJZ), William J. Zloch, Judge.\n\nBefore TJOFLAT and EDMONDSON, Circuit Judges, and CLARK, Senior Circuit Judge.\n\n PER CURIAM:\n\n Heriberto Mahique appeals his 188-month sentence imposed for conspiracy to possess\n\ncocaine with the intent to distribute.1\n\n Mahique entered into a plea agreement with the government in which the government agreed\n\nnot to oppose Mahique's request for a reduction of his base offense level based on acceptance of\n\nresponsibility if he made a \"full and accurate disclosure to the Probation Office of the circumstances\n\nsurrounding the defendant's relevant conduct.\"2 The government also agreed not to oppose\n\nMahique's request to be sentenced under the safety-valve provision \"if he is eligible, and the Court\n\nmakes appropriate findings regarding the criteria....\"3 Further, the government agreed not to oppose\n\n\n\n\n 1\n 21 U.S.C. \u00a7 846.\n 2\n R1-74 at 3.\n 3\n R1-74 at 4; 18 U.S.C. \u00a7 3553(f)(1)-(5).\n\fMahique's request to be sentenced at the lower end of the applicable Guidelines range, but reserved\n\nthe right to make a recommendation as to the quality and quantity of punishment and to inform the\n\ncourt and probation of all facts relevant to sentencing.\n\n Mahique failed to appear at his original sentencing, and was sentenced only after he was\n\narrested on a fugitive warrant in Mexico and extradited to the United States. Mahique made a full\n\nconfession, but then attempted to retract part of his admissions during his interview for the\n\npresentence report. Based on Mahique's fleeing the jurisdiction and altering his story, the\n\ngovernment opposed a reduction for acceptance of responsibility and sentencing under the\n\nsafety-valve provision. Mahique moved to withdraw his plea and to enforce the plea agreement,\n\narguing that his plea was involuntary and that the government had breached the plea agreement.\n\n Before imposing sentence, the district court asked Mahique and his attorney if they had\n\nanything to say, but neither requested sentencing at the low-end of the range. Based on the\n\ngovernment's request, the district court sentenced Mahique at the high-end of the range finding that\n\nhe had given perjured testimony. The parties said that there were no objections when asked by the\n\ndistrict court after the imposition of sentence.\n\n On appeal, Mahique asserts that the district court erred in not granting his motions to\n\nwithdraw his plea or to enforce specifically the plea agreement, asserting that the government\n\nbreached the plea agreement by opposing his request for a reduction for acceptance of responsibility\n\nand to be sentenced under the safety-valve provision of 18 U.S.C. \u00a7 3553(f). Mahique also asserts\n\nthat the government breached the plea agreement by recommending that he be sentenced at the\n\nhigh-end of the applicable guideline range.\n\n\n\n\n 2\n\f Whether the government has breached a plea agreement is a question of law that this court\n\nreviews de novo.4 If, however, the district court affords a defendant an opportunity to object after\n\nthe imposition of sentence, and he fails to do so, any objections to the sentence are barred absent\n\nmanifest injustice.5 This court equates the manifest injustice inquiry with review for plain error.6\n\n Upon review of the presentencing report, the sentencing transcript, the plea agreement, the\n\ndistrict court's order, and after considering the parties' briefs and the relevant law, we find no\n\nreversible error.\n\n The government did not breach the plea agreement. The government's promise not to\n\noppose Mahique's request for a reduction of sentence was conditioned on Mahique making a full and\n\naccurate disclosure to probation, which Mahique did not do. In the plea agreement the government\n\npreserved its right to support the probation recommendation regarding acceptance of responsibility,\n\nand did so by opposing any reduction. Further, the government had a right to oppose Mahique's\n\nrequest for a reduction based on his less than full and accurate disclosure to probation and his flight\n\nfrom jurisdiction.7\n\n\n\n 4\n United States v. Carlson, 87 F.3d 440, 447 (11th Cir.1996), cert. denied, --- U.S. ----, 118\nS.Ct. 238, 139 L.Ed.2d 169 (1997).\n 5\n United States v. Jones, 899 F.2d 1097, 1103 (11th Cir.), cert. denied, 498 U.S. 906, 111 S.Ct.\n275, 112 L.Ed.2d 230 (1990), overruled on other grounds, United States v. Morrill, 984 F.2d\n1136 (11th Cir.1993).\n 6\n United States v. Newsome, 998 F.2d 1571, 1579 (11th Cir.1993), cert. denied, 510 U.S. 1062,\n114 S.Ct. 734, 126 L.Ed.2d 698 (1994).\n 7\n United States v. Ashurst, 96 F.3d 1055, 1057 (7th Cir.1996) (plea agreement does not\nobligate the government to recommend acceptance of responsibility when defendant committed\noffense when on release pending sentencing); also see United States v. Pace, 17 F.3d 341, 343\n(11th Cir.1994) (district court is authorized to consider subsequent criminal conduct, even if\nunrelated, in determining whether a decrease for acceptance of responsibility is appropriate).\n\n 3\n\f The government's promise in the plea agreement not to oppose Mahique's request to be\n\nsentenced under the safety-valve provision was conditioned on him being eligible for the provision\n\nand the district court finding that he met all criteria for application of the provision. The fifth\n\ncriteria of the safety-valve provision requires that the defendant truthfully provide to the government\n\nall information and evidence he has regarding the offense.8 Because the government argued that\n\nMahique was ineligible for the safety-valve provision since he did not meet the criteria\u2014a condition\n\nof the plea agreement\u2014there was no breach.9\n\n We conclude that the government's opposition to a reduction for acceptance of responsibility\n\nand sentencing under the safety-valve provision did not constitute a breach of the plea agreement.\n\nBecause Mahique never requested to be sentenced at the low-end of the sentencing range, the\n\ngovernment's recommendation that Mahique be sentenced at the high-end of the sentencing range\n\nwas not a breach of the plea agreement.\n\n AFFIRMED.\n\n\n\n\n 8\n 18 U.S.C. \u00a7 3553(f)(5).\n 9\n United States v. Ajugwo, 82 F.3d 925, 928-929 (9th Cir.1996), cert. denied, --- U.S. ----, 117\nS.Ct. 742, 136 L.Ed.2d 680 (1997).\n\n 4\n\f"} -{"text": " Jul 30 2013, 7:30 am\n\n\n\n\nFOR PUBLICATION\n\n\nAPPELLANT PRO SE: ATTORNEYS FOR APPELLEE\n STATE OF INDIANA:\nJ.W.J.\nIndianapolis, Indiana GREGORY F. ZOELLER\n Attorney General of Indiana\n\n KYLE HUNTER\n Deputy Attorney General\n Indianapolis, Indiana\n\n\n IN THE\n COURT OF APPEALS OF INDIANA\n\nIN RE: THE PATERNITY OF Jo.J., )\n )\nJ.W.J., )\n )\n Appellant-Respondent, )\n )\n vs. ) No. 29A05-1209-JP-447\n )\nD.C., )\n )\n Appellee-Petitioner.1 )\n\n\n APPEAL FROM THE HAMILTON SUPERIOR COURT #2\n The Honorable Daniel J. Pfleging, Judge\n Cause No. 29D02-0708-JP-949\n\n\n\n\n1\n The Attorney General participates in this appeal because in the trial proceedings, the State actively\nparticipated in this cause pursuant to Indiana Code section 31-14-4-2. Although the State\u2019s role pursuant\nto this statute is to represent the child in paternity proceedings, we also attribute the State\u2019s arguments to\nD.C. to the extent that their interests are aligned.\n\f July 30, 2013\n\n OPINION\u2013FOR PUBLICATION\n\nBAKER, Judge\n\n J.W.J. (Father), who works as a commissioned salesman, has continuously used\n\n\u201ccreative accounting procedures\u201d for several years to minimize his gross income and\n\nreduce his child support obligation. Appellant\u2019s App. p. 32. Father also has a pattern of\n\naccumulating large arrearages and then paying them when a petition for contempt is filed.\n\n A few years ago, D.C. (Mother) appealed an order reducing Father\u2019s support\n\nobligation based on Father\u2019s alleged decrease in earnings, and this Court reversed the trial\n\ncourt\u2019s determination of Father\u2019s income. Before that appeal was recertified to the trial\n\ncourt, however, Mother requested a temporary modification of support based on our\n\nguidance. After a combined hearing on this petition and on yet another contempt petition\n\nfiled regarding yet another large arrearage, the trial court granted Mother\u2019s request for\n\ntemporary modification, changing Father\u2019s child support obligation to $252.52 per week.\n\nThe final order modifying Father\u2019s support was not issued until the day after our Supreme\n\nCourt denied transfer of Mother\u2019s appeal. The trial court also ordered Father jailed for\n\ncontempt but agreed to release Father upon his payment of a bond equal to six months of\n\nfuture support.\n\n Father challenges numerous aspects of the trial court\u2019s order, including: (1)\n\nwhether the trial court could hold a hearing or issue an order on Mother\u2019s request for a\n\ntemporary support modification while her appeal was still pending; (2) whether the trial\n\n 2\n\fcourt accurately calculated his gross income, Mother\u2019s gross income, and the final child\n\nsupport obligation; and (3) whether the trial court could order him incarcerated for\n\ncontempt when he was current on his child support obligation at the time the order was\n\nmade or issue a bond for future support. Father also requests appellate attorney fees.\n\n We conclude that although the trial court may have erred in considering Mother\u2019s\n\nrequest for \u201ctemporary support\u201d prematurely, it did not err in modifying Father\u2019s child\n\nsupport obligation because the matter had been recertified to the trial court by the time\n\nthe final order was made. Likewise, the figures that the trial court used in arriving at the\n\namount of Father\u2019s new child support obligation were within its discretion based on the\n\nevidence presented. We also conclude that the trial court did not err in jailing Father for\n\ncontempt when Father had been warned multiple times at various hearings that this could\n\noccur if Father failed to strictly comply with his child support obligation and that trial\n\ncourts are statutorily authorized to require a child support obligor to post a bond\n\nguaranteeing future payments of support. Finally, we decline Father\u2019s request for\n\nappellate attorney fees. Accordingly, we affirm the judgment of the trial court.\n\n FACTS2\n\n\n\n2\n We note that Father\u2019s \u201cstatement of case\u201d and \u201cstatement of facts\u201d sections in his brief are replete with\nself-serving facts and argument and thus do not abide by the requirement of our appellate rules to present\nthe facts according to the standard of review appropriate for the judgment being appealed. See Ind.\nAppellate Rule 46(A)(5)-(6); Burrell v. Lewis, 743 N.E.2d 1207, 1209 (noting that a statement of facts\nthat is \u201crife with argument\u201d is \u201cinappropriate\u201d and a violation of our appellate rules).\n\nAlso, during the pendency of this appeal, Father filed two motions asking this Court to consider further\nevidence. The first motion asks us to consider two motions to correct errors that Father filed in July\n2012\u2014one titled Respondent\u2019s Motion to Correct Errors re: Final Order of June 14, 2012, and the other\n 3\n\f Mother and Father have been litigating child support issues concerning their minor\n\nchild, J.B.J., for several years. In July 2010, Father\u2019s weekly child support obligation\n\nwas reduced to $149.54 plus $100 on his $6,970.81 arrearage based on Father\u2019s alleged\n\ndecrease in earnings, and Mother appealed, raising a number of issues. On October 25,\n\n2011, this Court affirmed in part and reversed in part in a memorandum decision. D.C. v.\n\nJ.J., No. 29A02-0708-JP-1111, 957 N.E.2d 213, at *1 (Ind. Ct. App. Oct. 25, 2011).\n\nConcluding that the trial court erred in determining Father\u2019s income for 2010 and by\n\ngranting Father a credit for health insurance premiums for a time period when no\n\ncoverage was being provided to J.B.J., this Court remanded the case for a redetermination\n\nof Father\u2019s income and a recalculation of Father\u2019s support obligation and arrearage. Id. at\n\n*10-12. Our Supreme Court denied transfer on June 20, 2012. D.C. v. J.J., 969 N.E.2d\n\n605 (Ind. 2012).\n\n While Mother\u2019s appeal was pending, Mother requested and received a change of\n\njudge, and the Honorable Daniel Pfleging was appointed as special judge on June 21,\n\n2011. After a hearing in August 2011, Judge Pfleging issued an order that stated in part,\n\n\u201cthe true certainty of the entire days\u2019 [sic] worth of testimony is that [Father] is not\n\npaying support as ordered.\u201d Appellant\u2019s Br. p. 43. Judge Pfleging further admonished\n\nthe parties to obey the court\u2019s orders and advised them that \u201ccontempt is serious and\n\noften results in sanctions which can mean incarceration.\u201d Id. Finally, Judge Pfleging\n\n\n\ntitled Respondent\u2019s Motion to Correct Errors re: Order to Pay Support. As both of these documents were\nalready included in Father\u2019s appendix, we deny Father\u2019s motion to consider filed October 9, 2012.\n 4\n\fchanged the location where the parties were to exchange J.B.J. for parenting time from a\n\nfire station to a nearby gas station.3\n\n On May 25, 2012, the trial court held a consolidated compliance hearing on one of\n\nMother\u2019s prior contempt petitions and on Mother\u2019s request for a \u201ctemporary\u201d child\n\nsupport order to be issued pending a final decision on her appeal. Appellant\u2019s App. p. 21.\n\nAt the hearing, Father admitted that he had only been making support payments of $50\n\nper week since March 15, 2012, and that he had not been paying anything toward his\n\narrearage.\n\n Father, who is a commissioned sales professional, claimed that he had no income\n\nbecause he was negotiating a new contract with Level Solutions and because he had been\n\ninjured in his part-time job at FedEx, which he had started in March 2012. However, in\n\nthe prior two months, Level Solutions had advanced Father a total of $8000, from which\n\nFather\u2019s future commissions were to be reduced as he began making sales for the\n\ncompany. In addition, Father\u2019s earnings while at FedEx were approximately $800.\n\n In 2011, Father did business with Barth Electric and received approximately\n\n$14,000 in personal commissions. Then, beginning in May or June 2011, Father\u2019s wife\n\nbecame the sole owner of Johnston Technology Group, LLC (JTG), and JTG and Level\n\n\n3\n In Father\u2019s second motion to consider, Father asks us to consider the change in the parenting time\nexchange location in his appeal. Father contends that this issue was included as part of the trial court\u2019s\ndenial of his motion to correct errors on August 8, 2012. However, neither of Father\u2019s motions to correct\nerrors denied on that date included the exchange location as an issue. Moreover, as the trial court\u2019s\noriginal order changing the exchange location was issued on August 26, 2011, and Father did not appeal\nthat order, Father\u2019s request to include this issue in his present appeal is not timely. Ind. Appellate Rule\n9(A)(1). Accordingly, Father\u2019s second motion to consider is also denied.\n 5\n\fSolutions entered into \u201ca contract where [Father] was going out and making [sales] calls\n\nand [Father\u2019s wife] was basically running the company.\u201d Tr. p. 98. Father testified that\n\nbecause he was not an owner of JTG, he did not know the value of the Level Solutions\n\ncontract to JTG, and his wife received all of the commissions from that contract and used\n\nthose monies to pay their joint bills so that Father could concentrate on making sales\n\nrather than running a business. An exhibit submitted at the hearing showed that, similar\n\nto Father\u2019s arrangements with Level Solutions at the time of the hearing, JTG had\n\nreceived monthly commission advancements of $4000 each for the months of October\n\n2011, November 2011, and January 2012. However, Father submitted a letter from Level\n\nSolutions indicating that from May 2011 to December 2011, JTG earned only $1,968.72\n\nin actual commissions. Respondent\u2019s Ex. F.\n\n Also in 2011, Father cashed in his IRA, receiving in excess of $58,000 that he\n\nclaimed to have used for living expenses. Father also received $63,000 from the sale of\n\nhis home, but Father reportedly gave all of this money to his ex-wife, from whom he had\n\nseparated in February 2012. Father allegedly obtained additional spending money by\n\nselling off assets, including furniture and small recreational vehicles.\n\n Regarding Father\u2019s expenses, Father testified that he spent $800 monthly on\n\ntransportation costs because he was making cold sales calls all over the state trying to\n\n\u201cramp up a territory.\u201d Tr. p. 101. According to Father\u2019s financial declaration, his other\n\nmonthly expenses totaled $2,411.19. Father also testified that his food costs \u201crange[]\n\nfrom $700.00 to $900.00 bucks a month.\u201d Id. at 51. Father admitted to taking a $5000\n\n 6\n\fvacation in December 2011, but he characterized his expenses as \u201cbare bones living.\u201d Id.\n\nat 110. When asked how he could support these expenses with no income, Father told the\n\ntrial court that he was not behind in his rent but stated that he was considering filing\n\nbankruptcy.\n\n Father also claimed that he was \u201cup to speed\u201d on his child support obligation and\n\narrearage as of February 2012. Tr. p. 109. However, the State presented evidence that\n\nsince January 2012, $2,990.80 in child support had become due, Father had received\n\n$8000 in commission advancements and $800 in other wages, but Father had fallen\n\nfurther behind on his arrearage. More particularly, in the eleven weeks before the\n\nhearing, $1,645.49 became due, but Father paid only $500 of that amount in weekly\n\ninstallments of $50 and had contributed nothing to his growing arrearage, which was\n\n$1,192.64 at the time of the hearing.\n\n Mother testified that she earned approximately $22,000 in 2011 and that she had\n\n$1989 in monthly expenses without accounting for childcare or food. However, Mother\n\nfailed to provide the trial court with a financial declaration.\n\n At the conclusion of the hearing, the trial court asked Mother to submit her\n\nfinancial declaration and Father to submit a child support worksheet before taking the\n\nmatter under advisement. And in the two weeks following the hearing, Father made\n\npayments totaling $1,622.64 to become current on both his weekly support obligation and\n\nthe arrearage.\n\n\n\n 7\n\f The parties reconvened on June 14, 2012, for the pronouncement of the trial\n\ncourt\u2019s decision. The trial court briefly recited the case\u2019s history, including that Father\n\nhad been found in contempt of court three separate times since 2009 for his failure to pay\n\nsupport in a timely and consistent manner, but that other than the contempt findings and\n\nadmonishments to pay support as ordered, no further sanctions had ever been imposed.\n\n In relaying its findings of fact, the trial court noted that \u201c[u]ntil 2012 [Father] had\n\nreduced his arrearage but in 2012 the arrearage had grown by $798.27.\u201d Appellant\u2019s\n\nApp. p. 42. The trial court also expressed concern regarding Father\u2019s accounting\n\npractices, noting that Father \u201cclaims to be unemployed and/or having no income but\n\nspends $800.00 per month in transportation to make cold calls all over the state\u201d and that\n\n\u201cin late 2011 or early 2012 [Father] took a vacation and expended over $5,000 for said\n\nvacation.\u201d Id. at 43.\n\n The trial court determined that Father\u2019s failure to pay his child support obligation\n\ntimely and consistently was \u201cwillful and wanton\u201d because during the time period since\n\nthe last contempt hearing, Father \u201chad resources in which he was able to pay for a\n\nvacation and pay other expenses rather than support.\u201d Id. at 44. And although Father\n\nwas current in his support as of June 14th, the trial court determined that coercive\n\nmeasures were still needed to ensure consistent payment of \u201cfuture support.\u201d Id.\n\nAccordingly, the trial court ordered Father to serve thirty days of incarceration in the\n\nlocal county jail. The trial court also ordered Father to post a $6070 cash bond to be\n\napplied to Father\u2019s support payments and arrearage over the next six months \u201cto take care\n\n 8\n\fof [Father\u2019s] support obligations while he is ramping up his new business.\u201d Tr. p. 172-\n\n73. Father was released when he posted the full bond amount on June 15, 2012.\n\n The trial court issued a formal written order regarding its June 14, 2012 orders on\n\nJune 21, 2012. And in a separate order filed the same day, the trial court further\n\nexplained that it had changed Father\u2019s weekly support obligation to $252.52 per week\n\nbased on its determination that Father\u2019s weekly gross income was $1847. In arriving at\n\nthis income amount, the trial court reiterated its concern that Father \u201cuses creative\n\naccounting procedures and/or numerous corporations to confuse and on some occasions\n\nto actually misstate his income position.\u201d Appellant\u2019s App. p. 32. In particular, the trial\n\ncourt noted that Father has $3270 in monthly expenses but that \u201c[s]omehow, [Father]\n\nmakes his expenses with no income.\u201d Id. at 31. The trial court further stated that it was\n\nattributing a weekly income of $1847 to Father because that amount, though\n\n\u201csubstantially lower than the State\u2019s [worksheet provides] . . . will reflect what he would\n\nhave to earn to meet the expenses that he indicates he has.\u201d Id. at 33.\n\n The trial court attached four child support worksheets to its order\u2014one submitted\n\nby Father, one submitted by the State on behalf of Mother but not signed by her, 4 and two\n\ncreated sua sponte by the trial court. Each worksheet provided for a different child\n\nsupport amount, with those amounts ranging from $95 to $278.77 per week, but the trial\n\n\n\n\n4\n Although the child support worksheet was not signed by Mother, the State based Mother\u2019s income and\nliabilities off Mother\u2019s financial declaration, which Mother had signed under penalty of perjury and\nsubmitted after the conclusion of the May 25, 2012 hearing.\n 9\n\fcourt did not adopt any one worksheet in particular in temporarily modifying Father\u2019s\n\nsupport obligation to $252.52 per week.\n\n Father filed two motions to correct errors, one for each of the court\u2019s final orders,\n\non July 16 and 20, 2012. The trial court denied both motions, and Father now appeals.\n\n DISCUSSION AND DECISION\n\n Father raises numerous issues for our consideration. More particularly, Father\n\nasserts that the trial court lacked jurisdiction to issue a temporary support order while\n\nMother\u2019s appeal was still pending, and that even if the trial court could temporarily\n\nmodify child support during Mother\u2019s appeal, the specific support amount ordered was\n\nnot supported by the evidence. Next, Father claims that the trial court erred when it held\n\nFather in contempt and ordered his incarceration without due process of law. Finally,\n\nFather contends that he is entitled to attorney fees.\n\n We will affirm the trial court\u2019s judgment on an issue of child support unless it is\n\nclearly erroneous, meaning that it is clearly against the logic and effect of the facts and\n\ncircumstances before the court. McGinley-Ellis v. Ellis, 638 N.E.2d 1249, 1252 (Ind.\n\n1994). We consider only the evidence and reasonable inferences supporting the trial\n\ncourt\u2019s judgment and refrain from reweighing the evidence or assessing the credibility of\n\nwitnesses. Hamiter v. Torrence, 717 N.E.2d 1249, 1252 (Ind. Ct. App. 1999). Moreover,\n\nbecause Father is appealing from the denial of two motions to correct error, we note that\n\na trial court\u2019s decision on a motion to correct error \u201ccomes to an appellate court cloaked\n\n\n\n 10\n\fin a presumption of correctness.\u201d Petersen v. Burton, 871 N.E.2d 1025, 1028 (Ind. Ct.\n\nApp. 2007).\n\n I. Jurisdiction to Issue Temporary Support Order\n\n As mentioned above, Father\u2019s first contention is that the trial court lacked the\n\nauthority to modify the existing child support order while Mother\u2019s appeal was pending.\n\nAnd because our Supreme Court did not deny transfer on Mother\u2019s appeal until June 20,\n\n2012, Father asserts that the trial court should never have granted Mother a hearing on\n\nMay 25, 2012, and that all of the orders stemming from evidence presented at that\n\nhearing should be vacated as being issued without subject-matter jurisdiction.\n\n When the trial court was discussing with the parties what was to be addressed at\n\nthe May 25, 2012 hearing, the following colloquy took place:\n\n [Father\u2019s attorney:] We are here on modification?\n\n THE COURT: No, a temporary order, not modification.\n\n [Father\u2019s attorney:] What\u2019s the difference?\n\n THE COURT: I\u2019m not really sure.\n\nTr. p. 148.\n\n Mother offered the following explanation regarding why she had requested a\n\ntemporary support order:\n\n I am largely dependent on $250.00 a week to sustain the bills that this\n family has, and I requested . . . temporary child support to be put in place,\n so that there would not be a lag time between now and the decision that will\n be handed down from the higher courts, and I absolutely need $250.00 a\n week to pay my bills.\n\n 11\n\fId. at 149-50.\n\n As Father suggests, the appeal of a particular issue\u2014here, the amount of Father\u2019s\n\nweekly child support obligation\u2014generally divests the trial court of further jurisdiction\n\nover the issue until the appeal is finalized. Elbert v. Elbert, 579 N.E.2d 102, 114 (Ind. Ct.\n\nApp. 1991). In Harris v. Harris, this Court considered whether the premature filing of a\n\npetition to modify child support made the subsequent modification void. 800 N.E.2d 930\n\n(Ind. Ct. App. 2003). In concluding that it did not, we reasoned that \u201cthe filing of any\n\nsuch premature pleading may subsequently be cured so long as the trial court does not\n\ninvoke jurisdiction of the matter.\u201d Id. at 937. Thus, because the trial court had not\n\nactually modified child support until after the trial court\u2019s judgment was affirmed on\n\nappeal and the matter was recertified to the trial court, at which point the trial court was\n\nonce again vested with jurisdiction over the support issue, there was no error in ordering\n\na prospective modification of support. Id. However, the Harris Court also concluded that\n\nit was error for the trial court to order the modification retroactive to the date of the\n\npremature filing because \u201c[t]o so hold would be to validate without qualification the\n\nfiling of the Petition to Modify as of that date.\u201d Id.\n\n In this case, by requesting \u201ctemporary support,\u201d it is apparent that Mother was\n\nhoping to take premature advantage of certain favorable aspects of our memorandum\n\ndecision in D.C. v. J.J., No. 29A02-0708-JP-1111, 957 N.E.2d 213, at *1 (Ind. Ct. App.\n\nOct. 25, 2011). Specifically, although Mother had petitioned for transfer to our Supreme\n\n\n 12\n\fCourt on other issues that were decided less favorably to her, she wanted the trial court to\n\nproceed to recalculate Father\u2019s income and child support obligation based on the\n\nmemorandum decision\u2019s guidance, even though the matter had not yet been recertified\n\nback to the trial court.\n\n Although, based on Harris, Mother\u2019s request was premature, the trial court\u2019s final,\n\nwritten orders temporarily modifying child support were not issued until June 21, 2012\u2014\n\none day after our Supreme Court denied transfer. These are the orders from which Father\n\nfiled his motions to correct error. Thus, as these orders recalculating Father\u2019s income and\n\nsupport obligation were not issued until after the denial of transfer, the trial court did not\n\nerr in modifying Father\u2019s support obligation prospectively. See Harris, 800 N.E.2d at\n\n937. Moreover, unlike Harris where this Court had affirmed the trial court\u2019s judgment on\n\nappeal, here the trial court was ordered on remand to recalculate Father\u2019s income and\n\nchild support obligation back to 2010. D.C. v. J.J., 957 N.E.2d at *11. Thus, the trial\n\ncourt acted within its discretion to modify Father\u2019s child support obligation effective June\n\n14, 2012.5\n\n\n\n\n5\n During the pendency of this appeal, the trial court also recalculated Father\u2019s income and child support\nobligations for 2010, 2011, and 2012. After an order was issued on March 18, 2013, Father filed a\n\u201cMotion to Vacate Order of Lower Court and to Set Emergency Hearing for Child Support\u201d on May 9,\n2013, asking us to conclude that the trial court was once again divested of jurisdiction to consider these\nissues as a result of the present appeal. However, because the orders currently being appealed did not\nrecalculate Father\u2019s 2010, 2011, or 2012 child support obligations prior to June 14, 2012, as the trial court\nhad been ordered to do on remand, Father\u2019s income and child support obligations for those periods\nremained within the jurisdiction of the trial court during the pendency of this appeal. If Father wished to\nappeal the trial court\u2019s order issued March 18, 2013, he should have filed a separate notice of appeal.\nFather cannot include his challenges to that order in the present appeal. Father\u2019s motion is hereby denied.\n 13\n\f We note for the purpose of clarification that a trial court is not precluded from\n\nentertaining a separate and distinct petition to modify child support even if a previous\n\nsupport order is still being appealed. See Clark v. State, 727 N.E.2d 18, 21 (Ind. Ct. App.\n\n2000) (explaining that a trial court retains jurisdiction notwithstanding an appeal to\n\n\u201cpreside over matters which are independent of and do not interfere with the subject\n\nmatter of the appeal\u201d). Indiana Code section 31-16-18-1(b) provides that, subject to\n\ncertain exceptions not relevant here, child support orders may be modified either:\n\n (1) upon a showing of changed circumstances so substantial and continuing\n as to make the terms unreasonable; or\n\n (2) upon a showing that:\n\n (A) a party has been ordered to pay an amount in child support that\n differs by more than twenty percent (20%) from the amount that would\n be ordered by applying the child support guidelines; and\n\n (B) the order requested to be modified or revoked was issued at least\n twelve (12) months before the petition requesting modification was\n filed.\n\n Because a statutory right to modify support exists any time the elements of either\n\nsubsection are met, the trial court retains continuing jurisdiction to consider separate and\n\ndistinct petitions to modify child support regardless of whether a prior order is still on\n\nappeal. See Clark, 727 N.E.2d at 21 (holding that a trial court retained jurisdiction to\n\nconsider whether to revoke a defendant\u2019s probation during his direct criminal appeal\n\nbecause the revocation issue was sufficiently distinct from the issues to be decided in the\n\nappeal). We agree with the State that \u201c[f]or the best interest of the child and efficiency of\n\n\n 14\n\fthe courts, the trial court must maintain prospective jurisdiction to alter support orders\n\nwhen a change in circumstances warrants it.\u201d Appellee\u2019s Br. p. 10.\n\n Here, however, Mother requested temporary support based on the intermediate\n\nappellate decision without waiting for the matter to be recertified to the trial court.\n\nMoreover, the trial court did not include in its orders findings that would have supported\n\nmodification under Indiana Code section 31-16-18-1(b)(1) or (2), and indeed, the trial\n\ncourt told the parties specifically that it was not considering Mother\u2019s petition for\n\ntemporary support as a separate petition to modify child support. Tr. p. 148. Therefore,\n\nwe do not consider Mother\u2019s request to have been a separate and distinct request for\n\nsupport modification.\n\n II. Parents\u2019 Income and Amount of Support\n\n Father next claims that the trial court\u2019s $252.52 weekly child support order was\n\ninconsistent with the evidence presented at the hearing. In making this claim, Father\n\ncontends that the trial court erred in its calculations of both his income and Mother\u2019s\n\nincome and in its calculation of the total amount of weekly child support due.\n\n A. Father\u2019s Income\n\n Regarding Father\u2019s income, the trial court stated that \u201cit is almost impossible to\n\ndetermine the true and accurate income being earned by [Father]\u201d because of how he\n\npresents his income information. Appellant\u2019s App. p. 43. Nevertheless, the trial court\n\ndefended its decision to attribute a gross weekly income of $1847 to Father because that\n\namount, although \u201csubstantially lower than the State\u2019s [worksheet provides] . . . will\n\n 15\n\freflect what he would have to earn to meet the expenses that he indicates he has.\u201d Tr. p.\n\n33. Father claims that the trial court erred by claiming to have arrived at this income\n\namount based on his expenses when in actuality the amount is just an average of the $925\n\nthat Father claimed on his child support worksheet and the $2769 alleged by the State.\n\nMoreover, Father maintains that because the trial court found that he had $3270 in\n\nmonthly expenses, he actually needed even less than his claimed $925 per week to meet\n\nall of his expenses, and thus, the trial court\u2019s imputation of $1847 in gross weekly income\n\nto him on the basis of his expenses was clearly erroneous.\n\n Our child support guidelines broadly define weekly gross income \u201cto include not\n\nonly actual income from employment, but also potential income and imputed income\n\nfrom \u2018in-kind\u2019 benefits.\u201d Glover v. Torrence, 723 N.E.2d 924, 936 (Ind. Ct. App. 2000).\n\nAnd in the case of irregular income such as that earned by Father, the guidelines\n\nrecognize that the calculations necessary to arrive at a just result are \u201cvery fact sensitive.\u201d\n\nInd. Child Support Guideline 3A, cmt. 2(b). Moreover, the guidelines urge judges and\n\npractitioners to \u201cbe innovative in finding ways to include income that would have\n\nbenefited the family had it remained intact, but be receptive to deviations where reasons\n\njustify them.\u201d Id. To that end, \u201c[a] trial court has wide discretion with regard to\n\nimputing income to ensure the child support obligor does not evade his or her support\n\nobligation.\u201d Miller v. Sugden, 849 N.E.2d 758, 761 (Ind. Ct. App. 2006).\n\n It is apparent that the trial court was well within its discretion to attempt to\n\ncalculate Father\u2019s actual income based upon his expenses. See Glover, 723 N.E.2d at 937\n\n 16\n\f(holding that a trial court did not err in imputing income to a father based on his reported\n\nexpenses, especially in light of \u201cFather\u2019s history of under representing his income and the\n\nlarge discrepancy between his reported income and his expenses\u201d). The question\n\nremains, however, whether the evidence supports the amount at which the trial court\n\narrived. Father is correct that $1847 is the average of the $925 that Father claimed to be\n\nhis income and the $2769 that the State had attributed to him in its worksheet. But it\n\ndoes not necessarily follow that this amount was not supported by evidence in the record.\n\n Contrary to Father\u2019s assertions, the trial court did not actually find that he had only\n\n$3270 in monthly expenses but rather that Father\u2019s claimed expenses totaled \u201cin excess\n\nof $3270.\u201d Appellant\u2019s App. p. 32 (emphasis added). In fact, Father\u2019s financial\n\ndeclaration listed monthly expenses totaling $3,211.19 and weekly expenses, including\n\nweekly court-ordered child support for his prior children, of $238.02. Ex. A. Converting\n\nFather\u2019s separately listed weekly expenses into monthly expenses, we arrive at additional\n\nmonthly expenses of $1,023.49. Thus, according to Father\u2019s own financial declaration,\n\nhis regular monthly expenses equaled $4,234.68. Moreover, Father admitted to having\n\nadditional expenses at the May 25, 2012 hearing that he had left off of his financial\n\ndeclaration, including additional food costs of up to $300 per month, taking his children\n\nto the movies, and taking a $5000 vacation within the six months prior to the hearing. Tr.\n\np. 51, 60, 103-04.\n\n Under these circumstances and taking into consideration the trial court\u2019s finding\n\nthat it is \u201calmost impossible to determine\u201d Father\u2019s true income, appellant\u2019s app. p. 43,\n\n 17\n\fwe cannot now conclude that the trial court erred by arriving at Father\u2019s income by\n\naveraging the amount Father claimed to be his income and the amount attributed to him\n\nby the State. See Elliott v. Elliott, 634 N.E.2d 1345, 1349 (concluding that a trial court\n\ndid not err in imputing income to a father above what he reported on his child support\n\nworksheet when there was evidence that the father may not have reported all of his\n\nincome); see also Walters v. Walters, 901 N.E.2d 508, 513-14 (Ind. Ct. App. 2009)\n\n(upholding the trial court\u2019s calculation of a mother\u2019s income seemingly based on an\n\naverage of the amounts alleged by both parties).\n\n B. Mother\u2019s Income\n\n Regarding Mother\u2019s income, Father claims that the trial court was without an\n\nadequate basis to arrive at a weekly gross income amount of $379 for Mother because\n\nMother failed to provide any evidence during the hearing to support the business\n\nexpenses that she claimed on her financial declaration and because she did not sign the\n\nchild support worksheet submitted on her behalf by the State. Moreover, Father argues\n\nthat the trial court erred by giving Mother credit for child care expenses. Finally, Father\n\nargues that the trial court should have imputed additional income to Mother because she\n\nhas the potential to earn $70,000 per year.\n\n There is some support for Father\u2019s contention that a trial court may not base an\n\naward of child support on an unsigned and unverified child support worksheet. In Cobb\n\nv. Cobb, this Court reversed a trial court\u2019s modifying child support when the order \u201ccould\n\nonly have been based on [the father\u2019s] unsigned and unverified worksheet . . . , which\n\n 18\n\fcontradicted his trial testimony as to his income.\u201d 588 N.E.2d 571, 574-75 (Ind. Ct. App.\n\n1992). However, in this case, the trial court\u2019s determination of Mother\u2019s income was\n\nsupported, rather than contradicted, by evidence in the record.\n\n More specifically, Mother testified at the May 25, 2012 hearing that she owns two\n\nbusinesses and earns \u201croughly $20,000.00 a year.\u201d Tr. p. 155, 158. In 2011, Mother\n\nearned $22,000 in total gross income and had about $4000 in related business expenses.\n\nTr. p. 158-59.\n\n Mother also signed and submitted both a child support worksheet and a financial\n\ndeclaration. The worksheet, which Mother submitted at the hearing, indicated a weekly\n\ngross income of $461.54, but it did not specifically indicate whether Mother had\n\ndeducted any business expenses from that amount. Ex. 3. Mother\u2019s worksheet did not\n\nrequest a reduction for work-related child care expenses and indeed, she indicated at the\n\nhearing that she was not requesting that deduction to be included in her request for\n\ntemporary support. Id.; Tr. p. 154. Mother\u2019s financial declaration, which she submitted\n\nafter the hearing, provided for weekly self-employment gross income of $423 and weekly\n\nchild support income of $125 for her subsequent-born child, as well as deductions\n\ntotaling $169. Appellant\u2019s App. p. 167. The final sum of these figures equaled $379,\n\nwhich the State used as Mother\u2019s gross weekly income in the worksheet it submitted and\n\nwhich the trial court also adopted as Mother\u2019s gross weekly income amount on the\n\nworksheets it created. Id. at 37, 39-40.\n\n\n\n 19\n\f Our child support guidelines define weekly gross income from self-employment as\n\n\u201cgross receipts minus ordinary and necessary expenses.\u201d Ind. Child Support Guideline\n\n3(A)(2). Additionally, the guidelines provide that \u201c[i]ncome statements of parents shall\n\nbe verified with documentation of both current and past income.\u201d Ind. Child Support\n\nGuideline 3(B)(2). However, the commentary to Guideline 3(B) states that \u201c[t]he\n\nrequirement of income verification is not a change in the law but merely a suggestion to\n\njudges that they take care in determining the income of each party.\u201d Id., cmt. 2.\n\n Using the $379 per week figure that the trial court adopted as Mother\u2019s gross\n\nweekly income, Mother would have an annual income of $19,708. This amount was\n\nclearly supported by Mother\u2019s testimony that she earns approximately $20,000 per year\n\nand that in the previous year, her weekly gross income for child support purposes (gross\n\nreceipts less business expenses) would have been $18,000. Although Mother did not\n\noffer independent evidence of her expenses, we conclude that the decision of whether to\n\nrequire such verification is a matter within the sound discretion of the trial court because\n\nit inherently involves a question of witness credibility. While it may be better practice to\n\nrequire such independent evidence, here we do not find it to have been an abuse of\n\ndiscretion for the trial court to have foregone the suggestion.\n\n In a related argument, Father contends that the trial court erred by \u201cat least\n\npartially\u201d allowing Mother a credit for work-related child care expenses, especially when\n\nthis issue was part of Mother\u2019s appeal. Appellant\u2019s Br. p. 17. First, although work-\n\nrelated child care expenses were an issue in Mother\u2019s appeal, we reiterate that the trial\n\n 20\n\fcourt was once again vested with jurisdiction to reconsider this issue prospectively as of\n\nthe date of its final, written orders.6\n\n Second, Guideline 3(E)(1) provides that reasonable child care costs \u201cincurred due\n\nto employment or job search\u201d should be added to the basic child support obligation and\n\nthen deducted from the child support obligation of the parent who pays for the child care.\n\nThus, these costs are not to be deducted directly from a parent\u2019s employment\n\ncompensation to arrive at the parent\u2019s gross weekly income.\n\n The trial court found that \u201c[Mother\u2019s] financial declaration indicates that she has\n\nwork-related [child care] expenses in the sum of $78 a week\u201d but that \u201c[n]either support\n\nworksheet shows that expense.\u201d Appellant\u2019s App. p. 32. The trial court then created two\n\nworksheets on its own, with both attributing gross income to Mother in the amount of\n\n$379 per week but only one of the worksheets showing that Mother has work-related\n\nchild care costs of $78 per week.\n\n We note that it appears that the State\u2019s adoption of $379 as Mother\u2019s gross weekly\n\nincome appears to be based on Mother\u2019s financial declaration, which indeed included a\n\n$78 deduction for child care expenses. Appellant\u2019s App. p. 167. However, the trial court\n\nspecifically found that the State\u2019s worksheet did not include a credit for work-related\n\nchild care expenses. Thus, the trial court may have accepted $379 as Mother\u2019s gross\n\nweekly income notwithstanding any deduction or credit for child care expenses included\n\n6\n During Mother\u2019s appeal, this Court determined that the trial court had not erred by refusing to allow\nMother to take a work-related child care costs deduction for J.B.J. because Mother works from home and\nwas able to watch her other son simultaneously, so it followed that Mother could do the same for J.B.J.\nD.C. v. J.J., memo op. at *9.\n 21\n\fin Mother\u2019s financial declaration. Indeed, as discussed above, there was independent\n\nevidence supporting a finding that Mother\u2019s weekly gross income was $379 even without\n\nthe child care expense deduction. Thus, this argument fails.\n\n Father\u2019s final argument related to Mother\u2019s income asks us to find that the trial\n\ncourt erred by not imputing potential income to Mother. However, this is merely a\n\nrequest to reweigh the evidence, which we may not do. In sum, we conclude that the trial\n\ncourt\u2019s determination that Mother\u2019s weekly gross income was $379 was not clearly\n\nerroneous.\n\n C. Calculation of Support\n\n Father next maintains that \u201cit is unclear how the court arrived at a figure of\n\n$252.52 other than Mother\u2019s request that support be $250 per week.\u201d Appellant\u2019s Br. p.\n\n17. Indiana Child Support Rule 2 provides for \u201ca rebuttable presumption that the amount\n\nof the award which would result from the application of the Indiana Child Support\n\nGuidelines is the correct amount of child support.\u201d However, \u201c[a] trial court may, in its\n\ndiscretion, deviate from the presumptive amount specified by the guidelines if application\n\nwould result in an unjust award.\u201d Cobb v. Cobb, 588 N.E.2d 571, 574 (Ind. Ct. App.\n\n1992). In such a situation, the trial court \u201cmust set forth a written finding stating the\n\nfactual basis for the deviation.\u201d Hamiter v. Torrence, 717 N.E.2d 1249, 1253 (Ind. Ct.\n\nApp. 1999) (citing Guideline 3(F)). We will affirm a trial court\u2019s order of child support,\n\nincluding an order modifying child support, unless the order is clearly erroneous.\n\nMcGinley-Ellis, 638 N.E.2d at 1252.\n\n 22\n\f Here, the trial court had five child support worksheets before it\u2014one submitted by\n\nFather, one by Mother, one by the State, and two created by the trial court. Ex. 3;\n\nAppellant\u2019s App. p. 35-40. These worksheets provided for a range of weekly child\n\nsupport obligations between $95, in the case of Father\u2019s worksheet, to $278.77, as\n\nprovided by the first worksheet created by the trial court. Appellant\u2019s App. p. 35, 39.\n\nHowever, the trial court did not specifically adopt any of these child support worksheets.\n\nTherefore, it appears that the trial court found that none of these worksheets provided a\n\njust award of child support and chose to deviate accordingly.\n\n As acknowledged by Father, one possible explanation for the trial court\u2019s\n\ndeviation is that Mother had requested an award of at least $250 so that she could\n\nmaintain her current residence and meet other obligations. This explanation has some\n\nsupport in the trial court\u2019s order, which states in part: \u201c[Mother] stated that when\n\n[Father] was complying with the Court\u2019s Order and paying $149 regular support plus\n\n$100 towards the arrearage she was able to provide for the parties [sic] minor child. She\n\nasked that support be temporarily modified to $250 per week.\u201d Appellant\u2019s App. p. 33.\n\n In fixing an amount of child support, the trial court \u201cmust consider the children\u2019s\n\nneeds and the parent\u2019s general economic condition as it affects the parent\u2019s ability to\n\nfinancially provide for the children.\u201d Elbert v. Elbert, 579 N.E.2d 102, 112 (Ind. Ct. App.\n\n1991). Thus, to the extent that the trial court deviated from the presumptive child support\n\namount to arrive at a figure that would allow Mother to continue living in her home and\n\n\n\n 23\n\fprovide for the parties\u2019 minor child to maintain a certain standard of living, we cannot say\n\nthat the trial court erred.\n\n III. Incarceration for Contempt and Appropriateness of Bond for Future Support\n\n Next, Father challenges the contempt finding and contends that the trial court\n\nerred by ordering his incarceration for thirty days when at the time of the order he was\n\ncurrent on his support obligation. Father further contends that it was error for the trial\n\ncourt to set a bond amount requiring Father to pay six months of his future support\n\nobligation in advance.\n\n We will reverse a trial court\u2019s finding of contempt only if there is no evidence or\n\nreasonable inferences supporting the finding. Cowart v. White, 711 N.E.2d 523, 531\n\n(Ind. Ct. App. 1999). Additionally, it is well-settled that a trial court may use\n\nincarceration as a contempt sanction for a parent\u2019s failure to pay child support so long as\n\nthe parent has the financial ability to comply with the order and the delinquency is\n\nwillful. Pettit v. Pettit, 626 N.E.2d 444, 445 (Ind. 1993).\n\n In the instant case, Mother presented evidence on her contempt petition on May\n\n25, 2012, and the parties reconvened on June 14, 2012, for the trial court\u2019s decision. At\n\nthat time, the trial court noted that Father had previously been found in contempt of court\n\nthree times for the failure to pay his child support timely and consistently but that no\n\ncoercive measures had ever been ordered against Father. Tr. p. 169-70. The trial court\n\nfurther found that, despite Father\u2019s claims otherwise, Father had the financial means to\n\npay support as ordered \u201cbecause [he] had it for vacations and for other expenses that he\n\n 24\n\fdid pay rather than paying support.\u201d Id. at 172. Accordingly, the trial court determined\n\nthat Father\u2019s failure to pay was willful and wanton and that \u201cwithout coercive measures\n\n[Father] will not obey the Court\u2019s order as it pertains to consistent payments of weekly\n\nchild support.\u201d Appellant\u2019s App. p. 44.\n\n The trial court found Father in contempt of court for his failure to pay support\n\nconsistently from the time of the last contempt finding until the May 25, 2012 hearing\n\nand ordered Father to serve thirty days in the Hamilton County Jail \u201cto impress upon\n\n[him] the importance of paying consistent weekly child support.\u201d Id. The trial court also\n\nordered Father to post a $6070 bond \u201cto take care of [Father\u2019s] support obligations while\n\nhe is ramping up his new business.\u201d Tr. p. 173.\n\n Father contends that the trial court erred by finding him in contempt and ordering\n\nhim incarcerated because, among other things, Father presented evidence that he had\n\nworked a second job, moved into a cheaper apartment, sold some of his assets, and was\n\nconsidering filing bankruptcy. Appellant\u2019s Br. p. 19. In other words, Father asks us to\n\nreweigh the evidence regarding his financial ability to pay child support as ordered. This\n\nwe will not do. Moore v. Liggins, 685 N.E.2d 57, 65 (Ind. Ct. App. 1997). Sufficient\n\nevidence existed to support the trial court\u2019s contempt finding, and we will not set it aside.\n\n Father also fails to persuade us that the trial court erred by failing to allow him to\n\npurge his contempt via the support payments he made between the May 25, 2012 hearing\n\nand the trial court\u2019s pronouncement of its decision on June 14, 2012. In Marks v.\n\nTolliver, this Court emphasized that \u201cthe primary purpose of a civil contempt proceeding\n\n 25\n\fis not to punish the contemnor but to coerce action for the benefit of the aggrieved party\u201d\n\nbefore reversing an order that called for a father\u2019s incarceration at any future time that his\n\nchild support payments fell behind without an inquiry into his ability to pay at that time.\n\n839 N.E.2d 703, 707-08 (Ind. Ct. App. 2005). The Marks Panel also stated, \u201c[O]ne who\n\nis held in civil contempt for failing to pay support should be ordered to pay the total\n\narrearage and given an opportunity to purge himself or herself of contempt by paying the\n\namount owed.\u201d Id. at 707.\n\n Although we acknowledge the policy rationale behind the above-quoted language,\n\nwe conclude that the present case is sufficiently distinguishable from Marks to warrant a\n\ndeviation from its strict application. Unlike in Marks, the trial court here did not order\n\nFather\u2019s incarceration at some unknown time in the future without inquiry into his ability\n\nto pay at that time. Rather, extensive evidence was presented by both sides regarding\n\nFather\u2019s ability to pay, and the trial court found that Father had willfully disobeyed the\n\nsupport order. Moreover, the trial court specifically stated that the purpose of its order\n\nwas to coerce future compliance from Father even though at the time of the order Father\n\nwas current on his support obligation.\n\n Thus, it is apparent that Father was afforded numerous opportunities over a period\n\nof several years to strictly comply with the child support order, and he was repeatedly\n\nwarned that his failure to do so could result in incarceration. Appellant\u2019s App. p. 41-42,\n\n85. Yet despite multiple findings of contempt, Father has never suffered any adverse\n\nconsequences. Id. Rather, Father has continued his pattern of accumulating arrearages\n\n 26\n\fon his child support obligation. Id. at 42, 80-81. We have held that \u201c[t]he regularity and\n\ncontinuity of court decreed support payments are as important as the overall dollar\n\namount of those payments.\u201d Matson v. Matson, 569 N.E.2d 732, 733 (Ind. Ct. App.\n\n1991). For all these reasons, we find no error with the trial court\u2019s decision not to allow\n\nFather to once again avoid incarceration for his contempt.7\n\n Father next contends that the trial court erred by ordering him to post a bond that\n\nrequired him to pre-pay six months of future support. Father alleges that \u201c[p]anels of this\n\ncourt have consistently found that prospective payments . . . are considered gratuities and\n\nhave long held that \u2018child support payments cannot be applied prospectively to support\n\nnot yet due at the time of the overpayment.\u2019\u201d Appellant\u2019s Br. p. 21 (quoting Matson, 569\n\nN.E.2d at 733).\n\n Father\u2019s argument fails to take into account Indiana Code sections 31-16-6-5 and\n\n31-16-8-3, which specifically state that a trial court entering or modifying an order for\n\nchild support \u201cmay provide . . . for such security, bond, or other guarantee that is\n\nsatisfactory to the court to secure the obligation to make support payments.\u201d These\n\nstatutes allow for trial courts to be creative in fashioning guarantees of future support\n\nwhere it appears that a parent may not voluntarily pay support as ordered. See Griswold\n\n7\n The State concedes that because Father was not provided with a written rule to show cause and the\nhearing at which Father was incarcerated was a compliance hearing rather than a contempt hearing, \u201c[t]he\nunorthodox procedure adopted by the trial court did not clearly insure that [Father] received due process.\u201d\nWhile these procedures are generally required before a trial court can hold a person in indirect contempt,\nhere we believe that strict compliance with these procedures was unnecessary in this case because Father\nhad actual knowledge of the contempt accusations against him and what could happen if he failed to\nstrictly comply with the support order. See In re Paternity of J.T.I., 875 N.E.2d 447, 450 (Ind. Ct. App.\n2007).\n 27\n\fv. Savage, 569 N.E.2d 970, 972-73 (Ind. Ct. App. 1991) (upholding a trial court\u2019s order\n\nrequiring a parent who often fell behind on his support obligation to deposit $37,500\n\nreceived from an inheritance into a trust account guaranteeing the payment of future\n\nsupport, college expenses, and medical expenses until the child\u2019s expected emancipation\n\nat the age of twenty-one). As such, we find no error with the trial court\u2019s requirement\n\nthat Father post a $6070 bond to guarantee that J.B.J. received support while Father was\n\ngrowing his new sales territory.\n\n IV. Attorney Fees\n\n Finally, Father requests attorney fees. However, Father fails to support his request\n\nwith cogent argument or any citations to legal authority. Accordingly, Father has waived\n\nthis request. See Rendon v. Rendon, 692 N.E.2d 889, 898 n.7 (Ind. Ct. App. 1998)\n\n(finding that a party waived her challenge to an award of attorney fees when she failed to\n\npresent a cogent argument or authority in support of her argument on appeal).\n\n The judgment of the trial court is affirmed.\n\nMAY, J., and MATHIAS, J., concur.\n\n\n\n\n 28\n\f"} -{"text": " Case: 11-50469 Document: 00512085695 Page: 1 Date Filed: 12/17/2012\n\n\n\n\n IN THE UNITED STATES COURT OF APPEALS\n FOR THE FIFTH CIRCUIT United States Court of Appeals\n Fifth Circuit\n\n FILED\n December 17, 2012\n No. 11-50469\n Conference Calendar Lyle W. Cayce\n Clerk\n\nUNITED STATES OF AMERICA,\n\n Plaintiff-Appellee\n\nv.\n\nROGELIO CERVANTES-DEL TORO, also known as Marcelo Miranda-Cantu,\nalso known as Marcelo Aranda-Cantu, also known as Jose Acuna,\n\n Defendant-Appellant\n\n\n Appeal from the United States District Court\n for the Western District of Texas\n USDC No. 5:10-CR-581-1\n\n\nBefore DAVIS, OWEN, and HIGGINSON, Circuit Judges.\nPER CURIAM:*\n The attorney appointed to represent Rogelio Cervantes-Del Toro has\nmoved for leave to withdraw and has filed a brief in accordance with Anders v.\nCalifornia, 386 U.S. 738 (1967), and United States v. Flores, 632 F.3d 229 (5th\nCir. 2011). Cervantes-Del Toro has not filed a response. We have reviewed\ncounsel\u2019s brief and the relevant portions of the record reflected therein. We\nconcur with counsel\u2019s assessment that the appeal presents no nonfrivolous issue\n\n\n *\n Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not\nbe published and is not precedent except under the limited circumstances set forth in 5TH CIR.\nR. 47.5.4.\n\f Case: 11-50469 Document: 00512085695 Page: 2 Date Filed: 12/17/2012\n\n No. 11-50469\n\nfor appellate review. Accordingly, counsel\u2019s motion for leave to withdraw is\nGRANTED, counsel is excused from further responsibilities herein, and the\nAPPEAL IS DISMISSED. See 5TH CIR. R. 42.2.\n\n\n\n\n 2\n\f"} -{"text": "\n994 F.Supp. 202 (1998)\nRaymond H. WECHSLER, Administrative Trustee, Plaintiff,\nv.\nSQUADRON, ELLENOFF, PLESENT & SHEINFELD, LLP, Defendant.\nNo. 96 CIV.4115(WK)(AJP).\nUnited States District Court, S.D. New York.\nFebruary 9, 1998.\n*203 Richard Mancino, Willkie, Farr & Gallagher, New York City, for Plaintiff.\nPhilip S. Kaufman, Kramer, Levin, Naftalis & Frankel, New York City, for Defendant.\n\nORDER\nWHITMAN KNAPP, Senior District Judge.\nOn February 4, 1998, we issued an Opinion and Order (\"the Opinion\") rejecting Magistrate Judge Andrew J. Peck's Report recommending that we grant plaintiff Raymond H. Wechsler (\"trustee\" and/or \"plaintiff\"), administrative trustee of the bankrupt Towers Financial Corporation (\"Towers\"), motion to file a proposed amended complaint against Towers' former law firm Squadron, Ellenoff, Plesent, Sheinfeld, LLP (\"Squadron Ellenoff\" and/or \"defendant\"). We have concluded that we were in error.\nThe essential facts are adequately stated in the Opinion. Two basic questions are presented: (1) what would Thomas B. Evans, Jr. (\"Evans\") and/or Ben F. Barnes (\"Barnes\") \u0097 two concededly innocent Towers' directors \u0097 have done had the defendant law firm (through one of its partners) fully advised them of the facts; and (2) would any actions that Evans and Barnes might have taken been effective in ending the fraud.\nAs to the first question, we were satisfied that both Evans and Barnes testified truthfully about their present recollection of their then state of mind. But we had \u0097 and expressed \u0097 doubt as to whether their memories were accurate. Moreover, we were greatly influenced by defendant's argument that \"no rational person\" would have \"willingly risked the enormous personal liability attendant to\" disclosing information to the SEC, where such disclosure could amount to a breach of their fiduciary duty to Towers. See Defendant's Objections to Magistrate Judge Pecks' Recommendation that the Administrative Trustee Be Granted Further Leave to Amend at 19-20.\nEvans states that he would have consulted his attorney before taking any action, while Judge Peck's Report suggests that there really was no such risk. See Report at 15-24. However, since we released our opinion we have begun to feel that the real wonder is: Who is it that defendant supposes would have called this possible risk to the attention of Evans and Barnes? The obvious answer would appear to be the Squadron Ellenoff partner whose then mission in life apparently was to hold the SEC at bay while his client continued to collect millions of dollars from an unsuspecting public. It seems rather obscene to argue that defendant should be exonerated because of the ability of one of its partners to intimidate honest directors. At the very least, it is an argument that should be made, if at all, before the ultimate trier of fact.\nRegardless of how any of the foregoing speculations might be resolved, it is clear that Evans and Barnes unequivocal testimony as to how they would have acted had they been properly informed is sufficient to raise an issue that can only be resolved by the trier of fact.\n*204 As to the second question, we rejected Judge Peck's recommendation on our finding that there was no evidence before us to indicate that the SEC would have been in any way aided by anything that the honest directors might have done, despite the obvious existence of many witnesses who could have shed light on the question had plaintiff taken the trouble to contact them. On reconsideration we realize that this was not a valid reason for rejecting Judge Peck's recommendation. He was obviously aware of the existence of these witnesses and could well have felt that it would save judicial time to develop these facts in the course of preparation for trial. Accordingly, we withdraw our February 4th opinion, and grant plaintiff's motion for leave to file the proposed amended complaint.\nThe foregoing does not, however, end our inquiry. In addition to its argument that plaintiff lacked standing, defendant had moved, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the original complaint on the ground that it failed to allege the elements necessary to state a claim for malpractice. Having dismissed that complaint for lack of standing, we never reached this question. By letter dated November 17, 1997, defendant asks us to consider these arguments as having been made in support of a motion to dismiss the proposed amended complaint should we permit it to be filed. We so consider them, and turn to the question of whether the amended complaint states a claim of malpractice.\nThe parties agree that an allegation of actual damages (and causation) is essential to a claim of malpractice against an attorney. In this connection, Judge Peck, at page 16 of his Report dated March 16, 1997, observed that \"[i]f the Trustee can prove malpractice, in light of the allegation that Squadron Ellenoff's loyalty was to Hoffenberg instead of Towers, the Trustee has a viable damage claim a least for the legal fees Towers paid to Squadron Ellenoff.\" (citations omitted) Defendant objects to this conclusion, arguing that as a matter of law, mere payment of attorney fees cannot constitute the element of damages necessary to state a claim of malpractice.\nAssuming defendant's position to be correct, the proposed amended complaint also alleges that by its success in holding the SEC at bay, the defendant law firm materially increased Hoffenberg's opportunities to defraud the public and thus increased Towers' liability. That allegation, if proven, would satisfy the elements of actual injury and causation. It is therefore unnecessary on the motion before us to decide whether or not payment of attorney fees could alone have done so. Accordingly, defendant's motion to dismiss pursuant to Rule 12(b)(6) is denied.\n\nCONCLUSION\nHaving withdrawn our February 4th opinion, plaintiff's motion for leave to file the proposed amended complaint is granted. Defendant's motion, pursuant to Rule 12(b)(6), to dismiss that complaint is denied.\nSO ORDERED.\n\nREPORT AND RECOMMENDATION\nPECK, United States Magistrate Judge.\nTo the Honorable Whitman Knapp, United States District Judge.\nThe motion before the Court raises a question of first impression: Can a director of a public corporation who believes that the company is engaged in ongoing securities fraud \"blow the whistle\" by disclosing to the SEC information protected by the company's attorney-client privilege, where the company's Board has not waived the privilege? As a matter of public policy, the Court holds that the answer is yes, although the company could sue the whistle-blowing director for breach of fiduciary duty if such disclosure were not in the company's best interest.\nThis action, by the Administrative Trustee of the bankrupt Towers Financial Corporation against Towers' former law firm, Squadron Ellenoff Plesent & Sheinfeld LLP, is but one of many suits arising from Towers' Ponzi scheme.\nIn a Report and Recommendation dated March 26, 1997, I recommended denial of defendant Squadron Ellenoff's motion to dismiss. By Opinion dated July 28, 1997, Judge *205 Knapp affirmed my Report and Recommendation, with an important modification:\nAccordingly, we agree with Judge Peck's finding that the [Shearson Lehman Hutton, Inc. v.] Wagoner[, 944 F.2d 114 (2d Cir.1991)] rule only applies where all relevant shareholders and/or decisionmakers are involved in the fraud, and therefore, adopt the Report with respect to this section. Absent such a finding, the fraud cannot be imputed to the corporation, thereby granting the trustee of that corporation standing to litigate a malpractice claim against third parties.\nHowever, we disagree with Judge Peck's conclusion that the Complaint actually alleges the existence of an innocent member of Towers' management who would have been able to prevent the fraud had he known about it. As discussed above, absent such an allegation in the Complaint the trustee would not have standing to assert the instant claims under the Wagoner rule. Accordingly, defendant's motion to dismiss is granted.\nWe refer the matter back to Judge Peck to oversee any discovery he deems necessary and appropriate to determine whether plaintiff could amend the Complaint to allege the existence of some person(s) involved in Towers' management who was ignorant of the ongoing fraud and could and would if advised of facts known to defendant have taken steps to bring the fraudulent conduct to an end. To be valid a complaint would have to identify such person(s), and explain how he could and would have brought the fraud to an end. If Judge Peck concludes that plaintiff could make such allegations in light of the pleading requirements of Rule 11, plaintiff may file an amended complaint.\nWechsler v. Squadron, Ellenoff, Plesent & Sheinfeld, LLP, 212 B.R. 34, 36 (S.D.N.Y. 1997) (Knapp, D.J. & Peck, M.J.) (emphasis added & fn. omitted). Familiarity with Judge Knapp's and my prior Opinions and Reports and Recommendations are assumed.\nThe Trustee has filed a motion for leave to amend, including a copy of the proposed Second Amended Complaint, accompanied by the affidavit of the alleged \"innocent director,\" Thomas B. Evans, Jr. After the Court held oral argument on the motion on October 17, 1997, the Trustee filed a supplemental affidavit from Mr. Evans and an affidavit from a second alleged \"innocent director,\" Ben F. Barnes.\n\nThe Governing Legal Standard on This Motion\nThe parties hotly dispute the appropriate legal standard to apply to this motion.\nJudge Knapp dismissed the Trustee's complaint without prejudice to repleading if the Trustee was able. Wechsler v. Squadron, Ellenoff, 212 B.R. 34, 36. The Trustee has sought leave to amend, which Squadron Ellenoff opposes on the ground that amendment would be futile. (See generally Squadron Br.) The appropriate standard, therefore, is whether the proposed Second Amended Complaint fails to state a claim, the traditional Fed.R.Civ.P. 12(b) standard. See, e.g., S.S. Silberblatt, Inc. v. East Harlem Pilot Block-Bldg. 1 Housing Dev. Fund Co., 608 F.2d 28, 42 (2d Cir.1979) (\"A trial court does not abuse its discretion in denying leave to amend a complaint which even as amended would fail to state a cause of action.\"); Skylon Corp. v. Guilford Mills, Inc., 93 Civ. 5581, 1997 WL 88894 at *1 (S.D.N.Y. March 3, 1997) (motion to dismiss standard is \"a standard substantially the same as the standard for futility under a motion to amend\"); Barrett v. United States Banknote Corp., 806 F.Supp. 1094, 1098 (S.D.N.Y.1992) (\"Leave to amend will not be granted under Rule 15(a), however, where there are no colorable grounds for the proposed claim \u0097 that is, where amendment would prove futile.... The `colorable grounds' requirement mandates `an inquiry \u0097 comparable to that required by Fed.R.Civ.P. 12(b)(6) ... as to whether the proposed amendments state a cognizable claim....' In sum, amendment is futile if a proposed claim could not withstand a motion to dismiss made pursuant to Fed. R.Civ.P. 12(b)(6).\"); Journal Publishing Co. v. American Home Assurance Co., 771 F.Supp. 632, 634 (S.D.N.Y.1991) (\"`\"A district court is justified in denying an amendment if the proposed amendment could not withstand a motion to dismiss.'\" ... The Proposed Amended Complaint may therefore *206 be scrutinized as if defendants' objections to the amendments constituted a motion to dismiss under Fed.R.Civ.P. 12(b)(6).\"); Hannah v. Metro-North Commuter R.R., 753 F.Supp. 1169, 1176 (S.D.N.Y.1990) (same).\nSquadron Ellenoff, however, contends that because the issue here is the Trustee's standing, the standard is different:\nMR. KAUFMANN [Squadron Ellenoff's counsel]: This is a standing motion to dismiss. The standard there is not like a motion to dismiss for failure to state a claim where the burden is on the defendant and all allegations are deemed to be true. Here, the Second Circuit says and the Supreme Court says, the burden is on the party seeking to establish standing, and in this instance doubts are resolved in favor of us, not the trustee. So the standard to which the court referred is not the usual motion to dismiss for failure to state a claim, it's a very different standard.\n(10/17/97 Oral Arg. Tr. at 21.) Squadron Ellenoff further contends that the \"Trustee now bears the `burden of persuasion' to establish the facts necessary to obtain standing.\" (Squadron Br. at 4.)\nSquadron Ellenoff is correct that the burden of proof of standing is on the Trustee, but incorrect in claiming that the Trustee has not adequately satisfied its burden at the pleading stage.\nThe Supreme Court summarized the burden on the plaintiff of establishing standing at the various stages of a case:\nThe party invoking federal jurisdiction bears the burden of establishing these elements. Since they are not mere pleading requirements but rather an indispensable part of the plaintiff's case, each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation. At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice, for on a motion to dismiss we \"presum[e] that general allegations embrace those specific facts that are necessary to support the claim.\" In response to a summary judgment motion, however, the plaintiff can no longer rest on such \"mere allegations,\" but must \"set forth\" by affidavit or other evidence \"specific facts,\" which for purposes of the summary judgment motion will be taken to be true. And at the final stage, those facts (if controverted) must be \"supported adequately by the evidence adduced at trial.\"\nLujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 2136-37, 119 L.Ed.2d 351 (1992) (citations omitted); see also, e.g., National Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 256, 114 S.Ct. 798, 803, 127 L.Ed.2d 99 (1994)(applying Lujan principle and holding that \"[n]othing more [than plaintiff's allegations in complaint] is needed to confer standing ... at the pleading stage\"); FW/ PBS, Inc. v. City of Dallas, 493 U.S. 215, 231, 110 S.Ct. 596, 608, 107 L.Ed.2d 603 (1990) (\"it is the burden of the `party who seeks the exercise of jurisdiction in his favor,' ... `clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute.'\" Plaintiffs' affidavits were not sufficient to show standing to challenge certain aspects of statute); Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 109, 115, 99 S.Ct. 1601, 1613, 1615-16, 60 L.Ed.2d 66 (1979) (as to standing, Court will \"`accept as true all material allegations of the complaint, and ... construe the complaint in favor of the complaining party,' ... as standing was challenged largely on the basis of the pleadings.\" Court \"conclude[s] that the facts alleged in the complaints and revealed by initial discovery are sufficient to provide standing under Art. III. It remains open to petitioners, of course, to contest these facts at trial.\"); McNutt v. General Motors Acceptance Corp. of Indiana, 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936) (party asserting federal court jurisdiction \"must allege in his pleading the facts essential to show jurisdiction. If he fails to make the necessary allegations he has no standing.\" Plaintiff \"must carry throughout the litigation the burden of showing that he is properly in court,\" and if the opposing party or the Court challenges plaintiff's standing, plaintiff must support his allegations \"by competent proof.\"); Fund for Animals v. Babbitt, 89 F.3d 128, 134 (2d Cir. *207 1996) (2d Cir.1996) (applying Lujan principle at summary judgment stage); Schulz v. Williams, 44 F.3d 48, 52 n. 4 (2d Cir.1994) (applying Lujan principle after trial); Golden Hill Paugussett Tribe of Indians v. Weicker, 39 F.3d 51, 58 (2d Cir.1994) (applying Lujan at pleading stage and finding allegations in complaint sufficient to satisfy standing requirement); Long Island Soundkeeper Fund, Inc. v. New York Athletic Club, 94 Civ. 0436, 1996 WL 131863 at *4 (S.D.N.Y. March 22, 1996) (\"The Supreme Court has pointed out that `each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e. with the manner and degree of evidence required at the successive stages of the litigation.' Lujan, 112 S.Ct. at 2136. Defendant has made a motion for summary judgment on the issue of Plaintiffs' standing to sue. Accordingly, it is necessary to determine whether Plaintiffs have provided facts sufficient to carry their burden of proof of standing at this point in the litigation.\"); New Alliance Party v. FBI, 858 F.Supp. 425, 429-30 (S.D.N.Y.1994) (\"Moreover, at the pleading stage, it is presumed that any general allegations raised in the complaint will `embrace those specific facts that are necessary to support the claim.' ... While plaintiffs admit that standing analysis is based upon the allegations in a complaint, they have failed to raise the factual allegations necessary to find a justiciable controversy in this case.\"); Ortho Pharmaceutical Corp. v. Cosprophar, Inc., 828 F.Supp. 1114, 1124 (S.D.N.Y.1993) (\"the burden of establishing the elements of standing falls upon the plaintiff, and ... the burden of proof increases `with the manner and degree of evidence required at the successive stages of the litigation'\"), aff'd, 32 F.3d 690 (2d Cir.1994); State of New York v. Reilly, 143 F.R.D. 487, 491 (N.D.N.Y.1992) (\"The plaintiff bears the burden of establishing these [standing] elements.... Furthermore, because all of these elements are an indispensable part of the plaintiff's case, they must be supported with the manner and degree of evidence required at each successive stage of the litigation.... [A]t the pleading stage, general factual allegations of [standing] may suffice.... This is so because on a motion to dismiss, the court `[p]resumes that general allegations embrace those specific facts that are necessary to support the claim.'\"); Media Ranch, Inc. v. Manhattan Cable Television, Inc., 757 F.Supp. 310, 317 (S.D.N.Y.1991) (\"In deciding questions of standing, courts are required to accept a plaintiff's allegations as true and to construe those allegations in a manner favorable to the plaintiff.... [I]t must be borne in mind that no discovery has yet occurred in this case. Consequently, at this stage of the proceedings, this Court accepts [plaintiffs] contention\" as to standing).\nHere, the Trustee not only has appropriately alleged in the proposed Second Amended Complaint the specific facts required by Judge Knapp's prior opinion as to standing \u0097 that is, that Evans and Barnes were \"innocent\" directors who could and would have stopped the Towers' fraud by, inter alia, going to the SEC \u0097 but also has supported these allegations with affidavits from Evans and Barnes. That is more than sufficient at this stage.[1]\n\nJudge Knapp's First Prong: The Identification of An \"Innocent Director\"\nMr. Evans, a lawyer and former Congressman, became a Towers director in 1990 and resigned from the Towers Board in 1992. (Evans Aff. \u00b6\u00b6 2, 3, 6, 8.) Evans was Chairperson of the Towers audit committee, which was formed as a result of his recommendation to Towers' CEO Steven Hoffenberg. (Evans Aff. \u00b6\u00b6 7-8; see also Proposed 2d Cplt. \u00b6\u00b6 28-30.) Mr. Barnes, a former Texas Lieutenant Governor and Speaker of the Texas House of Representatives, also became a Towers outside director in 1990 and also served on the Towers audit committee. (Barnes Aff. \u00b6\u00b6 2, 5.)\nIn their roles as outside Towers directors, Mr. Evans and Mr. Barnes had discussions with Squadron Ellenoff partner Ira Sorkin about Towers' accounting practices and the SEC investigation of those practices. (Evans *208 Aff. \u00b6\u00b6 9-12; Barnes Aff. \u00b6\u00b6 6-8; Proposed 2d Cplt. \u00b6\u00b6 31-38.) According to Evans and Barnes, Sorkin did not inform either of them of the Spicer & Oppenheim memorandum that \"would have alerted [them] to deficiencies in Towers' accounting\" practices. (Evans Aff. \u00b6 12; see also Evans Supp. Aff. \u00b6\u00b6 2-3; Barnes Aff. \u00b6 9; Proposed 2d Cplt. \u00b6\u00b6 32-33.) In addition, according to Evans and Barnes, Sorkin assured them that: (a) the funds raised by Towers from the Note offerings were being used for their intended purposes, (b) the receivables purchased by Towers were being correctly accounted for, (c) Towers was not involved in a Ponzi scheme, and (d) the SEC investigation was due \"to the SEC's failure to understand Towers' business.\" (Evans Aff. \u00b6\u00b6 16-19; Barnes Aff. \u00b6 9; see also Proposed 2d Cplt. \u00b6\u00b6 31-37.)\nThus, the Trustee has identified two Towers Board members who (allegedly) were ignorant of the ongoing fraud at Towers. This satisfies the first part of what Judge Knapp has required.[2] The second, and more difficult, part is whether Evans and/or Barnes \"would have been able to prevent the fraud had he known about it.\" Wechsler v. Squadron, Ellenoff, 212 B.R. 34, 36.\n\nJudge Knapp's Second Prong: What Evans and Barnes Say They Would Have Done to Stop the Towers Fraud\nMr. Evans' original affidavit stated that had Squadron Ellenoff revealed the Spicer & Oppenheim memorandum to him, he would have taken the following corrective actions:\n21. In retrospect, I can say that if Mr. Sorkin [of Squadron, Ellenoff] had answered my questions differently or disclosed to me the problems raised in the Spicer & Oppenheim memorandum, I could have taken corrective actions. I had told Mr. Hoffenberg on a number of occasions that he should retain a large, reputable accounting firm to audit Towers' books and records, and if I had been aware that there were problems with Towers' accounting procedures I would have been more insistent upon such action. Such a firm could have caused corrective disclosures to have been made to accurately reflect the true financial condition of the Company.\n22. I would also have taken other actions. I would have sought my own counsel on these matters and would have raised my concerns with Ben Barnes, the other outside director. I also would have made direct disclosures to the SEC or Justice Department regarding the true nature of Towers' accounting, depending on the advice of my attorney(s).\n23. I believe that these actions could have averted at least some of the losses suffered by Towers as a result of Hoffenberg's behavior, especially if they had occurred early in my tenure as a member of the Board of Directors.\n(Evans Aff. \u00b6\u00b6 21-23.) Mr. Barnes similarly stated:\n10. I would have told Mr. Hoffenberg that if he refused to take corrective action within the Company, I would inform the SEC or any other authority I felt appropriate that I was aware of fraudulent accounting activity at Towers. If Mr. Hoffenberg still refused to take corrective action, I would have carried through on my threat and gone to the SEC, either with or without the information disclosed by Mr. Sorkin. I would not have covered up the Towers' fraud and I would not have simply walked away without pursuing remedial measures.\n*209 (Barnes Aff. \u00b6 10; see also Proposed 2d Cplt. \u00b6\u00b6 39-41.)\nIn short, Mr. Evans and Mr. Barnes suggest two corrective actions they would have taken: (1) insisting that Towers hire a large, reputable accounting firm, and (2) seeking their own counsel and, depending on counsel's advice, disclosing information to the SEC or Justice Department.\nSquadron Ellenoff responds that the first action would have been futile because the Towers Board was dominated by Hoffenberg and other wrongdoers. (Squadron Br. at 5-6.) Squadron Ellenoff notes that \"Evans' only apparent effort to influence the direction of the company \u0097 urging the retention of a reputable accounting firm \u0097 was rebuffed by [by Hoffenberg] in terms that could leave no doubt about [Evans'] lack of authority: `[Hoffenberg] essentially told me [Evans] that if I did not like the way he did business I could resign from the Board of Directors. I did so immediately.'\" (Squadron Br. at 6, quoting Evans Aff. \u00b6 24; see also 10/17/97 Oral Arg. Tr. at 20-21, 23-24, 29-30.)\nOf course, were Mr. Hoffenberg faced with outside directors like Evans and/or Barnes threatening to \"blow the whistle\" on Hoffenberg's fraud, Hoffenberg's (and his Board's) reaction might have been different than when merely faced with a director's suggestion to hire outside accountants. Indeed, at oral argument, the Trustee's counsel said that both he and Evans have had post-litigation conversations with Hoffenberg in which Hoffenberg said that he had hoped to stall the SEC to \"grow the business by enough and hopefully outgrow the accounting problems,\" and that Hoffenberg regretted not having listened to Evans and Barnes. (10/17/97 Oral Arg. Tr. at 9-10, 11-12, 30.) The Trustee was invited to submit an affidavit(s) to this effect (10/17/97 Oral Arg. Tr. at 48-49), but did not do so. Squadron Ellenoff responds that the complaint alleges that Towers was a \"massive Ponzi scheme,\" not just that there were \"some accounting irregularities,\" and that Hoffenberg's protestations are incredible. (10/17/97 Oral Arg. Tr. at 29-30.) The Court agrees that, wearing a trier of fact hat, the Court would not give any credence to the argument that if challenged by Evans and/or Barnes, Hoffenberg would have abandoned his Ponzi scheme. (See 10/17/97 Oral Arg. Tr. at 8-9, 11, 48-49.) The Court, however, need not decide whether it nevertheless must allow the Trustee's claim to proceed on this basis because the Court finds that the Trustee satisfies Judge Knapp's second prong through Evans'/Barnes' second proposed corrective action, going to the SEC, as discussed below.\nWith respect to the proposed second corrective action, Squadron Ellenoff's reply brief noted that Evans' original affidavit only said that he would consult with counsel and might then have gone to the SEC, not that he would have gone to the SEC. (See Squadron Br. at 12; see also 10/17/97 Oral Arg. Tr. at 13-14.) The supplemental Evans' affidavit, and the Barnes' affidavit, clarify that Evans and Barnes would have gone to the SEC. Thus, Evans now states:\n4. If Mr. Sorkin \u0097 in response to my specific questions \u0097 had made me aware of the sorts of deficiencies in Towers' accounting practices and financial statements described in the Spicer & Oppenheim memorandum, or of the true nature of Towers' accounting practices I would have immediately undertaken to determine what remedial measures I might take. I most certainly would have demanded that Towers' outside lawyers provide me with a complete briefing as to the accounting and other problems at Towers, and I would have talked to Ben Barnes, the other outside director at Towers. I would also have approached my own counsel for advice on the best way for me to attempt to bring Towers' activities to the attention of the appropriate authorities, such as the SEC or Justice Department.\n5. If I had been made aware of the serious problems with Towers' accounting, I would have told my attorney that I wanted to inform the proper authorities. If my attorney advised me that such a disclosure would not waive Towers' attorney-client privilege, I would have made a full and complete disclosure to the appropriate authorities regarding what I knew about Towers' accounting. If my attorney had advised me that a complete disclosure *210 might be a waiver of that privilege but that, in this circumstance, waiver of the privilege was appropriate and lawful because it would be for the benefit of Towers, I would have waived the privilege and made a full disclosure.\n6. On careful reflection, I believe that even if my attorney had told me that a full disclosure constituted a waiver of Towers' attorney-client privilege and advised me against waiving that privilege, I would still have felt a responsibility to take action in light of the potential damage to so many people. I would have gone with my counsel to the appropriate authorities with whatever relevant information I had learned concerning the true nature of Towers' business. I also would have cooperated fully in any investigation of Towers.\n(Evans Supp. Aff. \u00b6\u00b6 4-6.) Barnes similarly stated that he definitely would have gone to the SEC, with or without disclosing privileged information. (Barnes Aff. \u00b6 10, quoted above.)\nThus, there is no longer an issue at this stage of the case about whether Evans (and Barnes) would have gone to the SEC; the issue is what they could say, and accomplish, if they went to the SEC.\n\nThe Attorney-Client Privilege Would Not Bar Evans and/or Barnes from Going to the SEC\nAs to the second proposed \"corrective action,\" that Evans and/or Barnes might have \"blown the whistle\" on Towers to the authorities, Squadron Ellenoff contends that they \"would have been legally precluded\" from doing so by Towers attorney-client privilege. (Squadron Br. at 11-14.)\nThe Supreme Court has held that \"[i]t is by now well-established ... that the attorney-client privilege attaches to corporations as well as to individuals.\" Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 348, 105 S.Ct. 1986, 1990, 85 L.Ed.2d 372 (1985).\nThe issue facing the Court, therefore, is whether Evans and/or Barnes could have disclosed privileged information to the SEC over the objection of Hoffenberg and his cohorts, i.e., over the objection of a majority of Towers' Board.[3]\nIn Weintraub, the Supreme Court further stated that:\n[T]he power to waive the corporate attorney-client privilege rests with the corporation's management and is normally exercised by its officers and directors. The managers, of course, must exercise the privilege in a manner consistent with their fiduciary duty to act in the best interests of the corporation and not of themselves as individuals.\nCommodity Futures Trading Comm'n v. Weintraub, 471 U.S. at 348-49, 105 S.Ct. at 1991 (fn.omitted).\nRelying on the first sentence of this Weintraub quote, Squadron Ellenoff asserts that Towers' privilege could only be waived by Towers, \"acting through a majority vote of its board of directors,\" and that after the Hoffenberg-dominated Board refused to waive the privilege,[4] \"Evans could not thereafter have taken it upon himself to contravene the Board's decision.\" (Squadron Br. at 13.) In support, Squadron Ellenoff cites Milroy v. Hanson, 875 F.Supp. 646, 648 (D.Neb.1995), and Tail of the Pup, Inc. v. Webb, 528 So.2d 506 (Fla.Dist.Ct.App.1988). Those cases, however, simply are inapposite.\n*211 In Milroy, a director and minority shareholder brought a shareholder derivative and breach of fiduciary duty action against a closely-held corporation and its remaining directors and shareholders. 875 F.Supp. at 647. The shareholder-director moved to compel production of privileged company documents, on the ground that as a director the documents were not privileged as against him. Id. at 648. The Court denied the motion, stating, in the language quoted in Squadron Ellenoff's brief (at 14), that \"an individual director is bound by the majority decision and cannot unilaterally waive or otherwise frustrate the corporation's attorney-client privilege if such an action conflicts with the majority decision of the board of directors.\" Milroy v. Hanson, 875 F.Supp. at 648. The court noted, however, that\n[T]his is not a case predicated upon [state] corporate law regarding whether Milroy, as a member of [the company's] board of directors, has some right to examine corporate documents in his role as a corporate director. He has filed suit, in major part, to benefit himself. He does not contend that under [state] corporate law he has some entitlement to documents in his fiduciary role as a corporate director. Furthermore, he has made no showing that he wants the documents to fulfill his fiduciary duty to [the company] and all its shareholders, as opposed to using the documents to further his personal goals in this litigation. Accordingly, the attorney-client privilege is properly asserted against Milroy, notwithstanding his position as a director of the corporation.\nId. at 650.\nThe second case cited by Squadron Ellenoff, Tail of the Pup, Inc. v. Webb, also involved a discovery request for privileged documents by a minority shareholder-director of a closely-held corporation. 528 So.2d at 506. The Florida court granted the company a protective order, stating, in the language quoted in Squadron Ellenoff's brief (at 14), that the minority director, \"in his position as an individual stockholder, officer and director, has no authority to waive or assert the privilege against the wishes of the corporation's board of directors.\" 528 So.2d at 507.\nMilroy and Tail of the Pup are distinguishable from the present case. Both involved a minority shareholder-director's attempt to compel production of privileged material that he had never seen in his capacity as a director, for use in a personal-benefit lawsuit against the company.\nMoreover, in other cases, the courts have held that a director is entitled to discovery of privileged documents from the time he was a director. For example, in Kirby v. Kirby, No. Civ. A 8604, 1987 WL 14862 at *7 (Del. Ch. July 29, 1987), the Delaware Chancery Court ordered production of privileged documents created while plaintiffs were shareholders-directors in a closely-held company, explaining:\nAs to those documents prepared prior to [plaintiffs' purported removal as directors], I am not persuaded that the attorney-client privilege may be invoked against plaintiffs. The issue is not whether the documents are privileged or whether plaintiffs have shown sufficient cause to override the privilege. Rather, the issue is whether the directors, collectively, were the client at the time the legal advice was given. Defendants offer no basis on which to find otherwise, and I am aware of none. The directors are all responsible for the proper management of the corporation, and it seems consistent with their joint obligations that they be treated as the \"joint client\" when legal advice is rendered to the corporation through one of its officers or directors.\nIn Moore Bus. Forms, Inc. v. Cordant Holdings Corp., Civ. A. Nos. 13911 & 14595, 1996 WL 307444 at *4 n. 4 (Del.Ch. June 4, 1996), appeal refused mem., 682 A.2d 625, 1996 WL 415923 (Del.1996), the Chancery Court clarified Kirby's \"joint client\" reference, as follows:\nAlthough the Kirby Court described the directors as a \"joint client,\" a more accurate description of the relationship is that there was a single \"client,\" namely, the entire board, which includes all its members. That is, a director seeking information furnished to the board that is the *212 subject of the privilege claim is a \"client\" not in his or her individual capacity, but as a member of the collective body (the board) of which the director is one member.\nThe Moore court granted plaintiff's motion to compel production of privileged company documents, holding that \"Delaware case law supports [plaintiff's] position that as a general matter, a corporation cannot assert the [attorney-client] privilege to deny a director access to legal advice furnished to the board during the director's tenure.\" Moore, 1996 WL 307444 at *4 (citing, inter alia, Kirby).[5]\nHere, in contrast to the above cases concerning whether to compel production of privileged documents to a director in litigation, it is conceded that Evans had \"access\" to the privileged information (see 10/17/97 Oral Arg. Tr. at 33); the issue is whether Evans, believing that there was wrongdoing by the company's officer-directors, voluntarily could disclose to the SEC privileged information already in his possession in his capacity as a director.[6]\nThe Trustee cites Gregory v. Correction Connection, Inc., Civ. A. No. 88-7990, 1990 WL 182130 at *3 & n. 3 (E.D.Pa. Nov.20, 1990), for the proposition that \"Evans, as a member of Towers' board of directors, would have had the authority to waive the attorney-client privilege in order to serve the best interests of Towers,\" even over the opposition of the majority of Towers' Board. (Trustee Reply Br. at 9.) In Gregory, a director moved to compel the corporation to produce communications with outside counsel. The Court ordered the information produced, finding Gregory to be part of the attorney's \"client,\" but also warned that if the director waived the privilege over the company's objection, the company could sue the director for breach of fiduciary duty:\nI conclude that Gregory, as Chairman of CCI's board, is among those CCI agents with management authority who are entitled to be privy to communications between CCI's management and CCI's counsel. Gregory is an extension of the very \"client\" that CCI's attorney-client privilege serves, and I am satisfied that he should have access to the discovery that he seeks. Should he choose to waive CCI's attorney-client privilege by disclosing in public filings in this court and through unsealed discovery [privileged] communications with [the company's] attorneys, CCI and its shareholders would have an action for breach of fiduciary duty if such disclosure is not in the best interest of CCI.\n\nGregory v. Correction Connection, 1990 WL 182130 at *3 (emphasis added & fns. omitted);[7]*213 see also, e.g., Henshaw v. American Cement Corp., 252 A.2d 125, 128-29 (Del.Ch. 1969) (in upholding director's right to review corporate books and records, court notes that the director's \"purpose is not improper because of the possibility that he may abuse his position as a director and make information available to persons hostile to the Corporation or otherwise not entitled to it. If [the director] does violate his fiduciary duty in this regard, then the Corporation has its remedy in the courts.\"); Hoiles v. Superior Court, 157 Cal.App.3d 1192, 1201-02, 204 Cal. Rptr. 111, 116-17 (Ct.App.1984) (in dicta, follows Henshaw).\nThe case before this Court appears to be unique. It does not involve a shareholder-director trying to use privileged information for his private benefit in a lawsuit against the company. It does not involve a discovery request by a former director during litigation. It does not involve a former director's effort to learn privileged corporate information that he did not have access to in his capacity as a director. The unique issue here is whether Evans could have revealed the privileged information he had to the SEC, over the objections of Hoffenberg and his cohorts on the Towers Board. As a matter of factual allegation, Evans unequivocally states that he would have done so. (Evans Supp. Aff. \u00b6\u00b6 5-6.) As a matter of law, the Court concludes that Evans could have revealed privileged Towers information to the SEC. Nothing in the attorney-client privilege should prevent Evans from \"blowing the whistle\" to the SEC, including revealing privileged information, although such conduct could have subjected Evans to liability to Towers for breach of fiduciary duty. If Evans' revelation of privileged Towers information to the SEC was harmful to Towers, i.e., not in the best interests of Towers (as opposed to Hoffenberg, et al.), Towers could have sued Evans for breach of fiduciary duty. See Gregory v. Correction Connection, 1990 WL 182130 at *3; Henshaw v. American Cement, 252 A.2d at 128-29. (See also 10/17/97 Oral Arg. Tr. at 35.) And with the benefit of hindsight \u0097 including Hoffenberg's criminal guilty plea allocution \u0097 it is safe to say that Evans' disclosure to the SEC would not have subjected him to a successful breach of fiduciary duty claim by Towers.\nThe Court believes that application of this rule \u0097 the director may reveal privileged information to governmental authorities, subject to being sued for breach of fiduciary duty \u0097 best comports with public policy. It encourages, or at least permits, an outside director to fulfill his fiduciary obligation to the company's public shareholders where he believes that company management and the majority of the company's board are engaged in wrongdoing. It nevertheless protects the company's privilege as much as possible, since the company can sue the director for breach of fiduciary duty if his disclosure is not in the company's best interest. A director will not lightly disclose privileged information that can subject him to millions of dollars of personal liability. But where the director believes the situation requires \"whistle blowing,\" the courageous director can act. In contrast, the view espoused by Squadron Ellenoff would require a director who has discovered fraud by company insiders to do little more than resign, while allowing the fraud to continue. Public policy should not, and the Court believes does not, require a director to be handcuffed in that way.\nIn short, Evans (and/or Barnes) could have provided privileged information to the SEC (subject only to the risk of a breach of fiduciary duty lawsuit by Towers), and he has stated that he would have done so.\nFinally, in a last-ditch effort to scuttle this lawsuit, Squadron Ellenoff argues that even *214 if Evans and/or Barnes had revealed privileged information to the SEC, he could not have disclosed \"anything that the SEC did not already know.\" (Squadron Br. at 15; see also 10/17/97 Oral Arg. Tr. at 35, 38-39.) According to Squadron Ellenoff, \"[i]n the absence of concrete proof of fraud at Towers, Evans could do nothing more than share suspicions with the SEC and encourage it to pursue its ongoing investigation to conclusion \u0097 which, of course, it did anyway.\" (Squadron Br. at 15; see also 10/17/97 Oral Arg. Tr. at 38-39.) Squadron Ellenoff's argument would require the Trustee, before undertaking discovery, to prove its entire case. Judge Knapp's Order was not meant to eliminate the rule that a complaint need only contain \"a short and plain statement\" supporting the Court's jurisdiction and plaintiff's claim. Fed.R.Civ.P. 8(a). The Trustee has sufficiently alleged that if Evans disclosed the Spicer & Oppenheim memorandum or other privileged information to the SEC a year or two before the SEC finally sued Towers, the SEC could have taken action to stop Towers' Ponzi scheme long before it eventually did.\n\nEven if Evans and/or Barnes Could Not Disclose Privileged Information to the SEC, He Could Have Gone to the SEC\nFinally, the Court believes that even were Squadron Ellenoff correct (which it is not) that Evans and/or Barnes could not have disclosed privileged information to the SEC, they still could have stopped the fraud by going to the SEC. Although the SEC was already investigating Towers, if Evans and/or Barnes had gone to the SEC and said, in effect, \"I have resigned from the Towers Board because of information I just learned about its operations, and while I cannot disclose that information to you because of the company's attorney-client privilege, I can tell you that you really should expedite your investigation of Towers,\" the SEC likely would have done so and brought suit against Towers much earlier than it eventually did.[8] Thus, even without revealing privileged information, Evans and/or Barnes could have stopped the Towers fraud earlier by going to the SEC, satisfying Judge Knapp's second requirement for the amended complaint.\n\nCONCLUSION\nFor the reasons set forth above, the Court finds that the Trustee's proposed Second Amended Complaint, and accompanying Evans' and Barnes' affidavits, satisfies both requirements set by Judge Knapp \u0097 (1) the Trustee has identified former Congressman Evans (and former Texas Lieutenant Governor and legislator Ben Barnes) as a Towers director (allegedly) \"ignorant of the ongoing fraud\" and (2) \"explain[ed] how [Evans and Barnes] could and would have brought the fraud to an end\" by going to the SEC, with or without disclosing privileged information to the SEC. The Trustee is not required to do more at the initial pleading stage. Any further testing of the Trustee's case will come through discovery, a motion for summary judgment and/or at trial.\nThe parties are to contact my courtroom deputy within five days of receipt of this Report and Recommendation to schedule a status conference to discuss discovery. That conference should also be attended, at least telephonically, by plaintiffs' liaison counsel in In re Towers, 93 Civ. 0810.\nNovember 7, 1997.\nNOTES\n[1] Indeed, at oral argument Squadron Ellenoff's counsel conceded that where a party asserts a colorable, albeit questionable basis for standing, it does not have to prove standing at this stage as it would at trial. (See 10/17/97 Oral Arg. Tr. at 23.)\n[2] Squadron Ellenoff continues to argue that because Hoffenberg and other wrongdoers dominated the Towers Board, Evans and Barnes cannot be Towers \"decisionmakers\" and thus the first part of what Judge Knapp required is not satisfied. (See 10/17/97 Oral Arg. Tr. at 20-21, 23-24.) Squadron Ellenoff, however, made that same argument to this Court and to Judge Knapp the first time around on this motion, and we both rejected it. Since it is undisputed that Hoffenberg and his cohorts had a majority on the Towers Board, there would have been no reason for Judge Knapp to remand if he accepted Squadron Ellenoff's argument that a \"minority\" director is not a relevant decisionmaker for Wagoner standing purposes. If there was an innocent Towers' director or officer, and if he could have taken action within the company or by going to outside authorities to stop Towers' fraud, the Trustee has standing. The Court again rejects Squadron Ellenoff's argument that Evans and Barnes do not fit the bill because Hoffenberg and his cohorts controlled the Board.\n[3] Squadron Ellenoff contends that Sorkin's advice and the Spicer & Oppenheim memorandum are privileged (Squadron Br. at 13), the Trustee's briefs do not contest this (see Trustee Reply Br. at 8-9), and at oral argument the Trustee conceded, at least for purposes of the motion, that the Spicer & Oppenheim memorandum was privileged. (10/17/97 Oral Arg. Tr. at 17-18.) For purposes of this Opinion, therefore, the Court assumes that the information is privileged.\n[4] The Trustee responds that Squadron Ellenoff \"again substitutes speculation for undisputed testimony\" and that \"[o]nly through further discovery can this issue be determined.\" (Trustee Reply Br. at 7-8.) The Court, however, is not blind to reality. The chances are slim that Hoffenberg would have consented to disclosure to the SEC of privileged information that would have halted his Ponzi scheme. The issue, however, is not dispositive of the motion, because the Court finds that even if the Hoffenberg-controlled Board did not waive the privilege, Evans and/or Barnes would have taken corrective action by going to the SEC.\n[5] For other cases holding that a corporate director is entitled to discovery of privileged documents he saw when a director and/or privileged documents from the period he was a director, see, e.g., In re Hutchins (Hutchins v. Fordyce Bank and Trust Co.), 211 B.R. 330, 333 (Bankr. E.D.Ark.1997) (former director, entitled to production of company's privileged documents for period he was director, since he is a \"member of the class protected by the privilege ... [and may] inspect the documents without any breach of confidentiality\"); Glidden Co. v. Jandernoa, 173 F.R.D. 459, 473-74 (W.D.Mich.1997) (under Del. law, \"directors have a right to access attorney communications of the company relating to the time that they served as directors,\" citing Kirby and Moore); Resolution Trust Corp. v. Adams, No. 93-389-CIV-ORL-18, 1994 WL 315646 at *1 (M.D.Fla. April 14, 1994) (\"this Court rejects any privilege asserted as to any [privileged] document that the discovering party previously had a right to possession, custody, or control\" of as a corporate officer or director); In re Braniff, Inc., 153 B.R. 941, 945-46 (Bankr.M.D.Fla.1993) (former officer-directors entitled to discovery of all privileged documents from their tenure on a proper showing, but are entitled without any other showing to production of all privileged documents that \"were actually used, handled, and seen ... in the past while he or she was serving as an officer or director\"); Gottlieb v. Wiles, 143 F.R.D. 241, 247 (D.Colo.1992) (while \"former officers and directors lack the power to waive the corporate privilege,\" a \"corporation may not assert the attorney-client privilege against a former director\" where the former director seeks discovery of the privileged documents, citing Kirby); AOC Ltd. Partnership v. Horsham Corp., Civ. A. No. 12480, 1992 WL 97220 at *1 (Del.Ch.1992) (member of company board entitled to company's privileged information in discovery).\n[6] To be clear: Evans claims that he was not aware of the Spicer & Oppenheim memorandum. (Evans Aff. \u00b6 12; Evans Supp. Aff. \u00b6 3.) The issue before the Court, however, is whether, if Squadron Ellenoff had disclosed that memorandum (and other information about Towers' Ponzi scheme) to Evans, he could have provided that information to the SEC in order to halt Towers' Ponzi scheme.\n[7] The Gregory court assumed that disclosure by one corporate director without the company's consent results in a waiver of the attorney-client privilege. The Court does not believe this assumption is necessarily correct. However, because the issue before the Court is whether Evans/Barnes could disclose, and not whether such disclosure would result in a waiver of Towers' attorney-client privilege, the Court need not decide the waiver issue. For cases that have ruled on this issue, see, e.g., Allen v. Burns Fry, Ltd., No. 83 C 2915, 1987 WL 12199 at *3 (N.D.Ill. June 8, 1987) (production of privileged document by former corporate officer does not waive company's privilege); Interfaith Housing Delaware, Inc. v. Town of Georgetown, 841 F.Supp. 1393, 1398-400 (D.Del.1994) (by analogy to corporate law, each member of town council \"share[s] in its attorney-client privilege,\" but public statement by one council member does not waive privilege).\n[8] The Court notes that the SEC began its investigation in late 1990 or early 1991 and did not sue Towers until February 1993. (See 10/17/97 Oral Arg. Tr. at 39.)\n"} -{"text": "642 F.2d 447\nBalesv.Nifield\n80-1485\nUNITED STATES COURT OF APPEALS Fourth Circuit\n1/9/81\n\n1\nW.D.Va.\n\nAFFIRMED\n"} -{"text": "\n102 F.Supp. 280 (1952)\nCARTER et al.\nv.\nCERTAIN-TEED PRODUCTS CORP.\nCiv. No. 508.\nUnited States District Court N. D. Iowa, Central Division.\nJanuary 30, 1952.\n*281 Alan Loth, Fort Dodge, Iowa, for plaintiffs.\nA. B. Howland, Des Moines, Iowa, Norman A. Miller, Chicago, Ill., for defendant.\nGRAVEN, District Judge.\nThe defendant Certain-Teed Products Corporation is a corporation organized and existing under the laws of the State of Maryland. Prior to 1948 its general offices were in Chicago, Illinois. Since 1948 its general offices have been at Ardmore, Pennsylvania. It has been and is engaged in the processing and selling of gypsum and gypsum products. For many years it has had a gypsum plant in the near vicinity of Fort Dodge, Iowa.\nIn the vicinity of the defendant's gypsum plant at Fort Dodge there is an 80 acre tract of land described as the South Half of the Northwest Quarter of Section Twenty-six, Township Eighty-nine North, Range Twenty-eight West of the Fifth Principal Meridian, Webster County, Iowa.\nOn August 22d, 1945, the ownership of such land was as follows: Clara O. Carter, *282 the wife of the plaintiff William J. Carter, was the owner of an undivided 3/5 ths interest; Maurice J. Breen, individually, owned an undivided 4/60ths interest; William O. Merritt, Harriett Merritt Stevens, Ben Merritt and Doris O. Merritt were each the owners of an undivided 5/60ths interest therein. Clara O. Carter subsequently died and William J. Carter as her sole devisee and as the executor of her will succeeded to her interest therein. Maurice J. Breen, as Trustee under the will of one W. N. Merritt, deceased, holds title to the interests of William O. Merritt, Harriett Merritt Stevens, Ben Merritt and Doris O. Merritt therein. The trusteeship is under the jurisdiction of the District Court of Iowa in and for Webster County. The plaintiffs William J. Carter and Maurice J. Breen are citizens of the State of Iowa. Some of the other plaintiffs are citizens of the State of Iowa and the balance are citizens of the State of California. The plaintiff Gretchen Merritt is the wife of the plaintiff William O. Merritt. The plaintiff Halsen Stevens is the husband of the plaintiff Harriett Merritt Stevens.\nOn August 22d, 1945, William J. Carter and Maurice J. Breen, as representatives of the owners of the tract referred to, and the defendant entered into an option agreement relating thereto, and on September 24th, 1945, the owners of the tract and the defendant entered into another agreement relating thereto. A substantial portion of the tract is underlaid with gypsum rock and the agreements referred to had to do with the extraction of that rock. On October 22d, 1951, the plaintiffs commenced this action. In their complaint they ask for a declaration of their rights under the agreement of September 24th, 1945, under the provisions of the Federal Declaratory Judgments Act, 28 U.S.C.A. \u00a7\u00a7 2201 and 2202. They also ask recovery of damages and other coercive relief. Jurisdiction is based upon diversity of citizenship. The amount in controversy in this case, exclusive of interest and costs, is in excess of $3,000.00. The parties are in agreement that Iowa law is applicable.\nGypsum rock has an interesting history, unique characteristics, and manifold uses. It is commonly known as plaster rock. It is known to chemists as calcium sulphate. Its geological origin is not certain. It has been termed the \"rock nobody knows,\"[1] Gypsum has been in use for thousands of years. It was used in the pyramids of Egypt. It is referred to in the ancient cuneiform script of the Assyrians. The Greeks used it extensively. Gypsum has thousands of present day uses. In 1950 more than nine million tons of gypsum were used in the United States. Substantial quantities are used in the manufacture of cement and plaster. Its greatest use is in the manufacture of wall board and lath. The processing of gypsum involves heating the rock in large kettles to drive off the water of crystallization and grinding it into a fine powder commonly known as \"Plaster of Paris.\" If water is added to this powder it becomes pliable and can be molded into any shape into which it will set when it dries. Gypsum is the only natural substance known that can be restored to its original rocklike state by the addition of water alone. Gypsum deposits in the United States are found in two principal belts. The first belt starts in southwestern Texas, runs up through central Kansas, across Iowa, into southern Michigan, then turns and runs along the northern edge of Ohio and ends in New York. The second belt starts in the Imperial Valley in California, runs up through Nevada and spreads out into Utah. Gypsum usually occurs in veins or ledges. Fort Dodge, Iowa, is now and for a great many years has been an important gypsum center. At the present time five gypsum plants or mills are located in the vicinity of Fort Dodge.\nThe tract in question, hereafter referred to as the Carter-Merritt tract, was and is underlaid with a substantial quantity of gypsum rock. The tract is about two miles from the gypsum plant of the defendant *283 known as its Fort Dodge plant. In the month of August, 1945, William J. Carter and Maurice J. Breen, in behalf of the owners of that tract, entered into negotiations with the defendant relative to the removal of gypsum rock. The defendant was represented in the negotiations by Rawson Lizars, its president, and its secretary, Arthur O. Graves. The first result of the negotiations was the execution of an agreement referred to by the parties as the \"option agreement.\" In that option agreement the owners of the Carter-Merritt tract, referred to in the agreement as Lessors, granted and conveyed to the defendant, referred to in the agreement as the Lessee, the right to enter upon the Carter-Merritt tract for a period of forty-five days for the purpose of exploring for gypsum. The option agreement further provided that if within the forty-five day period the defendant notified the Lessors of its desire to mine and quarry gypsum rock on the tract, the Lessors would enter into a lease with respect to such mining and quarrying. The option agreement further states in substance that if the privilege of mining and quarrying is availed of by the Lessee, the Lessee shall have the right to mine or quarry to any extent and in any manner desired and to use the surface of the land. The option agreement further provides: \"The Lessee agrees to extract 60% of all of its rock requirements from said property, and agrees to pay to the Lessors, for and on behalf of the owners of said property, 12 cents per ton on all rock mined, and 10 cents per ton on all rock quarried. The weights of the gypsum rock withdrawn from the property is to be calculated on scales either at the plant of the Lessee or at the crushing plant.\"\nThe option agreement also contained a provision relative to the matter of advance royalties.\nOn September 19th, 1945, the defendant notified the owners of the tract of its election to exercise the option given it in the agreement. On or about September 24th, 1945, the parties executed the agreement which is the subject matter of this action. The execution of it by Maurice J. Breen in his capacity of Trustee was approved by the District Court of Iowa for Webster County. The present litigation was occasioned by disagreement between the parties as to the construction of that agreement.\nThe parties are in controversy as to whether or not the instrument in question is a lease. The Court is of the view that it is a lease. See, Lacey v. Newcomb, 1895, 95 Iowa 287, 63 N.W. 704; Berg v. Commissioner, 1929, 59 App.D.C. 86, 33 F.2d 641; Del Valle v. Rossy, 1 Cir., 1928, 29 F.2d 353.\nThe lease is dated September 24th, 1945. In it the owners of the Carter-Merritt tract are referred to as the \"Lessors\" and the defendant is referred to as the \"Lessee.\" The forepart of the agreement contains recitals as to the ownership of the premises and as to the option agreement. The principal controversy between the parties is as to the construction to be placed upon certain language used in Paragraph 10 of the lease. In that connection the plaintiffs in their written briefs and on oral argument stressed certain language used in Paragraphs 6, 7, 10, and 15 thereof. The provisions of the lease, through Paragraph 15, are next set forth with the words most stressed in connection with the construction of the lease italicized:\n\"Now, therefore, for and in consideration of the mutual agreements and covenants herein contained, it is agreed by and between Lessors and Lessee, each with the other, as follows:\n\"1) Lessors, by their signing this agreement, acknowledge and accept the exercise by Lessee of the option given to Lessee in the said agreement as of the date hereof, hereby confirms its exercise of the option granted to it in and by the said agreement dated August 22, 1945.\n\"2) Lessors hereby lease and demise to Lessee, its successors and assigns, the following decribed real estate and premises situated in Webster County, Iowa: `The South one-half (\u00bd) of the Northwest one-quarter (\u00bc) of Section 26, Township 89 North, Range 28 West of the 5th P. M.' and hereby grant and convey to Lessee, its successors and assigns, the exclusive right *284 and privilege of mining and removing gypsum or plaster rock under, upon or from said real estate and premises to any extent and in any manner desired by Lessee, including the quarrying and removal from said real estate and premises of said gypsum or plaster rock, of sinking all necessary and proper shafts and/or slopes, of storing on said real estate and premises any amount of said gypsum or plaster rock when mined or quarried, of occupying and using the surface of said real estate and premises for the full enjoyment of and with the right to conduct such mining or quarrying operations and of laying all necessary switch tracks or connections with railroads and of constructing and maintaining all roads or driveways for transporting and marketing any and all gypsum or plaster rock so mined, and Lessee will mine or quarry said real estate and premises in a workmanlike manner using customary mining or quarrying practices as long as such mining or quarrying can be done on an economical basis.\n\"3) The lease and demise of said real estate and premises and the exclusive right and privilege of conducting mining or quarrying operations upon or under said real estate and premises shall be for a term of ten (10) years beginning October 6, 1945 with the right granted to Lessee of successive renewals as hereinafter provided.\n\"4) In consideration for the lease and demise and the rights and privileges hereby made and granted to Lessee by Lessors, and as an advance payment on the royalties or per ton payments to be made by Lessee to Lessors for the gypsum or plaster rock mined or quarried and removed from said real estate and premises by Lessee, as hereinafter provided, Lessee will pay to Lessors or to their successors or assigns, on October 6, 1945, the sum of Twenty-Five Thousand Dollars ($25,000.00) provided this agreement is, on or before said date, duly signed and acknowledged by each and all of the Lessors herein named and if this agreement is not so signed and acknowledged by the Lessors on or before October 6, 1945, then Lessee will pay said sum of Twenty-Five Thousand Dollars on the date after October 6, 1945 when this agreement has been so signed and acknowledged by all of the persons named herein as Lessors, said sum of Twenty-Five Thousand Dollars ($25,000.00) in either event to be paid by Lessee as follows:\n\"(a) Ten Thousand Dollars ($10,000.00) in lawful money of the United States of America or by certified or uncertified check to Maurice J. Breen, as Trustee under the Will of W. N. Merritt, deceased, or to his successors or assigns, which payment shall be credited upon and deducted from the royalty or per ton payments herein provided for upon commencement of the mining or quarrying and removing of said gypsum or plaster rock; and\n\"(b) Fifteen Thousand Dollars ($15,000.00) in lawful money of the United States of America or by certified or uncertified check to Clara O. Carter, or to her successors or assigns, of which amount the sum of Nine Thousand Dollars ($9000.00) is to be paid to the said Clara O. Carter, or her successors or assigns, on October 6, 1945, or on the date thereafter when this agreement has been signed and acknowledged by all of the persons named herein as Lessors, as herein provided, the sum of Three Thousand Dollars ($3000.00) is to be paid to the said Clara O. Carter, or to her successors or assigns, one (1) year from the date of the payment to her of the said sum of Nine Thousand Dollars ($9,000.00) and the remaining Three Thousand ($3,000.00) to be paid to the said Clara O. Carter, or to her successors and assigns, two (2) years from the date of the payment to her of the said sum of Nine Thousand Dollars ($9,000.00), all of said payments to the said Clara O. Carter, or to her successors or assigns, to be credited upon and deducted from the royalty or per ton payments herein provided for upon commencement of the mining or quarrying and removing of said gypsum or plaster rock.\n\"5) Lessee will pay Lessors, or their successors or assigns, in lawful money of the United States of America or by certified or uncertified check, a royalty of ten ($0.10) cents for every ton of 2,000# of *285 gypsum or plaster rock that shall be quarried and removed from the said real estate and premises covered by this agreement and a royalty of twelve (0.12) cents for every ton of 2,000# of gypsum or plaster rock that shall be mined by underground mining operations and removed from the said real estate and premises covered by this agreement. The sum of Twenty-Five Thousand Dollars ($25,000.00) paid or to be paid by Lessee to Lessors as provided for in paragraph 4) above shall be credited against the royalty payments provided for in this paragraph irrespective of whether said royalty payments are earned in the same year or years as the said sum of Twenty-Five Thousand Dollars ($25,000.00) or any part or portion thereof is paid by the Lessee to the Lessors as herein provided, it being the intention of the Lessors and the Lessee that no royalties or per ton payments due pursuant to the provisions of this paragraph shall be paid by the Lessee to the Lessors until royalty or per ton payments in excess of Twenty-Five Thousand Dollars ($25,000.00) computed on the basis set forth in this paragraph, have been earned.\n\"6) All royalty payments specified in Paragraph 5) shall be made on or before the 15th day of each month during the term of this agreement or any renewal or renewals thereof and shall be based upon the quantity of gypsum or plaster rock quarried or mined and removed during the previous period of one (1) month. Such royalty payments shall be paid on the basis of three-fifths ( 3/5 ) thereof to Clara O. Carter and William J. Carter, her husband, and the remaining two-fifths ( 2/5 ) thereof to Maurice J. Breen, as Trustee under the will of W. N. Merritt, deceased, or to their respective successors or assigns.\n\"7) In order to determine the amount of said royalty or per ton payments as specified above, all gypsum or plaster rock mined or quarried and removed shall be weighed at the plant of the Lessee in Fort Dodge, Iowa, at the crushing plant of Lessee on or near the leased premises or at the shaft of Lessee on standard scales or conveyor weigh meters and a just and detailed account thereof, indicating whether said gypsum or plaster rock has been mined or quarried shall be kept and furnished to Lessors, or their successors or assigns, at their request at any and all reasonable times and Lessors, or their successors assigns, may have access to the maps and weight books of Lessee for the purpose of verifying such weights and to the production records of Lessee to determine whether at least sixty percent (60%) of Lessee's gypsum and plaster rock requirements, as hereinafter set forth, are being extracted from said real estate and premises.\n\"8) The rights hereby granted to Lessee, its successors and assigns, shall be deemed to include the right to establish and maintain such haulageways either above or below ground as Lessee deems desirable for the purpose of conducting its mining or quarrying operations on the leased premises, for the purpose of branching to and transporting through or over said haulageways other gypsum or plaster rock mined or quarried from any other lands or to use any shafts or quarrying pits in connection therewith and for any other uses and purposes necessary or convenient in connection with Lessee's mining or quarrying operations before, during and after the mining, quarrying and removal of the gypsum or plaster rock from the real estate and premises of Lessors.\n\"9) The rights hereby granted to Lessee, its successors and assigns, shall be deemed to include the right to lessee to erect and maintain upon or beneath the surface of said real estate and premises all hoisting shafts, air shafts, slopes, spoils banks, rock storage and other facilities, including shops and buildings, for as long as this agreement and lease or any extension, renewal or continuation thereof, shall be in force and effect. All buildings or improvements erected and maintained on said real estate and premises and all equipment installed upon or beneath said real estate and premises by Lessee shall be deemed to be and remain the personal property of Lessee, its successors and assigns, the Lessors hereby waiving the right to hold any of the property or improvements placed or *286 erected upon or beneath the said real estate and premises by Lessee. Lessors also agree to indemnify Lessee against any and all acts of the Lessors, their tenants, employees or agents for damage to any property of the Lessee installed, erected and maintained by Lessee upon or under said real estate and premises.\n\"10) Lessee agrees to begin preliminary mining or quarrying operations on the real estate and premises described herein within ninety (90) days from the date this lease becomes effective and will, as rapidly thereafter as development and conditions permit, and in any event commencing not later than January 1, 1947, extract not less than sixty per cent (60%) of the gypsum and plaster rock requirements for the physical establishment constituting Lessee's present gypsum plant in Fort Dodge, Iowa, from said real estate and premises and will continue to do so as long as there is sufficient gypsum or plaster rock upon or under said real estate and premises of acceptable quality, in sufficient quantities and economically and profitably obtainable by the then currrent methods of mining or quarrying to supply said sixty percent (60%) of Lessee's said requirements. If, any time after the effective date of this lease, Lessee or its present gypsum plant in Fort Dodge, Iowa is sold, purchased, merged, consolidated, reorganized or assigned to or with any other person, firm or corporation and such successor or assignee fails for a period of eighteen (18) consecutive months after such change in ownership to operate Lessee's present gypsum plant in Fort Dodge, Iowa, then and in such event, Lessors may, at their option, cancel this lease or any renewal or extension thereof upon ninety (90) days written notice of their intention to do so to the successor or assignee of Lessee, unless within such period of ninety (90) days after receiving said notice, said successor or assignee shall resume operation of Lessee's said plant and commence to take not less than sixty percent (60%) of the gypsum or plaster rock requirements thereof from said real estate and premises.\n\"11) This lease and agreement is to be for a term of ten (10) years from October 6, 1945 with the right granted to Lessee to extend, renew and continue this agreement for successive periods of ten (10) years each thereafter, upon Lessee's giving written notice in the manner herein provided to Lessors of Lessee's election to extend, renew and continue this lease and agreement not less than sixty (60) days before the expiration of the previous ten (10) year term. Lessee is also granted the right to cancel this lease and agreement on December 31st of any year by giving written notice in the manner herein provided of its intention to so terminate this agreement to Lessors, not less than sixty (60) days prior to December 31st in any year.\n\"12) Lessee will assume and pay all taxes on the improvements installed and maintained by or for Lessee upon said real estate and premises, which improvements it is agreed herein, shall be and remain the personal property of Lessee, and will pay on or before the penalty date in each year the real estate taxes levied and assessed against said real estate and premises each year, and Lessors will permit and allow Lessee to deduct from and credit against the first royalty or per ton payments as herein described due thereafter, the amount of said real estate taxes so paid by Lessee for and on behalf of Lessors. The agreement and obligation of Lessee to pay said real estate taxes is contingent upon the Lessors delivering to Lessee, promptly in each year and in any event before the penalty date all bills for real estate taxes levied and assessed against said real estate and premises and said real estate taxes will be paid by Lessee, for and on behalf of and in the name of the Lessors and provided that the Lessee's agreement and obligation to so pay said real estate taxes shall cease and end at such time as Lessee ceases to mine or quarry and remove gypsum or plaster rock from said real estate and premises, at which time Lessee will notify Lessors in the manner herein provided and thereafter Lessee shall have no further obligation *287 with reference to the payment of said real estate taxes and said real estate taxes thereafter will be paid by Lessors as they become due.\n\"13) Lessors agree that they have good title to the said real estate and premises and full and complete right to make this lease and agreement and that they will at all times protect and defend the rights of Lessee hereunder.\n\"14) Lessors will, on or before October 6, 1945 or on or before such date thereafter as the first payments hereunder are made by Lessee or Lessors, procure through their own efforts and at their own expense, and deliver to Lessee in a form suitable for recording, a statement or other agreement from the holder of any mortgage or lien against the real estate and premises covered by this agreement, subordinating said mortgage or mortgages and the lien created thereby to this agreement and to the rights of the Lessee hereunder, or in lieu thereof, Lessors may, at their election, pay any of said mortgages or other liens and have them released of record.\n\"15) Lessee, when it commences gypsum mining or quarrying operations, will do so and continue to do so in the manner and by the methods usual and customary for gypsum mining or quarrying operations at the times in question. However, it is realized that even though Lessee does so conduct its mining or quarrying operations, the surface of the real estate and premises covered by this agreement will be damaged and Lessors therefore, in consideration of the royalty payments provided for herein, agree to and do hereby release Lessee, its successors and assigns, of and from any claims for damages to themselves or to their property while on the surface of said real estate and premises and do further hereby agree to and do indemnify Lessee against any such loss or damage suffered by persons other than employees, agents or servants of Lessee and other than persons in or on said real estate and premises for the purpose of doing business with the Lessee, or suffered by the property of any such persons, all while lawfully on said real estate and premises.\"\nFor a period of several months prior to August 22d, 1945, the defendant had obtained the gypsum needed for its Fort Dodge plant by purchase from the United States Gypsum Company. Prior to that period the defendant had obtained such gypsum by mining operations conducted on a tract adjacent to that plant. Its mining operations on that tract were terminated by a cave-in. At the time of the negotiations between the parties and at the time of the execution of the option agreement of August 22d, 1945, and the lease of September 24th, 1945, the defendant did not have quarrying equipment. The gypsum deposit on the Carter-Merritt tract was overlaid with approximately fifty feet of earth. The removal of that overburden and the conducting of quarrying operations on the tract required a heavy type of equipment. Because of the shortages occasioned by World War II, it was difficult to secure such equipment. Following the execution of the agreement of September 24th, 1945, the defendant entered into a contract with Peter Kiewit Sons' Co., a corporation, for the installation of rock crushing facilities, the removal of the overburden and for quarrying a supply of gypsum. That corporation was engaged in the contracting business, apparently on a large scale, and had available the type and kind of equipment that was required. The contractor completed the installation of rock crushing facilities on the tract late in 1945 or early in 1946. That installation was a project of considerable size. By March, 1946, the contractor had completed the removal of the earth overburden in a \"cut\" on the western portion of the tract. In March, 1946, the contractor commenced extracting the exposed rock. He quarried on a large scale until in September, 1947, when his quarrying operations ceased. During that period he quarried over 450,000 tons of rock. No rock was extracted from October, 1947, through February, 1949. By February, 1949, the defendant had acquired its own quarrying equipment. It extracted rock from the Carter-Merritt tract from March, 1949, through October, 1949. It extracted rock from the Carter-Merritt tract in March, April, June, and *288 July of 1950 and again from September, 1950, through January, 1951, and again in the months of May, June, July, October, and November, 1951. On September 5th, 1947, the defendant entered into an agreement with the owners of a tract known as the Steiner tract relating to removal of gypsum therefrom. That tract is an 80 acre tract which adjoins the Carter-Merritt tract on the north. In October, 1949, the defendant commenced the extraction of gypsum rock from that tract. Since October, 1949, the defendant has conducted extensive quarrying operations on the Steiner tract. In such operations the defendant has sought to \"catch up\" with the line to which quarrying had been done on the Carter-Merritt tract. This would enable unified quarrying activities to take place along a straight \"front\" across the two tracts. The defendant deems that such unified activity would make for safety and economy. In 1949 and 1950 the defendant constructed a new factory building which greatly enlarged its facilities for the manufacture of wall board. That construction, together with other improvements, increased the capacity of its Fort Dodge plant from 80 per cent to 100 per cent. Such increased capacity has resulted in a large increase in its gypsum requirements. The gypsum requirements of the defendant increased from 157,228 tons in 1948 to 180,025 tons in 1950 and to 199,410 tons for the first nine months of 1951. The defendant sells and ships crushed rock to other processors. Those shipments have averaged around 30,000 tons a year. They have increased from 19,764 tons in 1946 to 43,805 tons for the first nine months of 1951. It is the claim of the defendant that in 1949 and 1950 it expended approximately $2,300,000.00 in expanding its Fort Dodge plant. From March, 1946, to the end of that year the defendant extracted 236,375.9 tons of rock from the Carter-Merritt tract. Its requirements for that period were 122,288 tons. During that period the ratio between the tons extracted from that tract and the defendant's requirements was 192.35 per cent. In 1947 the defendant extracted 228,167.75 tons from that tract. Its requirements for that period were 147,367 tons. During that period the ratio between the tons extracted from that tract and the defendant's requirements was 154.83 per cent. In 1948 it extracted no rock from that tract. During that year its requirements were 157,228 tons. In 1949 the defendant extracted 75,044.7 tons from that tract. Its requirements for that year were 141,067 tons. During that year the ratio between the tons extracted from that tract and the defendant's requirements was 53.18 per cent. In 1950 the defendant extracted 102,942.7 tons from that tract. Its requirements during that period were 180,025 tons. During that period the ratio between the tons extracted from that tract and the defendant's requirements for that year was 57.18 per cent. In 1951 through September the defendant extracted 74,494.8 tons from that tract. Its requirements during that period were 199,410 tons. During that period the ratio between the tons extracted from that tract and the defendant's requirements was 37.48 per cent. From March, 1946, and up until the time this action was started the ratio between the tons of rock extracted by the defendant from that tract and the defendant's requirements was 75+ per cent. The ratio has not been changed materially since the action was commenced. During the period from March, 1946, up to the date this action was commenced a total of about 720,000 tons of gypsum was quarried by defendant from plaintiffs' land, resulting in royalty payments to plaintiffs of about $72,000.00.\nIn the period from October through December, 1949, the defendant extracted 39,108.65 tons of rock from the Steiner tract. In the year 1950 it extracted 88,544.89 tons of rock from that tract. In 1951 it extracted rock from the Steiner tract from January through May and from July through September. During that period it extracted 128,311.79 tons. During the period from March, 1946, up to the present the defendant has not used at its Fort Dodge plant any gypsum rock that did not come from either the Carter-Merritt tract or the Steiner tract. The defendant made timely payment of the advance royalties *289 and of royalties for each month in which rock was extracted from the Carter-Merritt tract.\nThe defendant has made substantial expenditures in connection with its development and utilization of the Carter-Merritt tract which it classifies as being capital in character. Those expenditures are:\n\n\nCost of stripping $ 84,351.39\nCrushing plant 71,158.77\nFixed equipment 53,851.87\nMobile equipment 415,071.87\nRoad building 5,802.01\nMiscellaneous development expense 8,225.19\n ___________\n $638,461.10\n\nThe allocation of some of those items to the Carter-Merritt tract and the amount of all of the items is controverted by the plaintiffs. The allocation of the expense of mobile equipment to the Carter-Merritt tract would not seem to be justified, and a similar allocation of some of the other items is open to question. It does appear that the crushing plant and the fixed equipment are of such a nature that they could not be removed in the event of the termination of the lease.\nOn September 28th, 1951, the plaintiffs caused a notice of termination of tenancy to be served upon the defendant. In that notice the defendant was notified that its tenancy under the lease dated September 24th, 1945, was terminated because of nonpayment of rent. It was stated in the notice that it was being given pursuant to the provisions of Chapter 648, Code of Iowa 1950, I.C.A. That Chapter relates to the matter of the Forcible Entry or Detention of Real Property.\nOn October 2d, 1951, the plaintiffs filed their complaint herein. They ask that the Court declare the rights and duties of the defendant under the lease of September 24th, 1945, in respect to the 60 per cent requirement; that the Court adjudicate that the defendant has breached the lease by the non-payment of rent due thereunder; that the defendant be removed from the leased premises; that the plaintiffs be restored to possession of it; and that the plaintiffs recover the amount of rent ascertained to be unpaid.\nIt is the claim of the plaintiffs that the defendant was obligated by the lease and in particular by the italicized portions of the clauses set forth supra to extract from the Carter-Merritt tract each month an amount of gypsum equal to 60 per cent of the total amount used in the defendant's Fort Dodge plant during that month. Under this claim of the plaintiffs, the royalties due them would be computed on the following monthly basis: the number of tons of gypsum used by the defendant in its Fort Dodge plant during the month would be ascertained, then the defendant would be obligated to have extracted from the Carter-Merritt tract during that month rock of a tonnage equal to 60 per cent of the tonnage used. The plaintiffs seek to recover for each of 35 or 36 months in which the rock extraction by the defendant was not in accord with that formula. Computed on this basis, the amount of the plaintiffs' recovery (as stated by them in argument) would be between $35,000.00 and $40,000.00. It was similarly stated that if such formula is not to be applied on a monthly basis that it should be applied on an annual basis, and that if applied on an annual basis the amount of the plaintiffs' recovery would be approximately $12,000.00.\nIt is the claim of the plaintiffs that the formula heretofore referred to constitutes the correct construction of the lease as to the 60 per cent requirement. That claim is controverted by the defendant. It is the claim of the defendant that the 60 per cent requirement obliges it only to have extracted, as of any given date, an amount of gypsum equal to 60 per cent of its total plant requirements over the period between the date it commenced extracting rock on the Carter-Merritt tract in March, 1946, and the date in question. In that connection a portion of the arguments was devoted to the discussion of stockpiled rock. As heretofore noted, the defendant early in the lease period had a contractor remove over 450,000 tons of rock from the Carter-Merritt tract in a comparatively short period, for which timely payment of royalties was made. That rock was stockpiled and was *290 sufficient for the defendant's requirements for approximately three years ahead. Thus up to October, 1949, 100 per cent of the gypsum used in the defendant's Fort Dodge plant came from the Carter-Merritt tract. It was claimed by the plaintiffs in argument that under the formula referred to, even though 100 per cent of the rock used by the defendant in a particular month or year came from the Carter-Merritt tract, the defendant nevertheless was obligated during that same month or year to have extracted rock from that tract which was equal in tonnage to 60 per cent of the rock used. The defendant argued that such claim on its face manifested the erroneousness of the construction placed upon the lease by the plaintiffs.\nThe defendant claims that since, during the period from the commencement of quarrying operations up until the present time more that 60 per cent of the rock used by it in its Fort Dodge plant has been secured from the Carter-Merritt tract, it is not in default in the performance of the provisions of the lease on its part to be performed. It asks for a declaration to that effect.\nConsiderable portions of the written briefs and a considerable portion of the oral arguments were devoted to the discussion of implied covenants.\nPlaintiffs contend that the law of implied covenants as to mineral rights is applicable to this case. Numerous cases are cited for the proposition that, where the consideration for the lessor's execution of a mining lease is a promise to pay royalties on the mineral extracted, the lessee impliedly covenants to exercise reasonable diligence to develop the leased property and to conduct mining operations on the leased premises in a proper and reasonably diligent manner thereafter. See, e. g., Price v. Black, 1905, 126 Iowa 304, 101 N.W. 1056; McColl v. Bear Creek Coal Mining Co., 1913, 162 Iowa 491, 143 N.W. 532; Freeport Sulphur Co. v. American Sulphur Royalty Co., 1928, 117 Tex. 439, 6 S.W.2d 1039, 60 A.L.R. 890; Stoddard v. Illinois Improvement & Ballast Co., 1916, 275 Ill. 199, 113 N.E. 913; Mendota Coal & Coke Co. v. Eastern Ry. & Lumber Co., 9 Cir., 1931, 53 F.2d 77; Habermel v. Mong, 6 Cir., 1929, 31 F.2d 822, 67 A.L.R. 216. See also, Taylor v. Kingman Feldspar Co., 1933, 41 Ariz. 376, 18 P.2d 649; Jackson v. Gilbert, 1950, 216 Ark. 501, 226 S.W.2d 59; Winn v. Collins, 1944, 207 Ark. 946, 183 S. W.2d 593; Rains Coal Corp. v. Southern Coal Co., 1941, 202 Ark. 1077, 155 S.W.2d 348; Daughetee v. Ohio Oil Co., 1914, 263 Ill. 518, 105 N.E. 308; Pritchard v. McLeod, 9 Cir., 1913, 205 F. 24; People's Gas Co. v. Dean, 8 Cir., 1911, 193 F. 938; Brewster v. Lanyon Zinc Co., 8 Cir., 1905, 140 F. 801; Annotation, 60 A.L.R. 901; Merrill, Covenants Implied in Oil and Gas Leases, Sec. 218 (2d Ed. 1940), especially cases cited in footnote 10, p. 456, and in the 1950 pocket supplement.\nThe rationale underlying such implied covenants has been summarized by Merrill, supra, as follows (Sec. 221): \"We have seen that the courts, in varying language, base the doctrine of implied covenants * * * upon the ground that the lessor's chief remuneration is to be derived from the royalties resultant from development and operation; that this remuneration constitutes his chief inducement for executing the lease, that therefore the lease, in all respects, must be construed as having written into it this duty of diligently promoting the productivity of the premises.\"\nSee also, Trust Co. of Chicago v. Samedan Oil Corp., 10 Cir., 1951, 192 F.2d 282, 284, where it is said that a prudent operator \"must not forget that the primary consideration to the lessor for the lease is royalty from the production of the lease free of cost of development and operation.\" Such being the reason for the implied covenants, they are generally considered to be implied in fact rather than in law, see Merrill, supra, Sec. 220. The statement is often made that such covenants are as much a part of the lease as if expressed therein. See, e. g., Brewster v. Lanyon Zinc Co., 8 Cir., 1905, 140 F. 801, 809; Freeport Sulphur Co. v. American Sulphur Royalty Co., supra, 6 S.W.2d at page 1042, 60 A.L.R. at page 895. See also, Walker v. Howell, 1929, 209 Iowa 823, 226 N.W. 85, 87.\nIt has been stated that the English courts do not recognize such implied covenants. *291 Freeport Sulphur Co. v. American Sulphur Royalty Co., supra, 6 S.W.2d at page 1042, 60 A.L.R. at pages 895-896, citing Merrill, supra. A recent Maine decision questions, without deciding, whether the doctrine of implied covenants should be applied in states in which mining is not a substantial industry. United Feldspar & Minerals Corp. v. Bumpus, 1946, 142 Me. 230, 49 A.2d 473. Of this case Merrill says (Sec. 218, 1950 pocket supplement to footnote 10): \"This seems to be the first time that the highest court of any American jurisdiction had indicated a disposition to question the implied covenant doctrine.\"\nIt has been held that implied covenants of reasonably diligent development and operation are especially necessary to protect the lessor in leases dealing with oil or gas, because of the migratory nature of such substances. See, e. g., Logan Natural Gas & Fuel Co. v. Great Southern Gas & Oil Co., 6 Cir., 1903, 126 F. 623, 625; Brewster v. Lanyon Zinc Co., supra, 140 F. at pages 810-811.\nThe implied covenant of reasonably prompt development is a separate matter from the implied covenant of reasonably diligent operation. See Freeport Sulphur Co. v. American Sulphur Royalty Co., supra, 6 S.W.2d at page 1043, 60 A.L.R. at pages 897-898, and Annotation, 60 A.L.R. 901. No question is raised as to the defendant's diligence in developing the Carter-Merritt tract. Defendant had stripped off the overburden of earth and had commenced quarrying gypsum by March, 1946, when under the lease it did not have to do so until January 1st, 1947. Therefore the only problem as to implied covenants here involves the implied covenant of reasonably diligent operation.\nSuch an implied covenant was recognized, in dictum, by the Iowa Supreme Court in Price v. Black, 1905, 126 Iowa 304, 101 N.W. 1056, 1057. In that case the lessor of coal land sought an injunction against the lessee's trespassing on the leased premises, claiming the lessee had abandoned the lease. The Supreme Court upheld the trial court in denying the injunction, holding that there had been no abandonment of the lease for failure to produce coal for two years where the operations had been suspended only because of difficulties in operating the mine and where the lessee, shortly prior to the commencement of the action, had gone to considerable expense to install a shaft so that the coal could be mined profitably. The Court expressly refused to consider whether there had been a breach of the implied covenant to work the mine with reasonable diligence or whether damages could be recovered or a forfeiture declared because of such a breach. In McColl v. Bear Creek Coal Mining Co., 1911, 162 Iowa 491, 143 N.W. 532, 534, however, the Price case is cited for the proposition that breach of the duty to prosecute the work with reasonable diligence is a ground of forfeiture. The Court points out, 143 N.W. at page 537: \"The distinction between forfeiture and abandonment is that, unlike abandonment, there is no question of intent involved in forfeiture. In forfeiture the question is whether the contract or law has been complied with.\"\nIn the McColl case the Court held that the lessee had abandoned its coal mining lease, and affirmed a decree in equity cancelling it. The lessee, in that case, had done nothing during the first two years of a 25 year lease other than to make a few abortive attempts to mine coal during the first few weeks or months of the term. The Court held that this conduct indicated an intent to abandon the lease, and that it would be inequitable to allow the lessee to keep the lessor's reserves tied up for 25 years on the hope that royalties might commence coming in at some time before the end of that period. It is clear that the McColl case involved the implied covenant of reasonably prompt development rather than the implied covenant of diligent operation, which is claimed to be applicable to the instant case.\nNo other Iowa cases on implied covenants in mineral leases have been cited, and no others have reached the Court's attention. It seems clear that the Iowa Supreme Court has never passed directly on the question of whether an action for damages will lie for breach of the implied covenant of reasonably diligent operation of leased mineral-bearing premises. The Iowa Court has upheld awards *292 of money damages in cases where express contractual provisions to pay minimum dollar royalties have been breached. See Rowland v. Anderson Coal Co., 1917, 179 Iowa 987, 162 N.W. 321; Saylor Park Land Co. v. Glenwood Coal Co., 1917, 179 Iowa 919, 162 N.W. 203; Flynn v. White Breast Coal & Min. Co., 1887, 72 Iowa 738, 32 N.W. 471. In the light of the latter cases and of the dicta in the Price and McColl cases, supra, it would seem reasonable to conclude that the Iowa Court, in a proper case, would allow an action for damages for breach of the implied covenant for reasonably diligent operation of a mine on leased premises. Cf. Stoddard v. Illinois Improvement & Ballast Co., 1916, 275 Ill. 199, 113 N.E. 913 (involving abandonment of operations).\nThe next question to be considered is whether or not the law of implied covenants is pertinent to this case. In Brimmer v. Union Oil Co., 10 Cir., 1936, 81 F.2d 437, 105 A.L.R. 454, certiorari denied, 1936, 298 U.S. 668, 56 S.Ct. 833, 80 L.Ed. 1391, the following appears, 81 F.2d at page 440: \"An express covenant upon a given subject, deliberately entered into without fraud or mutual mistake, excludes the possibility of an implied covenant of a different or contradictory nature.\"\nSee also, to this effect, Freeport Sulphur Co. v. American Sulphur Royalty Co., supra, 6 S.W.2d at page 1043, 60 A.L.R. at page 897; Adkins v. Adams, 7 Cir., 1945, 152 F.2d 489, 492; Frierson v. International Agricultural Corp., 1940, 24 Tenn.App. 616, 148 S.W.2d 27; Weatherly v. American Agricultural Chemical Co., 1933, 16 Tenn.App. 613, 65 S.W.2d 592; Merrill, supra, Sec. 219. Cf. Lautenbach v. Meredith, 1949, 240 Iowa 166, 35 N.W. 2d 870; Hodgson v. Keppel, 1930, 211 Iowa 795, 232 N.W. 725. If, then, the parties to this action have expressly contracted on the subject of defendant's obligation to operate the quarry and the extent of such operation, there can be no implied covenant of reasonably diligent operation. Plaintiffs claim that the implied covenant of reasonably diligent operation arises unless the lease explicitly provides otherwise. The defendant does not controvert that claim. The question in the present case is whether or not the lease in question contains such an express provision.\nThe lease does contain a provision on the general subject of defendant's duty to operate the quarry and the extent of such operation. Such provision is made in Paragraph 10 of the lease, providing that defendant must extract 60 per cent. of the requirements of its Fort Dodge plant from the Carter-Merritt tract. It is the claim of the defendant that such provision is of such a character as to prevent a covenant from being implied with respect to the matter of operation. The plaintiffs contend that the only sort of express provision which can defeat such an implied covenant is a provision providing for a minimum royalty. Thus they contend that the defendant is faced with the dilemma of having to concede that the lease provides a definite minimum royalty which it must pay, or that there is an implied covenant of reasonably diligent operation with the 60 per cent formula set as the standard of diligence.\nThe first portion of the posed dilemma, i.e., a minimum royalty, is not involved in this case. The lease in question is geared to the requirements of a particular plant, and such requirements are determined by the demand for the products of that plant. It appears that during depression days the state of demand for gypsum products might be such that the gypsum plants in the Fort Dodge area would be closed for long periods of time. In the present case, if at any time the state of the demand for the products of the defendant's plant does not warrant operation of the plant, the plaintiffs would receive no royalties as long as that condition existed. Since the royalties the plaintiffs are to receive are geared directly to the demand for the products of the plant, the plaintiffs are not assured of any minimum royalties either on a monthly or annual basis, and are not assured of a steady income from royalties. Their royalties go up or down or cease entirely depending upon the state of demand for the products of the plant.\nIt is next to be considered whether the plaintiffs' assumption that the only provision *293 which can prevent the implication of a covenant of reasonably diligent operation is a provision for a minimum royalty is well founded. While most of the cases cited by the plaintiffs on this point were cases in which the courts refused to imply covenants because of provisions providing for minimum royalties, it does not necessarily follow that such provisions are the only provisions which can have that effect. Provisions for minimum royalties relate to the subject of the utilization of mineral land. In the present case the parties covered the matter of such utilization by an express provision which gears the utilization to the requirements of the defendant's plant. It is not believed that a provision for a minimum royalty is the only provision that will meet the requirements of the rule referred to. It is believed that, where the parties to a mineral lease have, as in the present case, made express detailed provisions gearing the rate of mineral extraction to the requirements of a particular plant, the implied covenant of reasonably diligent operation is of doubtful applicability.\nIt would seem that the controversy resolves into the question of whether the defendant has complied with such express provisions. It is the claim of the plaintiffs that the defendant has not complied with the 60 per cent requirement. The plaintiffs' construction of that requirement, as heretofore noted, is that the defendant is obligated, either each month or each year, to extract from their land an amount of gypsum equal to 60 per cent of its plant requirements for that month or year. If such is the correct construction, then the defendant has not complied with the provisions of the lease. The basic question, then, is whether under the lease the 60 per cent requirement is to be computed on the basis of a monthly or yearly time period. The determination of that question requires a construction of the provisions of the lease.\nThe plaintiffs claim that the lease was prepared by the defendant, and that therefore the language of the lease should be construed against it. Such rule of construction is applicable in certain situations. See, e.g., Pazawich v. Johnson, 1949, 241 Iowa 10, 39 N.W.2d 590, 592; Marty v. Champlin Refining Co., 1949, 240 Iowa 325, 36 N.W.2d 360; Vorthmann v. Great Lakes Pipe Line Co., 1940, 228 Iowa 53, 289 N.W. 746; Andrew v. Austin, 1930, 213 Iowa 963, 232 N.W. 79; 17 C.J.S., Contracts, \u00a7 324. It has been stated that: \"The rule is never applied to words which are the common language of both parties, even though they are put in writing by one of the parties.\" 17 C.J.S., Contracts, \u00a7 324, p. 754.\nIn order to determine the applicability of the rule to the present case it is necessary to consider the circumstances preceding and surrounding the execution of the lease and of the option agreement which preceded it.\nFor some years prior to August 22d, 1945, William J. Carter and Maurice J. Breen had attempted to interest gypsum processors in the removal of gypsum rock from the Carter-Merritt property. As early as 1943 Maurice J. Breen had conferred with a representative of the defendant in regard to that matter. Around August 14th, 1945, William J. Carter went to Chicago and had a conference with the defendant's president, Rawson Lizars. Nothing came of that conference. On August 21st, 1945, William J. Carter and Maurice J. Breen went to Chicago and on August 22d, 1945, they conferred with Rawson Lizars, the defendant's president, Arthur O. Graves, its secretary, and some of the other of defendant's officers. Maurice J. Breen had practiced law in Fort Dodge since 1919. He had a broad background of experience as to gypsum leases and other phases of the gypsum industry. Arthur O. Graves, the defendant's secretary, had practiced law in the State of Illinois prior to being associated with the defendant. He had a broad background of experience with gypsum leases and the gypsum business in general. William J. Carter was a real estate broker at Fort Dodge, Iowa. He had been familiar with the gypsum industry in and around Fort Dodge for a long period of time. At one time he served *294 as receiver of the Universal Gypsum Company of Fort Dodge. During the forenoon of August 22d, 1945, various proposals and counter-proposals were made and considered. Following that conference, in the afternoon of the same day, Arthur O. Graves dictated the option agreement dated August 22d, 1945, in the presence of Mr. Maurice J. Breen and Mr. William J. Carter, which was then executed by William J. Carter and Maurice J. Breen in behalf of the owners of the Carter-Merritt tract. Following the election of the defendant to exercise the option, Arthur O. Graves, in behalf of the defendant, prepared a proposed lease which was sent to Maurice J. Breen. Maurice J. Breen and William J. Carter rejected that lease. Maurice J. Breen by letter and by telephone and William J. Carter by telephone suggested certain changes in the proposed lease. William J. Carter was familiar with the changes suggested by Maurice J. Breen and approved of them. A number of their proposed changes were satisfactory to Arthur O. Graves, and the lease was redrafted to incorporate such changes. A substantial portion of Paragraph 10 \u0097 the crucial paragraph in this litigation \u0097 embodies the suggestions contained in a letter written by Maurice J. Breen. Following the negotiations as to the changes, Arthur O. Graves drafted the lease dated September 24th, 1945, and it was executed by the parties. It has been held that the rule that a writing is to be construed against the one preparing it is not applicable where the contract is prepared with the aid and approval of an attorney for each party to the contract. See Bee Bldg. Co. v. Peters Trust Co., 1921, 106 Neb. 294, 183 N.W. 302. In the present case the lease which is the subject matter of the action was the result of negotiations between parties who were all represented by legal counsel with long and specialized experience in the particular field, and where one of the parties to the negotiations was a real estate broker with experience in that field. It was drafted in final form following careful scrutiny of its proposed provisions and following suggestions and counter-suggestions in regard thereto by such counsel and such broker. The Court is of the view that under such circumstances the rule contended for by the plaintiffs is not of determinative significance.\nThe construction of the provisions of the lease in regard to the matter of the time period will next be considered. No definite time period was expressed in the lease. Paragraph 10 of the lease, quoted supra, does not say that an amount equal to 60 per cent of defendant's plant requirements must be quarried in each month or in each year. The wording is at least as susceptible to the interpretation placed on it by defendant, of an ever-lengthening term over which 60 per cent must have been taken, as it is to plaintiffs' interpretation. The words \"continue to do so\" in Paragraph 10 do not link the 60 per cent formula with any definite time period. Paragraph 6 of the lease provides that the royalty payments shall be made on or before the 15th of each month, based on the quantity of gypsum quarried the previous month. Plaintiffs argue that by this provision the parties set the month as the unit for reckoning between themselves, and that the 60 per cent formula must therefore be computed on a monthly basis. The language of the lease does not support this conclusion. The use of the word month is confined to Paragraph 6, which purports only to deal with the subject of payments. Nothing is said therein about the 60 per cent formula, and nothing is said about any time period in any of the paragraphs mentioning the 60 per cent feature. Neither Paragraph 10 nor Paragraph 6, then, expressly set any time period over which to compute the 60 per cent formula. No other provision in the lease purports to set a time period. The plaintiffs, in effect, are asking that the Court hold that the parties impliedly agreed to a monthly or yearly time period.\nIt has been stated that \"a contract includes not only the terms set forth in express words, but in addition all implied provisions indispensable to effectuate the intention of the parties and to carry out the contract * * *.\" Watson Bros. *295 Transp. Co. v. Jaffa, 8 Cir., 1944, 143 F.2d 340, 348. See also, Freeport Sulphur Co. v. American Sulphur Royalty Co., supra, 6 S.W.2d at page 1041, 60 A.L.R. at page 895, and authorities cited therein; 17 C.J. S., Contracts, \u00a7 328. In Watson Bros. Transp. Co. v. Jaffa, supra, the Court further states, 143 F.2d at page 348: \"In determining whether the principle is applicable, the nature of the contract, the circumstances under which it was made, the situation of the parties and the objects they had in view in making the contract should be considered.\"\nSee also to this effect, Aultman v. Meyers, 1948, 239 Iowa 940, 33 N.W.2d 400, 405, and numerous cases cited therein. Of course this principle as to implying provisions in contracts is subject to the general limitation that a covenant as to a subject cannot be implied where there is an express covenant on the matter, discussed supra. However, there being no express covenant on the matter of a time period, the question of whether it is necessary to imply an agreement on a time period of a month or a year in order to effectuate the intent of the parties and to carry out the purposes of the contract will next be considered.\nDuring the negotiations the plaintiffs proposed that they be paid a bonus for executing the lease and that the lease provide for the payment of definite minimum royalties. The defendant's president, Rawson Lizars, informed them that he was familiar with the financial history of the gypsum industry and that he had found that royalty agreements which bound gypsum plants to pay for rock not extracted had frequently involved gypsum plants, including the one in the Fort Dodge area of which William J. Carter had been receiver, in financial difficulties leading to bankruptcy or receivership proceedings. He informed them that he would not commit the defendant to pay a definite amount or any amount as royalties in any given time period or otherwise bind the defendant to pay for rock which it had not extracted. To avoid such contingency, but at the same time to provide for what he regarded as an equitable provision as to royalties, he proposed the 60 per cent provision.\nIt is possible that the plaintiffs misunderstood Rawson Lizars and that they actually did not intend that the option and lease have the meaning that the defendant understood it to have. If such was the case, and the parties never made any agreed exchange of promises with respect to the time period, it would appear difficult to see how they could have entered into any jural relations on the subject such as would give rise to the right to recover damages for its non-observance. Section 622.22, Code of Iowa, 1950, I.C.A., would seem to be applicable. That section provides as follows: \"When the terms of an agreement have been intended in a different sense by the parties to it, that sense is to prevail against either party in which he had reason to suppose the other understood it.\"\nThis section has been applied by the Iowa Supreme Court on numerous occasions. See annotations to Section 622.22 in Iowa Code Annotated. Applying the rule of construction provided by that section to the present case, it would seem that since the plaintiffs, at the time they executed the lease and option, knew that the defendant would not agree to any minimum royalty provision which would subject it to the contingencies referred to, they had ample reason to believe that the defendant would not assent to linking the 60 per cent requirement with time periods of a month or year, when the necessary effect of such linking would be to subject the defendant to pay for rock not extracted. Conversely, and for the same reasons, the defendant would not have had reason to believe that the plaintiffs understood the lease to mean what plaintiffs now claim.\nIt is well settled that where contracts are of doubtful meaning the practical construction placed upon them by the parties is of importance. See, e.g., Old Colony Trust Co. v. City of Omaha, 1913, 230 U.S. 100, 118; 33 S.Ct. 967, 57 L.Ed. 1410; Terry v. Muller, 8 Cir., 1951, 190 F.2d 170, 173; Thompson v. Thompson, 8 Cir., 1946, 156 F.2d 581, 586; Darnall v. Day, 1949, 240 Iowa 665, 37 N.W.2d *296 277, 280; Dodds Co. v. Consolidated School Dist., 1935, 220 Iowa 812, 263 N.W. 522; Edwards v. Wagner, 1921, 191 Iowa 822, 183 N.W. 450; Tooey v. C. L. Percival Co., 1921, 192 Iowa 267, 182 N.W. 403. It is also held that the contemporaneous attitudes of the interested parties, whether involving action or inaction, are of significance in determining the actualities of a situation. Irving Trust Co. v. Deutsch, D.C.N.Y., 1932, 2 F.Supp. 971, 989. It appears that William J. Carter, save for a period (or for periods) when he was in Arizona, visited the quarry almost daily and was familiar with the manner by which and the extent to which the defendant was extracting rock from the Carter-Merritt tract. While Maurice J. Breen was at the quarry infrequently he was familiar with the manner and extent of defendant's quarrying operations.\nThe plaintiffs made no complaint during the 17 month period from October, 1947, through February, 1949, in which they now claim the defendant was not complying with the lease. The plaintiffs made their first complaint on July 15th, 1950. Such complaint was contained in a letter of that date written by Maurice J. Breen. In the same letter he stated that the time period in connection with the 60 per cent clause was one year. In a subsequent letter he stated that he thought that, taken literally, the lease provides for a monthly time period in connection with that provision.\nThere was certain correspondence between William J. Carter and the defendant which tends to indicate the view which William J. Carter took of the 60 per cent requirement early in 1949. Under Paragraph 12 of the lease, it is provided that if the Lessors send it the bill for taxes owing, the Lessee is obligated to pay the real estate taxes on the leased property, but may deduct the amount of such taxes from the first royalty payment due thereafter. In a letter dated December 31st, 1948, the defendant's tax department wrote to William J. Carter making inquiry as to the status of the taxes for the periods after 1946. In response thereto William J. Carter wrote the defendant a letter dated January 8th, 1949, which reads, in part, as follows: \"Under the lease, if there is any money due us on royalties, Certain-teed are to pay the taxes, but as there was no rock removed in the year 1948, the taxes were paid by us. There will be no further taxes due until March 31, 1949. If at that time, any rock has been removed, it will be up to Certain-teed to pay the taxes and we will furnish them with statement of the amount due. In the event no rock has been removed and no royalties are due, we will pay the taxes.\"\nThe relation between William J. Carter and the other owners of the property is that of tenants in common. It is well settled that the mere fact that persons are tenants in common does not give rise to an agency relationship between them. 14 Am.Jur., p. 78. Ordinarily the actions or undertakings of one tenant in common are not binding on his cotenants. 14 Am.Jur., p. 147. While William J. Carter could not bind his cotenants by his statements, yet since he was an interested party in negotiating the lease and was very familiar with the entire situation and background, his contemporaneous attitude as to and contemporaneous understanding of the 60 per cent provision is enlightening as to the actualities of the situation.\nIn the course of oral argument it was claimed that the reason that the plaintiffs did not until July 15th, 1950, make complaint that the defendant was not complying with the terms of the lease was that until shortly prior to that time all of the rock that the defendant was using in its plant came from the Carter-Merritt tract. The defendant points out that under the formula which the plaintiffs contend represents the correct construction of the 60 per cent provision, the defendant's operations in 1947, 1948 and the forepart of 1949 were even more violative of the 60 per cent provision than they were at the time the plaintiffs made complaint; and that in effect the plaintiffs claim that their claimed formula is applicable at certain times but not at others.\nThe plaintiffs claim, as heretofore noted, that the lease in question includes an implied covenant of reasonably diligent *297 operation. They further claim that such implied covenant carries with it the obligation of continous operation. They cite, among other cases, the case of Mendota Coal & Coke Co. v. Eastern Ry. & Lumber Co., 9 Cir., 1931, 53 F.2d 77, at page 80, where the Court states: \"Where, as here, a lease is entered into with no provision for minimum royalties required, there must necessarily be a strong implied obligation for the lessee to develop and mine the coal diligently and continuously.\"\nSee also, Mansfield Gas Co. v. Alexander, 1911, 97 Ark. 167, 133 S.W. 837. The plaintiffs also contend that the lease itself provides for continuous quarrying operations. This last contention will be first considered. They argue that the words \"continue to do so\" in Paragraph 10 of the lease impose an obligation on the defendant not to have gaps of any appreciable length of time in its quarrying operations. That clause does not say, however, that the defendant will extract rock continuously. The words \"continue to do so\" refer back not to a simple promise to extract rock, but to the 60 per cent requirement, as to which no period of time is specified. It is heretofore noted that whether the defendant will have any requirements at all is dependent upon the state of the demand for the products of its plant. The phrase \"continue to do so\" in Paragraph 15 to which the plaintiffs call attention would seem not to be any more helpful to them than are the same words in Paragraph 10. Paragraph 15 deals with the methods defendant is to employ in extracting rock from plaintiffs' land, rather than with the extent or continuity of such extraction. Plaintiffs contend that an inference that constant quarrying was agreed on is also raised from Paragraph 7 of the lease, providing that accounts of gypsum extracted shall be furnished to the Lessors at their request at any and all reasonable times, and giving the Lessors access to Lessee's weight and production records to determine whether at least 60 per cent of Lessee's gypsum requirements are being extracted. However, the paragraph does not explicitly require continuous quarrying and does not purport to deal with that subject. The lease does not expressly impose on the defendant a duty to continuously extract rock.\nWith respect to the claim of the plaintiffs that the implied covenant of reasonably diligent operation carries with it the obligation of continuous operation, it would seem that the matter of continuity is not something apart from the matter of reasonable diligence, but that it is merely an element of diligence.\nThe plaintiffs claim that the defendant is attempting to satisfy the claimed requirement of diligence by what is known as \"averaging.\" In that connection they cite the following cases in support of the proposition that, unless the parties expressly provide otherwise, a failure to pay royalties during one period cannot be excused by the fact that royalties in excess of a required minimum or in excess of a reasonable minimum have been paid in a prior period. Freeport Sulphur Co. v. American Sulphur Royalty Co., supra, 6 S.W.2d at page 1044, 60 A.L.R. at pages 898-899; Smith v. Godfrey, Tenn.Ct.Ch. App., 1898, 48 S.W. 303; Corona Coal Co. v. Hendon, 1926, 214 Ala. 139, 106 So. 855; Vandalia Coal Co. v. Underwood, 1913, 55 Ind.App. 91, 101 N.E. 1047; Chase v. Knickerbocker Phosphate Co., 1898, 32 App.Div. 400, 53 N.Y.S. 200, 225; Woodruff v. Gunton, 1909, 222 Pa. 384, 71 A. 851; Greenough v. Colonial Colliery, 1938, 132 Pa.Super. 270, 1 A.2d 174; Minnehaha Land & Inv. Co. v. Consol. Sand & Stone Co., 1935, 64 S.D. 48, 264 N.W. 198; Elkhorn Coal Corp. v. By-Products Coal Co., 1931, 237 Ky. 436, 35 S.W.2d 898. The plaintiffs thus conclude that the fact that the defendant made large royalty payments in 1946 and 1947 does not excuse it from compliance during subsequent months and years with the formula which the plaintiffs claim is the applicable formula for the computation of royalty payments for such subsequent months and years. In all of the cases listed above, other than the Freeport Sulphur case, there were express minimum royalty agreements. As heretofore noted, the lease in the present case contains no minimum royalty provision. In the Freeport Sulphur case there was no minimum royalty provision. In that case, which involved *298 a sale of land for consideration of cash and royalties, the Texas Supreme Court refused to imply a covenant for reasonably diligent development, because the parties had expressly contracted on that matter, but the Court did imply a covenant for reasonably diligent operation. It was held that under such a covenant a shutdown of mining operations for a period of two years presented a jury question as to whether the lessee had conducted operations with reasonable diligence. Thus, what was held in that case was that a covenant of reasonably diligent operation should be implied, and that the question as to whether there was a breach of that covenant was to be determined by the trier of the facts. It has been heretofore noted that the Court is of the view that it is doubtful whether in the present case there is a satisfactory basis for the implication of covenants. As stated in Adkins v. Adams, 7 Cir., 1945, 152 F.2d 489, 492: \"The courts cannot make contracts for parties, and can declare implied covenants to exist only when there is a satisfactory basis in the express contracts of the parties which makes it necessary to imply certain duties and obligations in order to effect the purposes of the parties in the contracts made. Before a covenant will be implied in the express terms of a contract, it must appear therefrom that it was so clearly in the contemplation of the parties as that they deemed it unnecessary to express it, and therefore omitted to do so, or that it is necessary to imply such covenant in order to give effect to and effectuate the purpose of the contract as a whole.\"\nThe Texas Supreme Court, in the Freeport Sulphur case [6 S.W.2d at page 1044], quotes the Eighth Circuit case of Brewster v. Lanyon Zinc Co., 1905, 140 F. 801, 814, as setting forth the test of reasonable diligence, viz.: \"Whatever, in the circumstances, would be reasonably expected of operators of ordinary prudence, having regard to the interests of both lessor and lessee, is what is required.\"\nEven if a covenant of reasonably diligent operation were to be implied in the present case, and giving due weight to plaintiffs' contentions that the matter of continuity of operation is an element of diligence, the Court, as the trier of the facts in this case, is of the view that the defendant has met the test of diligence formulated in the Eighth Circuit case quoted above.\nIt is also to be noted that where a mining lessee has made large expenditures in developing the leased premises, the courts are very reluctant to decree a forfeiture of the lease for breach of an implied covenant unless it is the only adequate remedy available to the lessor. See, e.g., W. T. Waggoner Estate v. Sigler Oil Co., 1929, 118 Tex. 509, 19 S.W.2d 27; Union Sulphur Co. v. Texas Gulf Sulphur Co., Tex.Civ.App., 1931, 42 S.W.2d 182; Wisdom v. Minchen, Tex.Civ.App., 1941, 154 S.W.2d 330. Cf., Nelson v. Schoettgen, 1934, 1 Cal.App.2d 418, 36 P.2d 665.\nThe plaintiffs contend that unless their construction of the lease be adopted the defendant will be able to make use of the surface of their land during periods when they are receiving no rent for such use. Paragraph 8 of the lease gives the Lessee extensive rights to use the surface of the leased land, including the right to haul over said premises rock quarried from other lands, \"and for any other uses and purposes necessary or convenient in connection with Lessee's mining or quarrying operations before, during and after the mining, quarrying and removal of the gypsum or plaster rock from the real estate and premises of Lessors.\"\nThe defendant contends that the rent is included in the royalty payments and that, since it has at all times been ahead of the 60 per cent requirement, it has in effect paid the rent for the use of the land in advance, and that the plaintiffs should not be heard to complain because defendant's rent payments are made in advance instead of currently. The Court is of the view that the position of the defendant is well taken.\nOn the over-all aspect of the case, the defendant asserts in a somewhat hurt and injured manner, that because of plant expansion on the part of the defendant not contemplated by the plaintiffs at the time the lease in question was entered into and because of its increased shipments to other *299 processors and because, during the entire period of the lease it has extracted from the Carter-Merritt tract rock equivalent to 75 per cent of its requirements instead of 60 per cent, the plaintiffs have received as royalties to date amounts which were beyond the fondest expectations of the plaintiffs at the time the lease was entered into, and that the performance of the defendant under the lease has not been a case of \"too little and too late,\" but, if anything, \"too much and too soon.\" The defendant further asserts that the plaintiffs have taken and do take inconsistent and contradictory positions in regard to the construction of the 60 per cent provision, while its position in regard thereto has been consistent throughout. The lease in question was negotiated by parties who dealt at arms' length. Throughout the negotiations their rights were safeguarded by experienced legal counsel. The parties were represented in the negotiations by men who were well and thoroughly informed as to matters having to do with the leasing of gypsum land. Its provisions were carefully and thoroughly scrutinized by such representatives before it was executed. For a period of several years the contemporaneous attitude of the parties as to its construction was the same. The plaintiffs now make a belated claim for a different construction. Under the lease the defendant has extracted rock from the plaintiffs' land in an amount which is substantially in excess of 60 per cent of its requirements from the commencement of the lease up to date, and the plaintiffs have received as royalties amounts in excess of what they had any reason to anticipate at the time they executed the lease. Under the construction of the lease claimed by the plaintiffs, the defendant would, for many of the months as to which the plaintiffs claim it is in default, have to pay for rock not quarried by it even though during such months 100 per cent of the rock being used in its plant came from the Carter-Merritt tract. The construction of the lease claimed by the plaintiffs would, it is believed, bring about unfair and unjust results.\nThe plaintiffs cast their pleading in this action in the form of an application for declaratory relief with dependent coercive relief. The plaintiffs prior to the commencement of the action had, so far as they were concerned, elected to terminate the lease because of the alleged violation of its terms and provisions by the defendant and had given the statutory notice under the Iowa law. Such notice is a prerequisite to an action of detainer to recover possession of real estate. The plaintiffs' present action is in reality one for the recovery of the leased premises as against the defendant, who they claim is holding over after its lease had been terminated, because of its violations of the terms and provisions thereof and for the recovery of damages for the violations that gave rise to the termination, rather than an action for declaratory relief. That discrepancy is not a matter of practical importance, since there is diversity of citizenship and the requisite jurisdictional amount is present, and the parties have fully litigated the issues between them in connection with the lease. The judgment herein can be framed in accordance with the realities of the litigation. The real question litigated in this case was whether the defendant had violated the terms and provisions of the lease. Violations of the provisions of a lease are not presumed. In this case the burden was upon the plaintiffs to establish that the defendant had violated the terms and provisions of the lease. It is the holding of the Court that the plaintiffs have not sustained that burden. It is the order of the Court that judgment shall be entered herein in favor of the defendant.\nNOTES\n[1] See article, \"The Rock Nobody Knows,\" 44 Nature Magazine, pp. 538-540 (December, 1951). The greater portion of the information contained in this paragraph was obtained from that article.\n"} -{"text": "\n582 F.Supp.2d 434 (2008)\nBecky A. PETTEY, Plaintiff,\nv.\nMichael J. ASTRUE, Commissioner of Social Security, Defendant.\nNo. 07-CV-6428L.\nUnited States District Court, W.D. New York.\nOctober 15, 2008.\n*435 Howard D. Olinsky, Olinsky & Shurtliff, LLP, Syracuse, NY, for Plaintiff.\nJohn J. Field, U.S. Attorney's Office, Rochester, NY, for Defendant.\n\nDECISION AND ORDER\nDAVID G. LARIMER, District Judge.\nPlaintiff appeals from a denial of disability insurance benefits by the Commissioner of Social Security (\"the Commissioner\"). The action is one brought pursuant to 42 U.S.C. \u00a7 405(g) to review the final determination of the Commissioner.\nOn May 17, 2004, plaintiff filed an application for supplemental security income benefits under Title II of the Social Security Act, alleging a disability onset date of July 1, 1999 due to depression, posttraumatic stress disorder (\"PTSD\"), panic disorder, and emphysema/asthma. Her application was initially denied. (T. 139, 168, 172). Plaintiff requested a hearing, which was held on September 12, 2006 via teleconference before Administrative Law Judge (\"ALJ\") Edward J. Banas. (T. 13-21). Following the hearing, the ALJ issued a decision on October 16, 2006, that plaintiff was not disabled under the Social Security Act. Id. That decision became the final decision of the Commissioner when the Appeals Council denied review on July 19, 2007 (T. 4-7). Plaintiff now appeals.\n\nI. Standard of Review\nTo determine whether a claimant is disabled within the meaning of the Social Security Act, the ALJ proceeds through a five-step sequential evaluation. See Bowen v. City of New York, 476 U.S. 467, 470-71, 106 S.Ct. 2022, 90 L.Ed.2d 462 (1986). At step one, the ALJ must determine whether the claimant is engaged in substantial gainful work activity. See 20 CFR \u00a7 404.1520(b). If so, the claimant is not disabled. If not, the ALJ proceeds to step two, and determines whether the claimant has an impairment, or combination of impairments, that is \"severe,\" e.g., that imposes significant restrictions on the claimant's ability to perform basic work activities. 20 CFR \u00a7 404.1520(c). If not, the analysis concludes with a finding of \"not disabled.\" If so, the ALJ continues to step three.\nAt step three, the ALJ examines whether the claimant's impairment meets or equals the criteria of a listed impairment in Appendix 1 of Subpart P of Regulation No. 4. If the claimant's impairment meets or medically equals the criteria of a listing and meets the durational requirement (20 CFR \u00a7 404.1509), the claimant is disabled. If not, analysis proceeds to step four, and the ALJ determines the claimant's residual functional capacity (\"RFC\"), which is the ability to perform physical or metal work activities on a sustained basis notwithstanding limitations for the claimant's collective impairments. See 20 CFR \u00a7 404.1520(e), (f). Then, the ALJ determines whether the claimant's RFC permits *436 him to perform the requirements of his past relevant work. If so, the claimant is not disabled. If not, analysis proceeds to the fifth and final step, wherein the burden shifts to the Commissioner to show that the claimant is not disabled, by presenting evidence demonstrating that the claimant \"retains a residual functional capacity to perform alternative substantial gainful work which exists in the national economy\" in light of his age, education, and work experience. See Rosa v. Callahan, 168 F.3d 72, 77 (2d Cir.1999), quoting Bapp v. Bowen, 802 F.2d 601, 604 (2d Cir.1986). See 20 CFR \u00a7 404.1560(c).\nThe Commissioner's decision that plaintiff is not disabled must be affirmed if it is supported by substantial evidence, and if the ALJ applied the correct legal standards. See 42 U.S.C. \u00a7 405(g); Machadio v. Apfel, 276 F.3d 103, 108 (2d Cir.2002); Rivera v. Sullivan, 923 F.2d 964, 967 (2d Cir.1991). Substantial evidence is defined as \"more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.\" Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971), quoting Consolidated Edison Co. v. N.L.R.B., 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). \"The Court carefully considers the whole record, examining evidence from both sides `because an analysis of the substantiality of the evidence must also include that which detracts from its weight.'\" Tejada v. Apfel, 167 F.3d 770, 774 (2d Cir.1999) quoting Quinones v. Chater, 117 F.3d 29, 33 (2d Cir.1997). Still, \"it is not the function of a reviewing court to decide de novo whether a claimant was disabled.\" Melville v. Apfel, 198 F.3d 45, 52 (2d Cir.1999). \"Where the Commissioner's decision rests on adequate findings supported by evidence having rational probative force, [this Court] will not substitute our judgment for that of the Commissioner.\" Veino v. Barnhart, 312 F.3d 578, 586 (2d Cir.2002).\nSuch a deferential standard, however, is not applied to the Commissioner's conclusions of law. See Townley v. Heckler, 748 F.2d 109, 112 (2d Cir.1984). This Court must independently determine if the Commissioner's decision applied the correct legal standards in determining that the plaintiff was not disabled. \"Failure to apply the correct legal standards is grounds for reversal.\" Townley, 748 F.2d at 112. Therefore, this Court is to first review the legal standards applied, and then, if the standards were correctly applied, consider the substantiality of the evidence. Johnson v. Bowen, 817 F.2d 983, 985 (2d Cir.1987) (\"[w]here there is a reasonable basis for doubt whether the ALJ applied correct legal principles, application of the substantial evidence standard to uphold a finding of no disability creates an unacceptable risk that a claimant will be deprived of the right to have her disability determination made according to the correct legal principles\"). See also Schaal v. Apfel, 134 F.3d 496, 504 (2d Cir.1998).\n\nII. Issues on Appeal\nALJ Banas's decision specifically articulated the findings supporting his decision. However, upon review, I find that the record upon which his decision was based is incomplete and inadequate, and the matter must be remanded for the purpose of gathering additional medical records and reports.\n\"Because a hearing on disability benefits is a non-adversarial proceeding, the ALJ generally has an affirmative obligation to develop the administrative record.\" Perez v. Chater, 77 F.3d 41, 47 (2d Cir.1996). See also Burger v. Astrue, 282 Fed.Appx. 883 (2d Cir.2008) (ALJ is obliged to develop the medical record fully in order to accurately assess a plaintiff's *437 RFC, whether or not plaintiff is represented by counsel).\nThe record in this case contains significant gaps. There are no treatment notes, RFC reports, or other relevant records from plaintiff's alleged treating general practitioner, Dr. Davis, nor did any of plaintiff's treating physicians submit an RFC questionnaire or other evidence specific to plaintiff's alleged functional limitations. Furthermore, there are no records of any kind from 2004-2006, the two-year period that elapsed between plaintiff's application and her hearing date. As such, the record upon which the ALJ's determination was made is insufficient. See Lamorey v. Barnhart, 158 Fed.Appx. 361, 362 (2d Cir.2006) (where ALJ fails to adequately develop the record by requesting treating physician's notes, remand for further proceedings is usually appropriate).\nBased on the foregoing, I believe the ALJ failed to adequately develop the record, and the matter must be remanded for further proceedings.\n\nCONCLUSION\nThe Commissioner's decision that plaintiff, Becky Pettey, was not disabled is reversed, and the matter is remanded for further proceedings. Upon remand, the Commissioner is instructed to gather medical records and request RFC reports from all of plaintiff's treating physicians, as well as to request plaintiff's medical records from 2004 to the present, and to redetermine plaintiff's disability status upon as full and complete a record as possible.\nIT IS SO ORDERED.\n"} -{"text": " In the\n Court of Appeals\n Second Appellate District of Texas\n at Fort Worth\n No. 02-17-00236-CR\n\nMYRON JAMAL NASH \u00a7 On Appeal from\n\n \u00a7 Criminal District Court No. 1\n\n \u00a7 of Tarrant County (1482186D)\nV.\n \u00a7 September 20, 2018\n\n \u00a7 Opinion by Justice Gabriel\n\nTHE STATE OF TEXAS \u00a7 (nfp)\n\n JUDGMENT\n\n This court has considered the record on appeal in this case and holds that there\n\nwas no error in the trial court\u2019s judgment. It is ordered that the judgment of the trial\n\ncourt is affirmed.\n\n\n SECOND DISTRICT COURT OF APPEALS\n\n\n\n By /s/ Lee Gabriel\n Justice Lee Gabriel\n\f"} -{"text": "430 F.2d 185\nIMPERIAL APPLIANCE CORPORATION et al., Plaintiffs-Appellees,v.HAMILTON MANUFACTURING COMPANY, Defendant-Appellant.\nNo. 18039.\nUnited States Court of Appeals, Seventh Circuit.\nJuly 7, 1970.\nRehearing Denied September 3, 1970.\n\nArlie O. Boswell, Jr., Chicago, Ill., A. F. Rankin, Manitowoc, Wis., for defendant-Appellant.\nEugene C. Knoblock, South Bend, Ind., Paul R. Puerner, Milwaukee, Wis., for plaintiffs-appellees.\nBefore Justice CLARK,* SWYGERT, Chief Judge, and FAIRCHILD, Circuit Judge.\nSWYGERT, Chief Judge.\n\n\n1\nThis is an interlocutory appeal brought by Hamilton Manufacturing Company pursuant to 28 U.S.C. \u00a7 1292(b). The sole question for review is whether the district court correctly ruled that jurisdiction exists under 28 U.S.C. \u00a7 1338(a) to entertain a patent infringement suit brought by Imperial Appliance Corporation against Hamilton. We affirm.\n\n\n2\nThe facts, which are reported fully in two prior opinions of the district court. Imperial Appliance Corp. v. Hamilton Mfg. Co., 263 F.Supp. 1015 (E.D.Wis. 1967), and Imperial Appliance Corp. v. Hamilton Mfg. Co., 239 F.Supp. 175 (E. D.Wis.1965), need not be set out in great detail here. In 1937 and 1938 James R. Moore filed applications for letters patent, serial numbers 177,123 and 236,189, describing and claiming inventions to be used in the manufacture of clothes dryers. Moore thereafter assigned his rights in the \"Moore patents\" to F. W. Griswold. On November 9, 1938 Griswold entered into a licensing agreement granting exclusive rights to Imperial to manufacture and sell dryers embodying the Moore applications. Subsequently Griswold assigned his interest in the Moore patents to Stanley G. Harwood.\n\n\n3\nIn November 1941 in an agreement entitled the \"New Harwood-Imperial Agreement,\" the 1938 Imperial license was amended to permit Imperial to sublicense to Hamilton the right to manufacture and sell dryers under the Moore applications. The 1938 license was also modified to include the following provision as paragraph 1 of the new Harwood-Imperial agreement:\n\n\n4\n1. That any and all improvements of the Dryer or in the process of manufacturing the same heretofore, or hereafter made by or at the instance of either Imperial or Hamilton, are understood to be and remain the property of Harwood as assignee-owner of the applications for Letters Patent and/or Patents of or relating to said Dryer in the United States of America and the Dominion of Canada; and that the aforementioned agreement of November 9, 1938 is hereby understood and declared to extend for the full term of such patents issued and to be issued, and any and all improvements thereto.\n\n\n5\nImperial and Hamilton simultaneously entered into a sublicense agreement entitled \"Contract and License\" which incorporates the New Harwood-Imperial Agreement for reference. Under the Contract and License, Hamilton paid royalties to both Imperial and Harwood.\n\n\n6\nOn September 18, 1945 the Moore patents issued as U. S. Patents No. 2,385,222 and No. 2,385,223. On the next day Moore applied for another patent and immediately assigned his interest in the new application to Hamilton. Thereafter, on February 6, 1951 the patent issued as U. S. Patent No, 2,540,955 in Hamilton's name as patentee. Until 1962 Harwood and Imperial received royalties on dryers manufactured and sold by Hamilton. On September 18, 1962, the date of expiration of the Moore patents, Hamilton declared the Contract and License terminated by its own provisions and ceased to pay royalties.\n\n\n7\nIn 1963 Imperial commenced a diversity action against Hamilton alleging that the '955 patent was an improvement patent under the New Harwood-Imperial Agreement; that the Contract and License remained in effect; and that Hamilton continued to be liable for royalties on the '955 patent until its expiration on February 6, 1968. The district court, in an unpublished memorandum opinion, held that the Contract and License terminated at the expiration of the Moore patents and did not impose an obligation to pay royalties on improvement patents. The court further ruled that paragraph 1 of the New Harwood-Imperial Agreement granted Imperial an exclusive license to improvements on the Moore patents. The court described Imperial's rights as exclusive licensee as follows: \"Assuming for purposes of this decision that Patent No. 2,540,955 discloses improvements to the Moore Patents, and assuming further that Hamilton has been and is now utilizing the purported improvements in the manufacture and sale of clothes dryers, the use would be in derogation of Harwood's and Imperial's rights to improvements that Hamilton acknowledged in the Contract and License. However, plaintiffs' remedy for the unauthorized use does not lie in an action based on breach of the royalty payment or unilateral termination provisions of the Contract and License as alleged in the Complaint herein.\"\n\n\n8\nOn January 29, 1968 Imperial amended its complaint to allege that Hamilton's use of the '955 patent constituted infringement of its exclusive license to improvement patents. Harwood and certain heirs of Moore (Harwood had reassigned an undivided one-half interest in the Moore patents to Moore in 1946) were added as plaintiffs, thus destroying diversity of citizenship as a basis for jurisdiction. Hamilton thereupon moved to dismiss for lack of jurisdiction. The district court in another unpublished opinion denied Hamilton's motion, holding that Imperial's suit was one for infringement arising under the patent laws. This appeal followed.\n\n\n9\nFederal jurisdiction in patent cases exists under 28 U.S.C. \u00a7 1338(a) which provides: \"The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, copyrights, and trademarks. Such jurisdiction shall be exclusive of the courts of the states in patent and copyright cases.\" Hamilton argues that Imperial's infringement suit does not arise under the patent laws since the district court must determine whether the '955 patent is an improvement on the Moore patents and thus the property of Harwood as patentee and Imperial as exclusive licensee. We disagree.\n\n\n10\nAlthough state courts are permitted to decide patent questions incidental to claims arising under state law, Pratt v. Paris Gas Light & Coke Co., 168 U.S. 255, 259, 18 S.Ct. 62, 42 L.Ed. 458 (1897), federal courts have exclusive jurisdiction over cases in which plaintiff's cause of action is created by the patent laws. American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 36 S.Ct. 585, 60 L.Ed. 987 (1916). The boundary between federal and state court jurisdiction is further clarified by the concise statement of Chief Justice Taft in Luckett v. Delpark, Inc., 270 U.S. 496, 510-511, 46 S.Ct. 397, 70 L.Ed. 703 (1926):\n\n\n11\n[W]here a patentee complainant makes his suit one for recovery of royalties under a contract of license or assignment, or for damages for a breach of its covenants, or for a specific performance thereof, or asks the aid of the Court in declaring a forfeiture of the license or in restoring an unclouded title to the patent, he does not give the federal district court jurisdiction of the cause as one arising under the patent laws. Nor may he confer it in such a case by adding to his bill an averment that after the forfeiture shall be declared, or the title to the patent shall be restored, he fears the defendant will infringe and therefore asks an injunction to prevent it.\n\n\n12\nWe are convinced that under these rules Imperial's cause of action arises under the patent laws.\n\n\n13\nHamilton maintains that the plaintiff must have unclouded legal title in order to confer federal jurisdiction in an infringement suit. See Laning v. National Ribbon & Carbon Paper Mfg. Co., 125 F.2d 565 (7th Cir. 1942); Lion Mfg. Corp. v. Chicago Flexible Shaft Co., 106 F.2d 930 (7th Cir. 1939); Dill Mfg. Co. v. Goff, 125 F.2d 676 (6th Cir. 1942). This argument constitutes a misstatement of existing principles governing patent jurisdiction. Courts have long held that jurisdiction is not defeated by a plea in the defendant's answer challenging plaintiff's title to the patent in suit, Excelsior Wooden Pipe Co. v. Pacific Bridge Co., 185 U.S. 282, 22 S.Ct. 681, 46 L.Ed. 910 (1902), or even by the anticipation of such a defense in plaintiff's complaint. Healy v. Sea Gull Specialty Co., 237 U.S. 479, 35 S.Ct. 658, 59 L.Ed. 1056 (1913). When plaintiff's title is challenged, jurisdiction depends not only upon pleading rules but also upon the extent to which the dispute concerning title rests upon patent as opposed to state law questions. Littlefield v. Perry, 88 U.S. (21 Wall.) 205, 22 L.Ed. 577 (1874).\n\n\n14\nIn the instant case the district court decided in Imperial's diversity suit against Hamilton that Imperial is entitled to improvements on the Moore patents. Thus in contrast to cases such as Laning v. National Ribbon & Carbon Paper Mfg. Co., supra, and Lion Mfg. Corp. v. Chicago Flexible Shaft Co., supra, the essential question of contract interpretation has already been resolved. The only question remaining is whether the '955 patent is an improvement upon the Moore patents. That question is only nominally one of contract interpretation since the parties undoubtedly included \"improvement\" as a term of art under the patent laws. Thus the determination of whether a device is an improvement is a question of law resting upon matters such as the validity of the patent on the alleged improvement and the extent of its dependence upon existing patents. 1 A. W. Deller, Walker on Patents, \u00a7 19 at 130 (2d ed. 1964). To require this question to be decided by state courts when further questions of contract interpretation are not involved would defeat the policies of uniformity and expertise which prompted Congress to grant exclusive patent jurisdiction to the federal courts.\n\n\n15\nOur conclusion is fully supported by Littlefield v. Perry, 88 U.S. (21 Wall.) 205, 22 L.Ed. 577 (1874), the only Supreme Court case which speaks directly to the question before us. In that case plaintiff received an exclusive license on an 1851 patent which included the right to improvement patents. Although plaintiff lacked formal legal title, the Court neverthless, ruled that plaintiff was entitled to maintain an infringement suit against the patentee who was employing an alleged improvement. Hamilton has failed to demonstrate that this holding, which is identical to our own, has been overruled by subsequent cases.\n\n\n16\nThe ruling appealed from is affirmed.\n\n\n\nNotes:\n\n\n*\n Honorable Tom C. Clark, Associate Justice of the United States Supreme Court, Retired, is sitting by special designation\n\n\n"} -{"text": "\n955 F.Supp. 175 (1997)\nJohn TURNER, Plaintiff,\nv.\nCOUNTY OF SUFFOLK, et al., Defendants.\nNo. CV 95-1592.\nUnited States District Court, E.D. New York.\nFebruary 20, 1997.\nConway & Ceriello, by Darrell J. Conway, Melville, NY, for Plaintiff.\nRobert J. Cimino, Suffolk County Attorney, by Robert H. Cabble, Assistant County Attorney, Hauppauge, NY, for Defendant Gaffney.\nPachman, Pachman, Brown & Farneti, by Howard Pachman, Commack, NY, for Defendants Caracciolo, Davis, Caracappa, D'Andre, Finlay, Lazio, Binder, Jones, O'Donohue, Rizzo and Blydenburgh.\n\nMEMORANDUM AND ORDER\nWEXLER, District Judge.\nPlaintiff, John Turner brought the instant action pursuant to 42 U.S.C. \u00a7 1983 (the \"\u00a7 1983 claim\") and \u00a7 107 of the New York Civil Service Law (the \"\u00a7 107 claim\") against the County of Suffolk. Plaintiffs complaint alleges that the Legislators and County Executive of the defendant conspired to act and acted wrongfully to discharge or adversely affect Plaintiff's employment with Suffolk County on the basis of his political beliefs in violation of the First and Fourteenth Amendments. The complaint alleges that the same acts violated \u00a7 107 of the New York State Civil Service Law. Now before the Court is defendant's motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure on the ground that plaintiff fails to state a claim upon which relief can be granted.\n\nI. BACKGROUND\nIn January 1992, the controlling party of the Suffolk County Legislature and County Executive's office shifted from Democratic to Republican. Several days after this shift in power, the County Legislature introduced Resolution No. 1218-92 (the \"Resolution\") by which plaintiff's position was eliminated. Plaintiff was a Suffolk County Civil Service Competitive Class Employee since 1986 working in the Parks department. Plaintiff's claim is based upon an alleged conspiracy among the County Legislature and the County Executive \"to appoint their political co-patriots to various positions in the County public service, and [engage] in the patronage practice of firing or demoting public employees *176 who had no affiliation with the Republican party.\" Plaintiff asserts that the Resolution was purportedly introduced as a cost saving major, but had a negligible effect upon cost savings, and was in reality a subterfuge to take adverse actions against non-Republican civil service employees in the Parks department. Although plaintiff had originally named the individual legislators and the executive in the complaint, the claims against the individuals have been discontinued through a stipulation between the parties.\n\nII. DISCUSSION\nDismissal of a complaint under Fed. R.Civ.P. 12(b)(6) is proper only where \"it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.\" Allen v. WestPoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir.1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)). In considering a motion to dismiss the complaint for failure to state a claim upon which relief can be granted, the complaint will be construed in the light most favorable to the plaintiffs, and the court accepts as true all facts alleged in the complaint. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).\nRelying on this Court's earlier ruling in Orange v. County of Suffolk, defendant asserts that the complaint is subject to a heightened pleading requirement because plaintiff has alleged a conspiracy to violate plaintiff's civil rights. 830 F.Supp. 701, 707 (E.D.N.Y.1993). However, plaintiff is no longer asserting a conspiracy among defendants, since plaintiff is only seeking to recover from the County. Therefore, the heightened pleading requirement upon which defendant relies does not apply. Rule 8 of the Federal Rules of Civil Procedure merely requires that any complaint be simple, direct and concise. A pleading must give the Court and defendant \"fair notice of what the plaintiff's claim is and the grounds upon which it rests,\" Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957), so as to enable the adverse party to answer and prepare for trial. Plaintiff's complaint alleges that the County Legislators and the County Executive conspired to pass a resolution that denied plaintiff his job due to his political affiliations. The Court finds that plaintiff's complaint sufficiently pleads his \u00a7 1983 claim.\nDefendant also argues that the \u00a7 107 claim must be dismissed because plaintiff never filed a notice of claim. New York County Law \u00a7 52 states that \"[any] claim or notice of claim against a county for damage ... alleged to have been caused ... by ... any misfeasance, omission of duty, negligence or wrongful act on part of the county ... must be made and served in compliance with section 50-e of the general municipal law. Every action upon such claim shall be commenced pursuant to the provisions of 50-i of the general municipal law.\" \u00a7 50-e requires the filing of a notice of claim within 90 days of when the claim arises. New York General Municipal Law \u00a7 50-e. \u00a7 50-i prevents any action from being commenced against a municipality unless the plaintiff has complied with the notice of claim requirement of \u00a7 50-e. New York General Municipal Law \u00a7 50-i. In this case, plaintiff concedes that he has failed to file such a notice of claim. Relying upon Mills v. County of Monroe, 59 N.Y.2d 307, 464 N.Y.S.2d 709, 451 N.E.2d 456 (1983) plaintiff argues that the notice of claim requirement should not apply, because his claim is brought to vindicate a public interest.\nThe New York Court of Appeals has recognized an exception to the notice of claim requirement when an action is not brought merely to enforce a private right, but rather, to vindicate a public interest. See Union Free School Dist. No. 6 of Towns of Islip & Smithtown v. New York State Human Rights Appeal Bd., 35 N.Y.2d 371, 362 N.Y.S.2d 139, 320 N.E.2d 859 (1974). In that case, the Division of Human Rights was asserting a claim on behalf of a class of women plaintiffs alleging that the school board's policy with respect to maternity leave was discriminatory. In the Mills case, plaintiff was a county employee who brought a \u00a7 1983 claim seeking damages because she had been terminated from her employment on the basis *177 of her race and national origin. The Court of Appeals, in Mills, distinguished the facts of that case from the Towns of Islip & Smithtown case by stating\n[i]t is clear that plaintiff's action was not brought to vindicate a public interest, insofar as that principle would entitle her to a complete waiver of the notice requirement. Her allegations of actionable conduct on the part of the county refers only to conduct that relates to her.\n. . . . .\nThe relief she seeks is money damages for her loss of wages and damages to her reputation. Inasmuch as the disposition of plaintiff's claim was not intended to nor could it directly affect or vindicate the rights of others, her action is properly characterized as one seeking the enforcement of private rights.\nMills, 464 N.Y.S.2d at 711-12, 451 N.E.2d at 458-59. The facts in this case are governed by the rule in Mills. By its terms, plaintiff's complaint is limited to redressing plaintiff's individual injury. The prayer for relief requests money damages and reinstatement for the benefit of plaintiff and only plaintiff. The Court finds that plaintiff's \u00a7 107 claim is brought merely to enforce a private right and not to vindicate a public interest. Accordingly the \u00a7 107 claim must be dismissed.\n\nIII. CONCLUSION\nDefendant's motion to dismiss is denied in part and granted in part. The motion is denied as to the \u00a7 1983 claim because no heightened pleading requirement applies to the plaintiff's claim, and granted as to the \u00a7 107 claim due to plaintiff's failure to file a notice of claim.\nSO ORDERED.\n"} -{"text": "[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as\nSears, Roebuck & Co. v. Franklin Cty. Bd. of Revision, Slip Opinion No. 2015-Ohio-4522.]\n\n\n\n\n NOTICE\n This slip opinion is subject to formal revision before it is published in\n an advance sheet of the Ohio Official Reports. Readers are requested\n to promptly notify the Reporter of Decisions, Supreme Court of Ohio,\n 65 South Front Street, Columbus, Ohio 43215, of any typographical or\n other formal errors in the opinion, in order that corrections may be\n made before the opinion is published.\n\n\n\n SLIP OPINION NO. 2015-OHIO-4522\n SEARS, ROEBUCK & COMPANY, APPELLEE, v. FRANKLIN COUNTY BOARD OF\n REVISION ET AL., APPELLEES; COLUMBUS CITY SCHOOLS BOARD OF\n EDUCATION, APPELLANT.\n [Until this opinion appears in the Ohio Official Reports advance sheets, it\n may be cited as Sears, Roebuck & Co. v. Franklin Cty. Bd. of Revision,\n Slip Opinion No. 2015-Ohio-4522.]\nTaxation\u2015Real property\u2015Valuation\u2015Standard of review on appeal\u2015Board of\n Tax Appeals\u2019 adoption of value set forth in sole appraisal report in the\n record is lawful and reasonable\u2015Board has no duty to make\n particularized findings of fact and conclusions of law\u2015Decision affirmed.\n (No. 2014-0722\u2014Submitted July 7, 2015\u2014Decided November 3, 2015.)\n APPEAL from the Board of Tax Appeals, No. 2011-406.\n ____________________\n Per Curiam.\n {\u00b6 1} This real-property-valuation case concerns the proper valuation for\ntax years 2005 through 2010 of a large facility located at the Eastland Mall in\n\f SUPREME COURT OF OHIO\n\n\n\n\nColumbus and owned by appellee Sears, Roebuck & Company (\u201cSears\u201d). The\nFranklin County auditor valued the property at $8,323,000 for tax year 2005,\nwhich was a reappraisal year in Franklin County, and for tax years 2006 through\n2010. The Franklin County Board of Revision (\u201cBOR\u201d), appellee, rejected\nSears\u2019s claims for reduction. At the Board of Tax Appeals (\u201cBTA\u201d), Sears\npresented an appraisal determining the value to be $6,300,000 for tax year 2005\nand $6,550,000 for tax year 2008, the year of a triennial update. Appellant, the\nColumbus City Schools Board of Education (\u201cschool board\u201d), appeared, cross-\nexamined the appraiser, and presented certain data as rebuttal evidence. The BTA\nadopted the appraiser\u2019s opinion of value, and on appeal, the school board\nadvances specific challenges to the probative character of the appraisal and the\nattendant testimony. Because we find that the BTA acted reasonably and\nlawfully, we affirm the board\u2019s decision.\n FACTS\n {\u00b6 2} This appeal concerns the proper valuation of a single parcel of 16.71\nacres at Eastland Mall, owned by Sears, on which two buildings are located: a\n225,882-square-foot two-story department store and a 53,362-square-foot two-\nstory automotive center\u2014a total of 279,244 square feet of retail space,\nconstructed in 1968. The testimony showed that the second floor of neither\nbuilding was currently being used for retail purposes. The auditor valued the\nproperty for tax year 2005 at $8,323,000. Sears filed a complaint on March 28,\n2006, seeking a reduction of value to $4,000,000. The school board filed a\ncountercomplaint seeking retention of the auditor\u2019s valuation.\n {\u00b6 3} The BOR held a hearing on September 9, 2010. At the hearing, a\nSears property-tax manager named H. Larry Schramm testified and presented a\nvaluation study that he had prepared, including both an income and a sales-\ncomparison approach. Schramm determined the value of the property to be\n$4,000,000 for 2005 and $3,600,000 for 2008. The school board\u2019s counsel cross-\n\n\n\n\n 2\n\f January Term, 2015\n\n\n\n\nexamined Schramm but offered no independent evidence. Because Schramm\nadmitted that he did not qualify as an appraisal expert and because Schramm was\nnot a disinterested third-party witness, the BOR accorded little to no weight to his\ntestimony. In its deliberations on December 13, 2010, the BOR ordered no\nchange in the property value from 2005 through 2010.\n {\u00b6 4} Sears appealed to the BTA, and at the hearing, which was held on\nJanuary 9, 2013, Sears presented the testimony and appraisal report of Kelly M.\nFried, a state-certified general appraiser and vice president of Gem Real Estate\nGroup. Fried performed an analysis using an income approach and a sales-\ncomparison approach, weighted the sales-comparison approach two-thirds and the\nincome approach one-third because of the likelihood of a single owner-user of the\nproperty, and arrived at a valuation of $6,300,000 for 2005 and $6,550,000 for\n2008.\n {\u00b6 5} Fried used department stores exclusively as both rent and sales\ncomparables and did not consider any \u201cautomotive centers\u201d as such. The school\nboard\u2019s attorney cross-examined Fried extensively on this point, and Fried offered\nseveral reasons. First, Fried \u201cdetermined this [property] to be one economic unit\nsince it\u2019s located on the same parcel, just as I allocated value to the [second-story]\nspace even though it\u2019s not been utilized for several years.\u201d Second, Fried stated\nthat Kmart and other retailers often have a garden center or automotive center that\nis separated from the main store in whole or in part, but standard practice is to\nview the property as an economic unit. Third, Fried testified that if the\nautomotive center were to be split off, all kinds of assumptions would have to be\nmade concerning viability of the split, the separation of utility service, and the\navailability of separate access. Fourth, Fried noted that the Sears automotive\ncenter was different from automotive centers that are not affiliated with a\ndepartment store in that it did not have its own street frontage. Instead, its\nlocation made it \u201cancillary\u201d to the store.\n\n\n\n\n 3\n\f SUPREME COURT OF OHIO\n\n\n\n\n {\u00b6 6} Finally, Fried stated on redirect examination that under appraisal\npractice a discount would be necessary if she were to treat the buildings as\nseparate units\u2014the value would not equal the sum of the value of the department\nstore plus the value of the automotive center.\n {\u00b6 7} The school board introduced as rebuttal evidence print-outs from the\ncounty auditor\u2019s website showing sales of five properties, each classified as a\n\u201ccommunity garage,\u201d which counsel represented to be automotive centers. Photos\nfrom the website revealed that the properties were auto-service centers. On\nredirect examination, Fried noted that the automotive centers were all newer than\nthe Sears center (being built from the 1980s to 2008, as opposed to 1968) and\nwere much smaller. And Fried stated that she would have to research them to see\nif they were otherwise comparable (including whether the sales were arm\u2019s-length\nsales); their utility as comparables could not be discerned from the raw data.\n {\u00b6 8} The BOR decided to retain the auditor\u2019s value. Sears appealed.\n {\u00b6 9} In both of its two briefs to the BTA, the school board defended the\nauditor\u2019s value by pointing out that the different use of the automotive center\nmade the comparables in the Sears appraisal not probative. But although the\nschool board faulted Fried for treating the Sears property as a single economic\nunit, neither of its two briefs used the rebuttal evidence. The school board made\nno mention of it; indeed, the school board did not perform any analysis as to how\nthe evidence demonstrated a greater value for the subject property.\n {\u00b6 10} The BTA issued its decision on April 10, 2014. It is brief; its\noperative sentence reads:\n\n\n Upon review of appellant\u2019s appraisal evidence which\n provides an opinion of value as of [the] tax lien date, was prepared\n for tax valuation purposes, and was attested to by a qualified\n expert, and having considered the BOE\u2019s arguments challenging\n\n\n\n\n 4\n\f January Term, 2015\n\n\n\n\n such appraisal, which is the only appraisal evidence submitted, we\n find such report to be competent and probative and the value\n conclusion reasonable and well-supported.\n\n\nBTA No. 2011-406, 2014 Ohio Tax LEXIS 2278, *2 (Apr. 10, 2014).\n {\u00b6 11} The BTA then adopted the Sears appraisal valuations: $6,300,000\nfor 2005 through 2007, and $6,550,000 for 2008 through 2010. The school board\nhas appealed.\n THE HIGHEST-AND-BEST-USE ARGUMENT UNDER APPELLANT\u2019S THIRD\n PROPOSITION OF LAW IS JURISDICTIONALLY BARRED\n\n {\u00b6 12} The sixth paragraph of R.C. 5717.04 states that the notice of appeal\nto this court \u201cshall set forth the decision of the board appealed from and the errors\ntherein complained of.\u201d The requirement that the errors be set forth in the notice\nof appeal is jurisdictional. Cruz v. Testa, ___ Ohio St.3d ___, 2015-Ohio-3292,\n___ N.E.3d ___, \u00b6 18. Thus, errors not specified may not be asserted as a basis\nfor relief in the brief to the court because the lack of specification deprives the\ncourt of jurisdiction to grant relief on that basis. See Newman v. Levin, 120 Ohio\nSt.3d 127, 2008-Ohio-5202, 896 N.E.2d 995, \u00b6 28.\n {\u00b6 13} In its first four propositions of law, Sears, the property owner and\nthe appellee in this case, urges that the school board\u2019s notice of appeal fails to\nspecify error. A review of the notice of appeal leads us to conclude that only one\nargument set forth in the brief is barred: the new argument in the school board\u2019s\nthird proposition of law that the BTA\u2019s finding of highest and best use is not\nsupported by the record.1 That argument was not advanced below, nor is it\nspecifically stated in the notice of appeal. It is therefore barred.\n\n\n1\n On its face, the appraisal states that the highest and best use is the existing use. What the school\nboard is arguing is a variation of the argument that the comparables are not genuinely comparable;\nthat argument, as discussed, has been preserved.\n\n\n\n\n 5\n\f SUPREME COURT OF OHIO\n\n\n\n\n {\u00b6 14} By contrast, the argument that the comparables are not comparable,\nwhich is also advanced in the third proposition of law, has been preserved. In\nparticular, specifications of error six and seven sufficiently raise the point by\nchallenging the appraisal\u2019s lack of relevant market data and comparable sales\ndata, and specification eight also preserves the argument when it states that the\nBTA erred by failing to address the criticisms leveled by the school board at the\nappraisal. One of those criticisms was the comparables-not-being-comparable\nargument, which was raised below and was not explicitly addressed by the BTA.\nSee WCI Steel, Inc. v. Testa, 129 Ohio St.3d 256, 2011-Ohio-3280, 951 N.E.2d\n421, \u00b6 36 (notice of appeal to be construed not merely by its form of words but in\nthe context of the objections and evidence presented below).\nTHE BTA HAS NO DUTY TO ISSUE FINDINGS OF FACT AND CONCLUSIONS OF LAW\n {\u00b6 15} The school board\u2019s second proposition of law faults the BTA for\nnot \u201cset[ting] forth the relevant facts in its decision.\u201d But we have held that the\nBTA has no obligation to make particularized findings of fact and conclusions of\nlaw. See Wolf v. Cuyahoga Cty. Bd. of Revision, 11 Ohio St.3d 205, 206, 465\nN.E.2d 50 (1984) (rejecting the argument that \u201cthe failure of the BTA to render\nspecific findings of fact and conclusions of law renders the decision per se\nunreasonable and unlawful\u201d and observing that \u201cthis court has found no authority\nwhich places a mandatory duty upon the BTA to make separate findings of fact\nand conclusions of law\u201d); Wheeling Steel Corp. v. Evatt, 143 Ohio St. 71, 96, 54\nN.E.2d 132 (1944) (\u201cThere is no authority for [a] request for findings of fact and\nconclusions of law separately stated\u201d).\n {\u00b6 16} The school board cites cases in which the court identified a duty for\nthe BTA to \u201cstate what evidence it considered relevant in reaching its value\ndeterminations.\u201d Howard v. Cuyahoga Cty. Bd. of Revision, 37 Ohio St.3d 195,\n197, 524 N.E.2d 887 (1988); HealthSouth Corp. v. Levin, 121 Ohio St.3d 282,\n2009-Ohio-584, 903 N.E.2d 1179, \u00b6 34 (citing and applying Howard); Columbus\n\n\n\n\n 6\n\f January Term, 2015\n\n\n\n\nCity School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision, 90 Ohio St.3d 564,\n566, 740 N.E.2d 276 (2001). In another case, we have already addressed and\nrejected the contention that the school board advances here. See Columbus City\nSchools Bd. of Edn. v. Franklin Cty. Bd. of Revision, Slip Opinion No. 2015-\nOhio-3633, \u00b6 23. Here, as in the 2015 Columbus City Schools case, the BTA\ndetermined a value based on a record that contained the owner\u2019s appraisal as the\nonly substantive evidence of value; the BTA predicated its determination on that\nopinion and said so. For the same reasons as stated in Columbus City Schools,\nHoward and HealthSouth are inapposite. Moreover, in the 2001 Columbus City\nSchools case, the BTA affirmed a valuation made by a board of revision, which\ndiffered from the auditor\u2019s, despite the fact that the record contained no\nsupporting evidence and no evidence was presented to the BTA. That situation is\nnot comparable to the straightforward adoption of the opinion of value from the\nonly appraisal in the record.\n {\u00b6 17} In a further attempt to find support for its argument, the school\nboard cites statutes and administrative rules that control the substantive law of\nvaluing property for tax-assessment purposes. Through these citations the school\nboard attempts to bolster its theory that the BTA has a duty to cite these\nprovisions of law and discuss them in conjunction with the facts of the case. But\nno such inference is justified. The substantive-law provisions describe the criteria\nfor determining value, but they do not require the BTA to state which of these\ncriteria it relied on in its valuation.\n {\u00b6 18} Finally, the school board cites another body of cases in which the\ncourt did require more discussion or findings by the BTA. Gen. Motors Corp. v.\nCuyahoga Cty. Bd. of Revision, 67 Ohio St.3d 310, 617 N.E.2d 1102 (1993); and\nVilla Park Ltd. v. Clark Cty. Bd. of Revision, 68 Ohio St.3d 215, 625 N.E.2d 613\n(1994). But these cases differ from the present case in an obviously important\nrespect: each involved more than one appraisal, and in each the BTA did not\n\n\n\n\n 7\n\f SUPREME COURT OF OHIO\n\n\n\n\nadopt one proposed valuation or the other, but performed adjustments of its own.\nIn both cases we concluded that the BTA had not sufficiently explained the basis\nfor adjusting the valuation. Gen. Motors Corp. v. Cuyahoga Cty. Bd. of Revision,\nBTA Nos. 85-G-440 through 85-G-443, 1989 WL 82679 (Apr. 21, 1989), rev\u2019d\nand remanded, 53 Ohio St.3d 233, 559 N.E.2d 1328 (1990); on remand, BTA\nNos. 85-G-440 through 85-G-443, 1992 WL 207483 (Aug. 21, 1992), rev\u2019d and\nremanded, 67 Ohio St.3d 310, 617 N.E.2d 1102 (1993); Villa Park, Ltd. v. Clark\nCty. Bd. of Revision, BTA No. 90-H-558, 1992 WL 153143 (June 26, 1992), rev\u2019d\nand remanded, 68 Ohio St.3d 215, 625 N.E.2d 613 (1994). Under those\ncircumstances, we remanded with the instruction that the BTA set forth sufficient\nreasons for its determination that would permit us to decide whether the board\u2019s\nvaluation was reasonable and lawful. Those cases are inapposite to the situation\nhere, where only one appraisal has been presented, and the BTA straightforwardly\nadopted that valuation.\n {\u00b6 19} Similarly, Dublin Senior Community L.P. v. Franklin Cty. Bd. of\nRevision, 80 Ohio St.3d 455, 687 N.E.2d 426 (1997), involved a situation in\nwhich the owner presented one appraisal to the board of revision and a different\nappraisal to the BTA. Both appraisals were in the record before the BTA. Upon\nreview, we determined that the BTA had ignored the first appraisal and discussed\nonly the appraisal presented at the BTA, even though the owner devoted more\nspace in its BTA brief to analyzing the first appraisal. We remanded for a\nconsideration of the first appraisal, ordering the BTA to set forth its reasons for\naccepting or rejecting it. This situation is not apposite to the present case, where\nthe BTA adopted the sole appraisal presented to it.\n {\u00b6 20} To be sure, we have held that the school board may, in a proper\ncase, discredit appraisal testimony through cross-examination and argument. See\nVandalia-Butler City School Dist. Bd. of Edn. v. Montgomery Cty. Bd. of\nRevision, 106 Ohio St.3d 157, 2005-Ohio-4385, 833 N.E.2d 271, \u00b6 9, in which the\n\n\n\n\n 8\n\f January Term, 2015\n\n\n\n\nBTA agreed with the board of education\u2019s contention that the appraisal of the sole\nexpert in the case was unconvincing, and this court affirmed. We do not infer\nfrom that disposition that the BTA has a duty to discuss every mere\ncontention\u2015as opposed to evidence\u2015attacking the validity of an appraisal.\n {\u00b6 21} It is important in this context to distinguish another situation in\nwhich the BTA ought to explain its position. In Vandalia-Butler City Schools Bd.\nof Edn. v. Montgomery Cty. Bd. of Revision, 130 Ohio St.3d 291, 2011-Ohio-\n5078, 958 N.E.2d 131, we held among other things that the BTA \u201cerred by\nadopting the BOR\u2019s valuation without addressing the hearsay objection\u201d raised by\nthe board of education. Id. at \u00b6 15. Unlike that case, however, the present appeal\ndoes not involve the BTA\u2019s failure to address a specific evidentiary objection\nbefore relying on the evidence objected to.\n {\u00b6 22} It is not as though the school board lacked the means to make its\ncase. Even if a board of education elects not to commission its own appraisal, it\nmight in a proper case offer a different type of evidence: an expert review of the\nowner\u2019s appraisal. Here, the school board claims that the owner\u2019s appraisal is\ndeeply flawed. Under such circumstances, the school board could hire an expert\nto perform an \u201cappraisal review\u201d to highlight the errors. See Appraisal Institute,\nThe Appraisal of Real Estate 590 (13th Ed.2008) (\u201cThe primary function of an\nappraisal reviewer is not to appraise the subject property but to examine the\ncontents of a report and form an opinion as to its adequacy and appropriateness\u201d).\nAn appraisal review performed by an expert would make a greater claim on the\nBTA\u2019s attention because it would constitute conflicting evidence.\n {\u00b6 23} But no such review was offered here, and counsel\u2019s speculations do\nnot equate to an expert\u2019s opinion. Quite simply, the speculations of lawyers about\nthe substance of appraisals do not always merit discussion by a busy tax tribunal\nwith a docket of hundreds, if not thousands, of cases.\n\n\n\n\n 9\n\f SUPREME COURT OF OHIO\n\n\n\n\n {\u00b6 24} For all the foregoing reasons, we reject the school board\u2019s assertion\nthat the BTA\u2019s decision was unreasonable or unlawful on account of alleged\nformal inadequacies.\n THE ARGUMENT THAT THE APPRAISER\u2019S COMPARABLES ARE NOT GENUINELY\n COMPARABLE FURNISHES NO BASIS FOR REVERSAL HERE\n\n {\u00b6 25} On the merits, the school board argues that \u201c[t]here is no credible\nevidence in the record to support Ms. Fried\u2019s appraisal methodology that lumped\ntogether the Automobile Service Center and the mall department store in order to\ncreate one 279,244 square-foot building which was then valued as a mall\ndepartment store.\u201d The school board thereby renews its claim that the\ndepartment-store rent and sales comparables are not genuinely comparable to the\nsubject property.\n {\u00b6 26} We reject this argument as a basis for reversing for two reasons.\nFirst, Fried advanced several grounds in support of her method, and the school\nboard has not remotely negated them. We have no more reason to question the\ntreatment of the parcel at issue as an economic unit here than we had in other\nappeals in which we endorsed the unified treatment of separate parcels or\nbuildings by the fact-finding tribunal, be it the BTA or the common pleas court in\nan appeal prosecuted pursuant to R.C. 5717.05. See Strongsville Bd. of Edn. v.\nCuyahoga Cty. Bd. of Revision, 77 Ohio St.3d 402, 405-406, 674 N.E.2d 696\n(1997) (approving the BTA\u2019s treatment of two buildings on separate parcels as an\neconomic unit); Park Ridge Co. v. Franklin Cty. Bd. of Revision, 29 Ohio St.3d\n12, 504 N.E.2d 1116 (1987) (upholding the common pleas court\u2019s treatment of\napartment complexes as economic units where in most cases, each unit occupied a\nseparate lot).\n {\u00b6 27} Second, the contention that the mere presence of the two buildings\non the same parcel does not make them an economic unit is unavailing. Fried\nstated that their presence on one parcel was one reason for viewing them as an\n\n\n\n\n 10\n\f January Term, 2015\n\n\n\n\neconomic unit, but then stated others, as discussed. Also, when appraising a\nsimilar Sears facility at a different mall, Fried had treated the store building and\nthe auto center as an economic unit, even though at that location the two buildings\nwere on separate parcels. The consistent treatment in valuing analogous\nproperties by the expert appraiser justified the BTA in concluding that her opinion\nwas supported by a viable theory of property value.\n CONCLUSION\n {\u00b6 28} For the foregoing reasons, we reject the school board\u2019s arguments\nand we affirm the BTA\u2019s decision to adopt the appraisal valuation offered by the\nproperty owner.\n Decision affirmed.\n O\u2019CONNOR, C.J., and PFEIFER, O\u2019DONNELL, LANZINGER, KENNEDY,\nFRENCH, and O\u2019NEILL, JJ., concur.\n _________________\n Karen H. Bauernschmidt Co., L.P.A., Karen H. Bauernschmidt, and\nStephen M. Nowak, for appellee Sears, Roebuck & Co.\n Rich & Gillis Law Group, L.L.C., and Mark Gillis, for appellant.\n _________________\n\n\n\n\n 11\n\f"} -{"text": "\n675 F.Supp.2d 1320 (2010)\nZHENGZHOU HARMONI SPICE CO., LTD., Jinan Yipin Corporation, Ltd., Jining Trans-High Trading Co., Ltd., Jinxiang Shanyang Freezing Storage Co., Ltd., Linshu Dading Private Agricultural Products Co., Ltd., Shanghai LJ International Trading Co., Ltd., and Sunny Import and Export Ltd., Plaintiffs,\nv.\nUNITED STATES, Defendant, and\nFresh Garlic Producers Association, Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Company, Inc., Defendant-Intervenors.\nSlip Op. 10-08. Court No. 06-00189.\nUnited States Court of International Trade.\nJanuary 25, 2010.\n*1323 Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, New York, NY (Mark E. Pardo), for Plaintiffs Zhengzhou Harmoni Spice Co., Ltd., Jinan Yipin Corporation, Ltd., Jining Trans-High Trading Co., Ltd., Jinxiang Shanyang Freezing Storage Co., Ltd., Linshu Dading Private Agricultural Products Co., Ltd., Shanghai LJ International Trading Co., Ltd., and Sunny Import and Export Ltd.\nTony West, Assistant Attorney General; Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director, Commercial Litigation Branch, Civil Division U.S. Department of Justice (Richard P. Schroeder); for Defendant.\nKelley Drye & Warren LLP (Michael J. Coursey and John M. Herrmann), for Defendant-Intervenor *1324 Fresh Garlic Producers Association, and its individual members, Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Company, Inc.\n\nOPINION\nRIDGWAY, Judge.\nIn this action, certain Chinese producers/exporters of fresh garlic challenge the U.S. Department of Commerce's determination (the \"Final Results\") in the agency's tenth administrative review of the antidumping duty order covering fresh garlic from the People's Republic of China.\nAlthough the complaint in this action was filed on behalf of seven Chinese producers/exporters, only four of the seven Plaintiffs moved for judgment on the agency record. See Zhengzhou Harmoni Spice Co., Ltd. v. United States, 33 CIT ___, ___ & n. 2, 617 F.Supp.2d 1281, 1285 & n. 2 (2009) (\"Zhengzhou Harmoni I\"). In Zhengzhou Harmoni I, the four Plaintiffs' Motion for Judgment on the Agency Record was granted in part, and this matter was remanded to Commerce for further consideration. See generally id., 33 CIT ___, 617 F.Supp.2d 1281. The remand results have not yet been filed by the agency.\nNow pending before the Court is Plaintiffs' Partial Consent Motion for Voluntary Dismissal with prejudice, filed on behalf of four Plaintiffs\u0097specifically, the three Plaintiff Chinese producers/exporters that did not join in the Motion for Judgment on the Agency Record (i.e., Jining TransHigh Trading Co., Ltd., Jinxiang Shanyang Freezing Storage Co., Ltd., and Shanghai LJ International Trading Co., Ltd.), as well as Zhengzhou Harmoni Spice Co., Ltd. (\"Harmoni\") (one of the Plaintiff Chinese producers/exporters which was a party to that motion). See generally Plaintiffs' Partial Consent Motion for Voluntary Dismissal (\"Pls.' Motion\"); Plaintiffs' Reply to Defendant-Intervenors' Opposition to the Partial Consent Motion for Voluntary Dismissal (\"Pls.' Reply\").[1]\nThe Government consents to the dismissal of the four Withdrawing Plaintiffs; and the three remaining Plaintiffs (i.e., Jinan Yipin Corporation, Ltd., Linshu Dading Private Agricultural Products Co., Ltd., and Sunny Import and Export Ltd.) apparently also do not object. See Pls.' Motion at 1. However, Defendant-Intervenors \u0097domestic producers of fresh garlic (\"the Domestic Producers\")\u0097oppose the four Plaintiffs' dismissal. See Defendant-Intervenors' Response in Opposition to Plaintiffs' Partial Consent Motion for Voluntary Dismissal (\"Def.-Ints.' Opposition\").[2]\nJurisdiction lies under 28 U.S.C. \u00a7 1581(c) (2000). For the reasons set forth below, Plaintiffs' Partial Consent Motion for Voluntary Dismissal with prejudice is granted.\n\nI. BACKGROUND\n\nCommerce's final determinations in administrative reviews of antidumping duty orders may be challenged in this court by any interested party which participated *1325 in the agency proceeding\u0097including foreign producers, exporters, and importers, as well as the domestic industry. See generally 19 U.S.C. \u00a7 1516a (2000). Other interested parties that participated in the agency proceeding may intervene in such actions (whether as defendant-intervenors on the side of Commerce, to defend Commerce's final results as correct, or, less typically, as plaintiff-intervenors). See generally 28 U.S.C. \u00a7 2631(j)(1)(B) (2000). However, the presence or absence of other parties as intervenors in an action has no bearing on the ability of a plaintiff to obtain full relief.\nThus, for example, if a domestic producer brings an action in this court against Commerce alleging that the dumping margins calculated by the agency for various foreign producers are too low, and if the domestic producer prevails in that action, Commerce will be required to make appropriate changes increasing the dumping margins for the foreign producers at issue \u0097without regard to whether or not the foreign producers participated as defendant-intervenors in that proceeding. By the same token, if a foreign producer/exporter brings an action against Commerce alleging that the calculated dumping margin for the company is too high, and if the foreign producer/exporter prevails in that action, Commerce will be required to make appropriate changes decreasing the foreign producer's dumping margin\u0097without regard to whether or not any domestic producers participated as defendant-intervenors in the proceeding.\nIn actions such as the case at bar, the only necessary parties are the plaintiff, and the defendant (i.e., Commerce). Under the statutory scheme, there is no procedure \u0097and no need\u0097to compel other parties to participate in litigation in order to accord a plaintiff complete relief. And an aggrieved party\u0097whether foreign or domestic\u0097must maintain its own action in order to ensure its right to seek judicial review and appropriate relief.\nThe instant action is just one of two that were filed challenging Commerce's Final Results in the tenth administrative review of the antidumping duty order on fresh garlic from China.[3] Just as the instant action was filed by seven Chinese garlic producers/exporters contending that the dumping margins calculated by Commerce in the Final Results are too high, so too the Domestic Producers brought their own separate action, challenging the dumping margins calculated in the Final Results as too low. See generally Complaint (filed May 10, 2006, by Domestic Producers in Court No. 06-00150). As is typical in such cases, the Domestic Producers intervened as Defendant-Intervenors in the instant action (to defend Commerce against the Plaintiff Chinese producers/exporters' claims that the dumping margins calculated by the agency were too high); and the seven Chinese garlic producers/exporters intervened as Defendant-Intervenors in the Domestic Producers' action (to defend Commerce against the Domestic Producers' claims that the calculated dumping margins were too low).\nThe two actions were subsequently consolidated, at the parties' request. However, the Domestic Producers voluntarily dismissed their action soon thereafter. See Consent Motion to Sever and Dismiss; Order (Dec. 29, 2006) (dismissing Domestic Producers' Complaint in Court No. 06-00150, and approving their continued participation as Defendant-Intervenors in the instant action). The Domestic Producers offered no reasons for dismissing their action, *1326 but stated their intent to \"continue to participate ... as Defendant-Intervenors in [the instant] action.\" See Consent Motion to Sever and Dismiss. The Domestic Producers thus voluntarily abandoned their role as Plaintiffs challenging the Final Results as too low, and relegated themselves to the role of Defendant-Intervenors in the sole remaining case\u0097the instant case, commenced by the Plaintiff Chinese producers/exporters.\nThe Amended Scheduling Order entered at the request of all parties established deadlines for various events, including Plaintiffs' filing of a Motion for Judgment on the Agency Record. Thereafter, four of the seven Plaintiff Chinese producers/exporters filed a timely Motion for Judgment on the Agency Record, briefing a total of seven issues as to which they assert that Commerce erred in its Final Determination. Plaintiffs' counsel offered no explanation as to the three Plaintiffs that did not join in the Motion for Judgment on the Agency Record. Similarly, the Government and the Domestic Producers made no mention of the fact in their briefs. But the Court's opinion took note. See Zhengzhou Harmoni I, 33 CIT at ___ & n. 2, 617 F.Supp.2d at 1285 & n. 2.[4]\nZhengzhou Harmoni I granted the four Plaintiffs' Motion for Judgment on the Agency Record as to five of their seven claims, and remanded this matter to Commerce for further consideration. See Zhengzhou Harmoni I, 33 CIT at ___, 617 F.Supp.2d at 1334.[5] In the course of the agency's ongoing remand proceeding, the administrative record has been supplemented with additional factual information concerning at least some of the five issues on which the four Plaintiff Chinese producers/exporters prevailed in Zhengzhou Harmoni I, including the issue of the valuation of raw garlic bulb.\nThe new data placed on the record concerning the valuation of raw garlic bulb reportedly include information drawn from the Azadpur Produce Marketing Committee's \"Market Information Bulletin,\" which, according to the Domestic Producers, \"reflect[s] a surrogate value that is greater than the value [that Commerce] relied upon\" in its Final Results. See Def.-Ints.' Opposition at 3. The Domestic Producers suggest that \"if [Commerce] ultimately relies on this additional information to value garlic bulbs in its [remand results], there is a possibility that the antidumping margins calculated for the Plaintiffs will be higher than the margins calculated by [Commerce] in its final results.\" See id.\nThus, although the remand results have not yet even been filed,[6] much less reviewed *1327 by the Court, the Domestic Producers hypothesize that the remand results will rely on garlic bulb values drawn from the Azadpur Produce Marketing Committee bulletin, and, further, speculate that the four Withdrawing Plaintiffs\u0097Harmoni (one of the four Plaintiffs that joined in the Motion for Judgment on the Agency Record), as well as the three Plaintiffs that did not join in that motion\u0097are seeking dismissal in order to avoid any increased dumping margins that might result from an increase in Commerce's valuation of raw garlic bulb. See Def.-Ints.' Opposition at 6, 8.\nAs noted above, the Government consents to the dismissal with prejudice of the four Withdrawing Plaintiffs; and the three remaining Plaintiffs (i.e., Jinan Yipin Corporation, Ltd., Linshu Dading Private Agricultural Products Co., Ltd., and Sunny Import and Export Ltd.) apparently also do not object. See Pls.' Motion at 1. Only the Domestic Producers oppose the requested dismissal.\n\nII. ANALYSIS\n\nThe present motion is governed by USCIT Rule 41(a)(2), which permits a plaintiff to voluntarily dismiss its action, even late in the proceeding and even absent the consent of all parties, \"upon order of the court, and upon such terms and conditions as the court deems proper.\" See USCIT R. 41(a)(2); 8 Moore's Federal Practice 3d \u00a7 41.40[1] (2009); 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2364 at 451-56, 498-502 (2008); see also, e.g., Garber v. Chicago Mercantile Exchange, 570 F.3d 1361, 1365 (Fed.Cir.2009) (explaining that \"Rule 41(a)(2) contemplates dismissal of [an] action by the plaintiff at a latter stage of the proceedings without agreement from all parties involved\").[7] The purpose of the rule is \"to permit the plaintiff to dismiss [its] action while avoiding prejudice to the defendant through the imposition of curative conditions.\" 8 Moore's Federal Practice 3d \u00a7 41.40[1]; see also 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2364 at 472-74 (same); Tomoegawa (U.S.A.), Inc. v. United States, 15 CIT 182, 190, 763 F.Supp. 614, 620-21 (1991) (same).\nThus, as the Withdrawing Plaintiffs correctly observe, a motion for voluntary dismissal under Rule 41(a)(2) is committed to the sound discretion of the trial court, and should be granted absent a showing of \"clear legal prejudice\" to an opposing party. See Pls.' Motion at 3 (citing, inter alia, Ohlander v. Larson, 114 F.3d 1531, 1537 (10th Cir.1997)); 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2364 at 474-76 (stating that \"dismissal *1328 should be allowed unless the defendant will suffer some plain legal prejudice\"); id. \u00a7 2364 at 458-65 (explaining that \"[t]he grant or denial of a dismissal on motion under Rule 42(a)(2) is within the sound discretion of the trial court,\" and that trial court's ruling \"is reviewable by the court of appeals only for abuse of that discretion\"); 8 Moore's Federal Practice 3d \u00a7 41.40[2] (stating that motion for voluntary dismissal \"is addressed to the sound discretion of the [trial] court\"); id. \u00a7 41.40[5][a] (stating that even motion for dismissal without prejudice should be granted absent \"plain legal prejudice\" to defendant); id. \u00a7 41.40[7][b][i] (stating that \"prejudice to the defendant is the primary consideration\" in ruling on motion for voluntary dismissal); id. \u00a7 41.40[11][a] (discussing standard of review).[8]\nCourts across the country have articulated varying formulations of \"legal prejudice,\" enumerating factors to be evaluated in determining whether a motion for voluntary dismissal should be granted (and, if so, under what terms and conditions, if any). The Domestic Producers point to the factors recited by the Tenth Circuit in Ohlander\u0097\"the opposing party's effort and expense in preparing for trial; excessive delay and lack of diligence on the part of the movant; insufficient explanation of the need for a dismissal; and the present stage of litigation.\" See Def.-Ints.' Opposition at 4-5 (quoting Ohlander, 114 F.3d at 1537) (internal quotation marks omitted). The Domestic Producers also quote Hamm v. Rhone-Poulenc, in which the Eighth Circuit listed \"factors such as whether the party has presented a proper explanation for its desire to dismiss ...; whether a dismissal would result in a waste of judicial time and effort ...; and whether a dismissal will prejudice the defendants....\" See Def.-Ints.' Opposition at 5 (quoting Hamm v. Rhone-Poulenc Rorer Pharms. Inc., 187 F.3d 941, 950 (8th Cir.1999)).[9]\n*1329 Whatever may be the factors to be applied in a given jurisdiction, the primary focus of analysis remains \"whether there is prejudice to some legal interest, claim, or argument of the defendant, such as the loss of a federal forum, or the inability to conduct meaningful discovery. Legal prejudice is shown when actual legal rights are threatened or when monetary or other burdens appear to be extreme or unreasonable.\" 8 Moore's Federal Practice 3d \u00a7 41.40[6] (footnote omitted); see also id. \u00a7 41.40[7][b][i] (emphasizing that \"prejudice to the defendant is the primary consideration on a Rule 41(a)(2) motion\"); Walter Kidde Portable Equip. Inc. v. Universal Security Instruments, Inc., 479 F.3d 1330, 1336 (Fed.Cir.2007) (explaining that decision on motion for voluntary dismissal is \"within a district court's discretion... as long as there is no plain legal prejudice to the defendant\") (emphasis added).\nIn weighing the relevant factors and analyzing the extent of any cognizable \"legal prejudice\" to a defendant, courts must consider whether any potential harm to the defendant can be avoided by imposing terms and conditions on the dismissal. See 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2364 at 514; see also 8 Moore's Federal Practice 3d \u00a7 41.40[7][a] (stating that \"[r]egardless of the stage of the litigation, a motion for a voluntary dismissal should be granted when the prejudice to defendant may be cured through the imposition of terms or conditions,\" such as an award of costs).[10]\n*1330 Moreover, in weighing the relevant factors and analyzing the extent of any legal prejudice to the defendant, the courts have generally drawn a bright line distinction between dismissal with prejudice, and dismissal without prejudice. As the Court of Appeals for the Federal Circuit has underscored, dismissal without prejudice \"constitutes a final termination of the first action, [but] does not bar a second suit,\" while \"[a] dismissal with prejudice bars a subsequent action between the same parties or their privies on the same claim.\" See H.R. Techs., Inc. v. Astechnologies, Inc., 275 F.3d 1378, 1384 (Fed.Cir.2002) (emphasis added); see also 8 Moore's Federal Practice 3d \u00a7 41.40[9][f]. There is therefore a much greater risk of legal prejudice when dismissal is without prejudice, given the threat of future litigation.[11] In contrast, when dismissal is with prejudice, \"there is generally no potential for harm to the defendant.\" See United States v. T.J. Manalo, Inc., 33 CIT ___, ___, 659 F.Supp.2d 1297, 1301-02 (2009) (citing 8 Moore's Federal Practice 3d \u00a7 41.40[3] (stating that \"[i]n most cases, a court will grant a plaintiff's motion to dismiss with prejudice,\" because \"the defendant will have obtained a judgment on the merits that vindicates his rights and precludes any future suit by the plaintiff.\") (internal quotation marks and citation omitted)). Indeed, because dismissal with prejudice constitutes a complete adjudication of the action at issue, some courts have gone so far as to hold that a motion for voluntary dismissal with prejudice must be granted. See generally 8 Moore's Federal Practice 3d \u00a7 41.40[10][d][vii] (stating that, \"[a]s a general rule, the court lacks discretion to deny the motion if the plaintiff requests that the dismissal be with prejudice\").[12]\n*1331 In the present case, the four Withdrawing Plaintiffs seek dismissal with prejudice, and correctly observe that \"there should be no concern regarding legal prejudice to the defendant since Defendant [i.e., the Government] has consented to this motion.\" See Pls.' Motion at 3. However, any cognizable legal prejudice to the Defendant Intervenors\u0097the Domestic Producers\u0097must also be considered. See ITV Direct, Inc. v. Healthy Solutions, LLC, 445 F.3d 66, 70 (1st Cir.2006) (stating that \"a third-party intervenor's interests should also be considered\" in determining whether to grant voluntary dismissal); see e.g., County of Santa Fe v. Pub. Serv. Co. of N.M., 311 F.3d 1031, 1047-50 (10th Cir. 2002) (considering interests of and potential prejudice to intervenors); cf. 8 Moore's Federal Practice 3d \u00a7 41.40[3] (noting that, \"when the dismissal with prejudice does not dispose of the entire litigation, the court may inquire as to whether the remaining parties would be prejudiced by dismissal with prejudice\").\nThe Domestic Producers couch their arguments in the language of the factors that courts have used in evaluating whether to grant motions for voluntary dismissal (and, if so, whether the dismissal should be with or without prejudice, and whether it should be subject to any terms and conditions).[13] Distilled to their essence, however, the Domestic Producers' various arguments have a single basic thrust: that the four Withdrawing Plaintiffs are seeking to avoid potential increases in the dumping margins calculated in Commerce's Final Results, and that the requested dismissals \"would prejudice [the Domestic Producers'] interest in ensuring that the appropriate amount of antidumping duties are assessed\" on the shipments of fresh garlic at issue in this action. See Def.-Ints.' Opposition at 5-6, 8-9.\nAs detailed below, the analysis as to Harmoni and the analysis as to the three other Plaintiffs seeking dismissal differ to some degree. But the bottom line is the same. Any potential harm associated with the requested voluntary dismissals is fundamentally *1332 a consequence of the Domestic Producers' decision to dismiss their own action challenging the dumping margins calculated in Commerce's Final Results as too low. Having dismissed their own action (which was the proper vehicle under the statutory scheme for the claims that they are now seeking to press here), the Domestic Producers cannot hijack this action and force these Plaintiffs to maintain it for the sole purpose of serving the Domestic Producers' ends.\nIn short, the Domestic Producers here have failed to show that they will suffer any cognizable legal prejudice as a result of the requested voluntary dismissals with prejudice\u0097either as to the three Chinese producers/exporters that did not join in the Motion for Judgment on the Agency Record, or as to Harmoni, which was a party to that motion.\nEach of the Domestic Producers' arguments is analyzed below, in turn.\nThe Domestic Producers first assert that the four Withdrawing Plaintiffs \"have failed to offer any rationale whatsoever for... seeking a voluntary dismissal from this action.\" See Def.-Ints.' Opposition at 8; see also id. at 5, 6. No doubt the Withdrawing Plaintiffs could have been more direct and forthcoming.[14] But that fact causes no prejudice to the Domestic Producers in this case.\nSome courts have gone so far as to hold that \"the plaintiff's motive for seeking a voluntary dismissal is irrelevant.\" See, e.g., 8 Moore's Federal Practice 3d \u00a7 41.40[7][b][i]. Moreover, as a practical matter, a clear statement of the plaintiff's reasons for seeking dismissal is most important when the plaintiff's motion seeks voluntary dismissal without prejudice, because the court and any opposing parties need to be able to evaluate the circumstances surrounding any potential future litigation in order to determine whether dismissal without prejudice should be granted. See n. 11, supra (explaining that, in certain circumstances, a plaintiff's reasons for seeking dismissal without prejudice in order to bring a second suit may warrant denial of plaintiff's motion). In the instant case, however, the Withdrawing Plaintiffs seek dismissal with prejudice\u0097so there is no prospect of future litigation. The Domestic Producers here simply have not identified any particular potential prejudice to them associated with the Withdrawing Plaintiffs' failure to clearly spell out their reasons for seeking voluntary dismissal. Under these circumstances, the Withdrawing Plaintiffs' coyness does not suffice as grounds to deny the pending motion.\nThe Domestic Producers contend that the true motivation behind the pending *1333 motion is a desire on the part of the four Withdrawing Plaintiffs to avoid the effects on their dumping margins of a potential increase in Commerce's valuation of raw garlic bulb. See Def.-Ints.' Opposition at 6, 8. Even assuming that the Domestic Producers are correct in their suspicions about the Withdrawing Plaintiffs' motivations,[15] the Domestic Producers nevertheless have failed to demonstrate the type of cognizable legal prejudice required to defeat the Withdrawing Plaintiffs' motion and compel them to continue to maintain the instant action.\n\nA. Harmoni\n\nThe Domestic Producers underscore their interests in \"ensuring that the appropriate amount of antidumping duties are assessed on all of the various shipments of fresh garlic at issue in this action,\" and point to precedent recognizing that domestic producers \"derive a direct competitive benefit from the proper administration and enforcement of the antidumping laws, and more specifically, the proper assessment of antidumping duties [on merchandise subject to an antidumping duty order].\" See Def.-Ints.' Opposition at 5 (quoting SSAB v. U.S. Bureau of Customs & Border Protection, 32 CIT ___, ___, 571 F.Supp.2d. 1347, 1352 (2008) (internal quotation marks omitted) (alteration in original); citing Zenith Radio Corp. v. United States, 710 F.2d 806, 810 (Fed.Cir.1983) (acknowledging, in context of application for preliminary injunction, that \"[the domestic interested party] has a strong, continuing, commercial-competitive stake in assuring that its competing importers will not escape the monetary sanctions deliberately imposed by Congress. Defeat of that strong congressionally recognized competitive interest and the abrogation of effective judicial review are sufficient irreparable injury here.\")).\nArguing that Harmoni is seeking dismissal in an \"attempt[] to avoid the possibility that [Commerce] will calculate an above de minimis ... margin for it in the [remand results],\" and emphasizing that Harmoni was a party to the Motion for Judgment on the Agency Record filed in this action, the Domestic Producers contend that, \"[h]aving invoked this Court's jurisdiction to challenge the final results of the 10th administrative review, it would be unfair and prejudicial to [the Domestic Producers] to grant Plaintiffs' Motion as to Harmoni.\" See Def.-Ints.' Opposition at 6-7.[16] Contrary to the Domestic Producers' implication, however, there is no basis in the law for the notion that\u0097merely because Harmoni invoked the Court's jurisdiction and joined in the Motion for Judgment on the Agency Record\u0097Harmoni is somehow, by definition, precluded from seeking voluntary dismissal at this time.\nIndeed, by its very nature, Rule 41(a)(2) permits a plaintiff to voluntarily dismiss an action after a court's jurisdiction has been invoked and before final judgment is entered, provided that the dismissal causes no legal prejudice to an *1334 opposing party that cannot be remedied by the court's imposition of curative terms and conditions. See generally 8 Moore's Federal Practice 3d \u00a7 41.40[1] (purpose of Rule 41(a)(2) is \"to permit the plaintiff to dismiss the action [even later in a proceeding, and absent consent of all parties] while avoiding prejudice to the defendant through the imposition of curative conditions\"); 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2364 at 456, 472-76 (explaining that voluntary dismissals under Rule 41(a)(2) may be subject to terms and conditions imposed to remedy any \"plain legal prejudice\" that defendant would otherwise suffer); see, e.g., Garber v. Chicago Mercantile Exchange, 570 F.3d at 1365 (explaining that \"Rule 41(a)(2) contemplates dismissal of [an] action by the plaintiff at a latter stage of the proceedings without agreement from all parties involved\") (emphasis added).[17] As discussed herein, the Domestic Producers simply cannot demonstrate the requisite legal prejudice in this case.\nThe Domestic Producers' assertion that Harmoni is improperly seeking dismissal to avoid an adverse determination is equally unavailing. Although the Domestic Producers did not brief the applicable law, it is axiomatic that \"[a] motion for voluntary dismissal should generally be denied when the purpose is to avoid an adverse determination on the merits of the action.\" See 8 Moore's Federal Practice 3d \u00a7 41.40[7][b][v] (and authorities cited there). However, to render dismissal inappropriate, that adverse result must be \"expected.\" See, e.g., Radiant Tech. Corp. v. Electrovert USA Corp., 122 F.R.D. 201, 203-204 (N.D.Tex.1988) (\"[O]utright dismissal should be refused ... when a plaintiff seeks to circumvent an expected adverse result.\" (emphasis added)); Kern v. TXO Prod. Corp., 738 F.2d 968, 970-71 (8th Cir.1984) (affirming grant of motion for voluntary dismissal without prejudice, even though\u0097near end of presentation of plaintiff's case\u0097trial judge advised plaintiff *1335 in conference that directed verdict in favor of defendant should be expected; reasoning that, \"[a]lthough it was likely that that motion [for directed verdict in favor of defendant] would have been granted, we cannot say that it was certain.\") (emphasis added).[18]\nIn the instant case, it cannot be said with any reasonable degree of certainty that a result adverse to Harmoni is expected.[19] The sole decision issued to date in this litigation squarely favored Harmoni and the other Plaintiffs. Zhengzhou Harmoni I ruled overwhelmingly in favor of Plaintiffs (on five out of seven issues, including the issue of the valuation of raw garlic bulb\u0097the single issue on which the Domestic Producers here focus). See Zhengzhou Harmoni I, 33 CIT at ___, 617 F.Supp.2d at 1334.\nTo the extent that the Domestic Producers now postulate that Commerce's forthcoming remand results may reflect an increase in the value of raw garlic bulb over the value used in calculating the Final Results, it suffices to reiterate that the remand results have not yet issued. When they are released, the remand results may or may not reflect an increase in the value of raw garlic bulb. And, even more to the point, whatever the remand results say, there is no way to predict at this time whether those remand results ultimately will or will not be sustained by the Court.[20]*1336 One or more additional remands may be required, and at least one more judicial decision on the merits will be required, before final judgment can be entered in this case. Thus, as even the Domestic Producers themselves must concede, \"the specific content of the Commerce Department's [remand determination] (much less this Court's final decision on the merits) is speculative at this point.\" See Def.-Ints.' Opposition at 8.[21] The Domestic Producers' arguments as to Harmoni's avoidance of an \"adverse result\" are therefore lacking in substance.\nFinally, and most significantly, although the Domestic Producers' competitive interests in the proper assessment of antidumping duties on fresh garlic from China are beyond cavil, this action\u0097brought by the Chinese producers/exporters, contending that the dumping margins in the Final Results are too high\u0097is simply not the proper vehicle for the Domestic Producers' vindication of their interests in affirmatively challenging the dumping margins in the Final Results as too low. See generally Pls.' Motion at 5; Pls.' Reply at 2.\nAs discussed above, the Domestic Producers, in fact, initially brought their own action, affirmatively challenging the dumping margins in the Final Results as too low. See section I, supra. By dismissing their own action, however, the Domestic Producers voluntarily abandoned their role as Plaintiffs contesting the Final Results as too low, and relegated themselves to the role of Defendant-Intervenors in the sole remaining case\u0097the instant case, commenced by the Plaintiff Chinese producers/exporters.[22]\n*1337 Had the Domestic Producers persevered in their own action against Commerce, any changes in the calculated dumping margins resulting from the litigation would have applied to all respondent Chinese producers/exporters (whether or not the Chinese producers/exporters had intervened in the Domestic Producers' action, and whether or not the Chinese producers/exporters maintained the instant action). In other words, if the Domestic Producers had not dismissed their own action, it would be of no moment to them now whether or not Harmoni and the other three Withdrawing Plaintiffs were dismissed from this action.\nThe Domestic Producers \"cannot now assert a `legal right' to seek a change in the final results after dismissing their own appeal.\" See Pls.' Reply at 2. Given the statutory scheme established to govern challenges to Commerce's final determinations in cases such as this, the Domestic Producers' arguments here cannot constitute cognizable \"legal prejudice.\" See generally Pls.' Reply at 2-3.\nAs the Withdrawing Plaintiffs conclude, \"[i]f [the Domestic Producers] believed that the Department of Commerce was not assessing shipments of garlic at the correct antidumping duty rate, then their proper legal recourse was to maintain their appeal challenging the final results of the administrative review.\" See Pls.' Reply at 2. Instead, for whatever reasons, the Domestic Producers dismissed their own action, and chose to proceed solely as Defendant-Intervenors in this action. Having voluntarily elected to forsake the vehicle established by the statute for the vindication of their interests in challenging dumping margins as too low, the Domestic Producers cannot now subvert Congress' statutory scheme by forcing Harmoni to maintain this action so that it can be re-purposed to serve the Domestic Producers' ends.[23]\n\nB. The Other Three Withdrawing Plaintiffs\n\nAs set forth above, the Domestic Producers here cannot demonstrate the type of legal prejudice required to justify denying Harmoni's motion for voluntary dismissal with prejudice. If anything, the Domestic Producers' case against dismissal of the other three Withdrawing Plaintiffs \u0097Jining Trans-High Trading Co., Ltd., Jinxiang Shanyang Freezing Storage Co., Ltd., and Shanghai LJ International Trading Co., Ltd.\u0097is even weaker.\nThe Domestic Producers first contend that \"the present state of the litigation\" and \"excessive delay and lack of diligence\" warrant denial of the motion to dismiss as to the three other Withdrawing Plaintiffs. See Def.-Ints.' Opposition at 7. The Domestic Producers assert that, if the three Plaintiffs at issue wished to withdraw, they were required to do so earlier. See Def.-Ints.' Opposition at 7-8. According to the Domestic Producers, the three Plaintiffs' failure to seek dismissal prior to the issuance of Zhengzhou Harmoni I warrants denial of their motion. See Def.Ints.' Opposition *1338 at 8.[24]\nIn particular, the Domestic Producers complain that the three Plaintiffs \"have now had an opportunity to evaluate both [Zhengzhou Harmoni I], as well as the potential content of the Commerce Department's [remand results].\" See Def.-Ints.' Opposition at 7. The Domestic Producers argue that \"[t]o allow the three ... Plaintiffs [at issue] to withdraw from this action after assessing the likely impact of the [remand results] is unreasonable,\" asserting that granting dismissal in this case would \"establish a precedent that would enable Plaintiffs to `opt in' to an action where the Court's initial decision and the agency redetermination are favorable to their interests, and to `opt out' of an action through voluntary dismissal where it is contrary to their interests.\" Def.-Ints.' Opposition at 7. But the Domestic Producers' \"opt-in/opt-out\" argument is devoid of merit, both in general and as applied to this case.\nThe Domestic Producers predict that, if the pending motion is granted, future plaintiffs will seek to \"opt out\" of litigation if they perceive that their continued participation will be \"contrary to their interests.\" See Def.-Ints.' Opposition at 7-8. As explained above, however, that is precisely the point of Rule 41(a)(2)\u0097to permit a plaintiff to voluntarily dismiss an action, even relatively late in the litigation and even absent the consent of all parties, provided that the dismissal causes no legal prejudice to an opposing party that cannot be remedied by curative conditions. See section II.A, supra.[25] And, as discussed herein, the Domestic Producers have failed to demonstrate any such legal prejudice.\nThe Domestic Producers' \"opt in\" argument is no more well-founded. According to the Domestic Producers, \"[h]ad the non-movant Plaintiffs interpreted [Zhengzhou Harmoni I] to be in their favor, they could have filed their own [Motion for Judgment on the Agency Record] raising the same issues, and arguing that the law of the case compels this Court to decide the issues in their favor.\" See Def.-Ints.' Opposition at 8. The Domestic Producers cite no authority for this extraordinary proposition, however; and nothing could be further from the truth.\nUnlike the other four Plaintiffs, the three Withdrawing Plaintiffs at issue here failed to file a timely Motion for Judgment on the Agency Record in accordance with the deadline established in the Amended Scheduling Order governing this action. That failure effectively precludes the three *1339 Plaintiffs from seeking to avail themselves of Zhengzhou Harmoni I and any subsequent decisions in this matter (to the extent that they might wish to do so), just as surely as their failure effectively precludes them from being bound by the Court's decisions.[26]\nThe same rationale disposes of the Domestic Producers' assertions that \"Trans-High and Shanghai LJ are attempting to avoid [Commerce's] calculation of a positive dumping margin,\" and that \"Shanyang is attempting to avoid its antidumping margin increasing.\" See Def.-Ints.' Opposition at 8.[27] Contrary to the Domestic Producers' claims, dismissal of the three Plaintiffs with prejudice will have no effect on their exposure to increased (or, for that matter, their ability to avail themselves of decreased) dumping margins, because the three Plaintiffs have no such exposure at this time. Nor will the dismissal prejudice the Domestic Producers' asserted \"interest in having the appropriate amount of antidumping duties assessed on the shipments\" of the three Plaintiffs at issue. See Def.-Ints.' Opposition at 8-9.\nIn a nutshell, by failing to file a timely Motion for Judgment on the Agency Record challenging the dumping margins set forth in the Final Results, the three Withdrawing Plaintiffs became bound by those margins (without regard to the outcome of this action). Their dismissal with prejudice at this time thus will merely formalize the status that the three Plaintiffs attained months ago, when they essentially defaulted by failing to file a timely Motion for Judgment on the Agency Record.[28]\nUnder such circumstances, as with Harmoni, there can be no legal prejudice to the Domestic Producers as a result of the voluntary dismissal of the three remaining Withdrawing Plaintiffs. Accordingly, as to Plaintiffs Jining Trans-High Trading Co., Ltd., Jinxiang Shanyang Freezing Storage Co., Ltd., and Shanghai LJ International Trading Co., Ltd., this action shall be dismissed with prejudice.\n\nIII. CONCLUSION\n\nFor all the reasons set forth above, Plaintiffs' Partial Consent Motion for Voluntary *1340 Dismissal is granted, and Plaintiffs Zhengzhou Harmoni Spice Co., Ltd., Jining Trans High Trading Co., Ltd., Jinxiang Shanyang Freezing Storage Co., Ltd., and Shanghai LJ International Trading Co., Ltd. shall be dismissed with prejudice from this action. See USCIT R. 41(a)(2).\nNOTES\n[1] The four Plaintiffs seeking dismissal are referred to collectively herein as the \"Withdrawing Plaintiffs.\" The pending Motion for Voluntary Dismissal notes that \"[t]he remaining plaintiffs, Jinan Yipin Corporation, Ltd., Linshu Dading Private Agricultural Products Co., Ltd., and Sunny Import and Export Ltd., [intend to] proceed with this appeal.\" Pls.' Motion at 1 n. 1.\n[2] As in Zhengzhou Harmoni I, the Domestic Producers are the Fresh Garlic Producers Association and its individual members, Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Company, Inc. See Zhengzhou Harmoni I, 33 CIT at ___ n. 4, 617 F.Supp.2d at 1286 n. 4.\n[3] The statute provides for an annual administrative review of the accuracy of dumping margins, at the request of an interested party. 19 U.S.C. \u00a7 1675(a) (2000).\n[4] In Zhengzhou Harmoni I, the four movant Plaintiffs were collectively referred to as \"the Chinese Producers.\" Other Chinese garlic producers and exporters involved in Commerce's administrative review\u0097including the three Plaintiffs that did not join in the Motion for Judgment on the Agency Record\u0097were generally referred to simply as \"respondents.\" See Zhengzhou Harmoni I, 33 CIT at ___ n. 2, 617 F.Supp.2d at 1285 n. 2.\n[5] Specifically, the four Plaintiff Chinese producers/exporters prevailed on their challenges to the surrogate values used in Commerce's calculations for various inputs used in the production of fresh garlic, including the labor/wage rate, the cost of ocean freight, the cost of packing cartons, the cost of plastic jars and lids, and the cost of raw garlic bulb. See Zhengzhou Harmoni I, 33 CIT at ___, 617 F.Supp.2d at 1334.\n\nThe four Plaintiffs' Motion for Judgment on the Agency Record was denied as to both their challenge to Commerce's use of an intermediate input methodology in valuing raw garlic bulb, and their claim that Commerce improperly included provident fund and gratuity expenses as part of manufacturing overhead. Id.\n[6] At the request of the parties, the deadline for Commerce's filing of the remand results was suspended pending a ruling on the instant motion.\n[7] USCIT Rule 41(a)(2) parallels Rule 41(a)(2) of the Federal Rules of Civil Procedure. The language of both rules has been recently amended, though the changes have no bearing on this case. At the time of the filing of the pending motion, USCIT Rule 41(a)(2) specified that:\n\nExcept as provided in [USCIT Rule 41(a)(1)], an action shall not be dismissed by the plaintiff unless upon order of the court, and upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded by a defendant prior to the service upon the defendant of the plaintiff's motion to dismiss, the action shall not be dismissed against the defendant's objection unless the counterclaim can remain pending for independent adjudication by the court. Unless otherwise specified in the order, a dismissal under this paragraph is without prejudice.\nUSCIT Rule 41(a)(2); compare Fed.R.Civ.P. 41(a)(2). USCIT Rule 41(a)(1)\u0097which has no application here\u0097governs voluntary dismissals early in a proceeding (before service of an answer or dispositive motion, whichever occurs first), as well as later voluntary dismissals to which all parties consent. See generally 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2363 (summarizing operation of Fed.R.Civ.P. 41(a)(1)).\n[8] See also, e.g., Walter Kidde Portable Equip., Inc. v. Universal Security Instruments, Inc., 479 F.3d 1330, 1337 (Fed.Cir.2007) (stating that decision on motion for voluntary dismissal is \"within a district court's discretion ... as long as there is no plain legal prejudice to the defendant\") (applying law of 4th Circuit); Highway Equip. Co. v. FECO, Ltd., 469 F.3d 1027, 1034 (Fed.Cir.2006) (noting that 8th Circuit has held that \"voluntary dismissals under Fed.R.Civ.P. 41(a) should be granted only if no other party will be prejudiced\"); H.R. Techs., Inc. v. Astechnologies, Inc., 275 F.3d 1378, 1384 (Fed.Cir.2002) (stating that, \"[u]nder Sixth Circuit law, the decision whether to dismiss with or without prejudice is committed to the sound discretion of the district court.\"); United States v. T.J. Manalo, Inc., 33 CIT ___, ___, 2009 WL 3287941, at * 4 (2009) (noting that decision on motion for voluntary dismissal is \"committed to the [trial] court's sound discretion,\" and that \"`[c]lear legal prejudice to the defendant is the foremost factor' to be considered\") (citation omitted); Tomoegawa, 15 CIT at 190, 763 F.Supp. at 620-21 (same).\n[9] See generally 8 Moore's Federal Practice 3d \u00a7\u00a7 41.40[6]-[7] (summarizing criteria most commonly considered in evaluating motions for voluntary dismissal, and surveying factors as articulated by various circuits); 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2364 at 504-513 (surveying factors as articulated by various circuits); see also, e.g., Walter Kidde Portable Equip., 479 F.3d at 1337 (summarizing factors to be considered in determining potential prejudice to defendant, under law of 4th Circuit); Highway Equip. Co. v. FECO, 469 F.3d at 1034 (summarizing factors to be considered in deciding whether voluntary dismissal should be with prejudice or without prejudice, under law of 8th Circuit).\n\nAs the Ohlander court emphasized, such lists of factors are not exhaustive, and each individual case must be evaluated on its own facts. See Ohlander, 114 F.3d at 1537. Further, \"[e]ach factor need not be resolved in favor of the moving party for dismissal to be appropriate, nor need each factor be resolved in favor of the opposing party for denial of the motion to be proper.\" Id.; see also 8 Moore's Federal Practice 3d \u00a7 41.40[6] (stating that \"the lists [of factors] formulated [by the courts] have been non-exclusive and are meant to serve merely as guidelines for the [trial] court\"). Moreover, the \"traditional factors to be considered ... should not necessarily override factors that are `unique to the context of [the] case'.\" County of Santa Fe v. Pub. Serv. Co. of N.M., 311 F.3d 1031, 1048 n. 14 (10th Cir.2002) (quoting Ohlander, 114 F.3d at 1537).\nAs an aside, a close reading of the caselaw reveals some disarray. Factors are sometimes identified as the criteria to be weighed in deciding whether or not to grant a motion for voluntary dismissal (and, if so, under what terms and conditions, if any). Other times the same factors are identified as the criteria to be considered in evaluating the potential for legal prejudice to a defendant which would result from granting voluntary dismissal. And still other times, the same factors are listed as the criteria to be considered in determining whether voluntary dismissal should be granted with prejudice or without prejudice. See generally 8 Moore's Federal Practice \u00a7 41.40[10][d][vii] (observing that \"[t]he factors considered in determining whether the dismissal should be with [or without] prejudice are essentially the same as those considered in determining whether the dismissal should be permitted at all.\").\n[10] The \"terms and conditions\" most commonly imposed concern plaintiff's payment of defendant's costs of litigation. See generally 8 Moore's Federal Practice 3d \u00a7 41.40[10][d][i]-[iii] (surveying caselaw on court's discretion to condition voluntary dismissal on plaintiff's payment of defendant's costs of litigation); 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2366 at 526-27 (stating that it has become \"commonplace\" to require plaintiff to pay defendant's costs as condition of voluntary dismissal).\n\nHowever, an award of litigation costs generally is limited to expenses incurred in preparing work product that would not be useful in subsequent litigation of the same claim. See 8 Moore's Federal Practice 3d \u00a7 41.40[10][d][ii]-[iii]; 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2366 at 532. Thus, when a voluntary dismissal is with prejudice, it is generally inappropriate to condition dismissal on plaintiff's payment of defendant's costs. See generally 8 Moore's Federal Practice 3d \u00a7 41.40[10][d][viii] (noting that \"[a]n award of costs and attorney's fees should be denied if the voluntary dismissal is with prejudice, because the defendant is not confronted with the future risk of litigation\"); 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2366 at 538-40 (stating, inter alia, that \"[m]any courts have held that if the dismissal is with prejudice, the court lacks the power to require the payment of attorney's fees, unless the case is of a kind in which attorney's fees otherwise might be ordered after termination on the merits.\" (footnote omitted)).\n[11] \"[T]he mere prospect of a second lawsuit following a voluntary dismissal without prejudice does not constitute plain legal prejudice\" warranting denial of the motion to dismiss. 8 Moore's Federal Practice 3d \u00a7 41.40[5][c]; see also 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2364 at 474-76. Moreover, the fact that a plaintiff may obtain some \"tactical advantage\" is not grounds for denying a motion for voluntary dismissal, even when dismissal is without prejudice. See 8 Moore's Federal Practice 3d \u00a7 41.40[5][d]; 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2364 at 477-85; see also Walter Kidde Portable Equip., 479 F.3d at 1337 (noting that trial court has discretion to grant voluntary dismissal without prejudice, as long as there is no \"plain legal prejudice\" to defendant, even if plaintiff \"`will gain a tactical advantage over the defendant in future litigation,' ... such as a nullification of an adverse ruling in the first action\") (citation omitted).\n\nHowever, under certain circumstances, a plaintiff's reasons for seeking dismissal without prejudice in order to bring a second suit may warrant denial of the plaintiff's motion. For example, some courts have held that dismissal without prejudice may be denied where the substantive law which would be applied in the prospective new forum would prejudice the defendant. See 8 Moore's Federal Practice 3d \u00a7 41.40[7][b][ii]; 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2364 at 494. Similarly, \"[s]ome courts have found that the loss of [a] statute of limitations defense constitutes plain legal defense,\" although other courts have held to the contrary. See 8 Moore's Federal Practice 3d \u00a7 41.40[7][b][viii]; see also 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2364 at 488-89. For an overview of relevant caselaw, see generally 8 Moore's Federal Practice 3d \u00a7\u00a7 41.40[5][b], 41.40[6], 41.40[7][a]-[e]; 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2364 at 474-513.\n[12] See also 8 Moore's Federal Practice 3d \u00a7 41.40[3] (explaining that \"[s]ome courts have held that the court lacks discretion to deny a motion under Rule 41(a)(2) when the plaintiff requests that the dismissal be made with prejudice, because the defendant receives all the relief that could have been obtained after a full trial and is protected from future litigation by the doctrine of res judicata.\"); 9 Wright & Miller, Federal Practice and Procedure: Civil 3d \u00a7 2364 at 551 (stating that \"[i]f the plaintiff moves for an order ... for voluntary dismissal specifically requesting that the dismissal be with prejudice, it has been held that the district court must grant that request\"); id. \u00a7 2364 at 469-70 (explaining that, while \"[m]any courts have taken the sensible position that dismissal without prejudice generally should be granted ... if no prejudicial effects would result for the opposing party,\" the courts have gone even further where dismissal is with prejudice; since a voluntary dismissal with prejudice \"is a complete adjudication of the claims and a bar to a further action on them ..., it has been held that [the trial court] has no discretion to refuse such a dismissal and cannot force an unwilling plaintiff to go to trial\"). But see, e.g., County of Santa Fe v. Pub. Serv. Co. of N.M., 311 F.3d at 1048-49 (recognizing that \"[i]n most cases, the normal analysis will result in the district court granting the plaintiff's motion to dismiss with prejudice,\" but declining to adopt per se \"blanket\" rule requiring that motions for voluntary dismissal with prejudice be granted in all cases; holding that trial court erred in granting plaintiff's motion for voluntary dismissal with prejudice \"where the relief sought by the intervenors is the prosecution of a cause of action by the very plaintiff seeking dismissal with prejudice of that cause of action\") (discussed in 8 Moore's Federal Practice 3d \u00a7 41.40[3]).\n[13] See Def.-Ints.' Opposition at 5, 6, 8 (asserting that the Withdrawing Plaintiffs have failed to offer an explanation for seeking voluntary dismissal); id. at 7 (arguing that \"the present state of litigation\" weighs against voluntary dismissal of the three Withdrawing Plaintiffs that did not join in the Motion for Judgment on the Agency Record); id. at 7 (asserting that \"excessive delay and lack of diligence\" on the part of the three Withdrawing Plaintiffs that did not join in the Motion for Judgment on the Agency Record counsels against their voluntary dismissal).\n[14] As grounds for their motion for voluntary dismissal, the Withdrawing Plaintiffs state that \"granting the motion ... will promote efficient use of agency resources by significantly reducing Commerce's burden in its remand,\" and \"will also promote judicial economy in general,\" by \"streamlin[ing] this appeal and prevent[ing] the possibility of future inefficiencies.\" See Pls.' Motion at 4. The Withdrawing Plaintiffs further explain that \"the costs and efforts involved with continued participation in this appeal now outweigh any potential benefit.\" See Pls.' Reply at 4. For reasons discussed below, however, that rationale really holds water only as to Harmoni. See section II.B, infra. As detailed there, whatever \"costs and efforts\" the other three Withdrawing Plaintiffs have expended or would expend in the future but for voluntary dismissal, the Withdrawing Plaintiffs have no \"potential benefit\" to gain from continued participation in this action, because\u0097by failing to file a timely Motion for Judgment on the Agency Record\u0097the three Withdrawing Plaintiffs became bound by the dumping margins calculated in Commerce's Final Results. Id.\n[15] In their reply, the Withdrawing Plaintiffs intimate that\u0097as the Domestic Producers assert \u0097the possibility of an increase in the Withdrawing Plaintiffs' dumping margins may have \"factored into [the] Withdrawing Plaintiffs' decision\" to file the pending motion. See Pls.' Reply at 4-5.\n[16] Indeed, the Domestic Producers question why Harmoni was a plaintiff in this action in the first place, given that Harmoni was assigned a de minimis margin (0.27%) in Commerce's Final Results. See Def.-Ints.' Opposition at 3, 6.\n[17] Thus, for example, contrary to the Domestic Producers' implications, \"the mere filing of a ... [dispositive] motion is not, without more, a basis to deny a voluntary dismissal,\" even when that dismissal is without prejudice. See 8 Moore's Federal Practice 3d \u00a7 41.40[5][b].\n\nFurther, \"the advanced stage of the litigation\" alone never mandates denial of a motion for voluntary dismissal. 8 Moore's Federal Practice 3d \u00a7 41.40[7][a]; see, e.g., Kern v. TXO Prod. Corp., 738 F.2d 968, 970-71 (8th Cir.1984) (affirming grant of motion for voluntary dismissal without prejudice, even though plaintiff had presented four of five witnesses at trial, and trial judge had advised plaintiff in conference that directed verdict in favor of defendant should be expected) (cited in 8 Moore's Federal Practice 3d \u00a7 41.40[7][a]). In fact, a motion for voluntary dismissal should be granted\u0097without regard to the stage of the litigation\u0097whenever the prejudice to the defendant (if any) can be cured through the imposition of terms or conditions. Id. \u00a7 41.40[7][a].\nThe prejudice most commonly associated with a late-stage motion for voluntary dismissal are the defendant's litigation costs. Such a prejudice can be cured by conditioning dismissal on the plaintiff's payment of appropriate litigation costs, however, and thus cannot justify denial of a motion for voluntary dismissal. In any event, as the Withdrawing Plaintiffs observe, \"every issue that has been raised and briefed in this appeal affects the remaining plaintiffs\"\u0097Jinan Yipin Corporation, Ltd., Linshu Dading Private Agricultural Products Co., Ltd., and Sunny Import and Export Ltd.\u0097\"and would have been raised in the complaint and briefed even in the absence of [the] Withdrawing Plaintiffs' involvement\" in the case. See Pls.' Motion at 3. The Domestic Producers therefore cannot claim that an earlier motion for voluntary dismissal would have reduced their litigation costs here. Nor do the Domestic Producers identify any other potential prejudice related specifically to the timing of the pending motion.\n[18] See also DuToit v. Strategic Minerals Corp., 136 F.R.D. 82, 85-86 (D.Del.1991) (\"The case law suggests that a plaintiff's purported desire to avoid a potential adverse determination does not warrant denial of voluntary dismissal unless the plaintiff's motion follows an indication by the court that it intends to rule against the plaintiff on [some] pending motion.\" (emphasis added)).\n\nFurther, a close reading of well-reasoned decisions on point reveals that most cases where dismissal is denied because the plaintiff seeks to avoid an adverse result involve motions for dismissal without prejudice, and reflect a preference for a court ruling on some pending motion rather than granting the plaintiff a \"do-over\" and leaving the defendant open to repeat litigation on issues that have already been (at least partially) litigated. Thus, for example, the Tenth Circuit explained: \"We agree with the district court that a party should not be permitted to avoid an adverse decision on a dispositive motion by dismissing a claim without prejudice.\" Phillips USA, Inc. v. Allflex USA, Inc., 77 F.3d 354, 358 (10th Cir.1996) (emphasis added) (affirming trial court's denial of motion to dismiss without prejudice); see also, e.g., Minnesota Mining & Mfg. Co. v. Barr Labs., Inc., 289 F.3d 775, 784 (Fed.Cir.2002) (affirming trial court's decision denying motion for dismissal without prejudice, explaining that \"under the circumstances, a dismissal without prejudice might well have constituted an abuse of discretion since 3M was plainly seeking to avoid an adverse judgment\"). In the instant case, of course, Harmoni and the other Withdrawing Plaintiffs seek dismissal with prejudice.\n[19] As discussed below, however, the fundamental flaw in the Domestic Producers' position is that this action is not the proper vehicle under the statute for the vindication of the Domestic Producers' interests in arguing that the dumping margins calculated in Commerce's Final Results are too low. Given that basic fact, it may well be that the plaintiffs here would be entitled to dismiss their action with prejudice over the objections of the Domestic Producers even if the reason for the requested dismissal was to avoid an adverse result that was a virtual certainty. But that is a question for another day.\n[20] Compare, e.g., DuToit, 136 F.R.D. at 85-86 (granting motion for voluntary dismissal without prejudice, over defendants' objections that motive for seeking dismissal was \"to avoid what will most likely be a ruling in defendants' favor on their forum non conveniens motion given this Courts decision in Dawson\" (citation omitted); reasoning that \"the Court has not indicated how it would rule on the forum non conveniens issue in this case; defendants' assertions about plaintiffs' motive are based on what they anticipate would be a ruling in their favor given the Court's earlier holding in Dawson\"; and declining to \"search[] plaintiffs' souls for their true motive in seeking voluntary dismissal\" as \"an endeavor better left to a divine authority\").\n[21] Other statements in the Domestic Producers' memorandum similarly reflect the hypothetical and speculative nature of their assertions of alleged potential legal prejudice. See, e.g., Def.-Ints.' Opposition at 3 (arguing that, \"if [Commerce] ultimately relies on this additional information to value garlic bulbs in its [remand determination], there is a possibility that the antidumping margins calculated for the Plaintiffs will be higher than the margins calculated ... in [the] final results\") (emphases added); id. at 6 (asserting that the Domestic Producers would be adversely affected by permitting Harmoni's withdrawal because Harmoni would \"avoid the possibility that the Department will calculate an above de minimis antidumping duty margin for it in the redetermination.\") (emphasis added); id. at 8 (alleging that Commerce's remand determination is \"potentially trending against\" the Chinese Producers' interests) (emphasis added.).\n[22] The Domestic Producers were clearly cognizant that their role as Defendant-Intervenors in the present action was confined to defending the accuracy of Commerce's Final Results against the Plaintiff Chinese Producers' claims that the dumping margins calculated by the agency were too high. See Pls.' Motion at 5; Pls.' Reply at 2. Although the Domestic Producers had abandoned their own action (which challenged Commerce's valuation of raw garlicbulb as too low), the Domestic Producers made no attempt to raise their affirmative claim in their opposition to the Plaintiff Chinese Producers' Motion for Judgment on the Agency Record. Nor could the Domestic Producers\u0097as Defendant-Intervenors \u0097properly have done so. See Defendant-Intervenors' Brief in Response to Plaintiffs' Motion for Judgment on the Administrative Record at 17 (candidly acknowledging that \"[i]nasmuch as [the Domestic Producers] initially filed [their] own action seeking review of Commerce's use of the `China' Agmarknet price [to value raw garlic bulb], [the Domestic Producers are] not prepared to defend Commerce's choice of the price for garlic designated as `China' in the Agmarknet data as the surrogate value for raw garlic bulb (even though that action was voluntarily dismissed),\" but noting that the Domestic Producers were \"prepared to defend... the principle underlying Commerce's choice\u0097that is the notion that the surrogate value for raw garlic bulb should be... representative of the large-bulb garlic exported by the [respondent Chinese Producers] to the United States\"); see generally id. at 3-4, 16-20 (addressing Chinese Producers' challenge to valuation of raw garlic bulb in calculating Final Results).\n[23] As the Withdrawing Plaintiffs note, it is telling that the Domestic Producers' memorandum in opposition to the pending motion makes no mention whatsoever of the separate action that the Domestic Producers themselves brought, but then voluntarily dismissed. See Pls.' Reply at 1-2.\n[24] To be sure, the three Withdrawing Plaintiffs' delay in seeking voluntary dismissal has caused some confusion, which could have been avoided had they timely sought voluntary dismissal when they decided not to join in Plaintiffs' Motion for Judgment on the Agency Record. Nevertheless, for the reasons detailed above, the timing of the pending motion is not grounds for the denial of the motion, given the circumstances of this case. See generally section II.A, supra.\n[25] Not only are the Domestic Producers off the mark as a matter of law, but\u0097in addition \u0097their \"opt out\" argument has no sound factual predicate. The Domestic Producers apparently assume that Commerce's forthcoming remand results will reflect an increase in the value of raw garlic bulb over the value used to calculate the Final Results. As discussed in section II.A, however, the remand results have not yet issued. When they are released, the remand results may or may not reflect an increase in the value of raw garlic bulb. And, even more to the point, whatever the remand results say, there is no way to predict at this time whether or not those remand results ultimately will not be sustained by the Court.\n[26] See Consent Motion to Suspend Deadline to File Remand Results (explaining Government's position that Commerce here is not required \"to conduct remand proceedings and make calculations with respect to the three non-participating plaintiffs\").\n[27] As with Harmoni (see n. 16, supra), the Domestic Producers query why Jining Trans High Trading Co., Ltd. and Shanghai LJ International Trading Co., Ltd. were plaintiffs in this action in the first place, given that Commerce calculated margins of 0.00% for both companies in the Final Results. See Def.-Ints.' Opposition at 3, 6 & n. 1.\n[28] As outlined in section I above, the statutorily-prescribed course of action was for the Domestic Producers to maintain their own action as Plaintiffs challenging the dumping margins calculated by Commerce in the Final Results as too low. The Domestic Producers were entitled to maintain such an action against Commerce, contesting the Final Results as to any or all of the Chinese producers/exporters which were respondents in the agency proceeding; and the Domestic Producers' ability to obtain relief would have been unaffected by the presence or absence of the Chinese producers/exporters as participants (Defendant-Intervenors) in that action. As discussed above, however, the Domestic Producers voluntarily dismissed their own action.\n\nHaving voluntarily abandoned the vehicle established by the statute for the vindication of their interests in challenging dumping margins as too low, the Domestic Producers cannot now subvert the statutory scheme by forcing the Withdrawing Plaintiffs to maintain this action in order to serve the Domestic Producers' interests.\n"} -{"text": " FOR PUBLICATION\n\n UNITED STATES COURT OF APPEALS\n FOR THE NINTH CIRCUIT\n\n\nLEONARD AVILA, No. 12-55931\n Plaintiff-Appellee,\n D.C. No.\n v. 2:11-cv-01326-\n SJO-FMO\nLOS ANGELES POLICE DEPARTMENT,\n Defendant,\n\n and\n\nCITY OF LOS ANGELES; COMMANDER\nSTUART MAISLIN,\n Defendants-Appellants.\n\n\n\nLEONARD AVILA, No. 12-56554\n Plaintiff-Appellee,\n D.C. No.\n v. 2:11-cv-01326-\n SJO-FMO\nLOS ANGELES POLICE DEPARTMENT,\n Defendant,\n OPINION\n and\n\nCITY OF LOS ANGELES,\n Defendant-Appellant.\n\f2 AVILA V. LAPD\n\n Appeal from the United States District Court\n for the Central District of California\n S. James Otero, District Judge, Presiding\n\n Argued and Submitted\n February 6, 2014\u2014Pasadena, California\n\n Filed July 10, 2014\n\n Before: Barry G. Silverman and Andrew D. Hurwitz,\n Circuit Judges, and C. Roger Vinson, Senior District\n Judge.*\n\n Opinion by Judge Hurwitz;\n Dissent by Judge Vinson\n\n\n SUMMARY**\n\n\n Labor Law\n\n The panel affirmed the district court\u2019s judgment, after a\njury trial, in favor of a police officer who claimed that the Los\nAngeles Police Department fired him in retaliation for\ntestifying in a Fair Labor Standards Act lawsuit brought by a\nfellow officer.\n\n\n\n *\n The Honorable C. Roger Vinson, Senior District Judge for the U.S.\nDistrict Court for the Northern District of Florida, sitting by designation.\n **\n This summary constitutes no part of the opinion of the court. It has\nbeen prepared by court staff for the convenience of the reader.\n\f AVILA V. LAPD 3\n\n The panel held that the officer\u2019s FLSA retaliation claim\nwas not precluded by the LAPD Board of Rights\u2019\nrecommendation that he be terminated for insubordination in\nnot claiming overtime.\n\n The officer alleged that the real reason he was fired was\nnot because he worked through lunch without requesting\novertime, but rather because he testified in the prior lawsuit.\nThe panel held that the district court did not err in declining\nto give two special jury instructions, and special verdict\nquestions tied to those instructions, stating that an employee\nwho engages in protected activity is not insulated from\nadverse action for violating workplace rules. The panel held\nthat to the extent that the City of Los Angeles was urging that\nit would have reached the same decision on terminating the\nofficer in the absence of his testimony in the prior lawsuit, the\ndistrict court was well within its discretion in refusing to give\nthe instructions because the evidence did not support the\nsame decision defense, nor did it support the City\u2019s argument\nthat the firing was based on the content of the officer\u2019s\ntestimony, and not on the mere fact that he had testified.\nBecause the City did not raise the issues in its briefs, the\npanel declined to address whether the district court erred in\nrefusing to give a \u201csame decision\u201d instruction and an\ninstruction that the officer was required to prove that his\ntestimony was a \u201cmotivating factor\u201d in his termination.\n\n The panel held that the district court did not abuse its\ndiscretion in awarding attorney\u2019s fees and liquidated\ndamages.\n\n Dissenting, Judge Vinson wrote that the officer not only\ntestified in the prior case, but also admitted to insubordination\nwhen he testified. Judge Vinson wrote that the district court\n\f4 AVILA V. LAPD\n\nplainly erred in failing to give the \u201csame decision\u201d\ninstruction. He wrote that this issue was not waived because\nit was inextricably interrelated with the issue whether the\ndistrict court erred in failing to give the special instructions.\nHe also wrote that there was ample evidence to support the\nsame decision defense. Judge Vinson wrote that reversible\nerror occurred, and the case should be remanded for a new\ntrial.\n\n\n COUNSEL\n\nGregory A. Wedner (argued), Mark K. Kitabayashi, and\nSloan R. Simmons, Lozano Smith, Los Angeles, for\nDefendants-Appellants.\n\nMatthew S. McNicholas and Douglas D. Winter, McNicholas\n& McNicholas, LLP, Los Angeles, California; Stuart B. Esner\n(argued) and Andrew N. Chang, Esner, Chang & Boyer,\nPasadena, California, for Plaintiff-Appellee.\n\n\n OPINION\n\nHURWITZ, Circuit Judge:\n\n Leonard Avila, a police officer, periodically worked\nthrough his lunch break but did not claim overtime.\nAccording to his commanding officer, Avila was a model\nofficer. The Los Angeles Police Department (LAPD),\nhowever, deemed Avila insubordinate for not claiming\novertime and fired him.\n\f AVILA V. LAPD 5\n\n Not coincidentally, that termination occurred only after\nAvila had testified in a Fair Labor Standards Act (FLSA)\nlawsuit brought by fellow officer, Edward Maciel, who\nsought overtime pay for working through his lunch hours.\nAvila then brought this action, claiming that he was fired in\nretaliation for testifying, in violation of the FLSA anti-\nretaliation provision, 29 U.S.C. \u00a7 215(a)(3). The evidence at\ntrial was that the only officers disciplined for not claiming\novertime were those who testified against the LAPD in the\nMaciel suit, notwithstanding uncontested evidence that the\npractice was widespread in the LAPD.\n\n A jury returned a verdict in favor of Avila on his FLSA\nanti-retaliation claim. On appeal, the City of Los Angeles\nand the LAPD contend that the jury was not correctly\ninstructed. We find no reversible error and affirm.\n\n I\n\n In January 2008, Leonard Avila testified under subpoena\nin a FLSA suit against the City of Los Angeles in the Central\nDistrict of California brought by Maciel, who sought\novertime pay under 29 U.S.C. \u00a7 207(a)(1) for working\nthrough his lunch hour. Avila testified that he and many\nother LAPD officers, including his supervisors, operated\nunder an unwritten policy of not claiming overtime for\nworking through lunch. After Avila testified, the LAPD filed\nan internal investigation complaint against him and another\nofficer who testified at the Maciel trial, Richard Romney,\nalleging that they had been insubordinate by not submitting\nrequests for overtime.\n\n The officers were ordered to appear before the LAPD\nBoard of Rights (BOR), a disciplinary review body. Avila\n\f6 AVILA V. LAPD\n\nwas sworn in, entered a plea of not guilty, heard opening\nstatements, but resigned during the hearing\u2019s lunch break to\naccept a job with another law enforcement agency. The BOR\nnonetheless proceeded against Avila in absentia. The board\nfound Avila guilty of insubordination and recommended\ntermination, and the Chief of Police then so ordered. Romney\nwas also fired.1\n\n Avila then sued the LAPD and the City of Los Angeles\n(collectively, the \u201cCity\u201d) in the Central District of California,\nasserting claims under the anti-retaliation provision of FLSA\n(29 U.S.C. \u00a7 215(a)(3)), 42 U.S.C. \u00a7 1983, and California\nlaw.2 The City moved for summary judgment, arguing that\nbecause Avila never sought judicial review of the BOR\ndecision, his federal claims were precluded. The district\ncourt denied the motion, but precluded Avila from\nchallenging any factual findings made by the BOR.\n\n After Avila rested at trial, the court granted the City\u2019s\nmotion for judgment as a matter of law on the state law\nclaims. The jury found in favor of Avila on his FLSA claim,\nbut against him on the \u00a7 1983 claim, and awarded damages of\n$50,000. The district court entered a judgment on the jury\nverdict, and later amended it to award Avila $50,000 in\nliquidated damages and $579,400 in attorney\u2019s fees. We have\n\n\n 1\n Officer Teresa Anderson provided similar testimony in a deposition in\nthe Maciel case; she was fired. A California state court found her\ntermination retaliatory and she was reinstated. A disciplinary complaint\nalso was initiated against Avila\u2019s supervisor, who testified that he\n\u201cprobably\u201d violated the overtime rules, but the supervisor was not\ndisciplined.\n 2\n Commander Stuart Maislin was also named as a defendant. Avila has\nnot appealed the judgment that was entered below in Maislin\u2019s favor.\n\f AVILA V. LAPD 7\n\njurisdiction over the City\u2019s appeal under 28 U.S.C. \u00a7 1291\nand affirm.\n\n II\n\n The City first contends that the BOR recommendation\nthat Avila\u2019s employment be terminated precludes his FLSA\nretaliation claim. We review the district court\u2019s rejection of\nthat argument de novo. Frank v. United Airlines, Inc.,\n216 F.3d 845, 849\u201350 (9th Cir. 2000).\n\n A state agency determination is entitled to preclusive\neffect if three requirements are satisfied: \u201c(1) that the\nadministrative agency act in a judicial capacity, (2) that the\nagency resolve disputed issues of fact properly before it, and\n(3) that the parties have an adequate opportunity to litigate.\u201d\nMiller v. Cnty. of Santa Cruz, 39 F.3d 1030, 1033 (9th Cir.\n1994) (citing United States v. Utah Constr. & Mining Co.,\n384 U.S. 394, 422 (1966)). We give state administrative\nagency judgments the same preclusive effect they receive in\nstate court. Univ. of Tenn. v. Elliot, 478 U.S. 788, 799\n(1986).\n\n The dispositive question is whether the BOR actually\ndecided whether Avila was fired in retaliation for testifying\nin the Maciel action. The City relies heavily on White v. City\nof Pasadena, 671 F.3d 918 (9th Cir. 2012), in urging issue\npreclusion. The plaintiff in White was a police officer who\nchallenged her termination in a grievance proceeding. Id. at\n922. At an administrative hearing before an arbiter, White\npresented \u201cevidence that the City\u2019s investigation and her\ntermination were in retaliation\u201d for a lawsuit she had filed\nagainst the City. Id. at 924. The arbiter found that the City\nhad not demonstrated just cause for termination, but also\n\f8 AVILA V. LAPD\n\nfound that White had not shown that she was a victim of\nretaliation. Id. After an independent review of the record, the\nCity Manager upheld the termination, specifically rejecting\nWhite\u2019s retaliation claims. Id. White\u2019s subsequent civil\nrights action against the City again raised the retaliation\nclaim. Id. at 925. The district court dismissed the claim, and\nwe affirmed, finding the administrative determination issue\npreclusive. Id. at 930\u201331.\n\n This case is quite different. Here, neither the BOR\ndecision nor the termination order addressed the issue of\nretaliation. The administrative proceedings simply found\nAvila guilty of the one count in the complaint: \u201cPrior to 2008,\nyou, while on duty, were insubordinate to the department\nwhen you failed to submit requests for compensation for\novertime that you had worked, as directed through\ndepartment publications.\u201d The district court thus properly\nconcluded that the agency had not determined the motive for\nthe disciplinary action. See L.A. Police Protective League v.\nGates, 995 F.2d 1469, 1474\u201375 (9th Cir. 1993) (holding that\na BOR determination \u201ccould not have preclusive effect on the\ndifferent issue the jury faced\u201d). There is no issue preclusion.\n\n III\n\n Avila claimed that the real reason he was fired was not\nbecause he worked through lunch without requesting\novertime, but rather because he testified in the Maciel\nlawsuit. The City does not dispute that if Avila\u2019s claim is\ntrue, the termination violated FLSA, which makes it\n\u201cunlawful for any person . . . to discharge or in any other\nmanner discriminate against any employee because such\nemployee . . . has testified . . . in any [FLSA] proceeding\n. . . .\u201d 29 U.S.C. \u00a7 215(a)(3). Nor does the City contend that\n\f AVILA V. LAPD 9\n\nthe evidence below was insufficient to support the jury\nverdict. Rather, the City\u2019s only argument on appeal is that\nthe jury was not properly instructed.\n\n A.\n\n It is important to note at the outset precisely what issues\nare and are not before this court with respect to the jury\ninstructions. The City requested an instruction that Avila was\nrequired to prove that his testifying at the Maciel trial was a\n\u201cmotivating factor\u201d in his termination. In contrast, Avila had\nrequested an instruction that he was required to prove that his\ntestifying was the \u201cbut-for cause\u201d of the termination. The\ndistrict court gave the City\u2019s requested instruction, which was\nconsistent with Ninth Circuit law. See Knickerbocker v. City\nof Stockton, 81 F.3d 907, 911 (9th Cir. 1996) (requiring that\nretaliation be a \u201csubstantial factor\u201d in adverse action). The\nCity does not argue on appeal that the district court erred in\ngiving the \u201cmotivating factor\u201d instruction. See United States\nv. Guthrie, 931 F.2d 564, 567 (9th Cir. 1991) (discussing\ninvited error).3\n\n The City did request an instruction that there was no\nliability under the FLSA anti-retaliation provision if the\n\u201csame decision\u201d would have been made had Avila not\n\n\n 3\n While this appeal was pending, the Supreme Court held that a \u201cbut-for\u201d\ninstruction is required when the plaintiff makes \u201ca retaliation claim under\n\u00a7 2000e\u20133(a),\u201d the Title VII anti-retaliation provision. Univ. of Tex. S.W.\nMed. Ctr. v. Nassar, 133 S. Ct. 2517, 2534 (2013). Given the City\u2019s\nfailure to raise the issue, we do not today address whether a \u201cbut-for\u201d\ninstruction is now also required in FLSA retaliation cases. But see\nLambert v. Ackerley, 180 F.3d 997, 1005 (9th Cir. 1999) (en banc)\n(rejecting the argument \u201cthat the breadth of Title VII\u2019s anti-retaliation\nprovision dictates the construction we should give the FLSA provision\u201d).\n\f10 AVILA V. LAPD\n\ntestified. Originally, developed in Title VII cases, the same\ndecision affirmative defense shields an employer from\nliability when an adverse action is based both on protected\nand unprotected activities; the employer has the burden of\n\u201cproving that it would have made the same decision in the\nabsence of\u201d the protected activity. Price Waterhouse v.\nHopkins, 490 U.S. 228, 254 (1989); see also Knickerbocker,\n81 F.3d at 911.\n\n But, the City\u2019s briefs on appeal do not assign as error the\ndistrict court\u2019s refusal to give the \u201csame decision\u201d instruction.\nArguments \u201cnot raised clearly and distinctly in the opening\nbrief\u201d are waived. McKay v. Ingleson, 558 F.3d 888, 891 n.5\n(9th Cir. 2009).\n\n Indeed, even if, like our dissenting colleague, we were to\ntake up the issue sua sponte, the result would be the same.\n\u201cThere must be a sufficient evidentiary foundation to support\ngiving the instruction.\u201d Gantt v. City of L.A., 717 F.3d 702,\n706\u201307 (9th Cir. 2013). The uncontested evidence in this\ncase is that Avila would not have been fired had he not\ntestified. Indeed, an LAPD official confirmed at trial that the\nonly officers disciplined for the overtime violations were\nthose who testified in the Maciel action, and that Avila would\nnever have been disciplined had he not testified. The City\u2019s\ncounsel also candidly conceded this at oral argument. And,\nthe only evidence introduced at the disciplinary hearing was\nAvila\u2019s testimony in the Maciel matter. There thus was\nsimply no evidentiary foundation for a same decision\ninstruction. See Lambert v. Ackerley, 180 F.3d 997, 1009\n(9th Cir. 1999) (en banc) (holding a district court\u2019s failure to\ngive a same decision instruction harmless because \u201cthe\nevidence before the jury strongly support[ed] the conclusion\nthat the plaintiffs were discharged in retaliation for their\n\f AVILA V. LAPD 11\n\novertime complaints and that they would not have been\ndischarged had they not engaged in this protected conduct\u201d).\n\n B.\n\n The only issue on the merits actually raised by the City is\nwhether the district court committed reversible error in\ndeclining to give the jury two requested special instructions\nand to submit several proposed special verdict questions tied\nto those instructions.\n\n The proposed instructions were:\n\n 1. An employee who engages in protected\n activity is not insulated from adverse action\n for violating workplace rules, and an\n employer\u2019s belief that the employee\n committed misconduct is a legitimate, non-\n discriminatory reason for adverse action.\n\n 2. An employer is forbidden to discriminate\n or retaliate against an employee who\n participates in an activity deemed to be\n protected under federal or state law. But\n participation doesn\u2019t insulate an employee\n from being discharged for conduct that, if it\n occurred outside the protected activity, would\n warrant termination.4\n\n The proposed special verdict questions were, as relevant\nto this appeal:\n\n 4\n The City requested a third special instruction, but does not contend on\nappeal that the district court erred by failing to give it.\n\f12 AVILA V. LAPD\n\n 2. Was the City of Los Angeles\u2019s decision to\n discharge Leonard Avila based upon his\n engaging in a protected activity under the\n FLSA, or admitting misconduct, or both?\n\n ...\n\n If your answer to question 2 is engaging in\n protected activity, then answer question 3. . . .\n If your answer is both engaging in protected\n activity and admitting misconduct, go to\n question 4.\n\n 3. Was the Defendants\u2019 conduct a substantial\n factor in causing harm to Leonard Avila?\n\n ...\n\n 4. Has the Defendant proved, by a\n preponderance of the evidence that the\n Defendant would have made the same\n decision to discharge Plaintiff even if\n Plaintiff\u2019s protected activity had played no\n role in the Defendant\u2019s decision to?\n\n After declining the proposed instructions, the district\ncourt read the following stipulation to the jury:\n\n On January 16th, 2008, Plaintiff Avila\n appeared in federal court pursuant to a\n subpoena and gave sworn testimony at the\n jury trial in the Maciel case. The giving of\n this testimony is protected activity under the\n Fair Labor Standards Act.\n\f AVILA V. LAPD 13\n\nThe district court then instructed the jury as follows:\n\n The plaintiff seeks damages against defendant\n L.A.P.D. for retaliation under the FLSA. The\n plaintiff has the burden of proving each of the\n following elements by a preponderance of the\n evidence:\n\n 1. Plaintiff engaged in or was engaging in an\n activity protected under federal law, that is he\n testified in a FLSA action.\n\n 2. The employer subjected plaintiff to an\n adverse employment action.\n\n 3. The protected activity was a motivating\n reason for the adverse employment action.\n\n If the plaintiff has proven all three of these\n elements, the plaintiff is entitled to your\n verdict. However, if the defendant has proven\n by a preponderance of the evidence that the\n plaintiff\u2019s participation in a protected activity\n played no role in any of the adverse\n employment decisions, the defendant is\n entitled to your verdict.\n\nThe City did not object to these instructions.\n\n After the jury asked a question about protected activity,\nthe City renewed its requests for the supplemental\ninstructions and the special verdicts. The district court told\nthe jury to rely on its original instructions. The verdict in\nfavor of Avila on the FLSA claim followed.\n\f14 AVILA V. LAPD\n\n C.\n\n The City requested the special instructions in support of\nits argument that it had not fired Avila because he testified,\nbut rather because he failed to request overtime. The City\nalso argues that FLSA only prohibits adverse action based on\nthe fact that Avila testified at the Maciel trial, not the use of\nhis testimony.\n\n To the extent that the City is urging that it would have\nreached the same decision on terminating Avila in the\nabsence of his testimony, as we have noted above, the district\ncourt was well within its discretion in refusing to give the\nsupplemental instructions. There was no evidence to support\nthe same decision defense; the City\u2019s own witness made plain\nthat only those who testified in the Maciel suit were\ndisciplined for failing to take overtime. It simply cannot be\nargued on this record that Avila would have been fired had he\nnot testified.\n\n The City\u2019s argument that the firing was not in\ncontravention of the FLSA anti-retaliation clause because it\nwas based on the content of Avila\u2019s testimony, not on the\nmere fact that he had \u201ctestified,\u201d fails for the same reason.\nThe only evidence against Avila was his testimony in the\nFLSA action, and it was conceded that only those who\ntestified in the FLSA action were disciplined for not seeking\novertime. We leave for another day whether use of an\nemployee\u2019s trial testimony is entirely forbidden in an adverse\naction when there is also other evidence of the alleged\ninfraction before the decision maker; no such evidence was\nproffered by the City here.\n\f AVILA V. LAPD 15\n\n Nor did the district court abuse its discretion in telling the\njury, after it posed a question on protected activity, to rely on\nthe original instructions. See United States v. Romero\u2013Avila,\n210 F.3d 1017, 1024 (9th Cir. 2000); see also United States\nv. Alvarez\u2013Valenzuela, 231 F.3d 1198, 1202 (9th Cir. 2000)\n(noting that this practice avoids \u201cpossible error sometimes\nfound in trying to elaborate on a given instruction\u201d). The\nsupplemental instructions would have done more to confuse\nthan to clarify. See Dang v. Cross, 422 F.3d 800, 804 (9th\nCir. 2005) (noting that jury instructions \u201cmust not be\nmisleading\u201d) (quotation marks and citation omitted). Avila\nnever argued to the jury that his testimony insulated him from\nadverse action or that it could not be used in a disciplinary\nproceeding. Nor did he claim that he could not be fired for\nfailing to request overtime.5 Rather, Avila\u2019s claim was that\nthe true reason he was fired was because he testified against\nhis employer in a FLSA action, not because he violated the\novertime rules.\n\n Indeed, the LAPD\u2019s representative at the BOR hearing\nconceded that Avila had been investigated only because he\ntestified at the Maciel trial, testifying that the\n\n investigation was conducted as a result of\n sworn testimony given by [Avila and\n Romney] during a civil trial surrounding\n allegations of a violation of [FLSA] . . . .\n Commander [Maslin] was provided transcripts\n of the testimony given by seven officers\n during that court case . . . . After having\n\n\n 5\n Because of the district court\u2019s decision that the BOR determination had\nlimited preclusive effect, Avila could not contest that not seeking overtime\nwas a firing offense.\n\f16 AVILA V. LAPD\n\n reviewed the transcripts and after due\n consideration, Commander Maslin elected to\n initiate a personnel complaint against Officer\n Avila and Officer Romney.\n\nMore tellingly, Commander Maslin admitted that despite\nuncontested evidence that thousands of officers, including\nAvila\u2019s superiors, routinely did not claim overtime for lunch,\nthe only officers singled out for discipline were those who\ntestified at the Maciel action.6 Nor was there any claim that\nAvila was disciplined for anything else. When Avila\nresigned, his commanding officer wrote that \u201cOfficer Avila\nwas a stellar employee and an individual of personal integrity\nand honor. He performed his duties well, got along well with\nhis co-workers, and was respected by his peers. This\nDepartment is losing a valuably trained asset.\u201d\n\n In short, as this case was tried, the issue for jury\nresolution was not whether the LAPD could fire Avila for not\nclaiming overtime or whether his trial testimony could be\nused in the administrative hearing. Rather, the only issue was\nwhether the reason given by the LAPD for the termination\nwas a pretext. That is precisely what the FLSA anti-\nretaliation provision forbids. See 29 U.S.C. \u00a7 215(a)(3)\n(making it unlawful to discharge an employee \u201cbecause such\nemployee . . . has testified\u201d in a FLSA action); see also\nKasten v. Saint-Gobain Performance Plastics Corp., 131 S.\nCt. 1325, 1333 (2011) (holding that the anti-retaliation\nprovision makes FLSA\u2019s \u201cenforcement scheme effective by\n\n\n 6\n In addition to the Maciel action, there were at least four other FLSA\nactions filed against the LAPD alleging similar overtime violations. One\nof the cases was brought as a collection action, in which 2,300 to 2,500\nofficers, sergeants, detectives, and lieutenants joined.\n\f AVILA V. LAPD 17\n\npreventing \u2018fear of economic retaliation\u2019 from inducing\nworkers \u2018quietly to accept substandard conditions\u2019\u201d) (quoting\nMitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 292\n(1960)). \u201c[T]he First Amendment similarly protects a public\nemployee who provided truthful sworn testimony, compelled\nby subpoena, outside the course of his ordinary job\nresponsibilities.\u201d Lane v. Franks, No. 13-483, \u2014S. Ct.\u2014,\n2014 WL 2765285 (U.S. June 19, 2014).\n\n Put differently, the only issue for the jury in this case was\nwhether the City was telling the truth in claiming that it fired\na model employee (who was hired by another police force\neven as the termination action was pending),7 for not seeking\nall the pay that he might have. The district court did not\nabuse its discretion in declining to give the requested\nsupplemental instructions. See Yan Fang Du v. Allstate Ins.\nCo., 697 F.3d 753, 757 (9th Cir. 2012) (\u201cWhether there is\nsufficient evidence to support an instruction is reviewed for\nabuse of discretion.\u201d); Hunter v. Cnty. of Sacramento,\n652 F.3d 1225, 1232 (9th Cir. 2011) (noting that we review\nformulation of instructions for abuse of discretion).\n\n\n\n\n 7\n Avila\u2019s resignation did not moot his retaliation claim because the BOR\nproceeded against Avila in absentia.\n\f18 AVILA V. LAPD\n\n IV\n\n The City also contends that the district court abused its\ndiscretion in awarding attorney\u2019s fees and liquated damages.8\nWe disagree.\n\n A.\n\n FLSA authorizes an award of reasonable attorney\u2019s fees\nto a prevailing plaintiff in anti-retaliation suits. 29 U.S.C.\n\u00a7 216(b). We review fee awards for abuse of discretion.\nMendez v. Cnty. of San Bernardino, 540 F.3d 1109, 1124 (9th\nCir. 2008). The City does not contest that Avila was the\nsuccessful party, rather it contends that the award was too\nlarge.\n\n Avila originally requested $748,522.50 in fees. The\ndistrict court, in a thorough order, instead awarded $579,400.\nThe court reduced the lead counsel\u2019s requested rate,\neliminated administrative, clerical, and unproductive hours,\nand deducted 30% of the time with vague billing descriptions.\nThe district court also granted the City a 10% reduction in the\noverall amount of the fees requested to account for time\n\u201cexpended on the failed claims,\u201d notwithstanding that these\nclaims were \u201cbased upon the same core set of facts and\ngenerally related legal theories\u201d as the successful claim.\nGiven the district court\u2019s careful explanations of its reasons\nfor the award, we find no abuse of discretion.\n\n\n\n 8\n After the City filed its notice of appeal, the district court awarded trial\npreparation costs to Avila. Because the City never filed an amended or\nseparate notice of appeal, we lack jurisdiction to review that award.\nWhitaker v. Garcetti, 486 F.3d 572, 585 (9th Cir. 2007).\n\f AVILA V. LAPD 19\n\n B.\n\n FLSA also allows a successful plaintiff in an anti-\nretaliation suit to recover liquidated damages. 29 U.S.C.\n\u00a7 216(b). We review such awards for abuse of discretion.\nEEOC v. First Citizens Bank of Billings, 758 F.2d 397, 402\n(9th Cir. 1985).\n\n The district court awarded liquidated damages because\nthey \u201cwould work to compensate [Avila] for a delay in\npayment of wages owed and also provide an incentive for\nfuture employees to report wage and hour violations by their\nemployers.\u201d The City contends that the latter part of the\ncourt\u2019s statement shows that the liquidated damages award\nwas improperly punitive. The trial judge, however, plainly\nindicated a compensatory purpose, and liquidated damages\nare not rendered punitive merely because they also have an\nincidental deterrent effect. See Brooklyn Sav. Bank v. O\u2019Neil,\n324 U.S. 697, 709\u201310 (1945) (noting that Congress \u201cplainly\nintended\u201d section 16(b) to have a \u201cdeterrent effect\u201d).\n\n V\n\n For the reasons stated above, we AFFIRM the district\ncourt\u2019s judgment.\n\f20 AVILA V. LAPD\n\nVINSON, District Judge, dissenting:\n\n This is a very troubling case that raises a number of\nsignificant legal issues. I will limit the focus of my dissent,\nhowever, to what I believe is the most serious and manifest\nerror: the jury instructions.\n\n This is also a very important case, for retaliation claims\nbased on federal statutes are increasingly a major part of\nemployment litigation in federal courts. Recent cases from\nthe Supreme Court of the United States, see note 3 infra, have\nhighlighted new interpretations of the causation standard in\nsome of these cases. All parties who deal with those laws,\nincluding employers and employees, their attorneys, district\njudges, and trial juries, need more clarification and certainty\nin this area. Unfortunately, the majority\u2019s opinion does not\nprovide that.\n\n I\n\n Before turning to the jury instructions, it might be helpful\nto briefly discuss the nature of the testimony at issue in this\ncase. The majority repeatedly states that Avila and two fellow\nofficers, Romney and Anderson, were disciplined only after\nthey testified in the Maciel litigation. See, e.g., Maj. Op. at 5\n(\u201c[The] termination occurred only after Avila had testified in\n[the Maciel suit.]\u201d); accord id. at 5 (\u201cThe evidence at trial\nwas that the only officers disciplined . . . were those who\ntestified against the LAPD in the Maciel suit[.]\u201d). Although\ntechnically true, the substance of their Maciel testimony is\ncritical, as Avila, Romney, and Anderson were also the only\nofficers who had openly admitted to insubordination while\nthey testified. Specifically, they admitted that for several\nyears they failed to report overtime \u2014 and failed to report\n\f AVILA V. LAPD 21\n\nsupervisors who allegedly told them to do so \u2014 even though\nthey knew it was \u201cserious misconduct\u201d for which they could\nbe fired. Accordingly, when the majority says \u201cthe only\nofficers singled out for discipline were those who testified at\nthe Maciel action\u201d, id. at 16, it is more complete and factually\naccurate to say that \u201cthe only officers singled out for\ndiscipline were those who testified at the Maciel action and\nwho admitted under oath that for years they knowingly and\nrepeatedly violated policies that they were specifically told\nwould subject them to termination.\u201d It is important to keep in\nmind that Avila, Romney, and Anderson did more than\n\u201ctestify\u201d in the Maciel case.1\n\n To the extent that the majority appears to believe that\nsomeone who testifies in an otherwise protected hearing is,\nipso facto, immunized from the consequences of any self-\nincriminating admissions made during his testimony, I\ndisagree. There is a clear and legally recognized distinction\nbetween the mere act of testifying on one hand and, on the\nother hand, making admissions while testifying that provide\nindependent grounds for discipline. See Merritt v. Dillard\nPaper Co., 120 F.3d 1181, 1188\u201391 (11th Cir. 1997)\n(concluding that an employee who testified in a protected\nTitle VII case and admitted sexual harassment could be fired\nand that in \u201cvirtually every\u201d such case the employer would be\nentitled to summary judgment, absent direct evidence of\nretaliation or pretext); cf. Lane v. Franks, \u2014 S. Ct. \u2014, 2014\n\n 1\n To be clear, I am not suggesting that a jury necessarily must have\nbelieved that Avila was disciplined for his admitted insubordination. He\ncould argue based on the evidence (and he did argue) that the LAPD\ninternal investigation and BOR proceedings were deficient, biased,\ntargeted, and used to retaliate against him \u2014 and a properly instructed jury\nmight have agreed. The problem in this case, as will be seen shortly, is\nthat the jury here was not properly instructed.\n\f22 AVILA V. LAPD\n\nWL 2765285, at *10 n.5 (U.S. June 19, 2014) (noting in a\nFirst Amendment retaliation case: \u201cOf course . . . wrongdoing\nthat an employee admits to while testifying may be a valid\nbasis for termination or other discipline.\u201d). Although the act\nof testifying is protected, the testimony itself is not\nprivileged. This distinction is rooted in both reason and\ncommon sense.2\n\n Now to the jury instruction problem.\n\n II\n\n The FLSA makes it unlawful to take adverse action\nagainst an employee \u201cbecause such employee has . . .\ntestified\u201d in a FLSA proceeding. 29 U.S.C. \u00a7 215(a)(3). As\nthis court previously explained in the Title VII context, to\nprove a violation of such a statute, an employee may have\nevidence from which \u201cthe only reasonable conclusion a jury\ncould reach is that discriminatory animus is the sole cause for\n\n\n 2\n Perhaps this is apparent, but in reading the majority\u2019s opinion, one\ncould interpret it otherwise, when it states, inter alia: \u201cThe only evidence\nagainst Avila was his testimony in the FLSA action . . . . We leave for\nanother day whether use of an employee\u2019s trial testimony is entirely\nforbidden in an adverse action when there is also other evidence of the\nalleged infraction[.]\u201d Maj. Op. at 14. The clear implication is that use of\nan employee\u2019s testimonial admission is \u201centirely forbidden\u201d (he is\nimmune from discipline) unless there is \u201cother evidence of the alleged\ninfraction\u201d (and even then it may still be forbidden). That implication is\nnot the law, as even Avila\u2019s counsel recognized at oral argument, when he\nagreed that an officer could be disciplined if, while testifying during a\nprotected hearing, he admitted to \u201cwidespread beating of civilians.\u201d\nFurther, as noted infra, this issue was discussed at trial during argument\non the jurors\u2019 questions and everyone \u2014 Avila, the City, and the trial\njudge \u2014 agreed that there is a difference between the protected act of\ntestifying and admitting to misconduct while testifying.\n\f AVILA V. LAPD 23\n\nthe challenged employment action or that discrimination\nplayed no role at all in the employer\u2019s decisionmaking[.]\u201d See\nCosta v. Desert Palace, Inc., 299 F.3d 838, 856 (9th Cir.\n2002) (emphasis in original), aff\u2019d 539 U.S. 90, 123 S. Ct.\n2148 (2003). In such \u201csole cause\u201d (or \u201cpretext\u201d) cases, the\njury must be instructed \u201cto determine whether the challenged\naction was taken \u2018because of\u2019 the prohibited reason,\u201d and, if\nthe jury finds that it was, the employee prevails. Id. If, on the\nother hand, the jury determines that it \u201cplayed no role at all\u201d,\nthe employer prevails. Id.\n\n However, where there is evidence of more than one\npotential cause for the adverse action (so-called \u201cmixed\nmotive\u201d cases), a different instruction should be used. Thus,\nif the evidence at trial \u201ccould support a finding that\ndiscrimination is one of two or more reasons for the\nchallenged decision, at least one of which may be legitimate,\nthe jury should be instructed to determine first whether the\ndiscriminatory reason was \u2018a motivating factor\u2019 in the\nchallenged action.\u201d Id. at 856\u201357. If the jury answers that\nquestion in the affirmative, the employee prevails unless the\nemployer can then prove that it would have made the \u201csame\ndecision\u201d even if the impermissible factor (protected activity)\nhad not been considered. See id. at 857; accord\nKnickerbocker v. City of Stockton, 81 F.3d 907, 911 & n.2\n(9th Cir. 1996) (holding same in the FLSA retaliation\ncontext). In other words, if there is enough evidence to\nsupport it, the \u201cmixed motive\u201d jury instruction is called for,\nwhere the appropriate causation standard is only \u201ca\nmotivating factor\u201d but which must be coupled with a \u201csame\ndecision\u201d affirmative defense instruction.\n\n Before trial, Avila proposed a \u201csole cause\u201d instruction\nunder Ninth Circuit Model Instruction No. 10:3, which\n\f24 AVILA V. LAPD\n\nprovided that he would prevail on his claim if he showed:\n(1) that he engaged in protected conduct; (2) that he was\nsubjected to an adverse job action; and (3) that he was\nsubjected to that action \u201cbecause of\u201d the protected conduct.\nThe City objected to the instruction as it did not account for\nits defense that there were valid, independent, and non-\nretaliatory grounds for Avila\u2019s termination \u2014 namely, his\nadmitted insubordination \u2014 and that the LAPD \u201cwould have\nacted as it did regardless of any protected activity by\nplaintiff.\u201d The City thus requested a \u201cmixed motive\u201d jury\ninstruction with the \u201cmotivating factor\u201d causation standard,\nalong with the following \u201csame decision\u201d affirmative\ndefense:\n\n If the plaintiff has proved all three of these\n elements, the plaintiff is entitled to your\n verdict, unless the defendant has proved by a\n preponderance of the evidence that it would\n have made the same decision even if the\n plaintiff\u2019s participation in a protected activity\n had played no role in the employment\n decision. In that event, the defendant is\n entitled to your verdict, even if the plaintiff\n has met his burden of proof on all three of the\n above elements.\n\n(Emphasis added). This \u201csame decision\u201d defense instruction\nwas taken verbatim from the \u201cmixed motive\u201d alternative\ninstruction in the then-current Ninth Circuit Model\nInstruction No. 10:3.3\n\n\n 3\n This pattern instruction, which by its very title applied to Title VII\ncases, was amended last year to omit the \u201cmixed motive\u201d alternative on\nthe basis of the Supreme Court\u2019s decision in University of Texas S.W.\n\f AVILA V. LAPD 25\n\n The City also proposed the two special instructions that\nthe majority has quoted in full. See Maj. Op. at 11. The\nunderlying purpose of these instructions was to tell the jury\nof the distinction between the act of testifying, which cannot\nserve as a basis for adverse action, and admitting to\nmisconduct while testifying, which can.\n\n The trial judge rejected both special instructions, but he\nappeared to agree that the evidence supported a \u201cmixed\nmotive\u201d instruction. Yet, he ended up giving a combination\nof a portion of the \u201cmixed motive\u201d and a portion of the \u201csole\ncause\u201d instructions.4 First, he instructed the jury that Avila\nwould prevail if he proved that his testimony in Maciel was\n\n\nMed. Center v. Nassar, \u2014 U.S. \u2014, 133 S. Ct. 2517 (2013), which had\nanalyzed the statutory \u201cbecause [of]\u201d language and rejected a motivating\nfactor test in the Title VII retaliation context. In reaching this conclusion,\nthe Supreme Court relied on its decision in Gross v. FBL Financial Servs.,\n557 U.S. 167, 129 S. Ct. 2343 (2009), which interpreted similar \u201cbecause\nof\u201d statutory language and held that a mixed motive instruction was\nimproper under the Age Discrimination in Employment Act. Whether and\nto what extent Nassar and Gross may have a bearing on retaliation claims\nunder the FLSA is at this point unclear, although the FLSA uses similar\nstatutory \u201cbecause [of]\u201d language. Nevertheless, there is, to date, Ninth\nCircuit authority providing that the mixed motive/motivating factor\nanalysis is available to retaliation claims under that statute. See\nKnickerbocker, 81 F.3d at 911 & n.2. Thus, I accept that is still the law in\nthis circuit (as it was at the time of trial in this case), regardless of what\nthe Supreme Court may decide in FLSA retaliation cases in the future.\n 4\n The parties do not dispute on appeal that this was a \u201cmixed motive\u201d\ncase. The majority states that the trial judge \u201cgave the City\u2019s requested\n[mixed motive] instruction,\u201d Maj. Op. at 9, but that is not accurate. The\nCity requested the mixed motive instruction which included the\nincorporated \u201csame decision\u201d affirmative defense, as set out in the pattern\ninstruction. The judge significantly changed that instruction, as will be\nseen.\n\f26 AVILA V. LAPD\n\n\u201ca motivating factor\u201d for the challenged action, which the\ncourt defined as \u201ca reason that contributed to the decision to\ntake certain action even though other reasons also may have\ncontributed to the decision.\u201d So far, so good. However, the\njudge went astray by omitting the \u201csame decision\u201d\naffirmative defense language from this circuit\u2019s model\ninstruction and, instead, instructing the jury as follows on the\nCity\u2019s defense:\n\n [I]f the defendant has proved by a\n preponderance of the evidence that the\n plaintiff\u2019s participation in a protected activity\n played no role in any of the adverse\n employment decisions, the defendant is\n entitled to your verdict.\n\nThis instruction has nothing to do with the \u201csame decision\u201d\ndefense, and it mixes apples with oranges. It told the jury that\nAvila would prevail if he proved that his participation in the\nprotected activity was \u201ca motivating factor\u201d (i.e., a\ncontributing reason among others) for the adverse action,\nwhich could then be overcome only if the City could turn\naround and prove that the protected activity \u201cplayed no role\u201d\nat all. This illogical and internally inconsistent instruction\nwas not the same decision affirmative defense set out in the\nNinth Circuit pattern jury instructions, which the City had\nrequested.5\n\n 5\n It appears that the \u201cno role\u201d portion of the instruction was, in\nsubstance, derived from Avila\u2019s previously (and properly) rejected \u201csole\ncause\u201d instruction. See Costa, 299 F.3d at 856 (describing \u201csole cause\u201d\ncases as those in which \u201cthe only reasonable conclusion a jury could reach\nis that discriminatory animus is the sole cause for the challenged\nemployment action or that discrimination played no role at all in the\nemployer\u2019s decisionmaking\u201d) (emphasis added). In mixed motive cases\n\f AVILA V. LAPD 27\n\n On this issue, Knickerbocker is instructive. That was a\nmixed motive FLSA retaliation case in which the employee\nargued that the adverse employment action \u201cshould be\ndeemed retaliatory if the protected conduct was \u2018in any way\u2019\na part of the employer\u2019s decision\u201d, 81 F.3d at 911 n.2, which\nis merely the inverse way of arguing that the employer, to\nprevail, must demonstrate that the protected conduct \u201cplayed\nno role\u201d in the decision. This circuit rejected that argument,\nstating that it was \u201cwiser\u201d to conclude in FLSA mixed motive\ncases that the employer need only prove that, although the\nprotected conduct \u201cplayed a role,\u201d it would have done the\nsame thing even if \u201cthe proper reason alone had existed.\u201d See\nid. at 911 & n.2.6\n\n Notably, the majority opinion does not dispute that the\n\u201cno role\u201d instruction was erroneous. Instead, it appears to\n\n\nsuch as this, the employer has no burden to prove that the protected\nactivity \u201cplayed no role.\u201d See Knickerbocker, 81 F.3d at 911 & n.2. That\nlanguage is not even compatible, since in mixed motive cases it is\npresumed that the activity may have \u201cplayed a role,\u201d but the employer has\nthe opportunity to try and prove that it would have taken the same action\nanyway. See Ostad v. Oregon Health Sciences Univ., 327 F.3d 876,\n884\u201385 (9th Cir. 2003) (citing Knickerbocker and noting that in a \u201cmixed\nmotive\u201d case the employee must prove that the protected activity was a\n\u201csubstantial or motivating\u201d factor, after which \u2014 despite that it was a\nfactor \u2014 the employer will prevail if it proves that \u201cthe adverse action\nwould have occurred anyway\u201d). If employers in mixed motive cases were\nrequired to show, as here, that the protected conduct \u201cplayed no role\u201d in\nthe action, then no employer could ever prevail on its affirmative defense.\n 6\n Avila maintains in his brief that the instruction the trial judge gave was\n\u201cin substance\u201d the same as the one that the City had requested, but the two\nare actually contradictory. Requiring the City to prove for its affirmative\ndefense that it would have made the same decision even if the protected\nactivity was a motivating factor is manifestly not the same as requiring the\nCity to prove that the protected activity \u201cplayed no role.\u201d\n\f28 AVILA V. LAPD\n\nsuggest three reasons why that error does not warrant\nreversal: waiver, insufficient evidence, and harmless error.\n\n A.\n\n For its first rationale, the majority contends that the error\nhas been waived because the City did not clearly and\ndistinctly raise the issue in its opening brief. See Maj. Op.\nat 9. Although the City had requested the Ninth Circuit\u2019s\npattern \u201cmixed motive\u201d instruction \u2014 which included the\nincorporated \u201csame decision\u201d affirmative defense \u2014 it did\nnot expressly object to the \u201cno role\u201d instruction that was\ngiven.7 Rather than assign error to that instruction, the City\nhas instead argued that the court erred in not giving the two\nspecial instructions that sought to explain the pivotal\ndistinction between taking an action because an employee\ntestified, and taking an action because he admitted to\nmisconduct while testifying. There are two reasons why\nwaiver does not apply here.\n\n First, even though the City did not specifically object to\nthe instructions as they were originally given, we can review\njury instructions for plain error in civil cases. See Fed. R. Civ.\nP. 51(d)(2). Plain error is: \u201c(1) error, (2) that is plain, and\n(3) that affects substantial rights . . . . If all three conditions\nare met, an appellate court may then exercise its discretion to\nnotice a forfeited error, but only if (4) the error seriously\naffects the fairness, integrity, or public reputation of judicial\n\n\n 7\n The closest the City comes to making this argument is in its reply brief,\nwhere it points out \u2014 quite rightly \u2014 that it could not have possibly\nshown that the Maciel testimony played no role in the adverse action when\nthe City\u2019s entire defense was that the action was appropriate based on\nAvila\u2019s admission \u201cduring that testimony!\u201d (Emphasis in original).\n\f AVILA V. LAPD 29\n\nproceedings.\u201d United States v. Cotton, 535 U.S. 625, 631, 122\nS. Ct. 1781, 1785 (2002) (quotation marks, citations, and\nbrackets omitted) (emphasis added). It is apparent to me that\nthe failure to give the \u201csame decision\u201d instruction that the\nCity had requested was plain error on the facts of this case, as\nit deprived the City of its entire defense and thus seriously\naffected the fairness and integrity of the trial.\n\n To prevail on his retaliation claim, the jury was instructed\nthat Avila had to prove: (1) that he was engaged in protected\nactivity when he testified in the Maciel case; (2) that he was\nthen subjected to an adverse employment action; and (3) that\nhis Maciel testimony was a \u201cmotivating factor\u201d in the\ndecision to take that adverse action. This is a somewhat\nunique case in that all three elements \u2014 from the jury\u2019s\nperspective \u2014 were essentially indisputable. As for the first\ntwo, Avila obviously engaged in protected activity by\ntestifying in the Maciel action, after which he was obviously\nsubjected to adverse action. As for the third element, because\nthe City\u2019s entire defense was that it took the adverse action\nbased upon the misconduct that Avila admitted during his\ntestimony, the protected activity obviously \u201ccontributed to\u201d\nthe decision to take that action. The trial judge specifically\ninstructed the jury that: \u201cIf the plaintiff has proved all three\nof these elements, the plaintiff is entitled to your verdict.\u201d\nThese are the first three elements of this circuit\u2019s pattern\n\u201cmixed motive\u201d instruction \u2014 but the judge left out the same\ndecision affirmative defense, which is what the \u201cmixed\nmotive\u201d instruction is all about. Consequently, the jury was\ntold that the only way for the City to avoid liability, per the\njudge\u2019s deviation from the pattern instruction, was if it could\nsomehow prove that the trial testimony in Maciel \u201cplayed no\nrole\u201d in the action \u2014 which, of course, it could not possibly\ndo. In other words, there was no way for the City to prevail\n\f30 AVILA V. LAPD\n\nunder the instructions as given to the jury, and the outcome\nof the case was predetermined. I believe this instructional\nerror was plain.8\n\n Furthermore, even if the trial judge\u2019s failure to give the\n\u201csame decision\u201d instruction was not plain error, this issue was\nnot waived because that omission plus the inconsistent \u201cno\nrole\u201d instruction that was given led directly to \u2014 and\naggravated \u2014 the jury\u2019s obvious confusion, and it cannot be\nseparated from the equally meritorious special instructions\nargument that the City has advanced on appeal. As will be\nseen, the two arguments are inextricably interrelated.\n\n During their first full day of deliberations, the jurors (who\nhad deliberated only part of the day before) sent out a note\nasking the following three questions:\n\n\n 8\n The majority says \u201cthe only issue [for the jury to resolve] was whether\nthe reason given by the LAPD for the termination was a pretext.\u201d See Maj.\nOp. at 16 (emphasis added). But, this action was tried as a mixed motive\ncase, not as a sole cause case, so pretext was not an issue at trial. In\nStegall v. Citadel Broadcasting Co., 350 F.3d 1061 (9th Cir. 2003), this\ncourt discussed the differences between the two types of cases and noted\n\u201cit does not make sense to ask if the employer\u2019s stated reason for\nterminating an employee is a pretext for retaliation\u201d in a mixed motive\ncase; rather, in such cases the first issue is whether the protected activity\nwas a motivating factor in the adverse action, and the second issue is\nwhether the employer would have made the same decision anyway. See\nid. at 1067\u201368. As for the first issue, as noted, Avila\u2019s trial testimony in\nMaciel clearly \u201ccontributed to\u201d the adverse job action, and, therefore, it\nwas a \u201cmotivating factor\u201d in the decision to take the action. As for the\nsecond issue, the majority opinion makes no attempt to explain how the\njury could have possibly resolved that question in favor of the City in light\nof the instruction that it was given. It couldn\u2019t. The law that the jury was\ntold to follow was wrong \u2014 pure and simple \u2014 and as a result the City\nwas denied its entire defense, which was plain error.\n\f AVILA V. LAPD 31\n\n Is testimony given at an FLSA action\n protected? Then, can that testimony be used as\n evidence in a trial? Is the physical act of\n testifying the protected activity under FLSA,\n or is the testimony protected or both?\n\nBoth counsel and the trial judge agreed that the answer to the\nfirst two questions was \u201cyes,\u201d but there was disagreement as\nto the third. Avila\u2019s lawyer suggested at the time that the act\nof testifying and the testimony itself were both protected, but\nthe City\u2019s lawyer believed that was legally incorrect because,\n\u201cobviously, there\u2019s examples, if you admitted committing a\nhomicide in an FLSA proceeding, I don\u2019t think anybody\nwould argue that would be protected activity.\u201d Although the\njudge could have easily answered the third question, he\nultimately decided (with both counsel agreeing) to respond by\nsimply re-reading a previous stipulation reflecting that Avila\nhad testified in the Maciel action and that \u201c[t]he giving of this\ntestimony is protected activity under the [FLSA].\u201d\n\n The jury continued to deliberate the rest of that day. Still\nconfused on the third day, however, it sent out a second series\nof questions:\n\n If testimony given in an FLSA proceeding is\n protected, is it legal to use that testimony\n against the person testifying? If it is legal to\n use that testimony against the person\n testifying, then, how is that testimony\n protected?\n\nThe trial judge\u2019s following summary of these questions as he\nbegan his discussion with counsel accurately describes the\njury\u2019s dilemma:\n\f32 AVILA V. LAPD\n\n My sense is that the jury is caught in a\n circular reasoning process. It would appear\n that the jury should be told that a person can\n testify in an FLSA proceeding, that the\n testimony is protected, that in this case the\n LAPD could not terminate the plaintiff . . . for\n testimony \u2014 the fact that he testified in the\n FLSA proceeding.\n\n The follow-up is that they could terminate\n him if the department concluded that he made\n an admission in that testimony that provided\n separate but good cause to terminate him.\n\n So, they can\u2019t terminate him for testifying, but\n they can terminate him if he made an\n admission that provided separate grounds for\n termination that arose to good cause.\n\nAvila\u2019s counsel replied that he \u201cgenerally agree[d] with what\nthe court is trying to communicate.\u201d However, he maintained\nthat it was \u201cmore precisely stated\u201d in the (erroneous)\n\u201cmotivating factor/no role\u201d instruction that had already been\ngiven to the jury. After quoting from that instruction, Avila\u2019s\nattorney stated as follows:\n\n So, in order for the jury to say in this case\n under the law that there is not a motivating\n reason, they must be able to affirmatively say\n the defendant has proved by a preponderance\n of the evidence that plaintiff\u2019s testimony in\n Maciel played no role in any of the adverse\n employment decisions.\n\f AVILA V. LAPD 33\n\n Because what is incumbent upon the defense\n to show is it\u2019s not a motivating reason. And\n the flip side of a motivating reason \u2014 or\n should I say the inverse of a motivating reason\n is that the protected activity played no role,\n which is covered in the jury instruction that\n the court has given.\n\n(Emphasis added).9 Defense counsel responded by agreeing\nwith what the trial judge had said at the beginning of the\ndiscussion, i.e., that there is \u201ca distinction between the act of\ntestifying . . . versus the content of the testimony[.]\u201d He then\nreminded the court: \u201cWe proposed two special instructions\nthat directly address this pivotal issue. Those instructions\nwere rejected by the court. Let me reoffer them for the court\nto consider because it does seem since the jury has the\n[\u201cmotivating factor/no role\u201d instruction] they\u2019re struggling\nwith it.\u201d The judge once again rejected the two special\ninstructions and (over the City\u2019s objection) decided to re-read\nthe erroneous instruction to the jury because, he said, \u201cthis is\ngetting way too complicated.\u201d After the judge announced\nwhat he planned to do, the City made one last attempt and\nrequested, in the alternative, that the judge at least give the\njury \u201cthe explanation that you provided to counsel when you\ncame on to the bench, the distinction between the giving of\ntestimony and the use and contents of the testimony.\u201d The\ncourt replied \u201cthat will not be done at this time.\u201d\n\n\n\n 9\n Once again, this is incorrect. The \u201cflip side\u201d or \u201cinverse\u201d of a\nmotivating factor is not that the protected conduct \u201cplayed no role\u201d in the\nadverse job action. Instead, in mixed motive cases, the employer need\nonly show it would have made the \u201csame decision\u201d regardless of the role\nthat the protected activity did play. See supra note 5.\n\f34 AVILA V. LAPD\n\n The trial judge thus not only failed to correct the\nerroneous instruction \u2014 by giving \u201cspecial instructions\u201d that\ncould have freed the clearly struggling jury from the \u201ccircular\nreasoning process\u201d that he himself believed it was \u201ccaught in\u201d\n\u2014 but he actually repeated and compounded the original\nerror by just re-reading the same erroneous instruction. This\nsequence shows the inseparable overlap between the original\ninstructional error regarding the lack of a proper \u201csame\ndecision\u201d defense (which has not been directly raised on\nappeal) and the court\u2019s response to the jury questions and\nrefusal to give the special clarifying instructions (which has\nbeen).\n\n In sum, Avila obviously engaged in protected activity\nwhen he testified in Maciel, but it is also obvious that he\nadmitted to \u201cserious misconduct\u201d during his testimony, which\nprovided a legitimate basis for discipline. Prior to trial, the\nCity requested special instructions to address that issue, but\nthey were rejected. After the jury was inexplicably told that\nthe City could prevail only if it proved that the Maciel trial\ntestimony \u201cplayed no role,\u201d the jury was clearly (and\nunderstandably) confused about whether it could separate\nAvila\u2019s admitted misconduct as ground for discipline from\nthe protected act of testifying. To try and remedy the\nproblem, the City once again proposed \u2014 but the trial judge\nonce again rejected \u2014 special instructions that could have\ncleared up the jury\u2019s confusion on this point.\n\n The majority says that the two special instructions \u201cwould\nhave done more to confuse than to clarify\u201d, Maj. Op. at 15,\nbut it is hard to see how the jury could have possibly been\nmore confused than they already were with the instructions as\ngiven. To the extent the special instructions were themselves\nconfusingly-written, the judge could have done what the City\n\f AVILA V. LAPD 35\n\nhad requested as an alternative to giving those instructions:\njust tell the jurors as he succinctly told the lawyers:\u201cthey\ncan\u2019t terminate him for testifying, but they can terminate him\nif he made an admission that provided separate grounds for\ntermination that arose to good cause.\u201d That simple and\nuncomplicated clarifying statement would not have confused\nthe jury and would have provided the answer to the problem\nthat had been created by the erroneous instruction.\n\n As it was, however, the trial judge twice instructed the\njury that the City, to prove its defense, must show that Avila\u2019s\ntestimony in Maciel \u201cplayed no role\u201d in the challenged action,\nwhich was legally incorrect. Thus, once Avila quite easily\nmet his threshold case, the City did not have the opportunity\nfor the jury to even consider its defense: that it took the action\nbecause of the admitted misconduct, and not for the mere act\nof testifying. I believe this was not only plain error, but it was\nso closely related to the persuasive special instructions\nargument that the City has raised that the issue has clearly not\nbeen waived.\n\n B.\n\n The majority next maintains that, even if the error had not\nbeen waived, the result would not change as there was\nliterally \u201cno evidence\u201d to warrant the \u201csame decision\u201d jury\ninstruction. See Maj. Op. at 14, 10 (emphasis in original).\nWith this assertion (and other similar representations), the\nmajority appears to suggest that the evidence at trial was so\nindicative of retaliation that the City basically had no\ndefense.10 A close and careful review of the full trial record\n\n\n 10\n The majority states, for example, that \u201c[t]he uncontested evidence in\n\f36 AVILA V. LAPD\n\nreveals that there was ample evidence to support the same\ndecision defense, as the case was much closer than the\nmajority\u2019s opinion suggests. The following evidence was\npresented to the jury:\n\n The LAPD is a very large municipal employer with\napproximately 10,000 sworn members. At the time relevant\nhere, it was LAPD \u201cofficial\u201d policy that any officers who\nworked through their 45-minute lunch break \u2014 generally\nknown as a \u201cCode 7\u201d \u2014 should fill out an overtime slip,\nreport it on their Daily Field Activity Report (\u201cDFAR\u201d), and\nbe paid accordingly. DFARs were completed at the end of\neach shift, and if there were problems with the report as\nsubmitted, a \u201cKick-back Sergeant\u201d would return it the\nfollowing day to be corrected. Although this was the LAPD\u2019s\n\u201cofficial\u201d policy, there were allegations that some supervisors\nadhered to an \u201cunwritten policy\u201d of coercing and\ndiscouraging the officers from reporting any overtime for less\nthan one hour. There were multiple FLSA overtime cases\nfiled against the City involving this allegation, including\nsome large class actions that had thousands of class members.\nThe cases posed \u201cbig problems\u201d for the LAPD and exposed\nit to \u201chuge liability.\u201d\n\n So, in March 2003, and again in June 2005, the LAPD\nissued two policy memos expressly stating that there was no\n\u201cunwritten policy\u201d of not being paid overtime and that all\novertime hours must be properly reported or the employee\nwould be subject to termination. The officers were further\ntold that if anyone felt pressure or coercion to not report all of\n\n\nthis case is that Avila would not have been fired had he not testified.\u201d See\nMaj. Op. at 10 (emphasis added). As will be seen, that is contradicted by\nthe record, including the trial testimony of Avila himself.\n\f AVILA V. LAPD 37\n\ntheir overtime, they had the \u201caffirmative obligation\u201d to report\nthe source of that pressure or coercion, and they could do so\nanonymously and outside the regular chain of command. The\nfailure to report all overtime and the failure to report\nsupervisors who encouraged such conduct was\ninsubordination, which was considered to be \u201cserious\nmisconduct.\u201d\n\n At some point during this time, the Chief of Police and\n\u201ctop management\u201d made the determination and decision that\nthe LAPD would investigate claims of FLSA violations only\nwhere the alleged violators were specifically identified. It was\nthus incumbent on the individual making the charge(s) to\nprovide adequate information \u2014 like names, dates, and times\n\u2014 to facilitate an investigation as the LAPD had limited\nresources and could not do \u201cfishing expedition\u201d\ninvestigations of hundreds (potentially thousands) of\nunnamed officers and still function as a law enforcement\nagency. The evidence presented to the jury was that whenever\nalleged violators were specifically identified, they were\ninvestigated by Internal Affairs.\n\n Avila joined the LAPD in 1997, and he was assigned to\npatrol in the Central Division. He had the \u201cdistinct\nrecollection\u201d of having received and reviewed both the March\n2003 and June 2005 policy memos. On or about February 23,\n2007, he joined one of the ongoing lawsuits against the City\nand alleged that the LAPD had denied him overtime pay\nunder the FLSA. Roberto Alaniz v. City of Los Angeles, 2:04-\nCV-8592-GAF (doc. 637).11\n\n\n 11\n The majority twice refers to Avila as a \u201cmodel\u201d officer. See Maj. Op.\nat 4, 17. Putting aside the evidence that he had five sustained personnel\ncomplaints and was suspended four times (for a total of 18 days) for\n\f38 AVILA V. LAPD\n\n In January 2008, almost a year after he joined in the\nAlaniz lawsuit, Avila testified in the Maciel litigation. Yvette\nBass, a detective with Risk Management for the LAPD, was\nin the courtroom to observe the trial. While testifying, Avila\nadmitted under oath that for several years he and myriad\nunnamed \u201cother officers\u201d knowingly and repeatedly violated\nthe FLSA and LAPD \u201cofficial\u201d policy by not reporting\novertime when they worked through their Code 7s. He\ntestified that he did this, even though he knew it constituted\n\u201cserious misconduct,\u201d because he felt \u201cintimidated\u201d by\nsupervisors who \u201cdiscouraged\u201d him from requesting overtime\nin that situation. He never reported any of the supervisors,\nhowever, which he knew was separate misconduct. He further\ntestified that he would sometimes put missed Code 7s on his\nDFARs, but the Kick-back Sergeants would give them back\nto him the following day and order him to falsify the records.\nHe did not ever report any of the Kick-back Sergeants who\nallegedly told him to do this, and he testified that he falsified\n\n\n\n\nvarious misconduct, whether he was a good employee is irrelevant as there\nhas been no claim that he was fired for being a bad employee. Rather, he\nwas terminated only after \u2014 and allegedly because \u2014 he admitted under\noath that he committed \u201cserious misconduct.\u201d And, there is evidence from\nwhich a jury could have found that is what happened here. For example,\nnine months after he joined in the Alaniz lawsuit, Avila received a\nperformance review that said he \u201cpossesses a good work ethic\u201d and is\n\u201ccourteous and professional,\u201d \u201cdedicated,\u201d \u201cexemplary\u201d and \u201cconsistently\noutstanding.\u201d The timing of this very (and exclusively) favorable review\nwould appear to undermine the suggestion that it was his mere\nparticipation in a FLSA case against the LAPD, as opposed to his\nadmissions of \u201cserious misconduct\u201d during such case, that led to his\ntermination.\n\f AVILA V. LAPD 39\n\nDFARs \u201cover and over again\u201d, even though he knew it was\neven still more misconduct.12\n\n With his trial testimony in Maciel, Avila implicated\npotentially hundreds of unnamed supervisors and possibly\nhundreds of unnamed officers, but he provided almost\nnothing to support his claims. He readily admits that he never\nprovided any specific dates or times, and he admits that he\nprovided almost no names.13 In fact, even though he claimed\nthat it had been going on for years, he only identified two\nsupervisors who allegedly pressured him to not report\novertime: Sergeant Walker and Sergeant Miyazaki. Sergeant\nWalker died years before, but Sergeant Miyazaki was still\nwith the LAPD, and, in fact, had also testified in the Maciel\ncase. During his testimony in that litigation, Miyazaki stated\nthat he had \u201cprobably\u201d violated the overtime rules.\n\n Detective Bass reported what she observed at the Maciel\ntrial, after which an internal complaint was brought against\nboth Avila and Sergeant Miyazaki. The complaint was\nbrought against Sergeant Miyazaki for two reasons: because\nAvila specifically identified and accused him of misconduct,\nand (like Avila) \u201cbecause he might have implicated himself\nin his own testimony.\u201d During the investigation, Internal\n\n\n 12\n Since Avila had admitted to knowingly and repeatedly violating policy\nin three separate ways over many years, there was much more \u201cserious\nmisconduct\u201d at issue in this case than just an officer \u201cperiodically\nwork[ing] through his lunch break\u201d and \u201cnot seeking all the pay that he\nmight have.\u201d See Maj. Op. at 4, 17.\n 13\n Avila was not able to name a single Kick-back Sergeant, but he was\nable to provide an estimate of when they allegedly ordered him to falsify\nhis DFARs: sometime between 2004\u20132006. This did not help narrow the\nfield, however, as the Kick-back Sergeants change almost every day.\n\f40 AVILA V. LAPD\n\nAffairs asked Avila multiple times to confirm if his Maciel\ntestimony had been accurate, and he agreed that it was.\nSubsequently, the charge against him was sustained, as the\ncomplaint adjudicator determined (based on his sworn\ntestimony) that he \u201cwas clearly aware of the FLSA policies\nbut violated them anyway.\u201d The complaint against Sergeant\nMiyazaki, meanwhile, was deemed to be unfounded.14 The\nadjudicator found as follows with respect to Miyazaki:\n\n Avila\u2019s claim was self-serving. And he made\n it in court as a plaintiff in a lawsuit [Alaniz]\n against the City for uncompensated overtime.\n\n Avila admitted to being trained on FLSA-\n related policy and his right to compensation.\n\n Avila\u2019s statement was unsupported by any\n specific facts, such as, dates, notes, or\n notifications to other supervisors for what\n would have been a clear violation of policy.\n\n\n\n\n 14\n There were some notable distinctions between Miyazaki and Avila.\nAvila was unequivocal that he had knowingly committed misconduct over\nseveral years. Miyazaki testified that he \u201cprobably\u201d violated the overtime\npolicy in some manner, but it was unclear how he might have done so.\nReview of his testimony in Maciel reveals that, to the extent he admitted\nto violating the official policies, it was very different than what Avila had\nconfessed to. As supervisor, Sergeant Miyazaki had the \u201caffirmative duty\u201d\nto make reasonable efforts to be sure that his officers were taking (or\nbeing paid for working through) their Code 7s. He testified that, due to the\ndemands of being watch commander and confusion as to what his\naffirmative duty required, he might have violated the policies. But, he\nstrongly denied that he ever discouraged officers from seeking overtime,\nwhich the adjudicator accepted, as quoted in the text.\n\f AVILA V. LAPD 41\n\n While not part of the investigation, the\n adjudicator was personally aware of overtime\n granted to employees for no Code 7 on a\n regular basis by supervisors including\n Miyazaki.\n\n No Code 7 overtime makes up about 3 percent\n of Central Area\u2019s overtime expenditures. This\n fact is inconsistent with Avila\u2019s claim that\n such overtime was routinely denied.\n\nAfter the investigation, the Chief ordered Avila to a hearing\nbefore the BOR. In response, Avila filed a complaint in state\ncourt to stop the hearing from moving forward and, in\nconnection with that proceeding, he filed a sworn declaration\nin which he again: (1) admitted that for years he knowingly\nfailed to report overtime when he worked through his Code\n7s, and (2) confirmed that his Maciel testimony was accurate.\nUltimately, he lost his bid to stop the BOR from holding its\nhearing.\n\n Avila appeared at the BOR with counsel to contest the\ncharge. He decided to resign from the LAPD on the first day\nof the hearing and did not return after the lunch break.\nPursuant to BOR procedure and written direction from the\nChief, the hearing continued without him for the next three\ndays, during which his attorney fully participated, examined\nwitnesses, lodged objections, put on evidence, and presented\nhis defense. After hearing the evidence, the BOR panel\nassigned to the case (which was comprised of two LAPD\nCaptains and one civilian) found Avila guilty of \u201cserious\nmisconduct\u201d and recommended termination. He was\n\f42 AVILA V. LAPD\n\nthereafter \u201cterminated\u201d, even though he had already resigned\nand his resignation accepted.15\n\n Avila did not appeal the BOR\u2019s determination.\nImportantly, this means, as the district court had earlier held,\nthat he is \u201cbound by the factual findings of the BOR \u2014 that\nhe violated departmental policy and that such insubordination\nwas grounds for termination \u2014 and [he] cannot challenge\nthose findings[.]\u201d\n\n With the foregoing in mind, I do not agree that the City\nhad \u201cno evidence\u201d to support the \u201csame decision\u201d affirmative\ndefense. This court has said that, for the proof required to\nassert this defense, an employer need only have \u201csome\nobjective evidence\u201d that it would have taken the same action\nnotwithstanding the protected activity. See Metoyer v.\nChassman, 504 F.3d 919, 939\u201340 (9th Cir. 2007) (citation\nomitted). Because the inquiry is \u201can intensely factual one\u201d,\nmixed motive defenses \u201care generally for the jury to decide.\u201d\nId. at 940 (citation omitted).\n\n\n\n\n 15\n The majority notes that Officers Romney and Anderson testified\nadverse to the LAPD in Maciel and they, too, were sent to the BOR and\nfired. See Maj. Op. at 5\u20136 & n.1. As stated before, both officers \u2014 like\nAvila \u2014 admitted to \u201cserious misconduct\u201d under oath. Specifically,\nRomney admitted that he knowingly failed to report overtime for almost\ntwo decades (even after the 2003 and 2005 memos), while Officer\nAnderson not only admitted to misconduct in her Maciel testimony, but\nshe actually pled guilty to one of the charges against her at the BOR.\nRomney and Anderson identified supervisors who allegedly violated the\novertime policies as well. None of these supervisors admitted to the\nmisconduct (but, rather, denied wrongdoing), and they were exonerated\nfollowing internal investigations.\n\f AVILA V. LAPD 43\n\n I have included these evidentiary details from the record\nbecause the majority states \u201c[i]t simply cannot be argued on\nthis record that Avila would have been fired had he not\ntestified.\u201d See Maj. Op. at 14. In my opinion, the majority\nfails to draw the critical distinction between the act of\ntestifying and admitting to insubordination while testifying.\nThere is no legal basis for treating the testimony as\nprivileged. An employee is not entitled to full use immunity\nwhen he testifies during an otherwise protected proceeding.\nHe can testify without fear of reprisal unless he implicates\nhimself in some manner. Thus, as in this case, where there is\nevidence before the jury that an employee admitted under\npenalty of perjury that he was knowingly and repeatedly\ninsubordinate for many years, that testimony is automatically\n\u201csome objective evidence\u201d for the \u201csame decision\u201d defense.\nThis is because, in such a case, the jury could easily\ndetermine that the employer would have done the same thing\nindependent of the fact that the employee had testified (for\nexample, if the misconduct had been discovered in some\nother way). The jury would, of course, not be required to\nmake such a finding \u2014 it might find that the adverse action\nwas retaliatory \u2014 but it could, depending on all of the\nevidence in the case. Accordingly, the \u201csame decision\u201d\ndefense instruction is warranted if an employee admits to\nmisconduct while testifying.\n\n Consider the facts of this case. Avila was a very good\n(albeit not a \u201cmodel\u201d) police officer who received favorable\nperformance reviews \u2014 even after he sued the LAPD for\nallegedly violating his FLSA rights. See supra note 11. There\ndoes not appear to have been any reason for adverse action\nagainst him before he took the stand in Maciel and testified\nas he did. If the knowing and repeated \u201cserious misconduct\u201d\nthat he admitted to during his testimony is not sufficient\n\f44 AVILA V. LAPD\n\nevidence to support the same decision defense in and of itself,\nthe logic of that position would necessarily mean that he\ncould have admitted to just about anything \u2014 including\n\u201cwidespread beating of civilians\u201d \u2014 and still not have been\nfired as his record was mostly unblemished and did not\notherwise warrant discipline. To the extent that the majority\nsuggests there must be \u201cother evidence of the alleged\ninfraction\u201d separate from the admissions on the stand, see\nMaj. Op. at 14, that is simply not the law, as even Avila\u2019s\ncounsel conceded in the district court and on this appeal. See\nsupra note 2.\n\n Moreover, even if Avila\u2019s admissions on the stand could\nnot be used as the basis for the \u201csame decision\u201d instruction,\nthere was separate \u201cother evidence\u201d that would qualify. For\nexample, Avila testified in this case that he saw Detective\nBass in the courtroom before he testified in Maciel, and she\nintroduced herself and told him that she was there to watch\nthe trial for Risk Management. Very significantly, Avila has\nconceded that if he had told her exactly what he was about to\ntestify to, she would have been \u201crequired\u201d to report him, and\nhe would have \u201cexpect[ed]\u201d to be disciplined. While that pre-\ntestimony conversation with Detective Bass never took place,\nAvila confirmed the accuracy of his Maciel testimony to\ninvestigators after he testified (and before he was fired). If a\npre-testimony admission could \u2014 according to Avila himself\n\u2014 justify discipline and thus provide a foundation for a\n\u201csame decision\u201d defense, then his post-testimony\nconfirmation of those admissions should as well.\n\n Further, the majority\u2019s statement that \u201c[t]he uncontested\nevidence in this case is that Avila would not have been fired\nhad he not testified\u201d, see Maj. Op. at 10, is difficult to\nreconcile with Avila\u2019s own testimony. As just noted, he\n\f AVILA V. LAPD 45\n\nexpressly conceded that if he had said exactly what he\ntestified to in the Maciel case in any other setting then he\nwould have \u201cexpect[ed]\u201d the LAPD to discipline him. That\nconcession by itself is sufficient evidence to support the\n\u201csame decision\u201d defense instruction. Cf. Gilbrook v. City of\nWestminster, 177 F.3d 839, 855 (9th Cir. 1999) (stating \u201can\nemployee cannot use protected conduct as a shield against a\ndismissal that would have occurred even in the absence of the\nprotected conduct\u201d).\n\n In addition, the sworn declaration that Avila filed to try\nand stop the BOR hearing further affirmed that he knowingly\nviolated the LAPD\u2019s official policy by not reporting overtime\nand not reporting supervisors who allegedly told him to do so.\nThis evidence \u2014 separate and apart from his testimony in\nMaciel \u2014 provided other grounds for the \u201csame decision\u201d\ninstruction.\n\n Finally, Avila did not appeal or challenge the BOR\u2019s\nruling. Consequently, as the district court held earlier in this\ncase, and as Avila does not dispute on this appeal, he is bound\nby the BOR\u2019s factual findings, including \u201cthat he violated\ndepartmental policy and that such insubordination was\ngrounds for termination[.]\u201d This is separate and independent\n\u201cother evidence\u201d to support the \u201csame decision\u201d affirmative\ndefense.\n\n Thus, even if Avila\u2019s admitted misconduct while\ntestifying was not \u201csome objective evidence\u201d to support the\n\u201csame decision\u201d instruction all by itself (and I believe it was),\nthere was considerable other evidence at trial: his post-\ntestimony confirmation of the insubordination, his sworn\ndeclaration, the legally binding administrative factual\nfindings, and his testimony before the jury in this case that he\n\f46 AVILA V. LAPD\n\nwould have been disciplined if he had said the exact same\nthing while not testifying. Far from there being \u201cno evidence\u201d\nto support the City\u2019s affirmative defense, there was, in fact,\nample evidence from which a reasonable jury could have\nfound that the City would have made the \u201csame decision\u201d in\nthis case.\n\n C.\n\n As to whether the error here was harmless, both the\nmajority\u2019s opinion and Avila\u2019s brief rely on Lambert v.\nAckerley, 180 F.3d 997 (9th Cir. 1999) (en banc), which held\nthat the district court\u2019s failure to give a same decision\ninstruction was harmless. Harmless error analysis, of course,\n\u201crests on the particular facts\u201d of each individual case. See\nUnited States v. Frazin, 780 F.2d 1461, 1471 (9th Cir. 1986).\nWhat is harmless error in one case \u201ccould well, under a\ndifferent set of facts,\u201d not be considered harmless in another\ncase. See id. It is thus important to compare the facts of\nLambert to the facts presented here, and note the three\nsignificant ways in which the cases are very different.\n\n First, as the court recognized, the evidence in Lambert\nwas overwhelming, as it was a \u201crare\u201d mixed motive case that\nhad direct evidence of retaliation (to wit, a statement from a\nsupervisor that plaintiff would \u201cdefinitely not have a job\u201d and\nwould \u201cbe fired\u201d if she filed a FLSA claim). 180 F.3d at\n1008\u201309. The panel said that the direct evidence \u201cstrongly\nsupport[ed]\u201d its harmless error finding. See id.; accord\nMerritt, 120 F.3d at 1188\u201391 (concluding that an employee\nwho admits to misconduct while testifying in a protected\nproceeding may be terminated and the employer will be\ngranted summary judgment, unless there is \u201cdirect evidence\nof retaliatory motive\u201d). There was no direct evidence here,\n\f AVILA V. LAPD 47\n\nand there was sufficient circumstantial evidence to support a\nverdict for the City.\n\n Second, the Lambert court found it very important \u2014 and\nspent two pages discussing the fact \u2014 that the jury awarded\nthe employee $12 million in punitive damages. See id. at\n1009\u201310 (citing cases where it was held that \u201can instructional\nerror regarding liability [is] harmless in light of a punitive\ndamages award\u201d). Not only were punitive damages not\nawarded in this case, but the jury awarded Availa about 1%\nof the compensatory damages that he sought.16\n\n Third, the jurors in Lambert did not ask two sets of\nmultiple questions while deliberating into the third day (after\nhearing only three days of evidence), strongly suggesting that\nthey were confused by the instructions and having a difficult\ntime reconciling them with the evidence. Cf. Rose v. Lane,\n910 F.2d 400, 403 (7th Cir. 1990) (stating in a habeas case\nthat involved an erroneous instruction which led to follow-up\njury question: \u201cWhile this question could have a variety of\nimplications, it indicates possible jury confusion over the\nmanslaughter instructions and therefore contributes to our\nfinding that the instructions were not harmless.\u201d).17\n\n\n 16\n During closing argument, Avila\u2019s attorney had requested $230,000.00\nin economic damages and 4.5 million in non-economic damages. The jury\ngave him $50,000.00.\n 17\n Although it is always difficult to try and infer what a jury is thinking\nwith its questions, on the facts of this case, the questions are telling. The\njurors astutely asked five related questions that centered on the exact\nproblem that was created by the erroneous instruction. The last two\nquestions asked whether the LAPD could \u201clegal[ly]\u201d use Avila\u2019s\ntestimonial admission against him, and the jurors were not given the\nanswer. If the evidence of retaliation in this case was so overwhelming\n\f48 AVILA V. LAPD\n\n In this case, the absence of the \u201csame decision\u201d defense\ninstruction and the inclusion of the \u201cno role\u201d instruction had\nthe practical effect of depriving the City of its entire defense.\nThis circuit and several others have held, albeit mostly (but\nnot exclusively) in the criminal context, that an error cannot\nbe found harmless if it \u201cprecludes or impairs the presentation\nof [a defendant\u2019s] sole means of defense.\u201d United States v.\nCarter, 491 F.2d 625, 630 (5th Cir. 1974); see also United\nStates v. Peak, 856 F.2d 825, 834\u201335 (7th Cir. 1988); United\nStates v. Harris, 733 F.2d 994, 1005 (2d Cir. 1984); accord\nUnited States v. Evans, 728 F.3d 953, 967 (9th Cir. 2013)\n(concluding that trial judge\u2019s erroneous exclusion of the\n\u201ccentral piece of evidence\u201d for defendant\u2019s \u201cmain defense\u201d\nand which went to the \u201cvery heart\u201d of the dispute could not be\nharmless, notwithstanding the \u201coverwhelming volume and\n\n\nthat the error could be harmless, it is unlikely that the jury would have\nasked that question on the third day of deliberations. See Thomas v.\nChappell, 678 F.3d 1086, 1103\u201304 (9th Cir. 2012) (referencing two\n\u201cobjective clues\u201d that \u201cstrongly suggest that the case was close\u201d, namely,\nthe fact that the jurors deliberated into the fifth day and sent two requests\nthat \u201crelated specifically\u201d to the issue on appeal, which suggests \u201cthe jury\nactually struggled with that question\u201d; collecting multiple cases involving\njuror requests and \u201clengthy deliberations\u201d between two to five days that\nshowed the evidence was close as \u201c\u2018one would expect that if the evidence\n. . . was overwhelming the jury would have succumbed much sooner\u2019\u201d);\nsee also Aguilar v. Woodford, 725 F.3d 970, 984 (9th Cir. 2013)\n(questions and notes over four days of deliberations showed the case was\nclose) (citing Rhoden v. Rowland, 172 F.3d 633, 637 (9th Cir. 1999)\n(deliberations of nine hours over the course of three days indicated that the\njury \u201cdid not find the case to be clear cut\u201d); Gibson v. Clanon, 633 F.2d\n851, 855 n.8 (9th Cir. 1980) (\u201cit does not seem possible that the jury\nwould have deliberated nine hours over [the course of two] days if the\njurors did not have serious questions\u201d)); United States v. Ottersburg,\n76 F.3d 137, 140 (7th Cir. 1996) (nine hours of deliberations \u201cmakes clear\nthat this case was not an easy one for those called to serve as finders of\nfact\u201d).\n\f AVILA V. LAPD 49\n\nsubstance of the government\u2019s evidence\u201d); Ashcraft & Gerel\nv. Coady, 244 F.3d 948, 949, 954 (D.C. Cir. 2001) (holding\nthat trial error in a civil case which went \u201cto the very heart of\n[the defendant\u2019s] defense\u201d and was \u201ccentral to [his] defense\u201d\ncould not be deemed harmless \u201cin the absence of any steps by\nthe district court to mitigate the effects of the error\u201d).\n\n The error was not only not harmless, but, it seems to me,\nobjectively plain.\n\n III\n\n The FLSA\u2019s anti-retaliation provision serves a noble\npurpose. However, it does not extend so far as to immunize\nan employee who takes the stand and admits to serious\nmisconduct. While the public interest may favor a liberal\napplication of retaliation statutes in some cases, it is highly\nquestionable whether that interest is being served here. The\ninherent unfairness is that the public (i.e., taxpayers of Los\nAngeles) will be required to pay about $700,000.00 in a case\nwhere, because of an erroneous instruction that was twice\ngiven (and special instructions that were twice denied), their\ncity was deprived of the chance to defend itself. That error,\nbased on the jury questions, appears to have been outcome-\ndeterminative. While reasonable jurors (and judges) may\ndisagree on the merits of this case, what should be beyond\ndisagreement is that the City and its citizens were denied the\nfundamental right of defense to which they were entitled\nunder the law. Reversible error occurred, and this case should\nbe remanded for a new trial.\n\n I respectfully dissent.\n\f"} -{"text": "\n568 S.E.2d 192 (2002)\n356 N.C. 161\nWilliam A. CRIDER, Jr.\nv.\nThe JONES ISLAND CLUB, INC.\nWilliam A. Crider, Jr.\nv.\nThe Jones Island Club, Inc., a North Carolina Corporation\nAnn Crider, William Crider, III, Virginia Crider Mock and Cynthia Crider Jarrell\nv.\nThe Jones Island Club, Inc.\nNo. 691P01.\nSupreme Court of North Carolina.\nAugust 15, 2002.\nJohn M. Martin, Greenville, for Criders.\nLuther D. Starling, Jr., Kelly Daughtry, Smithfield, for The Jones Island Club, Inc.\nPrior report: 147 N.C.App. 262, 554 S.E.2d 863.\n\nORDER\nUpon consideration of the petition filed by Plaintiffs in this matter for a writ of certiorari to review the decision of the North Carolina Court of Appeals, the following order was entered and is hereby certified to the North Carolina Court of Appeals:\n\"Denied by order of the Court in conference, this the 15th day of August 2002.\"\n"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 05-5189\n\n\n\nUNITED STATES OF AMERICA,\n\n Plaintiff - Appellee,\n\n versus\n\n\nANTHONY AUGUSTUS THOMAS,\n\n Defendant - Appellant.\n\n\nAppeal from the United States District Court for the District of\nSouth Carolina, at Florence. Terry L. Wooten, District Judge.\n(CR-05-568)\n\n\nSubmitted: May 31, 2006 Decided: July 5, 2006\n\n\nBefore WILKINSON, NIEMEYER, and MOTZ, Circuit Judges.\n\n\nAffirmed by unpublished per curiam opinion.\n\n\nWilliam F. Nettles, IV, Assistant Federal Public Defender,\nFlorence, South Carolina, for Appellant. Reginald I. Lloyd, United\nStates Attorney, Alfred W. Bethea, Jr., Assistant United States\nAttorney, Florence, South Carolina, for Appellee.\n\n\nUnpublished opinions are not binding precedent in this circuit.\nSee Local Rule 36(c).\n\fPER CURIAM:\n\n Following a jury trial, Anthony Augustus Thomas was\n\nconvicted of Hobbs Act robbery, in violation of 18 U.S.C. \u00a7 1951\n\n(2000), and possession of a firearm in furtherance of a crime of\n\nviolence, in violation of 18 U.S.C. \u00a7 924(c)(1)(A) (2000). Thomas\u2019\n\nsole contention on appeal is that the district court erred in\n\ndenying his motion for a new trial on the ground that the jury\n\nconsidered evidence not admitted at trial. Finding no abuse of\n\ndiscretion, we affirm.\n\n The criminal charges underlying Thomas\u2019 conviction arose\n\nfrom his armed robbery of a convenience store in September 2004.\n\nDuring deliberations, the jury\u2019s foreperson discovered a four-inch\n\npocketknife while examining a piece of evidence \u2014 a pair of pants.*\n\nAfter returning the verdict, the foreperson informed court\n\npersonnel that he discovered the pocketknife, which had not been\n\nadmitted into evidence. The district court then apprised the\n\nattorneys of the situation, and briefly questioned the foreperson\n\non the record about this discovery. The foreperson made two\n\nstatements pertinent to this appeal: he described the circumstances\n\nsurrounding the jury\u2019s discovery of the knife (the foreperson found\n\n\n\n *\n Thomas does not contend, nor does the record demonstrate,\nthat the pocketknife was intentionally planted in the pants, which\nwere properly admitted and before the jury as part of the body of\nevidence. It is clear that the parties\u2019 failure to discover the\npocketknife prior to tendering the pants to the jury was purely\naccidental.\n\n - 2 -\n\fthe knife, showed it to the jury, then put it away; the jury did\n\nnot discuss it further), and he attested that the knife did not\n\naffect the jury\u2019s verdict. Thomas filed a post-verdict motion for\n\na new trial, pursuant to Federal Rule of Criminal Procedure 33,\n\narguing that he was prejudiced by the jury\u2019s discovery of the\n\nunadmitted pocketknife and by the district court\u2019s questioning of\n\nthe foreperson. After the parties briefed the issue, the district\n\ncourt denied Thomas\u2019 motion, finding that discovery of the\n\npocketknife had no impact on the jury\u2019s verdict.\n\n Pursuant to Rule 33(a), a trial court may grant a motion\n\nfor a new trial \u201cif the interest of justice so requires.\u201d Whether\n\nto grant a Rule 33 motion is squarely within the trial court\u2019s\n\ndiscretion. United States v. Greene, 834 F.2d 86, 88 (4th Cir.\n\n1987). This court reviews the denial of a motion for new trial for\n\nabuse of discretion. United States v. Lentz, 383 F.3d 191, 219\n\n(4th Cir. 2004).\n\n Circuit precedent establishes that, when a jury considers\n\n\u201cprejudicial evidence that was not introduced at trial . . . the\n\ndefendant is entitled to a new trial.\u201d United States v. Barnes,\n\n747 F.2d 246, 250 (4th Cir. 1984). Although determining prejudice\n\nrequires assessing \u201cwhether there is a reasonable possibility that\n\nthe jury\u2019s verdict was influenced by the material that improperly\n\ncame before it,\u201d a presumption of prejudice arises when the jury\n\nconsiders evidence not admitted at trial. Id. at 250-51 (internal\n\n\n - 3 -\n\fquotations and citation information omitted). When such a\n\npresumption arises, the government must rebut it by showing that\n\nconsideration of the improper material was harmless. Id. at 251.\n\n Our review of the record convinces us that the strength\n\nof the Government\u2019s evidence against Thomas rebuts the presumption\n\nof prejudice. At trial, the cashier present during the robbery\n\ngave a very specific description of the robber; she testified that\n\nthe robber was a black man, approximately 5\u20196\u201d tall, who was\n\nwearing a wig, a white bandana, and a blue jumpsuit. She further\n\ntestified that the robber was carrying a bag and riding a blue\n\nbicycle. A number of law enforcement officials testified to the\n\nactions taken to apprehend the robber. Officer August of the\n\nDarlington Police Department testified to pursuing a man fitting\n\nthis description, who was riding a blue bicycle. Officer August\n\nnudged the suspect from his bicycle because he failed to comply\n\nwith the officer\u2019s order to stop; a team of bloodhounds picked up\n\nthe suspect\u2019s scent from the wig, and soon thereafter located the\n\nsuspect, later determined to be Thomas, hiding in a nearby carport.\n\nThe next day, law enforcement recovered a .357 Magnum near Thomas\u2019\n\nhiding spot. At trial, the cashier testified that this firearm was\n\nsimilar to the one the robber used in that it was older and\n\npartially rusted and that the recovered wig was the same wig the\n\nrobber had worn.\n\n\n\n\n - 4 -\n\f Because the evidence against Thomas was compelling and\n\nthe pocketknife was not relevant to any of the charged offenses, we\n\nconclude the district court did not abuse its discretion in denying\n\nThomas\u2019 motion for a new trial. The district court\u2019s questioning\n\nof the foreperson does not affect our conclusion. The district\n\ncourt\u2019s inquiry into the factual circumstances of the jury\u2019s\n\ndiscovery of the knife was \u201cwas not only permissible but\n\nnecessary.\u201d United States v. Cheek, 94 F.3d 136, 143 (4th Cir.\n\n1996). Although we agree with Thomas that the foreperson\u2019s\n\ntestimony about the knife\u2019s effect on the jury\u2019s verdict was\n\ninadmissible as evidence concerning a jury\u2019s \u201cmental processes,\u201d\n\nid., we think that in light of the evidence against Thomas and the\n\nforeperson\u2019s description of the knife\u2019s discovery, any error was\n\nharmless.\n\n Accordingly, we affirm Thomas\u2019 conviction. Additionally,\n\nwe deny Thomas\u2019 motion to file a pro se supplemental brief because\n\nhe is represented by counsel, and further deny the pending motion\n\nto have his attorney dismissed because he is allegedly ineffective.\n\nWe dispense with oral argument because the facts and legal\n\ncontentions are adequately presented in the materials before the\n\ncourt and argument would not aid the decisional process.\n\n\n\n AFFIRMED\n\n\n\n\n - 5 -\n\f"} -{"text": "\n43 A.3d 513 (2012)\nCOM.\nv.\nGARCIA.\nNo. 653 EDA 2011.\nSuperior Court of Pennsylvania.\nJanuary 6, 2012.\nAffirmed.\n"} -{"text": " NOTICE: NOT FOR PUBLICATION.\n UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE\n LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.\n\n\n\n\n IN THE\n ARIZONA COURT OF APPEALS\n DIVISION ONE\n\n\n DANIELLE SAHLIN (f/n/a HARTFIELD), Petitioner\n\n v.\n\n THE HONORABLE ELAINE FRIDLUND-HORNE, Judge of the\nSUPERIOR COURT OF THE STATE OF ARIZONA, in and for the County\n of COCONINO, Respondent Judge,\n\n SCOTT J. HARTFIELD, Real Party in Interest.\n\n No. 1 CA-SA 14-0066\n FILED 05-27-2014\n\n\n Petition for Special Action from the Superior Court in Coconino County\n No. DO 2008-0621\n The Honorable Elaine Fridlund-Horne, Judge\n\n JURISDICTION ACCEPTED; RELIEF GRANTED\n\n\n COUNSEL\n\nHarris & Winger, Flagstaff\nBy Chad Joshua Winger\nCounsel for Petitioner\n\nAntol & Hance PC, Flagstaff\nBy Jonathon Kircher\nCounsel for Real Party in Interest\n\f SAHLIN v. HON. FRIDLUND-HORNE/HARTFIELD\n Decision of the Court\n\n\n\n DECISION ORDER\n\nJudge Andrew W. Gould delivered the decision of the Court, in which\nPresiding Judge Lawrence F. Winthrop and Judge Maurice Portley joined.\n\n\nG O U L D, Judge:\n\n\u00b61 Petitioner Danielle Sahlin (\u201cMother\u201d) seeks special action\nrelief from the trial court\u2019s order granting Respondent/Real Party in\nInterest Scott J. Hartfield\u2019s (\u201cFather\u201d) request for a hearing to modify\nlegal-decision making authority and parenting time. For the reasons\ndiscussed below, we accept jurisdiction and grant relief.\n\n\u00b62 Father and Mother have one child in common. The parties\nwere divorced on April 3, 2009. In the decree, Mother was awarded sole\nlegal and physical custody of the child, and Father was awarded\nparenting time.\n\n\u00b63 On October 8, 2013, Father filed a verified Petition to Modify\nLegal-Decision Making; Petition for Modification of Child Support;\nMotion for Contempt and Order to Show Cause (hereinafter \u201cPetition to\nModify\u201d). Mother filed an objection to Father\u2019s petition, a detailed\naffidavit in opposition, and a Request for Order Denying Legal Decision\nMaking Hearing on December 12, 2013. Mother also filed a Request for\nFindings of Fact and Conclusions of Law re: Petitioner\u2019s Request to Deny\nHearing on Modification Petition on December 17, 2013.\n\n\u00b64 On March 5, 2014, the trial court granted Father\u2019s request for\na hearing on his Petition to Modify. The court based its order on the\nfollowing finding of fact: \u201cIt has been over four (4) years since parenting\ntime has been reviewed in this matter.\u201d\n\n\u00b65 After the court issued its order, Mother filed her current\npetition for special action relief on April 22, 2014.\n\n\u00b66 In her petition, Mother argues that the trial court abused its\ndiscretion by granting Father\u2019s request for a custody modification hearing.\nMother contends that based on the sole finding by the trial court, Father\nfailed to establish \u201cadequate cause\u201d for the hearing as required by Arizona\nRevised Statutes (\u201cA.R.S.\u201d) section 25-411(L).\n\n\n\n 2\n\f SAHLIN v. HON. FRIDLUND-HORNE/HARTFIELD\n Decision of the Court\n\n\u00b67 We have jurisdiction because Mother has no adequate\nremedy on appeal. Ariz. R. P. Spec. Act. 1(a). Arizona Revised Statute\n\u00a7 25-411 is a procedural statute; as a result, any errors in the preliminary\nprocedures required by the statute \u201cmust be addressed prior to a\nresolution on the merits\u201d at a custody modification hearing. In re Marriage\nof Dorman, 198 Ariz. 298, 302, \u00b6 11, 9 P.3d 329, 333 (App. 2000); see Richards\nv. Superior Court, 22 Ariz.App. 66, 68, 523 P. 2d 117, 119 (1974) (granting\nspecial action relief from denial of motion to quash based on failure to\ncomply with former \u00a7 25\u2013339).\n\n\u00b68 We review a trial court\u2019s decision regarding the modification\nof child custody for an abuse of discretion. Pridgeon v. Superior Court, 134\nAriz. 177, 179, 655 P. 2d 1, 3 (1982). Pursuant to \u00a7 25-411(L), a court \u201cshall\ndeny\u201d a petition to modify custody unless it determines there is adequate\ncause to have a hearing. A.R.S. \u00a7 25-411(L). In determining whether there\nis adequate cause, \u201cthe court must first determine whether there has been\na change in circumstances materially affecting the child\u2019s welfare.\u201d\nChristopher K. v. Markaa S., 233 Ariz. 297, 300, \u00b6 15, 311 P.3d 1110, 1113\n(App. 2013); see Pridgeon, 134 Ariz. at 179, 655 P. 2d at 3. \u201cIf the court finds\nsuch a change in circumstances, it must then determine whether a change\nin custody would be in the child\u2019s best interests.\u201d Christopher K., 233 Ariz.\nat 300, \u00b6 15, 311 P.3d at 1113; see Pridgeon, 134 Ariz. at 179, 655 P. 2d at 3.\n\n\u00b69 When a party requests findings of fact and conclusions of\nlaw, the trial court is required to \u201cset forth all facts necessary to resolve\ndisputed issues so that [the appellate court] may examine and\ncomprehend the basis for the trial court\u2019s rulings.\u201d Kelsey v. Kelsey, 186\nAriz. 49, 50-51, 918 P.2d 1067, 1068-69 (App. 1996).1 \u201cIf the trial court\u2019s\nbasis for a conclusion is unclear, this Court may not affirm simply because\nwe may find some possible basis for that conclusion in the record.\u201d Id. at\n51. Rather, when Rule 52(a) has been invoked, \u201c[i]t must be clear [from\nthe findings] how the court actually did arrive at its conclusions.\u201d Id.\n(internal citations omitted).\n\n\u00b610 Mother argues that the trial court erred in basing its decision\nsolely on the fact that four years had passed since the issue of parenting\ntime had been reviewed. We agree.\n\n1 Kelsey is based on a party\u2019s request for findings of fact and\nconclusions of law pursuant to Arizona Rule of Civil Procedure 52(a),\nwhich is identical to Arizona Rule of Family Law Procedure 82(a). Kelsey,\n186 Ariz. at 50-51, 918 P.2d at 1068-69.\n\n\n\n 3\n\f SAHLIN v. HON. FRIDLUND-HORNE/HARTFIELD\n Decision of the Court\n\n\u00b611 The trial court\u2019s finding, standing alone and without further\nclarification, is insufficient to establish adequate cause under A.R.S. \u00a7 25-\n411(L). The trial court\u2019s order does not identify the specific change(s) in\nthe child\u2019s circumstances that are materially affecting the child\u2019s welfare\nsuch that a modification hearing is warranted.\n\n\u00b612 IT IS ORDERED accepting jurisdiction of Mother\u2019s petition\nfor special action.\n\n\u00b613 IT IS ORDERED granting relief by remanding this matter to\nthe trial court to make further findings regarding whether, based on\nfurther review of the verified petition and exhibits thereto, as well as\nMother\u2019s objections and affidavit, Father has alleged sufficient facts to\nhold an evidentiary hearing pursuant to A.R.S. \u00a7 25-411(L).2\n\n\n\n\n :gsh\n\n\n\n\n2 Based on our decision, in our discretion we do not reach the\nremaining issues raised by Mother in her petition.\n\n\n\n 4\n\f"} -{"text": "225 F.2d 482\nNATIONAL LABOR RELATIONS BOARD, Petitioner,v.INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS,WAREHOUSEMEN AND HELPERS OF AMERICA, AFL, LOCAL 618.\nNo. 15390.\nUnited States Court of Appeals Eighth Circuit.\nAugust 9, 1955.\n\nOn Petition for Enforcement of Order of National Labor Relations Board.\nMarcell Mallett-Prevost, Asst. General Counsel, National Labor Relations Board, Washington, D.C., for petitioner.\n\n\n1\nOrder of National Labor Relations Board enforced, on petition for enforcement and stipulation filed with Board.\n\n"} -{"text": "\n991 S.W.2d 226 (1999)\nNathan BREWER, Plaintiff/Appellee,\nv.\nLINCOLN BRASS WORKS, INC., Defendant/Appellant.\nSupreme Court of Tennessee, at Nashville.\nApril 12, 1999.\nRehearing Denied June 14, 1999.\n*227 Mark C. Travis, Cookeville, for Appellant.\nJay R. Slobey, Nashville, for Appellee.\n\nOPINION\nHOLDER, J.\nWe granted this appeal to address whether Tenn.Code Ann. \u00a7 50-6-231 precludes an enlargement of an award under \u00a7 50-6-241(a)(2) when the original award was paid in a lump sum. Upon review, we hold that a lump sum award may later be enlarged if the criteria in \u00a7 241(a)(2) are satisfied. We further hold that \u00a7 241(a)(2) is not applicable when there is either a subsequent injury or an aggravation of the original injury which increases a worker's anatomical disability.\n\nBACKGROUND\nThe plaintiff, Nathan Brewer, began working for the defendant, Lincoln Brass Works, Inc. (\"Lincoln\"), in 1991. Mr. Brewer sustained a work-related injury to his back in December of 1992. He underwent two laminectomies as the result of the 1992 injury. He returned to work for Lincoln in August of 1993 at a wage equal to or greater than his pre-injury wage.\nMr. Brewer was assessed a 15 percent anatomical disability rating. Mr. Brewer received workers' compensation benefits based on a 37.5 percent permanent partial impairment to the body as a whole, with Lincoln's liability capped by the 2.5 multiplier in Tenn.Code Ann. \u00a7 50-6-241(a)(1).[1] The award was paid in lump sum.\n*228 Mr. Brewer continued working at Lincoln for approximately ten months after his return to employment in August of 1993. He initially returned to a line job, which required sitting and repetitive stretching, bending, and twisting. He stated that the line job aggravated his back and caused his \"leg to go numb.\" He then transferred to a janitorial position, but his pain became increasingly unbearable. His last day at work was June 20, 1994. Lincoln, however, stipulated that he was still an employee of Lincoln as of March 20, 1996.\nMr. Brewer was referred to an orthopedic surgeon, Dr. Allen. Dr. Allen diagnosed Mr. Brewer in September of 1994 as having a \"very large recurring disc rupture at the L4-5 level.\" Dr. Allen opined that Mr. Brewer's prior surgeries to the L4-5 region rendered the disc \"more susceptible to rupture.\" Dr. Allen, however, further testified that:\nI think the natural progression, degeneration takes some trauma to take place, whether it's trauma that is incidental twisting, turning, standing, sitting, rolling over in bed, sneezing, coughing, but presumably some trauma, even if it's not\u0097even if it's not something you can put a finger on and say this is the episode, but some trauma would be necessary to break this piece of disc loose and allow it to come out through the hole.\nDr. Allen performed a laminectomy on Mr. Brewer on January 9, 1995, and a second laminectomy on June 2, 1995. Dr. Allen testified that both the January and the June surgeries increased Mr. Brewer's anatomical impairment.\nMr. Brewer filed a petition for increased workers' compensation benefits pursuant to Tenn.Code Ann. \u00a7 50-6-241(a)(2).[2] The petition alleged he was no longer \"able to function in his previous employment\" following the 1994 disc rupture and requested an enlargement of the 1992 award. The trial court awarded Mr. Brewer increased benefits. The workers' compensation panel reversed the trial court, finding:\n1. Tenn.Code Ann. \u00a7 50-6-231 provides that lump sum payments shall be final and precludes increased benefits under \u00a7 241(a)(2) if the original award was paid in lump sum;\n2. the petition for increased benefits was time barred because it was not filed within one year of June 20, 1994, the last day Brewer reported to work; and\n3. the trial court failed to render specific findings of fact as required by \u00a7 50-6-241(c).\nWe granted review.\n\nANALYSIS\nAn employer's workers' compensation liability is capped at 2.5 times the anatomical impairment rating when the employer returns an injured employee to work at a wage equal to or greater than the wage at the time of the injury. Tenn.Code Ann. \u00a7 50-6-241(a)(1).[3] If, however, *229 the employer's attempts to accommodate an injured worker become futile, the worker may file for increased benefits under Tenn.Code Ann. \u00a7 241(a)(2). Pursuant to \u00a7 241(a)(2), a court may enlarge a workers' compensation award that was previously capped by the 2.5 multiplier in \u00a7 241(a)(1). Among the factors for consideration for enlargement of an award under \u00a7 241(a)(2) are the \"employee's age, education, skills and training, local job opportunities, and capacity to work at types of employment available in the claimant's disabled condition.\" Increased anatomical impairments and subsequent injuries are not factors for consideration under \u00a7 241(a)(2). The focus is purely on the issue of industrial disability.\nA petition to enlarge a previous award under \u00a7 50-6-241(a)(2) is not the appropriate vehicle to use when a worker sustains additional injuries or additional anatomical impairment. A \u00a7 241(a)(2) petition is proper when the injured worker attempts to return to work but the original work-related disability later renders the injured worker unemployable with the pre-injury employer. Section 241(a)(2) then allows the injured worker to receive a new industrial disability rating when the employer's attempts to accommodate the worker fail. The new disability rating is not limited by the \u00a7 241(a)(1) cap and is based on the worker's previous anatomical impairment rating. We hold that if the worker, however, sustains additional impairment, whether caused by a subsequent work-related injury or work-related aggravation injury or aggravation of the original injury, the worker must file a new claim for workers' compensation rather than attempting to enlarge a previous award under \u00a7 241(a)(2).\nMr. Brewer received an award of 37.5 percent attributable to his 1992 work-related injury to his lower back. He subsequently aggravated or re-injured his lower back. Expert testimony established that the aggravation or re-injury caused additional anatomical impairment. Accordingly, Mr. Brewer's claim should have been filed as a new and separate action for workers' compensation benefits.\n\nLUMP SUM PROVISION\nWe granted this appeal to address whether Tenn.Code Ann. \u00a7 50-6-231 prohibits petitions to enlarge previous awards under \u00a7 241(a)(2). Pursuant to \u00a7 231, \"[a]ll amounts paid by the employer and received by the employee ... by lump sum payments, shall be final....\" Section 241(a)(2) permits an injured worker whose workers' compensation benefits were capped by \u00a7 241(a)(1) to seek an enlargement of the capped award \"in appropriate cases where the employee is no longer employed by the pre-injury employer....\" Our holding that Mr. Brewer's cause of action cannot be sustained under \u00a7 241(a)(2) has rendered this issue moot. We, however, will address this important legal issue.\nInitially, we note that statutes shall be construed in light of the purposes the legislature intended to accomplish by their passage. Business Brokerage Ctr. v. Dixon, 874 S.W.2d 1, 5 (Tenn.1994). Section 241 was codified to promote uniformity in workers' compensation awards. Brown v. Campbell County Bd. of Educ., 915 S.W.2d 407, 414 (Tenn.1995). Permitting enlargement of awards ordered paid in periodic payments but not lump sum awards is inconsistent with \u00a7 241's policy of promoting uniformity of awards.\nThe language in \u00a7 241 provides an avenue for an enlargement of awards without regard to whether the original award was paid in lump sum or periodic payments. Section 241 was codified after the codification of \u00a7 231. Where two statutes conflict and cannot be reconciled, the prior act will be repealed or amended by implication to the extent of the inconsistency between the two statutes. Steinhouse v. Neal, 723 S.W.2d 625, 627 (Tenn.1987); State v. Moore, 722 S.W.2d 367, 374 (Tenn.1986). Specific statutory provisions generally *230 prevail over general provisions when there is a conflict between statutes. Tenn.Code Ann. \u00a7 1-3-103; see also Moore, 722 S.W.2d at 374; State v. Nelson, 577 S.W.2d 465, 466 (Tenn.Crim.App.1978). Accordingly, we hold that \u00a7 241(a)(2) controls over the provisions of \u00a7 231 to the extent the two statutes conflict. A petition under \u00a7 241(a)(2) is not prohibited in a case where the original workers' compensation award sought to be enlarged was paid in lump sum.\n\nSTATUTE OF LIMITATIONS\nMr. Brewer suffered increased pain while working and was unable to continue working in June of 1994. He was referred to Dr. Allen who performed a myelogram in September of 1994 The results of the myelogram revealed a \"large recurrent disc rupture at the L4-5 level.\" Accordingly, the full nature and extent of his injury was not manifested until Dr. Allen discovered the ruptured disc. See Union Carbide Corp. v. Cannon, 523 S.W.2d 360 (Tenn.1975) (holding limitations period began to accrue upon discovery of the herniated disc and not from the date of the accident). Mr. Brewer's statute of limitations for a new claim of workers' compensation began to accrue upon the September 1994 discovery date.\n\nCONCLUSION\nThe plaintiff's petition for an enlargement of a previous award is dismissed. The plaintiff's remaining issue concerning the trial court's findings under \u00a7 241(c) has been rendered moot. Our analysis of the application of \u00a7 241, however, addressed an issue of first impression, and the defendant has not been prejudiced by lack of timely notice of Mr. Brewer's attempt to obtain additional workers' compensation benefits. The plaintiff's cause of action is, therefore, dismissed without prejudice. Costs of this appeal shall be taxed against the plaintiff for which execution may issue if necessary.\nANDERSON, C.J., BIRCH and BARKER, JJ., and TIPTON, Special Justice, concur.\nDROWOTA, J., Not Participating.\nNOTES\n[1] \"For injuries arising on or after August 1, 1992, in cases where an injured employee is eligible to receive any permanent partial disability benefits, ... and the pre-injury employer returns the employee to employment at a wage equal to or greater than the wage the employee was receiving at the time of injury, the maximum permanent partial disability award that the employee may receive is two and one-half (2\u00bd) times the medical impairment rating.... In making determinations, the court shall consider all pertinent factors, including lay and expert testimony, employee's age, education, skills and training, local job opportunities, and capacity to work at types of employment available in claimant's disabled condition.\"\n[2] \"[T]he courts may reconsider upon the filing of a new cause of action the issue of industrial disability. Such reconsideration shall examine all pertinent factors, including lay and expert testimony, employee's age, education, skills and training, local job opportunities, and capacity to work at types of employment available in claimant's disabled condition. Such reconsideration may be made in appropriate cases where the employee is no longer employed by the pre-injury employer and makes application to the appropriate court within one (1) year of the employee's loss of employment....\"\n[3] Awards limited by the 2.5 multiplier may or may not be an accurate reflection of vocational disability. For instance, an injured worker may have sustained a 20 percent anatomical impairment. If the injured worker is returned to work at his prior wage, the employer's liability is limited at 50 percent even if expert testimony indicates that the injured worker's vocational disability is 90 percent.\n"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 01-8076\n\n\n\nDONNELL S. BYRD,\n\n Petitioner - Appellant,\n\n versus\n\n\nRONALD ANGELONE,\n\n Respondent - Appellee.\n\n\n\nAppeal from the United States District Court for the Eastern\nDistrict of Virginia, at Alexandria. T. S. Ellis, III, District\nJudge. (CA-01-1666-AM)\n\n\nSubmitted: June 20, 2002 Decided: June 25, 2002\n\n\nBefore MICHAEL and KING, Circuit Judges, and HAMILTON, Senior\nCircuit Judge.\n\n\nDismissed by unpublished per curiam opinion.\n\n\nDonnell S. Byrd, Appellant Pro Se.\n\n\nUnpublished opinions are not binding precedent in this circuit.\nSee Local Rule 36(c).\n\fPER CURIAM:\n\n Donnell S. Byrd seeks to appeal the district court\u2019s order\n\ndenying relief on his petition filed under 28 U.S.C.A. \u00a7 2254 (West\n\n1994 & Supp. 2001). We have reviewed the record and the district\n\ncourt\u2019s opinion and find no reversible error. Accordingly, we deny\n\na certificate of appealability and dismiss the appeal on the\n\nreasoning of the district court. Byrd v. Angelone, No. CA-01-1666-\n\nAM (E.D. Va. filed Nov. 13, 2001 & entered Nov. 15, 2001). We\n\ndispense with oral argument because the facts and legal contentions\n\nare adequately presented in the materials before the court and\n\nargument would not aid the decisional process.\n\n\n\n\n DISMISSED\n\n\n\n\n 2\n\f"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 08-1463\n\n\n\nIn Re: LOUISE BURTON-ALSTON,\n\n Debtor.\n\n-------------------------------------\n\nFELICIA SPRINCENATU,\n\n Plaintiff - Appellant,\n\n v.\n\n\nRICHARD M. HUTSON, II, Trustee,\n\n Trustee - Appellee.\n\n\n\nAppeal from the United States District Court for the Middle\nDistrict of North Carolina, at Durham. James A. Beaty, Jr., Chief\nDistrict Judge. (1:06-cv-00765-JAB; BK-97-16333)\n\n\nSubmitted: July 31, 2008 Decided: August 7, 2008\n\n\nBefore NIEMEYER, TRAXLER, and GREGORY, Circuit Judges.\n\n\nAffirmed by unpublished per curiam opinion.\n\n\nFelicia Sprincenatu, Appellant Pro Se. Benjamin Eric Lovell,\nCHAPTER 13 OFFICE DURHAM, Durham, North Carolina, for Appellee.\n\n\nUnpublished opinions are not binding precedent in this circuit.\n\fPER CURIAM:\n\n Felicia Sprincenatu appeals the district court\u2019s order\n\nadopting the magistrate judge\u2019s recommendation to dismiss her\n\nappeal from the bankruptcy court\u2019s orders denying her motion to\n\nreopen the underlying bankruptcy proceeding. We have reviewed the\n\nrecord and find no reversible error. Accordingly, we affirm for\n\nthe reasons stated by the district court. Sprincenatu v. Hutson,\n\nNos. 1:06-cv-00765-JAB; BK-97-16333 (M.D.N.C. Mar. 19, 2008). We\n\ndispense with oral argument because the facts and legal contentions\n\nare adequately presented in the materials before the court and\n\nargument would not aid the decisional process.\n\n AFFIRMED\n\n\n\n\n - 2 -\n\f"} -{"text": "\n487 S.E.2d 447 (1997)\n226 Ga. App. 659\nCARSON\nv.\nCARSON.\nNo. A97A1074.\nCourt of Appeals of Georgia.\nJune 3, 1997.\nKatrina L. Breeding, Atlanta, for appellant.\nM.V. Booker, Washington, for appellee.\nBIRDSONG, Presiding Judge.\nAppellant/defendant Vera Mapp Carson appeals from the final order of divorce, entered by the superior court, as to the limited appellate issues of lack of an award of attorney fees, regarding post-temporary hearing representation, and from the superior court's modification and changing of the terms of a previous order entered for payment of temporary attorney fees. Appellant did not request and the appellate record does not include a transcript of either the temporary hearing at which temporary attorney fees were originally awarded or that portion of the trial record containing the subsequent hearing pertaining to attorney fees.\nAppellee/plaintiff Stanley Carson filed for divorce; service initially was not completed. *448 Appellant, through present counsel, filed a motion to dismiss upon special appearance; a hearing was held and the motion denied. Fifteen months after filing the divorce complaint, appellee executed out-of-state service on appellant; appellant filed an answer and a rule nisi was filed setting a date for a temporary hearing. Appellant then filed a motion to dismiss alleging that the out-of-state service had been defective and that a reconciliation of the marital status had occurred. Appellee responded by filing an amendment to divorce and served it on appellant on the day of filing. Appellant filed an amendment to the answer to the complaint for divorce and in the alternative an answer to the amendment to the complaint for divorce, a demand for jury trial and an amendment to the motion to dismiss. Upon hearing on the motion, an order was entered denying appellant's motion. Thereafter, a temporary hearing was held to determine issues of custody, child support, alimony and attorney fees. The hearing judge entered an order which, in part, awarded appellant temporary attorney fees in the amount of $2,000 payable within 60 days. Appellee objected to the award and to other portions of the order and filed a motion for reconsideration; one of the several issues presented therein was the award of attorney fees. Appellant filed a response to the reconsideration motion. The case was tried by jury. Prior to the return of the verdict, appellant moved for additional attorney fees for post-temporary hearing representation. After the verdict but prior to the entry of final judgment, appellant requested a written finding on the issue of the additional attorney fees. Judgment was entered; however, no written finding was made on the issue of additional attorney fees and the award of $2,000 temporary attorney fees was modified to extend the due date to one year and eight months (payable in $100 monthly installments). Held:\n1. Appellant's brief contains references to item numbers in the index to the record rather than direct cites to the page of the record to which appellant is referring. Court of Appeals Rule 27(a)(1), requiring \"a citation of such parts of the record or transcript essential to a consideration of the errors complained of,\" means that page citations to the trial record and transcript shall be provided. References to index items do not meet these requirements and diminishes this Court's ability to find rapidly critical documents and testimony in records and transcripts; such practice should be discontinued forthwith.\n2. Appellant contends the trial court erred in modifying and changing the terms of the order awarding temporary attorney fees. \"This court will not control the discretion of a trial judge in awarding temporary alimony and attorney fees `... unless it can be clearly shown by the appellant that the trial court committed grievous error or a gross abuse of discretion.' [Cit.]\" Bowman v. Bowman, 242 Ga. 259, 260, 248 S.E.2d 654; see also Weaver v. Weaver, 263 Ga. 56, 428 S.E.2d 79. Absent the temporary hearing transcript and that portion of the trial transcript pertaining to the award of attorney fees, we cannot determine whether such an abuse occurred. Both error and harm must be shown affirmatively by the record to obtain reversal on appeal. Robinson v. State, 212 Ga.App. 613, 616(2), 442 S.E.2d 901; Whelchel v. Thomas Ford Tractor, 190 Ga. App. 156 (1), 378 S.E.2d 510. Moreover, when a portion of the evidence bearing upon an appellate issue is not brought up so that this Court can make its determination from a consideration of all relevant evidence bearing thereon, an affirmance of that issue must result. Nodvin v. West, 197 Ga.App. 92, 97(3)(c), 397 S.E.2d 581; compare Young v. Young, 227 Ga. 570, 571(1), 181 S.E.2d 867; Marchman v. Head, 135 Ga.App. 475, 477(2), 218 S.E.2d 151, overruled on other grounds, Gen. Recording Corp. v. Chadwick, 136 Ga. App. 213, 214, 220 S.E.2d 697. Appellant has failed to carry her burden as to this enumeration of error.\n3. Appellant contends the trial court erred in failing to make findings of fact, as requested, regarding the issue of additional attorney fees (for representation subsequent to the temporary hearing). In view of our holding in Division 2 above, we conclude that had error occurred as asserted in appellant's second enumeration of error that it would be harmless. By failing to provide this Court *449 with the requisite transcripts, we must assume as a matter of law that the trial court's rulings regarding attorney fees were correct and affirm them. See generally Johnson v. State, 261 Ga. 678, 679(2), 409 S.E.2d 500; Nodvin, supra; Attwell v. Heritage Bank, etc., 161 Ga.App. 193, 194, 291 S.E.2d 28; see Young, supra. The mere existence of findings of fact would not change this result. This enumeration as crafted is without merit.\nJudgment affirmed.\nRUFFIN and ELDRIDGE, JJ., concur.\n"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 00-7155\n\n\n\nIn Re: WAYNE THOMAS JOHNSON,\n\n Petitioner.\n\n\n\n On Petition for Writ of Mandamus.\n\n\nSubmitted: November 30, 2000 Decided: December 7, 2000\n\n\nBefore NIEMEYER, LUTTIG, and MICHAEL, Circuit Judges.\n\n\nPetition denied by unpublished per curiam opinion.\n\n\nWayne Thomas Johnson, Petitioner Pro Se.\n\n\nUnpublished opinions are not binding precedent in this circuit.\nSee Local Rule 36(c).\n\fPER CURIAM:\n\n Wayne T. Johnson petitions this court for a writ of mandamus\n\ndirecting a North Carolina state court to act on Johnson\u2019s Motion\n\nfor Appropriate Relief. Federal courts have no general power to\n\ncompel action by state courts. See Davis v. Lansing, 851 F.2d 72,\n\n74 (2d Cir. 1988); Gurley v. Superior Court of Mecklenburg County,\n\n411 F.2d 586, 587 (4th Cir. 1969). Accordingly, while we grant\n\nJohnson\u2019s motion to proceed on appeal in forma pauperis, we deny\n\nhis petition for a writ of mandamus, his motion for general relief,\n\nand his motion to compel a ruling. We dispense with oral argument\n\nbecause the facts and legal contentions are adequately presented in\n\nthe materials before the court and argument would not aid the\n\ndecisional process.\n\n\n\n\n PETITION DENIED\n\n\n\n\n 2\n\f"} -{"text": " Cite as 2013 Ark. App. 725\n\n ARKANSAS COURT OF APPEALS\n DIVISION III\n No. CR-13-360\n\n\n Opinion Delivered December 11, 2013\nJASON CARL HAYES\n APPELLANT APPEAL FROM THE BOONE\n COUNTY CIRCUIT COURT\n [NOS. CR-2011-310-4; CR-2012-158-\nV. 4]\n\n HONORABLE GORDON WEBB,\n JUDGE\nSTATE OF ARKANSAS\n APPELLEE AFFIRMED\n\n\n\n JOHN MAUZY PITTMAN, Judge\n\n This is an appeal from a conditional plea of no contest to a charge of possessing and\n\nviewing child pornography in violation of Ark. Code Ann. \u00a7 5-27-602 (Repl. 2006), and\n\nfrom the revocation of appellant\u2019s prior probation for failure to register as a sex offender.\n\nThe revocation was based on the no-contest plea.\n\n Two search warrants were issued in this case, one to search appellant\u2019s house and\n\nanother to search the contents of his cell phone and a laptop computer. Motions to suppress\n\nevidence discovered as a result of those searches were denied. On appeal, appellant argues\n\nthat (1) the trial court erred in denying the motion to suppress the first search warrant\n\nbecause the photographs turned over to the police by an informant did not contain any\n\n\u201clewd display\u201d in violation of the statute, and thus did not give rise to probable cause to\n\nsearch; (2) the second search warrant was improper because it failed to specify with sufficient\n\f Cite as 2013 Ark. App. 725\n\nparticularity the items to be searched; and (3) the trial court erred in interpreting the term\n\n\u201clewd display\u201d for purposes of the revocation to include photographs of nude children\n\nengaging in nonsexual behavior. We affirm.\n\n Because points one and three require the same analysis regarding what constitutes a\n\n\u201clewd display,\u201d we address them together. When appealing a revocation, the appellant has\n\nthe burden of showing that the trial court\u2019s findings are clearly against the preponderance of\n\nthe evidence. Haley v. State, 96 Ark. App. 256, 240 S.W.3d 615 (2006). Evidence that is\n\ninsufficient for a criminal conviction may be sufficient for the revocation of probation. Id.\n\nSince the determination of a preponderance of the evidence turns on questions of credibility\n\nand the weight to be given testimony, we defer to the trial judge\u2019s superior position. Id.\n\nIn reviewing the denial of a motion to suppress evidence, the appellate court conducts a de\n\nnovo review based on the totality of the circumstances set forth in the affidavit and will\n\nreverse only if the trial court\u2019s ruling is clearly against the preponderance of the evidence.\n\nCollins v. State, 2013 Ark. App. 399. Appellate review of the existence of probable cause to\n\nsupport a search or seizure is liberal rather than strict. Id.\n\n Arkansas Code Annotated section 5-27-602 (Repl. 2006) provides:\n\n (a) A person commits distributing, possessing, or viewing of matter depicting sexually\n explicit conduct involving a child if the person knowingly:\n\n (1) Receives for the purpose of selling or knowingly sells, procures, manufactures,\n gives, provides, lends, trades, mails, delivers, transfers, publishes, distributes, circulates,\n disseminates, presents, exhibits, advertises, offers, or agrees to offer through any\n means, including the internet, any photograph, film, videotape, computer program\n or file, video game, or any other reproduction or reconstruction that depicts a child\n or incorporates the image of a child engaging in sexually explicit conduct; or\n\n\n 2\n\f Cite as 2013 Ark. App. 725\n\n (2) Possesses or views through any means, including on the internet, any photograph,\n film, videotape, computer program or file, computer-generated image, video game,\n or any other reproduction that depicts a child or incorporates the image of a child\n engaging in sexually explicit conduct.\n\n (b) Distributing, possessing, or viewing of matter depicting sexually explicit conduct\n involving a child is a:\n\n (1) Class C felony for the first offense; and\n\n (2) Class B felony for any subsequent offense.\n\n (c) It is an affirmative defense to a prosecution under this section that the defendant\n in good faith reasonably believed that the person depicted in the matter was seventeen\n (17) years of age or older.\n\nPursuant to Ark. Code Ann. \u00a7 5-27-601(15)(F), \u201csexually explicit conduct\u201d includes lewd\n\nexhibition of the genitals or pubic area of any person or breasts of a female.\n\n An informant came to the police station and told police that appellant had shown him\n\ndisturbing photographs on his cell phone. Without appellant\u2019s knowledge, the informant\n\ncopied the images to his own cell phone and showed them to the police. The images\n\ndisplayed frontal nudity of very young girls including their pubic area and their breasts. A\n\nsearch warrant was issued, and appellant\u2019s cell phone was seized. The photographs brought\n\nin by the informant were all found on appellant\u2019s telephone seized in the search of his home,\n\nalong with additional images of similar character.\n\n In a case where, as here, it was argued that nudity was not lewd in the absence of\n\nsalacious conduct by the young subjects, the supreme court said:\n\n [T]he scenes depicted in the videotapes show full frontal nudity of C.G. One of the\n photographs featured on the website partially shows C.G.\u2019s breast; another\n photograph shows C.G.\u2019s pubic area. Since C.G. was thirteen years old at the time of\n trial, it is clear that she was no older than thirteen years old at the time she was\n\n 3\n\f Cite as 2013 Ark. App. 725\n\n photographed and videotaped. There is substantial evidence from which the jury\n could conclude that the scenes depicted in the videotape and the photographs\n depicted on the website were \u201clewd\u201d . . . .\n\nCummings v. State, 353 Ark. 618, 630, 110 S.W.3d 272, 279 (2003). The supreme court also\n\nnoted in that case that a determination of lewdness is ultimately based on whether the\n\ncombined effect of the photograph is designed to elicit a sexual response in a pedophile\n\nviewer. See id. In this context, it is significant that appellant here admitted that he\n\nmasturbated while looking at the photographs in question, and identified which of them was\n\nhis \u201cfavorite\u201d for that purpose. Under this precedent, the photographs turned over to the\n\npolice provided both probable cause for the search of his home and sufficient evidence to\n\nsupport his revocation.1\n\n In point two, appellant argues that the second search warrant\u2014 to permit the Arkansas\n\nState Police Fusion Center to search the contents of the telephone seized in the search of\n\nappellant\u2019s home\u2014was void because it did not describe with particularity the items to be\n\nsearched. That is not an accurate statement of the facts. The second warrant did describe\n\nappellant\u2019s cell phone by appearance, model, and serial number. The description was precise.\n\nThe problem was that the officer typing the affidavit was using an earlier document as a form,\n\ncutting-and-pasting into it the information relevant to appellant\u2019s case. In the process of\n\ndoing so, the officer testified, he inadvertently left in some of the information from the\n\n\n 1\n Appellant also makes a First Amendment argument to the effect that the\ninterpretation of \u201clewd\u201d adopted by Arkansas courts infringes on First Amendment rights.\nAlthough appellant did argue below that the court was applying an overbroad definition, the\nFirst Amendment was not implicated, and appellant never argued below that the definition\nof lewd was constitutionally invalid. Thus, this argument is not preserved for appeal.\n\n 4\n\f Cite as 2013 Ark. App. 725\n\noriginal document that did not apply to appellant\u2019s cell phone. So, the defect at issue is not\n\nimprecision but instead is over-inclusion in that some information relating to a laptop\n\ncomputer and a defendant named Chiaello found its way into the warrant permitting the\n\nFusion Center to search appellant\u2019s phone.\n\n In reviewing the denial of a motion to suppress evidence, the appellate court conducts\n\na de novo review based on the totality of the circumstances set forth in the affidavit and will\n\nreverse only if the trial court\u2019s ruling is clearly against the preponderance of the evidence.\n\nCollins v. State, 2013 Ark. App. 399. Arkansas Rules of Criminal Procedure 13.1(b) and\n\n13.2(b) require that the application for a search warrant and the warrant describe with\n\nparticularity the persons or places to be searched and the persons or things to be seized. In\n\ndeciding whether a particular description is sufficient, reviewing courts must use common\n\nsense and not subject the description to hypercritical review. Simmons v. State, 2009 Ark.\n\nApp. 705. Here, the record shows that appellant\u2019s cell phone was already in the possession\n\nof the Fusion Center when the warrant to search its contents was being typed. Thus, there\n\nwas no danger of anything being seized that had not already been seized by the government,\n\nand there is no allegation or indication that any of the evidence introduced at the hearing\n\ncame from any source other than appellant\u2019s cell phone. Under these circumstances, we hold\n\nthat the typographical errors posed no invasive threat that the State would seize property that\n\nwas not already in its possession, and appellant suffered no prejudice.\n\n Affirmed.\n HARRISON and WYNNE, JJ., agree.\n Rebekah J. Kennedy, for appellant.\n Dustin McDaniel, Att\u2019y Gen., by: Eileen W. Harrison, Ass\u2019t Att\u2019y Gen., for appellee.\n\n 5\n\f"} -{"text": " STATE OF MICHIGAN\n\n COURT OF APPEALS\n\n\nDEBORAH FUQUA, also known as DEBORAH UNPUBLISHED\nFUQUA-FREY, July 12, 2018\n\n Plaintiff-Appellant,\n\nv No. 336418\n Wayne Circuit Court\nDAVID GOLDSTEIN, LC No. 15-016748-NM\n\n Defendant-Appellee.\n\n\nBefore: BORRELLO, P.J., and SHAPIRO and TUKEL, JJ.\n\nPER CURIAM.\n\n In this civil matter raising claims against an attorney, plaintiff appeals as of right from the\ntrial court\u2019s order that granted summary disposition of Count IV of her first amended complaint\nagainst defendant and rejected her second amended complaint as improperly filed. The trial\ncourt previously granted summary disposition in defendant\u2019s favor with respect to the four other\ncounts of plaintiff\u2019s amended complaint. The trial court also denied plaintiff\u2019s motions to\nreconsider both of these decisions. We affirm in part, reverse in part, and remand for further\nproceedings.\n\n I. BASIC FACTS\n\n Plaintiff retained defendant to obtain mortgage modifications through filing for\nbankruptcy. Defendant indeed filed a petition for bankruptcy on plaintiff\u2019s behalf in the United\nStates Bankruptcy Court for the Eastern District of Michigan. The attorney-client relationship\ndevolved, however, causing defendant to seek to withdraw from the matter. At a hearing held on\nDecember 19, 2013, plaintiff, through her then-boyfriend (now current husband), David Frey,\nrepresented to the judge presiding over the bankruptcy proceeding that she no longer wanted\ndefendant to represent her. The judge stated that he would permit defendant to withdraw. An\norder memorializing this decision was entered four days later, on December 23, 2013.\n\n Plaintiff filed the instant suit on December 22, 2015. After defendant moved for\nsummary disposition, plaintiff filed an amended complaint raising five counts. The trial court\nruled that four of these five counts sounded in legal malpractice. The trial court further held that\nany such malpractice claim accrued on December 19, 2013, the date the bankruptcy judge held\nthe hearing regarding defendant\u2019s withdrawal. Thus, the trial court dismissed these counts\n\n -1-\n\f(Counts I, II, III, and V)1 of the amended complaint, finding that the two-year statute of\nlimitations applicable to malpractice claims, MCL 600.5805(6), had expired three days before\nplaintiff filed suit. The trial court directed defendant to either file an answer to Count IV of the\namended complaint or file a second dispositive motion addressing that count. Defendant then\nsought summary disposition on the remaining Count IV (labeled \u201cCollusion\u201d), and the trial court\nultimately granted the motion. The trial court rejected plaintiff\u2019s motions for reconsideration of\nits decisions and also plaintiff\u2019s attempt to amend her complaint a second time without leave of\nthe court to do so. The instant appeal followed.\n\n II. SUMMARY DISPOSITION\n\n Because, when the trial court granted defendant\u2019s motion for summary disposition, it was\nruling on the validity of plaintiff\u2019s claims contained in her first amended complaint, that is the\ncomplaint we will address.\n\n A. PLAINTIFF\u2019S MALPRACTICE CLAIM\n\n Plaintiff first argues that the trial court erred when it concluded that her legal malpractice\nclaim (or claims) accrued on December 19, 2013, rendering her complaint, at least to the extent it\nalleges legal malpractice, untimely. We conclude that any legal malpractice claims accrued on\nDecember 19, 2013, which means that plaintiff raising any such claims on December 22, 2015\nwas untimely.\n\n \u201cThis Court reviews the grant or denial of summary disposition de novo to determine if\nthe moving party is entitled to judgment as a matter of law. In making this determination, the\nCourt reviews the entire record to determine whether defendant was entitled to summary\ndisposition.\u201d Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). \u201cWhether a claim\nis barred by a statute of limitations is a question of law that this Court reviews de novo.\u201d Scherer\nv Hellstrom, 270 Mich App 458, 461; 716 NW2d 307 (2006). A motion for summary disposition\nchallenging whether a claim is barred by the applicable statute of limitations is properly brought\nunder MCR 2.116(C)(7). Levy v Martin, 463 Mich 478, 489 n 19; 620 NW2d 292 (2001).\n\n A party may support a motion under MCR 2.116(C)(7) by affidavits,\n depositions, admissions, or other documentary evidence. If such material is\n submitted, it must be considered. MCR 2.116(G)(5). Moreover, the substance or\n content of the supporting proofs must be admissible in evidence. Unlike a motion\n under subsection (C)(10), a movant under MCR 2.116(C)(7) is not required to file\n supportive material, and the opposing party need not reply with supportive\n material. The contents of the complaint are accepted as true unless contradicted\n by documentation submitted by the movant. [Maiden, 461 Mich at 119 (citation\n omitted).]\n\n\n\n1\n Count I was for professional malpractice, Count II was for breach of contract, Count III was for\nfraud and misrepresentation, and Count V was for breach of fiduciary duty.\n\n\n -2-\n\f A claim alleging legal malpractice must be brought either within two years after the claim\nfirst accrued or within six months after the plaintiff discovered or should have discovered the\nexistence of the claim. MCL 600.5805(6); MCL 600.5838(1) and (2); Kloian v Schwartz, 272\nMich App 232, 235; 725 NW2d 671 (2006). In this matter, plaintiff\u2019s suit was filed on\nDecember 22, 2015. Defendant argues that the suit alleges only legal malpractice, and that the\nclaim accrued on December 19, 2013, thus making her suit three days too late.2 Plaintiff\ncontends that to the extent her suit alleges legal malpractice, any such claim accrued on\nDecember 23, 2013, making her complaint timely.3 The trial court agreed with defendant, and\nwas correct to do so.\n\n Pursuant to MCL 600.5838(1):\n\n Except as otherwise provided in [MCL 600.]5838a or [MCL 600.]5838b, a claim\n based on the malpractice of a person who is, or holds himself or herself out to be,\n a member of a state licensed profession accrues at the time that person\n discontinues serving the plaintiff in a professional or pseudoprofessional capacity\n as to the matters out of which the claim for malpractice arose, regardless of the\n time the plaintiff discovers or otherwise has knowledge of the claim.\n\n \u201cSpecial rules have been developed in an effort to determine exactly when an attorney\n\u2018discontinues serving the plaintiff in a professional . . . capacity\u2019 for purposes of the accrual\nstatute.\u201d Kloian, 272 Mich App at 237. \u201cFor example, this Court has stated that an attorney\u2019s\nrepresentation of a client generally continues until the attorney is relieved of that obligation by\nthe client or the court.\u201d Id, citing Mitchell v Dougherty, 249 Mich App 668, 683; 644 NW2d 391\n(2002) (emphasis added). In Hooper v Lewis, 191 Mich App 312; 477 NW2d 114 (1991), the\nplaintiff, Joseph C. Hooper, Jr., had retained an attorney to represent him in an estate matter. Id.\nat 313. A settlement was reached, but a dispute arose between Hooper, his attorneys, and the\nbank responsible for preparing final accountings. Id. On June 17, 1986, Hooper wrote his\nattorneys and explained that they were no longer authorized to act on his behalf. Id. at 313-314.\nThe attorneys then moved to withdraw from the matter, and on October 9, 1986, the trial court\nentered an order permitting the withdrawal. Id. at 314. Hooper filed suit for malpractice on\nOctober 6, 1988. Id.\n\n Hooper contended, as does plaintiff here, that the claim accrued \u201cwhen the [trial] court\nentered the order allowing withdrawal.\u201d Id. Hooper\u2019s former attorneys contended that any\nmalpractice claim accrued months earlier, \u201cno later than June 17, 1986, when [Hooper] wrote the\nletter effectively discharging the firm.\u201d Id. The trial court agreed that the suit was untimely, and\n\n\n2\n No party contends that the six-month \u201cdiscovery rule,\u201d see Kloian, 272 Mich App at 235, is\napplicable in this case.\n3\n The nature of plaintiff\u2019s various claims is a separate question discussed later in this opinion.\nBut as will be discussed, only Count I of plaintiff\u2019s amended complaint states a claim of legal\nmalpractice. Thus, the discussion of the date plaintiff\u2019s legal malpractice claim accrued is\nrelevant only to Count I of plaintiff\u2019s amended complaint.\n\n\n -3-\n\fthis Court affirmed. Id. at 314-315. This Court held that \u201c[a]n attorney discontinues serving a\nclient, for purposes of the statute of limitations, when then attorney is relieved of the obligation\nto serve by either the client or the court.\u201d Id. at 315 (emphasis added). This rule governed\nnotwithstanding the parties\u2019 retainer agreement, which provided that \u201c \u2018termination by Client\npursuant to this paragraph shall not be effective until Client has approved a Stipulation and an\nOrder allowing Attorney to withdraw as counsel of record in any legal proceedings within the\nscope of this Agreement.\u2019 \u201d Id. As a result, even in light of the parties\u2019 contract, the attorneys\nwere discharged in June 1986 for purposes of the statute of limitations, when Hooper terminated\ntheir authority to represent him. Id. at 315-316. Importantly, \u201c[n]o additional court action was\nnecessary to effectuate that discharge.\u201d Id. at 316.\n\n Hooper controls the outcome in the present matter. At a hearing in federal bankruptcy\ncourt held on December 19, 2013, plaintiff, through Frey, represented to the court that she no\nlonger wanted defendant to represent her in the bankruptcy matter. The bankruptcy judge\nexplained that he would \u201cgrant the motion to permit [defendant] to withdraw and that\u2019s without\nany prejudice to what other claims [plaintiff] may have against him.\u201d Clearly, the professional\nrelationship was over at that point. Plaintiff discharged defendant on December 19, 2013, and\n\u201c[n]o additional court action was necessary to effectuate that discharge.\u201d Id. The fact that a\nwritten order granting the motion was not entered until four days later is simply not relevant. Id.\n\n Consequently, because plaintiff\u2019s original complaint was filed more than two years after\nany claim for malpractice accrued, those claims are barred by the statute of limitations.\n\n B. PLAINTIFF\u2019S OTHER CLAIMS\n\n Plaintiff next argues that the trial court erred by dismissing Counts II through V of her\namended complaint based on its conclusion that Counts II, III, and V were mislabeled claims of\nlegal malpractice. We agree.\n\n To the extent the trial court\u2019s decisions rest on a determination that the claims were\nbarred because they all sounded in malpractice and were therefore time-barred, we construe the\nmotion as having been decided pursuant to MCR 2.116(C)(7). See Bryant v Oakpointe Villa\nNursing Centre, 471 Mich 411, 419; 684 NW2d 864 (2004). To the extent the trial court\u2019s\ndecision rested on an examination of whether the complaint stated a claim upon which relief\ncould be granted (i.e., the legal sufficiency of the allegations of the complaint), we view the\nmotion as having been decided under MCR 2.116(C)(8). Maiden, 461 Mich at 119-120. As our\nSupreme Court explained in Maiden:\n\n A motion under MCR 2.116(C)(8) tests the legal sufficiency of the\n complaint. All well-pleaded factual allegations are accepted as true and construed\n in a light most favorable to the nonmovant. A motion under MCR 2.116(C)(8)\n may be granted only where the claims alleged are so clearly unenforceable as a\n matter of law that no factual development could possibly justify recovery. When\n deciding a motion brought under this section, a court considers only the pleadings.\n [Quotation marks and citations omitted.]\n\n\n\n -4-\n\f \u201cCourts are not bound by the labels that parties attach to their claims.\u201d Buhalis v Trinity\nContinuing Care Servs, 296 Mich App 685, 691; 822 NW2d 254 (2012). \u201c[I]t is well settled that\nthe gravamen of an action is determined by reading the complaint as a whole, and by looking\nbeyond mere procedural labels to determine the exact nature of the claim.\u201d Id. at 691-692\n(quotation marks and citation omitted). Thus, while plaintiff\u2019s amended complaint ostensibly\npleaded five different counts under five different theories, this Court must examine the substance\nof each count to determine what is truly alleged. Ultimately, the question is whether plaintiff\u2019s\ncomplaint pleads anything other than legal malpractice. The elements of legal malpractice are\n\u201c(1) the existence of an attorney-client relationship,\u201d \u201c(2) negligence in the legal representation\nof the plaintiff,\u201d \u201c(3) that the negligence was a proximate cause of an injury,\u201d and \u201c(4) the fact\nand extent of the injury alleged.\u201d Bowden v Gannaway, 310 Mich App 499, 503; 871 NW2d 893\n(2015) (quotation marks and citation omitted; emphasis added). We conclude that the trial court\nerred because it failed to recognize that Counts II, III, and V of the complaint do not simply\nallege negligence but, rather, intentional and other conduct by defendant that caused harm to\nplaintiff.\n\n Plaintiff titled her first count as alleging malpractice and breach of fiduciary duty.\nHowever, she does not dispute that this count is truly a claim of legal malpractice. As already\ndiscussed, the two-year statute of limitations stated in MCL 600.5805(6) applies, and the claim\naccrued on December 19, 2013, making plaintiff\u2019s complaint, which was filed on December 22,\n2013, untimely. Accordingly, the trial court properly dismissed this count of the complaint.\n\n Count II of the amended complaint is titled as a claim for breach of contract. Plaintiff\nalleged that in her retention agreement with defendant, she \u201cspecifically contracted with\nDefendant to obtain mortgage modifications aka cram downs\u201d for plaintiff. Plaintiff further\nalleged that defendant breached the agreement by filing for Chapter 7 bankruptcy, despite\nknowing that plaintiff could only obtain mortgage modifications by filing for Chapter 13\nbankruptcy, rather than Chapter 7 bankruptcy.\n\n Generally, \u201cclaims against attorneys brought on the basis of inadequate representation\nsound in tort and are governed by the malpractice statute of limitations, even though a plaintiff\nmay assert that the attorney\u2019s actions breached a contract.\u201d Aldred v O\u2019Hara-Bruce, 184 Mich\nApp 488, 490; 458 NW2d 671 (1990). Attorneys may be held liable under a breach-of-contract\ntheory, but only when the attorney has breached a \u201cspecial agreement\u201d to perform a specific act.\nBrownell v Garber, 199 Mich App 519, 524-526; 503 NW2d 81 (1993); Barnard v Dilley, 134\nMich App 375, 378; 350 NW2d 887 (1984). In Brownell, this Court explained:\n\n \u201cA lawyer is not an insurer of the result in a case in which he is employed, unless\n he makes a special contract to that effect, and for that purpose. Neither is there\n any implied contract, when he is employed in a case, or any matter of legal\n business, that he will bring to bear learning, skill, or ability beyond that of the\n average of his profession. Nor can more than ordinary care and diligence be\n required of him, without a special contract is made requiring it.\u201d [Brownell, 199\n Mich App at 525, quoting Babbitt v Bumpus, 73 Mich 331, 337-338; 41 NW 417\n (1889) (emphasis added).]\n\n\n\n -5-\n\f If one glosses over the specific allegations of plaintiff\u2019s amended complaint, one would\nbe left with the general impression that plaintiff is alleging that defendant failed to provide\ncompetent services in that he chose the wrong chapter under which to file bankruptcy.4 If read in\nthis manner, the complaint would seem to allege no more than negligent representation by\ndefendant\u2014or in other words, legal malpractice. Bowden, 310 Mich App at 503; Brownell, 199\nMich App at 526.\n\n However, plaintiff\u2019s complaint goes beyond simply alleging that defendant was\nnegligent. Instead, plaintiff alleges that she informed defendant when they first met that her sole\npurpose in declaring bankruptcy was to obtain mortgage modifications. Plaintiff alleged she\n\u201cspecifically contracted with Defendant to obtain mortgage modifications,\u201d which defendant\nwould obtain by filing under \u201cthe proper bankruptcy\u201d chapter. She alleged that defendant\nbreached this agreement when he filed under Chapter 7, which did not allow for such mortgage\nmodifications.\n\n We conclude that plaintiff has pleaded a breach of contract claim against defendant.\nTaken as a whole, plaintiff did not allege that defendant simply made an error or \u201cfailed to\nexercise the requisite skill\u201d in his representation of plaintiff. Brownell, 199 Mich App at 524.\nRather, plaintiff alleges that defendant agreed to perform a specific task: \u201cto obtain mortgage\nmodifications.\u201d However, according to plaintiff\u2019s complaint, defendant\u2019s actions (filing Chapter\n7 bankruptcy) made it impossible to obtain the desired result. Thus, plaintiff\u2019s complaint does\nnot simply allege that defendant\u2019s negligence resulted in an undesirable outcome, as would be\nthe case in an ordinary legal malpractice suit. Id. Rather, the complaint alleges that defendant\nwarrantied that plaintiff would obtain the result she desired when in reality defendant knew that\nwas untrue. Thus, the complaint alleges the type of promise discussed in Brownell and\nBabbitt\u2014a promise that a specific result could be obtained\u2014that properly pleads a claim of\nbreach of contract against an attorney. As a properly pleaded claim of breach of contract, the\nstatute of limitations applicable to malpractice claims does not apply.\n\n The limitations period for a breach of contract claim is 6 years. MCL 600.5807(8);\nMiller-Davis Co v Ahrens Const, Inc, 489 Mich 355, 357; 802 NW2d 33 (2011). Thus, because\nplaintiff retained defendant in May 2012, it is clear that the six-year limitations period had not\nlapsed by the time plaintiff filed her complaint in December 2015, and the trial court erred when\nit dismissed this count on the basis that it was time-barred.\n\n\n\n4\n Indeed, plaintiff in her amended complaint also alleges that defendant agreed to \u201cfile the proper\nbankruptcy to obtain mortgage modifications for Plaintiff.\u201d While this particular allegation\nappears to sound in malpractice because the \u201cagreement\u201d merely is for defendant to do\nsomething \u201cproper[ly],\u201d as opposed to agreeing to achieve a particular result, this is not fatal to\nplaintiff\u2019s claim. That is because in reviewing a motion under MCR 2.116(C)(8), we must view\nthe complaint in its entirety and in a light most favorable to plaintiff. Maiden, 461 Mich at 119.\nIn this case, plaintiff also alleged that defendant specifically agreed to obtain mortgage\nmodifications for her, which is a contract for a particular result.\n\n\n -6-\n\f The trial court also failed to appreciate the true nature of plaintiff\u2019s third count, which\nalleges fraud in the form of an intentional misrepresentation. A claim of fraudulent\nmisrepresentation requires proof of six elements: (1) that the defendant made a material\nrepresentation, (2) that was false, (3) that the defendant knew the representation was false, or\nmade it \u201crecklessly, without any knowledge of its truth, and as a positive assertion[,]\u201d (4) that the\ndefendant intended the plaintiff to act in reliance on the representation, (5) that the plaintiff did,\nin fact, act in reliance on the representation, and (6) that the plaintiff suffered injury as a result.\nHord v Environmental Research Institute of Mich, 463 Mich 399, 404; 617 NW2d 543 (2000).\nPlaintiff\u2019s amended complaint alleges:\n\n 27. Defendant advised Plaintiff and placed her in a [C]hapter 7 bankruptcy with\n full knowledge that she would not be able to obtain mortgage modifications aka\n cram downs with the bank that she contracted with Defendant to do and that\n ultimately she would lose her houses.\n\n 28. Defendant stated when Plaintiff was considering retaining him that she only\n qualified for a [C]hapter 7 and that she could obtain mortgage modifications aka\n cram downs through a [C]hapter 7 when he had fill [sic, full] knowledge that she\n could not do so.\n\n 29. Defendant knowingly made this statement knowing that it was a material\n misrepresentation.\n\n 30. Defendant knowingly made this statement knowing that it was a false\n representation.\n\n 31. At the time Defendant made the statement he did so knowing it was false, or\n he made it recklessly, without knowledge of it\u2019s [sic] truth and as a positive\n assertion.\n\n 32. Defendant made it at the time with the intent that Plaintiff should act thereon.\n\n 33. Plaintiff acted thereon [sic] Defendant\u2019s representation in reliance thereon\n and was injured as a result of her detrimental reliance causing her financial and\n emotion[al] damages among other damages.\n\n Clearly, plaintiff\u2019s complaint tracks the elements of fraud. Plaintiff alleges that defendant\nmade a misrepresentation (that she could obtain mortgage modifications by filing for Chapter 7\nbankruptcy), knowing this statement was false, and intending that plaintiff rely on the statement.\nPlaintiff alleges that she relied on the statement (i.e., she filed for Chapter 7 bankruptcy), and\nthat by doing so, she suffered injury. These are precisely the sort of allegations to plead a claim\nof fraudulent misrepresentation. Hord, 463 Mich at 404.\n\n In Brownell, this Court explained that \u201cthe interest involved in a claim for damages\narising out of a fraudulent misrepresentation differs from the interest involved in a case alleging\nthat a professional breached the applicable standard of care. Simply put, fraud is distinct from\nmalpractice.\u201d Brownell, 199 Mich App at 532. \u201cFraud is no less actionable because it is\n\n -7-\n\fcommitted by an attorney with whom the plaintiff has an attorney-client relationship.\u201d Id.\n\u201c[W]hen a complaint alleges not only malpractice but also all the necessary elements of fraud,\nthe statute of limitations governing fraud actions will apply to the fraud count and, if such count\nis not barred, the plaintiff may proceed on that cou[n]t to collect damages proximately caused by\nthe alleged fraud.\u201d Id. at 533. In Barnard, this Court found that the plaintiff had stated an\nactionable claim for fraud by contending that the defendant either knew a property settlement\nwould have adverse tax consequences but represented otherwise to the plaintiff, or never\ninvestigated the tax consequences of the settlement \u201cnotwithstanding explicit representations to\nthe contrary.\u201d Id. at 533-534. Similarly, in this case, plaintiff alleged that she was misled by an\nattorney who, although he knew it to be false, told plaintiff that she could obtain mortgage\nmodifications by filing for Chapter 7 bankruptcy. Plaintiff stated a claim for fraud, and thus, the\nstatute of limitations for legal malpractice claims does not control Count III of the amended\ncomplaint. Indeed, the period of limitations for a claim of fraud is six years. See Kuebler v\nEquitable Life Assurance Society of the US, 219 Mich App 1, 6; 555 NW2d 496 (1996), citing\nMCL 600.5813. Accordingly, the trial court erred when it dismissed this count on the basis of\nthe claim being time-barred.\n\n Before examining plaintiff\u2019s fourth count, we address Count V of the amended\ncomplaint, which is titled as one alleging a breach of fiduciary duty. In this count, plaintiff\nalleges:\n\n 41. Defendant had a fiduciary duty as a member of the State Bar separate from\n the attorney[-]client relationship and not to mislead and intentionally misrepresent\n Plaintiff into believing that filing a [C]hapter 7 bankruptcy would accomplish her\n goal of obtaining mortgage modifications aka cram downs on her real estate\n mortgages and allow her to restructure her financial affairs and retain ownership\n of her real estate properties.\n\n 42. Defendant made these intentional misrepresentations with full knowledge that\n Plaintiff could not obtain mortgage modifications aka cram downs in a [C]hapter\n 7 and with full knowledge that she would ultimately lose her real estate properties\n through foreclosure, her future income stream of rental income, and that she\n would end up in a worse financial position than when she first interviewed\n defendant.\n\n 43. Defendant breached these fiduciary duties when he lied to Plaintiff and\n induced her to retain him on the pretext that she did not qualify to file either a\n [C]hapter 11, or 13, and that she could accomplish her objectives by filing a\n [C]hapter 7.\n\n 44. Plaintiff was injured as a result of her reliance on Defendant\u2019s false\n representations.\n\n As this Court explained in Prentis Family Foundation v Barbara Ann Karmanos Cancer\nInst, 266 Mich App 39, 43-44; 698 NW2d 900 (2005):\n\n\n\n -8-\n\f When a fiduciary relationship exists, the fiduciary has a duty to act for the\n benefit of the principal regarding matters within the scope of the relationship.\n Whether a duty exists is a question of law for the court to decide. A fiduciary\n relationship arises from the reposing of faith, confidence, and trust and the\n reliance of one on the judgment and advice of another. However, the placement\n of trust, confidence, and reliance must be reasonable, and placement is\n unreasonable if the interests of the client and the nonclient are adverse or even\n potentially adverse. [Quotation marks, brackets, and citations omitted.]\n\n\u201cThe conduct required to constitute a breach of fiduciary duty requires a more culpable state of\nmind than the negligence required for malpractice.\u201d Id. at 47. \u201cDamages may be obtained for a\nbreach of fiduciary duty when a position of influence has been acquired and abused, or when\nconfidence has been reposed and betrayed.\u201d Id. (quotation marks and citation omitted).\n\n In the present matter, plaintiff did not simply allege a breach of fiduciary duty claim\npremised on negligence by defendant. Rather, plaintiff alleges that defendant intentionally\nmisled her into filing for Chapter 7 bankruptcy, in violation of a fiduciary duty owed to her\nthrough the nature of the attorney-client relationship. The existence of an attorney-client\nrelationship does not preclude a claim for breach of fiduciary duty. See id. Rather, so long as\nplaintiff alleges the existence of the more culpable state of mind required to state such a claim,\nher claim is one for breach of fiduciary duty, and not one sounding in legal malpractice. By\nalleging intentional misconduct by defendant, rather than negligence, plaintiff has pleaded a\nclaim for breach of fiduciary duty. Accordingly, the trial court erred when it concluded that\nCount V of the complaint was a mislabeled malpractice claim. We note the statute of limitations\nprovides for a three-year limitations period for a claim of breach of fiduciary duty, id., citing\nMCL 600.5805(10), instead of a two-year limitations period for a malpractice claim. Although\nwe cannot rule definitively that this claim is not time-barred, we nonetheless reverse the trial\ncourt\u2019s decision because the trial court relied on its belief that the count was time-barred as a\nmalpractice claim. 5\n\n Returning to Count IV of the complaint, which plaintiff titled as a count of \u201ccollusion,\u201d\nplaintiff alleged:\n\n 36. Defendant made an agreement with [the] trustee to place her in improper\n bankruptcies, thereby depriving Plaintiff of her legal rights, in order to gain\n benefit for themselves to Plaintiff\u2019s detriment.\n\n\n\n\n5\n Because plaintiff filed her complaint on December 22, 2015, any such claim would have to\nhave accrued no earlier than December 22, 2012, in order to be viable. While we recognize that\nplaintiff retained defendant in May 2012, because it was not argued at the trial court, we offer no\nopinion on when this claim for breach of fiduciary duty actually accrued. Instead, our holding\nsimply is that when the trial court ruled that the claim was time-barred as a result of it sounding\nin legal malpractice, the court erred.\n\n\n -9-\n\f 37. The agreement to manipulate Plaintiff\u2019s bankruptcy for their advantage was\n in and of itself a wrongful act.\n\n 38. Plaintiff was damaged as a result of the Defendant\u2019s collusion with [the]\n Trustee to manipulate Plaintiff\u2019s bankruptcy for their own personal benefit.\n\n There seems to be no dispute that Michigan does not recognize a claim of \u201ccollusion\u201d in\nthe civil context. But that fact is irrelevant. Again, courts are not bound by the label a party\nplaces on his or her claim. Buhalis, 296 Mich App 691. And given defendant\u2019s arguments\nbelow, the trial court\u2019s decision, and plaintiff\u2019s attempt to amend her complaint a second time, it\nis quite clear that all understand that this count is, in truth, a claim of civil conspiracy, which is\nrecognized in Michigan. See Advocacy Organization for Patients & Providers v Auto Club Ins\nAss\u2019n, 257 Mich App 365, 384; 670 NW2d 569 (2003), aff\u2019d 472 Mich 91 (2005). Thus,\nregardless of the label placed on the claim by plaintiff, the question is whether she stated a claim\nfor civil conspiracy.\n\n \u201cA civil conspiracy is a combination of two or more persons, by some concerted action,\nto accomplish a criminal or unlawful purpose, or to accomplish a lawful purpose by criminal or\nunlawful means.\u201d Id. (quotation marks and citation omitted). \u201cA claim for civil conspiracy may\nnot exist in the air; rather, it is necessary to prove a separate, actionable tort.\u201d Id. (quotation\nmarks and citation omitted). The trial court concluded, in part, that because all of plaintiff\u2019s\nother counts were time-barred legal malpractice claims, there did not exist an underlying tort on\nwhich to premise the civil conspiracy claim. However, for the reasons discussed above, plaintiff\nhas stated several claims that are not legal malpractice claims. Thus, this basis for the trial\ncourt\u2019s ruling no longer exists, and we reverse the grant of summary disposition on this civil\nconspiracy count.\n\n On appeal, defendant looks to plaintiff\u2019s second amended complaint (i.e., the complaint\nthat was rejected by the trial court) and argues that it fails to state a claim. Defendant explains\nthat \u201c[t]here\u2019s a lot that\u2019s wrong with [plaintiff\u2019s] conspiracy allegations. For one thing, they\u2019re\nfalse.\u201d Given that the trial court did not accept plaintiff\u2019s second amended complaint, the factual\nallegations of that complaint are simply not at issue, at least at this point in time. Perhaps\nplaintiff will be granted leave to file her second amended complaint pursuant to MCR\n2.118(A)(2) when the matter returns to the trial court. In any event, we decline to address the\nviability of any of the claims as presented in plaintiff\u2019s second amended complaint.\n\n In sum, while Count I of plaintiff\u2019s complaint is a legal malpractice claim that the trial\ncourt correctly concluded was time-barred, the remaining counts are not claims of legal\nmalpractice. Accordingly, while we affirm the dismissal of Count I of the complaint, we reverse\nthe trial court\u2019s decision to dismiss the remaining counts and remand for further proceedings\nconsistent our decision.\n\n III. PLAINTIFF\u2019S ATTEMPT TO FILE A SECOND AMENDED COMPLAINT\n\n Finally, plaintiff contends that the trial court abused its discretion by refusing to allow her\nto file a second amended complaint as a matter of course pursuant to MCR 2.118(A)(1). We\ndisagree. This Court reviews a trial court\u2019s decision whether to permit a party to amend a\n\n -10-\n\fpleading for an abuse of discretion. In re Kostin, 278 Mich App 47, 51; 748 NW2d 583 (2008).\n\u201c[A]n abuse of discretion occurs only when the trial court\u2019s decision is outside the range of\nreasonable and principled outcomes.\u201d Id. To the extent consideration of this issue requires this\nCourt to interpret a court rule, this Court\u2019s review is de novo. AFP Specialties, Inc v Vereyken,\n303 Mich App 497, 504; 844 NW2d 470 (2014).\n\n On October 13, 2016, the same day she filed a response to defendant\u2019s second motion for\nsummary disposition, plaintiff without leave of the court, filed a second amended complaint.\nThe second amended complaint purported to incorporate by reference the first amended\ncomplaint and listed only a single count, \u201cCount IV,\u201d which was now titled, \u201cCollusion/Civil\nConspiracy.\u201d6 Plaintiff contends that she was entitled to file a second amended complaint as a\nmatter of course pursuant to MCR 2.118(A)(1). This court rule states, \u201cA party may amend a\npleading once as a matter of course within 14 days after being served with a responsive pleading\nby an adverse party, or within 14 days after serving the pleading if it does not require a\nresponsive pleading.\u201d MCR 2.118(A)(1) (emphasis added). \u201cExcept as provided in subrule\n(A)(1), a party may amend a pleading only by leave of the court or by written consent of the\nadverse party.\u201d MCR 2.118(A)(2).\n\n Plaintiff fails to understand that the right to file an amended complaint under MCR\n2.118(A)(1) ends after one amendment. After a plaintiff has filed one amended complaint, there\nis no longer any right to file further amendments; rather, all further amendments must be by\nleave of the court. MCR 2.118(A)(1) and (2). Plaintiff\u2019s first amended complaint was the single\namendment she was permitted to file as a matter of course under MCR 2.118(A)(1). Therefore,\nthe trial court properly rejected plaintiff\u2019s attempt to file a second amended complaint as a matter\nof course, and it did not abuse its discretion.\n\n Affirmed in part, reversed in part, and remanded for further proceedings consistent with\nthis opinion. We do not retain jurisdiction. No taxable costs, as no party prevailed in full. MCR\n7.219.\n\n /s/ Stephen L. Borrello\n /s/ Douglas B. Shapiro\n /s/ Jonathan Tukel\n\n\n\n\n6\n Presumably, plaintiff was intending to merely replace Count IV in the first amended complaint\nwith this count.\n\n\n -11-\n\f"} -{"text": "\n799 S.W.2d 360 (1990)\nNick Davis BOYETT, Appellant,\nv.\nJo Ann BOYETT, Appellee.\nNo. B14-89-00953-CV.\nCourt of Appeals of Texas, Houston (14th Dist).\nOctober 11, 1990.\n*361 D. Channing Bradshaw, Pasadena, for appellant.\nBruce A. Baughman, Baytown, for appellee.\nBefore ROBERTSON, SEARS and DRAUGHN, JJ.\n\nOPINION\nDRAUGHN, Justice.\nThis is an action for reformation of a divorce decree based on an agreed property settlement. The divorce decree, in accordance with the agreement of the parties, awarded the appellee-wife fifty percent of her husband's total retirement benefits commencing on the date of his retirement. The appellant-husband, alleging mutual mistake, argues that the trial court erroneously failed to reform the decree so as to limit the wife's part to one-half of the community interest in the husband's retirement benefits. We affirm.\n*362 Appellant brings one point of error claiming that the trial court erred in entering judgment without correcting the value of appellant's retirement benefits in the decree. Appellant argues the evidence established that the parties intended to divide only the community interest in his retirement benefits as of the date of the divorce; and the decree, as signed, resulted in an improper divestment of his separate property benefits which will accrue based on his future employment. The provision of the decree in issue is as follows:\nThis Decree of Divorce shall be a \"qualified domestic relations order\" pursuant to section 414(p) of the Internal Revenue Code. In compliance with that provision, the following is ORDERED and specified:\n1. This qualified domestic relations order assigns a portion of the benefits payable in the Pension and Retirement Plan (\"the Plan\") at E.I. duPont de Nemours and Company, Incorporated, to JO ANN BOYETT in recognition of the existence of her marital rights in NICK DAVIS BOYETT's retirement benefits as defined by Texas law in Berry v. Berry, 647 S.W.2d 945 (Tex.1983).\n. . . . .\n4. On the date of this divorce, Participant's present accrued benefit for retirement at normal retirement age under the Plan with a joint and survivor annuity benefit is:\nAt age 58\u0097$1,721.00 per month;\nAt age 62\u0097$2,618.00 per month;\nAt age 65\u0097$2,859.00 per month.\n5. As part of a just and right division of the estate of the parties, the Court awards, assigns, and grants to Alternate Payee [Jo Ann Boyett] fifty percent (50%) of Participant's present accrued benefit.... Alternate Payee shall have the right to elect any form of benefits permitted by the Plan as of the date Alternate Payee elects to begin receiving benefits.\nAppellant, who was 41 years old at the time of divorce, argues that the numbers listed in the decree actually represent the total projected value of his retirement plan which will only accrue if appellant continues his employment until he reaches retirement age. He alleges that the correct discounted \"present accrued benefit\" of his retirement plan would be as follows:\nAt age 50\u0097$256.00 per month;\nAt age 65\u0097$1,022.00 per month.\nGenerally, agreed judgments, once rendered, are contracts between the parties that excuse error and operate to end all controversy between the parties. Wagner v. Warnasch, 156 Tex. 334, 339, 295 S.W.2d 890, 893 (1956). However, appellant correctly observes that an agreed judgment can be reformed for mutual mistake in the underlying agreement. To be entitled to reformation, a party must prove that there has been \"a definite agreement between the parties that has been misstated in the written memorandum because of a mistake common to both contracting parties.\" Champlin Oil & Refining Co. v. Chastain, 403 S.W.2d 376, 382 (Tex.1965). Marital property agreements, even if incorporated into a final divorce decree, are treated as contracts and the law of contracts then governs interpretation of the decree's legal force and meaning. Allen v. Allen, 717 S.W.2d 311, 313 (Tex.1986).\nAppellant contends that the incorporation of the incorrect value of his retirement fund makes the decree unenforceable. Labeling appellant's total future monthly retirement payment as his \"present accrued benefit\" created a latent ambiguity in the decree. Further, stating that the award was \"in recognition of the existence of [appellee's] marital rights in [appellant's] retirement benefits as defined in Berry v. Berry\" creates another ambiguity as Berry expressly disallows any award of postdivorce retirement benefits by the court as an improper invasion of separate property. Berry v. Berry, 647 S.W.2d 945, 947 (Tex. 1983). Resolution of the ambiguity turns on the intentions of the parties and the surrounding circumstances. Hutchings v. Bates, 406 S.W.2d 419, 420 (Tex.1966). Extrinsic evidence is admissible to clarify the surrounding circumstances. Johnson v. Johnson, 572 S.W.2d 364, 366 (Tex.Civ. App.\u0097Amarillo 1978, no writ).\n*363 Appellant's contentions, if true, clearly show a unilateral mistake on his part in providing the specific projected monthly payments, which represent the full future value of his retirement account, to his attorney for negotiation purposes. However, there is no evidence in the record at the hearing on appellant's motion to repudiate that the appellee agreed to receive only her community interest in the plan. Appellee testified that it was the agreement of the parties that she would receive one-half of appellant's monthly retirement payments, as represented to her, whenever he became eligible for them. There is no dispute that she was furnished the specific valuations enumerated in the decree, of which she was to receive one-half when they were paid, and it was on the basis of these specific amounts that she consented to the agreement. The fact that the figures furnished to appellee may have been erroneously referred to as appellant's \"present accrued benefit\" is of no consequence. There is no evidence to show that she would have consented to the considerably lower monthly amounts represented by the present community value of the payments. To the contrary, we find the wife's testimony reflects that she expected to receive one-half of the husband's total retirement benefits and that her acceptance of the agreement was grounded on receiving one-half of these specific monthly payments furnished by her husband. Supportive of this conclusion is the fact that she would have been entitled to the lesser monthly retirement payments as her portion of the community estate without the necessity of any agreement on her part. Also, her testimony that she never inquired as to the present discounted value of the retirement benefits representing the community interest in the fund buttresses the conclusion that she was persuaded to accept the agreement because of the specific amounts presented to her.\nConsequently, appellant's contention that appellee's share of his retirement benefits should be reduced due to a mutual mistake as to their correct value finds no support in the record. What is reflected in the record is ample testimonial evidence of a consensual agreement between the parties to equally divide the specific monthly pension amounts as set out in the final decree signed by the trial judge. Cluck v. Cluck, 699 S.W.2d 246, 249 (Tex.App.\u0097San Antonio 1985, writ ref'd n.r.e).\nAppellant argues further that it was an impermissible divestment of his separate property to award his wife one-half of his monthly retirement payments which included post-divorce increases to his retirement fund. See Berry v. Berry, 647 S.W.2d 945 (Tex.1983); Cameron v. Cameron, 641 S.W.2d 210 (Tex.1982); Eggemeyer v. Eggemeyer, 554 S.W.2d 137 (Tex. 1977). Appellant's reliance on these cases is misplaced. Divestiture of separate property is not allowed when the parties' community estate is divided by the court. A \"judicial divestiture of separate property would essentially disregard the constitutionally mandated distinction\" between community and separate property. Cameron, 641 S.W.2d at 213 (emphasis added). Here, however, we have an agreed property settlement.\nAppellant's position finds little precedential support in case law. Rather, parties to a divorce are free to bargain away their separate property in settlement agreements. Walker v. Walker, 691 S.W.2d 102, 105 (Tex.App.\u0097San Antonio 1985, no writ); Simpson v. Simpson, 387 S.W.2d 717, 720 (Tex.Civ.App.\u0097Eastland 1965, no writ). The Texas Family Code authorizes written agreements concerning the division of a couple's property and liabilities and, in the subsequent divorce proceeding, the terms of the agreement are binding on the court unless it finds that the agreement was not just and fair. TEX.FAM. CODE ANN. \u00a7 3.631 (Vernon Supp.1990); Patino v. Patino, 687 S.W.2d 799, 802 (Tex.App.\u0097San Antonio 1985, no writ). Thus, with a binding settlement agreement before it, the court may divide the estates of the parties by setting forth the property settlement agreement in the decree or incorporating the agreement by reference into the decree. McCaskill v. McCaskill, 761 S.W.2d 470, 473 (Tex.App.\u0097Corpus Christi 1988, writ denied). Here the court *364 did the former finding the agreement to be just and fair and we find no abuse of discretion in his decision.\nThere can be no claims of unconstitutional divestment of separate property when stipulations or agreed settlements are before the trial court. Court approval of such agreements does not operate as a divestiture of a party's separate property. The court's approval and signature merely ratifies and confirms the prior actions of the parties in so dividing their property. Simpson, 387 S.W.2d at 720. In this regard, the Texas Supreme Court has held that court approval of a settlement agreement granting future support payments to the wife should not be invalidated as alimony. Francis v. Francis, 412 S.W.2d 29, 33 (Tex.1967).\nThere is sufficient evidence in the record to find that the parties intended to enter into a binding settlement agreement and that the divorce decree reflected that agreement. Appellant's belated assertion that his retirement benefits were incorrectly valued, while perhaps true, does not change the final result. He may well have made a mistake, but that does not make the mistake mutual and binding on his wife. The appellant has shown no evidence of mutual mistake that would merit a reformation. We overrule appellant's point of error and affirm the judgment.\n"} -{"text": "\n683 N.W.2d 145 (2004)\nSMITH\nv.\nELY.\nNo. 125751.\nSupreme Court of Michigan.\nJuly 8, 2004.\nSC: 125751. COA: 241587.\nOn order of the Court, the application for leave to appeal the January 29, 2004 judgment of the Court of Appeals is considered and, pursuant to MCR 7.302(G)(1), in lieu of granting leave to appeal, we REVERSE the judgments of the trial court and the Court of Appeals in part and REINSTATE the jury award of exemplary damages. An award of exemplary damages is justifiable where it is shown that defendant's conduct was malicious, or so willful and wanton as to demonstrate a reckless disregard of the plaintiff's right. Bailey v. Graves, 411 Mich. 510, 515, 309 N.W.2d 166 (1981). Under the circumstances of this case, the trial court clearly erred in concluding that plaintiff had failed to prove that defendant's conduct was malicious or willful and wanton. In all other respects, leave to appeal is DENIED.\n"} -{"text": "\n8 Cal.App.3d 636 (1970)\n87 Cal. Rptr. 754\nLAURA M. WILLIAMS, Plaintiff and Respondent,\nv.\nDWIGHT G. WILLIAMS, Defendant and Appellant.\nDocket No. 26403.\nCourt of Appeals of California, First District, Division One.\nJune 11, 1970.\n*638 COUNSEL\nWalter H. Medak for Defendant and Appellant.\nSamuel P. McGeachy for Plaintiff and Respondent.\nOPINION\nMOLINARI, P.J.\nDefendant appeals from that part of a judgment obtained by plaintiff providing for the revocation of a stay of a writ of execution theretofore obtained by defendant.\nPlaintiff wife was granted an interlocutory judgment and decree of divorce from defendant husband on April 26, 1966. The decree provided that defendant was to pay plaintiff $140 alimony and $60 child support monthly. It also awarded a community property apartment house in Martinez two-fifths to plaintiff and three-fifths to defendant, and provided that the trust deed installments on said property should be assumed and paid by the parties in the same proportions.\nFollowing the entry of the interlocutory decree, defendant, under an oral agreement with plaintiff, assumed management and control of the apartment house. During the years 1966 and 1967 the expenditures for the operation and maintenance of the apartment house exceeded the income, the net deficit being the sum of $10,848. This deficit was discharged by defendant's unilateral payment of taxes, trust deed payments, repairs and improvements.\nDefendant made none of the support payments provided for in the divorce decree. This failure was admitted by defendant without explanation or excuse. The total support delinquency amounted to $4,610.90. Plaintiff secured an ex parte order for a writ of execution towards satisfaction of this delinquency. Defendant then filed a motion to stay the writ of execution and obtained a temporary restraining order against its enforcement. Pursuant to an order to show cause the matter came on for hearing at the conclusion of which the trial court ordered that its prior stay of execution be vacated.\nIn the proceedings below defendant argued that pursuant to Code of Civil Procedure section 440 plaintiff's share of the apartment house deficit *639 should be set off against her support arrearages. Code of Civil Procedure section 440, in pertinent part, provides as follows: \"When cross-demands have existed between persons under such circumstances that, if one had brought an action against the other, a counterclaim could have been set up, the two demands shall be deemed compensated so far as they equal each other, ...\" On appeal he argues that the support obligation and the apartment house deficit are \"demands\" compensable within the purview of section 440.\n(1) Considering defendant's contention that his alimony obligation may be set off against plaintiff's indebtedness to him, we observe that it is well settled in this state that there can be no such offset. (Keck v. Keck, 219 Cal. 316, 320 [26 P.2d 300]; Zaragoza v. Zaragoza, 48 Cal. App.2d 27, 28-29 [119 P.2d 162].) The rationale behind such rule is that alimony is not an ordinary debt but a marital duty of the husband to support his wife. To allow such a setoff would amount to a retroactive alteration of alimony payments or debts accrued and due in contravention of Civil Code section 139 and its proscription of such retroactive alteration.[1] (Keck v. Keck, supra, at pp. 319-321; Zaragoza v. Zaragoza, supra.) In both Keck and Zaragoza it was specifically held that a husband is not entitled to an automatic setoff pursuant to Code of Civil Procedure section 440.\nDefendant's reliance on Murchison v. Murchison, 219 Cal. App.2d 600 [33 Cal. Rptr. 285], is misplaced. There, the husband was allowed to offset a monthly $300 payment to the wife under a property settlement agreement against taxes paid by the husband for the wife on the rationale that the monthy payment was a contractual obligation rather than alimony. (P. 605.)\nDefendant also urges that his child support arrearages should be set off against plaintiff's debt to him. Although there is no California case dealing directly with the issue, it seems clear that the rationale of Keck and Zaragoza should apply. (2) An order for child support, like alimony, is not an \"ordinary debt\" but rather a court-imposed obligation to provide for one's child. (3) Moreover, Civil Code section 139 prohibits retroactive alteration of child support as well as alimony.\nIn view of the nature of child support and the strong public policy favoring such support in this state we see no necessity, in view of the rationale of Keck and Zaragoza, to look to other jurisdictions for guidance. We do *640 note, however, that the case of Wheeler v. Wheeler, 37 Wn.2d 159 [222 P.2d 400], upon which defendant relies, is not apposite to the case before us. That court allowed a setoff against prospective support obligations in a situation wherein the proceeds against which the husband was accorded credit were in fact used to support the child.\nThere are, moreover, other significant reasons why defendant may not set off the alleged debt against child support arrearages. (4) Code of Civil Procedure section 440 contemplates compensated cross-demands by one party against the other. Indeed, child support is not the type of cross-demand contemplated by section 440 because the obligation is due to the child rather than the mother. If it be considered a debt it is, in essence, a debt owing to the child since a father's duty to support his minor children is a continuing obligation \"during the minority of the children of the marriage.\" (Estate of Goulart, 218 Cal. App.2d 260, 263 [32 Cal. Rptr. 229, 6 A.L.R.3d 1380]; Civ. Code, \u00a7 138.) In essence, the parent, to whom such support is paid, is but a mere conduit for the disbursement of that support. Finally, the very nature of child support gravitates against the allowance of the setoff sought. Such support is strongly favored in the law and statutes providing for it are to be liberally construed to promote their purpose of protecting the family. (See Estate of Filtzer, 33 Cal.2d 776, 783 [205 P.2d 377]; Harlan v. Harlan, 154 Cal. 341, 350 [98 P. 32].) To allow the offset sought by defendant would frustrate both this purpose and the trial court's support order, since it would allow him to use child support funds to maintain property held in common by him and plaintiff.\n(5) Since defendant's only basis for such relief is the claimed offset against alimony and child support, in view of the foregoing we perceive no abuse of discretion on the part of the trial court in refusing to recall, quash or vacate the writ of execution. (See Slevats v. Feustal, 213 Cal. App.2d 113, 119 [28 Cal. Rptr. 517]; Noice v. Noice, 195 Cal. App.2d 204, 213 [15 Cal. Rptr. 703].) We observe here that the effect of the court's ruling is not a declaration that defendant is not entitled to reimbursement for unilateral expenditures made on commonly held property under principles which permit a coowner to recover for such expenditures against the other coowner. (See Conley v. Sharpe, 58 Cal. App.2d 145, 154-156 [136 P.2d 376]; Southern Adjustment Bureau, Inc. v. Nelson, 230 Cal. App.2d 539, 541 [41 Cal. Rptr. 148]; Combs v. Ritter, 100 Cal. App.2d 315, 320 [223 P.2d 505]; Higgins v. Eva, 204 Cal. 231, 238 [267 P. 1081]; Mercola v. Chester, 97 Cal. App.2d 140, 143 [217 P.2d 32].) Nor is it a holding that such offset in a proper case may not be urged under Code of Civil Procedure section 440. (See Hauger v. Gates, 42 Cal.2d 752, 755 [269 P.2d 609].) Rather, the only purport of the lower court's decision in the instant proceeding *641 is that such expenditures may not be offset against a claim for alimony or child support.\nThe judgment is affirmed.\nSims, J., and Elkington, J., concurred.\nNOTES\n[1] Civil Code section 139, providing for alimony and child support, in pertinent part, reads as follows: \"That portion of the decree or judgment making any such allowance or allowances, ... may be modified or revoked at any time at the discretion of the court except as to any amount that may have accrued prior to the order of modification or revocation.\"\n"} -{"text": "\n888 N.E.2d 872 (2008)\nBALDWIN\nv.\nHARSTAD.\nNo. 18A02-0802-CV-86.\nCourt of Appeals of Indiana.\nJune 5, 2008.\nMATHIAS, J.\nDisposition of case by unpublished memorandum decision. Affirmed.\nMAY, J. Concurs.\nVAIDIK, J. Concurs.\n"} -{"text": "\n746 So.2d 1172 (1999)\nDEPARTMENT OF HEALTH, OFFICE OF VITAL STATISTICS, Appellant,\nv.\nThe ADOPTION OF Baby GILLI, Appellee.\nNo. 99-596.\nDistrict Court of Appeal of Florida, Fifth District.\nDecember 3, 1999.\nJanine B. Myrick, Senior Attorney, Department of Health, Office of Vital Statistics, Tallahassee, for Appellant.\nNo Appearance for Appellee.\nCOBB, J.\nThis appeal arises from a petition for adoption information filed on September *1173 15, 1998 by Beverly Outlaw (birth mother of Baby Gilli) in the Circuit Court of Volusia County, Florida. The petition requested all information concerning the adoption of her now adult girl who was born on March 3, 1953. Additionally, Outlaw requested \"all information to be released to Bertie Hunt as court intermediary.\" The reason given by Outlaw for the request was that her daughter had a \"right to know her heritage\" and Outlaw wanted to tell her the reasons why she was placed for adoption. Finally, Outlaw indicated that \"there is a need for medical information to be given to her.\"\nOn September 17, 1998, the lower court appointed Bertie Hunt, who was a notary and private investigator in Orange County, Florida, as intermediary and ordered that she could receive all identifying information concerning the adoption and all records relating to the adoption. The intermediary was appointed to act as an agent to determine whether the adoptive family or adoptee could be located and would consent to the release of identifying information.\nThe Department of Health, Office of Vital Statistics, filed a motion for relief pursuant to Rule 1.540 from the order appointing the intermediary and releasing adoption information. The Department challenged, inter alia, the jurisdiction of the Volusia County Circuit Court since it was not the court that entered the judgment of adoption. That judgment was entered by the Orange County Circuit Court. The circuit court below rejected the arguments of the Department, including those directed to the issue of jurisdiction. The court noted that all circuit courts in Florida have jurisdiction over adoptions and that a birth parent should not have to seek out the correct one.\nWe disagree with the jurisdictional analysis of the court below. Clearly, all circuit courts within the State of Florida have subject matter jurisdiction to hear adoptions and related proceedings. \u00a7 63.032(3), Fla. Stat. (1997). However, that is not the question. As stated by the First District Court of Appeal:\n[T]he issue of whether or not to disclose information from the file is under the continuing authority of the court in which the judgment of adoption was entered as it is that court which has custody of the case file. That court is obviously the court referred to throughout section 63.162 of the Florida Statutes. It would be unreasonable to construe it otherwise. The complexity that would occur in having an adoption judgment entered in the Columbia County Circuit Court but having further issues involved in the same file considered only by the Leon County Circuit Court is unnecessary and not the intent of the statute.\nDepartment of Health and Rehabilitation Services v. Kimmick, 390 So.2d 1218 (Fla. 1st DCA 1980).\nIn Dixon v. Melton, 515 So.2d 1309 (Fla. 1st DCA 1987), the district court indicated that the question of whether to disclose adoption file information lies with the court in which the adoption was entered and \"remains under the continuing authority of that court after the final judgment of adoption was entered.... Once one court has exercised its jurisdiction over a particular case, another court lacks authority to determine the existence of good cause and to order the file opened.\"\nUnder the above rationale, Judge Sanders in Volusia County had no authority to enter the order of disclosure and order appointing intermediary. Accordingly, we quash the order of the Volusia County Circuit Court entered on September 17, 1998.\nORDER QUASHED.\nDAUKSCH and GOSHORN, JJ., concur.\n"} -{"text": "\n389 U.S. 11 (1967)\nRHOADES ET AL.\nv.\nSCHOOL DISTRICT OF ABINGTON TOWNSHIP ET AL.\nNo. 225.\nSupreme Court of United States.\nDecided October 9, 1967.\nAPPEAL FROM THE SUPREME COURT OF PENNSYLVANIA.\nFranklin C. Salisbury for appellants.\nWilliam C. Sennett, Attorney General of Pennsylvania, John P. McCord, Deputy Attorney General, and Edward Friedman for the Commonwealth of Pennsylvania, and William B. Ball for Paul et al., appellees.\nPER CURIAM.\nThe motions to dismiss are granted and the appeal is dismissed for want of a substantial federal question.\nMR. JUSTICE DOUGLAS is of the opinion that probable jurisdiction should be noted.\n"} -{"text": "628 F.2d 887\nFed. Sec. L. Rep. P 97,666Paul T. MARTIN and Harold Bridges, Plaintiffs-Appellants,v.T. V. TEMPO, INC., et al., Defendants-Appellees.\nNo. 79-1232.\nUnited States Court of Appeals,Fifth Circuit.\nOct. 23, 1980.\n\nDaniel I. MacIntrye, Atlanta, Ga., Stan Durden, Jefferson, Ga., for plaintiffs-appellants.\nParker, Johnson & Cook, G. Donald Johnson, Atlanta, Ga., for defendants-appellees.\nG. William Long, III, Atlanta, Ga., for Sylvia Walls, Colonial Press & John Graff.\nAppeal from the United States District Court for the Middle District of Georgia.\nBefore VANCE, FRANK M. JOHNSON, Jr., and THOMAS A. CLARK, Circuit Judges.\nPER CURIAM:\n\n\n1\nPlaintiffs Martin and Bridges filed a multicount complaint alleging violations of federal and state securities laws,1 antitrust violations, common law fraud and breach of contract. After discovery was accomplished, both sides moved for partial summary judgment on the question whether the Associate Publisher Agreements sold to plaintiffs by defendants are securities under federal and state law.2 The district court ruled that the agreements are not securities. It dismissed the federal and state securities claims with prejudice and dismissed all other claims without adjudication. Martin and Bridges appeal only with respect to the ruling on their securities claims.\n\n\n2\nThe undisputed facts were stated in the trial court's order as follows:\n\n\n3\nDefendants are the innovators, owners and principal actors behind the T. V. Tempo magazine, a small weekly publication listing television schedules and carrying advertisements. The magazine is distributed at no charge to the consumer; revenues are derived from the sale of advertisements primarily to local merchants. Plaintiffs' investment in Associate Publisher Agreements entitles them to an exclusive franchise to sell advertisements for and arrange distribution of T. V. Tempo magazines in a defined area, typically one county. Defendants are obligated under the agreement to provide initial training and other assistance to the Associate Producer and any employees he might hire. All revenues from the sale of local advertisements are the property of the Associate Producer who does all of the billing. The Associate Producer must pay his own and employee expenses, must pay for the composition and printing of the magazines distributed in his area and must also pay a service fee to the defendants. Any revenues remaining after payment of these expenses are the Associate Producer's profit. For the purposes of the present motions the court accepts plaintiffs' contentions that as investors they held no reasonable expectation of control over the composition, quality and printing of the magazines or the price to be charged for advertising. With minor limitations, however, they were free to sell advertising space to anyone in their local area and to assist the buyer in arranging the rough composition for his advertisement.\n\n\n4\nAt various times during 1976 plaintiffs acquired franchises covering a number of counties or parts of counties in Georgia and Florida. The venture proved to be unsuccessful and plaintiffs ultimately went out of business. They allege that in offering and selling the franchise agreements defendants knowingly made material misrepresentations of fact on which they relied. They sought recovery of substantial sums alleged to have been paid by them to defendants together with interest and attorneys fees. The various contentions of the parties center on the single question addressed by the district court: is the franchise agreement a security.\n\n\n5\nThe starting point is the Supreme Court's definition in SEC v. W.J. Howey Co., 328 U.S. 293, 66 S.Ct. 1100, 90 L.Ed. 1244 (1946):\n\n\n6\n(A)n investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party . . . .\n\n\n7\nId. at 298-99, 66 S.Ct. at 1103.3 See 15 U.S.C. \u00a7\u00a7 77b(1) and 78c(a)(10). Our opinion in SEC v. Koscot Interplanetary, Inc., 497 F.2d 473 (5th Cir.1974), dealt with the subsequent development of the law with respect to the third element of the Howey test, \"solely from the efforts of (others).\" Concluding that a literal application of the test is unwarranted, id. at 480, we held that the proper standard was that explicated in SEC v. Glenn W. Turner Enterprises, Inc., 474 F.2d 476 (9th Cir.), cert. denied, 414 U.S. 821, 94 S.Ct. 117, 38 L.Ed.2d 53 (1973), \"whether the efforts made by those other than the investor are the undeniably significant ones, those essential managerial efforts which affect the failure or success of the enterprise,\" id. at 482. SEC v. Koscot Interplanetary, Inc., 497 F.2d at 483; accord, Cameron v. Outdoor Resorts of America, Inc., 608 F.2d 187, 193 (5th Cir.1979), modified on other grounds, 611 F.2d 105 (5th Cir.1980).\n\n\n8\nIn United Housing Foundation, Inc. v. Forman, 421 U.S. 837, 95 S.Ct. 2051, 44 L.Ed.2d 621 (1975), the Supreme Court noted but declined to express any view as to the correctness of the Turner standard. Id. at 852 n.16, 95 S.Ct. at 2060 n.16. It did, however, reaffirm that\n\n\n9\n(t)he touchstone is the presence of an investment in a common venture premised on a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others . . . . In such cases the investor is \"attracted solely by the prospects of a return\" on his investment.\n\n\n10\nId. at 852, 95 S.Ct. at 2060.\n\n\n11\nThe district court viewed the agreements as no different than ordinary franchise agreements that the courts have uniformly found not to be investment contracts. Koscot, on the other hand, emphasized the indispensable presence of \"schemes in which promoters retain immediate control over the essential managerial conduct of an enterprise and where the investor's realization of profits is inextricably tied to the success of the promotional scheme\" in finding that a pyramid sales scheme constituted a security. Koscot distinguished on that basis \"a conventional franchise arrangement, wherein the promoter exercises merely remote control over an enterprise and the investor operates largely unfettered by promoter mandates.\" 497 F.2d at 485. Plaintiffs argue that defendants retained the real authority and control that determined the success or failure of the enterprise. They also stress the amount of consulting and management services that defendants represented that they would perform, contending that only simple ministerial tasks were required on the part of plaintiffs.\n\n\n12\nIn the present posture of the case, plaintiffs are entitled to have us view the material evidence in the light most favorable to them and to indulge every reasonable inference from those facts in their favor. American Telephone & Telegraph Co. v. Delta Communications Corp., 590 F.2d 100, 102 n.1 (5th Cir.), cert. denied, 444 U.S. 926, 100 S.Ct. 265, 62 L.Ed.2d 182 (1979). Even so viewed, however, the evidence demonstrates that the agreement fails to meet the Koscot test.\n\n\n13\nPlaintiffs may have been misled as to the prospects for success or the amount of effort required to sell advertising, but there is less indication that they were misled as to who was to perform what function. Illustrative testimony of appellant Martin is in point:\n\n\n14\nQ. When you were getting ready to buy all these franchises, you understood that T V Tempo was going to provide start-up training to get the business going; is that right? Training your employees for you?\n\n\n15\nA. Right. Whatever training was necessary.\n\n\n16\nQ. And they were going to come along and provide ongoing advice as to how to run?\n\n\n17\nA. Right.\n\n\n18\nQ. Now that is typical of just about any kind of franchise, I would suppose?\n\n\n19\nA. Right.\n\n\n20\nQ. You didn't understand they were going to run the business for you though, did you?\n\n\n21\nA. No, no.\n\n\n22\nQ. You knew your employees were going to have to run the business, and they were going to be advised and counseled by the T V Tempo representatives?\n\n\n23\nA. Right.\n\n\n24\nThe testimony of appellant Bridges is to the same effect:\n\n\n25\nQ. You didn't expect the T V Tempo franchise to run itself, though, did you?\n\n\n26\nA. No, it will not run itself. That's the reason you hire a Manager.\n\n\n27\nQ. It's got to have someone on the scene running it?\n\n\n28\nA. Right. Nothing will run by itself.\n\n\n29\nQ. Did anybody from T V Tempo or Colonial Press or Barrett-Walls Inc., or any of the individuals that are in this lawsuit-did any of them tell you that you couldn't run the business yourself, if you wanted to?\n\n\n30\nA. Well, I think they expected me to run the business under their procedures and policies but-or expected the managers to run it.\n\n\n31\nQ. You don't think, if you hire somebody good to run one, that it will be a money-producing business?\n\n\n32\nA. Not to the extent that they say it would be. I think T V Tempo might be good for an owner-operator, but not for an investor. I think it's foolish.\n\n\n33\nQ. You think the only way you can really make one go is to operate it yourself?\n\n\n34\nA. Right, and then take a lot of long, hard hours.\n\n\n35\nIn this franchise arrangement, plaintiffs had immediate control over the essential managerial conduct of the enterprise and defendants exercised merely remote control. The efforts of plaintiffs were the undeniably significant ones in determining profit or loss. See generally Bitter v. Hoby's International, Inc., 498 F.2d 183, 184-85 (9th Cir.1974).\n\n\n36\nThe testimony of Mr. Martin also supports the district court's finding that the failure of T. V. Tempo, Inc. would not necessarily doom plaintiffs' local activity. Because revenues were dependent on local sales activities and production could be obtained from other sources, plaintiffs' enterprise could have survived as an independent entity. See id. at 185. The testimony of plaintiffs themselves thus does not square with the test for a security under Koscot and Howey. In summary, we hold that these franchise agreements were not securities.\n\n\n37\nPlaintiffs urge that the district court erred in failing to analyze the franchise agreement under the so-called \"risk capital\" approach. We previously have taken note of this alternative to the Howey test but have not embraced it. SEC v. Koscot Interplanetary, Inc., 497 F.2d at 482 n.13. In addition, plaintiffs' argument must fail on the facts, for as the evidence shows defendants did not obtain \"risk capital\" from plaintiffs and, even if they had, the franchise agreements provided no benefit to plaintiffs from application of risk capital to defendants' business.\n\n\n38\nHaving concluded that the agreements were not securities, the district court dismissed with prejudice not only the federal securities claim but also the state securities claim. We conclude that dismissal of the state claim should have been without prejudice. Pharo v. Smith, 621 F.2d 656, 673-675 (5th Cir.1980); 13 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure \u00a7 3567, at 351 & n.36.1 (1980 Supp.). We modify the judgment of the district court so to hold.\n\n\n39\nThe district court's dismissal with prejudice of the federal securities claim is AFFIRMED. Its dismissal of the state securities claim is MODIFIED so that such dismissal is without prejudice and as so modified is AFFIRMED. Its judgment in all other respects is AFFIRMED.\n\n\n40\nMODIFIED in part and AFFIRMED.\n\n\n\n1\n Sections 12(1) & (2) and 17 of the Securities Act of 1933, 15 U.S.C. \u00a7\u00a7 77l and 77q; sections 10, 15(a) and 29(b) of the Securities Exchange Act of 1934, 15 U.S.C. \u00a7\u00a7 78j(b), 78o et seq. and 78cc, and Rule 10b-5, 17 C.F.R. \u00a7 240.10b-5; sections 3, 5 and 12(a) of the Georgia Securities Act of 1973, Ga. Code Ann. \u00a7\u00a7 97-103, 97-105 and 97-112(a) (1976)\n\n\n2\n Our review is influenced by the fact that both sides moved for summary judgment. As we observed in Pharo v. Smith, 621 F.2d 656, 664 (5th Cir.1980), \"(t)hat motion amounted to a representation by the moving counsel, as officers of the court, that the case was fully at issue, that all theories of liability and all defenses had been presented, and that the case was ripe for summary treatment.\"\n\n\n3\n The Howey court stated that \"(s)uch a definition necessarily underlies this Court's decision in Securities Exch. Commission v. C.M. Joiner Leasing Corp., 320 U.S. 344 (64 S.Ct. 120, 88 L.Ed. 88) . . . .\" 328 U.S. at 299, 66 S.Ct. at 1103\n\n\n"} -{"text": "\n515 P.2d 721 (1973)\nSTATE of Oregon ex rel. Jay R. Ware and Dulcita J. Ware, Relators,\nv.\nGlen HIEBER, As Judge of the Circuit Court of the State of Oregon for the County of Washington, Defendant.\nSupreme Court of Oregon.\nArgued and Submitted on July 10, 1973.\nDecided November 1, 1973.\n*722 Michael R. Hogan, Portland, argued the cause for defendant. With him on the briefs were Miller, Anderson, Nash, Yerke & Wiener and William B. Crow, Portland.\nCharles F. Hinkle, Portland, argued the cause for relators. With him on the brief were Davies, Biggs, Strayer, Stoel & Boley, Portland.\nBefore O'CONNELL, C.J., and DENECKE, HOLMAN, TONGUE, HOWELL and BRYSON, JJ.\nArgued and Submitted on Defendant's Demurrer to Alternative Writ July 10, 1973.\nDENECKE, Justice.\nThe issue is whether the Oregon court can acquire jurisdiction over the Wares, plaintiffs-relators, under Oregon's \"longarm\" statute.\nBlack Diamond Enterprises, Inc., filed an action on a guaranty agreement against the Wares. Personal service was made on the Wares in California. The Wares made a special appearance before the circuit court and moved to quash service upon the ground that the court had no personal jurisdiction over them. The circuit court denied the motion.\nPursuant to the usual practice, the Wares filed a petition for writ of mandamus in this court and asked that we direct the circuit court to quash the service. We issued an alternative writ ordering the circuit court to show cause why it had not quashed the service of summons on the Wares.\nBefore answering the basic question we must resolve some preliminary procedural issues.\nThe alternative writ of mandamus performs the function of a complaint. The defendant demurred to the alternative writ. A demurrer to an alternative writ has the same effect as a demurrer to a complaint; it admits all the well-pleaded facts. International Trans. v. Bohannon, 252 Or. 356, 359, 449 P.2d 847 (1969). The relators were aware of this rule. However, in their brief and on oral argument the relators did not seek to take advantage of this rule and expressly proceeded upon the basis that the facts were to be determined from the affidavits submitted to the circuit court. They took this position because of the practical consideration that if we overruled defendant's demurrer defendant would file an answer controverting at least some of the facts alleged in the alternative writ and the case would return to us.\nBecause the parties proceeded on the basis that by demurring the defendant did not admit the facts alleged in the alternative writ, we will proceed in the same manner. Without expressly so stating, we acquiesced in this same procedure in State ex rel. Western Seed v. Campbell, 250 Or. 262, 442 P.2d 215 (1969). In the future in mandamus the parties should proceed according to the rule that a demurrer to the alternative writ admits all well-pleaded facts in the writ.\nIn addition to the facts alleged in the affidavits, the facts pleaded in Black Diamond's verified complaint also can be considered. In State ex rel. Western Seed v. Campbell, supra (250 Or. at 274-275, 442 P.2d 215), we relied upon facts alleged in the complaint.\nThe parties disagree about the scope of our review of the facts. The evidence before the circuit court was conflicting. The Wares contend that because this is an original proceeding, we must determine the facts de novo.\nBased upon the nature of mandamus and the relation of mandamus to appeal, we conclude that our function is to decide whether there was any evidence to substantiate the circuit court's ruling. We *723 should not conduct a de novo review of the facts.\nORS 34.110 provides that the writ of mandamus \"shall not control judicial discretion\"; this is a restatement of the common-law rule.\nThe author of Extraordinary Legal Remedies states:\n\"* * * In every case the party that is to act [the circuit court in this case] must determine in the first instance whether the case is one for action, and a question of discretion is, in its essence, a question of fact. * * * [W]hen the case presents merely a question of law, the element of discretion is not involved, the only question for determination being whether, as a matter of law, mandamus ought to issue. Where the facts are disputed, and are determined upon conflicting evidence, the finding is, of course, conclusive.\" Ferris, Extraordinary Legal Remedies, \u00a7 211, pp 243-245 (1926).\nWe appear to have adopted this idea, that in mandamus, when the facts are in dispute, the trial court is using its \"judicial discretion\" in deciding the facts. \"As a general rule, mandamus lies to require inferior courts to act, but it will not compel them to decide disputed questions of fact in a particular way.\" State ex rel. Methodist Old People's Home v. Crawford, 159 Or. 377, 386, 80 P.2d 873, 877 (1938).\nThe principle that mandamus cannot lie to control the trial court's discretion is supported by practical considerations as well as tradition. In cases in which the trial court has held it had personal jurisdiction, we have permitted mandamus to be used to test such a ruling. The ruling could also be tested by appeal. Enco, Inc. v. F.C. Russell Co., 210 Or. 324, 329-337, 311 P.2d 737 (1957). On appeal the findings of the trial court will be sustained if there is any evidence to support the findings.\nCarlson v. Superior Court of Los Angeles County, 56 Cal.2d 431, 15 Cal. Rptr. 132, 364 P.2d 308 (1961), held in an original proceeding in mandamus that it did not review de novo trial court's findings. The trial court refused to permit a party to take certain depositions. The party petitioned the Supreme Court to mandamus the trial court. The Supreme Court stated:\n\"This leaves for determination the question of whether, under the facts, the trial court abused its discretion in making the challenged order. Of course, if there was any evidence that supports any one of the grounds urged for suppression of the right to take the depositions, then this court may not substitute its opinion for that of the trial court, and the order must be sustained. But if there is no legal justification for such exercise of discretion it must be held that an abuse occurred.\" 15 Cal. Rptr. at 136, 364 P.2d at 312.\nHaving resolved these preliminary questions, we may now address the question whether there is any evidence to support the trial court's denial of the motion to quash.\nORS 14.035 provides: \"Any person * * * who, in person or through an agent * * * [transacts] any business within this state\" thereby submits \"to the jurisdiction of the courts of this state * * *.\" The trial court, by denying the motion to quash, necessarily found that the Wares did transact business within Oregon.\nAs Black Diamond prevailed on the motion to quash, we will consider the facts in a light most favorable to Black Diamond. Black Diamond, the plaintiff in the action against the Wares, is a Tennessee corporation. It manufactures motor homes in Oregon through its Cabana Coach Division. Keller Enterprises is a Nevada corporation engaging in retail sales of motor homes at several California locations. Rick Keller is President; Jay Ware, Vice-President; and Dulcita Ware, his wife, Secretary-Treasurer. The Wares own the majority interest in Keller Enterprises. The Wares are California residents and Jay Ware's principal business is a plumbing shop in California.\n*724 In October 1969 Black Diamond approached Keller Enterprises and the Wares at a trade show in California and attempted to interest them in buying its product. In November 1969 Keller and Jay Ware came to Black Diamond's plant in Oregon to evaluate Black Diamond's operation and negotiate a dealer franchise. During this Oregon visit Black Diamond granted Keller Enterprises a dealership.\nAt the close of their stay in Oregon Ware and Keller drove motor homes to California. Thereafter, Keller Enterprises continued to purchase or take on consignment motor homes from Black Diamond. Contracts for some of these purchases were signed by Jay Ware. Employees of Keller Enterprises came to Oregon to take delivery of some vehicles. The motor homes were not custom made for Keller Enterprises.\nBlack Diamond \"factored\" vehicles through H.A. Caesar & Co., Inc., a New York corporation, to assist Keller Enterprises in financing their purchases. Caesar had full recourse against Black Diamond for amounts paid it by Caesar and secured through the obligation of Keller. Black Diamond came to believe that a competitor had an interest in Keller Enterprises. Partially for this reason, Black Diamond required the Wares and Keller to execute an agreement whereby they personally agreed with Caesar to guaranty amounts due from Keller Enterprises.\nThe guaranty agreement was dated April 3, 1970. It was on Caesar's forms, mailed from New York, executed in California by the guarantors, and mailed to Caesar in New York. It provided it \"shall be governed by the laws of, the State of New York.\"\nIn reliance upon the guaranty, Black Diamond sold motor homes to Keller Enterprises. Keller Enterprises failed to pay its obligations to Caesar and Caesar assigned its right under the guaranty agreement to Black Diamond.\nDo these facts establish that the Wares transacted business in Oregon?\nIn State ex rel. White Lbr. v. Sulmonetti, 252 Or. 121, 448 P.2d 571 (1968), we held the relator was transacting business in Oregon. The majority adopted \"fairness\" as the test and decided it was fair in that case to subject the relator to jurisdiction because the defendant had sufficient \"contacts\" in Oregon. The facts were that the Florida corporation, a lumber products wholesaler, instituted by telephone from Florida the purchase of plywood to be custom-manufactured in Oregon and shipped to Florida. The parties had done business with each other and constantly did business in interstate commerce.\nOn the other hand, in Neptune Microfloc v. First Fla. Util., 261 Or. 494, 495 P.2d 263 (1972), we held the Oregon court could not secure jurisdiction under the \"longarm\" statute. The plaintiff Oregon corporation solicited the defendant, a Florida corporation operating a sewage treatment plant, to purchase some settling tubes manufactured in Oregon. We held Oregon did not have jurisdiction over the defendant because: \"The defendant did not have sufficient contacts with Oregon and it is not a concern that does interstate business.\" 261 Or. at 497, 495 P.2d at 264.\nIf Keller Enterprises were the defendant, we would have little trouble holding that it was subject to the jurisdiction of the Oregon courts. The only distinction from the White case that is favorable to the Wares is that in the present case the entire transaction was instituted by Black Diamond, whereas White Lumber Co. instituted the transaction. However, the dealership agreement Keller Enterprises entered into with Black Diamond, the continual purchases by Keller Enterprises and its occasional acceptance of deliveries in Oregon gave Keller Enterprises continuous contact with this state.\nThe frequent physical presence of employees of Keller Enterprises in Oregon leads to the conclusion that Keller Enterprises could litigate in Oregon without such inconvenience and disadvantage as to amount to unfairness.\n*725 Keller Enterprises engaged in interstate business in Oregon.\nWhether the Wares personally can be required to litigate in Oregon, however, is not so clear.\nIf we were to view the Ware's guaranty as a transaction completely separate from the transaction between Black Diamond and Keller Enterprises, the connection between the Wares and Oregon would be slender. We do not consider it realistic, however, to consider the guaranty in a vacuum. From the standpoint of \"fairness\" to the parties and convenience to the parties and from the standpoint of the interests of the State of Oregon, we are of the opinion that the personal guaranty of the Wares must be considered as one aspect of the entire course of business between Keller Enterprises and Black Diamond.\nAccording to evidence which the circuit court could have relied upon, the guaranty agreement was essential to the continuation of the business relationship between Keller Enterprises and Black Diamond. Without the agreement Black Diamond would have ceased manufacturing vehicles in Oregon for sale to Keller.\nMr. Ware had found it not inconvenient to come to Oregon to commence the contractual relationship with Black Diamond. It should be no more inconvenient for him to come to Oregon to litigate the controversy attending the termination of the relationship.\nWe are not specifically apprised of what, if any, defense the Wares have to Black Diamond's claim. From statements in Mr. Ware's affidavits we can infer that the Wares will contend that Black Diamond misrepresented to the Wares the intended use of the guaranty agreement. A trial of such issues will require testimony of Black Diamond's Oregon employees and the Ware's and Keller's employees. Either Oregon witnesses must go to California or California witnesses must come to Oregon. Employees of each company have come to the other's state in connection with commencement and continuation of the business. It cannot be too inconvenient to go to either state to litigate the termination of the business.\nTwo guaranty cases, while distinguishable upon their facts, emphasize that when the parties to the underlying transaction which was guarantied were transacting business in the forum state the guarantors also would be found to be transacting business within the forum state.\nIn O'Hare International Bank v. Hampton, 437 F.2d 1173 (7th Cir.1971), an Illinois business leased an airplane to an Oklahoma corporation. Oklahomans who were the owners of the Oklahoma corporation guarantied the lease. The court held the Oklahoma guarantors were subject to jurisdiction in Illinois. The court stated:\n\"While the guarantors received no direct consideration, it appears there was inducement in connection with their projected interest in World Travelers [Oklahoma corporation] for them to want eventual financing of the airplane to be purchased. They should not be in the position, even though indirectly, to enjoy the fruit but to disavow the situs of the tree from which the fruit was derived. * * *.\" 437 F.2d at 1177.\nIn Salter v. Lawn, 294 F. Supp. 882 (D. Mass. 1968), the defendant, a New Jerseyan, was the sole owner of a corporation doing its principal business in Massachusetts. The defendant guarantied loans of a Massachusetts bank to the corporation. The corporation repaid the loans immediately before bankruptcy. The trustee in bankruptcy of the corporation brought this action against the guarantor to recover preferences. Chief Judge Wyzanski held Massachusetts could obtain jurisdiction over the New Jerseyan:\n\"Another way of arriving at the same ultimate conclusions is to observe that the notes which had been made and paid by the bankrupt corporation in Massachusetts had previously been guaranteed in Massachusetts by defendant, and that guarantee was discharged in Massachusetts *726 by the bankrupt corporation's payments in this Commonwealth. Where a nonresident guarantees in Massachusetts a note made in Massachusetts by a Massachusetts primary obligor, the nonresident, by virtue of the `Long Arm' statute, is subject to service on a cause of action arising out of the guarantee. * * *. And if the avoidance of the guarantee is a consequence of a preferential payment made in Massachusetts, an action against the non-resident guarantor to recover a preference is `a cause of action arising [albeit indirectly] from the person's transacting * * * business in this commonwealth.'\" 294 F. Supp. at 884.\nThe Wares contend that Mrs. Ware was never physically present in Oregon; that Mr. Ware was only in Oregon as an agent of the corporation; and that the guaranty was executed in California. We decided in State ex rel. White Lbr. v. Sulmonetti, supra, 252 Or. 121, 448 P.2d 571, that physical presence in the state was not a prerequisite to transacting business in the state and the place where the contract was executed is not determinative of where the business is transacted. Ferrante Equip. v. Lasker-Goldman, 26 N.Y.2d 280, 309 N.Y.S.2d 913, 258 N.E.2d 202 (1970), relied upon by the Wares, is not in accord with White.\nThe Wares also contend that Black Diamond is a Tennessee corporation and Oregon has no compelling interest in providing a foreign corporation with a forum. The state of incorporation is not determinative. Black Diamond's Oregon operation is the concerned organization in this litigation.\nThe Wares also urge that the clause in the guaranty providing that New York law shall apply militates against Oregon taking jurisdiction. Such a choice of law clause has a bearing on the state's interest in providing a forum. If such a clause were a paramount consideration, however, New York would be the primary forum and we cannot conceive that the Wares want to litigate this case in New York. Furthermore, from the little we know of the merits, we assume the issues will involve the contractual relation between Black Diamond, the Wares and Keller Enterprises. These issues will not be governed by New York law.\nThe Wares have cited other cases holding that a guarantor who never came in the state was not transacting business. In Misco Leasing Inc. v. Vaughan, 450 F.2d 257 (10th Cir.1971), it cannot be determined whether the forum state could gain jurisdiction of the party to the contract which was guarantied. In All Lease Company v. Betts, 294 Minn. 473, 199 N.W.2d 821 (1972), the court held the forum state did not have jurisdiction over the party to the underlying transaction. In the present case jurisdiction over the guarantors is keyed to the ability to gain jurisdiction over Keller Enterprises. Also, those decisions seem to adopt the view that some physical presence in the forum state at some time is essential. We previously rejected this view.\nD.E.B. Adjustment Company v. Dillard, Colo. App., 508 P.2d 420 (1973), held Colorado could not obtain jurisdiction by the long-arm statute over a California mother who had guarantied her son's room and board contract with a Colorado school. The court's reasoning is general (in this type of case this may be wise), but the decision may be distinguished because the mother was not engaging in any commercial activity.\nWe hold there was evidence supporting the trial court's denial of the motion to quash.\nPeremptory writ disallowed.\nO'CONNELL, Chief Justice (dissenting).\nFor the reasons developed in my dissenting opinion in State ex rel. White Lumber Sales v. Sulmonetti, 252 Or. 121, 128, 448 P.2d 571, 574 (1968), I am of the opinion *727 that the proper forum for the litigation of the action brought by Black Diamond Enterprises, Inc. against the Wares is the defendants' domicile. Therefore, the service upon the Wares should be quashed.\n"} -{"text": "986 F.2d 1412\nNOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.In Re: Marie ASSA'AD-FALTAS, M.D., M.P.H., Petitioner.\nNo. 93-8001.\nUnited States Court of Appeals,Fourth Circuit.\nSubmitted: February 1, 1993Decided: February 26, 1993\n\nOn Petition for Writ of Mandamus.\nMarie Assa'ad-Faltas, Petitioner Pro Se.\nPETITION DENIED.\nBefore HALL and PHILLIPS, Circuit Judges, and BUTZNER, Senior Circuit Judge.\nPER CURIAM:\n\n\n1\nMarie Assa'ad-Faltas sued a number of university and hospital defendants for damages arising from an employment contract dispute. She seeks a writ of mandamus to compel the district judge to revoke an order in which he determined to re-examine her claims prior to trial. The district court expressed concern that the possibility of a meaningful pre-trial conference and reasonably orderly trial were remote.\n\n\n2\nA writ of mandamus is issued only when the petitioner has no other means to obtain relief and when she has shown a clear right to relief. Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33 (1980); In re First Fed. Sav. & Loan Ass'n, 860 F.2d 135, 138 (4th Cir. 1988); In re Beard, 811 F.2d 818, 826-27 (4th Cir. 1987). The writ is not a substitute for appeal. In re United Steelworkers of America, 595 F.2d 958, 960 (4th Cir. 1979).\n\n\n3\nWe decline to issue the writ. Petitioner has not shown that she has a clear right to relief or that there are no other means to obtain relief. She has failed to show that the district court abused its discretion in issuing its pre-trial order. Even if the district court had abused its discretion by denying her relief, that decision would be an interlocutory order not ripe for appellate review. 28 U.S.C.A.s 1291 (West Supp. 1992). A writ of mandamus to compel interlocutory review of a nonfinal order by a district court is generally not available because those orders can be reviewed after a final judgment. Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 35-36 (1980).\n\n\n4\nAlthough we deny the petition, we grant leave to proceed in forma pauperis. We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the Court and argument would not aid the decisional process.\n\nPETITION DENIED\n"} -{"text": "\n472 F.Supp. 1061 (1979)\nWilliam J. WARREN\nv.\nHenry M. HARVEY, Acting Superintendent, Whiting Forensic Institute, Middletown, Connecticut.\nCiv. No. H-77-206.\nUnited States District Court, D. Connecticut.\nJune 15, 1979.\n*1062 *1063 Mary F. Keller, Yale Legal Services Organization, New Haven, Conn., for petitioner.\nErnest Diette, Jr., Asst. State's Atty., New Haven, Conn., for respondent.\n\nMEMORANDUM OF DECISION\nBLUMENFELD, District Judge.\nPetitioner, William J. Warren, brings this action for a writ of habeas corpus challenging the constitutionality of his confinement at Whiting Forensic Institute, a state institution for treatment of committed mentally ill persons. His present involuntary confinement there is based on Conn.Gen.Stat. \u00a7 53a-47, which authorizes the confinement of an individual acquitted on grounds of insanity where that individual is \"mentally ill to the extent that his release would constitute a danger to himself or others.\" The petitioner contends that by ordering that he be kept confined, the state has violated his constitutional right embodied in section I of the fourteenth amendment, which provides, \"nor shall any State deprive any person of life, liberty, or property, without due process of law.\"\n\nI. FACTS\n\nWilliam J. Warren was arrested for murder in the first degree on July 5, 1971. He was confined at Connecticut Valley Hospital (CVH) on September 16, 1971, and was transferred to Whiting Forensic Institute (WFI) on September 29, where he remained for two years. In September 1973, petitioner was declared competent to stand trial and returned to jail to await trial. On February 27, 1974, petitioner was found not guilty by reason of insanity.[1] Pursuant to Conn.Gen.Stat. \u00a7 53a-47(a), he was then ordered confined to CVH for an examination to ascertain whether he was presently mentally ill to such extent that his release would constitute a danger to himself or others.[2] Under that statute, a person acquitted *1064 on grounds of mental disease or defect is temporarily confined in a state hospital pending an examination of his mental condition. Upon receipt of the reports of the examining doctors, the state court must schedule a hearing. If the court determines at the hearing that the preponderance of the evidence establishes that such person is \"mentally ill to the extent that his release would constitute a danger to himself or others, the court shall confine such person in a suitable hospital or other treatment facility.\" Conn.Gen.Stat. \u00a7 53a-47(a)(4).\nIn the instant case the examining psychiatrist, Dr. Patrick Lee, filed a report pursuant to Conn.Gen.Stat. \u00a7 53a-47(a) on May 10, 1974. In his report, Dr. Lee stated that the petitioner exhibited no evidence of overt psychosis, that petitioner had been receiving tranquilizing medication since the time of his hospitalization, and that petitioner had presented no behavioral problems for the hospital. Petitioner's Exhibit A at 2a-3a (Appendix to Brief For The Defendant, State v. Warren, No. 7669, Conn. Supreme Court, Jan. Term 1975). Dr. Lee also stated that petitioner \"would benefit from a further period of hospitalization.\" Id. at 3a.\nAt the required state Superior Court hearing on May 24, 1974, Dr. Lee testified that the petitioner was receiving Mellaril, an oral tranquilizer which former hospital patients commonly administer to themselves on an outpatient basis. Petitioner's Exh. A at 9a (transcript of May 24, 1974 hearing). He further testified that as long as petitioner was receiving this medication, petitioner was not a danger to himself or others in or outside the hospital. Id.\nAfter the hearing, the state court concluded that \"[t]here is a strong possibility that the defendant, if released, might not continue use of the anti-psychotic medication without which he is a danger to himself or others,\" and \"[t]here is no certain means of controlling the taking of his medication once he is released from a mental institution.\" Petitioner's Exh. C at 11 (State v. Warren, No. 7699, Superior Court, New Haven County, May 31, 1974).[3] The court then ruled that petitioner was mentally ill to the extent that his release would constitute a danger to himself or others and ordered petitioner confined to CVH for a term not to exceed 25 years, the maximum term allowed by the statute, Conn.Gen.Stat. \u00a7 53a-47(b). The state court concluded that \"[t]he salutary purposes of [Conn.Gen. Stat.] \u00a7 53a-47 would be defeated if under the circumstances of this case this defendant could walk out free on a promise to take his medication.\" Id. at 11.\nPetitioner appealed this ruling to the Connecticut Supreme Court. He argued that the state had failed to produce any competent evidence which could form the basis for the lower court's findings and conclusions. Petitioner argued that in the absence of evidence of present dangerousness due to mental illness, his further confinement *1065 would violate the terms of Conn. Gen.Stat. \u00a7 53a-47 and his constitutional right to due process of law.\nWhile petitioner's appeal of the first hearing was pending before the Connecticut Supreme Court, a second hearing before the state Superior Court was held on December 10, 1974 pursuant to Conn.Gen.Stat. \u00a7 53a-47(c).[4] That section of the statute provides that where, as here, the semiannual written report required of the superintendent of the hospital concludes that the confined person is no longer mentally ill to the extent that his release would constitute a danger to himself or others, the court shall order the person released, unless the state at a hearing \"establishes by a preponderance of the evidence that such person is, at the time of the hearing, mentally ill to the extent that his release would constitute a danger to himself or others.\" Conn.Gen.Stat. \u00a7 53a-47(c).[5] Prior to this hearing, Doctors Lee and Voelkening of CVH filed separate reports with the state court stating that petitioner was taking tranquilizing medication and exhibited no symptoms of overt psychosis or thought disorder. Petitioner's Exh. A at 17a-22a. The reports stated that petitioner had been employed in the hospital print shop since his admission and had continued to abide by all hospital regulations. Id. In their respective reports and in their testimony at the hearing before the court, both doctors stated that if petitioner continued to take his medication and received outpatient psychiatric care, his release would not constitute a danger to himself or others. Petitioner's Exh. B at 19a, 29a, 31a, 48a-50a (transcript of Dec. 10, 1974 hearing).[6]\n*1066 On December 18, 1974, the Superior Court issued its decision and ordered the petitioner returned to confinement at CVH for not in excess of the balance of 25 years. The state court concluded that where the symptoms of defendant's mental illness were \"controlled\" by the use of medication but where there was \"no way to insure that the defendant would continue to take medication if he were released,\" petitioner's \"release would constitute a danger to himself or others.\" Petitioner's Exh. E at 30 (State v. Warren, No. 17846, Superior Court, New Haven County, May 19, 1975).\nIn 1975, the Connecticut Supreme Court issued its decision on petitioner's appeal of the first state court decision. The court ruled that there was sufficient evidentiary support for the lower court's findings and conclusions and affirmed the lower court decision that Conn.Gen.Stat. \u00a7 53a-47 required petitioner's continued confinement at CVH. State v. Warren, 169 Conn. 207, 363 A.2d 91 (1975).\nFollowing that ruling on petitioner's appeal, a third set of medical reports was filed with the Superior Court, and a third hearing was held in October of 1975. Reports were filed by Dr. Arafeh (Superintendent of Connecticut Valley Hospital), Dr. Lee, Dr. Voelkening, and Dr. Sheard (Associate Professor of Psychiatry at Yale University). Petitioner's Exhs. J, K, L, M. These reports all stated that petitioner was free from overt psychosis and that his mental illness was in remission. The reports attributed petitioner's improved mental condition to the fact that he had responded well to the structured hospital environment and to the fact that he was being successfully treated with Prolixin, a tranquilizer administered by injection every two weeks. See id. Three of the four reports (those of Doctors Lee, Voelkening, and Sheard, Petitioner's Exhs. K, L, and M) concluded that petitioner was not mentally ill to the extent that his release would constitute a danger to himself or others,[7] and the fourth (Dr. Arafeh, Petitioner's Exh. J) concluded that while petitioner did not \"appear to be dangerous to himself or others\" while at the hospital, \"it is difficult to predict future potential dangerousness.\" After the hearing, the Superior Court ordered petitioner returned to CVH. Petitioner's Exh. I (State v. Warren, No. 17846, Superior Court, New Haven County, Nov. 4, 1975). In reaching its conclusion, the court held that the possibility that petitioner might at some point discontinue taking his medication gave rise to a possibility of dangerousness sufficient for purposes of Conn.Gen. Stat. \u00a7 53a-47 to justify petitioner's continued confinement at CVH. See Petitioner's Exh. I at 4-7.[8] In December of 1975, petitioner *1067 was transferred from CVH to Whiting Forensic Institute, where he is presently confined.\nPetitioner argues that his present confinement is in violation of his due process rights because the standard of proof of dangerousness adopted by the state courts at each of the above three hearings\u0097at the initial hearing on May 24, 1974, at the second hearing on December 10, 1974, and at the third hearing in October 1975\u0097impermissibly imposed an impossible burden upon himself or any other person seeking release after an insanity acquittal where that person's underlying mental illness is in remission and is controlled by medication. Petitioner argues that the state courts determined that he was dangerous because he could not provide a guarantee of his future mental condition and behavior, and that this determination of dangerousness deprived petitioner of his liberty without due process of law.\n\nII. EXHAUSTION OF STATE REMEDIES\n\nThe respondent argues that petitioner has not presented his federal constitutional claims to the Connecticut state courts and therefore has failed to exhaust his state remedies as required by 28 U.S.C. \u00a7 2254(b) and (c). On reviewing the record of this case, I find to the contrary: the highest state court has had an opportunity to pass upon petitioner's constitutional claims.\nPetitioner's appeal to the Connecticut Supreme Court, following the Superior Court's decision denying him release after the May 1974 hearing, raised the claim that the Superior Court's findings and conclusions were wholly unsupported by the evidence and contrary to law. See Petitioner's Exh. C at 13 (Assignments of Error, Nos. 3-5). The \"law\" referred to was the due process clause of the fourteenth amendment to the United States Constitution. See Petitioner's Exh. A at 6-9 (Brief for the Defendant, State v. Warren, No. 7669, Conn.Supreme Ct., Jan. Term 1975).\nThough the due process claims petitioner raises in this court are more elaborately expressed than those presented to the Connecticut Supreme Court, that court was nonetheless presented with an opportunity to rule that the Superior Court's application of Conn.Gen.Stat. \u00a7 53a-47 violated petitioner's due process rights. The Connecticut Supreme Court instead held:\n\"From the facts found by the [lower] court . . . , especially the facts concerning the defendant's tendency to violence, it is clear that the court's conclusions are amply supported and do not violate law, logic, or reason.\"\nState v. Warren, 169 Conn. 207, 214, 363 A.2d 91, 95 (1975). That holding amounts to a rejection of all of petitioner's claims, including the due process claim he now raises before this court. All that 28 U.S.C. \u00a7 2254(b) requires is that the highest state court be given an opportunity to pass upon petitioner's constitutional claim.[9]Fay v. Noia, 372 U.S. 391, 437-38, 83 S.Ct. 822, 9 L.Ed.2d 837 (1963); see Galtieri v. Wainwright, 582 F.2d 348, 353 (5th Cir. 1978); United States ex rel. DeNegris v. Menser, 247 F.Supp. 826, 829 (D.Conn.1965), aff'd, 360 F.2d 199 (2d Cir. 1966).\nThe fact that petitioner only appealed to the Connecticut Supreme Court the decision of the state Superior Court after his first commitment hearing does not preclude his challenge in this court of the state court decisions following the second and third commitment hearings.[10] Under Conn.Gen. *1068 Stat. \u00a7 53a-47(c), \"The confined person shall be released unless the state establishes by a preponderance of the evidence that such person is, at the time of the hearing, mentally ill to the extent that his release would constitute a danger to himself or others.\" Thus the issue is the same at each hearing, and it is clear that the facts underlying petitioner's constitutional claim with regard to each hearing are substantially the same. Since the Connecticut Supreme Court has had the opportunity to rule on the claim in the appeal of the first hearing, to require petitioner to relitigate on appeal the same claim after each periodic hearing would not serve the purposes of the exhaustion requirement. See Wilwording v. Swenson, 404 U.S. 249, 250, 92 S.Ct. 407, 30 L.Ed.2d 418 (1971); Brown v. Allen, 344 U.S. 443, 449 n. 3, 73 S.Ct. 397, 97 L.Ed. 469 (1953). Thus I conclude that the exhaustion requirement has been satisfied here and that petitioner can raise his constitutional claim in this proceeding.[11]\n\nIII. DUE PROCESS REQUIREMENTS\n\nOnce petitioner was acquitted, even by reason of his insanity, his criminal responsibility for his past acts was at an end. To justify restricting his liberty thereafter depended upon whether he could be involuntarily committed to a state mental hospital. Connecticut recognizes this distinction between incarceration of convicted criminals and involuntary commitment of insanity acquittees. Compare Conn.Gen.Stat. \u00a7 53a-28 with Conn.Gen.Stat. \u00a7 53a-47.\nIt has been established that involuntary commitment of the mentally ill is a \"massive curtailment of liberty.\" Humphrey v. Cady, 405 U.S. 504, 509, 92 S.Ct. 1048, 31 L.Ed.2d 394 (1972). Furthermore,\n\"There can be no doubt that involuntary commitment to a mental hospital, like involuntary confinement of an individual for any reason, is a deprivation of liberty which the State cannot accomplish without due process of law. Specht v. Patterson, 386 U.S. 605, 608, 87 S.Ct. 1209, 1211, 18 L.Ed.2d 326 (1967). Cf. In re Gault, 387 U.S. 1, 12-13, 87 S.Ct. 1428, 1435-1436, 18 L.Ed.2d 527 (1967). Commitment must be justified on the basis of a legitimate state interest, and the reasons for committing a particular individual must be established in an appropriate proceeding. Equally important, confinement must cease when those reasons no longer exist.\"\nO'Connor v. Donaldson, 422 U.S. 563, 580, 95 S.Ct. 2486, 2496, 45 L.Ed.2d 396 (1975) (Burger, C. J., concurring). In O'Connor v. Donaldson, Justice Stewart's opinion for the Court held that even if the individual's \"original confinement was founded upon a constitutionally adequate basis . . . it could not constitutionally continue after that basis no longer existed.\" Id. at 574-75, 95 S.Ct. at 2493. He concluded that \"a State cannot constitutionally confine without more a nondangerous individual who is capable of surviving safely in freedom by himself or with the help of willing and responsible family members or friends.\" Id. at 576, 95 S.Ct. at 2494.[12]\nTo justify confinement of an individual following an insanity acquittal, therefore, due process requires a judicial *1069 determination that the individual is mentally ill and dangerous to himself or others. Powell v. Florida, 579 F.2d 324, 330 (5th Cir. 1978); Lee v. Kolb, 449 F.Supp. 1368, 1374 (W.D.N.Y.1978); see also Bolton v. Harris, 130 U.S.App.D.C. 1, 6, 395 F.2d 642, 647 (1968).[13] On its face, Conn.Gen.Stat. \u00a7 53a-47 meets this due process requirement. Under that statute a person acquitted by reason of insanity is entitled to release unless the state establishes by a preponderance of the evidence that the individual is, at the time of the hearing, \"mentally ill to the extent that his release would constitute a danger to himself or others.\" Conn.Gen. Stat. \u00a7 53a-47(a)(1).\nPetitioner claims, however, that the determination of dangerousness by the state courts in his case did not satisfy substantive due process standards in that the state courts effectively held that the dangerousness requirement of section 53a-47 was satisfied so long as the petitioner could not assure the courts that he would never have a relapse if released from the hospital. In essence, petitioner contends that the state courts violated his constitutional rights by (1) ruling that he was dangerous in the absence of any positive evidence supporting that determination, and (2) by shifting the burden of proof to him on the issue of whether he was mentally ill to the extent that his release would constitute a danger to himself or others. These contentions will be discussed in turn.\n\nA. Evidence of Dangerousness\n\nPetitioner argues that no evidence was presented to the state courts upon which the courts could constitutionally base a finding that petitioner's release would constitute a danger to himself or others. Petitioner cites to the trend of the law in the area of involuntary civil commitments, where a determination of dangerousness is also a necessary basis for involuntary confinement. In the civil commitment cases, several federal courts have held that a minimal regard for the individual's due process rights requires that the determination of dangerousness be based on a recent overt act, threat, or attempt of the individual facing commitment. Stamus v. Leonhardt, 414 F.Supp. 439, 450-51 (D.Iowa 1976); Doremus v. Farrell, 407 F.Supp. 509, 514-15 (D.Neb.1975) (three-judge court); Lynch v. Baxley, 386 F.Supp. 378, 391 (M.D.Ala.1974) (three-judge court); Lessard v. Schmidt, 349 F.Supp. 1078, 1093 (E.D.Wis.1972) (three-judge court), vacated and remanded on other grounds, 414 U.S. 473, 94 S.Ct. 713, 38 L.Ed.2d 661 (1974), judgment reinstated, 379 F.Supp. 1376 (E.D.Wis.1974), vacated and remanded on other grounds, 421 U.S. 957, 95 S.Ct. 1943, 44 L.Ed.2d 445 (1975), judgment reinstated, 413 F.Supp. 1318 (E.D. Wis.1976).[14]\nIn the instant case petitioner correctly argues that the state court findings of dangerousness *1070 were not based upon his recent overt behavior. The records of the three hearings at issue here establish that petitioner manifested no signs of overt psychosis, delusions, or thought disorder. The psychiatrists testified that due to the regular use of medication in the hospital, petitioner's underlying mental illness was in remission.[15]\nIn the context of the confinement of persons acquitted on grounds of insanity, however, evidence of a recent overt act, threat, or attempt indicating dangerousness is not the only basis upon which a court can, consistent with due process, find that the person's release would constitute a danger to himself or others. It is evident that a court may consider the past violent act, for which the person was brought to trial, as some evidence of a future potential for dangerousness. See Powell v. Florida, supra, 579 F.2d at 333; United States v. Ecker, 177 U.S.App.D.C. 31, 49-50, 543 F.2d 178, 196-97 (1976). Though an acquittal on grounds of insanity absolves the actor of criminal responsibility for the violent act, the verdict necessarily establishes that the person committed the act:\n\"Plainly the acquittal by reason of insanity reflects a jury determination, beyond a reasonable doubt, that except for the defense of insanity, defendant did do the act, e. g., kill the deceased, and have the intent, that constitutes the substantive crime without any exculpation or mitigation in non-insanity defenses (e. g. self-defense). Lynch v. Overholser, 369 U.S. 705, 714, 82 S.Ct. 1063, 8 L.Ed.2d 211 . . . (1962). If a jury is not ready to make that determination it must acquit completely, without going on to consider the insanity defense.\"\nDixon v. Jacobs, 138 U.S.App.D.C. 319, 331, 427 F.2d 589, 601 (1970) (Leventhal, J. concurring). Thus a verdict of not guilty by reason of insanity establishes that the acquittee has once been dangerous to society because of his mental condition.\nIn the instant case, in the absence of evidence of recent overt behavior indicating that petitioner would have a relapse, the fact that petitioner had committed a violent act in his past provided the only evidence that petitioner if released might become dangerous once again.[16] While an insanity acquittal may be uncontroverted evidence of prior violent conduct of the individual, its probative value in predicting future dangerousness depends in large part on how far in the past the violent act occurred. At the time of the first commitment hearing in May 1974, approximately three years had passed since petitioner had shot his next-door neighbor; by the time of the second commitment hearing in December 1974, another six months had passed; and by the time of the third commitment hearing in October 1975, a total of a little over four years had passed. In these circumstances, it was possible to conclude that petitioner's past violent conduct constituted some relevant evidence of his possible future dangerous behavior; however, without more evidence in the way of *1071 expert opinion that his earlier dangerousness continued, this was insufficient to satisfy the state's burden of proof. As the past act becomes more and more remote, the courts should increasingly focus on the recent overt acts, threats or attempts of the insanity acquittee. Otherwise the acquittee will be forced to serve a life sentence on the basis of a past act for which he was not found legally responsible. Here, the state courts effectively held: \"once dangerous, always dangerous.\" Thus the state courts in effect placed the burden on petitioner to prove that he was not dangerously mentally ill. Whether it was a constitutional error to place this burden on the petitioner is considered next.\n\nB. Burden of Proof\n\nAn examination of the state court decisions, see section I supra, reveals that the state courts effectively shifted the burden of proof to the petitioner on the issue of whether he was \"mentally ill to the extent that his release would constitute a danger to himself or others.\" Rather than require the state to prove that petitioner, if released, would have a relapse and again become dangerous, the state courts required petitioner to prove that he would not have a relapse and thereby become dangerous. This shifting of the burden of proof violated the statutorily imposed burden of proof, which requires the state to prove \"by a preponderance of the evidence\" that the individual is dangerously mentally ill. Conn.Gen.Stat. \u00a7 53a-47. A state law violation alone, however, is not cognizable under 28 U.S.C. \u00a7 2254; on a petition by a state prisoner for a writ of habeas corpus, this court can only correct errors of constitutional magnitude. Mapp v. Warden, 531 F.2d 1167, 1173 (2d Cir.), cert. denied, 429 U.S. 982, 97 S.Ct. 498, 50 L.Ed.2d 592 (1976); United States ex rel. Stanbridge v. Zelker, 514 F.2d 45, 50 (2d Cir. 1975); see Cupp v. Naughten, 414 U.S. 141, 146, 94 S.Ct. 396, 38 L.Ed.2d 368 (1973); Tollett v. Henderson, 411 U.S. 258, 266, 93 S.Ct. 1602, 36 L.Ed.2d 235 (1973).\nWhether shifting the burden of proof to petitioner also constituted a violation of petitioner's constitutional rights is less clear. Neither the United States Supreme Court nor the Second Circuit Court of Appeals has ruled on what burden and standard of proof are required under the due process clause to confine an insanity acquittee on the ground that he is mentally ill and dangerous to himself or others. In the context of involuntary civil commitments, the Supreme Court recently held that in order to involuntarily commit an individual for an indefinite period in a state mental hospital, due process requires that the state prove by \"clear and convincing evidence\" that the individual is mentally ill and dangerous to himself or others. Addington v. Texas, ___ U.S. ___, ___ - ___, 99 S.Ct. 1804, 60 L.Ed.2d 323 (1979).[17]\nThe fact that such a heavy burden of proof was constitutionally required of the state in Addington might indicate that the constitution requires at a minimum that the burden of proof be placed on the state in the context of the confinement of insanity acquittees.[18] In response to this argument, *1072 which has not been specifically presented to this court, it is sufficient to note that while the Supreme Court has gone a long way in protecting the constitutional rights of persons involuntarily confined for treatment, it has not yet extended the rule of Addington to the instant case. The following dicta of Justice Harlan in Lynch v. Overholser, 369 U.S. 705, 711-15, 82 S.Ct. 1063, 8 L.Ed.2d 211 (1962), where a clear distinction was made between the basis for the confinement of an insanity acquittee and one civilly committed, indicates that when an individual's original commitment is based on his own contention that he should not be punished for his wrongful conduct because of his insanity, this diminishes the fundamentality of his liberty interests:\n\"The criminal defendant who chooses to claim that he was mentally irresponsible when his offense was committed is in quite a different position. It is true that he may avoid the ordinary criminal penalty merely by submitting enough evidence of an abnormal mental condition to raise a reasonable doubt of his responsibility at the time of committing the offense. Congress might have thought, however, that having successfully claimed insanity to avoid punishment, the accused should then bear the burden of proving that he is no longer subject to the same mental abnormality which produced his criminal acts. Alternatively, Congress might have considered it appropriate to provide compulsory commitment for those who successfully invoke an insanity defense in order to discourage false pleas of insanity. We need go no further here than to say that such differentiating considerations are pertinent to ascertaining the intended reach of this statutory provision.\"\nId. at 715, 82 S.Ct. at 1069-1070. While this dicta is not a square discussion of the constitutional issue, it does clearly imply that a state can, consistent with the Constitution, require an insanity acquittee, rather than the state, to carry the burden of proof at a release-from-commitment hearing on the issue of the acquittee's mental condition. Cf. Leland v. Oregon, 343 U.S. 790, 72 S.Ct. 1002, 96 L.Ed. 1302 (1952); Patterson v. New York, 432 U.S. 197, 205, 97 S.Ct. 2319, 53 L.Ed.2d 281 (1977) (a state may constitutionally place the burden of proof of insanity on a criminal defendant). Since Supreme Court dicta must be given considerable weight and cannot be ignored, see United States v. Bell, 524 F.2d 202, 206 (2d Cir. 1975), this court cannot hold that the state court's shifting of the burden of proof in this case constituted a constitutional violation. See Ragsdale v. Overholser, 108 U.S.App.D.C. 308, 314, 281 F.2d 943, 949 (1960) (Burger, J.) (placing the burden of proof on the insanity acquittee to establish eligibility for release from a mental institution \"violates no constitutional guarantee\"). It is ironic that where, as here, the Connecticut legislature has placed a more stringent burden on the state than the Constitution demands, the state courts' failure to comply with the State statute is not an error which this court can correct under 28 U.S.C. \u00a7 2254. See cases cited supra.\nThe temptation to extend the rule of Addington here, in spite of the dicta of Lynch v. Overholser, is easy to resist in the instant case since the Connecticut statutory scheme provides petitioner with substantially the same relief this court would grant him if the state courts were held to have committed constitutional error. If this court had the power to grant whatever relief \"law and justice require,\" 28 U.S.C. \u00a7 2243, it would do no more than require the state court to hold a prompt hearing at which the proper allocation of the burden of proof would be applied. To a considerable extent, this avenue of relief has been wrought by the Connecticut legislature in section (c) of Conn.Gen.Stat. \u00a7 53a-47, quoted in note 4, supra.\nWhile section 53a-47(c) leaves the state courts with some discretion in deciding when to told a hearing to determine petitioner's *1073 present mental condition, it is hoped that the consideration of this case by this court has not been without usefulness. Since the state courts did improperly shift the burden of proof, in violation of Conn. Gen.Stat. \u00a7 53a-47, it would be only fair that petitioner be given a prompt hearing under section 53a-47(c), at which the state court would follow the statutory mandate requiring proof by the state by a \"preponderance of the evidence.\" Furthermore, at this hearing, both the petitioner and the state court could give closer attention and consideration to subsection (e)(2) of section 53a-47, which appears to have played little role in the previous state court decisions. That subsection provides: \"The court may order that such person be released under such conditions and supervision as the court deems appropriate to his situation.\" (Emphasis added.) See O'Connor v. Donaldson, 422 U.S. at 576, 95 S.Ct. 2486, quoted supra. Now that petitioner has undergone several years of treatment at the state mental hospital, it may well be that even if his underlying mental illness remains, petitioner can be released in an outpatient setting, where his regular use of medication and management of his own affairs can be monitored in such a way that petitioner would not pose a danger to himself or others.[19]\nFor the foregoing reasons, the petition for a writ of habeas corpus is denied.\nSO ORDERED.\nNOTES\n[1] According to the Connecticut Supreme Court this meant that at his trial the jury found \"that at the time of the commission [of the offense] there was at least reasonable doubt as to his sanity.\" State v. Warren, 169 Conn. 207, 215, 363 A.2d 91, 96 (1975).\n[2] Conn.Gen.Stat. \u00a7 53a-47(a) provides:\n\n\"(1) When any person charged with an offense is acquitted on the grounds of mental disease or defect, the court shall order such person to be temporarily confined in any of the state hospitals for mental illness for a reasonable time, not to exceed ninety days, for an examination to determine his mental condition . . .. (2) The person to be examined shall be informed that, in addition to the examination provided for in subdivision (1), he has a right to be examined during such confinement by a psychiatrist of his own choice. (3) Within sixty days of the confinement pursuant to subdivision (1), the superintendent of such hospital and the retained psychiatrist, if any, shall file reports with the court setting forth their findings and conclusions as to whether such person is mentally ill to the extent that his release would constitute a danger to himself or others. Copies of such reports shall be delivered to the state's attorney or prosecutor and to counsel for such person. (4) Upon receipt of such reports, the court shall promptly schedule a hearing. If the court determines that the preponderance of the evidence at the hearing establishes that such person is mentally ill to the extent that his release would constitute a danger to himself or others, the court shall confine such person in a suitable hospital or other treatment facility.\"\n[3] The state court made several findings, the following of which represent the gist of those findings:\n\n\"15. [It is] Dr. Lee's opinion [that] if the defendant was released from the hospital and he failed to take the medication prescribed for him, he would constitute a danger to himself and others.\n\". . . .\n\"21. Recent studies from the Veterans' Administration Hospital show that close to fifty per cent of the readmissions to those hospitals were due to the failure of patients to realize the need to continue taking medication for an indefinite period of time.\n\". . . .\n\"23. The defendant's condition is not eliminated by medication; it is only controlled. In other words, medication does not affect the cause, only the symptoms.\n\"23a. Once released from a mental institution, there is no way in which authorities can control whether the defendant will faithfully and constantly take his medication.\"\nPetitioner's Exh. C at 10-11.\n[4] Conn.Gen.Stat. \u00a7 53a-47(c) provides in full:\n\n\"(1) Upon certification by the superintendent of the hospital or institution that, in his opinion, such person is no longer mentally ill to the extent that his release would constitute a danger to himself or others, the court may order the release of the person confined at the expiration of thirty days from the time such certificate is filed. (2) At the time such certificate is filed with the court, a copy shall be furnished to the state's attorney or prosecutor who may request a hearing as to whether such person should be released. At such hearing, evidence of mental condition may be submitted. The confined person shall be released unless the state establishes by a preponderance of the evidence that such person is, at the time of hearing, mentally ill to the extent that his release would constitute a danger to himself or others. (3) The superintendent shall, during such confinement, submit to the court at least every six months a written report with respect to the mental condition of such person. Copies of such report shall be furnished to the state's attorney or prosecutor and counsel for the confined person. The court, upon its own motion or at the request of the parties, may at any time hold a hearing to determine whether such person should be released prior to the expiration of the maximum period, in accordance with the standards set forth in subdivision (1), provided such a hearing shall be held at least every five years.\"\n[5] The first commitment hearing was precipitated by an order under Conn.Gen.Stat. \u00a7 53a-47(a)(1) \u0097confining petitioner to a mental hospital for not more than 90 days for an examination to determine the petitioner's mental condition and reports of findings and conclusions by the superintendent of such hospital as to mental illness and danger to self or others. Although reports are to be delivered also to the state's attorney or prosecutor, this section does not expressly authorize them to participate in the hearing. Under section 53a-47(c)(1), if the superintendent certifies that in his opinion the committed person is no longer mentally ill to the extent that his release would constitute a danger to himself or others, the state's attorney or prosecutor, under section 53a-47(c)(2), may request a hearing.\n[6] Dr. Lee concluded his written psychiatric report by stating:\n\n\"At this time I do not consider Mr. Warren ill to the extent that his release would constitute a danger to himself or others. Continued favorable prognosis, however, must be based on the continued use of psychotropic medication and regular attendance at a psychiatric out-patient department.\" Petitioner's Exh. A at 18a.\nDr. Voelkening concluded his report by stating:\n\"During my examination, I was unable to detect clinical evidence of depression. There was no disorder in thinking and no disorder in perception, such as hallucinations. He impressed me as being of average intelligence. His improvement is most likely due to regular administration of tranquilizers, and he should continue to take these regularly.\n\"Based on my professional background and experience, I do not consider Mr. Warren ill to the extent where his release would constitute a danger to himself or others.\" Id. at 21a.\n[7] As a representative example, the following is an excerpt from Dr. Voelkening's report:\n\n\"Since I submitted my last evaluation of Mr. Warren, there have been no drastic changes in his condition or in his adjustment in the hospital. . . .\n\". . . .\n\". . . At the present time there is nothing to indicate severe or overt psychopathology. His thinking is logical and rational and is free of any delusional thoughts. Hallucinations are absent. Cognition, memory and orientation are intact and he seems to be of average intelligence. Mr. Warren is presently receiving injectable Prolixin; namely, Prolixin Decanoate 50 mgs. I. M. every two weeks as well as Tremin 5 mgs. twice a day to counteract possible side-effects from Prolixin.\n\"Based on this most recent examination and a review of the available records, I have come to the conclusion that, at this time, Mr. Warren is no longer mentally ill to the extent that his release would constitute a danger to others or to himself. His improvement can be explained as a result of living in a structured environment in the hospital where he is kept busy and the regular administration of psychotropic medication.\" Petitioner's Exh. L.\n[8] The court based its conclusion on its findings, inter alia, that\n\n\"it cannot be said unequivocally that he will not be a danger; if he did not take the prescribed drugs he could have the overt symptoms of paranoid schizophrenia and he could be psychotic in six weeks; a failure to take the drugs could result in a recurrence of the symptoms, now controlled, which the patient might not recognize; . . . it is a fact that most patients including paranoid schizophrenics, who are released and feel better stop taking their medicine; if he did not take the tofranil, he might develop depression and if this continued long enough he would again be paranoid schizophrenic, would project his guilt to others and then would be dangerous; . . . about fifty per cent of all readmissions to Veterans' Hospitals for mental patients are former patients who did not continue to take the prescribed medications.\"\nPetitioner's Exh. I at 4-6.\n[9] Petitioner does not have to pursue state habeas corpus relief to exhaust state remedies once the highest state court has passed upon his constitutional claims. See Brown v. Allen, 344 U.S. 443, 449 n. 3, 73 S.Ct. 397, 97 L.Ed. 469 (1953).\n[10] Although the Supreme Court of Connecticut denied the petitioner's motion to amend the record and its appeal to include the record of the second Connecticut hearing, it did consider that record in the appendix to petitioner's brief: \"After a review of the evidence as printed in the appendix to the defendant's brief, we conclude that the facts found by the court are amply supported by the evidence in the case and established by a preponderance of the evidence.\" State v. Warren, 169 Conn. at 213, 363 A.2d at 94, 95.\n[11] Respondent also argues that petitioner's constitutional challenge to the state court rulings of 1974 and 1975 is now moot on the grounds that petitioner's present confinement is based on subsequent psychiatric reports which state that petitioner's mental condition has deteriorated and that petitioner's release would now constitute a danger to himself or others. Respondent's argument must be rejected since where the legal questions presented are \"capable of repetition, yet evading review,\" the questions will not be held to be moot. See Sosna v. Iowa, 419 U.S. 393, 399-400, 95 S.Ct. 553, 557, 42 L.Ed.2d 532 (1975).\n[12] See Developments in the Law\u0097Civil Commitment of the Mentally Ill, 87 Harv.L.Rev. 1190, 1212-19 (urging that a finding of incapacity be a threshold requirement for civil commitment); see generally Winters v. Miller, 446 F.2d 65 (2d Cir.), cert. denied, 404 U.S. 985, 92 S.Ct. 450, 30 L.Ed.2d 369 (1971).\n[13] Where a judicial conclusion of \"dangerousness\" will result in a deprivation of liberty, what due process requires to support such a conclusion presents a question of federal constitutional law. See Hollis v. Smith, 571 F.2d 685, 695-96 (2d Cir. 1978); Doremus v. Farrell, 407 F.Supp. 509, 513 (D.Neb.1975) (three-judge court); Lynch v. Baxley, 386 F.Supp. 378, 390-91 (M.D.Ala.1974) (three-judge court); Lessard v. Schmidt, 349 F.Supp. 1078, 1093 (E.D.Wis. 1972) (three-judge court), vacated and remanded on other grounds, 414 U.S. 473, 94 S.Ct. 713, 38 L.Ed.2d 661 (1974), judgment reinstated, 379 F.Supp. 1376 (E.D.Wis.1974), vacated and remanded on other grounds, 421 U.S. 957, 95 S.Ct. 1943, 44 L.Ed.2d 445 (1975), judgment reinstated, 413 F.Supp. 1318 (E.D.Wis.1976).\n[14] For example, the court in Lynch v. Baxley, supra, stated:\n\n\"Due process requires that the need for confinement be based upon a substantial likelihood that dangerous behavior will be engaged in unless restraints are applied. While the actual assessment of the likelihood of danger calls for an exercise of medical judgment, the sufficiency of the evidence to support such a determination is fundamentally a legal question. A mere expectancy that danger-productive behavior might be engaged in does not rise to the level of legal significance when the consequence of such an evaluation is involuntary confinement. To confine a citizen against his will because he is likely to be dangerous in the future, it must be shown that he has actually been dangerous in the recent past and that such danger was manifested by an overt act, attempt or threat to do substantial harm to himself or to another.\"\n386 F.Supp. at 391 (footnote omitted).\n[15] The state court findings and conclusions on the issue of whether petitioner might discontinue taking his medication after release, and therefore might become dangerous to himself or others, were based in large part on testimony regarding studies from the Veterans' Administration which showed that approximately 50 percent of all mental patients readmitted to those hospitals were former patients who did not continue to take their prescribed medication. See Petitioner's Exh. C at 10; Petitioner's Exh. E at 26; Petitioner's Exh. I at 5-6. The V.A. studies discussed and relied upon by the state courts, however, reveal nothing about whether this petitioner, or even patients in petitioner's situation generally, would discontinue taking medication upon release. The V.A. studies do not offer any evidence as to the statistical likelihood of released patients failing to take medication; the studies only refer to the percentage of patients readmitted who were readmitted for failure to take their medication. No statistics were presented to the state courts concerning the percentage of all released patients who subsequently failed to take their medication. See Petitioner's Exh. B at 18a.\n[16] On the issue of whether petitioner was mentally ill, the evidence before the state courts unequivocally established that petitioner had an underlying mental illness at the time of the commitment hearings.\n[17] See Hollis v. Smith, 571 F.2d 685, 695-96 (2d Cir. 1978) (where continued confinement of a state prisoner serving an indeterminate sentence as a sex offender depended upon a court determination that the person presented a danger to society, due process requires that the determination of dangerousness be based upon \"clear, unequivocal, and convincing evidence\").\n\nThe Connecticut civil commitment statute, Conn.Gen.Stat. \u00a7 17-176 et seq., comports with the due process requirement established by Addington. Section 17-178(c) of the statute states that a court may involuntarily commit an individual to a hospital only after the court finds \"by clear and convincing evidence that the person . . . is mentally ill and dangerous to himself or herself or others or gravely disabled.\"\n[18] If the rule of Addington were to govern this case, it is clear enough that the state did not meet the burden of proof required in that case. For example, the conclusion of the state court following petitioner's third commitment hearing that \"it cannot be said unequivocally that [petitioner] will not be a danger,\" quoted more fully supra n. 8, can be upheld only on the basis that it was the petitioner's burden to prove that he would continue to subject himself to prescribed treatment and medication. While the Connecticut statute did not place that burden upon him, it does not necessarily follow, however, that it was a violation of his constitutional rights to do so.\n[19] The courts must be mindful of Judge Smith's statement in Winters v. Miller, 446 F.2d 65, 68 (2d Cir. 1971):\n\n\"A finding of `mental illness' even by a judge or jury, and commitment to a hospital, does not raise even a presumption that the patient is `incompetent' or unable adequately to manage his own affairs.\"\n"} -{"text": " PUBLISHED\n\n\nUNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\nANGELA JOHNSON, \uf8fc\n Plaintiff-Appellant,\n v.\n \uf8fd No. 12-1381\nAMERICAN UNITED LIFE INSURANCE\nCOMPANY,\n Defendant-Appellee.\n \uf8fe\n Appeal from the United States District Court\n for the Middle District of North Carolina, at Greensboro.\n L. Patrick Auld, Magistrate Judge.\n (1:09-cv-00037-LPA-LPA)\n\n Argued: December 5, 2012\n\n Decided: May 24, 2013\n\n Before TRAXLER, Chief Judge, and FLOYD and\n THACKER, Circuit Judges.\n\n\n\nReversed and remanded by published opinion. Chief Judge\nTraxler wrote the opinion, in which Judge Floyd and Judge\nThacker joined.\n\f2 JOHNSON v. AMERICAN UNITED LIFE INSURANCE\n COUNSEL\n\nARGUED: Gavin James Reardon, ROSSABI BLACK\nSLAUGHTER, PA, Greensboro, North Carolina, for Appel-\nlant. Elizabeth J. Bondurant, SMITH MOORE LEATHER-\nWOOD, LLP, Atlanta, Georgia, for Appellee. ON BRIEF: T.\nMatthew Creech, SMITH MOORE LEATHERWOOD, LLP,\nGreensboro, North Carolina, for Appellee.\n\n\n OPINION\n\nTRAXLER, Chief Judge:\n\n Richard Johnson (\"Richard\") participated in an employee\nwelfare benefit plan (\"the Plan\") that provided life insurance\nand accidental death and dismemberment (\"AD & D\") bene-\nfits through group policies issued by American United Life\nInsurance Company (\"AUL\"). When Richard died in a single-\nvehicle crash, his widow Angela Johnson (\"Johnson\")\nreceived life insurance benefits, but AUL, which also served\nas administrator for the Plan, refused to pay AD & D benefits.\nRichard was highly intoxicated at the time of his fatal crash,\nand AUL concluded that Richard\u2019s drunk-driving death was\nnot the result of an \"accident\" under the Plan. Johnson filed\nthis action under the Employee Retirement Income Security\nAct (\"ERISA\"), see 29 U.S.C. \u00a7 1132(a)(1)(B), to recover\nthese AD & D benefits. Applying a de novo standard of\nreview, the district court affirmed the denial of benefits on the\ngrounds that Richard\u2019s death was not accidental because the\nfatal crash was an \"anticipated and expected\" result of driving\nwhile intoxicated.\n\n For the reasons set forth in detail below, we must reverse.\nThe insurance policies do not define the term \"accident\"\ndespite its critical importance for determining eligibility for\nAD & D benefits. Because \"accident\" is susceptible to more\n\f JOHNSON v. AMERICAN UNITED LIFE INSURANCE 3\nthan one reasonable interpretation, we construe it against\nAUL, the drafting party, and conclude that a reasonable plan\nparticipant under similar circumstances would have under-\nstood Richard\u2019s alcohol-related crash to be an \"accident\"\nunder the policy language.\n\n The question of whether drunk-driving deaths or injuries\nare \"accidental\" for purposes of accidental death insurance\nhas perplexed the judiciary for some time.1 Given the \"sheer\nnumber of court cases nationwide involving disputes over\nclaims by drunk drivers,\" an insurer surely understands that it\nwill \"likely face claims under its AD & D policies based on\ninjuries sustained in alcohol-related collisions.\" Kovach v.\nZurich Am. Ins. Co., 587 F.3d 323, 336 (6th Cir. 2009). The\ninterpretive onus belongs on the insurers who draft these acci-\ndent insurance policies; they can eliminate dilemmas like this\none by clearly and plainly stating whether a loss caused by the\nparticipant\u2019s driving drunk is \"accidental\" so that the insured\n\"know[s] what he is getting in his insurance policy.\" Senkier\nv. Hartford Life & Accident Ins. Co., 948 F.2d 1050, 1053\n(7th Cir. 1991).\n\n Reaching this result gives us no great pleasure. Drunk driv-\ning is reckless, irresponsible conduct that produces tragic con-\n 1\n The Pennsylvania Supreme Court sums up the frustration common to\ncourts addressing this issue:\n What is an accident? Everyone knows what an accident is until\n the word comes up in court. Then it becomes a mysterious phe-\n nomenon, and, in order to resolve the enigma, witnesses are sum-\n moned, experts testify, lawyers argue, treatises are consulted and\n even when a conclave of twelve world-knowledgeable individu-\n als agree as to whether a certain set of facts made out an accident,\n the question may not yet be settled and it must be reheard in an\n appellate court.\nBrenneman v. St. Paul Fire & Marine Ins. Co., 192 A.2d 745, 747 (Pa.\n1963); see Botts v. Hartford Accident & Indem. Co., 585 P.2d 657, 660\n(Or. 1978) (\"There are probably not many words which have caused\ncourts as much trouble as \u2018accident\u2019 and \u2018accidental.\u2019\").\n\f4 JOHNSON v. AMERICAN UNITED LIFE INSURANCE\nsequences for the thousands it touches annually. But our task\nin this case is not to promote personal responsibility or\nenforce good driving habits. We must focus on the terms of\nthe policies issued under the Plan and determine whether\nRichard died as a result of an accident without \"allowing our\nmoral judgments about drunk driving to influence our\nreview.\" Kovach, 587 F.3d at 330. At bottom, this ERISA\nappeal presents a problem of contract law which requires us\nto determine the intent of the parties as reflected in the lan-\nguage of the policy.\n\n I.\n\n A.\n\n The Plan provided Richard with (1) standard AD & D and\nlife insurance benefits of $25,000 through a policy paid for by\nRichard\u2019s employer, and (2) voluntary AD & D and life insur-\nance benefits of $100,000 through a policy paid for by Rich-\nard. AUL issued both policies. Johnson is the designated\nbeneficiary under the policies.\n\n Under the AD & D provision in the policies, AUL pays\nbenefits \"[i]f a Person has an accident while insured under the\npolicy which results in a [covered] loss.\" J.A. 268. In the case\nof an accidental loss of life to the insured, the policies pay the\nprincipal benefit amount which in this case is $100,000 and\n$25,000 for the employee- and employer-paid policies,\nrespectively. The policies define \"accidental death\" as \"death\ndue to an accident, directly and independently of all other\ncauses,\" J.A. 224, but fail to define the predicate term \"acci-\ndent.\"\n\n The AD & D provision contains a limitations clause\nexpressly excluding the payment of benefits in various cir-\ncumstances:\n\n Benefits are not payable for loss due directly or indi-\n rectly to:\n\f JOHNSON v. AMERICAN UNITED LIFE INSURANCE 5\n 1. suicide or attempted suicide, whether sane or\n insane;\n\n 2. air travel as a crew member;\n\n 3. participation in a riot or from war or an act of war,\n whether declared or undeclared;\n\n 4. commission of an assault or felony;\n\n 5. the voluntary taking of:\n\n a. a prescription drug in a manner other than as\n prescribed by a physician;\n\n b. any other federally- or state-controlled sub-\n stance in an unlawful manner;\n\n c. non-prescription medication, in a manner other\n than as indicated in the printed instructions; or\n\n d. poison, except for accidental ptomaine poison-\n ing.\n\n 6. the voluntary inhaling of gas (unless due to occu-\n pational accident); or\n\n 7. sickness other than infection occurring as a result\n of accidental injury.\n\nJ.A. 226.\n\n With two exceptions, the terms of the employer- and\nemployee-paid policies are virtually identical. First, the\nemployee-paid policy includes an additional category in the\nlimitations clause for which AD & D benefits are not pay-\nable\u2014\"participation in hang-gliding, bungee jumping, auto-\nmobile racing, motorcycle racing, skydiving, rock climbing,\n\f6 JOHNSON v. AMERICAN UNITED LIFE INSURANCE\nor mountain climbing.\" J.A. 269. Second, the employee-paid\npolicy provides an additional AD & D benefit not available\nunder the employer-paid policy\u2014the \"Seat Belt\" benefit.\nAccording to the policy, \"AUL will pay an additional acci-\ndental death benefit, called the Seat Belt Benefit, if a Person\ndies as a result of an Automobile accident while properly\nwearing a Seat Belt at the time of the accident.\" J.A. 270.\n\n Significantly, the Seat Belt Benefit alone is expressly sub-\nject to a drunk-driving limitation clause:\n\n This benefit will not be paid if the Person, while\n operating the Automobile, was legally intoxicated as\n defined by applicable laws, violating traffic laws,\n racing, stunt-driving, or engaging in other similar\n activity during the accident.\n\n In addition to the above limitation, this benefit is\n subject to the further limitations and provisions of\n this AD & D section.\n\nJ.A. 270 (emphasis added).\n\n B.\n\n On August 2, 2007, at about 1:30 a.m., Richard was driving\na pickup truck owned by his employer near Myrtle Beach,\nSouth Carolina, when he lost control of the vehicle and veered\noff the road, struck a highway sign and flipped over multiple\ntimes. Richard was partially ejected from the vehicle and sus-\ntained fatal injuries. The law enforcement officer who investi-\ngated the incident reported that the primary factor\ncontributing to Richard\u2019s crash was that he was driving too\nfast for conditions. The post-incident traffic report estimated\nthat Richard had been driving 65 mph in a 50 mph zone. The\nreport contains no mention of alcohol. The Certificate of\nDeath issued by the Horry County Coroner stated under\n\"Cause of Death\" that Richard died from internal injuries\n\f JOHNSON v. AMERICAN UNITED LIFE INSURANCE 7\nfrom a motor vehicle accident occurring when \"victim lost\ncontrol of [his] vehicle, striking [the highway] pole.\" J.A.\n192. A toxicology report subsequently issued by the South\nCarolina Law Enforcement Division (\"SLED\") indicated that\nRichard\u2019s blood alcohol content (\"BAC\") was 0.289 percent\nat the time of his fatal crash, significantly higher than South\nCarolina\u2019s legal limit of .08 percent.\n\n Richard\u2019s employer submitted a claim on behalf of Johnson\nfor benefits under the two group policies. AUL immediately\npaid the life insurance benefits but refused to pay AD & D\nbenefits under the two policies (totaling $125,000). AUL\nissued a denial letter, concluding that, based on his state of\nintoxication, Richard did not die in an accident and thus did\nnot qualify for AD & D benefits:\n\n Based upon the police and medical reports pro-\n vided to AUL, Richard Johnson had a sufficient\n quantity of intoxicants in his system to make him\n lose control of his mental and physical faculties at\n the time of his fatal collision. Therefore, benefits are\n not payable under the accidental death and dismem-\n berment provisions of the policy.\n\n Mr. Johnson\u2019s death was not accidental in nature\n since it was not caused directly and independently of\n all other causes. An accident occurs when an unfore-\n seen, sudden and unexpected event, usually of an\n afflictive or unfortunate character[,] occur[s] . . . .\n\n The hazards of drinking excessively are widely\n known and widely publicized. It is clearly foresee-\n able that drinking excessive amounts of alcohol, and\n driving may result in death or bodily harm. As the\n decedent should have foreseen the consequences of\n drinking excessive amounts of alcohol, a determina-\n tion of his death not being accidental is reasonable.\n\f8 JOHNSON v. AMERICAN UNITED LIFE INSURANCE\nJ.A. 359. The denial letter also noted that the limitations\nclause specifically applicable to the Seat Belt Benefit\nexcluded any payment of benefits in light of the fact that\nRichard\u2019s BAC exceeded the legal limit.\n\n The employer sent a written request asking AUL to recon-\nsider its denial, observing that \"being intoxicated by alcohol\nis not listed as a limitation under the AD & D benefit. The\nonly reference to a limitation for legal intoxication appears on\nthe following page and appears to apply to the seat belt bene-\nfit exclusively.\" J.A. 170. On December 14, 2007, AUL again\ndenied AD & D benefits on the same grounds as before\u2014that\nRichard\u2019s death was reasonably foreseeable at his level of\nintoxication and therefore not accidental\u2014and cited general\nstatistics regarding the effect of alcohol on a driver\u2019s abilities.\nBut AUL also added a new ground for denial, focusing on\nspecific limitations in the AD & D policy provision. AUL\nsuggested that benefits were excluded because Richard died\nduring the \"commission of an assault or felony\" under South\nCarolina traffic laws but did not elaborate on this assertion.\n\n Johnson subsequently retained counsel, who appealed the\ndenial administratively, arguing that the general AD & D pro-\nvision \"does not state that legal intoxication disqualifies one\nfrom being involved in an accident.\" J.A 134. Counsel chal-\nlenged the relevance of AUL\u2019s statistics, suggesting that they\ndid not show that death was a likely result of driving while\nintoxicated and that it is far more likely that a drunk driver\ngets arrested. In fact, the \"policy does exclude payment of the\nseatbelt benefit if there is an accidental death while a person\nis legally intoxicated;\" however, \"the policy does not\nexpressly contain any such limitation for death claims (sepa-\nrate and apart from the seatbelt benefit). J.A. 134. AUL then\nissued its final denial on December 9, 2008, largely repeating\nits first several letters verbatim.\n\f JOHNSON v. AMERICAN UNITED LIFE INSURANCE 9\n C.\n\n Johnson then filed this action, contending that AUL wrong-\nfully denied her AD & D benefits. The parties filed cross-\nmotions for summary judgment.2 Defining \"accident\" by ref-\nerence to North Carolina law, the district court concluded that\nRichard\u2019s death was due to an \"accident\" only if the crash was\nthe \"unanticipated and unexpected result of an intentional,\nvoluntary act.\" J.A. 555 (internal quotation marks omitted). In\nlight of Richard\u2019s significant level of intoxication while oper-\nating his vehicle 15 mph over the speed limit, the court held\nthat his crash \"constitutes an anticipated and expected result\n(and thus not an \u2018accident\u2019 within the meaning of \u00a7 58-3-30\n. . .).\" J.A. 555. Thus, the district court granted AUL\u2019s motion\nfor summary judgment and denied Johnson\u2019s cross-motion.\n\n II.\n\n \"In an appeal under ERISA, we review a district court\u2019s\ndecision de novo, employing the same standards governing\nthe district court\u2019s review of the plan administrator\u2019s deci-\nsion.\" Williams v. Metropolitan Life Ins. Co., 609 F.3d 622,\n629 (4th Cir. 2010). In Firestone Tire & Rubber Co. v. Bruch,\nthe Supreme Court established that courts must review a\ndenial of benefits \"under a de novo standard unless the benefit\nplan gives the administrator or fiduciary discretionary author-\nity to determine eligibility for benefits or to construe the terms\nof the plan.\" 489 U.S. 101, 115 (1989). \"If such discretionary\nauthority is conferred, the courts\u2019 review is for abuse of dis-\ncretion\"; however, \"the default standard of review is de\nnovo,\" and \"abuse-of-discretion review is appropriate only\nwhen discretion is vested in the plan administrator.\" Woods v.\nPrudential Ins. Co. of Am., 528 F.3d 320, 322 (4th Cir. 2008).\nAUL stipulated below that the Plan documents do not grant\n 2\n The parties agreed to have the magistrate judge enter a dispositive rul-\ning. See 28 U.S.C. \u00a7 636(c)(1). For simplicity, we refer to the magistrate\njudge as \"the district court\" or \"the court.\"\n\f10 JOHNSON v. AMERICAN UNITED LIFE INSURANCE\nit discretionary authority to make a benefits-eligibility deter-\nmination under the policies or construe the terms of the poli-\ncies. Accordingly, our review of the denial of benefits in this\ncase is de novo, and our job is to make our own independent\ndetermination of whether Johnson was entitled to the AD &\nD benefits. The correctness, not the reasonableness, of AUL\u2019s\ndenial of AD & D benefits is our only concern in this appeal.\nCf. Eckelberry v. ReliaStar Life Ins. Co., 469 F.3d 340, 343\n(4th Cir. 2006) (\"Under [the abuse of discretion] standard, we\ndo not search for the best interpretation of a plan or even for\none we might independently adopt. Rather, when reviewing a\nplan administrator\u2019s decision, a court will not disturb any rea-\nsonable interpretation.\" (internal quotation marks omitted)).\n\n III.\n\n A.\n\n The question presented is whether Richard\u2019s fatal crash\nqualified as an \"accident,\" which is not a defined term in these\ngroup policies. \"ERISA plans are contractual documents\nwhich, while regulated, are governed by established principles\nof contract and trust law.\" Haley v. Paul Revere Life Ins. Co.,\n77 F.3d 84, 88 (4th Cir. 1996). Although courts apply federal\ncommon law rules of contract interpretation when construing\na policy governed by ERISA, see United McGill Corp. v.\nStinnett, 154 F.3d 168, 171 (4th Cir. 1998); Denzler v. Quest-\nech, Inc., 80 F.3d 97, 101 (4th Cir. 1996), we look to \"princi-\nples of state common law to guide our analysis,\" Wheeler v.\nDynamic Eng\u2019g, Inc., 62 F.3d 634, 638 (4th Cir. 1995). Thus,\nboth state law and general contract law principles inform our\nattempt to divine the meaning of an undefined term in an\nERISA plan. See Regents of the Univ. of Mich. v. Employees\nof Agency Rent\u2013A\u2013Car Hosp. Assoc., 122 F.3d 336, 339 (6th\nCir. 1997).\n\n A paramount principle of contract law requires us to\nenforce the terms of an ERISA insurance plan according to\n\f JOHNSON v. AMERICAN UNITED LIFE INSURANCE 11\n\"the plan\u2019s plain language in its ordinary sense,\" Wheeler, 62\nF.3d at 638, that is, according to the \"literal and natural mean-\ning\" of the Plan\u2019s language, Stinnett, 154 F.3d at 172 (internal\nquotation marks omitted); see Glocker v. W.R. Grace & Co.,\n974 F.2d 540, 544 (4th Cir. 1992) (\"The primary effort should\nbe to ascertain the intent of the parties . . . by giving language\nits ordinary meaning . . . .\"). Courts should determine \"the\ncommon and ordinary meaning as a reasonable person in the\nposition of the plan participant would have understood the\nwords.\" Cardoza v. United of Omaha Life Ins. Co., 708 F.3d\n1196, 1203 (10th Cir. 2013) (internal quotation marks omit-\nted). Our inquiry, then, requires us to consider \"what a reason-\nable person in the position of the participant would have\nunderstood those terms to mean.\" LaAsmar v. Phelps Dodge\nCorp. Life Acc. Death & Dismem. & Dep. Life Ins. Plan, 605\nF.3d 789, 801 (10th Cir. 2010).\n\n Moreover, \"ERISA plans, like contracts, are to be con-\nstrued as a whole.\" Alexander v. Primerica Holdings, Inc.,\n967 F.2d 90, 93 (3d Cir. 1992). Courts must look at the\nERISA plan as a whole and determine the provision\u2019s mean-\ning in the context of the entire agreement. See generally\nRestatement (Second) of Contracts \u00a7 202(2). And, because\ncontracts are construed as a whole, courts should seek to give\neffect to every provision in an ERISA plan, avoiding any\ninterpretation that renders a particular provision superfluous\nor meaningless. See Harris v. Epoch Group, L.C., 357 F.3d\n822, 825 (8th Cir. 2004) (\"[An ERISA plan] should be inter-\npreted as to give meaning to all of its terms-presuming that\nevery provision was intended to accomplish some purpose,\nand that none are deemed superfluous.\" (internal quotation\nmarks omitted)); see generally Restatement (Second) of Con-\ntracts \u00a7 203(a) (\"[A]n interpretation which gives a reasonable,\nlawful, and effective meaning to all the terms is preferred to\nan interpretation which leaves a part unreasonable, unlawful,\nor of no effect . . . .\").\n\n If application of these primary principles of construction\nfails to provide clarity and the plan language remains ambigu-\n\f12 JOHNSON v. AMERICAN UNITED LIFE INSURANCE\nous, then we are \"compelled to apply the rule of contra\nproferentum and construe the terms strictly in favor of the\ninsured,\" Wegner v. Standard Ins. Co., 129 F.3d 814, 818 (5th\nCir. 1997), and \"in accordance with the reasonable expecta-\ntions of the insured,\" Gallagher v. Reliance Standard Life Ins.\nCo., 305 F.3d 264, 269 (4th Cir. 2002) (internal quotation\nmarks omitted); see Glocker, 974 F.2d at 544. \"An ambiguity\nexists where the language of a contract is fairly and reason-\nably susceptible to either of the constructions asserted by the\nparties.\" Glover v. First Union Nat\u2019l Bank, 428 S.E.2d 206,\n209 (N.C. Ct. App. 1993). Whether an ambiguity in fact\nremains is ultimately a question of law for the court. See\nBicket v. McLean Sec., Inc., 478 S.E.2d 518, 521 (N.C. Ct.\nApp. 1996).\n\n B.\n\n We begin, therefore, with the plain language of the dis-\nputed provision, viewed in the context of the policy as a\nwhole. As noted, the policies define \"accidental death\" as\n\"death due to an accident, directly and independently of all\nother causes,\" without defining the term \"accident.\" Citing\nvarious dictionary definitions, Johnson suggests that the most\nnatural and common understanding of the term \"accident\" is\nan unintentional, unplanned incident that occurs as a result of\na careless error. See Merriam\u2013Webster Dictionary Online,\nhttp://www.merriam-webster.com (last visited April 25, 2013)\n(defining accident as \"an unforeseen and unplanned event or\ncircumstance\"); The American Heritage Dictionary,\nhttp://www. ahdictionary.com (last visited April 25, 2013)\n(\"An unexpected and undesirable event, especially one result-\ning in damage or harm: an accident on the assembly line; car\naccidents on icy roads.\"). More or less equating \"accident\"\nwith an absence of intent, Johnson reasons that the average\nlayperson would understand a loss resulting from a vehicular\ncrash to be accidental where the crash or loss was not planned\nor intentionally caused. Johnson argues that a vehicular fatal-\nity, even in the instance of an intoxicated driver, would there-\n\f JOHNSON v. AMERICAN UNITED LIFE INSURANCE 13\nfore qualify as an \"accidental death\" unless there was some\nevidence to show that the driver planned to crash the vehicle\nand cause his death.\n\n On the other end of the spectrum, the term \"accident\" could\nalso be understood to exclude any incident where the conse-\nquences of intentional conduct are expected or reasonably\nforeseeable. See American Heritage Dictionary, supra, (giv-\ning alternate definition of accident as \"[a]n unforeseen event\nthat is not the result of intention or has no apparent cause\").\nStanding alone, then, the word \"accident\" is reasonably sus-\nceptible to more than one interpretation. See Olympic Airways\nv. Husain, 540 U.S. 644, 651 n.6 (2004) (\"The term \u2018accident\u2019\nhas at least two plausible yet distinct definitions. On the one\nhand, . . . \u2018accident\u2019 may be defined as an unintended event.\nOn the other hand, . . . the term \u2018accident\u2019 may be defined as\nan event that is \u2018unusual\u2019 or \u2018unexpected,\u2019 whether the result\nof intentional action or not.\" (internal citation omitted)).\n\n Of course, we must construe the document as a whole.\nIndeed, ambiguous language in one portion of an ERISA plan\nmay well be clarified by reference to unambiguous language\nin another portion of the plan. See Temme v. Bemis Co., 622\nF.3d 730, 734-35 (7th Cir. 2010). Here, there are a few other\nportions of each policy that potentially bear on the meaning\nand scope of \"accident.\" First, the policies include a \"Limita-\ntions Clause\" specifically applicable to AD & D benefits. This\nprovision expressly excludes the payment of AD & D benefits\nfor losses resulting from a wide spectrum of conduct, from\nintentional acts like suicide to conduct that could be consid-\nered highly likely to produce a loss, such as \"participation in\na riot or . . . war\" and \"motorcycle racing.\" Driving-drunk col-\nlisions are not expressly and categorically excluded from AD\n& D coverage, meaning at the very least that there are some\ncircumstances in which AD & D benefits would be paid for\ninjuries to drunk drivers. See Eckelberry, 469 F.3d at 345\n(\"The simple fact that drunk driving occurred does not mean\nthere was no accident under the policy. If the insurer did not\n\f14 JOHNSON v. AMERICAN UNITED LIFE INSURANCE\nintend to cover any injury to a drunk driver, then drunk driv-\ning would have been a specific exclusion listed in the plan.\"\n(emphasis added)).\n\n Second, the Seat Belt Benefit provided by the employee-\npaid policy has an express \"limitation\" that specifically\nexcludes payment of this benefit where the insured was\nlegally intoxicated:\n\n This benefit will not be paid if the Person, while\n operating the Automobile, was legally intoxicated as\n defined by applicable laws, violating traffic laws,\n racing, stunt-driving, or engaging in other similar\n activity during the accident.\n\n In addition to the above limitation, this benefit is\n subject to the further limitations and provisions of\n this AD & D section.\n\nJ.A. 270 (emphasis added). This provision makes clear that\npayment of the Seat Belt Benefit is not only subject to the\ngeneral AD & D limitations but also to a separate and distinct\ndrunk-driving limitation. There would be no reason to include\nan express limitation excluding payment of the Seat Belt Ben-\nefit where the insured was driving while intoxicated unless a\ndrunk-driving collision otherwise qualified as an \"accident\" in\nthe first place. Indeed, \"[t]he purpose of an exclusion is to\ntake something out of the coverage that would otherwise have\nbeen included in it.\" Columbia Cas. Co. v. Georgia & Florida\nRailNet, Inc., 542 F.3d 106, 113 (5th Cir. 2008). Any other\nreading would relegate this language to mere surplusage.\n\n While the limitations clauses clearly suggest that losses suf-\nfered in a drunk-driving crash can qualify as accidental under\nthe Plan, these clauses do not necessarily clarify the definition\nor scope of \"accident.\" Like many other courts to have wres-\ntled with the meaning of the undefined term \"accident\" as\napplied to a claim arising from a drunk-driving crash, we find\n\f JOHNSON v. AMERICAN UNITED LIFE INSURANCE 15\nit to be ambiguous. See, e.g., LaAsmar, 605 F.3d at 804 (col-\nlecting cases and noting that \"[s]urely there can be no ques-\ntion in this case that the [undefined] term \u2018accident,\u2019 as used\nin this Plan and as applied to [an insured\u2019s drunk driving\nfatality], is ambiguous.\"); cf. Wickman v. Northwestern Nat\u2019l\nIns. Co., 908 F.2d 1077, 1087 (1st Cir. 1990) (\"Case law is\nfairly consistent in defining an accident, using equally ambig-\nuous terms such as undesigned, unintentional, and unex-\npected.\").\n\n Thus, we \"apply the rule of contra proferentum and con-\nstrue the terms strictly in favor of the insured,\" Wegner, 129\nF.3d at 818, and \"in accordance with the reasonable expecta-\ntions of the insured,\" Gallagher, 305 F.3d at 269. We con-\nclude that a reasonable plan participant in circumstances\nsimilar to those before us would easily have understood that\nthis accident was covered. In this case, there is no evidence\nof intent. The Traffic Collision Report Form submitted by the\nresponding law enforcement officer stated simply that Rich-\nard \"was traveling too fast for conditions . . . traveled off the\nroadway, struck a highway sign, and overturned several\ntimes.\" J.A. 393. The Certificate of Death issued by the Horry\nCounty Coroner also indicated the \"Manner of Death\" was an\n\"accident\" and listed the cause of death as \"Internal Injuries\"\nfrom an \"MVA,\" i.e., a motor vehicle accident. J.A. 392. See\nKovach, 587 F.3d at 333 (concluding that \"an ordinary person\nwould characterize [the insured\u2019s] collision at the intersection\nto be an accident\" even though the insured had been intoxi-\ncated while riding his motorcycle because \"he did not \u2018expect\u2019\nor \u2018intend\u2019 to hit another vehicle\"). In light of the general\nLimitations Clause and the Limitations Clause specifically\napplicable to the Seat Belt Benefit, a reasonable plan partici-\npant would have believed that Richard\u2019s loss was the result of\nan accident covered by the policies.\n\n \"Strictly construing ambiguous terms presents ERISA pro-\nviders with a clear alternative: draft plans that reasonable peo-\nple can understand or pay for ambiguity.\" Rasenack v. AIG\n\f16 JOHNSON v. AMERICAN UNITED LIFE INSURANCE\nLife Ins. Co., 585 F.3d 1311, 1320 (10th Cir. 2009) (internal\nquotation marks omitted). As the Tenth Circuit aptly stated,\n\n It is not too much to ask of ERISA insurers to set\n forth explicitly what is and is not an accident cov-\n ered by their AD & D policy, and to state unambigu-\n ously whether death and disability caused by the\n insured\u2019s drunk driving is an accident and, if not, to\n include a workable definition of drunkenness and of\n causation attributed to such drunkenness.\n\nLaAsmar, 605 F.3d at 805.\n\n AUL could have defined \"accident\" or even imposed a lim-\nitation on benefits for any loss resulting from the insured\u2019s\ndriving with a blood alcohol content above the legal limit of\nthe state in which the vehicle is driven. Instead, the policy\nlanguage simply leaves \"accident\" undefined and susceptible\nto more than one interpretation. Reviewing Johnson\u2019s claim\nde novo, we are constrained to construe the term in her favor\nand conclude that Richard\u2019s loss was \"accidental.\"\n\n C.\n\n AUL contends that when an ERISA plan fails to define \"ac-\ncident\" or \"accidental\" with sufficient clarity, circuit prece-\ndent requires us to apply the two-step framework embraced\nby Eckelberry v. ReliaStar Life Insurance Company. See 469\nF.3d at 343-46. Eckelberry bears some factual similarities to\nthe case before us. Eckelberry was insured under an AD & D\npolicy provided by his employer that afforded him benefits if\nhe died \"due to an accident.\" Eckelberry died in a single-\nvehicle crash, and it was later determined that his BAC was\n50 percent higher than West Virginia\u2019s legal limit at the time\nof the accident. The plan administrator denied benefits, con-\ncluding that Eckelberry\u2019s death was not unexpected in light of\nhis intoxicated state and, therefore, was not \"due to an acci-\ndent.\" Unlike the AUL policy before us, however, the Eckel-\n\f JOHNSON v. AMERICAN UNITED LIFE INSURANCE 17\nberry policy actually supplied a definition of \"accident\"\u2014\"an\nunexpected and sudden event which the insured does not fore-\nsee.\" 469 F.3d at 342 (internal quotation marks omitted). The\ncontract interpretation problem in Eckelberry revolved around\nthe terms \"unexpected\" and \"foresee,\" which were not\ndefined. Also, unlike the plan presently before us, the Eckel-\nberry plan reserved discretionary interpretive authority to the\ninsurer/plan administrator, and therefore on appeal the central\nquestion was whether the insurer abused its discretion in con-\ncluding Eckelberry\u2019s drunk-driving death was not \"unex-\npected\" and therefore not accidental. Id. at 343.\n\n In determining whether the drunk-driving collision quali-\nfied as \"unexpected,\" Eckelberry noted that numerous courts\nhave followed the analysis established by the First Circuit in\nWickman v. Northwestern National Insurance Co. to deter-\nmine the meaning of \"accident\" when an insurance policy\nfails to provide a definition or provides an ambiguous one:\n\n Because the Plan\u2019s undefined terms and indeed the\n term \"accident\" are not always susceptible to easy\n application, many federal courts have adopted the\n framework laid out in [Wickman] to clarify the\n meaning of \"unexpected.\" Initially, the court asks\n whether the insured subjectively expected his actions\n to result in injury or death. . . . However, \"if the fact-\n finder . . . finds the evidence insufficient to accu-\n rately determine the insured\u2019s subjective expectation,\n the fact-finder should then engage in an objective\n analysis of the insured\u2019s expectations.\" This \"objec-\n tive analysis\" asks \"whether a reasonable person,\n with background and characteristics similar to the\n insured, would have viewed the injury as highly\n likely to occur as a result of the insured\u2019s intentional\n conduct.\"\n\nEckelberry, 469 F.3d at 343 (emphasis added) (internal cita-\ntions omitted); see Wickman, 908 F.2d at 1088. Eckelberry\n\f18 JOHNSON v. AMERICAN UNITED LIFE INSURANCE\nrecognized that in applying Wickman, courts have not always\nheld strictly to the \"highly likely\" threshold but have also used\na \"reasonable foreseeability\" standard. Id. at 344 & nn.1-2.\nUltimately, we concluded that the administrator\u2019s \"determina-\ntion that Eckelberry\u2019s death was not unexpected because he\nput himself in a position in which he should have known seri-\nous injury or death could occur finds considerable support in\nthe record.\" Id. at 345 (emphasis added) (internal quotation\nmarks omitted).\n\n For several reasons, Eckelberry neither controls our analy-\nsis here nor dictates the result in this appeal. Eckelberry did\nnot establish a per se rule that drunk driving injuries or fatali-\nties can never be accidental, as the opinion itself points out.\nSee id. Cases like this are highly fact-specific, rising and fall-\ning on the particular terms of the policy as applied to the\nunique facts of the incident giving rise to the claim. Unlike\nthe policy presently before us, the policy in Eckelberry actu-\nally defined \"accident\" in terms of foreseeability\u2014there, an\n\"accident\" was \"an unexpected and sudden event which the\ninsured does not foresee.\" Id. at 342 (internal quotation marks\nomitted). Although the definition failed to define every rele-\nvant term, the Eckelberry AD & D policy seemed to import\nthe tort concept of foreseeability. Hence, we observed that\n\"[o]rdinarily, a death that occurs as a result of driving while\nintoxicated . . . is not an accident because that result is reason-\nably foreseeable.\" Id. at 345 (internal quotation marks omit-\nted).\n\n The terms of AUL\u2019s policies, by contrast, do not steer us\ntowards a foreseeability analysis of \"accident.\" We see noth-\ning in the policies to warrant defining \"accident\" so as to\nexclude reasonably foreseeable losses:\n\n \"Reasonable foreseeability,\" besides itself being\n ambiguous, injects a different spin to the analysis\n and, depending upon how broadly it is interpreted,\n could drastically reduce coverage under the AD & D\n\f JOHNSON v. AMERICAN UNITED LIFE INSURANCE 19\n policy since, particularly in hindsight, it could be\n said many accidents are foreseeable, even reasonably\n foreseeable, as opposed to unforeseeable.\n\nLaAsmar, 605 F.3d at 809. Unlike Eckelberry, our review is\nde novo in this appeal, and we construe the meaning of the\nPlan terms in the first instance and are not limited to consider-\ning only the reasonableness of the decision and reasoning of\nthe claims administrator. Accordingly, we are not bound to\ndefine \"accident\" as we did in Eckelberry simply because\nthese cases fall into the same general factual category.\n\n IV.\n\n Finally, we must address the lower court\u2019s use of state law\nto define \"accident.\" As previously noted, the district court\nimported the North Carolina insurance statute\u2019s definition of\n\"accident\" into the terms of the Plan. This statute applies \"to\nthe provisions of all group life, group accident, group health,\nand group accident and health insurance policies and group\nannuities . . . that are issued on or after October 1, 1989.\"\nN.C. Gen. Stat. \u00a7 58-3-30(a). Finding an \"absence of any\nshowing\" in the record that the North Carolina statutory defi-\nnition of \"accident\" has been preempted by ERISA, the court\nconcluded that the North Carolina statute controlled the defi-\nnition of accident. J.A. 541.\n\n North Carolina law dictates that for any such group life or\naccident policy, \"\u2018[a]ccident\u2019 . . . shall be defined to imply\n\u2018result\u2019 language and shall not include words that establish an\naccidental means test.\" N.C. Gen. Stat. \u00a7 58-3-30(b). The dis-\ntrict court determined that under the \"accidental result\" test,\nthe relevant question is whether the crash was an \"unantici-\npated and unexpected result of an intentional, voluntary act.\"\nJ.A. 555 (internal quotation marks omitted). In light of John-\nson\u2019s significant level of intoxication while operating his\nvehicle at an excessive rate of speed, the court found that his\ncrash \"constitutes an anticipated and expected result (and thus\n\f20 JOHNSON v. AMERICAN UNITED LIFE INSURANCE\nnot an \u2018accident\u2019 within the meaning of \u00a7 58-3-30).\" J.A. 555.\nJohnson believes that the court properly considered the North\nCarolina statute but reached the wrong result in applying it.\nAUL replies ERISA preempts the North Carolina statute and\nthus it was error for the court below to consider it; however,\nAUL takes the position that the court nonetheless reached the\nproper result because the statutory definition of \"accident\" is\nvery similar to the Wickman standard cited in Eckelberry.\n\n A.\n\n Johnson contends that the \"Conformity with State Laws\"\nclause contained in the policies reflects the parties\u2019 intent to\nincorporate and make North Carolina insurance law part of\nthe policies.3 If this is true, Johnson suggests, we would\nmerely be enforcing the agreed-upon terms of the policy by\napplying North Carolina law and would not actually be pre-\nsented with a preemption problem.\n\n We are not convinced that the general Conformity-with-\nState-Laws clause, standing alone, moots the question of pre-\nemption. \"ERISA plans must always conform to state law, but\nonly state law that is valid and not preempted by ERISA.\"\nLouisiana Health Serv. & Indem. Co. v. Rapides Healthcare\nSys., 461 F.3d 529, 533 (5th Cir. 2006). However, assuming\nthe North Carolina statute applied here, we would still reach\nthe same conclusion.\n\n Section 58-3-30 of the North Carolina General Statutes dic-\ntates that any group life or accident policy \"shall\" define \"ac-\ncident\" so as \"to imply \u2018result\u2019 language and shall not include\nwords that establish an accidental means test.\" N.C. Gen. Stat.\n\u00a7 58-3-30(b). Like many jurisdictions, North Carolina has rec-\n 3\n This clause states in its entirety as follows: \"CONFORMITY WITH\nSTATE LAWS: Any provision of the policy in conflict with the laws of\nthe state in which it is delivered is amended to conform to the minimum\nrequirements of those laws.\" J.A. 294.\n\f JOHNSON v. AMERICAN UNITED LIFE INSURANCE 21\nognized a distinction between \"accidental means\" and \"acci-\ndental result\" as those terms are used in insurance policies.\nSee Collins v. Life Ins. Co. of Va., 393 S.E.2d 342, 343 (N.C.\nCt. App. 1990).4 Under the stricter \"accidental means\" termi-\nnology, no coverage is provided where the loss \"occurs by\nreason of an insured\u2019s intentional act\" or \"is the natural and\nprobable consequence of a voluntary act or course of con-\nduct.\" Id. By contrast, a policy that pays benefits based on an\n\"accidental result\" standard does not categorically exclude\nfrom the definition of \"accident\" losses resulting from inten-\ntional acts; rather, \"accidental\" under this standard means a\nloss occurred \"fortuitously without intent or design\" and was\n\"unexpected, unusual and unforeseen.\" Henderson v. Hartford\nAccident & Indem. Co., 150 S.E.2d 17, 20 (N.C. 1966).\n\n Section 58-3-30(b) purports to eliminate for group life and\naccident policies \"issued on or after October 1, 1989\" the dis-\ntinction between \"accident\" or \"accidental result\" and \"acci-\ndental means\" and move to a single result-oriented definition.\nSee N.C. Gen. Stat. \u00a7 58-3-30(a). Although we have found no\ndecisions from the North Carolina Supreme Court or Court of\nAppeals specifically addressing this statute, subsequent case\nlaw involving the meaning of \"accident\" in the context of\nindividual policies\u2014where the accident/accidental means dis-\ntinction apparently still exists\u2014illuminates the meaning of\n\"\u2018result\u2019 language\" in \u00a7 58-3-30(b). In North Carolina Farm\nBureau Mutual Insurance Co. v. Stox, 412 S.E.2d 318, 325\n(N.C. 1992), the North Carolina Supreme Court refused to\nconstrue the undefined term \"accident\" in a homeowner\u2019s pol-\nicy as requiring the means of the loss to be accidental. See id.\n(rejecting argument that loss was not accidental because the\n 4\n Although the \"distinction between loss due to \u2018accidental means\u2019 and\nloss due to \u2018accident\u2019 . . . was, at one time, generally accepted by most\ncourts,\" recently \"an increasing number of jurisdictions have rejected the\ndistinction between \u2018accidental means\u2019 and \u2018accident,\u2019 \u2018accidental result,\u2019\n\u2018accidental injury,\u2019 \u2018accidental death,\u2019 and the like, in favor of treating the\nterms as legally synonymous.\" 10 Couch on Insurance 3d \u00a7 139.22 (Rev.\ned. 2012).\n\f22 JOHNSON v. AMERICAN UNITED LIFE INSURANCE\n\"injuries resulted from . . . intentional acts\"). The court con-\ncluded \"that where the term \u2018accident\u2019 is not specifically\ndefined in an insurance policy, that term does include injury\nresulting from an intentional act, if the injury is not inten-\ntional or substantially certain to be the result of the inten-\ntional act.\" Id. (emphasis added). Under this \"substantially\ncertain\" standard, which is similar to\u2014and perhaps more gen-\nerous to the insured than\u2014the Wickman \"highly likely\" stan-\ndard, the question would be whether a reasonable plan\nparticipant would have understood that driving while intoxi-\ncated under similar circumstances was substantially certain to\nresult in death or severe injury. In this case, we would answer\nthat question in the negative.\n\n The record contains only general statistical data regarding\nthe extent to which a driver\u2019s ability to operate a vehicle is\nimpaired by alcohol. In denying Johnson\u2019s claim, AUL refer-\nenced reports from the American Medical Association and the\nNational Traffic Safety Administration for the widely-\naccepted common-sense proposition that \"blood alcohol con-\ncentration is directly correlated with the degree of impairment\nan individual displays when driving after drinking.\" J.A. 173.\nAUL points to one additional document in the record pro-\nduced by the National Commission Against Drunk Driving\nthat summarizes various stages of impairment based on BAC.\nIn this case, Richard had a BAC of .289, which, according to\nthe NCADD, would put a typical driver either in the \"Confu-\nsion\" stage, which is marked by symptoms such as increasing\nmuscular incoordination and slurred speech, or in the \"Stu-\npor\" stage, which is marked by significant lack of coordina-\ntion or loss of motor functions. J.A. 532. This evidence makes\nclear that impairment is highly likely for someone with a\nBAC of .289, but there is no data with respect to drunk driv-\ning fatalities in relation to the incidents of drunk driving gen-\nerally.\n\n The record supports the conclusion that injury or death is\na reasonably foreseeable consequence of driving at significant\n\f JOHNSON v. AMERICAN UNITED LIFE INSURANCE 23\nlevels of intoxication. But we simply fail to see how this gen-\neral data demonstrates that driving with a BAC of .289 under\nthese circumstances is substantially certain to result in death\nor severe injury. There is a significant difference between\nthese standards:\n\n A result is reasonably foreseeable if there are indica-\n tions which would lead a reasonably prudent man to\n know that the particular results could follow from his\n acts. Substantial probability is more than this. The\n indications must be strong enough to alert a reason-\n ably prudent man not only to the possibility of the\n results occurring but the indications also must be\n sufficient to forewarn him that the results are highly\n likely to occur.\n\nCity of Carter Lake v. Aetna Cas. & Sur. Co., 604 F.2d 1052,\n1059 n.4 (8th Cir. 1979) (emphasis added). To the extent such\ndata exists, a cursory review actually suggests the oppo-\nsite\u2014that such losses are not actually substantially certain or\nhighly likely to result from driving under the influence.5\nAccordingly, even if we applied North Carolina\u2019s \"substan-\ntially certain\" test\u2014which is almost indistinguishable from\nthe \"highly likely\" standard employed by Wickman\u2014we\nwould conclude that Richard\u2019s death was accidental and that\nAUL owes benefits under the AD & D provisions.\n 5\n For example,\n The Centers for Disease Control (CDC) studied alcohol-impaired\n driving by adults during the period 1993-2002. In 2002, the last\n year of the study, subjects reported making 159 million trips in\n which they drove while alcohol-impaired. Given that there were\n 17,419 deaths from alcohol-related motor vehicle crashes in\n 2002, drunk driving possibly proved fatal only once in every\n 9,128 trips.\nDouglas R. Richmond, Drunk in the Serbonian Bog: Intoxicated Drivers\u2019\nDeaths as Insurance Accidents, 32 Seattle U. L. Rev. 83, 117 (2008)\n(internal footnotes omitted).\n\f24 JOHNSON v. AMERICAN UNITED LIFE INSURANCE\n B.\n\n AUL contends that N.C. Gen. Stat. \u00a7 58-3-30 falls within\nERISA\u2019s broad preemptive scope and therefore cannot con-\ntrol. ERISA preempts \"any and all State laws\" that \"relate to\nany employee benefit plan\" covered by ERISA. 29 U.S.C.\n\u00a7 1144(a). Nonetheless, ERISA specifically \"saves\" from pre-\nemption \"any law of any state which regulates insurance.\" 29\nU.S.C. \u00a7 1144(b)(2)(A). \"[A] state law must be specifically\ndirected toward the insurance industry in order to fall under\nERISA\u2019s saving clause; laws of general application that have\nsome bearing on insurers do not qualify.\" Kentucky Ass\u2019n of\nHealth Plans, Inc. v. Miller, 538 U.S. 329, 334 (2003) (inter-\nnal quotation marks omitted). Moreover, \"the state law must\nsubstantially affect the risk pooling arrangement between the\ninsurer and the insured\" to survive preemption. Id. at 342.\n\n Johnson argues that N.C. Gen. Stat. \u00a7 58-3-30 comes\nwithin ERISA\u2019s savings clause because, by prescribing the\nlimits of what constitutes an accident, it \"alters the scope of\npermissible bargains between insurers and insureds,\" Benefit\nRecovery, Inc. v. Donelon, 521 F.3d 326, 331 (5th Cir. 2008)\n(internal quotation marks omitted), and therefore \"dictates to\nthe insurance compan[ies] the conditions under which [they]\nmust pay for the risk [they have] assumed,\" Miller, 538 U.S.\nat 339 n.3. AUL contends that this statute is nothing more\nthan a state law regarding the interpretation of insurance poli-\ncies, not a state law that \"regulates insurance.\" 29 U.S.C.\n\u00a7 1144(b)(2)(A). AUL\u2019s position relies on a well-established\nline of decisions from our sister circuits embracing the notion\nthat \"[r]ules of contract interpretation force the insurer to bear\nthe legal risks associated with unclear policy language,\" but\nthat \"[s]hifting legal risk is . . . [much different than] transfer-\nring or spreading a policyholder\u2019s risk.\" Miller v. Monumental\nLife Ins. Co., 502 F.3d 1245, 1249 (10th Cir. 2007) (internal\nquotation marks omitted); see Hammond v. Fidelity & Guar.\nLife Ins. Co., 965 F.2d 428, 430 (7th Cir. 1992) (\"We cannot\nimagine any rational basis for the proposition that state rules\n\f JOHNSON v. AMERICAN UNITED LIFE INSURANCE 25\nof contract interpretation \u2018regulate insurance\u2019 within the\nmeaning of \u00a7 1144(b)(2).\").\n\n The preemption question in this case is not easily answered,\nand we are especially loathe to wade into this issue in light of\nthe fact that it was not well-developed by the parties below.\nUltimately, we need not decide this question. If ERISA pre-\nempts N.C. Gen. Stat. \u00a7 58-3-30(b), as AUL insists, our anal-\nysis set forth supra in section III.B remains unchanged as we\napplied federal common law without regard to the North Car-\nolina statute. But even if \u00a7 58-3-30(b) is not preempted, our\nconclusion would remain unchanged for the reasons explained\nin section IV.A. See McClure v. Life Ins. Co. of N. Am., 84\nF.3d 1129, 1133 (9th Cir. 1996) (declining to decide whether\nERISA preempted state insurance rule advocated by the\ninsured where the court found in favor of coverage even with-\nout applying the state rule).\n\n V.\n\n For the foregoing reasons, we reverse the decision of the\ncourt below and remand for entry of judgment awarding the\nbenefits in question to Angela Johnson.\n\n REVERSED AND REMANDED\n\f"} -{"text": "\n38 Md. App. 716 (1977)\n382 A.2d 596\nROLAND NEVILLE GODWIN\nv.\nSTATE OF MARYLAND.\nNo. 200, September Term, 1977.\nCourt of Special Appeals of Maryland.\nDecided November 14, 1977.\nOpinion Modified February 28, 1978.\nThe cause was argued before MOYLAN, MENCHINE and LOWE, JJ.\nJoseph A. DePaul and James E. Kenkel, with whom were William C. Brennan, Jr., and DePaul, Willoner & Kenkel, P.A. on the brief, for appellant.\nKathleen M. Sweeney, Assistant Attorney General, with whom were Francis B. Burch, Attorney General, Arthur A. Marshall, Jr., State's Attorney for Prince George's County, Robert Bonsib and Michael Whalen, Assistant State's *718 Attorneys for Prince George's County, on the brief, for appellee.\nMOYLAN, J., delivered the opinion of the Court.\nThis case grows out of a macabre series of cold-blooded executions reminiscent of the St. Valentine's Day Massacre. As one of those executioners, the appellant, Roland Neville Godwin, was convicted in the Circuit Court for Prince George's County by a jury, presided over by Judge Jacob S. Levin, of three counts of first-degree murder, four counts of kidnapping and four counts involving the unlawful use of a handgun in the commission of a felony. Upon this appeal, he raises seven contentions:\n1) That an extrajudicial identification of him by a codefendant-turned-State's-witness was unconstitutionally received in evidence;\n2) That a tainted in-court identification of him by the sole survivor of the executions was unconstitutionally received in evidence;\n3) That a tainted extrajudicial photographic identification by a witness was unconstitutionally received in evidence;\n4) That he was unduly restricted in his cross-examination of State's witnesses in terms of impeaching their credibility;\n5) That the trial court erred when it failed to declare a mistrial because of allegedly improper argument by the State's Attorney;\n6) That the trial court committed error when it failed to instruct the jury on the meaning of premeditation; and\n7) That the kidnapping convictions should have merged into the felony-murder convictions.\nInitially, we will briefly set the factual backdrop of the case. A codefendant and ultimate State's witness, Johnnie Mae Jones, was apparently the victim of a robbery. Instead of complaining to the authorities, she complained to her brother, codefendant Willie Lee Jones, Jr., and the two of them elected to take the law into their own hands. They were joined in this venture by their two ultimate codefendants, James Richard Person and the appellant.\n*719 The four victims were Alvin Jones, Anthony Cunningham and David Dock, all three of whom were executed, and Ronald Swayne, who survived to testify. There were strong intimations in the evidence that the executioners as a group and the victims as a group were part of a narcotics-using culture and that there were some social acquaintanceships flowing between the two groups.\nThe executions occurred during the pre-dawn hours of October 24, 1975. Ronald Swayne left his home at between 8 and 9 p.m. on October 23 in his own car, a red Cougar. He drove to the residence of his friend (and one of the executed victims) Alvin Jones. He there picked up Jones and another of the ultimate victims, Anthony Cunningham. The threesome drove to an apartment building on C Street in southeast Washington. Swayne blew the horn of his automobile and two individuals came out of the apartment to join them. They were two of the ultimate killers, but danger signs had not as yet reared their heads. The two individuals were codefendant James Richard \"Reds\" Person, an acquaintance of Swayne, and the appellant, \"a tall slim black man\" whom Swayne had never seen before. Shortly thereafter, David Dock, the remaining ultimate victim, came out of the same apartment and joined \"Reds\" Person and the appellant in an orange Volkswagen. The orange Volkswagen took off first; Alvin Jones directed Swayne to follow in his red Cougar. Both cars, and all six persons, drove out of the District of Columbia into Seat Pleasant in Prince George's County, Maryland. All six individuals went into an apartment. They there joined codefendant Willie Lee Jones, Jr. (\"Junior\"). Swayne testified that he himself was a former drug user and that Alvin Jones was still, as of that night, a heavy drug user. Alvin Jones was in the process of \"shooting some narcotic drugs into his arm\" when Swayne heard a shot. He looked up and saw that three of the group \u0097 \"Reds\" Person, \"Junior\" Jones and \"the tall slim black man\" (the appellant) \u0097 all had pistols and were training them upon the other four men. Swayne, along with Cunningham, Dock and Alvin Jones, was told to lie down on the floor. All four of the victims were then covered up with blankets. Swayne heard conversation dealing with the fact *720 that \"somebody's sister had been robbed.\" \"Reds\" Person and the appellant then placed all four of the victims into a blue Cadillac. Swayne and Cunningham were put on the floor of the back seat. Alvin Jones and Dock were put in the trunk. \"Reds\" Person and the appellant then drove the Cadillac for between twenty minutes and half an hour to an unknown location.\nIt was at this unknown location that the identification phase of the \"drumhead court-martial\" was to take place. Swayne overheard someone say, \"Get Junior's sister.\" About half an hour later, Johnnie Mae Jones (Junior's sister) arrived at the scene. \"Reds\" Person ordered Cunningham and Swayne to lift up their heads from the floor. Johnnie Mae Jones identified Cunningham as one of the men who had robbed her, thereby sealing his doom. She indicated, on the other hand, that Swayne was not one of her robbers, thereby saving his life. She subsequently was observed to identify Alvin Jones, who lay in the trunk of the blue Cadillac, as one of the robbers. Although Swayne did not testify as to having observed her identify David Dock, who also lay in the trunk of the blue Cadillac, presumably he was also somehow \"deemed guilty.\"\nThe testimony of Johnnie Mae Jones essentially corroborated that of Ronald Swayne. She testified that she was picked up by her brother \"Junior\" Jones at between 1 a.m. and 3 a.m. on the morning of October 24. Her brother drove her to a location in Maryland \"on a dark road near a little white church.\" She there observed two of her brother's friends, \"Reds\" Person, whom she had known before, and a \"tall slim black man,\" whom she had not known before and whom she knew that night only as \"Slim.\" \"Slim\" and \"Reds\" then ordered Cunningham and Swayne out of the back seat of the Cadillac. She testified that she knew that there were other unidentified individuals there because she heard \"someone banging on the trunk of the Cadillac.\" After she had exonerated Ronald Swayne, \"Slim\" ordered her brother \"Junior\" to take Swayne and to put him in the trunk of Swayne's own car, the red Cougar. \"Slim\" then ordered \"Junior\" Jones to take Johnnie Mae Jones and Swayne home. *721 \"Junior\" Jones and Johnnie Mae Jones left in the red Cougar, with Swayne in the trunk.\nThe story at that point is picked up by the testimony of Ronald Swayne. From his position in the trunk of his own red Cougar, he felt the car drive off. When the car stopped, \"Junior\" Jones released Swayne from the trunk but ordered Swayne to drive at \"Junior\" Jones's direction. As of the moment when Swayne was released from the trunk, Johnnie Mae Jones, presumably now \"home,\" had left the automobile and the presence of Swayne and \"Junior\" Jones. At Jones's direction, Swayne drove the car to an unknown location where they rejoined \"Reds\" Person and \"the tall slim black man\" later identified as the appellant. The appellant ordered \"Junior\" Jones to put Swayne back in the trunk of Swayne's Cougar. From the trunk, Swayne heard a lot of shooting and then a \"big boom.\" He heard people running back to the car, heard them \"jump into the car and pull off.\" After the car had stopped, Swayne struggled for about five to ten minutes and finally \"was able to pop his trunk open.\" He was the only one upon the scene and he drove his car home.\nA disinterested witness, Donald McCain, supplied some of the missing threads. During the early morning hours of October 24, he was staying in a house in Seat Pleasant, Maryland. He looked outside and saw an individual standing by his U-Haul van. Apprehensive about his van, he kept a close lookout and then went outside. He saw parked near his van both a blue Cadillac and a red Cougar. When he walked outside, he observed two individuals, one whom he already knew as James \"Reds\" Person, who asked McCain for a cigarette. The other individual, later identified photographically as the appellant, he described as \"a tall slim black man.\" After returning to the house where he was staying, he observed these two men walking up the street and one of them appeared to be carrying an object which looked like a gun. From the house, he later heard \"about four, five or six shots; a few of these shots sounded like a shotgun and one sounded like a .22 caliber gun.\" He looked out the window and observed two individuals running back toward the two *722 cars. One of the individuals jumped into the blue Cadillac and the other jumped into the red Cougar and they both drove off.\nAlvin Jones was found wounded in a nearby field. He later died at the Prince George's County General Hospital. Found wounded in a nearby creek bed was Anthony Cunningham, who also later died in the Prince George's County General Hospital. Also found in the creek with a head wound was David Dock, who was pronounced dead upon arrival at the Prince George's County General Hospital.\nThe appellant was granted a trial severance.[1] Identifications, both judicial and extrajudicial, were made of the appellant by three separate witnesses. Each of those identifications gives rise to an appellate contention.\n\n1. The Extrajudicial Identification by Johnnie Mae Jones \nAt issue here is the mechanics of the identification as well as the constitutional soundness thereof. Although mechanically the identification involved a somewhat unusual two-step process instead of the more \"garden variety\" one-step process, we see no impediment. Involved was simply a bit of elementary logic as to which any fact finder should have the requisite competence. Johnnie Mae Jones had never seen the appellant before the night of the killings. At the trial, sixteen months after the fact, she was unable to make a judicial identification of him in the courtroom. (It is not without significance that the appellant had radically altered in appearance during the intervening sixteen months.) Johnnie Mae Jones, however, was unequivocal in her conclusion that the same \"Slim\" who had been the only member of the three-man \"firing squad\" not theretofore *723 known to her as of the morning of October 24, 1975, had been the same \"Slim\" who had stood in the dock with her; her brother, Willie Lee \"Junior\" Jones, Jr.; and James Richard \"Reds\" Person at a pretrial hearing on March 30, 1976, five months after the crimes and eleven months before for failure to identify the appellant in the courtroom at the time of the appellant's trial. Her testimony established the major premise of the ultimate identification syllogism: The \"Slim\" who was at the crime scene is the \"Slim\" who stood with my brother, \"Reds\" Person and me in the dock on March 30, 1976. A equals B.\nThe minor premise was supplied by Edward Garrison Neal, a former Assistant State's Attorney who had been present at the pretrial hearing of March 30, 1976. He stated that four prisoners stood in the dock. They included Johnnie Mae Jones, later turned State's witness; her brother, Willie Lee \"Junior\" Jones, Jr.; and James Richard \"Reds\" Person. The fourth person was Roland Neville \"Slim\" Godwin. Mr. Neal identified the Roland Neville Godwin who was a codefendant at the pretrial hearing of March 30, 1976, as the same Roland Neville Godwin sitting at the trial table as the defendant on February 7, 1977. B equals C.\nWith the evidentiary establishment of that minor premise, the conclusion was ineluctable:\n\nA equals B.\n\nB equals C.\n\ntherefore A equals C.\nTo wit, the \"Slim\" whom Johnnie Mae Jones observed at the crime scene is effectively identified as the appellant in this case. We see no flaw whatsoever in this chain of logic.\nGranting that what was introduced in this case was an extrajudicial identification of the appellant made by Johnnie Mae Jones on March 30, 1976, the appellant challenges that extrajudicial identification on the grounds that it was impermissibly suggestive. We cannot agree with the appellant that exclusion was called for. We note initially that the police were not guilty of any contrived circumstances for *724 identification purposes. The pretrial hearing of March 30, 1976, was not contemplated as an identification procedure in any way, shape or form. Four defendants were in court to have hearings on motions made by them. They were not there to identify each other. Johnnie Mae Jones herself was still a full-fledged defendant, who had not agreed to become a State's witness. Self-evidently, she was not asked to identify anyone. The recollection that the man she knew as \"Slim\" at the crime scene had been with her in the prisoner's box at the pretrial hearing was something that came to light only during her testimony at the trial upon the merits. Moreover, the appellant was represented by counsel at the pretrial hearing of March 30, 1976. There was simply no Sixth Amendment violation of the right to the assistance of counsel such as would invoke the per se exclusionary rule of United States v. Wade, 388 U.S. 218, 87 S.Ct. 1926, 18 L.Ed.2d 1149 (1967), and Gilbert v. California, 388 U.S. 263, 87 S.Ct. 1951, 18 L.Ed.2d 1178 (1967).\nWhen we are looking not at a deprivation of the Sixth Amendment's right to counsel but only at so-called impermissive suggestiveness, it is now clear in the light of Neil v. Biggers, 409 U.S. 188, 93 S.Ct. 375, 34 L.Ed.2d 401 (1972); Manson v. Brathwaite, 432 U.S. 98, 97 S.Ct. 2243, 53 L.Ed.2d 140 (1977); Foster v. State, 272 Md. 273, 323 A.2d 419; and Dobson v. State, 24 Md. App. 644, 335 A.2d 124, that we exclude neither the extrajudicial identification itself nor a judicial identification based upon it except in those cases where there is a \"substantial likelihood of irreparable misidentification.\" In Manson v. Brathwaite, the Supreme Court spelled out the factors which militated against a per se exclusionary rule even where there had been present an element of impermissive suggestiveness. In opting rather for the \"totality of circumstances\" approach, it said, at 53 L.Ed.2d 152-153:\n\"The third factor is the effect on the administration of justice. Here the per se approach suffers serious drawbacks. Since it denies the trier reliable evidence, it may result, on occasion, in the guilty going free. Also, because of its rigidity, the *725 per se approach may make error by the trial judge more likely than the totality approach. And in those cases in which the admission of identification evidence is error under the per se approach but not under the totality approach \u0097 cases in which the identification is reliable despite an unnecessarily suggestive identification procedure \u0097 reversal is a draconian sanction. Certainly, inflexible rules of exclusion, that may frustrate rather than promote justice, have not been viewed recently by this Court with unlimited enthusiasm.\"\nThe Court's conclusion in Manson v. Brathwaite was clear, at 53 L.Ed.2d 154:\n\"We therefore conclude that reliability is the linchpin in determining the admissibility of identification testimony for both pre- and post-Stovall confrontations. The factors to be considered are set out in Biggers.... These include the opportunity of the witness to view the criminal at the time of the crime, the witness' degree of attention, the accuracy of his prior description of the criminal, the level of certainty demonstrated at the confrontation, and the time between the crime and the confrontation. Against these factors is to be weighed the corrupting effect of the suggestive identification itself.\"\nApplying the factors to be considered in this regard as spelled out in Neil v. Biggers, supra, we conclude, upon our constitutionally mandated, independent review, that no such likelihood was here present. Johnnie Mae Jones was in close contact with \"Slim\" for a significant period of time immediately preceding the shootings. \"Slim\" addressed her at point-blank range and asked her to identify at least several individuals. The incident was such as to rivet serious attention to it. The pretrial confrontation occurred within a few months of the crime. Johnnie Mae Jones appeared certain in her testimony that the man at the crime scene was the same man who stood with her as a codefendant at the pretrial hearing. *726 Under the \"totality of circumstances\" approach mandated by the due process clause of the Fourteenth Amendment, we perceive no error in the admission of this pretrial identification.\n\n2. The Judicial Identification by Ronald Swayne \nThe surviving victim, Ronald Swayne, identified the appellant as one of his assailants. The appellant takes umbrage at this judicial identification, claiming it to have been the poisoned product of a tainted one-on-one showup conducted by the police approximately two days after the crimes. Although we are by no means persuaded that even the extrajudicial identification itself, measured against the standard set out in Neil v. Biggers, might not pass muster, for admissibility purposes, in terms of its substantial reliability, it is unnecessary to undertake that lengthy analysis. If the in-court identification is not, indeed, the product of the earlier extrajudical identification, the suggestiveness vel non of that earlier confrontation is immaterial. As we pointed out in Green v. State, 35 Md. App. 510, 523, 371 A.2d 1112:\n\"For an in-court identification to be suppressed, two things must be shown:\n\n(1) That the extrajudicial identification procedure was the proximate cause of the ensuing in-court identification. (Even if there has been a tainted, to wit, impermissibly suggestive, extrajudicial identification procedure, the in-court identification may still be admissible if it is shown to be not the product of the earlier, tainted identification procedure....).\"\nIn this case, the independent source of Ronald Swayne's judicial identification is clear. With the jury out of the room, the following was established unequivocally on direct examination:\n\"Q. Is your identification of the tall man in this *727 courtroom today, Mr. Swayne, based upon your observations of him through the entire incident, or was it based upon anything or anyone you saw that Saturday in the District of Columbia police station?\nMR. DE PAUL: Objection.\nTHE COURT: Overruled.\nTHE WITNESS: Based upon what I seen during that incident.\"\nThe defense effort, on cross-examination, to cast doubt upon the independent source of the in-court identification was unavailing:\n\"Q. Of course, the help you got from the police helped you out a little bit, didn't it?\nA. Not really.\"\nThe in-court identification was properly permitted.\n\n3. The Extrajudicial Photographic Identification by Donald McCain\nEvidence was introduced establishing that Donald McCain had on approximately March 31, 1976, identified a photograph of the appellant as one of the men he observed on the night of the crimes. Again, the lengthy analysis under Neil v. Biggers is unnecessary, because of the utter failure of the appellant to establish, as is his burden, any initial taint in the photographic viewing. There were ten pictures in the photographic array. Though all were not uniform, they were all of young Negro males, some with facial hair and some without. There was nothing to highlight the photograph of the appellant as the one to be picked. There was no suggestion that the police in any way indicated to McCain that it was the appellant's photograph that should be singled out. Under Smith and Samuels v. State, 6 Md. App. 59, 250 A.2d 285, the appellant simply did not carry his initial burden requiring the State to go forward in any regard.\n\n\n*728 4. The Limitation Upon the Cross-Examination of the State's Witnesses\nThe appellant sought to cross-examine both Ronald Swayne and Donald McCain as to past criminal conduct or involvement with the police. Upon timely motion by the State, the trial judge ruled that such cross-examination, for purposes of impeaching credibility, must be limited to the showing of actual convictions of crime. With some few exceptions, this is the basic law of Maryland in this regard. Niemoth v. State, 160 Md. 544, 557, 154 A. 66; Hurley v. State, 6 Md. App. 348, 355, 251 A.2d 241; Neam v. State, 14 Md. App. 180, 188, 286 A.2d 540. The trial judge, in these situations, is faced with a delicate balancing. If there is a genuine suggestion or proffer that a witness's involvement with the police is subjecting that witness to a strong motivation to lie, such evidence should be permitted. On the other hand, it must be rigorously guarded against that a witness be diminished in the eyes of a jury simply by a showing that he is \"a bad man.\" It is furthermore to be noted that our law is evenhanded in terms of impeachment and deals equally with witnesses in a civil setting and in a criminal setting and without regard to whether they are witnesses for the prosecution or witnesses for the defense. It will never be permitted that defendants be free to slash away at will at State's witnesses while having the character of their own witnesses more solicitously shielded from attack.\nIn this case, no proffer indicated that the police had subjected either State's witness to any pressure to testify on behalf of the State. Ronald Swayne was a victim of this crime, not a friend of the defense who was grudgingly turned into a State's witness. Under the circumstances, we see the effort of the defense to establish that Ronald Swayne had participated in several robberies that had been nol-prossed and that Donald McCain was \"a dope pusher\" and that he was involved with \"prostitution rings\" and with \"stolen cars\" as primarily an effort to discredit the two witnesses by showing that they were \"bad men.\" In Johnson v. State, 30 Md. App. 512, 517, 352 A.2d 371, Judge Lowe pointed out the *729 cautious limitations that should be placed upon efforts such as those advanced by the appellant in this case:\n\"We do not mean to imply that any time a witness testifies against a criminal defendant his entire record of previous arrests becomes relevant to the inquiry. Only where there is some present possibility of coercion should such cross-examination be allowed. If it should appear that the cross-examination is directed simply at casting the witness in the suspicious light that falls upon anyone under formal accusation, the trial judge must not allow it.\"\nWe do not feel in this case that the trial judge abused the discretion which is wisely vested in him.\n\n5. Allegedly Prejudicial Remarks in Closing Argument\nThe argument of the appellant to the effect that the prosecutor made prejudicial remarks in the course of closing argument is simply without factual predicate. The appellant claims that the prosecutor told the jury that Johnnie Mae Jones had made a photographic identification of the appellant, when in fact she had not made such a photographic identification. We cannot read into the words of the prosecutor any such meaning. In contrasting the ability to make an identification shortly after the crimes with the inability to make an in-court identification sixteen months later, the prosecutor was referring to the changed appearance of the appellant. He said the following:\n\"Now, we have two identifications, each of which is supporting the other. Where there might be a weakness in one, it is supported by the other, and vice versa.\nBut is that all we have? Is there anything more? Yes. She was our first witness. You heard her testimony. She was there. Johnnie Mae Jones.\nShe saw Roland Godwin as we see him in this picture.\" *730 The prosecutor was here referring to a picture which the jury had of the appellant as he looked sixteen months earlier. Although the grammatical structure of the sentence might permit of some ambiguity, we cannot perceive a clear and false statement having been made, and certainly not one calling for a mistrial. For the lack of a factual predicate, the argument falls.\n\n6. Jury Instructions: \"Premeditation\"\nThe appellant complains that the trial judge did not give an instruction, or at least an adequate instruction, in terms of defining the element of premeditation. We cannot agree. Recognizing that \"[t]here is no necessity for the court to use the exact language requested.\" Nelson v. State, 5 Md. App. 109, 120, 245 A.2d 606, we think that the trial judge in this case did convey the essential meaning of premeditation. His instruction in this regard was as follows:\n\"In Maryland there are two degrees of murder: murder in the first degree and murder in the second. And the distinction between the two is based on the element of premeditation and deliberation.\n\nAll murder which shall be perpetrated by means of poison or lying in wait or by any kind of willful, deliberate, and premeditated killing shall be murder in the first degree, and in that regard for a homicide to be willful there must be a specific purpose, and there must be a specific design to kill.\n\nFirst degree murder, in essence, is killing in cold blood after having calculated the circumstances. The burden is on the State of Maryland, based on all the facts that you have heard, to show circumstances providing willfulness, deliberation, and premeditation, if you are to find Mr. Godwin guilty of murder in the first degree.\nAfter a full and fair consideration of all the facts in this case, if you are not convinced beyond a reasonable doubt that the State has proven murder *731 in the first degree to your satisfaction, you will find him not guilty of that charge.\nIf, however, after a full and fair consideration of all the facts in this case you are convinced beyond a reasonable doubt that they have proven all the elements necessary to convict him of murder in the first degree, you are to find him guilty of this charge.\n\nMurder in the second degree is the unlawful killing of a human being with malice, but without premeditation and without deliberation. After a full and fair consideration of all the facts and circumstances of this case, you are convinced beyond a reasonable doubt that the State has proven to your satisfaction all the elements necessary to convict him of this offense, you will find him guilty of this offense.\nIf, however, you are not convinced beyond a reasonable doubt after a full and fair consideration of all the facts and circumstances, you will find him not guilty.\" (Emphasis supplied)\nFollowing the court's instructions, the exchange that occurred between appellant's counsel and the trial judge is enlightening:\n\"With regard to your definition of murder in the first definition, Your Honor gave \u0097 you said it was killing with malice. You did not use the phrase `with malice aforethought' as a distinction between \u0097\nTHE COURT: I don't know what `aforethought' is.\"\nWe applaud both the candor and the correctness of the statement. As of the Twentieth Century at least, the word \"aforethought\" is absolutely devoid of any meaning whatsoever. As we pointed out in Evans v. State, 28 Md. App. 640, 693-695, 349 A.2d 300:\n\"A similar erosion took place with respect to the word `aforethought.' In its pristine state, it connoted *732 that the intention to kill had existed some appreciable time before the actual execution of the deed. It connoted the same thing by way of preplanning that premeditation connoted early in the 19th century (when it entered the law as an attempt to rejuvenate the earlier meaning of `aforethought') and significantly more by way of preplanning than premeditation connotes today (premeditation having in the meantime suffered a semantic erosion of its own). The word `aforethought' today is devoid not simply of an ordinary, layman's meaning but of any meaning at all, even as a term of art. As is pointed out by Perkins, Criminal Law (2d Ed. 1969), at 34-35:\n`Undoubtedly the word \"aforethought\" was added to \"malice\" in the ancient cases to indicate a design thought out well in advance of the fatal act. But as case after case came before the courts for determination, involving killings under a great variety of circumstances, there came to be less and less emphasis upon the notion of a well-laid plan. And at the present day the only requirement in this regard is that it must not be an after thought. \"Killing with malice\" is sufficient of itself to negative any possible notion of an afterthought, and apart from the historical background the word \"aforethought\" would not be needed.'\nTo the same effect is Purver, The Language of Murder, 14 U.C.L.A. L.Rev. 1306, 1309 (1967):\n`Just as the word \"malice\" confuses and misleads, the word \"aforethought\" likewise muddles thinking:\n\"The fact that malice aforethought means merely that malice must exist at the same time as the act, in effect *733 makes `aforethought' meaningless surplusage, since the requirement is satisfied by the presence of malice or `concurrent' malice rather than an antecedent malice. The unimportant character of the adjective `aforethought' is seen in the fact that in many opinions `malice' and `malice aforethought' are used interchangeably and that in many, `aforethought' is itself omitted.\" [Quoting from 1 Wharton, Criminal Law and Procedure \u00a7 243, at 527 (Anderson Ed. 1957)]\nSince today \"aforethought\" may be \"as instantaneous as successive thoughts of the mind\" or \"on the spur of the moment,\" the word no longer serves its original function of drawing attention to the duration of the deliberation to kill as the criterion for distinguishing murder from other homicides.'\nThe use of the now anachronistic language still haunts us, however. As Purver further points out, at 1306:\n`Precision in the use of legal language is essential, particularly in the law of homicide. In a murder trial the use of a word or turn of a phrase may mark the difference between whether the accused leaves the courtroom free \u0097 or sentenced to death.\nYet the phrase \"malice aforethought,\" used in defining murder, peers at us like a demon through the dust of more than four hundred years of history, lying in wait to clutter statutes and confuse juries. In examining the historical background of the *734 phrase, one probes the roots of a term which, though withering on the vine, lives on to strangle the penal codes of the several states.'\nAnd, at 1309:\n`Since \"malice\" does not mean \"ill-will\" and \"aforethought\" does not mean \"beforehand,\" jury instructions, though necessary, sound ridiculous.'\nThe word `aforethought' is today an absolutely useless appendage on our law. It has over the centuries been utterly drained of any meaning whatsoever. As a word of no utility but with an ever-present potential for confusion (some may innocently think that `aforethought' means aforethought), it should be struck from the lexicon of our homicide law.\"\nDefense counsel then more appropriately went on to the more pertinent subject of \"premeditation\":\n\"With regard to the instruction on first degree murder, instruction Your Honor gave made no mention of premeditation in the sense of defining premeditation.\nYou simply said `premeditation'.\nTHE COURT: Do you have a definition?\nMR. DE PAUL: Pre-planning, pre-conceiving.\nTHE COURT: I thought I said that.\"\nWe are persuaded that looking at the instruction as a totality, the necessary notion that the killing be thought out in advance was communicated to the jury. Particularly was this communicated by the sentence:\n\"First degree murder, in essence, is killing in cold blood after having calculated the circumstances.\"\nEven if in some other circumstances, not here pertinent, a more painstaking and precise dissection of the element of *735 premeditation were necessary, this was not such a case. With a fully articulated and well-planned scheme of executions taking place over the course of several hours, that element of first-degree murder was so clearly and unequivocally established as to leave no room for debate. Realistically, the only question in this case concerned the criminal agency (the identification) of the appellant and not the corpus delicti of the crime. In commenting upon the harmlessness of the even arguable error, we note, moreover, that a common sense, layman's definition of \"premeditation\" would redound to the benefit of a defendant and the more formal, case-law definition of \"premeditation,\" as a term of art, would work to the benefit of the State. Significant in this regard is the law on premeditation, as discussed in Chisley v. State, 202 Md. 87, 106-107, 95 A.2d 577:\n\"It is not necessary that deliberation and premeditation shall have been conceived or have existed for any particular length of time before the killing. Their existence must be judged from the facts of the case. Webb v. State, supra. The Court of Appeals of New York, in Leighton v. People, 88 N.Y. 117, 120, put it in this wise: `If, therefore, the killing is not the instant effect of impulse, if there is hesitation or doubt to be overcome, a choice made as the result of thought, however short the struggle between the intention and the act, it is sufficient to characterize the crime as deliberate and premeditated murder.' The same ruling is made in People v. Majone, 91 N.Y. 211, 212: `Such design must precede the killing by some appreciable space of time. But the time need not be long. It must be sufficient for some reflection and consideration upon the matter, for choice to kill or not to kill, and for the formation of a definite purpose to kill. And when the time is sufficient for this, it matters not how brief it is.'\"\nA layman's understanding of \"premeditation\" would be something that requires an appreciable length of time; the *736 more sophisticated lore of the case law is that \"premeditation,\" contrary to popular understanding, can occur in a very brief time. A failure to have told the jury this could only have helped the appellant, not hurt him. Error, even if such had been present, would under the circumstances of this case have been palpably harmless. Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967).\n\n7. Felony-Murder and the Question of Merger\nThe appellant's final contention is that since the conviction for murder in the first degree might have rested upon Article 27, \u00a7 410, providing, inter alia, that all murder committed in the perpetration of a kidnapping shall be murder in the first degree, the underlying felony of kidnapping must, in three of the indictments at least, merge into the ensuing felony-murders. The appellant relies upon Newton v. State, 280 Md. 260, 373 A.2d 262. Newton, of course, does not stand for such a proposition at all. It rather holds that if the only credible evidence before a fact finder which could justify finding that the highest degree of blameworthiness existed in a homicide case was the fact that one of the felonies spelled out in \u00a7\u00a7 408-409 or 410 was being perpetrated, or attempted, then and only then would the undergirding felony, or its attempt, merge of necessity into the conviction for homicide. If, on the other hand, there was legally sufficient, independent evidence of wilfulness, deliberation and premeditation under Article 27, \u00a7 407, then the merger would not be compelled. Newton v. State, 280 Md. at 273-274. And see Frye v. State, 37 Md. App. 476, 378 A.2d 155 (1977).\nIn the present case, the clear evidence establishing premeditation could not have been more beyond dispute. This was a classic \"ambush\" or \"lying in wait\" case. The three murderers set out upon a well-articulated and unequivocal scheme of luring into a trap, kidnapping, transporting to a deserted area, subjecting to an identification process at the hands of Johnnie Mae Jones and then executing all of those persons who had ostensibly robbed her. This calculated and deliberated chain of events stretched out over many miles and *737 several hours. There was no sudden anger or mutual affray. The homicide victims were helpless targets. Under the circumstances of this case, a merger of the convictions is not remotely called for.\nThe appellant urges that Frye v. State, supra, compels us to find a merger of the underlying felony into the murder unless the verdict, or the evidence, showed unmistakably that the murder was of the premeditated variety rather than of the felony-murder variety. He reads Frye overbroadly. Frye is, of course, predicated upon Newton v. State, supra. The holding of Newton, at 373 A.2d 267, was, in this regard, as follows:\n\"If ... the murder conviction is premised upon independent proof of wilfulness, premeditation and deliberation under \u00a7 407, or if the evidence is sufficient for a jury to find those elements, the offenses would not merge.\" (Emphasis supplied)\nEven more significant than the words of Newton themselves is the fact that Newton cites as authority for this proposition the case of Robinson v. State, 249 Md. 200, 238 A.2d 875. In Robinson, as in the present case, there was ample evidence to support either a finding of premeditated murder or a finding of felony murder.[1a] The defendant in that case, as the defendant here, was urging that the conviction for the underlying felony (in that case assault with intent to rape) must merge into the murder conviction where there is a possibility that the first-degree murder conviction was *738 based upon the felony-murder theory. The Court of Appeals rejected that contention, saying at 249 Md. 209:\n\"Since there is an abundance of evidence to support a verdict of premeditated murder under \u00a7 407 of Article 27 we must reject appellant's presumption that the jury found him guilty of a felony murder under \u00a7 410. It is entirely possible, and we think it more than likely, that the jury's verdict reflects a finding that the murder of Florence was premeditated.\"\nJudgments affirmed; costs to be paid by appellant.\nNOTES\n[1] On January 3, 1977, a jury convicted codefendant Willie Lee \"Junior\" Jones, Jr., of three counts of first-degree murder, four counts of kidnapping and four counts of using a handgun. Jones was sentenced to three life terms, four 30-year terms and four 15-year terms, all sentences to be served consecutively. On October 4, 1977, a Prince George's County jury, presided over by Judge Levin, convicted codefendant James Richard \"Reds\" Person also of three counts of first-degree murder, four counts of kidnapping and four counts of using a handgun. Person is scheduled to be sentenced on November 7, 1977. On October 10, 1977, the indictment against Johnnie Mae Jones was nol-prossed, in exchange for her testimony as a State's witness.\n[1a] Indeed, there will frequently be situations where a finding of murder in the first degree is predicated not upon the premeditation theory or the felony-murder theory as mutually exclusive alternatives but rather upon both of them together. An over-rigidification of the decisional process could work untold mischief. Posit a hypothetical situation. All twelve jurors are unanimously agreed that a defendant is guilty of murder in the first degree. In terms of how they arrive at their decision, however, there is no such agreement. Three are adamantly convinced that there has been premeditation but no felony. Three others are adamantly convinced that there has been a felony-murder but no premeditation. Three others are equally stubborn in their insistence that the first-degree verdict is supported by both premeditation and felony-murder. Three others are absolutely persuaded that there is guilt of murder in the first degree but are in a state of balance as to whether it is because of the premeditation principle or the felony-murder principle. Is this jury hung? Is the declaration of a mistrial called for? Obviously not! Why? Because it would be absurd!\n"} -{"text": " FILED\n MAR 28 2019\n NOT FOR PUBLICATION\n SUSAN M. SPRAUL, CLERK\n U.S. BKCY. APP. PANEL\n OF THE NINTH CIRCUIT\n\n\n\n UNITED STATES BANKRUPTCY APPELLATE PANEL\n OF THE NINTH CIRCUIT\n\nIn re: BAP No. OR-18-1128-SKuF\n\nPRINCIPIA EQUITAS LLC, Bk. No. 18-30028-tmb7\n\n Debtor.\n\nCHARLES BARKER, III,\n\n Appellant,\n\nv. MEMORANDUM*\n\nKENNETH S. EILER, Trustee,\n\n Appellee.\n\n Argued and Submitted on March 20, 2019\n at Portland, Oregon\n\n Filed \u2013 March 28, 2019\n\n Appeal from the United States Bankruptcy Court\n for the District of Oregon\n\n\n\n *\n This disposition is not appropriate for publication. Although it may be cited for\nwhatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential\nvalue. See 9th Cir. BAP Rule 8024-1.\n\f Honorable Trish M. Brown, Bankruptcy Judge, Presiding\n\nAppearances: Appellant Charles Barker, III, argued pro se.\n\n\n\nBefore: SPRAKER, KURTZ, and FARIS, Bankruptcy Judges.\n\n INTRODUCTION\n\n Appellant Charles Barker, III, is the sole owner and managing\n\nmember of chapter 71 debtor Principia Equitas LLC. Principia\u2019s sole asset is\n\na parcel of real property. Barker does not dispute that there is, of record, a\n\nfirst deed of trust fully encumbering the property. For years, Barker has\n\nbeen litigating in nonbankruptcy courts with the alleged holder of the first\n\ndeed of trust: Bank of New York Mellon (the \u201cBank\u201d). Barker filed a series\n\nof motions in the bankruptcy court seeking to object to the Bank\u2019s secured\n\nclaim even though the Bank never filed a proof of claim and even though\n\nthe chapter 7 trustee filed a final report identifying Principia\u2019s bankruptcy\n\ncase as a no-asset case. The bankruptcy court held that it had no authority\n\nto adjudicate Barker\u2019s claim objection because the Bank had not filed a\n\nproof of claim and denied each of Barker\u2019s motions.\n\n We agree that Barker\u2019s motions were not well taken. Barker could not\n\ninitiate the claims adjudication process by filing a claim objection against\n\n\n\n 1\n Unless specified otherwise, all chapter and section references are to the\nBankruptcy Code, 11 U.S.C. \u00a7\u00a7 101-1532.\n\n 2\n\fan alleged secured creditor who had not filed a proof of claim.\n\nAccordingly, we AFFIRM the bankruptcy court\u2019s orders denying Barker\u2019s\n\nmotions.\n\n FACTS\n\n On January 4, 2018, Principia commenced its bankruptcy case by\n\nfiling a voluntary chapter 7 petition. Barker signed the petition on behalf of\n\nPrincipia as its managing member. The petition identified the case as a\n\nsingle-asset real estate case. The subject real estate is located in Portland,\n\nOregon. In its schedules, Principia listed the value of the property at\n\n$668,840.00. Principia also listed secured debt encumbering the property of\n\n$944,114.71, of which $862,423.00 was the disputed claim of the Bank.\n\n Barker has been litigating for years in a number of different courts\n\nover the bona fides of the first trust deed of record encumbering the\n\nproperty. The bankruptcy petition and schedules do not identify the type\n\nof real property involved, but the papers filed in the nonbankruptcy\n\nlitigation indicate that the property is a parcel of residential real property.2\n\n Many of Barker\u2019s filings are redundant, and the purpose of some of\n\nthem is obscure. Regardless, in the final analysis, they all boil down to a\n\n\n\n 2\n We can and do take judicial notice of the contents of the case dockets in each of\nthe lawsuits that Barker has identified as pertaining to the subject real property. Estate of\nBlue v. Cty. of L.A., 120 F.3d 982, 984 (9th Cir. 1997). We also take judicial notice of the\ncontents of the underlying bankruptcy case docket. O'Rourke v. Seaboard Sur. Co. (In re\nE.R. Fegert, Inc.), 887 F.2d 955, 957\u201358 (9th Cir. 1989).\n\n 3\n\fsingle point; Barker sought to object to the secured claim of the Bank. But\n\nthe Bank did not file a proof of claim or otherwise participate in the\n\nbankruptcy case, and the trustee\u2019s final report designated Principia\u2019s\n\nbankruptcy case as a no-asset case.\n\n On March 20, 2018, the chapter 7 trustee filed an asset inventory\n\nreport indicating that there might be assets to distribute to creditors. The\n\ninitial report included an order and notice issued by the bankruptcy court\n\nclerk\u2019s office directing creditors to file proofs of claim on or before June 18,\n\n2018. However, two days later, on March 22, 2018, the trustee filed an\n\namended report indicating that there were no assets to distribute to\n\ncreditors and hence the bankruptcy case had been fully administered.\n\n On March 29, 2018, Barker filed a notice indicating that he later\n\nwould file an objection to the trustee\u2019s March 20, 2018 asset inventory\n\nreport. On April 2, 2018, the bankruptcy court issued a letter in response to\n\nBarker\u2019s notice. The court pointed out that the March 20, 2018 report had\n\nbeen superseded by the trustee\u2019s March 22, 2018 no-asset report. The court\n\ndirected Barker to file an amended objection if he disputed the trustee\u2019s\n\namended report.\n\n One day later, on April 3, 2018, Barker filed a new notice. This one\n\ndisputed the claim of the Bank. Barker asserted that any interest the Bank\n\nclaimed in the property was subject to dispute both in terms of amount and\n\nvalidity. According to Barker, there was no proof verifying the existence of\n\n\n 4\n\fthe Bank\u2019s interest in the property. Barker further challenged the validity of\n\nany assignment of the deed of trust the Bank relied on to establish that it\n\nwas the successor in interest to the original first trust deed holder. Barker\n\nalso posited that, even if the Bank had a valid interest in the property, his\n\nown interest in the property, arising from his alleged investment of\n\nroughly $57,000, was superior. Finally, Barker requested that the court\n\nenter an order directing the Bank to produce all documents supporting its\n\ninterest in the property.\n\n On April 4, 2018, the bankruptcy court entered an order denying all\n\nrelief requested in Barker\u2019s April 3, 2018 notice. The bankruptcy court held\n\nthat it had no authority to adjudicate a claim objection against the Bank.\n\nThe court explained that the Bank had not filed a proof of claim, so the\n\ncourt could not determine any claim the Bank might have asserted had it\n\nfiled a proof of claim.\n\n On April 23, 2018, Barker filed an amended notice once again\n\ndisputing the Bank\u2019s claim. The grounds set forth in the amended notice\n\nmirror those set forth in Barker\u2019s April 3, 2018 notice. On April 25, 2018, the\n\nbankruptcy court entered an order denying the amended notice of\n\ndisputed claim for the same reasons it denied the original April 3, 2018\n\nnotice.\n\n On May 4, 2018, Barker moved for an order delaying the closing of\n\nPrincipia\u2019s bankruptcy case. As Barker put it: \u201cThere are critical actions\n\n\n 5\n\fthat must be undertaken on behalf of Debtor, which substantially affect the\n\ndisposition of the instant case, as well as the economic impact to both the\n\nDebtor, as well as all Creditors.\u201d According to Barker, Principia\u2019s\n\nbankruptcy counsel no longer was acting in Principia\u2019s best interests and\n\neffectively had abandoned the case. Barker reasoned that the court should\n\ngive him more time before closing the case so that he could find new\n\ncounsel to represent Principia\u2019s interests in the bankruptcy case.\n\n On May 8, 2018, the bankruptcy court entered an order denying\n\nBarker\u2019s motion. As the court pointed out, Barker failed to specify what\n\ncritical actions needed to be taken in the bankruptcy case and how or why\n\nPrincipia\u2019s counsel allegedly had failed or refused to act. Lacking any\n\nbetter explanation from Barker, the bankruptcy court presumed that the\n\nmotion was simply a third attempt by Barker to put the Bank\u2019s claim at\n\nissue. The bankruptcy court once again held that it could not address the\n\nBank\u2019s claim. Based on this holding, and on the absence of evidence\n\nsupporting the relief requested, the bankruptcy court denied the motion.\n\n On the same day, May 8, 2018, the bankruptcy court entered its order\n\napproving the chapter 7 trustee\u2019s no-asset final report and closing\n\nPrincipia\u2019s bankruptcy case. Barker timely appealed the two May 8 orders.\n\n JURISDICTION\n\n The bankruptcy court has jurisdiction over claims litigation pursuant\n\nto 28 U.S.C. \u00a7\u00a7 1334 and 157(b)(2)(B). We have jurisdiction under 28 U.S.C.\n\n\n 6\n\f\u00a7 158.\n\n ISSUE\n\n Did the bankruptcy court commit reversible error when it denied\n\nBarker\u2019s motions, thereby precluding him from objecting to the Bank\u2019s\n\nclaim, given that the Bank did not file a proof of claim?\n\n STANDARD OF REVIEW\n\n This appeal raises a question of law regarding the claims adjudication\n\nprocess, which we review de novo. See HSBC Bank USA, Nat'l Ass'n v.\n\nBlendheim (In re Blendheim), 803 F.3d 477, 484\u201385 (9th Cir. 2015).\n\n DISCUSSION\n\n On appeal, Barker states the same argument a variety of different\n\nways. According to Barker, if he could use Principia\u2019s bankruptcy case to\n\nchallenge the Bank\u2019s claim and attack its asserted lien against the subject\n\nreal property, then all of Principia\u2019s other creditors (including himself)\n\nwould benefit. Towards this end, Barker attempted to force the Bank to\n\nparticipate in the bankruptcy claims process even though the Bank did not\n\nfile a proof of claim and did not in any other way participate in the\n\nbankruptcy case. The bankruptcy court held that, under these\n\ncircumstances, Barker could not force the Bank to participate in the\n\nbankruptcy claims process.\n\n We agree with the bankruptcy court. It long has been held that liens\n\non real property ordinarily pass through bankruptcy unaffected. Dewsnup\n\n\n 7\n\fv. Timm, 502 U.S. 410, 418 (1992). Therefore, secured creditors have the\n\noption to forego any distribution from the bankruptcy estate and instead\n\nmay rely on their lien rights outside of bankruptcy to satisfy any debt they\n\nare owed. See Schlegel v. Billingslea (In re Schlegel), 526 B.R. 333, 342 (9th Cir.\n\nBAP 2015) (citing Brawders v. Cty. of Ventura (In re Brawders), 503 F.3d 856,\n\n872 (9th Cir. 2007)).\n\n In short, secured creditors generally cannot be forced to adjudicate\n\ntheir claims in a bankruptcy case. Participation in the bankruptcy claims\n\nprocess is voluntary rather than compulsory for secured creditors. As\n\nstated by the Ninth Circuit Court of Appeals:\n\n Every claim must go through the allowance process set forth in\n 11 U.S.C. \u00a7 502 before the claim holder is entitled to participate\n in the distribution of estate assets. The bankruptcy court may\n decline to allow\u2014or \u201cdisallow\u201d\u2014a claim for a variety of\n reasons. But importantly, for creditors holding liens secured\n by property, filing a proof of claim and participating in the\n allowance process\u2014indeed, participating in the bankruptcy\n process as a whole\u2014is completely voluntary. A creditor with\n a lien on a debtor\u2019s property may generally ignore the\n bankruptcy proceedings and decline to file a claim without\n imperiling his lien, secure in the in rem right that the lien\n guarantees him under non-bankruptcy law: the right of\n foreclosure.\n\nIn re Blendheim, 803 F.3d at 484\u201385 (citations omitted and emphasis added);\n\nsee also Wade v. Forest Villa Homeowners\u2019 Ass\u2019n (In re Wade), BAP No.\n\nNC-14-1562-DJuTa, 2015 WL 7281670, at *3 n.4 (9th Cir. BAP Nov. 17,\n\n\n 8\n\f2015), aff\u2019d, 671 F. App\u2019x 689 (9th Cir. 2016) (\u201ca secured creditor \u2018may\n\ndisregard the bankruptcy proceeding, decline to file a claim and rely solely\n\nupon his security if that security is properly and solely in his possession\u2019\u201d)\n\n(quoting U.S. Nat'l Bank in Johnstown v. Chase Nat'l Bank of N.Y.C., 331 U.S.\n\n28, 33 (1947)).\n\n Barker attempted to invoke the bankruptcy claims process against the\n\nBank in a no-asset case where the Bank had not filed a proof of claim.3 That\n\nclaims process would be meaningless unless the trustee administered the\n\nreal property and that administration yielded funds for distribution to the\n\nestate\u2019s creditors. But the trustee did not administer the real property.\n\nInstead, the chapter 7 trustee duly filed a final report identifying this case\n\nas a no-asset case. Barker has never disputed that there exists a lien of\n\nrecord fully encumbering the sole asset of the estate \u2013 the subject real\n\nproperty. Thus, on its face, there was nothing incorrect with the trustee\u2019s\n\ndecision not to administer the asset and to file a no-asset final report. Nor\n\ndoes the record reflect any error in the bankruptcy court\u2019s approval of that\n\nreport and its decision to close the case. Indeed, Barker never filed any\n\npaper in the bankruptcy court specifically arguing that the trustee\u2019s no-\n\n\n\n 3\n Barker admittedly has been litigating with the Bank for years in nonbankruptcy\nvenues concerning the lien. It is telling that, after all of that litigation, Barker was unable\nto present in the bankruptcy court any evidence to support his concerns regarding the\nlien. All he presented to the court were his suspicions and his speculation regarding the\nlien.\n\n 9\n\fasset report was improvident or in error.\n\n On appeal, Barker assails the decisions of both the trustee and the\n\nbankruptcy court. At oral argument, Barker complained that the trustee\u2019s\n\nand the bankruptcy court\u2019s inaction with respect to the Bank's alleged lien\n\ndemonstrated an absence of \u201cintellectual curiosity.\u201d But intellectual\n\ncuriosity does not govern the claims adjudication process, particularly\n\nwhen there is no proof of claim filed against the bankruptcy estate. There is\n\nno legitimate purpose served in deciding who is entitled to a distribution\n\nfrom a debtor\u2019s bankruptcy estate when there are no assets to distribute. In\n\nre Wade, 2015 WL 7281670, at *3 (citing 4 Collier on Bankruptcy\n\n\u00b6 501.01[3][b] (Alan N. Resnick & Henry J. Sommer, eds., 16th ed. rev.)).\n\n As set forth above, the trustee and the bankruptcy court correctly\n\ndecided not to take further action based on the dictates of the Bankruptcy\n\nCode and Rules. On this record, the bankruptcy court did not commit\n\nreversible error when it denied all relief Barker sought in his motions.\n\n CONCLUSION\n\n For the reasons set forth above, we AFFIRM the bankruptcy court\u2019s\n\norders denying Barker\u2019s motions seeking to invoke the claims adjudication\n\nprocess against the Bank.\n\n\n\n\n 10\n\f"} -{"text": "\n214 F.Supp. 621 (1963)\nUNITED STATES of America\nv.\nJohn F. McGONIGAL.\nCr. A. No. 1424.\nUnited States District Court D. Delaware.\nFebruary 5, 1963.\n*622 Stanley C. Lowicki, Asst. U. S. Atty., Wilmington, Del., for plaintiff.\nRobert C. O'Hora and John P. Daley, Wilmington, Del., for defendant.\nLAYTON, District Judge.\nDefendant was tried on an information charging him with engaging in receiving (writing) wagers for or on behalf of an unknown person engaged in the business of accepting (banking) wagers and wilfully failing to pay the special wagering or occupational tax of $50 (failing to purchase the $50 gambling tax stamp), contrary to Title 26 U.S.C. \u00a7\u00a7 4411 and 7203.[1] Defendant did not take the stand in his own defense. The jury returned a verdict of guilty as to Count 1. Defendant thereupon filed motions for judgment of acquittal and for new trial, to which this opinion is directed.\nIn order for the jury to return a verdict of guilty, it must find not only that the defendant was engaged in the business of a writer but that his failure to purchase a $50 gambling tax stamp was wilful. In order for a criminal act to be wilful, it must not only be committed deliberately and knowingly, but with a bad motive or evil intent. United States v. Palermo, 259 F.2d 872 (3rd Cir. 1958). Simply stated, in order for the Government to convict here, it must prove beyond a reasonable doubt that this defendant deliberately committed the specified violation with the intention of getting away with it.\nThe test applicable to a motion for judgment of acquittal is somewhat different from that applicable to a motion for new trial. In the former, the Court scrutinizes the evidence, including reasonable inferences to be drawn therefrom, from the point of view most favorable to the government and assumes the truth thereof. If there is substantial evidence justifying an inference of guilt, irrespective of the evidence adduced by the defendant, the Court must deny the motion. In the latter, where the ground is that the verdict is contrary to the weight of the evidence, the Court weighs the evidence of both sides, considers the credibility of the witnesses, and if the verdict is against the weight of the evidence a new trial must be granted. United States v. Robinson, 71 F.Supp. 9 (D.C. D.C.1947).\nWith these principles in mind, let us examine the record insofar as it concerns defendant's motion for judgment of acquittal.\nThe testimony produced by the Government was sufficient to demonstrate satisfactorily that defendant was a \"bookie\" or, in other words, a writer, but as to the element of wilfulness the evidence was minimal. There was no showing that the defendant knew of the necessity of purchasing a $50 gambling tax stamp, or that he had been in the business for so long and associated so frequently with known gamblers that he should have known of the requirement. There was no evidence of his operation of the gambling business behind a false store front as in so many other cases. Here, defendant seems to have been operating a bona fide fruit and vegetable business.\nIndeed, the sole evidence of notice to defendant of the gambling tax stamp requirement, without which no conviction can stand, is the fact that defendant was proved to have been a lifelong resident of Wilmington, coupled with the fact that 29 articles had appeared in the local newspaper since 1956 advising of *623 the necessity of purchasing a $50 gambling tax stamp before engaging in the business of a \"bookie\" or writer.[2] The Government was unable to prove whether the articles were front page or that defendant was a regular reader of the local newspaper and, of course, was unable to prove that he had read one or more of the articles in question.\nAs elsewhere pointed out, in order to convict here, the Government must produce satisfactory proof that defendant wilfully failed to purchase the $50 gambling tax stamp. Thus, the Government had to prove that the defendant knew that as a condition precedent to engaging in the writing of numbers the stamp had to be purchased. Both the Fifth and Third Circuit Courts have had occasion to speak on the subject of the requirements of actual knowledge on the part of a defendant in cases of this sort. In Hargrove v. United States, 67 F.2d 820, 90 A.L.R. 1276 (5th Cir. 1933), the Court said:\n\"The court here fell into the error of not distinguishing between the elements of an offense, where the statute simply denounces the doing of an act as criminal, and where it denounces as criminal only its willful doing. In the first class of cases, especially in those offenses mala prohibita, the law imputes the intent. [Citations]. Had the prosecution here been under such a statute, the charge of the court would have been unexceptionable. In the second class of cases, a specific wrongful intent, that is, actual knowledge of the existence of obligation and a wrongful intent to evade it, is of the essence.\" (Emphasis added.)\nAnd in United States v. Martell, 199 F.2d 670 (3rd Cir. 1952), Judge Goodrich said this:\n\"Willfulness is an essential element of the crime prescribed by \u00a7 145(b). It is best defined as a state of mind of the taxpayer wherein he is fully aware of the existence of a tax obligation to the government which he seeks to conceal.\" (Emphasis added.)\nThere is no direct evidence that this defendant knew of the requirements of the law.[3] And in view of the use of the word \"wilful\" in the statute, there is, of course, no presumption to that effect. The only circumstantial evidence bearing on his knowledge is, as has been pointed out, the fact that the local newspapers had carried articles on an average of six times yearly for the past five years stating that numbers writers must purchase the $50 gambling tax stamp before engaging in numbers writing. Under a legal system which extends the blanket of protection to a defendant unless found guilty beyond a reasonable doubt, it goes too far here to say with any reasonable conviction that this defendant knew of the existence of Sec. 4411 based upon five or six annual newspaper articles which, because of their possible appearance on a back page, or the fact that he was out of town or did not happen to read the paper on that particular day, may have escaped his attention.\nNo doubt the average juror, and, for that matter, the average judge might very strongly suspect that the defendant here had the requisite guilty knowledge. Nevertheless, on the state of this record such suspicion must be regarded as speculation rather than proof. Without going *624 so far as to say that there could not be a sufficiently strong set of facts based upon newspaper notoriety alone as to sustain a conviction, I am of the opinion that the facts here present no such case.\nAfter scrutinizing this record in a light most favorable to the Government, including all reasonable inferences flowing therefrom, I do not find here substantial evidence justifying an inference of guilt. A judgment of acquittal will be entered.\nNOTES\n[1] There were actually three counts to the indictment. At the end of the trial, the Government withdrew Count 3 and the Court directed a verdict of acquittal as to Count 2.\n[2] Other evidence relied on by the Government has been scrutinized and rejected as having little or no probative force.\n[3] The facts of this case differ so widely from United States v. Minker, D.C., 197 F.Supp. 295, as to render that authority inapplicable here. True, that Court said \"Defendant knew, or must be presumed to have known, of the existence of an excise tax on wagers * * *.\" However, the opinion points out that defendant had actually been informed of the tax obligation by a government officer. Moreover, the record established a persistent and long drawn-out activity in the numbers racket accompanied by consistent acts of deliberate concealment of records.\n"} -{"text": "\n32 So.3d 60 (2010)\nTHE FLORIDA BAR\nv.\nMARTIN (PETER).\nNo. SC09-1307.\nSupreme Court of Florida.\nMarch 8, 2010.\nDecision Without Published Opinion Reinstated.\n"} -{"text": "\n\n\n\n\n\n\n\n\n\nIN THE COURT OF CRIMINAL APPEALS\n\nOF TEXAS\n\n\n\n\n\nNO. WR-69,258-01\n\n\nEX PARTE GREGORY DAVIS, Applicant\n\n\n\n\n\nON APPLICATION FOR A WRIT OF HABEAS CORPUS\nCAUSE NO. 11,534 IN THE 115TH DISTRICT COURT\n\nFROM UPSHUR COUNTY\n\n\n\n Per curiam.\n\nO R D E R\n\n\n\tPursuant to the provisions of Article 11.07 of the Texas Code of Criminal Procedure, the clerk of\nthe trial court transmitted to this Court this application for a writ of habeas corpus. Ex parte Young, 418\nS.W.2d 824, 826 (Tex. Crim. App. 1967). Applicant was convicted of aggravated sexual assault and\nsentenced to thirty years' imprisonment. The Twelfth Court of Appeals affirmed his conviction. Davis v.\nState, No. 12-96-00106-CR (Tex. App.-Tyler, delivered Sept. 24, 1997, no pet.). \n\tApplicant contends that his appellate counsel rendered ineffective assistance because he failed to\ntimely notify Applicant that his conviction had been affirmed and failed to advise him of his right to petition\nfor discretionary review pro se.\n\tApplicant has alleged facts that, if true, might entitle him to relief. Strickland v. Washington, 466\nU.S. 608 (1984); Ex parte Lemke, 13 S.W.3d 791,795-96 (Tex. Crim. App. 2000). In these\ncircumstances, additional facts are needed. Pursuant to Ex parte Rodriguez, 334 S.W.2d 294, 294 (Tex.\nCrim. App. 1960), the trial court is the appropriate forum for findings of fact. The trial court shall provide\nappellate counsel with the opportunity to respond to Applicant's claim of ineffective assistance of counsel\non appeal. The trial court may use any means set out in Tex. Code Crim. Proc. art. 11.07, \u00a7 3(d). In the\nappropriate case, the trial court may rely on its personal recollection. Id.\n\tIf the trial court elects to hold a hearing, it shall determine whether Applicant is indigent. If\nApplicant is indigent and wishes to be represented by counsel, the trial court shall appoint an attorney to\nrepresent him at the hearing. Tex. Code Crim. Proc. art. 26.04. \n\tThe trial court shall make findings of fact as to whether Applicant's appellate counsel timely\ninformed Applicant that his conviction had been affirmed and that he had a right to file a pro se petition for\ndiscretionary review. The trial court shall also make findings of fact as to whether the destruction of prison\nmail logs prejudiced the State's ability to respond. Ex parte Carrio, 992 S.W.2d 486, 488 (Tex. Crim.\nApp. 1999). The trial court shall make any other findings of fact and conclusions of law that it deems\nrelevant and appropriate to the disposition of Applicant's claim for habeas corpus relief.\n\tThis application will be held in abeyance until the trial court has resolved the fact issues. The issues\nshall be resolved within 90 days of this order. If any continuances are granted, a copy of the order granting\nthe continuance shall be sent to this Court. A supplemental transcript containing all affidavits and\ninterrogatories or the transcription of the court reporter's notes from any hearing or deposition, along with\nthe trial court's supplemental findings of fact and conclusions of law, shall be returned to this Court within\n120 days of the date of this order. Any extensions of time shall be obtained from this Court. \n\nFiled: February 13, 2008\nDo not publish\n"} -{"text": "\n257 B.R. 691 (2001)\nDemetrios B. HASEOTES, Appellant,\nv.\nCUMBERLAND FARMS, INC., Appellee.\nNo. CIV. A. 00-40120-EFH.\nUnited States District Court, D. Massachusetts.\nJanuary 31, 2001.\n*692 Stephen Wald, Craig & Macauley, P.C., Whitton E. Norris, III, Davis, Malm & D'Agostine, P.C., William F. Macauley, Craig and Mcauley, Boston, MA, for Demetrios B. Haseotes, Appellants.\nPatrick P. Dinardo, Sullivan & Worcester, LLP, Pamela S. Holleman, Sullivan & Worcester, Patrick P. DiNardo, Sullivan and Worcester, Boston, MA, for Cumberland Farms, Inc., Appellees.\n\nMEMORANDUM AND ORDER\nHARRINGTON, District Judge.\nAppellant Demetrios B. Haseotes is before this Court appealing a decision by the United States Bankruptcy Court for the District of Massachusetts in favor of Appellee Cumberland Farms, Inc. (\"CFI\"). At issue is whether the Bankruptcy Court erred in disallowing proofs of claim filed by Haseotes in CFI's bankruptcy proceedings based on its finding that Haseotes breached his fiduciary duty of loyalty and fair dealing to CFI. After hearing oral argument on the matter, this Court affirms the Decision and Order of the Bankruptcy Court.\nHaseotes is the eldest of seven children who together own all of the shares in CFI, a highly profitable family business begun by their parents in 1938. Haseotes served as CFI's Chairman of the Board of Directors and Chief Executive Officer from 1960 until the late 1980s when he was asked to step down from those positions. Since then, and at all relevant times, Haseotes has remained on the Board of Directors and has served as an \"executive employee\" of CFI.[1] In May, 1992, CFI submitted to the Bankruptcy Court a petition for reorganization under Chapter 11. Eighteen months later, Haseotes submitted two proofs of claim for prepetition indebtedness owed on CFI promissory notes.[2] In 1998, when CFI's reorganization was complete, Haseotes sought payment on his proofs of claim. CFI objected, based on a setoff claim against Haseotes arising from his decisions to have his wholly-owned corporation, Cumberland Crude Processing, Inc. (CCP), repay debts it owed to him and to others, rather than to repay sizable overdue debts it owed to CFI. CFI claimed that a 1988 subordination agreement between CCP and CFI required that as long as CCP was in default on debts owed to *693 CFI, CCP would not, directly or indirectly, make payment on its existing note to Haseotes \"or any substitution or additional promissory note.\" CFI further claimed this contractual obligation only formalized Haseotes' inherent duties as a fiduciary to prioritize repayment to CFI. Following a three-day evidentiary hearing, the Bankruptcy Court ruled that by reason of CFI's valid setoff claim against Haseotos in the amount of $5,753,179.05, which exceeded Haseotes' allowable claims totaling less than $2.949 million, CFI owed Haseotes nothing on his proofs of claim, and, in fact, has a net claim against Haseotes in the amount of at least $2.804 million.\nHaseotes argues that Judge Queenan was in error in finding that Haseotes breached his fiduciary duty of loyalty and fair dealing to CFI, which gave rise to CFI's setoff claim, and in barring Haseotes' statute of limitations defense. Haseotes claims he did not owe CFI a fiduciary duty with respect to his separately owned businesses, but, even if he did, the decisions he made regarding CCP were good faith business decisions made with CFI's best interests in mind. Further, Haseotes urges that CFI was aware of the repayments by CCP when they were made in 1992 and 1993. As a result, CFI is barred by the statute of limitations from even raising its setoff claim, as the three-year period for bringing such a claim expired well before it was raised in the Bankruptcy Court in 1999.\nThis Court reviews factual findings of the Bankruptcy Court for clear error and reviews conclusions of law de novo. See In re Strangie, 192 F.3d 192, 194 n. 1 (1st Cir.1999) citing Adams v. Coveney, 162 F.3d 23, 25 (1st Cir.1998). As noted by the appellant, this Court, under Fed. R.Bank.P. 8013, must determine not whether it would have made the findings the trial court did, but whether after reviewing the evidence it is \"left with the definite and firm conviction that a mistake has been committed.\" In re GSF Corp., 938 F.2d 1467, 1474 (1st Cir.1991), quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985); In re Green, 934 F.2d 568, 570 (4th Cir.1991), citing United States v. U.S. Gypsum, 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948). The Court of Appeals for the First Circuit has stated, \"[t]he bankruptcy judge is on the front line, in the best position to gauge the ongoing interplay of factors and to make the delicate judgment calls which a [discretionary] decision entails.\" In re I Don't Trust, 143 F.3d 1, 4 (1st Cir.1998) quoting In re Martin, 817 F.2d 175, 182 (1st Cir. 1987).\nIndeed, Judge Queenan has been \"on the front line\" throughout the lengthy court battle between Haseotes and CFI. The dispute over the setoff claim now before this Court represents the culmination of nearly eight years of proceedings in front of Judge Queenan in the Bankruptcy Court. Judge Queenan's intimate knowledge of the details of this case is reflected in his meticulous, well-reasoned, thirty-one page Decision and Order. His thorough presentation and analysis of the facts, and his sound application of the law, do not leave this Court \"with a definite and firm conviction that a mistake has been committed.\" In re GSF Corp., 938 F.2d 1467, 1474 (1st Cir.1991), quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985); In re Green, 934 F.2d 568, 570 (4th Cir.1991), citing United States v. U.S. Gypsum, 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948). Consequently, this Court adopts Judge Queenan's findings of fact and recites herein only those facts relating to the ultimate issue of the debt repayments by CCP.\nJudge Queenan correctly relied on Massachusetts law in defining the wide parameters of a fiduciary's duty of loyalty.\nThe directors of a corporation stand in a fiduciary relationship to the corporation. . . . They owe to the corporation both a duty of care and . . . a paramount *694 duty of loyalty. . . . They are bound to act with absolute fidelity and must place their duties to the corporation above every other financial or business obligation. . . . They cannot be permitted to serve two masters whose interests are antagonistic.\nDemoulas v. Demoulas Super Markets, Inc., 424 Mass. 501, 677 N.E.2d 159, 179-80 (Mass.1997).\nAlthough Judge Queenan noted that the present case does not fit squarely within the traditional category of the corporate opportunity doctrine at issue in Demoulas, he correctly invoked its articulation of the breadth of the principles governing a fiduciary's duty of loyalty:\n[C]orporate directors and officers are bound by their duty of loyalty to subordinate their self-interests to the well being of the corporation. A person who owes a fiduciary duty to a corporation is prohibited from taking, for personal benefit, an opportunity or advantage that belongs to the corporation. . . . In selecting a test for determining which ventures rightfully belong to a corporation, and are subject to the corporate opportunity doctrine, the corporation deserves broad protection. Rather than limiting the doctrine's coverage only to those instances where the proposed venture is demonstrably similar to existing and prospective corporate activities, the focus is on the paramount obligations of the fiduciary. In keeping with this principle . . . \"the true basis of the governing doctrine rests fundamentally on the unfairness in the particular circumstances of a director, whose relation to the corporation is fiduciary, `taking advantage of an opportunity [for his personal profit] when the interests of the corporation justly call for protection. This calls for the application of ethical standards of what is fair and equitable . . . [in] particular sets of facts.'\" [citation omitted]. This \"fundamental fairness\" test places the burden on the fiduciary who acquires a corporate (or partnership) opportunity, or who engages in self-dealing, \"to prove that his or her actions were intrinsically fair, and did not result in harm to the corporation or partnership.\" [citations omitted].\nDemoulas, 677 N.E.2d at 180.\nJudge Queenan found the dispute between Haseotes and CFI factually similar to Zimmerman v. Bogoff, 402 Mass. 650, 524 N.E.2d 849 (Mass.1998), which involved a corporation owned in equal shares by a plaintiff and defendant, each of whom also owned separate businesses. The defendant was in charge of the jointly-owned finances. When the corporation ran into financial difficulties, the defendant caused it to pay debts owed to his companies, but not to the plaintiff's companies. The court looked to the fiduciary obligations which shareholders of a close corporation owe to each other. In summary fashion, the court concluded that the defendant had violated these obligations, stating, \"In his position as `control[ler] of the purse strings of the enterprise,' [defendant] caused [the jointly-owned corporation] to withhold from [plaintiff's corporation] substantial sums which were legitimately due. . . . This was a clear breach of fiduciary duty.\" Id. at 855. Judge Queenan ruled that there is no significant difference between the fiduciary duties owed each other by shareholders of a close corporation and the fiduciary duties owed by a director to his corporation, and that in Zimmerman and Demoulas, the Supreme Judicial Court has made clear the principles of fundamental fairness that define the law of fiduciary duty.\nThe appellant breached his fiduciary duty to the appellee based on the principles of fundamental fairness. Appellant chose to purchase CCP, and although he told his siblings that they or CFI would somehow benefit from its operation, Judge Queenan found that they had no legally enforceable rights to the profits from, or ownership interest in, the corporation, as *695 appellant was the sole beneficiary of CCP. The acquisition of CCP proved a financial disaster and CFI suffered major financial consequences as a result. These facts alone might not have amounted to a breach of fiduciary duty if the purchase and operation of CCP had been financed solely with appellant's funds. However, CFI was a principal financier of CCP. Appellant's decisions, from which only he stood to gain, left CFI in the position of being a large creditor of an untried and risky enterprise. More significantly, appellant was bound \u0097 by both contract and fiduciary duty \u0097 to subordinate his personal interests to the interests of CFI with respect to the repayments of the loans. Judge Queenan characterized appellant's conduct in seeking his own financial interests at CFI's expense \"deplorable\" and this Court cannot conclude that it was error for him to hold that appellant's decisions to cause CCP to repay him and his shipping companies, rather than to repay CFI, was a breach of his fiduciary duty of loyalty to CFI.\nNext, the appellant contends that the Bankruptcy Court erred in even allowing appellee's setoff claim because the applicable three-year statute of limitations had expired. Judge Queenan heard oral argument on the matter and from the bench denied appellant's motion to dismiss for two independent reasons: the tolling provision in the reorganization plan and the motion's timeliness. In his written Decision and Order, Judge Queenan also articulated a third ground for denial of the motion: res judicata.\nJudge Queenan ruled that despite appellant's insistence that CFI learned of CCP's loan repayments to him in 1993, which would trigger the running of the statute of limitations and would require that setoff claims be brought by 1996, a tolling of the statute preserved such setoff claims so that they were timely raised in 1999. According to the tolling provision found at Article 6.1(e)(9)(C) of CFI's reorganization plan, the three year statute was tolled from December 30, 1993, the effective date of the plan, to December 31, 1998, when payment of Class 12 Certificates of Indebtedness had been made in full.[3]\nAppellant is correct in urging that he and CFI never executed the specific tolling agreement contemplated in the reorganization plan, but Judge Queenan ruled, in unequivocal terms, that appellant was obligated to execute such a tolling agreement. Appellant cannot escape tolling of the statute on the ground that no agreement was formally executed because the terms of the agreement were clear and binding in the reorganization plan. Judge Queenan correctly recognized the equitable maxim which treats as done that which should be done. See, e.g., Independent Wireless Telegraph Co. v. Radio Corp., 269 U.S. 459, 473, 46 S.Ct. 166, 70 L.Ed. 357 (1926); Camp v. Boyd, 229 U.S. 530, 559, 33 S.Ct. 785, 57 L.Ed. 1317 (1913)(\"Equity regards that as done which ought to be done. It looks to the true intent and meaning rather than the form.\"); Institut Pasteur v. Cambridge Biotech Corp. (In re Cambridge Biotech Corp.), 186 B.R. 9, 16 (Bankr.D.Mass.1995), aff'd, 212 B.R. 10 (D.Mass.1997), aff'd, 186 F.3d 1356 (Fed. Cir.1999); Morris Gordon & Son, Inc. v. Totoni, 324 Mass. 182, 185-86, 85 N.E.2d 319 (Mass.1949); Lonergan v. Highland Trust Co., 287 Mass. 550, 559, 192 N.E. 34 (Mass.1934). This Court agrees with Judge Queenan that the maxim has extra force in this case because of the heavy fiduciary obligations imposed on Haseotes as a director to be fair in his dealings with CFI. Therefore, the failure to execute a separate, written tolling agreement does *696 not negate its obligations as required under the reorganization plan.\nJudge Queenan found that appellant voted in favor of the plan and thereby consented to the tolling provision of the plan. Further, he was represented by two attorneys who reviewed the plan on his behalf. Having received proper notice of the confirmation process, and having failed to object to any of its provisions, confirmation of the plan binds him under principles of res judicata. As a result, the statute of limitations was tolled on December 30, 1993, the effective date of plan confirmation, until it began running again on December 31, 1998, the date by which all Class 12 Certificates of Indebtedness were to be paid in full.\nIn reviewing the denial of appellant's motion to dismiss based on a statute of limitations defense, this Court rules the motion properly denied based on the tolling provision of the reorganization plan. As a result, we need not reach the issue of the timeliness of the filing of the motion, which was an independent basis for Judge Queenan's decision. However, both the rules[4] and the case law dictate the denial of appellant's motion to dismiss because a statute of limitations defense should be pleaded in a timely manner. See, e.g. Venters v. City of Delphi, 123 F.3d 956, 968-69 (7th Cir.) (court \"must not countenance attempts to invoke [statute of limitations] defenses at the eleventh hour, without excuse and without adequate notice to the plaintiff\"); International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers \u0097 Local 1603 v. Transue & Williams Corp., 879 F.2d 1388, 1396 (6th Cir.1989) (defense untimely when plead long after action was initiated); Strauss v. Douglas Aircraft Co., 404 F.2d 1152, 1155-56 (2d Cir.1968) (defense of limitations must be pleaded at earliest possible moment); Peckham v. Ronrico Corp., 211 F.2d 727, 731 (1st Cir.1954) (statute of limitations defense raised too late where party initially asserted only laches in defense to motion); Perlmutter v. Shatzer, 102 F.R.D. 245, 246 (D.Mass.1984) (limitations defense waivable if not raised timely); Steiner v. City of New York, 920 F.Supp. 333, 342 (E.D.N.Y.1996) (statute of limitations defense is affirmative and must be asserted at earliest possible moment and is waived if not promptly pleaded).\nHere, appellant raised his affirmative defense for the first time on the first day of trial. Such a motion cannot be considered timely and a decision to grant the motion would have resulted in unfair prejudice to the appellee. See Keeler v. Hewitt, 697 F.2d 8, 14 (1st Cir.1982) (finding that although court has discretion to allow amended pleadings, deriving opposing party of the opportunity to do appropriate legal research on eleventh-hour defense constitutes prejudice, and the trial court acts within its discretion in refusing to allow amendment to include defense).\nAccordingly, the Decision and Order of the United States Bankruptcy Court for the District of Massachusetts is affirmed.\nSO ORDERED.\nNOTES\n[1] Currently, CFI's shareholders are in dispute as to the composition of its board and are amidst deadlock proceedings in the Delaware Chancery Court.\n[2] CFI did not dispute its basic liability under the notes, but challenged the amount of the claims and the obligation to pay them at all in the face of setoff claims.\n[3] The pertinent part of Article 6.1(e)(9)(C) states:\n\nD.B. Haseotes and the D.B. Haseotes-related entities will agree to enter into a tolling agreement with respect to the statute of limitations relating to any such allegedly improper payments, which tolling agreement will expire on the date the Class 12 Certificates of Indebtedness have been paid in full.\n[4] The rule provides:\n\nIn any opposition to a motion, the opposing party shall admit or deny each allegation of the motion, state any affirmative defense to the motion, and state specifically why the relief requested in the motion should not be granted.\nM.L.B.R. 9013-1(j).\nFurther, pursuant to Fed.R.Bank.P. Rule 7008(c), the statute of limitations is a waivable defense which must be raised in the first responsive pleading. Rule 7008(c) provides, in pertinent part:\n(c) Affirmative Defenses: In pleading to a preceding pleading, a party shall set forth affirmatively . . . statute of limitations . . . and any other matter constituting an avoidance or affirmative defense.\n"} -{"text": "\n22 F.Supp.2d 275 (1998)\nKenneth SMITH, Plaintiff,\nv.\nMONTEFIORE MEDICAL CENTER-HEALTH SERVICES DIVISION; New York City Department of Correction; Deputy Warden of Programs Manzi; John Doe 1 (Asbestos Coordinator); John Doe 2 (Doctor-Physician Assistant) and Jane Doe, Defendants.\nTHE CITY OF NEW YORK s/h/a the New York City Department of Correction, Third-Party Plaintiffs,\nv.\nDAKAR CONSTRUCTION CORPORATION and Dakar Developers Inc., Third-Party Defendants,\nDAKAR DEVELOPERS INC., Fourth-Party Plaintiff,\nv.\nA.L. EASTMOND & SONS INC. d/b/a Ale, Inc., D & S Restoration, Inc. and Reliance National Insurance Company of New York, Fourth-Party Defendants.\nNo. 94 Civ. 7645(SAS).\nUnited States District Court, S.D. New York.\nOctober 14, 1998.\n*276 Kenneth Smith, pro se.\nChristopher Reo, Asst. Corp. Counsel, Corp. Counsel of City of New York, New York, NY, for Municipal Defendants.\nMarc Pillinger, Smith Mazure Director Wilkins, Young Yagerman & Tarallo, P.C., New York, NY, for D&S Defendants.\n\nOPINION & ORDER\nSCHEINDLIN, District Judge.\nPlaintiff, proceeding pro se, brings this action under 42 U.S.C. \u00a7 1983 against Montefiore Medical Center, the City of New York,[1] and Deputy Warden Angelo Manzi (the \"municipal defendants\") alleging, inter alia, that he was denied medical care while he was in the custody of the New York City Department of Correction. See Amended Complaint, \u00b6 IV(3)-(5). Thereafter, the municipal defendants instituted a third-party action against Dakar Developers Inc. seeking contractual indemnification. Dakar Developers Inc. then brought a fourth-party action for breach of contract against A.L. Eastmond & Sons, Inc., Reliance National Insurance Company of New York, and D & S Restoration, Inc. (collectively \"D & S\").\nBy Order of Magistrate Judge James C. Francis dated June 5, 1997, defendants were granted permission to move for summary judgment. The municipal defendants and D & S moved on the ground that there is no evidence that plaintiff suffered from a serious medical condition as the result of his alleged exposure to asbestos. For the following reasons, summary judgment is granted in defendants' favor and plaintiff's complaint is hereby dismissed.\n\nI. The Facts\n\nA. Plaintiff's Claims\nIn May 1994, plaintiff was arrested and charged with second-degree robbery. See Deposition of Kenneth Smith (\"Smith Dep.\"), p. 53, annexed as Exhibit C to the Declaration of Christopher Reo, attorney for the municipal defendants, sworn to June 19, 1998 (\"Reo Decl.\"). He was taken into the custody *277 of the New York City Department of Correction (\"NYCDOC\") on May 10, 1994. Smith Dep., p. 9. On August 12, 1994, while housed in the George Motchan Detention Center (\"GMDC\"),[2] plaintiff alleges that a corridor ceiling covering collapsed causing him to be showered with debris, dust, rocks and insulation material. Id., pp. 56, 107, 111.\nPlaintiff alleges that the debris and dust entered his mouth, eyes, nose, and covered his body. Id., pp. 95, 111, 115, 119. Plaintiff claims he was trapped in the hallway between 30 and 45 seconds and breathed 15 to 20 times before someone inside the prison law library opened the door and allowed him to enter. Id., pp. 115, 117, 124-25. Plaintiff states that he rinsed the material from his mouth, eyes and nose at a sink in the law library. Id., pp. 122-24. The material, according to plaintiff, was later discovered to be asbestos.[3]See Amended Complaint, \u00b6 IV. After the incident, plaintiff allegedly began having trouble breathing, his eyes reddened and teared, and his nose was clogged and runny. Smith Dep., pp. 130-31; 205-08.\nPlaintiff states that he signed up for sick call on the day of the exposure but was not called to the prison's Montefiore Medical Clinic until August 15, 1994, three days later. Amended Complaint, \u00b6 IV(4). Plaintiff asserts that he repeatedly asked to go to emergency sick call over the weekend. Id. In response to these requests, plaintiff was allegedly told by Montefiore staff that asbestos exposure was not an emergency. Id.\nPlaintiff also claims that Deputy Warden Manzi was of no assistance in securing medical assistance. When confronted with plaintiff's exposure, Warden Manzi allegedly responded: \"What are you wooried [sic] about it for? It'll be twenty to thirty years before that kind of asbestoes [sic] will make you sick!\" Id., \u00b6 IV(3). In a declaration sworn to September 15, 1998 (\"Manzi Decl.\") (a copy of which is attached as Exhibit A to the Reply Declaration of Christopher Reo, attorney for the municipal defendants, sworn to September 17, 1998), Deputy Warden Manzi states that he is \"not aware of any instance in which an inmate at G.M.D.C. informed [him] that he had been exposed to asbestos.\" Manzi Decl., \u00b6 3. Furthermore, Deputy Warden Manzi refutes plaintiff's contention that he observed plaintiff in clothing covered with a white dusty substance which he had reason to know was asbestos. Id., \u00b6 4. Although Deputy Warden Manzi has no recollection of plaintiff's alleged request for medical attention on August 12, 1994, he states that it is his practice and procedure to assist inmates in obtaining medical attention. Id., \u00b6 5. Accordingly, Deputy Warden Manzi denies plaintiff's allegation that he directed personnel at the GMDC prison health clinic to neither treat nor record plaintiff's alleged exposure to asbestos. Id., \u00b6 6. Once again, for the purposes of this motion, I will accept Smith's allegations at true.\nPlaintiff went to the Montefiore Medical Clinic on August 15, 1994 and complained that he was coughing and had difficulty breathing, and that his eyes were irritated. Smith Dep., pp. 207-08. He was given cough medication and eye solution for his symptoms. Amended Complaint, \u00b6 IV(5). He was also sent for x-rays and sputum tests. Id. According to plaintiff, on subsequent sick call appearances he was refused treatment by Montefiore staff who allegedly stated that \"it was institutional policy not to deal any longer with the individuals reporting to sick-call for treatment of asbestoes [sic] exposure.\" Id.\nPlaintiff claims that as a result of the August 12 incident, he suffers from nasal *278 congestion, shortness of breath, pain in his rib cage, and dizziness. Smith Dep., p. 226. He also claims to suffer from the following progressively degenerating maladies: respiratory infections, pleuritis, asthma, acute bronchitis, conjunctivitis, rhinitis, and inflammatory disease of the paranasal sinuses. See Affidavit of Kenneth Smith, sworn to August 6, 1998 (\"Smith Aff.\"), \u00b6 1(a). He also claims that a pre-existing hearing condition worsened due to the alleged asbestos exposure. Finally, plaintiff avers that he suffers emotional and mental anguish as well as a fear of developing asbestos-related illness in the future. Id., \u00b6 1(c).\n\nB. Plaintiff's Medical Records\nWhile incarcerated by the NYCDOC, plaintiff was housed at the GMDC and the Otis Bantum Correctional Center (\"OBCC\"). While at the GMDC, plaintiff admits that he was treated at the Montefiore Medical Clinic 5 to 10 times for his asbestos complaints. Smith Dep., p. 224. At the OBCC, plaintiff went to the clinic approximately 10 to 15 times for respiratory and other problems and saw more than 20 health professionals while he was there. Id., pp. 237-38. Plaintiff was evaluated by medical personnel upon transfer from the GMDC to the OBCC. However, this evaluation does not indicate that plaintiff complained of asbestos exposure or that he suffered from any respiratory condition. See Reo Decl., Exh. L (November 11, 1994 OBCC Intake History and Physical Examination form). Similarly, plaintiff's December 28, 1994 admission record into Bellevue Hospital for treatment for unrelated injuries does not mention exposure to asbestos or indicate that plaintiff suffered from any respiratory conditions at that time. See Reo Decl., Exh. M.\nIn March 1995, plaintiff was transferred from the NYCDOC to the New York State Department of Correctional Services (\"NYSDOCS\"). Upon transfer, plaintiff was examined and interviewed by medical professionals. At that time, plaintiff did not complain, nor do his medical records indicate, that he was exposed to asbestos or suffered from any respiratory condition. See Reo Decl., Exh. N (March 16, 1995 NYSDOCS Medical Pre-Screening Form). While incarcerated by the NYSDOCS, plaintiff was admitted to the Erie County Medical Center (\"ECMC\") for treatment for unrelated injuries. Upon admission, plaintiff's medical history and physical condition were reviewed by medical professionals and an anesthesiologist. Again, there are no complaints of exposure to asbestos or respiratory problems. See Reo Decl., Exh. O (June 16, 1996 Anesthesia Evaluation Form).\n\nC. Reports of Medical Experts\nIn addition to the absence of asbestos-related complaints in plaintiff's medical records, several of defendants' medical experts examined plaintiff and reviewed his medical records. Each expert concluded, with a reasonable degree of medical certainty, that plaintiff suffers from no condition associated with asbestos exposure.\nDoctor Lester B. Mayers is a board certified physician specializing in pulmonary diseases and internal medicine. See Affidavit of Doctor Lester B. Mayers, sworn to June 11, 1998 (\"Mayers Aff.\"), \u00b6 1 (a copy of which is annexed as Exhibit I to the Reo Declaration). Doctor Mayers examined plaintiff and reviewed his medical records. Mayers Aff., \u00b6 4. Dr. Mayers noted that although plaintiff's medical records indicate that \"he repeated[ly] visited the prison clinic and was examined extensively during the course of his incarceration, none of those examinations revealed evidence of any asbestos related illness.\" Id., \u00b6 10. Dr. Mayers concluded that plaintiff does not suffer from any physical disorder related to the alleged instance of asbestos exposure. Id., \u00b6 11. Moreover, he found \"no medical or physical objective findings to establish any asbestos related disease or condition.\" Id. According to Dr. Mayers, exposure to asbestos for less than one minute is insufficient to cause an increased risk of any asbestos related illness. Id., \u00b6 8. Finally, Dr. Mayers concluded that a single exposure to asbestos does not lead to asbestos related disease. Id., \u00b6 11.\nIn a Supplemental Affidavit (\"Mayers Supp. Aff.\") (a copy of which is annexed as Exhibit A to the Reply Affidavit of Marc H. Pillinger, attorney for fourth-party defendants), *279 Dr. Mayers addressed several allegations made by plaintiff in his opposition to the instant motion. In particular, Dr. Mayers refuted plaintiff's contention that his alleged diagnosis of bronchitis and asthma proves that he sustained asbestos-related illness. According to Dr. Mayers, neither bronchitis nor asthma are asbestos-related symptoms. Mayers Supp. Aff., \u00b6 5. In addition, Dr. Mayers also rejected the following as \"objective\" findings of asbestos-related disease: a hemangioma, expiratory wheeze and sinus congestion, inflammatory disease in the paranasal sinuses, and pseudo tumor cerebri. Id., at \u00b6 6. Dr. Mayers stated that these findings are not asbestos-related and that there is nothing in plaintiff's medical records to even remotely indicate a causal connection. Id.\nPlaintiff was also examined by Doctor Ralph A. Olson, a physician board certified in neurological surgery. See Affidavit of Doctor Ralph A. Olson, sworn to June 11, 1998, (\"Olson Aff.\"), \u00b6\u00b6 1, 2 (a copy of which is annexed as Exhibit J to the Reo Declaration). His examination revealed that plaintiff does not suffer from any neurological disorder or deficit as a result of his alleged exposure to asbestos. Olson Aff., \u00b6 6. In addition, Dr. Olson's review of plaintiff's medical records also indicated that plaintiff did not suffer from any asbestos-related neurological condition. Id., \u00b6 5.\nFinally, plaintiff was examined by Malcolm H. Schvey, a board certified otolaryngologist. See Affidavit of Malcolm H. Schvey, sworn to June 15, 1998 (\"Schvey Aff.\"), \u00b6 1 (a copy of which is attached as Exhibit K to the Reo Declaration). Doctor Schvey examined plaintiff's ears, nose and throat, his medical records and the audiological report of Dr. Lawrence Deutsch. Schvey Aff., \u00b6\u00b6 5, 13. Dr. Schvey found plaintiff's ears, mouth, palate, hypopharynx, larynx and neck to be normal but that he suffered from allergic rhinitis in his nose. Id., \u00b6 6. Dr. Schvey concluded, with a reasonable degree of medical certainty, that the rhinitis was caused by an allergic reaction, does not affect plaintiff's hearing, and was not causally related to any alleged exposure to asbestos. Id., \u00b6 12. After performing several objective and subjective test to ascertain plaintiff's audiological abilities, Dr. Schvey concluded that plaintiff can hear speech at normal levels. Id. In reaching this conclusion, Dr. Schvey noted that asbestos is not an ototoxic material, meaning that it does not cause hearing loss. Id., \u00b6 4. According to Dr. Schvey, plaintiff has no appreciable hearing loss in either ear but has been well coached in feigning such loss. Id., \u00b6 7.\n\nII. Discussion\n\nA. The Legal Standard\nA motion for summary judgment may be granted only if \"the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.\" Fed.R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The party moving for summary judgment has the burden of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).\nIn determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citing United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962)). However, the moving party is not required to affirmatively disprove unsupported assertions made by the nonmoving party. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548.\nIf the moving party meets its burden, the burden shifts to the nonmoving party to come forward with \"specific facts showing that there is a genuine issue for trial.\" Fed. R.Civ.P. 56(e); see also Liberty Lobby, 477 U.S. at 248, 106 S.Ct. 2505 (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). If there is any evidence in the record from which a reasonable inference could be drawn *280 in favor of the nonmoving party on a material issue of fact, summary judgment is improper. See Hetchkop v. Woodlawn at Grassmere, Inc., 116 F.3d 28, 33 (2d Cir.1997).\nFinally, although the same standards for summary judgment apply when a pro se litigant is involved, the pro se litigant \"should be given special latitude in responding to a summary judgment motion.\" Gonzalez v. Long, 889 F.Supp. 639, 642 (E.D.N.Y.1995); see also Graham v. Lewinski, 848 F.2d 342, 344 (2d Cir.1988) (\"special solicitude should be afforded pro se litigants generally, when confronted with motions for summary judgment\"). Thus, a pro se litigant's complaint, \"however inartfully pleaded,\" must be held to \"less stringent standards than formal pleadings drafted by lawyers.\" Haines v. Kerner, 404 U.S. 519, 520-21, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972).\n\nB. Plaintiff's Deliberate Indifference Claim\nPlaintiff was a pre-trial detainee rather than a convicted prisoner at the time of the alleged incident. Therefore, the standards of the Fourteenth Amendment, not the Eighth amendment, apply to his claim of inadequate medical care. Bryant v. Maffucci, 923 F.2d 979, 983 (2d Cir.1991) (citations omitted). Nonetheless, the \"Second Circuit applies the same standards to deliberate indifference claims under both the Fourteenth Amendment's due process protections and the Eighth Amendment's cruel and unusual punishment protections.\" Sassower v. City of White Plains, 89 Civ. 1267, 1995 WL 222206, at *9, n. 14 (S.D.N.Y. April 13, 1995) (citing Johnson v. Glick, 481 F.2d 1028, 1032 (2d Cir.1973)). See also City of Revere v. Massachusetts General Hospital, 463 U.S. 239, 244, 103 S.Ct. 2979, 77 L.Ed.2d 605 (1983) (a plaintiff's due process rights under the Fourteenth Amendment are \"at least as great as the Eighth Amendment protections available to a convicted prisoner.\"); Montavon v. Town of Southington, 95 Civ. 1141, 1997 WL 835053,*4 (D.Conn. Sept. 29, 1997) (\"Although the Supreme Court has not articulated the duties of a custodial official under the Due Process Clause to provide medical care to a pretrial detainee, it is clear that the detainee's rights are as great as those afforded to a convicted prisoner under the Eighth Amendment\"). Accordingly, plaintiff's denial of medical care claim will be analyzed under Eighth Amendment case law.\n\"Claims of deliberate indifference to serious medical needs are tested under a two-pronged standard requiring sufficient proof of both a serious medical need [objective component] and deliberate indifference to that need [subjective component].\" Sassower, 1995 WL 222206, at *8 (citing Hathaway v. Coughlin, 37 F.3d 63, 66 (2d Cir. 1994)). A serious medical need is one that contemplates \"a condition of urgency, one that may produce death, degeneration, or extreme pain.\" Hathaway, 37 F.3d at 66 (quoting Nance v. Kelly, 912 F.2d 605, 607 (2d Cir.1990) (Pratt, J. dissenting)).[4] The \"seriousness of a medical need may also be determined by reference to the effect of denying or delaying medical treatment.\" Sassower, 1995 WL 222206, at *8. However, \"[m]ere delay in the rendering of medical treatment in and of itself does not rise to the level of a constitutional violation ... To demonstrate a constitutional violation, a plaintiff must show that he sustained substantial harm because of the delay in the rendering of medical treatment.\" Burtton v. Gritter, 95 Civ. 504, 1995 WL 729312, at *4 (N.D.Ind. Nov. 17, 1995) (citations omitted).\nWith regard to the subjective component, the \"charged prison officials must have acted with a sufficiently culpable state of mind by being deliberately indifferent to the health or safety of an inmate.\" King v. Department of Correction, 95 Civ. 3057, 1998 WL 67669, at *5 (S.D.N.Y. February 18, 1998) (citing Farmer v. Brennan, 511 U.S. 825, 834, 114 S.Ct. 1970, 128 L.Ed.2d 811 *281 (1994)). Deliberate indifference to serious medical needs exists only when a prison official \"knows of and disregards an excessive risk to inmate health or safety; the official must both be aware of facts from which the inference could be drawn that a substantial risk of serious harm exists, and he must also draw that inference.\" Farmer, 511 U.S. at 837, 114 S.Ct. 1970. Deliberate indifference may also be manifested by \"intentionally denying or delaying access to medical care or intentionally interfering with the treatment once prescribed.\" Estelle v. Gamble, 429 U.S. 97, 104-05, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976) (footnotes omitted). Negligence, however, does not suffice to establish a constitutional violation. Daniels v. Williams, 474 U.S. 327, 333, 106 S.Ct. 662, 88 L.Ed.2d 662 (1986). Moreover, the Eighth Amendment is only violated by deliberate indifference to medical needs if those needs are serious. Hudson v. McMillian, 503 U.S. 1, 9, 112 S.Ct. 995, 117 L.Ed.2d 156 (1992) (\"society does not expect that prisoners will have unqualified access to health care\").\nHere, plaintiff does not allege facts sufficient to rise to the level of a constitutional violation. Although it is beyond dispute that he was forced to wait three days before he received medical attention, there is nothing in the record to suggest that this delay affected the course of treatment plaintiff would have otherwise received. Basically, plaintiff went to the clinic with cold-like symptoms for which he was given cough syrup and eye solution. Hence, his immediate medical needs were not sufficiently serious to invoke the protections of the Eighth Amendment. Simply put, there is not much that can be done immediately for exposure to asbestos. Thus, although plaintiff may face the risk of developing asbestos-related illnesses in the future, his medical needs at the time of exposure and shortly thereafter were not serious.\nPlaintiff's reliance on Helling v. McKinney, 509 U.S. 25, 113 S.Ct. 2475, 125 L.Ed.2d 22 (1993), does little to further his cause. In Helling, an inmate sued prison officials for jeopardizing his health by assigning him to a cell with another inmate who smoked 5 packs of cigarettes a day. Id. at 28, 113 S.Ct. 2475. The Supreme Court rejected the notion that the harm had to be immediate:\nWe have great difficulty agreeing that prison authorities may not be deliberately indifferent to an inmate's current health problems but may ignore a condition of confinement that is sure or very likely to cause serious illness and needless suffering the next week or month or year.\nId. The Court thus held that the inmate stated a cause of action under the Eighth Amendment by alleging that the prison officials \"have, with deliberate indifference, exposed him to levels of [environmental tobacco smoke] that pose an unreasonable risk of serious damage to his future health.\" Id. at 35, 113 S.Ct. 2475 (emphasis added).\nHere the problem is that the defendants were not deliberately indifferent to plaintiff's medical needs. Given the lack of any treatment for exposure to asbestos, it cannot be said that defendants disregarded an unreasonable risk to plaintiff's health by delaying his access to medical treatment for three days. Moreover, the latency between the exposure and any physical injury belies the notion that the defendants were aware of a substantial risk of serious harm from delaying treatment and consciously ignored that risk. At most, defendants may have been negligent in subjecting plaintiff to a three-day delay but this does not rise to the level of a constitutional violation. See Hendricks v. Coughlin, 942 F.2d 109, 113 (2d Cir.1991) (citing Whitley v. Albers, 475 U.S. 312, 319, 106 S.Ct. 1078, 89 L.Ed.2d 251 (1986)). Accordingly, plaintiff's claim of deliberate indifference to his medical needs claim must be dismissed.\n\nC. Plaintiff's Failure to Warn Claim\nIn Seymour/Jones v. Bricker, 90 Civ. 7757, 1990 WL 223171, at *1 (E.D.Pa. December 18, 1990), an inmate sued prison officials for deliberately failing to warn him of certain remedial asbestos work being performed at the prison. In analyzing the claim, the court stated: \"The only possible constitutional claim that is therefore available to [plaintiff] is that the asbestos work and the defendants' failure to warn him created conditions of confinement that constituted cruel and unusual *282 punishment under the Eighth Amendment.\" Id.\nThe Supreme Court has held that prisoners claiming that conditions of confinement constitute cruel and unusual punishment are required to show deliberate indifference on the part of prison officials. Wilson v. Seiter, 501 U.S. 294, 303, 111 S.Ct. 2321, 115 L.Ed.2d 271 (1991). In addition, for a \"claim based on a failure to prevent harm, an inmate must show that he was incarcerated under conditions posing a substantial risk of serious harm.\" Doyle v. Coombe, 976 F.Supp. 183, 186 (W.D.N.Y. 1997) (citing Farmer, 511 U.S. at 834, 114 S.Ct. 1970), aff'd, 1998 WL 537066 (2d Cir. 1998).\nHere, again, plaintiff's claim must fail because there is nothing in the record that could support a finding of deliberate indifference on the part of the defendants. Assuming plaintiff's allegations to be true, warning signs were posted three days after the alleged incident. As the Supreme Court has stated: \"It is obduracy and wantonness, not inadvertence or error in good faith, that characterize the conduct prohibited by the Cruel and Unusual Punishments Clause ...\" Whitley v. Albers, 475 U.S. at 319, 106 S.Ct. 1078. The fact that warning signs were not posted earlier does not reveal deliberate indifference; at most, it represents negligent conduct. As defendants could not have possibly foreseen the circumstances of plaintiff's alleged exposure, they lacked the culpable state of mind necessary for a constitutional violation.[5] As the Supreme Court noted, \"if a prison boiler malfunctions accidentally during a cold winter, an inmate would have no basis for an Eighth Amendment claim, even if he suffers objectively significant harm.\" Wilson, 501 U.S. at 300, 111 S.Ct. 2321. Accordingly, plaintiff's failure to warn claim must also be dismissed.[6]\nPlaintiff's failure to warn claim must also fail for an additional reason, namely the lack of evidence of a municipal policy or custom. It is well established that a municipality may not be held liable under 42 U.S.C. \u00a7 1983 on a respondeat superior basis. See Monell v. New York City Dep't of Social Servs., 436 U.S. 658, 691, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). Rather, a municipality may only be held liable under \u00a7 1983 for the unconstitutional actions of its employees if those acts were the result of a municipal policy, practice or custom. Id. at 690-91, 98 S.Ct. 2018. A \"policy, practice or custom\" may include a formal policy endorsed by the municipality or a failure by policy makers to train or supervise subordinates. City of Canton v. Harris, 489 U.S. 378, 386-88, 109 S.Ct. 1197, 103 L.Ed.2d 412 (1989). The plaintiff must show that the municipality was the \"moving force\" behind plaintiff's injury. Monell, 436 U.S. at 692, 98 S.Ct. 2018; Board of County Comm'rs of Bryan County, Oklahoma v. Brown, 520 U.S. 397, 117 S.Ct. 1382, 137 L.Ed.2d 626 (1997). That is, \"a plaintiff must show that the municipal action was taken with the requisite degree of culpability and must demonstrate a direct causal link between the municipal action and the deprivation of civil rights.\" Brown, 117 S.Ct. at 1388.\nHere, plaintiff offers no proof of a policy of failing to warn inmates of asbestos work on the part of the City of New York. Rather, he alleges one single injurious event from which he asserts that the City of New York, in conspiracy with its contractors, negligently failed to warn him. \"Proof of a single incident of unconstitutional activity is not sufficient to impose liability under Monell, unless proof of the incident includes proof that it *283 was caused by an existing, unconstitutional municipal policy, which policy can be attributed to a municipal policymaker.\" City of Oklahoma City v. Tuttle, 471 U.S. 808, 823-24, 105 S.Ct. 2427, 85 L.Ed.2d 791 (1985). But see Javid v. Scott, 913 F.Supp. 223, 230 (S.D.N.Y.1996) (noting that in Turpin v. Mailet, 619 F.2d 196 (2d Cir.1980), the Second Circuit held that a single incident of alleged constitutional violation may support a claim against a municipality).[7] In any event, bare allegations of such a policy or custom, without any supporting evidence, do not constitute such proof. See Dwares v. New York, 985 F.2d 94, 100 (2d Cir.1993) (\"The mere assertion, however, that a municipality has such a custom or policy is insufficient in the absence of allegations of fact tending to support ... such an inference.\"). Accordingly, plaintiff's failure to warn claim must be dismissed. See King, 1998 WL 67669, at *3.\n\nD. Plaintiff's Conspiracy Claim\nPlaintiff alleges that medical professionals, as well as defendant Manzi, conspired to conceal the effects of his asbestos exposure by preventing transcription of any discussion of plaintiff's alleged exposure to asbestos. For such a conspiracy to exist, it would have to involve health care providers employed by the Montefiore Medical Center, Bellevue Hospital, Erie County Medical Center and the New York State Department of Correction. However, beside conclusory allegations, plaintiff offers no evidence of such a widespread conspiracy. Plaintiff's completely unsubstantiated allegations of conspiracy are insufficient to defeat defendants' motion for summary judgment. See San Filippo v. U.S. Trust Co. Of New York, Inc., 737 F.2d 246, 256 (2d Cir.1984) (plaintiff's unsubstantiated allegations were insufficient to state a valid \u00a7 1983 claim); see also Hameed v. S. Pundt, 964 F.Supp. 836, 839 (S.D.N.Y.1997) (\"conclusory, vague and general allegations are insufficient to establish that defendants conspired to violate [an inmate's] constitutional rights\"). Accordingly, plaintiff's conspiracy claim must also be dismissed.\n\nIII. Conclusion\nFor the reasons set forth above, summary judgment is granted in favor of defendants and plaintiff's complaint is hereby dismissed. The Clerk of the Court is directed to close this case.\nNOTES\n[1] I previously directed that the City of New York be substituted for defendant New York City Department of Correction.\n[2] Also known as the C-73 Correctional Facility.\n[3] There is considerable controversy as to whether plaintiff was exposed to asbestos at all. Plaintiff alleges that hazardous material warning signs were placed in the area on August 15, 1994 and that following his exposure, he notified two law library coordinators who indicated to him that they were similarly exposed. See Amended Complaint, \u00b6 IV(2), (3). On the other hand, there is the Affidavit of Bogdan Joldzic, president of D & S Restoration, sworn to May 29, 1998 (\"Joldzic Aff.\") (included as Exhibit O to the Affidavit in Support of Motion, sworn to by Marc H. Pillinger, attorney for fourth-party defendants). In that Affidavit, Mr. Joldzic states that on August 12, 1994, his company was not doing any asbestos abatement work in the corridor leading to the law library. Joldzic Aff., \u00b6 3. Viewing the evidence in favor of the nonmovant, it will be assumed for purposes of this motion that plaintiff was in fact exposed to asbestos on August 12, 1994.\n[4] Conditions which have been held to meet the constitutional standard of serious medical need include a brain tumor, broken pins in a hip, premature return to prison after surgery, diabetes requiring a special diet, a bleeding ulcer, and loss of an ear. Nance v. Kelly, 912 F.2d at 607 (citations omitted). Conditions that have been held to fall short of the constitutional standard include a mild concussion and broken jaw, a kidney stone, cold symptoms, headaches, a broken finger, a toothache, and \"bowel problems.\" Id. at 607-08.\n[5] Courts in the Eastern District of Pennsylvania have routinely held that \"mere exposure to asbestos in prison, and a prison official's failure to warn about the presence of asbestos, is insufficient as a matter of law to establish a constitutional violation.\" Robinson v. Vaughn, 91 Civ. 7646, 1992 WL 368461, at *2 (E.D.Pa. December 2, 1992). See also Alim v. Vaughn, 91 Civ. 4348, 1992 WL 209918 (E.D.Pa. August 19, 1992); Seymour/Jones v. Bricker, 90 Civ. 7757, 1990 WL 223171 (E.D.Pa. December 18, 1990).\n[6] Plaintiff's reliance on New York Labor Law \u00a7 904 is misplaced. Assuming a private cause of action against a landowner were permitted under that statute, any failure to warn claim would be grounded in state law, not federal. As this Court declines to exercise supplemental jurisdiction, such claims would have to be brought in state court.\n[7] In Turpin, the circuit court held that \"a single, unusually brutal or egregious beating administered by a group of municipal employees may be sufficiently out of the ordinary to warrant an inference that it was attributable to inadequate training or supervision amounting to deliberate indifference or `gross negligence' on the part of officials in charge.\" 619 F.2d at 202.\n"} -{"text": "\n418 So.2d 583 (1982)\nSTATE of Louisiana\nv.\nJeff L. SPENCE.\nNo. 81-KA-2398.\nSupreme Court of Louisiana.\nJune 21, 1982.\nRehearing Denied September 3, 1982.\n*585 William J. Guste, Jr., Atty. Gen., Barbara Rutledge, Asst. Atty. Gen., Ossie B. Brown, Dist. Atty., Kay Kirkpatrick, Premila Chumbley, Asst. Dist. Attys., for plaintiff-appellee.\nSam J. D'Amico, D'Amico & Curet, Baton Rouge, for defendant-appellant.\nLEMMON, Justice.[*]\nThis is an appeal from a conviction on two counts of negligent homicide.[1] The principal assignments of error concern radar readings of automobile speed and the testing of the alcohol content of defendant's blood.[2]\nFacts\nWhile patrolling an interstate highway, State Trooper Jones observed a sports car break out from a pack of approaching cars in the opposite lane. His radar system clocked the speed of the vehicle at 76 miles per hour. The trooper turned across the neutral ground and pursued the speeding vehicle.\nAs they approached an exit, the pursued vehicle slowed down and moved to the right in order to take the exit ramp. When the trooper turned on his red signal lights in an attempt to pull the vehicle over, the driver accelerated to a speed of approximately 80 mph. The trooper also accelerated at first, but then slowed when he realized that the pursued vehicle would have difficulty entering *586 the heavy traffic on the boulevard at the exit. The vehicle continued at a high rate of speed through the yield sign at the boulevard. Unable to make the sharp turn, the driver attempted to brake and skidded through the northbound lane of the boulevard, hit the raised median, and literally flew into another vehicle. The impact killed two of the passengers in the other car.\nDefendant, the driver of the sports car, was a 19-year-old student at Southeastern Louisiana University at the time of the accident. Before leaving Hammond to drive to Baton Rouge, defendant had drunk a quantity of \"jungle juice\". His blood alcohol content was measured at 0.06% two hours after the accident.\nAssignment of Error No. 2\nDefendant contends that the trial court erred in denying his motion to suppress the intoximeter test. Specifically, he alleges since the advice of rights form contained the outdated provision that \"refusal to submit to this chemical test may also result in the loss of your vehicle registration and license plates\", his consent to submit to the test was improperly coerced, and the test results should have been excluded from evidence.[3]\nAlthough the form used in this case had not been updated to comport with the amended statute, the form correctly advised defendant that his license would be suspended if he refused (R.S. 32:667) and that his refusal would be used against him in court (R.S. 32:666). Moreover, his constitutional rights were fully explained to him. Under these circumstances, the allegedly inaccurate advice of possible additional consequences was not sufficient to require suppression of the test results.\nDefendant also points out that the advice of rights form contained the notation, \"if you refuse the test until you can talk to a lawyer, you will still lose your license\". He argues that placement of this clause immediately after the listing of constitutional rights gives the arrested person the impression that he has no such rights, as well as coercing him into submitting to the test.\nThe clause cannot reasonably be interpreted as implying that an arrested person does not have a constitutional right to consult a lawyer. It merely informs a person that he cannot delay taking the test until he has consulted a lawyer, without incurring the risk that he will lose his license.\nThe reason for this rule is obvious. The relevant point in time for measuring blood-alcohol content is immediately after the driver is stopped, because the blood-alcohol percentage decreases with the passage of time. Were the result otherwise, the driver could effectively defeat the state's efforts to conduct a prompt test by requesting that *587 he be given the opportunity to consult a lawyer.\nFinally, defendant contends that he could not make a knowing and intelligent decision on submitting to the test because the form did not advise him of the consequences of submission, namely, that the results of the test could be used as evidence against him.\nR.S. 32:661(C) does not require such a warning, but only requires that defendant be advised of the consequences of a refusal to submit. The right against self-incrimination is not implicated in the gathering of physical evidence, such as a blood sample for scientific testing, and a warning that such evidence can be used in court is not constitutionally required. Schmerber v. California, 384 U.S. 757, 86 S.Ct. 1826, 16 L.Ed.2d 908 (1966).\nThis assignment of error lacks merit.\nAssignment of Error No. 4\nDefendant contends that the trial court erred in admitting radar evidence of the speed of defendant's vehicle without a proper foundation. C.Cr.P. Art. 773. He further submits that the trial court erroneously took judicial notice of the reliability of radar evidence. Defendant argues that in order to permit the introduction of the results of radar devices, it is necessary first to lay a proper foundation by expert testimony as to the accuracy of the particular type of instrument used by the officer.\nOn direct examination, Trooper Jones was asked to describe the type of radar equipment in his vehicle. Defense counsel was overruled when he objected to the introduction of any evidence concerning the radar equipment without the proper foundation.\nThe trooper then proceeded to explain in detail how his equipment worked, showing a vast and comprehensive knowledge of the system. He testified that he was qualified by the Federal Communications Commission to operate a radar system, that he was also certified by Kustom Systems, the manufacturer of this particular unit that had been selected and furnished for his use by the Office of State Police, and that he was even responsible for training other state troopers in the use and operation of the radar unit. He further testified that he tested the system by means of tuning forks prior to each shift of duty and that on this particular evening he calibrated and tested his unit, which was in perfect working order.\nWhen the state then asked Jones the speed of defendant's vehicle as shown on his radar device, defense counsel objected to the admissibility of such evidence. The trial court retired the jury and allowed defense counsel to question the witness on the foundation for admissibility of the evidence. After extensive cross-examination, the trial judge interrupted when defense counsel asked the witness a hypothetical question concerning the functioning of the radar device in a situation involving approaching vehicles, noting that the witness could not testify about hypothetical situations without being qualified as an expert.\nThe jury was brought back in, and the state continued to lay a foundation. Defense counsel objected again when the witness was asked the speed of the vehicle, and the objection was overruled.\nThe scientific reliability of radar as a recorder of speed is a proper subject for judicial notice.[4] See Annotation, Proof, By Radar or Other Mechanical or Electronic Devices, of Violation of Speed Regulations, 47 A.L.R.3d 822 (1973) and the cases cited therein. The accuracy of radar equipment as a method of measuring speed is so widely known and commonly accepted that it is unnecessary to call an expert witness in each case to testify as to this fact. Defense counsel in the present case conceded as much, but attacked the accuracy and reliability of the particular instrument used in this case.\n*588 The accuracy of a particular radar unit can be established by showing that the operator tested the device in accordance with accepted procedures to determine that the unit was functioning properly and that the operator was qualified by training and experience to operate the unit.\nThe use of calibrated tuning forks, furnished by the manufacturer with each unit, is an accepted method of testing to determine that the set is operating properly and measuring accurately. Before he went on duty each day, Trooper Jones tested the set for accuracy with the tuning forks. He testified that on the day of this incident he tested the unit and determined that it was functioning properly.\nAs to the qualifications of the operator, Trooper Jones testified in detail as to his vast training and experience. Additionally, he was certified to operate the radar equipment by the manufacturer and by the Federal Communications Commission, as noted earlier.\nThe trial judge properly required the state, upon objection by defense counsel, to lay a foundation for the admissibility of the measurement by radar of defendant's speed, and correctly concluded that an adequate foundation had been established. Accordingly, there is no merit to the assignment complaining of the admission of the radar evidence.\nAssignment of Error No. 5\nDefendant contends that the trial court erred in denying his motion for a mistrial when the trooper testified that defendant had resisted arrest. Specifically, defendant argues that such testimony amounted to a legal conclusion or opinion by the witness in violation of R.S. 15:463, which limits testimony to facts known by the witness.\nOn direct examination, the officer described what he saw and did while at the scene, as follows:\n\"I stopped by Mr. Spence's vehicle again. And, I placed handcuffs on his wrists and one around the steering column because I was not able to watch him continually and he was sitting in the car. He was in a dazed condition. I didn't notice any cuts or lacerations on his face. So I just\u0097so he would not leave the scene because that\u0097what had happened here he had been resisting by flight when \u0097.\"\nDefense counsel objected and moved for an admonition and a mistrial, arguing that the officer had given a legal opinion that defendant's actions constituted the offense of resisting an officer. The trooper's statement, in context, was merely an explanation of his decision to handcuff defendant to keep him from leaving the accident, because defendant had previously tried to evade pursuit. The jury could hardly have viewed the testimony as expressing the officer's opinion of defendant's guilt of an uncharged crime.\nDefendant also contends that the trooper's statement was an impermissible reference to another crime in violation of C.Cr.P. Art. 770. Defendant's conduct described by the officer was part of the res gestae, which is always admissible. R.S. 15:447 and 448.\nAccordingly, the trial court properly denied defendant's motion for a mistrial.\nAssignment of Error No. 10\nDefendant contends that the trial court erred in allowing Trooper Jones to testify on redirect examination that alcohol contributed to the accident. Defendant contends that such testimony was in violation of R.S. 15:463, which provides that a witness can testify only as to facts within his knowledge and may not give an impression or opinion.\nDuring cross-examination, Trooper Jones was asked whether he would have arrested defendant for DWI, had he been an investigating officer and not merely a witness to the collision. Trooper Jones answered affirmatively. When defense counsel attempted to impeach him with a statement he had made during the preliminary hearing, Trooper Jones explained the discrepancy in his statements. Defense counsel's questioning continued as follows:\n\n*589 \"Q. Officer the fact remains that you were an officer on the scene. You had chased this man and you\u0097uh\u0097knew good and well that what you should have done if you drive while intoxicated to have charged him with DWI, isn't that true?\n\"A. No, sir, it was a city police investigation, sir. I was simply a witness.\n\"Q. Suppose you had stopped him and you went up to him and he smelled of alcohol without the accident, wouldn't you\u0097would you or would you not have charged him with a DWI?\n\"A. As I stated at a preliminary examination, no, I would not have.\"\nDefense counsel apparently was not merely questioning the officer about defendant's intoxication for impeachment purposes, but for the purpose of getting the officer to admit that defendant did not appear intoxicated at the time of the accident.[5] Under such circumstances, it was entirely proper for the state on redirect examination to elicit further testimony on the trooper's perception of defendant's alcohol related behavior. Furthermore, even if the specific question calling for an opinion was improper, the officer's answer could hardly be grounds for reversal of the conviction.\nAssignment of Error No. 13\nDefendant contends that the trial court erred by not allowing him to question Officer John Barker concerning the authenticity and reliability of the auto-intoximeter tests.\nOfficer Barker of the Baton Rouge City Police testified for the state as to his training and experience in operating the auto-intoximeter machine. The court informed defendant that he would be entitled to cross-examine the witness as to the foundation for the administering of this particular test before the witness would be allowed to answer any question concerning the reading on the machine when defendant was tested. At one point in the cross-examination, defendant asked the witness whether he had a certificate from the manufacturer as to the intoximeter's authenticity. The state objected, stating that the witness had not been offered as an expert in the history of the machine, but merely as the police officer who conducted the alcohol testing. The court sustained the objection and reminded defense counsel to limit his examination to foundation-related questions and to questions concerning compliance with the regulations of the Department of Public Safety.\nDefendant correctly argues that the question of the certification of the machine's reliability was a proper subject of inquiry on cross-examination. However, a certified inspector of these machines, Lawrence Efferson, had testified earlier regarding the recertification of the machine, and the current recertification form was introduced into evidence. Officer Barker simply testified as to his operation of the machine, and he presented the proof of his certification to operate the machine.\nWe conclude there was no error in the trial court's refusal to allow defense counsel to question this particular witness on the certification of the machine.\nAssignment of Error No. 20\nDefendant contends that the trial court erred by not instructing the jury to disregard the results of the auto-intoximeter test, because there was no expert testimony on the interpretation of the machine's reading presented by the state. Specifically, defendant argues that it was reversible error to allow the jury to consider the fact that defendant had a 0.06% blood-alcohol level.\nOfficer Barker, who administered the breath test to defendant, testified that the results of the test indicated that defendant had a blood-alcohol content of 0.06 grams percent.[6] When the witness was asked what a 0.06% reading meant in terms of \"grams percent\", defense counsel objected, stating that the witness was only qualified *590 to testify as to the machine reading and not to interpret the results. The court sustained the objection. Defense counsel then requested that the court instruct the jury to disregard the test results. The court denied this request, and defendant now argues that it was reversible error for the jury to consider the fact that defendant had a 0.06% blood-alcohol level.\nThe essence of defendant's contention is that the test results should not have been admitted, unless the state produced expert testimony to interpret them.\nThe present case is distinguishable from State v. Williams, 375 So.2d 931 (La.1979).[7] In this case, the state did not use the presumption that a person with 0.10% or more is under the influence of alcoholic beverages, because defendant's blood-alcohol level was nowhere near the 0.10% legal presumption level.\nThe trial judge did not instruct the jury that a finding of 0.10% gave rise to a presumption that the person was under the influence of alcoholic beverages, as occurred in State v. Williams, above. The jury was simply informed that defendant had alcohol in his blood, a fact which could properly be considered with other competent evidence in determining whether defendant was under the influence of alcohol. Moreover, the trial judge did not instruct the jury by reading the arguably unconstitutional presumption in the second paragraph of R.S. 14:32. Rather, he properly informed the jury that \"[i]f you find that a person violated a safety law and thereby injured another, you may but are not required to infer that he was criminally negligent\". Under these circumstances, there was no prejudice to defendant in admitting the test results without expert testimony interpreting the results.\nThe convictions and sentences are affirmed.\nDIXON, C. J., concurs with reasons.\n*591 DIXON, Chief Justice (concurring).\nI respectfully concur. The results of the blood-alcohol test should not have been admitted, because of the ambiguous, erroneous and unconstitutional threat of the consequences of seeking legal advice. The suppression of the test results, however, would probably not have affected the verdict.\nNOTES\n[*] Judges William Norris, III and Fred C. Sexton, Jr. of the Second Circuit Court of Appeal and Robert L. Lobrano of the Fourth Circuit Court of Appeal participated in this decision as justices pro tempore with Chief Justice Dixon and Associate Justices Marcus, Blanche and Lemmon.\n[1] Defendant was sentenced to three years on each count, to run concurrently. The sentences were suspended, and defendant was placed on three years of supervised probation with the following conditions: (1) his driving privileges were suspended for one year; (2) he was required to make restitution to the victims' families in the amount of $50 per month for three years; (3) he was required to do volunteer work for eight hours per week in an authorized medical treatment facility preferably in the emergency room; and (4) he was required to remain in pursuit of his college education.\n[2] Defendant's other assignments of error involve only settled principles of law and are treated in an unpublished appendix which is attached to this opinion and is a part of the official record.\n[3] R.S. 32:661 outlines the procedures that must be followed before the results of a chemical test may be used at trial. Section 661(C) provides:\n\n\"C. When a law enforcement officer requests that a person submit to a chemical test as provided for above, he shall first inform the person of the consequences of a refusal. In addition, the law enforcement officer shall have the person sign a standard form advising such person of his constitutional rights; the law enforcement officer shall have the person sign a separate form advising such person of the consequences of his refusal to submit to a chemical test, provided however that a single combination of the two forms may be used. If the person is unable or unwilling to sign the form, the law enforcement officer shall certify that such person was informed of his constitutional rights and was unable or unwilling to sign said form. If the above procedure is not complied with, the results of the test or any reference to it is inadmissible into evidence in any criminal action or proceeding arising out of acts alleged to have been committed while the person was driving or in actual control of a motor vehicle upon the public highways of this state while under the influence of alcoholic beverages.\"\nR.S. 32:896 formerly provided that the registration shall be suspended for all motor vehicles registered in the name of a person refusing to submit to the test, unless that person has or provides proof of financial responsibility with respect to all motor vehicles registered by him. That statute has been amended, but still provides that if a person refuses to submit to the test, the suspended license shall not be reinstated or reissued unless that person provides proof of financial responsibility with respect to all motor vehicles registered by him.\n[4] The trial judge in this case stated, outside the presence of the jury, that he was taking judicial notice of the reliability of radar.\n[5] Intoxication, with its attendant behaviorial manifestations, is an observable condition about which a witness may testify. State v. Neal, 321 So.2d 497 (La.1975).\n[6] R.S. 32:662 provides:\n\n\"A. The chemical test or tests as provided for by this Part shall be subject to the following rules and shall be administered as provided for hereafter:\n\"1. Upon the trial of any criminal action or proceeding arising out of acts alleged to have been committed by any person while driving or in actual physical control of a vehicle while under the influence of alcoholic beverages the amount of alcohol in the person's blood at the time alleged as shown by chemical analysis of the person's blood, urine, breath or other bodily substance shall give rise to the following presumptions:\n\"a. If there was at that time 0.05 per cent or less by weight of alcohol in the person's blood, it shall be presumed that the person was not under the influence of alcoholic beverages.\n\"b. If there was at that time in excess of 0.05 per cent but less than 0.10 per cent by weight of alcohol in the person's blood, such fact shall not give rise to any presumption that the person was or was not under the influence of alcoholic beverages, but such fact may be considered with other competent evidence in determining whether the person was under the influence of alcoholic beverages.\n\"c. If there was at that time 0.10 per cent or more by weight of alcohol in the person's blood, it shall be presumed that the person was under the influence of alcoholic beverages.\n\"B. Percent by weight of alcohol in the blood shall be based upon grams of alcohol per one hundred cubic centimeters of blood.\n\"C. The foregoing provisions of this section shall not be construed as limiting the introduction of any other competent evidence bearing upon the question whether the person was under influence of alcoholic beverages.\n\"This section has no application to a civil action or proceeding.\"\n[7] In State v. Williams, above, this court held that the legal presumption of intoxication arising from a finding of 0.10% or more of alcohol in a person's blood could not be used in a negligent homicide case, because that presumption, combined with the presumption in R.S. 14:32 that violation of a statute is presumptive evidence of criminal negligence, improperly shifts the burden of proof to defendant.\n\nThe court noted, however, that blood-alcohol test results may be admissible, although the combined presumptions are not. The court stated:\n\"Nor do we hold that the PEI test result itself is necessarily inadmissible, if otherwise proper under the rules of evidence, including (assuming indeed it is admissible under evidence law) the requirement of a proper foundation of the reliability of the test and the use of sworn expert opinion testimony to evaluate its results, subject to cross-examination.\" Id. at 936.\nThus, the state was not improperly relieved by a combination of statutory presumptions of its burden of proving beyond a reasonable doubt the essential elements of criminal negligence.\n"} -{"text": "699 F.2d 1274\n226 U.S.App.D.C. 122\nCLOVERLEAF STANDARDBRED OWNERS ASSOCIATION, INC., Appellants,v.The NATIONAL BANK OF WASHINGTON, a banking corporation ofthe District of Columbia, et al.\nNo. 82-1221.\nUnited States Court of Appeals,District of Columbia Circuit.\nArgued Dec. 6, 1982.Decided Feb. 25, 1983.\n\nAppeal from the United States District Court for the District of Columbia (D.C. Civil Action No. 81-00301).\nRichard E. Rice, Baltimore, Md., for appellants. Warren K. Rich and Stephen P. Kling, Baltimore, Md., were on the brief, for appellants.\nRichard T. Tomar, Washington, D.C., for appellees.\nBefore GINSBURG and SCALIA, Circuit Judges, and McGOWAN, Senior Circuit Judge.\nOpinion for the Court filed by Circuit Judge GINSBURG.\nGINSBURG, Circuit Judge:\n\n\n1\nThis appeal challenges a district court order dismissing a civil action because a party \"needed for just adjudication\" under Rule 19 of the Federal Rules of Civil Procedure1 could not be joined as a defendant without destroying diversity jurisdiction.2 The matter in controversy revolves around a contract between two Maryland citizens, plaintiff-appellant Cloverleaf Standardbred Owners Association, Inc. (Cloverleaf) and Laurel Harness Racing Association, Inc. (Laurel). Cloverleaf voluntarily dismissed the complaint as to Laurel, pursuant to Fed.R.Civ.P. 41(a)(1), and sought to proceed solely against defendant-appellee, the National Bank of Washington (NBW or Bank), a District of Columbia corporation. NBW has no direct relationship to Cloverleaf, but it holds Laurel's deposit accounts and has made sizable loans to Laurel. Cloverleaf seeks satisfaction of its contract claim against Laurel by reaching funds deposited with NBW by Laurel.\n\n\n2\nEmphasizing that the agreement between Cloverleaf and Laurel is pivotal to Cloverleaf's complaint, the district court determined: 1) Laurel was \"needed for just adjudication\" ; 2) because both Cloverleaf and Laurel were Maryland citizens and the case did not arise under federal law, joinder of Laurel was not possible; 3) in light of the particular facts and circumstances presented, dismissal was preferable to adjudication without Laurel. See Park v. Didden, 695 F.2d 626, 628-29 (D.C.Cir.1982). Reviewing this determination under an \"abuse of discretion\" standard, see Walsh v. Centeio, 692 F.2d 1239 (9th Cir.1982), we affirm.\n\nI. BACKGROUND\n\n3\nCloverleaf is a Maryland organization representing owners, drivers, and trainers of harness racing horses; the absent party, Laurel, owned and operated Laurel Raceway, a harness racing track. The contract on which Cloverleaf's complaint turns provided that Laurel would pay to Cloverleaf as racing purses a fixed percentage of the betting proceeds. In turn, Cloverleaf would distribute the purses to its members, retaining a small share for administrative expenses. Cloverleaf alleges that Laurel failed to pay $32,423.70 to cover expense reimbursements due Cloverleaf, and commenced this action to recover that amount with interest.\n\n\n4\nLaurel had established several deposit accounts at NBW. In 1978 and 1979, Laurel experienced financial setbacks and borrowed, in a series of loans, a total of $4,850,000 from the Bank. When Laurel defaulted on these loans, NBW offset the funds in Laurel's accounts against the debt. Cloverleaf contends that the Bank wrongfully included in the setoff the amount Laurel owes Cloverleaf.\n\n\n5\nThe complaint in this action named both NBW and Laurel as defendants. NBW moved to dismiss the action, pursuant to Fed.R.Civ.P. 12(b)(1), for lack of subject matter jurisdiction. Joint Appendix (J.A.) 36-45. Complete diversity of citizenship between the parties was plainly absent since Cloverleaf and Laurel both had Maryland citizenship. To cure the absence of complete diversity, Cloverleaf filed a notice voluntarily dismissing the complaint as to Laurel. J.A. 47. NBW then sought dismissal under Fed.R.Civ.P. 19 on the ground that Laurel was a person \"needed for just adjudication\" without whom the action should not proceed. J.A. 60-64. On January 29, 1982, the district court granted NBW's motion observing, inter alia, that \"the absence of [Laurel] from a proceeding to determine the rights and obligations of Cloverleaf as they pertain to money held by [NBW] would hamper a determination by the Court since the very agreement at issue is between [Laurel] and Cloverleaf.\" J.A. 4. The district court stressed the absence at that time of any \"readily apparent impediments to reinstitution of th[e] suit in the local court of the District of Columbia,\" where \"Cloverleaf can obtain a determination of its rights and obligations under the agreement with [Laurel] as well as the responsibilities of [NBW] with respect to the [Laurel] accounts.\" J.A. 4.\n\nII. ANALYSIS\nA. Standard of Review\n\n6\nWe address initially the degree of deference due to a district court's reasoned explanation of its decision to dismiss an action pursuant to Rule 19. The Ninth Circuit recently addressed this issue and held that de novo balancing should not occur on appeal; instead, the district court's application of Rule 19(b)'s \"equity and good conscience\" test should be reviewed under an \"abuse of discretion\" standard. See Walsh v. Centeio, supra, 692 F.2d at 1241-43; Bakia v. County of Los Angeles, 687 F.2d 299, 301 (9th Cir.1982).3 We agree.\n\n\n7\nThe Rules Advisory Committee has noted that the 1966 revision of Rule 19 was designed to steer analysis away from the \"technical and abstract character[ization] of the rights or obligations of the persons whose joinder [is] in question,\" and to direct attention instead to \"the pragmatic considerations which should be controlling.\" Fed.R.Civ.P. 19 advisory committee notes on the 1966 amendments. The Rule, as revised, does eliminate district court discretion to dismiss for nonjoinder simply because an absentee fits Rule 19(a)'s description. District judges are plainly instructed to continue on to the Rule 19(b) determination \"whether in equity and good conscience the action should proceed among the parties before [the court], or should be dismissed, the absent person being regarded as indispensable.\"4 This Rule 19(b) language \"leaves the district judge with substantial discretion in considering which factors to weigh and how heavily to emphasize certain considerations in deciding whether the action should go forward in the absence of someone needed for a complete adjudication of the dispute.\" 7 C. Wright & A. Miller, Federal Practice and Procedure, Sec. 1604 at 45-46 (1972). As the Ninth Circuit observed, the ultimate question Rule 19(b) poses is not \"a purely legal issue\"; it calls for the exercise of \"judgmental discretion.\" A district judge, \"closer to the arena,\" is often better situated than is an appellate panel \"to survey the practicalities involved in the litigation.\" Walsh v. Centeio, supra, 692 F.2d at 1242 (quoting Broussard v. Columbia Gulf Transmission Co., 398 F.2d 885, 889 (5th Cir.1968)).\n\n\n8\nWe do not stray today from this court's recent opinion in Park v. Didden, supra, in which we did not reach the \"abuse of discretion\" or de novo review issue. The district court in Park, without attempting any reasoned explanation, had dismissed an action \"for failure to join necessary and indispensable parties.\" Concluding that the district court had \"misunderstood and therefore misapplied\" Rule 19, id., 695 F.2d at 627, we reversed the dismissal order. Intelligent exercise of \"judgmental discretion\" was not possible in Park because the district court misread the Rule. Here, however, the district judge proceeded as the Rule instructs and looked, finally, to Rule 19(b)'s \"equity and good conscience\" test. When the decision by the court of first instance reflects a clear understanding that the Rule calls for practically-oriented consideration of the competing interests at stake, we should not balance the equities anew. Instead, we should proceed as a court of review and respect the district court's evaluation if we discern no abuse of discretion.5\n\nB. The Merits\n\n9\n1. Cloverleaf's unsupported assertions in the district court.\n\n\n10\nOver two months after NBW sought dismissal of the action under Rule 19, Cloverleaf filed a memorandum, dated January 8, 1982, in which it added to other arguments against dismissal the assertion that \"Laurel is defunct, and at most at shell corporation.\" J.A. 77. Cloverleaf further suggested that Laurel is perhaps owned by NBW, citing \"speculation\" that NBW holds \"a substantial portion of the [Laurel] stock by virtue of foreclosure on defaulted loans, secured by stock.\" J.A. 77. Cloverleaf presented nothing to document the assertion that \"Laurel is a defunct shell without resources or assets,\" J.A. 78 n. 4, and the district court rejected the \"unsupported and unverified\" allegation as \"a statement upon which the Court cannot rely.\" J.A. 4 n.*\n\n\n11\nIn the same January 8 submission, Cloverleaf alleged for the first time that it \"already ha[d] secured a judgment against Laurel ... in a state court proceeding,\" J.A. 78, but \"ha[d] been unable to execute on this judgment.\" J.A. 78 n. 4. Five days later, however, Cloverleaf reported to the district court that it had made an inadvertent error. J.A. 82-83. In fact, Cloverleaf said, Laurel had defaulted in the state (Maryland) action, but Cloverleaf did not \"have a default judgment entered\"; instead, Cloverleaf \"abandoned\" the case when NBW, named as a co-defendant, \"secured a dismissal on jurisdictional grounds.\" It would have been futile, Cloverleaf claimed, to \"secur[e] a default judgment against Laurel.\" J.A. 82.\n\n\n12\nOn appeal Cloverleaf again referred to Laurel's \"defunct\" or bankrupt status and the suspicion that NBW owned \"a substantial portion of the stock of Laurel.\" Appellant's Brief at 13 n. 5; Reply Brief at 3. After oral argument, we granted Cloverleaf's request for leave to file supplemental material and received two documents: (1) a copy of a certificate from the Maryland Department of Assessments and Taxation, dated December 3, 1982, stating that Laurel's charter \"was annulled ... as of October 7, 1981, for failure to file the necessary reports and/or pay the taxes due thereon\"; and (2) a copy of an April 1, 1980, order of the Circuit Court for Howard County, Maryland, in a case titled Cloverleaf Standardbred Owners Association, Inc. v. Laurel Harness Racing Association, Inc., No. A10155, entering judgment against Laurel for $25,732.43 plus interest.\n\n\n13\nIt is apparent that the information contained in these documents was available to Cloverleaf while the case was pending in the district court. Cloverleaf offers no justification for its failure to present the documents, or other official material, to the district judge for consideration in conjunction with NBW's request for a Rule 19 dismissal. Instead, Cloverleaf rested on statements tendered without a shred of documentary support. The district judge properly disregarded such unsupported statements in its January 29, 1982, decision,6 and we limit our review to the case as it was presented to the district court.7\n\n\n14\n2. Laurel as a \"necessary\" party.\n\n\n15\nUnder Rule 19(a),8 a person is \"to be joined if feasible\" if (1) complete relief cannot be accorded in its absence; or (2) the absentee's ability to protect its interests may be impaired by the disposition of the action; or (3) those already parties will be subject to a substantial risk of incurring inconsistent obligations because of the absence. Cloverleaf virtually concedes that Laurel fits Rule 19(a)'s description by admitting that \"[t]he central issue at trial will be whether the funds on deposit [with NBW] belonged to Cloverleaf, or were owned by Laurel,\" Appellant's Brief at 9, and that \"evidence regarding the nature of the banking relationship between Laurel and NBW will be central to resolution of this dispute.\" Id. at 10. All three Rule 19(a) concerns are implicated when the person whose obligation is centrally at issue is missing from the action.\n\n\n16\n3. Laurel as an \"indispensable\" party.\n\n\n17\nRule 19(b),9 the Supreme Court said in Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 88 S.Ct. 733, 19 L.Ed.2d 936 (1968), indicates four interests relevant to the ultimate determination in each case \"whether, in equity and good conscience, the court should proceed without a party whose absence from the litigation is compelled.\" Id. at 109, 88 S.Ct. at 737.10 As cited by the district court in this case, the Provident Bank list directs courts to examine: (1) the plaintiff's interest in having a forum; (2) the defendant's interest in avoiding inconsistent relief or multiple litigation; (3) the interest of the absent party in protecting his rights; and (4) the interest in complete, consistent, and efficacious settlement of the controversy. J.A. 3-4.\n\n\n18\nThe district court gave prime place, as the Supreme Court did in Provident Bank, to the first factor, and underscored the apparent availability of \"the local court of the District of Columbia\" for Cloverleaf's complaint against Laurel and the Bank. J.A. 4; see supra p. 1276.11 This factor, the Supreme Court pointed out, assumes larger proportion when dismissal is sought, as it was here, at an early, pre-trial stage of the litigation. We noted in Park v. Didden, supra, 695 F.2d at 631 n. 13, that where a plaintiff \"will not have an adequate remedy elsewhere\" because the statute of limitations has run, district courts should ordinarily retain the case and not dismiss it pursuant to Rule 19(b). On January 29, 1982, when the district court dismissed this action, a reinstituted suit in the local court of the District of Columbia apparently would have been timely.12 Cloverleaf does not argue otherwise. If the limitation period has run during the pendency of this appeal, the time bar is attributable to Cloverleaf's lapse, and not to the district court's order.\n\n\n19\nThe district court next emphasized that \"the very agreement at issue is between [Laurel] and Cloverleaf.\" J.A. 4. Absent Laurel's participation the interests of both Laurel and the Bank might be detrimentally affected, and there could be no complete settlement of the controversy.13 The latter interest, the Supreme Court observed in Provident Bank, has a public dimension; \"the courts and the public\" have a stake \"in settling disputes by wholes, whenever possible.\" 390 U.S. at 111, 88 S.Ct. at 738.\n\n\n20\nSummarizing its examination, the district court stated that \"the policy concerns underlying Rule 19 will not be frustrated by requiring [Cloverleaf] to pursue this action in local court in the District of Columbia which is the proper forum for resolution of this dispute.\" J.A. 4.14 We find no abuse of discretion in that evaluation. On the contrary, when a district judge adverts to the relevant considerations and engages in a careful, pragmatically-oriented analysis to determine whether a person who cannot be joined as a party is \"needed for just adjudication,\" an appellate panel should generally respect the \"judgmental discretion\" exercised by the court of first instance. See supra p. 1277.\n\nCONCLUSION\n\n21\nThe district court, exercising sound discretion, considered the factors listed in Rule 19 and determined that Laurel was a person \"needed for just adjudication\" and that the action should not proceed in Laurel's absence. Since Laurel's joinder as a defendant would have destroyed the sole jurisdictional basis for bringing the controversy to a federal tribunal, the district court properly dismissed the action. For the reasons stated, we hold that no abuse of discretion taints the judgment before us for review. Accordingly, the judgment of the district court is\n\n\n22\nAffirmed.\n\n\n\n1\n Rule 19, sections (a) and (b) read:\nJoinder of Persons Needed for Just Adjudication.\n(a) PERSONS TO BE JOINED IF FEASIBLE. A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party. If he should join as a plaintiff but refuses to do so, he may be made a defendant, or, in a proper case, an involuntary plaintiff. If the joined party objects to venue and his joinder would render the venue of the action improper, he shall be dismissed from the action.\n(b) DETERMINATION BY COURT WHENEVER JOINDER NOT FEASIBLE. If a person as described in subdivision (a)(1)-(2) hereof cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person being thus regarded as indispensable. The factors to be considered by the court include: first, to what extent a judgment rendered in the person's absence might be prejudicial to him or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person's absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.\n\n\n2\n The dismissal was ordered \"with prejudice.\" The \"prejudice\" indicated by such a dismissal relates to the filing of another action between the same parties on the same claim in federal court. Dismissal for failure to join a party under Rule 19, like dismissal for lack of jurisdiction or improper venue, does not operate as an adjudication upon the merits. See Fed.R.Civ.P. 41(b); Restatement (Second) of Judgments Sec. 20 (1982)\n\n\n3\n The Ninth Circuit noted in Centeio that \"the vast majority of appellate decisions ... under Rule 19(b) ... contain no reference to any standard of review whatever.\" 692 F.2d at 1241\n\n\n4\n The Supreme Court stressed in the leading decision on the approach Rule 19 requires, Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 118-19, 88 S.Ct. 733, 742-743, 19 L.Ed.2d 936 (1968):\nThe decision whether to dismiss (i.e., the decision whether the person missing is \"indispensable\") must be based on factors varying with the different cases, some such factors being substantive, some procedural, some compelling by themselves, and some subject to balancing against opposing interests.\n\n\n5\n We recognize that there are cases in which Rule 19 does not figure in a district court's decision but becomes an issue on appeal in conjunction with a jurisdiction or venue challenge pursued by one or more of several defendants. In such cases, the court of appeals may independently apply Rule 19 or it may remand to the district court for initial consideration of the Rule's application. See Walsh v. Centeio, supra, 692 F.2d at 1241-42\n\n\n6\n There was limited discovery in this case: Cloverleaf served NBW with a set of interrogatories and requested production of documents, but NBW refused to answer any interrogatories or produce any documents relating to its relationship with Laurel, asserting the confidential nature of such information\nCloverleaf now urges, more forcibly than it did in the district court, that further discovery was warranted prior to the Rule 19 dismissal decision. Cloverleaf's situation is analogous to that of a party opposing a motion for summary judgment who claims that he requires further time for investigation and discovery in order to present facts essential to justify opposition to the motion. Under Fed.R.Civ.P. 56(f), a party so situated \"must state by affidavit why he is unable to present the necessary opposing material.\" 10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure Sec. 2740 at 530 (2d ed. 1983). Bare, unverified allegations will not do. Cloverleaf, at the very least, should have submitted to the district court the documents it tendered post-argument on appeal. No discovery from NBW was required to obtain information about the annulment of Laurel's charter in 1981, or to locate the 1980 default judgment that Cloverleaf itself had secured. By affidavit, moreover, Cloverleaf might have explained why it could not obtain, absent further discovery from NBW, any additional corroborating information, if indeed facts not in this record would support such an explanation.\n\n\n7\n Under Fed.R.Civ.P. 60(b), a party may seek district court relief from a final judgment for specified reasons. Cloverleaf made no 60(b) motion and no basis for relief under that Rule occurs to us. Cloverleaf cannot claim \"excusable neglect,\" or assert that the documents submitted after argument of the appeal constituted \"newly discovered evidence which by due diligence could not have been discovered\" in time to oppose dismissal in the district court\n\n\n8\n For the full text of Rule 19(a), see supra note 1\n\n\n9\n For the full text of Rule 19(b), see supra note 1\n\n\n10\n The Court noted that, for convenience, its listing followed the order in Reed, Compulsory Joinder of Parties in Civil Actions, 55 Mich.L.Rev. 327, 330 (1957), rather than the order in Rule 19(b). 390 U.S. at 109 n. 2, 88 S.Ct. at 737 n. 2\n\n\n11\n Cloverleaf urges, based on the order of the listing in Rule 19(b), that the \"availability of an alternative forum\" consideration \"comes into play,\" if at all, only after examination of the first three factors listed in the text of Rule 19(b). Reply Brief at 6-8. It is evident from Provident Bank that the Rule does not call for such ordering by rank. See 390 U.S. at 109, 118-19, 88 S.Ct. at 737, 742-743. The four enumerated factors do not have independent significance; they serve as guides to the overarching \"equity and good conscience\" determination\n\n\n12\n Cloverleaf asserted that NBW wrongfully set off racing purpose monies against Laurel's debt to the Bank on or about October 1, 1979, J.A. 10. See D.C.Code Sec. 12-301 (three-year limitations period for actions on a contract or for any unenumerated action)\n\n\n13\n In Park v. Didden, supra, 695 F.2d at 632, we pointed out that a defendant may implead an absentee \"who is or may be liable to him for all or part of the plaintiff's claim against him,\" Fed.R.Civ.P. 14(a), and that the district court would have ancillary jurisdiction over the third-party claim. While NBW here might have impleaded Laurel, Cloverleaf, as the district court recognized, J.A. 5, could not piggy-back on such a third-party complaint to assert a claim against Laurel. See Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374-76, 98 S.Ct. 2396, 2402-2403, 57 L.Ed.2d 274 (1978) (plaintiff cannot circumvent \"statutory requirement of complete diversity by the simple expedient of suing only those defendants who were of diverse citizenship and waiting for them to implead nondiverse defendants\")\n\n\n14\n In contrast to Park v. Didden, supra, where the controversy centered on the actions of parties who were of diverse citizenship, the contract on which this action is dependent is between citizens of the same state\n\n\n"} -{"text": "823 F.2d 276\nGlenn K. OKADA, William E. Takabayashi, and Richard A.Cooke, Jr., Plaintiffs-Appellees,v.MGIC INDEMNITY CORP., also known as AMBAC Indemnity Corp.and WMBIC Indemnity Corp., Defendant-Appellant.\nNo. 85-2501.\nUnited States Court of Appeals,Ninth Circuit.\nArgued and Submitted March 25, 1986.Decided July 31, 1986.Amended July 8, 1987.Corrected Aug. 10, 1987.\n\nWallace A. Christensen, Washington, D.C., for defendant-appellant.\nJohn S. Edmunds, Honolulu, Hawaii, for plaintiffs-appellees.\nAppeal from the United States District Court for the District of Hawaii.\nBefore FERGUSON, CANBY and HALL, Circuit Judges.\nFERGUSON, Circuit Judge:\n\n\n1\nDefendant MGIC Indemnity Corporation (\"MGIC\") appeals the district court's grant of summary judgment in favor of plaintiffs Glenn K. Okada, William E. Takabayashi, and Richard A. Cooke, Jr. (\"insureds\"), who were insured under a Directors and Officers Errors and Omissions policy issued by MGIC. The district court ruled that MGIC had a duty to pay the defense costs of insureds as those costs came due in lawsuits alleging losses caused by the insureds as directors of a savings and loan association (\"the underlying lawsuits\"); that more than one potentially covered \"loss\" was involved; and that MGIC acted in bad faith by refusing to pay, without condition, the insureds' defense costs in the underlying lawsuits, refusing to affirm or deny coverage of claims in the underlying lawsuits, and refusing to enter settlement negotiations in the underlying lawsuits. Okada v. MGIC Indem. Corp., 608 F.Supp. 383 (D.Hawaii 1985).\n\n\n2\nWe affirm the rulings finding a duty to pay defense costs as they come due and more than one potentially covered \"loss,\" but reverse the ruling that MGIC acted in bad faith.\n\nI.\n\n3\nPlaintiff insureds were three of the eight directors of First Savings & Loan Association of Hawaii (\"First Savings\"). MGIC issued a Directors and Officers Errors and Omissions insurance policy, the relevant terms of which are:\n\n\n4\n[T]he insurer agrees:\n\n\n5\n(a) With the Directors and Officers of the Association that if, during the policy period, any claim or claims are made against the Directors and Officers, individually or collectively, for a Wrongful Act, the Insurer will pay, in accordance with the terms of this policy, on behalf of the Directors and Officers or any of them, their heirs, legal representatives or assigns all Loss which the Directors and Officers or any of them shall become legally obligated to pay.\n\n\n6\n....\n\n1. DEFINITIONS\n\n7\n....\n\n\n8\n(d) The term \"Loss\" shall mean any amount which the Directors and Officers are legally obligated to pay or for which the Association is required to indemnify the Directors or Officers, or for which the Association has, to the extent permitted by law, indemnified the Directors and Officers, for a claim or claims made against the Directors and Officers for Wrongful Acts and shall include but not be limited to damages, judgments, settlements, costs (exclusive of salaries of officers or employees), and defense of legal actions, claims or proceedings and appeals therefrom and cost of attachment or similar bonds; provided, however, such Loss shall not include fines or penalties imposed by law or matters which may be deemed uninsurable under the law pursuant to which this policy shall be construed.\n\n\n9\n....\n\n3. EXCLUSIONS\n\n10\n(a) Except for Loss for which the Association is required to indemnify the Directors or Officers, or for which the Association has, to the extent permitted by law, indemnified the Directors or Officers, the Insurer shall not be liable to make any payment for Loss in connection with any claim made against the Directors or Officers:\n\n\n11\n(1) for libel or slander;\n\n\n12\n(2) based upon or attributable to their gaining in fact of any personal profit or advantage to which they were not legally entitled;\n\n\n13\n(3) for return by the Directors and Officers of any remuneration paid to the Directors and Officers without the prior approval of the governing bodies of the Association, which payment, without such previous approval, shall be held by the Courts to be in violation of law;\n\n\n14\n(4) for an accounting of profits in fact made from the purchase and sale and purchase by the Directors or Officers of securities of the Association within the meaning of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any state statutory law or common law;\n\n\n15\n(5) brought about or contributed to by the dishonesty of the Directors or Officers. However, notwithstanding the foregoing, the Directors or Officers shall be protected under the terms of this policy as to any claims upon which suit may be brought against them, by reason of any alleged dishonesty on the part of the Directors or Officers, unless a judgment or other final adjudication thereof adverse to the Directors or Officers shall establish that acts of active and deliberate dishonesty committed by the Directors or Officers with actual dishonest purpose and intent were material to the cause of action so adjudicated.\n\n\n16\n....\n\n4. LIMITS OF LIABILITY\n\n17\n....\n\n\n18\n(d) Claims based on or arising out of the same act, interrelated acts, or one or more series of similar acts, of one or more of the Directors or Officers shall be considered a single Loss and the Insurer's liability shall be limited to the limit of liability stated in Clause 4(b) and 4(c). In the event that more than one Director or Officer is included in the same Loss, it shall be expressly understood that the total amount of such Loss, for the purpose of determining the aggregate limit for each such involved Director or Officer, shall be apportioned pro rata among each such involved Director or Officer unless otherwise mutually agreed upon by the Director or Officer and the Insurer.\n\n5. COSTS, CHARGES AND EXPENSES\n\n19\n(a) No costs, charges and expenses shall be incurred or settlements made without the Insurer's consent which consent shall not be unreasonably withheld; however, in the event such consent is given, the Insurer shall pay, subject to the provisions of Clause 4, such costs, settlements, charges and expenses.\n\n\n20\n....\n\n\n21\n(c) The Insurer may at its option and upon request, advance on behalf of the Directors or Officers, or any of them, expenses which they have incurred in connection with claims made against them, prior to disposition of such claims, provided always that in the event it is finally established the Insurer has no liability hereunder, such Directors and Officers agree to repay to the Insurer, upon demand, all monies advanced by virtue of this provision.\n\n\n22\nThe policy covered each loss for up to $1 million each year for each director, with an aggregate annual limit for each director.\n\n\n23\nIn 1980, First Savings became insolvent and the Federal Savings and Loan Insurance Corp. (\"FSLIC\") took control of the institution. In 1982, First Hawaiian Bank and FSLIC, as assignees of various shareholders' direct and derivative claims, filed the underlying lawsuits in federal district court against all eight directors of First Savings. See FSLIC v. Alexander, 590 F.Supp. 834 (D. Hawaii 1984). Each director hired defense counsel in the underlying lawsuits and sought payment from MGIC for the fees incurred. MGIC agreed to pay the costs as they came due, but reserved its rights to contest coverage and to demand reimbursement if the policy did not cover the claims involved.\n\n\n24\nAll eight directors accepted payments with MGIC's reservation of rights for nearly two years. After that time three of them, the insureds here, refused to accept payment with the attached reservation of rights. MGIC therefore stopped paying the defense costs of the three directors, who then filed this action in federal district court seeking a declaratory judgment that MGIC had a duty to pay, without condition, defense costs in the underlying litigation as those costs were incurred. The defense costs in the underlying lawsuits exceeded $1 million at the time of the district court decision.\n\n\n25\nThe district court granted the insureds' motion for summary judgment. It ruled, first, that the policy was ambiguous because clause 5(c) conflicted with clause 1(d) and that the policy should be read against MGIC as the drafter of the adhesion contract. The court concluded that MGIC had a duty to pay the insureds' defense costs in the underlying action as they came due.\n\n\n26\nSecond, the district court ruled that the underlying lawsuits involved separate alleged acts, each of which was a potential \"loss\" and could have given rise to a distinct claim. Therefore, even though the acts culminated in one result, First Savings' financial collapse, multiple potentially covered \"losses\" were involved. Because of the policy limits, MGIC could be liable for \"multiple millions\" in the underlying lawsuits.\n\n\n27\nFinally, the district court found that MGIC acted in bad faith because it \"has refused to affirm or deny coverage, tender defense costs when due, or enter into settlement negotiations.\" MGIC timely appeals.II.\n\n\n28\nThe district court had diversity jurisdiction over this case.1 \"A federal court applies the choice of law rules of the state in which it sits ... to determine the substantive law to apply in a diversity action.\" Lettieri v. Equitable Life Assurance Soc'y of the United States, 627 F.2d 930, 932 (9th Cir.1980) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941)). Hawaii courts apply Hawaii state law when the acts covered by the policy occur in Hawaii, the insureds are Hawaii citizens, and the insurance company is not a Hawaii citizen. See, e.g., Crawford v. Ranger Ins. Co., 653 F.2d 1248, 1250 (9th Cir.1981); State Farm Mut. Auto. Ins. Co. v. Bailey, 58 Hawaii 284, 568 P.2d 1185 (1977). Thus, Hawaii law governs this case.\n\n\n29\nWe review de novo grants of summary judgment, First Ins. Co. v. State, 66 Hawaii 413, 416, 665 P.2d 648, 651 (1983), and contract interpretations, Hanagami v. China Airlines, Ltd., 688 P.2d 1139, 1144 (Hawaii 1984).\n\nIII.\n\n30\nSection 1(d) of the MGIC policy explains the limits of coverage. The policy covers \"Loss,\" which is defined as \"the amount which the Directors and Officers are legally obligated to pay ... for a claim or claims made against the Directors and Officers for Wrongful Acts.\" This language establishes the policy as a liability, rather than indemnity, policy. This interpretation is confirmed by the captions to the policy's declarations, which clearly denominate the policy as \"liability insurance.\"\n\n\n31\nMGIC does at times cryptically refer to its policy as an \"indemnity-type policy.\" Insureds assert that MGIC argued earlier that the policy was an indemnity policy in an effort to avoid contemporaneous liability for defense costs. Whatever the case may be, the policy here is a liability policy. As the Fifth Circuit explained in Continental Oil Co. v. Bonanza Corp., 677 F.2d 455 (5th Cir.1982):\n\n\n32\nIn a liability contract, the insurer agrees to cover liability for damages. If the insured is liable, the insurance company must pay the damages. In an indemnity contract, by contrast, the insurer agrees to reimburse expenses to the insured that the insurer is liable to pay and has paid.\n\n\n33\nId. at 459. The policy here, based on loss as incurred and not as loss paid out by insureds, is a liability policy.\n\n\n34\nSince the policy is for liability rather than indemnity, payment by MGIC for loss is not conditioned upon the payment of damages by the directors. Whenever \"loss\" occurs (i.e., whenever the directors are \"legally obligated to pay\" on a covered claim), MGIC must pay that amount. The policyholders thus are assured that they need not expend their own funds in order to receive protection for liability.\n\n\n35\nThe costs of the \"defense of legal actions\" are included in the definition of \"Loss\" in section 1(d). Thus, in the absence of other provisions, the policy demands that MGIC pay those costs when the directors become legally obligated to pay them. The issue in this case is whether MGIC effectively excluded such contemporaneous payment of costs by modifying the general rule encompassed in section 1(d).\n\n\n36\nMGIC claims that the provisions of section 5 of the policy (governing \"costs, charges and expenses\") exclude legal costs from the general rule of contemporaneous recovery. Section 5(a) qualifies the contemporaneous duty to pay costs, charges, and expenses by giving MGIC the right of approval over such expenditures. MGIC's discretion in reviewing costs, charges, and expenses, however, is not unlimited, for approval may not be \"unreasonably withheld.\" MGIC argues that the \"defense of legal actions\" referred to in section 1(d) is included in the \"costs, charges and expenses.\"\n\n\n37\nMGIC argues that section 5(c) further limits payment. Section 5(c) allows the payment of \"expenses\" prior to the disposition of claims. The payment of expenses, however, is within the complete discretion of MGIC. Nowhere does the policy define expenses, or explain how those expenses differ from the broader language of section 5(a), which covers \"costs, charges and expenses.\" We therefore know that the defense of legal actions is covered by the policy, that costs, charges and expenses must be approved by MGIC, but that expenses are excluded from the general duty of contemporaneous payment.\n\n\n38\nWe must interpret the policy to determine whether \"expenses,\" excluded from contemporaneous payment under section 5(c), contain the \"defense of legal actions,\" covered under section 1(d). It is a commonplace that a contract is interpreted to conform to the expectations of the parties at the time of the contracting. See E. Farnsworth, Contracts Sec. 77.7, at 478 (1982) (\"The language of a contract is directed, not at describing experience, but at controlling human behavior.... The concern of the court is not the truth of this language but with the expectations that it aroused in those parties.\"). In contracts of insurance, however, Hawaii law applies a strict form of the rule of construction against the drafter of a contract. See Hurtig v. Terminix Wood Treating & Contracting Co., 692 P.2d 1153, 1154 (Hawaii 1984) (\"[I]nsurance policies must be construed liberally in favor of coverage because they are contracts of adhesion.\"). Thus in examining the entire contract to ascertain and fulfill the reasonable expectations of the parties, see Sturla, Inc., v. Fireman's Fund Ins. Co., 67 Hawaii 203, 209, 684 P.2d 960, 964 (1984), conflicts will be resolved in favor of the insured since MGIC controlled the language of the agreement.\n\n\n39\nWith this background, the contract cannot be read to exclude defense costs from the effect of the general rule of a liability policy. Given the prosecution of this suit, MGIC clearly intended to exclude attorneys fees from immediate payment. At the time critical to our inquiry, however, the time of contracting, it could not have been clear to insureds that they would not be protected from the costs of fees. Section 1(d) provides the coverage in clear language; section 5(c) (we now know) attempts to postpone that coverage pending determination of liability on the underlying claims. The language of section 5(c) simply is unclear in its attempt. Nowhere are \"expenses\" defined; nor is it explained how they differ from the broader category of \"costs, charges and expenses\" of section 5(a). As one court recently noted in following our previous discussion of this policy, \"the large print giveth and the small print taketh away.\" Little v. MGIC Indem. Corp., 649 F.Supp. 1460, 1465 (W.D.Pa.1986). Were the effect of the \"small print\" exception clear, we could not uphold the district court's interpretation. Where, however, the attempted disclaimer is unclear, the insureds reasonably could have believed that contemporaneous payment for legal defense was assured. See Hurtig, 692 P.2d at 1154 (\"Coverage exists under the policy unless the exclusions clearly provide otherwise.\"). To rule otherwise would be to force insureds to rewrite a contract that they have no power to rewrite.\n\n\n40\nOur decision need not create havoc in the already disturbed field of D & O liability insurance.2 Reports discussing policies similar to the one at hand demonstrate a wide variety of policy language.3 The leading policy in this field, Lloyd's of London's \"Lydando No. 1,\" upon which the MGIC policy appears to be based, contains references to costs, charges, and expenses in general. When the policy means to refer to defense costs, however, it expressly does so, avoiding the confusion that is MGIC's downfall here. See Lloyd's Lydando No. 1 Policy Form Sec. 6(C), reprinted in Hinsey, The New Lloyd's Policy Form for Directors' and Officers' Liability Insurance--An Analysis, 33 Bus.Law. 1961 (1978).\n\n\n41\nThis result works no particular hardship on MGIC. MGIC's liability is limited to losses incurred with covered claims. Section 3 of the policy defines claims that are not covered, and therefore the claims upon which MGIC need not pay for the directors' defense. As the district court found, the coverage may be determined by the nature of the underlying complaint. 608 F.Supp. at 389. For example, if a libel claim is filed against a director, MGIC need not pay for the legal defense, since section 3(a)(1) expressly excludes libel and slander claims from coverage. Complaints based on the first four exceptions (libel and slander, illegal profit or advantage, illegal compensation, and short-swing profits) should be easily determined from the pleadings.\n\n\n42\nThe one exclusion from coverage that may be difficult to determine from the pleadings, section 3(a)(5), employs a mechanism to meet this problem. Section 3(a)(5) excludes loss brought about by the \"active and deliberate dishonesty\" of the directors. The exclusion is subject to a special provision that mandates payment unless a final judgment has been rendered confirming the directors' dishonesty. Section 3(a)(5) thus broadens coverage for the one case where coverage cannot be determined until judgment is reached. The district court in Little reached this same conclusion. Little, 649 F.Supp. at 1465.\n\n\n43\nIf an action against the directors incorporates both covered and uncovered claims, the parties must apportion the costs so that MGIC need only pay for amounts generated in defense of covered claims. The apportionment of costs between covered and uncovered claims may be a troublesome problem, but it is one often met under these policies.4 It is certainly no reason to accept MGIC's characterization of the agreement.\n\n\n44\nThis suit was instituted at the behest of directors who refused to accept MGIC's reservation of rights regarding the costs advanced. MGIC may, of course, in payment of costs on covered claims as those costs come due, reserve its rights pursuant to the contract should the claims ultimately prove uncovered. For example, MGIC, while advancing costs, may reserve its rights under section 3(a)(5) should the directors' acts ultimately prove intentional rather than negligent. The directors have a right to the contemporary payment of costs. They have no right, however, to the unconditional payment of costs, when those conditions were clearly and unequivocally expressed.\n\n\n45\nWe conclude that the district court correctly ruled that MGIC must make contemporaneous payments for legal defense on claims covered by the policy. MGIC may reserve its rights under the agreement, however, for the return of advances should the claims ultimately prove to be uncovered.\n\nIV.\n\n46\nMGIC argues that the district court finding of more than one potentially covered \"loss\" was premature, and that the evidence does not support the court's finding of more than one potential loss. The finding was not premature, however, because MGIC had paid more than $1 million. Because the policy limits are $1 million for each \"loss,\" the court had to consider whether MGIC needed to pay any more defense costs. If more than one loss was involved, MGIC would continue to be responsible for the defense costs. The facts on which the district court based its finding are undisputed and, if true, establish that the district court was correct.\n\n\n47\nMGIC concedes that more than $1 million has been expended for defense costs in the underlying lawsuits, but argues that this amount is irrelevant because these defense costs are not a \"loss\" under clause 1(d), but rather an optional payment under clause 5(c). Therefore, MGIC argues, no \"loss\" has been paid; the first $1 million has not been expended, and it is unnecessary at this stage to determine whether another $1 million or more is available.5 MGIC's argument rests primarily on its related argument that it had no duty to defend the underlying lawsuits. MGIC concedes that if it had a duty to defend then the defense costs would come out of the $1 million increments. However, its prematurity argument collapses because we find that it must make contemporaneous payments for legal defense on claims covered by the policy.\n\n\n48\nThe district court found that the underlying lawsuits alleged several distinct acts potentially covered by the MGIC policy.6 The district court reasoned that more than one \"loss\" can culminate in one overall result, First Savings & Loan's failure, but one result does not require finding only one \"loss.\" Finally, the court reasoned that the parties contemplated more than one loss because the directors chose a $1 million \"per loss\" policy rather than one with a $1 million ceiling.7 Thus, the district court finding was timely and correct.\n\nV.\n\n49\nThe district court improperly granted summary judgment on the issue of MGIC's bad faith. Summary judgment is appropriate only when \" 'there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.' \" First Ins. Co. v. State, 66 Hawaii 413, 416, 665 P.2d 648, 651 (Hawaii 1983) (citations omitted). None of the grounds on which the district court based its findings of bad faith--refusal to pay defense costs without reserving its rights, refusal to affirm or deny coverage, and failure to enter settlement negotiations--could have been resolved on summary judgment. MGIC argues that disputed material facts remain. We agree.\n\n\n50\nMoreover, it is unclear whether Hawaii would recognize a duty of good faith and fair dealing for insurance contracts, or bad faith for a breach of such a duty. Neither party cites Hawaii cases, the district court cites a California case for this proposition, and no Hawaii case appears to discuss this issue directly. We need not decide whether Hawaii would adopt this rule, however, because the district court improperly resolved the bad faith issues on summary judgment.\n\n\n51\nThe court erred in finding that MGIC acted in bad faith by advancing defense costs with a reservation of its rights to contest coverage and demand reimbursement. We agree with MGIC that it was reasonable to reserve its rights because coverage liability had not been resolved. See First Ins. Co., 66 Hawaii at 422, 665 P.2d at 654 (discussing reservation of rights without discussing bad faith). We also agree with MGIC that its advancement of defense costs of more than $1 million in the underlying lawsuits raises a material factual dispute as to its good faith.\n\n\n52\nThe district court also erred in finding bad faith in MGIC's refusal to affirm or deny coverage. This conduct was consistent with its reservation of rights to contest coverage. In addition, whether it refused to address the possibility of coverage is a disputed material fact.\n\n\n53\nFinally, the district court erred in finding that MGIC acted in bad faith by refusing to enter settlement negotiations on behalf of the insureds in the underlying lawsuits. The court cites ACandS, Inc. v. Aetna Casualty & Sur. Co., 666 F.2d 819 (3d Cir.1981), in support of its finding. That case holds that an insurance company has a duty to settle in good faith. MGIC does not contest this general rule. However, the record does not support the finding in this case because of material factual disputes; the breach of a duty to settle in good faith depends on the reasonableness of the insurer's conduct. MGIC contests the finding that it refused to enter settlement negotiations. MGIC argues that it did participate in settlement talks; that it asserted its right to participate in settlement negotiations, but that the defendants in the underlying action refused to allow MGIC to participate. The insureds concede that MGIC \"insisted on its right to be present at settlement discussions.\"\n\n\n54\nThus, because of the uncertainty as to whether Hawaii would adopt the insurance \"bad faith\" developments of other jurisdictions, and because the district court erred in resolving the issue on summary judgment when material facts were disputed, we reverse the finding of bad faith.\n\nVI.\n\n55\nWe affirm the grant of summary judgment in favor of the insureds on the first two rulings: that the policy created a contemporaneous duty to pay costs and that the underlying lawsuits involved more than one potentially covered \"loss.\" MGIC may reserve its rights under the contract for return of the advances should the losses ultimately prove uncovered. Because disputes of material fact remain, and because it is unclear whether Hawaii recognizes the duty of good faith and fair dealing in insurance contracts, we reverse the summary judgment on the ruling that MGIC acted in bad faith.\n\n\n56\nAFFIRMED IN PART, REVERSED IN PART, AND REMANDED.\n\n\n\n1\n The plaintiffs were citizens of Hawaii, and the defendant was a New York corporation with its principal place of business in Wisconsin. Because the insureds alleged that they each accrued over 200 hours of defense counsel costs and that MGIC was liable for the costs, each fulfilled the $10,000 amount in controversy required for diversity jurisdiction. See 28 U.S.C. Sec. 1332\n\n\n2\n See Comment, Void Ab Initio: Application Fraud as Grounds for Avoiding Directors' and Officers' Liability Insurance Coverage, 74 Calif.L.Rev. 929, 929 (1986)\n\n\n3\n Compare the MGIC policy with the policy interpreted in Pepsico, Inc., v. Continental Casualty Co., 640 F.Supp. 656, 659-60 (S.D.N.Y.1986), and other policies discussed therein\n\n\n4\n See W. Knepper, Liability of Corporate Officers and Directors, 642-43 (3d ed, 1978) (discussing the apportionment of defense payments between covered directors and the uncovered corporation)\n\n\n5\n The district court and both parties apparently agree that MGIC's duty to pay defense costs, if one exists, will end when the costs exceed the policy limits. It is unclear whether the agreement is based on the policy language that defense costs constitute a \"loss\" or on a general rule that the duty to defend lapses when the policy limits are exhausted\n\n\n6\n For example, \"(1) voting at separate times to authorize spot loans to home buyers; (2) authorizing five separate, unrelated large condominium project loans; [and] (3) ordering the move and renovation of corporate headquarters without having sufficient funds therefor.\"\n\n\n7\n The insureds chose the more expensive option for limits of liability, which provided for $1 million each loss, with an aggregate limit each policy year for each director and officer. The other option would have provided $1 million each year, regardless of the number of suits or the number of Directors and Officers insured\n\n\n"} -{"text": "\n3 So.3d 344 (2008)\nStephen WINTER, Appellant,\nv.\nRobert HAGER, Jon Miller, Bruce Carr, Emerald Shares, LLC, South Elmwood Realty Co., Inc., Safe Harbour World Health & Healing Foundation, China America Group, Inc., and David Knoll, Appellees.\nNo. 2D08-593.\nDistrict Court of Appeal of Florida, Second District.\nDecember 3, 2008.\nSusan W. Fox of Fox & Loquasto, P.A., Tampa, for Appellant.\nPhilip J. Crowley and Tracy Martinell Henry of Hinshaw & Culbertson LLP, Tampa, for Appellees Robert Hager, Jon Miller, and Bruce Carr.\nNo appearance for remaining appellees.\nPER CURIAM.\nAppellees Robert Hager, Jon Miller, and Bruce Carr filed suit against appellant Stephen Winter and his co-defendants, appellees Emerald Shares, LLC, South Elmwood Realty Co., Inc., Safe Harbour World Health & Healing Foundation, China America Group, Inc., and David Knoll, claiming breach of contract, unjust enrichment, and account stated. The suit was based on a loan to Emerald Shares, LLC that was allegedly guaranteed by Mr. Winter and his co-defendants. Attached to the complaint was the primary evidence: the promissory note of Emerald Shares for one million dollars and the guaranties of the defendants. Mr. Winter's alleged personal payment guaranty consisted of ten *345 pages of which only the last, the signature page, contained a fax notation showing that it was sent from Mr. Winter's home telephone number. After several pretrial motions and discovery, the plaintiffs moved for summary judgment, despite the fact that some motions had not yet been ruled upon. Mr. Winter opposed the motion for summary judgment, claiming, among other things, that what he signed was not a personal guaranty but an agreement to grant the plaintiffs a shared lien on a parcel of real estate. The trial court granted the summary judgment and entered judgment in favor of the plaintiffs. We reverse.\nWe are cognizant of the fact that immediately above Mr. Winter's signature on the last page of the alleged guaranty appears the following: \"IN WITNESS WHEREOF, the undersigned has duly executed this Guaranty as a sealed instrument the day and year first above set forth[.]\" Mr. Winter testified in deposition that he did not realize, not having the remaining pages before him when he signed this page and faxed it to the plaintiffs, that this was a personal guaranty and not the agreement for the shared lien position he had negotiated. Several other witnesses, whose sworn statements were presented to the trial court, corroborated Mr. Winter's understanding. This evidence shows that a disputed, material fact existed, including receipt of an email containing the entire ten-page guaranty. It was, thus, error for the trial court to grant summary judgment at this stage. See Brakefield v. CIT Group/Consumer Fin., Inc., 787 So.2d 115, 116 (Fla. 2d DCA 2001) (reversing summary judgment because movant had not \"demonstrated conclusively and with certainty that [the nonmovant] could not raise any genuine issues of material fact\").\nSummary judgment reversed and cause remanded for further proceedings.\nFULMER, CASANUEVA, and KELLY, JJ., Concur.\n"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 02-7808\n\n\n\nDAVID EMANUEL STRICKLAND,\n\n Petitioner - Appellant,\n\n versus\n\n\nTHEODIS BECK, Secretary of the North Carolina\nDepartment of Correction,\n\n Respondent - Appellee.\n\n\n\nAppeal from the United States District Court for the Middle\nDistrict of North Carolina, at Durham. William L. Osteen, District\nJudge. (CA-01-1132-1)\n\n\nSubmitted: March 20, 2003 Decided: March 25, 2003\n\n\nBefore WILLIAMS and TRAXLER, Circuit Judges, and HAMILTON, Senior\nCircuit Judge.\n\n\nDismissed by unpublished per curiam opinion.\n\n\nDavid Emanuel Strickland, Appellant Pro Se. Clarence Joe DelForge,\nIII, OFFICE OF THE ATTORNEY GENERAL OF NORTH CAROLINA, Raleigh,\nNorth Carolina, for Appellee.\n\n\nUnpublished opinions are not binding precedent in this circuit.\nSee Local Rule 36(c).\n\fPER CURIAM:\n\n David Emanuel Strickland seeks to appeal the district court\u2019s\n\norder accepting the recommendation of the magistrate judge and\n\ndenying relief on his petition filed under 28 U.S.C. \u00a7 2254 (2000).\n\nWe have independently reviewed the record and conclude that\n\nStrickland has not made a substantial showing of the denial of a\n\nconstitutional right. See Miller-El v. Cockrell, 123 S.Ct. 1029\n\n(U.S. Feb. 25, 2003). Accordingly, we deny a certificate of\n\nappealability, deny leave to proceed in forma pauperis, and dismiss\n\nthe appeal. See 28 U.S.C. \u00a7 2253(c) (2000). We dispense with oral\n\nargument because the facts and legal contentions are adequately\n\npresented in the materials before the court and argument would not\n\naid the decisional process.\n\n\n\n\n DISMISSED\n\n\n\n\n 2\n\f"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n\n No. 95-7354\n\n\n\nROGER D. YOUNG,\n\n Plaintiff - Appellant,\n\n versus\n\nKEITH HESTER; W. V. RITCHIE,\n\n Defendants - Appellees.\n\n\n\nAppeal from the United States District Court for the Eastern Dis-\ntrict of North Carolina, at Raleigh. James C. Fox, Chief District\nJudge. (CA-93-717-CT-5-F)\n\n\nSubmitted: March 21, 1996 Decided: April 2, 1996\n\n\nBefore NIEMEYER and MICHAEL, Circuit Judges, and BUTZNER, Senior\nCircuit Judge.\n\nAffirmed by unpublished per curiam opinion.\n\n\nRoger D. Young, Appellant Pro Se. Mark J. Pletzke, NORTH CAROLINA\nDEPARTMENT OF JUSTICE, Raleigh, North Carolina, for Appellees.\n\nUnpublished opinions are not binding precedent in this circuit.\nSee Local Rule 36(c).\n\fPER CURIAM:\n\n Appellant appeals from the district court's order denying\n\nrelief on his 42 U.S.C. \u00a7 1983 (1988) complaint. We have reviewed\n\nthe record and the district court's opinion and find no reversible\n\nerror. Accordingly, we affirm on the reasoning of the district\n\ncourt. Young v. Hester, No. CA-93-717-CT-5-F (E.D.N.C. Aug. 3,\n1995). We dispense with oral argument because the facts and legal\n\ncontentions are adequately presented in the materials before the\n\ncourt and argument would not aid the decisional process.\n\n\n\n\n AFFIRMED\n\n\n\n\n 2\n\f"} -{"text": "868 F.2d 644\nM. Joseph ROCKS, Frank A. Salvatore, Christopher R. Wogan,Joan L. Krajewski and John L. Kelly, Appellants,v.CITY OF PHILADELPHIA, W. Wilson Goode, Curtis Jones, Jr.,Minority Business Enterprise Council, Benjamin F.Ellis and Angela Dowd-Burton, Appellees.\nNo. 88-1616.\nUnited States Court of Appeals,Third Circuit.\nArgued Jan. 11, 1989.Decided March 1, 1989.\n\nHugh J. Bracken (argued), Richard A. Sprague, Randi J. Vladimer, Sprague, Higgins & Creamer, Philadelphia, Pa., for appellants.\nSeymour Kurland (argued), Carl Oxholm, III, Office of the City Solicitor, Philadelphia, Pa., for appellees.\nBefore HIGGINBOTHAM, COWEN and ALDISERT, Circuit Judges.\nOPINION OF THE COURT\nALDISERT, Circuit Judge.\n\n\n1\nThe appellants are five Philadelphia residents and taxpayers. They are not now, nor will they in the future be, involved in the construction business. They have appealed from a district court judgment dismissing their complaint against the city and its officials for lack of standing. The complaint asserted an equal protection violation resulting from the application of minority business enterprise participation requirements (\"MBE\") to a city construction project. The question for decision is whether, as contended, the appellants have standing to assert this equal protection claim based upon their status as residents and taxpayers. They rely on the teachings of Bowen v. Kendrick, --- U.S. ----, 108 S.Ct. 2562, 101 L.Ed.2d 520 (1988) and Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968). We agree with the district court and will affirm.\n\n\n2\nJurisdiction was proper in the trial court based on 28 U.S.C. Sec. 1331. Jurisdiction on appeal is proper based on 28 U.S.C. Sec. 1291. Appeal was timely filed under Rule 4(a), F.R.App.P.\n\n\n3\nThe court is reviewing the dismissal of the complaint for failure to state a claim on which relief can be granted. Rule 12(b)(6), Fed.R.Civ.P. The applicable standard of review requires the court to accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party. Wisniewski v. Johns-Manville Corp., 759 F.2d 271, 273 (3d Cir.1985); Rogin v. Bensalem Twp., 616 F.2d 680, 685 (3d Cir.1980), cert. denied sub nom., Mark-Garner Assocs., Inc. v. Bensalem Twp., 450 U.S. 1029, 101 S.Ct. 1737, 68 L.Ed.2d 223 (1981); Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).\n\nI.\n\n4\nIn February of 1988, the City of Philadelphia issued invitations to bid on a portion of the construction of the Criminal Justice Center. The bid specifications required 15% minority owned business enterprise participation and 10% female owned business enterprise participation. App. at 52. On March 4, 1988, the Department of Public Property issued Addendum No. 1, giving notice to all prospective bidders that, for this project, the required minority business enterprise participation was increased to 35%, and \"at least 45% of the employment hours for the work performed on-site for this bid package shall be performed by qualified minority and female workers, made up of 35% minority and 10% female.\" App. at 53; see Philadelphia Code, ch. 17-500 to 504 (giving the City of Philadelphia discretion to set minority business enterprise participation requirements).\n\n\n5\nAddendum No. 1 was circulated to potential contractors. There is no evidence in the record that any objections were raised by the appellants or by any potential contractor at any time prior to bid opening. Three bids were submitted and the city announced the project would be awarded to Cornell/Coastal Steel. It was at this time that appellants filed a complaint in the Philadelphia County Court of Common Pleas. The case was then removed to the federal district court for the Eastern District of Pennsylvania.\n\n\n6\nIn the complaint, Rocks, and the other plaintiffs claimed that: (1) the increased minority participation requirements were violative of the equal protection clause of the fourteenth amendment of the constitution; (2) the increased requirements violated the constitutional guarantee of substantive due process; (3) as a matter of state law, the mayor and the city agencies lacked the power to increase the minority business enterprise participation requirements; and (4) the agency proceeding to increase minority participation did not comply with the procedural requirements of state law.\n\n\n7\nThe district court held that the plaintiffs did not have standing to challenge the MBEs on equal protection grounds. The court acknowledged that Rocks and the other plaintiffs possessed what has been described as article III or \"pure\" standing. App. at 125. However, the court found that the nonconstitutional, prudential limitations on standing had not been satisfied. App. at 126; see Valley Forge Christian College v. Americans United for the Separation of Church and State, 454 U.S. 464, 471, 102 S.Ct. 752, 758, 70 L.Ed.2d 700 (1982); Duke Power Co. v. Carolina Environmental Study Group, 438 U.S. 59, 72-82, 98 S.Ct. 2620, 2630-35, 57 L.Ed.2d 595 (1978); Singleton v. Wulff, 428 U.S. 106, 112, 96 S.Ct. 2868, 2873, 49 L.Ed.2d 826 (1976); Warth v. Seldin, 422 U.S. 490, 495, 95 S.Ct. 2197, 2203, 45 L.Ed.2d 343 (1975). The court stated that the appellants were \"attempt[ing] to raise the equal protection rights of non-minority businessowners and workers with whom they have no special relationship.\" App. at 126.\n\n\n8\nThe district court also found that appellants failed to state a claim for violation of substantive due process. App. at 131-33. Relying on Pace Resources, Inc. v. Shrewsbury Twp., 808 F.2d 1023 (3d Cir.) cert. denied, 482 U.S. 906, 107 S.Ct. 2482, 96 L.Ed.2d 375 (1987), the court held that plaintiffs had not met the pleading requirements necessary to pursue such a claim. See Rogin, 616 F.2d at 689 (quoting Williamson v. Lee Optical, 348 U.S. 483, 487-88, 75 S.Ct. 461, 464, 99 L.Ed. 563 (1955)). The court said that the complaint raised conclusory allegations only, and that without more, the complaint did not qualify as a substantive due process attack. App. at 132. Appellants have not challenged this ruling before us. Having disposed of the federal issues, the district court then remanded the proceeding to the state court. Rocks and the other plaintiffs appealed the district court's decision denying them standing.\n\nII.\n\n9\nBefore addressing appellants' main contentions, based on Flast v. Cohen and Bowen v. Kendrick, it is necessary to consider satellite contentions that have been raised, but not strenuously pressed by the parties.\n\nA.\n\n10\nIn their brief appellees suggested that this case may be moot. Yet at the beginning of oral argument, the City Solicitor candidly explained to the court:\n\n\n11\nI think I should address myself to the mootness issue quickly. The principle involves the one of capable of repetition, yet evading review.\n\n\n12\nAnd we raised that point to the Court so that you would have all the facts in front of you.\n\n\n13\nIt is my basic position, however, that on the narrow test, on that extreme requirement, that this case probably is not moot, Your Honor.\n\n\n14\nTr. of Oral Argument at 17. This proposition is supported by the case law. See County of Los Angeles v. Davis, 440 U.S. 625, 631, 99 S.Ct. 1379, 1383, 59 L.Ed.2d 642 (1979); Jersey Cent. Power & Light Co. v. Lacey Twp., 772 F.2d 1103, 1108 (3rd Cir.1985), cert. denied, 475 U.S. 1013, 106 S.Ct. 1190, 89 L.Ed.2d 305 (1986). Accordingly, we proceed on the assumption that this case is not moot.\n\nB.\n\n15\nAppellants also seem to suggest, at least at oral argument, that we should apply Pennsylvania case law respecting the broad rights of municipal taxpayers to sue local government agencies, and that this case may fall \"within the ambit of the well-defined rule that a taxpayer may challenge 'wrongful expenditure of tax monies and the wasting of assets.' Loewen v. Shapiro, 389 Pa. 610, 613, 133 A.2d 525, 527 (1957).\" Price v. Philadelphia Parking Auth., 422 Pa. 317, 221 A.2d 138, 143 (1966); see also Page v. King, 285 Pa. 153, 156, 131 A. 707, 708 (1926) (\"[a]ppellant's right as a taxpayer, having an interest in public funds, to maintain a bill to prevent an unauthorized or unlawful expenditure of state money cannot now be questioned. Frame v. Felix, 167 Pa. 47, 49, 31 A. 375, 27 L.R.A. 802 [ (1895) ]. It is immaterial whether the individual loss is great or small: the court will not stop to inquire into that.\") Notwithstanding the force of this argument in a state court proceeding, it has been foreclosed here.\n\n\n16\nThe Supreme Court has emphasized that irrespective of whether the complaint is against municipal or federal agencies, federal standing propositions apply in federal court, including, inter alia, whether the party has \"a personal stake in the outcome of the controversies,\" Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962), and whether the dispute touches upon \"the legal relations of parties having adverse legal interests.\" Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240-41, 57 S.Ct. 461, 464, 81 L.Ed. 617 (1937); see Flast v. Cohen, 392 U.S. 83, 101, 88 S.Ct. 1942, 1953, 20 L.Ed.2d 947 (1968). \"In a federal trial court ... standing to sue is determined by federal law.\" Frissell v. Rizzo, 597 F.2d 840, 850 (3d Cir.), cert. denied, 444 U.S. 841, 100 S.Ct. 82, 62 L.Ed.2d 54 (1979) (citing Baker, 369 U.S. at 204, 82 S.Ct. at 703).\n\n\n17\nAccordingly, the standing issue in this case will be decided by federal law and not that of Pennsylvania. We now address the main contention presented by the appellants in this appeal. Because the complaint was dismissed on the pleadings, we must, and do, accept as true all material allegations of the complaint, and construe them in favor of the complaining party. Warth, 422 U.S. at 501, 95 S.Ct. at 2206; Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).\n\nIII.\n\n18\nThere are two inquiries to federal court standing. The first is the \"pure\" article III requirement. This requirement is related to the constitutional limitation of judicial power to \"cases and controversies.\" It reflects the traditional notion that \"article III judicial power exists only to redress or otherwise to protect against injury to the complaining party.\" Warth, 422 U.S. at 499, 95 S.Ct. at 2205. The legislative and coercive powers of an article III court are therefore properly involved only in aid of that remedial function, not as an independent justification for the exercise of jurisdiction.\n\n\n19\nThe second requirement is the prudential limitation on the exercise of federal jurisdiction.\n\n\n20\nBeyond the constitutional requirements, the federal judiciary has also adhered to a set of prudential principles that bear on the question of standing. Thus, the Court has held that \"the plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.\"\n\n\n21\nValley Forge, 454 U.S. at 474, 102 S.Ct. at 760 (quoting Warth, 422 U.S. at 499, 95 S.Ct. at 2205). It was on this basis that the plaintiffs in this case were denied standing. The district court held that prudential considerations militated against permitting these plaintiffs to assert the rights of non-minority contractors and workers. The court stated that the prudential requirements had not been satisfied because appellants were asserting the rights of \"non-minority business owners and workers with thom they had no special relationship.\" App. at 126.\n\n\n22\nWe agree with the district court that the appellants have established article III standing. As municipal taxpayers suing a municipality and not as federal taxpayers suing a federal agency, they have alleged that someone could \"show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant,\" Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 99, 99 S.Ct. 1601, 1608, 60 L.Ed.2d 66 (1979), and that injury \"fairly can be traced to the challenged action\" and \"is likely to be redressed by a favorable decision.\" Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 38, 41, 96 S.Ct. 1917, 1924, 1926, 48 L.Ed.2d 450 (1976); see also Valley Forge, 454 U.S. at 472, 102 S.Ct. at 758. Contemplating the appellants' allegation, we think that an article III injury to contractors and bidders at large has been made out.\n\n\n23\nBut the critical inquiry here is whether these particular appellants satisfy the prudential requirements as well. The question is whether these appellants have sustained a proximate, individual, and addressable injury, based solely upon their status as municipal residents and taxpayers.\n\n\n24\nAgain, we agree with the district court. Abundant Supreme Court case law supports the district court's determination that the prudential requirements for standing were not satisfied. See Tileston v. Ullman, 318 U.S. 44, 46, 63 S.Ct. 493, 494, 87 L.Ed. 603 (1943) (denying standing to a plaintiff raising a claim under the fourteenth amendment, because his rights were not directly affected by the state statute in question); United States v. Raines, 362 U.S. 17, 22, 80 S.Ct. 519, 523, 4 L.Ed.2d 524 (1960) (a litigant must generally assert his own constitutional rights and immunities).\n\n\n25\nBut the situation here does not dictate an extended discussion of this proposition, because Chief Judge (then Judge) Gibbons has already thoroughly ploughed this field in his comprehensive opinion treating another claim of a Philadelphia taxpayer against the city's mayor. In Frissell v. Rizzo, 597 F.2d 840 (3d Cir.), cert. denied, 444 U.S. 841, 100 S.Ct. 82, 62 L.Ed.2d 54 (1979), a citizen and taxpayer brought a first amendment claim to enjoin the mayor from denying customary public advertising to the Philadelphia Bulletin, a daily newspaper, as a reprisal for publication of unfavorable news articles. (Whatever may be the decisions of other courts on first amendment issues, see Basiardanes v. City of Galveston, 682 F.2d 1203, 1211 n. 4 (5th Cir.1983) we believe that Frissell is better reasoned.) We are satisfied that the reasoning and the result set forth in Frissell adequately control the prudential standing issue presented here. In Frissell, the court noted that the Philadelphia Bulletin, the injured party, had not joined as a party plaintiff or brought suit to enjoin the city. The plaintiff was solely a taxpayer resting his claim for relief on the legal rights and interests of a third party. Similarly, in this case no business enterprise or construction worker, those most likely to have suffered injury under the challenged bid specifications, has joined the complaint or brought suit to enjoin the city. The appellants here are solely taxpayers, resting their claim on the legal rights and interests of third parties, to-wit, those business entities and workers not qualifying under the MBE requirements.IV.\n\n\n26\nAppellants argue that the court erred in denying them standing because they clearly qualify under the facts and holdings of Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968) and Bowen v. Kendrick, --- U.S. ----, 108 S.Ct. 2562, 101 L.Ed.2d 520 (1988). We conclude that the facts here do not bring this case within the limited precedential authority of those cases.\n\n\n27\nFlast and Bowen are extremely limited holdings. They hold that federal taxpayers have standing to raise establishment clause claims against exercises of congressional power under the taxing and spending power of article I, section 8 of the constitution. Flast was an establishment clause attack on the Elementary and Secondary Education Act of 1965, which allowed federal funds to be used to finance instruction, and purchase textbooks for reading, arithmetic, and other subjects in religious schools. Flast, 392 U.S. at 85-86, 88 S.Ct. at 1945. Bowen, also relying on the establishment clause, attacked the Adolescent Family Life Act which authorized grants to public and non-public private organizations and agencies and provided, inter alia, that a grantee must furnish types of counsel in, and education relating to, family life and problems associated with adolescent premarital sexual relations, a complex problem that requires the involvement of religious and charitable organizations. Bowen, --- U.S. at ----, 108 S.Ct. at 2566-67.\n\n\n28\nBecause the establishment and free exercise clauses and article I, section 8 taxing and spending power are not involved here, Flast and Bowen do not serve as precedential authority. Without rehearsing the myriad standing cases since Flast, we note that the leading commentators in federal courts and jurisdiction have succinctly stated: \"Fate has not been kind to the Flast decision. In the field of taxpayer standing, it has been limited to very narrow confines.\" 13 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure Sec. 3531.1 (1984); see also Bowen, --- U.S. at ----, 108 S.Ct. at 2579; Valley Forge, 454 U.S. at 479, 102 S.Ct. at 762.\n\nV.\n\n29\nAppellants have not satisfied the prudential requirements of standing dictated by Valley Forge, Warth v. Seldin, and Frissell v. Rizzo. Accordingly, we are satisfied with the district court's dismissal of the complaint for the reasons stated. Those reasons have been summarized in Warth v. Seldin and deserve repetition here:\n\n\n30\nApart from the minimum constitutional mandate, this Court has recognized other limits on the class of persons who may invoke the courts' decisional and remedial powers. First, the Court has held that when the asserted harm is a \"generalized grievance\" shared in substantially equal measure by all or a large class of citizens, that harm alone normally does not warrant exercise of jurisdiction. Second, even when the plaintiff has alleged injury sufficient to meet the \"case or controversy\" requirement, this Court has held that the plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interest of third parties. Without such limitations--closely related to Art. III concerns but essentially matters of judicial self-governance--the courts would be called upon to decide abstract questions of wide public significance even though other governmental institutions may be more competent to address the questions and even though judicial intervention may be unnecessary to protect individual rights.\n\n\n31\n422 U.S. at 499-500, 95 S.Ct. at 2205-06 (footnotes and citations omitted). We believe that the appellants here assert only a \"generalized grievance\" that may be shared in substantially equal measure by all or a large class of citizens.\n\nVI.\n\n32\nThe judgment of the district court will be affirmed.\n\n"} -{"text": "16-2006, 16-2326\nCelltrace Communications Limited v. Acacia Research Corporation\n\n UNITED STATES COURT OF APPEALS\n FOR THE SECOND CIRCUIT\n\n SUMMARY ORDER\n Rulings by summary order do not have precedential effect. Citation to a summary\norder filed on or after January 1, 2007, is permitted and is governed by Federal Rule of\nAppellate Procedure 32.1 and this Court\u2019s Local Rule 32.1.1. When citing a summary order in\na document filed with this Court, a party must cite either the Federal Appendix or an\nelectronic database (with the notation \u201csummary order\u201d). A party citing a summary order\nmust serve a copy of it on any party not represented by counsel.\n\n At a stated term of the United States Court of Appeals for the Second Circuit, held at\nthe Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,\non the 25th day of April, two thousand seventeen.\n\nPRESENT: AMALYA L. KEARSE,\n GUIDO CALABRESI,\n JOS\u00c9 A. CABRANES,\n Circuit Judges.\n\n\nCELLTRACE COMMUNICATIONS LIMITED, WAYNE\nMICHAELS,\n\n Plaintiffs-Appellants, 16-2006, 16-2326\n\n v.\n\nACACIA RESEARCH CORPORATION, ACACIA\nRESEARCH GROUP, LLC,\n\n Defendants-Appellees.*\n\n\nFOR PLAINTIFFS-APPELLANTS: REAGAN W. SIMPSON (Collin J. Cox,\n Christian J. Ward, April L. Farris, on the\n brief), Yetter Coleman LLP, Houston, TX.\n\n\n\n\n *\n The Clerk is directed to alter the caption of this case to read as indicated above.\n\n 1\n\fFOR DEFENDANTS-APPELLEES: MARC J. SCHNEIDER (Travis P. Brennan,\n Justin Klaeb, on the brief), Stradling Yocca\n Carlson & Rauth, P.C., Newport Beach,\n CA.\n\n Appeal from an order of the United States District Court for the Southern District of New\nYork (Alison J. Nathan, Judge).\n\n UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,\nADJUDGED, AND DECREED that the order of the District Court be and hereby is\nAFFIRMED IN PART, VACATED IN PART, and the cause is REMANDED for the entry of\nan order STAYING the proceedings.\n\n We expect appeals such as this one to grow increasingly rare and soon become extinct. The\nDistrict Court granted defendants\u2019 motion to compel arbitration and dismissed, rather than stayed,\nthe case. On appeal, both parties agree that the District Court erred in dismissing, rather than\nstaying, the action. \u201c[W]hen all claims are referred to arbitration and a stay requested,\u201d as happened\nhere, \u201cthe Federal Arbitration Act, 9 U.S.C. \u00a7 1 et seq. (\u201cFAA\u201d), requires a stay of proceedings.\u201d Katz v.\nCellco P\u2019ship, 794 F.3d 341, 343 (2d Cir.), cert. denied, 136 S. Ct. 596 (2015) (emphasis added). Had the\nDistrict Court entered a stay, moreover, this appeal would not exist. See id. at 346 (\u201c[T]he FAA\nexplicitly denies the right to an immediate appeal from an interlocutory order that compels\narbitration or stays proceedings.\u201d (citing 9 U.S.C. \u00a7 16(b)(1)\u2013(2)). While we are not thereby deprived\nof jurisdiction over the merits of this appeal, those merits require little discussion. Substantially for\nthe reasons given by the District Court in its memorandum decision, we conclude that the parties\nagreed that, prior to litigating in court, they had \u201cto try in good faith to settle [any] dispute\u201d through\na particular mechanism\u2014\u201cformal arbitration under the Rules of Arbitration of the International\nChamber of Commerce\u201d\u2014and that this condition has not been met. Thus we need not disturb the\nDistrict Court\u2019s ruling other than to vacate its order of dismissal and remand for entry of a stay.\n\n Accordingly, the judgment of the District Court is AFFIRMED IN PART, VACATED\nIN PART, insofar as it dismissed this action, and the cause is REMANDED for the entry of an\norder STAYING the proceedings.\n\n FOR THE COURT:\n Catherine O\u2019Hagan Wolfe, Clerk\n\n\n\n\n 2\n\f"} -{"text": "UNPUBLISHED\n\nUNITED STATES COURT OF APPEALS\n\nFOR THE FOURTH CIRCUIT\n\nBRETT C. KIMBERLIN,\nPetitioner-Appellant,\n\nv.\n\nSTEPHEN DEWALT, Warden of FCI-\nPetersburg, No. 00-6001\nRespondent-Appellee,\n\nand\n\nUNITED STATES PAROLE COMMISSION,\nRespondent.\n\nAppeal from the United States District Court\nfor the District of Maryland, at Greenbelt.\nAlexander Williams, Jr., District Judge.\n(CA-97-3829-AW)\n\nSubmitted: May 16, 2000\n\nDecided: May 26, 2000\n\nBefore WILLIAMS and TRAXLER, Circuit Judges,\nand HAMILTON, Senior Circuit Judge.\n\n_________________________________________________________________\n\nAffirmed by unpublished per curiam opinion.\n\n_________________________________________________________________\n\nCOUNSEL\n\nBrett C. Kimberlin, Appellant Pro Se. Lynne Ann Battaglia, United\nStates Attorney, Tamera Lynn Fine, OFFICE OF THE UNITED\nSTATES ATTORNEY, Baltimore, Maryland, for Appellee.\n\fUnpublished opinions are not binding precedent in this circuit. See\nLocal Rule 36(c).\n\n_________________________________________________________________\n\nOPINION\n\nPER CURIAM:\n\nBrett C. Kimberlin appeals from the district court's order denying\nhis motion filed under Fed. R. Civ. P. 60(b), in which he sought to\nvacate the court's order denying his petition filed under 28 U.S.C.\n\u00a7 2241 (1994). We have reviewed the record and the district court's\nopinion and find no abuse of discretion. See Heyman v. M.L. Mktg.\nCo., 116 F.3d 91, 94 (4th Cir. 1997) (stating standard of review).\n\nBecause Kimberlin's motion alleged newly discovered evidence, it\nis properly construed as a motion under Rule 60(b)(2). As such, it\nmust be filed not more than one year after the entry of judgment. See\nFed. R. Civ. P. 60(b). The district court entered its order denying the\n\u00a7 2241 petition on May 26, 1998.* Kimberlin did not file his Rule\n60(b) motion until June 24, 1999, more than one year later. We there-\nfore find that the motion was untimely filed.\n\nAccordingly, we affirm the district court's denial of Kimberlin's\nRule 60(b) motion on that ground. See Shafer v. Preston Mem'l Hosp.\nCorp., 107 F.3d 274, 275 n.1 (4th Cir. 1997) (\"We have consistently\nrecognized that we may affirm a district court's decision on different\ngrounds than those employed by the district court.\") (citations omit-\nted). We dispense with oral argument because the facts and legal con-\ntentions are adequately presented in the materials before the court and\nargument would not aid the decisional process.\n\nAFFIRMED\n_________________________________________________________________\n*The district court entered an amended order on June 30, 1998.\nBecause the amendment merely substituted the proper party respondent,\nwe calculated the one-year period from the date of the original judgment.\nSee Federal Trade Comm'n v. Minneapolis-Honeywell Regulator Co.,\n344 U.S. 206, 211-12 (1952); Kokomo Tube Co. v. Dayton Equip. Servs.\nCo., 123 F.3d 616, 623-24 (7th Cir. 1997) (finding that judgment substi-\ntuting one party for party in favor of whom district court granted judg-\nment was clerical error because court's intent was clear from order).\n\n 2\n\f"} -{"text": "\n1 So.3d 1200 (2009)\nAlejandro ROSADO, Appellant,\nv.\nDAIMLERCHRYSLER FINANCIAL SERVICES TRUST, a/k/a DCFS Trust; LaMondue Law Firm, PCL; Carl C. LaMondue; and Terrell A. Parham, Appellees.\nNo. 2D07-3690.\nDistrict Court of Appeal of Florida, Second District.\nFebruary 6, 2009.\n*1201 Matthew E. Kaplan of Kaplan and Freedman, P.A., Miami; and Bard D. Rockenbach of Burlington & Rockenbach, P.A., West Palm Beach, for Appellant.\nMichael B. Buckley, Lauren S. Curtis, and Rebecca O'Dell Townsend of Buckley & Fudge, P.A., St. Petersburg, for Appellee DCFS Trust.\nNo appearance for other Appellees.\nPER CURIAM.\nAlejandro Rosado appeals a partial final summary judgment dismissing his claim against DaimlerChrysler Financial Services Trust (DaimlerChrysler). Mr. Rosado sued DaimlerChrysler for injuries he sustained in an automobile accident because DaimlerChrysler was the owner and lessor of the car driven by the person allegedly at fault in this accident. Mr. Rosado claimed that DaimlerChrysler was liable because it had failed to ensure that the vehicle was covered by insurance to the limits of liability described in section *1202 324.021(9)(b)(1), Florida Statutes (2002), at the time of the accident. The trial court entered summary judgment in favor of DaimlerChrysler on the theory that Florida law had been preempted by 49 U.S.C. \u00a7 30106, commonly referred to as the Graves Amendment, which shields long-term lessors and rental car companies from vicarious liability imposed under state law under some circumstances.\nThis appears to be the first case in which a court has addressed the application of the Graves Amendment to a long-term automobile lease under section 324.021(9)(b)(1). The Amendment's application, however, has been addressed at length in reference to rental cars under section 324.021(9)(b)(2). See Garcia v. Vanguard Car Rental USA, Inc., 540 F.3d 1242 (11th Cir.2008); Dupuis v. Vanguard Car Rental USA, Inc., 510 F.Supp.2d 980 (M.D.Fla.2007); Karling v. Budget Rent A Car Sys., Inc., 33 Fla. L. Weekly D2777, 2 So.3d 354, 2008 WL 5100530 (Fla. 5th DCA Dec. 5, 2008); Tocha v. Richardson, 995 So.2d 1100 (Fla. 4th DCA 2008); Vargas v. Enter. Leasing Co., 993 So.2d 614 (Fla. 4th DCA 2008); Kumarsingh v. PV Holding Corp., 983 So.2d 599 (Fla. 3d DCA 2008). Much of that discussion is relevant to this case, and it convinces us that the trial court properly entered summary judgment in favor of DaimlerChrysler.\n\nI. THE FACTS\nOn June 29, 2003, Terrell Parham drove a car across the median on U.S. Highway 27 near Haines City and collided with a car driven by Alejandro Rosado. Mr. Rosado sustained serious injuries.\nAt the time of the accident, Mr. Parham was a Polk County resident who had recently graduated from Virginia Polytechnic Institute and State University (Virginia Tech), where he played football. The car that Mr. Parham was operating was a Mercedes Benz C230 that was owned by DaimlerChrysler Financial Services Trust. It had been leased to the LaMondue Law Firm in Virginia on January 15, 2003, for a period of four years. The connection between the LaMondue Law Firm and Mr. Parham is not disclosed in our record except to the extent that Mr. Parham is not an employee of the law firm. The law firm had apparently given the car to Mr. Parham to use, and there is no claim that he was not a permissive user and lawful bailee of this car at the time of the accident. The testimony in the record indicates that the car had been in Florida for only a short time. The car was registered in Virginia, and we assume for purposes of this opinion that it was subject to the requirements, if any, of Virginia law concerning compulsory liability insurance and financial responsibility.\nThe lease between DaimlerChrysler and the LaMondue Law Firm required the law firm, as lessee, to insure the car for not less than $100,000 per person and $300,000 per accident in bodily injury coverage and $50,000 in property coverage. At the end of the lease document, the lessor verified that it had determined that insurance coverage was provided by United Services Automobile Association.[1] The record indicates that immediately before this accident, insurance in this amount was actually provided by Progressive Insurance Company, but that insurance policy lapsed for nonpayment the day before the accident.\nMr. Rosado filed his lawsuit in Polk County against the LaMondue Law Firm, Mr. LaMondue, Mr. Parham, and DaimlerChrysler. The claim against DaimlerChrysler *1203 alleged that it was vicariously liable for Mr. Parham's negligent operation of the car under Florida's dangerous instrumentality doctrine because it had failed to comply with the insurance requirements of section 324.021(9)(b)(1).\nDaimlerChrysler moved for summary judgment in August 2006. Although it argued in part that its liability should be based on Virginia tort law, it also argued that Florida law, if it applied, was preempted by the Graves Amendment, which we describe in greater detail below.[2] After Judge William Terrell Hodges issued a decision interpreting the Graves Amendment to preempt section 341.021(9)(b)(2) as applied to a Florida short-term rental agreement in Garcia v. Vanguard Car Rental USA, Inc., 510 F.Supp.2d 821 (M.D.Fla.2007), aff'd, 540 F.3d 1242 (11th Cir.2008), the trial court in this case granted summary judgment in favor of DaimlerChrysler, relying extensively on the Garcia decision. Mr. Rosado appealed the summary judgment to this court. Recently, while this appeal was pending, the Eleventh Circuit affirmed Judge Hodges' decision in Garcia. Garcia, 540 F.3d at 1244-45.\n\nII. THE GRAVES AMENDMENT\nThe Graves Amendment was enacted as a federal statute effective August 10, 2005. See Garcia, 510 F.Supp.2d at 829. The Graves Amendment applies to any \"action commenced on or after [its] date of enactment... without regard to whether the harm that is the subject of the action, or the conduct that caused the harm, occurred before such date....\" 49 U.S.C. \u00a7 30106(c). It provides, in pertinent part:\nSection 30106. Rented or leased motor vehicle safety and responsibility.\n(a) In general.\u0097An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if\u0097\n(1) the owner (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles; and\n(2) there is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner).\n(b) Financial responsibility laws.\u0097 Nothing in this section supersedes the law of any State or political subdivision thereof\u0097\n(1) imposing financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering and operating a motor vehicle; or\n(2) imposing liability on business entities engaged in the trade or business of renting or leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under State law.\n(c) Applicability and effective date.\u0097 Notwithstanding any other provision of law, this section shall apply with respect to any action commenced on or after the date of enactment of this section without regard to whether the harm that is the subject of the action, or the conduct that caused the harm, occurred before such date of enactment.\n*1204 Mr. Rosado challenges the application of this preemptive statute on three fronts. First, he argues that the Graves Amendment is unconstitutional as a violation of the Commerce Clause. The Eleventh Circuit rejected that argument in Garcia. 540 F.3d at 1253. This issue has been raised and rejected in many other cases. See, e.g., Flagler v. Budget Rent A Car Sys., Inc., 538 F.Supp.2d 557, 559 (E.D.N.Y.2008) (holding the Graves Amendment to be constitutional under the second and third Lopez[3] categories); Berkan v. Penske Truck Leasing Canada, Inc., 535 F.Supp.2d 341, 345 (W.D.N.Y. 2008) (same); Jasman v. DTG Operations, Inc., 533 F.Supp.2d 753, 757 (W.D.Mich. 2008) (holding the Graves Amendment to be constitutional under all three Lopez categories); Garcia, 510 F.Supp.2d at 835 (same); Dupuis v. Vanguard Car Rental USA, Inc., 510 F.Supp.2d 980, 985 (M.D.Fla.2007) . (holding the Graves Amendment to be constitutional under the second Lopez category). We likewise reject this argument, relying upon the explanations in Garcia and the other existing precedents.\nSecond, Mr. Rosado maintains that the Graves Amendment does not apply to this case because both the accident and the filing of this lawsuit occurred before the enactment of the Graves Amendment, even though DaimlerChrysler was joined as a defendant after the enactment.[4] We decline to consider this issue because it was not argued in the trial court and is not the type of error that can be raised for the first time on appeal as a fundamental error. See N.L.E. v. Dep't of Children & Family Servs., 970 So.2d 486 (Fla. 2d DCA 2007) (holding that, absent fundamental error, petitioner could not present for first time on appeal issues not raised before the trial court).\nFinally, Mr. Rosado argues that the Graves Amendment does not limit DaimlerChrysler's liability in this context because this federal statute contains two exceptions to the reach of its preemption. This is the issue that cannot be resolved without additional analysis.\n\nIII. THE GRAVES AMENDMENT PREEMPTS SUBSECTION 324.021(9)(b)(1)\nSubsection 324.021(9)(b) is a definitional provision within chapter 324 of the Florida Statutes, which is entitled \"Financial Responsibility.\" It states:\n(9) OWNER; OWNER/LESSOR.\u0097\n....\n(b) Owner/lessor.\u0097Notwithstanding any other provision of the Florida Statutes or existing case law:\n1. The lessor, under an agreement to lease a motor vehicle for 1 year or longer which requires the lessee to obtain insurance acceptable to the lessor which contains limits not less than $100,000/$300,000 bodily injury liability and $50,000 property damage liability or not less than $500,000 combined property damage liability and bodily injury liability, shall not be deemed the owner of said motor vehicle for the purpose of determining financial responsibility for the operation of said motor vehicle or for the acts of the operator in connection *1205 therewith; further, this subparagraph shall be applicable so long as the insurance meeting these requirements is in effect. The insurance meeting such requirements may be obtained by the lessor or lessee, provided, if such insurance is obtained by the lessor, the combined coverage for bodily injury liability and property damage liability shall contain limits of not less than $1 million and may be provided by a lessor's blanket policy.\n2. The lessor, under an agreement to rent or lease a motor vehicle for a period of less than 1 year, shall be deemed the owner of the motor vehicle for the purpose of determining liability for the operation of the vehicle or the acts of the operator in connection therewith only up to $100,000 per person and up to $300,000 per incident for bodily injury and up to $50,000 for property damage. If the lessee or the operator of the motor vehicle is uninsured or has any insurance with limits less than $500,000 combined property damage and bodily injury liability, the lessor shall be liable for up to an additional $500,000 in economic damages only arising out of the use of the motor vehicle. The additional specified liability of the lessor for economic damages shall be reduced by amounts actually recovered from the lessee, from the operator, and from any insurance or self-insurance covering the lessee or operator. Nothing in this subparagraph shall be construed to affect the liability of the lessor for its own negligence.\n\u00a7 324.021(9)(b).\nSubsection (b)(2) applies to rental cars and essentially makes the rental car company, as owner, liable up to $800,000, depending upon the insurance coverage on the leased vehicle and the nature of the damages. In excellent discussions, Judge Hodges, in Garcia, 510 F.Supp.2d at 829-33, and Judge Gross, in Vargas, 993 So.2d at 618-21, have concluded that this definitional section does not \"impos[e] financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering and operating a motor vehicle\" and does not \"impose liability on business entities engaged in the trade or business of renting or leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under State law,\" as provided within the savings clause of 49 U.S.C. \u00a7 30106(b). Accordingly, both courts concluded that the exceptions to the Graves Amendment did not apply.\nSubsection (b)(1) is similar in that it provides that the lease car company is not deemed the owner for financial responsibility or for vicarious liability so long as either the lessee has the designated policy of liability insurance in place or the lessor has a $1,000,000 blanket policy. Like subsection (b)(2), this subsection does not \"impos[e] financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering and operating a motor vehicle\" and does not \"impose liability on business entities engaged in the trade or business of renting or leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under State law.\" It merely gives the leasing company the option to have insurance in place to avoid liability in Florida under the dangerous instrumentality doctrine. Because the statute does not compel a lease car company to have certain \"insurance standards,\" this statute does not impose liability for a \"failure\" to meet insurance standards that are only optional.\nWe recognize, as the dissent argues, that the uniqueness of Florida's dangerous instrumentality doctrine makes the application *1206 of the Graves Amendment more questionable in Florida. From a practical perspective, the dissent may accurately explain the purpose and function of section 324.021(9)(b)(1), but we conclude that the statute's plain language requires the ruling that we reach today. However, we certify to the supreme court the following question of great public importance:\nDOES THE GRAVES AMENDMENT, 49 U.S.C. \u00a7 30106, PREEMPT SECTION 324.021(9)(b)(1), FLORIDA STATUTES (2002)?\nAffirmed.\nVILLANTI and LAROSE, JJ., Concur.\nALTENBERND, J., Concurs in part and dissents in part with opinion.\nALTENBERND, Judge, Concurring in part and dissenting in part.\nI agree with the majority that the Graves Amendment, 49 U.S.C. \u00a7 30106, is not unconstitutional and that section 324.021(9)(b)(1) is not excepted from this federal preemption statute by virtue of the exception stated in subsection (b)(1) of the Graves Amendment. On the other hand, I conclude that section 324.021(9)(b)(1), when examined in conjunction with Florida's unique dangerous instrumentality doctrine, is effectively a statute imposing liability for failure to meet liability insurance requirements. It appears to me to be the type of statute that Congress intended to allow states to enact, as provided within subsection (b)(2) of the Graves Amendment. It fulfills both the purposes and functions of the type of statute that Congress would allow a state to enact under the common law of the other forty-nine states.\nThere does not appear to be any serious dispute that a state could enact a statute that provided:\nLease car companies doing business in this state shall ensure that either the lessee or the lease car company provides a policy of liability insurance of not less than $500,000 combined property damage liability and bodily injury liability for each lease car operated in this state. Failure to provide this insurance shall render the lease car company vicariously liable for all damages caused by the negligence of the operator of the lease car.\nSuch a statute would squarely fit within the exception of subsection (b)(2) of the Graves Amendment. Under the common law of apparently every state except Florida, such a statute would be necessary to make the owner vicariously liable for the negligent acts of the operator because the common law did not impose such liability. See, e.g., Morris v. Snappy Car Rental, Inc., 84 N.Y.2d 21, 614 N.Y.S.2d 362, 637 N.E.2d 253, 254-55 (1994) (explaining that New York's legislature enacted Vehicle and Traffic Laws section 388 to change the common law rule and to make a vehicle's owner vicariously liable for the negligence of a person operating the car with the permission, express or implied, of the owner); see also 8 Am.Jur.2d Automobiles and Highway Traffic \u00a7 403 (2007).\nIf one examines the history of the dangerous instrumentality doctrine and the efforts of the rental and car leasing companies to obtain a special exemption from that doctrine, it becomes more clear that section 324.021(9)(b)(1) is the equivalent of the above-quoted hypothetical statute.\n\nI. THE DEVELOPMENT OF THE DANGEROUS INSTRUMENTALITY DOCTRINE IN FLORIDA PRIOR TO 1989\nJudge Hodges, in his opinion in Garcia, provided an excellent, brief description of Florida's development of the dangerous *1207 instrumentality doctrine. I repeat that description here.\nFlorida's vicarious liability doctrine as it pertains to lessors of motor vehicles is largely a creation of common law, and is otherwise known as the \"dangerous instrumentality doctrine.\" The dangerous instrumentality concept was first applied to motor vehicles by the Florida Supreme Court in 1920. Southern Cotton Oil Co. v. Anderson, 80 Fla. 441, 86 So. 629 (1920). The doctrine \"imposes strict vicarious liability upon the owner of a motor vehicle who voluntarily entrusts that motor vehicle to an individual whose negligent operation causes damage to another.\" Estate of Villanueva ex rel. Villanueva v. Youngblood, 927 So.2d 955 (Fla.Dist.Ct.App.2006); see also Southern Cotton, 86 So. at 637. The dangerous instrumentality doctrine was judicially adopted based on public policy concerns:\nThe dangerous instrumentality doctrine seeks to provide greater financial responsibility to pay for the carnage on our roads. It is premised upon the theory that the one who originates the danger by entrusting the automobile to another is in the best position to make certain that there will be adequate resources with which to pay the damages caused by its negligent operation. If Florida's traffic problems were sufficient to prompt its adoption in 1920, there is all the more reason for its application to today's high-speed travel upon crowded highways. The dangerous instrumentality doctrine is unique to Florida and has been applied with very few exceptions.\n\nAurbach v. Gallina, 753 So.2d 60, 62 (Fla.2000) (quoting Kraemer v. Gen. Motors Acceptance Corp., 572 So.2d 1363, 1365 (Fla.1990)).\nThe Florida Supreme Court extended the dangerous instrumentality doctrine to lessors, thereby making them vicariously liable for the lessee's negligent operation of the motor vehicle, in 1959. Susco Car Rental System v. Leonard, 112 So.2d 832 (Fla.1959).\nGarcia, 510 F.Supp.2d at 827. There is, incidentally, no question in my mind that, without the legislative enactment in section 324.021(9)(b), the Florida law related to the dangerous instrumentality doctrine would be preempted by the Graves Amendment.\n\nII. THE DEVELOPMENT OF THE FINANCIAL RESPONSIBILITY STATUTES IN FLORIDA PRIOR TO 1989\nJudge Gross, in Vargas, has done an excellent job describing the history and the nature of Florida's Financial Responsibility Act, chapter 324, Florida Statutes. Vargas, 993 So.2d at 618-21. I am inclined to believe, however, that financial responsibility laws are not the true focus of the issue presented by this case. Unlike many states where financial responsibility laws were enacted in conjunction with laws establishing some vicarious liability of motor vehicle owners, that vicarious liability had existed in Florida as a result of the dangerous instrumentality doctrine for more than a generation when the Florida Legislature first addressed the idea of financial responsibility. These laws do not create any compulsory insurance requirements for owners of typical cars whose drivers have been responsible. The most significant sanction imposed under these statutes is not the liability of the owner (which already existed in Florida under the dangerous instrumentality doctrine), but rather the loss of a driver's license or registration for someone who has not been financially responsible in the past. See \u00a7 324.051, Fla. Stat. (2008).\n*1208 The significance of Florida's financial responsibility statutes was altered and reduced with the creation of no-fault automobile insurance. The definition of motor vehicle was amended in 1977 to provide that an automobile insured with no-fault insurance was not included within the definition of motor vehicle for purposes of financial responsibility in many instances. See Ch. 77-468, \u00a7 6, at 2061, Laws of Fla.\nWhile financial responsibility statutes in Florida may have been a regulatory annoyance for rental and lease car companies, the real complaint of these companies was with Florida's dangerous instrumentality doctrine because it could make these large corporations subject to unlimited judgments for the damage and injury caused by their cars in Florida.\n\nIII. THE LEGISLATIVE RESPONSE IN 1986 IN FLORIDA ADDRESSING THE LIABILITY OF LONG-TERM LESSORS\nIn 1986, the Florida Legislature created section 324.021(9)(b) to exempt lease car companies from the dangerous instrumentality doctrine so long as the lessee maintained certain levels of liability insurance. Ch. 86-229, \u00a7 3, Laws of Fla. This bill did not deal with insurance or financial responsibility in general; it amended statutes affecting lessors of motor vehicles. This version of the statute provided no relief to rental car companies as opposed to long-term lessors. It also did not provide the option of a blanket liability policy. That language was added later by chapter 88-370, Laws of Florida, as a response to cases in which the statute was read literally to require a policy provided by the lessee in order for the lessor to escape the dangerous instrumentality doctrine. See Ady v. Am. Honda Fin. Corp., 675 So.2d 577 (Fla.1996).\nThis statute was odd in 1986, and it remains odd today in at least two respects. First, it purports to be a definition of \"owner/lessor\" for a statutory chapter dealing with financial responsibility, when in reality it is far more than a definition. Second, although one might expect that it was only a definition for purposes of Florida's statutory financial responsibility requirements because it is in chapter 324 and not in chapter 768, it actually establishes a major limitation on a common law negligence cause of action for the benefit of a narrow class of defendants\u0097those businesses who lease motor vehicles.[5]\nAfter the enactment of this statute, a business that leased automobiles in Florida and complied with these statutory provisions was still the owner of the vehicles for many purposes, but it was not \"deemed\" the owner for either financial responsibility or for liability under the dangerous instrumentality doctrine. Examined from a practical or functional perspective, the legal owner of the leased or rented motor vehicle had no monetary exposure for risks associated with the use or operation of the motor vehicle so long as the prescribed insurance was in place. The \"penalty\" for failure to maintain the insurance was a return to unlimited liability under the dangerous instrumentality doctrine. See Ady, 675 So.2d at 581 (holding lessor was not entitled to the statutory exemption from the dangerous instrumentality doctrine where lessee failed to satisfy the requirement of section 324.021(9)(b)).\nI admit that this statute in 1986 and today does not compel leasing companies to have minimum limits of insurance coverage. *1209 I am not convinced it is necessary for the statute to compel coverage to fit within the second exception to the Graves Amendment. Subsection (b)(2) exempts state laws \"imposing liability on business entities engaged in the trade or business of... leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under State law.\" In Florida, the liability was imposed by common law and the statute provides an insurance option to avoid that liability. If a leasing company fails to meet the liability insurance requirements in section 324.021(9)(b)(1), then Florida common law as explained in Ady and earlier cases will impose liability on that business. In combination, the common law and section 324.021(9)(b)(1) fits squarely within exception (b)(2) of the Graves Amendment.\nI believe that the plain language of exception (b)(2) allows Florida to continue to impose liability on lease car companies that fail to provide the insurance designated in section 324.02(9)(b)(1). If I were to engage in statutory interpretation of the Graves Amendment, the case law encourages a narrow reading of federal preemptive statutes in fields traditionally occupied by the states. See, e.g., Medtronic, Inc. v. Lohr, 518 U.S. 470, 484-86, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996). Courts are encouraged to seek out the purpose of such a statute. Id. at 485-86, 116 S.Ct. 2240. I would assume that Congress intends express exceptions to preemptive statutes to be fully enforced. The clear purpose of the Graves Amendment is to prevent a multitude of different liability rules among the states for lease and rental car companies that operate throughout the country while allowing the states to impose liability on lease car companies that do not provide the insurance designated by state law. It seems to me that section 324.021(9)(b)(1), in conjunction with Florida's dangerous instrumentality doctrine, accomplishes precisely that purpose in Florida, and I see no basis to rule that Congress has preempted this sound state law.\nNOTES\n[1] Although not relevant for purposes of this decision, the lease was initially executed by Tysinger Motor Co., Inc., in Hampton, Virginia, and later assigned to DaimlerChrysler.\n[2] Under Florida's \"significant relationships\" test, we apply the tort law of the state that has the most significant relationships to the cause of action, which in this case is Florida. See Bishop v. Fla. Specialty Paint Co., 389 So.2d 999, 1001 (Fla.1980).\n[3] United States v. Lopez, 514 U.S. 549, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995).\n[4] This issue too has been considered in other cases. See, e.g., Merchants Ins. Group v. Mitsubishi Motor Credit Ass'n, No. CV-03-6017, 2008 WL 203195 (E.D.N.Y. Jan. 23, 2008); see generally Beth Bates Holliday, Annotation, Validity, Construction, and Application of Graves Amendment (49 U.S.C.A. \u00a7 30106) Governing Rented or Leased Motor Vehicle Safety and Responsibility, 29 A.L.R. Fed.2d 223, \u00a7 11 (2008) (collecting cases).\n[5] In this case, for example, the LaMondue Law Firm is not protected by section 324.021(9)(b) and as lessee and bailee of the car presumably remains liable under the dangerous instrumentality doctrine.\n"} -{"text": "\n571 F.Supp. 976 (1983)\nBERKSHIRE CABLEVISION OF RHODE ISLAND, INC.\nv.\nEdward F. BURKE, in his capacity as Administrator of the Division of Public Utilities and Carriers, State of Rhode Island.\nCiv. A. No. 82-0537.\nUnited States District Court, D. Rhode Island.\nSeptember 15, 1983.\n*977 *978 John V. Kenny, Newton, Mass., for plaintiff.\nRichard Crowell, Providence, R.I., for defendant.\n\nOPINION\nPETTINE, Senior District Judge.\nThis case involves important questions concerning the First Amendment rights of cable television operators. At issue is the constitutionality of regulations promulgated by the Rhode Island Division of Public Utilities and Carriers (\"DPUC\"); the contested features require:\n1. the cable television operator to provide, of the total available channels, at least one channel each for access by members of the public, educational institutions and government agencies;\n2. the cable television operator to construct an institutional/industrial network which will permit origination and transmission, for a fee, of programming at institutions and public buildings, including schools and religious institutions within the service territory.\nThe plaintiff, Berkshire Cablevision of Rhode Island, Inc. (\"Berkshire\"), is an applicant for a certificate to provide cable television service to Newport County, Rhode Island. It seeks a declaration that the regulations are unconstitutional as violative of the First and Fourteenth Amendments to the United States Constitution, and a permanent injunction prohibiting any hearings thereunder.\nThe defendant Edward Burke, Administrator of the DPUC, is responsible for the regulation of cable television in Rhode Island and is sued in his official capacity.\nFor the reasons which follow, the injunction and declaration of unconstitutionality are denied.\n\n\n*979 I. FACTS\nIn order to operate a \"community antenna television\" (\"CATV\") company[1] in this state it is necessary that a certificate be obtained from DPUC, which is charged with the responsibility of supervising and enforcing rules it is required to promulgate for the regulation of every such CATV operation. R.I.G.L. \u00a7 39-19-3 and 6 (1977 reenactment).\nOn January 30, 1981, after extensive public hearings between November 1980 and January 1981 concerning the regulation of the cable television industry, \"Rules Governing Community Antenna Television Systems\" were adopted pursuant to the Rhode Island Administrative Procedures Act, R.I. G.L. \u00a7 42-35-1 et seq. These rules are the subject of the present controversy.\nUnder the DPUC regulations the Administrator is authorized to designate CATV Service Areas, \u00a7 2.1, and then issue an \"Invitation for Applicants\" to provide CATV service in these areas. \u00a7 3.2(a). Public hearings are held concerning each application. \u00a7 3.2(b). If more than one application is received, the hearings are to be comparative in nature and the Administrator awards the CATV franchise to the applicant that is \"fit, willing, technically qualified and financially able\" to provide CATV service within the designated service area. Id. \u00a7\u00a7 3.3(d), 4 and 5.\nThe Service Area in question here (hereinafter referred to as \"Newport County\") includes the city of Newport and the towns of Middletown, Portsmouth, Tiverton and Little Compton. On January 29, 1982, Berkshire, together with many others, filed an application to develop and operate a CATV system for Newport County. In July 1982 the Administrator commenced public hearings. On August 16, 1982 Berkshire commenced this suit.\nI denied the plaintiff's motion for a temporary restraining order and permitted the hearings to go forward but enjoined the Administrator from awarding the Newport County CATV certificate pending resolution of this case.\nBerkshire did not make its presentation to the DPUC because it felt it would be prejudiced by being forced to show how it would comply with regulations which it claims are unconstitutional.\nThe plaintiff's first challenge attacks Chapter 14 of the regulations, which requires CATV operators to designate and reserve a minimum of seven public access cable television channels. \u00a7 14.1(a).[2] The provision in question specifically requires cable operators to make time available for educational, governmental and other purposes. Additionally they must dedicate one of their channels for use by members of the general public on a first-come, first-served nondiscriminatory basis and without charge.[3] Berkshire contends that these *980 mandatory access regulations violate the First Amendment by stripping cable operators of editorial control of their channels and deprives them of their property in violation of the Fourteenth Amendment.\n\nA. DISCUSSION\nThis evolving area of the law concerning cable television operation evokes provocative and difficult First Amendment issues. It is a new medium and the differences in its characteristics justify differences in applicable First Amendment standards. Red Lion Broadcasting Co. v. F.C.C., 395 U.S. 367, 386, 89 S.Ct. 1794, 1804, 23 L.Ed.2d 371 (1969). See F.C.C. v. Pacifica Foundation, 438 U.S. 726, 748, 98 S.Ct. 3026, 3039, 57 L.Ed.2d 1073 (1978). Although cable television operators are undoubtedly engaged in some forms of speech protected by the First Amendment, F.C.C. v. Midwest Video, 440 U.S. 689, 707, 99 S.Ct. 1435, 1445, 59 L.Ed.2d 692 (1979); Omega Satellite Products v. City of Indianapolis, 694 F.2d 119, 127 (7th Cir.1982), the extent of this protection has not as yet been clearly defined. In our pursuit of answers we seek guidance by analogizing to other areas such as newspaper and broadcast journalism where First Amendment concerns have already been addressed. I will discuss each of these areas separately.\n\n1. Regulation of Broadcast Television\nGovernment regulation of the broadcast industry began in 1927 with the creation of the Federal Radio Commission Radio Act of 1927, ch. 169, 44 Stat. 1162 (repealed 1934). The Radio Commission was replaced by the Federal Communications Commission (F.C.C.) in 1934. Communications Act of 1934, ch. 652, 48 Stat. 1064 (currently codified at 47 U.S.C. \u00a7\u00a7 151-757 (1976 & 1983 Supp.)). Since 1934 the F.C.C. has regulated the nation's broadcast frequencies through the issuance of renewable licenses. 47 U.S.C. \u00a7 307 (1976 & 1983 Supp.). See Red Lion, supra, 395 U.S. at 379-80, 89 S.Ct. at 1800-01.\nIn the broad overview, to be discussed specifically infra, we see the government controlling broadcast communication because the paramount right of the viewers and listeners of this limited medium mandates that it not be monopolized by a single point of view. We also see a refusal to recognize any inherent right to guaranteed paid editorial access, at least in the absence of the establishment of such right by Congress, and the appropriateness of access regulations to make time available to legally qualified candidates for federal office.\nThe F.C.C.'s power to issue broadcast licenses was first challenged as an abridgement of free speech in National Broadcasting Co. v. United States, 319 U.S. 190, 63 *981 S.Ct. 997, 87 L.Ed. 1344 (1943). In that case, the Supreme Court rejected the claim that the right of free speech includes the right to use radio frequencies without a license. Id. at 227, 63 S.Ct. at 1014. It observed that \"the radio spectrum simply is not large enough to accommodate everybody. There is a fixed natural limitation upon the number of stations that can operate without interfering with one another.\" Id. at 213, 63 S.Ct. at 1008. The Court concluded that the Commission's control over broadcast licenses was necessary to eliminate the \"chaos and confusion\" that had resulted from unregulated competition for use of the nation's airwaves.\nThen in Red Lion, supra, the Supreme Court again relied upon the scarcity of broadcast frequencies when it upheld the constitutionality of F.C.C. regulations known as the fairness doctrine.[4] The broadcasters in Red Lion argued that the fairness doctrine violated the First Amendment because it interfered with their editorial control over the content of their broadcasts:\n[T]he First Amendment protects their desire to use their allotted frequencies continuously to broadcast whatever they choose, and to exclude whomever they choose from ever using that frequency. No man may be prevented from saying or publishing what he thinks, or from refusing in his speech or other utterances to give equal weight to the views of his opponents. This right, they say, applies equally to broadcasters.\n\nId., 395 U.S. at 386, 89 S.Ct. at 1804.\nThe Supreme Court, however, completely rejected the broadcasters' claim that the First Amendment prohibited any interference with their selection of programming. The Court reasoned that\n[b]ecause of the scarcity of radio frequencies, the Government is permitted to put restraints on licensees in favor of others whose views should be expressed on this unique medium. But the people as a whole retain their interest in free speech by radio and their collective right to have the medium function consistently with the ends and purposes of the First Amendment. It is the right of the viewers and listeners, not the right of the broadcasters, which is paramount.\n\nId., 395 U.S. at 390, 89 S.Ct. at 1806.\nThe Red Lion Court emphasized that the public's right to receive information was entitled to greater First Amendment protection than broadcasters' rights to monopolize the airwaves.\nOtherwise, station owners and a few networks would have unfettered power to make time available only to the highest bidders, to communicate only their own views on public issues, people and candidates, and to permit on the air only those with whom they agreed. There is no sanctuary in the First Amendment for unlimited private censorship operating in a medium not open to all.... [T]he First Amendment confers no right on licensees to prevent others from broadcasting on \"their\" frequencies and no right to an unconditional monopoly of a scarce resource which the Government has denied others the right to use.\n\nId. at 390-91, 89 S.Ct. at 1806-07.\nThe government's power to regulate broadcasting, however, is not without limit. For example, in Columbia Broadcasting Systems, Inc. v. Democratic National Committee, *982 412 U.S. 94, 93 S.Ct. 2080, 36 L.Ed.2d 772 (1973), the Supreme Court sustained the F.C.C.'s ruling that the First Amendment does not require broadcasters to accept paid editorial advertisements. And in CBS, Inc. v. F.C.C., 453 U.S. 367, 101 S.Ct. 2813, 69 L.Ed.2d 706 (1981), it upheld the requirement that broadcast stations make time available to legally qualified candidates for federal elective office.\nIn Columbia Broadcasting Systems, Inc., supra, the Court found that a guaranteed right of access would interfere with the editorial discretion of broadcasters, 412 U.S. at 124-25, 93 S.Ct. at 2097, and require undue government supervision of the content of broadcast discussion of public issues. Id. at 126-27, 93 S.Ct. at 2098-99. The Court concluded, moreover, that a guaranteed right of paid editorial access would actually further the interest of the more affluent and effectively prevent the presentation of a broader range of ideas. Id. at 123, 93 S.Ct. at 2096.\nIn CBS, Inc. v. F.C.C., supra, the Court held that requiring this limited right of access (for candidates for federal office) did not impinge on the First Amendment right of broadcasters. While the Court recognized that the First Amendment guarantees the broadcast industry \"the widest journalistic freedom consistent with its public [duties],\" 453 U.S. at 395, 101 S.Ct. at 2829 (quoting Columbia Broadcasting Systems, Inc., 412 U.S. at 110, 93 S.Ct. at 2090), it concluded that \"the statutory right of access ... properly balances the First Amendment rights of federal candidates, the public and broadcasters.\" 453 U.S. at 397, 101 S.Ct. at 2830 (emphasis added). Access regulation is appropriate, the Court observed that:\n[it] is the right of the viewers and listeners, not the right of the broadcasters, which is paramount. It is the purpose of the First Amendment to preserve an uninhibited marketplace of ideas in which truth will ultimately prevail, rather than to countenance monopolization of that market .... It is the right of the public to receive suitable access to social, political, esthetic, moral, and other ideas and experiences which is crucial here.\n\nId. at 395 [101 S.Ct. at 2829] (quoting Red Lion, 395 U.S. at 390 [101 S.Ct. at 2827]) (emphasis added in Columbia Broadcasting Systems, Inc.)\n\n2. Regulation of Newspapers\nThe blanket prohibition against access requirements to newspapers is well established. In Miami Publishing Co. v. Tornillo, 418 U.S. 241, 259, 94 S.Ct. 2831, 2840, 41 L.Ed.2d 730 (1974), the Supreme Court struck down a Florida statute requiring any newspaper that printed an editorial attack on a political candidate's personal character or official record to provide that candidate the opportunity to reply without charge. The Court stated:\n[T]he Florida statute fails to clear the barriers of the First Amendment because of its intrusion into the function of editors. A newspaper is more than a passive receptacle or conduit for news, comment, and advertising. The choice of material to go into a newspaper, and the decisions made as to limitations on the size and content of the paper, and treatment of public issues and public officials \u0097 whether fair or unfair \u0097 constitute the exercise of editorial control and judgment. It has yet to be demonstrated how governmental regulation of this crucial process can be exercised consistent with First Amendment guarantees of a free press as they have evolved to this time.\n\nId. at 258, 94 S.Ct. at 2840.\nThe fact that the newspaper industry had become a highly monopolized field in which entry was economically almost impossible did not justify the right-of-access statute. The Court noted that the statute \"exacts a penalty on the basis of the content of a newspaper.\" Id. at 256, 94 S.Ct. at 2839. Newspapers covering certain news or commentary would be compelled to print a reply. The Court concluded that the statute would ultimately dampen public debate because newspapers would avoid coverage of controversial events to avoid triggering the *983 right-to-reply statute. Id. at 257, 94 S.Ct. at 2839.\n\n3. The Regulation of Cable Television\nThe history of federal regulation of CATV is a somewhat troubled one, despite its relative brevity.[5] The instant case is by no means the first challenge to access requirements for cable television systems.\nIn May 1976 the F.C.C. promulgated rules requiring cable television operators with over 3,500 subscribers to provide public access to its channels.[6] These rules were *984 challenged before the Court of Appeals for the Eighth Circuit in Midwest Video Corp. v. F.C.C., 571 F.2d 1025 (8th Cir.1978), aff'd, 440 U.S. 689, 99 S.Ct. 1435, 59 L.Ed.2d 692 (1979) (Midwest Video II). The Eighth Circuit held that the F.C.C. lacked statutory authority[7] to promulgate public access rules for cable television. Id. at 1052. The Court found that the regulations were not \"reasonably ancillary\" to the F.C.C.'s jurisdiction over broadcast television. Id. at 1050. The regulations, moreover, violated section 3(h) of the Communications Act of 1934, 47 U.S.C. \u00a7 153(h) (1976), by imposing common carrier obligations on cable operators engaged in broadcasting. Id. at 1050-52.\nAlthough it was unnecessary to its disposition of the case, the Eighth Circuit also addressed the constitutionality of the public access requirements. The court found that \"[t]he present access rules strip from cable operators, on four of their channels, all rights of material selection, editorial judgment, and discretion enjoyed by other private communications media ....\" Id. at 1055-56. Because the court concluded that cable operators are entitled to the same First Amendment protection as newspapers, it stated that compelled access to cable facilities impermissibly infringed on a cable operator's right to control its own programming. Id. at 1056. The court's reasoning was based largely on the Supreme Court's holding in Tornillo that the First Amendment prohibits compelled access to a newspaper. The Eighth Circuit stated: \"Despite the Court's guidance in [Tornillo], supra, the Commission has attempted here to require cable operators, who have invested substantially to create a private electronic `publication' \u0097 a means of disseminating information\u0097, to open their `publications' to all for use as they wish.\" Id.\nThe Eighth Circuit distinguished the mandatory access rules from the mandatory program origination rules upheld in Midwest Video I. See note 5 supra. The local origination rule in the earlier case required cable operators merely to make available their production facilities for local programming. The cable operator retained ultimate control over who used his facilities and which programs he would actually air. Id. at 1055. Under the mandatory access rules, however, the cable operator could \"choose neither user nor material.\" Id.\nThe Eighth Circuit also found that the scarcity rationale relied upon by the Supreme Court in Red Lion and CBS, Inc. v. F.C.C. to uphold limited rights of compelled access to broadcast television was not applicable to cable television. \"`[S]carcity which is the result solely of economic conditions is apparently insufficient to justify even limited government intrusion into the First Amendment rights of the conventional press ..., and there is nothing in the *985 record before us to suggest a constitutional distinction between cable television and newspapers on this point.'\" Id. at 1055 (quoting Home Box Office, Inc. v. F.C.C., 567 F.2d 9, 46 (D.C.Cir.), cert. denied, 434 U.S. 829, 98 S.Ct. 111, 54 L.Ed.2d 89 (1977)).\nThe Supreme Court affirmed the Eighth Circuit's decision that the F.C.C. lacked statutory authority to promulgate mandatory access regulations for cable television. Midwest Video II, 440 U.S. 689, 709, 99 S.Ct. 1435, 1446, 59 L.Ed.2d 692 (1979). The Court did not, however, address the question of whether the First Amendment prohibits such regulations \"save to acknowledge that it is not frivolous and to make clear that the asserted constitutional issue did not determine or sharply influence [its] construction of the statute.\" Id. at n. 19.\nWith all due deference to the Eighth and District of Columbia Circuits, I respectfully disagree with their analysis of the constitutionality of the access requirements for cable television systems. Newspapers and cable television cannot be equated. More to the point, the two media are constitutionally distinguishable. Although a cable operator's selection of its programming is similar to the editorial function of a newspaper publisher or a television broadcaster, this similarity does not mean that each medium is entitled to the same measure of First Amendment protection. \"Each method of communicating ideas is a `law unto itself' and that law must reflect the `differing natures, values, abuses and dangers of each method.'\" Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 501, 101 S.Ct. 2882, 2889, 69 L.Ed.2d 800 (1981) (quoting Kovacs v. Cooper, 336 U.S. 77, 97, 69 S.Ct. 448, 459, 93 L.Ed. 513 (1949)).\nCATV and newspapers first differ in that only the latter have historically operated virtually free from any form of government control over their content.[8] As Justice White noted in his concurrence in Miami Herald Publishing Co. v. Tornillo: \"According to our accepted jurisprudence, the First Amendment erects a virtually insurmountable barrier between government and the print media so far as government tampering, in advance of publication, with news and editorial content is concerned.\" 418 U.S. at 259, 94 S.Ct. at 2840 (White, J., concurring) (citations omitted). It was in this historical setting that the Tornillo court struck down the Florida right-of-access law.[9]\nCable television does not have a similar history of freedom from government regulation over either its operations or the content of its programming. See Community Communications v. City of Boulder, Colorado, 660 F.2d 1370, 1378 n. 9, 1379 (10th Cir.1981), petition for cert. dismissed, 456 U.S. 1001, 102 S.Ct. 2287, 73 L.Ed.2d 1296 (1982). Indeed, government franchising of the cable television industry is virtually indispensable. For example, since constructing a cable television system requires use of the public streets or telephone poles, the government has a substantial interest in limiting the number of cable operators who build cable systems. See Omega Satellite Products v. City of Indianapolis, supra, 694 F.2d at 127; Community Communications, supra, 660 F.2d at 1377-78.\nOf course, the flip side to government franchising is that it insulates cable operators from unnecessary competition. The award of a franchise serves as a rational way of choosing which cable operator will provide cable television service within a *986 particular service area. Cable operators often compete for a cable franchise but very rarely develop competing cable systems for the same service area. Such a franchising system recognizes the economic realities of the cable industry, which, as a practical matter, create a \"natural monopoly\" for the first cable operator to construct a cable system in a given service area. Testimony in this case established that to construct the Newport County cable system would cost approximately seven million dollars. Because of these start-up costs and the nature of the cable television market, see Meyerson, the First Amendment and the Cable Television Operator, 4 COMM/ENT L.J. 1, 4-6 (19 ), cable systems have operated largely free from competition. See Omega Satellite Products v. City of Indianapolis, supra, 694 F.2d at 127-28; Cabinet Committee on Cable Communications, Report to the President, CABLE at 10 (1974); First Report and Order, 20 F.C.C.2d 201, 222 n. 27 (1969).\nDespite these fundamental differences between cable television and newspapers (CATV's use of the public right-of-way and its ease of monopolization), on the basis of the Supreme Court's Tornillo decision both the D.C. Circuit in Home Box Office and the Eighth Circuit in Midwest Video II, as explained above, rejected \"scarcity which is the result solely of economic conditions\" as a rationale for content regulation of CATV systems. However, the Tenth Circuit's more recent opinion in Community Communications, supra, reflects an unwillingness to incorporate Tornillo wholesale into the cable television context. As that opinion stated, the \"cable broadcasting medium presents very different circumstances\" from those before the Supreme Court in Tornillo. Community Communications, 660 F.2d at 1379. In Community Communications the appellant City of Boulder had argued that because a cable operator has a natural monopoly for his franchise area, \"the cable broadcasting medium [is] `scarce' in much the same way that the finiteness of the electromagnetic spectrum makes wireless broadcasting a medium of essentially limited access.\" Id. at 1378. Although not explicitly adopting the City's reasoning, the court did agree that \"natural monopoly is a constitutionally permissible justification for some degree of regulation of cable operators,\" although the court warned that this conclusion did \"not mean that the full panoply of principles governing the regulation of wireless broadcasters necessarily applies to cable operators.\" Id. at 1379 (emphasis added).\nClearly, then, one basic issue in the instant case is whether or not economic \"scarcity\" is a constitutionally sufficient rationale for the regulation of cable television. It is the opinion of this court that the Tenth Circuit has developed the more sensible approach to the question. While it is true that the Supreme Court has rejected economic scarcity as a basis for the regulation of newspapers, the lack of any access requirement for newspapers simply does not prevent a member of the general public from expressing his opinions in that same medium, which in such a case is print, of course. Any person may distribute a written message in the form of a leaflet, pamphlet, or other relatively inexpensive form of \"publication.\" In contrast, a resident of Newport County who does not have seven million dollars to develop his own cable system is shut out of that medium with no way to express his ideas with the widely acknowledged power of the small screen. Quite frankly, I am unwilling to say that the Supreme Court would ignore this distinction were the issue to come before it.\nThe result is that Red Lion, the seminal case of contemporary communications law, retains its vitality in the high-tech world of cable television. To be sure, the scarcity rationale for governmental regulation here takes a somewhat different form, but the goal remains the same as in 1969: to promote the First Amendment by making a powerful communications medium available to as many of our citizens as is reasonably possible. For this court, at least, scarcity is scarcity \u0097 its particular source, whether *987 \"physical\" or \"economic,\"[10] does not matter if its effect is to remove from all but a small group an important means of expressing ideas.\nThe Court thus finds that cable operators' editorial control over their channels is not immune from government regulation. Since Rhode Island's mandatory access rules do to some extent limit cable operators' ability to exercise their First Amendment rights, however, we must carefully scrutinize these regulations aimed at the control of speech to ensure that the operators are not being regulated \"`merely because public officials disapprove the speaker's views.'\" Consolidated Edison Co. v. Public Service Commission, 447 U.S. 530, 536, 100 S.Ct. 2326, 2332, 65 L.Ed.2d 319 (1980) (quoting Niemotko v. Maryland, 340 U.S. 268, 282, 71 S.Ct. 325, 333, 95 L.Ed. 267 (1951) (Frankfurter, J., concurring in result)).\nOne should note, however, that the Supreme Court has examined content regulation with less exacting scrutiny under certain circumstances. For example, a regulation that is content-neutral is more likely to survive constitutional scrutiny. Also, the government may enforce time, place and manner regulations of expression which are narrowly tailored to serve a significant government interest and leave open ample alternative channels of communication. Perry Education Assn. v. Perry Local Educators' Assn., ___ U.S. ___, 103 S.Ct. 948, 955, 74 L.Ed.2d 794 (1983); Heffron v. International Society for Krishna Consciousness, 452 U.S. 640, 647, 652, 101 S.Ct. 2559, 2563, 2566, 69 L.Ed.2d 298 (1981). Furthermore, the government may adopt regulations that are not aimed at communicative activity but involve only incidental restrictions on First Amendment liberties. See Procunier v. Martinez, 416 U.S. 396, 411-12, 94 S.Ct. 1800, 1810-11, 40 L.Ed.2d 224 (1974). These latter restrictions pass constitutional muster only if they further substantial governmental interests and if the incidental restriction on free expression is no greater than is essential to the furtherance of that interest. Id. at 410-15, 94 S.Ct. at 1810-12; United States v. O'Brien, 391 U.S. 367, 377, 88 S.Ct. 1673, 1679, 20 L.Ed.2d 672 (1968). The right to regulate cable television being clear, as I see it, the question remains whether the Rhode Island rules survive this test.\nRhode Island's mandatory access rules are content-neutral. The regulations mandate that all individuals be given the opportunity to appear on cable television on a nondiscriminatory first-come, first-served basis. See Rules Governing Community Antenna Television Systems \u00a7 14.1(b). While the access regulations are not intended to restrict the free speech rights of cable operators, their incidental effect is to limit cable operators' editorial control over their channels. Accordingly, the Court concludes the regulations must be examined under the test enunciated in United States v. O'Brien, supra. See Home Box Office, supra, 567 F.2d at 48.\nThe mandatory access requirements serve substantial governmental interests. The regulations are intended to assure community participation in cable television production and programming. It has been noted that \"[i]f cable is to become a constructive force in our national life, it must be open to all Americans. There must be relatively easy access ... for those who wish to promote their ideas, state their views, or sell their goods and services.... This unfettered flow of information is central to freedom of speech and freedom of the press which have been described correctly as the freedoms upon which all of our other rights depend.\" Cabinet Committee on Cable Communications, supra, at 19. See Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, 756, *988 96 S.Ct. 1817, 1822, 48 L.Ed.2d 346 (1976). Cf. Home Box Office, supra, 567 F.2d at 48. See generally T. Emerson, The Affirmative Side of the First Amendment, 15 Geo.L. Rev. 795, 805 (1981). Furthermore, enabling all segments of society to participate in cable television programming promotes the \"First Amendment goal of producing an informed public capable of conducting its own affairs ....\" Red Lion, 395 U.S. at 392, 89 S.Ct. at 1807.\nThe incidental restriction of mandatory access requirements on cable operators' First Amendment freedoms is no greater than is essential to the furtherance of these governmental objectives. Rhode Island requires cable operators only to set aside no more than seven of their 50 or more channels for public access. Cable operators retain complete editorial control over the remaining channels and can use any of these channels to express their own views. Mandatory access regulations thus result in only a minimal intrusion on cable operators' First Amendment activities.\nMandatory access requirements are even less intrusive on First Amendment freedoms than the fairness doctrine upheld by the Supreme Court in Red Lion. Because the fairness doctrine requires broadcasters to present both sides of every issue of public importance, broadcasters may choose to avoid coverage of controversial issues rather than be forced to devote considerable time to opposition spokesmen.[11]See Red Lion, 395 U.S. at 392-93, 89 S.Ct. at 1807-08. See also Tornillo, 418 U.S. at 257, 94 S.Ct. at 2839 (newspaper right-to-reply statute \"dampens the vigor and limits the variety of public debate\"). Mandatory access requirements, by contrast, do not pose such a threat; they require only that all individuals be given an opportunity to air their views on a first-come, first-served basis. Access requirements, therefore, further, rather than inhibit, the presentation of important, controversial issues. See Home Box Office, 567 F.2d at 46 n. 82; Meyerson, supra, at 51.\nIn sum, the mandatory access requirements are a sensible accommodation of the rights of individuals to express themselves, the editorial freedom of cable television operators and the rights of viewers to receive information. The regulations recognize \"the legitimate claims of those unable to gain access ... for expression of their views.\" Red Lion Broadcasting Co. v. F.C.C., supra, 395 U.S. at 400, 89 S.Ct. at 1812. Accordingly, the Court holds that Rhode Island's mandatory access regulations do not violate the First Amendment.\n\nII. TAKING OF PROPERTY\nBerkshire contends that the DPUC's regulations deprive it of property without just compensation in violation of the Due Process Clause of the Fourteenth Amendment. The DPUC regulations require cable operators, at their own expense, to construct an institutional/industrial network capable of servicing all public institutions as well as to dedicate certain of the channels on their home subscriber network for public access purposes. In Berkshire's view, these requirements are an unconstitutional taking *989 of property since the cable operator is neither paid directly by the state for the construction of these facilities, nor guaranteed a rate of return on its investment through the issuance of an exclusive franchise.\nIn Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978), the Supreme Court addressed the standards for determining what constitutes a \"taking\" of property. The Court held that a New York City landmark preservation ordinance did not result in an unconstitutional taking despite the fact that it limited the owner's ability to develop its property. Id. at 130, 98 S.Ct. at 2662. In making this determination, the Court relied primarily on three factors. First, the preservation law furthered the important governmental objective of preserving public areas with special historic, architectural or cultural significance. Id. at 129, 98 S.Ct. at 2661. Second, the preservation law did not preclude the property owner from using all of the airspace above its building. Id. at 136-37, 98 S.Ct. at 2665-66. Third, the law did not prevent the owner from making a profit or realizing a reasonable return on its investment. Id. at 136, 98 S.Ct. at 2665. Furthermore, last year in Loretto v. Teleprompter Manhattan CATV Corp., ___ U.S. ___, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982), the Supreme Court reiterated the impact that a permanent, physical occupation of the property in question traditionally has upon \"taking\" analysis. See id. at 3172-76.\nApplying these factors to the present case, the Court finds that the DPUC's regulations do not effect an unconstitutional taking of property. The regulations requiring cable operators to construct an institutional/industrial network and dedicate certain of their channels for public access were intended to promote the public good. These regulations further the First Amendment rights of service area residents by enabling them to use cable television more effectively. The regulations do not, moreover, deprive cable operators of all of the use of their property. They are permitted to charge a reasonable fee for the use of their facilities with certain limited exceptions. In addition, cable operators can utilize the institutional/industrial network as well as the remaining channels on the regular subscriber network for their own purposes. While the DPUC's regulations impose an economic burden on cable operators, there is simply no evidence that they prevent cable operators from making a profit or obtaining a reasonable return on their investment. Finally, the regulations do not result in any permanent, physical occupation of the plaintiff's property. Accordingly, the regulations are not an unconstitutional taking of property.\nEven assuming that the DPUC regulations constitute a taking, the Court finds that cable operators have been given just compensation. Cable operators are given the right to use the streets and other public places to construct their cable distribution systems. See R.I.G.L. \u00a7 39-19-7 (1977 reenactment). See also Loretto v. Teleprompter Manhattan CATV Corp., supra, at 3172. Cable operators are also given a \"natural monopoly\" over cable television within their service areas. See Omega Satellite Products v. City of Indianapolis, supra, 694 F.2d at 127. The DPUC regulations are thus reasonable conditions on a government license rather than an uncompensated taking of property.\n\nIII. ESTABLISHMENT CLAUSE\nBerkshire's final challenge is to the DPUC rules requiring cable operators to construct an institutional/industrial cable network in addition to their regular subscriber network.\nThe relevant regulation states:\n(b) Each institutional/industrial network shall be erected where necessary within the service area, and shall be so designed and constructed as to provide service to at least the following:\n(1) The institutions, public buildings, and non-profit agency buildings in that service area specified for inclusion in the statewide interconnection network as designated by the Administrator in consultation *990 with the Cable Television Advisory Council;\n(2) all police and fire stations and municipal buildings, all public and private hospitals, all public libraries, all public, parochial and private schools, universities, and colleges, all religious institutions maintaining facilities within the service area, and such other significant community institutions as the Administrator may designate in consultation with the Service Area Citizen's Advisory Committee for that service area. (Any named institution in the above listing shall have the right to decline the offer of drops to either or both networks by so stating in writing to the Administrator and the committee for that service area.)\nRules Governing Community Antenna Television Systems \u00a7 7.3(b) (emphasis added).\nBerkshire contends that requiring cable operators to provide service to all religious institutions and parochial schools is an establishment of religion in violation of the First and Fourteenth Amendments.[12]\nThe standards governing Establishment Clause challenges are well-established. To pass constitutional muster, the challenged governmental action must have a secular purpose, its principal or primary effect must neither advance nor inhibit religion, and it must not foster an excessive government entanglement with religion. Mueller v. Allen, ___ U.S. ___, ___, 103 S.Ct. 3062, 3066, 77 L.Ed.2d 721 (1983); Lemon v. Kurtzman, 403 U.S. 602, 612-13, 91 S.Ct. 2105, 2111, 29 L.Ed.2d 745 (1971). While this standard is easily stated, it has proved difficult to apply. Compare Everson v. Board of Education, 330 U.S. 1, 67 S.Ct. 504, 91 L.Ed. 711 (1947), and Board of Education v. Allen, 392 U.S. 236, 88 S.Ct. 1923, 20 L.Ed.2d 1060 (1968), with Meek v. Pittenger, 421 U.S. 349, 95 S.Ct. 1753, 44 L.Ed.2d 217 (1975), and Levitt v. Committee for Public Education, 413 U.S. 472, 93 S.Ct. 2814, 37 L.Ed.2d 736 (1972).\nIt cannot be doubted that requiring cable operators to provide service on their institutional networks to certain nonprofit institutions, including religious ones, serves a valid secular purpose. The DPUC regulations seek to enable the public to have broad access to the CATV network. The DPUC has sought to further this goal by requiring that the institutional/industrial network be constructed so that various non-profit public institutions have the ability to tap into that system. Additionally, the institutional network has the potential to provide a number of services such as computer interconnect, teleconferences and closed circuit security surveillance. Rhode Island has a legitimate interest in ensuring that many institutions in Newport County, including religious institutions, have access to these services. See Mueller v. Allen, supra, ___ U.S. at ___, 103 S.Ct. at 3066; Roemer v. Board of Public Works of Maryland, 426 U.S. 736, 747, 96 S.Ct. 2337, 2345, 49 L.Ed.2d 179 (1976) (plurality opinion).\nThe Court finds, moreover, that the primary or principal effect of the DPUC regulations neither advances nor inhibits religion. In deciding which institutions should be provided with the ability to join this system, the DPUC was faced with a difficult task. Many nonprofit organizations may desire access to this network. It would be economically unfeasible to grid the entire area for the institutional network alongside the lines for the regular subscriber network. The DPUC chose to limit required access to the system to a group of easily identifiable public institutions which traditionally have close ties to many segments of the community and which can be presumed to exist in all communities in the state, and to such other similar institutions as the Administrator, in consultation with *991 the local Service Area Citizen's Advisory Committee (for the CATV system), may designate. Rules Governing Community Antenna Television Systems \u00a7 7.3(b). The requirement that service be made available to all religious institutions does not prevent cable operators from charging such institutions reasonable fees for the use of their facilities. Although assuring religious institutions access to the institutional network benefits these institutions, the Supreme Court has consistently rejected the proposition that \"`any program which in some manner aids an institution with a religious affiliation' violates the Establishment Clause.\" Mueller v. Allen, supra, ___ U.S. at ___, 103 S.Ct. at 3064 (quoting Hunt v. McNair, 413 U.S. 734, 742, 93 S.Ct. 2868, 2873, 37 L.Ed.2d 923 (1973)).\nThe DPUC has not singled out religious institutions for preferential treatment. Rather, the DPUC regulations mandate that religious institutions be given the same opportunity to utilize the institutional network as are other nonprofit institutions, whether currently named in the regulation or later designated. The Supreme Court has made clear that the state does not violate the Establishment Clause where it neutrally provides assistance to a broad spectrum of similarly situated entities including religious institutions. Mueller v. Allen, supra, ___ U.S. at ___, 103 S.Ct. at 3068 (Minnesota statute which gives all parents a deduction for tuition, textbooks and transportation costs for educating their children, even though most of these expenses would be for educating children in parochial schools, does not violate Establishment Clause); Widmar v. Vincent, 454 U.S. 263, 102 S.Ct. 269, 276-77, 70 L.Ed.2d 440 (1981) (state university which makes its facilities available for the use of registered student groups could not prohibit the use of these facilities for religious worship or instruction without violating the First Amendment; benefit to religion from inclusion in open forum is \"incidental\" and does not violate Establishment Clause); Walz v. Tax Commission of the City of New York, 397 U.S. 664, 672-73, 90 S.Ct. 1409, 1413-14, 25 L.Ed.2d 697 (1970) (New York statute which grants property tax exemption to a range of nonprofit institutions, including religious ones, does not violate Establishment Clause). As the Supreme Court stated in Widmar, \"[i]f the Establishment Clause barred the extension of general benefits to religious groups, `a church could not be protected by the police and fire departments, or have its public sidewalk kept in repair.'\" 102 S.Ct. at 277 (quoting Roemer v. Board of Public Works of Maryland, 426 U.S. 736, 747, 96 S.Ct. 2337, 2345, 49 L.Ed.2d 179 (1976) (plurality opinion)). Indeed, if some but not all religious institutions in Newport County, or none, were given access to the network, the regulation might well violate the First Amendment. See Widmar, 102 S.Ct. at 277-78.\nThe DPUC regulation stands on a different footing from the Massachusetts statute ruled unconstitutional by the First Circuit in Grendel's Den, Inc. v. Goodwin, 662 F.2d 102 (1st Cir.1981) (rehearing en banc), aff'd sub nom. Larkin v. Grendel's Den, Inc., ___ U.S. ___, 103 S.Ct. 505, 74 L.Ed.2d 297 (1982). In Grendel's Den, the statute gave churches and schools a veto power over new liquor licenses within 500 feet of their premises. 662 F.2d at 103. The court found that the law violated the Establishment Clause because it explicitly distinguished between religious and nonreligious groups in conferring its benefit. Id. at 105-06. It noted that although the law conferred its benefit on schools as well, \"[t]his does not dilute its forbidden religious classification. The legislation defines in some detail the additional group to which it extends benefits \u0097 schools \u0097 and this definition cannot encompass all who are otherwise similarly situated to churches in all respects except dedication to `divine worship'.\" Id. at 106-07 (quoting Mass.G.L. c. 138, \u00a7 15A) (footnote omitted). Additionally, the court distinguished Walz, supra, as not involving a statute \"with facially religious classifications,\" even though the statute at issue specifically exempted property used for religious purposes, because \"central to the [Supreme] [C]ourt's reasoning was the fact that New York `has not singled *992 out one particular church or religious group or even churches as such; rather it has granted exemption to all houses of worship within a broad class of property owned by nonprofit, quasi-public corporations.'\" 662 F.2d at 105-06 n. 8 (quoting Walz, supra, at 673). Like the New York statute in Walz, the DPUC regulation simply puts religious institutions on an equal plane with other \"nonprofit, quasi-public corporations\" within a broad class of such groups. Therefore, the primary effect of requiring a cable operator to provide paid access to its institutional network to all religious institutions is to encourage broad public usage of that network rather than to advance religion.\nThe DPUC regulations also do not foster an excessive entanglement between the government and religious institutions. The regulations merely require that service on the institutional network be made available to religious institutions. Once the cable operator has designed and constructed its cable distribution system in such a manner as to satisfy this requirement, government involvement is at an end. In short, because the regulations do not contemplate a continuing relationship between the DPUC and the religious institutions of Newport County, there is no excessive entanglement between the government and religion. See Mueller v. Allen, supra, ___ U.S. at ___, 103 S.Ct. at 3071; Larkin v. Grendel's Den, Inc., 103 S.Ct. 505, 512 (1982); Lemon v. Kurtzman, supra, 403 U.S. at 619, 91 S.Ct. at 2114. Accordingly, the regulations do not violate the Establishment Clause.[13]\nThe prevailing parties will prepare an order in keeping with this opinion.\nNOTES\n[1] \"CATV\", or \"community antenna television\", refers to systems that receive television broadcast signals and transmit them by wire to subscribers. See United States v. Southwestern Cable Co., 392 U.S. 157, 161, 88 S.Ct. 1994, 1996, 20 L.Ed.2d 1001 (1968). \"Cable television\" is a broader term that refers to systems capable not only of re-transmitting television broadcast signals but also of transmitting a variety of programming from non-broadcast sources made possible by satellite delivery systems as well as programming originated in their own studios. R.I.G.L. \u00a7 39-1-1 defines \"CATV\" as including \"a cable television system which receives video or audio signals, electrical impulses, or currents at a central antenna ... and from which it distributes or transmits such signals ....\" The statutory definition of \"CATV\" is thus broad enough to include \"cable television\", and the two terms are interchangeable throughout this opinion.\n[2] Originally the plaintiff also attacked those portions of the regulations dealing with obscene material and the servicing of a U.S. Navy Installation located in Newport. The parties agree these contentions are no longer part of this case and need not be discussed.\n[3] Section 14.1 of the Rules Governing Community Antenna Television Systems, in part, provides:\n\nEvery CATV system operator shall make available to all of its residential subscribers who receive all or any part of the total services offered on the system at least one access channel in each of the categories in sub paragraphs (1), (2), (3) herein. The remaining channels reserved for access purposes shall be apportioned and designated in response to demonstrated community need.\nChannels reserved for access purposes shall be designated as one of the following:\n(1) Public: Public access channels shall be made available for use by members of the general public on a first-come, first-served nondiscriminatory basis. The VHF spectrum shall be used for at least one of these channels;\n(2) Educational: Educational access channels shall be made available for use by local educational authorities and institutions (including, but not limited to, school departments, colleges and universities but excluding commercial educational enterprises);\n(3) Government: Government access channels shall be made available for use by municipal and state government;\n(4) \"Other\": Other designations for access channels may include (but need not be limited to) religious, cultural, ethnic heritage, and library access.\n(5) Leased: Leased access channels shall be made available on a first-come, first-served nondiscriminatory basis.\nThe minimum number of specially designated access channels required by the above paragraph shall be made available immediately upon commencement of residential subscriber service.\nSection 14 further provides that in the event that the Service Area Citizen's Advisory Committee, a citizens' group appointed by the Administrator to advise cable operators about community needs and concerns, id. \u00a7 15.1, determines that any of the specially designated access channels are in use for eight hours a day for a three-month period, then the cable operator shall make an additional similarly designated channel available. Id. \u00a7 14.1(d). On the other hand, if there is insufficient demand for seven public access channels, access programming can be combined on one or more channels. Id. \u00a7 14.1(e).\n[4] The fairness doctrine imposes three separate requirements on broadcasters. First, whenever a broadcaster attacks the integrity of an individual involved in public debate, it must provide an opportunity to respond to an appropriate spokesman. Red Lion, 395 U.S. at 378, 89 S.Ct. at 1800. Second, when a broadcaster endorses a political candidate, the other candidates must be offered reply time. Id. Finally, the fairness doctrine requires broadcasters to provide fair and adequate coverage of differing viewpoints on issues of public importance. Id. For components of the fairness doctrine, see Straus Communications, Inc. v. F.C.C., 530 F.2d 1001, 1007 (D.C.Cir.1976), 47 U.S.C. \u00a7 315(a) (1976) (equal time rule), 47 C.F.R. \u00a7 73-1920(a) (1982), 47 C.F.R. \u00a7 76-209 (1982) (applicability of the rule to cable television operators), 47 C.F.R. \u00a7 72-205 (1982) (applicability to cable television operators). See also Columbia Broadcasting Systems, Inc. v. Democratic National Committee, 412 U.S. 94, 111 n. 8, 93 S.Ct. 2080, 2090 n. 8, 36 L.Ed.2d 772 (1973).\n[5] The Communications Act of 1934 gives the F.C.C. authority to regulate \"interstate ... communication by wire and radio\" conducted by common carriers or broadcasters. See 47 U.S.C. \u00a7\u00a7 151-52 (1976). Until the early 1960's, the Commission had concluded that it lacked authority to regulate cable television. It had reasoned that cable operators were neither \"broadcasters\" nor \"common carriers\" within the meaning of the Act. See United States v. Southwestern Cable Co., 392 U.S. 157, 164, 88 S.Ct. 1944, 1998, 20 L.Ed.2d 1001 (1968); CATV and TV Repeater Services, 26 F.C.C. 403, 427-28 (1959). It had found, moreover, that cable television could not be regulated on the basis of its potentially adverse effect on broadcast television since such adverse effects had not yet been established. See Southwestern Cable Co., supra, 392 U.S. at 164, 88 S.Ct. at 1998.\n\nIn 1962 the F.C.C.'s hands-off policy was abandoned. The Commission recognized that it did not have plenary authority over cable television but found that some regulation was necessary to ameliorate the competitive impact of cable television on local broadcast television. The Commission imposed two separate requirements on cable television operators. First, they were required to carry the signals of local broadcast stations in service areas in which they brought competing signals. First Report and Order, 38 F.C.C. 683, 716-19 (1965). Second, cable operators were forbidden to duplicate the programming of such local stations for periods of 15 days before and after a local broadcast. Id. at 719-30.\nThe Commission's jurisdiction to regulate cable television was challenged in Southwestern Cable Co., supra. The Supreme Court sustained the F.C.C.'s authority to adopt cable regulations on the ground that they were \"reasonably ancillary to the effective performance of the Commission's various responsibilities for the regulation of television broadcasting.\" Id. at 178, 88 S.Ct. at 2005. The Court reasoned that the F.C.C. would be able to achieve its statutory responsibility for the orderly development of an adequate system of local television broadcasting only if it was also permitted to regulate the growing cable industry. Id. at 173-78, 88 S.Ct. at 2003-05.\nSoon after the Supreme Court's decision in Southwestern Cable, the F.C.C. proposed additional rules governing cable television. The Commission stated that its \"concern with `CATV' carriage of broadcast signals [was] not just a matter of avoidance of adverse effects, but extend[ed] also to requiring `CATV' affirmatively to further statutory policies.\" Notice of Proposed Rulemaking and Notice of Inquiry, 15 F.C.C.2d 417, 422 (1968). The F.C.C.'s view as to its own jurisdiction had thus expanded considerably; it now sought to regulate cable television not merely because of its ancillary effect on broadcast television, but also to further the public interest. In an attempt to expand the uses of cable television, the Commission promulgated local origination rules, which required CATV systems with more than 3,500 subscribers to make available facilities for local production and presentation of programs. See 47 C.F.R. \u00a7 74.1111(a) (1970).\nIn United States v. Midwest Video Corp., 406 U.S. 649, 92 S.Ct. 1860, 32 L.Ed.2d 390 (1972) (Midwest Video I), the Supreme Court upheld the F.C.C.'s local origination rules. The Court found that these regulations satisfied Southwestern Cable's requirement of being \"reasonably ancillary\" to the Commission's responsibility to regulate broadcast television. Id. at 670, 92 S.Ct. at 1872. Justice Brennan, speaking for four members of the Court, concluded that the regulations could \"further the achievement of long-established regulatory goals in the field of television broadcasting by increasing the number of outlets for community self-expression and augmenting the public's choice of programs and types of services ....\" Id. at 667-68, 92 S.Ct. at 1870-71 (quoting First Report and Order, 20 F.C.C.2d 201, 202 (1969)). Chief Justice Burger concurred in the result, but noted that the F.C.C. rules \"strain[ed] the outer limits\" of its jurisdiction. Id. at 676, 92 S.Ct. at 1874 (Burger, C.J., concurring).\n[6] These rules required cable operators to designate four of their channels for certain specified uses: leased access, educational purposes, local government purposes, and public access on a nondiscriminatory first-come, first-served basis. See 47 C.F.R. \u00a7\u00a7 76.254-256 (1976). If there was insufficient demand for all four channels, the cable operator was permitted to combine one or more channels. Id. \u00a7 47.254(b). Cable operators were specifically forbidden from exercising any control over the content of access programming except that they were required to adopt rules proscribing the transmission of commercial or obscene material. Id. \u00a7\u00a7 76.256(b), (d).\n\nThe F.C.C. concluded that access channels would serve the public interest since they would\nif properly used, result in the opening of new outlets for local expression, aid in the promotion of diversity in television programming, act in some measure to restore a sense of community to cable subscribers and a sense of openness and participation to the video medium, aid in the functioning of democratic institutions, and improve the informational and educational communications resources of cable television communities.\n1976 Report and Order, 59 F.C.C.2d 294, 296 (1976).\n[7] Berkshire also argues that the Administrator lacks statutory authority to promulgate the challenged regulations. This argument is without merit. R.I.G.L. \u00a7 39-19-6 specifically gives the Administrator authority to promulgate and enforce regulations to prevent the operation of cable companies from \"having detrimental consequences to the public interest.\" By ensuring that members of the community have access to cable television as well as the institutional network, the DPUC regulations are intended to prevent the detrimental consequences of allowing cable television operators to monopolize cable television time. The Court thus concludes that the challenged regulations are within the Administrator's statutory authority to regulate cable television in \"the public interest.\"\n\nThis is simply not a case like Midwest Video II in which the administrator's authority over cable television derives from his authority to regulate broadcast television. Congress gave the F.C.C. no statutory authority to regulate CATV. Here the Rhode Island legislators specifically authorized the Administrator to regulate cable television in and out of itself. Unlike the Eighth Circuit, which would have found such statutory authority unconstitutional, I find to the contrary.\n[8] Newspapers are subject, however, to antitrust laws, Associated Press v. United States, 326 U.S. 1, 65 S.Ct. 1416, 89 L.Ed. 2013 (1945), labor laws, Associated Press v. NLRB, 301 U.S. 103, 57 S.Ct. 650, 81 L.Ed. 953 (1937), and \"ordinary forms of taxation.\" Grosjean v. American Press Co., 297 U.S. 233, 250, 56 S.Ct. 444, 449, 80 L.Ed. 660 (1936).\n[9] As already stated, the proscription against a right of access applies uniquely to newspapers. It was not extended by the Supreme Court to a privately owned shopping center in Pruneyard Shopping Center v. Robins, 447 U.S. 74, 100 S.Ct. 2035, 64 L.Ed.2d 741 (1980), because there was no danger, as in Tornillo, that such a mandate would \"`dampe[n] the vigor and limi[t] the variety of public debate' by deterring editors from publishing controversial political statements that might trigger the application of the statute.\" Id. at 88, 100 S.Ct. at 2044 (quoting Tornillo, 418 U.S. at 257, 94 S.Ct. at 2839).\n[10] Still other types of medium \"scarcity\" are at least theoretically possible to justify content regulation. For example, a cable system guaranteed an exclusive franchise for a particular area by the appropriate governmental agency would establish what might be labeled \"legal\" scarcity. That is, other potential speakers, even those with sufficient funds to establish their own cable systems, would be shut out of the market, in this case by law.\n[11] The fairness doctrine has increasingly come under attack. Critics charge that the doctrine dampens public debate because broadcasters attempt to avoid airing controversial programs that may trigger the government enforced right-to-reply. See, e.g., Goldberg, Cable Television, Government Regulation, and the First Amendment, 3 COMM/ENT L.J. 577, 587 (1981). Bazelon, F.C.C. Regulation of the Telecommunications Press, 1975 Duke L.J. 213, 215. Critics also contend that technological advances such as cable television, low-power television, and direct broadcast satellites have undermined the scarcity rationale on which the fairness doctrine is based. See Kaufman, Reassessing the Fairness Doctrine, New York Times Magazine 16, 18-19 (June 19, 1983). Finally, critics maintain that the fairness doctrine unfairly imposes obligations on the broadcast media that could not constitutionally be imposed on print journalists. Id. at 17. As a result of these criticisms, the F.C.C. has proposed revocation of certain of its procedures governing access. See F.C.C.Rep. No. 5068 (Sept. 17, 1981). In addition the Chairman of the F.C.C. has called generally for \"extend[ing] the full rights of the First Amendment to the electronic press.\" Fowler, Freedom of Electronic Speech, Washington Post Sept. 20, 1981, at C-7. See generally Fowler & Brenner, A Marketplace Approach to Broadcast Regulation, 60 Texas L.Rev. 207 (1982).\n[12] In its complaint and pretrial memorandum, Berkshire claims that the DPUC regulations require cable operators to provide free service to religious institutions. This contention is incorrect. The regulations require only that cable operators design and construct an institutional/industrial network that is capable of serving all religious institutions; they do not preclude cable operators from charging reasonable fees for the use of their facilities. See Rules Governing Community Antenna Television Systems \u00a7 7.3(f).\n[13] Applicants for a CATV operating certificate must design their institutional/industrial network to provide service to \"all religious institutions maintaining facilities within the service area.\" Rules Governing Community Antenna Television \u00a7 7.3(b)(2). Cable operators are thus required in the first instance to determine what constitutes a religious institution. This may prove \"an impossible task in an age where many and various beliefs meet the constitutional definition of religion.\" O'Hair v. Andrus, 613 F.2d 931, 936 (D.C.Cir.1979). See also L. Tribe, American Constitutional Law \u00a7\u00a7 14-16 (1978). As the Supreme Court noted in Fowler v. State of Rhode Island, 345 U.S. 67, 73 S.Ct. 526, 97 L.Ed. 828 (1953): \"[I]t is no business of courts to say that what is a religious practice or activity for one group is not religion under the protection of the First Amendment.\" Id. at 70, 73 S.Ct. at 527. Allowing a state licensed cable operator to determine which \"religious institutions\" will be provided access to its cable system may well infringe an individual's free exercise rights. See Widmar v. Vincent, supra, 102 S.Ct. at 275 n. 11. The Court finds, however, that there is insufficient evidence in the record before it to establish this claim.\n\nThe question must be left for another day as it is not yet ripe for adjudication; the plaintiff in this case is not a religious institution that has been unconstitutionally denied access to the network. It thus lacks standing to raise the free exercise claim.\nI must note that this is a troublesome point. In dialogue with the Court during the hearing it was stated that in Newport County alone there are 75 to 100 allegedly religious institutions, and it follows that if anyone is denied access to this medium, as not being a religious institution, the Court will then have to address the merits of this claim.\n"} -{"text": " IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE\n AT NASHVILLE\n Assigned on Briefs December 11, 2002\n\n STATE OF TENNESSEE v. BARBI MICHELLE BROWN\n\n Direct Appeal from the Circuit Court for Montgomery County\n No. 40100306 John H. Gasaway, III, Judge\n\n\n\n No. M2002-01497-CCA-R3-CD - Filed April 1, 2003\n\n\n\nThe defendant pled guilty to one count of especially aggravated robbery and one count of aggravated\nburglary. The trial court sentenced the defendant to twenty years incarceration pursuant to a\nnegotiated plea agreement setting the maximum amount of time to be served at twenty years. The\ndefendant contends her sentence is excessive and the trial court misapplied enhancement factors (4),\n(5), (6), and (10).1 We agree the trial court misapplied two enhancement factors, but the record\nsupports the imposition of a twenty-year sentence, which is the maximum allowed by her plea\nagreement and the \u201cpresumptive sentence\u201d provided by statute. We affirm the judgments from the\ntrial court.\n\n Tenn. R. App. P. 3 Appeal as of Right; Judgments of the Circuit Court Affirmed\n\nJOHN EVERETT WILLIAMS, J., delivered the opinion of the court, in which DAVID G. HAYES and\nNORMA MCGEE OGLE , JJ., joined.\n\nGregory D. Smith, Clarksville, Tennessee (on appeal); Michael R. Jones, District Public Defender,\nand Roger Nell, Assistant Public Defender (at trial and on appeal), for the appellant, Barbi Michelle\nBrown.\n\nPaul G. Summers, Attorney General and Reporter; David H. Findley, Assistant Attorney General;\nJohn Wesley Carney, Jr., District Attorney General; and C. Daniel Brollier, Jr., Assistant District\nAttorney General, for the appellee, State of Tennessee.\n\n\n\n\n 1\n The 2000 amendment added present enhancement factor (1) and redesignated former (1) through (22) as\nprese nt (2) through (23), respe ctively.\n\f OPINION\n\n On June 4, 2001, a Montogomery County Grand Jury indicted the defendant, Barbi Brown,\nof conspiracy to commit especially aggravated robbery, especially aggravated robbery, aggravated\nburglary, theft of property, and attempted first degree murder. The defendant pled guilty to\nespecially aggravated robbery and aggravated burglary, subject to a plea agreement which dismissed\nall other charges and capped her sentence at twenty years. After the sentencing hearing, the trial\ncourt sentenced the defendant to twenty years incarceration in the Tennessee Department of\nCorrection for her especially aggravated robbery conviction and five years incarceration for her\naggravated burglary conviction, to be served concurrently. The twenty-year sentence is the\nmaximum allowed under the plea agreement and the \u201cpresumptive sentence\u201d provided by statute.\nThe defendant appeals claiming that her especially aggravated robbery sentence is excessive.\n\n Facts\n\n The record reflects that the defendant, Barbi Brown, along with Robert Downey and Marcus\nTramane Green conspired to break into the home of the victim, Charlie Rye, the defendant\u2019s elderly\nuncle. The defendant told Downey that the victim kept money in his home and that he would be an\n\u201ceasy lick.\u201d After Downey solicited the help of Green to commit the robbery, the defendant drove\nDowney and Green to the victim\u2019s home on the night of April 12, 2001. Downey and Green entered\nthe home of the victim, and Downey assaulted the victim with a heavy metal flashlight. Green took\nmoney from the victim\u2019s pants and Downey took a jar full of coins and a television. The defendant,\nDowney, and Green drove away and divided approximately three thousand dollars ($3000) equally\namong between themselves.\n\n The morning after the crime, the victim\u2019s son found the victim in his home badly beaten,\nbruised, and unconscious. Due to sustaining severe injuries, the victim was transported to Vanderbilt\nHospital in critical condition, where he received medical treatment for more than one month. The\nrecord reflects the victim was sixty-six years old at the time of the incident and weighed a little over\none hundred pounds.\n\n Analysis\n\n The defendant argues that the trial court imposed an excessive sentence regarding her\nespecially aggravated robbery conviction, but does not challenge the five-year sentence for her\naggravated burglary conviction. At sentencing, the trial court made the following findings when\ndetermining the defendant\u2019s sentence:\n After weighing and considering all of the enhancement factors and the mitigating\n factors, since there are both types of factors, the Court is to start in the mid range of\n the Class A felony, which is 20 years, enhance - normally the Court would enhance\n and then reduce. The Court has to ask itself in this case whether or not after\n enhancing and reducing in the weighing process whether or not there would be any\n reason to reduce the crime - or to reduce the sentence below the 20 year ceiling that\n\n\n -2-\n\f was fixed by the agreement, and the answer is no. She is sentenced to 20 years\n confinement at TDOC for especially aggravated robbery.\n\n This Court\u2019s review of the sentences imposed is de novo with a presumption of correctness.\nTenn. Code Ann. \u00a7 40-35-401(d). A presumption in favor of the trial court is conditioned upon an\naffirmative showing in the record that the trial judge considered the sentencing principles and all\nrelevant facts and circumstances. State v. Pettus, 986 S.W.2d 540, 543 (Tenn. 1999). If the trial\ncourt fails to comply with these principles, there is no presumption of correctness and our review is\nde novo. State v. Poole, 945 S.W.2d 93, 96 (Tenn. 1997). The defendant bears the burden of\nestablishing that the sentence the trial court imposed was improper. State v. Ashby, 823 S.W.2d 166,\n168 (Tenn. 1991); State v. Boggs, 932 S.W.2d 467, 473 (Tenn. Crim. App. 1996). The defendant\ncontends that her sentence is excessive and claims that enhancement factors (4), (5), (6), and (10)\nshould not have been applied to determine the length of her sentence. We agree the trial court\nmisapplied one enhancement factor and review this appeal de novo without the presumption of\ncorrectness.\n\n The defendant was convicted of especially aggravated robbery, a Class A felony. Tenn. Code\nAnn. \u00a7 39-13-403. Especially aggravated robbery occurs where a robbery, as defined in Tennessee\nCode Annotated section 39-13-403, is \u201caccomplished with a deadly weapon; and where the victim\nsuffers serious bodily injury.\u201d Tenn. Code Ann. \u00a7 39-13-403(a)(1) and (2). The defendant was\nsentenced as a Range I standard offender. The range of punishment for a Class A felony is \u201cnot less\nthan fifteen (15) years nor more than twenty-five (25) years.\u201d Tenn. Code Ann. \u00a7 40-35-112(a)(1).\nThe presumptive sentence is the midpoint of the range if no enhancing or mitigating factors are\npresent. Tenn. Code Ann. \u00a7 40-35-210(c). If enhancing factors exist, the trial court must \u201cenhance\nthe sentence within the range as appropriate for the enhancement factors.\u201d Tenn. Code Ann. \u00a7 40-35-\n210(e).\n\n If no enhancement or mitigating factors are to be considered for sentencing, the presumptive\nsentence for especially aggravated robbery, a Class A felony, shall be the midpoint within the\napplicable range. Tenn. Code Ann. \u00a7 40-35-210(c). The range of punishment for especially\naggravated robbery is fifteen to twenty-five years. Tenn. Code Ann. \u00a7 40-35-112(a)(1). Therefore,\ntwenty years is the midpoint of the range for especially aggravated robbery. If enhancement or\nmitigating factors exist, a trial court should enhance the sentence within the range for enhancement\nfactors and then reduce the sentence within the range for the mitigating factors. Tenn. Code Ann.\n\u00a7 40-35-210(e); State v. Arnett, 49 S.W.3d 250, 257 (Tenn. 2001). As long as the trial court\ncomplies with the purposes and principles set forth by the sentencing act and this determination is\nsupported by the record, the weight given to each factor is left to the discretion of the trial court.\nState v. Kelley, 34 S.W.3d 471, 479 (Tenn. Crim. App. 2000); see Tenn. Code Ann. \u00a7 40-35-210,\nSentencing Comm\u2019n Comments. The weight afforded mitigating and enhancement factors is derived\nfrom balancing relative degrees of culpability within the entire circumstances of the case. State v.\nBoggs, 932 S.W.2d 475, 476.\n\n\n\n\n -3-\n\f The defendant argues that the trial court misapplied enhancement factor (4) in determining\nthe length of her sentence. Tennessee Code Annotated section 40-35-114(4) allows for the\nenhancement of a sentence if \u201cthe victim of the offense was particularly vulnerable because of age\nor physical or mental disability . . . .\u201d Enhancement factor (4) is inapplicable when a victim\u2019s\nvulnerability, because of age or physical or mental disability, is found irrelevant to the commission\nof the offense. State v. Poole, 945 S.W.2d 93, 97 (Tenn. 1997). The defendant argues that this\nfactor was erroneously applied because there is no presumption of vulnerability attached to the\nvictim due to his age and weight. The record reflects that the sixty- six-year-old victim weighed\nbarely over one hundred pounds at the time of the crime and the defendant referred to the victim as\nan \u201ceasy lick.\u201d The record supports a finding that the defendant told her accomplices about the\nvictim as an easy target because of his vulnerability. We conclude the trial court did not err in\napplying enhancement (4).\n\n With respect to enhancement factor (5), Tennessee Code Annotated section 40-35-114(5),\nour supreme court has found that before this factor may be applied, the facts of the case must\n\u201csupport a finding of \u2018exceptional cruelty\u2019 that \u2018demonstrates a culpability distinct from and\nappreciable greater than that incident to\u2019 the crime.\u201d State v. Poole, 945 S.W.2d 93, 98 (Tenn.\n1997). If a trial court should apply enhancement factor (5), it should state what actions of the\ndefendant, apart from the elements of the offense, constituted exceptional cruelty. State v. Goodwin,\n909 S.W.2d 35, 45 (Tenn. Crim. App. 1995). The trial court stated that enhancement factor (5) was\napplicable because the defendant allowed the victim to be treated with exceptional cruelty.\nSpecifically, the trial court stated that the defendant did not stop, or at least abandon, the crime when\nshe knew that her accomplice planned to use a flashlight to beat the victim. From the record, it\nappears as though the frail, elderly victim was beaten repeatedly, beyond what would have been\nnecessary to take money from his person and property from his home. In Poole, our supreme court\nfound enhancement factor (5) applicable, despite the fact the trial court made no findings to support\nits application. Poole, 945 S.W.2d at 99. In Poole, this Court concluded enhancement factor (5)\nwas applicable by stating the following:\n This elderly woman was knocked unconscious by a blow to the head with a baseball\n bat. Even though the defendants knew that the victim lived alone, they left her lying\n unconscious and bleeding under such circumstances that it was unlikely that her\n condition would soon be discovered. In fact, the victim remained in such a condition\n all night and was discovered by family members the next day. Because of the delay\n in receiving medical treatment, the victim is extremely fortunate to have survived this\n attack.\nId. The incident described in Poole is almost identical to the facts in the instant case. For these\nreasons, we conclude the trial court properly applied enhancement factor (5).\n\n The defendant argues that the trial court erred in finding that the personal injuries inflicted\non the victim were particularly great. See Tenn. Code Ann. \u00a7 40-35-114(6). The State concedes that\nenhancement factor (6) may be inapplicable. We conclude that the trial court erroneously enhanced\nthe defendant\u2019s sentence because the victim suffered serious bodily injury. An essential element of\nespecially aggravated robbery is serious bodily injury. Tenn. Code Ann. \u00a7 39-13-403(a)(2). \u201cProof\n\n\n -4-\n\fof serious bodily injury will always constitute proof of particularly great injury.\u201d State v. Jones, 883\nS.W.2d 597, 602 (Tenn 1997). Enhancement factor (6) is inapplicable because serious bodily injury\nis inherent in a conviction for especially aggravated robbery.\n\n The defendant contends that the trial court misapplied enhancement factor (10) because this\nfactor is an essential element to the offense of especially aggravated robbery. Tennessee Code\nAnnotated section 40-35-114(10) is used to enhance a sentence if \u201cthe defendant had no hesitation\nabout committing a crime when the risk to human life was high.\u201d The defendant pled guilty to\nespecially aggravated robbery, which includes the use of a deadly weapon as an essential element\nof the offense. In this case, the defendant\u2019s accomplice used a heavy metal flashlight to inflict\nserious bodily injury upon the victim. When an offense is committed with a deadly weapon, it is\ninherent within the offense that there is a risk to human life and the potential for injury is great. State\nv. Hill, 885 S.W.2d 357, 363 (Tenn. Crim. App. 1994). Because this factor is inherent in the offense\nof especially aggravated robbery, we conclude the trial court misapplied enhancement factor (10).\n\n The defendant concedes that enhancement factors (1) and (2) were properly applied. We\nagree that the record supports enhancement factor (1) because the defendant has a previous history\nof using illegal drugs. Tenn. Code Ann. \u00a7 40-35-114(1). We agree that the record supports the\ncontention that the defendant was the leader in the commission of this offense involving her two\naccomplices. See Tenn. Code Ann. \u00a7 40-35-114(2). The trial court agreed to the application of two\nmitigating factors, (10) and (13). Using mitigating factor (10), the trial court found the defendant\nassisted authorities in locating her accomplices. The trial court supported the application of\nmitigating factor (13) by finding the defendant entered a guilty plea and avoided \u201cthe necessary time,\neffort and expense associated with a trial.\u201d\n\n Upon de novo review, we conclude that the trial court properly applied enhancement factors\n(1), (2), (4), (5) and properly applied mitigating factors (10) and (13). However, we conclude the\ntrial court erred in applying enhancement factors (6) and (10). Despite the misapplication of two\nenhancement factors, we conclude that the weight given to the remaining factors is sufficient to\nsupport a twenty-year sentence. By statute, the trial court was required to begin the defendant\u2019s\nsentence determination at the midpoint of the range of twenty years. However, pursuant to her plea\nagreement, twenty years was the maximum time she could receive. We conclude the trial court,\nabsent an agreement to the contrary, was well within its discretion to enhance the defendant\u2019s\nsentence above twenty years. The agreement in this case established a ceiling which the trial court\ncould not exceed, yet the enhancing factors embedded the sentence in the ceiling such that two\nmitigating factors could not dislodge.\n\n\n\n\n -5-\n\f Conclusion\n\nAccordingly, we affirm the sentence imposed by the trial court.\n\n\n\n\n ___________________________________\n JOHN EVERETT WILLIAMS, JUDGE\n\n\n\n\n -6-\n\f"} -{"text": "537 U.S. 1045\nWILD ET UX.v.SUBSCRIPTIONS PLUS, INC., ET AL.\nNo. 02-316.\nSupreme Court of United States.\nDecember 2, 2002.\n\n1\nCERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT.\n\n\n2\nC. A. 7th Cir. Certiorari denied. Reported below: 292 F. 3d 526.\n\n"} -{"text": "765 F.2d 153\n*/**Highv.Howell\n85-8153\nUnited States Court of Appeals,Eleventh Circuit.\n6/6/85\n\n1\nN.D.Ga.\n\nAFFIRMED\n\n\n*\n Fed.R.App.P. 34(a); 11th Cir.R. 23\n\n\n**\n Local Rule: 25 case\n\n\n"} -{"text": " IN THE UNITED STATES COURT OF APPEALS\n\n FOR THE FIFTH CIRCUIT\n\n\n\n No. 98-41032\n\n\n\nIn The Matter Of: US BRASS CORP\n\n Debtor\n\nTHE INSURANCE SUBROGATION CLAIMANTS\n\n Appellant\n\n versus\n\nUS BRASS CORP; SHELL OIL COMPANY; HOECHST CELANESE\nCORPORATION; OFFICIAL POLYBUTYLENE CREDITORS COMMITTEE;\nELJER INDUSTRIES INC; ELJER PLUMBINGWARE INC\n\n Appellees\n\n\n\n\n Appeal from the United States District Court\n for the Eastern District of Texas\n\n\n March 12, 1999\n\nBefore HIGGINBOTHAM, BARKSDALE, and DENNIS, Circuit Judges.\n\nHIGGINBOTHAM, Circuit Judge:\n\n Insurance Subrogation Claimants appealed an order of\n\nconfirmation of a Chapter 11 reorganization plan proposed by U.S.\n\nBrass, the debtor, and its direct parents, Eljer Manufacturing,\n\nInc., and EMI\u2019s parent Eljer Industries, Inc. The ISC contend that\n\nthe plan violates 11 U.S.C. \u00a7 1123(a)(4), which requires all\n\ncreditors within a class be treated the same, unless the creditor\n\fwho is being treated less favorably agrees to less favorable\n\ntreatment. The ISC also argue that the plan was not proposed in\n\ngood faith under 11 U.S.C. \u00a7 1129(a) and should not have been\n\napproved.\n\n Shell and U.S. Brass have moved to dismiss ISC\u2019s appeal as\n\nmoot. We agree, and finding the plan substantially implemented and\n\neffective relief unattainable, dismiss the appeal.\n\n\n\n I\n\n On May 23, 1994, U.S. Brass filed for Chapter 11 relief in the\n\nEastern District of Texas. Prior to the petition date, U.S. Brass\n\nhad been sued in hundreds of cases seeking damages from alleged\n\ndefects associated with a polybutylene plumbing system. During the\n\npendency of the Chapter 11 case, a global settlement of the PB\n\nlitigation was fashioned in an action styled Tina Cox, et al. v.\n\nShell Oil Co., et al., Civil Action No. 18,844, with the Chancery\n\nCourt for Obion County, Tennessee. The Cox court certified the Cox\n\nPlaintiffs as a national settlement class. The ISC were not\n\nmembers of the settlement class.\n\n In November 1995, the Cox court approved a settlement\n\nagreement between the Cox Plaintiffs and Shell and Celanese and\n\nauthorized the parties to pursue contributions from U.S. Brass. A\n\ncontribution plan was negotiated and is incorporated into the plan\n\nas the Cox Plaintiffs\u2019 Settlement Agreement.\n\n\n\n 2\n\f The Cox Plaintiffs and the ISC are designated as Class 5\n\nclaimants in the reorganization plan. The Cox Plaintiffs\u2019\n\nSettlement Agreement, however, provides a settlement of all Cox\n\nPlaintiffs\u2019 claims in exchange for a cash contribution from the\n\nBrass Trust of $37.4 million and 80% of the Brass Trust\u2019s\n\nrecoveries from insurance coverage to the settlement fund. The\n\nremaining 20% is available for the other Class 5 claimants like the\n\nISC.\n\n On September 30, 1997, the bankruptcy court approved U.S.\n\nBrass\u2019 Fourth Amended Disclosure Statement and on January 27-29,\n\n1998, held a confirmation hearing. The bankruptcy court overruled\n\nthe ISC\u2019s objections and confirmed the plan and the incorporated\n\nsettlements, including the Cox Plaintiffs\u2019 Settlement Agreement.\n\nThe Cox court in Tennessee, in turn, entered a final order on\n\nFebruary 5, 1998, approving the Cox Plaintiffs\u2019 Settlement\n\nAgreement and authorizing the Cox Plaintiffs to consummate the\n\ntransactions contemplated in the plan.\n\n On February 24, 1998, the bankruptcy court entered its order\n\nconfirming the reorganization plan and it became effective March 6,\n\n1998. On the same day, the ISC filed a notice of appeal to the\n\ndistrict court of the confirmation order. Here begins the path to\n\nmootness. The ISC also filed a motion for limited stay pending\n\nappeal with the bankruptcy court requesting the bankruptcy court to\n\nenjoin any funding from the Brass Trust to the Cox Plaintiffs or to\n\nthe Consumer Plumbing Recovery Center, the entity that administers\n\n 3\n\fthe $950 million settlement from Shell and Celanese. The ISC did\n\nnot seek emergency or expedited consideration of the bankruptcy\n\ncourt\u2019s order.\n\n The reorganization plan proceeded, and on March 19, 1998 the\n\nfollowing events occurred:\n\n (1) The Brass Trust was created pursuant to \u00a7 7.1 of\n the plan;\n\n (2) nearly $5 million was distributed to pay the\n holders of allowed administrative, priority and\n general unsecured claims;\n\n (3) Eljer wired more than $48 million into the Brass\n Trust;\n\n (4) the Brass Trust paid more than $32 million to the\n CPRC for distribution to holders of allowed\n plumbing claims;\n\n (5) various global settlement agreements and releases\n were signed by the major participants in the\n Chapter 11 case, such as the Cox Plaintiffs\u2019\n Settlement Agreement, the Shell/Celanese Settlement\n Agreement, and the Brass Settlement Agreement;\n\n (6) the Eljer note was executed; and\n\n (7) U.S. Brass and its parents assigned all their\n right, title, and interest to certain insurance\n proceeds to the Brass Trust.\n\n On March 26, 1998, U.S. Brass filed an objection to the ISC\u2019s\n\nmotion to stay, urging that the plan was now substantially\n\nconsummated. The bankruptcy court held a hearing on the stay\n\nmotion on May 6, 1998. Although no ruling came forth, the ISC did\n\nnothing and on July 27, 1998, the district court affirmed the\n\nbankruptcy court\u2019s confirmation of the plan.\n\n\n\n 4\n\f On August 25, 1998, the ISC filed a notice of appeal to this\n\ncourt. Then finally on September 17, 1998, the ISC filed a motion\n\nto stay and a request for expedited consideration with the district\n\ncourt. The district court never ruled on the stay motion.\n\n The ISC did nothing until January 21, 1999, almost four months\n\nafter appealing the confirmation of the plan to this court. The\n\nISC requested that this court stay further proceedings pending\n\nappeal in this court. We must determine whether this appeal is\n\nmoot considering the failure of the ISC to obtain a stay, the\n\naction taken toward implementing the plan, and the potential effect\n\nof the ISC\u2019s requested relief on the plan.\n\n\n\n II\n\n When evaluating whether an appeal of a reorganization plan in\n\na bankruptcy case is moot, this court examines whether (1) a stay\n\nhas been obtained, (2) the plan has been substantially consummated,\n\nand (3) the relief requested would affect either the rights of\n\nparties not before the court or the success of the plan. See In re\n\nManges, 29 F.3d 1034, 1039 (5th Cir. 1994); In re Berryman\n\nProducts, Inc., 159 F.3d 941, 944 (5th Cir. 1998). Shell and U.S.\n\nBrass argue that each of the factors favor finding the ISC\u2019s appeal\n\nmoot.\n\n 1. Failure to Obtain a Stay\n\n\n\n\n 5\n\f To date, the ISC have not obtained a stay. U.S. Brass and\n\nShell argue that the ISC\u2019s efforts in pursuing a stay have not been\n\ndiligent. For example, the first stay requested by the ISC, on\n\nMarch 6, 1998, was made without a request for expedited\n\nconsideration even though the bankruptcy court had already\n\nconfirmed the plan on January 29, 1998. Similarly, although the\n\ndistrict court affirmed the plan on July 27, 1998, the ISC waited\n\nuntil September 17, 1998 to seek a stay from the district court.\n\nThe district court never ruled, and the ISC never sought further\n\naction on this second stay request until January 21, 1999, when the\n\nISC filed a motion for stay with this court. U.S. Brass and Shell\n\nmaintain that the ISC\u2019s failure to obtain a stay and its lack of\n\ndiligence militates in favor of dismissal for mootness.\n\n This court has recognized that \u201cthe failure or inability to\n\nobtain a stay pending appeal carries the risk that review might be\n\nprecluded on mootness grounds.\u201d Manges, 29 F.3d at 1040. In this\n\ncase, it is undisputed that the ISC have failed to obtain a stay.\n\nWe turn to the transactions that have taken place as a consequence\n\nto determine the extent to which the plan has been implemented.\n\n 2. Substantial Consummation of the Plan\n\n The second question in the mootness inquiry is whether the\n\nplan has been substantially consummated. According to 11 U.S.C.\n\n\u00a71102(a):\n\n \"[S]ubstantial consummation\" means--\n\n\n\n 6\n\f (A) transfer of all or substantially all of the\n property proposed by the plan to be transferred;\n\n (B) assumption by the debtor or by the successor to the\n debtor under the plan of the business or of the\n management of all or substantially all of the\n property dealt with by the plan; and\n\n (C) commencement of distribution under the plan.\n\n\u201c\u2018Substantial consummation\u2019 is a statutory measure for determining\n\nwhether a reorganization plan may be amended or modified by the\n\nbankruptcy court.\u201d Manges, 29 F.3d at 1040. This court may\n\n\u201cdecline to consider the merits of confirmation when a plan has\n\nbeen so substantially consummated that effective judicial relief is\n\nno longer available--even though the parties may have a viable\n\ndispute on appeal.\u201d Berryman, 159 F.3d at 944.\n\n The parties dispute whether the plan has been substantially\n\nconsummated. In the absence of a stay pending appeal, U.S. Brass,\n\nthe Brass Trust, the CPRC, and various other parties in interest\n\nhave proceeded to implement the plan. Shell and U.S. Brass argue\n\nthat the events following the March 1998 confirmation demonstrate\n\nhow extensively the plan has been implemented. The following\n\nactions, for example, have occurred since the ISC sought a stay\n\npending appeal in the district court:\n\n (1) U.S. Brass has continued to operate as a\n reorganized entity;\n\n (2) U.S. Brass has paid in full all of the outstanding\n debt owed to its debtor-in-possession financing\n lender;\n\n\n\n 7\n\f (3) U.S. Brass and EII have implemented a new financing\n arrangement whereby EII provides operating funds to\n U.S. Brass;\n\n (4) the bankruptcy court has entered orders providing\n the final allowance to Class 4 general unsecured\n claims;\n\n (5) U.S. Brass has amended its state charter and by-\n laws as required by the plan;\n\n (6) a number of state lawsuits against EMI and EII\n asserting plumbing claims have been dismissed with\n prejudice;\n\n (7) the Brass Trust has transmitted checks in the sum\n of $267,978.45 as offers of full settlement to the\n convenience class claimants;\n\n (8) the Brass Trust has opened bank accounts,\n established an account record system, implemented\n an investment program for excess funds, obtained\n insurance coverage, established by-laws, and\n retained professionals to carry out its duties;\n\n (9) the Brass Trust, the CPRC, and Goldin Associates,\n the financial advisors to the Brass Trust, have\n established a claim resolution system to process\n allowed claims;\n\n (10) the CPRC has distributed to holders of allowed\n plumbing claims all of the funds transferred by the\n Brass Trust to the CPRC;\n\n (11) Shell and Celanese, in reliance on the Confirmation\n order and pursuant to the terms of the\n Shell/Celanese Settlement Agreement, which was\n incorporated into the plan, have released asserted\n claims against U.S. Brass in excess of $1 billion\n for a payment of $2.5 million and have increased\n their commitment to the Cox Settlement from $850\n million to $950 million.\n\nU.S. Brass claims that all of the elements of \u201csubstantial\n\nconsummation\u201d have occurred because on March 19, 1998, U.S. Brass\n\nemerged as a newly reorganized entity and, as the Closing Binders\n\n\n 8\n\fmake clear, \u201c(I) distributions commenced (with the transfer of more\n\nthan $48 million to the CPRC and the payment if more than $5\n\nmillion to holders of allowed administrative, priority and general\n\nunsecured claims), and (ii) substantially all the property to be\n\ntransferred under the plan was transferred (i.e. U.S. Brass\n\nassigned to the Brass Trust all of their right, title and interest\n\nto certain insurance recoveries).\u201d Shell and U.S. Brass maintain\n\nthat these transactions cannot be \u201cunscrambled\u201d and should weigh in\n\nfavor of mootness.\n\n The ISC reply that the plan has not been so substantially\n\nconsummated that effective relief is no longer available. The\n\nrelief the ISC seek would require the Brass Trust to reallocate its\n\nfuture disbursements of insurance recoveries pro-rata among all\n\nClass 5 claimants, instead of the present 80%/20% plan. In order\n\nto effectuate this relief, the ISC propose removing the Cox\n\nPlaintiffs\u2019 Settlement Agreement from the plan. Shell and U.S.\n\nBrass contend that removing the Cox Plaintiffs\u2019 Settlement\n\nAgreement from the plan would dismantle the plan.\n\n We find the transactions that have taken place to date, the\n\nexchange of mutual releases, the disbursements already made, and\n\nthe general implementation of the plan by all the involved parties\n\nevidence substantial consummation of the plan. This determination,\n\nhowever, does not end the mootness inquiry. \u201c\u2018Substantial\n\nconsummation of a reorganization plan is a momentous event, but it\n\ndoes not necessarily make it impossible or inequitable for an\n\n 9\n\fappellate court to grant effective relief.\u2019\" Manges, 29 F.3d at\n\n1042-43 (quoting Frito-Lay, Inc. v. LTV Steel Co., Inc. (In re\n\nChateaugay Corp.), 10 F.3d 944, 952 (2nd Cir. 1993)). Rather, we\n\nmust also consider whether the remedy the ISC seek will affect the\n\nsuccess of the plan or alter the rights of third parties that have\n\nbeen achieved by its substantial consummation. More specifically,\n\nwe must determine whether the plan has been implemented to a point\n\nthat the removal of the Cox Plaintiffs\u2019 Settlement Agreement would\n\njeopardize the plan\u2019s success.\n\n 3. Granting Relief Would Affect Third Parties and Plan\n\n Shell and U.S. Brass maintain that the Cox Plaintiffs\u2019\n\nSettlement Agreement is an essential element of the plan, and its\n\nremoval would detrimentally affect confirmation. They argue that\n\nthe various settlement agreements between and among the major\n\nparties with an interest in the Chapter 11 case -- U.S. Brass,\n\nShell, Celanese, and the Cox Plaintiffs -- were found by the\n\nbankruptcy court to be essential to the debtor\u2019s reorganization.\n\nWithout the inclusion of the Cox Plaintiffs\u2019 Settlement Agreement,\n\nShell and U.S. Brass argue that the plan would not have been\n\nconfirmed.\n\n Section 13.1 of the plan expressly provides that certain\n\nevents, including the approval of the Cox Plaintiffs\u2019 Settlement\n\nAgreement, the Shell/Celanese Settlement Agreement, and the Brass\n\nSettlement Agreement, are conditions precedent to confirmation of\n\n\n 10\n\fthe plan. These settlements reflect the negotiations of the\n\nparties interested in the Chapter 11 case and the bargains they\n\nsecured by voting in favor of the plan. Shell and U.S. Brass argue\n\nthat if the 80%/20% split provided by the Cox Plaintiffs\u2019\n\nSettlement Agreement was altered, the change would affect the\n\ninterdependence of all the settlements. The plan also provides\n\nthat any of the settling parties may withdraw from the plan in the\n\nevent there are modifications to which the parties have not agreed.\n\nIn short, U.S. Brass and Shell maintain that the Cox Plaintiffs\n\nAgreement cannot be eliminated from the plan without unraveling the\n\nentire plan. In addition, U.S. Brass and Shell oppose any\n\nmodification of the plan by judicial fiat because 11 U.S.C. \u00a7 1127\n\nprovides that only the proponent of a plan or the reorganized\n\ndebtor may modify a confirmed plan.\n\n The ISC, on the other hand, contend that the plan will not\n\nunravel if the court affords them relief by modifying the 80%/20%\n\nsplit with the Cox Plaintiffs to a pro rata distribution.\n\nAccording to the ISC, the only effect of removing the Cox\n\nPlaintiffs\u2019 Settlement Agreement would be to alter the Brass\n\nTrust\u2019s distribution to holders of Class 5 claims.\n\n\n\n III\n\n While the ISC\u2019s proposed day surgery appears at first blush to\n\nbe possible, we are persuaded it would excise parts to which other\n\nvitals of the plan are attached. To remove the Cox Plaintiffs\u2019\n\n 11\n\fSettlement Agreement from the plan at this point would dismantle a\n\nsubstantially consummated plan, requiring, for example, a\n\nrestoration of the rights of the Cox Plaintiffs to pursue claims\n\nagainst U.S. Brass, now a reorganized entity. In addition, the\n\nreleases and settlements that were negotiated among the parties\n\nwould have to be undone because removal of the Cox Plaintiffs\u2019\n\nSettlement Agreement would consequently require giving each\n\nsettling party the right to withdraw from the plan. Removal of the\n\nCox Plaintiffs\u2019 Settlement Agreement would also require that the\n\nmoney contributed by U.S. Brass\u2019 parent corporations to fund the\n\nplan be recovered. These circumstances persuade us that it would\n\nbe inequitable for this court to consider the merits of the ISC\u2019s\n\nappeal. Accordingly, we dismiss this appeal as MOOT.\n\n APPEAL DISMISSED.\n\n\n\n\n 12\n\f"} -{"text": "865 F.2d 261\nUnpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Mary A. TUNSTALL, Plaintiff-Appellee,v.SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant-Appellant.\nNo. 86-6167.\nUnited States Court of Appeals, Sixth Circuit.\nDec. 19, 1988.\n\nBefore KRUPANSKY and RYAN, Circuit Judges, and BAILEY BROWN, Senior Circuit Judge.\n\nORDER\n\n1\nThe Secretary appeals the order of the district court awarding attorney fees to claimant in this Social Security disability action. The sole issue raised on appeal is the standard for determining the \"substantial justification\" of the government's position under the Equal Access to Justice Act (EAJA), Pub.L. No. 96-48, 94 Stat. 2328, 28 U.S.C. Sec. 2412(d). This standard is applied by the court's to decide whether reasonable attorney fees should be awarded against the government.\n\n\n2\nThe parties now have filed joint motions to vacate the district court's order and to remand this appeal for further proceedings in light of the recent United States Supreme Court decision in Pierce v. Underwood, 108 S.Ct. 2541 (1988).\n\n\n3\nUpon consideration, we agree with the parties and conclude that the decision in Pierce v. Underwood controls all issues presented to this Court in the immediate appeal. The district court's judgment of August 29, 1986 is vacated and this case is remanded for further proceedings in light of the Supreme Court's decision in Pierce v. Underwood.\n\n\n4\nIt is so ORDERED.\n\n"} -{"text": "\n929 N.E.2d 795 (2010)\nSUMMERS\nv.\nSTATE.\nSupreme Court of Indiana.\nJune 9, 2010.\nTransfer granted.\n"} -{"text": " IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON\n DIVISION ONE\n\n THE STATE OF WASHINGTON No. 77639-8-I\n\n Respondent,\n\n v. UNPUBLISHED OPINION\n\n KRISTOPHER KEITH GREENING,\n\n Appellant. FILED: June 3, 2019\n\n SCHINDLER, J. \u2014 A jury convicted Kristopher Keith Greening of one count of rape\n\nof a child in the first degree. Greening seeks reversal, arguing insufficient evidence\n\nsupports the conviction and the court erred in denying his motion to exclude his\n\nadmission and testimony that he engaged in anal sex. We affirm.\n\n FACTS\n\n Beginning in August 2010, Kristopher Keith Greening lived with J.F. and her four\n\nminor children in Mount Vernon. They moved from Mount Vernon to Sedro Woolley, to\n\nthe \u201cChinook house\u201d in Birch Bay, and then to Blame. Greening, J.F., and the children\n\nlived in the Chinook house between July 2014 and December 2014 and in the Blame\n\nhouse between January 2015 and October 2015.\n\f No. 77639-8-1/2\n\n\n Greening and J.F. worked long hours with unpredictable schedules. J.F. worked\n\nthree jobs, leaving home early in the morning and not returning until late at night.\n\nGreening worked on a rotating schedule and spent time alone with the children.\n\n In early October 2015, 11-year-old A.C. spent the night at her friend R.F.\u2019s\n\nhouse. A.C. told R.F. that Greening raped her \u201cin the back area\u201d but not \u201cin the front.\u201d\n\nA.C. asked R.F. not to tell anyone about the rape because she was \u201cscared.\u201d\n\n On Monday, October 5, R.F. told A.C.\u2019s best friend J.B. that A.C. said Greening\n\nraped her. When J.B. asked A.C. if \u201cit was true,\u201d A.C. started crying. That day after\n\nschool, J.B. told her father. J.B.\u2019s father immediately called J.F.\n\n J.F. took A.C. to PeaceHealth St. Joseph Medical Center that day. A sexual\n\nassault nurse examined A.C. During the approximately 90-minute examination, A.C.\n\ntold the nurse that \u201cwithin the last week some time,\u201d Greening \u201ctouched her under\u201d her\n\nclothes in her \u201cbutt.\u201d A.C. told the nurse \u201cthis had been going on\u201d for \u201cyears\u201d and\n\nsometimes \u201cit hurts.\u201d Because there was no physical evidence, the nurse referred A.C.\n\nto a forensic interviewer at Brigid Collins Family Support Center.\n\n Brigid Collins child forensic interviewer Gayle Tierney met with A.C. and\n\nWhatcom County Sheriff\u2019s Detective Julie Baker. Tierney videotaped the interview.\n\nUsing open-ended and nonsuggestive questions, Tierney interviewed A.C. for\n\napproximately 45 minutes. A.C. had \u201ca very difficult time\u201d during the interview and did\n\nnot want to talk in detail about the sexual assault. Nonetheless, Tierney concluded A.C.\n\nhad been raped on multiple occasions.\n\n On October 11,2015, Blame Police Detective John Landis spoke with J.B. by\n\ntelephone and interviewed J.F. and A.C.\u2019s other friend R.F.\n\n\n\n 2\n\fNo. 77639-8-113\n\n Detective Landis arrested Greening. During a 40- to 45-minute interview,\n\nGreening was \u201cvery talkative, very open.\u201d Greening told Detective Landis about his\n\nrelationship with J.F. and that \u201cthings weren\u2019t going as well\u201d in the last year. Greening\n\nadmitted he \u201chad anal sex with\u201d J.F. Greening told Detective Landis he felt \u201cclosest\n\nwith\u201d A.C. and he often \u201ccuddled\u201d with her. When Detective Landis told Greening that\n\nA.C. said he raped her, Greening \u201cgot quiet\u201d and \u201cclosed down.\u201d\n\n On October 19, 2015, the State charged Greening with rape of a child in the first\n\ndegree that occurred between January 1, 2015 and October 6, 2015, count 1; and rape\n\nof a child in the first degree that occurred between June 1,2014 and January 1, 2015,\n\ncount 2. Greening pleaded not guilty.\n\n Pretrial, Greening moved to exclude any testimony that he engaged in anal sex.\n\nThe court denied the motion.\n\n During the five-day jury trial, the State called a number of witnesses to testify,\n\nincluding A.C., her mother J.F., her friends J.B. and R.F., the St. Joseph sexual assault\n\nnurse examiner, Brigid Collins forensic interviewer Tierney, and Detective Landis.\n\n Thirteen-year-old A.C. testified that Greening anally raped her one to three times\n\na week for multiple years. However, A.C. testified about two specific times Greening\n\nanally raped her.\n\n A.C. testified that the \u201clast time\u201d Greening anally raped her was during the 2015\n\nschool year. A.C. testified that the rape occurred while she and her two younger\n\nsiblings were watching the movie Madagascar at the Blame house with Greening. A.C.\n\n\n\n\n 3\n\fNo. 77639-8-114\n\nsaid the living room was dark except for the light from the television and she and\n\nGreening were together on a couch under a blanket.\n\n Q. Were you cuddling at this time?\n A. Yeah.\n Q. And when you are in that position on the couch, were you facing\n [Greening] or facing away from [Greening]?\n A. Away.\n Q. Was [Greening] facing away from you or toward you?\n A. Towards.\n Q. Tell us what happened.\n A. [Greening], um, what do you mean exactly?\n Q. Well, you told us that he raped you.\n A. Yes.\n Q. And you told us that he \u2014 and you are drawing us a picture and\n telling us how it happened. Could you tell us how the rape\n happened?\n A. He pulled down my pants a little bit and yeah.\n Q. And what?\n Is this hard for you?\n A. (Witness nods).\n Q. It\u2019s okay. We can take some time. Pulled down your pants and\n what happened?\n A. He touched me in inappropriate places.\n\n Q. . Can you tell me where he touched you?\n . .\n\n\n A. My butt.\n Q. What did he touch you with?\n A. His privates.\n Q. Okay. When you say \u201cprivates\u201d, what do you mean?\n A. Um, his penis.\n Q. Okay. Did he touch you on the inside or outside of your butt?\n A. On the inside.\n\n A.C. testified she was \u201ctoo scared\u201d to move. A.C. said the rape did not last \u201cfor\n\nvery long\u201d and neither one of them \u201cma[d]e any noise.\u201d A.C. testified her younger\n\nbrother was watching the movie while sitting on a different section of the couch and her\n\nyounger sister was watching the movie while sitting in a chair.1 A.C. drew a diagram for\n\n\n\n\n 1 In October 2015, AC\u2019s younger sister and brother were six and seven years old.\n\n\n 4\n\fNo. 77639-8-1/5\n\nthe jury of the living room and marked the location of the furniture and where each\n\nindividual was sitting.\n\n AC. testified that during a weekend sleepover with R.F., they \u201cwere sharing a\n\nbunch of secrets\u201d and she told R.F. that Greening \u201cwas physically abusing me.\u201d A.C.\n\ntold R.F. that Greening \u201craped me\u201d and \u201c[i]t was all in the back area.\u201d A.C. said R.F.\n\n\u201cstarted crying\u201d and \u201cI cried with her.\u201d A.C. told R.F. not to tell anyone because she was\n\n\u201cscared\u201d Greening \u201cwould come after me or something.\u201d\n\n During cross-examination, A.C. testified about additional details of the rape at the\n\nBlame house.\n\n Q. Okay. So the way I see t here, and I guess first of all I ask, were\n you sitting or were you laying down?\n A. I was laying down.\n Q. You were laying down?\n A. Uh-huh.\n Q. And on your side, on your back, on your front?\n A. On my side.\n Q. On your side. And you were fully clothed?\n A. Yes.\n Q. What does that mean?\n A. It means shirt, underwear, pants.\n Q. Jeans?\n A. Um, normally or probably something comfortable because I didn\u2019t\n like jeans at the time.\n Q. Sweats?\n A. Yeah, sweats or yoga pants, something like that.\n Q. Or what?\n A. Yoga pants.\n Q. Okay. Were you wearing underwear?\n A. Yes.\n Q. Okay. And, um, in that picture there that you have marked, you\n have [Greening] right next to you or behind you, I\u2019m trying to\n understand, where was he sitting?\n A. He was laying down and he was right behind me.\n Q. So he was laying down behind you?\n A. Yes.\n Q. And you were laying down in front of him?\n A. Yes.\n\n\n 5\n\fNo. 77639-8-1/6\n\n Q. Was his head where your head would be?\n A. Yes.\n Q. It wasn\u2019t like the opposite where his head was at your feet?\n A. His head was next to mine.\n\n A.C. testified she could not remember as much about the rape at the Chinook\n\nhouse because it happened \u201cmany, many months earlier.\u201d\n\n Q. Do you recall another time that this did happen that you can\n describe for us?\n A. Um, I can\u2019t describe very well but I sort of remember another time.\n\n A.C. said Greening asked her to sit on the couch and \u201cread with him.\u201d\n\n Q. Okay. Can you tell us what happened?\n A. Urn, so he asked me to read with him so we sat on the couch and I\n read to him.\n Q. Was it the same couch?\n A. No. It was a different house and different couch.\n Q. Okay. All right. So, you are reading with him on the couch. Were\n you getting close with him?\n A. Yes.\n Q. Cuddling?\n A. Yes.\n Q. Okay. And could you tell us about the position with you and him?\n A. We were laying down.\n Q. Laying down?\n A. Uh-huh.\n Q. Were you facing toward him or away from him?\n A. Away.\n Q. Was he facing toward you or away from you?\n A. Towards.\n Q. Can you tell us what happened?\n A. He did the exact same thing as the last story.\n\nA.C. testified that when Greening raped her, \u201c[i]t was scary\u201d and she felt physical pain in\n\nher \u201cbutt.\u201d\n\n R.F. testified that during the weekend sleepover, A.C. told her \u201ca lot of details\u201d\n\nabout Greening raping her. R.F. testified that A.C. told her Greening raped her \u201cin the\n\nback area.\u201d R.F. testified that when A.C. first talked about the rape, A.C.\u2019s \u201cface was\n\n\n\n 6\n\fNo. 77639-8-1/7\n\nsad\u201d but her voice was \u201cvery angry.\u201d R.F. said that when \u201cwe started discussing it\n\nmore,\u201d they both were crying. R.F. testified that after the sleepover, they did not discuss\n\nthe rape \u201cbecause she didn\u2019t want to because it was not \u2014 she didn\u2019t feel very good\n\nabout it.\u201d RE. testified she told their friend J.B. about the rape at school on Monday.\n\n Detective Landis testified that Greening said he and J.F. engaged in anal sex.\n\nGreening told Detective Landis he had a very \u201cclose\u201d relationship with AC.\n\n Q. Okay. And did you ever ask [Greening] about any sexual\n relationships that he had with [J.F.]?\n A. Yes.\n Q. And what did he indicate to you?\n A. He indicated that he had anal sex with [J.F.].\n Q. And did you ask about any of the relationships with the children?\n A. I did.\n Q. And what was his response?\n A. He talked about he was close with the kids, ah, and taking care of\n them, ah, urn, but the closest one he was with was with [AC.].\n\n Greening testified. Greening adamantly denied ever having sexual intercourse\n\nwith AC. or being sexually aroused by her. Greening testified that while watching \u201ca\n\ncartoon\u201d at the Blame house, he sat on the couch \u201ccuddling with [AC.] and [her younger\n\nsister], one on each side\u201d of him. Greening testified he did not \u201crecall a blanket\u201d but\n\nadmitted, \u201cThat was one thing we did on movie nights is, like, when we\u2019re watching a\n\nmovie you\u2019re allowed to go grab your own blanket, your own pillow.\u201d\n\n Greening testified he was \u201cshocked\u201d when he \u201cheard about these allegations.\u201d\n\nAccording to Greening, A.C. \u201cwas very angry with me\u201d and \u201c[a] lot of it had to do with\n\nground in gs.\u201d\n\n\n\n\n 7\n\fNo. 77639-8-1/8\n\n Greening said J.F. consented to having anal sex with him during their\n\nrelationship.\n\n Q Okay. You were in a romantic relationship \u2014\n\n\n A Yes, sir.\n Q \u2014withJ.F.?\n A Uh-huh.\n Q Did you have sexual relations with her?\n A Yes, sir.\n Q [J.F.J?\n A Idid.\n Q And could you describe that to the jury, please?\n A We were very intimate. Both actually very sexually active\n people.\n Q There\u2019s been testimony by [Detective] Landis that you said\n that you had had anal sex with her?\n A That has happened.\n Q With [J.F.]?\n A Yes, sir.\n Q And was that consensual?\n A Yes, it was. It was one of those things that had been agreed\n by both parties.\n\nGreening denied preferring only anal intercourse.\n\n Two defense witnesses testified that during the interviews with A.C., she did not\n\nsay that Greening raped her multiple times per week.\n\n In rebuttal, J.F. testified that during the last five months of her relationship with\n\nGreening, they engaged in only anal intercourse. J.F. said that although she\n\nconsented, Greening was the person who \u201casked for or desired\u201d that type of intercourse.\n\nJ.F. testified that she never talked to A.C. or any of her children about sex with\n\nGreening.\n\n The jury convicted Greening of rape of a child in the first degree between\n\nJanuary 1 and October 6, 2015, count 1. The jury found Greening not guilty of rape of a\n\nchild in the first degree between June 1,2014 and January 1,2015, count 2.\n\n\n\n 8\n\fNo. 77639-8-1/9\n\n ANALYSIS\n\n Greening seeks reversal, arguing (1) insufficient evidence supports his conviction\n\nof rape of child in the first degree and (2) the court erred in denying his motion in limine\n\nto exclude testimony that he engaged in anal sex.\n\n1. Sufficiency of the Evidence\n Greening asserts sufficient evidence does not support his conviction of rape of a\n\nchild in the first degree.\n\n Evidence is sufficient to support a conviction if any rational trier of fact could have\n\nfound the essential elements of the crime charged beyond a reasonable doubt. State v.\n\nJohnson, 188 Wn.2d 742, 750-51, 399 P.3d 507 (2017). A challenge to the sufficiency\n\nof the evidence admits the truth of the State\u2019s evidence. State v. Witherspoon, 180\n\nWn.2d 875, 883, 329 P.3d 888 (2014). \u201c[AJIl reasonable inferences from the evidence\n\nmust be drawn in favor of the State and interpreted most strongly against the\n\ndefendant.\u201d Statev. Salinas, 119 Wn.2d 192, 201, 829 P.2d 1068 (1992); Jacksonv.\n\nVirginia, 443 U.S. 307, 319, 99S. Ct. 2781, 61 L. Ed. 2d 560 (1979). In determining\n\nsufficiency, circumstantial evidence is no less reliable than direct evidence. State v.\n\nDelmarter, 94 Wn.2d 634, 638, 618 P.2d 99 (1980). We defer to the trier of fact on\n\n\u201cissues of witness credibility.\u201d Witherspoon, 180 Wn.2d at 883.\n\n The State has the burden to prove every element of the crime charged beyond a\n\nreasonable doubt. U.S. CONST. amend. XIV; WASH. CONST. art. I, \u00a7 3; In re Winship,\n397 U.S. 358, 364, 90 S. Ct. 1068, 25 L. Ed. 2d 368 (1970). \u201c[T]he Due Process Clause\n\nprotects the accused against conviction except upon proof beyond a reasonable doubt\n\nof every fact necessary to constitute the crime with which he is charged.\u201d Winship, 397\n\nU.S. at 364; Statev. Rich, 184 Wn.2d 897, 903, 365 P.3d 746 (2016). Sufficiency of the\n\n\n 9\n\fNo. 77639-8-1/10\n\nevidence is a question of constitutional law that we review de novo. Rich, 184 Wn.2d at\n\n903.\n\n The State charged Greening in count 1 with rape of a child in the first degree in\n\nviolation of RCW 9A.44.073(2). The to-convict jury instruction states, in pertinent part:\n\n To convict the defendant of the crime of Rape of a Child in the First\n Degree, as charged in Count I, each of the following elements of the crime\n must be proved beyond a reasonable doubt:\n (1) Between the 1st day of January, 2015 and the 6th day of\n October, 2015, the defendant had sexual intercourse with A.C.\n dob[2] 6/22/04;\n (2) That A.C. dob 6/22/04 was less than twelve years old at the\n time of the sexual intercourse and was not married to the\n defendant;\n (3) That A.C. dob 6/22/04 was at least twenty-four months younger\n than the defendant; and\n (4) That this act occurred in the State of Washington.\n\n Greening cites State v. Jensen, 125 Wn. App. 319, 104 P.3d 717 (2005), to\n\nargue sufficient evidence does not support his conviction. Greening asserts A.C.\u2019s\n\n\u201cgeneric\u201d testimony \u201cabout being anally raped up to three times per week for some\n\nunspecified period of time is so vague and uncertain that it cannot support a conviction.\u201d\n\nIn Jensen, we reversed a conviction for child molestation. Jensen, 125 Wn. App. at\n\n328. We held that \u201c[i]n cases involving a resident child molester, the alleged victim\u2019s\n\ngeneric testimony can be used to support multiple counts.\u201d Jensen, 125 Wn. App. at\n\n327. However,\n\n [alt a minimum, the alleged victim must be able to describe (1) the kind of\n act or acts with sufficient specificity for the jury to determine which\n offense, if any, has been committed; (2) the number of acts committed\n\n\n\n\n 2 Date of birth.\n\n\n 10\n\fNo. 77639-8-Ill 1\n\n with sufficient certainty to support each count alleged by the prosecution;\n and (3) the general time period in which the acts occurred.\n\nJensen, 125 Wn. App. at 327. Because the child did \u2018not describe the acts with\n\nsufficient specificity for the jury to determine which offenses, if any, [the defendant]\n\ncommitted,\u201d we reversed. Jensen, 125 Wn. App. at 328.\n\n In contrast to Jensen, A.C. provided details and described with specificity the\n\nanal rape. Greening anally raped her while they were watching the movie Madagascar\n\nin a dimly lit room at the Blame house. A.C. testified they were under a blanket on the\n\ncouch, facing \u201ctoward\u201d the television, Greening was directly behind her, and \u201c[h]is head\n\nwas next to mine.\u201d A.C. described what she was wearing and how Greening pulled\n\ndown her pants and placed \u201chis penis . . . [o]n the inside\u201d of \u201c[m]y butt.\u201d A.C. drew a\n\ndiagram and described exactly where her younger siblings were sitting while Greening\n\nraped her.\n\n Greening claims sufficient evidence does not support the verdict because his\n\ntestimony is more credible than the testimony of A.C. We do not reweigh the evidence\n\non appeal. State v. Ramos, 187 Wn.2d 420, 453, 387 P.3d 650 (2017). We give\n\ndeference to the finder of fact in resolving conflicting testimony and weighing the\n\nevidence. State v. Thomas, 150 Wn.2d 821, 874-75, 83 P.3d 970 (2004). The\n\ncredibility of witnesses and the weight the jury gives to the evidence are within the sole\n\nprovince of the jury. Witherspoon, 180 Wn.2d at 883.\n\n Viewing the evidence in the light most favorable to the State, sufficient evidence\n\nsupports the conviction of rape of a child in the first degree between January 1 and\n\nOctober 6, 2015.\n\n\n\n\n 11\n\fNo. 77639-8-1/12\n\n2. Denial of Motion in Limine\n\n Greening contends the court abused its discretion by denying his motion to\n\nexclude testimony that he engaged in anal sex with J.F. Greening asserts the evidence\n\nwas unfairly prejudicial.\n\n We will not disturb the trial courts rulings on a motion in limine absent an abuse\n\nof discretion. State v. Powell, 126 Wn.2d 244, 258, 893 P.2d 615 (1995). A court\n\nabuses its discretion when its decision is manifestly unreasonable or based on\n\nuntenable grounds or reasons. Powell, 126 Wn.2d at 258. Evidence is relevant if it has\n\n\u201cany tendency to make the existence of any fact that is of consequence to the\n\ndetermination of the action more probable or less probable than it would be without the\n\nevidence.\u201d ER 401. The trial court must balance the danger of prejudice against the\n\nprobative value of the evidence. ER 403. We will overturn the court\u2019s determination\n\n\u201conly if no reasonable person could take the view adopted by the trial court.\u201d State v.\n\nPosey, 161 Wn.2d 638, 648, 167 P.3d 560 (2007). The trial judge is in the best position\n\nto evaluate the prejudicial effect and relevancy of evidence. Posey, 161 Wn.2d at 648.\n\n Greening argued that equating the \u201cconduct between consenting adults with rape\n\nof a child was inflammatory and prejudicial.\u201d The State argued that because Greening\n\n\u201cexclusively had anal intercourse with AC.,\u201d the testimony that he was interested in\n\nhaving only consensual anal sex with J.F. was relevant and outweighed the prejudice.\n\nThe court denied Greening\u2019s motion to exclude the testimony. The court ruled the\n\ntestimony was \u201chighly probative\u201d and was not \u201cunfairly prejudicial\u201d as long as the State\n\nused the testimony for the limited purpose of establishing Greening\u2019s interest in anal\n\nsex.\n\n\n\n 12\n\fNo. 77639-8-1/13\n\n The court did not abuse its discretion or deprive Greening of his right to a fair trial\n\nby admitting the testimony. The record shows Greening had a meaningful opportunity\n\nto present a complete defense.\u2019\u201d Holmes v. South Carolina, 547 U.S. 319, 324, 126 5.\n\nCt. 1727, 164 L. Ed. 2d 503 (20O6)~ (quoting Crane v. Kentucky, 476 U.S. 683, 690, 106\n\nS. Ct. 2142, 90 L. Ed. 2d 636 (1986)).\n\n We affirm the jury conviction of one count of rape of a child in the first degree.\n\n\n\n\nWE CONCUR:\n s(~ ~\n \u2018_, \u2014.-.\u2014 \u2014 . \u2014__..~_~.;\n\n\n\n\n ~\n F\n\n\n\n\n Internal quotation marks omitted.\n\f"} -{"text": "\n283 F.Supp.2d 917 (2003)\nMichelle GUALTIERI and Ralph Gualtieri, Plaintiffs,\nv.\nVassiliki Portari FARINA and Lawrence M. Farina, Jr., Defendants.\nNo. 02 CIV. 0992(WCC).\nUnited States District Court, S.D. New York.\nSeptember 16, 2003.\n*918 *919 Costello & Folcheti, LLP, Carmel, NY (Gregory L. Folcheti, of Counsel), for plaintiffs.\nBoeggeman, George, Hodges & Corde, P.C., White Plains, NY (Paul A. Hurley, of Counsel), for defendants.\n\nOPINION AND ORDER\nWILLIAM C. CONNER, Senior District Judge.\nPlaintiffs Michelle Gualtieri (\"M. Gualtieri\" or \"plaintiff\") and her husband Ralph Gualtieri bring this action against Vassilki Portari Farina and Lawrence M. Farina, Jr. for personal injuries arising out of a motor vehicle accident that occurred on August 29, 2000.[1] Defendants bring the *920 instant motion for summary judgment on the basis that M. Gualtieri has not sustained a \"serious injury\" pursuant to New York State Insurance Law Article 51.[2] For the reasons stated below, the defendants' motion for summary judgment is granted.\n\nBACKGROUND\nOn August 29, 2000, R. Gualtieri, the driver of a 1986 Ford Bronco II, and M. Gualtieri, a passenger, were stopped at a red light. (Defs. Rule 56.1 Stmt. at 2; Folchetti Aff. \u00b6 4.) A vehicle driven by V. Farina with the permission of the vehicle's owner L. Farina, struck the rear of plaintiffs' vehicle. (Defs. Rule 56.1 Stmt. at 2; Folchetti Aff. \u00b6 4; Pls. Mem. Opp. Summ. J. at 1.) Neither party called the police nor an ambulance to the accident scene and no one went to an emergency room. (Defs. Rule 56.1 Stmt. at 2.)\nAfter the accident, M. Gualtieri sought treatment from numerous doctors and claims that the following injuries were caused by the accident:\n1) Cervical and lumbar sprain/strain with resultant constant pain in lower back and neck.\n2) Straightening of the cervical curvature.\n3) Bulging of disks C3 through C5-6.\n4) Posterior disc herniation of C6-7 increasing right paracentrally.\nPlaintiff claims these injuries cause constant pain, have limited her motion functions and prevented her from performing all of her household duties, responsibilities and activities for a period of ten months after the accident. (Pls. Mem. Opp. Summ. J. at 15.)\n\nDISCUSSION\n\nI. Summary Judgment Standard\n\nUnder FED. R. CIV. P. 56, summary judgment may be granted where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. See FED. R. CIV. P. 56(c); Anderson v. Liberty Lobby, 477 U.S. 242, 247-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The burden rests on the movant to demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine factual issue exists if there is sufficient evidence favoring the nonmovant for a reasonable jury to return a verdict in her favor. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. In deciding whether summary judgment is appropriate, the court resolves all ambiguities and draws all permissible factual inferences against the movant. See id. at 255, 106 S.Ct. 2505. To defeat summary judgment, the nonmovant must go beyond the pleadings and \"do more than simply show that there is some metaphysical doubt as to the material facts.\" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The court's role at this stage of the litigation is not to decide issues of material fact, but to discern whether any exist. See Gallo v. Prudential Residential Servs., L.P., 22 F.3d 1219, 1224 (2d Cir. 1994).\n\nII. New York's No-Fault Law\n\nNew York's No-Fault law is intended to \"weed out frivolous claims and limit recovery to significant injuries.\" Bewry v. Colonial Freight Sys., No. 01 Civ. 5634, 2002 WL 31834434, at *2 *921 (S.D.N.Y. Dec.17, 2002) (quoting Dufel v. Green, 84 N.Y.2d 795, 798, 622 N.Y.S.2d 900, 647 N.E.2d 105 (1995)). In fact, the No-Fault law states that there shall be no right of recovery for non-economic losses arising out of negligence in the use or operation of an automobile except in the case of a \"serious injury.\" Id.; Barth v. Harris, No. 00 Civ. 1658, 2001 WL 736802, at *1 (S.D.N.Y. June 25, 2001). A serious injury is defined as:\nPersonal injury which results in death; dismemberment; a fracture; loss of a fetus; permanent loss of use of a body organ, member function or system; permanent consequential limitation of use of a body organ or member; significant limitation of use of a body function or system; or a medically determined injury or impairment of a non-permanent nature which prevents the injured person from pursuing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred and eighty days immediately following the occurrence or injury or impairment.\nNew York State Insurance Law \u00a7 5102.\nM. Gualtieri contends that her injuries are serious in that they fall under the latter three categories: permanent consequential limitation of use of a body organ or member; significant limitation of use of a body function or system; or injury or impairment of a non-permanent nature that satisfies the 90/180-day requirement. (Pls. Mem. Opp. Summ. J. at 10.)\nThe New York Court of Appeals has instructed that courts should first determine whether the plaintiff has established a prima facie case for serious injury. Licari v. Elliott, 57 N.Y.2d 230, 236, 455 N.Y.S.2d 570, 441 N.E.2d 1088 (1982). Further, the Court of Appeals provided a guideline for determining whether an injury is serious, specifying that subjective complaints alone are not sufficient for a finding of serious injury, and that objective evidence is needed. Toure v. Avis Rent A Car Sys., Inc., 98 N.Y.2d 345, 350, 746 N.Y.S.2d 865, 774 N.E.2d 1197 (2002). An expert's conclusion based on an MRI is considered objective evidence. Id. at 358, 746 N.Y.S.2d 865, 774 N.E.2d 1197. The Toure court went on to hold that \"an expert's designation of a numeric percentage of a plaintiff's loss of range of motion can be used to substantiate a claim of serious injury,\" however \"an expert's qualitative assessment of a plaintiff's condition also may suffice, provided that the evaluation has an objective basis and compares the plaintiff's limitations to the normal function, purpose and use of the affected body organ, member, function or system.\" Id.\nOn summary judgment, the burden is on the defendants to establish a prima facie case that plaintiff did not sustain a serious injury as defined by \u00a7 5102. Barth, 2001 WL 736802, at *2. To sustain their burden, defendants may rely on unsworn reports from plaintiff's treating physicians but any reports from defendants' own physicians must be in admissible form, i.e., affidavits or affirmations. Id.; Pagano v. Kingsbury, 182 A.D.2d 268, 270, 587 N.Y.S.2d 692 (N.Y.App.Div.1992); McGovern v. Walls, 201 A.D.2d 628, 628, 607 N.Y.S.2d 964 (N.Y.App.Div.1994). If defendants meet their burden, the plaintiff must then set forth a prima facie case that she sustained a serious injury by submitting admissible evidence in the form of affidavits or affirmations. Barth, 2001 WL 736802, at *2; Pagano, 182 A.D.2d at 270, 587 N.Y.S.2d 692 (\"Plaintiff's opposition, to the extent that it relies solely on the findings of the plaintiff's own medical witnesses, must be in the form of affidavits or affirmations, unless an acceptable excuse for failure to comply with this requirement *922 is furnished.\"). However, New York State courts have consistently held that a plaintiff, when opposing summary judgment, may use the unsworn reports that defendants relied on. Pietrocola v. Battibulli, 238 A.D.2d 864, 866 n. 1, 656 N.Y.S.2d 559 (N.Y.App.Div.1997) (allowing plaintiff's doctor to rely on an unsworn MRI in his affidavit because it was the defendant who included the report in the materials offered in support of his motion for summary judgment and \"cannot now be heard to complain\"); Pech v. Yael Taxi Corp., 303 A.D.2d 733, 758 N.Y.S.2d 110, 111 (N.Y.App.Div.2003) (holding that it was proper for the plaintiff to use an unsworn physician's report and MRI to raise a triable issue of fact when they were initially relied on by the defendants, and therefore properly before the court); see also Perry v. Pagano, 267 A.D.2d 290, 290, 699 N.Y.S.2d 882 (N.Y.App.Div.1999); Pagels v. P.V.S. Chem., Inc., 266 A.D.2d 819, 820, 698 N.Y.S.2d 368 (N.Y.App.Div.1999); Raso v. Statewide Auto Auction Inc., 262 A.D.2d 387, 388, 691 N.Y.S.2d 158 (N.Y.App.Div.1999); Vignola v. Varrichio, 243 A.D.2d 464, 467, 662 N.Y.S.2d 831 (N.Y.App.Div.1997) (Goldstein, J., dissenting).\n\nA. Defendants' Evidence\n\nDefendants set forth unsworn evidence from three of plaintiff's physicians and an affirmation from their own physician.\nThe day after the accident, plaintiff saw a chiropractor, Dr. Grina. M. Gualtieri complained of acute lower neck pain and right-side lower back pain that began immediately after the accident and continued to worsen. (Defs.Mem.Supp.Summ. J., Ex. E.) Dr. Grina noted bilateral tenderness of the lower cervical and upper thoracic paraspinal muscles and in the lumbar region. (Id.) Dr. Grina noted joint motion restriction through all the lower cervical segments with all planes of motion stating: \"Cervical ROM was restricted, flexion 40 degrees, extension 10 degrees, left and right lateral bending 15 degrees, left and rotation 50 degrees with pain. Thoracolumbar ROM was restricted with flexion at 40 degrees, extension 0 degrees, left and right lateral bending 15 degrees.\" (Id.) Also, a straight leg raise test on either side showed increased lower back related symptoms at 65 degrees. (Id.) However, Dr. Grina found that M. Gualtieri's neurological status was stable, her muscle strength was graded 5/5 and her sensory reactions to pin prick, light touch and vibration were intact. (Id.) Dr. Grina's impression was acute cervical sprain/strain injury and acute lumbar sprain/strain injury. (Id.) Dr. Grina provided massage therapy and advised plaintiff to modify her activities to tolerance. (Id.) M. Gualtieri saw Dr. Grina thirteen times and at each visit Dr. Grina noted that her physical findings remained essentially the same. (Id.)\nPlaintiff saw Dr. Benjamin on September 20, 2000 for a neurological consultation. (Defs. Rule 56.1 Stmt. at 3.) Dr. Benjamin noted that the patient had a history of multiple sclerosis (\"MS\"), which was diagnosed in June 1997. (Defs.Mem.Supp.Summ. J., Ex. F.) The physical examination revealed tenderness in the right cervical paraspinal musculature, right trapezius, right scalene complex and right deltoid region. (Id.) The neurological examination revealed mostly normal functioning except decreased pin prick sensations in the left lower extremity and right ulnar distribution. (Id.) Dr. Benjamin's impression was cervical strain and right T6 radicular symptomatology, which was causally related to the motor vehicle accident with defendants. (Id.) He recommended continued chiropractic treatment, prescribed Relafen and a soft cervical collar and requested that plaintiff undergo a *923 cervical MRI. (Id.) The cervical MRI, performed on September 25, 2000, revealed \"Straightening of the cervical curvature compatible with reflux muscle spasm. C3 through C5-6 posterior subligamentous disc bulges. C6-7 posterior disc herniation increasing right paracentrally.\" (Id.) An MRI of the lumbar spine performed on July 11, 2001 was normal and plaintiff reported that her lower back pain improved but that she still had consistent neck pain. (Id.) Three visits in 2001 indicated that her neck was supple. (Id.) Her visits to Dr. Benjamin continued through April of 2002 with the consistent diagnosis of chronic cervical and lumbar strain. (Id.) Dr. Benjamin's examination notes do not indicate whether plaintiff sustained any limitation in her range of motion.\nPlaintiff also sought treatment with Dr. Duncan of the Mt. Kisco Medical Group in October of 2001, though apparently she went for treatment of her MS, not for treatment of her back.[3] (Defs.Mem.Supp.Summ. J., Ex. I.) Dr. Duncan found that the plaintiff's back was without tenderness and there was no evidence of pain on percussion of the cervical, thoracic or lumbosacral spine. (Id.) Dr. Duncan also noted plaintiff's history of MS and left sided optic neuritis but found that she was clinically stable with no new complaints. (Id.) A somatic evoked potential study of the bilateral lower extremities ordered by Dr. Duncan produced normal results. (Id., Ex. J.)\nDr. Pracella conducted an independent chiropractic examination of plaintiff on September 28, 2001. (Defs.Mem.Supp.Summ. J., Ex. K.) Dr. Pracella found that plaintiff's range of motion was within normal limits, however plaintiff reported increased lower back pain with extension and lateral bending. (Id.) Dr. Pracella diagnosed plaintiff with cervical and lumbar sprain with a good prognosis. (Id.)\nDefendants' doctor, Dr. Weintraub, examined plaintiff on January 10, 2003. (Id., Ex. L.) He concluded, after examination of plaintiff and review of the above doctors' findings, that the accident caused a cervical and lumbar strain but plaintiff did not appear to be disabled from a neurological perspective. (Id.) Nothing in Dr. Weintraub's affirmation indicates that he performed any specific range of motion tests, nor did he indicate any conclusions as to plaintiff's range of motion based on the tests he did perform. However, he found her neck to be supple, her straight leg examination to be negative, equal strength in all four extremities and normal muscle tone. (Id.) He questioned why plaintiff never mentioned any back or neck pain to Dr. Duncan and could not evaluate the significance of the herniated disk in the neck because \"this can be seen in up to 40% of individuals in the population on an asymptomatic basis.\" (Id.)\n\nB. Defendants' Prima Facie Case\n\nBased on the above evidence, we find that the defendants have satisfied their burden of making a prima facie case that plaintiff did not sustain a serious injury within the meaning of New York Insurance Law \u00a7 5102 based on plaintiff's own treating physician's notes that her neck was supple in 2001, Dr. Weintraub's affirmation that plaintiff's neck was supple in the most recent of all the physical examinations, January of 2003, and Dr. Pracella's examination in 2001 which indicated a range of motion within normal limits. *924 McCarthy v. Perault, 277 A.D.2d 664, 665, 716 N.Y.S.2d 463 (N.Y.App.Div.2000) (granting defendant summary judgment in part on physician's conclusion that neck was supple); see also Mejia v. Leisure Time Tours, No. 01 Civ. 263, 2002 WL 1732887, at *3 (E.D.N.Y. July 24, 2002). Further, Dr. Weintraub found plaintiff's straight leg examination to be negative and she had equal strength in all four extremities. Both Dr. Benjamin and Dr. Weintraub found normal muscle tone and normal gait. The only neurological problems found were decreased pin prick sensations in the left lower extremity and ulnar distribution, which Dr. Duncan attributes to plaintiff's previously diagnosed MS, but which Dr. Benjamin attributes to the car accident. (Defs.Mem.Supp.Summ. J., Ex. I.) Moreover, Dr. Benjamin never noted any range of motion restrictions in his examination reports and never advised plaintiff to limit her normal daily activities. In fact, plaintiff testified that she started work as a postal carrier the day after the accident and remained an employee for a year and a half, missed only ten days of work due to the pain of her injuries and quit her job only as a result of her pregnancy. (Id., Ex. C.) Letellier v. Walker, 222 A.D.2d 658, 659, 635 N.Y.S.2d 682 (N.Y.App.Div.1995) (holding that plaintiff failed to raise a triable issue of fact as to whether her injuries prevented her from performing \"substantially all\" of her daily activities when she missed less than three weeks of work).\n\nC. Plaintiff's Prima Facie Case\n\nThe burden now shifts to plaintiff to set forth sufficient evidence to make out a prima facie case that she sustained a serious injury. In support of her claim that she suffers permanent consequential limitation of use of a body organ or member, significant limitation of use of a body function or system, or injury or impairment of a non-permanent nature which falls into the 90/180-day category, she offers an affidavit from her treating physician, Dr. Benjamin.\nPlaintiff has failed to set forth sufficient evidence of a permanent limitation or an injury that satisfies the 90/180-day requirement. The only indication that plaintiff's injuries are permanent is Dr. Benjamin's affidavit, which states that as a result of the motor vehicle accident, the plaintiff sustained significant injury to her cervical spine, which is permanent and limits the function and use of her cervical spine. However, \"if plaintiff is alleging that her injury has resulted in permanent damage, she is under an obligation to provide competent evidence documenting how and to what extent her injury is permanent. Mere conclusory statements by her physician are not sufficient to raise a triable issue of fact.\" Carter v. Geldis, 2000 WL 1159904, at *6 (E.D.N.Y. April 23, 2002); Lopez v. Senatore, 65 N.Y.2d 1017, 494 N.Y.S.2d 101, 102, 484 N.E.2d 130 (1985) (\". . . the mere repetition of the word `permanent' in the affidavit of a treating physician is insufficient to establish `serious injury.'\").\nAlso, based on Dr. Benjamin's affidavit, his examination notes and plaintiff's testimony, plaintiff has failed to set forth sufficient evidence of an injury or impairment of a non-permanent nature which prevented her from pursuing substantially all of the material acts which constitute her usual and customary daily activities for not less than ninety days during the one hundred and eighty days immediately following the occurrence or injury or impairment. In order to sustain a claim in the 90/180-day category, plaintiff must prove that she was \"curtailed from performing [her] usual activities to a great extent rather than some slight curtailment.\" Licari, *925 57 N.Y.2d at 236, 455 N.Y.S.2d 570, 441 N.E.2d 1088.\nPlaintiff testified that she started work as a postal carrier the day after the accident and remained an employee for a year and a half, only missing ten days of work due to the pain of her injuries and quitting her job only because of her pregnancy. While returning to work does not necessarily preclude plaintiff from establishing a prima facie case in this category, her self-serving testimony that she can no longer clean her house or hold her baby for long periods of time, is unsubstantiated. Sands v. Stark, 299 A.D.2d 642, 644, 749 N.Y.S.2d 334 (N.Y.App.Div.2002) (\"The fact that plaintiff returned to work within a few months of the accident is not dispositive.\"); Arrowood v. Lowinger, 294 A.D.2d 315, 742 N.Y.S.2d 294, 295 (N.Y.App.Div. 2002) (plaintiff's unsubstantiated claim that he was unable to do household chores is insufficient to show serious injury in the 90/180-day category); Gaddy v. Eyler, 79 N.Y.2d 955, 958, 582 N.Y.S.2d 990, 591 N.E.2d 1176 (1992) (plaintiff failed to establish serious injury in 90/180-day category where she submitted no evidence to support her contention that her household and recreational activities were curtailed). Dr. Benjamin's affidavit states that \"complete elimination of physical activity was necessary in the period subsequent to the accident in order to prevent relapse, regression and/or exacerbation.\" (Pls. Mem. Opp. Summ. J., Ex. B \u00b6 14.) However, this statement in no way indicates that he instructed plaintiff to limit her activities and his notes likewise reflect no such instruction. Accordingly, plaintiff has failed to set forth a prima facie case of serious injury in the 90/180-day category, leaving only the category of significant limitation of use of a body function or system.\nIn order to make out a prima facie case for a significant limitation, plaintiff must show a significant limitation in both degree and duration. Khouzam v. Zalesky, No. 93 Civ. 6360, 1996 WL 79882, at *7 (S.D.N.Y. Feb.26, 1996) (citing Petrone v. Thornton, 166 A.D.2d 513, 561 N.Y.S.2d 49, 50 (N.Y.App.Div.1990)). The plaintiff has shown medical evidence of a quantifiable limitation in her range of motion in September of 2000. In his affidavit, Dr. Benjamin reiterates that the cervical MRI showed bulging discs, straightening of the cervical curvature and a disc herniation. We note that \"herniated or bulging discs do not per se meet the statutory threshold of serious physical injury,\" without \"objective evidence of the extent or degree of the alleged physical limitations resulting from the injuries and their duration.\" Rose v. Furgerson, 281 A.D.2d 857, 859, 721 N.Y.S.2d 873 (N.Y.App.Div.2001); Noble v. Ackerman, 252 A.D.2d 392, 394, 675 N.Y.S.2d 86 (N.Y.App.Div.1998). Defendants state in their moving papers that Dr. Grina did not \"set forth a designation of a numeric percentage of plaintiff's loss of motion of either her cervical or lumbar spines.\" (Defs. Mem. Supp. Summ. J. at 3.) However, Dr. Grina did quantify plaintiff's limited range of motion in terms of degrees which Dr. Benjamin converted to percentages. (Defs. Mem. Supp. Summ. J., Ex. E; Pls. Mem. Opp. Summ. J., Ex. B.)[4] In his affidavit, Dr. Benjamin interprets Dr. Grina's impressions of plaintiff's limited range of motion as the following: \"Cervical flexion was limited to 40 out of 60 degrees (33% loss of motion); extension 10 out of 30 degrees (67% loss of motion); *926 right and left lateral bending both 15 out of 30 degrees (50% loss of motion) and left and right rotation 50 out of 60 degrees (16% loss of motion).\" (Pls. Mem. Opp. Summ. J., Ex. B \u00b6 4.) Dr. Benjamin goes on to state that these limitations were evident during his examination of the plaintiff as well, though there is no indication of this in his examination notes. (Id.)\nHowever, as noted above, plaintiff must also prove the duration of the significant limitation. Shao v. Paszynsky, No. 97 Civ. 3815, 2000 WL 307372, at *6 (E.D.N.Y. Jan.31, 2000) (quoting Troutovski v. Sitnir, 180 Misc.2d 124, 687 N.Y.S.2d 534, 535 (N.Y.Civ.Ct.1999)) (\"[T]he absence of proof of a recent medical examination leaves an important evidentiary vacuum in a plaintiff's opposition to a motion for summary judgment, where the plaintiff is claiming some form of permanent or significant injury.\"). Dr. Benjamin's affidavit attesting to the degree of limitation was made almost three years after Dr. Grina's original examination showed a limited range of motion and almost three years after the cervical MRI. Further, Dr. Benjamin did not indicate that his opinion was based upon any recent medical examination and apparently the plaintiff's last visit to Dr. Benjamin was April 29, 2002, over a year before his affidavit. Covington v. Cinnirella, 146 A.D.2d 565, 566, 536 N.Y.S.2d 514 (N.Y.App.Div.1989) (medical affidavit submitted on behalf of plaintiff in which physician expressly bases his opinion on an examination of his records without indicating that he has recently examined the plaintiff is insufficient to withstand summary judgment). The lack of any evidence that this limitation continued, beyond her subjective complaints of pain, in conjunction with evidence that her range of motion was within normal limits by September of 2001 and that her neck was supple around that same time, necessitates the finding that plaintiff failed to meet the definition of serious injury with respect to the durational requirement. Beckett v. Conte, 176 A.D.2d 774, 575 N.Y.S.2d 102, 103 (N.Y.App.Div.1991) (holding that affidavit prepared three years after medical examination from which opinion is based is insufficient to prove duration of the alleged impairment); see also Khouzam, 1996 WL 79882, at *6.\n\nCONCLUSION\nFor the reasons stated above, the defendants' motion for summary judgment is granted.\nSO ORDERED.\nNOTES\n[1] This Court has jurisdiction pursuant to 28 U.S.C. \u00a7 1332.\n[2] Plaintiffs cross moved for partial summary judgment on the issue of liability, but defendants conceded liability in their reply papers leaving only the issue of whether plaintiff's injuries fall within the category of \"serious injury.\" (Defs. Reply Mem. \u00b6 3.)\n[3] Defendants' doctor, Dr. Weintraub, notes that plaintiff visited Dr. Duncan for treatment of her MS. (Defs.Mem.Supp.Summ. J., Ex. L.)\n[4] Defendants argue that Dr. Benjamin may not interpret Dr. Grina's unsworn report, but we find that because defendants relied on it, it is properly before the Court. See discussion supra Part II.\n"} -{"text": "\n956 N.E.2d 1157 (2011)\nIn re the PATERNITY OF M.F.\nN.F., Appellant-Respondent,\nv.\nJ.T., Appellee-Petitioner.\nNo. 10A01-1101-JP-15.\nCourt of Appeals of Indiana.\nNovember 9, 2011.\n*1159 A. David Hutson, Smith Carpenter Thompson Fondrisi Cummins & Lewis, LLC, Jeffersonville, IN, Attorney for Appellant.\n\nOPINION\nBROWN, Judge.\nN.F. (\"Mother\") appeals the trial court's order finding her in contempt of court. Mother presents one issue, which we revise and restate as whether the trial court erred in finding her in contempt. We affirm in part, reverse in part, and remand.\nThe relevant facts follow. Mother and J.T. (\"Father\") have a daughter, M.F., who is fourteen years old. Mother resides in Jeffersonville, Indiana, and Father resides in Miramar, Florida. In April 2010, Father filed a motion for modification of parenting time. After a hearing, the trial court approved an order on July 6, 2010, which provides in part that Father \"is to receive Parenting Time where Distance is a factor,\" that \"the parties shall share the cost of travel expenses (50/50),\" that \"for winter break 2010, [Father] shall have the minor child from the date school lets out for seven days thereafter,\" and that \"the parties shall alternate Christmas day thereafter.\"[1] Appellant's Appendix at 9.\nOn September 1, 2010, Father filed a motion to modify support.[2] A hearing on the motion was initially scheduled for November 4, 2010 but, on October 1, 2010, was rescheduled for December 16, 2010.\nOn Saturday, December 11, 2010, Mother and Father spoke with each other by phone, Father stated that he would like to change his visitation with M.F. to the second week after Christmas, and Mother told Father that she did not have a problem with that but that she had scheduled appointments for M.F. during that time due to M.F.'s school schedule and Mother's *1160 work schedule and that she would check on the following Monday to see if it were possible to change the appointments.\nOn December 13, 2010, Mother called Father to make him aware that she was unable to change M.F.'s appointments and that she had found a flight from Louisville, Kentucky, to Miami, Florida, for December 18, 2010, and a return flight to Louisville for December 24, 2010. On December 14, 2010, Mother and Father exchanged several text messages related to the dates that M.F. would fly to Florida. In a text message to Mother, Father indicated that he was scheduling M.F. to return to Indiana on either December 24 or 25, 2010, and Mother sent a text message to Father stating that it was not acceptable for M.F. to return on December 25, 2010. Father sent a text message to Mother indicating that he did not have the money for the flight on December 24, 2010. Mother sent a text message to Father stating that she would see Father on Thursday, which was December 16, 2010, the date of the scheduled court hearing on Father's motion to modify support, and Father sent a text message to Mother stating that they would talk in court.\nThe court held a hearing on Father's motion to modify support on December 16, 2010 as scheduled.[3] An entry for December 16, 2010 in the CCS indicates: \"Not Present: Petitioner [Father]; Respondent [Mother].\" Id. at 4. The court granted Mother's motion to continue, over Father's objection, and set the matter for March 11, 2011. Also on December 16, 2010, Mother sent a text message to Father asking \"I thought we were going to talk in court & u did show ? ?\" Id. at 18.\nWhile M.F.'s last day of school prior to Christmas break was originally scheduled to be Friday, December 17, 2010, the school had scheduled two days\u0097December 20 and 21, 2010\u0097as possible make-up days. Due to a snow day the school scheduled \"a snow make-up day on Monday, December 20th.\" Respondent's Exhibit 1. In addition, a school play was rescheduled for that same day.\nOn December 17, 2010, Father sent a text message to Mother stating \"Ok [M.F.] is flying out of Cincinnati tomorrow morning and she will be back on the 24 I will email you the itinerary in a bit.\" Appellant's Appendix at 19. Mother sent a text message to Father stating that she had to work on December 18, 2010, because she had taken time off work to go to court on December 16, 2010. After Mother and Father exchanged several text messages regarding their disagreement over the flight arrangements, Father sent a text message to Mother stating: \"Just sent you the email. [M.F.] is flying out of Lexington at 6.00 pm due to you [sic] conflict with work tomorrow the 18. Returns the 24 at 5.30 pm into Lexington.\" Id. at 19. The email Father sent to Mother indicated that M.F. would be leaving from Lexington on Saturday, December 18, 2010, at 5:59 p.m., and returning to Lexington on Friday, December 24, 2010. The email also indicated that the departure time from Lexington was in the evening to avoid issues with Mother's work on Saturday. Mother sent a text message to Father stating that she \"got the email however that won't work.\" Id. Mother did not place M.F. on the flight that Father had arranged.\nOn or about December 20, 2010, Father filed a Motion for Citation for Contempt of Court and Motion for Emergency Hearing, and the trial court set an emergency hearing for December 21, 2010. On December 21, 2010, Mother, by counsel, filed an \"Objection *1161 Motion for Continuance, and Motion to Prevent Telephonic Testimony of [Father],\" which stated in part that Mother's counsel was given less than twenty-four hours notice of the hearing and Mother was not given sufficient notice of the hearing and requested the court to reschedule the hearing. Id. at 14.\nThe trial court held the emergency hearing on December 21, 2010, at which Father appeared by phone. At the hearing, Father's counsel stated that Father had purchased airfare for M.F., that M.F. had not taken the flight which he had arranged, and that he had attempted to contact Mother by phone, email, and text message but received no response. Mother's counsel stated that he had not been able to contact Mother prior to the hearing, that no evidence or testimony had been admitted upon which the court could make a decision, and that he would like additional time to get in touch with Mother. Father testified by phone that, on the morning of Friday, December 17, 2010, he had purchased tickets for M.F. to travel to Florida and that he had been unable to reach either Mother or M.F. since December 17, 2010. Father also testified that his understanding had been that Mother wanted M.F. to be in Indiana no later than December 23, 2010, that the seven days did not begin until Saturday, December 18, 2010, because M.F.'s last day of school was Friday, December 17, 2010, and that seven days after December 18, 2010 actually fell on Christmas Day. Father testified that Mother did not want M.F. to return on Christmas Day and that they had several exchanges indicating that it would be settled on December 16, 2010 in court. Near the end of the hearing, the court continued the hearing to the following day and ordered Mother to appear in court on December 22, 2010, at 9:00 a.m.\nAt the December 22, 2010 hearing, Mother indicated that her understanding of the court's order regarding visitation was that Father was supposed to have parenting time with M.F. in Florida beginning after school ended for Christmas break. Mother testified that the last day of school for M.F. was originally scheduled to be Friday, December 17, 2010, but due to a snow day, the last day of school was rescheduled for December 20, 1010. Mother also presented an exhibit containing a print-out of the school's website notifying parents of the schedule change. Mother testified that Father and Father's counsel had copies of M.F.'s school calendar which stated there was a possibility of snow make-up days on December 20 and 21, 2010, and that she knew Father was aware of the school website because he previously obtained information from the site. Mother further testified that, during her phone call with Father on Monday, December 13, 2010, she had made Father aware that there could be a snow day but that she did not know at that time.\nMother indicated that M.F. did not board the plane on Saturday, December 18 because she had school on Monday, December 20, and also had a play that \"was scheduled originally for Thursday evening and that was also changed to Monday the 20th.\" Transcript at 36. Mother further indicated that she received Father's email stating that he arranged a flight which was scheduled to leave from Lexington, Kentucky, and that she made Father aware that she would not be able to do that \"prior to [Father] purchasing the ticket.\" Id. Mother testified that she and Father considered having M.F. visit Father the week after rather than the week before Christmas, and that she had been unable to reschedule the appointments she had made for M.F. during the week after Christmas. Mother testified that she had told Father about a Friday flight out of Louisville, Kentucky and that Father said that he would look into it. Mother testified *1162 that the first she heard of the flight departing from Lexington was on Friday, December 17, 2010; that she was a manager at a kitchen; that she had to trade schedules in order to be in court on Thursday, December 16, 2010; and that she had agreed to work from 10:00 a.m. to 7:00 p.m. on Saturday, December 18, 2010. On cross-examination, Mother acknowledged that she did not expressly inform Father that M.F.'s school had a make-up day on December 20, 2010, and Father testified by phone that he had not been aware that December 20, 2010, would be used to make up a snow day.\nFather's counsel asked the court to require Mother to pay the costs of transportation to Florida and Father's attorney fees and to find Mother in contempt. Mother's counsel argued that there was no basis for the court to find Mother in contempt and thus no basis for the court to grant the relief Father's counsel requested. Mother's counsel further argued that the last day of school was the previous day and thus there was no basis to find Mother in contempt and that Mother should pay for half of any flight that was booked for M.F., but that Mother should not be liable for the cost of the flight that was booked as a result of a mistake.\nThe trial court stated that it was \"going to find [Mother] in contempt for what [she did] to frustrate this court order.\" Transcript at 66. The court stated:\nWhether or not it would have been on the 17th or whether or not it would have been yesterday. Really had you bought the ticket based on the 20th being the last school day and coming into court today saying I have the tickets to travel on the 21st, that would have been some sign of good faith. But I don't see any sign of good faith on your part, ma'am.\nId. After some discussion, the court ordered Mother to purchase a round-trip ticket so that M.F. would travel to Florida on December 27, 2010, and return on January 2, 2011. The court also stated: \"I'm going to assess you attorney's fees in the sum [of] three hundred dollars, payable to [Father's counsel] in thirty days for your contempt.\" Id. at 70. On December 27, 2010, the trial court issued a written order, which provided in part:\n1. [Mother] is found to be in Contempt of this Courts [sic] previous Order of 6/28/10.\n2. [Mother] shall be responsible for the cost of transportation to and from Ft. Lauderdale Florida for the minor child with travel to begin on 12/27/10 with the child to be returned on 1/2/11.\n3. [Mother] is further ordered to pay attorney's fees to [Father's] attorney in the amount of $300.00 to be paid within 30 days of 12/22/10.\nAppellant's Appendix at 7.[4]\nThe issue is whether the trial court erred in finding Mother in contempt. Whether a party is in contempt of court is a matter within the trial court's discretion, and its decision will be reversed only for an abuse of that discretion. J.M. v. D.A., 935 N.E.2d 1235, 1243 (Ind.Ct.App.2010) (citing Norris v. Pethe, 833 N.E.2d 1024, 1029 (Ind.Ct.App.2005)), reh'g denied. A court has abused its discretion when its decision is against the logic and effect of the facts and circumstances before the court or is contrary to law. Id. (citing Mitchell v. Mitchell, 871 N.E.2d 390, 394 (Ind.Ct.App.2007)).\nWe initially observe that Father has not filed an appellee's brief. When an *1163 appellee has not filed an answer brief, we need not undertake the burden of developing an argument on the appellee's behalf. Henderson v. Henderson, 919 N.E.2d 1207, 1210 (Ind.Ct.App.2010). Rather, we may reverse the trial court if the appellant presents a case of prima facie error. Id. Prima facie error means at first sight, on first appearance, or on the face of it. Id. If an appellant does not meet this burden, we will affirm. Id.\nContempt of court \"involves disobedience of a court which undermines the court's authority, justice, and dignity.\" Henderson, 919 N.E.2d at 1210 (citing Srivastava v. Indianapolis Hebrew Congregation, Inc., 779 N.E.2d 52, 60 (Ind.Ct.App. 2002), trans. denied). There are two types of contempt: direct and indirect. Id. Direct contempt involves actions occurring near the court that interfere with the business of the court and of which the judge has personal knowledge. Id. Contempt is indirect if it involves actions outside the trial court's personal knowledge. Id. \"Willful disobedience of any lawfully entered court order of which the offender had notice is indirect contempt.\" Id. (citing Francies v. Francies, 759 N.E.2d 1106, 1118 (Ind.Ct.App.2001), reh'g denied, trans. denied).\nThe trial court here found Mother to be \"in Contempt of this Courts [sic] previous Order of 6/28/10.\"[5] Appellant's Appendix at 7. Generally, a person who willfully disobeys any order lawfully issued by any court of record or by the proper officer of the court is guilty of indirect contempt. Henderson, 919 N.E.2d at 1210 (citing Ind.Code \u00a7 34-47-3-1). As such, this case involves indirect contempt. See id. (citing In re Paternity of J.T.I., 875 N.E.2d 447, 450 (Ind.Ct.App.2007) (concluding that the mother's interference with the father's parenting time as provided by a court order is one of indirect civil contempt)).\nIndirect contempt \"is the willful disobedience of any lawfully entered court order of which the offender has notice.\" City of Gary v. Major, 822 N.E.2d 165, 169 (Ind.2005) (citation omitted and emphasis omitted).\nIt lies within the inherent power of the trial court to fashion an appropriate punishment for the disobedience of its order. MacIntosh v. MacIntosh, 749 N.E.2d 626, 631 (Ind.Ct.App.2001), trans. denied. Unlike criminal indirect contempt, the primary objective of a civil contempt proceeding is not to punish the contemnor but to coerce action for the benefit of the aggrieved party. Thompson v. Thompson, 811 N.E.2d 888, 905 (Ind.Ct.App.2004), trans. denied. . . . \"Nevertheless, a contempt order which neither coerces compliance with a court order or compensates the aggrieved party for loss, and does not offer an opportunity for the recalcitrant party to purge himself, may not be imposed in a civil contempt proceeding.\" Flash [v. Holtsclaw], 789 N.E.2d [955, 959 (Ind. Ct.App.2003), trans. denied].\nIn re Paternity of M.P.M.W., 908 N.E.2d 1205, 1209 (Ind.Ct.App.2009). Further, this court has held:\nIn order to be held in contempt for failing to comply with a court order, a party must have willfully disobeyed the order. The order must have been so clear and certain that there could be no question as to what the party must do, or not do, and so there could be no question regarding whether the order is *1164 violated. A party may not be held in contempt for failing to comply with an ambiguous or indefinite order. . . .\nBandini v. Bandini, 935 N.E.2d 253, 264-265 (Ind.Ct.App.2010) (citations and quotation marks omitted).\nMother argues that the court's order \"did not clearly state the circumstances of the Winter Break 2010 visit\" and that the court erred by holding her \"in contempt of a vague order that did not clearly require her to do the acts that she was held in contempt for failing to do.\" Appellant's Brief at 5. Mother points to the court's statement that it was \"going to find [Mother] in contempt for what [she did] to frustrate this court order\" and asserts that the order \"did not specifically state the actions or inactions for which [she] was found to be in contempt.\" Transcript at 66; Appellant's Brief at 6. Mother argues that the court's order \"did not specify how travel arrangements would be made for [Father's] 2010 winter break parenting time.\" Appellant's Brief at 7. Specifically, Mother argues that the court's July 6, 2010 order \"did not obligate [her] to put M.F. on the flight of [Father's] choosing on the date that parenting time was to begin,\" that it \"did not require [Mother] to tell [Father] that the reason the December 18, 2010 Lexington flight would not work is that M.F. had school scheduled for the following Monday,\" and that \"there was nothing in the order that required [Mother] to purchase a plane ticket for M.F. after December 20, 2010.\" Id. at 8-9.\nThe order entered on July 6, 2010 provided in part: \"That for winter break 2010, [Father] shall have the minor child from the date school lets out for seven days thereafter. That the parties shall alternate Christmas day thereafter.\" Appellant's Appendix at 9. The court's written order found Mother to be in contempt of court but did not set forth express reasons for the finding.\nThe order entered on July 6, 2010 did not expressly state that Mother was responsible for purchasing a plane ticket or otherwise arranging travel or transportation plans for M.F. to ensure that Father was able to exercise his parenting time. Instead, the order merely set forth the seven-day period during which Father was to have parenting time. Further, the record indicates that the parties were aware that the last day of school for M.F. was originally scheduled to be Friday, December 17, 2010, but that there was a possibility that the last day of school would be on Monday, December 20, 2010 or Tuesday, December 21, 2010 if the school needed to make up one or more days due to any previous snow days. The record reveals that the school's website indicated that the school would have a snow make-up day on Monday, December 20, 2010. In addition, we note that any failure by Mother to inform Father that M.F.'s school had scheduled a make-up day was not a violation of any express provision in the court's July 6, 2010 order. Further, the exchange of text messages between Father and Mother on December 17, 2010 indicates that Mother sent a message to Father that she had to work on Saturday, December 18, 2010 because she had changed her schedule to be in court on Thursday, December 16, 2010, and that Father then scheduled a flight for M.F. to fly out of Lexington, Kentucky, for 6:00 p.m. on Saturday, December 18, 2010.\nFurther, we note that \"[t]o avoid being purely punitive, a contempt order must offer an opportunity for the recalcitrant party to purge himself or herself of the contempt.\" Henderson, 919 N.E.2d at 1212 n. 3. Here, the court's order entered on December 27, 2010, did not indicate the manner in which Mother could purge herself of the contempt. See id. (noting that one problem with the trial court's contempt *1165 order was that it did not indicate the manner in which the husband could purge himself of the contempt).\nBased upon our review of the record, we conclude that Mother has presented a prima facie case that, under the circumstances, the trial court abused its discretion in finding her in contempt. Accordingly, we reverse that portion of the order finding Mother in contempt. See id. at 1210-1212 (reversing finding of contempt and noting that the court's order did not indicate how the appellant could purge himself of the contempt); Nicholas v. Nicholas, 482 N.E.2d 770, 771 (Ind.Ct. App.1985) (holding that the husband demonstrated prima facie error in the entry of the contempt judgment, noting that an order or judgment which merely declares the rights of the parties without any express command or prohibition cannot provide the foundation for contempt proceedings, and finding that a provision in the divorce decree that the husband was responsible for college expenses was indefinite and was not an express command, violation of which would give rise to a judgment of contempt). Because the court indicated that its order that Mother pay attorney fees in the amount of $300 was based upon its contempt finding, we also reverse that portion of the court's order related to attorney fees.\nAlthough Mother does not appear to challenge the portion of the order requiring her to purchase a plane ticket for M.F., we reverse the trial court's contempt finding and award of attorney fees, in light of the facts and circumstances, we cannot say that the court abused its discretion in fashioning a remedy with respect to M.F.'s travel arrangements to ensure that Father was able to exercise parenting time during the winter break of 2010 in ordering that Mother was responsible for the cost of M.F.'s travel on December 27, 2010 and January 2, 2011.\nFor the foregoing reasons, we affirm in part, reverse in part and remand with instructions to vacate that portion of the order entered on December 27, 2010 finding Mother in contempt and ordering Mother to pay attorney fees of $300.\nAffirmed in part, reversed in part, and remanded.\nBAKER, J., concurs.\nKIRSCH, J., dissents without opinion.\nNOTES\n[1] The order is titled \"Order of 6/25/10;\" however, the order was signed on July 6, 2010 and the chronological case summary (the \"CCS\") shows an entry on July 6, 2010 stating \"Order of 6-25-10 submitted and approved.\" See Appellant's Appendix at 3, 9-10.\n[2] The record does not contain a copy of this motion.\n[3] A transcript of the December 16, 2010 hearing is not included in the record. The recited facts related to the hearing and Father's motion to modify support are taken from the CCS.\n[4] The order is titled \"Order of 12/21/10;\" however, the order was signed on December 27, 2010, and the CCS shows an entry on December 30, 2010 stating in part \"Order Signed: 12/27/2010 of 12/21/10.\" See Appellant's Appendix at 5, 7.\n[5] Although Father's motion for citation for contempt stated that the court's order was dated June 28, 2010, the CCS does not show an order entered on June 28, 2010. As previously mentioned, the court's order titled \"Order of 6/25/10\" was signed on July 6, 2010 and the CCS shows entry of the order on July 6, 2010. See Appellant's Appendix at 3, 9-10.\n"} -{"text": " COURT OF APPEALS OF VIRGINIA\n\n\n Present: Chief Judge Decker, Judges Humphreys and O\u2019Brien\nUNPUBLISHED\n\n\n\n CARLOS FRANCISCO CORDON RIVAS, SR.\n MEMORANDUM OPINION*\n v. Record No. 1828-18-4 PER CURIAM\n APRIL 9, 2019\n FAIRFAX COUNTY DEPARTMENT OF\n FAMILY SERVICES\n\n\n FROM THE CIRCUIT COURT OF FAIRFAX COUNTY\n David Bernhard, Judge\n\n (Joseph B. Dailey, on brief), for appellant.\n\n (Elizabeth D. Teare; May Shallal; John B. Jacob, Jr., Guardian ad\n litem for the minor children; Office of the County Attorney, on\n brief), for appellee.\n\n\n Carlos Francisco Cordon Rivas, Sr. (father) appeals the orders terminating his parental rights\n\n to his children and approving the goal of adoption. Father argues that the circuit court erred in\n\n finding that the evidence was sufficient to terminate his parental rights and approve the goal of\n\n adoption because the Fairfax County Department of Family Services (the Department) did not\n\n provide \u201cappropriate services designed to remedy the conditions that led to the children\u2019s placement\n\n or continuation in foster care.\u201d Upon reviewing the record and briefs of the parties, we conclude\n\n that this appeal is without merit. Accordingly, we summarily affirm the decision of the circuit\n\n court. See Rule 5A:27.\n\n\n\n\n *\n Pursuant to Code \u00a7 17.1-413, this opinion is not designated for publication.\n\f BACKGROUND1\n\n \u201cOn appeal from the termination of parental rights, this Court is required to review the\n\nevidence in the light most favorable to the party prevailing in the circuit court.\u201d Yafi v. Stafford\n\nDep\u2019t of Soc. Servs., 69 Va. App. 539, 550-51 (2018) (quoting Thach v. Arlington Cty. Dep\u2019t of\n\nHuman Servs., 63 Va. App. 157, 168 (2014)).\n\n Father and Nelly Margarita Bonillas de Cordon (mother) are the biological parents to four\n\nchildren, C., F., A., and R., who are the subject of this appeal. The Department first became\n\ninvolved with the family in December 2012, when it received a referral alleging mental abuse\n\nand neglect of C. and F.,2 who were six and four years old at the time. The Department received\n\nallegations that mother assaulted father and was arrested. Two days later, mother took C. and F.\n\nand fled to El Salvador. She and the children eventually returned to Virginia.\n\n In February 2014, the Department received a referral alleging mental abuse and neglect\n\nof C. and F. Another domestic violence incident occurred between mother and father in front of\n\nthe children. Neither parent was willing to cooperate with the Department nor participate in\n\nmental health treatment. The Department placed the children in foster care.\n\n In 2015, A. was born, and the Department returned C. and F. to mother and father\u2019s home\n\nfor a trial home visit from October 16, 2015 to November 5, 2015, when it received a referral\n\nalleging physical neglect of C. and F. Mother left the house overnight with the infant, A., and\n\nshe did not bring weather-appropriate clothes, extra diapers, or supplies for A. She left C. and\n\n\n 1\n The record in this case was sealed. Nevertheless, the appeal necessitates unsealing\nrelevant portions of the record to resolve the issues raised by appellant. Evidence and factual\nfindings below that are necessary to address the assignments of error are included in this opinion.\nConsequently, \u201c[t]o the extent that this opinion mentions facts found in the sealed record, we\nunseal only those specific facts, finding them relevant to the decision in this case. The remainder\nof the previously sealed record remains sealed.\u201d Levick v. MacDougall, 294 Va. 283, 288 n.1\n(2017).\n 2\n A. and R. were not born yet.\n -2-\n\fF., who were nine and seven years old at the time, home alone. Mother reported various stories\n\nto the Department as to where she had been when she left C. and F. The social worker noticed\n\nthat mother did not respond appropriately to all of the questions and occasionally would \u201cstare\n\noff in space.\u201d The Department placed all three children in foster care. Father expressed concern\n\nabout mother and her mental health and told the Department that he was not worried about the\n\nchildren because they were in foster care. The Department tried to discuss placement options\n\nwith father, but he refused to make any decisions without mother.\n\n The Department offered individual therapy for mother, father, C., and F., and it also\n\nprovided intensive family preservation services. C. and F. returned home for a trial home visit in\n\nJuly 2016, while A. returned home for a trial home visit in August 2016. The Fairfax County\n\nJuvenile and Domestic Relations District Court (the JDR court) returned the children to their\n\nparents\u2019 custody on September 30, 2016.\n\n In November 2016, the Department received a referral for physical neglect of C., F., and\n\nA. Mother physically assaulted father in front of the children, and she was arrested. Mother was\n\nheld without bond for thirty days, placed on probation for twelve months, and ordered to\n\nparticipate in mental health treatment and anger management services. The Department\n\nencouraged father to obtain a protective order, but father refused to file for a protective order or\n\ncreate a safety plan for the children. The Department offered ongoing services and a referral for\n\nfather and the children to stay at a domestic violence shelter, but he refused all services. The\n\nchildren initially stayed with their former foster parents for a fourteen-day respite.\n\n The Department explored relative placements, including father\u2019s sister, but she had a\n\nsmall home and several of her own children. Mother could not identify any relatives. Father\n\ntold the Department that the only possible relative to take the children would be his sister.\n\n\n\n\n -3-\n\f The Department returned the children to father\u2019s care until mother\u2019s release from\n\nincarceration because he refused to keep mother away from the children. Father expressed that\n\nhis primary goal was to take care of mother, not the children. The children were placed back in\n\nfoster care in December 2016. On January 26, 2017, the JDR court returned the children\u2019s\n\ncustody to their parents.\n\n On July 31, 2017, the Department received a referral alleging physical neglect of C., F.,\n\nand A. At the time, mother was pregnant with R. and stopped taking her medication for her\n\nmental illness. On at least two occasions, mother left the children home alone for extended\n\nperiods of time.\n\n Father contacted the Department and expressed concern that mother was no longer seeing\n\nher therapist. When the social workers interviewed C. and F., they reported that mother had left\n\nthem alone more than once. C. complained that there was no food, other than cookies and ice\n\ncream, in the house. C. and F. described their mother as staring off and not responding to them\n\nwhen she was home. Neither C. nor F. wanted to be alone or go anywhere with mother for fear\n\nof what she might do. Both recalled the domestic violence incident that occurred in November\n\n2016 and that father was bleeding a lot.\n\n When the social workers interviewed mother, she admitted that she stopped taking her\n\nmedications because she was pregnant. She was unable to provide any details to the social\n\nworkers about her days with the children.\n\n Father reported that mother was having an \u201cemotional problem\u201d because of the\n\npregnancy. He stated that mother had been diagnosed with schizophrenia and that the doctor\n\ngave her the option of reducing her medication while she was pregnant. Mother, however,\n\ndecided to stop taking the medication altogether, which father thought was a \u201cbad decision.\u201d\n\nFather expressed concern about leaving the children home alone with mother while he went to\n\n -4-\n\fwork. Father acknowledged that mother left the children home alone for the day while he was at\n\nwork. Father stated that there was no one with whom he could leave the children while he\n\nworked. The Department offered to assist with child care, but it would be a few days before it\n\nbegan. Father stated that he was unable to stay home and watch the children until child care\n\nwould be available. Father also declined the Department\u2019s offer for rental assistance.\n\n Father told the Department that he did not have any other family or friends who could\n\nwatch the children. Father refused to allow the children to be placed in a foster care respite\n\nplacement unless mother agreed. Eventually, mother and father agreed to a respite placement\n\nwith the previous foster care family. The children cheered at the prospect of returning to the\n\nfoster parents\u2019 home. When the social workers took the children to the foster care respite\n\nplacement, A. was not wearing a diaper or underwear, and his shoes and socks were saturated\n\nwith urine. C. and A. were wearing clothes that were too small. Upon arrival at the foster home,\n\nthe children immediately went to bed and fell asleep.\n\n The Department explored placement options for the children, including placing them with\n\nchurch members, but the Department could not locate any viable placements. Therefore, the\n\nDepartment decided to remove the children, instead of continuing with a respite placement,\n\nbecause mother had violated her probation and father was \u201cnot prioritizing the needs of the\n\nchildren.\u201d Mother was arrested for violating her probation and subsequently hospitalized at\n\nWestern State Hospital.\n\n On August 2, 2017, the JDR court entered emergency removal orders and granted\n\ntemporary custody of the children to the Department. At the adjudicatory hearing, the JDR court\n\nfound that the children were abused or neglected and ordered mother to comply with mental\n\nhealth treatment. On October 13, 2017, the JDR court entered the dispositional orders.\n\n\n\n\n -5-\n\f The Department offered numerous services to the parents. The Department had referred\n\nmother and father for psychological evaluations, parent-child evaluations, individual therapy,\n\ncouple\u2019s therapy, and parenting classes. The Department also referred mother for a\n\nneuropsychological evaluation and a psychiatric evaluation.\n\n The Department arranged for supervised visitation for the parents. While mother was\n\nhospitalized, the Department had offered father opportunities to visit with the children twice a\n\nweek, but father stopped visiting for a while when he refused to transport himself to the visits,\n\nafter the Department learned that he had a car and a driver\u2019s license and offered to reimburse him\n\nfor mileage. Father\u2019s visits recommenced later, but he only visited once per week.\n\n In September 2017, the Department moved the children to a pre-adoptive home, where\n\nthe foster parents spoke English and Spanish. The Department offered homebased services to\n\nthe children and the foster family to assist with the transition. The Department also referred C.\n\nand F. to therapy, as they had been experiencing anxiety with their situation.\n\n In January 2018, the Department filed petitions to terminate mother and father\u2019s parental\n\nrights to C., F., and A. On February 20, 2018, the JDR court entered orders terminating mother\n\nand father\u2019s parental rights to C., F., and A. and approved the goal of adoption. Mother and\n\nfather appealed the orders to the circuit court.\n\n Meanwhile, the Department contacted father prior to R.\u2019s birth to determine his plans for\n\nthe child, and at first, father refused to speak with the Department. While mother was\n\nhospitalized, she gave birth to R. in December 2017. Once R. was ready to be discharged from\n\nthe hospital, the Department placed R. in the same foster home as C., F., and A. The Department\n\nadvised father about the upcoming hearing date and family partnership meeting for R., but father\n\nsaid that he was too busy at work and could not come. Father requested a paternity test, which\n\nrevealed that he was R.\u2019s biological father. Father also told the Department that he would be\n\n -6-\n\funable to care for R. for six weeks, which was the earliest age that R. could attend day care.\n\nFather attended few visitations with R. The JDR court adjudicated R. to be at risk of abuse and\n\nneglect and entered a dispositional order on February 9, 2018.\n\n When mother was released from incarceration, mother met with the social worker\n\nregarding the children. The Department arranged for mother to visit with the children twice per\n\nweek, and her visits were separate from father\u2019s visits. Mother also had an additional visit with\n\nR. during the week, but that was discontinued after she abruptly left for El Salvador in April\n\n2018.\n\n On May 18, 2018, the JDR court terminated mother and father\u2019s parental rights to R. and\n\napproved the goal of adoption. Mother and father appealed to the circuit court.\n\n On May 30, 2018, the parties appeared before the circuit court to be heard on the appeals\n\nregarding C., F., and A. The Department presented evidence that mother participated in a\n\nparenting class, couple\u2019s counseling, individual counseling, and homebased services. Likewise,\n\nfather participated in parenting classes, couple\u2019s counseling, and two rounds of individual\n\ntherapy.\n\n The Department provided evidence concerning the parents\u2019 visits with the children.\n\nThroughout the history of this case, mother did not regularly visit with the children, and when\n\nshe did, she was \u201chesitant\u201d with them. In February and March 2018, mother still required\n\nprompts from the supervisor as to how to interact with the children and detect their needs.\n\nMother never could articulate the children\u2019s needs or why they were in foster care. In May 2018,\n\nfather\u2019s visits were still chaotic. He focused too much attention on one child and not enough\n\nattention on the other three children. Father told the social worker that he intended to be with\n\nmother and hoped to have the children come home. His plan continued to be that mother would\n\ncare for the children, while he was at work. Neither parent had progressed to having community\n\n -7-\n\fvisits or unsupervised visits. Also, neither parent had demonstrated that they had learned how to\n\napply what they had learned from the various services provided.\n\n The Department presented evidence about mother\u2019s mental health. Dr. Nesly Hneich,\n\nmother\u2019s psychiatrist, testified that she had treated mother between January and August 2017,\n\nuntil mother was hospitalized at Western State Hospital. Mother attended six out of thirteen\n\nvisits. Mother\u2019s diagnosis was schizoaffective disorder, and Dr. Hneich provided psychiatric\n\nservices, as well as medication management. Mother refused to take an injectable medication\n\nthat Dr. Hneich originally suggested, but she did initially agree to a low dose of pills. Dr. Hneich\n\nfound that mother had poor insight into her mental condition and displayed symptoms of flat\n\naffect and \u201cbizarre behaviors,\u201d including erratic and disorganized behaviors, as well as\n\nresponding to internal stimuli. Dr. Hneich was concerned that when mother was pregnant with\n\nR., she did not receive prenatal care and had stopped her psychiatric medications. Dr. Hneich\n\nexplained to mother that there was another medication that was safe to use during pregnancy, but\n\nmother refused it. Dr. Hneich also expressed concern that a patient who is violent toward one\n\nmember of the family could be violent with other members of the family. Dr. Hneich testified\n\nthat she did not know whether mother was ever going to be capable of handling the stressors\n\ninvolved with parenting one child, much less four children.\n\n At the end of the day on May 30, 2018, the parties had not presented all of their evidence,\n\nso the matter was continued to August 22, 2018. Between the May 30, 2018 hearing and the\n\nAugust 22, 2018 hearing, R.\u2019s appeal came to the circuit court. The circuit court consolidated\n\nR.\u2019s case with C., F., and A.\u2019s cases.\n\n On August 22, 2018, the Department continued to present its evidence. Amy Anderson, a\n\ncounselor, testified that she had been working with F. off and on since February 2015, and she\n\nalso counseled C. and F. as siblings. Anderson worked with F. in play therapy, where F.\n\n -8-\n\fdisplayed feelings of instability and fear that eventually improved over time spent in therapy.\n\nAnderson diagnosed F. with reactive attachment disorder and unspecified anxiety disorder.\n\nAnderson determined that C.\u2019s prognosis was not as good as F.\u2019s prognosis and that C. needed \u201ca\n\nstable home with adults who . . . [were] able to provide adequate and consistent care . . . .\u201d\n\nAnderson also opined that all of the children needed \u201ctwo parents who [were] fully committed to\n\ncaring for them\u201d and who had \u201cvery good management skills.\u201d\n\n Next, the Department offered the testimony of Damaris Cullerton, who had supervised\n\nmother and father\u2019s visits with the children since 2017. Cullerton explained that she had to set\n\nguidelines because initially, father brought too many sweets for the children. Cullerton also had\n\nto discipline the children if C. and F. acted inappropriately, because father would not always\n\nintervene. Father did not have any structure or rules for the children, and he had difficulty\n\nhandling all of the children at one time. Father was not comfortable with R., and Cullerton often\n\nhad to take care of R., including changing his diaper, feeding him, and soothing him. Cullerton\n\nhad to remind father that she was there to help him and not be a nanny. Although father was\n\nslow to respond to Cullerton\u2019s teaching, he did cooperate and was receptive to her instructions.\n\n Mother, on the other hand, was resistant to Cullerton\u2019s instruction and advice. During the\n\nvisits with all four children, mother\u2019s primary focus was on R. Cullerton noticed that A. never\n\nshowed any affection toward mother or greeted her.\n\n During the eighteen months that she supervised the visits, Cullerton did not notice much\n\nimprovement in the parents\u2019 skills. Cullerton remained uncomfortable with the prospect of the\n\nparents having unsupervised visits.\n\n The Department then presented evidence from Dr. William Ling, who had conducted\n\nseveral parent-child assessments with father and mother since 2014, as well as psychological\n\nevaluations of father, C., and F. Dr. Ling found that father \u201chad tremendous struggle being able\n\n -9-\n\fto balance his need to work a large number of hours in order to be able to financially provide for\n\nthe family with the demand that would occur when his wife became incapacitated or unavailable\n\nto parent.\u201d Dr. Ling also found that father had \u201cstruggled to be able to set appropriate\n\nboundaries with his wife\u201d because of her mental illness and refusal to take medication at times.\n\nHe had difficulties \u201cadequately provid[ing] for the safety of the children when she [became]\n\ndisorganized.\u201d Dr. Ling saw father several times between 2014 and 2018, and he found father to\n\nbe \u201cremarkably stable from a psychological perspective and from a parenting perspective.\u201d\n\nDr. Ling concluded that while father \u201chas the appropriate capacities, he\u2019s been unable to\n\nimplement them to a satisfactory degree.\u201d Father has not shown that he \u201ccan assume direct\n\nresponsibility for the children as a single parent.\u201d Dr. Ling opined that father had prioritized his\n\njob first and foremost, and then secondarily, his wife, and lastly, his children. Dr. Ling\n\nexpressed concern that father could be too permissive and would not be able to guide and\n\nsupervise the children as they grew older.\n\n Dr. Ling found that mother had a \u201cbasic set of parenting skills that were appropriate, but\n\nher ability to apply those skills was greatly dependent on what her psychological or psychiatric\n\nstatus was from moment to moment.\u201d Dr. Ling noted that \u201c[t]here were periods of time where\n\nshe was clearly and significantly compromised in her functioning, not just as an individual but\n\nalso her ability to parent her children.\u201d Dr. Ling expressed concern about mother\u2019s ability to stay\n\non her medication and how her mental health had affected the children.\n\n Dr. Ling recommended that the level of supervision not be reduced until mother and\n\nfather demonstrated at least two years of stability and an ability to handle one child.\n\n At the conclusion of the evidence presented on August 22, 2018, the circuit court\n\ncontinued the case to September 6, 2018, for the final day of evidence and argument. On\n\n\n\n\n - 10 -\n\fSeptember 6, 2018, father and mother moved to strike the evidence, which the circuit court\n\ndenied.\n\n Father did not present any evidence, but mother testified about her situation and that she\n\nwanted the children to come home. She verified that she regularly had been receiving her\n\nmedication via injections since November 2017, but admitted that she was not participating in\n\ncounseling. On cross-examination, mother acknowledged that she had missed her injections\n\nwhen she went to El Salvador.\n\n Mother testified about the children and her mental health. When asked if the children had\n\nany special needs, mother replied, \u201cThey need a lot of love.\u201d Mother testified that she was\n\ncapable of taking care of the children and knew that she needed to take her medication. Mother\n\nexplained that the medication helped to keep her calm and reduced her urges to leave the house\n\nor be violent. However, when asked, she could not identify her illness. She testified that if the\n\nchildren returned home and she became stressed, she would talk to father or take a walk \u201cto get\n\naway from the stress.\u201d\n\n After hearing the parties\u2019 arguments, the circuit court found that it was in the best\n\ninterests of the children to terminate mother and father\u2019s parental rights under Code\n\n\u00a7 16.1-283(B) and (C)(2) and approve the goal of adoption. The circuit court entered the final\n\norders, and mother and father timely noted their appeals.\n\n ANALYSIS\n\n \u201cOn review, \u2018[a] trial court is presumed to have thoroughly weighed all the evidence,\n\nconsidered the statutory requirements, and made its determination based on the child\u2019s best\n\ninterests.\u2019\u201d Castillo v. Loudoun Cty. Dep\u2019t of Family Servs., 68 Va. App. 547, 558 (2018)\n\n(quoting Logan v. Fairfax Cty. Dep\u2019t of Human Dev., 13 Va. App. 123, 128 (1991)). \u201cWhere, as\n\nhere, the court hears the evidence ore tenus, its finding is entitled to great weight and will not be\n\n - 11 -\n\fdisturbed on appeal unless plainly wrong or without evidence to support it.\u201d Fauquier Cty. Dep\u2019t\n\nof Soc. Servs. v. Ridgeway, 59 Va. App. 185, 190 (2011) (quoting Martin v. Pittsylvania Cty.\n\nDep\u2019t of Soc. Servs., 3 Va. App. 15, 20 (1986)).\n\n Father argues that the circuit court erred by terminating his parental rights and approving\n\nthe goal of adoption because the Department failed to provide father with reasonable and\n\nappropriate services to remedy the conditions that led to, and required continuation of, the\n\nchildren\u2019s placement in foster care. Father contends that the Department did not provide any\n\nservices to father to reunify the family after it removed the children in 2017.\n\n \u201c\u2018Reasonable and appropriate\u2019 efforts can only be judged with reference to the\n\ncircumstances of a particular case. Thus, a court must determine what constitutes reasonable and\n\nappropriate efforts given the facts before the court.\u201d Harrison v. Tazewell Cty. Dep\u2019t of Soc.\n\nServs., 42 Va. App. 149, 163 (2004) (quoting Ferguson v. Stafford Cty. Dep\u2019t of Soc. Servs., 14\n\nVa. App. 333, 338 (1992)). The Department \u201cis not required to force its services upon an\n\nunwilling or disinterested parent.\u201d Tackett v. Arlington Cty. Dep\u2019t of Human Servs., 62\n\nVa. App. 296, 323 (2013) (quoting Harris v. Lynchburg Div. of Soc. Servs., 223 Va. 235, 243\n\n(1982)); see also Logan, 13 Va. App. at 130.\n\n Since 2014, the Department had provided this family numerous services. Over the years,\n\nthe Department offered referrals and services for mental health treatment, individual counseling,\n\ncouple\u2019s counseling, parenting classes, intensive family prevention services, psychiatric services,\n\nmedication management, parent-child assessments, and psychological evaluations. In 2016, the\n\nDepartment offered ongoing services and a referral for father and the children to go to a domestic\n\nviolence shelter, but father refused all services. In 2017, the Department had offered father\n\nassistance with day care and rent, but father refused that assistance.\n\n\n\n\n - 12 -\n\f The Department also provided supervised visitation opportunities for mother and father.\n\nFather was even offered additional visitation consisting of two days per week, instead of one day\n\nper week, in 2017 and 2018, but he stopped visiting altogether for a while when he refused to\n\ntransport himself to visitations. Then, father recommenced visitation but only once per week.\n\n At the time of the circuit court hearing, the Department had placed C. and F. in foster\n\ncare three times, and A. in foster care twice, in the past four years. Furthermore, R. had been in\n\nfoster care since his birth. Despite all of the services provided to father over the years, father did\n\nnot demonstrate that he could apply what he had learned. He consistently stated that he placed\n\nmother\u2019s needs over the children\u2019s needs. Father never progressed to having unsupervised or\n\ncommunity visits. In 2018, father still relied on mother to do everything during the visits, and he\n\n\u201cscaled back\u201d his role with the children. Dr. Ling concluded that while father \u201chas the\n\nappropriate capacities, he\u2019s been unable to implement them to a satisfactory degree.\u201d\n\n Father had not substantially corrected the conditions that led to the findings of neglect\n\nand abuse because father and mother continued to live together, mother had a serious mental\n\nillness for which she did not reliably take medication, and father continued to place mother\u2019s\n\nneeds above the children\u2019s needs. See Code \u00a7 16.1-283(B). Father was unable to remedy those\n\nconditions that led to and required continued foster care. See Code \u00a7 16.1-283(C)(2). \u201cIt is\n\nclearly not in the best interests of a child to spend a lengthy period of time waiting to find out\n\nwhen, or even if, a parent will be capable of resuming his [or her] responsibilities.\u201d Tackett, 62\n\nVa. App. at 322 (quoting Kaywood v. Halifax Cty. Dep\u2019t of Soc. Servs., 10 Va. App. 535, 540\n\n(1990)).\n\n Considering the circumstances of this case, the circuit court did not err in holding that the\n\nDepartment provided reasonable and appropriate services to the parents to help remedy the\n\n\n\n\n - 13 -\n\fconditions that led to, and required the continuation of, foster care. The circuit court did not err\n\nin terminating father\u2019s parental rights and approving the goal of adoption.\n\n CONCLUSION\n\n For the foregoing reasons, the circuit court\u2019s ruling is summarily affirmed. Rule 5A:27.\n\n Affirmed.\n\n\n\n\n - 14 -\n\f"} -{"text": "\n122 F.2d 848 (1941)\nLOGAN COAL & TIMBER ASS'N\nv.\nHELVERING, Com'r of Internal Revenue.\nNo. 7642.\nCircuit Court of Appeals, Third Circuit.\nSeptember 24, 1941.\n*849 Charles S. Jacobs and E. Spencer Miller, both of Philadelphia, Pa. (William R. Spofford, of Philadelphia, Pa., and Ballard, Spahr, Andrews & Ingersoll, of Philadelphia, Pa., on the brief), for petitioner.\nA. F. Prescott, Sp. Asst. to Atty. Gen. (Samuel O Clark, Jr., Asst. Atty. Gen., and Sewall Key, Sp. Asst. to Atty. Gen., on the brief), for respondent.\nBefore BIGGS, MARIS, and JONES, Circuit Judges.\nMARIS, Circuit Judge.\nThis case raises the question whether the income of the taxpayer for the years 1934, 1935, 1936 and 1937, upon which the Commissioner seeks to impose a surtax as undistributed income of a personal holding company, constituted rents or mineral royalties. If it constituted rents it was not subject to the surtax by virtue of the express provisions of Section 351 of the Revenue Act of 1934, 26 U.S.C.A.Int.Rev. Acts, page 757, and Sections 351, 352 and 353 of the Revenue Act of 1936, as amended by the Revenue Act of 1937, 26 U.S.C.A. Int.Rev. Acts, pages 936, 938, 939, since it comprised more than 50% of the taxpayer's gross income for each of the years in question. If on the other hand it constituted mineral royalties it was subject to the surtax under the language of both acts, the taxpayer's deductions under Section 353(h) not constituting 15% of its gross income. The Board of Tax Appeals held the income to be mineral royalties and therefore taxable. The taxpayer thereupon brought the case here for review.\nThe facts are fully set out in the findings and opinion of the Board (42 B.T.A. 529) and need not be detailed here. Suffice it to say that the income in question constituted monthly payments made to the taxpayer by the lessees of its coal lands, which payments, in accordance with the terms of the leases, were computed on a tonnage basis for the coal mined during the preceding month. While the leases provided for certain minimum annual royalties all payments in excess of the amounts due for coal actually mined might be applied to coal mined in subsequent years. The leases contained the usual provisions authorizing the lessees to mine coal, to manufacture coke and other products of coal, and to conduct a general mercantile business on the leased land, with the privilege of using the surface of the land and so much of the timber, stone, sand, clay and water found thereon as might be necessary in connection with the operations contemplated by the leases. The lessees were also given the right to transport through and under the leased land coal of the lessees *850 mined on adjacent properties. The lessees carried on coal mining operations on the leased lands as contemplated and in connection therewith also transported through the leased lands coal from adjoining mines.\nWe think that the Board of Tax Appeals was right in holding the income in question to be mineral royalties rather than rents. While the word \"rent\" is often used, as it was in the leases here involved, in a sense broad enough to include such payments, it must be remembered that we are here dealing with a statutory provision which differentiates rents from royalties. We must, therefore, look for the distinction which Congress intended to make between the two words. That distinction is, we think, the commonly accepted one that rent is a compensation for the right to use property which is fixed and certain in amount and payable periodically over a fixed period regardless of the extent of the use of the property,[1] while royalty is a compensation for the use of property which is based as to amount entirely upon the use actually made of the property.[2] As applied to coal mining property the difference between leases providing for the two types of compensation was well stated in Vandalia Coal Co. v. Underwood, 60 Ind.App. 675, 111 N.E. 329, 330, as follows: \"The coal industry, however, seems to recognize two general classes of mining leases: First, the lease which requires the lessee to pay the lessor a certain amount of money at stated intervals as a `dead rent,' irrespective of the productiveness of the mine; second, the payment of royalty on the quantity of mineral mined, with the requirement that a stipulated amount be mined within a stated period of time, or, upon failure to do so, to pay a certain amount of money equal to the income that would have been received by the landowner had the mineral been mined.\" See also Raynolds v. Hanna, 6 Cir., 55 F. 783, at page 800, in which Circuit Judge Jackson said that \"`royalty' * * * is perhaps the most appropriate word where rental is based upon the quantity of coal or other mineral that is or may be taken from the mine.\"\nStratton's Independence v. Howbert, 231 U.S. 399, 34 S.Ct. 136, 58 L.Ed. 285; Von Baumbach v. Sargent Land Co., 242 U.S. 503, 37 S.Ct. 201, 61 L.Ed. 460; and United States v. Biwabik Mining Co., 247 U.S. 116, 38 S.Ct. 462, 62 L.Ed. 1017, cited by the taxpayer, are not authority for its contention that its income constituted rents and not royalties. As pointed out in Burnet v. Harmel, 287 U.S. 103, 53 S.Ct. 74, 77 L.Ed. 199, they dealt with the question whether payments of the character involved here were income to the lessor or a return of capital to him. In determining that question it made no difference whether they were considered as rents or as royalties, since either would be income to the lessor.\nThe taxpayer points out that in addition to the right to mine coal the leases gave its lessees the right to use the surface of the leased lands in connection with their mining operations and to transport other coal through and under the leased lands. It urges that a portion, at least, of the income received from the lessees must be held to be rental for these uses. No separate rental was stipulated for these rights, however, and they, therefore, constituted merely an additional consideration for the payment by the lessees of the royalties for the coal mined which, for the reasons we have indicated, must be held to be royalties and not rents.\nWe are not impressed with the taxpayer's argument that its case does not come within the spirit of those provisions of the Revenue Acts which levy the surtax upon the undistributed net income of personal holding companies. The test laid down by Section 353(h) of the Revenue Act of 1936, as amended, for a corporation in the situation of the taxpayer is whether its allowable expense deductions, other than compensation for personal services rendered by shareholders, constituted at least 15% of its gross income. If so it is to be regarded as an operating rather than a holding company. The taxpayer was unable to meet this test.\nThe taxpayer having failed to file a return as a personal holding company on *851 Form 1120H as required by Article 351(8) of Treasury Regulations 86 and 94, the Commissioner imposed upon it the penalty of 25% provided for by Section 291 of the Revenue Acts of 1934 and 1936, 26 U. S.C.A.Int.Rev. Code, \u00a7 291. The taxpayer urges that since it acted in good faith it should not be subjected to this penalty. The penalty is made applicable to personal holding companies by Section 351(c) of both acts, which section also supports the regulations requiring the return. Under the law and regulations the imposition of the penalty was mandatory and the Board of Tax Appeals was right in so deciding. O'Sullivan Rubber Co. v. Commissioner, 2 Cir., 120 F.2d 845. Our recent case of Girard Investment Co. v. Commissioner, 3 Cir., 122 F.2d 843, is not authority to the contrary, since in that case the taxpayer did file a return on Form 1120H which, although late, was filed before the penalty was imposed.\nThe decision of the Board of Tax Appeals is affirmed.\nNOTES\n[1] Western Union Tel. Co. v. American Bell Tel. Co., 1 Cir., 125 F. 342, 348; Miller v. Carr, 137 Fla. 114, 188 So. 103, 106; National Subway Co. v. City of St. Louis, 169 Mo. 319, 69 S.W. 290, 294.\n[2] Western Union Tel. Co. v. American Bell Tel. Co., supra; Miller v. Carr, supra; Riley Stoker Corp. v. Jeffrey Mfg. Co., 62 Ohio App. 199, 23 N.E.2d 519. 521.\n"} -{"text": "\n526 F.Supp.2d 968 (2007)\nARIZONA CONTRACTORS ASSOCIATION, INC., an Arizona nonprofit corporation; Arizona Employers for Immigration Reform, Inc., an Arizona non-profit corporation; Chamber of Commerce of the United. States of America, a Washington D.C. non-profit corporation; Arizona Chamber of Commerce, an Arizona non-profit corporation; Arizona Hispanic Chamber of Commerce, Inc., an Arizona nonprofit corporation; Arizona Farm Bureau Federation, an Arizona non-profit corporation; Arizona Restaurant and Hospitality Association, an Arizona non-profit corporation; Associated Minority Contractors of America, an Arizona non-profit limited liability company; Arizona Roofing Contractors Association, an Arizona non-profit corporation; National Roofing Contractors' Association, an Illinois not-for-profit *969 corporation; Wake Up Arizona! Inc., an Arizona non-profit corporation; and Arizona Landscape Contractors Association, Inc., an Arizona non-profit corporation, Plaintiffs,\nv.\nJanet NAPOLITANO, Governor of the State of Arizona; Terry Goddard, Attorney General of the State of Arizona, Defendants.\nChicanos Por La Causa, Inc.; and Somos America, Plaintiffs,\nv.\nJanet Napolitano, in her official capacity as Governor of the State of Arizona; Terry Goddard, in his official capacity as Attorney General of the State of Arizona; and Gale Garriott, in his official capacity as the Director of the Arizona Department of Revenue, Defendants.\nNos. CV07-1355-PHX-NVW, CV07-1684-PHX-NVW.\nUnited States District Court, D. Arizona.\nDecember 7, 2007.\nAs Amended December 10, 2007.\n*970 David A. Selden, Heidi Nunn-Gilman, Julie A. Pace, Ballard Spahr Andrews & Ingersoll LLP, Daniel Joseph Pochoda, ACLU, Phoenix, AZ, Louis R. Moffa, Jr., Ballard Spahr Andrews & Ingersoll LLC, Voorhees, NJ, Cynthia Ann Valenzuela, *971 Kristina Michelle Campbell, MALDEF, Karen Cassandra Tumlin, Linton Joaquin, Monica Teresa Guizar, National Immigration. Law Center, Los Angeles, CA, Jennifer C. Chang, Lucas Guttentag, ACLU Foundation Immigrants Rights Project, Jonathan Weissglass, Stephen Paul Berzon, Altshuler Berzon LLP, Omar. C. Jadwat, ACLU, Immigrants Rights Project, New York, NY, for Plaintiffs.\nChristopher Arthur Munns, Mary Ruth O'Grady, Office of the Attorney General, Gregg Jay Tucek, Sherman & Howard LLC, Phoenix, AZ, Christina B. LaBrie, Fragomen Del Rey Bernsen & Loewy LLP, New York, NY, Patrick P. Shen, Fragomen Del Rey Bernsen & Loewy LLP, Washington, DC, for Defendants.\n\nFINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER\nNEIL V. WAKE, District Judge.\nPlaintiffs challenge the Legal Arizona Workers Act, A.R.S. \u00a7\u00a7 23-211 through 214, enacted July 2, 2007, and effective January 1, 2008. 2007 Ariz. Sess. Laws, Ch. 279. The Act provides the superior courts of Arizona with the power to suspend or revoke the business licenses of employers who intentionally or knowingly employ an unauthorized alien. By agreement of the parties, the two cases were consolidated and accelerated for trial on November 14, 2007, on stipulated facts and written evidence. Defendants' motions to dismiss were deferred to the trial. This order states findings of fact and conclusions of law pursuant to. Rule 52(a), Fed. R.Civ.P.\nThere is no justiciable case or controversy against these Defendants. Plaintiffs do not intentionally or knowingly employ any unauthorized aliens, and they have no plans to. They bear no imminent threat of enforcement. Only county attorneys are authorized to enforce the Act. These Defendants\u0097 the Governor, the Attorney General, and the Director of the Department of Revenue\u0097have only investigatory or informational authority under the Act, and they have not made even empty threats to prosecute anyone.\nVerifying the employment eligibility of new hires through the federal E-Verify program has some costs for employers. The federal government makes. E-Verify available, but the State mandates its use. Although the State's mandate to use Verify has no direct enforcement or enforcer, the Act indirectly forces employers to obtain powerful evidence of workers' authorization from the federal government. The plausible consequence for refusing to use E-Verify may be that employers also cannot prove their good faith compliance with the 1-9 process because the E-Verify system would have exposed the employee's lack of authorization. An employer who foregoes the mandated E-Verify evidence may be left with little or no evidence that matters. For this reason, participation in E-Verify is not a free choice even though there is only a general threat of enforcement proceedings, and even though Plaintiffs' failure to participate in E-Verify does not increase appreciably the likelihood of enforcement proceedings against them. The Act forces them to enroll in E-Verify because if they do not enroll now they face near certain and intolerable harm in the event of a future enforcement proceeding.\nYet the court cannot redress that internal coercion with a judgment against these Defendants. The State officers do not cause the intolerable risk that Plaintiffs may have no defense if they forego the Verify evidence. That risk finds its sting only at the hands of a county attorney, the only official empowered to bring a future enforcement proceeding.\nThis action must be dismissed without prejudice for lack of subject matter jurisdiction, *972 there being no justiciable case or controversy against the Defendants.\nI. Employer Sanctions in the Federal Government's Immigration Reform and Control Act and E-Verify\nA. Summary of the IRCA\nFederal law first created sanctions for employers of unauthorized aliens in the Immigration Reform and Control Act (IRCA), enacted in 1986. Before then, federal law did not displace State authority to enact and enforce sanctions against employers of unauthorized aliens except to the extent the State law conflicted with federal enactments. De Canal v. Bica, 424 U.S. 351, 96 S.Ct. 933, 47 L.Ed.2d 43 (1976). The central provisions of IRCA are codified at 8 U.S.C. \u00a7\u00a7 1324a through 1324c. With certain exclusions, it is unlawful to hire or continue to employ a person known to be an unauthorized alien. 8 U.S.C. \u00a7 1324a(a)(1)(A) and (a)(2). An unauthorized alien is one who is not \"either (a) an alien, lawfully admitted for permanent residence, or (B) authorized to be so employed by this Act [IRCA] or by the Attorney General.\" \u00a7 1324a(h)(3).\nThe IRCA also requires employees and employers to comply with a paper-based employment eligibility verification system set out in 8 U.S.C. \u00a7 1324a(b), known as the 19 system. Employees must swear to their authority to work, and employers must examine certain wide classes of identification documents recorded on Form I-9. An identification document is sufficient if it \"reasonably appears on its face to be genuine.\" \u00a7 1324a(b)(1)(A). Employers must keep records of compliance with the 1-9 system. \u00a7 1324a(b)(1)(3). An employer's good faith attempt to comply suffices notwithstanding a technical or procedural failure unless the employer has engaged in a pattern or practice of violations or fails to correct an error after the government points it out. \u00a7 1324a(b)(6).\nThe IRCA entrusts its enforcement to the Attorney General with hearings before specially selected administrative law judges, subject to federal judicial review. \u00a7 1324a(e). The government must prove by a preponderance of the evidence that the employer knowingly hired or retained an unauthorized alien, but it is \"an affirmative defense\" that the employer \"complied in good faith\" with the 1-9 system mandated by \u00a7 1324a(b), \u00a7 1324a(a)(3) and 1324a(e)(3)(C). Remedies include cease and desist orders and civil fines from $250 to $2,000 for a first order, $2,000 to $5,000 for a second order, and $3,000 to $10,000 for a further order. Other remedial action may be ordered. \u00a7 1324a(e)(4). The Attorney General may seek enforcement of orders in a federal district court. \u00a7 1324a(e)(9). For a pattern or practice of violations a criminal fine up to $3,000 and imprisonment up to six months can be imposed. The Attorney General may also seek civil injunctive relief. \u00a7 1324a(f).\nCentral to Plaintiffs' challenges in this case is the preemption clause of 8 U.S.C. \u00a7 1324a(h)(2), which provides, \"The provisions of this section [8 U.S.C. \u00a7 1324a] preempt any State or local law imposing civil or criminal sanctions (other than through licensing or similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens.\"\nOther sections prohibit document fraud and employment discrimination based on national origin or legal immigration status, with enforcement procedures, tribunals, and remedies. 8 U.S.C. \u00a7 1324b and 1324c. There are other provisions that need not be reviewed to understand the justiciability issues in this case.\nB. Failure of the 1-9 System\nAs the Congressional Research Service Report to Congress dated April 20, 2007, *973 concludes, \"There is general agreement that the I-9 process has been undermined by fraud\u0097both document fraud, in which employees present counterfeit or invalid documents, and identity fraud, in which employees present valid documents issued to other individuals.\" (Joint Statement of Facts, Doc. # 72 (Facts), Ex. 15 at 3.) The result of the failure of the 1-9 system and other causes is that \"an estimated 7.2 million unauthorized workers were in the U.S. civilian labor force in March 2005, representing about 5% of the labor force.\" (Id. at 1.) The unauthorized resident alien population \"has grown at an average annual rate of more than 500,000 per year.\" (Id.) As the director of immigration policy for Plaintiff U.S. Chamber of Commerce testified before Congress last June, \"Current immigration laws are severely flawed and have failed to curb the flow of undocumented workers into the U.S.\" (Facts, Ex 22J at 3.)\nC. E-Verify\nBuilding on the 1-9 system, the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, Pub.L. No. 104-208, \u00a7 \u00a7 401-404, 110 Stat. 3009, 3009-655 to 3009-666, directed the Attorney General to conduct three pilot programs for employment eligibility confirmation, one of which is still in operation, formerly known as the Basic Pilot and now known as Verify. (Facts, Ex. 8 at 1.) Originally limited to five states, it was expanded nationwide in 2004. Federal law does not mandate E-Verify participation except for some government contractors and violators of immigration laws. (Facts, Ex. 9 at 1.) E-Verify is an Internet-based system that electronically compares information submitted by the employee on Form I-9 with the records maintained by the Social Security Administration (SSA) and the Department of Homeland Security (DHS).\nEmployers participating in E-Verify sign a Memorandum of Understanding (MOU) with SSA and DHS that sets out terms of use. (Facts, Ex. 7.) After hiring a new employee the employer queries E-Verify, which then compares the information to SSA's primary database. If the information matches, the employer is immediately notified that the employee is verified. If the submitted information is inconsistent with SSA data, the employer is notified of a tentative nonconfirmation within three federal work days, but usually immediately. (Facts, Ex. 7, Art. II \u00a7 A \u00b6 4; Ex. 11 at 2.)\nIf the submitted information and SSA data are consistent for noncitizens but the SSA database does not permit confirmation of work-authorization, the submitted information is next compared to the DHS's data, usually at the U.S. Citizenship and Immigration Services (CIS). If the CIS automated match is adequate to establish work-authorization, the employee is verified immediately. If not, a CIS field office records expert checks other DHS information. If the field worker is able to verify work-authorization, the employer is typically notified within one day of case submission. (Facts, Ex. 11 at 2.)\nWhen neither the automated SSA and DHS checks nor the check by the immigration status verifier can confirm an employee's work status, the system issues the employer a tentative nonconfirmation. The employer must notify the employee, who has eight days to contest the finding by contacting SSA or CIS to resolve any inaccuracies in their records. (Facts, Ex. 13, App. C at C-2.) The MOU gives detailed steps to assist the employee in contesting a tentative nonconfirmation. (Facts, Ex. 7, Art. III \u00a7 B.) The contesting process is normally limited to ten federal work days, but may be extended. No adverse action may be taken against the employee in the meantime. Employees who do not contest the tentative nonconfirmation *974 receive a final nonconfirmation finding. If contested, CIS informs the employer of the employee's final work-authorization status. After ten days, employers must either immediately terminate employment or notify DHS of the continued employment of workers who have not successfully contested the tentative nonconfirmation and who E-Verify has found not to be work-authorized. (Facts Ex. 7, Art. II \u00a7 C \u00b6 6; Ex. 10 at 7; Ex. 11 at 2-3.)\nAbout 92% of queries confirm work authorization within seconds. About 7% cannot be confirmed immediately by SSA, and about 1% cannot be confirmed immediately by DHS. Resolving the nonconfirmations can take several days, or in a few cases even weeks. (Facts, Ex. 22B at 3.)\nOther provisions are aimed at protecting privacy and preventing misuse of the Verify system. Participating employers must verify all new hires, but only new hires. The employer agrees in the MOU to grant SSA and DHS access to the employer's E-Verify and employment related documents and to its employees for interviews. \"Failure to comply with the terms of this paragraph may lead DHS to terminate the Employer's access to E-Verify.\" (Facts, Ex. 7, Art. II \u00a7 C \u00b6 15.)\nEmployers are still subject to the Form 1-9 obligations, but some are modified by the E-Verify MOU. The acceptable employee identifying documents are narrowed. The employer is subject to a civil money penalty for failure to notify DHS if it continues to employ an individual after receiving a final nonconfirmation. Of particular importance to this case, \"a rebuttable presumption is established that the Employer has not violated [8 U.S.C.. \u00a7 1324a(a)(1)(A), the prohibition of hiring an unauthorized alien] . . . if it obtains confirmation of the identity and employment eligibility of the individual in compliance with the terms and conditions of E-Verify.\" Conversely, \"the Employer is subject to a rebuttable presumption that it has knowingly employed an unauthorized alien in violation of [8 U.S.C. \u00a7 1324a(a)(1)(A)] if the Employer continues to employ any employee after receiving a final nonconfirmation.\" No one \"participating in E-Verify is civilly or criminally liable under any law for any action taken in good faith on information provided through the confirmation system.\" (Id. at Art. II \u00a7 C \u00b6 6.)\nAccording to the U.S. Citizenship and Immigration Services, \"E-Verify is currently the best means available for employers to verify electronically the employment eligibility of their newly hired employees: E-Verify virtually eliminates Social Security mismatch letters, improves the accuracy of wage and tax reporting, protects jobs for authorized U.S. workers, and helps U.S. employers maintain a legal workforce.\" (Facts, Ex. 9 at 1.) A 2002 survey and evaluation observed that \"an overwhelming majority of employers participating found [E-Verify] to be an effective and reliable tool for employment verification.\" (Facts, Ex. 10 at v.) After the program was implemented, 60% of employers found it \"not at all burdensome.\" Ninety-three percent reported that it was easier than the I-9 process, and 92% reported that it did not overburden their staff. (Id. at 33.) In a 2006 SSA survey of fifty users with a large volume of verification requests, 100% rated the program \"Excellent,\" \"Very Good,\" or \"Good.\" (Facts, Ex. 13 at 4.) A majority of employers in the 2002 survey spent under $500 for E-Verify start-up costs and under $500 annually for operating costs. Annual operating costs averaged $1,800, with about 85% spending less than $3,500. (Facts, Ex. 10 at vi., 34.)\nThe same study found that less than one-tenth of 1% of employment verification *975 attempts resulted in a finding of \"unauthorized.\" It estimated that 10% of all cases submitted were unauthorized workers, but very few of them contested the tentative nonconfirmation. (Id. at vi.) E-Verify is not fraud proof and was not designed to detect identity fraud. (Facts, Ex. 15 at 6.) However, a piloting photograph screening tool, whereby an employer can more easily identify identity fraud, has been extended to all users. (Facts, Ex. 22B at 3-4.)\nII. The Legal Arizona. Workers Act\nThe Legal Arizona. Workers Act (\"the Act\"), A.R.S. \u00a7 23-211 through 23-214 (Supp.2007), is a conscious State attempt to impose sanctions by \"licensing and similar laws\" upon those who employ unauthorized aliens, as expressly permitted in 8 U.S.C. \u00a7 1324a(h)(2). A principal issue in this case is whether the Act comes within that safe harbor or spills over to the other \"civil or criminal sanctions\" forbidden to States.\nThe Act builds on the federal statutory prohibitions and the 1-9 system, but avoids making determinations of alien status or work authorization separate from those made by the federal government. It provides, \"An employer shall not intentionally employ an unauthorized alien or knowingly employ an unauthorized alien,\" incorporating the federal definitions of \"knowingly employ\" and \"unauthorized alien.\" A.R.S. \u00a7\u00a7 23-212(A), 23-211(6) and (8). The federal government provides its determination of \"the work authorization of the alleged unauthorized alien\" to State officials and the State court pursuant to 8 U.S.C. \u00a7 1373(c). That determination is binding, though the State court may request verification. A.R.S. \u00a7 23-212(B) and (H). The Act replicates the federal \"affirmative defense\" that the employer \"complied in good faith\" with the 1-9 system. A.R.S. \u00a7 23-212(J). However, as noted above, participation in E-Verify very much affects the federal \"affirmative defense\" that the employer \"complied in good faith\" with the 1-9 system.\nThe Act also replicates the federal rebuttable presumption of compliance for employers who have verified the employment authorization of their employees through E-Verify. A.R.S. \u00a7 23-212(I). The Act goes further than federal law, however, and requires employers to verify the eligibility of new hires through the Verify program after December 31, 2007. A.R.S. \u00a7 23-214.\nThe sanctions for violating A.R.S. \u00a7 23-212(A) vary. For a first adjudicated knowing violation during a three-year period, the employer is ordered to terminate the employment of 411 unauthorized aliens, must file quarterly reports of new hires for a three-year probation period, and is ordered to file an affidavit within three days that it has terminated all unauthorized aliens and will not intentionally or knowingly employ an unauthorized alien. If the employer does not file the affidavit on time, its business licenses are suspended until it does. Even if the affidavit is filed on time, the court may suspend the business licenses up to ten days after considering various factors. A.R.S. \u00a7 23-212(F)(1).\nFor a first adjudicated intentional violation during a five-year period, the sanctions are the same except that the probation and reporting period is five years and suspension of business licenses is mandatory for a minimum of ten days. A.R.S. \u00a7 23-212(F)(2).\nFor a second knowing or intentional violation during the period of probation, business licenses are permanently revoked. A.R.S. \u00a7 23-212(F)(3).\n\"License\" means any state or local \"authorization that is required by law and that is issued . . . for the purposes of operating a business in this state.\" A.R.S. \u00a7 23-211(7)(a). It includes articles of incorporation, *976 a certificate of partnership, a foreign corporation registration, and a transaction privilege (sales tax) license, but not a professional license. A.R.S. \u00a7\u00a7 23-211(7)(b) and (c). Obviously, both the punishment and the deterrence are meant to be stiff.\nThe Act authorizes only county attorneys to bring proceedings under the Act. A.R.S. \u00a7\u00a7 23-212(C)(3), 23-212(D). Both county' attorneys and the Attorney General may receive and shall investigate complaints of violation. Upon concluding that a complaint is not frivolous, the investigating officer shall notify federal immigration authorities and the local law enforcement agency of the unauthorized alien, and the Attorney General \"shall notify the appropriate county attorney to bring an action\" if the complaint was filed with the Attorney General. A.R.S. \u00a7 23-212(C). The Attorney General shall also maintain copies of court orders of enforcement. A.R.S. \u00a7 23-212(G). The Act required and the Director of the Department of Revenue did send a notice by October 1,2007, to all employers required to withhold income taxes informing them of the terms of the Act. 2007 Ariz. Sess. Laws, Ch. 279, \u00a7 3. (Facts, Ex. 6.)\nIII. The Litigation and the Parties\nThe Plaintiffs in No. CV 07-1355 are twelve non-profit corporations that are associations of members and serve as public policy advocates for their members. They are referred to as the \"Business-Group Plaintiffs.\" Three are chambers of commerce reflecting wide business interests, two are business associations interested in immigration policy, and seven are trade associations in specific industries. Ten are incorporated in Arizona and have their principal place of business in Arizona. Nine have employees in Arizona. Wake Up Arizona!, the U.S. Chamber of Commerce, and the National Roofing Contractors Association have no Arizona employees, but they allege that some of their members have employees in. Arizona. The latter two are not incorporated in Arizona, and there is no evidence they have any business license that could be sanctioned under the Legal Arizona Workers Act, but they allege that some of their members do have Arizona business licenses. (Facts, \u00b6 \u00b6 1-6.)\nPlaintiff. Chicanos Por La Causa, Inc., in No. CV 07-1684 (now consolidated with No. CV 07-1355) is an Arizona non-profit corporation with 600 Arizona employees. It is Arizona's largest community development corporation. Plaintiff Somos America, a coalition of diverse groups for comprehensive immigration reform, presents no allegation or evidence that it or any of its members have Arizona employees or are subject to the Act. It will be dismissed for lack of standing and will be omitted from the balance of the discussion in this order. (Facts, Ex. 23. \u00b6 \u00b6 1-8.)\nThe Act will govern the remaining Plaintiffs and/or some of their members and will require them to use E-Verify to ascertain the employment eligibility of new employees. They will need to allocate employee time to install and learn software, complete a tutorial, sign the MOU, and submit information regarding their new employees. The cost will be at least several hundred to several thousand dollars per year.\nAll Plaintiffs contend that the Act violates the IRCA's preemption of \"any State or local law imposing civil or criminal sanctions (other than through licensing or similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens.\" 8 U.S.C. \u00a7 1324a(h)(2). They further assert that the differences between the Act and the IRCA conflict with federal law. They also argue that the voluntariness of E-Verify under federal law prohibits the State from requiring Arizona employers to participate *977 as a part of the Arizona license sanction regulation.\nThe Business-Group Plaintiffs contend that the Act also violates procedural and substantive due process of law, the federal Commerce Clause, Arizona separation of powers, and the Fourth Amendment guarantee against unreasonable search and seizure.\nThe Defendants are the Governor and the Attorney General of the State of Arizona, and in the case of Chicanos Por La Causa, also the Director of the Department of Revenue.\nAll Plaintiffs claim injury and standing based on the expense of participating in E-Verify and seek declaratory relief and an injunction against enforcement of the Act. The Business-Group Plaintiffs also claim' injury and standing from threat of enforcement of the Act and from forced waiver of their Fourth Amendment rights by signing the E-Verify MOU.\nIV. The Business-Group Plaintiffs Have No Standing to Challenge the Act Based on a Threat of Prosecution or Loss of Fourth Amendment Rights\nArticle III of the Constitution limits the judicial power of federal' courts to \"cases\" and \"controversies.\" Flast v. Cohen, 392 U.S. 83, 94, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968). Federal courts must maintain their proper role as arbiters of adversarial disputes and not stray into areas committed to other branches of government. Id. \"No principle is more fundamental to the judiciary's proper role, in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies.\" Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 37, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976) (citing Flast, 392 U.S. at 95, 88 S.Ct. 1942). For a case or controversy to exist under Article III, a plaintiff must have standing to assert his legal claims, those claims must be ripe for review, and the harm must be redressable against the defendants. Renne v. Geary, 501 U.S. 312, 320, 111 S.Ct. 2331, 115 L.Ed.2d 288 (1991).\n\"[T]he standing question in its Art. III aspect `is whether the plaintiff has alleged such a personal stake in the outcome of the controversy as to warrant his invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on his behalf.'\" Simon, 426 U.S. at 38, 96 S.Ct. 1917 (quoting Warth v. Seldin, 422 U.S. 490, 498-99, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). To have standing a plaintiff must have suffered an \"injury in fact.\" Such an injury is one that is Concrete, particularized, actual, and imminent, not conjectural or hypothetical. San Diego County Gun Rights Comm. v. Reno, 98 F.3d 1121, 1126 (9th Cir.1996) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). The plaintiff must also establish \"a causal connection between the injury and the conduct complained of,\" and it must be likely, not merely speculative, that the injury will be redressed by a favorable decision. Id.\nTo the extent that the Business-Group Plaintiffs assert, standing on behalf of their members, they must show that 1) \"their members would otherwise have standing to sue in their own right;\" 2), \"the interests that they seek to protect are germane to the purposes, of their organizations;\" and 3) \"neither the claims asserted nor, the relief requested requires the participation of individual members in the lawsuit.\" San Diego County Gun Rights Comm., 98 F.3d at 1130-31 (citing Hunt v. Wash, State Apple Adver. Comm'n, 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977)). Defendants do not challenge the Business-Group Plaintiffs' associational standing.\n*978 A. There Is No Imminent Threat of License Proceedings Against the Business-Group Plaintiffs\nThe Business-Group Plaintiffs have standing if they can prove a \"genuine threat of imminent prosecution\" by the Defendants. San Diego County Gun Rights Comm., 98 F.3d at 1126 (emphasis omitted). The credibility of a threat of prosecution turns on: 1) \"whether the plaintiffs have articulated a `concrete plan' to violate the law in question,\" 2) \"whether the prosecuting authorities have communicated a specific warning or threat to initiate proceedings,\" and 3) \"the history of past prosecution or enforcement under the statute.\" Thomas v. Anchorage Equal Rights Comm'n, 220 F.3d 1134, 1139 (9th Cir.2000) (en banc) (citation omitted).\nThere is no threat of enforcement proceedings against the Business-Group Plaintiffs by the Defendants or anyone else. The Business-Group Plaintiffs do not knowingly employ or plan to employ any unauthorized alien. They rely solely on a press release by the Maricopa County Attorney that announces his intent to enforce the Act through a partnership with the Sheriff's Office. (Facts, Ex. 19.) That is a message to the entire county, not to these Plaintiffs. \"[A] general threat of prosecution is not enough to confer standing.\" San Diego County Gun Rights Comm., 98 F.3d at 1127. Plaintiffs have presented no evidence of a specific threat directed at them or any of their members. Thomas, 220 F.3d at 1140. They therefore lack standing on this basis.\nB. Signing the E-Verify Memorandum of Understanding Gives No Standing Because It Does Not Waive Fourth Amendment Rights\nThe Business-Group Plaintiffs also claim injury from forced waiver of their Fourth Amendment right to be free of warrantless federal searches of their employment records. When they sign the MOU to participate in E-Verify, they must agree to give the federal government access to employment records and employees for interviews. If they later refuse access, DHS may terminate their use of E-Verify, leaving the employer not in compliance with State law. Several threads run through this argument, but none ties to a real injury.\nAssuming for now that employers have privacy interests in the specified documents and interviews sufficient to invoke the protections of the Fourth Amendment, the MOU does not authorize warrantless searches. See Midwest Growers Coop. Corp. v. Kirkemo, 533 F.2d 455, 463 (9th Cir.1976) (holding that a statute that allowed an agency \"access to and authority . . . to inspect, examine, and copy\" business records did not create a right of entry). Signing the MOU therefore does not effect an immediate waiver of Fourth Amendment rights. Moreover; the employer may withdraw the consent to access at any time. See United States v. McWeeney, 454 F.3d 1030, 1034 (9th Cir.2006) (recognizing that a crime suspect \"is free . . . after initially giving consent, to delimit or withdraw his or her consent at anytime\"). Finally, the MOU itself states the only consequence that can result from failure to comply, and it is not a forcible search. Rather, DHS \"may terminate the Employer's access to E-Verify.\" (Facts, Ex. 7, Art.II \u00a7 C \u00b6 15.) In no event could the federal government enter and search over the employer's objection.\nIf the MOU did pose some arguable threat to Fourth Amendment rights, or to continued participation in E-Verify, it is far too speculative to occasion federal court relief now. A threatened injury must be \"certainly impending\" to constitute *979 injury in fact, not hypothetically occurring at some future time contingent upon the acts, of others. Lujan, 504 U.S. at 564 n. 2, 112 S.Ct. 2130 (quoting Whitmore v. Arkansas, 495 U.S. 149, 158, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990)). It is unknown whether DHS would terminate the Business-Group Plaintiffs' participation in E-Verify for refusing to grant them warrantless access to their records. The Business-Group Plaintiffs provide no evidence that DHS has done so in the past or intends to do so in the future.\nIt is helpful to recast the analysis in terms of ripeness. By agreeing to the MOU, the Business-Group Plaintiffs would currently lose nothing, for they later may refuse warrantless searches and have the benefit of E-Verify participation in the. meantime. If at some future time the federal government expelled them from E-Verify for refusing a search, only then would they suffer a detriment. But the detriment would not be loss of a Fourth Amendment right. It would be the inability to use E-Verify from that point forward. None of that is the business of the courts today.\nV. Plaintiffs Would Have Standing to Challenge the Act Based on the Economic Cost of E-Verify if They Had Sued a Proper Defendant\nA. The Act Imposes' Economic Injury on Plaintiffs if it Forces Them to Participate in E-Verify\nPlaintiffs contend that the Act imposes economic injury upon them by forcing them to use E-Verify. Even in' the absence of a specific threat of enforcement proceedings, a plaintiff may have standing based upon the economic cost of complying with a law. National Audubon Soc'y Inc. v. Davis, 307 F.3d 835, 856 (9th Cir.2002); San Diego County Gun Rights Comm., 98 F.3d at 1130; Cent. Ariz. Water Conservation Dist. v. U.S. EPA, 990 F.2d 1531, 1537 (9th Cir.1993). Cf. Lake Carriers' Ass'n v. MacMullan, 406 U.S. 498, 507-08, 92 S.Ct. 1749, 32 L.Ed.2d 257 (1972) (holding that a case or controversy meets the constitutional test for ripeness when a plaintiff must incur expense to prepare to comply with a soon-to-become-effective statute). Plaintiffs must incur some labor and out-of-pocket costs to check the employment eligibility of new hires through E-Verify. (Facts, Ex. 10 at 34.) They have thus demonstrated that they will sustain economic injury if the law forces them to use E-Verify.\nB. The Act Causes Plaintiffs Economic Injury Only if its Operation or Enforcement Coerces Compliance With the E-Verify Requirement\n\"The mere existence of a proscriptive statute . . . [does not] satisf[y] the `case or controversy' requirement.\" Thomas, 220 F.3d at 1139 (citing San Diego County Gun Rights Comm., 98 F.3d at 1126-27). Economic injury from a statute sufficient for standing must be \"fairly traceable\" to the challenged statute and to the challenged actions of the defendants. San Diego County Gun Rights Comm., 98 F.3d at 1130 (citing Lujan, 504 U.S. at 560, 112 S.Ct. 2130). \"A justiciable controversy does not exist where `compliance with [challenged] statutes is uncoerced by the risk of their enforcement.'\" Lake Carriers' Ass'n, 406 U.S. at 507, 92 S.Ct. 1749 (alteration in original) (quoting Poe v. Ullman, 367 U.S. 497, 508, 81 S.Ct. 1752, 6 L.Ed.2d 989 (1961)). \"A plaintiff who challenges a statute must demonstrate a realistic danger of sustaining a direct injury as a result of the statute's operation or enforcement.\" Babbitt v. United Farm Workers Nat'l Union, 442 U.S. 289, 298, 99 S.Ct. 2301, 60 L.Ed.2d 895 (citing O'Shea v. Littleton, 414 U.S. 488, 494, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974)).\n*980 As a threshold matter, Chicanos Por La Causa contends that A.R.S. \u00a7 23-214 forces them to enroll simply because \"it is important in our country for all people to follow the law\" and because \"we are called upon to certify in various documents that we are not in violation of any laws.\" (Facts, Ex. 21 \u00b6 4.) Such honorable intentions are not enough for standing. Plaintiffs must show that the operation or enforcement of the statute, causes them to incur an economic injury. Chicanos Por La Causa points to no specific, imminent need to certify compliance with State law. Nor has it shown a specific consequence for not certifying, or identified the officer who would visit that consequence upon it. The Business-Group Plaintiffs' belated argument on this point at trial went beyond its pleadings and the evidence, and they failed to show that a proper defendant is before the court. These grounds do not prove that the Act forces Plaintiffs to participate in E-Verify.\nPlaintiffs can show that their economic injury is fairly traceable to the Act if they have a reasonable expectation that the defendants might bring an enforcement action against them if they do not comply. For example, professional trappers who endured economic injury when they ceased trapping to comply with a new law had standing to sue the law's enforcement officer. National Audubon Soc'y Inc. v. Davis, 307 F.3d 835, 856 (9th Cir.2002). Even though they had received no specific threat of enforcement, they reasonably expected that the law might be enforced against them \"if they continued to trap because of \"(1) the newness of the statute; (2) the explicit prohibition against trapping contained in the text of [the statute]; (3) the state's unambiguous press release mandating the removal of all traps banned. under [the statute]; (4) the amendment of state regulations to incorporate the provisions of [the statute]; and (5) the prosecution of one private trapper under [the statute].\" Id.\nThis case presents almost all of the National Audubon Society factors. The Arizona Act is new, it explicitly requires employers to use E-Verify, the State has mailed notice, to every employer in the State that they must comply with the terms of the Act, and at least one county attorney has issued a press release expressing his intent to enforce the Act's prohibition on employing unauthorized aliens. No person has been prosecuted under the Act because it has not yet taken effect, but there is no doubt that enforcement proceedings will occur. Plaintiffs have a reasonable expectation that the county attorney might enforce the Act against them if he obtains evidence that they employ unauthorized aliens after December 31, 2007.\nThe difference between National Audubon Society and this case is that the Act contains no explicit penalty solely for failing to use E-Verify. Although section 23-214 of the Arizona Act requires all business employers to participate in E-Verify, it authorizes no officer of the State to bring any form of enforcement action and provides no express civil or criminal penalty for noncompliance with that requirement. However, the Act may still cause Plaintiffs' economic injury if it coerces them to use E-Verify through the operation of section 23-212, which authorizes enforcement of the prohibition on employing unauthorized aliens.\nC. The Operation of the Act Coerces Employers to Participate in E-Verify\nPlaintiffs contend that the State coerces them to enroll in E-Verify by denying them the \"rebuttable presumption that [the] employer did not intentionally employ an unauthorized alien or knowingly *981 employ an unauthorized alien\" in the event of an enforcement action. A.R.S. \u00a7 23-212(I). This replicates the rebuttable presumption that the E-Verify MOU gives to employers in federal enforcement proceedings.\nThe \"rebuttable presumption\" proves little more than what is already true: an employer who confirms a new hire's employment eligibility through E-Verify has strong evidence that it did not knowingly or intentionally employ an unauthorized alien. Even if section 23-212(I) and the MOU did not call it a \"rebuttable presumption,\" exonerating evidence from the federal government's own records and investigation would be dispositive in the employer's favor unless it can be proved that the federal data are wrong and the employer knew it. That is a tall task in most situations. Standing alone, it is not coercion when the law recognizes the persuasive or even compelling force of evidence for those who ferret it out. Seeking good evidence is usually a choice, and a plaintiff cannot rely upon its own choice to establish injury and standing. DMJ Assocs., L.L.C. v. Capasso, 288 F.Supp.2d 262, 267 (E.D.N.Y.2003) (citing Jackson-Bey v. Hanslmaier, 115 F.3d 1091, 1095 (2d Cir. 1997)).\nHowever, the rebuttable presumption of section 23-212(I) does not stand alone. Ordinarily an employer who complies in good-faith with the federal I-9 verification system obtains an affirmative defense that it did not knowingly employ an unauthorized alien. 8 U.S.C. \u00a7 1324a(a)(3). An employer presumptively is not in violation of federal law if it examines documentation listed on the I-9 in good faith and the documentation \"reasonably appears on its face to be genuine.\" 8 U.S.C. \u00a7 1324a(b). But where an employer has been through the E-Verify system, the defense of good faith I-9 compliance may recede into insignificance. For determining good faith, facially genuine but fraud-friendly I-9 identifying documents will not matter much if the employer also knows that the government's data and investigation, after dialog with the employee, show the employee is unauthorized. E-Verify does not repeal the I-9 defense, but rather swamps it with far better evidence.\nThe same may be true under the Arizona law. The Act replicates the federal law affirmative defense for good faith I-9 compliance, A.R.S. \u00a7 23-212(J), but in any enforcement proceeding the State will obtain the federal government's data on the employee's immigration status under 8 U.S.C. \u00a7 1373(c). The State court may consider only that evidence \"[o]n determining whether the employee is an unauthorized alien.\" A.R.S. \u00a7 23-212(H). The employer's liability for license sanctions will likely turn only on whether the State proves the employer's knowledge or intent to employ an unauthorized alien.\nBecause the Arizona Act requires employers to use E-Verify, the Act may be read to charge employers with knowledge of the E-Verify data that they wrongfully refuse to obtain, just as the MOU charges E-Verify users with knowledge of the data for federal enforcement purposes. To read the Act differently risks reducing it to state-level duplication of the same failed federal system of enforcement that the Legislature meant to strengthen. The State plainly made E-Verify mandatory. A.R.S. \u00a7 23-214. It did so in the hopes of taking \"the most aggressive action in the country against employers who knowingly or intentionally hire undocumented workers\" because \"Congress finds itself incapable of coping with the comprehensive immigration reforms our country needs.\" (Signing statement of Gov. Napolitano, July 2, 2007, Facts, Ex. 2.)\nThe court need not discern now the exact meaning and effect of A.R.S. \u00a7\u00a7 23-212(I), *982 23-212(J), and 23-214. The Arizona courts may do that in the course of administering the Act. It is enough at the threshold of this case that Plaintiffs reasonably fear that if they do not use Verify and a new employee turns out to be unauthorized, they may have no good faith defense to the Act's harsh sanctions. State courts may read the Act to hold them accountable for the knowledge from which they unlawfully averted their eyes.\nThis case is different from National Audubon Society and other cases where cost of compliance was forced and therefore provided standing. Unlike those cases, Plaintiffs' failure to use E-Verify does not violate the primary prohibition of the statute, which here is against hiring known unauthorized aliens. Failure to comply with E-Verify may increase the number of unauthorized aliens that an employer employs, especially in some industries; but unlike National Audubon Society, it will not directly bring greater attention from prosecutors. Therefore, the refusal to comply with E-Verify will not increase an employer's apprehension of being prosecuted to the same extent as in other cases.\nOn balance, the court concludes in the circumstances of this case that Plaintiffs' participation in E-Verify is not voluntary and is \"fairly traceable\" to the Act. The design of the Act is to coerce compliance with E-Verify less by the nearness of prosecution than by the intolerable punishment resulting from prosecutions, which usually will be undefendable without Verify compliance. In terrorem laws force low-cost compliance even with thin enforcement.\nYet the Act does not rely on that alone. Widespread enforcement is promised, funded with appropriations. The likelihood of general prosecution is proven. The prospect of actual enforcement against any employer forgoing E-Verify is not so remote as to unlink prosecution from the felt compulsion to use E-Verify. The operation of the Act therefore coerces Plaintiffs to endure economic injury, and if they have sued a proper defendant, they have standing to challenge the provisions of the Act that require them to use E-Verify.\nPlaintiffs must demonstrate that they meet Article III's case or controversy requirement independently for each provision of the Act they seek to challenge. Clark v. City of Lakewood, 259 F.3d 996, 1006 (9th Cir.2001) (\"[A] plaintiff may have standing to challenge some provisions of a law, but not others.\") (citing 4805 Convoy, Inc. v. San Diego, 183 F.3d 1108, 1112-13 (9th Cir.1999)); CAMP Legal Def. Fund, Inc. v. City of Atlanta, 451 F.3d 1257, 1273 (11th Cir.2006) (citing FW/PBS, Inc. v. Dallas, 493 U.S. 215, 233, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990), modified in part on other grounds in. City of Littleton v. Z.J. Gifts D-4, L.L.C., 541 U.S. 774, 782, 124 S.Ct. 2219, 159 L.Ed.2d 84 (2004)). Therefore, even if Plaintiffs have sued a proper defendant, their economic injury allows them to challenge only those aspects of the Act that logically compel them to use E-Verify.\nVI. Suit Against the Governor, Attorney General, and Director Does Not Satisfy Constitutional Causation and Redressability Requirements\nA. In General a Proper Defendant Must Have Authority to Enforce the Challenged Law or Have Threatened to Do So\nThe Governor, the Attorney General, and the Director contend that they are not proper defendants to this action. Before addressing the precise question of whether Plaintiffs may properly sue them for coerced participation in E-Verify, it is helpful to understand how the principles of causation and redressability apply in suits *983 against state, officers. \"It is well-established that when a plaintiff brings a preenforcement challenge to the, constitutionality of a particular statutory provision, the causation element of standing requires the named defendants to possess authority to enforce the complained-of provision.\" Bronson v. Swensen, 500 F.3d 1099, 1110 (10th Cir.2007) (citations omitted). There must be \"the requisite causal connection between their responsibilities and any injury that the plaintiffs might suffer, such that relief against the defendants Would provide redress.\" Planned Parenthood of Idaho, Inc. v. Wasden, 376 F.3d 908, 919 (9th Cir.2004) (citations omitted).\nThe Act allows, only county attorneys to bring enforcement actions against employers for noncompliance. A.R.S. \u00a7 23-212(C). The Director has carried out his duty to send notice to Arizona employers explaining the Act's requirements and providing instructions on how to register for E-Verify. 2007 Ariz. Sess. Laws, ch. 279 \u00a7 3. (Facts, Ex. 6.) An injunction to send a curative notice would be empty, for Plaintiffs have advice from their counsel in this litigation and need no further notice about the Act from the Director. The Act does not charge the Governor with any specific duty, and her general duty to ensure that the laws are faithfully executed is not sufficient to make her a party to this challenge. Shell Oil Co. v. Noel, 608 F.2d 208, 212-13 (1st Cir.1979). Cf. L.A. County Bar Ass'n v. Eu, 979 F.2d 697, 704 (9th Cir.1992) (\"[A] generalized duty to enforce state law . . . will not subject an official to suit.\") (citations omitted). An injunction against either of these, officials would not prevent enforcement actions under the Act or otherwise diminish its coercive effect.\nThe Attorney General has the authority to investigate and refer complaints to county attorneys for enforcement. A.R.S. \u00a7 23-212(B), (C). No language in the Act deprives a county attorney of the normal discretion to decide whether to proceed with an enforcement action, even where the Attorney General, has referred a complaint to the county attorney. Therefore, even if a county attorney directly threatened enforcement proceedings against Plaintiffs, this case would fall under the rule that \"[w]here an attorney general cannot direct, `in a binding fashion, the prosecutorial activities of the officers who actually enforce the law or bring his own prosecution, he may not be a proper defendant.\" Wasden, 376 F.3d at 919 (citations omitted).\nPlaintiffs would have standing to sue the Attorney General if he specifically threatened to refer a complaint against Plaintiffs to a county attorney for enforcement, or if he specifically threatened to bring enforcement proceedings himself, even though he lacks the power to do so. Culinary Workers Union v. Del Papa, 200 F.3d 614, 617-18 (9th Cir.1999) (distinguishing Southern Pacific Transportation Co. v. Brown, 651 F.2d 613 (9th Cir.1980), and Snoeck v. Brussa, 153 F.3d 984 (9th Cir.1998), where the attorneys general could not be sued because they had no authority and made no threats). The Attorney General has not, however, made any `specific threat against the Plaintiffs. The court must therefore determine whether the Attorney General's powers are the source of Plaintiffs' economic injury.\nB. The Attorney General Does Not Cause Plaintiffs' Economic Injury\nA plaintiff enduring an economic injury fairly traceable to a challenged statute must also sue a defendant whose acts cause his economic injury and against whom redress will be effective. San Diego County Gun Rights Comm., 98 F.3d at 1130; Bronson v. Swensen, 500 F.3d 1099, 1110, 1112 (10th Cir.2007). Since the E-Verify *984 requirement has no explicit enforcement provision, the consequence for failing to use it arises only in license sanction proceedings. In the special case of injury from cost of compliance, it is, settled that a judgment against an officer who can bring enforcement proceedings is proper redress, even if the officer has made no specific threat of enforcement. National Audubon Soc'y, 307 F.3d at 856. It is also settled that the court can\" provide no redress against a state officer without power to enforce the statute. Nova Health Systems v. Gandy, 416 F.3d 1149, 1158 (10th Cir.2005). To say otherwise would \"confuse[] the statute's immediate coercive effect on the plaintiffs with any coercive effect that might be applied by the defendants.\" Okpalobi v. Foster, 244 F.3d 405, 426 (5th Cir.2001) (en banc).\nThe causation element of standing requires that the Attorney General have enough connection to Plaintiffs' injury that a judgment against him will protect them from having to participate in E-Verify. The parties cite no authority, and the court has found none, where a plaintiff sought relief for cost-of-compliance injury against an officer who had a facilitative role in enforcement, such as investigation or referral, but who had no direct enforcement power. Therefore, the general principle governing this issue is that redress is speculative if it turns on the independent acts of third parties, here the county attorneys. San Diego County Gun Rights Comm., 98 F.3d at 1130 (plaintiffs did not have standing to sue because it was \"third-party weapon dealers and manufacturers\u0097not the government defendants\u0097who [had] raised the prices of assault weapons\").\nPlanned Parenthood of Idaho, Inc. v. Wasden, 376 F.3d 908 (9th Cir.2004), does not lead to a different conclusion. There, the Idaho Attorney General was held amenable to suit by a physician to enjoin a parental consent statute for minors' abortions. Id. at 920. Though not threatened explicitly with enforcement, he stated \"a clear intention to continue to perform abortions\" for his minor patients and therefore had \"a reasonable fear [the] statute would be enforced against [him].\" Id. at 917 (citing California Pro-Life Council Inc. v. Getman, 328 F.3d 1088, 1094-95 (9th Cir.2003)). The attorney general was a proper defendant, because, by law, he could \"assist\" a prosecuting attorney, and state courts had ruled that \"unless the county prosecutor objects, the attorney general may, in his assistance, do every act that the county attorney can perform.'\" Id. 919-20 (quoting Newman v. Lance, 129 Idaho 98, 922 P.2d 395, 399-401 (1996)) (emphasis omitted). Because the attorney general was able to \"deputize himself' to enforce the statute in the place of the county attorney, the, court concluded that an injunction against him would redress the plaintiffs injury. Id.\nThe Arizona Attorney General has general supervisory authority over the county attorneys, A.R.S. \u00a7 41-193(4), and the authority to \"assist\" the county attorneys in their duties \"at the direction of the Governor, or when deemed necessary.\" A.R.S. \u00a7 41-193(A)(5). The Attorney General may prosecute crimes when requested by a county attorney. State v. Duran, 118 Ariz. 239, 242-43, 575 P.2d 1265, 1268-69 (Ct. App.1978). On the other hand, no Arizona court has held that the Attorney General \"may, in his assistance, do every act\" that a county attorney can perform, even without objection of the county attorney. Wasden, 376 F.3d at 920.\nUnlike the physician in Modem, Plaintiffs disavow any intention of violating the law. Further, Wasden was a challenge to an abortion law, and several courts of appeals have held that the Supreme Court relaxed standing requirements for abortion cases in Doe v. Bolton, 410 U.S. 179, 93 *985 S.Ct. 739, 35 L.Ed.2d 201 (1973). Margaret S. v. Edwards, 794 F.2d 994, 997 (5th Cir.1986); Planned Parenthood Ass'n Cincinnati, 822 F.2d 1390, 1396 n. 4 (6th Cir.1987); Reprod. Health Serv. v. Webster, 851 F.2d 1071, 1075 (8th Cir.1988) rev'd on other grounds, 492 U.S. 490, 109 S.Ct. 3040, 106 L.Ed.2d 410 (1989). See also Wasden, 376 F.3d at 917 (citing Doe, 410 U.S. at 188, 93 S.Ct. 739).\nThe Attorney General does not contend that his general power to \"assist\" county attorneys grants him power to enforce the Act in place of the county attorneys. In a challenge to a statute that vests enforcement in the county attorneys, an attorney general who has non-binding supervisory power is not a proper defendant unless there is \"a real likelihood that the state official will employ his supervisory powers against plaintiffs' interests.\" Long v. Van de Kamp, 961 F.2d 151, 152 (9th Cir.1992). See also Reprod. Health Servs. of Planned Parenthood of the St. Louis Region v. Nixon, 428 F.3d 1139, 1145 (8th Cir.2005) (holding that the attorney general was not a proper party despite his authority to aid prosecutors because his use of that power was not imminent); Falwell v. City of Lynchburg, 198 F.Supp.2d 765, 776 (W.D.Va.2002) (\"In this case, the Plaintiffs have alleged only that the Attorney General may, at some future time, via some hypothetical mechanism, enforce [the law] against them.\")\nThe true source of Plaintiffs' forced use of E-Verify is the county attorneys' power to instigate an enforcement, action. As against the Attorney General, Plaintiffs have not shown a \"substantial likelihood that the relief requested will redress its injury\" of forced E-Verify compliance. Gandy, 416 F.3d at 1158 (citations omitted).\nIT IS THEREFORE ORDERED that the Clerk enter judgment dismissing this action without prejudice for lack of subject matter jurisdiction, there being no justiciable case or controversy against the Defendants.\n"} -{"text": "\n742 N.W.2d 75 (2007)\n2007 WI App 251\nSTATE\nv.\nSNYDER.\nNo. 2007AP760-CR.\nCourt of Appeals of Wisconsin.\nOctober 17, 2007.\nUnpublished opinion. Affirmed.\n"} -{"text": "471 F.2d 1170\n82 L.R.R.M. (BNA) 2017, 70 Lab.Cas. P 13,242\nFAIRMONT FOODS COMPANY, Petitioner,v.NATIONAL LABOR RELATIONS BOARD, Respondent.\nNo. 72-1283.\nUnited States Court of Appeals,Eighth Circuit.\nSubmitted Nov. 16, 1972.Decided Dec. 21, 1972.\n\nHarry L. Browne, Kansas City, Mo., for petitioner.\nLeonard M. Wagman, Atty., N.L.R.B., Washington, D. C., for respondent.\nBefore MATTHES, Chief Judge, ROSS, Circuit Judge, and VAN PELT, Senior District Judge.\nROSS, Circuit Judge.\n\n\n1\nFairmont Foods Company (Fairmont) petitions this Court to review and set aside an order of the National Labor Relations Board (Board), 196 N.L.R.B. No. 122, 80 L.R.R.M. 1172 (1972), wherein the Board found Fairmont in violation of Secs. 8(a)(5) and (1) of the National Labor Relations Act. 29 U.S.C. Secs. 158(a)(5) and (1). The Board has cross-applied for enforcement. We deny enforcement of that order.\n\n\n2\nThis case involves the right of an employer (Fairmont) to withdraw from a multiemployer bargaining unit after negotiations have begun but before an agreement has been reached. Two central issues are raised by Fairmont. The first is whether there is substantial evidence on the record as a whole to support the Board's finding that no impasse had been reached in negotiations between the multiemployer bargaining unit, of which Fairmont was a member, and the Teamsters Local 471 (Union), and thus that Fairmont's withdrawal was untimely. The second is whether there is substantial evidence to support the Board's finding that the Union did not consent to Fairmont's withdrawal.\n\n\n3\nFairmont has had a collective bargaining relationship with the Union since 1957. Its 1965-1967 and 1967-1969 contracts were negotiated as a member of the Minneapolis Milk Dealers Association. In negotiations for the 1969-1971 contract, however, Fairmont bargained separately in an unsuccessful attempt to eliminate the wholesale load restrictions present in the contracts negotiated by the Association.\n\n\n4\nThese load limits, which were based upon units representing a quantity of dairy products, were set at a 3,500 unit per day average. Fairmont believed that because of these limits, it was prevented from delivering a commercially adequate volume of dairy products, thereby placing it at a \"severe competitive disadvantage.\" Prior to collective bargaining for the contract term beginning May 1, 1971, Fairmont made its position regarding elimination of load limits clear to the Union.\n\n\n5\nIt likewise made its position clear to the Association members, who agreed they would insist on eliminating the load limits from the 1971-1973 contract if Fairmont would rejoin the group. As a result, Fairmont authorized, by letter, the Association's negotiating committee to negotiate on its behalf, but expressly refused to be committed to any particular contract provision \"prior to our specific approval.\" This reservation of authority was not communicated to the Union prior to an agreement being reached.\n\n\n6\nFormal negotiations commenced on March 30, 1971, when the Association's proposals, including the elimination of load limits, were presented to the Union. Six subsequent meetings were held, but very little was agreed upon. The last of these meetings occurred on April 30, the contract termination date. Both state and federal mediators were present, as they had been for several previous meetings. Moran, the union representative, testified that by approximately 11:30 p. m. \"we knew that we were so far apart, we couldn't reach an agreement by midnight.\" Consequently, he sent the union committee members back to the union office to prepare for a strike. Moran and another union representative \"stayed there to continue the negotiations, if any.\"\n\n\n7\nThe testimony regarding subsequent transactions is somewhat conflicting, but it does show that the Union and Association were still apart on at least fifteen issues after midnight. Moran told the negotiating committee that he would be in his office that afternoon. He left, and the Union struck the employer-members' plants at 2:00 a.m. That afternoon, May 1, Hadlick, the Association's chief negotiator, accompanied by the mediators, delivered a \"best and final\" offer to Moran at his office. This offer contained a compromise by raising the load limits from 3,500 units to 5,500 units, or in the alternative an hourly rate with only two stops; however, it was rejected by the Union.\n\n\n8\nOn May 2 and 3 the Union negotiated separately with three individual employer-members, who were then allowed to resume operations. The load limits set by these agreements, two of which were oral and one of which was written, remained at 3,500 units \"unless changes were made in negotiations with the Minneapolis Milk Dealers Assn.\"\n\n\n9\nIn response to an attempt by the mediators to arrange a meeting with the Union on May 3, the multiemployer group met. Several members indicated a willingness to reach an agreement with the Union as three had already done. Fairmont, however, refused to compromise on the load limit issue and withdrew from negotiations. During a series of meetings with the Union that evening, Hadlick told the union representative, Moran, that Fairmont \"had 'walked out' of the negotiations and that they refused to be bound by the terms of any collective-bargaining agreement that might be negotiated.\" Moran was also informed that Fairmont was still a member of the Association, but he conceded that this meant it would pay its share of the negotiation expenses.\n\n\n10\nAt about 3:30 a.m. on May 4, the 1971-1973 contract was signed by the Union and all members of the Association except Fairmont. The load limit finally agreed upon was a compromise between the earlier positions of both the Union and the Association.\n\n\n11\nLater that day, the labor relations manager of Fairmont indicated to Moran by telephone a willingness to meet with the Union to negotiate an agreement. Meetings were held on May 5, 7 and 10; Fairmont refused to sign a contract providing for load limits, while the Union insisted that Fairmont sign the contract as agreed upon with the other employers. A charge was filed on May 11 alleging that Fairmont was obligated to sign the agreement negotiated by the Association, and a complaint issued June 11.\n\n\n12\nBy letter dated May 24, Fairmont formally advised the Union that it had been forced to withdraw from the negotiating sessions on May 3, 1971, because of the load restriction issue, and that its withdrawal was in accord with its agreement with the Association not to be committed to any contract provision without prior specific approval. The Union replied by two telegrams, on May 27 and 28. The first telegram merely expressed a willingness to meet at any time. The second of these telegrams advised that the Union felt the contract with the Association was binding upon Fairmont.\n\nImpasse\n\n13\nWhen an impasse in negotiations is reached, withdrawal by a member of a multiemployer bargaining group is excused. See Morand Bros. Beverage Co., 91 N.L.R.B. 409, 26 L.R.R.M. 1501, 1506 (1950), enforced, 190 F.2d 576 (7th Cir.1951); cf. Ice Cream Council, Inc., 145 N.L.R.B. 865, 870, 55 L.R.R.M. 1059, 1061 (1964). This means, of course, that it cannot be bound by a subsequent agreement between a union, having knowledge of the withdrawal, and the other employers.\n\n\n14\nWhether an impasse was reached is a question of fact, to which no mechanical definition can be applied. And while the Board's finding of fact is entitled to great weight, it must be supported by substantial evidence. We conclude that the record fails to support the Board's finding that no impasse was reached in this case. On the contrary, the evidence establishes that Fairmont bargained in good faith over a crucial issue, and the parties had exhausted the prospects of reaching an agreement at the time of withdrawal.\n\n\n15\nMoran's testimony that they were so far apart on April 30 that they \"would be forced to have a work stoppage,\" and the ensuing strike, indicates that the strike may have been more than a mere bargaining stratagem. See Bi-Rite Foods, Inc., 147 N.L.R.B. 59, 56 L.R.R. M. 1150 (1964). The evidence is clear that both parties considered \"final\" offers, and upon rejection by both, the Union bargained separately with three individual employers. We find this to be persuasive evidence that an impasse was reached.\n\n\n16\n\"Whether a bargaining impasse exists is a matter of judgment. The bargaining history, the good faith of the parties in negotiations, the length of the negotiations, the importance of the issue or issues as to which there is disagreement, the contemporaneous understanding of the parties as to the state of negotiations, are all relevant factors to be considered in deciding whether an impasse in bargaining existed.\" Taft Broadcasting Co., 163 N.L.R.B. 475, 64 L.R.R.M. 1386, 1388 (1967), enforced, 129 U.S.App.D.C. 399, 395 F.2d 622.\n\n\n17\nWhen viewed from the vantage of both of the parties, the record is clear that as long as Fairmont remained a member of the Association, the parties were irreconcilable on the load limit issue. The only way to break the impasse was by the withdrawal of Fairmont. Other members of the group invited Fairmont to leave for this reason and Fairmont did leave for that reason. As indicated by NLRB Chairman Miller in his dissent, it seems particularly incongruous under these circumstances to find Fairmont guilty of bad-faith bargaining.\n\n\n18\nBecause an impasse had been reached, Fairmont's withdrawal was timely. It therefore was not a violation of 8(a)(5) and (1) of the Act to refuse to be bound by an agreement reached by the Union and the multiemployer group after withdrawl with the Union's knowledge.\n\nConsent\n\n19\nNot only had an impasse in negotiations been reached, but we conclude that the evidence shows the Union consented to Fairmont's withdrawal. Thus, the Union cannot be heard to complain that the withdrawal was \"untimely.\" See N.L.R.B. v. Sheridan Creations, Inc., 357 F.2d 245, 247 (2d Cir.1966); C & M Construction Co., 147 N.L.R.B. 893, 56 L.R.R.M. 1270, 1271 (1964).\n\n\n20\nMoran made no objection to Fairmont's withdrawal when he was so informed verbally prior to reaching an agreement with the Association. Although the Union was under no affirmative duty to formally protest the withdrawal, see N.L.R.B. v. John J. Corbett Press, Inc., 401 F.2d 673, 675 (2d Cir. 1968), its course of conduct constituted an implied consent. See Publicity Engravers, Inc., 161 N.L.R.B. 221, 63 L.R. R.M. 1236 (1966). It is clear from the record that Moran knew that Fairmont was the stumbling block on the load limit issue. Yet he was willing to accept quietly the benefit to be obtained by Fairmont's withdrawal, in the form of a quick agreement to a contract, without insisting then that Fairmont sign the contract with the other employers and without even indicating to anyone at the time that he expected Fairmont to be bound.\n\n\n21\nThe Union's willingness to bargain with Fairmont even after the agreement was reached, as well as its willingness to bargain with the other individual employers during the impasse,1 is further evidence of acquiescence. Atlas Sheet Metal Workers, Inc., 148 N.L. R.B. 27, 29, 56 L.R.R.M. 1442, 1443 (1964). Moran testified that \"[t]he purpose of the meeting [on May 5], in our estimation, was to come to an agreement on the contract.\" At the meetings between the Union and Fairmont, which were attended by the mediators, many economic issues were discussed. Therefore, the Union did more than simply demand that Fairmont sign the agreement executed with the Association, all that would have been required had the Union felt Fairmont was still a member of the Association. See C & M Construction Co., supra, 56 L.R.R.M. at 1272.\n\n\n22\nChairman Miller in his dissent stated the issues clearly and succinctly when he said:\n\n\n23\n\"It seems clear to me that the issue of load restrictions was a stumbling block to the negotiations, and it seems equally clear to me that all parties knew that Respondent's firm position on this issue was not fully shared by other members of the group. As that situation became clear and as the parties neared their negotiating deadline, two things occurred . . . one the 'final' offer of the multiemployer negotiators failed to achieve a recommendation by the union negotiating committee and all concerned knew-as any experienced negotiators knows-that as a result the final offer was doomed to rejection and a strike was imminent. Thus at that point, an impasse existed.\n\n\n24\n\"It is true that as events unfolded, the impasse was shortlived. But why? Again, it seems clear to me that a change in the position of the employers' negotiators on the issue of load restrictions was a sine qua non for breaking the impasse. And that became possible through Respondent's decision to go it alone on this issue and to withdraw from the group, thus clearing the way for a resolution of this issue by those who remained in the multiemployer negotiations.\n\n\n25\n\"Under these circumstances, the failure of the union to protest Respondent's withdrawal is quite understandable, but as one understands it in this light, it is equally clear that its silence meant, and was indeed intended to mean, acquiescence.\n\n\n26\n\"And it seems particularly incongruous for this Board to find a defecting member of a bargaining group guilty of a bad-faith bargaining when, as here, his leaving the negotiations permitted . . . and indeed was essential to . . . further progress toward meaningful bargaining between the employer group and the union.\"\n\n\n27\nFor these reasons, we conclude that the Board's finding that there was no impasse as well as no consent on the part of the Union is not supported by the record. Consequently, Fairmont's withdrawal was excused, and it was not therefore in violation of 8(a)(5) and (1).\n\n\n28\nEnforcement denied.\n\n\n\n1\n We find it particularly incongruous that the Board refused to uphold the withdrawal of Fairmont from the negotiations while impliedly approving the Union's negotiation of separate contracts with three of the members of the Association during the impasse. While it is claimed that these contracts were merely interim agreements which were intended to be merged later into the Association agreement, the written agreement with Country House, Inc. was used as the basis for withdrawing the pickets from that employer's premises and contains no such reservation except as to the load limit issue. The balance of that written agreement clearly binds both the Union and Country House to specific changes in the existing agreement for a two-year period from May 1, 1971, through April 30, 1973; and if that agreement was merged into the Association agreement later negotiated, it was done by oral agreement of the parties thereto\n\n\n"} -{"text": "903 F.2d 299\nHUTTO STOCKYARD, INC.; John D. Hutto; Charles L. Hutto, Petitioners,v.UNITED STATES DEPARTMENT OF AGRICULTURE, Respondent.\nNo. 89-2717.\nUnited States Court of Appeals,Fourth Circuit.\nArgued Jan. 11, 1990.Decided May 9, 1990.\n\nKaren J. Williams, Williams & Williams, Orangeburg, S.C., for petitioners.\nEllen Ruth Hornstein, Office of the Gen. Counsel, U.S. Dept. of Agriculture, Washington, D.C., for respondent.\nC. Bradley Hutto, Charles H. Williams, Williams & Williams, Orangeburg, S.C., on brief, for petitioners.\nJames Michael Kelly, Associate Gen. Counsel, Raymond W. Fullerton, Asst. Gen. Counsel, Margaret M. Breinholt, Deputy Asst. Gen. Counsel, U.S. Dept. of Agriculture, Washington, D.C., for respondent.\nBefore POWELL, Associate Justice (Retired), Supreme Court, sitting by designation, and CHAPMAN and WILKINS, Circuit Judges.\nWILKINS, Circuit Judge:\n\n\n1\nHutto Stockyard, Inc., John D. Hutto, and Charles L. Hutto (collectively Hutto) petition for review of the decision of a Judicial Officer for the United States Department of Agriculture (USDA) that Hutto violated statutory and regulatory provisions of the Packers and Stockyards Act (Act), 7 U.S.C.A. Secs. 181 et seq. (West 1980 & Supp.1990). The Judicial Officer (JO), adopting the order of the Administrative Law Judge (ALJ) as the final order of the Secretary, suspended Hutto as a registrant under the Act for 90 days,1 fined it $20,000, and ordered it to cease and desist from violating the Act. Hutto contends that USDA failed to comply with the Administrative Procedures Act (APA) and that USDA deprived it of due process. In addition, Hutto contends that the decision of the Secretary is not supported by substantial evidence and that the monetary penalty imposed is excessive. We affirm in part, reverse in part, vacate in part, and remand.\n\nI.\n\n2\nHutto Stockyard, Inc., operates a livestock market in Holly Hill, South Carolina, and a hog buying station in Manning, South Carolina. Charles Hutto and his son operate the Manning buying station at which they essentially serve as middlemen for farmers selling hogs. Hogs are weighed at the station, purchased for an amount based on the hogs' weight, and re-sold to packers for an amount based on this same weight for a few cents more per pound.\n\n\n3\nIn April 1987, Packers and Stockyards Administration representatives David Auten and Ben Baird conducted a \"sting\" operation to investigate the weighing practices at Hutto's Manning buying station. After weighing 13 hogs on a scale in their truck, Auten and Baird transported them to Manning where they reweighed six of the hogs and recorded the weights. Impersonating a farmer, Auten then transported these six hogs to Hutto's buying station where he offered to sell them.\n\n\n4\nHutto's weighmaster weighed Auten's six hogs in three drafts: two of the hogs were weighed individually, and four were weighed together. As the following chart illustrates, the weights of the hogs as determined by the weighmaster were less than the weights earlier determined by Auten and Baird:\n\n\n5\nDraft No. No. of Hogs USDA Weight Hutto Weight Discrepancy In Pounds\n 1 1 401 390 11\n 2 4 813 795 18\n 3 1 176 165 11\n----------\n\n\n6\nAfter receiving payment for the hogs, Auten left the buying station to join Baird who had remained a short distance away. The two men then reweighed the second group of seven hogs on their scale and drove back to the buying station where the weighmaster weighed the hogs in two drafts: six together and one individually. Again, there were discrepancies between the weights determined by the weighmaster and the weights earlier determined by Auten and Baird:\n\n\n7\nDraft No. No. of USDA Weight Hutto Weight Discrepancy In Pounds\n Hogs\n 4 6 1412 1390 22\n 5 1 204 200 4\n----------\n\n\n8\nAuten testified that he observed the weighmaster insert the scale ticket in the poise2 before weighing the hogs. Auten further testified that the weighmaster was closing the trig loop latch when the indicator needle was above rather than in the target area of the Spinks indicator. He also testified that the weighmaster was not balancing the scale every 15 minutes or 15 weighing drafts, whichever came first. Additionally, according to Auten's testimony, after the hogs were weighed, the weighmaster gave him the scale tickets and a check in payment for the hogs. The scale tickets did not show the date of weighing or the weighmaster's initials or name, and were imprinted with the location of the Holly Hill livestock market rather than the Manning buying station.\n\n\n9\nAccording to Auten and Baird, three mechanical factors contributed to the short-weighing. First, the scale was \"back-balanced\" by two pounds, causing it to weigh two pounds light. Back-balancing results when the scale is balanced while accumulated debris (such as manure) remains on the scale. Second, inserting the scale ticket in the poise before the scale registered the hogs' weight caused the scale to weigh an additional two pounds light. Finally, Auten and Baird disassembled the poise and inside found a dead mouse, straw, and acorns.3 Auten and Baird stated that the dead mouse caused the scale to short-weigh by up to nine pounds.\n\n\n10\nUSDA charged Hutto with falsely weighing livestock in violation of 7 U.S.C.A. Sec. 213(a) (West 1980) which, inter alia, prohibits stockyard operators from using \"any unfair ... or deceptive practice or device in connection with ... [the] weighing ... of livestock.\"4 USDA contends that Hutto caused the false weighing by:\n\n\n11\n(1) failing to balance the empty scale every 15 minutes or 15 drafts, whichever came first, 9 C.F.R. Sec. 201.73-1(a)(1) (1989);\n\n\n12\n(2) back-balancing the scale, id.;\n\n\n13\n(3) closing the trig loop latch when the indicator needle was above rather than in the target area, 9 C.F.R. Sec. 201.73-1(b)(1)(i) (1989);\n\n\n14\n(4) inserting the scale ticket in the poise before weighing, 9 C.F.R. Sec. 201.73-1(g)(1) (1989); and\n\n\n15\n(5) allowing material (the mouse and its nest) to accumulate in the poise, id.\n\n\n16\nIn addition, USDA alleged that Hutto violated 7 U.S.C.A. Sec. 221 (West Supp.1990) by issuing improperly completed scale tickets.5\n\n\n17\nThe ALJ found that Hutto had committed the alleged violations, albeit without bad motive or intent. Hutto appealed the decision of the ALJ to the JO. The JO adopted the ALJ's decision as the final order, but \"inferred\" from the record that Hutto had a financial motive to falsely weigh and that it willfully violated the Act.\n\nII.\n\n18\nHutto contends that the decision of the Secretary that it falsely weighed hogs is not supported by substantial evidence. At the administrative hearing before the ALJ, Hutto presented extensive evidence disputing the allegation of false weighing. It argued that the discrepancy between the weights obtained by Auten and Baird and those of the weighmaster could be accounted for by considering (1) the three mechanical factors relating to the scale (back-balancing, prematurely inserting the scale ticket in the poise, and the dead mouse in the poise), (2) the fact that the USDA scale weighed in one-pound intervals and Hutto's scale weighed in five-pound intervals, and (3) the \"shrinkage\" (weight loss due to perspiration, urination, defecation, and tissue loss) of the hogs between the time of USDA and Hutto weighings, as established by expert veterinary testimony. Hutto contends that once these factors are considered, no discrepancy between the USDA and Hutto weights remains, and thus no evidence exists to support the ALJ's finding of a violation of section 213(a). Moreover, the weighmaster testified that he periodically balanced the scale and that there was no evidence that the back-balancing was caused by anything other than the accumulation of debris resulting from the continuous weighing of hogs that morning. Hutto also offered the testimony of two sellers that the weighmaster closed the trig loop latch when the indicator needle was in the target area. Our review of the record demonstrates that Hutto offered a plethora of evidence which would fully support a finding in its favor.\n\n\n19\nHowever, the ALJ essentially rejected all of the testimony offered by and on behalf of Hutto and accepted all of the testimony offered by the government witnesses. Since we may not assess and pass on the credibility of witnesses, we cannot say the ALJ's findings do not meet the substantial evidence test.\n\nIII.\n\n20\nWe first address the 90-day suspension.6 Under the APA Hutto could be suspended as a registrant under the Act \"only if, before the institution of agency proceedings therefor, [it] has been given--(1) notice by the agency in writing of the facts or conduct which may warrant the action; and (2) opportunity to demonstrate or achieve compliance with all lawful requirements.\" 5 U.S.C.A. Sec. 558(c) (West 1977). However, this pre-suspension notice is not required if Hutto willfully violated the Act. Id.\n\nA.\n\n21\nHutto contends that it was not given notice of the facts or conduct warranting suspension as required by section 558(c) of the APA. It concedes that during the 1960's and 1970's USDA issued several written warnings concerning possible improper weighing and record-keeping practices at the Holly Hill location. Although USDA argues that these warnings constituted sufficient notice, the last warning was given in 1976, more than a decade before the instant violations. Also, USDA inspected Hutto's Holly Hill location in 1982 and found that Hutto was employing proper weighing procedures. We therefore conclude that, under the circumstances here, the outdated warning letters do not constitute the notice envisioned and required by section 558(c).7\n\nB.\n\n22\nThus, under the APA the suspension of Hutto was not proper unless it willfully violated the Act. We note initially that the Supreme Court has held that nothing in 7 U.S.C.A. Sec. 204 (West 1980), authorizing suspensions under the Act, \"confines its application to cases of 'intentional and flagrant conduct' or denies its application in cases of negligent or careless violations.\" Butz v. Glover Livestock Comm'n Co., 411 U.S. 182, 187, 93 S.Ct. 1455, 1458, 36 L.Ed.2d 142 (1973). Glover, however, concerned the level of conduct necessary to warrant suspension under the Packers and Stockyards Act in a case in which the notice requirement of section 558(c) of the APA had been satisfied. Here, by contrast, the notice requirement was not satisfied and consequently the conduct must rise to the level of willfulness required to justify suspension under section 558(c) of the APA. We agree with the Tenth Circuit that, in the context of a suspension under the Packers and Stockyards Act, \"willfulness\" for purposes of section 558(c) means \"an intentional misdeed or such gross neglect of a known duty as to be the equivalent thereof.\" Capitol Packing Co. v. United States, 350 F.2d 67, 78-79 (10th Cir.1965). A less stringent definition may collide with the requirements of administrative due process and would betray the plain meaning of the word.\n\n\n23\nNotwithstanding the specific finding of the ALJ that there was no evidence to support a finding of willfulness, the JO \"inferred\" that Hutto's acts were intentional.8 His inference was derived from the frail premises that prematurely inserting the scale ticket in the poise \"necessarily results in shortweighing\" and that the weighmaster closed the trig loop latch when the needle was above rather than in the target area. Although stating that existence of a motive to short-weigh is irrelevant for purposes of determining whether conduct is intentional, the JO speculated that by short-weighing Hutto could receive a better price from packers who would have obtained more favorable yields due to the short-weighing. In addition, the JO ventured that perhaps Hutto was offering to pay more per pound than competing hog buyers and thus was luring sellers from surrounding markets. The record is barren of any evidence, direct or indirect, to support these unwarranted speculative theories. We specifically reject them as totally unconfirmed by the record or the reality of the marketplace. Furthermore, the ALJ specifically found that \"[t]here is no evidence that [Hutto] received financial gain or improved standing with buyers or sellers as a result of alleged misweighing.\" Indeed, if Hutto had wished to benefit financially by deceptive weighing, it logically would have weighed the hogs artificially high, for the amount of profit it realized increased proportionally by the weight attributed to the hogs at the time it purchased them, for this same weight was the basis on which packers paid Hutto. There was no economic incentive to short-weigh and while short-weighing resulted in a loss to the sellers, it likewise resulted in a loss to Hutto.\n\n\n24\nWe hold that the JO's \"inference\" that Hutto intentionally violated the Act is not supported by substantial evidence. Therefore, because Hutto did not receive reasonable notice, the 90-day suspension is set aside for failure to comply with the requirements of the APA.\n\nIV.\n\n25\nThe JO affirmed the ALJ's order fining Hutto $20,000. In support of the imposition of this fine, USDA contends that Hutto committed six separate violations of the Act: five violations of 7 U.S.C.A. Sec. 213(a) (engaging in false and deceptive weighing practices) and one violation of 7 U.S.C.A. Sec. 221 (failing to maintain proper record-keeping procedures).\n\nA.\n\n26\nDecisions of the Secretary may be set aside if found to be \"arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.\" 5 U.S.C.A. Sec. 706(2)(A) (West 1977). 7 U.S.C.A. Sec. 213(b) requires the Secretary, before assessing monetary penalties for a violation of section 213(a), to consider (1) the gravity of the offense, (2) the size of the business involved, and (3) the effect of the penalty on the person's ability to continue in business. See Spencer Livestock Comm'n Co. v. Department of Agric., 841 F.2d 1451, 1457 (9th Cir.1988); Bosma v. United States Dep't of Agric., 754 F.2d 804, 810 (9th Cir.1984). As the proponent of the penalty, USDA bears the burden of producing evidence that the penalty was reasonable. 5 U.S.C.A. Sec. 556(d) (West 1977); Bosma, 754 F.2d at 810. While the record shows that the ALJ and the JO gave some consideration to the first factor, the gravity of the offense, before assessing the $20,000 penalty,9 USDA conceded at oral argument that the record demonstrates that neither the ALJ nor the JO explicitly considered the second and third factors. Indeed, a strained reading of the record does not allow a conclusion that even indirect consideration was given to these two other equally important factors. Consideration of all three factors is mandated by statute and is far from a technical requirement. The need for full consideration of these equally important factors is vividly demonstrated here since the penalty imposed is almost three times the amount of the 1986 net profit of Hutto Stockyard. Thus, on the basis that it was imposed \"not in accordance with law\" since the Secretary failed to comply with the statutory requirements, we vacate and remand for reconsideration of the imposition of the section 213(b) monetary penalty.\n\n\n27\nIn addition to failing to consider all of the statutory factors, the fine imposed exceeds the statutory maximum. USDA contends that Hutto committed five separate violations of section 213(a): failing to balance the empty scale every 15 minutes or 15 drafts, back-balancing the scale, closing the trig loop latch when the indicator needle was above rather than in the target area, inserting the scale ticket in the poise before weighing, and allowing material to accumulate in the poise. Yet it is unclear from the record, the opinion of the ALJ, or the opinion of the JO how many acts Hutto was actually found to have committed to support the finding of a violation of section 213(a); it is clear, however, that whatever acts were relied upon all occurred contemporaneously.\n\n\n28\nSection 213(a) prohibits the use of \"any unfair ... or deceptive practice or device in connection with ... [the] weighing ... of livestock.\" False weighing is an unfair or deceptive practice under the Act. However, the methods by which a stockyard operator allegedly causes false weighing--whether it is back-balancing or not discovering that a mouse has entered and died in the poise--although violative of the regulations, are not in themselves unfair or deceptive practices supporting separate violations of section 213(a). Rather, they are evidence that an unfair and deceptive practice of false weighing may have occurred. To hold otherwise would allow an operator to be successively penalized under section 213 for what is actually only one violation. Cf. Bell v. United States, 349 U.S. 81, 75 S.Ct. 620, 99 L.Ed. 905 (1955) (when criminal statute ambiguous as to whether simultaneous transportation of more than one person in violation of the Mann Act exposed defendant to cumulative punishment, doubt resolved against turning single transaction into multiple offenses).\n\n\n29\nWe see no reasonable basis for finding that Hutto committed more than one unfair or deceptive \"practice\" of false weighing. \"Practice\" within the context of section 213 means \" 'uniformity and continuity, and does not denote a few isolated acts.' \" Guenther v. Morehead, 272 F.Supp. 721, 727 (S.D.Iowa 1967) (quoting McClure v. E.A. Blackshere Co., 231 F.Supp. 678, 682 (D.Md.1964)); see also Capitol Packing, 350 F.2d at 77 (to find violation of section 213(a), \"a specified manner of dealing must be found to be unfair or deceptive\"). The conduct USDA complains of here occurred during a few hours of a single day. Accordingly, we hold that the facts of this case support a finding of only one violation of section 213(a).\n\nB.\n\n30\nThe ALJ also found that Hutto violated 7 U.S.C.A. Sec. 221 by issuing improperly completed scale tickets. Specifically, he found that the scale tickets did not show the date of weighing, the weighmaster's initials or name and listed Hutto's Holly Hill rather than Manning location. See 9 C.F.R. Sec. 201.49(a) (1989). Section 221, the statutory analog to 9 C.F.R. Sec. 201.49, requires a stockyard owner to \"keep such accounts, records, and memoranda as fully and correctly disclose all transactions involved in his business.\" 7 U.S.C.A. Sec. 221. This section further provides that if the Secretary finds that the accounts, records, and memoranda of a stockyard owner do not fully and correctly disclose all transactions involved in his business, the Secretary may prescribe the manner and form in which such materials are to be kept. Thereafter, the stockyard owner who fails to keep such material in the prescribed manner and form \"shall upon conviction be fined not more than $5,000, or imprisoned not more than three years, or both.\" 7 U.S.C.A. Sec. 221.\n\n\n31\nWe hold that section 221 is inapplicable here. First, the section requires that the stockyard owner be notified by the Secretary that his method of keeping accounts, records, and memoranda is inappropriate. The only notification Hutto received concerning record-keeping practices was contained in the outdated warning letters discussed earlier. For the same reasons that Hutto was not given proper pre-suspension notice under the APA, we hold that it was not given proper notice pursuant to section 221.\n\n\n32\nSecond, since application of the regulation to Hutto was a final agency action, it may be set aside only if it was \"arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.\" 5 U.S.C.A. Sec. 706(2)(A). \"To make this finding the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one.\" Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971) (citations omitted). Applying this standard of review, we are \"required to make a careful inquiry to determine the reasonableness of the administrative interpretation and application of the regulation.\" Phelps Dodge Corp. v. Federal Mine Safety and Health Review Comm'n, 681 F.2d 1189, 1192 (9th Cir.1982). In Phelps the Ninth Circuit reversed an order of the Federal Mine Safety and Health Review Commission fining Phelps for allegedly violating a mine safety regulation. The regulation at issue mandated that \"[e]lectrically powered equipment shall be deenergized before mechanical work is done on such equipment. Power switches shall be locked out or other measures taken which shall prevent the equipment from being energized without the knowledge of the individuals working on it.\" Id. at 1191 n. 1. Two Phelps employees were standing on a \"panfeeder\" cleaning out a rock-clogged drop chute when an agency inspector arrived. The employees often used the panfeeder to jostle the rocks and move loose stones. Because they were cleaning out the chute and the panfeeder was electrically powered, the employees were engaged in \"mechanical work\" on \"electrically powered equipment.\" Although the Phelps employees had turned off the electrical power to the panfeeder at a nearby control box, they had not \"locked out\" the panfeeder by flipping a power switch in a distant control room. The agency inspector issued an order and fine based on the failure to \"lock out\" the panfeeder.\n\n\n33\nOn judicial review Phelps contended that \"the regulation has been incorrectly applied in this case because its basic purpose, fairly read, is to protect workers from the hazards of electrical shock, not such hazards as may attend removal of rocks from the chute.\" Id. at 1192. The Ninth Circuit held that the Secretary abused his discretion by applying the regulation to the facts of the case because \"[t]he regulation inadequately expresses an intention to reach the activities to which [the agency] applied it.\" Id. at 1193. The court was persuaded that the regulation was only intended to protect workers from injuries caused by electric shock and, if a different intent existed, fair warning of the reach of the regulation had not been given.\n\n\n34\nThe rationale of Phelps applies a fortiori here because, as USDA acknowledged, section 201.49 is intended to protect a seller whose animal is weighed but not immediately purchased and the seller and animal are separated for several hours or more between the weighing and purchase. Here, after each weighing, the seller was paid immediately for the hog(s) according to the weight determined in the seller's presence.10 Indeed, USDA conceded at oral argument that enforcement of section 201.49 under these facts would serve no rational purpose and remedy no harm since other documents which Hutto gave to the sellers provided all the information required by the regulation. We hold that enforcement of the regulation under these facts is unreasonable and amounts to an abuse of discretion. Accordingly, we reverse the finding of the Secretary that Hutto violated section 221.V.\n\n\n35\nIn conclusion, we vacate the suspension order and vacate and remand the monetary penalty. On remand the Secretary is instructed to consider, in accordance with 7 U.S.C.A. Sec. 213(b), the fact that this violation was not committed willfully, the size of Hutto's business and the effect of the proposed penalty on Hutto's ability to continue in business. Additionally, we hold that on remand Hutto may only be sanctioned for one violation of section 213(a). We also reverse the finding of the Secretary that Hutto violated section 221. We affirm the cease and desist order.\n\n\n36\nAFFIRMED IN PART; REVERSED IN PART; VACATED IN PART; AND REMANDED WITH INSTRUCTIONS.\n\n\n\n1\n This order prohibits Hutto Stockyard from operating its business at all locations for the entire suspension period\n\n\n2\n The Hutto Stockyard scale weighs in five-pound increments. Although larger in size, it is similar in design to a physician's scale. The weight is ascertained by sliding the \"poise\" along the horizontal main bar until it reaches the proper 100-pound increment. The \"knurl\" on the poise is then turned to the nearest five-pound increment. Then, when the needle on the \"Spinks indicator\" settles in the target area, the trig loop latch is closed, the scale ticket is inserted in the poise, and the printing handles are squeezed (printing the weight on the scale ticket). If the trig loop latch is closed by the weighmaster when the indicator needle is above rather than in the target area, the printed weight will be artificially low. Likewise, if the latch is closed when the indicator needle is below rather than in the target area, the printed weight will be artificially high\n\n\n3\n The South Carolina Department of Agriculture had conducted its biannual inspection of the scale a week earlier and found it to be in proper operating condition. The poise is the most delicate part of the scale and is enclosed within a metal box. USDA regulations prohibit weighers from adding material to or otherwise tampering with the poise. 9 C.F.R. Sec. 201.73-1(g)(1) (1989). Moreover, when a weigher, such as Hutto, \"has reason to believe that a scale is not functioning properly\" he may not repair the scale but \"shall discontinue weighing, report the facts to the parties responsible for scale maintenance, and request inspection, test, or repair of the scale.\" 9 C.F.R. Sec. 201.73-1(g)(4)\n\n\n4\n Violation of section 213(a) carries a maximum fine of $10,000. 7 U.S.C.A. Sec. 213(b)\n\n\n5\n Violation of section 221 carries a maximum fine of $5,000\n\n\n6\n Although both the order of the ALJ and the order of the JO suspended Hutto Stockyard and John and Charles Hutto as registrants under the Act, USDA notes in its brief that only Hutto Stockyard could actually be suspended because only it was registered under the Act\n\n\n7\n Nor are we persuaded by the strained contention of USDA that notice should be imputed to Hutto because it once acknowledged on a form that it had read \"Packers and Stockyards Scales and Weighing Memorandum No. 3,\" which mentions the regulations pertaining to weighing and record keeping\n\n\n8\n The JO attached his 37-page \"USDA Sanction Policy\" as an appendix to the 69-page order. This appendix pontificates on the nature and goals of punishment and champions the deterrent effects of the severe sanction policy of the USDA. The didactic and punitive tone of the appendix is punctuated with quotations from Nietzsche, Plato, Socrates, and the Bible, as well as several contemporary philosophers. Significantly, the JO admits in the appendix that: \"Frequently, I infer that certain conduct was intentional and done with knowledge of unlawfulness (for the benefit of reviewing judges who may dislike my hard-nosed sanction policy ).\" (Emphasis added.)\nThe JO's self-described policy of reflexively inferring intentional conduct belies any contention that his finding on this issue is supported by substantial evidence. In fact, as the Sixth Circuit observed while reviewing a decision of this same JO, there has been a \"near approach\" to a breach of the line between judging and prosecuting. Parchman v. United States Dep't of Agric., 852 F.2d 858, 866 (6th Cir.1988) (reviewing JO's decision and finding \"disturbing instances of what may appear to be a punitive mentality overriding individual considerations\").\n\n\n9\n Neither the method used by the ALJ and the JO in calculating this penalty nor the amount of the penalty respectively attributable to the violations of sections 213(a) and 221 are found in the record. Furthermore, two important factors should have been given paramount consideration when assessing the gravity of the offense--that no willful or intentional misconduct was involved and that no financial gain or other advantage accrued to Hutto\n\n\n10\n USDA cites as evidence of this violation the fact that the ticket given to the seller immediately after weighing listed the site of the weighing as Holly Hill rather than Manning. This argument illustrates the position in which USDA's overbearing approach has placed it, for no one can seriously believe that a seller who has transported his hog to the Manning location will be persuaded that he actually drove to Holly Hill because his ticket listed the Holly Hill location and is thus somehow unfairly treated\n\n\n"} -{"text": "\n316 S.W.3d 616 (2008)\nDoris JONES and Billy Jones\nv.\nLisa June COX.\nNo. W2008-00729-COA-R9-CV.\nCourt of Appeals of Tennessee, at Jackson.\nOctober 21, 2008 Session.\nNovember 25, 2008.\nApplication for Permission to Appeal Denied by Supreme Court June 1, 2009.\n*617 Winston S. Evans, Jeffrey J. Switzer, Nashville, TN, for Appellant.\nWilliam B. Ryan, Memphis, TN, for Appellee.\n\nOPINION\nJ. STEVEN STAFFORD, J., delivered the opinion of the court, in which DAVID R. FARMER, J., and HOLLY M., KIRBY, J., joined.\nThis is a Tenn. R.App. P. 9 appeal from the trial court's denial of Appellant/Defendant's motion to dismiss the Appellees/Plaintiffs' complaint for legal malpractice. Appellant, a licensed attorney, represented the Appellees in a lawsuit following an automobile accident. Appellant failed to effect service of process on the party-defendant to that suit. Appellees retained other counsel and filed a legal malpractice lawsuit against Appellant. Appellees' new counsel made a strategic decision to withhold service of process on Appellant pending the outcome of the underlying case. Appellant filed a motion to dismiss pursuant to Tenn. R. Civ. P. 4.01(3) for intentional delay of service of process. The trial court denied the motion to dismiss, and this appeal followed. We reverse and remand.\nOn August 27, 2003, Doris Jones was involved in a car accident in Jackson, Tennessee. On that date, Ms. Jones' vehicle was struck from the rear by a vehicle driven by Susannah P. Johnson. As a result of the accident, Ms. Jones suffered an injury to her neck.\nFollowing the accident, Ms. Jones and her husband, Billy J. Jones (together \"Appellees\"), retained Appellant Lisa June Cox to provide legal representation in their lawsuit against Ms. Johnson. On August 23, 2004, Ms. Cox filed a complaint *618 against Ms. Johnson in the Circuit Court at Madison County on behalf of the Joneses. On the same day, Ms. Cox prepared and caused a summons to be issued and served on Ms. Johnson at a Jackson, Tennessee address. The summons was returned \"unserved\" on August 26, 2004. The deputy sheriff who attempted to serve Ms. Johnson made the following notation on the summons: \"Not found, moved out approximately three months ago to Powder Springs, GA.\"\nOn or about December 1, 2005, the Joneses met with Ms. Cox. At that meeting, Ms. Cox first informed the Joneses that their case against Ms. Johnson might be in trouble due to the failure to effect service of process on Ms. Johnson. On February 13, 2006, Ms. Cox sent a letter to the Joneses, informing them, among other things, that process had not been served on Ms. Johnson, and that Ms. Cox had not obtained an address for Ms. Johnson. In her letter, Ms. Cox opines: \"I believe that the time limit has passed for us to find [Ms. Johnson] and service to be reissued.\" Ms. Cox informs the Joneses that, if she is unsuccessful in locating and serving Ms. Johnson, then \"you [the Joneses] may want to see another lawyer ... or contact my insurance carrier directly.\" Upon receipt of the letter, the Joneses dismissed Ms. Cox as their attorney, and retained William Ryan as their counsel. Mr. Ryan was able to locate and serve Ms. Johnson on March 2, 2006. In response, Ms. Johnson (and her insurance carrier) filed a motion to dismiss the Jones' complaint and/or for summary judgment. As grounds, Ms. Johnson averred that the complaint and summons were not served within the time allowed under Tennessee law; consequently, Ms. Johnson argued that the applicable statute of limitations had expired, resulting in a bar to the Jones' lawsuit against her. On August 8, 2006, the circuit court granted Ms. Johnson's motion, thereby dismissing the Jones' complaint against Ms. Johnson.\nOn November 20, 2006, the Joneses, through their new attorney, filed a complaint for legal malpractice against Ms. Cox, alleging that she had failed to exercise due diligence in attempting to effect service of process on Ms. Johnson. Although a summons was issued on that same day, the Jones' attorney did not attempt service. Some nine months later, on August 28, 2007, a second summons was issued and service on Ms. Cox was attempted. Service was made on September 7, 2007.\nOn October 11, 2007, Ms. Cox filed a motion to dismiss the complaint pursuant to Tenn. R. Civ. P. 12.02(5) and (6).[1] On January 8, 2006, the Joneses filed a response to Ms. Cox's motion to dismiss. The Affidavit of their attorney, Mr. Ryan, was filed as an exhibit to the response. Therein, Mr. Ryan does not deny delaying service of process in the Jones' case against Ms. Cox; his reasons, as set out in the affidavit, are as follows:\n3. After I became involved in the [Jones'] case against Ms. Johnson, I put Ms. Cox's insurance carrier on notice of a potential legal malpractice claim against Ms. Cox. During the [Jones'] lawsuit against Ms. Johnson, I worked with Winston Evans, who was an attorney hired by Lisa June Cox's insurance carrier....\n* * *\n\n*619 5. After the [Jones'] lawsuit against Ms. Johnson was dismissed ... and while the case was on appeal, I had numerous discussions in the late summer/early fall of 2006 with Winston Evans concerning resolution/settlement of the [Jones'] legal malpractice claim against Lisa June Cox.... [S]ettlement discussions did not prove to be fruitful.\n6. On October 9, 2006, I advised Mr. Evans that I was going to proceed forward and file a lawsuit ... against Ms. Cox....\n* * *\n8. Thereafter, the parties discussed entering into a tolling agreement to avoid the [Joneses] having to unnecessarily file suit against Ms. Cox while the [Jones'] case against Ms. Johnson was still pending. But the parties were not able to agree....\n9. On November 20, 2006, while their case against Ms. Johnson was still on appeal, the [Joneses] filed a lawsuit against Lisa June Cox alleging legal malpractice.... A Summons was issued for service on Lisa June Cox on that same date.\n10. At the time that the [Jones'] lawsuit was filed against Ms. Cox, I believed that the [Joneses] had ninety (90) days under Tenn. R. Civ. P. 3 to serve Ms. Cox with a copy of the Complaint and Summons. I believed, per the terms of Tenn. R. Civ. P. 3, that if service was not made on Ms. Cox within the initial ninety (90) day period the summons could be re-issued on Ms. Cox at any time within one (1) year and the statute of limitations would be tolled. Moreover, I believed that if service was consummated on Ms. Cox that she would file a motion to stay the proceedings until the [Jones'] case against Ms. Johnson was resolved....\n11. Oral argument in the [Jones'] case against Ms. Johnson was held on April 18, 2007.\n12. On April 20, 2007, I called Winston Evans.... During this call, I notified Mr. Evans that the [Joneses] had filed a lawsuit against [Lisa June Cox] alleging legal malpractice....\n13. Believing that I had until at least November 20, 2007 to get the Summons re-issued, I waited to serve Lisa June Cox with process until after the Tennessee Court of Appeals rendered its decision. Had the Tennessee Court of Appeals not rendered its decision by the end of October of 2007, I would have proceeded to serve Ms. Cox with the lawsuit.\n14. As it happened, the Tennessee Court of Appeals issued its decision on July 16, 2007....\n15. After the Tennessee Court of Appeals decision I contacted Mr. Evans to discuss the ... case against Ms. Cox. On August 6, 2007, I sent a waiver of service form ... to Mr. Evans.... Mr. Evans contacted me on August 19, 2007 and advised that he could not execute the waiver.... On August 20, 2007, Mr. Evans contacted me and advised that he had authority from Ms. Cox to accept service....\n16. Thereafter, I caused another Summons to be issued and served on Lisa June Cox. The Summons was issued on August 28, 2007 and service was made on Ms. Cox ... on September 7, 2007.\n17. I did not intentionally delay service of the complaint on Ms. Cox to achieve any tactical advantage or benefit. Service on Ms. Cox was solely withheld in order to see whether the case against Ms. Johnson would be salvaged. If the case against Ms. Johnson were salvaged there would be no need to proceed *620 against Ms. Cox. Once the Tennessee Court of Appeals affirmed the trial court's decision dismissing the case, and the only avenue left was a permissive appeal to the Tennessee Supreme Court, Ms. Cox was served with the lawsuit.\nMs. Cox's motion to dismiss was denied by the trial court's Order of February 4, 2008. On February 28, 2008, Ms. Cox filed a motion seeking permission to appeal the trial court's decision to this Court pursuant to Tenn. R.App. P. 9.[2] On March 28, 2008, the trial court entered an order granting Ms. Cox permission to seek a Tenn. R.App. P. 9 appeal. By Order of May 5, 2008, this Court granted Ms. Cox's Tenn. R.App. 9 application for interlocutory appeal. Ms. Cox raises one issue for review:\nDoes an intentional nine and one-half month delay in service of a Summons after filing of a Complaint render the filing of the Complaint \"ineffective\" pursuant to T.R.C.P. 4.01(3)?\nThis issue involves a question of law. As such, we review the trial court's decision de novo upon the record with no presumption of correctness. Tenn. R.App. P. 13(d). As this Court recently discussed in Watson v. Garza, ___ S.W.3d ___ (Tenn.Ct.App.2008):\nBecause the trial court's jurisdiction of the parties is acquired by service of process, proper service of process is an essential step in a proceeding. The record must establish that the plaintiff complied with the requisite procedural rules, and the fact that the defendant had actual knowledge of attempted service does not render the service effectual if the plaintiff did not serve process in accordance with the rules.\n\"The Tennessee Rules of Civil Procedure govern the service of process, and the Supreme Court has held that the Rules of Civil Procedure are `laws' of this state, in full force and effect, until such time as they are superseded by legislative enactment or inconsistent rules promulgated by the Court and adopted by the General Assembly.\" \"Service of process must strictly comply to Rule 4 of the Tennessee Rules of Civil Procedure.\"\nId. at ___ (internal citations omitted).\nTenn. R. Civ. P. 4.01 reads, in relevant part, as follows:\n4.01. Summons; Issuance; By Whom Served\u0097(1) Upon the filing of the complaint the clerk of the court wherein the complaint is filed shall forthwith issue the required summons and cause it, with *621 necessary copies of the complaint and summons, to be delivered for service to any person authorized to serve process. This person shall serve the summons, and the return indorsed thereon shall be proof of the time and manner of service....\n* * *\n(3) If a plaintiff or counsel for plaintiff (including third-party plaintiffs) intentionally causes delay of prompt issuance of a summons or prompt service of a summons, filing of the complaint (or third-party complaint) is ineffective.\nSubsection (3) of the Tenn. R. Civ. P. 4.01 was adopted by our Supreme Court on December 10, 2003, and became effective July 1, 2004. It is undisputed that the Jones' cause of action against Ms. Cox accrued on December 1, 2005, when Ms. Cox informed the Joneses that their case against Ms. Johnson might be fatally flawed due to lack of service of process. The applicable statute of limitations for legal malpractice claims is one-year from the accrual thereof. Tenn.Code Ann. \u00a7 28-3-104(a)(2). A legal malpractice action accrues at the time the plaintiff knows, or should (in the exercise of reasonable diligence) know that an injury has occurred. See, e.g., John Kohl & Co., P.C. v. Dearborn & Ewing, 977 S.W.2d 528, 532 (Tenn.1998). The Joneses filed their complaint for legal malpractice against Ms. Cox on November 20, 2006, which was within the applicable statute of limitations. A summons was issued on that same day, but, as stated in Mr. Ryan's affidavit, he withheld service of process on Ms. Cox, pending the outcome of the Jones' case against Ms. Johnson. Another summons was issued nine months later on August 28, 2007, with service being made on Ms. Cox on September 7, 2007. The issue before us is whether this delay of service of process rendered the filing of the complaint ineffective, thus resulting in the expiration of the one year statute of limitations.\nThis Court recently addressed the applicability of Tenn. R. Civ. P. 4.01(3) in The Estate of Robyn Butler, et al. v. Lamplighter Apartments, et al., 278 S.W.3d 321 (Tenn.Ct.App.2008), wherein we held that:\nThe plaintiffs filed a Complaint and obtained issuance of summons for service on each defendant prior to October 14, 2005. The filing of the initial Complaint, however, was not effective because counsel for Plaintiffs intentionally caused the delay of prompt service of a summons. See Tenn. R. Civ. P. 4.01(3). The plaintiffs did not effectively file a complaint until after the statute of limitations had expired. Accordingly, all of the plaintiffs' claims are time barred.\nId. at 323-24.\nLikewise, the Jones' attorney admits in his affidavit that he did not attempt service of process on Ms. Cox because he was awaiting the outcome of the appeal in the underlying case. Although we concede that Mr. Ryan's strategy was logical given the fact that, had the dismissal of the Jones' case against Ms. Johnson been reversed, a malpractice suit against Ms. Cox would not be necessary, the rules simply do not allow attorneys to participate in this sort of waiting game. Under Tenn. R. Civ. P. 4.01(3) it is the intent to withhold service of process that is the test. From the facts in the record, and in light of Mr. Ryan's own sworn statements, it is clear that he intentionally withheld service of process in this case, albeit for a very reasonable purpose. As we determined in Butler, supra, an intentional delay under Tenn. R. Civ. P. 4.01(3) mandates a conclusion that the original complaint was not effectively filed. Regardless of the savings *622 exceptions set out in Tenn. R. Civ. P. 3.[3] (upon which the Joneses rely), the intent to withhold service of process makes the filing of the complaint on November 20, 2006 ineffective. Although a second summons was issued within a year of the initial summons, this did not toll the applicable statute of limitations.\nFor the foregoing reasons, we reverse the order of the trial court, and remand for entry of an order granting Ms. Cox's motion to dismiss. Costs of this appeal are assessed against the Appellees, Doris and Billy J. Jones, for which execution may issue if necessary.\nNOTES\n[1] Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion in writing: ..., (5) insufficiency of service of process, (6) failure to state a claim upon which relief can be granted....\n[2] Rule 9. Interlocutory Appeal by Permission from the Trial Court.\u0097(a) Application for Permission to Appeal; Grounds.\u0097Except as provided in Rule 10, an appeal by permission may be taken from an interlocutory order of a trial court from which an appeal lies to the Supreme Court, Court of Appeals or Court of Criminal Appeals only upon application and in the discretion of the trial and appellate court. In determining whether to grant permission to appeal, the following, while neither controlling nor fully measuring the courts' discretion, indicate the character of the reasons that will be considered: (1) the need to prevent irreparable injury, giving consideration to the severity of the potential injury, the probability of its occurrence, and the probability that review upon entry of final judgment will be ineffective; (2) the need to prevent needless, expensive, and protracted litigation, giving consideration to whether the challenged order would be a basis for reversal upon entry of a final judgment, the probability of reversal, and whether an interlocutory appeal will result in a net reduction in the duration and expense of the litigation if the challenged order is reversed; and (3) the need to develop a uniform body of law, giving consideration to the existence of inconsistent orders of other courts and whether the question presented by the challenged order will not otherwise be reviewable upon entry of final judgment. Failure to seek or obtain interlocutory review shall not limit the scope of review upon an appeal as of right from entry of the final judgment.\n[3] Tenn. R. Civ. P. 3 provides: \"All civil actions are commenced by filing a complaint with the clerk of the court. An action is commenced within the meaning of any statute of limitations upon such filing of a complaint, whether process be issued or not issued and whether process be returned served or unserved. If process remains unissued for 90 days or is not served within 90 days from issuance, regardless of the reason, the plaintiff cannot rely upon the original commencement to toll the running of a statute of limitations unless the plaintiff continues the action by obtaining issuance of new process within one year from issuance of the previous process or, if no process is issued, within one year of the filing of the complaint.\"\n"} -{"text": "849 F.2d 186\n1988 Copr.L.Dec. P 26,302, 7 U.S.P.Q.2d 1479\nESTATE OF Dean M. VANE, Richard J. Vane, Executorsubstituted in place and stead of Dean M. Vane,Deceased, Plaintiff-Appellant Cross-Appellee,v.THE FAIR, INC., Defendant-Appellee, Cross-Appellant,Vance-Mathews, Incorporated, Defendant-Appellee.\nNo. 87-2757.\nUnited States Court of Appeals,Fifth Circuit.\nJuly 14, 1988.Rehearing Denied Aug. 11, 1988.\n\nDana Andrew LeJune, Neal J. Mosely, Houston, Tex., Alto V. Watson, Beaumont, Tex., for Estate of Vane.\nDenise Hubbard, Lipscomb Norvell, Jr., Benckenstein, Norvell, Bernsen & Nathan, Beaumont, Tex., for Vance-Mathews, Inc.\nTom Hanna, Roger Hepworth, Mehaffy, Weber, Keith & Gonsoulin, Beaumont, Tex., for The Fair, Inc.\nAppeals from the United States District Court for the Eastern District of Texas.\nBefore WISDOM, RUBIN, and JONES, Circuit Judges.\nALVIN B. RUBIN, Circuit Judge:\n\n\n1\nThe owner of an infringed copyright asks this court to increase the amount of damages awarded it by the district court and to find liability on the part of a co-defendant the district court held to have been an innocent infringer. We find that the district court did not err in failing to base the damage award on those profits of the infringer allegedly attributable to the infringement because the infringer did not establish the amount of those profits, if any there were, and the court did not err in finding the co-defendant innocent. Accordingly, we affirm.\n\nI.\n\n2\nThe Fair, a chain of retail stores, hired photographer Dean Vane to prepare slides showing its merchandise with the stated purpose of using the slides in printed advertising material to be mailed to its customers. Later, however, The Fair hired Vance-Mathews, Inc., an advertising agency, to produce television commercials, which incorporated some of Vane's slides as well as a substantial amount of material from other sources. Several television stations aired the commercials. Vane brought an action based on copyright infringement against The Fair, asserting that his agreement with The Fair involved merely a license to use the slides to produce mailers and that he retained all other rights to the slides provided by copyright law. Vane also contended that Vance-Mathews, the advertising agency that had produced the commercials, was liable as an infringer. The dictrict court granted Vance-Mathews's motion for a directed verdict on the theory that Vance-Mathews was an innocent infringer and could therefore be liable only to the extent of profits it had gained through the infringement, of which there were none. The court held that The Fair was liable, and it awarded damages in the amount of $60,000, an amount representing the value of the use of the slides in the commercials. 676 F.Supp. 133. The court refused to make a damage award based on profits The Fair had accrued by virtue of the infringement; it found that the evidence was too speculative to support such an award. On appeal, Vane contends that the court erred in denying an award based on The Fair's profits and in granting Vance-Mathews's motion for a directed verdict.\n\nII.\n\n3\nIn a copyright infringement action, the infringer is liable for either statutory damages or the copyright owner's actual damages together with any additional profits of the infringer that are attributable to the infringement.1 Vane elected to seek actual damages and profits. The statute that authorizes this recovery also provides that in establishing the infringer's profits, the copyright owner need prove only the infringer's gross revenues, while the infringer must prove his deductible expenses and must show which elements of profits are attributable to sources other than the copyrighted work.2\n\n\n4\nVane attempted through discovery to obtain financial records of The Fair that would enable him to satisfy his burden of proving The Fair's gross revenues attributable to the infringement, but the records were not detailed enough to show the amount received from the sales of particular items shown in the slides. Therefore Vane attempted to establish The Fair's gross revenues, and ultimately its profits, by introducing as an expert witness Dr. Herbert Lyon, Professor of Marketing at the University of Houston's College of Business Administration. Dr. Lyon testified that he had conducted a multiple regression analysis designed to show how much each dollar The Fair spent on television advertising would yield in sales. Dr. Lyon examined monthly data, including profit-and-loss statements and summaries of media costs over a five-year period. He calculated that The Fair sold approximately $25.60 in merchandise for every dollar it spent on television advertising. He multiplied $25.60 by the number of dollars The Fair spent on the infringing television commercials to yield a gross revenue figure, then deducted certain costs to The Fair, including the actual cost that The Fair had paid for the merchandise it sold, transportation charges for getting the merchandise to the stores, a 3% allowance for pilferage, and some other direct operating expenses. After adjusting the resulting figure for inflation, Dr. Lyon concluded that The Fair's profits attributable to its infringement of Vane's slides exceeded $694,000. The district court held that Vane had not brought forth sufficient proof of The Fair's profits and refused to award damages based on Dr. Lyon's calculations.\n\n\n5\nWhen financial records sufficiently detailed to show an infringer's sales are not available, expert testimony may be used to develop either such proof3 or, as Vane attempted, proof of its profits rather than its sales. But it is the trial court's role to evaluate this testimony.4 The trial court in this case concluded, with ample basis, that the testimony introduced was inadequate to establish The Fair's profits attributable to the infringement.\n\n\n6\nIn conducting his analysis, Dr. Lyon took into account a variety of factors designed to refine his calculations. For instance, his model purported to consider seasonal sales trends, specifically the pre-Christmas boom in sales; the downward economic trend in the Houston area in the early 1980's; and the carryover effect by which an advertisement continues to contribute to some sales long after its initial airing. By taking such factors into account, Dr. Lyon testified, he attempted to produce a model that would analyze with the greatest possible precision the relationship between advertising dollars spent and resulting profits.\n\n\n7\nCross-examination, however, brought to light a number of potential shortcomings in this analysis. Dr. Lyon's model yielded only a lump-sum figure for profits attributable to the television commercials that contained infringed material as a whole without accounting for the fact that the infringed material constituted only a fraction of any given commercial. Some portion of the profits may have been attributable to the infringement, but much of the profits must be attributed to noninfringing aspects of the commercials. Testimony at trial showed from three perspectives why the use of an undifferentiated figure does not convincingly establish what profits are attributable to the infringement.\n\n\n8\nFirst, the cost of slides used in a commercial is only one of many expenses involved. The single figure for \"dollars spent on television advertising\" must be composed of lesser expenditures for a variety of goods and services: photographs used in the commercial, fees paid to the producer of the commercial, and air time for showing the commercial, to name a few. If, for instance, 50% of the cost to someone airing a commercial went to television stations to pay for air time, another 30% went to the producer, and 20% went to purchase ten slides used in the commercial, which also used five infringed slides, then it would be wholly illogical to treat the entire profits derived from airing the commercial as attributable to the five infringed slides. Yet this is, in essence, what Vane asked the district court to do. Dr. Lyon testified that he had adjusted the sales figures his model yielded to account for air time and production costs, but neither his testimony nor the computer printouts introduced as an exhibit make clear what this adjustment was. Even if Dr. Lyon's analysis accurately showed the relationship between dollars spent on advertising and profits yielded, it did not show the relationship between the dollars that should have been spent on the rights to use Vane's slides and the total television advertising costs. Evidence of this relationship might have provided a basis for showing what portion of the profits the commercials yielded were attributable to the infringement.\n\n\n9\nSecond, the infringed slides appeared during only part of the time the commercials were on the air. Vane testified that the general format of the commercials in question consisted of a \"trailer\" or introductory film segment setting forth a theme for the commercial, followed by a segment featuring various items of merchandise, concluding with another brief trailer. To the extent that Vane's slides appeared in the commercials, they appeared only in the middle segments, never in the trailers. Moreover, the middle segments that contained infringed slides also contained non-infringed slides. If only eight seconds of a thirty-second commercial contained infringed slides, it would be irrational to believe that all the profits the commercial brought in were due to those slides.\n\n\n10\nThird, Dr. Lyon's model did not purport to show the relative importance of different elements of the commercials in generating profits for The Fair. On cross-examination, counsel for The Fair asked Dr. Lyon:\n\n\n11\nIf we take your figures that are given here of some $600,000 that you say are attributable to the TV advertising dollar, do you express any opinion as to what percentage of that should be attributable to Mr. Vane's slides as contrasted to the work product of Vance-Matthews in putting the commercials together?\n\nDr. Lyon responded:\n\n12\nNo, sir.... I'm simply looking at the revenue or gross revenues generated by those ads. I did not look at the ads specifically. I don't think--I mean, I thought of that issue, but I don't think it can be answered.\n\n\n13\nPhotographs of particular items featured in commercials doubtless play a role in producing sales, but, we assume, so do such aspects of the commercials as text of the voice-overs, general slogans or phrases promoting the store itself, and overall concept of the commercial's message. Vane himself described the trailers that introduced the commercials as \"a very nice attention-getting device, which is the first responsibility of an ad.\" Dr. Lyon admitted on cross-examination that the carryover benefit of an advertisement promoting a particular sales event, such as a Father's Day sale or an Easter sale, would probably be achieved primarily because the advertisement promoted name recognition of the store that was holding the sale. But Dr. Lyon's model did not show what part of the Fair's profits should be attributed to these factors rather than to the use of the infringed slides.\n\n\n14\nBy pointing to these problems in Dr. Lyon's analysis, we do not suggest that a calculation based on a mathematical formula involving the ratio of fair cost of infringed material to entire cost of commercial, or length of air time of infringed material to length of entire commercial, would be the only means of showing profits. The question will often be highly fact-specific. We merely hold that it was not error for the district court to reject this attempt to show revenues attributable to the infringement as speculative.\n\nIII.\n\n15\nThe district court orally granted Vance-Mathews's motion for a directed verdict and later rendered judgment in favor of Vance-Mathews \"for the reasons announced by the Court at that time.\" Although the district court did not specifically state the statutory authority for its grant of the motion, we affirm on the basis that Vance-Mathews was an innocent infringer as defined by 17 U.S.C. Sec. 405(b) (1982). That section states, in relevant part:\n\n\n16\nAny person who innocently infringes a copyright, in reliance upon an authorized copy or phono record from which the copyright notice has been omitted, incurs no liability for actual or statutory damages under Section 504 [17 U.S.C. Sec. 504] for any infringing acts before receiving actual notice that registration for the work has been made under Section 408 [17 U.S.C. Sec. 408], if such person proves that he or she was misled by the omission of notice.\n\n\n17\nThe Copyright Act defines \"copies\" as \"material objects ... in which a work is fixed\"5 and provides that \"[t]he term 'copies' includes the material object ... in which the work is first fixed.\"6\n\n\n18\nVance-Mathews raised the defense of innocent infringement in its First Amended Original Answer and relied on Sec. 405(b) in its argument in support of its motion for a directed verdict. At trial, the president of Vance-Mathews testified that the agency had no knowledge that the slides were copyrighted, or that anyone claimed that they were copyrighted, or that the slides belonged to anyone other than The Fair. He also stated that if the slides had borne a notice of copyright, the agency would have checked with The Fair to see whether use of the slides in a commercial posed any problems. A senior vice-president of The Fair testified that none of the slides or photographs it received from Vane bore any copyright markings, nor did Vane attempt to have copyright markings affixed after he delivered the materials to The Fair. He further testified that at the time The Fair turned the slides over to Vance-Mathews, none of them bore copyright markings.\n\n\n19\nAlthough Vane testified that it was his practice to stamp slides with an indication of his copyright before sending them to clients, he acknowledged that \"some could have slipped through, I suppose, considering the volume of slides I tendered.\" At trial, counsel for The Fair presented Vane with 58 boxes of slides of his work as well as a number of black-and-white photographs that Vane had previously delivered to The Fair. Vane testified that if they were originals rather than copies of his slides and photographs, he would expect them to bear his copyright mark, but after inspecting them, he failed to identify a single slide or photograph that bore notice of copyright.\n\n\n20\nIn this non-jury trial, it was the judge's role to resolve any conflicting inferences arising from witnesses' testimony. Both Vance-Mathews executives testified unequivocally that the slides they received were not marked, and its president further testified that the agency would have inquired about ownership of rights to the slides if they had been so marked. The district court obviously chose to credit the testimony of the Vance-Mathews witnesses, because it entered a finding of fact that Vane failed to affix any copyright mark or notice to the slides he delivered to The Fair. The evidence was, therefore, sufficient to allow the court to grant Vance-Mathews's motion for a directed verdict on the theory that it was an innocent infringer misled by the omission of notice of copyright.\n\n\n21\nFor these reasons, we AFFIRM.\n\n\n\n1\n 17 U.S.C. Sec. 504 (1982)\n\n\n2\n Id. Sec. 504(b) (1982)\n\n\n3\n Shapiro Bernstein & Co. v. Remington Records, Inc., 265 F.2d 263, 266-72 (2d Cir.1959)\n\n\n4\n See, e.g., Equal Employment Opportunity Comm'n v. Datapoint Corp., 570 F.2d 1264, 1269-70 (5th Cir.1978)\n\n\n5\n 17 U.S.C. Sec. 101 (1982)\n\n\n6\n Id\n\n\n"} -{"text": "762 F.2d 1012\nUnpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.United States of America, Plaintiff-Appellee,v.Fred Farber, Defendant-Appellant.\nNo. 83-1792\nUnited States Court of Appeals, Sixth Circuit.\n4/10/85\n\nON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN\nBEFORE: Contie, Circuit Judge; and Phillips and Celebrezze, Senior Circuit Judges.\nPer Curiam.\n\n\n1\nDefendant-appellant Fred Farber was charged with forty-one counts of mail fraud, wire fraud, and interstate transportation of fraudulently obtained money. Farber was found guilty by a jury of four counts; a mistrial was declared as to the remaining counts. Farber appeals his convictions, asserting that the district court denied improperly his motion for acquittal, that the jury's verdict was not supported by substantial evidence, and that the district court made erroneous and prejudicial evidentiary rulings. After considering each contention, we affirm.\n\n\n2\nIn reviewing a motion for a judgment of acquital, the evidence and all reasonable inferences drawn from it must be viewed in the light most favorable to the government. E.g., United States v. Craven, 478 F.2d 1329, 1333 (6th Cir.), cert. denied, 414 U.S. 866 (1973). If the evidence is such that a reasonable mind might fairly find guilt beyond a reasonable doubt, the denial of a motion for a judgment of acquittal must be sustained. Id. A jury verdict must be upheld if, taking the view most favorable to the government, substantial evidence supports it. Glasser v. United States, 315 U.S. 60, 80 (1942). Viewing the evidence in accordance with these standards, we conclude that the district court's denial of the motion for acquittal and the jury's verdict must be upheld.\n\n\n3\nFarber's convictions for transporting in interstate commerce money in excess of $5,000 by means of false and fraudulent pretenses in violation of 18 U.S.C. Sec. 2314 and committing wire fraud in contravention of 18 U.S.C. Sec. 1343 arose from the following events. Farber and his nephew, Howard Farber, were both employed at the First National Monetary Investment Company where Farber was an account executive. In the course of his employment, Farber sold precious metals contracts to customers. He persuaded Harry Ryba to become a client of First Monetary; Ryba made a $373,000 purchase.\n\n\n4\nSubsequently, discussions arose between Farber and Ryba concerning the possibility that Ryba would finance Farber and his nephew, Howard, in setting up a new business. Both Ryba and Farber testified that four or five discussions took place. However, while Farber testified that Ryba agreed to invest money in a new business, Ryba testified that he never made a commitment to invest. Farber asserted at trial that he transferred and wired $50,000 from Ryba's account at First Monetary into his own with Ryba's permission. On the other hand, Ryba testified that, unknown to him at the time, his account with First National had an excess of funds and, moreover, that he did not give Farber permission to use this money to establish a new business. Ryba's testimony was corroborated by Howard Farber, who testified that Ryba 'didn't have much interest' in financing the proposed business.\n\n\n5\nFarber asserts that his convictions for violations of 18 U.S.C. Secs. 1343 and 2314 were improper because the government failed to establish intent. Intent to defraud is an element of both 18 U.S.C. Sec. 1343, United States v. Griffin, 699 F.2d 1102, 1105-06 (11th Cir. 1983), and 18 U.S.C. Sec. 2314, United States v. Walls, 577 F.2d 690, 696 n.7 (9th Cir.), cert. denied, 439 U.S. 893 (1978). We note, however, that a jury may infer intent from circumstantial evidence. In this case, sufficient evidence was presented from which a jury could infer intent. In essence, Farber asks this court to make a determination that his testimony was more credible than that of Ryba. This we decline to do. See Glasser v. United States, 315 U.S. 60, 80 (1942). Accordingly, we affirm the convictions based upon violations of 18 U.S.C. Secs. 1343 and 2314.\n\n\n6\nAfter Farber established his new business, Global Precious Metals Company, he obtained Yolanda Tecson as a client. Farber told Tecson she could purchase precious metals by putting 25% down and paying the balance within ninety days. Tecson sent Farber $3,250 as a down payment for certain metals and paid the balance, over $9,000, within ninety days. Although Farber informed Tecson she would receive her order in a matter of weeks, she never received the metals ordered. Moreover, Farber had initially told her that he had the metals in stock; he later indicated that he was attempting to fill her order. Howard Farber testified that his uncle misrepresented the nature of the business to customers. For example, although Farber told customers he could 'lock in' the price of metals, he never took the requisite steps to do so.1 Moreover, according to Howard, Global never purchased the metals for clients who put down 25%. In fact, customers' money was placed in Farber's general operating account and was not maintained in a separate account.\n\n\n7\nFarber was convicted of causing Tecson to mail in interstate commerce the check in excess of $9,000 (Tecson resided in Ohio; Global was located in Michigan) in violation of 18 U.S.C. Sec. 2314 and with knowingly mailing to Tecson a letter containing a purchase order receipt showing the purchase of $4,500 in gold in violation of 18 U.S.C. Sec. 1341. The plain language of both statutes requires Farber to have intended to defraud Tecson. See United States v. Rabinowitz, 327 F.2d 62, 76-77 (6th Cir. 1964). Farber asserts that no intent was shown and that he always intended to perform in good faith. However, considering the testimony of both Tecson and Howard Farber, we conclude that, when viewed in the light most favorable to the government, the convictions must be sustained.\n\n\n8\nFinally, Farber asserts that the district court made improper evidentiary rulings. Farber contends that the district court failed to allow him to impeach Ryba for interest and bias through the testimony of Farber's brother-in-law, Mayer Gordon, and Michael King, an officer at First Monetary.\n\n\n9\nAt trial, Farber attempted to impeach Ryba through Mayer Gordon. Defense counsel sought to question Gordon concerning a conversation which Gordon had with Ryba. Allegedly, statements made by Ryba to Gordon would have shown that he initially authorized the transfer of money to Farber, but later withdrew the authorization due to threats of a lawsuit by First Monetary. Extrinsic evidence is admissible to establish a prior inconsistent statement of a witness if the impeached party is given an opportunity to explain or deny the statement. Fed. R. Evid. 613(b). Although the party being impeached does not have to be given a prior opportunity to explain or deny the statement, e.g., United States v. Praetorius, 622 F.2d 1054, 1065 (2d Cir.), cert. denied sub nom., Label v. United States, 449 U.S. 860 (1980); United States v. Barrett, 539 F.2d 244, 254-56 (1st Cir. 1976); Fed. R. Evid. 613(b) advisory committee note, some opportunity to explain or deny the statement is still required, Fed. R. Evid. 613(b). In this case, Ryba was never questioned concerning any statement he made to Gordon. Consequently, the introduction of a prior inconsistent statement made by Ryba to Gordon would have been improper. Accordingly, the district court refused properly to allow Gordon's testimony.2\n\n\n10\nSimilarly, Farber contends that the district court limited improperly his questioning of Michael King. Defendant's counsel sought to show that First Monetary Company had threatened Ryba with a lawsuit for giving Farber the $50,000. Specifically, King was questioned as to whether First Monetary or anyone in an executive capacity at First Monetary was upset that Farber started his own business. Farber argues that these questions were relevant to establish Ryba's possible bias and interest in that they show that it was likely that Ryba was threatened with a lawsuit due to his financing of Global. Both of these questions, however, are plainly irrelevant. Fed. R. Evid. 401. Whether First Monetary was 'angry' at Ryba or whether any person in the executive capacity was 'upset' with Ryba has no bearing on whether Ryba ever was in fact threatened with a lawsuit.3 Accordingly, the trial court excluded properly these questions.\n\n\n11\nIn conclusion, we hold that the trial court denied correctly defendant's motion for acquittal. Further, in our view, substantial competent evidence supports the jury's verdict. Finally, we find no error with the district court's evidentiary rulings. Accordingly, the convictions are affirmed.\n\n\n\n1\n According to Howard Farber, for the deferred payment program to work properly, either the precious metals ordered had to be in stock at the time the initial down payment was made or 100% of the total payment price had to be in a segregated account. Further, Howard Farber testified that this deferred payment plan could only be profitable if the market decreased; if, however, the market increased, money from new clients would be essential to cover the difference between the 'locked in' price and the higher market price ninety days later\n\n\n2\n Defendant also asserted that Gordon's testimony was part of the 'res gestae.' This contention is clearly without merit\n\n\n3\n On cross examination, Ryba was asked whether King had ever threatened him with a lawsuit for aiding Farber in establishing Global Precious Metals; Ryba responded negatively. Consequently, this testimony could have been impeached properly if defendant's counsel asked King directly if he had ever threatened Ryba with a lawsuit. Such questioning, however, was not attempted in this case\n\n\n"} -{"text": "159 F.3d 1351\n1998-2 Trade Cases P 72,241\nWilliam J. Kerth, M.D., E. Lawrence Hanson, M.D.v.Hamot Health Foundation, Inc., Hamot Medical Center of Cityof Erie, Pennsylvania, George J. D'Angelo, M.D., George F.Kish, M.D., Dennis J. Michalak, M.D., Prabhaker G. Sardesai,M.D., Wilfredo S. Tan, M.D., Medicor Associates, Inc., HamotHealth Systems, Inc., Thoracic and CardiovascularAssociates, P.C., Thoracic and Cardiovascular Associates,In., d/b/a D'Angelo Clinic\nNO. 97-3606\nUnited States Court of Appeals,Third Circuit.\nJuly 15, 1998\n\n1\nAppeal From: W.D.Pa. ,No.95cv00212E ,\n\n989 F.Supp. 691\n\n2\nAffirmed.\n\n"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 17-1564\n\n\nMICHAEL D. MICHAEL, as the Administrator of the Estate of Jack D. Michael;\nJUDITH A. KUHN, as the Administratrix for the Estate of Paul F. Henderson et\nal.,\n\n Plaintiffs - Appellants,\n\n v.\n\nCONSOLIDATION COAL COMPANY, a Delaware Company,\n\n Defendant - Appellee,\n\n and\n\nESTATE OF ALEX KOVARBASICH, By and through Albert F. Marano, Sheriff\nof Harrison County as administrator for the estates of Alex Kovarbasich,\n\n Defendant.\n\n\nAppeal from the United States District Court for the Northern District of West Virginia,\nat Clarksburg. Irene M. Keeley, Senior District Judge. (1:14-cv-00212-IMK-JES)\n\n\nArgued: May 9, 2018 Decided: August 15, 2018\n\n\nBefore GREGORY, Chief Judge, and MOTZ and KEENAN, Circuit Judges.\n\n\nQuestions certified to the Supreme Court of Appeals of West Virginia by unpublished\norder. Judge Keenan directed entry of the order with the concurrences of Chief Judge\nGregory and Judge Motz.\n\fARGUED: Scott Sumner Segal, SEGAL LAW FIRM, Charleston, West Virginia, for\nAppellants. William Henry Jernigan, DINSMORE & SHOHL LLP, Charleston, West\nVirginia, for Appellee. ON BRIEF: Timothy C. Bailey, BAILEY, JAVINS &\nCARTER, LC, Charleston, West Virginia; Mark A. Barney, BARNEY LAW PLLC,\nHurricane, West Virginia; Samuel A. Hrko, BAILEY & GLASSER, LLP, Charleston,\nWest Virginia; C. Paul Estep, Steven L. Shaffer, ESTEP & SHAFFER, LC, Kingwood,\nWest Virginia, for Appellants. William E. Robinson, Alex M. Greenberg, Christopher\nM. Jones, DINSMORE & SHOHL LLP, Charleston, West Virginia, for Appellee.\n\n\nUnpublished opinions are not binding precedent in this circuit.\n\n\n\n\n 2\n\f ORDER\n\n\nBARBARA MILANO KEENAN, Circuit Judge:\n\n The United States Court of Appeals for the Fourth Circuit, exercising the privilege\n\nafforded by the State of West Virginia through the Uniform Certification of Questions of\n\nLaw Act, West Virginia Code \u00a7\u00a7 51\u20131A\u20131 through 51\u20131A\u201313, requests that the Supreme\n\nCourt of Appeals of West Virginia exercise its discretion to answer the following\n\nquestions:\n\n (1) Is a fraudulent concealment claim, as set forth in Kessel v. Leavitt,\n 511 S.E.2d 720 (W. Va. 1998), cognizable when the alleged injury\n was the plaintiffs\u2019 loss of a timely claim for wrongful death under\n West Virginia Code \u00a7\u00a7 55-7-5, 55-7-6 (1967)?\n\n (2) If the answer to Question (1) is yes: Under the West Virginia\n discovery rule, does the statute of limitations for a fraudulent\n concealment claim begin to run against a corporate entity when a\n plaintiff (A) learns that the entity concealed the intentional act of an\n unidentified individual, which resulted in the death of other\n employees at the entity\u2019s workplace; or (B) discovers that the entity\n concealed both the intentional act and the identity of a particular\n employee, who allegedly acted at the direction of the entity,\n resulting in the death of other employees at the workplace?\n\nThis Court acknowledges that the Supreme Court of Appeals may restate these questions.\n\nSee W. Va. Code \u00a7\u00a7 51\u20131A\u20134, 51\u20131A\u20136(a)(3). In our view, there is no controlling\n\nappellate decision, constitutional provision, or statute of West Virginia that answers these\n\nquestions. Accordingly, we conclude that the questions are appropriate for certification.\n\nSee id. \u00a7 51\u20131A\u20133.\n\n\n\n 3\n\f I.\n\n The plaintiffs in this class action are the survivors of 78 coal miners killed in an\n\nexplosion at the Consol No. 9 coal mine in Farmington, West Virginia on November 20,\n\n1968. The explosion was caused by excessive accumulation of methane gas in the mine.\n\nThe plaintiffs alleged that an employee of Mountaineer Coal Company, a wholly owned\n\nsubsidiary of defendant Consolidation Coal Company that operated the mine under the\n\ndirection of and control of Consolidation Coal, deliberately rendered inoperable a mine\n\nsafety system resulting in the miners\u2019 deaths. This safety system would have shut down\n\nelectric power in the mine when ventilation was inadequate, and would have alerted\n\nminers to this dangerous condition.\n\n Federal and state officials investigated the cause of the explosion for over two\n\ndecades. In September 1970, Larry Layne, an inspector for the United States Department\n\nof Labor, Mine Safety and Health Administration (MSHA), drafted a memorandum (the\n\nLayne memorandum) stating that an unnamed electrician had reported to him that the\n\nsafety system \u201chad been rendered inoperable before the explosion . . . [and] had been\n\nbridged with jumper wires; therefore when the [ventilation] fan would stop or slow down,\n\nthere was no way of anyone knowing about it because the alarm signal was bypassed.\u201d\n\nLayne omitted the reporting electrician\u2019s name from the memorandum at the electrician\u2019s\n\nrequest. The Layne memorandum was not discovered by the plaintiffs until 2008.\n\n While federal and state authorities continued to investigate the cause of the\n\nexplosion, the estates of several of the deceased miners filed three separate lawsuits\n\nagainst Consolidation Coal. The claims of the estates in the first two lawsuits were\n\n 4\n\fdismissed. In the third case, the estates alleged, among other things, that Consolidation\n\nCoal had concealed the cause of the explosion. A settlement ultimately was reached in\n\nthat case. At the time of all these lawsuits, the plaintiffs were not aware that anyone had\n\nacted intentionally to disable the mine safety system.\n\n In March 1990, the MSHA issued a report detailing the results of its investigation.\n\nThe report concluded that an accumulation of methane gas in the mine due to \u201cinadequate\n\nventilation and the lack of sufficient ventilation controls\u201d had contributed to the\n\nexplosion. The MSHA also found that the safety system \u201cwas not operating properly at\n\nthe time the explosion occurred, as mining operations continued . . . after the\n\nexplosion.\u201d\n\n As noted above, the plaintiffs became aware of the Layne memorandum in 2008.\n\nAnd in 2009, the plaintiffs discovered a copy of a fan recording chart that allegedly had\n\nbeen removed from the mine shortly after the explosion, and had been altered purportedly\n\nin an attempt to conceal Consolidation Coal\u2019s culpability in the explosion.\n\n On June 9, 2014, the plaintiffs first learned that the individual who had\n\nintentionally disabled the safety system was Alex Kovarbasich, the chief electrician at the\n\nmine and \u201ca member of mine management.\u201d The plaintiffs alleged that Kovarbasich was\n\n\u201cacting under the direction and control of\u201d Consolidation Coal when he tampered with\n\nthe safety system.\n\n\n\n\n 5\n\f The plaintiffs filed the present action in the Circuit Court of Marion County, West\n\nVirginia on November 6, 2014, against the Estate of Alex Kovarbasich 1 and\n\nConsolidation Coal. The defendants removed the case to the United States District Court\n\nfor the Northern District of West Virginia.\n\n The plaintiffs alleged a single claim for \u201cfraud, concealment and nondisclosure,\u201d\n\nclaiming that Consolidation Coal deliberately concealed the fact that Kovarbasich\n\ndisabled the safety system and, thus, concealed the true causes of the explosion. The\n\nplaintiffs contended that this act of fraudulent concealment \u201cdeprived [them] of their right\n\nto obtain relief against defendants under West Virginia\u2019s wrongful death statute[,] W. Va.\n\nCode \u00a7 55-[7]-6 (1967).\u201d Accordingly, the plaintiffs sought damages under West\n\nVirginia Code \u00a7 55-7-6 (1967), in the amount of $110,000 \u201cper class member for the\n\nwrongful death of each deceased coal miner,\u201d plus punitive damages.\n\n The district court dismissed the complaint in its entirety under Federal Rule of\n\nCivil Procedure 12(b)(6). With regard to the plaintiffs\u2019 claim for fraudulent concealment,\n\nthe district court held that West Virginia never has recognized a fraudulent concealment\n\nclaim involving a wrongful death. The court further concluded that even if such a claim\n\nwere cognizable, the fraudulent concealment claim was barred by the two-year statute of\n\nlimitations of West Virginia Code \u00a7 55-2-12, because the plaintiffs learned in 2008, six\n\nyears before filing suit, that the mine safety system intentionally had been disabled. The\n\nplaintiffs appealed.\n\n 1\n Kovarbasich died in 1992. The district court dismissed Kovarbasich\u2019s estate\nfrom the case, and that decision is not at issue in this appeal.\n\n 6\n\f II.\n\n A.\n\n Acknowledging the lack of analogous precedent, the plaintiffs assert that they\n\nhave alleged all the elements of a fraudulent concealment claim under West Virginia law,\n\nnamely, that Consolidation Coal engaged in \u201cthe active concealment of information from\n\n[the plaintiffs] with the intent to thwart [the plaintiffs\u2019] efforts to conduct an\n\ninvestigation, relating to such information.\u201d Kessel v. Leavitt, 511 S.E.2d 720, 753 (W.\n\nVa. 1998). And the plaintiffs emphasize that, under West Virginia law, \u201ca lack of\n\nprecedent\u2014standing alone\u2014is an insufficient reason to deny a cause of action.\u201d Id. at\n\n755 (quoting Farley v. Sartin, 466 S.E.2d 522, 533 (1995)).\n\n In response, Consolidation Coal maintains that West Virginia does not recognize\n\nan independent claim for fraudulent concealment when the damage resulting from the\n\nalleged concealment was the plaintiffs\u2019 loss of a timely wrongful death claim. In\n\nConsolidation Coal\u2019s view, any claim related to a wrongful death may only be brought\n\nunder the wrongful death statute, W. Va. Code \u00a7\u00a7 55-7-5, 55-7-6.\n\n We have not found any West Virginia authority that definitively answers the\n\nquestion presented. Thus, we conclude that the question whether a fraudulent\n\nconcealment claim is cognizable under West Virginia law when the alleged damage\n\nsustained was the loss of a timely claim for wrongful death warrants certification to the\n\nSupreme Court of Appeals of West Virginia.\n\n B.\n\n 7\n\f The plaintiffs also argue that their claim did not accrue until 2014, when they first\n\nlearned that Kovarbasich was the individual who disabled the safety system. In the\n\nplaintiffs\u2019 view, they were required to allege that the person who allegedly caused the\n\nminers\u2019 deaths by disabling the safety system was a member of \u201cmine management,\u201d who\n\nhad undertaken the act at the direction of Consolidation Coal. Thus, the plaintiffs argue\n\nthat until they knew the identity and employment status of the individual wrongdoer, they\n\ncould not allege a sufficient claim that Consolidation Coal acted to \u201ccover up\u201d its own\n\ntransgression by concealing evidence of Kovarbasich\u2019s conduct.\n\n In response, Consolidation Coal argues that even if the plaintiffs\u2019 fraudulent\n\nconcealment claim is cognizable under West Virginia law, the claim is barred by the two-\n\nyear statute of limitations provided in West Virginia Code \u00a7 55-2-12. Consolidation Coal\n\ncontends that, at the latest, the plaintiffs\u2019 action accrued when they discovered the Layne\n\nmemorandum in 2008, thus rendering untimely the plaintiffs\u2019 fraudulent concealment\n\nclaim filed in 2014. According to Consolidation Coal, the plaintiffs could have brought a\n\nfraudulent concealment claim when they knew in 2008 that the safety system in the mine\n\nintentionally had been disabled.\n\n Claims for fraudulent concealment in West Virginia are subject to a two-year\n\nstatute of limitations. See W. Va. Code \u00a7 55-2-12. Under West Virginia\u2019s discovery\n\nrule, the limitations period begins to run when a plaintiff \u201cknew, or by the exercise of\n\nreasonable diligence should have known, of the elements of a possible cause of action,\u201d\n\nnamely, \u201c(1) that the plaintiff has been injured, (2) the identity of the entity who owed the\n\nplaintiff a duty to act with due care, and who may have engaged in conduct that breached\n\n 8\n\fthat duty, and (3) that the conduct of that entity has a causal relation to the injury.\u201d Dunn\n\nv. Rockwell, 689 S.E.2d 255, 262, 265 (W. Va. 2009) (quoting Syl. Pt. 4, Gaither v. City\n\nHosp., Inc., 487 S.E.2d 901 (W. Va. 1997)).\n\n In the present case, it is not clear for purposes of applying the discovery rule,\n\nwhether the plaintiffs \u201cknew, or by the exercise of reasonable diligence should have\n\nknown, of the elements of a possible\u201d fraudulent concealment claim (1) when they\n\nlearned in 2008 that the safety system intentionally was disabled by an individual in the\n\nConsolidation Coal mine; or (2) when they discovered in 2014 that the individual who\n\ndisabled the system was a member of mine management allegedly acting under the\n\ndirection of Consolidation Coal. Id. at 265. Under the argument advanced by the\n\nplaintiffs, a claimant would not know whether he had a potential fraudulent concealment\n\nclaim against a corporate entity until he also knew, or had reason to know, that the person\n\nwho had sabotaged the mine safety system acted at the direction of the corporate entity.\n\nThus, the plaintiffs maintain that they did not know, and by the exercise of reasonable\n\ndiligence would not have known, of this element of their fraudulent concealment action\n\nuntil they learned that an employee acting at the direction of Consolidation Coal had\n\ncaused the miners\u2019 deaths. Rejecting this argument advanced by the plaintiffs, the district\n\ncourt concluded that the plaintiffs could have asserted any fraudulent concealment claim\n\nagainst Consolidation Coal in 2008, when the plaintiffs learned from the Layne\n\nmemorandum that the safety system intentionally had been \u201cbypassed,\u201d and that\n\nConsolidation Coal had concealed this fact.\n\n\n\n 9\n\f We have not found any West Virginia authority that definitively answers this\n\nquestion concerning application of West Virginia\u2019s discovery rule. We therefore\n\nconclude that the second question stated above likewise warrants certification to the\n\nSupreme Court of Appeals of West Virginia.\n\n\n\n III.\n\n Under the privilege made available by the West Virginia Uniform Certification of\n\nQuestions of Law Act, it is hereby ORDERED: (1) That the questions stated above be,\n\nand the same hereby are, certified to the Supreme Court of Appeals of West Virginia; (2)\n\nthat the Clerk of this Court forward to the Supreme Court of Appeals of West Virginia,\n\nunder the official seal of this Court, a copy of this order and, to the extent requested by\n\nthe Supreme Court of Appeals of West Virginia, the original or a copy of the record in\n\nthis Court; and (3) that any request for all or part of the record be fulfilled by the Clerk of\n\nthis Court simply upon notification from the Clerk of the Supreme Court of Appeals.\n\n\nThe names and addresses of counsel of record for the parties are:\n\n\nCounsel for the plaintiffs, Michael D. Michael, et al.\n\nScott S. Segal\nSegal Law Firm\n810 Kanawha Boulevard, East\nCharleston, WV 25301\n\nTimothy C. Bailey\nBailey, Javins & Carter, LC\nP. O. Box 3712\nCharleston, WV 25337\n\n 10\n\fMark Andrew Barney\nBarney Law PLLC\nP. O. Box 505\nHurrican, WV 25526\n\nConnard Paul Estep\nEstep & Shaffer, LC\n212 West Main Street\nKingwood, WV 26537\n\nSamuel A. Hrko\nBailey & Glasser, LLP\n209 Capitol Street\nCharleston, WV 25301\n\nCounsel for the defendant, Consolidation Coal Company\n\nWilliam H. Jernigan\nDinsmore & Shohl LLP\nP.O. Box 11887\nSuite 600\nCharleston, WV 25339\n\nAlex Manuel Greenberg\nDinsmore & Shohl LLP\nSuite 310\n215 Don Knotts Boulevard\nMorgantown, WV 26501\n\nChristopher Michael Jones\nDinsmore & Shohl LLP\nSuite 310\n215 Don Knotts Boulevard\nMorgantown, WV 26501\n\nWilliam E. Robinson\nP. O. Box 11887\nCharleston, WV 25339\n\n This Order is entered by Circuit Judge Keenan with the concurrences of Chief\n\nJudge Gregory and Judge Motz.\n\n 11\n\f QUESTIONS CERTIFIED\n\n\n\n\n12\n\f"} -{"text": "\n982 F.Supp. 1177 (1997)\nDarlene M. KIDWELL, Plaintiff,\nv.\nSHEETZ, INC., Fox Mountain, Inc., Michael Rinker, Robert Campbell, Defendants.\nCivil Action No. 95-0083-H.\nUnited States District Court, W.D. Virginia, Harrisonburg Division.\nSeptember 15, 1997.\n*1178 James A. Klenkar, Hall, Monahan, Engle, Mahan & Mitchell, Winchester, VA, for Darlene M. Kidwell.\nGlenn Milburn Hodge, Cathleen P. Welsh, Thomas E. Ullrich, Wharton, Aldhizer & Weaver, PLC, Harrisonburg, VA, for Michael Rinker.\nThomas J. Flaherty, Elizabeth A. Lalik, Hunton & Williams, McLean, VA, for Robert Campbell, Sheetz, Inc., Fox Mountain, Inc.\n\nMEMORANDUM OPINION\nMICHAEL, Senior District Judge.\nPursuant to 28 U.S.C. \u00a7 636(b)(1)(B), this court referred this Title VII, 42 U.S.C. *1179 \u00a7 2000e et seq., action with supplemental State law claims to the Honorable B. Waugh Crigler, United States Magistrate Judge, for proposed findings of fact and a recommended disposition, subject to review by this court. On May 9, 1997, the Magistrate Judge filed his Report and Recommendation, which recommends granting defendants' motion for summary judgment in favor of all individual and corporate defendants on Count V (sexual assault and battery) and Count XII (defamation), and in favor of defendants Sheetz, Inc. (\"Sheetz\") and Fox Mountain, Inc. (\"Fox Mountain\") on Count VI (assault and battery) and Count XI (breach of contract). The Report also recommends denying summary judgment to defendants on Count I (quid pro quo sexual harassment), Count II (hostile work environment sexual harassment), Count III (retaliation), and Count VI (assault and battery) as to defendant Campbell. Defendant Rinker does not seek summary judgment on plaintiff's assault and battery claim against him.\nKidwell, Rinker and the remaining defendants filed Objections to the Report and Recommendation on June 6, June 4 and June 6, 1997, respectively. Said objections having been timely and appropriately lodged, this court has undertaken a de novo review of the case. Orpiano v. Johnson, 687 F.2d 44, 48 (4th Cir.1982).\nAfter a thorough examination of the parties' objections, the supporting memoranda, the applicable law, the documented record, and the Report and Recommendation itself, this court partially adopts the Report and Recommendation but, because it considers certain of the parties objections well-taken, it declines to adopt the Magistrate Judge's recommended disposition of COUNTS I and VI for the reasons stated herein.\n\nI. Factual Background\nThe Report and Recommendation thoroughly recounts the facts of this case, as stated by this court in a memorandum opinion of September 13, 1996 granting, in part, and denying, in part, defendants' motions to dismiss. Briefly stated, the plaintiff, Darlene M. Kidwell, formerly worked as a cashier for Sheetz and Fox Mountain. Kidwell claims that throughout her employment, she was subjected to unwelcome sexual harassment by defendants, Rinker and Campbell, the store manager and district manager, respectively.\nAccording to plaintiff, Mr. Rinker regularly touched his genitals in her presence and in the presence of other female employees; he made repeated sexual remarks, such as \"Ooh, look at what she's got,\" \"It sure would be nice to be with her,\" and \"It doesn't matter where I get my appetite as long as I eat at home,\"; Mr. Rinker frequently read and commented upon pornography during work hours; Mr. Rinker intentionally pressed his genitals against plaintiff on one occasion; and Mr. Campbell engaged in unwelcome physical contact with plaintiff. When plaintiff protested or requested Messrs. Rinker and Campbell to stop touching her, she claims they retaliated against her: she was falsely accused of violating company policy and, allegedly on this pretext, terminated by Rinker and Campbell. Following her discharge, Ms. Kidwell filed a timely charge with the EEOC and thereafter commenced this multi-count Title VII action, with pendent State law claims.\n\nII. Title VII Claims\nTitle VII provides, in relevant part, that \"[i]t shall be an unlawful employment practice for an employer ... to discriminate against any individual with respect to [her] compensation, terms, conditions, or privileges of employment because of such individual's ... sex.\" 42 U.S.C. \u00a7 2000e-2(a)(1). Sexual harassment is actionable, then, because it affects conditions of an individual's employment and it occurs because of the individual's sex. Sexual harassment can take two distinct forms. First, when a supervisor demands sexual consideration in exchange for job benefits Katz v. Dole, 709 F.2d 251 (4th Cir.1983) actionable \"quid pro quo\" harassment will lie. Spencer v. General Electric, Co., 894 F.2d 651 (4th Cir.1990). The second type of sexual harassment is that which creates an offensive or hostile work environment (\"conditions of work\"). Katz, 709 F.2d 251. Finally, retaliation for complaining of or seeking redress of Title VII violations is also *1180 actionable. Ross v. Communications Satellite Corp. 759 F.2d 355, 365 (4th Cir.1985).\n\nA. Quid Pro Quo Sexual Harassment\nDefendants' objections to the Magistrate's recommendation that summary judgment be denied on this claim are meritorious. Plaintiff fails to meet one crucial prong of the five-element prima facie test of Spencer v. General Electric, Co., 894 F.2d 651, 658 (4th Cir.1990) required to establish a presumption of quid pro quo sexual harassment. To be sure, Ms. Kidwell, a woman, (1) belongs to a protected group under Title VII; she alleges, at least, (2) that she was subjected to unwelcome sexual harassment; (3) that the harassment complained of was based upon sex; (4) that her reaction to the harassment affected tangible aspects of the compensation, terms, conditions, or privileges of her employment and that the acceptance or rejection of the sexual harassment was an express or implied condition to the receipt of a job benefit or cause of a tangible job detriment; and (5) that the employer knew or should have known of the harassment but took no effective remedial action.[1]\nOnce a plaintiff makes out the prima facie case, \"an inference that quid pro quo sexual harassment has occurred arises and the burden of production shifts to the defendant to rebut the presumption with legitimate, nondiscriminatory reasons for the employment decision in question.\" Id. at 659 (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668(1973); Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 253-54, 101 S.Ct. 1089, 1093-94, 67 L.Ed.2d 207 (1981)).\n\"If the presumption is rebutted, the burden of production returns to the plaintiff to show that the defendant's proffered nondiscriminatory reasons are pretextual and that the employment decision was based on a sexually-discriminatory criterion.\" Id. (citing Burdine, 450 U.S. at 256, 101 S.Ct. at 1095).\nDefendants, Sheetz, Fox Mountain, and Mr. Campbell, argue in their instant objections that the plaintiff has failed to state a prima facie claim of quid pro quo sexual harassment under Katz and Spencer because she has offered no evidence that defendants demanded sexual favors from Ms. Kidwell in exchange for or in consideration of job benefits. Defendants premise this argument on Spencer's reasoning that quid pro quo harassment occurs only when \"sexual consideration is demanded in exchange for job benefits.\" 894 F.2d at 658; see also, Katz, 709 F.2d at 254 (quid pro quo sexual harassment is \"harassment in which a supervisor demands sexual consideration in exchange for job benefits....\") Implicit in Spencer's and Katz' analyses is the very definition of the term quid pro quo, namely, \"[w]hat for what; something for something. Used in law for the giving one valuable thing for another....\" Black's Law Dictionary (Sixth Ed.) (West 1990) (A loose translation of \"quid pro quo\" as \"this before that\" gives a clearer understanding of the phrase.)\nTaking all inferences in favor of the plaintiff, Ms. Kidwell has adduced evidence tending to indicate some connection between the alleged quid pro quo \"`sexual conduct and some economic benefit or detriment'\" Hott v. VDO Yazaki Corp., 922 F.Supp. 1114 (W.D.Va.1996) (quoting Walker v. Sullair Corp., 736 F.Supp. 94, 100 (W.D.N.C.1990) (citing Spencer, 894 F.2d at 658)). She has presented evidence of several job detriments she allegedly suffered when she rejected what she interpreted as defendants' sexual overtures: a heavier workload, less favorable scheduling, unfair performance evaluations which affected bonuses, and termination. Pl's Mem. at p. 23 (citing Kidwell deposition testimony); Pl's Mem. at p. 14 (citing Kidwell Dep. at p. 51-53). Missing from the record, however, is any evidence that Rinker or Campbell ever actually demanded sexual favors or asked Kidwell out for dates; the plaintiff concedes as much. (Kidwell Dep. at 51-53) While evidence of alleged job detriments may be relevant to the fourth prong of *1181 Spencer's prima facie test, it does not satisfy the second such prong.\nTo be sure, under Hott, the court at summary judgment is invited to look to \"a broad spectrum of circumstances,\" 922 F.Supp. at 1123, in finding that a plaintiff has suffered to a job detriment. As well, Canada v. Boyd Group, Inc., 809 F.Supp. 771 (D.Nev.1992) contains language supporting the notion that evidence of hostile work environment sexual harassment also might support a simultaneous claim of quid pro quo sexual harassment. Id. at 777 (\"[I]t is certainly feasible that the factual basis for a quid pro quo allegation and a hostile environment allegation may overlap.\").\nThis court is of the opinion, however, that plaintiffs claim and supporting evidence appear to concern purely hostile work environment sexual harassment. The court is persuaded by other language in Canada to the effect that:\nIn the case at bar, [p]laintiff has presented no evidence to support a claim that any supervisor used his authority to extort sexual favors from her. Plaintiff offers no evidence of statements or actions by any [d]efendants ..... that indicate that [p]laintiff's continued employment, or other employment benefits, were contingent on her granting sexual favors. The fact that [p]laintiff believed [a supervisor] treated her badly because she was unresponsive to him is not sufficient to support an allegation that [the supervisor] was using sex as a criterion for employment benefits. There is no evidence to suggest employment benefits were withheld from [p]laintiff. Rather, [p]laintiff claims that she was subjected to sexually inappropriate conduct by [the supervisor] and that she was not allowed to leave early or have others work her shifts. To some extent the denial of these favors may be considered employment benefits; however, they much more directly reflect the environment in which [p]laintiff had to work.\n\nId. at 777 (emphasis added).\nMs. Kidwell presents insufficient evidence to make out a prima facie case of quid pro quo harassment under prong two of the Spencer test. Thus, she is unable to survive defendants' motions for summary judgment, there being evidence of a harassing work environment, but no evidence of any demand for sexual favors and the consequent offer of favors if the employee acquiesces or threat of detriment if the employee refuses the demand. She establishes no genuine issue of material fact for a fact finder to resolve because her quid pro quo sexual harassment claim lacks the predicate requirement under the Spencer test that sexual favors as consideration for job benefits were demanded of her by any defendant. Plaintiffs quid pro quo allegation ultimately lacks the necessary \"if / then\" logical connection between events that was present in Hott, 922 F.Supp. at 1123 (evidence that \"if [plaintiff] wanted the extended lunch break, then she should accept the supervisor's offer for a date\" held sufficient for quid pro quo claim to survive summary judgment motion) (emphasis in original).\nA final concern of the court here lies in the relationship between a quid pro quo charge and a hostile environment charge. The first statement from Canada quoted supra at 1181 contains troubling consequences for the distinctions between the two types of sex discrimination charges. Applying Canada's first quoted statement's own terms, a hostile work environment of a sufficient severity can constitute \"quid pro quo\" sexual harassment without any requirement of a stated exchange of job benefits or detriments occurring from acceptance or rejection of an offer or request for sexual favors. Such an exchange must underlie the \"quid pro quo\" claim or the language of \"this for that\" is simply meaningless.\nIt is surely possible that a single case may present facts which would support both a quid pro quo claim and a hostile work environment claim, in that the quid pro quo claim could well be a part of the hostile environment, but the quid pro quo claim still would require the essential element of the request for sexual favors.\nCursory reflection shows, however, that this interrelationship does not work in reverse. No matter how severe the hostile work environment may be, that environment *1182 alone cannot in logic also support a quid pro quo claim where such a claim depends only on that hostile environment.\nIn the second quotation from Canada, supra at 1181, the court there turned away from a subjective test and by strong implication supported an objective standard. Such a standard appears entirely appropriate in this context, recognizing that a subjective test would, in effect, pose few or no limits on the quid pro quo claim.\nIt is important to recognize the necessity of sharp distinctions between the two types of claims. Failing to do so, in effect, simply merges the quid pro quo claim into the hostile environment claim. Such a result may be desirable, but it is not legally proper. This court, therefore, declines to adopt the Magistrate Judge's recommendation and grants defendants' motion for summary judgment.\n\nB. Hostile Environment Sexual Harassment\nDefendants' objections to the Magistrate's recommendation that summary judgment be denied on this claim are without merit. Sexual harassment based on a hostile work environment exists \"where there are sexual advances, fondling or a sexually suggestive workplace atmosphere that the claimant finds unwelcome.\" Walker v. Sullair Corp., 736 F.Supp. 94, 100 (W.D.N.C.1990). \"Hostile work environment is characterized by a workplace `pervaded with sexual slur, insult and innuendo, ... verbal sexual harassment, ... or extremely vulgar and offensive sexually related epithets' directed to or about an employee.\" Id. (quoting Katz, 709 F.2d at 254).\nIn order to prevail against a motion for summary judgment on a hostile work environment claim, plaintiff must make a prima facie showing that sexually harassment conduct occurred, and that the employer knew or should have known about the harassment but took no effectual steps to correct or prevent it. Katz, 709 F.2d at 256. In order to demonstrate hostile environment, the plaintiff must produce evidence that the conduct was unwelcome, that the harassment was based on sex, and that it was sufficiently severe or pervasive to create an abusive work environment. Swentek v. USAIR, Inc., 830 F.2d 552, 557 (4th Cir.1987); see also Hammill v. Albemarle County School Bd., Civil Action No. 93-00031-C, 1994 WL 147753 (W.D.Va. April 18, 1994).\nIn a \"hostile work environment\" sexual harassment case, \"the plaintiff must demonstrate that the employer had actual or constructive knowledge of the existence of a sexually hostile working environment and took no prompt and adequate remedial action.\" Katz, 709 F.2d at 255 (citing Henson, 682 F.2d at 905).\nThe defendants' objections claim that because Ms. Kidwell failed to use the corporate defendants' existing sexual harassment procedures, her instant claim should be barred. In Katz, the court stated that \"to avoid liability under Title VII, an employer on notice of sexual harassment must do more than indicate the existence of an official policy against such harassment.\" Katz, 709 F.2d at 256. The Court of Appeals for the District of Columbia has held that \"an employer may not be held liable for a supervisor's hostile work environment harassment if the employer is able to establish that it had adopted policies and implemented measures such that the victimized employee either knew or should have known that the employer did not tolerate such conduct and that she could report it to the employer without fear of adverse consequences.\" Gary v. Long 59 F.3d 1391, 1398 (D.C.Cir.1995); see Bouton v. BMW of North America, Inc., 29 F.3d 103, 110 (3d Cir.1994) (holding that effective grievance procedures insulate the employer). An effective policy is one which is \"calculated to encourage victims of harassment to come forward,\" Meritor Sav. Bank v. Vinson, 477 U.S. 57, 73, 106 S.Ct. 2399, 2408, 91 L.Ed.2d 49 (1986), one about which employees know, and one that provides clear avenues for relief Gary, 59 F.3d at 1398-99.\nDefendants point to the following evidence in support of their claim that their anti-harassment policy was effective.\n(1) The policy explicitly forbad sexual harassment. The policy stated as follows: *1183 Sheetz strictly prohibits harassment in any form including sexual harassment from employees, management, vendors, or customers. Any employee who perceives they are being harassed should report this harassment to their supervisor or other appropriate management immediately or call the Employee Help Line at 1-800-745-9666.\nDefs.' Mem. at p. 37, Exhibit 2.\n(2) The policy was communicated to plaintiff at least seven times during her two years of employment.\n(3) The policy provided relatively straight-forward method by which to register complaints; a helpline was provided for employees.\n(4) The individual defendants received training regarding sexual harassment.\n(5) According to testimony of Ms. Schaper, who is in charge of investigating complaints of sexual harassment, when investigations confirmed charges of sexual harassment, defendants enforced the policy through methods ranging from counseling to discharge.\n(6) Prior to February 1995 (two weeks before her termination) plaintiff had only complained about the alleged harassment to Mr. Rinker, even though the harassment allegedly began in the summer of 1994.\nPlaintiff counters that defendants' anti-harassment policy was not effective. Pl's. Mem. at pp. 6-7, 14-17, 8-30. In support, she asserts:\n(1) Employees did not understand the procedures.\n(2) The procedures were not effectively enforced, a claim supported by the store's current manager, and other employees, who testified the procedures were not effective.\n(3) The policy suggested that the employee could contact the alleged harasser initially; after plaintiff notified Ms. Schaper, she was instructed to arrange a meeting between herself and Mr. Campbell, even though he allegedly was involved in the harassment. (One day before the scheduled meeting, plaintiff was fired.)\n(4) The policy was refurbished one year after plaintiff was terminated.\n(5) The individual defendants did not understand the policy, which, plaintiff claims, is evidenced by their deposition testimony where they revealed uncertainty as to what conduct qualified as sexual harassment.\nAs to plaintiff's first argument, this court is skeptical; it is impossible not to understand a policy as clearly stated as defendants' is, and one introduced to plaintiff on seven different occasions. The third argument also does not undermine defendants' anti-harassment policy. In the first place, it is logical to attempt a resolution with the individual that is the source of the problem before complaining to others; moreover, the policy provides an avenue for complaining to higher-ups instead of or after notifying the alleged harasser. The fourth argument does not demonstrate the ineffectiveness of the previous policy; rather, it only shows defendants wish to further insulate themselves from Title VII liability. Nor does the fifth argument make any headway \u0097 the company conducted extensive training of its employees to prevent sexual harassment; if the individual defendants do not understand the policy, their failing cannot be attributed to the corporate defendants.\nNonetheless, plaintiff's second argument alone suffices to preclude summary judgment, for it creates a material factual dispute between the testimony of Ms. Schaper, who testified that enforcement was effective, and other employees (e.g., Ms. Thomas, the store's current manager[2]) who testified the policy was not enforced. Plaintiff's own experience surely casts doubt on the efficacy of the policy \u0097 plaintiff was referred back to her alleged harasser by Ms. Schaper. Cf. Meritor, 477 U.S. at 72-73, 106 S.Ct. at 2408 (\"Finally, we reject ... [the] view that the mere existence of a grievance policy against discrimination, coupled with respondent's failure to invoke that procedure, must insulate [the employer] from liability. While those facts are plainly relevant, the situation before us demonstrates why they are not *1184 necessarily dispositive. [The employer's] general nondiscrimination policy did not address sexual harassment in particular, and thus did not alert employees to their employer's interest in correcting that form of discrimination.... Moreover, the [employer's] grievance procedure apparently required an employee to complain first to her supervisor, in this case [the alleged harasser]. Since [the supervisor] was the alleged perpetrator, it is not altogether surprising that respondent failed to invoke the procedure and report her grievance to him.\").\nAs to defendants' objection that the corporate defendants lacked actual or constructive notice of the alleged harassment, plaintiff testified that she notified Ms. Schaper, the corporate officer charged with receiving and investigating employee grievances, of the individual defendants' alleged harassment. As well, plaintiff testified that a district manager of Sheetz, David Woodley, observed at least some of the alleged sexual harassment by Messrs. Rinker and Campbell. Finally, other employees of Sheetz complained about the defendants' conduct even before Kidwell herself did. Thus, unlike in Andrade v. Mayfair Management, Inc., 88 F.3d 258, 261 (4th Cir.1996), there exists evidence for the fact finder to weigh and consider that the corporation \"knew or should have known\" of the alleged harassing behavior. With such evidence of corporate notice alleged, denying defendants' motion for summary judgment does not violate at all Andrade's holding that corporate liability cannot be automatically imputed.\nFinally, as part of defendants' objections to the recommended disposition of the hostile work environment claim, they object to allegations that Ms. Kidwell was forced to clean up Mr. Rinker's semen after he masturbated in a company bathroom toilet because such charges were not alleged in her EEOC charge. While \"[t]he allegations contained in the administrative charge of discrimination generally operate to limit the scope of any subsequent judicial complaint,\" Evans v. Technologies Applications & Service Co., 80 F.3d 954, 962-63 (4th Cir.1996), contrary to defendants' objection, Evans does not require Title VII plaintiffs to allege all conduct they suffered in violation of Title VII in their EEOC charge. Rather, established Fourth Circuit precedent demands only that discrimination claims be stated in the initial EEOC charge. Id. at 963. In Evans, for instance, the plaintiff's age discrimination claim, her sexual harassment claim and her claim of discrimination in pay and benefits were held to be beyond the scope of her EEOC charge, where she alleged only that her employer failed to promote her because of her sex. There is no dispute that plaintiff alleged in her EEOC charge that she was subject to hostile work environment sexual harassment; no more that this is necessary to put defendants on notice of the charges made against them. Thus, the \"bathroom incident\" allegations will not be barred simply because they were not specifically raised in Kidwell's EEOC charge.\nFor these reasons, this court adopts the recommendation of the Magistrate Judge and denies defendants' motion for summary judgment on the hostile work environment claim.\n\nC. Retaliation\nTo proceed on a claim of retaliation, a plaintiff must establish a prima facie case showing (1) she engaged in protected activity, (2) her employer took adverse action against her, and (3) there was a causal connection between the protected activity and the adverse action. Ross, 759 F.2d at 365. If the plaintiff succeeds in making out a prima facie case, the burden shifts to the employer to articulate a legitimate, non-discriminatory reason for the adverse action suffered by the plaintiff. Id. If the employer proffers such a reason, the burden shifts back to the plaintiff to show that the purportedly legitimate reason is, in fact, pretextual. Id. The plaintiff must ultimately show that \"but for\" the protected conduct no adverse action would have been taken against her. Id. at 366.\nDefendants make one objection: plaintiff fails to make the \"but for\" showing and, consequently, fails to rebut defendants' proffered legitimate non-discriminatory reason. For the reasons as stated above with respect to the hostile environment claims, this court thinks that defendants have met their burden in articulating a legitimate non-discriminatory *1185 reason, but that plaintiff has produced enough evidence as to pretext to survive summary judgment. Testimony from the current store manager that some of defendants' employees were not fired even after failing to mark voided sales slips immediately (the asserted non-discriminatory reason for plaintiff's dismissal) suffices to create an issue of fact and allows this claim to survive summary judgment. A reasonable trier of fact could conclude from this evidence that the decisions defendants took adversely impacting Ms. Kidwell's job, including her termination, in reality owed to her decision to complain about the alleged hostile environment sexual harassment and that thereby her rights under Title VII had been violated.\n\nIII. State Law Claims\n\nA. Sexual Assault and Battery\nDefendant Rinker objects to the Report and Recommendation because he maintains that no cause of action for sexual assault and battery exists. This argument has already been rejected by this court in this very case. Memorandum Opinion of September 13, 1996. The Fourth Circuit and another division within the Western District of Virginia have assumed the cause of action to exist. See, Jamison v. Wiley, 14 F.3d 222 (4th Cir.1994); Pizzino v. J. Dillard Hutchens Corp., 1996 LEXIS 14291 (W.D.Va. Aug. 8, 1996) (Kiser, J.).\nThe only contrary authority Rinker cites is Fox v. Rich Prods. Corp., 34 Va. Cir. 403 (1994). Although it does not discuss or analyze the issue at all, the court in Fox subsumed the plaintiff's sexual assault and battery claim into her simple assault and battery claim. The heading preceding this one sentence decision (to subsume) states that the two constitute the \"same action.\" Nonetheless, this court rejects the argument that the tort does not exist because (1) this court has already ruled on this issue; (2) the Fourth Circuit and Judge Kiser have assumed a cause for sexual assault and battery to exist; and (3) the Fox decision comes from a lower court in Virginia and itself assumes the nonexistence of the tort without any discussion or analysis.\nVirginia law, then, recognizes a distinct cause of action for sexual assault and battery. The use of force, threat, or intimidation is a necessary element of the cause of action, analogizing from the criminal context, where this is required. See Clark v. Commonwealth, 12 Va.App. 1163, 408 S.E.2d 564 (1991); Johnson v. Commonwealth, 5 Va. App. 529, 365 S.E.2d 237 (1988).\nBecause Rinker also claims, in the alternative, that because there is no evidence that he used force, threats, or intimidation in touching plaintiff, he is entitled to summary judgment, which the Magistrate Judge now recommends. Plaintiff objects and asserts, in a conclusory manner, that the use of force, threat, or intimidation was present here. Pl's. Mem. at p. 34. Because there is no evidence in the record to support her claim, apart from the fact that the alleged conduct was committed by supervisory personnel, the court grants Rinker's motion for summary judgment. For the same reasons, the other defendants' motions for summary judgment on this claim also are granted.\n\nB. Assault and Battery\n\n1. Individual Defendants\n\nThe \"slightest touching of another, or of his clothes, cane, or anything else attached to his person, if done in a rude, insolent or angry manner,\" may be actionable as the tort of assault and battery under Virginia state law. Wood v. Commonwealth, 149 Va. 401, 140 S.E. 114 (1927); Crosswhite v. Barnes, 139 Va. 471, 124 S.E. 242 (1924).\nThe basis of plaintiff's claim of assault and battery against defendant Campbell is founded upon a single event; Campbell allegedly touched her on her shoulders, neck, and ears upon greeting her. Defs'. Mem. at p. 33 (citing Kidwell Dep. at p. 210). As to defendant Rinker, plaintiff's claim rests on more numerous incidents, including his rubbing his genitals against her. Rinker does not seek, and shall not receive, summary judgment on the assault and battery claim against him. Campbell and the corporate defendants object to the Magistrate's recommendation that summary judgment in their favor be denied on this claim.\nDefendants contend that Campbell's contact with plaintiff does not qualify as an *1186 assault and battery because there is no evidence that the touch was rude, insolent, angry, or that it continued after plaintiff asked him to cease. Plaintiff's testimony contradicts this version of events and creates a material and genuine issue for the fact finder to resolve. According to Kidwell's deposition, Campbell rubbed her neck, ears, and hair and continued doing so after she requested that he stop. Pl's. Mem. at p. 11. This action qualifies as insolent, not just friendly, for summary judgment purposes. Therefore, defendants' argument that summary judgment should issue in favor of Campbell must be rejected.\n\n2. Corporate Defendants\nHere, Ms. Kidwell argues in her objections that the corporate defendants should be held liable for the alleged assault and batteries by the individual defendants under Virginia's respondeat superior principles. The only issue to be decided here is whether the conduct of the individual defendants fell within the scope of their employment; if not, the corporate defendants cannot be held liable by operation of respondeat superior. See Hott, 922 F.Supp. at 1126.\nIn Jamison v. Wiley, 14 F.3d 222, 237 (4th Cir.1994) (citations omitted), the Fourth Circuit articulated what it then believed the legal standard to be in Virginia as follows:\n[U]nder Virginia law, an act is within the scope of employment only if it is \"fairly incident to [the master's] business, done while the servant was engaged upon the master's business ... done, although mistakenly or ill-advisedly, with a view to further the master's interest or from some impulse or emotion which naturally grew out of or was incident to the attempt to perform the master's business, and did not arise wholly from some external, independent, and personal motive on the part of the servant to do the act upon his own account.\"\nThe court concluded that harassment by a supervisor did not fall within the scope of employment. Virginia courts, dealing with the same issue in the backdrop of the Worker's Compensation Act, have reached similar conclusions. This court, in its September 13, 1996 Memorandum Opinion, cited those cases with approval, stating as follows:\nAlthough defendants are right that Virginia's Workers' Compensation Act provides exclusive coverage when it applies, see Va. Code \u00a7 65.2-307, defendants have failed to demonstrate that, as a matter of law, the statute is available to plaintiff insofar as she has asserted a claim for assault and battery. The Act only applies, inter alia, to conduct arising out of the employment relationship, and acts \"of a personal nature and not directed against the recipients as employees or in furtherance of the employer's business\" do not arise out of the employment relationship as a matter of law. Richmond Richmond Newspapers, Inc. v. Hazelwood, 249 Va. 369, 375, 457 S.E.2d 56, 59 (1995). Even if common sense did not inform one that in the normal course of events sexual harassment (in the form of assault and battery or otherwise) is not perpetrated for the employer's sake, the Virginia Supreme Court has held that assault is not necessarily covered by Virginia's Workers' Compensation Act. Richmond Newspapers, 249 Va. at 372-75, 457 S.E.2d at 58-59 (holding that \"goosing\" did not arise out of the employment relationship and thus was not an injury covered by Virginia's Workers' Compensation Act); id. (citing with approval City of Richmond v. Braxton, 230 Va. 161, 165, 335 S.E.2d 259, 262 (1985) (holding that supervisor's sexual harassment of the plaintiff did not arise out of employment because such conduct was not done in furtherance of the employer's business, was of a personal nature, and employment did not increase risk of this type of injury)). Surely we have not yet reached the point where a court can say that as a matter of law working as a cashier carries with it the increased risk of sexual harassment by one's supervisors. Nor can it be said as a matter of law that such harassment is not personal, but rather committed to further an employer's business interests. Therefore, defendants' arguments invoking the exclusivity provision of Virginia's Workers' Compensation Act ... must fail.\nPlaintiff responds that the question whether the assault and battery was in the scope of employment must be decided by a jury. Virginia authority (more recent than Jamison or the cases cited by this court in its September *1187 13, 1996 Memorandum Opinion) supports the plaintiff's contention and likely has altered significantly the respondeat superior doctrine in the Commonwealth.\nIn Plummer v. Center Psychiatrists, Ltd., 252 Va. 233, 476 S.E.2d 172 (1996), a case cited by none of the parties to this case, the Virginia Supreme Court seems to have held that once a plaintiff has established facts showing that an employee's offending conduct occurred while that employee was performing his duties of employment, the burden shifts to the employer to demonstrate that the offending employee \"was not acting within the scope of his employment.\" 476 S.E.2d at 175 (emphasis added). At the very least, Plummer appears to admonish that the issue of whether an offending employee was or was not acting within the scope of his employment is one for a jury to decide. Id. at 176 (even when the specific issue was whether a psychologist who had sexual intercourse with a patient acted within the scope of his employment).\nThis court recognizes that Plummer was decided at the demurrer (motion to dismiss) stage of the State court proceedings. Its impact, however, extends far beyond the pleadings stage whether it is interpreted broadly as establishing a shifted burden of production or more narrowly in terms of scope of employment issue being a fact-based jury question.[3]\n\nC. Breach of Contract\nPointing to written statements promulgating defendants' policy against sexual harassment, plaintiff contends that defendants breached a \"contract\" between themselves and plaintiff by subjecting her to sexual harassment.\nAs defendants rightly point out, plaintiff ignores the fact that these policy statements were accompanied by express disclaimers of any contractual relationship and a reaffirmation of plaintiff's status as an at-will employee (one who can be fired for good reason, bad reason, or no reason). No contract was created and, consequently, no contract was breached. Defendants are entitled to judgment as a matter of law on plaintiff's breach of contract claim. Plaintiff's objection to this recommendation of the Magistrate is without merit and, accordingly, is overruled.\n\nD. Defamation\nVirginia law requires the following elements for a defamation claim: (1) publication about the plaintiff, (2) an actionable statement; and (3) the requisite intent. Chapin v. Greve, 787 F.Supp. 557, 562 (E.D.Va.1992), aff'd, 993 F.2d 1087 (4th Cir. 1993). To be actionable, a statement must be false and defamatory. Id. A defamatory statement is \"more than merely unpleasant or offensive; it must make the plaintiff appear odious, infamous, or ridiculous.\" Id. (internal quotations and citations omitted). \"she meaning of the alleged defamatory language can not, by innuendo, be extended beyond its ordinary and common acceptation.\" Carwile v. Richmond Newspapers, 196 Va. 1, 82 S.E.2d 588, 592 (1954). Unless evidence of special damages is adduced, the alleged defamation must necessarily be of the kind of injury that would harm the plaintiff's trade or business. Fleming v. Moore, 221 Va. 884, 275 S.E.2d 632 (1981) (holding that accusation of racism hurled at university professor did not rise to level of defamation per se).\nPlaintiff has alleged no special damages; instead, she claims damages must be presumed because defendants' statements were defamatory per se. Plaintiff relies upon a newspaper article published in the Winchester Star where Sheetz' Vice President stated that no one in his office had knowledge of plaintiff's allegations before she filed her lawsuit. This statement, plaintiff urges, led the world to think she had fabricated the charges of sexual harassment. Second, plaintiff's amended complaint alleges that several managers at Sheetz impugned her abilities as an employee by stating that she was fired for having violated company policy.\nFor purposes of plaintiff's motion for summary judgment, defendants do not dispute *1188 falsity. Defendants argue that the alleged falsehoods are, as a matter of law, too mild to reach the level of defamation per se. This court, following the Magistrate's recommendation, agrees. Plaintiff's hyperbole notwithstanding, the alleged falsehoods fall far beneath the standard for defamation per se. This reality provides an independent ground to grant defendants' motion for summary judgment.\nFurther, defendants contend that the intercorporate statements and communications with the newspaper are qualifiedly privileged. Actual malice must be shown by clear and convincing evidence to defeat qualified privilege. Great Coastal Exp., Inc. v. Ellington, 230 Va. 142, 334 S.E.2d 846 (1985). Here, defendants urge that plaintiff has presented no evidence of actual malice.\nPlaintiff objects to the Magistrate's Report with the rejoinder that whether actual malice existed is a jury question. Again, that is true only when evidence of such actual malice is adduced. Here, Kidwell has offered no such evidence and, hence, there is nothing to submit to the jury. Therefore, summary judgment in favor of defendants should issue.\n\nIV Conclusion\nFor the reasons set forth above, summary judgment shall be, and hereby is, granted in favor of all defendants on COUNTS V and XII and in favor of Sheetz and Fox Mountain on COUNTS I and XI. Summary judgment shall be, and hereby is, denied on all other COUNTS.\n\nREPORT AND RECOMMENDATION\nCRIGLER, United States Magistrate Judge.\nThis action is again before this court under authority of 28 U.S.C. \u00a7 636(b)(1)(B), this time to render to the presiding District Judge a report setting forth appropriate findings, conclusions and recommendations for the disposition of the defendants' motions for summary judgment. The parties presented oral argument on April 1, 1997 in consequence whereof this report issues.\n\nBACKGROUND\nMuch of the background of this case has been summarized by the presiding District Judge in his September 13, 1996 Memorandum Opinion granting, in part, and denying, in part, defendants' motions to dismiss. Plaintiff is a former cashier for Sheetz, Inc. (\"Sheetz\") and Fox Mountain, Inc. (\"Fox Mountain\") in a store managed by the defendant Michael Rinker (\"Rinker\"). Robert Campbell (\"Campbell\") was the district supervisor over Rinker.\nPlaintiff claims that throughout her employment she was subjected to unwelcomed sexual harassment by Rinker and Campbell. Particularly, she has testified that Rinker routinely touched his genitals in her presence and in the presence of other female employees; he made sexually explicit remarks to or about her; he often read and commented upon pornography that was sold in the store; and he intentionally pressed his genitals against plaintiff on occasions. She claims Campbell engaged in unwelcomed physical contact with her. When she protested her treatment by the two individual defendants, plaintiff claims she was retaliated against, falsely accused of violating company policy and, on this pretext, was terminated from her employment by Rinker and Campbell. After her discharge, plaintiff filed a charge with the EEOC and thereafter commenced this action.\nBy her various complaints, plaintiff set forth eight claims for relief. The presiding District Judge, however, dismissed some claims. As against the corporate defendants there remain COUNT I (quid pro quo sexual harassment), COUNT II (hostile work environment), COUNT III (retaliation), COUNT V (state law claim of sexual battery), COUNT VI (state law claim of assault and battery), COUNT XI (state law claim of breach of contract), COUNT XII (state law claim for defamation). Also remaining against Rinker and Campbell are COUNT V (state law claim for sexual battery), COUNT VI (state law claim for assault and battery) and COUNT XII (state law claim for defamation). The court will first address the federal claims under Title VII, then plaintiff's state law claims.\n\nI. TITLE VII CLAIMS\nTitle VII provides, in pertinent part, that \"[i]t shall be an unlawful employment practice *1189 for an employer ... to discriminate against any individual with respect to [her] compensation, terms, conditions, or privileges of employment because of such individual's ... sex.\" 42 U.S.C. \u00a7 2000e-2(a)(1). Sexual harassment, therefore, is actionable, and it can take two distinct forms, namely: (a) that which creates an offensive work environment (\"conditions of work\"), and (b) that in which the employer demands sexual consideration in exchange for job benefits (\"quid pro quo\"). Katz v. Dole, 709 F.2d 251 (4th Cir.1983). Moreover, retaliation for complaining about Title VII violations also is actionable. Ross v. Communications Satellite Corp., 759 F.2d 355 (4th Cir.1985).\n\nA. Quid Pro Quo Sexual Harassment (COUNT I)\nIn Spencer v. General Electric Co., 894 F.2d 651 (4th Cir.1990), it was held that a plaintiff can establish a prima facie case by showing:\n1. The employee belongs to a protected group;\n2. The employee was subjected to unwelcomed sexual harassment;\n3. The harassment was based upon gender;\n4. The employee's reaction to the harassment affected tangible aspects of the employee's compensation, terms, conditions or privileges of employment in that it was an express or implied condition to the receipt of a job benefit or the cause of a tangible job detriment; and\n5. The employer knew or should have known of the harassment and took no remedial action.[1]\nFor summary judgment purposes, once the employee has made out a prima facie case of quid pro quo harassment, the burden shifts to the employer to rebut the presumption of discrimination with evidence of legitimate, nondiscriminatory reasons for the job action. Spencer, 894 F.2d at 659. See also McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). If that occurs, the burden shifts back to the plaintiff to demonstrate that the reason was pretextual, keeping in mind that the overall burden to prove discrimination by the preponderance of the evidence never shifts away from the claimant. Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981).\nDefendants seek summary judgment on this claim on the ground that there is no evidence of any demand for sexual favors in exchange for a job benefit. Plaintiff opposes summary judgment on this claim, pointing to her testimony that when she ignored the overtures of her supervisors she was shackled with heavier work loads, less favorable scheduling and unfair performance ratings which affected her compensation and eventually led to her termination. However, as noted by defendants, plaintiff conceded that neither Rinker nor Campbell actually asked her for sexual favors or dates, though she has continued to insist that her failure to respond to their overtures resulted in her being treated less favorably than if she had responded in a way that more suited them.\nThe corporate defendants rely on Canada v. Boyd Group, Inc., 809 F.Supp. 771 (D.Nev. 1992), for the proposition that plaintiff's quid pro quo claim is essentially a hostile environment claim in disguise. This contention ignores, however, the simple fact that the elements of a hostile environment claim also may be ingredients of a quid pro quo claim, the latter adding to the mix, of course, a tangible job detriment. Moreover, this court believes that Hott v. VDO Yazaki Corp., 922 F.Supp. 1114 (W.D.Va.1996), compels a different approach than that taken by defendants and a result contrary to the one they seek. For summary judgment purposes, the court and the trier of fact, for that matter, are entitled to look to \"a broad spectrum of circumstances\" in determining whether a plaintiff has been subjected to a job detriment for failing to acquiesce in a supervisor's harassment. Id. at 1123. That is to say, just because there is no evidence of a direct request for sexual favors or evidence of job loss *1190 does not end the inquiry. Nor does the court believe that having a legitimate reason to terminate an employee altogether eliminates liability of a corporate employer for conduct through its supervisory staff that was both harassing and resulted in changes in working conditions when the employee failed or refused to acquiesce before the termination. The synergistic effects of all the facts and circumstance may be evaluated in deciding whether a job benefit was sacrificed when acquiescence was refused.\nThis court believes that this is a task for the trier of fact, and it suggests that the presiding District Court not allow the corporate defendants to construct a dispositive defense to plaintiff's quid pro quo claim by asserting that plaintiff only has shown, if anything, a hostile environment, and that she would have been fired anyway. There is considerable evidence in this record indicating that others who acquiesced received more favorable treatment in the workplace than did plaintiff, and there is certainly evidence, if believed, that would show her conditions changed when she failed to acquiesce. The motion for summary judgment on the quid pro quo claim should be denied, and it is so\n\nRECOMMENDED.\n\nB. Hostile Work Environment (COUNT II)\nSexual harassment based upon a hostile work environment exists when \"there are sexual advances, fondling or a sexually suggestive workplace atmosphere that the claimant finds unwelcome.\" Walker v. Sullair Corp., 736 F.Supp. 94, 100 (W.D.N.C.1990). It is characterized by a pervasion of sexual slur, verbal sexual harassment, insult and innuendo, as well as by extremely vulgar and offensive sexually related epithets toward or about an employee. Id.; see also Katz, 709 F.2d at 254.\nIn order to prevail against a motion for summary judgment on a hostile environment claim, plaintiff must make a prima facie showing that sexually harassing conduct occurred, and that the employer knew or should have know about the harassment but took no effectual steps to correct or prevent it. Katz, 709 F.2d at 256. In order to demonstrate a hostile environment, the plaintiff must produce evidence that the conduct was unwelcomed, that the harassment was gender based, and that it was sufficiently severe or pervasive to create an abusive work environment. Swentek v. USAIR, Inc., 830 F.2d 552 (4th Cir.1987); see also Hammill v. Albemarle County School Bd., Civil Action No. 93-00031-C, 1994 WL 147753 (W.D.Va. April 18, 1994).\nDefendants initially contend that, irrespective of plaintiff's specific evidence concerning the nature of the conduct, she cannot prevail on this claim because the offensive conduct was not pervasive or severe as a matter of law. Equally, and citing Meritor Sav. Bank v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986), Andrade v. Mayfair Management, Inc., 88 F.3d 258 (4th Cir.1996), as well as the decision by the Court of Appeals for the District of Columbia in Gary v. Long, 59 F.3d 1391 (D.C.Cir.), cert. denied, ___ U.S. ___, 116 S.Ct. 569, 133 L.Ed.2d 493 (1995), Sheetz and Fox Mountain offer that the alleged conduct of Rinker and Campbell was outside the scope of their corporate sexual harassment policy and procedures, as a result of which their individual conduct cannot be attributed to the corporate employer. To put it another way, these corporate defendants believe that the presence of a sexual harassment policy and grievance procedure insulates them from liability based upon what they characterized as unauthorized and random conduct of their supervisory staff. They ask this court to go even further to hold that any failure on the part of plaintiff to engage the corporate grievance process should bar her claims here. See Ridley v. District of Columbia, 945 F.Supp. 333 (D.D.C.1996).[2]\n*1191 Plaintiff's response to defendants on these issues is simple and straightforward. She argues the evidence demonstrates that the defendants' sexual harassment policy and procedures may have existed on paper, but that they were ineffectual and failed to achieve the purpose for which they supposedly were intended. Plaintiff relies on the testimony of defendants' own witness, Mr. Thomas, to the extent he stated or implied that the defendants' policy and procedures were not effective. She further believes that Campbell and Rinker revealed in their own testimony and in their conduct on the job the ineffectiveness of the corporate policy at the time the incidents relevant to this case occurred. Particularly, Kidwell points to Rinker's testimony that his conduct did not violate corporate policy to demonstrate the inconsistency between the defense Sheetz and Fox Mountain offer and the facts related to the conduct of their supervisors and the efficacy of their corporate policy. To put plaintiff's position in simple terms, she believes that in order for defendants to prevail on their effective corporate policy defense, the policy must be effective, and there are genuine issues of material fact on that very question in this case.\nIt is true that the Court of Appeals for the Fourth Circuit in Andrade recognized that there is some limitation on corporate liability for sexual harassment by supervisors and that illegal sexual harassment ordinarily is considered beyond the scope of employment. However, this court simply cannot accept the interpretation of Andrade that defendants offer under the circumstances presented in this case. Here both the immediate supervisor and the district supervisor engaged in conduct that allegedly was offensive. Under the circumstances presented, this court is of the view that a reasonable trier of fact could conclude both that the policy was ineffectual because plaintiff, in reality, had no place to turn and that the employer knew or should have known that the conduct was occurring but failed to take corrective action. In Andrade, the employee had available to her direct access to a corporate representative not involved in any unlawful practice. It is not so clear on the facts of this case that such access was known by or reasonably available to Kidwell despite defendants' suggestions to the contrary.[3] A resolution of that fact is best left to a jury.\nTherefore, this court RECOMMENDS that the motions for summary judgment on plaintiff's hostile environment claim be denied.\n\nC. Retaliation (COUNT III)\nTo prevail on a claim for retaliation, a plaintiff must demonstrate that (1) she engaged in protected activity under Title VII, (2) that her employer took adverse action against her, and (3) that there was a causal connection between the protected activity and the job action. Hopkins v. Baltimore Gas & Elec. Co., 77 F.3d 745 (4th Cir.), cert. denied, ___ U.S. ___, 117 S.Ct. 70, 136 L.Ed.2d 30. (1996); Ross, 759 F.2d 355. If the plaintiff makes out a prima facie case of retaliation, the employer is entitled to articulate a legitimate nondiscriminatory reason for the job action, subject, however, to countervailing evidence by plaintiff that the reason articulated was pretextual. In the end, plaintiff must be able to produce evidence upon which a trier of fact might conclude that, \"but for\" her protected activity, plaintiff would not have suffered adverse job action. Ross, 759 F.2d at 366.\nDefendants take the position that plaintiff's evidence has failed to establish a \"but for\" connection between her alleged protected activity and any job action. They essentially rely on the same arguments advanced in their quid pro quo defense to support their position on plaintiff's retaliation claim, punctuated by evidence in this record to demonstrate that plaintiff violated several company policies related to daily transactional reporting. Plaintiff counters with evidence of disparate application of the policies plaintiff allegedly violated, laying a circumstantial foundation for an inference that the reasons cited for defendants' job action was pretextual.\n*1192 For the same reasons this court believes there are genuine issues of material fact on the quid pro quo and hostile environment claims, the court equally believes there are genuine issues of fact on plaintiffs retaliation claim. There is enough evidence in this record that a trier of fact could find that everything plaintiff said happened to her was the direct result of her failure to acquiesce in and her efforts to complain about the events occurring in the workplace. The motions for summary judgment on plaintiff's retaliation claim should be denied, and it is so RECOMMENDED.\n\nII. SUPPLEMENTAL STATE LAW CLAIMS\n\nA. Sexual Assault and Battery and Assault and Battery (COUNTS V and VI)\nThere are several levels of consideration here in view of the fact that both Rinker and Campbell are charged with sexual assault and battery and common law assault and battery, and the corporate defendants are alleged to be vicariously liable for the conduct of both corporate employees. Rinker has moved for summary judgment on just the sexual assault and battery count. Campbell and the corporate defendant's have moved for summary judgment on both state law claims.\nRinker challenges the sufficiency of plaintiffs sexual assault and battery claim against him on two fronts. The first is that no cause of action exists in Virginia to support such a claim, which contention this court and the presiding District Judge rejected when the motions to dismiss were overruled. See also Jamison v. Wiley, 14 F.3d 222 (4th Cir.1994); Pizzino v. J. Dillard Hutchens Corp., 1996 Lexis 14291 (W.D.Va. August 8, 1996) (Kiser, Chief Judge).[4]\nRinker's second front is that there is no evidence of force, threat or intimidation, which defendants believe is critical to a sexual assault and battery claim. Plaintiff responds not by pointing to evidence of threat, force or intimidation but simply by relying on the fact that the alleged conduct was committed by supervisory personnel and suggesting that ordering plaintiff to clean what she believed to be semen from the toilets constituted such force, threat or intimidation.\nThis court finds defendants' position here to be compelling in that something more than just the authority imposed by a supervisor/employee relationship must be demonstrated to allow a jury to infer threat, force or intimidation. Moreover, this court rejects the notion that by requiring an employee to clean a bathroom, a jury can infer that she was sexually assaulted. Therefore, this court RECOMMENDS that summary judgment enter against plaintiff on her sexual assault and battery claims against both the individual defendants and the corporate defendants under the theory of respondeat superior.\nThe common law assault and battery claims against the individuals, however, stand on more substantial footing. Any unconsented touching of another may constitute assault and battery under the Virginia common law, provided it is done in a rude, indolent or angry way. Wood v. Commonwealth, 149 Va. 401, 140 S.E. 114 (1927). Rinker does not seek summary judgment on plaintiff's claim against him, but Campbell suggests that his contact with her does not amount to a common law assault and battery as a matter of law. If plaintiff's testimony is accepted by the trier of fact, there is ample evidence upon which a jury could conclude that Campbell's rubbing plaintiff's neck, ears and hair after he was asked to stop constituted a common law assault and battery. Thus, it is RECOMMENDED that Campbell's motion for summary judgment be denied.\nSheetz and Fox Mountain maintain that the alleged assaults and batteries were outside Rinker's and Campbell's scope of employment, and they cannot be attributed to the corporate defendants vicariously under Virginia's doctrine of respondeat superior. Jamison, 14 F.3d 222; Hott, 922 F.Supp. 1114. Plaintiff responds simply by suggesting to the court that whether the individuals were advancing the interests of their corporate *1193 employer is a question of fact for the jury.\nThe problem this court has with plaintiff's position is that there is no evidence to suggest the conduct complained of naturally grew out of either employee's view toward furthering his master's business as opposed to arising out of some external personal motive to act on his own accord. Jamison, 14 F.3d at 237. Absent that evidence, the court only could conclude that the conduct of Campbell and Rinker fell outside the scope of their employment under Virginia law.[5]\nTherefore, this court RECOMMENDS that summary judgment be granted to Sheetz and Fox Mountain on plaintiff's assault and battery claims.\n\nB. Breach of Contract (COUNT XI)\nPlaintiff premises her entire contract theory upon recitations in defendants' policy manual that prohibit sexual harassment. She claims that a violation of that prohibition also is a breach of her employment contract. As defendants point out, the policy statements expressly disclaim the notion that they are contractual in any way or that they limit plaintiff's employment at will.\nIt is RECOMMENDED that defendants' motion for summary judgment on this claim be granted as the evidence fails to show that plaintiff's employment was anything but at will, and plaintiff has failed to show any valid contractual provisions which defendant breached.\n\nC. Defamation (COUNT XII)\nBecause plaintiff has conceded that the qualified privilege attaching to intercorporate communications exists in this case, in order to prevail on her state law claim of defamation, she must show by the greater weight of evidence that a false and defamatory statement about her was published, and by clear and convincing evidence that such was done with actual malice. Great Coastal Express, Inc. v. Ellington, 230 Va. 142, 334 S.E.2d 846 (1985). This claim will not long detain the court.\nPlaintiff has failed to produce evidence upon which a trier of fact could conclude by the clear and convincing evidence that the defendants acted with actual malice. Her argument that this should be a matter for the jury does not hold water because there is not one iota of evidence to support that argument. Accordingly, it is RECOMMENDED that summary judgment be granted in favor of all defendants on plaintiff's defamation claim.\n\nSUMMARY\nFor the reasons set forth above, this court RECOMMENDS that summary Judgment be granted in favor of all defendants on COUNT V and COUNT XII and in favor of Sheetz and Fox Mountain on COUNT VI and COUNT XI, but that summary judgment be denied on all other claims.\nThe Clerk is directed to immediately transmit the record in this case to the Hon. James H. Michael, Jr., United States District Judge. Both sides are reminded that pursuant to Rule 72(b) they are entitled to note objections, if any they may have, to this Report and Recommendation within (10) days hereof. Any adjudication of fact or conclusion of law rendered herein by the undersigned not specifically objected to within the period prescribed by law may become conclusive upon the parties. Failure to file specific objections pursuant to 28 U.S.C. \u00a7 636(b)(1)(C) as to factual recitations or findings as well as to the conclusions reached by the undersigned may be construed by any reviewing court as a waiver of such objection.\nNOTES\n[1] Under 42 U.S.C. \u00a7 2000e(b), knowledge of sexual harassment, if any, \"is imputed to the employer through its agent-supervisor.\" Spencer, 894 F.2d at 658 n. 10; see also Martin v. Cavalier Hotel Corp., 48 F.3d 1343, 1351 n. 3 (4th Cir. 1995) (\"[I]n quid pro quo sexual harassment cases an employer is automatically liable for its supervisor's conduct.\").\n[2] While the court notes that Ms. Thomas is the plaintiff's sister, determinations of credibility or bias, if any, are properly made by the trier of fact.\n[3] This court is not alone in construing Plummer as a seminal case which may have altered significantly the law of respondeat superior in Virginia. In Doe v. Bruton Parish Church, VLW XXX-X-XXX (Cir. Ct., City of Williamsburg, 1997), the court permitted a plaintiff to go forward on the Plummer court's interpretation of respondeat superior because the court could not reconcile it with previous Virginia decisional authority.\n[1] Important to this case, Spencer counsels that where the act was committed by a supervisor, this element is met because knowledge of the supervisor is imputed to the employer. Spencer, 894 F.2d at 658 n. 10. See also Martin v. Cavalier Hotel Corp., 48 F.3d 1343, 1351 n. 3 (4th Cir. 1995).\n[2] The court notes here that the defendants oppose plaintiff's claim to the extent it is premised on evidence related to the alleged \"bathroom incident.\" They believe this incident was not within the purview of the original EEOC charge and, thus, cannot be introduced into evidence or otherwise relied on by plaintiff to prove a hostile environment. This court disagrees because the EEOC charge was sufficient to put defendants on notice of sexual harassment, and it is this court's view that not every stitch of evidence against an employer need be parsed in the EEOC charge to preserve the right to introduce it or rely on it at trial should EEOC conciliation fail, EEOC v. General Electric Co., 532 F.2d 359 (4th Cir.1976).\n[3] As the court understands the policy, Kidwell would still have to address her grievances with the very supervisors who were offending her.\n[4] This court is not inclined to accept a decision by a Virginia Circuit Court in Fox v. Rich Prods. Corp., 34 Va. Cir. Ct. 403 (1994), as precedent, for that court subsumed a sexual assault and battery claim in the plaintiff's simple assault and battery claim.\n[5] Lest there be confusion, the court distinguishes here between Title VII principles related to employer liability for acts of supervisory employees and those under Virginia's doctrine of respondeat superior.\n"} -{"text": " FILED\n NOT FOR PUBLICATION AUG 01 2014\n\n MOLLY C. DWYER, CLERK\n UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS\n\n\n\n FOR THE NINTH CIRCUIT\n\n\nMARIO LEANOS; OLGA LEANOS, No. 12-56383\n\n Plaintiffs - Appellants, D.C. No. 2:11-cv-07541-JAK-SS\n\n v.\n MEMORANDUM*\nWASHINGTON MUTUAL BANK FA,\n\n Defendant,\n\n And\n\nJPMORGAN CHASE BANK NA;\nCALIFORNIA RECONVEYANCE\nCOMPANY,\n\n Defendants - Appellees.\n\n\n Appeal from the United States District Court\n for the Central District of California\n John A. Kronstadt, District Judge, Presiding\n\n Submitted July 22, 2014**\n\nBefore: GOODWIN, CANBY, and CALLAHAN, Circuit Judges.\n\n *\n This disposition is not appropriate for publication and is not precedent\nexcept as provided by 9th Cir. R. 36-3.\n **\n The panel unanimously concludes this case is suitable for decision\nwithout oral argument. See Fed. R. App. P. 34(a)(2).\n\f Mario and Olga Leanos appeal pro se from the district court\u2019s order\n\ndismissing their action against their mortgage lender and other private parties\n\nalleging constitutional violations and various federal and state law claims. We\n\nhave jurisdiction under 28 U.S.C. \u00a7 1291. We review for an abuse of discretion a\n\ndismissal for failure to comply with an order to amend the complaint. McHenry v.\n\nRenne, 84 F.3d 1172, 1179 (9th Cir. 1996). We affirm.\n\n The district court did not abuse its discretion in dismissing plaintiffs\u2019 action\n\nfor failure to comply with the court\u2019s order to file an amended complaint because\n\nplaintiffs failed to file an amended complaint, despite being afforded ample time to\n\ndo so and being warned that failure to do so would result in the dismissal of their\n\naction. See id. at 1177-78; see also Pagtalunan v. Galaza, 291 F.3d 639, 642-43\n\n(9th Cir. 2002) (discussing factors relevant to dismissal for failure to comply with\n\na court order).\n\n AFFIRMED.\n\n\n\n\n 2 12-56383\n\f"} -{"text": "786 F.2d 1165\nUnpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.ALICE MCQUAID, Plaintiff-Appellant,v.MARGARET M. HECKLER, SECRETARY OF HEALTH AND HUMAN SERVICES,Defendant-Appellee.\n85-3450\nUnited States Court of Appeals, Sixth Circuit.\n2/10/86\nN.D.Ohio\nAPPEAL DISMISSED\nORDER\n\n1\nBEFORE: MARTIN and KRUPANSKY, Circuit Judges and CHURCHILL, District Judge.*\n\n\n2\nPlaintiff filed this action challenging the Secretary's denial of social security disability and widow's insurance benefits. The case was referred to a magistrate, who recommended granting the Secretary's motion for summary judgment. The district court adopted the magistrate's report and dismissed the complaint. Plaintiff filed a timely appeal. The Secretary has moved to dismiss the appeal on the grounds that plaintiff waived his right to appeal. The appeal has been referred to a panel of this Court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination of plaintiff's brief and the record, the panel agrees unanimously that oral argument is not needed. Rule 34(a), Federal Rules of Appellate Procedure.\n\n\n3\nThe record reveals that plaintiff failed to file objections to the magistrate's report and recommendation. Plaintiff admits to this fact in her appellate brief. The magistrate's report clearly stated that the parties were required to file objections or else waive the right to appeal. Fifteen (15) days after the magistrate's report was filed, the district court noted that no objections had been filed, adopted the magistrate's report and recommendation and granted the Secretary's motion for summary judgment. Under these circumstances, plaintiff waived his right to appeal. See Thomas v. Arn, ---- U.S. ----, 54 U.S.L.W. 4032 (U.S. Dec. 4, 1985); Patterson v. Mintzes, 717 F.2d 284 (6th Cir. 1983); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).\n\n\n4\nAccordingly, it is ORDERED that the motion to dismiss the appeal is granted and the appeal is dismissed. Rule 9(d)(2), Rules of the Sixth Circuit.\n\n\n\n*\n The Honorable James P. Churchill, U.S. District Judge for the Eastern District of Michigan, sitting by designation\n\n\n"} -{"text": " Fourth Court of Appeals\n San Antonio, Texas\n January 29, 2020\n\n No. 04-19-00892-CV\n\n IN THE INTEREST OF L.M.R., A CHILD\n\n From the 73rd Judicial District Court, Bexar County, Texas\n Trial Court No. 2019-PA-02001\n Honorable Peter A. Sakai, Judge Presiding\n\n\n ORDER\n Appellant has filed a motion for a seven-day extension of time to file a brief. We grant\nthe motion and order appellant\u2019s brief filed by February 4, 2020. This is an accelerated appeal\nof an order in a suit for termination of the parent-child relationship that must be disposed of by\nthis court within 180 days of the date the notice of appeal was filed in the trial court. See Tex. R.\nJud. Admin. 6.2. Because of the time constraints governing the disposition of this appeal, further\nrequests for extensions of time will be disfavored.\n\n\n\n\n _________________________________\n Luz Elena D. Chapa, Justice\n\n\n IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the said\ncourt on this 29th day of January, 2020.\n\n\n\n ___________________________________\n Michael A. Cruz,\n Clerk of Court\n\f"} -{"text": " Case: 15-13930 Date Filed: 05/23/2016 Page: 1 of 5\n\n\n [DO NOT PUBLISH]\n\n\n\n IN THE UNITED STATES COURT OF APPEALS\n\n FOR THE ELEVENTH CIRCUIT\n ________________________\n\n No. 15-13930\n Non-Argument Calendar\n ________________________\n\n Agency No. A088-076-315\n\n\n\nDONG XUBAO,\n\n Petitioner,\n\n versus\n\nU.S. ATTORNEY GENERAL,\n\n Respondent.\n\n ________________________\n\n Petition for Review of a Decision of the\n Board of Immigration Appeals\n ________________________\n\n (May 23, 2016)\n\nBefore WILLIAM PRYOR, MARTIN and FAY, Circuit Judges.\n\nPER CURIAM:\n\f Case: 15-13930 Date Filed: 05/23/2016 Page: 2 of 5\n\n\n Xu Bao Dong seeks review of a decision by the Board of Immigration\n\nAppeals (\u201cBIA\u201d) affirming the immigration judge\u2019s (\u201cIJ\u201d) denial of his motion to\n\nreopen removal proceedings. On appeal, Dong argues that the BIA and IJ abused\n\ntheir discretion by denying his motion to reopen based on the finding that he failed\n\nto establish changed conditions for members of unsanctioned Christian churches in\n\nChina. After careful review, we deny the petition.\n\n I.\n\n We review the denial of a motion to reopen an immigration petition for an\n\nabuse of discretion, determining only whether the BIA exercised its discretion in\n\nan arbitrary or capricious manner. Jiang v. U.S. Atty. Gen., 568 F.3d 1252, 1256\n\n(11th Cir. 2009). We review only the BIA\u2019s decision unless the BIA has expressly\n\nadopted the IJ\u2019s decision, which it did not do in this case. Id.\n\n An alien may file only one motion to reopen removal proceedings, and it\n\nmust be filed no later than 90 days after the final administrative decision. 8 C.F.R.\n\n\u00a7 1003.23(b)(1). However, these limitations do not apply when: (1) an alien files a\n\nmotion to reopen that seeks asylum or the withholding of removal where the\n\nalien\u2019s life or freedom would be threatened or based on the Convention Against\n\nTorture; (2) the motion is predicated on \u201cchanged country conditions\u201d; and (3) the\n\nchanged conditions are material and could not have been discovered at the time of\n\nthe removal proceedings. 8 U.S.C. \u00a7 1229a(c)(7)(C)(ii); 8 C.F.R.\n\n\n 2\n\f Case: 15-13930 Date Filed: 05/23/2016 Page: 3 of 5\n\n\n\u00a7 1003.23(b)(4)(i). \u201cAn alien who attempts to show that the evidence is material\n\nbears a heavy burden and must present evidence that demonstrates that, if the\n\nproceedings were opened, the new evidence would likely change the result in the\n\ncase.\u201d Jiang, 568 F.3d at 1256\u201357. \u201cAn alien cannot circumvent the requirement\n\nof changed country conditions by demonstrating only a change in [his] personal\n\ncircumstances.\u201d Zhang v. U.S. Att\u2019y Gen., 572 F.3d 1316, 1319 (11th Cir. 2009)\n\n(per curiam). Even if a motion to reopen is timely, it can be denied because of a\n\nfailure to show prima facie eligibility for the relief sought, failure to introduce\n\npreviously unavailable material evidence, or because the alien is not entitled to a\n\nfurther exercise of discretion. I.N.S. v. Abudu, 485 U.S. 94, 104\u201305, 108 S. Ct.\n\n904, 912 (1988).\n\n II.\n\n Dong, a native and citizen of China, entered the United States without\n\ninspection in 2009. The Department of Homeland Security (DHS) charged Dong\n\nwith being removable as \u201can alien present in the United States without being\n\nadmitted or paroled.\u201d Dong appeared in immigration court without counsel on\n\nJune 2, 2009, and stated that he was afraid of being persecuted upon returning to\n\nChina due to his membership in an underground Christian church. The IJ informed\n\nhim that he might be eligible for asylum or withholding of removal and granted\n\nhim 28 days to prepare his application. Dong appeared in court on June 30, 2009,\n\n\n 3\n\f Case: 15-13930 Date Filed: 05/23/2016 Page: 4 of 5\n\n\nbut did not submit an application for relief from removal. The IJ found that Dong\n\nwas removable and that he had abandoned his right to seek asylum. After Dong\n\ndeclined to take voluntary departure, the court ordered that he be removed to\n\nChina.\n\n On November 20, 2014, Dong filed a counseled motion to reopen based on a\n\nchange in country conditions in China. Dong conceded that the filing occurred\n\nwell after 90 days from the final administrative decision, but argued that the time\n\nlimit did not apply because he was applying for asylum or withholding of removal\n\nbased on changed country conditions in China. He alleged that the persecution of\n\nChristians had worsened and that his recent baptism would make him a target. The\n\nIJ denied the motion, finding that Dong did not meet his burden of establishing a\n\nchange in country conditions since 2009.\n\n The BIA did not abuse its discretion by affirming the IJ\u2019s denial of Dong\u2019s\n\nmotion to reopen based on a finding that he did not show changed country\n\nconditions. To support his claim that persecution worsened in China between 2009\n\nand 2014, Dong attached a letter from Jiang Jian Nan, a friend and unsanctioned\n\nchurch member in China. The letter, dated October 30, 2014, stated: \u201cDue to the\n\nfact that at an earlier time, our church was often persecuted by the police, and on\n\ntop of that, the cult organization \u2018Almighty God\u2019s\u2019 homicide case, police have\n\nbeen persecuting us even more.\u201d However, the letter does not establish changed\n\n\n 4\n\f Case: 15-13930 Date Filed: 05/23/2016 Page: 5 of 5\n\n\ncountry conditions; instead, the letter describes the government\u2019s activities\n\nregarding one specific church. Beyond that, the letter\u2019s statements about ongoing\n\npersecution establish a continuation of country conditions rather than a change.\n\n Dong also attached copies of the State Department\u2019s Religious Freedom\n\nReports from 2009 and 2013 to prove changed country conditions. However, the\n\nreports show that conditions largely remained the same. In both reports, the\n\namount of official interference with unsanctioned churches varied widely\n\ndepending on location. The 2013 report noted that \u201csome house church members\u201d\n\nfelt that they had \u201cmore freedom than in the past to conduct religious services,\u201d as\n\nlong as they did so in private. In his motion to reopen, Dong argued that his faith\n\nrequires that he proselytize, making the requirement to remain private a particular\n\nburden on his religious freedom. However, the reports indicate no change in\n\ncountry conditions in this regard since three members of a house church received\n\none-year retraining-through-labor sentences for \u201cillegal proselytizing\u201d in 2008,\n\nprior to Dong\u2019s initial hearing.\n\n Because Dong failed to show materially changed country conditions, his\n\nmotion was untimely and he was not entitled to reopen his removal proceedings.\n\nThe BIA did not abuse its discretion.\n\n PETITION DENIED.\n\n\n\n\n 5\n\f"} -{"text": "\n65 So.2d 698 (1953)\nAIR CONDITIONING ENGINEERS, Inc\nv.\nSMALL.\n1 Div. 426.\nSupreme Court of Alabama.\nApril 16, 1953.\nRehearing Denied June 18, 1953.\n*699 Vickers & Thornton, Mobile, for appellant.\nThos. E. Twitty and Inge, Twitty, Armbrecht & Jackson, Mobile, for appellee.\nPER CURIAM.\nThe primary question on this appeal is whether a contract was entered into between appellee, as the general contractor for an office building, and appellant, as a subcontractor for the air conditioning and heating. There was judgment for plaintiff and defendant appeals.\nThe first count of the complaint was a common count on account. It may be eliminated as not appropriate to the claim as developed. 3 Alabama Digest, Assumpsit. The second count is for the breach of a contract in writing, consisting of a written offer under date of August 30, 1948 made by the defendant to the plaintiff of a named figure as the amount of defendant's bid to perform certain work and furnish certain materials and equipment in accordance with specifications for alterations and addition to an office building; that the offer was accepted by plaintiff in writing on, to wit, September 16, 1948. A breach *700 was alleged as having been made by defendant's failure to perform any of the work or furnish any of the material. Appellant does not press other claim of error than that involved in the failure to prove the existence of the contract as alleged.\nThe Alabama State Docks Commission advertised for bids for the alteration of its office building. Plaintiff, a resident of Jacksonville, Florida, wished to make a bid and some correspondence was had with defendant about it. A letter dated August 30, 1948 was written by defendant to plaintiff, which letter constitutes defendant's bid referred to in count 2 of the complaint. It is as follows:\n \"Air Conditioning Engineers, Inc.\n152 St. Louis St. P. O. Box 1567\nMobile 9, Alabama Dial 2-1891-2\n August 30, 1948.\n\"Mr. James H. Small & Company\nP. O. Box 4786,\nJacksonville, Florida.\n Subject: Air Conditioning and Heating,\n State Docks\n Office Building.\n\"Gentlemen:\n\"Wish to quote a price of $35,851.00 for Division XXII, air conditioning and heating page 1 through 13. We have also included under Division IX miscellaneous metals the following paragraphs:\n\"1. Return air conditioning floor and ceiling grilles\n\"2. Equipment room louvres\n\"3. Louvres in Dock Department walls and interior doors. We would like to point out that we only furnish the louvres in the Dock Department walls and interior doors and these are to be installed by others.\n\"We are using Carrier equipment throughout with the exception of the fan and coil sections. The fan and coil sections that we use will comply with the specifications.\n\"This bid is in accordance with specifications for alterations and additions to Office Building Alabama State Docks, Mobile, Alabama, prepared by Donald A. Hawkins, architect, Luquire Engineering Company, consulting engineers, and Addendum No. 1, Drawings M-7, M-8, M-9 dated April 1, 1948.\n\"We appreciate very much the opportunity of quoting and if there are any questions concerning this bid we will be glad to clarify them upon your request.\n \"Very truly yours,\n (sgd) J. H. Hastie.\"\nPlaintiff testified that he used the named figure in his bid for the general contract. That he had not received defendant's letter of August 30, 1948, but acted in accordance with the telephone conversation. Plaintiff's bid was mailed from Jacksonville, Florida, on Saturday, August 29th. The bids were opened August 31, 1948. Mr. Hastie, vicepresident of defendant, was present, and telephoned plaintiff that his bid was low. Plaintiff was awarded the contract on the bids opened August 31st. Plaintiff came to Mobile from Jacksonville, his residence, and on September 3, 1948, advised the vicepresident that the governor had approved his general contract, and as soon as the governor signed it a formal order or contract would be sent defendant. Plaintiff Small testified:\n\"On September 3rd. I received a telephone call advising me to come over and see Director Sweet, which I did. I arrived here on the third. I had with me a letter listing subcontractors for submission to the architect, the contract document stated that we must not let the subcontracts unless and until the subcontractor had been approved by the architect, and in compliance with that we had made a list of the proposed subcontractors for submission. On that list, which is what you have in your hand, I have the names of these subcontractors, and the names of the men in that particular firm that we had been dealing with. When I was here on the third I called these gentlemen, including Mr. Hastie of Air Conditioning Engineers, and told them, that is, they know we were low, that I had just seen Mr. Sweet, and he had told us that the contract would be issued as soon as the Governor gave his signature, that he had already approved it; that we had used their figure in the bid, and we would send them a formal order as soon as they were approved.\"\n*701 A list of the subcontractors was then sent to the architect, including the name of defendant with a pencil notation opposite his name of 35,800. A copy of the specifications for the work, such as were here material, was introduced in evidence as referred to in the letter from defendant to plaintiff of August 30, 1948. By it all bidders were required to examine carefully the plans and specifications. They also included specifications for the air conditioning and heating, which provided that \"the compressor shall be of a multi-cylinder reciprocating type, slow speed belt driven,\" and that the \"condenser shall be constructed entirely of stainless steel with the exception of fan shaft, wheels and scrolls.\"\nBy letter dated September 16, 1948, plaintiff wrote to defendant as follows:\n\"James H. Small & Co. (Not incorporated) 1528 East Adams Street,\n P. O. Box 4786, Phone\u00975\u00976470\n Jacksonville 1, Florida.\n General Contractors-Engineers\n September 16, 1948\n\"Mr. J. H. Hastie, Vice-President & Secretary,\nAir Conditioning Engineers, Inc.,\nP. O. Box 1567\nMobile, 9, Alabama.\n Subject: Alterations and Additions to\n Office Building,\n Alabama State Docks\n Mobile, Alabama.\n\"Dear Mr. Hastie:\n\"We are pleased to advise you have been approved as a subcontractor for air conditioning and heating for the subject job and to save time we are enclosing the original copy of the subcontract covering this work which we have executed.\n\"If the subcontract is satisfactory to you please complete the performance bond and return to us an executed copy of the contract and bond.\n\"The costs of the performance bond will be borne by us.\n \"Yours very truly,\n James H. Small & Co.\n (sgd) James H. Small\n James H. Small.\"\nThis apparently was intended to prove plaintiff's acceptance of defendant's bid, as alleged in count 2 of the complaint. There was enclosed in that letter a proposed written contract executed by the plaintiff and for execution by defendant with request for the return of it to plaintiff. There was no acceptance in terms used in that letter. It was stated in defendant's letter of August 30th that he was using Carrier equipment for air conditioning and heating. That equipment consisted of a high speed compressor instead of a low speed compressor as required by the specifications, and the equipment also consisted of a galvanized evaporative condenser instead of one made entirely of stainless steel as required by the specifications. The proposed subcontract, submitted to the defendant for execution with the letter of September 16, 1948, contained the requirement that the subcontractor shall be bound by the terms of the original contract in so far as the same may pertain to the work and materials embraced in the subcontract. That had the effect of eliminating Carrier equipment, referred to in the letter of August 30, 1948.\nIn a letter dated September 30, 1948, plaintiff wrote to the defendant calling his attention to his letter of September 16th, in which he enclosed the subcontract to defendant for execution, and requested its return signed by defendant. Soon thereafter, in the early part of October of 1948, plaintiff Small and vicepresident Hastie of defendant corporation had a conversation in Mobile, as to which plaintiff testified that he asked Mr. Hastie why he had not sent back the subcontract; that he told Mr. Small, in reply, that they were having difficulty with the architect over the equipment defendant had submitted in accordance with the provisions of the subcontract, and that Small had seen Mr. Hawkins, the architect, who had told Small that he had been having trouble getting a list of equipment from defendant. Small then testified that he told Mr. Hastie that he should send in the list, and Mr. Hastie said he would like for Mr. Small to see Mr. McPherson. They went into the next room and saw Mr. McPherson, president of defendant corporation: whereupon Mr. Small told Mr. McPherson *702 that, in his opinion, they would not have any trouble with Mr. Hawkins if they complied with his reasonable demands, and Mr. McPherson said they would consider it and they would get it straightened out with Mr. Hawkins.\nThere was also introduced in evidence a letter of October 6, 1948, addressed to the defendant signed by the architect Hawkins, advising the defendant that their bid was not based on the plans and specifications or in accordance with the instructions to the bidder in two particulars: (1) that specifications call for stainless steel evaporator condenser, whereas the defendant quoted a galvanized condenser; and (2) the specifications call for low speed motor on the compressor, whereas defendant quoted high speed motor on the compressor, and, therefore, he has reached the conclusion that defendant's bid was not given in good faith since neither the architect or general contractor were informed of the defendant's intention not to comply with the specifications.\nA letter was introduced dated October 13, 1948 to the plaintiff signed by Mr. McPherson as president of defendant corporation advising him that defendant had received a letter from Mr. Hawkins, the architect, dated October 6, 1948, stating that the Carrier compressor and evaporative condenser which they proposed to use do not meet the specifications and are not approved, and also advising plaintiff that the defendant apparently misinterpreted the specifications in so far as the condenser and compressor were concerned; and that the defendant felt that they should step aside and allow the contract to be awarded to the low bidder or some other party the plaintiff may designate. It also advised plaintiff that defendant felt that any reputable, standard air conditioning equipment, such as Carrier, would meet with the architect's approval, but that since that was not the case defendant had no alternative but to withdraw.\nOn October 23, 1948, plaintiff wrote to defendant in answer to the letter of October 13, 1948, (so reciting) advising defendant that plaintiff had used defendant's figures in preparing his bid and had so advised defendant, and that defendant \"have an obligation to fulfill your contract with us.\" That plaintiff will secure other bids for the work and hold defendant responsible for any increased cost plaintiff may incur \"by this procedure\". In a letter dated January 20, 1949, plaintiff wrote to defendant as follows:\n \"January 20, 1949.\n\"Air Conditioning Engineers,\nMobile, Alabama.\n Attn. Mr. J. C. McPherson.\n\"Dear Sir:\n\"Referring to your letter of October 13, 1948 and ours of October 25, 1948:\n\"As stated in our letter above cited we made diligent effort to secure a satisfactory subcontractor for the work of heating and air conditioning at the State Docks Office when you withdrew your accepted offer on which our bid to Alabama State Docks & Terminals was predicated.\n\"We received one informal bid for the work in an amount slightly more than $40,000.00 and a firm bid from Leff Engineering Company of Mobile in the amount of $38,617.00.\n\"As your offer, which we had accepted and which you were advised we would use in our bid to the Alabama State Docks & Terminals, was for the amount of $35,851.00, you are indebted to us for the difference of $2,766.00 for which we would be glad to have your remittance.\n \"Yours very truly,\n James H. Small & Co.\n (sgd) James H. Small\n James H. Small.\"\n\"cc Director Sweet.\nPlaintiff then made proof as to such bid by Leff Engineering Company of $38,617, and his loss of $2,766 occasioned thereby. There was a jury and verdict for plaintiff for $3,039.80.\nWe repeat the statement that the right of defendant to the affirmative charge depends upon whether defendant became bound by a contract in writing as alleged in count 2, supra, of the complaint. The trial court in his oral charge and in special requested charges given by him submitted that question to the jury for decision.\n*703 The rule is that the minds of the parties must meet as to all the essential features of a contract. Cochran Lumber Co. v. Paterson & Edey Lumber Co., 202 Ala. 366, 80 So. 448; Bissinger v. Prince, 117 Ala. 480, 23 So. 67; Hodges v. Sublett, 91 Ala. 588, 8 So. 800. The assent of the parties must be manifest from the language used if it is certain in meaning.\nIn the case of Lutz v. Van Heynigen Brokerage Co., 199 Ala. 620, 75 So. 284, 288, the principle is stated as follows: \"While it is the province of the court to construe written contracts, where the meaning is to be collected from the writing without the aid of evidence aliunde, yet where the meaning, the intent of the parties, depends upon the ascertainment of facts aliunde the instrument, this `admixture of parol with written evidence draws the whole to the jury,' requires the submission of the issue to, the deduction of the inference of fact by, the jury. Sewall v. Henry, 9 Ala. 24, 31; Holman v. Crane, 16 Ala. 570, 580; Boykin v. Bank, 72 Ala. 262, 269, 47 Am.Rep. 408.\"\nThe rule is thus expressed in Boykin v. Bank of Mobile, 72 Ala. 262: \"It is the province of the court to construe written contracts and declare their legal effect. But, when the legal operation and effect of an instrument depends, not only on the meaning and construction of the words, but upon collateral facts in pais, and extrinsic evidence, the inference of facts to be drawn from the evidence should be submitted to the jury.\" See, also, Dozier v. Vizard Inv. Co., 203 Ala. 421, 83 So. 572.\nIn the case of Doe ex dem. Holman v. Crane, 16 Ala. 570, it is pointed out that a contract may consist of several instruments of writing and constitute but one agreement. And further, on page 580, of 16 Ala., that \"where the effect of written instruments depends not merely on their construction and meaning, but upon collateral facts in pais and extrinsic circumstances, the inferences of fact to be drawn from them should be left to the jury,\u0097'an admixture of parol with written evidence draws the whole to the jury.'\" That principle is also referred to in Merchants National Bank v. Cotnam, 250 Ala. 316, 326, 34 So.2d 122.\nA contract may consist of several communications between the parties, some in writing and some verbal, each constituting a link in the chain which constitutes the comprehensive contract. Every such communication is a part of the contract, and is not extraneous to it nor in pais. Stephenson Brick Co. v. Bessemer Engineering & Construction Co., 218 Ala. 325, 118 So. 570; McLendon v. Eubanks, 249 Ala. 170(5), 30 So.2d 261. But extraneous matter, that is in pais, may sometimes be shown to clear an ambiguity which exists when the entire chain forming the contract is considered and it is ambiguous. Merchants National Bank v. Hubbard, 220 Ala. 372, 125 So. 335; Obermark v. Clark, 216 Ala. 564, 114 So. 135, 55 A.L.R. 1153. Matter in pais used in that connection is that which is in opposition to that of record. This means in opposition to those incidents which constitute the contract. 2 Bouv.Law Dict., Rawle's Third Revision, p. 2441; 31 Corpus Juris 358, note 82, 42 C.J.S., In, p. 487.\nThe rule is also frequently stated that where there is no conflict in the evidence as to what are the terms of the contract involved in the suit, and its terms and conditions are certain, the construction of the contract is one of law for the court. That statement was made with reference to a chain of communications creating a contract. McFadden v. Henderson, 128 Ala. 221, 29 So. 640, and applies to verbal transactions when there is no conflict in the evidence, and the terms are positively stated. Swanner v. Swanner, 50 Ala. 66; Barnhill v. Howard, 104 Ala. 412, 16 So. 1.\nIt is also said that when the contract is plain and unambiguous there is no room for interpretation. Dunlap v. Macke, 233 Ala. 297, 171 So. 721; McLendon v. Eubanks, supra.\nWe think our cases mean that the court, and not the jury, will analyze and determine the meaning of a contract, whether verbal or written when its terms are clear and certain, and also ascertain *704 whether or not it is ambiguous in the light of its terms, and if it is found to be ambiguous, but not void for uncertainty, its meaning may be clarified by a consideration of the facts and circumstances aliunde and in pais, and when so it is the province of the jury to ascertain those facts and draw inferences from them which carries to the jury the whole issue upon proper instructions by the court.\nThe contract claimed by plaintiff in this case, as alleged in count two of the complaint, is that defendant made an offer in writing on August 30, 1948 to perform certain work and furnish certain materials and equipment in accordance with certain specifications, and that the offer was accepted by plaintiff in writing on, to wit, September 16, 1948. A proper construction of that bid and its alleged acceptance is not dependent upon any fact or circumstance extraneous to the incidents of the contract, supplied by parol evidence. The general specifications are referred to in the bid and became a part of it. They are not extraneous to the contract nor in pais of the record of the contract. The subcontract enclosed with the letter of September 16th is a part of it as an acceptance to the extent that it is an acceptance.\nOn that status this Court construes the bid of September 30, 1948, as the architect did, manifested by his letter of October 6th to defendant to furnish Carrier equipment (except as specified\u0097not material here), expressing in the bid the opinion that such equipment was in accordance with the specifications of the architect named. But the bid was not in accordance with those specifications.\nThe letter of September 16th by plaintiff to defendant, with the enclosed document which is supposed to be an acceptance of the bid, specifies in the enclosed document that defendant must comply with the specifications. That was in effect a counter proposal eliminating the Carrier equipment. To be a contract, therefore, defendant must accept the counter proposal. The description of the contract in the complaint stops with the letter of September 16th. Those two communications do not constitute the acceptance of a bid made in clear and certain terms, 17 C.J.S., Contracts, \u00a7 36, pp. 364, 365, as the complaint in effect alleges. But the letter of September 16th being a counter proposal, defendant set about to see if it could accept it; but failed to convince the architect that Carrier equipment would be satisfactory. Therefore, instead of accepting the counter proposal and signing the proffered subcontract, defendant wrote plaintiff on October 13, 1948, in effect, that it was unable to accept the counter proposal and withdrew its bid. There was never a meeting of the minds.\nThat, we think, is a proper interpretation of the situation, and is one for the court, and not the jury, to make.\nThe foregoing opinion was prepared by FOSTER, Supernumerary Judge of this Court while serving on it at the request of the Chief Justice, under authority of Title 13, section 32, Code, and was adopted by the Court as its opinion.\nFor the refusal of the affirmative charge requested by defendant, the judgment is reversed and the cause remanded.\nReversed and remanded.\nLAWSON, SIMPSON, STAKELY and MERRILL, JJ., concur.\n"} -{"text": "797 F.2d 1335\nGlenn S. PASSMAN, Petitioner-Appellant,v.Frank BLACKBURN, Warden, Louisiana State Penitentiary, etal., Respondents- Appellees.\nNo. 85-3249.\nUnited States Court of Appeals,Fifth Circuit.\nAug. 22, 1986.Rehearing Denied Sept. 23, 1986.\n\nGlenn S. Passman pro se.\nHenry Hoppe, III, Slidell, La. (Court-appointed), for petitioner-appellant.\nTom W. Thornhill, Asst. Dist. Atty., Abbott Reeves, Slidell, La., for respondents-appellees.\nAppeal from the United States District Court for the Eastern District of Louisiana.\nBefore REAVLEY, RANDALL and DAVIS, Circuit Judges.\nRANDALL, Circuit Judge:\n\n\n1\nGlenn S. Passman, an incarcerated state prisoner, appeals from the dismissal of his petition for a writ of habeas corpus, 28 U.S.C. Secs. 2241, 2254. For the reasons that follow, we affirm the judgment of the district court.\n\nI.\n\n2\nPassman was convicted by a jury in Louisiana in 1976 of armed robbery, and was sentenced to serve ninety-nine years without benefit of parole, probation, or suspension of sentence. The Louisiana Supreme Court affirmed the conviction. State v. Passman, 345 So.2d 874 (La.1977). After seeking post-conviction relief in state court, Passman, proceeding pro se, filed in 1979 a petition for writ of habeas corpus under Sec. 2254 in the federal district court raising the same claims as in the state petition. The petition raised eleven grounds. The district court's dismissal of the petition was affirmed by this court in 1981. Passman v. Blackburn, 652 F.2d 559 (5th Cir.1981), cert. denied, 455 U.S. 1022, 102 S.Ct. 1722, 72 L.Ed.2d 141 (1982).\n\n\n3\nPassman, again proceeding pro se, filed the instant petition, his second in federal court, in 1984. He raised four claims that were not raised in the first federal petition: (1) improper prosecution comments at trial concerning Passman's post-arrest silence; (2) the sentence amounts to cruel and unusual punishment; (3) failure of the state to prove an essential element of the crime, namely, that Passman was armed with a dangerous weapon; and (4) failure of the state to prove that Passman had the specific intent to deprive permanently the victim of the property stolen. Passman explained in the petition his failure to include those four grounds in his first petition as follows:\n\n\n4\nNone of the claims presented in this petition were presented in the previous post-conviction application. The reasons are that defendant did not have the aid of counsel in presenting his claims; did not know that the claims were cognizable; did not have access to prison library; due to recent law.\n\n\n5\nThe district judge ordered the petition referred to a magistrate, who filed an order pursuant to Rule 4, Rules Governing Sec. 2254 Cases in the United States District Courts, requiring the state to file an answer complying with Rule 5. Before the state filed an answer (it had been given two extensions of time), the magistrate by sua sponte written order notified Passman that his petition was subject to dismissal under Rule 9(b), and requested that Passman explain why he \"did not assert the grounds pleaded herein in his previous habeas corpus proceedings.\"1\n\n\n6\nPassman responded on the 9(b) form as follows:\n\n\n7\nFirstly, the grounds set forth in the second petition are new and different grounds as alleged in the first petition. Secondly, defendant had no knowledge of the legal principles--law pertaining to the grounds set forth in the instant petition when he filed his first petition in 1977; did not have the assistance of counsel; did not have proper law library or legal aid assistance; and due to changes in the law.\n\n\n8\nIn a memorandum of law accompanying the Rule 9(b) response, Passman asserted that \"in 1977 when [he] filed his first petition there was not even a law library or legal aid assigned to Camp C, Angola, Louisiana. And subsequently when a legal aid was assigned to Camp C defendant was allowed to check three books out from the Main Prison Law Library and was not allowed to visit the law library.\" Further, as to his claim concerning improper prosecution comments on his post-arrest silence, which relies on Doyle v. Ohio, 426 U.S. 610, 96 S.Ct. 2240, 49 L.Ed.2d 91 (1976), Passman asserted that he:\n\n\n9\nabsolutely did not understand the rationale of Doyle [ ] as it applied to the facts of his case. As a matter of fact defendant was not even aware of Doyle until after the first petition had been denied certiorari by the United States Supreme Court [in 1982]. Thereafter, while reading a \"Georgetown Law Journal\" defendant identified the Doyle violation was applicable to the facts of his case. Had defendant known of the rationale of Doyle in 1977 he definitely would have included it as one of his claims as the magnitude of the constitutional error would have definitely entitled him to relief then.\n\n\n10\nAs to the sentencing issue, Passman claimed that he \"was not aware that he had a liberty interest in the proper exercise of the sentencing judge's discretion which was a constitutional question of whether due process was accorded\" until 1982.2\n\n\n11\nThe state filed a short opposition to the petition a few days later. The state did not assert that Rule 9(b) barred consideration of the petition because the petition was an abuse of the writ. The state did not contend that Passman knew of the claims raised in the second petition at the time the first petition was filed. Rather, the state argued that \"[i]t is apparent that the instant application is an effort to relitigate the issues considered by the entire State and Federal court system without change.\" The state further asserted that Passman was barred by \"collateral estoppel\" from pursuing the petition: \"All bases for Federal habeas corpus have been examined by this and other Federal courts to no avail. All of those issues were previously considered and rejected and cannot now be reconsidered by this Honorable Court.\" Further, the state contended that Passman failed to exhaust state remedies.3 Passman responded to the state's opposition that, in fact, \"none of the issues presented [in the first petition] are raised in the instant petition.\"\n\n\n12\nShortly thereafter, the district judge revoked the reference to the magistrate, and issued an order denying the petition. The district judge determined that the petition was barred under Rule 9(b), without holding an evidentiary hearing. The court did not adopt the state's argument advanced in the answer that the four claims in the second petition had actually been raised in the first petition. Rather, the district judge concluded that Passman should have raised the four new issues in the first petition; therefore, this petition was subject to dismissal as an abuse of the writ. The court did not address Passman's factual assertions that he had no actual knowledge of the Doyle or sentencing issues, no direct access to a law library, and limited indirect access to books. The court did not find that Passman deliberately withheld these claims for delay or to harass the state. The district court concluded, however, that Passman did not \"carry his burden of proof\" of showing that the second petition was not an abuse of the writ:\n\n\n13\nPassman's first habeas corpus application and the supporting memorandum he submitted to the state district court, the Louisiana Supreme Court, and the United States District Court exemplify well researched, comprehensive pleadings. The pleadings are not reflective of an individual who is unskilled or one who had insufficient knowledge of the law. Nor does the record reflect an individual incapable of utilizing tools of legal research to ascertain changes in the law.\n\n\n14\nThe court is therefore of the opinion that petitioner's claim for habeas relief should be dismissed on procedural grounds.... The grounds raised in this second application cannot be said to have been initially established by legislation or jurisprudence in the interim period between the filing of Passman's first petition and the filing of this one. These four grounds are not novel arguments recently recognized as giving rise to a claim for post-conviction relief.\n\n\n15\nThe district court added, however, that even if it were to consider the merits, it was of the opinion that Passman would not be entitled to relief.\n\n\n16\nPassman filed a timely notice of appeal, and, still proceeding pro se, filed a detailed and well-reasoned brief with this court. Counsel was appointed to represent Passman after oral argument was scheduled. The state filed a brief, virtually devoid of any reasoned analysis, that has been of no assistance in considering the difficult issues raised on appeal. Oral argument was held, for which the state declined to appear.\n\nII.\nA.\n\n17\nBefore we consider Passman's argument that his successive petition did not constitute an abuse of the writ, we begin by setting forth the factual record as the state has chosen to permit Passman to develop it. The state did not allege and the district court did not find that Passman actually knew about the claims in the second petition when the first petition was filed. The state did not challenge any of Passman's factual allegations concerning why the Doyle or Helm claims [463 U.S. 277, 103 S.Ct. 3001, 77 L.Ed.2d 637] were not raised in the first petition. Therefore, the district judge properly did not hold an evidentiary hearing on Passman's factual assertions; none was required where there were no contested issues of fact.4 The issue we face is whether the state was entitled to judgment as a matter of law on this factual record.\n\n\n18\nThe following must be taken as true for the purposes of this proceeding. Passman was subjectively unaware of the Doyle and Helm claims at the time he filed his first state and first federal petitions. He first learned of the possibility of a Doyle claim while reading a law review article in 1982 after his first federal petition had been dismissed, and of the sentencing claim in 1982 while reading a Fifth Circuit opinion. The first and second federal petitions were prepared without the assistance of counsel. Passman did not have direct or indirect access to a law library for a lengthy period during which the first petition was prepared. The availability of books was limited. There is no evidence concerning Passman's education and whether he has any legal training. There is an utter absence of evidence that Passman filed this second petition for the purpose of delay or to vex or harass the state. Passman's first petition does evince above-average--for pro se petitioners--skill in legal research and writing. Further, Passman would not have immediately noticed the Doyle issue upon reading the trial transcript, because his counsel did not object to the prosecutor's questioning regarding Passman's post-arrest silence. Cf. Hamilton v. McCotter, 772 F.2d 171, 180 (5th Cir.1985) (error \"appearing on the face of\" trial record should have been raised).\n\nB.\n\n19\nWe turn to the issue of whether, on this factual record, Passman has proved by a preponderance of the evidence that he did not abuse the writ. Rule 9(b) provides in pertinent part:\n\n\n20\nA second or successive petition may be dismissed if the judge finds that it fails to allege new or different grounds for relief and the prior determination was on the merits or, if new and different grounds are alleged, the judge finds that the failure of the petitioner to assert those grounds in a prior petition constituted an abuse of the writ.\n\n\n21\nIt seems clear, despite the state's assertion to the contrary in the district court, that the first clause of Rule 9(b) is entirely inapplicable to this petition. The plain fact is that the Doyle and sentencing claims were not included in the first petition. Therefore, we turn to the second clause of Rule 9(b), and whether Passman's actions constitute an \"abuse of the writ.\"\n\n\n22\nThe salutary purpose of the abuse of the writ doctrine of Rule 9(b) \"is to avoid piecemeal litigation, with petitioners advancing one claim at a time.\" Rudolph v. Blackburn, 750 F.2d 302, 305 (5th Cir.1984). However, \"[w]hile the doctrine of successive petitions certainly has a place to prevent abuse of the remedy, it ought not to be used as a subterfuge or obstacle to prevent a petitioner from getting the merits of his contentions before the court.\" R. Sokol, Federal Habeas Corpus at 192-93 (1969); see generally Williamson, Federal Habeas Corpus: Limitations on Successive Applications From the Same Prisoner, 15 Wm. & Mary L.Rev. 265 (1973).\n\n\n23\nRule 9(b) does not define the phrase \"abuse of the writ.\" However, the legislative history of Rule 9(b) indicates that Congress intended to codify the principles governing abuse of the writ set forth in the leading case of Sanders v. United States, 373 U.S. 1, 83 S.Ct. 1068, 10 L.Ed.2d 148 (1963):\n\n\n24\nAs the Supreme Court has noted in reference to successive applications for habeas corpus relief and successive Sec. 2255 motions based upon a new ground or a ground not previously decided on the merits, \"full consideration of the merits of the new application can be avoided only if there has been an abuse of the writ or motion remedy; and this the Government has the burden of pleading.\" Sanders v. United States, 373 U.S. 1, 17, 83 S.Ct. 1068, 1078, 10 L.Ed.2d 148 (1963). See also 28 United States Code, section 2244(b).\n\n\n25\nH.R.Rep. No. 1471, 94th Cong. 2d Sess. 5-6, reprinted in 1976 U.S. Code Cong. & Ad. News 2478, 2482. See Clinton, Rule 9 of the Federal Habeas Corpus Rules, 63 Iowa L.Rev. 15, 30-31, 38 (1977). Thus, we must examine Sanders to determine what constitutes an abuse of the writ. See Rose v. Lundy, 455 U.S. 509, 521, 102 S.Ct. 1198, 1204, 71 L.Ed.2d 379 (1982) (plurality opinion of O'Connor, J.) (Rule 9(b) \"incorporates the judge-made principle governing the abuse of the writ set forth in Sanders\"); id. 455 U.S. at 534-35, 102 S.Ct. at 1211-12 (Brennan, J., concurring in part and dissenting in part) (interpretation of Rule 9(b) \"necessarily entails an accurate interpretation of the Sanders standard\"). See also Jones v. Estelle, 722 F.2d 159, 163 (5th Cir.1983) (en banc) (\"Rule 9(b) largely codified the principles enunciated in Sanders\"), cert. denied, 466 U.S. 976, 104 S.Ct. 2356, 80 L.Ed.2d 829 (1984); L. Yackle, Postconviction Remedies Sec. 154, at 563 (1981).5\n\n\n26\nThe Court in Sanders discussed the abuse of the writ doctrine as follows:\n\n\n27\nif a prisoner deliberately withholds one of two grounds for federal collateral relief at the time of filing his first application, in the hope of being granted two hearings rather than one or for some other such reason, he may be deemed to have waived his right to a hearing on a second application presenting the withheld ground.... Nothing in the traditions of habeas corpus requires the federal courts to tolerate needless piecemeal litigation, or to entertain collateral proceedings whose only purpose is to vex, harass, or delay.\n\n\n28\n373 U.S. at 18, 83 S.Ct. at 1078 (quoted in Jones, 722 F.2d at 163). As we stated in Jones, \"Sanders relied on Fay v. Noia, 372 U.S. 391, 83 S.Ct. 822, 9 L.Ed.2d 837 (1963), and Townsend v. Sain, 372 U.S. 293, 83 S.Ct. 745, 9 L.Ed.2d 770 (1963), to indicate the limits of the writ abuse doctrine.\" 722 F.2d at 163. Noia held that \"a petitioner loses the right to have a claim considered on a successive petition if he 'understandingly and knowingly forewent the privilege' of raising that claim in his initial petition. The bar 'depends on the considered choice of the petitioner.' \" Id. (quoting Noia, 372 U.S. at 439, 83 S.Ct. at 849).6\n\n\n29\nA petitioner, even one proceeding pro se, who has actual knowledge of facts or legal theories that might be raised in a petition when the first petition is filed will in general be barred from raising those claims in a successive petition. Jones, 722 F.2d at 163; Autry v. Estelle, 719 F.2d 1247, 1250 (5th Cir.1983) (pro se petitioner \"aware\" of claim but chose to withhold it). The district court did not find that Passman had actual knowledge of the Doyle or Helm claims in 1979. It essentially concluded that Passman had constructive knowledge of the claims at that time--as a \"skilled writ-writer\" he should have known about them--thus the claims' consideration was barred in the second petition. Therefore, this case presents the question reserved in Jones, 722 F.2d at 163 n. 3, of \"whether the knowledge of a pro se petitioner is judged by an actual knowledge standard or by a constructive knowledge--such as a reasonable man--standard.\"7 Id.; see also Daniels v. Blackburn, 763 F.2d 705, 707 (5th Cir.1985).8\n\n\n30\nIn light of Sanders, there is no room in habeas corpus adjudications for an analysis that allows application of the abuse of the writ doctrine to a pro se petitioner who did not subjectively know about a particular legal claim set forth in a successive petition when an earlier petition was filed. A pro se petitioner must, at the least, knowingly withhold a claim in order for the abuse of the writ doctrine to apply. Sanders, 373 U.S. at 18, 83 S.Ct. at 1078; Noia, 372 U.S. at 438-39, 83 S.Ct. at 848 49. The withholding must be a matter of the \"considered choice of the petitioner.\" Noia, 372 U.S. at 439, 83 S.Ct. at 849; see Jones, 722 F.2d at 163, 166 n. 7 (Noia \"defined waiver in terms of an understanding and knowing decision by an individual to forego a claim\"). As the Fourth Circuit stated in Miller v. Bordenkircher, 764 F.2d 245 (4th Cir.1985), to apply the abuse of the writ doctrine there must be \" 'more than simply a failure to present a ground existing at the time of the previous petition.' \" Id. at 251 (quoting Johnson v. Copinger, 420 F.2d 395, 399 (4th Cir.1969)).9 \"As a minimum, the newly asserted ground must have been known to the petitioner at the time of the earlier petition.\" Johnson, 420 F.2d at 399.\n\n\n31\nIn short, the controlling cases give no succor to the argument that a pro se petitioner abuses the writ when he does not knowingly withhold a particular claim because he does not actually understand that the claim may be made, even though a \"reasonable\" pro se petitioner might have known of the claim.10 As the Court stated in Price v. Johnston, 334 U.S. 266, 291-92, 68 S.Ct. 1049, 1062-63, 92 L.Ed. 1356 (1948), an abuse of the writ case in which the Court reversed dismissal of the petitioner's fourth federal petition, \"we cannot impose on [pro se petitioners] the same high standards of the legal art which we might place on members of the legal profession,\" and which we placed on counsel in Jones. Pursuant to Sanders and Noia, we hold that the knowledge of facts and legal claims by a pro se petitioner is judged by an actual knowledge standard for purposes of application of the abuse of the writ doctrine.11 On this record Passman has introduced ample evidence that he did not know about the Doyle and sentencing claims when he filed his first federal petition, the state has offered no evidence whatever to the contrary, and the evidence that Passman is a \"skillful writ-writer\" standing alone is insufficient evidence from which to infer that he knew about the claims in 1979. He has proved by a preponderance of the evidence12 that he did not abuse the writ; therefore, the district court abused its discretion in applying Rule 9(b). We turn to the merits of the Doyle and sentencing claims.\n\nIII.\nA.\n\n32\nPassman testified on his own behalf at the trial. He denied any involvement in the robbery, and offered as an exculpatory story, backed by other witnesses including his wife, that he was in Mississippi visiting relatives named Burris on the date of the crime, and had returned to his house in Louisiana at 8:00 p.m., about 1 1/2 hours before the robbery. He stated that his mother-in-law, a Mrs. Matthews, drove him to his home in Louisiana from Mississippi, and left to return to Mississippi at 8:30 p.m. Passman testified that after his mother-in-law left to return to Mississippi, he did not leave the house. The robbery began at about 9:30 p.m., in a town twenty-five miles from Passman's home. See Passman, 652 F.2d at 563-64. Passman was arrested at his home at 10:15 p.m., twenty-three minutes after police were notified of the robbery by its victims. Id. at 564.13\n\n\n33\nThe prosecutor did not cross-examine Passman. The defense rested after Passman's direct testimony, and the state immediately thereafter called as a rebuttal witness Wallace Laird, chief deputy of the sheriff's department and the supervisor of the investigation of the robbery. The state examined Chief Laird as follows:\n\n\n34\nQ Chief Laird, did Glenn Passman ever tell you where he was that day?\n\n\n35\nA Did Glenn Passman ever tell me?\n\n\n36\nQ Yes, sir.\n\n\n37\nA No, sir, he did not.\n\n\n38\nQ Did he ever mention the names Mr. and Mrs. Burris to you?\n\n\n39\nA Not to me.\n\n\n40\nQ Did he ever mention the name of Mrs. Matthews, who is his mother-in-law to you?\n\n\n41\nA No, sir.\n\n\n42\nQ Did he ever tell you, to your knowledge, that he was with those people that weekend?\n\n\n43\nA No, sir.\n\n\n44\n* * *\n\n\n45\n* * *\n\n\n46\nQ During the almost two years since this happened, Chief Laird, has anybody, either Glenn Passman, his wife, Mrs. Matthews, Mr. or Mrs. Burris or anybody ever told you that Mrs. Matthews was with Glenn Passman and them until 8:30 that night?\n\nA No, sir, not to my knowledge.14\n\n47\nTrial Tr. vol. 5, at 602-03. Further, during closing argument the prosecutor made the following comment:\n\n\n48\nLet's get on Glenn Passman's witnesses, which if you noticed, he made no comments about those two upstanding people from Mississippi who testified....\n\n\n49\nId. at 683. Passman contends that Chief Laird's testimony and the prosecutor's closing argument violated his due process rights.\n\nB.\n\n50\nIn Doyle v. Ohio, 426 U.S. 610, 617-18, 96 S.Ct. 2240, 2244-45, 49 L.Ed.2d 91 (1976), the Court held that cross-examination of a defendant concerning his post-arrest silence, offered to impeach the defendant on the theory that silence is inconsistent with an exculpatory story told at trial, deprived the defendant of the fundamental fairness guaranteed by the due process clause. See also Wainright v. Greenfield, --- U.S. ----, 106 S.Ct. 634, 638, 88 L.Ed.2d 623 (1986); United States v. Shavers, 615 F.2d 266, 269 (5th Cir.1980) (post-arrest silence may not be used as evidence of guilt or for impeachment purposes); United States v. Mireles, 570 F.2d 1287, 1292 (5th Cir.1978). The Doyle rule \"is bottomed on the insoluble ambiguity of post-arrest silence that necessarily results when a defendant has been read his Miranda rights; the defendant's silence may well indicate, not that he has no exculpatory story to tell, but that he is simply exercising the rights to which he has been advised.\" United States v. Blankenship, 746 F.2d 233, 237 (5th Cir.1984); see Stokes v. Procunier, 744 F.2d 475, 479 (5th Cir.1984). On the other hand, a testifying defendant may be impeached with evidence of pre-arrest, pre-Miranda warning silence, because \"no governmental action [has] induced [the defendant] to remain silent.\" Jenkins v. Anderson, 447 U.S. 231, 240, 100 S.Ct. 2124, 2130, 65 L.Ed.2d 86 (1980). Doyle is applicable to this case, because Passman's case was pending in the trial court (he had not yet been sentenced) at the time Doyle was decided. Price v. King, 714 F.2d 585, 588 (5th Cir.1983).\n\n\n51\nAs a threshold matter, we review the state's contention that Doyle is inapplicable because Chief Laird's testimony may have concerned Passman's pre-arrest silence. See Jenkins, 447 U.S. at 240, 100 S.Ct. at 2130. The state asserts that Passman's first contact with the police, at 10:15 p.m. on the day of the robbery, when he was handcuffed, given Miranda warnings, and placed in a police car to go to the police station, did not amount to an arrest. Therefore, the state argues, Chief Laird's testimony may have concerned Passman's silence at that point in time, before Passman was arrested. However, the actions of the police at 10:15 p.m. unquestionably amounted to an arrest, Passman, 652 F.2d at 564, and, in any event, Passman's silence was admittedly post-Miranda warnings. Neither Chief Laird nor any other officer had any contact with Passman in the time period between Passman's return from Mississippi at 8:00 p.m. until Passman's arrest, a fact which was made clear to the jury during the state's case-in-chief when Chief Laird and other officers testified as to the circumstances under which they first encountered Passman. There simply were no pre-arrest confrontations with Passman. Therefore, we reject the state's contention that Chief Laird's testimony was not a reference to post-arrest silence.15\n\n\n52\nAs to the merits of the Doyle claim, there are two \"alternative tests for determining whether a prosecutor's or witness' remarks constitute comment on a defendant's silence.\" United States v. Shaw, 701 F.2d 367, 381 (5th Cir.1983), cert. denied, 465 U.S. 1067, 104 S.Ct. 1419, 79 L.Ed.2d 744 (1984). These are (1) \"whether the 'manifest intent' was to comment on the defendant's silence,\" or (2) \"whether the character of the remark was such that the jury would 'naturally and necessarily' construe it as a comment on the defendant's silence.\" Id. \"Both the intent of the prosecutor and the character of the remarks are determined by reviewing the context in which they occur.\" Id.\n\n\n53\nIn the case sub judice, it seems clear that not only did the prosecutor intend to comment on Passman's silence, but a jury would naturally and necessarily construe that to be the case. \"The standard is strict; virtually any description of a defendant's silence following arrest and a Miranda warning will constitute a Doyle violation.\" Shaw, 701 F.2d at 382. To be sure, the jury could conceivably have believed that Passman returned from Mississippi at 8:00 p.m. and nevertheless committed the robbery. However, the story, if believed, would have made it somewhat less likely that Passman committed the robbery, because he would have had little time to meet his confederate and travel to the site of the robbery. Further, and more important, Passman testified that he did not commit the crime. Passman's credibility thus was an issue in the trial. The conclusion is inescapable that Chief Laird's testimony and the prosecutor's argument were designed and would be understood to be a comment on Passman's failure to provide the story offered at trial after his arrest, and to be a general attack on Passman's credibility. Our conclusion on this point is further compelled by the timing of Chief Laird's testimony, immediately following Passman's direct examination. In short, the prosecutor carefully contrived to introduce evidence of Passman's silence, which could have gone to the implausibility of Passman's arguably exculpatory story as well as to his credibility, only a matter of minutes after Passman had offered the story and denied committing the crime. This plainly offends the principles enunciated in Doyle.\n\nC.\n\n54\nOur inquiry does not end here, however. A Doyle violation may constitute harmless error. Shaw, 701 F.2d at 382. The general harmless error test is set forth in Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967), which requires \"the beneficiary of the constitutional error to prove beyond a reasonable doubt that the error complained of did not contribute to the verdict obtained\" in order for error to be harmless. Id. 386 U.S. at 24, 87 S.Ct. at 828. As stated in Fahy v. Connecticut, 375 U.S. 85, 86-87, 84 S.Ct. 229, 230-31, 11 L.Ed.2d 171 (1963), the issue is not \"whether there was sufficient evidence on which the petitioner could have been convicted without the evidence complained of.\" Rather, the \"question is whether there is a reasonable possibility that the evidence complained of might have contributed to the conviction.\" Id. See United States ex rel. Miller v. Greer, 789 F.2d 438, 443 (7th Cir.1986) (en banc) (\"harmless beyond a reasonable doubt\" is appropriate standard to apply in collateral proceedings challenging Doyle violation); see also Alston v. Garrison, 720 F.2d 812, 817 (4th Cir.1983) (\"because the nature of a Doyle error is so egregious and so inherently prejudicial, reversal is the norm rather than the exception\"), cert. denied, 468 U.S. 1219, 104 S.Ct. 3589, 82 L.Ed.2d 886 (1984); United States v. Edwards, 576 F.2d 1152, 1155 (5th Cir.1978) (circumstances under which comment upon silence of defendant will not result in reversal \"are few and discrete\"). See generally Rose v. Clark, --- U.S. ----, 106 S.Ct. 3101, 92 L.Ed.2d 460 (1986).\n\n\n55\nIn Chapman v. United States, 547 F.2d 1240 (5th Cir.), cert. denied, 431 U.S. 908, 97 S.Ct. 1705, 52 L.Ed.2d 393 (1977), we described three general types of Doyle violations in an attempt to weigh the effects of a Doyle error:\n\n\n56\nWhen the prosecution uses defendant's post arrest silence to impeach an exculpatory story offered by defendant at trial and the prosecution directly links the implausibility of the exculpatory story to the defendant's ostensibly inconsistent act of remaining silent, reversible error results even if the story is transparently frivolous.\n\n\n57\nWhen the prosecutor does not directly tie the fact of defendant's silence to his exculpatory story, i.e., when the prosecutor elicits that fact on direct examination and refrains from commenting on it or adverting to it again, and the jury is never told that such silence can be used for impeachment purposes, reversible error results if the exculpatory story is not totally implausible or the indicia of guilt not overwhelming.\n\n\n58\nWhen there is but a single reference at trial to the fact of defendant's silence, the reference is neither repeated nor linked with defendant's exculpatory story, and the exculpatory story is transparently frivolous and evidence of guilt is otherwise overwhelming, the reference to defendant's silence constitutes harmless error.\n\n\n59\nId. at 1249. We have recognized, however, that not all cases fit neatly into these categories. See, e.g., Alderman v. Austin, 695 F.2d 124, 126 n. 7 (5th Cir. Unit B 1983) (en banc) (Chapman categories not to be used as \"rigid rules\"); United States v. Shavers, 615 F.2d at 270; cf. United States v. Ylda, 643 F.2d 348, 350 (5th Cir.1981) (Chapman not applied where prosecution did not actually evoke testimony regarding defendant's silence, but only asked improper question).\n\n\n60\nThis case does not seem to fall squarely into any of the categories of cases discussed in Chapman v. United States. The prosecutor, through a direct examination of Chief Laird, directly linked Passman's post-arrest failure to provide the story about the trip to Mississippi to the police with the plausibility of that story at trial. But the plausibility of that story, the story challenged, was hardly of central relevance to the defense. It provided only marginal evidence that Passman could not practicably have been involved in the robbery. It was not truly an exculpatory story, because Passman could have returned from Mississippi at 8:00 p.m., waited until his mother-in-law left at 8:30, and still have committed the robbery at 9:30. Rather, the heart of the defense was Passman's subsequent testimony that he did not take part in the robbery and that he was at home with his wife when the robbery occurred. It is only when Doyle errors go to the heart of the defense that the first category of Chapman is implicated. The prosecutor simply did not ask Chief Laird whether Passman had denied taking part in the robbery after arrest; therefore, the first Chapman category does not apply. Compare United States v. Harp, 536 F.2d 601, 603 (5th Cir.1976); United States v. Smith, 635 F.2d 411, 413 (5th Cir.1981); United States v. Johnson, 558 F.2d 1225, 1230 (5th Cir.1977).16\n\n\n61\nHowever, Passman's general credibility was undoubtedly called into question by Chief Laird's testimony, even though Chief Laird's testimony did not directly attack Passman's exculpatory story. If the jury believed that Passman fabricated his story about going to Mississippi, it could have inferred that Passman's statement concerning his involvement in the robbery likewise was fabricated. Therefore, the issue before us is whether there is a reasonable possibility that the prosecutor's attack on Passman's general credibility through evidence admitted in violation of Doyle might have contributed to the guilty verdict.\n\n\n62\nWe are guided by language in the Supreme Court's recent opinions in Rose v. Clark, --- U.S. ----, 106 S.Ct. 3101, 92 L.Ed.2d 460 (1986), and United States v. Hasting, 461 U.S. 499, 103 S.Ct. 1974, 76 L.Ed.2d 96 (1983). In Clark, the Court held that a harmless error analysis could be applied in a case involving a jury instruction unconstitutional under the principles set forth in Sandstrom v. Montana, 442 U.S. 510, 99 S.Ct. 2450, 61 L.Ed.2d 39 (1979). The Court stated that \"while there are some errors to which Chapman [v. California] [, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705] does not apply, they are the exception and not the rule.\" 106 S.Ct. at 3106. The Court continued:\n\n\n63\n[I]f the defendant had counsel and was tried by an impartial adjudicator, there is a strong presumption that any other errors that may have occurred are subject to harmless error analysis. The thrust of the many constitutional rules governing the conduct of criminal trials is to ensure that those trials lead to fair and correct judgments. Where a reviewing court can find that the record developed at trial establishes guilt beyond a reasonable doubt, the interest in fairness has been satisfied and the judgment should be affirmed. As we have repeatedly stated, \"the Constitution entitles a criminal defendant to a fair trial, not a perfect one.\"\n\n\n64\nId. at 3106-07.\n\n\n65\nThe Court in Clark relied in part on its earlier decision in Hasting, which considered a violation of the fifth amendment when a prosecutor referred in closing argument to the failure of the defense to introduce evidence on a particular point, a violation quite similar to that in the case sub judice. The Court of Appeals reversed the conviction without examining the evidence of the defendants' guilt. The Supreme Court reversed:\n\n\n66\nSince Chapman [v. California] [, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705] the Court has consistently made clear that it is the duty of a reviewing court to consider the trial record as a whole and to ignore errors that are harmless, including most constitutional errors.\n\n\n67\nId. 461 U.S. at 509, 103 S.Ct. at 1980 (emphasis added). The Court summarized the nature of a reviewing court's function:\n\n\n68\nThe question a reviewing court must ask is this: absent the prosecutor's allusion to the failure of the defense to proffer evidence to rebut the testimony of the victims, is it clear beyond a reasonable doubt that the jury would have returned a verdict of guilty?\n\n\n69\nId. at 510-11, 103 S.Ct. at 1981-82. The Court proceeded to examine the \"whole record.\"17\n\n\n70\nThere can be no doubt that Passman's credibility was an important part of this case, as it is in any case in which the defendant testifies under oath that he did not commit the crime, contradicting prosecution witnesses. If the jury believed Passman rather than the three victims who identified him, then the guilty verdict would not have been returned. But, as noted above, this is not a case in which the prosecution directly challenged through evidence that violates Doyle a truly exculpatory story offered by a defendant for the first time at trial. Compare Harp, 536 F.2d at 603; Price, 714 F.2d at 588. Here, unlike Price, the prosecutor did not \"directly link\" the implausibility of Passman's exculpatory story--that he was at home while the robbery was committed--to his ostensibly inconsistent post-arrest silence. Id. (emphasis added). Rather, that exculpatory story was only indirectly attacked by Chief Laird's testimony, a fact which makes it less likely that the jury would have concentrated on the testimony or found it of substantial importance. Further, and very importantly, this is not a case which essentially comes down \"to a one-on-one situation, i.e., the word of the defendant against the word of the key prosecution witness, and there is no corroboration on either side,\" as in Velarde v. Shulsen, 757 F.2d 1093, 1095 (10th Cir.1985). In that situation, \"the importance of the defendant's credibility becomes so significant that prosecutorial error attacking that credibility cannot be considered harmless beyond a reasonable doubt.\" Id.18 Here, however, there was a greater opportunity for assessment of the witness' credibility. The three victims--not just one--testified unequivocally that Passman was the individual who robbed them in their home. Their testimony was not shaken despite vigorous and spirited cross-examination by Passman's counsel. The victims had a lengthy period of time to observe the robbers, perhaps up to twenty minutes in a fully lighted house. Further, Passman's testimony concerning the events of the evening in question was, in large part, corroborated by the testimony of his wife, and, to a lesser extent, his mother-in-law. The jury was required to reject the credibility of Passman's wife as well as of Passman to return a guilty verdict, and her credibility was unaffected by Chief Laird's testimony.\n\n\n71\nFurther, and significantly, the testimony of Passman's wife was inconsistent with Passman's story in one crucial aspect. Passman testified that upon returning to Louisiana from Mississippi, he, his wife, and his mother-in-law stopped at several convenience stores in order to find a newspaper. Passman testified that he was unemployed, and wanted a newspaper to look for a job in New Orleans; he assertedly intended to go to New Orleans to apply for jobs on the day after the robbery. Passman testified that they \"never did find\" a paper, Trial Tr. at 599. Passman's wife, on the other hand, testified that when Passman was arrested, he was lying in bed reading a newspaper. Trial Tr. at 587. Although Passman's wife did not state that the newspaper that Passman was reading had been bought earlier that day, which would have directly conflicted with Passman's testimony, such an inference would have been entirely reasonable in light of Passman's asserted absence from his house for several days.\n\n\n72\nFinally, the victims told police that one robber was wearing a bandanna around his head at the time of the robbery. The arresting officer testified that when he effected the arrest, Passman had a mark on his forehead and his hair was pressed down, as if he had recently worn a bandanna.\n\n\n73\nThe question is close, largely because of the timing of the improper testimony. But the testimony was not dwelled on in closing arguments, nor did the trial court instruct the jury that silence could be used as impeachment. Even taking into account the inherent problems of eyewitness identification, see Manson v. Brathwaite, 432 U.S. 98, 112, 97 S.Ct. 2243, 2251, 53 L.Ed.2d 140 (1977), the three victims testified forcefully as to the certainty of the identification. Under the circumstances of this trial, Passman's credibility was in all probability damaged more severely by the apparent inconsistency of his and his wife's stories on a point of crucial significance, than by the prosecutor's indirect challenge to that credibility by a questioning of the veracity of Passman's testimony concerning the essentially irrelevant trip to Mississippi. That questioning, although ill-advised, added little to the prosecution's case. After an examination of the entire trial record, we conclude that if the improper testimony had not been admitted, it is clear beyond reasonable doubt that the jury would have returned a verdict of guilty.\n\nIV.\n\n74\nFinally, we turn to Passman's claim that his sentence violates the eighth amendment. As he notes, \"Solem v. Helm, [463 U.S. 277, 103 S.Ct. 3001, 77 L.Ed.2d 637 (1983) ], is relied upon almost entirely for the relief sought ...\" Under Helm:\n\n\n75\n[A] court's proportionality analysis under the Eighth Amendment should be guided by objective criteria, including (i) the gravity of the offense and the harshness of the penalty; (ii) the sentences imposed on other criminals in the same jurisdiction; and (iii) the sentences imposed for commission of the same crime in other jurisdictions.\n\n\n76\nId. 463 U.S. at 292, 103 S.Ct. at 3010. However, \"[i]n view of the substantial deference that must be accorded legislatures and sentencing courts, a reviewing court rarely will be required to engage in extended analysis to determine that a sentence is not constitutionally disproportionate.\" Id. at 290 n. 16, 103 S.Ct. at 3009 n. 16. See United States v. Lamp, 779 F.2d 1088, 1098 (5th Cir.1986).\n\n\n77\nPassman's sentence was harsh, particularly for a first-time felony offender. The unavailability of parole within a reasonable time also seems to favor Passman's argument that his sentence is unconstitutionally severe. Cf. Moreno v. Estelle, 717 F.2d 171, 180 (5th Cir.1983). But as to the gravity of the offense, the crime of armed robbery is in general a very serious felony. Further, examining the specific circumstances of this offense, cf. Enmund v. Florida, 458 U.S. 782, 797-801, 102 S.Ct. 3368, 3376-79, 73 L.Ed.2d 1140 (1982), we can state unequivocally that they militate in favor of a severe sentence; this armed robbery was particularly serious. The victims were robbed in their home. One victim, a 78-year-old man, was shot and seriously wounded. Another victim, a 16-year-old girl, testified that Passman sexually abused her. The victims had guns placed to their heads and were repeatedly threatened with death.\n\n\n78\nSecond, we should compare the sentence Passman received with those received by other criminals in Louisiana. \"If more serious crimes are subject to the same penalty, or to less serious penalties, that is some indication that the punishment at issue may be excessive.\" Helm, 463 U.S. at 291, 103 S.Ct. at 3010. Among the crimes punishable by imprisonment for up to 99 years, without parole, or for life without parole, in Louisiana are: first degree murder, La.Rev.Stat.Ann. Sec. 14:30(C); aggravated rape, id. Sec. 14:42(C); aggravated kidnapping, id. Sec. 14:44; and armed robbery, id. Sec. 14:64(B). We cannot conclude that the crimes of aggravated rape and aggravated kidnapping are more serious from a societal viewpoint than armed robbery. Rather, these crimes are all extremely serious, and they carry essentially identical serious penalties. Taking into account the \"absolute magnitude\" of the crime of armed robbery, Helm, 463 U.S. at 293, 103 S.Ct. at 3011, a 99-year sentence without possibility of parole is not necessarily constitutionally inappropriate.19\n\n\n79\nFinally, Passman makes no argument that the punishment assessed in his case is disproportionate to the punishment given armed robbers in other jurisdictions.\n\n\n80\nUnder these circumstances, we conclude that Passman's sentence is proportionate to the crime for which he was convicted, and does not violate the eighth amendment, under the principles set forth in Solem v. Helm.\n\nV.\n\n81\nFor the foregoing reasons, the judgment of the district court is affirmed.\n\n\n82\nAFFIRMED.\n\n\n\n1\n Our precedents allow the district court to raise sua sponte the issue of abuse of the writ under Rule 9(b). Daniels v. Blackburn, 763 F.2d 705, 707 (5th Cir.1985)\n\n\n2\n The third and fourth claims in Passman's second petition relating to the sufficiency of the evidence are not mentioned in his brief on appeal; therefore, we consider those claims abandoned\n\n\n3\n This claim, which appears patently frivolous, see State ex. rel. Passman v. Maggio, 457 So.2d 2 (La.1984), has not been briefed on appeal; therefore, we consider it waived\n\n\n4\n See Jones v. Estelle, 722 F.2d 159, 164 (5th Cir.1983) (en banc) (successive petition may be dismissed without hearing if petitioner could not justify successive petition \"as a matter of law\"), cert. denied, 466 U.S. 976, 104 S.Ct. 2356, 80 L.Ed.2d 829 (1984). We have previously noted, in the context of Rule 9(a), that the standards of Fed.R.Civ.P. 56(c) concerning standards for summary judgment govern whether a Rule 9(a) dismissal may be effected summarily, without a hearing. McDonnell v. Estelle, 666 F.2d 246, 252 (5th Cir.1982); see Habeas Rule 11, Fed.R.Civ.P. 81(a)(2); see also Soileau v. Blackburn, 789 F.2d 1209, 1210 (5th Cir.1986). Consideration of whether dismissal under Rule 9(b) is appropriate, like that under Rule 9(a), is \"necessarily fact oriented.\" Urdy v. McCotter, 773 F.2d 652, 656 (5th Cir.1985). Therefore, it seems sensible, as we did in Jones v. Estelle, 692 F.2d 380, 384-85 (5th Cir.1982), to apply the standards of Rule 56 to this Rule 9(b) issue. Accordingly, in order for a dismissal under Rule 9(b) to be appropriate without an evidentiary hearing, there must be no genuine issue of material fact, and the dismissal must be appropriate as a matter of law. Id.; see Price v. Johnston, 334 U.S. 266, 292, 68 S.Ct. 1049, 1063, 92 L.Ed. 1356 (1948)\n\n\n5\n We noted in Jones that perhaps not all the principles set forth in Sanders were codified in Rule 9(b). 722 F.2d at 167 n. 7. For example, although Sanders could arguably be read to require personal waiver of federal rights by a petitioner, Sanders was not so read by the Supreme Court at the time Rule 9(b) was codified. See id. (citing Henry v. Mississippi, 379 U.S. 443, 85 S.Ct. 564, 13 L.Ed.2d 408 (1965)). The discrete issue before us, however, is the state of a pro se petitioner's knowledge of claims for purposes of application of the abuse of the writ doctrine. The principles of Sanders that govern that issue do not appear to have been altered by the Supreme Court in the intervening years before Rule 9(b) was codified\n\n\n6\n See also 28 U.S.C. Sec. 2244(b); Wong Doo v. United States, 265 U.S. 239, 241, 44 S.Ct. 524, 525, 68 L.Ed. 999 (1924)\n\n\n7\n In Jones, we decided that a prisoner's actual knowledge of claims that he failed to assert in one petition was irrelevant when the petitioner was represented by competent counsel in preparing that petition. 722 F.2d at 169. In such cases, a petitioner \"is chargeable with that awareness that a competent lawyer would have possessed.\" Id\n\n\n8\n The state contends in passing that the lapse of time between the conviction and this appeal should bar consideration of the petition, citing to the Chief Justice's written statement regarding a denial of certiorari in Spalding v. Aiken, 460 U.S. 1093, 103 S.Ct. 1795, 76 L.Ed.2d 361 (1983). Suffice it to say that delay is a matter to be considered under Rule 9(a), not Rule 9(b), and then only on the question of whether the state \"has been prejudiced in its ability to respond to the petition by delay in its filing.\" Vasquez v. Hillery, --- U.S. ----, 106 S.Ct. 617, 624, 88 L.Ed.2d 598 (1986). It is no defense to a habeas corpus petition that the state may be unable to retry the petitioner. Id. In any event, the state does not claim that it will be unable to retry Passman, and it has not asserted that it was unable to respond to the allegations of the petition. At no time has the state suggested that Rule 9(a) is applicable to this case. As the state has chosen to frame the issues in this matter, the delay between the conviction and this petition is irrelevant\n\n\n9\n In Hamilton v. McCotter, 772 F.2d 171 (5th Cir.1985), a case concerning waiver by a petitioner represented by counsel, the court stated that \"[w]e have said that the appropriate standard against which to determine abuse of the writ is not whether a successive petitioner intended to bypass an issue at the time of the previous petition, but 'whether he withheld it without legal excuse when he filed his earlier petition.' \" Id. at 176 (quoting Jones, 722 F.2d at 163). In the case sub judice, the issue is whether the lack of subjective knowledge of a claim constitutes legal excuse\n\n\n10\n See Booker v. Wainright, 764 F.2d 1371, 1376 (11th Cir.1985) (\"petitioner may avoid dismissal if he proves by a preponderance of the evidence that he was ignorant of the facts necessary to support the new ground when he filed his prior habeas petition\"), cert. denied, --- U.S. ----, 106 S.Ct. 339, 88 L.Ed.2d 324 (1985); Burnside v. White, 760 F.2d 217, 219-20 (8th Cir.) (Rule 9(b) dismissal inappropriate absent allegation that petitioner \"deliberately failed\" to raise new claim in earlier petition), cert. denied, --- U.S. ----, 106 S.Ct. 576, 88 L.Ed.2d 559 (1986); L. Yackle, supra, at Sec. 155; cf. Hamilton, 772 F.2d at 179 (\"pro se petitioner's ignorance of the legal significance of facts known to him at the time of the earlier petition might provide an excuse for failure to raise those issues in the prior proceeding\"); Jones, 722 F.2d at 165; Vaughan v. Estelle, 671 F.2d 152, 153 & n. 5 (5th Cir.1982)\nA leading commentator has stated that the Supreme Court has \"come ever so close\" to changing the law in this area, replacing Sanders with the standard for default set forth in Wainright v. Sykes, 433 U.S. 72, 97 S.Ct. 2497, 53 L.Ed.2d 594 (1977), which addresses the effect of a petitioner's procedural default in state court. L. Yackle, supra, Sec. 155, at 563 n. 33 (Supp.1986). Indeed, in recent capital cases, a majority of the Court has not expressly applied Sanders when ruling on successive petitions, although those decisions do seem to be consistent with the principles set forth in Sanders. In Woodard v. Hutchins, 464 U.S. 377, 104 S.Ct. 752, 78 L.Ed.2d 541 (1984) (per curiam), the Court vacated a stay of execution. Justice Powell, joined by four other justices, stated in a concurring opinion that the new claims were \"a clear example of the abuse of the writ ... [because] [a]ll three of [petitioner's] claims could and should have been raised in his first petition for habeas corpus.\" Id. 464 U.S. at 379, 104 S.Ct. at 753. Justice Powell stated that there was \"no explanation as to why they were not all raised in one petition.\" Id. Although that fact alone differentiates Hutchins from the case sub judice, it is clear that a substantial ground for Justice Powell's opinion was the fact that Hutchins was on death row:\nA pattern seems to be developing in capital cases of multiple review in which claims that could have been presented years ago are brought forward--often in a piecemeal fashion--only after the execution date is set or becomes imminent.\nId. 464 U.S. at 380, 104 S.Ct. at 753. Accordingly, it seems clear that the concurrence in Hutchins is consistent with Sanders, which held that a successive petition may be dismissed if it is filed for the purpose of delay. A capital sentence may not be carried out, of course, if a judge grants a stay of execution while considering a habeas corpus petition, whether it be a prisoner's first or his fiftieth petition. Therefore, a successive petition clearly could be filed simply to delay implementation of the state's sentence in a capital case. Delay alone in a non-capital case, on the other hand, is less problematic, so far as the state is concerned. The state's sentence has been executed and the prisoner is incarcerated at the time each habeas petition is filed, although even in a non-capital case the state has an interest in avoiding repeated defenses of the same conviction.\nIn Antone v. Dugger, 465 U.S. 200, 104 S.Ct. 962, 79 L.Ed.2d 147 (1984), the Court denied a stay of execution to a petitioner with a successive petition. The claims raised in the second federal petition had been raised in the prisoner's first state petition. Therefore, the petitioner \"hardly can contend that these claims were unknown to him\" when he filed his first federal petition. Id. 465 U.S. at 206, 104 S.Ct. at 965. Further, the Court stated that the claims raised were \"meritless.\" Id. at 207, 104 S.Ct. at 965. Antone simply stands for the proposition, settled in this circuit, that a petitioner may be barred from presenting a second petition when he or, inferentially, his counsel actually knew of the claims raised in the second petition at the time the first petition was filed.\nTherefore, it appears none of the recent Supreme Court jurisprudence in this area has effected a change in the principles of Sanders concerning the abuse of the writ doctrine, even assuming that such a change could be effected in light of Congress' codification of Sanders into Rule 9(b), see L. Yackle, supra, Sec. 155, at 564 (\"congressional endorsement of the Sanders approach in Rule 9(b) would surely make any significant departure from present law difficult\").\n\n\n11\n The instant case does not implicate or alter the rule of Jones v. Estelle, 692 F.2d 380 (5th Cir.1982), in which we held that a petitioner's subjective awareness of the abuse of the writ doctrine and the need to raise all known claims in one petition is irrelevant to application of the doctrine. Rather, the only issue before us regarding the abuse of the writ doctrine is the standard for determining a petitioner's knowledge of legal claims\n\n\n12\n See Daniels, 763 F.2d at 707. Compare Hamilton, 772 F.2d at 175 (\"conclusory claim\" insufficient to show ignorance of legal issue); Booker, 764 F.2d at 1377 (\"bald allegation\" of ignorance insufficient to meet burden)\n\n\n13\n The reason why the investigation focused immediately on Passman is not clear from the trial record. Two men took part in the robbery. One of the victims identified one of the attackers from a photo array immediately after the robbery as Walter Burnette. The victims were not shown a picture of Passman, and they described the second attacker simply as \"tall, dark-complexioned.\" Police in Covington, Louisiana, the site of the robbery, immediately radioed police in Hammond, where Passman lived, to \"stake his house out.\" That decision was made after receipt of \"particular police information\" and \"other information,\" Trial Tr. at 515, 517, which was not specified at trial. In closing argument, however, the prosecutor stated that police went to Passman's house solely because of the description the victims gave police. Id. at 686. There seems to be no evidentiary basis for the latter statement\n\n\n14\n Chief Laird did testify, however, that Passman's wife told him that the couple had been fishing in Mississippi earlier in the weekend when police arrested Passman. Passman's wife had so testified during the defense's case in chief\n\n\n15\n The state's only argument as to the applicability of Doyle is that the testimony may have concerned pre-arrest silence. The state does not argue that Chief Laird's testimony, even if it concerned Passman's post-arrest silence, did not violate Doyle because the evidence referred to silence not in the immediate post-arrest time frame. The Court in Doyle did not address this issue. 426 U.S. at 616 n. 6, 96 S.Ct. at 2244 n. 6; see United States v. Mireles, 570 F.2d 1287, 1292 & n. 8 (5th Cir.1978) (\"comments on silence at times subsequent to the immediate post-arrest period present[ ] 'different considerations from those implicated by cross-examining petitioners or defendants as to their silence after receiving Miranda warnings at the time of arrest' \")\n\n\n16\n See also United States v. Meneses-Davila, 580 F.2d 888, 895 (5th Cir.1978); United States v. Johnson, 558 F.2d 1225, 1230 (5th Cir.1977) (evidence admitted in violation of Doyle \"went to the heart of the sole defense, encouraging the jury to believe that the defense was fabricated after arrest\"); United States v. Luna, 539 F.2d 417, 417 (5th Cir.1976). Cf. Williams v. Zahradnick, 632 F.2d 353, 361 & n. 10 (4th Cir.1980) (\"When refutation of an exculpatory defense is the purpose [of prosecution conduct that violates Doyle ], attack is on the jugular of the defendant's case, his innocence, and it is rarely declared harmless.\") (citing Harp, 536 F.2d at 602-03)\n\n\n17\n In a recent case interpreting Doyle, the Court declined to evaluate the harmlessness of Doyle error because the state failed to raise the issue. Wainright v. Greenfield, --- U.S. ----, 106 S.Ct. 634, 640 n. 13, 88 L.Ed.2d 623 (1986)\n\n\n18\n In Miller, 789 F.2d at 446, the Seventh Circuit sitting en banc refused to find Doyle error harmless when the \"crux\" of the trial was whether the jury believed prosecution witnesses or the defendant. See United States v. Johnson, 495 F.2d 242, 246 n. 5 (10th Cir.1974) (where the essence of a case is jury determination of defendant's credibility, admission of tainted evidence regarding that credibility cannot be harmless)\n\n\n19\n Passman has offered extensive evidence concerning the sentences given other convicted armed robbers in Louisiana. That evidence is simply not relevant to an application of the second prong of Helm. Cf. id. 463 U.S. at 293, 103 S.Ct. at 3011\n\n\n"} -{"text": "683 F.2d 1374\n*Evansv.Wainwright\n81-5694\nUNITED STATES COURT OF APPEALS Eleventh Circuit\n8/6/82\n\n1\nM.D.Fla.\n\nREVERSED\n\n2\n---------------\n\n\n\n* Fed.R.App. P. 34(a); 11th Cir. R. 23.\n\n\n"} -{"text": "927 F.2d 604\nUnpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Milton L. HINSON, Plaintiff-Appellant,v.SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant-Appellee.\nNo. 90-6001.\nUnited States Court of Appeals, Sixth Circuit.\nMarch 5, 1991.\n\nOn Appeal From the United States District Court for the Middle District of Tennessee, 89-00082, Marton, J.\nM.D.Tenn.\nAFFIRMED.\nBefore BOYCE F. MARTIN, Jr. and BOGGS, Circuit Judges; and ENGEL, Senior Circuit Judge.\nPER CURIAM.\n\n\n1\nThe plaintiff appeals from the Secretary of Health and Human Services' denial of social security disability benefits. We affirm the denial of benefits for the reasons set forth below.\n\n\n2\nClaimant Milton L. Hinson first filed an application for disability insurance benefits on July 9, 1981. The application was denied by an Administrative Law Judge (ALJ) on October 1, 1982. The denial was affirmed by the district court on August 3, 1983.\n\n\n3\nHinson filed a new application for disability benefits on June 15, 1987. A hearing was held on May 12, 1988 before an ALJ, who found that Hinson was disabled after August 21, 1986, the date Hinson sought emergency room treatment for pneumonia. Because Hinson's insured status had expired on March 31, 1983, however, the ALJ denied the application for disability benefits. On appeal, the U.S. Magistrate and the district court affirmed the denial of benefits, granting the Secretary's motion for summary judgment.\n\n\n4\nHinson suffers from chronic lung infections and other respiratory problems. Also, a thumb and finger on his right hand were amputated in 1973. He has not worked since 1979, though the ALJ concluded at the 1988 hearing that he could have continued to perform his duties as a security guard until 1986. Hinson's primary physician, Dr. Robert Hollister, traced Hinson's respiratory infections to bronchiectasis, a chronic dilation of the bronchi, marked by coughing and fatigue. Dr. Hollister treated Hinson from at least as early as 1981 through June 1986.\n\n\n5\nIn reviewing the denial of disability benefits, we must accept the Secretary's findings of fact if they are supported by substantial evidence. 42 U.S.C. Sec. 405(g). Additionally, we must be certain that the Secretary applied the proper legal standards. Landsaw v. Secretary of Health and Human Services, 803 F.2d 211, 213 (6th Cir.1986). This court may not retry the case de novo, nor resolve conflicts in the evidence, nor weigh questions of credibility, as long as the evidence is adequate to support the Secretary's conclusion. Smith v. Secretary of Health and Human Services, 893 F.2d 106, 108 (6th Cir.1989).\n\n\n6\nIn this case, the Secretary's review necessarily focused on the very limited time period between October 2, 1982 and March 31, 1983. Before this period, the initial October 1, 1982 denial of disability benefits is res judicata for the present benefit application and the question of Hinson's date of disability. See Siterlet v. Secretary of Health and Human Services, 823 F.2d 918 (6th Cir.1987). After this six-month time period, Hinson no longer qualified for disability insured status under 42 U.S.C. Secs. 423(a)(1)(A) and (c)(1).\n\n\n7\nThe ALJ considered Hinson's medical records and employment history. Dr. Hollister completed a physical capacities evaluation of Hinson in December 1981 which indicated that Hinson could perform light work activity. While Dr. Hollister testified that Hinson was totally and permanently disabled throughout the period of Hollister's treatment, the ALJ could properly conclude otherwise by weighing all of the evidence and making credibility determinations. Dr. Hollister was unable to produce any office notes relating to Hinson for the period after January 1982. Hinson therefore produced no new evidence from his treating physician which was not already presented at the time he was denied disability benefits in 1982. The ALJ is not bound by a treating physician's conclusory statements. Duncan v. Secretary of Health and Human Services, 801 F.2d 847, 855 (6th Cir.1986).\n\n\n8\nWe conclude that the findings of the Secretary are supported by substantial evidence. The ALJ weighed the conflicting medical evidence presented by three physicians, and reached reasonable factual conclusions in finding that Hinson had failed to show he could not perform his past duties as a security guard in the relevant 1982-83 time period, as required under 20 C.F.R. Sec. 404.1520(e) (1990). The ALJ found that Hinson's former work as a security guard from 1977 to 1979 required walking and standing but no lifting. This was supported by Hinson's own testimony. Such work falls within the definition of sedentary work under the Secretary's relevant regulation, 20 C.F.R. Sec. 404.1567(a) (1990), and the medical evidence does not indicate that Hinson could not perform such work in 1982-83.\n\n\n9\nThe Secretary also applied the correct legal standard in determining the onset date of Hinson's disability, which \"must be fixed based on the facts and can never be inconsistent with the medical evidence of record\". Social Security Ruling 83-20 (Cumulative Ed.1983). The selected onset date need only be supported by substantial evidence, and the Secretary does not have to refute evidence of another date that could have been selected. See Blankenship v. Bowen, 874 F.2d 1116, 1121 (6th Cir.1989).\n\n\n10\nIn this case, while the Secretary concedes that Hinson has chronic pulmonary problems, there was insufficient evidence to indicate that he was disabled during the relevant six-month period in 1982-83. While Hinson may suffer from a chronic condition, he is not entitled to disability benefits unless he was actually disabled before the Secretary's selected onset date. See Foster v. Bowen, 853 F.2d 483, 489 (6th Cir.1988). The ALJ concluded that the severity of Hinson's respiratory problems, complicated by pneumonia, rendered him disabled only after August 21, 1986. Thereafter, Hinson was unable to perform even sedentary work, as defined in 20 C.F.R. Sec. 404.1567(a) (1990).\n\n\n11\nThough sympathetic to Hinson's medical concerns, we cannot on the record presented conclude that the Secretary's findings for the relevant time period were not supported by substantial evidence. There is no objective basis for concluding that Hinson's condition had worsened to the point of disability after October 1, 1982 and before March 31, 1983. The judgment of the district court is AFFIRMED.\n\n"} -{"text": "\n634 F.Supp.2d 257 (2009)\nMichele FENGLER, on behalf of herself and all other employees similarly situated, et al., Plaintiffs,\nv.\nCROUSE HEALTH SYSTEM, INC., et al., Defendants.\nNo. 5:08-CV-1221.\nUnited States District Court, N.D. New York.\nMay 27, 2009.\n*258 Dolan, Thomas & Solomon LLP, Patrick J. Solomon, Esq., J. Nelson Thomas, Esq., Justin M. Cordello, Esq., Michael J. Lingle, Esq., Sara E. Rook, Esq., of counsel, Rochester, NY, for Plaintiffs.\nBond, Schoeneck & King, PLLC, John Gaal, Esq., Joseph C. Dole, Esq., Louis Orbach, Esq., of counsel, Syracuse, NY, for Defendants.\n\nMEMORANDUM-DECISION and ORDER\nDAVID N. HURD, District Judge.\n\nI. INTRODUCTION\n\nOn March 16, 2009, Hon. David E. Peebles, United States Magistrate Judge, entered a Decision and Order (\"Order\") as follows: (1) approving an appended form notice, information sheet, envelope, and consent form for plaintiffs' counsels' use in *259 making unsolicited contacts with potential opt-in plaintiffs; (2) directing the defendants to post the notice on job site bulletin boards for sixty days preceding the end of the opt-in period; and (3) prohibiting the parties and their counsel from unsolicited communications with potential opt-in plaintiffs with the limited exceptions when the communication is initiated by the potential opt-in plaintiff and when a notice is returned due to mail delivery issues.\nOn March 30, 2009, plaintiffs timely filed objections to the Order pursuant to 28 U.S.C. \u00a7 636(b)(1)(A), Fed.R.Civ.P. 72(a), and L.R. 72.1(b). Specifically, plaintiffs objected to the portions of the Order which (1) restricted communications between plaintiffs and potential plaintiffs; (2) sua sponte revised the Notice form that was agreed to by the parties after much negotiation; and (3) allowed individuals to join the lawsuit only for the purpose of asserting a claim under the Fair Labor Standards Act, (\"FLSA\"), 29 U.S.C. \u00a7\u00a7 201-219, for unpaid meal breaks. Defendants opposed plaintiffs' objections. Plaintiffs replied. Oral argument was heard on April 24, 2009, in Utica, New York. Decision was reserved.\n\nII. BACKGROUND\n\nPlaintiffs brought this action alleging that defendants violated the FLSA. In a nutshell the alleged violations are that plaintiffs and other similarly situated employees were required to work through meal breaks and to work overtime without compensation. On January 26, 2009, Magistrate Judge Peebles granted plaintiffs' motion to certify the matter as a collective action pursuant to 29 U.S.C. \u00a7 216(b). The putative plaintiff group was described as follows:\nAll present and former hourly employees of Faxton-St. Luke's Healthcare and St. Luke's Home, including but not limited to registered nurses, licensed practical nurses, and certified nurses' assistants, with direct patient care responsibilities who have been subject to automatic meal break deductions through use of the Kronos system, and who have or may have worked through or during unpaid meal breaks without compensation at any time during the past three years.\n(Jan. 26, 2009, Decision & Order, Doc. No. 66 at 29-30.) Although the complaint alleges violations as to meal breaks and overtime, only meal breaks are included in the description of the putative plaintiff group.\nThe parties were directed to confer and attempt to agree upon the form of notice to be sent to each of the potential plaintiffs. The parties agreed upon the form of the Notice,[1] Information Sheet, and Envelope. However, the parties did not concur regarding an opt-in Consent Form. Accordingly, plaintiffs and defendants each submitted a proposed consent form.\nAdditionally, defendants requested that constraints be put on plaintiffs and their counsel regarding communications with potential opt-in plaintiffs during the opt-in period. Plaintiffs and their counsel opposed a prohibition on communication with potential opt-in plaintiffs as a violation of their First Amendment free speech rights. Magistrate Judge Peebles held a telephone conference to address the parties' positions on the communication issue. He also permitted additional briefing on this subject. However, he did not hold a hearing.\n*260 Magistrate Judge Peebles approved the Information Sheet and Envelope as submitted by the parties. However, he revised the agreed-upon Notice by removing the caption \"United States District Court\" from the first page, modified the \"Do Nothing\" section to highlight the statute of limitations and its potential impacts, added a background sentence, and changed the statement regarding attorneys fees and costs. Magistrate Judge Peebles approved a Consent Form that included a paragraph limiting opt-in plaintiffs to a cause of action relating to meal breaks and excluding any other cause of action alleged by the plaintiffs.\nIn addition to specifying the contents of the unsolicited communication to be sent to potential opt-in plaintiffs, Magistrate Judge Peebles prohibited communication with potential opt-in plaintiffs in all but two limited circumstances. First, the Order permitted \"[p]laintiffs or their agents [to] communicate with a potential opt-in plaintiff when the communication is initiated by such potential opt-in plaintiff, except that during such communication neither plaintiffs nor their counsel shall actively solicit the potential opt-in plaintiff to join this action, make any statements conflicting with the court authorized notice, or make misleading statements regarding the status or merits of the litigation.\" (Order at 18.) The Order also permitted limited communication upon return of a notice resulting from mail delivery problems. The Order stated:\nc) in the event that plaintiffs' counsel receives a returned notice resulting from an incorrect or insufficient address or other mail delivery issue, if plaintiffs' counsel desires to attempt direct contact with such potential opt-in plaintiff, counsel shall immediately notify defendants' counsel of the fact of the returned mail as well as the intent to make such direct contact, before the direct contact is attempted, in an effort to reach agreement regarding the manner in which efforts are to be made to locate the individual.\nd) If such direct contact is attempted by plaintiffs' counsel as authorized in paragraph (c) above, it shall be limited to the purpose of advising the potential opt-in plaintiff of the attempt to provide the court authorized notice and obtaining information from the potential opt-in plaintiff that will permit plaintiffs to provide such notice. During such communication, neither plaintiffs nor their counsel shall solicit the potential opt-in plaintiff to join this action, make any statements conflicting with the court-authorized [notice], or make any misleading statements regarding the status or merits of the litigation.\nId. These were the only two exceptions to the prohibition on communication.\n\nIII. STANDARD\n\nThe standard for review of a magistrate judge's decision on nondispositive matters is whether the magistrate judge's findings are \"clearly erroneous or contrary to law.\" 28 U.S.C. \u00a7 636(b)(1)(A); Fed. R.Civ.P. 72(a). Clear error may be found \"`when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'\" Stetz v. Reeher Enters., Inc., 70 F.Supp.2d 119, 120-21 (N.D.N.Y.1999) (McAvoy, C.J.) (quoting Vandewalker v. Quandt's Food Serv. Distribs., Inc., 934 F.Supp. 42, 48 (N.D.N.Y.1996) (Pooler, J.)); see United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948).\n\nIV. DISCUSSION\n\n\nA. Prohibition on Communication\n\nIn prescribing a prohibition on unsolicited communication between the parties and *261 potential opt-in plaintiffs, the Magistrate Judge reasoned that district courts have a duty as well as the authority to enter orders governing the conduct, including communications, of the parties and their counsel in order to prevent potential abuse. (Order at 15.) He also recognized that direct contact with potential plaintiffs may implicate the ethical prohibition against attorneys soliciting potential clients, and further the competing concern of plaintiffs that potential opt-in plaintiffs receive notice of the suit prior to the expiration of the opt-in period. Id. at 15-16. With these competing concerns in mind, the Magistrate Judge permitted limited communication with counsel when such communication was initiated by the potential opt-in plaintiff, and if a mail delivery issue prevented a potential opt-in plaintiff from receiving the notice. Id. at 18. The content of the allowed communication under these exceptions was highly circumscribed. Id. at 18-19.\nClass actions, including a collective action brought pursuant to the FLSA, are complex litigations during which the district court's early involvement, including the notice process, is advisable. See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 169-71, 110 S.Ct. 482, 486-87, 107 L.Ed.2d 480 (1989) (applying \u00a7 216(b) of the FLSA in an Age Discrimination in Employment Act case as provided for in that statute). Further, due to \"the potential for abuse, a district court has both the duty and the broad authority to exercise control over a class action and to enter appropriate orders governing the conduct of counsel and parties.\" Gulf Oil Co. v. Bernard, 452 U.S. 89, 100, 101 S.Ct. 2193, 2200, 68 L.Ed.2d 693 (1981).\nOrders limiting the communications of the parties and counsel fall within the purview of a district court managing a class action. Id. at 101, 101 S.Ct. at 2200; see Hoffmann-La Roche Inc., 493 U.S. at 170, 110 S.Ct. at 486 (recognizing that trial court has substantial interest in mailed notices and communications with potential plaintiffs but not addressing these issue because they were not implicated in that case). Where a trial court is contemplating prohibitions on communications between the parties and potential class members, specific findings must be made that weigh \"the need for a limitation\" on communication \"and the potential interference with the rights of the parties.\"[2]Gulf Oil Co., 452 U.S. at 101, 101 S.Ct. at 2200. Moreover, the weighing process \"should result in a carefully drawn order that limits speech as little as possible, consistent with the rights of the parties under the circumstances.\" Id. at 102, 101 S.Ct. at 2201. The court cannot restrict communications \"without a specific record showing by the moving party of the particular abuses by which it is threatened.\" Id.\nThe Order contains a blanket prohibition on communications between the parties, counsel, and potential opt-in plaintiffs, with extremely limited exceptions as set forth above. However, other than a generalized recitation of the law and a recognition, again generalized, of plaintiffs' interest in insuring receipt of the notice by potential plaintiffs, the Order lacks any specific weighing of competing interests. There was no hearing. The Order contains no mention of defendants, seeking to limit communications, making any showing of threatened abuses, except for the general ethical proscription against solicitations. Although the general potential for abuses was noted, there were no actual abuses that occurred to justify the severe restrictions *262 of communication. But cf. Rossini v. Ogilvy & Mather, Inc., 798 F.2d 590, 602 (2d Cir.1986) (upholding issuance of an order imposing restrictions on communication between the parties and potential plaintiffs where two hearings were held, both parties had committed abuses, and parties were offered an opportunity to request additional findings). No findings of fact were made. Moreover, the order permits, rather than limits, as little speech as possible.\nAccordingly, the Magistrate Judge's Order containing the prohibition on communication is contrary to law and must be vacated. Further, the matter will be remanded for the Magistrate Judge to conduct appropriate proceedings so that a carefully drawn order can be entered \"that limits speech as little as possible, consistent with the rights of the parties under the circumstances.\"[3]Id. at 102, 104, 101 S.Ct. at 2201, 2202.\n\nB. Sua Sponte Changes to Notice\n\nPlaintiffs object to the Magistrate Judge deleting \"United States District Court\" and replacing it with \"Notice of Lawsuit with Opportunity to Join.\" Although class action notices commonly have the court caption at the beginning of the notice sent to potential plaintiffs, it is not clearly erroneous or contrary to law not to include the court caption. Accordingly, the plaintiff's objection as to this language will be overruled.\nPlaintiffs also object to the addition of language regarding the potential for liability for costs and attorneys fees as well as damages on defendants' potential counterclaims. In this regard, plaintiffs' counsel have stated \"that they will advance all court costs and expenses of litigation and will not seek to recover such costs from plaintiffs.\" Further, defendants have not asserted any counterclaims, concede that they have no intention of filing counterclaims, and do not object to removal of that language. Therefore, inclusion of the language pertaining to potential liability of plaintiffs for costs and damages for potential counterclaims is misleading and it was clear error to approve a Notice including it. Plaintiffs' objections on this point are well taken and the Magistrate Judge will be directed to approve a Notice using the language agreed upon by the parties.\n\nC. Limit Opt-in Plaintiffs' Claims to Violations as to Meal Break\n\nMagistrate Judge Peebles included a paragraph in the opt-in Consent Form limiting opt-in plaintiffs' claims to those for time worked during unpaid meal breaks. The FLSA provides that \"[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.\" 29 U.S.C. \u00a7 216(b). This statutory language indicates that once a potential plaintiff opts in, that person is a party to the action, not just to a claim. See Prickett v. DeKalb County, 349 F.3d 1294, 1297 (11th Cir.2003) (per curiam). In Prickett, multiple plaintiffs opted in and then the complaint was amended to add additional claims. Id. at 1296. The Prickett Court rejected the District Court's theory that plaintiffs opted in only as to claims asserted before they opted in, and therefore needed to opt-in again after the new claims were asserted. Id. at 1296-97. Rather, the Eleventh Circuit found that \"opt-in plaintiffs have the same status in relation to the claims of the lawsuit as do the named plaintiffs.\" Id. at 1297; see also Ansoumana v. Gristede's Operating *263 Corp., 201 F.R.D. 81 (S.D.N.Y.2001) (finding that supplemental state claims of plaintiffs who opted in under FLSA \u00a7 216(b) would not be dismissed because the opt-in plaintiffs \"should have the same rights as the named Plaintiffs to have all their related claims adjudicated in the same forum\"). The Prickett Court stated that the district court's legal conclusion that plaintiffs opted in only as to a claim (and not as to the entire action) was \"not supported by the language of the statute, nor is it supported by any holding of this circuit or any other federal appeals court.\" Prickett, 349 F.3d at 1297. Notably, neither the Magistrate Judge nor the defendants cite any authority to support opt-in only as to a claim (in contrast to opt-in as to the action, including all of its claims). Accordingly, the Magistrate Judge's determination that opt-in plaintiffs must be limited to seeking damages for a single claim, rather than as to all claims asserted in the action, is clearly erroneous and contrary to law. The language in the Consent Form containing this limitation must be removed.\n\nV. CONCLUSION\n\nThe prohibition on communication between the parties, their counsel, and potential opt-in plaintiffs as set forth in the Order is contrary to law. Any restriction on communications must be carefully drawn to restrict speech as little as possible while curbing identified potential abuses. It was not clear error to substitute the court caption with \"Notice of Lawsuit and Opportunity to Join.\" However, it was clear error to add language to the agreed-upon content of the Notice which warned potential plaintiffs of liability for costs, expenses, and damages when there is no potential for such liability. Finally, opt-in plaintiffs become parties to the action and may seek damages for all asserted claims, just as the named plaintiffs may do.\nAccordingly, it is\nORDERED that\n1. The Magistrate Judge's Order of March 16, 2006, is VACATED to the extent that it has been found to be clearly erroneous and/or contrary to law; and\n2. This matter is remanded to the Magistrate Judge for further proceedings as necessary for approval of a Notice and Consent Form consistent with this Memorandum-Decision and Order.\nIT IS SO ORDERED.\nNOTES\n[1] Defendants assert in their opposition that the Notice was not agreed upon. However, the Notice was agreed upon\u0097it was the form for consent to opt in (called a Consent Form by Judge Peebles) about which the parties disagreed. (See March 4, 2009, Text Minute Entry.)\n[2] The Court declined to reach the First Amendment argument, leaving that issue for a proper case with a fully developed record. Gulf Oil Co., 452 U.S. at 101 n. 15, 101 S.Ct. at 2200 n. 15.\n[3] In these circumstances, as in Gulf Oil Co., it is unnecessary to reach the First Amendment issue. See 452 U.S. at 101 n. 15, 101 S.Ct. at 2201 n. 15.\n"} -{"text": "796 F.2d 474\nMitchellv.Walker\n86-6577\nUnited States Court of Appeals,Fourth Circuit.\n6/23/86\n\n1\nM.D.N.C.\n\nAFFIRMED IN PART AND REMANDED\n"} -{"text": "905 F.2d 208\n11 UCC Rep.Serv.2d 926\nUNIFIRST FEDERAL SAVINGS BANK f/k/a Poinsett County Savings& Loan Association, Appellant,v.The AMERICAN INSURANCE COMPANY, one of the Fireman's FundGroup of Insurance Companies, Appellee,v.JAMCO, INC., Appellee.\nNo. 89-2382.\nUnited States Court of Appeals,Eighth Circuit.\nSubmitted April 11, 1990.Decided June 5, 1990.\n\nBen F. Arnold, Little Rock, Ark., for appellant.\nJames A. Knox and John W. Nassen, Dallas, Tex., for appellee.\nBefore ARNOLD, Circuit Judge, BRIGHT and ROSS, Senior Circuit Judges.\nROSS, Senior Circuit Judge.\n\n\n1\nUnifirst Federal Savings Bank (Unifirst) appeals from the district court's1 order granting summary judgment in the amount of $250,000 to the American Insurance Company. We affirm.\n\n\n2\nJamco, Inc. subcontracted to perform certain electrical work on a construction project for Brown-Olds Corporation. Jamco obtained a \"Performance Guarantee-Irrevocable Letter of Credit\" in the amount of $250,000 from Unifirst, formerly known as Poinsett County Savings & Loan Association, to secure its performance on the contract. Brown-Olds was identified as the beneficiary of the letter of credit. Brown-Olds thereafter filed a Chapter 11 bankruptcy petition. The bankruptcy court ordered it to assign all right, title, and interest in and to its contracts and subcontracts to the American Insurance Company (American) as surety to complete the project. Pursuant to the order, Brown-Olds and American entered into an assignment agreement on May 25, 1985. The assignment agreement provided in part:\n\n\n3\nSurety shall have the right in its own name or in the name of Contractor to demand, collect, receive, receipt for, sue for, compound, give acquittance for, settle, and release any and all amounts due or to become due on the aforesaid Assigned Items and to endorse the name of Contractor on all commercial paper in payment or part payment thereof, and in Surety's discretion to file any claim or take any other action or proceeding which Surety may deem necessary or appropriate to protect, preserve and realize upon the aforesaid Assigned Items.\n\n\n4\nJamco continued with performance of its work but was later unable to meet its financial obligations. On May 12, 1986, its vice-president so informed American and requested $150,000 in financial assistance. On June 19, 1986, American made its first presentation for payment of $150,000 on the letter of credit to Unifirst. It included a letter stating that it had right, title, and interest in the letter of credit and that its assignment was approved by the bankruptcy court. It also presented the original letter of credit, a separate statement that Jamco had not fulfilled its contractual obligations to Brown-Olds, Jamco's written admission of default, and a sight draft. Unifirst declined payment for the reason that no evidence showed American had the right to receive payment and because Brown-Olds needed to present the draft and its written statement that Jamco had not fulfilled its contract.\n\n\n5\nSubsequently, on November 3, 1986, American, through Brown-Olds (the original beneficiary), presented to Unifirst a sight draft and declaration that Jamco had defaulted for payment on the letter of credit. It also notified Unifirst that American was entitled to receive the payment as assignee. Brown-Olds demanded the full amount of $250,000. A November 10, 1986 letter from Jamco to Unifirst stated that Jamco was not in default on its contract and had not been notified of any default. On November 12, 1986, Unifirst again refused payment, citing 11 U.S.C. Sec. 365(c)(1) and (3), and stating that the documents submitted were fraudulent.\n\n\n6\nUnifirst filed suit in state court seeking injunctive relief and a declaratory judgment that it had no liability to American on the letter of credit. American removed the case to federal district court on diversity grounds and counterclaimed for $250,000 on the letter of credit. On cross-motions for summary judgment, the district court granted judgment in favor of American and awarded it $250,000. The court also granted Unifirst a judgment against Jamco for the sums paid under the letter of credit.\n\n\n7\nOn appeal, Unifirst argues the district court erred in failing to find that 11 U.S.C. Sec. 365 precluded the granting of summary judgment for American, and in granting summary judgment for American in view of its method of presenting the letter of credit.\n\n\n8\nUnifirst first asserts that the letter of credit is a \"financial accommodation\" which was terminated upon filing of the bankruptcy petition; that it was neither assumable nor assignable under 11 U.S.C. Sec. 365 of the Bankruptcy Code. Section 365 states that a trustee or debtor in possession may assume or reject an executory contract of the debtor. One of the limited exceptions to this general power is contained in section 365(c)(2). That section provides that a trustee may not assume or assign an executory contract if \"such contract is a contract to make a loan, or extend other debt financing or financial accommodations,\" for the benefit of the debtor. 11 U.S.C. Sec. 365(c)(2).\n\n\n9\nAmerican responds that bankruptcy defenses are inapplicable in this nonbankruptcy litigation, citing Lindsey v. Ipock, 732 F.2d 619, 622 (8th Cir.) (disallowing collateral attack of unappealed bankruptcy court order even if it was in error), cert. denied, 469 U.S. 881, 105 S.Ct. 247, 83 L.Ed.2d 185 (1984). Even if section 365 were applicable, American contends that it would not preclude assignment of the letter of credit because the letter is not an executory contract. Regardless, because Unifirst failed to file a complaint in the bankruptcy court proceedings, we agree with American that Unifirst's collateral attack of the bankruptcy court's judgment has no place in this litigation.\n\n\n10\nPresentment of a letter of credit is governed by the terms of the letter itself. See Ark.Code Ann. Secs. 4-5-103(1)(a) and 4-5-114(1). The letter of credit in this case demanded that Brown-Olds present a draft drawn on Unifirst for the beneficiary, the original letter of credit, and its written declaration that Jamco had not fulfilled its obligations under the contract. The letter did not expressly designate that it was assignable. Under Arkansas law, a letter of credit is not assignable but the right to proceeds of the letter is assignable. Ark.Code Ann. Sec. 4-5-116(1). Thus American's first presentment in which it claimed it was assigned the letter of credit was clearly incorrect. The second presentment, however, in which American claimed it had been assigned the right to the proceeds of the letter of credit, was proper. This latter presentment also conformed to the other requirements of the letter of credit.\n\n\n11\nUnifirst contests that American was ever actually assigned the right to proceeds, noting that neither Jamco, Unifirst, nor the letter of credit were referred to in the bankruptcy court's order. The district court adopted American's reasoning for assignment: that Ark.Code Ann. Sec. 4-5-116(2) provides for an assignment of the right to receive proceeds from a letter of credit. This section provides in part:\n\n\n12\nEven though the credit specifically states that it is nontransferable or nonassignable, the beneficiary may before performance of the conditions of the credit, assign his right to proceeds. Such an assignment is an assignment of an account under chapter 9 of this title on secured transactions and is governed by that chapter except that:\n\n\n13\n. . . . .\n\n\n14\n(b) The issuer may honor drafts or demands for payment drawn under the credit until it receives a notification of the assignment signed by the beneficiary which reasonably identifies the credit involved in the assignment and contains a request to pay the assignee; and\n\n\n15\n(c) After what reasonably appears to be such a notification has been received, the issuer may without dishonor refuse to accept or pay even to a person otherwise entitled to honor until the letter of credit or advice of credit is exhibited to the issuer.\n\n\n16\nThe district court noted that assignment occurred before Brown-Olds attempted to perform the various conditions under which payment could have been made, and that Brown-Olds adequately informed Unifirst of the assignee. See Ark.Code Ann. Sec. 4-5-116(2)(b). We agree that the right to receive proceeds of the letter of credit was properly assigned.\n\n\n17\nFinally, Unifirst argues that the documents presented to it were fraudulent under the Uniform Commercial Code, citing Ark.Code Ann. Sec. 4-5-114. The letter sent from the president of Jamco to Unifirst on November 10, 1986, stated that it was not in default on the construction contract. Six months earlier, however, Jamco had requested financial assistance from American. American had supplied this earlier letter to Unifirst along with its declaration of default. The district court ruled that the documents presented to Unifirst satisfied the requirement of showing a default. We do not believe the court needed to explore whether a default actually occurred, as an issuer is obliged to pay on the presentation of \"specified documents showing a default, rather than upon proof of the fact of default.\" Bank of N.C., N.A. v. Rock Island Bank, 570 F.2d 202, 206 n. 7 (7th Cir.1978).\n\n\n18\nIn sum, we find that the assignment was valid under Ark.Code Ann. Sec. 4-5-116(2) and proper presentation was made; the documents presented were sufficient to show that Jamco had defaulted. We find no material facts in dispute.\n\n\n19\nAccordingly, the district court's order granting summary judgment to American in the amount of $250,000 plus interest is affirmed.\n\n\n\n1\n The Honorable Henry Woods, United States District Judge for the Eastern District of Arkansas\n\n\n"} -{"text": "\n266 Cal.App.2d 192 (1968)\nB-L RANCH, INC., Petitioner,\nv.\nWORKMEN'S COMPENSATION APPEALS BOARD, FRANCA LUCIA RAY et al., Respondents.\nCalifornia Court of Appeals. \nSept. 27, 1968.\n McConnell & Cramoline and Lawrence Kirk for Petitioner.\n Everett A. Corten, Sheldon M. Ziff, Nathan Mudge and Arthur C. Jones, Jr., for Respondents.\n McCOY, J. pro tem. [fn. *]\n This is a proceeding to review and annul an order of the Workmen's Compensation Appeals Board dismissing the employer's compensation insurance carrier as a party defendant to the proceedings on the applicant's claim for death benefits and funeral expenses arising out of the industrial injury and death of applicant's husband.\n In June 1967 Franca Lucia Ray, the widow of Marian Ray, applied to the board for adjudication of her claim against B-L Ranch, Inc., and State Compensation Insurance Fund as the employer's insurance carrier, arising out of the industrial accident and death of her husband, Marian Ray, on May 13, 1967, while employed as a ranch worker by B-L Ranch, Inc. By its answer State Compensation Insurance Fund, hereafter referred to as the Fund, denied that it was the compensation insurance carrier for B-L Ranch, Inc. on the date of the accident. After hearing the matter the referee ordered the Fund dismissed as a party defendant, and then made an award in favor of the applicant against B-L Ranch, Inc. as an uninsured employer.\n The primary issue before the referee was whether the fund was the insurance carrier for the employer at the time of the accident. The contentions of the parties before the referee with reference to this issue are repeated in the petition of the employer for reconsideration and in the Fund's answer thereto. The employer's petition for reconsideration was based on the ground that the evidence does not justify the referee's findings of fact and that the findings do not support his decision. In support of its petition the employer contended in substance that the Fund was estopped to deny coverage *194 and that it had waived the right to claim termination of the policy. In its answer the Fund contended its conduct before the injury, as shown by the record, did not create an estoppel, that its conduct after the injury did not constitute a waiver, and that the evidence sustains the findings of the referee. The petition for reconsideration was denied by the board.\n [1] We have concluded that the decision of the board denying the petition for reconsideration must be annulled because of the failure of the board to comply with the provisions of section 5908.5 of the Labor Code. That section provides that any decision of the board denying a petition for reconsideration \"shall be in writing ... and shall state the evidence relied upon and specify in detail the reasons for the decision.\" Where the board fails to comply with this section, the court cannot fairly consider the substantive issues raised by the petition for review. (Evans v. Workmen's Comp. App. Bd., 68 Cal.2d 753 [68 Cal.Rptr. 825, 441 P.2d 633].)\n [2] In the case before us the board's order denying reconsideration reads: \"We have considered the allegations of the Petition for Reconsideration on file herein and the contents of the Referee's Report with respect thereto. Based on our review of the record, and for the reasons stated by the Referee, whose report we herewith adopt and incorporate, It is Ordered that said Petition for Reconsideration be, and it hereby is, Denied.\" It is obvious on its face that in making this decision the board made no attempt to comply with section 5908.5 of the Labor Code, in that, the decision contains no statement of the evidence relied upon and no statement of the reasons for the decision. As we pointed out in Holcomb v. Workmen's Comp. App. Bd., ante, p. 108 [71 Cal.Rptr. 874], decided this day, the board's failure to comply with that section is not cured by the extended discussion of the evidence and of the reasons for the board's decision in the answer filed by the board's attorneys to the petition for review.\n It is equally obvious, at least in the case before us, that the board has not complied with section 5908.5 by adopting and incorporating in its decision the reasons stated in the report of the referee. The formal decision of the referee in which he ordered the Fund dismissed as a party defendant contains no findings of fact as to the issues of estoppel or waiver and no statement of the reasons for his order or of the evidence on which he based his decision. The only statement with reference *195 to the issue of insurance coverage is found in the referee's opinion on his decision, where he says: \"Because of sloppy business practices, the defendant employer was delinquent in paying premium and allowed its workmen's compensation insurance coverage to lapse on May 2, 1967. Therefore, it is found that the defendant employer had no coverage on the date of the fatal accident.\"\n The report of the referee on the petition for reconsideration is equally inadequate. So far as relevant here, it reads: \"In arriving at the decision [that there was no insurance coverage] the Referee carefully weighed all of the evidence in the record. The record clearly demonstrates that workmen's compensation insurance coverage provided by State Compensation Insurance Fund lapsed on May 2, 1967, because of defendant employer's failure to pay the insurance premium. The industrial accident took place on May 13, 1967, when there was no insurance coverage.\" Assuming that the adoption and incorporation in its decision of a report of the referee on a petition for reconsideration is sufficient compliance with the requirement of section 5908.5 that the decision of the board on a petition for reconsideration \"shall be made by the appeals board and not by a referee,\" the adoption and incorporation of such a report is not sufficient where the report itself contains no statement of the evidence relied upon or of the reasons for the decision as to decisive issues.\n In our opinion petitioner had the right under the law to a decision of the board on the issues raised in the proceedings before the board, as a prerequisite to a review by the court of an adverse decision. [3] In our opinion, since the board did not regularly pursue its authority in making its decision on the petition for reconsideration, the board retains jurisdiction to make a new decision on that petition which complies with the provisions of section 5908.5 of the Labor Code. (Evans v. Workmen's Comp. App. Bd., 68 Cal.2d 753 [68 Cal.Rptr. 825, 441 P.2d 633].)\n The decision of the board denying reconsideration is annulled and the case is remanded to the board with directions to issue a new decision on applicant's petition for reconsideration within 30 days from the day this decision becomes final.\n Ford, P. J., and Cobey, J., concurred.\nNOTES\n[fn. *] *. Retired judge of the superior court sitting under assignment by the Chairman of the Judicial Council.\n"} -{"text": "944 F.2d 908\nNOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.David C. ELLARD, Petitioner-Appellant,v.Chase RIVELAND, Secretary of the Washington Department OfCorrections Respondent-Appellee.\nNo. 91-35082.\nUnited States Court of Appeals, Ninth Circuit.\nSubmitted Sept. 9, 1991*.Decided Sept. 19, 1991.\n\nBefore WRIGHT, FARRIS and TROTT, Circuit Judges.\n\n\n1\nMEMORANDUM**\n\n\n2\nDavid Ellard, a Tacoma, Washington tire dealer with contracts with the Tacoma School District (\"TSD\"), was convicted of theft in Washington State Superior Court in 1984. Ellard's habeas corpus petition was dismissed in district court. We affirm.\n\n\n3\nEllard first argues that Jury Instruction 22 was unconstitutional because it allowed the jury to convict for the criminal acts of others, and it left out the action elements of accomplice liability. We find the instruction only states a necessary but not a sufficient condition for conviction--it tells the jury not to convict unless it finds specific intent, it does not tell the jury to convict if it finds specific intent. Moreover, jury instructions are to be read in the \"context of the overall charge.\" United States v. Bordallo, 857 F.2d 519, 527 (9th Cir.1988) (citations omitted) modified on other grounds, 872 F.2d 334 (9th Cir.1989), cert. denied, 110 S.Ct. 71 (1989). Jury Instruction 23 fully spells out the elements of theft.\n\n\n4\nSecond, Ellard claims that Jury Instruction 16 was unconstitutional under State v. Shipp, 610 P.2d 1322, 93 Wash.2d 510 (1980) and allowed the jury to convict because of mere negligent ignorance. We find Instruction 16 was not defective under Shipp. Moreover, even though the instruction did not use the word \"actual knowledge,\" \"knowledge\" has an ordinary and accepted meaning, which is actual knowledge. Shipp, 610 P.2d at 1326.\n\n\n5\nThird, Ellard argues that he was denied ineffective assistance of counsel. Ellard must (1) show that his attorney's errors or omissions reflect a failure to exercise the skill, judgment, or diligence of a reasonably competent attorney, and (2) affirmatively establish prejudice as a result of the attorney's conduct.\" United States v. Murray, 751 F.2d 1528, 1535 (9th Cir.1985) (citing Strickland v. Washington, 466 U.S. 655 (1984)), cert. denied, Moore v. United States, 474 U.S. 979 (1985).\n\n\n6\nEllard argues that his counsel's conduct was ineffective because of his counsel's failure to (1) object adequately to evidence of bad acts; (2) take exception to the trial court's jury instruction; (3) request a limiting instruction to this evidence; and (4) request a continuance before the cross-examination of the assistant state auditor.\n\n\n7\nThe record demonstrates that his attorney did object to this evidence, see 4 RP 94-99, and the court ruled bad acts evidence was admissible under Washington Evidence Rule 404(b). The record shows also that Ellard had direct complicity in the TSD transactions. He has not shown that the result would have been any different if a limiting instruction had been given. Moreover, Ellard has not shown any prejudice, nor has he shown that his counsel's long cross-examination of the assistant state auditor rendered his conduct less than that of a reasonably competent attorney.\n\n\n8\nFinally, Ellard argues that the aggregation of these errors made his trial fundamentally unfair. Lincoln v. Sunn, 807 F.2d 805, 814 n. 6 (9th Cir.1987). This claim is meritless.\n\n\n9\nAFFIRMED.\n\n\n\n*\n The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a); Ninth Circuit Rule 34-4\n\n\n**\n This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3\n\n\n"} -{"text": "Nebraska Supreme Court Online Library\nwww.nebraska.gov/apps-courts-epub/\n07/12/2019 12:06 AM CDT\n\n\n\n\n - 904 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\n\n\n\n Sharon B. Leners, appellant, v.\n Stacy M. Leners, appellee.\n ___ N.W.2d ___\n\n Filed April 19, 2019. No. S-18-072.\n\n 1. Divorce: Child Custody: Child Support: Property Division:\n Alimony: Attorney Fees: Appeal and Error. In a marital dissolution\n action, an appellate court reviews the case de novo on the record to\n determine whether there has been an abuse of discretion by the trial\n judge. This standard of review applies to the trial court\u2019s determinations\n regarding custody, child support, division of property, alimony, and\n attorney fees.\n 2. Statutes: Appeal and Error. Statutory interpretation is a question of\n law, which an appellate court resolves independently of the trial court.\n 3. Divorce: Property Division: Pensions. In dissolution proceedings, the\n trial court has broad discretion in valuing and dividing pension rights\n between the parties.\n 4. Child Custody. While the wishes of a child are not controlling in\n the determination of custody, if a child is of sufficient age and has\n expressed an intelligent preference, the child\u2019s preference is entitled\n to consideration.\n 5. Evidence: Appeal and Error. In a review de novo on the record, an\n appellate court reappraises the evidence as presented by the record and\n reaches its own independent conclusions with respect to the matters\n at issue.\n 6. Judges: Words and Phrases. A judicial abuse of discretion exists if the\n reasons or rulings of a trial judge are clearly untenable, unfairly depriv-\n ing a litigant of a substantial right and denying just results in matters\n submitted for disposition.\n 7. Courts: Attorney Fees. Courts have the inherent power to award attor-\n ney fees in certain unusual circumstances amounting to conduct during\n the course of litigation which is vexatious, unfounded, and dilatory, such\n that it amounts to bad faith.\n\f - 905 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\n Appeal from the District Court for Gage County: Ricky A.\nSchreiner, Judge. Affirmed.\n\n Philip B. Katz and Steven J. Riekes, of Marks, Clare &\nRichards, L.L.C., for appellant.\n\n Megan M. Zobel, of Anderson, Creager & Wittstruck, P.C.,\nL.L.O., for appellee.\n\n Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,\nPapik, and Freudenberg, JJ.\n\n Cassel, J.\n INTRODUCTION\n Sharon B. Leners appeals from a decree dissolving her mar-\nriage to Stacy M. Leners. Although the district court may have\noverstated Sharon\u2019s entitlement to a divorced spouse annuity\nin connection with Stacy\u2019s railroad pension, it did not abuse\nits discretion in awarding Stacy his entire pension in equita-\nbly dividing the marital estate. Having reviewed the record de\nnovo, we cannot say that the court\u2019s determinations regarding\ncustody, parenting time, child expenses, and attorney fees were\nuntenable. We affirm the decree.\n\n BACKGROUND\n The parties married in 1997. In 2016, Sharon filed a com-\nplaint to dissolve the marriage. At that time, the parties had\ntwo minor children, one born in 1998 and the other in 2002.\n On July 31, 2017, the court entered a temporary order\nawarding the parties joint custody of the children. Because\nStacy\u2019s employment takes him to different locations around the\ncountry from the 1st through the 8th day of the month and then\nthe 16th to the 23d day of each month, the court provided him\nparenting time every month on the 9th to the 15th day and on\nthe 24th to the last day of the month.\n Three weeks later, the court conducted a trial. We summa-\nrize only the evidence relevant to the issues on appeal.\n\f - 906 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\n Custody\n The custody issue focused on the 15-year-old child, because\nthe other child soon would be turning 19 years old (and did\nshortly before entry of the decree). The 15-year-old child testi-\nfied in camera, and the court sealed her testimony. We consider\nthis testimony in our de novo review, but decline to summa-\nrize it.\n Both parties described a positive relationship with the child.\nStacy requested shared legal and physical custody of the child,\nbut Sharon asked for sole custody. According to Sharon, the\ntemporary custody and parenting time arrangement was not in\nthe child\u2019s best interests, because it caused the child to cry and\nto be irritable and argumentative. Sharon did not believe that\njoint physical custody would work on a permanent basis. She\nanticipated having difficulty obtaining the child\u2019s compliance\nand did not \u201cfeel [she] should have to force a 15[-]year-old\u201d to\ncomply with the parenting plan. Stacy testified to a willingness\nto put aside personal differences and work with Sharon even\nthough he had been unable to do so in the past.\n The parties offered different parenting time plans for the\ncourt\u2019s consideration. Sharon proposed that Stacy have parent-\ning time every other weekend from after school on Friday until\n10 a.m. on Sunday and on Thursdays each week from after\nschool until 8 p.m. But Stacy testified that such a plan would\nleave him little one-on-one time with the child due to the\nchild\u2019s activities and Stacy\u2019s work schedule. Stacy essentially\nasked for an extension of the temporary plan.\n\n Pensions\n Sharon is a registered nurse, and her proposed child support\nworksheets show her monthly income to be $3,693. Through\nher employer, she has a 401K account and a pension. She also\nhas a Nebraska Public Employees Retirement Systems account.\nIn Sharon\u2019s proposed property division, she included the lat-\nter account and the 401K under her column at a total value of\n$38,301.28. Stacy\u2019s proposed property division additionally\n\f - 907 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\nincluded Sharon\u2019s pension from her employer at a value of\n$250 per month.\n Stacy has worked for Union Pacific Railroad for nearly 12\nyears. He is a \u201csystem semi driver,\u201d and his proposed child sup-\nport worksheet showed his monthly income to be $5,208. Stacy\ndid not have a thorough understanding of his railroad pension,\nbut he believed that the tier I component was not divisible,\nwhile the tier II component was. According to Stacy, Sharon\nwas eligible to receive a payment from his railroad pension and\nshe would receive some of his pension after they were divorced\neven without any order from the court. Stacy\u2019s proposed prop-\nerty division suggested that Sharon receive a divorced spouse\nbenefit of unknown value and that he would receive his 401K\nvalued at $49,290. Sharon\u2019s proposed property division showed\nthat the \u201cRailroad Retirement Board Creditable Compensation\u201d\nof unknown value should be divided by a qualified domestic\nrelations order.\n The court received a \u201cStatement of Railroad Employee\u2019s\nActual or Estimated Railroad Retirement Benefits\u201d dated\nJanuary 19, 2017, which was furnished for use in connection\nwith a divorce. The statement reflected an estimate of Stacy\u2019s\ncurrent monthly benefit based upon employment with the rail-\nroad through December 1, 2015, assuming that he were now\nretired and entitled to payment of benefits. It showed the fol-\nlowing monthly railroad benefit amounts:\n Tier I railroad retirement benefit component . . .\u2009\u2009\u2009\u2009\t$956.00\n Divisible railroad retirement benefit components\n (Tier II, supplemental annuity, dual benefits) . . . $253.50\n Total monthly railroad retirement benefits . . . $1,209.50\n Caution: The Tier I benefit component is not subject\n to division, and the Railroad Retirement Board will not\n recognize any property division made with respect to it.\n The statement contained a section addressing the \u201cRailroad\nRetirement Divorced Spouse Benefit Estimate.\u201d That section\nprovided: \u201cAssuming current entitlement under the Railroad\nRetirement Act, the divorced spouse benefit for the spouse\n\f - 908 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\nof this railroad employee would be an estimated $441.00 per\nmonth, effective May 1, 2037, minus any social security ben-\nefits for the same month.\u201d\n Attorney Fees\n Sharon informed Stacy that she was \u201cnot going to deal with\nhim\u201d and that any communications had to go through their\nattorneys. According to Sharon, the parties cannot \u201cget along\u201d\nand the police had been called five or six times to \u201ckeep the\npeace.\u201d Stacy testified that he had incurred significant attorney\nfees to obtain parenting time and to obtain access to personal\nproperty. He testified he incurred attorney fees unnecessarily,\nand an exhibit showed his fees to be $14,982.50 prior to trial.\nSharon\u2019s attorney fees amounted to $13,867.75.\n Decree\n The court dissolved the parties\u2019 marriage. It specifically\nfound Stacy\u2019s testimony to be more credible than the testimony\nof Sharon. The court characterized the matter as \u201cextremely\ncontentious,\u201d explaining:\n The parties have involved law enforcement multiple\n times, they have each requested temporary relief from the\n court including motions for temporary custody, parenting\n time, access to the marital home, possession of personal\n property, payment of expenses and support issues. They\n have each said and done things not becoming including\n but not being limited to name calling. The parties have\n made it very clear to one another, and to the Court, that\n they are not able to get along.\n The court awarded the parties shared legal and physical\ncustody of the children. It adopted the parenting time sched-\nule proposed by Stacy, which awarded Stacy regular parent-\ning time on the same days set forth in the temporary order.\nThe court ordered each party to be responsible for one-half\nof the reasonable and necessary medical expenses of the\nchild and of any mutually agreed-upon expenses for the\nchild\u2019s activities.\n\f - 909 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\n The court awarded Sharon as her sole and separate property\nher 401K and pension and her Nebraska Public Employees\nRetirement Systems account. It awarded Stacy as his sole and\nseparate property his Union Pacific Railroad pension and his\n401K. The court entered judgment in favor of Sharon in the\namount of $50,019 and ordered that Sharon pay Stacy $9,000\nfor his attorney fees.\n Following the court\u2019s denial of Sharon\u2019s timely motion for\nnew trial and motion to alter or amend, she brought this timely\nappeal. We moved the case to our docket.1\n ASSIGNMENTS OF ERROR\n Sharon assigns that the court erred in (1) interpreting federal\nlaw regarding retirement benefits that may be available for\nequitable distribution, (2) awarding joint custody and equal\nparenting time, (3) failing to allocate child expenses, and (4)\nawarding attorney fees to Stacy.\n STANDARD OF REVIEW\n [1] In a marital dissolution action, an appellate court reviews\nthe case de novo on the record to determine whether there has\nbeen an abuse of discretion by the trial judge. This standard\nof review applies to the trial court\u2019s determinations regard-\ning custody, child support, division of property, alimony, and\nattorney fees.2\n [2] Statutory interpretation is a question of law, which an\nappellate court resolves independently of the trial court.3\n ANALYSIS\n R etirement Benefits\n Retirement pensions for railroad employees are governed\nby federal law. The Railroad Retirement Act of 19744 provides\n\n1\n See Neb. Rev. Stat. \u00a7 24-1106(3) (Cum. Supp. 2018).\n2\n Wiedel v. Wiedel, 300 Neb. 13, 911 N.W.2d 582 (2018).\n3\n Gerber v. P & L Finance Co., 301 Neb. 463, 919 N.W.2d 116 (2018).\n4\n 45 U.S.C. \u00a7 231 et seq. (2012).\n\f - 910 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\ntwo tiers of benefits.5 Tier I benefits correspond to those an\nemployee would receive if covered by the Social Security\nAct.6 Tier II benefits are like a private pension, and the ben-\nefits are tied to earnings and career service.7 \u201cIn the past,\ncourts were prohibited from awarding one spouse an interest\nin benefits to which the other spouse became entitled under\nthe Railroad Retirement Act.\u201d8 But Congress amended the act,\nand the Railroad Retirement Board must \u201chonor a decree of\ndivorce characterizing tier II benefits as property subject to\ndistribution.\u201d9 Tier I benefits remain excluded from consider-\nation as divisible marital property.10\n [3] In dissolution proceedings, the trial court has broad\ndiscretion in valuing and dividing pension rights between the\nparties.11 Here, the court awarded each party his or her own\n401K and pension as that party\u2019s sole and separate property.\nSharon argues that the court erred in interpreting federal\nlaw regarding retirement benefits available for equitable dis-\ntribution and that the court should have equitably divided\nStacy\u2019s tier II pension benefits. But it appears that the court\u2019s\nawarding each party his or her own pension was an effort to\nequitably divide the entire marital estate: an effort unaided\nby any evidence as to a present dollar value for either pen-\nsion. The record does reflect that Sharon\u2019s pension would\namount to approximately $250 per month, while the tier II\ncomponent of Stacy\u2019s pension would be $253.50 per month\nfor \u201creduced age\u201d or $360 per month for \u201cfull age and serv\u00ad\nice annuity.\u201d The record does not show whether Sharon\u2019s\n\n 5\n See Hisquierdo v. Hisquierdo, 439 U.S. 572, 99 S. Ct. 802, 59 L. Ed. 2d 1\n (1979).\n 6\n See id.\n 7\n See id.\n 8\n Shearer v. Shearer, 270 Neb. 178, 181, 700 N.W.2d 580, 584 (2005).\n 9\n Id., citing 45 U.S.C. \u00a7 231m(b)(2) (2000), and 20 C.F.R. \u00a7 295.1 (2005).\n10\n See McGraw v. McGraw, 186 W. Va. 113, 411 S.E.2d 256 (1991).\n11\n Webster v. Webster, 271 Neb. 788, 716 N.W.2d 47 (2006).\n\f - 911 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\nmonthly pension amount is \u201creduced age.\u201d Either way, we\nfind no abuse of discretion by the court in awarding Stacy\nhis railroad pension.\n Sharon also contends that the court erroneously assumed\nshe would receive a divorced spouse annuity. In connection\nwith awarding each party his or her own pension, the court\nexplained:\n In so ordering, the Court notes that as it currently stands,\n [Sharon] shall receive a substantial sum from Union\n Pacific as a divorced spouse pension. [Stacy\u2019s] pension\n (employee annuity) amount shall be his and his alone. To\n allow [Sharon] to receive her entire share of the divorced\n spouse pension (ranging between $441 and $679), plus\n half of his pension ($1209 divided by 2 = $604.50 or\n $17[1]9 divided by 2 = $859.50) would result in her pen-\n sion payout being nearly 2/3s of the total. Such a result\n is inequitable. In reaching this conclusion, the Court has\n taken into account that [Sharon] shall receive all of her\n $250 monthly pension from [her employer].\n We agree with Sharon that there is no guarantee she will\nreceive \u201ca substantial sum from Union Pacific as a divorced\nspouse pension.\u201d To be eligible, a divorced wife must not\nbe married12 and must not be entitled to Social Security ben-\nefits greater than the divorced spouse annuity.13 This error\nfavored Stacy. But, on the other hand, the court\u2019s calculation\nof the divisible portion of Stacy\u2019s pension erroneously favored\nSharon. Because federal law precludes marital division of tier I\nbenefits, the correct numbers for Stacy\u2019s tier II pension would\nhave been between $253.50 and $360 instead of $1,209 and\n$1,719. Thus, even assuming that Sharon would be entitled to\nno divorced spouse annuity, we find no abuse of discretion in\nthe court\u2019s equitable division of the marital estate.\n\n12\n See 45 U.S.C. \u00a7 231a(c)(4)(ii).\n13\n See, 45 U.S.C. \u00a7 231a(f)(2); 20 C.F.R. \u00a7 226.30(f) (2018).\n\f - 912 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\n Custody and Parenting Time\n The court awarded the parties shared legal and physical cus-\ntody and equal parenting time. Sharon argues that the arrange-\nment is not in the younger child\u2019s best interests and that the\ncourt should have awarded her primary custody and parent-\ning time.\n [4] Nebraska law explicitly provides that a court shall con-\nsider \u201c[t]he desires and wishes of the minor child, if of an age\nof comprehension but regardless of chronological age, when\nsuch desires and wishes are based on sound reasoning.\u201d14 We\nhave held that while the wishes of a child are not controlling in\nthe determination of custody, if a child is of sufficient age and\nhas expressed an intelligent preference, the child\u2019s preference\nis entitled to consideration.15 In our de novo review, we have\nconsidered the child\u2019s age, her preference, and her reasoning.\nHer testimony concerning her relationship with each parent and\ncustody preference did not contradict the parties\u2019 testimony\nthat they each had a good relationship with the child.\n [5,6] In a review de novo on the record, an appellate court\nreappraises the evidence as presented by the record and reaches\nits own independent conclusions with respect to the matters\nat issue.16 In a marital dissolution action, we conduct such a\nreview to determine whether the trial judge abused its discre-\ntion.17 A judicial abuse of discretion exists if the reasons or rul-\nings of a trial judge are clearly untenable, unfairly depriving a\nlitigant of a substantial right and denying just results in matters\nsubmitted for disposition.18\n Here, both parties are fit and proper parents. The court\nattempted to fashion a parenting time schedule that would\n\n14\n Neb. Rev. Stat. \u00a7 43-2923(6)(b) (Reissue 2016).\n15\n See Vogel v. Vogel, 262 Neb. 1030, 637 N.W.2d 611 (2002).\n16\n Connolly v. Connolly, 299 Neb. 103, 907 N.W.2d 693 (2018).\n17\n See id.\n18\n Id.\n\f - 913 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\naccommodate Stacy\u2019s rather unusual work schedule, minimize\nthe communication and coordination between the parties, and\nstill serve the child\u2019s best interests. The court observed that\nSharon\u2019s parenting plan\u2014which would allow Stacy parenting\ntime on four overnights twice a month but would vary on days\nof the week and days of the calendar\u2014would require the par-\nties to frequently communicate and cooperate in order to avoid\nconflict. The court reasoned:\n It is in the best interest of the minor children that they\n have a good, strong, positive relationship with each par-\n ent. To have the same, it is necessary for each parent to\n have significant periods of time with the minor children.\n The best way to ensure the fewest exchanges for the\n minor child and minimize the contact between the parties\n is to set a schedule based on the known factors including\n [Stacy\u2019s] work schedule. By doing so, it is established\n exactly what the parenting time schedule is and eliminates\n the strong possibility of further conflict or disagreement\n between the parties.\nAlthough the court referred to \u201cchildren,\u201d from the context,\nit is clear that the court\u2019s decree addressed only the younger\nchild.\n Here, the court decreed \u201cshared\u201d rather than \u201cjoint\u201d cus-\ntody. But, at least here, that seems to be a matter of semantics.\nAnd we recognize that we have said joint physical custody\nmust be reserved for those cases where, in the judgment\nof the trial court, the parents are of such maturity that the\narrangement will not operate to allow the child to manipu-\nlate the parents or confuse the child\u2019s sense of direction,\nand will provide a stable atmosphere for the child to adjust,\nrather than perpetuating turmoil or custodial wars.19 While\ngenerally sensible, this is not a hard-and-fast rule. A statute\nspecifically provides that a court may order joint custody \u201cif\n\n19\n See Donald v. Donald, 296 Neb. 123, 892 N.W.2d 100 (2017).\n\f - 914 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\nthe court specifically finds, after a hearing in open court, that\njoint physical custody or joint legal custody, or both, is in the\nbest interests of the minor child regardless of any parental\nagreement or consent.\u201d20 And we have affirmed a trial court\u2019s\ndecision not to modify an award of joint legal custody even\nthough the evidence showed that the parties continued to have\ndifficulty communicating and cooperating with one another.21\nIn light of Stacy\u2019s unusual work schedule, the court\u2019s favor-\nable contrast of his credibility and reasonableness to Sharon\u2019s,\nand the child\u2019s relationship with both parents, we cannot say\nthat the court\u2019s award of shared custody and parenting time\nis untenable.\n\n A llocation of Expenses\n Because we are affirming the award of shared custody, we\nconsider Sharon\u2019s claim that the court erred in failing to allo-\ncate expenses. Sharon argues that except for medical expenses\nprovided in the decree, the court did not require that \u201call rea-\nsonable and necessary expenses of the child, including but not\nlimited to clothing and extracurricular activities, be equally\ndivided and not require any mutual agreement.\u201d22\n A statute requires a decree to address the parties\u2019 respon-\nsibility for certain child expenses. \u201cA decree of dissolution\n. . . shall incorporate financial arrangements for each party\u2019s\nresponsibility for reasonable and necessary medical, dental,\nand eye care, medical reimbursements, day care, extracurricu-\nlar activity, education, and other extraordinary expenses of the\nchild and calculation of child support obligations.\u201d23 And Neb.\nCt. R. \u00a7 4-212 (rev. 2011) provides that when child support\n\n20\n See Neb. Rev. Stat. \u00a7 42-364(3)(b) (Cum. Supp. 2018).\n21\n See State on behalf of Jakai C. v. Tiffany M., 292 Neb. 68, 871 N.W.2d\n 230 (2015).\n22\n Brief for appellant at 23 (emphasis in original).\n23\n Neb. Rev. Stat. \u00a7 42-364.17 (Reissue 2016).\n\f - 915 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\nis to be calculated using worksheet 3, \u201call reasonable and\nnecessary direct expenditures made solely for the [child] such\nas clothing and extracurricular activities shall be allocated\nbetween the parents.\u201d\n The decree, together with attachments, allocated the neces-\nsary expenses. As Sharon observes, the decree ordered the\nparties to each be responsible for one-half of the reasonable\nand necessary medical expenses. The parenting plan addition-\nally required the parties to each \u201cbe responsible for the cloth-\ning, personal property, food and entertainment of the children\nduring their own parenting time\u201d and to \u201cpay one-half of any\nmutually agreed upon expenses for activities of the minor\nchildren so long as the same is clearly stated and agreed to in\nwriting prior to such expense being incurred.\u201d\n Although Sharon\u2019s brief was not entirely clear, she con-\nfirmed that she was arguing that the district court should not\nhave made any of the expenses for extracurricular activities\nsubject to mutual agreement. Or, stated another way, that the\ndecree should have required one parent to pay one-half of the\nchild\u2019s expenses for extracurricular activities authorized solely\nby the other parent. We do not agree that \u00a7 4-212 requires a\ntrial judge to grant one parent carte blanche to compel the other\nparent to pay (either wholly or partially) for every conceivable\nextracurricular activity for a child. Certainly, the parties may\nagree to divide extracurricular activities in that way.24 But here,\nthey did not agree.\n Section 4-212 contemplates allocation between the parents\nof \u201call reasonable and necessary direct expenditures made\nsolely for the [child] such as . . . extracurricular activities.\u201d\nThe record here does not establish that all of the child\u2019s poten-\ntial expenses for extracurricular activities met that standard.\nAnd given the acrimonious dispute on virtually every issue\nand the court\u2019s assessment of Sharon\u2019s credibility regarding an\n\n24\n See Moore v. Moore, ante p. 588, 924 N.W.2d 314 (2019).\n\f - 916 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\nextracurricular activity, the court could reasonably anticipate\nthat the reasonableness and necessity of such expenses would\nbe another source of contention\u2014particularly if the court per-\nmitted Sharon to unilaterally dictate which activities would be\npermitted. Although Sharon filed a motion to alter or amend\nthe decree, her motion did not specify any particular expenses\nto be so allocated. The tenor of the court\u2019s decree shows that it\ntrusted Stacy, but not Sharon, to be reasonable. If subsequent\nevents show that Stacy responds unreasonably, the court has\nthe tools to compel an equitable solution. We conclude that the\ncourt did not abuse its discretion in allocating reasonable and\nnecessary expenses of the child.\n Attorney Fees\n Sharon contends that the court abused its discretion by order-\ning her to pay Stacy $9,000 in attorney fees. Stacy requested\nsuch an award, but the decree did not specifically explain why\nthe court imposed these fees. Nonetheless, from the court\u2019s\nspecific findings, we discern a legal rationale.\n [7] Courts have the inherent power to award attorney fees in\ncertain unusual circumstances amounting to conduct during the\ncourse of litigation which is vexatious, unfounded, and dila-\ntory, such that it amounts to bad faith.25 The decree set forth\nspecific findings identifying Sharon\u2019s conduct.\n The court found that Sharon \u201cdoused in diesel fuel\u201d some\nof Stacy\u2019s clothing and destroyed Stacy\u2019s grandmother\u2019s dishes\nby \u201cintentionally shooting [them] with a gun.\u201d Sharon admitted\nthat at the beginning of the proceeding, she told Stacy repeat-\nedly in text messages that because he was the one who left, he\nwas going to have to \u201cpay for it.\u201d Clearly, this conduct was,\nand was intended to be, vexatious. There was evidence that\nStacy incurred attorney fees attempting to obtain parenting\ntime and access to personal property and relating to the filing\nof tax returns.\n\n25\n Fetherkile v. Fetherkile, 299 Neb. 76, 907 N.W.2d 275 (2018).\n\f - 917 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\n The court\u2019s decree provided a number of examples why\nit found Stacy\u2019s testimony to be more credible, recounting\nnumerous instances where Sharon\u2019s testimony was unfounded.\nAccording to the decree:\n [Sharon\u2019s] testimony regarding the creation of the calen-\n dars she purported to have been created simultaneously\n with the events proved to be inaccurate in that the cal-\n endars were printed in March of 2017 and purported to\n reflect events dating back six months prior[, and] was\n not credible. [Sharon\u2019s] testimony regarding her lack of\n knowledge of the birthdate, approximate age or address\n of the gentleman she had been dating for seven months\n prior was suspect. [Sharon\u2019s] testimony that [the older\n child] lived in the marital home through the date of trial\n was admitted to be false on cross examination when she\n admitted that [the older child] had not stayed overnight\n in the home since May of 2017. [Sharon\u2019s] testimony\n that [the older child] has never stayed overnight with\n [Stacy] since separation was admitted to be false on\n cross-\u00adexamination. [Sharon\u2019s] testimony that she did all\n of the transporting of [the younger child] during the mar-\n riage was also admitted to be false on cross examination\n when she admitted that when [Stacy] was not working,\n he picked [the child] up from school each day. [Sharon\u2019s]\n testimony in her affidavit for temporary custody and her\n matching testimony at trial that [Stacy] promised to pay\n one-half of the current cheer bill of $260 a month was\n also admitted by her on cross examination to be false\n when she admitted that [Stacy] told her he could not\n afford to pay the increased fee of $260 a month (com-\n pared to the $110 a month) for [the cheer bill] and further\n she admitted that he had never agreed to pay it.\n The record supports Stacy\u2019s testimony that the attorney\nfees he incurred were often unnecessary and resulted from\nSharon\u2019s vexatious, unfounded, and dilatory conduct. Having\n\f - 918 -\n Nebraska Supreme Court A dvance Sheets\n 302 Nebraska R eports\n LENERS v. LENERS\n Cite as 302 Neb. 904\n\nreviewed the record along with the parties\u2019 arguments, we can-\nnot say that the court\u2019s award of attorney fees was an abuse\nof discretion.\n CONCLUSION\n Having reviewed the record de novo, we conclude that the\ncourt did not abuse its discretion in awarding Stacy his railroad\npension, ordering shared custody and parenting time, address-\ning reasonable and necessary child expenses, and awarding\nattorney fees. We therefore affirm the decree.\n A ffirmed.\n\f"} -{"text": "236 F.3d 1215 (10th Cir. 2001)\nBILLY RAY BATTENFIELD, PETITIONER-APPELLANT,V.GARY L. GIBSON, WARDEN, OKLAHOMA STATE PENITENTIARY, RESPONDENT-APPELLEE.\nNo. 99-7096\nU.S. Court of Appeals, Tenth Circuit\nJanuary 03, 2001\n\nAppeal from United States District Court for the Eastern District of Oklahoma (D.C. No. 98-CV-36-B)[Copyrighted Material Omitted][Copyrighted Material Omitted]\nRobert W. Jackson (Steven M. Presson with him on the brief), Jackson & Presson, P.C., Norman, Oklahoma, for the appellant.\nSeth S. Branham, Assistant Attorney General (w.a. Drew Edmondson, Attorney General, with him on the brief), Oklahoma City, Oklahoma, for the appellee.\nBefore Kelly, Briscoe, and Lucero, Circuit Judges.\nBriscoe, Circuit Judge.\n\n\n1\nPetitioner Billy Ray Battenfield, an Oklahoma state prisoner convicted of first degree murder and sentenced to death, appeals the district court's denial of his 28 U.S.C. \u00a7 2254 petition for writ of habeas corpus. We exercise jurisdiction pursuant to 28 U.S.C. \u00a7 1291, and reverse and remand with instructions to grant the writ as to Battenfield's death sentence, subject to the state district court conducting a new sentencing trial or vacating Battenfield's death sentence and imposing a lesser sentence consistent with law.\n\nI.\n\n2\nOn the evening of April 22, 1984, Battenfield and his girlfriend Virginia Jackson, accompanied by Jackson's sixteen-year-old son B.G., went to the 108 Club in Muskogee, Oklahoma, and joined a group of people consisting of Donald Cantrell, brothers William and Robert Bechtol, Robert Bechtol's daughter Linda Bechtol, her common-law husband Melvin Battiest, and Grace Alford. Cantrell used money from a bank bag to purchase beer for several people in the group. At approximately 10:00 p.m., most of the group decided to continue their partying at nearby Fort Gibson Lake. Battenfield, Battiest, and Cantrell left in Cantrell's truck, with Cantrell driving. Jackson, B.G., Alford, and Linda Bechtol followed in Battenfield's car.\n\n\n3\nThe group stopped at a convenience store to purchase more beer and then drove to an area of the lake known as Wahoo Bay. Battenfield, Battiest, and Cantrell got out of the truck and stood outside drinking beer. Cantrell walked to the passenger side of Battenfield's car and encouraged the occupants to get out and join the party, but they declined because it was cold. Battenfield walked to the driver's side of the car and spoke to Jackson, who handed something to Battenfield. Battenfield walked to the rear of the car, apparently opened and closed the trunk, and then returned to the driver's side of the car and handed something to Jackson. There is also evidence that at this approximate time, Battiest approached the passenger side of the car and briefly spoke to Bechtol. Shortly thereafter, the occupants of the car drove some distance away from the truck to restroom facilities. Alford and Bechtol spent approximately ten minutes inside the restroom. After they returned to the car, the occupants sat in the car for approximately five minutes before slowly driving toward the truck, stopping once on the way for another ten to fifteen minutes.\n\n\n4\nThere is conflicting evidence concerning what transpired when the occupants of the car returned. Jackson testified that she observed Battenfield standing beside the truck, but did not see Battiest or Cantrell. Bechtol testified that she observed Battiest standing by the truck, but did not see Battenfield or Cantrell. According to Alford, none of the men were in sight when they first returned to the truck. All of the occupants of the car agreed that, after approximately five to ten minutes, Battenfield came running toward the car and told Jackson: \"We're going to Tulsa. Take her [Alford] home. He [Cantrell] passed out.\" Tr. at 1164. Battenfield and Battiest got into Cantrell's truck, with Battenfield on the driver's side. Cantrell was not in sight.\n\n\n5\nOn the way back to Muskogee, the vehicles stopped at a convenience store where Battenfield purchased gasoline for both vehicles and either Bechtol or Battiest purchased some beer (neither of these two individuals had money prior to driving to Wahoo Bay). After dropping off Alford, Bechtol, and Battiest at their homes, Battenfield, Jackson and B.G. left Muskogee, with Battenfield again driving Cantrell's truck and Jackson again driving the car. They stopped at another convenience store and B.G., at Battenfield's direction, purchased one dollar's worth of gasoline in a jug. They then drove to Broken Arrow, Oklahoma, where Battenfield abandoned Cantrell's truck and, using the gasoline from the jug, set the truck on fire. The car broke down on the way back to Muskogee and a highway patrol officer helped Battenfield jump-start the car.\n\n\n6\nCantrell's body was found the next day at Wahoo Bay. According to the autopsy results, Cantrell sustained at least three blunt-force injuries to the head and chest, consistent with blows from a stick, brick, rock, foot, or tire iron. An injury to the left side of his forehead caused multiple fractures to Cantrell's skull bone, as well as bruising and subsequent hemorrhaging of his brain. According to the forensic pathologist who performed the autopsy, the injury would likely have rendered Cantrell unconscious. An injury to the right side of Cantrell's back involved multiple rib fractures and a punctured lung. The autopsy results indicate Cantrell likely died within minutes of sustaining this latter injury. The autopsy results also indicated Cantrell suffered various post-mortem abrasions (perhaps from being dragged along the ground from one area to another).\n\n\n7\nThe highway patrol officer who helped Battenfield jump-start the car testified that Battenfield was wearing Cantrell's coat. On April 23, 1984, Battenfield was again observed wearing Cantrell's coat, and he allegedly admitted to B.G. that he hit Cantrell one time on the head with a tire iron. Battenfield was arrested for the murder of Cantrell on April 24, 1984. Hairs from Cantrell's head were found on Battenfield's jeans and stocking cap (both of which Battenfield was wearing on the night of the murder).\n\n\n8\nBattenfield's jury trial began on February 25, 1985. Battenfield did not testify or present any evidence in his defense. The jury was instructed on the lesser included offenses of second degree murder and first degree manslaughter, but found Battenfield guilty of first degree murder. The state asserted the existence of four aggravating factors in the second stage of trial: (1) Battenfield's previous felony conviction involved the use or threat of violence to the person; (2) the murder was especially heinous, atrocious, or cruel; (3) the murder and the destruction of Cantrell's truck were effected for the purpose of avoiding or preventing lawful arrest or prosecution; and (4) there was a probability that Battenfield would constitute a continuing threat to society. The state incorporated by reference the evidence presented during the first stage of trial. The only additional evidence presented by the prosecution was a copy of a judgment outlining a previous conviction in 1978 for assault and battery with a deadly weapon. Battenfield presented no evidence in mitigation. After deliberating for approximately one hour and forty-five minutes, the jury fixed Battenfield's sentence at death. In doing so, the jury found the existence of two aggravating factors: (1) the murder was heinous, atrocious, or cruel, and (2) Battenfield was a continuing threat to society. On March 19, 1985, the trial court formally sentenced Battenfield to death.1\n\n\n9\nBattenfield, represented by new counsel, filed a direct appeal asserting twelve propositions of error. The Oklahoma Court of Criminal Appeals (OCCA) affirmed Battenfield's conviction and sentence. Battenfield v. State, 816 P.2d 555 (Okla. Crim. App. 1991) (Battenfield I), cert. denied, 519 U.S. 839 (1996). In doing so, the OCCA found there was insufficient evidence to support the jury's finding that the murder was especially heinous, atrocious, or cruel. However, after reweighing the remaining valid aggravating factor (the continuing threat factor) against the mitigating evidence, the OCCA affirmed Battenfield's death sentence. Battenfield's petition for rehearing was denied. Battenfield v. State, 826 P.2d 612 (Okla. Crim. App. 1991) (Battenfield II). Battenfield's petition for writ of certiorari was denied on March 23, 1992. Battenfield v. Oklahoma, 503 U.S. 943 (1992).\n\n\n10\nOn February 14, 1995, Battenfield filed an application for post- conviction relief with the state trial court, asserting twelve grounds for relief. In November and December 1996, the court conducted an evidentiary hearing on two of the issues asserted by Battenfield, including his claim that his trial counsel was ineffective for failing to investigate and present mitigating evidence during the penalty phase of trial. The court ultimately denied the application for post- conviction relief on May 13, 1997. Battenfield's appeal of the decision was denied on January 21, 1998. Battenfield v. State, 953 P.2d 1123 (Okla. Crim. App. 1998) (Battenfield III).\n\n\n11\nIn February 1996, Battenfield filed a motion in federal district court requesting appointment of counsel to represent him in a federal habeas proceeding and seeking authorization for legal research expenses. Nearly two years later, on January 26, 1998, Battenfield filed a second motion for appointment of counsel.2 The motions were granted on February 9, 1998, and Battenfield's petition for writ of habeas corpus was filed on June 15, 1998. On May 5, 1999, the district court denied Battenfield's petition. Pursuant to Battenfield's request, the district court granted him a certificate of appealability (COA) with respect to four issues: (1) ineffective assistance of trial counsel during the second stage proceedings; (2) improper removal of a venire person by the trial court for cause; (3) prosecutorial misconduct; and (4) cumulative assessment of any of these errors. This court has granted a COA on an additional issue: whether the evidence presented at trial was sufficient to prove that Battenfield was a continuing threat to society.\n\nII.\n\n12\nBecause Battenfield's federal habeas petition was filed after the effective date of the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), it is governed by the provisions of the AEDPA. Wallace v. Ward, 191 F.3d 1235, 1240 (10th Cir. 1999), cert. denied, 120 S. Ct. 222 (2000). Under the AEDPA, the appropriate standard of review for a particular claim hinges on the treatment of that claim by the state courts. If a claim was not decided on the merits by the state courts (and is not otherwise procedurally barred), we may exercise our independent judgment in deciding the claim. See LaFevers v. Gibson, 182 F.3d 705, 711 (10th Cir. 1999). In doing so, we review the federal district court's conclusions of law de novo and its findings of fact, if any, for clear error. Id. If a claim was adjudicated on its merits by the state courts, the petitioner will be entitled to federal habeas relief only if he can establish that the state court decision \"was contrary to, or involved an unreasonable application of, clearly established Federal law, as determined by the Supreme Court of the United States,\" 28 U.S.C. \u00a7 2254(d)(1), or \"was based on an unreasonable determination of the facts in light of the evidence presented in the State court proceeding.\" Id. \u00a7 2254(d)(2). \"Thus, we may grant the writ if we find the state court arrived at a conclusion opposite to that reached by the Supreme Court on a question of law; decided the case differently than the Supreme Court has on a set of materially indistinguishable facts; or unreasonably applied the governing legal principle to the facts of the prisoner's case.\" Van Woudenberg v. Gibson, 211 F.3d 560, 566 (10th Cir. 2000) (citing Williams v. Taylor, 120 S. Ct. 1495, 1523 (2000)).\n\nIII.\n\n13\nImproper removal of a venire person by the trial court for cause\n\n\n14\nBattenfield alleges the trial court violated his Sixth and Fourteenth Amendment right to trial by an impartial jury when it excused for cause a venire member who stated in response to voir dire questioning by the trial court that he could not impose the death penalty \"without doing violence to his conscience.\" Tr. at 37.\n\n\n15\nIn Witherspoon v. Illinois, 391 U.S. 510 (1968), the Supreme Court held that a state \"infringes a capital defendant's right under the Sixth and Fourteenth Amendments to trial by an impartial jury when it excuses for cause all those members of the venire who express conscientious objections to capital punishment.\" See Wainwright v. Witt, 469 U.S. 412, 416 (1985). The Court also recognized a \"State's legitimate interest in excluding those jurors whose opposition to capital punishment would not allow them to view the proceedings impartially, and who therefore might frustrate administration of a State's death penalty scheme.\" Id. Balancing these interests, the Court has held \"a juror may not be challenged for cause based on his views about capital punishment unless those views would prevent or substantially impair the performance of his duties as a juror in accordance with his instructions and his oath.\" Id. at 420. In applying this standard, a venire member's bias need not \"be proved with `unmistakable clarity.'\" Id. at 424. Rather, it is sufficient if \"the trial judge is left with the definite impression that a prospective juror would be unable to faithfully and impartially apply the law.\" Id. at 426. A trial judge's determination of a venire member's bias under this standard is a factual finding entitled to a presumption of correctness. See id. at 428-29 (pre-AEDPA case); Moore v. Gibson, 195 F.3d 1152, 1168 (10th Cir. 1999) (AEDPA case), cert. denied, 120 S. Ct. 2206 (2000).\n\n\n16\nHere, the trial court asked each potential juror the following question: \"If selected as a juror in a case where the law and the evidence warrants, could you, without doing violence to your [conscience], recommend the death penalty?\" Tr. at 24. All of the venire members except Robert Elliott answered in the affirmative. The following colloquy occurred between the trial court and Elliott:\n\n\n17\nTHE COURT: Sir, you understand that the Defendant is charged with Murder in the First Degree. The law provides that a person convicted of Murder in the First Degree shall be punished by death or by imprisonment for life. It is your duty to determine whether the Defendant is not guilty or guilty of Murder in the First Degree. If you find the Defendant guilty of Murder in the First Degree, your duty is to determine whether or not, considering the evidence, you should recommend death. If selected as a juror in a case where the law and the evidence warrants, could you, without doing violence to your [conscience], recommend the death penalty?\n\n\n18\nMR. ELLIOTT: No, sir.\n\n\n19\nTHE COURT: You understand that if the evidence is such, and what this instruction is saying, that if the law says that it's to be considered one way or the other, your statement is that you just can't consider the death penalty at all?\n\n\n20\nMR. ELLIOTT: Yes, sir.\n\n\n21\nId. at 37-38. Based upon this discussion, the following proceedings were conducted outside the hearing of the prospective jurors:\n\n\n22\nTHE COURT: You move for cause?\n\n\n23\nMR. SPERLING [the prosecutor]: (Nods his head in the affirmative.)\n\n\n24\nTHE COURT: You want to make a record?\n\n\n25\nMR. SHOOK [defense counsel]: Your Honor, we would object and request that we be allowed to voir dire the witness concerning his ability.\n\n\n26\nTHE COURT: You may. Mr. Shook, I will allow you to ask a few voir dire questions.\n\n\n27\nId. at 38. The following proceedings then occurred:\n\n\n28\nMR. SHOOK: Mr. Elliott, to begin with I'm sorry but I didn't catch your address where you live.\n\n\n29\nMR. ELLIOTT: Coweta.\n\n\n30\nTHE COURT: Now, if you wish, just ask as to the question that was asked by the Court. I'm not just tendering the prospective juror for just general voir dire questions. It has to do with the question that was asked by the Court.\n\n\n31\nMR. SHOOK: I will, Your Honor.\n\n\n32\nTHE COURT: Okay.\n\n\n33\nMR. SHOOK: Do you understand, sir, that you will receive a set of instructions, if the trial gets to a second stage, if you would find the Defendant guilty of Murder in the First Degree, there are alternative forms of punishment. Did you understand that?\n\n\n34\nMR. ELIOTT: Yes, sir.\n\n\n35\nMR. SHOOK: One of those alternatives being life in prison, one of those alternatives being the death penalty?\n\n\n36\nMR. ELLIOTT: Yes, sir.\n\n\n37\nMR. SHOOK: Now, you understand that the instructions are the law that you're to apply in this case?\n\n\n38\nMR. ELLIOTT: Yes, sir.\n\n\n39\nMR. SHOOK: Okay. Can you consider the law that the Court submits to you?\n\n\n40\nMR. ELLIOTT: Yes, sir.\n\n\n41\nMR. SHOOK: Okay. Can you consider alternative forms of punishment that the Court instructs you on?\n\n\n42\nMR. ELLIOTT: Yes, sir.\n\n\n43\nMR. SHOOK: Can you follow that instruction? Can you follow the law where the facts warrant them?\n\n\n44\nMR. ELLIOTT: Yes, sir.\n\n\n45\nMR. SHOOK: Okay. Knowing that, can you consider the death penalty as an alternative to punishment if you're so instructed?\n\n\n46\nMR. ELLIOTT: I don't know if I understand. If the law says death, and I would agree with that, or -\n\n\n47\nMR. SHOOK: No. Can you consider the instruction on the death penalty that the Court may or may not submit?\n\n\n48\nMR. ELLIOTT: I could consider it, yes.\n\n\n49\nMR. SHOOK: Okay. Nothing further.\n\n\n50\nTHE COURT: Any questions?\n\n\n51\nMR. SPERLING: None, Your Honor.\n\n\n52\nTHE COURT: My question to you again is: Sir, if you find the Defendant guilty of Murder in the First Degree, your duty is to determine whether or not, considering the evidence, you should recommend death. If selected as a juror in a case where the law and the evidence warrants-that's just what Mr. Shook asked-could you, without doing violence to your [conscience], recommend the death penalty?\n\n\n53\nMR. ELLIOTT: No, sir, I couldn't.\n\n\n54\nTHE COURT: You may step down for cause. Exception allowed to the Defendant.\n\n\n55\nId. at 38-40.\n\n\n56\nOn direct appeal, Battenfield asserted that the trial court erred by striking Elliott from the jury panel. The OCCA rejected this assertion on the following grounds:\n\n\n57\nWe agree with [Battenfield's] counsel that trial judges should avoid asking a potential juror whether he or she could recommend the death penalty \"without doing violence to your conscience.\" The use of such terms is at best confusing. While the trial judge's question to Elliott \"may not have been ideal, we cannot conclude that it was inconsistent with the `substantial impairment' test articulated in Witt.\" Despite the trial judge's use of the confusing phrase \"without doing violence to your conscience,\" he inquired further into the depth of Elliott's convictions by asking whether Elliott's position was that he could not \"consider the death penalty at all?\" to which Elliott responded, \"Yes, sir.\" We recognize that \"not all who oppose the death penalty are subject to removal for cause in capital cases; those who firmly believe the death penalty is unjust may nevertheless serve as jurors in capital cases so long as they state clearly that they are willing to temporarily set aside their own beliefs in deference to the rule of law.\" However, at no point in time did Mr. Elliott state, nor was he asked by defense counsel, whether he could temporarily set aside his personal beliefs in deference to the law and recommend the death penalty where appropriate under the facts and the law. Considering the entire record surrounding Elliott's exclusion, including trial counsel's attempted rehabilitation, and giving appropriate deference to the trial judge, we hold that Elliott's responses \"sufficiently demonstrated that his beliefs about capital punishment would `substantially impair' his ability to serve as a juror.\"\n\n\n58\nBattenfield I, 816 P.2d at 559 (internal citations omitted).\n\n\n59\nWe previously have addressed the striking of venire members based upon questions and answers similar to those employed here. In Coleman v. Brown, 802 F.2d 1227 (10th Cir. 1986), the state trial court excused a prospective juror for cause based upon his answers to questions:\n\n\n60\nCourt: [I]f you were sitting on a jury and in a case where the law and the evidence warranted and you were told it was a proper case to consider the death penalty, could you, if you felt it was proper, agree to a death penalty . . . without doing violence to your own conscience?\n\n\n61\nJuror: No, I don't think I could.\n\n\n62\nCourt: In other words, you're telling me that if you find beyond a reasonable doubt that the Defendant was guilty of Murder in the First Degree and if under the law and the evidence and all the circumstances you could consider a death penalty, you tell me that you have such reservations that you just simply could under no circumstances impose a death penalty upon another human being?\n\n\n63\nJuror: I don't think I could, no.\n\n\n64\nId. at 1232. Applying the standard announced by the Supreme Court in Witt, we found \"no grounds for overturning the trial judge's decision.\" Id.\n\n\n65\nSimilarly, in Davis v. Maynard, 869 F.2d 1401, 1408 (10th Cir. 1989), vacated on other grounds sub nom. Saffle v. Davis, 494 U.S. 1050 (1990), the state trial court asked each potential juror the following question: \"In a case where the law and evidence warrant, in a proper case, could you, without doing violence to your conscience, agree to a verdict imposing the Death Penalty?\" If a venire member did not answer \"yes,\" the trial court asked:\n\n\n66\nIf you found beyond a reasonable doubt that the Defendant in this case was guilty of Murder in the First Degree and if under the evidence, facts and circumstances of the case the law would permit you to consider a sentence of death, are your reservations about the Death Penalty such that regardless of the law, the facts and the circumstances of the case, you would not inflict the Death Penalty?\n\n\n67\nId. We characterized the voir dire as \"troublesome,\" noting the trial court's \"first question to the venire members [wa]s of little relevance,\" and the second question, \"while a better attempt to incorporate the proper standard, [wa]s confusing, and . . . invite[d] ambiguous answers.\" Id. Nevertheless, affording the trial court's findings a presumption of correctness, we concluded that the trial court \"properly found the challenged venire members' view likely to `prevent or substantially impair' the performance of their duties as jurors.\" Id. at 1409.\n\n\n68\nLike the state trial courts' factual findings at issue in Davis and Coleman, the trial court's finding of bias on the part of Elliott is entitled to a presumption of correctness.3 See 28 U.S.C. \u00a7 2254(e)(1). The issue is whether Battenfield has met his burden of rebutting this presumption by clear and convincing evidence. Id. It is true, as argued by Battenfield, that the trial court's first and last questions to Elliott were inconsistent with the standard announced in Witt and therefore must be considered \"of little relevance.\" Davis, 869 F.2d at 1408. If these were the only questions posed to Elliott, there might be a basis for rejecting the trial court's finding of bias. However, the trial court's second question to Elliott (\"[Y]our statement is that you just can't consider the death penalty at all?\"), and Elliott's response (\"Yes, sir.\"), provide a sufficient basis for the trial court's finding that Elliott was biased. Defense counsel's follow-up questioning, although apparently aimed at rehabilitating Elliott, did little to demonstrate that Elliott could \"faithfully and impartially apply the law.\"\n\n\n69\nWe conclude Battenfield has failed to rebut the presumption that the trial court was correct in finding that Elliott's views would have prevented or substantially impaired the performance of his duties as a juror. Further, we conclude the OCCA's resolution of this issue (i.e., its determination that Elliott's answers clearly indicated he could not consider imposing the death penalty regardless of the evidence and the instructions) was not contrary to or an unreasonable application of Witt.\n\nProsecutorial misconduct\n\n70\nBattenfield contends the prosecutor, during closing arguments in both the first and second stages of trial, improperly commented on Battenfield's constitutional right not to testify. During the first- stage closing arguments, the prosecutor stated to the jury: \"There is no one, I repeat, there is no one who took the stand and testified that the victim, Don Cantrell, was ever anywhere near these keys [the keys to his truck which were found by a boat dock area after the murder],\" Tr. at 1323, and \"There wasn't a single witness that took the stand that indicated that there was any kind of injury to Mel Battiest or to this Defendant, Billy Ray Battenfield.\" Id. at 1403. During closing arguments in the penalty phase, the prosecutor made a similar statement: \"Have you heard, Ladies and Gentleman, any evidence whatsoever during the course of this trial that indicates that this Defendant, Billy Ray Battenfield, after he struck that first blow, did anything to intervene to save Don Cantrell's life?\" Id. at 1453. Battenfield objected to all of these comments during trial. The trial court overruled the objection to the first-stage comments, but sustained the objection to the second- stage comment.\n\n\n71\nAs part of a general challenge to a variety of comments made by the prosecutor during trial, Battenfield raised this issue on direct appeal. The OCCA rejected the issue:\n\n\n72\nMost of the comments complained of were not objected to and, in several instances where defense counsel's objectionswere sustained, the comment was stricken or the jury was admonished. Appellant attempts to characterize this case as one falling within the fundamental error rule where the combined effect of the prosecutor's actions \"was so prejudicial as to adversely affect the fundamental fairness and impartiality of the proceedings and mandate a new trial.\" While some of the comments complained of were improper and not to be condoned, most of the comments when taken in context were within the bounds of reasonable argumentation, and we cannot agree they were so grossly improper as to require reversal or modification.\n\n\n73\nBattenfield I, 816 P.2d at 562 (internal citations omitted).\n\n\n74\nIt is improper for a prosecutor to comment on a defendant's decision to refrain from testifying at trial. See Griffin v. California, 380 U.S. 609, 615 (1965). If a prosecutor's remarks \"`concern matters that could have been explained only by the accused, . . . [they] give rise to an innuendo that the matters were not explained because [petitioner] did not testify' and, thus, amount to indirect comment on the defendant's failure to testify.\" Pickens v. Gibson, 206 F.3d 988, 999 (10th Cir. 2000) (quoting United States v. Barton, 731 F.2d 669, 674 (10th Cir. 1984)). \"A prosecutor, however, `is otherwise free to comment on a defendant's failure to call certain witnesses or present certain testimony.\" Id. (quoting Trice v. Ward, 196 F.3d 1151, 1167 (10th Cir.1999), cert. denied, ___ U.S. ___, 121 S.Ct. 93, ___ L.Ed.2d ___, 2000 WL 656673 (2000)). The question is \"`whether the language used [by the prosecutor] was manifestly intended or was of such character that the jury would naturally and necessarily take it to be a comment on the defendant's right to remain silent.'\" Id. at 998 (quoting United States v. Toro-Pelaez, 107 F.3d 819, 826-27 (10th Cir. 1997)). \"Error in permitting the prosecutor to comment upon petitioner's right to silence is subject to a harmless error analysis.\" Id. (citing Brecht v. Abrahamson, 507 U.S. 619, 628-29 (1993)).\n\n\n75\nThe first-stage comments were proper. Although both were clearly intended as comments on Battenfield's failure to call certain witnesses or present certain testimony, neither concerned matters that could have been explained only by Battenfield. For example, Cantrell's whereabouts in the Wahoo Bay area on the night of the murder, including whether he was ever in close proximity to the boat dock where his keys were ultimately found, could arguably have been discussed by any of the persons who were present that evening. Likewise, those same witnesses, as well as other persons who observed Battenfield and Battiest after Cantrell's murder, could have testified regarding whether Battenfield or Battiest had any observable injuries.\n\n\n76\nThe prosecutor's second-stage comment is more problematic. Like the two first-stage comments, this comment was aimed at Battenfield's failure to present evidence on a particular issue. However, the closing-stage comment differed from the first-stage comments in that it concerned matters that could have been explained only by Battenfield or Battiest (who was called by the prosecution at trial and asserted his right to remain silent). Notwithstanding the impropriety of this comment, the OCCA did not unreasonably apply controlling Supreme Court precedent in determining that the effect of the comment was harmless. Battenfield's counsel posed a timely objection to the prosecutor's second-stage comment, and the trial court sustained the objection and admonished the jury to disregard the comment. In light of the general presumption that a jury follows a trial court's instructions, see Weeks v. Angelone, 120 S. Ct. 727, 733 (2000), we are persuaded that the trial court's admonition was sufficient to cure any error arising out of the prosecutor's comment.\n\nIneffective assistance of counsel\n\n77\nBattenfield contends his trial counsel, Dennis Shook, rendered ineffective assistance during the penalty phase of trial because he failed to adequately prepare or present any mitigating evidence. According to Battenfield, a variety of mitigating evidence was available, including (a) evidence that Battenfield's father and grandfather were involved in moonshining, (b) Battenfield's involvement in a serious car accident at age 18, during which he sustained a serious head injury and after which he heavily used alcohol and drugs, (c) Battenfield's family history of alcoholism and possible drug addiction, (d) mental health evidence, including evidence that Battenfield suffered from substance addiction, (e) the underlying circumstances of Battenfield's previous conviction for assault and battery, which allegedly occurred while he was under the influence of drugs and alcohol and was an act of self-defense, (f) evidence from family members and friends indicating that Battenfield was known for his compassion, gentleness, and lack of violence, even when provoked, and (g) testimony of prison personnel describing the security where Battenfield would be incarcerated if given a life sentence. Although Battenfield acknowledges that he informed Shook and the trial court prior to the beginning of the penalty phase that he did not want to present any mitigating evidence, he argues that he did not knowingly and intelligently waive his right to present such evidence. Specifically, Battenfield argues that prior to the waiver, neither Shook nor the trial court adequately informed him of the nature or purpose of mitigating evidence.\n\n\n78\nBattenfield's claim of ineffective assistance is governed by the familiar two-part test announced in Strickland v. Washington, 466 U.S. 668, 688-89, 675 (1984). Under that test, Battenfield must demonstrate that (1) defense counsel's performance was constitutionally deficient (i.e., it fell below an objective standard of reasonableness), and (2) there is a reasonable probability that, but for counsel's errors, the outcome of the proceedings would have been different.\n\n\n79\nBecause [the adversarial] testing process generally will not function properly unless defense counsel has done some investigation into the prosecution's case and into various defense strategies, [the Supreme Court has] noted that \"counsel has a duty to make reasonable investigations or to make a reasonable decision that makes particular investigations unnecessary.\"\n\n\n80\nKimmelman v. Morrison, 477 U.S. 365, 384 (1986) (quoting Strickland, 466 U.S. at 691). Unquestionably, counsel's obligation to conduct reasonable investigations extends to matters related to the sentencing phase of trial. See Cooks v. Ward, 165 F.3d 1283, 1294 (10th Cir. 1998), cert. denied, 120 S. Ct. 94 (1999). \"Indeed, we have recognized a need to apply even closer scrutiny when reviewing attorney performance during the sentencing phase of a capital case.\" Id. Where counsel's alleged failure to investigate and present evidence pertains to the sentencing phase of trial, the prejudice inquiry is whether there is a \"reasonable probability that, absent the errors, the sentencer . . . would have concluded that the balance of aggravating and mitigating circumstances did not warrant death.\" Strickland, 466 U.S. at 695; see also Cooks, 165 F.3d at 1296 (requiring court to consider strength of government's case and aggravating factors jury found to exist, as well as mitigating factors that might have been presented).\n\n\n81\nBattenfield first raised his claim regarding counsel's failure to adequately prepare and present mitigating evidence in his application for post-conviction relief. Although the state district court conducted an evidentiary hearing, it ultimately denied the application in its entirety, concluding in part that Battenfield knowingly waived his right to present mitigating evidence during the penalty phase of trial.4 The OCCA affirmed the denial of Battenfield's application for post- conviction relief. In rejecting Battenfield's ineffective assistance claim, the OCCA relied heavily on Battenfield's alleged waiver of his right to present mitigating evidence:\n\n\n82\nBattenfield now argues that he did not have a thorough understanding of mitigation and did not realize it encompassed more than familial testimony. Although his waiver was not as good as it might have been, it appears to have been made knowingly and voluntarily. (Footnote omitted.) Even without the waiver, however, Battenfield has failed to show that trial counsel was ineffective by not presenting mitigating evidence. We have reviewed the Affidavits attached to Petitioner's Application and find they all contain evidence that Battenfield and his family could have presented to the jury had Battenfield cooperated with his attorney. Thus, the . . . allegations of ineffective assistance of trial counsel are a direct result of Battenfield's own refusal to testify and allow his parents to testify. We will not hold counsel responsible for a client's obstinate behavior.\n\n\n83\nBattenfield III, 953 P.2d at 1127. The OCCA also independently addressed Battenfield's assertion that his trial counsel should have gathered and presented mental health evidence during the penalty phase:\n\n\n84\nThis leaves only the . . . failure to present mental health evidence as a possible instance of ineffectiveness of counsel. However, Battenfield has failed to show that such expert testimony was necessary. He did not then and does not now suffer from mental illness, mental infirmity, or incompetence to stand trial.\n\n\n85\nFurthermore, Battenfield has failed to show prejudice. The psychologist's conclusion that Battenfield was chemically dependent does nothing to undermine our confidence in the jury's determination that he constitutes a continuing threat to society. Accordingly, Battenfield has failed to show that his counsel's conduct \"so undermined the proper functioning of the adversarial process that the trial cannot be relied on as having produced a just result.\"\n\n\n86\nId. (footnotes omitted).\n\n\n87\nThe overriding question is whether the OCCA reasonably applied Strickland in rejecting Battenfield's ineffective assistance claim. See generally Brecheen v. Reynolds, 41 F.3d 1343, 1366 (10th Cir. 1994) (holding that, in pre-AEDPA case, state court conclusion that counsel rendered effective assistance is a mixed question of law and fact). Because the OCCA's decision was based on the state district court's finding that Battenfield knowingly waived his right to present mitigating evidence, we must examine the propriety of that finding. In performing our analysis, it is necessary to review several factors, including the investigative efforts of defense counsel prior to the beginning of the penalty phase, his penalty phase strategy, the advice he rendered to Battenfield prior to Battenfield's alleged decision to waive the presentation of mitigating evidence, and the trial court's examination of Battenfield regarding his alleged waiver.\n\n\n88\nShook received his Oklahoma law license in October 1980. He worked as an assistant district attorney in Wagoner County, Oklahoma, from October 1980 until December 31, 1982, and tried 10-15 felony cases. On January 1, 1983, he entered private practice in Wagoner County. The trial court appointed Shook to represent Battenfield and Shook received a total of $2,500.\n\n\n89\nThe evidence presented at the state court evidentiary hearing indicates Shook spent very little time investigating possible mitigating evidence or developing mitigation strategies. Although Shook allegedly spent over 100 hours preparing for the trial, only 20 of those hours were spent interviewing potential witnesses. Of those 20 hours, it is unclear how many were devoted to penalty phase preparation. According to Shook, he \"spent very little time developing mitigation,\" and the only mitigation strategy he considered was to invoke the jury's sympathy and mercy. Shook Aff. His alleged plan was to present the testimony of Battenfield's parents \"to kind of describe Billy's background; I wanted to bring out the positive things, the positive aspects of Billy's life; and most importantly, I wanted the parents to be able to ask the jury not to impose the death penalty.\" Evidentiary Hearing Tr., Vol. II at 118-19. However, the evidence indicates that although Shook may have briefly spoken to Battenfield's parents prior to and during trial, he never interviewed them regarding Battenfield's background and, indeed, was unaware of many, if not most, of the mitigating factors now cited by Battenfield. Further, although Shook testified that he spoke with Battenfield on several occasions regarding the possibility of a penalty phase, there is no indication that he ever interviewed Battenfield regarding his background. See Battenfield Aff. \u00b6\u00b6 3 (\"Dennis Shook . . . never talked to me about my childhood or past.\"). Finally, there is no evidence that Shook spoke to any of Battenfield's friends or relatives (other than his parents), to any mental health experts5 , or to any other potential mitigation witnesses (e.g., persons familiar with Battenfield's personality and temperament, persons familiar with the underlying facts of Battenfield's previous conviction6 , persons familiar with incarceration and security in Oklahoma state prisons).\n\n\n90\nBased upon this evidence, we conclude that Shook's penalty phase preparation was constitutionally deficient.7 The Supreme Court has emphasized that the reliability of a capital sentencing proceeding hinges upon the jury making an individualized determination based, in part, upon \"the particularized characteristics of the individual defendant.\" Gregg v. Georgia, 428 U.S. 153, 206 (1976). A defense attorney \"has a duty to conduct a reasonable investigation, including an investigation of the defendant's background, for possible mitigating evidence.'\" Brecheen, 41 F.3d at 1366 (quoting Middleton v. Dugger, 849 F.2d 491, 493 (11th Cir. 1988)); see also Stouffer v. Reynolds, 168 F.3d 1155, 1167 (10th Cir. 1999) (noting that defense counsel has a duty to investigate all possible lines of defense). Here, Shook violated that duty by failing to interview anyone, including Battenfield himself, regarding possible mitigating aspects of Battenfield's background. See, e.g., Clayton v. Gibson, 199 F.3d 1162, 1178 (10th Cir. 1999) (assuming, without deciding, that defense counsel \"rendered deficient assistance by not contacting family members during the course of conducting a second stage investigation\"), cert. denied, ___ U.S. ___, 121 S.Ct. 100, ___ L.Ed.2d ___, 2000 WL 697188 (2000); Baxter v. Thomas, 45 F.3d 1501, 1513 (11th Cir. 1995) (concluding that reasonable investigation would have included interviews with defendant's sister and neighbor, as well as defendant's mother and brother); Stafford v. Saffle, 34 F.3d 1557, 1563 (10th Cir. 1994) (concluding that counsel's penalty-phase performance was deficient where counsel explored defendant's \"background to some degree,\" but \"conducted no specific investigation for mitigation evidence\"); Blanco v. Singletary, 943 F.2d 1477, 1501-02 (11th Cir. 1991) (concluding defense counsel was ineffective for failing to contact defendant's relatives and acquaintances prior to trial); Harris v. Dugger, 874 F.2d 756, 763 (11th Cir. 1989) (concluding defense counsel's performance was deficient where \"neither lawyer . . . investigated [the defendant's] background, leading to their total-and admitted-ignorance about the type of mitigation evidence available to them\"); Stephen B. Bright, Advocate in Residence: The Death Penalty As the Answer to Crime: Costly, Counterproductive and Corrupting, 36 Santa Clara L. Rev. 1069, 1085-86 (1996) (\"The responsibility of the lawyer is to walk a mile in the shoes of the client, to see who he is, to get to know his family and the people who care about him, and then to present that information to the jury in a way that can be taken into account in deciding whether the client is so beyond redemption that he should be eliminated from the human community.\"). The result was that Shook was unaware at the time of trial of various mitigation strategies and accompanying pieces of evidence that could have been presented during the mitigation phase by Battenfield or his friends and family. Further, Shook was wholly unprepared to rebut the aggravating factors argued by the prosecution.\n\n\n91\nWe have no doubt that Shook's failure to conduct an adequate investigation hampered his ability to make strategic decisions regarding the penalty phase of trial. In Strickland, the Supreme Court emphasized that \"strategic choices made after less than complete investigation are reasonable precisely to the extent that reasonable professional judgments support the limitations on investigation.\" 466 U.S. at 690-91; see also Duvall v. Reynolds, 131 F.3d 907, 917 (10th Cir. 1997) (\"The duty to present mitigating evidence, of course, is not independent of the duty to investigate and prepare.\"), cert. denied, 525 U.S. 933 (1998); Horton v. Zant, 941 F.2d 1449, 1462 (11th Cir. 1991) (\"[O]ur case law rejects the notion that a `strategic' decision can be reasonable when the attorney has failed to investigate his options and make a reasonable choice between them.\"). Shook's failure to investigate Battenfield's background, and his failure to explore other readily apparent mitigation possibilities, rendered unreasonable his alleged penalty-phase strategy of focusing on sympathy and mercy. In other words, contrary to the dissent's suggestion, there was no strategic decision at all because Shook was ignorant of various other mitigation strategies he could have employed.\n\n\n92\nIn addition to hampering his ability to make strategic decisions, Shook's failure to investigate clearly affected his ability to competently advise Battenfield regarding the meaning of mitigation evidence and the availability of possible mitigation strategies. Shook testified that, prior to trial, he had \"numerous conversations [with Battenfield] about the possibility of having a second stage.\" Evidentiary Hearing Tr., Vol. II at 115. Whatever those conversations may have entailed, there is no indication Shook ever explained the general meaning of mitigation evidence to Battenfield or what specific mitigation evidence was available. Shook acknowledged he never advised Battenfield that mitigation evidence might include evidence about Battenfield's substance abuse problems. At best, the evidence indicates that at some point during the trial proceedings, Shook discussed with Battenfield his plan to present Battenfield's parents as second-stage witnesses and his strategy to have Battenfield's parents beg for Battenfield's life. In an affidavit submitted in connection with his application for post-conviction relief, Battenfield indicated that Shook never explained to him \"the importance of mitigation or . . . what mitigation actually [wa]s.\" Battenfield Aff. \u00b6\u00b6 2.\n\n\n93\nShook's deficient performance culminated in Battenfield waiving the right to present mitigating evidence. The jury returned its first-stage verdict at approximately 11:20 a.m. on the last day of trial. After receiving this verdict, the trial court took an hour and twenty-minute lunchtime recess. According to Shook, Battenfield \"was quite upset and, in my opinion, pretty irrational at that point in time.\" Evidentiary Hearing Tr., Vol. II at 116. Shook testified that during the recess, Battenfield \"instructed [him] that he did not want to put on evidence in mitigation for the second stage.\" Id. Although Shook allegedly advised Battenfield that they \"should proceed with the mitigating evidence,\" Battenfield again indicated that he did not want to proceed with the mitigation evidence proposed by Shook. Id. at 117. According to Battenfield, he \"did not know what mitigation was [at that point], [he] just did not want [his] mom and dad to testify.\" Battenfield Aff. \u00b6\u00b6 5. More specifically, Battenfield stated:\n\n\n94\nAfter I was convicted of first degree murder and before second stage deliberations began, my attorney asked me as to whether or not I wanted to have my parents testify. Dennis Shook never talked to me about any other people [testifying]. I did not want my parents to testify because I did not want to cause them anymore grief and sadness. I personally witnessed my father crying and sobbing for the first time in my life after I was convicted. My dad was always rock solid and seeing him cry was so out of character for him that it made me feel that I had to spare him and my mom from any more stress.\n\n\n95\nId. \u00b6\u00b6 4.\n\n\n96\nAt the conclusion of the court recess for lunch, Shook asked the trial court to make a record outside the hearing of the jury. The following discussion took place between Shook, Battenfield, and the trial judge:\n\n\n97\nTHE COURT: Let the record show the Defendant is present with his attorney, Mr. Shook. The State is represented by Assistant District Attorney Mr. Langley and Mr. Sperling. I have been advised by Mr. Shook that the defendant wants to make a record.\n\n\n98\nMR. SHOOK: That is correct, Judge. I have just spoken with Mr. Battenfield, along with Joe Robertson who is the attorney for the co-defendant, Melvin Battiest. The defendant, Billy Ray Battenfield, has informed me that he does not wish to take the stand and testify in this matter. It's my advice that he do so. Billy, I would like for you to comment on that.\n\n\n99\nTHE DEFENDANT: I'm going against my attorney's advice and not taking the stand.\n\n\n100\nTHE COURT: All right. Are you being abused, mistreated or forced to make you go against his advice?\n\n\n101\nTHE DEFENDANT: No, sir.\n\n\n102\nTHE COURT: It was my understanding that from visiting with Mr. Shook that you don't even want to put on any evidence as to mitigation; is that correct?\n\n\n103\nTHE DEFENDANT: You mean my parents and stuff?\n\n\n104\nTHE COURT: Yes.\n\n\n105\nTHE DEFENDANT: No, sir, they have been through enough.\n\n\n106\nTHE COURT: You're not going to present any testimony as to mitigation?\n\n\n107\nTHE DEFENDANT: No, sir.\n\n\n108\nTHE COURT: You understand you have that right?THE DEFENDANT: Yes, sir.\n\n\n109\nTHE COURT: All right, then we will proceed.\n\nTrial Tr. at 1421-22\n\n110\nAlthough the state district court found, and the OCCA agreed, that the waiver was knowing and intelligent, we conclude the above-outlined evidence is more than sufficient to overcome any presumption of correctness afforded to this finding.8 When the above-quoted colloquy took place, Battenfield did not have a proper understanding of the general nature of mitigating evidence or the specific types of mitigating evidence that might be available for presentation. He only knew that Shook intended to put his parents on the witness stand and have them beg for the jury's mercy and sympathy. Battenfield's narrow conception of what mitigation meant is evidenced by his response to the trial judge's questioning (\"You mean my parents and stuff?\"). Finally, the trial judge's questioning of Battenfield regarding his decision to waive was brief and, in our view, inadequate. The trial court failed to adequately determine that Battenfield had been provided sufficient information from Shook to make a knowing choice.\n\n\n111\nIn determining that Battenfield's alleged waiver was knowing when that issue was raised in Battenfield's application for post-conviction relief, the state district court relied heavily on the evidentiary hearing testimony of the judge who presided over Battenfield's trial. A review of that testimony, however, suggests it is of questionable value in determining whether Battenfield's waiver was knowing and voluntary. Under cross-examination by Battenfield's counsel, the trial judge acknowledged that mitigating evidence could include more than calling a capital defendant's parents to the witness stand. In particular, the trial judge acknowledged that mitigating evidence could include information about a defendant's family history, psychological information, evidence of alcoholism, or a family history of alcoholism. The following series of questions and answers then took place between Battenfield's attorney and the trial judge:\n\n\n112\nQ. Would you agree with me, Judge, that when you responded \"Yes\" to Mr. Battenfield saying, \"You mean my parents and stuff?\" that he might not have . . . a full and fair understanding on his part about what mitigation was?\n\n\n113\nA. Well, I don't agree with you.\n\n\n114\nQ. Okay. Explain to me why that might be.\n\n\n115\nA. Well, I mean, you're talking about when he says family and stuff?\n\n\n116\nQ. Uh-huh.\n\n\n117\nA. Well, what you've gone back over, alcoholism and all these other things that you've named off, social problems and all this, that would cover it under family and stuff. But it was my understanding they [Battenfield and Shook] had discussed it, talked about it, and that was - but he did not want to put on any evidence.\n\n\n118\nQ. Judge, do you recall - well, if I were to tell you that Mr. Shook had spent, according to evidence that we have in the record, had spent virtually no time discussing the concept of mitigation with Mr. Battenfield or with his parents, would you have any reason to believe that Mr. Shook could have given adequate advice to Mr. Battenfield about what that evidence might have been?\n\n\n119\nA. Sir, I don't really understand your question.\n\n\n120\n* * *\n\n\n121\nQ. If the evidence in the record is that Mr. Shook had really spent no time discussing with Mr. Battenfield what mitigation was, and had spent no time preparing for a mitigation case, then do you know of any reason why Mr. Shook's advice to Mr. Battenfield about what mitigation was would be adequate?\n\n\n122\nA. Well, I don't know why the - the record, you say, is silent as to that?\n\n\n123\nQ. No. Actually, the record affirmatively, I think, demonstrates that Mr. Shook didn't undertake a mitigation investigation. So my concern is, as a trial judge--\n\n\n124\nA. Well, wait just a minute. You're saying that he did not discuss this mitigation procedure with him at all?\n\n\n125\nQ. I'm saying we have evidence in the record that would indicate that that's the case. And that he did not investigate the mitigation phase of the case. He had done no investigation of the social history of Mr. Battenfield, he had done no real family investigation. My only question to you is: As a trial judge, if you had been aware of that would you have been less comfortable about concluding that Mr. Battenfield was adequately informed as to what mitigation was?\n\n\n126\nA. I don't - I think you're asking me a question that does not properly reflect what transpired in this case. I think Mr. Shook and him did discuss it. I was satisfied at the time that they had discussed it, from visiting with Mr. Shook. That's the reason they asked to make a record and come to the bench - or to do that and make that record. You're asking me to suppose that certain things did or did not happen. And sir, I'm satisfied that it did happen the way the record reflects from the standpoint of him knowing about mitigation. The bill of particulars was filed. They had them and I assumed had gone over them. He indicated that they had, that they knew what he - he knew what he was doing in the courtroom that day.\n\n\n127\nEvidentiary Hearing Tr., Vol. I at 114-16. Obviously, the trial judge's assumptions about what transpired between Shook and Battenfield prior to the waiver are not borne out by the record. In particular, the record is clear that Shook did not adequately apprise Battenfield of the meaning of mitigation evidence or what particular mitigating evidence was available in his case. Further, it is apparent the trial judge failed, at the time he questioned Battenfield on the record, to ensure that Battenfield had sufficient information to knowingly waive his right to present mitigation evidence.9\n\n\n128\nLess than a month after Battenfield's trial, the OCCA established guidelines for trial courts to follow \"when a defendant refuses to allow the presentation of mitigating evidence in the sentencing stage.\" Wallace v. State, 893 P.2d 504, 512 (Okla. Crim. App. 1995). Those guidelines, intended to ensure that a defendant \"has an understanding of his or her rights . . . in the sentencing process,\" require a trial court to: (1) inform the defendant of the right to present mitigating evidence, and what mitigating evidence is; (2) inquire both of the defendant and his attorney (if not pro se) whether he or she understands these rights; (3) inquire of the attorney if he or she has attempted to determine from the defendant whether any mitigating evidence exists; (4) inquire what that mitigating evidence is (if the defendant has refused to cooperate, the attorney must relate that to the court); (5) inquire of a defendant and make a determination on the record whether the defendant understands the importance of mitigating evidence in a capital sentencing scheme, understands such evidence could be used to offset the aggravating circumstances proven by the prosecution in support of the death penalty, and the effect of failing to present that evidence; (6) after being assured the defendant understands these concepts, inquire of the defendant whether he or she desires to waive the right to present such mitigating evidence; and (7) make findings of fact regarding the defendant's understanding and waiver of rights. Id. at 512-13. The trial judge in Battenfield's case failed to satisfy any of these requirements.\n\n\n129\nAlthough the State correctly argues that Wallace \"was not the law at the time of Appellant's 1985 trial,\" State's Appellate Br. at 30 n.3, the guidelines set forth in Wallace are, in our view, little more than commonsense and should have been substantially followed by the trial court. We emphasize that our conclusion regarding the inadequacy of the trial court's inquiry does not hinge in any way upon the holding in Wallace. Instead, we simply find it useful, for analytical purposes, to contrast the trial court's inquiry in this case with the guidelines set forth by the OCCA in Wallace.\n\n\n130\nGiven our conclusion that Battenfield's waiver was neither knowing nor intelligent, the next question is whether Shook was ineffective for failing to present any mitigating evidence. Although the OCCA determined that Battenfield's waiver was knowing and intelligent (a determination we have already rejected under the AEDPA standards of review), it alternatively determined that \"[e]ven without the waiver, . . . Battenfield ha[d] failed to show that [Shook] was ineffective by not presenting mitigating evidence.\" Battenfield III, 953 P.2d at 1127. According to the OCCA, most of the mitigating evidence to which Battenfield pointed in his application for post-conviction relief could have been presented by \"Battenfield and his family . . . had Battenfield cooperated with his attorney.\" Id. In other words, the OCCA determined, Shook's failure to present mitigating evidence was \"a direct result of Battenfield's own refusal to testify and allow his parents to testify.\" Id.\n\n\n131\nIn our view, this is a patently unreasonable application of Strickland. We see no difference between Battenfield's purported waiver and his so-called \"lack of cooperation.\" If the waiver is found to be neither knowing nor intelligent, the so-called lack of cooperation must fall by the wayside. Even ignoring this flaw in the OCCA's reasoning, we fail to see how Battenfield can be held responsible for Shook's failure to present mitigating evidence unknown to Shook.10 Had Shook conducted a constitutionally adequate investigation of potential mitigating evidence, he would have had a variety of witnesses from whom to choose.\n\n\n132\nWe conclude that Battenfield was deprived of effective assistance of counsel during the penalty phase of trial. Shook failed to conduct a constitutionally adequate pretrial investigation into potential mitigation evidence which, in turn, hampered his ability to make strategic choices regarding the second-stage proceedings and competently advise his client regarding those proceedings. Because Battenfield did not receive competent advice from Shook regarding the second-stage proceedings, and because the trial court failed to conduct an adequate inquiry into his decision to waive mitigation evidence, we conclude Battenfield's purported waiver was neither knowing nor voluntary. Finally, we conclude Shook was ineffective for failing to present any mitigation evidence during the second-stage proceedings.\n\n\n133\nThe remaining question is whether Battenfield was prejudiced by Shook's inadequate performance. Because the OCCA never addressed this issue11 , we are free to exercise our independent judgment. Battenfield must \"affirmatively prove actual prejudice by demonstrating `a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different.'\" Cooks, 165 F.3d at 1296 (quoting Strickland, 466 U.S. at 693-94). \"As applied to the sentencing stage of his trial, [Battenfield] must demonstrate `a reasonable probability that, absent the errors, the sentencer . . . would have concluded that the balance of aggravating and mitigating circumstances did not warrant death.'\" Id. (quoting Strickland, 466 U.S. at 695).\n\n\n134\n\"In evaluating prejudice, we must keep in mind the strength of the government's case and the aggravating [circumstances] the jury found as well as the mitigating factors that might have been presented.\" Castro v. Ward, 138 F.3d 810, 832 (10th Cir.) (internal quotations omitted), cert. denied, 525 U.S. 971 (1998). Here, the jury found two aggravating circumstances to support Battenfield's death sentence: (1) the heinous, atrocious, or cruel nature of Cantrell's murder; and (2) the continuing threat Battenfield presented to society. However, the OCCA on direct appeal struck the heinous, atrocious, or cruel factor on the grounds that it was not supported by the evidence. See Battenfield I, 816 P.2d at 565 (noting that the blow to Cantrell's head would likely have rendered him immediately unconscious). Thus, only the continuing threat circumstance remains to support Battenfield's death sentence. The state argued that Battenfield had twice been convicted of violent felonies: once for the 1978 assault and battery with a dangerous weapon conviction, and again in 1985 for the murder of Cantrell.12 When the OCCA reweighed the aggravating and mitigating circumstances on direct appeal, it concluded the continuing threat factor was supported by the \"calloused nature\" of Cantrell's murder and by the fact that Battenfield had previously been convicted of a violent felony. Battenfield I, 816 P.2d at 566.\n\n\n135\nBattenfield had available a variety of mitigating evidence to counterbalance this single aggravating factor. Although the underlying facts of his 1978 conviction are somewhat sketchy, the record suggests it may have been an act of self defense on the part of Battenfield. In particular, the evidence indicates Battenfield \"was playing pool in a bar when a `drunk Indian' fell or knocked into the pool table. Words were exchanged, the Indian pulled a gun, and [Battenfield] defended himself with a knife.\" St. Peter Aff. \u00b6\u00b6 17. Both the 1978 crime and the murder of Cantrell were committed when Battenfield was under the influence of drugs or alcohol. Arguably, this evidence could be viewed in a mitigating light, particularly if combined with evidence that Battenfield would have little or no access to drugs or alcohol while in prison, or evidence that Battenfield was amenable to treatment for his substance abuse problems (or even perhaps evidence indicating that Battenfield's reliance on drugs and alcohol dramatically worsened after his 1970 car accident). Battenfield's family members and friends would have testified that Battenfield \"was known for his compassion, gentleness, and lack of violence even when provoked.\" Id. Further, persons familiar with the Oklahoma correctional system could have testified about Battenfield's chances of parole and the limitations that would be placed on his access to alcohol and drugs.\n\n\n136\nWithout discounting the calloused nature of Cantrell's murder, we conclude there is a reasonable probability that this mitigating evidence would have led the jury to reach a different sentencing result. We emphasize that, because of Shook's failure to present any mitigating evidence during the penalty phase, the jury sentenced Battenfield knowing only that he was involved in the murder of Cantrell and previously had been convicted of assault and battery with a dangerous weapon. Had they been given more information about Battenfield's background, personality, and the facts of his prior conviction, we conclude there is a reasonable probability they would have determined the mitigating circumstances outweighed the single aggravating circumstance. See generally Mayes v. Gibson, 210 F.3d 1284, 1288 (10th Cir. 2000) (noting the \"overwhelming importance\" of mitigation evidence in humanizing a criminal defendant and explaining his conduct). Alternatively, we conclude there is a reasonable probability they would have determined Battenfield did not represent a continuing threat to society.13 For these reasons, we conclude that Shook's deficient conduct \"so undermined the proper functioning of the adversarial process that the [penalty phase of] the trial cannot be relied on as having produced a just result.\" Strickland, 466 U.S. at 686.\n\nIV.\n\n137\nWe REVERSE the judgment of the district court and REMAND with instructions that the district court grant the writ as to Battenfield's death sentence, subject to the state district court conducting a new sentencing trial or vacating Battenfield's death sentence and imposing a lesser sentence consistent with law. See Richmond v. Lewis, 506 U.S. 40, 52 (1992) (utilizing conditional issuance of writ of habeas corpus to require constitutional compliance by state courts); Pickens, 206 F.3d at 1003 (10th Cir. 2000) (same); see also Smith v. Lucas, 9 F.3d 359, 367 (5th Cir. 1993) (noting that the \"real thrust\" of a federal court's conditional issuance of a writ of habeas corpus \"is to alert the state court to the constitutional problem and notify it that the infirmity must be remedied\"). In light of this determination, we find it unnecessary to address Battenfield's remaining contention that the evidence presented during the sentencing phase was insufficient to support the jury's finding that he represented a continuing threat to society.\n\n\n\nNotes:\n\n\n1\n Battiest was also charged, tried, and convicted for the first- degree murder of Cantrell. He received a life sentence. His conviction and sentence were affirmed on direct appeal by the OCCA. Battiest v. State, 755 P.2d 688 (Okla. Crim. App. 1988). Although Battiest apparently confessed to the murder, the details of that confession are not outlined in the OCCA's opinion, and it remains unclear precisely what role each of the co-defendants (Battenfield and Battiest) played in the death of Cantrell.\n\n\n2\n Neither motion is included in the record on appeal. According to the district court's docket sheet, the case was considered \"filed\" as of January 26, 1998.\n\n\n3\n Battenfield argues that \"this case does not turn on the trial court's factual determinations, but on the legal standard it applied.\" Battenfield's Opening Brief at 21. What he fails to acknowledge, however, is that the trial court ultimately made a factual determination that Elliott was biased, and it is that factual determination we are called upon to review in this federal habeas case. The fact that the trial judge employed questions which may have been inconsistent with the legal standard announced in Witt does not mean that Battenfield is automatically entitled to relief. Rather, the propriety of the questions utilized by the trial court is but one factor in determining whether Battenfield has sufficiently rebutted the presumption of correctness afforded under \u00a7 2254(e)(1).\n\n\n4\n The state district court also concluded the ineffective assistance claim could have been raised by Battenfield on direct appeal and was thus procedurally barred. However, the OCCA did not affirm on this basis, and the State has not asserted procedural bar in this federal habeas proceeding.\n\n\n5\n Shook testified that, at some point during trial, he informally spoke to the trial judge about the possibility of receiving funding to hire a mental health expert to use during the mitigation phase. The judge indicated there was no funding available and Shook did not file a formal motion because, in part, he found no authority for the appointment of a court-paid expert.\n\n\n6\n Shook knew the state intended to rely on evidence of Battenfield's previous conviction for assault and battery with a dangerous weapon and should have performed some type of investigation to determine the underlying facts of that conviction. Based upon the evidence presented by Battenfield in connection with his post-conviction application, it appears there were mitigating aspects to that prior crime that could have been presented to the jury (i.e., the fact Battenfield may have acted in self-defense, and the fact he was under the influence of drugs and alcohol at the time of the incident).\n\n\n7\n In disposing of Battenfield's ineffective assistance claim, the OCCA made no mention of Shook's investigative efforts. Thus, we are free to exercise our independent judgment in determining whether Shook's investigative efforts were constitutionally deficient. Even assuming, arguendo, the OCCA intended to indicate that Shook's investigative efforts were sufficient, we would conclude the OCCA unreasonably applied Strickland.\n\n\n8\n Although there are numerous published cases (both federal and state) where a capital defendant has waived the right to present mitigating evidence, very few have actually addressed whether the propriety of the waiver is purely a factual issue or a mixed question of fact and law. Of the few cases that have addressed this issue, the holdings appear conflicting. Compare Singleton v. Lockhart, 962 F.2d 1315, 1321 (8th Cir. 1992) (treating as a factual finding the question of whether the defendant knowingly and intelligently waived his right to present mitigating evidence), and State v. Ashworth, 706 N.E. 2d 1231, 1237 (Ohio 1999) (indicating a trial court in a capital case must \"make findings of fact as to the defendant's understanding and waiver of\" his right to present mitigating evidence), with Wilkins v. Bowersox, 145 F.3d 1006, 1015-16 (8th Cir. 1998) (suggesting that whether a defendant knowingly and intelligently waived his right to present mitigating evidence is a mixed question of fact and law), cert. denied, 525 U.S. 1094 (1999), and Snell v. Lockhart, 14 F.3d 1289, 1302-03 (8th Cir. 1994) (same). Likewise, the courts have differed in their characterizations of other types of waivers. See, e.g., Tacon v. Arizona, 410 U.S. 351, 352 (1973) (concluding that whether petitioner's conduct amounted to a knowing and intelligent waiver of the right to be present at trial was \"primarily a factual issue\"); United States v. Burson, 952 F.2d 1196, 1199 (10th Cir. 1991) (concluding that question of whether waiver of right to counsel was knowing and voluntary is a mixed question of fact and law); Meeks v. Cabana, 845 F.2d 1319, 1323 (5th Cir. 1988) (holding that \"[t]he state court's finding of waiver [of the right to appeal] involves a pure question of fact\"). We find it unnecessary to definitively characterize the waiver as either a factual issue or a mixed question of fact and law because the outcome of the appeal would be the same regardless. In other words, if it is characterized as a mixed question of fact and law, we would conclude that the OCCA unreasonably determined Battenfield's waiver was knowing and intelligent. If the issue is characterized as a question of fact, we would conclude the state district court's finding on this issue was unreasonable in light of the evidence presented during the evidentiary hearing on Battenfield's application for post-conviction relief.\n\n\n9\n The dissent suggests the state courts could have decided that the testimony of Shook and the trial judge was more credible than that of Battenfield. We disagree. Shook never directly controverted Battenfield's statements. As for the trial judge, a careful examination of his testimony reveals that he had little, if any, factual basis for determining whether Shook adequately advised Battenfield regarding mitigation evidence and strategy.\n\n\n10\n The dissent suggests that, \"[h]ad Mr. Battenfield cooperated with Mr. Shook's second-stage strategy, evidence that he `was known for his compassion, gentleness, and lack of violence even when provoked,' . . . surely would have been brought out, even without an extensive investigation.\" We strongly disagree. Because Shook never conducted any investigation into the potentially mitigating aspects of Battenfield's life or personality (e.g., his apparent lack of propensity for violence), we fail to understand how Shook would have known to elicit such evidence from Battenfield or his parents during the second-stage proceedings.\n\n\n11\n The OCCA did discuss whether Battenfield was prejudiced by Shook's failure to present expert mental health testimony indicating that Battenfield was chemically dependent. Battenfield III, 953 P.2d at 1127. However, we find that analysis irrelevant because we are not persuaded Shook was ineffective for failing to obtain and present expert mental health testimony. Our prejudice inquiry focuses instead on Shook's failure to obtain and present the various other types of mitigating evidence pointed to by Battenfield.\n\n\n12\n During the penalty phase, the state incorporated by reference the evidence presented during the guilt phase. Aside from that, the only additional evidence presented by the state was a copy of the 1978 judgment of conviction.\n\n\n13\n The dissent asserts that we are speculating regarding the likely effect the available mitigating evidence would have had on the jury's second-stage verdict. Under the circumstances of this case, where we are faced with a determination of whether Battenfield was prejudiced by his counsel's inadequate second-stage performance, we have little choice. Indeed, the dissent must also speculate by suggesting that Battenfield would not have allowed witnesses other than his parents to testify and in assuming the available mitigating evidence would not have altered the second-stage outcome.\n\n\n\n138\nKELLY, Circuit Judge, concurring in part and dissenting in part.\n\n\n139\nWhile I concur in the court's opinion to the extent it affirms the district court's denial of habeas relief, I dissent from reversal and remand of Mr. Battenfield's ineffective assistance of counsel claim. In my view, the court's resolution of this claim does not comport with either the proper standard of review or the principles governing ineffectiveness claims.\n\n\n140\nOn collateral review, we may only grant relief if the state court's adjudication of a federal claim \"resulted in a decision that was contrary to, or involved an unreasonable application of, clearly established Federal law, as determined by the Supreme Court of the United States,\" 28 U.S.C. \u00a7 2254(d)(1), or \"resulted in a decision that was based on an unreasonable determination of the facts in light of the evidence presented in the State court proceeding,\" \u00a7 2254(d)(2). State court factual findings are presumed correct, and one seeking federal habeas relief \"shall have the burden of rebutting the presumption of correctness by clear and convincing evidence.\" \u00a7 2254(e)(1).\n\n\n141\nIneffective assistance of counsel requires a petitioner to demonstrate deficient performance and prejudice. Strickland v. Washington, 466 U.S. 668, 687 (1984). As mixed questions of law and fact, we do not afford a presumption of correctness to State court determinations on these issues. Herrera v. Lemaster, 225 F.3d 1176, 1178-79 (10th Cir. 2000). However, we do accord a presumption of correctness to state court findings of historical fact underlying these issues. Brecheen v. Reynolds, 41 F.3d 1343, 1366 (10th Cir. 1994). Moreover, merely because we may have come to a different resolution on the same facts does not warrant habeas relief. An unreasonable application of federal law means something beyond what we may perceive in our independent judgment as an erroneous or incorrect application of clearly established federal law. Williams v. Taylor, 120 S. Ct. 1495, 1522 (2000).\n\n\n142\nIn deciding that the Oklahoma Court of Criminal Appeals (\"OCCA\") unreasonably applied Strickland, the court determines that Mr. Battenfield has proven that his trial counsel, Mr. Shook, rendered deficient performance because he failed to adequately investigate potential mitigation evidence in the second stage of the trial. According to the court, this \"hampered\" Mr. Shook's ability to make strategic choices about the penalty phase and to competently advise his client. This incompetent advice, coupled with the trial court's inadequate inquiry into Mr. Battenfield's decision to forego mitigating evidence, resulted in a waiver that was neither knowing nor voluntary.\n\n\n143\nThe claim in this case is merely a vehicle to correct an error in judgment by Mr. Battenfield, specifically his decision to waive his right to present mitigating evidence. The proper, and properly limited, function of a federal habeas court in this context is to insure that the death penalty is not imposed in violation of the Constitution. Herrera v. Collins, 506 U.S. 390, 400-01 (1993). If Mr. Battenfield made a knowing and intelligent waiver of his right to present mitigation evidence, then his counsel cannot have been ineffective for failing to develop such evidence. See Wallace v. Ward, 191 F.3d 1235, 1247-48 (10th Cir. 1999).\n\n\n144\nThe failure to present mitigating evidence is not per se ineffective assistance of counsel. Brecheen, 41 F.3d at 1368. The reason why no mitigating evidence was presented matters greatly. Id. Here, the OCCA affirmed the state post-conviction trial court's express determinations, made after an evidentiary hearing, that Mr. Battenfield knowingly and intelligently waived that right. Battenfield v. State, 953 P.2d 1123, 1127 (Okla. Crim. App. 1998), aff'g Battenfield v. State, No. CF-84-73, Findings of Fact and Conclusions of Law and Order Denying Post-Conviction Relief at 6 (Wagoner County Dist. Ct. May 13, 1997) (\"It was the opinion of the trial Court that the petitioner knowingly waived his right to present mitigating evidence and this Court agrees.\"). Though this court reweighs the evidence and comes to a different conclusion, the record evidence fully supports the state courts' determination on this point.\n\n\n145\nMr. Shook testified that he had \"numerous conversations [with Mr. Battenfield] about the possibility of having a second stage,\" and that most of those conversations took place prior to trial. Hr'g Tr. at 2:115-16. He also testified that, having previously discussed second- stage proceedings with Mr. Battenfield, Mr. Battenfield's decision at trial happened completely without warning. Id. at 134. It is uncontroverted that Mr. Shook advised Mr. Battenfield to present mitigating evidence and that Mr. Battenfield declined Mr. Shook's advice. Trial Tr. at 1421; Hr'g Tr. at 2:117-18. Mr. Battenfield not only declined to testify on his own behalf, but also to put on any other mitigating evidence (\"my parents and stuff\"). Trial Tr. at 1421-22; Hr'g Tr. at 2:117-18. This was not for want of adequate investigation or lack of a second-stage strategy by Mr. Shook, or improper safeguards by the state district court on waiver. Rather, it was due to Mr. Battenfield's conscious choice.\n\n\n146\nBy affidavit and testimony, Mr. Shook indicated that Mr. Battenfield was angry about the outcome of the first stage.\n\n\n147\nMr. Battenfield waived his right to testify and did not want me to put his parents on the stand. If I had been permitted to present his parents, I would have had them testify as to his good character[]. His decision to waive mitigation occurred immediately after the jury found him guilty. He was angry, upset, depressed, and stated that the jury could do whatever they wanted. Basically, he just gave up.\n\n\n148\nShook Aff. at 1-2. Although Mr. Shook felt that Mr. Battenfield \"was not in a condition to knowingly waive this vital stage of the trial,\" Mr. Shook followed the wishes of his client:\n\n\n149\nWhen Mr. Battenfield told me he did not want to put any mitigation on in the second stage, I was not expecting it. I had never encountered a situation such as this, and was not sure of what action to take. I followed Mr. Battenfield's wishes even though I knew it was the wrong action to take. If I knew that I could have continued with the second stage as I had planned despite Mr. Battenfield's attitude, I would have done so.\n\n\n150\nId. at 2; accord Hr'g Tr. at 2:116-17.\n\n\n151\nThe state courts could certainly reject Mr. Battenfield's post- conviction assertion that Mr. Shook never explained \"the importance of mitigation or . . . what mitigation actually is.\" Battenfield Aff. \u00b6\u00b6 2. They could instead decide that the testimony of Mr. Shook and the original trial judge to the contrary was more credible. E.g., Hr'g Tr. at 1:116, 119-20; see also id. at 2:120 (direct examination of Mr. Shook) (Q: \"Had you explained to the defendant the meaning of mitigating evidence and what you intended to present? A: Yes.\"). Despite a vigorous cross-examination at the state post-conviction hearing, the trial judge was steadfast in his belief (then and at the hearing) that Mr. Shook had discussed mitigation with his client. Id. at 1:116. He based this belief upon his visits with Mr. Shook, the request by the defense to make a record on the issue, and the furnishing of the bill of particulars to the defense. Id. The fact that the OCCA would later issue guidelines governing the waiver of the right to put on mitigating evidence should not cause us to disregard the careful inquiry at the state post-conviction evidentiary hearing. Cf. Wallace v. State, 893 P.2d 504, 512 (Okla. Crim. App. 1995).\n\n\n152\nPlainly, the reasonableness of Mr. Shook's actions must be judged against the firm desires of his client. See Strickland, 466 U.S. at 691. We have held that a defendant may waive the right to put on mitigating evidence. Wallace, 191 F.3d at 1247-48. There is little reason to believe that Mr. Battenfield would have allowed the presentation of mitigating evidence at his trial, even if that evidence came from sources other than himself or his parents. Mr. Battenfield's expert testified that while defense counsel cannot compel a defendant to testify in the second stage, counsel that does not present mitigating evidence, even over the objection of his client, renders deficient performance. Hr'g Tr. at 1:22, 36. This is directly at odds with the client's right to participate in his own defense, let alone Strickland. See Smith v. Massey, 235 F.3d 1259 (10th Cir. Dec. 19, 2000) (\"Although the legal expert who testified on behalf of Smith in her post-conviction proceedings testified that [Smith's trial attorney] should have pursued the `architect' or `manipulation' theory notwithstanding Smith's wishes, this testimony is clearly inconsistent with the Supreme Court's view of the attorney-client relationship.\").\n\n\n153\nThe premise of the court's decision, that Mr. Shook lacked an adequate mitigation strategy due to an inadequate investigation also is not supported. Mr. Shook testified that he visited with Mr. Battenfield's parents at court appearances and in his office, though he could not recall how many times, and that he conversed with them about the purpose of their potential second-stage testimony. Hr'g Tr. at 2:138. He was aware of Mr. Battenfield's troubled life, including his problems with substance abuse and his association with the \"wrong crowd.\" Id. at 2:131, 135. He further testified that he intended to call Mr. Battenfield's parents and perhaps a sibling, as witnesses and that he had conversed with his client regarding the presentation of such evidence. Id. at 2:115. He intended to describe Mr. Battenfield's background, to bring out the positive aspects of his life, and to have his parents ask the jury not to impose the death penalty. Id. at 2:118- 19, 138-39. This was a permissible trial strategy to which a reviewing court owes deference, notwithstanding that there may have been other ways to defend the case. See Strickland, 466 U.S. at 689-90; Mayes v. Gibson, 210 F.3d 1284, 1288 (10th Cir. 2000) (mitigation evidence serves to humanize and explain the defendant).\n\n\n154\nThe mitigating evidence that the court views as significant is contained primarily in a social worker's assessment of Mr. Battenfield. It includes a double hearsay account of the circumstances of Mr. Battenfield's 1978 conviction, perhaps related by Mr. Battenfield himself. St. Peter Aff. \u00b6\u00b6 17 (\"[Mr. Battenfield] states that all of this occurred while in a blackout so he only has others' descriptions to rely on as to what actually occurred.\"). The evidence of alcohol dependence came from a four-hour evaluation of Mr. Battenfield by a clinical psychologist. Hr'g Tr. at 2:48; Murphy Aff. at 2 (\"His personality testing found that Mr. Battenfield suffers exclusively from alcohol dependence.\"). This court concludes that the \"continuing threat\" aggravator could have been mitigated with evidence that Mr. Battenfield would not have had access to alcohol in prison, that he may have been amenable to treatment, or that his alcoholism may have worsened as a result of a car accident occurring some eight years prior to the assault and battery conviction. Ct. Op. at 41-42; see also Boyd v. Ward, 179 F.3d 904, 918 (10th Cir. 1999) (available mitigating evidence must be viewed against the strength of the State's case and the aggravators actually found), cert. denied, 509 U.S. 108 (2000). All of this is nothing more than speculation; the evidence about alcoholism just as easily could have had an unintended and negative effect upon the jury.\n\n\n155\nRegardless, the OCCA was unassailably correct in concluding that the substance of the mitigating evidence (which is largely historical data) could have been presented by Mr. Battenfield and his family, particularly his parents, had he heeded the advice of counsel. Battenfield, 953 P.2d at 1127. Had Mr. Battenfield cooperated with Mr. Shook's second-stage strategy, evidence that he \"was known for his compassion, gentleness, and lack of violence even when provoked,\" St. Peter Aff. \u00b6\u00b6 17, surely would have been brought out, even without an extensive investigation.\n\n\n156\nIn sum, the court's decision is at odds with our current standard of review and with Strickland. Mr. Battenfield rejected the assistance his counsel offered. Moreover, the actions that counsel took prior to the waiver were reasonable under the circumstances. I respectfully dissent from this portion of the court's opinion and would affirm the district court's denial of the writ.1\n\n\n\nNotes:\n\n\n1\n Mr. Battenfield also argues that the evidence is insufficient to sustain the death penalty because the OCCA, in upholding the continuing threat aggravator, relied upon the 1978 conviction (for assault and battery with a dangerous weapon after former conviction of a felony), which the jury apparently rejected as a basis for a continuing threat aggravator. See Battenfield v. State, 816 P.2d 555, 566, reh'g denied, 826 P.2d 612, 613-14 (Okla. Crim. App. 1991). The jury's rejection of the continuing threat aggravator described in the State's bill of particulars, however, cannot be viewed as a factual rejection of the 1978 conviction because the bill of particulars misdescribed the 1978 offense. See Battenfield, 826 P.2d at 613. Mr. Battenfield's reliance on Presnell v. Georgia, 439 U.S. 14, 16-17 (1978) (an appellate court may not uphold a death sentence upon aggravating factor or circumstance not before the jury), is completely unconvincing. Here, the continuing threat aggravator was contained in the bill of particulars and both the jury and the OCCA were entitled to consider the 1978 conviction in connection with it.\n\n\n"} -{"text": "944 F.2d 1253\nUNITED STATES of America, Plaintiff-Appellee,v.Billy Joe CHAMBERS (89-1381), Larry M. Chambers(89-1380/1950), Willie L. Chambers (89-1877/1879), Otis B.Chambers (89-1357/1949), Belinda Lumpkin (89-1382), Jerry L.Gant (89-1358), Marshall Glenn (89-1396), Eric L. Wilkins(89-1359), and Elayne C. Lucas (89-1360), Defendants-Appellants.\nNos. 89-1357 to 89-1360, 89-1380 to 89-1382, 89-1396,89-1877, 89-1879, 89-1949 and 89-1950.\nUnited States Court of Appeals,Sixth Circuit.\nArgued Aug. 13, 1990.Decided Sept. 10, 1991.\n\nLarry Bunting, Asst. U.S. Atty., John R. Roth, Asst. U.S. Atty. (argued and briefed), Detroit, Mich., for plaintiff-appellee.\nThomas V. Wilhelm (argued and briefed), Frederick K. Hoops & Assoc., Birmingham, Mich., for Otis Bernard Chambers.\nCurtis R. Williams (argued and briefed), Detroit, Mich., for Jerry Lee Gant.\nTimothy P. Murphy (briefed), Detroit, Mich., for Eric Lamar Wilkins.\nRonald R. Gold (argued and briefed), Southfield, Mich., for Elayne Coleman Lucas.\nElayne Coleman Lucas, Detroit, Mich., pro se.\nRita C. Martin (argued and briefed), Federal Public Defenders Office, Anthony T. Chambers (argued), Detroit, Mich., Larry Marlowe Chambers.\nDouglas R. Mullkoff (argued and briefed), Kessler & Geer, Ann Arbor, Mich., for Billy Joe Chambers.\nRudolph A. Wartella, III (argued and briefed), East Detroit, Mich., for Belinda Lumpkin.\nDavid I. Goldstein (briefed), Ann Arbor, Mich., for Marshall Glenn.\nJohn R. Minock (argued and briefed), Kelley & Cramer, Ann Arbor, Mich., for Willie Lee Chambers.\nWillie Lee Chambers, pro se.\nBefore RYAN and NORRIS, Circuit Judges, and WILHOIT, District Judge.*\nRYAN, Circuit Judge.\n\n\n1\nDefendants are nine members of a drug trafficking conspiracy known as the Chambers Brothers Organization. They appeal their convictions for conspiracy and related crimes.\n\nI.\n\n2\nOn February 29, 1988, twenty-two persons were named in a fifteen-count indictment charging conspiracy with the intent to possess and distribute controlled substances, in violation of 21 U.S.C. \u00a7\u00a7 841(a)(1), 846; possession with the intent to distribute and distribution of controlled substances, in violation of 21 U.S.C. \u00a7 841(a)(1); possession of a firearm during a drug trafficking crime, in violation of 18 U.S.C. \u00a7 924(c); tax evasion, in violation of 26 U.S.C. \u00a7 7201; and continuing criminal enterprise, in violation of 21 U.S.C. \u00a7 848.\n\n\n3\nThe drug conspiracy involved an extensive crack cocaine distribution network in the City of Detroit, organized and directed by brothers Billy Joe and Larry Chambers, and known as the Chambers Brothers Organization. The conspiracy allegedly began in 1983 and continued through February 1988. There was testimony that the widespread and carefully structured operations generated narcotics sales of as much as $200,000 a day. The operation was conducted out of various locations in the City of Detroit and was policed by a cadre of conspirator/enforcers known as \"the wrecking crew.\" All twenty-two persons indicted were members of the organization.\n\n\n4\nAt the time of trial, four of the indictees were fugitives, and four others had pled guilty. The remaining fourteen indictees are the defendants in this case and were tried jointly. They were tried by a jury except Willie Lee Chambers, who was tried by a judge. During the trial, the government dismissed charges against four of the original defendants and the jury acquitted one. The remaining nine defendants were convicted, and now appeal.\n\n\n5\nThe nine defendants raise a host of issues, of which the following are most significant:\n\n\n6\n1. Application of the Federal Juvenile Delinquency Act of 1938, 18 U.S.C. \u00a7 5031, et seq.\n\n\n7\n2. Denial of a change of venue due to pretrial publicity.\n\n\n8\n3. Denial of a mistrial following recantation of testimony.\n\n\n9\n4. Sufficiency of the evidence of conspiracy.\n\n\n10\n5. Double jeopardy.\n\n\n11\n6. Sentence guidelines issues.\n\nWe conclude that:\n\n12\nThe convictions of Lumpkin and Wilkins must be vacated and their cases remanded for a hearing and ultimate disposition consistent with what we have said in part II-A;The convictions of Billy Joe and Larry Chambers for conspiracy and continuing criminal enterprise violate the Double Jeopardy Clause of the Fifth Amendment and one of the two convictions and its corresponding sentence must be vacated in each case; and that\n\n\n13\nAll other convictions must be affirmed.\n\nII.\nA.\nThe Federal Juvenile Delinquency Act\n\n14\nThe jury found Belinda Lumpkin and Eric Wilkins guilty of conspiracy to distribute, and conspiracy to possess with intent to distribute, \"crack\" cocaine and marijuana, in violation of 21 U.S.C. \u00a7\u00a7 841(a)(1), 846. Lumpkin and Wilkins were under eighteen years of age during the greater part of the conspiracy and performed their overt acts in furtherance of the conspiracy while they were between fifteen and eighteen years of age. Thus they were eligible for special procedural protections afforded certain juveniles under the Federal Juvenile Delinquency Act (\"FJDA\" or \"the Act\") of 1938, as amended, 18 U.S.C. \u00a7 5031 et seq. Nevertheless, the government proceeded against Lumpkin and Wilkins as adults, and they failed to invoke the Act's protection until the close of the government's case-in-chief. They then filed motions for mistrial or acquittal on the ground that the district court lacked subject-matter jurisdiction due to the government's failure to file a certification required by the Act. The government responded by tendering the statutorily required certification, along with a motion to proceed against the juvenile defendants as adults.\n\n\n15\nThe district court denied Lumpkin's and Wilkins' motions, and they appeal. The district court concluded that the certification requirement pertained to personal, rather than subject-matter, jurisdiction and that Lumpkin and Wilkins waived the issue of personal jurisdiction by failing to timely object. Alternatively, the district court concluded that the government's tender of certification at the close of its case-in-chief was timely. We agree with the district court's latter conclusion but nevertheless find it necessary to remand Lumpkin's and Wilkins' cases to the district court for further proceedings.\n\n1.\n\n16\nCongress enacted the FJDA in order to remove juveniles from the ordinary federal criminal justice system and to provide them with protections not available to adults accused of committing crimes. See United States v. Frasquillo-Zomosa, 626 F.2d 99, 101 (9th Cir.), cert. denied, 449 U.S. 987, 101 S.Ct. 405, 66 L.Ed.2d 249 (1980). The Act defines \"juvenile\" and \"juvenile delinquency\" as follows:\n\n\n17\n[A] \"juvenile\" is a person who has not attained his eighteenth birthday, ... and \"juvenile delinquency\" is the violation of a law of the United States committed by a person prior to his eighteenth birthday which would have been a crime if committed by an adult.\n\n\n18\n18 U.S.C. \u00a7 5031. Persons who have not attained age twenty one but who have committed acts of juvenile delinquency are also \"juveniles.\" Id. The statute further provides:\n\n\n19\nA juvenile alleged to have committed an act of juvenile delinquency, ... shall not be proceeded against in any court of the United States unless the Attorney General, after investigation, certifies to the appropriate district court of the United States that ... (3) the offense charged is ... an offense described in section 841 ... of title 21, and that there is a substantial Federal interest in the case or the offense to warrant the exercise of Federal jurisdiction.\n\n\n20\nIf the Attorney General does not so certify, such juvenile shall be surrendered to the appropriate legal authorities of such State.\n\n\n21\n18 U.S.C. \u00a7 5032 (emphasis added). A successful prosecution under the Act does not result in a criminal conviction but rather in an adjudication that the defendant has entered into a state of juvenile delinquency.2.\n\n\n22\nThe federal courts are courts of limited jurisdiction, see, e.g., Insurance Corp. of Ireland v. Compagnie des Bauxites, 456 U.S. 694, 701, 102 S.Ct. 2099, 2103, 72 L.Ed.2d 492 (1982), and, for purposes of jurisdiction, there exists no general federal common law. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Consequently, the district court possessed subject-matter jurisdiction with respect to Lumpkin's and Wilkins' cases only if there exists some specific constitutional or statutory provision expressly or impliedly conferring such jurisdiction.\n\n\n23\nIn cases where the federal government accuses adults of committing federal crimes such as possession with intent to distribute controlled substances, federal statutes confer jurisdiction upon the district courts. See, e.g., 18 U.S.C. \u00a7 3231; 21 U.S.C. \u00a7 841. As the district court noted, prior to the enactment of the FJDA, the government successfully relied upon such statutes as the jurisdictional basis for prosecuting juveniles in the district courts. Cf. United States v. Allen, 574 F.2d 435, 437 (8th Cir.1978).\n\n\n24\nThe enactment of the FJDA, however, reflects a legislative perception that accused juvenile offenders generally belong in the hands of state authorities, absent unusual circumstances and/or special procedural protections. The Seventh and Ninth Circuits have discussed the legislative policy underlying the FJDA as follows:\n\n\n25\nThe certification procedure in the Federal Juvenile Delinquency Act encompasses a recognition of the general policy of federal abstention. The official summary and analysis of the 1974 amendments to the Act stated:\n\n\n26\nThe federal courts and federal correctional system have never been properly equipped to handle large numbers of juveniles with the result that federal juvenile delinquents are frequently transferred away from their home communities for treatment. By deferring jurisdiction to state courts, the harmful effects of this dislocation would be reduced.\n\n\n27\n120 Cong.Rec. 25162 (1974). The certification procedure was designed to ensure that only where jurisdiction existed nowhere but in the federal courts or where the particular state did not have available programs and services adequate for the needs of juveniles were the federal courts to intrude in a juvenile case.\n\n\n28\nUnited States v. Sechrist, 640 F.2d 81, 84 (7th Cir.1981).\n\n\n29\nTheir [the certification requirements'] purpose was to help ensure that state and local authorities would deal with juvenile offenders wherever possible, keeping juveniles away from the less appropriate federal channels.\n\n\n30\n....\n\n\n31\nCongress' desire to channel juveniles into state and local treatment programs ... [is] clearly expressed in the legislative history of section 5032....\n\n\n32\nUnited States v. Juvenile Male, 864 F.2d 641, 644 (9th Cir.1988). In short, Congress \"recognized that the federal court system is at best ill equipped to meet the needs of juvenile offenders. Deference to the state courts should always be observed except in the most severe of cases.\" United States v. Juvenile, 599 F.Supp. 1126, 1130 (D.Ore.1984).\n\n\n33\nOur review of this legislative policy and of the structure of the FJDA, especially sections 5031 and 5032, leads us to conclude that the FJDA impliedly revoked the district courts' preexisting, largely unrestricted subject-matter jurisdiction over criminal prosecutions against juveniles. The FJDA accomplished this result, we believe, by effectively establishing that the acts which federal statutes declare to be criminal are generally noncriminal when committed by juveniles. As noted, juveniles committing these acts merely enter into a state of \"juvenile delinquency,\" defined as a \"violation of a law of the United States committed by a person prior to his eighteenth birthday which would have been a crime if committed by an adult.\" 18 U.S.C. \u00a7 5031 (emphasis added). If juveniles generally commit no \"crimes\" when performing these acts, the district court and government cannot rely upon the criminal statutes as a basis for the court's assumption of jurisdiction over the prosecution of juveniles. Rather the district court generally must surrender the accused juveniles to the appropriate state authorities. See 18 U.S.C. \u00a7 5032.\n\n\n34\nOf course, the jurisdiction which Congress took away from the federal courts with one hand Congress partially restored with the other hand. Congress conferred jurisdiction upon the district courts to proceed, under the authority of section 5032, against juveniles committing acts that would be federal crimes if committed by adults, where the prosecution meets the statutorily prescribed certification requirements set forth above.1 Accordingly, the certification requirement is a prerequisite to the district court's subject-matter jurisdiction in cases where the government proceeds against juveniles accused of performing acts which would be federal crimes if committed by adults. In other words, Congress effectively eliminated the underage defendant's \"crime,\" and replaced it with \"juvenile delinquency,\" a state vesting jurisdiction in the federal courts under the terms of section 5032 or not at all.\n\n\n35\nOur conclusions may come into apparent conflict with some language found in the Eighth Circuit's opinion in Allen, 574 F.2d at 435. Addressing a different type of jurisdictional problem related to the FJDA, the Allen court noted:\n\n\n36\n[The juvenile] was found by the trial court to have committed assault with a deadly weapon, an act cognizable under [18 U.S.C.] \u00a7 1153. The fact that he elected to be treated procedurally as a juvenile did not alter the underlying federal jurisdiction by making his acts any less violative of that statute. The existence of primary federal jurisdiction under \u00a7 1153 is evident when it is considered that [the juvenile] could have waived treatment as a juvenile and requested criminal prosecution as an adult.\n\n\n37\nId. at 437-38. This sweeping, overly broad language overlooks the fact that the minor would not have been in a position to waive, or not to waive, anything had the district court not first properly obtained jurisdiction over the case following the prosecution's tendering of an effective certification. See id. at 438. Moreover, whatever implications the government seeks to draw from the Allen decision, the Eighth Circuit itself probably has disavowed such implications in a more recent decision. See United States v. Juvenile Male, 923 F.2d 614 (8th Cir.1991).\n\n3.\n\n38\nHere, as its first ground for denying defendants' motion, the district court concluded that the jurisdictional defect under section 5032 pertained to personal, rather than subject-matter, jurisdiction and hence was waivable by the juveniles. The Supreme Court has described the distinction between subject-matter and personal jurisdiction as follows:\n\n\n39\nSubject-matter jurisdiction ... is an Article III as well as a statutory requirement; it functions as a restriction on federal power, and contributes to the characterization of the federal sovereign.\n\n\n40\n....\n\n\n41\nThe requirement that a court have personal jurisdiction flows not from Art III, but from the Due Process Clause. The personal jurisdiction requirement recognizes and protects an individual liberty interest. It represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty. Thus, the test for personal jurisdiction requires that \"the maintenance of the suit ... not offend 'traditional notions of fair play and substantial justice.' \"\n\n\n42\nCompagnie des Bauxites, 456 U.S. at 702-03, 102 S.Ct. at 2103-04 (footnote omitted) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). While lack of personal jurisdiction is a waivable defect, lack of subject-matter jurisdiction is a nonwaivable defect which may be raised by any party at any time. See id. at 703-04, 102 S.Ct. at 2104-05; Fed.R.Crim.P. 12(b)(2).\n\n\n43\nIn enacting section 5032's certification requirement, Congress concerned itself primarily with the proper allocation, between state and federal government, of the power to decide cases involving juveniles accused of acts generally made criminal by federal statutes. By contrast, Congress concerned itself very little or not at all with juveniles' individual liberty interests and with notions of fair play. Thus section 5032's certification requirement bears upon the issue of subject-matter, not personal, jurisdiction.2\n\n\n44\nAccordingly, we conclude that the district court lacked jurisdiction over Lumpkin's and Wilkins' cases, absent a timely tender of the statutorily mandated certification.\n\n4.\n\n45\nWe turn now to the task of determining whether the government's tender of the certification was timely.\n\n\n46\nAt the outset, we note that establishing the factors necessary for federal jurisdiction is not always a prerequisite to initiating federal proceedings. A federal court may assume jurisdiction, for example, for the purpose of determining its jurisdiction. As the Fifth Circuit has noted, \"While [section 5032] obviously intends that deference be given state court juvenile processes where they are available, its phraseology requires no abdication of federal jurisdiction to begin an action.\" United States v. Cuomo, 525 F.2d 1285, 1290 (5th Cir.1976).\n\n\n47\nWithout deciding whether a certification appended to the government's appellate brief was too late, the Ninth Circuit has noted, \"[Section 5032] does not set forth when the certification need be filed.... [The statute also] does not state that proceedings cannot be undertaken until a certificate is filed.\" United States v. Gonzalez-Cervantes, 668 F.2d 1073, 1077 n. 6 (9th Cir.1981) (emphasis in original). Similarly, a federal district court has recognized that section 5032 does not require a certification before a underage defendant has been \"proceeded against.\" United States v. Ramapuram, 432 F.Supp. 140, 143 (D.Md.1977), aff'd, 577 F.2d 738 (4th Cir.) (unpublished), cert. denied, 439 U.S. 926, 99 S.Ct. 309, 58 L.Ed.2d 318 (1978). The district court reasoned:\n\n\n48\nBoth the statutory language and S.Rep. 93-1011 state that a juvenile shall not be proceeded against in federal court \"unless\" there is filed a proper certification. Neither source declares that there may be no proceedings \"until\" a proper certification is filed. Nor is the language to the effect that there may be no proceedings \"unless\" a certification is \"first\" filed. In short, there is no language of priority.\n\n\n49\nId.\n\n\n50\nWe conclude that under the circumstances of this case, the government's certification was timely when tendered at the close of its case-in-chief. Lumpkin and Wilkins may protest that the delayed certification imposed an unnecessary hardship upon the defense. However, without endorsing the government's regrettable tardiness in tendering the delayed certification, a jurisdictional prerequisite, we might point out that the defense was as much at fault as the government in failing to raise the issue of the defendants' juvenile status at an earlier stage of the proceedings. Had Lumpkin and Wilkins challenged the court's jurisdiction at an earlier point, the government would have had no choice but to tender the certification immediately. Moreover, Lumpkin and Wilkins have failed to show us how they were prejudiced by not receiving the certification at an earlier date.5.\n\n\n51\nUnder section 5032, proper certification confers jurisdiction upon the district court to proceed against a juvenile offender; however, certification alone does not determine whether the government must proceed against the juvenile as a juvenile, with the special procedural protections afforded by the Act, or whether the government may proceed against the juvenile as an adult, in a criminal prosecution. With respect to this issue, section 5032 provides in pertinent part as follows:\n\n\n52\n[N]o criminal prosecution shall be instituted for the alleged act of juvenile delinquency except as provided below.\n\n\n53\n[W]ith respect to a juvenile fifteen years and older alleged to have committed an act after his fifteenth birthday which if committed by an adult would be a felony that is ... an offense described in section 841 ... of title 21, criminal prosecution ... may be begun by motion to transfer of the Attorney General in the appropriate district court of the United States, if such court finds, after hearing, such transfer [for prosecution as an adult] would be in the interest of justice....\n\n\n54\nEvidence of the following factors shall be considered, and findings with regard to each factor shall be made in the record, in assessing whether a transfer would be in the interest of justice: the age and social background of the juvenile; the nature of the alleged offense; the extent and nature of the juvenile's prior delinquency record; the juvenile's present intellectual development and psychological maturity; the nature of past treatment efforts and the juvenile's response to such efforts; the availability of programs designed to treat the juvenile's behavioral problems.\n\n\n55\n18 U.S.C. \u00a7 5032.\n\n\n56\nWhile the government filed a motion to proceed against Lumpkin and Wilkins as adults, the district court held no hearing to evaluate the propriety, in light of the above-listed factors, of so proceeding. If the district court had held such a hearing and found it in the interest of justice to try Lumpkin and Wilkins as adults, the court properly could have allowed the ongoing criminal prosecution to continue. On the other hand, if the district court, after the required hearing, had found it not to be in the interest of justice to try them as adults, the district court would have been obliged to dismiss the criminal prosecution and treat the action as a delinquency proceeding.3\n\n\n57\nUnder these circumstances, the appropriate remedy is to vacate Lumpkin's and Wilkins' convictions and remand their cases for the statutorily required hearing concerning the propriety of prosecuting them as adults. Cf. United States v. C.G., 736 F.2d 1474, 1479 (11th Cir.1984). On remand, the district court shall hold a hearing and make the required fact findings based upon the circumstances existing at the time of Lumpkin's and Wilkins' trial, giving no regard to subsequent events occurring as a result of the criminal prosecutions and convictions. Cf. Powell v. Hocker, 453 F.2d 652, 656-57 (9th Cir.1971). Only if the court determines that the interest of justice dictates prosecuting Lumpkin and Wilkins as adults shall the court reinstate their convictions.\n\nB.\nChange of Venue Due to Pretrial Publicity\n\n58\nLarry Chambers and Jerry Gant argue that the district court abused its discretion in denying defendant Larry Chambers' motion for change of venue due to prejudicial pretrial publicity. Fed.R.Crim.P. 21(a). The principal basis for their claim relates to the television news broadcasting of a home video seized during a police drug raid at the home of defendant Larry Chambers. On the video, Chambers and one M.C. Poole are discussing their enormous profits, presumably from narcotics trafficking, while Poole is counting the money. The video was broadcast in the Metropolitan Detroit area, and indeed elsewhere in the nation, several times prior to trial and during the time the jury selection was in progress. In addition, one local station had a week-long series on the Chambers Brothers Organization drug ring which was entitled, \"All In the Family,\" and which was broadcast five months before Larry Chambers was arrested. The pervasive pretrial publicity, defendants argue, made selection of an impartial jury impossible and required a change of venue.\n\n\n59\nDefendants rely on Rideau v. Louisiana, 373 U.S. 723, 83 S.Ct. 1417, 10 L.Ed.2d 663 (1963), to contend that it must be presumed that the pretrial publicity made a fair trial impossible. In Rideau, the defendant's detailed confession was broadcast on a local television station three times within the two months before trial. The Supreme Court held that, in reality, Rideau's trial occurred on television, not in the courtroom. Id. at 726, 83 S.Ct. at 1419.\n\n\n60\nIn Rideau, prejudice was presumed because the influence of the media pervaded the proceedings. Murphy v. Florida, 421 U.S. 794, 798-99, 95 S.Ct. 2031, 2035-36, 44 L.Ed.2d 589 (1975). However, Rideau is the exception not the rule. A juror's exposure to news accounts about the crime charged, standing alone, does not presumptively establish that the defendant was denied a fair trial. Murphy, 421 U.S. at 799, 95 S.Ct. at 2035. Fairness requires that the defendant be tried by an impartial, indifferent jury. Id. The test for change of venue due to pretrial publicity does not depend on the amount of media coverage but rather whether \" 'the juror can lay aside his impression or opinion and render a verdict based on the evidence presented in court.' \" Murphy, 421 U.S. at 800, 95 S.Ct. at 2036 (quoting Irvin v. Dowd, 366 U.S. 717, 723, 81 S.Ct. 1639, 1642, 6 L.Ed.2d 751 (1961)); see also United States v. Johnson, 584 F.2d 148, 154 (6th Cir.1978), cert. denied, 440 U.S. 918, 99 S.Ct. 1239, 1240, 59 L.Ed.2d 469 (1979).\n\n\n61\nThe jury voir dire in this case was extensive: prospective jurors completed questionnaires; each defendant was given fourteen peremptory challenges; and the judge was very lenient in granting challenges for cause. Defendants cite to several portions of the transcript where jurors admitted they had heard about the case or expressed fear about serving on the jury. The record reveals that these jurors were excused, unless they stated they could remain impartial, presume defendants' innocent, and render a verdict based on the evidence at trial. The district court went to great lengths to insure that the impaneled jurors were not influenced by any pretrial publicity. We note that the defendants did not use all of their peremptory challenges. The district court did not abuse its discretion in denying the change of venue motion. Cf. United States v. Ebens, 800 F.2d 1422, 1426-27 (6th Cir.1986).\n\nC.\n\n62\nMotion for Mistrial Following Recantation of Testimony\n\n\n63\nPerry Coleman testified at trial under a plea agreement that reduced his sentence for conspiracy to deliver cocaine from twenty years to five years imprisonment. His testimony linked Billy Joe Chambers, Willie Chambers, and Jerry Gant to the drug conspiracy. After an overnight recess, Coleman again took the stand and testified, out of the presence of the jury, that he was concerned for his own safety and that of his wife, and that the previous day he lied about \"everything.\" The district court found that Coleman was unworthy of belief and ordered his testimony stricken from the record. As a result, the government dismissed the indictment against two of the defendants.\n\n\n64\nDefendants moved for mistrial because Coleman testified for about thirty minutes and his testimony was damaging and prejudicial. The government countered that the jury would be instructed to disregard the testimony and that there was other overwhelming evidence of the remaining defendants' involvement in the conspiracy. The district court denied the motion for mistrial, and instructed the jury as follows:\n\n\n65\nLadies and gentlemen, yesterday when we broke Perry Coleman was on the witness stand. You are to disregard anything he has said, anything he has said whatsoever. If you have notes on what he has said tear them out, throw them away when you go back in there. They are nothing for you to consider one way or the other in this matter whatsoever. I want you to erase it from your mind as if he was never in this courtroom.\n\n\n66\nOn appeal, Billy Joe Chambers argues that the curative instruction was inadequate to erase the prejudice that resulted from Coleman's testimony and that the district court abused its discretion in failing to declare a mistrial.\n\n\n67\nWe review the denial of a motion for mistrial for an abuse of discretion. United States v. Atisha, 804 F.2d 920, 926 (6th Cir.1986), cert. denied, 479 U.S. 1067, 107 S.Ct. 955, 93 L.Ed.2d 1003 (1987). \"[A] determination of the fairness to the accused is the primary concern in ruling upon a mistrial motion....\" Id. Generally, \"the subsequent striking of erroneously admitted evidence accompanied by a clear and positive instruction to the jury to disregard it cures the error\" unless the stricken evidence is so prejudicial that its harmful effect cannot be eliminated. United States v. Greene, 400 F.2d 847, 848 (6th Cir.1968).\n\n\n68\nIn this case, Coleman's testimony was introduced by the government in good faith and only the next day, when the witness professed fear for his own safety and that of his family, did he recant. The court's clear and direct curative instruction was promptly given and we are offered no logical reason to conclude that the jurors were unwilling or unable to obey it. Moreover, a number of other witnesses testified as to Billy Joe Chambers' involvement in the conspiracy; thus Coleman's testimony could be regarded as merely cumulative. Accordingly, we conclude that the testimony was not so singular or prejudicial that the court's instruction could not cure its admission. Cf. United States v. Bowers, 739 F.2d 1050, 1055 (6th Cir.), cert. denied, 469 U.S. 861, 105 S.Ct. 195, 83 L.Ed.2d 128 (1984). The district court did not abuse its discretion in refusing to grant a mistrial.\n\nD.\n\n69\nMotion for a New Trial Based on the Recantation of Testimony\n\nGiven at Trial by Terry Colbert\n\n70\nSome five months after the guilty verdicts, defendants filed a motion for new trial based on newly discovered evidence. Fed.R.Crim.P. 33. Attached to the motion was an affidavit from Terry Colbert, a government informant and witness at trial. Colbert's affidavit stated that many of his statements at trial were untrue and that he was pressured by the government to cooperate or face a long prison sentence. The affidavit specifically recanted facts about Billy Joe, Larry, and Willie Chambers.\n\n\n71\nColbert testified at a posttrial evidentiary hearing conducted by the district court on June 14, 1989. At the conclusion of the hearing, the district judge stated that he was skeptical of Colbert's hearing testimony and thought that Colbert's fear of the Chambers organization was greater than his fear of incarceration. In its written opinion, the court found Colbert's recantation totally incredible:\n\n\n72\nMr. Colbert's \"recantation\" consists of numerous contradictions and several claims that his testimony at trial was exaggerated.... Mr. Colbert confirmed that the Chambers organization was selling \"crack\" cocaine but simply claimed he lied at trial about the scope of the organization....\n\n\n73\nMr. Colbert's testimony ... is further contradicted by the testimony of numerous law enforcement officers who made drug arrests of members of the Chambers organization based on information acquired from Mr. Colbert. In addition, the testimony of Deputy Marshal Scott Dyer supplies substantial motive for fabricating the recent recantation. During an interview with Deputy Marshal Dyer on May 19, 1989, Mr. Colbert told Dyer \"you don't know what it's like on the street ... you did not lock them all up.\" Mr. Colbert also stated he feared for his family....\n\n\n74\nFinally, Mr. Colbert's trial testimony was consistent with the testimony of numerous ... other government witnesses. [The court listed some examples of the consistencies.]\n\nThe court concluded:\n\n75\nBased on these consistencies between Mr. Colbert's trial testimony and the testimony of at least ten other witnesses, Mr. Colbert's demeanor during both occasions, and Mr. Colbert's motive to fabricate the recantation, the Court finds Mr. Colbert's trial testimony to be credible and Mr. Colbert's recent recantation to be wholly unbelievable.\n\n\n76\nThis court reviews a denial of a motion for new trial for an abuse of discretion. United States v. Barlow, 693 F.2d 954, 966 (6th Cir.1982), cert. denied, 461 U.S. 945, 103 S.Ct. 2124, 77 L.Ed.2d 1304 (1983). A motion for new trial based on newly discovered evidence requires the defendant to show that \"the evidence (1) was discovered only after trial, (2) could not have been discovered earlier with due diligence, (3) is material and not merely cumulative or impeaching, and (4) would likely produce an acquittal if the case were retried.\" Id.\n\n\n77\nRecanting affidavits and witnesses are viewed with extreme suspicion. United States v. Kearney, 682 F.2d 214, 219 (D.C.Cir.1982) (citing United States v. Lewis, 338 F.2d 137 (6th Cir.1964), cert. denied, 380 U.S. 978, 85 S.Ct. 1342, 14 L.Ed.2d 272 (1965)).\n\n\n78\nIn considering a motion for new trial based on the contention that an affidavit by a recanting witness constitutes newly discovered evidence the first test to be applied by the judge is whether the court is reasonably well satisfied that the prior testimony was false. Gordon v. United States, 178 F.2d 896, 900 (6th Cir.1949). If that first and primary ground is not satisfied, the primary ground for granting the new trial is lacking. Id.\n\n\n79\nKearney, 682 F.2d at 220.\n\n\n80\nIn this case, the district court had the opportunity to observe Colbert's demeanor and assess his credibility both at trial and at the evidentiary hearing. The court was uniquely qualified to pass on Colbert's credibility. Particularly given the court's reasons for rejecting Colbert's recantation, we defer to the court's judgment. United States v. Adi, 759 F.2d 404, 408-09 (5th Cir.1985).\n\n\n81\nWe conclude the district court did not abuse its discretion in denying the motion for new trial.\n\nE.\n\n82\nRefusal to Permit Testimony at the Hearing on the Motion for New Trial\n\n\n83\nAt the hearing on the motion for new trial based on Colbert's recantation, Larry Chambers, against the advice of counsel, asked to be permitted to testify in order to corroborate some of Colbert's statements; namely, that the cocaine \"was planted on him\" and that he was a victim of \"police brutality.\" The court refused to permit the testimony as improper upon a motion for new trial based on newly discovered evidence because defendant could have testified at trial about the matters he wished to raise in the posttrial hearing, and that the matters were not, therefore, newly discovered evidence. Larry Chambers also wanted to refute the government's allegation that Colbert was threatened by someone in the Chambers organization. The court found that such testimony raised merely a credibility issue. The court stated that it would allow defendant to testify if he could show that his testimony would be proper for a new trial motion but that the court declined to retry the case. Defense counsel responded that he would proceed by affidavit.\n\n\n84\nOn appeal, Larry Chambers contends that his proffered testimony was relevant and that the district court erred in denying him his \"constitutional right\" to testify at the posttrial hearing.\n\n\n85\nThe Constitution guarantees a defendant the right to testify on his own behalf at a criminal trial. Rock v. Arkansas, 483 U.S. 44, 51-53, 107 S.Ct. 2704, 2708-09, 97 L.Ed.2d 37 (1987). Moreover, the constitutional procedural due process required at some extrajudicial proceedings, such as parole or probation revocation hearings or hearings on the termination of welfare benefits, also include the right to testify on one's own behalf. Id. at 51 n. 9, 107 S.Ct. at 2709 n. 9. However, the defendant fails to cite any authority that the constitutional right to testify extends to a motion for new trial hearing, and particularly not upon matters of which the defendant had knowledge at the time of trial.\n\n\n86\nThe district court did not err in denying defendant's request to testify. The court gave defendant the opportunity to convince the court that the testimony was proper, and rather than presenting further arguments, defendant elected to proceed by affidavit.\n\nF.\nClaim of Withdrawal from the Conspiracy\n\n87\nElayne Coleman Lucas contends that the evidence establishes that she withdrew from the conspiracy on September 3, 1984, the date she was arrested. On that date, she told the authorities that she had sold crack cocaine. There was no evidence presented at trial that she was involved in the conspiracy after the date of her arrest. Lucas contends the district court erred in refusing to instruct the jury that she had withdrawn from the conspiracy.\n\n\n88\nWithdrawal from a conspiracy is an affirmative defense. United States v. Battista, 646 F.2d 237, 246 (6th Cir.), cert. denied, 454 U.S. 1046, 102 S.Ct. 586, 70 L.Ed.2d 488 (1981).\n\n\n89\nMere cessation of activity in furtherance of an illegal conspiracy does not necessarily constitute withdrawal. The defendant must present evidence of some affirmative act of withdrawal on his part, typically either a full confession to the authorities or communication to his co-conspirators that he has abandoned the enterprise and its goals.\n\n\n90\nUnited States v. Steele, 685 F.2d 793, 803-04 (3d Cir.), cert. denied, 459 U.S. 908, 103 S.Ct. 213, 74 L.Ed.2d 170 (1982). See also, Battista, 646 F.2d at 246.\n\n\n91\nOn September 1, 1984, a police officer made a controlled purchase of crack cocaine from Lucas at the upstairs flat of a two-family home on Gray Street in Detroit. Two days later, the police raided the home and arrested Lucas upstairs and Billie Lee Chambers downstairs. Lucas made a statement to the police in which she admitted selling $100 worth of cocaine, but otherwise provided little information. She said the cocaine was there when she arrived at the home, she was let in by a female friend, she left the money there, and did not know who lived downstairs.\n\n\n92\nTo establish withdrawal from a conspiracy, the defendant must show an affirmative act establishing withdrawal. The absence of proof that Lucas continued in the conspiracy after her arrest does not require a finding that she withdrew. Lucas' statement does not amount to an affirmative act of withdrawal from the conspiracy. Her statement is not a full confession and, in fact, evidences a lack of cooperation with authorities.\n\n\n93\nWithdrawal is not a defense when the object of the conspiracy has been completed, or the defendant has committed an overt act toward its completion. United States v. Collins, 779 F.2d 1520 (11th Cir.1986). There was evidence that prior to her purported statement of withdrawal, Lucas had been selling narcotics for over a month and had sold cocaine to an undercover officer. Lucas' attempt, after her arrest, to withdraw from the conspiracy did not affect her active involvement in the enterprise prior to that date.\n\nG.\nSufficiency of the Evidence of Conspiracy\n\n94\nWillie and Otis Chambers, and Lucas claim there was insufficient evidence to tie them to the conspiracy. This court reviews a sufficiency of the evidence claim by determining \"whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.\" Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (emphasis in original), reh'g denied, 444 U.S. 890, 100 S.Ct. 195, 62 L.Ed.2d 126 (1979).\n\n1.\nWillie Chambers\n\n95\nWillie Chambers contends that since the only testimony linking him to the conspiracy is the testimony of Terry Colbert, the witness who recanted his testimony after the trial, the evidence is insufficient to convict him of conspiracy. This claim is dependent, of course, upon the success of the earlier argument that Colbert's recanted testimony should result in a new trial. However, we have found that the district court did not abuse its discretion in denying defendants' new trial motion and we accept the court's conclusion that Colbert's trial testimony implicating Willie Chambers was credible. Therefore, Willie Chambers' sufficiency of the evidence claim must be rejected.\n\n2.\nOtis Chambers\n\n96\nOtis Chambers contends that the evidence was insufficient to show he was a member of any drug conspiracy and that in order to convict him of conspiracy, the jury had to build inference upon inference. He also asserts that the district court failed to make the preliminary determination required for the admission of a co-conspirator's statement that a preponderance of the evidence established that a conspiracy existed, and that the co-conspirator's statement was made during the course of and in furtherance of the conspiracy. See Fed.R.Evid. 801(d)(2)(E); see also Bourjaily v. United States, 483 U.S. 171, 175, 180, 107 S.Ct. 2775, 2778, 2781, 97 L.Ed.2d 144 (1987); United States v. Enright, 579 F.2d 980, 984-85 (6th Cir.1978).\n\n\n97\nThree witnesses testified against Otis Chambers: Terry Colbert, Karen Hurst, and Police Chief Herbert Neighbors. Otis contends that the testimony of Colbert and Hurst was uncorroborated, and that the testimony of Chief Neighbors established mere association.\n\n\n98\nTerry Colbert testified that in July of 1986 or 1987, he was selling crack for Billy Joe Chambers at a house owned by his uncle on the west side of Detroit. Otis Chambers was a drop off and pick up man there. In July, Colbert's uncle got into an argument with Otis because the Chambers Organization owed his uncle rent money for using his house to sell crack. Otis left and returned a half hour later with four men; one struck the uncle with a baseball bat and another, at Otis' direction, shot him twice in the leg.\n\n\n99\nKaren Hurst testified that in late summer of 1986 she was in the basement of a house on Wilfred with Billy Joe, Otis and others. She had bought a set of glass pots and six boxes of baking soda. Otis was taking the glass pots out of the carton when she left. On another occasion at the house, she saw white powder on a wooden table and two men were mixing in baking soda. Otis was present, speaking on the telephone.\n\n\n100\nThe proofs at trial indicated that the Chambers Organization recruited members from Marianna, Arkansas, the Chambers brothers' hometown. Hughes, Arkansas is twenty-two miles north of Marianna, Arkansas. Hughes, Arkansas Police Chief Neighbors testified that on April 24, 1987, at 4:00 p.m., he and his partner stopped a blue Corvette for running a stop sign. The female driver had no license or identification. The male passenger was Otis Chambers. Otis said he borrowed the car from a friend to drive from Detroit to Marianna to visit his people. Both driver and passenger were taken to the police station in the patrol car and Chief Neighbors followed in the Corvette. Behind the Corvette's passenger seat was a large plastic garbage bag containing $59,624. The money was confiscated by the IRS.\n\n\n101\nManifestly, the evidence is sufficient to establish that Otis was a member of the conspiracy for purposes of the admission of any statements by a co-conspirator, and for a rational jury to conclude that defendant's membership was proven beyond a reasonable doubt.\n\n3.\nElayne Coleman Lucas\n\n102\nLucas argues that there was insufficient evidence to show that she was a member of the conspiracy. Lucas notes that when the government introduced the statement she made following her arrest, the government's attorney, in response to an objection by counsel for a codefendant, stated, \"[t]he confession is not to the conspiracy but it is admissible as to a cocaine seller and Elaine [sic] Coleman is a cocaine seller.\" Lucas contends that this response establishes that the government abandoned its theory that she was a member of the conspiracy.\n\n\n103\nLucas does not contest the evidence establishing the existence of a conspiracy but rather contends the evidence is insufficient to show she was a member of it. \"Once a conspiracy is established, only slight evidence is necessary to connect a defendant with it.\" United States v. Votteller, 544 F.2d 1355, 1359 (6th Cir.1976).\n\n\n104\nTerry Colbert testified that in a two-family flat on Gray Street in Detroit, the Chambers Organization was making crack cocaine downstairs and selling it upstairs. He testified that Lucas sold crack from the upstairs flat in August 1984 and that she sold it for about a month. Lucas ran the upstairs sales operation and Billy Joe Chambers ran the downstairs manufacturing operation. Officer John Autrey testified that he purchased three bags of cocaine from Lucas at the Gray Street upstairs flat on September 1, 1984. On September 3, officers raided the upstairs flat and arrested Lucas after she had fled to the lower flat. In the lower flat, the officers discovered Billy Joe Chambers and others preparing crack cocaine. Thus, even absent her statement following her arrest, there is sufficient evidence to establish that Lucas was a member of the drug conspiracy.\n\nH.\n\n105\nSufficiency of the Evidence Concerning Use of a Firearm\n\n\n106\nduring a Drug Trafficking Offense\n\n\n107\nOn December 19, 1987, a search warrant was executed on an apartment on East Outer Drive in Detroit. Larry Chambers was found in the bathroom; no one else was in the apartment. Chambers had keys to the apartment. Cocaine was seized from the kitchen. A firearm was found in an open cupboard above the stove in the kitchen. On appeal, Larry Chambers contends there was insufficient evidence to establish he had actual possession of the firearm.\n\n18 U.S.C. \u00a7 924(c)(1) provides in part:\n\n108\nWhoever, during and in relation to any ... drug trafficking crime ..., uses or carries a firearm, shall ... be sentenced to imprisonment for five years....\n\nThis circuit has held:\n\n109\n[I]f it reasonably appears that the firearms found on the premises controlled or owned by a defendant and in his actual or constructive possession are to be used to protect the drugs or otherwise facilitate a drug transaction, then such firearms are used \"during and in relation to\" a drug trafficking crime.\n\n\n110\nUnited States v. Henry, 878 F.2d 937, 944 (6th Cir.1989). This circuit has also held that \"the statute does not require actual physical possession of a weapon or that the defendant actually brandished the weapon in the commission of a drug offense.\" United States v. Acosta-Cazares, 878 F.2d 945, 952 (6th Cir.), cert. denied, 493 U.S. 899, 110 S.Ct. 255, 107 L.Ed.2d 204 (1989). We noted that \" 'uses' and 'carries' should be construed broadly to cover the gamut of situations where drug traffickers have ready access to weapons with which they secure or enforce their transactions.\" Id.\n\n\n111\nPolice found defendant alone in the apartment, cocaine was on the kitchen table, and a gun was in an open nearby cupboard. As this court stated in Acosta-Cazares:From this evidence, a jury could reasonably infer that defendant used weapons during the conspiracy and in connection with the substantive drug offenses. Viewing the evidence in the light most favorable to the government, the evidence links defendant to the weapons and the weapons to the underlying drug trafficking convictions.\n\n\n112\nId.\n\n\n113\nTherefore, we conclude that Larry Chambers' claim based upon insufficiency of the evidence lacks merit.\n\nI.\n\n114\nConspiracy and Continuing Criminal Enterprise\n\n\n115\nBilly Joe and Larry Chambers were convicted of conspiracy to distribute and to possess with the intent to distribute cocaine, in violation of 21 U.S.C. \u00a7\u00a7 841(a)(1), 846, and of operating a continuing criminal enterprise, in violation of 21 U.S.C. \u00a7 848. Billy Joe was sentenced to concurrent terms of 365 months imprisonment and five years supervised release. Larry was sentenced to concurrent life terms, a consecutive five-year term for possession of a firearm during a drug trafficking offense, and five years supervised release. On appeal, they argue that conspiracy is a lesser included offense of continuing criminal enterprise and, therefore, punishment for both offenses violates the Double Jeopardy Clause. Both defendants ask this court to remand for resentencing. In addition, Larry Chambers requests that we vacate the conspiracy conviction and remand for resentencing on continuing criminal enterprise.\n\n\n116\nThe government concedes that the convictions for both conspiracy and continuing criminal enterprise cannot stand and the case must be remanded to the district court for dismissal of one of the convictions. However, the government argues that the district court has the discretion to vacate either the conspiracy or the continuing criminal enterprise conviction. In support of its argument that the continuing criminal enterprise conviction should be vacated, the government states:\n\n\n117\nBecause of an anomaly in the sentencing guidelines, Larry Chambers' adjusted offense level for conspiracy is 40, while his adjusted offense level for CCE is only 36, making the conspiracy charge more serious than CCE.7 It would be an odd result, to say the least, for Larry and Billy Joe Chambers to receive a benefit as a result of being convicted of both CCE and conspiracy, instead of only the ordinarily less serious conspiracy charge.\n\n\n118\nIn Jeffers v. United States, 432 U.S. 137, 153, 155, 97 S.Ct. 2207, 2217, 2218, 53 L.Ed.2d 168 reh'g denied, 434 U.S. 880, 98 S.Ct. 241, 54 L.Ed.2d 164 (1977), the Supreme Court held that a defendant could be tried on multiple narcotic offenses arising from the same acts without raising a double jeopardy question even if some offenses are lesser included offenses of others; however, Congress did not intend to allow cumulative punishment for violations of section 846, conspiracy, and section 848, continuing criminal enterprise. In Ball v. United States, 470 U.S. 856, 864-65, 105 S.Ct. 1668, 1673, 84 L.Ed.2d 740 (1985), the Supreme Court held the district court cannot merely order the convictions be served concurrently; rather, the district court must exercise its discretion and vacate one of the sentences.\n\n\n119\nIn United States v. Schuster, 769 F.2d 337, 345 (6th Cir.1985), cert. denied, 475 U.S. 1021, 106 S.Ct. 1210, 89 L.Ed.2d 322 (1986), this court remanded the case and instructed the district court to vacate the convictions for conspiracy, which is a lesser included offense of continuing criminal enterprise, and merge the convictions into the continuing criminal enterprise offense. In United States v. Davis, 809 F.2d 1194, 1204-05 (6th Cir.), cert. denied, 483 U.S. 1007, 107 S.Ct. 3234, 3235, 97 L.Ed.2d 740 (1987), this court again upheld the continuing criminal enterprise conviction and remanded with instructions to dismiss the conspiracy convictions.\n\n\n120\nOther circuits agree that in such circumstances, the convictions and sentences for conspiracy, the lesser included offense of continuing criminal enterprise, must be vacated. See United States v. Grubbs, 829 F.2d 18, 19 (8th Cir.1987); United States v. Brantley, 733 F.2d 1429, 1436 (11th Cir.1984), cert. denied, 470 U.S. 1006, 105 S.Ct. 1362, 84 L.Ed.2d 383 (1985); United States v. Jefferson, 714 F.2d 689, 703-06 (7th Cir.1983); see also United States v. Buckley, 586 F.2d 498, 505 (5th Cir.1978), cert. denied, 440 U.S. 982, 99 S.Ct. 1792, 60 L.Ed.2d 242 (1979); United States v. Rosenthal, 454 F.2d 1252, 1255 (2d Cir.), cert. denied, 406 U.S. 931, 92 S.Ct. 1801, 32 L.Ed.2d 134 (1972).\n\n\n121\nNone of those cases discuss, however, any reason for selecting the conspiracy conviction, rather than the continuing criminal enterprise conviction, for dismissal except to observe that the conspiracy offense is the \"lesser\" of the two. In this case, however, measured by the guidelines-prescribed sentences at least, conspiracy is not the less serious offense because of what the government calls \"an anomaly in the sentencing guidelines,\" although it is, in terms of its elements, included in the criminal enterprise offense.\n\n\n122\nLarry Chambers' adjusted offense level for conspiracy is 40, while his adjusted offense level for continuing criminal enterprise is only 36. Chambers wants the conspiracy conviction vacated, and the government wants the continuing criminal enterprise conviction vacated. There being no binding precedent directly controlling the matter, we think it is a decision for the trial court to make. We shall, therefore, remand Billy Joe and Larry Chambers' convictions for conspiracy and continuing criminal enterprise, with instructions that the district court vacate one of the two convictions and its corresponding sentence in each defendant's case. The district court must also consider what, if any, effect the vacated conviction and sentence will have upon sentences imposed under the guidelines for each defendant's other convictions. See, e.g., U.S.S.G. \u00a7 3D1.2(d).\n\nJ.\nSentencing Guidelines Issues\n1.\nEx Post Facto Clause\n\n123\nWillie and Otis Chambers, and Lucas argue that the sentencing guidelines do not apply to them because there was no evidence presented at trial to show they committed any illegal act after November 1, 1987, the effective date of the sentencing guidelines. Relying on Miller v. Florida, 482 U.S. 423, 107 S.Ct. 2446, 96 L.Ed.2d 351 (1987), the defendants contend that the use of the sentencing guidelines violates the Ex Post Facto Clause of the Constitution. Therefore, defendants ask that we vacate the sentences imposed under the guidelines and remand to the district court for resentencing.\n\n\n124\nCourts addressing the issue have held that the sentencing guidelines apply to a conspiracy that began before November 1, 1987, but continued past November 1, 1987, the effective date of the guidelines. These courts reason that the Ex Post Facto Clause is not violated by applying the sentencing guidelines when the conspiracy continues after the effective date of the guidelines because conspiracy is a continuing offense. See, e.g., United States v. Terzado-Madruga, 897 F.2d 1099, 1124 (11th Cir.1990); United States v. Sheffer, 896 F.2d 842, 844 (4th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 432, 112 L.Ed.2d 416 (1990); United States v. Tharp, 892 F.2d 691, 693 (8th Cir.1989); United States v. White, 869 F.2d 822, 826 (5th Cir.), cert. denied, 490 U.S. 1112, 109 S.Ct. 3172, 104 L.Ed.2d 1033 (1989). A defendant may avoid being sentenced under the guidelines only if the defendant can show that the withdrawal from the conspiracy occurred before November 1, 1987. See United States v. Williams, 897 F.2d 1034, 1040 (10th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 2064, 114 L.Ed.2d 469 (1991); United States v. Rosa, 891 F.2d 1063 (3d Cir.1989); see also Sentencing Guideline Commission, \"Questions Most Frequently Asked About The Sentencing Guidelines,\" March 1990, Questions 41, 51.\n\n\n125\nIn this case, the indictment alleges that the conspiracy began before and continued after November 1, 1987. The evidence does not show that the defendants withdrew from the conspiracy before November 1, 1987. Therefore, defendants were properly sentenced under the guidelines.\n\n2.\nAcceptance of Responsibility\n\n126\nOtis Chambers argues that he is entitled to a two-point reduction in the calculation of his offense level under the sentencing guidelines because he told the probation officer that he accepted responsibility, although he concedes that he would not provide a detailed statement of his role. Otis contends the failure to give him the two-point reduction penalizes him for exercising his Fifth Amendment right against self-incrimination.\n\n\n127\nSection 3E1.1(a) of the sentencing guidelines provides:\n\n\n128\nIf the defendant clearly demonstrates a recognition and affirmative acceptance of personal responsibility for his criminal conduct, reduce the offense level by 2 levels.\n\n\n129\nThe guidelines apply to both guilty pleas and trial convictions and do not require the reduction be given as a matter of right even if the defendant enters a guilty plea. U.S.S.G. \u00a7 3E1.1(b) and (c). The Commentary explains:\n\n\n130\nThe reduction of offense level provided by this section recognizes legitimate societal interests. For several reasons, a defendant who clearly demonstrates a recognition and affirmative acceptance of personal responsibility for the offense by taking, in a timely fashion, one or more of the actions listed above (or some equivalent action) is appropriately given a lesser sentence than a defendant who has not demonstrated sincere remorse.\n\n\n131\nU.S.S.G. \u00a7 3E1.1, comment. (backg'd). The sentencing judge's determination of a defendant's acceptance of responsibility should be given great deference and should not be disturbed on appeal unless it is without foundation. U.S.S.G. \u00a7 3E1.1, comment. (n.5). The determination is one of fact and, therefore, is subject to the clearly erroneous standard of review. United States v. Gordon, 876 F.2d 1121, 1127 (5th Cir.1989); 18 U.S.C. \u00a7 3742(e).\n\n\n132\nIn White, 869 F.2d at 825-26, the court found that the reduction for acceptance of responsibility did not violate the defendant's Sixth Amendment right to a jury trial. The court held:\n\n\n133\n[I]t is not unconstitutional for the government to bargain for a guilty plea in exchange for a reduced sentence. The guideline, in fact, does not guarantee that a defendant who pleads guilty will receive a lower sentence.... The fact that a more lenient sentence is imposed upon a contrite defendant does not establish a corollary that those who elect to stand trial are penalized.\n\n\n134\nId. at 826 (citations omitted). In Gordon, 876 F.2d at 1127-28, the court held its decision in White foreclosed the defendant's argument that section 3E1.1 placed an unconstitutional burden on his Sixth Amendment right to a jury trial and his Fifth Amendment right to silence.\n\n\n135\nIn United States v. Monsour, 893 F.2d 126, 129 (6th Cir.1990), this circuit recognized that courts have historically considered sincere remorse as a factor calling for leniency in sentencing and joined those courts which have uniformly upheld the constitutionality of section 3E1.1.\n\n\n136\nBased on the foregoing, we conclude that section 3E1.1 does not violate a defendant's Fifth Amendment right against self-incrimination. Moreover, the sentencing court did not clearly err in failing to reduce Otis' sentence for acceptance of responsibility based on his statements to the probation officer. Otis would not admit his involvement in the conspiracy. His purported acceptance of responsibility came just before sentencing, and the sentencing court found it to be insincere.\n\n\n137\nThis case is distinguishable from United States v. Perez-Franco, 873 F.2d 455 (1st Cir.1989), cited by defendant. In Perez-Franco, the defendant pled guilty to one of the five charges under a plea agreement with the government. At sentencing, the defendant accepted responsibility and explained his involvement in the offense to which he had pleaded guilty to, but refused to accept responsibility for the four offenses to which he did not plead guilty. The sentencing court required complete disclosure of all criminal conduct and refused to apply the two-point reduction. The court of appeals reversed, finding that the guidelines required only that the defendant accept responsibility for the offense to which he pled guilty. Unlike Perez-Franco, the court below did not demand that Otis Chambers explain his involvement in charges of which he was not convicted. Instead, Chambers refused to explain his involvement in the offenses that supported his conviction.\n\n3.\nMajor Participant\n\n138\nA jury convicted Marshall Glenn of conspiracy to possess with the intent to distribute and to distribute cocaine, in violation of 21 U.S.C. \u00a7\u00a7 841(a)(1), 846. The court sentenced Glenn to 360 months imprisonment and five years supervised release. Glenn disputes the offense level calculation. He argues that the evidence failed to establish that he was anything but a minor participant and he asserts that the court erred in increasing the offense level by three points for his role as a major participant. U.S.S.G. \u00a7 3B1.1.\n\n\n139\nSection 3B1.1 increases the offense level based upon the size of the criminal organization and the role defendant played in committing the offense. Section 3B1.1(b) provides:\n\n\n140\nIf the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive, increase by 3 levels.\n\n\n141\nThe commentary to section 3B1.1 suggests that the court should consider \"the nature of participation in the commission of the offense, the recruitment of accomplices, ... and the degree of control and authority exercised over others.\" U.S.S.G. \u00a7 3B1.1, comment. (n.3).\n\n\n142\nTerry Colbert and James McKinney testified against Glenn at trial. Glenn contends their testimony, at best, established that Glenn was a drop off/pick up man; cooked and cut up crack cocaine at two houses; recruited McKinney from Marianna, Arkansas; drove McKinney to Detroit; and had McKinney sell crack. Glenn argues his participation in the conspiracy was not unlike the roles of Karen Hurst and James Lumpkin, persons the government identified as minor players. In sum, Glenn challenges the court's factual finding that Glenn was a manager or supervisor in the Chambers Organization.\n\n\n143\nThe presentence report indicated that Glenn's participation in the conspiracy was similar to the involvement of Willie Lee and Otis Chambers, Belinda Lumpkin, Jerry Lee Gant, and Eric Lamar Wilkins. Glenn was a drop off and pick up man, a lieutenant who oversaw crackhouses, and a recruiter of Marianna, Arkansas, youngsters for the Chambers Organization. The presentence report recommended a three-point upward adjustment because of Glenn's role as a lieutenant, enforcer, and supervisor. See U.S.S.G. \u00a7 3B1.1(b).\n\n\n144\nAt sentencing, responding to the identical objection Glenn raises on appeal, the district court held:\n\n\n145\n[Glenn] solicited one of the people from Marianna and was involved in supervising one of the houses, he did recruit a person, at least from the proofs. Therefore, I find the guidelines correct.\n\n\n146\nAppellate review of sentences imposed under the guidelines is limited.\n\n\n147\nThe court of appeals shall give due regard to the opportunity of the district court to judge the credibility of the witnesses, and shall accept the findings of fact of the district court unless they are clearly erroneous and shall give due deference to the district court's application of the guidelines to the facts.\n\n\n148\n18 U.S.C. \u00a7 3742(e). Under the guidelines, the government need only prove, by a preponderance of the evidence, those facts the court should rely on in determining the sentence. United States v. Carroll, 893 F.2d 1502, 1506 (6th Cir.1990).\n\n\n149\nGlenn concedes there is evidence to support his involvement in the conspiracy but argues that the proof establishes that he was involved as a minor participant rather than a manager or supervisor. The sentencing court found otherwise and the court's finding is not clearly erroneous based on the evidence presented.\n\nK.\n\n150\nProsecutorial Misconduct and Ineffective Assistance of Counsel\n\n\n151\nActing pro se, Larry Chambers argues that the government engaged in prosecutorial misconduct during trial because the United States Attorney drew a picture of the courtroom for Terry Colbert and indicated where the defendants were sitting, and that during Colbert's testimony, the United States Attorney nodded his head and winked at Colbert. The law is clear that the alleged misconduct must render the trial fundamentally unfair. Paprocki v. Foltz, 869 F.2d 281, 288 (6th Cir.1989). This court examines the asserted misconduct's pervasiveness, egregiousness, deliberateness, and weighs it in light of the evidence of guilt. Id. \"A prosecutor may conduct himself in a manner that 'deserves ... condemnation,' but still is not egregious enough to deprive the defendant of a fair trial.\" Id. (citation omitted). The alleged misconduct here, even if true, did not render the trial fundamentally unfair.\n\n\n152\nActing pro se, Billy Joe Chambers argues that he was denied effective assistance of counsel because counsel failed to object to the introduction of certain evidence obtained from purported crackhouses run by the Chambers Organization. Under the test set forth in Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 reh'g denied, 467 U.S. 1267, 104 S.Ct. 3562, 82 L.Ed.2d 864 (1984), a Sixth Amendment ineffective assistance of counsel claim requires that the defendant establish that counsel did not perform as well as a reasonably prudent lawyer, and that but for counsel's deficient performance defendant had a reasonable likelihood of acquittal. Id. 466 U.S. at 690, 692, 104 S.Ct. at 2066, 2067. Effective assistance is presumed and the court will not question matters which involve trial strategy. Id. at 692, 104 S.Ct. at 2067. Billy Joe fails to meet the Strickland test. He cannot show the requisite prejudice.\n\nIII.\n\n153\nThe convictions of Lumpkin and Wilkins are VACATED. Their cases are REMANDED to the district court for a hearing and for disposition as described in part II-A.\n\n\n154\nThe convictions and sentences of Billy Joe Chambers and Larry Chambers for conspiracy and continuing criminal enterprise are REMANDED to the district court for disposition as described in part II-I.\n\n\n155\nAll other convictions and sentences are AFFIRMED.\n\n\n\n*\n The Honorable Henry R. Wilhoit, Jr., United States District Judge for the Eastern District of Kentucky, sitting by designation\n\n\n1\n After certification, the court, depending upon the circumstances 1) must ensure that special procedures pertaining only to juveniles are followed, or 2) may direct that a juvenile be prosecuted without special protections, in the same manner as an adult. See 18 U.S.C. \u00a7 5032\n\n\n2\n We certainly recognize that the existence of juvenile jurisdiction depends upon the age of a person, but that reality does not imply that a determination of juvenile jurisdiction is a determination of personal jurisdiction. The federal courts' diversity jurisdiction, for example, depends upon the citizenship or residency of persons, but that reality does not imply that a determination regarding diversity jurisdiction is a determination regarding personal jurisdiction\n\n\n3\n The district court also would have been obliged to seal the records of the proceedings already completed in the district court and to take all other available measures to secure the juveniles' rights to special procedural safeguards under the Act. Lumpkin and Wilkins did not completely waive their rights to protection under the Act since they asserted their rights promptly in relation to the government's motion to proceed against them as adults. A juvenile may effect an express waiver of his or her opportunity to be proceeded against as a juvenile only by means of a written request made upon advice of counsel. 18 U.S.C. \u00a7 5032. Similarly, the courts should be reluctant to find an implied waiver of a juvenile's opportunity to be proceeded against as a juvenile\n\n\nN7\n This anomaly was corrected in the November 1, 1989 amendments to the sentencing guidelines\n\n\n"} -{"text": " F I L E D\n United States Court of Appeals\n Tenth Circuit\n UNITED STATES CO URT O F APPEALS\n July 11, 2006\n TENTH CIRCUIT Elisabeth A. Shumaker\n Clerk of Court\n\n\n ALI M EHDIPOUR,\n\n Petitioner - A ppellant, No. 05-6376\n v. W . D. Oklahoma\n LISA PARK ER ; R ON WA R D , (D.C. No. 03-CV-534-C)\n\n Respondents - Appellees.\n\n\n\n OR DER DENY ING CERTIFICATE O F APPEALABILITY *\n\n\nBefore TA CH A, HA RTZ, and TYM KOVICH, Circuit Judges.\n\n\n Ali M ehdipour was convicted in Oklahoma state court of distribution of\n\nmethamphetamine. On April 22, 2003, he filed an application under 28 U.S.C.\n\n\u00a7 2254 in the United States District Court for the W estern District of Oklahoma.\n\nThe m agistrate judge recommended that the application be denied. On\n\nOctober 19, 2005, the district court adopted the recommendation. The district\n\n\n\n *\n After examining the briefs and appellate record, this panel has determined\nunanimously that oral argument would not materially assist the determination of\nthis appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is\ntherefore ordered submitted without oral argument. This order and judgment is\nnot binding precedent, except under the doctrines of law of the case, res judicata,\nand collateral estoppel. The court generally disfavors the citation of orders and\njudgments; nevertheless, an order and judgment may be cited under the terms and\nconditions of 10th Cir. R. 36.3.\n\fcourt also denied a certificate of appealability (COA), see 28 U.S.C. \u00a7 2253(c)(1)\n\n(requiring C OA ). M r. M ehdipour now seeks a COA from this court, which we\n\ndeny.\n\nI. B ACKGR OU N D\n\n On M arch 28, 1997, M ichael Snow den, an agent with the Oklahoma Bureau\n\nof Narcotics and Dangerous Drugs, purchased methamphetamine from\n\nM r. M ehdipour at a sale arranged by confidential informant Harvey Stafford. O n\n\nJuly 31, 1997, Agent Snow den arrested M r. M ehdipour without a warrant and\n\nseized $1083.00 from him. The state sought the money in a civil forfeiture\n\naction, which was dismissed with prejudice on August 14, 1998. In April 1999\n\nM r. M ehdipour was tried and convicted of methamphetamine distribution in\n\nOklahoma state court. Agent Snow den had worn a wire transmitter during the\n\ndrug sale. Admitted into evidence at trial was an audiotape of (1) the\n\nconversation during the sale and (2) the telephone conversation between\n\nM r. M ehdipour and M r. Stafford arranging the sale.\n\n M r. M ehdipour appealed his conviction to the Oklahoma Court of Criminal\n\nAppeals (OCCA), which affirmed. He then filed in state court an application for\n\npostconviction relief, which the district court denied. The OCCA affirmed the\n\ndenial.\n\n On appeal M r. M ehdipour makes the follow ing claims: (1) the w arrantless\n\narrest violated his Fourth Amendment rights; (2) the admission of the audiotape\n\n -2-\n\fviolated the Fourth Amendment, the Federal Wiretap Act, and Oklahoma\u2019s\n\nwiretap law; (3) the admission of the audiotape was improper under state evidence\n\nlaw because Agent Snow den, who identified M r. M ehdipour\u2019s voice on the tape,\n\nwas not qualified as an expert in voice identification; (4) his trial counsel was\n\nconstitutionally ineffective in his litigation of the Fourth Amendment and\n\nwiretap-law claims, and in failing to investigate the case adequately; (5) his due\n\nprocess rights under Brady v. M aryland, 373 U.S. 83 (1963), were violated by the\n\nadmission without prior notice of incriminating evidence obtained in a separate\n\ninvestigation conducted before his arrest; (6) his conviction was barred by\n\ncollateral estoppel; and (7) his trial counsel was ineffective for failing to request\n\nan expert-witness-qualification hearing under Daubert v. M errell Dow\n\nPharmaceuticals, Inc., 509 U.S. 579 (1993), and Kumho Tire Co. v. Carmichael,\n\n526 U.S. 137 (1999).\n\nII. D ISC USSIO N\n\n A COA will issue \u201conly if the applicant has made a substantial showing of\n\nthe denial of a constitutional right.\u201d 28 U.S.C. \u00a7 2253(c)(2). This standard\n\nrequires a \u201cshowing that reasonable jurists could debate whether (or, for that\n\nmatter, agree that) the petition should have been resolved in a different manner or\n\nthat the issues presented were adequate to deserve encouragement to proceed\n\nfurther.\u201d Slack v. M cDaniel, 529 U.S. 473, 484 (2000) (internal quotation marks\n\n\n\n\n -3-\n\fomitted). In other w ords, the applicant must show that the district court\u2019s\n\nresolution of the constitutional claim was either \u201cdebatable or wrong.\u201d Id.\n\n The A ntiterrorism and Effective Death Penalty Act of 1996 (AEDPA)\n\nprovides that when a claim has been adjudicated on the merits in state court, a\n\nfederal court will grant habeas relief only when the applicant establishes that the\n\nstate court decision was \u201ccontrary to, or involved an unreasonable application of,\n\nclearly established Federal law, as determined by the Supreme Court of the\n\nUnited States,\u201d or \u201cwas based on an unreasonable determination of the facts in\n\nlight of the evidence presented in the State court proceeding.\u201d 28 U.S.C.\n\n\u00a7 2254(d)(1), (2).\n\n Under the \u201ccontrary to\u201d clause, we grant relief only if the state\n court arrives at a conclusion opposite to that reached by the Supreme\n Court on a question of law or if the state court decides a case\n differently than the [Supreme] Court has on a set of materially\n indistinguishable facts. Under the \u201cunreasonable application\u201d clause,\n relief is provided only if the state court identifies the correct\n governing legal principle from the Supreme Court\u2019s decisions but\n unreasonably applies that principle to the facts of the prisoner\u2019s case.\n Thus w e may not issue a habeas w rit simply because we conclude in\n our independent judgment that the relevant state-court decision\n applied clearly established federal law erroneously or incorrectly.\n Rather, that application must also be unreasonable.\n\nGipson v. Jordan, 376 F.3d 1193, 1196 (10th Cir. 2004) (internal quotations and\n\ncitations omitted). For those of M r. M ehdipour\u2019s claims that were adjudicated on\n\nthe merits in state court, \u201cAEDPA \u2019s deferential treatment of state court decisions\n\nmust be incorporated into our consideration of [his] request for COA.\u201d Dockins\n\n\n\n -4-\n\fv. Hines, 374 F.3d 935, 938 (10th Cir. 2004). Factual determinations of the state\n\ncourt are presumed correct, and the habeas applicant has \u201cthe burden of rebutting\n\nthe presumption of correctness by clear and convincing evidence.\u201d 28 U.S.C\n\n\u00a7 2254(e)(1).\n\n No reasonable jurist could dispute the district court\u2019s denial of\n\nM r. M ehdipour\u2019s Fourth Amendment claims based on the warrantless arrest and\n\nthe admission of the audiotape. These claims are barred on habeas review by\n\nStone v. Powell, 428 U.S. 465 (1976). Nor could a reasonable jurist dispute the\n\ndistrict court\u2019s denial of relief on the claims that the admission of the audiotape\n\nviolated federal and state law. Section 2254 does not provide relief for violations\n\nof state law. See Estelle v. M cGuire, 502 U.S. 62, 67 (1991). And the recording\n\nof M r. M ehdipour\u2019s conversations was proper under the consent exception to the\n\nFederal W iretap Act because on direct appeal the OCCA found that the other\n\nparty to the conversation consented, and M r. M ehdipour has not rebutted that\n\nfinding. See United States v. Faulkner, 439 F.3d 1221, 1224 (10th Cir. 2006)\n\n(noting that the consent exception applies \u201cwhere one of the parties to the\n\ncomm unication has given prior consent to . . . interception [of a wire, oral, or\n\nelectronic communication]\u201d (quoting 18 U.S.C. \u00a7 2511(2)(d))).\n\n M r. M ehdipour makes several claims of ineffective assistance of trial\n\ncounsel related to the w arrantless arrest and admission of the audiotape. These\n\nclaims are not precluded by Stone. See Kimmelman v. M orrison, 477 U.S. 365,\n\n -5-\n\f382-83 (1986). Strickland v. Washington, 466 U .S. 668, 687 (1984), requires a\n\ndefendant to support an ineffectiveness claim by showing \u201cthat counsel\u2019s\n\nperformance was deficient\u201d and that \u201cthe deficient performance prejudiced the\n\ndefense[, which] requires showing that counsel\u2019s errors w ere so serious as to\n\ndeprive the defendant of a fair trial.\u201d M r. M ehdipour complains that trial counsel\n\ndid not interview the arresting officers or a neighbor who apparently had\n\nknowledge about the warrantless arrest. He states that if counsel had done so, he\n\nwould have discovered additional evidence that the warrantless arrest was\n\nimproper. He also complains that counsel failed to interview M r. Stafford, the\n\nconfidential informant, and that during such an interview counsel would have\n\nlearned that M r. Stafford had not consented to the recording of his conversation\n\nwith M r. M ehdipour and that M r. Stafford had never purchased drugs from\n\nM r. M ehdipour or spoken with him on the telephone. Finally, he argues that\n\ncounsel elicited certain damaging testimony at trial as a result of the failure to\n\ninvestigate the case properly.\n\n The magistrate judge recommended rejecting M r. M ehdipour\u2019s claim that\n\ncounsel\u2019s failure to interview the witnesses caused him to elicit damaging\n\ntestimony at trial. The magistrate judge stated that in light of the overwhelming\n\nevidence of guilt, M r. M ehdipour had not shown that he had been deprived of a\n\nfair trial. The magistrate judge also recommended rejecting M r. M ehdipour\u2019s\n\nclaim regarding his counsel\u2019s failure to interview M r. Stafford, stating that he had\n\n -6-\n\ffailed \u201cto show how th[e] verdict could have been changed by any testimony from\n\nStafford.\u201d Report at 26. Both recommendations were adopted by the district\n\ncourt and would not be disputed by reasonable jurists. As for M r. M ehdipour\u2019s\n\nclaim regarding failure to interview the arresting officers and his neighbor, he did\n\nnot raise the claim in district court, so we will not consider it. See Simmat v. U.S.\n\nBureau of Prisons, 413 F.3d 1225, 1240 (10th Cir. 2005) (we will not address\n\nissues raised for the first time on appeal).\n\n M r. M ehdipour asserts that he was denied his due-process rights under\n\nBrady, when Agent Snowden testified, without prior notice to M r. M ehdipour,\n\nabout evidence regarding M r. M ehdipour that was obtained in another\n\ninvestigation before his arrest. But M r. M ehdipour did not raise Brady in district\n\ncourt, so we will not address this argument. See Simmat, 413 F.3d at 1240.\n\n M r. M ehdipour also argues that his conviction is improper under the\n\ncollateral-estoppel doctrine because in the forfeiture action the state district court\n\nhad ruled in his favor, holding that the money was seized in violation of the\n\nFourth and Fourteenth Amendments. M r. M ehdipour argues that \u201csince the\n\n[money] was seized on the same facts as used in the criminal accusation, the state\n\nwas barred from re-trying the action in a criminal proceeding under collateral\n\nestoppel.\u201d Aplt. Br. at 30. But in order for collateral estoppel to apply, the\n\nfollowing conditions must be met:\n\n\n\n\n -7-\n\f (1) the issue previously decided is identical with the one presented in\n the action in question, (2) the prior action has been finally\n adjudicated on the merits, (3) the party against w hom the doctrine is\n invoked was a party or in privity with a party to the prior\n adjudication, and (4) the party against whom the doctrine is raised\n had a full and fair opportunity to litigate the issue in the prior action.\n\n\nUnited States v. Rogers, 960 F.2d 1501, 1508 (10th Cir. 1992) (internal quotation\n\nmarks omitted). The magistrate judge recommended dismissal of\n\nM r. M ehdipour\u2019s collateral-estoppel claim on the ground that the record\n\nsupported the OCCA\u2019s finding that\n\n the issue at stake in the civil forfeiture action (whether drug dealing\n was the likely source of the $1083 taken from [M r. M ehdipour] when\n he was arrested) is totally distinct from the issue at stake in the\n criminal case (whether he sold 13.1 grams of methamphetamine to\n Agent Snowden four months earlier).\n\nR. Doc. 31 at 15 (internal quotation marks omitted). W e agree. Reasonable\n\njurists w ould not dispute that the Oklahoma court\u2019s ruling was neither contrary to\n\nnor an unreasonable application of federal law.\n\n Finally, M r. M ehdipour makes an ineffective-assistance-of-counsel claim\n\nbased on his counsel\u2019s failure to request a hearing under Daubert and Kum ho Tire\n\nCo. He argues that counsel should have requested such a hearing because neither\n\n\u201cthe trial court nor Agent Snow den qualified as technical or other specialized\n\nknowledge to scientific testimony to the identity of voice found on the\n\naudiotape.\u201d A plt. Br. at 36. But M r. M ehdipour did not raise these claims in\n\ndistrict court, so we will not address them. See Simmat, 413 F.3d at 1240.\n\n\n -8-\n\fIII. C ON CLU SIO N\n\n W e DENY a COA and DISM ISS the appeal.\n\n ENTERED FOR THE COURT\n\n\n Harris L Hartz\n Circuit Judge\n\n\n\n\n -9-\n\f"} -{"text": "\n896 N.E.2d 309 (2008)\n231 Ill.2d 122\nIn re RANDALL M., a Minor (The People of the State of Illinois, Appellant, v. Randall M., Appellee).\nNo. 105137.\nSupreme Court of Illinois.\nSeptember 18, 2008.\n*310 Lisa Madigan, Attorney General, Springfield, Michael J. Waller, State's Attorney, Waukegan (Michael A. Scodro, Solicitor General, Michael M. Glick and Karl R. Triebel, Assistant attorneys General, Chicago, Norbert J. Goetten, Lawrence M. Bauer and Marshall M. Stevens, Office of the State's Attorneys Appellate Prosecutor, Elgin, of counsel), for the People.\nThomas A. Lilien, Deputy Defender, Jaime L. Montgomery, Assistant Defender, Office of the State Appellate Defender, Elgin, for appellee.\n\nOPINION\nJustice THOMAS delivered the judgment of the court, with opinion:\nThe issue is whether the appellate court properly construed the detention provisions contained in section 5-410 of the Juvenile Court Act of 1987 (705 ILCS 405/5-410 (West 2006)). For the reasons that follow, we vacate the appellate court's decision and dismiss the appeal as moot.\n\nBACKGROUND\n\nThe Trial Court\nIn April 2005, the State filed a delinquency petition against Randall M. alleging one count of domestic battery. Randall admitted to the offense and was placed on probation.\nIn September 2006, and while Randall was still on probation, the State filed a new delinquency petition alleging unlawful possession of a firearm and unlawful use of a weapon. At the same time, the State petitioned to revoke Randall's probation. On the day that the new delinquency petition was filed, a detention hearing was held before the juvenile division of the circuit court of Lake County. At the hearing, the trial court found (1) sufficient probable cause to believe that Randall was a delinquent minor, and (2) that it was a matter of immediate and urgent necessity for the protection of both Randall and the community that Randall be held in secure detention. Pursuant to local rule, a minor requiring secure detention is lodged in the Hulse Detention Center \"unless otherwise ordered by a Juvenile Court Judge.\" 19th Jud. Cir. Ct. R. 9.13 (eff. January 2, 1997). At the hearing's conclusion, the trial court noted that Randall would soon be turning 17, and asked specifically for the date of Randall's birthday. When counsel responded that Randall would be turning 17 on the following Monday, the trial court responded, \"Monday? Monday you will be transferred to Lake County [jail].\"\nA few days later, Randall's attorney filed an emergency motion to enjoin Randall's transfer from the Hulse Detention *311 Center to the Lake County jail. The petition alleged, \"based on [counsel's] information and belief from past practices,\" that once Randall turned 17, he would be transferred automatically from the Hulse Detention Center to the Lake County jail and housed in the general adult population. A hearing was held, and the trial court denied the motion and ordered Randall \"transferred to the Lake County jail pursuant to statute.\" In so doing, the court specifically invoked section 5-410(2)(c)(v) of the Juvenile Court Act, which states that, as long as certain factors are first considered, \"[p]ersons 17 years of age and older who have a petition of delinquency filed against them may be confined in an adult detention facility.\" See 705 ILCS 405/5-410(2)(c)(v) (West 2006).[1]\n\nThe Appeal\nRandall filed a petition for leave to appeal under Supreme Court Rule 306(a)(5) (155 Ill.2d R. 306(a)(5)), and the appellate court allowed the petition. As framed by the appellate court, the issues to be considered were (1) \"whether section 5-410 authorizes the automatic transfer of a minor with pending delinquency matters from a juvenile detention facility to an adult detention facility upon the minor's seventeenth birthday\"; and (2) \"whether, under section 5-410, a minor 17 years of age or older with pending delinquency matters may be housed in the general population of a county jail.\" 374 Ill.App.3d 808, 809, 313 Ill.Dec. 356, 872 N.E.2d 116.\n\nMootness\nBefore addressing the merits, the appellate court noted that both issues had become moot because, since filing his petition for leave to appeal, Randall had pleaded guilty and been sentenced. Consequently, Randall was no longer subject to section 5-410, which governs a minor's detention pending adjudication. Nevertheless, the court invoked the public interest exception to the mootness doctrine on the grounds that (1) the issues relate to the detention of minors and therefore are of a public nature; (2) there are no published decisions construing section 5-410; and (3) the issues are likely to recur. 374 Ill.App.3d at 811-12, 313 Ill.Dec. 356, 872 N.E.2d 116.\n\nAutomatic Transfer\nOn the merits, the appellate court first addressed the automatic-transfer question. The court observed that, until recently, section 5-410(2)(c)(v) stated that persons 17 years of age and older who have a pending delinquency petition \"shall be confined in an adult detention facility.\" (Emphasis added.) See 705 ILCS 405/5-410(2)(c)(v) (West 2002). Clearly, this language was mandatory and required the minor to be transferred to the county jail on his or her seventeenth birthday. 374 Ill.App.3d at 814, 313 Ill.Dec. 356, 872 N.E.2d 116. In 2004, however, section 5-410(2)(c)(v) was amended to state that persons 17 years of age and older \"may be confined in an adult detention facility,\" provided certain factors are considered. (Emphasis added.) See 705 ILCS 405/5-410(2)(c)(v) (West 2006). Clearly, this new language is discretionary and leaves no room for an automatic transfer on the minor's seventeenth birthday. 374 Ill. App.3d at 814, 313 Ill.Dec. 356, 872 N.E.2d 116. Consequently, the court held that any policy providing for automatic transfer is invalid. 374 Ill.App.3d at 814, 313 Ill. Dec. 356, 872 N.E.2d 116.\n*312 The court then added that it was uncomfortable with the lack of procedural safeguards in section 5-410, most especially that Randall had to initiate a proceeding to prevent his transfer to the county jail. 374 Ill.App.3d at 814, 313 Ill.Dec. 356, 872 N.E.2d 116. The court compared section 5-410 with section 3-10-7 of the Unified Code of Corrections (730 ILCS 5/3-10-7 (West 2006)), which governs the transfer of minors prosecuted as adults from the Department of Juvenile Justice to the Adult Division of the Department of Corrections. Specifically, the court noted that section 3-10-7 provides for a formal notice requirement, an evidentiary hearing, the right to counsel, and a statement from the trial court setting forth the bases for its transfer ruling. 374 Ill.App.3d at 814-15, 313 Ill.Dec. 356, 872 N.E.2d 116. Section 5-410, by contrast, contains no procedural guidelines whatsoever. Accordingly, the court held that, in the interests of due process, \"a procedure similar to the one outlined in section 3-10-7 of the Code should be employed in applying the transfer provision set forth in section 5-410(2)(c)(v) of the Act, albeit in an expedited manner.\" 374 Ill.App.3d at 815, 313 Ill.Dec. 356, 872 N.E.2d 116.\n\nGeneral Population\nThe court then addressed whether, under section 5-410, a minor 17 years of age or older with pending delinquency matters may be housed in the general population of a county jail. In arguing that such minors may be housed in the general population, the State relied on section 5-410(2)(c)(v), which states:\n\"Minors under 17 years of age shall be kept separate from confined adults and may not at any time be kept in the same cell, room or yard with adults confined pursuant to criminal law. Persons 17 years of age and older who have a petition of delinquency filed against them may be confined in an adult detention facility. In making a determination whether to confine a person 17 years of age or older who has a petition of delinquency filed against the person, these factors, among other matters, shall be considered:\n(A) The age of the person;\n(B) Any previous delinquent or criminal history of the person;\n(C) Any previous abuse or neglect history of the person; and\n(D) Any mental health or educational history of the person, or both.\" 705 ILCS 405/5-410(2)(c)(v) (West 2004).\nAccording to the State, this language is clear and unambiguous. If housed in the county jail, minors under 17 years of age must be kept separate from the confined adults. By contrast, minors 17 years of age and older \"may be confined in an adult detention facility\" without restriction.\nIn rejecting this argument, the appellate court focused not upon section 5-410(2)(c)(v), but instead upon section 5-410(2)(d)(i), which states:\n\"If a minor 12 years of age or older is confined in a county jail in a county with a population below 3,000,000 inhabitants, then the minor's confinement shall be implemented in such a manner that there will be no contact by sight, sound or otherwise between the minor and adult prisoners. Minors 12 years of age or older must be kept separate from confined adults and may not at any time be kept in the same cell, room, or yard with confined adults.\" 705 ILCS 405/5-410(2)(d)(i) (West 2004).\nAfter noting that Lake County has a population below 3 million inhabitants, the appellate court explained that section 5-410(2)(d)(i) was clear and unambiguous. With only limited exceptions that are inapplicable here, if a minor 12 years of age or *313 older is confined in the county jail, that minor \"must be kept separate from the adults\" and \"in such a manner that there will be no contact by sight, sound or otherwise between the minor and adult prisoners.\" Accordingly, the appellate court concluded that, \"even if he was properly transferred to the Lake County jail, [Randall] should have been confined separately from any adult prisoners.\" 374 Ill. App.3d at 818, 313 Ill.Dec. 356, 872 N.E.2d 116.\nWe granted the State's petition for leave to appeal. 210 Ill.2d R. 315.\n\nDISCUSSION\nBoth sides concede that the issues in this case are moot. Nevertheless, they invite this court to consider them anyway, given the public interest in an authoritative construction of the detention guidelines set forth in section 5-410.\nThere is a fundamental problem with this request: section 5-410 does not apply to this case. Section 5-410 appears in part 4 of the Juvenile Court Act, which governs the \"arrest and custody\" of minors. This part of the Act does not govern or even speak to the trial court at the detention hearing. Instead, it governs what the police may do with a minor between the time of his arrest and the time he is first brought before the court. For example, section 5-401 addresses the arrest and taking into custody of minors, section 5-401.5 governs the custodial interrogation of arrested minors, section 5-405 outlines a police officer's duties following the arrest of a minor, and section 5-415 defines how long an arrested minor may be held in temporary custody before he or she must be either released or brought before the court for a detention or shelter care hearing. See 705 ILCS 405/5-401, 5-401.5, 5-505, 5-415 (West 2006).\nNot surprisingly, then, a careful reading of section 5-410 reveals that it governs not the pretrial detention of minors generally, but rather only the detention of minors while they are in police custody. Section 5-410(2) begins by stating that, when warranted, arrested minors 10 years of age or older \"may be kept or detained in an authorized detention facility.\" 705 ILCS 405/5-410(2)(a) (West 2006). If the arrested minor is under 12 years of age, he or she may be detained in a county jail or municipal lockup for no more than six hours. 705 ILCS 405/5-410(2)(a) (West 2006). If the arrested minor is 12 years of age or older, he or she may be detained in a county jail or municipal lockup for no more than 12 hours, unless the crime is one of violence, in which case the minor may be detained for up to 24 hours. 705 ILCS 405/5-410(2)(c) (West 2006). Once this initial time limit expires, an arrested minor 12 years of age or older may remain in the county jail only if that jail complies with the detention standards enumerated in section 5-410(2)(d) (705 ILCS 405/5-410(2)(d) (West 2006)).\nNotably, the statute relied upon by both the trial court and the State in this case\u0097 section 5-410(2)(c)(v)\u0097applies only during the initial 12- to 24-hour period immediately following the minor's arrest. Again, section 5-410(2)(c) provides that \"no minor shall be detained in a county jail or municipal lockup for more than 12 hours, unless the offense is a crime of violence in which case the minor may be detained up to 24 hours.\" 705 ILCS 405/5-410(2)(c) (West 2006). This section is then followed by five subsections, each of which in some way regulates this initial holding period. Section 5-410(2)(c)(i) defines when that period begins. 705 ILCS 405/5-410(2)(c)(i) (West 2006). Section 5-410(2)(c)(ii) provides for periodic supervision and prohibits the minor from coming or remaining in contact with confined adults. 705 ILCS 405/5-410(2)(c)(ii) (West 2006). Section 5-410(2)(c)(iii) *314 requires the police to inform the minor of the purpose of the detention, the time it is expected to last, and the fact that it cannot exceed the time specified under the Act. 705 ILCS 405/5-410(2)(c)(iii) (West 2006). Section 5-410(2)(c)(iv) requires the police to keep a log showing the basis for the detention, the bases for the decision to detain, and the length of time the minor was in detention. 705 ILCS 405/5-410(2)(c)(iv) (West 2006). Finally, and most importantly, section 5-410(2)(c)(v) describes the conditions under which the arrested minor may be confined during this initial holding period. If the minor is under 17 years of age, he or she must be kept separate from confined adults and may not at any time be kept in the same cell, room or yard with confined adults. If the minor is 17 years of age or older, he or she may be confined in an adult detention facility, provided certain factors are first considered. 705 ILCS 405/5-410(2)(c)(v) (West 2006). Read in its proper context, then, section 5-410(2)(c)(v) is not, as the State insists, a general statute governing the pretrial detention of minors with pending delinquency petitions. Rather, it is a narrowly focused subsection from a statute regulating only the initial hours of an arrested minor's custodial detention.\nOnce the initial 12- or 24-hour holding period expires, a minor 12 years of age or older may remain in the county jail only if that jail complies with the standards set forth in section 5-410(d) (705 ILCS 405/5-410(d) (West 2006)).[2] Under these standards, a county jail may hold a minor for up to 40 hours if it (1) ensures that there is no contact by sight, sound or otherwise between the minor and adult prisoners; (2) ensures that the minor is kept separate from confined adults and is not at any time kept in the same cell, room, or yard with confined adults; and (3) complies with all monitoring standards promulgated by the Department of Corrections and training standards approved by the Illinois Law Enforcement Training Standards Board (the Standards Board). 705 ILCS 405/5-410(d)(i) (West 2006). To keep the minor for between 40 hours and one week, the county jail must comply with all temporary detention standards promulgated by the Department and with all training standards approved by the Standards Board. 705 ILCS 405/5-410(d)(ii) (West 2006). And to keep minors for longer than one week, a county jail must comply with all programmatic and training standards for juvenile detention homes promulgated by the Department. 705 ILCS 405/5-410(d)(iii) (West 2006).[3]\nThe next step of the process is set forth in section 5-415, which requires that, \"[u]nless sooner released, a minor alleged to be a delinquent minor taken into temporary custody must be brought before a judicial officer within 40 hours for a detention or shelter care hearing to determine whether he or she shall be further held in custody.\" 705 ILCS 405/5-415(1) (West 2006). Once this occurs, as it did here, *315 section 5-410 is no longer applicable. Now, the process is governed by section 5-501. See 705 ILCS 405/5-501 (West 2006). Titled \"Detention or shelter care hearing,\" section 5-501 enumerates the procedures and guidelines governing the trial court's pretrial-detention determination. And unlike section 5-410, which applies before the commencement of any court proceedings, section 5-501 contains all of the procedural safeguards one would expect to find in a statute governing a judicial detention hearing.[4] Indeed, section 5-501 specifically provides for an evidentiary hearing, the right to counsel, and a written order setting forth the factual basis for the trial court's detention ruling. 705 ILCS 405/5-501(1), (2) (West 2006). Moreover, like section 5-410(d), section 5-501(4) outlines the conditions under which minors with pending delinquency matters may be held pending adjudication. See 705 ILCS 405/5-501(4) (West 2006). This is the statute that governs trial courts during a detention or shelter care hearing, and this is that statute that the trial court here should have consulted.\nSo where does this leave us? The parties concede that any issues relating to Randall's pretrial detention are moot, as Randall has since pleaded guilty and been sentenced. Nevertheless, they invite this court to address these issues anyway, under the public interest exception to the mootness doctrine. Unfortunately, the foregoing discussion compels us to decline this invitation. Indeed, all of the issues addressed by the courts below and briefed by the parties here relate to section 5-410. But that statute is inapplicable to this case, as the detention rulings at issue all arose in the course of Randall's detention or shelter care hearing. As importantly, no issues are raised, either by the parties or by the courts below, under the statute that does apply to this case, namely section 5-501.[5] Consequently, we have no choice but to vacate the appellate court's decision below and dismiss this appeal as moot.\n\nCONCLUSION\nThe judgment of the appellate court is vacated, and the appeal is dismissed.\nAppellate court judgment vacated; appeal dismissed.\nChief Justice FITZGERALD and Justices FREEMAN, KILBRIDE, GARMAN, KARMEIER, and BURKE concurred in the judgment and opinion.\nNOTES\n[1] Section 5-410(2)(c)(v) was amended effective January 1, 2004. See Pub. Act 93-255, eff. January 1, 2004 (amending 705 ILCS 405/5-410). In this case, it is unclear whether the trial court was applying the pre amendment or post amendment version of that section, as its analysis contains elements of both.\n[2] These same standards are set forth again in section 5-501(4).\n[3] A clarification is required here. At oral argument, the State argued that sight and sound restrictions are required only during the first 40 hours of a minor's detention and that, after that, \"the court would be free to order the person transferred to an adult facility free of any sight and sound restrictions.\" In support, the State noted that section 5-410(d)(i) is the only portion of section 5-410(d) that contains a sight and sound restriction, and it is expressly limited to the first 40 hours of the minor's confinement. The State is incorrect. All three subsections of section 5-410(d) require the county jail to comply with certain regulations promulgated by the Department. All of these regulations contain an explicit sight and sound restriction. See 20 Ill. Adm.Code \u00a7\u00a7 701.270, 701.280, 702.5 (2003).\n[4] The appellate court's decision to invoke the public interest exception to the mootness doctrine was based partially on the fact that there are \"no cases interpreting the statutory provisions at issue.\" 374 Ill.App.3d at 811, 313 Ill.Dec. 356, 872 N.E.2d 116. However, the likely explanation for the absence of relevant case law is that section 5-410 applies prior to the initiation of court proceedings and therefore rarely, if ever, will form the basis for a judicial order. By contrast, section 5-501 has been construed numerous times. See, e.g., In re T.W., 381 Ill.App.3d 603, 320 Ill.Dec. 931, 888 N.E.2d 148 (2008); In re C.J., 328 Ill. App.3d 103, 262 Ill.Dec. 36, 764 N.E.2d 1153 (2002); In re A.N., 324 Ill.App.3d 510, 258 Ill.Dec. 74, 755 N.E.2d 155 (2001).\n[5] We note that Randall's trial counsel attempted to bring this problem to the trial court's attention, to no avail. In his emergency motion to enjoin Randall's transfer, counsel argued that a close reading of section 5-410(2)(c)(v) \"indicates that this provision applies only to the forty-hour period preceding a detention hearing.\" And then again, after the trial court denied the emergency motion, counsel politely suggested that \"the statute that your Honor is forming its opinion on doesn't apply at this juncture and * * * only applies to the 40 hour window during which time a detention hearing would have to take place.\" The trial court thanked counsel for his input and stood on its ruling.\n"} -{"text": "\n569 F.Supp.2d 1208 (2008)\nGeorge Milam HALL, Plaintiff,\nv.\nDouglas P. WITTEMAN, et al., Defendants.\nNo. 07-4128-SAC.\nUnited States District Court, D. Kansas.\nAugust 6, 2008.\n*1213 George Milam Hall, Greeley, KS, pro se.\nDavid R. Cooper, Fisher, Patterson, Sayler & Smith, Stephen O. Phillips, Topeka, KS, Toby Jon Crouse, Wendell F. Cowan, Jr., Foulston Siefkin LLP, Overland Park, KS, Robert L. Bezek, Jr., Bezek, Lowry & Hendrix, Blaine B. Finch, Green & Finch, Chartered, Ottawa, KS, for Defendants.\n\nMEMORANDUM AND ORDER\nSAM A. CROW, Senior District Judge.\nPlaintiff invokes the court's federal question jurisdiction, asserting claims under 42 U.S.C. \u00a7 1983, 42 U.S.C. \u00a7 1985, and 18 U.S.C. \u00a7 1962, as well as various state law claims. This case comes before the court on motions to dismiss filed by multiple defendants, as well as on various additional motions.\n\nFACTUAL SUMMARY\nThe court accepts all well-pleaded allegations, taken in the light most favorable to the plaintiff, as true. E.F.W. v. St. Stephen's Indian High Sch., 264 F.3d 1297, 1305 (10th Cir.2001). In October of 2006, plaintiff became aware that state district court Judge Fromme would be up for retention in an election to be held on November 7, 2006. Plaintiff believed Judge Fromme's past treatment of plaintiffs mother was of public concern, so plaintiff drafted an advertisement for placement in various newspapers, captioned \"PHILLIP M. FROMME, DISTRICT COURT JUDGE, SHOULD NOT BE RETAINED ON NOVEMBER 7, 2006\" (\"Plaintiff's Advertisement\"). Dk. 21, Exh. A. Plaintiff's attempts to contact Judge Fromme in November about this matter were unsuccessful.\nBy October 30, 2006, plaintiff had more than eight hours of conversation and written contact with the publisher of The Coffey County Republican (defendant Catherine Faimon). He showed them court records which he believes persuaded them that his advertisement was true. Accordingly, plaintiff contracted with the Republican and paid to publish his advertisement twice, which it agreed to do. On October 31st, The Coffey County Republican ran plaintiffs letter to the editor, which spoke to the same topic as did Plaintiffs Advertisement. Plaintiffs Advertisement was published once in The Coffey County Republican, as well as in The Anderson County Review, The Ottawa Herald and The Osage County Herald. Abbreviated versions of Plaintiffs Advertisement were also published via plaintiffs letters to the editors of The Topeka Capital Journal, The Anderson County Review, and The Ottawa Herald.\nPlaintiff expected his advertisement to be published in The Coffey County Republican a second time on November 3rd. On that date, to plaintiffs surprise, The Coffey County Republican did not contain Plaintiffs Advertisement, nor did it subsequently publish it. The Coffey County Republican did not inform plaintiff prior to November 3rd of its decision not to run Plaintiffs Advertisement a second time. *1214 Instead, the November 3rd edition of the Coffey County Republican contained an advertisement supporting Judge Fromme (the \"Responsive Advertisement\") and challenging the plaintiff, captioned: \"WHO IS GEORGE MILAM HALL? The real truth about his attack on Judge Phillip M. Fromme.\" Plaintiff believes the advertisement makes knowingly false accusations about him, was done with malice, and is libelous.\nThe Responsive Advertisement closed by stating:\n6. It is unfortunate that our local paper did not take the time necessary to ascertain all the relevant facts before publishing this attack in The Coffey County Republican.\n\n7. Judge Phillip M. Fromme has the support of the entire membership of the Coffey County Bar Association. We would urge you to vote to retain Judge Phillip M. Fromme on your ballot on November 7, 2006.\nPAID FOR BY: Stephen J. Smith, Attorney at Law\u0097James R. Campbell, Attorney at Law\u0097Douglas P. Witteman, Coffey County Attorney\u0097Thomas L. Robrahn, Attorney at Law\u0097Linda S. McMurray, Attorney at Law\u0097Brenda R. Kelley, Attorney at Law\u0097Brad L. Jones, Attorney at Law\u0097Bryan M. Hastert, Attorney at Law.\nDk. 1, p. 12-13. The above-named attorneys, the Coffey County Bar Association, Judge Fromme, and others are among the defendants named in this case.\nPlaintiff claims that on November 1, 2006, defendants Smith, Fromme, Ryburn, Campbell, the Coffey County Bar Association, and the Franklin County Bar Association threatened to sue the publisher of The Coffey County Republican if she printed Plaintiffs Advertisement again, and coerced her into publishing the Responsive Advertisement instead of publishing Plaintiffs Advertisement a second time. Plaintiff claims the Responsive Advertisement caused the public to not do business with him, damaged his reputation, his property and his business, and caused him great mental anguish and emotional distress.\nJudge Fromme was retained by vote on November 7th in what plaintiff characterizes as a \"narrow margin.\" Dk. 1, p. 13. Thereafter, plaintiff appeared before the Coffey County Commission and addressed what plaintiff believes was \"liability imputed to them by Witteman,\" Dk. 1, p. 14, but they never took action on the matter or responded to plaintiff about it. Plaintiff additionally filed a criminal referral/complaint with defendant Witteman in his capacity as Coffey County Attorney, urging him to prosecute the defendants under Kansas criminal statutes, but to date Witteman has not responded to plaintiff and no such action has been commenced. Id.\nThe above facts constitute the gravamen of plaintiffs complaint. Other matters included in plaintiffs complaint will be addressed below as necessary to the resolution of the motions.\n\nPLAINTIFF'S MOTIONS\nPlaintiff has moved the court for leave to file excess pages (Dk.116) in his responses to defendants' motions to dismiss, and to amend his responses. This motion is granted to the extent that the court will consider all plaintiffs pleadings, motions, and briefs currently filed. The court appreciates plaintiffs efforts to consolidate his responses to the multiple motions to dismiss and to avoid any unnecessary redundancy.\nPlaintiff has filed various motions relating to Judge Fromme's motion to dismiss. See Dk. 72 (motion for clerk's entry of default);. Dk. 43 (motion for oral argument *1215 and to strike Judge Fromme's response). The court fully understands plaintiffs contention that he sued defendant Fromme as a private citizen for acts taken outside the scope of his employment as a district judge, and that defendant Fromme answered only in his official capacity as a district judge. The court fully considered and squarely rejected plaintiffs claims in its prior decision on plaintiffs motion for default and entry of default, Dk. 62, as well as in its reconsideration of that order, Dk. 102, specifically finding that \"defendant's Fromme's timely motion to dismiss (Dk. 9) constitutes a sufficient responsive pleading by him in the capacity in which he was sued and precludes a default judgment against him.\" Dk. 102. The current motions address identical issues. As no reason to alter the court's previous ruling has been shown, these motions shall be denied.\nPlaintiff has additionally filed a motion for appointment of counsel, Dk. 118. In civil actions, the court may appoint counsel in its discretion, \"in such circumstances as the court may deem just.\" Castner v. Colorado Springs Cablevision, 979 F.2d 1417 (10th Cir.1992). In determining whether justice requires appointment of counsel, the court considers the plaintiffs financial ability to retain counsel, the merits of plaintiff's claim, and plaintiffs capacity to prepare and present the case without the aid of counsel. Hill v. SmithKline Beecham Corp., 393 F.3d 1111, 1115 (10th Cir.2004)(citing Rucks v. Boergermann, 57 F.3d 978, 979 (10th Cir. 1995)). Plaintiff has shown the court that he has diligently but unsuccessfully sought counsel. Nonetheless, given plaintiffs capacity to prepare and present his case without the aid of counsel, coupled with the findings below regarding the merits of the case, the court denies the motion for counsel.\n\nDEFENDANTS' MOTIONS TO DISMISS\n\nImproper service of process\nThe City of Garnett, Kansas, and its City Attorney, Terry Solander, claim that service as to them was 19 days late, and move to dismiss, apparently pursuant to Fed.R.Civ.P. 12(b)(2) (lack of personal jurisdiction), and (b)(5)(insufficiency of service of process).\nIt is undisputed that these two defendants were not timely served. \"The preliminary inquiry to be made under Rule 4(m) is whether the plaintiff has shown good cause for the failure to timely effect service.\" Espinoza v. United States, 52 F.3d 838, 841 (10th Cir.1995). \"If good cause is shown, the plaintiff is entitled to a mandatory extension of time. If the plaintiff fails to show good cause, the district court must still consider whether a permissive extension of time may be warranted. At that point the district court may in its discretion either dismiss the case without prejudice or extend the time for service.\" Id.\nPlaintiff correctly responds that he was relieved of the duty to serve defendants by virtue of a court order. When the Magistrate Judge granted plaintiffs Motion for Leave to Proceed in forma pauperis, he added: \"The clerks office shall proceed with service of process, except' to those defendants plaintiff has directed not to be served until 120 days have past (sic) since the filing of the Complaint.\" Dk. 4. The clerk's office thus had to examine the Complaint to determine which defendants to serve immediately. The Complaint states that plaintiff intends to add the defendants named in paragraph five \"timely after 120 days, or sooner.\" Dk. 1, para. 5. The court finds the Complaint's directions about when to serve the defendants listed in paragraph five, which include The City of Garnett, Kansas and *1216 Terry Solander, to be ambiguous, at best, and to require a great deal of interpretation.\nPlaintiff states that he called clerk's office employees before and after the 120 days ran in an attempt to timely serve all defendants, and believes that through an oversight, the clerk's office employees failed to timely serve these two defendants. Dk. 103-2. All defendants mentioned in the confusing paragraph five of the Complaint were timely served except the City of Garnett and Terry Solander. Having reviewed the Complaint's directions regarding service, the Magistrate Judge's order regarding service, and the manner in which service was effected on the other defendants, the court finds any confusion regarding the timing of service for these two defendants to be completely understandable.\nBecause the plaintiff has shown good cause for his failure to timely serve these defendants, the court declines to dismiss them for lack of personal jurisdiction.\n\nConversion\nIn ruling on a motion to dismiss, the district court is limited to the facts pled in the complaint. Burnham v. Humphrey Hospitality Reit Trust Inc., 403 F.3d 709, 713 (10th Cir.2005). \"[I]n deciding a motion to dismiss pursuant to Rule 12(b)(6), a court may look both to the complaint itself and to any documents attached as exhibits to the complaint.\" Oxendine v. Kaplan, 241 F.3d 1272, 1275 (10th Cir.2001). A 12(b)(6) motion must be converted to a motion for summary judgment if \"matters outside the pleading are presented to and not excluded by the court\" and then \"all parties . . . [are] given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.\" Fed. R.Civ.P. 12(b).\n[I]f a plaintiff does not incorporate by reference or attach a document to its complaint, but the document is referred to in the complaint and is central to the plaintiffs claim, a defendant may submit an indisputably authentic copy to the court to be considered on a motion to dismiss. GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997). Such is the case with the copy of the Plaintiff's Advertisement attached as Exhibit A to the Anderson County defendant's motion to dismiss, (Dk. 20, 21). Other documents, however, are attached to various motions to dismiss or to the plaintiff's responses but are not referred to in or central to the petition. Rather than convert any motion to a summary judgment motion at this early stage of the proceedings, the court shall disregard those exhibits and decide the motions solely as motions to dismiss.\n\n12(b)(6) dismissal standard\nDefendants have filed motions to dismiss under Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. To survive a motion to dismiss, a complaint must present factual allegations, assumed to be true, that \"raise a right to relief above the speculative level\" and must contain \"enough facts to state a claim to relief that is plausible on its face.\" Bell Atlantic Corp. v. Twombly, ___ U.S. ___, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). Under this standard, \"the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.\" Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir.2007). The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a *1217 claim for relief. Robbins v. Oklahoma, 519 F.3d 1242, 1247-48 (10th Cir.2008).\n\"Plausibility\" in this context must refer to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs \"have not nudged their claims across the line from conceivable to plausible.\" Id. at 1974.\nRobbins, 519 F.3d at 1247-48.\n\"[C]omplaints in \u00a7 1983 cases against individual government actors pose a greater likelihood of failures in notice and plausibility because they typically include complex claims against multiple defendants.\" Robbins, 519 F.3d at 1248-49.\nIn \u00a7 1983 cases, defendants often include the government agency and a number of government actors sued in their individual capacities. Therefore it is particularly important in such circumstances that the complaint make clear exactly who is alleged to have done what to whom, to provide each individual with fair notice as to the basis of the claims against him or her, as distinguished from collective allegations against the state. See Twombly, 127 S.Ct. at 1970-71 n. 10.\nRobbins, 519 F.3d at 1248-49.\nPro se complaints, however inartfully pleaded, must be liberally construed, and are held to less stringent standards than formal pleadings drafted by lawyers. Erickson v. Pardus, ___ U.S. ___, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007). See Martinez v. Garden, 430 F.3d 1302, 1304 (10th Cir.2005). \"[The] court, however, will not supply additional factual allegations to round out a plaintiffs complaint or construct a legal theory on plaintiffs behalf.\" Whitney v. New Mexico, 113 F.3d 1170,1173-74 (10th Cir.1997) (quotations and citations omitted). The court should not be the pro se litigant's advocate, Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir.1991), and will not accept as true conclusory allegations unsupported by factual allegations. Oxendine v. Kaplan, 241 F.3d 1272 (10th Cir.2001). The court's \"broad reading of the plaintiffs complaint does not relieve the plaintiff of the burden of alleging sufficient facts on which a recognized legal claim could be based.\" Hall, 935 F.2d at 1110.\n\nSection 1983\n42 U.S.C. \u00a7 1983 provides, in relevant part:\nEvery person who, under color of any statute, ordinance, regulation, custom, or usage, of any state . . . subjects or causes to be subjected, any citizen of the United States . . . to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.\nTo state a claim under Section 1983, plaintiff must allege that a person has deprived them of a federal right, constitutional or statutory, and that the person acted under of color of state law in doing so. Kentucky v. Graham, 473 U.S. 159, 165-66, 105 S.Ct. 3099, 87 L.Ed.2d 114 (1985); Gomez v. Toledo, 446 U.S. 635, 640, 100 S.Ct. 1920, 64 L.Ed.2d 572 (1980); Houston v. Reich, 932 F.2d 883, 890 (10th Cir.1991).\n\nConstitutional deprivation\n\"Section 1983 imposes liability for violations of rights protected by the Constitution, not for violations of duties of care arising out of tort law.\" Baker v. McCollan, 443 U.S. 137, 146, 99 S.Ct. 2689, 2695, 61 L.Ed.2d 433 (1979). Haines, 82 F.3d at 1508. Defendants contend that the allegations of the Complaint fail to state a violation of plaintiff's constitutional rights. The Court disagrees. Among plaintiff's *1218 many allegations of defendants' violations of his constitutional rights are two that arguably state a deprivation of a federal right.\nThe first is plaintiff's contention that he contracted to have his advertisement run a second time, but that defendants, by their threats and coercion to the paper, effectively prevented him from expressing himself through the advertisement. That advertisements can be protected speech is clear. See, e.g., New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964). The facts alleged in the Complaint, if proven, could lead a trier of fact to find that defendants denied plaintiff the right to engage in expression protected by the First Amendment by viewpoint discrimination. See Ward v. Rock Against Racism, 491 U.S. 781, 795, n. 5, 109 S.Ct. 2746, 105 L.Ed.2d 661 (1989) (citation omitted).[1]\nThe second is plaintiff's claim of an equal protection violation. The Equal Protection Clause prohibits state and local governments from treating similarly situated persons differently. City of Cleburne v. Cleburne Living Center, Inc., 473 U.S. 432, 439-41,105 S.Ct. 3249, 87 L.Ed.2d 313 (1985). To make such a claim, as a class of one, plaintiff \"must prove that he was singled out for persecution due to some animosity\" on the part of defendants by showing that \"the action taken by the state, whether in the form of prosecution or otherwise, was a spiteful effort to `get' [him] for reasons wholly unrelated to any legitimate state objective.\" Bartell v. Aurora Public Schools, 263 F.3d 1143, 1149 (10th Cir.2001), quoting Esmail v. Macrane, 53 F.3d 176, 180 (7th Cir.1995). As with any equal protection claim, plaintiff must also demonstrate that he was treated \"differently than another who is similarly situated.\" Id, quoting Buckley, 933 F.2d at 859 (citing City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 439, 105 S.Ct. 3249, 87 L.Ed.2d 313 (1985)).\nPlaintiff alleges that he was treated differently than defendants were by the newspaper in that both plaintiff and defendants paid to place advertisements in The Coffey County Republican on November 3rd regarding the upcoming election, but only defendants were permitted to do so. Although defendants may ultimately prevail in showing that plaintiff was not sufficiently \"similarly situated\" to defendants, or that the newspaper made a rational distinction between Plaintiff's Advertisement and the Responsive Advertisement, plaintiff's Complaint meets the threshold showing to state a claim on both counts.\nMindful of the importance that the Complaint make clear exactly who is alleged to have done what to whom, as distinguished from collective allegations against the state, see Twombly, 127 S.Ct. at 1970-71 n. 10. Robbins, 519 F.3d at 1248-49, the court examines whether the various defendants may be found liable for either of these potential constitutional deprivations.\n\nCity/County/County Commissioners\nThe Complaint does not specify any action allegedly taken by the City of Garnett or the Anderson County Commissioners. It appears that plaintiff named the Anderson County Commissioners because defendant Campbell, who signed the Responsive Advertisement as \"Attorney at Law,\" serves as the Anderson County Counselor. Similarly, it appears that plaintiff named the City of Garnett, Kansas because defendant Solander serves as its City Attorney. General assertions are *1219 made that all defendants engaged in conspiracy and deprived plaintiff of various constitutional rights.\nSection 1983 does not subject municipalities to vicarious liability for the acts of their employees; municipal taxpayers are liable only for the municipality's own misdeeds. Milligan-Hitt v. Board of Trustees of Sheridan County School Dist. No. 2, 523 F.3d 1219, 1223 (10th Cir.2008), citing Monell v. Dep't of Soc. Servs., 436 U.S. 658, 690-95, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978).\nA municipality can only be liable under \u00a7 1983 if it took \"action pursuant to official municipal policy of some nature [that] caused a constitutional tort.\" Monell v. Dep't of Soc. Servs., 436 U.S. 658, 691, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). In Pembaur v. City of Cincinnati, 475 U.S. 469, 106 S.Ct. 1292, 89 L.Ed.2d 452 (1986), the Supreme Court further developed the rule expressed in Monell, stating \"[t]he `official policy' requirement was intended to distinguish acts of the municipality from acts of employees of the municipality, and thereby make clear that municipal liability is limited to action for which the municipality is actually responsible.\" Id. at 479, 106 S.Ct. 1292.\nBeedle v. Wilson, 422 F.3d 1059, 1067-1068 (10th Cir.2005).\nMunicipal liability will be found only if the unconstitutional action executes or implements an official governmental custom, practice or policy, id. at 694, 98 S.Ct. 2018, or if the plaintiffs rights were violated by one of the entity's final policymakers, Simmons v. Uintah Health Care Special Dist., 506 F.3d 1281, 1284-85 (10th Cir.2007). The complaint is devoid of allegations of any custom or policy of Coffey County or of the City of Garnett or of Anderson County which allegedly caused any constitutional injury to plaintiff.\nThe Complaint specifically attributes two acts to the Coffey County Commissioners: 1) it never responded to a copy it received of plaintiffs letter to Judge Fromme, Dk. 1, para. 15; 2) it never responded to plaintiffs complaints voiced during his appearance before the Commission in November of 2006 about \"liability imputed to them by Witteman,\" Dk. 1, para. 39. County Commissioners are, of course, final policymakers for the County, but their alleged failure to respond to plaintiff does not violate plaintiffs constitutional rights. Negligence does not state a \u00a7 1983 claim. Jones v. Salt Lake County, 503 F.3d 1147, 1163 (10th Cir. 2007); Jojola v. Chavez, 55 F.3d 488, 490 (10th Cir.1995) (\"Liability under \u00a7 1983 must be predicated upon a deliberate deprivation of constitutional rights by the defendant, and not on negligence.\") (quotations omitted).\nAdditionally, in order for liability to arise under \u00a7 1983, a defendant's direct personal responsibility for the claimed deprivation of a constitutional right must be established. See Olson v. Stotts, 9 F.3d 1475, 1477 (10th Cir.1993) (affirming district court's dismissal where \"plaintiff failed to allege personal participation of the defendants\"); Coleman v. Turpen, 697 F.2d 1341, 1346 n. 7 (10th Cir.1982) (noting defendants cannot be liable under \u00a7 1983 unless personally involved in the deprivation). Nothing in plaintiffs complaint indicates any personal participation by the individual county commissioners, either of Coffey County, or Anderson County. Accordingly, the \u00a7 1983 claims against these defendants shall be dismissed.\n\nColor of law\nThe remaining defendants who have moved to dismiss allege that none of them acted under color of state law. It is *1220 plaintiffs burden to meet the jurisdictional prerequisite that the defendants acted under color of state law. See Dry v. City of Durant, 242 F.3d 388, 2000 WL 1854140, *6 (10th Cir.2000).\n\nDefendant Witteman\nPlaintiff concedes that most defendants are not alleged to be state actors. Plaintiffs primary theory is that defendant Witteman is a state actor, and that other defendants conspired with him to deprive plaintiff of his constitutional rights. Plaintiff notes that defendant Witteman signed the Responsive Advertisement as Douglas P. Witteman, \"Coffey County Attorney,\" instead of as \"Attorney at Law,\" as did all other signatories. Plaintiff claims that defendant Witteman directed and endorsed the Responsive Advertisement under color of law and used and misused the power of his office to impermissibly interfere with plaintiffs right to publish his second advertisement. See e.g., Dk. 1, para. 69. Plaintiffs assertion that defendant Witteman acted under color of state law appears to rely upon the law that \"an individual employed by the state who violates another individual's federal rights will `generally' (i.e., in most cases), do so by virtue of the authority vested in them under state law.\" Jojola, 55 F.3d at 492-494.\nTo act under color of state law or authority for purposes of section 1983, the defendant must \"have exercised power `possessed by virtue of state law and made possible only because the wrongdoer is clothed with the authority of state law.'\" West v. Atkins, 487 U.S. 42, 49, 108 S.Ct. 2250, 2255, 101 L.Ed.2d 40 (1988) (quoting United States v. Classic, 313 U.S. 299, 326, 61 S.Ct. 1031, 1043, 85 L.Ed. 1368 (1941)). Additionally, \"[i]t is firmly established that a defendant in a \u00a7 1983 suit acts under color of state law when he abuses the position given to him by the State.\" West, 487 U.S. at 49-50, 108 S.Ct. at 2255-56 (emphasis added) (citation omitted). See Brown v. Chaffee, 612 F.2d 497, 501 (10th Cir.1979).\nUnder Kansas law, the powers granted to a county attorney are set forth by statute. They are, generally:\nto appear in any court having jurisdiction within the county and prosecute or defend on behalf of the people all actions and proceedings, civil or criminal, in which the state or the county is a party or interested; upon request by any judge of the district court of the county, to appear on behalf of the state before such judge, and prosecute all complaints made in behalf of the state of which such judge has jurisdiction; to conduct any criminal examination which may be had before such judge and to prosecute certain civil suits before such judge in which the county is a party or interested; and to give opinions and advice to the board of county commissioners and other civil officers of the county, when requested by such board or officers, upon all matters in which the county is interested, or relating to the duties of such board or officers, in which the state or county may have an interest.\nKSA \u00a7 19-702-04. None of these statutory duties requires or permits the county attorney to speak on political matters such as the election of a local judge or the acts of a local citizen, or to exert any influence whatsoever on the publisher of the local newspaper, or to join with other attorneys in expressing his opinion on any topic. In short, no act defendant Witteman is alleged to have taken arguably flowed from any power he possessed by virtue of state law, nor was any alleged act he took related in any meaningful way to the performance of his official duties, stated above.\nThe crucial issue is whether Defendant Witteman, by using his official title when *1221 he endorsed the Responsive Advertisement, met the \"color of state law\" requirement.[2] \"It is the nature of the act performed, not the clothing of the actor . . . which determines whether [a public official] has acted under color of law.\" Stengel v. Belcher, 522 F.2d 438, 441 (6th Cir. 1975) (quoting Johnson v. Hackett, 284 F.Supp. 933, 937 (E.D.Pa.1968)), cert. dismissed, 429 U.S. 118, 97 S.Ct. 514, 50 L.Ed.2d 269 (1976). Accordingly, not every action undertaken by a person who is a state official is attributable to the state.\nThe United States Supreme Court has held that acts of a state officer in the ambit of his personal pursuits are not acts under color of state law. Screws v. United States, 325 U.S. 91, 65 S.Ct. 1031, 89 L.Ed. 1495 (1945). Thus the mere fact that defendant Witteman is a state officer or signed the Responsive Advertisement in his official capacity, or spoke to Catherine Faimon about the two advertisements does not mean that he acted under color of state law. See Byrne v. Kysar, 347 F.2d 734, 736 (7th Cir.1965) (holding that an assistant state's attorney who executed a petition by adding his official title to his signature did not act under color of law within the meaning of \u00a7 1983, where he signed not in his official position but as a private citizen), cert. denied, 383 U.S. 913, 86 S.Ct. 902, 15 L.Ed.2d 668 (1966). \"The fact that he added his official title to his signature is of no import.\" Id. Officers do not act under color of law when their acts are in \"the ambit of their personal pursuits.\" Monroe v. Pape, 365 U.S. 167, 185, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961). Accordingly, the Tenth Circuit has held that a person's position as sheriff does not make all of his actions under \"color of law\"; rather, it is only when the sheriff exercises power granted by the state that his actions become state actions. Norton v. Liddel, 620 F.2d 1375, 1379-80 (10th Cir.1980).\n\"The Supreme Court has never held that objective indicia of state authority, without more, can bring an officer's otherwise `purely personal pursuits' within the scope of \u00a7 1983.\" Dry, 242 F.3d 388, 2000 WL 1854140, *4 (rejecting the proposition that the defendants' official attire, standing alone, is sufficient to establish action under color of state law), quoting Robinson v. Davis, 447 F.2d 753, 759 (4th Cir.1971) (\"It is plain that a state officer is not necessarily acting in his official capacity merely because he is clothed in official garb\"), cert. denied, 405 U.S. 979, 92 S.Ct. 1204, 31 L.Ed.2d 254 (1972). Thus, even the acts of on-duty law enforcement officers are not always under color of law. See Haines v. Fisher, 82 F.3d 1503, 1508 (10th Cir.1996) (on-duty police officers who used police property to stage a robbery as a practical joke did not act under color of law because they did not use their state authority to carry out their plan and their acts were unrelated to the performance of their official police duties); Lusby v. T.G. & Y Stores, Inc., 749 F.2d 1423 (10th Cir.1984) (concluding that an officer's on or off-duty status is not dispositive of whether he is acting under color of law.) See also Jojola, 55 F.3d at 493-94 (dismissing case where school janitor alleged to have sexually molested a student did not act under color of law,); D.T. v. Independent Sch. Dist. No. 16, 894 F.2d 1176, 1186-88 (10th Cir.), cert. denied, 498 U.S. 879, 111 S.Ct. 213, 112 L.Ed.2d 172 (1990) (finding that a teacher who sexually abused a student during a summer vacation did not act under color of law because there was no real nexus between the sexual abuse and the public school).\n*1222 Defendant Witteman's lack of actual state authority is not determinative, however. \"Misuse of power, possessed by virtue of state law and made possible only because the wrongdoer is clothed with the authority of state law, is [also] action taken under color of state law.\" Monroe v. Pape, 365 U.S. 167, 184, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961) (quoting United States v. Classic, 313 U.S. 299, 326, 61 S.Ct. 1031, 85 L.Ed. 1368 (1941)), overruled on other grounds by Monell v. Dep't of Soc. Servs. of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). The Complaint alleges that Witteman's endorsement of the Responsive Advertisement as County Attorney swayed the electorate to retain Judge Fromme. See Dk.1, para. 26, 69, 88. But the Complaint does not assert that defendant Witteman explicitly asserted his official authority to anyone at The Coffey County Republican or elsewhere. Nor do the allegations of the Complaint permit the inference that the County Attorney implicitly invoked the power and prestige of his office to the newspaper, or that the newspaper's decision to print the Responsive Advertisement and pull Plaintiffs Advertisement was due even in part to defendant Witteman's official role. The mere fact that the prestige of one's office may have enhanced his influence over the newspaper is not enough to convert his actions into state action. See Johnson v. Knowles, 113 F.3d 1114, 1117-1118 (9th Cir.1997).\nThe Complaint specifically alleges that the Coffey County Bar Association, the \"FBA,\" Smith, Fromme, Ryburn and Campbell threatened the newspaper's publisher and used extortion, bribery, and \"coercion of blackmail,\" to convince her to run the Responsive Advertisement instead of Plaintiffs Advertisement. Dk. 1, p. 10. para. 28. Defendant Witteman is not included in the defendants specifically alleged to have participated in such acts, either personally or in his capacity as County Attorney. The Complaint further alleges that the Responsive Advertisement was paid for by funds from the Coffey County Bar Association, not from defendant Witteman or the County Attorney's office. Id, p. 11, para. 30.\n\"It is the plaintiffs burden to plead, and ultimately establish, the existence of `a real nexus' between the defendant's conduct and the defendant's `badge' of state authority in order to demonstrate action was taken `under color of state law.'\" Jojola, 55 F.3d at 492-494. Here, defendant Witteman's official authority is not alleged to have contributed significantly to the unconstitutional conduct of which the plaintiff complains. The allegations of the Complaint simply do not permit an inference that defendant Witteman's status as County Attorney made any difference whatsoever to The Coffey County Republican, or that the same actions which arguably violate the First Amendment or the equal protection clause would not have been taken by the newspaper had defendant Witteman not been the County Attorney, or had he endorsed the Responsive Advertisement as \"Attorney at Law,\" instead of as \"County Attorney.\" To find otherwise would improperly impose liability on the state for conduct for which it cannot be fairly blamed. Accordingly, the court finds that defendant Witteman's alleged acts are private conduct, outside the course or scope of his duties and unaided by any indicia of actual or ostensible state authority, and not conduct occurring under color of state law.\n\nWitteman\u0097failure to prosecute\nPlaintiff additionally claims that defendant Witteman refused to initiate prosecution on the criminal referral/complaint plaintiff filed with defendant Witteman in *1223 his capacity as Coffey County Attorney, seeking to prosecute the defendants under Kansas criminal statutes.\nThe County Attorney is entitled to absolute prosecutorial immunity for acts intimately associated with the judicial process. Burns v. Reed, 500 U.S. 478, 486, 111 S.Ct. 1934, 1939, 114 L.Ed.2d 547 (1991). \"[I]n initiating a prosecution and in presenting the State's case, the prosecutor is immune from a civil suit for damages.\" Imbler v. Pachtman, 424 U.S. 409, 431, 96 S.Ct. 984, 995, 47 L.Ed.2d 128 (1976); Pfeiffer v. Hartford, 929 F.2d 1484, 1489 (10th Cir.1991). The decision whether to file certain charges is central to the task of initiating a prosecution, and as such is entitled to absolute immunity protection. See, e.g., Mishler v. Clift, 191 F.3d 998, 1008 (9th Cir.1999) (\"[f]iling charges and initiating prosecution are functions that are integral to a prosecutor's work\"). Accordingly, to the extent plaintiff complains of defendant Witteman's failure to prosecute, plaintiff fails to state a claim for relief under \u00a7 1983.\n\nSolander/Campbell\nTo the extent that the Complaint asserts that defendant Solander, [the Garnett City Attorney,] and/or defendant Campbell, [the Anderson County Attorney,] acted under color of law, see Dk. 1, Dk. 113, the court finds their acts alleged in the Complaint constitute private conduct, not taken under color of law, based upon the same law and analysis set forth above regarding defendant Witteman.\n\nDefendant Fromme\nPlaintiff admits he has brought no \u00a7 1983 claim against defendant Fromme. (Dk.71, 75.). See Dk. 102 (so finding).\n\nOther individual defendants\nPlaintiff concedes that most defendants are not alleged to be state actors, apparently recognizing that attorneys engaged in the private practice of law are not acting under color of state law. See Barnard v. Young, 720 F.2d 1188, 1189 (10th Cir.1983); Polk County v. Dodson, 454 U.S. 312, 325, 102 S.Ct. 445, 70 L.Ed.2d 509 (1981). Plaintiff bases his claim of other defendants' state action upon their interactions with defendants Witteman, Solander, and/or Campbell. Because the court has found that none of these three defendants acted under color of law, plaintiff's claim that the other individual defendants acted together with these three defendants, or any of them, fails to establish the requisite state action.\nA state, its agencies or officials may not be assessed liability for the acts of a private individual, except by a \"fair attribution\" of those actions to the State. Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 936-37, 102 S.Ct. 2744, 2753-54, 73 L.Ed.2d 482 (1982). For a private individual's conduct to constitute state action, \"the private party must have acted together with or obtained significant aid from State officials or engaged in conduct otherwise chargeable to the State.\" Scott v. Hern, 216 F.3d 897, 906 (10th Cir.2000). Here, no fair attribution of any defendant's acts to the state is possible, regardless of which test is used to determine whether the challenged conduct constitutes action \"under color of law\" by private parties. See Lugar, 457 U.S. at 939, 102 S.Ct. 2744; Gallagher v. Neil Young Freedom Concert, 49 F.3d 1442, 1453-56 (10th Cir.1995) (discussing the nexus test, the symbiotic relationship test, the joint activity test, and the public function test). Private conduct that is not \"fairly attributable\" to the state under these tests is not actionable under \u00a7 1983, \"no matter how atrocious\" it is. Darr v. Town of Telluride, 495 F.3d 1243, 1256 (10th Cir.2007).\n*1224 Although private parties may be liable under \u00a7 1983 if a conspiratorial action with state officials is proven, Tower v. Glover, 467 U.S. 914, 104 S.Ct. 2820, 81 L.Ed.2d 758 (1984), the Court has found that defendants Witteman, Solander, and Campbell, the alleged conspirators, were not acting under color of law. Plaintiffs bare and conclusory allegations of a conspiracy between defendant Witteman or other alleged state actors and other individual defendants in this case are insufficient to establish that any of them acted under color of state law. See Adickes v. Kress & Co., 398 U.S. 144, 152, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Crabtree v. Muchmore, 904 F.2d 1475, 1480-81 (10th Cir.1990). Nor has any conspiracy between the private parties and any municipality, county, or state been shown.\nFurther, the Complaint fails to allege facts showing how some of the individual defendants were personally involved in the enumerated events. For instance, the role of defendant Joy in the alleged offenses is completely unmentioned. Having carefully reviewed the acts alleged in the Complaint, the court finds that neither defendant Witteman nor any other individual defendant who has moved to dismiss acted under color of state law or is amenable to suit under 42 U.S.C. \u00a7 1983. The court finds it unnecessary to reach the defendants' assertions that they are entitled to qualified immunity.\n\nSection 1985\nPlaintiff claims that defendants violated 42 U.S.C. \u00a7 1985 by conspiring to interfere with plaintiffs right to publish his second advertisement opposing Judge Fromme's retention, which plaintiff alleges he had previously paid for and The Coffey County Republican had previously agreed to publish. Plaintiff alleges that defendants interfered with his lawful political activity and violated his rights to free speech and equal protection.\nThe first clause of section 1985(3) makes it illegal for \"two or more persons. . . to conspire . . . for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws[.]\" To establish a claim in violation of this section, the plaintiff must allege and prove the following elements:(1) a conspiracy; (2) to deprive plaintiff of equal protection or equal privileges and immunities; (3) an act in furtherance, of the conspiracy; and (4) an injury or deprivation resulting therefrom. Tilton v. Richardson, 6 F.3d 683, 686 (10th Cir.1993), cert. denied, 510 U.S. 1093, 114 S.Ct. 925, 127 L.Ed.2d 218 (1994), citing Griffin v. Breckenridge, 403 U.S. 88, 102-02, 91 S.Ct. 1790, 1798, 29 L.Ed.2d 338 (1971).\nCase law establishes the additional requirement of class-based or racially discriminatory animus.\nSection 1985(3) creates a cause of action against persons who conspire to deprive a person or class of \"equal\" protection or \"equal\" privileges and immunities. A violation of section 1985 must include class-based or racially discriminatory animus. Griffin v. Breckenridge, 403 U.S. 88, 102, 91 S.Ct. 1790, 1798, 29 L.Ed.2d 338 (1971); Atkins v. Lanning, 556 F.2d 485, 489 (10th Cir.1977). \"[I]n the absence of allegations of class based or racial discriminatory animus, the complaint fails to state a claim under \u00a7 1985.\" Campbell v. Amax Coal Co., 610 F.2d 701, 702 (10th Cir.1979) (per curiam).\nBisbee v. Bey, 39 F.3d 1096, 1102 (10th Cir.1994), cert. denied, 515 U.S. 1142, 115 S.Ct. 2577, 132 L.Ed.2d 827 (1995). Section 1985(3) does not apply to all tortious, conspiratorial interferences with the rights *1225 of others, but only to conspiracies motivated by \"some racial, or perhaps otherwise class-based, invidiously discriminatory animus.\" Griffin, 403 U.S. at 101-02, 91 S.Ct. 1790.\nThe statute does not protect \"every class which the artful pleader can contrive.\" Larkin v. Town of West Hartford, 891 F.Supp. 719 (D.Conn.1995), aff'd, 101 F.3d 109 (2d Cir.1996). The term \"class,\" in this context, connotes something more than a group of individuals who share a desire to engage in conduct that is disfavored by some. Bray v. Alexandria Women's Health Clinic, 506 U.S. 263, 113 S.Ct. 753, 122 L.Ed.2d 34 (1993). \"Griffin evidenced a general concern that actions brought under Section 1985 must be carefully delineated in accordance with the statutory purposes of the Act in order to avoid the unintended creation of a general federal tort law.\" Kimble v. D.J. McDuffy, Inc., 648 F.2d 340, 346 (5th Cir.), cert. denied, 454 U.S. 1110, 102 S.Ct. 687, 70 L.Ed.2d 651 (1981).\nThe other \"class-based animus\" language of this requirement has been narrowly construed and does not reach conspiracies motivated by an economic or commercial bias. United Brotherhood of Carpenters & Joiners of America, Local 610, AFL-CIO v. Scott, 463 U.S. 825, 837, 103 S.Ct. 3352, 77 L.Ed.2d 1049 (1983). Nor are the disabled a class for the purposes of Section 1985. Wilhelm v. Continental Title Co., 720 F.2d 1173, 1176-77 (10th Cir.1983), cert. denied, 465 U.S. 1103, 104 S.Ct. 1601, 80 L.Ed.2d 131 (1984). Other jurisdictions have held \"that \u00a7 1985(3) does not provide a cause of action for individuals allegedly injured by conspiracies motivated by discriminatory animus directed toward their political affiliation.\" Farber v. City of Paterson, 440 F.3d 131, 143 (3d Cir.2006); D'Aurizio v. Palisades Park, 963 F.Supp. 387 (D.N.J. 1997), aff'd, 151 F.3d 1024 (3d Cir.1998), cert. denied, 525 U.S. 870, 119 S.Ct. 166, 142 L.Ed.2d 135 (1998). See Wilhelm, 720 F.2d at 1175 (stating in dicta that in Scott, \"The Court made it clear that \u00a7 1985(3) did not cover conspiracies motivated by economic, political or commercial animus.\") (emphasis added). Plaintiff's complaint makes no allegations of invidious discrimination directed against an identifiable class, thus under well established precedent of the Tenth Circuit, his \u00a7 1985 claim is not actionable.\nFurther, \"The Court has held that \u00a7 1985(3) does not protect under the First Amendment against wholly private conspiracies.\" Wilhelm, 720 F.2d at 1176. See Bray, 506 U.S. 263, 113 S.Ct. 753, 122 L.Ed.2d 34; Tilton v. Richardson, 6 F.3d 683, 686 (10th Cir.1993). Assuming there was a conspiracy as alleged by plaintiff, it was a conspiracy among private actors only. Accordingly plaintiffs complaint fails to state a claim under section 1985.\n\nRICO\nPlaintiffs Complaint alleges a violation of 18 U.S.C. \u00a7 1962(b), (c) and (d).\nIn order to bring a RICO claim, a plaintiff must allege a violation of 18 U.S.C. \u00a7 1962, which consists of four elements: \"(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.\" (Citation omitted.)\nGillmor v. Thomas, 490 F.3d 791, 797 (10th Cir.2007). See 18 U.S.C. \u00a7 1962(a), (b), & (c).\n\"Racketeering activity\" is defined in 18 U.S.C. \u00a7 1961(1)(B) as any \"act which is indictable\" under federal law and specifically includes mail fraud and wire fraud. These underlying acts are \"referred to as predicate acts, because they form the basis for liability under RICO.\" BancOklahoma Mortgage Corp. v. Capital *1226 Title Co., 194 F.3d 1089, 1102 (10th Cir. 1999) (internal quotation omitted). Plaintiff asserts the predicate acts of wire and mail fraud.\nTo establish the predicate act of mail fraud [the plaintiff] must allege \"(1) the existence of a scheme or artifice to defraud or obtain money or property by false pretenses, representations or promises, and (2) use of the United States mails for the purpose of executing the scheme.\" (Citations omitted.) \"The elements of wire fraud are very similar, but require that the defendant use interstate wire, radio or television communications in furtherance of the scheme to defraud.\" (Citation omitted).\nTal v. Hogan, 453 F.3d 1244, 1263 (10th Cir.2006), cert. denied, ___ U.S. ___, 127 S.Ct. 1334, 167 L.Ed.2d 81 (2007). In addition, plaintiff must plead the nine elements of actionable fraud. \"Failure to adequately allege any one of one of the nine elements is fatal to the fraud claim.\" Id.\nAdditionally, a plaintiff must plead the predicate acts of fraud in a RICO claim with particularity. See Cayman Exploration Corp. v. United Gas Pipe Line Co., 873 F.2d 1357, 1362 (10th Cir.1989) (mail fraud and wire fraud). Conclusory allegations of conspiracy and mail and wire fraud fail to adequately state a RICO claim. To satisfy the particularity requirements of Rule 9(b), where, as here, mail and wire fraud are alleged as predicate acts of a RICO claim, the plaintiff must specify the time, place, and content of the alleged false representation, the identity of the party making the false statements and the consequences thereof, and how the particular mailing or transaction furthered the fraudulent scheme. Tal, 453 F.3d at 1263.\nPlaintiff's Complaint fails to allege the required elements of a RICO claim. Even if plaintiff were given an opportunity to cure his pleading by adding the requisite elements, complete with their specificity, mail fraud is not committed simply by sending false statements through the mail. Instead, the mails must have been used to further a scheme to defraud or obtain money or property through false pretenses. The same is true for wire fraud. Nothing in the Complaint indicates any belief by plaintiff that the defendants attempted, conspired, committed or intended to commit mail or wire fraud.\nPlaintiff's Complaint additionally mentions Hobbs Act extortion. The Hobbs Act prohibits interference with interstate commerce by extortion, as well as attempts or conspiracies to commit extortion. 18 U.S.C. \u00a7 1951(a). Extortion is defined as \"the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right.\" Id. \u00a7 1951(b)(2). Nothing in the Complaint indicates that defendants, or any of them, wrongfully obtained property from anyone by extortion or otherwise. Plaintiffs assertions that the defendants, by threats and their payment of the required fee, got the paper to publish the Responsive Advertisement and not to publish Plaintiffs Advertisement a second time, do not state a claim under this statute. Plaintiffs conclusory assertions of bribery meet the same fate.\nAdditional reasons compel the dismissal of plaintiffs RICO claim.[3] Under RICO, \"the `person' and the `enterprise' engaged in racketeering activities [must] *1227 be different entities.\" Bd. of County Comm'rs v. Liberty Group, 965 F.2d 879, 885 (10th Cir.), cert. denied, 506 U.S. 918, 113 S.Ct. 329, 121 L.Ed.2d 247 (1992). See 18 U.S.C. \u00a7 1962(c). RICO liability \"depends on showing that the defendants conducted or participated in the conduct of the `enterprise's affairs,' not just their own affairs.\" Reves v. Ernst & Young, 507 U.S. 170, 185, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993). Thus plaintiff must allege that the individual defendants \"were part of an enterprise which had an existence and purpose distinct from any one of them to establish [RICO] liability.\" Id. (emphasis added). See Dopp v. Loring, 54 Fed.Appx. 296, 298, 2002 WL 31839852, 1 (10th Cir. 2002), cert. dismissed, 538 U.S. 1054, 123 S.Ct. 2221, 155 L.Ed.2d 1103 (2003). Here, plaintiff alleges that the alleged RICO enterprises are certain named defendants, i.e., the Coffey County Bar Association, the Coffey County Commissioners, the Anderson County Commissioners, \"The Paper,\" and \"all defendants,\" rather than different entities. Dk. 1, p. 6, 7, 10, 25-26. Plaintiff additionally includes the \"FBA,\" a non-defendant, in his list of enterprises. The court presumes this reference is to the Franklin County Bar Association, but finds no predicate act allegedly taken by that entity.\nRICO defines \"pattern of racketeering activity\" as requiring \"at least two acts of racketeering activity\" within a ten-year period. Id. \u00a7 1961(5). Although plaintiff alleges that the newspaper scheme was related to predicate acts in and after 1996, the Complaint conclusorily characterizes such acts as efforts to \"sully and disparage plaintiff's reputation.\" Dk. 1, p. 14. The Complaint fails to show that the acts allegedly taken prior to October of 2006 are part of the same common scheme as the acts occurring thereafter. Even if defendants' acts from October 30th through on or about November 6th, 2006 were related as part of a common scheme, plaintiff has failed to allege that they pose a threat of continuing criminal activity. In a RICO case, the complaint must allege continuity. Duran v. Carris, 238 F.3d 1268, 1271 (10th Cir.2001). At best, what plaintiff alleges is a closed-ended series of predicate acts constituting a single scheme to accomplish a discrete goal [publication of the Responsive Advertisement in lieu of Plaintiff's Advertisement] directed at only one individual [the plaintiff] with no potential to extend to other persons or entities. See Boone v. Carlsbad Bancorporation, Inc., 972 F.2d 1545, 1556 (10th Cir.1992). Therefore, the allegations of the Complaint do not show sufficient continuity to sustain plaintiff's RICO claim.\nHere, as in Duran, plaintiff simply has not alleged \"the type of long-term criminal activity envisioned by Congress when it enacted RICO.\" Duran, 238 F.3d at 1271 (affirming dismissal of RICO claims). Because it is patently obvious that plaintiff will be unable to state a RICO claim against any defendant, an amendment of plaintiff's complaint would be futile.[4]\n\nRequest to amend complaint\nThe court notes that on several occasions throughout his responsive papers, the plaintiff requests leave to amend his complaint and seeks the court's guidance, as well as that of defendants, in curing his pleading deficiencies.\n\"Dismissal of a pro se complaint for failure to state a claim is proper *1228 only where it is obvious that the plaintiff cannot prevail on the facts he has alleged and it would be futile to give him an opportunity to amend. (quotation omitted).\" Kay v. Bemis, 500 F.3d 1214, 1217 (10th Cir.2007). Here, the facts alleged, no matter how they may be massaged in the future, fail to plausibly violate any of the federal laws invoked by the plaintiff.\n\nState law claims\nBecause no viable federal claim has been presented under 42 U.S.C. \u00a7 1983, \u00a7 1985 or RICO, the court lacks any basis for subject matter jurisdiction. The court declines to invoke its supplemental jurisdiction over any claims arising under state law. See 28 U.S.C. \u00a7 1367(c)(3) (stating a district court may decline to exercise supplemental jurisdiction over a state law claim if it \"has dismissed all claims over which it has original jurisdiction\"); Bauchman v. West High Sch., 132 F.3d 542, 549 (10th Cir.1997) (\"If federal claims are dismissed before trial, leaving only issues of state law, `the federal court should decline the exercise of jurisdiction by dismissing the case without prejudice.'\"), cert. denied, 524 U.S. 953, 118 S.Ct. 2370, 141 L.Ed.2d 738 (1998) (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988)). Accordingly, the court offers no opinion on the viability of any of plaintiff's state law claims.\nIT IS THEREFORE ORDERED that the following motions to dismiss are granted: Dk. 9, 20, 22, 51, 60, 63 and 89. Plaintiffs federal claims are dismissed for failure to state a claim upon which relief may be granted, and plaintiffs claims arising under state law are dismissed without prejudice.\nIT IS FURTHER ORDERED that the following motions are denied: Dk. 43, 72 and 118.\nIT IS FURTHER ORDERED that Dk. 116 is granted to the extent that plaintiff is permitted leave to file excess pages in his responses to defendants' motions to dismiss, as well as all pleadings currently on file.\nNOTES\n[1] \"The relevant question is whether the challenged regulation authorizes suppression of speech in advance of its expression.\" Ward, 491 U.S. at 795 n. 5, 109 S.Ct. 2746.\n[2] Surprisingly, counsel for defendant Witteman fails to address this issue.\n[3] The court does not agree with defendants' assertion that plaintiff lacks standing to bring a RICO claim, as the Complaint sufficiently asserts injury to plaintiff's business or property by reason of a RICO violation. See Dk. 1, paras. 105, 106.\n[4] Three named defendants have been served only recently, if at all, and have not yet filed responsive pleadings. The amended complaint fails to state a claim under \u00a7 1985 and under RICO even as to these unserved defendants, but the \u00a7 1983 claims involve individual determinations which cannot be made absent a responsive pleading.\n"} -{"text": "\nNO. 07-05-0165-CV\n\nIN THE COURT OF APPEALS\n\nFOR THE SEVENTH DISTRICT OF TEXAS\n\nAT AMARILLO\n\nPANEL D\n\nAPRIL 18, 2006\n______________________________\n\nIN RE ONE MAN'S ROLEX WATCH YELLOW GOLD, \nONE YELLOW GOLD BRACELET, and ONE YELLOW GOLD MAN'S RING \n_________________________________\n\nFROM THE 181ST DISTRICT COURT OF POTTER COUNTY;\n\nNO. 90,912-B; HON. JOHN BOARD, PRESIDING\n_______________________________\n\nOpinion\n_______________________________\n\nBefore QUINN, C.J. and REAVIS and CAMPBELL, JJ.\n\tOmar Mendoza appeals from a post-answer default judgment forfeiting his interest\nin a Rolex watch, gold bracelet, and gold ring. The forfeiture occurred under the auspices\nof Chapter 59 of the Code of Criminal Procedure. Mendoza contends that the default\njudgment should be reversed because he 1) was afforded no notice or was denied\nsufficient notice of the trial and 2) was denied the ability to obtain a record of the forfeiture\nhearing since the proceeding was not memorialized. We address only the second issue\nfor it is dispositive and, upon addressing it, reverse the judgment.\n Issue Two - No Recording of the Trial\n\tA forfeiture proceeding is civil in nature. Thus, the procedures to be followed are\nthose applicable to other civil suits in general. Tex. Code Crim. Proc. Ann. art. 59.05(b)\n(Vernon Supp. 2005) (stating that \"[a]ll cases under this chapter shall proceed to trial in the\nsame manner as in other civil cases\"). Furthermore, statute places upon the State the\nburden of proving, by a preponderance of the evidence, that the item being forfeited is\nsubject to forfeiture. Id. \n\tNext, authority holds that the failure to have a court reporter transcribe an\nevidentiary proceeding when the appellant and his counsel are absent from it constitutes\nreversible error. Sharif v. Par Tech, Inc., 135 S.W.3d 869, 873 (Tex. App.-Houston [1st\nDist.] 2004, no pet.); Chase Bank of Texas, N.A. v. Harris County Water Control & Improv.\nDist., 36 S.W.3d 654, 655-56 (Tex. App.-Houston [1st Dist.] 2000, no pet.); see Rogers v.\nRogers, 561 S.W.2d 172, 173-74 (Tex. 1978) (holding that if an appellant \"exercises due\ndiligence and through no fault of his own is unable to obtain a proper record of the\nevidence introduced, this may require a new trial where his right to have the case reviewed\ncan be preserved in no other way\").\n\tHere, the clerk's record discloses that the State sued to forfeit the property\nmentioned earlier. Mendoza was joined as a party and filed a verified answer denying his\nopponent's purported right to relief. When the proceeding ultimately came for trial, neither\nMendoza nor his attorney of record was present. Thereafter, the trial court rendered the\npost-answer default judgment at issue. That the trial occurred on the designated date is\nundisputed, as is the fact that a court reporter transcribed neither the evidence presented\nnor the argument proffered at the hearing. These circumstances evince reversible error\nof the kind described in Rogers, Sharif, and Chase Bank. \n\tAdditionally, we reject the State's contention that no error arose because the trial\ncourt was able to grant judgment based solely on the State's pleadings. A post-answer\ndefault judgment may not be entered based solely on the pleadings; rather, the plaintiff\nmust offer evidence and prove his claim. In re K.B.A., 145 S.W.3d 685, 690 (Tex.\nApp.-Fort Worth 2004, no pet.); Sharif v. Par Tech, Inc., 135 S.W.3d at 873. And, to the\nextent that the trial court insinuated in its judgment that it received evidence at the trial, the\nproceeding was evidentiary in nature and controlled by Rogers, Sharif, and Chase Bank.\n\tWe also reject the contention that Rogers and its progeny is not controlling because\nMendoza failed to urge an issue on appeal questioning the sufficiency of the evidence. \nWithout a record of the evidence, one can hardly claim with any semblance of authority\nthat the evidence was insufficient. And, we opt not to require from Mendoza that which\nhe cannot do (i.e. review the record and attack the sufficiency of the evidence) as a\ncondition to preserving his complaint. Gilley v. Anthony, 404 S.W.2d 60, 64 (Tex. Civ.\nApp.-Dallas 1966, no writ) (holding that the law will not require one to do the fruitless). \n\tAccordingly, we sustain issue two, reverse the judgment, and remand the cause for\nnew trial.\n\n\t\t\t\t\t\t\tBrian Quinn \n\t\t\t\t\t\t Chief Justice \n \n \n"} -{"text": " PUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 12-1739\n\n\nMARY JOHNSON,\n\n Plaintiff - Appellant,\n\nFORD JOHNSON,\n\n Counter Defendant - Appellant,\n\n v.\n\nUNITED STATES OF AMERICA,\n\n Defendant - Appellee.\n\n\n\nAppeal from the United States District Court for the District of\nMaryland, at Greenbelt. Deborah K. Chasanow, Chief District\nJudge. (8:09-cv-00787-DKC)\n\n\nArgued: September 17, 2013 Decided: November 5, 2013\n\n\nBefore WILKINSON, DUNCAN, and AGEE, Circuit Judges.\n\n\nAffirmed by published opinion. Judge Agee wrote the opinion, in\nwhich Judge Wilkinson and Judge Duncan joined.\n\n\nARGUED: Diana M. Schobel, DMS LAW, LLC, Frederick, Maryland, for\nAppellants. Gretchen M. Wolfinger, UNITED STATES DEPARTMENT OF\nJUSTICE, Washington, D.C., for Appellee. ON BRIEF: Rod J.\nRosenstein, United States Attorney, OFFICE OF THE UNITED STATES\nATTORNEY, Baltimore, Maryland; Kathryn Keneally, Assistant\n\fAttorney General, Teresa E. McLaughlin, Tax Division, UNITED\nSTATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.\n\n\n\n\n 2\n\fAGEE, Circuit Judge:\n\n Mary Johnson (\u201cMrs. Johnson\u201d) brought this suit against the\n\nUnited States seeking a refund of payments on a federal\n\nwithholding tax penalty assessed against her under 26 U.S.C.\n\n\u00a7 6672. 1 The Government counterclaimed against both Mrs. Johnson\n\nand her husband, Ford Johnson (\u201cMr. Johnson\u201d), individually, to\n\nreduce to judgment the remaining balance of the trust fund\n\nrecovery penalties assessed against them. The Johnsons now\n\nappeal the district court\u2019s grant of summary judgment to the\n\nGovernment against each of them. For the reasons that follow,\n\nwe affirm the judgment of the district court.\n\n\n\n I.\n\n The following facts are either uncontroverted, taken in the\n\nlight most favorable to the Johnsons, or have been admitted by\n\nthe Johnsons in their pleadings. 2 In 1969, Mr. Johnson formed a\n\n\n\n\n 1\n The \u00a7 6672 assessment was made against Mrs. Johnson for\nthe following tax quarters ending: December 31, 2001; September\n30, 2002; March 31, 2003; June 30, 2003; June 30, 2004;\nSeptember 30, 2004; and December 31, 2004. (J.A. 27.)\n 2\n When reviewing the district court\u2019s grant of summary\njudgment, we construe the facts in the light most favorable to\nthe Johnsons, the nonmoving party. Laber v. Harvey, 438 F.3d\n404, 415 (4th Cir. 2006) (en banc); see also Bright v. QSP,\nInc., 20 F.3d 1300, 1305 (4th Cir. 1994), cert. denied, 513 U.S.\n(1994) (statements in a party\u2019s pleadings are conclusively\nbinding on that party).\n\n\n 3\n\fnon-profit corporation, Koba Institute, Inc. (\u201cKoba Institute\u201d), 3\n\nto perform various government contracts in conjunction with Koba\n\nAssociates, Inc. (\u201cKoba Associates\u201d), a for-profit corporation\n\nthat he owned and managed. When Koba Associates failed to pay\n\nits payroll taxes in the mid-1990s, the Internal Revenue Service\n\n(\u201cIRS\u201d) assessed trust fund recovery penalties against Mr.\n\nJohnson pursuant to 26 U.S.C. \u00a7 6672. 4 The outstanding payroll\n\ntaxes, accompanied by the lien subsequently imposed on Mr.\n\nJohnson for the \u00a7 6672 trust fund recovery penalties, ultimately\n\nled Mr. Johnson to close Koba Associates. 5 The presence of the\n\nlien severely limited Mr. Johnson\u2019s ability to obtain credit for\n\nKoba Institute.\n\n\n 3\n Koba Institute provides residential and educational\nservices to special needs children in Maryland.\n 4\n Section 6672 provides in pertinent part:\n\n Any person required to collect, truthfully\n account for, and pay over any tax imposed by\n this title [a \u201cresponsible person\u201d] who\n willfully fails to . . . account for and pay\n over such tax, or willfully attempts in any\n manner to evade or defeat any such tax or\n the payment thereof, shall, in addition to\n other penalties provided by law, be liable\n to a penalty equal to the total amount of\n the tax evaded, or not collected, or not\n accounted for and paid over.\n\n26 U.S.C. \u00a7 6672(a).\n 5\n When the IRS assessed trust fund recovery penalties\nagainst Mr. Johnson for the failure of Koba Associates to pay\nits payroll taxes, the IRS considered assessing the same\npenalties against Mrs. Johnson but ultimately declined to do so.\n\n\n 4\n\f This fiscal reality led Mr. Johnson to approach Mrs.\n\nJohnson about restructuring Koba Institute so as to facilitate a\n\ncontinuation of their business. In 1998, Koba Institute\n\nconverted to a for-profit corporation under Maryland law, with\n\nMrs. Johnson as its sole shareholder. Because Mrs. Johnson \u201cwas\n\nnot encumbered by a lien\u201d like Mr. Johnson, her status as the\n\ncorporation\u2019s owner enabled Koba Institute to enter into leases\n\nand other contracts, as well as obtain lines of credit based on\n\nMrs. Johnson\u2019s endorsement. (J.A. 998.)\n\n As the sole shareholder of Koba Institute, Mrs. Johnson\n\nelected herself as chair of the corporation\u2019s board of directors\n\nin 2001. The corporation\u2019s bylaws require that the chair of the\n\nboard \u201cbe elected President of the Institute.\u201d (J.A. 615.) 6\n\n\n 6\n The bylaws describe the president\u2019s role as follows:\n\n The President [who] shall be chairperson of\n the Board of Directors . . . shall preside\n at all meetings of the Board and/or\n officers. [S]he shall review, approve and\n recommend to the Board all proposed projects\n and budgets on an annual basis. [S]he shall\n be authorized to execute . . . legal papers,\n documents and instruments on behalf of the\n Institute. [S]he shall have general\n authority to manage the business and affairs\n of the Institute on a day to day basis,\n subject to and in accordance with the\n directions of the Board of Directors.\n\n(J.A. 617\u201318.) The bylaws also authorize the board members to\n\u201capprov[e] . . . proposed projects and budgets,\u201d \u201cestablish[ ] .\n. . banking relations including [the] power to borrow money,\u201d\n(Continued)\n 5\n\fAccording to the Johnsons, because they had agreed that Mrs.\n\nJohnson would be the primary caregiver of the couple\u2019s children,\n\nMrs. Johnson \u201cdelegated\u201d and \u201centrusted\u201d her authority in the\n\ncorporation to Mr. Johnson, and thereafter elected Mr. Johnson\n\npresident of Koba Institute on February 20, 2001,\n\nnotwithstanding the contrary bylaw requirement. (See J.A. 16,\n\n478, 480, 1481\u201382, 1515.) Mrs. Johnson, in turn, served as the\n\ncorporation\u2019s vice president.\n\n The same day that Mrs. Johnson appointed herself as board\n\nchair, February 20, 2001, Koba Institute\u2019s board of directors\u2014\n\ncomprised of the Johnsons and an unrelated corporate secretary\u2014\n\nunanimously approved the following resolution:\n\n The present holders of the offices of\n President, Vice-President, Treasurer and\n Secretary are authorized to sign checks,\n drafts, instruments, . . . and . . . orders\n for the payment of money from [Koba\n Institute] accounts, to endorse checks,\n instruments, evidences of indebtedness and\n orders payable, owned or held by [Koba\n Institute], and to . . . sign any\n application, deposit agreement, signature\n card or other documentation required by the\n Bank [of America], with the following\n limitation: . . . that either Ford T.\n Johnson, Jr. (President of the\n Company/Treasurer) or Mary L. Fogg Johnson\n (Vice-President of the Company/Chairperson)\n may act alone or with any other named\n signatory to said accounts in any\n\n\n\nand \u201ccontrol and manage[ ] . . . property, including [the] power\nto purchase, . . . and dispose of the same.\u201d (J.A. 616\u201317.)\n\n\n 6\n\f transactions with the Bank; however, any\n transactions . . . which are not signed by\n either [of them] must be signed by at least\n two of the following people . . . .\n\n(J.A. 612 (emphasis added).) Koba Institute\u2019s payroll account\n\nexpressly provided that Mrs. Johnson had the power to \u201csign\n\nsingularly\u201d on that account. (J.A. 647, 651, 670; see also J.A.\n\n537\u201338, 1486\u201387.)\n\n Having \u201cdelegated\u201d her authority to Mr. Johnson, Mrs.\n\nJohnson\u2019s actual involvement at Koba Institute was limited\n\nduring the 2001 through 2004 period. Nonetheless, she had an\n\noffice at Koba Institute and received a significant annual\n\nsalary ranging from approximately $100,000 to $193,000, as well\n\nas a corporate car and cell phone. In addition, the rent for\n\nMrs. Johnson\u2019s residence, shared with Mr. Johnson, was provided\n\nby Koba Institute. 7\n\n In the 2001 to 2004 period, Mrs. Johnson only came to work\n\nonce per month. When she did so, she would approve any board\n\nresolutions, such as ratification of Mr. Johnson\u2019s acts as\n\npresident, or perform tasks in the human resources department.\n\nThus, while Mrs. Johnson may have given an opinion regarding\n\n 7\n During the same periods, Mr. Johnson received no direct\nsalary from the corporation, instead having Koba Institute pay\nthe rent for the couple\u2019s home. In 2001, 2002, and 2004, these\nrent payments totaled between $40,000 and $50,000. (J.A. 468\u2013\n69, 473, 556, 594\u201395.) In 2003, however, Koba Institute did not\nmake any rent payments on Mr. Johnson\u2019s behalf, and he received\nno compensation from the corporation.\n\n\n 7\n\fhiring and firing employees during the relevant time frame, Mr.\n\nJohnson made the ultimate decisions regarding employment. (See\n\nJ.A. 1508\u201309, 1608, 1661.) Indeed, because Mr. Johnson oversaw\n\nthe corporation\u2019s day-to-day operations, other employees viewed\n\nhim as \u201cthe one who decides everything\u201d and went to Mr. Johnson\u2014\n\nrather than Mrs. Johnson\u2014with any questions that arose in the\n\nbusiness, including financial matters such as the payment of\n\npayroll taxes. (J.A. 1605.)\n\n When Mr. Johnson was out of the office, he left explicit\n\ninstructions for Mrs. Johnson to follow on Koba Institute\n\nbusiness, including which checks to sign in his absence.\n\nBecause of her limited involvement with the corporation\u2019s daily\n\noperations, however, Mrs. Johnson was unaware of \u201cthe background\n\nor the context\u201d for these checks and did not feel comfortable\n\nsigning any checks that Mr. Johnson had not authorized. (J.A.\n\n1576.) Accordingly, from 2001 through 2004, she never attempted\n\nto write checks that Mr. Johnson had not already approved.\n\n Near the end of 2004, Mrs. Johnson received a notice from\n\nthe IRS that Koba Institute had not paid its payroll taxes for\n\nseveral quarters from 2001 through 2004. Prior to that time,\n\nMrs. Johnson was unaware that the payroll taxes were unpaid.\n\nUpon receipt of the notice, she had \u201ca serious talk\u201d with Mr.\n\nJohnson and \u201ctold him\u201d that the situation was \u201cunacceptable\u201d and\n\nthat Koba Institute had \u201cto take steps to make sure that it [did\n\n 8\n\fnot] happen again.\u201d (J.A. 1501.) Mrs. Johnson then fired the\n\nfinance director, who had been tasked with making payroll tax\n\npayments, and \u201cdirected Mr. Johnson to personally handle all\n\nfuture tax payments as of January 2005.\u201d (J.A. 17.) She\n\n\u201crequired\u201d Mr. Johnson to provide her with \u201cvisual proof\u201d of all\n\nwithholding tax payments that Koba Institute subsequently made.\n\n(J.A. 17.) Additionally, at least with regard to the payroll\n\naccount, Mrs. Johnson no longer followed the prior procedure for\n\ncheck authorization; that is, she no longer required instruction\n\nfrom Mr. Johnson before writing checks herself from the payroll\n\naccount for payment of the taxes.\n\n Due to Mrs. Johnson\u2019s \u201crevamped oversight of tax payments,\u201d\n\nKoba Institute began remitting its post-2004 payroll taxes to\n\nthe IRS in full and, generally, on time. (J.A. 17.) The\n\ncorporation did not, however, pay the outstanding delinquent\n\npayroll taxes for the 2001 through 2004 delinquent periods\n\nalthough it continued to pay its other business debts, such as\n\nemployee wages and Mrs. Johnson\u2019s compensation. Subsequently,\n\nthe IRS assessed trust fund recovery penalties (the \u201c100%\n\npenalty\u201d) against Mr. and Mrs. Johnson individually, pursuant to\n\n\n\n\n 9\n\f26 U.S.C. \u00a7 6672. 8 Mrs. Johnson later paid $351.00 toward her\n\nassessed penalty.\n\n On March 30, 2009, Mrs. Johnson filed suit in the United\n\nStates District Court for the District of Maryland seeking a\n\nrefund of the penalty she had paid, asserting that the \u00a7 6672\n\nassessment against her was erroneous. 9 The Government filed a\n\ncounterclaim against both of the Johnsons in order to reduce its\n\nassessments to judgment, seeking to recover the balance of\n\nassessments due, including penalties, interest, and costs.\n\nBased upon transcripts of account showing the balances due as of\n\nAugust 22, 2011, the Government ultimately sought to recover\n\n$304,355.90 from Mrs. Johnson and $240,071.12 from Mr. Johnson.\n\n The Government filed separate motions for summary judgment\n\nagainst Mr. and Mrs. Johnson, contending that each was liable\n\nunder \u00a7 6672 as a \u201cresponsible person\u201d who had \u201cwillfully\u201d\n\nfailed to pay over the withheld payroll taxes. The Government\n\nsupported the assessments with Forms 4340\u2014Certificates of\n\nAssessments, Payments, and Other Specified Matters, noting that\n\nthe assessments on the Forms 4340 were presumptively correct and\n\nthat the burden fell on the Johnsons to demonstrate otherwise.\n\n 8\n The \u00a7 6672 trust fund recovery penalty is commonly termed\nthe \u201c100% penalty\u201d by tax practitioners and we use that term\nhere for the \u00a7 6672 penalties assessed.\n 9\n Mrs. Johnson initially named the IRS as the defendant in\nthis action. The parties subsequently agreed that the proper\ndefendant was the United States, which was substituted as such.\n\n\n 10\n\fThe Government also moved to strike the reports and testimony of\n\nan expert witness the Government anticipated the Johnsons would\n\nrely upon in opposing summary judgment.\n\n The Johnsons jointly opposed the Government\u2019s motion to\n\nstrike, and separately opposed the Government\u2019s motions for\n\nsummary judgment. Mr. Johnson also moved for partial summary\n\njudgment against the Government as to him.\n\n The district court granted the Government\u2019s motions for\n\nsummary judgment, denied Mr. Johnson\u2019s motion for partial\n\nsummary judgment, and denied the Government\u2019s motion to strike\n\nas moot. With respect to Mr. Johnson, the district court\n\ndetermined that the assessment against him was valid, rejecting\n\nhis argument that the assessment was not made within the three-\n\nyear limitations period established by I.R.C. \u00a7 6501. The\n\ndistrict court then concluded that no material issue of disputed\n\nfact remained as to Mr. Johnson.\n\n With respect to Mrs. Johnson, the district court held that\n\nshe had also failed to show a genuine dispute of material fact\n\nregarding her liability. The court determined that \u201cMrs.\n\nJohnson was a responsible person at Koba Institute during the\n\nrelevant quarters even though her participation in the\n\ncorporation\u2019s affairs was minimal,\u201d and that she had acted\n\n\u201cwillfully\u201d in failing to see to it that the outstanding tax\n\nliabilities were paid. (J.A. 253, 268.)\n\n 11\n\f The district court also concluded that the judgment entered\n\nagainst Mrs. Johnson would not result in a double recovery for\n\nthe Government. The court noted the Government\u2019s policy of\n\nretaining only one full satisfaction of an underlying tax\n\nliability despite it being able to attempt to collect against\n\nany responsible party, and reasoned that any potential issues\n\ncould be avoided through careful drafting of the final judgment\n\norder.\n\n Finally, the district court denied as moot the Government\u2019s\n\nmotion to strike the reports of the Johnsons\u2019 expert and to\n\nexclude his testimony at trial, finding that in their opposition\n\nto the Government\u2019s motions for summary judgment, the Johnsons\n\nhad \u201cneither relied upon [the expert\u2019s] reports nor produced any\n\nevidence to create an issue of material fact\u201d that would\n\nprohibit the entry of summary judgment against them. (J.A.\n\n271.)\n\n The district court accordingly entered judgment in favor of\n\nthe Government and against Mrs. Johnson for $304,955.90 and\n\nagainst Mr. Johnson for $240,071.12, plus interest in each\n\ninstance at the rate specified in I.R.C. \u00a7 6601 from August 22,\n\n2011 until payment. The judgment order provided that the\n\njudgment would \u201cbe reduced to the extent that the United States\n\n. . . has collected or will collect on those debts pursuant to\n\nthe offer in compromise it approved with Koba Institute.\u201d (J.A.\n\n 12\n\f274.) The Johnsons filed a joint motion to alter, amend, or\n\nrelieve the judgment, which the district court denied.\n\n The Johnsons timely noted this appeal, and we have\n\njurisdiction pursuant to 28 U.S.C. \u00a7 1291.\n\n\n\n II.\n\n The Internal Revenue Code (\u201cI.R.C.\u201d or the \u201cCode\u201d) requires\n\nemployers to withhold federal social security and income taxes\n\nfrom the wages of their employees. See 26 U.S.C. \u00a7\u00a7 3102(a),\n\n3402(a); Erwin v. United States, 591 F.3d 313, 319 (4th Cir.\n\n2010). Because the employer holds these taxes as \u201cspecial\n\nfund[s] in trust for the United States,\u201d 26 U.S.C. \u00a7 7501(a)\n\n(emphasis added), the withheld amounts are commonly referred to\n\nas \u201ctrust fund taxes,\u201d Slodov v. United States, 436 U.S. 238,\n\n243 (1978) (internal quotation marks omitted).\n\n The Code \u201cassure[s] compliance by the employer with its\n\nobligation . . . to pay\u201d trust fund taxes by imposing personal\n\nliability on officers or agents of the employer responsible for\n\n\u201cthe employer\u2019s decisions regarding withholding and payment\u201d of\n\nthe taxes. Id. at 247 (interpreting 26 U.S.C. \u00a7 6672). To that\n\nend, \u00a7 6672(a) of the Code provides that \u201c[a]ny person required\n\nto collect, truthfully account for, and pay over any tax . . .\n\nwho willfully fails\u201d to do so shall be personally liable for \u201ca\n\npenalty equal to the amount of the tax evaded, or not . . . paid\n\n 13\n\fover,\u201d the 100% penalty. 26 U.S.C. \u00a7 6672(a). Although labeled\n\nas a \u201cpenalty,\u201d \u00a7 6672 is not primarily a punitive provision as\n\nit \u201cbrings to the government only the same amount to which it\n\nwas entitled by way of the tax.\u201d Turnbull v. United States, 929\n\nF.2d 173, 178 n.6 (5th Cir. 1991) (internal quotation marks\n\nomitted).\n\n Personal liability for a corporation\u2019s unpaid trust fund\n\ntaxes extends to any person who (1) is \u201cresponsible\u201d for\n\ncollection and payment of those taxes; and (2) \u201cwillfully\n\nfail[s]\u201d to see that the taxes are paid. Plett v. United\n\nStates, 185 F.3d 216, 218 (4th Cir. 1999); O\u2019Connor v. United\n\nStates, 956 F.2d 48, 50 (4th Cir. 1992). Once the IRS assesses\n\na taxpayer for this liability, the taxpayer has the burden of\n\nproof at trial on both elements of \u00a7 6672 liability. See\n\nO\u2019Connor, 956 F.2d at 50.\n\n We review de novo a district court\u2019s grant of summary\n\njudgment to the Government, resolving all disputed facts in\n\nfavor of the taxpayer. See O\u2019Connor, 956 F.2d at 50. To defeat\n\nsummary judgment, however, the taxpayer\u2014like any other litigant\u2014\n\nmust identify an error of law or a genuine issue of disputed\n\nmaterial fact. See Fed. R. Civ. P. 56(a); Anderson v. Liberty\n\nLobby, Inc., 477 U.S. 242, 256 (1986); see also Bouchat v. Balt.\n\nRavens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003).\n\n\u201c[I]n the absence of disputed material facts, summary judgment\n\n 14\n\frepresents a favored mechanism to secure the \u2018just, speedy, and\n\ninexpensive determination\u2019\u201d of taxpayer liability under \u00a7 6672.\n\nPlett, 185 F.3d at 223 (emphasis in original) (quoting Fed. R.\n\nCiv. P. 1).\n\n\n\n III.\n\n With the foregoing principles in mind, we turn to the\n\nclaims of error raised on appeal. Mr. Johnson contends that the\n\ngrant of summary judgment was erroneous because the assessment\n\nof the 100% penalty as to him was time-barred under \u00a7 6501 of\n\nthe Code. Mrs. Johnson argues that the grant of summary\n\njudgment against her was erroneous because she was neither a\n\n\u201cperson responsible\u201d for the payment of Koba Institute\u2019s\n\nwithholding taxes nor \u201cwillfully\u201d failed to do so. Lastly, the\n\nJohnsons posit that the amounts of their respective tax\n\nliabilities under \u00a7 6672 were incorrectly calculated because\n\ndisputed issues of material fact remained to be determined. We\n\nconsider each argument in turn.\n\n\n\n A.\n\n Mr. Johnson contends that the assessment of the 100%\n\npenalty against him was not \u201cmade within the limitations period\n\nset forth in 26 U.S.C. \u00a7 6672.\u201d (Br. 29.) However, Mr.\n\nJohnson\u2019s one-page \u201cargument\u201d on brief as to this issue gives no\n\n 15\n\fdescription as to the basis at law for his contention. Even\n\nafter questioning at oral argument, we are left with no firm\n\nguide as to why Mr. Johnson contends the assessments are time-\n\nbarred.\n\n Mr. Johnson has not challenged the basis for the district\n\ncourt\u2019s decision in any meaningful way. See Fed. R. App. P.\n\n28(a)(9)(A) (requiring argument section of an appellant\u2019s\n\nopening brief to contain \u201cappellant\u2019s contentions and the\n\nreasons for them, with citations to the authorities and parts of\n\nthe record on which the appellant relies\u201d). Here, Mr. Johnson\n\nhas failed to comply with the dictates of Federal Rule of\n\nAppellate Procedure 28(a)(9)(A), as he offers no argument\n\nexplaining how the district court erred; rather, he simply\n\nstates the issue he wishes to raise and cites several sections\n\nof the Code, but without analysis of how these statutes would\n\napply to him. As a result, we consider Mr. Johnson to have\n\nabandoned or waived his challenge to the district court\u2019s\n\ndetermination that the assessment of the 100% penalty against\n\nhim under \u00a7 6672 was not timely. See Edwards v. City of\n\nGoldsboro, 178 F.3d 234, 241 n.6 (4th Cir. 1999) (\u201cFailure to\n\ncomply with the specific dictates of [Federal Rule of Appellate\n\nProcedure 28(a)(9)(A)] with respect to a particular claim\n\ntriggers abandonment of that claim on appeal.\u201d); see also Oken\n\nv. Corcoran, 220 F.3d 259, 274 n.2 (4th Cir. 2000) (Michael, J.,\n\n 16\n\fconcurring) (\u201cIn order to preserve an issue on appeal, however,\n\nit is not enough to simply assert the claim; a party must\n\nprovide supporting argument.\u201d).\n\n Accordingly, we affirm the district court\u2019s grant of\n\nsummary judgment against Mr. Johnson individually.\n\n\n\n B.\n\n We next address the argument that the district court erred\n\nin granting summary judgment against Mrs. Johnson.\n\nSpecifically, Mrs. Johnson contends that she was not (1) a\n\n\u201cperson responsible\u201d for the payment of Koba Institute\u2019s\n\nwithholding taxes; and (2) did not \u201cwillfully\u201d fail to pay over\n\nthose taxes. We must disagree with Mrs. Johnson because the\n\nundisputed record shows that she was properly liable for the\n\n100% penalty.\n\n\n\n 1.\n\n The Code defines a \u201cresponsible person\u201d as one \u201crequired to\n\ncollect, truthfully account for, and pay over any tax,\u201d 26\n\nU.S.C. \u00a7 6672(a) (emphasis added). The Supreme Court has\n\ninterpreted this statutory language to apply to all \u201cpersons\n\nresponsible for collection of third-party taxes and not . . .\n\n[only] to those persons in a position to perform all three of\n\nthe enumerated duties.\u201d Slodov, 436 U.S. at 250. Thus, the\n\n 17\n\fCode deems anyone required to \u201ccollect\u201d or \u201caccount for\u201d or\n\n\u201cremit\u201d taxes a \u201cresponsible person\u201d for purposes of \u00a7 6672.\n\nSee Plett, 185 F.3d at 219.\n\n In determining whether a person is \u201cresponsible\u201d under\n\n\u00a7 6672, we undertake a \u201cpragmatic, substance-over-form inquiry\u201d\n\nfocused on the person\u2019s status, duty, and authority within the\n\ncorporation. Id. The \u201ccrucial inquiry is whether the person\n\nhad the \u2018effective power\u2019 to pay the taxes\u2014that is, whether he\n\n[or she] had the actual authority or ability, in view of his\n\nstatus within the corporation, to pay the taxes owed.\u201d Id.\n\n(quoting Barnett v. IRS, 988 F.2d 1449, 1454 (5th Cir. 1993)).\n\n Because this analysis focuses \u201con substance rather than\n\nform,\u201d holding a corporate title alone does not render a\n\ntaxpayer a \u201cresponsible person.\u201d O\u2019Connor, 956 F.2d at 51.\n\nWhile a determination of that status is necessarily fact-based,\n\nsummary judgment is nonetheless appropriate where, in the\n\nabsence of genuine disputes of material fact, it is clear \u201cas a\n\nmatter of law\u201d that the taxpayer satisfies this test and is a\n\n\u201cresponsible person.\u201d Barnett, 988 F.2d at 1454 & n.10\n\n(acknowledging that \u201ccountless courts have found responsibility\n\n[for purposes of \u00a7 6672] as a matter of law\u201d because \u201cextensive\n\ncaselaw . . . narrowly constrains a factfinder\u2019s province in\n\n\u00a7 6672 cases\u201d). Our analysis is guided by a list of non-\n\nexclusive factors common in the \u00a7 6672 case law, such as whether\n\n 18\n\fthe taxpayer served as an officer of the corporation or a member\n\nof its board of directors, controlled the corporation\u2019s payroll,\n\ndetermined which creditors to pay and when to pay them,\n\nparticipated in the corporation\u2019s day-to-day management, had the\n\nability to hire and fire employees, and possessed check-writing\n\nauthority. Erwin, 591 F.3d at 321; Plett, 185 F.3d at 219.\n\n Although \u201ca party cannot be presumed to be a responsible\n\nperson merely from titular authority,\u201d O\u2019Connor, 956 F.2d at 51,\n\nstatus as an officer or director is \u201cnevertheless material\u201d to\n\nthis determination, Teets v. United States, 29 Fed. Cl. 697, 706\n\n(Fed. Cl. 1993). Mrs. Johnson had been the corporation\u2019s sole\n\nshareholder since 1998 and consequently had the effective power\n\nto change the officers and directors as she chose and thereby\n\ndirect the business of the corporation. Separately as both vice\n\npresident and chair of the board of directors since early 2001,\n\nMrs. Johnson enjoyed considerable actual authority at Koba\n\nInstitute.\n\n The corporation\u2019s bylaws, board resolutions, and banking\n\ndocuments demonstrate that Mrs. Johnson was a \u201cresponsible\n\nperson,\u201d as it is clear that she had effective control of the\n\ncorporation, including its finances. See Taylor v. IRS, 69 F.3d\n\n411, 416\u201317 (10th Cir. 1995) (holding corporate director and\n\nofficer a \u201cresponsible person\u201d as a matter of law because he\n\n\u201cpossessed sufficient control over corporate finances, had\n\n 19\n\fauthority to borrow funds and write checks and thereby had the\n\n\u2018effective power\u2019 to pay those taxes\u201d (quoting Barnett, 988 F.2d\n\nat 1454)). The foregoing corporate documents indicate that Mrs.\n\nJohnson, while serving as chair of the board, would also serve\n\nas president of the corporation, a role that included authority\n\nto manage Koba Institute\u2019s daily affairs and to execute checks\n\nand other legal documents on its behalf. Although Mrs. Johnson\n\n\u201cdelegated\u201d and \u201centrusted\u201d this authority to Mr. Johnson prior\n\nto 2005, (See J.A. 16, 478, 480, 482, 1481\u201382, 1515), remaining\n\nonly minimally involved in the corporation\u2019s affairs as board\n\nchair and vice president, delegation of such authority does not\n\nrelieve a taxpayer of responsibility under \u00a7 6672, Purcell v.\n\nUnited States, 1 F.3d 932, 937 (9th Cir. 1993) (That a\n\ntaxpayer\u2019s function in an enterprise \u201cis unconnected to\n\nfinancial decision making or tax matters is irrelevant where\n\nthat individual has the authority to pay or to order the payment\n\nof delinquent taxes.\u201d); Erwin, 591 F.3d at 322. A taxpayer may\n\nbe a \u201cresponsible person\u201d if she \u201chad the authority required to\n\nexercise significant control over the corporation\u2019s financial\n\naffairs, regardless of whether [s]he exercised such control in\n\nfact.\u201d Purcell, 1 F.3d at 937 (concluding that a president and\n\nsole shareholder, who was also an authorized signatory on the\n\ncorporation\u2019s checking account, was a \u201cresponsible person\u201d even\n\nthough he had fully delegated all financial duties to another\n\n 20\n\femployee). Thus, despite delegating her authority to Mr.\n\nJohnson and permitting him to run the corporation\u2019s daily\n\naffairs, Mrs. Johnson remained a \u201cresponsible person\u201d because\n\nshe had effective control of the corporation and the effective\n\npower to direct the corporation\u2019s business choices, including\n\nthe withholding and payment of trust fund taxes.\n\n Although Mrs. Johnson maintains that any authority she held\n\nwas merely technical in nature, the undisputed evidence\n\nestablishes that she possessed both legal and actual authority\n\nover Koba Institute. See United States v. Landau, 155 F.3d 93,\n\n103 (2d Cir. 1998) (if taxpayer fails to show a genuine dispute\n\nof material fact on nature of authority, the court \u201cmay\n\nreasonably conclude that the documentary evidence of authority\n\nreflects the reality\u201d). Mrs. Johnson\u2019s voluntary minimal\n\ninvolvement in daily corporate affairs before 2005, however, and\n\nassertions that Mr. Johnson exercised all daily operating\n\nauthority fail to create a genuine dispute of material fact\n\nregarding limitations on her effective power as to the trust\n\nfund taxes. Any deferral by Mrs. Johnson in the exercise of her\n\nauthority never altered the fact that she possessed \u201ceffective\n\npower\u201d over Koba Institute at all times. See Barnett, 988 F.2d\n\nat 1454. Indeed, Mrs. Johnson\u2019s actions immediately after\n\nlearning of the tax delinquencies in December 2004\u2014a period that\n\n\u201ccast[s] light\u201d on her responsibility from 2001 through 2004\u2014\n\n 21\n\fdemonstrate that her actual authority was co-extensive with the\n\nlegal authority she possessed. Erwin, 591 F.3d at 321.\n\n Mrs. Johnson admits in her pleadings that she \u201cfired the\n\nfinance director,\u201d the employee tasked with making payroll tax\n\npayments, as soon as she discovered that Koba Institute had not\n\nremitted these taxes as required by law. (J.A. 17.) She also\n\n\u201cdirected Mr. Johnson to personally handle all future tax\n\npayments as of January 2005\u201d and \u201crequired\u201d him to provide her\n\nwith \u201cvisual proof\u201d of all tax payments the corporation made.\n\n(J.A. 17.) These admissions indicate that Mrs. Johnson\u2019s status\n\nin the corporation during the quarters at issue enabled her to\n\nhave \u201csubstantial input into [its financial] decisions [from\n\n2001 through 2005], had [s]he wished to exert [her] authority.\u201d 10\n\nBarnett, 988 F.2d at 1455 (quotation marks omitted).\n\n\n\n\n 10\n Although not singly determinative, Mrs. Johnson\u2019s\nexecution of corporate leases and lines of credit as a guarantor\nfor Koba Institute offers additional support for the conclusion\nthat she was a \u201cresponsible person\u201d for \u00a7 6672 purposes. See\nErwin, 591 F.3d at 322 (discussing a taxpayer\u2019s personal\nguarantees of corporate loans in determining his responsibility,\nbut noting that this fact \u201c[did] not alone establish\u201d his status\nas a \u201cresponsible person\u201d). Without these acts by Mrs. Johnson,\nthe corporation\u2019s financial capacity would have been adversely\naffected. Because Mrs. Johnson actively intervened to keep the\ncorporation financially viable, Koba Institute was able to pay\nits creditors. The record further reflects that Mrs. Johnson\nmade more than a dozen loans to Koba Institute between 2001 and\n2003, after Mr. Johnson had informed her that the corporation\nneeded additional funds to cover its operating expenses.\n\n\n 22\n\f Moreover, the fact that, from 2001 through 2004, Mrs.\n\nJohnson followed the corporation\u2019s internal policy and did not\n\nwrite checks without knowing that Mr. Johnson had previously\n\napproved them does not negate \u00a7 6672 \u201cresponsible person\u201d\n\nstatus. (See J.A. 1484\u201391, 1576.) Although she followed\n\ncorporate procedure without exception during that time, it is\n\nundisputed that Mrs. Johnson ceased following this policy almost\n\nimmediately upon learning of the 2001-2004 payroll tax\n\ndeficiencies and could have done so at any earlier time.\n\nFollowing her \u201crevamped oversight of tax payments,\u201d Mrs. Johnson\n\nwould write checks from the payroll account without any\n\ninstruction from Mr. Johnson. (J.A. 17, 1484\u201385.) Accordingly,\n\nthe fact that Mrs. Johnson previously chose not to write checks\n\nwithout Mr. Johnson\u2019s approval does not show that she was\n\nprevented earlier from doing so other than by her own choice.\n\nSee, e.g., Thosteson v. United States, 331 F.3d 1294, 1299\u20131300\n\n(11th Cir. 2003) (holding corporate officer and stockholder a\n\n\u201cresponsible person\u201d as a matter of law even though he had\n\n\u201climited check writing authority, up to only $750, without a\n\ncountersignature\u201d); Lyon v. United States, 68 F. App\u2019x 461, 469\n\n(4th Cir. 2003) (unpublished) (per curiam) (\u201cThe fact that [the\n\ntaxpayer] chose not to exercise his legal authority is not\n\nenough to show that he had no actual authority. . . . [He] has\n\nnot demonstrated that his father actually prevented him, or that\n\n 23\n\fhe could have prevented him, from paying the taxes if [he] had\n\nattempted to do so.\u201d). The record also indicates that Koba\n\nInstitute opened several operating accounts between 2001 and\n\n2005, and that on each of those accounts, Mrs. Johnson was fully\n\nauthorized to write checks and execute other bank documents.\n\n While she may not have been running the day-to-day\n\noperations of the corporation between 2001 and 2004, Mrs.\n\nJohnson had a non-delegable responsibility to monitor Koba\n\nInstitute\u2019s financial affairs. See Barnett, 988 F.2d at 1457\n\n(\u201c[W]e believe that not only is it a bad business practice for a\n\nhigh-level company official such as [Mrs. Johnson] to fail to\n\nmonitor [the corporation\u2019s] finances, it also subjects [her] to\n\nbeing held a responsible party under \u00a7 6672.\u201d). Mrs. Johnson\n\nhad the effective power to exercise authority when she chose to\n\ndo so, even though she chose at times to voluntarily limit her\n\ninvolvement in corporate affairs. Although Mrs. Johnson often\n\nchose not to exercise the authority which she possessed, such a\n\ndecision is insufficient to permit a taxpayer to avoid \u00a7 6672\n\nresponsibility. See Kinnie v. United States, 994 F.2d 279, 284\n\n(6th Cir. 1993) (stating that a taxpayer need not \u201calways\n\nexercise his powers\u201d to remain responsible for seeing that\n\nwithholding taxes are paid, and \u201cmay not escape liability by\n\ndelegating the task of paying over the taxes to someone else\u201d).\n\nMoreover, after 2004, while the prior periods\u2019 payroll taxes\n\n 24\n\fremained unpaid, Mrs. Johnson actively exercised her authority\n\nover the affairs of Koba Institute while continuing to receive\n\nsubstantial compensation and benefits from the corporation. 11\n\n We therefore conclude that the Government presented\n\nundisputed evidence that established as a matter of law that\n\nMrs. Johnson was a \u201cresponsible person\u201d under \u00a7 6672 during the\n\nrelevant tax periods because she had the effective power to pay\n\nthe trust fund taxes of Koba Institute. 12\n\n\n 11\n While also relevant to the \u201cwillfulness\u201d finding\ndiscussed in the next section, the same evidence of Mrs.\nJohnson\u2019s knowing receipt of substantial assets from the\ncorporation while the payroll taxes remained unpaid also\nbolsters the proof of her \u201cresponsible person\u201d status. The\nrecord shows that Mrs. Johnson received an annual salary ranging\nfrom approximately $100,000 to $193,000 from 2001 through 2004,\nas well as a corporate car and cell phone. Koba Institute also\npaid the rent for the Johnsons\u2019 home, totaling between $40,000\nand $50,000 in 2001, 2002, and 2004.\n 12\n We note that other courts have reached precisely the same\nconclusion in considering similar facts. See, e.g., Jefferson\nv. United States, 546 F.3d 477, 481 (7th Cir. 2008) (holding\nboard president \u201cresponsible person\u201d as a matter of law because\nhe secured loans and directed past payment of taxes for the\ncorporation, reviewed financial reports, and had check-signing\nauthority); Thosteson, 331 F.3d at 1299\u20131300 (holding corporate\nofficer and stockholder a \u201cresponsible person\u201d as a matter of\nlaw even though he had \u201climited check writing authority, up to\nonly $750, without a countersignature\u201d); Taylor, 69 F.3d at 417\n(holding corporate director and officer a \u201cresponsible person\u201d\nas a matter of law because he \u201cpossessed sufficient control over\ncorporate finances, had authority to borrow funds and write\nchecks and thereby had the \u2018effective power\u2019 to pay those taxes\u201d\n(quoting Barnett, 988 F.2d at 1454)); Greenberg v. United\nStates, 46 F.3d 239, 243\u201344 (3d Cir. 1994) (holding in-house\ncontroller a \u201cresponsible person\u201d as a matter of law even though\nhe took instructions from the controlling stockholder and\n\u201cfeared for his job were he to independently issue a check for\n(Continued)\n 25\n\f 2.\n\n Having found Mrs. Johnson a \u201cresponsible person,\u201d we turn\n\nto the other necessary element of \u00a7 6672 liability, whether she\n\n\u201cwillfully\u201d failed to collect, account for, or remit payroll\n\ntaxes to the United States. 26 U.S.C. \u00a7 6672(a); Plett, 185\n\nF.3d at 219. This inquiry focuses on whether Mrs. Johnson had\n\n\u201cknowledge of nonpayment or reckless disregard of whether the\n\npayments were being made.\u201d Plett, 185 F.3d at 219 (quoting\n\nTurpin v. United States, 970 F.2d 1344, 1346 (4th Cir. 1992)).\n\n Mrs. Johnson contends that she did not act \u201cwillfully\u201d in\n\nfailing to remit Koba Institute\u2019s delinquent payroll taxes\n\nbecause she did not learn of the deficiency until the IRS\n\nnotified her in December 2004. This argument, however,\n\noverlooks that a taxpayer may act \u201cwillfully\u201d for purposes of \u00a7\n\n6672 even though she does not learn about unpaid taxes until\n\nafter the corporation has failed to pay them. \u201c[W]hen a\n\nresponsible person learns that withholding taxes have gone\n\nunpaid in past quarters for which he [or she] was responsible,\n\n\n\nthe [tax] delinquency\u201d); Kinnie, 994 F.2d at 284 (holding\ncorporate vice president and fifty-percent shareholder a\n\u201cresponsible person\u201d as a matter of law because he had check-\nsigning authority, hired an accountant to review the books, and\neventually took control of the business); Mazo v. United States,\n591 F.2d 1151, 1156 (5th Cir. 1979) (holding corporate\nstockholders, officers, and directors \u201cresponsible persons\u201d as a\nmatter of law even though others handled all day-to-day\noperations and prepared all corporate checks).\n\n\n 26\n\fhe [or she] has a duty to use all current and future\n\nunencumbered funds available to the corporation to pay back\n\nthose taxes.\u201d Erwin, 591 F.3d at 326. If the taxpayer\n\nthereafter knowingly permits payments of corporate funds to be\n\nmade to other creditors, a finding of willfulness is\n\nappropriate. See id. (\u201cEven assuming . . . that [the taxpayer]\n\ndid not act willfully prior to learning of the full extent of\n\nthe tax deficiencies . . ., his conduct after that point\n\nunquestionably evidences willfulness as a matter of law.\u201d\n\n(emphasis in original)).\n\n The record demonstrates that Koba Institute continued to\n\nmake payments to other creditors using unencumbered funds\n\nfollowing Mrs. Johnson\u2019s receipt of the IRS notice in December\n\n2004. The Government has produced numerous salary checks that\n\nthe corporation issued to Mrs. Johnson in 2005, which Mrs.\n\nJohnson readily cashed. Yet it is undisputed that Mrs. Johnson,\n\na \u201cresponsible person,\u201d knew that payroll taxes for numerous\n\nquarters from 2001 through 2004 remained unpaid. Mrs. Johnson\u2019s\n\nfailure to remedy the payroll tax deficiencies upon learning of\n\ntheir existence in December 2004, while directing corporate\n\npayments elsewhere, including to herself, constitutes \u201cwillful\u201d\n\nconduct under \u00a7 6672. This is particularly so given that, at\n\nMrs. Johnson\u2019s direction, Koba Institute paid other creditors\n\nduring this period. And, as noted earlier, during the 2001 to\n\n 27\n\f2004 delinquent tax periods, Mrs. Johnson received well in\n\nexcess of $500,000 in compensation and benefits from the\n\ncorporation while the payroll taxes went unpaid. Cf. Turpin,\n\n970 F.2d at 1347 (\u201cThe intentional preference of other creditors\n\nover the United States is sufficient to establish the element of\n\nwillfulness under section 6672(a).\u201d (internal quotation marks\n\nomitted)). Even viewing the evidence in the light most\n\nfavorable to Mrs. Johnson, we conclude that the record allows no\n\nconclusion other than that the failure to pay the payroll taxes\n\nwas willful on Mrs. Johnson\u2019s part.\n\n\n\n 3.\n\n In sum, we conclude that the Government has presented\n\nundisputed evidence sufficient to establish as a matter of law\n\nthat Mrs. Johnson was a \u201cresponsible person\u201d under \u00a7 6672 during\n\nthe relevant tax periods, and that she \u201cwillfully\u201d failed to see\n\nthat the withholding taxes were paid. No genuine dispute as to\n\nany material fact remains to be decided which would alter this\n\nconclusion. Accordingly, we hold that the district court did\n\nnot err in granting summary judgment against Mrs. Johnson\n\nindividually.\n\n\n\n\n 28\n\f C.\n\n Finally, we briefly address the claims raised by the\n\nJohnsons with respect to the district court\u2019s determination of\n\nthe amounts of their respective 100% penalty liabilities.\n\nRelying on the reports of their expert witness, Leo Bruette\n\n(\u201cBruette\u201d), the Johnsons assert that there is a genuine issue\n\nof material fact as to the amounts of that liability. They\n\nallege that Bruette identified \u201cnumerous errors, omissions[,]\n\nand inconsistencies\u201d in the tax assessments made against them,\n\nwhich therefore undermined the Government\u2019s proof of the amounts\n\nowed. (Br. 26.)\n\n The district court, however, found that the Johnsons\n\n\u201cneither relied upon Bruette\u2019s reports nor produced any evidence\n\nto create an issue of material fact\u201d that would preclude summary\n\njudgment. (J.A. 271.) Indeed, the Johnsons did not discuss or\n\ncite Bruette\u2019s reports in either of their opposition briefs to\n\nthe Government\u2019s summary judgment motions, in Mr. Johnson\u2019s\n\nmotion for partial summary judgment, or even as exhibits in\n\nopposing summary judgment. Further, the Johnsons do not contest\n\nthe district court\u2019s factual conclusion in this regard on\n\nappeal. The reports, therefore, could not\u2014and did not\u2014create a\n\ngenuine issue of material fact.\n\n\n\n\n 29\n\f We also find that Mrs. Johnson\u2019s concerns regarding double\n\nrecovery are without merit. 13 Mrs. Johnson asserts that entering\n\njudgment against her could result in double recovery for the\n\nGovernment because it may collect a significant portion of the\n\nunpaid trust fund taxes through an offer in compromise that Koba\n\nInstitute negotiated with the IRS. We note that Mr. Johnson\n\nraised a similar argument when the Government previously sought\n\njudgment against him for trust fund recovery penalties at Koba\n\nAssociates, which was clearly rejected by the district court.\n\nSee Johnson v. United States, 203 F. Supp. 2d 416, 425 (D. Md.\n\n2002), aff\u2019d, 50 F. App\u2019x 113 (4th Cir. 2002) (unpublished) (per\n\ncuriam), cert. denied, 540 U.S. (2003). In that case, Mr.\n\nJohnson argued that the Government \u201cmight attempt to obtain some\n\nsort of double recovery from both Koba [Associates] and [him] in\n\nexcess of the established amount of withholding taxes due.\u201d Id.\n\nAfter explaining that the Government may attempt to satisfy a\n\ndebt for unpaid payroll taxes against the business or the\n\ntaxpayer, the district court clarified that the IRS follows an\n\n\u201cestablished administrative policy\u201d of only collecting such tax\n\ndelinquencies once. Id.; see also id. at 425\u201326 (\u201c[T]he mere\n\nfact that the [Government] is attempting to secure a second\n\n 13\n This issue was raised, although obliquely, by Mrs.\nJohnson in her opposition to the Government\u2019s motion for summary\njudgment, and therefore can only affect her liability. Mr.\nJohnson did not raise a double recovery argument.\n\n\n 30\n\fsource for the payment of taxes owed does not necessarily mean\n\nthat it will attempt to exhaust both sources in excess of the\n\ndebt.\u201d). The court reasoned that \u201cany lingering concerns of\n\ndouble recovery\u201d could be allayed \u201cby a carefully drafted\n\njudgment order of the district court.\u201d Id. at 425. We agree\n\nwith the district court\u2019s reasoning in the prior case, and note\n\nthat similar precautions were taken in this case. The district\n\ncourt\u2019s judgment order specifically provides that the judgments\n\nagainst the Johnsons will \u201cbe reduced to the extent that the\n\nUnited States . . . has collected or will collect on those debts\n\npursuant to the offer in compromise it approved with Koba\n\nInstitute.\u201d (J.A. 274.)\n\n Mrs. Johnson further asserts that the Government might\n\nsucceed in obtaining a double recovery because certain voluntary\n\npayments made by Koba Institute were not properly credited. She\n\ndoes not, however, develop this argument or cite any evidence to\n\ncorroborate it. See Fed. R. App. P. 28(a)(9)(A) (requiring\n\nargument section of an appellant\u2019s opening brief to contain\n\n\u201cappellant\u2019s contentions and the reasons for them, with\n\ncitations to the authorities and parts of the record on which\n\nthe appellant relies\u201d). As a result, we consider her to have\n\nabandoned this claim. See Edwards, 178 F.3d at 241 n.6.\n\nMoreover, while Koba Institute did designate some payments,\n\nthose applied to the second quarter of 2001 (ending June 30,\n\n 31\n\f2001), which is not a quarter for which Mrs. Johnson was found\n\nliable.\n\n Accordingly, we conclude that the district court correctly\n\ndetermined the amounts of the Johnsons\u2019 respective tax\n\nliabilities under \u00a7 6672.\n\n\n\n IV.\n\n For all of the foregoing reasons, we affirm the judgment of\n\nthe district court.\n\n AFFIRMED\n\n\n\n\n 32\n\f"} -{"text": "\n79 B.R. 490 (1987)\nIn re Robert D. FAUTH, Susan K. Fauth, Debtors.\nBankruptcy No. 87-40276.\nUnited States Bankruptcy Court, D. Montana.\nNovember 6, 1987.\nJohn Forsythe, Billings, Mont., for debtors.\nVictoria L. Francis, Billings, Mont., for Prudential Ins. Co.\nDunlap and Caughlan, Butte, Mont., trustee.\nJohn F. O'Keefe, Sp. Asst. U.S. Atty., Helena, Mont., for SBA.\n\nORDER CONFIRMING CHAPTER 12 PLAN\nJOHN L. PETERSON, Bankruptcy Judge.\nHearing on the Debtors' Chapter 12 Plan, as amended by stipulation with Prudential Insurance Company, was held on October 14, 1987. All creditors have consented to the Plan except the U.S. Small Business Administration (SBA), which has filed with the Court a motion to include in the findings of fact matters relating to the liquidation value of the Debtors' assets, so that the Plan will comply with \u00a7 1225(a)(4) of the Code. While SBA does not seem to object to the Plan, evidently it feels that by liquidating the farm assets under Chapter 7, it will receive more by that process than it would from payments due it as an unsecured creditor from the Debtors' net disposable income.\nAs I understand SBA's position, it claims that about $40,000.00 worth of machinery which is essential to continued operation of the farm is unencumbered, and therefore, upon liquidation would be paid ratably among unsecured creditors. Under the Plan, the net disposable income proposed to be paid to unsecured creditors totals $15,021.00 over the 3 year Plan period. The Debtors' liquidation analysis shows, however, that upon liquidation there would be no assets remaining after payments to secured creditors to satisfy any portion of unsecured claims. Thus, the claim by SBA that it would receive more on liquidation under Chapter 7 than by confirmation of the Plan is without merit.\nEven if I were to assume that SBA's position on liquidation is correct, the Plan is nevertheless still confirmable. Under *491 \u00a7 1225(a)(4), known as the \"best interest of creditors\" test, see, In re Chapman, 51 B.R. 663, 668 (Bankr.D.C.1985), an unsecured creditor must receive value as of the effective date of the Plan which is not less than the amount which such creditor would receive if the estate were liquidated under Chapter 7. But the inquiry on confirmation does not end there if the unsecured creditor, such as SBA, objects that the Plan does not comply with 1225(a)(4). For if SBA is correct, and liquidation must proceed, then the clear intent of Congress to keep the family farmer in operation would be thwarted. Congress did not intend such result. Rather, Congress, in such cases, has provided an exclusive remedy to the objecting unsecured creditor in Subsection (b)(1) of \u00a7 1225. That subsection requires that the objecting unsecured creditor must be treated in either one of two ways, namely, (A) its allowed claim must be paid in full, or (B) all of the debtor's projected disposable income must be committed under the Plan to payments of claims. In this fashion, then, the family farm can continue in operation with the land, equipment and machinery which is essential to make it a viable enterprise. The Plan in this case does just that. It commits the Debtors' disposable income to the payment of unsecured claims, and thus the liquidation of the farm is avoided. Unless 1225(a)(4) and 1225(b)(1) are applied in this manner, \u00a7 1225(b)(1) could, in some instances, be superfluous. In sum, Congress has met the best interest of creditor's test by opting against liquidation of the farm in favor of continued operation with the attendant commitment that all of the disposable income will be used to pay claims. In most cases, \u00a7 1225(a)(4) is easily met since there would be no assets available upon liquidation. In those sparse cases where liquidation of necessary, but unencumbered, assets may result in more payment of unsecured claims, the relief to unsecured creditors is compromised by allowing the family farm to remain viable upon the conditions set forth in 1225(b)(1).\nIT IS ORDERED:\n(1) The Debtors' Plan as amended and modified by the stipulation with Prudential Insurance Company is confirmed.\n(2) The Debtors shall pay the the Trustee the sums provided for in the Plan at the times and amounts provided therein.\n(3) Compensation of the Trustee is fixed at 5% of all payments made to creditors during the term of the Plan.\n(4) Necessary and actual expenses of the Trustee shall be approved upon order of this Court.\n(5) The value of collateral securing debts due holders of secured claim is fixed at the values stated in the Amended Plan as modified by the stipulation with Prudential Insurance Company.\n(6) Upon completion of the Debtors' Plan according to its final terms, all judgments and U.C.C. filings shall be satisfied.\n(7) Payment to Debtors' attorney for fees and costs advanced is allowed in the sum of $2,654.70.\n(8) The life of this Plan is three years.\n(9) This Order is subject to any objections filed within 15 days by any party in interest.\n"} -{"text": " IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON\n\n\nTHE STATE OF WASHINGTON, ) No. 76242-7-1 consolidated with\n ) No. 76243-5\n Respondent, ) No. 76244-3 U)O.\n C-2\n ) No. 76245-1 c:a 7i\n \u20141 \u20144\n v. ) 111\n ) \u2014.4 0-r\n -II -11\n N.)\nABIGAIL C. BROCKWAY, MICHAEL E.) DIVISION ONE 1,0 -r11\u2014\n Tw\nLAPOINTE, PATRICK A. MAZZA,and ) Sa\u2022\n rna\n\nJACKIE W. MINCHEW, ) UNPUBLISHED OPINION 12:\n 7\n ) cltel\n -4ti\n Appellants. ) FILED: May 29,2018 tt3 C\n )\n MANN,A.C.J. \u2014Abigail Brockway, Michael LaPointe, Jackie Minchew, and\n\nPatrick Mazza appeal their misdemeanor convictions for second degree trespass\n\nafter they entered a railroad yard to protest coal and oil trains and raise\n\nawareness of climate change. The defendants argue on appeal that the trial\n\ncourt erred in failing to instruct the jury on their claim for a necessity defense and\n\nthat the court violated their constitutional rights to present a defense. Because\n\nthe trial court did not abuse its discretion in refusing to provide the requested\n\ninstruction and did not violate the defendants' rights to present a defense, we\n\naffirm.\n\fNo. 76242-7-1/2\n\n\n FACTS\n\n The Trespass\n\n Early on September 2, 2014, Brockway, LaPointe, Minchew, Mazza, and\n\nElizabeth Spoerri entered Burlington Northern Santa Fe's Delta Yard, a railroad\n\nyard in Everett, without permission. Inside, they erected a large metal tripod over\n\na grade crossing and chained themselves to it. Brockway sat at the top of the\n\ntripod, twenty feet off the ground, and the other four sat on the ground in chairs\n\nchained to the tripod's legs. They blocked the tracks to protest the coal and oil\n\ntrains and raise awareness for railroad workers' safety and climate change. They\n\nwere peaceful and civil. Eventually, the tripod was dismantled and they were\n\narrested.\n\n The State charged the five defendants with one count of obstructing or\n\ndelaying a train in violation of RCW 81.48.020 and one count of second degree\n\ntrespass in violation of RCW 9A.52.080, both misdemeanor offenses. The cases\n\nwere consolidated for trial in Snohomish County District Court.\n\n Before trial, the defendants requested the trial court instruct the jury on the\n\naffirmative defense of necessity and for leave to call experts in support of the\n\naffirmative defense. The defendant's motion recognized the burden for asserting\n\na necessity defense as recognized in Washington Pattern Jury Instruction\n\n(WP1C) 18.02:\n\n Necessity is a defense to a charge of (fill in crime) if\n\n (1)the defendant reasonably believed the commission of the crime\n was necessary to avoid or minimize a harm; and\n\n\n -2-\n\fNo. 76242-7-1/3\n\n\n (2) harm sought to be avoided was greater than the harm\n resulting from a violation of the law; and the\n\n (3)the threatened harm was not brought about by the\n defendant; and\n\n (4) no reasonable legal alternative existed.\n\n The defendant has the burden of proving this defense by a\n preponderance of the evidence. Preponderance of the evidence\n means that you must be persuaded, considering all the evidence in\n the case, that it is more probably true than not true. If you find that\n the defendant has established this defense, it will be your duty to\n return a verdict of not guilty[as to this charge].\n\n11 WASHINGTON PRACTICE: WASHINGTON PATTERN JURY INSTRUCTIONS: CRIMINAL\n\n18.02, at 292(4th ed. 2016)(WP1C).\n\n In a lengthy written decision, the trial court denied the defendants' motion\n\nconcluding that the necessity defense was not available as a matter of law. The\n\nnext day, however, the trial court reconsidered its decision and allowed the\n\ndefendants to put on expert testimony in support of the necessity defense.\n\n Trial Testimony Supporting a Necessity Defense\n\n The defendants offered evidence at trial supporting the defense. Mazza\n\ntestified first. He testified that he had worked on finding solutions to climate\n\nchange since 1998. He has written books and articles, worked on legislative\n\ncampaigns and bills to reduce carbon in the atmosphere, and created programs\n\nfor the adoption of alternative fuels. Despite his efforts, he believed that the\n\npolitical response to climate change was inadequate. In his opinion, the only way\n\nforward was to use civil disobedience to \"start reviving our democracy\" to create\n\n\"a political response equal to the challenge of climate change.\" His goal was to\n\n\n -3-\n\fNo. 76242-7-1/4\n\n\ninspire citizens to \"walk into their[C]ongressman's office and say,'We are going\n\nto stay here until we hear from\u2014we want to talk to you, Congressman, to find out\n\nwhat are you going to do about this.'\" He admitted that legal protests were also\n\neffective.\n\n Minchew testified that he had met with Congresswomen and\n\nCongressmen about climate change, but was disappointed by their responses.\n\nHe had run for elected office to advance his climate-centric positions, but was\n\nunsuccessful. He believed that his trespass was \"absolutely\" necessary.\n\n LaPointe testified that he had been politically active since he was 18 years\n\nold; he had organized factory workers, supported unions, and participated in\n\ndemonstrations for years. To fight climate change, he demonstrated, wrote\n\nletters, contacted elected officials, attended political meetings, and spoke with\n\nother citizens. He was currently running for political office on a climate-centric\n\ncampaign and believed that he could combat climate change if he was elected.\n\nHe also testified that the coffeehouse he owned served as a gathering space for\n\npeople to discuss issues, and organize themselves to combat climate change.\n\nLaPointe \"felt very convinced that[trespassing] was necessary.\"\n\n Spoerri described her history of activism with climate change. After\n\ngrowing concerned that too few people knew about climate change, she decided\n\nto engage in civil disobedience in order to \"let people know that this state is on\n\nthe brink of becoming a carbon corridor.\"\n\n Brockway testified that she had written letters to her elected\n\nrepresentatives, testified before the Department of Ecology, and collected\n\n -4-\n\fNo. 76242-7-1/5\n\n\nsignatures on petitions for various climate-action movements. She testified that\n\neven while she was at the top of the tripod in the Delta Yard she was \"petitioning\n\nthe government.... for a moratorium on fossil fuel projects.\" Her goal in\n\ntrespassing was \"to have a fossil fuel moratorium\u2014to have [Governor Inslee]\n\nreject all new fossil fuel structured projects\" and to protest oil and coal trains.\n\nWhile she believed trespassing was necessary, she also planned to continue\n\nattending public hearings and writing letters supporting her positions.\n\n Erik De Place, the policy director at the Sightline Institute, a research\n\ncenter based in Seattle, testified about the dangers of transporting fossil fuels by\n\nrail. He also testified that the \"traditional means in raising awareness about this\n\nIssue\" were \"not very effective\" and that the government's response was\n\n\"woefully lacking.\" DePlace admitted, however, that he had no scientific or\n\nstatistical evidence that illegal protests are more effective at getting the word out\n\nabout climate change than legal protests.\n\n Dr. Richard Gammon,a retired professor of chemistry and oceanography\n\nfrom the University of Washington, also testified. Dr. Gammon explained how\n\nfossil fuel emissions affect the climate. In his view, international climate\n\nagreements and action at the federal, state, and local levels are needed to\n\naddress climate change. He also gave examples of what people can do to raise\n\nawareness about climate change: institute a carbon tax, make homes energy\n\nefficient, buy carbon offsets, drive and fly less, and inform other people. He\n\nadmitted that he had \"no scientific data\" about whether illegal protests are more\n\neffective than legal ones in combating climate change.\n\n -5-\n\fNo. 76242-7-1/6\n\n\n Dr. Frank James, a physician and a health officer for San Juan County,\n\ntestified about the dangers oil trains pose to public health. He cited a scientific\n\nstudy that showed illegal action was more effective than legal action in changing\n\npolicy.\n\n District Court's Ruling\n\n At the conclusion of testimony, the defendants asked that the trial court\n\nInstruct the jury on the affirmative defense of necessity based on WPIC 18.02.\n\nThe trial court found that the defendants had demonstrated the first three\n\nelements of the necessity defense:(1)that they reasonably believed their actions\n\nwere necessary to avoid or minimize a harm,(2)that the harm they sought to\n\navoid was greater than the harm resulting from their trespass, and (3)that the\n\nthreatened harm was not brought on by the defendants; indeed, the trial court\n\nnoted that the \"defendants have been far from the problem and more about the\n\nsolution to the problems facing the planet.\" The trial court decided not to give the\n\nrequested instruction, however, because the defendants had failed to establish\n\nthe fourth element\u2014that there was no reasonable legal alternative to their\n\nactions:\n\n The evidence presented from the defendants fails to establish that\n there was no reasonable legal alternative to their acts of September\n 2 and no objective reasonable trier of fact could find that no\n reasonable legal alternative existed.\n\n Therefore the court finds that WPIC 18.02 will not be given to the\n jury. The necessity defense is not available to the defendants in\n this case.\n\n\n\n\n -6-\n\fNo. 76242-7-1/7\n\n\n The jury acquitted all of the defendants of obstructing a train, but it found\n\nthem all guilty of trespass.\n\n Brockway, LaPointe, Mazza, and Minchew appealed the district court's\n\nruling to the superior court. The superior court affirmed the ruling. It ruled that:\n\n 1. The trial court, in its role as evidentiary gatekeeper, did not\n abuse its discretion in declining to instruct the jury on the necessity\n defense via the defendants' proposed jury instruction WPIC 18.02.\n\n 2. This court agrees with the defendants' position that there is no\n statutory or legal bar in presenting such a defense to a criminal\n trespass charge.\n\n 3. However, the trial court was correct in evaluating the totality of\n the evidence, including the volume of expert testimony, and\n concluding that there was insufficient evidence of the fourth prong\n of WPIC 18.02 to allow the jury to consider the defense. The fourth\n prong of WPIC 18.02 requires a defendant to prove by a\n preponderance of the evidence that \"no reasonable legal alternative\n existed?\n\n Brockway, LaPointe, Mazza, and Minchew (collectively Brockway) moved\n\nfor discretionary review, which we granted.'\n\n ANALYSIS\n\n Necessity Defense\n\n Brockway, LaPointe, Mazza, and Minchew argue first that the trial court\n\nerred by refusing to instruct the jury on the affirmative defense of necessity. We\n\ndisagree.\n\n Each side in a case is entitled to instructions that support its theory of the\n\ncase, but only if evidence supports the theory. State v. Benn, 120 Wn.2d 631,\n\n\n\n I See Ruling on Discretionary Review of April 11, 2017.\n -7-\n\fNo. 76242-7-1/8\n\n\n654,845 P.2d 289. A trial court's refusal to give a jury instruction, if based on a\n\nfactual determination, is reviewed for abuse of discretion. State v. Read, 147\n\nWn.2d 238, 243, 53 P.3d 26(2002). A court abuses its discretion when its\n\ndecision is based on untenable grounds or for untenable reasons. The appellant\n\nbears the burden to demonstrate the trial court abused its discretion. State v.\n\nWilliams, 137 Wn. App. 736, 743, 154 P.3d 322(2007).\n\n Washington recognizes the common law defense of necessity. A\n\nnecessity defense is \"available when circumstances cause the accused to take\n\nunlawful action in order to avoid a greater injury.\" State v. Jeffrey, 77 Wn. APP.\n\n222, 224,889 P.2d 956(1995). The necessity defense is not available, however,\n\nwhere \"the compelling circumstances have been brought about by the accused\n\nor where a legal alternative is available to the accused.\" State v. Diana, 24 Wn.\n\nApp. 908, 912-13, 604 P.2d 1312(1979).\n\n To establish the necessity defense,\"the defendant must prove by a\n\npreponderance of the evidence that(1) he or she reasonably believed the\n\ncommission of the crime was necessary to avoid or minimize a harm,(2)the\n\nharm sought to be avoided was greater than the harm resulting from a violation\n\nof the law, and (3) no legal alternative existed.\" State v. Gallegos,73 Wn. App.\n\n644,651, 871 P.2d 621 (1994)(citing Diana, 24 Wn. App. at 916). The final\n\nelement at issue in this appeal is whether a legal alternative existed.\n\n1. Availability of Defense in Civil Disobedience Actions\n\n As a preliminary matter, the State argues that under State v. Aver, 109\n\nWn.2d 303, 745 P.2d 479(1987), the necessity defense is not available to a\n\n -8-\n\fNo. 76242-7-1/9\n\n\ndefendant engaged in civil disobedience, including attempts to block a train in\n\nprotest, as a matter of law. We disagree.\n\n In Aver, our Supreme Court held that RCW 81.48.020, a statute\n\nprohibiting a person from willfully obstructing a train lawfully operated,\" was not\n\nunconstitutionally vague and that the trial court did not abuse its discretion by\n\nrefusing to give the necessity defense. 109 Wn.2d at 308. In Aver, the\n\ndefendants obstructed a train that they believed was carrying nuclear warheads\n\nto a naval submarine base. 109 Wn.2d at 305. On appeal, they argued that\n\nRCW 81.48.020 was unconstitutionally vague. They also argued that the trial\n\ncourt abused its discretion by refusing to give the necessity defense. Aver, 109\n\nWn.2d at 311-12. The Supreme Court upheld RCW 81.48.020 and found that\n\nthe \"necessity defense[was] not supported by the record in this case.\" Aver, 109\n\nWn.2d at 311.\n\n Aver does not support the State's position. It does not stand for the\n\nproposition that a defendant cannot request the necessity defense when blocking\n\na train or that, as a matter of law, the necessity defense is unavailable to\n\ndefendants who were engaged in civil disobedience. Aver 109 Wn.2d at 311-12.\n\nThe defense may be available where the evidence supports all necessary\n\nelements.\n\n2. Sufficiency of Evidence to Support Instruction\n\n In this case, however, we agree with the trial court that the defendants\n\nfailed to demonstrate the final element of the necessity defense\u2014that no\n\nreasonable legal alternatives existed. The defendants' own testimony\n\n -9-\n\fNo. 76242-7-1/10\n\n\nacknowledged multiple legal alternatives available to support their efforts to draw\n\nattention to the global climate change and the impacts of rail shipping of fossil\n\nfuels.2 Indeed, defendant's counsel conceded during argument that\"one can go\n\nad infinitum on reasonable alternatives.\" The testimony offered by defendants\n\nrecognized that there is a legal alternative to the illegal action: using the\n\ndemocratic process to effect change. Because the defendants failed to offer\n\nsufficient evidence of no reasonable legal alternative, the trial court did not abuse\n\nits discretion in refusing to provide the instruction. State v. Werner, 170 Wn.2d\n\n333, 336-37 241 P.3d 410(2010).\n\n The defendants argue that the trial court adopted an unduly limited\n\nconstruction of the phrase \"reasonable legal alternative\" and that \"reasonable\"\n\nmust mean more than available, but actually effective. The defendants argue\n\nthat State v. Parker's interpretation of the phrase \"no reasonable alternative\"\n\nsupports their position. 127 Wn. App. 352, 355, 110 P.3d 1152(2005). In\n\nParker, Division Two of this court affirmed the trial court's refusal to give the\n\nnecessity defense in a trial for the unlawful possession of a firearm where the\n\ndefendant failed \"to show 'that he had actually tried the alternative or had no time\n\nto try it, or that a history of futile attempts revealed the illusionary benefits of the\n\nalternative.'\" Parker, 127 Wn. App. at 355 (quoting U.S. v. Hamer,802 F.2d 115,\n\n118 (1986)).\n\n\n\n\n 2 See,Lg., Clerk's Papers(CP)at 555-56(Brockway testifying that her goal in\ntrespassing was to have Governor Inslee impose a fossil fuel moratorium and reject all new fossil\nfuel projects).\n -10-\n\fNo. 76242-7-1/11\n\n\n Even if this statement from Parker is correct, it does not support the\n\ndefendants' argument. Here, like Parker, while the defendants were frustrated\n\nwith the political response to climate change, they all believed that the ultimate\n\nsolution was political and were intent on continuing political activities. Here, after\n\nlistening to the testimony, the trial court found that \"[t]he evidence presented from\n\nthe defendants fails to establish that there was no reasonable legal alternative to\n\ntheir acts of September 2 and no objective reasonable trier of fact could find that\n\nno reasonable legal alternative existed.\"\n\n In conclusion, we hold that while the necessity defense may be available\n\nIn actions involving civil disobedience, because the defendants here failed to\n\ndemonstrate that there were no reasonable legal means available other than an\n\nillegal trespass, the court did not abuse its discretion by refusing to instruct the\n\njury on the affirmative defense of necessity.\n\n Right to Present a Defense\n\n The defendants next argue that their right to present a defense was\n\nviolated because the trial judge allowed the defendants to present evidence of\n\nthe necessity defense but then refused to instruct the jury on the defense. We\n\ndisagree.\n\n The right to a fair trial includes the right to present a defense. The Sixth\n\nand Fourteenth Amendments of the United States Constitution, and article I,\n\nsection 21 of the Washington Constitution, guarantee the right to trial by jury and\n\nto defend against the State's allegations. These guarantees provide criminal\n\ndefendants a meaningful opportunity to present a complete defense, a\n\n -11-\n\fNo. 76242-7-1/12\n\n\nfundamental element of due process. Chambers v. Mississippi, 410 U.S. 284,\n\n294,93 S. Ct. 1038, 35 L. Ed. 2d 297(1973); State v. Burn,87 Wn.2d 175, 181,\n\n550 P.2d 507(1976). \"We review a claim of a denial of Sixth Amendment rights\n\nde novo.\" State v. Jones, 168 Wn.2d 713, 719, 230 P.3d 576(2010).\n\n The trial court did not deny Brockway her right to present a defense. A\n\ndefendant is only entitled to an instruction on the defendant's theory of the case if\n\nthere is evidence to support that theory. Werner, 170 Wn.2d at 336-37.\n\nAlthough the defendants presented evidence supporting the first three elements\n\nof the necessity defense, they failed to present sufficient evidence to\n\ndemonstrate that there was no reasonable legal alternative to accomplish their\n\ngoal. Where an affirmative defense, including necessity, consists of several\n\nelements and the testimony supporting one element of the defense is lacking,\n\nthere is no right to present the defense. U.S. v. Bailey, 444 U.S. 394, 415-16,\n\n100 S. Ct. 624,62 L. Ed. 2d 575(1980). Accordingly, refusing to give the\n\ndefense did not violate Brockway's right to present a defense.\n\n We affirm.\n\n\n\n\n S ate 4se.ir.\n\n\n\nWE CONCUR:\n\n\n eaxiI. 3ecke IR4.\n -12-\n\f"} -{"text": "907 F.2d 150\nUnpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Abdul AL-BARI, Plaintiff-Appellant,v.Steven WINN and Jimmy Creecy, Defendants-Appellees.\nNo. 89-5150.\nUnited States Court of Appeals, Sixth Circuit.\nJuly 9, 1990.\n\nBefore KRUPANSKY and ALAN E. NORRIS, Circuit Judges, and LIVELY, Senior Circuit Judge.\nPER CURIAM.\n\n\n1\nPlaintiff appeals from an order of the district court dismissing his complaint brought under 42 U.S.C. Sec. 1983. In his complaint, plaintiff asserted that the defendants, assistant attorneys general for the state of Tennessee, submitted falsified documents to a federal district court in the course of their defense of state officials in another suit brought by plaintiff.\n\n\n2\nUnder circumstances involving claims like those asserted in the other litigation, government attorneys who undertake the defense of a civil suit enjoy the same absolute immunity as that enjoyed by government prosecutors. See Murphy v. Morris, 849 F.2d 1101 (8th Cir.1988); Barrett v. United States, 798 F.2d 565 (2d Cir.1986).\n\n\n3\nAccordingly, the order of the district court is affirmed.\n\n"} -{"text": "\n338 Mich. 261 (1953)\n60 N.W.2d 915\nMORRISH\nv.\nMORRISH.\nDocket No. 63, Calendar No. 45,876.\nSupreme Court of Michigan.\nDecided November 27, 1953.\nGuy W. Selby (Fred A. Sauer, of counsel), for plaintiff.\nFred S. Flick, for defendant.\nBUSHNELL, J.\nPlaintiff Catherine P. Morrish and defendant Ray S. Morrish were married on July 20, 1944. They lived happily together until some time in 1950, when they separated. The defendant and cross plaintiff, a surgeon, claims that on May 4, 1950, when he came home late that night, after being at the hospital, he found his wife with another man in a compromising situation. The party involved, who testified as a witness for the plaintiff, absolutely denied the allegations and said that the doctor was present at all times when he was in the home of the parties. The wife also denied this charge. The defendant further claims that his wife told him after this incident that she had something to say to him, and that she had \"wronged him.\" This, the wife categorically denied. In any event, shortly after *263 the alleged incident occurred the wife, pursuant to previously made plans, left for California to visit her mother. She returned home on July 13, 1950, with her mother, and claims that when she arrived she was again accused by the defendant of infidelity. She returned to California on July 22d. During her absence her husband wrote her many endearing letters.\nIn August of 1950, Mrs. Morrish began a divorce action, which was later dismissed. She returned home about September 16, 1950, because her husband had been stricken with a cerebral thrombosis and was in a hospital. Mrs. Morrish visited him there a few times, but, according to the doctor, was not kind to him. On the contrary, she accused him of ill treatment. The relations between the parties failed to improve and they again separated on December 28, 1950, after which this suit was instituted for divorce and her husband filed a cross bill.\nThe defendant was 64 years old at the time of the trial, and since his illness has been unable to practice his profession. The bulk of his property was accumulated prior to his marriage. Plaintiff was 45 years old at the time of trial. She had $600 in bonds when she married. In 1949 she had a major operation and has since been unable to do any continuous work.\nA decree was entered in favor of the wife, the husband being required to pay the sum of $20,000 in cash. He was given all the real estate and each is to choose such personal property as she or he might individually desire. The sum of $1 was awarded as permanent alimony, and $300 was allowed for the wife's attorney's fee.\nDefendant appeals from this decree on the ground that it is not in accordance with the weight of the evidence, and that the division of property is unjust and inequitable.\n*264 The finding that the wife had established grounds for a divorce is in conformity with the rule expressed in Brookhouse v. Brookhouse, 286 Mich 151; and Whitman v. Whitman, 286 Mich 458.\nThere is no rigid rule for division of property in divorce actions. The security of a living for the wife is a major consideration. Hallett v. Hallett, 279 Mich 246. The facts are distinguishable from those in Hall v. Hall, 307 Mich 502. and Maynard v. Maynard, 329 Mich 247. Although plaintiff bore no children to defendant, she gave him happy companionship for about 6 years. In the Maynard and Hall Cases the wife was the wrongdoer and contributed very little to the marriage. While the property here in question was accumulated prior to the marriage, there is no showing that the wife married defendant for his money. In fact, there is every indication that the wife would have continued living with her husband if he had been more reasonable and had not elected to accuse her of infidelity.\nIt is obvious that the plaintiff is unable to support herself by any remunerative employment, and we agree with the trial judge's view that she cannot earn her own living. On the other hand, the husband is receiving disability income. He has the home and an adjacent lot appraised at $25,000, which the trial judge thought was too high: some land in Flint township; some vacant lots; land in Canada worth $2,500; 400 shares of General Motors stock; and 300 shares of Sears Roebuck stock; life insurance totaling $25,000; and 2 automobiles.\nThe decree is affirmed, with costs to appellee.\nDETHMERS, C.J., and ADAMS, BUTZEL, CARR, SHARPE, BOYLES, and REID, JJ., concurred.\n"} -{"text": "227 F.3d 1150 (9th Cir. 2000)\nRANDALL E. PACE, JR.; HENRY TACUB; WADE HANSON; ROSALINO BALLESTEROS, on behalf of themselves and former and current employees of Honolulu Disposal Service, Inc. and/or Alii Refuse Corporation, Plaintiffs-Appellants,v.HONOLULU DISPOSAL SERVICE, INC.; ALII REFUSE CORPORATION; CLYDE KANESHIRO; LABORERS INTERNATIONAL UNION OF NORTH AMERICA, Local 368, AFL-CIO; The Members of the Executive Board of the Laborers International Union of North America, Local 368, AFL-CIO being Benjamin Saguibo, Norma Jimeno, Mel Cremer, Norman K. Janicki, Jr., Oliver Kupau III, Clayton Saguibo, Herbert Loo, Sally Forges, Rick Pagatpatan, Bernaldo Pascua and Larry Sadaba; HAWAII LABORERS' TRUST FUNDS, (Hawaii Laborers' Health and Welfare Trust Fund and its trustees Harry Ushijima, Greg Muth, Albert Hamamoto, John Murchison, Mel Cremer, Elmo Sinclair, Benjamin Saguibo, Daniel Nakamura, Stephanie Mahelona, John Roxburgh Jr., and Larry Cadiz; Hawaii Laborers' Pension Trust Fund and its trustees Stanley Wada, Daniel Nakamura, Ernie Bello, Randall Ching, Wilton Ching, Anacleto Alcantra, Norman Janicki Jr., Benjamin Saguibo, Mel Cremer, Norman Janicki Sr., Larry Cadiz; Marilyn Tanaka, Larry Sadaba, John Murchison; E.S. Akin and Cynthia Tolentino; Hawaii Laborers' Training TrustFund and its trustees Anacleto Alcantra, Edwin Huligee, Richard Honjiyo, Ryan Y. Wada, Gilbert Ho; Benjamin Saguibo, Alvis McCann, Melvin Kalama, Ryan Tohara, Scott Higa, Oliver H. Kupau, III; John Roxburgh, Jr.; and Cynthia Tolentino; Hawaii Laborers' Vacation & Holiday Trust Fund and its trustees Tamateru Kodama, Leonard Song, Vincent K. Nihipali Sr., Walter Arakaki, Salvador Ambrocio, Benjamin Saguibo, Ismael Solis, Clayton Saguibo, and John Roxburgh, Jr., Hawaii Laborers' Annuity Trust Fund and its trustees Walter Arakaki, Vincent K. Nihipali Sr., Richard Honjiyo, Tamateru Kodama, Leonard Song, Melvin Kalama, Salvador Ambrocio, Clayton Saguibo, Rick Pagatpatan and Ismael Solis dba Hawaii Laborers' Pension Trust Fund dba Hawaii Laborers Training Trust Fund dba Hawaii Laborers' Vacation & Holiday Trust Fund dba Hawaii Laborers' Annuity Trust Fund); AMERICAN BENEFIT PLAN ADMINISTRATORS INC.; WAYNE CHUN, Defendants-Appellees.\nNo. 99-15796\nU.S. Court of Appeals for the Ninth Circuit\nArgued and Submitted August 3, 2000Filed September 25, 2000\n\n[Copyrighted Material Omitted]\nJames J. Bickerton and William Saunders, Bickerton Saunders Dang & Bouslog, Honolulu, Hawaii, and Jerrold Y. Chun, Chun Chipchase Takayama Nagatani, Honolulu, Hawaii, for the appellants.\nWesley M. Fujimoto and Paul A. Schraff, Dwyer Imanaka Schraff Kudo Meyer & Fujimoto, Honolulu, Hawaii, for appellees Honolulu Disposal Service, Inc., Alii Refuse Corporation, and Clyde Kaneshiro.\nColleen Hanabusa, Colleen Hanabusa, A Law Corporation, Honolulu, Hawaii, for appellee The Laborers International Union of North America, Local 368, AFL-CIO.\nAlfredo G. Evangelista, Evangelista & Quiban, Honolulu, Hawaii, for appellees Hawaii Laborers' Trust Funds, American Benefit Plan Administrators, Inc., and Wayne Chun.\nAppeal from the United States District Court for the District of Hawaii. Helen Gillmor, District Judge, Presiding. D.C. No. CV-97-00335-HG\nBefore: Harry Pregerson, Michael Daly Hawkins, and M. Margaret McKeown, Circuit Judges.\nMcKEOWN, Circuit Judge:\n\n\n1\nWe must resolve a conflict between the clear language of a series of collective bargaining agreements (\"CBAs\") and decide whether evidence of an oral agreement is admissible to supplement the terms of unambiguous CBAs. The heart of the case is a contractual rather than representational dispute, and the district court had jurisdiction to decide it. Because we conclude that the parol evidence rule bars admission of an oral agreement that not only contradicts the terms of an unambiguous CBA but would essentially eviscerate its plain language, we reverse.\n\nBACKGROUND and PROCEEDINGS\n\n2\nAppellants, four former and current employees who have worked as roll-off drivers (the \"Drivers\") for Honolulu Disposal Service, Inc. (\"HDS\"), claim that they are entitled to wages and benefits under a series of written CBAs from 19791996 negotiated by HDS and The Laborers International Union of North America, Local 368, AFL-CIO (the \"Union\").\n\n\n3\nAppellees, HDS, the Union, and several union trust funds (the \"Trust Funds\"),1 argue that the Drivers are not covered by the CBAs because HDS and the Union orally agreed to limit the scope of the bargaining unit to a couple of employees not including these Drivers. Invoking the doctrine of primary jurisdiction to challenge both the district court's and our jurisdiction, appellees contend that this case boils down to a representational dispute over who is in the bargaining unit--or, to put it another way, whom the Union represents--that must be decided in the first instance by the National Labor Relations Board (\"NLRB\"). They alternatively argue that even if there is federal court jurisdiction, the oral agreement between HDS and the Union is admissible and enforceable and precludes the Drivers from recovering under the CBAs. The Drivers counter that this is a contractual rather than representational dispute and argue that the oral agreement, the very existence of which they question, is not admissible.\n\n\n4\nThe genesis of this case dates back to 1978, when Liborio Cadiz, then a Union business agent, approached Clyde Kaneshiro, then vice president of HDS, after seeing him drive a refuse truck onto a construction site. After Cadiz told Kaneshiro that HDS had to sign up with the Union to haul refuse from the site, they agreed to establish a collective bargaining relationship allegedly on the oral understanding that the bargaining unit would be limited to a \"couple \" of HDS drivers. Kaneshiro then signed a written, Union-prepared CBA. This was the first of six CBAs at issue here.\n\n\n5\nThis CBA, effective from 1979-81, is titled \"Master Agreement By and Between\" HDS and the Union. Section 1 contains a coverage provision stating, in relevant part:\n\n\n6\nThe Company recognizes the Union as the exclusive collective bargaining representative of its employees employed in the State of Hawaii in the job classifications set forth in Exhibit \"A,\" excluding clerical employees, office employees, watchmen, guards, part time employees who work less than thirty hours per week, and all supervisors as defined in the National Labor Relations Act, as amended.\n\n\n7\nExhibit A lists seven classifications of workers, including \"Roll-Off Driver.\"\n\n\n8\nThree sections of the CBA covering health/welfare, pension, and annuity trust funds, state, respectively, that \"[t]he Company shall participate in the\" fund and \"shall contribute . . . for each hour worked by each employee covered by this Agreement, the following amounts\" as specified in the CBA. The CBA also contains a clause prohibiting oral modification (\"no-oral-modification clause\"), titled \"Modification of Agreement,\" which provides that \"[t]his Agreement shall not be amended, modified, changed, altered or waived except by written document executed by mutual agreement between the parties hereto,\" and an integration clause,2 titled \"Document Contains Entire Statement,\" which asserts, \"[t]his document contains the entire Agreement of the parties and neither party has made any representations to the other which are not contained herein.\"\n\n\n9\nWhen the first CBA expired, HDS and the Union enteredinto a new CBA, effective from 1982-85, similar in relevant respects to the first. This second CBA also has no-oralmodification and integration clauses. The \"Employees Covered\" subsection of the section devoted to coverage is similar to the coverage provision in the first CBA; it states that \"employees covered . . . are all regular full time employees of the Contractor employed in the State of Hawaii in the classifications set forth in the classification and hourly wage schedule which is attached hereto as Exhibit `A,' . . . except for office clerical employees . . . and supervisors . . . . \" Exhibit A, as in the first CBA, lists the same seven classifications, including roll-off drivers. The second CBA also includes similar health/welfare, pension, and annuity trust fund provisions and adds a training fund provision requiring the contractor to participate in and contribute to the fund on the same basis as the other funds, that is, \"for each hour worked by each employee covered by this Agreement.\"\n\n\n10\nThe next four CBAs, spanning the years 1987-89, 1990-92, 1993-96, and 1996-99,3 contain coverage provisions, no-oralmodification clauses, integration clauses, and trust fund provisions similar to those in the second CBA, and in each case Exhibit A lists roll-off drivers as a covered classification.4\n\n\n11\nHDS and the Union contend that they applied the oral agreement reached in 1978 to each successive CBA, such that the bargaining unit remained limited to two or three designated people who knew they were in the unit.5 Although each of the six CBAs was prepared by the Union, none reflects this oral agreement. Indeed, HDS and the Union have submitted affidavits conceding that the bargaining unit language in the six CBAs \"does not accurately reflect the oral agreement\" to restrict the scope of the unit.\n\n\n12\nEach of the Drivers worked as a roll-off driver at HDS for some period of time between 1979 and 1996, and each claims to have performed the same work as the few HDS drivers who were in the Union. The Drivers--who are covered on the face of the CBAs, given the listing of roll-off drivers in Exhibit A, but are not covered under the alleged oral agreement-brought this class-action suit to recover wages and benefits claimed under the CBAs.\n\n\n13\nHDS, joined by the Union and the Trust Funds, moved to dismiss the suit, arguing that the district court lacked jurisdiction because plaintiffs' claims were representational claims within the primary jurisdiction of the NLRB. The district court denied the motion, holding that it had jurisdiction to hear the claims \"to the extent that there is a contractual issue.\" The court relied on Cappa v. Wiseman, 659 F.2d 957 (9th Cir. 1981), in finding that it had jurisdiction to \"[d]etermin[e] the validity of the CBAs and any side agreements\" thereto.\n\n\n14\nFaced with the court's decision finding jurisdiction on contractual issues, HDS, the Union, and the Trust Funds moved for summary judgment, contending that HDS and the Union had an oral agreement limiting the bargaining unit--and thus the coverage of the CBAs--to only a couple of employees not including the Drivers. The Drivers filed a motion for partial summary judgment on the issue of liability, contending that the CBAs, on their face, covered roll-off drivers and arguing that the alleged oral agreement was both inadmissible and illegal. The court granted summary judgment in favor of HDS, the Union and the Trust Funds and then denied as moot the Drivers' motions for summary judgment and for class certification.\n\n\n15\nFinding Cappa to control once again, the court held that the parol evidence rule did not preclude extrinsic evidence--here the oral agreement--given that the CBAs \"appear to have been a CBA form adapted to fit the agreement between the Union and HDS.\" The court then found that summary judgment was appropriate because the Drivers had not raised any material issues of fact regarding the oral agreement. The court rejected the Drivers' claim that the oral agreement was illegal under 302(c)(5)(B) of the Labor Management Relations Act (\"LMRA\"), 29 U.S.C. 186(c)(5)(B), which requires that provisions concerning trust fund payments be in writing, as well as their argument that the no-oral-modification clauses nullified the oral agreement. Finally, referencing its prior ruling on the motions to dismiss, the court noted that \"if the oral agreement between HDS and the Union were not valid, the Court would not have jurisdiction to hear this case.\"\n\n\n16\nThe Drivers appealed the district court's summary judgment ruling. Appellees now press their jurisdictional argument once again.6\n\nDISCUSSION\n\n17\nWe review jurisdictional challenges invoking the primary jurisdiction doctrine de novo. See, e.g., International Bhd. of Teamsters v. American Delivery Serv. Co., 50 F.3d 770, 773 (9th Cir. 1995). We also review a grant of summary judgment de novo. See Margolis v. Ryan, 140 F.3d 850, 852 (9th Cir. 1998).\n\nA. Standing and Jurisdiction\n\n18\nAppellees challenge the Drivers' standing to bring their claims, arguing that 301 of the LMRA limits standing to members of the bargaining unit. We disagree. The Drivers have standing to assert claims for wages and benefits under the CBAs. As in Cappa, the Drivers face an alleged oral agreement that excludes them from the bargaining unit. Cappa was permitted to sue under 301 for wages claimed under a CBA even though he lost on the merits when we ultimately concluded that the oral agreement was valid and that Cappawas therefore not part of the bargaining unit. See Cappa, 659 F.2d at 959 (\"Appellant could bring this section 301 action in district court since he was seeking to recover wages to which he claimed he was entitled under the terms of the collective bargaining agreement.\"). The Drivers also have standing to assert claims for benefits; such claims constitute uniquely personal rights, similar to wages, conferring standing to sue under 301. See Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 562 (1976) (\"S 301 suits encompass those seeking to vindicate `uniquely personal' rights of employees such as wages, hours, overtime pay, and wrongful discharge\"); Gutierrez v. United Foods, Inc., 11 F.3d 556, 560 (5th Cir. 1994) (distinguishing between \"uniquely personal rights,\" which are \"amenable to individual enforcement, \" and \"a collective right of all union members,\" which is \"reserved to the union to enforce\").\n\n\n19\nWe also disagree with appellees' contention that the Drivers' claims raise representational issues that must be decided in the first instance by the NLRB under the doctrine of primary jurisdiction. This case presents contractual issues that the federal courts have jurisdiction to entertain under 301 of the LMRA.\n\n\n20\nBefore addressing the merits of the jurisdictional issue, we turn first to the parties' opposing views on the procedural posture of this question. The Drivers' argument that appellees had to raise the primary jurisdiction issue in a cross-appeal misses the mark. This doctrine is unlike garden-variety defenses such as in personam jurisdiction, for it implicates the \"strong policy of judicial deference to\" the NLRB on representation issues. Local No. 3-193 Int'l Woodworkers v. Ketchikan Pulp Co., 611 F.2d 1295, 1299 (9th Cir. 1980). Its importance is such that in Cappa, 659 F.2d at 958-59, we raised the primary jurisdiction doctrine sua sponte.\n\n\n21\nWe also reject appellees' claim that the Drivers' failure to attack the district court's jurisdictional ruling precludes them from prevailing. Appellees argue, in essence, and in the absence of supporting authority, that they should prevail regardless of the validity of the oral agreements. Their contention is that they should prevail even if this agreement is invalid because the court asserted only limited jurisdiction when it stated in its summary judgment order that \"if the oral agreement between HDS and the Union were not valid, the Court would not have jurisdiction to hear this case.\"\n\n\n22\nWe note that the district court's characterization, on summary judgment, of its earlier ruling on the motions to dismiss appears somewhat narrower than its actual ruling that it had jurisdiction to hear the claims \"to the extent that there is acontractual issue.\" More importantly, we reject appellees' argument given our de novo review of subject matter jurisdiction determinations. We also note that the court did assume jurisdiction over this case with regard to contractual issues and that its comment about limited jurisdiction in the summary judgment order did not nullify the jurisdiction which the court properly exercised.\n\n\n23\n\"The doctrine of primary jurisdiction is a recognition of congressional intent to have matters of national labor policy decided in the first instance by the National Labor Relations Board.\" United Ass'n of Journeymen v. Valley Engineers, 975 F.2d 611, 613 (9th Cir. 1992) (quoting Glaziers & Glassworkers Local Union No. 767 v. Custom Auto Glass Distribs., 689 F.2d 1339, 1342 (9th Cir. 1982)). Issues falling within the NLRB's primary jurisdiction include designation of an exclusive bargaining agent and identification of an appropriate collective bargaining unit under 9 of the LMRA. See Ketchikan Pulp, 611 F.2d at 1298. Such \"representational issues\" are \"more appropriately resolved by the NLRB\" than by the courts, Hotel Employees, Restaurant Employees Union, Local 2 v. Marriott Corp., 961 F.2d 1464, 1468 (9th Cir. 1992), given the agency's \"superior expertise.\" Valley Engineers, 975 F.2d at 613.\n\n\n24\nWe have characterized 301,7 which gives district courts jurisdiction over contractual disputes, as an \"exception to the primary jurisdiction doctrine . . . designed to afford the courts jurisdiction to resolve labor disputes that focused on the interpretation of the terms of the collective bargaining agreement.\" Valley Engineers, 975 F.2d at 614 (quoting Custom Auto Glass Distribs., 689 F.2d at 1342-43). Although 301 confers concurrent jurisdiction upon the NLRB and federal courts, we have recognized that district courts \"must tread lightly\" in areas of the NLRB's primary jurisdiction and \"must continue to defer when, on close examination, section 301 cases fall within the NLRB's primary jurisdiction.\" Id. at 613-14. Indeed, we have warned that \"end run[s] around Section 9 of the [National Labor Relations] Act .. . under the guise of contract interpretation . . . cannot be countenanced,\" Ketchikan Pulp, 611 F.2d at 1299-1300, and we have drawn the jurisdictional line by asking \"whether the major issues to be decided . . . can be characterized as primarily representational or primarily contractual.\" Valley Engineers, 975 F.2d at 614 (internal quotations and citations omitted).\n\n\n25\nThis case falls on the \"primarily contractual\" side of the line. \"[S]tripped to essentials,\" Valley Engineers, 975 F.2d at 614, it turns on a question of contract interpretation, and thus is properly in federal court rather than before the NLRB. We must decide whether the plain language of a series of CBAs applies, or whether the proffered oral agreement trumps the written contract. This is a classic contractual dispute, given \"representational\" overtones only by the fact that appellees raised in defense an oral agreement that is inconsistent with the written contracts--an oral agreement that purports to limitthe bargaining unit.\n\n\n26\nIn addition, \"the doctrine of primary jurisdiction does not apply in determining a union's past representational status.\"8 United Bhd. of Carpenters v. Endicott Enters. Inc., 806 F.2d 918, 921 (9th Cir. 1986), overruled prospectively on other grounds by Mesa Verde Constr. Co. v. Northern Cal. Dist. Council of Laborers, 861 F.2d 1124 (9th Cir. 1988) (en banc), and 895 F.2d 516 (9th Cir. 1990). Here, the Drivers seek wages and benefits under CBAs that were operative from 1979 to 1996; they do not seek any determination with regard to what now constitutes an appropriate bargaining unit or with regard to whether any union now represents any HDS employee. Accordingly, we hold that the district court had jurisdiction to hear this case.\n\nB. Parol Evidence Rule\n\n27\nAppellees concede that the CBAs, on their face, cover roll-off drivers but argue that evidence of the oral agreement restricting the scope of the bargaining unit is admissible and overrides the written contracts. We disagree. Faced with clear, unambiguous written agreements containing integration clauses and no-oral-modification clauses, and in the absence of language acknowledging any supplemental agreements, we hold that the parol evidence rule bars introduction of evidence of a proffered oral agreement that directly contradicts a key term of the written contracts.\n\n\n28\nAlthough the parol evidence rule is not applied as strictly in the context of collective bargaining agreements,9 it still operates to bar extrinsic evidence of an agreement inconsistent with an unambiguous writing.10 See Pierce County Hotel Employees & Restaurant Employees Health Trust v. Elks Lodge, 827 F.2d 1324, 1327 (9th Cir. 1998). In Pierce County, an employer sought to introduce several types of extrinsic evidence--including oral \"side agreement[s]\" with a union \"exempting temporary workers from contributions\" to trust funds--to defend against a suit brought by the trust funds to recover unpaid contributions accruing from 1980 to 1985 under a series of CBAs signed in 1974, 1977, 1980, and 1983. Id. One of the oral agreements, as evidenced by a letter of confirmation in 1979, was made prior to the 1980 and 1983 CBAs but after the 1974 and 1977 CBAs; the other was made in 1983, when the parties, negotiating the 1983 CBA, again orally agreed to exempt temporary workers from the trust fund contribution provisions.11See id. at 1326. We held that \"[e]xtrinsic evidence is inadmissible to contradict a clear contract term, but if a term is ambiguous, its interpretation depends on the parties' intent . . . in light of earlier negotiations, later conduct, related agreements, and industrywide custom.\" Id. at 1327 (citations omitted). Applying this rule to the circumstances in Pierce County, we affirmed the exclusion of extrinsic evidence:\n\n\n29\nThe Lodge has attempted to create an ambiguity where none is present. Articles XX and XXI require contributions for any person performing work under the agreement, meaning any employee in the bar gaining unit as defined in Article I.12 The class of bargaining unit employees is not limited to union members. The contribution provisions can reason ably be read but one way: the Lodge must make con tributions for any covered employee, whether or not a union member. Since the agreements unambigu ously require contributions for temporary employees, the court correctly disregarded extrinsic evidence of the parties' intent.\n\n\n30\nId. (footnote added).\n\n\n31\nAlthough Pierce differs from this case in that the oral agreements there were made on two occasions after the inception of the bargaining relationship between the employer and the union, see id. at 1326, it demonstrates that evidence of prior or contemporaneous oral agreements is inadmissible to contradict an unambiguous written contract.13 Neither the 1979 nor the 1983 oral agreement could be used to interpret the written CBAs because they directly contradicted clear contract terms. In rejecting the employer's alternative claim that the agreements were permissible modifications to the CBAs, we reiterated this point when we specified that the 1979 letter showing the parties' prior oral agreement was \"inadmissible to contradict the unambiguous terms of the 1980 contract.\" Id. at 1328.\n\n\n32\nHere, as in Pierce County, the CBAs are unambiguous, extending coverage to \"all regular full time employees of the Contractor employed . . . in the classifications set forth in . . . Exhibit `A,' \" and the proffered oral agreement contrasts starkly with the written language. The oral agreement to restrict the bargaining unit to a handful of drivers is unquestionably inconsistent with the straightforward and broad coverage provisions of the CBAs. The gap between \"all\" employees listed in Exhibit A and a \"couple\" of drivers could hardly be more dramatic.\n\n\n33\nFaced not only with this direct contradiction on a crucial term of coverage, but also with provisions in the CBAs that specifically disavow supplemental oral agreements, we conclude that the parol evidence rule operates to bar consideration of the oral agreement. Notable in this case is the inclusion of a \"zipper clause\" in each CBA--so called because the combination of the integration and no-oral-modification clauses is intended to foreclose claims of any representations outside the written contract aside from those made in another written document executed by the parties. Cf. Merk v. Jewel Food Stores, 945 F.2d 889, 893 (7th Cir. 1991) (\"If an agreement is completely integrated, . . . not even evidence of a `consistent additional term' may be introduced to elucidate the writing.\" (citation omitted)).\n\n\n34\nAlso notable is the absence of any language even hinting at the possibility of supplemental agreements made prior to or contemporaneous with any of the CBAs--or, for that matter, any supplemental oral agreements made thereafter and somehow applied to a series of six written CBAs covering some twenty years. On this basis, Cappa is clearly distinguishable,14 for there the CBA \"expressly recognize[d] the existence of supplementary agreements.\"15Cappa v. Wiseman, 469 F. Supp. 437, 440 (N.D. Cal. 1979), aff'd, 659 F.2d at 960 (adopting the reasoning and decision of the district court on the merits). In Cappa, the plaintiff sued for wages under a CBA negotiated by a union and two employers' associations and signed by the defendant company, which was not a member of either association. Id. at 438. The company, which employed only one person who regularly performed work covered by the CBA, agreed to execute the CBA with the supplemental oral proviso that it would apply only to that individual. Id. Over the course of successive CBAs, the parties, \"consistent with their initial understanding, . .. applied the terms thereof to a single employee.\" Id. The company eventually hired a second employee, the plaintiff, to perform work covered by the job classifications contained in the CBA, but he did not receive the wages and benefits provided for in the CBA. Id. at 438-39. After he was terminated, he sued for union wages. Id. at 439.\n\n\n35\nHere, as in Cappa, appellees proffer an oral agreement that, although never committed to writing, is alleged to be part and parcel of the written CBAs. But unlike Cappa, the CBAs are not ambiguous on their face, nor do they contain any provision recognizing the possibility of supplemental agreements. Rather, they expressly refer to the Union as the \"exclusive collective bargaining representative\" for employees in the job classifications set forth in Exhibit A. In all of the CBAs, each Exhibit A lists roll-off drivers, and there are no open-ended provisions contemplating that other agreements might exist and continue in force. On the contrary, the CBAs contain integration and no-oral-modification clauses, as noted above, the purpose of which is to disavow and disclaim just the sort of oral agreement proffered here. Precisely the opposite was true in Cappa, where two provisions referenced the possibility of supplemental agreements, and another made the ambiguouspronouncement that \"particular characteristics of certain firms must be recognized.\" Cappa, 469 F. Supp. at 440. Under these circumstances, we cannot sanction the introduction of parol evidence that would eviscerate the very essence of the contracts. The district court erred in admitting evidence of the proffered oral agreement.\n\nCONCLUSION\n\n36\nFor the foregoing reasons, we conclude that there is federal court jurisdiction over this case, reverse the district court's judgment,16 and remand for further proceedings consistent with this opinion.\n\n\n\nNotes:\n\n\n1\n For ease of reference, we follow appellees' practice of classifying the numerous defendants into three groups, referred to here as HDS, the Union, and the Trust Funds. We note that HDS and Alii Refuse Corporation concede that they are a single employer; unless otherwise specified, \"HDS\" will be used to refer to both companies. Several individuals are also named in this suit but need not be separately identified for purposes of this opinion.\n\n\n2\n Likewise, in another section, the CBA states that \"this Agreement is the sole Agreement between the parties\" and that \"all matters and conditions properly the concern of negotiation and agreement between the parties hereby are covered by the terms of this Agreement.\"\n\n\n3\n The 1996-99 CBA was voided by a settlement agreement that HDS and the Union accepted following issuance of an NLRB complaint alleging that they had committed unfair labor practices in 1996 by entering into the CBA even though the Union did not represent a majority of the employees in the bargaining unit and had not been recognized as their representative.\n\n\n4\n Starting with the third CBA, the number of classifications listed in Exhibit A began to vary; the 1987-89 and 1990-92 CBAs list only one classification, the 1993-96 CBA lists three, and the 1996-99 CBA lists twelve. In each case, however, roll-off drivers are listed.\n\n\n5\n From time to time, HDS, through Kaneshiro, added employees (other than the Drivers) to the unit. Cadiz's deposition testimony suggests that additions were made when he or others policing the jobsite saw non-Union drivers coming onto the site. Kaneshiro testified in his deposition that he had \"no basis\" for deciding which employees would be in the Union.\n\n\n6\n No party has appealed the district court's ruling on the motions to dismiss. On September 17, 1999, a motions panel of this court denied HDS's motion to dismiss for lack of jurisdiction without prejudice to renewing the argument before this panel.\n\n\n7\n Specifically, 301 provides that \"[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce . . . , or between any such labor organizations, may be brought in any district court of the United States . . . .\" 29 U.S.C. 185(a).\n\n\n8\n In so holding, we approved dicta from an earlier case in which we stated: \"The [NLRB] has expertise in determining the majority status of a union at any given time. It has no apparatus for determining a union's past status. . . . Recreation of past relationships for the purpose of resolving factual disputes is one of the traditional functions of a trial court, and not a process in which the N.L.R.B. has any extraordinary expertise. Therefore, in this opinion we do not extend the District Court's jurisdiction into an area in which the N.L.R.B. exercises exclusive authority.\" See Endicott, 806 F.2d at 921 (alteration in original)(quoting Todd v. Jim McNeff, Inc., 667 F.2d 800, 804 (9th Cir. 1982), aff'd, 461 U.S. 260 (1983)).\n\n\n9\n See, e.g., Cappa v. Wiseman, 469 F. Supp. 437, 439-40 (N.D. Cal. 1979) (\"Restricting the interpretation of a collective bargaining agreement to its express terms is extremely unrealistic in circumstances where, as here, the parties have not actually negotiated the agreement themselves, but have attempted to adapt the terms of an industry-wide agreement to conditions in the workplace of a relatively unique .. . independent employer.\"), aff'd, 659 F.2d at 960 (adopting the reasoning and decision of the district court on the merits); Mohr v. Metro East Mfg. Co., 711 F.2d 69, 72 (7th Cir. 1983) (holding that the parol evidence rule applies to CBAs but that \"sensitivity to context is required \" in deciding \"whether the premise for applying the rule to a particular contract--that a written agreement or agreements were intended to be a complete expression of the agreement between the defendants--is present\").\n\n\n10\n We have taken care not to sanction the admission of parol evidence where the proffered evidence contradicts the written contract. See, e.g., Syufy Enters. v. Northern Cal. State Ass'n of IATSE Locals, 631 F.2d 124, 126 (9th Cir. 1980) (\"We do not hold that an arbitrator may rely upon negotiating history to contradict express provisions of a collective bargaining agreement. The arbitrator in this case relied upon credible, documentary evidence of the party's intent to extend the coverage of the contract, not to contradict it.\"). Appellees cite no case admitting parol evidence that is wholly inconsistent with the terms of a written CBA. Cappa, as explained infra, is distinguishable given its explicit recognition of the possibility of supplemental agreements.\n\n\n11\n Appellees similarly contend that HDS and the Union renewed their oral understanding with each new CBA.\n\n\n12\n We had already concluded that\nArticle I of each collective bargaining agreement recognizes the Union as the exclusive bargaining agent of all Lodge employ ees working in the specified classifications. Employees are defined as all Lodge employees excluding office employees, owner-supervisors and their close relatives. Thus, nonunion tem porary employees performing work in the agreements' specified classifications are members of the bargaining unit and are defined as employees under the agreements.\nPierce County, 827 F.2d at 1327.\n\n\n13\n Other circuits concur in this approach. See, e.g., Brown-Graves Co. v. Central States, Southeast & Southwest Areas Pension Fund, 206 F.3d 680, 683 (6th Cir. 2000) (refusing, where CBA was unambiguous, to consider parol evidence of \"informal arrangement\" between employer and union to exclude casual drivers from employer's obligation under CBA to make pension contributions for new employees); Excel Corp. v. United Food & Commercial Workers Int'l Union, Local 431, 102 F.3d 1464, 1468 (8th Cir. 1996) (\"When the language of the contract is clear and unambiguous, . . . as in the present case, the arbitrator may not rely on parol[ ] evidence.\"); Merk v. Jewel Food Stores, 945 F.2d 889, 892 (7th Cir. 1991) (\"The parol evidence rule provides that evidence of prior or contemporaneous agreements or negotiations may not be introduced to contradict the terms of a partially or completely integrated writing.\").\n\n\n14\n In addition, the CBA in Cappa, unlike the clear CBAs that we are asked to interpret, was \"far from being an unambiguous instrument, the terms of which are sufficient unto themselves . . . .\" Cappa, 469 F. Supp. at 440. We also note that HDS, the employer here, was specifically named as a negotiating party to the contract, unlike the small, independent employer in Cappa that had not negotiated the contract and was not a member of one of the employer associations that did so. We need not, however, decide whether the district court was correct in concluding that the CBAs \"appear to have been a CBA form adapted to fit the agreement between the Union and HDS,\" as was the case in Cappa, given our holding that the parol evidence rule bars admission of evidence of the oral agreement.\n\n\n15\n Such provisions included: 1)\"This Master Agreement shall supersede all existing agreements . . . provided, however, that special conditions of employment peculiar to certain Employers provided for in existing agreements supplementary to this Master Agreement shall be continued in force\"; 2) \"The Union is recognized as the sole collective bargaining agency for the employees employed in the classifications set forth in this Master Agreement and in agreements supplementary hereto in force and effect on the date of this Master Agreement\"; and 3) \"[B]oth parties recognize that particular characteristics of certain firms must be recognized . . . .\" Cappa, 469 F. Supp. at 440 (emphasis added).\n\n\n16\n Given our resolution of this appeal on parol evidence grounds, we need not decide whether 302(c)(5)(B) of the LMRA renders the alleged oral agreement unenforceable, nor need we decide whether the no oral modification clauses suffice to nullify the oral agreement or whether thereare material issues of fact as to the existence of the oral agreement.\n\n\n"} -{"text": "08-2077-ag\nNational Labor Relations Board v. E-Z Supply Corp., et. al.\n\n UNITED STATES COURT OF APPEALS\n FOR THE SECOND CIRCUIT\n\n SUMMARY ORDER\n Rulings by summary order do not have precedential effect. Citation to a summary order\nfiled on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate\nProcedure 32.1 and this court\u2019s Local Rule 32.1.1. When citing a summary order in a document\nfiled with this court, a party must cite either the Federal Appendix or an electronic database\n(with the notation \u201csummary order\u201d). A party citing a summary order must serve a copy of it\non any party not represented by counsel.\n\n\n At a stated term of the United States Court of Appeals for the Second Circuit, held at\nthe Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New\nYork, on the 31st day of August, two thousand and ten.\n\nPRESENT:\n\n RALPH K. WINTER,\n ROGER J. MINER ,\n JOS\u00c9 A. CABRANES,\n Circuit Judges.\n\n\n- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x\nNATIONAL LABOR RELATIONS BOARD ,\n\n Petitioner,\n\n v. No. 08-2077\n\nE-Z SUPPLY CORP., SUNRISE PLUS CORP., ALTER EGOS,\n\n Respondents.\n\n- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x\n\nFOR PETITIONER: DAVID H. MORI, National Labor Relations\n Board, Washington, DC.\n\nFOR RESPONDENTS: No Appearance\n\n 1\n\f Motion by National Labor Relations Board (\u201cNLRB\u201d) for adjudication in civil contempt of\nE-Z Supply Corp. and Sunrise Plus Corp., alter egos.\n\n UPON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,\nADJUDGED, AND DECREED that The Hon. Brian M. Cogan, United States District Judge for\nthe Eastern District of New York, be appointed as special master to (1) examine the claims of\nrespondent\u2019s counsel and (2) oversee enforcement of the NLRB order.\n\n We consider a motion for adjudication in civil contempt brought by petitioner NLRB against\nE-Z Supply Corp. and Sunrise Plus. Corp., alter egos (jointly, \u201crespondent\u201d).\n On March 3, 2008, following alleged unfair labor practices, the NLRB issued an order (\u201cthe\norder\u201d) directed at respondent to take certain actions in accordance with the National Labor\nRelations Act, 29 U.S.C. \u00a7 151-159. The order required respondent to, among other things: (1)\n\u201ccease and desist\u201d from various activities meant to encourage workers to \u201cabandon\u201d the Union, (2)\n\u201con request, bargain\u201d with representatives of the Industrial Workers of the World (\u201cthe Union\u201d),\nand (3) compensate a group of workers through \u201creinstatement to their former jobs\u201d or through\nmaking them \u201cwhole for any loss of earnings and other benefits suffered as a result of the\ndiscrimination against them.\u201d On June 26, 2008, this Court issued a judgment to enforce the NLRB\norder. On June 8, 2010, the NLRB filed a motion to have us adjudge the respondents in civil\ncontempt for having repeatedly failed or refused to comply with the order.\n When respondent did not file a response to the civil contempt motion, the Clerk of Court\ncontacted respondent\u2019s counsel. Counsel explained that he has been temporarily suspended from the\npractice of law and that both E-Z Supply Corp. and Sunrise Plus Corp. are no longer in business.\n In these circumstances, we appoint The Hon. Brian M. Cogan, United States District Judge\nfor the Eastern District of New York, to serve as special master to (1) examine the claims of\nrespondent\u2019s counsel and (2) report to this Court on any steps appropriate or necessary to effectuate\nthe order of the NLRB, or to hold respondents in civil contempt. Judge Cogan shall have full\nauthority to review the record of this case before the NLRB and before this Court, and to hold such\nhearings (evidentiary and otherwise) as may be appropriate in the circumstances. We encourage\nJudge Cogan to report to us as soon as possible, preferably no later than sixty days from the date of\nthe filing of this order.\n The mandate shall issue forthwith.\n\n\n FOR THE COURT,\n\n Catherine O\u2019Hagan Wolfe, Clerk of Court\n\n\n\n\n 2\n\f"} -{"text": "\n183 Cal.App.2d 342 (1960)\nTHE PEOPLE, Respondent,\nv.\nLLOYD SERGENT, Appellant.\nCrim. No. 6852. \nCalifornia Court of Appeals. Second Dist., Div. One. \nJuly 29, 1960.\n Earl Klein, under appointment by the District Court of Appeal, for Appellant.\n Stanley Mosk, Attorney General, William E. James, Assistant Attorney General, and Elizabeth Miller, Deputy Attorney General, for Respondent.\n FOURT, J.\n This is an appeal from an order denying a motion for a new trial and the judgment wherein defendant was convicted on two counts of forgery.\n In an information filed in Los Angeles County the defendant was charged in Count I with a violation of section 470 Penal Code in that he did, on or about February 20, 1959, with intent to cheat certain named persons, forge a check for the payment of money in the sum of $96.41 and did then pass the same knowing that such check was forged. In Count II the defendant was charged with committing substantially the same offense as set forth in Count I, on February 22, 1959. He pleaded not guilty. A jury trial was properly waived. On stipulation the matter was submitted on the testimony contained in the transcript of the preliminary hearing and further that both sides could present additional testimony. The defendant was found guilty and sentenced to the state prison.\n With reference to Count I, the evidence disclosed that Mr. Katzman was the proprietor of a surplus goods store in Burbank on February 20, 1959, and that on that date a Mr. Deering presented to him a form of printed check with the name \"Sergent's Body Shop\" printed at the top. The check was to the order of Deering for $96.41 and was signed \"W. B. Sergent\" as the maker and drawn on the Security First National Bank of Los Angeles, Burbank Branch. Deering endorsed the name \"John W. Deering\" on the check in Katzman's presence and in exchange therefor Katzman gave Deering merchandise and cash. Katzman never received payment on the check.\n With reference to Count II, the evidence disclosed that Paul Frazier was the owner of an automobile sales company in Los Angeles on February 22, 1959. On that date a check in the *344 same form and amount as the check referred to in Count I was presented by Deering to Frazier for a 1950 model automobile and some cash. Deering endorsed the check in Frazier's presence at the place of business.\n The checks as presented to Frazier and Katzman were of the type customarily used in the business of Bill Sergent, the proprietor of Sergent's Body Shop. The checks in question were missing from the place of business of Sergent on February 22, 1959. Only Marian Sergent and Bill Sergent were authorized to sign checks against the account at the bank and the signature \"W. B. Sergent\" on each of the checks was not the signature of Bill Sergent or Marian Sergent and no one was authorized or had permission to sign the name of W. B. Sergent. The defendant was the brother of Bill Sergent. There was no employer-employee relationship between the defendant and Bill Sergent.\n The defendant was arrested in Phoenix, Arizona on or about March 4, 1959. On March 7, 1959, Officer Koskie of the Glendale Police Department talked with the defendant at the jail in Phoenix. The defendant was shown reproductions of the checks in question and defendant stated to the officer that he \"had made out the face of these checks in their entirety, and at no time had he been authorized by his brother Bill Sergent to sign his name on any checks or to sign his name on any papers.\"\n On March 10, 1959, at the Glendale jail the officer showed the checks in question to the defendant and the defendant identified the handwriting on the faces of the checks as being his and \"again stated he had never (sic) permission to sign his brother's name on checks.\"\n The defendant was an escapee from the Ohio State Prison, having been committed there for grand larceny in 1953 and having escaped in 1956. He said he had come to California about five months before the date of the trial.\n [1] The appellant asserts that because the deputy district attorney in identifying the check used in the Frazier transaction on one occasion inadvertently referred to the check as being one signed by \"Lloyd Sergent\" that he could not be convicted of forgery, because all he did, according to the statement of the deputy district attorney, was to sign his own name. The check itself, which we have examined, is signed \"W. B. Sergent.\" Further, it is apparent from the record that the prosecutor mistakenly used the name \"Lloyd\" instead of \"W. B. Sergent\" in the one instance. In every other place *345 in the transcript the check is correctly described as having been signed \"W. B. Sergent.\"\n Appellant's next contention is that the extradition procedure by which he was brought into this state violated his constitutional rights. He testified that he was arrested in Phoenix, Arizona without a warrant and that he signed a blank waiver of extradition, that he assumed that he was to go back to Ohio to finish out his prison term in that state with the added charge of escape. Further he stated that he was not advised in Phoenix of his right to counsel and he was not taken before a court in that city. His theory is that because of what was done to him in Arizona his return to California was illegal and therefore the court in California had no jurisdiction to proceed with the matter of the charges set forth in the information.\n [2] The court in People v. Pratt, 78 Cal. 345, 349-350 [20 P. 731] stated:\n \"The defendant being before the proper court, which had jurisdiction of his offense, it matters not how he may have entered into the presence of the court, it was its duty to try him.\"\n \" 'The jurisdiction of the court in which the individual is found is not impaired by the manner in which the accused is brought before it.' (Mahon v. Justice, 127 U.S. 708 [8 S.Ct. 1204, 32 L.Ed. 283], and cases cited.)\"\n \" 'It would indeed be a strange conclusion if a party charged with a criminal offense could be excused from answering the government whose laws he had violated, because other parties had done violence to him, and also committed an offense against the laws of another state.' (Mahon v. Justice, 127 U.S. 712 [8 S.Ct. 1204, 32 L.Ed. 283]; Ex parte Ah Men, 77 Cal. 198 [19 P. 380, 11 Am.St.Rep. 263].)\"\n \"The governor of the state cannot oust the courts of the commonwealth of their right to try an individual charged with an offense over which they have jurisdiction, because of the fact that he has been instrumental in having the defendant there, by violation of his personal rights. It will not do to say that a fugitive from justice can escape the punishment for his crime because the governor of a state may have violated some law. The people of a state are not bound by any illegal act of their governor, nor should they be.\"\n [3] Even assuming that the defendant was in effect \"kidnapped\" and brought to California for trial without proper extradition proceedings, it would be no ground for the reversal *346 of the judgment in this case. The defendant received a fair and impartial trial in this state, with adequate constitutional safeguards, and the evidence of his guilt is overwhelming. (See Pettibone v. Nichols, 203 U.S. 192, 206 [27 S.Ct. 111, 51 L.Ed. 143]; People v. Millwood, 150 Cal.App.2d 154, 156 [309 P.2d 495]; People v. Youders, 96 Cal.App.2d 562, 568 [215 P.2d 743].)\n In the case of Frisbie v. Collins, 342 U.S. 519 [72 S.Ct. 509, 96 L.Ed. 541], Collins, in a petition in habeas corpus alleged that while he was living in Chicago, Michigan officers forcibly seized, handcuffed, blackjacked and took him to Michigan where he was convicted of murder and was then serving a life sentence. Collins claimed that the trial and conviction under such circumstances were in violation of the due process clause of the 14th amendment. The court stated:\n \"This Court has never departed from the rule announced in Ker v. Illinois, 119 US 436, 444, 30 L ed 421, 7 S Ct 225, that the power of a court to try a person for crime is not impaired by the fact that he had been brought within the court's jurisdiction by reason of a 'forcible abduction.' No persuasive reasons are now presented to justify overruling this line of cases. They rest on the sound basis that due process of law is satisfied when one present in court is convicted of crime after having been fairly apprized of the charges against him and after a fair trial in accordance with constitutional procedural safeguards. There is nothing in the Constitution that requires a court to permit a guilty person rightfully convicted to escape justice because he was brought to trial against his will.\"\n In the note immediately following the opinion it is set forth:\n \"Where a person accused of crime is found within the territorial jurisdiction wherein he is so charged, and is held under process legally issued from a court of that jurisdiction, neither the jurisdiction of the court nor the right to put him on trial for the offense charged is impaired by the manner in which he was brought from another jurisdiction, whether by kidnaping, illegal arrest, abduction, or irregular extradition proceedings. Ker v. Illinois (1886), 119 US 436, 30 L ed 421, 7 S Ct 225 (kidnaping in foreign country); Mahon v. Justice (1888) 127 US 700, 32 L ed 283, 8 S Ct 1204 (kidnaping in sister state); Cook v. Hart (1892) 146 US 183, 36 L ed 934, 13 S Ct 40 (kidnaping in sister state); Lascelles v. Georgia (1893) 148 US 537, 37 L ed 549, 13 S Ct 687 (defendant's trial for offense other than that specified in the requisition for his extradition from sister state); Re Johnson (1897) 167 US 120, 42 L ed 103, 17 S Ct 735 (recognizing rule); Adams v. New York *347 (1904) 192 US 585, 48 L ed 575, 24 S Ct 372 (recognizing rule); Pettibone v. Nichols (1906) 203 US 192, 51 L ed 148, 27 S Ct 111, 7 Ann Cas 1047, followed in Moyer v. Nichols (1906) 203 US 221, 51 L ed 160, 27 S Ct 121 (irregularity of proceedings for extradition from sister state). See annotation in 165 ALR 947. See also notes in 27 Ind LJ 292 (1952); and 27 Notre Dame Law 280 (1952) ....\"\n In Mahon v. Justice, 127 U.S. 700 [8 S.Ct. 1204, 32 L.Ed. 283], Mr. Justice Field, speaking for a majority of the court, said for the court:\n \"So in this case, it is contended that, because under the Constitution and laws of the United States a fugitive from justice from one State to another can be surrendered to the State where the crime was committed, upon proper proceedings taken, he has the right of asylum in the State to which he has fled, unless removed in conformity with such proceedings, and that this right can be enforced in the courts of the United States. But the plain answer to this contention is that the laws of the United States do not recognize any such right of asylum, as is here claimed, on the part of a fugitive from justice in any State to which he has fled; nor have they, as already stated, made any provision for the return of parties who, by violence and without lawful authority, have been abducted from a State. There is, therefore, no authority in the courts of the United States to act upon any such alleged right. In Ker v. Illinois the court said that the question of how far the forcible seizure of the defendant in another country, and his conveyance by violence, force, or fraud to this country could be made available to resist trial in the state court for the offense charged upon him, was one which it did not feel called upon to decide, for in that transaction it did not see that the Constitution, or laws, or treaties of the United States guaranteed to him any protection. So in this case we say that, whatever effect may be given by the state court to the illegal mode in which the defendant was brought from another State, no right, secured under the Constitution or laws of the United States, was violated by his arrest in Kentucky, and imprisonment there, upon the indictments found against him for murder in that State.\"\n It is apparent that there is no merit to either of the contentions of the appellant.\n The order denying the motion for a new trial is affirmed. The judgment is affirmed.\n Wood, P. J., and Lillie, J., concurred.\n"} -{"text": "915 F.2d 1579\nBrown (Dwight)v.Schweitzer (Gordon)\nNO. 90-1514\nUnited States Court of Appeals,Eighth Circuit.\nAUG 29, 1990\n\n1\nAppeal From: E.D.Mo.\n\n\n2\nAFFIRMED.\n\n"} -{"text": "46 F.3d 65\nU.S.v.Byars*\nNO. 94-10723\nUnited States Court of Appeals,Fifth Circuit.\nJan 10, 1995\nAppeal From: N.D.Tex., No. 3:94-CV-947-R\n\n1\nAFFIRMED.\n\n\n\n*\n Fed.R.App.P. 34(a); 5th Cir.R. 34.2\n\n\n"} -{"text": "J-S62034-14\n\n\nNON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37\n\nCOMMONWEALTH OF PENNSYLVANIA IN THE SUPERIOR COURT OF\n PENNSYLVANIA\n Appellee\n\n v.\n\nHAKIM ABDUL WAKEEL\n\n Appellant No. 3449 EDA 2013\n\n\n Appeal from the PCRA Order November 12, 2013\n In the Court of Common Pleas of Northampton County\n Criminal Division at No(s): CP-48-CR-0003579-2008\n\n\nBEFORE: ALLEN, J., OLSON, J., and OTT, J.\n\nMEMORANDUM BY OTT, J.: FILED APRIL 14, 2015\n\n Hakim Abdul Wakeel appeals from the order entered in the\n\nNorthampton County Court of Common Pleas, dated November 12, 2013,\n\ndismissing his first petition filed under the Post-Conviction Relief Act\n\n(\u201cPCRA\u201d).\u201d1 Wakeel seeks relief from the amended judgment of sentence of\n\nan aggregate 315 to 846 months\u2019 imprisonment imposed on February 23,\n\n2011, following his jury conviction of four counts of robbery, two counts of\n\naggravated assault, one count of burglary, one count each of conspiracy to\n\ncommit aggravated assault, robbery, and burglary, four counts of recklessly\n\nendangering another person, four counts of unlawful restraint, five counts of\n\n\n____________________________________________\n\n\n1\n 42 Pa.C.S. \u00a7\u00a7 9541-9546.\n\fJ-S62034-14\n\n\nterroristic threats, and two counts of simple assault.2 On appeal, Wakeel\n\nargues the PCRA court erred by refusing to allow him to dismiss his court-\n\nappointed counsel, which prevented him from properly preserving and\n\narguing his Brady3 claim. Based on the following, we are constrained to\n\nreverse and remand for further proceedings.\n\n The facts underlying Wakeel\u2019s convictions are well known to the\n\nparties, and have been fully discussed in our decision in connection with\n\nWakeel\u2019s direct appeal. See Commonwealth v. Wakeel, 47 A.3d 1260\n\n[1205 EDA 2011] (Pa. Super. 2012) (unpublished memorandum at 1-3).\n\nTherefore, we need only state that Wakeel\u2019s convictions arose out of a\n\nrobbery and burglary that he committed on July 26, 2007, together with two\n\nco-conspirators.\n\n On May 18, 2009, a jury convicted Wakeel of 25 criminal counts, as\n\nmentioned above. On June 12, 2009, the trial court originally sentenced him\n\nto an aggregate term of 336 to 888 months\u2019 imprisonment. Wakeel filed a\n\ndirect appeal. On December 14, 2010, a panel of this Court reversed the\n\njudgment of sentence and remanded the matter for resentencing. See\n\nCommonwealth v. Wakeel, 23 A.3d 579 [2179 EDA 2009] (Pa. Super.\n\n\n____________________________________________\n\n\n2\n 18 Pa.C.S. \u00a7\u00a7 3701(a)(1)(i), 2702(a)(4), 3502(a), 903(a)(1), 2705,\n2902(a)(1), 2706(a)(1), and 2701(a)(3), respectively.\n3\n Brady v. Maryland, 373 U.S. 83 (1963).\n\n\n\n -2-\n\fJ-S62034-14\n\n\n2010) (unpublished memorandum).4 On February 23, 2011, Wakeel was\n\nresentenced to an aggregate term of 315 to 846 months\u2019 incarceration. He\n\nfiled a second direct appeal,5 and a panel of this Court affirmed the\n\njudgment of sentence on March 30, 2012. See Wakeel, supra, 47 A.3d\n\n1260.\n\n On April 10, 2013, Wakeel filed a timely pro se PCRA petition. Counsel\n\nwas appointed to represent him. Nevertheless, Wakeel filed an amended pro\n\nse PCRA petition on May 23, 2013. Counsel filed a \u201cComprehensive\n\nDescription of Issues Raised Pursuant to Post-Conviction Relief Act, Title 42\n\nPa.C.S.A. \u00a79541 et seq. and Pennsylvania Rules of Criminal Procedure, Rule\n\n905\u201d and a brief in support of Wakeel\u2019s claims on July 3, 2013, and October\n\n9, 2013, respectively. A PCRA evidentiary hearing was held on September\n\n24, 2013.\n\n Thereafter, Wakeel filed a motion requesting counsel be dismissed and\n\nthat he be allowed to proceed pro se and file his own brief.6 PCRA counsel\n\n____________________________________________\n\n\n4\n The panel determined that because the charges were based on a single\ncriminal episode, Wakeel\u2019s convictions for terroristic threats and simple\nassault merged into his robbery convictions for sentencing purposes. See\nWakeel, supra, 23 A.3d 579.\n5\n In that appeal, Wakeel raised legality of sentence, discretionary aspects of\nsentencing, sufficiency, weight, and suppression claims.\n6\n In that motion, Wakeel alleged PCRA counsel\u2019s ineffectiveness with respect\nto a Brady violation. See Motion to \u201cGo Pro Se of Filing My P.C.R.A.\nEvidentiary Hearing Brief,\u201d 10/3/2013, at 1.\n\n\n\n -3-\n\fJ-S62034-14\n\n\nalso filed a petition to withdraw on October 23, 2013. On November 8,\n\n2013, a \u201cmotion to dismiss\u201d counsel hearing was conducted. That same day,\n\nthe PCRA court granted counsel\u2019s petition to withdraw, per Wakeel\u2019s request,\n\nbut denied Wakeel\u2019s request to file a pro se brief. Four days later, the court\n\nentered an order and opinion, denying Wakeel\u2019s PCRA petition. Wakeel filed\n\na timely pro se notice of appeal.7\n\n In his sole issue on appeal, Wakeel claims the PCRA court erred by\n\nrefusing to allow him to represent himself, which prevented him from\n\nproperly raising an allegedly valid Brady claim. Wakeel\u2019s Brief at 12.\n\n Specifically, he states:\n\n [T]he crux of [his] collateral attack on his conviction was the\n nature of the lenient treatment [his co-defendant] received after\n he testified against [Wakeel]. When PCRA counsel failed to elicit\n any testimony from trial/appellate counsel about this crucial\n subject, and then when PCRA counsel failed to introduce even\n the sentencing notes from [his co-defendant\u2019s] sentencing,\n [Wakeel] was understandably concerned that his rights were not\n being protected. This became all the more evident immediately\n after PCRA counsel filed an inadequate brief.\n\nId. Wakeel avers he contacted the PCRA court several times, \u201cbegging\u201d to\n\nbe allowed to represent himself and that PCRA counsel\u2019s brief be withdrawn.\n\nId. at 13. He argues the court erred by refusing his request, and \u201cthe\n____________________________________________\n\n\n7\n On December 16, 2013, the PCRA court ordered Wakeel to file a concise\nstatement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b).\nWakeel filed a concise statement on January 6, 2014. The PCRA court\nissued an opinion pursuant to Pa.R.A.P. 1925(a) on January 9, 2014, relying\non its November 12, 2013, opinion. During this time, Wakeel also retained\nprivate counsel, who filed the appellate brief.\n\n\n\n -4-\n\fJ-S62034-14\n\n\nconsequences were devastating\u201d because the court found his Brady claim to\n\nbe waived for failure to raise the issue in the context of an ineffective\n\nassistance of prior counsel claim. Id.8 However, before we may continue\n\nwith the analysis of this claim, we must address Wakeel\u2019s request to proceed\n\npro se and the November 8, 2013, \u201cmotion to dismiss\u201d counsel hearing.\n\n \u201cPursuant to the rules of criminal procedure and interpretive case law,\n\na criminal defendant has a right to representation of counsel for purposes of\n\nlitigating a first PCRA petition through the entire appellate process.\u201d\n\nCommonwealth v. Robinson, 970 A.2d 455, 457 (Pa. Super. 2009)\n\n(citations omitted); see also Pa.R.Crim.P. 904(C). In Commonwealth v.\n\nGrazier, 713 A.2d 81, 82 (Pa. 1998), the Pennsylvania Supreme Court held:\n\n\u201cWhen a waiver of the right to counsel is sought at the post-conviction and\n\nappellate stages, an on-the-record determination should be made that the\n\nwaiver is a knowing, intelligent, and voluntary one.\u201d 9 In Robinson, a panel\n\n____________________________________________\n\n\n8\n Moreover, Wakeel contends the court also erred in finding his underlying\nBrady claim meritless. Id. at 14. He states the court\u2019s finding that there\nwas no agreement in place between his co-defendant and the\nCommonwealth in exchange for testimony was belied by the record and\ncontrary to precedent set forth in Commonwealth v. Strong, 761 A.2d\n1167 (Pa. 2000). Id.\n9\n We note we may address this issue sua sponte. See Commonwealth v.\nStossel, 17 A.3d 1286, 1290 (Pa. Super. 2011) (\u201c[W]e acknowledge that\n[the petitioner] did not argue that he was entitled to counsel, or in any way\nchallenge his waiver of that right, on appeal to this Court. That fact,\nhowever, does not prevent us from sua sponte addressing this issue and\nremanding his case.\u201d)\n\n\n\n -5-\n\fJ-S62034-14\n\n\nof this Court set forth the requirements necessary to ensure a petitioner\n\nproperly waives his right to counsel during a Grazier hearing:\n\n While the right to legal representation in the PCRA context\n is not constitutionally derived, the importance of that right\n cannot be diminished merely due to its rule-based derivation. In\n the post-conviction setting, the defendant normally is seeking\n redress for trial counsel\u2019s errors and omissions. Given the\n current time constraints of 42 Pa.C.S. \u00a7 9545, a defendant\u2019s first\n PCRA petition, where the rule-based right to counsel\n unconditionally attaches, may well be the defendant\u2019s sole\n opportunity to seek redress for such errors and omissions.\n Without the input of an attorney, important rights and defenses\n may be forever lost.\n\n In Commonwealth v. Meehan, 427 Pa. Super. 261, 628\n A.2d 1151 (Pa. Super. 1993), which was specifically cited with\n approval in our Supreme Court\u2019s pronouncement in Grazier, we\n addressed whether the defendant had validly waived his rule-\n based right to counsel for purposes of a PCRA hearing. The\n defendant therein complained that he did not actually waive his\n right to counsel because the waiver colloquy was inadequate in\n that it did not conform to the requirements of Pa.R.Crim.P. 121,\n formerly Pa.R.Crim.P. 318, waiver of counsel.\n\n That rule indicates that if a defendant seeks to waive his\n right to counsel, six areas of inquiry must be explored and\n explained to the defendant to \u201censure that the defendant\u2019s\n waiver of the right to counsel is knowing, voluntary, and\n intelligent[.]\u201d Pa.R.Crim.P. 121(A)(2). In Meehan, we noted\n that some of the precepts regarding waiver of counsel in the trial\n setting were inapplicable in the PCRA area. We did hold,\n however, that if a post-conviction waiver of counsel is requested\n by the defendant, the PCRA court must ascertain that \u201cthe\n defendant understands: (1) his right to be represented by\n counsel; (2) that if he waived this right, he will still be bound by\n all normal procedural rules; and (3) that many rights and\n potential claims may be permanently lost if not timely asserted.\u201d\n Id. at 1157; see also Commonwealth v. Powell, 2001 PA\n Super 342, 787 A.2d 1017, 1019 (Pa. Super. 2001). While we\n concluded that the colloquy conducted therein was sufficient,\n that case clearly indicates four of the six areas of inquiry\n contained in Rule 121 apply in the PCRA context.\n\n -6-\n\fJ-S62034-14\n\n\n\n Pa.R.Crim.P. Rule 121(A)(2) provides:\n\n (2) To ensure that the defendant\u2019s waiver of the right to\n counsel is knowing, voluntary, and intelligent, the judge or\n issuing authority, at a minimum, shall elicit the following\n information from the defendant:\n\n (a) that the defendant understands that he or she\n has the right to be represented by counsel, and the\n right to have free counsel appointed if the defendant\n is indigent;\n\n (b) that the defendant understands the nature of the\n charges against the defendant and the elements of\n each of those charges;\n\n (c) that the defendant is aware of the permissible\n range of sentences and/or fines for the offenses\n charged;\n\n (d) that the defendant understands that if he or she\n waives the right to counsel, the defendant will still be\n bound by all the normal rules of procedure and that\n counsel would be familiar with these rules;\n\n (e) that the defendant understands that there are\n possible defenses to these charges that counsel\n might be aware of, and if these defenses are not\n raised at trial, they may be lost permanently; and\n\n (f) that the defendant understands that, in addition\n to defenses, the defendant has many rights that, if\n not timely asserted, may be lost permanently; and\n that if errors occur and are not timely objected to, or\n otherwise timely raised by the defendant, these\n errors may be lost permanently.\n\n Subsections (b) and (c) are not relevant in the PCRA\n setting; however, the remainder of concepts examined in Rule\n 121 clearly impact on whether a defendant understands the full\n import of his decision to act as his own counsel. Therefore, in\n accordance with Meehan and as required by [Commonwealth\n v.] Davido, [868 A.2d 431 (Pa. 2005) (finding that it is up to\n\n -7-\n\fJ-S62034-14\n\n\n the trial court to ensure that a proper colloquy is performed\n where a defendant has invoked his right to self-representation),]\n we conclude that if a PCRA defendant indicates a desire to\n represent himself, it is incumbent upon the PCRA court to elicit\n information from the defendant that he understands the items\n outlined in Pa.R.Crim.P. 121(A)(2)(a), (d), (e), and (f). A court\n must explain to a defendant that he has the right to counsel, in\n accordance with (a), that he is bound by the rules as outlined in\n (d), and that he may lose rights, as indicated in (f). Subsection\n (e) must be appropriately tailored so that a defendant is\n informed that \u201cthere are possible defenses to these charges that\n counsel might be aware of, and if these defenses are not raised\n [in a PCRA petition], they may be lost permanently.\u201d\n\nRobinson, 970 A.2d at 458-460.\n\n Turning to the present matter, a review of the November 8, 2013,\n\n\u201cmotion to dismiss\u201d counsel hearing reveals the PCRA court\u2019s inquiry was not\n\nproperly in accordance with Grazier, and with respect to the items set forth\n\nin Rule 121(A)(2), to ensure that Wakeel\u2019s decision to proceed pro se was\n\nmade in knowing, voluntary, and intelligent manner. See N.T., 11/8/2013,\n\nat 2-6.\n\n Furthermore, this omission is augmented by the fact that at the\n\nhearing, while granting him permission to proceed pro se, the court denied\n\nWakeel\u2019s request to file a pro se brief to raise the claim of PCRA counsel\u2019s\n\nineffectiveness regarding the Brady argument. Moreover, the court waited\n\nonly four days after granting Wakeel pro se status to then deny his request\n\nfor PCRA relief. It is well-settled that \u201ca PCRA petitioner cannot assert\n\nclaims of PCRA counsel ineffectiveness for the first time on appeal.\u201d\n\n\n\n\n -8-\n\fJ-S62034-14\n\n\nCommonwealth v. Henkel, 90 A.3d 16, 28 (Pa. Super. 2014).10\n\nTherefore, the only proper way for Wakeel to preserve his claim of PCRA\n\ncounsel\u2019s ineffectiveness was by filing a PCRA pleading. In the court\u2019s\n\nNovember 8, 2013, order, it prevented Wakeel from doing so. Accordingly,\n\nthe court erred in precluding Wakeel from filing an amended PCRA petition. 11\n\n Consequently, we are constrained to reverse the PCRA court\u2019s\n\nNovember 12, 2013, order denying Wakeel\u2019s PCRA petition. We remand\n\nwith instructions to the PCRA court to conduct a proper Grazier hearing, and\n\nto allow Wakeel permission to file an amended PCRA petition, either pro se\n\nor with the assistance of privately retained counsel, so that Wakeel may\n\nproperly preserve his claim of appointed PCRA counsel\u2019s ineffectiveness. If\n\nWakeel chooses to retain his private PCRA counsel, we also direct counsel to\n\nenter an appearance with the PCRA court. Because the remand may change\n\nthe content and character of this appeal substantially, we relinquish\n\njurisdiction.\n\n Order reversed. Case remanded. Jurisdiction relinquished.\n\n\n\n\n____________________________________________\n\n\n10\n See also Commonwealth v. Rigg, 84 A.3d 1080, 1085 (Pa. Super.\n2014) (finding a petitioner cannot raise ineffective assistance of PCRA\ncounsel for first time in Pa.R.A.P. 1925(b) statement).\n11\n While Wakeel requested that he be able to file his own brief, we can infer,\nbased on his pro se status, that he actually meant an amended petition.\n\n\n\n -9-\n\fJ-S62034-14\n\n\nJudgment Entered.\n\n\n\n\nJoseph D. Seletyn, Esq.\nProthonotary\n\n\n\nDate: 4/14/2015\n\n\n\n\n - 10 -\n\f"} -{"text": "\n196 So.2d 211 (1967)\nFIRST NATIONAL BANK OF TAMPA, As Guardian of the Property of Catherine E. Sharp, a/k/a Kathryn Sharp, a/k/a Kathryn Ron Sharp, Incompetent, Appellant,\nv.\nFIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF TAMPA, and Mrs. Viola Jones, Appellees.\nNo. 7240.\nDistrict Court of Appeal of Florida. Second District.\nFebruary 22, 1967.\nRehearing Denied March 28, 1967.\n*212 Morrice S. Uman, Tampa, for appellant.\nWm. Terrell Hodges, of Macfarlane, Ferguson, Allison & Kelly, Tampa, for appellee Jones.\nALLEN, Chief Judge.\nThe appellant, plaintiff below, appeals from a final decree entered by the Circuit Court of Hillsborough County finding: that account No. 4001 in the Tampa Federal Savings & Loan Association is a Totten Trust; that the Guardian of Mrs. Catherine E. Sharp was without authority to withdraw said funds; and that the defendant below, Viola Jones, is entitled to have the funds, withdrawn from said account, returned to the Tampa Federal Savings & Loan Association to abide the demise of Mrs. Sharp.\nThis appeal is based on the counterclaim of Mrs. Viola Jones, which alleged that the plaintiff-bank, as Guardian of the property of Mrs. Sharp, had withdrawn from the Tampa Federal Savings & Loan Association the sum of $12,769.80 then being held in the Tampa Federal Savings & Loan Association in account No. S-4001, the card of which showed on its face that it was an individual trust account in the name of Mrs. Kathryn Sharp, Trustee; Mrs. Viola Jones, beneficiary.\nThe account was dated January 4, 1957. The signature of Kathryn Sharp appeared before the word \"Trustee,\" and the card carried the following language on its face:\n\"As specified in trust agreement on reverse side hereof.\"\nThe reverse side of the Individual Trust Account card carried the following provisions:\n\"I, the undersigned Grantor do hereby give and grant the Savings Account applied for on the reverse side hereof, together with all payments and earnings thereon, to the Trustee named on the reverse side hereof; to have and to hold the same in trust, for the beneficiary named on the reverse side hereof, for the following uses and purposes, to-wit:\n\"To withdraw and transfer the same in whole or in part, and to exercise full control over the participation value thereof as though the account were held absolutely free and discharged of any trust, and without obligation on the part of the Association to look to the application of the fund.\n\"In the event of the death of the Trustee, the Association shall, if the beneficiary has attained the age of ____ years, transfer or pay the withdrawal value of the account to the beneficiary, free and discharged of any trust; and if at the death of the Trustee named the beneficiary has not attained such age, the Association is authorized to name and appoint a suitable person or persons as successor Trustees to hold the account until the beneficiary has attained such age, at which time such successor Trustees shall transfer and assign to the beneficiary the account, free and discharged of any trust. Such successor Trustees shall have the same powers and control over the account as the Trustee herein named.\"\nMuch of the language set forth in this trust agreement does not concern the present trust but is a part of a form used by banks all over the state. Although the trustee's signature appears before the trust agreement, it was printed on the face of the card \"as specified in trust agreement on reverse side hereof.\"\nThe counterclaimant's theory of the account was that it was a Totten Trust and *213 that because of the incompetency of Mrs. Sharp the said fund, represented by account No. S-4001, should remain inviolate until the death of Mrs. Sharp unless Mrs. Jones predeceased her.\nWe agree with the lower court that the account constituted a Totten Trust.\nApparently the name \"Totten Trust\" was derived from the name of William H.B. Totten, as administrator, who was one of the parties in the leading case, In re Totten, 179 N.Y. 112, 71 N.E. 748, 70 L.R.A. 711 (1904). In that case the New York Court of Appeals held that a person depositing his own money in a savings bank in his own name as trustee for another does not establish an irrevocable trust until the depositor completes the gift by some unequivocal act or declaration during his lifetime, or unless the depositor dies before the beneficiary without revocation.\nIn Totten, the opinion of the Court concluded with the following paragraph:\n\"While we have considered, we do not cite, the numerous cases decided by the Supreme Court bearing upon the question, owing to the conflict in the opinions of learned justices in different appellate divisions. It is necessary for us to settle the conflict by laying down such a rule as will best promote the interests of all the people in the state. After much reflection upon the subject, guided by the principles established by our former decisions, we announce the following as our conclusion: A deposit by one person of his own money in his own name as trustee for another, standing alone, does not establish an irrevocable trust during the lifetime of the depositor. It is a tentative trust merely, revocable at will, until the depositor dies or completes the gift in his lifetime by some unequivocal act or declaration, such as delivery of the passbook or notice to the beneficiary. In case the depositor dies before the beneficiary without revocation, or some decisive act or declaration of disaffirmance, the presumption arises that an absolute trust was created as to the balance on hand at the death of the depositor. This rule requires us to reverse the order of the Appellate Division, and to affirm the decree of the surrogate, with costs to the appellants in all courts.\"\nThe record in this case shows that the incompetent Mrs. Sharp had sufficient funds for her own use so it was not necessary to invade the Totten Trust for the use of the ward's support, medical care, etc.\nIn the case of Rickel v. Peck, 211 Minn. 576, 2 N.W.2d 140, 138 A.L.R. 1375 (1942), the Minnesota Supreme Court, in its opinion, said:\n\"The Court having jurisdiction of guardianships of incompetent persons has the power to order on behalf of an incompetent ward the revocation of a tentative trust of a savings account. Where the depositor becomes insane and it is necessary for his proper care and support, the court may order a tentative trust revoked * * *. [Cases omitted.]\"\nIn the case of Seymour v. Seymour, Fla. 1956, 85 So.2d 726, our Supreme Court, in an opinion by the late Justice Hobson, said:\n\"As the circuit judge observed, and as we have held, the banking laws, of which the foregoing is a section, were designed primarily to regulate banks and are not necessarily conclusive of the ownership of deposited money. In this case, however, the situation with which we are confronted is a typical `Totten trust.' The `Totten trust' doctrine was definitely stated in In re Totten, 179 N.Y. 112, 71 N.E. 748, 752, 70 L.R.A. 711. In that case the operation of the doctrine was described as follows:\n\"`A deposit by one person of his own money in his own name as trustee for another, standing alone, does not establish *214 an irrevocable trust during the lifetime of the depositor. It is a tentative trust merely, revocable at will, until the depositor dies or completes the gift in his lifetime by some unequivocal act or declaration, such as delivery of the passbook or notice to the beneficiary. In case the depositor dies before the beneficiary without revocation, or some decisive act or declaration of disaffirmance, the presumption arises that an absolute trust was created as to the balance on hand at the death of the depositor.' (Emphasis added.)\"\nIt will be observed that the trust funds were not turned over to the appellee in this case but are being held in trust until the eventual death of Mrs. Catherine Sharp.\nAffirmed.\nSHANNON and HOBSON, JJ., concur.\n"} -{"text": "\n3 A.3d 1226 (2010)\n203 N.J. 437\nSTATE\nv.\nBROWN.\nNos. C-15 September Term 2010, 065825\nSupreme Court of New Jersey.\nSeptember 10, 2010.\nPetition for Certification Denied.\n"} -{"text": "\n111 Cal.App.3d 855 (1980)\n168 Cal. Rptr. 842\nNUNES TURFGRASS, INC., Plaintiff and Respondent,\nv.\nCOUNTY OF KERN, Defendant, Cross-complainant and Appellant; KENNETH CORY, as State Controller, Cross-defendant and Appellant. NUNES TURFGRASS, INC., Plaintiff and Appellant,\nv.\nCOUNTY OF STANISLAUS, Defendant and Respondent.\nDocket Nos. 4242, 4410.\nCourt of Appeals of California, Fifth District.\nNovember 6, 1980.\n*857 COUNSEL\nRalph B. Jordan, County Counsel, D.N. Reid, Assistant County Counsel, Ronald D. Wenkart and D. Sorensen, Deputy County Counsel, for Defendant, Cross-complainant and Appellant.\nEvelle J. Younger and George Deukmejian, Attorneys General, Ernest P. Goodman, Assistant Attorney General, and Edward P. Hollingshead, Deputy Attorney General, for Cross-defendant and Appellant.\nRichardson & Gaskill and Robert L. Jones, Jr., for Plaintiff and Appellant and Plaintiff and Respondent.\nGilbert W. Boyne, County Counsel, John F. Christensen, Assistant County Counsel, Carl O. Waggoner, Senior Deputy County Counsel, Harry P. Drabkin and Gerarde F. Imhoff, Deputy County Counsel, for Defendant and Respondent.\nOPINION\nZENOVICH, Acting P.J.\nThe issue before us is whether the Legislature has the authority to extend the \"growing crops\" exemption from *858 taxation (Cal. Const., art. XIII, \u00a7 3, subd. (h)) to turf grasses grown for sale and transplanted as living plants. For the following reasons we conclude that the enactment (Rev. & Tax. Code, \u00a7 202.1) is an invalid exercise of the legislative authority.\nThe Superior Court of Kern County granted judgment for Nunes Turfgrass, Inc. (hereafter Nunes), finding that Nunes was entitled to a refund of the taxes assessed by the County of Kern (hereafter Kern) and that Revenue and Taxation Code section 202.1[1] was constitutional under the California Constitution.\nThe Superior Court of Stanislaus County, however, granted judgment against Nunes, determining that assessments by the County of Stanislaus (hereafter Stanislaus) were proper and that section 202.1 was an invalid exercise of the legislative authority under the California Constitution. A question of first impression is thus presented.\nThe oral testimony at both trials, as well as the findings of fact and conclusions of law by both courts, do not materially differ. Nevertheless, we summarize the facts in each case and examine the successive contentions in light of the applicable law.\n\nTHE KERN PROCEEDING\nJohn Nunes, president of Nunes, testified that he grew a bluegrass blend of turf grass which is sold to wholesalers and then delivered to their customers by Nunes. He then outlined the manner in which turf grass is cultivated and harvested. The bare ground is prepared for cultivation by discing and leveling operations and is followed by seeding, irrigation, and fertilization. After an average period of 9 months,[2] the turf grass is \"harvested\" by means of a machine that severs the roots about one-quarter inch below the ground in rectangular pieces which are 18 inches wide and 72 inches long. The grass is then rolled up, stacked on pallets, and delivered to customers for transplanting as lawn. Some roots of the plant (the feeder or hair roots) remain after harvesting, but are destroyed when the land is subsequently disced; new turf grass is not grown from the feeder roots.\n*859 Mr. Nunes testified that the turf grass is harvested within one year of planting, although it is only harvested \"upon order from customers.\" He indicated that the general industrial practice is to harvest turf grass within one year because of economic factors. Specifically, Mr. Nunes noted that \"It costs you [the turf grower] to maintain the grass, and if you keep it over a year, it would just cost you too much to maintain it. You couldn't compete in the marketplace.\" The bluegrass varieties grown by Nunes were classified as perennials. Mr. Nunes conceded that turf grass could be left in the ground indefinitely under proper maintenance. After harvesting in the summertime season, the grass must be transplanted within 24 hours. Bluegrass must be left in the ground awaiting orders or else it might perish. Once transplanted, bluegrass provides a lawn which will last \"forever\" if properly maintained.\nMr. Nunes also stated that turf grass left in the ground after peak maturity can become thatchy. In addition, the older grass is more susceptible to disease, insects, weeds, and other problems. These externalities, according to Mr. Nunes, were considerations in his decision to annually harvest.\nKenneth Hammons, senior auditor-appraiser with the Kern County Assessor's office, testified that the county had treated turf grass as nursery stock for sale since 1973. This effectively meant that the grass was characterized as personal property, which was then given the 50 percent business inventory exemption[3] rather than the 100 percent \"growing crop\" exemption by the county taxing authority. Hammons noted that these assessments were based upon the administrative construction recommended by the State Board of Equalization in an assessor's handbook and Attorney General's opinion. (See 57 Ops.Cal. Atty.Gen. 506, 516 (1974).)\nBuddy Florence, senior auditor-appraiser for the State Board of Equalization, stated that nursery plants grown for resale are administratively treated as personal property falling outside the growing crop exemption. In the January 1974 assessor's handbook issued by the board, turf grass was characterized as nursery stock because it was in the taxable category of \"plants that are cultivated and propagated for *860 sale.\"[4] In explaining why turf grass is regarded as nursery stock, Florence testified that the grass is grown for sale and transplanting \"the same as rose cuttings of a rosegrower are grown for sale and transplanting.\" He noted that rose cuttings for sale have been treated as nursery stock by prior court decisions. Florence further indicated that turf grass is botanically a perennial and is grown as a perennial in California. He contrasted the grass with tomatoes, which is a perennial treated as an annual due to California weather conditions.[5] Nevertheless, Florence explained that chrysanthemums are one type of nursery stock regarded as growing crops; this is because the cut flowers are sold rather than the plant which produced the flowers. In fact, it was established that the plant is destroyed after the flowers have been severed. Florence concluded that turf grass is different from chrysanthemums, because the plant itself is sold for transplanting by customers. In contrast, only the cut flowers are saved from the chrysanthemum plant which is subsequently destroyed.\nThe parties stipulated that Nunes paid the $5,900 assessment on turf grass under protest and had received no reimbursement from the county. A declaration of an officer from the state Controller's office was admitted into evidence. The document related that the Controller informed all county auditors of his intention to not seek tax reimbursement for lost revenues because of the Attorney General's opinion stating that section 202.1 was invalid. (See 57 Ops.Cal.Atty.Gen 506, 516 (1974).)\nThe court concluded that Nunes was entitled to a tax refund and that section 202.1 was constitutional. In addition, it determined that Kern County was entitled to file a reinbursement claim for lost revenues against the state Controller.[6]\n\nTHE STANISLAUS PROCEEDING\nMr. Nunes and Auditor Florence also testified at the Stanislaus hearing, duplicating most of their earlier statements.\n*861 Mr. Nunes stated that the implements used to prepare the land for turf grass planting are \"identical to what I use in my farming operation.\" The bluegrass was sold to landscapers, developers, and homeowners for transplanting as lawn. Mr. Nunes indicated that \"We will not harvest a square foot unless we have an order for it.\" He stated that the grass is harvested within one year because of economic necessity. In clarifying this justification for annual harvesting, Nunes indicated \"but in our management, after being in the business for 15 years, as part of our management we plant at least 12 months out of the year and we try to project our sales and plant accordingly, so we don't have a lot of sod sitting there for several months.\" Nonetheless, it was admitted that the grass could be held indefinitely if properly maintained. Unless proper maintenance is undertaken, the turf grass can become infested with weeds and insects.\nFlorence reiterated the same testimony about the administrative interpretation given to turf grass by the State Board of Equalization. The crux of the administrative construction was revealed in the following line of questioning: \"Q. You have here the testimony that turfgrass is as a matter of practice cut and removed for transplanting at least once each year. Is that in your opinion inconsistent with its characterization as nursery stock?\n\"A. No, it is not. There are other nursery stock items that are grown and sold within one year, but they're grown and sold as living plants.\n\"Q. I take it that the crucial consideration for you, then, is that the sale of the plant is a living plant?\n\"A. That is part of our conclusion, yes. That's what we rested on.\" He also noted that most counties throughout California were assessing turf grass in 1973 and that only Ventura County exempted it as a growing crop. Florence said some perennials were treated as annuals because of climatic conditions or because the product of such plants was the salable item.\nThe parties stipulated that Nunes had paid $5,800.38 in taxes for turf grass in the fiscal year 1975-1976 and $3,423.04 in the fiscal year 1976-1977. They also agreed that Nunes protested payment of $5,771.23 and $3,423 for the respective fiscal tax years. The Stanislaus County Board of Supervisors denied the claims for refund.\n*862 The court denied relief to Nunes, ruling that section 202.1 was an invalid exercise of legislative authority under the California Constitution.[7]\n(1a) Appellants Kern and state Controller contend that section 202.1 is invalid as an ultra vires attempt by the Legislature to include turf grass sold for transplanting within the \"growing crop\" exemption. Contradistinguished, appellant Nunes contends that the statutory provision is a valid legislative clarification of the status of turf grass. The resolution of this issue depends upon whether turf grass satisfies the definition of growing crop existing at the time the constitutional amendment was adopted. We do not believe it does.\n\nDISCUSSION\nSince 1879, the California Constitution (former art. XIII, \u00a7 1) has exempted \"growing crops\" from taxation.[8] In 1974, the Legislature added section 202.1, which provides that: \"For purposes of the exemption from taxation specified in Section 1 of Article XIII of the Constitution and Section 202, `growing crops' includes turf grass which is cultivated and harvested for sale and transplanting.\"\n(2) We believe clearly established rules of constitutional interpretation require that a term used in a constitutional amendment must be construed according to the meaning it had when the amendment was adopted. The Legislature cannot expand the meaning of the amendment by subsequent legislation, since such an expansion would be equivalent to a constitutional amendment. (See Forster Shipbldg. Co. v. *863 County of L.A. (1960) 54 Cal.2d 450, 456 [6 Cal. Rptr. 24, 353 P.2d 736]; Stribling's Nurseries, Inc. v. County of Merced (1965) 232 Cal. App.2d 759, 762 [43 Cal. Rptr. 211].) Although the Legislature can clarify constitutional amendments of doubtful or obscure meaning (Delaney v. Lowery (1944) 25 Cal.2d 561, 569 [154 P.2d 674]), it cannot transcend the meaning intended by the constitutional framers.\n(1b) The exemption in article XIII, section 3, subdivision (h), of the Constitution was apparently spurred by the concern that assessment of growing crops might discourage planting and sowing. (See Stimson, Exemption From the Property Tax in California (1933) 21 Cal.L.Rev. 193, 206.) The meaning of \"growing crops\" under the constitutional exemption has been elucidated by a series of judicial precedents. Before deciding whether turf grass satisfies the constitutional definition, it is necessary to examine cases which are helpful in delineating the scope of a \"growing crop.\"\nThe seminal test of the constitutional term \"growing crop\" was enunciated in Cottle v. Spitzer (1884) 65 Cal. 456 [4 P. 435]. Our Supreme Court decided that fruit trees were not within the definition of growing crop contained in former article XIII, section 1, of the Constitution. (Cottle, supra, at pp. 460, 464-465.) In so doing, the meaning of \"growing crop\" was clarified by the high court, which adopted the reasoning of Superior Court Judges Spencer and Belden. In Judge Spencer's opinion, \"... it is at least doubtful if, under the common and restrictive acceptation of the term, anything more would be understood than products from annual plants, as cereals, maize, etc., ...\" (Id., at pp. 457-458.) He also stated that \"... in relation to the single term of `growing crops,' my conclusion is that it is in effect a declaration that it is not sufficiently tangible to be treated as property; it is in a transitory state, starting with the embryo and ending with the matured product, at no two consecutive points of time in the same condition. To attempt to place upon it any money value, would be to indulge in the merest guesswork.\" (Id., at p. 460.) Judge Belden's opinion contains the \"growing crop\" definition most frequently cited in subsequent precedents. He said that the term \"`\"includes only those crops which require an annual planting or sowing, or an annual harvesting.\"'\" (Id., at p. 463.)[9] Judge Belden showed that this definition was the one prevailing at the time of the Constitution by penning that: \"The members of this [constitutional] *864 convention could but have been aware of the growing importance of the vine and fruit interest of the State. It was reported to them that fifty millions of capital was then employed in grape culture alone, and yet in all the debates upon this question, both upon the part of those who favored, and by those who opposed this exemption, constant reference is made to a crop to be sown and harvested within the same year, and not even a suggestion that trees or vines of perennial growth were referred to.\" (Cottle v. Spitzer, supra, 65 Cal. at p. 463, italics added.) The Supreme Court also cited language from both judges which indicated that such tax exemptions should be construed narrowly. (Cottle, supra, at pp. 459-460, 464-465.)\nIn Miller v. County of Kern (1902) 137 Cal. 516 [70 P. 549 (second appeal 1907, 150 Cal. 797 [90 P. 119]), the Supreme Court determined that alfalfa was not within the \"growing crop\" exemption. The court reasoned that alfalfa is a perennial plant which, when properly maintained, produces annual hay crops for an indefinite number of years. (Id., 137 Cal. at pp. 524-525.) Relying upon Cottle, it was decided that alfalfa was not a growing crop: \"As a hay crop, it is unlike wheat or barley, sown for hay, which produces but a single annual crop and no more.\" (Id., at p. 525.)[10]\nWhether nursery stock for sale constituted a crop was considered by our high court in Story v. Christin (1939) 14 Cal.2d 592 [95 P.2d 925, 125 A.L.R. 1402], a case not directly concerned with the constitutional exemption. The plaintiff in Story defaulted on a lease agreement and, following dispossession, initiated a conversion action against the lessor for recovery of orange and walnut trees grown as nursery stock on the leased land. The trees were planted closely together in rows, were usually purchased through contracts for future delivery, and were sold for the purpose of planting in orchards. (Id., at pp. 593-594.) Plaintiff claimed that the trees were personal property and stock in trade for sale to the public in his nursery business; defendant lessor suggested that the trees were a growing crop properly regarded as realty. The superior court dismissed the conversion action for failure to state a claim, and the appellate court reversed. In overturning the lower court, Story held *865 that nursery trees more closely resembled stock in trade than a crop which requires annual sowing and harvesting. The court noted: \"There is no annual sowing and reaping, the purpose of planting being that they may later be transplanted. Such trees are attached to the soil by roots because only in this manner may they be kept ready for sale.\" (Id., at p. 595.) Instead, it was found that the fruit and nut trees were personalty because of commercial realities \u0097 they were grown for resale to the public and severed in accordance with buyers' needs. Attachment to the land was considered inconsequential by the court, which observed that: \"Nursery trees are attached to the land by their roots because, under the law of agriculture they must get their nourishment from the land. The ground is the only feasible storage place for this salable product and soil serves the dual purpose of maturing and preserving until a buyer is found for them.\" (Id., at p. 596, italics added.) Based on these considerations, the Supreme Court established that nursery stock for sale was not equivalent to a growing crop.\nFurther exploration of the correct classification of nursery stock was undertaken in Jackson & Perkins Co. v. Stanislaus County Board of Supervisors (1959) 168 Cal. App.2d 559 [335 P.2d 976]. Plaintiff corporation grew rose bushes and other plants for sale as nursery articles. The ground was leveled, subsoiled, and planted to rose cuttings taken from wild stock. The developing plants were irrigated and weeded, and then budded to the desired types of roses. Testimony established that it takes one to two years to complete the plants to the point where they are salable; one year for plants intended to be used for their cut flowers and two years for plants intended for open air planting. It was also shown that the plants became commercially valueless after these time periods, that they are not grown for the profit from the products of the plant, and that they require maintenance with farm-type procedures. (Id., at pp. 559-560.) The appellate court held that both the one- and two-year rose bushes raised by plaintiff were not entitled to the \"growing crop\" exemption. Relying upon Story, the court initially found that the nursery stock had the characteristics of personalty taxed as stock in trade. (Id., at p. 563.) Moreover, it also relied upon the Washington case of Miethke v. Pierce County, supra, 173 Wash. 381, which ruled that nursery stock sold for transplanting by customers did not constitute a growing crop. (Jackson & Perkins Co. v. Stanislaus County Board of Supervisors, supra, 168 Cal. App.2d at pp. 563-564.) Finally, the court noted that its characterization accorded with the administrative interpretation given to nursery stock since 1948. (Id., at p. 564.)\n*866 In Stribling's Nurseries, Inc. v. County of Merced, supra, 232 Cal. App.2d 759, this court similarly addressed the proper classification of nursery stock in relation to the growing crop exemption. We initially determined that the Cottle definition is the correct meaning of \"growing crop\" as that term is used under former article XIII, section 1 of the California Constitution. (Stribling's Nurseries, Inc., supra, at p. 762.) This court then stated: \"We find no case overruling either Cottle or Jackson & Perkins. Therefore the language `growing crops' in article XIII, section 1, of the Constitution does not include growing nursery stock unless it meets the Cottle test of annual planting or sowing or an annual harvesting. In this case, plaintiff [nursery] has not contended that nursery stock meets this requirement.\" (Ibid., italics added.) Based upon the fact that nursery stock did not constitute a growing crop, this court invalidated a statute attempting to impermissibly exempt such plants from taxation. (Id., at p. 763.)\nIn the case before us, we are called upon to address the question not examined in Stribling's Nurseries \u0097 whether turf grass satisfies the Cottle definition or more closely resembles taxable nursery stock. We are of the opinion that turf grass falls outside the \"growing crop\" exemption for the following reasons.\nFirst, turf grass has no requirement that it be annually planted or harvested.[11] Uncontradicted testimony established that Nunes' bluegrass is a perennial. Nonetheless, the grass is harvested within one year because of economic and management practice. Although susceptibility to insects and weeds increases with time, Mr. Nunes conceded that grass can be maintained indefinitely if cared for in the proper manner. The annual harvesting is dictated by Nunes' attempt to manage production around the orders of its customers. These circumstances do not amount to the annual requirement specified in the decisional law.\nAt the request of the executive secretary of the State Board of Equalization, the annual requirement test was extensively discussed in a 1974 Attorney General's opinion. (See 57 Ops.Cal.Atty.Gen. 506 (1974).) This opinion analyzed the interrelationship between industry practice and annual planting/harvesting in the following manner: \"It has been stated in the Assessors' Handbook AH 567, at page 2, that *867 `when, as an industry practice, a perennial plant is removed annually following the harvest of its crop, the plant should be exempted along with the crop.' This view would appear to be correct to the extent that the industry practice demonstrates the necessity for an annual planting or sowing, or an annual harvesting. Where a particular specie of plant must be treated as an annual by California farmers because of climatic conditions or the physical characteristics of the plant itself, we are of the view that it is a `growing crop' while growing on the grower's lands even though such plant is technically classified botanically as a perennial. For example, tomato vines are classified botanically as perennials and are so treated in other countries, but are regarded as annuals in California because of climatic conditions. Tomatoes are planted or sown annually and are destroyed at the end of the growing season since they do not last beyond the first hard frost in the fall. Moreover, such plants are usually physically spent after one season and must be destroyed in order that a new crop may be planted the following year. This reasoning does not apply, however, to plants which are not grown for harvesting at all but are grown for sale by nurseries as living plants for transplanting. Nor would it apply to perennial plants not grown for sale as living plants which are for convenience or economic reasons destroyed at the end of the season. The fact that there may be an industry practice to destroy the remaining plants and root stock, either because they were not seasonably sold or because the grower can more profitably start new plants from bulbs, seeds, or cuttings, which plants will be sold during the following year, would not serve to make the plants `growing crops' within the meaning of the Constitution. This is particularly true where there is no element of harvesting, or the plants are personal property held for sale as living plants, ..., or there is no necessity for destroying the plant other than the fact that it is no longer readily salable. In other words, just because the nursery industry finds it convenient or profitable to destroy a perennial plant at the end of the growing season does not mean that they have met the Cottle v. Spitzer test.\n\"This is not to say that the consistent practice of the California agricultural industry as a whole should not be examined in a particular case. Such practice may evidence the fact that a particular specie of plant must be treated as an annual because of its nature or because the environment requires an annual planting, sowing, or harvesting. If this is so, such plant should be exempted as a `growing crop' while growing on the grower's lands even though it may be botanically classified as a perennial.\" (Id., at pp. 506, 512 (1974), italics added.) Although we are *868 not bound by this interpretation \u0097 which treats perennials as annuals if climatic conditions or physical characteristics of the plant so mandate \u0097 we are of the view that it coincides with judicial guidelines. Both rationales adopted in Cottle expressed the opinion that perennial plants were probably not contemplated to be growing crops. As in Miller, turf grass resembles alfalfa which, under proper maintenance, can survive indefinitely. The grass is \"harvested\" annually because of managerial practice and carefully planned economic production, even though it is a perennial capable of longer growth. The Attorney General's opinion makes a rational demarcation \u0097 perennials should be classified as annuals only due to climatic or physical limitations. Turf grass does not require annual sowing or harvesting for either of these reasons. Although classification does not revolve solely upon the plant's botanical status, we do not believe economic demand and management techniques should dispositively determine satisfaction of the \"annual requirement\" test.\nNunes contends that turf grass' eligibility as a growing crop should be based upon the fact it is grown and harvested with the aid of conventional farm practices. In our view this circumstance is not determinative. The rose bushes in Jackson & Perkins were harvested by a tractor-like machine and still found to be personalty for taxation purposes. Further, turf grass is more accurately gathered so that the entire plant can be subsequently transplanted rather than harvested for its product (as with a crop of grain, grass, or cut flowers). (See Cottle v. Spitzer, supra, 65 Cal. at p. 462 (opn. of J. Belden) (crop is \"`\"that which in ordinary husbandry was to be severed from the land when utilized\"'\"); 57 Ops.Cal.Atty.Gen. 506, 513 (1974) (\"`Harvesting is the time when crops of grain or grass are gathered, also the gathering of crops of any kind.'\")) Thus, \"harvesting\" techniques are not dispositive of the classification of turf grass, since it must of biological necessity be attached to the land for nourishment. (Cf. Story v. Christin, supra, 14 Cal.2d at pp. 595-596.)[12]\n*869 Second, turf grass is not a growing crop because of its similarity to nursery stock in trade which is taxable as personal property. Story, Jackson & Perkins, and Stribling's Nurseries stand for the proposition that nursery stock sold for subsequent transplanting does not constitute a growing crop. Story reasoned that the attachment of nursery plants to the land was inconsequential in light of the purpose to sell the stock to buyers. (Story v. Christin, supra, 14 Cal.2d at p. 596.) In Jackson & Perkins, both one- and two-year rose bushes grown as nursery stock were deemed to be personalty falling outside the growing crop exemption. (Jackson & Perkins Co. v. Stanislaus County Board of Supervisors, supra, 168 Cal. App.2d at pp. 559-560, 563.) Finally, Stribling's Nurseries articulated that nursery plants were not growing crops unless they satisfied the Cottle definition. (Stribling's Nurseries, Inc. v. County of Merced, supra, 232 Cal. App.2d at p. 762.) Mr. Nunes clearly testified that his bluegrass is sold for ultimate transplanting by customers who desire lawns. In fact, sowing and harvesting practices are centered around the demand of customers. Since only management practices dictate annual harvesting, the grass is in the same position as the nursery stock taxed as personalty under the case law.\nThis result is also supported by the conclusion from the 1974 Attorney General's opinion. After observing that turf grass is a perennial and gathered with its roots intact, the opinion noted: \"While there is a shade of distinction between nursery plants grown by nurseries for sale and transplanting and turf grass which is grown for sale and transplanting, the distinction is in law without a difference. A turf grower is simply another kind of nursery grower. This is a relatively new industry, but ... [there is] no legal difference between a turf grower and a nursery grower.\" (57 Ops.Cal.Atty.Gen. 506, 516 (1974), italics added.) As we have indicated, although the Attorney General's opinion is not binding on this court, its analysis is cogent and applicable. We believe that turf growers more closely resemble merchants than farmers for taxation purposes; thus, they are not entitled to the benefit of the growing crop exemption.\nNunes then contends that the annual requirement is met because there is a yearly destruction of the root stock at harvesting. This argument is likewise answered by the Attorney General's opinion, which indicated that: \"... the annual destruction of the root stock of perennial grasses by the turf grass farmer is not the deciding factor in determining whether the plant is an annual or a perennial .... turf grass is a perennial, both in the hands of the grower and in the hands of his customer *870 who buys it and transplants it to make a lawn. Indeed, if the purchaser of turf grass were to find that his lawn was an annual when he expected to have a permanent lawn, his disappointment would be great.\" (Id., at p. 517.)\nNunes finally contends that our decision in Stribling's Nurseries compels a recognition that some types of nursery stock (such as turf grass) can satisfy the Cottle test. While this court did indicate language to this effect, such dictum must be read carefully. The 1974 Attorney General's opinion did just that in the following passage: \"The language of the Stribling's Nurseries case cannot be extended by implication to exempt nursery plants which are grown for sale, in view of the holding that they are not crops in Jackson & Perkins Co. v. Stanislaus County Board of Supervisors, supra, 168 Cal. App.2d 559 ... [this does not] imply that a growing crop can never be personal property in the hands of the grower ... when nursery plants are in the hands of the grower, held for sale by him for transplanting as living plants, they are not growing crops but are personal property which falls outside the `growing crops' exemption. Indeed, as personal property these plants become subject to the business inventory exemption (\u00a7\u00a7 129 and 219, Rev. & Tax. Code...). While it has been argued that nurserymen are subject to many of the same problems as ordinary farmers, i.e., plant diseases, blights, droughts, etc., ... there is a reasonable basis for different classifications between them where the business of a nursery is raising the plants for sale, whereas the business of farmers and other growers is to plant, raise, and harvest the crops produced from the plants ... it is for this reason that section 219 includes the stock in trade of nurserymen as `business inventories,' whereas there is no reason to further exempt growing crops in the hands of the farmer since they are not taxable at all prior to harvest.\" (Id., at p. 515, italics added.) In Stribling's Nurseries, this court noted that Jackson & Perkins had continuing viability. We believe that the Attorney General's opinion correctly interprets our prior decision and points out justification for treating turf growers as merchants and that its analysis shows why Nunes' bluegrass should be treated as nursery stock.\nAppellant state Controller and respondent Stanislaus finally contend that turf grass is not a \"growing crop\" because it has an ascertainable value on any given lien date (i.e., sales price set by the nurseryman or grower). These parties apparently rely upon Judge Spencer's opinion in Cottle, which suggests that a growing crop \"is not sufficiently tangible *871 to be treated as property....\" (Cottle v. Spitzer, supra, 65 Cal. 456, 460.) We do not believe the \"ascertainable value\" language is the proper standard for determining a growing crop under Cottle. Decisional law has established that the annual requirement test is the definition given imprimatur in Cottle. Moreover, if this were a prong of the test, turf grass might qualify in light of its intangible nature during maturation. Since most plants are somewhat intangible during their growth, we do not believe this to be the distinguishing factor in the legal definition of a \"growing crop.\"\nAlthough courts will attempt to sustain clarifying legislation, we conclude that section 202.1 attempts to inject a category of growth which is beyond that intended by the constitutional language in article XIII, section 3, subdivision (h). Turf grass does not satisfy the Cottle test and is remarkably similar to nursery stock falling outside the growing crop exemption.[13] For these reasons, we find section 202.1 invalid as an excessive exercise of legislative authority.\nThe judgments in 5 Civil No. 4242 against defendant Kern and cross-defendant Kenneth Cory, Controller of the State of California, are reversed.\nThe judgment in 5 Civil No. 4410 against Nunes is affirmed.\nHanson (P.D.), J., and Conn, J.,[*] concurred.\nOn December 3, 1980, the opinion was modified to read as printed above.\nNOTES\n[1] All code references are to the Revenue and Taxation Code unless otherwise indicated.\n[2] Mr. Nunes stated that turf grass had been raised as quickly as four and one-half months in some instances. He also indicated that turf grass may not reach maturity in some states until around three years after planting.\n[3] Under section 219, subdivision (a) (3), 50 percent of the assessed value of business inventories is exempt from taxation for the inclusive period between the 1974-1975 and 1979-1980 fiscal years. However, for fiscal years after 1979-1980, business inventories are completely exempt from taxation. (\u00a7 219, subd. (a) (4).) In contrast, growing crops were completely exempt from taxation during the fiscal years in question. (See 57 Ops.Cal.Atty.Gen. 506, 520 (1974).)\n[4] In the revised assessor's handbook issued in December 1974, nursery stock was defined as including (1) plants that are cultivated and propagated for sale, (2) plants that are cultivated and propagated to produce products which are sold, and (3) products of the producing plants. Turf grass was administratively interpreted as being in the first category.\n[5] Specifically, Florence testified: \"Well, the tomatoes that were discussed in earlier testimony, I treated as an auual [sic] in California because of the climatic conditions. The weather that we have in California will kill a tomato plant after it has reached the first frost.\"\n[6] (See Stats. 1974, ch. 157, \u00a7 2(a), p. 303.)\n[7] We note the findings of fact in each of the cases, among other things, declared that: \"[a] These turf grasses on the real property of [Nunes] are plants that are sown, cultivated and harvested by [Nunes] solely for the purpose of sale to and transplanting by customers of [Nunes].\n\n\"[b] The planting and sowing and harvesting of the turf grasses by [Nunes] all occur within a one year period as necessitated and required by the economics and commercial necessities of the production of such turf grass and as also required to control damage to and loss of quality of such turf grasses due to disease and noxious weed infestations.\n\"[c] Neither the botanical nature nor climatic conditions require turf grasses to be annually sown or planted.\n\"[d] Neither the botanical nature nor climatic conditions require turf grasses to be annually harvested.\n\"[e] The turf grasses grown by [Nunes] are held in the ground awaiting orders from customers, and upon such order are harvested.\n\"[f] Subsequent to harvesting the turf grass, [Nunes] plants a new crop of turf grass from seed, which is in turn harvested within a one year period.\n\"[g] Turf grasses grown for sale and transplanting by Nunes Turfgrass are botanically classified as perennials.\"\n[8] The exemption is presently found in article XIII, section 3, subdivision (h), which states: \"The following are exempt from property taxation: ... (h) Growing crops.\"\n[9] For two other states which have also adopted the \"annual requirement\" definition for growing crop see Miethke v. Pierce County (1933) 173 Wash. 381 [23 P.2d 405]; Kuehn v. City of Antigo (1909) 139 Wis. 132 [120 N.W. 823].\n[10] Miller was subsequently utilized to sustain the conclusion that natural grasses used for grazing forage did not constitute a growing crop. (El Tejon Cattle Co. v. County of San Diego (1966) 64 Cal.2d 428, 431 [50 Cal. Rptr. 546, 413 P.2d 136].) The Supreme Court in El Tejon Cattle stated, \"... `natural grasses,' does not require annual or seasonal planting; it may therefore be appropriately likened to alfalfa, a perennial plant considered in Miller ... and held not to fall within the constitutional exemption.\" (Id., at p. 431.)\n[11] We note that both courts found that neither the botanical nature nor climatic conditions required turf grasses to be annually sown, planted, or harvested.\n[12] It is noteworthy that the State Board of Equalization treats perennial plants grown for their products (rather than for their entire plant) as annuals for the \"growing crop\" exemption. For example, the board has stated: \"The chrysanthemum is grown as a perennial plant in the home garden. However, in commercial cut-flower operations, the chrysanthemum is treated as an annual plant. The rooted cuttings mature in 12 to 14 weeks, at which time flowers are harvested and the plant is discarded. Chrysanthemums grown for cut-flower production in this manner qualify as exempt `growing crops,' i.e., both the unsevered flowers and the producing plants are exempt.\" (Cal. State Board of Equalization, Assessor's Handbook, Assessment of Nursery Stock, AH 567 (Jan. 1974) p. 12, italics added; see also 57 Ops.Cal.Atty.Gen. 506, 514 (1974).)\n[13] As noted earlier, all counties but Ventura have deemed turf grass to be taxable as personal property and as falling outside the growing crop exemption. The administrative treatment of turf grass adopted by the counties herein is entitled to great weight. (Stribling's Nurseries, Inc. v. County of Merced, supra, 232 Cal. App.2d at p. 763.) Since it was not an erroneous interpretation, there is no reason to not adhere to the administrative classification of turf grass as personal property.\n[*] Assigned by the Chairperson of the Judicial Council.\n"} -{"text": "\n575 S.W.2d 259 (1978)\nEdward A. DEARBORNE, Petitioner,\nv.\nSTATE of Tennessee, Respondent.\nSupreme Court of Tennessee.\nAugust 28, 1978.\nRehearing Denied October 9, 1978.\n*260 Robert E. Burch, White, Regen & Burch, Dickson, for petitioner.\nBrooks McLemore, Jr., Atty. Gen., David L. Raybin, Robert L. DeLaney, Asst. Attys. Gen., Nashville, W.B. Lockert, Jr., Dist. Atty. Gen., Ashland City, J. Kenneth Atkins, Asst. Dist. Atty. Gen., Dickson, for respondent.\n\nOPINION\nHENRY, Chief Justice.\nIn this criminal action, wherein we have granted certiorari to the Court of Criminal Appeals, we attempt to clarify the practice and procedure governing the availability of the common law writ of certiorari (1) to review the interlocutory action of the Court of Criminal Appeals in declining to entertain the common law writ to a trial court and (2) its availability in any appellate court to review the action of a trial court in an interlocutory holding.\n\nI.\n\nHistory of the Lawsuit\nPetitioner made a pre-indictment application to the District Attorney General for pre-trial diversion pursuant to \u00a7 40-2105, et seq., T.C.A. Upon its denial, a petition for certiorari was filed pursuant to \u00a7 40-2108, T.C.A. When that petition was denied by the trial court, petitioner prayed for and was granted an appeal to the Court of Criminal Appeals.\nThe State moved to dismiss the appeal, contending that it was interlocutory and that such appeals do not lie in criminal cases. The Court of Criminal Appeals sustained the State's motion; however, it entered an order \"treat[ing] the pleadings as a petition for certiorari\" and setting the case for hearing before another panel of that Court.\nThereafter, a second panel of the Court of Criminal Appeals held that \"certiorari was improvidently granted [there being] no provision in the statutes of this state for an appellate review for an Interlocutory Order entered in a criminal case.\"\nThe petitioner then presented his petition for the common law writ to this Court and assigned errors allegedly committed by the Court of Criminal Appeals. Thus, we have a petition for common law certiorari to the Court of Criminal Appeals to review the action of that Court in denying the common law writ.\n\nII.\n\nMay the Supreme Court Entertain Petition for Common Law Writ to Review the Denial of the Common Law Writ\nThis precise question came before this Court in Cole v. State, 223 Tenn. 20, 442 S.W.2d 246 (1969). There the trial Court overruled a plea in abatement to the indictments and petitioner sought review by petition for certiorari filed in the Court of Criminal Appeals. That Court denied the writ; whereupon, petitioner filed his petition in this Court for the common law writ. Mr. Justice Humphreys wrote for a unanimous court:\nWhile it is true as argued the writ of certiorari inheres in our common law system and has constitutional protection and sanction, Tennessee Constitution, Article 6, \u00a7 10; Conners v. City of Knoxville, 136 Tenn. 428, 189 S.W. 870; Clements v. Roberts, 144 Tenn. 129, 230 S.W. 30, it is also fundamental that the jurisdiction of this Court is what the legislature declares it to be. Tennessee Constitution, Article 6, \u00a7 2; Hundhausen v. U.S. Marine Fire Ins. Co., 52 Tenn. 702, 703; Chattanooga v. Keith, 115 Tenn. 588, 94 S.W. 62; Memphis Street R. Co. v. Byrne, 119 Tenn. 278, 104 S.W. 460. So that while the common law and constitutional power of certiorari inheres in this Court at the common law and resides here under the *261 Constitution, it must be exercised in accordance with the legislative mandate as long as that mandate does not frustrate and render impotent the constitutional purpose and function of this Supreme Court.\nWith respect to this the legislature has by T.C.A. \u00a7 16-451, provided that judgments of the Court of Criminal Appeals are final judgments which may be reviewed by this Court only by certiorari. (T.C.A. \u00a7 16-451), and (T.C.A. \u00a7 16-452). No provision is made for this Court to review interlocutory orders of the Court of Appeals made with reference to interlocutory orders of a trial court. (Footnotes omitted.) 223 Tenn. at 22-23, 442 S.W.2d at 247.\nHad there been no further pronouncements this would have settled the law. However, three years later the Court, without even alluding to Cole, reached a contrary conclusion in State v. Dougherty, 483 S.W.2d 90 (Tenn. 1972). The procedural background was that the trial judge had granted the defendant's motion for the discovery of certain evidence. The State sought review in the Court of Criminal Appeals by common law writ. When the Court of Criminal Appeals denied the writ, a petition was filed in this Court. The defendant moved to dismiss \"on the ground this Court has no jurisdiction to review an interlocutory order of the Court of Criminal Appeals.\" 483 S.W.2d at 91-92. Responding to this insistence, the Court said:\nHowever, we are of the opinion the Court of Criminal Appeals acted arbitrarily and illegally in dismissing the petition.\nTherefore, the writ of certiorari issuing herein is referable to T.C.A. Section 27-801 which authorizes that writ in cases where an inferior tribunal \"has exceeded the jurisdiction conferred, or is acting illegally, when, in the judgment of the court, there is no other plain, speedy, or adequate remedy.\" (Citations omitted.) 483 S.W.2d at 92.\nThe Court, accordingly, granted certiorari and remanded to the Court of Criminal Appeals.\nIf this case left any doubt that the Court had departed from Cole, it was removed by our recent opinion in Whitwell v. State, 520 S.W.2d 338 (Tenn. 1975). There a defendant, who had undergone a criminal trial at the conclusion of which the trial court had declared a mistrial, filed a motion seeking a judgment of not guilty based upon his insistence as to the meaning and effect of the jury verdict.\nThe trial judge denied the motion. Whitwell filed his petition for the common law writ in the Court of Criminal Appeals, where a divided court held \"that the writ of certiorari is not available to review said order of the trial judge; that the trial judge was not acting illegally, nor beyond his jurisdiction.\" 520 S.W.2d at 341.\nWe granted certiorari, reversed the Court of Criminal Appeals and remanded to the trial court for the entry of a judgment dismissing all charges. Our holding that the trial court was guilty of a \"fundamental illegality,\" was based largely on McGee v. State, 207 Tenn. 431, 340 S.W.2d 904 (1960).\nIt is apparent from these two cases that Cole v. State should no longer be considered to be authoritative. Where the conditions of the statute (\u00a7 27-801), as construed by our decisional law, are met, this Court has the discretion to entertain a petition for the common law writ to review the action of the Court of Criminal Appeals in granting or denying such a writ.\n\nIII.\n\nApproved Practice\nNotwithstanding the above conclusions, we think the proper practice is to petition the Court of Criminal Appeals for the writ and, upon its denial, to petition this Court for the writ, assigning as error the action of the trial court, and reciting fully the fact of the filing of the former petition and the action taken thereon by the Court of Criminal Appeals.\nThe procedure is governed by Rule 10 of this Court and we emphasize that all petitions for the common law writ must be \"accompanied by an assignment of errors, *262 and a brief [conforming to Rules 14 and 15] and a certified transcript of the record.\"\nThe phrase \"certified transcript of the record\", as used in this rule means (a) the technical record certified by the Clerk and (b) a transcript of the testimony certified by the court reporter or agreed upon by counsel. The solemnities surrounding a Bill of Exceptions have no application. In the event of a controversy between counsel as to the accuracy of the transcript so certified, the conflict will be resolved by the trial judge.\nCertiorari is not a writ of right. To invoke the discretionary jurisdiction of this Court, there must be strict compliance with these rules.\n\nIV.\n\nPre-trial Diversion\nIn our recent case of Pace v. State, 566 S.W.2d 861 (Tenn. 1978), we upheld the constitutionality of our pre-trial diversion statutes, \u00a7 40-2105, T.C.A.\nImplicit in that holding and self-evident from the statutes is the notion that they create a statewide statutory scheme for the diversion of certain classes of offenders from the normal criminal process.\nThe judgment entered in this case in the trial court recites in pertinent part:\nThat Attorney General's office has no facilities within said office to enforce the provisions of T.C.A. \u00a7 40-2105.\nThat the provisions of T.C.A. \u00a7 40-2105 cannot be implemented in Dickson County through existing facilities.\nThat the defendant is qualified for the program and should be granted pre-trial diversion if the facilities were available.\nThe judgment shows on its face that petitioner is not being given the benefit of the \"law of the land\" provision of our state constitution, Article I, Sec. 8. This provision is synonymous with the \"due process\" clause of the Fifth and Fourteenth Amendments to the Constitution of the United States. Daugherty v. State, 216 Tenn. 666, 393 S.W.2d 739 (1965).\nThis conclusion, however, assumes the applicability of our pre-trial diversion statutes, prior to indictment. This determination requires an analysis of the statute in the light of our historic concept of separation of powers and forces us to focus upon the nature of the office of District Attorney General. The concurring opinion in Pace discusses this matter in some detail and concludes that \"the District Attorney General is an officer of the executive department.\" 566 S.W.2d at 866. It further focuses on the nature of the prosecutorial discretion vested in the District Attorney General. In this regard the concurring opinion reads as follows:\nHe or she is answerable to no superior and has virtually unbridled discretion in determining whether to prosecute and for what offense. No court may interfere with his discretion to prosecute, and in the formulation of this decision he or she is answerable to no one. In a very real sense this is the most powerful office in Tennessee today. Its responsibilities are awesome; the potential for abuse is frightening. Indeed, as an incident of separation of powers, the courts may not interfere with the discretion of the District Attorney in their control over criminal prosecutions. See United States v. Cox, 342 F.2d 167, at 171 (5th Cir.1965). This prosecutorial discretion is deeply rooted in the common law and is a vital part of our common-law tradition. But this discretion has its outer limits. When the charging process \u0097 in this state the indictment \u0097 has been completed, the disposition of the charge becomes a judicial function.\nUnder Tennessee law prior to the adoption of the pre-trial diversion statutes, there were two basic methods for the termination of a criminal prosecution, viz:\na) by verdict or judgment\nb) by the entry of a nolle prosequi.4\n4 The entry of a nolle, of course, does not bar further prosecution under a new indictment. State ex rel. Hobbs v. Murrell, 170 Tenn. 152, 93 S.W.2d 628 (1936).\n\n*263 Pre-trial diversion is a third method of termination; but it is obvious that it is not a termination pursuant to a finding of guilt or innocence. It does, however, partake of the nature of a nolle prosequi. Therefore, it is appropriate that we examine the nature of the District Attorney General's involvement in cases wherein a criminal case is nolled.\nAs is pointed out in Commonwealth v. Kindness, 247 Pa.Super. 99, 371 A.2d 1346 (1977):\nThe authorities are virtually unanimous that the historical power to \"nol pros\" belonged at common law solely to the Attorney General and remains an exclusive prosecutorial power in the absence of a state constitutional or statutory provision to the contrary. 371 A.2d at 1349.5\n5 In Kindness, the Court quotes from a Texas case as follows: \"How firmly the rule vesting the exclusive power in the prosecuting officer to dismiss a case was established at common law is forcibly and effectively illustrated in a conversation relating to the commitment for seditious language of certain persons belonging to a sect called `Prophets.' Lacy, one of the friends of the prisoners committed, assumed to intercede for them, and upon his conference with Lord Holt the following colloquy is reported:\n\"Lacy: `I come to you, a prophet from the Lord God, who has sent me to thee, and would have thee grant a nolle prosequi for Mr. Atkins, His servant, whom thou hast cast into prison.' Chief Justice Holt: `Thou art a false prophet, and a lying knave. If the Lord God had sent thee, it would have been to the Attorney General, for He knows that it belongeth not to the Chief Justice to grant a nolle prosequi, but as Chief Justice, I can grant a warrant to commit thee to bear him company.' 2 Campbell's Lives of the Chancellors, 173.\"\nThis firmly entrenched common-law rule has been abrogated in Tennessee. Sec. 40-2101, T.C.A., provides:\nAfter indictment found, no criminal prosecution can be dismissed, discontinued or abandoned without leave of the court.\nIn State v. Costen, supra, [State v. Costen, 141 Tenn. 539, 213 S.W. 910] this Court, citing 12 Cyc. 374, defined a nolle prosequi as being\na formal entry of record by the attorney-general by which he declares that he will no longer prosecute the case. 141 Tenn. at 545, 213 S.W. at 911.\nAfter so defining it the Court stated:\nThe judge has no participation in it, except to give his consent to such order, and permit its entry upon the record. We are not unmindful of the fact that this power has been exercised by the attorneys-general in this State for many years, but the right to so exercise it is not conferred by the Constitution. The legislature, therefore, has the power to take it away, and when it does so it is not an interference, in a constitutional sense, either with the judicial power of the State, or the ministerial duties of the attorneys-general. With the policy of the statute neither we nor the attorneys general have anything to do. It is a plain mandate of the legislature to which we must all bow. (Emphasis supplied). 141 Tenn. at 545, 213 S.W. at 911.\nIt is obvious under Sec. 40-2101, T.C.A., and Costen that when a criminal prosecution has gone beyond the charging stage, that is to say, after indictment is returned, the matter has left the domain of the prosecutor and has entered into the realm of the court. See also State ex rel. Hobbs v. Murrell, 170 Tenn. 152, 93 S.W.2d 628 (1936). This case is authority for the general proposition that a conditional nolle may be entered and does not become final until the condition is performed. See also 22A C.J.S. Criminal Law \u00a7 461 (1961). Again the similarity between a nolle and pre-trial diversion is evident.\nWe approve these conclusions as set forth in the concurring opinion in Pace.\nWe hold that pre-trial diversion is not a mere extension of the charging process. The statutory scheme may not be invoked until after indictment.[1] The plan of *264 diversion, or the denial thereof, follows indictment and comes after the prosecutor has fully discharged all discretionary functions and after the prosecutorial die has been cast. Once committed to the prosecution, the case is before the Court for disposition. Until that time the trial judge is without jurisdiction and the matter is exclusively within the domain and discretion of the District Attorney General.\nThe statutory scheme of pre-trial diversion does not make it entirely clear that this program does not come into play until after indictment, but this inheres in the very nature of the process. It is judicial in character in that it involves a procedural alternative to prosecution and a disposition by normal methods.\nIf the statute be construed so as to apply before indictment, the result would be an unwarranted invasion of the authority and power of the District Attorney General, an executive officer, whose prosecutorial discretion may not be abridged during the charging process, i.e. prior to indictment.\nThe result is that petitioner was not eligible for pre-trial diversion.\nWe affirm both the trial judge and the Court of Criminal Appeals but only as to results. This action is remanded to the Circuit Court at Charlotte. Should the petitioner be indicted, he is at liberty to seek to invoke the pre-trial diversion statute, and, at that time, the trial judge may want to reconsider whether Dickson County has the facilities to service this form of pre-trial probation of the petitioner, who \"should be granted pre-trial diversion if the facilities were available.\"\nAffirmed and remanded.\nFONES, COOPER, BROCK and HARBISON, JJ., concur.\n\nOPINION ON PETITION TO REHEAR\nHENRY, Chief Justice.\nOn petition to rehear the petitioner asserts that we overlooked the fact that he had already been indicted; however, he concedes that \"[N]o indictment appears in the Technical Record.\"\nWe decide cases and controversies on the basis of the record as presented to us for our consideration, and not as they might, or should, have been presented.\nThe petition is respectfully overruled.\nIf, in point of fact, petitioner has been indicted, the end result is that petitioner may invoke the pre-trial diversion statute, either by further action under the pending petition, or by new petition, and the matter will stand for consideration by the trial judge, guided by the views and holdings as set forth in our original opinion.\nFONES, COOPER, BROCK and HARBISON, JJ., concur.\nNOTES\n[1] Prior to indictment the District Attorney General may, in his sole and unreviewable discretion, sponsor an informal pre-trial program, but such a program would have no statutory sanction.\n"} -{"text": "ALD-180 NOT PRECEDENTIAL\n\n UNITED STATES COURT OF APPEALS\n FOR THE THIRD CIRCUIT\n ___________\n\n No. 11-1373\n ___________\n\n CHRIS JONES,\n Appellant\n\n v.\n\nBURLINGTON COUNTY BOARD OF CHOSEN FREEHOLDERS; JUEL COLE, The\n Warden of the Burlington County Detention Center; THE COMMISSIONER OF THE\n DEPARTMENT OF CORRECTIONS FOR THE STATE OF NEW JERSEY; DR.\nEVANS the Medical Doctor of B.C.D.C. all defendants are sued in their individual and\n professional capacity\n ____________________________________\n\n On Appeal from the United States District Court\n for the District of New Jersey\n (D.C. Civil No. 07-5065)\n District Judge: Honorable Renee M. Bumb\n ____________________________________\n\n Submitted for Possible Dismissal for Lack of Jurisdiction,\n Possible Summary Action Pursuant to Third Circuit LAR 27.4 and I.O.P. 10.6, or\n Possible Dismissal Pursuant to 28 U.S.C. \u00a7 1915(e)(2)(B)\n May 5, 2011\n Before: SCIRICA, HARDIMAN and VANASKIE, Circuit Judges\n\n (Opinion filed: May 19, 2011)\n _________\n\n OPINION\n _________\n\nPER CURIAM\n\n Pro se appellant Chris Jones appeals the District Court\u2019s order granting summary\n\fjudgment to all defendants and the Court\u2019s subsequent order denying his motion for\n\nreconsideration under Rule 59(e) of the Federal Rules of Civil Procedure. We have\n\njurisdiction pursuant to 28 U.S.C. \u00a7 1291.1 We exercise plenary review over the District\n\nCourt\u2019s order granting summary judgment, State Auto Prop. & Cas. Ins. Co. v. Pro\n\nDesign, P.C., 566 F.3d 86, 89 (3d Cir. 2009), and review its order denying the motion for\n\nreconsideration for abuse of discretion, Le v. Univ. of Pa., 321 F.3d 403, 406 (3d Cir.\n\n2003). Because this appeal presents no substantial question, we will summarily affirm\n\nthe District Court\u2019s judgment. See 3d Cir. L.A.R. 27.4; I.O.P. 10.6.\n\n Jones filed a complaint raising several claims under 42 U.S.C. \u00a7 1983 concerning\n\nthe conditions of the Burlington County Detention Center (\u201cthe Detention Center\u201d),\n\nwhere he was previously held as a pretrial detainee while awaiting trial. Jones\u2019s primary\n\nclaim concerns an incident in which he was attacked, apparently with no advance\n\nwarning or provocation, by Uriah Hill, a state inmate. Jones alleges that the defendants\n\n(who will be treated collectively in this opinion) violated his due process rights by failing\n\nto protect him from Hill. The defendants further violated his rights, he contends, by\n\n 1\n Although Jones\u2019s notice of appeal was filed more than 30 days after entry of the\nDistrict Court\u2019s order granting summary judgment to the defendants, his appeal is\nnevertheless timely because the Court\u2019s order explains in full its reasons for denying\nJones\u2019s motion, and is thus not a separate judgment under Rule 58(a) of the Federal Rules\nof Civil Procedure. Accordingly, the judgment is deemed \u201centered\u201d for purposes of\nFederal Rule of Appellate Procedure 4(a) on the date when \u201c150 days have run from\nentry of the judgment or order in the civil docket.\u201d Fed. R. App. P. 4(a)(7)(A)(ii).\nJones\u2019s notice of appeal was filed within 30 days after that 150-day period, and we can\ntherefore entertain the appeal. See LeBoon v. Lancaster Jewish Cmty. Ctr. Ass\u2019n, 503\nF.3d 217, 224 (3d Cir. 2007); see also Clymore v. United States, 415 F.3d 1113, 1116-17\n& 1117 n.5 (10th Cir. 2005).\n 2\n\fproviding inadequate medical care following the attack.\n\n The defendants answered the complaint, took Jones\u2019s deposition, and filed a\n\nmotion for summary judgment. Jones did not respond to this motion, and the District\n\nCourt, after performing an independent evaluation, granted judgment to the defendants.\n\nJones then asked the District Court to \u201creopen\u201d the case; according to Jones, he had been\n\nin lock-up and unable to file a responsive brief. The District Court granted Jones\u2019s\n\nmotion and ordered him to file a brief within 30 days. Jones then filed a one-page\n\ndocument that reiterated the allegations from his complaint without elaboration. The\n\nCourt treated this filing as a motion for reconsideration and denied it. Jones then\n\nappealed to this Court.\n\n We agree with the District Court\u2019s analysis. Because Jones was a pretrial detainee\n\nwhen he was held at the Detention Center, his challenges to the conditions of his\n\nconfinement must be prosecuted under the Due Process Clause of the Fourteenth\n\nAmendment. See Bell v. Wolfish, 441 U.S. 520, 535-36 (1979). Under the Due Process\n\nClause, \u201cthe proper inquiry is whether [the challenged] conditions amount to punishment\n\nof the detainee.\u201d Id. at 535.\n\n Jones first claims that the defendants violated his due process rights by failing to\n\nprotect him from Hill\u2019s attack. See generally Hamilton v. Leavy, 117 F.3d 742, 746 (3d\n\nCir. 1997). For such a claim, Jones must show that the defendants acted with \u201cdeliberate\n\nindifference\u201d to his health and safety. Colburn v. Upper Darby Twp., 946 F.2d 1017,\n\n1024 (3d Cir. 1991); see also Caiozzo v. Koreman, 581 F.3d 63, 71-72 (2d Cir. 2009).\n 3\n\fHowever, Jones has made no such showing. In his deposition, Jones acknowledged that\n\nhe had never informed the defendants that he feared that he would be attacked by Hill,\n\nand he has presented no evidence that the defendants were independently aware that Hill\n\nposed a threat to him or was generally prone to violence. To the contrary, the undisputed\n\nevidence establishes that this was essentially a random attack. Jones has therefore failed\n\nto show that the defendants acted with deliberate indifference. See Farmer v. Brennan,\n\n511 U.S. 825, 847 (1994) (holding that a prison official will be liable under the\n\ndeliberate-indifference standard \u201conly if he knows that inmates face a substantial risk of\n\nserious harm and disregards that risk\u201d).\n\n Jones also contends that it was improper for the defendants to house him, as a\n\npretrial detainee, in the same facility as Hill, who had already been convicted of a crime.\n\nWe conclude that in light of Jones\u2019s particular characteristics (as established by the\n\nundisputed evidence), this placement did not violate the Due Process Clause. The\n\ndefendants presented evidence that Jones had been housed in the maximum-security\n\nDetention Center because he was perceived to be a special security risk. See generally\n\nBell, 441 U.S. at 546 n.28 (holding that, in institution that held both types of individuals,\n\n\u201c[t]here is no basis for concluding that pretrial detainees pose any lesser security risk than\n\nconvicted inmates\u201d). Jones had previously been convicted numerous times (seven times\n\nas a juvenile and eight times as an adult), often for violent offenses, and was held in the\n\nDetention Center pending trial on a charge of aggravated assault on a law-enforcement\n\nofficer. In these circumstances, it was permissible for the defendants to house Jones in\n 4\n\fthe Detention Center. See Jones v. Diamond, 636 F.2d 1364, 1374 (5th Cir. 1981)\n\n(concluding that while the \u201cconfinement of pretrial detainees indiscriminately with\n\nconvicted persons\u201d could be unlawful, \u201cif a particular pretrial detainee has a long record\n\nof prior convictions or is likely to be violent, imposition of greater security measures is\n\nwarranted\u201d).\n\n Jones also posits that the assault was caused in part by the fact that the Detention\n\nCenter was overcrowded. However, even setting aside Jones\u2019s failure to show that the\n\nprison truly was overcrowded under the relevant constitutional standards, he has\n\npresented no evidence to link the alleged overcrowding to his injuries. At most, he has\n\nclaimed that the overcrowding created a generally unpleasant atmosphere; in a similar\n\ncase, we held that \u201cany possible connection between the conditions at the annex and the\n\nassault is far too attenuated to permit a recovery.\u201d Best v. Essex Cnty., N.J. Hall of\n\nRecords, 986 F.2d 54, 57 (3d Cir. 1993). The same conclusion applies here.\n\n We further agree with the District Court\u2019s disposition of Jones\u2019s claim that the\n\ndefendants ignored his medical needs. While we have not yet determined the precise\n\nstandard that applies to such claims when brought by pretrial detainees, see Natale v.\n\nCamden Cnty. Corr. Facility, 318 F.3d 575, 581 n.5 (3d Cir. 2003), we need not resolve\n\nthe issue here because Jones has failed to show that his care was inadequate under any\n\nrelevant standard. The evidence reveals that Jones received treatment immediately\n\nfollowing the assault, and then six additional times over the next three months.\n\nMoreover, during this period, Jones twice skipped scheduled appointments. Jones has\n 5\n\fnot identified any deficiency in this treatment; instead, he has presented only the\n\nconclusory statement that the defendants did not \u201cprovide adequate medical attention.\u201d\n\nThis bald allegation is insufficient to withstand a motion for summary judgment. See\n\nPodobnik v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir. 2005).\n\n Finally, to the extent that Jones claims that the District Court erred in denying his\n\nmotion for reconsideration, we reject his argument. In Jones\u2019s bare-bones motion for\n\nreconsideration, he merely restated his previous, conclusory allegations. The District\n\nCourt was therefore correct to deny the motion. See Harsco Corp. v. Zlotnicki, 779 F.2d\n\n906, 909 (3d Cir. 1985).2\n\n Accordingly, we conclude that there is no substantial question presented by this\n\nappeal, and will thus summarily affirm the District Court\u2019s orders granting summary\n\njudgment to the defendants and denying Jones\u2019s motion for reconsideration. See 3d Cir.\n\nL.A.R. 27.4; I.O.P. 10.6.\n\n\n\n\n 2\n We observe that it was likely inappropriate for the District Court to extend the\ntime for Jones to file his motion for reconsideration. See Fed. R. Civ. P. 6(b)(2).\nHowever, given that we conclude that the District Court was correct to deny the motion\non the merits, we need not reach this issue.\n 6\n\f"} -{"text": "\n946 So.2d 258 (2006)\nSTATE of Louisiana\nv.\nCarl W. BRISTER.\nNo. 06-884.\nCourt of Appeal of Louisiana, Third Circuit.\nDecember 6, 2006.\n*259 David W. Burton, District Attorney, Richard Alan Morton, Assistant District Attorney, DeRidder, LA, for Appellee, State of Louisiana.\nW. Jarred Franklin, Louisiana Appellate Project, Bossier City, LA, for Defendant/Appellant, Carl W. Brister.\nCourt composed of SYLVIA R. COOKS, MARC T. AMY, and JAMES T. GENOVESE, Judges.\nAMY, Judge.\nThe defendant, an adult, was charged by bill of information with two counts of felony carnal knowledge of a juvenile in violation of La.R.S. 14:80 for having sexual intercourse with a fifteen year-old female. Pursuant to a plea agreement, the defendant pled guilty to one count of felony carnal knowledge of a juvenile. The second count was dismissed. The defendant was sentenced to five years at hard labor with credit for time served. This sentence was ordered to run concurrently with any other sentences the defendant was subject to at the time of arrest. In addition, the defendant was ordered to pay a $1,000.00 fine plus court costs. He was also ordered to register as a sex offender pursuant to La.R.S. 15:542. The defendant filed a motion to reconsider the sentence, which the trial court denied. He now appeals, alleging that his sentence is excessive and that the trial court did not adequately consider certain mitigating factors. For the following reasons, we affirm as amended and remand with instructions.\n\nDiscussion\nErrors Patent\nIn accordance with La.Code Crim.P. art. 920, all appeals are reviewed for errors patent on the face of the record. After reviewing the record, we find one error patent in need of correction.\nPursuant to La.R.S. 15:537(A), a person convicted of or who pleads guilty to a sex offense, including felony carnal knowledge of a juvenile, \"shall not be eligible for diminution of sentence for good behavior.\" Here, the trial court failed to deny the defendant diminution eligibility under the statute. In State v. S.D.G., 06-174, p. 5 (La.App. 3 Cir. 5/31/06), 931 So.2d 1244, 1247 (citing State v. G.M.W., Jr., 05-391, p. 2 (La.App. 3 Cir. 11/2/05), 916 So.2d 460, 461), this court stated:\nWe note that the second paragraph of La.R.S. 15:537 is clearly directed to the sentencing court, and the trial court's failure to include a denial of diminution of sentence thereunder renders Defendant's sentences illegally lenient. Pursuant to State v. Williams, 00-1725 (La.11/28/01), 800 So.2d 790 and La.Code Crim.P. art. 882, this court is authorized to recognize and correct illegally lenient sentences.\nHere, the defendant's sentence is illegally lenient in that the trial court failed to deny diminution of sentence. Thus, we amend his sentence to reflect that he is not eligible for diminution of sentence pursuant to La.R.S. 15:537. The trial court is instructed to note the amendment in the court minutes.\n*260 Excessive Sentence\nThe defendant argues that the \"sentence imposed is excessive for this offender and this offense.\"\nAt his sentencing hearing, the defendant orally motioned the court to reconsider his sentence. He asserted that he was being sentenced more severely than his co-defendant who was sentenced to five years probation. This motion was denied. Thereafter, the defendant filed a written motion to reconsider sentence, in which he asserted that \"[t]he sentence imposed is excessive.\" That motion was also denied.\nLouisiana Revised Statutes 14:80 provides in pertinent part:\nD. Whoever commits the crime of felony carnal knowledge of a juvenile shall be fined not more than five thousand dollars, or imprisoned, with or without hard labor, for not more than ten years, or both, provided that the defendant shall not be eligible to have his conviction set aside or his prosecution dismissed in accordance with the provisions of Code of Criminal Procedure Article 893.\nIn State v. Barling, 00-1241, 00-1591, p. 12 (La.App. 3 Cir. 1/31/01), 779 So.2d 1035, 1042-43, writ denied, 01-0838 (La.2/1/02), 808 So.2d 331, this court explained the standard to be used in reviewing excessive sentence claims:\nLa. Const. art. I, \u00a7 20 guarantees that, \"[n]o law shall subject any person to cruel or unusual punishment.\" To constitute an excessive sentence, the reviewing court must find the penalty so grossly disproportionate to the severity of the crime as to shock our sense of justice or that the sentence makes no measurable contribution to acceptable penal goals and is, therefore, nothing more than a needless imposition of pain and suffering. State v. Campbell, 404 So.2d 1205 (La.1981). The trial court has wide discretion in the imposition of sentence within the statutory limits and such sentence shall not be set aside as excessive absent a manifest abuse of discretion. State v. Etienne, 99-192 (La.App. 3 Cir. 10/13/99); 746 So.2d 124, writ denied, 00-0165 (La.6/30/00); 765 So.2d 1067. The relevant question is whether the trial court abused its broad sentencing discretion, not whether another sentence might have been more appropriate. State v. Cook, 95-2784 (La.5/31/96); 674 So.2d 957, cert. denied, 519 U.S. 1043, 117 S.Ct. 615, 136 L.Ed.2d 539 (1996).\nIn State v. Smith, 02-719, p. 4 (La.App. 3 Cir. 2/12/03), 846 So.2d 786, 789, writ denied, 03-0562 (La.5/30/03), 845 So.2d 1061, this court stated:\nIn deciding whether a sentence is shocking or makes no meaningful contribution to acceptable penal goals, an appellate court may consider several factors including the nature of the offense, the circumstances of the offender, the legislative purpose behind the punishment and a comparison of the sentences imposed for similar crimes. State v. Smith, 99-0606 (La.7/6/00); 766 So.2d 501. While a comparison of sentences imposed for similar crimes may provide some insight, \"it is well settled that sentences must be individualized to the particular offender and to the particular offense committed.\" State v. Batiste, 594 So.2d 1 (La.App. 1 Cir.1991). Additionally, it is within the purview of the trial court to particularize the sentence because the trial judge \"remains in the best position to assess the aggravating and mitigating circumstances presented by each case.\" State v. Cook, 95-2784 (La.5/31/96); 674 So.2d 957, 958.\nIn sentencing the defendant, the trial court explained:\n\n*261 Although you have no prior felony convictions, you have had a very\u0097you have very substantial contacts with law enforcement agencies, including several arrests and misdemeanor convictions. You are now 25 years of age and during the last eight years have been arrested at least eight times. You have been convicted of DWI, possession of marijuana, simple battery, driving under suspension and attempted theft. The charge of attempted theft was a result of a looting charge being reduced.\nConsidering your foregoing criminal record, the Court does not consider you to be a good candidate for probation. In arriving at your sentence, I have taken into consideration all of the provisions of the Code of Criminal Procedure 894.1.\nAccordingly, it is the sentence of the Court that you serve five years with the Department of Corrections at hard labor.\nAfter reviewing the record, we do not find that the defendant's sentence was excessive. The presentencing investigation report revealed a number of arrests and misdemeanor convictions. We note that the defendant was sentenced to half of the statutory maximum for this offense. Furthermore, pursuant to a plea agreement entered into with the State, the defendant was allowed to plead guilty to one count of felony carnal knowledge of a juvenile with the other count being dismissed. Had he not pled guilty, the defendant potentially faced two sentences that each carried a maximum sentence of ten years.\nAdditionally, in determining whether the defendant's sentence is excessive, we give no consideration to the sentence received by his co-defendant insofar as \"a sentence must be individualized as to each defendant.\" State v. Lofton, 97-383, p. 5 (La.App. 3 Cir. 10/8/97), 701 So.2d 712, 715, writ denied, 98-0389 (La.6/5/98), 720 So.2d 679. As such, we find that the trial court did not abuse its discretion in imposing the defendant's sentence.\nThis assignment has no merit.\nMitigating Factors\nThe defendant argues that the \"Trial Court failed to adequately consider the mitigating factors listed in La.Code Crim.P. art. 894.1 in imposing a sentence[.]\"\nAfter reviewing the record, we note that the defendant did not raise this issue at his sentencing hearing or in his written motion to reconsider the sentence. Pursuant to La.Code Crim.P art. 881.1(E), his failure to \"include a specific ground upon which a motion to reconsider sentence may be based, including a claim for excessiveness, shall preclude . . . the defendant from raising an objection to the sentence or from urging any ground not raised in the motion on appeal or review.\" See State v. Evans, 27,183 (La.App. 2 Cir. 9/27/95), 661 So.2d 600 (because the defendant did not mention mitigating factors at his sentencing hearing or in his motion for reconsideration of sentence, he was precluded from asserting those issues on appeal). Likewise, we find that the defendant cannot raise this issue for the first time on appeal.\nThis assignment is without merit.\n\nDECREE\nFor the foregoing reasons, the defendant's sentence is affirmed. The defendant's sentence is amended to reflect that diminution eligibility is denied pursuant to La.R.S. 15:537. This matter is remanded to the trial court with instructions to make a notation in the minutes reflecting the amendment.\n*262 AFFIRMED AS AMENDED; REMANDED WITH INSTRUCTIONS.\n"} -{"text": "\n209 U.S. 419 (1908)\nSTICKNEY\nv.\nKELSEY, COMPTROLLER OF THE STATE OF NEW YORK.\nNo. 196.\nSupreme Court of United States.\nSubmitted March 20, 1908.\nDecided April 6, 1908.\nERROR TO THE SURROGATES' COURT IN AND FOR THE COUNTY OF NEW YORK, STATE OF NEW YORK.\nMr. Edward Mitchell for plaintiffs in error.\nMr. David B. Hill for defendant in error.\nMR. JUSTICE MOODY delivered the opinion of the court.\nThis is a writ of error to a Surrogates' Court of the State of New York. The judgment brought under review was entered in obedience to a judgment of the Court of Appeals of that State. The judgment imposed a transfer tax upon certain real property devised by the will of Joseph Stickney, deceased. The tax was properly assessed if an act purporting to be passed on March 16, 1903, 1 Session Laws of 1903, p. 165, was a duly enacted law of the State. It appears that, by the constitution of the State, laws of the nature of this one require for their due enactment a majority vote in each legislative chamber when three-fifths of the members are present. The presiding officers of both branches of the legislature, in certifying that this bill was duly passed by a majority vote, failed to certify that three-fifths of the members were then present. *420 The defendant in error was permitted, over the objection of the plaintiffs in error, to prove that the journals of the two houses showed that the requisite number of members were, in point of fact, present. This the Court of Appeals held to be sufficient to show that the statute was validly enacted. The first five assignments of error in this court simply allege in various forms that the Court of Appeals erred in its decision of the cause. These assignments may be summarily overruled upon the plain ground that they present no Federal question. It must not, however, be understood that we intimate that any form of assignment would have given this court the authority to review the determination of the highest court of a State of the proper method of proving the existence of its own laws. Town of South Ottawa v. Perkins, 94 U.S. 260; Railroad Co. v. Georgia, 98 U.S. 359; Post v. Supervisors, 105 U.S. 667; In re Duncan, 139 U.S. 449; Wilkes County v. Coler, 180 U.S. 506.\nThere is, however, a sixth assignment of error. For its understanding it is necessary to make a further statement of facts. When certified copies of the journals of the two houses were offered in evidence, for the purpose of showing that at the time of the passage of the bill three-fifths of the members were in fact present, notwithstanding the omission of the presiding officers to certify to their presence, counsel for plaintiffs in error made the following objection: \"I object on the ground that the paper offered is incompetent, irrelevant and immaterial; that the original journal, if produced, is not a record either at common law or by the statute, and cannot be introduced in evidence, and cannot be resorted to by the court for the purpose of either validating or impeaching any law, and that the legislative law makes the certificates of the presiding officers conclusive evidence as to whether the majority were present or three-fifths, and the conclusive evidence is that there was only a majority present and not three-fifths.\" The objection was overruled, the evidence was admitted, and an exception was taken. It will be observed that no objection *421 was taken that the original journals were not produced, but only that if produced they were not admissible to add to or vary the certificates of the presiding officers, which were conclusive as to the numbers present. The judgment of the Surrogate, which was in writing, and of the Appellate Division of the Supreme Court, proceeded upon this view of the objection, and treated the question exactly as if the original journals had been offered. But the judgment of the Court of Appeals indicates that there it was objected, for the first time as far as the record discloses, that the original journals were not produced and that the certified copies were not competent evidence of their contents. The inference that such a question was raised can only be drawn from the concluding part of the opinion. After deciding that the presence of the requisite number of members could be provided by recourse to the journals, and that the journals showed the fact, the court said: \"It is contended, however, that the authenticity of the journals of the Legislature, certified copies of which were put in evidence, was not established, and that with the failure of any original record certified extracts therefrom were not competent. Without expressing any opinion on this objection, it is sufficient to say that the question has now been set at rest by the enactment, since the argument of the appeal, of Chapter 240 of the Laws of 1906, p. 471, which in express terms declares the printed copies to be the originals journals of the two houses, and makes them, or copies thereof, competent evidence when certified by the respective clerks of the Senate and Assembly.\" A motion for rehearing was made and denied. Based upon this part of the opinion, a supposed Federal question is alloged in the sixth assignment of error in this court, which is as follows:\n\"VI. That the said Court of Appeals of the State of New York erred in holding and deciding that the motion for reargument and for a hearing on the validity and effect of Chapter 240 of the Laws of 1906 should be denied; by reason of which denial the said Court of Appeals has, in effect, held:\n*422 \"(a) that Chapter 240 of the Laws of 1906 should be construed to have a retroactive effect, and\n\"(b) that such construction would not be in violation of the Fourteenth Article of the Amendments to the Constitution of the United States and,\n\"(c) would not impose and exact a tax without due notice and without due process of law, and\n\"(d) that the State would not by such act and such construction thereof deprive the plaintiffs in error of property without due notice and without due process of law; each of these grounds having been stated in the notice of said motion by the plaintiffs in error, who then and there insisted upon their constitutional rights in such respects as soon as the occasion arose.\"\nWe do not intend to intimate that, if the words of the opinion were capable of the meaning which is attributed to them in this assignment of error, there would have been shown any violation of the Fourteenth Amendment. League v. Texas, 184 U.S. 156. But we think, in view of the fact that when the copies of the journals were offered in evidence no objection had been made that the originals were not produced, the language of the court may quite as naturally be interpreted as a declination to pass on a question, not necessary to the decision, which had been set at rest for the future by legislation. The best that can be said for the plaintiffs in error is that the action of the court was ambiguous. We resolve the ambiguity against the parties complaining, who are bound to show clearly that a Federal right was impaired, rather than misuse our ingenuity to spell out a Federal question to aid a defense which is merely technical and destitute of substantial merit.\nIt does not therefore appear that the judgment under review was based upon the decision of any Federal question. Bachtel v. Wilson, 204 U.S. 36.\nThe writ of error is\nDismissed.\n"} -{"text": "\n360 N.W.2d 633 (1985)\nDale E. TROUPE, Respondent, and\nNorthwestern National Insurance Company, intervenor, Respondent,\nv.\nSUNRISE ELECTRIC, INC., defendant and third party plaintiff, Respondent,\nv.\nORRIN THOMPSON HOMES, INC., a DIVISION OF U.S. HOMES CORPORATION, third party defendant, Appellant.\nNo. C9-84-930.\nCourt of Appeals of Minnesota.\nJanuary 15, 1985.\n*634 Mitchell R. Spector, Abrams & Spector, P.A., Minneapolis, for Dale E. Troupe.\nLouis R. Tilton, Pustorino, Pederson, Tilton & Parrington, Minneapolis, for Northwestern Nat. Ins. Co.\nMark N. Stageberg, Craig D. Peterson, Lommen, Nelson, Sullivan & Cole, P.A., Minneapolis, for Sunrise Elec., Inc.\nEugene J. Flick, Brian N. Johnson, Jardine, Logan & O'Brien, St. Paul, for Orrin Thompson Homes, Inc., a division of U.S. Homes Corp.\nHeard, considered and decided by POPOVICH, C.J., and PARKER and SEDGWICK, JJ.\n\nOPINION\nPOPOVICH, Chief Judge.\nThis is a personal injury action for a work-related injury on a residential construction site. Respondent Troupe was permanently injured when he backed into an exposed live electrical wire while pouring a cement basement in one of appellant's houses.\nTroupe alleged his injuries were due to the negligence of the project's electrical subcontractor, respondent Sunrise Electric, Inc. Sunrise alleged negligence by the project's general contractor, appellant Orrin Thompson Homes, Inc. Sunrise sought contribution from appellant for $42,000 in worker's compensation benefits paid to Troupe.\nThe jury awarded Troupe $65,000 in damages and apportioned fault as follows: Troupe 0%, Sunrise Electric 20%, Orrin Thompson 80%. Sunrise paid Troupe the full damage award. Orrin Thompson contributed $42,000 to Sunrise but recouped only $27,741.01 under its worker's compensation subrogation right.\nAppellant moved for judgment n.o.v. and a new trial claiming (1) the evidence did not support the verdict, (2) improper final argument by Sunrise's attorney in connection with the special verdict form, and (3) that improper contribution forced appellant to pay $14,500 more than its worker's compensation liability. The trial court denied the motion, and Orrin Thompson appealed. We affirm.\n\nFACTS\nDale Troupe was a cement finisher for Orrin Thompson Homes, Inc. At the time of the accident, Troupe was pouring a basement *635 in one of approximately 250 homes being constructed by Orrin Thompson in Maple Grove, Minnesota.\nOrrin Thompson was the general contractor on the project. Some construction work was done directly by Orrin Thompson employees while other work was subcontracted. Electrical work for the project was subcontracted to Sunrise Electric, Inc. Orrin Thompson's area supervisor, Wayne Enos, was responsible for coordinating and scheduling all work on the project. Electrical work was completed in two phases: \"rough-in\" and \"finish\" work. Dates for completion of both rough-in and finish electrical work were set by Enos.\nRough-in electrical work was performed by Sunrise at the accident site on March 6 and 7, 1980. Consistent with their usual practice, all wires and receptacles were placed, and a bathroom circuit was installed and energized through one panel circuit. Wires were left coiled along the basement walls with exposed, uncapped ends.\nOrrin Thompson scheduled Sunrise to complete the finish electrical work at the accident site on May 16 and 17, 1980. Finish work was completed in the upper portion of the house, but no work was done in the basement due to standing mud and water. Nonetheless, all remaining circuit breakers were installed and the lines energized. Sunrise did not, however, tape or cap the exposed, unconnected basement wires.\nSunrise employees were routinely instructed that breakers should be de-energized when not in use and that if circuit breakers were installed, they should be taped in the \"off\" position. Neither the foreman nor the electrical workers assigned to the accident site could remember if the breakers had been taped in that particular house. When Enos checked the site's circuit breaker panel after the accident, all circuits were untaped and in the \"on\" position.\nConstruction continued on the home as the floor was drying. Whenever a subcontractor asked why there was no power in a house, Enos told them to check the circuit breakers. Most of Enos' foremen would turn circuits on and off themselves.\nTroupe and his co-workers poured the basement at the accident site on June 12, 1980. As he poured cement, Troupe's shoulder touched the bare ends of a wire and he received a shock. As a result of the shock, he was permanently injured.\n\nISSUES\n1. Was there sufficient evidence to support the jury's verdict?\n2. Were closing comments made by counsel for Sunrise Electric improper?\n3. Was the trial court's application of Minn.Stat. \u00a7 176.061, subd. 6(c) (1982) incorrect or in violation of state and federal constitutions?\n\nANALYSIS\n\n1. Sufficiency of evidence.\n\nOrrin Thompson claims the evidence introduced at trial was insufficient to support a finding that Orrin Thompson was 80% responsible for Troupe's injuries.\nOn appeal from a jury verdict, all evidence must be considered \"in the light most favorable to the prevailing party,\" and \"the verdict must be sustained unless it is manifestly and palpably contrary to the evidence.\" Cobb v. Aetna Life Insurance Company, 274 N.W.2d 911, 917 (Minn.1979). This court \"need only find sufficient, competent evidence reasonably tending to support and sustain the jury's finding.\" Krengel v. Midwest Automatic Photo, Inc., 295 Minn. 200, 204, 203 N.W.2d 841, 844 (1973).\nAppellant was the coordinator of all the workers on the project. Scheduling was under the control of appellant's area supervisor, Wayne Enos. Enos knew that construction at the accident site was proceeding out of sequence. He knew that Sunrise Electric's finish work was incomplete in the basement. He saw the coiled wires hanging in the basement many times when he went to check on the heater, but *636 he never checked to see if those wires were connected to a live circuit. Enos never warned subcontractors or Orrin Thompson's employees that the accident site house was being built out of the normal sequence. Nor did he warn them that the finish electric work was left partially complete.\nThe record viewed in the light most favorable to the verdict supports the jury's findings.\n\n2. Counsel's comments.\n\nAppellants claim the trial court erred by permitting Sunrise Electric's attorney to comment upon the legal effect of the jury's answers to the special verdict form during closing argument. Minn.R. Civ.P. 49.01(2) allows counsel to comment upon the effect of the jury's answers to the special verdict. See Christopherson v. Independent School District No. 284, 354 N.W.2d 845, 847-48 (Minn.Ct.App.1984). Our review of the record shows the comments objected to were within the permissible limits of Minn.R.Civ.P. 49.01(2). The trial court did not abuse its discretion by refusing to grant a new trial under these circumstances. See Togstad v. Vesely, Otto, Miller & Keefe, 291 N.W.2d 686, 696 (Minn.1980); Patterson v. Donahue, 291 Minn. 285, 287-88, 190 N.W.2d 864, 866 (1971).\n\n3. Workers' compensation reimbursement.\n\nThe trial court calculated the amount Troupe was required to reimburse appellant pursuant to Minn.Stat. \u00a7 176.061, subd. 6 (1982). Appellant claims the trial court erred because by allocating a portion of Troupe's attorney's fees to appellant, appellant is forced to pay more than its worker's compensation liability. Appellant also claims Minn.Stat. \u00a7 176.061, subd. 6 (1982) is unconstitutional under the United States and Minnesota constitutions.\nThe trial court correctly calculated the amount of reimbursement. An employer's reimbursement under Minn.Stat. \u00a7 176.061, subd. 6 is reduced by an allocable share of plaintiff's attorney's fees. See Cronen v. Wegdahl Cooperative Elevator Association, 278 N.W.2d 102, 104-105 (Minn.1979). Minn.Stat. \u00a7 176.061, subd. 6(c) (1982) \"is designed to require the employer to pay its fair share of the attorney's fee that generated the recovery from the third party.\" Kordosky v. Conway Fire and Safety, Inc., 304 N.W.2d 616, 621 (Minn.1981); see Cronen, 278 N.W.2d at 104.\nWe reject appellant's constitutional claims. The Workers' Compensation Act does not violate Minn. Const. art. 1, \u00a7 8, which provides that every person is entitled to a certain remedy for all injuries and wrongs. Although the current version of Minn.Stat. \u00a7 176.061 is less favorable to employers than in the past, the Act still embraces:\na reciprocal yielding and giving up of rights existing at common law for the new and enlarged rights and remedies given by the compensation act.\nBreimhorst v. Beckman, 227 Minn. 409, 429, 35 N.W.2d 719, 732 (1949); see also id. at 434-36, 35 N.W.2d at 735-36.\nWe also reject appellant's due process argument. Laws enacted by the legislature are presumed valid. See Mathison v. Minneapolis Street Railway Company, 126 Minn. 286, 289, 148 N.W. 71, 73 (1914).\nDue process demands only that (1) the act serve to promote a public purpose, (2) it not be an unreasonable, arbitrary or capricious interference, and (3) the means chosen bear a rational relation to the public purpose sought to be served.\nContos v. Herbst, 278 N.W.2d 732, 741 (Minn.); appeal dismissed, 444 U.S. 804, 160 S.Ct. 24, 62 L.Ed.2d 17 (1979). The allocation formula set forth in Minn.Stat. \u00a7 176.061, subd. 6(c) is not arbitrary or capricious and is reasonably related to the public purpose of protecting and balancing the rights of employees, employers, and third parties.\n\nDECISION\nSufficient evidence supported the jury's verdict. Comments made by counsel during *637 closing argument were not improper. The trial court correctly calculated the amount of reimbursement under Minn.Stat. \u00a7 176.061 (1982). Minn.Stat. \u00a7 176.061, subd. 6 is constitutional.\nAffirmed.\n"} -{"text": "\n659 F.Supp. 606 (1987)\nIn the Matter of the Application of LIBERIAN EASTERN TIMBER CORPORATION, Arbitration Award Creditor, Plaintiff,\nv.\nThe GOVERNMENT OF the REPUBLIC OF LIBERIA, Arbitration Award Debtor, Defendant.\nCiv. A. No. 87-173.\nUnited States District Court, District of Columbia.\nApril 16, 1987.\n*607 Nicholas H. Cobbs, Washington, D.C., Thomas D. Troy, New York City, for plaintiff.\nCharles A. Patrizia, Bruce D. Ryan, Washington, D.C., Philip F. Grant, Barry J. Mandel, Allan Dinkoff, Reginald F. Lewis, Charles Clarkson, W. Kevin Wright, New York City, for defendant.\n\nMEMORANDUM OPINION\nSTANLEY S. HARRIS, District Judge.\nThis matter is before the Court on defendant The Government of the Republic of Liberia's (hereinafter Liberia) emergency motion for relief from orders attaching bank accounts of the Embassy of the Republic of Liberia, and for a temporary restraining order and a preliminary injunction against further attachment of embassy accounts. The Court previously issued a short Order on January 14, 1987, directing that Liberia's motion shall be treated as a motion to quash the writs of attachment seizing Liberia's bank accounts and stating that the motion was granted. This opinion, prepared after the parties filed post-hearing briefs, constitutes the Court's findings of facts and conclusions of law from which a party may appeal.\n\nFacts\nPlaintiff Liberian Eastern Timber Corporation (hereinafter LETCO) successfully sought in the United States District Court for the Southern District of New York an ex parte order directing entry of judgment for $9,076,857.25, based upon an arbitration award rendered against defendant Liberia. Pursuant to the judgment, writs of execution were issued to the United States Marshal for the Southern District of New York. Subsequently, in the same court, Liberia moved, inter alia, to enjoin the execution of the judgment. That court held LETCO to be enjoined from issuing executions against certain government property, but also ruled that \"LETCO is not enjoined from issuing executions with respect to any properties which are used for commercial activities and that may fall within one of the exceptions delineated in section 1610 [of USC Title 28].\"\nLETCO then recorded the judgment in this court, and this court issued writs of attachment which were served on Riggs National Bank and First American Bank (as well as on other banks in which Liberia appears to have no accounts) to notify the banks that the writs seized \"any credits other than wages, salary, commissions or pensions of the defendant, The Government of the Republic of Liberia, The Republic of Liberia, or The Embassy of the Republic ... of Liberia or any of their agencies, that are used for commercial activities as such activities are defined in `Birch Shipping Corp. v. Embassy of the Republic of Tanzania,' [sic], 507 F.Supp. 332 [sic] (D.D.C. 1980),\" sufficient to satisfy the judgment against Liberia.\nThe writs seized two bank accounts at Riggs National Bank and three accounts at First American Bank.[1] These accounts are used for the functioning of the Liberian *608 Embassy and for the central bank of the Republic of Liberia.\n\nDiscussion\nThe Court concludes that the bank accounts of the Embassy of Liberia are immune from attachment under the Vienna Convention, 23 U.S.T. 3227, Apr. 18, 1961, T.I.A.S. No. 7502.\nThe Vienna Convention provides in Article 25 that \"[t]he receiving State shall accord full facilities for the performance of the functions of the mission.\" 23 U.S.T. at 3238. The Liberian Embassy lacks the \"full facilities\" the Government of the United States has agreed to accord if, to satisfy a civil judgment, the Court permits a writ of attachment to seize official bank accounts used or intended to be used for purposes of the diplomatic mission.\nIf the \"full facilities\" to which the United States agreed to \"accord\" diplomatic immunity did not include bank accounts off the premises of the mission, the Liberian Embassy either would have to take grossly inconvenient measures, such as issuing only checks drawn on a Liberian bank, or would have to run the risk that judgment creditors of Liberia would cause the accounts the Embassy holds at banks located in the United States to be seized for an indefinite length of time, severely hampering the performance of the Embassy's diplomatic functions. Moreover, to interpret the term \"accord,\" as used in Article 25, as merely allowing the Liberian Embassy to use bank accounts located in the United States but not affording the accounts the protection of diplomatic immunity would pay mere lip service both to Article 25 and to the intent of the Vienna Convention, as stated in its Preamble: \"to ensure the efficient performance of the functions of diplomatic missions as representing States.\" 23 U.S.T. at 3230. The Liberian Embassy hardly could function efficiently without local bank accounts.\nAt the hearing on Liberia's motion, LETCO argued that only funds maintained on the premises of the mission are to be afforded diplomatic immunity because only property described in Article 22(3) of the Vienna Convention is exempt from attachment.[2] The Court does not agree with LETCO's contention. Article 22(3) does not provide the exclusive authority in the Vienna Convention to determine which property enjoys diplomatic immunity from attachment. Article 31 states that immovable property used for the purposes of the mission enjoys immunity from civil and administrative jurisdiction. Article 24 states that the archives and documents of the mission are inviolable wherever they may be. Although no provision of the Vienna Convention states specifically that official bank accounts used or intended to be used for purposes of the diplomatic mission enjoy diplomatic immunity from attachment, the Court concludes that not affording diplomatic immunity to the Embassy's bank accounts, despite the absence of such a specific provision, is inconsistent with both the agreement set forth in Article 25 and the intention of the parties to the Vienna Convention.\nUnder the Vienna Convention, therefore, the bank accounts of the Liberian Embassy used or intended to be used for purposes of the diplomatic mission are immune from attachment to satisfy a civil judgment. Although a finding of diplomatic immunity under the Vienna Convention resolves this matter as to the bank accounts of the Liberian Embassy, the Court also discusses the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. \u00a7\u00a7 1062-1611, to make clear that the bank accounts of the Liberian Embassy are immune from attachment regardless of a finding of diplomatic immunity.[3]\n*609 The FSIA sets forth, inter alia, when a foreign state's property in the United States is not entitled to immunity from attachment. Title 28 U.S.C. \u00a7 1609 sets forth the general rule regarding sovereign immunity from attachment: \"[T]he property in the United States of a foreign state shall be immune from attachment arrest and execution except as provided in sections 1610 and 1611 of this chapter.\"[4]\nLETCO, in accordance with the injunction ordered by the District Court for the Southern District of New York, relies on an exception to the general rule of immunity, 28 U.S.C. \u00a7 1610(a)(1), which provides:\n(a) The property in the United States of a foreign state, as defined in section 1603(a) of this chapter, used for a commercial activity in the United States, shall not be immune from attachment in aid of execution, or from execution, upon a judgment entered by a court of the United States or of a State after the effective date of this Act, if \u0097\n(1) the foreign state has waived its immunity from attachment in aid of execution or from execution either explicitly or by implication, notwithstanding any withdrawal of the waiver the foreign state may purport to effect except in accordance with the terms of the waiver....\n* * * * * *\n28 U.S.C. \u00a7 1610(a)(1) sets forth a two-step analysis to determine immunity: first, the foreign state must have waived its immunity and, second, the property attached must be used for a commercial activity. Birch Shipping v. Embassy of the United Republic of Tanzania, 507 F.Supp. 311, 312 (D.D.C.1980).\nThe District Court for the Southern District of New York has determined that Liberia waived its sovereign immunity in the United States with respect to enforcement of the judgment now recorded in this Court. Liberian Eastern Timber Corporation v. The Government of the Republic of Liberia, 650 F.Supp. 73, 76-77 (S.D.N.Y. 1986).\nAs to whether the property attached was used for a commercial activity, Congress, at 28 U.S.C. \u00a7 1603(d), stated:\n(d) A \"commercial activity\" means either a regular course of commercial conduct or a particular commercial transaction or act. The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose.\nThe legislative history of the FSIA expands upon the meaning of commercial activity as follows:\n[T]he fact that goods or services to be procured through a contract are to be used for a public purpose is irrelevant; it is the essentially commercial nature of an activity or transaction that is critical. Thus, a contract by a foreign government to buy provisions or equipment for its armed forces or to construct a government building constitutes a commercial activity. The same would be true of a contract to make repairs on an embassy building. Such contracts should be considered to be commercial contracts, even if their ultimate object is to further a public function.\nBy contrast, a foreign state's mere participation in a foreign assistance program administered by the Agency for International Development (AID) is an activity whose essential nature is public or governmental, and it would not itself constitute a commercial activity. * * * However, a transaction to obtain goods or services from private parties would not lose its otherwise commercial character because it was entered into in connection *610 with an AID program. Also public or governmental and not commercial in nature, would be the employment of diplomatic, civil service, or military personnel, but not the employment of American citizens or third country nationals by the foreign state in the United States.\n* * * * * *\nH.Rep. No. 1487, 94th Cong., 2d Sess. at 16, U.S.Code Cong. & Admin.News 1976, p. 6615.\nThe \"rule of thumb\" used to determine whether activity is of a commercial or public nature is \"if the activity is one in which a private person could engage, it is not entitled to immunity.\" Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543, 1549 (D.C.Cir.1987) (quoting Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300, 309 (2d Cir.1981)).\nThe concept of \"commercial activity\" should be defined narrowly because sovereign immunity remains the rule rather than the exception, Gibbons v. Republic of Ireland, 532 F.Supp. 668, 670-71 (D.D.C. 1982), and because courts should be cautious when addressing areas that affect the affairs of foreign governments. See 14 C. WRIGHT, A MILLER & E. COOPER, FEDERAL PRACTICE AND PROCEDURE, \u00a7 3662, 382-83 (1985).\nThe Liberian Embassy bank accounts are \"utilized for the maintenance of the full facilities of Liberia to perform its diplomatic and consular functions as the official representative of Liberia in the United States of America, including payment of salaries and wages of diplomatic personnel and various ongoing expenses incurred in connection with diplomatic and consular activities necessary to the proper functioning of the Embassy.\" Greaves Affidavit, \u00b6 6. The essential character of the activity for which the funds in the accounts are used, therefore, undoubtedly is of a public or governmental nature because only a governmental entity may use funds to perform the functions unique to an embassy. See MacArthur Area Citizens Association v. Republic of Peru, 809 F.2d 918, 920 (D.C.Cir.1987).\nThe Court presumes that some portion of the funds in the bank accounts may be used for commercial activities in connection with running the Embassy, such as transactions to purchase goods or services from private entities. The legislative history of the FSIA indicates that these funds would be used for a commercial activity and not be immune from attachment. The Court, however, declines to order that if any portion of a bank account is used for a commercial activity then the entire account loses its immunity. Cf. Birch, 507 F.Supp. at 313. On the contrary, following the narrow definition of \"commercial activity,\" funds used for commercial activities which are \"incidental\" or \"auxiliary,\" not denoting the essential character of the use of the funds in question, would not cause the entire bank account to lose its mantle of sovereign immunity. See Practical Concepts, 811 F.2d 1543, 1549.\nIndeed, a diplomatic mission would undergo a severe hardship if a civil judgment creditor were permitted to freeze bank accounts used for the purposes of a diplomatic mission for an indefinite period of time until exhaustive discovery had taken place to determine the precise portion of the bank account used for commercial activities.[5] Such a scenario would practically gut one of the purposes behind immunity: to afford deference to the governmental affairs of foreign states. In addition, requiring diplomats to segregate funds of a public character from commercial activity funds to avoid the risk of attachment is not the solution. Courts, let alone diplomats, have difficulty determining whether funds are public or commercial in nature. See, e.g., Texas Trading, 647 F.2d 308-10.\n*611 In conclusion, the bank accounts of the Liberian Embassy are immune from attachment both because they enjoy diplomatic immunity under the Vienna Convention and because no exception of the FSIA applies to deprive the bank accounts of their grant of sovereign immunity. Also, as noted above, the bank account used for the central bank of Liberia is immune under 28 U.S.C. \u00a7 1611(b)(1).\nNOTES\n[1] Following the hearing on the motion to quash the parties stipulated that defendant also holds a bank account in the name of The Liberian Embassy at American Security Bank in Washington, D.C., and that the Court's Order of January 14, 1987, shall apply to the Embassy account at American Security Bank to the same extent as it applies to the Embassy accounts at Riggs National Bank and First American Bank.\n[2] Article 22(3) of the Vienna Convention provides:\n\n3. The premises of the mission, their furnishings and other property thereon and the means of transport of the mission shall be immune from search, requisition, attachment or execution.\n[3] The Court notes that Congress did not intend the FSIA to affect diplomatic immunity under the Vienna Convention. See H.Rep. No. 1487, 94th Cong., 2d Sess. at 12, U.S.Code Cong. & Admin.News 1976, p. 6604. Indeed, 28 U.S.C. \u00a7 1609 explicitly states that Congress enacted the FSIA \"[s]ubject to existing international agreements to which the United States is a party at the time of enactment of this Act....\" The United States was a party to the Vienna Convention at the time Congress enacted the FSIA, so the provisions of the Vienna Convention are controlling over the FSIA.\n[4] In addition to the Embassy accounts, one of the attached bank accounts is used for the central bank of Liberia and, as LETCO conceded at the hearing on the motion, that bank account is immune from attachment under the FSIA, 28 U.S.C. \u00a7 1611(b)(1). The remainder of this opinion addresses the attached bank accounts of the Liberian Embassy.\n[5] This would be a difficult task at best because Article 24 of the Vienna Convention provides that \"[t]he archives and documents of the mission shall be inviolable at any time and wherever they may be.\" Article 29 provides that \"[t]he person of a diplomatic agent shall be inviolable. He shall not be liable to any form of arrest or detention....\" Article 31(c)(2) provides, \"[a] diplomatic agent is not obliged to give evidence as a witness.\" 23 U.S.T. at 3238, 3240, 3241.\n"} -{"text": "Petition for Writ of Mandamus Conditionally Granted and Memorandum\nOpinion filed February 6, 2013\n\n\n\n\n In The\n\n Fourteenth Court of Appeals\n ____________\n\n NO. 14-12-01135-CV\n ____________\n\n IN RE AMERICAN NATIONAL COUNTY MUTUAL\n INSURANCE COMPANY AND AMERICAN NATIONAL\n LLOYDS INSURANCE COMPANY, Relators\n\n\n ORIGINAL PROCEEDING\n WRIT OF MANDAMUS\n 212th District Court\n Galveston County, Texas\n Trial Court Cause Nos. 11CV0882 and 11CV0882-A\n\n MEMORANDUM OPINION\n\n On December 18, 2012, American National County Mutual Insurance\nCompany and American National Lloyds Insurance Company (\u201cRelators\u201d) filed a\npetition for writ of mandamus. See Tex. Gov't Code Ann. \u00a7 22.221. Relators ask\nthis Court to order The Honorable Susan Criss, Judge of the 212th District Court of\nGalveston County, Texas, to set aside her order dated December 5, 2012, entered\n\fin trial court cause number 11CV0882,1 styled Jennifer Avery, Individually and as\nRepresentative of the Estate of Brittiany Yuchnewicz v. Jonathan Hammond, Larry\nHammond, and Terrie Hammond. Relators assert the trial court abused its\ndiscretion in denying their plea to the jurisdiction. On January 24, 2013, Relators\nfiled in this court an emergency motion for stay of the proceedings in the trial\ncourt. On January 25, 2013, that motion was granted and we ordered the\nproceedings of the court below be stayed only as to the claims against Relators. A\nresponse to the petition was requested. As of this date, none has been filed. We\nconditionally grant the writ.\n\n Jennifer Avery filed suit against the Hammonds for two incidents, the\nsecond of which resulted in the death of her daughter, Brittiany Yuchnewicz.\nAvery subsequently amended her petition to include a declaratory judgment action\nagainst Relators, the Hammonds\u2019 insurers, to determine their obligation to\nindemnify the Hammonds. Relators filed a plea to the jurisdiction alleging the trial\ncourt lacked subject matter jurisdiction. After a hearing, the motion was denied.\n\n Relators claim Avery lacks standing to initiate a declaratory judgment action\nagainst the defendants\u2019 insurance company because no finding that defendants are\nliable to Avery has been made. Relators assert the issues are not \u201cripe.\u201d\n \u201cA tort claimant has no direct claim against the tortfeasor\u2019s liability insurer\nuntil the insured tortfeasor is adjudged liable to the tort claimant.\u201d Farmers Ins.\nExchange v. Rodriguez, 366 S.W.3d 216, 223 (Tex. App. - Houston [14th Dist.]\n2012, pet. filed). Thus, until the Hammonds are adjudged liable to Avery, Avery\nhas no direct claim against Relators. Although Avery is a third-party beneficiary\nof the Hammonds\u2019 insurance policy, she cannot enforce the policy directly against\n\n1\n After the plea to the jurisdiction was denied, the trial court entered an order of severance.\n\n 2\n\fRelators until it has been established, by final judgment or agreement, that the\nHammonds have a legal obligation to pay damages to her. Id. Because there is\ncurrently no obligation for the Hammonds to pay Avery damages, Avery cannot\ndemonstrate a reasonable likelihood that her claims against Relators will soon\nripen in the case under review, and these claims must be dismissed for lack of\nsubject-matter jurisdiction. See id. There can be no justiciable controversy\nregarding the insurer\u2019s duty to indemnify before a judgment has been rendered\nagainst an insured. Id.2 We therefore find the trial court lacks subject matter\njurisdiction as to Avery\u2019s claims against Relators.\n Subject matter jurisdiction is never presumed and cannot be waived. Tex.\nAss\u2019n of Business v. Air Control Bd., 852 S.W.2d 440 (Tex. 1993). A trial court\nhas no discretion and must dismiss the case as a ministerial act when it lacks\nsubject matter jurisdiction. Qwest Microwave, Inc. v. Bedard, 756 S.W.2d 426\n(Tex.App.\u2014Dallas 1988, orig. proceeding). Mandamus is available where the trial\ncourt\u2019s action is void as a matter of law. Lewis v. Leftwich, 775 S.W.2d 848\n(Tex.App.\u2014Dallas 1989, orig. proceeding). We therefore find Relators are\nentitled to mandamus relief. See also In re John G. and Marie Stella Kenedy\nMemorial Foundation, 315 S.W.3d 519, 522 (Tex. 2010) (mandamus relief was\nappropriate in case in which trial court lacked jurisdiction because plaintiff had no\nstanding).\n\n\n\n\n2\n A declaratory judgment can be sought before liability is determined on the duty to defend.\nEnglish v. BGP Intern, Inc. 174 S.W.3d 366, 371-72 (Tex. App. -- Houston [14th Dist.] 2005,\nno pet.). However, a declaratory judgment on the duty to indemnify is only justiciable \u201cwhen the\ninsurer has no duty to defend and the same reasons that negate the duty to defend likewise\nnegate any possibility the insurer will ever have a duty to indemnify.\u201d Farmers Texas County\nMut. Ins. Co. v. Griffin, 955 S.W.2d 81, 84 (Tex. 1997) (emphasis in the original). This case is\nnot within the exception.\n\n 3\n\f Accordingly, we conditionally grant the petition for writ of mandamus\nand direct the trial court to set aside her December 5, 2012 order, and enter\nan order granting the plea to the jurisdiction and dismissing the case. The writ will\nissue only if the trial court fails to act in accordance with this opinion.\n\n\n\n PER CURIAM\n\nPanel consists of Justices Frost, Christopher, and Jamison.\n\n\n\n\n 4\n\f"} -{"text": "\n90 Ga. App. 372 (1954)\n83 S.E.2d 185\nWORSHAM\nv.\nPALMER.\n35213.\nCourt of Appeals of Georgia.\nDecided July 9, 1954.\n*377 Samuel L. Eplan, Frank D. Holcomb, for plaintiff in error.\nC. Eugene Gilbert, Wendell J. Helton, contra.\nGARDNER, P. J.\n1. The defendant contends that the court *378 erred in not sustaining the general demurrer to the original petition as amended, because the amendment filed did not add any new facts or any sufficient facts, construed with the original petition, to set out a cause of action. As to this phase of the defendant's contention, counsel calls attention to the following decisions: Jones v. Butler, 191 Ga. 126 (12 S. E. 2d 326); Wood v. Southern Trust Co., 12 Ga. App. 155 (76 S. E. 991); Baker v. City of Atlanta, 22 Ga. App. 483 (96 S. E. 332); Pasco Flour Mills Co. v. City Supply Co., 23 Ga. App. 95 (97 S. E. 558); Garmany v. Henson, 30 Ga. App. 100 (117 S. E. 107); Jenkins v. Atlanta Police Relief Assn., 54 Ga. App. 209 (187 S. E. 597); Lavenden v. Haseman, 157 Ga. 275 (121 S. E. 646).\nThe defendant further calls our attention to Weyman v. Maynard, 24 Ga. App. 94 (100 S. E. 25), in which this court held that, if prior to the tenant's injuries, dangerous defects in the premises were actually known to the tenant or were so plainly observable that the tenant must necessarily have had equal opportunity with the landlord to discover and understand the defects, the landlord would not be liable for injuries sustained as a result of such defects. Kleinberg v. Lyons, 39 Ga. App. 774 (148 S. E. 535) and Mendel v. Lyons, 39 Ga. App. 783 (148 S. E. 540), held that, if the tenant knows of dangerous conditions of the premises, and continues to use same, recovery for injuries will not lie. See Finley v. Williams, 45 Ga. App. 863 (166 S. E. 265), to the same effect. In King v. Investors Mortgage &c. Co., 51 Ga. App. 235 (1) (179 S. E. 910), this court held that the landlord is not liable if the tenant knows as much about the premises as the landlord. Our attention is called also to Cone v. Lawhon, 61 Ga. App. 797 (3) (7 S. E. 2d 597), in which this court held simply that notice or knowledge by a landlord of separate and independent patent defects in no way connected with latent defects, which latent defects allegedly caused injuries to the tenant, could not be taken as conclusive notice to the landlord of latent defects or as devolving upon the landlord any duty of inspection. Those are not the facts as alleged in the amended petition. Under the allegations of the instant petition, the patent defects were connected with the latent defects which allegedly occasioned injuries to the plaintiff. The defendant calls our attention to Waddell v. Wofford Oil Co., 84 Ga. App. 617 (66 *379 S. E. 2d 806). In that case the court held that the landlord is not liable for patent defects which are known also or which the tenant had means of knowing equal to the landlord, at the time the premises were rented to the tenant. The allegations of fact in that case are not of sufficient similarity to the allegations of fact in the instant case to render the landlord in the instant case not liable. The defendant calls our attention to Ween v. Saul, 88 Ga. App. 299 (76 S. E. 2d 525). It will be noticed that in that case the court held that the plaintiff was entitled to proceed under her petition where she knew that a certain portion of the plaster was loose and she moved her bed to another portion of the same room where the plaster appeared to be sound. The trial court sustained a demurrer to her petition, and this court reversed the trial court. We do not think that the allegations of fact in that case support the contentions of the defendant in the instant case.\n2. Again referring to Ween v. Saul, supra, this court held as follows: \"The petitions in these cases being actions for damages resulting to a tenant from a defect in the premises of which the landlord had actual or constructive notice, stated causes of action and the trial court erred in sustaining the general demurrers and in dismissing the actions.\"\nIn Shattles v. Blanchard, 87 Ga. App. 15 (1) (73 S. E. 2d 112), it was held: \"The question of what is reasonable time for the performance of an act required to be performed upon `reasonable notice,' is usually, if not always to be determined by the character of the act contemplated, considered with its purposes and the attendant facts and circumstances. Accordingly, where, as here, the only means of ingress and egress from an apartment rented by the landlord is a set of outside steps, whether two days' notice of a defect in the steps is such reasonable notice as would raise a duty on the part of the landlord to repair same within such period of time is a jury question.\"\nHeadnote 2 of that same opinion held: \"Questions as to negligence and contributory negligence are, except in plain and indisputable cases, for the determination of the jury, and where the allegations of the petition do not, even when construed against the pleader, demand the conclusion that the plaintiff's own negligence so preponderated as to preclude a recovery by her, this issue should be left for determination by a jury.\"\n*380 On page 18 of that same opinion this court held: \"Except in clear and palpable cases it is a jury question as to whether the plaintiff was in the exercise of ordinary care for her own safety.\"\nOn page 16 of that same opinion this court held: \"Notice of a defect given by the tenant to the landlord, charges the latter with notice of any and all other defects such as might reasonably have been discovered by a compliance with a request for repairs.\"\nIn Stack v. Harris, 111 Ga. 149 (36 S. E. 615), the Supreme Court held: \"Though a landlord will not be liable in damages for injuries to a tenant resulting from the defective condition of a plank in the floor of the rented building, of which the landlord had no notice, a petition which alleges that the plaintiff, a tenant, was injured by reason of such a defect and that the landlord, the defendant, had notice of the `defective condition of the floor,' sufficiently alleges as against a general demurrer, that the defendant had notice of the defective condition of the plank.\"\nSee, in this connection, Shaddix v. Eberhart, 55 Ga. App. 498 (190 S. E. 408); Kimpson v. Wingo, 84 Ga. App. 189 (65 S. E. 2d 837); Seal v. Stodghill, 44 Ga. App. 643 (162 S. E. 638); Marr v. Dieter, 27 Ga. App. 711 (2) (109 S. E. 532); MeYere v. Withers, 15 Ga. App. 688 (84 S. E. 163).\nUnder the allegations of this petition, the court did not err in overruling the general demurrer to the petition.\nJudgment affirmed. Townsend and Carlisle, JJ., concur.\n"} -{"text": "\n193 B.R. 341 (1995)\nIn re Gerri Lynn Perkins HAITH, Debtor.\nBankruptcy No. 94-00118-BGC-13.\nUnited States Bankruptcy Court, N.D. Alabama, Southern Division.\nJune 23, 1995.\nCheryl Daugherty, Birmingham, Alabama, for Debtor.\nRichmond Stephens, Leeds, Alabama, for Movant.\n\nOrder Denying Amendment to Schedules and Motion to Modify\n\nand\n\nOrder Sustaining Objection to Amendment to Schedules and Motion to Modify\n\nFiled by Wayne-Dalton Corp.\nBENJAMIN COHEN, Bankruptcy Judge.\nThis matter is before the Court on an Amendment to Schedules and Motion to *342 Modify filed by the Debtor on April 10, 1995 and on an Objection to Amendment to Schedules and Motion to Modify filed by Wayne-Dalton Corp. on April 21, 1995. After notice, a hearing was held on June 13, 1995. Gerri Lynn Perkins Haith, the Debtor; Cheryl Daugherty, the attorney for the Debtor; Raymond Rodgers, a representative of Wayne-Dalton Corp.; and Richmond Stephens, the attorney for Wayne-Dalton Corp.; appeared. The matter was submitted on the testimony of the Debtor and Mr. Rodgers, exhibits admitted at trial and arguments of counsel.\n\nIssue\nThe Debtor asks the Court to allow her to include a post-petition debt in her existing chapter 13 plan. The creditor of the debt objects. The issue is if the subject debt is a post-petition debt and the subject creditor objects, should a debtor be allowed to include a post-petition debt in an existing Chapter 13 plan.\n\nConclusions of Law\nThe Court's rendition of the particular facts of this case is not necessary to reach a decision in this matter. The parties agree that the subject debt is a debt that arose after the filing of the bankruptcy and after the existing chapter 13 plan was confirmed. Based on this agreement and based on the recognized prohibition of including post-petition debts in existing chapter 13 plans where affected creditors object, the Court finds as a matter of law that the Debtor's Amendment to Schedules and Motion to Modify are due to be denied and Wayne-Dalton Corporation's Objection to Amendment to Schedules and Motion to Modify is due to be sustained.\nSection 1305 of the Bankruptcy Code governs the filing and allowance of post-petition claims. Section 1305(b) reads in part, \"Except as provided in subsection (c) of this section, a claim filed under subsection (a) of this section shall be allowed or disallowed. . . .\" 11 U.S.C. \u00a7 1305(b) (emphasis added). Consequently only post-petition debts for which a claim has been filed may be allowed or disallowed in a chapter 13 plan. Section 1305(a) reads in part, \"A proof of claim may be filed by any entity that holds a [post-petition] claim against the debtor. . . .\" 11 U.S.C. \u00a7 1305(a) (parenthetical added) (emphasis added). Consequently only the holder of a post-petition debt may file the proof of claim for that debt.\nIf a debtor or the trustee could file proofs of claims for post-petition debts that would be paid through existing chapter 13 plans, the cases and the plans they represent would be perpetual. Neither the Bankruptcy Code nor the Bankruptcy Rules allows a debtor to force a post-petition creditor into an existing chapter 13 plan. If a post-petition creditor desires to participate in the existing plan, and meets other criteria, a post-petition claim may be filed with and, depending on the facts, allowed or disallowed by the Court.\nAt least two treatises agree with this interpretation of section 1305 and its relationships with other sections of the Bankruptcy Code and the Bankruptcy Rules.[1] But more importantly other bankruptcy courts have reached the same conclusion. Two recent and well written opinions analyze the language of the Bankruptcy Code sections that touch on this subject. Judge William H. Brown for the Bankruptcy Court in the Western District of Tennessee wrote:\nSection 1329 of the Bankruptcy Code permits, under certain restrictions, the post-confirmation modification of a Chapter 13 plan; however, such modifications are limited by the statute to the following purposes:\n(1) increase or reduce the amount of payments on claims of a particular class provided for by the plan;\n(2) extend or reduce the time for such payments; or\n(3) alter the amount of the distribution to a creditor whose claim is provided for by the plan, to the extent necessary to take account of any payment *343 of such claim other than under the plan.\n11 U.S.C. \u00a7 1329(a).\nIt is obvious from the clear language of this statute that post-confirmation modifications do not contemplate the forced addition of postpetition debts.\nSection 1322(b)(6) permits a Chapter 13 plan to \"provide for the payment of all or any part of any claim allowed under section 1305 of this title.\" Therefore, it is necessary to look to \u00a7 1305 to determine which postpetition claims may be allowed. That Code section is captioned \"Filing and allowance of postpetition claims,\" and subsection (a) of \u00a7 1305 provides:\n(a) A proof of claim may be filed by any entity that holds a claim against the debtor \u0097\n(1) for taxes that become payable to a governmental unit while the case is pending; or\n(2) that is a consumer debt, that arises after the date of the order for relief under this chapter, and that is for property or services necessary for the debtor's performance under the plan.\n11 U.S.C. \u00a7 1305(a).\nA reading of this statute makes it obvious that it is within the postpetition creditor's control whether a proof of claim is filed for a postpetition debt. There is no provision in \u00a7 1305(a) for the debtor to force a postpetition creditor to file a proof of claim or for the debtor to file a proof of claim on behalf of a postpetition creditor. See e.g., In re Farquhar, 112 B.R. 34 (Bankr. D.Colo.1989); In re Glover, 107 B.R. 579 (Bankr.S.D.Ohio 1989); In re Roseboro, 77 B.R. 38 (Bankr.W.D.N.C.1987). In like manner, the Bankruptcy Rule governing the debtor's filing of a claim on behalf of a creditor addresses the situation where a creditor fails to file a proof of claim \"on or before the first date set for the meeting of creditors called pursuant to \u00a7 341(a) of the Code.\" F.R.B.P. 3004; see also In re Farquhar, 112 B.R. at 36.\nIn re Goodman, 136 B.R. 167, 169-170 (Bankr.W.D.Tenn.1992). Judge Richard S. Stair for the Bankruptcy Court in the Eastern District of Tennessee, wrote:\nCode \u00a7 1329 permits the postconfirmation modification of a Chapter 13 plan within the limits imposed by the statute. The statute does not contemplate, nor does the unambiguous language permit, postconfirmation modifications forcing the addition of postpetition creditors. See In re Goodman, 136 B.R. 167, 169 (Bankr.W.D.Tenn. 1992). Clearly, \u00a7 1329 cannot be used by debtors as a vehicle to bring postpetition consumer creditors within the ambit of a confirmed Chapter 13 plan.\nSection 1322(b)(6) permits, but does not require, a debtor to provide in his or her plan for the payment of postpetition consumer claims allowed under \u00a7 1305(a)(2). However, it is within the postpetition consumer creditor's control whether a proof of claim is filed for the postpetition debt. The debtor has no standing under \u00a7 1305 or the Federal Rules of Bankruptcy Procedure to file a proof of claim on behalf of a postpetition consumer creditor. See, e.g., In re Farquhar, 112 B.R. 34 (Bankr. D.Colo.1989); In re Glover, 107 B.R. 579 (Bankr.S.D.Ohio 1989); In re Roseboro, 77 B.R. 38 (Bankr.W.D.N.C.1987); In re Rothman, 76 B.R. 38 (Bankr.E.D.N.Y. 1987); In re Dickey, 64 B.R. 3 (Bankr. E.D.Va.1985).\nIn re Trentham, 145 B.R. 564, 567 (Bankr. E.D.Tenn.1992) (footnote omitted)[2]. About ten years earlier, in a short but precise opinion, Judge L. Chandler Watson of this Court reached the same conclusion based on facts that:\ndebt arose subsequent to the filing of the debtor's petition which initiated this case, in view of the statements in the debtor's Chapter 13 statement and the fact that this conclusion was not contradicted at said hearing, after the bankruptcy judge expressed the view that the debt in question appeared to be a post-petition debt.\n*344 In re Bledsoe, 26 B.R. 230 (Bankr.N.D.Ala. 1982).[3]\nBased on the parties' agreement that the subject debt is a post-petition debt, the Court finds that the Debtor's amendment and motion are due to be denied and the creditor's objection is due to be sustained, as a matter of law.\nIt is therefore ORDERED, ADJUDGED AND DECREED that the Amendment to Schedules and Motion to Modify filed by the Debtor is hereby DENIED and that the Objection to Amendment to Schedules and Motion to Modify filed by Wayne-Dalton Corp. is hereby SUSTAINED.\nNOTES\n[1] David G. Epstein, et al., Bankruptcy \u00a7 9-4 at 615-616 (1992); Hon. Keith M. Lundin, Chapter 13 Bankruptcy \u00a7 7.38 at 7-103\u00977-104 (1994).\n[2] The Court notes, \"Fed.R.Bankr.P. 3004 authorizes the debtor or trustee to file a proof of claim within 30 days after expiration of the claims bar date on behalf of a creditor where the creditor has failed to file a claim on or before the first date set for the meeting of creditors called pursuant to \u00a7 341 of the Code.\" This rule does not address postpetition claims. Id. at 567 n. 5.\n[3] The Debtor analogizes her situation to the curing of mortgage which was the subject of In re Hoggle, 12 F.3d 1008 (11th Cir.1994). Hoggle involved the curing of a default in a prepetition debt not the addition of an unrelated postpetition debt.\n"} -{"text": "\n118 Cal.Rptr.2d 42 (2002)\n96 Cal.App.4th 1293\nGUARDIANSHIP OF MELISSA W., a Minor.\nFran W. et al., Petitioners and Appellants,\nv.\nTerry W., Objector and Respondent.\nNo. B151211.\nCourt of Appeal, Second District, Division Three.\nMarch 19, 2002.\nAs Modified April 11, 2002.\nReview Denied May 22, 2002.\n*43 Melodye S. Hannes, Van Nuys, and Richard A. Marcus, Los Angeles, for Petitioners and Appellants.\nFreda D. Pechner, Garden Valley, for Objector and Respondent.\nALDRICH, J.\n\nINTRODUCTION\nGrandparents petitioned for guardianship of their minor granddaughter, Melissa. Following trial, the court found Melissa's father to be a fit parent, denied grandparents' petition, and ordered the child returned to father \"forthwith.\" At grandparents' request, the trial court briefly stayed the relocation to enable the child to finish the school year. Grandparents filed their appeal, but before returning the child to her father, grandparents' counsel accompanied 16-year-old Melissa to the Bahamas where the child was purportedly married with grandparents' consent.[1] Once father learned of the marriage, he moved this court for dismissal of the appeal.\nThe circumstances of this case require imposition of the ultimate sanction of dismissal of the appeal. Grandparents may not obtain review of the judgment while at the same time being in violation of the very judgment from which they appeal. Additionally, the conduct of grandparents and counsel in arranging Melissa's emancipation by way of the purported marriage has rendered moot the issue of guardianship. For these reasons, we grant father's motion and dismiss this appeal. We also impose monetary sanctions against grandparents' counsel for continuing to prosecute the appeal after it became moot by reason of Melissa's marriage.\n\nSUMMARY OF FACTS AND PROCEEDINGS\nOn March 28, 1997, Cheryle, Melissa's mother, died. She was survived by her *44 husband, Terry (father) and their two daughters, then 11-year-old Melissa and 10-year-old Courtney. The family was residing in Los Angeles. Appellants are the decedent's parents and Melissa's grandparents, Fran and Arthur W. (grandparents). Father later relocated to Placerville but allowed his daughters to live with grandparents in Los Angeles to finish the school year. On July 23, 1999, grandparents filed a petition for guardianship of the minors. Eventually, Courtney returned to her father's custody.\nOn June 12, 2001, after three days of trial of the petition for guardianship of Melissa, the trial court issued a judgment denying the petition. The trial court specifically found, inter alia, that father is a fit and proper parent to his children; he has the ability to provide for their needs; it is in Melissa's best interest to be returned to her father's custody; and there is no basis for the trial court to interfere with the constitutionally protected fundamental right of father to parent his children. The trial court then ordered that Melissa \"shall be returned to the custody of Respondent Father, forthwith,\" (Italics added.) At their request for time to allow Melissa to finish the school year and the grandparents to appeal, the trial court granted grandparents a brief stay of the judgment to July 7, 2001.\nOn June 27, 2001, grandparents filed their notice of appeal from the judgment denying the guardianship petition.\nThat same day, grandparents executed purported consent forms, granting their permission for Melissa, then age 16, to marry 19-year-old Austin H. On the consent forms, grandparents indicated they were consenting as Melissa's legal guardians, despite the fact the June 12, 2001, judgment unambiguously denied grandparents' guardianship petition.[2] This purported consent was written on the letterhead of grandparents' counsel, Melodye S. Hannes.\nOn June 28, 2001, Melissa arrived in the Bahamas accompanied by attorney Hannes.\nMeanwhile, grandparents concurrently moved the trial court for a stay of the judgment pending appeal on the ground Melissa would suffer detriment if she were to reside with father during that time. In seeking that stay, grandparents failed to disclose to the trial court Melissa's imminent nuptials.\nOn June 29, 2001, grandparents filed a petition for writ of supersedeas in this court seeking a stay of the order directing Melissa's return to father, reiterating the grounds raised in the lower court, and likewise omitting any mention of the planned wedding.\nOn July 2, 2001, Melissa was purportedly married to Austin H. in the Bahamas. Attorney Hannes executed a Bahamian \"Certificate by Parents or Guardian of Consent to Marriage by a Minor,\" indicating the grandparents' consent to the marriage. *45 In helping to secure the marriage in the Bahamas, counsel apparently did not disclose to the Bahamian Registrar General the June 12, 2001 judgment denying the guardianship petition.[3] The marriage was solemnized in the presence of Hannes as one of the witnesses.\nOn July 7, 2001, Melissa returned to her father in Placerville, where she remained until month's end.\nOn July 19, 2001, grandparents filed a request in this court for an immediate stay of the judgment pending appeal. On July 25, 2001, this court summarily denied the petition for writ of supersedeas and request for stay.\nOn July 30, 2001, father first learned of his daughter's Bahamian marriage when he found a note in his mailbox signed \"Melissa H.,\" Austin's surname. Father moved for a dismissal of grandparents' appeal, arguing the purported marriage had the effect of emancipating Melissa so as to render the appeal moot; grandparents' defiance of the judgment denying the guardianship petition precluded them from seeking review of that judgment; and grandparents' failure to voluntarily dismiss the appeal upon the marriage warranted the imposition of sanctions.\nWe issued an order to show cause why the appeal should not be dismissed, specially set the matter, and heard oral argument.\n\nDISCUSSION\n\n1. Effect of grandparents' defiance of judgment on their right to appeal.\n\nGrandparents were promptly bound by the June 12, 2001, judgment denying their petition for guardianship, absent an applicable stay. (Code Civ. Proc., \u00a7 917.7[4].)[5] As indicated, the judgment included a provision for a brief stay to July 7, 2001, but only of \"the order to return Melissa\" to her father. The purpose of staying relocation for a month was to enable Melissa to finish the school year. The court did not stay its order denying the guardianship petition and did not stay its order confirming custody in the father \"forthwith.\" (Italics added.) The trial court's unambiguous denial of the guardianship petition was immediately effective and binding upon the parties. (Code Civ. Proc., \u00a7 917.7.) Because father retained legal custody, grandparents had no authority to consent as guardians to Melissa's *46 marriage. Likewise, their counsel undermined the June 12, 2001, judgment by accompanying Melissa to the Bahamas and participating in procuring a marriage designed to alter the child's legal status.[6] In doing so, grandparents and counsel thwarted the very judgment of which they now seek review. \"It is illogical and inequitable for appellants] to seek appellate review of the very orders [they have] blatantly violated.\" (In re Kamelia S. (2000) 82 Cal.App.4th 1224, 1227, 98 Cal. Rptr.2d 816.)\n\"It is well settled that this court has the inherent power to dismiss an appeal by any party who has refused to comply with the orders of the trial court. [Citations.]\" (TMS, Inc. v. Aihara (1999) 71 Cal.App.4th 377, 379, 83 Cal.Rptr.2d 834.) \"A party to an action cannot, with right or reason, ask the aid and assistance of a court in hearing his demands while he stands in an attitude of contempt to legal orders and processes of the courts of this state. [Citations.]\" (MacPherson v. Mac-Pherson (1939) 13 Cal.2d 271, 277, 89 P.2d 382.)\nA formal judgment of contempt is not a prerequisite to exercising our power to dismiss. (Alioto Fish Co. v. Alioto (1994) 27 Cal.App.4th 1669, 1683, 34 Cal. Rptr.2d 244.) The power to dismiss \"`applies to wilful disobedience or obstructive tactics without such an adjudication.' [Citations.]\" (Ibid.)\nThe power to dismiss an appeal for violation of a court order has been exercised in the child dependency context. In Kamelia S., the child was ordered placed in foster care. The father appealed from that order, and while the appeal was pending, he took the law into his own hands and absconded with the minor. (In re Kamelia S., supra, 82 Cal.App.4th at pp. 1225-1226, 98 Cal.Rptr.2d 816.) The father's appeal was dismissed on the ground that appellant was not entitled to obtain review of the juvenile court's order while at the same time being in contempt of the very order from which he appealed. (Ibid.)\nThese authorities compel the conclusion that by undermining the trial court's judgment, grandparents and counsel have forfeited their right to prosecute this appeal. Grandparents lacked authority to consent to Melissa's marriage. Nonetheless, they and counsel helped arrange the Bahamian marriage to emancipate Melissa for the purpose of negating the effect of the judgment confirming custody in father. Their obstructive tactics call for the exercise of this court's inherent power to impose the ultimate sanction of dismissal.\n\n2. Effect of Melissa's purported marriage on continued existence of controversy to be resolved on appeal.\n\nAs an additional and independent ground for dismissing this appeal, it appears the matter has been rendered moot by Melissa's purported marriage. The appeal was taken from the judgment denying grandparents' petition for guardianship of Melissa. Grandparents continue to insist the marriage is valid. If, as grandparents contend, Melissa is validly married, she is currently emancipated by operation of law (Fam.Code, \u00a7 7002, subd. (a)) and no longer requires the protection of the guardianship grandparents seek. (In re Katherine R. (1970) 6 Cal.App.3d 354, 357, 86 Cal. Rptr. 281.) The conduct of grandparents and their counsel in helping to arrange the *47 marriage has mooted the issue of guardianship. In view of Melissa's present status as an emancipated minor, review and reversal of the judgment denying guardianship would be an idle act because this court cannot afford grandparents any effective relief from that judgment. Therefore, the appeal is also dismissed on the ground of mootness.\n\n3. Sanctions for frivolous appeal.\n\nFather requests monetary sanctions for grandparents' prosecution of a frivolous appeal.\n\"[A]n appeal should be held to be frivolous only when it is prosecuted for an improper motive\u0097to harass the respondent or delay the effect of an adverse judgment\u0097or when it indisputably has no merit\u0097when any reasonable attorney would agree that the appeal is totally and completely without merit. [Citation.]\" (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650, 183 Cal.Rptr. 508, 646 P.2d 179, italics added.)\nHaving reviewed the record, we conclude that under either an objective standard (see, e.g., Maple Properties v. Harris (1984) 158 Cal.App.3d 997, 1008-1009, 205 Cal.Rptr. 532 [sanctions imposed because appeal indisputably lacked merit]), or a subjective standard (see, e.g., In re Marriage of Stich (1985) 169 Cal.App.3d 64, 77, 214 Cal.Rptr. 919 [sanctions imposed because appeal was pursued solely for purpose of delay]), or a combination of the two standards (see, e.g., Pierotti v. Torian (2000) 81 Cal.App.4th 17, 32, fn. 9, 96 Cal.Rptr.2d 553 [frivolous nature of appeal provided evidence it was prosecuted solely for purpose of delay]), this appeal is frivolous.\nIn compliance with Flaherty's procedural requirements, we advised the parties we were considering the imposition of sanctions and pursuant to said advisement, we heard oral argument on the subject. Father's counsel filed a declaration seeking fees and grandparents' counsel responded thereto. This opinion constitutes the written statement of reasons required by Flaherty. (In re Marriage of Flaherty, supra, 31 Cal.3d at p. 654, 183 Cal.Rptr. 508, 646 P.2d 179.)\nAn appeal that may have been meritorious when commenced can become frivolous by the occurrence of subsequent events which render the appeal moot. (Hale v. Laden (1986) 178 Cal. App.3d 668, 674-675, 224 Cal.Rptr. 182; Wax v. Infante (1983) 145 Cal.App.3d 1029, 1031, 194 Cal.Rptr. 14.) It is the duty of appellants and their counsel promptly to dismiss an appeal once it becomes moot \"and not put respondent, his counsel, and this court to the time and expense of reviewing an appeal that had become moot....\" (Wax v. Infante, supra, at p. 1031, 194 Cal.Rptr. 14.)\nEven assuming the appeal may have been meritorious when commenced, until the marriage is judicially annulled, Melissa's marriage emancipates her by operation of law. This state of affairs renders moot the appeal from the judgment denying the guardianship petition. Nonetheless, grandparents and their counsel persisted in prosecuting the appeal, thereby putting father and this court to needless time and expense.\nFather's counsel, Freda D. Pechner submitted a declaration and supporting exhibit seeking $22,803.75 in legal fees incurred in connection with this appeal. We have examined counsel's declaration and the opposition thereto and heard oral argument on this issue. Based thereon, we conclude the reasonable amount of the expenses incurred by father in defending this appeal following the July 2, 2001 marriage is $13,004.[7]\n\n\n*48 DISPOSITION\nThe order to show cause is discharged. Father's motion to dismiss the appeal is granted and the appeal is dismissed. Father shall recover costs on appeal. In addition Melodye S. Hannes and Richard A. Marcus are directed to pay father $13,004 as sanctions for prosecuting a frivolous appeal.\nThe matter is referred to the State Bar for investigation. In that the dismissal is \"based in whole or in part on the misconduct, incompetent representation, or willful misrepresentation of an attorney\" (Bus. & Prof.Code, \u00a7 6086.7, subd. (b)), and because sanctions exceed $1,000.00 (Bus. & Prof.Code, \u00a7 6086.7, subd. (c)), the clerk of this court is directed forthwith to send a copy of this opinion to the State Bar.\nWe concur: KLEIN, P.J., and KITCHING, J.\nNOTES\n[1] The issue before us is whether the appeal is subject to dismissal due to the conduct of grandparents and their counsel. We do not pass on the validity of the purported marriage, which question is currently pending before the El Dorado Superior Court in father's annulment proceeding.\n[2] Any claimed reliance by grandparents on a pretrial order granting temporary guardianship was unsupported. By way of background, on March 14, 2001, the trial court ordered temporary guardianship of Melissa to grandparents, pendente lite, to continue until May 21, 2001. Apparently, no letters of guardianship were issued. Father sought a writ of mandate in this court challenging the temporary guardianship. On April 12, 2001, in response to father's petition, this court issued a stay of all proceedings except for trial of the guardianship petition. This stay had the effect of placing guardianship in abeyance pending trial. Thus, after May 21, 2001, grandparents were no longer Melissa's temporary guardians. Moreover, irrespective of any claimed status as temporary guardians of Melissa prior to trial, grandparents clearly lacked authority after the adverse judgment to consent to Melissa's marriage, and counsel should have been aware of that fact.\n[3] We note that Hannes asserts she in fact supplied a copy of the judgment to the Bahamian Registrar General. However, in an exhibit attached to father's motion to dismiss the appeal, which exhibit was received without objection, the Director of Legal Affairs of the Office of the Attorney General of the Commonwealth of the Bahamas (the Director) opined the Bahamian Registrar General properly accepted grandparents' consent \"as he was not in possession of the judgment.\"\n\nThe Director explained application would have to be made to the Bahamian Supreme Court to have the marriage declared void on the ground consent was not validly given. Similarly, California law requires written consent of parents or guardians in order for a minor to marry. (Fam.Code, \u00a7 302.)\n[4] Code of Civil Procedure section 917.7 states, \"The perfecting of an appeal shall not stay proceedings as to those provisions of a judgment or order which award, change, or otherwise affect the custody, including the right of visitation, of a minor child in any civil action.... However, the trial court may in its discretion stay execution of these provisions pending review on appeal or for any other period or periods that it may deem appropriate\n[5] Grandparents contend because the trial court stayed the judgment, they had a goodfaith legal argument that they were Melissa's legal guardians at the time they executed the consent forms. However, as explained in footnote 2, ante, at the time of trial the grandparents were no longer Melissa's temporary guardians. Therefore, the stay of the judgment to July 7, 2001, did not have the effect of reviving or extending guardianship status to the grandparents during the period of the stay.\n[6] Counsel contend they did nothing more than fulfill their obligation to advise their clients, grandparents and Melissa, of their legal options. However, there is a great difference between an attorney's advising a client of his or her legal options and the consequences thereof, and affirmative conduct taken to frustrate a valid judgment not to one's liking by accompanying a child to a foreign jurisdiction for the purpose of entering into a questionable marriage.\n[7] The court is aware that a number of proceedings are pending in El Dorado County, including an action to annul the purported Bahamian marriage and a damages action against grandparents and their counsel. However, to reiterate, the only issue to be decided by this court in this opinion is whether the instant appeal is subject to dismissal,\n"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 15-7965\n\n\nUNITED STATES OF AMERICA,\n\n Plaintiff - Appellee,\n\n v.\n\nDOMINIQUE A. HANKINS, a/k/a Dominique Hankins,\n\n Defendant - Appellant.\n\n\n\nAppeal from the United States District Court for the Eastern\nDistrict of Virginia, at Norfolk. Rebecca Beach Smith, Chief\nDistrict Judge. (2:12-cr-00182-RBS-LRL-1)\n\n\nSubmitted: April 19, 2016 Decided: April 21, 2016\n\n\nBefore AGEE, DIAZ, and THACKER, Circuit Judges.\n\n\nAffirmed by unpublished per curiam opinion.\n\n\nDominique A. Hankins, Appellant Pro Se. V. Kathleen Dougherty,\nOFFICE OF THE UNITED STATES ATTORNEY, Norfolk, Virginia, for\nAppellee.\n\n\nUnpublished opinions are not binding precedent in this circuit.\n\fPER CURIAM:\n\n Dominique A. Hankins appeals the district court\u2019s order\n\ndenying his postjudgment motion seeking appointment of counsel\n\nand requesting to serve his federal sentence concurrently with\n\nhis state sentence. We have reviewed the record and find no\n\nreversible error. Accordingly, we affirm for the reasons stated\n\nby the district court. United States v. Hankins, No. 2:12-cr-\n\n00182-RBS-LRL-1 (E.D. Va. Dec. 2, 2015). We dispense with oral\n\nargument because the facts and legal contentions are adequately\n\npresented in the materials before this court and argument would\n\nnot aid the decisional process.\n\n\n\n AFFIRMED\n\n\n\n\n 2\n\f"} -{"text": "179 F.2d 672\nSOCONY-VACUUM OIL CO. Inc.,v.SMITH.\nNo. 12708.\nUnited States Court of Appeals, Fifth Circuit.\nJan. 25, 1950.\n\nSamuel C. Lipscomb, Beaumont, Tex. A. D. Lipscomb, Beaumont, Tex., for appellant.\nGeorge E. Duncan, Beaumont, Tex., L. J. Benckenstein, Beaumont, Tex., for appellee.\nBefore WALLER, BORAH, and RUSSELL, Circuit Judges.\nBORAH, Circuit Judge.\n\n\n1\nThis cause in admiralty arose out of a collision in the Sabin-Neches Canal between the single screw tanker Sachem and three loaded steel oil barges which, with one other, were being towed by the tug George A. Butler upon a hawser astern.\n\n\n2\nCharles C. Smith, managing co-owner of the tug and the owner or charterer of the barges, filed a libel against the Sachem, following which the respondent-appellant filed its claim, answer and cross libel. The two libels were tried together and a final decree was entered on January 28, 1949 holding the Sachem solely at fault for the collision, fixing libelant's damages in the amount of $92,508.70 with costs, and dismissed appellant's cross libel. From this final decree the claimant of the Sachem has appealed.\n\n\n3\nThe principal ground urged for upsetting the decree is that the findings of fact by the District Court, based solely on the deposition testimony of appellee's witnesses, are contrary to the weight of the evidence. The appellant also insists that this court should determine the issue de novo. This we shall do.1\n\n\n4\nThe collision occurred in a straight reach of the Sabine-Neches Canal, at a point approximately 3.93 miles above the Port Arthur Pleasure Pier Bridge, at 5:25 a.m., November 9, 1945. The canal at and near the point of collision has a surface width of 500 feet, a bottom width of 350 feet and a depth of 34 feet.\n\n\n5\nThe George A. Butler, a 575 horsepower Diesel tug, towing in tandem, and in the order named, the gasoline laden barges CCS 600, Foster Smith, Joseph Smith and Dave Scruggs was proceeding up the canal at a speed of between 3 1/2 and 4 miles per hour over the ground, bound for Port St. Joe, Florida. The night was dark and clear, the wind southeast and a strong flood tide was running about three miles per hour. The barges, each approximately 186 feet long, 36 feet wide, were heavily loaded and had a freeboard of about two feet. The length of the entire flotilla was about 880 feet. After passing through the Port Arthur Pleasure Pier Bridge, with the mate at the wheel, the tug and tow proceeded up the channel on the port side of the canal near the center of the channel, and this course she pursued until overhauled by the Sachem.\n\n\n6\nAt 2:52 a.m. on the morning of the day in question the Sachem, with a Sabine Bar pilot on board, left her anchorage off Sabine Pass and proceeded up channel bound for Beaumont, Texas, where arrangements had been made for her arrival at 7:00 a.m. The Sachem- 480 feet long, 68 foot beam, 37 feet deep- was proceeding light in water ballast with a draft of 10 feet 8 inches forward and 18 feet 2 inches aft. She proceeded up channel without incident, passing through the Port Arthur Pleasure Pier Bridge at 5:08 a.m., with her engine half speed ahead. With the flood tide underfoot and the wind out of the southeast and against her starboard beam the Sachem had difficulty in maintaining steerageway and after passing through the bridge she began to sag down to the lee bank. So, in order to get back in the middle of the channel, her engine was at 5:09 a.m. put full speed ahead, and there it remained at full throttle for sixteen of the seventeen minutes immediately preceding the collision. The Sachem was being navigated from the 'monkey bridge' about 50 feet above the surface of the water. Stationed on the 'monkey bridge' were the helmsman, the master and the pilot. The pilot was directing the navigation of the vessel and the master was transmitting engine orders through the voice tube to the junior third mate, who was standing by the telegraph in the wheel house. The navigators of the Sachem first sighted the lights of a small vessel ahead off their port bow fifteen minutes before the actual collision. Shortly after picking up these lights and because of the numerous shore lights on the west bank, which were casting their reflections in the water, the pilot was for awhile uncertain whether the lights he saw were on the land or in the water. Concluding that they were not shore lights, the Sachem continued on at a speed in excess of 13 miles per hour over the ground even though the pilot well knew that a 7 mile per hour speed limit was prescribed for those waters. At 5:23 a.m. the engine of the Sachem was ordered half speed ahead and shortly thereafter she blew a one blast whistle requesting a passage on the starboard side of the vessel ahead. At this time the Sachem was in the middle of the channel and less than one-half mile astern of the tow. Despite the fact that the Sachem was the overtaking vessel and was bound to keep out of the way of the libelant's tow, and despite the fact that she received no signal from the overtaken vessel assenting to a passage, the pilot at 5:24 a.m. ordered a hard right rudder and full speed ahead, with the intention of passing the tow to starboard. In answering her rudder the Sachem started to swing right, and getting too far over smelled the bank and took a sheer to port. And then, when it became apparent that collision was inevitable, the engine was at 5:24 plus put full speed astern; but the tanker continued over to port, striking the stern barge in tow approximately 5 feet aft of the forward quarter bitts and slid forward along the next two barges of the tow, setting fire to all three barges.\n\n\n7\nIt was conceded by the master and pilot of the Sachem that the sheering of the tanker was the immediate cause of the collision. And it is apparent the sheer would not have occurred had it not been for the high and dangerous rate of speed which the Sachem maintained right up to the moment of impact. This and this alone, in the Court's view, was the proximate cause of the disaster.2 Careful navigation at moderate speed in this constricted channel was all that was needed to insure a safe passage, but that much caution was imperatively required.\n\n\n8\nThe negligence of the Sachem was so gross as to cast upon her the burden of proving by clear and convincing evidence contributory fault on the part of the tug. Any doubts arising from such proof are to be resolved in favor of the tug.3\n\n\n9\nThe faults claimed against the Butler are: (1) that the barges failed to display the lights required by the navigation rules, (2) that the barges were at an angle in the channel and effectively blocked the channel, (3) that the tug was proceeding up the port side of the channel in violation of the narrow channel rules, (4) that the appellee's navigator failed to answer the passing signal.\n\n\n10\nThe witnesses for the Sachem swore that they saw no lights on the barges were lighted. Considering the fact that each light was a separate, independent unit, it is improbable and unreasonable to believe that, within so short a time after the tug had set sail, none of the lights were burning. Positive testimony by those on the tug, who rigged up the lights and were in a position to see them and know of their condition will not be lightly rejected because other persons, whose duty it was to have seen them, either failed to observe or happened not to see them. Negative evidence of this character cannot be accepted to outweigh positive evidence. The failure to observe a light does not disprove its existence. Applying the usual rules as to probabilities, this court should be hesitant to hold that the officers and crew of the tug would have neglected not only the commands of the law but also the requirements of prudent navigation as by so doing they would be imperiling not only the tug and its highly volatile cargo but their own lives as well.\n\n\n11\nA most significant circumstance bearing upon this question of lights is the fact that although the failure of the tug in this regard is made the chief basis of the streamer's defense, the fact that such lights did not exist was not noted in the log of the Sachem at the time. And this notwithstanding the fact that the statutes of the United States provide: 'In every case of collision in which it is practicable so to do, the master shall, immediately after the occurrence, cause a statement thereof, and of the circumstances under which the same occurred, to be entered in the official log book.' Revised Statutes, Sec. 4290, 46 U.S.C.A. \u00a7 201, subd. 12.\n\n\n12\nAs was said in The Buenos Aires, 2 Cir., 5 F.2d 425, 430: 'It certainly is a matter of great significance that in a matter of such vital importance as the absence or failure to see the side lights of a sailing vessel, which was sent to the bottom by a collision with a streamer, the log of the streamer made to mention of the important and essential circumstance that the bark was displaying no lights at the time the collision occurred. It is hard to believe that so important an omission would have occurred had the lights not been burning.'\n\n\n13\nThis significant conduct on the part of the steamer, together with other facts and circumstances in the case, convince us that the lights on the barges were burning at the time of the collision. Nor has the appellant shown by clear and convincing evidence that the barges did not carry a bright light on each end as required by the pilot rules for inland waters. Any doubt arising from the proof must be resolved in favor of the tug. The City of New York, supra. But if, despite evidence to the contrary, it could be rightly said that the proof shows that none of the barges save the lead barge carried a light on the bow we would still say that the barges carried five bright lights and that the presence of three more lights on the bows could not, under the facts of this case, reasonably be regarded as contributing to the collision, even though the burden of establishing this was on the tow.\n\n\n14\nThe testimony is all one way that the tug was on the port side of the fairway but whether any of the barges were tailing toward and beyond the center of the channel presents a point on which the evidence is conflicting. The master of the Sachem testified that he first saw a barge 150 feet off the port bow, 40 feet to starboard of the center line of the canal. The bar pilot's testimony is to the same effect except that he saw the barge about 90 feet away. This testimony of the master and bar pilot in respect to distances are but poor estimates at best and are of doubtful value when considered in the light of the physical facts. Considering the fact that the streamer's forward draft was 9 1/2 feet less than her draft aft, that the forecastle head was 35 feet above the water line, and that the gun tubs on the forecastle head were elevated an additional 15 feet above the deck, it is obvious that these witnesses did not and could not have seen the barges at that distance. Nor could they have seen the barges within 600 to 1000 feet ahead of the bow, since their movements on the 'monkey bridge' were restricted to 3 1/2 or 4 feet on either side of the center line of the vessel, due to the presence of gun tubs on the port and starboard wings. The lookout, though inattentive to duty in that he did not report the presence of the barges in the channel nor the three lights which he had previously seen ahead, was admittedly in the most advantageous position to observe the channel ahead. Corroborating the testimony for the tug, places the tow on the port side of the center of the channel. We accept his testimony as true.\n\n\n15\nThe applicable Inland Rule prevailing on November 9, 1945 reads as follows: 'In narrow channels every steam vessel shall, when it is safe and practicable, keep to that side of the fairway or mid-channel which lies on the starboard side of such vessel.' 33 U.S.C.A. \u00a7 210, Art. 25\n\n\n16\nA fault charged against the appellee is that the tug was at a place in the channel where she had no right to be, and that since no satisfactory explanation was given for her being there, that the burden was on the tug to show not merely that her fault might not have been one of the causes, or that it probably was not, but that it could not have been one of the contributing causes of the collision, citing The Pennsylvania, 19 Wall. 125, 86 U.S. 125, 22 L.Ed. 148. It is true that the tug was on the port side of the center of the channel in violation of the statute and that the explanation which she gave for being there is not sufficient. But that did not make her an outlaw. And she is not to be condemned if she can prove that her statutory fault was a remote one and could not have contributed to the collision. The evidence indubitably shows that the Sachem was fully aware of the tug's position in ample time to navigate in reference to her and her barges so as to pass them safely. The Sachem had over 175 feet of navigable waterway within which to pass on the starboard side of the tow and could have easily avoided her by proper navigation. We accordingly hold that the violation by the Butler of Article 25 of the Inland Rules was a condition and not a contributing cause of the collision.4\n\n\n17\nThe Sachem was the overtaking vessel and she was duty bound to keep out of the way of the Butler's tow. Her obligation was to keep well clear not only throughout the approach and during the actual passing, but until she was finally past and clear. The contention that the tug was at fault for failing to answer immediately the one blast signal of the Sachem, and to hold her course and speed, misconceives the rule of law applicable to the instant situation,5 and ignores the factual situation existing at the time the one blast signal was blown. Considering the speed of the Sachem and her close proximity to the tow at the time her one blast signal was blown, and the fact that her navigators, thinking that they were well over a thousand feet from the tug, had intended to slow down and give another whistle, it would seem to be immaterial whether the tug had answered with a one blast signal or with a danger signal. Had the former been given, the Sachem would not have been excused for the resulting collision since she assumed all risks attending her attempted passage.6 And had the tug answered with a danger signal, it would have been impossible for her to have stopped her forward momentum in less than three or four minutes. There is nothing in the complaint that the mate failed to accept the whistle signal of the steamer. He did all that was required had he in fact accepted the signal of the overtaking vessel.\n\n\n18\nWe agree with the district court in the conclusion that the Sachem was wholly to blame and that the Butler was free from fault.\n\nThe decree is\n\n19\nAffirmed.\n\n\n\n1\n Mosher v. Parker Brothers and Company, Inc., 5 Cir., 1950, 178 F.2d 419\n\n\n2\n The Ditmer Koel, 5 Cir., 65 F.2d 555; The Howard Reeder, 4 Cir., 207 F. 929\n\n\n3\n The City of New York, 147 U.S. 72, 85, 13 S.Ct. 211, 37 L.Ed. 84; The Ludvig Holberg, 157 U.S. 60, 15 S.Ct. 477, 39 L.Ed. 620; The Umbria, 166 U.S. 404, 17 S.Ct. 610, 41 L.Ed. 1053; The Victory (The Plymothian), 168 U.S. 410, 423, 18 S.Ct. 149, 42 L.Ed. 519\n\n\n4\n Matton Oil Transfer Corporation v. The Green, 2 Cir., 129 F.2d 618, 620; The Syosset, 2 Cir., 71 F.2d 666, 668; The La Bretagne, 2 Cir., 179 F. 286, 288\n\n\n5\n The Industry, 2 Cir., 29 F.2d 29, 30; The S. & H. No. 2, Inc., 2 Cir., 119 F.2d 666\n\n\n6\n Warner Co. v. Independent Pier Co., 278 U.S. 85, 89, 49 S.Ct. 45, 73 L.Ed. 195, 197\n\n\n"} -{"text": "\n859 So.2d 931 (2003)\nEthel M. DAVIS, et al., Plaintiffs-Appellants,\nv.\nDr. Steven M. ATCHISON, et al., Defendants-Appellees.\nNo. 37,832 CA.\nCourt of Appeal of Louisiana, Second Circuit.\nOctober 29, 2003.\n*933 Murphy J. White, Mansfield, for Appellants.\nRobert G. Pugh, Jr., Shreveport, for Appellees, Steven M. Atchison, M.D. and William L. Overdyke, M.D.\nRobert W. Robison, Jr., Baton Rouge, for Appellee, Willis-Knighton Medical Center.\nBefore WILLIAMS, CARAWAY and PEATROSS, JJ.\nCARAWAY, J.\nThis medical malpractice action was instituted against two physicians who performed bilateral simultaneous total knee replacement surgeries on an eighty-two year old woman. The surgeries had been cleared by the patient's primary care physician despite her age and diabetic and hypertensive history. Though the surgery occurred without incident, the patient developed heart and respiratory difficulties in the recovery room. Thereafter, she experienced further complications and remained hospitalized until her eventual death nearly one month after the knee procedures. The trial court granted summary judgment in favor of both doctors. After de novo review, we affirm.\n\nFacts\nOn February 17, 2000, Ethel Davis visited the offices of Dr. Steven Atchison, an orthopedic surgeon, with complaints of long-standing arthritic pain in both knees. Although Dr. Atchison recommended knee injections, Davis insisted that she desired bilateral knee replacement surgery because long-term conservative treatment had offered her no relief. Davis and her husband, William, inquired about the possibility of simultaneous bilateral knee replacement surgery. Dr. Atchison disclosed both the benefits and risks attendant to such surgery and Davis opted for the simultaneous procedure. Dr. Atchison informed Davis that she would be required to obtain a medical evaluation for preoperative clearance from a primary care physician. For that evaluation, Davis chose her long-time primary care physician, Dr. William Dillard, who approved her for the surgery on February 24, 2000.\nOn March 28, 2000, Davis underwent bilateral simultaneous total knee arthroplasties at Willis Knighton Medical Center without incident. Dr. Atchison, assisted by Dr. William Overdyke, performed the procedure on Davis's right knee. Dr. Overdyke was assisted by Dr. Atchison in performing the left knee procedure. Davis entered the recovery room \"awake, alert and in stable condition.\" However, while in the recovery room, Davis's heart rate and blood pressure dropped and she experienced respiratory distress. She also had periods of unresponsiveness, during which she aspirated. Davis was later placed on a ventilator and required adjustments to her insulin dosage as her diabetes had become uncontrollable. Davis remained hospitalized until her death on April 26, 2000, due to an infection and the overall deterioration of her heart, lung, kidney and intestinal functions.\n*934 William Davis and the eleven Davis children filed a medical review panel petition against Drs. Atchison and Overdyke and Willis Knighton Medical Center. The medical review panel unanimously rejected the Davis family claims, concluding that the dual surgeries were not precluded by her age and medical condition and posed no greater risk than a single knee replacement.\nThe Davis family instituted the present malpractice suit against the two surgeons and Willis Knighton Medical Center, specifically alleging that due to Davis's age and medical conditions, the physicians were at fault in performing the simultaneous knee replacement surgery which caused her death. Drs. Atchison and Overdyke filed motions for summary judgment supported by the findings of the medical review panel. After the trial court granted summary judgment in favor of the doctors and dismissed the malpractice action against them, this appeal ensued.\n\nDiscussion\nOn appeal, the plaintiffs contend that the summary judgment was inappropriate because there exists conflicting expert opinions as to whether the bilateral knee replacement should have been performed on Ethel Davis.\nA motion for summary judgment will be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact, and that mover is entitled to judgment as a matter of law. La. C.C.P. art. 966 B. This article was amended in 1996 to provide that the summary judgment procedure is designed to secure the just, speedy, and inexpensive determination of every action. The procedure is favored and shall be construed to accomplish these ends. La. C.C.P. art. 966 A(2); Racine v. Moon's Towing, 01-2837 (La.5/14/02), 817 So.2d 21. In 1997, the legislature enacted La. C.C.P. art. 966 C(2), which further clarified the burden of proof in summary judgment proceedings. This provision first places the burden of producing evidence for summary judgment on the mover (normally the defendant), who can ordinarily meet the burden by submitting affidavits or by pointing out the lack of factual support for an essential element of the opponent's case. At that point, the party who bears the burden of persuasion at trial (usually the plaintiff) must come forth with evidence (affidavits or discovery responses) which demonstrates he or she will be able to meet the burden at trial. Racine, supra, citing Frank L. Maraist and Harry T. Lemmon, Louisiana Civil Law Treatise: Civil Procedure \u00a7 6.8 (1999). Once the motion for summary judgment has been properly supported by the moving party, the failure of the non-moving party to produce evidence of a material factual dispute mandates the granting of the motion. Racine, supra. Appellate courts review summary judgments de novo under the same criteria that govern the district court's consideration of whether summary judgment is appropriate. Gray v. Investment Cars Unlimited, Inc., 36,691 (La.App.2d Cir.1/29/03), 836 So.2d 1184, writ denied, 03-0670 (La.5/2/03), 842 So.2d 1108.\nExpert opinion testimony in the form of affidavit or deposition may be considered in support of or opposition to a motion for summary judgment. Independent Fire Ins. Co. v. Sunbeam, 99-2181, 99-2257 (La.2/29/00), 755 So.2d 226, 236. See also La. C.C.P. art. 967 as amended by 2003 La. Acts, No. 545. Even so, the trial court should not make credibility determinations on summary judgment nor attempt to evaluate the persuasiveness of competing scientific studies. If a party submits admissible expert opinion evidence in opposition *935 to a motion for summary judgment which is sufficient to allow a reasonable juror to conclude that the expert's opinion on a material fact more likely than not is true, the trial judge should deny the motion and let the issue be decided at trial. Independent Fire Ins. Co., supra.\nFrom our review of the evidence, we agree with the trial court's dismissal of the defendants from this malpractice action. In support of their motions for summary judgment, the physicians submitted the favorable opinion of the medical review panel which concluded that the evidence was insufficient to support the conclusion that Drs. Atchison and Overdyke failed to meet the applicable standard of care and that the subject conduct was not a factor in causing the claimed damages. Additionally, both doctors submitted their own affidavits with a narrative summary by Dr. Atchison of his treatment of Davis. Both doctors attested that their treatment and that of the other physician was within the applicable standard of care. Finally, the doctors submitted copies of five medical journal articles which compared bilateral knee replacement with staged replacement.\nA favorable affidavit by the treating physician and a favorable opinion by the medical review panel are sufficient to establish an absence of factual support for a plaintiff's claims. Savage v. McConnell, 36,441 (La.App.2d Cir.10/23/02), 830 So.2d 414; Hinson v. Glen Oak Retirement Home, 34,281 (La.App.2d Cir.12/15/00), 774 So.2d 1134. On these grounds, we find that the evidence presented by Drs. Atchison and Overdyke is sufficient to point out an absence of factual support for the malpractice claim.\nIn opposition to the summary judgment, plaintiffs submitted only the report of Dr. Dale Bernauer who stated:\nI think that doing a bilateral total knee on a patient this age with the medical problems is ill advised. Whether it constitutes negligence, I do not feel that per se this is negligent. I do think it is not the optimum thing to do.... As stated, I cannot say it was negligent to do both knees, but I think it is ill advised on a patient this age with medical problems, and she would have been better served with doing one total knee and then doing the other one at a later date being sure that all medical problems were taken care of before this.\nIn a medical malpractice action, the plaintiff must prove the applicable standard of care, that the physician lacked this degree of knowledge or skill or failed to use reasonable care and diligence, along with his best judgment in the application of that skill, and the causal connection between the breach and the resulting injury. La. R.S. 9:2794(A); Britt v. Taylor, 37,378 (La.App.2d Cir.8/20/03), 852 So.2d 1128; Orea v. Brannan, 30,628 (La.App.2d Cir.6/24/98), 715 So.2d 108. Generally at trial, a plaintiff must prove the applicable standard of care through expert medical testimony unless, \"the physician does an obviously careless act ... from which a lay person can infer negligence.\" Pfiffner v. Correa, 94-0924 (La.10/17/94), 643 So.2d 1228 at 1233; Strange v. Shroff, 37,353 (La.App.2d Cir.7/16/03), 850 So.2d 1077. Opinions from medical professionals are necessary for the determination of the applicable standard of care and whether or not that standard was breached. Strange, supra. Expert testimony is especially necessary where the defendant in a medical malpractice action has filed a motion for summary judgment supported by expert opinion evidence that his treatment met the applicable standard of care. Britt, supra.\nThe plaintiffs' argument does not insist that no surgery should have been undertaken *936 upon Davis, but only that a shorter, single knee replacement surgery should have occurred. The plaintiffs do not show that the actual incisions upon Davis's knee were negligently performed and do not demonstrate how the complications Davis encountered in the recovery room relate to a negligent act by either defendant.\nThe only evidence presented by plaintiffs in opposition to the summary judgment was that of Dr. Bernauer, who twice concluded that the decision to perform simultaneous bilateral knee replacement surgery on Davis, while ill-advised, did not breach the standard of care so as to constitute negligence. Moreover, the report of Dr. Bernauer neither sets forth the applicable standard of care nor states that the actions of the physicians were the cause of plaintiffs' claimed damages. This evidence fails to produce factual support sufficient to establish that plaintiffs will be able to prove at trial the applicable standard of care, a breach thereof or causation. In these circumstances, summary judgment in favor of Drs. Atchison and Overdyke was appropriate. The judgment of the trial court is affirmed at plaintiffs' costs.\nAFFIRMED.\n"} -{"text": "\n\n\n\n\n\n\n\n\n\nIN THE COURT OF CRIMINAL APPEALS\nOF TEXAS\n\n\n\nNO. WR-65,106-01\n\n\nCHARLES EDWARD TURNER, Relator\n\nv.\n\nTHE DISTRICT CLERK OF McLENNAN COUNTY, Respondent\n\n\n\n\nON APPLICATION FOR A WRIT OF MANDAMUS\nCAUSE NO. 05375654 IN THE 54TH DISTRICT COURT\nMcLENNAN COUNTY\n\n\n The order was delivered per curiam.\n\n\nO R D E R\n\n\n\n This is an original application for a writ of mandamus.\n\tRelator contends that he filed an application for writ of habeas corpus in the 54th District\nCourt of McLennan County, but that the application has not been forwarded to the Court of Criminal\nAppeals even though more than thirty-five days have elapsed. Relator's contentions present a\ncolorable claim to have prompt resolution of any grounds raised in such an application.\n\tIt is this Court's opinion that additional information is required before a decision can be\nreached. Therefore, the Respondent, District Clerk of McLennan County, is ordered to file with this\nCourt within thirty days a response by submitting the record on such application or a copy of a timely\nentered order designating issues to be investigated, see McCree v. Hampton, 824 S.W.2d 578 (Tex.\nCrim. App. 1992), or by stating the nature of any applications filed by Relator such that they are not\nfiled pursuant to Article 11.07, \u00a7\u00a03, V.A.C.C.P., or that no applications by applicant have been filed.\n\tIT IS SO ORDERED this the 26th day of JULY, 2006.\nDO NOT PUBLISH\n"} -{"text": "\n254 S.W.2d 609 (1953)\nSTATE ex rel. TAYLOR, Attorney General\nv.\nANDERSON et al.\nNo. 42510.\nSupreme Court of Missouri, Division No. 1.\nFebruary 9, 1953.\n*611 Lincoln, Lincoln, Haseltine & Forehand, H. T. Lincoln and Turner White, Springfield, for appellants.\nJ. E. Taylor, Atty. Gen., Robert R. Welborn, Asst. Atty. Gen. and William A. Wear, Asst. Atty. Gen., for respondents.\nCOIL, Commissioner.\nAppeal from a judgment in an action by the Attorney General to prevent and restrain defendants from violating the law relating to monopolies, discriminations, and conspiracies contained in Chapter 416, Mo.R.S.1949. (References to statute sections are Mo.R.S.1949, V.A.M.S.)\nThe suit under \u00a7 416.260 for injunctive relief, alleged in count I that defendants entered into an agreement or understanding with four corporations to regulate, control, and fix the resale price of liquid petroleum and to maintain the price so fixed and regulated; entered into such agreement or understanding for the purpose of lessening free competition and to increase the market price of liquid petroleum, and that such agreement or understanding did tend to lessen free competition and to increase the market price; and that such agreement or understanding was in restraint of trade and competition. The averments of count I are based upon the provisions of \u00a7\u00a7 416.010, 416.020, and 416.040.\nCount II of the bill averred that defendants combined with four corporations for the purpose of destroying the competition of another corporation and discriminated against it by selling liquid petroleum in one city or area of the state at a different price than it was sold by defendants in combination with the four corporations in another city or area of the state. These averments were based upon \u00a7 416.120. As will later appear, we eliminate the question of violation of this section (416.120) from consideration. Thus, further reference herein to the \"sections of the statutes\" or to the \"statutes\" will refer, unless otherwise noted, to \u00a7\u00a7 416.010, 416.020, and 416.040.\nThe trial court's judgment found defendants guilty of a conspiracy in restraint of trade and permanently restrained and enjoined them from participating in any agreement or understanding for the purpose of fixing the resale price of liquid petroleum, and from participating in any agreement or understanding to discriminate against a competitior by selling liquid petroleum in one city for a lower price than liquid petroleum is sold by defendants in another city.\nThe sections of the statutes here involved (for the purposes of this case) provide in substance as follows: \u00a7 416.010\u0097that any person who enters into an agreement or understanding with any other person in restraint of trade or competition is guilty of conspiracy in restraint of trade; \u00a7 416.020\u0097that any person who enters or participates in an agreement or understanding with any other person to regulate, control, or fix a price, or to maintain such regulated or fixed price, is guilty of conspiracy in restraint of trade; \u00a7 416.040\u0097that agreements or understandings between two or more persons which are designed to lessen *612 or which tend to lessen free competition, or agreements which are designed to increase or which tend to increase the market price of any commodity, are against public policy, unlawful and void, and that any person participating in such an agreement is guilty of conspiracy in restraint of trade; \u00a7 416.120 provides that any person engaged in the sale of a commodity who with intent to destroy, and for the purpose of destroying, competition of an established dealer in such product or commodity, discriminates by selling the commodity in one town at a lower price than he sells it in another town, having regard for different cost factors, is guilty of unfair discrimination which is prohibited and declared unlawful.\nSection 416.050 provides for fine or imprisonment or both for one convicted of violating the provisions of \u00a7\u00a7 416.010, 416.020, and 416.040. While the assessment of penalties was prayed in plaintiff's bill, no penalties were assessed by the trial court. Obviously, penalties could not be assessed because this is a civil proceedings in equity by virtue of \u00a7 416.260 and not a criminal proceedings under \u00a7 416.050.\nThe evidence adduced by the Attorney General tended to establish that defendants are partners doing business as Economy Gas Company with their principal office in Springfield, Missouri, and sell liquid petroleum (propane and butane gas) in and about the City of Springfield; that in September 1950 defendant Fritts, in company with a representative of each of three corporations which also sold liquid petroleum in Springfield, visited one Kenneth Coatney at the offices of the Lebanon Propane Gas and Appliance Company, a corporation, in Lebanon, Missouri; that Coatney controlled and managed the Lebanon Propane Gas and Appliance Company, and was president of the Ken L. P. Gas Company, a corporation whose principal office was in Springfield, and that both the last named corporations sold liquid petroleum in Lebanon and Springfield, respectively; that Fritts, as spokesman for himself and those with him, told Coatney that since he, Fritts, and defendant Anderson had bought the Economy Gas Company (September 1949), \"they had all got together and organized a group which had set the price on gas and they would get that price the year round\"; that they were getting 12\u00a2 and 14\u00a2 per gallon in Springfield and Lebanon for gas, and requested that Coatney raise his price to theirs; that one or two of the others with Fritts also told Coatney that they all had the same price; that Coatney, through the Ken L. P. Gas Company, was then selling liquid petroleum in Springfield for 9\u00bd\u00a2 and 10\u00bd\u00a2 a gallon depending on the amount sold; that Fritts remonstrated with Coatney about undercutting others on price and told Coatney that the others would lose money if they had to meet his price and they did not intend to do so; that if Coatney refused to go along with them they would contribute money to a fund and run Coatney out of business; that Fritts said it would be cheaper to contribute to run Coatney out of business than to take the loss which would result from selling at Coatney's price; that Fritts suggested they buy out Coatney in Springfield, which proposition Coatney refused; that someone asked whether Coatney would leave Springfield of Missouri Hydro Gas Company, a representative of which was present in the meeting, ceased doing business in Lebanon; that Coatney said he would consider this; that Fritts said they would discuss the matter with Mr. Bales, one of the owners of the Missouri Hydro Gas Company, and let Coatney know; that after the other parties present had left the meeting, Fritts told Coatney that they would see what could be worked out, but that the \"boys really meant business\"; that this meeting lasted about three hours and that many of the statements made by defendant Fritts were repeated in various forms at numerous times during the meeting.\nSeveral days later, probably September 22, 1950, defendants Anderson and Fritts called on Coatney at his office in Lebanon and Fritts stated that they (identified as \"the group\") were going to put 5\u00a2 gas in Lebanon and run him, Coatney, out of business if he didn't come to terms; that they had all talked it over and had discussed several plans but had decided on the plan to put 5\u00a2 gas in Lebanon as most effective; that Fritts again requested that *613 Coatney raise his price; that Anderson told him (Coatney) that he was \"a bull-headed fool for not coming along with the group\"; that Coatney told them he would think it over and let them know by a certain day; that they said if he didn't come to terms there would be 5\u00a2 gas in Lebanon until he did come to terms.\nOf the four corporations with whom defendants are charged to have agreed, only Missouri Hydro Gas Company sold bulk liquid petroleum in Lebanon or in the \"Lebanon area\". On October 2, 1950, Missouri Hydro Gas Company advertised in a daily paper in Lebanon offering propane and butane gas for sale at 5\u00a2 per gallon at any place within a 10-mile radius of Lebanon, and continued to so offer for about 30 days.\nDefendants Anderson and Fritts again visited Coatney in Lebanon at a later time, probably October 17, 1950, and Anderson said to Coatney: \"We are taking all of your customers up here and we are just going to run you out of business\" and \"instead of just having gas within ten miles of Lebanon, we will have it everywhere your bulk truck runs and you won't make a cent on your gas as long as you are in business.\" This third meeting lasted about an hour.\nEssentially all the foregoing evidence was adduced through the testimony of Coatney. Coatney's wife, his secretary, and a salesman in the retail store of the Lebanon Propane Gas and Appliance Company, who were present in the store when certain of the conversations heretofore referred to took place, testified that they overheard parts of those conversations and corroborated the testimony of Coatney to a certain extent. Kathryn Coatney, the wife, testified that she heard Fritts ask Coatney to raise his price in order to meet the prices which they \"had set.\" The bookkeeper heard Anderson or Fritts tell Coatney that if he didn't meet their price, all the companies were going together and see that Coatney \"didn't make a nickel on a gallon of gas.\" The salesman said that he had heard a discussion during the original visit of Fritts and the representatives of the other companies concerning the price of gas and heard them ask Coatney to go along with them.\nDefendants adduced evidence consisting of the testimony of themselves and of the representatives of the corporations who were present at the first meeting with Coatney, and of other officers and representatives of the various corporations with whom it was charged defendants agreed and combined. This testimony directly contradicted the testimony of Coatney as to what occurred and was said at the three meetings. All of defendants' witnesses, including defendants, denied that there was ever any sort of an agreement or understanding to fix, control or regulate prices or to maintain prices, or any attempt to coerce Coatney in any manner, or any request made that he raise his prices to meet theirs, or that any threat of any kind was made concerning 5\u00a2 gas in Lebanon or otherwise; that no one other than Missouri Hydro Gas Company and its president and manager knew of the fact that Missouri Hydro Gas Company was to offer propane and butane at 5\u00a2 a gallon on October 2 or at any other time; that such was done solely for the purpose of stimulating sales and not as a result of any agreement or understanding, tacit or otherwise, and not for the purpose of, or with the intent of, eliminating or lessening the competition of Coatney's company or companies.\nDefendants Anderson and Fritts explained the original visit of Fritts and the other representatives of gas companies to Coatney and the subsequent visits of Fritts and Anderson to Coatney by stating that their sole purpose was to ascertain from Coatney his true intent with reference to his operation in Springfield, and to find out why Coatney was selling gas at so low a price; that they had learned that Ken L. P. Gas Company was selling liquid petroleum for as little as 8\u00a2 a gallon in Springfield; that to meet this competition would be ruinous to defendants; that they were consequently much concerned; that they had understood that Coatney, who had begun business in Springfield in the summer of 1950, was there on a temporary basis in an attempt to, and for the purpose of, \"hurting\" Missouri Hydro Gas Company; *614 that later they suspected Coatney might intend to stay in Springfield permanently and thus they wanted to ascertain just what Coatney intended to do and why he would sell, and how long he intended to continue to sell, at the price of 8\u00a2 and 9\u00a2 in Springfield.\nThe evidence showed that the prices at which defendants sold liquid petroleum in Springfield, viz., 11\u00a2, 12\u00a2 and 14\u00a2 per gallon in September and October, 1950, were the same prices in effect at the time defendants bought the business of Economy Gas Company in September 1949; that those same prices were continued in effect from the time defendants entered business in Springfield until December 16, 1950, when a price increase was made due to an increase in price by their supplier and other increased costs. Prices charged by the other Springfield companies, with whom defendants are charged to have had an understanding, varied during 1950 from 10\u00a2 to 15\u00a2 per gallon depending on the amount sold and the particular period covered. An analysis of the testimony as to prices charged for liquid petroleum by the defendants and the four corporations with whom they are charged to have agreed to fix prices, discloses that there was some uniformity in that the minimum and maximum price of each company for the periods in question were about the same. Nevertheless, the only evidence in the record tends to show that liquid petroleum is a standardized product; that the cost to all Springfield companies was about the same, that the costs of handling and distribution were about the same, and consequently that a certain uniformity of price would undoubtedly prevail irrespective of any agreement or understanding as to fixing, controlling, regulating, or maintaining prices.\nDefendants contend that there is a failure to prove by clear and satisfactory evidence that they violated the statutes heretofore mentioned. They point out that the fact alone of uniformity of prices is not evidence of a conspiracy to fix prices where the product is standardized; that reduction of price to stimulate sales is a proper practice; and contend that admissions of defendants are not alone sufficient to establish a conspiracy and may be considered only after the conspiracy has been established by evidence other than defendants' admissions; and further contend that the evidence is as consistent with an inference of innocence as with an inference of guilt.\nIt is clear from the foregoing review of the evidence that whether there is substantial and convincing evidence to support the trial court's findings and judgment depends entirely upon whether the testimony of Coatney is believed. While there are other circumstances in evidence, those circumstances alone or together would not be sufficient to show a violation by defendants of the statutes involved. That is to say, the fact of uniformity of prices in Springfield, in the absence of any showing that this uniformity was the result of an artificial condition and did not result naturally from standardized costs in the purchase, handling, and distribution of the item, would not be sufficient evidence from which to infer any agreement or understanding to fix, control, regulate, or maintain prices. Pevely Dairy Co. v. U. S., 8 Cir., 178 F.2d 363, 366[5]; United States v. Standard Oil Co. of New Jersey, D.C.E.D.Mo., 47 F.2d 288, 316, 317. Likewise, the fact that Missouri Hydro Gas Company did, on October 2 and for approximately thirty days thereafter, sell gas in Lebanon for the price of 5\u00a2 per gallon would not be sufficient alone, or in combination with the evidence of uniformity of prices, to furnish a substantial basis for an inference that an agreement as to price existed. Nor is the circumstance that defendants and the representatives of three other corporations visited Coatney on one occasion to talk about price and Coatney's intent, nor is the circumstance of two other visits to Coatney by defendants alone to pursue the same subject-matter, even if those two circumstances are added to the others mentioned, sufficient evidence to establish the existence of an agreement or understanding as to price.\nOn the contrary, it is clear that no violation of the provisions of the statutes noted is shown unless the testimony of Coatney, as corroborated in a limited way by his wife, his secretary, and his salesman, *615 is accepted as true. But if the testimony of Coatney is believed, despite the direct contradiction of all essential parts thereof by defendants' evidence, and the other circumstances are then considered, there was substantial evidence from which the trial court could properly find that a violation of the statutes in question occurred.\nThe trial court concluded that the degree of proof to establish the charges made was such as to \"induce belief and convince the mind of the trier of the facts.\"\nAppellants contend plaintiff has the burden to prove the guilt of defendants by clear and satisfactory evidence, citing in support: State ex inf. Crow v. Continental Tobacco Co., 177 Mo. 1, 75 S.W. 737; State ex rel. Barrett v. Carondelet Planing Mill Co., 309 Mo. 353, 274 S.W. 780; and State ex inf. Hadley v. Standard Oil Co., 218 Mo. 1, 116 S.W. 902. Each of those cases is a quo warranto proceedings. This is not a quo warranto proceedings. However, it is a proceeding for injunctive relief in which, as a basis therefor, violations of the so-called antitrust statutes must be proved. We find no case in this state in which an individual has been proceeded against in equity under \u00a7 416.260. We have no doubt, however, that a violation of these statutes must be established by clear and convincing evidence and that clear and convincing evidence must certainly be more substantial evidence than that which is only sufficient to submit a case for the consideration of a jury. There must be substantial evidence of a kind and character which is clear and convincing as to the existence of the ultimate fact to be proved.\nCoatney testified to statements made by defendants which, if true, constituted evidence that an understanding existed among defendants and other companies in Springfield to control, regulate, and maintain prices. These voluntary statements of defendants are in the nature of admissions against interest. They were statements of facts rather than of opinions. Extrajudicial admissions are, of course, admissible in evidence and are competent as evidence of the existence of the facts which they tend to establish. Concrete Steel Co. v. Reinforced Concrete Co., Mo.App., 72 S.W.2d 118, 120[2-5]; Tappe v. Pohlmann, Mo.App., 79 S.W.2d 485, 488[5]; 31 C.J.S., Evidence, \u00a7 273, p. 1027.\nOf course, the effect to be given and the construction to be placed upon an oral admission depends upon the circumstances under which it was made, and a consideration of all that was said at the time of the admission. 31 C.J.S., Evidence, \u00a7 277, p. 1029. Here the admissions were voluntary statements admitting directly and unequivocally the ultimate essential fact to be proved.\nThe rule suggested by appellants, that a confession or admission of guilt is insufficient to prove a crime without independent proof of the corpus delicti, has no application for the obvious reason that this is a civil and not a criminal proceedings.\nWe have pointed out that the circumstances heretofore referred to, independent of defendants' admissions, were insufficient to furnish a substantial basis for a finding of a violation of the statutes referred to. However, the court could properly consider these circumstances in determining the credibility of the testimony by the witness Coatney. The trial chancellor believed the testimony of Coatney and disbelieved the testimony of defendants and the other witnesses adduced by defendants in direct contradiction of Coatney's testimony.\nThis being a suit in equity, we review the case de novo, weigh the evidence, and determine on the whole record what relief, if any, should be granted. Where, as here, however, there exists an irreconcilable conflict in the evidence on the essential fact issue involved, depending for determination on the credibility of witnesses, a situation prevails wherein the application of the rule of deference to the findings and conclusions of the trial chancellor is especially appropriate and necessary. Heath v. Heath, 359 Mo. 590, 600[1], 222 S.W.2d 778, 785[1]; Gardine v. Cottey, 360 Mo. 681, 693, 230 S.W.2d 731, 738[2]. The trial chancellor's opportunity to observe the witnesses and to hear them testify *616 affords him a basis for determining the credibility of testimony which we do not have. A review of the entire record in this case convinces us we should defer to the trial court's conclusion that the testimony of Coatney was true. Based upon a full review of the record, we hold that the testimony of Coatney, accepted as true, together with the other circumstances in evidence, constitutes substantial and convincing evidence of a violation by these defendants of the provisions of the statutes here considered. Johnson v. J. H. Yost Lumber Co., 8 Cir., 117 F.2d 53, 57[3].\nAccepting Coatney's testimony as true and then considering it with the other circumstances shown in evidence, there is convincing evidence in the record to establish these facts: that visits to Coatney were made by defendants, at one time in the company of other sellers of liquid petroleum, for the purpose of discussing the intent of Coatney with reference to prices of liquid petroleum in Springfield; that there was uniformity of prices of liquid petroleum in Springfield among defendants and some other sellers; that defendants said there was an agreement among them and other sellers of liquid petroleum in Springfield to at least regulate, control, and maintain uniform prices; that defendants threatened to destroy Coatney's Lebanon business unless he joined in an agreement to sell in Springfield at the controlled and maintained prices charged by defendants and certain other Springfield sellers; that upon the refusal of Coatney to so agree, Missouri Hydro Gas Company offered for sale propane and butane gas in Lebanon and within a 10-mile radius thereof for 5\u00a2 a gallon which was in accord with defendants' threat to destroy Coatney's business in Lebanon.\nThe trial court was justified in finding from these facts that some understanding or agreement existed among defendants and others to regulate or control or maintain prices of liquid petroleum, and that there was some understanding among defendants and at least one other which was intended to lessen full and free competition in the sale of liquid petroleum.\nHaving determined that the evidence supports the conclusion that defendants' activities violated the law in question, it remains to determine whether a right to injunctive relief was shown. As noted, this proceeding for injunctive relief is not for the purpose of assessing penalties against violators of the provisions of the statutes because of past violations or possible future violations. Nor is it the purpose of this proceeding to establish that a past violation did occur except as that fact may aid in establishing a basis for injunctive relief. Analogous sections of the Sherman Act are said to be purely remedial, and under them a court may not, under the guise of equitable relief and through the use of injunctive process, assess a penalty or punish for past transgressions. U. S. v. National Ass'n of Real Estate Boards, 339 U.S. 485, 70 S.Ct. 711, 94 L.Ed. 1007, 1015, footnote 6; Hartford-Empire Co. v. U. S., 323 U.S. 386, 65 S.Ct. 373, 89 L.Ed. 322, 359, 360. The sole purpose of this injunctive proceeding is the protection of the public against the evils which result from price fixing and from agreements to lessen or destroy free competition. However, it must appear that there is some reasonable probability of a continuation of the menace to the public before injunctive relief is justified. Donnelly Garment Co. v. Dubinsky, 8 Cir., 154 F.2d 38, 43[9-11].\nThus, the fact that a violation of the laws relating to monopolies, discriminations, and conspiracies has been proved, does not necessarily call for injunctive relief. Nor does the fact that \u00a7 416.260 provides specifically that circuit courts may \"prevent and restrain\" violations of such laws change the considerations upon which equitable relief will be granted. Missouri Cafeteria, Inc., v. McVey, Mo.Sup., 242 S.W.2d 549, 554[9]. It must appear that injunctive relief will accomplish the purpose of the proceeding, viz., to prevent continuing and probable future violations by those who have acted contrary to the proscriptions of the applicable statutes, and thus to the detriment of the public.\nWe note the Attorney General's bill was filed October 21, 1950; the trial *617 was January 16 and 17, 1951. The evidence in the record is not specific as to the situation which prevailed at the time of trial as compared to that proved in September and October, 1950. There was, however, no evidence that the understanding which existed prior to and during September and October, 1950 did not continue and also exist at the time of trial. Likewise, there was no evidence adduced from which it could be inferred that there was no reasonable expectation that the violations proved would not be continued or repeated. With the record before us in this condition, and particularly in view of the short time elapsed between the period covered by the proof and the time of trial, we may not say there was no reasonable probability that injunctive relief would accomplish the purpose of this proceeding. On the contrary, we may say that the trial court could reasonably conclude that injunctive relief was necessary and proper to prevent continued participation in an agreement or understanding as to fixing, regulating, controlling, and maintaining prices and continued participation in an agreement or understanding intended to lessen free competition.\nThe trial court found that the evidence did not show any participation in an unlawful agreement or understanding by any of the four corporations named in the bill other than Missouri Hydro Gas Company. Inasmuch as the corporations named are not parties to this proceeding, we need not determine whether any named corporation other than Missouri Hydro was or was not a party to the agreement or understanding.\nWe point out that we have made no determination as to whether a violation of \u00a7 416.120 (the unfair discrimination section) was proved. While we are inclined to the view that no violation of this section was proved, nevertheless it is unnecessary to make a determination on this question. This, for the reason that the understanding with Missouri Hydro as to 5\u00a2 gas in Lebanon constituted a violation of \u00a7 416.040 in that it was an agreement intended to lessen free competition. Thus, the purpose of this proceeding in that respect may be accomplished without any determination as to violation of \u00a7 416.120.\nA portion of the judgment entered by the trial court was based upon a finding of a violation by defendants of \u00a7 416.120 (the unfair discrimination section). Further, we are of the opinion that the judgment as entered by the trial court was, because of certain of its language, broader than necessary to provide for the specific relief justified by the evidence. For these reasons, the judgment herein should be modified and changed and the following judgment entered:\n\"Defendants are hereby permanently restrained and enjoined from regulating, controlling, or fixing the price or prices of liquid petroleum in Springfield, Missouri, by entering into, becoming a member of, participating in, or continuing to participate in any agreement, combination, confederation, or understanding with any person or persons or with any and all corporations, which agreement, combination, confederation, or understanding has for its purpose the regulating, controlling, or fixing of the price of liquid pertoleum in Springfield, Missouri, or which does regulate, control, or fix the price of liquid petroleum in Springfield, Missouri, or which agreement, combination, confederation, or understanding has for its purpose the maintaining of any price resulting from any such agreement, combination, confederation, or understanding to regulate, control, or fix the price of liquid petroleum in Springfield, Missouri; and\n\"Defendants are hereby permanently restrained and enjoined from entering into, participating in, or continuing any participation in any arrangement, agreement, or understanding whereby, for the purpose or with the intent of destroying or lessening full and free competition in the sale of liquid petroleum in Lebanon, Missouri, liquid petroleum is sold or caused to be sold in Lebanon, Missouri, for a lower price than that for which it is sold in Springfield, Missouri.\n\"The costs of this action are taxed against defendants.\"\n*618 The judgment of the trial court is reversed and the case remanded with directions to enter judgment in accordance with this opinion.\nVAN OSDOL and LOZIER, CC., concur.\nPER CURIAM.\nThe foregoing opinion by COIL, C., is adopted as the opinion of the court.\nAll concur.\n"} -{"text": "772 F.2d 906\nUnpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.JAMES EVANS, PETITIONER,v.MICHAEL COAL COMPANY AND OLD REPUBLIC COMPANIES; DIRECTOR,OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITEDSTATES DEPARTMENT OF LABOR; BENEFITSREVIEW BOARD, RESPONDENTS.\nNO. 84-3740\nUnited States Court of Appeals, Sixth Circuit.\n8/30/85\n\nPETITIONS FOR REVIEW GRANTED AND REMANDED\nBen.Rev.Bd., Dept. of Labor\nBEFORE: MARTIN, JONES, AND WELLFORD, CIRCUIT JUDGES.\nPER CURIAM.\n\n\n1\nPetitioners seek review of the Benefits Review Board's determination that their respective appeals were untimely filed. An administrative law judge's decision is effective on the day it is issued and served on the parties. At the expiration of the thirtieth day after a decision of an administrative law judge is filed, it becomes final and cannot be appealed to the Benefits Review Board. 33 U.S.C. 921(a), as incorporated by 30 U.S.C. 932(a). Blevins v. Director, OWCP, 683 F.2d 139 (6th Cir. 1982). However, a decision and order is not considered to have been 'filed,' does not become 'effective,' and the time within which an appeal must be taken does not commence, until the order is issued and served on the parties by certified mail in accordance with applicable provisions of the statute and regulations. The orders in these cases cannot be considered to have been 'filed' and 'effective' for purposes of taking an appeal until they were served. See Youghiogheny & Ohio Coal Col. v. Benefits Review Board, 745 F.2d 380 (6th Cir. 1984). Because the appeals were filed within thirty days of service, the appeals were timely. Accordingly, the petitions for review are granted and the causes are REMANDED to the Benefits Review Board for reinstatement of the appeals.\n\n"} -{"text": " 10-4188-ag\n Wu v. Holder\n BIA\n A095 864 126\n UNITED STATES COURT OF APPEALS\n FOR THE SECOND CIRCUIT\n\n SUMMARY ORDER\n RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER\n FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF\n APPELLATE PROCEDURE 32.1 AND THIS COURT\u2019S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER\n IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR\n AN ELECTRONIC DATABASE (WITH THE NOTATION \u201cSUMMARY ORDER\u201d). A PARTY CITING A SUMMARY\n ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.\n\n 1 At a stated term of the United States Court of Appeals\n 2 for the Second Circuit, held at the Daniel Patrick Moynihan\n 3 United States Courthouse, 500 Pearl Street, in the City of\n 4 New York, on the 7th day of February, two thousand twelve.\n 5\n 6 PRESENT:\n 7 RALPH K. WINTER,\n 8 REENA RAGGI,\n 9 SUSAN L. CARNEY,\n10 Circuit Judges.\n11 _________________________________________\n12\n13 XIAO CONG WU,\n14 Petitioner,\n15\n16 v. 10-4188-ag\n17 NAC\n18 ERIC H. HOLDER, JR., UNITED STATES\n19 ATTORNEY GENERAL,\n20 Respondent.\n21 _________________________________________\n22\n23 FOR PETITIONER: Gary J. Yerman, New York, New York.\n24\n25 FOR RESPONDENT: Tony West, Assistant Attorney\n26 General; Michelle Gorden Latour,\n27 Assistant Director; Brendan P.\n28 Hogan, Office of Immigration\n29 Litigation, United States Department\n30 of Justice, Washington, D.C.\n\f 1 UPON DUE CONSIDERATION of this petition for review of a\n\n 2 Board of Immigration Appeals (\u201cBIA\u201d) decision, it is hereby\n\n 3 ORDERED, ADJUDGED, AND DECREED, that the petition for review\n\n 4 is DENIED.\n\n 5 Petitioner Xiao Cong Wu, a native and citizen of the\n\n 6 People\u2019s Republic of China, seeks review of the September\n\n 7 23, 2010, decision of the BIA denying his motion to reopen.\n\n 8 In re Xiao Cong Wu, No. A095 864 126 (B.I.A. Sept. 23,\n\n 9 2010). We assume the parties\u2019 familiarity with the\n\n10 underlying facts and procedural history of the case.\n\n11 The BIA\u2019s denial of Wu\u2019s motion to reopen as untimely\n\n12 was not an abuse of discretion. See Kaur v. BIA, 413 F.3d\n\n13 232, 233 (2d Cir. 2005) (per curiam). A motion to reopen\n\n14 generally must be filed no later than 90 days after the date\n\n15 on which the final administrative decision was rendered in\n\n16 the proceedings sought to be reopened. 8 U.S.C.\n\n17 \u00a7 1229a(c)(7)(C)(i); 8 C.F.R. \u00a7 1003.2(c)(2). There is no\n\n18 dispute that Wu\u2019s 2010 motion was untimely, as the final\n\n19 administrative decision was issued in March 2009.\n\n20 See 8 U.S.C. \u00a7 1229a(c)(7)(C)(i); 8 C.F.R. \u00a7 1003.2(c)(2).\n\n21 The time limitation does not apply to a motion to reopen if\n\n22 it is \u201cbased on changed circumstances arising in the country\n\n23 of nationality or in the country to which deportation has\n\n 2\n\f 1 been ordered, if such evidence is material and was not\n\n 2 available and could not have been discovered or presented at\n\n 3 the previous hearing.\u201d 8 C.F.R. \u00a7 1003.2(c)(3)(ii); see\n\n 4 also 8 U.S.C. \u00a7 1229a(c)(7)(C)(ii). However, the BIA did\n\n 5 not abuse its discretion in finding that Wu failed to\n\n 6 establish changed circumstances in China.\n\n 7 The only evidence Wu proffered of changed circumstances\n\n 8 arising in China was a letter from his wife - in which she\n\n 9 stated that after Wu mailed her materials pertaining to\n\n10 Chinese democracy, she was detained by the Chinese\n\n11 government for ten days, and government officials told her\n\n12 they would arrest Wu if he returned to China - and a\n\n13 \u201cCertificate of Detention\u201d stating that Wu\u2019s wife had been\n\n14 detained in March 2009. The BIA\u2019s determination that this\n\n15 evidence was of little probative value is entitled to\n\n16 deference, particularly in light of the agency\u2019s prior\n\n17 adverse credibility determination, and the fact that the\n\n18 \u201cCertificate of Detention\u201d was unauthenticated. See Qin Wen\n\n19 Zheng v. Gonzales, 500 F.3d 143, 149 (2d Cir. 2007) (holding\n\n20 that the BIA did not abuse its discretion in discrediting a\n\n21 purported village notice where the document was not\n\n22 authenticated and the alien had been found not credible by\n\n23 the IJ); see also Xiao Ji Chen v. U.S. Dep\u2019t of Justice, 471\n\n\n 3\n\f 1 F.3d 315, 342 (2d Cir. 2006). Moreover, the letter from\n\n 2 Wu\u2019s wife was unsworn and from an interested witness. See\n\n 3 Matter of H-L-H- & Z-Y-Z-, 25 I. & N. Dec. 209, 215 (BIA\n\n 4 2010) (giving diminished weight to letters from friends and\n\n 5 relatives where they were written by interested witnesses\n\n 6 not subject to cross-examination). Because the evidence Wu\n\n 7 submitted was insufficient to establish a change in\n\n 8 circumstances or country conditions, the BIA did not abuse\n\n 9 its discretion in concluding that he failed to meet an\n\n10 exception to the filing deadline, and, accordingly, in\n\n11 denying his motion to reopen. See 8 U.S.C.\n\n12 \u00a7 1229a(c)(7)(C)(i), (ii); 8 C.F.R. \u00a7 1003.2(c)(2), (3).\n\n13 For the foregoing reasons, the petition for review is\n\n14 DENIED. As we have completed our review, any stay of\n\n15 removal that the Court previously granted in this petition\n\n16 is VACATED, and any pending motion for a stay of removal in\n\n17 this petition is DISMISSED as moot. Any pending request for\n\n18 oral argument in this petition is DENIED in accordance with\n\n19 Federal Rule of Appellate Procedure 34(a)(2), and Second\n\n20 Circuit Local Rule 34.1(b).\n\n21 FOR THE COURT:\n22 Catherine O\u2019Hagan Wolfe, Clerk\n23\n24\n\n\n\n 4\n\f"} -{"text": "\n82 Ill. App.3d 347 (1980)\n402 N.E.2d 883\nPAUL HAAS, Conservator of the Estate and Person of Thomas Haas, an Incompetent, Plaintiff-Appellant,\nv.\nWESTLAKE COMMUNITY HOSPITAL et al., Defendants-Appellees.\nNo. 78-1953.\nIllinois Appellate Court \u0097 First District (3rd Division).\nOpinion filed March 26, 1980.\n*348 Jeffrey M. Goldberg, of Chicago, for appellant.\nFrench & Rogers, of Chicago (Richard G. French and Timothy G. Keating, of counsel), for appellee Westlake Community Hospital.\nWildman, Harrold, Allen & Dixon, of Chicago (James A. Christman and Douglas L. Prochnow, of counsel), for appellees Joseph Interlandi, M.D., Jeanne Mercer, M.D., and Harold Smith, M.D.\nHinshaw, Culbertson, Moelmann, Hoban & Fuller, of Chicago (John G. Langhenry, Jr., and Stanley J. Davidson, of counsel), for appellee Martin Green, M.D.\nReversed and remanded.\nMr. JUSTICE RIZZI delivered the opinion of the court:\nPlaintiff, Paul Haas, conservator of the estate and person of Thomas Haas, an incompetent, filed suit against defendants, Westlake Community Hospital, a corporation, Joseph Interlandi, M.D., Jeanne Mercer, M.D., Harold Smith, M.D. and Martin Green, M.D. The suit seeks damages for personal injuries suffered by Thomas Haas at the time of his birth. The court granted defendants' motions to dismiss based on the expiration of the limitation period for filing the suit (Ill. Rev. Stat. 1977, ch. 83, par. 22.1) and laches. We reverse and remand.\nOn August 16, 1956, Ruth Haas was admitted to the Westlake Community Hospital and was under the care of the individual physician defendants. Two days later, she gave birth to Thomas Haas. On August 18, 1974, Thomas Haas reached the age of 18. In 1977, he was adjudicated an incompetent in a probate court proceeding in Cook County. This suit was filed on February 28, 1978.\nPlaintiff contends the action is not barred by the two-year limitation period for filing personal injury actions arising from patient care, because the allegations contained in the complaint are sufficient to invoke the statutory exception for persons who are insane or mentally ill. The statute provides:\n\"If the person entitled to bring the action is, at the time the cause of *349 action occurred, * * * insane, or mentally ill, * * * the period of limitations does not begin to run until the disability is removed.\" (Ill. Rev. Stat. 1977, ch. 83, par. 22.1.)\nThe complaint alleges \"that from the date of birth to present, Thomas Haas has been a mental incompetent and incapable of managing his own person and affairs.\"\n\u0095 1, 2 Defendants argue that plaintiff \"has not alleged in this complaint that he has been insane or mentally ill since birth. Instead, he simply alleged that he has been a `mental incompetent' since birth.\" We reject defendants' argument that the suit should be dismissed because the wording in the complaint does not mirror the terminology found in the applicable exception to the limitation statute. (See Peach v. Peach (1966), 73 Ill. App.2d 72, 75, 218 N.E.2d 504, 505.) In this regard, pleadings must be liberally construed with a view toward doing substantial justice between the parties. (Ill. Rev. Stat. 1977, ch. 110, par. 33(3).) A pleading is sufficient as long as it reasonably informs the opposing party of the nature of the claim or defense. (Ill. Rev. Stat. 1977, ch. 110, par. 42(2).) These and similar provisions of the Civil Practice Act should be used by courts as tools to overcome word-construction stumbling blocks which would preclude a case from being heard on the merits. (See Fleshner v. Copeland (1958), 13 Ill.2d 72, 77, 147 N.E.2d 329, 332; Walinski v. Morrison & Morrison (1978), 60 Ill. App.3d 616, 619, 377 N.E.2d 242, 244.) Here, the trial court neglected to give effect to the purpose of the applicable sections of the Civil Practice Act.\nWe next consider whether, on the basis of the pleadings, the suit is barred by laches. If the plaintiff can prove that at the time the cause of action occurred Thomas Haas was insane or mentally ill, the period of limitations for filing the suit does not begin to run until the disability is removed. During that relevant time, Thomas Haas cannot be held accountable for any apparent delay, negligence, or laches in seeking redress through the courts, and he is not affected by the limitations period in the statute. (See In re Estate of Goldberg (1937), 288 Ill. App. 203, 212-13, 5 N.E.2d 863, 867; Van Buskirk v. Van Buskirk (1893), 148 Ill. 9, 26, 35 N.E. 383, 386; Dodge v. Cole (1881), 97 Ill. 338, 349.) The court, therefore, erred in ruling that the suit should be dismissed because of laches.\nAccordingly, the order dismissing the suit is reversed and the case is remanded to the trial court.\nReversed and remanded.\nMcGILLICUDDY, P.J., and McNAMARA, J., concur.\n"} -{"text": " T.C. Memo. 2009-55\n\n\n\n UNITED STATES TAX COURT\n\n\n\n STEPHEN G. AND SUZANNE Q. CHANEY, Petitioners v.\n COMMISSIONER OF INTERNAL REVENUE, Respondent\n\n\n\n Docket No. 4532-07. Filed March 12, 2009.\n\n\n\n Kathryn Barnhill, for petitioners.\n\n Catherine S. Tyson, for respondent.\n\n\n\n MEMORANDUM FINDINGS OF FACT AND OPINION\n\n\n VASQUEZ, Judge: Respondent determined a $19,108 deficiency\n\nin and a $3,821.60 section 6662(a)1 penalty on petitioners\u2019 2003\n\nFederal income tax.\n\n\n\n 1\n All section references are to the Internal Revenue Code\nin effect for the year in issue, and all Rule references are to\nthe Tax Court Rules of Practice and Procedure.\n\f - 2 -\n\n Respondent concedes that petitioners conducted an active\n\ntrade or business as distributors of Shaklee products.\n\nRespondent concedes that petitioners substantiated $1,245 of the\n\n$1,526 of charitable contribution deductions claimed on their\n\nreturn.\n\n Petitioners concede the disallowance of $281 of charitable\n\ncontribution deductions (i.e., they only claim they substantiated\n\nonly $1,245 of the $1,526 of charitable contribution deductions).\n\nAccordingly, this issue is resolved. Petitioners concede the\n\ndisallowance of their reported advertising expenses.\n\nAccordingly, this issue is resolved. Petitioners concede\n\nreceiving income of $288 from Prudential Insurance Company of\n\nAmerica for 2003 and $600 from the National Institutes of Health\n\nfor 2003. These amounts were omitted from their 2003 Federal\n\nincome tax return. Accordingly, these issues are resolved.\n\n At trial and on brief respondent failed to address the $500\n\ndeduction for the preparation of income taxes. Accordingly, we\n\nfind that respondent abandoned (waived) this issue. See Petzoldt\n\nv. Commissioner, 92 T.C. 661, 683 (1989); Levert v. Commissioner,\n\nT.C. Memo. 1989-333, affd. without published opinion 956 F.2d 264\n\n(5th Cir. 1992).\n\f - 3 -\n\n The following issues remain to be decided:\n\n 1. Rental Expenses\n\n No concessions have been made. Accordingly, the entire\n\namount of rental expenses claimed remains at issue.\n\n 2. Utilities Expenses\n\n Petitioners concede they did not substantiate $57 of the\n\n$706 claimed on their return as utilities expenses.\n\nAccordingly, $649 of utilities expenses remain at issue.\n\n 3. Repairs and Maintenance Expenses\n\n Petitioners concede they did not substantiate $393 of the\n\n$4,234 claimed on their return as repairs and maintenance\n\nexpenses. Accordingly, $3,841 of repairs and maintenance\n\nexpenses remain at issue.\n\n 4. Depreciation\n\n Respondent allowed $3,540 in depreciation. Petitioners\n\nconcede they did not substantiate $637 of the $13,381 claimed on\n\ntheir return as depreciation. Accordingly, $9,204 of\n\ndepreciation remains at issue.\n\n 5. Meetings and Convention Expenses\n\n Respondent allowed $918 for meetings and convention\n\nexpenses. At trial petitioners conceded they did not\n\nsubstantiate $1,183 of the $6,959 claimed on their return as\n\nmeetings and convention expenses--i.e., only $4,858 remained at\n\nissue. On brief petitioners concede they did not substantiate\n\f - 4 -\n\n$2,101 of the $6,959 claimed on their return as meetings and\n\nconvention expenses. Accordingly, $3,940 of meetings and\n\nconvention expenses remains at issue.\n\n 6. Cost of Goods Sold (COGS)\n\n Petitioners concede they did not substantiate $4,943 of the\n\n$70,018 claimed on their return as COGS and claim the correct\n\nCOGS was $65,075. Respondent concedes that petitioners\u2019 COGS\n\ntotaled at least $58,045. Accordingly, $7,030 of COGS remains at\n\nissue.\n\n 7. Meals and Entertainment Expenses\n\n Petitioners concede they did not substantiate $961 of the\n\n$2,280 claimed on their return as meals and entertainment\n\nexpenses. Accordingly, $1,319 of meals and entertainment\n\nexpenses remains at issue.\n\n 8. Car and Truck Expenses\n\n Respondent allowed $2,023 as car and truck expenses.\n\nPetitioners concede they did not substantiate $815 of the $6,922\n\nclaimed on their return as car and truck expenses. Accordingly,\n\n$4,048 of car and truck expenses remains at issue.\n\n 9. Travel Expenses\n\n Respondent allowed $594 as travel expenses. At trial,\n\npetitioners conceded they did not substantiate $1,228 of the\n\n$7,009 claimed on their return as travel expenses--i.e., only\n\n$5,187 remained at issue. On brief petitioners concede they did\n\f - 5 -\n\nnot substantiate $1,822 of the $7,009 claimed on their return as\n\ntravel expenses. Accordingly, $4,593 of travel expenses remains\n\nat issue.\n\n 10. Mortgage Interest Expense\n\n No concessions have been made. Accordingly, the entire\n\namount claimed as mortgage interest expense remains at issue.2\n\n 11. Residential Property Tax Expense\n\n No concessions have been made. Accordingly, the entire\n\namount claimed as residential property tax expense remains at\n\nissue.3\n\n 12. Office Depreciation\n\n No concessions have been made. Accordingly, the entire\n\namount claimed as office depreciation expense remains at issue.\n\n 13. Royalty Income Expenses\n\n No concessions have been made. Accordingly, the entire\n\namount claimed as royalty income expenses remains at issue.\n\n 14. Section 6662(a) Penalty\n\n Petitioners\u2019 liability for the penalty remains at issue.\n\n\n\n\n 2\n If not deductible as a rental expense, this amount\nnormally would be allowable as itemized deductions on Schedule A,\nItemized Deductions.\n 3\n If not deductible as a rental expense, this amount\nnormally would be allowable as itemized deductions on Schedule A.\n\f - 6 -\n\n FINDINGS OF FACT\n\n Some of the facts have been stipulated and are so found.\n\nThe stipulation of facts and the attached exhibits are\n\nincorporated herein by this reference. At the time they filed\n\nthe petition, petitioners resided in North Carolina.\n\n Petitioners are the only partners of Becker & Chaney\n\nAssociates (BCA).4 During 2003 BCA sold, and trained others to\n\nsell, nutritional and cleaning products from Shaklee Corporation\n\n(Shaklee).\n\n On its 2003 Form 1065, U.S. Return of Partnership Income,\n\nBCA deducted (as detailed above) rental expenses, utilities\n\nexpenses, repairs and maintenance expenses, depreciation,\n\nmeetings and convention expenses, COGS, meals and entertainment\n\nexpenses, car and truck expenses, travel expenses, mortgage\n\ninterest expense, residential property tax expense, and office\n\ndepreciation.5 On their individual income tax return for 2003\n\npetitioners also deducted royalty income expenses. As detailed\n\nabove, respondent disallowed varying amounts of the\n\naforementioned deductions.\n\n\n 4\n BCA is not subject to the TEFRA partnership audit rules.\nSec. 6231(a)(1)(B) (the partnership BCA had 10 or fewer partners\nand all partners were natural persons who were U.S. citizens).\n 5\n The partnership claimed all of these expenses on its Form\n1065. These deductions flowed through to petitioners, who\nclaimed the deductions on their joint return as their\ndistributive shares of the partnership\u2019s items of income and\nexpense.\n\f - 7 -\n\n OPINION\n\nDeficiency\n\n Generally, deductions are a matter of legislative grace, and\n\ntaxpayers have the burden of showing that they are entitled to\n\nany deduction claimed. Rule 142(a); New Colonial Ice Co. v.\n\nHelvering, 292 U.S. 435, 440 (1934).\n\n This is a substantiation case. Our resolution of this\n\ndispute turns on the applicable law and our determination of the\n\ncredibility of the evidence presented. We determine the\n\ncredibility of each witness, weigh each piece of evidence, draw\n\nappropriate inferences, and choose between conflicting\n\ninferences. See Neonatology Associates, P.A. v. Commissioner,\n\n115 T.C. 43, 84 (2000), affd. 299 F.3d 221 (3d Cir. 2002); see\n\nalso Gallick v. Balt. & Ohio R.R. Co., 372 U.S. 108, 114-115\n\n(1963); Boehm v. Commissioner, 326 U.S. 287, 293 (1945);\n\nWilmington Trust Co. v. Helvering, 316 U.S. 164, 167-168 (1942).\n\nWe decide whether evidence is credible on the basis of objective\n\nfacts, the reasonableness of the testimony, and the demeanor of\n\nthe witness. Quock Ting v. United States, 140 U.S. 417, 420-421\n\n(1891); Wood v. Commissioner, 338 F.2d 602, 605 (9th Cir. 1964),\n\naffg. 41 T.C. 593 (1964); Pinder v. United States, 330 F.2d 119,\n\n124-125 (5th Cir. 1964); Concord Consumers Hous. Coop. v.\n\nCommissioner, 89 T.C. 105, 124 n.21 (1987).\n\f - 8 -\n\n If the taxpayer fails to substantiate an item, the burden of\n\nproof does not shift to the Commissioner. Sec. 7491(a)(2)(A);\n\nGagliardi v. Commissioner, T.C. Memo. 2008-10. If the taxpayer\n\nsubstantiates the deductions claimed, this satisfies the\n\ntaxpayer\u2019s burden of proof under Rule 142. Gagliardi v.\n\nCommissioner, supra.\n\n We begin our analysis by noting that Mr. Chaney\u2019s testimony\n\nwas consistent and forthright. His testimony was not one sided:\n\nhe admitted to facts that were not in petitioners\u2019 interest. For\n\nexample, Mr. Chaney noted that the original business records for\n\nBCA contained some minor errors that needed to be corrected\n\nbefore submission to the return preparer, that Mrs. Chaney\n\noccasionally puts items in the wrong categories of the business\n\nrecords, that petitioners did not have receipts for the alleged\n\nrent payments or a written lease agreement with BCA for renting\n\nthe office space, that petitioners deducted care for their dogs\n\nas business (travel and meetings) expenses, and that petitioners\n\nconfined one of their dogs in the office space because the dog\n\nsheds and Mrs. Chaney prefers that the dog not be in the other\n\npart of the house, and petitioners\u2019 two other dogs sleep in the\n\noffice space. Accordingly, having had the opportunity to observe\n\nMr. Chaney and evaluate his candor, we rely on his testimony to\n\nresolve the amounts that remain at issue.\n\f - 9 -\n\n Taxpayers are allowed a deduction for ordinary and necessary\n\nexpenses paid or incurred in carrying on a trade or business.\n\nSec. 162(a). Whether an expenditure is ordinary and necessary is\n\ngenerally a question of fact. Commissioner v. Heininger, 320\n\nU.S. 467, 475 (1943). Generally, for an expenditure to be an\n\nordinary and necessary business expense the taxpayer must show a\n\nbona fide business purpose for the expenditure; there must be a\n\nproximate relationship between the expenditure and the business\n\nof the taxpayer. Challenge Manufacturing Co. v. Commissioner, 37\n\nT.C. 650 (1962); Henry v. Commissioner, 36 T.C. 879 (1961).\n\n To be \u201cnecessary\u201d within the meaning of section 162, an\n\nexpense need be \u201cappropriate and helpful\u201d to the taxpayer\u2019s\n\nbusiness. Welch v. Helvering, 290 U.S. 111, 113 (1933). The\n\nrequirement that an expense be \u201cordinary\u201d connotes that \u201cthe\n\ntransaction which gives rise to it must be of common or frequent\n\noccurrence in the type of business involved.\u201d Deputy v. du Pont,\n\n308 U.S. 488, 495 (1940) (citing Welch v. Helvering, supra at\n\n114).\n\n In addition to satisfying the criteria for deductibility\n\nunder section 162, certain categories of expenses must also\n\nsatisfy the strict substantiation requirements of section 274(d)\n\nin order for a deduction to be allowed. The expenses to which\n\nsection 274(d) applies include, among other things, listed\n\nproperty (e.g., automobile expenses and cellular telephones) and\n\f - 10 -\n\ntravel expenses (including meals and lodging while away from\n\nhome). Secs. 274(d)(4), 280F(d)(4)(A)(i), (ii), (v). We may not\n\nuse the Cohan doctrine to estimate expenses covered by section\n\n274(d). See Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930);\n\nSanford v. Commissioner, 50 T.C. 823, 827 (1968), affd. 412 F.2d\n\n201 (2d Cir. 1969); sec. 1.274-5T(a), Temporary Income Tax Regs.,\n\n50 Fed. Reg. 46014 (Nov. 6, 1985). To substantiate a deduction\n\nattributable to listed property, a taxpayer must maintain\n\nadequate records or present corroborative evidence to show the\n\nfollowing: (1) The amount of the expense; (2) the time and place\n\nof use of the listed property; and (3) the business purpose of\n\nthe use. Sec. 1.274-5T(b)(6), Temporary Income Tax Regs., 50\n\nFed. Reg. 46016 (Nov. 6, 1985).\n\n Section 280A(a) generally does not allow a deduction with\n\nrespect to the use of a residence by a taxpayer who is an\n\nindividual or an S corporation. A pass-through entity such as a\n\npartnership is considered to have made personal use of a dwelling\n\nunit on any day which a partner would be considered to have made\n\npersonal use of the dwelling. Holmes v. United States, 85 F.3d\n\n956 (2d Cir. 1996), on remand 79 AFTR 2d 97-1292, 9701 USTC par.\n\n50,265 (W.D.N.Y. 1997); sec. 1.280A-1(e)(5)(ii), Proposed Income\n\nTax Regs., 48 Fed. Reg. 33323 (July 21, 1983).\n\n Ultimately, the Court believes Mr. Chaney\u2019s testimony and\n\naccepts petitioners\u2019 documentation, which satisfied applicable\n\f - 11 -\n\nlaw. We hold that petitioners are entitled to deduct the amounts\n\nthat remained at issue for depreciation (other than depreciation\n\nfor the portion of the dwelling unit used for Shaklee business),\n\nmeetings and convention expenses, COGS, meals and entertainment\n\nexpenses, car and truck expenses, travel expenses, and royalty\n\nincome expenses. However, petitioners are not entitled to deduct\n\nthe costs of dog care, clothes for a meeting, personal birthday\n\ngifts, and a wedding gift. See sec. 262 (no deduction allowed\n\nfor personal, living, or family expenses).\n\n There is a lack of proof of a bona fide rental. There was\n\nno written rental agreement. The purported rental agreement has\n\nlittle reality beyond tax planning. The purported rental was not\n\nat arm\u2019s length, and we disregard it for a lack of economic\n\nsubstance.6 Accordingly, pursuant to section 280A, petitioners\n\nare not entitled to deduct rental expenses, utilities expenses,\n\nrepairs and maintenance expenses, mortgage interest expense, a\n\nresidential property tax expense, and office depreciation.7\n\n\n 6\n Additionally, Mr. and Mrs. Chaney made personal use of\nthe alleged rental space. One of petitioners\u2019 dogs is confined\nall day to the Shaklee office space. Mrs. Chaney prefers this\ndog \u201cnot be in the other part of the house\u201d to prevent it from\nshedding in other parts of the house. Two other dogs stay in the\nother parts of petitioners\u2019 house during the day, but the Shaklee\noffice space is where the two other dogs sleep at night.\n 7\n Pursuant to sec. 1402(a), \u201cnet earnings from self-\nemployment\u201d include gross income derived by an individual from\nany trade or business carried on by a partnership of which the\nindividual is a member. Disallowance of these expenses and\n (continued...)\n\f - 12 -\n\nSection 6662(a) Penalty\n\n Section 7491(c) provides that the Commissioner bears the\n\nburden of production with respect to the liability of any\n\nindividual for additions to tax and penalties. \u201cThe\n\nCommissioner\u2019s burden of production under section 7491(c) is to\n\nproduce evidence that it is appropriate to impose the relevant\n\npenalty, addition to tax, or additional amount\u201d. Swain v.\n\nCommissioner, 118 T.C. 358, 363 (2002); see also Higbee v.\n\nCommissioner, 116 T.C. 438, 446 (2001). The Commissioner,\n\nhowever, does not have an obligation to introduce evidence\n\nregarding reasonable cause or substantial authority. Higbee v.\n\nCommissioner, supra at 446-447.\n\n Respondent determined that petitioners are liable for the\n\nsection 6662(a) penalty for 2003. Pursuant to section 6662(a)\n\nand (b)(1) and (2), a taxpayer may be liable for a penalty of 20\n\npercent on the portion of an underpayment of tax due to\n\nnegligence or disregard of rules or regulations or a substantial\n\nunderstatement of income tax. An \u201cunderstatement\u201d is the\n\ndifference between the amount of tax required to be shown on the\n\nreturn and the amount of tax actually shown on the return. Sec.\n\n6662(d)(2)(A). A \u201csubstantial understatement\u201d exists if the\n\n\n\n 7\n (...continued)\nconcessions of other expenses by petitioners will result in\nincreased income flowing from BCA to petitioners. Pursuant to\nsec. 1402(a), this income is self-employment income.\n\f - 13 -\n\nunderstatement exceeds the greater of (1) 10 percent of the tax\n\nrequired to be shown on the return for a taxable year or (2)\n\n$5,000. See sec. 6662(d)(1)(A). Respondent has met his burden\n\nof production as he determined a substantial understatement of\n\nincome tax in the notice of deficiency.\n\n The accuracy-related penalty is not imposed with respect to\n\nany portion of the underpayment as to which the taxpayer acted\n\nwith reasonable cause and in good faith. Sec. 6664(c)(1). The\n\ndecision as to whether the taxpayer acted with reasonable cause\n\nand in good faith depends upon all the pertinent facts and\n\ncircumstances. Sec. 1.6664-4(b)(1), Income Tax Regs.\n\n Among other things, petitioners failed to report income from\n\nPrudential Insurance Company of America and the National\n\nInstitutes of Health for 2003. Additionally, they deducted the\n\ncosts of dog care, clothes for a meeting, personal birthday\n\ngifts, and a wedding gift. These facts establish that\n\npetitioners did not act with reasonable cause and in good faith.\n\n We note that petitioners\u2019 tax return preparer was not called\n\nas a witness. We infer that his testimony would not have been\n\nfavorable to petitioners. See Wichita Terminal Elevator Co. v.\n\nCommissioner, 6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513 (10th\n\nCir. 1947).\n\f - 14 -\n\n Accordingly, we sustain the section 6662(a) penalty.\n\n In reaching our holdings herein, we have considered all\n\narguments made by the parties, and to the extent not mentioned\n\nabove, we find them to be irrelevant or without merit.\n\n To reflect the foregoing,\n\n\n Decision will be entered\n\n under Rule 155.\n\f"} -{"text": "\n576 S.E.2d 316 (2003)\n356 N.C. 642\nIn the Matter of APPEAL OF the GREENS OF PINE GLEN LTD. Partnership from the Decision of the Durham County Board of Equalization and Review Regarding the Valuation of Certain Real Property for Tax Year 1997.\nNo. 681PA01.\nSupreme Court of North Carolina.\nFebruary 28, 2003.\n*317 S.C. Kitchen, Durham County Attorney, by Curtis Massey, Assistant County Attorney, for appellant Durham County.\nParker, Poe, Adams & Bernstein L.L.P., by Charles C. Meeker and William H. McCullough, Raleigh, for taxpayer-appellee The Greens of Pine Glen.\nNorth Carolina Association of County Commissioners, by James B. Blackburn, III, General Counsel, amicus curiae.\nMoore & Van Allen PLLC, by Susan Ellinger, Charles H. Mercer, Jr., and Marc C. Tucker, Raleigh, on behalf of the North Carolina Low Income Housing Coalition, amicus curiae.\nEDMUNDS, Justice.\nRespondent The Greens of Pine Glen, Limited Partnership (taxpayer), instituted this action against petitioner Durham County to review petitioner's ad valorem tax valuation of taxpayer's property, The Greens of Pine Glen, which is located in Durham, North Carolina. The North Carolina Property Tax Commission, sitting as the State Board of Equalization and Review, confirmed the valuation assigned by Durham County, but the Court of Appeals reversed and remanded the matter to the Commission for further proceedings. We hold that the Commission properly confirmed Durham County's appraisal of The Greens of Pine Glen. Accordingly, we reverse the Court of Appeals. In addition, we remand to the Court of Appeals for further remand to the North Carolina Property Tax Commission for the limited purpose of substituting in its final decision the correct square footage value for The Greens of Pine Glen.\nThe Greens of Pine Glen is a 168-unit apartment complex constructed in southwest Durham in 1996 pursuant to 26 U.S.C. \u00a7 42. This statute, which is part of the Internal Revenue Code and is commonly referred to as \"section 42,\" provides substantial federal income tax credits as an incentive for developers to construct and operate housing for low-income families and individuals. 26 U.S.C. \u00a7 42 (2000). A potential tenant is eligible to rent a section 42 unit only if that tenant's income does not exceed sixty percent of the area's median income. Id. In exchange for the tax credits, developers agree to limit rents for a section 42 unit to no more than thirty percent of the sixty percent median income level. Id. In addition to the *318 federal tax credit, North Carolina also provides state income tax credits to reward participation in the section 42 program (the program). N.C.G.S. \u00a7 105-129.16B (2001). Thus, section 42 tax credits fill the gap between the cost of developing the property and the reduced rents received from tenants, making section 42 construction projects attractive to developers.\nPublic agencies within each state administer the program and allocate the available federal and state tax credits. The North Carolina Housing Finance Agency, which is the responsible agency in this state, awards tax credits on the basis of several criteria, including the number of units built with rent restrictions and the overall cost of construction. Taxpayer presented evidence that, in practice, section 42 developments are sufficiently desirable that interested developers compete for them. In fact, taxpayer's witness testified before the Commission that the number of applicants typically equals five times the available resources. Moreover, the high demand for such housing often results in a low vacancy rate. As a result, developers desiring the credits frequently agree to terms that exceed the minimum requirements of the program. In the case at bar, in order to maximize the credits available to it, taxpayer chose to construct one hundred percent of The Greens of Pine Glen as a section 42 program. In addition, taxpayer offered to extend the period of the restrictions beyond the mandatory fifteen years up to a total of thirty years. The rents taxpayer charges for its apartments are twenty-five to thirty percent below market rents for apartments of similar size, construction, and location, but are the maximum allowed for continued participation in the program.\nTaxpayer's witness testified that developers of section 42 properties who receive an allocation from the North Carolina Housing Finance Agency almost always form a limited partnership with one or more limited or investor partners. The developer/general partner allocates the tax credits to the limited partners, which are typically Fortune 500 companies. Taxpayer's witness explained that the limited partners' interests lie solely in the tax credits for subsequent resale. In other words, the limited partners purchase a financial product.\nThe Greens of Pine Glen was developed through the creation of such a limited partnership. W.O. Brisben Companies, a for-profit company in the affordable housing field, became a one percent general partner with a ninety-nine percent limited partner, SunAmerica Housing Fund 213, a subsidiary of AIG Insurance. The partnership agreement allocated the tax credits allowed under section 42 to each partner commensurate with its ownership interest. The federal income tax credits allocated to the project were $822,006 per year for ten years, and the limited partner paid approximately $4,700,000 for its share of these credits. These funds were used to develop The Greens of Pine Glen, whose construction cost $10,800,000.\nAfter construction was completed, Durham County in April 1997 sent taxpayer a tax appraisal that valued the property at $5,941,692. Durham County arrived at this value by using the income approach method of appraisal, which took into account the market impact of section 42 use and rent restrictions on the property. However, at that time, Durham County used the cost approach method of appraisal to value restricted-rent properties and newly developed properties that did not have a rental history. The cost approach method of appraisal considers market rents and does not take into account rent restrictions. Consequently, owners of other restricted-rent properties suggested to Durham County tax officials that an error had been made when the income method was used to value The Greens of Pine Glen.\nOn 9 May 1997, Durham County delivered to taxpayer a revised appraisal of $7,488,350, based on the cost approach. Durham County later discovered that it had erred in calculating the property's square footage in its May 1997 appraisal and accordingly sent a corrected third appraisal to taxpayer in 1998, decreasing the appraised value to $7,250,050 for tax year 1998.\nTaxpayer appealed Durham County's May 1997 appraisal to the Durham County Board of Equalization and Review, which affirmed *319 the $7,488,350 value. Taxpayer then appealed to the Commission, which conducted a hearing on 13 and 14 April 2000. On 19 June 2000, in a split decision, the Commission confirmed Durham County's May 1997 appraisal.\nTaxpayer appealed the Commission's decision to the North Carolina Court of Appeals. On 20 November 2001, the Court of Appeals issued a unanimous opinion reversing the Commission. After determining that Durham County overvalued The Greens of Pine Glen by using market rents to determine its value under the cost approach, In re Appeal of Greens of Pine Glen Ltd. Part., 147 N.C.App. 221, 555 S.E.2d 612 (2001), the Court of Appeals held that The Greens of Pine Glen must be valued \"using the income method or a combination of methods which account for the market effect of the section 42 [rent] restrictions,\" id. at 229-30, 555 S.E.2d at 618. Accordingly, the Court of Appeals remanded the matter for receipt of additional evidence on the property's value. Id. at 230, 555 S.E.2d at 618. On 6 March 2002, this Court allowed Durham County's petition for discretionary review.\nPetitioner Durham County contends that the Court of Appeals erred when it reversed and remanded the Commission's decision. Durham County argues that the Commission properly concluded that taxpayer failed to meet its burden to rebut the presumption that the county's appraisal was correct. We review decisions of the Commission pursuant to N.C.G.S. \u00a7 105-345.2. N.C.G.S. \u00a7 105-345.2 (2001). Questions of law receive de novo review, while issues such as sufficiency of the evidence to support the Commission's decision are reviewed under the whole-record test. N.C.G.S. \u00a7 105-345.2(b). Under a de novo review, the court considers the matter anew and freely substitutes its own judgment for that of the Commission. Mann Media, Inc. v. Randolph Cty. Planning Bd., 356 N.C. 1,13, 565 S.E.2d 9, 17 (2002). Under the whole-record test, however, the reviewing court merely determines \"`whether an administrative decision has a rational basis in the evidence.'\" In re Appeal of McElwee, 304 N.C. 68, 87, 283 S.E.2d 115, 127 (1981) (quoting In re Rogers, 297 N.C. 48, 65, 253 S.E.2d 912, 922 (1979)). Because the controlling issue in this case is whether the Commission properly accepted Durham County's method of valuing The Greens of Pine Glen rather than the method offered by taxpayer, we use the whole-record test to evaluate the conflicting evidence.\nAd valorem tax assessments are presumed to be correct. Id. at 75, 283 S.E.2d at 120. However, a taxpayer may rebut this presumption if it produces \"competent, material and substantial\" evidence establishing that: \"(1) Either the county tax supervisor used an arbitrary method of valuation; or (2) the county tax supervisor used an illegal method of valuation; AND (3) the assessment substantially exceeded the true value in money of the property.\" In re Appeal of AMP, Inc., 287 N.C. 547, 563, 215 S.E.2d 752, 762 (1975). Thus, a taxpayer who is challenging an ad valorem tax assessment must satisfy a two-prong test by demonstrating that the means adopted by the tax supervisor was illegal or arbitrary and also that the valuation was unreasonably high. Id. If a taxpayer fails to present evidence sufficient to meet its burden as to either prong, the appeal fails. Id.\nThe Commission concluded Durham County adequately established that it appraised The Greens of Pine Glen in accordance with its duly adopted schedules of values, standards, and rules, and in a manner consistent with the county's appraisal of comparable properties. In addition, the Commission found that taxpayer failed to show by competent, material, and substantial evidence that the assessed value of The Greens of Pine Glen exceeded its fair market value. After reviewing the whole record and considering taxpayer's contentions, we agree with the Commission. Therefore, we reverse the Court of Appeals.\nDurham County argues that taxpayer failed to satisfy its burden of establishing that the method of appraisal used was illegal or arbitrary.[1] The North Carolina General *320 Assembly requires that all property, real and personal, be assessed for taxation at its true value or use value as determined under section 105-283. N.C.G.S. \u00a7 105-284(a) (2001). The words \"true value\" are interpreted as meaning market value, \"that is, the price estimated in terms of money at which the property would change hands between a willing and financially able buyer and a willing seller.\" N.C.G.S. \u00a7 105-283 (2001). In determining the \"true value\" of real property, an appraiser must consider, among other things, its \"replacement cost; cost; adaptability for residence, commercial, industrial, or other uses; past income; probable future income; and any other factors that may affect its value.\" N.C.G.S. \u00a7 105-317(a)(2) (2001). However, the general statutes nowhere mandate that any particular method of valuation be used at all times and in all places. In light of the innumerable possible situations that may arise, authorities that have the obligation of assigning a value to land sensibly are given discretion to apply the method that most accurately captures the \"true value\" of the property in question.\nSection 105-317 has been interpreted as authorizing three methods of valuing real property: the cost approach, the comparable sales approach, and the income approach. In re Appeal of Owens, 144 N.C.App. 349, 353, 547 S.E.2d 827, 829, appeal dismissed and disc. rev. denied, 354 N.C. 361, 556 S.E.2d 575 (2001); In re Appeal of Stroh Brewery Co., 116 N.C.App. 178, 186, 447 S.E.2d 803, 807 (1994) (citing Patrick K. Hetrick, Larry A. Outlaw & James A. Webster, Jr., North Carolina Real Estate for Brokers and Salesmen, ch. 16, at 604 (3d ed.1986)); City of Statesville v. Cloaninger, 106 N.C.App. 10, 16, 415 S.E.2d 111, 115, appeal dismissed and disc. rev. denied, 331 N.C. 553, 418 S.E.2d 664 (1992). Although the income approach is generally considered the most reliable method for determining the market value of investment property, the cost approach is better suited for valuing specialty property or newly developed property and is often used when no other method will yield a realistic result. In re Appeal of Belk-Broome Co., 119 N.C.App. 470, 474, 458 S.E.2d 921, 924 (1995), aff'd per curiam, 342 N.C. 890, 467 S.E.2d 242 (1996). The statute contemplates that the assessors and the Commission will consider which factors apply to each specific piece of property in appraising its true value. See In re Ad Valorem Valuation of Prop. at 411-417 W. Fourth St., 282 N.C. 71, 81, 191 S.E.2d 692, 698 (1972).\nAlthough both the income and the cost approaches are legal methods of valuation, the Court of Appeals held that the use of the cost approach was illegal under the circumstances of this case because that method does not consider income restrictions required by taxpayer's participation in the section 42 program. In re Appeal of Greens of Pine Glen Ltd. Part., 147 N.C.App. at 229-30, 555 S.E.2d at 617-18. Accordingly, the Court of Appeals mandated that an appraiser of section 42 property must use the income approach or a combination of methods, including the income approach, that account for section 42 rent restrictions. Id. We begin by addressing this requirement.\nThis Court has consistently held that where the income approach is used, the valuation must be based on market rents, not contractually restricted rents. In re Appeals of Southern Ry. Co., 313 N.C. 177, 190, 328 S.E.2d 235, 244 (1985); In re Ad Valorem Valuation of Prop. at 411-417 W. Fourth St., 282 N.C. at 79-80, 191 S.E.2d at 698; In re Prop. of Pine Raleigh Corp., 258 N.C. 398, 403, 128 S.E.2d 855, 859 (1963). In Property of Pine Raleigh, this Court considered the effect on tax valuation of a long-term lease that fixed the rental income the taxpayer could receive. The taxpayer argued that he had improvidently entered a lease under which the tenant payed a low rent, and as a result, the taxpayer was not receiving full value for his property. In Prop. of Pine Raleigh Corp., 258 N.C. at 400-01, 128 S.E.2d at 856-57. We held that when valuing real property in accordance with N.C.G.S. \u00a7 105-295 (now N.C.G.S. \u00a7 105-317), *321 \"the income referred to is not necessarily actual income. The language is sufficient to include the income which could be obtained by the proper and efficient use of the property.\" Id. at 403, 128 S.E.2d at 859. Accordingly, we held that taxpayers cannot adjust the value of their property by engaging in contractual agreements that reduce the income potential of their property below the fair market value. Id. at 404-05, 128 S.E.2d at 859-60.\nWe acknowledge that where two properties are taxed the same, the owner of the property that yields less income bears a proportionately higher tax burden than the owner of the property that produces a greater income. However, any such inequality is attributable to the differences in the nature, use, and other characteristics of the properties, not to the taxing statute. Id. at 404, 128 S.E.2d at 860; see also In re Ad Valorem Valuation of Prop. at 411-417 W. Fourth St., 282 N.C. at 78-80, 191 S.E.2d at 697-98 (holding that where contract rents produced a higher-than-market value, the appraiser could properly consider both the actual rental income and the market rental income). Therefore, this Court has held that \"[i]f it appears that the income actually received is less than the fair earning capacity of the property, the earning capacity should be substituted as a factor rather than the actual earnings. The fact-finding board can properly consider both.\" In Prop. of Pine Raleigh Corp., 258 N.C. at 403, 128 S.E.2d at 859.\nLike the long-term lease in Property of Pine Raleigh, which locked the property owner into a less-than-optimal rent, taxpayer's contractual agreement to section 42 rent restrictions meant The Greens of Pine Glen no longer earned the market rate in rents. Taxpayer voluntarily entered into such an agreement because of the substantial tax credits it received in return. Taxpayer could have built these apartments for rental on the open market, but it chose to be in the business of affordable housing in order to take advantage of the various federal and state incentives. Its participation in the section 42 program created another way to finance taxpayer's building project because the sale of the tax credits generated funds that taxpayer used to construct The Greens of Pine Glen. Therefore, taxpayer's participation in section 42 housing represented a business and economic decision, not unlike the long-term lease in Property of Pine Raleigh.\nMoreover, even if Durham County valued The Greens of Pine Glen under the income approach as mandated by the Court of Appeals' holding, the \"income\" considered would not necessarily be actual income. Under Property of Pine Raleigh, if taxpayer received less than the fair earning capacity of The Greens of Pine Glen in rents, the fair earning capacity could control over or be considered along with the actual earnings. Therefore, even under the income approach of appraisal, Durham County and the Commission were not required as a matter of law to consider section 42 restrictions. Accordingly, taxpayer's contention that Durham County's method of appraisal was not legal because it did not consider the section 42 restrictions is insufficient to rebut the presumption that the appraisal was properly administered.\nTaxpayer's arguments to the contrary are not persuasive. The Court of Appeals agreed with taxpayer's contention that section 42 restrictions are more analogous to governmental regulation than to freely entered contractual covenants. Taxpayer argued that the rent restrictions at bar resembled zoning provisions, which are routinely considered in appraising real property. However, this Court rejected such an equivalency when we held that \"[a] zoning ordinance is not a contract between the municipality and its citizens.... It is subject to amendment or repeal at the will of the governing agency which created it.\" McKinney v. City of High Point, 239 N.C. 232, 237, 79 S.E.2d 730, 734 (1954). By contrast, when a state or governmental body becomes a party to a business contract, its rights and responsibilities are, with few exceptions, the same as those of individuals. Smith v. State, 289 N.C. 303, 310, 222 S.E.2d 412, 417 (1976). Therefore, governmental restrictions imposed as part of a state's police power are distinguishable from contractual agreements freely entered into between parties participating in arm's-length negotiations.\n*322 As detailed above, ample evidence was presented to establish that section 42 restrictions fall into the latter category. Unlike a governmental restriction such as zoning, section 42 restrictions do not diminish the property's value, but instead balance tax credits allowed to the developer against rent restrictions imposed on the developer. Because section 42 restrictions are freely entered contractual covenants, not governmental regulations, the Commission did not err in concluding that taxpayer may not artificially alter the value of its property below fair market value.\nAlthough the Court of Appeals relied on In re Appeal of Belk-Broome Co., 119 N.C.App. 470, 458 S.E.2d 921, for the proposition that the section 42 program represents a new and distinct market requiring the consideration of its contractual restrictions, In re Appeal of Greens of Pine Glen Ltd. Part., 147 N.C.App. at 226-29, 555 S.E.2d at 616-18, we believe that Belk-Broome is distinguishable. In Belk-Broome, the taxpayer, a Belk department store that served as an anchor store for a mall, successfully challenged a final decision of the Commission that upheld the county's ad valorem tax appraisal of the Belk property using the cost approach method of valuation. The Commission concluded that the county correctly appraised the property based upon the \"entire bundle of rights\" without regard as to whether Belk had chosen to bargain some of those rights away. In re Appeal of Belk-Broome Co., 119 N.C.App. at 476-77, 458 S.E.2d at 925. The Court of Appeals reversed and held that Belk \"unquestionably carried its burden\" of showing that the county's valuation was improper and that the income approach should be the primary method for determining the value of anchor stores. Id. at 475, 480, 458 S.E.2d at 924, 927.\nUnder the Commission's interpretation, Belk, as an anchor store, both enhanced the square-foot value of other stores, and then was itself taxed at the enhanced rate. Id. at 479, 458 S.E.2d at 926. The Court of Appeals recognized that this enhanced tax was improper. Unlike stand-alone facilities, anchor stores hold a unique position in mall retail operations. Id. at 475-76, 458 S.E.2d at 925. Anchor stores both attract smaller stores to the mall and allow mall managers to charge increased rents to those smaller stores. Because the success of a shopping mall is dependent on the presence of anchor stores and because the developer can charge the smaller stores increased rents, the anchors are afforded discounted rents. Under these facts, the Court of Appeals held that it was improper for the Commission to use the cost approach method of valuation to equalize property values between the anchor store and the other surrounding stores in the mall. Id. at 476, 480, 458 S.E.2d at 925, 927.\nSignificant factual differences distinguish the case at bar from Belk-Broome. Unlike a mall anchor store, The Greens of Pine Glen does not attract or retain other taxable property, nor does its presence confer any greater value on associated or adjacent properties. Section 42 rent restrictions do not apply to all apartment complexes, and section 42 restrictive covenants are not standard in the apartment industry. Those developers who choose to participate in the section 42 program voluntarily trade away revenue potential in order to finance the property's construction. Accordingly, we conclude that the analysis in Belk-Broome is inapplicable here.\nBecause taxpayer failed to meet the first prong of the test by establishing that the Commission used a valuation method that was illegal or arbitrary, we need not address the second prong, whether the appraisal exceeded the \"true value in money\" of the property. In addition, because we reverse the opinion of the Court of Appeals on the basis of the application of the facts to the statute, we need not reach Durham County's contention that the Court of Appeals' opinion represented an unconstitutional infringement by the judiciary on the powers of the General Assembly. State v. Creason, 313 N.C. 122, 127, 326 S.E.2d 24, 27 (1985).\nOur review of the record reveals that although the property was reappraised in 1998 to correct an error in the May 1997 appraisal caused by a miscalculation of the square footage of the property, the Commission considered only the uncorrected value in its 2000 Order. Durham County argues that this Court does not have authority to remand *323 this case to the Commission for reconsideration based on the correct square footage. See N.C.G.S. \u00a7 105-345.1. However, our reading of that statute satisfies us that it addresses only evidence that becomes known after the hearing before the Commission. Here, the evidence (in the form of the corrected valuation) was known before the hearing but was not considered at the hearing. Thus, the Commission considered the incorrect square footage value in its decision.\nBased upon the foregoing, we reverse the decision of the Court of Appeals. We also remand this matter to the Court of Appeals for further remand to the North Carolina Property Tax Commission for the limited purpose of substituting in its final decision the correct square footage value for The Greens of Pine Glen. See N.C.G.S. \u00a7 105-345.2(b).\nREVERSED AND REMANDED.\nJustice BRADY did not participate in the consideration or decision of this case.\nNOTES\n[1] Although the parties correctly note that the taxpayer may rebut the presumption of correctness of an assessment by showing that the method of valuation is either illegal or arbitrary, the Court of Appeals' opinion and taxpayer's brief to this Court focus almost entirely on the purported illegality of the method used here. In light of unrebutted evidence that Durham County used the cost approach to value other similar property, we believe that there is no suggestion that the method employed in the case at bar was arbitrary.\n"} -{"text": " UNPUBLISHED ORDER\n Not to be cited per Circuit Rule 53\n\n\n United States Court of Appeals\n For the Seventh Circuit\n Chicago, Illinois 60604\n Submitted May 18, 2005\n Decided May 19, 2005\n\n\n Before\n\n Hon. JOEL M. FLAUM, Chief Judge\n\n Hon. FRANK H. EASTERBROOK, Circuit Judge\n\n Hon. ILANA DIAMOND ROVNER, Circuit Judge\n\n\nUNITED STATES OF AMERICA, Appeal from the United\n Plaintiff-Appellee, States District Court\n for the Northern\nNo. 04-1425 v. District of Illinois,\n Eastern Division.\nTHOMAS JOHNSON,\n Defendant-Appellant. No. 99 CR 785-1\n David H. Coar, Judge.\n\n\n\n\n Order\n\n The United States has confessed error in this appeal, in\nlight of United States v. Booker, 125 S. Ct. 738 (2005).\nMoreover, the United States concedes that (a) the issue was\npreserved in the district court, and (b) the error is not\nharmless. Accordingly, the sentence is vacated, and the case is\nremanded for resentencing consistent with the remedial procedure\nlaid out in Booker.\n\f"} -{"text": "\n495 A.2d 756 (1985)\nUNITED STATES, Appellant,\nv.\nFrancis BAILEY, Appellee.\nNo. 84-240.\nDistrict of Columbia Court of Appeals.\nArgued November 27, 1984.\nDecided July 25, 1985.\n*757 Thomas Tourish, Jr., Asst. U.S. Atty., Washington, D.C., with whom Joseph E. diGenova, U.S. Atty., Michael W. Farrell, Steven D. Gordon and Natalia M. Combs, Asst. U.S. Attys., Washington, D.C., were on the brief, for appellant.\nJennifer P. Lyman, Public Defender Service, Washington, D.C., with whom James Klein, Washington, D.C., was on the brief, for appellee.\nBefore FERREN, BELSON, and ROGERS, Associate Judges.\nBELSON, Associate Judge:\nThe trial court dismissed an indictment charging appellee with second-degree burglary, D.C.Code \u00a7 22-1801(b) (1981), and grand larceny, id. \u00a7 22-2201, repealed and superseded by id. \u00a7\u00a7 22-3811, -3812 (1984 Supp.), on the ground that appellee's rights under the Interstate Agreement on Detainers Act, 18 U.S.C.app. at 545-48 (1982); D.C.Code \u00a7\u00a7 24-701-705 (1981), had been violated.[1] On appeal, the government argues that the IAD does not apply to detainers lodged against federal prisoners if they are based on violations of the District of Columbia Code prosecuted by the United States Attorney in the Superior Court of the District of Columbia. We affirm.\nAppellee was convicted of interstate transportation of stolen property, 18 U.S.C. \u00a7 2314 (1982), in the United States District Court for the District of Arizona, and was incarcerated in the federal prison camp at Safford, Arizona. The United States Marshal lodged a detainer against appellee, dated March 30, 1983, based upon a warrant for his arrest for felonies allegedly committed in the District of Columbia. The detainer requested that the federal prison authorities notify the United States Marshal of the transfer or release of appellee. Apparently, the Safford prison officials failed to notify appellee of the existence of the detainer.[2] Shortly after appellee's transfer on June 14, 1983, to the federal prison camp in Tucson, Arizona, the prison officials there advised him of his right to request final disposition of the charges against him in the District of Columbia. The prison officials in Tucson sent the forms executed by appellee to the United States Marshal in Tucson, instead of *758 directly to the appropriate prosecuting official and court as provided for by Article III(b) of the IAD.[3]\nThe United States Marshal Service, however, never forwarded these forms to the United States Attorney for the District of Columbia, the Superior Court of the District of Columbia, or any other official in the District.\nAppellee was later brought to the District on a writ of habeas corpus ad prosequendum, issued by the Superior Court on the petition of the United States Attorney for the District of Columbia. Appellee arrived in the District on December 14, 1983, and was arraigned in Superior Court on December 21, 1983.[4] The judge continued the case for status hearing and trial. The trial court later granted appellee's motion to dismiss the indictment, ruling that: (1) appellee had invoked the IAD; (2) appellee was not brought to trial in the District within the 180-day time limit of Article III, and (3) the provisions of the IAD applied to prisoners such as appellee. On appeal, the government does not seek review of the first two findings; it contends only that the requirements of the IAD do not apply to appellee.\nThe IAD is an interstate compact entered into by the \"United States on its own behalf and on behalf of the District of Columbia.\" 18 U.S.C. app. \u00a7 2 at 545 (1982); D.C.Code \u00a7 24-701 (1981). A detainer is a notice \"`filed with the institution in which a prisoner is serving a sentence, advising that he is wanted to face pending criminal charges in another jurisdiction.'\" United States v. Mauro, 436 U.S. 340, 359, 98 S.Ct. 1834, 1846, 56 L.Ed.2d 329 (1978) (quoting H.R.REP. No. 1018, 91st Cong., 2d Sess. 2 (1970); S.REP. No. 1356, 91st Cong., 2d Sess. 2, reprinted in 1970 U.S.CODE CONG. & AD. NEWS 4864, 4865. Prior to the IAD, prisoners were not able to initiate legal proceedings to clear detainers based upon charges arising in jurisdictions other than the jurisdiction where they were incarcerated. H.R.REP. No. 1018 at 2; S.REP. No. 1356 at 2. The purpose of the IAD is \"to encourage the expeditious disposition of such charges and to provide cooperative procedures among member States to facilitate such disposition.\" Mauro, 436 U.S. at 351, 98 S.Ct. at 1842.\nArticle III of the IAD provides that a prisoner may demand final disposition of the charges forming the basis of the detainer from a foreign jurisdiction.[5] The *759 official of the sending state having custody of the prisoner must notify the prisoner of the source and contents of any detainer lodged against him, and must inform the prisoner of his rights under the IAD.[6] Article III(c). If the prisoner wishes to invoke his rights under the IAD he must submit to the official having custody written notice of the place of his imprisonment and a request for a final disposition of the charges giving rise to the detainer. Article III(a), (b). The official shall deliver the prisoner's written notice and request for final disposition, along with a prison certificate, to the \"prosecuting officer and the appropriate court of the prosecuting officer's jurisdiction.\" Id. The prisoner must be brought to trial in the receiving state on the charges underlying the detainer within 180 days after the prisoner has caused to be delivered the request for trial disposition.[7] Article III(a). If the prisoner is not brought to trial within 180 days, the appropriate court of the receiving state shall dismiss the indictment, information, or complaint upon which the detainer is based. Article V(c).[8] The court having jurisdiction may, however, grant any necessary or reasonable continuance for good cause shown.[9] Article III(a).\nThe government contends that the IAD does not apply to detainers lodged against federal prisoners for prosecutions by the United States Attorney in the Superior Court. The government observes that appellee was in the custody of the United States in Arizona; the detainer was filed by the United States Marshal; the United States Attorney sought appellee's presence in the District; and the United States Attorney was the prosecutor in the Superior Court. According to the government, the District's status as a \"state\" in the IAD is limited to those instances in which the detainer is based upon an offense prosecuted by the District of Columbia Corporation Counsel, rather than the United States Attorney *760 for the District of Columbia.[10] Thus focusing on the identity of the prosecuting authority, the government argues that the IAD is simply inapplicable to the present detainer because the IAD does not apply to intra-jurisdictional detainers.[11]\nThe trial court, on the other hand, concluded that the language, purpose, and legislative history of the IAD establishes that it applies to detainers lodged against federal prisoners based upon any D.C.Code charge tried in the Superior Court. In the view of the trial court, a distinction grounded upon the identity of the prosecutor is contrary to the plain meaning and purpose of the IAD. We agree with that view, and affirm the dismissal of the indictment against appellee.\nThe first step in statutory construction requires us to read the language of the statute and construe its words according to their ordinary sense and plain meaning. Peoples Drug Stores v. District of Columbia, 470 A.2d 751, 753-54 (D.C.1983) (en banc). The IAD defines a \"state\" as: \"a State of the United States; the United States of America; a territory or possession of the United States; the District of Columbia; the Commonwealth of Puerto Rico.\" Article II(a). The plain meaning of this definition is that the District is a \"state\" distinct from the United States. Each jurisdiction in the definition is separated by semicolons. The language suggests no limitation based upon the identity of the prosecuting authority.\nOther provisions of the Act indicate that it contemplates the District of Columbia and its court system as wholly distinct from the United States. The IAD requires each party state to designate an officer to promulgate rules and regulations and provide information to effectuate the IAD. Article VII. Congress designated the Attorney General of the United States as the officer for the United States, and, distinctly, the Mayor of the District of Columbia as *761 the officer for the District. 18 U.S.C.app. \u00a7 6 at 548; D.C.Code \u00a7 24-704.[12] The enacting legislation defines \"Governor,\" as used in the IAD, separately with respect to the United States\u0097the Attorney General \u0097 and with respect to the District\u0097the Mayor. 18 U.S.C.app. \u00a7 3 at 547; D.C.Code \u00a7 24-702(a). It also defines the term \"appropriate court\" discretely with respect to the United States\u0097\"the courts of the United States\"\u0097and the District\u0097\"the courts of the District of Columbia.\" 18 U.S.C.app. \u00a7 4 at 547; D.C.Code \u00a7 24-702(b). Thus, in the IAD and throughout the enacting legislation adopted by Congress, the United States and the District of Columbia are listed as distinct jurisdictions without limitation by reference to the prosecuting authority.\nThe government argues that there is a statutory focus upon the identity of the prosecuting officer, citing the language of Article III(a) to the effect that the IAD is invoked by the prisoner's request for final disposition addressed \"to the prosecuting officer and the appropriate court of the prosecuting officer's jurisdiction.\" We disagree, however, that Article III(a) stresses the role of the prosecutor above that of the \"appropriate court.\" To the contrary, Congress defined the term \"appropriate court\" differently for the United States and the District, 18 U.S.C.app \u00a7 4 at 457; D.C.Code \u00a7 24-702(b), but did not define the term \"prosecuting officer.\" This lends support to the interpretation that the identity of the \"appropriate court\" is central to the determination of when the IAD applies.\nWe thus conclude that the plain meaning of the IAD and the legislation that enacted it is that a detainer lodged against a federal prisoner with respect to charges to be tried in the Superior Court is a detainer from a \"state\" other than the United States, regardless of whether the prosecutor is the U.S. Attorney or the Corporation Counsel.\nThe government, however, suggests that a review of the legislative history of the IAD will support its interpretation. We agree that even though the language of the IAD has a \"superficial clarity,\" that should not end our inquiry, for \"a review of the legislative history or an in-depth consideration of alternative constructions that could be ascribed to statutory language may reveal ambiguities that the court must resolve.\" Peoples Drug Stores, 470 A.2d at 754.\nThe first formulation of what was to become the IAD was contained in a 1956 report of the Council on State Governments that recommended several uniform statutes to address the \"difficulties inherent in the existing detainer system [that] affect judges, the institutional officials, the paroling authorities and the individual [prisoner] himself.\" COUNCIL OF STATE GOVERNMENTS, SUGGESTED STATE LEGISLATION PROGRAM FOR 1957 at 74 (1956) [hereinafter CSG SUGGESTED LEGISLATION]. Pertinent to our discussion, the report explained that \"[a]t the present time, there is no means by which a prisoner may initiate proceedings to clear a detainer placed against him from another jurisdiction. This is equally true on an interstate and a federal-state basis.\" Id. at 78. The CSG SUGGESTED LEGISLATION defined a \"state\" as \"a state of the United States; the United States of America; a territory or possession of the United States; the District of Columbia; the Commonwealth of Puerto Rico.\" Id. at 81.\nCongressman Celler introduced an IAD bill in the House of Representatives based upon the draft CSG SUGGESTED LEGISLATION. H.R. 8365, 88th Cong., 1st Sess. (1963). No action was taken by Congress on the IAD until Congressman Celler reintroduced it in the 90th Congress. H.R. 15421, 90th Cong., 2d Sess. (1968). Section 2 of that *762 bill declared that the IAD \"is hereby enacted into law and entered into by the United States with all jurisdictions legally joining. . .\" Id. \u00a7 2. The definition of a \"state\" in the bill was identical to the definition in the CSG SUGGESTED LEGISLATION. See id. With respect to the United States, the bill defined the term \"Governor\" as the Attorney General, id. \u00a7 3, and \"appropriate court\" as the United States court in which detainers were pending. Id. \u00a7 4. The bill contained no definition of \"Governor\" or of \"appropriate court\" for the District of Columbia.\nThe House Committee on the Judiciary reported H.R. 15421 to the Committee of the Whole House, with \"amendments . . . proposed by the government of the District of Columbia.\" H.R.REP. No. 1332, 90th Cong., 2d Sess. 1 (1968). The House Committee amended the IAD legislation to permit the District to join the Agreement. It added the District to the enacting clause: \"the [IAD] is hereby enacted into law and entered into by the United States on its own behalf and on behalf of the District of Columbia.\" H.R. 15421, 90th Cong., 2d Sess. (1968) (emphasis in original).[13]\nThe government argues that the legislative history of the amendments concerning the District demonstrates that the United States and the District are separate \"states\" under the IAD only when the detainer concerns charges prosecuted by the Corporation Council. We find some support for this argument in the House Committee Report. That report reprinted the letter of the Assistant to the Commissioner of the District. The Assistant observed that, in the absence of amendments to the IAD bill concerning the District, persons convicted of any crime occurring in the District (and therefore committed to the custody of the Attorney General of the United States), and persons to be tried for offenses against the United States (against whom the United States has lodged a detainer) and serving a prison term in a party state would be subject to the IAD. The Assistant also pointed out that, in the absence of amendments, persons yet to be tried for violations of a municipal regulation or ordinance (prosecuted by the Corporation Counsel) would not be subject to the IAD. Id. at 6-7.[14] Congress passed the IAD bill with the amendments concerning the District in the 91st Congress.[15]\n*763 The reported comments of the Assistant to the Commissioner thus reflect the underlying assumption that persons prosecuted by the United States Attorney in the local court for violations of the D.C.Code would be subject to the IAD without the amendments concerning the District. This supports the government's argument that Congress amended the proposed IAD to encompass cases prosecuted by the Corporation Counsel, rather than to cover cases like appellee's.\nOn the other hand, the remarks by two Congressmen reflect a more expansive view on the reason for the need to amend the IAD bill concerning the District. The floor manager of the bill, Congressman Kastenmeier, explained in 1968 that:\nParticipation by the District of Columbia is necessary in order to make the agreement applicable to the clearing of detainers against State prisoners where the detainers are based on alleged violations of municipal regulations, ordinances, or acts of Congress applicable solely within the District.\n\n114 CONG.REC. 11795 (1968) (emphasis added). Congressman Kastenmeier repeated that statement again in 1970. 116 CONG. REC. 13999. Comments of the floor manager are \"accorded the same weight as formal committee reports.\" 2A SUTHERLAND STATUTORY CONSTRUCTION \u00a7 48.14 at 335 (4th ed. 1984).\nCongressman Poff also spoke on behalf of the bill in 1970, and affirmed Congressman Kastenmeier's observation that the District would be a party whenever the charges are based on statutes applicable solely to the District:\n[The bill] would make the District of Columbia a party \"State\" with respect to violations of the District's municipal regulations and ordinances and of Federal statutes limited in their application to the District. The United States would become a party to the agreement with respect to Federal criminal laws of general application.\n116 CONG.REC. 14000 (1970).\nThus, in discussing the amendments concerning the District's participation in the IAD, these Congressmen related the need for such participation not only to cases arising under municipal regulations and ordinances prosecuted by the Corporation Counsel, but also to acts of Congress applicable solely within the District prosecuted generally by the United States Attorney.\nThis ambiguous and conflicting legislative history provides no \"persuasive reasons\" for departure from the plain meaning of the IAD definition that the District is a distinct \"state\" for all offenses tried in its courts. See Peoples Drug Stores, 470 A.2d at 755.\nMost significant, the legislative purpose of the IAD is best served by appellee's interpretation. The IAD is to be \"liberally construed so as to effectuate its purposes.\" Article IX. A major purpose of the IAD is \"to encourage the expeditious and orderly disposition of such charges and determination of the proper status of any and all detainers based on untried indictments, informations, or complaints.\" Article I.[16] Outstanding detainers often interfere with a prisoner's rehabilitation. Dobson v. United States, 449 A.2d 1082, 1086 (D.C. 1982), cert. denied, ___ U.S. ___, 104 S.Ct. *764 109, 78 L.Ed.2d 111 (1983). The government's construction would leave an entire class of federal prisoners, including appellee Bailey, with no satisfactory means of effecting the final disposition of detainers based on serious alleged violations of the D.C.Code. This would occur whenever the United States Attorney, who prosecutes all felonies and other serious criminal offenses in Superior Court, should lodge against a person committed to a federal prison a detainer based on an alleged violation of a statute applicable only in the District of Columbia.[17] Without a clear indication of such a Congressional intent from the language of the IAD or the legislative history, we decline to exclude that class of prisoners from the protections of the IAD.\nWe therefore hold that detainers filed against federal prisoners arising out of alleged violations of the D.C.Code to be prosecuted in the Superior Court of the District of Columbia are subject to the requirements of the IAD regardless of whether the prosecutor is the United States Attorney or the District of Columbia Corporation Counsel.\nAffirmed.\nNOTES\n[1] The Interstate Agreement on Detainers Act (Act) joins the United States and the District of Columbia as parties to the Interstate Agreement on Detainers (IAD). United States v. Mauro, 436 U.S. 340, 343, 98 S.Ct. 1834, 1838, 56 L.Ed.2d 329 (1978); 18 U.S.C. app. \u00a7 2 at 545 (1982); D.C.Code \u00a7 24-701 (1981). The IAD, which contains nine articles is incorporated in full within the Act at 18 U.S.C. app. \u00a7 2 at 545-47, and at D.C.Code \u00a7 24-701. We shall refer to provisions of the IAD by their article numbers, as they are set forth in the IAD.\n[2] The IAD requires the official having custody of a prisoner to inform the prisoner promptly that a foreign jurisdiction has lodged a detainer against the prisoner. Article III(c).\n[3] The prison officials mistakenly provided appellee with Speedy Trial Act forms instead of IAD forms. The Speedy Trial Act, 18 U.S.C. \u00a7\u00a7 3161-3174 (1982), does not apply to prosecutions in the Superior Court of the District of Columbia. United States v. Alston, 412 A.2d 351, 356 n. 10 (D.C.1980) (en banc).\n[4] The grand jury returned an indictment in the Superior Court on August 19, 1983. The clerk set the arraignment for August 23, 1983. On that date, however, the court continued the case to October 19, 1983, because appellee was imprisoned in Arizona. The docket entry concerning the court proceeding of that date reflects that the Assistant United States Attorney was to prepare a writ in order to secure appellee's presence. The court continued the case on two more occasions, each time with the understanding that the Assistant United States Attorney would prepare a writ. The Superior Court issued the writ in November 1983, and arraignment was set for December 20, 1983, The case was continued to December 21, 1983, because appellee was not brought up from jail on the 20th.\n[5] Article III provides in part:\n\n(a) Whenever a person has entered upon a term of imprisonment in a penal or correctional institution of a party State, and whenever during the continuance of the term of imprisonment there is pending in any other party State any untried indictment, information, or complaint on the basis of which a detainer has been lodged against the prisoner, he shall be brought to trial within one hundred and eighty days after he shall have caused to be delivered to the prosecuting officer and the appropriate court of the prosecuting officer's jurisdiction written notice of the place of his imprisonment and his request for a final disposition to be made of the indictment, information, or complaint: Provided, that, for good cause shown in open court, the prisoner or his counsel being present, the court having jurisdiction of the matter may grant any necessary or reasonable continuance. The request of the prisoner shall be accompanied by a certificate of the appropriate official having custody of the prisoner, stating the term of commitment under which the prisoner is being held, the time already served, the time remaining to be served on the sentence, the amount of good time earned, the time of parole eligibility of the prisoner, and any decision of the State parole agency relating to the prisoner.\n(b) The written notice and request for final disposition referred to in paragraph (a) hereof shall be given or sent by the prisoner to the warden, commissioner of corrections, or other official having custody of him, who shall promptly forward it together with the certificate to the appropriate prosecuting official and court by registered or certified mail, return receipt requested.\n(c) The warden, commissioner of corrections, or other official having custody of the prisoner shall promptly inform him of the source and contents of any detainer lodged against him and shall also inform him of his right to make a request for final disposition of the indictment, information, or complaint on which the detainer is based.\n[6] The IAD defines a \"Sending State\" as:\n\n[A] State in which a prisoner is incarcerated at the time that he initiates a request for final disposition pursuant to article III hereof or at the time that a request for custody or availability is initiated pursuant to article IV hereof.\nArticle II(b).\n[7] The IAD defines a \"Receiving State\" as:\n\n[T]he State in which trial is to be had on an indictment, information, or complaint pursuant to article III or article IV hereof.\nArticle II(c).\n[8] Article V(c) provides:\n\nIf the appropriate authority shall refuse or fail to accept temporary custody of said person, or in the event that an action on the indictment, information, or complaint on the basis of which the detainer has been lodged is not brought to trial within the period provided in article III or article IV hereof, the appropriate court of the jurisdiction where the indictment, information, or complaint has been pending shall enter an order dismissing the same with prejudice, and any detainer based thereon shall cease to be of any force or effect.\n[9] Article IV of the IAD provides a procedure whereby the prosecutor who has lodged a detainer against a prisoner in another jurisdiction may obtain temporary custody of the prisoner for trial. Trial must be commenced within 120 days of the arrival of the prisoner in the receiving state, subject to continuance for good cause shown. Article IV(a), (c). Charges must be dismissed if trial is not commenced within the 120-day time period. Article IV(e), V(c).\n[10] The prosecuting authority for crimes committed in the District is bifurcated. The Corporation Counsel prosecutes only certain minor crimes, such as violations of municipal ordinances:\n\n(a) Prosecutions for violations of all police or municipal ordinances or regulations and for violations of all penal statutes in the nature of police or municipal regulations, where the maximum punishment is a fine only, or imprisonment not exceeding one year, shall be conducted in the name of the District of Columbia by the Corporation Counsel for the District of Columbia or his assistants, except as otherwise provided in such ordinance, regulation, or statute, or in this section.\n(b) Prosecutions for violations of section 6 of the Act of July 29, 1892 (D.C.Code, sec. 22-1107), relating to disorderly conduct, and for violations of section 9 of that Act (D.C. Code, sec. 22-1112), relating to lewd, indecent, or obscene acts, shall be conducted in the name of the District of Columbia by the Corporation Counsel or his assistants.\nD.C.Code \u00a7 23-101(a), (b) (1981). The U.S. Attorney for the District of Columbia prosecutes most other criminal violations, including all felonies:\n(c) All other criminal prosecutions shall be conducted in the name of the United States by the United States attorney for the District of Columbia or his assistants, except as otherwise provided by law.\nId. \u00a7 23-101(c).\n[11] For this argument to succeed, we must also accept the government's theory that intra-federal detainers are outside the scope of the IAD because the entire federal system is a single \"state.\" Although some courts which have addressed this issue have held that all federal districts are one jurisdiction under the IAD, United States v. Bruton, 647 F.2d 818, 821 n. 1 (8th Cir.), cert. denied, 454 U.S. 868, 102 S.Ct. 333, 70 L.Ed.2d 170 (1981); United States v. Krohn, 558 F.2d 390, 392 (8th Cir.), cert. denied, 434 U.S. 868, 98 S.Ct. 207, 54 L.Ed.2d 145 (1977); United States v. Cappucci, 342 F.Supp. 790, 793 (E.D.Pa.1972), other courts have treated separate federal districts as distinct \"states\" under the IAD, United States v. Bryant, 612 F.2d 806, 810 (4th Cir.1979), cert. denied, 446 U.S. 920, 100 S.Ct. 1855, 64 L.Ed.2d 274 (1980); cf. United States v. Woods, 621 F.2d 844, 845-46 (6th Cir.,1980) (different federal districts not treated as single jurisdiction under the IAD when one federal district lodges detainer against state prisoner and another federal district secures prisoner's presence in that district by writ on unrelated charges), cert. denied, 449 U.S. 877, 101 S.Ct. 222, 66 L.Ed.2d 99 (1980). We need not reach this issue, however, in light of our holding that the detainer involved here was interjurisdictional.\n[12] Originally, Congress designated the Commissioner of the District of Columbia as the officer for the District. The statutory language was changed to the Mayor of the District of Columbia after the District of Columbia Self-Government and Governmental Reorganization Act abolished the Office of Commissioner in favor of the Office of the Mayor. See 18 U.S.C. app. note at 548 (Transfer of Functions); D.C.Code \u00a7 24-704 note on change in government.\n[13] The Committee made four other amendments to the bill providing \"definitions and administrative provisions necessary to the entry into the agreement on the part of the District of Columbia.\" H.R.REP. No. 1332, at 2. These amendments added the D.C. Commissioner to the definition of \"Governor\" in section 3, added the District of Columbia courts to the definition of \"appropriate court\" in section 4, and added the District to the administrative provisions in sections 5 and 6. Id. at 1.\n[14] The House Committee Report explained in pertinent part that:\n\nThe government of the District of Columbia has reported that unless the legislation is made applicable to the District there is no method available whereby a prisoner who is serving a term of imprisonment in one of the party States and against whom there is pending in the courts of the District of Columbia an information or complaint based upon a violation of a municipal regulation or ordinance, or an act of Congress in the nature of a municipal regulation or ordinance which is applicable solely within the District of Columbia, may require the disposition of a detainer lodged against him. Furthermore unless the legislation is made applicable to the District, its prosecuting authorities would not be able to have a prisoner in a party State made available for disposition of local detainers. For these reasons the government of the District of Columbia recommended the amendments which the committee has adopted.\nH.R.REP. No. 1332, at 4.\n[15] Although the House passed H.R. 15421 on May 6, 1968, 114 CONG.REC. 11793-96 (1968), the Senate Committee on the Judiciary did not report the bill out in the 90th Congress 114 CONG. REC. 11980 (1968). Congressman Celler reintroduced the IAD in the House of Representatives in the 91st Congress as H.R. 6951. 115 CONG.REC. 3790-91 (1969). As the House Committee noted in its report on H.R. 6951, the bill was \"identical with H.R. 15421, 90th Congress, as it passed the House.\" H.R.REP. No. 1018, 91st Cong., 2d Sess. 1 (1970). The House Committee Report repeated its explanation of the concerns of the District of Columbia. Id. at 4; see also S.REP. No. 1356, 91st Cong., 2d Sess., reprinted in 1970 U.S. CODE CONG. & AD.NEWS 4864, 4866-67. The House passed H.R. 6951 without further amendment on May 4, 1970. 116 CONG.REC. 13997-14000 (1970). The Senate passed the identical bill on November 25, 1970. 116 CONG.REC. 38840-42 (1970). The bill became law on December 9, 1970. Interstate Agreement on Detainers Act, Pub.L. No. 91-538, 84 Stat. 1397 (1970).\n[16] Another purpose of the IAD is the development of a cooperative system whereby prosecutors may secure the presence for trial of a prisoner incarcerated in another jurisdiction. CSG SUGGESTED LEGISLATION at 78. Although the prosecutors in the United States courts and the Superior Court perhaps gained less from joining the IAD on this ground because these courts have an alternative means of obtaining prisoners\u0097the writ of habeas corpus ad prosequendum \u0097 the Supreme Court held that the United States entered the agreement as both a \"sending\" and a \"receiving\" \"state.\" United States v. Mauro, 436 U.S. 340, 354-56, 98 S.Ct. 1834, 1844-45, 56 L.Ed.2d 329 (1978).\n[17] The excluded class would also include persons convicted in Superior Court of charges prosecuted by the United States Attorney who seek final disposition of charges pending against them in United States District Courts. Such persons, however, have the benefit of the Speedy Trial Act. 18 U.S.C. \u00a7\u00a7 3161-3174 (1982).\n"} -{"text": " NOTICE: NOT FOR OFFICIAL PUBLICATION.\n UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL\n AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.\n\n\n\n\n IN THE\n ARIZONA COURT OF APPEALS\n DIVISION ONE\n\n\n VR PARTNERS SRS, LLC, an Arizona limited liability company; VELOCITY\nRETAIL GROUP, LLC, a Delaware limited liability company, formerly known as\n STAUBACH RETAIL SERVICES-WEST, LLC, a Delaware limited liability\n company, Plaintiffs/Appellees/Cross-Appellants,\n\n v.\n\n STAUBACH RETAIL SERVICES, INC., a Texas corporation doing business as\n SRS REAL ESTATE PARTNERS; and SRS REAL ESTATE PARTNERS, LLC, a\n Delaware limited liability company, Defendants/Appellants/Cross-Appellees.\n\n No. 1 CA-CV 13-0504\n FILED 1-20-2015\n\n\n Appeal from the Superior Court in Maricopa County\n No. CV2009-026500\n The Honorable Hugh E. Hegyi, Judge\n\n AFFIRMED\n\n\n COUNSEL\n\nOsborn Maledon, PA, Phoenix\nBy Colin F. Campbell, John L. Blanchard, Thomas L. Hudson\nCounsel for Plaintiffs/Appellees/Cross-Appellants\n\nDickinson Wright, PLLC, Phoenix\nBy Robert A. Shull, Anne L. Tiffen\nCounsel for Defendants/Appellants/Cross-Appellees\n\f VR et al. v. STAUBACH et al.\n Decision of the Court\n\n\n\n MEMORANDUM DECISION\n\nPresiding Judge Peter B. Swann delivered the decision of the Court, in which Judge\nKenton D. Jones and Judge Michael J. Brown joined.\n\n\nS W A N N, Judge:\n\n\u00b61 This appeal involves the separation of two members of a limited\nliability company operating as a commercial real estate brokerage in Phoenix.\nStaubach Retail Services, Inc. and its assignee SRS Real Estate Partners, LLC,\nappeal from an order requiring them to pay Plaintiffs VR Partners SRS, LLC, and\nVelocity Retail Group, LLC, a share of revenues generated from an office located\nin Newport Beach, California. They also appeal the court's finding that Plaintiffs\ndid not breach an implied covenant of good faith and fair dealing. Plaintiffs cross-\nappeal, arguing the superior court erred by denying their request for attorney's\nfees as the prevailing party at trial. For the following reasons, we affirm.\n\n FACTS AND PROCEDURAL HISTORY\n\n\u00b62 The parties entered into an LLC operating agreement in 2005,\nlaunching Staubach Retail Services-West, LLC (\"SRS-West\").1 SRS-West is a\nDelaware limited liability company that operated as a commercial real estate\nbrokerage in Phoenix. Under the LLC agreement, Plaintiffs owned 25 percent of\nSRS-West and Defendants owned 75 percent. The LLC agreement provided that\nSRS-West would have \"the exclusive right to operate in the Region as a subsidiary\nof [Staubach Retail Services, Inc.]\" The agreement defined \"Region\" as \"the states\nof Arizona, Nevada, New Mexico, and Utah.\"\n\n\u00b63 The LLC agreement designated one representative from each party\nas managers of SRS-West. The agreement gave these managers \"complete\nauthority to make any and all amendments to [the LLC agreement] as they may\ndeem appropriate.\" In accordance with this provision, the parties twice amended\n\n\n1 Before SRS-West was organized, another limited liability company with the\nsame name already existed and operated out of an office in Newport Beach,\nCalifornia. That entity's region was initially defined as \"the Western region of the\nUnited States.\" One week before the formation of the new SRS-West, however, the\nentity changed its name to Staubach Retail Services-Southern California, LLC\n(\"SRS-SoCal\"), and redefined its region as \"Southern California.\"\n\n\n\n 2\n\f VR et al. v. STAUBACH et al.\n Decision of the Court\n\nthe LLC agreement in writing. The first amendment expanded SRS-West's region\nto encompass Wyoming and Montana. The second amendment changed the\nownership structure of the company, increasing Plaintiffs' ownership interest to\n45 percent and decreasing Defendants' interest to 55 percent.\n\n\u00b64 In connection with the second amendment, the parties executed an\nassignment of interest that included the following clause:\n\n This Assignment contains the entire understanding between the\n parties hereto with respect to the subject matter hereof and\n supersedes any prior understandings, agreements or\n representations, written or oral, relating to the subject matter hereof\n ....\n\n\u00b65 Around this time, Staubach Retail Services, Inc., announced a plan\nto \"roll up\" its various branches, including SRS-West, into a single national entity.\nPlaintiffs decided not to participate, prompting the parties to negotiate a\nseparation of SRS-West.\n\n\u00b66 After months of negotiation, the parties executed a reorganization\nagreement that gave Plaintiffs complete ownership of SRS-West and left\nDefendants free to compete as a separate commercial real estate brokerage. In\nconnection with the reorganization, Plaintiffs changed the name of SRS-West to\nVelocity Retail Group, LLC.\n\n\u00b67 Under the reorganization agreement, the parties agreed that certain\n\"house revenues\" of the old SRS-West would continue to be split 45 percent to\nPlaintiffs and 55 percent to Defendants for approximately two years. House\nrevenues referred to money left over from a sale after paying salesperson and\nbroker commissions.\n\n\u00b68 The reorganization agreement stated that the LLC agreement\n\"represents the full and complete agreement between the managers, members, and\nofficers of [SRS-West] and no other instrument, document, or other agreement\nrelates to or would otherwise affect the agreements of the mangers and members\nof [SRS-West].\" It also provided that the reorganization agreement \"supersedes all\nprior agreements, whether written or oral, between the Parties with respect to its\nsubject matter . . . and constitutes . . . a complete and exclusive statement of the\nterms of the agreement between the Parties with respect to its subject matter.\"\n\n\u00b69 Soon after the parties entered into the reorganization agreement, a\ndisagreement arose as to its meaning. Plaintiffs believed the reorganization\nagreement required sharing of house revenues on new deals for only a handful of\n\n\n\n 3\n\f VR et al. v. STAUBACH et al.\n Decision of the Court\n\nshared clients. Defendants, on the other hand, believed it required sharing of\nhouse revenues on all new deals on all accounts.\n\n\u00b610 The parties resolved this issue in favor of Defendants by entering\ninto a partial settlement agreement. In it, the parties acknowledged that revenues\ngenerated on all new deals from the date of the reorganization agreement until\nJune 30, 2011, would be shared, except for those generated by new hires, i.e.,\nsalespeople hired after the date of the reorganization agreement.\n\n\u00b611 In August 2009, Plaintiffs filed a complaint in superior court,\nrequesting, among other things, that the court declare the parties were free to set\ntheir own house splits and that it award them a share of house revenues generated\nby the Newport Beach office, either based on the parties' agreements or on the\ntheory of promissory estoppel. Defendants counterclaimed, arguing, as relevant\nhere, that Plaintiffs had breached the implied covenant of good faith and fair\ndealing by improperly and unilaterally changing how they calculated their house\nrevenues.\n\n\u00b612 A major issue at the ensuing bench trial was whether the parties\norally amended the LLC agreement to add the Newport Beach office into SRS-\nWest's \"Region.\" After evaluating the evidence, the court found that the only\nrelevant agreement as to Region was the LLC agreement; that the LLC agreement\npermitted oral amendments; and that the parties orally amended the LLC\nagreement to add Newport Beach to SRS-West's region. Therefore, the court\nconcluded that Plaintiffs were entitled to an interest in house revenues from the\nNewport Beach office under the parties' agreements.\n\n\u00b613 The court also concluded Defendants were \"promissorily estopped\"\nfrom denying Plaintiffs owned a 45 percent interest in Newport Beach office\nrevenues. It found that Defendants had misrepresented to Plaintiffs that they\n\"would conform the ownership documents to the oral agreement and course of\nconduct the parties had been following\" related to Newport Beach, and that\nPlaintiffs detrimentally relied on those misrepresentations.\n\n\u00b614 Finally, the court concluded Plaintiffs did not breach the implied\ncovenant of good faith and fair dealing. In doing so, the court relied heavily on its\nfindings that the parties were free to set their own house revenue formulas and\nthat they both understood this when they entered into the partial settlement\nagreement.\n\n\u00b615 Defendants timely filed a notice of appeal and Plaintiffs cross-\nappealed.\n\n\n\n\n 4\n\f VR et al. v. STAUBACH et al.\n Decision of the Court\n\n DISCUSSION\n\nI. The Judgment\n\n\u00b616 In its liability ruling, the court found Plaintiffs owned a 45 percent\ninterest in house revenues generated from the Newport Beach office, and\ninstructed the parties to \"submit new findings and conclusions relating to the\nappropriate measure of damages and remedies.\" In its subsequent damages\nruling, the court found that \"[a]ny house revenues collected on New Deals for . . .\nNewport Beach shall be shared by the parties 45% to [Plaintiffs] and 55% to\n[Defendants].\" It also found that \"[o]n Newport Beach Existing and New Deals\nthat closed after May 11, 2009, 45% of house revenues collected should be paid\nfrom the closing to [Plaintiffs] under the Reorganization Agreement.\"\n\n\u00b617 Defendants argue that the court lacked power to award revenues\ngenerated by the Newport Beach office because those revenues belong to SRS-\nSoCal, \"a legally separate entity, which was not a party to the agreements at issue\nor to the action.\" Defendants contend that a judgment cannot bind one who is not\na party to the action.\n\n\u00b618 We agree with Defendants that a judgment cannot bind one who is\nnot a party to the action, see, e.g., Zenith Radio Corp. v. Hazeltine Research, 395 U.S.\n100 (1969); Parada v. Parada, 196 Ariz. 428, 999 P.2d 184 (2000), but that is not what\nhappened here. The judgment did not \"bind\" SRS-SoCal, nor did it require SRS-\nSoCal to hand over its own revenues to Plaintiffs. Instead, the parties stipulated\nthat SRS Real Estate Partners, LLC, one of the named defendants and appellants,\n\"would be the entity responsible for funding any judgment entered in this matter\nagainst [Defendants] and in favor of [Plaintiffs].\"2 Because a party, not SRS-SoCal,\nis bound by the judgment, we conclude that Defendants' argument is unavailing.\n\n\u00b619 Defendants next argue the court erred in awarding these revenues\nbecause a judgment cannot require Defendants to pay money belonging to SRS-\nSoCal, which Defendants do not own or have. Although the language found in\nthe liability and damages rulings could casually be read to mean that Defendants\n\n2 Although Zenith Radio Corp. held that a stipulation was not \"an adequate\nsubstitute for the normal methods of obtaining jurisdiction over a person or\ncorporation,\" 395 U.S. at 110, that case is readily distinguishable from the case\nbefore us. There a non-party stipulated to be \"bound by and liable for\" a judgment,\nand the court found several defects with the stipulation. See id. Here, on the other\nhand, a named party stipulated to be responsible for the judgment, and the parties\ndo not argue any defect with this stipulation.\n\n\n\n\n 5\n\f VR et al. v. STAUBACH et al.\n Decision of the Court\n\nare required to pay a percentage of actual house revenues generated by the\nNewport Beach office, the stipulation of the parties indicates otherwise. As the\nstipulation provides, SRS Real Estate Partners, LLC, is responsible for funding the\njudgment. Thus, the court's damages ruling merely refers to SRS-SoCal's revenues\nas the measure of damages rather than the source.\n\n\u00b620 Finally, Defendants argue that if this court upholds the damages\naward, then at the very least it should require Plaintiffs to share in \"the normal\nburdens of being an owner (operating expenses and other obligations of that\nentity).\" We reject this argument because the court did not find Plaintiffs had an\nownership interest in the Newport Beach office; it only concluded that Plaintiffs\nwere entitled to share in house revenues. Absent an ownership interest, Plaintiffs\nhave no ownership responsibilities.\n\nII. Parol Evidence\n\n\u00b621 Defendants argue that the superior court erred by considering an\noral amendment to the LLC agreement, which purportedly modified the\nreorganization agreement. Delaware law governs this issue and our standard of\nreview is de novo. See Town of Marana v. Pima County, 230 Ariz. 142, 147, \u00b6 21, 281\nP.3d 1010, 1015 (App. 2012) (interpretation of contract, including application of\nparol evidence rule, reviewed de novo).\n\n\u00b622 In Delaware, the parol evidence rule prohibits a court from\nconsidering evidence of a prior oral agreement to supplement or contradict the\nterms of a fully integrated writing. See Scott v. Land Lords, Inc., 1992 WL 276429, at\n*3 (Del. Sept. 22, 1992).3 This is because a fully integrated writing represents the\ncomplete and final expression of the parties and, as such, finally determines the\nsubject. See Taylor v. Jones, 2002 WL 31926612, at *3 (Del. Ch. Dec. 17, 2002);\nCunningham v. Esso Standard Oil Co., 118 A.2d 611, 613 (Del. 1955). If an oral\nagreement does not modify the writing, however, the parol evidence rule does not\noperate to bar evidence of it. See Restatement (Second) of Contracts \u00a7 213(2) (2014)\n\n\n\n\n3 Unpublished decisions have precedential value in Delaware. See\nAprahamian v. HBO & Co., 531 A.2d 1204, 1207 (Del. Ch. 1987) (unreported\ndecisions are \"entitled to great deference\"); Case Fin., Inc. v. Alden, 2009 WL\n2581873, at *6 n.39 (Del. Ch. Aug. 21, 2009) (\"unpublished opinions have\nprecedential value\"); see also Wisdom Imp. Sales Co. v. Labatt Brewing Co., 339 F.3d\n101, 115 n.14 (2d Cir. 2003) (recognizing Delaware Rules of Court do not restrict\ncitation to unpublished decisions for precedential value).\n\n\n\n 6\n\f VR et al. v. STAUBACH et al.\n Decision of the Court\n\n(\"A binding completely integrated agreement discharges prior agreements to the\nextent that they are within its scope.\") (emphasis added).\n\n\u00b623 Defendants argue the reorganization agreement is fully integrated\nand thus the court could not consider evidence of a prior oral agreement\nexpanding SRS-West's region to encompass Newport Beach. We hold that the\ncourt properly considered this evidence because the oral agreement did not\nmodify the terms of the reorganization agreement. See id.\n\n\u00b624 By its own terms, the reorganization agreement limited its scope to\nits \"subject matter.\" As the court found, Plaintiffs' region or territory \"is not the\nsubject matter of the Reorganization Agreement.\" \"The relevant agreement as to\nthe region owned by [Plaintiffs] is the LLC Agreement.\"\n\n\u00b625 Thus, while the oral agreement undoubtedly modified the LLC\nagreement by redefining \"Region\" to include Newport Beach, it did not modify the\nsubsequent reorganization agreement. Because the extent of Plaintiffs' region was\na topic beyond the scope of the reorganization agreement, and was exclusively\ndetermined by the LLC agreement, the court did not err by considering evidence\nof an oral agreement that redefined Plaintiffs' region.\n\nIII. Promissory Estoppel\n\n\u00b626 Defendants argue the court erred by relying on promissory estoppel\nto enforce their oral promise to convey an interest in Newport Beach revenues to\nPlaintiffs. They contend the doctrine was precluded here by an express agreement\n-- the reorganization agreement -- which already governed how the parties would\ndivide their house revenues. See In re U.S. West, Inc. Secs. Litig., 201 F. Supp. 2d\n302, 308 (D. Del. 2002), aff'd, 65 F. App'x 856 (3d Cir. 2003) (\"[P]romissory estoppel\nis precluded by an express contract governing the relationship out of which the\ncontract emerged . . . .\") (internal quotations omitted). We review questions of\ncontract interpretation de novo. Town of Marana, 230 Ariz. at 147, \u00b6 21, 281 P.3d at\n1015.\n\n\u00b627 For the reasons set forth above, Defendants' argument fails. The\nreorganization agreement did not govern whether Plaintiffs had an interest in\nNewport Beach revenues because that agreement did not discuss the concept of\n\"Region\" at all. To resolve whether Plaintiffs had an interest in Newport Beach\nrevenues, the court examined evidence of an oral agreement expanding SRS-\nWest's Region to encompass Newport Beach, as well as the parties' course of\n\n\n\n\n 7\n\f VR et al. v. STAUBACH et al.\n Decision of the Court\n\ndealing. Consequently, the reorganization agreement did not preclude the\ndoctrine of promissory estoppel here.4\n\nIV. Implied Covenant of Good Faith and Fair Dealing\n\n\u00b628 After the parties entered into the partial settlement agreement,\nPlaintiffs modified the method by which they calculated their house revenues. The\nchange resulted in an overall decrease in the amount of revenues Defendants\npreviously had been receiving under the reorganization agreement. At trial,\nDefendants argued this change amounted to a violation of the implied covenant\nof good faith and fair dealing, but the court disagreed. Defendants now contend\nthe court erred because the change deprived them of revenues they reasonably\nexpected to receive under the agreements.\n\n\u00b629 \"Whether a party has breached the covenant of good faith and fair\ndealing is a question of fact.\" Maleki v. Desert Palms Prof'l Props., L.L.C., 222 Ariz.\n327, 333, \u00b6 28, 214 P.3d 415, 421 (App. 2009). We will not disturb factual findings\nunless they are clearly erroneous. Id.5\n\n\u00b630 \"The covenant of good faith and fair dealing is implied in every\nagreement in Delaware.\" HSMY, Inc. v. Getty Petroleum Mktg., Inc., 417 F. Supp. 2d\n617, 621 (D. Del. 2006). It \"requires a party in a contractual relationship to refrain\nfrom arbitrary or unreasonable conduct which has the effect of preventing the\nother party to the contract from receiving the fruits of the bargain.\" Dunlap v. State\nFarm Fire & Casualty Co., 878 A.2d 434, 442 (Del. 2005) (citation omitted). The\npurpose of the covenant is \"to ensure the parties' reasonable expectations are\nfulfilled.\" Id.\n\n\n\n4 Defendants argue only that the doctrine of promissory estoppel was\nprecluded by the reorganization. They do not challenge the court's factual\nfindings, nor do they challenge the court's application of those factual findings to\nthe legal standard. We therefore limit our review to that challenge.\n\n5 Defendants argue the standard of review is de novo because the superior\ncourt incorrectly applied the law to \"undisputed facts\" in resolving the issue. See\nBrink Elec. Constr. Co. v. Ariz. Dep't of Revenue, 184 Ariz. 354, 358, 909 P.2d 421, 425\n(App. 1995) (\"When the material facts are undisputed, the role of this Court is to\ndetermine whether the trial court correctly applied the substantive law to those\nfacts.\") (citation omitted). To the contrary, the facts here were disputed. For\nexample, the parties offered competing testimony as to what they reasonably\nexpected to receive under the reorganization agreement. We therefore review for\nclear error. See Maleki, 222 Ariz. at 333, \u00b6 28, 214 P.3d at 421.\n\n\n 8\n\f VR et al. v. STAUBACH et al.\n Decision of the Court\n\n\u00b631 In this case, there are sufficient facts to support the court's finding\nthat Plaintiffs did not breach the covenant of good faith and fair dealing. For\nexample, at trial Defendants' chief operating officer and negotiator testified that at\nthe time the parties entered into the partial settlement agreement, he understood\nPlaintiffs' position was that the parties were free to calculate their own house split\nformulas on new deals. He also testified that in his view neither the reorganization\nagreement nor the partial settlement agreement restricted the parties' ability to\nchange their house split formulas. Additionally, the court found that both parties\n\"changed their house revenue formulas without notifying the other on at least one\noccasion.\" These facts, taken together, are more than enough to support the court's\nconclusion that Plaintiffs \"did not violate their duty of good faith and fair dealing\nby modifying their house revenue formula.\" While such modifications might not\nalways be to the benefit of both sides of the transaction, there was adequate\nevidence that the parties both intended and availed themselves of the right to\nchange their formulas.\n\nV. Attorney's Fees at Trial\n\n\u00b632 Plaintiffs cross-appealed the superior court's denial of their request\nfor attorney's fees as the prevailing party at trial. Both parties agree Delaware law\ngoverns this issue. When we evaluate a fee-shifting provision, we generally\nenforce it according to its terms, so long as the provision is permitted by law and\nthe award is reasonable. See Geller v. Lesk, 230 Ariz. 624, 627, \u00b6 10, 285 P.3d 972,\n975 (App. 2012). Under Delaware law, fee shifting is permitted only when\nprovided by the parties in their agreement. See J.J. White, Inc. v. Metro. Merch. Mart,\n107 A.2d 892, 894 (Del. Super. Ct. 1954).\n\n\u00b633 The parties dispute whether the litigation arose under the LLC\nagreement, which provides for fee shifting in certain circumstances, or the\nreorganization agreement, which does not. Even if the litigation arose under the\nLLC agreement, however, the fee-shifting provision in that agreement does not\nauthorize an award of attorney's fees in this case.\n\n\u00b634 Section 8.12(d) of the LLC agreement only authorizes an award of\nattorney's fees in arbitration proceedings. The parties labeled section 8.12(d)\n\"Costs of Arbitration\" and placed it within the \"Arbitration\" section of the\nagreement. The language of section 8.12(d) similarly limits its scope by giving\n\"exclusive authority\" to an arbitrator to award \"costs of arbitration.\" Thus, because\nthere was no arbitration in this case, section 8.12(d) does not authorize an award\nof attorney's fees.\n\n\u00b635 Plaintiffs' efforts to sever a stand-alone \"fee-shifting provision\" from\nthe arbitration provision of section 8.12(d) fall short. Plaintiffs argue that \"[w]hile\n\n\n\n 9\n\f VR et al. v. STAUBACH et al.\n Decision of the Court\n\nthe Parties certainly waived the arbitration procedures, no one waived the fee\nshifting agreement that the costs of the dispute, including the 'costs incurred by any\nparty for their attorneys, advisors and consultants, if any' would be available to the\nprevailing party.\" (Emphasis added). But the clause quoted by Plaintiffs is not a\nstand-alone fee-shifting provision. That clause is an integral part of Section\n8.12(d), indivisible from the arbitrator who was given exclusive authority to\ndetermine and award costs of arbitration, including attorney's fees. Simply reading\nsection 8.12(d) in its entirety is enough to defeat Plaintiffs' argument: \"Costs of\nArbitration. The arbitrator will have exclusive authority to determine and award\ncosts of arbitration, if any, and the costs incurred by any party for their attorneys,\nadvisors and consultants, if any.\"\n\n CONCLUSION\n\n\u00b636 For the foregoing reasons, the superior court properly awarded a\nshare of Newport Beach revenues to Plaintiffs, did not clearly err by finding\nPlaintiffs comported with the implied covenant of good faith and fair dealing, and\ncorrectly denied Plaintiffs' request for attorney's fees. Plaintiffs request an award\nfor attorney's fees incurred on appeal as the prevailing party pursuant to ARCAP\n21(c), and A.R.S. \u00a7 12-341.01(A). We deny this request because Delaware law\ngoverns this appeal and does not authorize such an award. We affirm.\n\n\n\n\n :ama\n\n\n\n\n 10\n\f"} -{"text": "107 F.3d 861\nArthur N. Connorsv.Comm Social Security\nNO. 96-3259\nUnited States Court of Appeals,Third Circuit.\nFeb 06, 1997\n\nAppeal From: W.D.Pa. ,No.94cv01881 ,\nZiegler, J.\n\n\n1\nAffirmed.\n\n"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 98-6365\n\n\n\nUNITED STATES OF AMERICA,\n\n Plaintiff - Appellee,\n\n versus\n\n\nR. B. BOYD,\n\n Defendant - Appellant.\n\n\n\nAppeal from the United States District Court for the Western\nDistrict of North Carolina, at Charlotte. Robert D. Potter, Senior\nDistrict Judge. (CR-92-30-P, CA-97-264-3-P)\n\n\nSubmitted: November 5, 1998 Decided: November 19, 1998\n\n\nBefore ERVIN, LUTTIG, and MOTZ, Circuit Judges.\n\n\nDismissed by unpublished per curiam opinion.\n\n\nR. B. Boyd, Appellant Pro Se. Kenneth Davis Bell, OFFICE OF THE\nUNITED STATES ATTORNEY, Charlotte, North Carolina, for Appellee.\n\n\nUnpublished opinions are not binding precedent in this circuit.\nSee Local Rule 36(c).\n\fPER CURIAM:\n\n R. B. Boyd seeks to appeal the district court\u2019s order denying\n\nhis motion filed under 28 U.S.C.A. \u00a7 2255 (West 1994 & Supp. 1998).\n\nWe have reviewed the record and the district court\u2019s opinion and\n\nfind no reversible error. Accordingly, we deny a certificate of ap-\n\npealability and dismiss the appeal on the reasoning of the district\n\ncourt. See United States v. Boyd, Nos. CR-92-30-P; CA-97-264-3-P\n\n(W.D.N.C. Sept. 5, 1997). We dispense with oral argument because\n\nthe facts and legal contentions are adequately presented in the ma-\n\nterials before the court and argument would not aid the decisional\n\nprocess.\n\n\n\n\n DISMISSED\n\n\n\n\n 2\n\f"} -{"text": "\n158 Ariz. 380 (1988)\n762 P.2d 1334\nIsabel HARRIS, widow, Plaintiff-Appellant-Cross Appellee, and Jack Colaric, Non-Party Appellant,\nv.\nRESERVE LIFE INSURANCE COMPANY, a Texas corporation, Defendant-Appellee-Cross Appellant.\nNo. 1 CA-CIV 9364.\nCourt of Appeals of Arizona, Division 1, Department D.\nMay 17, 1988.\nReview Denied November 8, 1988.\n*381 Ely, Bettini & Ulman by Herbert L. Ely and Eileen S. Willett, Phoenix, for plaintiff-appellant-cross appellee.\nGene G. Gulinson, Phoenix, for defendant-appellee-cross appellant.\nOPINION\nFROEB, Judge.\nPlaintiff-Appellant-Cross Appellee Isabel Harris and her attorney, Jack Colaric (hereinafter \"Harris\" and \"Colaric\"), appeal from a judgment awarding Defendant-Appellee-Cross Appellant Reserve Life Insurance Company (hereinafter \"Reserve\") attorney's fees of $17,840 ($4,460 against Harris and $13,380 against Colaric) pursuant to A.R.S. \u00a7 12-349(A) and (B) and costs of $1,470.39. Reserve cross appeals from the trial court's refusal to grant it attorney's fees against Harris under rule 41(a)(2), Arizona Rules of Civil Procedure, and A.R.S. \u00a7 12-341.01(A) and (B). Although Colaric was not a named party in the trial court proceedings, he appears in this appeal as a nonparty appellant in order to challenge the judgment for attorney's fees entered against him.\nFACTS AND PROCEDURAL HISTORY\nOn January 3, 1985, Harris instituted a breach of contract action against Reserve as the beneficiary of her deceased husband's life insurance policy to secure payment of a $25,000 death benefit. The complaint was served upon Reserve on August 28, 1985, and discovery ensued. On October 23, 1985, Reserve filed an answer denying liability on the policy. Further, Reserve affirmatively pled that no valid contract of insurance had ever been in force because the deceased had made material misrepresentations regarding prior medical treatment on his application for insurance.\n*382 On November 20, 1985, Colaric interviewed Dr. Carolyn Gerster, and learned, contrary to the representations made by the deceased on his insurance application, that Dr. Gerster had diagnosed and treated the deceased for a liver condition within a five-year period prior to his death. Dr. Gerster confirmed, in her deposition testimony on January 29, 1986, that she had treated the deceased for various medical problems. Based on this testimony, Reserve filed a motion for summary judgment. On March 19, 1986, the day Harris' response to Reserve's motion for summary judgment was due, Colaric moved, pursuant to rule 41, Arizona Rules of Civil Procedure, to voluntarily dismiss the complaint without prejudice. The trial court granted the voluntary dismissal and awarded Reserve attorney's fees and costs. This appeal followed.\nPROPRIETY OF THE A.R.S. \u00a7 12-349 ATTORNEY'S FEES AWARD\nThe version of A.R.S. \u00a7 12-349 in effect at the time Harris commenced this action provided in pertinent part as follows:\nA. Except as otherwise provided by and not inconsistent with another statute, in any civil action commenced or appealed in a court of record in this state, the court shall assess reasonable attorney fees against an attorney or party, ... if the attorney or party does any of the following:\n(1) Brings or defends a claim without substantial justification.\n....\nB. The court may allocate the payment of attorney fees among the offending attorneys and parties, jointly or severally, and may assess separate amounts against an offending attorney or party.\nC. Attorney fees shall not be assessed if after filing an action a voluntary dismissal is filed for any claim or defense within a reasonable time after the attorney or party filing the dismissal knew or reasonably should have known that the claim or defense was without substantial justification.\n....\nF. In this section, `without substantial justification' means that the claim or defense constitutes harassment, is groundless and not made in good faith.\nA.R.S. \u00a7 12-350 requires the court to set forth the specific reasons for any attorney fee award pursuant to A.R.S. \u00a7 12-349, and enumerates the following eight factors the court may consider, if relevant, in entering a \u00a7 12-349 award:\n1. The extent of any effort made to determine the validity of a claim before the claim was asserted.\n2. The extent of any effort made after the commencement of an action to reduce the number of claims or defenses being asserted or to dismiss claims or defenses found not to be valid.\n3. The availability of facts to assist a party in determining the validity of a claim or defense.\n4. The relative financial positions of the parties involved.\n5. Whether the action was prosecuted or defended, in whole or in part, in bad faith.\n6. Whether issues of fact determinative of the validity of a party's claim or defense were reasonably in conflict.\n7. The extent to which the party prevailed with respect to the amount and number of claims in controversy.\n8. The amount and conditions of any offer of judgment or settlement as related to the amount and condition of the ultimate relief granted by the court.\nHarris and Colaric argue that the attorney's fees award pursuant to A.R.S. \u00a7 12-349 was in error because Harris' claim was not initially brought without substantial justification; and, upon later learning that it lacked substantial justification, Harris filed a voluntary dismissal within a reasonable time.\nIn awarding attorney's fees to Reserve, the trial judge expressly found that Harris' claim was brought without substantial justification. No other findings were made. In reviewing the trial court's judgment, we must view the evidence in a manner most favorable to sustaining it and if, in so doing, *383 it is necessary to resolve conflicts in the evidence, we must accept as fact that evidence which supports the judgment. Davis v. Tucson Arizona Boys Choir Society, 137 Ariz. 228, 669 P.2d 1005 (App. 1983). Therefore, in the present case, we must resolve all conflicts in favor of Reserve and affirm the trial court's award of attorney's fees pursuant to A.R.S. \u00a7 12-349 if there is any evidence to support the judgment. We note in passing that this case does not involve a consideration of rule 11, Arizona Rules of Civil Procedure, since it was not urged before this court or the trial court. Rule 11, of course, deals with some of the same issues as A.R.S. \u00a7 12-349.\nIn conclusion we hold that the trial court had sufficient evidence upon which to determine that plaintiff's claim was brought without substantial justification. When Colaric filed suit, he had in his possession Ralph Harris' medical records from Dr. Gerster showing probable fatty metamorphosis of the liver in 1974 and in 1976. Therefore, he knew or should have known at the time he filed suit that the application for insurance falsely stated that the only consultation or examination by any physician within the previous five years was a general physical conducted by Dr. Gerster in February of 1977. He also knew that the death certificate showed that Ralph Harris had an \"alcoholic liver.\" Thus, the trial court did not abuse its discretion in finding that Colaric filed suit when he knew, or should have known, that the claim was unjustified. Colaric's argument that he had a reasonable basis for filing suit because he believed Reserve had to prove an actual intent on the decedent's part to deceive the company in order for the company to avoid its obligations under the policy is contrary to law and consequently unjustified. See American Nat'l Ins. Co. v. Caldwell, 70 Ariz. 78, 79, 216 P.2d 413, 414 (1950).\nWhile the chronology of events was not disputed in the trial court, the inferences to be drawn from those events were disputed. It is for the trial court, not this court, to resolve those conflicts. A decision is\ndiscretionary because it is based on an assessment of conflicting procedural, factual or equitable considerations which vary from case to case and which can be better determined or resolved by the trial judge, who has a more immediate grasp of all the facts of the case, an opportunity to see the parties, lawyers and witnesses, and who can better assess the impact of what occurs before him. Where a decision is made on that basis, it is truly discretionary and we will not substitute our judgment for that of the trial judge; we will not second guess. Where, however, the facts or inferences from them are not in dispute and where there are few or no conflicting procedural, factual or equitable considerations, the resolution of the question is one of law or logic. Then it is our final responsibility to determine law and policy and it becomes our duty to `look over the shoulder' of the trial judge and, if appropriate, substitute our judgment for his or hers.\nState v. Chapple, 135 Ariz. 281, 297, n. 18, 660 P.2d 1208, 1224, n. 18 (1983) (citations omitted). If the trial court has rendered the correct decision for any reason apparent in the record, we will affirm. City of Phoenix v. Geyler, 144 Ariz. 323, 697 P.2d 1073 (1985).\nThe trial court considered the factors set forth in A.R.S. \u00a7 12-350 and determined that an award of attorney's fees was proper pursuant to A.R.S. \u00a7 12-349. The court determined that the true facts were always available to Colaric, enabling him to determine the validity of the claim, and that Harris herself was aware of her husband's condition. The relative financial position of the parties involved was considered as well, as is evidenced by the trial court's allocation of the bulk of the attorney's fees against Colaric rather than Harris. Further, Colaric's disregard of the misrepresentations made by the deceased on his application for insurance supports an inference of bad faith. Additionally, even if the medical records in Colaric's possession at the time he filed suit did not reveal that Dr. Gerster had actually informed Ralph Harris of his liver condition, Dr. Gerster testified that Harris herself was aware of this *384 fact. Thus the trial court's resolution of this conflicting factual issue in Reserve's favor is well supported. Finally, although the dismissal was without prejudice, Harris obtained none of the relief she sought in her complaint. We conclude that the trial court properly considered the factors set forth in A.R.S. \u00a7 12-350 in determining that Harris' claim was brought without substantial justification and that the facts amply support this conclusion.\nThe inquiry does not end here, however, for even if a claim is brought without substantial justification, attorney's fees will not be assessed pursuant to A.R.S. \u00a7 12-349 if the party voluntarily dismisses his claim within a reasonable time after learning the claim is unjustified. A.R.S. \u00a7 12-349(C). Because the determination of what is reasonable varies with the circumstances, we believe this determination falls within the exercise of the trial court's sound discretion. We find no abuse of discretion in the determination that a four-month delay in filing the motion to dismiss was unreasonable, particularly in light of the fact that Colaric did not file the motion until time to respond to Reserve's motion for summary judgment was about to expire and then vacillated in his decision to dismiss even after his motion had been filed. Colaric offered no explanation as to why it took Harris from February 24, 1986, the date he received a copy of Dr. Gerster's deposition, until March 18, 1986, to read the deposition and agree to dismiss her complaint. Such conduct could reasonably be construed to be a lack of diligence, and, in fact, unreasonable under the circumstances, particularly since no new facts were developed between Colaric's conversation with Dr. Gerster in November of 1985 and the final decision to dismiss in late March of 1986.\nHarris and Colaric further argue that even if the award of attorney's fees under \u00a7 12-349 was proper, the amount awarded was exorbitant and unreasonable and, therefore, should be reduced. They argue particularly about the additional $8,620 in fees incurred after Colaric allegedly informed Reserve on January 29, 1986, that he intended to recommend the case be dismissed. These fees were apparently incurred in preparation of the motion for summary judgment.\nThe determination of whether the amount of attorney's fees awarded is reasonable is a matter peculiarly within the discretion of the trial court, Woliansky v. Miller, 146 Ariz. 170, 704 P.2d 811 (App. 1985), and will not be disturbed absent a showing of abuse of that discretion. A trial court abuses its discretion when no reasonable basis exists in the record from which the trial judge could award attorney's fees. Associated Indemnity Corporation v. Warner, 143 Ariz. 567, 694 P.2d 1181 (1985). Even fees in excess of the amount in dispute are not per se unreasonable. Wagner v. Casteel, 136 Ariz. 18, 663 P.2d 1020 (App. 1983).\nReserve submitted an itemized bill detailing the activity of its counsel in defending Reserve. Harris and Colaric offer no evidence of abuse of discretion other than the amount of the award. Such does not support the finding that the trial court abused its discretion. The itemized statement provided by Reserve provides a reasonable basis on which the trial court could award attorney's fees in the amount that it did.\nThis court will not consider issues and theories not presented in the trial court. Richter v. Dairy Queen of Southern Arizona, Inc., 131 Ariz. 595, 643 P.2d 508 (App. 1982). Thus, we do not consider whether A.R.S. \u00a7 12-349 should be applied when an alternate statute, A.R.S. \u00a7 12-341.01, also provides for attorney's fees in this situation.\nPROPRIETY OF AWARD OF COSTS\nThe judgment awarded Reserve costs in the amount of $1,479.39. The judgment is silent as to the basis of this award. Harris argues that the award of costs is improper under A.R.S. \u00a7 12-341 because Reserve was not the successful party. Reserve argues that costs are appropriate in the context of a dismissal, and also under the court's power to impose terms and conditions *385 upon a voluntary dismissal under rule 41.\nWe have held that when a plaintiff's complaint is dismissed because of plaintiff's failure to prosecute, the defendant may be considered the successful party for purposes of recovering costs pursuant to A.R.S. \u00a7 12-341. The fact that the action is dismissed without prejudice and that plaintiff can refile is not relevant. Mark Lighting Fixture Company, Inc. v. General Electric Supply Company, 155 Ariz. 65, 745 P.2d 123, vacated on other grounds, 155 Ariz. 27, 745 P.2d 85 (1987). We find the record supports the award of costs to Reserve.\nRESERVE'S CROSS APPEAL\nBecause we have found the trial court's imposition of costs and attorney's fees proper under A.R.S. \u00a7 12-341 and \u00a7 12-349, it is unnecessary to consider Reserve's argument that it was also entitled to an award of fees under A.R.S. \u00a7 12-341.01 and rule 41(a)(2).\nATTORNEY'S FEES AND COSTS ON APPEAL\nBoth parties have requested attorney's fees and costs on appeal. We deny Harris' and Colaric's request and grant Reserve's request pursuant to A.R.S. \u00a7 12-341.01 and \u00a7 12-342 in an amount to be determined pursuant to rule 21(c), Arizona Rules of Civil Appellate Procedure.\nGRANT and CONTRERAS, JJ., concur.\n"} -{"text": " NOT PRECEDENTIAL\n UNITED STATES COURT OF APPEALS\n FOR THE THIRD CIRCUIT\n _____________\n\n No. 19-1043\n _____________\n\n GIANFRANCO ARENA,\n Appellant\n\n v.\n\n RIVERSOURCE LIFE INSURANCE CO.\n _______________\n\n On Appeal from the United States District Court\n for the District of New Jersey\n (D.C. No. 2-16-cv-05063)\n District Judge: Hon. Jose L. Linares\n _______________\n\n Submitted Under Third Circuit LAR 34.1(a)\n September 10, 2019\n\n Before: CHAGARES, JORDAN, and RESTREPO, Circuit Judges.\n\n (Filed: September 18, 2019)\n _______________\n\n OPINION \u2217\n _______________\n\n\n\n\n \u2217\n This disposition is not an opinion of the full court and, pursuant to I.O.P. 5.7,\ndoes not constitute binding precedent.\n\fJORDAN, Circuit Judge.\n\n Gianfranco Arena (\u201cArena\u201d) brought an action for breach of contract against\n\nRiverSource Life Insurance Co. (\u201cRiverSource\u201d) after it denied his claim for the benefits\n\nfrom the life insurance policies on his wife, Christine Arena (\u201cChristine\u201d). The United\n\nStates District Court for the District of New Jersey concluded RiverSource was entitled to\n\ndeny Arena\u2019s claim because his wife\u2019s death was subject to the suicide exclusion clauses\n\nin her insurance policies. We will affirm.\n\nI. BACKGROUND\n\n In 2014, Christine purchased two life insurance policies issued by RiverSource;\n\none was a term policy and the other a \u201cFlexible Premium Adjustable\u201d policy. (App. at\n\n176-77.) Both policies contain \u201c[s]uicide [e]xclusion\u201d clauses which limit RiverSource\u2019s\n\nliability for a death by suicide. (App. at 177.) The term policy provides that: \u201cIf the\n\ninsured, whether sane or insane, dies by suicide within 2 years from the Policy Date, Our\n\nliability is limited to an amount equal to the total premiums paid.\u201d (App. at 177\n\n(emphasis removed).) The Flexible Premiums Adjustable policy says that: \u201cSuicide by\n\nthe Insured, whether sane or insane, within two years from the Policy Date is not covered\n\nby this policy. In this event the only amount payable by Us to the beneficiary will be the\n\npremiums which You have paid, minus any Indebtedness and partial surrenders.\u201d (App.\n\nat 177 (emphasis removed).)\n\n By all accounts, Christine had a fulfilling and successful life. She thrived\n\nprofessionally, working as an in-house attorney for Time Warner. She had a caring\n\nhusband and four healthy children. She was active in the Roman Catholic church and in\n\n 2\n\fher community, including service as the president of a charitable foundation. But, by\n\n2015, the Arenas faced some financial stress. The IRS determined they owed $60,000 in\n\nback taxes, and, the sale of their existing home fell through, after they had already\n\npurchased a new one.\n\n Four days after that sale fell through, in the early morning of April 1, Arena found\n\nhis wife sitting at the kitchen table, talking on the phone to their parish priest. Arena\n\ndiscovered she had already gone to the parish\u2019s rectory earlier that morning to speak to\n\nthe priest in person. Christine was troubled, and the Arenas decided to promptly schedule\n\nan appointment for her to see a psychiatrist, Dr. Lester Noah Shaw.\n\n At that appointment, Dr. Shaw found that Christine did not fit the criteria for\n\nclinical depression because she only had experienced symptoms of anxiety and\n\ndepression for four to five days. Dr. Shaw also determined that Christine had a low risk\n\nof suicide, as \u201cthere were a lot of protective factors and almost no risk factors.\u201d (App. at\n\n432.) Nonetheless, he prescribed for her Clonazepam and Sertraline, the generic versions\n\nof Klonopin and Zoloft. 1 Christine began taking the medications immediately, but her\n\ncondition continued to deteriorate. On April 4, Dr. Shaw increased her dose of\n\nClonazepam, and two days after seeing her again, he again increased her dose. Following\n\n\n\n 1\n Those medications have the potential for serious side effects, including\ndepression and suicidal thoughts and behaviors. The FDA warns that patients taking\nKlonopin should be monitored for \u201cthe emergence of new or worsening depression,\nsuicidal thoughts or behavior, and/or any unusual changes in behavior.\u201d (App. at 433.)\nThere are also concerns that Zoloft may lead to symptoms including anxiety and\nimpulsivity, and \u201cthat such symptoms may represent precursors to emerging suicidality.\u201d\n(App. at 433 (citation omitted).)\n 3\n\ftwo more appointments, Dr. Shaw increased Christine\u2019s dose of both medications. On\n\nApril 13, Christine returned to Dr. Shaw and he added a prescription for Trazodone,\n\nanother antidepressant.\n\n On April 21, tragedy struck. The day started off normally. Christine worked from\n\nhome. At 2:00 p.m., she emailed the other board members of the charitable foundation\n\nshe led. At 2:06 p.m., she called her office and spoke to her boss. At approximately 2:30\n\np.m., Christine\u2019s mother went to pick up the children from school. During the time\n\nChristine\u2019s mother was out, Arena and Christine had two brief telephone conversations,\n\nat 2:48 p.m. and 2:52 p.m., and Christine called him again at 3:07 p.m. At some point\n\nbefore her mother returned home, Christine took two of her husband\u2019s leather belts,\n\nmoved a chair from another bedroom into a bathroom, fastened the belts together and\n\narranged them so that, having wrapped one around her neck, she was able to step off the\n\nchair and hang herself.\n\n When her children arrived home from school, Christine\u2019s eleven-year-old daughter\n\ndiscovered her mother, who was still alive. Christine\u2019s mother called 911 at 3:11 p.m.,\n\nand Christine was rushed to the hospital. Christine passed away nine days later. The\n\npolice report listed the incident as a \u201csuicide attempt[,]\u201d and the medical examiner listed\n\nChristine\u2019s manner of death as a \u201csuicide[,]\u201d though neither made an inquiry into\n\nChristine\u2019s state of mind. (App. at 440.)\n\n Arena filed a claim for life insurance benefits with RiverSource. The insurance\n\ncompany denied coverage, citing Christine\u2019s death certificate and the suicide exclusion\n\nclauses in her policies. Arena asked RiverSource to reconsider its decision, on the basis\n\n 4\n\fthat Christine\u2019s death was a result of the medications she had been prescribed, but\n\nRiverSource reaffirmed its decision to deny coverage. He then filed a breach of contract\n\naction in the Superior Court of New Jersey, which RiverSource removed to the District\n\nCourt.\n\n RiverSource eventually moved for summary judgment. That motion was granted,\n\ndespite a report by a forensic expert, Dr. Glenmullen, who opined that Christine could\n\nhave suffered a medication-induced disorder that altered her state of consciousness to the\n\npoint that she was unable to understand the consequences of her actions or form suicidal\n\nintent. The District Court reasoned that \u201cthe Suicide Exclusions would apply to this case\n\neven if Mrs. Arena would not have committed suicide but for the effect that the\n\nmedications had on her state of mind.\u201d (App. at 9.) It acknowledged that our precedent,\n\nJohnson v. Metropolitan Life Insurance Co., 404 F.2d 1202 (3d Cir. 1968), established\n\nthat killing oneself does not always qualify as suicide and that intent is required. But, the\n\nCourt concluded that the inquiry is into whether the decedent lacked \u201cawareness that his\n\nor her actions would result in death\u201d and that Christine had such awareness. (App. at 10-\n\n11.) It determined that Arena \u201cha[d] not offered any contentions or allegations \u2018which\n\ncould support a reasonable conclusion that the decedent was unaware of the fatal\n\nconsequences of [her] acts[]\u2019\u201d and that Dr. Glenmullen\u2019s opinion was insufficient to\n\ncreate a genuine dispute of fact. (App. at 11 (second alteration in original).) The Court\n\nfurther reasoned that, even if such evidence existed, the fact that Christine was \u201csuffering\n\nfrom an irresistible impulse to commit self-harm \u2018would affirmatively establish that self\n\n\n\n 5\n\fdestruction was the very result intended, albeit by a deranged mind.\u2019\u201d (App. at 11\n\n(quoting Johnson, 404 F.2d at 1204).)\n\n Arena timely appealed.\n\nII. DISCUSSION 2\n\n On appeal, Arena argues the District Court erred in two ways. 3 First, he says that\n\na suicide exclusion clause requires the deceased to intend to take her life and that\n\nChristine did not have that intent, and, second, that the Court improperly shifted the\n\nburden from RiverSource to prove Christine had such intent to Arena to prove that she\n\ndid not.\n\n The parties\u2019 dispute thus centers primarily on what intent on a decedent\u2019s part is\n\nrequired for a death to be a suicide under Johnson and New Jersey law. Arena contends\n\nthat \u201csuicide requires intent to end one\u2019s life[]\u201d and that intentional actions and even\n\n\u201c\u2018awareness\u2019 that one\u2019s actions will result in death[]\u201d are insufficient. (Opening Br. at 2.)\n\nRiverSource disagrees and contends that awareness that one\u2019s acts will result in death is\n\nenough.\n\n It is true, as Arena argues, that it is longstanding precedent that a suicide clause,\n\nexcluding coverage for sane or insane actions, will only apply if the decedent intended to\n\n\n 2\n The District Court had jurisdiction under 28 U.S.C. \u00a7\u00a7 1332 and 1441. We have\njurisdiction pursuant to 28 U.S.C. \u00a7 1291. We review de novo the grant of summary\njudgment. Dwyer v. Cappell, 762 F.3d 275, 279 (3d Cir. 2014).\n 3\n Because we agree with Arena and conclude that intent is a required element for\nsuicide under New Jersey law, we do not address Arena\u2019s argument that if a lower\nstandard of awareness fulfills that requirement, a genuine material dispute of fact still\nexists.\n 6\n\fcause her death. See Bigelow v. Berkshire Life Ins. Co., 93 U.S. 284, 287 (1876)\n\n(concluding that such a clause will apply \u201cif the insured was conscious of the physical\n\nnature of his act, and intended by it to cause his death, although, at the time, he was\n\nincapable of judging between right and wrong, and of understanding the moral\n\nconsequences of what he was doing\u201d). Our decision in Johnson comports with that\n\nunderstanding and held that New Jersey law requires, at least under an interpretation most\n\nfavorable to the insured, that the \u201cself destruction purposefully [be] accomplished in\n\naccordance with an intention or design[.]\u201d Johnson, 404 F.2d at 1204 (emphasis added).\n\nIn Johnson, we also specifically referred to two situations in which the deceased would\n\nnot have the required intent to commit suicide. The first is a circumstance in which a\n\npurposeful act is undertaken but the result is not intended. See id. (\u201c[A] deranged person\n\ncan believe that he is immortal, or that fuel oil is water, or, on some other irrational basis,\n\nthat saturating his clothes with fuel oil and applying a lighted match will not kill him.\u201d).\n\nThe second is when a person\u2019s \u201cmental disorder [is] \u2026 so extreme that he has no\n\ncomprehension whatever of what he is doing.\u201d Id. Subsequent New Jersey decisions\n\nhave since confirmed that suicide requires an intent to achieve the result of death. See,\n\ne.g., Biro v. Prudential Ins. Co. of Am., 265 A.2d 830, 838 (N.J. Super. Ct. App. Div.\n\n1970) (Matthews J., dissenting) (\u201cSuicide includes both the notion of the instrumentality\n\nof death being the decedent \u2026 and the notion that the decedent intended to take his own\n\nlife.\u201d), adopted by Biro v. Prudential Ins. Co. of Am., 271 A.2d 1 (N.J. 1970) (per\n\ncuriam). We therefore conclude that New Jersey law requires, as an element of suicide,\n\nthat the decedent had an intent to end her life.\n\n 7\n\f But such intent can be inferred from a decedent taking actions that will result in\n\ndeath. Cf. Johnson, 404 F.2d at 1204 (noting that nothing in the record suggested that the\n\ndecedent\u2019s \u201cacts, obviously well adapted to self destruction, were not so intended\u201d).\n\nCircumstantial evidence is often the only evidence for suicide and is frequently used to\n\nestablish intent. See, e.g., New York Life Ins. Co. v. Prejean, 149 F.2d 114, 116 (5th Cir.\n\n1945) (concluding that circumstantial evidence is sufficient if it is \u201cconsistent with the \u2026\n\ntheory of suicide\u201d and \u201cfairly and reasonably exclude[s] every other reasonable\n\nexplanation of the facts\u201d); cf. Hudek v. St. Peter Greek Catholic Cemetery Ass\u2019n, 138 A.\n\n654, 655 (N.J. Ch. 1927) (concluding that \u201cindirect or circumstantial evidence\u201d was\n\ninsufficient because it \u201cconsists merely of a repetition of vague rumors made by the\n\nalleged suicide, shortly before his death, or mere conjectures and conclusions of the\n\nwitnesses\u201d), aff\u2019d, 140 A. 920 (N.J. 1928). But \u201csummary judgment [i]s improper \u2026 if\n\nthe record establishe[s] a disputable issue of fact whether the insured \u2026 was attempting\n\nto take his life[.]\u201d Johnson, 404 F.2d at 1204. Arena contends that, under that standard,\n\nRiverSource\u2019s \u201cevidence is insufficient because RiverSource bears the burden of showing\n\nthat Christine died with the intent to end her own life, and merely pointing to facts\n\nconfirming that she died at her own hands does not satisfy its burden.\u201d (Opening Br. at\n\n38.)\n\n We disagree. The parties do not dispute that Christine took two of her husband\u2019s\n\nleather belts, moved a chair from another bedroom into a bathroom, fastened the belts\n\ntogether and wrapped one around her neck, and arranged the belts in a manner to effect a\n\nhanging. Nor do they dispute that she in fact stepped off the chair and hanged herself.\n\n 8\n\fThose actions are sufficient circumstantial evidence to establish not only that Christine\n\nhad \u201cawareness\u201d that those actions would end her life but also that she intended to do so.\n\nWhile such intent may have arisen suddenly on an otherwise relatively normal morning,\n\ntaking those actions is strong circumstantial evidence that at the time she took her own\n\nlife, she intended that result. As RiverSource notes, \u201cthere could have been no other\n\noutcome from Ms. Arena\u2019s action other than death.\u201d (Answering Br. at 30.) RiverSource\n\nwas not required to produce direct evidence in the form of a suicide note or\n\ncontemporaneous expression of her intentions. Cf. Johnson, 404 F.2d at 1204 (relying on\n\na decedent\u2019s actions to establish intent).\n\n Thus, to avoid summary judgment, Arena had to put forward evidence to create a\n\ngenuine dispute regarding Christine\u2019s intent to commit suicide. He contends that\n\nChristine\u2019s mental state falls under the second \u201cno intent\u201d situation in Johnson, that\n\nChristine\u2019s mental disorder was \u201cso extreme that [s]he ha[d] no comprehension whatever\n\nof what [s]he [wa]s doing.\u201d 404 F.2d at 1204. He bases that claim on three sources of\n\nevidence. First is \u201ctestimony from Christine\u2019s family, friends and colleagues, all of\n\nwhom testified that she would never have intended to end her own life had she been\n\nthinking clearly.\u201d (Opening Br. at 3.) Second is testimony from her physicians,\n\nincluding Dr. Nash, who testified that Christine \u201cwas not capable of understanding the\n\nconsequences\u201d of hanging herself. (App. at 512.) Third is Dr. Glenmullen\u2019s forensic\n\ndiagnosis of Christine, which concluded to \u201ca reasonable degree of medical certainty that\n\nChristine suffered from medication-induced suicidality\u2014a disorder that may cause a\n\nperson to commit self-harm without intending or understanding the consequences of his\n\n 9\n\for her actions.\u201d (Opening Br. at 3.) The drugs Christine was prescribed are known to\n\nlead to suicidal thoughts and behaviors, and Dr. Glenmullen \u201ctestified that \u2018[d]rug-\n\ninduced impulsivity can easily include . . . methodical behavior and that\u2019s what \u2026\n\nretrieving the belts was[.]\u2019\u201d (Opening Br. at 39 (alterations in original) (quoting App. at\n\n438).)\n\n We do not discount the importance of those alleged facts for the family, but they\n\nare not legally material. They fall into two categories. There is, first, evidence as to\n\nChristine\u2019s general mental state being inconsistent with suicide, as well as her moral\n\naversion to suicide. That evidence is not enough because it does not undermine the\n\nundisputed facts showing deliberate acts which can only be explained as an effort to kill\n\nherself, even if she was not thinking clearly or was insane, when she acted. Second, there\n\nis the evidence from Dr. Glenmullen that Christine was acting impulsively under the\n\ncontrol of her medication and that, as a result, the medications obfuscated her ability to\n\nform the requisite intent \u2013 in short, that the drugs compelled Christine to take the actions\n\nshe did and so the actions are not probative of her mental state. But acting on an\n\nirresistible impulse is different than having no intent or no comprehension of the actions\n\none is taking. We rejected a similar irresistible impulse argument in Johnson and noted\n\nthat such an impulse \u201cwould affirmatively establish that self destruction was the very\n\nresult intended, albeit by a deranged mind.\u201d Johnson, 404 F.2d at 1204. While in\n\nJohnson the impulse originated from his own mind and not from an outside influence, the\n\nresult is no different because the relevant inquiry is the mental state of the person at the\n\n\n\n 10\n\ftime of the actions, and not what led to that mental state. The presence of medications\n\ndoes not mean such deaths cannot qualify as suicides. 4\n\n Arena\u2019s second argument is also unpersuasive. He contends that \u201c[t]he district\n\ncourt impermissibly placed the burden on [him] to show that the suicide exclusions did\n\nnot apply when New Jersey law requires insurers to establish that all coverage exclusions\n\napply.\u201d (Opening Br. at 2.) True enough, in actions for insurance benefits, the insurance\n\ncompany bears the burden of proving that an exclusion to coverage applies. Aviation\n\nCharters v. Avemco Ins. Co., 763 A.2d 312, 314 (N.J. Super. Ct. App. Div. 2000). But\n\nhere the District Court concluded, as do we, that RiverSource met that burden of proof.\n\nCf. Nat\u2019l State Bank v. Fed. Reserve Bank, 979 F.2d 1579, 1582 (3d Cir. 1992) (\u201cThe\n\nThird Circuit has stated that \u2018where the movant bears the burden of proof at trial and the\n\n\n\n 4\n We do not believe that Kahle v. Plachman, 428 A.2d 913 (N.J. 1981), supports\nthe proposition that the Supreme Court of New Jersey has endorsed the idea that a\ndecedent who was prescribed psychotropic medication was incapable of forming the\nrequired intent for purposes of a suicide exclusion clause. In Kahle, the court held that\nthe actions of the decedent, who took such drugs, were \u201ccommitted under circumstances\nin which the decedent was devoid of normal judgment [and thus could] not [be]\nconsidered to be willfully, purposefully or intentionally self-inflicted[.]\u201d Id. at 916. That\ncase, however, arose in the context of the Worker\u2019s Compensation Act where \u201c[t]he issue\nof the compensability of an employee suicide \u2026 turns not on the employee\u2019s conscious\nvolition or knowledge of the consequences of his act, but rather on the existence of an\nunbroken chain of causation from the work-connected injury to the suicide.\u201d Id. There,\nthe decedent\u2019s mental state stemmed from her injury at work, regardless of her state of\nmind when she took her own life. Id. at 913-14. Moreover, claims of medication for\ndepression obfuscating a decedent\u2019s intent to harm herself have in the past been rejected\nas a basis for not enforcing a suicide exclusion in other Courts of Appeals. Charney v.\nIll. Mut. Life Cas. Co., 764 F.2d 1441, 1442-43 (11th Cir. 1985) (per curiam).\n\n\n 11\n\fmotion does not establish the absence of a genuine factual issue, the district court should\n\ndeny summary judgment even if no opposing evidentiary matter is presented.\u2019\u201d (quoting\n\nResolution Tr. Corp. v. Gill, 960 F.2d 336, 340 (3d Cir. 1992))). After that, it was up to\n\nArena to produce evidentiary materials demonstrating the existence of a genuine issue for\n\ntrial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); In re Bressman, 327 F.3d\n\n229, 238 (3d Cir. 2003). He failed to do so. None of this, of course, lessens the tragedy\n\nthat he and his family have suffered. Nevertheless, the summary judgment ruling was\n\nsound.\n\nIII. CONCLUSION\n\n For the foregoing reasons, we will affirm the judgment of the District Court.\n\n\n\n\n 12\n\f"} -{"text": "536 U.S. 976\nSWOYERv.REED.\nNo. 00-9554.\nSupreme Court of the United States.\nAugust 5, 2002.\n\n1\n534 U. S. 832. Petitions for rehearing denied.\n\n"} -{"text": "\n486 A.2d 143 (1985)\nSTATE of Maine\nv.\nRodney R. CLOUKEY.\nSupreme Judicial Court of Maine.\nArgued November 7, 1984.\nDecided January 8, 1985.\nPatricia Worth, Asst. Dist. Atty. (orally), Rockland, for plaintiff.\nLogan, Kurr, Hamilton & Robinson, Harold C. Hamilton, II (orally), Bangor, for defendant.\nBefore McKUSICK, C.J., and NICHOLS, ROBERTS, VIOLETTE, WATHEN and SCOLNIK, JJ.\nWATHEN, Justice.\nFollowing a jury-waived trial in the Superior Court (Knox County), defendant Rodney Cloukey appeals his conviction for operating a motor vehicle after his license had been revoked as a habitual offender. 29 M.R.S.A. \u00a7 2298 (Supp.1984-1985).[1] The sole issue on appeal arises from defendant's constitutional challenge to the police roadblock that resulted in his apprehension. We conclude that the police conduct was \"reasonable\" and, therefore, we deny the appeal.\n\nI.\nDuring the early afternoon of August 17, 1983 a deputy sheriff and a member of the *144 Maine State Police set up a roadblock on Route 73 in St. George for the purpose of conducting a traffic safety check. Before the roadblock was established, the deputy asked for and received the permission of the Sheriff of Knox County to assist the trooper. He also informed the Sheriff of the location of the proposed roadblock. Route 73 is a rural two lane road permitting vehicular travel in both directions. The roadway leads from St. George through Spruce Head and South Thomaston and on to Rockland. According to the testimony of the deputy, \"Route 73 itself is one of the stretches of road in Knox County that we have a higher rate of accidents on than any other.\"\nThe officers selected an area that they believed to be safe for roadway traffic stops. The weather was clear and dry, and the roadway was level and straight. Motorists approaching the site selected by the officers had an unobstructed view of the site for about \u00bd mile from one direction and 1\u00bd miles from the other direction. The officers parked their respective cruisers on the opposite shoulders of the highway, leaving the traveled portion unobstructed. They activated both sets of \"flashers\" and one flashing blue light. The officers stopped motorists by standing in the road, gesturing for them to stop. The deputy testified that he stopped every vehicle that came toward him in his lane. He would approach the driver, asking for a license and registration. He would then explain that he was conducting a traffic safety check. The check consisted of \"looking at the license and registration, checking the inspection sticker, the tires, lights\" and occasionally the directional signals. The deputy estimated that he performed thirty checks in one-half hour. The state police officer performed similar checks in the other lane of the highway.\nDefendant Rodney Cloukey was stopped by the deputy while driving a motor vehicle. The deputy explained that he was conducting a safety check, and asked to see defendant's license and registration. When defendant was unable to produce a license, the deputy asked him to pull over. After running a license check and finding that defendant's license had been suspended, the deputy placed defendant under arrest.\nPrior to trial, defendant moved to suppress \"any and all evidence gained as a result of the illegal and unconstitutional stop and search of his automobile.\" In denying the motion, the Superior Court balanced the need for the seizure against the intrusion on the defendant and found that the license and registration stop was \"reasonable\" under the Fourth Amendment of the United States Constitution. The issue is now before us on appeal.\n\nII.\nAt the outset it should be observed that the present case involves a systematic, roadblock stop of all vehicles rather than a roving stop of one vehicle. The roadblock was conducted for the purpose of checking the operators' license and the registration, inspection sticker, and certain exterior safety features of all vehicles passing through an area having a high accident rate. These facts are of paramount importance because neither this Court nor the United States Supreme Court has ruled on the precise issue presented by this case. In Delaware v. Prouse, 440 U.S. 648, 99 S.Ct. 1391, 59 L.Ed.2d 660 (1979) the Supreme Court affirmed an order suppressing evidence and held that the roving stop of a motorist, without at least an articulable and reasonable suspicion that a violation might be occurring, violates the Fourth Amendment. By way of dicta the Court went on to state:\nThis holding does not preclude the State of Delaware or other States from developing methods for spot checks that involve less intrusion or that do not involve the unconstrained exercise of discretion. Questioning of all oncoming traffic at roadblock-type stops is one possible alternative.\n*145 Id. at 663, 99 S.Ct. at 1401 (footnote omitted). The Supreme Court was not required by the facts of Prouse to establish any meaningful guidelines regarding roadblock stops and therefore the issue remains in doubt.\nAnalysis begins with the fundamental question whether the action of the police officers in conducting the roadblock was \"reasonable\" under the Fourth Amendment. In this area of the law, reasonableness requires that the need to temporarily seize motorists be balanced against the invasion that the seizure entails. See Camara v. Municipal Court, 387 U.S. 523, 536-537, 87 S.Ct. 1727, 1734-35, 18 L.Ed.2d 930 (1967). Although Prouse did not speak directly to the mechanics of an acceptable roadblock, the decision is helpful, at least by way of contrast. In Prouse, a police officer stopped a vehicle in the evening hours and seized marijuana in plain view on the car floor. The defendant, an occupant of the vehicle, was arrested for illegal possession of a controlled substance. The arresting officer testified that he made the stop for the purpose of checking the driver's license and registration and described the stop as routine. The officer's decision, however, was explained in the following terms: \"I saw the car in the area and wasn't answering any complaints, so I decided to pull them off.\" Prouse at 650-651, 99 S.Ct. at 1394. It would be difficult to describe a more capricious and arbitrary basis for detention than the fact that the officer had nothing better to do. The Supreme Court first restated the balancing test as follows:\nThus, the permissibility of a particular law enforcement practice is judged by balancing its intrusion on the individual's Fourth Amendment interests against its promotion of legitimate governmental interests.\nProuse at 654, 99 S.Ct. at 1396. Considering the particular facts before it, the Court found the intrusion to outweigh the governmental interest supporting a roving stop.\nAfter Prouse, many courts have been called upon to consider whether roadblocks are permissible. Two federal courts of appeal have had little trouble upholding specific roadblocks for a license and registration check. In United States v. Miller, 608 F.2d 1089 (5th Cir.1979), cert. denied, 456 U.S. 964, 102 S.Ct. 2043, 2044, 72 L.Ed.2d 489 (1982) officers in Texas set up a license and registration checkpoint adjacent to a Border Patrol checkpoint. All cars traveling in either direction were stopped. The court noted that this was \"a procedure apparently approved in Delaware v. Prouse.\" Id. at 1093. In United States v. Prichard, 645 F.2d 854 (10th Cir.1981), cert. denied, 454 U.S. 832, 102 S.Ct. 130, 70 L.Ed.2d 110 (1981), a roadcheck conducted in New Mexico was upheld even though the officers exercised some discretion in deciding which cars to stop. As traffic became congested, the officers waved cars through until the pile-up had disappeared. The court discussed the roadblock in the following terms:\nIn our view, the roadblock stop of the Ford Bronco does not run afoul of the rule of Prouse. While this may not have been a \"100% roadblock\" of the type referred to in Prouse, it is nonetheless a long way from the selective, single car stop denounced in Prouse. In the instant case, the New Mexico state police were attempting to stop all westbound traffic on an interstate highway, insofar as was humanly possible. The decision not to stop trucks was reasonable under the circumstances, because, presumably, they had all been stopped at a port of entry. The purpose of the roadblock, i.e., to check drivers' licenses and car registrations, was a legitimate one. If, in the process of so doing, the officers saw evidence of other crimes, they had the right to take reasonable investigative steps and were not required to close their eyes. See United States v. Merryman, 630 F.2d 780, 782-85 (10th Cir.1980). Furthermore, allowing all the stopped cars through when traffic became congested was also reasonable and, in our *146 view, non-violative of the rule of Prouse. In sum, the roadblock stop of the Ford Bronco was, under the described circumstances, constitutional.\n645 F.2d at 856-857.\nThe state courts that have dealt with roadblocks have generally read the dicta in Prouse more narrowly. Of the seven cases involving temporary roadblocks, three have found a Fourth Amendment violation: State ex rel. Ekstrom v. Justice Court of State, 136 Ariz. 1, 663 P.2d 992 (1983); Commonwealth v. McGeoghegan, 389 Mass. 137, 449 N.E.2d 349 (1983); State v. Olgaard, 248 N.W.2d 392 (S.D.1976). Four cases have found no violation: State v. Deskins, 234 Kan. 529, 673 P.2d 1174 (1983); Little v. State, 300 Md. 485, 479 A.2d 903 (1984); State v. Coccomo, 177 N.J.Super. 575, 427 A.2d 131 (1980); People v. Scott, 53 U.S.L.W. 2300 (N.Y.1984). Almost without exception, the state courts have focussed on the following language from Prouse:\nImplemented in this manner, the reasonableness standard usually requires, at a minimum, that the facts upon which an intrusion is based be capable of measurement against \"an objective standard,\" whether this be probable cause or a less stringent test. In those situations in which the balance of interests precludes insistence upon \"some quantum of individualized suspicion,\" other safeguards are generally relied upon to assure that the individual's reasonable expectation of privacy is not \"subject to the discretion of the official in the field,\" Camara v. Municipal Court, 387 U.S., at 532, 87 S.Ct., at 1733. See id., at 534-535, 87 S.Ct. at 1733-1734; Marshall v. Barlow's, Inc., supra, 436 U.S. at [307] 320-321, 98 S.Ct. at [1816] 1824-1825 [56 L.Ed.2d 305]; United States v. United States District Court, 407 U.S. 297, 322-323, 92 S.Ct. 2125, 2139, 32 L.Ed.2d 752 (1972) (requiring warrants).\n440 U.S. at 654-655, 99 S.Ct. at 1396 (footnotes omitted). From this language and the analogy provided by decisions involving immigration checkpoints, see e.g., United States v. Martinez Fuerte, 428 U.S. 543, 96 S.Ct. 3074, 49 L.Ed.2d 1116 (1976), the courts have extrapolated a number of factors to apply and balance in reaching a decision in a particular case. The factors listed in State v. Deskins, 234 Kan. 529, 673 P.2d 1174 (1983) are representative:\n(1) The degree of discretion, if any, left to the officer in the field; (2) the location designated for the roadblock; (3) the time and duration of the roadblock; (4) standards set by superior officers; (5) advance notice to the public at large; (6) advance warning to the individual approaching motorist; (7) maintenance of safety conditions; (8) degree of fear or anxiety generated by the mode of operation; (9) average length of time each motorist is detained; (10) physical factors surrounding the location, type and method of operation; (11) the availability of less intrusive methods for combating the problem; (12) the degree of effectiveness of the procedure; and (13) any other relevant circumstances which might bear upon the test.\n234 Kan. at 541, 673 P.2d at 1185.\nIn the case before us defendant argues that the roadblock is unconstitutional solely because \"there was no decision made by policy making supervisory officers either as to the necessity for and reasonableness of the road block, or to the procedures to be used in setting up the road block.\" The record reveals only a modest amount of involvement by the Sheriff of Knox County. His permission was requested and he was informed of the location of the roadblock by his deputy. We are not persuaded, however, that the relative absence of supervisory personnel in the planning stages of the roadblock renders it constitutionally unreasonable.\nWe believe that the State of Maine has a vital interest in protecting its citizens from persons who have either not qualified to drive or who have been declared incompetent to drive because of a record of serious driving offenses. This case does not *147 involve a sobriety stop. There may be many effective ways of detecting a drunken driver without intruding on the rights of the citizen. A trained eye can readily spot erratic operation. The unlicensed driver, however, displays no observable characteristics. If a license check under any circumstances is unreasonable, then in most instances, public protection must await the commission of another offense. Although the state's interest would not sustain the highly intrusive roving stop of a single vehicle, it does sustain the less intrusive police practice employed in this case.\nFor purposes of the Fourth Amendment, there is a significant difference in fact between a roving stop and a roadblock. Common experience alone suggests that it is far more intrusive, alarming, and unsettling to be picked out of a line of traffic and stopped, as opposed to being stopped as part of a line of traffic. This commonsense proposition has been recognized by the Supreme Court and forms the rational basis for the roadblock exception. In Prouse, the Court observed that:\nFor Fourth Amendment purposes, we also see insufficient resemblance between sporadic and random stops of individual vehicles making their way through city traffic and those occasioned by roadblocks where all vehicles are brought to a halt or to a near halt, and all are subjected to a show of the police power of the community. `At traffic checkpoints the motorist can see that other vehicles are being stopped, he can see visible signs of the officers' authority, and he is much less likely to be frightened or annoyed by the intrusion.'\nProuse 440 U.S. at 657, 99 S.Ct. at 1397 (citations omitted). On balance we conclude that the state's interest, under these particular circumstances, sustains the minimal intrusion inflicted on the traveling public.\nWe are fully cognizant of the fact that a license checkpoint can be used as a subterfuge. Those state courts that have emphasized the importance of the involvement of supervisory personnel in planning a roadblock, undoubtedly had that fact in mind. Although we recognize it is preferable, we are not persuaded that written policy and supervision is essential. Subterfuge can occur even in the presence of such factors. The justice below found that the purpose of the roadblock was as stated by the officer. The facts and circumstances are highly corroborative of that finding.\nThe entry must be:\nJudgment affirmed.\nAll concurring.\nNOTES\n[1] 29 M.R.S.A. \u00a7 2298 provides in relevant part:\n\nIt shall be unlawful for any person to operate any motor vehicle on a public way, as defined in Title 17-A, section 505, subsection 2, in this State while the revocation prohibiting its operation remains in effect. Any person found to be an habitual offender under this chapter, or former chapter 18, who is thereafter convicted of operating a motor vehicle in this State while the revocation prohibiting operation is in effect shall have committed a Class C crime.\nDefendant had previously been declared to be a habitual offender pursuant to 29 M.R.S.A. \u00a7 2292 as a result of three convictions for operating under the influence.\n"} -{"text": "\n671 F.Supp. 297 (1987)\nSheldon STARKMAN, et al., Plaintiffs,\nv.\nWARNER COMMUNICATIONS, INC., et al., Defendants.\n85 Civ. 7949 (JMW).\nUnited States District Court, S.D. New York.\nOctober 13, 1987.\n*298 Bader & Bader, White Plains, N.Y., for plaintiffs; I. Walton Bader, New York City, of counsel.\nPaul, Weiss, Rifkind, Wharton & Garrison, New York City, for defendant Warner Communications Inc.; Leslie Gordon Fagen and C. William Phillips, of counsel.\nSkadden, Arps, Slate, Meagher & Flom, New York City, for individual defendants; Barry H. Garfinkel and Jeremy A. Berman, of counsel.\n\nMEMORANDUM AND ORDER\nWALKER, District Judge:\n\nINTRODUCTION\nThis case presents the question, among others, of corporate and insider liability under the anti-fraud provision of the Securities and Exchange Act to those who trade in options to buy the corporation's stock.\nPlaintiffs bring this action alleging violations of Section 10(b) of the Securities and Exchange Act of 1934, as amended, 15 U.S.C. Section 78j(b), and Rule 10(b)(5) promulgated thereunder, 17 C.F.R. 240.10(b)-5, violations of the Martin Act, specifically Sections 339-a and 352-c of the General Business Law of the State of New York (McKinney 1984), and common law fraud.\nPlaintiffs are Sheldon and Donna Starkman (the \"Starkmans\"). Defendants are Warner Communications, Inc., a Delaware corporation (\"Warner\"), and various directors and officers of Warner (collectively, with Warner, the \"defendants\").\nPlaintiffs allege that they purchased 500 warrants of Warner on or about May 17, 1982 at a price of $9,562 and that they *299 suffered a loss of approximately $460,000 on Warner call options they purchased and sold between August and November 1982, due to reliance upon material misrepresentations made by defendants to the public and, in Warner filings, to the SEC concerning the financial outlook for Warner. Though not stated in the complaint, in their memorandum of law opposing defendants' requests for partial summary judgment, plaintiffs allege that even in the absence of reliance on defendants' misstatements, plaintiffs are entitled to recover their options trading losses under a \"fraud on the market theory.\"\nDefendants bring this motion for partial summary judgment on the options claims pursuant to Fed.R.Civ.P. 56, asserting that, whatever the accuracy of defendants' statements and filings, any liability of defendants does not extend to Warner option-holders, to whom they owed no fiduciary duty, that, in any event, plaintiffs did not rely on defendants' statements or omissions, and that plaintiffs, who did not trade options with any of the defendants, could not possibly be the victims of fraud. Further, defendants assert that plaintiffs may not rely on a fraud on the market theory to seek recovery.\n\nFacts\n\nA. The Background of the Instant Litigation\n\nWith this motion defendants seek to write the last chapter in a long story, the statements and transactions at issue having occurred over five years ago, and having already been the subject of much litigation.\nIn the early 1980's, Warner's profitability was greatly enhanced, in large part due to the explosive growth in the video game and cartridge industry, of which Warner's then wholly-owned subsidiary Atari, Inc. (\"Atari\") was an undisputed leader.\nOn December 8, 1982 the public learned that the good times for Warner were no longer so good. Warner announced that Atari's new sales were exceeded by cancellation of orders and that there would be a shortfall of expected profits. The Atari disappointment, together with a $20 million write-off in connection with a Warner division, Knickerbocker Toy Company, Inc. (\"Knickerbocker\"), led to fourth quarter 1982 earnings for Warner that were approximately 50% less than 1981 fourth quarter earnings. Warner's fiscal 1982 earnings, as a result, \"would be considerably less than previously represented to the investing public.\" In re Warner Communications Securities Litigation, 618 F.Supp. 735, 739 (S.D.N.Y.1985). The next day Warner stock dropped 16 points amid questions at Warner over who knew what, when did they know it, and why didn't they release it to the investing public? Soon thereafter, 18 class and 4 derivative actions were filed against Warner, Atari, and various directors and officers. The class actions were consolidated into one proceeding before the District Court for the Southern District of New York and on July 18, 1983 the class plaintiffs served a consolidated amended complaint covering all of the consolidated proceedings.\nOn April 16, 1985, the parties in the class and derivative actions entered into a proposed settlement for both the class and derivative actions, covering the class of purchasers of Warner securities between March 3, 1982 and December 8, 1982, including those who purchased call options and sold put options which were unexpired or open to them on December 8, 1982. On August 20, 1985, Judge Keenan of this Court approved the settlement proposal. The proposed class action settlement provided that the defendants would pay approximately $17 million plus accrued simple interest in settlement of all class action claims against them. The derivative claims were settled by the individual defendants for $2 million to be paid to Warner.\nThe Starkmans, after having first filed an objection to the proposed class settlement, opted out of the class and shortly thereafter began the instant litigation.\n\nB. The Starkman Transactions\n\nPlaintiffs bring their action as a result of losses sustained in the options market, a market whose most significant characteristic *300 is great risk. The Options Clearing Corporation (the \"OCC\"), the creator of the options in which plaintiffs speculated, defines an option as \"a legal contract that gives the holder the right to by [a \"call\"] or sell [a \"put\"] a specified amount of the underlying interest at a fixed or determinable price ... upon exercise of the option.\"[1]\nPlaintiffs speculated in \"call\" options, a contract giving the holder the right to purchase a specified amount of the underlying security at a specified price during the term of the option. A sale of a call option obligates the seller to deliver the underlying security to the OCC prior to expiration of the option if the option is exercised.\nThere is a great deal of risk associated with either the purchase or sale of call options. If one sells a call option and the price of the underlying security rises above the option price, the purchaser of the option will certainly \"call\" the stock and obtain it from the seller of the option at the \"strike\" price rather than at the higher market price. The seller of the option, if he owns the underlying security, will \"lose\" the profit foregone from his inability to sell the security for himself at the higher price. This foregone profit is, of course, offset in whole or in part by the amount of any premium received from the purchaser of the call option for bearing the risk. One who sells calls but does not own the underlying security (\"naked calls\") takes an even greater risk. Upon its exercise, the seller of the naked call must go out into the market to purchase the underlying security in order to resell it to the purchaser of the call.\nPlaintiffs have been holders of Warner common stock since 1974. In 1982 plaintiffs were owners of 27,374 shares of Warner, and maintained significant investments in the securities markets, totalling nearly $2 million, inclusive of margin owed the broker. Plaintiffs had first traded options in 1980, sustaining a loss of about $10,000 on options written on stock of 20th Century-Fox. In January 1982, plaintiffs began to trade in Warner options by selling puts \u0097 trades not at issue in this lawsuit. Plaintiff Sheldon Starkman's investment strategy originated with his brother and stockbroker Michael Starkman. It was a strategy Sheldon Starkman admitted at deposition that he \"did not entirely understand.\"[2]\nBy August 1982, Warner common stock had tumbled from a February 1982 high of 60 to a range in the mid-to-high 30s. Industry analysts had become \"bearish\" on Warner, and Sheldon Starkman, in part \"because of such comments ... thought it a good idea to hedge [his] position in the stock against further loss by selling call options....\"[3] By mid-September however, Warner stock had begun to rise again. Nevertheless, Sheldon Starkman continued to bet on a price decline by selling call options. Sheldon Starkman \"could not entirely believe the continuing good sales releases from Atari and Warner ... especially in view of Mr. Harold Vogel's [of Merrill Lynch] still bearish position.\"[4] Warner stock continued to rise, however, and plaintiffs \"continued almost in disbelief to sell options, even naked calls beyond [their] holdings.\"[5] Plaintiffs had not only sold calls during this period. They had also bought calls and profitted handsomely, earning over $120,000.[6]\nPlaintiffs' frenetic trading continued throughout the fall and, by October, with Warner stock maintaining its upward movement, plaintiffs were writing call options nearly every day of the month. In late October plaintiffs began repurchasing calls to \"bite the bullet,\" to try to cover August and September losses and to \"jump *301 into a higher price that [plaintiffs] didn't think it would reach.\"[7] By mid-November plaintiffs had lost $460,000.[8] It is this loss which plaintiffs seek to recover.\n\nDiscussion\n\nA. Standard for Summary Judgment\n\nThe Federal Rules authorize summary judgment where \"there is no genuine issue as to any material fact....\" Fed.R.Civ.P. 56(c). \"[S]ummary judgment will not lie if the dispute about a material fact is `genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.\" Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). \"The burden, therefore, is on the moving party to establish that no relevant facts are in dispute.\" Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 444 (2d Cir.1980).\n\nB. Liability Under Section 10(b) and Rule 10b-5\n\nRule 10b-5 promulgated under Section 10(b) of the Securities and Exchange Act of 1934, as amended, 15 U.S.C. Section 78j, makes it unlawful for any person\n(a) to employ any device, scheme, or artifice to defraud,\n(b) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading, or\n(c) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.\n17 C.F.R. 240.10b-5.\nIn order to establish a claim for relief under these provisions, claimants must establish that (1) the instrumentalities of commerce were used, 15 U.S.C. Section 78j; (2) claimants sold or purchased securities, Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975); (3) defendants, acting with scienter, employed a scheme or artifice to defraud, made material misrepresentations or omissions of fact, or engaged in an act, practice or course of business that operated as a fraud, Ernst & Ernst v. Hochfelder, 425 U.S. 185, 197, 96 S.Ct. 1375, 1382, 47 L.Ed.2d 668 (1976); (4) the proscribed conduct occurred in connection with the purchase or sale of securities, Superintendent of Insurance of State of New York v. Bankers Life & Casualty Co., 404 U.S. 6, 10, 92 S.Ct. 165, 167, 30 L.Ed.2d 128 (1971); Chemical Bank v. Arthur Andersen & Co., 726 F.2d 930 (2d Cir.), cert. denied, 469 U.S. 884, 105 S.Ct. 253, 83 L.Ed.2d 190 (1984); and (5) defendants' conduct caused injury to the claimants. Bloor v. Carro, Spanbock, Londin, Rodman, & Fass, 754 F.2d 57, 61 (2d Cir.1985).\n\n(1) Whether Plaintiffs' Are Owed A Duty By Defendants\n\nThis motion raises the question whether corporate insiders who fail to disclose material inside information and who sell shares in the corporation may be held liable under the anti-fraud provisions of the federal securities laws to persons who trade in options to purchase the corporation's securities. This question, while not entirely new to the courts, is one in which the law is unsettled. See Laventhall v. General Dynamics Corporation, 704 F.2d 407 (8th Cir.), cert. denied, 464 U.S. 846, 104 S.Ct. 150, 78 L.Ed.2d 140 (insiders trading in corporation stock owed no duty to disclose or abstain to purchaser of call options and, therefore, purchaser had no standing to allege violations of the Securities and Exchange Act); Deutschman v. Beneficial Corporation, 668 F.Supp. 358 (D.Del.1987) (purchaser of call options lacked standing to assert claim of misrepresentations and omissions by corporation where no insider traded in options or in corporation stock); Bianco v. Texas Instruments, 627 F.Supp. 154 (N.D.Ill.1985) (Purchasers and sellers of call options held to lack standing to allege securities fraud against corporation and its insiders for affirmative misrepresentations *302 and for insider trading where option traders neither purchased nor sold corporation stock); In re McDonnell Douglas Corporation Securities Litigation, 567 F.Supp. 126 (E.D.Mo.1983) (purchasers of call options denied standing to sue corporate insiders with respect to claims based on nondisclosure of inside information and insider trading.) See also In re Digital Equip. Corp. Securities Litigation, 601 F.Supp. 311 (D.Mass.1984) (granting option-holders standing to sue for affirmative misrepresentations of corporation); Backman v. Polaroid Corp., 540 F.Supp. 667 (D.Mass.1982) (because options are securities within meaning of Section 10(b) and because Section 10(b) applies to `any person', purchaser of call options had standing to sue for insider trading of stock); O'Connor & Associates v. Dean Witter Reynolds, Inc., 529 F.Supp. 1179 (S.D.N.Y.1981) (optionholders have standing to sue corporate insiders and their tippees who themselves traded in options based on inside information); Lloyd v. Industrial Bio-Test Laboratories, Inc., 454 F.Supp. 807 (S.D.N. Y.1978) (purchaser of call options had standing to sue corporation for affirmative misrepresentations).\nThe ultimate question raises a number of subsidiary ones. May a corporation and its insiders be held liable to an options trader where neither the corporation nor the insiders have issued or traded in options and where neither have had any relationship with the options trader except insofar as the corporation's activities influence economic decisions in the marketplace generally? Does the corporation owe a duty to the market generally, so that those who own no part of a corporation but who nonetheless speculate on the corporation's future may hold the corporation liable for withholding from the market material information which would alter the speculator's analysis of the corporation's future? Because the value of an option is directly related to the value of the underlying security on which the option is written, ought we deem the option trader \"close enough\" to the corporation so that he may invoke the same protections as the common shareholder?\nThe purpose behind Section 10(b) and Rule 10b-5 \"is to protect the investing public and to secure fair dealing in the securities markets by promoting full disclosure of inside information so that an informed judgment can be made by all investors who trade in such markets.\" Shapiro v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 495 F.2d 228, 235 (2d Cir.1974); Crane Co. v. Westinghouse Air Brake Co., 419 F.2d 787, 793 (2d Cir.1969), cert. denied, 400 U.S. 822, 91 S.Ct. 41, 27 L.Ed.2d 50 (1970). Nevertheless, although Section 10(b) \"must be read flexibly, not technically and restrictively,\" Superintendent of Insurance of State of New York, 404 U.S. at 12, 92 S.Ct. at 169, Rule 10b-5 was not intended \"to establish a scheme of investor's insurance.\" List v. Fashion Park, Inc., 340 F.2d 457, 463 (2d Cir.), cert. denied, 382 U.S. 811, 86 S.Ct. 23, 15 L.Ed.2d 60 (1965).\nFor plaintiffs to recover as the victims of fraud, as a threshhold matter, they must show that some duty was owed them and that that duty was breached. Liability must be grounded on \"a duty to disclose arising from a relationship of trust and confidence between parties to a transaction.\" Chiarella v. United States, 445 U.S. 222, 230, 100 S.Ct. 1108, 1115, 63 L.Ed.2d 348 (1980); see also Dirks v. S.E.C., 463 U.S. 646, 657-58, 103 S.Ct. 3255, 3263, 77 L.Ed.2d 911 (1983) (\"We reaffirm today that `a duty to disclose arises from the relationship between the parties.'\") (quoting Chiarella, 445 U.S. at 231, n. 14, 100 S.Ct. at 1116, n. 14).\nIn Chiarella, the Supreme Court reversed the conviction of a financial printer who had deduced the identities of potential takeover targets from financial documents he had access to in the course of his printing activities and then purchased the targets' securities, realizing a substantial gain. 445 U.S. at 224, 100 S.Ct. at 1112. The Court rejected a \"parity of information\" rule: that \"the use by anyone of material information not generally available is fraudulent ... because such information gives certain buyers or sellers an unfair advantage over less informed buyers *303 and sellers.\" Id. at 232, 100 S.Ct. at 1116.\nThe Court reasoned that \"no duty could arise from petitioner's relationship with the sellers of the target company's securities, for petitioner had no prior dealings with them. He was not their agent, he was not a fiduciary, he was not a person in whom the sellers had placed their trust and confidence. He was, in fact, a complete stranger who dealt with the sellers only through impersonal market transactions.\" Id. at 232-233, 100 S.Ct. at 1116-17. The Court reiterated the established doctrine that \"duty arises from a specific relationship between two parties.\" Id. at 233, 100 S.Ct. at 1117.\nThe reasoning in Chiarella relied in part on an earlier SEC decision and the common law which recognized the dependency of \"duty\" on \"relationship\" when imposing disclosure obligations. In Cady, Roberts & Co., 40 S.E.C. 907 (1961), \"the Commission decided that a corporate insider must abstain from trading in the shares of his corporation unless he has first disclosed all material inside information known to him.\" Chiarella, 445 U.S. at 227, 100 S.Ct. at 1114. The SEC there looked to \"a relationship of trust and confidence\" between insiders and the shareholders of a corporation. Id. at 228, 100 S.Ct. at 1114. That relationship gave rise to a disclosure obligation because of the \"necessity of preventing a corporate insider from taking unfair advantage of the uninformed minority stockholders.\" Id. at 228-229, 100 S.Ct. at 1115, quoting Speed v. Transamerica Corp., 99 F.Supp. 808, 829 (D.Del.1951).\nThe Chiarella court further noted that at common law \"one who fails to disclose material information prior to the consummation of a transaction commits fraud only when he is under a duty to do so. And the duty to disclose arises when one party has information `that the other party is entitled to know because of a fiduciary or other similar relation of trust and confidence between them.'\" Chiarella, 445 U.S. at 228, 100 S.Ct. at 1114, quoting Restatement (Second) of Torts \u00a7 551(2)(a) (1976).\nIn Laventhall, the Eighth Circuit Court of Appeals applied the reasoning in Chiarella to deal squarely with the issue presented in this case. Laventhall affirmed a lower court dismissal for lack of standing of a suit by a purchaser of calls against a corporation trading solely in its common stock. Laventhall alleged that General Dynamics, without disclosing a pending declaration of cash dividend, purchased 157,500 shares of its common stock in December 1978. On January 4, 1979, the corporation declared a dividend and a stock split. Laventhall brought suit against the corporation for trading its stock on the basis of undisclosed material inside information.\nEmploying the analysis developed by the Supreme Court in Chiarella, the court in Laventhall pointed out that the relationship between an optionholder and the issuer of the underlying security is fundamentally different from the relationship between a shareholder and the issuer. The court focused on Chiarella's holding that \"liability is premised upon a duty to disclose arising from a relationship of trust and confidence between parties to a transaction.\" Laventhall. 704 F.2d at 412, quoting Chiarella, 445 U.S. at 230, 100 S.Ct. at 1115. The Laventhall court noted that an issuer trading in its own stock and an optionholder are not parties to a transaction. The optionholder, before, during, and after his purchase or sale of options is still a complete stranger to the corporation \"and ordinarily no duty would be owed.\" Laventhall, 704 F.2d at 412.\nThe court stated that the \"sine qua non in every private action under section 10(b) is unauthorized trading of securities in the same market as the persons damaged.\" Id. Thus, a private plaintiff must \"show some transactional nexus between defendant's trading and plaintiff's loss.\" Id. The court explained that the\nlegal justification for liability of the corporate insider to the outside uninformed investor is that if the insider trades on the basis of the inside information it may profit at the expense of outside investors who are disadvantaged in the same or *304 similar transaction by lack of the inside information.... However, the same analysis cannot be applied to a transaction between an options holder dealing with a third party and the corporate insider or his tippee dealing with shares of stock. There is only a speculative relationship between the insider's trading and the alleged loss caused to the options holder ... the nondisclosure may have had some indirect effect on the option premium, but the insider's trading of stock on the stock market has no transactional nexus with the option holder's loss on the options exchange.\nId. We agree with the Laventhall court's reasoning and result. As in Laventhall, defendants here engaged in no transaction with plaintiffs and never were about to do so. After plaintiffs' purchases of call options \"they were still complete strangers to [Warner], and ordinarily no duty would be owed.\" Id.\nWhile face-to-face transactions are not required to give rise to liability, Baretge v. Barnett, 553 F.2d 290, 291 (2d Cir.1977), Shapiro, 495 F.2d at 228, 239 (\"privity between plaintiffs and defendants is not a requisite element of a Rule 10b-5 cause of action for damages\"), we agree with the Laventhall court that some \"transactional nexus between defendant's trading and plaintiff's loss\" need be shown. Laventhall, 704 F.2d at 412.\nHere, none has been shown. There exists only the speculative relationship between the insiders' trading and the alleged loss caused to the options holder which Laventhall found inadequate. Plaintiffs here sold many and purchased some call options on Warner common stock between August and November 1982. These options were issued by the OCC, not Warner. Indeed, as the OCC explains, \"as a rule, issuers of underlying stocks do not participate in the selection of their stocks for options trading.\"[9] Neither does Warner control the number or variety of options issued. \"Issuers of underlying stocks have no responsibility regarding the issuance, the terms, or the performance of the options ... and option holders have no rights as security holders of such issuers.\"[10] For performance of the contractual obligation, an option buyer \"looks to OCC (in the sense that he relies on a backup system established by OCC) rather than to any particular buyer ... the aggregate rights of option holders are matched by the aggregate obligations that option writers owe to OCC.\"[11] Warner then, is not a participant in the process of issuing, selling, purchasing or matching options.\nSimply because the terms of an option and its exercise may be keyed to the value of an equity does not make it a derivative of an equity. The instrument stands alone, claiming no equity in the corporation, entitled to no vote, and with no fiduciary obligation of the management to the optionholder's interest.\nIn O'Connor & Associates v. Dean Witter Reynolds, Inc. (O'Connor I), 529 F.Supp. 1179, 1184-85 (S.D.N.Y.1981) (Lasker, J.), the Court, while granting an optionholder standing to allege fraud against insiders who traded options contemporaneously with the optionholder, stated that\nthe relationship between corporate insiders and shareholders stands in stark contrast to the lack of relationship between the corporate insiders and options traders ... the dispositive distinction is that the options trader has no equity interest in the corporation by virtue of his selling or purchasing an option on the corporation's stock ... the optionholder is owed no special duty by the officers and directors of the corporation because, quite simply, the corporation is not run for his benefit ... In short, as a shareholder one is entitled to the benefits of a trust relationship. As an options trader, one is not.\nOptionholders should not, and presumably do not, expect that management owes *305 them obligations of disclosure similar to those owed to shareholders. Optionholders, who may ultimately reap the rewards of the corporation's successful operation, do not bear the same costs as ordinary shareholders do. These costs include outlays to provide incentives to management to enhance performance and reduce self-dealing. Shareholders, and not optionholders, pay for the right to replace management or effect a change in control.\nThis Court does not base its decision solely on the ground that plaintiffs were not shareholders at the time of the misstatements and/or omissions complained of. Nor, of course, does this Court suggest that optionholders who exercise their options and then purchase or sell the underlying security are in any way precluded from recovery for fraud. The Court is mindful that Cady, Roberts extended the insider's duty to disclose or abstain to incipient as well as preexisting shareholders. It is quite true, as Learned Hand wrote, that a director and officer does assume \"a fiduciary relation to the buyer by the very sale; for it would be a sorry distinction to allow him to use the advantage of his position to induce the buyer into the position of a beneficiary although he was forbidden to do so once the buyer had become one.\" Cady, Roberts, 40 S.E.C. at 914, n. 23, quoting Gratz v. Claughton, 187 F.2d 46, 49 (2d Cir.), cert. denied, 341 U.S. 920, 71 S.Ct. 741, 95 L.Ed. 1353 (1951).\nIn O'Connor I, this Court did allow a seller of call options to maintain allegations of insider trading against insiders and their tippees who bought call options contemporaneously. While, as noted above, the Court distinguished the duty of trust and confidence owed by corporate insiders to shareholders from the absence of any such duty to optionholders, it read United States v. Newman, 664 F.2d 12 (2d Cir. 1981), aff'd after remand 722 F.2d 729 (2d Cir.1983) (unpublished order), cert. denied, 464 U.S. 863, 104 S.Ct. 193, 78 L.Ed.2d 170 (1983), a criminal action, to mean that in a civil case, where corporate insiders breach fiduciary duties to some parties, other parties may recover since \"the alleged practice constitutes a fraudulent practice within the meaning of the securities law.\" O'Connor I, 529 F.Supp. at 1185. Thus, Judge Lasker reasoned, the misappropriation by an employee of an employer's information might give rise to liability to injured third parties based on the breach of fiduciary duty to the employer but not to them.\nO'Connor I is distinguishable from the case at bar in several respects. First, in O'Connor I, the court, in granting standing to plaintiffs, relied heavily upon the fact that defendants contemporaneously traded the same option instruments and profitted thereby. Here, plaintiffs do not allege that defendants traded in Warner options at any time. See also Bianco, 627 F.Supp. at 154. Further, in Moss v. Morgan Stanley, Inc., 719 F.2d 5 (2d Cir.1983), cert. denied, 465 U.S. 1025, 104 S.Ct. 1280, 79 L.Ed.2d 684 (1984), the Court of Appeals affirmed the dismissal by Judge Pollack of this Court of an action for damages by a shareholder of a target corporation who sold his stock unknowingly prior to the public announcement of a tender offer, to a tippee whose knowledge of the takeover was due to the misappropriation of non-public information by an employee of the tender offeror's investment banker. The Court of Appeals stated that \"nothing ... in Newman suggests that an employee's duty to `abstain or disclose' with respect to his employer should be stretched to encompass an employee's `duty of disclosure' to the general public.\" 719 F.2d at 13. The court then approved the district court's conclusion that \"plaintiff cannot hope to piggyback upon the duty owed by defendants [investment banker's employee and his tippees] to the employer [investment banker] of one defendant and the employer's client. There is no `duty in the air' to which any plaintiff can attach his claim.\" Id., quoting Moss v. Morgan Stanley, Inc., 553 F.Supp. 1347, 1353 (S.D.N.Y.1983).\nIt is true, as Judge Lasker subsequently noted in O'Connor & Associates v. Dean Witter Reynolds, Inc. (O'Connor II), 600 F.Supp. 702 (S.D.N.Y.1985), that the Moss defendants who traded non-public information were not \"traditional\" insiders. But nothing in Moss indicates that had the defendants *306 in that case been traditional insiders, they would have owed duties, beyond those owed to the shareholders, to the public at large, including optionholders who were betting on price changes in the company's stock and with whom the insiders had no dealings. Indeed, as the footnote to Moss, quoted in O'Connor II, states, \"[o]rdinarily, `insiders' ... owe a duty to a corporation's shareholders ...\" Id., quoting Moss, 719 F.2d at 10-11, n. 8.\nThe O'Connor II court, while acknowledging that the insiders there owed no fiduciary duty to the optionholders, relied upon Shapiro v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 495 F.2d 228 (2d Cir.1974) concluding that \"by virtue of their fiduciary duty to the corporation and its shareholders, corporate insiders become subject to the separate duty to either `abstain or disclose' ... this additional duty is owed `to the investing public.' Shapiro [full citation omitted.]\"\nBut Shapiro, we think, should not be read to hold that insiders owe a duty to the entire investing public so that someone trading in a security different from that traded by the insiders who arguably suffers a loss due to an insider's misrepresentation or omission may hold the insider liable. The discussion in Shapiro from which the quote on duty to the investing public is drawn does not concern the nature of the relationship upon which liability may rest but rather centers on the question of whether privity is required to prove causation-in-fact. Recognizing that national markets are the scene of a multitude of trades daily and that a plaintiff will likely be unable to prove he purchased or sold to a defendant, the court held that proof of causation will not depend \"upon the character of the transaction \u0097 face-to-face versus national securities exchange ...\" Shapiro, 495 F.2d at 240. The Shapiro court did not approve the proposition that an insider who trades in the issuer's securities might be liable to a person who does not.\nIt should also be noted that this Court, before Chiarella, did grant a purchaser of call options standing to maintain allegations that fraudulent misrepresentations by a corporation and its subsidiary served to artificially inflate the price of the stock. Lloyd v. Industrial Bio-test Laboratories, Inc., 454 F.Supp. 807 (S.D.N.Y.1978). The Court based its decision upon the fact that an option is a security within the meaning of Section 10(b) and Rule 10b-5 and that the Section and the Rule apply to \"any person\" engaging in certain deceptive or fraudulent activities. For purposes of withstanding a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), plaintiff, by alleging that defendants engaged in those activities, had standing to sue. See also Backman, 540 F.Supp. at 671; In re Digital Equipment Corp. Securities Litigation, 601 F.Supp. at 311.\nLloyd was decided before Chiarella, however, and did not analyze defendants' duty to plaintiff in terms of Chiarella's discussion of relationships of trust and confidence and obligations to disclose. Moreover, while the Court in Lloyd is correct that options are securities, 15 U.S.C. \u00a7 78c(a)(10), and that Section 10(b) and Rule 10b-5 apply to \"any person\", both the Section and the Rule prohibit fraudulent acts only \"in connection with the purchase or sale of any security.\" 15 U.S.C. \u00a7 78j(b); 17 C.F.R. \u00a7 240.10b-5. The Warner options are securities but they are not securities of Warner. It is not alleged that defendants traded in these securities nor is it alleged that any manipulative or deceptive acts were directed at the options market. \"Plaintiff's trading in option contracts is simply too remote to satisfy the `in connection with' requirement when the alleged deceptive acts are merely corporate misstatements and nondisclosures not directed in any way to the options market.\" Deutschman, 668 F.Supp. 358; quoting Bianco, 627 F.Supp. at 161.\nThis Court recognizes the need for a securities market the integrity and fairness of which potential investors will be convinced and that historically the courts have taken a leading role in protecting participants in the market from misleading and deceptive practices. It is also clear that the price of an option depends in large measure on the price of the underlying security and that misleading information *307 affecting the price of the stock will normally affect the price of the option. Nevertheless, options trading is recognized as inherently more risky than investing in shares and an investor chooses which risk/return strategy to follow. Further, the cost of a great expansion of liability to optionholders and concomitant larger judgments against corporations will ultimately be borne by the shareholders of public corporations, \"usually the most important segment of the total category of investors intended to be protected.\" Cohen, Truth in Securities Revisited, 79 Harv.L.Rev. 1340, 1370 (1967); See S.E.C. v. Texas Gulf Sulpher Co., 401 F.2d 833, 867 (2d Cir.1968) (Friendly, J. concurring), cert. denied, 394 U.S. 976, 89 S.Ct. 1454, 22 L.Ed.2d 756 (1969). Indeed, as \"Chief Judge Cardozo observed, caution is the watchword where the creation of a duty results in `a liability in an indeterminate amount for an indeterminate time to an indeterminate class.'\" Deutschman, 668 F.Supp. 358, quoting Ultramares Corp. v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931).\nAs the Bianco court stated, \"we do not feel obligated to expand the scope of liability under Section 10(b) to make this obviously uncertain market safer for the trader who has no connection whatsoever to the issuer of the underlying stock.\" Bianco, 627 F.Supp. at 161. As noted above, Warner had no connection whatsoever with the issuance, purchase, sale, or matching of the options. Warner did not control the number or variety of options issued. Warner's \"potential liability to options holders is limited only by the whims of the options writers.\" Id. Under Chiarella we do not find the required relationship between defendants and plaintiffs close enough to impose liability. Thus the Court grants defendants' motion for partial summary judgment pursuant to Fed.R.Civ.P. 56.\n\n(2) Fraud on the Market\n\nAlthough plaintiffs do not allege any \"fraud on the market\" theory in their complaint, they do allege it in their reply to defendants' motion for summary judgment.[12] Plaintiffs, however, misunderstand the nature of the theory and what purpose it is intended to serve.\nPlaintiffs assert that \"even if the plaintiff did not rely on the false statements made by Warner, or even if he did not believe them, the making of false statements by Warner and failing to disclose pertinent information is a `fraud on the market' and actionable even in the absence of reliance or action taken with respect thereto.\"[13]\nIndeed, plaintiffs all but admit that they did not rely on either the alleged material misrepresentations or the market price. At oral argument, plaintiffs' attorney stated that \"Warner then comes out and submits an optimistic statement which the market believes. Because the market believes it, the market goes up and obviously, even though Mr. Starkman was right in his determination, the false reports given by Warner improperly inflated the market and, under those circumstances, Mr. Starkman was hurt.\" (emphasis added).[14]\nPlaintiff's assertions regarding the fraud on the market theory are simply incorrect. That theory does not dispense with a reliance requirement but rather permits a more flexible construction of it. See, e.g., Zuckerman v. Harnischfeger Corp., 591 F.Supp. 112, 122 (S.D.N.Y.1984); Shores v. Sklar, 647 F.2d 462 (5th Cir.1981) (en banc), cert. denied, 459 U.S. 1102, 103 S.Ct. 722, 74 L.Ed.2d 949 (1983); Blackie v. Barrack, 524 F.2d 891 (9th Cir.1975), cert. denied, 429 U.S. 816, 97 S.Ct. 57, 50 L.Ed.2d 75 (1976). The theory affords a plaintiff a presumption of reliance which the defendant may rebut. In essence, the theory accepts that misrepresentations may inflate the price of a stock and that a potential investor may detrimentally rely on the integrity of the market price. In Panzirer v. Wolf, 663 F.2d 365 (2d Cir. 1981), vacated as moot, 459 U.S. 1027, 103 S.Ct. 434, 74 L.Ed.2d 594 (1982), for example, *308 the Court of Appeals held that a plaintiff who relied on the integrity of the market, where the market price was distorted through the filing of a materially misleading annual report, \"stated a sufficient claim of reliance on the misrepresentation or omission.\" 663 F.2d at 367. The court recognized that some reliance was still required, stating that the \"function of requiring the plaintiff to show reliance in a 10b-5 action is to permit only those injured by fraud to sue.\" Id. See also Blackie v. Barrack, 524 F.2d 891 (9th Cir.1975), cert. denied, 429 U.S. 816, 97 S.Ct. 57, 50 L.Ed.2d 75 (1975).\n\nC. The Martin Act Claims\n\nPlaintiffs also assert claims under Sections 339-a and 352-c of the General Business Law of New York (the \"Martin Act\"). In CPC International v. McKesson Corporation, 70 N.Y.2d 268, 519 N.Y.S.2d 804, 514 N.E.2d 116 (N.Y.1987) the New York Court of Appeals held that no implied private right of action exists under Section 352-c. While the court did not expressly state that no private right of action exists under any part of the Martin Act, it did state that \"an implied private action is not consistent with the legislative scheme underlying the Martin Act and, specifically Section 352-c....\"\nEven if Section 339-a were held to permit a private right of action, plaintiffs would not benefit. As stated previously, plaintiffs do not allege they purchased call options from defendant or that defendants traded in options at all. The Martin Act \"cannot be reasonably extended to cover a purchaser who does not make his purchase from the misrepresenter....\" Kaufman v. Chase Manhattan Bank, N.A., 581 F.Supp. 350, 355 (S.D.N.Y.1984), quoting Herdegen v. Paine, Webber, Jackson, & Curtis, 31 Misc.2d 104, 220 N.Y.S.2d 459 (N.Y.Sup.1961) (dismissing the claim where plaintiff neither bought nor sold securities from defendants as a result of the misrepresentations, nor were the misrepresentations designed to induce such a purchase or sale); but see Whitbread (US) Holdings, Inc. v. Baron Philippe de Rothschild, 630 F.Supp. 972 (S.D.N.Y.1986).\nConsequently, plaintiffs' Martin Act claims are dismissed.\n\nD. The Common Law Fraud Claims\n\nPlaintiffs also allege that they have been the victims of common law fraud.[15] An action for common law fraud in New York requires proof by clear and convincing evidence of: (1) a misrepresentation or omission of material fact; (2) intent to deceive (scienter); (3) reliance by the plaintiffs; and (4) injury to the plaintiffs caused by plaintiffs' reliance on the misrepresentation or omission. Mallis v. Bankers Trust Co., 615 F.2d 68, 80 (2d Cir.1980), cert. denied, 449 U.S. 1123, 101 S.Ct. 938, 67 L.Ed.2d 109 (1981); Idrees v. American University of the Caribbean, 546 F.Supp. 1342, 1346 (S.D.N.Y.1982).\nDefendants' duty to plaintiffs is no greater under common law than under Rule 10b-5. Thus, for the reasons stated in the discussion of liability under Section 10(b) and Rule 10b-5, plaintiffs' common law fraud claim for options trading losses is dismissed.\n\nConclusion\nDefendants are hereby granted partial summary judgment on plaintiffs' options trading claims pursuant to Fed.R.Civ.P. 56.\nSO ORDERED.\nNOTES\n[1] Options Clearing Corporation, Characteristics and Risks of Standardized Options, (1985) at 4 (Exhibit D to the affidavit of Leslie Gordon Fagen).\n[2] Starkman deposition at 100 (Exhibit C to Fagen Aff.).\n[3] Handwritten statement of Sheldon Starkman (Exhibit 27 to Exhibit D of Fagen aff.).\n[4] Id.\n[5] Id.\n[6] Exhibit 17 to Exhibit D of Fagen aff.\n[7] By mid-November plaintiffs had lost $460,000.\n[8] Complaint, Count 4.\n[9] Characteristics and Risks of Standardized Options, at 61.\n[10] Id.\n[11] Id. at 60.\n[12] Defendant's Reply Memo at 7.\n[13] Id.\n[14] Oral argument transcript at 16.\n[15] Complaint, Count 4.\n"} -{"text": "872 F.2d 1027\nUnpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Tony H. PAYNE, Plaintiff-Appellant,v.The LAW CENTER, J.D. Lee, d/b/a Lee Legal Clinic, J.D. Lee,d/b/a The Law Center, P.C., J.D. Lee,Individually, Defendants-Appellees.\nNo. 88-5631.\nUnited States Court of Appeals, Sixth Circuit.\nApril 21, 1989.\n\nBefore ENGEL, Chief Judge, BOGGS, Circuit Judge, and AVERN COHN,* District Judge.\nPER CURIAM.\n\n\n1\nTony Payne appeals from a directed verdict entered in the United States District Court for the Eastern District of Tennessee in his action alleging breach of contract and professional negligence against his former attorney, J.D. Lee, for negligently failing to timely file a personal injury suit. Payne claims that Lee should have pursued an action against H. Pat Wood and Ben Bower for damages sustained when Payne was injured while working on a construction project that took place on their adjoining properties.\n\n\n2\nPayne was injured on March 17, 1981, while working in the employ of Ron Tallent. Tallent had contracted with Wood and Bower to build two channels, a rock riprap wall and a boat dock located on their properties in Tennessee. Tallent, Payne and another of Tallent's employees were turning over a section of the dock when they lost control of it in gusty winds. The section fell on Payne, severely injuring his spinal cord.\n\n\n3\nPayne first sought legal assistance from attorney Ralph Brown, who filed a worker's compensation claim on his behalf. Subsequently, Payne sought legal assistance from Lee, who agreed to pursue Payne's worker's compensation claim and to take necessary actions to pursue a \"third party\" claim for Payne's personal injuries. After the applicable one-year statute of limitations period had run on such a claim, Lee wrote Payne, informing him that there was, in Lee's opinion, no basis for a \"third party\" claim against Wood or Bower. Eventually, apparently with the services of a third attorney, Payne recovered worker's compensation benefits.\n\n\n4\nPayne then brought suit in state court against Lee for breach of contract and professional malpractice. Payne alleged that Lee had negligently failed to pursue a \"third party\" personal injury claim against Wood and Bower for their negligence in the selection of Tallent as the independent contractor for their construction project. The case was tried before a jury; however, when the jury was unable to reach a verdict, a mistrial was declared. Payne then took a voluntary nonsuit pursuant to Tennessee rules of procedure.\n\n\n5\nAfter moving to Georgia, Payne filed this diversity action in the district court, repeating the claims he had raised in state court. A trial was commenced, but after Payne had presented his case, the district court entered a directed verdict for the defendants, stating its reasons on the record and supplementing its oral decision with a written Memorandum and Order. The district court determined, viewing the evidence in the light most favorable to Payne, that there was no evidence from which a jury could conclude that Payne had established a necessary element of his claim, damages.\n\n\n6\nThe district court set out three reasons why Payne was not damaged by Lee's failure to file the action against Wood and Bower. First, while Tennessee courts have recognized that an employer must use due care in selecting a competent contractor to perform the work contemplated by a contract, they would not hold that the duty extends to the employees of the contractor. Second, even if Wood and Bower did owe Payne such a duty, a jury could not find, on the facts of this case, that the duty had been breached. Third, even if Wood had negligently hired Tallent, the injury to Payne was caused not by Tallent's inability to perform the work contemplated by the contract, but by his inattention or negligence in handling the dock section in the gusty winds that existed at the time of the accident.\n\n\n7\nOn appeal, Payne contends that the district court erred in granting the directed verdict. He argues that, under Tennessee law, an employer's duty to use due care in selecting a competent independent contractor extends to the employees of the contractor. He also claims that the district court erred in finding that there was no evidence from which a jury could conclude that Wood had been negligent in hiring Tallent, and consequently that Payne had been damaged by Lee's negligent failure to pursue the \"third party\" claim. Finally, Payne argues that even if the jury would have found that Lee's negligence did not proximately result in actual damages, he was entitled to have the jury award nominal damages because of Lee's breach of contract.\n\n\n8\nMore specifically, Payne challenges the district court's reliance on Cooper v. Metropolitan Government of Nashville, 628 S.W.2d 30 (Tenn.App.1981) (affirming summary judgment for defendant) in reaching its decision regarding the scope of an employer's duty under Tennessee law. There, a contractor's employee, who was killed by electrocution while doing tree-work, sued the government agency that had contracted out the work. While Payne correctly points out that the Tennessee court dismissed the plaintiff's \"negligent hiring of a contractor\" claim on factual, and not legal grounds, this fact alone does not necessarily support Payne's claim that Cooper supports his view of the law. In fact, as the district court recognizes in its opinion, the state court's discussion of Cooper's second cause of action suggests that Payne's view of Tennessee law is incorrect. Memorandum and Order at 4.\n\n\n9\nCooper's second cause of action was based upon another exception to the general principle that employers are not liable for the negligence of their independent contractors, the \"inherently dangerous work exception.\" The Tennessee court declined to extend to a contractor's employee the duty owed under that \"exception,\" in part, because it would be impractical to require the employer of the contractor to protect the contractor's employees. The court also noted that employees are already entitled to seek worker's compensation. As the district court points out, these reasons apply with equal force to the tort of \"negligent hiring of a contractor.\" Memorandum and Order at 5-6.\n\n\n10\nPayne also questions the district court's reliance on Knoxville Iron Co. v. Dobson, 75 Tenn. 367 (1881), by citing Powell v. Virginia Construction Co., 88 Tenn. 692, 13 S.W. 691, 692 (1890). However, Powell, in dicta, simply recognizes the general principle of liability for the negligent hiring of a contractor, and expresses no view as to whether it should be extended to protect the contractor's employee.\n\n\n11\nIn addition, Payne argues that our decision in Mooney v. Stainless, Inc., 338 F.2d 127 (6th Cir.1964), affirmatively supports his view of Tennessee law. He does so despite the district court's express refusal to rely on that case. Memorandum and Order at 4. In Mooney, our court clearly indicates that Tennessee has adopted the general principle that an employer can be held liable for negligently hiring an independent contractor. We also implicitly assume that such a claim can be raised by an employee of the contractor. However, as the district court points out, we do not address the issue, finding instead that plaintiff has failed to meet his burden of proof on the issue of negligence. We also question whether liability could be based on the facts involved in that case, where the contractor was generally competent, but caused the injury solely by his inattention or negligence. Id. at 132. Therefore, we are not persuaded that our decision in Mooney requires us to reverse the district court's opinion.\n\n\n12\nFor the foregoing reasons and for the other reasons so carefully set forth by United States District Judge R. Allen Edgar in his Memorandum and Order filed in the district court on March 27, 1988, the judgment of the district court is AFFIRMED.\n\n\n\n*\n The Honorable Avern Cohn, United States District Judge for the Eastern District of Michigan, sitting by designation\n\n\n"} -{"text": " Opinions of the United\n1998 Decisions States Court of Appeals\n for the Third Circuit\n\n\n8-10-1998\n\nJohn Hancock Insur. Co. v. Olick\nPrecedential or Non-Precedential:\n\nDocket 97-1956\n\n\n\n\nFollow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1998\n\nRecommended Citation\n\"John Hancock Insur. Co. v. Olick\" (1998). 1998 Decisions. Paper 189.\nhttp://digitalcommons.law.villanova.edu/thirdcircuit_1998/189\n\n\nThis decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova\nUniversity School of Law Digital Repository. It has been accepted for inclusion in 1998 Decisions by an authorized administrator of Villanova\nUniversity School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.\n\fFiled August 10, 1998\n\nUNITED STATES COURT OF APPEALS\nFOR THE THIRD CIRCUIT\n\nNo. 97-1956\n\nJOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY;\nJOHN HANCOCK DISTR; LARRY CARTER\n\n Appellants\n\nv.\n\nTHOMAS W. OLICK\n\nAppeal from the United States District Court\nfor the Eastern District of Pennsylvania\n(D.C. No. 96-cv-04460)\n\nSubmitted Under Third Circuit LAR 34.1(a)\nJune 4, 1998\n\nBefore: SCIRICA, NYGAARD and SEITZ, Circuit Ju dges.\n\nFiled: August 10, 1998\n\n Edward C. Mengel, Jr., Esquire\n Jane O. McCahill, Esquire\n White & Williams\n 1800 One Liberty Place\n Philadelphia, PA 19103-7395\n Attorneys for Appellants\n\f Thomas W. Olick, Pro se\n 4014 Crestview Avenue\n Easton, PA 18045\n\nOPINION OF THE COURT\n\nSEITZ, Circuit Judge.\n\nThis appeal presents the question of whether, under the\nFederal Arbitration Act, 9 U.S.C. SS 1-16 (\"the FAA\" or \"the\nAct\"), a district court has the authority, notwithstanding a\nvalid arbitration clause, to enjoin a party from pursuing\narbitration on res judicata grounds arising from both a\nprior arbitration and a prior judgment. The district court\nexercised diversity jurisdiction pursuant to 28 U.S.C.\nS 1332 as well as federal question jurisdiction under 28\nU.S.C. S 1331 based on the alleged violations of the\nsecurities laws. Because the issues raised in the context of\nthis appeal are purely legal, our standard of review is\nplenary. See Smith v. Magras, 124 F.3d 457, 460-61 (3d\nCir. 1997).\n\nI. Facts and Procedural History\n\nOn October 13, 1992, John J. Carroll and others sued\nJohn Hancock Distributors, Inc. (\"Hancock\") and eighteen\nother defendants in Carroll v. Hancock, 92-cv-5907 (E.D.\nPa. 1995). The complaint primarily alleged violations of\nseveral federal and state statutes, along with various\ncommon law fraud theories, in connection with a series of\nlimited partnership transactions. Thomas Olick (\"Olick\"), a\nformer employee of Hancock and a registered life insurance\nagent, was a named defendant in the Carroll action. Olick\nattempted to assert a cross-claim against Hancock in the\nCarroll litigation, but the district court denied the claim in\nits entirety. The case was closed on November 30, 1994.\n\nDuring the pendency of that litigation, Olick filed, on\nDecember 2, 1992, a Statement of Claim with the National\nAssociation of Securities Dealers (\"NASD\") against Hancock,\ndemanding the arbitration of disputes relating to certain\nlimited partnership transactions -- the same transactions,\n\n 2\n\faccording to Hancock, that were the subject of the Carroll\naction. The NASD, on February 28, 1995, issued an\narbitration award in favor of Olick and denied a number of\nthird party claims asserted by Hancock. The record does\nnot show that Hancock objected to the 1992 NASD\narbitration based on the existence of the then pending\nCarroll litigation.\n\nOn May 4, 1996, after the conclusion of both the Carroll\ncase and the 1992 NASD arbitration, Olick filed with the\nNASD another Statement of Claim against Hancock seeking\nthe arbitration of claims sounding in fraud,\nmisrepresentation, tortious interference with business\nrelations, slander, libel, and RICO violations. In response,\nHancock moved the arbitration panel to dismiss this claim\nbased on the res judicata effect of the prior 1992\narbitration award and the judgment rendered in the Carroll\naction. Hancock in particular argued that Olick's 1996\nStatement of Claim arose from the same factual\ncircumstances as the previous arbitration in 1992 as well\nas the prior federal judgment, and therefore principles of\nres judicata barred Olick from raising a claim that could\nhave been raised at either the prior arbitration proceeding\nor the Carroll litigation. The arbitration panel, on February\n11, 1997, denied Hancock's motion to dismiss without a\nhearing or a discussion of the merits. So far as we are\naware, that proceeding is still pending.\n\nBefore the arbitration panel had denied Hancock's motion\nto dismiss the second arbitration, Hancock filed a\ncomplaint in the district court seeking a declaration that\nthe claims raised by Olick in the 1996 arbitration were\nbarred on res judicata grounds. Hancock also filed in the\ndistrict court a motion seeking to preliminarily enjoin the\nNASD from further proceedings in resolution of the 1996\narbitration. The district court, however, denied Hancock's\nmotion and dismissed its complaint, holding that under the\nFederal Arbitration Act the arbitrator, and not the court,\ndecides preclusion issues. While the district court noted\nwhat was, in its view, an absence of third circuit case law\ndirectly on point, it found persuasive a line of cases holding\nthat courts are not to rule on the validity of various\ndefenses to arbitration. See Conticommodity Services, Inc. v.\n\n 3\n\fPhilipp & Lion, 613 F.2d 1222, 1223 (2d Cir. 1980)\n(timeliness of demand decided by arbitrator); North River\nIns. Co. v. Allstate Ins. Co., 866 F. Supp. 123, 129 (S.D.N.Y.\n1994) (res judicata decided by arbitrator).\n\nIn its order denying Hancock's motion for\nreconsideration, the district court declined to apply case\nlaw holding that courts, and not arbitrators, are to decide\nres judicata issues stemming from a prior judgment\nrendered by federal court. The district court found those\ncases distinguishable because they failed to address what it\nviewed as the \"hybrid\" situation raised -- namely, \"whether\nan arbitrator or a federal court should determine the res\njudicata effect of both a prior arbitration and a prior federal\ncourt decision on an arbitration claim.\" D. Ct. Order, Nov.\n11, 1997, at 2 (emphasis in original). Hancock now appeals\nthe district court's dismissal of its complaint and the denial\nof its motion for a preliminary injunction.\n\nII. Appellate Jurisdiction\n\nAs a preliminary matter, Olick contests this court's\njurisdiction to entertain this appeal. Section 16 of the FAA\ngoverns the appealability of district orders with respect to\narbitration and provides:\n\n (a) An appeal may be taken from--\n\n (1) an order--\n\n (A) refusing a stay of any action under sectio n 3 of\n this title,\n\n (B) denying a petition under section 4 of this title to\n order arbitration to proceed,\n\n (C) denying an application under section 206 o f this\n title to compel arbitration,\n\n (D) confirming or denying confirmation of an award\n or partial award, or\n\n (E) modifying, correcting, or vacating an award;\n\n (2) an interlocutory order granting, continuing, or\n modifying an injunction against an arbitration\n that is subject to this title; or\n\n 4\n\f (3) a final decision with respect to an arbitrat ion that\n is subject to this title.\n\n9 U.S.C. S 16(a). While identifying the district court orders\nwith respect to arbitration that are the subject of immediate\nappeal, the Act affirmatively removes appellate jurisdiction\nto review certain types of \"interlocutory\" orders:\n\n (b) Except as otherwise provided in section 1292(b ) of\n title 28, an appeal may not be taken from an\n interlocutory order--\n\n (1) granting a stay of any action under section 3 of\n this title;\n\n (2) directing arbitration to proceed under section 4 of\n this title;\n\n (3) compelling arbitration under section 206 of th is\n title; or\n\n (4) refusing to enjoin an arbitration that is subj ect to\n this title.\n\n9 U.S.C. S 16(b). The general approach to appellate\njurisdiction as set forth in the FAA is constrained; the Act\ntypically precludes appellate review of orders allowing\narbitration \"until after the arbitration process has gone\nforward.\" Stedor Enterprises, Ltd. v. Armtex, Inc., 947 F.2d\n727, 730 (4th Cir. 1991); see also David D. Siegal, Practice\nCommentary, 9 U.S.C.A. S 16, at 352 (West Supp. 1997).\nNevertheless, the FAA specifically states that any\"final\ndecision with respect to an arbitration,\" is immediately\nappealable, 9 U.S.C. S 16(a)(3), regardless of whether that\ndecision allows the arbitration process to go forward. See\nSiegal, supra, at 352. Thus, the answer to the immediate\nquestion in considering our appellate jurisdiction critically\nturns on whether the district court orders were\"final\" or\n\"interlocutory,\" and consequently subject to the\njurisdictional hurdles set forth in section 16(b). See\nAmerican Cas. Co. of Reading v. L-J, Inc., 35 F.3d 133, 136\n(4th Cir. 1996).\n\nCongress did not define a \"final decision\" for purposes of\nthis section, and therefore we look to the prior, settled,\nusage of that term. A final decision, as that term is\n\n 5\n\fcommonly understood for purposes of appellate\njurisdiction, refers to an order that \"ends the litigation on\nthe merits and leaves nothing for the court to do but\nexecute the judgment.\" Oritz v. Doge, 126 F.3d 545, 547 (3d\nCir. 1997) (quoting Catlin v. United States, 324 U.S. 229,\n233 (1945)). Within the context of orders relating to\narbitration, the decisive issue is \"whether arbitrability was\nthe sole issue presented in the action or whether the issue\nof arbitrability originated as part of an action raising other\nclaims for relief.\" American Cas., 35 F.3d at 136; see also\nF.C. Schaffer & Assoc. v. Demech Contractors, Ltd. , 101\nF.3d 40, 41 (5th Cir. 1996). If the arbitration issue arises\nin what is known as an \"embedded proceeding\"-- that is,\nembedded in some broader context raising issues or claims\nfor relief outside the arbitration context -- then the district\ncourt order addressing arbitration cannot be considered a\nfinal order subject to immediate appeal under section\n16(a)(3) and the appellant must search for another avenue\nof appellate jurisdiction under section 16(a). See Siegal,\nsupra, at 352. Conversely, an appeal from an \"independent\nproceeding\" raising solely arbitration issues with no other\nclaims for relief falls under section 16(a)(3) as an appeal\nfrom a final order because the litigation before the district\nhas effectively ended on the merits. Id. at 352-53. It\nmatters not whether the district court decision favors\narbitration or litigation. Id.\n\nIn this case, Hancock sought both legal and injunctive\navenues for relief: a judgment declaring Olick barred from\narbitration under the doctrine of res judicata, and an\ninjunction halting the NASD from entertaining Olick's\ndemand for arbitration. At first blush, it may be argued, as\nOlick seems to do, that Hancock's motion for a preliminary\ninjunction is embedded within the broader complaint\nseeking a declaratory judgment, and hence the district\ncourt's denial of that injunction is not appealable under\nsection 16(a)(3) or section 16(b)(4). Yet, there was only one\nissue before the district court, and that was whether Olick\nmight properly seek arbitration of his claims against\nHancock. When the district court decided that single issue\nin favor of arbitration, the litigation effectively ended,\nleaving nothing for the district court to do but enter\njudgment. Accordingly, this independent proceeding before\n\n 6\n\fthe district concluded in a final order and is therefore\nappealable under 9 U.S.C. S 16(a)(3).\n\nIII. The Federal Arbitration Act\n\nHaving established our jurisdiction, we now turn to the\nmerits of this appeal. Because this case raises questions\nabout the scope of the duty to honor an arbitration\nagreement, our analysis must begin with the Federal\nArbitration Act. The FAA federalizes arbitration law and\n\"creates a body of federal substantive law establishing and\nregulating the duty to honor an agreement to arbitrate\n. . . .\" Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp.,\n460 U.S. 1, 25 n. 32 (1983). The operative language in the\nAct, as provided in section two, states that:\n\n A written provision in any maritime transaction or a\n contract evidencing a transaction involving commerce\n to settle by arbitration a controversy thereafter arising\n out of such contract or transaction, or the refusal to\n perform the whole or any part thereof, or an agreement\n in writing to submit to arbitration an existing\n controversy arising out of such a contract, transaction,\n or refusal, shall be valid, irrevocable, and enforceable,\n save upon such grounds as exist at law or in equity for\n the revocation of any contract.\n\n9 U.S.C. S 2. The parties agree that the arbitration\nagreement at issue falls within the ambit of the FAA.\n\nBecause the FAA enforces arbitration agreements as a\nmatter of federal law, the statute authorizes district court\ninvolvement in the arbitration process primarily in two\nways. See Local 103 of the Int'l Union of Elec., Radio and\nMach. Workers v. RCA Corp., 516 F.2d 1336, 1339 (3d Cir.\n1975). One such function of the court arises when a party\nresists arbitration under an existing arbitration clause. In\nthis case, the FAA allows a district court to compel, or\nenjoin, arbitration as the circumstances may dictate. See 9\nU.S.C. SS 3, 4; Painewebber v. Hartmann , 921 F.2d 507,\n511 (3d Cir. 1990). The other basis of court involvement is\nfound when enforcement of an arbitration award is sought.\nHere, the statute authorizes the district court to confirm,\n\n 7\n\fvacate, or modify the award under a narrow scope of\njudicial review. 9 U.S.C. SS 9-11.\n\nBeyond these two areas, the statute does not authorize\ncourt involvement in enforcing arbitration and we have\nconsistently admonished the courts \"to exercise the utmost\nrestraint and to tread gingerly before intruding upon the\narbitral process.\" Lewis v. American Fed'n of State, County\nand Municipal Employees, 407 F.2d 1185, 1191 (3d Cir.\n1969); see also Local 103 of the Int'l Union of Elec., Radio\nand Mach. Workers v. RCA Corp., 516 F.2d 1336, 1339 (3d\nCir. 1975). There is, of course, good reason for this\nrestrained approach. Arbitration is, above all, a matter of\ncontract and courts must respect the parties' bargained-for\nmethod of dispute resolution. See Local 1545, United Mine\nWorkers Of Am., 876 F.2d 1288, 1293 (7th Cir. 1989).\nIndeed, arbitration most often arises in areas where courts\nare at a significant experiential disadvantage and\narbitrators, who understand the \"language and workings of\nthe shop,\" may best serve the interest of the parties. See\nUnited Steelworkers of Am. v. Enterprise Wheel and Car\nCorp., 363 U.S. 593, 596 (1960); RCA Corp. , 516 F.2d at\n1340. Thus, there is a strong policy in favor of arbitration\nand courts must resist the attempt to intrude upon\narbitration proceedings where the statute does not explicitly\nauthorize court involvement.\n\nTurning to the district court's authority to enjoin\narbitration, which is the heart of this dispute, we again\nexplore the nature of the district court's involvement in the\narbitration process. Here, the FAA states that a court may\nissue an order compelling arbitration only \"upon being\nsatisfied that the making of the agreement for arbitration or\nthe failure to comply therewith is not in issue.\" 9 U.S.C.\nS 4. Starting with the familiar proposition that arbitration is\na creature of contract, courts have long since drawn the\nconclusion that, as a matter of contract, no party can be\nforced to arbitrate an issue unless that party has entered\ninto an agreement to do so. See AT&T Technologies v.\nCommunication Workers of Am., 475 U.S. 643, 648 (1986).\nBecause the competence of an arbitrator stems exclusively\nfrom contract, a district court may only order, or enjoin,\narbitration based on the agreement to arbitrate itself. Id.\n\n 8\n\fThis includes, as a matter of course, an exploration into\nwhether the parties entered into a valid arbitration\nagreement in the first instance, and whether the specific\ndispute raised falls within the scope of that agreement. See\nIn re Prudential Ins. Co. of Am. Sales Practice Litig., 133\nF.3d 225, 228 (3d Cir. 1998).\n\nThus, the threshold questions a district court must\nanswer before compelling or enjoining arbitration are these:\n(1) Did the parties seeking or resisting arbitration enter into\na valid arbitration agreement? (2) Does the dispute between\nthose parties fall within the language of the arbitration\nagreement? See In re Prudential, 133 F.3d at 128, 133;\nPainewebber, 921 F.2d at 511. Absent a compelling federal\npolicy to the contrary, see Shearson/American Express Inc.\nv. McMahon, 482 U.S. 220 (1989), the sina qua non of\narbitrability is simply stated: that a valid arbitration exists\nand the dispute falls within the contours of that agreement.\nIn re Prudential, 133 F.3d at 128. As we have previously\nconcluded, district courts need only \"engage in a limited\nreview to ensure that the dispute is arbitrable-- i.e., that\na valid agreement to arbitrate exists between the parties\nand that the specific dispute falls within the substantive\nscope of that agreement.\" Painewebber, 921 F.2d at 511. In\nconducting this limited review, the court must apply\nordinary contractual principles, with a healthy regard for\nthe strong federal policy in favor of arbitration. Moses H.\nCone, 460 U.S. at 24; In re Prudential, 133 F.3d at 128.\n\nA. The Res Judicata Dispute Between the Parties\n\nAs the district court recognized, this case presents\nsomewhat of a \"hybrid\" situation in that Hancock's\nobjection to arbitrating Olick's claims stems from both a\nprior arbitration and a prior federal judgment. Apparently,\nno case to date has addressed this precise factual complex,\nand we will analyze each component of Hancock's position\nin turn.\n\n1. Res Judicata Based on a Prior Federal Judgment\n\nNotwithstanding the analysis discussed above, many\nfederal courts have held as a matter of law that claims of\n\n 9\n\fres judicata based on a prior federal judgment must be\ndecided by the district court before compelling or enjoining\narbitration. See, e.g., In re Y&A Group Sec. Litig., 38 F.3d\n380, 382 (8th Cir. 1994); Kelly v. Merrill Lynch, Pierce,\nFenner & Smith, Inc., 985 F.2d 1067, 1069 (11th Cir. 1993);\nMiller Brewing Co. v. Forth Worth Distrib. Co., 781 F.2d 794,\n499 (5th Cir. 1986); see also Miller v. Runyon , 77 F.3d 189,\n194 (7th Cir. 1996) (collecting other cases). These courts\ntypically reason that federal courts must protect the finality\nand integrity of prior judgments. See Kelly, 985 F.2d at\n1069; In re Y&A, 38 F.3d at 382. As succinctly stated by\nthe Eleventh Circuit Court of Appeals, federal \"[c]ourts\nshould not have to stand by while parties re-assert claims\nthat have already been resolved.\" Kelly, 985 F.2d at 1069.\nBecause the FAA contemplates that an arbitration award\nmay be enforced by judgment, see 9 U.S.C.S 9, these\ncourts would allow a district court to enjoin arbitration if\nthe claim would be precluded under ordinary rules of res\njudicata. Miller Brewing Co., 781 F.2d at 499.\n\nNot all courts, however, have been persuaded by such\nlogic. Most notably, the Second Circuit Court of Appeals\nhas held that a collateral estoppel defense to arbitration\nbased on a prior federal judgment should be decided by an\narbitrator because it is a merit-based defense to arbitration.\nSee United States Fire Ins. Co. v. National Gypsum Co., 101\nF.3d 813, 817 (2d Cir. 1996). Whether such a defense is\nitself arbitrable, like any other ambiguity in the scope of\narbitration, must stem from the language of the arbitration\nagreement itself because arbitration is a matter of contract\nand a \"defense based on the issue preclusive effect of the\nprior judgment is part of the dispute on the merits.\" Id.\nThus, the court reasoned, unless it may be said\"with\npositive assurance\" that the parties intended to place the\ncollateral estoppel issue with a court, the viability of that\naffirmative defense must be decided by an arbitrator. Id.\n\nThese competing considerations present the court with a\nhigh order challenge. On the one hand, a realistic concern\nfor the finality and integrity of judgments would arise if\nparties were free to ignore federal court decisions that have\nconclusively settled claims or issues now sought to be\narbitrated. Yet, arbitration is a matter of contract and the\n\n 10\n\fFAA only authorizes a \"limited review\" of the parties' intent\nbefore compelling or enjoining arbitration. See\nPainewebber, 921 F.2d at 511. The issue is thoughtfully\ndiscussed in Miller v. Runyon, 77 F.3d 189, 193-94 (7th Cir.\n1996), but that court fell short of providing a\ncomprehensive answer. In the final analysis, we conclude\nthat a decent respect for a precedent of this court dictates\nthat we resolve the issue in favor of district court\njurisdiction to decide the res judicata defense as it relates\nto a prior judgment. Thus, we stated in Telephone Workers\nUnion of New Jersey v. New Jersey Bell Tel. Co., 584 F.2d\n31 (3d Cir. 1978):\n\n The district court did not reach the merits of the\n Board of Arbitrators' interpretation of the Collective\n Bargaining Agreement. It turned, first, to the judgment\n preclusion effect of the Consent Decree. This was the\n proper course. When a federal court is presented with\n the contention that a prior federal judgment\n determined issues now sought to be relitigated in an\n arbitral forum it must first determine the effect of the\n judgment. This is so whether the question arises in an\n action to compel arbitration or, as here, in an action to\n enforce a disputed award. The federal policy favoring\n forum selection clauses, based in part on the\n institutional interest of federal courts in avoiding\n litigation, does not come into play until the courtfirst\n determines whether prior completed litigation has\n already finally determined all issues.\n\nId. at 32-33 (citation omitted). In that case, an aggrieved\nemployee sought arbitration of a matter that had been\nconclusively settled by a consent decree entered by a\nfederal district court. Arbitration had in fact rendered a\nresult that conflicted with the consent decree and the\ndistrict court, in considering a motion to enforce the\narbitrator's award, turned first to the issue preclusive effect\nof the consent decree. We affirmed on the principle that a\ndistrict court must first determine the effect of a prior\nfederal judgment when faced with the possibility of\nrelitigating issues already settled by that judgment.\nMoreover, we explicitly stated that this was the correct\ncourse regardless of whether parties seek to compel\narbitration or confirm a disputed award.\n\n 11\n\fThe district court did not apply our analysis in New\nJersey Bell to this case because of the unique\"hybrid\" res\njudicata objection raised by Hancock -- \"hybrid\" in the\nsense that Hancock's claim of preclusion stems from both\na prior judgment and a prior arbitration. We find no\nprincipled reason underlying this distinction. When a party\nresisting arbitration bases its claim of res judicata not only\non a prior judgment but also on the existence of a prior\narbitration, the analysis must focus on each aspect of the\nclaim; hybrid facts do not call for a hybrid analysis. To be\nsure, there may be a number of factual grounds to\ndistinguish our holding in New Jersey Bell, but the legal\nprinciple announced in that case directly controls the issue\npresented before the district court -- in particular, whether\nan arbitrator or a court must decide the preclusive effect of\na prior federal judgment. Given the broadly worded\nlanguage in that case, many courts have read New Jersey\nBell, as do we, for the proposition the federal courts must\nintervene in the arbitration process when faced with res\njudicata objections stemming from a prior federal judgment.\nSee Aircraft Braking Systems Corp. v. Local 856, Int'l Union,\nUnited Auto., Aerospace and Agric. Implement Workers , 97\nF.3d 155, 159 (6th Cir. 1996); John Morrell & Co. v. Local\nUnion 304a of the United Food and Commercial Workers ,\n913 F.2d 544, 562 (8th Cir. 1990); American Trade\nDispatchers Assoc. v. Burlington N. R.R., 784 F. Supp. 899,\n903 (D.D.C. 1992). Thus, whether we honor our internal\noperating procedure governing the application of this\ncourt's precedent, see 3d Cir. IOP Chapter 9.1. (\"[T]he\nholding of a panel in a reported opinion is binding on\nsubsequent panels.\") (emphasis added), or apply the\npertinent language in New Jersey Bell, we conclude that\nthe district court in this case should have first decided the\npreclusive effect of the prior federal judgment as it relates\nto Olick's demand for arbitration before the NASD.\n\n2. Res Judicata Based on the Prior Arbitration\n\nThe question remains, however, whether the district\ncourt, under the FAA, may consider the preclusive effect of\nthe prior NASD arbitration as a basis for enjoining the\ncurrent NASD proceeding. We now turn to that issue.\n\n 12\n\fAs stated above, the judicial inquiry before compelling or\nenjoining arbitration is narrow, and the FAA authorizes the\ndistrict court to explore only two threshold questions in\nconsidering a demand for arbitration: (1) Did the parties\nseeking or resisting arbitration enter into a valid arbitration\nagreement? (2) Does the dispute between those parties fall\nwithin the language of the arbitration agreement? See In re\nPrudential, 133 F.3d at 128, 133; Painewebber, 921 F.2d at\n511. While we have previously held that claims of res\njudicata based on a prior federal judgment are an\nexception, see Telephone Workers Union of New Jersey v.\nNew Jersey Bell Tel., 584 F.2d 31-32 (3d Cir. 1978), res\njudicata objections based on a prior arbitration do not\nimplicate the institutional concerns underlying that\nholding. Therefore, the proper analytical inquiry mandated\nunder the FAA is to focus on both the existence of a valid\narbitration agreement and the nature of that agreement as\nit relates to the parties' current dispute.\n\nWe have previously held, for example, that where there is\na contractual provision barring the re-arbitration of similar\ndisputes between parties, the arbitrator is to decide the\npreclusionary effect, if any, of a previous arbitration. See\nLocal 103 of the International Union of Elec., Radio, and\nMach. Workers v. RCA Corp., 516 F.2d 1336, 1340 (3d Cir.\n1975). The reasoning underlying this approach is that a\nprovision regarding the finality of arbitration awards is a\ncreature of contract and, like any other contractual\nprovision that is the subject of dispute, it is within the\nprovince of arbitration unless it may be said \"with positive\nassurance\" that the parties sought to have the matter\ndecided by a court. Id. Although the contractual provision\nbefore the RCA court specifically stated that \"in no event\n. . . shall the same question or issue be the subject of\narbitration more than once,\" this court approved the same\nreasoning when faced with a broader agreement between\nparties that arbitration awards are \"final and binding.\" Id.\nat 1341; see also Local 616, International Union of Elec.,\nRadio, and Mach. Workers v. Byrd Plastics, Inc., 428 F.2d\n23, 25 (3d Cir. 1970).\n\nThe parties' arbitration agreement in this case may be\nfound in the \"Uniform Application for Securities Industry\n\n 13\n\fRegistration,\" (\"Form U-4\") signed by Olick, which submits\nto the NASD \"any dispute, claim, or controversy that may\narise between me and my firm, or a customer, or any other\nperson, that is required to be arbitrated under the rules,\nconstitutions, or by-laws of the organizations with which I\nregistered.\" Form U-4 P 5. The NASD Code of Arbitration\nProcedure provides for the \"arbitration of any dispute,\nclaim, or controversy arising out of or in connection with\nthe business of any member of the Association, with the\nexception of disputes involving the insurance business of\nany member which is also an insurance company . . . .\"\nNASD Code of Arbitration Procedure P 3701. The parties do\nnot contest the validity of the arbitration agreement here,\nnor do they dispute that Olick's claims raised before the\nNASD properly fall within the scope of the arbitration\nclause. Indeed, both Olick and Hancock explicitly agreed to\n\"submit the present matter in controversy, as set forth in\nthe . . . statement of claim, answers, cross claims and all\nrelated counterclaims and/or third party claims which may\nbe asserted, to arbitration . . . .\" NASD Uniform Submission\nAgreement P 1, Def.'s App. at 1. The only remaining\nquestion, therefore, is whether the parties intended the\ncurrent controversy -- whether the prior NASD award\nprecludes Olick from asserting his claims -- to be\narbitrated as well.\n\nThe arbitration procedure agreed to here, as incorporated\nin the arbitration agreement, states that all arbitration\nawards are to be \"final and not subject to review or appeal.\"\nNASD Code of Arbitration Procedure P 10330(b). Moreover,\nthe parties agreed that \"arbitrators shall be empowered to\ninterpret and determine the applicability of all provisions\nunder this Code and to take appropriate action to obtain\ncompliance with any ruling by the arbitrator(s).\" Id.\nP 10324. The NASD Code of Arbitration Procedure further\nprovides that \"[s]uch interpretations and actions to obtain\ncompliance shall be final and binding upon the parties.\" Id.\n\nGiven this language, we must conclude that Hancock's\nres judicata objection based on the prior arbitration is an\nissue to be arbitrated and is not to be decided by the\ncourts. The procedural rules quoted above no doubt\ndemonstrates the parties' intentional adherence to a\n\n 14\n\fbinding principle of finality similar to res judicata as\napplied to arbitration awards rendered by the NASD. It is\nequally quite clear from the arbitration procedure adopted\nhere that the parties intended the NASD, and not the\ndistrict court, to determine the nature and extent, if any, of\nthat finality. Accordingly, the district court correctly\ndeclined to decide Hancock's res judicata objection based\non the prior NASD award.\n\nIV. Conclusions\n\nFor the reasons stated in this opinion, we will reverse the\norder of the district court dismissing the complaint and\ndenying the preliminary injunction to the extent that it\nprovides that Hancock's res judicata defense based on the\nprior judgment is an issue for resolution by the arbitrator.\nWe, of course, express no opinion on the merits of that\naffirmative defense. To the extent the order of the district\ncourt dismissed Hancock's res judicata defense based on\nthe prior arbitration, we will affirm. Accordingly, this case\nwill be remanded for such further proceedings as may be\nappropriate.\n\nA True Copy:\nTeste:\n\n Clerk of the United States Court of Appeals\n for the Third Circuit\n\n 15\n\f"} -{"text": "\n\n\n\u00a0\nIN THE\nTENTH COURT OF APPEALS\n\n\n\n\n\n\n\n\n\n\n\u00a0\n\nNo. 10-08-00314-CR\n\u00a0\nVictor Antonio Martinez,\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Appellant\n\u00a0v.\n\u00a0\nThe State of Texas,\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Appellee\n\u00a0\n\u00a0\n\u00a0\n\nFrom the 40th District Court\nEllis County, Texas\nTrial Court No. 28403CR\n\u00a0\n\nMEMORANDUM\u00a0 Opinion\n\n\u00a0\nIn 2005, Appellant was adjudicated guilty of\naggravated sexual assault of a child and received a ten-year sentence.\u00a0 The\njudgment adjudicating guilt states that he was credited thirty-one days for\ntime served.\u00a0 He now apparently attempts to appeal the denial of an article\n11.07 habeas claim for reduction of his sentence for jail time credit and his\nfailed attempt to obtain free copies of documents relating to his claim for\nreduction.\nThis court has jurisdiction over criminal appeals\nonly when expressly granted by law.\u00a0 Everett v. State, 91 S.W.3d\n386, 386 (Tex. App.\u2014Waco 2002, no pet.).\u00a0 No statute vests this court with\njurisdiction over an appeal from an order denying a request for a free copy of\nthe trial record when such a request is not presented in conjunction with a\ntimely filed direct appeal.\u00a0 Id.; see Self v. State, 122\nS.W.3d 294, 294-95 (Tex. App.\u2014Eastland 2003, no pet.).\u00a0 Furthermore, an\nintermediate court of appeals has no jurisdiction over post-conviction writs of\nhabeas corpus in felony cases.\u00a0 Self, 122 S.W.3d at 295 (citing Tex. Code Crim. Proc. Ann. art. 11.07).\n\u00a0\nClegg v. State, 214 S.W.3d 671 (Tex. App.\u2014Waco 2007, no pet.).\nWe notified Appellant that unless he showed grounds for continuing his\nappeal, we might dismiss it for want of jurisdiction. \u00a0Appellant has filed a response,\nbut it does not show that we have jurisdiction.\u00a0 Accordingly, we dismiss this appeal\nfor want of jurisdiction.\nPER CURIAM\n\u00a0\n\u00a0\nBefore Chief Justice\nGray,\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Justice\nVance, and\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Justice Reyna\nAppeal dismissed \nOpinion delivered and filed\nOctober 29, 2008\nDo not publish\n[CR25]\n\n\n\n\n\u00a0\n\n\ning defendants. \nThus, the summary judgment is interlocutory and not appealable. Accordingly, we grant the\nhospital\u2019s motion and dismiss the appeal for want of jurisdiction.\n\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0PER CURIAM\n\nBefore Chief Justice Davis,\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Justice Cummings, and\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Justice Vance\nDismissed for want of jurisdiction\nOpinion delivered and filed April 1, 1998\nDo not publish\n"} -{"text": "\n242 Md. 240 (1966)\n218 A.2d 684\nHAMILTON\nv.\nHAMILTON\n[No. 190, September Term, 1965.]\nCourt of Appeals of Maryland.\nDecided April 19, 1966.\nMotion for rehearing filed May 18, 1966.\nDenied May 26, 1966.\nCertiorari denied October 24, 1966.\nThe cause was argued before PRESCOTT, C.J., and HORNEY, MARBURY, OPPENHEIMER and BARNES, JJ.\nMarker J. Lovell, with whom was J. Richard Wilkins on the brief, for the appellant.\n*242 Robert J. Cooke for the appellee.\nCertiorari denied, Supreme Court of the United States, October 24, 1966.\nBARNES, J., delivered the opinion of the Court.\nThe question on this appeal is whether the Chancellor abused his discretion in denying the motion of Mary C. Hamilton (the appellant) to set aside a decree of divorce a vinculo matrimonii. On January 22, 1965 the Circuit Court for Carroll County awarded C. Harold Hamilton (the appellee) a decree of divorce on the ground of constructive desertion. The appellant was served with summons in the divorce action. She consulted counsel in regard to the divorce but did not retain his services. She answered the bill for divorce by a document drawn up by herself in proper person.\nThe case was originally set for a hearing on November 11, 1964 but was later postponed to January 22, 1965. The appellant had notice of when the hearing was to be held and she expressly stated in letters to the appellee dated November 16, 1964 and January 18, 1965, copies of which she sent to the Circuit Court, that she would not appear at the hearing to contest the proceedings. She stated in her letter of November 16th: \"I will let the giving and getting of a Divorce A Vinculo * * * be up to the conscience of the Court.\"\nAfter Mrs. Hamilton failed to appear at the proceedings for divorce and a decree was entered against her, she retained counsel and within a thirty day period \u0097 before the decree became enrolled \u0097 she filed a motion to set it aside pursuant to Maryland Rule 625. She contends that the decree should be set aside because she was not represented by counsel and was not fully apprised of the nature of the hearing. She did not know that she could be precluded from contesting the divorce which was granted after she did not appear at the proceedings. The appellant alleges, moreover, that she possesses a meritorious defense to her husband's claim of constructive desertion.\nIn Ryan v. Johnson, 220 Md. 70, 150 A.2d 906 (1959) we quoted with approval from Clarke Baridon v. Union Co., 218 Md. 480, 483, 147 A.2d 221, 223 (1958) where Judge Hammond, for the Court, said:\n\"After the judgment properly was entered, the question of whether it should or should not be vacated in *243 whole or in part was within the sound discretion of the trial court for the ensuing thirty days. The decisive point no longer was whether there existed a genuine dispute as to a material fact, but rather whether the court was satisfied that there had been shown a reasonable indication of a meritorious defense or other equitable circumstances that would justify striking the judgment \u0097 that is, whether the court entertained a reasonable doubt that justice had not been done.\"\nWhen a motion is made to set aside an unenrolled decree the trial court possesses an extremely broad power of revision and must exercise its discretion liberally \"lest technicality triumph over justice.\" Eshelman Motors v. Scheftel, 231 Md. 300, 189 A.2d 818 (1963). The trial court's discretion is not restricted in regard to setting aside an unenrolled decree as it is where the decree has become enrolled, after which it may then only be revised on grounds of fraud, mistake or irregularity. Maryland Rule 625a. In the case of an enrolled decree even a possible error in the entry of a summary judgment may not constitute such a mistake as would warrant setting it aside. Rhodes Co. v. Blue Ridge Co., 218 Md. 329, 146 A.2d 771 (1959). See Tasea Investment Corp. v. Dale, 222 Md. 474, 160 A.2d 920 (1960) and Newark Trust Co. v. Trimble, 215 Md. 502, 138 A.2d 919 (1958).\nWhile there is a strong public policy in favor of sustaining the finality of divorce decrees (Leatherbury v. Leatherbury, 233 Md. 344, 196 A.2d 883 (1964)), this policy would not operate in regard to an unenrolled decree before parties could have changed their position and relied on it to their detriment. Cf. Pryor v. Pryor, 240 Md. 224, 213 A.2d 545 (1965) and cases cited therein.\nWe hold that the Chancellor did not abuse his discretion in refusing to set aside the decree of divorce. No colorable meritorious defense has been interposed by Mrs. Hamilton.\nAt the original hearing for divorce Mr. Hamilton testified that his wife segregated him from the rest of the family, that he lived in the corner of the attic of his home, and while he was allowed to eat dinner with his wife and children, the children were not allowed to speak to him, nor could they pass *244 food to him at the table. His children were not permitted to associate with their father at all.\nMrs. Hamilton ordered her husband out of the house on numerous occasions and had made several \"scenes\" in the street. On one occasion she tore his clothes from him as they were leaving church. During the course of many altercations between the Hamiltons the wife would physically assault her husband. In the spring of 1962, Mrs. Hamilton rented an apartment for her husband and left a note instructing him to leave the home. Mr. Hamilton ignored the message and continued to live in the attic, usually coming down only to take his meals.\nA trial magistrate had committed Mrs. Hamilton to three weeks observation at Springfield State Hospital after her husband had filed a complaint for disorderly conduct against her. On June 22, 1962 Mr. Hamilton left his home and took his minor children with him when he learned that his wife was about to be released from the hospital. He possessed a court order granting him custody of the children. Mr. Hamilton's testimony was corroborated by that of his daughter, Mildred Ann Hamilton.\nApproximately two and one half years after their separation Mr. Hamilton filed suit for divorce a vinculo matrimonii. The Hamiltons' minor children are presently residing in foster homes. Their oldest daughter lives with Mrs. Hamilton. Mr. Hamilton attempted to resolve his differences with his wife during the first few months of their separation; however, these attempts were not successful.\nOn the basis of Mr. Hamilton's testimony the Chancellor was clearly justified in finding that the misconduct of his wife rendered a continuation of the marital relationship unbearable, and that Mr. Hamilton could not continue to live with his wife without the loss of his \"health, safety and self respect.\" See Bryce v. Bryce, 229 Md. 16, 181 A.2d 455 (1962); Scheinin v. Scheinin, 200 Md. 282, 89 A.2d 609 (1952); Reicher v. Reicher, 196 Md. 494, 77 A.2d 7 (1950); Eberwein v. Eberwein, 193 Md. 95, 65 A.2d 792 (1949). Under the circumstances Mr. Hamilton was justified in leaving his wife since her actions clearly evidenced the intention that the marriage relation no longer exist. See Applegarth v. Applegarth, 239 *245 Md. 92, 99, 210 A.2d 362, 367 (1965) and cases cited therein. The Chancellor could have found that no reasonable hope or expectation of a reconciliation existed.\nIn her motion to set aside the divorce decree Mrs. Hamilton does not refute any of the testimony presented by her husband. She claims, as a meritorious defense, that after the birth of their tenth child the Hamiltons mutually agreed not to cohabit. She questions, moreover, the legal sufficiency of the corroboration of her husband's testimony.\nThe sexual abstinence of the Hamiltons for a period prior to June 22, 1962 did not amount to a voluntary separation since they were not living separately and apart at that time. Matysek v. Matysek, 212 Md. 44, 128 A.2d 627 (1957); Beck v. Beck, 180 Md. 321, 24 A.2d 295 (1942). The agreement to forego sexual relations is not apposite to this case since the gravamen of Mr. Hamilton's claim of constructive desertion is based on the generally abusive misconduct of his wife and not on her refusal to have marital relations with him.\nIn regard to the corroboration of Mr. Hamilton's testimony, we find that it was legally sufficient. Mildred Ann Hamilton's testimony supported that of her father on all the essential elements of his case.\nOrder affirmed, with costs.\n"} -{"text": "\n592 So.2d 821 (1991)\nSTATE of Louisiana\nv.\nKevin T. JOHNSON.\nNos. 91-KA-473, 91-KA-474.\nCourt of Appeal of Louisiana, Fifth Circuit.\nDecember 30, 1991.\n*822 Dorothy Pendergast, Asst. Dist. Atty., Gretna, for plaintiff/appellee.\nJohn D. Rawls, Indigent Defender Bd., Gretna, for defendant/appellant.\nBefore BOWES, GAUDIN and DUFRESNE, JJ.\nBOWES, Judge.\nThe defendant, Kevin T. Johnson, appeals the revocation of his probation for failure to comply with the conditions of probation ordered by the sentencing judge. Initially, we note that the defendant has no right to appeal his probation revocations. However, in the interest of judicial economy, this Court has the discretion to consider the defendant's appeals as an application for supervisory writs. State v. Davis, 562 So.2d 936 (La.App. 5 Cir.1990).\nThe defendant was charged with theft of property worth $1,000.00 in violation of LSA-R.S. 14:67 by bill of information No. 89-0414 and with two counts of forgery in violation of LSA-R.S. 14:72 by bill of information No. 89-1339.\nThe defendant subsequently pled guilty to the theft charge and one count of forgery. The State dismissed the remaining forgery count. The defendant was sentenced to three years at hard labor, suspended, and two years active probation with conditions on each of the two convictions. Those sentences were ordered to run concurrently.\nOn August 24, 1990, the State filed a rule to revoke the defendant's probation in each of the two cases. The trial court heard the rules and ordered the defendant's probation revoked for failure to comply with the conditions imposed and ordered the suspended sentences executed, with credit for time served. The defendant filed motions to appeal the probation revocations, and the trial court granted the motions. This Court ordered the cases consolidated for review.\nWhile LSA-C.Cr.P. art. 920 provides that a defendant in a criminal proceeding is entitled to an error patent review on appeal, there is no specific provision to provide such a review when a defendant applies for a supervisory writ. Nevertheless, this Court has previously conducted error patent reviews on writ applications challenging probation revocations. State v. Forest, 571 So.2d 893 (La.App. 5 Cir.1990); State v. Davis, supra.\nUpon conducting an error patent review, we note that there is a procedural defect in the institution of the revocation proceedings which mandates setting aside the probation revocations.\nIn State v. Forest, supra at 895, we stated:\nThe initial step in a probation revocation proceeding is either the issuance of a warrant for the arrest of the defendant for violation of any of the conditions or *823 the issuance of a summons instructing the defendant to appear and answer a charge of violation or threatened violation. C.Cr.P. Art. 899A. According to C.Cr.P. Art. 202, a warrant must be supported by an affidavit from a complainant and is improperly issued if it is not. C.Cr.P. Art. 385 provides that an affidavit must be executed under oath. C.Cr.P. Art. 209 permits the use of a summons instead of a warrant, provided the requirements of C.Cr.P. Art. 202 are met. Thus, a summons which lacks a supporting affidavit is improperly issued and cannot be used to institute a proceeding to revoke probation. [citations omitted].\nIn each of the two cases now under consideration, the rule to initiate the revocation proceedings was filed by the defendant's probation officer. Although those rules alleged specific violations of probationary conditions, neither rule was supported by an affidavit or executed under oath. Therefore, the defendant's probation revocations were improperly instituted and must be annulled and set aside.\nBecause we find that the revocation proceedings must be set aside, we need not address defendant's allegations that the trial court erred in revoking his probation for failure to comply with the conditions imposed.\nFor the above discussed reasons, the probation revocations of defendant are annulled and set aside and the case is remanded for further proceedings.\nPROBATION REVOCATIONS ANNULLED, SET ASIDE AND CASE REMANDED.\nGAUDIN, J., concurs in the decree.\nGAUDIN, Judge, concurring.\nI concur in the foregoing opinion because the summons was not properly supported. However, there is nothing preventing the state from instituting another revocation proceeding.\n"} -{"text": " United States Court of Appeals\n For the Eighth Circuit\n ___________________________\n\n No. 18-2655\n ___________________________\n\n Winfred G. Beasley\n\n lllllllllllllllllllllPlaintiff - Appellant\n\n v.\n\n Warren Unilube, Inc.\n\n lllllllllllllllllllllDefendant - Appellee\n ____________\n\n Appeal from United States District Court\n for the Eastern District of Arkansas - Jonesboro\n ____________\n\n Submitted: June 12, 2019\n Filed: August 9, 2019\n ____________\n\nBefore GRUENDER, STRAS, and KOBES, Circuit Judges.\n ____________\n\nKOBES, Circuit Judge.\n\n Winfred Beasley, an African American, claims that Warren Unilube, Inc.\n(Warren) fired him because of his race in violation of Title VII of the Civil Rights Act\n\fof 1964, 42 U.S.C. '' 2000e to 2000e-17, and 42 U.S.C. ' 1981. The district court1\ngranted Warren\u2019s motion for summary judgment. We affirm.\n\n I.\n\n Warren produces motor oil and other automotive lubricants. Beasley started\nworking as the Quality Assurance Manager at Warren in October 2012. He was\ngenerally responsible for creating and implementing systems to safeguard the quality\nof Warren\u2019s products. Beasley\u2019s primary job was to ensure that all products went into\nthe correct bottles and boxes with appropriate labeling and caps. He supervised\nseveral quality inspectors who would conduct regular checks on Warren\u2019s assembly\nlines to detect problems. He was also responsible for troubleshooting, containing,\nand correcting any issues that developed. Finally, Beasley was required to handle the\nannual audit of Warren\u2019s quality control systems by the International Standards\nOrganization (ISO).\n\n Beasley was not the only one at Warren responsible for product quality. The\nLab Manager, Ben Heater, and his assistants verified that the oil (or other product)\nmet appropriate specifications. Maintenance personnel calibrated the equipment at\nthe plant. The transportation department ensured that products were delivered on\ntime and not damaged in transit. And although the Operations Manager\u2014who for\nmuch of Beasley\u2019s tenure was Rusty Brown\u2014was primarily focused on production\nefficiency, he also impacted product quality since Beasley relied on Brown\u2019s team to\nimplement many of his recommendations.\n\n Up to this point the parties agree. But they part ways when it comes to the\ncircumstances surrounding Beasley\u2019s termination. Warren alleges that multiple\nfactors figured into this decision: a series of customer complaints, Beasley\u2019s poor\n\n\n 1\n The Honorable D.P. Marshall, Jr., United States District Judge for the\nEastern District of Arkansas.\n -2-\n\fshowing during the annual ISO audit, and concerns about his organizational skills.\nBeasley disputes much of this. Because this appeal arises in the context of a motion\nfor summary judgment, we construe the facts in a light most favorable to him.\nTorgerson v. City of Rochester, 643 F.3d 1031, 1043 (8th Cir. 2011) (en banc).\nBeasley \u201cmust do more than simply show that there is some metaphysical doubt as to\nthe material facts.\u201d Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,\n586 (1986). Nor can he rely on mere \u201callegations or denials.\u201d Mann v. Yarnell, 497\nF.3d 822, 825 (8th Cir. 2011). But to the extent the parties\u2019 accounts of what\nhappened genuinely diverge, we follow Beasley.\n\n There were roughly three sets of customer complaints during Beasley\u2019s tenure.\nThe first set came in 2013 from AutoZone, one of Warren\u2019s primary customers. On\nfour occasions, AutoZone reported that Warren\u2019s products were labeled or packaged\nincorrectly. The underlying cause of these failures appears to have been two pieces\nof equipment that either maintenance or operations personnel had improperly\ncalibrated. Beasley concedes that his team might have been able to catch or correct\nthese problems, but he notes that these complaints occurred before his quality control\nsystems had been fully implemented.\n\n Warren received a second set of complaints in February 2015. Though\nWarren\u2019s products met appropriate performance specifications during this period,\nsome contained too much red dye and others had a foul odor. Beasley investigated\nthese problems and concluded that both resulted from mistakes in the oil blending\nprocess. Beasley states that he was not to blame for these problems, which would\nhave fallen under the purview of Billy Moore, the Blending Manager. He also states\nhis team could not have detected the issues because the oil was already bottled when\nit reached quality control.\n\n Warren received a third set of complaints, this time about leaky bottles,\nthroughout the spring of 2015. The leaks were caused by Warren\u2019s bottle capping\n\n -3-\n\fmachine, which was either improperly calibrated or was not the proper machine to use\nfor the job. Warren\u2019s President at the time, Steve Estok, admits that the responsibility\nfor this problem fell partly on operations personnel and the Maintenance Manager,\nShawn Jamieson. Beasley also shared some blame according to Estok, because he\nshould have been inspecting the amount of torque that the machine was applying.\nBeasley disputes this, stating that he had informed Estok that the company needed\ndifferent or additional equipment.\n\n Around this same time, Beasley was preparing for the annual ISO audit. In\nprior years, Warren had passed the audit without any problems. In May 2015,\nhowever, the auditor identified six minor deficiencies. Estok also says that the\nauditor was especially critical of Beasley, stating that he was \u201cnot capable of doing\nthis job\u201d and that Warren\u2019s quality control program was \u201cprogressively getting\nworse.\u201d App. 616. Estok further claims that the auditor told him Warren might lose\nits ISO certification if Warren did not improve.\n\n Due to these complaints, the strain they created with Warren\u2019s customers, the\naudit, and other issues, upper-management at Warren took corrective action. Rusty\nBrown, the Operations Manager, was temporarily reassigned and received a detailed\nwrite-up about his poor job performance. The Transportation Manager, Craig\nStauffer, also received a disciplinary letter. And Billy Moore, the Blending Manager,\nwas written-up and eventually fired. These individuals were all white.\n\n In late-June 2015, Estok met with Beasley and his supervisor, Gary Whiteside,\nto discuss Beasley\u2019s job performance. The meeting did not go well. According to\nBeasley, Estok generally discouraged any meaningful discussion. Estok claims that\nBeasley was unprepared and showed that he did not understand Warren\u2019s quality\ncontrol program. Estok sent Beasley a letter afterward summarizing the meeting and\nalleging several deficiencies in his performance, including a lack of organizational\nskills, his failure to document non-conforming products, and his delay in following\n\n -4-\n\fup on requests from management. On August 7, 2015, Warren fired Beasley. The\ntermination notice stated: \u201c[s]ystems have not improved, training is [still]\nnon-existent, documentation has not improved and we are still reviewing complaints\nfor the same items.\u201d App. 609. Shortly after, Warren hired Beasley\u2019s replacement,\nwho was white.\n\n Beasley subsequently filed an EEOC charge alleging that Warren had treated\nhim differently from other mid-level managers because of his race. The EEOC\ndismissed Beasley\u2019s charge. Beasley then filed this action alleging that Warren\u2019s\nmanagement violated Title VII and 42 U.S.C. \u00a7 19812 by treating similarly situated\nwhite employees more favorably.3 Warren eventually moved for summary judgment,\nand the district court granted Warren\u2019s motion.\n\n II.\n\n We review a district court\u2019s decision to grant summary judgment de novo.\nBrown v. Diversified Distribution Sys., LLC, 801 F.3d 901, 907 (8th Cir. 2015). As\nin other contexts, \u201cif the pleadings, the discovery and disclosure materials on file, and\nany affidavits show that there is no genuine issue as to any material fact . . . the\nmovant is entitled to judgment as a matter of law.\u201d Torgerson, 643 F.3d at 1042-43\n(stating that \u201c[t]here is no \u2018discrimination case exception\u2019 to the application of\nsummary judgment\u201d).\n\n\n\n\n 2\n Because \u201c[t]he same analysis [applies] to claims of discrimination . . .\nunder Title VII and 42 U.S.C. \u00a7 1981,\u201d Takele v. Mayo Clinic, 576 F.3d 834, 838\n(8th Cir. 2009), we use Title VII as shorthand for both claims below.\n 3\n Beasley\u2019s Complaint also included a cause of action against Warren for\nretaliation. Because Beasley failed to raise this claim in his opening brief on\nappeal, the argument is waived. See United States v. Rice, 699 F.3d 1043, 1050\n(8th Cir. 2012) (\u201cIssues not raised in a party\u2019s opening brief are waived.\u201d).\n -5-\n\f Where there is no direct evidence of discrimination, we use the burden-shifting\nframework from McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). See\nTorgerson, 643 F.3d at 1044. First, the plaintiff must make out a prima facie case of\ndiscrimination. Schaffhauser v. United Parcel Serv., Inc., 794 F.3d 899, 903 (8th Cir.\n2015). If he can do so, the burden shifts to the employer to provide a legitimate,\nnondiscriminatory reason for the discharge. Id. If this burden is met, the plaintiff\nmust demonstrate that the employer\u2019s \u201cproffered nondiscriminatory justifications are\nmere pretext for intentional discrimination.\u201d Torgerson, 643 F.3d at 1046. Though\nthe evidentiary burden under this framework alternates between the parties, \u201c[t]he\nultimate burden of persuading the trier of fact that the defendant intentionally\ndiscriminated against the plaintiff remains at all times with the plaintiff.\u201d Reeves v.\nSanderson Plumbing Prod., Inc., 530 U.S. 133, 143 (2000) (quoting Texas Dept. of\nCommunity Affairs v. Burdine, 450 U.S. 248, 253 (1981)).\n\n To make a prima facie case for employment discrimination in the context of a\ndischarge, Beasley must establish: (1) he \u201cis a member of a protected group\u201d; (2) he\n\u201cwas qualified for h[is] position\u201d; (3) he \u201cwas discharged\u201d; and (4) \u201cthe discharge\noccurred under circumstances permitting an inference of discrimination.\u201d Elam v.\nRegions Fin. Corp., 601 F.3d 873, 879 (8th Cir. 2010). This burden is \u201cnot onerous.\u201d\nRodgers v. U.S. Bank, N.A., 417 F.3d 845, 852 (8th Cir. 2005) (cautioning against\n\u201cconflat[ing] the prima facie case with the ultimate issue of discrimination\u201d),\nabrogated on other grounds by Torgerson, 643 F.3d 1031. Nor are these\nrequirements \u201cintended to be rigid, mechanized, or ritualistic.\u201d Id. They merely serve\nthe gatekeeping function of \u201celiminat[ing] the most common nondiscriminatory\nreasons for [adverse employment actions].\u201d Burdine, 450 U.S. at 254.\n\n Beasley makes a prima facie case of discrimination. He plainly meets the first\nand third requirements: he is a member of a protected group and was fired. Also,\nthere is no dispute that Beasley was qualified for his position. As to the fourth\nrequirement, our cases note that there are multiple ways \u201ca plaintiff can establish an\n\n -6-\n\finference of discrimination . . . .\u201d Grant v. City of Blytheville, 841 F.3d 767, 774\n(2016). The parties focused their briefing on this point on whether Beasley is able\nto show that he was treated differently from similarly-situated white employees.\nAppellant\u2019s Br. at 11-12; Appellee\u2019s Br. at 6-7. The district court, however, relied on\na more straightforward method by which Beasley can satisfy this element\u2014the\nshowing that \u201che was replaced by a white male.\u201d App. 1106; see Putman v. Unity\nHealth Sys., 348 F.3d 732, 736 (8th Cir. 2003) (noting that a plaintiff can satisfy the\nfourth element by showing that \u201cafter [his] discharge, he was replaced by a person\nwith similar qualifications\u201d); see also McDonnell Douglas, 411 U.S. at 802 (similarly\ndescribing the fourth element of the prima facie case in the hiring context). We agree\nwith the district court\u2019s analysis on this point, and therefore we find it unnecessary\nto reach the parties\u2019 arguments about disparate treatment in McDonnell Douglas\u2019s\nfirst stage.\n\n Under the second step of McDonnell Douglas, Warren must articulate a\n\u201clegitimate, nondiscriminatory reason\u201d for the discharge. Torgerson, 643 F.3d at\n1046. Again, this burden is not heavy. Bone v. G4S Youth Servs., LLC, 686 F.3d\n948, 954 (8th Cir. 2012). Warren\u2019s explanation must only \u201craise[] a genuine issue of\nfact as to whether it discriminated against [Beasley].\u201d Burdine, 450 U.S. at 254.\n\n Warren meets this burden. The June 2015 letter Estok sent to Beasley alleged\nseveral performance-related deficiencies. Also, Warren received multiple customer\ncomplaints during Beasley\u2019s tenure and was cited for six deficiencies in the ISO\naudit. Even if Beasley was disproportionately blamed for these problems, the record\nis more than sufficient to raise a genuine issue of fact as to whether Warren\nintentionally discriminated against Beasley.\n\n Under McDonnell Douglas\u2019s third step, Beasley must demonstrate that\nWarren\u2019s explanation for his termination is \u201cmere pretext for intentional\ndiscrimination.\u201d Torgerson, 643 F.3d at 1046. A common approach to show pretext\n\n -7-\n\fis to introduce evidence that the employer treated similarly-situated employees in a\ndisparate manner. See Rodgers, 417 F.3d at 853. However, \u201cthe test for whether\nsomeone is sufficiently similarly situated, as to be of use for comparison, is rigorous.\u201d\nJohnson v. Securitas Sec. Servs. USA, Inc., 769 F.3d 605, 613 (2014) (en banc). The\nplaintiff must establish \u201cthat he and the employees outside of his protected group\nwere similarly situated in all relevant respects.\u201d Id. (cleaned up). This means that the\nplaintiff and the potential comparators must have \u201cdealt with the same supervisor,\nhave been subject to the same standards, and engaged in the same conduct without\nany mitigating or distinguishing circumstances.\u201d Id. (citation omitted).\n\n Ultimately, we agree with the district court\u2019s conclusion that \u201c[t]here simply\n[we]ren\u2019t other employees \u2018similarly situated [to Beasley] . . . in all relevant\nrespects.\u2019\u201d App. 1107. Beasley provides an initial list of five different individuals\nat Warren \u201con the same level of management.\u201d Appellant Br. at 10. He later trims\nthe list to three employees \u201cwho were [also] involved in conduct that was imputed to\nthe Appellant\u201d\u2014Rusty Brown, Shawn Jamieson, and Ben Heater. Id. at 31. Yet\nBeasley never shows that he and any of these people shared the same supervisor, were\nsubject to the same standards, or engaged in the same conduct. We examine each of\nthese individuals below, but note that our neutral role in the adversarial process\nmakes us wary of combing through the record to supplement a party\u2019s arguments. See\nRodgers v. City of Des Moines, 435 F.3d 904, 908 (8th Cir. 2006) (\u201cWithout some\nguidance, we will not mine a summary judgment record searching for nuggets . . . to\ngild a party\u2019s arguments.\u201d).\n\n Rusty Brown is not similarly situated. Although he was in a similar level of\nmanagement as Beasley, he had a much longer tenure at Warren\u201427 years as\nopposed to 3 years. He also held a number of different positions over the years,\nwhich meant that he could be more easily reassigned. Also, although Brown and\nBeasley both communicated regularly with Estok, they had different direct reports.\nFinally, Brown\u2019s role was never focused on ensuring product quality. He held the\n\n -8-\n\fposition of Plant Manager, Operations Manager, and Warehouse Manager at different\ntimes during relevant events and\u2014under each of these roles\u2014his job was to promote\nproduction efficiency. Brown was thus disciplined for production-related issues like\nthe \u201c[f]ailure to meet delivery dates\u201d and the \u201c[f]ailure to properly organize\nwarehouse personnel to optimize loading of outbound shipments.\u201d App. 548\u201349.\nBrown also played no part whatsoever in helping Warren prepare for the ISO audit.\n\n Ben Heater fails as a comparator for similar reasons. Like Brown, Heater\u2019s role\nas the Laboratory Manager was very different from Beasley\u2019s. His specific charge\nwas to test the oil itself to ensure that it met appropriate technical specifications\u2014a\nstage of the process in which Beasley admits he played no part. Heater\u2019s potential\nresponsibility for customer complaints also differs from Beasley\u2019s. Even for the\ncomplaints relating to the oil (rather than labeling or capping), the record shows that\nthe oil met the required specifications, so the fault lay with the blending department,\nnot Heater. Heater also had a different supervisor than Beasley for some of his time\nat Warren. Finally, though Heater was hired the same year as Beasley, he had been\nemployed in similar roles for 40 years beforehand.\n\n We have less information about the Maintenance Manager, Shawn Jamieson.\nHis deposition does not appear in the record, and Beasley does not point to where we\nmight determine Jamieson\u2019s supervisor, the length of his tenure at Warren, his\ndisciplinary record, and his employment and educational history. We do not have\nenough to go on to say that he was \u201csimilarly situated in all relevant respects.\u201d\n\n Even if Jamieson or some other individual at Warren had been similarly\nsituated to Beasley, he would still have to establish that he was treated differently on\naccount of his race. This is the central question for a Title VII claim. See Torgerson,\n643 F.3d at 1046 (noting that, in McDonnell Douglas\u2019s third stage, the plaintiff\u2019s\n\u201cburden to show pretext merges with the ultimate burden of persuading the court that\n[he was] the victim of intentional discrimination\u201d) (cleaned up); Griffith v. City of\n\n -9-\n\fDes Moines, 387 F.3d 733, 743 (8th Cir. 2004) (\u201c[T]he key issue under Title VII is\nwhether intentional discrimination occurred.\u201d).\n\n Beasley\u2019s primary argument is that racial animus can be inferred from Warren\u2019s\n(or perhaps Estok\u2019s) practices with respect to African-American employees over time.\nBut Beasley never develops the claim by showing, for example, hiring statistics at\nWarren, a list of all the employees disciplined during Estok\u2019s tenure, salary\ninformation for African-American employees, or similar evidence. Nor does Beasley\nexplain the parts of the record that cut the other way. As previously noted, two other\nmid-level managers, both of whom were white, were disciplined in June 2015, and\nanother white mid-level manager was eventually fired.\n\n Without some way to tie his termination to racial animus, Beasley\u2019s claim fails.\nThough Beasley\u2019s termination might have been unfair or disproportionate, this alone\nis insufficient under Title VII. See Schaffhauser, 794 F.3d at 903 (\u201cThe question is\nnot whether [the employer] made a good decision, or even a fair one. . . [but] whether\nit . . . [was] based on discriminatory animus.\u201d). Congress has not given \u201cfederal\ncourts the authority to sit as super-personnel departments reviewing the wisdom or\nfairness of the business judgments made by employers . . . .\u201d Guimaraes v.\nSuperValu, Inc., 674 F.3d 962, 977 (8th Cir. 2012) (citation omitted). Instead,\nplaintiffs must provide sufficient evidence of intentional discrimination.\n\n Because we find that Beasley has not established intentional discrimination,\neither by showing that Warren treated similarly-situated employees in a disparate\nmanner or otherwise, his claims fail.\n\n III.\n\n The judgment of the district court is affirmed.\n ______________________________\n\n\n -10-\n\f"} -{"text": "865 F.2d 103\nBasil STEWART, et al., Plaintiffs-Appellants,v.DOW CHEMICAL CO., Defendant-Appellee.\nNo. 87-2223.\nUnited States Court of Appeals,Sixth Circuit.\nArgued Nov. 7, 1988.Decided Jan. 11, 1989.\n\nJules B. Olsman, Woll, Crowley, Berman & Olsman, Royal Oak, Mich., Robert Sedler (argued), Detroit, Mich., for plaintiffs-appellants.\nJoseph J. Ortego, Rivkin, Radler, Dunne & Bayh, Uniondale, N.Y., Michael H. Whiting, Stark, Reagan & Finnerty, Troy, Mich., Michael A. Makulski (argued), Dow Chemical Co., Midland, Mich., for defendant-appellee.\nBefore WELLFORD and BOGGS, Circuit Judges, and SIMPSON, District Judge.*\nBOGGS, Circuit Judge.\n\n\n1\nStewart and the other plaintiffs appeal from a dismissal of their product liability claims based on the doctrine of forum non conveniens. He, along with the other plaintiffs in this action, are citizens of New Brunswick, Canada, who sued Dow Chemical, Co. (Dow), a Michigan corporation, in a federal district court in Michigan. Dow moved to dismiss on a number of grounds, including that of forum non conveniens, claiming that New Brunswick's interest in this case, as well as the alleged location of most of the evidence in the case, mandated that the suit be heard in New Brunswick. The trial judge agreed, and we affirm.\n\n\n2\n* Stewart, et al. (hereinafter \"Stewart\"), complain that while they or members of their families were employed by the New Brunswick Electric Power Commission between 1955 and 1966, they suffered injuries from exposure to toxic herbicides manufactured by Dow at its Midland, Michigan plant. Stewart claims that the injuries complained of were a direct result of exposure to the herbicide contaminated with a substance known as 2,3,7,8-Tetrachlorodibenzo-P-Dioxin (dioxin). Stewart's complaint was filed on January 2, 1987.\n\n\n3\nUpon receipt of Stewart's complaint, Dow moved to dismiss alleging that: 1) co-defendant Dow Chemical Canada, Inc. (Dow Canada) was an indispensible party to the suit, but that the presence of Dow Canada in the suit defeated diversity jurisdiction; and 2) the doctrine of forum non conveniens mandated dismissal because the suit should have been brought in a Canadian court. Stewart was allowed to amend his complaint, removing Dow Canada as a party to maintain diversity, after a finding by a magistrate that Dow Canada was not an indispensible party. The magistrate also recommended that the case be dismissed on grounds of forum non conveniens.\n\n\n4\nThe trial judge adopted the magistrate's recommendations with one exception noted below and dismissed the suit on grounds of forum non conveniens, finding that the Canadian courts would afford an adequate alternate forum. He conditioned the dismissal on the following events: 1) that Dow stipulate that it would accept Canadian jurisdiction and service of process; 2) that Dow waive any statute of limitations defense; 3) that Dow make all of the witnesses under its control available to testify in Canada; 4) that Dow allow discovery in the Canadian court of any materials which would be available under the Federal Rules of Civil Procedure in a United States Court; and 5) that Dow pay any judgment rendered by a Canadian court, subject to its right to appeal under Canadian law. Dow filed its stipulation to these conditions on November 17, 1987, and the trial court entered its dismissal order on that date.\n\n\n5\nStewart claims that the alleged exposure took place in New Brunswick, and that the manufacture of the herbicide took place in Midland, Michigan, where the majority of Dow's corporate officials and scientists are now located. Dow contends that the design and manufacture of the actual herbicide occurred in Canada, and was not performed by Dow. Dow states in its brief that although Dow and several other companies may have supplied Canadian manufacturers with a component of the subject herbicide, the manufacturers processed the component and shipped it to other Canadian companies that made the final product in Canada.\n\n\n6\nThe herbicide in question is alleged to contain dioxin; Stewart alleges that, as a result of continued and direct exposure to the herbicide, he and the other plaintiffs suffered injuries ranging from cancer to neurological and gastrointestinal disorders, as well as injuries to the reproductive system resulting in miscarriage and stillbirth. Stewart sues under theories of strict product liability, negligence, breach of implied and express warranties, and failure to warn.\n\n\n7\nAt the time the suit was filed, there was some question as to Dow's amenability to process in a Canadian court; however, Dow's stipulations submitting to Canadian jurisdiction cure that defect, and Canada is now clearly an available alternate jurisdiction.\n\n\n8\nIn making his recommendation, the magistrate did not explicitly find that Michigan was an inconvenient forum. Instead, he weighed the public and private interests involved, finding that the \"private interest factors weigh in favor of dismissal while the public interest factors neither militate in favor of dismissal nor retention.\" Contrary to the magistrate's conclusion that Michigan law would apply in this case regardless of where it was tried, the trial judge disagreed, finding that Canadian law would apply in either location. While the substance of the law to be applied is neither a factor in, nor determined by, the district court's decision here, we note that both parties appear to believe that Canadian law is more favorable to manufacturers than the laws of Michigan. The trial judge explicitly agreed with this weighing of factors, and agreed to dismiss on grounds of forum non conveniens.\n\nII\n\n9\nOn appeal, Stewart claims that the doctrine of forum non conveniens cannot be invoked to dismiss a case within the diversity jurisdiction of the federal courts under these circumstances. The circumstances Stewart alleges include that the defendant, Dow, is a manufacturer sued in its home state, that it was doubtful at the time of filing that Dow was amenable to suit in Canada, and that all of the acts pertinent to the case occurred during the manufacture and testing of the allegedly dangerous product, which Stewart claims was performed in Michigan. Dow claims that the plaintiffs were damaged, if at all, in New Brunswick, and the hazard, if any, arose in Canada. It further contends that the standard of review in this case is an abuse of discretion standard, and that under that standard, the trial judge cannot be said to have abused his discretion.\n\n\n10\n* A trial court's dismissal on the basis of the doctrine of forum non conveniens must be upheld in the absence of a clear abuse of discretion. Kryvicky v. Scandinavian Airlines System, 807 F.2d 514, 516 (6th Cir.1986); Watson v. Merrell Dow Pharmaceuticals, Inc., 769 F.2d 354, 356 (6th Cir.1985); Dowling v. Richardson-Merrell, Inc., 727 F.2d 608, 616 (6th Cir.1984). \"[W]here the [trial] court has considered all relevant public and private interest factors, and where its balancing of these factors is reasonable, its decision deserves substantial deference.\" Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257, 102 S.Ct. 252, 266, 70 L.Ed.2d 419 (1981).\n\nB\n\n11\nIn Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947), the Supreme Court set out guidelines for determining when a dismissal on grounds of forum non conveniens is appropriate.\n\n\n12\n[T]he defendant seeking a forum non conveniens dismissal must identify an alternative forum. Once the existence of such a forum is established the trial court must consider the private interests of the litigants and factors of public interest in determining relative convenience of the forum chosen by the plaintiff as opposed to the available alternative forum. Among the important private interest considerations are \"the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of unwilling, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive.\" The court must also consider problems of enforcing a judgment if one is obtained and relative advantages and obstacles to a fair trial, if any. \"But unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed.\" The Court also identified relevant public interest factors: administrative difficulties of courts with congested dockets; the burden of jury duty on people of a community having no connection with the litigation; desirability of holding a trial near those most affected by it (\"There is local interest in having localized controversies decided at home.\"); appropriateness of holding a trial in a diversity case in a court which is familiar with governing law.\n\n\n13\nDowling, 727 F.2d at 612 (citing and quoting Gilbert, 330 U.S. at 508-09, 67 S.Ct. at 843).\n\n\n14\nThis rule was slightly modified in Piper. In Gilbert, the two forums involved were different United States forums. 330 U.S. at 503, 67 S.Ct. at 840. In Piper, the plaintiffs were foreign, in which case, the Court said, the plaintiffs' choice of forum was entitled to less deference. 454 U.S. at 256, 102 S.Ct. at 266. This is so because it is not the home forum which has been chosen, and so convenience cannot be presumed. Ibid.\n\n\n15\nIn evaluating the factors set out in Gilbert, it is clear that no one factor is determinative; the \"central focus of the ... inquiry is convenience....\" Piper, 454 U.S. at 249, 102 S.Ct. at 262. \"[D]ismissal will ordinarily be appropriate where trial in the plaintiff's chosen forum imposes a heavy burden on the defendant or the court, and where the plaintiff is unable to offer any specific reasons of convenience supporting his choice.\" Ibid. Thus, there is no requirement in Piper, as Stewart alleges, that the burden be \"oppressive,\" though surely such would be sufficient. Such a high standard would constitute a misreading of Piper and its progeny.\n\n\n16\nIn the present case, both the magistrate and the trial judge weighed the interests carefully, disagreeing only on the question of what law would be applied at trial. Each used the results of his determination in weighing the public interests in the case. Despite that difference, both reached the conclusion that dismissal on grounds of forum non conveniens was appropriate. Dismissals based on conditions such as those agreed to in this case have been approved by this court more than once in the past. Dowling, 727 F.2d at 615; Watson, 769 F.2d at 356. We see no error that rises to the level of an abuse of discretion in this case.\n\n\n17\nIn terms of convenience, it appears inevitable that one of the parties will be inconvenienced by having to proceed in a court in a foreign jurisdiction. Both parties seem almost peculiarly willing to do so; the Canadian residents filed in the United States, and the United States corporation seeks to proceed in Canada. Stewart makes no effort to explain his preference for a foreign forum, although Dow claims that evidence essential to its anticipated defense can be found and presented as evidence only in a Canadian forum. Thus, in examining the interests involved, the inconvenience or costs of travel does not seem to be an issue, as each side strenuously contends for the privilege of bearing them.\n\n\n18\nThe defendant, Dow, did establish that an adequate alternative forum existed. By agreeing to the conditions imposed by the trial judge, Dow has made New Brunswick a perfectly adequate alternative forum. There is no allegation that Canadian law would provide an inadequate remedy, or no remedy at all. Dismissal on grounds of forum non conveniens cannot be reversed solely because another forum's laws are more or less favorable to one or the other party. DeMelo v. Lederle Laboratories, 801 F.2d 1058, 1063 (8th Cir.1986).\n\n\n19\nWe must next proceed to an examination of the private interests involved in this case. There is a question of fact as to where the herbicide was manufactured; however, there is no question that evidence of design and manufacture is under the control of Dow, which has agreed, as one of the conditions imposed by the trial judge, to allow discovery of any evidence which would be discoverable under the Federal Rules of Civil Procedure, and to make witnesses under its control available to the Canadian court. In fact, Dow claims that the burden of establishing its defense would be an impossible one were the case to proceed in an American court. Further, any evidence as to the nature of the injuries would be located in New Brunswick, as would treating physicians, the site of the injury, and witnesses to the use of the herbicide. Thus, there was no abuse of discretion in finding that the private interests weigh in favor of dismissal on the grounds of forum non conveniens.\n\n\n20\nIt is clear that the people of New Brunswick have an interest in this controversy; it is their fellow citizens who were allegedly injured. Thus, in considering the public interests involved here, it cannot be said that New Brunswick has no interest in this controversy. The relevance of the choice of laws consideration is only to determine which forum will be more comfortable applying the applicable law, and which forum can be said to have an interest in having its law applied. We need not resolve any disagreement between the trial judge and the magistrate regarding the choice of laws issue in that both found that, despite differing conclusions on the point, it did not affect the weighing of interests enough to lead to different outcomes.\n\n\n21\nHere, the alleged injuries occurred in New Brunswick, the allegedly injured parties reside in New Brunswick, and it may be determined that the final stages of manufacture of the herbicide were performed in New Brunswick. At the very least, it is fair to say that the trial court did not abuse its discretion in finding the public interests to weigh in favor of the Canadian forum. Thus, we affirm the trial court's dismissal of this action based on the doctrine of forum non conveniens.\n\nC\n\n22\nStewart raises for the first time on appeal that the Rules of Decision Act, 28 U.S.C. Sec. 1652, requires that this court reverse the dismissal on grounds of forum non conveniens. Because this issue was not raised below, it is not properly before this court on appeal. Sigmon Fuel Co. v. TVA, 754 F.2d 162, 164-65 (6th Cir.1985).\n\n\n23\nWe cannot say that the trial court committed an abuse of discretion in dismissing the case on grounds of forum non conveniens. Thus, we AFFIRM.\n\n\n\n*\n The Honorable Charles R. Simpson, III, United States District Judge for the Western District of Kentucky, sitting by designation\n\n\n"} -{"text": "\n444 Pa. 397 (1971)\nCommonwealth\nv.\nMalone, Appellant.\nSupreme Court of Pennsylvania.\nArgued May 4, 1971.\nOctober 12, 1971.\nBefore BELL, C.J., EAGEN, O'BRIEN, ROBERTS, POMEROY and BARBIERI, JJ.\n*398 Mary Alice Duffy, for appellant.\nMark Sendrow, Assistant District Attorney, with him Milton M. Stein, Assistant District Attorney, James D. Crawford, Deputy District Attorney, Richard A. Sprague, First Assistant District Attorney, and Arlen Specter, District Attorney, for Commonwealth, appellee.\nOPINION BY MR. JUSTICE EAGEN, October 12, 1971:\nOn November 20, 1956, the court below accepted a general plea of guilty on behalf of Julian Malone to an indictment charging him with murder. After an evidentiary hearing, Malone was found guilty by the court of murder in the first degree and was sentenced to life imprisonment. No appeal was then filed, but on March 9, 1970, after a hearing sur a petition seeking post-conviction relief, the trial court permitted this direct appeal to be filed as if the same were timely filed.\nThe first assignment of error challenges the sufficiency of the evidence at the hearing to adjudicate the degree of guilt to sustain a finding of murder in the first degree. As we have stated many times, the test to be applied in determining the sufficiency of the evidence, is whether, accepting as true all of the evidence, be it direct or circumstantial, and all reasonable inferences arising therefrom upon which, if believed, the trier of facts could properly have based the verdict, it is sufficient in law to prove beyond a reasonable doubt that the defendant is guilty of the crime or crimes of which he has been convicted. Commonwealth v. Whitaker, 440 Pa. 143, 269 A. 2d 886 (1970), and Commonwealth v. Commander, 436 Pa. 532, 260 A. 2d 773 (1970). The evidence in this case meets this test.\n*399 From the testimony, the trial court was warranted in finding the following facts:\nMalone, the appellant, and Samuel Broodus engaged in a verbal argument over the payment of an alleged debt, while seated in Broodus' automobile parked on a street in Philadelphia. Following this dispute, Malone left the Broodus vehicle and sat for a short period in a second automobile parked nearby. He then walked to the residence of a friend, situated about two and one-half blocks away, secured a rifle and some ammunition, loaded the gun with ammunition and returned to where the Broodus automobile was parked. When Broodus refused his demand to pay the debt Malone said he owed, Malone, without more, used the rifle to shoot Broodus in the chest. The bullet pierced the heart causing instant death.\nOn the foregoing facts, the trial court was fully justified in entering an adjudication of guilt of murder in the first degree. Cf. Commonwealth v. Schnur, 440 Pa. 132, 269 A. 2d 691 (1970), and Commonwealth v. Iacobino, 319 Pa. 65, 178 A. 823 (1935).\nIt is next urged that the guilty plea should be declared invalid and of no effect because: (1) it was entered by trial counsel, rather than Malone personally; and (2) in any event it was not an intelligent and knowing plea by Malone.\nThe plea proceedings record discloses that it was counsel who informed the court that Malone was pleading guilty to the indictment, and unfortunately the trial court did not question Malone personally as to his knowledge of the plea or its consequences. However, the plea was entered in Malone's presence and without the slightest indication of any objection on his part. Also, with Malone present, eight witnesses testified for the Commonwealth during the hearing immediately following the entry of the plea, including three eyewitnesses who stated that Malone shot Broodus without *400 any immediate provocation. Additionally, Malone never attacked the validity of his plea until after more than twelve years had elapsed. And finally, Malone's self-retained trial counsel testified at the post-conviction hearing that before the plea was entered he had many conferences with Malone during which he explained to him the possible consequences, if a guilty plea were entered, or if Malone decided to plead not guilty, and after considering all facets of the case Malone decided the best course to pursue was to plead guilty.\nOn this record, we find no error of law or abuse of discretion on the part of the court below in refusing to declare Malone's guilty plea invalid. Cf. Commonwealth v. McBride, 440 Pa. 81, 269 A. 2d 737 (1970).\nJudgment affirmed.\nMr. Justice JONES took no part in the consideration or decision of this case.\n"} -{"text": " In the\n United States Court of Appeals\n For the Seventh Circuit\n ____________\n\nNo. 05-2479\n520 SOUTH MICHIGAN AVENUE ASSOCIATES, LTD.,\ndoing business as The Congress Plaza Hotel\n& Convention Center,\n Plaintiff-Appellant,\n v.\n\nRICHARD A. DEVINE, State\u2019s Attorney of Cook County,\nIllinois; LISA MADIGAN, Attorney General of Illinois;\nand ART LUDWIG, Director of the Illinois\nDepartment of Labor,\n Defendants-Appellees.\n ____________\n Appeal from the United States District Court for the\n Northern District of Illinois, Eastern Division.\n No. 04 C 6400\u2014Robert W. Gettleman, Judge.\n ____________\n ARGUED DECEMBER 1, 2005\u2014DECIDED JANUARY 10, 2006\n ____________\n\n\n Before EASTERBROOK, RIPPLE, and KANNE, Circuit Judges.\n EASTERBROOK, Circuit Judge. For many years it has been\na crime in Illinois to employ a \u201cprofessional strikebreaker.\u201d\n820 ILCS 30/2. (A \u201cprofessional strikebreaker\u201d is anyone\nwho repeatedly works during strikes. 820 ILCS 30/1(c). One\nneed not be a goon to fit the definition.) In 2003 the state\nextended the prohibition to acquisition of strike-breaking\nlabor from any \u201cday or professional labor service agency\u201d.\n2003 Ill. Laws 375. When that amendment to the Employ-\n\f2 No. 05-2479\n\nment of Strikebreakers Act took effect on January 1, 2004,\nworkers of the Congress Hotel in Chicago were on strike,\nand the Hotel was operating with replacement workers.\nSoon the Illinois Department of Labor asked the Hotel for\ninformation about the origins of its labor force. The civil\ninvestigative demand invoked the Day and Temporary\nLabor Services Act, 820 ILCS 175/1 et seq., which has its\nown administrative apparatus. But as that Act also sup-\nplies the definition of \u201cday and temporary labor service\nagency\u201d for purposes of the Strikebreakers Act, see 820\nILCS 30/1(e), the Hotel concluded that it was in the\nstate\u2019s cross-hairs and filed this suit under 42 U.S.C. \u00a71983,\nseeking a declaratory judgment that the Strikebreakers Act\nis preempted. See Golden State Transit Corp. v. Los An-\ngeles, 493 U.S. 103 (1989); Machinists v. Wisconsin Employ-\nment Relations Comm\u2019n, 427 U.S. 132 (1976). The district\ncourt dismissed the complaint for want of jurisdiction,\nholding that the Hotel\u2019s inability to demonstrate that\ncriminal prosecution is \u201cimminent\u201d means that there is no\ncase or controversy under Article III of the Constitution.\n520 South Michigan Avenue Associates, Ltd. v. Devine, 366\nF. Supp. 2d 683 (N.D. Ill. 2005).\n The district court did not explain the provenance of this\n\u201cimminence\u201d requirement. Courts occasionally say that\none or another plaintiff has standing because a threat\nof prosecution is imminent, but that is a far cry from\nholding that only an imminent criminal prosecution\nsuffices. When the Supreme Court uses the word \u201cimmi-\nnent\u201d in describing the requisites of standing, it says that\nthe injury must be \u201cactual or imminent, not \u2018conjectural\u2019 or\n\u2018hypothetical.\u2019 \u201d Whitmore v. Arkansas, 495 U.S. 149, 155\n(1990), quoting from Los Angeles v. Lyons, 461 U.S. 95,\n102 (1983). Standing depends on the probability of harm,\nnot its temporal proximity. When injury has occurred or\nis likely in the future, the fact that state litigation may\nbe deferred does not prevent federal litigation now. The\n\fNo. 05-2479 3\n\nHotel\u2019s use of replacement workers that may have been\nreferred by employment agencies is enough to show that\na genuine controversy exists, because it is caught be-\ntween the need to comply with the state law and the\ndesire to reduce the cost of its operations. See Babbitt v.\nUnited Farm Workers, 442 U.S. 289 (1979).\n Courts frequently engage in pre-enforcement review\nbased on the potential cost that compliance (or bearing\na penalty) creates. Think of Pierce v. Society of Sisters, 268\nU.S. 510 (1925), in which a private school obtained review\nof a state law that required all youngsters to attend pub-\nlic schools, even though the law would not take effect for\ntwo years. Prosecution was hardly \u201cimminent,\u201d yet the\nCourt held that the school had standing to contest the\nstatute\u2019s validity. Likewise the Court held in Abbott\nLaboratories v. Gardner, 387 U.S. 136 (1967), that drug\nmanufacturers could obtain judicial review of a regula-\ntion whose effective date lay in the future. Costs that the\nmanufacturers would incur in preparing to comply (or the\nlegal risks they would incur in not doing so) supplied\nstanding, the Court held, and the case was ripe because the\nregulation\u2019s validity could be assessed without knowing the\nprecise means and expense of compliance. See also, e.g.,\nDuke Power Co. v. Carolina Environmental Study Group,\nInc., 438 U.S. 59 (1978); American Booksellers Ass\u2019n v.\nHudnut, 771 F.2d 323, 327 (7th Cir. 1985), aff\u2019d mem., 475\nU.S. 1001 (1986); Daniel A. Farber, Uncertainty as a Basis\nfor Standing, 33 Hofstra L. Rev. 1123 (2005). No one was at\nimminent risk of prosecution in Buckley v. Valeo, 424 U.S.\n1 (1976), or most of the later suits contesting campaign-\nfinance regulation. The catalog of decisions that conduct\nreview before a rule has gone into force, and hence long\nbefore prosecution is \u201cimminent,\u201d is extensive.\n If a criminal prosecution of the Hotel really were im-\nminent, then a federal court might well abstain on comity\n\f4 No. 05-2479\n\ngrounds\u2014for the prosecution would offer the Hotel an\nopportunity to present its legal arguments, and states\nare entitled to insist that their criminal courts resolve\nthe entire dispute. See, e.g., Younger v. Harris, 401 U.S.\n37 (1971). It is precisely because the State\u2019s Attorney\ndoes not promise to offer the Hotel a prompt opportunity to\nresolve the dispute in state court that it is entitled to turn\nto a federal tribunal. Otherwise the risk of prosecution, and\nthe costs of complying with or transacting around the\nStrikebreakers Act, will continue. As the Supreme Court\nobserved in Babbitt, \u201c[w]hen the plaintiff has alleged an\nintention to engage in a course of conduct arguably [pro-\ntected by federal law], but proscribed by a statute, and\nthere exists a credible threat of prosecution thereunder, he\nshould not be required to await a criminal prosecution as\nthe sole means of seeking relief.\u201d 442 U.S. at 298.\n Defendants offer an alternative ground of affirmance: that\nthe 2004 version of the Strikebreakers Act already has been\nheld to be preempted. See Caterpillar Inc. v. Lyons, 318 F.\nSupp. 2d 703 (C.D. Ill. 2004). If defendants\u2014the State\u2019s\nAttorney of Cook County, the Attorney General of Illinois,\nand the Director of the Illinois Department of Labor, which\nadministers the Day and Temporary Labor Services\nAct\u2014had acquiesced in Caterpillar and represented that\nthey would not prosecute the Hotel under the Strikebreak-\ners Act, then there would indeed be no live controversy,\nbecause there would not be a \u201ccredible threat of prosecu-\ntion\u201d. See Wisconsin Right to Life, Inc. v. Schober, 366 F.3d\n485 (7th Cir. 2004). Cf. Kendall-Jackson Winery, Ltd. v.\nBranson, 212 F.3d 995 (7th Cir. 2000). State officials made\nexactly that promise in Wisconsin Right to Life, and we held\nthat it demonstrated the absence of any real dispute. But\nour defendants did not make such a commitment in their\nbriefs, declined an opportunity to do so at oral argument,\nand adhered to that position in a post-argument letter.\n\fNo. 05-2479 5\n\n Decisions of district courts bind the litigants but have\nno authoritative effect elsewhere in the circuit (or even\nin the same district). See, e.g., Midlock v. Apple Vacations\nWest, Inc., 406 F.3d 453, 457-58 (7th Cir. 2005); Colby\nv. J.C. Penney Co., 811 F.2d 1119, 1124 (7th Cir. 1987). The\njudgment in Caterpillar was not appealed, so it will not lead\nto a decision with circuit-wide effect. None of the three\ndefendants in this litigation was a party to Caterpillar, and\nnone contends that as a matter of Illinois law a judgment\nadverse to one State\u2019s Attorney would bind any other.\nStates Attorneys operate within single counties; they are\nstate officials but are not \u201cthe\u201d state, and each may operate\nindependently, which implies that none is bound by a\njudgment against another. See People v. Gray, 214 Ill. 2d 1,\n10, 823 N.E.2d 555, 560 (2005) (a defendant\u2019s agreement\nwith one state\u2019s attorney does not bind any other). Cf.\nStaten v. Neal, 880 F.2d 962 (7th Cir. 1989). The Attorney\nGeneral does speak for the State of Illinois but cannot direct\nthe prosecution activities of the 102 States\u2019 Attorneys. See\nPeople v. Buffalo Confectionary Co., 78 Ill. 2d 531, 535-38,\n401 N.E.2d 546, 549-51 (1980).\n Federal officials are not bound by district judges\u2019 (or even\ncircuits\u2019) legal decisions; they must comply with the judg-\nment but need not apply the ruling more widely. As the\nCourt explained in United States v. Mendoza, 464 U.S. 154\n(1984), any other approach would prevent multiple circuits\nfrom considering a question and thus impede\nthe development of federal law. Illinois appears to take\nthe same view for domestic purposes. Although People v.\nWilliams, 2005 Ill. App. LEXIS 1099 (2d Dist. Nov. 3, 2005),\ncould be understood as holding that a judgment against one\nState\u2019s Attorney binds others, it is hard to reconcile with\ndecisions such as Gray.\n Perhaps more to the point, Caterpillar is a federal\njudgment under federal substantive law, so its preclusive\neffect is determined by federal rules. See Semtek Interna-\n\f6 No. 05-2479\n\ntional, Inc. v. Lockheed Martin Corp., 531 U.S. 497, 507\n(2001); Stoll v. Gottlieb, 305 U.S. 165, 171-72 (1938). The\nfederal rule is that judgments do not block public officials\nfrom seeking reconsideration of legal questions in future\nsuits. So Caterpillar lacks preclusive effect, and it has not\npersuaded our defendants to surrender. If Caterpillar\nhad been a decision of the Supreme Court, then its authori-\ntative force would obviate the need to worry about the scope\nof preclusion. The Hotel would not require addi-\ntional protection. See Lawson v. Hill, 368 F.3d 955 (7th Cir.\n2004) (an injunction against prosecution under a state flag-\ndesecration statute that is obviously unconstitutional, given\nUnited States v. Eichman, 496 U.S. 310 (1990), and Texas\nv. Johnson, 491 U.S. 397 (1989), would be both unnecessary\nand offensive to the state\u2019s dignity). A decision of a single\ndistrict judge does not give the Hotel that kind of shelter,\nand the defendants have declined to provide it voluntarily.\nThe Hotel therefore is entitled to decision on the merits.\n Resolution should not be difficult. Machinists holds that\nstates are forbidden to regulate on any subject that fed-\neral labor law reserves for the play of economic forces. See\nalso Building & Construction Trades Council v. Associated\nBuilders & Contractors of Massachusetts, 507 U.S. 218, 227-\n28 (1993); Wisconsin Department of Industry v. Gould Inc.,\n475 U.S. 282 (1986). Under federal labor law, just\nas workers are free to withhold their labor, so employers are\nfree to hire either temporary (see NLRB v. Mackay Radio &\nTelegraph Co., 304 U.S. 333, 345 (1938)) or permanent\n(NLRB v. Fleetwood Trailer Co., 389 U.S. 375 (1967))\nreplacements\u2014though employers can\u2019t give them super-\nseniority, compare NLRB v. Erie Resistor Corp., 373 U.S.\n221 (1963), with Trans World Airlines, Inc. v. Flight\nAttendants, 489 U.S. 426 (1989). The state\u2019s effort to make\nthe hiring of replacement workers a crime is so starkly\nincompatible with federal labor law, which prevails under\nthe Constitution\u2019s Supremacy Clause, that we do not\n\fNo. 05-2479 7\n\nunderstand how a responsible state legislature could pass,\na responsible Governor sign, or any responsible state official\ncontemplate enforcing, such legislation. States are entitled\nto protect replacement workers against fraud, see Belknap,\nInc. v. Hale, 463 U.S. 491 (1983), but the Strikebreakers Act\ndoes not do this; it is written as a substantive limit on the\nemployer\u2019s use of a particular economic tactic. Unless there\nis some way to support this law that state officials have yet\nto suggest\u2014either in Caterpillar or in this litigation\u2014a de-\nclaratory judgment should be issued with dispatch.\n The judgment is reversed, and the case is remanded\nfor decision on the merits.\n\nA true Copy:\n Teste:\n\n ________________________________\n Clerk of the United States Court of\n Appeals for the Seventh Circuit\n\n\n\n\n USCA-02-C-0072\u20141-10-06\n\f"} -{"text": " United States Court of Appeals\n Fifth Circuit\n F I L E D\n REVISED APRIL 17, 2006\n March 15, 2006\n IN THE UNITED STATES COURT OF APPEALS\n Charles R. Fulbruge III\n FOR THE FIFTH CIRCUIT Clerk\n\n\n\n No. 04-41757\n\n\n\nUNITED STATES OF AMERICA\n\n Plaintiff - Appellee\n\n v.\n\nJULIAN RODRIGUEZ-MESA\n\n Defendant - Appellant\n\n\n Appeal from the United States District Court\n for the Southern District of Texas\n\n\nBefore KING, BARKSDALE, and PRADO, Circuit Judges.\n\nPER CURIAM:\n\n Defendant-appellant Julian Rodriguez-Mesa pleaded guilty to\n\none count of transporting an alien and was sentenced to nineteen\n\nmonths in prison and two years of supervised release. The\n\nquestion presented in this appeal is whether the district court,\n\nin sentencing Rodriguez-Mesa, erred in applying the enhancement\n\nfor \u201cintentionally or recklessly creating a substantial risk of\n\ndeath or serious bodily injury to another person\u201d for Rodriguez-\n\nMesa\u2019s transportation of an illegal alien. See U.S. SENTENCING\n\nGUIDELINES MANUAL \u00a7 2L1.1(b)(5) (2003) [hereinafter U.S.S.G.].\n\n -1-\n\fAlthough we conclude that the district court did not err in\n\napplying the Guidelines, we must nevertheless VACATE and REMAND\n\nfor resentencing in light of United States v. Booker, 543 U.S.\n\n220 (2005).\n\n I. FACTUAL AND PROCEDURAL BACKGROUND\n\n On July 7, 2004, Julian Rodriguez-Mesa drove a Plymouth\n\nVoyager minivan to the Sarita, Texas border patrol checkpoint.1\n\nAfter observing that Rodriguez-Mesa appeared to be nervous, the\n\nborder patrol agent at the primary inspection point directed him\n\nto a secondary inspection for further investigation. At the\n\nsecondary inspection, agents discovered a male occupant, later\n\nidentified as Rosendo Ponce-Mata, a citizen of Mexico, in a\n\ncompartment that had been built in the center console of the\n\nminivan. The compartment was located between the front seats of\n\nthe vehicle, and there was a door located on top of the\n\ncompartment. The compartment covered half of Ponce-Mata\u2019s body,\n\nincluding his head and his torso, but his legs extended on to the\n\nfloorboard of the front passenger\u2019s side of the vehicle.\n\n Rodriguez-Mesa and Ponce-Mata were advised of their Miranda\n\nrights and both agreed to make statements to the border patrol\n\nagents. Rodriguez-Mesa admitted that he was transporting Ponce-\n\nMata in order to rid himself of a $400 debt that he owed to a man\n\n\n 1\n Rodriguez-Mesa was accompanied by Annie Rojas, who rode\nin the front passenger\u2019s seat. Rojas was processed and released\nat the checkpoint.\n\n -2-\n\fby the name of Ricardo Garcia of Houston, Texas. Rodriguez-Mesa\n\nstated that he picked up the minivan from Garcia and that Ponce-\n\nMata was already inside the vehicle when he took possession of\n\nthe minivan.\n\n In his statement, Ponce-Mata told the agents that he had\n\ncrossed into the United States illegally, without documentation,\n\nand that he had made arrangements to be smuggled from Mexico to\n\nHouston for $2000. Ponce-Mata claimed that when Rodriguez-Mesa\n\npicked him up on July 7, 2004, Rodriguez-Mesa instructed him to\n\nhide in the compartment located in the center console of the\n\nminivan.2 In his sworn deposition on August 3, 2004, Ponce-Mata\n\ngave a similar account to what he had earlier told the border\n\npatrol agents, but he added that he was not endangered by being\n\ntransported in the minivan\u2019s console area. He testified that he\n\nwas not locked in the compartment, had enough air to breathe, and\n\nwas able to feel the vehicle\u2019s air conditioning system.\n\n On July 28, 2004, Rodriguez-Mesa was charged in a one-count\n\nindictment with transporting an illegal alien in violation of 8\n\nU.S.C. \u00a7 1324(a)(1)(A)(ii) and (B)(ii). The indictment also\n\ncontained an additional section entitled \u201cAggravating Factor.\u201d\n\nThis section alleged that Rodriguez-Mesa \u201cintentionally or\n\nrecklessly created a substantial risk of death or serious bodily\n\n\n 2\n Rodriguez-Mesa refuted this statement at his\nrearraignment hearing, instead asserting that Ponce-Mata was\nalready inside of the compartment when he picked up the minivan.\n\n -3-\n\finjury to another person\u201d in violation of U.S.S.G. \u00a7 2L1.1(b)(5).\n\nWithout a written plea agreement, Rodriguez-Mesa pleaded guilty\n\nto the alien transporting charge, but he refused to plead guilty\n\nto the aggravating factor alleged in the indictment.3\n\n 3\n At his rearraignment hearing, the following exchange\noccurred between Rodriguez-Mesa and the district court in\ndiscussing his guilty plea:\n\n THE COURT: [W]hat is your plea to Count 1,\n guilty or not guilty?\n\n DEFENSE COUNSEL: Guilty, he\u2019ll say, except for the\n aggravating factor.\n\n THE COURT: I\u2019m not asking you to plead,\n [Defense Counsel]. Is this guilty\n or not guilty, Mr. Mesa?\n\n RODRIGUEZ-MESA: Guilty, except for the aggravating\n factor, Your Honor.\n\n THE COURT: Are you pleading guilty because you\n are in fact guilty?\n\n RODRIGUEZ-MESA: Of the smuggling, yes, ma\u2019am. Not\n of the aggravating factor.\n\n THE COURT: Pardon?\n\n RODRIGUEZ-MESA: I\u2019m pleading guilty to the smuggling\n of the illegal alien, but I don\u2019t\n feel that I\u2019m guilty about the\n aggravating factor.\n\n THE COURT: Why is that?\n\n RODRIGUEZ-MESA: He could have gotten up any time he\n wanted to. He wasn\u2019t in danger. He\n was--he could breathe. He had--he\n was actually sleeping. He had like\n a\u2013-\n\n THE COURT: Did he have a seat belt down there?\n\n\n -4-\n\f In the Presentence Report (\u201cPSR\u201d), the probation officer\n\nmade the following sentencing recommendations: The base offense\n\nlevel was 12, U.S.S.G. \u00a7 2L1.1(a)(2); six points were added\n\nbecause during the commission of the offense, Rodriguez-Mesa\n\n\u201crecklessly created a substantial risk of death or serious bodily\n\ninjury to another person by concealing an illegal alien in the\n\nconsole area of the transport vehicle,\u201d U.S.S.G. \u00a7 2L1.1(b)(5);\n\nand three points were subtracted for acceptance of\n\nresponsibility, U.S.S.G. \u00a7 3E1.1(a). Based on these adjustments,\n\nthe probation officer recommended a total offense level of 15.\n\nWith Rodriguez-Mesa\u2019s criminal history category of I, the\n\nrecommendation resulted in a guideline imprisonment range of\n\neighteen to twenty-four months.\n\n Rodriguez-Mesa filed written objections to the PSR,\n\ndisputing the six-level enhancement under U.S.S.G. \u00a7 2L1.1(b)(5)\n\non two grounds. First, he contended that, under Blakely v.\n\nWashington, 542 U.S. 296 (2004), the enhancement violated his\n\nSixth Amendment right to a jury trial because the judge used\n\nfacts not admitted by him or proven to a jury beyond a reasonable\n\ndoubt. Second, he argued that the enhancement for reckless\n\nendangerment was not supported by the facts. He alleged, as\n\nsupport, that Ponce-Mata\u2019s sworn deposition showed that Ponce-\n\n\n\n RODRIGUEZ-MESA: No, ma\u2019am.\n\n2 R. at 21-22.\n\n -5-\n\fMata was not in any danger, had enough air to breathe, and could\n\nhave opened the lid to the compartment at any time.\n\n In an addendum to the PSR, the probation officer maintained\n\nthat the increase was applicable, stating that\n\n [i]n respect to the Blakely objection, objections which\n deal with the constitutionality of a case will be\n addressed by the Court at sentencing. As per the\n reckless endangerment adjustment [pursuant to U.S.S.G.\n \u00a7 2L1.1(b)(5)], the defendant was transporting an illegal\n alien in a compartment built into the center console area\n of the transport vehicle. Had an accident occurred, the\n illegal alien would not be in a position to free himself.\n\n The district court overruled Rodriguez-Mesa\u2019s objections to\n\nthe PSR at sentencing. In rejecting Rodriguez-Mesa\u2019s Blakely\n\nobjection, the district court stated that it had to \u201cgo with the\n\nlaw of the Circuit\u201d4 and concluded that Rodriguez-Mesa was not\n\nentitled to a jury trial on the adjustment for reckless\n\nendangerment but that it would \u201cmake a finding, if any, by beyond\n\na reasonable doubt.\u201d After considering Ponce-Mata\u2019s sworn\n\ndeposition and photographs of the compartment and Ponce-Mata in\n\nthe compartment,5 the district court also rejected Rodriguez-\n\nMesa\u2019s objection to the reckless endangerment enhancement under\n\nU.S.S.G. \u00a7 2L1.1(b)(5). Specifically, the district court found\n\n\n\n\n 4\n See United States v. Pineiro, 377 F.3d 464, 465 (5th Cir.\n2004) (holding that \u201cBlakely does not extend to the federal\nGuidelines\u201d), vacated, 543 U.S. 1101 (2005).\n 5\n Rodriguez-Mesa does not dispute the accuracy of the\nphotographs that the government submitted as evidence.\n\n -6-\n\fthat the console was not designed for passenger use,6 the console\n\nlooked like it was the same size as from the factory, and Ponce-\n\nMata\u2019s \u201chead and upper body were stuffed in the console, and his\n\nfeet were twisted around underneath the glove compartment.\u201d7 The\n\ndistrict court concluded that the reckless endangerment\n\nenhancement should apply, \u201cfind[ing] beyond a reasonable doubt\n\nthat Mr. Rodriguez-Mesa created a substantial risk of serious\n\nbodily injury by transporting an illegal alien in that fashion.\u201d\n\nOn December 15, 2004, the district court sentenced Rodriguez-Mesa\n\nto nineteen months in prison and two years of supervised release.\n\n Rodriguez-Mesa now appeals, arguing that: (1) the district\n\ncourt erred in applying a six-level enhancement under U.S.S.G.\n\n\u00a7 2L1.1(b)(5); and (2) this court should vacate and remand for\n\nresentencing because he raised a Blakely objection at the\n\ndistrict court and the government has failed to prove that the\n\nerror was harmless beyond a reasonable doubt.\n\n II. STANDARD OF REVIEW\n\n Although the Supreme Court in Booker excised and struck down\n\nthe statutory provisions that made the Sentencing Guidelines\n\n\n\n\n 6\n See 3 R. at 11 (\u201cWell, sticking his head through the\ncenter console and wrapping his legs around the center console is\nnot a position, is not any way designed the way he was using this\nfor passenger use.\u201d).\n 7\n According to Ponce-Mata\u2019s sworn deposition, he is five\nfeet, six inches, weighing 170-180 pounds.\n\n -7-\n\fmandatory,8 \u201ca district court is still required to calculate the\n\nguideline range and consider it advisory.\u201d United States v.\n\nAngeles-Mendoza, 407 F.3d 742, 746 (5th Cir. 2005) (citing\n\nBooker, 543 U.S. at 245-46, and United States v. Mares, 402 F.3d\n\n511, 518-19 (5th Cir. 2005), cert. denied, 126 S. Ct. 43 (2005)).\n\nAfter Booker, we continue to review the district court\u2019s\n\ninterpretation and application of the Guidelines de novo and its\n\nfactual determinations for clear error. United States v. Solis-\n\nGarcia, 420 F.3d 511, 513-14 (5th Cir. 2005); see also United\n\nStates v. Villanueva, 408 F.3d 193, 203 n.9 (5th Cir. 2005)\n\n(noting that this court continues to review factual findings with\n\nrespect to the application of adjustments under the Guidelines\n\nfor clear error), cert. denied, 126 S. Ct. 268 (2005); United\n\nStates v. Villegas, 404 F.3d 355, 359 (5th Cir. 2005) (concluding\n\nthat this court continues after Booker to review the district\n\ncourt\u2019s interpretation and application of the Guidelines de\n\nnovo).9\n\n 8\n Booker, 543 U.S. at 259 (severing and excising \u201cthe\nprovision that requires sentencing courts to impose a sentence\nwithin the applicable Guidelines range (in the absence of\ncircumstances that justify a departure)\u201d) (citing 18 U.S.C.\n\u00a7 3553(b)(1)).\n 9\n There was some discussion at oral argument regarding\nSolis-Garcia\u2019s impact on our standard of review. In Solis-\nGarcia, this court noted that the standard of review has not\nchanged since Booker. See Solis-Garcia, 420 F.3d at 513-14\n(noting that this court continues to apply the same standard of\nreview to a sentence imposed under the Guidelines that we applied\nprior to Booker, i.e., we review the district court\u2019s\ninterpretation of the Guidelines de novo and the district court\u2019s\n\n -8-\n\f III. DISCUSSION\n\n Section 2L1.1(b)(5) provides that a defendant\u2019s base offense\n\nlevel must be at least 18 \u201c[i]f the offense involved\n\nintentionally or recklessly creating a substantial risk of death\n\nor serious bodily injury to another person . . . .\u201d U.S.S.G.\n\n\u00a7 2L1.1(b)(5). The commentary to \u00a7 2L1.1(b)(5) explains that\n\n [r]eckless conduct to which the adjustment from\n subsection (b)(5) applies includes a wide variety of\n conduct (e.g., transporting persons in the trunk or\n engine compartment of a motor vehicle, carrying\n substantially more passengers than the rated capacity of\n a motor vehicle or vessel, or harboring persons in a\n crowded, dangerous, or inhumane condition).\n\nU.S.S.G. \u00a7 2L1.1(b)(5) cmt. n.6.10 Besides the latter part of\n\nthe commentary, which mentions harboring persons in a dangerous\n\ncondition, nothing in the commentary directly speaks to\n\ntransporting an alien in a compartment located inside of a\n\nvehicle. See id. Although the factual scenario in this case is\n\nnot expressly included in this list of reckless conduct, this\n\n\n\nfactual determinations for clear error). Because there was no\nfactual dispute regarding the facts necessary to support the\nenhancement in Solis-Garcia, see id. at 514, the only question\nbefore the court was the application question--i.e., \u201c[w]hether\nSolis\u2019s conduct in transporting the illegal aliens qualifies as\n\u2018intentionally or recklessly creating a substantial risk of death\nor serious bodily injury to another person\u2019 as required for a\n\u00a7 2L1.1(b)(5) sentence enhancement\u201d--which was, under our\nstandard of review, considered de novo. Id.\n 10\n \u201c[C]ommentary in the Guidelines Manual that interprets\nor explains a guideline is authoritative unless it violates the\nConstitution or a federal statute, or is inconsistent with, or a\nplainly erroneous reading of, that guideline.\u201d Stinson v. United\nStates, 508 U.S. 36, 38 (1993).\n\n -9-\n\fcourt has not limited \u00a7 2L1.1(b)(5) to the examples mentioned in\n\nthe commentary. See United States v. Garcia-Guerrero, 313 F.3d\n\n892, 896 (5th Cir. 2002) (stating that \u201c[t]he commentary\n\nexpressly states that the adjustment applies to \u2018a wide variety\n\nof conduct\u2019\u201d).\n\n We have not found any published opinions that address the\n\nparticular circumstances created by Rodriguez-Mesa in\n\ntransporting an illegal alien in a compartment concealed between\n\nthe front passenger\u2019s seats. Most of our decisions addressing\n\nthe application of \u00a7 2L1.1(b)(5) involve transporting aliens\n\nunrestrained in the bed of a pickup truck or in an overcrowded\n\nvehicle without seats or seatbelts. See, e.g., Angeles-Mendoza,\n\n407 F.3d at 750-51 (concluding that the adjustment under\n\n\u00a7 2L1.1(b)(5) was appropriate where the \u201cdefendants smuggled\n\naliens in the back of their truck and modified the vehicle to\n\nallow more smuggled aliens to fit in by removing the back\n\nseats\u201d); United States v. Cuyler, 298 F.3d 387, 391 (5th Cir.\n\n2002) (holding that the defendant\u2019s act of transporting four\n\naliens in the bed of a pickup truck recklessly created a\n\nsubstantial risk of injury to the aliens); id. at 390-91 (citing\n\nnumerous circuit courts holding that \u00a7 2L1.1(b)(5) applies in\n\ncases where the defendant smuggled aliens in an overcrowded van,\n\noften without seats or seatbelts).\n\n These cases are not particularly relevant here. Although\n\nPonce-Mata was not wearing a seatbelt, in view of the fact that\n\n -10-\n\fhe was transported in a compartment located between the front\n\npassenger\u2019s seats, it seems less likely that Ponce-Mata would\n\nhave been thrown from the vehicle in the event of an accident.\n\nCf. Solis-Garcia, 420 F.3d at 516 (noting that transporting\n\nillegal aliens without requiring them to wear seatbelts is not by\n\nitself enough for the \u00a7 2L1.1(b)(5) enhancement). In addition,\n\nPonce-Mata was positioned directly beside Rodriguez-Mesa and\n\ncould have communicated any discomfort he may have experienced or\n\nin the case of an emergency. These factors distinguish this case\n\nfrom many of the cases cited above and from the examples cited in\n\nthe commentary. See U.S.S.G. \u00a7 2L1.1(b)(5) cmt. n.6; see also\n\nCuyler, 298 F.3d at 390-91.\n\n The parties both point to Solis-Garcia--our most recent\n\npublished decision addressing the application of U.S.S.G.\n\n\u00a7 2L1.1(b)(5)--as relevant and helpful in deciding whether the\n\ndistrict court in the present case erred. In Solis-Garcia, this\n\ncourt held that \u201cthe act of transporting four aliens lying in the\n\ncargo area of a minivan, with no aggravating factors, [does not]\n\nconstitute[] an inherently dangerous practice such as to create a\n\nsubstantial risk of death or serious bodily injury to those\n\naliens.\u201d 420 F.3d at 516 (emphasis added). In support of its\n\nholding, the court contrasted the facts in Solis-Garcia with\n\nthose in Cuyler, 298 F.3d at 388-89. The court noted that unlike\n\nan individual riding in the bed of a pickup truck who is not\n\nprotected by the passenger compartment of the vehicle, see\n\n -11-\n\fCuyler, 298 F.3d at 391, \u201c[a]n individual riding in the cargo\n\narea of a minivan has access to oxygen, is not exposed to extreme\n\nheat or cold, and can easily extricate himself from his position\n\non the floor of the van.\u201d Solis-Garcia, 420 F.3d at 516. The\n\ncourt also rejected the idea that \u00a7 2L1.1(b)(5) punishes\n\noffenders simply for transporting illegal aliens without\n\nrequiring them to wear seatbelts. Id. (\u201cThe \u00a7 2L1.1(b)(5)\n\nenhancement as written, one would think, does not extend so far\n\nas to increase punishment for offenders simply for transporting\n\nillegal aliens without requiring them to wear seatbelts.\u201d).\n\nRecognizing that the contours of \u00a7 2L1.1(b)(5) are dependent upon\n\ncarefully applying the guideline in a case-by-case analysis, the\n\ncourt concluded that the defendant did not create a substantial\n\nrisk of death or serious bodily injury. Id.\n\n Rodriguez-Mesa argues that the holding and reasoning of\n\nSolis-Garcia apply with equal force to his case and militate\n\nagainst the district court\u2019s application of the reckless\n\nendangerment enhancement. He contends that there is no\n\nmeaningful distinction between his case and Solis-Garcia because\n\nPonce-Mata had access to oxygen, was not exposed to extreme heat\n\nor cold, and could easily extricate himself from his position on\n\nthe floor of the minivan. See id. In contrast, the government\n\nclaims that Solis-Garcia stands for the proposition that the\n\nreckless endangerment enhancement does not apply to transporting\n\nillegal aliens who are not wearing seatbelts without proof of\n\n -12-\n\fadditional aggravating factors. According to the government,\n\nthis case involves aggravating factors that were not present in\n\nSolis-Garcia, thereby distinguishing it from the instant case.\n\n We agree with the government that this case is\n\ndistinguishable from our recent opinion in Solis-Garcia. Here,\n\nunlike Solis-Garcia, Ponce-Mata could not have easily extricated\n\nhimself from a position where \u201chis head and upper body were\n\nstuffed in the console, and his feet were twisted around\n\nunderneath the glove compartment.\u201d Cf. id. (stating that an\n\nindividual riding in the cargo area of a minivan \u201ccan easily\n\nextricate himself from his position on the floor of the van\u201d).\n\nThat Ponce-Mata was required to maintain this contorted position\n\non the floor of the minivan (for at least an hour before the\n\ncheckpoint and potentially for another 250 miles from the\n\ncheckpoint to Houston), with the upper half of his body stuffed\n\ninto the console and his arms pinned to his sides, suggests\n\nexposure to a \u201csubstantial risk of . . . serious bodily injury.\u201d\n\nSee Cuyler, 298 F.3d at 390 (stating that the illegal aliens who\n\nwere unrestrained in the bed of the pickup truck \u201calmost\n\ncertainly would have been injured in the event of an accident\u201d).\n\nContrary to Rodriguez-Mesa\u2019s assertions, the photographs indicate\n\nthat it would have been difficult to extricate Ponce-Mata,\n\nregardless of whether the lid of the console opened easily,\n\nbecause of Ponce-Mata\u2019s crammed position in the compartment. Cf.\n\nUnited States v. Dixon, 201 F.3d 1223, 1233 (9th Cir. 2000) (\u201c[A]\n\n -13-\n\fperson hiding inside a locked trunk could not extricate himself,\n\nwhile a person hiding in a hatchback area easily could extricate\n\nhimself by pushing up the lightweight, flimsy hatchback cover.\u201d).\n\n The presence of this additional aggravating factor--the\n\ninability of Ponce-Mata to extricate himself--distinguishes this\n\ncase from Solis-Garcia and supports the district court\u2019s\n\napplication of the reckless endangerment enhancement in this\n\ncase. Cf. Solis-Garcia, 420 F.3d at 516 (\u201cIn this case, it is\n\nnot asserted . . . that the aliens were subjected to any other\n\nrisks.\u201d). Accordingly, based on our own \u201ccase-specific\n\nanalysis,\u201d we conclude that the district court did not err in\n\napplying \u00a7 2L1.1(b)(5) to this set of facts. See id. (\u201cDefining\n\nthe contours of this enhancement is dependent upon carefully\n\napplying the words of the guideline in a case-specific\n\nanalysis.\u201d).\n\n Although we hold that the district court did not err in\n\napplying the reckless endangerment enhancement of U.S.S.G.\n\n\u00a7 2L1.1(b)(5), we must determine the effect that Booker has on\n\nRodriguez-Mesa\u2019s sentence.11 Rodriguez-Mesa argues that his\n\nsentence \u201cruns afoul of Booker in two separate, though related,\n\nways.\u201d First, he asserts that he received a sentence greater\n\n 11\n Here, unlike the court in Villegas, we must reach the\nBooker issue because we conclude that the district court did not\nerr in applying the Guidelines. Cf. Villegas, 404 F.3d at 364-65\n& n.8 (addressing \u201cantecedent error that the district court\ncommitted by misapplying the Guidelines\u201d and pretermitting review\nof alleged Booker error).\n\n -14-\n\fthan that authorized by the facts admitted by him, in violation\n\nof Booker\u2019s Sixth Amendment holding. Second, he alleges \u201cFanfan\n\nerror\u201d because the district court sentenced him under the\n\nmandatory application of the Guidelines. Rodriguez-Mesa\n\ncorrectly recognizes that there are two types of error addressed\n\nin Booker. See United States v. Walters, 418 F.3d 461, 463 (5th\n\nCir. 2005) (\u201cBooker error is found where the district court\n\napplied the mandatory Guidelines and enhanced a defendant\u2019s\n\nsentence on the basis of facts neither admitted by him nor found\n\nby a jury beyond a reasonable doubt, in violation of the Sixth\n\nAmendment[,]\u201d whereas \u201c\u2018Fanfan error\u2019 is found where the district\n\ncourt applied the mandatory Guidelines to enhance a defendant\u2019s\n\nsentence absent any Sixth Amendment Booker error.\u201d); see also\n\nVillegas, 404 F.3d at 364 (same). Regardless of whether\n\nRodriguez-Mesa\u2019s error is characterized as a Booker or Fanfan\n\nerror, he preserved that error by raising a Blakely objection in\n\nthe district court. Compare United States v. Garza, 429 F.3d\n\n165, 170 (5th Cir. 2005) (stating that a Blakely objection in the\n\ndistrict court preserves Booker error and reviewing under the\n\nharmless-error standard), cert. denied, 126 S. Ct. 1444 (2006),\n\nwith United States v. Gonzalez-Ribera, 2006 WL 319270, at *1 (5th\n\nCir. Feb. 13, 2006) (unpublished) (stating that a Blakely\n\nobjection in the district court preserves Fanfan error and\n\nreviewing for harmless error) (citing Walters, 418 F.3d at 463);\n\nsee also United States v. Rodriguez, 433 F.3d 411, 415-16 (4th\n\n -15-\n\fCir. 2006) (concluding that the defendant properly preserved his\n\nclaim of Fanfan error (\u201cstatutory Booker error\u201d) by raising a\n\ntimely Blakely objection at sentencing, and noting that the\n\ncourt\u2019s position that a Blakely objection preserves Fanfan error\n\nfor harmless-error review \u201cis consistent with the unanimous view\n\nof the nine courts of appeals to have considered the question[,]\u201d\n\nincluding the Fifth Circuit).\n\n When there is preserved Booker or Fanfan error, as here,\n\n\u201cthe only question is whether the government has met its burden\n\nto show harmless error beyond a reasonable doubt in the\n\nimposition of [the defendant\u2019s] sentence.\u201d12 Walters, 418 F.3d\n\nat 464. Although at least one panel of this court has questioned\n\nwhether the harmless beyond a reasonable doubt standard applies\n\nto a preserved Fanfan error,13 we are bound to follow Walters,\n\n 12\n Although Rodriguez-Mesa argues that Booker error is\nstructural and therefore insusceptible to harmless-error\nanalysis, we have rejected this argument on numerous occasions.\nSee United States v. Arnold, 416 F.3d 349, 362 n.23 (5th Cir.\n2005) (rejecting the argument that Booker error is structural and\ninsusceptible to harmless-error analysis, and stating that\n\u201c[n]either Booker error nor Fanfan error is structural\u201d), cert.\ndenied, 126 S. Ct. 504 (2005) (citing United States v. Malveaux,\n411 F.3d 558, 560 n.9 (5th Cir. 2005), cert. denied, 126 S. Ct.\n194 (2005), and United States v. Martinez-Lugo, 411 F.3d 597, 601\n(5th Cir. 2005), cert. denied, 126 S. Ct. 464 (2005)).\n 13\n See United States v. Mendoza-Blanco, 440 F.3d 264, 265\nn.7 (5th Cir. 2006) (stating that although the panel must follow\nthe panel\u2019s decision in Walters, \u201cwe note that the standard of\nreview it applied--requiring the Government to show that\npreserved Fanfan error was harmless beyond a reasonable doubt--\nwas not contested in the case and appears to be incorrect because\nFanfan error is nonconstitutional error\u201d but deciding that \u201cthe\nissue is irrelevant here because the Government cannot meet\n\n -16-\n\fwhich applied the harmless beyond a reasonable doubt standard to\n\na preserved Fanfan challenge. See United States v. Ruiz, 180\n\nF.3d 675, 676 (5th Cir. 1999) (noting that \u201cthis panel may not\n\noverrule or ignore a prior panel decision\u201d). Based on the record\n\nbefore us, we cannot say that the error was harmless beyond a\n\nreasonable doubt because the district court did not indicate what\n\nit would have done absent the mandatory Guidelines. Therefore,\n\nthe government has not met its burden of proving that the Booker\n\nor Fanfan error was harmless beyond a reasonable doubt.\n\n Accordingly, although we hold that the district court\u2019s\n\napplication of U.S.S.G. \u00a7 2L1.1(b)(5) was warranted here, we must\n\nnevertheless vacate and remand for resentencing in accordance\n\nwith Booker. See United States v. Palomares-Alcantar, 406 F.3d\n\n966, 968 (8th Cir. 2005) (holding that the district court\u2019s\n\napplication of \u00a7 2L1.1(b)(5) was warranted, but remanding the\n\ncase for resentencing under an advisory Guidelines regime).\n\n IV. CONCLUSION\n\n For the foregoing reasons, we AFFIRM Rodriguez-Mesa\u2019s\n\nconviction, VACATE Rodriguez-Mesa\u2019s sentence, and REMAND for\n\nresentencing in accordance with this opinion.\n\n\n\n\neither burden\u201d). Similarly, the government cannot meet either\nburden in the present case. See id.\n\n -17-\n\f"} -{"text": "\n156 F.Supp. 220 (1957)\nJohn AARON et al., Plaintiffs,\nv.\nWilliam G. COOPER et al., Defendants.\nCiv. A. No. 3113.\nUnited States District Court E. D. Arkansas, W. D.\nSeptember 21, 1957.\n*221 Wiley A. Branton, Pine Bluff, Ark., Thurgood Marshall, New York City, for plaintiffs.\nA. F. House, Little Rock, Ark., for defendants Cooper and others.\nOsro Cobb, U. S. Atty., Little Rock, Ark., Donald B. MacGuineas, Chief, Gen. Litigation Section, Carl Eardley, Special Litigation Counsel, Civil Division, Dept. of Justice, Washington, D. C., James W. Gallman, Asst. U. S. Atty., Little Rock, Ark., for the United States, as amicus curiae.\nThomas Harper, Fort Smith, Ark., Kay Matthews, Walter L. Pope, Little Rock, Ark., for defendants Faubus, Clinger, and Johnson.\nRONALD N. DAVIES, District Judge.\nThis cause having been heard upon separate applications of the United States, as amicus curiae, and of the plaintiffs for a preliminary injunction, and it appearing that:\n1. Certain Negro students have been accepted for admission to the Little Rock Central High School and are eligible to attend classes there in accordance with a plan for gradual school integration, adopted by the Little Rock School District on May 24, 1955, and applicable at the senior high school level upon the opening of the school term in the fall of 1957; this Court, by decree and judgment of August 28, 1956, approved said plan of gradual school integration and its decree was affirmed by the United States Court of Appeals for the Eighth Circuit, 243 F.2d 361; and this Court on September 3, 1957, ordered the members of the Little Rock School Board and the Superintendent of the Little Rock Public Schools to comply forthwith with the plan of school integration approved by this Court's decree of August 28, 1956, 143 F.Supp. 855, as to senior high school classes in the Little Rock School District.\n2. The foregoing orders of this Court confirmed and enforced the constitutional right of the Negro children involved to attend the Little Rock Central High School.\n3. On September 2, 1957, upon orders of Defendant Orval E. Faubus, Governor of the State of Arkansas, and in conformity therewith Defendant General Sherman T. Clinger, Adjutant General of the State of Arkansas, and Defendant Lt. Col. Marion E. Johnson, of the Arkansas National Guard, stationed members of the Arkansas National Guard at the Little Rock Central High School and said Defendant Governor Faubus ordered that the Arkansas National Guard prevent and restrain by force the Negro students, eligible to attend classes in *222 said high school under the plan of school integration referred to above, from entering the school and attending classes, and since September 2, 1957, Defendants Governor Faubus, General Clinger and Lt. Col. Johnson have prevented said Negro students from attending such school by the armed force of the Arkansas National Guard.\n4. The use of the Arkansas National Guard to deny access to the school by the Negro children upon the orders of the Defendant Governor Faubus obstructs and interferes with the carrying out and effectuation of this Court's orders of August 28, 1956, and September 3, 1957, contrary to the due and proper administration of justice.\n5. Although the use of the armed force of the State of Arkansas to deny access to the school by Negro children has been declared by Governor Faubus to be required to preserve peace and order, such use of the Arkansas National Guard was and is unlawful, and in violation of the rights of the Negro children under the Fourteenth Amendment as determined by this Court.\n6. An injunction is necessary in order to protect and preserve the judicial process of this Court, to maintain the due and proper administration of justice and to protect the rights guaranteed by the Constitution to the Negro children involved; now, therefore,\nIt is hereby ordered and decreed that Defendant Orval E. Faubus, Governor of the State of Arkansas, General Sherman T. Clinger, Adjutant General of the State of Arkansas, and Lt. Col. Marion E. Johnson of the Arkansas National Guard, their officers, agents, servants, employees, attorneys, all persons subject to their joint or several orders and directions, and all persons in active concert, participation or privity with them, be and they are hereby enjoined and restrained from hereafter (a) obstructing or preventing, by means of the Arkansas National Guard, or otherwise, Negro students, eligible under said plan of school integration to attend the Little Rock Central High School, from attending said school or (b) from threatening or coercing said students not to attend said school or (c) from obstructing or interfering in any way with the carrying out and effectuation of this Court's orders of August 28, 1956, and September 3, 1957, in this cause, or (d) from otherwise obstructing or interfering with the constitutional right of said Negro children to attend said school.\nProvided that this Order shall not be deemed to prevent Orval E. Faubus, as Governor of the State of Arkansas, from taking any and all action he may deem necessary or desirable for the preservation of peace and order, by means of the Arkansas National Guard, or otherwise, which does not hinder or interfere with the right of eligible Negro students to attend the Little Rock Central High School.\n\nFindings of Fact and Conclusions of Law\nThis cause having been heard upon the separate applications of plaintiffs and of the United States, as amicus curiae, for a preliminary injunction against defendants Orval E. Faubus, Governor of the State of Arkansas, Major General Sherman T. Clinger, Adjutant General of the State of Arkansas, and Lt. Col. Marion E. Johnson, Unit Commander of the Arkansas National Guard, the Court makes the following findings of fact and conclusions of law:\n\nFindings of Fact\n1. This action was brought by minor citizens and residents of the city of Little Rock, Arkansas, through their legal representatives, against the initial defendants, the Little Rock School District, its Board of Directors, and its Superintendent as a class action seeking integration of public schools in the Little Rock School District.\n2. On May 20, 1954 (three days after the Supreme Court's first decision in the public school segregation cases, Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873), the Little Rock School Board released a public statement to the effect that it was the Board's *223 responsibility to comply with federal constitutional requirements and they intended to do so when the Supreme Court of the United States outlined the method to be followed; and that during this interim period the Board would develop school attendance areas consistent with the location of white and colored pupils with respect to present and future facilities in the School District; would make the necessary revisions in pupil records in order that transition to an integrated school system might serve the best interest of the School District; and would make research studies needed for the implementation of a sound school program on an integrated basis.\n3. The School Board instructed the superintendent, defendant Virgil Blossom, to prepare a plan for the integration of the schools in the School District. Such a plan was prepared and approved by the Board on May 24, 1955. This plan is set forth verbatim in this Court's opinion entered in this case on August 27, 1956 (Aaron v. Cooper, 143 F.Supp. 855, 859), and the statement of the plan there set forth is incorporated herein by reference. Briefly, the plan provided for a three-phase program of integration. Phase 1 begins at the senior high school level (grades 10-12) and is scheduled to start in the fall of 1957 upon the completion of a new senior high school building. Phase 2 begins at the junior high school level (grades 7-9) and would start following successful integration at the senior high school level (estimated at two to three years). Phase 3 begins at the elementary level (grades 1-6) and would start after successful completion of phrases 1 and 2. Complete integration is planned to be effected not later than 1963.\n4. Subsequent to adoption of the plan, defendant Blossom read and explained it to approximately 200 groups in an effort to obtain public acceptance of its provisions and the resulting orderly integration of the schools. By its plan the School Board is seeking to integrate its schools and at the same time maintain and improve the quality of education available at these schools. Its objectives are to provide the best possible education that is economically feasible, to consider each child in the light of his individual ability and achievement, to provide necessary flexibility in the school curriculum from one attendance area to another, to select, procure, and train an adequate school staff, to provide the opportunity for children to attend school in the attendance area where they reside, to attempt to provide information necessary for public understanding, acceptance, and support, and to provide a \"teachable\" group of children for each teacher.\n5. At the present time there are four senior high schools in the School District. Central High School has been an all-white high school and accommodates approximately 2,000 students. Technical High School has been an all-white school and will accommodate approximately 250 students. Horace Mann High School has been an all-Negro school and will accommodate 925 students. Construction of the Hall High School, which accommodates 925 students, has recently been completed and it is in operation this current term.\n6. In accordance with its plan, the School Board has reorganized its attendance areas. Under the plan Technical High School will remain a city-wide school for all students, but Central, Horace Mann, and Hall High Schools will each have separate attendance areas. There are two Negro students at the senior high school level residing in the Hall High School attendance area, and there are numbers of Negro and white students residing in the Central and Horace Mann High School attendance areas.\n7. In preparing for integration, the school authorities have established attendance areas, studied the aptitudes of the children, started an in-service program for staff members, a program of information to members of the community, and other appropriate steps.\n8. As stated in the plan, the School Board is prepared to start integration *224 in the fall of 1957 at the high school level. Its reason for starting at that level is that fewer students, teachers, buildings, etc., will be involved and the school authorities hope to be able to learn by experience and to be better able to enter the next phase of the plan.\n9. The defendant school authorities have worked diligently in a good faith effort to prepare and to effectuate a plan of integration that will be to the best interest of all parties and to the public. Superintendent Blossom is a highly qualified and experienced school administrator and has given much thought and study to the many problems relating to integration. He has had the cooperation of the School Board in his effort to achieve integration without lowering the quality of education offered to all the school children.\n10. On August 28, 1956, this Court, after a full trial, entered its decree and judgment approving the plan of school integration adopted by the School District on May 24, 1955, and ordering that jurisdiction of this case be retained for the purpose of entering such other and further orders as might be necessary to obtain the effectuation of the plan. On April 26, 1957, that decree and judgment was affirmed by the United States Court of Appeals for the Eighth Circuit (243 F.2d 361).\n11. The City of Little Rock has a long history of peaceful and amicable relations between the white and Negro races. Approximately 20 percent of the population is colored. The Negroes reside in scattered sections of the city, and some neighborhoods are composed of both white and colored residents. For at least twenty-five years there has been no reported incident of violence arising from racial tension, either between adults or between children of school age. In January 1956, the city public transportation system abolished the previously existing arrangement of seating whites and Negroes in separate sections of the buses. No incident of violence as a result of this change has come to the attention of the city authorities.\n12. In preparation for the carrying out of the school plan at the senior high school level at the opening of the fall term, 1957, the superintendent and the principals of the senior high schools arranged for colored students who reside in the Central High School attendance area to elect whether or not they desired to attend that school. Approximately 40 to 50 such students elected to attend that school. Their records were carefully studied by the school authorities. They approved the applications of 13 of these colored students on the basis of their scholastic ability, their general deportment, their character, and their health, determining that these 13 students were particularly well suited to make the adjustment involved in their attending a school theretofore composed solely of white children. The superintendent and the high school principals held several meetings with these students and their parents to prepare them for the adjustments necessary to their attending Central High School. All steps necessary to the transfer of these students and their enrollment in Central High School were completed before the opening of the fall term, 1957. Four of these 13 colored students chose not to transfer to Central High School. Consequently, the carrying out of the school plan for this term involved the placing of only 9 colored students in a student body of approximately 2,000. The faculty and the white student body at Central High School were prepared to accept the 9 colored children as fellow students.\n13. On the evening of September 2, 1957, the Governor of Arkansas and the Adjutant General of Arkansas, who is the commanding officer of the Arkansas National Guard (acting under orders issued to him by the Governor), stationed units of the Arkansas National Guard at the Little Rock Central High School. Those guardsmen were under the command of Lt. Col. Marion E. Johnson. On September 2, 1957, the Governor of Arkansas issued to the Adjutant General an order directing him to place off limits to white students those schools for colored *225 students and to place off limits to colored students those schools theretofore operated and recently set up for white students; and that this order was to remain in effect until the demobilization of the Guard or until further orders. This order was in effect at the time of the hearing in this case on September 20, 1957.\n14. Up to this time, no crowds had gathered about Central High School and no acts of violence or threats of violence in connection with the carrying out of the plan had occurred. Nevertheless, out of an abundance of caution, the school authorities had frequently conferred with the Mayor and Chief of Police of Little Rock about taking appropriate steps by the Little Rock police to prevent any possible disturbances or acts of violence in connection with the attendance of the 9 colored students at Central High School. The Mayor considered that the Little Rock police force could adequately cope with any incidents which might arise at the opening of school. The Mayor, the Chief of Police, and the school authorities made no request to the Governor or any representative of his for State assistance in maintaining peace and order at Central High School. Neither the Governor nor any other official of the State government consulted with the Little Rock authorities about whether the Little Rock police were prepared to cope with any incidents which might arise at the school, about any need for State assistance in maintaining peace and order, or about stationing the Arkansas National Guard at Central High School.\n15. The fall term at Central High School began on September 3, but none of the 9 eligible colored students appeared at the school that day because they had been advised not to do so since the National Guard was stationed at the school. On the evening of September 3, however, these students were advised by school officials to attend Central High School the next morning.\n16. On the morning of September 4, 1957, the units of the National Guard at the Central High School, acting pursuant to the Governor's order, stood shoulder to shoulder at the school grounds and thereby forcibly prevented the 9 Negro students, who were eligible under the School Board's plan to attend that school, from entering the school grounds. At that time, a crowd of spectators congregated across the street from the school grounds. No acts of violence were committed or threatened by the crowd, although some of them made rude and disparaging remarks about the colored students. The guardsmen made no effort to disperse the crowd or to assist and protect the colored students in their efforts to enter the school. They did not prevent any white students from entering the school. The evidence indicates that the Arkansas National Guard, which is composed of 10,500 men, could have maintained peace and order without preventing the eligible colored students from attending Central High School.\n17. On September 3, 1957, the Court, upon consideration of a Petition for Instruction filed in this cause on that date by the defendant school authorities, ordered that they integrate, in accordance with their plan approved by the Court, the senior high school grades in the School District forthwith. On September 7, 1957, the Court denied the application of the School District for a stay of the Court's order of September 3.\n18. Since September 2, and up to the time of the hearing in this Court on September 20, 1957, the units of the Arkansas National Guard have remained at Central High School and have continued to prevent eligible Negro students from attending the school, pursuant to the order issued to them by the Governor of Arkansas through the Adjutant General of Arkansas. The acts of Governor Faubus, General Clinger, and Lt. Col. Johnson in preventing, by means of the Arkansas National Guard, eligible Negro students from attending Central High School directly obstruct and interfere with the carrying out and effectuation of this Court's orders of August 28, 1956, and September 3, 1957, contrary to the *226 due and proper administration of justice.\n19. The minor plaintiffs and the other Negro students who are eligible under the School District's plan to attend Central High School have suffered immediate and irreparable injury from said acts of Governor Faubus, General Clinger, and Lt. Col. Johnson, in that the colored students were forcibly deprived of their right to attend Central High School in accordance with the School Board's plan, this Court's orders of August 28, 1956, and September 3, 1957, and the Federal Constitution. The minor plaintiffs and other eligible Negro students on whose behalf this suit is brought have no adequate legal remedy and are entitled to a preliminary injunction against Governor Faubus, General Clinger, and Lt. Col. Johnson restraining them from obstructing or preventing, by means of the Arkansas National Guard or otherwise, eligible Negro students from attending Central High School, from threatening or coercing said students not to attend said school, from otherwise obstructing or interfering in any way with the carrying out and effectuation of this Court's orders of August 28, 1956, and September 3, 1957, and from otherwise obstructing or interfering with the constitutional right of said Negro students to attend said school.\n20. Such injunction is necessary in order to protect and preserve the judicial process of the Court, to maintain the due and proper administration of justice, and to protect the constitutional rights of the minor plaintiffs and other eligible Negro students on whose behalf this suit is brought.\n\nConclusions of Law\n1. This Court has jurisdiction of the subject matter of this action and of the parties.\n2. The Governor of Arkansas, as Chief Executive and Commander-in-Chief of its military forces, has a vital interest in the maintenance of law and order and broad discretionary powers to suppress insurrection and to preserve the peace. Article 6, Section 6, of the Constitution of the State expressly provides that:\n\"The Governor shall be commander-in-chief of the military and naval forces of the State, except when they shall be called into the actual service of the United States.\"\nArticle 6, Section 7, provides that the Governor \"shall see that the laws are faithfully executed\".\nAs the Chief Executive of the state, he is appropriately vested with the discretion to determine whether an exigency requiring military state aid for that purpose has arisen.\n3. The Governor does not, however, have lawful authority to use the National Guard to deprive the eligible colored students from exercising their right to attend Central High School, which right is guaranteed by the Federal Constitution, the School District plan of integration, and the Court's orders entered in this cause. If it be assumed that the Governor was entitled to bring military force to the aid of civil authority, the proper use of that power in this instance was to maintain the Federal Court in the exercise of its jurisdiction, to aid in making its process effective and not to nullify it, to remove, and not to create, obstructions to the exercise by the Negro children of their rights as judicially declared.\n4. This action is not a suit against the State of Arkansas. It does not seek to invalidate any provision of Arkansas statute or of the Arkansas Constitution. It merely seeks to enjoin the Governor and other officials of the state from committing acts beyond their lawful authority and contrary to the Federal Constitution.\n5. The acts of defendants Governor Orval E. Faubus, Governor of the State of Arkansas, General Sherman T. Clinger, Adjutant General of Arkansas, and Lt. Col. Marion E. Johnson, Unit Commander of the Arkansas National Guard, in forcibly preventing colored students, *227 who are eligible under the School Board's plan to attend Central High School, from doing so are beyond their lawful authority. Said acts unlawfully obstruct and interfere with the carrying out and effectuation of the Court's orders of August 28, 1956, and September 3, 1957, contrary to the due and proper administration of justice; and they violate the constitutional rights of said colored children.\n6. An injunction against said Governor Faubus, General Clinger, and Lt. Col. Johnson is necessary in order to protect and preserve the judicial process of the Court, to maintain the due and proper administration of justice, and to protect the constitutional rights of the minor plaintiffs and other eligible Negro students on whose behalf this suit is brought.\n"} -{"text": "458 F.2d 159\nU. S.v.Shook\n72-1128, 72-1129\nUNITED STATES COURT OF APPEALS Second Circuit\nMay 1, 1972\n\n1\nS.D.N.Y.\n\n"} -{"text": "\n579 N.W.2d 460 (1998)\n228 Mich. App. 674\nCITY OF ANN ARBOR, Plaintiff-Appellee,\nv.\nMark Eugene McCLEARY, Defendant-Appellant\nDocket No. 196565.\nCourt of Appeals of Michigan.\nSubmitted October 8, 1997, at Detroit.\nDecided March 17, 1998, at 9:25.\nReleased for Publication June 29, 1998.\n*462 Susan L. Cameron, Assistant City Attorney, Ann Arbor, for plaintiff.\nDykema Gossett, PLLP by Jonathan D. Rowe and Steven A. Susswein, Ann Arbor, for defendant.\nLawrence J. Bunting, Troy, amicus curiae for Mich. Municipal League.\nMartha G. Mettee, Bay County Asst. Pros. Atty., Bay City, amicus curiae for Prosecuting Attorneys Ass'n of Mich.\nBefore FITZGERALD, P.J., and MARKEY and J.B. SULLIVAN[*], JJ\n*461 MARKEY, Judge.\nDefendant appeals by leave of this Court from his conviction under Ann Arbor City Code \u00a7 10:87(1) of operating a vehicle under the influence of intoxicating liquor (OUIL).[1] We affirm.\nEarly in the morning of May 27, 1994, an Ann Arbor police officer observed defendant drive through a flashing red light without attempting to stop or even slow his car, leading the officer to initiate a traffic stop. The officer testified that defendant exhibited various signs of drunkenness, including smelling strongly of alcohol. The officer administered several field sobriety tests, which defendant failed; consequently, the officer took defendant into custody for further proceedings. This appeal arises from what happened after defendant's arrest.\nDefendant initially declined to submit to a Breathalyzer test, because he first wished to consult with his attorney. The police allowed defendant a brief telephone call to his lawyer but kept him under observation at the station pursuant to policy. Shortly after that call, defendant's lawyer came to the police station and asked to speak privately with defendant. The police declined the request, but, again consistent with policy, allowed defendant and his lawyer to speak by telephone from different parts of the facility.\nDefendant's lawyer testified that during this conversation he spoke within \"earshot\" of a police officer in a hectic and congested environment and that under these circumstances he \"did not have the opportunity to give [defendant] any instruction or advice\" concerning whether to take the Breathalyzer test. He did not, however, elaborate regarding how he was precluded from providing effective assistance to his client. Nonetheless, after this second telephone conversation with his attorney, defendant chose to take the Breathalyzer test.\nM.C.L. \u00a7 257.625c(1); M.S.A. \u00a7 9.2325(3)(1) provides that drivers on Michigan roads are presumed to consent to alcohol testing when suspected of drunk driving. Persons who do not voluntarily take such tests remain subject to court-ordered testing and to automatic license suspension in addition to other penalties imposed on a person found guilty of driving under the influence of alcohol.\nBefore trial, defendant moved to suppress the results of the Breathalyzer test on the ground that the police had not afforded him a proper opportunity to elect whether to take the test. The district court denied the motion. The court admitted into evidence the results from the Breathalyzer test showing *463 that defendant's blood alcohol level was twice the legal limit when he was arrested. The jury convicted defendant of operating a vehicle under the influence of intoxicating liquor \"and/or operating a motor vehicle with an unlawful blood alcohol level.\" Defendant appealed to the circuit court on the ground that the Breathalyzer results were improperly admitted at trial. The circuit court upheld the district court's ruling in the matter.\nDefendant now presents to this Court the question whether, if the police allow an OUIL suspect in custody to confer with his attorney before deciding whether to submit to a Breathalyzer test, the police must endeavor to provide the suspect and attorney an opportunity for a private conference. Defendant further asks this Court to dismiss the charges against him if we find constitutional error or, alternatively, to declare that Breathalyzer test results must be suppressed at trial when obtained under the circumstances of the instant case.\nDefendant frames his argument exclusively as one implicating the right to counsel provision of the Michigan Constitution, art. 1, \u00a7 20, arguing that the Michigan Constitution provides a broader right to counsel than does the Sixth Amendment of the United States Constitution. Defendant declines to invoke the due process provisions of either the Michigan or federal constitutions.\nThis Court has stated repeatedly that there is no right to counsel in deciding whether to submit to a Breathalyzer test. Underwood v. Secretary of State, 181 Mich.App. 168, 172, 448 N.W.2d 779 (1989) (\"the police could require petitioner to make his decision to take the test in the absence of counsel\"); People v. Burhans, 166 Mich.App. 758, 764, 421 N.W.2d 285 (1988) (\"[t]his Court has held that there is no right to counsel prior to the taking of the Breathalyzer test due to the minimal risk that defense counsel's absence will harm a defendant's right to a fair trial\"); People v. Jelneck, 148 Mich.App. 456, 460-461, 384 N.W.2d 801 (1986) (\"[n]or does the Sixth Amendment right to counsel attach prior to the taking of the Breathalyzer test\"); Holmberg v. 54-A Judicial Dist. Judge, 60 Mich.App. 757, 760, 231 N.W.2d 543 (1975) (\"denial of the right to consult with counsel before an accused decides whether to take the Breathalyzer test does not violate the Sixth Amendment\"). See also McVeigh v. Smith, 872 F.2d 725, 728 (C.A.6, 1989) (declaring that there is no Sixth Amendment right to counsel, or Fifth or Fourteenth Amendment due process right to counsel, when deciding whether to submit to a blood alcohol test).[2]\nThis Court has also stated generally that \"art. 1, \u00a7 20 of the Michigan Constitution affords no greater rights than those guaranteed by the federal constitution.\" People v. Justice, 216 Mich.App. 633, 636, n. 2, 550 N.W.2d 562 (1996). In another 1996 case, this Court held that \"`\"[u]nless there is a compelling reason to afford greater protection under the Michigan Constitution, the Michigan and federal [right to counsel] provisions will be treated as affording the same protections.\"'\" People v. Richert (After Remand), 216 Mich.App. 186, 193, 548 N.W.2d 924 (1996), quoting People v. Hellis, 211 Mich.App. 634, 648, 536 N.W.2d 587 (1995), *464 quoting People v. Perlos, 436 Mich. 305, 313, n. 7, 462 N.W.2d 310 (1990).\nThe Supreme Court found such a \"compelling reason\" in one particular case, having declared that the Michigan Constitution \"imposes a stricter requirement for a valid waiver of the rights to remain silent and to counsel than imposed by the federal constitution.\" People v. Bender, 452 Mich. 594, 611, 551 N.W.2d 71 (1996), citing People v. Wright, 441 Mich. 140, 147, 155, 170, 490 N.W.2d 351 (1992). In contrast to the federal constitution as interpreted by the federal courts, our Supreme Court held that under the Michigan Constitution, \"in order for a defendant to fully comprehend the nature of the right being abandoned and the consequences of his decision to abandon it, he must first be informed that counsel, who could explain the consequences of a waiver decision, has been retained to represent him.\" Bender, supra at 612-613, 551 N.W.2d 71. While Bender buttresses defendant's argument that the Michigan Constitution provides a broader right to counsel than does the federal constitution, the exception articulated in Bender involves identifying a knowing and intelligent waiver of the right to counsel during custodial interrogation, a question not at issue in the instant case.\nDefendant cites Hall v. Secretary of State, 60 Mich.App. 431, 231 N.W.2d 396 (1975), as establishing a \"qualified right to counsel\" for drunk-driving suspects. In Hall, the plaintiff challenged his license revocation in a civil proceeding after he refused to take a Breathalyzer test because the police would not permit him to contact either his attorney or his wife for seven hours after his arrest. Contrary to defendant's assertions, it is the opportunity to make a telephone call, not the opportunity for privacy, that Hall protects. Nevertheless, defendant attempts to extend Hall to require that if police allow an OUIL suspect access to counsel before administering a Breathalyzer test, they must also provide accommodations for privacy beyond those ordinarily provided for detained OUIL suspects and their visitors. Any such extension of Hall is unwarranted and unsupportable.\nThe great weight of authority establishes that there is no right to counsel under U.S. Const., Am. VI, or Const.1963, art. 1, \u00a7 20. Thus, for a defendant deciding whether to take a Breathalyzer test, neither of these provisions entitles a defendant to successfully protest police refusal to permit an OUIL suspect and his attorney to privately confer over that decision. The Michigan Supreme Court's broadening of Michigan's right to counsel beyond the provisions of the United States Constitution, Bender, supra, involves waiver of that right, not attorney-client communications that take place before the right has attached.\nDefendant also cites M.C.L. \u00a7 767.5a(2); M.S.A. \u00a7 28.945(1)(2), which provides in pertinent part that \"[a]ny communications between attorneys and their clients ... are hereby declared to be privileged and confidential when those communications were necessary to enable the attorneys... to serve as such attorney....\" This provision of the Code of Criminal Procedure does not entitle defendant to a private conversation with his attorney, however. Rather, assuming that defendant's telephone conversation with his attorney cannot be held in private, M.C.L. \u00a7 767.5a(2); M.S.A. \u00a7 28.945(1)(2) guarantees that the content of their conversation is protected by the attorney-client privilege. Thus, whether held in a private or public place, defendant's conversation with his attorney cannot be used against him because it is confidential under the attorney/client privilege. Further, M.C.L. \u00a7 767.5a; M.S.A. \u00a7 28.945(1) protects selected types of communications from compelled disclosure in subsequent criminal proceedings. Indeed, the Legislature, in providing these protections to ensure the sanctity of a client's communications with his attorney, obviously did not intend to also grant such communicators an absolute right to demand privacy whenever and wherever they choose to communicate.\nAccordingly, if the police have a reasonable policy that disallows private meetings between arrested OUIL suspects and visitors before the police administer blood alcohol tests, neither Hall nor any other case cited to us requires different or private accommodations *465 when the visitor happens to be an attorney hoping to advise the suspect. Likewise, M.C.L. \u00a7 767.5a(2); M.S.A. \u00a7 28.945(1)(2) does not override these reasonable police policies and create a right to exercise the attorney-client relationship where no right to counsel exists.\nNotably, defendant does not argue that the Ann Arbor police withheld from defendant and his attorney accommodations that police normally allowed suspects and their visitors. Defendant instead insists that if an OUIL suspect's visitor happens to be a lawyer, then police are obliged to afford additional accommodations out of respect for the attorney-client privilege. We find no support for this assertion and refuse to impose such an obligation.\nMoreover, even assuming that the police erred in not granting defendant and his attorney privacy while they discussed whether defendant would submit to the Breathalyzer, we find that this preserved, nonconstitutional error was harmless. People v. Mateo, 453 Mich. 203, 206-207, 214-215, 221, 551 N.W.2d 891 (1996), requires us to examine the record as a whole and determine the actual prejudicial effect of the error on the factfinder, considering the likely effect of the error in light of the other evidence. \"Simply stated, and employed in both federal rule and case law and state statute and court rule, reversal is only required if the error was prejudicial. That inquiry focuses on the nature of the error and assesses its effect in light of the weight and strength of the untainted evidence.\" Id. at 215, 551 N.W.2d 891.\nBy the time defendant spoke to his attorney, a police officer had obtained a warrant to transport defendant to the University of Michigan Hospital to have his blood drawn and blood alcohol level tested. Thus, the police would have obtained the same incriminating information from defendant no matter how his counsel had advised him.\nBecause we find that defendant failed to establish a legal error in the circumstances leading to his taking of the Breathalyzer test, we need not reach the question regarding the proper remedy should evidence from such a test improperly be admitted at trial.\nAffirmed.\nNOTES\n[*] Former Court of Appeals judge, sitting on the Court of Appeals by assignment.\n[1] Defendant was charged and, as seen on the jury verdict form, convicted of both OUIL and unlawful blood alcohol level (UBAL), Ann Arbor City Code \u00a7 10:87(2). The judgment of sentence reflects only the OUIL conviction, however. We believe that this oversight was a clerical error of little or no import.\n[2] Defendant cites Arizona v. Holland, 147 Ariz. 453, 456, 711 P.2d 592 (1985), in support of his assertion that if a person suspected of driving while under the influence is permitted to consult with his attorney, he has a right to do so in private even though he is not entitled to the consultation in deciding whether to take a Breathalyzer test. He also cites other cases from foreign jurisdictions where similar results are reached, based in part on state statutes explicitly ensuring the privacy of detainee/attorney conversations. See Dobbins v. Ohio Bureau of Motor Vehicles, 75 Ohio St.3d 533, 535, 664 N.E.2d 908 (1996). We find these cases unpersuasive and nonbinding on this Court. Notably, defense counsel did not testify, as in Holland, regarding how he was precluded from offering assistance to defendant merely because the two had to speak to each other over the telephone. Moreover, Michigan does not have a statute ensuring private communications with an attorney after arrest or detention as in Dobbins, supra. Finally, defendant's decision to take or not take the Breathalyzer test was irrelevant in light of the warrant that the police possessed enabling them to have defendant's blood drawn. Thus, any claimed effect on the right to effective assistance of counsel is without merit because the police would have obtained defendant's blood alcohol reading by one of two methods, i.e., any claimed error was harmless.\n"} -{"text": " FILED\n NOT FOR PUBLICATION\n JUL 24 2018\n UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK\n U.S. COURT OF APPEALS\n\n\n FOR THE NINTH CIRCUIT\n\n\nDONALD J. TAYLOR, an individual ) No. 16-35775\nand citizen of the State of )\nWashington, ) D.C. No. 4:16-cv-05023-SMJ\n )\n Plaintiff-Appellant, ) MEMORANDUM*\n )\n v. )\n )\nCOMMISSIONER OF INTERNAL )\nREVENUE, )\n )\n Defendant-Appellee. )\n )\n\n Appeal from the United States District Court\n for the Eastern District of Washington\n Salvador Mendoza, Jr., District Judge, Presiding\n\n Submitted July 10, 2018**\n Seattle, Washington\n\nBefore: FERNANDEZ and NGUYEN, Circuit Judges, and RAKOFF,*** District\nJudge.\n\n\n *\n This disposition is not appropriate for publication and is not precedent\nexcept as provided by 9th Cir. R. 36-3.\n **\n The panel unanimously finds this case suitable for decision without oral\nargument. Fed. R. App. P. 34(a)(2).\n ***\n The Honorable Jed S. Rakoff, Senior United States District Judge for the\nSouthern District of New York, sitting by designation.\n\f Donald J. Taylor, a tax return preparer, appeals the district court\u2019s dismissal\n\nfor lack of jurisdiction of his action against the Commissioner of Internal Revenue\n\nfor abatement of penalties assessed against him and for refund of amounts paid\n\ntoward those penalties. We affirm.\n\n Taylor prepared tax returns that were filed by various taxpayers, and after an\n\ninvestigation, the United States Internal Revenue Service (\u201cIRS\u201d) assessed tax-\n\nreturn-preparer penalties against him. See 26 U.S.C. \u00a7 6694(a), (b). In general,\n\ndistrict courts do not have subject matter jurisdiction over actions for refund of\n\namounts paid on a penalty assessment unless the assessment has been paid in full.\n\nSee Thomas v. United States, 755 F.2d 728, 729 (9th Cir. 1985); see also Flora v.\n\nUnited States, 357 U.S. 63, 72\u201376, 78 S. Ct. 1079, 1085\u201386, 2 L. Ed. 2d 1165\n\n(1958), aff\u2019d on reh\u2019g, 362 U.S. 145, 176\u201377, 80 S. Ct. 630, 647, 4 L. Ed. 2d 623\n\n(1960). Taylor did not pay any of the penalties in full; on the contrary, he directed\n\nthat his payments be allocated to a payment of fifteen percent on each separate\n\npenalty. See Buffalow v. United States, 109 F.3d 570, 574 (9th Cir. 1997).\n\nNevertheless, Taylor asserts that he came within the exception provided by 26\n\nU.S.C. \u00a7 6694(c). We disagree.\n\n That exception does confer district court jurisdiction when a tax return\n\n\n\n 2\n\fpreparer has paid at least fifteen percent of a penalty,1 if he commences his refund\n\naction within thirty days after the earlier of: the IRS\u2019 denial of his claim for refund,\n\nor \u201cthe expiration of 6 months after the day on which he filed the claim for\n\nrefund.\u201d2 Taylor did not file within those time limits. He suggests that \u00a7 6694(c)\n\ndoes not require that he do so. However, we have already construed a different\n\nsection which, with trivial exceptions not relevant here, contains precisely the same\n\nlanguage.3 See 26 U.S.C. \u00a7 6703(c)(1), (2). In considering that section we held\n\nthat \u201conce a plaintiff misses the six-month-plus-30-day deadline, the district court\n\nlacks jurisdiction over the refund suit unless the taxpayer pays the entire penalty\n\nfirst.\u201d Korobkin v. United States, 988 F.2d 975, 976 (9th Cir. 1993) (per curiam);\n\nsee also Thomas, 755 F.2d at 729\u201330. The use of the same language in \u00a7 6694(c)\n\nand \u00a7 6703(c) strongly suggests that we should apply the same interpretation to the\n\nsections. See Northcross v. Bd. of Educ., 412 U.S. 427, 428, 93 S. Ct. 2201, 2202,\n\n\n\n 1\n 26 U.S.C. \u00a7 6694(c)(1).\n 2\n Id. at (2).\n 3\n That even includes the section headings to the extent that considering them\nwould be a proper aid to interpretation. See 26 U.S.C. \u00a7 7806(b); see also Fla.\nDep\u2019t of Revenue v. Piccadilly Cafeterias, Inc., 554 U.S. 33, 47, 128 S. Ct. 2326,\n2336, 171 L. Ed. 2d 203 (2008); Bhd. of R.R. Trainmen v. Balt. & Ohio R.R. Co.,\n331 U.S. 519, 528\u201329, 67 S. Ct. 1387, 1392, 91 L. Ed. 1646 (1947).\n\n\n 3\n\f37 L. Ed. 2d 48 (1973) (per curiam). In any event, we see no basis for holding that\n\nthe \u00a7 6694(c) language should be construed to mean something different from the\n\n\u00a7 6703(c) language.\n\n Moreover, the district court did not abuse its discretion4 when it declined to\n\nhear Taylor\u2019s newly minted argument that he could found jurisdiction on the\n\ndivisibility exception.5 That argument was first presented to the district court at\n\noral argument on the motion to dismiss, and contradicted the fifteen percent basis\n\nargument upon which the complaint and briefing6 rested.\n\n AFFIRMED.\n\n\n\n\n 4\n See Preminger v. Peake, 552 F.3d 757, 769 n.11 (9th Cir. 2008); 389\nOrange St. Partners v. Arnold, 179 F.3d 656, 665\u201366 (9th Cir. 1999); see also\nUnited States v. Hinkson, 585 F.3d 1247, 1261\u201363 (9th Cir. 2009) (en banc).\n 5\n See Korobkin, 988 F.2d at 976\u201377.\n 6\n See E.D. Wash. R. 7.1(b), (d); see also Zamani v. Carnes, 491 F.3d 990,\n997 (9th Cir. 2007).\n\n 4\n\f"} -{"text": "\n50 Ill. App.3d 120 (1977)\n365 N.E.2d 185\nTHE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee,\nv.\nYOLANDA MITCHELL, Defendant-Appellant.\nNo. 76-321.\nIllinois Appellate Court \u0097 Fifth District.\nOpinion filed June 21, 1977.\n*121 William C. Evers, III, and James J. Massa, both of Collinsville, for appellant.\nKelly D. Long, State's Attorney, of Hillsboro (Bruce D. Irish and Raymond F. Buckley, Jr., both of Illinois State's Attorneys Association, of counsel), for the People.\nJudgment affirmed.\nMr. JUSTICE EBERSPACHER delivered the opinion of the court:\nDefendant, Yolanda Mitchell, was charged in the circuit court of Montgomery County with the offense of deceptive practices. Following a jury trial defendant was found guilty as charged and was sentenced to conditional discharge for a period of two years and was fined $500. From the judgment entered by the trial court, defendant brings this appeal.\nOn appeal defendant presents the following issues for review: whether the evidence was sufficient to support the verdict; whether the trial court erred in excluding certain evidence; whether the court erred in refusing an instruction tendered by defendant; and whether the fine was excessive.\nThis case arose from a check drawn from defendant's bank account and signed by her which was made payable to Milnot Company in the amount of $78.15. The check was used to purchase a large quantity of ice cream for defendant's business. Verna Brakenhoff, a receptionist with Milnot, testified that on September 5, 1975, defendant signed the check in her presence and gave it to her and in return received possession of the ice cream. The witness stated that defendant did not tell her that there were insufficient funds to cover the check nor that the check should be held for a period before presenting it for payment. The check was dated September 5, 1975. Leon Green, the sales manager for Milnot, testified that he was not present during the September 5 sales transaction in question but that he learned that the check had been returned unpaid about a week to ten days thereafter. Green stated that he also had not been told on the date the check was issued that there were insufficient funds to cover the check nor that the check should be held for a period before presenting it for payment. On cross-examination by defendant, Green described his efforts to obtain payment from defendant leading eventually to a return of a portion of the ice cream purchased. Oliver Camillo, a vice-president of the First National Bank of Collinsville, next testified concerning defendant's bank records. Defendant's account was opened on August 2, 1975, with a deposit of $400 and an additional deposit of $120 was made on August 12, 1975. August 12, 1975, was the last date on which the bank records reflected a positive balance in the account. Evidence was presented showing that prior to September 5, 1975, 14 checks were returned, that defendant was sent six overdraft notices *122 covering checks in excess of $600, and that no further deposits had been made after August 12, 1975. Camillo testified that the bank charged $2 for every check that was returned and that defendant's account was closed on November 14, 1975, when these charges totaled approximately $78.\nDefendant testified denying that she intended to defraud anyone. She stated that on the date of the transaction she was aware that her account contained insufficient funds to cover the amount of the check but that Green also had been so informed, was present during the transaction and had agreed to hold the check one week before presenting it for payment. She also testified that she did not subsequently attempt to pay the check because she had returned the ice cream. On rebuttal it was shown that only approximately $58 worth of ice cream was returned.\nDefendant first contends that the evidence was insufficient to support the verdict and that she was not proved guilty beyond a reasonable doubt. Both arguments involve the identical question; whether an intent to defraud was proven. Initially we note that defendant, in her brief, appears to assert that there was no evidence that she knew that there were insufficient funds in her account to cover the check. However, this assertion is wholly unsupported by the record. The evidence shows that prior to September 5, 1975, defendant was sent notice by her bank that her account reflected a negative balance and indeed defendant, herself, admitted at trial that she knew that there were insufficient funds to cover the check to Milnot.\n\u0095 1 Next, defendant relies on a statement in People v. Balalas, 334 Ill. 444, 446, wherein the court stated:\n\"[A] person knowing that he has insufficient funds may issue a check without an intent to defraud, as where he expects to deposit sufficient funds before the check can be presented.\"\nDefendant argues that an intent to defraud was not proven since her testimony shows that she had informed Green who was present during the transaction that she had insufficient funds and had asked him to hold the check for one week. Green, however, testified to the contrary, that he had not been so informed and that he was not even present during the transaction. Brakenhoff also testified that Green had not been present at the time and that she, herself, was not told either that there were insufficient funds or that the check should be held for a period before presenting it for payment. The evidence thus presented a conflict which was the function of the jury to resolve, having had an opportunity to observe the witnesses and determine their credibility. (People v. Everett, 14 Ill. App.3d 421, 302 N.E.2d 723.) The jury obviously chose not to believe the testimony of defendant and we note that there was no evidence showing that defendant expected to deposit sufficient funds to *123 cover the check after it had been issued. Consequently, we find no merit to defendant's contention.\nDefendant's second contention is that the trial court erred in refusing to allow evidence that she filed for bankruptcy around October 21, 1975, and in refusing to allow her to cross-examine Green concerning the bankruptcy.\n\u0095 2 Defendant argues, citing People v. Reans, 20 Ill. App.3d 1005, 313 N.E.2d 184, that this evidence was relevant as tending to disprove an intent by her to defraud Milnot since it explains the reason for her nonpayment of the check. Specifically, she quotes the court in Reans which stated:\n\"[W]e would normally favor the admission of evidence of attempts at restitution for the purpose of having a jury or a trier of fact consider these activities with all other facts in determining the absence or presence of felonious intent * * *.\" (20 Ill. App.3d 1005, 1008-09, 313 N.E.2d 184, 187.)\nWe find defendant's reliance on Reans to be unfounded since in that case the defendant was convicted of theft by deception. The \"intent\" referred to in the quote was the element of intent to permanently deprive the owner of the use or benefit of the property rather than an intent to defraud which was at issue in the case at bar. In People v. Cundiff, 16 Ill. App.3d 267, 305 N.E.2d 735, the defendant was convicted of deceptive practices. On appeal he argued that he should have been allowed to show the jury that he intended to pay the losses through subsequent chapter 11 proceedings in the Federal Bankruptcy Court. The court in affirming his conviction stated:\n\"We agree that such a defense is entirely irrelevant. The crime is complete, if it has been committed at all, when the making, delivery, or uttering of the check takes place and it is immaterial whether payment or restitution is subsequently made. [Citation.] The fact of Chapter 11 Bankruptcy instead of negativing any fraudulent intent, would tend to strengthen an inference thereof.\" (16 Ill. App.3d 267, 272, 305 N.E.2d 735, 739.)\nClearly defendant's intent to defraud is not measured by her inability to pay more than a month after the transaction but rather by her inability to pay at the time that she issued the check in return for the ice cream, ostensibly as payment thereof, while knowing that the check would not be paid by her bank. Therefore defendant's filing for bankruptcy was irrelevant and properly refused.\nDefendant urges that this evidence was nonetheless admissible since the State \"opened the door\" by introducing evidence of the bank records covering a period up to November 12, 1975, when the account was *124 closed. We disagree. Defendant made no objections to the introduction into evidence of her bank records and this evidence only established that her account reflected a negative balance from August 13, 1975, until the account was closed. It was defendant not the State, who elicited testimony, often over the State's objection, of her activities subsequent to the transaction in attempting to settle the debt or make restitution. The prosecutor's comment during closing argument that the check had still not been paid at the time of trial was an invited response to the defense argument that defendant had taken steps to pay the debt. That the trial court permitted considerable latitude to defendant in presenting evidence of her attempts to subsequently make restitution can provide no basis for allowing defendant to introduce evidence explaining her failure to ultimately pay the check in full.\nDefendant also argues that she should have been permitted to cross-examine Green concerning his knowledge of her bankruptcy proceeding. She argues that such an inquiry would have shown his \"bias\" in that Green signed a complaint only after he learned of the bankruptcy.\n\u0095 3, 4 Generally, the latitude to be allowed in cross-examination of a witness rests largely in the discretion of the trial court. While cross-examination should be kept within fair and reasonable limits, it is only in a case of clear abuse of such discretion, resulting in manifest prejudice to a defendant, that a reviewing court will interfere. (People v. Halteman, 10 Ill.2d 74, 139 N.E.2d 286.) While the widest latitude should be given a defendant in cross-examination for the purpose of establishing the bias of a witness (People v. Naujokas, 25 Ill.2d 32, 182 N.E.2d 700), in the case at bar, defendant's attempted inquiry would have gone far beyond the perimeters of merely showing bias. Defendant argues that from a showing that Green filed the complaint in the instant case because he had received notice of the bankruptcy, it could be inferred that Green was testifying falsely. This argument is a non sequitur. With respect to motive to file a complaint, clearly Green, as a victim of a crime, stands in the same position as any other victim of a crime and his motive, whether it was outrage due to the crime or a desire for revenge because of the crime, has no relevance to the question of the guilt or innocence of the defendant or the truth or falsity of the testimony. Rather, the attempted cross-examination was intended to inject an issue other than the guilt of defendant into the trial and to shift that guilt to a person other than the defendant. (People v. Hanks, 17 Ill. App.3d 633, 307 N.E.2d 638.) We therefore find no abuse of discretion by the trial court's refusal of the attempted cross-examination of Green.\nDefendant's next contention is that the trial court erred in refusing to give her tendered instruction as amended on the subject of intent to defraud. We disagree.\n*125 The facts recited in the instruction were incomplete and hence would have misled the jury. (People v. Dore, 339 Ill. 415, 171 N.E. 554.) In any event, the jury was given IPI Criminal No. 13.23 on the definition of the offense of deceptive practices and IPI Criminal No. 13.24 on the issues in deceptive practices. These instructions adequately covered the subject matter of defendant's tendered instruction and therefore the trial court did not err in refusing the instruction. People v. Hines, 28 Ill. App.3d 976, 329 N.E.2d 903.\n\u0095 5 Lastly, defendant contends that the amount of the fine imposed, $500 to be paid over a two-year period, was excessive. It is not contended nor does the record show that the amount of the fine or the method of payment (at a rate of $20.75 per month until the fine, costs and restitution are paid in full) are not commensurate with defendant's financial resources or future ability to pay nor that the fine imposed will prevent defendant from making the court ordered restitution to the victim. (See Ill. Rev. Stat. 1975, ch. 38, par. 1005-9-1(c).) Defendant argues in her brief that she was fined \"for exercising her rights to take bankruptcy.\" This is not true. The fine was imposed as a part of the sentence for the crime for which defendant stood convicted. Review of the record shows that the fine imposed, which was well within statutory limits, was not an abuse of discretion. People v. Taylor, 33 Ill.2d 417, 211 N.E.2d 623; People v. Grau, 29 Ill. App.3d 327, 330 N.E.2d 530.\nFor the foregoing reasons the judgment and sentence of the circuit court of Montgomery County is affirmed.\nAffirmed.\nCARTER, P.J., concurs.\nMr. JUSTICE GEORGE J. MORAN, dissenting:\nIn this case the finding of the requisite intent to defraud depends somewhat upon the evaluation of the credibility of Green. If, as the defendant testified, there was an agreement to hold the check, a debtor-creditor relationship was established and the defendant would not be subject to criminal sanctions. People v. Cundiff, 16 Ill. App.3d 267, 305 N.E.2d 735.\n\"The main objective of cross-examination in similar situations should be to impair the credibility of the witness on the grounds that he had something to gain by testifying against the defendant.\" (People v. Hanks, 17 Ill. App.3d 633, 638, 307 N.E.2d 638, 642.)\nThe defendant sought to identify a motive for Green to testify falsely as evidenced by his failure to sign the complaint until after the bankruptcy proceedings had been initiated.\n*126 The majority opinion characterizes Green's interest as the equivalent of any victim of a crime. Most victims of a similar transaction would have a civil or a criminal action open to them. The filing of the bankruptcy petition removed the option from Green. If, as defendant testified, there was an agreement to hold the check, the debt would be dischargeable in bankruptcy. Any civil proceeding against the defendant would be stayed under the Bankruptcy Act and the debt would be dischargeable in bankruptcy unless Green could establish that the property was obtained by false pretenses. (Section 17(a)(2) of the Bankruptcy Act (11 U.S.C. \u00a7 35). His testimony in the criminal case, as well as the judgment of conviction, would be admissible in the bankruptcy proceeding. (Fed. R. Evid. 801, 803(22).) Thus a motive to misrepresent the actual occurrence in order to salvage the debt from the possible discharge in bankruptcy exists. The failure of the trial court to allow cross-examination into this area in a case which hinges upon the credibility of the complainant is a clear abuse of discretion. Where such an abuse of discretion, as here, results in manifest prejudice to the defendant, we must reverse. People v. Halteman, 10 Ill.2d 74, 134 N.E.2d 286; People v. George, 49 Ill.2d 372, 274 N.E.2d 26.\nDefendant also alleges the trial court erred in refusing to give her tendered instruction or allow her to amend the instruction. Defendant's proferred instruction is as follows:\n\"Where at the time of a sale the seller agrees to hold buyer's check for payment until a later date, a debtor creditor relationship was established and the buyer was not guilty of violating the deceptive practice statute when the check was not honored due to insufficient funds.\"\nBy this instruction, defendant sought to instruct the jury that if the jury found that an agreement to hold the check for payment existed, then as a matter of law defendant lacked the intent to defraud and was not guilty. Under People v. Cundiff, 16 Ill. App.3d 267, 305 N.E.2d 735, this is a correct statement of the law. The majority finds the instruction incomplete in its recitation of facts and thus tending to mislead the jury. Clearly, the instruction is an accurate and complete statement of the law and is not misleading. Nor is the majority's reliance upon the instructions given as an adequate foundation of law for the jury's decision convincing.\nThe following instructions, in the form of IPI Criminal No. 13.23 and IPI Criminal No. 13.24, were given at trial:\n\"A person commits the crime of deceptive practice who * * * with intent to defraud and to obtain control over property of another issues and delivers a check upon a bank knowing that it will not be paid by the bank.\"\n\"To sustain the charge of deceptive practice, the State must *127 prove the following propositions:\nFirst: That the defendant, with intent to defraud and to obtain control over property of the Milnot Co. issued a check upon a bank; and\nSecond: That the defendant knew that the check would not be paid.\nIf you find from your consideration of all the evidence that each of these propositions has been proved beyond a reasonable doubt, then you should find the defendant guilty.\nIf, on the other hand, you find from your consideration of all the evidence that any of these propositions has not been proved beyond a reasonable doubt, then you should find the defendant not guilty.\"\nThe combination of IPI Criminal Nos. 13.23 and 13.24 is not sufficient to overcome the failure of the trial court to instruct the jury on the law according to defendant's theory. Neither IPI Criminal No. 13.23 nor No. 13.24 contains an express statement on the meaning of intent to defraud as applied to the case.\n\"[A] defendant is entitled to the benefit of any defense shown by the entire evidence and has the right to have the jury instructed as to the law applicable to any state of facts which the jury might legitimately find to have been proved from the evidence.\" People v. Kalpak (1957), 10 Ill.2d 411, 424, 140 N.E.2d 726, 734.\nOnly slight evidence upon a theory of the case is necessary to support an instruction, and a court is not to weigh the evidence in determining whether the instruction will be given. (People v. Hall, 25 Ill. App.3d 992, 324 N.E.2d 50; People v. Khamis, 411 Ill. 46, 103 N.E.2d 133.) In this case the defendant testified that Green agreed to hold the check for later payment. Although this was denied by Brakenhof and Green, it is clearly sufficient evidence to support the tendered instruction. The defendant is entitled to have the jury determine the facts and apply the law to those facts. The failure to give the instruction requires reversal.\n"} -{"text": "\n66 Cal.App.2d 335 (1944)\nWILLIAM A. GREER et al., Plaintiffs; ANNA GREER, Respondent,\nv.\nGEORGE II. FREITAS et al., Appellants.\nCiv. No. 7061. \nCalifornia Court of Appeals. Third Dist. \nOct. 13, 1944.\n Hoge, Pelton & Gunther. Hawkins & Hawkins and J. Lee Robertson for Appellants.\n Edward T. Taylor and Leslie A. Clary for Respondent.\n ADAMS, P. J.\n Plaintiffs brought this action to recover general and special damages alleged by them to have resulted from a collision between an automobile driven by plaintiff William A. Greer, with whom his daughter, Anna Greer, was riding as a guest, and one driven by defendant George H. Freitas but owned by M. Elizabeth Freitas, his wife. The jury returned a verdict in favor of defendants and against the plaintiffs. Plaintiffs moved for a new trial and the motion was denied as to William A. Greer but granted as to Anna Greer. The order granting such new trial reads: \"The motion for New Trial in the above entitled case having been heretofore submitted to the Court on the *337 21st day of Jan. 1943, and after due consideration thereof, it is ordered that the motion for new trial by the plaintiff, William A. Greer, be and the same is hereby denied; that the motion for new trial by the plaintiff, Anna Greer, be and the same is hereby granted.\"\n [1] Defendants appealed from the foregoing order and within the time prescribed by law served and filed their opening brief. No brief has been filed by respondent Anna Greer nor has she suggested any theory upon which the order may be sustained. The order itself does not show the grounds upon which it was granted. This court is, therefore, put to the task, if it will undertake it, of searching through the record and speculating as to what alleged errors relied upon by plaintiffs as grounds for a new trial induced the trial court to grant a new trial as to Anna Greer, and to her alone. Appellate courts are not required to assume that burden. While there are other cases on the subject, Zeigler v. Bonnell, 52 Cal.App.2d 217, 218 [126 P.2d 118], most emphatically states the rules as follows:\n \"Although given ample opportunity to do so, respondent has filed no brief on this appeal, nor has he or his counsel suggested any theory upon which the judgment may be sustained. Under such circumstances, we are entitled to accept the facts as stated in appellant's brief (Rule V, 1, of the Rules of the Supreme Court and District Courts of Appeal; Pendergrass v. Axx, 111 Cal.App. 478 [295 P. 896]; Frank Graves S. etc. Co. v. Orange County Bond & Mtg. Corp., 111 Cal.App. 475 [295 P. 859]), and are under no duty to seek out points of law in support of the judgment. We are entitled to assume that respondent has abandoned any attempt to support the judgment. (Duisenberg-Wichman & Co. v. Johnson, 123 Cal.App. 125 [10 P.2d 1010]; Doud v. Jackson, 102 Cal.App. 213 [283 P. 107].) This shirking of responsibility on the part of respondent and his counsel should be strongly condemned, imposing as it does an unfair and improper burden on the court. (Mosher v. Johnson, 51 Cal.App. 114 [196 P. 84]; Lapique v. Walsh, 51 Cal.App. 191 [196 P. 512].)\"\n Plaintiffs' notice of motion for a new trial stated the following grounds only: (1) insufficiency of the evidence to justify the verdict; (2) that the verdict is against law; (3) \"illegality\" in the proceedings of the jury by which the plaintiffs were prevented from having a fair trial; (4) errors *338 in law occurring at the trial and excepted to by the plaintiffs.\n [2] Section 657 of the Code of Civil Procedure provides that when a new trial is granted upon the ground of the insufficiency of the evidence to sustain a verdict, the order shall so specify in writing, and that when such order does not so state it will be conclusively presumed on appeal that the order was not based upon that ground. Since the order in this case did not so specify, we must conclude that the trial court did not grant the new trial because of insufficiency of the evidence, and that it considered the evidence sufficient to sustain the verdict as to both plaintiffs. We might speculate that the trial court considered that a new trial should be denied plaintiff William A. Greer because there was sufficient evidence to show that he was negligent, but that his negligence was not imputable to Anna Greer who was merely a guest in his car, and that she should be granted a new trial because the court was not satisfied that the evidence showed that defendant Freitas was without negligence. But the failure of the court to state in its order that insufficiency of the evidence was the ground upon which the new trial was granted compels the conclusion by this court that such was not the basis for its order.\n [3] Likewise we must assume that the new trial was not granted upon the third ground above stated, since section 658 of the Code of Civil Procedure requires that application for a new trial on such ground must be made upon affidavits, and none were filed.\n [4] The second and fourth grounds of the motion may be considered together. There being no brief in behalf of respondent, we are not advised as to why and in what respects, if at all, plaintiffs contended before the trial court that the verdict was against law. It is said in Mosekian v. Ginsberg, 122 Cal.App. 774, 776 [10 P.2d 525], that the expression \"against law\" as used in section 657 of the Code of Civil Procedure relates to matters which may furnish a reason for the reexamination of an issue of fact. Insufficiency of the evidence might, we assume, furnish a reason for reexamination of an issue of fact; but in the case before us, the trial court plainly did not grant the new trial on that ground. And if the new trial was granted because the court thought the verdict was against law because of errors committed during the course of the trial, we have not been enlightened as to what *339 were deemed to be such errors; and it would seem, also, that errors of law justifying a new trial as to Anna Greer would have justified a new trial as to her coplaintiff.\n However, we have examined the record including the testimony, the rulings of the court and the instructions, and find no such errors. Our conclusion is that the trial court erred in granting a new trial to plaintiff Anna Greer. Its order granting such new trial is, therefore, reversed with orders to enter judgment for defendants in conformity with the verdict of the jury.\n Thompson, J., and Peek, J., concurred.\n"} -{"text": " United States Court of Appeals\n Fifth Circuit\n F I L E D\n IN THE UNITED STATES COURT OF APPEALS\n April 2, 2007\n FOR THE FIFTH CIRCUIT\n Charles R. Fulbruge III\n Clerk\n\n\n No. 06-60436\n Summary Calendar\n\n\nJENNETH TIFUH FONCHAM,\n\n\n Petitioner,\n\n versus\n\n\nALBERTO R. GONZALES, U.S. ATTORNEY GENERAL,\n\n\n Respondent.\n\n -----------------------------------------------------\n Petition for Review of an Order of the\n Board of Immigration Appeals\n BIA No. A97 635 307\n ----------------------------------------------------\n\nBefore DeMOSS, STEWART and PRADO, Circuit Judges.\n\nPER CURIAM:*\n\n Cameroonian citizen Jenneth Tifuh Foncham petitions for review of the decision of the Board\n\nof Immigration Appeals (BIA) dismissing her appeal from the decision of the Immigration Judge (IJ)\n\ndenying her motion to reopen her removal proceedings on the basis of ineffective assistance of\n\ncounsel. Foncham contends that the IJ should have deemed her motion unopposed and granted it;\n\n\n\n *\n Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be\npublished and is not precedent except under the limited circumstances set forth in 5TH CIR.\nR. 47.5.4.\n\fthat she was in substantial compliance with the procedural requirements of Matter of Lozada, 19 I.\n\n& N. Dec. 637 (BIA 1988); that application of the Lozada requirements to her case violates due\n\nprocess; and that application of the Lozada requirements violates equal protection by impeding her\n\nfundamental right to counsel by placing her in a disadvantageous position vis a vis aliens who are\n\nrepresented by accredited representatives.\n\n The IJ was not required to grant Foncham\u2019s unopposed motion to reopen. See 8 C.F.R. \u00a7\n\n1003.23(b)(1)(iv). Foncham has failed to brief the issue whether she can make a prima facie showing\n\nthat she would have obtained asylum or withholding of deportation but for the alleged ineffective\n\nassistance of counsel. She therefore has failed to show the prejudice required to succeed on her due\n\nprocess claims. See Miranda-Lores v. INS, 17 F.3d 84, 85 (5th Cir. 1994); Brinkmann v. Dallas\n\nCounty Deputy Sheriff Abner, 813 F.2d 744, 748 (5th Cir. 1987). Finally, Foncham has failed to\n\nshow that requiring aliens who are represented by counsel to file complaints with the relevant\n\ndisciplinary authorities singles out a particular group for discriminatory treatment or impermissibly\n\ninterferes with a fundamental right. See Hatten v. Rains, 854 F.2d 687, 690 (5th Cir. 1988); Lavernia\n\nv. Lynaugh, 845 F.2d 493, 496 (5th Cir. 1988).\n\n PETITION DENIED.\n\n\n\n\n -2-\n\f"} -{"text": "\n149 Mich. App. 452 (1986)\n386 N.W.2d 213\nPEOPLE\nv.\nZYSK\nDocket No. 84219.\nMichigan Court of Appeals.\nDecided February 19, 1986.\nFrank J. Kelley, Attorney General, Louis J. Caruso, Solicitor General, L. Brooks Patterson, Prosecuting Attorney, Robert C. Williams, Chief, Appellate Division, and Graham K. Crabtree, Assistant Prosecuting Attorney, for the people.\n*455 John D. Lazar, for defendant on appeal.\nBefore: CYNAR, P.J., and WAHLS and GRIBBS, JJ.\nPER CURIAM.\nDefendant was convicted by a jury of first-degree criminal sexual conduct, MCL 750.520b; MSA 28.788(2), and the unlawful possession of a concealed weapon, MCL 750.227; MSA 28.424. He was sentenced to prison terms of from 8 to 20 years and 1 to 5 years to be served concurrently. Defendant appeals as of right.\nThe victim was the defendant's ex-girlfriend, 18-year-old Debra Maes. She testified that on the night of June 12, 1983, she was residing in the home of her friend, Jerry Wardlaw. She was asleep in her bedroom when at approximately 3 a.m. she was awakened by the defendant. She agreed to talk with defendant and accompanied him outside where they talked for some time. After they returned to the house, defendant became angry and began threatening Maes with a knife.\nAt knifepoint and upon defendant's command, she drove defendant to a gas station, then to a nearby park. After parking the car, they walked to an isolated area and defendant ordered her to lie down on a gravel path. Defendant then repeatedly inserted his knife handle into her vagina then forced her to submit to vaginal and anal intercourse. After Maes was permitted to leave the park, she drove to a nearby restaurant where her boyfriend was working. The police were notified and arrived shortly thereafter.\nMaes accompanied the officer to the park where she spotted defendant walking along the road. The officer questioned defendant and confiscated his hunting knife, after which defendant was taken to the police station in another squad car. After Maes *456 pointed out the location of the rape, the officer took her to Oakwood General Hospital.\nAt trial, a nurse testified that she had assumed the care and processing of Maes in the emergency room. The nurse described Maes as very anxious and afraid, crying intermittently, and suffering from severe abdominal muscle tremors. When asked whether Maes was \"making up\" the rape, the nurse replied that Debbie \"was telling the truth\" and that she \"believed what she [Maes] was telling me\".\nDefendant argues that it was error for the trial court to permit the witness to state her opinion regarding the complainant's credibility. We note, however, that defendant failed to object to the testimony at trial and our review is limited to whether defendant was subject to manifest injustice. People v Owens, 108 Mich App 600; 310 NW2d 819 (1981), lv den 412 Mich 866 (1981). We concluded that, had there been an objection, a cautionary instruction could have cured any prejudice which may have resulted from the witness's testimony, People v Byrd, 133 Mich App 767; 350 NW2d 802 (1984). No manifest injustice was present in this case.\nDefendant next argues that the trial court erred in admitting into evidence the nurse's account of a statement complainant made during her hospital examination. The trial court permitted the statement on the dual bases that it was an excited utterance, MRE 803(2), and that it had been made for purposes of medical treatment or diagnosis, MRE 803(4). The chief question raised by defendant is whether or not the statement, if characterized as an excited utterance, was made before there was time to contrive or misrepresent. People v Gee, 406 Mich 279, 282; 278 NW2d 304 (1979); *457 People v Kreiner, 415 Mich 372; 329 NW2d 716 (1982), reh den 417 Mich 1104 (1983).\nWhile the actual lapse of time between the event and the statement is a significant factor, its significance depends largely on the character of the event. People v Petrella, 124 Mich App 745; 336 NW2d 761 (1983), lv granted on other grounds 419 Mich 922 (1984). When determining the \"time for contrivance\" requirement, this Court should examine the actual time period that elapsed in conjunction with the victim's emotional state during the time period. People v Carson, 87 Mich App 163; 274 NW2d 3 (1978). Here, the prosecutor presented evidence that Maes remained in a highly excited state during the entire three-hour period before the statement was made. The officers who responded to the report described complainant as very upset. The examining nurse testified that Maes was shaking and crying and experiencing severe abdominal contractions. In addition, the brutal nature of the attack and the accompanying threats support the trial court's determination that complainant remained in an excited state when the statement was made.\nDefendant also argues that the medical treatment or diagnosis exception was inapplicable because the statement was not \"reasonably pertinent\" to either diagnosis or treatment. Recently, in People v Wilkins, 134 Mich App 39, 44; 349 NW2d 815 (1984), lv den 422 Mich 862 (1985), a panel of this Court applied the following two-part test to determine the applicability of the medical treatment exception to the statement made by the young victim of a sexual assault:\n\"First, the declarant's motive must be consistent with the purpose of the rule; and second, it must be reasonable for the physician to rely on the information in diagnosis and treatment.\"\n*458 We believe that this test was met in the instant case. First, nothing in the record indicates that Maes's statement was made for any purpose other than treatment. Second, the witness testified that getting the victim's account is very important in the treatment of a rape victim. If any error occurred, it was in admitting that part of the statement which identified defendant as the attacker. However, since defendant's identification was not at issue, no prejudice to defendant resulted from the admission. We therefore hold that the statement was properly admitted under either exception.\nDefendant also claims as error the allowance of remarks made by the prosecutor during closing argument. He argues that it was improper and prejudicial for the prosecutor to argue to the jury that defendant's presence during the trial gave him an opportunity to fabricate his testimony, we reject defendant's argument on the basis of the Supreme Court's decision in People v Buckey, 424 Mich 1; 378 NW2d 432 (1985), in which the Court held this to be a proper comment on credibility. We also reject defendant's claim regarding the prosecutor's comments as to the testimony of the nurse. Defendant failed to object to the prosecutor's remarks and we find no manifest injustice. People v Duncan, 402 Mich 1; 260 NW2d 58 (1977); People v Johnson, 141 Mich App 622; 368 NW2d 736 (1985).\nDefendant next argues that the trial court improperly limited his testimony and his cross-examination of the complainant. At trial, defendant admitted that he had had intercourse with Maes but asserted that it was consensual. In support of his defense, defendant sought to introduce evidence of his past sexual relationship with complainant. A separate record was made in which *459 Maes admitted to previous oral sex and bondage episodes. The trial court ruled that defense counsel could question Maes about previous anal and vaginal sex episodes but refused to admit evidence of the other sexual episodes on the grounds that it was not relevant. Defendant's testimony was likewise circumscribed. Defendant argues that the court's refusal to admit the evidence was error.\nThe rape-shield statute, MCL 750.520j; MSA 28.788(10), represents a legislative determination that in most instances evidence of a complainant's past sexual conduct is irrelevant and highly prejudicial. People v Arenda, 416 Mich 1; 330 NW2d 814 (1982). Subsection (a) of the statute limits the introduction of evidence of past sexual conduct between the victim and the actor to instances in which the trial court determines that the evidence is material to a fact at issue in the case. The determination of admissibility is within the sound discretion of the trial court. People v Hackett, 421 Mich 338; 365 NW2d 120 (1984). When making its determination, the court should always favor exclusion as long as exclusion does not abridge the defendant's right to confrontation. Hackett, supra, p 349.\nDefendant's argument is premised on the assumption that the excluded evidence was probative of his claim that complainant consented to have sexual relations with him on the night in question. However, the prior sexual episodes which defendant sought to have admitted were distinct and unrelated to the brutal acts involved in the charged offense. In People v Williams, 416 Mich 25, 38; 330 NW2d 823 (1982), the Supreme Court rejected a similar claim on the basis that excluded evidence of prior sexual acts between the victim and a solitary defendant had \"little or no logical relevance\" to the issue of consent when the *460 charged offense involved a \"group sexual encounter\". Defendant has provided no basis to warrant a different conclusion in the instant case. The excluded evidence of unrelated sexual acts had no relevance to the issue of consent and was highly prejudicial. Moreover, the court admitted evidence of previous sexual conduct which involved the same acts as occurred during the rape. Since there was no other basis to justify the admission, we hold that the trial court did not abuse its discretion in limiting the evidence of prior sexual conduct between the parties.\nDefendant raises two additional claims, neither of which is supported by the record. Defendant argues that the court erred in failing to instruct the jury on the hunting knife exemption to the carrying concealed weapons statute. CJI 11:1:12; MCL 750.227; MSA 28.424. However, in order for the instruction to be given, the defendant must offer some evidence that the knife was being used for hunting purposes. People v Wright, 97 Mich App 411; 296 NW2d 46 (1980). A review of the record reveals that defendant failed to meet this burden. Since the evidence did not support the application of the hunting knife exemption, the court did not err in refusing to give the instruction. People v Parker, 133 Mich App 358; 349 NW2d 514 (1984), MCL 768.29; MSA 28.1052.\nDefendant also alleges that the prosecutor improperly introduced and commented on prejudicial evidence regarding a prosecution witness's religious affiliation. We note, however, that defense counsel failed to object to any of the questions or to the prosecutor's comments during closing argument. Failure to object at trial precludes appellate review in the absence of manifest injustice. People v Jancar, 140 Mich App 222; 363 NW2d 455 (1985); People v Duncan, supra. Here the record indicates *461 that the evidence was admitted for proper purposes and there is no indication that the witness's religious affiliation was used to bolster his credibility or damage the defendant's. We find no manifest injustice.\nDefendant's final claim involves the court's refusal to instruct the jury that, since certain res gestae witnesses were not produced, their testimony could be presumed to be unfavorable to the prosecution's case. CJI 5:2:14. The trial court refused to issue the instruction on the grounds that neither witness could be properly classified as a res gestae witness. We do not believe the trial court's determination was clearly erroneous. People v Carr, 141 Mich App 442; 367 NW2d 407 (1985).\nA res gestae witness is one who was an eyewitness to some event in the continuum of the criminal transaction and whose testimony can aid in developing the full disclosure of the facts surrounding the commission of the charged offense. Carr, supra, p 449. The witnesses at issue herein were Jerry Wardlaw, the owner of the house, and Kenneth Coyle, complainant's boyfriend at the time of the rape. According to complainant's testimony, Wardlaw spoke with defendant briefly on the night the rape occurred and, at one point in the conversation, defendant showed Wardlaw the hunting knife. Coyle, on the other hand, was the first person to see complainant after the rape and the person who notified the police.\nWhile the witnesses might have shed some light on the events surrounding the rape, their connection was peripheral. The crime was complete well before Coyle's involvement and had not even begun when Wardlaw was present on the scene. Neither was present during the actual offense and neither could have provided any significant insight *462 into the assault. Accordingly, we do not believe that the court clearly erred in refusing to classify either witness as res gestae.\nFurthermore, even if the court's determination was erroneous, we are not persuaded that it would require reversal. Defendant did not deny being at complainant's home, carrying the knife, or having intercourse with complainant. Since neither of the witnesses saw the actual assault, it is difficult to imagine what these witnesses could have added to the defendant's theory of defense. Moreover, both attorneys argued in closing argument that the missing witnesses' testimony could be presumed unfavorable to the prosecution. In light of the theory of defense and the witnesses' tenuous connection to the events, any error committed by the trial court was harmless. People v Doyan, 116 Mich App 356; 323 NW2d 397 (1982); People v Kincaid, 136 Mich App 209; 356 NW2d 4 (1984), lv den 422 Mich 903 (1985).\nAffirmed.\n"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 00-6284\n\n\n\nROBERT D. WHITE,\n\n Petitioner - Appellant,\n\n versus\n\n\nRON ANGELONE, Director of Prisons; MR. ALDER-\nMAN, Chairman of Parole Board; COMMONWEALTH OF\nVIRGINIA,\n\n Respondents - Appellees.\n\n\n\nAppeal from the United States District Court for the Eastern Dis-\ntrict of Virginia, at Alexandria. Albert V. Bryan, Jr., Senior\nDistrict Judge. (CA-99-1894-AM)\n\n\nSubmitted: April 13, 2000 Decided: April 21, 2000\n\n\nBefore WIDENER and WILKINS, Circuit Judges, and HAMILTON, Senior\nCircuit Judge.\n\n\nDismissed by unpublished per curiam opinion.\n\n\nRobert D. White, Appellant Pro Se.\n\n\nUnpublished opinions are not binding precedent in this circuit.\nSee Local Rule 36(c).\n\fPER CURIAM:\n\n Robert D. White seeks to appeal the district court\u2019s order\n\ndenying relief on his petition filed under 28 U.S.C.A. \u00a7 2254 (West\n\n1994 & Supp. 1999). We have reviewed the record and the district\n\ncourt\u2019s opinion and find no reversible error. Accordingly, we deny\n\na certificate of appealability and dismiss the appeal on the rea-\n\nsoning of the district court. See White v. Angelone, No. CA-99-\n\n1894-AM (E.D. Va. Dec. 22, 1999). We dispense with oral argument\n\nbecause the facts and legal contentions are adequately presented in\n\nthe materials before the court and argument would not aid the\n\ndecisional process.\n\n\n\n\n DISMISSED\n\n\n\n\n 2\n\f"} -{"text": "471 U.S. 1072\n105 S.Ct. 2151\n85 L.Ed.2d 507\nINTERSTATE COMMERCE COMMISSIONv.COAL EXPORTERS ASSOCIATION OF THE UNITED STATES, INC., et al\nNo. 84-884\n\nNORFOLK AND WESTERN RAILWAY COMPANY et al.\nv.\nCOAL EXPORTERS ASSOCIATION OF THE UNITED\nSTATES, INC., et al\nNo. 84-885\nSupreme Court of the United States\nApril 29, 1985\nOn petitions for writs of certiorari to the United States Court of Appeals for the District of Columbia Circuit.\nThe petitions for writs of certiorari are denied.\nJustice WHITE, with whom Justice REHNQUIST joins, dissenting.\n\n\n1\nLike ICC v. Brae Corp. and Consolidated Rail Corp. v. Ahnapee & W.R. Co., 471 U.S. 1069, 105 S.Ct. 2149, 85 L.Ed.2d 505 these cases involve implementation of the Staggers Rail Act of 1980, 49 U.S.C. \u00a7 10101 et seq. That Act begins with a 15-point National Rail Transportation Policy with a decidedly antiregulatory bent. \u00a7 10101a. It goes on to provide that the Interstate Commerce Commission (ICC) \"shall exempt a person, class of persons, or a transaction or service\" from any regulation that is not necessary to carry out the policies detailed in \u00a7 10101a or to \"protect shippers from the abuse of market power.\" \u00a7 10505(a).\n\n\n2\nPursuant to this provision, the ICC exempted the rail transportation of coal bound for export from all regulation under the Interstate Commerce Act. Railroad Exemption-Export Coal, 367 I.C.C. 570 (1983). In the view of the Commission, relief from regulation would lead to improved efficiency, stronger railroads, and greater pricing flexibility. The resulting benefits would promote a variety of goals set out in \u00a7 10101a. In addition, continued regulation was not needed to protect against abuse of market power by the railroads. They had an interest in the shippers' success, and the competitive international coal market would prevent them from raising prices so high that producers would not be competitive abroad. In addition, as experience had shown, the shippers formed a concentrated industry with bargaining power essentially equal to that of the railroads. The Commission also noted that antitrust remedies were available should the railroads abuse what market power they had, and that the railroads were unlikely to do so even if they could because the Commission would respond by revoking the exemption.\n\n\n3\nThe Court of Appeals for the District of Columbia Circuit vacated and remanded. Coal Exporters Assn. of United States v. United States, 240 U.S.App.D.C. 256, 745 F.2d 76 (1984). It found that the Commission had overlooked a key element of National Transportation Policy: \"to maintain reasonable rates where there is an absence of effective competition and where rail rates provide revenues which exceed the amount necessary to maintain the rail system and to attract capital.\" 49 U.S.C. \u00a7 10101a(6). Reading this provision in tandem with \u00a7 10505's requirement that an exemption not subject shippers to \"the abuse of market power,\" the court held that the Commission had too narrow an understanding of the latter phrase. As it read the Commission's opinion, there would be no abuse of market power as long as the shippers had some bargaining power, however minimal, and received some share of the economic rents, however slight. The court condemned this view as \"wholly unreasonable,\" 240 U.S.App.D.C., at 275, 745 F.2d, at 95, and indifferent to the Act's concern for protecting the revenues of shippers, id., 278, 745 F.2d, at 98.\n\n\n4\nThe railroads and the ICC, supported by the United States, petition for certiorari. They argue that the decision below effectively forecloses any use of the exemption provision. While this seems an overstatement, the opinion below does criticize the ICC for failing to quantify its conclusions with a precision that would appear unattainable. Moreover, the Court of Appeals involved itself in details of regulatory decisionmaking that might more properly be left to the agency. Precisely where hard bargaining leaves off and \"abuse of market power\" begins is the sort of issue best left to the agency's expertise, and the Court of Appeals' identification of abuse with any inequality is open to question.\n\n\n5\nMore important, the decision below is set against the background of a fundamental clash between the Court of Appeals and the ICC concerning the deregulatory mandate of the Staggers Act. See ICC v. Brae Corp., 471 U.S., at 1069, 105 S.Ct. at 2150. The exemption provision is the key mechanism by which that mandate is to be effected, and the Commission has had some difficulty in getting its exemptions past the Court of Appeals. As I noted in dissenting from the Court's refusal to consider the Brae case, the effective implementation of the Staggers Act requires that the scope of the exemption requirement be settled.\n\n\n6\nI respectfully dissent.\n\n\n7\nJustice O'CONNOR took no part in the consideration or decision of these petitions.\n\n"} -{"text": "\n588 So.2d 795 (1991)\nDorothy Lingo TABUCHI, Plaintiff/Appellant,\nv.\nMichael A. LINGO, Plaintiff/Appellee.\nNo. 22,829-CA.\nCourt of Appeal of Louisiana, Second Circuit.\nOctober 30, 1991.\nRehearing Denied November 27, 1991.\n*796 Paul Henry Kidd, Jr., Monroe, for plaintiff/appellant.\nJohn M. Lancaster, Oak Grove, for plaintiff/appellee.\nBefore NORRIS, LINDSAY and BROWN, JJ.\nNORRIS, Judge.\nMichael A. Lingo filed the instant rule to amend and alter joint custody, seeking to be named primary custodian of his minor son. Dorothy Lingo Tabuchi, the boy's mother, filed exceptions of lack of subject matter jurisdiction, inconvenient forum and no cause of action, all of which were denied. After a hearing, the trial court granted the change of custody. In four assignments, Mrs. Tabuchi asks this court to find that dismissal of her exceptions was error and that the trial court's ex parte temporary custody order was contrary to law. Finding that the trial court erred in dismissing Mrs. Tabuchi's exception to lack of jurisdiction, we reverse.\n\nFACTS\nThe parties were married in 1974. Two children were born of the marriage, Thomas Jason (born June 18, 1977) and Christina Ann (born September 26, 1980). The parties lived in West Carroll Parish from the time of their marriage until they obtained judgments of separation and divorce in 1983. The West Carroll judgments awarded the mother sole custody and primary care of the two children, subject to the father's reasonable visitation rights. In April 1984, Dorothy Lingo remarried and moved with her two children to Branson, Missouri. With the exception of summer vacations and holidays, the children have lived continuously with Mrs. Tabuchi and her husband since that time.\nOn June 26, 1986, the West Carroll court signed a stipulated joint custody judgment which in essence designated the mother as *797 the primary custodian and gave the father physical custody during July and August and certain holidays. On June 14, 1990, while Thomas was visiting his father for summer vacation, Mr. Lingo filed for and obtained an ex parte temporary custody order of his minor son and filed the instant rule to modify the existing custody order whereby he would become the primary custodian of Thomas only.\nThe trial court denied Mrs. Tabuchi's exceptions after a hearing on July 9, 1990, and heard the custody rule on July 30, 1990. In a judgment signed October 22, 1990, the court awarded primary custody of 13-year old Thomas to Mr. Lingo.\n\nDISCUSSION\nIn her first assignment, Mrs. Tabuchi argues that the trial court erred in denying her exception of lack of jurisdiction, arguing that under La.R.S. 13:1700 et seq. (Uniform Child Custody Jurisdiction Act) Louisiana was no longer the children's \"home state\" and lacked \"significant connections\" sufficient to meet the statutory requirements.\nIn order for a court to exercise continuing jurisdiction to modify its earlier custody decree, it must meet the jurisdictional requirements of the UCCJA at the time the modification is sought. Counts v. Bracken, 494 So.2d 1275, 1278 (La.App.2d Cir.1986). La.R.S. 13:1702, provides four possible jurisdictional bases.[1] The pertinent portions read as follows:\n\u00a7 1702. Jurisdiction\nA. A court of this state which is competent to decide child custody matters has jurisdiction to make a child custody determination by initial or modification decree if:\n(1) This state (i) is the home state of the child at the time of commencement of the proceeding, or (ii) had been the child's home state within six months before commencement of the proceeding and the child is absent from this state because of his removal or retention by a person claiming his custody or for other reasons, and a parent or person acting as parent continues to live in this state; or\n(2) It is in the best interest of the child that a court of this state assume jurisdiction because (i) the child and his parents, or the child and at least one contestant, have a significant connection with this state, and (ii) there is available in this state substantial evidence concerning the child's present or future care, protection, training, and personal relationships[.]\nR.S. 13:1701(5) defines \"home state\" as:\n[T]he state in which the child immediately preceding the time involved lived with his parents, a parent, or a person acting as parent, for at least six consecutive months, and in the case of a child less than six months old the state in which the child lived from birth with any of the persons mentioned. Periods of temporary absence of any of the named persons are counted as part of the six-month or other period.\nHome state jurisdiction under \u00a7 1702 A(1), was thus unavailable to the trial court in this case because Thomas had not lived in Louisiana for at least six consecutive months at the time the proceeding was commenced. See Revere v. Revere, 389 So.2d 1277, 1279 (La.1980). As both children had lived continuously with their mother in Missouri since April 1984, home state jurisdiction clearly vested in the Missouri court system long before this action was brought.\nIt has been suggested that the jurisdictional rules of \u00a7 1702 are listed in the statute in descending preferential order. Snider v. Snider, 474 So.2d 1374, 1379 (La.App.2d Cir.1985), and authority therein. The Louisiana Supreme Court has stated that courts of other states should generally defer to the home state, since that state is usually \"in the best position for evidence gathering and for exercising continuity of control.\" Revere v. Revere, supra, at 1279. Nevertheless, jurisdiction may exist concurrently in two different states under the home state and significant connection standards. *798 When this occurs, the significant connection state is not necessarily required to defer to the home state. Id. at 1280.\nEqually clear, however, is that the purpose of \u00a7 1702 A(2) is to limit jurisdiction rather than proliferate it. Counts v. Bracken, supra at 1277, and citations therein. A Louisiana court does not possess jurisdiction under the significant connection test merely because some evidence exists here. The Revere court noted that the significant connection test \"provides a `best interest' basis for jurisdiction when Louisiana has a legitimate concern as to custody and has superior access to evidence concerning the child's care, training, well being and personal relationships.\" Revere v. Revere, supra, at 1279-80 (emphasis added). Similarly, this court has consistently held that jurisdiction under \u00a7 1702 A(2) \"rests with the state that has maximum rather than minimum contacts with the child and optimum access to relevant evidence about the child and the family.\" Lee v. Lee, 545 So.2d 1271, 1274 (La. App.2d Cir.1989) (emphasis added), citing Counts v. Bracken, supra, at 1277. Even if both states could legitimately claim a significant connection, the law requires a comparative determination as to whether one state has a greater or more recent significant connection with the children. Snider v. Snider, supra, at 1381.\nThus, jurisdiction is proper under \u00a7 1702 A(2) if (1) it is in the child's best interest to determine custody in Louisiana; (2) the child and at least one parent have a significant connection to Louisiana; and, (3) a maximum amount of evidence concerning the child is available in Louisiana. Schroth v. Schroth, 449 So.2d 640, 642 (La.App. 4th Cir.1984).\nWe conclude that Louisiana did not possess connections which were \"maximum,\" \"optimum\" or \"superior\" when compared to those which existed in the home state, Missouri. The trial court, in its written reasons for judgment, placed too much emphasis on Mr. Lingo's life-long residency in West Carroll Parish, the presence of Thomas's paternal grandparents as well as other relatives there, and Thomas's participation in the local baseball program while visiting his father. At the time of the hearing, Thomas had lived the most recent six of his 13 years in Missouri with his mother, sister and step-father. Virtually all his school records were there, in addition to evidence of his various extra-curricular activities. Thomas's teachers, tutors, schoolfriends, neighbors, and primary doctors were all Missouri residents.\nA party seeking to alter a prior consent decree of custody (as is present here) must show a change of circumstances and that the new custody arrangement is in the child's best interest; stability of environment is a factor to be considered in evaluating a change. Meredith v. Meredith, 521 So.2d 793, 796 (La.App.2d Cir. 1988); Dungan v. Dungan, 499 So.2d 149, 151 (La.App.2d Cir.1986). Since the trial court must determine whether a change would be in the child's best interest it must examine evidence concerning both the current and the prospective living arrangements. Thus, while evidence regarding conditions in Mr. Lingo's home is certainly present in Louisiana, by far the greatest amount of information concerning Mrs. Tabuchi's home and Thomas himself exists in Missouri. Under the facts presented here, Missouri was both the home state and the state with the most significant connection to the child and the maximum evidence concerning his present or future care, protection, training and personal relationships. R.S. 13:1702 A(2). Compare Moore v. Moore, 379 So.2d 1153 (La.App.2d Cir. 1980). The trial court did not possess subject matter jurisdiction to hear this controversy, and abused its discretion in overruling Mrs. Tabuchi's exception.\nWe are unpersuaded that the cases Mr. Lingo cites in brief are truly analogous to his own. In Revere, supra, the four-year-old child had lived all his life in Louisiana until his mother, who had abandoned him three years earlier, obtained an ex parte order and took him with her to Texas; the Supreme Court found that Louisiana had significant connections with the child sufficient to justify jurisdiction to hear the paternal grandparents' rule to change custody, *799 even though the suit might have been filed too late for Louisiana still to have home state jurisdiction. Similarly, in Peery v. Peery, 453 So.2d 635 (La.App.2d Cir. 1984), we found that the trial court's exercise of jurisdiction was proper because Louisiana was both the home state and the state with the most significant connections and evidence. By contrast, Thomas has not resided regularly in Louisiana since 1984. Also distinguishable is St. Andrie v. St. Andrie, 473 So.2d 140 (La.App. 3d Cir. 1985); there the court concluded that both Georgia and Louisiana had significant connections to the child where the father lived in Louisiana, the mother in Georgia, and where the child's time had been divided almost equally between the two states. Furthermore, Mr. St. Andrie sought merely to enforce an existing Louisiana custody decree which had been rendered less than a year before. In the instant case, more than four years had elapsed since the West Carroll court had last been asked to address the custody of the Lingo children. The cases briefed do not militate in favor of finding jurisdiction in Louisiana under the facts of this case.\nBecause of our holding that the trial court lacked jurisdiction to hear this case, we pretermit Mrs. Tabuchi's second and third assignments regarding inconvenient forum and no cause of action. The ex parte temporary custody order of which Mrs. Tabuchi complains in her fourth assignment was supplanted by the October 1990 modification judgment, which is in turn reversed by our decision today. It is well-settled that an ex parte custody order granted by a trial judge without notice, service of pleadings, and without affording a hearing to the parent having custody of the child is null and without effect. McManus v. McManus, 528 So.2d 696 (La. App.2d Cir.1988). While the illegality of the ex parte temporary custody order is now moot, we feel compelled to express our disapproval of the practice of granting such orders in the absence of statutory authority.\nFor the reasons expressed, we reverse the trial court, delete the judgment of October 22, 1990 and reinstate the joint custody judgment of June 26, 1986. We assess all costs to Mr. Lingo.\nREVERSED.\n\nAPPLICATION FOR REHEARING\nBefore SEXTON, NORRIS, LINDSAY, BROWN and STEWART, JJ.\nRehearing denied.\nNOTES\n[1] The parties concede that sections A(3) and (4) are inapplicable.\n"} -{"text": "\n619 F.3d 301 (2010)\nFrederick E. BOUCHAT, Plaintiff-Appellant,\nv.\nBALTIMORE RAVENS LIMITED PARTNERSHIP; National Football League; NFL Productions LLC, d/b/a NFL Films, Incorporated, a subsidiary of NFL Ventures L.P., 1 NFL Plaza, Mt. Laurel, New Jersey 08054, Defendants-Appellees, and\nNFL Films, Incorporated; The Baltimore Sun Company, Defendants.\nNo. 08-2381.\nUnited States Court of Appeals, Fourth Circuit.\nArgued: December 4, 2009.\nDecided: September 2, 2010.\n*305 ARGUED: Howard J. Schulman, Schulman & Kaufman, LLC, Baltimore, Maryland, for Appellant. Robert Lloyd Raskopf, Quinn, Emanuel, Urquhart, Oliver & Hedges, LLP, New York, New York, for Appellees. ON BRIEF: Daniel P. Doty, Schulman & Kaufman, LLC, Baltimore, Maryland, for Appellant. Mark D. Gately, Hogan & Hartson, LLP, Baltimore, Maryland; Sanford I. Weisburst, Quinn, Emanuel, Urquhart, Oliver & Hedges, LLP, New York, New York, for Appellees.\nBefore NIEMEYER, MICHAEL, and GREGORY, Circuit Judges.\nReversed and remanded in part; affirmed in part by published opinion. Judge MICHAEL wrote the opinion, in which Judge GREGORY joined. Judge NIEMEYER wrote a dissenting opinion.\n\nOPINION\nMICHAEL, Circuit Judge:\nFor the fourth time we consider on appeal an aspect of Frederick E. Bouchat's *306 copyright infringement cause against the Baltimore Ravens football organization and National Football League entities for their unauthorized copying of a Ravens team logo, drawn by Bouchat, that was used for three seasons as the team's official symbol. This appeal arises from an action Bouchat filed to enjoin defendants' depictions of the copyrighted logo in season highlight films and in the Ravens corporate lobby. The district court found that defendants' depictions of the logo were a fair use and entered judgment against Bouchat. We reverse in part because defendants cannot establish a fair use defense for the depictions of the logo in the highlight films, where the logo use is non-transformative and commercial. We reject defendants' contention that Bouchat's request for injunctive relief against these acts of infringement is precluded, and the district court on remand will therefore consider whether an injunction is appropriate. We affirm the district court's finding of fair use as to the depictions of the logo in the Ravens corporate lobby, where team history is portrayed, free of charge.\n\nI.\nBouchat owns the copyright in a drawing he created in 1995 and proposed for use as the Ravens team logo (the Shield logo). The Ravens used a strikingly similar logo design during the team's first three seasons, 1996, 1997, and 1998 (the Flying B logo). The Flying B logo was displayed on the side of the Ravens football helmet, painted on the Ravens field, and printed on flags, hats, tickets, and other assorted objects. Our first decision on this subject affirmed the jury's liability verdict, which found that the Ravens and the National Football League had infringed Bouchat's copyright in the Shield logo. Bouchat v. Baltimore Ravens, Inc., 241 F.3d 350 (4th Cir.2000) (Bouchat I). Our second decision affirmed a jury award of zero damages for the basic infringement. Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514 (4th Cir.2003) (Bouchat II). Our third decision, stemming from actions Bouchat filed against numerous NFL licensees that used the Flying B logo, affirmed judgments \"in favor of the licensees because Bouchat [wa]s precluded from obtaining actual damages against them.\" Bouchat v. Bon-Ton Dep't Stores, Inc., 506 F.3d 315, 328 (4th Cir. 2007) (Bouchat III).\nThis appeal arises from an action brought by Bouchat on February 14, 2008, against the Baltimore Ravens Limited Partnership (the Ravens), the National Football League and NFL Productions LLC (together, the NFL), and The Baltimore Sun Company.[1] Bouchat seeks an injunction prohibiting all current uses of the Flying B logo and requiring the destruction of all items exhibiting the Flying B logo.\nThe Ravens and the NFL currently display or otherwise make some use of the Flying B logo. The NFL offers for public sale Ravens highlight films of the 1996, 1997, and 1998 seasons. They are sold for fifty dollars each. The films were shot during and produced shortly after each season, and they have not been edited since their first release for sale. The Ravens organization also plays a short highlight film from the 1996 season on its large video screen during home games.\nThe highlight films contain actual game footage, edited with slow motion effects, *307 musical scores, and a narration. The Flying B logo is displayed in the films just as it was during each game: the logo appears primarily on the helmets of the Ravens players. The logo also appears in other NFL team highlight films from the 1996, 1997, and 1998 seasons for those teams that played against the Ravens in that period. In the 1996 and 1997 Ravens season highlight films, the Flying B logo is prominently displayed as the introductory graphic. In the 1997 film the Flying B logo is displayed on a flag used as a backdrop for an interview, and the logo appears as a graphic next to the name of the interviewee.\nThe Flying B logo also appears in the lobby of the Ravens headquarters in Owings Mills, Maryland. The lobby is open to anyone entering the building. On one wall is a collage depicting the Ravens history, captioned \"Ravens History Begins.\" Photos of the team's first ever first-round NFL draft picks, Jonathan Ogden and Ray Lewis, are prominently displayed in the collage. The photo of each man is from a Ravens football game, and their helmets display the Flying B logo. A glass cabinet in the lobby displays a sheet of Ravens football tickets from the 1996 inaugural season. The Flying B logo is displayed prominently on each ticket.\nAbsent a valid defense of fair use, defendants' current depictions of the Flying B logo would violate Bouchat's copyright in the Shield logo. At a hearing before the district court on August 13, 2008, the parties agreed to submit the case to the court for a bench trial on the merits of defendants' fair use defense. On November 21, 2008, the district court issued a decision determining that all of defendants' depictions of Bouchat's copyright constituted fair use. Judgment was entered in favor of the Ravens and the NFL that same day. Bouchat appeals this final order, challenging the fair use determination. The Ravens and the NFL cross-appeal, asserting that Bouchat's claim is precluded.\n\nII.\nThe fair use defense presents a mixed question of law and fact. Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 560, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985). In this arena we review the district court's legal conclusions de novo and its findings of fact for clear error. Sundeman v. Seajay Soc'y, Inc., 142 F.3d 194, 201 (4th Cir.1998). However, when \"the district court has found facts sufficient to evaluate each of the statutory [fair use] factors, an appellate court need not remand for further factfinding but may conclude as a matter of law that the challenged use does not qualify as a fair use of the copyrighted work.\" Harper & Row, 471 U.S. at 560, 105 S.Ct. 2218 (quotations omitted). The district court's factfinding is not challenged in this appeal.\nSection 106 of the Copyright Act grants \"a bundle of exclusive rights to the owner of the copyright,\" including the rights \"to publish, copy, and distribute the author's work.\" Harper & Row, 471 U.S. at 546-47, 105 S.Ct. 2218. These rights, however, are \"subject to a list of statutory exceptions, including the exception for fair use provided in 17 U.S.C. \u00a7 107.\" Bond v. Blum, 317 F.3d 385, 393 (4th Cir.2003). Fair use is a complete defense to infringement. In other words, \"the fair use of a copyrighted work ... is not an infringement of copyright.\" 17 U.S.C. \u00a7 107.\nFair use was a creature of the common law until 1976 when the doctrine was codified in \u00a7 107 of the Copyright Act. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 576, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994). \"Congress meant \u00a7 107 to restate the present judicial doctrine *308 of fair use ... and intended that the courts continue the common-law tradition of fair use adjudication.\" Id. at 577, 114 S.Ct. 1164 (quotations omitted). Accordingly, the doctrine of fair use continues to be applied as \"an equitable rule of reason, for which no generally applicable definition is possible.\" Sundeman, 142 F.3d at 202 (quotations omitted). The fair use inquiry is \"not to be simplified with bright-line rules, for the statute, like the doctrine it recognizes, calls for case-by-case analysis.\" Campbell, 510 U.S. at 577, 114 S.Ct. 1164. Nevertheless, it is appropriate to use the four statutory factors listed in \u00a7 107 \"[t]o guide the determination of whether a particular use is a fair use.\" Bond, 317 F.3d at 394. The four factors are as follows:\n(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;\n(2) the nature of the copyrighted work;\n(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and\n(4) the effect of the use upon the potential market for or value of the copyrighted work.\nWe will proceed to measure each use of the Flying B logo by defendants against \u00a7 107's four factors. We will, of course, keep in mind that the factors are not to be \"treated in isolation,\" but rather \"the results [are to be] weighed together, in light of the purposes of copyright.\" Campbell, 510 U.S. at 578, 114 S.Ct. 1164.\n\nIII.\n\nA.\nDefendants' first use of the Flying B logo that we analyze is its depiction in the season highlight films sold by the NFL and the highlight film played during the Ravens home football games.\n\n1.\nUnder \u00a7 107's first factor we consider \"the purpose and character of [defendants'] use [of the Flying B logo], including whether such use is of a commercial nature or is for nonprofit educational purposes.\" 17 U.S.C. \u00a7 107(1). This inquiry \"may be guided by the [fair use] examples given in the preamble to \u00a7 107,\" Campbell, 510 U.S. at 578, 114 S.Ct. 1164, specifically, \"criticism, comment, news reporting, teaching ... scholarship, or research,\" 17 U.S.C. \u00a7 107. The 1996 highlight film played by the Ravens during home football games is part of an entertainment package included in the price of tickets to the games. The longer season highlight films for 1996, 1997, and 1998 are also objects of entertainment, marketed and sold to the public on the NFL's website for fifty dollars. The core commercial purpose of the highlight films does not align with the preamble's protected purposes of comment, news reporting, research, and the like.\nOf course, the preamble is not meant to be an exhaustive list of fair use examples. See Harper & Row, 471 U.S. at 561, 105 S.Ct. 2218. To help determine what else might count, we ask \"whether the new work merely supersedes the objects of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning or message; [we] ask[ ], in other words, whether and to what extent the new work is transformative.\" Campbell, 510 U.S. at 579, 114 S.Ct. 1164 (citing Pierre N. Leval, Commentary, Toward a Fair Use Standard, 103 Harv. L.Rev. 1105, 1111 (1990) (Leval)) (quotations omitted). \"A `transformative' use is one that `employ[s] the [copyrighted work] in a different manner or for a different purpose from the original,' *309 thus transforming it.\" Vanderhye v. iParadigms, LLC, 562 F.3d 630, 638 (4th Cir.2009) (quoting Leval, supra).\nA logo is an identifying symbol. The Flying B logo was designed and used as a symbol identifying whatever or whomever it adorned with the Baltimore Ravens football organization. A football player wearing a helmet with the Flying B logo is readily identified as a football player for the Ravens. The stadium field painted with the Flying B logo identifies it as the home field of the Ravens football team.\nThere is no transformative purpose behind the depiction of the Flying B logo in the highlight films. The use of the logo in the films serves the same purpose that it did when defendants first infringed Bouchat's copyrighted Shield logo design: the Flying B logo identifies the football player wearing it with the Baltimore Ravens. The simple act of filming the game in which the copyrighted work was displayed did not \"add[] something new\" to the logo. Campbell, 510 U.S. at 579, 114 S.Ct. 1164. It did not \"alter[] the [logo] with new expression, meaning or message.\" Id. The films capture the logo as it originally appeared, and the logo remains a symbol identifying the Ravens.\nWe disagree with the district court's conclusion that the purpose behind the use of the Flying B logo in the highlight films was \"primarily historical.\" J.A. 56. While the films no doubt add to the historical record of Ravens play, the use of the logo in those films simply fulfilled its purpose of identifying the team. The logo continues to fulfill that purpose whenever a highlight film is shown. Two hypothetical circumstances illustrate our point. In the first, an individual at home in her living room in 1996 watches a Ravens football game on television. The Flying B logo on the helmets of one team helps her identify the team as the Ravens. In the second, an individual at home today (2010) in his living room watches the 1996 Ravens season highlight film. The Flying B logo on the helmets of one team helps him identify the team as the Ravens. The logo plays the same role in each example. Its purpose is not transformed in the highlight film, viewed some fourteen years later.\nSimply filming football games that include the copyrighted logo does not transform the purpose behind the logo's use into a historical one. Defendants point to the dramatic editing, music, and narration in the highlight films in an attempt to show a transformative use for the logo. But none of these effects transform the purpose behind the display of the logo. The narrator in the films never comments on the controversy surrounding the use of the Flying B logo. Nor are the films a documentary on the history of the Ravens logo. Instead, the films simply capture highlights of three Ravens seasons and necessarily portray the Flying B logo as it was actually used \u0097 to identify the Ravens team.\nMerely labeling a use as historical does not create a presumption of fair use. Even the six uses specifically listed in the preamble to \u00a7 107 do not create presumptive categories of fair use protection. A transformative purpose is also required. See Harper & Row, 471 U.S. at 561, 105 S.Ct. 2218 (\"This listing was not intended... to single out any particular use as presumptively a `fair' use.\"). For example, the use of a copyrighted work in news reporting (a use listed in \u00a7 107's preamble) must still be analyzed to determine if the purpose behind the use is transformative. See id. (\"The issue is not what constitutes `news,' but whether a claim of newsreporting is a valid fair use defense to an infringement of copyrightable expression.\") (quotations and emphasis removed). Again, a transformative purpose involves a *310 use of the copyrighted work \"in a different manner or for a different purpose from the original.\" Vanderhye, 562 F.3d at 638 (quoting Leval, supra, at 1111). The historical use analysis employed by the district court was fundamentally flawed because it did not sufficiently confront whether the challenged use had a transformative purpose.\nThe district court erred in minimizing the display of the Flying B logo as \"incidental to the primary [historical] purpose [of the films].\" J.A. 55. The proper inquiry relates to whether there is a transformative purpose behind the use, and \"a taking may not be excused merely because it is insubstantial with respect to the infringing work.\" Harper & Row, 471 U.S. at 565, 105 S.Ct. 2218 (emphasis in original). Again, because the logo is still being used as a logo, that is, as an identifying symbol of the Ravens, the purpose behind the use is not transformative.\nThree cases from the Second Circuit suggest that the purpose and character of the use here weigh against a finding of fair use in the highlight films. First, in Ringgold v. Black Entertainment Television, Inc., 126 F.3d 70 (2d Cir.1997), the Second Circuit found that the display of a poster of a copyrighted artwork as a set decoration for a television show did not constitute fair use, even though the show was creative and the copyrighted work was visible for a total of only 26.75 seconds. According to the court, the purpose and character of the use weighed against a finding of fair use because the defendants \"used [the artist's] work for precisely a central purpose for which it was created \u0097 to be decorative.\" Id. at 79. Second, in Davis v. The Gap, Inc., 246 F.3d 152, 156 (2d Cir.2001), copyrighted decorative eyewear (specifically, \"nonfunctional jewelry worn ... in the manner of eyeglasses\") was used by The Gap clothing company in one of its print advertisements. The Second Circuit found that the use was not a fair use and weighed the first factor against The Gap. The court \"f[ou]nd nothing transformative about the Gap's presentation of [the] copyrighted work\" because \"[t]he ad shows [the decorative eyewear] being worn as eye jewelry in the manner it was made to be worn.\" Id. at 174. Third, in Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir.2006), a rock band's copyrighted concert posters were reproduced in a biography of the band. The posters were shown in reduced size on an illustrated timeline of the band's history. The Second Circuit found the use of the posters to be \"transformatively different.\" Id. at 609. The original purpose of the posters was to advertise \"the band's forthcoming concerts,\" while the transformative purpose of the posters in the biography was \"to document and represent the actual occurrence of [the] concert events featured on [the biography's] timeline.\" Id.\nHere, just as in Ringgold and Davis, there is nothing transformative in the use of the Flying B logo in the season highlight films. The Flying B Logo remains a logo used to identify the Ravens, just like the decorative poster in Ringgold remained a decorative poster, and just like the decorative eyewear in Davis remained decorative eyewear worn as nonfunctional jewelry. Unlike in Bill Graham Archives, where the concert posters were put to transformative use (and no longer served the original advertising purpose), the logo here continues to identify the Ravens, as it did originally.\nConsideration of the purpose and character of the use includes an examination of \"whether [the] use is of a commercial nature or is for nonprofit educational purpose.\" 17 U.S.C. \u00a7 107(1). Here, the commercial purpose behind the season highlight films \"`tends to weigh against a *311 finding' that the challenged use is a `fair use.'\" Bond, 317 F.3d at 395 (quoting Harper & Row, 471 U.S. at 562, 105 S.Ct. 2218). \"The crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price.\" Harper & Row, 471 U.S. at 562, 105 S.Ct. 2218.\nIt is customary for NFL teams to license their copyrighted logos for use in any number of commercial products. See Bouchat III, 506 F.3d at 325. Of course, Bouchat did not receive the customary price for the use of his copyrighted logo in the highlight films. Because defendants' use of Bouchat's logo is non-transformative, we have no hesitation in concluding that the commercial nature of the use weighs against a finding of fair use. Cf. Campbell, 510 U.S. at 579, 114 S.Ct. 1164 (\"[T]he more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.\").\nFinally, because the codified fair use doctrine remains an \"equitable rule of reason,\" Sundeman, 142 F.3d at 202, \"the propriety of the defendant[s'] conduct\" is \"relevant to the `character' of the use,\" Harper & Row, 471 U.S. at 562, 105 S.Ct. 2218 (quotations omitted). The Ravens and the NFL are not innocent third parties documenting the history of the Ravens or the Ravens logo. Instead, defendants were responsible for the original copyright infringement, the use of the Flying B as the Ravens logo. Defendants cannot assert that it is a fair use to profit from that very same copyright infringement when the purpose of the use is not transformed.\nIn sum, the purpose and the character of the use of the Flying B logo weighs against a finding of fair use in the depiction of the logo in the highlight films.\n\n2.\nThe second statutory factor directs us to consider \"the nature of the copyrighted work.\" 17 U.S.C. \u00a7 107(2). The copyrighted work here is a creative drawing, and \"[c]reative works ... are closer to the core of works protected by the Copyright Act.\" Sundeman, 142 F.3d at 204. We agree with the district court that the creative nature of Bouchat's work \"would ... tend to indicate that making a copy would not be fair use.\" J.A. 56. This factor weighs against a finding of fair use of the Flying B logo in the highlight films.\n\n3.\nThe third factor directs us to consider \"the amount and substantiality of the portion used in relation to the copyrighted work as a whole.\" 17 U.S.C. \u00a7 107(3). \"Copying an entire work weighs against finding a fair use.\" Sundeman, 142 F.3d at 205.\nBouchat's entire work is reproduced in the highlight films. The \"ordinary effect\" of \"the fact that the entire work is reproduced... militat[es] against a finding of fair use.\" Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 449-50, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984). Of course, the inquiry \"harken[s] back to the first of the statutory factors, for ... we recognize that the extent of permissible copying varies with the purpose and character of the use.\" Campbell, 510 U.S. at 586-87, 114 S.Ct. 1164. Unless the use is transformative, the use of a copyrighted work in its entirety will normally weigh against a finding of fair use.\nThe district court weighed the third factor in favor of finding a fair use because \"the Flying B logo, although depicted in its entirety, is not a major component of the *312 entire work in which it is used.\" J.A. 57. In other words, \"the copyright protected work is only an inconsequential portion of the overall work.\" Id. This conclusion was error because \"a taking may not be excused merely because it is insubstantial with respect to the infringing work,\" for \"no plagiarist can excuse the wrong by showing how much of his work he did not pirate.\" Harper & Row, 471 U.S. at 565, 105 S.Ct. 2218 (quotations omitted) (emphasis in original). What matters is the amount of the copyrighted work used. Here, Bouchat's entire work was copied.\nWe consequently weigh the third factor against a finding of fair use.\n\n4.\nThe fourth factor directs us to consider \"the effect of the use upon the potential market for or value of the copyrighted work.\" 17 U.S.C. \u00a7 107. \"This last factor is undoubtedly the single most important element of fair use.\" Harper & Row, 471 U.S. at 566, 105 S.Ct. 2218. We \"consider not only the extent of market harm caused by the particular actions of the alleged infringer, but also whether unrestricted and widespread conduct of the sort engaged in by the defendant would result in a substantially adverse impact on the potential market for the original.\" Campbell, 510 U.S. at 590, 114 S.Ct. 1164 (quotations omitted). In other words, \"to negate fair use one need only show that if the challenged use should become widespread, it would adversely affect the potential market for the copyrighted work.\" Harper & Row, 471 U.S. at 568, 105 S.Ct. 2218 (quotations omitted) (emphasis in original).\nWe note first that, in pressing their affirmative defense, the Ravens and the NFL \"have difficulty carrying the burden of demonstrating fair use without favorable evidence\" about a potential market, especially since the entire copyrighted work is used without a transformative purpose. Campbell, 510 U.S. at 590-91, 114 S.Ct. 1164. The Ravens and the NFL did not submit any evidence to the district court about potential markets.\nDespite their lack of evidence about potential markets, defendants argue that the fourth factor (market effect) weighs in favor of fair use because \"[a] jury has already determined ... that none of Defendants' profits from their active use of the Flying B logo in merchandise was attributable to Bouchat's work.\" Br. for Defendants-Appellees at 27 (citing Bouchat II, 346 F.3d at 519). However, a finding that none of defendants' profits derived from the Flying B logo has no bearing on \"the potential market for or value of the copyrighted work.\" 17 U.S.C. \u00a7 107(4). If a football team decides that it needs a logo, it can either design one itself or hire a graphic artist to design one. A market does not fail to exist for the product of the designer's services (here, the logo) simply because the football team's profits do not ultimately derive from the use of that logo.\nThe existence of a market for Bouchat's product is entirely consistent with the earlier jury finding. We affirmed the jury determination of zero damages despite the fact that the Ravens and the NFL \"derive revenues from ... royalties from licensees who sell official team merchandise.\" Bouchat II, 346 F.3d at 523. The licensing of NFL logos for use in the sale of official team merchandise, in exchange for royalties, is exactly the type of potential market that exists for Bouchat's copyrighted logo. Indeed, Bouchat could have pursued actual damages against the licensees of the Flying B logo if we had not concluded that he was barred by claim preclusion. Preclusion was triggered because Bouchat sued the Ravens and the NFL first in Bouchat *313 I, where he did not pursue actual damages. See Bouchat III, 506 F.3d at 326-29.\nIn fact, we know that there was a market for Bouchat's copyrighted logo when the Ravens used the Flying B logo for the 1996, 1997, and 1998 seasons. In 1996 the NFL granted \"licenses and other forms of permission\" allowing the Flying B logo to be \"used by hundreds of manufacturers, distributors, sponsors, etc. in connection with their respective business operations.\" Bouchat v. Champion Products, Inc., 327 F.Supp.2d 537, 540 (D.Md.2003). Defendants did not offer evidence to show that this licensing market no longer exists, and we conclude that there is a potential market for Bouchat's copyrighted work. The NFL sells on its website a number of consumer products that are decorated with historic logos from various NFL teams and marketed as \"throwback\" merchandise. In light of the market in licensing historic logos, defendants' unrestricted use of the infringing Flying B logo \"would result in a substantially adverse impact on the potential market for [Bouchat's] original\" logo. Campbell, 510 U.S. at 590, 114 S.Ct. 1164 (quotations omitted).\nWhen a use is not transformative, market substitution is more likely. Cf. Campbell, 510 U.S. at 591, 114 S.Ct. 1164 (\"[W]hen ... the second use is transformative, market substitution is at least less certain.\"); see also Vanderhye, 562 F.3d at 643 (\"[T]he transformative nature of the use is relevant to the market effect factor.\"). Moreover, \"when a commercial use amounts to mere duplication of the entirety of an original it clearly supersedes the objects of the original and serves as a market replacement for it, making it likely that cognizable market harm to the original will occur.\" Campbell, 510 U.S. at 591, 114 S.Ct. 1164 (quotations omitted). We have already found that defendants' use of the Flying B logo in the highlight films is not transformative and that the logo is used for a commercial purpose. These findings, and defendants' failure to show the lack of a market, require us to weigh the fourth factor against a finding of fair use.\n\n5.\nWe have considered each of the four statutory factors separately and found that each one goes against a finding of fair use. The codified fair use doctrine is applied as \"an equitable rule of reason,\" Sundeman, 142 F.3d at 202, which means that the results of every factor's analysis are weighed together in determining whether there is fair use, Campbell, 510 U.S. at 578, 114 S.Ct. 1164. After weighing together the results from the analyses of the four factors, we easily conclude that the use of the Flying B logo in the highlight films is not a fair use. The Ravens and the NFL originally violated Bouchat's copyright by using his logo as the Ravens logo. Highlight films that come along later and depict that same use, without transformation, cannot stand as a fair use. Therefore, the depiction of the Flying B logo in the season highlight films sold by the NFL and the highlight film played during the Ravens home football games is an infringement of Bouchat's copyright.\n\nB.\nNext, we analyze the depictions of the Flying B logo in the lobby of the Ravens corporate headquarters, again using \u00a7 107's four factors.\n\n1.\nAs we said above, evaluation of \u00a7 107's first factor \u0097 purpose and character of the use \u0097 may be guided by the fair use examples mentioned in \u00a7 107's preamble. Supra at 308. The lobby of the Ravens headquarters has an area that is dedicated *314 to the history of the team. The use of a copyrighted work in a museum-like setting is akin to the fair use of a work for \"teaching..., scholarship, or research,\" fair uses listed in the preamble to \u00a7 107. 17 U.S.C. \u00a7 107. The Flying B logo is displayed in the Ravens lobby on actual game tickets from the inaugural season and in two large photos of the team's first ever first-round draft picks. These depictions of the logo are consistent with the fair use display of copyrighted material in a museum.\nMost important, the use of the logo in a museum-like setting \"adds something new\" to its original purpose as a symbol identifying the Ravens. Campbell, 510 U.S. at 579, 114 S.Ct. 1164. The season tickets and the player photos adorned with the Flying B logo are displayed to represent the inaugural season and the team's first draft picks. In this way, the logo is used \"not for its expressive content, but rather for its ... factual content.\" Bond, 317 F.3d at 396. This use is comparable to the use of the concert posters in Bill Graham Archives, 448 F.3d at 609, where the posters documented the fact of past concerts, a transformatively different purpose from their original use as advertisements for future concerts.\nFinally, unlike in the highlight films, there is no clear-cut commercial purpose behind the use of the logo in the Ravens lobby. The lobby is open to the public, free of charge. \"If a challenged use of a copyrighted work is noncommercial, the party alleging infringement must demonstrate `either that the particular use is harmful, or that if it should become widespread, it would adversely affect the potential market for the copyrighted work.'\" Bond, 317 F.3d at 395 (quoting Sony, 464 U.S. at 451, 104 S.Ct. 774). Bouchat presented no evidence as to how the lobby depictions have harmed or might harm his market, and the apparent noncommercial nature of the lobby use therefore \"weighs heavily against [his] infringement claim\" with respect to that use. Id.\n\"[I]t is appropriate to evaluate [the use's] commercial status on its own terms.\" 4-13 David Nimmer & Melville, Nimmer on Copyright \u00a7 13.05[A][1][c]. Here, the Ravens were \"not gaining direct or immediate commercial advantage from\" the depictions of the logo in the lobby \"\u0097 i.e., [the team's] profits, revenues, and overall commercial performance were not tied to\" this use. Am. Geophysical Union v. Texaco, Inc., 60 F.3d 913, 921 (2d Cir.1994). At bottom, we find no commercial use because no fee is charged to view the displays in the lobby of the Ravens corporate headquarters.\nAlthough the Ravens remain responsible for the original act of infringement, the noncommercial purpose and character of the use in the lobby works in favor of a finding of fair use there. On the other hand, the character of the use in the highlight films is particularly indefensible because the Ravens and the NFL are exploiting to their commercial advantage their original infringements. In the lobby, however, the Ravens are displaying their team history without any direct or immediate financial remuneration.\nBecause there is a transformative, noncommercial purpose behind the depiction of the Flying B logo in the Ravens lobby, we weigh the first factor \u0097 purpose and character of the use \u0097 in favor of fair use.\n\n2.\nWith respect to the use of the Flying B logo in the lobby, we agree with the district court that the second statutory fair use factor, \"the nature of the copyrighted work,\" 17 U.S.C. \u00a7 107(2), tends to weigh against a finding of fair use, see Campbell, 510 U.S. at 586, 114 S.Ct. 1164. However, as the Supreme Court has explained, *315 the second factor \"is not much help\" in deciding whether the \"copy[ing] [of] publicly known, expressive works\" is fair use. Id. More particularly, \"the second factor may be of limited usefulness where the creative work of art is being used for a transformative purpose.\" Bill Graham Archives, 448 F.3d at 612. As mentioned above, the transformative purpose of the lobby use was to display a set of inaugural season tickets and photographs of the team's first ever draft picks, all picturing the Flying B logo in use at the time. Even in this transformative use, however, the logo's creative expression is still apparent. Although we do not assign much weight to \"the nature of the copyrighted work\" factor, the durability of the copied logo's creative expression leads us to conclude that this factor tilts slightly against a finding of fair use.\n\n3.\nThe third statutory fair use factor is \"the amount and substantiality of the portion used in relation to the copyrighted work as a whole.\" 17 U.S.C. \u00a7 107(3). The fact that Bouchat's entire work (in the form of the Flying B logo) is reproduced in the displays in the lobby \"militat[es] against a finding of fair use.\" Sony, 464 U.S. at 449-50, 104 S.Ct. 774. However, \"it does not preclude a finding of fair use,\" Sundeman, 142 F.3d at 205, because \"the extent of permissible copying varies with the purpose and character of the use,\" Campbell, 510 U.S. at 586-87, 114 S.Ct. 1164.\nHere, \"when the extent of the copying is considered with the purpose and character of the uses, the amount and substance of the copies are justified.\" Sundeman, 142 F.3d at 206. The Ravens have no choice but to use the entire copyrighted work if they wish to display the inaugural season tickets and the photographs of their first ever draft picks in their original team dress. The tickets were originally printed with the entire logo, and the players dressed with the entire logo on their helmets. Therefore, in order to fulfill the legitimate transformative purpose of exhibiting the Ravens inaugural season tickets and the photos of the team's first ever draft picks, the entire work has to be displayed.\nThe third factor, when applied to the uses of the logo in the lobby, does not weigh against a finding of fair use because the amount copied is justified in relation to the transformative purpose behind the use. However, because the entire work is displayed, we decline to weigh the third factor in favor of fair use. The third factor is neutral.\n\n4.\nThe fourth statutory fair use factor is \"the effect of the use upon the potential market for or value of the copyrighted work.\" 17 U.S.C. \u00a7 107(4). Earlier, in considering the highlight films, we weighed this factor against a finding of fair use because the use was both nontransformative and commercial. The use of the logo in the Ravens lobby, however, is both transformative and noncommercial. When the \"use is transformative, market substitution is at least less certain, and market harm may not be so readily inferred.\" Campbell, 510 U.S. at 591, 114 S.Ct. 1164. Moreover, when the use \"is for a noncommercial purpose, the likelihood [of future market harm] must be demonstrated\" by the copyright holder. Sony, 464 U.S. at 451, 104 S.Ct. 774. Bouchat offered no evidence of market harm as a result of the lobby displays. The transformative and noncommercial use in the lobby and the lack of evidence about market harm leads us to weigh the market effect factor in favor of a finding of fair use.\n\n\n*316 5.\nThe first (purpose and character of the use) and fourth (effect of use upon the market) factors weigh in favor of a finding of fair use, the second factor (nature of the copyrighted work) weighs only slightly against, and the third factor (extent of the use) is neutral. Considering the \u00a7 107 factors together, we find that the use of the Flying B logo in the Ravens lobby is a fair use. The transformative, noncommercial uses documenting (by ticket display) the inaugural season games and portraying (in team uniform) the Ravens first ever draft picks are fair uses. Therefore, the current depictions of the Flying B logo in the Ravens lobby are not infringements.\n\nIV.\nBecause the depiction of the Flying B logo in the highlight films is an infringement of Bouchat's copyrighted work, we must consider the Ravens and the NFL's alternative argument for affirmance. Defendants argue that Bouchat's pending suit against them seeking injunctive relief against current infringement is barred by claim preclusion: in Bouchat I, an infringement suit for damages that proceeded to judgment, Bouchat did not seek, but could have sought, to enjoin defendants from using the Flying B logo. Here, the district court did not reach the preclusion issue because the court awarded judgment to defendants based on the defense of fair use. However, the district court \"note[d] that [it] does not agree with Defendants that Bouchat would be procedurally prevented from obtaining [injunctive] relief ... if the Defendants' use of the Flying B Logo were not held to be fair use under the Copyright Act.\" J.A. 52 n. 10.\nA three-element test, which we applied in Bouchat III, governs whether Bouchat's claim for injunctive relief in this case is barred by principles of preclusion: \"A subsequent claim is precluded when (1) the judgment in the prior action was final and on the merits; (2) the parties in the two actions are identical or in privity; and (3) the claims in the two actions are identical.\" 506 F.3d at 326-27. Defendants satisfy the first two elements without dispute. They do not satisfy the third element, however.\nBouchat's infringement claim for injunctive relief in this case is not identical to his earlier claim. \"Each act of infringement is a distinct harm giving rise to an independent claim for relief.\" Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199, 204 (4th Cir.1997) (quoting Stone v. Williams, 970 F.2d 1043, 1049 (2d Cir.1992)); see also Meekins v. United Transp. Union, 946 F.2d 1054, 1058 (4th Cir.1991) (\"Res judicata has very little applicability to a fact situation involving a continuing series of acts, for generally each act gives rise to new cause of action.\") (quotations omitted). The earlier claim sought damages for infringements that took place prior to final judgment, issued on July 26, 2002. Bouchat II, 346 F.3d at 519. Bouchat now seeks an injunction against present infringements of his copyrighted work. These infringements \"giv[e] rise to an independent claim for relief\" and are therefore not identical to the earlier claim for purposes of preclusion. Hotaling, 118 F.3d at 204.\nIn Bouchat III we held that Bouchat was precluded from bringing claims for damages against licensees that used the infringing logos in various endeavors, including the production and marketing of official Ravens merchandise. Bouchat's suits against the licensees involved the very same acts of infringement at issue in his earlier suit against the licensors. 506 F.3d at 327-28 (\"While [the first suit] focused *317 on the licensor[s'] conduct, and [the subsequent suits] shift the focus to the licensees' conduct, the same violations of Bouchat's copyright are described throughout all of the complaints.\"). In other words, the acts of infringement by the licensees were the flip side of the same coin whose other side showed the same acts of infringement by the licensors. Here, on the other hand, Bouchat is asserting a claim to enjoin different acts of infringement, namely, the present acts of infringement by the Ravens and the NFL, including the use of the logo in the highlight films. This action is not barred by claim preclusion.\n\nV.\nWe reverse in part because the Ravens and the NFL did not establish fair use of the Flying B logo in the highlight films sold by the NFL and the highlight film played during the Ravens home football games. The films infringe on Bouchat's copyrighted work, and his request for injunctive relief against this infringement is not precluded. On remand the district court will consider whether an injunction is appropriate.[2] We affirm the district court's determination of fair use of the Flying B logo on the items displayed in the Ravens corporate lobby.\nREVERSED AND REMANDED IN PART; AFFIRMED IN PART\nNIEMEYER, Circuit Judge, dissenting:\nWhen the Baltimore Ravens professional football team played its first game in franchise history on September 1, 1996, playing the Oakland Raiders, it did so at its home field, which was painted with a \"Flying B Logo.\" The Logo was also displayed on the helmets of the players, on tickets, on flags, and on other related items. The game, which was played before a crowd of 64,124, was televised live and recorded for posterity by NBC.\nThe Flying B Logo, consisting of a winged shield on which was displayed a flying \"B\" and the name \"Ravens,\" had apparently been copied from the \"Shield Drawing\" that had been created and submitted to the Ravens by an amateur artist, Frederick Bouchat. Bouchat's Shield Drawing depicted a raven with its wings spread, holding in its beak a shield on which was displayed a flying \"B\" and the name \"Ravens.\"\nAfter the Ravens' first season, Bouchat filed a copyright action against the Ravens and the National Football League, alleging that the Flying B Logo infringed his copyright in the Shield Drawing. After a jury found infringement, the Ravens and the NFL ceased using the Flying B Logo and adopted a new logo consisting of the profile of a raven's head with a \"B\" superimposed on it (the \"Raven Profile Logo\"), which they have used since the 1999 season. From that time on, the Raven Profile Logo has been the identifying symbol of the franchise, and the Ravens and the NFL have not used the Flying B Logo to identify the Ravens in any way. Although the Ravens and the NFL have not placed *318 the Flying B Logo on any item since 1998, it remains visible in memorabilia, photographs, and video highlights from the Ravens' first three seasons, as part of the team's history then recorded.\nFrederick Bouchat commenced this action against the Baltimore Ravens Limited Partnership (\"the Ravens\"), the National Football League, and NFL Productions, LLC (collectively, \"the NFL\"), seeking an injunction prohibiting the sale and display of any items that include the Flying B Logo and requiring the destruction of all items on which the Logo is included. Following a bench trial, the district court found that the defendants' purpose in displaying and selling memorabilia and game highlights from the Ravens' first three seasons is \"primarily historical\" and that the display of the Flying B Logo in this context is \"incidental to the [historical] purpose.\" Bouchat v. Baltimore Ravens Ltd. P'ship, 587 F.Supp.2d 686, 696 (D.Md. 2008). It also found that this incidental historical use of the Flying B Logo has no negative effect on the value of, or the market for, Bouchat's Shield Drawing. It thus concluded that the defendants' current use of the Flying B Logo in memorabilia and game highlights does not infringe Bouchat's copyright because it constitutes \"fair use\" under the Copyright Act of 1976, 17 U.S.C. \u00a7 107.\nI agree with this conclusion and therefore would affirm.\n\nI\nIn 1995, when the Cleveland Browns announced that they would move from Cleveland to Baltimore, Frederick Bouchat, an amateur artist working as a security guard at a state office building in Baltimore, began drawing a series of logos for the potential mascots that were being mentioned in the media. One of these logos was the Shield Drawing.\nIn April 1996, after the \"Ravens\" name had been selected, Bouchat faxed a copy of the Shield Drawing to the office of the Maryland Stadium Authority, asking the chairman of the Stadium Authority to send the drawing to the president of the Ravens. Bouchat included a note stating, \"If he would like this design if he does use it I would like a letter of recognition and if the team wants to I would like an [autographed] helmet.\"\nAs the district court found, \"Through a series of misunderstandings, Bouchat's Shield drawing was sent to the Stadium Authority Chairman's law office, forwarded to the Ravens' temporary headquarters, forwarded to the NFL in New York and then to the commercial artists working on the Ravens project. There is no reason to believe that the Ravens or NFL intentionally caused the Shield drawing to be provided to the artists.\" Bouchat, 587 F.Supp.2d at 693. Nonetheless, the artists used the drawing as the basis for the Flying B Logo that was adopted and used by the Ravens to identify the franchise. The Logo was displayed on the football field, on the players' helmets, on tickets, and on other items related to the franchise.\nWhen the Ravens' uniform was first unveiled in Baltimore in June 1996, Bouchat noticed the striking similarities between his Shield Drawing and the Flying B Logo. Concerned that the Ravens and the NFL had appropriated his Shield Drawing without permission, Bouchat sought legal counsel and, in August 1996, registered the Shield Drawing with the United States Patent and Trademark Office. He did not, however, register any objection with the Ravens or the NFL, and the team played its first season, using the Flying B Logo, unaware of Bouchat's concern.\n*319 In May 1997, after the Ravens' first full season, Bouchat commenced an action against the Ravens and the NFL for copyright infringement, seeking only damages. Bouchat v. Baltimore Ravens, Inc., No. MJG-97-1470 (D.Md.). He did not request any injunctive relief. In November 1998, a jury returned a verdict finding that the Flying B Logo infringed Bouchat's copyright in the Shield Drawing. Even though the Ravens and the NFL filed an interlocutory appeal from the verdict\u0097i.e., before damages were considered\u0097they immediately ceased using the Flying B Logo and adopted, instead, the Raven Profile Logo to identify the franchise.\nSince the beginning of the 1999 season, the Ravens and the NFL have continuously used the Raven Profile Logo. But while the Ravens and the NFL have not identified the Ravens' franchise with the Flying B Logo since 1998, the Logo has not completely disappeared, as it can still be seen on all visual depictions of players' uniforms, tickets, and other memorabilia from the 1996-98 seasons.\nAfter the Ravens and the NFL made the change in the Ravens' identifying logo, the parties completed the copyright-infringement litigation, trying the issue of damages. Bouchat claimed entitlement to the portion of the Ravens' and the NFL's profits attributable to the infringing Flying B Logo, but the jury found that no profit had been realized from use of the Logo and denied Bouchat damages.\nIn this action, Bouchat now seeks, for the first time, to enjoin the Ravens and the NFL from using or displaying the Flying B Logo in any way and in any place. He objects, in particular, to the fact that at its headquarters, as part of a tribute to the history of the franchise, the Ravens display memorabilia and photographs from its first three seasons in which the Flying B Logo is visible. He also objects to the showing and selling of game highlights from the first three seasons\u00971996, 1997, and 1998. The injunction that Bouchat seeks would prevent the Ravens and the NFL from displaying the Flying B Logo in any way and for any purpose and would require the defendants to deliver for destruction any item that contains the Logo, including game highlights of other NFL teams when playing the Ravens during the 1996-98 seasons.\nFollowing a bench trial, the district court concluded that the Ravens and the NFL's current use of the Flying B Logo does not infringe Bouchat's copyright in the Shield Drawing because such use constitutes \"fair use\" under 17 U.S.C. \u00a7 107. The court found that the defendants' use of the Flying B Logo in displaying memorabilia and showing and selling game highlights from the Ravens' first three seasons is for \"an essentially historical purpose.\" Bouchat, 587 F.Supp.2d at 695. It noted that \"the visibility of the logo on players' uniforms is incidental to the purpose of showing films of the 1996-98 team in action.\" Id. at 696. It also found that \"the nature and purpose of the use at issue are primarily historical with only an incidental, in context, insignificant, commercial purpose.\" Id. Finally, it found that the defendants' use of the Flying B Logo has no adverse effect on the value of, or the market for, Bouchat's Shield Drawing. Id. at 697.\nFrom the district court's judgment in favor of the defendants, entered on November 21, 2008, Bouchat filed this appeal.\n\nII\nRecognizing the Copyright Act's goal \"[t]o promote the Progress of Science and useful Arts,\" U.S. Const. art. I, \u00a7 8, cl. 8, by ultimately providing \"access to the products of [authors'] genius,\" see Sony *320 Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 429, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984); Bond v. Blum, 317 F.3d 385, 393 (4th Cir.2003), the Copyright Act, through the fair use doctrine, denies authors any monopoly over new works that are derivative and transformative, see Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994). The fair use doctrine \"guarantee[s]... breathing space within the confines of copyright\" for transformative works, and \"the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.\" Id. \"A `transformative' use is one that `employ[s] the quoted matter in a different manner or for a different purpose from the original,' thus transforming it.\" A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630, 638 (4th Cir.2009) (quoting Pierre N. Leval, Commentary, Toward a Fair Use Standard, 103 Harv. L.Rev. 1105, 1111 (1990)).\nThe Copyright Act thus provides that the fair use of a copyrighted work is not an infringement of copyright. 17 U.S.C. \u00a7 107; see also Sony, 464 U.S. at 433, 104 S.Ct. 774 (\"Any individual may reproduce a copyrighted work for a `fair use'; the copyright owner does not possess the exclusive right to such a use\").\nIn determining whether a particular use is fair use, \u00a7 107 provides a non-exhaustive list of factors to guide a court:\n(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;\n(2) the nature of the copyrighted work;\n(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and\n(4) the effect of the use upon the potential market for or value of the copyrighted work.\n17 U.S.C. \u00a7 107. These factors are not to be considered bright-line rules, rigidly applied, see Sony, 464 U.S. at 449 n. 31, 104 S.Ct. 774, but rather are intended to \"provide only general guidance,\" Campbell, 510 U.S. at 577, 114 S.Ct. 1164. See also Bond, 317 F.3d at 394.\n\nIII\nIn this case, the Ravens display the Flying B Logo only in connection with memorabilia and highlights chronicling the first three seasons of the franchise. These memorabilia and game highlights are historical and biographical, and the Ravens' only purpose in displaying the Flying B Logo now is to recount and recall that history, as the district court found. The incidental and necessary display of the Flying B Logo in connection with these items is totally transformative of the use of the Flying B Logo\u0097changing from its use as the symbol identifying the Ravens' franchise to its use as an incidental and necessary part of history.\nThis transformation is fundamental and critical to an analysis of fair use, inasmuch as transformation lies at the \"heart\" of the fair use doctrine. See Campbell, 510 U.S. at 579, 114 S.Ct. 1164. Virtually every case that has considered such a historical and biographical use has held it to be transformative and therefore fair use. See, e.g., Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 609-10 (2d Cir.2006) (finding the use of images of concert posters in a biographical account of the Grateful Dead to be transformative because the posters were being used to highlight historical facts, a purpose \"plainly different from the original purpose for which they were created\"); Elvis Presley Enters., Inc. v. Passport Video, 349 F.3d *321 622, 629 (9th Cir.2003) (observing, in the context of a video documentary about the life of Elvis Presley, that \"Passport's use of many of the television clips is transformative because they are cited as historical reference points in the life of a remarkable entertainer\").\nThe majority overlooks entirely the fact that in 1999, the Ravens and the NFL adopted the Raven Profile Logo as the symbol identifying the Ravens' franchise. Indeed, it does not even recite that fact. Only with this omission can it conclude that the display now of the Flying B Logo in historical items is for the same purpose for which it was displayed in 1996-98. Were it to recognize the change in identifying logo, the majority would have had to conclude that a transformation in use had occurred that relegates the original display to merely historical interest. Thus, it is simply inaccurate to say, as the majority does, that the Flying B Logo is being used by the Ravens for the same purpose today that it was in the years 1996-98\u0097it \"remains a logo used to identify the Ravens.\" Ante at 310.\nThe display now of the Flying B Logo in memorabilia and game highlights from the Ravens' first three seasons is both incidental and necessary to the new purpose for which it is being used\u0097recounting and recalling history\u0097inasmuch as history cannot be fabricated or created. To display, in the lobby of the Ravens' headquarters, 1996 pictures of the Ravens' 1996 draft choices, Ray Lewis and Jonathan Ogden, as \"the team's first ever first-round NFL draft picks,\" ante at 307, is momentous because of their subsequent success as players. The fact that their helmets included the Flying B Logo is an incidental fact of history, made more so by the fact that the Ravens and the NFL no longer use the Flying B Logo to identify the Ravens' franchise.\nIn holding that the use of the Flying B Logo in this context is transformative because it \"`adds something new' to [the Logo's] original purpose as a symbol identifying the Ravens,\" ante at 314(quoting Campbell, 510 U.S. at 579, 114 S.Ct. 1164), the majority recognizes this fact. Yet the majority attempts to distinguish this use of the Flying B Logo from its use in game highlights, which, the majority holds, is not transformative. But the display of the Flying B Logo in video highlights from the Ravens' first three seasons is even more incidental and unimportant than the display of the Logo in the Ravens' headquarters. The highlights are selected solely because of the team's play on the field and the importance of that play to the Ravens' history. There is no evidence or suggestion that the Ravens collected the highlights from the first three years to display the Flying B Logo or to promote the team through it. Any such suggestion could only be fanciful, ignoring entirely the fact that the Ravens and the NFL have identified the Ravens since 1999 exclusively by the Raven Profile Logo.\nThe Ravens' use of the Flying B Logo is therefore necessary for its new purpose of recounting and recalling franchise history, and that use has no value for\u0097indeed it is irrelevant to\u0097the original purpose of identifying the franchise, as the franchise is now identified by the Raven Profile Logo. And it follows that any monetary motive in recounting and recalling history through memorabilia and highlights is based on the value of the history, not the value of the Flying B Logo. As the Supreme Court has pointed out, the inquiry into the commercial nature of a use under the first statutory factor of \u00a7 107 is not whether the Ravens received money from the sale of memorabilia or video highlights\u0097as the majority finds important\u0097 but whether the Ravens \"stand[] to profit *322 from exploitation of the copyrighted matter.\" Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 562, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985). Nothing in the memorabilia or game highlights indicates that the Flying B Logo itself provides the Ravens any gain. Rather, it is the nature of the game performances, the players' performances, and the competition between football teams that provides the Ravens with value from the memorabilia and game highlights.\nIndeed, a jury found in 1998 that the Ravens did not earn any profit from the display of the Flying B Logo at a time when the Logo was actually being used as the franchise identifier. It can hardly be argued that the same logo used only incidentally and historically now provides the Ravens with value and somehow denies Bouchat the value of his Shield Drawing. Because the new use\u0097so far removed and so different in purpose from the original use\u0097is completely transformative, any potentially miniscule commercial advantage gained in connection with the new use is outweighed by the sheer magnitude of the transformation. See Campbell, 510 U.S. at 579, 114 S.Ct. 1164 (\"[T]he more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use\").\nIt should not require the Supreme Court to instruct us that the Ravens' incidental and necessary use of the Flying B Logo in memorabilia and game highlights is transformative\u0097the heart of the fair use doctrine\u0097and therefore does not infringe Bouchat's copyright. See 17 U.S.C. \u00a7 107. Unfortunately, however, it does.\n\nIV\nIn addition to the transformative character of the Ravens' use of the Flying B Logo, equitable and practical considerations weigh in favor of finding the use at issue to be fair use. It is indeed true that the Ravens and the NFL infringed Bouchat's copyright in the Shield Drawing during the first three years of the Ravens' history. But we are not now evaluating the merits of the Ravens' use of the Flying B Logo to identify the Ravens' franchise, as it did during the 1996-98 seasons. We accept that as fact. Rather, we are called upon to assess the merits of the Ravens' new use of the Flying B Logo as an incidental and necessary component of its recorded history.\nIn making this assessment, it must be noted that Bouchat himself could have avoided some or all of the harm, if any, that he now seeks to redress. Bouchat learned of the potential infringement when the Ravens' uniform was first introduced in June 1996, long before the beginning of the Ravens' first season. Yet he did nothing to alert the Ravens or the NFL of his concern. Rather, he let the Ravens play its entire first season with the Flying B Logo as its identifying symbol, thus allowing the creation of the history he now seeks to enjoin. For their part, the Ravens and the NFL stopped using the Flying B Logo\u0097never to use it again to identify the Ravens\u0097as soon as the jury concluded in November 1998 that the Flying B Logo did infringe Bouchat's Shield Drawing. But by that time the 1996-98 seasons had become history, and during every game that the Ravens played, team members wore uniforms displaying the Flying B Logo.\nIn seeking now to prohibit the Ravens and the NFL from displaying any photograph or film from the Ravens' first three seasons in which the Flying B Logo is visible, Bouchat effectively seeks to blot out three years of the Ravens' football history. Indeed, the remedy Bouchat seeks is even more extensive, as he would *323 also require the NFL to blot out the histories of any of the 24 NFL teams that played the Ravens during the 1996-98 seasons, because the memorabilia and films from those games also include incidental displays of the Flying B Logo.\nIn truth, Bouchat's goal in seeking the injunction he now requests cannot be to prohibit the display of the Flying B Logo. An injunction prohibiting any display of the Logo will do him no good, as his Shield Drawing's notoriety and value depend on the display of the Flying B Logo in connection with the Ravens' franchise. Rather, through this legal action, Bouchat is attempting to hold the Ravens' history hostage for ransom. See generally Ronald Coase, The Nature of the Firm, 4 Economica 386 (1937). But it would be grossly inequitable and would bear no relation to the true source of value in the memorabilia and video highlights at issue\u0097namely, their status as historical artifacts\u0097to allow Bouchat to leverage the incidental use of his copyrighted logo into control over the display of all images, video, and memorabilia from the first three years of Ravens history. As an \"`equitable rule of reason,'\" whose terms are not to be rigidly applied, Sony, 464 U.S. at 448 n. 31, 104 S.Ct. 774 (quoting H.R.Rep. No. 94-1476, at 65 (1976), 1976 U.S.C.C.A.N. 5659, at 5679), fair use should be broad enough to allow the Ravens to display the history it created, even though the Flying B Logo will necessarily appear as an incidental aspect of that history.\nIn short, if fair use is not now recognized in the transformative use of the Flying B Logo\u0097a use only incidental and necessary to the display and sale of memorabilia and game highlights\u0097the policy of the Copyright Act, as explained in Sony and Campbell, will not only be frustrated, but the consequence of any remedy against the Ravens and the NFL will be unreasonable and inequitable. See Christopher Phelps & Assocs., LLC v. Galloway, 492 F.3d 532, 544 (4th Cir.2007) (denying a permanent injunction against the sale of a house built with copyright-infringing architectural plans because such a \"draconian burden\" was not justified by the right that the plaintiff claimed had been violated).\nThe Ravens and the NFL cannot now change history nor can they reasonably be requested to blot it out. They have not attempted to reinstate the Flying B Logo as the identifying symbol of the Ravens' franchise, nor have they focused on the Logo in any way. Rather, they seek only to display memorabilia and historic images which of necessity still contain the Flying B Logo. This is surely a transformative use, lying squarely in the \"heart of the fair use doctrine's guarantee of breathing space within the confines of copyright.\" Campbell, 510 U.S. at 579, 114 S.Ct. 1164.\nFor the foregoing reasons, I would affirm the judgment of the district court, which I conclude is manifestly correct.\nNOTES\n[1] The Baltimore Sun Company was dismissed with prejudice on August 12, 2008, at Bouchat's request.\n[2] The dissent (part IV), ignoring Supreme Court guidance, would deny injunctive relief to Bouchat without permitting the district court to decide in the first place whether to grant or deny that relief. See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 394, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006) (\"[T]he decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts.\"). In eBay the Supreme Court was careful to \"take no position on whether permanent injunctive relief should or should not issue in th[at] . . . case.\" Id. It \"vacate[d] the judgment of the Court of Appeals, so that the District Court [could] apply [the governing] framework in the first instance.\" Id.\n"} -{"text": "\n502 F.Supp.2d 292 (2007)\nOdessa CREDLE-BROWN, Plaintiff,\nv.\nState of CONNECTICUT, Department of Children and Families, Darlene Dunbar, Renee Hoff, Marc Hambrecht, Christine Kaatz, Heather Panciera, Wanda Estrella and Lynn Paton, Defendants.\nNo. 3:04-cv-1167 (WWE).\nUnited States District Court, D. Connecticut.\nAugust 20, 2007.\n*293 *294 Alexander Lumelsky, Lumelsky & Mogilevich, LLP, Farmington, CT, for Plaintiff.\nTammy D. Geathers, Attorney General's Office, Hartford, CT, for Defendants.\n\nRULING ON DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS\nEGINTON, Senior District Judge.\nThis action arises from plaintiff Odessa Credle-Brown's claims that defendants State of Connecticut, Department of Children and Families (\"DCF\"), Darlene Dunbar, Renee Hoff, Marc Hambrecht, Christine Kaatz, Heather Panciera, Wanda Estrilla and Lynn Paton (collectively, \"employee defendants\")[1] violated her civil rights pursuant to Title I and Title II of the American with Disabilities Act of 1990, 42 U.S.C. \u00a7 \u00a7 12101, et seq. (\"ADA\"), 42 U.S.C. \u00a7 1983, and state common law in that she was discriminated against because of a disability; to wit: post partum depression with psychosis and anxiety disorder. She claims that she was terminated from her job as a result of this discrimination.\n*295 The complaint is brought in four counts. Count one claims a violation of Title I of the ADA against employee defendants. Count two is brought pursuant to Title II against DCF and employee defendants. Count three alleges violations of plaintiffs rights under \u00a7 1983 as to employee defendants and count four asserts that she suffered from employee defendants' intentional infliction of emotional distress. Plaintiff seeks reinstatement, back pay and lost benefits, compensatory and punitive damages, attorneys' fees and costs.\n\nBACKGROUND\nPlaintiff was employed by DCF from December 1994 until February 2002. She was originally hired as a clerk typist and was promoted in June 1995 to the position of office assistant. In October 2000, plaintiff was diagnosed with post partum depression with psychosis and anxiety disorder and her physician predicted that this condition would persist for twelve to eighteen months. On July 11, 2001, plaintiffs physician submitted a medical certificate to DCF requesting that plaintiff be provided recovery time for her medical condition and that she work on a reduced schedule.\nIn July 2001, plaintiff began a 90-day light duty reduced workload assignment that was to terminate on October 14, 2001. The plaintiff was to work for eight hours a day on Mondays, Wednesdays and Fridays. In September 2001, plaintiff reported to employee defendants that her workload was too heavy. According to plaintiffs allegations, she repeatedly complained to defendants about her workload and these complaints were ignored.\nIn early October 2001, defendants informed plaintiff that her 90-day light duty assignment would expire on October 14, 2001 and that she would be required to return to work full time thereafter. She was also told that defendants would endeavor to find another suitable position or alternative duty if she was unable to return to full and/or regular duty on that date. If such search was unsuccessful, DCF reserved the right to process plaintiffs non-disciplinary separation from state service.\nSubsequently, DCF received notice from plaintiffs physician informing it that plaintiff had been hospitalized from October 11, 2001 through October 30, 2001 and that the earliest she could expect to return to work was July 2002 or as late as January 2004.\nOn January 25, 2002, DCF informed plaintiff that an alternative position could not be found and that she was being separated from state service as a result of her inability to return to work following the expiration of her authorized medical leave of absence. On February 7, 2002, plaintiffs non-disciplinary separation from state service became effective.\nPlaintiff claims that the Connecticut Commission on Human Rights and Opportunities retained this matter for a full investigation, but did not reach any conclusive determinations before plaintiff requested a release of jurisdiction in order to proceed to court.\nPlaintiff filed her original complaint on July 15, 2004 and filed her first amended complaint on August 2, 2005. Defendants moved to dismiss this complaint on September 1, 2005 [Doc. # 26] and plaintiff moved to amend her complaint on November 8, 2005 [Doc. # 33]. The Court granted this motion and plaintiff filed the second amended complaint on January 30, 2006 [Doc. # 38]. On that same date, the Court found defendants' motion to dismiss moot. On September 18, 2006, defendants filed their answer and affirmative defenses [Doc. # 40] and, on September 26, 2006, defendants moved for judgment on the pleadings [Doc. # 44].\n\n\n*296 DISCUSSION\nPursuant to Federal Rule of Civil Procedure 12(c), any party may move for judgment on the pleadings \"after the pleadings are closed but within such time., as not to delay the trial.\" Fed.R.Civ.P. 12(c). A judgment on the pleadings is appropriate when all substantive facts are undisputed and a judgment on the merits is feasible simply by assessing the contents of the pleadings. Hines v. F.J.C. Security Co., 1998 WL 60967, *2 (S.D.N.Y.). As with a Fed.R.Civ.P. 12(b)(6) motion to dismiss, all facts as set forth by plaintiff shall be construed as true and all reasonable inferences will be drawn in plaintiff's favor. Id. Dismissal is proper under both a Rule 12(b)(6) motion and a Rule 12(c) motion only where it appears beyond all doubt that plaintiff can prove no set of facts that would entitle her to relief. Abbott v. Harris Publications, Inc., 1998 WL 849412, *3 (S.D.N.Y.). A granting of judgment on the pleadings differs from a Rule 12(b) motion to dismiss, however, in that a court is unwilling to grant a Rule 12(c) motion unless it is evident that the merits of the controversy can be fully and fairly decided at this stage. To grant a Rule 12(b) motion to dismiss, in comparison, means that plaintiff has failed to satisfy one of the procedural prerequisites for her claim for relief. Shen v. A & P Food Stores, 1995 WL 728416, *5 n. 1 (E.D.N.Y.).\nI. Personal Jurisdiction\nDefendants claim that plaintiff's case against employee defendants is barred because plaintiff failed to serve process on them in their individual capacities and, as a result, the Court lacks personal jurisdiction over these defendants. Plaintiff argues that defendants waived their defense of the lack of personal jurisdiction. The Court agrees with plaintiff.\nFederal Rule of Civil Procedure 4(e) provides that an individual may be served pursuant to the law of the state for service upon a defendant or by delivering the summons and complaint \"to the individual personally or at the individual's dwelling house or usual place of abode.\" Fed. R.Civ.P. 4(e). Connecticut General Statutes \u00a7 52-57(a) reflects the federal rule.[2]See Bogle-Assegai v. State of Connecticut, 470 F.3d 498, 507-08 (2d Cir.2006).\nIn the instant case, plaintiff attempted to effect service upon the individual employee defendants by leaving the summons with Associate Attorney General Gregory T. D'Auria. Doing so was proper as to defendants in their official capacities, but insufficient as to their individual capacities. See Conn. Gen Stat. \u00a7 52-64 (proper service of state officer effectuated by \"leaving a true and attested copy of the process, including the declaration or complaint, with the Attorney General at the Attorney General's office in Hartford. . . .\"); Burgos v. Department of Children and Families, 83 F.Supp.2d 313, 316 (D.Conn.2000) (holding that service upon defendant through the Attorney General or through DCF was insufficient to confer personal jurisdiction over her in her individual capacity).\nHowever, Federal Rule of Civil Procedure 12(h)(1) provides in relevant part:\nA defense or lack of jurisdiction over the person, improper venue, insufficiency of process, or insufficiency of service of process is waived . . . (B) if it is neither made by motion under this rule nor included in a responsive pleading or an amendment thereof permitted by Rule 15(a) to be made as a matter of course.\n*297 Service was executed in November 2004 and counsel for defendants filed her appearance for employee defendants in their official capacities only on November 18, 2004 and filed her appearance for them in their individual capacities on December 22, 2004. On September 1, 2005, defendants filed a motion to dismiss in which they did not raise the personal jurisdiction defense.\nFurthermore, in the parties' Rule 26(f) Planning Report (approved on January 19, 2006), defendants explicitly stated that they did not contest personal jurisdiction.\nThe first time defendants raised the defense of lack of personal jurisdiction was in their answer to plaintiffs second amended complaint. The amended complaint was filed on January 30, 2006. Defendants' answer was not filed until September 18, 2006.[3]\nThe lack of personal jurisdiction is deemed waived if not raised in either defendants' answer to the complaint or in a motion to dismiss. Luv N Care, Ltd. v. Babelito, S.A., 300 F.Supp.2d 468, 472 (2d Cir.2004). A party who fails to object' to personal jurisdiction in the first of either his answer or motion to dismiss has waived his objection. See Rule 12(g) and (h); Palmer v. Braun, 376 F.3d 1254, 1259 (11th Cir.2004) (\"It is well settled that lack of personal jurisdiction is a waivable defect, and that a defendant waives any objection to `the district court's jurisdiction over his person by not objecting to it in a responsive pleading or a Fed.R.Civ.P. 12 motion.\").\nThis waiver is not obviated by virtue of an answer to an amended complaint. While an amended complaint generally supercedes the original, not all defenses are revived. If the defense of personal jurisdiction is not raised in defendants' response to the original complaint, it is considered waived and may not be renewed merely because a plaintiff has amended the complaint. Gilmore v. Shearson/American, Express, Inc., 811 F.2d 108, 112 (2d Cir.1987), overruled on other grounds, McDonnell Douglas Finance Corp. v. Pennsylvania Power & Light Co., 849 F.2d 761 (2d Cir.1988). See also Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir.1994) (distinguishing between the right to assert the defense of fraud and the prohibition of asserting the defense of personal jurisdiction in response to an amended complaint).\nBecause defendants did not raise, this defense in their motion to dismiss, their claim that the Court lacks personal jurisdiction over defendant employees in their individual capacities is waived. Their motion for judgment on the pleadings will be denied on this ground.\nII. Subject Matter Jurisdiction\nDefendants claim that plaintiffs complaint should be dismissed because her claims are barred by the Eleventh Amendment of the United States Constitution and state sovereign immunity. Plaintiff argues that her claims are not barred because they fall within delineated exceptions to such immunity.\nThe Eleventh Amendment provides: \"The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.\" This provision has been extended to suits against a state brought by its own citizens. Board of Trustees of Univ. of Alabama v. Garrett, *298 531 U.S. 356, 363, 121 S.Ct. 955, 148 L.Ed.2d 866 (2001).\nEleventh Amendment immunity bars federal courts from entertaining any suit for damages brought by a private citizen against a state without the state's consent. Id. \"The ultimate guarantee of the Eleventh Amendment is that nonconsenting states may not be sued by private individuals in federal court.\" Id.\nHowever, Congress may abrogate Eleventh Amendment immunity when it intends to do so and acts according to a valid grant of constitutional authority pursuant to Section 5 of the Fourteenth Amendment. Kimel v. Florida Board of Regents, 528 U.S. 62, 73, 120 S.Ct. 631, 145 L.Ed.2d 522 (2000).\n1. ADA\nIn the present action, plaintiff seeks both monetary and prospective injunctive relief pursuant to the alleged violations of her rights under Titles I and II of the ADA. Defendants counter that such relief is barred by sovereign immunity. The Court will dismiss counts one and two of plaintiff's complaint inasmuch as they allege Causes of action under Titles I and II of the ADA against employee defendants in their individual capacities. There is no individual liability under Title I or Title II of the ADA. Fox v. State University of New York, 497 F.Supp.2d 446, 449-50 (E.D.N.Y.2007)\na. Title I\nCongress does not have the authority pursuant to \u00a7 5 to abrogate Eleventh Amendment immunity for money damages under Title I. Garrett, 531 U.S. at 360, 121 S.Ct. 955. To the extent that plaintiff seeks monetary damages from the individual employee defendants in their official capacities, the Eleventh Amendment sovereign immunity applies. Saidin v. New York City Department of Education, 498 F.Supp.2d 683, 689-90 (S.D.N.Y.2007). Thus, plaintiff's claims for monetary relief under Title I against employee defendants in their official capacities will be dismissed.\nAs for plaintiffs claims for prospective relief under Title I, the Second Circuit adheres to the long settled doctrine that the Eleventh Amendment does not preclude suits against state officers in their official capacity for prospective injunctive relief to prevent a continuing violation of federal law. Ex parte Young, 209 U.S. 123, 155-56, 28 S.Ct. 441, 52 L.Ed. 714 (1908); Henrietta D. v. Bloomberg, 331 F.3d 261, 287 (2d Cir.2003). It has determined that claims for reinstatement to previous employment satisfies the Ex parte Young exception to the Eleventh Amendment's immunity bar. State Employees Bargaining Agent Coalition v. Rowland, 494 F.3d 71, 95-96 (2d Cir.2007) (affirming district court's denial of motion to dismiss on the grounds that reinstatement to former employment qualifies as injunctive relief that is not barred by Eleventh Amendment immunity because it would end the alleged violation of federal law). See also Dotson v. Griesa, 398 F.3d 156, 178 (2d Cir.2005) (a court order of reinstatement, whether of government benefits or employment, is not barred by Eleventh Amendment sovereign immunity).[4]\nb. Title II\nAs to plaintiffs claims for monetary damages under Title II, the Supreme *299 Court has recently held that monetary relief is available for Title II violations where that violation actually infringes upon plaintiffs rights under the Fourteenth Amendment. United States v. Georgia, 546 U.S. 151, 126 S.Ct, 877, 881, 163 L.Ed.2d 650 (2006).\nPursuant to Georgia, whether conduct independently violates the Fourteenth Amendment must be determined on a claim-by-claim basis, incorporating the following analysis: 1) which aspects of the state's alleged conduct violated the ADA; 2) to what extent the alleged misconduct also violated the Fourteenth Amendment; and 3) inasmuch as such misconduct violated the ADA but did not violate the Fourteenth Amendment, whether Congress's purported abrogation of sovereign immunity as to that class of conduct is nevertheless valid. Id. at 882. The Court must have the opportunity to conduct this analysis and will not dismiss plaintiffs claims for monetary damages under the ADA at this juncture. See Mercer v. Strange, 96 Conn.App. 123, 899 A.2d 683 (2006) (remanding ease to trial court to conduct Georgia analysis regarding abrogation of sovereign immunity).\nLike Title I, Title II authorizes prospective injunctive relief against the state. Lighthall v. Vadlamudi, 2006 WL 721568, *18 (N.D.N.Y.). Accordingly, the Court will not dismiss plaintiffs claim for same.\n2. Section 1983\nPlaintiff has alleged that defendants have deprived her of her rights pursuant to 42 U.S.C. \u00a7 1983. She asserts that defendants, by and through a pattern of discrimination, caused her specific damages including, inter alia, the loss of her job, income and benefits and the continuation of psychological and physical harm. Defendants argue that this is insufficient to state a claim under \u00a7 1983.\nIn order to establish a claim under 42 U.S.C. \u00a7 1983, plaintiff must demonstrate that the conduct complained of was committed by a person acting under the color of state law and that this conduct deprived plaintiff of rights, privileges or immunities secured by the Constitution or laws of the United States. Parma v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981).\nPlaintiff satisfies both prongs of the test for a \u00a7 1983 claim: 1) defendant employees were at all times acting under the aegis of DCF, a state agency, and 2) these defendants' actions allegedly caused the deprivation of plaintiffs rights under the ADA and the Fourteenth Amendment.\nWhile plaintiff does satisfy the requirements to establish a \u00a7 1983 cause of action against employee defendants, her claim against them in their official capacities is barred by the Eleventh Amendment. It is well settled that \u00a7 1983 does not override the Eleventh Amendment. Quern v. Jordan, 440 U.S. 332, 345, 99 S.Ct. 1139, 59 L.Ed.2d 358 (1979). See also Dube v. State University of New York, 900 F.2d 587, 594 (2d Cir.1990) (\"Although Congress is empowered under section five of the Fourteenth Amendment to override Eleventh Amendment immunity and to enforce by appropriate legislation the substantive provisions of the Fourth Amendment . . . it is well settled that 42 U.S.C. \u00a7 1983 does not constitute an exercise of that authority.\").\nHowever, state officials sued in their individual capacities are not immune from personal liability pursuant to \u00a7 1983. Hafer v. Melo, 502 U.S. 21, 31, 112 S.Ct. 358, 116 L.Ed.2d 301 (1991). As discussed, supra, Ex parte Young does not apply to cases in which plaintiff seeks damages from public funds. However, damages awards against individual defendants under \u00a7 1983 are permissible. Hafer, 502 *300 U.S. at 30; 112 S.Ct. 358. \"To be sure, imposing personal liability on state officers may hamper their performance of public duties. But such concerns are properly addressed within the framework of our personal immunity jurisprudence\": Id. at 31, 112 S.Ct. 358.\nPlaintiff's claims of violations of her rights pursuant to \u00a7 1983 against employee defendants in their official capacities will be dismissed and her claims against them in their individual capacities will be retained,\nIII. Intentional Infliction of Emotional Distress\nPlaintiff alleges that she suffered emotional distress as a result of employee defendants' intentional discriminatory practices. Defendants argue that she fails to state a claim in that she does not satisfy the test for the intentional infliction of emotional distress and only presents conclusory allegations regarding same.[5]\nSection 1367 of Title 28 of the United States Code provides federal courts with jurisdiction over state law claims when they are so related to the action that they form part of the same case. Punsalan v. Lantz, 2006 WL 3050835, *5 (D.Conn. 2006). Here, plaintiffs state law claim of intentional infliction of emotional distress is entwined with defendants' alleged actions regarding her ADA claims.\nTo prevail on her claim of intentional infliction of emotional distress, plaintiff must establish: 1) that defendants intended to inflict emotional distress or knew or should have known that their conduct would likely result in emotional distress; 2) that the conduct was extreme and outrageous; 3) that the conduct in question was the cause of plaintiffs distress; and 4) that the emotional distress experienced by plaintiff was severe. Appleton v. Board of Education of Town of Stonington, 254 Conn. 205, 210, 757 A.2d 1059 (2000).\nIn the context of the employer-employee relationship, the court must assess whether the employer's conduct, not the employer's motive, was extreme or outrageous. Armstead v. The Stop & Shop Companies, Inc., 2003 WL 1343245, *5 (D.Conn.). \"Thus, claims of employer misconduct in the form of intentional discrimination or retaliation, including discharge, which challenge motive or intent, are- dismissed unless the manifesting conduct is itself outrageous or extreme.\" Id. Firing an employee, in spite of any allegedly wrongful motive, does not qualify as extreme or outrageous conduct. Campbell v. Town of Plymouth, 74 Conn.App. 67, 78, 811 A.2d 243 (2002).\nDefendants' conduct was well within the bounds of their professional authority. They accommodated plaintiffs needs for a reasonable period of time, providing her with a reduced workload and changing her schedule. They sought other appropriate employment for her. They did not terminate plaintiff until February 2002, seven months after they were first apprised of her condition. Their possible motivation for terminating plaintiff is not relevant, and neither her treatment nor her termination can be considered extreme and outrageous behavior on the part of defendants.\n*301 The Court will dismiss plaintiffs claim of intentional infliction of emotional distress.\n\nCONCLUSION\nFor the foregoing reasons, defendants' motion for judgment on the pleadings [Doc. # 44] is DENIED in part and GRANTED in part.\nIt is DENIED as follows: count one's claims against employee defendants in their official capacities for prospective relief under Title I is not dismissed; count two's claims against DCF and employee defendants in their official capacities for monetary damages and prospective relief under Title II is not dismissed; and count three, insofar as her claims of violations under \u00a7 1983 are addressed to employee defendants in their individual capacities, is not dismissed.\nDefendants' motion is GRANTED as follows: count one is dismissed insomuch as it is addressed to employee defendants in their individual capacities and claims monetary relief under Title I; count two is dismissed as to plaintiffs claims against employee defendants in their individual capacities; count three is dismissed insofar as it sets forth claims under \u00a7 1983 against employee defendants in their official capacities; and count four is dismissed in its entirety.\nNOTES\n[1] Plaintiff does not specify in which capacities she is suing employee defendants. However, in both parties' papers, they address defendants in both their official and individual capacities. The Court will do so as well.\n[2] Conn. Gen.Stat. \u00a7 52-57(a) provides in relevant part: \"Manner of service upon individuals . . . (a) Except as otherwise provided, process in any civil action shall be served by leaving a true and attested copy of it, including the declaration or complaint, with the defendant, or at his usual place of abode, in this state.\"\n[3] Because of defendants' extreme delay in filing their response to plaintiff's amended complaint, they are in contravention of Fed. R.Civ.P. 15(a). However, the Court will pursue its analysis of personal jurisdiction under other jurisprudential grounds as well.\n[4] While reinstatement could be construed as an order requiring the use of state funds, it is a \"purely prospective injunctive relief that orders the state official to return the former employee to the state's payroll.\" Dotson, 398 F.3d at 178. \"The fact that such an order might subsequently require the expenditure of state funds to pay the reinstated employee's salary is ancillary to such a prospective injunction and, thus not barred.\" Id.\n[5] Defendants also argue that the Court should dismiss this state claim because plaintiff fails to state a claim regarding a federal issue and that the Court should therefore decline to exercise its pendent jurisdiction. Because there are federal claims against defendants remaining, the Court maintains jurisdiction over the claim for intentional infliction of emotional distress. Murray v. Williams, 2007 WL 430419, *7 (S.D.N.Y.) (declining to dismiss state law claims because federal claims remained).\n"} -{"text": "\nUSCA1 Opinion\n\n\t\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n [NOT FOR PUBLICATION]\n\n UNITED STATES COURT OF APPEALS\n FOR THE FIRST CIRCUIT\n\n\n\n ____________________\n\n\n No. 97-1829\n\n RANDOLPH E. GREEN, ET AL.,\n\n Plaintiffs, Appellants,\n\n v.\n\n CITY OF BOSTON, ET AL.,\n\n Defendants, Appellees.\n\n\n ____________________\n\n APPEAL FROM THE UNITED STATES DISTRICT COURT\n\n FOR THE DISTRICT OF MASSACHUSETTS\n\n [Hon. George A. O'Toole, Jr., U.S. District Judge]\n ___________________\n\n ____________________\n\n Before\n\n Torruella, Chief Judge,\n ___________\n Stahl and Lynch, Circuit Judges.\n ______________\n\n ____________________\n\n Randolph E. Green on brief pro se.\n _________________\n Merita A. Hopkins, Corporation Counsel, and Gerald Fabiano,\n ___________________ _______________\n Assistant Corporation Counsel, City of Boston Law Department, on brief\n for appellees.\n\n\n ____________________\n\n December 19, 1997\n ____________________\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n Per Curiam. Plaintiffs appeal from a district court\n __________\n\n judgment dismissing their civil rights complaint for failure\n\n to state a claim. Their principal contention on appeal is\n\n that the district court erred in setting aside a notice of\n\n default, which had been entered when defendants failed to\n\n file a timely response to the amended complaint. The setting\n\n aside of an entry of default is subject to a \"good cause\"\n\n standard, Fed. R. Civ. P. 55(c), is reviewable on appeal only\n\n for abuse of discretion, and is not to be disturbed \"unless\n\n the district court's decision is clearly wrong,\" McKinnon v.\n ________\n\n Kwong Wah Restaurant, 83 F.3d 498, 502 (1st Cir. 1996). The\n ____________________\n\n court's action here cannot possibly be so characterized. \n\n The \"good cause\" standard is a \"mutable\" one, Coon v.\n ____\n\n Grenier, 867 F.2d 73, 76 (1st Cir. 1989), involving a case-\n _______\n\n specific determination not amenable to any \"mechanical\n\n formula,\" General Contracting & Trading Co. v. Interpole,\n ___________________________________ __________\n\n Inc., 899 F.2d 109, 112 (1st Cir. 1990). We have nonetheless\n ____\n\n identified some general guidelines to assist in its\n\n application. See, e.g., McKinnon, 83 F.3d at 503; Interpole,\n ___ ____ ________ _________\n\n 899 F.2d at 112; Coon, 867 F.2d at 76. These criteria\n ____\n\n overwhelmingly predominate in defendants' favor. For\n\n example, there has been no suggestion but that simple\n\n inadvertence was involved here. Plaintiffs have not been\n\n prejudiced in any relevant sense. See, e.g., FDIC v.\n ___ ____ ____\n\n Francisco Inv. Corp., 873 F.2d 474, 479 (1st Cir. 1989). The\n ____________________\n\n\n\n -2-\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n defenses mounted by defendants have proven to be not only\n\n potentially but actually meritorious. And defendants acted\n\n promptly upon learning of their oversight. Given these\n\n circumstances, the district court acted well within its\n\n discretion in setting aside the entry of default.\n\n Plaintiffs' remaining contention is that the court\n\n discriminated against them in failing to address two of their\n\n offerings: their motion to \"vacate\" defendants' motion to\n\n dismiss, and their motion for \"order of judgment.\" To the\n\n contrary, the court necessarily if implicitly denied those\n\n requests in the course of granting the motion to dismiss.\n\n As plaintiffs have advanced no specific challenge to the\n\n holding that their amended complaint failed to state a claim,\n\n it suffices to note that we find the district court's\n\n reasoning in this regard unexceptionable.\n\n Affirmed. \n _________\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n -3-\n\n\n\n\n\n\n\n"} -{"text": "Filed 8/26/14 P. v. Jefferies-Echols CA3\n NOT TO BE PUBLISHED\nCalifornia Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for\npublication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication\nor ordered published for purposes of rule 8.1115.\n\n\n\n COPY\n\n IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA\n THIRD APPELLATE DISTRICT\n (Placer)\n ----\n\n\n\n\nTHE PEOPLE, C071470\n\n Plaintiff and Respondent, (Super. Ct. No. 62111466)\n\n v.\n\nJENNIFER LORRAYNE JEFFERIES-ECHOLS,\n\n Defendant and Appellant.\n\n\n\n\n Defendant Jennifer Lorrayne Jefferies-Echols entered a plea of no contest to\nreceiving aid by misrepresentation. (Welf. & Inst. Code, \u00a7 10980, subd. (c)(2).) The trial\ncourt granted her three years of formal probation subject to certain terms and conditions\nwith which she agreed to comply, including that she submit to random warrantless\nsearches and seizures. On appeal, she contends imposition of the search condition was an\nabuse of the court\u2019s discretion. We affirm the judgment.\n\n\n\n\n 1\n\f FACTS AND PROCEEDINGS\n\n This summary of facts is taken from the stated factual basis for defendant\u2019s plea as\nagreed upon by the parties:\n \u201c[D]efendant applied for and received aid and intentionally falsified paperwork\nand failed to report . . . income from unemployment insurance benefits,\u201d resulting in an\noverpayment of benefits to defendant in the amount of $16,222.\n Defendant was charged with perjury by false application for aid (Pen. Code,\n\u00a7 118\u2014count one) and receiving aid by misrepresentation (Welf. & Inst. Code, \u00a7 10980,\nsubd. (c)(2)\u2014count two), both felonies. At the time defendant entered her no contest\nplea to count two, defense counsel objected to the probation condition requiring her to\n\u201c[s]ubmit person, place of residence, vehicle or area over which [defendant] has control\nto search and seizure at any time, day or night, with or without a search warrant, and with\nor without probable cause, by the probation officer or any peace officer for the purpose of\ndetermining compliance with conditions of release or probation.\u201d\n Defense counsel objected to the search and seizure condition as not reasonably\nrelated to defendant\u2019s crime, and argued that \u201cthis is not the type of theft case where\n[defendant] took some item and placed it in her \u2013 hid it in her jacket and left the store or\nsomething like that. This is where she failed to report something.\u201d Counsel further\nargued that because defendant would be unable to receive welfare in the future, \u201cit is very\nunlikely that she would ever . . . be able to commit this same crime. And even if she did,\nsearch and seizure is still not something that is going to help law enforcement determine\nthat she is committing a crime like this.\u201d\n The prosecution argued it was possible defendant could, at some point, become re-\neligible to receive aid. However, even if defendant were personally prohibited from\ndoing so, she could still receive benefits on behalf of dependents, in which case a search\n\n\n\n\n 2\n\fof her home would be appropriate to determine whether she was fully and accurately\nreporting information to obtain aid.\n The trial court imposed the probation condition, concluding that, while search and\nseizure \u201cis not always appropriate . . . it is certainly appropriate in this case.\u201d\n\n DISCUSSION\n\n Defendant contends the probation condition requiring that she submit to\nwarrantless search and seizure is unreasonable and invalid under People v. Lent (1975)\n15 Cal.3d 481 (Lent) and its progeny, thus violating her right to due process and to be\nfree from unreasonable search and seizure under the state and federal Constitutions.\n We review conditions of probation for abuse of discretion. (People v. Olguin\n(2008) 45 Cal.4th 375, 379 (Olguin).) \u201c \u2018[A] probation condition that imposes limitations\non a person\u2019s constitutional rights must closely tailor those limitations to the purpose of\nthe condition to avoid being invalidated as unconstitutionally overbroad.\u2019 [Citations.]\u201d\n(Id. at p. 384.) \u201cOn the other hand, we have observed that probation is a privilege and not\na right, and that adult probationers, in preference to incarceration, validly may consent to\nlimitations upon their constitutional rights\u2014as, for example, when they agree to\nwarrantless search conditions.\u201d (Ibid.)\n A probation condition will not be invalidated unless it (1) has no relationship to\nthe defendant\u2019s crime, (2) relates to conduct which is not in itself criminal, and (3)\nrequires or forbids conduct which is not reasonably related to future criminality. (Lent,\nsupra, 15 Cal.3d at p. 486, superseded on another ground as stated in People v. Wheeler\n(1992) 4 Cal.4th 284, 290-295.) The test is conjunctive; all three prongs must be satisfied\nbefore a reviewing court will invalidate a probation condition. (Lent, supra, at p. 486, fn.\n1; Olguin, supra, 45 Cal.4th at p. 379.)\n The trial court did not abuse its discretion here. Defendant pleaded no contest to\n\u201cwillfully and knowingly, with the intent to deceive, by means of false statement or\n\n\n 3\n\frepresentation . . . obtained . . . aid . . . for . . . herself or for a child not in fact entitled\nthereto.\u201d (Welf. & Inst. Code, \u00a7 10980, subd. (c).) Contrary to defense counsel\u2019s\nsomewhat watered down characterization at sentencing that defendant simply \u201cfailed to\nreport something,\u201d and defendant\u2019s characterization here on appeal that she\n\u201cunderreport[ed] income on a form,\u201d the agreed upon factual basis for defendant\u2019s plea\nprovided that she \u201cintentionally falsified paperwork\u201d in an effort to obtain a significant\nbenefit to which she was not entitled. Under that circumstance, assuming defendant may\nonce again be eligible to receive welfare assistance, whether for herself or for a family\nmember, an unannounced search and possible seizure of documents would most certainly\nserve to determine whether information submitted by her in an attempt to obtain that\nassistance (e.g., income, number of persons living in her household, number of\ndependents) has in fact been fully and accurately reported.\n Defendant argues a search and seizure condition for that purpose would be\ncompletely unnecessary, positing that any possible scheme to perpetrate another similar\nwelfare fraud \u201cwould not survive routine screening by welfare eligibility workers.\u201d We\nare not persuaded, particularly when a so-called \u201croutine screening\u201d could potentially\nconsist of little more than a review of documentation provided by defendant.\n In any event, \u201c[t]here is no requirement that a search pursuant to a probation\ncondition be founded on indications that the probationer \u2018has resumed the very type of\nmisconduct for which [s]he was placed on probation.\u2019 \u201d (People v. Kasinger (1976)\n57 Cal.App.3d 975, 978, quoting People v. Constancio (1974) 42 Cal.App.3d 533, 539.)\nEven assuming defendant is never again eligible for welfare assistance, it is possible she\nwill be eligible for financial aid from any number of other sources which would require\nher to provide full and accurate information regarding factors critical to determine what\namount of aid, if any, to be disbursed. In other words, the future criminality sought to be\ncurtailed is not simply welfare fraud, but fraud in general.\n\n\n\n 4\n\f Defendant claims there is \u201c \u2018no reasonable basis for sustaining the [search and\nseizure] condition\u2019 \u201d because it bears no reasonable nexus to present or future criminality.\n(People v. Brandao (2012) 210 Cal.App.4th 568, 574.) We disagree. Theft perpetrated\nby fraud is arguably more easily concealed, and perhaps more sophisticated, than\ncommon thievery. The fraud is revealed by comparing information provided by the\nperpetrator which at face value appears accurate (e.g., his assets are minimal and he has\nthree children) to whatever true facts can be discovered (e.g., he owns two sports cars, a\nyacht, and an extensive art collection and has only one child). Here, defendant did not\nsimply neglect to report a small amount on a single form; she intentionally falsified\npaperwork and failed to report her income from unemployment insurance benefits,\nconcealing her fraud on the welfare system for nearly 17 months and netting over\n$16,000 in the process. While there is nothing in the record to shed light on defendant\u2019s\npast history, the circumstances of the current offense reveal a sophistication on the part of\ndefendant to perpetrate more than a casual fraud. The search and seizure condition is\nreasonably related to curtailing future fraudulent behavior.\n There was no abuse of discretion.\n\n DISPOSITION\n\n The judgment is affirmed.\n\n\n HULL , Acting P. J.\n\n\nWe concur:\n\n\n\n ROBIE , J.\n\n\n DUARTE , J.\n\n\n 5\n\f"} -{"text": "Petition for Writ of Mandamus Denied and Memorandum Opinion filed February\n14, 2012.\n\n\n\n\n In The\n\n Fourteenth Court of Appeals\n ____________\n\n NO. 14-12-00100-CR\n NO. 14-12-00101-CR\n ____________\n\n IN RE WENDIYA KINCHIN, Relator\n\n\n ORIGINAL PROCEEDING\n WRIT OF MANDAMUS\n 56th District Court\n Galveston County, Texas\n Trial Court Cause Nos. 11CR3371 & 11CR3372\n\n\n\n\n MEMORANDUM OPINION\n\n On February 3, 2012, relator Wendiya Kinchin filed a petition for writ of mandamus\nin this court. See Tex. Gov\u2019t Code \u00a7 22.221; see also Tex. R. App. P. 52. Relator\ncomplains that the presiding judge of the 56th District Court of Galveston County has not\nset a hearing on two applications for writs of habeas corpus.\n\n To be entitled to mandamus relief in a criminal case, a relator must show that he has\nno adequate remedy at law to redress his alleged harm, and that what he seeks to compel is\n\fa ministerial act, not involving a discretionary or judicial decision. State ex rel. Young v.\nSixth Judicial Dist. Court of Appeals at Texarkana, 236 S.W.3d 207, 210 (Tex. Crim. App.\n2007) (orig. proceeding). When a trial judge refuses to issue a writ of habeas corpus or\ndenies a hearing on the merits, the applicant may either present the application to another\njudge having jurisdiction, or \u201cunder proper circumstances\u201d seek a writ of mandamus. Ex\nparte Villanueva, 252 S.W.3d 391, 304 (Tex. Crim. App. 2008).\n\n The Texas Code of Criminal Procedure provides that \u201c[t]he writ of habeas corpus\nshall be granted without delay by the judge or court receiving the petition, unless it [is]\nmanifest from the petition itself, or some documents annexed to it, that the party is entitled\nto no relief whatever.\u201d Tex.Code Crim. Proc. art. 11.15. Relator has not provided this\ncourt with copies of the applications for writs of habeas corpus on which a hearing is\nrequested. Accordingly, this court is unable to determine whether the trial court may have\nproperly determined from the applications that relator was not entitled to relief. Relator\nalso has not established that the applications were properly filed and brought to the trial\ncourt\u2019s attention. It is relator\u2019s burden to provide this court with a record sufficient to\nestablish his right to relief. Walker v. Packer, 827 S.W.2d 833, 837 (Tex. 1992); Tex. R.\nApp. P. 52.3(k), 52.7(a).\n\n Accordingly, we deny relator\u2019s petition for writ of mandamus.\n\n\n PER CURIAM\n\nPanel consists of Chief Justice Hedges and Justices Jamison and McCally.\nDo Not Publish \u2014 Tex. R. App. P. 47.2(b).\n\n\n\n\n 2\n\f"} -{"text": "\n\n\n\n\nOpinion filed December 20, 2007\n\n\n\n\n\n\n\n\n\n\n\n\u00a0\n\n\n\n\n\n\n\n\n\u00a0\n\n\n\n\nOpinion filed December 20,\n2007\n\u00a0\n\u00a0\n\u00a0\n\u00a0\n\u00a0\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In The\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \n\u00a0\u00a0\u00a0 Eleventh\nCourt of Appeals\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 __________\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 No. 11-07-00133-CR\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 __________\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 GREGORY\nWESTBROOKS, Appellant\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 V.\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 STATE\nOF TEXAS, Appellee\n\u00a0\n\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 On\nAppeal from the 252nd District Court\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0Jefferson\nCounty, Texas\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Trial\nCourt Cause No. 84528\n\u00a0\n\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 O\nP I N I O N\n\n\n\n\nThis\nis an appeal from a judgment adjudicating guilt.\u00a0 Gregory Westbrooks originally\nwaived trial by jury and entered a plea of guilty to the offense of indecency\nby exposure with a child.\u00a0 Pursuant to the plea bargain agreement, the trial\ncourt deferred the adjudication of appellant=s\nguilt and placed him on community supervision for four years.\u00a0 At the hearing\non the State=s motion\nto adjudicate, appellant entered pleas of true to the State=s allegations.\u00a0 The trial\ncourt found that appellant had violated the terms and conditions of his\ncommunity supervision, revoked his community supervision, adjudicated his\nguilt, and assessed his punishment at confinement for ten years.\u00a0 We affirm.\nAppellant=s court-appointed counsel\nhas filed a motion to withdraw.\u00a0 The motion is supported by a brief in which\ncounsel professionally and conscientiously examines the record and applicable\nlaw and states that he has concluded that the appeal is frivolous.\u00a0 Counsel has\nprovided appellant with a copy of the brief and advised appellant of his right\nto review the record and file a response to counsel=s brief.\u00a0 A response has been filed.\nCourt-appointed counsel has complied with the requirements of Anders v.\nCalifornia, 386 U.S. 738 (1967); Stafford v. State, 813 S.W.2d 503\n(Tex. Crim. App. 1991); High v. State, 573 S.W.2d 807 (Tex. Crim. App.\n1978); Currie v. State, 516 S.W.2d 684 (Tex. Crim. App. 1974); Gainous\nv. State, 436 S.W.2d 137 (Tex. Crim. App. 1969); Eaden v. State, 161\nS.W.3d 173 (Tex. App.CEastland\n2005, no pet.).\n\n\n\n\nIn\nhis response, appellant contends that the indictment was illegally amended,\nthat the indictment was void on its face, that the trial court lacked\nsubject-matter jurisdiction, that he suffered Adeliberate\ndepravating [sic] indifference by nonfeasance of office@ when the Atrial\ncourt did not issue@\nthe reporter=s record,\nthat the trial court abused its discretion and Aturned\na blind eye@ in\nsentencing him to confinement for ten years, that he was denied his due process\nrights because he did not have a jury trial, and that he has been denied\neffective assistance of counsel.\u00a0\u00a0 We note that the hearing on the State=s motion to adjudicate was\nconducted prior to the June 15, 2007 effective date of the amendment to Tex. Code Crim. Proc. Ann. art. 42.12, ' 5(b) (Vernon Supp. 2007)\nallowing an appeal from the determination to adjudicate.\u00a0 Therefore, former Tex. Code Crim. Proc. art. 42.12, ' 5(b) (1999) and its\nprohibition concerning appeals from the determination to proceed with the\nadjudication of guilt apply.[1] Davis v.\nState, 195 S.W.3d 708, 709 (Tex. Crim. App. 2006); Hargesheimer v. State,\n182 S.W.3d 906, 909 (Tex. Crim. App. 2006); Hogans v. State, 176 S.W.3d\n829, 831 (Tex. Crim. App. 2005); Phynes v. State, 828 S.W.2d 1, 2 (Tex.\nCrim. App. 1992); Olowosuko v. State, 826 S.W.2d 940, 942 (Tex. Crim.\nApp. 1992).\u00a0 All of appellant=s\ncontentions as they relate to proceedings before the adjudication of guilt and\nto the actual decision to adjudicate guilt are not properly before this court\nand are dismissed for want of jurisdiction.\u00a0 To the extent that appellant=s arguments challenged\nactions subsequent to the adjudication of guilt, each is overruled.\u00a0 Nothing in\nthe record supports appellant=s\ncontentions that he has been afforded ineffective assistance of counsel at any\nlevel.\u00a0 In fact, the clerk=s\nrecord and the multiple volumes of the reporter=s\nrecord support the conclusion that all counsel has provided reasonably\neffective assistance of counsel.\u00a0 Wiggins v. Smith, 539 U.S. 510, 520\n(2003); Strickland v. Washington, 466 U.S. 668, 690 (1984); Andrews\nv. State, 159 S.W.3d 98, 101 (Tex. Crim. App. 2005); Hernandez v. State,\n988 S.W.2d 770 (Tex. Crim. App. 1999).\u00a0 The trial court assessed punishment\nwithin the range authorized by the legislature under Tex. Penal Code Ann. ''\n12.34 and 21.11(a)(2) (Vernon 2003). A penalty assessed within the range of punishment established by the\nlegislature will not be disturbed on appeal. Jackson v. State, 680\nS.W.2d 809 (Tex. Crim. App. 1984); Bradfield v. State, 42 S.W.3d\n350, 354 (Tex. App.CEastland\n2001, pet. ref=d.).\nAll of\nappellant=s contentions and issues have been\nconsidered.\u00a0 Each is either dismissed for want of jurisdiction or is overruled.\nFollowing the\nprocedures outlined in Anders, we have independently reviewed the\nrecord, and we agree that the appeal is without merit.\u00a0 We note that counsel\nhas the responsibility to advise appellant that he may file a petition for\ndiscretionary review by the Texas Court of Criminal Appeals.\u00a0 Ex parte Owens,\n206 S.W.3d 670 (Tex. Crim. App. 2006).\u00a0 Likewise, this court advises appellant\nthat he may file a petition for discretionary review pursuant to Tex. R. App. P. 66.\u00a0 Black v. State,\u00a0\n217 S.W.3d 687 (Tex. App.CEastland\n2007, no pet.). \nThe motion to\nwithdraw is granted, and the judgment of the trial court is affirmed.\n\u00a0\nPER\nCURIAM\nDecember 20,\n2007\nDo not\npublish.\u00a0 See Tex. R. App. P.\n47.2(b).\nPanel consists of:\u00a0 Wright, C.J.,\nMcCall, J., and Strange, J.\n\n\n\n\n[1]Former Article 42.12, section 5(b)\nprovided:\nOn violation of a condition of\ncommunity supervision imposed under Subsection (a) of this section, the\ndefendant may be arrested and detained as provided in Section 21 of this\narticle. The defendant is entitled to a hearing limited to the determination by\nthe court of whether it proceeds with an adjudication of guilt on the original\ncharge. No appeal may be taken from this determination (emphasis added).\n\u00a0\n\n\n"} -{"text": "122 F.3d 892\n10 NDLR P 325, 11 Fla. L. Weekly Fed. C 429\nRussell KAUFMAN, Plaintiff-Appellant,v.CHECKERS DRIVE-IN RESTAURANTS, INC., a Delaware Corporation,Defendant-Appellee.\nNo. 95-4265.\nUnited States Court of Appeals,Eleventh Circuit.\nAug. 29, 1997.\n\nNorman E. Ganz, Ft. Lauderdale, FL, Arnold R. Ginsberg, Miami, FL, for Plaintiff-Appellant.\nClaude H. Tison, Jr., Sandra L. Fanning, McFarlane, Ausley, Ferguson & McMullen, Tampa, FL, James A. Martin, Jr., Clearwater, FL, for Defendant-Appellee.\nAppeal from the United States District Court for the Southern District of Florida.\nBefore TJOFLAT and BLACK, Circuit Judges, and REAVLEY*, Senior Circuit Judge.\nTJOFLAT, Circuit Judge:\n\n\n1\nAppellant Russell Kaufman brought suit against appellee Checkers Drive-In Restaurants, Inc. (\"Checkers\"), asserting claims under federal and state law. The district court, finding that the state law claims substantially predominated over the federal claims, issued an order declining supplemental jurisdiction over the pendent claims. In this interlocutory appeal, Kaufman challenges the district court's action. We do not consider his challenge because we lack jurisdiction to entertain his appeal.\n\nI.\n\n2\nKaufman was hired by Checkers at some time between February and April 1992. After completing the company's training program, he worked at several Checkers restaurants.1 At one point, he worked under Abel Rodriguez, who allegedly subjected him to offensive language, anti-homosexual epithets, AIDS-based comments, and sexually explicit statements. At another point, Kaufman worked under Seth Furman, a supervisor who allegedly pressured him to have sexual relations and subjected him to physical touching and sexually offensive language, at times in the presence of Kaufman's wife. Checkers terminated Kaufman's employment on or about July 1, 1993.\n\n\n3\nKaufman thereafter filed a charge of discrimination on the basis of sex and handicap with the United States Equal Employment Opportunity Commission (the \"EEOC\") and the Florida Commission on Human Relations. On June 24, 1994, the EEOC issued him a right to sue letter.\n\n\n4\nOn August 5, 1994, Kaufman instituted this action, filing an eight-count complaint in the United States District Court for the Southern District of Florida. Three of the counts presented federal claims. Count One alleged that Kaufman was disabled under the Americans with Disabilities Act (ADA), 42 U.S.C. \u00a7\u00a7 12101-12213, because his supervisors at Checkers believed that he was HIV-positive or suffering from AIDS, and that Checkers violated the ADA by intentionally discriminating against him and by terminating his employment because of such belief. Count Two alleged that Checkers, through supervisor Rodriguez, subjected him to hostile environment sexual harassment in violation of Title VII, 42 U.S.C. \u00a7\u00a7 2000e-2000e-17. Count Three alleged that Checkers, through supervisor Furman, subjected Kaufman to quid pro quo sexual harassment in violation of Title VII by requiring that he have sexual relations with Furman as a condition of his employment. Each of these counts sought the recovery of lost wages, compensatory damages for \"pain and suffering and all other hedonic losses as authorized by Title VII,\" punitive damages, and attorney's fees.\n\n\n5\nFive counts of the complaint presented state law claims. Count Four alleged that Checkers' \"discriminatory treatment and discharge\" of Kaufman violated the Florida AIDS discrimination statute, Fla. Stat. \u00a7 760.50. Count Five sought recovery under the Florida Civil Rights Act, Fla. Stat. \u00a7 760.10, for the same conduct alleged in Counts Two and Three. Count Six sought recovery under Florida tort law for intentional infliction of emotional distress. Count Seven alleged that Checkers negligently misrepresented that his job with the company was secure. Count Eight alleged that Checkers had made this misrepresentation fraudulently. Each of these state law counts sought compensatory damages; Count Five sought punitive damages as well.\n\n\n6\nCheckers moved to dismiss each count of the complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim for relief. In a written order, the district court denied the motion with the exception of Count Three, which it dismissed with leave to amend. In addition, the court, acting sua sponte and pursuant to 28 U.S.C. \u00a7 1367(c),2 declined to exercise supplemental jurisdiction over the pendent claims because the state claims \"substantially predominated\" over the federal claims. The court thus dismissed the pendent claims without prejudice.\n\n\n7\nKaufman then lodged this appeal, contending that the district court abused its discretion in dismissing the pendent claims. He argues that the district court, by requiring him to litigate these claims in state court, may have foreclosed his opportunity to obtain a federal court determination on the merits of his federal claims (Counts One through Three). The doctrine of collateral estoppel will foreclose his federal claims, he submits, if the state court decides the pendent claims before the district court acts.\n\n\n8\nShortly after the filing of this appeal, this court instructed the parties to address in their briefs the question of whether this court has jurisdiction to entertain this interlocutory appeal. In his brief, Kaufman contends that we have jurisdiction under the collateral order doctrine articulated in Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). Checkers, in its answer brief, makes no reference to the Cohen doctrine. Rather, it contends that we lack jurisdiction because the order appealed from did not dispose of all of the claims in the case and thus is not a final judgment under 28 U.S.C. \u00a7 1291.3 This statement begs the question of whether the Cohen doctrine applies: if this court has jurisdiction of this appeal, it can only be under the Cohen collateral order doctrine. For the reasons that follow, we conclude that the doctrine does not apply in this case.\n\nII.\n\n9\nIn Cohen, the Supreme Court recognized a \"small class\" of non-final orders involving \"claims of right\" that are \"too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.\" Id. at 546, 69 S.Ct. at 1225-26. To be reviewable under Cohen, an order must (1) \"conclusively determine the disputed question\"; (2) \"resolve an important issue completely separate from the merits of the action\"; and (3) be \"effectively unreviewable on appeal from a final judgment.\" Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 276, 108 S.Ct. 1133, 1136-37, 99 L.Ed.2d 296 (1988) (internal quotation marks omitted) (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 2458, 57 L.Ed.2d 351 (1978)).4 The burden is upon the appellant to make these showings, which in most cases should be evident from the record.\n\n\n10\nKaufman contends that he has made these showings: (1) the order conclusively determines the question in dispute--that is, the district court has made its decision not to adjudicate the state law claims with the federal claims; (2) whether the district court should have exercised its supplemental jurisdiction is an important issue completely separate from the merits of the case; and (3) the order will be effectively unreviewable on appeal from a final judgment.\n\n\n11\nWe assume for the sake of discussion that the first two prongs of Cohen have been met. We find, however, that the third prong has not been satisfied: Kaufman has not shown that the challenged order will be effectively unreviewable on appeal from a final judgment adjudicating the merits of his federal claims. Stated differently, Kaufman has not demonstrated that the order affects \"rights that will be irretrievably lost in the absence of an immediate appeal.\" Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 430-31, 105 S.Ct. 2757, 2761, 86 L.Ed.2d 340 (1985) (emphasis added).5\n\n\n12\nAmong other things, Kaufman has not indicated whether he has filed suit on his pendent claims in state court; if he has not done so, the collateral estoppel problem he presents does not exist. If he has filed suit in state court, then, for issue preclusion to become a problem, Kaufman must demonstrate a likelihood that a final judgment will be entered in the state court proceeding before the district court decides his federal claims (Counts One through Three). More specifically, he must show that the state court will not stay further proceedings in the case until the district court has reached a final judgment on the federal claims. Finally, if the state court will not stay further proceedings, he must show that the district court will not beat the state court to the finish line. Kaufman has made none of these showings. In sum, he has failed to satisfy Cohen's third prong.6\n\n\n13\nKaufman has not demonstrated that the district court's order is an appealable collateral order under Cohen. The appeal is therefore dismissed for lack of jurisdiction.\n\n\n14\nDISMISSED.\n\n\n\n*\n Honorable Thomas M. Reavley, Senior U.S. Circuit Judge for the Fifth Circuit, sitting by designation\n\n\n1\n During his tenure with the company, Kaufman served as assistant manager and, following a promotion, as general manager of one of its restaurants\n\n\n2\n Section 1367(c)(2) states: \"The district courts may decline to exercise supplemental jurisdiction ... if ... the claim substantially predominates over the claim or claims over which the district court has original jurisdiction.\" 28 U.S.C. \u00a7 1367(c)(2) (1994). This subsection codifies the criteria for exercising pendent jurisdiction over state law claims provided in United Mine Workers v. Gibbs, 383 U.S. 715, 726-27, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966)\n\n\n3\n Checkers also observes that the district court's dismissal of Kaufman's pendent claims was not made a partial final judgment under Fed.R.Civ.P. 54(b), from which an appeal would lie under 28 U.S.C. \u00a7 1291\n\n\n4\n For a brief survey of interlocutory orders that are and are not appealable under Cohen, compare Puerto Rico Aqueduct and Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 147, 113 S.Ct. 684, 689, 121 L.Ed.2d 605 (1993) (order denying Eleventh Amendment immunity was appealable), Cohen, 337 U.S. at 546-47, 69 S.Ct. at 1226 (order denying security for costs was appealable), and Ortho Pharm. Corp. v. Sona Distrib., 847 F.2d 1512, 1517 (11th Cir.1988) (order imposing significant sanctions on counsel was appealable), with Coopers & Lybrand, 437 U.S. at 469, 98 S.Ct. at 2458 (order passing on request for class certification was not appealable), and Howard v. Parisian, 807 F.2d 1560, 1566 (11th Cir.1987) (order denying jury trial in civil action was not appealable)\n\n\n5\n For other cases in which the \"effectively unreviewable\" requirement was not met, see Lauro Lines S.R.L. v. Chasser, 490 U.S. 495, 496, 109 S.Ct. 1976, 1977, 104 L.Ed.2d 548 (1989) (order denying motion to dismiss on basis of forum-selection clause); Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 376-79, 101 S.Ct. 669, 674-76, 66 L.Ed.2d 571 (1981) (order refusing to disqualify counsel); Holt v. Ford, 862 F.2d 850, 853-54 (11th Cir.1989) (en banc) (order denying motion for appointed counsel)\n\n\n6\n Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), presents a scenario somewhat analogous to the one before us and suggests that the Cohen doctrine might apply had Kaufman made a better showing of prejudice. In Moses H. Cone, a district court granted a stay in a federal proceeding while the identical issue, the applicability of a contractual arbitration clause, was being litigated in a parallel proceeding in state court. Id. at 7, 103 S.Ct. at 932. The parties disputed whether the first prong of Cohen was satisfied--that is, whether the district court's stay order conclusively determined the disputed question. Id. at 8-9, 103 S.Ct. at 933. Recognizing that the state court would be the first court to decide the applicability of the arbitration clause and that its decision would bind the federal court as res judicata, the Court ruled that the district court's grant of the stay qualified as an appealable collateral order. Id. at 12-13, 103 S.Ct. at 935\nMoses H. Cone is of no help to Kaufman because, as discussed above, he has failed to show that the state court will render its determination on his state law claims before the federal court will do so on the federal claims.\n\n\n"} -{"text": "117 F.3d 555\n326 U.S.App.D.C. 1, 8 Communications Reg. (P&F) 339\nILLINOIS PUBLIC TELECOMMUNICATIONS ASSOCIATION, Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Competitive Telecommunications Association, et al., Intervenors.\nNos. 96-1394, 96-1395, 96-1407, 96-1428, 96-1429, 96-1466,96-1476, 96-1478, 96-1479, 96-1482, 96-1484,96-1485, 96-1486, 97-1016, 97-1021,97-1022, 97-1039, 97-1048,97-1069, 97-1070 and97-1080.\nUnited States Court of Appeals,District of Columbia Circuit.\nArgued May 13, 1997.Decided July 1, 1997.\n\n[326 U.S.App.D.C. 3] On Petitions for Review of Orders of the Federal Communications Commission.\nMichael K. Kellogg, Washington, DC, argued the cause and filed briefs for petitioners Bell Atlantic Corporation, BellSouth Corporation, NYNEX Corporation, Pacific Telesis Group, Southwestern Bell Telephone Company and U.S. West, Inc.\nRobert F. Aldrich, Washington, DC, argued the cause for petitioners American Public Communications Council, Georgia Public Communications Association and Illinois Public Telecommunications Association, with whom Albert H. Kramer was on the briefs.\nRobert M. Gillespie, Associate General Counsel, Richmond, VA, Virginia State Corporation Commission, argued the cause for petitioners Utility Regulatory Commissions of the Various States. With him on the briefs were Lawrence G. Malone, Solicitor, Public Service Commission of New York, Albany, NY, Jonathan D. Feinberg, Assistant Counsel, Albany, NY, Penny Baker, Patrick S. Berdge, San Francisco, CA, Peter G. Ballou, Augusta, ME, Sheldon M. Katz, Montpelier, VT, Ann E. Henkener, Columbus, OH, George M. Fleming, Houston, TX, and Terrence J. Buda, Harrisburg, PA.\nTheodore B. Olson, Washington, DC, argued the cause for petitioners Personal Communications Industry Association, Paging Network, Inc., and Pagemart II, Inc., with whom Scott Blake Harris, Washington, DC, and Robert L. Hoggarth, New York City, were on the briefs.\nDavid W. Carpenter, Chicago, IL, argued the cause for petitioners Interexchange Carriers, with whom Mark C. Rosenblum and Peter H. Jacoby, Basking Ridge, NJ, Genevieve Morelli, Alexandria, VA, Danny E. Adams and Steven A. Augustino, Washington, DC, Michael J. Shortley, III, Arlington, VA, Dana Frix, C. Joel Van Over, Frank W. Krogh, Richard S. Whitt, Washington, DC, Douglas F. Brent, Louisville, KY, Leon M. Kestenbaum, Jay C. Keithley and Harold R. Juhnke, Washington, DC, were on the briefs.\nJohn E. Ingle, Deputy Associate General Counsel, Federal Communications Commission, Washington, DC, argued the cause for respondent, with whom William E. Kennard, General Counsel, Christopher J. Wright, Deputy General Counsel, Laurence N. Bourne, Joel Marcus, Counsels, Joel I. Klein, Acting Assistant Attorney General, U.S. Department of Justice, Robert B. Nicholson and Robert J. Wiggers, Attorneys, were on the brief.\nMichael K. Kellogg, Washington, DC, argued the cause for intervenors, the Regional Bell Operating Companies and National Telephone Cooperative Association, with whom L. Marie Guillory and David Cosson were on the brief.\nRichard P. Bress, Washington, DC, argued the cause for intervenor Peoples Telephone [326 U.S.App.D.C. 4] Company. Maureen E. Mahoney was on the brief.\nRobert F. Aldrich, Washington, DC, argued the cause for intervenor American Public Communications Council, with whom Albert H. Kramer was on the brief.\nS. Walter Washington, Eva King Andries, Austin, TX, and Elizabeth A. Noel, Washington, DC, filed the joint brief for intervenors National Association of State Utility Consumer Advocates, et al.\nCharles C. Hunter, Washington, DC, and Catherine M. Hannan, Bowie, MD, filed the brief for intervenor Telecommunications Resellers Association.\nBefore: EDWARDS, Chief Judge, GINSBURG and SENTELLE, Circuit Judges.\nOpinion for the Court filed PER CURIAM.\n\nPER CURIAM:\n\n1\nBefore us are 20 consolidated petitions seeking review of an order of the Federal Communications Commission revamping the regulatory regime for the payphone industry pursuant to the Telecommunications Act of 1996. The petitions challenge the Commission's decisions to (1) assume authority over the rates for intrastate local coin calls; (2) set the interim rate of compensation to payphone service providers (PSPs) for access code calls and subscriber 800 calls at the market rate prevailing in the majority of states that have deregulated local coin calls; (3) tie the permanent rate of compensation for such calls to the market rate for local coin calls; (4) require only large interexchange carriers (IXCs) to pay PSPs for these calls during the first year; (5) require all IXCs both to track compensable coin calls and to compensate PSPs after the first year; (6) reclassify payphone assets transferred from the regulated to the deregulated operations of a Bell Operating Company (BOC) at net book value and those transferred from a BOC to a separate affiliate at fair market value; and (7) forbid the BOCs from discriminating between their own and their competitors' PSPs in the provision of tariffed services.\n\n\n2\nWe conclude that the Commission acted arbitrarily and capriciously in selecting the interim and permanent rates of compensation for access code and subscriber 800 calls; in requiring only large IXCs to pay PSPs for these calls during the first year; in failing to provide any interim compensation to PSPs for so-called \"0+\" calls and calls from inmate payphones; and in prescribing fair market value for payphone assets transferred from a BOC to a separate affiliate. Therefore, we grant in part and deny in part the petitions for review.\n\nI. BACKGROUND\n\n3\nHistorically only local exchange carriers (LECs) provided payphone service because its provision could not be accomplished independently from an LEC's network. In the mid-1980s the development of \"smart\" payphones enabled independent PSPs to begin competing against the payphone operations of the LECs. See Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, Notice of Proposed Rulemaking (NPRM), 11 F.C.C.R. 6716 pp 4-6.\n\n\n4\nGenerally speaking PSPs do not own the premises on which their payphones are located; instead, a PSP must contract with the owner of the premises, also known as the \"location provider.\" See NPRM p 6. PSPs are compensated for calls made from their phones in two ways. First, they collect coins directly deposited into the payphones. This is the usual method of compensation for local calls. In the states (all but five) that regulate the rates for local coin calls a call costs from $0.10 to $0.35. Id. p 19 & n. 59. In the states that have deregulated local coin rates, the market rate for a coin call is $0.35 per call in four and $0.25 per call in one. Id. Second, each PSP--except those affiliated with a BOC--is compensated through a contract with an IXC (also known as an operator services provider or OSP) for the provision of operator services for collect calls and for calls billed to a calling card or to a third party. Pursuant to these contracts, the PSP agrees to \"presubscribe\" its payphones to the [326 U.S.App.D.C. 5] OSP for these types of calls; in other words, the OSP is the default IXC for any call made from the PSP's payphones. In exchange, the IXC agrees to pay the PSP a percentage of the revenues it earns from calls made from that PSP's payphones. Id. pp 7, 8. Calls made using the services of the presubscribed OSP are called \"0+\" calls because the caller simply dials \"0\" plus the number he is trying to reach. In addition to the above two methods of receiving compensation for calls made from payphones, the payphone operations of LECs also receive a subsidy from the carrier common line charges that the LECs assess the IXCs for originating and terminating long-distance calls. These subsidies place independent PSPs at a significant competitive disadvantage vis-a-vis the LECs' payphone operations. Id. p 8.\n\n\n5\nPSPs receive no compensation for access code calls and subscriber 800 calls. Access code calls are the calls to 800 numbers or 10XXX numbers that the caller uses to reach the long-distance carrier of his choice; all other 800 calls are known as subscriber 800 calls. PSPs used to block callers' attempts to \"dial-around\" the presubscribed OSP by means of an access code. With the passage of the Telephone Consumer Services Improvement Act (TOSCIA), Pub.L. No.101-435, 104 Stat. 986 (1990) (codified at 47 U.S.C. \u00a7 226), PSPs were no longer permitted to block such calls. See 47 U.S.C. \u00a7 226(c)(1)(B). Because access codes are often 800 numbers, TOSCIA effectively prevented the PSPs from blocking subscriber 800 calls as well. At the same time the Congress authorized the Commission to prescribe the compensation to be paid by the OSPs to the PSPs \"for calls routed to providers of operator services\" other than the presubscribed OSP. Id. \u00a7 226(e)(2). Pursuant to this provision the Commission ordered the OSPs to compensate the PSPs for access code calls but declined to prescribe compensation for subscriber 800 calls. See Policies and Rules Concerning Operator Services Access and Pay Telephone Compensation, 6 F.C.C.R. 4736 pp 34, 36 (1991), recon., 7 F.C.C.R. 4355 p 50 (1992).\n\n\n6\nIt was against this background that the Congress enacted \u00a7 276 of the Telecommunications Act of 1996 \"to promote competition among payphone service providers,\" 47 U.S.C. \u00a7 276(b)(1), by having the Commission \"establish a per call compensation plan to ensure that all payphone service providers are fairly compensated for each and every completed intrastate and interstate call using their payphone.\" Id. \u00a7 276(b)(1)(A). In addition, the Act forbids a BOC from \"subsidiz[ing] its payphone service directly or indirectly from its telephone exchange service operations or its exchange access operations\" or from \"prefer[ing] or discriminat[ing] in favor of its payphone service.\" Id. \u00a7 276(a). The Act also provides that the Commission must\n\n\n7\n(B) discontinue the intrastate and interstate carrier access charge payphone service elements and payments ... and all intrastate and interstate payphone subsidies from basic exchange and exchange access revenues ...; [and]\n\n\n8\n(C) prescribe a set of nonstructural safeguards for Bell operating company payphone service ... which safeguards shall, at a minimum, include the nonstructural safeguards equal to those adopted in the Computer Inquiry--III (CC Docket No. 90-623) proceeding.\n\n\n9\nId. \u00a7 276(b)(1).\n\n\n10\nThe Commission's first task was to determine the scope of its new mandate. The Commission decided that the Act's broad directive to promulgate regulations that would ensure that PSPs are \"fairly compensated for each and every intrastate and interstate call\" required the Commission to act only with respect to those types of calls for which a PSP does not already receive fair compensation. Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996 (CC Docket No. 96-128), FCC 96-388 pp 48-49 (rel. Sept. 20, 1996) (Order), recon., FCC 96-439 p 4 (rel. Nov. 8, 1996) (Reconsideration). The Commission found that such calls included local coin calls, access code calls, subscriber 800 and other toll-free calls, and 0+ calls provided by PSPs affiliated with a BOC. Order pp 52-58.\n\n\n11\nThe Commission then decided that the best way of ensuring that PSPs are \"fairly [326 U.S.App.D.C. 6] compensated\" is to let the competitive market set the price for each call. Order p 49. Accordingly, the Commission declared that the local market for coin calls would be deregulated except where a particular State could demonstrate that competition would not constrain prices, because, for example, payphones at certain locations could be priced at monopoly rates. Id. p 51. In determining the rate at which PSPs should be compensated for access code calls, subscriber 800 calls, and other toll-free calls, the Commission rejected the cost-based approach, which attempts to approximate a PSP's actual cost for each type of call. The Commission instead adopted a \"market-based\" surrogate for the pricing of such calls--namely, the price for a local coin call at a particular payphone once the rates for such calls are deregulated--stating that the \"cost[s] of originating the various types of payphone calls are similar.\" Id. p 70. The Commission emphasized, however, that the local coin rate would be only the default rate, from which the PSPs and IXCs could negotiate a departure; and the Commission expected the IXCs would have \"substantial leverage\" to negotiate due to their ability to block subscriber 800 calls from any particular PSP's payphones. Id. pp 70-71; Reconsideration p 71.\n\n\n12\nThe Commission then had to decide who would pay the new charges for access code calls and subscriber 800 calls. The Commission concluded that rather than have the caller deposit money directly into the payphone for such calls, the IXC should be required to pay these charges, for which it could later bill the caller or the 800 subscriber, respectively. Order pp 17, 83-85. An IXC that did not want to incur charges from payphones charging excessive rates could block such calls from those phones. Id. p 17. The Commission also decided to hold the IXC responsible for tracking the number of access code calls and subscriber 800 calls it carries from each payphone in order to determine the amount of compensation it owes each PSP; the Commission found that it is technically feasible for the IXCs to track compensable calls. Id. p 96.\n\n\n13\nThe Commission established a two-year interim compensation scheme whereby PSPs not affiliated with an LEC would receive compensation for access code calls and subscriber 800 calls (but not for inmate and other 0+ calls). The interim compensation scheme relies upon the modal rate ($0.35) for a local coin call in the five states that have deregulated the rate for such calls. For the first year after the effective date of the new rules, IXCs with annual toll revenues in excess of $100 million must contribute monthly to a fund to be paid out pro rata to PSPs; the amount each IXC must contribute is based upon its share of total long distance toll revenues. The total amount to be paid into the fund is determined by multiplying the average number of compensable calls made from payphones each month by $0.35, the price of a local call in the majority of deregulated states. For the second year of the interim period, all IXCs must pay the PSPs either a negotiated rate or the default per-call rate of $0.35 for each compensable call. Order pp 50-51, 72, 117-26.\n\n\n14\nIn order to ensure that LECs would be unable to subsidize their payphone operations with revenues from other telephone services, the Commission decided to treat all LEC payphones as unregulated, untariffed customer premises equipment; accordingly, the LECs must transfer their payphone assets from their regulated accounts to their unregulated accounts. Order pp 142-43. As a consequence the LECs have to \"reduce their interstate CCL charges by an amount equal to the interstate allocation of payphone costs currently recovered through those charges.\" Order p 181; Reconsideration p 170. The Commission did not, however, require the LECs to provide payphone service through structurally separate affiliates; an LEC may instead maintain its payphone assets on its own books provided that it treats those assets as unregulated. Order p 157. As explained below, the method for the valuation of the LEC's payphone assets depends upon whether the LEC transfers them to a separate corporate entity or merely segregates them for the purpose of regulatory accounting. Id. p 162.\n\n\n15\n[326 U.S.App.D.C. 7] Finally, the Commission required the BOCs to make available to all PSPs without discrimination any basic services it provides to its own payphone affiliate or division. The Commission did not prohibit the BOCs from discriminating against PSPs in the provision of untariffed services, such as the installation and maintenance of equipment, billing and collection for payphone services, and the provision of operator services. Order p 149; Reconsideration p 166.\n\nII. ANALYSIS\n\n16\nThe various petitions for review now before the court challenge different aspects of the Commission's new payphone regulations. The State regulatory commissions and the National Association of the State Utility Consumer Advocates et al. (NASUCA) contend that the Commission lacks authority to regulate, or in this instance to deregulate and prevent the States from regulating, rates for local coin calls. The IXCs argue that the Commission acted arbitrarily and capriciously insofar as it (1) used the rate for local coin calls in the majority of States that have deregulated their local coin call rates as the basis for determining the interim compensation for access code and subscriber 800 calls; (2) excused IXCs with toll revenues of less than $100 million from compensating PSPs for such calls during the first year of the interim compensation period; and (3) adopted the local coin call rate that a PSP sets at each payphone as the default rate of permanent compensation for access code and subscriber 800 calls made from that phone. Members of the paging industry, Personal Communications Industry Association et al. (PCIA), contend that the Commission arbitrarily and capriciously required carriers, rather than callers, to pay PSPs for access code and subscriber 800 calls; a group of IXCs (led by Cable & Wireless, Inc.) join PCIA's challenge to the Commission's decision to require the carriers to track such calls as well. Two IXCs (Telco Communications Group, Inc. and Excel Telecommunications, Inc.) argue that the Commission did not give the parties adequate notice that it was planning to adopt a market-based interim compensation scheme. The American Public Communications Council et al. (APCC) and the Regional Bell Operating Companies (RBOCs), which are the seven holding companies that own the BOCs, challenge the Commission's choice of methodologies for valuing payphone assets transferred from regulated to unregulated status; the RBOCs also contend that the Commission arbitrarily and capriciously excluded inmate and other 0+ calls from the interim compensation plan.\n\nA. Jurisdiction over Intrastate Rates\n\n17\nThe utility regulatory commissions of nine states, as petitioners, and the NASUCA, as an intervenor, argue that the Act does not give the Commission the authority to preempt the States' power to regulate local coin rates. The Supreme Court has held that \"[t]he crucial question in any preemption analysis is always whether Congress intended that federal regulation supersede state law.\" Louisiana Public Serv. Comm'n v. FCC, 476 U.S. 355, 369, 106 S.Ct. 1890, 1898, 90 L.Ed.2d 369 (1986). In the quoted case the Court explained that in the Communications Act of 1934 the Congress set up a dual system of state and federal regulation of telephone service: under \u00a7 151 the FCC has the power to regulate \"interstate and foreign commerce in wire and radio communication,\" but under \u00a7 152(b) we are advised that \"nothing in [the Act] shall be construed to apply or give the Commission jurisdiction with respect to (1) charges, classifications, practices, services, facilities, or regulations for or in connection with intrastate communication service by wire or radio of any carrier.\" 47 U.S.C. \u00a7\u00a7 151, 152(b). The Court read \u00a7 152(b) as \"not only a substantive jurisdictional limitation on the FCC's power, but also a rule of statutory construction.\" 476 U.S. at 373, 106 S.Ct. at 1900. Because \u00a7 276 of the Telecommunications Act of 1996 is an amendment to the 1934 Act, it too is subject to the substantive and interpretative limitations of \u00a7 152(b). Therefore, \u00a7 276 should not be read to confer upon the FCC jurisdiction over local coin rates unless \u00a7 276 is \"so unambiguous or straightforward so as to override the command of \u00a7 152(b).\" Id. at 377, 106 S.Ct. at 1902.\n\n\n18\n[326 U.S.App.D.C. 8] As we have seen, the Congress in \u00a7 276 directed the Commission to establish regulations to \"ensure that all payphone service providers are fairly compensated for each and every completed intrastate and interstate call.\" The indicated petitioners and intervenors contend thats 276(b) does not manifest the clear congressional intent necessary to preempt the States' power over local coin rates. They claim that the term \"compensation\" is not used interchangeably in the Act with the phrase \"rates and charges,\" which appears in \u00a7 226(b)(1)(C) (providing that OSPs are required to disclose to their customers \"a quote of its rates or charges for a call\"), or with the phrase \"local coin rate,\" a term of art with which the Congress is familiar. Their point is that if the Congress had intended to give the Commission jurisdiction over local coin rates, instead of requiring only generally that PSPs be \"fairly compensated,\" then it would have stated specifically that it was giving the Commission the authority to set the rates for such calls.\n\n\n19\nIt is undisputed that local coin calls are among the intrastate calls for which payphone operators must be \"fairly compensated\"; the only question is whether in \u00a7 276 the Congress gave the Commission the authority to set local coin call rates in order to achieve that goal. We conclude that it did. The States' and the NASUCA's argument to the contrary notwithstanding, the Congress has in fact used the term \"compensation\" elsewhere in the Act in such a way so as to encompass rates paid by callers. For example, \u00a7 226 provides that \"[t]he Commission shall consider the need to prescribe compensation (other than advance payment by consumers) for owners of competitive payphones\"; if the petitioners were correct, then the parenthetical exception would be mere surplusage. The Congress also has used the term \"compensation\" in other parts of the Act in such a way as to include payments made by customers. See 47 U.S.C. \u00a7 203(c)(1) (providing that a common carrier may not \"charge, demand, collect, or receive a greater or less or different compensation\"--i.e., from customers--than that set forth in its tariffs); 47 U.S.C. \u00a7 309(j)(2)(A) (providing that competitive bidding may be used to grant licenses to use the electromagnetic spectrum if the \"principal use of such spectrum will involve, or is reasonably likely to involve, the licensee receiving compensation from subscribers.\"). Because the only compensation that a PSP receives for a local call (aside from the subsidies from CCL charges that LEC payphone providers enjoy) is in the form of coins deposited into the phone by the caller, and there is no indication that the Congress intended to exclude local coin rates from the term \"compensation\" in \u00a7 276, we hold that the statute unambiguously grants the Commission authority to regulate the rates for local coin calls.\n\n\n20\nThe States and the NASUCA next argue that even if the Commission has jurisdiction over local coin rates, its decision to deregulate those rates was arbitrary and capricious because the Commission did not adequately take into account the possibility of \"locational monopolies\" with substantial market power. Here the States and the NASUCA have in mind situations in which a PSP obtains an exclusive contract for the provision of all payphones at an isolated location, such as an airport, stadium, or mall, and is thereby able to charge an inflated rate for local calls made from that location. See Order p 59.\n\n\n21\nThe Commission did not ignore the possibility of problematic locational monopolies, however; rather it concluded that it would deal with them if and when specific PSPs are shown to have substantial market power. Order p 61; Reconsideration p 62. The petitioners and intervenors failed to present any evidence that there are significant locational monopolies in the states that have already deregulated their local coin rates; accordingly, it was not unreasonable for the Commission to conclude that market forces generally will keep prices at a reasonable level, thereby making locational monopolies the exception rather than the rule. If locational monopolies turn out to be a problem, however, the Commission suggested some ways in which it might deal with them: a State might be permitted to require competitive bidding for locational contracts, or to mandate that additional PSPs be allowed to provide payphones at the location; and if these remedies fail, the Commission may consider the matter [326 U.S.App.D.C. 9] further. Order p 61. Indeed, the Commission specifically reserved the right to modify its deregulation scheme, for example, by limiting the number of compensable calls from each payphone. Id.\n\n\n22\nThe NASUCA argues that the Commission's authority to act under \u00a7 276 must be narrowly tailored in order to avoid unnecessarily preempting the States' power to act. In this vein it contends that the Commission did not have to preempt the States' authority to regulate local coin rates in order to promote the widespread deployment of payphone services. The FCC points out that its regulation of intrastate matters must be as narrow as possible only when the preemption arises by implication--for example, where it is impossible to regulate interstate matters without regulating intrastate matters. See Public Serv. Comm'n of Maryland v. FCC, 909 F.2d 1510, 1514-15 (D.C.Cir.1990); Public Utility Comm'n of Texas v. FCC, 886 F.2d 1325, 1331-32 (D.C.Cir.1989). In this case the Commission has never argued that it has jurisdiction over local coin call rates merely by implication. Rather, as we have seen, the Commission has been given an express mandate to preempt State regulation of local coin calls. Accordingly, the requirement that the FCC's regulation be narrowly tailored simply does not come into play.\n\n\n23\nFinally, the petitioners argue that if the Commission has the authority to regulate the rates for local coin calls, then it may not forebear from regulating them--that is, by relying upon market forces to determine prices--unless it makes the three findings required by 47 U.S.C. \u00a7 160. These are that enforcement of the Act or regulation is not necessary (1) to ensure \"just and reasonable\" nondiscriminatory charges, or (2) \"for the protection of consumers,\" and that (3) forbearance is \"consistent with the public interest.\" The Commission responds that it did not forbear from applying any regulation or any provision of the Act, as contemplated by \u00a7 160, because it did establish a compensation plan in accordance with the directive of the statute. We agree. A market-based approach is as much a compensation scheme as a rate-setting approach; hence \u00a7 160 is simply not relevant to the regulations presently under review.\n\n\n24\nB. Setting Compensation for 800 and Access Code Calls Equal to the Deregulated Local Coin Rate\n\n\n25\nThe FCC decided that the compensation rate for 800 and access code calls should be equal to the deregulated local coin rate. The FCC rested this conclusion on one ground--that the costs of coin calls, 800 calls, and access code calls all are similar:\n\n\n26\nIf a rate is compensatory for local coin calls, then it is an appropriate compensation amount for other calls as well, because the cost[s] of originating the various types of payphone calls are similar.\n\n\n27\nOrder p 70 (emphasis added); see also id. (\"[W]e conclude that deregulated local coin rates are the best available surrogates for payphone costs . ...\" (emphasis added)); Reconsideration p 71 (\"[T]he costs of originating the various types of payphone calls are similar.\"). No other justification was offered by the FCC for its conclusion.\n\n\n28\nThe problem with the FCC's decision is that the record in this case is replete with evidence that the costs of local coin calls versus 800 and access code calls are not similar. Numerous IXCs pointed out that the costs of coin calls are higher than those for coinless calls because of the costs typically associated with use of coin equipment (e.g., the costs of purchasing the equipment and coin collection). See, e.g., AT&T Reply 6 (July 15, 1996); Cable & Wireless, Inc., Petition for Reconsideration 5-6 (Oct. 21, 1996); Comments of Sprint Corporation 9 (July 1, 1996); WorldCom, Inc., Petition for Reconsideration 8-9 (Oct. 21, 1996). In addition, IXCs showed that costs of local coin calls are higher because the PSP bears the costs of originating and completing local calls (i.e., the \"end-to-end\" costs); by contrast, for coinless calls, the PSP only bears the costs of originating the calls. See, e.g., AT&T Reply 12-13; Comments of Sprint Corporation 9. Even the APCC, a trade group for independent PSPs, acknowledged that the costs of coin calls are higher than those of coinless calls. See Comments of the American Public Communications Council 16 n.15 (July 1, [326 U.S.App.D.C. 10] 1996) (\"Arguably the local coin rate should be higher than the rate for a [coinless] call because of the usage and coin collection costs typically associated with local coin calling.\"). AT&T estimated that the costs of local coin calls are three times higher than those of coinless calls. See AT&T Reply 8-9.\n\n\n29\nThe FCC failed to respond to any of the data showing that the costs of different types of payphone calls are not similar. Rather, the FCC's Order cavalierly proclaims that the costs of local coin calls versus 800 and access code calls are \"similar,\" without even acknowledging any of the contrary data. See Order p 70. The agency's order on Reconsideration at least recognizes that some parties had argued that the costs of coin calls are not \"similar\" to those of 800 and access code calls; but the FCC then dismissed the argument with two words--\"We disagree\"--and never provided any reasons for its \"disagreement.\" See Reconsideration p 71. The FCC's ipse dixit conclusion, coupled with its failure to respond to contrary arguments resting on solid data, epitomizes arbitrary and capricious decisionmaking. See Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 46-57, 103 S.Ct. 2856, 2868-73, 77 L.Ed.2d 443 (1983).\n\n\n30\nThe FCC contends that even if the compensation rate is unsupported, it should be upheld because it is only a \"default\" rate. In other words, the FCC claims that IXCs will be able to \"block\" calls from overpriced payphones and, therefore, will be able to negotiate lower rates if the local coin rates are too high. See Reconsideration p 71. This possibility, however, does not save a default rate that is inexplicably tied to a local coin rate.\n\n\n31\nWe have no good reason to doubt the FCC's conclusion that the IXCs' potential to block calls gives them some leverage to negotiate. Although the IXCs protest that they cannot currently recognize overpriced payphones in \"real time,\" see AT&T Reply 4 n.8, they do not argue that they lack the technology to do so. In fact, at oral argument, counsel for the IXCs all but conceded that the relevant technology is currently available. See Tr. of Oral Argument at 15-19. We therefore conclude that the FCC's assumption that IXCs have the capacity to \"block\" calls is reasonable. See Telocator Network of Am. v. FCC, 691 F.2d 525, 539-42 (D.C.Cir.1982). However, this conclusion does not save the default compensation rate for 800 and access code calls. The critical point here is that the FCC has failed to justify tying the default rate to local coin rates; and the mere possibility that the default rate might be adjusted by negotiation does not negate the fact that it is arbitrary. Indeed, blocking is hardly an ideal option for the IXCs, for it is not only expensive to implement, see, e.g., Petition of Sprint for Reconsideration 10 n.8 (Oct. 21, 1996); Tr. of Oral Argument at 19 (counsel for the IXCs, without contradiction, stated that blocking is \"immensely more expensive\" then tracking), but its use invariably will result in a mutual loss of business for both the PSPs and the IXCs. Thus, at a minimum, the IXCs are entitled to a default rate that is reasonably justified, so they are not forced to resort to blocking only because the default rate has been set at an unreasonable level.\n\n\n32\nIn short, the FCC's conclusion that compensation for 800 and access code calls should be set at the deregulated local coin rate is unjustified. Accordingly, we remand this issue to the agency for further consideration.\n\nC. Interim Plan\n\n33\n1. Compensation for 800 and Access Code Calls During the Interim Period\n\n\n34\nThe IXCs also challenge the FCC's interim plan for compensation for 800 and access code calls based on a rate of $.35 per call. Under the first phase of the interim plan, large IXCs (with toll revenues over $100 million) are required to pay a flat-rate compensation of $45.85 per payphone per month ($.35 per call multiplied by 131, the average number of 800 and access code calls per payphone per month); the large IXCs must pay the flat-rate compensation in proportion to their total long distance revenues. During the second phase, all IXCs are required to pay $.35 per 800 or access code call. We find that the interim plan is arbitrary and capricious for two reasons.\n\n\n35\n[326 U.S.App.D.C. 11] First, the FCC cites no reasonable justification for an interim rate based on $.35 per call. The FCC picked the $.35 figure because the $.35 rate was deemed the best approximation of a deregulated coin rate, as it is \"the rate in the majority of states that have allowed the market to determine the appropriate local coin rate,\" Order p 72. However, as we have already found, the FCC's decision to set compensation for 800 and access code calls at the deregulated local coin rate was arbitrary and capricious. Thus, the $.35 rate, which is an attempt to approximate the deregulated coin rate, cannot stand. The FCC must now set a new interim rate and decide what is to happen once the interim period is over. The agency may of course elect to use the new interim rate as a \"default rate\" at the conclusion of the interim period. If this were done, the PSPs and IXCs still could be left free to depart from the default rate through negotiations (with IXCs having to resort to blocking to gain leverage in any such negotiations).\n\n\n36\nSecond, we also find that the FCC acted arbitrarily and capriciously in requiring payments only from large IXCs--those with over $100 million in toll revenues--for the first phase of the interim plan. The FCC based this decision on concerns of administrative convenience. See Reconsideration p 126. It is far from clear that the administrative burdens are as heavy as the FCC seems to believe them to be, as each carrier would merely be required to write a check based on its percentage of annual toll revenues. Yet, even assuming, arguendo, that the FCC's limitation marginally increases administrative convenience, this limitation comes at a huge cost. For example, if small IXCs were included, they could be required to pay as much as $4 million per month. As the small IXCs concede, this amount is \"far from de minimis.\" Final Brief of Intervenor Telecommunications Resellers Association at 9. Administrative convenience cannot possibly justify an interim plan that exempts all but large IXCs from paying for the costs of services received. Perhaps more fundamentally, the FCC did not adequately justify why it based its interim plan on total toll revenues, as it did not establish a nexus between total toll revenues and the number of payphone-originated calls. Accordingly, we grant the petition for review on these points, and remand the matter to the FCC for further consideration.\n\n\n37\n2. Compensation for 0+ Calls During the Interim Period\n\n\n38\nSection 276 requires the Commission to \"prescribe regulations that establish a per call compensation plan to ensure that all payphone service providers are fairly compensated for each and every completed intrastate and interstate call using their payphone.\" 47 U.S.C. \u00a7 276(b)(1)(A). The Commission's Order, however, limits compensation during the first interim year to access code and 800-calls. Order p 124-25. PSPs will therefore receive no interim compensation for so-called \"0+\" calls. Nowhere does the Commission explain why this is so.\n\n\n39\nThe RBOCs complain that the Commission's failure to provide compensation for 0+ calls is both unreasoned and contrary to the plain language of \u00a7 276. The Commission does not dispute this claim on the merits. It argues rather that we should not consider the RBOCs' claim because they failed to raise it before the Commission. 47 U.S.C. \u00a7 405. We disagree.\n\n\n40\nThe RBOCs mentioned the argument in their petition for clarification, but stated that they did not \"anticipate any challenge to the Commission's failure to include, in its interim compensation levels, an estimate of the 0+ calls carried by RBOC payphones.\" RBOC Petition for Clarification at 5 n.1. The Commission uses this language to argue that the RBOCs affirmatively abandoned this claim in their proceedings before the Commission and cannot therefore raise it in this court. The Commission, however, focuses only on a single sentence. The next sentence reads, \"[s]o long as the interim compensation mechanism provides some level of recompense ... on 0+ calls where RBOCs are not otherwise compensated, the RBOCs see no reason to upset the Commission's balance of competing concerns.\" Id. (emphasis in original). The RBOCs' promise to refrain from challenging this portion of the regulations was conditioned on the Commission's provision of [326 U.S.App.D.C. 12] \"some level of recompense\" for 0+ calls during the first interim year. The Commission's final interim plan included no such \"level of recompense.\" The RBOCs did not, therefore, abandon this claim. Their petition for clarification gave the Commission an \"opportunity to pass\" upon this question. That is all thats 405 requires. We therefore reject the Commission's waiver argument. On the merits, it is clear that the RBOCs are correct. The Commission's failure to provide interim compensation for 0+ calls is patently inconsistent withs 276's command that fair compensation be provided for \"each and every completed ... call.\" The Commission's failure to provide an explanation for this seemingly illogical decision is arbitrary and capricious. On remand, the Commission must correct this flaw in the interim compensation scheme.\n\n\n41\n3. Compensation for Inmate Calls During the Interim Period\n\n\n42\nThe RBOCs raise a different but related issue regarding compensation during the interim period for calls made from inmate payphones. The Commission decided that inmate payphones would not be eligible for any interim flat-rate compensation for coinless calls. The Commission said this decision was justified \"because such payphones are not capable of originating either access code or subscriber 800 calls, and the interim compensation is provided only for those two types of calls.\" Reconsideration p 52. The RBOCs claim that the Commission never adequately reconciled this determination with the \"each and every completed call\" language of \u00a7 276.\n\n\n43\nThe Commission does not respond to this claim on the merits. It requests instead that we delay deciding this issue until we consider a different petition for review that also raises issues related to inmate payphones. We deny the Commission's request. There is no reason why we should defer judgment. The Commission has pointed to no way in which this issue is inextricably intertwined with the issues that we will decide in the subsequent inmate payphone case. It is entirely appropriate for us to decide this question at this time.\n\n\n44\nDoing so, we hold that the issue must be remanded to the Commission. Section 276 requires the Commission to promulgate regulations that will ensure that PSPs receive fair compensation \"for each and every completed intrastate and interstate call using their payphone.\" 47 U.S.C. \u00a7 276(b)(1)(A). Under the regulations the Commission has promulgated, PSPs will receive no compensation for coinless calls made from inmate phones during the first interim year. This appears to be blatantly inconsistent with the language of the statute. The Commission has not explained why it is not. The Commission's interim compensation plan must therefore be remanded.\n\nD. Carrier Pays\n\n45\nThe PCIA petitioners challenge as arbitrary and capricious the Commission's decision to adopt a \"carrier pays\" compensation system for 800 calls. In developing a payphone compensation system, the Commission's expressed desire was to create \"a competitive payphone industry,\" Order p 8, that would be both \"cost effective\" and \"place[ ] the payment obligation on the primary economic beneficiary,\" id. p 83 The Commission concluded that \"carrier pays\" compensation furthers each of these goals. Petitioners disagree.\n\n\n46\nPetitioners first argue that a \"carrier pays\" system does not--indeed, cannot--promote competition. This is so, petitioners explain, because the party causing the cost (the caller) does not have to pay it, and the party incurring the cost (the carrier, or, if the cost is passed on, the 800 service subscriber) has no way to decline it. The Commission, however, concluded that the party incurring the cost could avoid it. As the Commission explained, carriers have some leverage \"to negotiate for lower per-call compensation amounts\" in that they can block calls from particular payphones charging excessive rates. Reconsideration p 66, p 71. Subscribers to an 800 service can utilize a carrier's call-blocking capability by negotiating with the carrier to block calls from payphones with excessive per-call compensation charges. Order p 17. Further, as discussed above, we have determined that the Commission reasonably [326 U.S.App.D.C. 13] concluded that carriers can and will develop blocking technology. Thus, a \"buyer\" (the carrier or the 800 service subscriber) will have the option of rejecting a \"seller's\" (the PSP) excessively priced service. Given this explanation, the Commission's conclusion that a \"carrier pays\" compensation system will result in competitive market pricing of 800 service payphone per-call compensation charges was not arbitrary or capricious.\n\n\n47\nPetitioners also argue that the substantial burdens of the \"caller pays\" system outweigh the minor inconvenience to callers of requiring coin deposits. The Commission did not disagree that the burden of requiring coin deposits was slight. See Order p 85. Nevertheless, the Commission elected to adopt a \"carrier pays\" system in order to maintain the convenience of coinless calling upon which the public has come to rely. Id. The Commission's balancing of the competing concerns of administrative efficiency and consumer convenience was not arbitrary.\n\n\n48\nFinally, petitioners contend that the Commission's \"primary economic beneficiary\" analysis is flawed. The Commission concluded that the carrier is the \"primary economic beneficiary\" of an 800 call because the call utilizes a particular carrier regardless of where the call is originated. Reconsideration p 88. In addition, the Commission concluded that the called party received \"greater economic benefit\" from an 800 service call than the calling party as evidenced by the fact that the called party is willing to pay for the call. See id. As a result, the Commission concluded that it was appropriate for carriers to bear the per-call compensation charges for the calls, and that \"the IXC can best pass on ... any charges for compensable calls\" to the 800 service subscribers. Id. Petitioners argue that this analysis is arbitrary in that a carrier benefits from an 800 service call regardless of whether that call is made from a payphone or a home phone. It is the caller that primarily benefits from the use of the payphone. We fail to understand petitioners' point. The Commission did not disagree with petitioners that carriers (and subscribers) benefit from 800 service calls regardless of the source of the call. See id. What the Commission concluded was that as the \"primary economic beneficiaries\" of 800 service calls, carriers should incur the costs of the calls which, in the case of payphone calls, now include per-call compensation charges. The Commission's judgment on this matter was neither arbitrary nor capricious. We therefore reject petitioners' challenge to the \"carrier pays\" compensation scheme.\n\nE. Tracking\n\n49\nWe can quickly dispose of the argument, made by a subset of IXCs, that the FCC acted arbitrarily and capriciously in requiring that IXCs \"track\" payphone calls. In its Order, the FCC concluded that \"the requisite technology exists for IXCs to track calls from payphones.\" Order p 96. None of the commenters disputed this claim. Instead, the complaining IXCs merely argue that the call tracking responsibility should be placed on another party. The FCC, however, acted well within the bounds of reasonableness in assigning this responsibility to the IXCs. As a result, we deny the petition for review on this claim.\n\nF. Non-discrimination\n\n50\nThe APCC petitioners challenge the Commission's decision to prohibit discrimination by BOCs only in the provision of basic services. According to petitioners, the nondiscrimination mandate of \u00a7 276(a)(2) of the Communications Act requires that the Commission adopt regulations prohibiting all discrimination by BOCs, including discrimination in the provision of basic services. We, of course, review an agency's construction of a statute which it administers under the two-step test developed by the Supreme Court in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under the first step of the Chevron test, we ask \"whether Congress has directly spoken to the precise question at issue.\" Id. at 842, 104 S.Ct. at 2781. If so, \"that is the end of the matter.\" Id. However, if Congress has not spoken directly to the question at issue, we then ask \"whether the agency's answer is based on a permissible construction of the statute.\" Id. [326 U.S.App.D.C. 14] at 843, 104 S.Ct. at 2781. We apply this test to the FCC's construction of \u00a7 276.\n\n\n51\nSection 276(a)(2) of the Communications Act provides that \"any Bell operating company that provides payphone service ... shall not prefer or discriminate in favor of its payphone service.\" 47 U.S.C. \u00a7 276(a)(2). This command, taken alone, appears to express an unambiguous congressional intent to eliminate all discrimination by BOCs in favor of their payphone services. However, under step one of Chevron, we consider not only the language of the particular statutory provision under scrutiny, but also the structure and context of the statutory scheme of which it is a part. Amalgamated Transit Union v. Skinner, 894 F.2d 1362, 1368 (D.C.Cir.1990). Considering these other indicators of congressional intent, the command of \u00a7 276(a) is far from clear.\n\n\n52\nSubsection (b) of \u00a7 276 requires the Commission to adopt \"regulations that ... prescribe a set of nonstructural safeguards ... to implement the provisions of ... subsection (a), which safeguards shall, at a minimum, include the nonstructural safeguards equal to those adopted in the Computer Inquiry-III ... proceeding.\" Id. \u00a7 276(b)(1)(C). The safeguards adopted in the Computer Inquiry-III proceeding do not prohibit all discrimination in the provision of nontariffed services to independent PSPs. See In the Matter of Computer III Remand Proceedings: Bell Operating Company Safeguards and Tier 1 Local Exchange Company Safeguards, 6 F.C.C.R. 7571, 7575-76 (1991). Section 276(b)(1) thus implies that Congress did not view the elimination of discrimination in the provision of nontariffed services as necessary to comply with the command of \u00a7 276(a). Although petitioners point us to a House Report concerning \u00a7 276 which expresses an intent to \" 'eliminate all discrimination between BOC and independent payphones,' \" H.R.REP. NO. 104-204(I), at 88 (1995) (emphasis added), the language and structure of the statute enacted do not establish an unambiguous congressional intent to eliminate all discrimination in the provision of nontariffed services.\n\n\n53\nWe therefore proceed to step two of the Chevron test and ask whether the Commission's resolution of the ambiguity in \u00a7 276 was \"permissible.\" The Commission concluded that it was unnecessary to prohibit BOC discrimination in the provision of nontariffed services as those services \"are available on a competitive basis and do not have to be provided by [BOCs] as the only source of services.\" Reconsideration p 166. This policy judgment is both reasonable and consistent with the Act's purposes of \"promot[ing] competition and reduc[ing] regulation.\" Pub.L. No. 104-104. We therefore hold that the Commission's interpretation of \u00a7 276 as only requiring regulations eliminating discrimination in the provision of basic services was permissible.\n\nG. Payphone Asset Valuation\n\n54\nFinally, both the BOC and APCC petitioners challenge as arbitrary the Commission's method of valuing payphone assets. Section 276(a)(1) provides that \"any Bell operating company that provides payphone service shall not subsidize its payphone service directly or indirectly from its telephone exchange service operations or its exchange access operations.\" Id. U.S.C. \u00a7 276(a)(1). Subsection (b) of \u00a7 276 requires the Commission to issue \"regulations that ... discontinue ... all intrastate and interstate payphone subsidies from basic exchange and exchange access revenues.\" 47 U.S.C. \u00a7 276(b)(1)(B). The Commission's rules governing the accounting valuation of assets transferred between affiliates (\"affiliate transaction rules\") provide that:\n\n\n55\nAssets sold or transferred between a carrier and its affiliate pursuant to a tariff, including a tariff filed with a state commission, shall be recorded in the appropriate revenue accounts at the tariffed rate. Non-tariffed assets sold or transferred between a carrier and its affiliate that qualify for prevailing price valuation, as defined in paragraph (d) of this section, shall be recorded at the prevailing price. For all other assets sold by or transferred from a carrier to its affiliate, the assets shall be recorded at the higher of fair market value and net book cost.\n\n\n56\n47 C.F.R. \u00a7 32.27(b).\n\n\n57\nInterpreting these provisions, the Commission concluded that an LEC providing payphone [326 U.S.App.D.C. 15] service may, but need not transfer its payphone operations to a \"structurally separate affiliate[ ].\" See Order p 157. Those LECs that elect not to transfer their payphone assets to a separate affiliate may maintain the assets on the books at net book value. Id. p 163. If, on the other hand, an LEC transfers its \"payphone assets to either a separate affiliate or an operating division that has no joint and common use of assets or resources with the LEC and maintains a separate set of books,\" the LEC must record the transfer of assets at the higher of fair market value or net book value. Id. p 164. Fair market value includes the value of \"intangible assets such as location contracts.\" Id. According to the Commission, fair market valuation will \"effectively capture[ ] on the carrier's books any appreciation in value of those assets, thus ensuring that any eventual gains would accrue to the benefit of the ratepayers and shareholders.\" Id. p 166. The BOC petitioners contend that the Commission acted arbitrarily in requiring fair market valuation of those payphone assets transferred to a separate affiliate or operating division. Conversely, the APCC petitioners argue that the Commission acted arbitrarily in requiring the use of net book value for payphone assets not transferred.\n\n\n58\nAs a general rule, utility service ratepayers \"pay for service\" and thus \"do not acquire any interest, legal or equitable, in the property ... of the company. Property paid for out of moneys received for service belongs to the company.\" Board of Pub. Util. Comm'rs v. New York Tel. Co., 271 U.S. 23, 32, 46 S.Ct. 363, 366, 70 L.Ed. 808 (1926). However, we have held that neither ratepayers nor the company (and thus its shareholders) are necessarily entitled to increases in the value of assets employed in the utility's operations. See Democratic Cent. Comm. of the Dist. of Columbia v. Washington Metro. Area Transit Comm'n, 485 F.2d 786, 805 (D.C.Cir.1973), cert. denied, 415 U.S. 935, 94 S.Ct. 1451, 39 L.Ed.2d 493 (1974). Rather, such increases are to be allocated under a two-step test in which the court first asks which party \"bears the risk of loss\" on the assets. AT&T Info. Sys., Inc. v. FCC, 854 F.2d 1442, 1444 (D.C.Cir.1988). The party that bore the risk of loss is the party entitled to the capital gains on the assets. See id. Only if it is difficult to determine who bore the risk of loss will \"the second principle come[ ] into play, namely, 'that those who bear the financial burden of particular utility activity should also reap the benefits resulting therefrom.' \" Id. (quoting Democratic Cent., 485 F.2d at 808).\n\n\n59\nIn developing its valuation methodology, the Commission declined to apply the two-step test we developed in Democratic Central. According to the Commission, that test is not \"directly applicable either to the situation where a carrier retains the payphone assets on its books or transfers the payphone assets to a separate affiliate.\" Order p 168. Instead, the Commission concluded that its affiliate transaction rules adequately protected the interests of ratepayers. Id. Taken alone, this conclusion may be correct. But the Commission fails to recognize that our test in Democratic Central was designed to protect not only the interests of ratepayers, but also the competing interests of shareholders. See 485 F.2d at 806. By adopting a going concern valuation methodology, the Commission was attempting to transfer the increase in the value of the payphone operations from the LECs (and their shareholders) to ratepayers. This was plainly inappropriate under Democratic Central.\n\n\n60\nAs explained above, in allocating increases in asset value under Democratic Central, we first ask which party bore the risk of loss on the assets. The answer to that question may change over time depending on the regulatory scheme in place. Prior to October 1990, the FCC regulated the rates of local telephone exchange companies under a rate-of-return regulatory system. See Policy and Rules Concerning Rates for Proposed Dominant Carriers, Further Notice of Proposed Rulemaking, 3 F.C.C.R. 3195 (1988). Under a rate-of-return system, a company \"can charge rates no higher than necessary to obtain sufficient revenue to cover\" the costs of regulated activities and \"achieve a fair return on equity.\" See National Rural Telecom Ass'n v. FCC, 988 F.2d 174, 177-78 (D.C.Cir.1993) (internal quotations and citations omitted). The provision of payphone service traditionally has been treated as a [326 U.S.App.D.C. 16] regulated activity. See 47 C.F.R. \u00a7\u00a7 32.2351, 32.6351, 32.5010. Thus, LEC shareholders were protected against losses from depreciation expenses on the assets of regulated activities; it was ratepayers who bore the risk of loss on such assets. See AT&T Info. Sys., 854 F.2d at 1444.\n\n\n61\nHowever, in October 1990, the Commission switched to a \"price cap\" system of regulating the larger LECs (i.e., the BOCs and GTE companies). Policy and Rules Concerning Rates for Dominant Carriers: Second Report and Order, 5 F.C.C.R. 6786 (1990). Under a price cap system, \"the regulator sets a maximum price, and the firm selects rates at or below the cap.\" National Rural Telecom, 988 F.2d at 178. Cost reductions under the price cap scheme \"do not trigger reductions in the cap,\" but rather increase the company's profits. See id. Thus, after 1990, the ratepayers no longer bore the risk of losses from payphone operation assets. To the extent a BOC incurred expenses in connection with payphone operations, company and shareholder profits declined. As a result, at least since 1990, investors rather than ratepayers have borne the risk of loss on payphone assets (tangible and intangible), and thus, under Democratic Central, investors should reap the benefit of increases in the value of such assets.\n\n\n62\nThe Commission argues that our decision in Southwestern Bell Corp. v. FCC, 896 F.2d 1378 (D.C.Cir.1990), forecloses the BOCs' challenge to the Commission's interpretation and application of the affiliate transaction rules to this case. We disagree. In Southwestern Bell, we upheld the Commission's affiliate transaction rules against a challenge by the GTE companies. In so doing, we specifically rejected the argument that the Commission's affiliate transaction rules violated Democratic Central. Id. at 1381. We concluded that a deviation from the rule of Democratic Central was appropriate in the case of \"complex, ongoing affiliate transactions\" so that the Commission could guard against systematic cost misallocation by the local exchange companies. Id. at 1381-82. However, we specifically noted Democratic Central's continued applicability to \"one-time\" transfers mandated by industry reform. Id. at 1382. In this case, the Commission's affiliate transaction rules as applied to the transfer of payphone assets pursuant to \u00a7 276's command to discontinue payphone subsidies clearly falls within the latter category of transactions. Thus, the BOCs' challenge to the Commission's application of its rules was not foreclosed by Southwestern Bell.\n\n\n63\nThe APCC petitioners argue that the Commission erred in allowing payphone assets to be placed in regulated accounts at net book value rather than fair market value. We reject the APCC petitioners' challenge to the net book valuation method for the same reasons we accept the BOCs' challenge to the Commission's fair market method. The risk of loss on payphone assets was borne by shareholders. Thus, any increases in the value of the payphone operations belongs to the shareholders, not the ratepayers. Democratic Central, 485 F.2d at 806.\n\n\n64\nWe also reject the APCC petitioners' argument that \u00a7 276 requires that a BOC's payphone assets be transferred to its unregulated books. Section 276 simply requires that payphone subsidies be discontinued. 47 U.S.C. \u00a7 276(b)(1)(B). The Commission interpreted this provision as requiring only that payphone assets not transferred to a separate affiliate be accounted for under the Computer Inquiry-III nonstructural safeguards. Order p 157. These safeguards were designed to \"effectively protect against cross-subsidization.\" 6 F.C.C.R. at 7575. We fail to see how the application of these safeguards to payphone service operations violates \u00a7 276's command to discontinue payphone subsidies.\n\n\n65\nIn sum, we agree with the BOC petitioners that the Commission's fair market valuation methodology is arbitrary and capricious and contrary to our precedent. Therefore, we will vacate and remand that portion of the Commission's order for further proceedings. However, we reject the APCC petitioners' argument that the Commission's net book valuation method is arbitrary or contrary to the command of \u00a7 276.[326 U.S.App.D.C. 17] III. CONCLUSION\n\n\n66\nFor the foregoing reasons, we grant in part and deny in part the petitions for review.\n\n\n67\nSo ordered.\n\n"} -{"text": "\n31 N.J. Super. 277 (1954)\n106 A.2d 321\nWHITEMAN FOOD PRODUCTS COMPANY, A CORPORATION, PLAINTIFF-APPELLANT,\nv.\nPRODOTTI ALIMENTARI, G. ARRIGONI & C., SOCIETA PER AZIONI, A CORPORATION, DEFENDANT-RESPONDENT.\nSuperior Court of New Jersey, Appellate Division.\nArgued June 21, 1954.\nDecided June 25, 1954.\n*278 Before Judges CLAPP, SMALLEY and SCHETTINO.\nMr. Saul J. Zucker argued the cause for plaintiff-appellant (Messrs. Kristeller & Zucker, attorneys).\nMr. Samuel H. Nelson argued the cause for defendant-respondent.\nThe opinion of the court was delivered by CLAPP, S.J.A.D.\nThis matter comes before us on a reargument of the case reported in 27 N.J. Super. 359 (App. Div. 1953). Leave to reargue was granted in Original R. & R. Empire Pickle Works v. G. Arrigoni & C. Societa Per Azioni, 28 N.J. Super. 405, 408 (App. Div. 1953), certification denied Original R. & R. Pickle Works v. Prodotti Alimentari, G. Arrigoni & C., Societa Per Azioni, 14 N.J. 352 (1954). There are two attachment actions involving these parties, as stated in 28 N.J. Super., at page 407 and 408. Defendant has entered a general appearance in the later action, and so, for practical purposes, the questions raised here in the earlier action are of no consequence, unless *279 plaintiff is liable for costs and damages on an attachment bond it posted in that action.\nWe need deal with but one issue, namely, whether the writ of attachment issued in the earlier action was properly quashed. See 27 N.J. Super. 359, supra. That in turn raises the question whether the affidavit supporting the writ of attachment was sufficient. Defendant's argument, in the main, rests on two points. First, it says that this affidavit failed to show a meeting of minds on the contract on which plaintiff's claim rests. The argument here is that plaintiff made an offer to buy some merchandise from defendant in Italy, attaching a condition to the offer; but defendant, when it accepted the offer, rejected the condition. From the affidavit, however, it appears that after defendant had refused to accept this condition, plaintiff gave instructions from time to time to defendant to make shipments pursuant to the contract. This sufficiently shows that plaintiff had acceded to defendant's terms. Restatement of Contracts \u00a7 21; 1 Williston on Contracts (rev. ed.), \u00a7 90. As stated in the affidavit, defendant complied with those instructions of plaintiff, shipping to plaintiff a large quantity of merchandise, nearly a third of that ordered.\nThe second point urged is that defendant accepted the plaintiff's offer upon a condition, namely, \"provided crop.\" This condition was met; the crop was sufficient to meet plaintiff's order. As appears in the affidavit (in two places), defendant's general manager orally assured plaintiff that \"it had on hand\" the merchandise \"required to fill the contract.\" Besides, defendant's letter of August 14 is quoted in the affidavit: \"We are of course keeping the quantities you ordered reserved for you.\" We dealt with this in 28 N.J. Super., at page 410.\nButtressing our conclusions upon both these points is the subsequent statement of defendant's general manager (also set forth in the affidavit) admitting \"that defendant was obligated under its contract with plaintiff\" to deliver the remaining two-thirds of the merchandise \"contracted *280 for.\" The affidavit makes out a prima facie case. Plenary proof is not required.\nWe do not, therefore, reach the question whether the trial court erred in refusing to permit additional affidavits to be filed. We may say, however, that the provisions of R.R. 4:77-3 with respect to the filing of additional affidavits were designed to get away from a highly technical practice which once obtained. See Corbit v. Corbit, 50 N.J.L. 363 (Sup. Ct. 1888); McGrew v. Steiner, 77 N.J.L. 377 (Sup. Ct. 1909); Garrison v. Seckendorff, 79 N.J.L. 203 (Sup. Ct. 1909), affirmed 80 N.J.L. 463 (E. & A. 1910).\nReversed.\n"} -{"text": "\n377 P.2d 391 (1962)\nThomas K. HUDSON, Plaintiff in Error,\nv.\nThe AMERICAN FOUNDERS LIFE INSURANCE COMPANY OF DENVER, Colorado, Defendant in Error.\nNo. 19581.\nSupreme Court of Colorado. In Department.\nNovember 5, 1962.\nRehearing Denied January 14, 1963.\n*392 Clarence W. Button, Alice Loveland, Denver, for plaintiff in error.\nYegge, Hall & Shulenburg, Denver, for defendant in error.\nDAY, Chief Justice.\nIn the trial court plaintiff, The American Founders Life Insurance Company, of Denver, Colorado, obtained a judgment against defendants Thomas K. Hudson and Robert E. Holland jointly and severally for $37,400.00 and costs. This judgment is questioned by separate writs of error filed each by Hudson and Holland. As to the judgment against Holland, that decision is announced this date. See Holland v. American Founders, Colo., 376 P.2d 162.\nWe shall refer to the parties as they appeared in the trial court or by name.\nThe complaint states four separate claims against Hudson, Forrest C. Roan and Robert E. Holland. We are concerned here only with the first claim as it relates to Hudson. The second and third claims were voluntarily dismissed by plaintiff before trial, and the fourth claim was dismissed on trial.\nPlaintiff alleged that in February and March, 1956, Hudson was president of plaintiff corporation, a member of its board of directors, and, therefore, sustained a fiduciary relationship to the plaintiff. These allegations were admitted in Hudson's answer.\nThe complaint alleges that during February and March, 1956, Hudson was a director of Texas Adams Oil Company, Inc. and was fully familiar and conversant with the affairs, assets and business of said corporation; that in violation of his fiduciary relationship to plaintiff, Hudson unlawfully procured and caused the issuance of and delivery to Clarence W. Button of 15,000 shares of the common stock of plaintiff in exchange for shares of the Texas Adams Oil Company, Inc.; also that about said time he unlawfully procured and caused the issuance and delivery of 9,000 shares of the common stock of plaintiff to Alice Loveland and Charlotte Brown in a similar transaction involving exchange for shares of stock of Texas Adams Oil Company, Inc.; that at the time of the exchanges of stock the value of plaintiff's stock was $2.00 per share and that the Texas Adams Oil Company, Inc. stock was of doubtful value; at the time the complaint was filed the Texas Adams Oil Company stock was worthless and that said company was adjudged a bankrupt in March, 1957, and was defunct. The complaint stated that plaintiff had received only $1,000.00 for the Texas Adams Oil Company stock. Plaintiff prayed for damages in the sum of $47,000.00.\nHudson by his answer, in addition to an allegation that the complaint fails to state a claim, admitted the issuance and delivery to Button of 15,000 shares of the common stock of plaintiff and denied the material allegations of the complaint other than those above mentioned. As affirmative defenses he asserted: That there was contributed to plaintiff 8,000 shares of the common capital stock of plaintiff corporation as a donation in said transaction and that said stock was accepted and retained by plaintiff corporation in full accord and satisfaction; that plaintiff holds and retains as its property all stock of Texas Adams Oil Company received by it in the transaction and therefore is estopped to make any claim based upon such transaction; that all of Hudson's acts as an officer and director *393 of plaintiff, and especially the so-called Texas Adams transaction, were ratified and confirmed by the stockholders of plaintiff at an annual meeting in March, 1956, and again at the annual meetings of plaintiff stockholders in 1957 and 1958.\nFollowing trial to the court judgment was entered in favor of plaintiff and against defendants Hudson and Holland jointly and severally in the sum of $37,400.00. To the findings and conclusions of the court and to the judgment entered thereon Hudson assigns error under three categories:\n1. That the evidence does not support the findings of fact or conclusions of law of the trial court nor the amount awarded as damages;\n2. That the court erred in ruling out the defenses of accord and satisfaction and ratification;\n3. That the court erred in failing to grant a new trial on the ground of newly discovered evidence.\n\n1. ON THE QUESTION OF THE SUFFICIENCY OF THE EVIDENCE.\nUnder this point Hudson has grouped his contentions that there was no showing that he breached his fiduciary obligation to American Founders, and that even if the court should hold against him on that issue, the amount of damages is excessive and unsupported by the record. We deal with these points in that order.\nThe duties and obligations of executive officers and directors of corporations under Colorado law are stated in Kullgren v. Navy, etc. Co., 110 Colo. 454, 135 P.2d 1007:\n\"The relation which directors bear to the stockholders of a corporation, and the corporation itself, as `universally conceded * * * is a fiduciary one;' and `The law governing the obligations of fiduciaries is applicable to them.' Mackey v. Burns, 16 Colo. App. 6, 64 P. 485. `A director of a corporation is in the position of a fiduciary; that is a principle deeply rooted in our law. He owes loyalty and allegiance to his corporation, a loyalty that is undivided and an allegiance that is influenced in action by no consideration other than the welfare of his corporation. He is held \"in official action, to the extreme measure of candor, unselfishness and good faith. Those principles are rigid, essential and salutary.\"' Turner v. American Metal Co., Sup., 36 N.Y.S.2d 356, 369. `The directors of a corporation act in a strictly fiduciary capacity. Their office is one of trust and they are held to the high standard of duty required of trustees. * * *'\"\nTo the same effect see Sprague v. Stratton-Massachusetts Gold Mines Co., 53 Colo. 315, 125 P. 490. Also see 13 Am.Jur., Corp. 939, \u00a7 985.\nThat Hudson was so bound is admitted and was fully established by the evidence. We, therefore, look to whether he violated the duties and obligations of such relationship.\nThe evidence is that Hudson procured or caused the issuance of the stock certificates to Clarence W. Button, Alice Loveland, and Charlotte M. Brown, and signed the certificates. When he signed the five stock certificates he knew they were being issued in exchange for Texas Adams stock as the only consideration and as \"payment in full\" for stock of plaintiff corporation.\nButton testified that his discussions regarding the issuance of the stock of plaintiff corporation in exchange for Texas Adams stock were solely with Hudson, and that he delivered the Texas Adams stock certificates to Hudson.\nHudson admitted full responsibility for the Texas Adams transaction. The minutes of the shareholders meeting of March 12, 1957, contained the following statement by Hudson: \"Mr. Hudson replied that this was not a cash transaction but rather an exchange of stock in The American Founders Life Insurance Company of Denver, *394 Colorado, for the stock in the Texas Adams Oil Company. At this point Mr. Hudson advised that as President of the company, he was assuming the responsibility for the investment and further stated that the President of many companies should not attempt to avoid responsibilities for those things which might occur and that he was not going to attempt to pass any blame onto any one else for anything which occurred in the company, * * *.\" (Emphasis ours)\nIssuance of The American Founders stock to Button, Loveland and Brown involved a breach of the so-called \"underwriting agreement\" between plaintiff corporation and Colorado Management Corporation. Under that agreement Colorado Management Corporation was the sole and exclusive agent of plaintiff for the sale to the public of one million shares of stock in plaintiff corporation. The contract provided that the stock was to be sold at \"$2.00 per share to the public;\" and that the underwriter agreed \"to remit to the Company the sum of $1.60 per share on any share sold by it hereunder, the same being the sales price of $2.00 per share, less the commission of forty cents per share or 20% of the sale price of the stock to the public at $2.00 per share, and the Company agrees to issue such shares upon receipt of payment therefor as directed by the underwriter.\" (Emphasis ours) The so-called \"underwriting\" agreement therefore provided that the shares of the plaintiff corporation should not be issued until \"payment therefor\" was received in cash at $1.60 per share. The prospectus of plaintiff corporation filed with the Colorado Securities Commission on October 20, 1955 stated that none of its securities would be used directly or indirectly to purchase any property, real or personal, tangible or intangible.\nOther facts supporting the court's finding that Hudson violated his fiduciary obligations and duties to the plaintiff corporation were that Hudson did not consult with or discuss the Button transaction at any regular or special board meeting at which there was a quorum prior to the date of the transaction. The record on this point is that at an informal meeting in the offices of the Colorado Management Corporation on February 9, 1956, Hudson discussed the transaction with Forrest Roan and J. R. Holt, both officials of Colorado Management Corporation. Franklin Stewart and Robert E. Holland, interlocking directors of the plaintiff corporation and also of Colorado Management Corporation, were present at this meeting. After discussing the proposed exchange of Founders stock for Texas Adams stock, Hudson asked if those present would favor a waiver of the provisions of the subscription agreement and underwriting agreement, which, in effect, limited sales to the public to 5,000 shares to any individual stockholder. Those present, including Holland, indicated that they would favor such waiver in the Button transaction. However, Holland stated that he was opposed to the transaction unless and until a market was obtained for the Texas Adams stock and said stock was sold and converted into cash before issuance of the stock in plaintiff corporation to Button. E. V. Holland, another director of both plaintiff corporation and Colorado Management Corporation, was consulted by telephone. He expressed his willingness to waive the 5,000 share limitation, but also objected to the transaction unless and until a market for the Texas Adams stock was established and the said stock was converted into cash before issuance of stock in the plaintiff corporation. This meeting was not a special or regular meeting of the board of plaintiff corporation, but was rather an informal discussion among the Colorado Management officials.\nAfter this meeting, Hudson completed the Button transaction. The Loveland-Brown transaction was never discussed with the directors of plaintiff corporation. Although there were at least nine regular or special meetings of the board of plaintiff corporation prior to January 17, 1957, Hudson did not disclose to all directors that either of the questioned transactions *395 had been completed, nor request formal approval thereof. The first time Hudson discussed the Texas Adams stock with the board of directors and requested formal action was at a special meeting of said board held pursuant to notice on January 17, 1957, when after discussion the board adopted a resolution directing that the Texas Adams Oil Company stock held by the corporation be sold immediately \"at present market\". Thus there is sufficient competent evidence to establish that Hudson personally caused the issuance of stock certificates for 24,000 shares of stock of plaintiff corporation, not only without authority from the board of directors but without any information being imparted to the board of directors until eleven months after the Texas Adams transactions had been completed. Suffice it to say that such evidence is sufficient to establish violation of the duties and obligations of the presidency which also carried with it management of the company.\nAs to the evidence being sufficient in law and in fact to support the amount of the judgment in the sum of $37,400.00, a good statement of the rule on the measure of damages in an action against a fiduciary is set forth in American Law Institute, Restatement of the Law (2d) Trusts, \u00a7 205, p. 458, as follows:\n\"Liability in Case of Breach of Trust.\n\"If the trustee commits a breach of trust, he is chargeable with\n\"(a) any loss or depreciation in value of the trust estate resulting from the breach of trust; or\n\"(b) any profit made by him through the breach of trust; or\n\"(c) any profit which would have accrued to the trust estate if there had been no breach of trust.\"\n\n* * * * * *\n\"If as a result of his breach of trust property depreciates in value, the trustee is chargeable with the amount of such depreciation.\"\nSee also: Hutchings v. Louisville Trust Company, 303 Ky. 147, 197 S.W.2d 83; 54 Am.Jur., Trusts, \u00a7 377, p. 296\nThe trial court determined the amount of damages by computing the value of 24,000 shares of plaintiff's stock at $1.60 per share (the amount in cash which should have been received) or $38,400.00 less $1,000.00 received from Colorado Management Corporation from the sale of the Texas Adams stock, a total sum of $37,400.00.\nAgainst that simple mathematical computation by the court, Hudson claims off-set in the amount of $47,000.00 \u0097 claimed value of the Texas Adams stock. Testimony to support this claim was offered to the effect that there was an over the counter bid figure of eighty cents per share for the Texas Adams Oil Company stock in February and March, 1956. But other evidence showed this not to be the true value because the market for said stock was \"extremely thin\" and could not absorb a large block of shares without a drastic drop in the price. On this a witness said, \"Like a lot of similar stocks you could buy all you wanted but couldn't sell it.\" In October, 1956, the record reveals the bid price for Texas Adams stock was down to two cents per share. Another witness testified that even by persistent effort he was unable to establish any market for the Texas Adams shares in October, 1956. In December, 1956, upon advice of the auditor of plaintiff corporation, the Texas Adams Oil Company shares were written off as worthless. On February 25, 1957, Texas Adams Oil Company, Inc. was adjudged bankrupt. Early in 1957, following the resolution of the board of directors on January 17, 1957, to sell the Texas Adams stock \"at the present market\" the 58,750 shares of Texas Adams Oil Company stock were sold to Colorado Management Corporation for $1,000.00, although the shares were never delivered nor was delivery requested.\nHudson further contends that to repay American Founders he and two other directors *396 plus Roan \"each contributed to plaintiff 2,000 shares of their option stock.\" There is no question but that 2,000 shares were transferred from the record holdings of each of the above mentioned persons in May, 1957. However, Hudson and all other contributors of the donated stock had obtained their shares by signing notes secured by this same stock. The notes were never paid and at the time said stock was \"donated\" to plaintiff corporation the notes given in payment therefor were cancelled. The entire transaction was a \"wash-out\" and could not and did not mitigate the damage to American Founders.\n\n2. THE QUESTION OF ACCORD AND SATISFACTION.\nOn the defense of accord and satisfaction based on the same \"donation\" of 8,000 shares of American Founders stock, the evidence does not support this contention. Elements necessary to establish accord and satisfaction may be found in Western Air Lines, Inc. v. Hollenbeck, 124 Colo. 130, 235 P.2d 792, quoting from Pitts v. National Independent Fisheries Co., 71 Colo. 316, 206 P. 571, 34 A.L.R. 1033, as follows:\n\"In order to constitute an accord and satisfaction, it is necessary that the money should be offered in full satisfaction of the demand, and be accompanied by such acts and declarations as amount to a condition that the money, if accepted, is accepted in satisfaction; and it must be such that the party to whom it is offered is bound to understand therefrom that, if he takes it, he takes it subject to such conditions.\"\nSee also: 1 Am.Jur. 222, Accord and Satisfaction, \u00a7 21; 1 C.J.S. Accord and Satisfaction, \u00a7 33, p. 522.\nThe minutes of plaintiff corporation indicate that at a special meeting of the board of directors, held on November 4, 1957, E. V. Holland, as apparent spokesman for the so-called donors, stated that, \"four of the directors had donated 2,000 shares each of their stock to recoup the losses incurred in this transaction and that they had no legal duty to do so. However, they felt that this would be the proper thing to do due to the loss incurred.\" The only action noted upon the minutes of such meeting was a withdrawal of the Texas Adams Oil Company item from further discussion. At the meeting no formal resolution was presented or adopted indicating that the donated shares were accepted as accord and satisfaction of the loss sustained by the corporation in the Texas Adams transactions. The minutes stand uncontradicted.\nAnother affirmative defense argued is that American Founders through its board ratified and confirmed the so-called Texas Adams transaction at the annual meetings held March 13, 1956, March 12, 1957, and March 11, 1958. The record does not support this contention.\nAt the first annual meeting of the stockholders on March 13, 1956, a so-called \"balance sheet\" as of March 10, 1956, was distributed to the stockholders in attendance. In the assets set forth therein is an item \"Stock owned $47,600.00.\" The record indicates that there was some testimony to the effect that the stock owned item was discussed and explained, at least to the extent that the stock owned was Texas Adams Oil Company stock. Several witnesses testified that the stock owned item was not discussed in any particularity at all. Other witnesses testified that they did not recall any mention of Texas Adams stock at said meeting. Prior to such discussion, either of stock owned, or of the Texas Adams Oil Company stock, as may have occurred at such meeting, the stockholders voted favorably on a motion to approve all lawful acts and deeds of the officers of plaintiff corporation. The minutes of the annual meeting of March 12, 1957, indicate that the stockholders again approved all lawful acts and deeds of the officers of said corporation. Significantly this action by the stockholders was again taken prior to discussion of the Texas Adams stock transaction. These minutes indicate *397 that in response to a question by one of the stockholders concerning the investment of company funds in Texas Adams Oil Company, Mr. Hudson replied, \"This is not a cash transaction but rather an exchange of stock in The American Founders Life Insurance Company of Denver, Colorado, for stock in the Texas Adams Oil Company.\" Hudson also stated that \"As President of the Company he was assuming the responsibility for the investment. * * *\" The minutes indicate that after Hudson's statement concerning the Texas Adams transactions there was a considerable discussion from the floor concerning said transaction. The minutes do not indicate any discussion of the specific or exact details of the transaction or that all of the material facts concerning said transaction were presented or explained to the stockholders. The call for the meeting did not indicate that any formal action was to be taken concerning the Texas Adams transaction. Said notice indicated that the meeting was called for the purpose of \"electing directors and for the transaction of any other business that may properly come before the meeting.\" The minute book of plaintiff corporation does not contain any minutes of the annual stockholders meeting of March 11, 1958.\nIn a recent decision this court held that the stockholders' approval of all lawful actions of corporation officers and directors for the preceding year in the same or similar manner as indicated by the foregoing evidence does not constitute or establish ratification by the stockholders of acts or transactions which the law regards as unlawful or invalid. In Colorado Management Corporation v. The American Founders Life Insurance Company, 145 Colo. 413, 359 P.2d 665, is the following comment on this exact point:\n\"The approval of minutes of a preceding meeting is nothing more than an acknowledgment that the secretary has properly recorded the acts of the board and is not a legalization of invalid acts recorded therein. See In re Chelsea Exchange Corporation, 18 Del.Ch. 287, 159 A. 432 and Belle Isle Corporation v. Mac Bean, 29 Del.Ch. 261, 49 A.2d 5. And this same line of reasoning tends to refute the contention that the corporation ratified the contracts when the stockholders in their meetings of 1956 and 1957 approved all lawful acts of the board for the preceding year. Additionally, ratification can never exist unless it is clearly shown that the party charged with ratification has full knowledge of all material facts, and thereafter knowingly accepts and approves the contract. * * *\"\n\n3. THE QUESTION OF NEWLY DISCOVERED EVIDENCE.\nHudson argues that his motion for a new trial on the ground of newly discovered evidence should have been granted. In the affidavit filed in support of his motion Hudson stated that he had discovered evidence that would establish acceptance of the 8,000 shares of stock donated by four officers and directors in full accord and satisfaction of any claim arising out of the Texas Adams Oil Company stock transaction. In support of this claim the affidavit stated that such evidence consisted of entries on a bookkeeping sheet entitled \"American Founders Life Insurance Co. Adjusting Journal Entries 4/30/57\" which allegedly was produced by the chief accountant of plaintiff corporation in the trial of another case. No copy of this allegedly important document was attached to the motion for new trial nor to the affidavit. Plaintiff corporation filed a counter affidavit which, as an exhibit, set forth a copy of the alleged bookkeeping sheet referred to in Hudson's affidavit and alleged that such entries were merely corroborative of the testimony and evidence produced at the trial of the cause, and did not establish nor in any way tend to establish the alleged defense of accord and satisfaction. A review of the document itself as set forth in the second supplemental record merely discloses adjusting journal entries \"to record relinquishment of stock options.\" Said *398 document obviously has no relevancy to any acceptance of the so-called \"donation\" of 8,000 shares in full satisfaction of any claim against Hudson or the other donors. It is merely corroborative and cumulative of the fact that there was a paper transaction of record by which 8,000 shares of unpaid-for stock was transferred to plaintiff corporation and a proper proportionate amount of the donors' notes were cancelled.\nIn Howard v. International Trust Company, 139 Colo. 314, at page 324, 338 P.2d 689, at page 694 of the official report, this court said:\n\"* * * The granting or denial of a motion for a new trial on the ground of newly discovered evidence rests largely in the sound discretion of the trial court, and in the absence of an abuse of that discretion will not be disturbed. * * *\"\nTo the same effect see Buchanan v. Burgess, 99 Colo. 307, 62 P.2d 465; Andrews v. Costilla Ditch Company, 114 Colo. 317, 165 P.2d 188; Barsch v. Hammond, 110 Colo. 441, 135 P.2d 519.\nWe also have held that a trial court should deny a motion for new trial on the ground of newly discovered evidence when such alleged evidence would be only cumulative and would not change the result. Andrews v. Costilla Ditch Company, supra; Schlessman v. Brainard, 104 Colo. 514, 92 P.2d 749; Colorado Springs and Interurban Railway Company v. Fogelsong, 42 Colo. 341, 94 P. 356.\nOne other point on which we briefly comment is the assertion that the record before this court is uncertain and inadequate. This was asserted to be the result of the death of the reporter and because of the difficulties of transcription encountered by those who sought to decipher his notes. We are cited no authority, and we know of none supporting the assertion that a plaintiff in error is entitled to reversal and a new trial on the ground that the record in the case is \"uncertain\".\nThe record indicates that the trial court, after lengthy and prolonged hearings and objections filed by Hudson and by plaintiff corporation, executed its written order providing for certain changes in the reporter's transcript, and thereafter ordered that the transcript as corrected be allowed, approved, settled, signed and sealed as the reporter's transcript in the action. Under rule 112(f) R.C.P., which provides that the transcript be certified by the judge, such certification to the transcript of the proceedings is final, particularly where the objectors during the hearing on their objections produced no evidence or sworn testimony contradicting any portion of the transcript as finally certified and approved by the trial judge.\nThe law regarding the effect of the certification of the transcript by a trial judge is adequately set forth in Gildehaus v. Jones, 356 Mo. 8, 200 S.W.2d 523, wherein the Supreme Court of Missouri said:\n\"We hold the transcript of the record as originally prepared by the reporter which is authenticated by a certificate signed by the trial judge, and transmitted to this court under the seal of the clerk of the trial court, is to be considered true and quite as if the parties had agreed to it. * * * The trial judge's authentication of the full transcript of the record, like a trial judge's settlement of the former bill of exceptions, which settlement was tantamount to the approval of the bill, should be considered the act of the trial judge as a judge and in the exercise of a judicial power, his action to be dependent on his memory and existing aids. In the authentication of the full transcript, the trial judge acts under the solemnity of his official oath, and we will presume he has faithfully and honestly performed his duty.\"\nTo the same effect see Madison v. Montgomery, 206 Ga. 199, 56 S.E.2d 292; New Bay Shore Corporation v. Lewis, 193 Va. 400, 69 S.E.2d 320.\n*399 We have carefully considered other contentions and arguments advanced and find them without merit. The judgment is affirmed.\nMOORE and FRANTZ, JJ., concur.\n"} -{"text": "\n\n\n\n\n\n\n\n\n\n\n\n\n\u00a0\n\u00a0\n\u00a0\n\u00a0\n\u00a0\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 NUMBER 13-01-466-CR\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 COURT OF APPEALS\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 THIRTEENTH DISTRICT OF TEXAS\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 CORPUS CHRISTI\n\u00a0\n\u00a0\n\nROBERT ADRIAN HINOJOSA,\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Appellant,\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 v.\n\u00a0\nTHE\nSTATE OF TEXAS,\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Appellee.\n\u00a0\n\u00a0\n\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 On appeal from the 103rd District Court\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 of Cameron\nCounty, Texas.\n\u00a0\n\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 O P I N I O N\n\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Before Justices Dorsey, Hinojosa, and\nCastillo\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Opinion\nby Justice Castillo\n\n\n\n\nThis is an appeal\nof the revocation of appellant Robert Adrian Hinojosa=s deferred\nadjudication community supervision.\u00a0\nHinojosa pled guilty, without a plea bargain, to the offense of burglary\nof a habitation[1]\nand was placed on five years deferred adjudication in March of 1996.\u00a0\u00a0 A motion to revoke probation and adjudicate\nguilt was later filed and, at the hearing on the motion, the trial court\nadjudicated Hinojosa=s guilt and\nsentenced him to three years confinement in the penitentiary.[2]\u00a0 In his first issue, Hinojosa complains that\nhe did not enter a plea of true to the motion to adjudicate and the trial court\nerred in not entering a plea of Anot true@ on his\nbehalf.\u00a0 In his second, third, and fourth\nissues, Hinojosa argues that without a plea of true on the part of appellant,\nthe evidence was legally and factually insufficient to support the trial court=s decision to\nadjudicate.\u00a0 In his fifth and final issue\non appeal, Hinojosa asserts that the trial court abused its discretion in\nsetting aside the deferred adjudication order and finding him guilty because:\na)@[a]ppellant=s plea amounted\nto no evidence@; b) the\ndecision of the trial court was Aagainst the\ngreat weight of the countervailing evidence@; c) revocation of probation and\nimprisonment for failure to pay restitution and a fine violate due process\nabsent a finding of either willful refusal or that alternative forms of\npunishment are not adequate as required by Bearden v. Georgia, 461 U.S.\n660 (1983); and d) the trial court failed to make an inquiry as to the\ndefendant=s ability to\npay before revoking probation.\u00a0 We\naffirm.\nAnalysis\n\n\n\n\nAs this case arises\nout of a trial court=s decision to\nadjudicate guilt following the placing of appellant on deferred adjudication,\nthe first question that confronts this court is the one of our own jurisdiction\nto review the claims before us.\u00a0 See Tex. Code Crim. Proc. Ann. art. 42.12, '5b (Vernon Supp.\n2002).[3]\n\nAppellant=s complaints as to the\nsufficiency of the evidence, raised in his enumerated issues number two, three,\nand four, are clearly attacks on the trial court=s decision to adjudicate and thus are statutorily\nbarred from appellate review.\u00a0 Tex. Code\u00a0\nCrim. Proc. Ann. art.\n42.12,'5b (Vernon Supp.\n2002).\u00a0 A trial court=s decision to proceed\nwith an adjudication of guilt is one of absolute discretion and is not reviewable. Williams v. State, 592 S.W.2d 931,\n932-33 (Tex. Crim. App. 1979) (holding that an\nappellant cannot argue on appeal that the evidence adduced at the revocation\nhearing was insufficient to prove the allegations in the State's motion to adjudicate).\u00a0 It is well settled that no appeal may be\ntaken of a trial court=s determination to\nadjudicate guilt.\u00a0 Tex. Code Crim. Proc. Ann. art. 42.12, '5(b)(Vernon Supp.\n2002); \u00a0Phynes\nv. State, 828 S.W.2d 1, 2 (Tex. Crim. App.\n1992).\u00a0 We thus have no jurisdiction to\nconsider appellant=s issues two, three\nand four. \n\n\n\n\nSimilarly, appellant=s assertion in his\nfirst issue that he never entered a plea of true and the trial court improperly\nentered a plea of true on his behalf, goes to the question of error in the\nadjudication hearing process and is likewise not reviewable.\n\u00a0Connolly v. State, 983 S.W.2d 738, 741\n(Tex. Crim. App. 1999)(holding that an appellant\nwhose deferred adjudication has been revoked and who has been adjudicated\nguilty Amay not raise\non appeal contentions of error in the adjudication of guilt process,@ not just in\nthe decision to adjudicate)(emphasis added).[4]\u00a0 We therefore likewise have no jurisdiction to\nconsider appellant=s first issue.\nAppellant=s final issue claims\nthat the trial court abused its discretion in revoking his deferred\nadjudication probation and sentencing him to the penitentiary.\u00a0 He subdivides his issue into four complaints.\u00a0 The first two complaints, subissues\nAA@ and AB,@ that the trial court\nabused its discretion because appellant=s Aplea amounted to no\nevidence@ and even if it was\nevidence, the decision was Aagainst the great\nweight of the countervailing evidence,@ mirror his first two\nissues on appeal and are attempts to contest the trial court=s decision to proceed\nwith the adjudication of guilt.\u00a0 As noted\npreviously, we are without jurisdiction to consider such contentions.\u00a0 See Tex.\nCode Crim. Proc. Ann. art. 42.12, '5b (Vernon Supp.\n2002).\u00a0 Appellant=s sub-issue AD,@ complaining of the\ntrial court=s action in revoking\nappellant=s deferred\nadjudication without inquiring as to his ability to pay, is an attack on the\ntrial court=s decision to\nadjudicate and the process of adjudication and hence likewise not reviewable on appeal. \u00a0Id.;\u00a0\nConnolly, 983 S.W.2d at 741.\u00a0 \n\n\n\n\nAppellant=s third sub-issue,\ndesignated as AC,@ challenges both the\ntrial court=s decision to revoke\nthe deferred adjudication and the trial court=s decision to enter a sentence of imprisonment,\nclaiming that the same were violations of due process.\u00a0 While the challenge to the trial court=s decision to\nadjudicate is unreviewable under the bar of article\n42.12, '5b, we may consider\nthe challenge to the trial court=s actions after a\nfinding of guilt. \u00a0Tex. Code Crim. Proc. Ann. art. 42.12, '5b (Vernon Supp.\n2002)(A[a]fter\nan adjudication of guilt, all proceedings, including assessment of punishment,\npronouncement of sentence, granting of community supervision, and defendant=s appeal continue as\nif the adjudication of guilt had not been deferred.@);\u00a0 Issa v. State,\n826 S.W.2d 159, 161(Tex. Crim. App. 1992)(holding a\ndefendant does have a limited right to challenge errors made following a\ndetermination to adjudicate). \n\n\n\n\nAppellant intermingles\nhis arguments as to the trial court=s error in\nadjudicating\u00a0 his guilt (which we may not\nreview) and the trial court=s decision to imprison\nhim (which we may review), under the general argument that the trial court\nerred in Arevoking Appellant=s community\nsupervision, adjudicating him guilty, and sentencing him to the penitentiary.@ \u00a0Appellant argues that Bearden\nrequires the trial court to make two findings, the first being a finding of\nwillful refusal to pay, prior to revoking probation.[5]\u00a0 However, such a finding would clearly go to\nthe question of a trial court=s decision to adjudicate\nas the question of willful refusal to pay simply parallels the existing\nrequirement in Texas that the State must prove that Aan alleged failure to\npay fees, costs, and the like was intentional@ in order to support a finding of Atrue@ in a motion to\nrevoke.\u00a0 Stanfield v. State, 718\nS.W.2d 734, 738 (Tex. Crim. App. 1986).\u00a0 Since we may not review the trial court=s decision to\nadjudicate or the process by which it chose to do so, we cannot consider\nappellant=s claim that the trial\ncourt erred in Arevoking@ his deferred\nadjudication without making a finding as to his willful refusal to pay.\u00a0 Tex.\nCode Crim. Proc. Ann. art.\n42.12, '5(b)(Vernon Supp.\n2002); \u00a0Connolly, 983 S.W.2d at\n741; Phynes, 828 S.W.2d at 2.\n\n\n\n\n\u00a0The second Bearden requirement that\nappellant asserts was violated is the determination by the trial court that\nalternative forms of punishment were not available.\u00a0 Bearden, 461 U.S. at 672.\u00a0 This complaint apparently is aimed at the\ntrial court=s actions at the\nsentencing portion of the hearing and hence is not barred from appellate review\nby article 42.12, '5b as discussed\npreviously.\u00a0 We note, however,\u00a0 that appellant made no complaint to the trial\ncourt of its alleged failure and that even constitutional claims may be waived\nby a failure to object at trial.\u00a0 Briggs\nv. State,\u00a0 789 S.W.2d 918, 924 (Tex. Crim. App. 1990).\u00a0\nHowever, even if we review such claim in the interest of justice, the\nrequirement to consider other means of punishment only arises when a\nprobationer has made bona fide efforts to pay and has been unable to do so. \u00a0Corpus v. State, 26 S.W.3d 660, 662 (Tex.\nApp.BCorpus Christi 2000,\nno pet.).\u00a0 The trial court in the present\ncase made no such finding and the appellant below made no such argument.\u00a0 Appellant argued at the hearing that he had\nbeen dealing with his drug problems but did not say that he had not been able\nto pay nor that he had made good faith attempts to do so.\u00a0 Indeed, his testimony supported the\nState=s argument that, over\nmost of the five years of his deferred adjudication, appellant had been using\ndrugs and thus had impliedly chosen to spend his money on drugs rather than his\ncourt-ordered fines and restitution. \u00a0\u00a0We find that the trial court in the present\ncase was not required to make any specific findings that other alternatives to\nimprisonment were not adequate.[6]\u00a0 We overrule this issue.\nConclusion\nHaving found that all\nbut one of appellant=s claims are barred\nfrom appellate review, and having overruled appellant=s sole reviewable claim, we affirm the conviction and sentence of\nthe trial court. \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \nERRLINDA CASTILLO\nJustice\nDo not publish.\nTex. R. App. P. 47.3(b).\n\u00a0\nOpinion delivered and filed\nthis 13th day of June,\n2002.\n\n\n\n\n1Tex. Pen. Code Ann. '30.02(a)(1)(Vernon Supp. 2002).\n\n\n2 The\nState alleged that Hinojosa was in violation of the conditions of his community\nsupervision due to arrearages as follows: $300 in probation fees; $9,130 in\nrestitution; and $123 in the PSI fee. \n\n\n3\nWe invited both parties to submit additional briefs on this issue.\u00a0 None have been filed.\n\n\n4\nWe note that during the proceedings, neither appellant nor his attorney objected\nto any part of the proceedings, including the alleged failure of appellant to\nenter a plea.\n\n\n[5]\nSpecifically, the Supreme Court stated:\n\u00a0\nWe\nhold, therefore, that in revocation proceedings for failure to pay a fine or\nrestitution, a sentencing court must inquire into the reasons for the failure\nto pay.\u00a0 If the probationer willfully\nrefused to pay or failed to make sufficient bona fide efforts legally to\nacquire the resources to pay, the court may revoke probation and sentence the\ndefendant to imprisonment within the authorized range of its sentencing\nauthority.\u00a0 If the probationer could not\npay despite sufficient bona fide efforts to acquire the resources to do so, the\ncourt must consider alternative measures of punishment other than\nimprisonment.\u00a0 Only if alternative\nmeasures are not adequate to meet the State=s\ninterests in punishment and deterrence may the court imprison a probationer who\nhas made sufficient bona fide efforts to pay.\u00a0\nTo do otherwise would deprive the probationer of his conditional freedom\nsimply because, through no fault of his own, he cannot pay the fine. Such a\ndeprivation would be contrary to the fundamental fairness required by the\nFourteenth Amendment.\n\u00a0\nBearden v. Georgia, 461\nU.S. 660, 672-73 (1983).\n\n\n6 We\nnote, however, that the trial court had considered, and utilized, other\nalternatives to incarceration in prior dealings with appellant on this\ncase.\u00a0 The record reflects that the trial\ncourt had previously modified appellant=s\nprobation on two prior occasions to send him to drug treatment and boot\ncamp.\u00a0 However, according to the State=s\ncomments at the revocation hearing, which were not contested by appellant,\nappellant was still testing positive for cocaine and marijuana use as little as\na week before the revocation hearing.\n\n\n"} -{"text": "\n210 F.Supp.2d 1062 (2002)\nEXTERIOR SYSTEMS, INC. d/b/a Fabwel, Inc., Plaintiff,\nv.\nNOBLE COMPOSITES, INC., Larry Farver, Kenneth Farver, and Edward Welter, Defendants.\nNo. 3:01-CV-217 RM.\nUnited States District Court, N.D. Indiana, South Bend Division.\nJune 24, 2002.\n*1063 *1064 Paul J Peralta, D Lucetta Pope, Eric J Groen, Alison G Fox, Andrea G Hoffman, Baker and Daniels, South Bend, IN, for Exterior Systems Inc, a Wholly-Owned Subsidiary of Fibreboard, Inc, a Wholly-Owned Subsidiary of Owens Corning dba Fabwell Inc, plaintiff.\nJohn D Ulmer, Yoder Ainlay Ulmer and Buckingham, Goshen, IN, for Noble Composites Inc, Larry E Farver, Kenneth Farver, defendants.\nGary D Boyn, Cynthia S Gillard, Michelle C Hilary, Warrick and Boyn, Elkhart, IN, Edward L Murphy, Jr, Stephen J Harants, Miller Carson Boxberger and Murphy, Fort Wayne, IN, for Edward Welter, defendant.\n\nMEMORANDUM AND ORDER\nNUECHTERLEIN, United States Magistrate Judge.\nOn March 28, 2002, five months after his previous counsel was disqualified for violating conflict of interest rules, Defendant Edward Welter's new counsel filed a Motion to Disqualify the opponent's counsel [Doc. No. 179]. The instant motion lacks merit and is DENIED.[1]\n\nI. FACTUAL BACKGROUND\nOn December 4, 2001, this Court disqualified Welter's previous counsel, Cynthia Gillard and her firm Warrick & Boyn. Exterior Systems, Inc. v. Noble Composites, Inc., 175 F.Supp.2d 1112 (N.D.Ind. 2001). The Court assumes the reader's familiarity with the specific facts of that opinion and only restates the facts generally in this opinion.\nDefendant Welter formed Fabwel, Inc. (\"Fabwel\") in 1972, and he owned and controlled Fabwel, for the most part, until 1997. During that time, the lawyers of Warrick, Weaver & Boyn (or later Warrick & Boyn) served as counsel to Welter and to Fabwel. In 1997, Welter sold Fabwel, and its successor is Plaintiff Exterior Systems, Inc. (\"ESI\"). ESI is now suing Welter and others for breach of covenants not to compete and related claims. ESI claims that Welter is investing in or assisting a contractually-prohibited, competing business (Noble Composites, Inc.) through his company E.W. Marine. Welter counterclaimed, alleging, among other things, that ESI failed to make payments to Welter under the provisions of a 1990 Executive Benefit Plan and its 1997 amendment.\nWelter seeks to disqualify the law firm of Baker & Daniels from representing ESI because current Baker & Daniels attorneys Kennard Weaver and Angela Castille, and paralegal Beckie Mills, during their prior association with the law firm of Warrick, Weaver & Boyn (\"WW & B\") had *1065 represented Welter and other entities. Welter also bases his motion to disqualify on representations by other WW & B attorneys before October 1993, when Weaver, Castille, and Mills left that firm to join Baker & Daniels. Last, Welter argues for disqualification based on Weaver's recent representations of Pleasant Street Homes, LLC. ESI responds by claiming that no conflict exists and by arguing that Welter waited too long to file his motion to disqualify and thus has waived any objection to ESI's choice of counsel.\n\nA. Representations of Welter by Attorneys Weaver and Castille and Paralegal Mills\nThis section will analyze and reconstruct the representation of Welter by attorneys Weaver and Castille and paralegal Mills directly. Representation of Welter performed by others in the same firm as Weaver, Castille, and Mills will be analyzed in Section I.B below. Weaver's recent representation of Pleasant Street Homes, LLC will be discussed in Section I.C below. The facts relating to the waiver issue will be discussed in Section I.D below.\n\n1. Weaver's Representation of Welter\nAs a partner in WW & B, Weaver provided extensive legal services to Welter and the company formerly known as Fabwel, Inc. until September 1985. Weaver performed some of the work to form Fabwel in 1972, and provided legal advice to Fabwel after its formation. In particular, Weaver helped Fabwel acquire other companies. Those transactions often involved the drafting of covenants not to compete on behalf of Fabwel. Weaver also provided legal counsel to Welter and his family on numerous business and personal matters unrelated to Fabwel, including Welter's estate planning.\nIn September 1985, Weaver's representation of Welter, Fabwel, and all other Welter-related companies ended at Welter's request. Welter had Gillard represent him and Fabwel from 1985 on. Gillard removed all of Welter's and Fabwel's files from Weaver's office and kept them in her own office. Gillard was Welter's sole contact at the firm. Weaver received no correspondence or copies of correspondence from Welter or his companies after 1985. Weaver had no further contact with Welter except for a few rare and brief social encounters.\nWeaver never represented E.W. Marine because Welter did not form it until 1988. Weaver was involved in the planning of various assets that were later obtained by E.W. Marine when that company came into existence. At least one of those assets, a Waco, Texas, plant is currently owned by E.W. Marine and leased to ESI. Weaver represented Welter in obtaining revenue bond financing for the Waco facility in 1983. Weaver also helped Welter form a partnership called Jewel Real Estate in 1975 and D & E Industries, Inc. These entities were precursors to E.W. Marine, Inc.\nWeaver left WW & B in 1993 to join the Elkhart office of Baker & Daniels. Castille and Mills followed him to Baker & Daniels soon after. Warrick, Weaver & Boyn changed its name to Warrick & Boyn. This opinion will continue to use \"WW & B\" to signify the firm before Weaver left in 1993, but it will use \"W & B\" to denote the firm after Weaver left.\nWeaver has not been involved with this case in any capacity. He has not discussed his past representation of Fabwel, Welter, or any of Welter's business interests with other Baker & Daniels lawyers working on the case, except (1) when a new business memorandum was published within the firm, he discussed with Paul Peralta and other partners whether a conflict existed; (2) he described the nature *1066 and extent of his prior representation for the purpose of preparing his affidavit in response to the motion to disqualify, and (3) he was told that the motion to disqualify Gillard had been filed, and the grounds for filing the motion.\n\n2. Castille's Representation of Welter\nCastille graduated from law school in 1988 and joined WW & B as an associate in March 1989. At that time Cynthia Gillard served as counsel for Welter and also served as counsel for the company formerly known as Fabwel, Inc. In 1990, at the beginning of her second year as an associate, Castille assisted Gillard with legal research and related tasks on behalf of Fabwel. To the best of her knowledge, Castille did not draft the 1990 Amendment to the Executive Benefit Plan and did not communicate with Welter regarding it. At most, Castille researched some legal issues relating to the 1990 Amendment under Gillard's direction.\nIn 1992, Castille assisted Gillard in connection with the repurchase of Fabwel stock from ABF Investors, Inc. by a company in which Welter owned a majority interest. She did not advise Welter on his rights and duties under the 1988 non-compete agreement with ABF or any other agreements not to compete. Nor did she advise Welter in 1992 regarding the 1990 Executive Benefit Plan. Castille primarily drafted documents and took no part in the negotiations surrounding the repurchase of Fabwel. Castille also provided legal advice to E.W. Marine in connection with a commercial lease unrelated to the facts of this case.\nIn October 1993, Castille left WW & B, along with Weaver and Mills, to join the Elkhart office of Baker & Daniels. She has not been involved with this case in any capacity. She has not discussed her past representation of Fabwel and Welter with other Baker & Daniels lawyers working on the case, except (1) she described the nature and extent of her prior representation for the purpose of preparing her affidavit in response to the motion to disqualify, and (2) she discussed the nature and extent of her past representation to the attorneys who prepared the original motion to disqualify Gillard.\n\n3. Mills's Representation of Welter\nBeckie Mills is not an attorney. She worked as a paralegal at WW & B until 1993 when she left to join Weaver and Castille at the Baker & Daniels Elkhart office. Mills provided various paralegal services to E.W. Marine, but claims not to have received any confidential information relevant to this case. Mills has not worked on the present matter and has not discussed her previous employment at WW & B with the Baker & Daniels lawyers litigating this case, except for the purposes of preparing her affidavit attached to the motion to disqualify.\n\nB. Representation of Welter by Other Attorneys at Warrick, Weaver & Boyn\nWeaver stopped working for Welter and his companies in 1985, but other attorneys at WW & B represented Welter while Weaver was still a partner of the firm. WW & B, specifically Cynthia Gillard, advised Welter in 1987 when he sold his stock in Fabwel to ABF Investors, Inc. Gillard advised Welter as to his rights and obligations under a Non-Compete Agreement with ABF. In 1988, WW & B (Gillard) advised Fabwel during the acquisition of the stock of Master-Fab Inc. from Defendant Larry Farver. WW & B (Gillard) drafted the Non-Compete Agreement signed by Defendant Larry Farver as part of the closing. This Non-Compete Agreement is part of the basis of ESI's claims against Larry Farver in this case. *1067 Also in 1988, WW & B (Gillard) incorporated E.W. Leasing, which is now known as E.W. Marine. Mills provided unrelated paralegal services to E.W. Marine sometime after 1988. W & B (through Gillard) continues to provide legal services to E.W. Marine.\nWW & B also drafted the 1990 Executive Benefit Plan. Specifically, Gillard drafted the plan, although Angela Castille researched some legal issues relating to the 1990 Amendment under Gillard's direction. In 1992, WW & B assisted Welter with the repurchase of Fabwel's stock from ABF. Castille assisted Gillard with the transaction.\n\nC. Weaver's Current Representation of Pleasant Street Homes, LLC\nA group of investors, including John Guequierre, Bill Reasor and Jim Jones, started Pleasant Street Homes LLC (\"Pleasant Street\") in December 2000. They hired Weaver and Baker & Daniels to provide legal advice at Pleasant Street's creation. Welter joined the investor group as an outside investor of Pleasant Street. Welter has never been a sole manager, a majority owner, or an officer of the company. Weaver's only contact with Welter was at monthly managers meetings, where the discussions were with the management team of Pleasant Street as a group. Weaver never provided individual legal advice to Welter regarding his investment in Pleasant Street. Weaver and Baker & Daniels represented Pleasant Street until August 2001, and Weaver no longer has any files relating to Pleasant Street.\n\nD. The Timing of Welter's Motion to Disqualify\nOn March 1, 2001, ESI's counsel, Baker & Daniels, sent a letter to Welter demanding that he end all business relations with Noble Composites. Welter's counsel responded on March 13, 2001, asserting, in part, that Baker & Daniels had a conflict of interest because it represented Pleasant Street. ESI filed its complaint on March 15, 2001. On March 16, Welter's counsel sent a letter to Baker & Daniels arguing that Baker & Daniels had a conflict of interest because of the former representation of Weaver, Castille, another lawyer, and two paralegals.\nOn June 25, 2001, Defendant Welter filed his Answer with Counterclaim. ESI filed an answer to the counterclaim on July 31, 2001. On August 21, 2001, ESI filed its Motion to Disqualify Counsel, which was granted on December 4, 2001. Welter's new counsel entered their appearance on February 20, 2002, and filed the present motion to disqualify on March 28, 2002. A preliminary injunction hearing is scheduled for June 25, 2002.\n\nII. LEGAL ANALYSIS\nTwo critical considerations, the sacrosanct privacy of the attorney-client relationship and the prerogative of a party to proceed with counsel of its choice, require a court to proceed with careful and thoughtful analysis when deciding motions to disqualify counsel. Schiessle v. Stephens, 717 F.2d 417, 420 (7th Cir.1983).\nThe Seventh Circuit warns that disqualification \"is a drastic measure which courts should hesitate to impose except when absolutely necessary.\" Cromley v. Board of Educ., 17 F.3d 1059, 1066 (7th Cir.1994) (citing Freeman v. Chicago Musical Instrument Co., 689 F.2d 715, 721 (7th Cir. 1982)). Disqualification motions \"should be viewed with extreme caution for they can be misused as techniques of harassment.\" Freeman, 689 F.2d at 722. Yet, the Seventh Circuit has instructed courts to resolve doubts in favor of disqualification. United States v. Goot, 894 F.2d 231, 235 (7th Cir.1990).\nThe Local Rules of the United States District Court for the Northern District of *1068 Indiana adopt Indiana's version of the Model Rules of Professional Conduct. N.D. Ind. L.R. 83.5(f). Indiana Rule of Professional Conduct 1.9 states as follows:\nA lawyer who has formerly represented a client in a matter shall not thereafter:\n(a) represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client consents after consultation; or\n(b) use information relating to the representation to the disadvantage of the former client except as Rule 1.6 or Rule 3.3 would permit or require with respect to a client or when the information has become generally known.\nApplying the \"substantial relationship test\" in Rule 1.9 is a three-step process:\nFirst, the trial judge must make a factual reconstruction of the scope of the prior legal representation. Second, it must be determined whether it is reasonable to infer that the confidential information allegedly given would have been given to a lawyer representing a client in those matters. Third, it must be determined whether that information is relevant to the issues raised in the litigation pending against the former client.\nLaSalle Nat'l Bank v. County of Lake, 703 F.2d 252, 255-56 (7th Cir.1983). If this analysis shows that a substantial relationship did exist, then the court is entitled to presume that the attorney received confidential information during his or her prior representation. Id.\nRule 1.9 applies when an individual lawyer has represented a client in a prior matter and where the issue is whether that lawyer may oppose the former client in a substantially related matter. Rule 1.10 addresses situations where a conflict of interest may be imputed to other lawyers associated in the same firm with the tainted lawyer. The pertinent portion of Rule 1.10 states as follows:\n(a) While lawyers are associated in a firm, none of them shall represent a client if he knows or should know in the exercise of reasonable care and diligence that any one of them practicing alone would be prohibited from doing so by Rules 1.7, 1.8(c), 1.8(k), 1.9, or 2.2.\n(b) When a lawyer becomes associated with a firm, the firm may not represent a person in the same or a substantially related matter if it knows or reasonably should know that that lawyer, or a firm with which the lawyer was associated, had previously represented a client whose interests are materially adverse to that person and about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(b) that is material to the matter.\nThe Seventh Circuit analyzes whether the remedy of disqualification is warranted under a series of presumptions. As stated earlier, if the substantial relationship test is satisfied, the court is entitled to presume that the attorney received and shared confidences of the former client. This presumption is irrebuttable in situations where an entire firm switched sides, but is rebuttable in situations where particular lawyers change jobs to firms representing an adversary. Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263, 1267 (7th Cir.1983); Chapman v. Chrysler Corp., 54 F.Supp.2d 864, 866 (S.D.Ind. 1999).\nThis case involves particular lawyers who have switched firms; thus, the presumption of shared confidences may be rebutted under the following three-step analysis:\nFirst, we must determine whether a substantial relationship exists between the subject matter of the prior and present representations. If we conclude a *1069 substantial relationship does exist, we must next ascertain whether the presumption of shared confidences with respect to the prior representation has been rebutted. If we conclude this presumption has not been rebutted, we must then determine whether the presumption of shared confidences has been rebutted with respect to the present representation. Failure to rebut this presumption would also make the disqualification proper.\nCromley, 17 F.3d at 1064 (quoting Schiessle, 717 F.2d at 420).\nThe first Cromley test is the substantial relationship test in Rule 1.9(a). The second Cromley test is a restatement of Rule 1.10, which finds no conflict of interest where the lawyer switching firms did not actually learn client confidences. The last of the three Cromley tests \u0097 whether the presumption of shared confidences has been rebutted with respect to the present representation \u0097 involves the question of screening, sometimes referred to as an insulation wall, or in the past as a \"Chinese wall.\" Cromley, 17 F.3d at 1065 (citing Schiessle, 717 F.2d at 421).\nA party can also waive the right to seek disqualification by waiting too long to file its motion to disqualify. E.g., Cox v. American Cast Iron Pipe Co., 847 F.2d 725, 731 (11th Cir.1988); Trust Corp. MT v. Piper Aircraft Corp., 701 F.2d 85, 87 (9th Cir.1983); Central Milk Producers Co-op. v. Sentry Food Stores, 573 F.2d 988, 992 (8th Cir.1978); Redd v. Shell Oil Co., 518 F.2d 311, 315 (10th Cir.1975). In this situation, a violation of the Rules of Professional Conduct occurs, but disqualification is not warranted.\nWith these legal principals in mind, the Court will analyze the alleged conflicts of Weaver, Castille, and Mills separately.\n\nA. Weaver\n\n1. Weaver's Representation of Welter and Fabwel from 1972 to 1985\nWeaver served as Welter's and Fabwel's main counsel as a partner in WW & B from 1972 to 1985. During that representation, Weaver performed extensive legal work ranging from the formation of Fabwel to estate planning for Welter personally. The relationship ended, however, at Welter's request in 1985. Weaver left WW & B in 1993 to join Baker & Daniels.\nThe legal work performed by Weaver on behalf of Welter and Fabwel from 1972 to 1985 is not substantially related to the present case. The only legal work that could arguably be substantially related is Weaver's representation of Fabwel as Fabwel acquired several smaller companies. As part of the closings in those acquisitions, Weaver drafted non-compete contracts protecting Fabwel that were signed by the principals of the acquired companies. None of those contracts are in dispute in the present case, but Welter claims that Weaver provided \"advice on non-compete agreements\" to Fabwel, which at the time was solely owned and controlled by Welter. Thus, Weaver would have \"inside information and knowledge regarding Welter's thought processes concerning non-compete agreements.\" Welter's Mem. of Law in Supp. of Mot. to Disqualify at 12.\nThe comment to Rule 1.9 states that \"a lawyer who recurrently handled a type of problem for a former client is not precluded from later representing another client in a wholly distinct problem of that type even though the subsequent representation involves a position adverse to the prior client.\" The non-compete contracts at issue in this case are wholly distinct from those Weaver drafted on behalf of Fabwel. Thus, although they are the same type of problem, Weaver's work on *1070 Fabwel's non-compete contracts before 1985 is not substantially related to his current firm's prosecution of this case.[2]\nWelter also claims that Weaver's work for the precursors to E.W. Marine or his work planning real estate assets that were later obtained by E.W. Marine is substantially related to the issues in this case. The Court sees no connection. When Weaver represented Welter and the precursor companies, E.W. Marine did not exist. E.W. Marine is not alleged to be the successor to the precursor companies; it obtained only some of the precursors' assets. Weaver was not involved in the decision to form E.W. Marine or in the decision to include certain assets among its holdings.\n\n2. Representation by WW & B Lawyers Other Than Weaver from 1985 to 1993\nNext, Welter points to the work performed on behalf of Welter by Weaver's partners at WW & B from 1985 (when Weaver stopped working for Welter) until 1993 (when Weaver left WW & B to join Baker & Daniels). Welter argues that the work of Weaver's partners should be imputed to Weaver, and then Weaver carried this taint with him to Baker & Daniels where it should be imputed to other Baker & Daniels lawyers.\nThe Rules of Professional Conduct do not support Welter's argument. The comment to Indiana's Rule 1.10 rejects the notion that \"a partner in a law firm is conclusively presumed to have access to all confidences concerning all clients of the firm.\" Rather, Indiana's Rules of professional Conduct embrace a functional approach. \"A rule based on a functional analysis is more appropriate for determining the question of vicarious disqualification.\" Id. As part of this functional approach, Rule 1.10(a) imputes all conflicts of interest to all lawyers in the firm while they are associated with the firm.[3] After a lawyer leaves his firm to join a new firm, however, Rule 1.10(b) governs. Rule 1.10(b) requires law firms to reject representation only where a new lawyer to the firm had represented an adverse client while at his former firm and had acquired actual client confidences. Simply working at a firm at the same time as the past representation is not enough for imputation of a conflict of interest to the lawyer's new firm.\nCromley explained how this rule functions in the Seventh Circuit's shifting presumption approach:\nWe must determine whether the attorney whose change of employment created the disqualification issue was actually privy to any confidential information his prior law firm received from the party now seeking disqualification of his present firm. The rebuttal can be established ... by proof that the attorney in question had no knowledge of the information, confidences and/or secrets related by the client in the prior representation *1071 .... Uncontroverted affidavits are sufficient rebuttal evidence.\n\nCromley, 17 F.3d at 1064-65 (citations and internal quotations omitted; emphasis added). Accord: Edwards v. 360\u00b0 Communications, 189 F.R.D. 433, 436 (D.Nev. 1999) (applying a version of Rule 1.9 and Rule 1.10 under Nevada law that is nearly identical to Indiana's version); (Dieter v. Regents of the University of California, 963 F.Supp. 908, 911-12 (N.D.Cal.1997) applying the Model Rules of Professional Conduct and the Restatement (Third) of the Law Governing Lawyers as being consistent with California law). Thus, no violation of Rule 1.10(b) occurs unless the lawyer who switched firms actually gained confidential information from the former client while working for his former firm.\nUnder this standard, Weaver's imputed conflict does not transfer to his new firm because Weaver was not privy to Welter's confidential information on any matter related to the present dispute. It is true that at least some of the work performed by Weaver's partners (in most cases Gillard) from 1985 to 1993 is substantially related to the present case. Thus, while Weaver still worked at WW & B, any conflict would be imputed to him and he could not take a position adverse to his partners' substantially related work. Rule 1.10(a).\nWeaver's disability ended, though, when he left WW & B in 1993 because he was not privy to Welter's confidences after 1985 (and none of the pre-1985 confidences relate to the present dispute). Weaver has submitted an uncontroverted affidavit stating that his representation of Welter, Fabwel, and Welter-related companies ended at Welter's request in 1985. Weaver Affidavit \u00b6 4. Welter informed Weaver that Cynthia Gillard would be his lawyer and that Welter would communicate directly with Gillard. Id. Gillard removed all of Welter's and Fabwel's files from Weaver's office in 1985 and kept them in her own office. Id. \u00b6 5. Gillard became Welter's sole contact at the firm, and Weaver received no correspondence or copies of them from Welter or Welter-related companies after 1985. Id. Weaver had no further contact with Welter except for a few rare and brief social encounters. Id. Nothing in the record indicates that Weaver assisted Gillard with her representation of Welter. Weaver has successfully rebutted the presumption of shared confidences.\nAfter 1985, Weaver did not receive Welter's confidences. Accordingly, Weaver carried no taint with him to his new firm, Baker & Daniels. His partners' legal work for Welter from 1985 to 1993 does not provide a basis for disqualifying Baker & Daniels in this case.\n\n3. The Duty of Loyalty Does Not Apply to Imputed Lawyers in Other Firms\nWelter argues that an attorney's duty of loyalty requires disqualification in this case. He points to this Court's previous decision disqualifying his former counsel, Gillard. Welter's argument is misplaced because it misinterprets this Court's previous decision and because this motion presents a different factual situation.\nFirst, Welter incorrectly charges this Court with recognizing a \"general duty of loyalty to clients.\" Welter's Reply in Supp. of Mot. to Disqualify at 1 (incompletely quoting this Court's earlier decision, Exterior Systems, 175 F.Supp.2d at 1119). This Court's earlier decision noted that Brennan's, Inc. v. Brennan's Restaurants, Inc., 590 F.2d 168 (5th Cir.1979), had recognized that \"[t]he purpose of the substantial relationship test extended beyond protection of client confidences to a more general duty of loyalty to clients.\" Exterior Systems, 175 F.Supp.2d at 1119 (emphasis added). In other words, the *1072 duty of loyalty is broader, or more general than, the protection of client confidences under the facts of Brennan's and the facts of Gillard's representation of Welter. This Court never held that the duty of loyalty is simply and non-relatively \"general,\" in the sense that it extends to all adverse positions taken by a lawyer against a former client.[4]\nSecond, this Court's previous decision to disqualify Gillard involved a situation where a single lawyer, Gillard, was attacking her own work. The present motion, by contrast, involves disqualification by imputation to other lawyers in other firms. As mentioned earlier, the comments to Indiana's Rules of Professional Conduct take a functional approach. The comments identify two functions served by the conflict of interest rules: preserving confidentiality and avoiding positions adverse to a client \u0097 what this opinion has called \"client loyalty.\" The comment to Rule 1.10 addresses the second of these two functions:\nThe second aspect of loyalty to client is the lawyer's obligation to decline subsequent representations involving positions adverse to a former client arising in substantially related matters. This obligation requires abstention from adverse representation by the individual lawyer involved, but does not properly entail abstention of other lawyers through imputed disqualification. Hence, this aspect of the problem is governed by Rule 1.9(a). Thus, if a lawyer left one firm for another, the new affiliation would not preclude the firms involved from continuing to represent clients with adverse interests in the same or related matters, so long as the conditions of Rule 1.10(b) ... concerning confidentiality have been met.\n\n(Emphasis added.) Under the Rules of Professional Conduct, then, client loyalty (i.e., the duty not to take a position adverse to a former client) is broader in situations where the same lawyer is representing an adverse client in a substantially related matter. In those situations \u0097 and Gillard's representation in this Court's previous decision was one of them \u0097 the duty of loyalty is equal to the duty of confidentiality under the dictates of Rule 1.9(a). The present situation, by contrast, involves a claim of conflict by imputation. Situations involving imputation to lawyers in another firm are governed by Rule 1.10(b), which limits the duty of loyalty solely to the duty to maintain client confidences.\nThe present disqualification motion offers a good example of why Rule 1.10(b) concerns itself only with client confidences. Welter is asking for loyalty from Weaver beyond the duty of nondisclosure even though Welter terminated the relationship with Weaver. Welter was loyal to Weaver until 1985, then he shifted his loyalty to Gillard. All of the substantially related work was performed by Gillard and other WW & B lawyers, not Weaver, after 1985. Certainly, Weaver has a continuing duty not to use the client confidences he actually learned before 1985 against his former client. However, once Welter shifted his loyalty (and his work) to a different lawyer, and Weaver left to join a different firm, Weaver has no continuing duty of loyalty in matters related to work he did not perform. Welter asks for even more than this, however. Welter asks that the *1073 duty of loyalty extend beyond Weaver to other lawyers at Baker & Daniels, trial counsel in this case, who have never represented Welter. This request takes the duty of loyalty to the extreme and would produce a result that would effectively prevent all partners and most associates from ever switching firms for fear of conflicts. The duty of loyalty, i.e., the duty not to take a position adverse to a former client, does not extend beyond the duty to preserve client confidences in cases of multiple-firm imputation under Rule 1.10(b).\n\n4. Weaver's Representation of Pleasant Street\nFrom December 2000 to August 2001, Weaver represented the incorporators of Pleasant Street and then the corporation after its formation. Welter was never more than a non-operating investor in Pleasant Street, so Weaver did not represent Welter individually. Even if Welter were considered one of the incorporators, Weaver's representation of him was in the past. Welter has made no showing of a substantial relationship under Rule 1.9. Weaver's representation of Pleasant Street does not serve as a basis for disqualifying Baker & Daniels in this matter.\n\nB. Castille\nWelter next argues that Baker & Daniels should be disqualified based on the work of Angela Castille while she was an associate at WW & B. Castille joined WW & B a few months after law school and worked there from 1989 to 1993. In 1993, she left WW & B to join the Elkhart office of Baker & Daniels, where she is still employed. Welter identifies two areas of conflict: Castille's work on the Executive Benefit Plan in 1990 and Castille's work on Welter's repurchase of Fabwel stock from ABF Investors in 1992.\n\n1. Castille's Work on the 1990 Executive Benefit Plan\nBilling records[5] from 1990 show that Castille worked for 5.2 hours researching whether the Executive Benefit Plan was subject to the provisions of the Employee Retirement Income Security Act (\"ERISA\"). That time also includes reporting her findings to Cynthia Gillard and others at WW & B. As explained in this Court's previous decision, the 1990 Executive Benefit Plan is centrally relevant to the present dispute. Welter's counterclaim alleges a breach of the 1990 agreement and its 1997 amendment.\nESI defends its position by pointing out the limited nature of Castille's representation and asserting that Castille did not acquire any confidences from Welter. ESI also argues that Fabwel (and not Welter) was the client.\nCastille was just beginning her second year as a lawyer when she researched a matter related to the 1990 Executive Benefit Plan. Her research amounted to 5.2 hours of time and related to whether the plan was governed by ERISA, an issue not raised to this point in this case. Her affidavit states that \"[t]o the best of my knowledge, I did not communicate with Welter or anyone else regarding Welter's intent or interpretation regarding the proposed Amendment in 1990.\" The billing records show no communication with Welter.\nAs mentioned previously, the analysis under the substantial relationship test includes the question of \"whether it is reasonable to infer that the confidential information *1074 allegedly given would have been given to a lawyer representing a client in those matters.\" LaSalle Nat'l Bank, 703 F.2d at 255-56. If a substantial relationship is established, then Court presumes that confidences were shared. Id. at 256. The presumption may be rebutted, however, with evidence that the attorney was not privy to the confidences and secrets of the client. Id. at 257. When analyzing both the second prong of the substantial relationship test and the rebuttal of the presumption, the Court may consider several factors including \"the size of the law firm, the area of specialization of the attorney, [and] the attorney's position in the firm.\" Freeman, 689 F.2d at 723. Accord: LaSalle Nat'l Bank, 703 F.2d at 257 and Schiessle, 717 F.2d at 420-21. Another factor is the \"duration of time spent by an attorney on a particular matter.\" Novo Terapeutisk Laboratorium v. Baxter Travenol Labs., 607 F.2d 186, 189 (7th Cir. 1979) (panel decision), rev'd on other grounds, Novo Terapeutisk, 607 F.2d at 194-97 (en banc decision).\nESI cites Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 518 F.2d 751 (2d Cir.1975), for a similar proposition. Silver Chrysler recognized that \"ethical problems cannot be resolved in a vacuum. ... Thorough consideration of the facts ... is required. Nor can judges exclude from their minds realities of which fair decision would call for judicial notice.\" Id. at 753 (citations and internal quotes omitted). One of those realities concerned inexperienced associates:\nIt is unquestionably true that in the course of their work at large law firms, associates are entrusted with the confidences of some of their clients. But it would be absurd to conclude that immediately upon their entry on duty they become the recipients of knowledge as to the names of all the firm's clients, the contents of all files relating to such clients, and all confidential disclosures by client officers or employees to any lawyer in the firm. Obviously such legal osmosis does not occur.\nId. at 753-54. The court applied this reality to a disqualification motion alleging that a lawyer had previously represented Chrysler on several matters while a new associate at the firm of Chrysler's current counsel.\nBut there is reason to differentiate for disqualification purposes between lawyers who become heavily involved in the facts of a particular matter and those who enter briefly on the periphery for a limited and specific purpose relating solely to legal questions. In large firms at least, the former are normally the more seasoned lawyers and the latter the more junior. This is not to say that young attorneys in large firms never become important figures in certain matters but merely to recognize that some of their work is often of a far more limited variety. Under the latter circumstances the attorney's role cannot be considered \"representation\" ... so as to require disqualification.\nId. at 756-57 (citations omitted).[6]\nJudge Adams's concurring opinion explained that the disqualification analysis *1075 ... should focus on the similarities between the two factual situations, the legal questions posed, and the nature and extent of the attorney's involvement with the cases. As part of its review, the court should examine the time spent by the attorney on the earlier cases, the type of work performed, and the attorney's possible exposure to formulation of policy or strategy.\nId. at 760. The court concluded on the facts of that case that the lawyer's prior involvement with specific Chrysler legal matters was \"at most, limited to brief, informal discussions on a procedural matter or research on a specific point of law.\" Id. at 756. On this basis, the court affirmed the district court's decision refusing to disqualify the lawyer. Id. at 758.\nThe particular facts of this case show that Castille was no more than peripherally involved in the drafting of the 1990 Executive Benefit Plan. Castille was an inexperienced lawyer in 1990, and she spent a mere 5.2 hours researching a discrete legal issue under ERISA, which has never been a part of this case. Furthermore, she never spoke to the client Welter. It is highly unlikely that she received client confidences related to the present case because her representation of Welter was peripheral. In her uncontroverted affidavit, she denies receiving confidential information. This is sufficient to rebut the presumption of acquired confidences.[7]\n\n2. Castille's Work on the 1992 Repurchase of Fabwel from ABF Investors\nBilling records from 1992 show that Castille worked over 150 hours on Welter's repurchase of Fabwel stock from ABF Investors. She drafted the stock purchase agreement, the necessary paperwork to the secretary of state, a bill of sale, shareholder resolutions, a release, a Subchapter S agreement, notices, intellectual property assignment documents, a termination of stock option agreement, and other closing documents. She had conferences with WW & B lawyers and one short telephone call with Welter.\nCastille was more than peripherally involved with the 1992 transaction. It is reasonable to assume that she would have received at least some client confidences relating to the repurchase of Fabwel from ABF Investors. The next question, then, is whether her 1992 representation is related to the present litigation. Welter says that it is. Welter's affidavit is nonspecific though: \"Castille's work included services provided in connection with ... the purchase of Fabwel stock from ABF.\" Welter Affidavit \u00b6 11. The affidavit also states, \"The repurchase of stock of Fabwel back from ABF ... included privileged discussions with counsel regarding Non-Compete Agreements with ABF and the Executive Benefit Plan.\" In his Reply, Welter makes another unsupported allegation: \"Part of the repurchase of Fabwel involved the negotiation surrounding the Executive Benefit Plan and discussions among the investment group of Larry Farver's Non-Compete and Confidentiality Agreement he signed in 1988.\" Welter's Reply in Supp. of Mot. to Disqualify at 2. Castille's billing records do not indicate a substantial relationship on their face. In sum, Welter has produced copies of billing records that do not clearly indicate a substantial relationship, a nonspecific affidavit, and an unsupported statement in his brief.\n*1076 The Court finds no substantial relationship here. The repurchase occurred in 1992, nine years before the facts underlying this case and five years before Welter signed the 1997 non-compete agreement at issue in this case. Welter's non-compete agreement with ABF, which Welter signed in 1987, is not the subject of this suit. Welter's allegation that he discussed the Executive Benefit Plan with WW & B is too vague for the Court to link it with Castille. Castille denies advising Welter regarding the Executive Benefit Plan and denies conducting any of the negotiations on behalf of Welter. Welter's affidavit does not assert Castille's involvement with the discussions in 1992 relating to the Executive Benefit Plan. Neither affidavit discusses the substance of the single, short phone call between Welter and Castille. Welter's remaining contentions are not contained in his affidavit and are not properly before the Court. They are also vague and undeveloped. The 1992 repurchase of Fabwel does not provide a basis for disqualifying Baker & Daniels.\n\nC. Mills\nMills is not a lawyer; she is a paralegal. Strictly speaking, the conflict of interest rules do not apply to paralegals who are assisting the lawyers in a law firm. Instead, paralegals are governed indirectly by Rule 5.3, which imposes on the supervising lawyers the duty to ensure that their nonlawyer assistants' conduct is \"compatible with the professional obligations of the lawyer.\"\nWelter presents very little argument as to why Baker & Daniels should be disqualified through Mills. Welter claims that Mills provided unspecified services for E.W. Marine. He claims that one of the issues in this case involves the scope of services conducted by E.W. Marine before and after the 1997 non-compete agreement signed by Welter. Baker & Daniels allegedly would have inside knowledge about the inner workings of E.W. Marine through Mills.\nWelter has not described, even in general terms, the extent of Mills's work on behalf of E.W. Marine, nor has he rebutted Mills's affidavit that says she has\nhad no discussions about my past employment with [WW & B] or any tasks that I might have performed at [WW & B], with any Baker & Daniels attorney involved in [this case], except to the extent necessary to prepare Baker & Daniels' response to the Defendant's motion to disqualify Baker & Daniels and Baker & Daniels' motion to disqualify [W & B], and only as regards the timing and subject matter of those tasks.\nMills Affidavit \u00b6 5. Welter has not cited a single case involving disqualification through a paralegal. The Court's own research has found no case disqualifying a firm based on facts similar to the present situation. Consequently, Welter's attempt to disqualify Baker & Daniels through Mills is undeveloped and unconvincing. Mills does not provide a basis for disqualifying Baker & Daniels.\n\nD. Waiver\nWelter's motion to disqualify fails on its merits. It suffers an additional defect as well. Welter filed his motion more than twelve months from the time he and his counsel first learned of the potential conflict. Twelve months is too long to wait. Welter has waived his right to seek disqualification in this case.\nAs mentioned before, a former client's ability to seek disqualification of its adversary's attorney can be waived if the former client knew of its attorney's representation of an adversary, but failed to raise its objection promptly. E.g., Trust Corp. MT v. Piper Aircraft Corp., 701 F.2d 85, 87 (9th Cir.1983). When determining *1077 whether a party has waived its objections, courts should consider the following: 1) the length of the delay in bringing the motion to disqualify; 2) when the former client learned of the conflict; 3) whether the former client was represented by counsel during the delay; 4) why the delay occurred; and 5) whether the delay would result in prejudice to the nonmoving party. Chemical Waste Management, Inc. v. Sims, 875 F.Supp. 501, 505 (N.D.Ill.1995).\nIn this case, Welter knew about the potential conflict of interest no later than March 16, 2001, when his counsel sent a letter to Baker & Daniels objecting to Baker & Daniels's conflict of interest through Weaver and Castille. Welter did not file his motion to disqualify, however, until March 28, 2002, more than twelve months later. He was represented at all times during this delay except for the two weeks it took for Welter to obtain new counsel after Judge Miller's approval of this Court's disqualification of Gillard. During those twelve months, Baker & Daniels performed thousands of hours of work litigating this case and preparing for a preliminary injunction hearing that is now just days away. To disqualify Baker & Daniels at this late date would severely prejudice ESI. Yet, the comparative prejudice to Welter if the motion to disqualify is not granted is minimal, given the extremely limited nature of the conflict.\nWelter's explanation for the delay is unpersuasive. He asserts that he did not think a conflict existed until this Court disqualified Gillard. Comparing the alleged conflict of interest raised by Welter's motion to Gillard's conflict of interest is stretching the argument too thin. Gillard was disqualified because she was attacking her own work. Welter's motion attempts to string together a series of past representations on unrelated related matters and impute them to other lawyers in other firms. The principles of this Court's previous decision do not necessitate granting the present motion. It is unreasonable to suggest that Welter did not know that Baker & Daniels's potential conflict might have merit until after this Court's decision disqualifying Gillard and her firm.\nWelter waited too long to file his motion. He has waived his right to seek the disqualification of ESI's counsel, Baker & Daniels.\n\nIII. CONCLUSION\nWelter has not shown that Weaver worked for him on any substantially related matter from 1972 to 1985 and has not shown actual shared confidences sufficient to justify imputation of conflict from WW & B lawyers, through Weaver, to other lawyers at Baker & Daniels for work performed from 1985 to 1993. Weaver's work for Pleasant Street is not conflicting because Pleasant Street, and not Welter, was the client. Castille's involvement with the 1990 Executive Benefit Plan was merely peripheral, and it is unreasonable to assume that she received client confidences related to this case based on her limited amount of narrowly-focused legal research. Welter has also failed to show that Castille's work for E.W. Marine and her work for Welter on the 1992 repurchase of Fabwel was substantially related to the present case. Welter's argument related to Mills is too nonspecific and undeveloped to merit the disqualification of Baker & Daniels. Additionally, because Welter waited too long to bring this motion, he has waived his right to seek disqualification. Welter's motion to disqualify [Doc. No. 179] is DENIED.\nSO ORDERED.\nNOTES\n[1] On June 10, 2002, Welter filed a Supplemental Motion to Disqualify the Baker & Daniels Law Firm [Doc. No. 217], which raises new grounds for disqualification unrelated to the present motion. The Supplemental Motion is not ripe for decision, and this opinion does not address any of the issues raised in the Supplemental Motion.\n[2] In this Court's previous opinion, the Court recognized that a lawyer's work on the same type of problem for a past client may bolster the Court's decision to disqualify an attorney currently acting adverse to the former client. Exterior Systems, Inc., 175 F.Supp.2d at 1117-18. That opinion made clear, though, that the sufficient and independent reason for disqualification was because Attorney Gillard was essentially attacking her own work in the form of the Executive Benefit Plan. Id. at 1117. Gillard's work on the same generic type of problem \u0097 in that opinion non-competition contracts on behalf of Fabwel \u0097 was not sufficient standing alone to support disqualification, but it did bolster the Court's decision to disqualify on other grounds. Id.\n[3] Rule 1.10(a) was the basis for disqualifying Cynthia Gillard's firm, Warrick & Boyn, in the Court's previous decision.\n[4] Specifically, the Court stated that \"[Rule 1.9(a)'s] loyalty requirement extends beyond situations where client confidences are actually learned and used, but the duty of loyalty does not extend to the point of never allowing an attorney to take a position adverse to a former client. [It] extends the duty of loyalty to situations where it reasonably can be inferred that the attorney learned related confidences during the prior representation on a `substantially related matter.'\" Exterior Systems, 175 F.Supp.2d at 1115.\n[5] The billing records attached to Welter's reply have not been authenticated, but ESI does not challenge their authenticity. Consequently, the Court will assume that the billing records are what Welter claims they are.\n[6] Silver Chrysler's peripheral representation doctrine was cited with approval but distinguished in the panel opinion of Novo Terapeutisk, 607 F.2d at 189, 191 (panel decision). Novo Terapeutisk was reheard en banc, and the en banc court reversed the panel decision, relying in part on Silver Chrysler. Novo Terapeutisk, 607 F.2d at 197 (en banc decision). In addition, Westinghouse Elec. Corp. v. Gulf Oil Corp., 588 F.2d 221, 223 n. 1, 227 (7th Cir.1978), and Schloetter v. Railoc of Indiana, Inc., 546 F.2d 706, 712-13 (7th Cir.1976), cited the principles of Silver Chrysler with approval, but distinguished them under the particular facts of those cases.\n[7] ESI's argument that Fabwel was the client, and not Welter, is unconvincing. Welter was the largest beneficiary under the 1990 Executive Benefit Plan, and served as Fabwel's president and chief executive officer at the time the plan went into effect. Welter is best considered as a joint client with Fabwel for purposes of drafting the 1990 Executive Benefit Plan.\n"} -{"text": " IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON\n\nPAUL THOMAS CREWS, as personal\nrepresentative of the ESTATE OF No. 70756-6-1\nBRENDA HOUSTON, and as personal\nrepresentative of the ESTATE OF DIVISION ONE\nELIZABETH CREWS, and in his individual\ncapacity, UNPUBLISHED OPINION\n\n Respondent,\n\n en\n\n\n m\n\nAVCO CORPORATION,\n I\n\n\n Appellant,\n\n PRECISION AIRMOTIVE LLC; up\n rvs\n FORWARD TECHNOLOGIES V.C-\n INDUSTRIES, INC.; CREST AIRPARK,\n INC.; and AUBURN FLIGHT SERVICES,\n INC.,\n\n Defendants. FILED: April 6, 2015\n\n\n Appelwick, J. \u2014 Avco appeals the trial court's order sanctioning it for discovery\n\nviolations. The trial court struck all of Avco's affirmative defenses and deemed all\n\nallegations in Crews's complaint admitted. As a result, the court found liability and\n\ncausation established and set separate trials on compensatory damages and punitive\n\ndamages. Avco argues that the discovery sanctions order violated its right to due\n\nprocess. It further asserts that the trial court abused its discretion in imposing sanctions\n\nthat were more severe than necessary. We remand for amendment of judgment to reflect\n\noffset of amounts Crews received from other defendants. We otherwise affirm.\n\fNo. 70756-6-1/2\n\n\n\n\n FACTS\n\n On July 27, 2008, a rented Cessna 172N plane crashed in the Cascades near\n\nMcMurray, Washington. The accident killed the pilot, Brenda Houston, and her two\n\npassengers: Houston's 10 year old daughter, Elizabeth Crews, and their family friend, Dr.\n\nVirgil Becker.\n\n On September 10, 2008, Houston's husband, Paul Crews, sued for injuries and\n\nwrongful death. Crews named multiple defendants involved in the manufacture and care\n\nof the plane. The personal representative of Becker's estate also brought suit against the\n\nsame defendants and named Houston's estate as an additional defendant, claiming pilot\n\nnegligence. The plaintiffs alleged that engine failure, in particular a faulty carburetor,\n\ncaused the plane crash. The defendants included Avco Corporation, which manufactured\n\nand sold the plane's engine in 1978,1 and Precision Airmotive Corporation, which installed\n\na new carburetor float in the engine in 1999.\n\n Precision developed the float pursuant to its parts manufacturer approval (PMA)\n\nfrom the Federal Aviation Administration (FAA). With a PMA, vendors of airplane parts\n\ncan sell replacement parts directly to customers and service shops. Precision acquired\n\na PMA to supply carburetors for Avco. The PMA required Precision to manufacture the\n\ncarburetors according to Avco's preapproved engineering drawings and specifications.\n\nIn the 1990s, Precision designed a new float made of a polymer resin called Delrin.\n\nPrecision obtained permission from Avco to use the Delrin float, and the FAA approved\n\nthe float.\n\n\n 1 The engine was manufactured by Avco's unincorporated division, Lycoming\nEngines. Because Avco is the named party in the lawsuit, we refer to Avco and Lycoming\ntogether as \"Avco\" to maintain clarity and consistency.\n\fNo. 70756-6-1/3\n\n\n\n\n Crews and Becker alleged that the Delrin floats were defective and that a faulty\n\nDelrin float was responsible for the plane crash. They further alleged that Avco and its\n\ncodefendants were aware the floats were defective but withheld this information and failed\n\nto warn about the defects. The plaintiffs asserted claims for strict liability, negligence,\n\nand breach of warranty. They sought both general and punitive damages.\n\n Avco asserted several affirmative defenses, including a lack of involvement with\n\nthe carburetor or float, compliance with federal regulations, federal and state statutes of\n\nrepose, comparative fault, the unavailability of punitive damages, and a demand for offset\n\nof amounts recovered from other liable parties. Avco also counterclaimed against\n\nHouston's estate, alleging that pilot error caused the crash.\n\n In October 2010, Crews and Becker jointly served their first requests for production\n\non Avco. The requests generally pertained to the carburetors and Delrin floats, their\n\ndesign and manufacture, Avco's communication with the FAA and with other companies\n\nabout the carburetors and floats, and information about any known defects or\n\nmalfunctions. Avco did not produce any discovery at that time. It objected to 68 of the\n\n73 requests. It stated that it would produce the remaining documents with its answers\n\nand affirmative defenses.\n\n\n Crews's and Becker's cases were consolidated on January 31, 2011.\n\fNo. 70756-6-1/4\n\n\n\n\n On April 29, Becker served his first interrogatories and second requests for\n\nproduction on Avco. Avco objected to 16 of the 17 interrogatories. It also objected to 27\n\nof the 30 requests for production. As to the remaining three, Avco stated that responsive\n\ndocuments had already been provided.\n\n On July 6, Becker moved to compel Avco to answer his first interrogatories and\n\nrespond to his second requests for production. On July 7, the plaintiffs jointly moved to\n\ncompel production of documents responsive to their requests. Avco opposed both\n\nmotions. In his reply, Becker asserted that Avco withheld documents reflecting its role in\n\ntesting, reviewing, approving, and certifying the Delrin float. As support, Becker attached\n\na December 2005 series of e-mails between Avco and Precision employees reflecting\n\nAvco's knowledge of defects in the Delrin floats. Becker had obtained the e-mails from\n\nPrecision's discovery production. The subject line of the e-mails was \"Plastic Float\n\nLeaking - Concerns.\" An Avco employee wrote that, \"[p]er the attached file and our\n\nprevious conversations, it is clear that the hollow plastic carb floats can leak, allowing fuel\n\nto enter the interior of the floats. [Avco] is concerned that this condition will lead to\n\nfunctional issues on engine installations.\" The attached file was not included. A\n\nPrecision employee replied, \"We have been monitoring the situation with leaking Delrin\n\nfloats since their incorporation into production. We have, on several instances discussed\n\nthe situation with personnel at [Avco].\"\n\n On July 21, Judge Julie Spector granted Becker's motion and the joint motion to\n\ncompel. Judge Spector ordered Avco to respond to Becker's requests within 14 days and\n\nthe plaintiffs' joint requests within five days. She further ordered Avco to specifically\n\fNo. 70756-6-1/5\n\n\n\n\nidentify by Bates stamp number each document that was responsive to each interrogatory\n\nOr request. She also provided that the plaintiffs could seek costs for bringing the motions.\n\n On August 4, Avco amended its responses to the plaintiffs' first requests for\n\nproduction and Becker's first interrogatories and second requests for production. Avco's\n\nresponses generally indicated that \"[r]esponsive documents have either been produced\n\n9nd/or are being made available for inspection\" or that \"Avco has located no documents\n\nresponsive to this request.\" (Emphasis omitted.)\n\n On August 31, Becker moved to hold Avco in contempt for failing to comply with\n\ntJie order to compel. He requested that the court impose sanctions, including striking\n\nAvco's federal statute of repose defense, holding that Avco may not oppose the\n\nAvailability of punitive damages in this case, holding that Avco had a duty to warn owners\n\nand operators about the defective float, and monetary sanctions. On September 2, the\n\nplaintiffs also jointly moved to hold Avco in contempt and to impose sanctions.\n\n On September 27, Judge Spector granted both contempt motions, finding that\n\nAvco's \"willful violation of the Court's July 20, 2011 Order has prejudiced and continues\n\nto prejudice the plaintiffs in their prosecution of the case.\" She ordered Avco to fully\n\ncomply within seven days. She further ordered Avco to submit an affidavit detailing all\n\nefforts made to fully comply with the order, \"including, as for each ordered request, a\n\nstatement as to whether full and complete production has been made, and a detailed\n\ndescription of how documents were identified and located.\" Judge Spector again\n\nprovided that the plaintiffs could seek costs and fees for bringing the motions. She\n\nreserved ruling on three sanctions: striking Avco's federal statute of repose defense;\n\fNo. 70756-6-1/6\n\n\n\nordering that Avco may not oppose punitive damages; and ordering that Avco had a duty\n\nto warn about the defective floats.\n\n Avco submitted a declaration from counsel detailing Avco's efforts to comply with\n\nJudge Spector's orders. Counsel stated that, pursuant to company policy, \"certain\n\nCategories of documents (such as engineering documents and regulatory\n\nCorrespondence) are kept into perpetuity whereas other categories of documents are not\n\nRequired to be retained on a permanent basis but are retained only for fixed periods of\n\ntime, depending upon the category of document.\" Counsel's affidavit further explained\n\nthat many of the documents supplied by Precision regarding carburetors were \"beyond\n\nthe various retention periods in [Avco's] Records Management Policy.\" The records\n\nmanagement policy was not attached to the declaration.\n\n On October 10, Avco moved to amend or vacate the contempt orders. It argued\n\nthat it made good faith efforts to comply with the plaintiffs' broad discovery requests and\n\nthat it had timely submitted the declaration of compliance as required by the court's order.\n\nAvco also proposed that the subject matter of the orders be transferred to retired Judge\n\nParis Kallas, who had been appointed special discovery master the prior month.\n\n On November 8, Judge Spector denied Avco's motion. She declined to impose\n\nfurther sanctions at that time.\n\n Effective January 9, 2012, the case was transferred to Judge Monica Benton.\n\n On January 20, Becker served Avco with his second interrogatories and third\n\nrequests for production. Avco responded on February 24. Again, Avco objected to many\n\nof the requests or stated that it had no responsive documents.\n\fNo. 70756-6-1/7\n\n\n\n On May 25, Becker brought a motion before Discovery Master Kallas to compel\n\nAvco to fully answer the second interrogatories and third requests for production. On\n\nJune 12, Discovery Master Kallas granted Becker's motion in part and ordered Avco to\n\nproduce certain discovery. She rejected Becker's argument that Avco's responses were\n\nevasive, instead finding that Avco explicitly represented that its responses were complete\n\nand compliant. She further stated that Avco was held to its representations and its duty\n\nto reasonably supplement its responses.\n\n On September 4 and 5, Becker and Crews amended their complaints to add\n\nfederal causes of action.\n\n On September 28, the plaintiffs jointly moved for a default judgment against Avco\n\nfor itsfailure to complywith Judge Spector's discovery and contempt orders. The plaintiffs\n\nexplained that they sought discovery about Avco's role in approving the Delrin float,\n\nknowledge about the defective floats, and failure to notify the FAA or aircraft operators\n\nand owners about the defect. The plaintiffs identified several examples of documents\n\nthat Avco failed to produce, including the 2005 e-mails with Precision about the Delrin\n\nfloat leaking problems. The plaintiffs asserted that Avco's noncompliance put them at a\n\n\"serious disadvantage trying to prepare for trial without the benefit of critical facts going\n\nto the heart of their case against [Avco] and other defendants.\" The plaintiffs requested\n\nthat the court deem all allegations of the plaintiffs' complaints admitted and order Avco in\n\ndefault thereof, or, in the alternative, strike Avco's affirmative defenses, hold that the\n\npunitive damages elements against Avco had been met, and hold that Avco breached its\n\nduty to warn.\n\n\n\n\n 7\n\fNo. 70756-6-1/8\n\n\n\n\n Avco responded on October 4. It did not assert that it had provided the allegedly\n\nwithheld documents. However, it maintained that it had responded to all the plaintiffs'\n\ndiscovery requests and had produced documents or made documents available for\n\nipspection. It also explained that, under its records management policy, many of the\n\ndocuments that Precision produced were no longer in Avco's possession.\n\n In the plaintiffs' October 5 reply, they noted that Avco failed to submit any employee\n\naffidavit stating that no responsive documents existed or that certain evidence was\n\ndestroyed under the records management policy. Instead, they observed, Avco \"wholly\n\nrelies on [its attorney's] declaration, which Judge Spector rejected.\"\n\n On February 4, 2013, the first day of trial, Judge Benton held oral argument on the\n\nplaintiffs' motion for default. At oral argument, Avco's counsel produced a copy of the\n\nrecords management policy for Judge Benton. Counsel acknowledged that Judge\n\nSpector was not provided a copy of the policy and was only informed about the policy via\n\ncounsel's declaration. Judge Benton found that it was unclear whether the policy\n\nextended to the documents requested by the plaintiffs. She stated that she was \"not\n\nsatisfied . . . that some of the documents requested by the plaintiff couldn't have been\n\nproduced.\" She orally granted the plaintiffs' motion to sanction Avco.\n\n On February 5, Judge Benton entered a written order granting the plaintiffs' motion.\n\nThe order stated that there was substantial evidence that Avco did not comply with the\n\nplaintiffs' discovery requests, listing \"[a]s one example\" the 2005 e-mail chain with\n\nPrecision. The court found that the withheld discovery tied directly to the plaintiffs' burden\n\nof proof regarding Avco's violation of federal regulations and punitive damages. The\n\norder further stated that Avco's justification for nonproduction was insufficient: \"The Court\n\n\n 8\n\fNo. 70756-6-1/9\n\n\n\n\nExamined the [records management policy], which was provided without affidavit or\n\ndeclaration and here finds the categories within it, combined with counsel's assignment\n\nOf documents to the categories within it, to be overly vague.\" (Emphasis omitted.). The\n\ncourt found that Avco's \"continued disregard and violation of the discovery and contempt\n\nOrders is without reasonable excuse and is willful. [Avco] has and continues to\n\nSubstantially prejudice plaintiffs' preparation for trial and presentation at trial, on issues of\n\nliability, causation, and punitive damages.\" (Emphasis omitted.) It concluded that the\n\nonly sanction that suffices is as follows: \"All of each plaintiff's allegations in their\n\nrespective operative Complaints against [Avco] are deemed admitted, and all of [Avco's]\n\ndefenses, if any, are stricken.\" The court established liability and causation in favor ofthe\n\nplaintiffs and left to the jury the amount of compensatory and punitive damages to be\n\n^warded.\n\n The jury considered compensatory damages and punitive damages in two\n\nseparate phases oftrial. It returned a verdict for Crews2 of $17,283,000: $11,283,000 in\ncompensatory damages and $6,000,000 in punitive damages.\n\n Avco appeals.3\n\n DISCUSSION\n\n Avco challenges the trial court's discovery sanctions order on multiple grounds.\n\nAvco first argues that the order violated due process, because Avco had no notice that it\nWas in continuing violation of previous discovery orders. Avco further contends that the\n\n 2After the compensatory damages phase ofthe trial, Avco settled with Becker. At\nthe punitive damages phase, the parties presented evidence regarding only Crews's\nclaims. After trial concluded, Crews's and Becker's cases were deconsolidated.\n 3Avco moved to include summaries and timelines as appendices to its opening\nbrief. There was no objection to the motion. The motion is granted.\n\fNo. 70756-6-1/10\n\n\n\n\ntrial court abused its discretion in imposing the most severe sanctions possible when\n\nlesser sanctions would have sufficed. Avco also challenges specific sanctions, asserting\n\nthat the trial court erred in striking Avco's federal defenses, imposing punitive damages,\n\nand denying an offset of amounts Crews received from other defendants.\n\n I. Due Process\n\n\n Avco characterizes the discovery sanctions order as a violation of its right to due\n\nprocess. Due process is satisfied if, before entering a default judgment or dismissing a\n\nClaim or defense, the trial court concludes that there was a willful or deliberate refusal to\n\nobey a discovery order and that the refusal substantially prejudiced the opponent's ability\n\nto prepare for trial. Maqana v. Hyundai Motor Am., 167 Wn.2d 570, 591, 220 P.3d 191\n\n(2009).\n\n Here, Judge Spector concluded that Avco willfully violated her discovery orders\n\nand that its willful violation prejudiced the plaintiffs in their prosecution of the case.\n\nAccordingly, Judge Spector held Avco in contempt. She denied Avco's motion to amend\n\nor vacate the contempt orders. At no point did any judge enter an order finding that the\n\ncontempt was purged.\n\n Avco nonetheless asserts that it was unaware there would be further\n\nconsequences for its failure to comply with Judge Spector's contempt orders. This is so,\n\nAvco argues, because Judge Spector and Discovery Master Kallas entered subsequent\n\norders indicating that Avco's responses were adequate. Avco does not assert that these\n\norders had preclusive effect on subsequent discovery decisions or estopped Crews from\n\n\n\n\n 10\n\fNo. 70756-6-1/11\n\n\n\n\narguing that Avco was in continuing violation. Avco merely asserts that, in light of the two\n\nOrders, the discovery sanctions were an ambush.4 We disagree.\n\n First, Avco maintains that Judge Spector indicated that Avcowas in compliance by\n\ndeclining the plaintiffs' proposal to impose more severe sanctions. But, this\n\nmisrepresents the record. The fact that Judge Spector reserved ruling on the three\n\nharsher proposed sanctions put Avco on notice of the risk that the more severe sanctions\n\nCould be imposed in the future for failure to comply. Judge Spector declined to impose\n\nthose sanctions when ruling on Avco's motion to amend or vacate the contempt orders.\n\nBut, she did not expressly revoke her reservation of them in her previous order. Merely\n\ndeclining to impose further sanctions did not indicate that Avco had purged contempt,\n\nevidenced by the fact that Judge Spector specifically denied Avco's motion to vacate the\n\nContempt orders.\n\n Avco further alleges that Discovery Master Kallas confirmed that Avco's responses\n\nwere adequate. Again, this mischaracterizes the record. The issue before Master Kallas\n\nwas not whether Avco had purged its contempt. The issue was whether Avco was\n\nevasive in responding to Becker's second interrogatories and third requests for\n\nproduction. Becker had complained that, where Avco produced no responsive\n\ndocuments, it failed to affirmatively state that it had no documents to produce. Master\n\nKallas stated that Avco's counsel represented that its responses were complete and\n\nCompliant. She did not determine that the responses were in fact complete, and she\n\n\n\n\n 4 At oral argument, Avco also asserted that the trial court should have held an\nevidentiary hearing before imposing sanctions. But, Avco did not request an evidentiary\nhearing in its response to the motion for default or at any other time on this record.\n\n\n 11\n\fNo. 70756-6-1/12\n\n\n\nfurther noted Avco's duty to supplement. Nothing in these orders provides that Avco's\n\nearly contempt had been purged or that the reserved sanctions had been lifted.\n\n In the 2011 contempt orders, Judge Spector made the requisite findings to satisfy\n\ndue process. Her orders clearly put Avco on notice that she was reserving additional\n\nsanctions and identified what those sanctions were. The plaintiffs' motion for default put\n\nAvco on notice that its compliance with the contempt orders was still in question. Avco\n\nthen had more than four months before the sanctions hearing, during which it could have\n\nComplied with the orders or prepared a defense. Neither the discovery sanctions\n\nprocedure nor the order violated Avco's right to due process.\n\n II. Discovery Sanctions\n\n Avco argues that the trial court erred in imposing a \"death penalty order\" that was\n\nmore severe than necessary to cure any prejudice. If a party fails to obey a discovery\n\norder, the trial court may \"make such orders in regard to the failure as are just.\" CR\n\n37(b)(2). The trial court has broad discretion as to the choice of sanctions for violation of\n\na discovery order. Burnet v. Spokane Ambulance, 131 Wn.2d 484, 494, 933 P.2d 1036\n\n(1997). We will not disturb its ruling on appeal absent a clear showing of abuse of\n\ndiscretion, jd.\n\n Discovery sanctions serve to deter, punish, compensate, educate, and ensure that\n\nthe wrongdoer does not profit from the wrong. Wash. State Physicians Ins. Exch. &Ass'n\n\ny. Fisons Corp., 122 Wn.2d 299, 356, 858 P.2d 1054 (1993). The trial court should\n\nimpose the least severe sanction that is adequate to serve the sanction's particular\n\npurpose but is not so minimal as to undermine the purpose of discovery. ]d. at 355-56.\n\n\n\n\n 12\n\fNo. 70756-6-1/13\n\n\n\n\n CR 37(b) presents a nonexclusive list of possible sanctions, including designating\n\nfacts as established, striking claims or defenses, limiting or prohibiting evidence, default,\n\nand contempt. If a trial court imposes one of the harsher remedies under CR 37(b), the\n\nrecord must clearly show that (1) one party willfully or deliberately violated the discovery\n\nijules and orders, (2) the opposing party was substantially prejudiced in its ability to\n\nprepare for trial, and (3) the trial court explicitly considered whether a lesser sanction\n\nWould have sufficed. Magana, 167 Wn.2d at 584. We can disturb a trial court's sanction\n\nOnly if it is clearly unsupported by the record, jd. at 583.\n\n Here, the trial court made the three required findings on the record. Thus, our\n\nfocus is whether the record supports those findings.\n\n A. Willful Violation\n\n\n A party's disregard of a court order without reasonable excuse is deemed willful.\n\n(Rivers v. Wash. State Conference of Mason Contractors, 145 Wn.2d 674, 686-87, 41\n\nF\\3d 1175 (2002). Here, the trial court found that Avco's \"discovery violations were willful\n\nas found by Judge Spector and have continued to be willful since her ruling has not been\n\nComplied with. . . . Further the court finds that [Avco] has not presented a reasonable\n\nexcuse or justification for its non-compliance.\" (Emphasis omitted.) This finding is\ni\n\n\n\n\nsupported by the record.\n\n The plaintiffs repeatedly requested information about Avco's involvement with the\n\nDelrin floats and knowledge that they were problematic. Avco did not provide the\n\nrequested discovery, despite being ordered to produce and subsequently being held in\n\ncontempt for failing to do so. Avco claimed that, under its records management policy, it\n\n\n\n\n 13\n\fNo. 70756-6-1/14\n\n\n\nWas not required to keep all the documents that the plaintiffs sought. As a result, Avco\n\nasserted, its failure to produce the records was not willful.\n\n Avco did not produce or prove the policy at the original contempt hearing before\n\nJudge Spector. Instead, it submitted an attorney declaration stating that the policy\n\ngoverns the retention of \"various categories of documents, including intra-company and\n\ninter-company correspondence.\" Counsel further stated that\n\n [t]he discovery served by plaintiffs seeks information and documents dating\n back many decades, much of which is not [sic] longer maintained in\n company records by virtue of the Records Management Policy and by\n attrition given the passage of time and the retirement or deaths of persons\n employed by [Avco] over the years.\n\nThe declaration did not specify the discovery requests or types of documents to which the\n\npolicy applied.\n\n Avco did not provide the actual policy to the court for another 16 months, when it\n\npresented a copy of the policy for Judge Benton to review at the sanctions hearing.\n\nCounsel again stated that the policy \"has retention periods for various categories of\n\ndocuments.\" As an example, counsel pointed out that the 2005 e-mails would not have\n\nbeen maintained past a certain number of years.5 Judge Benton examined the policy and\n\nfound that it was \"vague in many ways .... I'm not satisfied, looking at the exhibits\n\nprovided today, that some of the documents requested by the plaintiff couldn't have been\n\nproduced.\"\n\n\n\n\n 5The records management policy was protected by a pretrial stipulation. Counsel\ndid not state on the record the number of years that correspondence would be retained\nand instead pointed the trial court to the relevant portion of the written policy.\n\n 14\n\fNo. 70756-6-1/15\n\n\n\n\n The records management policy is not part of the record on appeal,6 so we are\n\nunable to independently review its language. On the record before us, however, it was\n\nnot an abuse of discretion to reject the policy as an excuse for nonproduction. The scope\ni\n\n\nand operation of the policy is unclear and unsupported. Avco's attorney declarations and\n\npleadings do not explain how the policy applies to the \"various categories\" of documents\n\nrequested. Avco did not submit any other evidence, such as employee affidavits, about\n\nhow the policy applied to the requested documents and their destruction. As the trial\n\ncourt noted, it would require a \"leap of faith\" to conclude that the policy covered the\n\nevidence in question here.\n\n Avco also committed violations of the contempt order unrelated to its records\n\nManagement policy. It failed to comply with Judge Spector's order that it produce and\n|\n i\n\n\nidentify by Bates stamp every document that was responsive to every interrogatory or\nrequest for production. Instead, Avco produced and referred to 694 pages of Bates\nstamped documents and \"other business records.\"7 The plaintiffs determined that nearly\nall ofthe Bates stamped documents were unrelated to the information sought. Avco also\nmaintained that it made relevant documents available for inspection in Pennsylvania. But,\n\nwhen Becker's counsel went to Pennsylvania, no responsive documents were identified,\n\nlet alone Bates numbered. Counsel was shown a room wherein he estimated that roughly\n\n\n 6The record on appeal contains nearly 18,000 pages of clerk's papers, our review\nof which did not reveal a copy of the records management policy. Neither party cites to\nthe policy. Avco cites to its trial counsel's declarations, wherein counsel stated that the\npolicy existed. But, the policy was not attached to those declarations. And, in Avco's\nfinal motion to the trial court, Avco stated that the policy was \"provided\" to the plaintiffs\nand \"shown\" to the court\u2014not entered into the record.\n 7 The \"other business records\" appear to be over 6,000 pages of Bates stamped\ndocuments that were not specifically identified.\n\n 15\n\fNo. 70756-6-1/16\n\n\n\n\n60 boxes were assembled to be searched. He was not permitted to search them at that\n\ntime. But, he observed that two of the files were labeled \"Moffett,\" the name of an Avco\n\n0mployee and witness in the case. When counsel was later permitted to review the\n\ndocuments, he saw that some files\u2014including the Moffett boxes\u2014had been removed.\n\nHe determined that the remaining files were unrelated to the discovery inthis case. Judge\n\nBenton found that this was nonresponsive to Judge Spector's order and observed that\n\nthere was a \"pattern here.\"\n\n Failure to comply was even evident with records admittedly in Avco's possession.\n\nThe plaintiffs requested a copy of Avco's insurance policy covering their claims against\n\nAvco. Avco had not produced the insurance policy as of the day of trial. When Judge\n\nBenton asked counsel why it had not been produced, counsel identified no impediment\n\npreventing her from doing so. Instead, she responded that she made the policy \"available\n\nfor inspection\" and that it was \"sitting in my office.\"\n\n Avco did not comply with the original contempt order. On this record, it was not an\n\nabuse for the court to conclude that Avco did not provide a reasonable excuse for its\n\nnonproduction. Therefore, the trial court did not abuse its discretion in finding that the\n\nviolation of the discovery order was willful.\n\n B. Prejudice\n\n The trial court found that Avco's \"discovery violations caused the Plaintiffs\n\nsubstantial prejudice in conducting discovery of this case, in preparation for trial and for\n\ntrial of this case.\" As a result of Avco's nonproduction, the court found that: (1) the\n\nplaintiffs were unable to properly depose Avco's liability lay and expert witnesses; (2) the\n\nplaintiffs did not have the requisite documents to present at trial; and (3) the prejudice\n\n\n 16\n\fNo. 70756-6-1/17\n\n\n\n\nwas even more pronounced due to Avco's continued contempt over more than 16 months.\n\nThese findings are supported by the record.\n\n In Magana, the trial court likewise sanctioned a defendant for withholding\n\nrequested discovery and hindering the plaintiff's ability to present crucial evidence at trial.\n\nSee 167 Wn.2d at 581-82. Magana was seriously injured in a car accident and sued the\n\ncarmaker, Hyundai, jd. at 576-77. Magana's theory was that there was a design defect\n\nin the car seat, and he sought discovery about other accidents involving that particular\n\nseat design. Id. at 577. Hyundai responded that there were no lawsuits or claims in\n\nconnection with that design. Id. at 577-78. At trial, the jury found in favor of Magana and\n\nawarded over $8 million in damages, jd. at 578. Hyundai appealed on an evidentiary\n\nissue and was awarded a retrial solely on the issue of liability, id. at 578-79.\n\n Prior to the second trial, Magana requested updated discovery about accidents\n\ninvolving the particular seat design. Id. at 579. When Hyundai resisted, the trial court\n\nOrdered production of all discovery involving consumer complaints and lawsuits involving\n\nallegations of seat back failure. Id. at 580. Hyundai then produced numerous documents\n\nrelated to seat back failure, including nine reports involving the same model of car in\n\nMagana's accident. Id. at 580. As a sanction, the trial court imposed a default judgment\n\nagainst Hyundai. Jd. at 581-82. The Washington Supreme Court affirmed. Id. at 593-94.\n\nRegarding the prejudice prong, the court noted that the sole remaining issue was\n\nHyundai's liability, and Hyundai suppressed evidence relevant to Magana's claims on that\n\nissue. !g\\at589.\n\n Avco maintains that Crews was not prejudiced, because he obtained the sensitive\n\ne-mails from Precision. But, as Crews points out, he was not provided the attachment\n\n\n 17\n\fNo. 70756-6-1/18\n\n\n\nreferenced in the e-mails. Moreover, based on discovery obtained from Precision as well\n\nas deposition testimony from Avco's own employees, Crews asserted that Avco withheld\n\nmultiple other pieces of relevant discovery: reports about Delrin float leaks, information\n\nabout a previous Avco accident investigation involving the same model float,\n\ncommunication between Avco and the FAA regarding the floats, and information about\n\nweekly phone meetings between Precision and Avco about the leaking Delrin floats.\n\n In Magana, Hyundai produced incident reports 45-75 days prior to retrial, jd. at\n\n579-80. Here the documents were not produced at all. Avco disputes the existence of\n\nthe requested discovery. However, the e-mail chain with Precision clearly showed that\n\nsome of the discovery sought had existed and would have demonstrated that Avco was\n\naware of problems with the Delrin floats and had at least some degree of involvement\n\nwith them. And, Crews offered evidence\u2014based in part on Avco employee testimony\u2014\n\nthat more information was out there.\n\n Here, as in Magana, the withheld information goes straight to the plaintiff's theory\n\nof liability. The prejudice is at least as great as in Magana.\n\n The trial court did not abuse its discretion in finding that Avco's discovery violation\n\nprejudiced Crews's preparation for trial and presentation of his case.\n\n C. Lesser Sanctions\n\n The trial court explicitly considered several lesser sanctions. At that time, trial was\n\nbeginning, and it was too late to coerce compliance.\n\n The trial court found that, although monetary damages could compensate Crews,\n\nthey would not adequately punish, deter, or educate. This was reasonable. Judge\n\n\n\n\n 18\n\fNo. 70756-6-1/19\n\n\n\n\nSpector had imposed monetary sanctions against Avco on three prior occasions8 and\n\nAvco still did not comply with the discovery orders.\n\n The court also found that limiting Avco's presentation of evidence would not\n\nalleviate the prejudice to Crews in his ability to meet his burden of proof. Avco's\n\nnonproduction hindered Crews's ability to properly depose witnesses and present\n\nevidence at trial, preventing him from establishing a case against Avco. Restricting\n\nAvco's evidence would not remedy this harm.\n\n Instead, the court deemed all plaintiffs' claims admitted, struck all of Avco's\n\ndefenses, and awarded punitive damages in an amount to be determined by the jury. The\n\nStricken defenses included lack of involvement with the carburetor or float, compliance\n\nwith federal regulations, the federal statute of repose, comparative fault, the unavailability\n\nof punitive damages, and offset of amounts recovered from other defendants. In addition,\n\nAvco was prohibited from asserting pilot error. The court found that this served to\n\n advance the important due process goals of insuring fair trials for all\n parties[,] of punishing a party for violations of long standing court orders, of\n deterring other parties from acting as [Avco] has in this case, of educating\n the party litigants, bench, bar, and the public about the importance of\n complying with discovery obligations and court orders, and in compensating\n the parties who are prejudiced by this conduct.\n\n The trial court made the required consideration of lesser sanctions on the record.\n\nWe find that itdid not abuse its discretion in rejecting the claim that lesser sanctions would\n\nbe adequate for a fair trial. Nor did the trial court abuse its discretion by determining that\n\n\n\n\n 8 Judge Spector awarded the plaintiffs costs and fees for bringing their motions to\ncompel and motions for contempt and for responding to Avco's motion to amend or vacate\nthe contempt orders. Master Kallas ordered Avco to pay $18,683.58 in costs and fees\nassociated with those motions and further provided that Avco bore the Discovery Master's\nexpenses for considering the motion for costs and fees.\n\n 19\n\fNo. 70756-6-1/20\n\n\n\n\nthe focus of the contempt had moved beyond compliance with the contempt order and on\n\nto punishment and deterrence.\n\n D. Challenges to Specific Sanction Provisions\n\n 1. Striking Federal Defenses\n\n Avco asserts that the trial court erred in precluding Avco from asserting its federal\n\ndefenses.9 Avco maintains that it did not manufacture or install the carburetor float and\n\ncannot be held liable for the float under federal law. Essentially, Avco asks us to\n\ndetermine that, as a matter of law, it was not liable under federal regulations. That\n\nquestion is not properly before this court. The trial court struck Avco's federal defenses\n\nas a sanction for its discovery violations. Therefore, we do not ask whether the trial court\n\narrived at the proper legal conclusion, but whether the court acted within its discretion in\n\nimposing the sanction.\n\n Crews asserted that Avco was liable for a defective and unsafe product and failed\n\nto warn the FAA or aircraft owners and operators, in violation of several federal\n\nregulations. Avco withheld information that it knew aboutthefaulty float before the subject\naccident and was involved in communication and investigation as to the defect. This was\n\nrelevant to its involvement with the float and its failure to warn and therefore relevant to\n\nits failure to comply with federal regulations. Avco's discovery violations thus prejudiced\nthe plaintiffs' ability to litigate Avco's liability under the federal regulations. Striking Avco's\n\n\n 9 Crews asserts that Avco failed to preserve its defenses by failing to respond to\nhis third amended complaint. But, in Avco's answer to Crews's earlier complaint, it\nalleged defenses that were relevant to the claims in Crews's amended complaint. This\nwas sufficient to preserve the defenses. See Durvea v. Wilson, 135Wn. App. 233, 239,\n144 P.3d 318 (2006) (finding defenses preserved where answer to original complaint was\nsufficient to indicate grounds on which defendant intended to defend).\n\n 20\n\fNo. 70756-6-1/21\n\n\n\n\nfederal defenses served to deter such conduct, prevent Avco from benefitting from\n\nwithholding the information necessary to prove Crews's case, compensate Crews for the\n\nconsequences of withholding that information, and punish Avco.\n\n This sanction was tailored to Avco's violation and was not an abuse of discretion.10\n\n 2. Striking Comparative Fault Defense\n\n Avco contends that the trial court abused its discretion in striking Avco's\n\ncomparative fault defense. The court found that merely establishing certain facts, such\n\nas Avco's liability, would \"still prejudice the plaintiffs in their ability to prove the elements\n\nof their case.\" The court stated that it would not instruct the jury to determine whether\n\nany other parties are at fault, because it would \"prejudice plaintiffs' ability to prove that\n\n[Avco] is solely liable for their injuries and damages.\" The court further stated that itwould\n\nnot instruct the jury on the pilot's fault, because \"it would be prejudicial to plaintiff Crews\n\nto ask the juryto compare the negligence or liability of the acts of [Avco] to those of plaintiff\n\nCrews given the discovery violation.\" Instead, the court instructed the jury that Avco's\n\nviolation of federal regulations was a proximate cause of the crash and that Avco was\n\nliable to each plaintiff.\n\n Avco asserts that this was an abuse of discretion, because the comparative fault\n\ndefense was unrelated to the withheld discovery. Avco maintains that striking this\n\n 10 Furthermore, it is unclear that Avco's federal statute of repose defense is\nrelevant. Under the General Aviation Revitalization Act of 1994 (GARA), Pub. L. No. 103-\n298, 108 Stat. 1552 (codified at 49 U.S.C. \u00a7 40101 note), manufacturers of general\naviation aircraft and parts are not liable for damages arising out of an accident occurring\n18 years or more after the date of delivery of the aircraft to its first purchaser or lessee.\nGARA \u00a7 2(a)(1). Avco notes that it built and sold the plane's engine in 1978, meaning\nthe engine is covered by the 18 year period of repose. But, the original engine is not in\nquestion here\u2014it is the replacement carburetor that allegedly failed. The carburetor was\nbuilt in 1999. The statute has not triggered as to the carburetor.\n\n\n 21\n\fNo. 70756-6-1/22\n\n\n\n\ndefense goes a step further than Magana, where the sole issue was the defendant's\n\nliability. Here, Avco notes, the parties also disputed whether the negligence of other\n\ndefendants or the pilot was a proximate cause of the crash.\n\n Avco is correct that this case is more procedurally complicated than Magana.\n\nCrews sued 11 defendants in total. By the time of trial, Crews had dismissed and/or\n\nsettled with many of the defendants. Avco counterclaimed against Crews, alleging pilot\n\nerror. Becker named Houston's estate as a defendant, also alleging potential pilot error.\n\nContrary to Avco's position, however, we find that this complicated posture lends support\n\nfor the propriety of striking the comparative fault defense.\n\n Avco's discovery violations prejudiced Crews's ability to establish Avco's true role\n\nin the plane crash. This affected the allocation of liability to Avco and among the\n\ndefendants. This violation could have allowed the jury to undervalue Avco's portion of\n\nfault. And, establishing pilot negligence could have defeated joint and several liability,\n\nthereby shifting liability away from Avco. See RCW 4.22.070(1 )(b); Kottler v. State, 136\n\nWn.2d 437, 446-47, 963 P.2d 834 (1998). Striking the comparative fault defense\n\nprevented Avco from benefitting from its discovery violations in this way.\n\n Avco challenges the trial court's conclusion that it would have been insufficient to\n\nmerely establish Avco's liability, so this sanction was necessary. Crews counters that it\n\nwould cause severe prejudice if the jury were to \"apportion fault between Houston and\n\nAvco based on a trial solely about Houston's alleged negligence and a one-page\n\ninstruction that Avco was liable.\" It is reasonable, not an abuse of discretion, to accept\n\nthat Crews would suffer prejudice ifthe jury heard evidence of pilot error throughout trial,\n\nbut evidence of Avco's fault only from a paragraph long jury instruction. Again, this could\n\n\n 22\n\fNo. 70756-6-1/23\n\n\n\nlead the jury to misallocate fault between Crews and Avco, allowing Avco to benefit from\nits discovery violations.\n\n Avco further maintains that this was not the least severe sanction necessary to\n\ncure any prejudice Crews suffered. But, Fisons instructs us that the trial court should\n\nimpose the least severe sanction that is adequate to \"serve the purpose of the particular\n\nsanction.\" 122 Wn.2d at 355-56 (emphasis added). Discovery sanctions serve not only\n\nto compensate, but to educate, punish, and deter. Id. at 356. And, the trial court's choice\n\nof sanction is a matter of discretion\u2014there is no bright line rule dictating which rationale\n\napplies to which violation. Judge Benton stated that she was \"truly troubled\" by Avco's\n\nconduct, and her rationales for imposing sanctions included \"punishing [Avco] for\n\nviolations of long standing court orders.\" On the eve of trial, it was too late for compliance.\n\nFinancial sanctions would not adequately compensate Crews. Punishment and\n\ndeterrence were particularly valid purposes to be served by sanctions.\n\n It was not an abuse of discretion to strike Avco's comparative fault defense.\n\n 3. Imposing Punitive Damages\n\n Avco asserts that the trial court erred in imposing punitive damages. Avco first\n\nargues that it could not be held liable under either Washington or Pennsylvania law. This\n\nquestion, like Avco's liability under federal law, is not properly before this court. See\n\nsupra, at 20-21. This is because the trial court determined Avco's liability by deeming the\n\npleadings admitted as a sanction for Avco's discovery violations.\n\n Avco further contends that the trial court failed to perform a choice of law analysis\n\nand determine that Pennsylvania law applies. When the transactions at issue did not all\n\noccur in Washington, the court must determine which state's law applies to the claims.\n\n\n 23\n\fNo. 70756-6-1/24\n\n\n\nFutureSelect Portfolio Mgmt., Inc. v. Tremont Grp. Holdings, Inc.. 175 Wn. App. 840, 856,\n\n309 P.3d 555 (2013), affd, 180 Wn.2d 954, 331 P.3d 29 (2014). Here, the trial court\n\napplied Pennsylvania law with respect to punitive damages and did not conduct a formal\n\nchoice of law analysis on the record. But, that is not fatal here.\n\n Crews asserted that Avco committed outrageous and reckless conduct when it\n\nknowingly concealed and withheld its knowledge that the floats were faulty, creating an\n\nunreasonable risk of death or severe injury. Crews further asserted that Pennsylvania\n\nhad the most significant contacts with the underlying accident: \"[Avco's] principal place of\n\nbusiness i[s] Pennsylvania. . . . [Avco] designs, manufactures, sells, and places into the\n\nstream of commerce reciprocating aircraft engines, including carburetors, and provides\n\ncontinuing information and services to aircraft owners and operators in support of [Avco]\n\nengines, from its Williamsport, Pennsylvania facilities.\" Because these allegations were\n\ndeemed admitted as a sanction, it was uncontested that Pennsylvania law applied as to\n\npunitive damages.\n\n This sanction was tailored to Avco's violation. In Pennsylvania, punitive damages\n\nare available \"when a person's actions are of such an outrageous nature as to\n\ndemonstrate intentional, willful, wanton or reckless conduct.\" SHV Coal, Inc. v. C'nt'l\n\nGrain Co., 526 Pa. 489, 493, 587 A.2d 702 (1991). Therefore, Crews argued, evidence\n\nof Avco's knowledge about the faulty floats was highly relevant to punitive damages. The\n\ntrial court found that Avco's noncompliance substantially prejudiced the plaintiffs'\n\npresentation of evidence on punitive damages at trial. In deeming the pleadings admitted,\n\nthe sanction made punitive damages available to be proved. This deprived Avco of the\n\n\n\n\n 24\n\fNo. 70756-6-1/25\n\n\n\nbenefit of withholding information about its conduct and compensated Crews for the lack\n\nof that information.\n\n The trial court did not err in failing to conduct a choice of law analysis. It was not\n\nan abuse of discretion to allow punitive damages under these pleadings as deemed\n\nadmitted.\n\n\n 4. Denying Offset\n\n Finally, Avco argues that the trial court erred in denying it an offset of settlement\n\namounts Crews received from other defendants. Avco asserted offset as an affirmative\n\ndefense. The discovery sanctions order struck all defenses. However, after the court\n\nimposed sanctions and after trial, the parties stipulated to a reduction in judgment based\n\non Crews's settlements with two other defendants. The trial court then entered final\n\njudgment without providing for the reduction. The court denied Avco's subsequent motion\n\nto amend the judgment to reflect the parties' stipulation.11\n\n In sanctioning Avco, the court prohibited it from arguing that other parties were at\n\nfault, reasoning that it would prejudice the plaintiffs' ability to prove that Avco was solely\n\nliable. The discovery sanctions order did not provide a separate reason for striking Avco's\n\noffset defense. Having ensured that judgment would be entered against Avco for the full\n\namount of damages proven, the trial court eliminated benefit to Avco from any willful\n\nwithholding of discovery. Crews was entitled to a single recovery. See RCW 4.22.060(2).\n\nAvco was statutorily entitled to have its liability reduced by the amount Crews had already\n\nreceived. See RCW 4.22.060(2). Denying Avco's statutory right to offset for settlements\n\n\n\n 11 As of oral argument, the parties had not filed a partial satisfaction of judgment\nto fulfill their stipulation.\n\n\n 25\n\fNo. 70756-6-1/26\n\n\n\nwith other defendants was not necessary to punish the discovery violation or to protect\n\nthe plaintiffs' recovery. The parties recognized this in their posttrial stipulation. We are\n\npersuaded that it was an abuse of discretion to disregard the statute and the parties'\n\nstipulation.\n\n Because it was an abuse of discretion to deny offset of settlement amounts, we\n\nremand for amendment of the final judgment to reflect any offsets authorized pursuant to\n\nchapter 4.22 RCW. We otherwise affirm.\n\n\n\n\nWE CONCUR:\n\n\n\n\n s-*_- A. >Mn+ &X.J\".\n\n\n\n\n 26\n\f"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 01-7236\n\n\n\nUNITED STATES OF AMERICA,\n\n Plaintiff - Appellee,\n\n versus\n\n\nWILLIE DAVID BROWN,\n\n Defendant - Appellant.\n\n\n\nAppeal from the United States District Court for the Western\nDistrict of North Carolina, at Charlotte. Richard L. Voorhees,\nDistrict Judge. (CR-93-264-P, CA-01-348-3-V)\n\n\nSubmitted: December 20, 2001 Decided: December 28, 2001\n\n\nBefore LUTTIG, TRAXLER, and GREGORY, Circuit Judges.\n\n\nDismissed by unpublished per curiam opinion.\n\n\nWillie David Brown, Appellant Pro Se.\n\n\nUnpublished opinions are not binding precedent in this circuit.\nSee Local Rule 36(c).\n\fPER CURIAM:\n\n Willie David Brown appeals the district court\u2019s order denying\n\nhis motion filed under 28 U.S.C.A. \u00a7 2255 (West Supp. 2001). We\n\nhave reviewed the record and the district court\u2019s opinion and find\n\nno reversible error. Accordingly, we deny a certificate of ap-\n\npealability and dismiss the appeal on the reasoning of the district\n\ncourt. See United States v. Brown, Nos. CR-93-264-P; CA-01-348-3-V\n\n(W.D.N.C. filed July 3, 2001; entered July 9, 2001). We further\n\ndeny Brown\u2019s motion for the appointment of counsel. We dispense\n\nwith oral argument because the facts and legal contentions are\n\nadequately presented in the materials before the court and argument\n\nwould not aid the decisional process.\n\n\n\n\n DISMISSED\n\n\n\n\n 2\n\f"} -{"text": "[Cite as State v. Blair, 2012-Ohio-1847.]\n\n\n\n\n IN THE COURT OF APPEALS FOR MONTGOMERY COUNTY, OHIO\n\nSTATE OF OHIO :\n\n Plaintiff-Appellee : C.A. CASE NO. 24784\n\nv. : T.C. NO. 11 CRB 773\n\nJEREMY L. BLAIR : (Criminal appeal from\n Municipal Court)\n Defendant-Appellant :\n\n :\n\n ..........\n\n OPINION\n\n Rendered on the 27th day of April , 2012.\n\n ..........\n\nROBERT B. COUGHLIN, Atty. Reg. No. 0003449, 6111 Taylorsville Road, Huber Heights,\nOhio 45424\n Attorney for Plaintiff-Appellee\n\nKATHRYN L. BOWLING, Atty. Reg. No. 0084442, 111 W. First Street, Suite 518, Dayton,\nOhio 45402\n Attorney for Defendant-Appellant\n\n ..........\n\nFROELICH, J.\n\n {\u00b6 1} Following a bench trial, Jeremy Blair was found guilty of disorderly\n\f 2\n\nconduct, in violation of R.C. 2917.11(A)(2), and of resisting arrest, in violation of R.C.\n\n2921.33(A). On the charge of disorderly conduct, he was fined $150, with $100 suspended.\n\nOn the charge of resisting arrest, he was sentenced to thirty days in jail, with twenty days\n\nsuspended, and he was fined $250, with $200 suspended. He appeals from his conviction.\n\nHe sought a stay of execution of his sentence in the trial court, but his request was denied.1\n\n {\u00b6 2} The State presented the following evidence about the bases for the charges\n\nagainst Blair. Blair\u2019s actions will be discussed in greater detail under the assignment of\n\nerror.\n\n {\u00b6 3} On May 28, 2011, Blair was involved in an altercation with Chris Lewis, at\n\nthe home of Lewis\u2019s family on Mill Ridge Road in Huber Heights. When police officers\n\narrived, Blair berated them and Lewis\u2019s family with abusive language and insults for thirty\n\nminutes to an hour, while the officers repeatedly attempted to calm him down. One of the\n\nofficers eventually decided to arrest Blair, and Blair resisted arrest by struggling with the\n\nofficer. Blair was cited for disorderly conduct and resisting arrest.\n\n {\u00b6 4} At trial, Lewis\u2019s brother and two police officers testified for the State; the\n\ndefense did not call any witnesses. Blair made a Crim.R. 29(A) motion for acquittal on\n\nboth charges at the close of the State\u2019s case, which was overruled. Blair was found guilty\n\non both charges and sentenced as described above.\n\n {\u00b6 5} Blair raises one assignment of error on appeal, which states:\n\n THE TRIAL COURT ERRED IN DENYING APPELLANT\u2019S MOTION\n\n\n 1\n Blair\u2019s request for a stay demonstrates that he did not voluntarily serve his sentence and, therefore, that his appeal is\n not moot due to voluntary satisfaction of the judgment. See Lammers v. Caltrider, 2d Dist. Montgomery No. 21565,\n 2007-Ohio-1745, \u00b6 5, citing State v. Miller, 9th Dist. Summit No. 23240, 2007-Ohio-370, \u00b6 18.\n\f 3\n\n FOR A RULE 29 ACQUITTAL, AS THE STATE FAILED TO SHOW\n\n THAT THE ARREST WHICH APPELLANT \u201cRESISTED\u201d WAS A\n\n LAWFUL ARREST.\n\n {\u00b6 6} Blair contends that his arrest for resisting arrest was unlawful because his\n\nbehavior did not constitute disorderly conduct and, as such, the officers did not have a lawful\n\nbasis to arrest him. He also claims that his Crim.R. 29 motion for acquittal should have\n\nbeen granted.\n\n {\u00b6 7} When reviewing the denial of a Crim.R. 29(A) motion, an appellate court\n\napplies the same standard as is used to review a sufficiency of the evidence claim. State v.\n\nThaler, 2d Dist. Montgomery No. 22578, 2008-Ohio-5525, \u00b6 14. \u201cA sufficiency of the\n\nevidence argument disputes whether the State has presented adequate evidence on each\n\nelement of the offense to allow the case to go to the jury or sustain the verdict as a matter of\n\nlaw.\u201d State v. Wilson, 2d Dist. Montgomery No. 22581, 2009-Ohio-525, \u00b6 10, citing State\n\nv. Thompkins, 78 Ohio St.3d 380, 386, 1997-Ohio-52, 678 N.E.2d 541 (1997). When\n\nreviewing whether the State has presented sufficient evidence to support a conviction, the\n\nrelevant inquiry is whether any rational finder of fact, after viewing the evidence in a light\n\nmost favorable to the State, could have found the essential elements of the crime proven\n\nbeyond a reasonable doubt. State v. Dennis, 79 Ohio St.3d 421, 430, 683 N.E.2d 1096\n\n(1997). A guilty verdict will not be disturbed on appeal unless \u201creasonable minds could not\n\nreach the conclusion reached by the trier-of-fact.\u201d Id.\n\n {\u00b6 8} Resisting arrest is defined at R.C. 2921.33(A), which states that \u201c[n]o\n\nperson, recklessly or by force, shall resist or interfere with a lawful arrest of himself or\n\f 4\n\nanother.\u201d \u201cAlthough the arrest must be \u2018lawful,\u2019 it is not necessary for the state to prove\n\nthat the defendant was in fact guilty of the offense for which the arrest was made to uphold a\n\nconviction for resisting arrest. State v. Hurst, 1st Dist. Hamilton No. C-880706, 1989 WL\n\n140010 (Nov. 22, 1989). An arrest is \u2018lawful\u2019 if the surrounding circumstances would give\n\na reasonable police officer cause to believe that an offense has been or is being committed.\n\nId.; Parma Heights v. Kaplan, 8th Dist. Cuyahoga No. 55108, 1989 WL 30584 (Mar. 30,\n\n1989).\u201d State v. Sansalone, 71 Ohio App.3d 284, 285-286, 593 N.E.2d 390 (1st Dist.1991).\n\n\n\n {\u00b6 9} The citation charged Blair with disorderly conduct in violation of R.C.\n\n2917.11(A)(2), which states: \u201cNo person shall recklessly cause inconvenience, annoyance, or\n\nalarm to another by * * * making unreasonable noise or an offensively coarse utterance,\n\ngesture, or display or communicating unwarranted and grossly abusive language to any\n\nperson.\u201d The disorderly conduct statute has long been interpreted to require that a\n\nreasonable person \u201cwould find the defendant\u2019s \u2018language and conduct annoying or alarming\n\nand would be provoked to want to respond violently.\u2019\u201d (Internal citations omitted.) Gessner\n\nv. Schroeder, 2d Dist. Montgomery No. 21498, 2007-Ohio-570, \u00b6 38, citing Warren v.\n\nPatrone, 74 Ohio App.3d 595, 600 N.E.2d 344 (11th Dist.1991). See, also, State v.\n\nHoffman, 57 Ohio St.2d 129, 387 N.E.2d 239 (1979); State v. Glenn, 1st Dist. Hamiltion\n\nNo. C-030356, 2004-Ohio-1489, \u00b6 25. The test is objective and focuses on whether, under\n\nthe circumstances, it is probable that a reasonable person would find the accused\u2019s language\n\nand conduct annoying or alarming and would be provoked to want to respond violently; a\n\nperson need not actually be provoked to a violent response. Sansalone at 286.\n\f 5\n\n {\u00b6 10} Blair contends that his arrest was unlawful for two reasons: 1) the officers\n\nwere not provoked to respond violently toward him and did not feel threatened by him, and\n\nthus were unjustified in arresting him, and 2) arrest was not permitted for this offense\n\nbecause it was a minor misdemeanor.\n\n {\u00b6 11} Huber Heights Police Officers Scott Short and Robert Bluma testified for\n\nthe State. They responded to a house on Mill Ridge Road on the night of May 28, 2011,\n\ndue to a report of a \u201cdisorderly subject at the residence.\u201d Upon investigation, they\n\ndiscovered that Blair had been involved in a physical and verbal altercation with his friend,\n\nChris Lewis, whose family lived at the residence. Blair had called the police. Both Lewis\n\nand Blair had been drinking, and Lewis left the home before the officers arrived. Blair was\n\ncursing loudly and disruptively.\n\n {\u00b6 12} The officers attempted to calm Blair for thirty minutes to an hour; Blair\n\nwould appear to calm down, but then become agitated again. Blair was \u201cbelligerent and\n\ndisorderly\u201d during this period, calling the officers \u201cf***ing pigs\u201d2 who did not know how to\n\ndo \u201ctheir f***ing jobs,\u201d and claiming that the laws of Montgomery County did not apply to\n\nhim because he lived elsewhere. Blair was also cursing at Lewis\u2019s family members, who\n\nwere sitting outside their home. Blair told the officers that he was waiting for a ride from\n\nsomeone who was coming from Washington Courthouse, so the officers \u201ctried to be\n\npatient,\u201d but the owners of the home wanted Blair off of their property and the officers had\n\nother calls waiting, including some priority calls. According to the officers\u2019 testimony,\n\nBlair was arrested because he continued to curse after the officers had repeatedly asked him\n\n\n 2\n We have modified some of the offensive language contained in the transcript.\n\f 6\n\nto stop, and because he intended to walk to Rite Aid, despite the officers\u2019 instructions that he\n\nshould wait for his ride at his current location, since he was too intoxicated \u201cto walk on his\n\nown.\u201d\n\n {\u00b6 13} Although the officers found Blair\u2019s conduct annoying and unpleasant, they\n\ntestified that they did not feel threatened by him and that tolerating such behavior was part of\n\ntheir job. Sean Lewis, Chris\u2019s brother, also testified that Blair was yelling in a loud voice\n\nand cursing for approximately half an hour.\n\n {\u00b6 14} The officers asked Blair to step off of the Lewises\u2019 property while he\n\nwaited for his ride. As they were preparing to clear the call and leave, Blair again started to\n\nyell at them and call them names. Officer Scott also testified that Blair wanted to walk to a\n\nRite-Aid, which he was in no condition to safely accomplish because of his intoxication.\n\nOfficer Bluma decided to arrest Blair. It is undisputed that Blair struggled with Bluma and\n\nresisted his arrest.\n\n {\u00b6 15} Blair contends that his arrest was unlawful, and therefore he did not resist a\n\nlawful arrest. However, the officers\u2019 testimony, which was unrefuted, established that Blair\n\nhad, at the very least, recklessly caused inconvenience and annoyance to the officers and his\n\nfriend\u2019s family members by making \u201cunreasonable noise\u201d or \u201coffensively coarse\n\nutterance[s]\u201d over an extended period of time. Because of the length and nature of Blair\u2019s\n\ndiatribe, directed at both the officers and the residents, and the fact that Blair had no safe\n\nmeans of leaving the premises, the officers could have reasonably concluded that Blair\u2019s\n\nconduct and language would provoke someone to respond violently if it were allowed to\n\ncontinue and that it was lawful to arrest him. Further, the statute does not require that the\n\f 7\n\nofficers were actually provoked to violence, but that a reasonable person would be provoked.\n\n Sansalone, 71 Ohio App.3d 284, 286, 593 N.E.2d 390. In other words, there was evidence\n\nfrom which a rational factfinder could have concluded that Blair had engaged in disorderly\n\nconduct. His Crim.R. 29 motion for acquittal was properly denied.\n\n {\u00b6 16} Moreover, under the circumstances presented, Blair\u2019s arrest for disorderly\n\nconduct was justified, even though the offense is, in many circumstances, a minor\n\nmisdemeanor for which a citation is issued. See R.C. 2917.11(E)(2); R.C. 2935.26. R.C.\n\n2917.11(E)(3)(a) provides that disorderly conduct is a misdemeanor of the fourth degree if\n\nthe \u201coffender persists in disorderly conduct after reasonable warning or request to desist.\u201d\n\nThe officers testified that, over the course of thirty minutes to an hour, they had repeatedly\n\ninstructed Blair to stop his abusive and disruptive behavior. The officers could have\n\nreasonably concluded that they were permitted to arrest Blair for his failure to desist because\n\nhis offense was a misdemeanor of the fourth degree, rather than a minor misdemeanor.3\n\nThus, the arrest was lawful as that term is used in the resisting arrest statute.\n\n {\u00b6 17} Further, R.C. 2935.26 states that a person may be arrested, rather than\n\nissued a citation, for a minor misdemeanor if the offender \u201cis unable to provide for his own\n\nsafety.\u201d Officer Scott testified that Blair was intoxicated, that Blair was attempting to leave\n\nthe scene to walk to a Rite-Aid store, and that he would have been unable to complete such a\n\nwalk safely. This testimony justified Blair\u2019s arrest, even if his conduct were classified as a\n\nminor misdemeanor.\n\n\n 3\n Neither the citation nor the probable cause determination sets forth the degree of the disorderly conduct offense,\n although the narrative report stated that Blair \u201cdid persist using loudly vulgar language in public after multiple warnings.\u201d The\n termination entry refers to it as a minor misdemeanor.\n\f 8\n\n {\u00b6 18} We have concluded that Blair\u2019s arrest was not an unlawful arrest, and he\n\nhas asserted no other bases to challenge his conviction for resisting arrest.\n\n {\u00b6 19} The assignment of error is overruled.\n\n {\u00b6 20} The judgment of the trial court will be affirmed.\n\n ..........\n\nHALL, J. and FISCHER, J., concur.\n\n(Hon. Patrick F. Fischer, First District Court of Appeals, sitting by assignment of the Chief\nJustice of the Supreme Court of Ohio).\n\n\nCopies mailed to:\n\nRobert B. Coughlin\nKathryn L. Bowling\nHon. James D. Piergies\n\f"} -{"text": "760 F.2d 102\nRobert SMITH, Jr., Plaintiff-Appellant,v.Warden James ROSE, et al., Defendants-Appellees.\nNo. 83-5419.\nUnited States Court of Appeals,Sixth Circuit.\nDecided April 19, 1985.Argued Jan. 15, 1985.\n\nRobert Smith, Jr., pro se.\nHarold D. Vick (argued), Newport, for plaintiff-appellant.\nW.J. Michael Cody, Atty. Gen. of Tenn., Nashville, Tenn., Ann Lacy Johns, David Himmelreich (argued), for defendants-appellees.\nBefore LIVELY, Chief Judge, MARTIN and JONES, Circuit Judges.\nLIVELY, Chief Judge.\n\n\n1\nThe plaintiff appeals from summary judgment in favor of all the defendants in this civil rights action. At the time he filed the complaint, plaintiff was serving a life sentence at Tennessee State Prison in Nashville. The defendants are the warden and several officers at the prison.\n\n\n2\nIn addition to introductory material and a conclusion the pro se complaint contains forty-four numbered paragraphs. Giving it the liberal reading required by Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972), the complaint made two distinct claims of deprivation of constitutional rights. First, plaintiff charged that the warden ordered him placed in administrative segregation without cause and that he suffered hardships while so confined. Second, plaintiff charged that the defendants took his personal property, refused to permit him to retrieve it and ultimately disposed of it. After considering the complaint, the defendants' motion to dismiss or to grant summary judgment supported by affidavits, and the plaintiff's response, the district court concluded that neither allegation stated a claim under 42 U.S.C. Sec. 1983 and that there was \"no state of facts upon which plaintiff could conceivably prevail.\" This court appointed counsel for plaintiff on appeal.\n\nI.\nA.\n\n3\nIn December 1981 plaintiff was involved in a work-release program which permitted him to work part time in a restaurant and take classes at a state technical institute. On December 26, 1981 plaintiff was arrested at work by Nashville Metro police officers and charged with aggravated rape, aggravated kidnapping, armed robbery and assault with intent to commit murder. These charges stemmed from an attack on a woman the previous day in the area of his workplace. When plaintiff was returned to Tennessee State Prison on December 28 the defendant Warden Rose placed him in administrative segregation and recommended that he be confined there \"for the security of the institution.\" A disciplinary board hearing was held the following day to review the warden's recommendation. Plaintiff waived his right to a 24-hour advance notice of the hearing, attended the hearing represented by a resident advisor and made a written statement. The disciplinary board concurred in the warden's recommendation and plaintiff was kept in administrative segregation until sometime in February 1982.\n\n\n4\nFollowing plaintiff's arrest his personal effects were returned to Tennessee State Prison from the Nashville Community Service Center where plaintiff had been staying while on work release. Metro police officers were permitted to examine the property for evidence related either to the crimes with which plaintiff was charged or to an unrelated murder for which he was being investigated. While the property was being held for this purpose plaintiff was permitted to take personal items not related to the investigation. According to the complaint, on or about April 27, 1982 a prison officer told plaintiff that the \"hold\" had been released and that he had until the following week-end to remove the property from a prison storage room. Plaintiff charges that he talked with Rose and that Rose told him he would extend the time for removal of the property an additional 30 days from April 27th. However, when plaintiff advised the officer in charge of the property room that his time for retrieving the property had been extended, the officer told him that the property already had been donated to a charity. Under prison regulations plaintiff was entitled to a period of 30 days in which to remove property from the property room.\n\nB.\n\n5\nIn the \"conclusion\" of his complaint plaintiff charged that the defendants knew their actions were wrong and \"[t]he plaintiff feels that the officials openly discriminated against the plaintiff because no other person was placed in segregation like the plaintiff was.\" With respect to the deprivation of his property, plaintiff charged in paragraph 44 that the defendants refused to let the plaintiff have the property picked up and disposed of. \"There was no excuse for this action by the defendants and the plaintiff feels that this was done through spite and a conspiracy, because the defendant and his subordenates, [sic] and the Metro police knew that there was evidence in this property to clear the plaintiff of the charges that were brought back up.\"\n\n\n6\nCorrectional officers who worked in the property room stated in affidavits that plaintiff was allowed to take items from his boxes of property on several occasions, that the Metro police officers went through the property early in January 1982 and that they told plaintiff during the second week in January that the property had been released and that he had 30 days to arrange for its removal. According to the affidavits, plaintiff stated that he would have someone pick it up. The property was donated to \"Goodwill\" on April 22, 1982.\n\n\n7\nPlaintiff's response to the motion for summary judgment reiterated the claims of the complaint and charged that the defendants' affidavits contained untruths. He attached affidavits of three correctional officers who stated that they escorted plaintiff to the property room in January and February 1982 while he was confined in segregation, but that he was never permitted to take anything but some shirts and underclothes. None of the affidavits addressed the facts surrounding the disposal of the property. They appear to be intended to support plaintiff's claim that he was denied items of a personal nature while he was in administrative segregation.\n\nII.\nA.\n\n8\nThough he admits the prescribed processes were followed in sending him to administrative segregation, plaintiff argues without specificity that the hearing was a \"hollow show.\" The procedures followed in this case satisfied the requirements set forth by this court in Bills v. Henderson, 631 F.2d 1287 (6th Cir.1980). The plaintiff appears to contend that the prison authorities could not place him in administrative segregation on the basis of state charges which had not resulted in a conviction. He also makes the argument that even if he was properly sent to segregation when first returned to Tennessee State Prison, he should have been released when the charges based on the arrest warrant were dismissed. However, the record is undisputed that the original charges were \"nolle prossed\" only because the victim of the rape and attempted murder was too ill to testify at a preliminary hearing and that the prosecution was never dropped. The matter was presented to a grand jury which indicted plaintiff on the identical charges for which he was originally arrested.\n\n\n9\nChief among the responsibilities of prison officials is security of the prison, and they must have broad discretion in carrying out this responsibility. Bell v. Wolfish, 441 U.S. 520, 546-48, 99 S.Ct. 1861, 1877-79, 60 L.Ed.2d 447 (1979). Involuntary confinement in administrative segregation may be ordered for the general purpose of maintaining institutional security when no specific rule infraction is charged. Bills v. Henderson, 631 F.2d at 1295-96. This limitation on a prisoner's already diminished liberty interest is part of the required \"mutual accommodation between institutional needs and objectives and the provisions of the Constitution that are of general application.\" Wolff v. McDonnell, 418 U.S. 539, 556, 94 S.Ct. 2963, 2975, 41 L.Ed.2d 935 (1974). The immediate return to the general prison population of an inmate who is charged with serious crimes while on work release could reasonably be perceived as likely to create serious institutional problems. It was within the warden's discretion to place the plaintiff in administrative segregation upon his return to the prison and then to convene the disciplinary board the next day. Not only was plaintiff charged with serious offenses, he was also under investigation in connection with a homicide. So long as the prison officials accorded plaintiff his procedural due process rights, he suffered no constitutional deprivation by being placed in administrative segregation.\n\nB.\n\n10\nPlaintiff does not contend that the initial seizure of his personal property was wrongful. The gravamen of his complaint is that, though he tried to retrieve his property on a number of occasions, the defendants did not return it to him, but gave it to a charity. The district court held that this claim was foreclosed by Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981). In that decision the Supreme Court held that a state prisoner's claim that officials had negligently lost his property did not sufficiently allege a violation of the Fourteenth Amendment due process clause. Id. at 537, 101 S.Ct. at 1914. The deprivation in Parratt did not result from \"some established state procedure,\" id. at 543, 101 S.Ct. at 1917, rather, it occurred because of a random act of carelessness. Furthermore, the state provided a remedy for redress of the deprivation and, even though this remedy involved a postdeprivation hearing, it was sufficient to satisfy due process requirements.\n\n\n11\nPlaintiff argues that he charged the defendants with intentional, not negligent, actions which deprived him of property, and therefore Parratt does not control. However, this argument is unavailing in view of the recent decision in Hudson v. Palmer, --- U.S. ----, 104 S.Ct. 3194, 3203, 82 L.Ed.2d 393 (1984). In Hudson the Supreme Court held that the reasoning of Parratt applies to intentional deprivations of property as well as to negligent ones.\n\n\n12\nPlaintiff next contends that even if Parratt applies to an intentional deprivation, his Sec. 1983 claim survives because Tennessee has no postdeprivation remedy for intentional acts of state officials. He relies on Tennessee Code Annotated (T.C.A.) Sec. 9-8-207 which provides for the hearing and determination by a state board of claims of \"claims against the state for injuries or damages caused by the acts or omissions of any officers, members or employees of the state....\" Plaintiff argues that T.C.A. Sec. 9-8-207 permits the board of claims to hear and determine only claims based on negligence and that he consistently characterized the defendants' acts as \"intentional, deliberate and willful\" in his complaint. This court recently held that T.C.A. Sec. 9-8-207 provides \"adequate procedures to assure the return of items either negligently or intentionally converted....\" Brooks v. Dutton, 751 F.2d 197, 199 (6th Cir.1985). Plaintiff argues that Sec. 9-8-207 does not provide him a remedy because it excludes claims based on \"actual fraud, malice or corruption of the officer, member or employee.\" However, plaintiff pled no facts and developed none in response to the motion for summary judgment upon which a finding of actual fraud, malice or corruption could be based. Brooks v. Dutton would have no meaning if every claim of intentional misconduct were equated with actual fraud, malice or corruption. The conclusory claims of plaintiff's complaint provided no basis for holding that he would be without a remedy under Sec. 9-8-207.1\n\n\n13\nWe conclude that this case is within the rule of Parratt v. Taylor. Though plaintiff could not recover the property, he had an adequate remedy in an action before the board of claims for its value. Viewing the complaint and the materials filed by plaintiff in response to the motion for summary judgment most strongly in plaintiff's favor, he was deprived of his property because the defendants, either negligently or intentionally, failed to advise him in a timely manner that the \"hold\" on his property had been released. The conclusory statement in the complaint that plaintiff \"feels\" that his property was disposed of through spite and conspiracy is not supported by factual statements and is not sufficient to state a claim for relief under 42 U.S.C. Sec. 1983. In Place v. Shepherd, 446 F.2d 1239, 1244 (1971), we dealt with the pleading requirements under Sec. 1983 as follows:\n\n\n14\nWe are unable to discern allegations of fact in the foregoing which would justify the broad conclusions asserted. A pleading will not be sufficient to state a cause of action under the Civil Rights Act if its allegations are but conclusions.\n\n\n15\nThis language would have supported a dismissal pursuant to the Rule 12(b)(6) motion of the defendants. However, the district court considered the entire record and granted summary judgment.\n\n\n16\nIf every factual claim made by the plaintiff in this case is accepted as true, the defendants were entitled to judgment as a matter of law. Therefore summary judgment was properly entered in their favor. Rule 56(c), Fed.R.Civ.P. That plaintiff \"felt\" the defendants acted out of spite and pursuant to an agreement was a conclusion only. The plaintiff was able to secure affidavits of three prison officers concerning his efforts to obtain a return of his property while he was still in administrative segregation, but produced no evidence to support his conclusory allegations of spite and conspiracy. At most, the materials produced by the plaintiff show a failure to follow prison rules by notifying him of the availability of his property for removal from the storage room in sufficient time for him to arrange its removal. This was the very type of act which Parratt v. Taylor disallows as the basis of a Sec. 1983 action where the state provides a postdeprivation remedy.\n\n\n17\nThe judgment of the district court is affirmed.\n\n\n18\nNATHANIEL R. JONES, Circuit Judge, concurring in part and dissenting in part.\n\n\n19\nAlthough I agree that administrative segregation did not violate Smith's due process rights, I dissent from the majority's determination that Smith's claim for deprivation of property fails, as a matter of law, because an adequate state remedy was available.\n\n\n20\nIt deserves emphasis that proper analysis begins from the dual premises that we should liberally construe Smith's complaint, Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972), and that we must view all evidence supporting his factual allegations in the light most favorable to Smith on this review of a grant of summary judgment to the defendants. Smith not only alleges that prison officials negligently or intentionally deprived him of property, but also alleges that he filed a state law tort suit against the defendants for deprivation of property. The record reveals that Smith's pro se suit in state court was dismissed several months before he filed this action under 42 U.S.C. Sec. 1983. Smith alleges that his state suit was dismissed for lack of prosecution because prison officials failed to transport him to Tennessee General Sessions Court on the hearing date. The majority's resort to the Tennessee Code does not in this context establish that an adequate state remedy was available to Smith. Viewing the evidence in the light most favorable to him, a genuine question of material fact remains on this issue.\n\n\n21\nI believe that whether an adequate state remedy is available must be considered in the context of each case, as a question of fact. Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), and Hudson v. Palmer, --- U.S. ----, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984), stand for the proposition that an adequate state postdeprivation remedy will satisfy procedural due process when a state prisoner alleges negligent or intentional deprivation of property by a person acting under color of state law but not in a manner authorized by established procedure. Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961), established that the federal remedy under Sec. 1983 is supplemental to state remedies, which \"need not be first sought and refused\" Id. at 183, 81 S.Ct. at 482. The Court arrived at this conclusion by reviewing the legislative history of the Act and determining that Sec. 1983 has three distinctive purposes: first, to override certain objectionable state laws; second, to provide a remedy when state law is inadequate; and third, the broader purpose to provide a federal remedy where a state remedy, although adequate in theory, is not available in practice. Id. at 173-74, 81 S.Ct. at 476-77. Parratt did not review the legislative history of Sec. 1983 and reject or revise the Court's declaration of the purposes of the Act as set forth in Monroe; rather, Parratt operates within the tradition of Monroe and provides a gloss on Monroe's statement that a Sec. 1983 action may be brought when a state remedy is adequate in theory but not in practice. Parratt establishes, for its particular factual setting, the characteristics of a state remedy that is adequate in practice. Under Parratt, the state remedy must be available in a meaningful manner and at a meaningful time after the initial dispossession of the prisoner's property. Parratt, 451 U.S. at 540, 101 S.Ct. at 1915. If so, no constitutional deprivation has occurred and a federal forum is unnecessary. Id. at 543, 101 S.Ct. at 1917. Parratt has particularized the analysis of Monroe, rather than undermined Monroe's holding that the Sec. 1983 remedy is supplemental to state remedies.\n\n\n22\nThe determination of whether a state remedy is actually, not merely theoretically, available in a meaningful manner and at a meaningful time necessarily requires consideration of the circumstances of each case. For example, if the value of the seized property diminishes over time, or if its seizure places the property in jeopardy of destruction, then state provision of a remedy within a \"meaningful time\" may require a greater dispatch than where the property has been destroyed at the time of the seizure and only money damages, rather than restitution, are available. This Court has noted, in another due process context, that \"determining a reasonable time period defies easy exegesis.\" Loudermill v. Cleveland Board of Education, 721 F.2d 550, 564 (6th Cir.1983).\n\n\n23\nSmith's complaint alleges that he was denied what he believed was an adequate state tort remedy by the abusive behavior of state officials who prevented him from pursuing his claim. This is the sort of abuse Sec. 1983 was intended to remedy; if Smith's allegation is true, his state remedy was only theoretically available.\n\n\n24\nThe majority ignores these allegations and simply looks to the Tennessee Code to determine whether an adequate remedy is available. The majority ultimately relies upon this Court's opinion in Vicory v. Walton, 721 F.2d 1062 (6th Cir.1983). In Vicory, the Court properly required the plaintiff to plead and prove that state remedies were \"inadequate in theory or practice.\" Id. at 1065. This portion of the Vicory holding is entirely in keeping with Monroe and Parratt. The Court went on, however, to require demonstration of a \"systematic problem with the state's corrective process.\" Id. While such a showing will satisfy Monroe and Parratt, a deprivation of due process is no less a constitutional violation for being aberrant rather than systematic.\n\n\n25\nIt appears that the Court's concern in Vicory was not remedying due process violations, but remedying the case load of federal courts overburdened with prisoners' Sec. 1983 claims. See Vicory, 721 F.2d at 1065 n. 4. The majority today holds that Smith had an adequate state remedy on the ground that in Brooks v. Dutton, 751 F.2d 197 (6th Cir.1985), another panel of this Court examined the Tennessee Code and found that it provided \"adequate procedures.\" Id. at 199. While this is a relevant threshold finding, it does not properly end the matter. Nor will the question be finally resolved in this Circuit once we have examined the statute books of Kentucky, Ohio and Michigan. Parratt and Monroe require not theoretical but actual state remedies for individual persons who have been deprived of property under color of state law. These authorities mandate examination of the circumstances of each case.\n\n\n26\nNot all prisoner Sec. 1983 cases involve hobby kits. Smith alleges that the clothes that the defendants did not return to him would have provided exculpatory evidence in later proceedings on the rape and assault charges. This allegation is more than plausible; the Nashville Metropolitan Police examined the same belongings for inculpatory evidence.\n\n\n27\nWhen I examine all of the circumstances of Smith's case and view the evidence in the light most favorable to him, I am not convinced that summary judgment on Smith's claim of property deprivation was proper. I respectfully dissent because I believe reversal in part is appropriate.\n\n\n\n1\n Section 9-8-207 was repealed effective January 1, 1985. However, it controls this case where suit was filed in 1982 and the judgment of the district court was entered in 1983. The new statutory scheme is not before us\n\n\n"} -{"text": "\n651 So.2d 308 (1995)\nAUTOCOUNT, INC., Plaintiff-Appellee,\nv.\nAUTOMATED PRESCRIPTION SYSTEMS, INC., Defendant-Appellant.\nNo. 94-1020.\nCourt of Appeal of Louisiana, Third Circuit.\nFebruary 1, 1995.\nRehearing Denied April 7, 1995.\n*309 Christine Lipsey, James Rodney Chastain, Jr., Baton Rouge, for Autocount, Inc.\nCharles Stovall Weems, III, Julie Rene Wilkerson, Alexandria, for Automated Prescription Systems, Inc.\nMichael Simon Tudor, Alexandria, for Gary Steepleton.\nBefore DOUCET, C.J., and THIBODEAUX and SULLIVAN, JJ.\nTHIBODEAUX, Judge.\nThis case involves a dispute over whether fiduciary duties were breached by plaintiff-appellee/defendant-in-reconvention, Auto-Count, Inc., when its president, Gary Steepleton, allegedly used information he acquired as a former officer of defendant-appellant, Automated Prescription Systems, Inc. (APS) for seizing a business opportunity from APS. APS accuses Steepleton and AutoCount of manufacturing and marketing an automated pill counter for themselves after acquiring a knowledge of that instrument during Steepleton's employment with APS. In its view, these actions breached a fiduciary duty owed to APS and violated the Uniform Trade Secrets Act.\nAutoCount, Inc. filed a motion for summary judgment which was granted by the trial court. The trial judge found that Steepleton, AutoCount's president and APS's former vice-president of marketing, in developing a pill counter, \"did not breach a fiduciary duty nor did he usurp a corporate opportunity of APS.\"\nFor the following reasons, we affirm the judgment of the trial court.\n\nI.\n\nISSUES\nAPS appeals and asserts the following assignments of error:\n1. Whether the trial court erred in granting AutoCount, Inc.'s motion for summary judgment on Automated Prescription Systems Inc.'s cause of action for breach of fiduciary duty by usurpation of a corporate opportunity.\n2. Whether the trial court erred in granting AutoCount, Inc.'s motion for summary judgment on Automated Prescription Systems Inc.'s cause of action for violation of the Uniform Trade Secrets Act.\n\n\n*310 II.\n\nFACTS\n\nA. Factual History\nPrior to the formation of AutoCount on May 22, 1992, and prior to his becoming the president of AutoCount, Steepleton was employed by APS. Steepleton ultimately became vice-president of marketing and sales for APS. APS is in the business of marketing, engineering, and selling or leasing of automated drug counting equipment to the pharmacy industry. AutoCount's business is similar in that it involves pharmaceutical supplies specializing in pharmacy automation.\nFor several years, APS collected information about a product known as a universal counter. A universal counter is an instrument which counts pills and dispenses that quantity into a vial while returning the balance to the original bottle. There are two types of counters\u0097one that counts as the pills drop and another which computes a predetermined number of pills. In 1987, APS decided to pursue a universal counter to add to its product line. Prior to 1987, APS was involved in leasing to its customers a line of products called the Baker Cells and the Baker Cassette System. The Baker systems utilize a singular counting mechanism in a series of cassettes with each cassette containing a specific drug. After researching and testing several universal counters, APS decided that it would be more feasible and economical to develop and manufacture a universal counter in-house.\nIn mid 1991, APS obtained a pre-determining universal counter known as the Med-A-Counter which had been on the market since 1977 and observed its functioning. The president and chief executive officer of APS, James R. Baker, Jr., who observed the Med-A-Counter, decided that APS could enter the market quicker and cheaper by pursuing the rights to the Med-A-Counter as opposed to developing a universal counter in-house. Baker contends that he instructed Steepleton to pursue acquiring the rights to the Med-A-Counter for APS. Steepleton maintains that he was asked only to conduct a market assessment regarding universal pill counting machines. Steepleton was enthusiastic about the product but, according to Steepleton, Baker was not.\nSteepleton had no written employment agreement with APS nor did he have an noncompetition agreement with APS. In 1991, Steepleton began considering the idea of going out on his own and developing a universal pill counter. Steepleton developed a business plan that became AutoCount. In his deposition, Steepleton stated that, by working with equipment that belonged to him out of his home at night and on weekends, he developed his ideas for a pre-determining universal pill counter.\nPrior to leaving APS, Steepleton investigated the ownership of the Med-A-Counter patent and learned that the patent was owned by Pak-Tech Industries. Steepleton further stated in his deposition, that the purpose of his investigation was not to acquire rights to the Med-A-Counter, but to determine ownership and patent points. Neither Steepleton nor APS ever acquired the rights to the Med-A-Counter.\nBaker contends that Steepleton, instead of pursuing the rights to the Med-A-Counter for APS, began pursuing the rights for himself and the company that he intended to form, which ultimately became AutoCount. APS further claims that Steepleton and Bob Wells, a former regional sales manager for APS who is now Steepleton's partner, obtained a Med-A-Counter and sent it to Korea. In Korea, the Med-A-Counter was reverse-engineered. APS claims also that Steepleton and Wells's idea was to manufacture the Med-A-Counter overseas for distribution in the United States and England.\nAPS considered information included in Steepleton's business plan, which was sent to potential investors who would fund the development of Steepleton's pre-determining universal pill counter, to be confidential and proprietary. Steepleton tendered his resignation from APS on April 1, 1992, and he left the company one month later on May 1, 1992. Steepleton took APS's profit and loss statement that was shown to an investor, Tom Adamek, who ultimately became a shareholder in AutoCount.\n*311 Steepleton claims that AutoCount's product, which was introduced in August of 1992, with the trade name \"Redicount,\" is the product of his own extensive design and engineering work. Further he claims that \"Redicount\" is distinct from and superior to the Med-A-Counter. Most notable, the \"Redicount\" can count any type of medication without any adjustments\u0097a feature not present in other products of this type on the market. APS, on the other hand, claims that the \"Redicount\" mirrors the Med-A-Counter.\n\nB. Procedural History\nOriginally, AutoCount filed a petition for declaratory judgment which sought a declaration from the trial court that it had the right to market and sell a product known as the \"Redicount\" universal pill counter and a declaration that the \"Redicount\" universal pill does not utilize any proprietary technology of APS. APS filed an answer to Auto-Count's petition contending that AutoCount did not have the right to market the \"Redicount.\" Not until September 9, 1993, did APS file a reconventional demand against AutoCount and Steepleton asserting that Steepleton, in developing and marketing a universal pill counter which he calls \"Redicount\" but which APS asserts is really the Med-A-Counter, breached a fiduciary duty that Steepleton owed to APS as an officer of APS based on usurpation of a corporate opportunity that belonged to APS and violating the Uniform Trade Secrets Act. In other words, Steepleton seized a business opportunity that rightfully belonged to his former employer, APS, and, in so doing, breached a fiduciary duty to APS. Additionally, as part of the relief requested in its reconventional demand, APS sought a preliminary injunction to prohibit Steepleton's actions with regard to the \"Redicount.\"\nMeanwhile, on October 21, 1993, Auto-Count filed a motion for summary judgment on the main demand and the reconventional demand. Attached to its motion were the following exhibits: excerpts from Steepleton's deposition, excerpts from Baker's deposition, Steepleton's affidavit, and APS's answer to AutoCount's interrogatory no. 3. The affidavit of Geoffrey Mantooth was offered at the hearing along with the entire record on the preliminary injunction.\nThe trial judge granted AutoCount's motion for summary judgment and denied APS's motion for preliminary injunction.\nThe final judgment granted the declaratory relief prayed for by AutoCount in its main demand, which included a declaration that AutoCount has all proprietary rights in the \"Redicount;\" that the \"Redicount\" technology does not involve intellectual property rights or trade secrets owned by APS; and, that AutoCount is free from interference and disturbance by APS. The judgment also dismissed APS's reconventional demand against AutoCount.\n\nIII.\n\nLAW AND DISCUSSION\n\nA. Summary Judgment\nPreliminarily, it should be noted that appellate courts review summary judgments de novo under the same criteria that govern the trial judge's consideration of whether a summary judgment is appropriate. Schroeder v. Board of Sup'rs of Louisiana State University, 591 So.2d 342 (La.1991). As set forth in La.Code Civ.P. art. 966(A), a plaintiff or a defendant in the principal or any incidental action, with or without supporting affidavits, may move for summary judgment in his favor for all or part of the relief for which has been prayed. Further, the mover is entitled to judgment if the pleadings, depositions, answers to interrogatories and admissions on file, together with supporting affidavits, if any, show there is no genuine issue of material fact and the mover is entitled to judgment as a matter of law. La.Code Civ.P. art. 966(B); Durrosseau v. Century 21 Flavin Realty, Inc., 594 So.2d 1036 (La.App. 3d Cir.1992).\n\nB. Breach of Fiduciary Duty by Usurpation of a Corporate Opportunity\nAPS claims that there are several disputed material facts with regard to Steepleton's fiduciary duty to APS. APS claims *312 that there is a disputed fact as to Steepleton's position as an officer at APS. This is incorrect. Steepleton admits that he was an officer of APS and he agrees that, as an officer, he owed APS a fiduciary duty. The second alleged disputed issue of fact asserted by APS is whether the Med-A-Counter was a corporate opportunity belonging to APS. APS asserts that the question of whether a \"business\" opportunity is a \"corporate\" opportunity is a question of fact to be determined from the circumstances existing at the time when the \"opportunity\" arose.\nThe record establishes that APS was interested in developing and manufacturing a universal counter. The record also establishes that in mid 1991, APS observed the functioning of the Med-A-Counter and determined that the market could be entered more quickly and less expensively by pursuing the rights to the Med-A-Counter. Steepleton conducted a market assessment regarding universal pill counting machines. However, APS maintains that Baker instructed Steepleton to obtain the rights to the Med-A-Counter. The record further establishes that Steepleton began formulating the idea of starting his own pharmaceutical supply company and in his spare time developed \"Redicount\" and did not pursue the rights to Med-A-Counter. Thus, the record clearly shows that Steepleton was an officer of APS and that APS was interested in adding a universal pill counter to its product line, specifically, the Med-A-Counter. The record also clearly shows that while Steepleton was employed with APS, he formulated the idea of starting his own business and marketing a universal pill counter.\nAlthough the record clearly shows that APS was interested in the Med-A-Counter which was a universal pill counter and that Steepleton developed a universal pill counter called \"Redicount,\" we find that the two products are not one and the same. Apparently, APS considers the products the same because they perform the same function and because Steepleton developed his product while APS was pursuing rights to the Med-A-Counter, a universal pill counter, for its own product line. We do not agree. Steepleton's deposition reveals that the \"Redicount\" is distinct from the Med-A-Counter in that it can count any type of medication without undergoing any adjustments. Therefore, we find, as did the trial judge, that Steepleton did not breach his fiduciary duty by usurpation of a corporate opportunity. The opportunity to obtain the rights to the Med-A-Counter still exists as neither APS nor AutoCount have procured those rights.\n\nC. Violations of the Uniform Trade Secrets Act\nAPS asserts that information is a trade secret. Therefore, when Steepleton used APS's profit and loss statement in the business plan he submitted to potential investors in his company, he violated a trade secret. APS claims that there exists a material factual dispute as to what a trade secret is. AutoCount urges that the definition of trade secret does not include information.\nLouisiana Revised Statute Title 51:1431(4) provides for the definition of \"Trade Secret\" as follows:\n\"Trade Secret\" means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:\n(a) derives independent economic value, actual or potential, from not being generally known to and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use, and\n(b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.\nThe information for which \"trade secret\" status is sought is not that which is contemplated as being a trade secret under the statute. It does not include all information about a company but only that information as delineated in the words illustrating the type of information and as further defined in subparagraphs (a) and (b) of La.R.S. 51:1431(4). The trial court's dismissal of the trade secrets claim was correct.\n\nCONCLUSION\nFor the foregoing reasons, the judgment of the trial court granting AutoCount, Inc.'s *313 motion for summary judgment and dismissing, with prejudice, the reconventional demand by Automated Prescription Systems, Inc. against AutoCount, Inc. is affirmed. Costs of this appeal are assessed against Automated Prescription Systems, Inc.\nAFFIRMED.\n"} -{"text": "\n278 S.E.2d 566 (1981)\nBonnie Faye LOWERY\nv.\nWalter M. NEWTON, Jr., M. D. and Pinehurst Surgical Clinic, P. A.\nNo. 8016SC962.\nCourt of Appeals of North Carolina.\nJune 2, 1981.\n*569 McLeod & Senter by Joe McLeod and William L. Senter, Fayetteville, for plaintiff-appellee.\n*570 Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan by James D. Blount Jr. and Nigle B. Barrow Jr., Raleigh, for defendants-appellants.\nHILL, Judge.\nDefendants contend in their first assignment of error that the trial court erred in denying their motion for judgment notwithstanding the verdict.\nPlaintiff's complaint alleged negligence arising out of the performance of professional medical services. In order to withstand defendants' motion for a directed verdict, plaintiff must offer evidence which establishes the following elements: (1) the standard of care; (2) breach of the standard of care; (3) proximate causation; and (4) damages. Failure to establish sufficient evidence on any one element entitles the defendant to a directed verdict. See Prosser, Law of Torts, \u00a7 30. Also see G.S. 90-21.12.\nDefendants contend that the standard of care in medical malpractice actions is established in part by G.S. 90-21.12 and requires the introduction of expert medical testimony. This statute became law in 1975 and provides as follows:\n\u00a7 90-21.12. Standard of health care.\u0097In any action for damages for personal injury or death arising out of the furnishing or the failure to furnish professional services in the performance of medical, dental, or other health care, the defendant shall not be liable for the payment of damages unless the trier of the facts is satisfied by the greater weight of the evidence that the care of such health care provider was not in accordance with the standards of practice among members of the same health care profession with similar training and experience situated in the same or similar communities at the time of the alleged act giving rise to the cause of action.\nAdmittedly, the phrasing of the questions to Dr. Keranen to establish the standard of care did not follow the statute verbatim. Dr. Keranen testified that the removal of the tumor under the circumstances was a failure on the part of Dr. Newton to exercise that degree of care, professional skill, and judgment which a reasonable and prudent physician would have exercised under the same or similar circumstances, in the same or similar community. To contend that the substitution of \"under the same or similar circumstances\" in lieu of \"with similar training and experience\" is significant, places form over substance. Such technical error is harmless. However, the breach of the standard of care is clearly established by Dr. Keranen's testimony that the best treatment for the tumor was to leave it alone and that if such surgery was required, it should have been done by a neurosurgeon.\nDefendants argue in their next assignment of error that plaintiff has failed to establish defendant Newton's negligence as a proximate cause of plaintiff's injuries. Defendants contend that not only is it incumbent upon plaintiff to show that she currently suffers from a condition caused in part by the alleged negligent act of defendant Newton but also to offer evidence that she would never have developed her present condition as a result of the pre-existing condition's having run its natural course of development, absent the intervention of the negligent act of the defendant. We do not agree. An injured person is entitled to recover all damages caused by defendant's negligence. When plaintiff's pre-existing physical or mental condition is aggravated or activated by a subsequent act, defendant Newton is liable to the extent that his wrongful act proximately and naturally aggravated or activated plaintiff's pre-existing condition. See Potts v. Howser, 274 N.C. 49, 161 S.E.2d 737 (1968).\nDefendants point out that plaintiff at one time had been a quadraplegic, had eight operations on her neck as a result of the disease process, and that her left side was weaker than her right side. Defendants overlook the real damage plaintiff suffered as a result of the operation\u0097paralysis of her arm and shoulder. We find nowhere in the record any evidence that prior existing conditions, running a normal course, *571 would have resulted in injuries which plaintiff sustained as a result of damage done by defendant Newton in surgery. Plaintiff has no obligation to negate a remote possibility of loss of use of her arm and shoulder. The cases cited by defendants are all distinguishable. This assignment of error is overruled.\nNext, defendants bring forth seventeen assignments of error based upon thirty-eight duly preserved exceptions to the introduction of various portions of the testimony, contending this Court should reverse the judgment of the trial court and remand the case for a new trial. We have considered all of the assignments and discuss below a representative few.\n\nERRORS IN THE INTRODUCTION OF EXPERT TESTIMONY\nDefendants argue that Dr. Keranen was not competent to testify regarding the standard of care established in the defendant Newton's field of practice. Dr. Keranen was tendered as a medical expert, specializing in the field of neurological surgery.\nIn malpractice cases the applicable standard of care must be established by other practitioners in the particular field of practice or by other expert witnesses equally familiar and competent to testify to that limited field of practice. Whitehurst v. Boehm, 41 N.C.App. 670, 677, 255 S.E.2d 761 (1979). Defendants contend Dr. Keranen could not testify as an expert, but rather that a plastic surgeon should have been used to establish the standard of care in the instant case. We disagree.\nThere is some overlapping in the various areas of health care. Dr. Keranen testified that he was graduated from Duke Medical School and did a year of surgical internship at Duke Hospital. Thereafter, he did a rotating internship at Duke University where he performed general surgery and plastic surgery among other things. Dr. Keranen testified that he rotated from one type of surgery to another. Thereafter, he went to a neurological residency at the University of Vermont. He was tendered as a medical expert, specializing in the field of neurological surgery.\nThe overriding area of medical care before us is surgery\u0097not plastic surgery alone or neurological surgery alone. The operation involved some expertise by the surgeon in both areas. The prior experience and training of Dr. Keranen as a general surgeon and plastic surgeon is sufficient to qualify him to testify as an expert for the purpose of establishing the standard of care and breach thereof required in the case before us. This assignment of error is overruled.\nNext, defendants contend the trial court erred in allowing Dr. Keranen to testify as to his opinion of the failure of Dr. Newton to meet the standard of care, the cause of injury, and his opinion as to the injury's permanence without first revealing the factual basis for his opinion. It is well settled that an expert may not state his opinion based upon facts not within his personal knowledge without first requiring the examiner properly to propound a hypothetical question. Todd v. Watts, 269 N.C. 417, 152 S.E.2d 448 (1967). Succinctly stated, the rule is that the expert must base his opinion upon facts within his own knowledge, or upon a hypothesis of the finding by the jury of certain facts recited in the question. Summerlin v. R.R., 133 N.C. 550, 554, 45 S.E. 898 (1903).\nWe note from the record that Dr. Keranen had been plaintiff's attending physician on a regular basis since 1971 and had seen her during the month immediately preceding the operation by defendant Newton. Dr. Keranen also saw plaintiff during the week after the operation. It is apparent that Dr. Keranen was testifying from his personal knowledge of the physical condition of his patient. Admittedly, some of the questions could have been more aptly stated, but deviation from the norm was harmless error.\nAt trial, plaintiff's counsel asked Dr. Keranen if he had an opinion as to the cause of the paralysis which he found in plaintiff's left shoulder and arm when he *572 examined her on 10 May 1976. This question was material in order to establish proximate cause. The defendants contend the trial judge erred in allowing plaintiff's counsel to ask Dr. Keranen what actually caused the injury, rather than questioning the witness as to what could have caused the injury. We find no error. When an expert witness testifies as to facts based upon his personal knowledge, he may testify as to his opinion.\n\"[I]f the expert has a positive opinion on the subject, he should be able to express it without the `could' or `might' formula.\" Taylor v. Boger, 289 N.C. 560, 565, 223 S.E.2d 350 (1976), citing Mann v. Transportation Co. and Tillett v. Transportation Co., 283 N.C. 734, 198 S.E.2d 558 (1973).\nDefendants next point to several exceptions where the trial court allowed Dr. Keranen to express his opinion on certain matters which the defendants contend were irrelevant and misleading to the jury. Defendants further contend the trial court erred in refusing to strike part of Dr. Keranen's testimony when subsequent testimony revealed the first testimony inadmissible. Defendants also contend the court erred in allowing Dr. Keranen to express his opinion as to failure to meet the degree of care which a reasonable and prudent physician would have exercised and his opinion as to the permanency of plaintiff's condition. We have examined these assignments of error and find them to be without merit.\n\nVARIOUS ERRORS IN THE INTRODUCTION OF EVIDENCE\nDefendants argue the court permitted plaintiff's counsel to lead witnesses. It is elementary that leading questions are not allowed on direct examination as a general rule. However, the general conduct of a trial is within the trial judge's discretion. The form of the questions was harmless.\nThe trial court permitted plaintiff to testify regarding her earnings from employment in 1969 and 1970 and prior to the initial onset of her paralysis. Plaintiff testified that she earned the minimum wage at that time. This was the only evidence that plaintiff ever had any earnings. Defendants contend such evidence was too remote and prejudicial. See Fox v. Army Store, 216 N.C. 468, 470, 5 S.E.2d 436 (1939). There is a distinction between loss of specific wages from a particular job or specific lost profits, and impaired capacity to earn wages in general. See Johnson v. Lewis, 251 N.C. 797, 112 S.E.2d 512 (1960). Therefore, even assuming the evidence of employment of plaintiff some six years before the operation herein was too remote as evidence of reduced earnings, nevertheless, it is admissible as evidence of loss of earning capacity. Plaintiff further testified as to her interest in decoupage as prospective employment. Plaintiff's testimony was proper and admissible.\nUpon cross-examination of the plaintiff, the following testimony was elicited:\nQ. But until the time he [Keranen] operated on your arm in August of 1976, he never told you that your arm was permanently disabled, did he?\nA. He told me Dr. Newton didn't have any business doing it.\nCounsel for defendants moved to strike the answer as totally unresponsive, and the motion was denied. The defendants contend the testimony was hearsay and unresponsive. Assuming such testimony was hearsay and unresponsive, it is harmless in view of the fact that the record discloses that similar testimony occurs elsewhere. Defendants lost no substantial right, and no grounds exist for granting a new trial. G.S. 1A-1, Rule 61.\nDefendants raise several other questions under the heading set out in this subsection. We have examined them and find them to be without merit.\nDefendants argue the trial court erred in stating the evidence and instructing the jury on the issues of liability and damages. Defendants contend in the first section of their brief that there is no competent evidence of the standard of care, any breach of the standard of care, or that any *573 alleged breach was a proximate cause of the alleged injuries. We have heretofore examined these assignments of error and found them to be without merit.\nDefendants further argue that the trial court erred in its instructions to the jury that the liability of the defendants could be based upon a failure of the defendants to \"possess a degree of professional learning, skill, and ability as others similarly situated ....\" Defendants refer again to the language in G.S. 90-21.12, which phrases the test as \"... with similar training and experience situated in the same or similar communities ....\" Defendants argue that since the enactment of this statute in 1975 only a literal interpretation of the wording will suffice. We do not agree. It is the concept expressed by the words of the statute which controls. The words \"similarly situated\" can easily encompass not only geographic location, but also standing within a profession. No quarrel is present as to any limitations imposed by the geographic location.\nThe jury had before it evidence of the qualifications\u0097educational and otherwise\u0097of Dr. Newton. The trial judge in his charge said ... \"remembering that for you to find negligence it must be shown either that the defendant did not possess a degree of professional learning, skill and ability as others similarly situated, or that he did not possess or that he did not exercise reasonable care and diligence in the application of his knowledge and skills in the plaintiff's case, or that he did not use his best judgment in the treatment and care of his patient.\" The charge of the judge was adequate to instruct the jury as to its duty in the case. To conclude otherwise would again place form over substance.\nDefendants argue the trial judge erred in his charge by referring to the \"field\" of surgery of the defendants, when the same was not relevant. The qualifications of both Dr. Keranen and Dr. Newton, including the care offered plaintiff, had been admitted previously. Likewise, throughout the record reference is made to \"neurologist\" and \"plastic surgeon\" without objection. Nothing said by the trial judge by referring to the \"fields\" of practice could have misled the jury.\nDefendants further argue that the trial court erred in its charge by allowing a recovery for future damages because there was no evidence to support a reasonable apportionment of the future injuries between the effects of the pre-existing condition and the effects of the surgical injury. Defendants contend the ruling in Potts v. Howser, 274 N.C. 49, 54, 161 S.E.2d 737 (1968), is controlling:\n\"[W]here the wrongful act does not cause a diseased condition but only aggravates and increases the severity of a condition existing at the time of the injury, the injured person may recover only for such increased or augmented sufferings as are the natural and proximate result of the wrongful act, or, as otherwise stated, where a pre-existing disease is aggravated by the wrongful act of another person, the victim's recovery in damages is limited to the additional injury caused by the aggravation over and above the consequences, which the pre-existing disease, running its normal course, would itself have caused if there had been no aggravation by the wrongful injury.\"\nThe case before this Court is distinguishable. Here, the surgery resulted in total loss of use of the arm and partial loss of use of the shoulder. There is no evidence before the court that the operation aggravated or increased the severity of the pre-existing condition.\nDefendants have gleaned the record and brought forth 24 assignments of error. We have examined all of them. Some we have overruled. Some have constituted error; but where error exists, we have determined it to be harmless. In like manner, we have examined the cross-assignments of error brought forward by the plaintiff and find no error exists in the ruling by the trial judge on plaintiff's question. The parties are not entitled to a perfect trial\u0097only a fair trial. Defendants received that.\nNo Error.\n*574 HARRY C. MARTIN, J., concurs.\nMORRIS, C. J., concurs in the result.\n"} -{"text": "96 F.3d 1445\nBrownv.Miska*\nNO. 95-40758\nUnited States Court of Appeals,Fifth Circuit.\nAug 29, 1996\nAppeal From: S.D.Tex., No. CA-V-94-067\n\n1\nAFFIRMED.\n\n\n\n*\n Fed.R.App.P. 34(a); 5th Cir.R. 34.2\n\n\n"} -{"text": "\n781 S.W.2d 487 (1989)\n301 Ark. 80\nJacqueline Kight WILSON, Appellant,\nv.\nJohn Lofton WILSON, Appellee.\nNo. 89-67.\nSupreme Court of Arkansas.\nDecember 18, 1989.\nRichard Crockett, Little Rock, for appellant.\nJ.L. Kidd, Little Rock, for appellee.\nROBERT S. HARGRAVES, Special Justice.\nThis is the second appeal of this divorce case. Wilson v. Wilson, 294 Ark. 194, 741 S.W.2d 640 (1987). In that case we remanded on two points. First, we held the chancellor abused his discretion in finding that none of the incentive bonus due appellee from his employer was marital property. *488 Secondly, we remanded to permit both parties to fully develop the record regarding the value of appellee's corporate stock in Orthopedic Associates, Inc.\nOn remand the chancellor awarded appellant one-half of the incentive bonus after first deducting the income tax liability assessed against the bonus and the amount of a marital debt owed appellee's corporate employer. The chancellor also determined the value of appellee's stock interest in Orthopedic Associates, Inc., to be $20,000, the same amount which he had determined at the first trial.\nIn this appeal, appellant argues only that the chancellor erred by failing to follow the law of the case as mandated in our earlier decision. We hold the doctrine of the law of the case is not applicable to the factual questions which we remanded to the chancellor and we therefore affirm.\nThe basic issue before us on this appeal is whether the values found by the chancellor on remand violated the mandate of our decision in the first appeal. When this matter was first before us, this court did not undertake to value the appellant's interest in appellee's incentive bonus. We merely decided the bonus to be marital property. Likewise, we did not value the appellee's stock interest in Orthopedic Associates, Inc. We said that on the basis of the record then before us, we thought it apparent that the stock exceeded a value of $20,000, but the evidence was insufficient for us to place a value on the stock. Consequently, we remanded the case for the chancellor to reconsider those issues in light of our decision.\nUnlike the dissent, we do not read our decision in Wilson I to hold it was error for the trial court to rely on the stock purchase agreement in evaluating the worth of the professional association. We said the record before us indicated the stock was worth more than the amount prescribed in the stock purchase agreement, but we were unable to place a fair value on the stock from the evidence in that record.\nThe quantity and quality of the evidence developed on remand is substantially different from the evidence adduced at the initial hearing.\nThe doctrine of the law of the case cannot be applied to factual questions which were expressly remanded for determination by the trial court. It is conclusive only where the facts on the second appeal are substantially the same as those involved on the prior appeal. The rule does not apply if there is a material change in the facts. Potter v. Easley, 288 Ark. 133, 703 S.W.2d 442 (1986); Hartford Fire Ins. Co. v. Enoch, 79 Ark. 475, 96 S.W. 393 (1906).\nFrom his lengthy and reasoned opinion, it is apparent the chancellor properly construed and applied our reasoning in the first appeal to his findings of fact on remand. Even though we consider chancery appeals de novo, we will not reverse unless the trial court's factual findings are clearly erroneous. ARCP Rule 52(a); Milligan v. General Oil Co. Inc., 293 Ark. 401, 738 S.W.2d 404 (1987). From our review of the record, we cannot say the chancellor's determination of the value of both the incentive bonus and corporate stock were clearly erroneous.\nAffirmed.\nHOLT, C.J., and NEWBERN and GLAZE, JJ., not participating.\nJ.R. BUZBEE, Special Chief Justice, joins the dissent.\nMARCIA L. McIVOR, Special Justice, dissents in part and concurs in part.\nMARCIA McIVOR, Special Justice, dissents in part. Concurrence in part.\nThe majority has voted to affirm the trial court's opinion after remand from this court in Wilson v. Wilson, 294 Ark. 194, 741 S.W.2d 640 (1987). In that opinion, we remanded the case on two points. First, we held that the trial court abused its discretion in not considering the incentive bonus which appellee received on June 30, five days after the decree of divorce was entered, as marital property subject to division. Second, we held that it was error to *489 rely on the stock purchase agreement between appellee and Orthopedic Associates, Inc., as the sole measure of appellee's professional practice. Although appellant had submitted evidence through one expert, showing a considerably higher value, the appellee offered no evidence other than the stock purchase agreement, and we felt fairness required remand to permit both parties to develop proof of the value.\nAppellant now argues that the chancellor failed to follow the law of the case in reaching a decision after remand. On hearing after remand, the trial court found appellant was entitled to half of the $67,078 incentive bonus but reduced the bonus by amounts withheld by Orthopedic Associates, Inc., for what may have been an advance or a debt, and further reduced appellant's share of the bonus by an \"income tax reduction.\" Although the record is not clear how the trial court reached the conclusion that appellant's \"half\" of the bonus should be $11,259, appellant has not assigned as error the reductions to the bonus of \"tax\" and \"debt.\" The principle of law on this issue as announced in Wilson I was that most of the incentive bonus accrued and therefore was acquired during the marriage and was, therefore, marital property. The majority finds that the doctrine of the law of the case is not applicable to disturb the trial court's decision, and on the point of the incentive bonus, I concur.\nHowever, the same should not be true of the findings of the trial court on the value of Dr. Wilson's professional practice. In Wilson I we held that it was error to rely on the stock purchase agreement between appellee and Orthopedics Associates, Inc., as the method of evaluating the worth of that professional association and Dr. Wilson's one-third interest in it. Wilson I held that it was error to rely upon the $20,000 figure which the stock purchase agreement set as both a buy-in and buy-out figure. Yet the trial court, after hearing the other evidence, again returned to that agreement to value appellee's share of the corporation. The trial court's rejection of any other method of evaluation is inconsistent with the mandate of Wilson I, and with the Arkansas statute on marital property division which requires that all marital property be distributed equally unless an equal division is inequitable. In Day v. Day, 281 Ark. 261, 663 S.W.2d 719 (1984), we recognized that neither party should be permitted to deprive the other of an interest in property subject to division by putting the property temporarily beyond his or her control. Yet the stock purchase agreement involved here has a similar effect of artificially limiting the value of property available for division, while preserving a significant segment of it for future income generation of one of the parties.\nWhen the marital property at issue is an interest in a professional association, Ark. Code Ann. \u00a7 4-29-208 (1987) precludes persons not licensed as a professional of that type from ownership, management or voting in any shares of any such a professional association. This case typifies the problem of reaching a monetary value of a marital asset which is not bought and sold on the open market. The complexity of the valuation issue should not obscure the purpose of the property division statute. \"The legislature no doubt intended for common sense and logic to apply in cases where a statute does not specifically cover the exact factual situation before the court.\" Wagoner v. Wagoner, 294 Ark. 82, 740 S.W.2d 915 (1987) (Purtle, J., dissenting). The court cannot award appellant shares in the appellee's professional association because of the prohibition of Ark.Code Ann. \u00a7 4-29-208. Therefore, the court should reach a fair assessment of the economic value to appellee of that asset and make a monetary award to the spouse of half that amount.\nIn reaching the valuation, courts may consider stock purchase agreements such as this one in arriving at the value of a professional's share in a professional association. However, the courts must also consider the inherent inappropriateness of those agreements as a measure of the value of the share in a divorce action. This stock purchase agreement is subject to change by the corporation, of which the professional, appellee in this case, is a one-third owner. As appellee's witnesses candidly *490 admit, the purpose of such agreements is to protect the corporation and its members, but not their spouses or former spouses. While the agreement may be a bona fide business planning tool to meet objectives such as preventing changes in ownership, promoting economic continuity, protection from outsiders and minimizing tax consequences, they are not conclusive measures of the economic value of the share of one member in a divorce action. The figure, in this case $20,000, is selected as a means of convenience to avoid difficult computations and litigation if one of the members resigns, but there is no evidence in this case that the wife acquiesced in the figure as a method of evaluation, or that she should be bound by it in these circumstances. In this case, the stock purchase agreement was executed sixteen months after the parties' divorce action was commenced, a fact certainly in mind of the appellee, and known to the lawyers advising the members of the corporation. When there is a right of first refusal by the corporation, this provision prevents or discourages knowledgeable offers to establish a value. All of these considerations led to our rejection of the stock purchase agreement as the measurement of appellee's share of the professional association in Wilson I and our remand to the trial court.\nOn remand the trial court rejected alternative higher values by various experts, because those values had included the accounts receivable of Orthopedics Associates, Inc. The trial court's position rests on an assumption about whether appellant would get a share of the accounts receivable when Dr. Wilson leaves the professional association. That will depend on the terms of the agreement in effect when Dr. Wilson leaves. Those terms have changed once and may change again, a matter within the control of Dr. Wilson and his associates. That should not mean that a method of establishing the value of Orthopedics Associates, Inc., cannot consider the accounts receivable, which are a substantial asset of any such professional association. To consider the accounts receivable in evaluating the association is not the same as awarding appellant a share of the accounts themselves. This problem was considered by the court in Stern v. Stern, 66 N.J. 340, 331 A.2d 257 (1975). There the court rejected contentions similar to the theory on which the chancellor in Wilson rejected evaluations of Orthopedics Association, Inc. Stern found that the accounts receivable were to be considered as one of the elements in determining the entire worth, along with other assets, and accounts payable and other liabilities. All of these are elements to be considered in reaching a monetary evaluation of a professional association by several methods accepted by the courts.\nThe majority rejects appellant's arguments by citing those cases in which we found that the doctrine of the law of the case does not apply if there is a material change in the facts, and suggesting that the quantity and quality of evidence on remand is substantially different from the evidence adduced at the initial hearing. However, though there may be more and different evidence on the facts, this does not amount to a material change in the facts of the case. The issue here on the \"law of the case\" goes to whether or not the trial court on remand has applied the principles of law determined and announced in the first appeal. Overton Constr. Co., Inc. v. First State Bank, 285 Ark. 361, 688 S.W.2d 268 (1985).\nIn my view, the trial court failed to follow the mandate of Wilson I when it rejected the other evaluations of appellee's onethird (1/3) share of the partnership and again used the stock purchase agreement value of $20,000 as a measure of appellee's share of the value of the professional association.\nIn the final analysis it is our duty to see that the law enables people to have a fair decision after their day in court. In chancery cases this court reviews de novo, and may, rather than remand, determine what judgment should have been reached. O'Neal v. Ellison, 266 Ark. 702, 587 S.W.2d 580 (1979). Since the record is now fully developed, we should determine the value of appellee's share of the professional association on this de novo review and *491 make an equitable distribution as the decree which the chancellor should have entered.\nJ.R. BUZBEE, Special C.J., joins in the dissent.\n"} -{"text": "\n374 F.Supp.2d 1333 (2005)\nHEBEI NEW DONGHUA AMINO ACID CO., LTD., Plaintiff,\nv.\nUNITED STATES, Defendant.\nSLIP OP. 05-70, Court No. 04-00409.\nUnited States Court of International Trade.\nJune 15, 2005.\n*1334 Hume & Associates PC, Washington, DC (Robert T. Hume) for Plaintiff.\nPeter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (David S. Silverbrand), Barbara J. Tsai, Attorney-Advisor, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for Defendant, of counsel.\n\nOPINION\nRESTANI, Chief Judge.\nPlaintiff Hebei New Donghua Amino Acid Co., Ltd. (\"New Donghua\") challenges the decision of the United States Department of Commerce to rescind its new shipper review of New Donghua as an exporter of glycine into the United States. See Glycine from the People's Republic of China: Notice of Recision of Antidumping Duty New Shipper Review of Hebei New Donghua Amino Acid Co., Ltd., 69 Fed.Reg. 47,405 (Dep't Commerce Aug. 5, 2004) [hereinafter \"Recision Notice\"]. New Donghua claims that Commerce improperly rejected its lone U.S. sale as not bona fide, contesting both the statutory basis for Commerce's bona fide sales analysis and the evidentiary basis for its decision. Because Commerce's decision was in accordance with law and supported by substantial evidence, New Donghua's motion for judgment on the agency record is denied and judgment is entered for Defendant.\n\nBACKGROUND\nOn March 29, 1995, Commerce published an antidumping duty order on imports of glycine from China, which currently imposes an antidumping duty of 155.89 percent on nearly all Chinese glycine imports to *1335 the United States. See Glycine from the People's Republic of China, 60 Fed.Reg. 16,116 (Dep't Commerce Mar. 29, 1995) (antidumping duty order).[1]\nNew Donghua's first sale of glycine to a customer in the United States, the sale at issue in the instant proceeding, entered on February 10, 2003 (referred to hereinafter as the \"U.S. sale\" or the \"new shipper sale\"). Pursuant to 19 U.S.C. \u00a7 1675(a)(2)(B) (2000), and 19 C.F.R. \u00a7 351.214(d), New Donghua filed a new shipper review request on March 26, 2003, certifying it was both an exporter and producer of glycine and did not export glycine to the United States during the original period of investigation. Section 1675(a)(2)(B) of title 19 enables a new shipper \"to demonstrate that it should be accorded a dumping rate specific to itself, and not the `all-others' rate....\" Tianjin Tiancheng Pharm. Co. v. United States, 366 F.Supp.2d 1246, 1247 (CIT 2005).\nCommerce initiated a new shipper review to determine whether New Donghua was entitled to its own antidumping duty rate and to calculate a weighted average margin for New Donghua. See Notice of Initiation of Antidumping Duty New Shipper Review: Glycine from the People's Republic of China, 68 Fed.Reg. 23,962 (May 6, 2003) [hereinafter \"Notice of Initiation\"]. The period of review covered sales of glycine by New Donghua from March 1, 2002, through February 28, 2003 (the \"POR\").\nI. NEW DONGHUA'S GLYCINE BUSINESS AND THE U.S. SALE\nNew Donghua began producing glycine in 2000. New Donghua Sections A, C, D Questionnaire Response (July 11, 2003), at A-3, P.R. Doc. 11, C.R. Doc. 2, Pl.'s Conf.App. at tab 1. As reported in its questionnaire responses to Commerce, New Donghua sold a small quantity of glycine to a customer in the United States on January 2, 2003. Id. at Ex. 1.[2] New Donghua describes the U.S. sale as a \"test sale\" in which the U.S. importer was attempting \"to ascertain whether a dumping margin would apply to the sale so it could determine what prices it could sell glycine for in the United States market.\" Pl.'s Conf. Op. Br. at 4 (citing New Donghua First Supp. Questionnaire Response (Dec. 19, 2003), Supp \u0097 21, C.R. Doc. 5, Pl.'s Conf.App. at tab 3).\nII. THE PRELIMINARY RESULTS OF THE NEW SHIPPER REVIEW\nCommerce issued the preliminary results of the new shipper review on March 2, 2004. Notice of Preliminary Results of Antidumping Duty New Shipper Review: Glycine from the People's Republic of China, 69 Fed.Reg. 9,804 (Dep't Commerce Mar. 2, 2004) [hereinafter \"Preliminary Results\"]. The Preliminary Results calculated a preliminary dumping margin of 8.89 percent, based in part on adverse inferences made from New Donghua's failure to report factors of production data to the best of its ability. Preliminary Results, 69 Fed.Reg. at 9,808. For the purpose of calculating U.S. price, Commerce made a preliminary finding that New Donghua's single U.S. sale was bona fide \u0097 i.e., not commercially unreasonable \u0097 with the qualification that the bona fide sale issue would be considered further. Id. at 9,807.\nIn the memorandum explaining the preliminary bona fide sale finding, Commerce *1336 found a large differential between New Donghua's U.S. sale price and the average unit values (\"AUVs\") for U.S. imports of glycine from China over the three-year period from 2001 through November 2003 ($2.54) and U.S. glycine imports from all countries ($2.67). Mem. from Matthew Renkey to Barbara E. Tillman Re: Bona Fide Nature of the Sale in the New Shipper Review of Hebei New Donghua Amino Acid Co., Ltd. at 3 (Dep't Commerce Feb. 24, 2004) [hereinafter \"Preliminary Bona Fides Memo\"]. Commerce declined to make a preliminary not bona fide finding on the basis of these price comparisons, explaining that New Donghua's U.S. sale was for food grade glycine while the comparison AUVs did not differentiate among the different grades of glycine. See id.\nCommerce remained concerned about the bona fide nature of the sale, however. It viewed the large price differential between the new shipper sale and the comparison AUVs as \"significant.\" Id. Commerce noted \"that the quantity of New Donghua's sale is low in comparison with other entries of glycine from the PRC, and is also low in comparison with the quantities of its other international sales to third country markets.\" Id. Commerce also remained \"concerned about the fact that this merchandise has not been resold by the importer.\" Id.\nIII. THE RECISION OF THE NEW SHIPPER REVIEW\nUltimately, Commerce did not adopt the preliminary position it took in the Preliminary Results and Preliminary Bona Fides Memo. Instead, Commerce rescinded the new shipper review on August 5, 2004, citing three factors as leading to the conclusion that \"New Donghua's single sale to the United States is not a bona fide commercial transaction\":\nA) the pricing of the sale is artificially high and otherwise commercially unreasonable;\nB) the quantity of the single shipment is extremely low in comparison with other sales from the People's Republic of China (PRC); and\nC) the importer has not resold the merchandise and has otherwise not acted in a commercially reasonable manner.\nMem. re: Bona Fides Analysis for Hebei New Donghua Amino Acid Co., Ltd.'s Sale in the New Shipper Review of Glycine from the People's Republic of China at 5 (Dep't Commerce July 23, 2004), Pl.'s Conf.App., Ex. 7 [hereinafter \"Final Bona Fides Memo\"]; see also Recision Notice, 69 Fed.Reg. 47,405.\nCommerce explained its decision not to maintain a bona fide sale finding on the ground that the price differential \"could not reasonably be accounted for solely by the difference between food and industrial grade glycine.\" Final Bona Fides Memo at 13. In reaching its conclusion as to price, Commerce compared New Donghua's U.S. sale price to (1) the weighted AUV of all Chinese glycine entries during the POR that were of the types covered by the antidumping duty order and not clearly aberrational, based on proprietary data in the United States Customs & Border Protection (\"CBP\") database;[3] (2) the weighted AUV of all Chinese imports of glycine during the POR based on public import statistics; and (3) the weighted AUV of U.S. imports of glycine from all countries during the POR based on publicly available U.S. import data. Id. at 11 (citing Preliminary Bona Fides Memo at 2 and attachments 2, 3). In reaching its conclusion as to quantity, Commerce compared New Donghua's U.S. sale quantity *1337 to quantities it sold to other markets during the POR and quantities of entries made by other Chinese glycine exporters during the POR. Final Bona Fides Memo at 16. In reaching its conclusion regarding the actions of the U.S. importer, Commerce relied on information provided by New Donghua. Id. at 17-18.\n\nJURISDICTION\nNew Donghua timely filed a summons challenging Commerce's decision to rescind the new shipper review on August 13, 2004. New Donghua timely filed its complaint on August 26, 2004. The court has jurisdiction pursuant to 19 U.S.C. \u00a7 1516a(a) and 28 U.S.C. 1581(c) (2004).\n\nSTANDARD OF REVIEW\nAs with other antidumping duty proceedings, the court reviews Commerce's determinations in new shipper reviews to determine whether they are \"unsupported by substantial evidence on the record, or otherwise not in accordance with law.\" 19 U.S.C. \u00a7 1516a(b)(1)(B)(i) (2000); Tianjin Tiancheng Pharm., 366 F.Supp.2d at 1249.\n\nDISCUSSION\nNew Donghua contends that (1) Commerce lacked the authority to determine whether New Donghua's sales of glycine were bona fide, and (2) even if Commerce possessed such authority, Commerce misapplied its bona fide sale test.\nI. COMMERCE HAS STATUTORY AUTHORITY TO CONDUCT A \"TOTALITY OF THE CIRCUMSTANCES\" BONA FIDE SALE TEST IN THE COURSE OF A NEW SHIPPER REVIEW\nNew Donghua challenges the bona fide sale test conducted by Commerce as an unreasonable interpretation of the statute. According to New Donghua, Commerce's practice is contrary to Congress' intent because, without any direction from the statute, Commerce wields the bone fide sale test like an anti-fraud test, imposing the maximum antidumping duties on new shippers whose transactions are deemed not bona fide. See Pl.'s Conf. Op. Br. at 17. New Donghua also challenges the act as unreasonably vague in its application, with no parameters to indicate in advance how Commerce will treat a sale. See id. at 17-18. Both arguments fail.\nA. Commerce's Bona Fide Sale Test Is Consistent With Its Statutory Authority\nThe court analyzes New Donghua's challenge pursuant to the two-step analysis prescribed by Chevron, U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The first question is \"whether Congress has directly spoken to the precise question at issue.\" Id. at 842, 104 S.Ct. 2778. If so, the court \"must give effect to the unambiguously expressed intent of Congress.\" Id. at 843, 104 S.Ct. 2778. If not, the court addresses the second question of whether Commerce's interpretation \"is based on a permissible construction of the statute.\" See id.; see also Koyo Seiko Co. v. United States, 258 F.3d 1340, 1346 (Fed.Cir.2001).\nUnder 19 U.S.C. \u00a7 1675(a)(2)(B), Commerce is required to conduct periodic administrative reviews \"for new exporters and producers\" who submit a properly documented request for review. See id. These reviews require Commerce to determine the normal value, export price, and resulting dumping margin for \"each entry\" of the subject merchandise. See 19 U.S.C. \u00a7 1675(a)(2)(A)(i), (ii). Although the term \"each entry\" seems all-inclusive, this court has recognized that it does not \"compel inclusion of all sales, no matter how distorting or unrepresentative.\" American Permac v. United States, 16 C.I.T. 41, 44, 783 F.Supp. 1421, 1424 (1992). Thus, and *1338 as New Donghua concedes, the statute does not address specifically the issue of whether, in the course of reviews for new shippers, Commerce is authorized to determine whether the new shippers' sales into the United States are bona fide or commercially reasonable. Pursuant to the second step in the Chevron analysis, the issue, then, is whether Commerce has engaged in a permissible construction of the latent ambiguity in the statute's use of the term \"each entry.\" This inquiry is principally to determine whether Commerce's construction was reasonable. See Fujitsu General Ltd. v. United States, 88 F.3d 1034, 1043 (Fed.Cir.1996). New Donghua \"bear[s] the burden of showing that the agency's approach is arbitrary or otherwise unreasonable.\" Koyo Seiko, 258 F.3d at 1347.\nCommerce has articulated the bona fide sale test in the course of its new shipper reviews. See, e.g., Freshwater Crawfish Tail Meat from the People's Republic of China, 68 Fed.Reg. 1,439, 1,440 (Dep't Commerce Jan. 10, 2003) (notice of final results and recision of new shipper review); Fresh Garlic from the People's Republic of China, 67 Fed.Reg. 11,283 (Dep't Commerce Mar. 13, 2002) (final results and recision of new shipper review). Commerce's reasonable interpretations of its statutory authority in the course of new shipper reviews are entitled to deference. See Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372, 1382 (Fed.Cir.2001) (\"statutory interpretations articulated by Commerce during its antidumping proceedings are entitled to judicial deference under Chevron.\").[4]\nCommerce's use of a \"totality of the circumstances\" bona fide sale test in new shipper reviews constitutes a permissible construction of the statute. The reasonable inference from the statutory term \"each entry\" is that it does not mandate the use of unrealistic, commercially unreasonable sales prices in the calculation of U.S. price. See Tianjin Tiancheng Pharm., 366 F.Supp.2d at 1249 (\"[T]he ultimate goal of the new shipper review is to ensure that the U.S. price side of the antidumping calculation is based on a realistic figure....\"); see also American Permac, 16 CIT at 42-43, 783 F.Supp. at 1423 (\"Fair (apples to apples) comparison is the goal of the price comparisons required by the antidumping laws, as the courts have stated time and again.\") (citing U.H.F.C. Co. v. United States, 916 F.2d 689, 697 (Fed.Cir.1990); Smith-Corona v. United States, 713 F.2d 1568, 1578 (Fed.Cir.1983); AOC International, Inc. v. United States, 13 CIT 716, 718, 721 F.Supp. 314, 317 (1989)). In accordance with the goal of ensuring a realistic U.S. price figure, it is reasonable that Commerce uses the bona fide sale test to exclude sales that are \"not typical of normal commercial transactions in the industry.\" Tianjin Tiancheng Pharm., 366 F.Supp.2d at 1248. Accordingly, the court continues to recognize the bona fide sale test as a valid exercise of Commerce's authority. See, e.g., id., at 1248; Windmill Int'l Pte., Ltd. v. United States, 193 F.Supp.2d 1303, 1312 (CIT 2002); Am. Silicon Techs. v. United States, 24 CIT 612, 616, 110 F.Supp.2d 992, 995 (2000).\nApparently conceding a statutory gap, New Donghua argues that Commerce's statutory authority to conduct new shipper reviews is confined to preventing fraud. See Pl.'s Conf. Op. Br. at 20. As New Donghua cites no explicit statutory language *1339 to this effect, this argument implies that Commerce's duty to calculate antidumping margins based on \"each entry\" necessarily excepts fraudulent sales but not sales that are unrepresentative of commercial conduct and extremely distortive. Logic does not dictate such a conclusion. Commerce must calculate a realistic U.S. price so that a fair comparison may be made with normal value, and a commercially unreasonable sale may undermine this objective even if Commerce is unable to determine that such sale resulted from fraud. See Windmill, 193 F.Supp.2d at 1312. Accordingly, Commerce acts within its statutory authority when it excludes atypical and distortive transactions without establishing the civil or criminal law elements of fraud.\nB. Commerce's Bona Fide Sale Test Is Not Unreasonably Vague\nNext, New Donghua argues that Commerce's bona fide sale test \"is unreasonable because there are no parameters.\" Pls' Op. Br. at 17. On the contrary, parameters exist. Because the bona fide sale test derives from a seemingly all-inclusive statutory term, Commerce's authority to exclude sales as not bona fide is limited to \"exceptional circumstances when those sales are unrepresentative and extremely distortive.\" Am. Silicon Techs., 24 CIT at 616, 110 F.Supp.2d at 995 (quoting FAG U.K. Ltd., v. United States, 20 CIT 1277, 1281-82, 945 F.Supp. 260, 265 (1996)); see also FAG U.K., 20 CIT at 1282, 945 F.Supp. at 265 (\"In essence, a sale is excluded only when its inclusion would lead to an unrepresentative price comparison, thus frustrating the `apples to apples' comparison goal of the antidumping laws.\"). In determining whether a sale is representative of a new shipper's commercial behavior, Commerce applies a \"totality of circumstances\" test focusing on whether or not the transaction is \"commercially reasonable\" or \"atypical of normal business practices.\" Windmill, 193 F.Supp.2d at 1313; see also Tianjin Tiancheng Pharm., 366 F.Supp.2d at 1248. In evaluating whether or not a sale is \"commercially reasonable,\" Commerce has considered the following factors, among others: (1) the timing of the sale, (2) the price and quantity; (3) the expenses arising from the transaction, (4) whether the goods were resold at a profit, (5) and whether the transaction was at an arm's length basis. See Windmill, 193 F.Supp.2d at 1310; Am. Silicon Techs., 24 CIT at 616, 110 F.Supp.2d at 995. Commerce's practice makes clear that it is highly likely to examine objective, verifiable factors to ensure that a sale is not being made to circumvent an antidumping duty order. Thus, a prospective new shipper is on notice that it is unlikely to establish the bona fides of a sale merely by claiming to have sold in a manner representative of its future commercial practices.\nNew Donghua apparently seeks either prospective guidance or \"bright-line rules\" regarding bona fide sales. Prospective guidance would conflict with the statutory requirement that antidumping duties be calculated on the basis of entries of subject merchandise, see 19 U.S.C. \u00a7 1675(a)(2)(A), a requirement reflected in the pertinent Commerce regulation. See 19 C.F.R. \u00a7 351.212(a) (\"the United States uses a `retrospective' assessment system under which final liability for antidumping and countervailing duties is determined after merchandise is imported.\"). Similarly, to the extent that New Donghua seeks \"bright-line rules\" that would give clearer guidance than already exists, it makes the unreasonable demand that Commerce anticipate every circumstance under which any sale of any type of merchandise would be \"unrepresentative and extremely distortive.\" See Am. Silicon Techs., 24 CIT at 616, 110 F.Supp.2d at 995. Even if such an enterprise were practicable and not contrary to law, the court doubts that the *1340 result would offer clearer guidance to a particular shipper of a particular good. See Tianjin Tiancheng Pharm., Slip Op. 05-29 at 32-33.[5]\nII. COMMERCE PROPERLY APPLIED THE BONA FIDE SALE TEST\nNew Donghua contends that, even if Commerce had authority to apply a bona fide sale test considering the totality of the circumstances, Commerce lacked substantial record evidence to support its determination that New Donghua's sale was not bona fide. As noted above, Commerce based its determination on three factors: (1) the price was aberrationally high in comparison with Chinese prices and the world price; (2) the quantity of the sale was extremely low in comparison with other shipments of glycine from China; and (3) the importer's behavior was inconsistent with good business practices. See Final Bona Fides Memo at 5-21.\nA. New Donghua's Sale Price Was Aberrationally High\nCommerce determined that New Donghua's sale price was aberrational by comparing the New Donghua price to (1) the weighted AUV of all covered Chinese glycine entries during the POR that were not clearly aberrational, based on proprietary data in the CBP database; (2) the weighted AUV of all Chinese imports of glycine during the POR, based on public import statistics; and (3) the weighted AUV of U.S. imports of glycine from all countries during the POR, based on publicly available U.S. import data. Final Bona Fides Mem. at 11.[6] New Donghua's sale price was substantially higher than the three comparison values.[7] These price comparisons constitute substantial evidence for Commerce's conclusion that New Donghua's sale price was \"substantially higher than any observed value.\" Id. at 11.\nNew Donghua challenges Commerce's findings as to price comparisons on several grounds. First, New Donghua argues that, in establishing a benchmark with the AUV of Chinese glycine prices based on proprietary import data, Commerce improperly excluded as aberrational unit values that were higher than New Donghua's price. New Donghua cites three examples of Chinese glycine sales during the POR in which the unit-values of were higher than New Donghua's price. However, the sales cited by New Donghua pertain to a non-glycine product or a type of glycine not subject to the antidumping duty order. See Rebuttal Brief of Petitioners Dow Chemical Company and Chattem Chemicals, Inc. (June 23, 2004) at 4 n. 11, C.R. Doc. 22. (hereinafter \"Pet'rs Rebuttal Br.\").[8] New Donghua does not challenge *1341 directly Commerce's methodology of excluding entries not covered by the antidumping duty order.\nRegarding the prices actually used in the comparison, Commerce excluded only one entry for the POR of the relevant type.[9] This excluded entry exceeded the closest relevant type unit-value for an entry not originating with New Donghua by over 750 percent, making it an obvious outlier. Commerce reasonably excluded the sale as aberrational.\nSecond, New Donghua contends Commerce contradicted itself by finding New Donghua's price to be artificially high in the bona fides analysis after finding the price to be too low in the Preliminary Results antidumping duty calculations, wherein Commerce calculated an dumping margin of 8.89 percent for New Donghua. See Prelim. Results, 69 Fed.Reg. at 9,808. No contradiction exists, however. The inconsistency identified by New Donghua is based on mistaken comparisons between two different analyses, each with its own objective. See Tianjin Tiancheng Pharm., Slip Op. 05-29 at 15 n. 7. Commerce performs dumping calculations to identify and assess duties upon foreign merchandise that is, or is likely to be, \"sold in the United States at less than its fair value.\" 19 U.S.C. \u00a7 1673. Numerous rules apply to dumping margin calculations that are irrelevant to the bona fide sale analysis. For instance, New Donghua's preliminary dumping margin was based, in part, upon adverse inferences made from New Donghua's failure to cooperate to the best of its ability. Prelim. Results, 69 Fed.Reg. at 9,805-06. In contrast, a bona fide sale analysis seeks to exclude those sales designed to appear less harmful than sales from other subject producers in the hope of securing a competitive advantage for the subsequent period of review. This distinction between dumping margin calculations and bona fide sales analyses was explained in Tianjin Tiancheng Pharm.:\nthe combination of a high \"all others\" rate and the [p]laintiff's high price compared to other import prices could mean two things: either [p]laintiff truly means to replicate the high price sale upon which it predicated the review, or, [p]laintiff will take advantage of one high price sale to secure a lower-than-average dumping margin, and then typically charge a far lower price (low enough to undercut the competition that has a higher dumping margin, but still high enough to make a hefty profit which would otherwise be unavailable). Considering that the latter is a far more profitable avenue, and that, because of the extended timelines of antidumping reviews, [p]laintiff could have more than two years to enjoy an extremely advantageous, and possibly predatory, market position predicated entirely on an atypical sale, the weight of the evidence is in Commerce's favor in holding that the scenario above is likely indicative of an atypical, or non-bona fide, sale. Moreover, given that the dumping margin calculation and the bona fide analysis address different concerns, there is nothing inherently contradictory in Commerce's finding that a price was low enough to be dumped, and yet so high when compared to other prices in the U.S. market as to be unlikely to be sustained in the future, especially where the motives for not sustaining the price are so clear.\nat 1252 n. 7 (citation omitted, emphasis added). If New Donghua's argument were accepted, a firm intent on unfair competition would be free to manipulate the antidumping duty regime by selling at a price between normal value and the export prices of other subject firms and then lowering *1342 its price after obtaining an advantageous cash deposit rate. This is not to say that a new shipper seeking review of a single sale is destined to receive the country-wide rate; price alone would likely be an insufficient basis on which to exclude a transaction. Rather, the bona fides analysis encompasses factors beyond price to assess whether the sale(s) under review are indicative of future commercial behavior. See Final Bona Fides Memo at 4 (\"Although single sales, even those involving small quantities, are not inherently commercially unreasonable, those factors taken together with other aspects of a transaction may support a conclusion that a transaction is not bona fide.\"); see also Issues and Decision Mem.: New Shipper Review of Clipper Manufacturing Ltd. in Fresh Garlic from the PRC: Final Results of Administrative Review and Recision of New Shipper Review, 67 Fed.Reg. 11,283 (Dep't Commerce March 13, 2002) (stating that, in bona fide sales analyses, Commerce examines \"a number of factors, all of which may speak to the commercial realities surrounding an alleged sale of subject merchandise.\").\nThird, New Donghua argues that the use of \"dumped\" Chinese glycine import prices for comparison purposes is inconsistent with legislative history and precedent. Pl.'s Conf. Op. Br. at 24-25. To support its contention, New Donghua cites the conference report on the 1988 amendments to the Tariff Act of 1930, see 1998 U.S.C.A.A.N. 1547, 1623, Omnibus Trade and Competitiveness Act of 1988, Conf. Rep. to Accompany H.R. 3, H. Report No. 576, as well as precedent. See Kerr-McGee Chem. Corp. v. United States, 21 CIT 1353, 1366, 985 F.Supp. 1166, 1177 (1997); Tehnoimportexport, UCF America, Inc. v. United States, 16 CIT 13, 16-17, 783 F.Supp. 1401, 1405 (1992). These authorities do not pertain to Commerce's bona fide sales analyses; they refer to the requirement that Commerce avoid using dumped prices in the calculation of surrogate factors of production in non-market economy antidumping cases. As discussed above, there is no statutory basis for imposing the full spectrum of dumping margin calculation rules on Commerce's bona fide sale test. See Final Bona Fides Memo at 12 (\"[T]he question being addressed is not what the U.S. price of glycine should be, but whether the price of glycine determined by New Donghua for a single sale is an artificial one, arrived at largely for the purposes of establishing a new cash deposit rate.\").\nApparently, New Donghua would prefer its sale be compared with the AUVs of Chinese glycine that include antidumping duties. This position presumes that AUVs inclusive of dumping duties reflect realities in the U.S. market because all but one of the subject entries for the POR were subject to the same cash deposit rate of 155.59 percent ad valorem. Neither New Donghua's price nor the weighted AUV comparison prices for the POR, however, include the cash deposit paid. If Commerce were to compare the price of New Donghua's sale, which does not include the value of cash deposits paid, with weighted AUV data inclusive of cash deposits paid as a contingent liability, the result would be a distorted comparison of two different data types. Without running afoul of New Donghua's legislative intent argument, Commerce, of course, could add cash deposit values to New Donghua's price and the comparison prices, which would not alter the price differentials.\nB. The Quantity of the Sale Was Extremely Low\nThe second factor underlying Commerce's determination is that the quantity of New Donghua's sale was found to be \"atypical of the company's normal business practices (its sales to other markets were *1343 of significantly larger quantities), as well as the business practices of other Chinese exporters of glycine, which also tend to sell in larger quantities.\" Final Bona Fides Memo at 16.[10] Substantial record evidence exists for both conclusions.\nSome of New Donghua's exports during the POR were made through an affiliate. As noted by New Donghua, the affiliate made three glycine shipments during the POR involving small quantities. See Pl.'s Conf. Op. Br. at 28.[11] These quantities contradict the parenthetical statement made in Commerce's conclusion, i.e., that New Donghua's \"sales to other markets were of significantly larger quantities,\" but only if the statement is understood to include individual sales involving New Donghua's affiliate. This apparent contradiction is, by itself, insufficient to deprive Commerce of an evidentiary basis for its conclusion that the U.S. sale's quantity was atypical of New Donghua's normal business practices. As Commerce stated in the Final Bona Fides Memo, the quantity of New Donghua's U.S. sale is \"very low when compared to its other international sales of glycine,\" and the company \"made only one shipment to the United States during the POR.\" Final Bona Fides Memo at 16. New Donghua's affiliate made three shipments to a third country during the POR. Aside from these three shipments, all related individual shipment quantities to other markets were indeed significantly higher than the U.S. sale quantity. See New Donghua Add'l Information for Response to Fourth Supp. Questionnaire at Exs. 3, 4 (May 20, 2004). There is no basis for requiring Commerce to give more weight to an affiliate's behavior than the principal's.\nCommerce's conclusion as to the U.S. sale's atypical quantity is also supported by comparisons to other Chinese glycine exporters' quantities. Commerce found New Donghua's U.S. sale quantity to be the \"lowest quantity among glycine entries from China during the POR.\" Final Bona Fides Memo at 16.[12] New Donghua identifies three sales from the PRC by other firms involving relatively small quantities, but, similar to its flawed argument regarding price, these quantities do not pertain to types of entries covered by the antidumping duty order. See id.[13]\nC. The Actions of New Donghua's U.S. Customer Indicate the Transaction Was Not Commercially Reasonable\nCommerce's third basis for rescinding the review was the background and conduct of New Donghua's U.S. customer. Commerce found that the customer (1) \"had no previous experience in the glycine business, nor in the chemicals business in general,\" (2) \"paid far above the prevailing import price for glycine from China, and also far above the import price for glycine from all markets,\" (3) held the glycine so long that 75 percent of its 24-month shelf-life had expired, and (4) had no prospects for a sale at the time of Commerce's decision to rescind the review. Final Bona Fides Memo at 19-20. New Donghua does not contest these findings. Because these facts suggest that the new shipper sale's only purpose was to secure an advantageous cash deposit rate, they support Commerce's conclusion that the transaction was not conducted in a commercially reasonable manner.\nNew Donghua challenges Commerce's interpretation of the customer's post-sale *1344 behavior, describing as reasonable the customer's \"express intention of obtaining the results of the new shipper review in order to set a proper resale price.\" See Pl.'s Conf. Op. Br. at 29 (citing New Donghua First Supp. Questionnaire Response (Dec. 19, 2003), Supp \u0097 20 \u0097 21, Pl.'s Conf.App. at tab 3). Similarly, New Donghua's general position is that the circumstances of the sale \u0097 including price and quantity \u0097 are entirely consistent with its position that the U.S. sale was a test sale and should have been evaluated as such. Commerce acknowledged New Donghua's position, but invocation of the term \"test sale\" does not have a talismanic effect, negating all indications of an atypical transaction. When a purported test sale is under review, Commerce is not obligated to overlook evidence suggesting that the U.S. sale \"was made solely for the purpose of establishing a new antidumping deposit rate, without regard to the commercial reasonableness of the sale.\" See Final Bona Fides Memo at 20. Indeed, the artificial appearance of the U.S. sale is New Donghua's fault:\nIn one-sale reviews, there is, as a result of the seller's choice to make only one shipment, little data from which to infer what the shipper's future selling practices would look like. This leaves the door wide to the possibility that the sale may not, in fact, be typical, and that any resulting antidumping duty calculation would be based on unreliable data.\nTianjin Tiancheng Pharm., 366 F.Supp.2d at 1263.\nNew Donghua attempts to support its test sale argument by citing Am. Silicon Techs., which upheld Commerce's decision to conduct a new shipper review on the basis of a test sale. See 24 CIT at 619, 110 F.Supp.2d at 998. In that case, however, Commerce was presented with verifiable indications of the bona fide nature of the test sale. The seller did not request a review, lessening concerns about the seller's motives for a small, high-priced sale. Id. The buyer was \"an end-user of the silicon metal and did not resell the merchandise at a loss.\" Id. (contrasting the buyer's conduct with the unprofitable sale in Cut-to-Length Carbon Steel Plate from Romania, 63 Fed.Reg. 47,232 (Dep't Commerce Sept 4, 1998) (notice of recision of review)). The stated purpose of the test sale \u0097 to test the quality of the merchandise \u0097 was specific and germane to the buyer's business, which used the merchandise. See Am. Silicon Techs., 24 CIT at 619, 110 F.Supp.2d at 998.\nHere, on the other hand, New Donghua made a single sale and then requested the new shipper review. The U.S. customer is not an end-user and has no previous experience with glycine or the chemicals business in general. As an aspiring middleman in the glycine business, it could reasonably be expected to seek a profitable resale. Its declared intention for not selling the merchandise \u0097 to wait for the final results of the review \u0097 is generic and consistent with a desire to obtain a favorable cash deposit rate before lowering prices.\n\nCONCLUSION\nThe court realizes that when there are very high antidumping duty margins, it may be very difficult for any affected company to enter or reenter the U.S. market. Nonetheless, Commerce is not amiss in trying to avoid creating an unfair playing field and seeking evidence of a bit more of a genuine investment as a show of good faith by the new shipper. Otherwise, circumvention is too likely. On the other hand, the standard for what is a non-bona fide sale must remain relatively stringent, as Commerce's bona fide sales analysis merely fills a gap left by Congress with regard to the exceptional case.\n*1345 Commerce's decision to rescind New Donghua's new shipper review was supported by substantial evidence and in accordance with the law. Accordingly, New Donghua's motion for judgment on the agency record is denied and judgment is entered for Defendant.\nIT IS SO ORDERED.\nNOTES\n[1] One Chinese exporter, Nantong Dongchang Chemical Industry Corp., has a separate antidumping duty rate of 18.60 percent. See Glycine from the Peoples [sic] Republic of China, 66 Fed.Reg. 13,284, 13,285 (Mar. 5, 2001) (amended final results of new shipper review).\n[2] [ ]\n[3] [ ]\n[4] Commerce's regulations for new shipper reviews are set forth in 19 C.F.R. \u00a7 351.214. These regulations, like the statute, do not discuss a bona fide sale test. See 19 C.F.R. \u00a7 351.214(b)(2)(iv)(C) (mandating only that a request for a new shipper review establish \"[t]he date of the first sale to an unaffiliated customer in the United States.\").\n[5] In Tianjin Tiancheng Pharm., the court noted that Commerce's practice is to evaluate the bona fide nature of a sale on a case-by-case basis: \"[w]hile some bona fides issues may share commonalities across various Department cases, each one is company-specific and may vary with the facts surrounding each sale.\" 366 F.Supp.2d at 1263 (quoting Issues & Dec. Mem. to Final Results of the Antidumping Duty New Shipper and Administrative Reviews on Certain Preserved Mushrooms for the People's Republic of China \u0097 February 1, 2001 through January 31, 2002, (July 11, 2003), available at http://ia.ita.doc.gov/frn/summary/prc/XX-XXXXX-X.pdf). The court upheld Commerce's exclusion of a single sale as not bona fide: \"Given the unusual sale price involved, it was not unreasonable for Commerce to look beyond the price to determine whether other characteristics of the sale were such as to demonstrate that the sale as a whole, was atypical.\" Slip Op. 05-29 at 33. Atypical or non-typical in this context means unrepresentative of a normal business practice. See Am. Silicon Techs., 24 CIT at 616, 110 F.Supp.2d at 995.\n[6] [ ]\n[7] [ ]\n[8] [ ]\n[9] [ ]\n[10] [ ]\n[11] [ ]\n[12] [ ]\n[13] [ ]\n"} -{"text": " FOR PUBLICATION\n UNITED STATES COURT OF APPEALS\n FOR THE NINTH CIRCUIT\n\nKATHLEEN NICHOLS, \uf8fc\n Plaintiff-Appellant,\n v.\n No. 07-15654\nLAURA DANCER, in her official\n D.C. No.\ncapacity and individual capacity;\nJAMES L. HAGER, in his official \uf8fd CV-04-00559-\ncapacity and individual capacity; LRH/LRL\nand WASHOE COUNTY SCHOOL OPINION\nDISTRICT, a political subdivision of\nthe State of Nevada,\n Defendants-Appellees.\n \uf8fe\n Appeal from the United States District Court\n for the District of Nevada\n Larry R. Hicks, District Judge, Presiding\n\n Argued and Submitted\n October 23, 2008\u2014San Francisco, California\n\n Filed May 18, 2009\n\n Before: J. Clifford Wallace, Sidney R. Thomas and\n Susan P. Graber, Circuit Judges.\n\n Opinion by Judge Thomas\n\n\n\n\n 5965\n\f NICHOLS v. DANCER 5967\n\n\n\n\n COUNSEL\n\nJeffrey S. Blanck, Reno, Nevada, for the appellant.\n\nC. Robert Cox, Christopher D. Jaime, Maupin, Cox & LeGoy,\nReno, Nevada, for the appellees.\n\n\n OPINION\n\nTHOMAS, Circuit Judge:\n\n This appeal presents the question of whether the patronage\ndismissal doctrine immunizes public employers who termi-\nnate employees on the basis of perceived lack of personal loy-\nalty. We conclude that it does not and remand for further\nproceedings.\n\n I\n\n Kathleen Nichols worked for the Washoe County School\nDistrict for nine years, her last six as an administrative assis-\n\f5968 NICHOLS v. DANCER\ntant to the General Counsel for the district, Jeffrey Blanck.\nOver the course of the six years that Nichols worked for\nBlanck, they became friends. In her position as assistant to\nBlanck, Nichols was privy to sensitive information about con-\nfidential negotiations as well as information about employees,\ntheir backgrounds, and disciplinary measures. By all accounts,\nthe school district had no problems with Nichols or her job\nperformance. In job evaluations, Nichols received only \u201ccom-\nmendable\u201d and \u201ccompetent\u201d marks, the two highest marks.\n\n Blanck began having problems with the School District\nSuperintendent James Hager. The District transferred Nichols\nto a job in Human Resources in January 2004 while it decided\nwhether to terminate Blanck. By that time, Nichols had\nlearned that Blanck had hired legal counsel in case he was ter-\nminated.\n\n The District\u2019s Board of Trustees held an open meeting to\ndiscuss Blanck\u2019s future with the District, among other items.\nThe day before the meeting, Nichols spoke with Laura\nDancer, the Assistant Superintendent in charge of Human\nResources, about her job security. Dancer told Nichols that\nafter the board meeting, Nichols \u201cwould be restored to her\nposition as administrative assistant to general counsel, whom-\never that general counsel was to be.\u201d\n\n Nichols testified that she attended the board meeting for\ntwo reasons: to support a friend in a different department who\nwas to receive an award and to see what would happen to her\nemployer, Blanck. In Nichols\u2019s words:\n\n I wanted to find out what was going to happen with\n [Blanck\u2019s] position with the District . . . . I had been\n in at the beginning of the formation of the legal divi-\n sion and . . . I felt that it was of great interest to me\n to see whether or not that division was going to be\n continuing or not . . . . Nichols denies that she\n attended the meeting to support Blanck. No one\n\f NICHOLS v. DANCER 5969\n alleges that Nichols spoke publicly during the meet-\n ing.\n\n When Nichols arrived at the meeting, the room was\ncrowded. Nichols sat next to Blanck, who was already seated.\nLater in the meeting, the Board voted to terminate Blanck.\n\n The next day, Dancer reconsidered her promise to reinstate\nNichols as the assistant to the new Legal Counsel. Dancer\nstated that:\n\n After the night of the meeting, it was clear to me that\n Mrs. Nichols\u2019 continued contact and support and\n interest in Mr. Blanck posed a conflict for her to be\n in the legal counsel office . . . . After attending the\n open meeting, I did reconsider my earlier decision\n about her placement and determined that her place-\n ment needed to be other than the legal counsel\n office.\n\nAside from Nichols\u2019s seat next to Blanck at the open meeting,\nthe record provides no other reason why Dancer would recon-\nsider her earlier statement to Nichols.\n\n Nichols met with Dancer the day after the meeting. Dancer\ntold Nichols that she would not be transferred back to the\nLegal Counsel\u2019s office and that her salary would be frozen at\nits current level for one year. According to Nichols, Dancer\nsaid that they were \u201cforced to question\u201d her loyalty. Nichols\nexpressed her unhappiness with that decision, and Dancer\nasked Nichols whether she had considered retirement as an\nalternative to continuing work in the Human Resources\ndepartment. Nichols had never spoken to Dancer about the\npossibility of retirement. Nichols stated that she had the feel-\ning that she \u201creally wasn\u2019t wanted around there.\u201d\n\n Soon after the board meeting, Nichols was in her office\nwhen Blanck called her. Nichols informed Blanck that she\n\f5970 NICHOLS v. DANCER\nwould be taking some time off, that outside counsel was com-\ning into the office, and that Dancer had requested a list of\nongoing matters. Dancer considered this communication to\ncontain \u201cvery sensitive information, including information\npertaining to Mr. Blanck\u2019s own case\u201d against the District for\nwrongful termination. Dancer considered the contact \u201cinap-\npropriate.\u201d After Nichols gave Blanck this information, the\nDistrict claims that some files went missing. Following the\nphone exchange between Nichols and Blanck, Nichols took\nsome time away from work. She eventually decided to retire,\nallegedly \u201cto her severe financial detriment.\u201d\n\n Nichols sued Dancer, Hager, and the Washoe County\nSchool District for First Amendment retaliation and claimed\nthat by firing her, Defendants violated her First Amendment\nright to associate with Blanck. The district court granted\nDefendants\u2019 motion for summary judgment, holding that\nNichols was a confidential employee vulnerable to a patron-\nage dismissal without regard for her First Amendment rights.\n\n II\n\n A\n\n [1] A public employer may not unduly abridge an employ-\nee\u2019s First Amendment rights. Keyishian v. Bd. of Regents, 385\nU.S. 589, 605-06 (1967). However, government employers\nmay restrict their employees\u2019 speech more than the govern-\nment may restrict the speech of it constituents. Hudson v.\nCraven, 403 F.3d 691, 696 n.1 (9th Cir. 2005) (\u201c[T]he gov-\nernment as employer indeed has broader powers to regulate\nspeech than does the government as sovereign.\u201d).\n\n To establish a prima facie case of First Amendment retalia-\ntion, a government employee must show that \u201c(1) she engaged\nin protected speech; (2) the defendants took an \u2018adverse\nemployment action\u2019 against her; and (3) her speech was a\n\u2018substantial or motivating\u2019 factor for the adverse employment\n\f NICHOLS v. DANCER 5971\naction.\u201d Thomas v. City of Beaverton, 379 F.3d 802, 808 (9th\nCir. 2004) (quoting Coszalter v. City of Salem, 320 F.3d 968,\n973 (9th Cir. 2003)).\n\n In the paradigmatic case, if the government employee can\nsucceed in her prima facie claim, the burden shifts to the gov-\nernmental defendants\n\n to demonstrate either that, under the balancing test\n established by Pickering v. Board of Education . . .\n the employer\u2019s legitimate administrative interests\n outweigh the employee\u2019s First Amendment rights or\n that, under the mixed motive analysis established by\n Mt. Healthy City School District Board of Education\n v. Doyle . . . the employer \u201cwould have reached the\n same decision even in the absence of the [employ-\n ee\u2019s] protected conduct.\u201d\n\nThomas, 379 F.3d at 808 (citations omitted).\n\n In Pickering, the Supreme Court stated that in First Amend-\nment cases against a state entity, \u201c[t]he problem . . . is to\narrive at a balance between the interests of the [employee], as\na citizen, in commenting upon matters of public concern and\nthe interest of the State, as an employer, in promoting the effi-\nciency of the public services it performs through its employ-\nees.\u201d Pickering v. Bd. of Educ., 391 U.S. 563, 568 (1968).\n\n [2] Under certain circumstances, a public employer is per-\nmitted to take adverse employment action against an\nemployee for engaging in speech that is normally protected by\nthe First Amendment, and the court need not conduct a Pick-\nering balancing test. For example, the patronage dismissal\ndoctrine allows public employers to terminate certain public\nemployees on the basis of their political beliefs and loyalties.\nSee generally Branti v. Finkel, 445 U.S. 507 (1980). Here, the\ndistrict court found that Nichols was a confidential employee\nand that her termination was a patronage dismissal. Accord-\n\f5972 NICHOLS v. DANCER\ningly, the district court granted summary judgment without\nconducting a full First Amendment examination or a Picker-\ning balancing analysis. However, because Nichols was termi-\nnated for a perceived lack of personal loyalty, rather than\npolitical loyalty, we conclude that the patronage dismissal\ndoctrine does not apply to her termination. We therefore must\nvacate the summary judgment and remand the case to the dis-\ntrict court so that it may conduct a traditional First Amend-\nment analysis.\n\n B\n\n [3] An employer engages in patronage dismissals when a\nnewly elected or appointed public officer fires existing\nemployees on the basis of their political beliefs or loyalties.\nElrod v. Burns, 427 U.S. 347, 353 (1976). In Elrod, a newly\nelected Democratic sheriff fired four Republican employees\nin the sheriff\u2019s office because of their political beliefs. Id. at\n350-51. To keep their jobs, the employees were required to\n\u201cpledge their political allegiance to the Democratic Party,\nwork for the election of other candidates of the Democratic\nParty, contribute a portion of their wages to the Party, or\nobtain the sponsorship of a member of the Party.\u201d Id. at 355.\n\n In Elrod, the plurality noted that \u201c[i]t is not only belief and\nassociation which are restricted where political patronage is\nthe practice. The free functioning of the electoral process also\nsuffers.\u201d Id. at 356. For that reason, patronage dismissals sur-\nvive constitutional challenge only when they \u201cfurther some\nvital government end by a means that is least restrictive of\nfreedom of belief and association in achieving that end, and\nthe benefit gained . . . outweigh[s] the loss of constitutionally\nprotected rights.\u201d Id. at 363. Justices Stewart and Blackmun,\nlimiting the decision with their concurrence, held that \u201ca non-\npolicymaking, nonconfidential government employee [can-\nnot] be discharged or threatened with discharge from a job\nthat he is satisfactorily performing upon the sole ground of his\npolitical beliefs.\u201d Id. at 375.\n\f NICHOLS v. DANCER 5973\n [4] The Supreme Court refined the patronage dismissal\ndoctrine in Branti v. Finkel, 445 U.S. 507 (1980). In Branti,\nthe Court held that a newly appointed Democratic Public\nDefender could not fire two Republican assistant public\ndefenders on the basis of their political beliefs. Id. at 519-20.\nAlthough the new Public Defender was not elected himself,\nhe had been appointed by a legislature with a newly Demo-\ncratic majority. The Court abandoned the policymaking/\nconfidential distinction and instead held that \u201cthe ultimate\ninquiry is not whether the label \u2018policymaker\u2019 or \u2018confiden-\ntial\u2019 fits a particular position; rather, the question is whether\nthe hiring authority can demonstrate that party affiliation is an\nappropriate requirement for the effective performance of the\npublic office involved.\u201d Id. at 518.\n\n [5] In both of these seminal cases, the constitutional analy-\nsis about party affiliation and job requirement was premised\non dismissal motivated by political beliefs. See also Rutan v.\nRepublican Party of Ill., 497 U.S. 62 (1990) (holding that pro-\nmotion and transfer denials as well as failure to hire on the\nbasis of political belief may also trigger the patronage dis-\nmissal doctrine\u2019s protection).\n\n We have adhered to the guidance of the Supreme Court. In\nFazio v. City and County of San Francisco, 125 F.3d 1328,\n1334 (9th Cir. 1997), we held that a District Attorney could\nfire an Assistant District Attorney for running against him in\nan election. We reasoned that \u201c[t]he rationale utilized to per-\nmit patronage dismissals in Elrod and Branti may also be\napplicable in the context of dismissals that are based on a\npublic employee\u2019s political activities, such as running for\noffice against an employer.\u201d Id. at 1331-32 (emphasis added).\nAlthough Fazio did not concern a newly elected official, it did\nconcern a dismissal motivated by expressly political activities.\n\n We have reached similar conclusions in other cases. See\nWalker v. City of Lakewood, 272 F.3d 1114, 1131-33 (9th Cir.\n2001) (holding that a policymaking city contractor could not\n\f5974 NICHOLS v. DANCER\nbring a First Amendment \u00a7 1983 claim against the city after\nit was terminated for criticizing the city in a political register);\nBiggs v. Best, Best & Krieger, 189 F.3d 989, 993-97 (9th Cir.\n1999) (holding that an employee of a law firm responsible for\nsome city functions could not bring a First Amendment\n\u00a7 1983 claim against the firm after she was terminated for the\npolitical statements of her family members). The conduct for\nwhich the employees in these cases were terminated was\novertly political.\n\n In concluding that the patronage dismissal doctrine applied\nand that Nichols was a confidential employee subject to\nabridged First Amendment rights, the district court relied on\nHobler v. Brueher, 325 F.3d 1145 (9th Cir. 2003). In Hobler,\nwe considered the dismissal of two assistants to a County\nProsecutor. The plaintiffs were the former right-hand employ-\nees of the outgoing County Prosecutor and were terminated\nby the incoming Prosecutor \u201cfor expressing their political sup-\nport for his election rival.\u201d Id. at 1148. We rejected the assis-\ntants\u2019 \u00a7 1983 claims because political loyalty was a\nrequirement for the effective performance of the assistants\u2019\njobs.\n\n [6] Hobler is distinguishable. The confidential secretaries\nin Hobler were fired because of their political beliefs and\npolitical support for the previous County Prosecutor. Nichols\nwas fired because of her perceived personal association with\nthe outgoing General Counsel; she never expressed her politi-\ncal loyalties.\n\n [7] We hold that the patronage dismissal doctrine does not\nextend to adverse employment actions motivated by the\nemployee\u2019s personal, rather than political, loyalties. The\npatronage dismissal doctrine is designed to ensure the integ-\nrity of the political process. To force a public official to work\ntowards his or her goals with the assistance of employees who\nmay be working against those goals has the potential to frus-\ntrate the will of the electorate. Personal disagreements do not\n\f NICHOLS v. DANCER 5975\ngive rise to the same potential for electoral frustration. Some\npersonal conflict exists in nearly every workplace, and severe\npersonal conflicts may be resolved through performance eval-\nuations or by resorting to the balancing test set out in Picker-\ning. Extending the patronage dismissal doctrine to matters of\npersonal loyalty would give public employers unjustified\npower to abridge their employees\u2019 First Amendment rights.\nWe decline to extend the doctrine in that way.\n\n In so holding, we join the analysis of the Fifth Circuit. In\nCorrea v. Fischer, 982 F.2d 931 (5th Cir. 1993), the Fifth Cir-\ncuit made a similar distinction between termination on the\nbasis of political beliefs and termination on the basis of per-\nsonal loyalty and compatibility. The court rejected the \u00a7 1983\nclaims of four staff members in the County Attorney\u2019s office\nwho had been fired by an incoming County Attorney. The\nemployees had previously worked for the outgoing County\nAttorney who opposed, but did not run against, the new\nCounty Attorney. However, the court found that the incoming\nand outgoing County Attorneys had a personal rather than a\npolitical conflict, and that the four employees were dismissed\non the basis of personal disloyalty and incompatibility, not\ntheir political beliefs. Id. at 933-34. The court concluded that\nthe political patronage dismissal doctrine did not apply to the\nemployees and thus a policymaker/confidential analysis was\nunnecessary. Id. at 936.\n\n For all these reasons, we conclude that the patronage dis-\nmissal doctrine does not apply to claims involving personal\nrather than political loyalty. Given our conclusion, we need\nnot\u2014and do not\u2014reach the questions of whether Nichols was\na policymaking/confidential employee or whether party affili-\nation was an appropriate requirement for her job.\n\n III\n\n [8] Because the patronage dismissal doctrine does not\napply, we must remand to the district court for re-\n\f5976 NICHOLS v. DANCER\nconsideration of the claims under the traditional First Amend-\nment government employee analysis. Although the parties\ninvite us to conduct such an examination ourselves, we\ndecline to do so. The district court did not reach that issue and\nwe are not confident that the record is complete. Thus, the\ninquiry is more appropriate for the district court. We remand\nto allow the district court to conduct such an analysis in the\nfirst instance. We do not prejudge the outcome of that inquiry.\n\n REVERSED AND REMANDED.\n\f"} -{"text": "\n(2008)\nBrett H. GILMAN, Plaintiff,\nv.\nSCHWAN'S HOME SERVICE, INC., Defendant.\nCivil No. 07-2048 (MJD/RLE).\nUnited States District Court, D. Minnesota.\nJuly 6, 2008.\n\nMEMORANDUM OPINION AND ORDER\nMICHAEL J. DAVIS, Chief Judge.\nThis matter is before the Court on Defendant Schwan's Home Service, Inc.'s (\"Schwan's\") motion for summary judgment.\n\nI. Background\nPlaintiff was employed by Schwan's as a route manager from August 2004 until March 14, 2006. As a route manager, Plaintiff would sell and deliver food products' from Schwan's depots to the customer's homes. The qualifications for this job required a high school degree or equivalent, one or more years of related experience and the ability to effectively operate a commercial vehicle pursuant to the Federal Department of Transportation (\"DOT\") eligibility requirements, including a driver's license and medical certification. There is no dispute that when the Plaintiff was hired, he possessed these qualifications.\nIn February 2006, the Plaintiff was diagnosed with Type 1 diabetes. As a result of this medical diagnoses, the Plaintiff was no longer certified to operate a commercial vehicle under the DOT requirements. An exemption could be obtained, but it is undisputed that such exemption could not be obtained overnight. Plaintiff testified at his deposition that one of the requirements for the exemption would be two months of blood sugar testing. Plaintiff Dep. p. 54. Other paperwork had to be filled out as well, and the entire process could take anywhere from three to six months\u0097there being no guarantee, however, that an exemption would be granted. Id. p. 55.\nFor approximately two weeks, the Plaintiff was provided someone to drive the truck for him. Jeff Wurtzberger, Plaintiffs supervisor, testified that providing Plaintiff a driver was not a reasonable accommodation, so efforts were made to find other positions for the Plaintiff within the company. Wurtzberger Dep. 21-22. Plaintiff was also told that once he became recertified, he could re-apply for the route manager position. Plaintiff Dep. p. 43-44. Schwan's asserts that Plaintiff was offered a warehouse position at Schwan's, but Plaintiff disputes whether he was definitively offered any warehouse position. Plaintiff does not, however, dispute that Wurtzberger talked with Plaintiff about looking at job openings within the company, and that he was directed to the company's website to look at current job openings. Id. p. 47 and 71.\nPlaintiff admits that he never looked at the website, nor did he accept a different position with the company, but claims that he did not have an opportunity to do so because he was abruptly terminated. Id. p. 51. Schwan's asserts that he was terminated because he lost his DOT certification and because he had not taken another job within the company.\nPlaintiff filed a charge of disability discrimination with the Equal Employment Opportunity Commission (\"EEO\") on May 1, 2006, which was cross-filed with the Minnesota Department of Human Rights (\"MDHR\"). Both the EEO and the MDHR issued notices of dismissal of Plaintiffs claims. The MDHR notice was dated February 28, 2007. This action was thereafter filed on April 25, 2007\u0097exactly 90 days after the EEO dismissed the underlying charge and 57 days after the MDHR issued its dismissal notice.\nIn the Complaint, Plaintiff alleges disability discrimination under the Minnesota Human Rights Act (\"MHRA\") (Count I) and the Americans with Disabilities Act (\"ADA\") (Count II). Plaintiff alleges that Schwan's subjected him to discrimination and harassment because of his disability and that Schwan's failed to reasonably accommodate his disability.\n\nII. Standard\nSummary judgment is appropriate if, viewing all facts in the light most favorable to the non-moving party, there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The party seeking summary judgment bears the burden of showing that there is no disputed issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. This burden can be met \"by `showing'\u0097that is, pointing out to the district court\u0097that there is an absence of evidence to support the nonmoving party's case.\" Id. at 325, 106 S.Ct. 2548. The party opposing summary judgment may not rest upon mere allegations or denials, but must set forth specific facts showing that there is a genuine issue for trial. Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir.1995).\n\nIII. Analysis\n\nA. MHRA Claim\u0097Timeliness\nUnder the MHRA, a plaintiff may pursue his claims by either proceeding directly to court, or to bring a claim before the MDHR. If the MDHR issues a notice dismissing the charges, a plaintiff may file an action in court, as long as the action is commenced within 45 days of receiving the notice. Minn.Stat. \u00a7 363A.33, subd. 1(2). The statute further provides that a notice of dismissal is presumed to have been received five days from the date of service by mail of the written notice. Minn.Stat. \u00a7 363A.33, subd. 1(3).\nIn this case, the MDHR issued a notice of dismissal dated February 28, 2007. Thus, Plaintiff had to have filed his Complaint within 45 days of March 5, 2007\u0097or April 19, 2007. This action was not filed until April 25, 2007, however. Plaintiff does not dispute that the notice of dismissal was addressed properly, but argues only that Plaintiff cannot remember receiving the notice. Because Plaintiff has not put forth any evidence that \"that circumstances beyond his control prohibited him from serving his complaint within the statutory period\", Plaintiffs claim under the MHRA must be dismissed as untimely. Ochs v. Streater, Inc., 568 N.W.2d 858, 860 (Minn.Ct.App.1997).\n\nB. Harassment Claim\nIn his Complaint, Plaintiff asserts that he was harassed due to his disability. Complaint, \u00b6 29. No evidence has been presented to support a harassment claim, nor did Plaintiff submit any argument to support this claim in his opposition brief. Accordingly, summary judgment as to the harassment claim will be granted.\n\nC. ADA Claim\nSchwan's also argues that it is entitled to summary judgment as to Plaintiffs disability claim under the ADA, because Plaintiff cannot demonstrate the existence of genuine issues of material fact that he is disabled, as defined by the ADA or that he is qualified for the position of route manager with or without reasonable accommodation.\nThe elements of a prima facie case of disability discrimination are: 1) Plaintiff is disabled as defined by the ADA; 2) he is qualified to perform the essential functions of the job, with or without reasonable accommodation; and 3) he has suffered an adverse employment action due to his disability. Pittari v. American Eagle Airlines, Inc., 468 F.3d 1056, 1061 (8th Cir. 2006).\nSchwan's argues that Plaintiff is not disabled as defined by the ADA, which requires a showing of \"(A) a physical or mental impairment that substantially limits one or more of the major life activities of such individual; (B) a record of such an impairment; or (c) being regarded as having such an impairment.\" Ristrom v. Asbestos Workers Local 34 Joint Apprentice Committee, 370 F.3d 763, 768 (8th Cir. 2004). To prove he is substantially limited in a major life activity, Plaintiff must show that he is unable to perform, or is significantly restricted in performing, an activity that the average person in the general population can perform. Ristrom, 370 F.3d at 769.\nA determination of whether a plaintiff is disabled must be made with reference to measures that mitigate an individual's impairment. Sutton v. United Air Lines, Inc., 527 U.S. 471, 475, 119 S.Ct. 2139, 144 L.Ed.2d 450 (1999). The Court in Sutton noted that if measures to mitigate an impairment were not considered, all diabetics, for example, would be considered disabled, \"because if they failed to monitor their blood sugar levels and administer insulin, they would almost certainly be substantially limited in one or more major life activities. A diabetic whose illness does not impair his or her daily activities would therefore be considered disabled simply because he or she has diabetes.\" Id. at 483, 119 S.Ct. 2139. The Court emphasized that the ADA requires persons to be treated as individuals, not as a member of a group of people with similar impairments. Id. at 483-184, 119 S.Ct. 2139.\nSchwan's asserts that Plaintiff is not disabled as there are no genuine issues of material fact that he is substantially limited in a major life activity. At his deposition, Plaintiff testified that his diabetes only limited his ability to drive a commercial vehicle. Plaintiff Dep. 79-81. He testified that he suffered no physical affects from his condition. Id.\nPlaintiff argues that his diabetes has substantially limited him in the major life activities of eating and work. In support, Plaintiff cites to medical references defining the effects of diabetes on the body, and how a diabetic must monitor food intake in order to maintain his blood sugars. Plaintiff further argues that eating has been recognized by courts as a major life activity. One case cited, Lawson v. CSX Transp., Inc., 245 F.3d 916 (7th Cir.2001, involved a plaintiff that was a diabetic since birth, and whose diabetes caused other serious ailments, such as high' blood pressure, kidney problems and depression. As a result, the plaintiff had been on disability for a number of years. Id. 245 F.3d at 919, n. 3. Based on this plaintiffs individual medical issues, the court found that the plaintiff was substantially limited in the major life activity of eating. Id. at 923. Specifically, the record contained evidence that even with insulin, the plaintiffs ability \"to regulate his blood sugars and metabolize his food is difficult, erratic and substantially limited.\" Id.\nLawson is clearly distinguishable from the facts of this case. Here, Plaintiff was recently diagnosed with diabetes, and he testified at his deposition that once he was diagnosed, his condition turned around right away and that he was a \"perfect diabetic technically\". Plaintiff Dep. p. 80. There is no evidence in the record to support a finding that Plaintiffs diabetes has substantially limited him in the major life activity of eating.\nPlaintiff further argues that his diabetes has substantially limited his ability to work in a class of jobs\u0097namely commercial truck driving. In determining whether an individual is substantially limited in the major life activity of working, the Court must determine whether the individual is significantly restricted in a \"class of jobs or a broad range of jobs, as compared to the average person having comparable training, skills, and abilities.\" Fjellestad v. Pizza Hut of America, Inc., 188 F.3d 944 (8th Cir.1999).\nThe undisputed evidence demonstrates that Plaintiff only drove a commercial truck for approximately one and one-half years. His previous job experiences include: golf caddie, an assembly line worker, deli worker, trolley operator/warehouse worker, liquor store, warehouse order filler/forklift operator and pipe fabricator/order sorter. Plaintiff Dep. p. 11-17. Within months of his termination, Plaintiff was hired by Excel Energy as a yard equipment operator. Id. p. 63.\nBased on this evidence, the Court finds that when properly monitored, the Plaintiff is not substantially limited in the major life activity of working. Plaintiff testified that he is not physically limited by his diabetes when that condition is properly monitored. Id. p. 79-81. Although DOT requirements prohibited him from driving a commercial vehicle without an exemption, there is no evidence that the diabetes itself interfered with his ability to drive. Plaintiff would thus be qualified to work in any of his past positions, including warehouse worker or forklift operator. Under these circumstances, the Court finds that the Plaintiff has not demonstrated that he is substantially limited in performing a class of jobs or broad range of jobs.\nAlternatively, Plaintiff argues that he was regarded as disabled. The Supreme Court has determined that a plaintiff can demonstrate that he is regarded as disabled if he can show that:\n(1) a covered entity mistakenly believes that a person has a physical impairment that substantially limits one or more major life activities; or (2) a covered entity mistakenly believes that an actual, nonlimiting impairment substantially limits one or more major life activities. In both cases, it is necessary that a covered entity entertain misperceptions about the individual\u0097it must believe either that one has a substantially limiting impairment that one does have or that one has a substantially limiting impairment when, in fact, the impairment is not so limiting.\nSutton, 527 U.S. at 489, 119 S.Ct. 2139.\nSchwan's asserts that the Supreme Court's decision in Murphy v. United Parcel Service, Inc., 527 U.S. 516, 119 S.Ct. 2133, 144 L.Ed.2d 484 (1999) controls here. In Murphy, the plaintiff worked for UPS as a mechanic. Part of his job duties required that he be DOT certified to drive a commercial vehicle. The plaintiff was terminated from this position when it was determined that the plaintiff did not meet the DOT requirements for driving a commercial vehicle due to his high blood pressure. The Court found that, assuming without deciding that the DOT requirements were valid, the plaintiff had not demonstrated a genuine issue of material fact as to whether he was regarded as disabled. The Court found that the plaintiff had, in fact, been fired because his high blood pressure prevented him from obtaining the proper DOT certification, not because of a mistaken misperception as to his impairment. Id. 527 U.S. at 523-524, 119 S.Ct. 2133. The Court further found that, based on the undisputed evidence that the plaintiff was generally employable as a mechanic, and that he had performed mechanic jobs that did not require DOT certification for over 22 years, together with the fact that the plaintiff secured another position shortly after leaving UPS, the plaintiff had failed to show that he was regarded as unable to perform a class of jobs. Id.\nPlaintiff argues that Murphy is distinguishable because the plaintiff in that case was a mechanic by trade, and was thus only disabled from the particular mechanic job that also required DOT certification. In this case, however, Plaintiff cannot use his commercial driving skills in any other commercial driving position.\nPlaintiff's argument presumes that the route manager position involved only driving a commercial vehicle and that Plaintiff was a commercial truck driver by trade. Schwan's asserts, and Plaintiff does not dispute, that the route manager position involved selling and delivering frozen food and other products to customers along a specified route. Thus, the route manager is a sales position in addition to a delivery position, and no evidence has been submitted to show that his diabetes prevented him from performing his duties as a salesperson.\nLike the plaintiff in Murphy, the evidence in this case shows that the loss of his DOT certification prevented the Plaintiff from performing only a particular job, not a class of jobs or a broad range of jobs. Accordingly, the Court finds that summary judgment in favor of Schwan's on the ADA claim is appropriate.\nIT IS HEREBY ORDERED that Defendant Schwan's Home Services, Inc.'s Motion for Summary Judgment [Doc. No. 25] is GRANTED. This matter is hereby dismissed with prejudice. Defendant Schwan's Home Services, Inc.'s Motion to Strike [Doc. No. 42] is DENIED as moot.\nLET JUDGMENT BE ENTERED ACCORDINGLY.\n"} -{"text": "436 F.2d 992\nWilliam R. SHERWIN, d/b/a Sherwin Electric Servicev.The UNITED STATES.\nNo. 299-68.\nUnited States Court of Claims.\nJanuary 22, 1971.\n\nCOPYRIGHT MATERIAL OMITTED Irvin Grant, Los Angeles, Cal., attorney of record, for plaintiff.\nLawrence S. Smith, Washington, D. C., with whom was Asst. Atty. Gen. William D. Ruckelshaus, for defendant.\nBefore COWEN, Chief Judge, and LARAMORE, DURFEE, DAVIS, COLLINS and SKELTON, Judges.\nON PLAINTIFF'S MOTION AND DEFENDANT'S CROSS-MOTION FOR SUMMARY JUDGMENT\nPER CURIAM:\n\n\n1\nThis case was referred to Trial Commissioner Franklin M. Stone with directions to prepare and file his opinion on the issues of plaintiff's motion and defendant's cross-motion for summary judgment under the order of reference and Rule 166(c). The commissioner has done so in an opinion and report filed on June 2, 1970, wherein such facts as are necessary to the opinion are set forth. Defendant requested review by the court of the commissioner's opinion and recommended conclusion of law. Plaintiff urged that the court approve and adopt his opinion and recommended conclusion of law. The case has been submitted to the court on oral argument of defendant's counsel and the briefs of the parties. Since the court agrees with the opinion and recommended conclusion of the trial commissioner, with minor modifications, it hereby adopts the same, as modified, as the basis for its judgment in this case as hereinafter set forth. Therefore, plaintiff's motion for summary judgment is granted, defendant's cross-motion is denied, and judgment is entered for plaintiff in the sum of $11,500.63.\n\n\n2\nCommissioner Stone's opinion, with minor modifications by the court, is as follows:\n\n\n3\nIn this case, which is before the court on plaintiff's motion and defendant's cross-motion for summary judgment, the court is called upon to review, under the provisions of the Wunderlich Act,1 decisions rendered by the Veterans Administration Contract Appeals Board (VA CAB),2 denying plaintiff's request for a compensatory change order, and an equitable adjustment for additional costs and expenses assertedly incurred in the performance of a contract for the installation of an emergency electrical system at the Veterans Hospital in Fresno, California.\n\n\n4\nThe contract, No. V5202C-60, was awarded to plaintiff on May 12, 1965, by defendant, acting through the Veterans Administration. The total contract price was $98,490. The contract contained, among other provisions, the standard \"Disputes\" and \"Changes\" clauses customarily included in Government contracts.\n\n\n5\nAn essential item of the contract was an automatic transfer switch which, in the event of a lowering or loss of current from the normal source, could activate an emergency stand-by generator, disconnect the hospital electrical system from the normal source, and then reverse the switching sequence upon the reestablishment of adequate power from the normal source.\n\n\n6\nIn brief, the controversy between the parties arises out of the undisputed fact that subsequent to the purchase by plaintiff of a certain type of automatic transfer switch, previously approved by defendant for use in performing the contract, the Government withdrew its approval of the switch in question as not meeting the contract specifications, thereby necessitating the purchase by plaintiff of another type of switch.\n\n\n7\nAfter purchasing and installing a second switch approved by the Government, plaintiff made a request for a change order and claimed reimbursement for asserted resultant increased costs in the amount of $11,500.63. Plaintiff's claim was denied by the contracting officer on April 5, 1966, and plaintiff appealed the decision to the VACAB (hereinafter sometimes referred to as the \"Board\") which, after a hearing, affirmed the action of the contracting officer and denied plaintiff's appeal. See fn. 2, supra. Thereafter, plaintiff instituted suit in this court by a petition filed October 7, 1968.\n\n\n8\nPlaintiff's petition and motion for summary judgment assert, in substance, that the Board's decision is contrary to the agreement of the parties, arbitrary, and capricious; that it contains factual findings that are not supported by substantial evidence; and that it is erroneous as a matter of law. Defendant contends that plaintiff's claim has no merit and should be denied, and that plaintiff's petition should be dismissed.\n\n\n9\nAfter reviewing the pleadings, administrative record, and briefs of the parties, it is concluded that the decision of the Board should be reversed and that plaintiff is entitled to recover.\n\n\n10\nReturning now to the contract, the specifications thereof described but did not identify by name, an automatic transfer switch manufactured only by the Automatic Switch Company (ASCO). The specifications directly related to the switch required under the contract contain, inter alia, the following pertinent provisions:\n\nELECTRICAL EQUIPMENT SECTION 801\n\n11\n* * * * * *\n\n\n12\n801-22. AUTOMATIC TRANSFER SWITCH: Shall be an inherently double-throw switch interlocked mechanically and electrically and shall be operated by a simple overcenter type mechanism actuated by a single solenoid. Solenoid shall be energized momentarily during transfer period only. Operating current for transfer shall be obtained from the same source to which the load is to be transferred. Once transfer has been completed, the switch shall be mechanically locked in position without use of hooks, latches, or springs. Failure of any coil or disarrangement of any part shall not permit a neutral position where both sources are disconnected from the load. Transfer time in either direction shall not exceed 1/6 second.\n\n\n13\nA. Voltage rating, current rating, and number of poles shall be as specified. Current rating shall be based on continuous duty, fully enclosed.\n\n\n14\nB. Main contacts shall be silver surfaced and protected by arcing contacts. Poles shall be equipped with are barriers and magnetic blowouts.\n\n\n15\nC. Transfer switch shall be arranged to close pilot contact for remote starting of standby plant one second after a drop in voltage on any phase of normal to 85% of rated voltage or less. Switch shall not transfer load to standby plant until voltage and frequency on generator has reached approximately 90% of rated valve. Upon restoration of normal source to not less than 90% of rated voltage on all phases, the load shall be retransferred to normal source after an adjustable time delay of 5 to 25 minutes. After retransfer, timer shall permit standby plant to run 5 minutes before shutting down.\n\n\n16\nD. An auxiliary contact shall close an indicating circuit when load circuits are connected to emergency source.\n\n\n17\nE. Relays shall be heavy duty, industrial type with silver alloy contacts with a minimum rating of 10 amperes.\n\n\n18\nF. Contacts and coils shall be readily accessible for replacement from front of panel without major disassembly of associated parts.\n\n\n19\nG. The transfer switch shall include an automatic exerciser connected to simulate normal source failure for 15 minutes once every 168 hours.\n\n\n20\nSection 801-3, of the specifications, captioned \"STANDARD PRODUCTS,\" states in part:\n\n\n21\n* * * Materials and equipment, unless otherwise required by drawings or specifications, shall be standard products of manufacturers regularly engaged in the production of such items. * * * The major components of assembled electrical equipment shall all be the products of one manufacturer, who shall assume responsibility for the entire assembled product.\n\n\n22\nSection 801-5 governing submittal requirements for electrical equipment reads in pertinent part:\n\n\n23\n801-5. SUBMITTALS: Before executing any work, submit in quadruplicate, in accordance with the Samples and Shop Drawings Section of the specifications, information sufficient to evidence full compliance with contract requirements on items proposed to be furnished. Such information shall include, as required, Manufacturers' Name, Trade Names, Model or Catalogue Number, Name Plate Data (size, capacity, rating), and corresponding specification reference (Federal or project specification number and paragraph). Materials specified under this section of the specifications shall be submitted separately and apart from materials specified under other sections and shall be marked \"SUBMITTED UNDER SECTION 801.\"\n\n\n24\nA. For equipment which has to be specially fabricated, shop drawings and detailed description shall be submitted.\n\n\n25\nSection S of the specifications, entitled \"SAMPLES AND SHOP DRAWINGS,\" contains provisions reading in pertinent part as follows:\n\n\n26\nS-1. GENERAL: Submit for approval; samples, shop drawings, certificates and manufacturers' literature and data, as required under the separate sections of the specification, with information sufficient to evidence full compliance with contract requirements.\n\n\n27\n* * * * * *\n\n\n28\n(b) Approval or acceptance of items will not preclude rejection of any item upon discovery of defects in them prior to final acceptance of completed work.\n\n\n29\n* * * * * *\n\n\n30\n(e) Samples, shop drawings, certificates and manufacturers' literature and data will be reviewed for approval and action thereon will be presented in writing to Contractor by Contracting Officer.\n\n\n31\nS-2. SAMPLES, CERTIFICATES AND MANUFACTURERS' LITERATURE AND DATA:\n\n\n32\n(a) * * * Submit manufacturers' literature and data and certificates in quadruplicate except where a greater number is specified.\n\n\n33\n(b) * * * manufacturers' literature and data must be submitted by Contractor only and shipped prepaid.\n\n\n34\n(c) * * * manufacturers' literature and data will receive consideration only when covered by a transmittal letter signed by Contractor. * * *\n\n\n35\n* * * * * *\n\n\n36\n2. Any deviation from contract requirements shall be so stated in letter of transmittal.\n\n\n37\n* * * * * *\n\nS-3. SHOP DRAWINGS:\n\n38\n(a) Shop, erection or setting drawings * * *\n\n\n39\n1. These drawings shall be stamped and signed by Contractor certifying to such check and must be accompanied by a letter of transmittal signed by Contractor.\n\n\n40\n2. A copy of this letter shall, at same time, be sent to Resident Engineer.\n\n\n41\n* * * * * *\n\n\n42\n8. Veterans Administration's approval of such drawings will be subject to contract requirements and shall not relieve Contractor from responsibility for errors of any sort in shop drawings or for any unauthorized deviations from contract requirements.\n\n\n43\n9. Any deviations from contract requirements and justification therefor shall be so stated in the letter of transmittal.\n\n\n44\n* * * * * *\n\n\n45\nS-4. SHIPPING ADDRESS: Following items shall be sent to Resident Engineer, Veterans Administration Hospital, Fresno, California:\n\n\n46\n* * * * * *\n\n\n47\n(b) Manufacturers' literature and data in connection with Miscellaneous Construction, mechanical and electrical specification sections.\n\n\n48\n(c) Shop Drawings.\n\n\n49\nThe Board's opinion recites that Mr. Frank J. Rock, plaintiff's Contract Manager, deposed to the effect that he exercised plaintiff's responsibility for selection of suitable materials and equipment to be incorporated into the contract work; that he analyzed the descriptive materials on automatic transfer switches manufactured by several companies, including ASCO and R. G. Russell Company (Russell), and concluded that there was no 1000 ampere transfer switch on the market that entirely conformed to the contract specifications; and, further, that in his opinion the Russell Company's product, referred to as the \"Russelectric\" switch, was, from a functional standpoint, the nearest to meeting the specifications.\n\n\n50\nFollowing the above conclusion and evaluation, plaintiff, on May 28, 1965, submitted to the Veterans Administration (VA) Resident Engineer for approval, manufacturer's data appropriately marked to show the specific transfer switch and accessories intended for installation under the contract. The letter of transmittal specifically referred to automatic transfer switch Russelectric Model #RMT1003CE.\n\n\n51\nAs previously indicated, the Russelectric switch differed in certain respects from the specifications relating to this item of equipment. Despite these differences, which will be discussed in some detail later, the Resident Engineer, after examining the brochure and speaking with plaintiff's representative about the Russelectric switch, approved this type of switch by letter to plaintiff dated June 24, 1965, and its accessories by letter dated June 30, 1965, for use in performing the contract.\n\n\n52\nThereafter, on July 7, 1965,3 plaintiff, in reliance upon the Resident Engineer's approval of the Russelectric switch, ordered the fabrication and shipment, as soon as possible, of the equipment in question from the Russell Electric Company. Russell fabricated the switch and shipped it from Boston to plaintiff on August 10, 1965.\n\n\n53\nMeanwhile, certain events occurred which are recounted in a memorandum from the Resident Engineer to the contracting officer, dated August 3, 1965, quoted below:\n\n\n54\n1. An American Switch Company representative from San Francisco called me last Thursday, July 29, 1965, and appeared to express sentiments of displeasure over his understanding that \"Russelectric\" had gained acceptance under the terms of the contract as submitted by the contractor. His contention was that the accepted transfer switch gear did not comply with the contract specifications. My only remark was that I would surely discuss the matter with VA Construction Service.\n\n\n55\n2. My almost immediate response or reaction to the above was to consult Construction Service. On the same date, in my conversation with Construction Service, they advised Russelectric automatic switches did not meet the minimum specifications as provided on this contract. Because I had given my authorization to the contractor to use the particular material, Construction Service said that the equipment could not be installed on the job site and to give the contractor his notification accordingly. Moreover, ASCO switch apparatus was the only manufacturer that could meet the specifications under the contract.\n\n\n56\n3. By copy of this memorandum I am hereby reversing material authorization as approved in my memorandum to the contractor on June 24, 1965, subject to a supportive directive from Construction Service stating ASCO contract acceptability. At this point, it is important Sherwin Electric not be advised in writing of this apparent nonacceptance of material as submitted.\n\n\n57\n4. To amplify on the previous sentence, yesterday Mr. Philpot, the Sherwin Electric Service field representative, was notified verbally not to proceed with the installation of said transfer switch until further notice.\n\n\n58\nUnder date of August 12, 1965, the contracting officer sent to plaintiff a letter which reads in pertinent part:\n\n\n59\nIn confirmation of telephone conversation of above date between your office and our Acting Resident Engineer, please be advised that our Central Office Engineering Service has disapproved your proposal to install a Russell automatic transfer switch since it fails to meet contract specifications as follows:\n\n\n60\n1. The Russell uses two breakers not inherently double-throw as required.\n\n\n61\n2. A simple overcenter type mechanism actuated by a single solenoid was specified, whereas Russell uses a mechanism actuated by a motor.\n\n\n62\n3. The specifications require the main contacts to be protected by arcing contacts; Russell does not have arcing contacts.\n\n\n63\nWe trust the above explanation will clarify the need of this installation and enable you to furnish the type of transfer switch required under the contract.\n\n\n64\nBy the time plaintiff was notified of the withdrawal of approval, the Russelectric switch already had been shipped to the job site by the manufacturer (Russell), and plaintiff was unable to cancel the order therefor. The equipment arrived at the job site on September 8, 1965. Not being able to return the switch to Russell for credit, plaintiff was forced to spend additional sums incident to the purchase and installation of a second switch manufactured by ASCO.\n\n\n65\nSince certain arguments advanced by defendant in support of its position contain references to quoted portions of provisions of the contract other than those hereinbefore set forth, note is taken of these provisions at this point. Paragraph 10 of the General Provisions of the contract reads in pertinent part:\n\n10. INSPECTION AND ACCEPTANCE\n\n66\n(a) Except as otherwise provided in this contract, inspection and test by the Government of material and workmanship required by this contract shall be made at reasonable times and at the site of the work * * *.\n\n\n67\n(b) The Contractor shall, without charge, replace any material or correct any workmanship found by the Government not to conform to the contract requirements, unless in the public interest the Government consents to accept such material or workmanship with an appropriate adjustment in contract price. The Contractor shall promptly segregate and remove rejected material from the premises.\n\n\n68\nParagraph 21, Section G, of the General Conditions of the contract reads in pertinent part:\n\n21. INSPECTION AND ACCEPTANCE\n\n69\n* * * * * *\n\n\n70\n(b) Final inspection and acceptance of work shown by drawings and specifications forming a part of this contract shall not be binding or conclusive upon the United States if it shall be shown (1) that the Contractor has willfully or through collusion with persons or firms engaged in the performance of the contract, or with an employee of the Federal Government, supplied inferior materials or workmanship, or (2) that the contractor has otherwise departed from the terms of the contract. The foregoing will not permit reliance upon any other legal basis for rejection. * * *\n\n\n71\n(c) Final inspection will not be made until the contract work is ready for beneficial use or occupancy. The Contractor shall notify the Contracting Officer, through the Resident Engineer, fifteen (15) days prior to the date on which the work will be ready for final inspection. * * *\n\n\n72\nIn connection with the above provisions, it should be noted that the record undisputably discloses that the Russelectric switch was rejected by the contracting officer upon instructions received by him from the Veterans Administration Central Office Engineering Service subsequent to the time the switch was shipped from the factory but before it arrived at the job site, and that the switch was never personally examined by the contracting officer or Resident Engineer, at least not before the switch was disapproved by the Government.\n\n\n73\nPlaintiff contends that the detailed description of the properties of the original automatic transfer switch set forth in Section 801-22 under the heading \"ELECTRICAL EQUIPMENT,\" quoted supra, should be read to establish a \"standard of quality\" requiring only that a proffered deviation must function as well as the specified equipment. Plaintiff relies upon Paragraph 9 of General Provisions of the contract, which read in pertinent part as follows:\n\n9. MATERIAL AND WORKMANSHIP\n\n74\n(a) * * * Unless otherwise specifically provided in this contract, reference to any equipment, material, article, or patented process, by trade name, make, or catalog number, shall be regarded as establishing a standard of quality and shall not be construed as limiting competition, and the Contractor may, at his option, use any equipment, material, article, or process which, in the judgment of the Contracting Officer, is equal to that named. * * *\n\n\n75\nThe Board denied plaintiff's contention that the above Paragraph 9 was applicable, stating at p. 31,637-38 of its opinion:\n\n\n76\nAppellant erred in assuming that the narrowness of the specifications brought them within the intent of paragraph 9 of [the] General Provisions * * * of the contract. These specifications did not include a trade or brand name, but described in considerable detail the transfer switch to be furnished. Paragraph 9, above, is expressly directed to situations where no such description is available and where it is necessary to substitute the use of the brand name for the description. This was not that kind of case. These specifications are clear and detailed and the Government is entitled to demand full compliance with them. * * * [ASBCA decision referred to and cases cited therein omitted.]\n\n\n77\nThe Board, having refused to apply the standard of quality test, made no attempt to compare the relative performance standards of the Russelectric and the ASCO switches under the requirements of the contract. Rather, the Board simply reviewed the properties of the Russelectric switch to see whether they mirrored the proprietary characteristics of the ASCO switch as described in the specifications.\n\n\n78\nWhether the \"or equal\" or \"standard of quality\" clause contained in Paragraph 9, supra, was applicable is a question of law, and thus the prior administrative decision on this question is not binding on the court. Jack Stone Co. v. United States, 344 F.2d 370, 170 Ct.Cl. 281 (1965). See also, Dynamics Corp. of America v. United States, 389 F.2d 424, 182 Ct.Cl. 62 (1968). After a thorough review of the question, it is concluded and held that the Board erred as a matter of law in refusing to apply the standard of quality clause to this case; that the Russelectric switch came within the limitations of the standard of quality clause; and that the rejection of the Russelectric switch constituted a change in the contract for which plaintiff is entitled to an equitable adjustment in the amount of the increase in its performance costs.\n\n\n79\nSupport for plaintiff's position that a detailed description of the proprietary characteristics of an item should be treated the same as if the brand-name itself were used, is found in the long-established policy against drafting specifications in ways which would tend to eliminate competition for the furnishing of items to be used in the performance of public construction contracts. As was observed by this court in Jack Stone Co., supra, 344 F.2d at 373-374, 170 Ct.Cl. at 287, the \"standard of quality\" clause\n\n\n80\n* * * was designed to discourage the potentially monopolistic practice of demanding the use of brand-name or designated articles in government contract work. The framers of the clause obviously thought that it was in the national interest to widen the area of competition, and to bar local procurement officials from choosing a particular source either out of favoritism or because of an honest preference. * * * [Emphasis added.]\n\n\n81\nTo effectuate the policy enumerated above, this court, the Comptroller General, and Boards of Contract Appeals have recognized that in applying the standard of quality clause, the description of an item by proprietary characteristics, found in the product of only one manufacturer, should be treated the same as if the item were identified by its trade name. Urban Plumbing & Heating Co. v. United States, 408 F.2d 382, 386 (n. 3), 187 Ct.Cl. 15, 23-24 (n. 3) (1969); 39 Comp.Gen. 101, 108 (1959); Comp.Gen.Dec.B-155826, January 21, 1965; Algernon Blair, Inc., GSBCA No. 2116, 67-2 BCA \u00b6 6453; Kay-Cee Constr. Corp., VACAB No. 478, 65-1 BCA \u00b6 4790. To hold otherwise would render the standard of quality clause readily circumventable. Under the Board's test, despite the presence of the standard of quality clause indicating free competition, it would be possible for a local procurement official to insert a detailed description of a manufacturer's product into the specifications and thereby largely defeat the purposes of the competitive bidding process. The suspicion of partiality could hardly be avoided. Such suspicion is heightened where, as in the instant case, it is the representative of the favored manufacturer who succeeds in having approval of a competitor's product withdrawn because of allegedly non-conforming properties.\n\n\n82\nAt this juncture, it will be helpful to briefly review some of the experiences of this court and of various Boards of Contract Appeals, including the Veterans Administration Contract Appeals Board, in applying the standard of quality clause.\n\n\n83\nThe leading case of Jack Stone Co., supra, involved the specification for a fire alarm system which required Sperti Faraday equipment and parts. The contract also contained the same standard of quality clause found in the instant case. There this court held that\n\n\n84\n* * * under this contract plaintiff was not required to furnish Sperti Faraday equipment alone, but could supply articles from another source if they were equal to Sperti Faraday and if the consent of the contracting officer was sought in advance. * * * [344 F.2d at 376, 170 Ct.Cl. at 290.]\n\n\n85\nThe court went on to find that the major cases on which the defendant relied differed significantly in that rather than involving the application of the standard of quality clause, they simply held that the Government is entitled to get what the contract demands. Such is the situation in the instant case. In Jack Stone, the court then adopted the Board's negative finding that the record did not indicate that the substituted equipment was unequal or inadequate, and on that basis it awarded plaintiff an equitable adjustment under the Changes article because plaintiff was required to install Sperti Faraday equipment in the fire alarm system rather than the proposed equal equipment.\n\n\n86\nIn the case of Urban Plumbing & Heating Co., supra, involving somewhat different issues, the court stated that the \"or equal\" provision of the standard of quality clause does not \"mean that the proposed substitutes had to comply with every detail of the specifications (which were based on particular brands, without naming them). The `or equal' clauses were designed to establish a `standard of equality' and meant only that the proffered `deviation' had to function as well as the specified equipment.\" 408 F.2d at 386 (n. 3), 187 Ct.Cl. at 24 (n. 3).\n\n\n87\nIn Algernon Blair, Inc., supra, the General Services Board of Contract Appeals held that a construction contractor was entitled to reimbursement for certain costs which resulted from specifications which proved to be latently restrictive. The Board found that by the use of performance specifications, the Government subtly required installation of a specific patented boiler, thereby preventing the contractor from competitively utilizing the products of other manufacturers. After installing a different boiler, the contracting officer there required the contractor to perform substantial modifications. Holding that the contractor's installation was proper in view of the standard of quality clause, the Board found that the modification order constituted a constructive change and entitled the contractor to an equitable adjustment.\n\n\n88\nIn Kay-Cee Constr. Corp., supra, the Veterans Administration Contract Appeals Board awarded the contractor an equitable adjustment for the improper rejection of a proposed nurse's call system under a contract calling for the installation of \"a complete operating system to match existing equipment.\" In that case, the Board noted that an \"or equal\" \"product is one which provides all the essential functions specified and is suitable to the actual needs of the Government, even though it may differ in some details from the product prescribed or referenced.\" Id. at p. 22,736.\n\n\n89\nFrom these cases, it is clear that in comparing a proposed substitute to a product described in the specifications, this court and at least some Boards of Contract Appeals tend to look beyond proprietary details to determine whether the substitute functions as well, in all essential respects, as the specified equipment.\n\n\n90\nAs explained above, the Board made no findings as to the comparative functioning of the two automatic transfer switches. Preliminary to this court's evaluating the proposal of the substitute in this case, it should be noted that normally where the administrative board has not made findings of fact, the court suspends its proceedings to enable the parties to return to the board so that initial findings can be made. United States v. Anthony Grace & Sons, 384 U.S. 424, 86 S.Ct. 1539, 16 L.Ed.2d 662 (1966). However, in the case of Maxwell Dynamometer Co., supra, fn. 3, this court stated:\n\n\n91\nWhere an administrative board has failed to make a relevant finding of fact as to which the evidence is undisputed, this court has made such finding rather than referring the matter to the board. * * * Likewise, where the evidence is disputed but it is of such a nature that as a matter of law the Board could have made only one finding of fact, it would seem that this court can make that finding without sending the matter back to the Board for determination of the factual issues; otherwise, litigation would be protracted and unnecessary delay and expense would result simply in order to have the Board formally decide a fact which legally can be decided in only one way. Such an empty ritual has no place in a rational decision-making process. [Footnote omitted.] [386 F.2d at 870, 181 Ct.Cl. at 631.]\n\n\n92\nAccord, Ray D. Bolander Co. v. United States, 186 Ct.Cl. 398, 409 (n. 11) (1968).\n\n\n93\nFor this court to hold for plaintiff in the instant case, it is necessary to find that the nature of the evidence is such that one may say as a matter of law that (1) plaintiff, by way of submitting adequate information, proposed a substitute to that described in the specifications, and (2) that the proposed substitute came within the standard of quality represented by the specifications.\n\n\n94\nWith regard to the procedural requirement of notice, it is important to understand that the Board dealt with this issue only in the context of its refusal to apply the standard of quality clause. The Board held in its opinion, at pp. 31,636-37, as follows:\n\n\n95\nThe parties, by entering this contract, agreed that the Appellant would furnish and that the government would accept an automatic transfer switch with the particular features specified therein. By submitting manufacturer's data of a switch that did not comply with the contract specifications, it is apparent that Appellant desired to have the contract changed sufficiently to permit the installation of a different switch than was originally contemplated. The contract permitted the Contracting Officer to make such a change and set out a procedure that Appellant could follow in proposing such a change; namely, to submit the manufacturer's data with a letter of transmittal and \"any deviation from contract requirements shall be so stated in letter of transmittal\" (Specification Section S-2, paragraph (c) 2). Appellant did not follow this procedure in making the submission. The Appellant's failure to follow the specific procedure in proposing a deviation from contract may not of itself be fatal to its claim, if, in some other way, it is shown that the Government had actual knowledge that a contract change was being proposed or acted upon. It is our opinion that inherent in the contract requirement for specific notice of deviations from contract requirements is the substantive right of the contracting officer to have a conscious awareness that a proposed contract change is being tendered.\n\n\n96\nAlthough verbal and written communications associated with the submission were exchanged between the parties at that time, Appellant does not contend nor does the evidence show that specific notice in addition to the manufacturer's data was given to the Government representatives. Appellant submits that the manufacturer's data itself clearly showed that the features of the switch proposed were different from those in the specifications. However, Appellant has not shown and the evidence before the Board does not otherwise establish that the Government representatives were consciously aware that Appellant was proposing a change in the contract or what changes were being requested.\n\n\n97\nInasmuch as the Russelectric switch was offered as conforming to, and not as deviating from, the contract requirements, the Board erred as a matter of law in placing a burden on the plaintiff to prove that the Government was \"consciously aware\" that a change was being requested.\n\n\n98\nThe record clearly indicates that plaintiff gave the proper Government representative sufficient information from which one familiar with the contract must conclude that the Russelectric switch was proffered as a substitute, though an equal substitute, for the switch described in the specifications. On or before May 28, 1965, seven copies of a detailed brochure describing the properties of the Russelectric switch were sent to Mr. Weldy, the VA Resident Engineer, in accordance with specification S-4(b), supra. The brochure clearly described the properties of the switch which later came under attack as differing from the specifications, with the exception of the so-called \"inherently double-throw\" characteristic which the Government later admitted the Russelectric switch indeed possessed. In fact, explanations of the remaining two allegedly non-conforming properties were the subjects of italicized headings entitled \"The Motor Operated Mechanism\" and \"Inductive Load Arc Quenching.\" The Resident Engineer had the brochure in his possession for nearly a month, spoke with plaintiff's representatives about the switch on two occasions, and is said to have \"studied\" the information closely before approving the switch for the contract.\n\n\n99\nThe Government does not contend that the brochure contains misleading information, or that the existence of the so-called deviations is not readily apparent from the brochure. It does contend, however, by way of denying any binding effect from its approval, that the contract required the submittal of shop drawings along with the manufacturer's brochure. This contention must be examined since it contains at least the implicit allegation that the defendant was not given sufficient information regarding the allegedly non-conforming properties of the Russelectric switch.\n\n\n100\nDefendant asserts (1) that the automatic transfer switch constituted \"fabricated\" equipment within the context of the provisions of Paragraph 801-5 A, supra, of the contract, thereby requiring the submittal of shop drawings; (2) that even approval of such allegedly required but not submitted shop drawings would not relieve the contractor for responsibility for any unauthorized deviations from the contract requirements under Paragraph S-3(a)8, supra, and therefore, taken together, these provisions in the aforesaid paragraphs negate the contention that the approval of the contracting officer of the Russelectric switch should be binding on the Government. As in the Jack Stone case, supra, defendant's argument is simply that the Government is entitled to get what the contract demands. Such argument is not inconsistent with plaintiff's position that under the standard of quality clause, the Russelectric switch must be deemed to have met the contract demands.\n\n\n101\nThe more relevant issue here is whether a requirement for the submittal of shop drawings existed, which, if true, could indicate that there might be insufficient information to evidence that the Russelectric switch complied with contract requirements. Certainly, the question of the applicability of Paragraph 801-5, supra, is a question of law as to which the Board's conclusion is not binding on this court. Dynamics Corp. of America, supra. From the following review of the relevant provisions of the contract, it is concluded that shop drawings were not required for the automatic transfer switch.\n\n\n102\nParagraph S-1, supra, of the specifications dealing with \"SAMPLES AND SHOP DRAWINGS\" sets out under the heading \"General,\" requirements for submission of samples and shop drawings in terms clearly stating that the contractor is to submit for approval, \"samples, shop drawings, certificates and manufacturers' literature and data, as required under the separate sections of the specification, with information sufficient to evidence full compliance with contract requirements.\" [Emphasis added.]\n\n\n103\nSection 801 of the specifications, mentioned hereinbefore, is the separate section specifically directed to \"Electrical Equipment.\" Paragraph 801-3, supra, of the specifications, captioned \"STANDARD PRODUCTS,\" states in part that \"[m]aterials and equipment, unless otherwise required by drawings or specifications, shall be standard products of manufacturers regularly engaged in the production of such items. * * *\"\n\n\n104\nParagraph 801-5, supra, of the specifications governing submittal requirements, provides that before executing any work, the contractor shall submit, in accordance with Section S of the specifications relating to \"SAMPLES AND SHOP DRAWINGS,\" supra, \"information sufficient to evidence full compliance with contract requirements on items proposed to be furnished. * * *\" Section 801-5 A, supra, which immediately follows the above-mentioned provisions, is repeated for convenient reference:\n\n\n105\nFor equipment which has to be specially fabricated, shop drawings and detailed description shall be submitted. [Emphasis added.]\n\n\n106\nThe plain import of the above-quoted provision is that shop drawings of electrical equipment need not be submitted if the item did not have to be specially fabricated.\n\n\n107\nIt is clear that both the ASCO switch and the Russelectric switch were the standard product of a manufacturer regularly engaged in the production of automatic switches. Neither switch had to be \"specially fabricated\" in the sense this phrase is used in Paragraph 801-5 A, supra. The fact that R. G. Russell, Inc., as the manufacturer, refused to take the switch back for credit does not mean that the switch was specially fabricated. Although an automatic transfer switch is not an \"off the shelf\" item which may be readily resold, it is clear that at least a copy of both the Russelectric and the ASCO switches must have been developed, pretested and generally advertised for sale prior to the award of this contract. Neither switch was \"specially fabricated\" for this contract.\n\n\n108\nIt is significant to note that all items in plaintiff's consolidated list of materials and equipment to be used, including the Russelectric switch, were approved with the exception of \"Switchboards & Panelboards\" for which submittal of shop drawings was required by the Resident Engineer. Shop drawings were not submitted nor requested for either the Russelectric or the ASCO switch. The parties must have interpreted the paragraph to apply to special designs for switchboards and panelboards, but not to apply to automatic transfer switches of standard manufacture. Such understanding on the part of the parties should be accorded great weight. See, e. g., Chase & Rice, Inc. v. United States, 173 Ct.Cl. 740, 746, 354 F.2d 318, 321 (1965); Blanchard v. United States, 171 Ct.Cl. 559, 566, 347 F.2d 268, 273 (1965). Moreover, it is well settled that \"[w]here the Government draws specifications which are fairly susceptible of a certain construction and the contractor actually and reasonably so construes them, justice and equity require that that construction be adopted.\" Peter Kiewit Sons' Co. v. United States, 109 Ct.Cl. 390, 418 (1947). See also, Gorn Corp. v. United States, 191 Ct.Cl. 560, 424 F.2d 588 (1970).\n\n\n109\nThere being no contractual obligation to submit shop drawings for examination, it is concluded that the manufacturer's data which was submitted by plaintiff was adequate to notify and inform defendant that the Russelectric switch, though differing in certain details from the ASCO switch as noted by the Government, was proposed as an equal substitute in accordance with contract requirements.\n\n\n110\nEven absent the persuasive evidence outlined hereinbefore that plaintiff submitted adequate information to notify the Resident Engineer of the proposed substitution, in light of the Government's unexplained failure to call the Resident Engineer as a witness at the Board hearing, or to arrange to have his testimony made a part of the administrative record by deposition, it is reasonable to conclude that had he been called he would not have given testimony more favorable to the Government. Rice Barton Corp. v. United States, 88 F.Supp. 271, 275, 115 Ct.Cl. 575, 593 (1950). It can therefore be assumed that the Resident Engineer was familiar with the contract requirements for the automatic transfer switch, that he studied and understood the information set forth in the brochure regarding the motor operated mechanism and the inductive load are quenching property, and that, as a result, he recognized the difference before approving the Russelectric switch. Moreover, from the above assumptions, it logically appeared that the Resident Engineer agreed with plaintiff that the standard of quality clause was applicable, and that the Russelectric switch was consistent with its limitations.\n\n\n111\nNevertheless, it is appropriate to fully examine the record to determine whether the facts show, as a matter of law, that the Russelectric switch was a suitable substitute for the ASCO switch described in the specifications. Accordingly, it is necessary to consider the three objections made by the Central Office Engineering Service of the Veterans Administration supporting its withdrawal of approval for the installation of the Russelectric switch. Those objections were: (1) that the Russelectric switch was not inherently double-throw; (2) that it was motor driven rather than solenoid actuated; and (3) that it did not have arcing contacts.\n\n\n112\nAs noted by the Board in its opinion, at p. 31,636, the first objection is without merit. The Government was forced to admit that if the ASCO switch was \"deemed inherently double-throw so must the Russell [sic] switch which was proffered.\"\n\n\n113\nWith regard to the second objection, the evidence in the record discloses that after an investigation of the comparative merits of the motor driven and solenoid actuated automatic transfer switches, the Government concluded that its \"confidence in the solenoid actuator is not as strong now as it was before and * * * that a properly designed, good quality motor will give the same degree of reliability as the solenoid.\" The Government did not dispute that the Russelectric switch had a properly designed, good quality motor.\n\n\n114\nFinally, as to the third objection, the evidence indicates that different arc protection devices were warranted for the ASCO and Russelectric switches due to the variation in the metallurgical composition of their respective contacts. No objection was made as to the performance of the Russelectric arc protection device when combined with the other properties of the Russelectric switch. It is therefore concluded that the above objections made by the Central Office Engineering Service did not justify rejection of the Russelectric switch, given the applicability of the standard of quality clause. Rather, the weakness of these objections, coupled with the evidence provided by plaintiff, indicates that the Russelectric switch would have proved as effective and as durable in the performance of the contract work as the ASCO switch described in the specifications.\n\n\n115\nIn light of the foregoing, it is concluded and held that plaintiff is entitled to an equitable adjustment, which the Board should have granted under the \"Changes\" clause of the contract, by reason of plaintiff being required to install the ASCO equipment rather than Russelectric equipment.\n\n\n116\nThe one question remaining is the amount of the equitable adjustment due plaintiff. As to this matter, defendant makes the following pertinent statement in its brief to the trial commissioner:\n\n\n117\nIf, for any reason, the Court holds that there are to be any further proceedings on plaintiff's claim, they should be before the VACAB and proceedings in this Court should be dismissed in order to permit those proceedings to go forward. This is true both with respect to any matters relating to the merits and as to the amount due, if plaintiff is entitled to recover.\n\n\n118\nIt is not clear from the above-quoted language or anything else said by defendant, whether it actually disputes the amount of $11,500.63 claimed by plaintiff to be due. It is clear from plaintiff's reply brief submitted to the trial commissioner, however, that plaintiff construes defendant's statement to mean that if the court should hold, as it has done, that plaintiff is entitled to recover, the matter should be referred back to the VACAB for determination of the amount due plaintiff as an equitable adjustment. In view of the foregoing, and the fact that this is a recurring problem, it is deemed advisable to discuss this question in some depth.\n\n\n119\nAs previously mentioned, the usual procedure in a case such as this \u2014 where the administrative board never reached the question of damages because it determined the issue of liability in favor of the Government and that decision is ultimately reversed by this court, as here \u2014 is to stay proceedings in order that the parties may return to the Board and afford it an opportunity to make findings as to the amount of the claim in the first instance. This is compelled by the decision of the Supreme Court in United States v. Anthony Grace & Sons, supra, and is facilitated by Rule 167 of this court. However, the instant case presents an entirely different set of facts and circumstances than those present in the Grace case.\n\n\n120\nAt the time of the Board hearing below, the hearing examiner inquired as to whether the parties desired to prove costs during the hearing or whether, in the event it was held that an equitable adjustment should be made, the matter should be remanded to the contracting officer for determination of the amount of the equitable adjustment. In response to this question, the attorney for plaintiff stated to the effect that plaintiff had already filed and would formally offer into evidence during the course of the hearing, certain depositions and exhibit material attached thereto, which in plaintiff's opinion constituted sufficient proof to substantiate the amount of his claim; and that, therefore, if the Board decided plaintiff was entitled to recover, he desired the Board to also make a determination as to the amount due him. Plaintiff's attorney also stated to the hearing examiner that if the VA wished to introduce any rebuttal testimony relative to the amount of plaintiff's claim, such testimony should be presented at that time.\n\n\n121\nThe attorney for the VA stated that he had no objection to plaintiff's request, and indicated that in his opinion plaintiff's exhibits adequately substantiated the amount of his claim, and that the amount thereof was legitimate. The VA did not offer any rebuttal testimony or other evidence during the Board proceedings regarding plaintiff's cost figures or amount of his claim. If the VA had any rebuttal evidence relevant to the amount of the equitable adjustment claimed by plaintiff, which it wished to introduce, such material should have been presented to the Board.\n\n\n122\nWithout contradiction by the Government, all evidence relating to the amount of the claim contained in the record was presented by plaintiff, including a computation of the various elements constituting plaintiff's claim, and testimony presented on both direct and cross-examination by plaintiff's Contract Manager, explaining the nature of the costs incurred by reason of the VA's action in withdrawing its approval of the Russelectric switch and requiring plaintiff to furnish ASCO equipment. Defendant should not now be heard to dispute the legitimacy of the amount claimed. From a review of the record as a whole, it is held that there is sufficient evidence, which was accepted without question by defendant, to support a finding as to the proper amount of the equitable adjustment due plaintiff.\n\n\n123\nIf the Board had decided the issue of liability against the Government, it undoubtedly would have proceeded to the question of quantum, and it would have had no difficulty in arriving at the exact dollar amount of the equitable adjustment due plaintiff. Moreover, the evidence in the record relative to costs and expenses incurred by plaintiff is such that for the Board to have made a finding supported by substantial evidence, it could have made only one finding. Under such circumstances, it would seem to be entirely illogical to send the case back to the Board.\n\n\n124\nThus, this case presents the question of the exact scope of the holding by the Supreme Court in Grace, supra, when the Court stated at 384 U.S. 430, 86 S. Ct. 1543:\n\n\n125\n* * * When the Board fails to reach and decide an issue because it disposes of the appeal on another ground * * * which the Court of Claims later rejects, there is no sound reason to presume that the Board will not promptly and fairly deal with the merits of the undecided issue if it is given the chance to do so.6 [Fn. 6 quoted infra.]\n\n\n126\nIn resolving the above-stated question, it is necessary that the quoted pronouncement of the Supreme Court be considered in context with footnote 6 appended to that holding, which reads:\n\n\n\n6\n We see no reason, in this regard, to distinguish between theories of liability not considered below and the issue of damages, which may not initially have been considered if the Board found no liability. If, because of the disposition of the case on appeal, any of these issues becomes important, the Board should be given an opportunity to consider them first. The rule we announce necessarily disapproves of such cases as Stein Bros. Mfg. Co. v. United States, 337 F.2d 861, 162 Ct.Cl. 802 and WPC Enterprises, Inc. v. United States, 323 F.2d 874, 163 Ct.Cl. 1, in which the Court of Claims retained the issue of damages after it reversed the Board's finding of no liability.\n\n\n\n127\nThe above quotations, particularly the footnote dealing with damages, seem, at first blush, to encompass all cases where an issue is not decided by the administrative board. However, this interpretation, at least in regard to the question of damages, must be tempered by the Court's citation of Stein Bros. Mfg. Co. v. United States, 337 F.2d 861, 162 Ct.Cl. 802 (1963), and WPC Enterprises, Inc. v. United States, 323 F.2d 874, 163 Ct.Cl. 1 (1963). Those cases both involved the factual pattern in which this court reversed the decisions of administrative boards on liability, and then remanded the cases to the court's trial commissioner for the purpose of making a determination with respect to the issue of damages. The opinion of this court in Stein Bros., however, states 337 F.2d 864, 162 Ct.Cl. at 808, \"very little testimony was taken on that issue before the Board,\" and in WPC Enterprises, the issue of damages was not even tried. This is hardly the situation here. As noted previously, not only has the issue of quantum been tried by the VACAB, but based on the record there is but one proper determination which the Board could have possibly made. It would be an exercise in mere semantics and illogical to conclude that this case is covered by the language contained in the Court's opinion in the Grace case quoted hereinbefore.\n\n\n128\nFurthermore, as demonstrated by the decisions in Maxwell Dynamometer Co., supra, and Ray D. Bolander Co., supra, as well as in Southwest Welding & Mfg. Co. v. United States, 373 F.2d 982, 179 Ct.Cl. 39 (1967), this court has not felt compelled to send all cases back to the administrative board for further proceedings where the evidence as to a relevant finding of fact is undisputed, or where the evidence is such that for the board to make a finding supported by substantial evidence, the board could only have made one finding. It appears logical to conclude that this same principle is as applicable to those findings which must be made in reaching a decision on the amount of an equitable adjustment as it is to those that are essential in determining the question of liability.\n\n\n129\nFinally, although some question may be raised as to the propriety of this procedure when examined in the light of the decision in the Grace case, no such question can be seriously raised when it is measured against clearly applicable statements made by the Supreme Court in United States v. Carlo Bianchi & Co., 373 U.S. 709, 83 S.Ct. 1409, 10 L.Ed.2d 652 (1963), where Mr. Justice Harlan stated that:\n\n\n130\n* * * there would undoubtedly be situations in which the court would be warranted, on the basis of the administrative record, in granting judgment for the contractor without the need for further administrative action. * * * [Id. 717, 83 S.Ct. 1415.]\n\n\n131\nUnder the circumstances present in this case, it appears to be one of the \"situations in which the court would be warranted, on the basis of the administrative record, in granting judgment for the contractor without the need for further administrative action.\" The facts relating to the amount of plaintiff's claim are before the court and no dispute between the parties as to such facts is disclosed by the record. It is therefore my opinion that the instant case should be deemed to fall within the line of cases decided by this court, i. e., line of cases decided by this court, i. e.,Maxwell Dynamometer Co., supra,Ray D. Bolander Co., supra, and Southwest Welding & Mfg. Co., supra, which hold that in certain situations it may make findings of fact that are necessary in order to enter judgment, and need not stay proceedings to allow the parties to return to the Board for the purpose of obtaining an administrative determination with respect to such factual matters.4\n\n\n132\nFor the foregoing reasons, it is held that plaintiff is entitled to an equitable adjustment of $11,500.63, and judgment should be entered for plaintiff in said amount.\n\nCONCLUSION\n\n133\nUpon the basis of the foregoing opinion, which is adopted by the court and made a part of the judgment herein, plaintiff's motion for summary judgment is granted, defendant's cross-motion for summary judgment is denied, and judgment is entered for plaintiff in the sum of $11,500.63.\n\n\n\nNotes:\n\n\n1\n 68 Stat. 81, 41 U.S.C. \u00a7 321, 22 (1964)\n\n\n2\n VACAB, Docket No. 563, dated January 31, 1968, 68-1 BCA \u00b6 6843, and supplementary decision dated July 29, 1968, 68-2 BCA \u00b6 7147, denying plaintiff's motion for reconsideration (hereinafter collectively referred to in the singular term \"decision\"). Unless specifically stated otherwise, all citations herein to the opinion of the Board refer to its January 31, 1968 decision\n\n\n3\n The Board's opinion does not specify this date as the one on which plaintiff ordered the equipment in question; however, the record contains undisputed evidence that this was done on that date. Therefore, the date is stated as a factSee Maxwell Dynamometer Co. v. United States, 386 F.2d 855, 870, 181 Ct.Cl. 607, 631 (1967).\n\n\n4\n Unlike the situation in Southwest Welding and Mfg. Co. v. United States, 413 F.2d 1167, 1187, n. 23, 188 Ct.Cl. 925, 957, n. 23 (1969), in the present case, as the court understands the administrative record, the plaintiff asked that the administrative proceeding determine quantum as well as liability, neither the Government nor the Board objected to such procedure, and the Government's counsel accepted and acquiesced in the plaintiff's proof of damages at the administrative hearing, deliberately choosing not to contest that proof. [footnote by the court]\n\n\n"} -{"text": "In the\nUnited States Court of Appeals\nFor the Seventh Circuit\n\nNos. 00-1977, 00-2493\n\nAntonio S. Contreras,\n\nPlaintiff-Appellant,\n\nv.\n\nSuncast Corporation, an Illinois Corporation,\nThomas Tisbo, John Baunach, Randall Guillotte,\nand Michael Hamilton,\n\nDefendants-Appellees.\n\n\n\nAppeals from the United States District Court\nfor the Northern District of Illinois, Eastern Division.\nNo. 96 C 3439--Ann Claire Williams\nand Suzanne B. Conlon, Judges.\n\n\nArgued November 30, 2000--Decided January 3, 2001\n\n\n\n Before Flaum, Chief Judge, and Easterbrook and Rovner,\nCircuit Judges.\n\n Flaum, Chief Judge. Antonio Contreras was\ninjured in a forklift accident while employed by\nSuncast. After repeated violations of Suncast\u2019s\nsafety protocols, work attendance policies, and\nacts of insubordination, Contreras was dismissed\nby the company. Contreras thereafter filed suit\nalleging a multitude of claims, primarily\nrevolving around the assertion that Suncast had\ndiscriminated against him in violation of both\nTitle VII of the Civil Rights Act of 1964, and\nthe Americans with Disabilities Act (\"ADA\"). The\ndistrict court granted Suncast summary judgment\non all of Contreras\u2019s claims, denied Contreras\u2019s\ncross-motion for partial summary judgment and\ndismissed Contreras\u2019s remaining state law claims.\nThe court also awarded Suncast a partial bill of\ncosts. Contreras now appeals both the summary\njudgment determinations as well as the award of\ncosts. For the reasons stated herein, we affirm.\n\nI. BACKGROUND\n\n Antonio Contreras, born in Monterrey, Mexico, is\na naturalized citizen of the United States.\nBeginning in November of 1994, Contreras was\nemployed as a forklift operator for Suncast\n\fCorporation (\"Suncast\"), a manufacturer and\ndistributor of lawn and garden equipment. During\nContreras\u2019s employment stint, Thomas Tisbo was\nSuncast\u2019s President, Michael Hamilton was the\nVice President, John Baunach was the Manager of\nHuman Resources, and Randall Guillotte was a\nProduction Flow Supervisor responsible for\nsupervising forklift drivers.\n\n Contreras\u2019s physical problems began on June 21,\n1995, when he was injured on the job in a\nforklift accident. Contreras filed a workers\ncompensation claim, and as a result of his\ninjuries, was instructed by his physician not to\ndrive a forklift for more than four hours a day\nand to spend the remainder of the day on light\nwork duty. Suncast complied with these\nrestrictions though Contreras argues that\nSuncast\u2019s accommodations were inadequate. On\nDecember 18, 1995, Contreras was again injured\nwhen he stood up quickly and struck his head on\na metal rack after hearing Guillotte call out his\nname. Contreras\u2019s work limitations became\npermanent on January 12, 1996.\n\n Contreras\u2019s disciplinary problems began on July\n20, 1995, when he was given a verbal, followed by\na written warning for violating forklift safety\nprocedures. On November 7, 1995, Guillotte\nobserved Contreras and two co-workers violating\nforklift safety rules. Guillotte met with the\nthree as a group and gave each of them a copy of\nthe safety rules to review. As Guillotte walked\naway from the meeting he heard Contreras say\n\"chingado,\" from which he understood Contreras to\nbe calling him a \"motherfucker.\" Contreras\nmaintains that what he actually uttered was\n\"vamanos a la chingada,\" an idiom for \"let\u2019s get\nthe hell out of here.\" Regardless, Guillotte gave\nContreras a verbal warning for his\ninsubordination. Contreras also repeatedly\nviolated Suncast\u2019s attendance policies. Between\nJanuary 3, 1996, and February 8, 1996, Contreras\nviolated attendance policies seven different\ntimes and was caught falsifying a Suncast time\ncard in an attempt to cover up one of these\nviolations. When Contreras was caught falsifying\nthe time card, he was suspended. At that point,\nhe filed an EEOC charge claiming that Suncast was\ndiscriminating against him on the basis of\nnational origin. On February 12, 1996, Contreras\nviolated the company attendance policy for an\neighth time in a little over one month. Having\nbeen progressively disciplined for these multiple\noffenses, Suncast discharged Contreras on\nFebruary 13, 1996. The following day, at the\nbehest of Contreras\u2019s union representative,\nSuncast offered to reinstate Contreras. Contreras\ninformed the company that he was not interested\nin returning to work, but that he wished to\n\fpursue legal action instead.\n\n Contreras brought suit in the district court\nraising a litany of claims against Suncast.\nSpecifically, Contreras alleged (1) that he was\nwrongfully terminated and not given a light work\nduty in violation of Title VII of the Civil\nRights Act of 1964; (2) that Suncast retaliated\nagainst him by discharging him, after he filed an\nEEOC charge, in violation of Title VII; (3) that\nhe was not reasonably accommodated after his\ninjury and discriminated against for requesting\naccommodations, in violation of the ADA; (4) that\nGuillotte assaulted him by intentionally causing\nhim to bang his head on the metal rack; (5) that\nSuncast was negligent in supervising Guillotte\nand directing Guillotte to stalk and assault\nContreras; (6) that Suncast wrongfully discharged\nhim after he filed a workers compensation claim.\nOn March 15, 2000, the district court granted\nsummary judgment to Suncast on all federal\nclaims, and dismissed the state law claims\nwithout prejudice. Those state law claims have\nbeen refiled in the district court under 28\nU.S.C. sec. 1332. On May 22, 2000, after this\ncase had been reassigned, the district court\npartially granted Suncast\u2019s Bill of Costs.\nContreras appealed the grant of summary judgment\nalong with the judgment granting the Bill of\nCosts. These two appeals have been consolidated\nand we now address them.\n\nII. DISCUSSION\nA. Contreras\u2019s Title VII Claims\n\n Contreras contends that the district court erred\nin granting summary judgment to Suncast on his\nnational origin discrimination claims under Title\nVII. We review a district court\u2019s grant of\nsummary judgment de novo, viewing the facts and\ndrawing all reasonable inferences in the light\nmost favorable to the nonmoving party. See\nStockett v. Muncie Indiana Transit Sys., 221 F.3d\n997, 1000 (7th Cir. 2000). Summary judgment is\nappropriate only where \"there is no genuine issue\nas to any material fact and . . . the moving\nparty is entitled to a judgment as a matter of\nlaw.\" Fed.R.Civ.P. 56(c); see James v. Sheahan,\n137 F.3d 1003, 1006 (7th Cir. 1998).\n\n Title VII of the Civil Rights Act of 1964 makes\nit unlawful for an employer \"to fail or refuse to\nhire or to discharge any individual, or otherwise\nto discriminate against any individual with\nrespect to his compensation, terms, conditions,\nor privileges of employment, because of such\nindividual\u2019s race, color, religion, sex, or\nnational origin.\" 42 U.S.C. sec. 2000(e)-2(a)(1).\nA plaintiff may meet his burden of proof under\nTitle VII by offering either direct proof of\n\fdiscriminatory intent or by proving disparate\ntreatment through the indirect, burden-shifting\nmethod outlined by the Supreme Court in McDonnell\nDouglas Corp. v. Green, 411 U.S. 792 (1973). See\nStockett, 221 F.3d at 1000-01; Plair v. E.J.\nBrach & Sons, Inc., 105 F.3d 343, 347 (7th Cir.\n1997). In this case, Contreras offers no direct\nproof of discrimination but attempts to meet his\nburden through showing discriminatory treatment\nunder the McDonnell Douglas test.\n\n Under the McDonnell Douglas burden shifting\nmethod, the plaintiff must raise an inference of\ndiscrimination by offering sufficient evidence to\nmake out the prima facie case. Pafford v. Herman,\n148 F.3d 658, 665 (7th Cir. 1998). To establish\na prima facie case under McDonnell Douglas, the\nplaintiff must demonstrate that (1) he belongs to\na protected class; (2) he performed his job\nsatisfactorily; (3) he suffered an adverse\nemployment action; and (4) his employer treated\nsimilarly situated employees outside of his\nprotected class more favorably. See Stockett, 221\nF.3d at 1000-01; Plair, 105 F.3d at 347. If a\nplaintiff is able to make the prima facie\nshowing, there is a presumption that the\nplaintiff was discriminated against, and the\nemployer must come forward with a legitimate non-\ndiscriminatory reason for the employment action.\nSee McDonnell Douglas, 411 U.S. at 802. At this\nstage, the employer need not prove that it was\nactually motivated by the proffered reason.\nRather, an employer \"need only produce admissible\nevidence which would allow the trier of fact\nrationally to conclude that the employment\ndecision had not been motivated by discriminatory\nanimus.\" Texas Dep\u2019t of Community Affairs v.\nBurdine, 450 U.S. 248, 257 (1981). Once the\ndefendant has met this burden of production, the\nplaintiff must prove by a preponderance of the\nevidence that the reason offered by the defendant\nis merely a pretext for discrimination. Id. at\n253. While the McDonnell Douglas approach is\noften called a \"burden shifting\" method of proof,\n\"[t]he ultimate burden of persuading the trier of\nfact that the defendant intentionally\ndiscriminated against the plaintiff remains at\nall times with the plaintiff.\" Id.\n\n The majority of Contreras\u2019s argument on his\nTitle VII claims is devoted to showing that\nsimilarly situated individuals outside the\nprotected class were treated more favorably than\nContreras. In fact, Contreras goes so far as to\nframe the issues for review as if the \"similarly\nsituated\" prong of McDonnell Douglas is the only\nburden keeping him from establishing the prima\nfacie case, and thus the dispositive issue in\ndetermining whether the district court decision\nshould be reversed. We are unpersuaded. Perhaps\n\fContreras\u2019s strategy is a recognition that he\ncannot establish the prima facie case. The\ndistrict court granted Suncast summary judgment,\nfinding that Contreras could not meet both the\nsecond and fourth prongs of the McDonnell Douglas\nprima facie case; namely that Contreras could not\nprove that he was meeting Suncast\u2019s legitimate\nexpectations and that he could not show that\nsimilarly situated non-Hispanic employees\nreceived more favorable treatment. Contreras\u2019s\nfailure in either of these regards is sufficient\nto uphold the district court\u2019s grant of summary\njudgment. Thus we proceed by analyzing first\nwhether Contreras was meeting the legitimate\nexpectations of Suncast.\n\n Contreras was employed by Suncast as a forklift\noperator. On November 14, 1994, Contreras\nacknowledged receiving a copy of Suncast\u2019s Work\nRules and General Plant Safety Rules. Those Rules\nestablish two groups of violations. Group A\nviolations, which the company believes to be so\nserious that a first offense may call for\nimmediate discharge, include falsifying\ninformation on company records (Rule A-4),\ninsubordination (Rule A-7), and taking extended\nrest periods (Rule A-9). Group B violations are\nconsidered less serious, and call for a tiered\nresponse, beginning with a verbal warning,\nfollowed by a written reprimand, suspension and\nfinally discharge. Relevant to our inquiry, Group\nB violations include failing to obey safety rules\n(Rule B-7), and repeated unexcused absences (Rule\nB-11). Though we recognize that coming to work,\nnot falsifying documents, and not being\ninsubordinate, are usually implicit expectations\nthat an employer has for his or her employees, by\nputting these requirements in Suncast\u2019s Work\nRules, there can be no claim that these were not\nlegitimate expectations of the company. See Robin\nv. Espo Eng\u2019g Corp., 200 F.3d 1081, 1090 (7th\nCir. 2000), (\"At the outset, this Court\u2019s inquiry\ninto the issue of legitimate expectations is more\naptly characterized as simply bona fide\nexpectations, for it is no business of a court in\na discrimination case to decide whether an\nemployer demands \u2019too much\u2019 of his workers. In\nother words, so long as the employer\u2019s employment\nexpectations are in good faith, without fraud or\ndeceit, we only determine if the employee met\nthem.\") (internal citations omitted). The\nuncontradicted evidence is that Contreras did not\nmeet those bona fide expectations. Contreras was\nrepeatedly cited for operating his forklift in an\nunsafe manner. Furthermore, within less than six\nweeks, Contreras violated the company\u2019s work\nattendance guidelines on no less than eight\noccasions. On one such occasion, Contreras\ndoctored company records in an attempt to conceal\nhis infraction. Finally, the \"chingado incident,\"\n\fas Contreras refers to it, shows a level of\ninsubordination that in itself was worthy of\ndismissal./1 All these facts show that Contreras\nwas not meeting the legitimate expectations of\nSuncast, and Contreras has not presented evidence\nto demonstrate the existence of a genuine issue\nof material fact on the subject./2 Had he done\nso he could have moved on to the next stage of\nanalysis. Coco v. Elmwood Care, Inc., 128 F.3d\n1177, 1179 (7th Cir. 1997)./3 However, as we\nhave stated, should a plaintiff fail to establish\nthat he was meeting the employer\u2019s bona fide\nexpectations, he is not entitled to present his\ncase to the jury and we need not proceed to the\nremaining steps of the McDonnell Douglas\nframework. See Espo Eng\u2019g Corp., 200 F.3d at\n1090; see also Coco, 128 F.3d at 1179 (\"If the\nplaintiff has other evidence of discrimination,\nwell and good; but if he has nothing else, and is\ntherefore totally reliant on the McDonnell\nDouglas formula, he is out of luck if he can\u2019t\nshow that he was meeting his employer\u2019s\nlegitimate expectations.\"). Given that Contreras\ncannot make out the prima facie case under the\napproach, we find no need to examine whether\nsimilarly situated individuals not of his\nprotected class were treated differently. Because\nContreras had to prove that he was meeting the\nlegitimate expectations of Suncast in order to\nmake the prima facie case for both his Title VII\ndiscriminatory discharge and discriminatory job\nassignment claims, and he has failed to do so, we\naffirm the district court\u2019s rulings in both of\nthese matters.\n\nB. Contreras\u2019s ADA Claims\n\n Contreras claims that the district court erred\nin granting summary judgment to Suncast on his\nfailure to reasonably accommodate claim. Once\nagain, the bulk of Contreras\u2019s argument is\ndevoted to a discussion of similarly situated\nindividuals. Specifically, his brief suggests\nthat \"[t]he fact that only Contreras of all these\npeople was fired allows the inference that his\ndischarge was related to his requests for\naccommodations.\"/4\n\n The ADA prohibits discrimination by covered\nentities, including private employers, against\nqualified individuals with a disability. Sutton\nv. United Air Lines, Inc., 527 U.S. 471, 477\n(1999). Specifically, the ADA provides that no\ncovered employer \"shall discriminate against a\nqualified individual with a disability because of\nthe disability of such individual in regard to\njob application procedures, the hiring,\nadvancement, or discharge of employees, employee\ncompensation, job training, and other terms,\nconditions, and privileges of employment.\" 42\n\fU.S.C. sec. 12112(a). Section 12112(b) of the Act\ndefines the different ways in which\ndiscrimination under section (a) might occur.\nRelevant to our inquiry, the ADA states that \"not\nmaking reasonable accommodations to the known\nphysical or mental limitations of an otherwise\nqualified individual with a disability who is an\napplicant or an employee\" is considered\ndiscrimination, \"unless such covered entity can\ndemonstrate that the accommodation would impose\nan undue hardship on the operation of the\nbusiness of such covered entity.\" 42 U.S.C. sec.\n12112(b)(5)(A). Thus, in order for a plaintiff to\nrecover under the ADA for an employer\u2019s failure\nto reasonably accommodate, that plaintiff must\nfirst show: (1) that he was or is disabled as\ndefined by the Act, (2) that his employer was\naware of the disability, and (3) that he was\nqualified for the position in question. Best v.\nShell Oil Co., 107 F.3d 544, 547-48 (7th Cir.\n1997). To qualify for the position in question,\nthe plaintiff must show that he is physically\ncapable of performing the essential functions of\nthe position, with or without an accommodation,\nand that he meets the legitimate educational,\ntraining, experience, and other requirements set\nby the employer for the position. See Dalton v.\nSubaru-Isuzu Automotive, Inc., 141 F.3d 667, 676\n(7th Cir. 1998).\n\n Under the ADA, a disability is defined as: \"(A)\na physical or mental impairment that\nsubstantially limits one or more of the major\nlife activities of such individual; (B) a record\nof such an impairment; or (C) being regarded as\nhaving such an impairment.\" 42 U.S.C. sec.\n12102(2). Contreras contends that because of his\ninjuries, he was substantially limited in the\nmajor life activities of working as well as\nreproduction/engaging in sexual relations. We\nexamine each of these claims in turn.\n\n As it has been defined, \"substantially limits\"\nmeans that the person is either unable to perform\na major life function, or is significantly\nrestricted in the duration, manner, or condition\nunder which the individual can perform a\nparticular major life activity, as compared to\nthe average person in the general population. See\n29 C.F.R. sec. 1630.2(j). When we discuss the\nmajor life activity of working, \"substantially\nlimits\" means the individual is significantly\nrestricted in the ability to perform a class of\njobs or a broad range of jobs in various classes.\nWebb v. Choate Mental Health and Dev. Ctr., 230\nF.3d 991, 998 (7th Cir. 2000). \"Thus an\nindividual is not substantially limited in\nworking just because he or she is unable to\nperform a particular job for one employer, or\nbecause he or she is unable to perform a\n\fspecialized job or profession requiring\nextraordinary skill, prowess or talent;\" instead,\n\"the impairment must substantially limit\nemployment generally.\" 29 C.F.R. sec. 1630.2(j),\nApp. (1999); see Webb, 230 F.3d at 998. As such,\nContreras has the burden of presenting evidence\nto demonstrate that his impairment limited his\nability to perform an entire class of jobs. See\nSkorup v. Modern Door Corp., 153 F.3d 512, 515\n(7th Cir. 1998).\n\n In support of his claim that he is\nsubstantially limited in the major life activity\nof working, Contreras advances that he is unable\nto lift in excess of 45 pounds for a long period\nof time, unable to engage in strenuous work, and\nunable to drive a forklift for more than four\nhours a day. Taking Contreras\u2019s assertions as\nfact, we fail to see how such inabilities\nconstitute a significant restriction on one\u2019s\ncapacity to work, as the term is understood\nwithin the ADA. Contreras has not presented\nevidence that even hints at the notion that he is\nprecluded from a broad class of jobs. Though this\nprecise claim has not found its way into our\npublished case law, we note that other circuits\nfaced with similar sets of facts have found those\nlimitations do not qualify as a substantial\nlimitation on working (and thus a disability\nunder the ADA). See e.g. Williams v. Channel\nMaster Satellite Sys., Inc., 101 F.3d 346, 349\n(4th Cir. 1996) (holding as a matter of law that\n\"twenty-five pound lifting limitation--\nparticularly when compared to an average person\u2019s\nabilities--does not constitute a significant\nrestriction on one\u2019s ability to lift, work, or\nperform any other major life activity\"); Aucutt\nv. Six Flags Over Mid-America, 85 F.3d 1311, 1319\n(8th Cir. 1996) (holding plaintiff failed to show\nhe was substantially limited in major life\nactivities where \"a 25-pound lifting restriction\nwas the only medical limitation placed upon\n[plaintiff\u2019s] activities\"); Ray v. Glidden Co.,\n85 F.3d 227, 228-29 (5th Cir. 1996) (holding that\ninability to continuously lift containers\nweighing on average 44-56 pounds \"does not render\na person substantially limited in the major life\nactivities of lifting or working\"); Wooten v.\nFarmland Foods, 58 F.3d 382, 384, 386 (8th Cir.\n1995) (plaintiff not substantially limited in\nmajor life activity of working where plaintiff\nwas restricted to light duty with no working in\ncold environment and no lifting items weighing\nmore than 20 pounds)./5 Nor have we ever\nsuggested that forklift operation, the specific\njob Contreras claims he cannot perform for more\nthan four hours, is broad enough to constitute a\nclass of jobs. It was Contreras\u2019s burden on\nsummary judgment to show that he could come up\nwith evidence to show he could meet his ultimate\n\fburden of showing an ADA recognized disability.\nSee DePaoli, 140 F.3d at 672. He has not done so.\nThus, the district court was correct to reject\nContreras\u2019s claim that he is substantially\nlimited in the major life activity of working.\n\n Contreras also suggests that he is disabled in\nthe major life activities of sexual reproduction\nand engaging in sexual relations. These claims\nare based completely on Contreras\u2019s unsupported\nassertion that while he was able to have\nintercourse 20 times a month prior to his\naccident, at present he can only have sex two\ntimes a month. That sexual reproduction is a\nmajor life activity was acknowledged by the\nSupreme Court in Bragdon v. Abbott, 524 U.S. 624,\n639 (1998) (\"In the absence of any reason to\nreach a contrary conclusion, we agree with the\nCourt of Appeals\u2019 determination that reproduction\nis a major life activity for the purposes of the\nADA\"). Furthermore, we recognize it may be argued\nthat the Supreme Court may have implied that\nengaging in sexual relations is a major life\nactivity. See Bragdon, 524 U.S. at 638\n(\"[r]eproduction and the sexual dynamics\nsurrounding it are central to the life process\nitself.\")./6 However, we find Contreras\u2019s\nattempts to liken his situation to that of\nBragdon unconvincing. In Bragdon, the Court\nconsidered whether HIV was a physical impairment\nwithin the meaning of the ADA. In that case,\nplaintiff brought an action--under the portion of\nthe ADA that dealt with equal access to public\naccommodations--against a dentist who had refused\nto treat her in his office. In reaching the\nconclusion that an HIV infected woman was\nsubstantially limited in her ability to\nreproduce, the Supreme Court focused on the fact\nthat an infected woman who attempts to reproduce\nimposed a significant risk of transmitting the\ndisease to any male she has intercourse with as\nwell as to her child during gestation and\nchildbirth. Bragdon, 524 U.S. at 639.\n\n It is apparent that our present situation is\nreadily distinguishable from Bragdon. The Supreme\nCourt\u2019s ruling in that matter does not stand for\nthe proposition that a change in the frequency\nwith which an individual can engage in\nintercourse, as a result of a bad back,\nconstitutes an impairment which substantially\nlimits a major life activity. Rather, the Court\nbased its decision on the undeniable impact that\nHIV can have on the feasibility of reproduction.\nContreras has not shown any significant impact on\nhis ability to reproduce. He has not produced\neven a scintilla of evidence that he is\nsignificantly restricted as to the condition,\nmanner or duration under which he can reproduce\nas compared to the average person in the general\n\fpopulation. See 29 C.F.R. sec. 1630,2(j)(1). In\naddition, even if we assume that engaging in\nsexual relations is a major life activity,\nContreras has not substantiated his claim of\nsexual difficulties with any documentation or\ntestimony beyond a general assertion that the\nfrequency with which he has relations has\ndecreased. Such a bald declaration, without\nanything more, cannot create a genuine issue of\nmaterial fact as to Contreras being disabled that\nwould preclude summary judgment. Therefore, we\nfind that it was appropriate to grant Suncast\nsummary judgment on these ADA claims.\n\nC. Contreras\u2019s Claims of Retaliatory Firing Under\nTitle VII and the ADA\n\n Contreras argues that his termination by Suncast\nconstitutes an act of retaliation, prohibited by\nboth Title VII and the ADA. Specifically,\nContreras puts forth that the only reason he was\nterminated was because Suncast wished to punish\nhim for requesting accommodations and filing an\nEEOC complaint. Title VII prohibits employers\nfrom discriminating against an employee \"because\nhe has opposed any practice made an unlawful\nemployment practice by this subchapter, or\nbecause he has made a charge, testified,\nassisted, or participated in any manner in an\ninvestigation, proceeding, or hearing under this\nsubchapter.\" 42 U.S.C. sec. 2000e-3(a).\nSimilarly, the ADA provides that \"[n]o person\nshall discriminate against any individual because\nsuch individual has opposed any act or practice\nmade unlawful by this chapter or because such\nindividual made a charge, testified, assisted, or\nparticipated in any manner in an investigation,\nproceeding, or hearing under this chapter.\" 42\nU.S.C. sec. 12203.\n\n In order to prevail on a claim of retaliation,\na plaintiff must either offer direct evidence of\nretaliation, or proceed under a burden-shifting\nmethod. See Smart v. Ball State Univ., 89 F.3d\n437, 440 (7th Cir. 1996). Since Contreras has\noffered no direct evidence of retaliation, he\nmust make the prima facie case for discriminatory\nretaliation. Under both Title VII and the ADA,\nthe prima facie case requires that Contreras\nprove (1) that he engaged in statutorily\nprotected activity; (2) that he suffered an\nadverse employment action; and (3) that there is\na causal connection between the two events. Id.\nOnce the prima facie case is established, the\nburden shifts to Suncast to articulate a\nlegitimate and nondiscriminatory reason for its\nactions which Contreras must show to be a pretext\nfor unlawful retaliation. Rennie v. Dalton, 3\nF.3d 1100, 1108-09 (7th Cir. 1993).\n\f Contreras claims that he was terminated on\nFebruary 13, 1996 in retaliation for filing his\nEEOC charge on January 18, 1996. In that charge,\nContreras claimed that defendants harassed him on\nthe basis of his national origin and denied him\nreasonable accommodations. Yet, Contreras has\npresented nothing more than temporal proximity in\nsupport of his causal connection argument.\n\"Timing may be an important clue to causation,\nbut does not eliminate the need to show\ncausation.\" Bermudez v. TRC Holdings, Inc., 138\nF.3d 1176, 1179 (7th Cir. 1998) (internal\ncitation omitted). We have held that absent other\nevidence of retaliation, a temporal relation is\ninsufficient evidence to survive summary\njudgment. Gleason v. Mesirow Financial, Inc., 118\nF.3d 1134, 1136 (7th Cir. 1997). The evidence\nshows that Contreras was terminated after a\nseries of unexcused absences and acts of\ninsubordination. He has done nothing to establish\nthat his filing of an EEOC charge or request for\naccommodations even factored into Suncast\u2019s\ndecision to dismiss him. In fact, the pattern of\nevents suggests that the complaint and request\nfor accommodations were non-factors in his\ndismissal. Therefore, we agree with the district\ncourt that Contreras has failed to make the prima\nfacie case for retaliation for both Title VII and\nADA purposes.\n\nD. Contreras\u2019s Motion for Summary Judgment\n\n Contreras filed a cross-motion for partial\nsummary judgment in this matter, claiming that\nSuncast\u2019s accommodation policy is a per se\nviolation of the ADA. The district court\ndetermined that because Contreras was not a\nqualified individual with a disability, he did\nnot have Article III standing to challenge\nSuncast\u2019s accommodations policy as facially\ninvalid. Contreras suggests that the district\ncourt\u2019s opinion is inconsistent, in that it found\nContreras to be disabled while at the same time\ndenied him standing under the ADA. First, as we\nstated above, we do not read the district court\u2019s\nopinion to have determined the disability issue\nconclusively. The court did not make the\nrequisite analysis that would be necessary in\norder to find one disabled under the ADA, but\nrather assumed \"for the purposes of [the summary\njudgment] motion . . . that Contreras is disabled\nunder the ADA.\" Secondly, as the court below\nnoted, even presuming that Contreras is disabled,\nthat is not the only hurdle he must pass in order\nto have standing to challenge Suncast\u2019s\naccommodations policy. The ADA, by its language,\nprotects qualified individuals with disabilities\nfrom discrimination in employment. 42 U.S.C. sec.\n12112(a). A \"qualified individual\" with a\ndisability is one who with or without reasonable\n\faccommodation, is able to perform the essential\nfunctions of his job. The district court\ndetermined that Contreras had failed to establish\nthat he was a qualified individual with a\ndisability under the ADA, in that he did not\npresent evidence that he was both disabled and\nable to perform the essential functions of his\nforklift driver job with reasonable\naccommodations. Thus, the court believed that\nContreras could not have established injury in\nfact as is required for Article III standing. See\nLujan v. Defenders of Wildlife, 504 U.S. 555, 560\n(1992).\n\n We agree with the district court\u2019s\ninterpretation that Contreras does not have\nstanding to challenge Suncast\u2019s accommodation\npolicy, in that he is not a qualified person with\na disability, the type of individual protected by\nthe relevant portions of the ADA. See e.g.,\nStuckey v. City of Naperville, No. 97 C 7037,\n1998 WL 173298 at *4 (N.D. Ill. April 7, 1998)\n(\"Stuckey focuses his attention on a claim that\nthe City\u2019s disability policy is a \u2019per se\nviolation of the ADA\u2019 and . . . inexplicably\noverlooks the fact that he is without standing to\ncontest the City\u2019s policy if he is not a\nqualified individual with a disability under the\nADA. In other words, the potential illegality of\nthe City\u2019s policy does not automatically allow\nStuckey to proceed with his claim under the\nADA.\"). Contreras\u2019s impairment did not bring him\nwithin the gamut of those who could challenge the\nlegality of Suncast\u2019s accommodations policy, and\nthe fact that he is no longer employed by the\ncompany means that there is no risk that he will\never suffer an injury as a result of the policy.\nTherefore, we affirm the district court\u2019s\ndecision finding Contreras lacked standing to\nchallenge Suncast\u2019s accommodations policy.\n\nE. Contreras\u2019s Remaining Claims\n Finally, we note three additional arguments\nraised by Contreras. Though Contreras devoted the\nmajority of his oral argument to these claims, we\nfind them unconvincing and therefore will dispose\nof them without much elaboration. Contreras\u2019s\nfirst of these contentions is that the district\ncourt abused its discretion by allowing Suncast\nto resubmit four affidavits to cure the\nprocedural defect that they had been originally\nnotarized by Baunach, a party to the lawsuit.\nContreras has presented no evidence or case law\nto support the idea that the district court\u2019s act\nof allowing Suncast to replace the invalid\naffidavits with a disinterested notary\u2019s\nsignature constitutes \"a decision that no\nreasonable person could agree with--a ruling that\nis fundamentally wrong.\" Roy v. Austin Co., 194\nF.3d 840, 843 (7th Cir. 1999). We find no error\n\fin the district court\u2019s actions, and certainly\nnone requiring reversal in this matter.\n\n Secondly, Contreras finds error in the district\ncourt\u2019s decision to dismiss his remaining state\nlaw claims without prejudice after the court\ngranted Suncast summary judgment on all federal\nclaims. According to the supplemental\njurisdiction statute, a district court \"may\ndecline to exercise supplemental jurisdiction\"\nover pendent state law claims if the court has\ndismissed all claims over which it has original\njurisdiction. 28 U.S.C. sec. 1367(c)(3). \"A\ndecision to relinquish pendent jurisdiction\nbefore the federal claims have been tried is, as\nwe have said, the norm, not the exception, and\nsuch a decision will be reversed only in\nextraordinary circumstances.\" Disher v. Info.\nResources, Inc., 873 F.2d 136, 140 (7th Cir.\n1989). Here, given that Contreras has refiled\nthese state law claims in federal court, invoking\ndiversity jurisdiction, we fail to find any\nextraordinary circumstances that would even\napproach suggesting that the court, in dismissing\nthe claims, abused its discretion.\n\n Lastly, Contreras suggests this case was\nimproperly transferred to Judge Conlon (who\nrendered the decision on costs), and that\ntherefore the award of costs should be nullified.\nAfter summary judgment was granted, this case was\ntransferred from Judge Williams to Judge Conlon,\non account of Judge Williams\u2019 elevation to this\nCourt. Pursuant to Local Rule 40.1(f), which\nContreras cites but inexplicably ignores, cases\non the calendar of a leaving judge shall be\nreassigned under the direction of the Executive\nCommittee. On March 3, 2000, the Executive\nCommittee ordered as follows: \"IT IS HEREBY\nORDERED that theClerk [sic] of the Court reassign\nthe above-captioned case by lot to the calendar\nof an active judge of this court in accordance\nwith the Rules.\" Given the above-cited local rule\nand the language of the reassignment order, we do\nnot understand how Contreras could claim that\nthis case was improperly transferred. The issue\nof costs in this matter was decided by an\nimpartial Article III judge, and to the extent\nthat Contreras\u2019s argument implies that the\ndistrict court circumvented local rules in this\nregard, we categorically disagree.\n\nIII. CONCLUSION\n\n For the foregoing reasons, we Affirm the decision\nof the district court.\n\n\n\n/1 Contreras argues on appeal that since summary\n\fjudgment requires that we draw all reasonable\ninferences in favor of the nonmoving party, in\nthis instance Contreras, that we must accept as\ntrue his version of the chingado/vamos a la\nchingada episode. However, it is irrelevant for\nour purposes which version is accurate. Either\nway, Contreras\u2019s words evince an attitude of\nactual and perceived insubordination that\nfactored into his dismissal.\n\n/2 In his brief, Contreras refers to this checkered\nemployment record as a \"series of minor\ndisciplinary write-ups.\" We view that\ncharacterization as extremely generous.\n\n/3 Although the evidence is uncontradicted that\nContreras was not doing the job for which he had\nbeen hired, if he could show that, even so, it\nwas his national origin that induced the\ndefendant\u2019s adverse employment actions, he might\nhave had a case. For it is not a defense to a\ndiscrimination case that the plaintiff should\nhave been fired, if he would not have been fired\nhad it not been for discriminatory animus.\nMcKennon v. Nashville Banner Publishing Co., 513\nU.S. 352 (1995); Dranchak v. Akzo Nobel Inc., 88\nF.3d 457, 461 (7th Cir. 1996). But that would be\na case in which the plaintiff had direct evidence\nof discrimination and was not dependent on the\nMcDonnell Douglas burden shifting formula. If the\nplaintiff has no direct evidence of\ndiscrimination and is therefore confined to the\nformula, he must prove that he was meeting (or at\nleast that there is a genuine issue of whether he\nwas meeting) his employer\u2019s bona fide\nexpectations, before he can force the employer to\nproduce the reasons for why he was fired or\notherwise subjected to adverse action. He cannot\nget anywhere in such a case merely by trying to\nprove that he was fired for a reason unrelated to\nhis deficiencies. St. Mary\u2019s Honor Ctr. v. Hicks,\n509 U.S. 502, 519 (1993). For such evidence to\ndefeat summary judgment, the plaintiff must have\nmade out a prima facie case under McDonnell\nDouglas. See Coco, 128 F.3d at 1179-80. Because\nContreras has failed to do this, his present\nattempt to use comparisons to similarly situated\nindividuals in order to prove discrimination is\ninappropriate.\n\n/4 Even assuming arguendo that Contreras\u2019s similarly\nsituated individuals were not fired from Suncast,\nwe are puzzled at how this fact relieves\nContreras from the burden of establishing an ADA\nfailure to reasonably accommodate claim. However,\nwe will read Contreras\u2019s argument as a broad\nchallenge to the summary judgment decision\nagainst him on the ADA claims, and address the\nactual relevant issues.\n\f/5 We note, however, that there is a line of Seventh\nCircuit case law which could be read to suggest\nan opposite result. While Contreras has chosen\nnot to rely on these cases, we believe it\nimportant to identify these cases and explain why\nthey are inapplicable to these circumstances. In\nDePaoli v. Abbott Lab., Inc., 140 F.3d 668 (7th\nCir. 1998), Best, and Cochrum v. Old Ben Coal\nCo., 102 F.3d 908 (7th Cir. 1996), we found that\nthe plaintiffs had produced enough evidence to\nsurvive summary judgment on the issue of whether\nthey were disabled under the ADA because of their\nsubstantial limitations in the major life\nactivity of working. But what is significant\nabout these cases is the court\u2019s emphasis on the\nbreadth of the restrictions placed on the\nplaintiffs and their doctors\u2019 recommendations\nconcerning how their respective injuries would\naffect their ability to obtain other employment.\nSee DePaoli, 140 F.3d at 673 (evidence showed\nthat plaintiff\u2019s injury precluded her from\nvirtually any job requiring repetitive movement\nof the hand); Best, 107 F.3d at 548 (doctor\nadvised that plaintiff should \"find another line\nof work\" due to his knee injury); Cochrum,102\nF.3d at 911 (nature of plaintiff\u2019s shoulder\ninjury and doctor\u2019s broad restrictions indicated\nthat plaintiff could be disqualified from a broad\nrange of jobs). In contrast, Contreras\u2019s\nrestrictions are quite specific and he has\noffered no evidence--other than the restrictions\nthemselves--to show that his back injury limits\nhis ability to engage in a class of jobs.\n\n/6 The district court, for purposes of the summary\njudgment motion, assumed that Contreras was\ndisabled within the terms of the ADA because of\nhis proposed sexual intercourse limitations, and\nfound his claim lacking for other reasons. We\nnote that notwithstanding the Ninth Circuit\u2019s\ndecision in McAlindin v. San Diego, 192 F.3d\n1226, 1234 (9th Cir. 1999), this Court has not\nestablished a rule that sexual relations are a\nmajor life activity for ADA purposes. In this\ninstance, resolution of that issue is not\nrequired in order to agree that summary judgment\nfor Suncast was appropriate. Therefore, we will\nnot address the issue of whether sexual relations\nis a major life activity and instead we will\nproceed to examine whether Contreras has met his\nother burdens in establishing a claim of failure\nto reasonably accommodate under the ADA.\n\f"} -{"text": " United States Court of Appeals\n Fifth Circuit\n F I L E D\n IN THE UNITED STATES COURT OF APPEALS\n March 23, 2007\n FOR THE FIFTH CIRCUIT\n Charles R. Fulbruge III\n Clerk\n\n No. 05-20581\n\n\n\nUNITED STATES OF AMERICA\n\n Plaintiff - Appellee\n\n v.\n\nKENNETH GREEN, also known as Sherrod Sylvester McClain\n\n Defendant - Appellant\n\n\n Appeal from the United States District Court\n for the Southern District of Texas, Houston\n No. 4:98-CR-311\n\n\nBefore BARKSDALE, DeMOSS, and PRADO, Circuit Judges.\n\nPER CURIAM:*\n\n In August 1998, the defendant-appellant, Kenneth Green, was\n\ncharged by indictment as \u201cJohn Doe\u201d with making a false statement\n\non a passport application in violation of 18 U.S.C. \u00a7 1542. The\n\nindictment specifically alleged that the defendant \u201cstated and\n\nrepresented in the Form DSP-11, \u2018Application for a United States\n\nPassport,\u2019 that he was in fact Sherrod Sylvester McClain when,\n\n\n\n *\n Pursuant to 5TH CIR. R. 47.5, the court has determined\nthat this opinion should not be published and is not precedent\nexcept under the limited circumstances set forth in 5TH CIR. R.\n47.5.4.\n\n -1-\n\fthen and there, Defendant knew that he was not Sherrod Sylvester\n\nMcClain.\u201d Along with the passport application, Green submitted\n\nan application for a Texas identification card that bore right\n\nand left thumbprints and a photograph, also purporting to be\n\nthose of McClain.\n\n At the time of the indictment, Green was known to law\n\nenforcement officials only by McClain, the alias he had used to\n\ncommit the underlying offense of making a false statement on a\n\npassport application. Post-indictment, agents entered the\n\ninformation they had on Green, including his physical\n\ndescription, into the National Crime Information Center system.\n\nBecause agents suspected that the defendant was involved in drug\n\ntrafficking, copies of the warrant and photographs of the subject\n\nwere given to a Houston police sergeant involved with a drug task\n\nforce in December 1998, and to a Drug Enforcement Administration\n\nagent in January 1999. On August 30, 2002, agents ran a records\n\ncheck using the defendant\u2019s alias, but the effort turned up no\n\nnew information.\n\n In September 2002, agents used fingerprint technology to\n\nmatch the unknown thumbprints from the Texas identification card\n\napplication with those of Green, whose thumbprints were on file\n\nwith the FBI. Agents also compared a photograph of Green with\n\nthe one on the application and determined they were the same\n\nperson. That same month, agents retrieved Green\u2019s arrest records\n\nfrom Waller County, Texas.\n\n -2-\n\f In October 2002, agents learned and verified that Green was\n\nincarcerated in the Wisconsin Department of Corrections and had\n\nbeen there since 2000. In October 2003, agents received Green\u2019s\n\nbooking photograph and fingerprint card from Wisconsin\n\nauthorities. Thereafter, agents gathered the necessary\n\ndocumentation and sent Green\u2019s prints to the Immigration and\n\nCustoms Enforcement (\u201cICE\u201d) forensic laboratory for comparison.\n\nIn August 2004, the agents received confirmation from ICE of\n\nGreen\u2019s identity.\n\n In September 2004, a detainer was placed on Green at the\n\nWisconsin facility where he was incarcerated. On November 16,\n\n2004, the United States Attorney filed an application for writ of\n\nhabeas corpus ad prosequendum, requesting that Green be brought\n\nbefore the United States District Court for the Southern District\n\nof Texas. On January 4, 2005, Green made his initial appearance\n\nin the district court.\n\n On February 18, 2005, Green filed a motion to dismiss the\n\nindictment, arguing that the post-indictment delay violated his\n\nSixth Amendment right to a speedy trial. On March 8, 2005, the\n\ndistrict court denied Green\u2019s motion.\n\n Following a stipulated bench trial in March 2005, Green was\n\nconvicted and sentenced to one month in prison, to be served\n\nconcurrently with an existing state court sentence and to be\n\nfollowed by three years of supervised release.\n\n Green now appeals his judgment of conviction and sentence,\n\n -3-\n\farguing that the district court erred in denying his motion to\n\ndismiss the indictment. Green contends that the post-indictment\n\ndelay, from the issuance of the indictment in August 1998 to the\n\nfiling of the detainer on Green in September 2004, violated his\n\nSixth Amendment right to a speedy trial.\n\n Green\u2019s speedy trial claim is controlled by the four-factor\n\nbalancing test in Barker v. Wingo, 407 U.S. 514 (1972). Under\n\nthat test, the court considers: (1) the length of the delay; (2)\n\nthe reason for the delay; (3) the defendant\u2019s diligence in\n\nasserting his Sixth Amendment right; and (4) the prejudice to the\n\ndefendant caused by the delay. United States v. Cardona, 302\n\nF.3d 494, 496 (5th Cir. 2002) (citing Barker, 407 U.S. at 530-\n\n33).\n\n In Doggett v. United States, 505 U.S. 647 (1992), the\n\nSupreme Court clarified how the four factors are to be weighed\n\nand the burden each party carries. The threshold inquiry is\n\nwhether the delay is long enough to trigger a speedy trial\n\nanalysis. United States v. Bergfeld, 280 F.3d 486, 488 (5th Cir.\n\n2002) (citing Doggett, 505 U.S. at 651-52). Generally, a post-\n\naccusation delay approaching one year is sufficient. Id. (citing\n\nDoggett, 505 U.S. at 652 n.1).\n\n \u201cIf a court undertakes a full Barker-analysis, it evaluates\n\nthe first three factors (delay-length; reason for it; diligence\n\nin asserting right) in order to determine whether prejudice will\n\nbe presumed or whether actual prejudice must be shown.\u201d United\n\n -4-\n\fStates v. Frye, 372 F.3d 729, 736 (5th Cir. 2004). \u201cIn all of\n\nthis, courts do not engage in a rigid analysis, but engage in the\n\n\u2018functional analysis of the right in the particular context of\n\nthe case.\u2019\u201d Id. (quoting Barker, 407 U.S. at 522).\n\n In analyzing Green\u2019s Sixth Amendment claim, the district\n\ncourt recognized that it was required to engage in a full Barker-\n\nanalysis because of the length of the post-indictment delay.\n\nSee Tr. of Mot. Hr\u2019g at 43, United States v. Green, No. H-98-CR-\n\n311 (S.D. Tex. Mar. 8, 2005). Green\u2019s counsel told the district\n\ncourt that Green was relying entirely on the presumption of\n\nprejudice for his claim. See id. at 4. This statement, along\n\nwith the court\u2019s finding that there was absolutely no evidence of\n\nactual prejudice, required the court to balance the first three\n\nfactors under Barker and Doggett to determine if prejudice would\n\nbe presumed. See id. at 43-47.\n\n In addressing the first two factors, the district court\n\nfound that \u201cthe Defendant contributed to the problems\n\nsignificantly because he admittedly used false information and as\n\na result he was indicted as a John Doe. Clearly, his efforts to\n\nprevent the Government from figuring out who he was contributed\n\nto the delay in the Government\u2019s figuring out who he was.\u201d Id.\n\nat 43. The court also found that \u201cthere were periods of time in\n\nwhich the Government had available to it the means of resolving\n\nthat confusion that it did not avail itself of as early as it\n\n\n\n -5-\n\fmight have done.\u201d Id. The court concluded \u201cthat there was a\n\nrelatively short period of delay that is attributable to some\n\ndegree of governmental negligence[,]\u201d but attributed the \u201cmuch\n\nlonger period of delay . . . to a combination of the Defendant\u2019s\n\nefforts to hide his identity and the Government\u2019s failure,\n\nalthough they made attempts to find the Defendant, to locate\n\nhim.\u201d Id. at 46. The court found that there was \u201ccertainly no\n\ndegree of culpability [by the Government] that is higher than a\n\nlow degree of negligence.\u201d Id. Finally, in addressing the third\n\nfactor, the court found that Green had diligently asserted his\n\nconstitutional right. Based on these factors, the court\n\nconcluded that although \u201c[a] combination of those factors makes\n\nthis a relatively close case\u201d on whether it should presume\n\nprejudice, it did not \u201csee a basis for dismissing the\n\nindictment.\u201d Id. at 47.\n\n Having reviewed the briefs, the district court\u2019s oral\n\nruling, and the pertinent portions of the record, we find no\n\nerrors of law or fact warranting reversal. Essentially for the\n\nreasons stated by the district court, we agree that the length of\n\nthe delay attributable to the government\u2019s negligence, even when\n\nconsidered in light of the defendant\u2019s assertion of his right, is\n\nnot sufficient for a presumption of prejudice. Cf. United States\n\nv. Serna-Villarreal, 352 F.3d 225, 232 & 233 n.5 (5th Cir. 2003),\n\ncert. denied, 541 U.S. 981 (2004) (stating that \u201cthis Court and\n\n\n\n -6-\n\fothers generally have found presumed prejudice only in cases in\n\nwhich the post-indictment delay lasted at least five years\u201d and\n\nnoting that \u201c[t]he portion of the post-indictment delay\n\nattributable to government negligence in Doggett, Bergfeld, and\n\nCardona, was six years, five years, and five years,\n\nrespectively\u201d).1 Accordingly, because Green relied solely on\n\npresumptive prejudice and because he cannot show actual\n\nprejudice, the judgment of the district court is affirmed.\n\n AFFIRMED.\n\n\n\n\n 1\n Although Green argues that this circuit\u2019s decision in\nSerna-Villarreal conflicts with the Supreme Court\u2019s decision in\nBarker, it is a well-established rule that one panel of this\ncourt may not overrule a prior panel\u2019s decision, absent an en\nbanc or intervening Supreme Court decision. See United States v.\nTreft, 447 F.3d 421, 425 (5th Cir.), cert. denied, 127 S. Ct. 555\n(2006). We therefore decline to consider this argument any\nfurther on appeal.\n\n -7-\n\f"} -{"text": "\n969 So.2d 169 (2006)\nSTATE of Alabama\nv.\nDaniel Wade MOORE.\nNo. CR-04-0805.\nCourt of Criminal Appeals of Alabama.\nJuly 21, 2006.\n*170 Troy King, atty. gen., and Corey L. Maze, Beth Slate Poe, and Donald G. Valenska II, asst. attys. gen., for appellant.\nJames Timothy Kyle, Decatur; and Sherman B. Powell, Jr., Decatur, for appellee.\nMcMILLAN, Presiding Judge.\nThe State of Alabama appeals the circuit court's dismissal of the capital-murder indictment returned against Daniel Wade Moore by a Morgan County grand jury.\nIn November 2000, Moore was indicted for murdering Karen Croft Tipton during the course of a robbery. He was reindicted in May 2002 for five counts of capital murder for murdering Tipton during the course of committing a rape, a sexual abuse, a kidnapping, a robbery, and a burglary. Moore was convicted of four counts of capital murder. The jury recommended a sentence of life imprisonment without the possibility of parole. The circuit court chose not to follow the jury's recommendation but instead sentenced Moore to death.\nMoore moved for a new trial alleging that the State had violated the United States Supreme Court's decision in Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), by failing to disclose exculpatory evidence. The circuit court granted Moore's motion and scheduled the case for retrial.\nThe State filed a petition for a writ of mandamus in this Court attacking the circuit court's ruling granting Moore a new trial. See Rule 21(a), Ala.R.App.P. A majority of this Court requested that the respondent answer the allegations contained in the State's mandamus petition. Judge Thompson filed a response that stated, in part:\n\"Because of the violations of the discovery order, the undersigned seriously considered dismissing the case with prejudice. However, the Court feels that justice would not be served to do so, that the victim is entitled to her day in court and the defendant is entitled to a fair trial. A dismissal of the case would serve no purpose other than to warn the prosecution that the courts in this State will not tolerate violations of its discovery orders. Whether or not the violations were intentional or simply the result of neglect, the Court cannot say. The bottom line is that they did in fact occur and that the only possible way to correct these violations requires that this case be tried again at the earliest possible date.\"\n(C.R. 916-17.) We then denied the extraordinary petition. State v. Moore, 897 So.2d 1248 (Ala.Crim.App.2003) (table). A similar mandamus petition was filed in the Alabama Supreme Court. That court also *171 denied relief. State v. Moore, (No. 1030218, November 6, 2003).\nMoore then moved that the circuit court dismiss the capital-murder indictment. He alleged that he could not receive a fair retrial because of the prosecutor's many Brady violations. Fifteen months after the motion was filed the circuit court dismissed the capital-murder charges and ordered that Moore be immediately released from the Morgan County jail. The State appealed pursuant to Rule 15.7, Ala. R.Crim.P., and moved that we stay enforcement of the circuit court's order directing Moore's immediate release from custody. We granted the State's motion pursuant to Rule 15.7(d), Ala.R.Crim.P.\nThe State presented the following evidence at Moore's trial: On March 12, 1999, Karen Tipton's nude body was discovered in her house in Decatur. Tipton had been beaten in the head and stabbed over 20 times in her neck and chest. Various items had been taken from the house including jewelry, a video camera, and Tipton's purse.\nThe investigation focused on Moore after he confessed to his uncle that he had been in the Tipton house during the murder. He claimed that he was on the second floor when one of his accomplices grabbed Tipton, cut her throat, and stabbed her.\nEvidence was also presented indicating that Moore had worked for the security company that had installed Tipton's security system and that he had been in the Tipton house. The State also presented evidence indicating that on the night of Tipton's murder Moore had purchased a large quantity of cocaine with cash and a new video camcorder.\nTwo hairs not belonging to Tipton had been discovered near Tipton's body. Forensic tests excluded 99.8% of the population as the source of the hairs. Moore was in the .2% of the population that could not be excluded.\nMoore's defense was that he did not commit the murder. His entire strategy consisted of casting doubt on the State's evidence and shifting the blame to other individuals who, he said, had the means, motive, and opportunity to kill Tipton.\n\nI.\nThe State argues that the Double Jeopardy Clause does not bar the State from retrying Moore for capital murder. It further asserts that the circuit court's order dismissing the charges is erroneous because, the State argues, the court applied the incorrect legal standard and ignored Alabama precedent.\nThe circuit court issued a lengthy order dismissing Moore's capital-murder indictment after finding that the prosecutor's intentional misconduct barred Moore's retrial under the Double Jeopardy Clause. The circuit court made the following findings of fact concerning the prosecutor's failure to disclose exculpatory evidence to Moore:\n\"During the discovery phase of this trial, counsel for the Defendant made repeated requests for copies of statements and other documents in the possession of agents from the Federal Bureau of Investigation. The Court ordered the prosecutor and the investigators to provide the Defendant's attorney with copies of all documents in their possession of whatever kind relating to the murder of Karen Croft Tipton. Repeatedly, Investigator Mike Pettey[[1]] and Prosecutors, Don Valeska and William Dill, denied the very existence *172 of any reports or documents prepared or generated by agents from the Federal Bureau of Investigation. The Court believed those representations made by the prosecution and took no further action to require the prosecution to produce the requested documents. This was done over the strenuous objections of counsel for the Defendant.\n\"After the Defendant was tried and convicted, Don Valeska produced to the Court a copy of a five page document that was faxed to him from the Federal Bureau of Investigation. The Court then learned that Mr. Valeska had actual knowledge of this document prior to his fervent denial that any such documents or reports existed. It was based on this fact that the Court granted the Defendant's Motion for New Trial.\n\"The Court later learned that the Federal Bureau of Investigation had, in fact, collected 245 pages of documents in an internal document, which was released to the Defendant's attorneys after the trial and conviction of the Defendant.\n\"During the trial of Daniel Wade Moore, the trial court sustained objections from the prosecution, which prevented counsel for the Defendant from asking Sarah Joyce Holden about conversations she had with the victim prior to her murder. After a new trial was granted, the trial court allowed counsel for the Defendant to conduct several depositions. One of the depositions taken was of Sarah Joyce Holden. Sarah Joyce Holden was a friend of the victim. In the days just prior to her murder, the victim told Ms. Holden that her burglar alarm system had been malfunctioning and that she, the victim, had disconnected said system so that she could sleep. Ms. Holden was interviewed by Investigator Mike Pettey following the murder of the victim, at which time she conveyed this information about the alarm system. Ms. Holden was also interviewed by prosecutors Don Valeska and William Dill prior to the trial of the Defendant. Ms. Holden prepared a written statement containing the aforementioned information.\n\"At no time prior to the trial of the Defendant was the defense provided with the information given by Sarah Joyce Holden nor was the defense provided with a copy of her written statement containing the same information. Additionally, the prosecution consistently denied the existence of this written statement.\n\"Pamela Brown Smith testified that she resided on Chula Vista Drive, S.W., Decatur, Alabama, prior to the death of Karen Tipton. She further testified that it was her custom and habit to leave her house around 2:40 p.m. to pick up her daughter at school and she routinely returned to her home at 3:30 p.m. This required her to pass the Tipton residence on her way to and returning from her children's school. She further testified that on March 12, 1999, the day of Karen Tipton's murder, the victim was standing at her mailbox getting her mail at or about 3:30 p.m., and that she was wearing jeans and a light colored shirt. Ms. Tipton's automobile, a white sports utility vehicle, was in the driveway at that time. Ms. Brown also stated that she saw a paving crew in the driveway next door, and they were near Chapel Hill Road completing the work they had been doing. She was also aware of the fact that the Tiptons had their driveway paved the previous day.\n\"Pamela Brown Smith called the Decatur Police Department to report the fact that she had seen Karen Tipton alive in her driveway at her mailbox at *173 3:30 p.m. on the day of her death. Ms. Smith asked to speak to the person in charge of the Tipton investigation. She recalls that the person she spoke to was male. She gave them her name, her address, and the information she had. She was told that they would get back in contact with her, but they never did.\n\"The defense was never provided with any information regarding Pamela Brown Smith or the statement she made to the person at Decatur Police Department regarding the time of the victim's death. All of the information provided by Pamela Brown Smith is consistent with other testimony provided by witnesses during the trial, including the type of clothing Karen Tipton was wearing prior to her murder and the progress and location of the paving crew.\n\"Pamela Brown Smith was never interviewed further by the Decatur Police Department and came forward after the trial of the Defendant when she learned that the investigators had estimated the time of death for Karen Tipton between 1:00 p.m. and 4:00 p.m.\n\"Investigators concluded that the victim encountered her offender between 1:00 p.m. and 2:30 p.m. Investigators further stated they knew that Mrs. Tipton ordinarily left her home at 2:30 p.m. to pick up her children at school.\n\"After Daniel Wade Moore was re-indicted on the 6th day of May 2002, Assistant Attorney General Don Valeska contacted the Federal Bureau of Investigation to attempt to locate an agent named Tom Near to testify in the Moore case on an unrelated issue. During those conversations, Mr. Valeska learned that two agents from the Federal Bureau of Investigation had come to Decatur, at the request of then Investigator Mike Pettey, `to assist' investigators from the Decatur Police Department, by gathering information to possibly produce a profile to help the investigators find the killer of Karen Tipton. Mr. Valeska first learned this in August or September of 2002, prior to the trial of Daniel Wade Moore that began on November 4, 2002. In early October 2002, Agent Carry Straub with the Federal Bureau of Investigation called Mr. Valeska stating he had been made aware of the fact that Mr. Valeska had made an inquiry of the Federal Bureau of Investigation regarding this case. Mr. Straub informed Mr. Valeska that he had something in his file and Mr. Valeska gave Mr. Straub the fax number at the Attorney General's office in Montgomery, Alabama. On or about October 11, 2002, Defendant's Motion to Dismiss Hearing Exhibit `5,' which consists of a four page synopsis of this case that had been compiled by the FBI plus a cover sheet was faxed from the FBI to Mr. Valeska nearly a month prior to the trial of the Defendant.\n\"Investigator Mike Pettey told Don Valeska prior to the trial of the case that he had sent questionnaires to various people connected to the case, had them fill out the questionnaires; and sent the information back to the Federal Bureau of Investigation. None of these materials were ever provided to the Defendant. Mr. Valeska did nothing prior to the commencement of the trial on November 4, 2002, to get a copy of this information from the Federal Bureau of Investigation or furnish it to the defense or inform the Court that he had discovered the documents existed.\n\"On October 30, 2002, the Court had hearings on motions filed by the defense requesting copies of information about an alleged Federal Bureau of Investigation report. On October 30, 2002, when questioned specifically by the Court regarding a Federal Bureau of Investigation *174 report, Assistant Attorney General Don Valeska, said to the Court, `There ain't no such thing as an FBI report.'\n\"Significant information is contained in the materials provided by the Federal Bureau of Investigation shown in Motion to Dismiss Hearing Exhibit `5' and `6' that should have been provided to the defense under the Court's order to the prosecution to allow access to the Defendant's counsel to all material relating to this case to which they had access. All of the material in question here passed through the hands of the investigators for the Decatur Police Department or the Assistant Attorney General Don Valeska and should have been provided to the defense as ordered by this Court.\n\"The Decatur Police Department denies that the FBI did any investigation in the present case. However, the Court has before it 245 pages of information that was collected by investigators from the Decatur Police Department and provided to the Federal Bureau of Investigation, yet a significant portion of that information was not provided to the defense as ordered by this Court. The prosecution, in fact, denied to the Court the existence of the documents which they collected and sent to the Federal Bureau of Investigation. Said documents and information were later discovered in 245 pages of documents collected by the FBI and shipped to Assistant Attorney General Don Valeska who only provided it to the Court after the Defendant was tried and convicted.\"\n(C.R. 40-46.)\n\nFacts\nAt the hearing on the motion to dismiss, Moore focused on the State's failure to disclose exculpatory statements made by two witnesses that, he argues, would tend to discredit the State's case and its failure to disclose 245 pages of materials that had been forwarded to the Federal Bureau of Investigation (\"the FBI\") by the Decatur Police Department.\nThe testimony established the following: Sara Joyce Holden, a friend of Tipton's, testified that she spoke with police after Tipton's murder. She said that Tipton complained to her on the Sunday before her murder that she was not getting any sleep because her security system had been malfunctioning. Tipton told her, she said, that she took the system out of the wall or that she \"ripped\" it out of the wall. Holden said that she could not specifically remember whether she told police what Tipton had told her about her security system but that she was sure that she did.\nPamela Brown Smith, a friend of Tipton's, testified that she saw Tipton on the day of her murder in front of her house getting her mail at approximately 3:30 p.m. She said that about one week after the murder she had telephoned the police and told them that she wanted to speak to someone about the Tipton case. Smith said that she told a male police officer, she could not identify the officer by name, that she saw Tipton at approximately 3:30 p.m. on the day of her murder walking to her mailbox. After Moore's trial, she said, she realized that the time of Tipton's death had been estimated at between 1:00 p.m. and 4:00 p.m. and that police had maintained that she confronted her attacker between 1:00 p.m. and 2:30 p.m. After the trial, Smith said, she contacted Moore's attorneys and told them about seeing Tipton on the day of the murder.\nThe State's prosecutor, Don Valeska, testified that he became aware of the FBI's involvement in the case after Moore was reindicted in May 2002. He said that in August or September 2002 he discovered that two FBI agents had been to Decatur *175 concerning the case. Valeska said that about one week before Moore's trial an FBI agent telephoned him and informed him that he had a file on the case. This FBI agent faxed a five-page document to Valeska. Also, in July 2003, Valeska received 245 pages of documents from the FBI. The information consisted mainly of \"scan questionnaires\" that were completed by the victim's family members and friends. These documents contained questions related to the respondent's knowledge of the victim and her habits and lifestyle. Specifically the questionnaires asked for information concerning: the length of the respondent's relationship with the victim and how they met, knowledge of the victim's family, the victim's style of dress and personal grooming, what the victim did in her spare time, the victim's likes and dislikes, the victim's lifestyle, the victim's number and type of friends, the victim's enemies or persons she disliked, the victim's reputation at home and work, the victim's sexual orientation, the victim's medical and mental-health history, any noticeable personal habits, her mode of transportation and how maintained, and any significant events that had occurred before the crime.\nValeska further stated that several weeks before Moore's trial Investigator Michael Pettey of the Decatur Police Department told him that he had forwarded materials to the FBI. It was Valeska's understanding that Decatur police had contacted the FBI's Violent Criminal Apprehension Program (\"VICAP\") to secure a profile of Tipton's killer. Pettey told him that he had asked the FBI for a profile and that a profile had never been made by the FBI. He further testified that he never intended to withhold exculpatory information and that he did not consider some of the materials to be exculpatory.\nInvestigator Pettey testified that in order to compile a profile on the killer, the FBI sent forms to be completed by the victim's family members and friends. He said that he distributed the forms, collected them, and forwarded them to an FBI agent. He testified several times that he did not keep any copies of the documents that were sent to the FBI. He said:\n\"It was information that they wanted for a profile. It wasn't anything we used in regards to the investigation of the homicide. The forms that they have, these VICAP forms, they ask for opinions and speculations and that sort of stuff, and that's not something that we use in regards to the investigation. Or if it's not factual then, you know, you don't incorporate it as part of your report.\"\n(R. 3999.)\nBarry Hamilton, a lieutenant with the Decatur police department, testified that the department asked the FBI for help with a profile of the killer and that all of the information that was collected at the FBI's request was forwarded to the FBI. It was the department's policy not to maintain copies of any materials forwarded to the FBI.\nDwight Hale, chief of detectives for the Decatur Police Department, testified that the FBI was contacted to complete a profile of Tipton's killer and various forms were sent to the FBI at its request. Hale said that the forms consisted of \"personal information, some psychological type questions and stuff.\"\nThis Court has diligently examined the testimony from the hearing and the many motions related to this issue. There is no doubt that the prosecutor was aware that Investigator Pettey had forwarded materials to the FBI. While we cannot say that Valeska had personal knowledge of the contents of the materials forwarded to the FBI, Pettey's knowledge *176 of the contents is imputed to Valeska. \"The knowledge of government agents working on the case, including a deputy sheriff, as to the existence of exculpatory evidence will be imputed to the prosecutor. Sexton v. State, 529 So.2d 1041, 1045 (Ala. Cr.App.1988).\" Savage v. State, 600 So.2d 405, 407 (Ala.Crim.App.1992). Moreover, \"the individual prosecutor has a duty to learn of any favorable evidence known to the others acting on the government's behalf in the case, including the police.\"[2]Kyles v. Whitley, 514 U.S. 419, 437, 115 S.Ct. 1555, 131 L.Ed.2d 490 (1995). \"The rules of criminal discovery are not `mere etiquette,' nor is compliance a matter of discretion.\" State v. Scott, 943 S.W.2d 730, 735 (Mo.Ct.App.1997).\n\nLegal Analysis\nWhen discussing the legal principles that governed its decision to dismiss the indictment, the circuit court stated:\n\"The Fifth Amendment to the United States Constitution states that, `[no person shall] be subject for the same offence to be twice put in jeopardy of life or limb.' About the Double Jeopardy Clause, the courts have said: the Double Jeopardy Clause bars retrials where bad faith conduct by a judge or prosecutor threatens the harassment of an accused by successive prosecutions or declaration of a mistrial so as to afford the prosecution a more favorable opportunity to convict the defendant. United States v. Dinitz, 424 U.S. 600 (1976). It has been a longstanding principle in American jurisprudence that `the prohibition of the Double Jeopardy Clause is not against being twice punished, but against being twice put in jeopardy.' United States v. Ball, 163 U.S. 622[662], 669 (1896).\n\"Most of the cases reviewed by this Court relating to double jeopardy and facts similar to this case discuss mistrials as opposed to the granting of a new trial after the rendering of a guilty jury verdict. However, the Court can find no distinction between the two. A defendant is no less wronged by a jury finding him guilty after an unfair trial than he is by a failure to reach a jury verdict at all. A declaration of a mistrial is legally equivalent to the granting of a new trial in that the prior proceeding does not result in the adjudication of the case. Therefore, these principles will be treated as interchangeable by this Court.\n\"The Double Jeopardy Clause does protect a defendant against governmental actions intended to provoke mistrial request and thereby to subject defendants to the substantial burdens imposed by multiple prosecutions. It bars retrials where `bad faith conduct by judge or prosecutor,' United States v. Jorn, [400 U.S. 470] 485 (1971)] threatens the `[h]arassment of an accused by successive prosecutions or declaration of a mistrial so as to afford the prosecution a more favorable opportunity to convict the defendant.' United States v. Leonard, 593 F.2d 951, 954 (10th Cir.1979). See also Downum v. United States, 372 U.S. 734, 83 S.Ct. 1033, 10 L.Ed.2d 100 (1963). The United States Supreme Court makes it clear that under ordinary circumstances a defendant's request for a new trial (or mistrial) generally removes any Constitutional barrier *177 to a retrial. Ordinarily, a retrial would be necessary to protect the public's interest in fair trials designed to end in just judgments. However, the Supreme Court also recognizes that there may be exceptions to this general rule; rare cases involving circumstances which are attributable to prosecutorial misconduct and overreaching. Where prosecutorial overreaching exists, a defendant's new trial request does not remove the Constitutional barrier afforded by the Double Jeopardy Clause, preventing the retrial of the defendant. United States v. Jorn, 400 U.S. 470 (1971), United States v. Kessler, 530 F.2d 1246 (5th Cir.1976).\"\n(C.R. 48-49) (emphasis added).\nThe circuit court's legal analysis is inconsistent with this Court's holding in Robinson v. State, 405 So.2d 1328 (Ala. Crim.App.1981). In Robinson, we stated:\n\"Appellant cites United States v. Dinitz, 424 U.S. 600, 96 S.Ct. 1075, 47 L.Ed.2d 267 (1976), and United States v. Jorn, 400 U.S. 470, 91 S.Ct. 547, 27 L.Ed.2d 543 (197[1]), in support of his contention that reprosecution should have been precluded by the Fifth Amendment protection against double jeopardy. He contends that the State's failure to turn over self-defense material prior to trial and its `knowing use of perjured testimony' at trial constituted prosecutorial bad faith which should have barred his retrial.\n\"In Dinitz and Jorn, the United States Supreme Court alluded to the general rule that a defendant who moves for a mistrial cannot claim double jeopardy when his motion is granted and he obtains a new trial. By his motion for mistrial, he is deemed to have consented to end the first trial and obtain another one.\n\"The court indicated, however, that if a defendant is forced to move for a mistrial because of `prosecutorial overreaching,' Dinitz, supra at 608, 96 S.Ct. at 1079, or `bad faith conduct by judge or prosecutor,' Jorn, supra at 485, 91 S.Ct. at 557, then he is not deemed to have elected to terminate his first trial and to obtain a new one. Instead, his motion is treated as a motion for mistrial by the prosecution and a retrial would constitute double jeopardy. Neither Dinitz nor Jorn, however, is applicable here since we are confronted not with a motion for mistrial, but with a motion for new trial. We therefore find the analysis of the mistrial cases of little value in determining whether double jeopardy bars reprosecution after a successful motion for a new trial. In our judgment, the reasoning of the cases finding no jeopardy problem with a new trial after reversal of a conviction is more apt here.\n\"Ordinarily, when one who has been convicted successfully seeks review of that conviction there is no double jeopardy impediment to a new trial. United States v. Tateo, 377 U.S. 463, 84 S.Ct. 1587, 12 L.Ed.2d 448 (1964); Francis v. Resweber, 329 U.S. 459, 67 S.Ct. 374, 91 L.Ed. 422 (1947); United States v. Ball, 163 U.S. 662, 16 S.Ct. 1192, 41 L.Ed. 300 (1896).\n\"Although appellant's motion for new trial was addressed to the trial judge and was not, in contrast to Tateo, Resweber, and Ball, supra, a submission for appellate review, it was nevertheless a request for judicial scrutiny of his conviction. The granting of a motion for new trial by the trial court is analogous to the reversal of a conviction by an appellate court; both result from error at trial. See Burks v. United States, 437 U.S. 1, 98 S.Ct. 2141, 57 L.Ed.2d 1 (1978). When the cause for reversal is error at trial, as opposed to evidentiary *178 insufficiency, there is no double jeopardy upon a retrial. Burks, supra.\n\"In Burks, supra at 15, 98 S.Ct. at 2149, the United States Supreme Court observed the following:\n\"`[R]eversal for trial error, as distinguished from evidentiary insufficiency, . . . is a determination that a defendant has been convicted through a judicial process which is defective in some fundamental respect, e.g., incorrect receipt or rejection of evidence, incorrect instructions, or prosecutorial misconduct. When this occurs, the accused has a strong interest in obtaining a fair readjudication of his guilt free from error, just as society maintains a valid concern for insuring that the guilty are punished.'\n\"Appellant urges us to accept the rationale of the mistrial cases, maintaining that he would have moved for (and been granted) a mistrial had he known of the alleged prosecutorial misconduct during the first trial. This argument was considered and rejected in United States v. Barham, 608 F.2d 602 (5th Cir.1979).\n\"In Barham, supra, the Fifth Circuit Court of Appeals held that the government's knowing use of perjured testimony at the defendant's first trial did not bar a retrial after reversal of his conviction. The court determined that\n\"`[T]he prosecutor's conduct did not amount to prosecutorial overreaching or bad faith and that in any event double jeopardy bars a retrial after conviction only when the conviction is reversed for insufficiency of the evidence.' United States v. Barham, 625 F.2d 1221 (5th Cir.1980).\n\"Following the reasoning of Burks, supra, and Barham, supra, we hold that there was no double jeopardy impediment to appellant's retrial on the basis of the prosecution's alleged knowing use of perjured testimony at the first trial. Appellant received the relief to which he was entitled for error at his first trial \u0097 a new trial.\"\n405 So.2d at 1331-32. Other jurisdictions follow the rationale employed by this Court in Robinson. See People v. Sales, 357 Ill.App.3d 863, 868, 294 Ill.Dec. 434, 438, 830 N.E.2d 846, 850 (2005) (\"[C]ase law clearly contradicts defendant's contention that a mistrial and a new trial can be functionally equivalent.\"); Couch v. Maricle, 998 S.W.2d 469, 471 (Ky.1999) (\"[C]learly double jeopardy concerns are not the same in the event of a mistrial as they are in the event a conviction is reversed on appeal or set aside upon the granting of a new trial.\"); United States v. McAleer, 138 F.3d 852, 856 (10th Cir.1998) (\"The district court's decision to set aside the jury verdicts at Defendants' request nullified the original verdict just as a reversal on appeal would nullify a conviction. As a result, the `slate has been wiped clean' and double jeopardy does not bar retrial.\").\nIn People v. Hooker, 96 Ill.App.3d 202, 204-05, 51 Ill.Dec. 800, 802, 421 N.E.2d 308, 310 (1981), an Illinois Court of Appeals thoroughly explained the distinction between mistrials and new trials stating:\n\"We reject the defendant's contention that mistrials and new trials are synonymous.\n\"A mistrial contemplates the premature termination of the trial. Where, for reasons deemed compelling by the trial judge, the ends of substantial justice cannot be obtained without discontinuing the trial, a mistrial may be declared without defendant's consent, and even over his objection. Gori v. United States (1961), 367 U.S. 64[364], 81 S.Ct. 1523, 6 L.Ed.2d 901. Where a mistrial is declared after jeopardy has attached, the defendant's valued right to have his *179 trial completed by a particular tribunal is necessarily implicated. United States v. Dinitz (1976), 424 U.S. 600, 96 S.Ct. 1075, 47 L.Ed.2d 267. Where jeopardy has attached, the court must determine whether the declaration of a mistrial was required by manifest necessity or the ends of public justice. Illinois v. Sommerville[Somerville] (1973), 410 U.S. 458, 93 S.Ct. 1066, 35 L.Ed.2d 425.\n\"In contrast to a mistrial, a motion for a new trial is designed to allow a defendant to seek a review of his conviction at the trial level[,] (People v. Pierce (1980), 80 Ill.App.3d 514, 35 Ill.Dec. 925, 400 N.E.2d 62)[,] and to provide the trial judge with an opportunity to correct alleged errors made during trial. People v. Edwards (1977), 49 Ill.App.3d 79, 7 Ill.Dec. 14, 363 N.E.2d 935. It provides for a fair and orderly procedure for post-trial review in the trial court and a trial court is vested with wide discretion in the matter of allowing the motion for a new trial which is granted.\n\"Clearly, a motion for a mistrial and a motion for a new trial are different and have different functions. Because a mistrial contemplates a premature termination of the trial, it requires more stringent standards than a motion for a new trial, which deals with a situation in which the trial has been completed and judgment rendered.\"\nBased on Alabama precedent, Moore's retrial is not barred by the Double Jeopardy Clause because the first proceedings were terminated when the circuit court granted a motion for a new trial, and not a motion for a mistrial. See Robinson, supra.\nHowever, assuming, for the sake of argument, that a mistrial and a new trial are functionally equivalent, we would still be compelled to find that the circuit court applied the incorrect legal standard in evaluating this issue. The circuit court relied on the United States Supreme Court's decisions in United States v. Dinitz, 424 U.S. 600, 96 S.Ct. 1075, 47 L.Ed.2d 267 (1976), and United States v. Jorn, 400 U.S. 470, 91 S.Ct. 547, 27 L.Ed.2d 543 (1971). However, the holdings in Dinitz and Jorn were significantly narrowed by the Supreme Court's subsequent decision in Oregon v. Kennedy, 456 U.S. 667, 102 S.Ct. 2083, 72 L.Ed.2d 416 (1982). In criticizing its earlier holding in Dinitz, the United States Supreme Court in Oregon stated: \"The language [quoted from Dinitz] would seem to broaden the test from one of intent to provoke a motion for a mistrial to a more generalized standard of `bad faith conduct' or `harassment' on the part of the judge or prosecutor.\" 456 U.S. at 674, 102 S.Ct. 2083. The Supreme Court then stated:\n\"[T]he circumstances under which . . . a defendant may invoke the bar of double jeopardy in a second effort to try him are limited to those cases in which the conduct giving rise to the successful motion for a mistrial was intended to provoke the defendant into moving for a mistrial.\"\nOregon v. Kennedy, 456 U.S. at 679, 102 S.Ct. 2083.\n\"Goading conduct is a material fact treated by the Supreme Court as necessary for the [Oregon v.] Kennedy [, 456 U.S. 667 (1982)] rule \u0097 the rule prohibiting a second prosecution \u0097 to apply. The Court noted that `[p]rosecutorial conduct that might be viewed as harassment or overreaching, even if sufficient to justify a mistrial on defendant's motion [ ] does not bar retrial absent intent on the part of the prosecutor to subvert the protections afforded by the Double Jeopardy Clause.' Id. Then the Court recognized that `language taken from [their] earlier opinions may well suggest *180 a broader rule.' [456 U.S. at 677, 102 S.Ct.] at 2090. But the Court concluded that a defendant, after a mistrial, could only successfully assert the defense of double jeopardy in `those cases in which the conduct giving rise to the successful motion for a mistrial was intended to provoke the defendant into moving for a mistrial.' [456 U.S. at 679, 102 S.Ct.] at 2091.\"\nHawkins v. Alabama, 318 F.3d 1302, 1308 (11th Cir.2003). See also Commonwealth v. Simons, 342 Pa.Super. 281, 291, 492 A.2d 1119, 1124 (1985) (\"In Oregon v. Kennedy, the United States Supreme Court chose to limit the availability of relief under the Double Jeopardy Clause by declaring that only misconduct intended to provoke a mistrial would constitute a bar to reprosecution.\"); State v. Diaz, 521 A.2d 129, 132 (R.I.1987) (\"[T]he Court in Kennedy recognized only one exception to the general rule that a mistrial requested by a defendant does not bar a retrial.\"); Commonwealth v. Simons, 342 Pa.Super. at 287, 492 A.2d at 1123 (\"[T]he United States Supreme Court held that only prosecutorial misconduct intended to provoke a mistrial would bar retrial under federal double jeopardy principles. Oregon v. Kennedy, 456 U.S. 667, 102 S.Ct. 2083, 72 L.Ed.2d 416 (1982). The Court thus repudiated the notion that there are two separate types of prosecutorial misconduct that bar reprosecution. . . .\"); United States v. McAleer, 138 F.3d at 856, quoting Kennedy, 456 U.S. at 673, 102 S.Ct. 2083 (\"The Kennedy prosecutorial misconduct exception is a narrow one, designed to protect the defendant's right to `have his trial completed before the first jury empaneled to try him.'\"); United States v. Lewis, 368 F.3d 1102, 1108 (9th Cir.2004) (\"A narrow exception to this `motion for mistrial' rule exists where the government engages in prosecutorial misconduct `intended to provoke the defendant into moving for a mistrial.'\").\nBased on the Supreme Court's decision in Oregon v. Kennedy, a holding adopted by the Alabama Supreme Court in Ex parte Cochran, 500 So.2d 1179 (Ala.1985), the determination of whether a retrial is barred based on prosecutorial misconduct in a first trial comes down to one question \u0097 was the prosecutor's conduct intended to provoke a mistrial. The Alabama Supreme Court in Cochran stated:\n\"Defendant argues that the failure of the state to provide him the information on the witness is the type of conduct known as `prosecutorial overreaching,' which was condemned in United States v. Dinitz, 424 U.S. 600, 96 S.Ct. 1075, 47 L.Ed.2d 267 (1976), and he argues that it precludes a retrial. However, the most recent opinion on this subject, Oregon v. Kennedy, 456 U.S. 667, 102 S.Ct. 2083, 72 L.Ed.2d 416 (1982), expressly rejects this standard in determining whether a second trial is barred following a defendant's motion for mistrial. In Kennedy, the Court stated:\n\"`[T]he circumstances under which such a defendant may invoke the bar of double jeopardy in a second effort to try him are limited to those cases in which the conduct giving rise to the successful motion for a mistrial was intended to provoke the defendant into moving for a mistrial.'\n\"456 U.S. at 679, 102 S.Ct. at 2091.\"\n500 So.2d at 1181-82.\nThere is no indication that the prosecutor's actions here were intended to provoke a mistrial. Indeed, it is apparent that the opposite is true.[3] \"The prosecutor's *181 withholding of exculpatory evidence from the defendant may only be characterized as an overzealous effort to gain a conviction from the first jury and not as an attempt to subvert [the defendant's] `valued right' by bringing the case before a second jury.\" United States v. Coleman, 862 F.2d 455, 458 (3d Cir.1988). \"[W]e do not believe the [Double Jeopardy Clause] may be invoked to supplement the remedies contemplated by Brady.\" 862 F.2d at 458.[4]\nUpon application of the standard announced by the United States Supreme Court in Oregon v. Kennedy, we must conclude that the circuit court erroneously extended the protections of the Double Jeopardy Clause to bar Moore's retrial in this case. The circuit court's order conflicts with established precedent and is due to be reversed.\n\nII.\nThe State also argues that \"[r]egardless of whether a prosecutor acted in good faith or bad faith in violating Brady, the law provides a defendant with one remedy: a new trial.\" (State's brief at page 30.)\nThere is no constitutional right to discovery in a criminal case in Alabama. However, Rule 16, Ala.R.Crim.P., as adopted by the Alabama Supreme Court, specifically provides for discovery in criminal cases. Rule 16.5, Ala.R.Crim.P., addresses the sanctions that a court may impose for noncompliance with a discovery order. Rule 16.5, states:\n\"If at any time during the course of the proceedings it is brought to the attention of the court that a party has failed to comply with this rule or with an order issued pursuant to this rule, the court may order such party to permit the discovery or inspection; may grant a continuance if requested by the aggrieved party; may prohibit the party from introducing evidence not disclosed; or may enter such other order as the court deems just under the circumstances. The court may specify the time, place, and manner of making the discovery and inspection and may prescribe such terms and conditions as are just.\"[5]\n(Emphasis added.) Although dismissing the charges is not specifically cited as a sanction in Rule 16.5, this Rule gives a circuit court wide discretion in considering the manner and nature of relief it affords a defendant who has been denied discovery. While we are aware of no reported Alabama case that affirms the dismissal of an indictment based on a prosecutor's Brady *182 violation, it appears from the wording of Rule 16.5, Ala.R.Crim.P., that this sanction may be available based on the circuit court's supervisory powers.\nIn Government of the Virgin Islands v. Fahie, 419 F.3d 249 (3d Cir.2005), the federal district court reversed a lower court's dismissal of the charges against Fahie based on a Brady violation. The court stated: \"Our research discloses no case where a federal appellate court upheld dismissal with prejudice as a remedy for a Brady violation.\" 419 F.3d at 254 n. 6 The court then discussed the various federal circuits and their individual responses to prosecutorial misconduct that necessitates a retrial. The court stated:\n\"Given the `societal interest in prosecuting criminal defendants to conclusion,' it is especially important in the criminal context that a court applying sanctions for violation of Rule 16 carefully assess whether dismissal with prejudice is necessary to exact compliance with discovery obligations. [United States v.] Coleman, 862 F.2d 455 [(3d Cir.1988)]. In particular, as discussed above, a court must look to both the need to undo prejudice resulting from a violation and the appropriate deterrent value of the sanction in each case.\n\"Other courts have considered the question of when a court may dismiss an indictment under its supervisory powers. The Ninth Circuit has held that `[d]ismissal under the court's supervisory powers for prosecutorial misconduct requires (1) flagrant misbehavior and (2) substantial prejudice.' United States v. Kearns, 5 F.3d 1251, 1253 (9th Cir.1993). It has suggested that prosecutorial conduct might satisfy those requirements even where it would fail to justify dismissal under Brady directly. See [United States v.] Ross, 372 F.3d [1097] at 1110 [(9th Cir.2004)]; United States v. Barrera-Moreno, 951 F.2d 1089, 1091 (9th Cir.1991). The Seventh Circuit has adopted a more restrictive approach, holding that a sanction under supervisory powers is only appropriate where the conviction could not have been obtained but for the failure to disclose exculpatory evidence. See United States v. Johnson, 26 F.3d 669, 683 (7th Cir.1994). At least two other circuits instruct courts to balance a number of factors in their choice of a sanction, including `the reasons for the Government's delay in affording the required discovery, the extent of prejudice, if any, the defendant has suffered because of the delay, and the feasibility of curing such prejudice by granting a continuance or, if the jury has been sworn and the trial has begun, a recess.' United States v. Euceda-Hernandez, 768 F.2d 1307, 1312 (11th Cir.1985); see also United States v. Wicker, 848 F.2d 1059, 1061 (10th Cir. 1988). While we appreciate the importance of all these factors, we believe that, to merit the ultimate sanction of dismissal, a discovery violation in the criminal context must meet the two requirements of prejudice and willful misconduct, the same standard applicable to dismissal for a Brady violation. Accordingly, we do not expect that trial courts will dismiss cases under their supervisory powers that they could not dismiss under Brady itself.\n\"Neither the trial court nor the Appellate Division systematically considered the factors relevant to a sanction for prosecutorial misconduct, and in particular, the two prerequisites to dismissal with prejudice.\"\n419 F.3d at 258.\nIn United States v. Euceda-Hernandez, 768 F.2d 1307 (11th Cir.1985), the court stated:\n\n*183 \"In exercising its discretion, the district court must weigh several factors, and, if it decides a sanction is in order, should fashion `the least severe sanction that will accomplish the desired result \u0097 prompt and full compliance with the court's discovery orders.' United States v. Sarcinelli, 667 F.2d 5, 7 (5th Cir. Unit B 1982). See also [United States v.] Burkhalter, 735 F.2d [1327] at 1329 [(11th Cir.1984)]; United States v. Gee, 695 F.2d 1165, 1169 (9th Cir.1983) (citing Sarcinelli, supra). Among the factors the court must weigh are the reasons for the Government's delay in affording the required discovery, the extent of prejudice, if any, the defendant has suffered because of the delay, and the feasibility of curing such prejudice by granting a continuance or, if the jury has been sworn and the trial has begun, a recess. Burkhalter, 735 F.2d at 1329; United States v. Hartley, 678 F.2d 961, 977 (11th Cir.1982), cert. denied, 459 U.S. 1170, 103 S.Ct. 815, 74 L.Ed.2d 1014 and 459 U.S. 1183, 103 S.Ct. 834, 74 L.Ed.2d 1027 (1983); Sarcinelli, 667 F.2d at 6-7.\n\". . . .\n\"The presence of a clear violation of a discovery order does not excuse a trial judge from weighing the factors cited above and imposing the least severe, but effective, sanction. The purpose of requiring the Government to disclose evidence is to promote `the fair and efficient administration of criminal justice by providing the defendant with enough information to make an informed decision as to plea; by minimizing the undesirable effect of surprise at trial; and by otherwise contributing to an accurate determination of the issue of guilt or innocence.' Fed.R.Crim.P. 16 advisory committee note.\"\n768 F.2d at 1312 (footnote omitted).\nOur neighboring State of Florida in State v. Carpenter, 899 So.2d 1176 (Fla. Dist.Ct.App.2005), cautioned against dismissing the charges as a sanction for a Brady violation and aptly stated:\n\"Dismissal of an information is, however, an extreme sanction that should be used with caution, and only when a lesser sanction would not achieve the desired result. State v. Thomas, 622 So.2d 174, 175 (Fla. 5th DCA 1993). See also [State v.] Del Gaudio, 445 So.2d [605] at 608 [(Fla.Dist.Ct.App.1993)] (`Dismissal of an information or indictment is \"an action of such magnitude that resort to such a sanction should only be had when no viable alternative exists\"') (quoting State v. Lowe, 398 So.2d 962, 963 (Fla. 4th DCA 1981)). Before a court can dismiss an information for a prosecutor's violation of a discovery rule or order, the trial court must find that the prosecutor's violation resulted in prejudice to the defendant. Thomas, 622 So.2d at 175; Richardson v. State, 246 So.2d 771 (Fla.1971).\n\"`The obvious rationale for limiting the sanction of dismissal of criminal charges to only those cases where no other sanction can remedy the prejudice to the defendant is to insure that the public's interest in having persons accused of crimes brought to trial is not sacrificed in the name of punishing a prosecutor's misconduct. And, of course, where the prosecutor's failure to make discovery has not irreparably prejudiced the defendant, the sanction of dismissal punishes the public, not the prosecutor, and results in a windfall to the defendant. . . . [T]he rule authorizing the imposition of sanctions for discovery violation was \"never intended to furnish a defendant with a procedural device to escape justice[.]\" '\n\"Del Gaudio, 445 So.2d at 608 (quoting Richardson, 246 So.2d at 774).\n\n*184 \"The order of dismissal in this case contains no finding of prejudice to the defendant nor does our review of the record support such a finding.\"\n899 So.2d at 1182-83.[6] We agree with the rationale of the Florida appellate court. See also Fahie, 419 F.3d at 259 (\"[T]o merit the ultimate sanction of dismissal, a discovery violation in the criminal context must meet the two requirements of prejudice and willful misconduct, the same standard applicable to dismissal for a Brady violation.\").\nUnder any analysis, to warrant dismissal of the charges the defendant must show intentional or willful misconduct and prejudice. Even if Moore established intentional and willful misconduct, which we question, the circuit court made no finding that the evidence that was suppressed could not, and has not been, furnished or made available to Moore. The trial court did not consider \"the factors relevant to a sanction for prosecutorial misconduct, and in particular, the two prerequisites to dismissal with prejudice.\" Government of the Virgin Islands v. Fahie, 419 F.3d at 259.\nMoreover, it appears from the record that Moore has received the materials that were discussed at the hearing on the motion to dismiss and has full access to the witnesses whose statements were not disclosed to him.[7] Certainly, Moore was prejudiced at his first trial; however, we see no indication that the prejudice suffered by Moore could not be corrected by a new trial. Moore got all the relief to which he was entitled \u0097 a new trial. The words of the United States Supreme Court are relevant here:\n\"Corresponding to the right of an accused to be given a fair trial is the societal interest in punishing one whose guilt is clear after he has obtained such a trial. It would be a high price indeed for society to pay were every accused granted immunity from punishment because of any defect sufficient to constitute reversible error in the proceedings leading to conviction. From the standpoint of a defendant, it is at least doubtful that appellate courts would be as zealous as they now are in protecting against the effects of improprieties at the trial or pretrial stage if they knew that reversal of a conviction would put the accused irrevocably beyond the reach of further prosecution. In reality, therefore, the practice of retrial serves defendants' rights as well as society's interest. The underlying purpose of permitting retrial is as much furthered by application of the rule to this case as it has been in cases previously decided.\"\n*185 United States v. Tateo, 377 U.S. 463, 466, 84 S.Ct. 1587, 12 L.Ed.2d 448 (1964).\nOur decision should not be meant as condoning the conduct of the prosecutor. Like the circuit court we are concerned at the prosecutor's actions. \"We are not unmindful of the court's frustration with the prosecutor's defiance in the face of the court's order.\" State v. Carpenter, 899 So.2d at 1183. However, any prejudice that was suffered in the first trial may be corrected by a new trial. Accordingly, based on the cases cited above, we hold that the circuit court erred in imposing the extreme sanction of dismissal of the capital-murder indictment returned against Moore.\nFor the foregoing reasons, the judgment is reversed and the case remanded to the circuit court with instructions that that court set aside its order dismissing the charges and restore Moore's case to its active docket.\nREVERSED AND REMANDED.\nBASCHAB, SHAW, and WISE, JJ., concur.\nCOBB, J., concurs specially, with opinion.\nCOBB, Judge, concurring specially.\nThe majority has thoroughly discussed the relevant legal principles in this case, and I agree with the determination that double-jeopardy principles do not require that the indictment against Daniel Wade Moore be dismissed. I also agree with the majority that the prejudice Moore suffered as a result of the prosecution's discovery violations can be corrected by granting him a new trial. I am writing specially only to commend the courageous trial judge for his actions in this case.\nMy review of the record in this case convinces me that the evidence that was withheld by the prosecution went to the very heart of the defense. That prosecutors occasionally fail to disclose exculpatory evidence is not a surprise. The surprise here is that some of the undisclosed evidence had serious exculpatory value, that the defense became aware of some of the evidence only when a witness contacted defense counsel after the trial about a statement she had given to the police before the trial, and that much of the evidence was not disclosed until after the trial and after the prosecutor at trial had denied its very existence. Some of the evidence was so significant that it might easily have caused the jury to have a reasonable doubt regarding Moore's guilt. Because Judge Glenn Thompson, the trial judge, was so deeply disturbed by the extremely untimely disclosure of the valuable evidence and by the prosecutor's apparent disregard of Judge Thompson's open-file discovery order, Judge Thompson attempted to remedy the situation by dismissing the indictment. Clearly, Judge Thompson was attempting to act in accordance with his obligation to ensure that every citizen of Morgan County receives a fair trial and to prevent Moore from having to defend himself a second time, when the first prosecution was clearly unfair.\nIf these serious discovery violations had come to light during the trial and a defense motion for a mistrial had been granted, the procedural posture of the case would have been entirely different and the dismissal of the indictment would have been proper. Because the discovery violations were not revealed until after the trial and because the evidence and witnesses are available to Moore, however, the law, as it now stands, indicates that the proper remedy is a new trial. Therefore, I must concur to reverse the trial court's order dismissing the indictment.\nNOTES\n[1] Investigator's Pettey's name is spelled both Pettey and Petty in the record.\n[2] We do not have the occasion to reach the question of whether knowledge within the exclusive control of the FBI is imputed to local law-enforcement officials. The duty to disclose is limited to information in the possession of persons who are \"sufficiently subject to the prosecutor's control.\" Commonwealth v. Martin, 427 Mass. 816, 824, 696 N.E.2d 904, 909 (1998).\n[3] In fact, the circuit court specifically stated in its order that: \"By excluding this evidence, Mr. Valeska greatly enhanced his chances for a conviction.\" (C.R. 53.)\n[4] The circuit court also stated in its order that Moore had a right to a single adjudication of his guilt. However, the United States Supreme Court in Oregon v. Kennedy, stated otherwise:\n\n\"The Double Jeopardy Clause of the Fifth Amendment protects a criminal defendant from repeated prosecutions for the same offense. United States v. Dinitz, 424 U.S. 600 (1976). As a part of this protection against multiple prosecutions, the Double Jeopardy Clause affords a criminal defendant a `valued right to have his trial completed by a particular tribunal.' Wade v. Hunter, 336 U.S. 684 (1949). The Double Jeopardy Clause, however, does not offer a guarantee to the defendant that the State will vindicate its societal interest in the enforcement of the criminal laws in one proceeding. United States v. Jorn, 400 U.S. 470, 483-484 (1971) (plurality opinion); Wade v. Hunter, 336 U.S., at 689. If the law were otherwise, `the purpose of law to protect society from those guilty of crimes frequently would be frustrated by denying courts power to put the defendant to trial again.' Ibid.\"\n456 U.S. at 671-72[, 102 S.Ct. 2083] (emphasis added; footnote omitted).\n[5] Rule 16.5 is patterned after Rule 16(d)(2), Fed.R.Crim.P.\n[6] Still other jurisdictions have held that the harshest penalty for a prosecutor's Brady violation is a new trial. As the United States Court of Appeals for the Third Circuit noted in Government of the Virgin Islands v. Fahie, 419 F.3d at 254:\n\n\"Some Courts of Appeals have remarked or implied that no harsher sanction than a new trial is ever available to remedy a Brady violation. See United States v. Mitchell, 164 F.3d 626 (4th Cir.1998) (unpublished table decision); United States v. Davis, 578 F.2d 277, 280 (10th Cir.1978); United States v. Evans, 888 F.2d 891, 897 n. 5 (D.C.Cir.1989). . . . Notably, in all jurisdictions, dismissal with prejudice is in practice a rare sanction for any constitutional violation.\"\n(Footnote omitted.) See also United States v. Garcia, 780 F.Supp. 166, 176 (S.D.N.Y.1991) (\"The remedy for a violation of Brady and 18 U.S.C. \u00a7 3500 is a new trial \u0097 not the double jeopardy bar.\"); United States v. Davis, 578 F.2d 277, 280 (10th Cir.1978) (\"[T]he most an invocation of Brady could accomplish would be the ordering of a new trial in which the withheld information is fully disclosed.\").\n[7] Both witnesses testified that they would be ready, willing, and able to testify in any subsequent proceedings in this case.\n"} -{"text": "\n178 Ga. App. 31 (1986)\n342 S.E.2d 473\nGALLOWAY\nv.\nTHE STATE.\n71372.\nCourt of Appeals of Georgia.\nDecided February 4, 1986.\nRehearing Denied February 25, 1986.\nJames P. Brown, Jr., Albert B. Wallace, for appellant.\nE. Byron Smith, District Attorney, Thomas R. McBerry, Assistant District Attorney, for appellee.\nMcMURRAY, Presiding Judge.\nSearch and seizure. Via indictment, defendant was charged with the offense of aggravated assault. It was alleged that on June 9, 1984, defendant made \"an assault on the person of Jessie Cleveland with a certain gun, a deadly weapon, by shooting at the said Jessie Cleveland with said gun. . . .\" Following the entry of a plea of not guilty, defendant was tried by a jury. A verdict of guilty was returned and defendant was sentenced to confinement for a period of ten years. He appeals, enumerating error solely upon the denial of his motion to suppress evidence.\nThe following facts were adduced at the motion to suppress hearing: On June 9, 1984, Officer A. L. Bartlett of the Henry County Police Department, responded to a radio report about a shooting incident. Arriving at the home of the complainant, Jessie Cleveland's the officer was told that a shot had been fired at Cleveland's vehicle (which was occupied at the time by Cleveland and his family) by a passing motorist with a handgun.\nThe officer examined Cleveland's vehicle and observed a bullet hole in the vicinity of the left rear window. The complainant told the officer that he knew where the assailant lived. The complainant described the assailant's vehicle, a white van with a blue stripe, and he gave the officer the tag number of the vehicle. Cleveland also gave the officer directions to the assailant's house. Armed with this information, Officer Bartlett, accompanied by another policeman, Sergeant *32 Gardner, who joined the investigation, went to the home of the alleged perpetrator.\nDefendant's house sat about 100 or 125 feet from the road and was surrounded by a fence which stood approximately 25 feet away. The driveway was located on the outside of the fence. In other words, the fence was between the driveway and defendant's house. There was a gate at the entrance to the driveway. (Apparently, another fence bordered defendant's entire property.)\nAbout 20 minutes after the shooting occurred, the police neared defendant's house. Officer Bartlett observed a van parked in the driveway. The van matched the description of the van which had been given to the police by the complainant.\nThe driveway gate was open. The police entered the driveway and approached the van. Officer Bartlett knew the van, which was situated approximately 75 feet from the road, was on private property. Nevertheless, the officer continued his investigation.\nWith the aid of a flashlight, Officer Bartlett observed a handgun in the van. The officer grabbed the gun and examined it. In the officer's words: \"I looked in the van from the outside and the driver's window was down. And I was looking in the van to see if possibly the subject may be in the van for our safety and I saw the handle of a handgun sticking out of the little shelf up on the top and the handle was sticking out. So I reached through the window and got the gun, opened it up and one shot had been fired.\"\nIn the meantime, the defendant came out of his house and stood by the fence. He shouted at the police officers, informing them they had no right to search his van without a warrant. Upon being urged by the sergeant accompanying him, Officer Bartlett placed the gun back in the van.\nThe police left defendant's property. A warrant subsequently was obtained for defendant's arrest and defendant was taken into custody. The gun was not seized.\nAt trial, Officer Bartlett testified upon direct examination as follows: \"Q. All right, sir. You went up to the van and looked at it. A. Yes, sir. Q. You said you put your hand on it to see if it was warm and it was. What did you do next? A. I walked back around towards the driver's side of the van. The window was open. And I had my flashlight and I looked inside the van and in a cubby hole, right above the driver's seat \u0097 a little cubby hole up on the top, and there was a gun handle \u0097 the handle of a gun sticking out the cubby hole. Q. What did you do after you saw that? A. I reached in and pulled the gun out and I opened it up to see if it was loaded. Q. What kind of gun was it? A. It was a Charter Arms 38 special. Q. Okay. How many bullets did it hold? A. Five. Q. You say you opened the breech? A. Yes, sir, I opened the breech. Q. Did you observe the bullets inside? *33 A. Yes, sir, it had five casings or five shells and one of the shells \u0097 one of the bullets had been shot. Q. Okay. So it had \u0097 all chambers were filled, is that right? A. Yes, sir. Q. And four of them were live rounds, is that right? A. Yes, sir. Q. And one was a spent round? A. Yes, sir. Q. Okay. What did you do with that gun? A. I took the bullets out of it and showed it to my sergeant and he said, `put it back. We've got to go. We've got to leave.' And so, I took the bullets and threw the bullets in the back of the van and put the gun \u0097 I believe I put the gun back in the seat, rather than back where I got it. Q. Okay. Did you notice anything else unusual about the gun while you inspected it? A. Yes, sir, it had been fired \u0097 it appeared to be recently because I got a residue on my hands of gun powder, sticky, greasy residue on my hands.\"\nDefendant contends his Fourth Amendment rights were violated by Officer Bartlett and that, therefore, the trial court erred in failing to suppress the officer's testimony. Held:\nRelying upon Bunn v. State, 153 Ga. App. 270, 272 (265 SE2d 88), defendant argues his Fourth Amendment rights were abridged because the van was found within the curtilage of his house. In Bunn, this court observed: \"`Prima facie, a search made within the curtilage of the owner without a warrant is unconstitutional and void. \"Curtilage\" includes the yards and grounds of a particular address, its gardens, barns, buildings, etc. Bellamy v. State, 134 Ga. App. [340].' Norman v. State, 134 Ga. App. 767, 768 (216 SE2d 644). In Bellamy, supra, a truck parked in the driveway was found to be within the curtilage. In Norman, supra, we found a truck within 200 feet of the house to be within the curtilage.\" The flaw in defendant's argument is that, unlike Bunn, no search was made by the police in the case sub judice. On the contrary, defendant's gun simply was observed by the police in plain view. Thus, the legal principles that are applicable to a search are inapposite. State v. Brown, 158 Ga. App. 312, 315 (279 SE2d 755); State v. Brooks, 160 Ga. App. 381 (287 SE2d 95); State v. Nichols, 160 Ga. App. 386 (287 SE2d 53).\n\"The essential purpose of the Fourth Amendment is to shield the citizen from unwarranted intrusions by the government upon his privacy. Cardwell v. Lewis, 417 U. S. 583, 589 (94 SC 2464, 41 LE2d 325) (1974), citing Jones v. United States, 357 U. S. 493, 498 (78 SC 1253, 2 LE2d 1514) (1958). `What a person knowingly exposes to the public, even in his own home or office, is not a subject of Fourth Amendment protection.' Katz v. United States, 389 U. S. 347, 351 (88 SC 507, 19 LE2d 576) (1967). See also United States v. Dionisio, 410 U. S. 1, 14-15 (93 SC 764, 35 LE2d 67) (1973). Consequently, a police officer who observes contraband in plain view is entitled to seize it, so long as he is at a place where he is entitled to be, i.e., so long as he has not violated the defendant's Fourth Amendment rights *34 in the process of establishing his vantage point. See Ker v. California, 374 U. S. 23 (83 SC 1623, 10 LE2d 726) (1963); Harris v. United States, 390 U. S. 234 (88 SC 992, 19 LE2d 1067) (1968); Brooks v. State, 129 Ga. App. 393 (199 SE2d 578) (1974); Hatcher v. State, 141 Ga. App. 756 (234 SE2d 388) (1977).\" State v. Aultman, 160 Ga. App. 550, 551 (287 SE2d 580). This doctrine is applicable equally to homes and automobiles. Thus, in State v. Key, 164 Ga. App. 411, 412 (296 SE2d 60), this court ruled: \"Under the `plain view' doctrine, a law enforcement officer has a right to visually search the entirety of a car from his vantage point on a street or roadside. See State v. Scott, 159 Ga. App. 869 (285 SE2d 599) (1982). The viewing need not be motivated by any articulable suspicion. On the contrary, law enforcement officers simply have the right to look into automobiles, so long as they have a legitimate reason and are looking from a place in which they have a right to be (e.g., a street or roadside). Any incriminating evidence they have the fortune to see in plain view may be seized and later admitted as evidence. State v. Scott, supra.\" Did Officer Bartlett have a right to be in defendant's driveway when he looked into the van? We think he did.\nIn State v. Nichols, 160 Ga. App. 386, supra, the State appealed from the grant of the defendant's motion to suppress the admission of a roto-tiller in evidence. In that case, a policeman, accompanied by the owner of the roto-tiller, went to the defendant's mobile home to talk with him. The roto-tiller was located on defendant's property near the trailer. The owner was able to identify the roto-tiller as his own. The State conceded that the roto-tiller was within the curtilage. Nevertheless, this court reversed the grant of the motion to suppress, holding: \"From the record it appears that the officer went to the door of the trailer on the same route as would any guest, deliveryman, postal employee, or other caller. The vantage point from which the roto-tiller was visible was about half way between the door of the trailer and the roadside where the officer parked his car. This observation breached no right of privacy of the defendant.\" Id. at 386.\nIn the case sub judice, the officer approached the van \"on the same route as would any guest, deliveryman, postal employee, or other caller.\" See State v. Nichols, 160 Ga. App. 386, supra. Thus, the entry upon the property was a \"valid intrusion\" by the police. State v. Lyons, 167 Ga. App. 747, 748 (307 SE2d 285). The van was not parked in an area in which defendant had an expectation of privacy. See Lang v. State, 165 Ga. App. 576 (302 SE2d 683). And it cannot be said that Officer Bartlett violated defendant's Fourth Amendment rights when he established his vantage point.\n\"`A police officer may seize what is in plain sight if, as here, he is in a place where he is constitutionally entitled to be. Ker v. California, 374 U. S. 23 (83 SC 1623, 10 LE2d 726); Harris v. United States, *35 390 U. S. 234 (88 SC 992, 19 LE2d 1067); Green v. State, 127 Ga. App. 713, 715 (194 SE2d 678) (1972). And where such a plain-view seizure takes place, there is in effect no search at all. Grimes v. United States, 405 F2d 477 (5th Cir. 1968); Lewis v. State, 126 Ga. App. 123 (190 SE2d 123).' Cook v. State, 134 Ga. App. 712, 715 (215 SE2d 728) (1975).\" State v. Nichols, 160 Ga. App. 386, 387, supra. This holds true whether or not the officer expected or suspected that he would discover the object seized. State v. Scott, 159 Ga. App. 869, 870 (2) (285 SE2d 599). And it holds true whether the object seized is spied with the aid of a flashlight or the naked eye. Redd v. State, 240 Ga. 753, 754 (243 SE2d 16); State v. Lyons, 167 Ga. App. 747, supra.\nThe trial court did not err in denying defendant's motion to suppress.\nJudgment affirmed. Banke, C. J., and Benham, J., concur.\n"} -{"text": "795 F.2d 1265\n41 Fair Empl.Prac.Cas. 425,41 Empl. Prac. Dec. P 36,467Lywanna COOPER, Plaintiff-Appellee,v.CITY OF NORTH OLMSTED, et al., Defendants-Appellants.\nNo. 85-3213.\nUnited States Court of Appeals,Sixth Circuit.\nArgued May 5, 1986.Decided July 16, 1986.\n\nMichael R. Gareau (argued), Director of Law, James M. Dubelko (argued), Asst. Director of Law, City of North Olmsted, North Olmsted, Ohio, for defendants-appellants.\nSteven L. Howland (argued), Cleveland, Ohio, for plaintiff-appellee.\nSusan Elizabeth Rees (argued), E.E.O.C., Washington, D.C., for amicus curiae.\nBefore KENNEDY and MILBURN, Circuit Judges, and JOINER, Senior District Judge.*\nJOINER, Senior District Judge.\nThis is an appeal by the City of North Olmsted, et al. (\"the City\" \"or defendant\") from the judgment of the district court in favor of plaintiff-appellee Lywanna Cooper (\"Cooper\" or \"plaintiff\") on her Title VII and Sec. 1981 claims. The City raises two major issues before this court. First, the City challenges the district court's conclusion that plaintiff was not collaterally estopped in this suit by a prior administrative decision denying her unemployment compensation, when the administrative decision was affirmed by a state court. Second, the City argues that the district court incorrectly analyzed plaintiff's allegations of disparate treatment and retaliatory discharge.\nLywanna Cooper is the first female and first black to be hired as a bus driver by the North Olmsted Municipal Bus Line (\"NOMBL\"). Cooper began a one year period of probationary employment on July 1, 1979. Six to eight weeks later, she complained of harassment by her fellow bus drivers. This harassment included racist remarks made in Cooper's presence, offensive touching of her body, and crude bathroom graffiti about her. In response to Cooper's complaints, NOMBL repainted the bathroom and posted a notice indicating that discrimination would not be tolerated. No one was disciplined, however, and the harassment did not stop.\nNOMBL maintained a \"deficiency book\" in which rules violations committed by bus drivers were recorded. During 1979, six violations by Cooper were entered in the book. On August 29, 1979, Cooper received a warning about parking her bus on Lorain Road with passengers on board. On October 5, 1979, plaintiff was cited for wearing non-regulation shoes that were too bright in color. On October 9, 1979, a \"miss,\" or failure to arrive at work on time without first informing NOMBL, was recorded. On October 15, 1979, Cooper was cited for failing to relieve another driver at the proper place. On October 22, 1979, plaintiff was informed that she should not drive the bus with her foot propped over the emergency brake handle. On October 29, 1979, Cooper again was cited for failing to relieve another driver at the correct place.\nCooper filed a complaint with the Ohio Civil Rights Commission (\"OCRC\") on February 15, 1980, claiming harassment by the other NOMBL drivers. She alleged that the drivers' bathroom was again covered with graffiti about her, and that the other drivers were making bets about which of them could force her into an accident. In March, 1980, Cooper, NOMBL, the OCRC, and the Equal Employment Opportunity Commission (\"EEOC\") entered into a negotiated settlement agreement. The agreement required the repainting of the bathroom walls, the posting of a policy statement, and the disciplining of anyone caught engaging in discriminatory behavior. Cooper reported some improvement in her work situation following the agreement.\nOn February 26, 1980, one day after NOMBL received notice of Cooper's OCRC complaint, Cooper was cited for a miss. On March 14, 1980, a deficiency book entry indicates that plaintiff failed to pick up passengers at a certain point. On April 9, 1980, and on May 7 and May 9, 1980, Cooper was cited for running early. She was charged with a miss on both April 18 and May 28, 1980. On June 12, 1980, Cooper was cited for failing to pick up children at a school stop, leaving them stranded for one half hour. On June 19, 1980, Cooper was charged with leaving her bus unattended, running and open on a public street, arguably with children milling around.\nNOMBL General Manager Ken Mues sent Cooper warning letters on June 2, and again on June 13, 1980. These letters were Cooper's first indication that deficiency book entries were being made about her, and that her job performance was being seriously questioned. On June 19, 1980, Mues learned of the charge that Cooper had left her bus unattended, with children milling around it. He decided to discharge Cooper immediately, and did so.\nAfter being discharged, Cooper pursued a number of avenues for relief. First, on June 25, 1980, she filed charges of unlawful employment practices against the City with the OCRC. After an investigation, the OCRC found no cause to credit Cooper's allegations, and dismissed the charges. She did not request a reconsideration of this decision. Cooper also filed charges with the EEOC, which concluded, on June 9, 1980, that there was no cause to believe that Cooper's allegations were true. The EEOC issued Cooper a right to sue letter, enabling her to bring the present action.\nFinally, on June 27, 1980, Cooper filed for unemployment benefits with the Ohio Bureau of Employment Services (\"OBES\"). She argued that she was entitled to benefits because her discharge was without just cause. On July 25, 1980, the OBES denied Cooper benefits on the ground that NOMBL had cause to fire her. Cooper appealed this decision to the OBES Board of Review, which also found against her. On November 26, 1980, Cooper further appealed to the Cuyahoga County Court of Common Pleas. The court affirmed the denial of benefits, finding that the administrative determination \"was properly imposed, and was reasonable, lawful and supported by the manifest weight of the evidence.\" Cooper v. Board of Review, No. 20482 (Cuyahoga Cnty.Ct.Cmmn.Pleas Dec. 30, 1982). Cooper did not appeal from this decision.\nOn November 8, 1982, Cooper filed the present case in the United States District Court for the Northern District of Ohio. She charged the City with violating Title VII of the Civil Rights Act of 1964, U.S.C. Sec. 2000e et seq.; the Civil Rights Act of 1866, 42 U.S.C. Sec. 1981; and the Civil Rights Act of 1871, 42 U.S.C. Sec. 1983, by discharging her because of her race and sex, and because she filed discrimination charges with the OCRC. On September 2, 1983, the City moved for summary judgment, arguing that Cooper's claims were precluded by the prior ruling of the Cuyahoga County Court of Common Pleas. The district court denied the motion, 576 F.Supp. 592. The City then moved for summary judgment on the merits of Cooper's discrimination claims, and the court denied the motion.\nAfter a bench trial, the district court entered judgment in favor of Cooper on her Title VII and Sec. 1981 claims, and dismissed her claim under Sec. 1983. The City now appeals from the judgment of the district court.\nI. PRECLUSIVE EFFECT OF THE PRIOR STATE COURT JUDGMENT\nThe City first argues that the district court erroneously found that the final decision of the Cuyahoga County Court of Common Pleas did not preclude the claims raised in this lawsuit. This argument is based on the Full Faith and Credit Statute, which requires all United States courts to afford the same full faith and credit to state court judgments that would apply in the state's own courts. 28 U.S.C. Sec. 1738. In the present case, the City contends that the courts of Ohio would hold that the decision of the Court of Common Pleas precludes a subsequent discrimination claim. Therefore, the City argues, the district court should have reached the same conclusion.\nThe City's argument rests on the assumption that the courts of Ohio would apply the doctrine of collateral estoppel to the state court judgment, and hold that the judgment bars the present claims of discrimination. The seminal Ohio case on collateral estoppel is Norwood v. McDonald, 142 Ohio St. 299, 52 N.E.2d 67 (1943). There the Ohio Supreme Court defined collateral estoppel as follows:\nA point or a fact which was actually and directly in issue in a former action and was there passed upon and determined by a court of competent jurisdiction may not be drawn in question in any future action between the same parties or their privies, whether the cause of action in the two actions be identical or different.\n142 Ohio St. at 300, 52 N.E.2d 67 (syllabus p 3). More recently, Justice Holmes, writing for the Ohio Supreme Court in Goodson v. McDonough Power Equip., Inc., 2 Ohio St.3d 193, 200-01, 443 N.E.2d 978 (1983), stated that:\n\n\n1\nThe main legal thread which runs throughout the determination of the applicability of res judicata, inclusive of the adjunct principle of collateral estoppel, is the necessity of a fair opportunity to fully litigate and to be \"heard\" in the due process sense. Accordingly, an absolute due process prerequisite to the application of collateral estoppel is that the party asserting the preclusion must prove that the identical issue was actually litigated, directly determined, and essential to the judgment in the prior action.\n\n\n2\n(citations omitted). Therefore, the City must prove that the issues of race and sex discrimination were actually and directly at issue in the prior state proceedings, and that they were essential to the judgment of the state court against Cooper.\n\n\n3\nThe record in this case reveals that the question of whether Cooper's discharge was the result of race or sex discrimination by the City was not actually or directly presented to or ruled upon by the OBES or the Common Pleas Court. The prior state proceedings instead addressed Cooper's entitlement to unemployment benefits. Ohio Rev.Code Sec. 4141.29(D)(2)(a) (Page 1980) provides that an individual is ineligible for benefits if he or she \"has been discharged for just cause in connection with his [or her] work.\" In the present case, Cooper was denied benefits by the OBES because it found that her employer had \"just cause\" to discharge her. The determination of whether just cause exists focuses on the existence of fault on the part of the employee as a factor in the discharge. See Sellers v. Board of Review, Ohio Bureau of Employment Serv., 1 Ohio App.3d 161, 164, 440 N.E.2d 550 (1981). Here, the OBES concluded that Cooper's discharge was justified by her infractions of the rules of her employer. On appeal, the Common Pleas Court held that the OBES determination was not \"unlawful, unreasonable, or against the manifest weight of the evidence.\" Ohio Rev.Code Sec. 4141.28(O). The court rejected Cooper's arguments that her transgressions were insufficient to justify the discharge, and that the OBES hearing was unfair in that Cooper was unable to present her side of the case. The record is devoid of any consideration of race or sex discrimination, and such claims were beyond the scope of the administrative and state court actions.1 Under these circumstances, the courts of Ohio would hold that Cooper's discrimination claims are not barred by the prior state proceedings.\n\n\n4\nThe City's reliance on Kremer v. Chemical Constr. Corp., 456 U.S. 461,102 S.Ct. 1883, 72 L.Ed.2d 262 (1982), is misplaced. In that case, the question confronting the Supreme Court was whether to \"give preclusive effect to a decision of a state court upholding a state administrative agency's rejection of an employment claim as meritless when the state court's decision would be res judicata in the State's own courts.\" 456 U.S. at 463, 102 S.Ct. at 1888. The Court held that the prior state proceedings barred the plaintiff's Title VII charges of discrimination. In Kremer, New York law clearly held that the judicially-affirmed determination of the New York State Division of Human Rights that plaintiff was not the victim of discrimination barred later suits based on the same grievance. Id. at 467, 102 S.Ct. at 1890 (quoting New York law). In this case, the prior state proceedings did not encompass the claims raised in the subsequent Title VII lawsuit, and the Ohio courts would not apply collateral estoppel.2\n\n\n5\nThe City's reliance on Pullar v. UpJohn Health Care Serv., Inc., 21 Ohio App.3d 288, 488 N.E.2d 486 (1984), is also unavailing. There the Cuyahoga County Court of Appeals held that a prior OBES decision that plaintiff had been terminated for just cause bars a later age discrimination action. The discrimination suit was based on an Ohio statute that prohibits discharging individuals between the ages of 40 and 70 \"without just cause.\" 21 Ohio App.3d at 290, 488 N.E.2d 486 (quoting Ohio Rev.Code Sec. 4101.17). Pullar is distinguishable from the present case, as the subsequent discrimination suit raised the same issue of just cause to discharge as had been addressed in the OBES proceedings. In this case, as previously stated, the prior OBES proceedings did not encompass the claims raised later in the discrimination action. Moreover, a number of decisions from the other Ohio courts indicate that collateral estoppel does not apply in circumstances similar to those in the present case. These courts have refused to give collateral estoppel effect to judicially-affirmed administrative decisions, holding that those decisions did not affect later proceedings addressing issues not directly raised in the first actions. See, e.g., Ohio Dept. of Mental Health, Cambridge Mental Health Center v. Hunt, No. CA-766 (Ohio Ct.App. Aug. 2, 1985); Pickaway County General Health Dist. v. Administrator, Ohio Bureau of Employment Serv., No. 84-CA-12 (Ohio Ct.App. July 1, 1985); Reed v. Dodge, No. E-84-41 (Ohio Ct.App. March 15, 1985).\n\n\n6\nThe foregoing analysis reveals that the courts of Ohio would not preclude Cooper from asserting her discrimination claims because of the prior judicially-affirmed OBES proceedings. The district court's refusal to apply the doctrine of collateral estoppel is affirmed.\n\n\n7\nII. COOPER'S CLAIMS OF INTENTIONAL DISCRIMINATION\n\n\n8\nThe City next challenges the district court's finding that plaintiff proved intentional discrimination, in violation of Title VII and Sec. 1981.3 The district court concluded that Cooper had established intentional discrimination under two theories: disparate treatment and retaliatory discharge. The City argues that the district court's conclusions on the issues are legally erroneous.\n\nA. Disparate Treatment\n\n9\nSection 703(a)(1) of Title VII, 42 U.S.C. Sec. 2000e-2(a)(1), generally prohibits race or sex discrimination in any employment decision. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 796, 93 S.Ct. 1817, 1821, 36 L.Ed.2d 668 (1973). A Title VII plaintiff bears the burden of proving that it is more probable than not that she was discriminated against on a proscribed basis. The district court correctly found that Cooper could establish a prima facie case of disparate treatment pursuant to McDonnell Douglas if she showed 1) that she was female and a member of a racial minority; 2) that she and a similarly situated white or male person received dissimilar treatment; and 3) that sufficient evidence exists from which the court can find a causal connection between race or sex and the alleged acts of the defendants.\n\n\n10\nThe City contends that Cooper failed to establish a prima facie case, as she did not prove that she was treated differently than similarly situated white and male employees. It argues that the district court, in concluding that a prima facie case had been established, erroneously compared Cooper to employees who were not similarly situated. Specifically, the City objects to the district court's comparing of Cooper's record to those of Lawrence Sindalar and Ken Moss. The City points out that Sindalar was a permanent rather than a probationary employee during the relevant time period, and that Moss' probationary period occurred five years earlier under a different General Manager than that of Cooper.\n\n\n11\nA probationary period of employment permits a company to weed out or eliminate undesirable employees. See, e.g., Farmer v. Colorado and Southern R.R. Co., 723 F.2d 766, 767 (10th Cir.1983). The opportunity to dismiss more readily those new employees whose job performance is unsatisfactory is particularly important to NOMBL. As a common carrier, NOMBL has the duty of exercising the highest standard of care for the safety of its passengers. See, e.g., Mitchell v. Marker, 62 F. 139, 142-43 (6th Cir.1894); May Dept. Stores Co. v. McBride, 124 Ohio St. 264, 178 N.E. 12 (1931). Probationary bus drivers therefore do not stand on equal footing with permanent drivers, and cannot be considered to be similarly situated. See, e.g., McKenna v. Weinberger, 729 F.2d 783, 789 (D.C.Cir.1984).\n\n\n12\nThe district court improperly compared the work records of Sindalar, a permanent employee who was not discharged, and Cooper, a probationary employee who was discharged. This error requires a remanding of this case to the district court. On remand, the district court shall make findings as to whether Cooper has established that she was treated differently than other NOMBL probationary employees.\n\n\n13\nThe district court also compared Cooper to Ken Moss, who began his probationary year of employment in 1976 under General Manager Ernie Zoldesy, Ken Mues' predecessor. The City contends that it presented ample evidence at trial that Zoldesy did not possess the managerial skills of Mues. It concludes that any difference in the treatment received by Cooper and Moss can be explained by the change in managers. The district court refused to consider the change in management, finding it \"entirely appropriate\" to compare the treatment received by Cooper and Moss. Cooper v. City of North Olmsted, C82-3089, at 34 (N.D.Ohio Feb. 11, 1985). Although a change in managers is not a defense to claims of race or sex discrimination, it can suggest a basis other than race or sex for the difference in treatment received by two employees. See Tate v. Weyerhaeuser Co., 723 F.2d 598, 606 (8th Cir.1983), cert. denied, --- U.S. ----, 105 S.Ct. 160, 83 L.Ed.2d 97 (1984). The district court therefore should have considered the management change in determining the probative value of the comparison between Cooper and Moss. On remand, the district court shall consider this factor in its analysis of Cooper's disparate treatment claim.\n\n\n14\nThe City next argues that the district court erroneously conducted the analysis of discrimination claims set forth in Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981). According to Burdine, the plaintiff must first establish a prima facie case of intentional discrimination, which the defendant can rebut by producing a legitimate, nondiscriminatory reason for the discharge. \"The defendant need not persuade the court that it was actually motivated by the proffered reasons.... It is sufficient if the defendant's evidence raises a genuine issue of fact as to whether it discriminated against the plaintiff.\" 450 U.S. at 254-55, 101 S.Ct. at 1094 (citation and footnote omitted). If the defendant meets this burden of production, the plaintiff must then prove that defendant's asserted motive is pretextual. The need to prove pretext merges with the plaintiff's ultimate burden of persuading the court that she was the victim of intentional discrimination, a burden that the plaintiff retains at all times. Id. at 254-56, 101 S.Ct. at 1094-95.\n\n\n15\nIn the present case, the City offered Cooper's numerous infractions of NOMBL rules, as recorded in the deficiency book, as its legitimate, nondiscriminatory reason for discharging her. Cooper then offered evidence that many of the deficiency book entries did not correspond to the facts of the situation, and that some of them were made in violation of company policy. The district court examined the deficiency book entries, one by one, and found that Cooper's version of the recorded events was credible. The court concluded that the vast majority of the deficiency book entries should not have been made, and that Cooper had therefore proved that the City's proffered reason for the discharge was a pretext.\n\n\n16\nThe district court appears to have focused on whether or not the court believed Cooper's version of the facts surrounding the alleged infractions of NOMBL rules. In so doing, the district court overlooked the crucial inquiry in this case, which is whether the City intentionally discriminated against Cooper. The court should not put itself in a position of judging the correctness of the defendant's action in discharging the plaintiff. Instead, the court should look at whether the actions and the intentions of the defendant were pretextual or amounted to intentional discrimination. To determine the City's motivation in discharging Cooper, the district court must make specific factual findings on 1) whether the City relied on the deficiency book entries in discharging Cooper; and 2) if the City did so rely, whether that reliance was reasonable under the totality of the circumstances in this case. Therefore, this case must be remanded to the district court, with instructions to make these essential factual determinations.4\n\nB. Retaliatory Discharge\n\n17\nSection 704(a) of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000e-3(a), forbids discrimination against employees for attempting to protest or correct allegedly discriminatory conditions of employment. McDonnell Douglas, 411 U.S. at 796, 93 S.Ct. at 1821. To support a claim of retaliatory discharge, a plaintiff must prove: 1) that she engaged in activity protected by Title VII; 2) that she was the subject of adverse employment action; and 3) that there is a causal link between her protected activity and the adverse action of her employer. Jackson v. RKO Bottlers of Toledo, Inc., 743 F.2d 370, 375 (6th Cir.1984). The City contends that Cooper failed to establish a prima facie case of retaliatory discharge, as she did not prove a causal link between her filing of OCRC charges and her discharge four months later.\n\n\n18\nThe district court found that Cooper filed discrimination charges with the OCRC on February 15, 1980, and that the City received a copy of the charges on February 25, 1980. The court stated that Cooper was then \"immediately cited for myriad alleged violations of NOMBL rules,\" and that those citations culminated in Cooper's discharge. Cooper v. City of North Olsted, No. C82-3089, at 35-36. From this, the district court concluded that plaintiff established a prima facie case of retaliatory discharge.\n\n\n19\nThe district court's factual findings do not support its conclusion that Cooper established a causal link between the OCRC complaint and her discharge. The mere fact that Cooper was discharged four months after filing a discrimination claim is insufficient to support an interference of retaliation. See, e.g., Brown v. ASD Computing Center, 519 F.Supp. 1096, 1116-17 (S.D.Ohio 1981), aff'd sub nom. Brown v. Mark, 709 F.2d 1499 (6th Cir.1983). The district court appears to have relied on the fact that Cooper was cited for rules violations six times in the seven month period preceding her OCRC complaint, and nine times in the four months following the complaint. The district court further noted that four of the pre-complaint citations were unjustified.5 The record in this case contains no evidence directly linking the nine citations at issue to Cooper's filing of the OCRC discrimination charges. While a disparity in the amount of disciplinary action may certainly be sufficient in appropriate cases to support an inference of retaliation, this is not such a case. Standing alone, the change in the number of deficiency book entries on which the City could reasonably rely, and Cooper's discharge four months later, do not establish a prima facie case of retaliatory discharge. The district court's finding on this issue is clearly erroneous, and must be reversed.6\n\nIII. CONCLUSION\n\n20\nThe judgment of the district court denying collateral estoppel effect to the prior judicially-affirmed OBES proceedings is affirmed. The district court's finding of disparate treatment, in violation of 42 U.S.C. Secs. 1981, 2000e-2(a)(1), is vacated, and the case is remanded for further proceedings in conformance with this opinion. The finding of retaliatory discharge, in violation of 42 U.S.C. Secs. 1981, 2000-3(a), is reversed.\n\n\n\n*\n The Hon. Charles W. Joiner, Senior United States District Judge, Eastern District of Michigan, sitting by designation\n\n\n1\n The district court found that Cooper raised the issues of race and sex discrimination during the OBES and Court of Common Pleas proceedings. See Cooper v. City of North Olmsted, 576 F.Supp. 592, 595 (N.D.Ohio 1983). The court then stated, however, that there was no indication that these allegations were ever investigated. The court further stated that the OBES Board of Review and the Court of Common Pleas had not ruled on the allegations of discrimination. 576 F.Supp. at 595-96. The record on appeal, as indicated above, contains no indication that any charges of race and sex discrimination were directly presented or considered in the state proceedings. Therefore, the record, when considered as a whole, fails to establish that the issues of race and sex discrimination were actually and directly at issue in the prior proceedings, or that they were essential to the judgment of the state court\n\n\n2\n The City argues that Kremer establishes a two-part inquiry for this case. First, a court should decide whether or not the Ohio courts would give preclusive effect to the prior Court of Common Pleas decision, and would hold that it bars the present discrimination suit. If the court finds that collateral estoppel would apply under Ohio law, it must then examine whether that application would offend due process. Specifically, the court must determine whether the claimant had a full and fair opportunity to litigate the discrimination claim in the prior proceeding. The City claims that the district court committed reversible error by omitting the first part of the analysis, and failing to consider Ohio law. Instead, the court focused exclusively on the due process inquiry. The district court concluded that Cooper did not have a full and fair opportunity to litigate her discrimination claims in the prior proceedings, as those proceedings did not determine whether discrimination played a role in Cooper's discharge. This analysis, although faulty, is not reversible error. By concluding that the prior state proceedings did not afford Cooper an opportunity to litigate her discrimination claims, the court determined that those claims were not actually or directly at issue in the state court and that they were not essential to the state court's judgment. Thus, the determination required by Ohio law was made\n\n\n3\n Liability under Sec. 1981 may be established by proving that a defendant engaged in purposeful or intentional discrimination. See General Building Contractors Ass'n v. Pennsylvania, 458 U.S. 375, 102 S.Ct. 3141, 73 L.Ed.2d 835 (1982); Leonard v. City of Frankfort Elec. and Water Plant Bd., 752 F.2d 189, 193 (6th Cir.1985). In the present case, the district court found that plaintiff's proof of disparate treatment and retaliatory discharge established a violation of both Title VII and Sec. 1981. As liability under both statutes rests on the same proof, Cooper's Sec. 1981 claim will not be separately discussed infra\n\n\n4\n The City also claims that the district court erred in refusing to grant it summary judgment on plaintiff's claims of intentional discrimination, as no issues of material fact existed. As the Ninth Circuit has stated, \"[c]ourts are reluctant to dismiss by summary judgment Title VII discrimination suits where, as in antitrust actions, motive and intent are crucial elements and the proof is in the hands of the alleged wrongdoers.\" Reed v. Lockheed Aircraft Corp., 613 F.2d 757, 759 (9th Cir.1980). In the present case, conflicting evidence was presented about the reasons for plaintiff's discharge. Summary judgment was therefore inappropriate, and the district court properly denied the motion\n\n\n5\n As stated earlier, the district court should have focused on whether the City reasonably relied on the deficiency book entries, and not on whether the district court itself believed the citations. The court will assume, in analyzing the retaliatory discharge claim, that the district court found or will find on remand that the City did not reasonably rely on four pre-complaint deficiency book entries and nine post-complaint deficiency book entries\n\n\n6\n This decision makes it unnecessary to consider the City's claim that the district court erroneously denied its motion for summary judgment on Cooper's retaliatory discharge claim\n\n\n"} -{"text": "272 F.2d 517\n106 U.S.App.D.C. 288\nEdgar W. GRAHAM, Appellantv.Alfred C. RICHMOND, Commandant of the United States CoastGuard, Appellee.\nNo. 14636.\nUnited States Court of Appeals District of Columbia Circuit.\nArgued March 6, 1959.Decided Nov. 5, 1959.\n\nMr. Leonard B. Boudin, New York City, with whom Mr. David Rein, Washington, D.C., was on the brief, for appellant.\nMr. Cecil R. Heflin, Attorney, Department of Justice, with whom Mr. Homer H. Kirby, Jr., Attorney, Department of Justice, was on the brief, for appellee.\nBefore FAHY, DANAHER and BURGER, Circuit Judges.\nFAHY, Circuit Judge.\n\n\n1\nAppellant, a merchant seaman and marine engineer, applied to the Commandant of the United States Coast Guard, the appellee, who was in charge of administering the applicable regulations, for a validated document required to enable him to secure employment on board vessels of the United States Merchant Marine, a private industry.1 The application consisted in part of fourteen questions, to be answered by the applicant in writing under oath. Appellant refused to answer three of the questions, stating they were violative of his constitutional rights, particularly under the First Amendment, and were so vague as to make accurate answers impossible. His application was refused further consideration, thus precluding him from obtaining employment in the Merchant Marine. Appellant then asked for a specific statement of charges and a hearing but was informed that his request was premature. He sued in the District Court for a judgment declaring that he was eligible for such employment, and for related relief. During the pendency of the suit appellee substituted for the original three unanswered questions three others of like but narrower scope. Appellant declined to answer the substituted questions on the same grounds and again requested a statement of reasons and a hearing. Neither was granted.2 Appellee moved for summary judgment. The court ruled that since appellant had refused to answer questions appellee had a right to ask, appellee need proceed no further with the application. Appellant's complaint was dismissed and he appeals.\n\n\n2\nThe eleven questions appellant answered inquired as to his arrest or conviction of certain offenses, his advocacy of treason, sedition, espionage or sabotage, the giving of aid or comfort to any person involved in such offenses, his association with any person who had committed such acts, his employment by or on behalf of a foreign government, his being subject to or under the influence of a foreign government, whether he had relatives or associates living in certain countries, whether he advocates or supports or ever advocated or supported the overthrow or alteration of the government of the United States by force or by any unconstitutional means, his association with any person who had done so, and whether he had ever disclosed without authority any military or government information to any foreign government or person not authorized to receive it. He answered each of these eleven questions in the negative.\n\n\n3\nThe three unanswered questions, in their substituted form, are:\n\n\n4\n'12. Are you now subscribing or have you subscribed within the past five years to the 'Daily Worker,' 'Peoples World,' or to 'Political Affairs'? Answer 'YES,' or No.' .............. If your answer is 'YES,' give full particulars.\n\n\n5\n'13. Are you now or have you been engaged within the past ten years in the sale, gift, publication or distribution of any written or printed matter prepared, produced or published by the Communist Party or by any of its branches or agents, or by Russia, China, Bulgaria, Hungary, East Germany, Poland, Roumania, Lithuania, Latvia, Estonia, or Czechoslovakia? Answer 'YES' or 'NO.' .............. If your answer is 'YES,' give full particulars.\n\n\n6\n'14. Are you now or have you ever been a member of, or affiliated in any way with any of the organizations set forth below? Answer 'YES' or 'No.' .............. If your answer is 'YES,' give full particulars.\n\n\n7\n'Communist Party, United States of America and sub-divisions and branches\n\nAbraham Lincoln Brigade\nInternational Workers Order\nCivil Rights Congress\n\n8\nLabor Youth League.'\n\n\n9\nGreene v. McElroy, 360 U.S. 474, 79 S.Ct. 1400, 3 L.Ed.2d 1377, involved a Department of Defense security clearance program for employees of a private manufacturer producing goods for the armed services of the United States. The program was held to affect the liberty and property of the employee protected from unreasonable governmental interference by the Due Process Clause of the Fifth Amendment. The hearing procedures applied to Mr. Greene omitted the traditional safeguards of confrontation and cross-examination in the process of fact finding. Concerned as to whether this omission could be reconciled with due process of law, the Court refrained from deciding this grave question and held the program invalid as administered in Mr. Greene's case because there was no clear authorization by Congress or the Executive for the Department of Defense to have created a security program under which an employee might lose his job through proceedings conducted without the right of confrontation and cross-examination.\n\n\n10\nIn this light we inquire whether the Magnuson Act,3 upon which the Merchant Marine screening program before us ultimately rests, has authorized the appellee to deny appellant private employment in that industry merely because he refused to answer the three questions.\n\n\n11\nThe Act authorizes the President, upon making a certain finding, to institute measures and issue rules and regulations to safeguard vessels, harbors, ports and waterfront facilities against destruction, loss, or injury from sabotage or other subversive acts, accidents, or other causes of similar nature, and to employ such departments, agencies, officers and instrumentalities of the United States as the President may deem necessary. Under this authority the President on October 20, 1950, issued Executive Order No. 10173, by which he approved regulations designed to safeguard against the dangers mentioned in the Act.4 The regulations provide inter alia that employment shall be conditioned upon the applicant receiving a validated document from the Commandant of the Coast Guard, and laid down a standard to guide the Commandant, namely, that the Commandant shall be satisfied that the character and habits of the applicant 'are such as to authorize the belief that the presence of the individual on board would not be inimical to the security of the United States.' The regulations also provide that the form, conditions, and manner of issuance of the validated document shall be as the Commandant prescribes. Pursuant to this Presidential authority the Commandant promulgated regulations. 33 C.F.R. 121.01-121.29 (Supp.1959). One of these is entitled 'Standards,' set forth in full in the margin.5 Upon receipt of a complete application, (see 121.05) and such further information as the Commandant may require in case the application as first submitted is deemed insufficient, there are detailed provisions for processing the application (ibid.), in the course of which notice is given the applicant if the Commandant is not satisfied that his character and habits of life are such as to authorize the belief that his presence on board would not be inimical to the security of the United States. (121.07) The notice is to contain a statement of reasons, as specific as the interests of national security shall permit, with pertinent information such as names, dates, and places, in such detail as to permit reasonable answer. (121.11) Written answer may be filed, including statements, affidavits by third parties, or such other documents or evidence as the applicant deems pertinent. (Ibid.) Thereupon a committee shall prepare an analysis of the information and make recommendations for action by the Commandant. If he is still not satisfied under the prescribed standard he is to refer the matter to a board. (121.19) The applicant may appear before the board in person or by counsel or representative of his choice, may present testimonial and documentary evidence, and may cross-examine any witness appearing before the board. The board 'shall reach its conclusion and base its determination on information presented at the hearing, together with such other information as may have been developed through investigations and inquiries or made available by the applicant * * *.' (Ibid.) The recommendation of the board, with the complete record, shall be sent to the Commandant. If his decision is adverse he must notify the applicant of his refusal to issue the document and that an appeal may be taken to an appeal board at Coast Guard Headquarters in Washington. (121.23) If upon receipt of the appeal board's recommendation the Commandant is still not satisfied under the prescribed standard he shall notify the applicant that his appeal is denied. (121.25) Should the Commandant, during any of these procedures, reach a favorable decision the document necessary for employment shall be issued.6\n\n\n12\nIt will be seen that in these comprehensive regulations of the President and Commandant there is nothing to the effect that refusal to answer any of the questions contained in the questionnaire shall in and of itself cause rejection of an application. Such a result is not even remotely suggested by the Magnuson Act, the Executive Order, or the regulations of the President or of the Commandant. The basic standard for employment clearance, set forth by both President and Commandant, is, as we have shown, that 'the Commandant is satisfied that the character and habits of life of such person are such as to authorize the belief that the presence of the individual on board would not be inimical to the security of the United States.' Yet appellant's right to employment was never measured by this standard, notwithstanding the absence of any provision relieving the Commandant of the necessity of applying it. Moreover, the regulations make clear that should the Commandant not be satisfied short of a hearing that the standard is met, then a hearing shall be had. As noted earlier, appellant twice requested a hearing but none was granted.\n\n\n13\nWe assume, as was decided in Parker v. Lester, 9 Cir., 1955, 227 F.2d 708, that the Magnuson Act validly authorizes a screening of persons seeking employment in the American Merchant Marine; and we assume also that in the screening process the three unanswered questions are relevant. But what is relevant is not here conclusive. One relevant factor is to be considered with whatever else is relevant.7 As the Commandant's own brief in this court points out, had the three questions been answered affirmatively appellant would not automatically have been disqualified, since the answers would merely have been taken into consideration by the Commandant in reaching a decision. We think it equally true that a refusal to answer the three questions for the reasons appellant assigned does not automatically disqualify him. It is nowhere so provided in the Act, Executive Order, or regulations. Here the Commandant by regulation has wholly failed to provide for rejection of an application short of a hearing if the Commandant is not satisfied without a hearing as to the security qualifications of the applicant. Since he has not provided that an applicant who refuses to answer certain questions shall be entitled to no further consideration, the applicant was entitled to the processing of the application in the manner which the regulations do provide. Service v. Dulles, 1957, 354 U.S. 363, 386, 387, 77 S.Ct. 1152, 1 L.Ed.2d 1403, teaches us that so long as the regulations remain unchanged and the Commandant has provided for notice of reasons, answer and a hearing in order to permit him to make the determination he is required to make, he is bound by his own regulations. In this processing a critical factor may turn out to be the applicant's refusal to answer certain questions. But any such factor must be weighed with all other evidence which might tend to satisfy the Commandant that the presence of the applicant on shipboard would not be inimical to the security of the United States. Perhaps the applicant can submit cogent reasons for his failure or refusal to answer the questions. Perhaps the Commandant will find unsatisfactory such reasons or explanations as may be offered. Even though he cannot satisfy the Commandant, 'he is entitled to the opportunity to try. * * * At least he will have been afforded that due process required by the regulations in such proceedings.' United States ex rel. Accardi v. Shaughnessy, 1954, 347 U.S. 260, 268, 74 S.Ct. 499, 504, 98 L.Ed. 681. The situation may be analogized to that referred to by Mr. Justice Frankfurter, concurring in part in Vitarelli v. Seaton, 1959, 359 U.S. 535, 547, 79 S.Ct. 968, 976, 3 L.Ed.2d 1012, 'if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed.'\n\n\n14\nReversed and remanded for further proceedings not inconsistent with this opinion.\n\n\n15\nBURGER, Circuit Judge (dissenting).\n\n\n16\nIn view of the appellant's original failure and subsequent refusal to answer concededly pertinent questions authorized by the screening process, I cannot see how the majority reaches its result.\n\n\n17\nThe Communist invasion of South Korea, involving as it did and still does the maintenance of supply lines of vast proportions to South Korea, brought about the enactment of the so-called Magnuson Act, which provided that whenever the President finds that the security of the country is in danger by reason of actual or threatened war, or subversive activities, he is authorized to issue rules and regulations to guard the United States Merchant Marine from sabotage or subversion. The President is also authorized to designate officers to carry out the authority of the Act. Under this authority, President Truman signed Executive Order 10173 in 1950 and amended it in 1951 by Executive Order 10277 and in 1952 by Executive Order 10352. In these orders he cited the threatened security by reason of subversive activities and ordered that 'No person shall be issued a document required for employment on a merchant vessel of the United States * * * (unless) the Commandant (Coast Guard) is satisfied that the character and habits of life of such person are such * * * that the presence of the individual on board would not be inimical to the security of the United States * * *.' We are bound at the outset by the premise that the emergency declared by President Truman in 1950, 1951, 1952, with respect to this subject, is still operative, valid and pressing.\n\n\n18\nActing under this authority, the Coast Guard issued regulations which set up the form of application and procedures for processing applications and provided that applications be signed under oath. Among other questions asked by the Coast Guard questionnaire was the following:\n\n\n19\n'14. Are you now, or have you ever, been, a member of, or affiliated or associated with in any way * * * (the) Communist Party, U.S.A, its subdivisions, (etc.) * * *.'\n\n\n20\nAppellant failed to answer this question and, after being afforded a second opportunity to answer it in substantially the same form, refused to do so, contending that the Coast Guard is without authority to question him about possible Communist Party membership as a condition of granting him a license as a steam engineer on United States Merchant Marine vessels. The majority opinion does not question the Government's authority to question Graham regarding possible Communist affiliations. Indeed, it specifically concedes that the questions are relevant. It is clear therefore, to all of us, that possible membership in the Communist Party is a proper subject of inquiry. The paradox is that in the face of conceding the pertinency of the questions, the majority nonetheless holds that Graham may refuse to answer, and notwithstanding this refusal, the Coast Guard must nevertheless go through the process of a hearing despite Graham's default.\n\n\n21\nI confess inability to follow these steps. For if the questions be authorized and pertinent, which is recognition that the information to be gained from their answers is necessary to any decision the Coast Guard may make, why should the Coast Guard be compelled by this court to take any further action until the questions are answered?\n\n\n22\nThe fallacy in the majority's position and reasoning is best illustrated when we remember that the Coast Guard did not, and does not, 'refuse' Graham his license, nor is it correct to characterize its action as a 'rejection.' It simply refuses to act upon an admittedly incomplete application.1 The regulations clearly indicate that before any license is to issue, the applicant must supply information 'sufficiently complete' so that a determination as to his qualifications can be made.2 It is only after such data has been submitted that the Coast Guard is authorized to make any determination or take any action. It is simply not accurate to say, as the majority does, that 'the Commandant by regulation has wholly failed to provide for rejection of an application short of a hearing * * *.' The precise opposite is explicitly provided in the regulations:\n\n\n23\n'Upon receipt of a complete application and such further information as the Commandant may have required in those cases where the application, as first submitted, was not deemed sufficient, a committee * * * shall prepare an analysis of the information available to the Commandant and make recommendations for action by the Commandant.' Reg. 121.05(e), 33 C.F.R. 121.05(e).\n\n\n24\nThis seems to me explicit authority for the Commandant to refuse to act on anything less than a 'complete application,' and to this date the applicant has not submitted a complete application even though afforded a second opportunity to do so. Whatever action the Commandant may later take, or the correctness of any determination he may make as to this applicant, or the constitutionality of the standards prescribed in the Executive Orders, are all questions for the future, but until Graham properly applies for a license there is nothing for the Coast Guard to act upon.\n\n\n25\nThe majority cites Greene v. McElroy, 1959, 360 U.S. 474, 79 S.Ct. 1400, 3 L.Ed.2d 1377, as pertinent. But that case has no application here. There the Supreme Court simply held that in a hearing upon fitness for private employment in the performance of government defense contracts, the courts will not read into the statute or order a congressional or executive intent to deny the employee confrontation and cross examination of sources of adverse information, the Executive Order and the statute being silent on these points. That question never arises here, since Graham did not comply with the preliminary administrative procedures essential to invoke a hearing and the controlling regulations are not silent. Graham has not now been, and never was denied his right to a hearing or to confront anyone who may testify against him. He can have his hearing literally at once by simply answering the questions, and the Coast Guard has so informed him.3\n\n\n26\nThere is nothing novel or unconstitutional in the refusal by an administrative body to process an incomplete application. It has long been the law, and this court has expressly held, that a person seeking a license or privilege must 'establish those qualifications for the license which would make its grant serve the public interest, and this necessarily presupposes a frank, candid, and honest disclosure of the facts as to (his) qualifications deemed by the commission essential to enable the commission to act within its powers.'4 Thus we have held specifically that an applicant must supply the required data when seeking a license before he has any rights.5 And in a proceeding for an F.C.C. license, the Eastern District Court (three judges) of New York has said that an applicant must fully supply pertinent data as to character, in the absence of which the F.C.C. can deny a license to a person refusing to so disclose.6 In the instant case the Coast Guard has not denied anything, but has merely refused to process the application because the applicant refuses to give pertinent data necessary for its determination, and which if given might cause the license to be granted at once. A license may not be affirmatively denied without a hearing, under the regulations.\n\n\n27\nThe courts have uniformly described as long-settled the proposition that where an administrative procedure is authorized, those who seek privileges or licenses under it must exhaust their administrative remedies before the courts are granted judicial review. See National Lawyers Guild v. Brownell, 1955, 96 U.S.App.D.C. 252, 257, 225 F.2d 552, 557, certiorari denied, 1956, 351 U.S. 927, 76 S.Ct. 778, 100 L.Ed. 1457. In the recent case of National Council of American-Soviet Friendship, Inc. v. Brownell, 1957, 100 U.S.App.D.C. 116, 119, 243 F.2d 222, 225, this court dealt with a situation where the appellant had refused to proceed with the hearing authorized by statutes and regulations, but challenged the action under which they were listed as 'subversive.' Pointing out that the designation as 'subversive' was not final, (precisely as the action of the Coast Guard is not final here) we said:\n\n\n28\n'Rather, appellants insist that they may default and still continue to litigate. * * * The plight of the appellants is of their own choice and of their own making.'\n\n\n29\nElsewhere in the opinion we point this up, saying:\n\n\n30\n'it is 'the long-settled rule of judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted.\" Ibid.\n\n\n31\nHere the appellant, far from 'exhausting' his administrative steps, has not even completed the preliminary step to invoke the proceedings established by the regulations. Under our own pronouncements, Graham should not be permitted 'to default and still continue to litigate.'\n\n\n32\nAppellant is seeking a license for employment on a merchant vessel under conditions which can be fully as important to national security as if he were seeking service in the Navy, and any suggestion that he cannot be asked about his possible Communist affiliation or that he should receive the aid of the courts in the face of two refusals to answer is without precedent in the law governing administrative processes. Similarly, I am unable to understand the concept that the President and the Commandant of the Coast Guard may not require that this question be answered as a preliminary step of the process of applying for a license. How can we say that questions may be asked, as the majority does by conceding pertinency and the authority to ask them, and then hold that no answer be required as a condition to any consideration of the application?\n\n\n33\nOn the tenuous authority of United States ex rel. Accardi v. Shaughnessy, 1954, 347 U.S. 260, 268, 74 S.Ct. 499,7 the majority commands that a hearing be held on appellant's application, even though it is incomplete, for the sole reason that 'perhaps the applicant can submit cogent reasons for his failure or refusal to answer the questions.' I agree with the majority that this can be the only purpose for such a hearing since Graham has already supplied all other pertinent information needed by the Coast Guard. However, a moment's reflection reveals the futility, as well as the absence of need for, any hearing or any 'further processing.' Common experience denies that these unanswered questions lend themselves better to oral than to written answers. Indeed, I suggest the contrary is true.\n\n\n34\nMoreover, the record is crystal clear that Graham at all times was-- and indeed still is-- free to submit to the Coast Guard whatever 'cogent reasons' he had for his silence on the critical subject of Communist Party connections. The Coast Guard, scrupulously following its own regulations which explicitly give the Commandant discretion to call for additional information 'under oath in writing or orally,' afforded Graham an opportunity to remedy his initial refusal to answer, and he refused. Hence there has been no want of opportunity to set forth reasons, cogent or otherwise, for his default.\n\n\n35\nThe truth of the matter is that Graham has already explained his refusal on his first questionnaire. Item 15 of the application stated:\n\n\n36\n'(Use this space to explain Items 1 through 14. Show item numbers to which answers apply. Attach a separate sheet if there is not enough space here.)'\n\nIn this space Graham responded:\n\n37\n'On items 12, 13 & 14 I cannot, in good conscience, submit answers because I am positive that the questions are violative of my rights under the Bill of Rights of the U.S. Constitution, in particular, the First Amendment thereof. Furthermore those questions are so vague as to make accurate answers impossible.'\n\n\n38\nHe refused to avail himself of a second opportunity to give anything more than this explanation.8 These answers demonstrate that what he wants is not to give reasons and explanations but to make constitutional and legal arguments which only his lawyers can make for him. Indeed appellant's counsel, who is experienced and sophisticated in the so-called 'loyalty' and 'security' cases, has acted for appellant in carrying on the correspondence with the Coast Guard in its efforts to get answers to questions 12, 13 and 14. See note 1, supra. We cannot regard his responses as the work of an inarticulate layman who needs a hearing in order to make his position known. For this purpose no hearing is required or even useful unless the majority is prepared to read into the regulations and Executive Order or the statute a proviso that oral argument must be allowed to counsel. We should also bear in mind that Graham has not asked for a hearing but for a license.\n\n\n39\nFor these reasons I am unwilling to exercise judicial power to command the Executive Branch to perform the useless formality of a hearing on a patently incomplete application in the face of an unambiguous regulation which contains exactly what the majority says it omits. In refusing 'to submit under oath in writing (as requested by the Commandant) * * * such further information as may be required' Graham has failed to perform a condition precedent to any action by the Coast Guard. In effect the majority opinion would shift to the Coast Guard the burden of fashinoing for itself an investigating agency to discover highly pertinent information concerning an applicant which the applicant can and should promptly supply. In the early critical period of any new national emergency which would call for swift expansion of our Merchant Marine, this majority interpretation would place upon the Coast Guard an intolerable if not an impossible burden never intended by Congress and not warranted in the law relating to licensing procedures of any kind.\n\n\n40\nI suggest that were we confronted with an applicant who, seeking a taxi license, refused to answer an application question as to whether he had ever been convicted of reckless driving or drunken driving, we would summarily admonish the applicant that he was not 'entitled to judicial relief * * * until the prescribed administrative remedy has been exhausted.' See National Council of American-Soviet Friendship, Inc. v. Brownell, supra.9\n\n\n41\nI would affirm the District Court.\n\n\n\n1\n The requirement of a validated document did not apply to vessels of less than 100 tons, but we think the availability of this employment without the document is immaterial\n\n\n2\n This was solely because of the refusal of appellant to answer the three questions. Thus, under date of June 11, 1958, the Commandant wrote appellant when substituting the three questions:\n'Upon receipt of your complete answers to these amended questions and the certification thereof, your application will be reviewed and if the Commandant is unable to satisfy himself at that stage of the administrative process with regard to your eligibility for validation, you will receive a 'statement of reasons,' notice an opportunity for hearing pursuant to regulations promulgated for such purpose.'\n\n\n3\n This Act provides, 40 Stat. 220 (1917), as amended by 64 Stat. 427-428 (1950), 50 U.S.C. 191, 194 (1952), 50 U.S.C.A. 191, 194\n'(50 U.S.C. 191 (1952)). Whenever the President finds that the security of the United States is endangered by reason of actual or threatened war, or invasion, or insurrection, or subversive activity, or of disturbances or threatened disturbances of the international relations of the United States, the President is authorized to institute such measures and issue such rules and regulations--\n'(b) to safeguard against destruction, loss, or injury from sabotage or other subversive acts, accidents, or other causes of similar nature, vessels, harbors, ports, and waterfront facilities in the United States, the Canal Zone, and all territory and water, continental or insular, subject to the jurisdiction of the United States.'\n(50 U.S.C. 194 (1952)). 'The President may employ such departments, agencies, officers, or instrumentalities of the United States as he may deem necessary to carry out the purpose of this chapter.'\n\n\n4\n Executive Order No. 10173, 15 Fed.Reg. 7005, 7007-08 (Oct. 20, 1950), U.S.Code Cong.Service 1950, p. 1661, as amended by Executive Order No. 10277, 16 Fed.Reg. 7537-38 (Aug. 2, 1951) U.S.Code Congressional and Administrative News 1951, p. 1073 and Executive Order No. 10352, 17 Fed.Reg. 4607 (May 21, 1952), U.S.Code Congressional and Administrative News 1952, p. 1056, provides in pertinent part:\n'Subchapter A-- General\n'Part 6-- Protection and Security of Vessels, Harbors, and Waterfront Facilities\n'Subpart 6.10-- Identification and Exclusion of Persons From Vessels and Waterfront Facilities\n'6.10-1 Issuance of documents and employment of persons aboard vessels. No person shall be issued a document required for employment on a merchant vessel of the United States nor shall any person be employed on a merchant vessel of the United States unless the Commandant is satisfied that the character and habits of life of such person are such as to authorize the belief that the presence of the individual on board would not be inimical to the security of the United States: Provided, That the Commandant may designate categories of merchant vessels to which the foregoing shall not apply.\n'6.10-3 Special validation of merchant marine documents. The Commandant may require that all licensed officers and certificated men who are employed on other than the exempted designated categories of merchant vessels of the United States be holders of specially validated documents. The form of such documents, the conditions, and the manner of their issuance shall be as prescribed by the Commandant. The Commandant shall revoke and require the surrender of a specially validated document when he is no longer satisfied that the holder is entitled thereto.'\n\n\n5\n 33 C.F.R. 121.03 (Supp. 1959):\n'Standards. Information concerning an applicant for special validation endorsement for emergency service, or a holder of such endorsement, which may preclude a determination that his character and habits of life are such as to warrant the belief that his presence on board vessels of the United States would not be inimical to the security of the United States, shall relate to the following:\n'(a) Advocacy of the overthrow or alteration of the Government of the United States by unconstitutional means.\n'(b) Commission of, or attempts or preparations to commit, an act of espionage, sabotage, sedition or treason, or conspiring with, or aiding or abetting another to commit such an act.\n'(c) Performing, or attempting to perform, duties or otherwise acting so as to serve the interests of another government to the detriment of the United States.\n'(d) Deliberate unauthorized disclosure of classified defense information.\n'(e) Membership in, or affiliation or sympathetic association with, any foreign or domestic organization, association, movement, group, or combination of persons designated by the Attorney General pursuant to Executive Order (No.) 10450, as amended (5 U.S.C.A. 631 note).'\n\n\n6\n The procedures we have outlined are incorporated in amended regulations adopted after the decision of Parker v. Lester, 9 Cir., 1955, 227 F.2d 708, which struck down the hearing procedures theretofore in effect\n\n\n7\n See Briehl v. Dulles, 101 U.S.App.D.C. 239, 275, 248 F.2d 561, 597 (dissenting opinion of Judge Fahy). Reversed on broader grounds, Kent v. Dulles, 357 U.S. 116, 78 S.Ct. 1113, 2 L.Ed.2d 1204\n\n\n1\n In a letter of February 19, 1958, the Coast Guard's position was made amply clear to Graham's attorneys. That letter states, in part:\n'In view of the fact Mr. Graham had not previously made application for a validated merchant mariner's document an evaluation of his case is necessary * * *. In regard to the evaluation, no further action can be taken until such time as Mr. Graham answers Items 12, 13, and 14 of the questionnaire * * *.'\n\n\n2\n Coast Guard Regulations 121.05(a), (b), 33 C.F.R. 121.05(a), (b) hold that any person seeking a license may make application for it under oath, and 'if an application * * * does not contain replies sufficiently complete in his judgment (Commandant's) for a determination whether the character and habits of life of the applicant are such as to warrant the belief that his presence on board vessels of the United States would not be inimical to the security of the United States, the Commandant, in an effort to avoid additional proceedings through credible explanation or to confine further inquiry to matters tending to prove or disprove unfavorable information, shall notify the applicant to submit under oath in writing or orally such further information as may be required for such determination.' Reg. 121.05(d), 33 C.F.R. 121.05(d). Under this regulation the Commandant requested Graham to submit 'further information' in writing, and appellant refused\n\n\n3\n In a letter to Graham dated June 11, 1958, the Coast Guard slightly amended the questions in issue, and stated:\n'Upon receipt of your complete answers to these amended questions and the certification thereof, your application will be reviewed and if the Commandant is unable to satisfy himself at that stage of the administrative process with regard to your eligibility for validation, you will receive a 'statement of reasons', notice and opportunity for hearing pursuant to regulations promulgated for such purpose.'\n\n\n4\n Great Western Broadcasting Ass'n v. Federal Communications Commission, 1937, 68 App.D.C. 119, 121, 94 F.2d 244, 246 construing applications for a broadcasting license from the F.C.C\n\n\n5\n Briehl v. Dulles, 1957, 101 U.S.App.D.C. 239, 252, 248 F.2d 561, 574: 'There is nothing new or novel about requiring an applicant for a permit or a license to supply pertinent information under oath. Applicants for radio licenses and air route certificates must do so, and applicants for marriage licenses, voting privileges, and business permits must also. And, failing to supply toe required data, the applicant cannot exercise his right.' While this case was subsequently reversed sub. nom. Kent v. Dulles, 1958, 357 U.S. 116, 78 S.Ct. 1113, on the grounds that the questions there propounded were not authorized by the applicable statutes and regulations, it must be remembered that the majority here concede the pertinence of the questions before us. In this light, the quoted words of the Briehl case still retain their vitality and are binding on us\n\n\n6\n Mester v. United States, D.C., 70 F.Supp. 118, 122, affirmed per curiam, 1947, 332 U.S. 749, 68 S.Ct. 70, 92 L.Ed. 336\n\n\n7\n The Accardi case is not in point for it contained no issue of failure to utilize or exhaust administrative remedies. The Supreme Court held simply that a habeas corpus petitioner was entitled to a hearing in the District Court to prove his allegations that the Attorney General's listing of him as an undesirable alien he 'planned to deport,' constituted a direction by the Attorney General to his own Board of Immigration Appeals, thus foreclosing any exercise of the Board's discretion. The complete quotation, part of which is relied upon in the majority opinion, is as follows: 'Of course, the (petitioner) may be unable to prove his allegation before the District Court; but he is entitled to the opportunity to try.' Thus the Accardi holding has no relation to when and for what purpose an administrative hearing is mandatory. It simply restates faimiliar law that a habeas corpus petitioner is entitled to a hearing on allegations which, if true, would entitle him to relief\n\n\n8\n In a letter dated June 24, 1958, Graham stated:\n'In our view questions 13 and 14 as amended are still subject to the defect of vagueness which I noted in the original questionnaire. Further with respect to each of the three questions, 12, 13 and 14, I am of the opinion expressed by me on November 19, namely:\n\"On items 12, 13 and 14 I cannot, in good conscience submit answers because I am positive that the questions are violative of my rights under the Bill of Rights of the United States Constitution, in particular the First Amendment thereof.\"\n\n\n9\n See also Beard v. State Board, 1931, 111 Cal.App. 559, 295 P. 1052; Carville v. Smith, 1947, 211 Ark. 491, 201 S.W.2d 33\n\n\n"} -{"text": "\n126 B.R. 855 (1991)\nIn re Sa'ad EL-AMIN Debtor.\nCarolyn GAUTIER-ADAMS Movant,\nv.\nSa'ad EL-AMIN Respondent.\nBankruptcy No. 90-31491-T, Contested Matter No. 90-463.\nUnited States Bankruptcy Court, E.D. Virginia, Richmond Division.\nFebruary 11, 1991.\n*856 David D. Hopper, Mezzullo & McCandlish, P.C., Richmond, Va., for plaintiff.\nLeonard E. Starr, III, Farmer, Starr & Holmes, Sandston, Va., for debtor/defendant.\nKevin R. Huennekens, Trustee, Maloney, Yeatts & Barr, P.C., Richmond, Va.\nMary E. Harkins, Office of the U.S. Trustee, Richmond, Va.\n\nMEMORANDUM OPINION\nDOUGLAS O. TICE, Jr., Bankruptcy Judge.\nIn this contested matter the debtor's former wife, Carolyn Gautier-Adams, filed a motion seeking relief from the automatic stay so that she might pursue collection of a prepetition divorce judgment against the debtor.\nA preliminary hearing was held on September 12, 1990, at which time the court took evidence and ruled that the motion would be granted in part and denied in part. After the parties' counsel were unable to agree on the form of an order reflecting the court's ruling, Gautier-Adams requested a final hearing which was held on November 21, 1990. For reasons stated in this opinion the movant's motion will be partially granted and partially denied.\n\nFacts\nPrior to filing his bankruptcy petition, the debtor was divorced from Gautier-Adams by a decree entered in the City of Richmond Circuit Court on March 22, 1990. That decree ordered debtor to pay $4,500.00 per month in spousal support and $1,500.00 per month as child support; additionally, debtor was held responsible for maintaining health insurance and payment of all uncovered medical expenses of the couple's child. The decree also found that on January 6, 1990, debtor was in arrears of his support obligations in the amount of $28,000.00.\nAlso prior to the bankruptcy, the circuit court had found debtor in contempt of court for failure to comply with the divorce decree and ordered him to spend six months in jail. The sentence was suspended upon condition that debtor make support payments to Gautier-Adams in a timely manner and bring current all arrearage within 90 days.[1]\n\nBankruptcy Case Proceedings\nThe debtor originally filed a chapter 7 petition on May 11, 1990. The case was converted on the debtor's motion to a case under chapter 11 on June 14, 1990. Gautier-Adams' motion for relief from the automatic stay was filed on July 26, 1990.\nIn her motion, Gautier-Adams asserted that debtor had violated the circuit court contempt order by failing to make April and May 1990 payments in a timely manner, failing to make payment on the prior arrearage, failing to maintain health insurance coverage for the child, and failing to pay for the child's uncovered medical expenses.\nAt the September 12, 1990, preliminary hearing this court heard evidence and made findings that the debtor was required by *857 the divorce decree to pay for the child's insurance and other medical costs, to make monthly payments of $6,000.00 to Gautier-Adams, and to make payment of the $28,000.00 arrearage. It appeared from the argument of debtor's counsel that debtor was seeking to modify the support arrearage determined by the circuit court. The debtor also contested the amount due for payment of medical fees, arguing that the decree did not extend to certain medical treatments.\nAt the preliminary hearing, counsel for Gautier-Adams sought relief from the stay to pursue collection against the debtor, including jail pursuant to the circuit court's contempt ruling.[2] However, this court determined that the debtor's being placed in jail would likely preclude a successful reorganization. I therefore ruled that relief from the stay would be allowed only for the limited purpose of liquidating the amount due; the stay would be continued to prevent any effort at collection from property of the estate. My ruling was to be conditioned on the debtor complying with his medical insurance obligation and continuing to make current support payments.\nAlthough this court had requested counsel for both parties to prepare an order reflecting the ruling of September 12, no order was forthcoming. Instead, in October 1990 Gautier-Adams requested a final hearing on her motion, which was held on November 21, 1990. At this hearing, the debtor testified that he had provided medical insurance for the child. It again appeared that the debtor contested the extent the divorce decree required him to pay medical costs of his daughter, as well as the amount of arrearage. The court took the motion under advisement to allow the parties to submit case authority for their positions. Gautier-Adams filed a brief, but nothing was filed by the debtor.\nGautier-Adams argues that relief from the stay should be granted to allow the state court to determine the extent of the debtor's obligation to pay the daughter's medical expenses and to adjudicate the extent of his support arrearage. In addition, Gautier-Adams argues that relief should be granted to allow her to collect the past due support obligations and to ensure timely future payments. This opinion will address each proposition.\n\nDiscussion And Conclusions\nI. RELIEF TO ADJUDICATE EXTENT OF SUPPORT OBLIGATION AND ARREARAGE\nThe parties differ on their interpretation of the extent of the debtor's obligations under the divorce decree. The debtor's position is that the decree does not cover certain medical expenses, and his counsel has also expressed the hope that this court can modify the amount in arrears. Gautier-Adams contends that these disputes must be resolved in the state court rather than the bankruptcy court.\nSection 362(d) provides in part that the bankruptcy court may grant relief from the automatic stay for \"cause\".[3] The statute does not define what constitutes cause, and that is left for case law to determine. Whether to grant the relief is within the discretion of the bankruptcy court. Barclays-American/Business Credit, Inc. v. Radio WBHP, Inc. (In re Dixie Broadcasting, Inc.), 871 F.2d 1023, 1026 (11th Cir.), cert. denied, ___ U.S. ___, 110 S.Ct. 154, 107 L.Ed.2d 112 (1989); Pursifull v. Eakin, 814 F.2d 1501, 1504 (10th Cir.1987); MacDonald v. MacDonald (In re MacDonald), 755 F.2d 715, 716 (9th Cir.1985).\n*858 In this case there is a dispute both as to the amount of the debtor's support obligations and as to whether they should be modified. The question is whether the existence of either dispute may constitute cause for relief from the stay so that the debtor's former spouse may pursue the matter against debtor in state court.\nSome courts have taken the position that the bankruptcy court is without jurisdiction to modify a debtor's support obligation. See, e.g., Sharp v. Harrell (In re Harrell), 33 B.R. 989, 995 (N.D.Ga.1983), aff'd, 754 F.2d 902 (11th Cir.1985) (bankruptcy court is without jurisdiction to establish or modify a debtor's child support obligation); Brown v. Brown (In re Brown), 46 B.R. 612, 614 (Bankr.S.D. Ohio 1985) (bankruptcy court must abstain from considering changed circumstances to modify amount of nondischargeable support obligation); Hund v. Miller (In re Miller), 36 B.R. 403, 405 (Bankr.N.D. Ohio 1984) (bankruptcy court lacks jurisdiction to modify or vacate support order).\nOther courts take the position that the bankruptcy court has jurisdiction but should abstain from exercising it. See, e.g., Schmiel v. Judge (In re Schmiel), 94 B.R. 373, 376 (Bankr.E.D.Pa.1988) (bankruptcy court should defer to state court to liquidate amount of nondischargeable debt); Baker v. Baker (In re Baker), 75 B.R. 120, 121 (Bankr.D.Del.1987) (bankruptcy court should defer to the expertise of the state's domestic court in the interest of justice and court economy).\nIt is difficult to find a bankruptcy court willing to modify a support obligation and actually say that it is doing so. Admittedly, the cases cited above all arose in the context of \u00a7 523(a)(5) dischargeability proceedings, and those courts that do permit the court to modify support obligations do so in the process of determining whether the obligation is actually in the nature of alimony, support, or maintenance. See Long v. Calhoun (In re Calhoun), 715 F.2d 1103, 1110 (6th Cir.1983) (in a \u00a7 523(a)(5) dischargeability determination bankruptcy court must examine not only the intent of the state court but also determine whether the effect of the state court order is to provide support); Warner v. Warner (In re Warner), 5 B.R. 434, 442 (Bankr.D. Utah 1980) (in a \u00a7 523(a)(5) determination bankruptcy court must consider whether present circumstances have changed an order that originally was in the nature of support).\nRegardless of whether the ground is jurisdictional, however, the courts' restraint in modifying support obligations is illustrative of the reluctance of bankruptcy courts to make determinations on domestic issues. See, e.g., White v. White (In re White), 851 F.2d 170, 173 (6th Cir.1988); MacDonald v. MacDonald (In re MacDonald), 755 F.2d at 719; Boyd v. Robinson (In re Boyd), 31 B.R. 591, 596 (D.Minn.1983), aff'd, 741 F.2d 1112 (8th Cir.1984). The rationale for this reluctance to modify support obligations is that it involves an area of law traditionally left to state court systems since state courts are considered to have expertise in family law matters. MacDonald, 755 F.2d at 717; Baker, 75 B.R. at 121.\nThe same reluctance exists in the context of relief stay matters. See, e.g., White, 851 F.2d 170 (affirming bankruptcy court's grant of relief to allow state court divorce action to proceed); MacDonald, 755 F.2d 715 (affirming bankruptcy court's grant of relief for spouse to pursue modification of support order); In re Hill, 102 B.R. 804 (D.Kan.1989) (affirming bankruptcy court's lifting of the stay to permit spouse to proceed with state court action to modify child support); Harrell v. Harrell, 105 B.R. 751 (Bankr.M.D.Ga.1989) (relief granted allowing spouse to proceed in state court to modify child support obligation and visitation rights); Baker, 75 B.R. at 121 (relief granted to permit divorce action to proceed to determine rights in marital property); In re Kincaid, 55 B.R. 652 (Bankr.W.D.Ky. 1985) (relief granted to allow state court to clarify whether its judgment setting aside property settlement and awarding a sum of money to spouse was retroactive to date of divorce).\nBased upon the authorities cited above I find that the state court system is the better forum to determine the extent of *859 debtor's spousal and child support obligations. Therefore it is held that cause exists to modify the stay to permit Gautier-Adams to proceed against the debtor in the City of Richmond Circuit Court to determine the amount and kind of support owed, and relief from the automatic stay is granted to this extent. It follows that debtor's hoped for modification of his obligations also must be pursued in the circuit court.\nThis leaves the second part of the issue, whether relief should be granted from the stay to permit collection of debtor's prepetition arrearage from property of the estate.\nII. RELIEF TO PERMIT COLLECTION OF PREPETITION ARREARAGE FROM PROPERTY OF THE ESTATE\nGautier-Adams also requests relief from the stay in order to pursue collection efforts from the debtor. In support, she relies upon the decision of the Fourth Circuit Court of Appeals in Caswell v. Lang (In re Caswell), 757 F.2d 608 (4th Cir.1985), which denied confirmation of a chapter 13 plan that included provision for child support arrearage. Gautier-Adams maintains that since support arrearage cannot be included in a plan of reorganization, relief from the stay is warranted to permit collection, even if this includes imposition of the debtor's jail sentence for contempt of the circuit court.\nIn applying the rule in Caswell denying confirmability of chapter 13 plans that include support obligations, several bankruptcy courts have either granted relief from the automatic stay or dismissed the case. See In re Warner, 115 B.R. 233 (Bankr.C.D.Cal.1989) (dismissing chapter 13 case); Bruggen v. Bruggen (In re Bruggen), 82 B.R. 515 (Bankr.W.D.Mo.1987) (granting relief from the stay to enforce child support award in state courts); In re Davidson, 72 B.R. 384 (Bankr.D.Colo.1987) (dismissing three chapter 13 cases); McCray v. McCray (In re McCray), 62 B.R. 11 (Bankr.D.Colo.1986) (granting relief from the stay).\nOther courts have adopted the extreme position that the automatic stay of \u00a7 362 does not apply to enforcement of alimony and child support obligations against the debtor. In re Gomez Molina, 77 B.R. 368 (Bankr.D. Puerto Rico 1987); In re Garrison, 5 B.R. 256 (Bankr.E.D.Mich.1980).\nIn other chapter 13 cases, courts have declined to enjoin proceedings to collect past due support obligations. See Nelson v. Nelson (In re Nelson), 85 B.R. 731 (Bankr.E.D.Va.1988); In re Bernstein, 20 B.R. 595 (Bankr.M.D.Fla.1982).\nThis court is not bound by any of the authorities cited above, save the Fourth Circuit Caswell case. Moreover, further discussion of Caswell is warranted since Gautier-Adams relies upon that decision here for a proposition that was not before the court of appeals.\nIn Caswell, the debtor proposed a chapter 13 plan that created two classes of unsecured creditors, one consisting solely of the debtor's arrearage of $1,400.00 in child support, the other being the rest of his unsecured debts. The plan provided for 100 percent payment of the child support arrearage through the trustee and 25 percent payment on the unsecured obligations. The bankruptcy court denied confirmation of this plan, and the district court affirmed. On appeal to the Fourth Circuit, the debtor asserted that he should be permitted to include child support arrearage in his plan so that he \"may be afforded a comprehensive manner of dealing with all his debts, and his creditors may be assured the highest possible payment.\" Caswell, 757 F.2d at 609. The Fourth Circuit rejected this argument stating: \"To permit child support arrearage to be included in a chapter 13 plan would invite a federal bankruptcy court to alter or modify a state court decision regarding the payment and discharge of the overdue debt. This we cannot countenance.\" Id. at 610.\nCaswell did not involve a motion for relief from the automatic stay, and the court of appeals made no ruling with respect to that issue. However, the opinion contains broad language that \"[t]he bankruptcy code may not be used to deprive dependents, *860 even temporarily, of the necessities of life.\" Id. On the other hand, the bankruptcy code has been designed to provide for the efficient and orderly administration of a chapter 11 debtor's reorganization, and the purpose of the automatic stay is to shield the debtor from collection efforts during the administration of the case. Stringer v. Huet (In re Stringer), 847 F.2d 549, 551-52 (9th Cir.1988).\nIn my view, debtors with domestic support arrearage should not be excluded from the usual bankruptcy process as a matter of law; yet, this is what follows from the rule urged by Gautier-Adams. A better rule would be to make the determination on a case-by-case basis.\nCertainly the statutory scheme suggests the automatic stay applies here to the movant's efforts to collect the debtor's domestic support obligations. In listing types of actions subject to the stay, \u00a7 362(a) does not specifically mention collection of this type of debt; however, in listing what is excepted from the stay, \u00a7 362(b)(2) states that the stay does not apply to collection of support obligations from property that is not property of the estate. 11 U.S.C. \u00a7 362(a), 362(b)(2) (1990). Thus a strong inference is that the stay provisions of \u00a7 362(a) do apply to the collection of domestic support obligations from property of the estate. If Congress had intended otherwise, it would have been a simple matter to resolve in \u00a7 362.\nThis court notes that Gautier-Adams is not completely foreclosed from collection by \u00a7 362. At least in chapter 7 and 11 cases, \u00a7 541(a)(6) expressly excludes from property of the estate \"earnings from services performed by an individual debtor after the commencement of the case.\" 11 U.S.C. \u00a7 541(a)(6).[4] Therefore, by virtue of \u00a7 362(b)(2), a spouse may proceed to collect from income received by the chapter 11 debtor for services performed after the commencement of the case.[5]\nMore importantly, the debtor in this case is maintaining current postpetition payments. There is no indication that Gautier-Adams or the child are being deprived of the necessities of life.\nThese reasons, combined with the almost certain failure of the reorganization in the event the debtor is imprisoned, lead me to conclude that relief from the stay in order to permit Ms. Gautier-Adams to pursue collection of the $28,000.00 support from property of the estate is not appropriate at this point in the case. I therefore find that cause does not exist to lift the stay for that purpose. No ruling need be made at this time whether the $28,000.00 support arrearage may be included in a chapter 11 plan.\nA separate order will be entered.\n\nORDER\nFor the reasons stated in the memorandum opinion entered simultaneously with this order, it is ordered that the movant, Carolyn Gautier-Adams, is granted relief from the automatic stay to determine the extent of the debtor's spousal and child support obligations in the divorce decree entered on March 20, 1990, in the Circuit Court for the City of Richmond. It is further ordered that relief is granted from the automatic stay to permit the movant to seek to modify the debtor's spousal and child support obligations.\nTo the extent that the movant's motion for relief from the automatic stay requests relief from the stay to permit collection of prepetition arrearage from property of the *861 estate or any other relief, the movant's motion is denied. Continuation of the automatic stay with respect to collection of prepetition arrearage is conditioned upon the debtor maintaining timely payments on spousal and child support obligations accruing postpetition. In the event the debtor defaults in payment of these obligations, the court will reconsider the motion at movant's request.\nNOTES\n[1] The date of the circuit court's contempt order is unclear. Gautier-Adams maintains in her motion for relief stay and her brief in support of relief that the order is dated February 7, 1990, nunc pro tunc January 19, 1990. However, the copy of the order attached as Exhibit B to Gautier-Adams' brief in support contains notations which cast doubt on these dates.\n[2] The motion for relief from the stay also requested relief to allow a special commissioner to execute documents to carry out property distribution as ordered in the divorce decree. Since the parties have made no argument regarding this request the court will not address the issue.\n[3] Section 362(d)(1) provides:\n\n(d) On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided under sub-section (a) of this section, such as by terminating, annulling, modifying, or conditioning such stay \u0097\n(1) for cause, including the lack of adequate protection of an interest in property of such party in interest. . . .\n11 U.S.C. \u00a7 362(d)(1).\n[4] This provision does not apply in chapter 13 cases because the chapter 13 estate includes not only \u00a7 541 property, but also postpetition earnings from personal services. 11 U.S.C. \u00a7 1306(a).\n\nNote also that there is a diversity of view as to what extent a chapter 11 debtor's earnings from a sole proprietorship are excluded from being property of the estate. Compare In re Fitzsimmons, 725 F.2d 1208 (9th Cir.1984); with In re Cooley, 87 B.R. 432 (Bankr.S.D.Tex.1988); and In re Herberman, 122 B.R. 273 (Bankr.W.D.Tex. 1990). This court adopts no position at this time.\n[5] It is not clear to what extent she can collect, however, from property purchased with postpetition income, since \u00a7 541(a)(7) includes in property of the estate: \"Any interest in property that the estate acquires after the commencement of the case.\" 11 U.S.C. \u00a7 541(a)(7).\n"} -{"text": "\n729 F.Supp.2d 122 (2010)\nAntione TUCKSON a/k/a Antoine Tuckson, Petitioner,\nv.\nFEDERAL BUREAU OF PRISONS, Respondent.\nCivil Action No. 10-1151 (ESH).\nUnited States District Court, District of Columbia.\nJuly 29, 2010.\n*123 Antione Tuckson, Washington, DC, pro se.\nSherri Lee Berthrong, U.S. Attorney's Office, Washington, DC, for Respondent.\n\nMEMORANDUM OPINION\nELLEN SEGAL HUVELLE, District Judge.\nThis matter is before the Court on Antione Tuckson's petition for a writ of habeas corpus pursuant to 28 U.S.C. \u00a7 2241. (Petition for Writ of Habeas Corpus, July 6, 2010 [dkt. #1]).[1] Petitioner, who is presently incarcerated and serving an aggregate sentence of 26 months' imprisonment that was imposed by the District of Columbia Superior Court, contends that he is entitled to habeas relief because the Federal Bureau of Prisons (the \"Bureau of Prisons\") has not given him the proper sentence credit for two periods of time he spent in custody: (1) between March 18, 2009, and April 13, 2009; and (2) from May 13, 2009, to the present. For the reasons stated herein, neither claim has merit and the petition will be denied.\n\nBACKGROUND\nThe material facts are as follows. In 2005, petitioner was charged with, and ultimately convicted of, receiving stolen property and unauthorized use of a motor vehicle (the \"2005 case\"). See United States v. Tuckson, No. 2005 FEL 1091 (D.C. Super Ct.) (the \"2005 case\"); (see also Federal Respondents' Opp'n to Petitioner's Petition for a Writ of Habeas Corpus, July 27, 2010 (\"Resp.'s Opp'n\"), Ex. 2 [dkt. #4]). On July 6, 2007, while on probation for his conviction in the 2005 case, petitioner was convicted of carrying a pistol without a license and sentenced to 14 months' imprisonment to be followed by a three-year term of supervised release (the \"2007 case\"). See Judgment, United States v. Tuckson, No. 2007 CF2 2872 (D.C.Super.Ct. July 6, 2007) (Resp.'s Opp'n, Ex. 1). Three days later, on July 9, 2007, petitioner's probation in the 2005 case was revoked, and he was sentenced to 15 months' imprisonment to be followed by a three-year term of supervised release. See Judgment, United States v. Tuckson, No. 2005 FEL 1091 (Resp.'s Opp'n, Ex. 2). The court ordered that the 15-month sentence in the 2005 case was to be served \"consecutive to any other sentence being served.\" (Id.) Thus, petitioner ended up with an aggregate sentence of 29 months' imprisonment for the 2005 and 2007 cases to be followed by a three-year term of supervised release. (Resp.'s Opp'n, Ex. 3, at 14.) On September 10, 2008, petitioner was released and began serving his three-year term of supervised release. (Id., Ex. 3, at 9.)\nPetitioner's supervised release was scheduled to expire on September 9, 2011. (Id., Ex. 4, at 2.) However, on March 18, 2009, while still on supervised release, petitioner was arrested and charged with carrying a pistol without a license, impersonating a police officer, and possessing unregistered ammunition (the \"March 2009 case\"). See Alleged Violation Report, United States v. Tucker, No. 2009 CF2 6407 (D.C.Super.Ct.) (Resp.'s Opp., Ex. 4, at 2). On March 19, 2009, petitioner's community supervision officer reported petitioner's arrest and the new charges pending against him to the United States Parole Commission. (Id., Ex. 4.) Petitioner *124 was kept in custody as a result of the March 2009 charges until April 13, 2009. (Id., Ex. 5, at 4-5.) After his release, on April 30, 2009, the Parole Commission issued a warrant charging petitioner with violating the conditions of his supervised release in the 2005 and 2007 cases based on the March 2009 case. (Id., Exs. 6-7.) Petitioner was arrested and detained pursuant to this warrant on May 13, 2010. (Id., Ex. 7, at 2.)\nOn June 4, 2009, while still detained pursuant to the April 30, 2009 warrant, another case was filed against petitioner, charging him with first degree theft based on a theft that had occurred on October 25, 2008 (the \"June 2009 case\"). See United States v. Tuckson, No. 09 CF2 12319 (D.C.Super. Ct. June 4, 2009); (Resp.'s Opp'n, Ex. 9.) On June 24, 2009, petitioner's community supervision officer reported the June 2009 case to the Parole Commission. (Id., Ex. 8.) On August 24, 2009, petitioner was sentenced in the June 2009 case to a term of 16 months' imprisonment to be followed by a 3-year term of supervised release. See Judgment and Commitment Order, United States v. Tuckson, No. 2009 CF2 12319 (D.C.Super.Ct. Aug. 24, 2009) (Resp.'s Opp'n, Ex. 9)\nOn September 15, 2009, the Parole Commission added petitioner's conviction in the June 2009 case to its April 30, 2009 charge that petitioner had violated the conditions of his supervised release in the 2005 and 2007 cases. (Resp.'s Opp'n, Ex. 10.) On October 1, 2009, the Parole Commission revoked petitioner's supervised release in the 2005 and 2007 cases, relying solely on his conviction in the June 2009 case and not on the charges pending in the March 2009 case, and imposed a 10-month term of imprisonment. (Id., Ex. 13.) The sentence had a retroactive commencement date of May 13, 2009, the date petitioner was taken into custody pursuant to the Parole Commission's warrant. (Id.) As a result of his conviction in the June 2009 case and the revocation of his supervised release in the 2005 and 2007 cases, petitioner is now serving an aggregate sentence of 26 months' imprisonment. The Bureau of Prisons has determined that petitioner's full-term release date for this sentence is July 11, 2011. (Id., Ex. [].) The March 2009 case remains pending, with trial set for October 5, 2010. (Resp.'s Opp'n at 8 n. 6.)\nOn July 6, 2010, petitioner filed the pending petition for a writ of habeas corpus, contending that the Bureau of Prisons has failed to give him the credit. On July 9, 2009, the Court issued an order to show cause. (Order, July 9, 2010 [dkt. #2]). On July 27, 2010, respondent filed an opposition to the petition, taking the position that the Petition should be summarily denied. (Resp.'s Opp'n at 1.)\n\nANALYSIS\nPetitioner contends that his projected release date of July 11, 2011, is erroneous because: (1) it fails to give him credit for the time he was in custody between March 18, 2009, and April 13, 2009; and (2) it fails to give him credit starting from his return to custody on May 13, 2009. In neither instance is Petitioner's position correct.\nTime in Custody Between March 18, 2009, and April 13, 2009: Between March 18, 2009, and April 13, 2009, the record establishes that petitioner was in custody solely due to his arrest in the March 2009 case, and not due to anything related to or arising out of any of the three cases for which he is now serving his 26-month sentence. Under applicable law, petitioner is not entitled to credit for time spent in custody on an unrelated case; rather credit is given for \"time spent in custody . . . as a result of the offense[s] for which sentence was imposed.\" D.C. Code \u00a7 24-221.03. *125 Accordingly, petitioner is not entitled to credit for his time in custody between March 18, 2009, and April 13, 2009.[2]\nTime in Custody After May 13, 2009: Petitioner is, in fact, receiving credit for all of his time in custody after May 13, 2009. Based on the 26-month sentence petitioner is presently serving, the Bureau of Prisons has determined his projected release date to be July 11, 2011. (Resp.'s Opp'n, Ex. 3, at 7.) The record establishes that in making that determination, the Bureau used May 13, 2009, as the date petitioner began serving his sentence. (Resp.'s Opp., Ex. 3, at 6-7.) Indeed, if the Bureau were not giving petitioner credit starting from May 13, 2009, his projected release date on a 26-month sentence would have to be after July 11, 2011. Accordingly, petitioner's claim that he is not receiving credit for time served after May 13, 2010, is based on a misunderstanding of the record.\n\nCONCLUSION\nFor the reasons set forth above, petitioner has been awarded all the sentence credit to which he is entitled. Accordingly, petitioner has made no showing that he \"is in custody in violation of the Constitution. . . of the United States,\" 28 U.S.C. \u00a7 2241(c)(3), and his petition for habeas corpus will be denied. A separate Order denying the petition accompanies this Memorandum Opinion.\nNOTES\n[1] Although petitioner named the Federal Bureau of Prisons as the respondent in this case, the only proper respondent is the warden of the prison where the petitioner is being held. Accordingly, the Court will substitute the Warden of the D.C. Correctional Treatment Facility, John Caulfield, as respondent.\n[2] Petitioner cites to various Parole Commission regulations concerning reparole guidelines to support his claim. (Petition at 2.) However, these regulations pertain only to the Parole Commission's determination of an appropriate prison term for a supervised release violation and eligibility for reparole, see D.C. Code \u00a7 24-403(b)(6), and do not bear on the Bureau of Prison's calculation of credit.\n"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 12-6603\n\n\nBRADLEY SHANE SHEPPARD,\n\n Petitioner - Appellant,\n\n v.\n\nWARDEN OF FCI ESTILL,\n\n Respondent \u2013 Appellee,\n\n and\n\nUNITED STATES OF AMERICA,\n\n Respondent.\n\n\n\nAppeal from the United States District Court for the District of\nSouth Carolina, at Aiken. Richard Mark Gergel, District Judge.\n(1:10-cv-03220-RMG)\n\n\nSubmitted: July 26, 2012 Decided: August 2, 2012\n\n\nBefore MOTZ, DAVIS, and FLOYD, Circuit Judges.\n\n\nAffirmed by unpublished per curiam opinion.\n\n\nBradley Shane Sheppard, Appellant Pro Se.\n\n\nUnpublished opinions are not binding precedent in this circuit.\n\fPER CURIAM:\n\n Bradley Shane Sheppard, a federal prisoner, appeals\n\nthe district court\u2019s order construing his post-judgment motion\n\nas a Fed. R. Civ. P. 60(b) motion for relief from the district\n\ncourt\u2019s order dismissing his 28 U.S.C.A. \u00a7 2241 (West 2006 &\n\nSupp. 2012) petition. We have reviewed the record and find no\n\nreversible error. Accordingly, we affirm for the reasons stated\n\nby the district court. See Sheppard v. Warden of FCI Estill,\n\nNo. 1:10\u2013cv\u201303220-RMG (D.S.C. Mar. 19, 2012). Further, we deny\n\nSheppard\u2019s motion for the appointment of counsel. We dispense\n\nwith oral argument because the facts and legal contentions are\n\nadequately presented in the materials before the court and\n\nargument would not aid the decisional process.\n\n\n\n AFFIRMED\n\n\n\n\n 2\n\f"} -{"text": "[Cite as State v. Miley, 2013-Ohio-5673.]\n\n\n COURT OF APPEALS\n RICHLAND COUNTY, OHIO\n FIFTH APPELLATE DISTRICT\n\nSTATE OF OHIO JUDGES:\n Hon. William B. Hoffman, P.J.\n Plaintiff-Appellee Hon. John W. Wise, J.\n Hon. Craig R. Baldwin, J.\n-vs-\n Case No. 13CA47\nMILTON C. MILEY\n\n Defendant-Appellant OPINION\n\n\n\n\nCHARACTER OF PROCEEDING: Appeal from the Richland County Common\n Pleas Court, Case No. 05-CR-85 H\n\n\nJUDGMENT: Affirmed\n\n\nDATE OF JUDGMENT ENTRY: December 4, 2013\n\n\nAPPEARANCES:\n\n\nFor Plaintiff-Appellee For Defendant-Appellant\n\n\nJAMES J. MAYER, JR. MILTON C. MILEY, PRO SE\nProsecuting Attorney Inmate Number 484-425\nRichland County, Ohio c/o Allen Correctional Institution\n P.O. Box 4501\nBy: JILL M. COCHRAN Lima, Ohio 45802\nAssistant Richland County Prosecutor\n38 South Park Street\nMansfield, Ohio 44902\n\fRichland County, Case No. 13CA47 2\n\nHoffman, P.J.\n\n\n {\u00b61} Defendant-appellant Milton C. Miley appeals the judgment entered by the\n\nRichland County Court of Common Pleas denying his motion to vacate sentence.\n\nPlaintiff-appellee is the state of Ohio.\n\n STATEMENT OF PROCEDURAL HISTORY1\n\n {\u00b62} In 2004, Appellant was indicted by the Richland County Grand Jury on 55\n\ncounts in Case No. 2005 CR 0085, including rape, unlawful sexual conduct with a\n\nminor, corrupting another with drugs and disseminating matter harmful to juveniles.\n\n {\u00b63} On May 20, 2005, a jury returned a verdict of guilty as to all counts of the\n\nindictment. On May 31, 2005, the trial court sentenced Appellant to a total prison term of\n\nthirty-five years. The trial court further classified Appellant a sexual predator under R.C.\n\nChapter 2950. An appeal ensued.\n\n {\u00b64} On September 8, 2006, this Court reversed Appellant's convictions and\n\nremanded the matter for a new trial finding the trial court erred in admitting evidence of\n\nAppellant's prior acts. State v. Miley, 5th Dist. Nos.2005\u2013CA\u201367 and 2006\u2013CA\u201314,\n\n2006\u2013Ohio\u20134670.\n\n {\u00b65} On February 8, 2007, the Richland County Grand Jury indicted Appellant\n\non four additional charges alleging recently discovered evidence in Case No. 2007 CR\n\n0163. On July 30, 2007, Appellant filed a motion to dismiss the 2007 indictment on\n\nspeedy trial grounds. The trial court overruled the motion, via Judgment Entry of\n\nSeptember 21, 2007. The trial court then consolidated the cases and scheduled a trial\n\ndate for October 8, 2007.\n\n1\n A rendition of the underlying facts is unnecessary for our disposition of this appeal.\n\fRichland County, Case No. 13CA47 3\n\n\n {\u00b66} On October 9, 2007, Appellant entered a plea of no contest to two of the\n\nadditional charges, counts 58 and 59, of having weapons under disability. Following a\n\ntrial by jury, Appellant was convicted on a total 57 counts, and sentenced to thirty-eight\n\nyears in prison, via two separate entries in Case Nos. 2005 CR 0085 and 2007 CR\n\n0163. Appellant again appealed.\n\n {\u00b67} In State v. Miley, 5th Dist. Nos. 07\u2013CA\u2013113 and 07\u2013CA\u2013114, 2009\u2013Ohio\u2013\n\n570, this Court dismissed Appellant's appeal for lack of a final, appealable order\n\npursuant to the Ohio Supreme Court's decision in State v. Baker, 119 Ohio St.3d 197,\n\n2008\u2013Ohio\u20133330, 893 N.E.2d 163. The entries at issue in the consolidated appeal did\n\nnot contain the manner of conviction; therefore, the entries were not final, appealable\n\norders pursuant to Baker.\n\n {\u00b68} On February 13, 2009, the trial court issued amended sentencing entries.\n\nAppellant filed an appeal of the February 13, 2009 amended sentencing entries. In\n\nState v. Miley, 5th Dist. Nos. 09CA39 and 09CA40, 2009\u2013Ohio\u20134011, this Court first\n\nfound the trial court erred in not dismissing counts 58 and 59 charging having weapons\n\nunder disability because Appellant's speedy trial rights were violated. We affirmed the\n\nremainder of the trial court's decision in relation to Appellant's conviction and sentence.\n\nOn December 2, 2009, the Ohio Supreme declined to accept the case on further\n\nappeal.\n\n {\u00b69} On March 17, 2010, Appellant filed a complaint requesting the issuance of\n\na writ of mandamus and/or procendendo compelling the trial court to issue a final,\n\nappealable order, which complied with State v. Baker, supra. State ex rel. Miley v.\n\nHenson, Richland App. No.2010\u2013CA\u20130032, 2010\u2013Ohio\u20134093. In that case, this Court\n\fRichland County, Case No. 13CA47 4\n\n\nreviewed the entries issued by the trial court on February 13, 2009, finding although this\n\nCourt allowed an appeal based upon the entries to proceed to a conclusion in State v.\n\nMiley, 5th Dist. Nos. 09CA39 and 09CA40, 2009\u2013Ohio\u20134011, the opinion on the merits\n\nwas improvidently issued because the order was not a final, appealable order because\n\nthe order did not contain a finding of guilt. This Court then ordered the trial court to issue\n\nan entry which complied with the dictates of Baker.2\n\n {\u00b610} On December 28, 2010, the trial court filed a Nunc Pro Tunc sentencing\n\nentry in Case No.2005 CR 85H. The Court included amended language \u201cthe defendant\n\nhad been found guilty\u201d by a jury, and also clarified the terms of postrelease control.\n\n {\u00b611} Appellant again filed an appeal to this Court in State v. Miley 5th Dist. No.\n\n2011CA0005, 2011-Ohio-5647. This Court held,\n\n {\u00b612} \"Applying Lester, we find appellant's convictions were upheld on direct\n\nappeal by this Court in State v. Miley, 5th Dist. Nos. 09CA39 and 09CA40, 2009\u2013Ohio\u2013\n\n4011 and the Ohio Supreme Court declined jurisdiction. The convictions were based\n\nupon the entries issued by the trial court on February 13, 2009. Upon review, we find\n\nthe entry in the underlying case fully complied with the requirements of Crim.R. 32(C),\n\nand as set forth in the Lester syllabus. Appellant's 2009 judgment of conviction was\n\nfinal, and any new challenges to it are barred by the doctrine of res judicata. The nunc\n\npro tunc entry by its very nature applies retrospectively to the judgment it corrects and is\n\nnot a new final order from which a new appeal may be taken to again challenge the\n\nunderlying conviction.\n\n\n\n2\n The State suggests this order was limited to the sentencing entry reflecting appellant's\nplea of no contest to the weapons charges in Case No. 2007 CR 163, nevertheless this\nCourt issued the writ in regards to Case No. 2005 CR 85.\n\fRichland County, Case No. 13CA47 5\n\n\n {\u00b613} \"Although Appellant does not challenge on appeal the modified terms of\n\npostrelease control, we note that the doctrine of res judicata still applies to all other\n\naspects of the conviction, including the determination of guilt. State v. Fischer, 128 Ohio\n\nSt.3d 92, 2010\u2013Ohio\u20136238.\"\n\n {\u00b614} On April 1, 2013, Appellant filed a motion to vacate sentence and to\n\nresentence. Via Judgment Entry of May 2, 2013, the trial court overruled the motion to\n\nvacate and resentence. Appellant now appeals, assigning as error:\n\n {\u00b615} \u201cI. THE TRIAL COURT ERRED IN DENYING THE DEFENDANT\n\nAPPELLANT\u2019S MOTION TO VACATE SENTENCE AND RESENTENCE IN\n\nACCORDANCE WITH CRIMINAL RULE 32 (B) VIOLATING HIS RIGHTS TO EQUAL\n\nPROTECTION UNDER THE LAW AND RIGHT TO DUE PROCESS AS GUARANTEED\n\nBY BOTH THE UNITED STATES AND THE OHIO CONSTITUTIONS.\u201d\n\n {\u00b616} In the sole assignment of error Appellant maintains the trial court erred in\n\ndenying his motion to vacate and resentence in accordance with Criminal Rule 32(B).\n\nAppellant alleges he was never properly advised of his rights pursuant to Criminal Rule\n\n32(B); therefore, he must be resentenced accordingly.\n\n {\u00b617} As set froth in the Statement of Procedural History above, Appellant was\n\nsentenced on December 22, 2007. On two occasions this Court found the sentencing\n\nentries relative to Appellant's sentence did not constitute final appealable orders. On\n\nDecember 28, 2010, the trial court issued an amended entry clarifying the terms of\n\npostrelease control and indicating Appellant had been found guilty of the charges and\n\nthe manner of conviction. This Court found further arguments barred by the doctrine of\n\nres judicata. Appellant filed an appeal to this Court. As set forth above, this Court held,\n\fRichland County, Case No. 13CA47 6\n\n {\u00b618} \"Applying Lester, we find appellant's convictions were upheld on direct\n\nappeal by this Court in State v. Miley, 5th Dist. Nos. 09CA39 and 09CA40, 2009\u2013Ohio\u2013\n\n4011 and the Ohio Supreme Court declined jurisdiction. The convictions were based\n\nupon the entries issued by the trial court on February 13, 2009. Upon review, we find\n\nthe entry in the underlying case fully complied with the requirements of Crim.R. 32(C),\n\nand as set forth in the Lester syllabus. Appellant's 2009 judgment of conviction was\n\nfinal, and any new challenges to it are barred by the doctrine of res judicata. The nunc\n\npro tunc entry by its very nature applies retrospectively to the judgment it corrects and is\n\nnot a new final order from which a new appeal may be taken to again challenge the\n\nunderlying conviction.\n\n {\u00b619} \"Although Appellant does not challenge on appeal the modified terms of\n\npostrelease control, we note that the doctrine of res judicata still applies to all other\n\naspects of the conviction, including the determination of guilt. State v. Fischer, 128 Ohio\n\nSt.3d 92, 2010\u2013Ohio\u20136238.\"\n\n {\u00b620} As such, we find Appellant's arguments raised in the motion to vacate and\n\nresentence an attempt to circumvent his prior invocation of the appellate process. We\n\nagain find his present arguments barred by the doctrine of res judicata.\n\n {\u00b621} This case is factually distinguishable from State v. Hunter, 2010-Ohio-657,\n\ncited by Appellant, as Appellant was represented by counsel at the time of sentencing\n\nherein, has failed to fully demonstrate the trial court did not comply with Criminal Rule\n\n32 at the time he was sentenced, and Appellant has previously directly appealed his\n\nsentence to this Court.\n\fRichland County, Case No. 13CA47 7\n\n\n {\u00b622} Accordingly, the May 2, 2013 Judgment Entry denying Appellant's motion\n\nto vacate and resentence is affirmed.\n\nBy: Hoffman, P.J.\n\nWise, J. and\n\nBaldwin, J. concur\n\n ___________________________________\n HON. WILLIAM B. HOFFMAN\n\n\n ___________________________________\n HON. JOHN W. WISE\n\n\n ___________________________________\n HON. CRAIG R. BALDWIN\n\fRichland County, Case No. 13CA47 8\n\n\n IN THE COURT OF APPEALS FOR RICHLAND COUNTY, OHIO\n FIFTH APPELLATE DISTRICT\n\n\nSTATE OF OHIO :\n :\n Plaintiff-Appellee :\n :\n-vs- : JUDGMENT ENTRY\n :\nMILTON C. MILEY :\n :\n Defendant-Appellant : Case No. 13CA47\n\n\n For the reasons stated in our accompanying Opinion, the May 2, 2013 Judgment\n\nEntry of the Richland County Court of Common Pleas is affirmed. Costs to Appellant.\n\n\n\n\n ___________________________________\n HON. WILLIAM B. HOFFMAN\n\n\n ___________________________________\n HON. JOHN W. WISE\n\n\n ___________________________________\n HON. CRAIG R. BALDWIN\n\f"} -{"text": " Karen ANDERSON, Plaintiff-Appellee,\n\n v.\n\n AUTO-OWNERS INSURANCE COMPANY, Defendant-Appellant.\n\n No. 97-3270.\n\n United States Court of Appeals,\n\n Eleventh Circuit.\n\n April 13, 1999.\n\nAppeal from the United States District Court for the Middle District of Florida. (No. 96-247-CIV-OC-10A),\nWilliam Terrell Hodges, Judge.\n\nBefore HATCHETT, Chief Judge, BIRCH, Circuit Judge, and KEITH*, Senior Circuit Judge.\n\n PER CURIAM:\n\n This case requires us to determine whether two separate vehicles traveling in tandem and causing a\n\nsingle automobile accident constitutes one or two \"occurrences\" for purposes of insurance policy\n\nindemnification for the victim. Because we find no definitive Florida precedent for this insurance policy\n\nlanguage interpretation issue, we certify the question to the Supreme Court of Florida.\n\n I. FACTS\n\n On December 7, 1996, appellant Karen Anderson was a passenger in a Mazda Miata convertible\n\nautomobile traveling southbound in the left lane of Interstate 75. A tractor-trailer rig, comprised of a 1987\n\nwhite tractor and a 1986 Great Dane commercial trailer, was also traveling southbound in the left lane. The\n\nMiata pulled into the right lane in order to pass the tractor-trailer rig, but while passing, the rig moved into\n\nthe right lane. To avoid a collision, the Miata swerved off the highway and overturned. Anderson sustained\n\nsevere injuries.\n\n Craig Bishop owned both the tractor and trailer, and insured both through Auto-Owner's Insurance\n\nCompany (Auto-Owner's), under the same policy. Auto-Owner's, pursuant to its contractual duty to defend\n\nBishop, entered into settlement negotiations with Anderson. The negotiations reached an impasse when the\n\n\n *\n Honorable Damon J. Keith, Senior U.S. Circuit Judge for the Sixth Circuit, sitting by designation.\n\fparties disagreed as to the interpretation of portions of the insurance policy language. The limiting language\n\nin dispute reads as follows:\n\n The limit of liability stated in the Declarations is the most we will pay for all damages, including\n damages for expenses, care and loss of services and loss of use as a result of any one occurrence.\n Charging premiums under this policy for more than one automobile does not increase the limit of our\n liability as stated for each occurrence.\n\n(Emphasis added).\n\n Anderson filed a lawsuit in the Circuit Court for the Fifth Judicial Circuit of Florida, seeking a\n\ndeclaratory judgment that would award her the policy limit for both insured vehicles (the tractor and the\n\ntrailer). Auto-Owner's removed the action to federal district court in October of 1996. Ultimately, Auto-\n\nOwner's settled the claim against Bishop, paying Anderson $750,000 in uncontested policy proceeds, and\n\nagreeing to litigate and resolve Anderson's claimed entitlement to a second $750,000 policy payout, in a\n\nseparate action.\n\n II. PROCEDURAL HISTORY\n\n Pursuant to a case management report filed with the district court, both parties agreed that because\n\nthe sole issue required resolution as a matter of law, the court should render its decision through summary\n\njudgment. According to the district court, the issue before it presented a question of first impression in\n\nFlorida.\n\n The district court granted Anderson's motion for summary judgment, determining that although the\n\nrig was responsible for causing one accident, the rig was essentially two \"automobiles,\" the tractor and the\n\ntrailer. Thus, the policy limit of $750,000 was available to Anderson for each of the insured automobiles.\n\nThe district court found that it was reasonable to interpret the above-cited policy language to mean that when\n\ntwo separate vehicles are involved in one single accident, two occurrences exist. The district court further\n\nfound that if Auto-Owner's intended to treat the two separately covered vehicles as a single-covered vehicle\n\nwhen operated in tandem, it could have drafted the policy to achieve that result. Therefore, the district court\n\nawarded Anderson $1,500,000 for her injuries.\n\n\n 2\n\f III. DISCUSSION\n\n In construing an insurance contract, it is well-settled in Florida that \"a court must first examine the\n\nnatural and plain meaning of a policy's language.\" Key v. Allstate Ins. Co., 90 F.3d 1546, 1548-49 (11th\n\nCir.1996). A court should read an insurance policy as a whole, and endeavor to give each provision its full\n\nmeaning and operative effect. Dahl-Eimers v. Mutual of Omaha Life Ins. Co., 986 F.2d 1379, 1381 (11th\n\nCir.1993). Where the existence or nonexistence of coverage is clear from the unambiguous terms of the\n\npolicy, the court must give those terms the effect their plain meaning dictates. See Key, 90 F.3d at 1549.\n\n If, however, the relevant policy language is susceptible to multiple reasonable interpretations, one\n\nproviding coverage and another denying it, the insurance policy is ambiguous. Dahl-Eimers, 986 F.2d at\n\n1381. If an insurance policy is ambiguous, a court must resolve the ambiguity against the drafter of the policy\n\nin favor of coverage. Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-Marine Assoc., 117\n\nF.3d 1328, 1337 (11th Cir.1997). Although courts must avoid \"adding hidden meanings, terms, conditions,\n\nor unexpressed intentions\" to policy provisions, a court should find ambiguity if any real doubt exists as to\n\nthe proper construction of a policy provision when its terms are given their plain meaning. Key, 90 F.3d at\n\n1549.\n\n Auto-Owner's argues vigorously that the district court erred in interpreting the insurance policy as\n\nambiguous and open to several reasonable interpretations. Auto-Owner's claims that its policy's limiting\n\nlanguage covers the type of accident at issue. Further, Auto-Owner's argues that the plain meaning of the\n\npolicy language is simply that \"one occurrence\" is equal to one accident, and maintains that the accident\n\ninvolving the Miata and the rig consisted of only one occurrence. See Weimer v. Country Mutual Ins. Co.,\n\n211 Wis.2d 848, 565 N.W.2d 595 (1997) (holding that the insurer of a dump-truck with an attached trailer\n\nwas not liable to the injured party for the dual amount of the policy limit due to express limiting language in\n\nthe policy to that effect).\n\n\n\n\n 3\n\f Auto-Owner's directs this court to a number of non-binding state court opinions that hold where two\n\nor more related automobiles, insured through the same company, are involved in a single accident the insured\n\nparty is not entitled to recover the policy limit of each automobile involved, but can only recover the policy\n\nlimit of one automobile, or the policy limit of one accident. See, e.g., Shamblin v. Nationwide Mutual Ins.\n\nCo., 175 W.Va. 337, 332 S.E.2d 639 (1985) (holding that the insurer of three vehicles traveling in a convoy,\n\nwhose citizens band (CB) radio communications caused an accident and injuries, was not responsible for\n\npaying the policy limit available on all three automobiles due to express limiting language in the policy); Suh\n\nv. Dennis, 260 N.J.Super. 26, 614 A.2d 1367 (1992) (holding that the insurer of two automobiles was not\n\nliable to the injured party for the policy amount on both cars because of express, limiting language in the\n\npolicy, where employees were racing the cars ultimately causing the accident).\n\n Auto-Owner's additionally claims that the district court's grant of summary judgment for Anderson\n\nwas erroneous because it failed to consider the insurance policy as a whole, giving each provision an\n\noperative effect. See Dahl-Eimers, 986 F.2d at 1381. Auto-Owner's claims that the district court failed to\n\nfollow the principles of construction, failed to attribute the plain and ordinary meanings to the undefined\n\nterms in the insurance policy and failed to consult the dictionary for definitions of purportedly ambiguous\n\nterms. See Berkshire Life Ins. Co. v. Adelberg, 698 So.2d 828, 831 (Fla.1997).\n\n Anderson responds that Auto-Owner's argument that the current common law trend in this\n\ncountry\u2014to disallow the recovery of two policy limits for two automobiles involved in one accident\u2014is\n\nunpersuasive. Anderson rebuts each of the cases Auto-Owner's relies upon through showing that the policy\n\nlanguage contains very specific limiting provisions, unlike the language in Auto-Owner's policy. Each policy\n\nAuto\u2014Owners referenced contained some form of the following explicit language: \"Regardless of the\n\nnumber of ... vehicles involved in the accident ... the company's liability is limited.\" Anderson argues that\n\nAuto-Owner's policy simply does not contain the traditional limiting language that forecloses recovery.\n\n\n\n\n 4\n\f Anderson additionally responds that the plain meaning interpretation of the policy language clearly\n\nprovides coverage in the amount of $750,000 for each of the two vehicles involved in the accident, resulting\n\nin total coverage available to her of $1,500,000. Thus, the issue of whether two separate vehicles involved\n\nin a single accident constitutes one or two occurrences for purposes of insurance policy payout appears to be\n\nan unsettled question of Florida law.\n\n Accordingly, we certify the following question to the Supreme Court of Florida:\n\n CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH\n\nCIRCUIT TO THE SUPREME COURT OF FLORIDA, PURSUANT TO SECTION 25.031, FLORIDA\n\nSTATUTES, AND RULE 9.150, FLORIDA RULES OF APPELLATE PROCEDURE.\n\n TO THE SUPREME COURT OF FLORIDA AND ITS HONORABLE JUSTICES:\n\n This panel of the United States Court of Appeals for the Eleventh Circuit concludes that this case\n\ninvolves an unanswered question of state law that is determinative of this appeal, and we can find no clear,\n\ncontrolling precedent in the decisions of the Supreme Court of Florida. Therefore, we certify the following\n\nquestion of law based on the facts and procedural history recited above, to the Supreme Court of Florida for\n\ninstructions.\n\n Style of case: Karen Anderson, Plaintiff-Appellee, v. Auto-Owners Insurance Company, Defendant-\n\nAppellant, Case No. 97-3270.\n\n Movant: Auto-Owners Insurance Company. See Fla. R.App. P. 9.150(d).\n\n Statement of Facts: We incorporate our statement of facts from above.\n\n Question to be certified to the Supreme Court of Florida:\n\n Whether the tractor-trailer rig should be treated as a single covered automobile, under the policy\n language forming the basis of the present dispute, or whether the single accident resulting in\n Anderson's injuries constituted two occurrences within the meaning of the policy.\n\n The phrasing of this question is not intended to limit the Supreme Court in considering the issue\n\npresented or the manner in which it gives its answer. See Dorse v. Armstrong World Ind., Inc., 798 F.2d\n\n\n\n 5\n\f1372, 1377-78 (11th Cir.1986). The entire record in this case and the briefs of the parties will be transmitted\n\nto the Supreme Court of Florida for assistance in answering this question.\n\n QUESTION CERTIFIED.\n\n\n\n\n 6\n\f"} -{"text": "\n195 N.W.2d 218 (1972)\n188 Neb. 105\nBernard L. STAUFFER, Appellant,\nv.\nC. L. WEEDLUN, Director of the Department of Motor Vehicles of the State of Nebraska, et al., Appellees.\nNo. 38028.\nSupreme Court of Nebraska.\nMarch 10, 1972.\n*220 Phillips & Murphy, Lincoln, for appellant.\nClarence A. H. Meyer, Atty. Gen., James J. Duggan, Asst. Atty. Gen., Lincoln, for appellees.\nHeard before WHITE, C. J., and SPENCER, BOSLAUGH, SMITH, McCOWN, NEWTON, and CLINTON, JJ.\nCLINTON, Justice.\nThe plaintiff, Bernard L. Stauffer, received from the defendant, the Director of the Department of Motor Vehicles of the State of Nebraska, notice under the provisions of section 39-7,130, R.R.S.1943, of revocation of his license to operate a motor vehicle. The ground of revocation was the accumulation of 12 or more point violations under sections 39-7,128 and 39-7,129, R.R.S.1943. The notice of revocation was dated December 30, 1970, and contained the information required by section 39-7,130, R.R.S.1943. On January 7, 1971, plaintiff, pursuant to the provisions of that statute, filed his petition on appeal in the district court for Lancaster County and that court issued a restraining order and stay of revocation which remained in effect until the hearing on the merits. After the hearing the district court held the revocation valid and reinstated the order of revocation. Plaintiff then perfected his appeal to this court. We affirm.\nThe evidence in this case tends to show the present livelihood of the plaintiff depends upon his continued ability to use and drive an automobile in the occupation in which he is engaged. There is no evidence in the record to show the plaintiff in fact was required to physically surrender *221 his license or that he, prior to the trial on the merits, suffered any damage on account of the order of revocation.\nThe principal issue in this case is whether sections 39-7,129 and 39-7,130, R.R.S. 1943, violate the due process clauses of Article I, section 3, Constitution of Nebraska, and the Fourteenth Amendment to the Constitution of the United States. Plaintiff relies upon Bell v. Burson, 402 U.S. 535, 91 S.Ct. 1586, 29 L.Ed.2d 90, decided May 24, 1971, in which the Supreme Court of the United States held, insofar as is pertinent here: (1) Suspension of an issued driver's license involves state action that adjudicates important interest of the licensee and such license may not be taken away without procedural due process; (2) procedural due process, in connection with suspension of a driver's license pursuant to state safety responsibility law, is satisfied by an inquiry limited to the determination whether there is reasonable possibility of judgment in amounts claimed being rendered against the licensee; and (3) except in emergency situations due process requires that when the state seeks to terminate an interest such as a driver's license it must afford notice and opportunity for hearing appropriate to the nature of the case before termination becomes effective. The court in that case held the motor vehicle safety responsibility law of Georgia was unconstitutional because it did not meet the requirements of notice and opportunity to be heard, and the plaintiff here asserts that sections 39-7,129 and 39-7,130, R.R.S.1943, are deficient in these same respects. Section 39-7,129, R.R.S.1943, provides in part: \"Whenever it shall come to the attention of the Director of Motor Vehicles that any person has, as disclosed by the records of such director, accumulated a total of twelve or more points within any period of two years, as set out in section 39-7,128, the director shall summarily revoke ... the license....\" Section 39-7,130, R.R.S.1943, provides that within 24 hours after revocation the Director of the Department of Motor Vehicles shall notify the person of such revocation and this statute prescribes the manner of service and the contents of such notice. This section also provides that if the person fails to surrender the license as directed the Director shall forthwith direct any peace officer or authorized representative of the Director to secure possession of such license.\nThis court has heretofore in a case involving revocation under the motor vehicle Financial Responsibility Act held because an operator's license was not property and because it was a mere privilege the due process clause of the Constitutions did not apply to proceedings for its revocation. Hadden v. Aitken, 156 Neb. 215, 55 N.W.2d 620, 35 A.L.R.2d 1003. Such holding is obviously contrary to Bell v. Burson, supra, and to the extent that Aitken holds the due process provisions do not apply to proceedings for revocation of a motor vehicle driver's license under the motor vehicle Financial Responsibility Act that case is overruled.\nThere still remain however the questions whether (1) due process has been satisfied under the facts in this particular case and (2) whether the holding in Bell v. Burson, supra, is applicable to revocation for point violation under the aforementioned sections of the statutes.\nSince the decision in Bell v. Burson, supra, the Supreme Court of the United States has decided on November 9, 1971, Jennings v. Mahoney, 404 U.S. 25, 92 S.Ct. 180, 30 L.Ed.2d 146, a case arising under the financial responsibility law of the State of Utah. In that case the motorist claimed: \"Utah's statutory scheme falls short of these requirements in two respects: (1) by not requiring a stay of the Director's order pending determination of judicial review, the scheme leaves open the possibility of suspension of licenses without prior hearing; (2) in confining judicial review to whether the Director's determination is supported by the accident reports, and not affording the motorist an opportunity to offer evidence and cross-examine *222 witnesses, the motorist is not afforded a `meaningful hearing.'\" The court stated: \"There is plainly a substantial question whether the Utah statutory scheme on its face affords the procedural due process required by Bell v. Burson. This case does not however require that we address that question. The District Court in fact afforded this appellant such procedural due process. That court stayed the Director's suspension order pending completion of judicial review, and conducted a hearing at which appellant was afforded the opportunity to present evidence and cross-examine witnesses.\" Jennings v. Mahoney, supra, applies here. We hold that under the circumstances of this case the plaintiff was in fact afforded due process.\nWe also choose to place our holding upon an additional ground. A revocation for traffic violations under the point system of our statutes involves a substantially different situation than revocation under the financial responsibility acts. The financial responsibility acts are founded upon the premise the motorist involved in an accident may be at fault. In Bell v. Burson, supra, the court held before the driver's license and registration of the motorist could be revoked there must be a determination made at a hearing \"appropriate to the nature of the case\" that there is a reasonable possibility he is in fact at fault. It is evident that the danger which the court wishes to guard against was an unreasonable possibility of wrongfully depriving the motorist of a valuable entitlement. Under the point system of revocation as established by our statutes, is there a reasonable possibility of error and are the procedural safeguards which are inherent in the system such as afford an opportunity to correct before irreparable damage occurs such errors as might happen? The answers to these questions require an examination of the statutory scheme and an analysis of the possible mistakes against which protection should be afforded under procedural due process.\nSection 39-7,128, R.R.S.1943, prescribes the number of points to be assessed against the licensee for each conviction under the various categories of violations. Section 39-7,129, R.R.S.1943, as already noted, provides for revocation of the license if there is an accumulation of 12 or more points within a 2-year period. Section 39-794, R.R.S.1943, specifies the duties of the tribunals in which the traffic conviction takes place with reference to entry of judgment in such case and together with section 39-795, R.S.Supp., 1969, requires the forwarding of an abstract of the convictions to the Director of the Department of Motor Vehicles. Such abstracts must be upon a standard form prepared and furnished to the tribunals by the Director as authorized and required in section 39-796, R.S.Supp., 1969. These standard forms as they were used in this case are in the record. These set forth the date of violation; the date of hearing; the name and address of the motorist; his date of birth; his operator's license number; the vehicle number; the docket and page number of the proceedings in the court; the judgment of conviction including fine and costs; the plea; a description of the offense; the name of the enforcing agency and the officer's name; the date of any appeal from the judgment or the date the appeal was dismissed if that is the case; and a form of certificate for the judge, clerk, or magistrate to sign.\nEvery motorist is of course charged with notice of the contents of the statutes specifying the points assessed for the various violations. For every offense he has or is afforded an opportunity for hearing. He therefore is charged by law with knowledge that his license is in jeopardy and at all times is charged by law with notice of the state of his record as it pertains to the points charged against him.\nIn the foregoing setting, what are the facts with reference to which error might be made? They would seem to be these: *223 (1) Improper determination of the number of points assessed for a given conviction; (2) incorrectly determining the 2-year period; (3) incorrect addition of the points; and (4) misidentification of the motorist. The information required to be set forth in the abstracts of conviction is entirely adequate to readily determine the matters required. These determinations in the system outlined are simple ministerial matters and are so characterized by the statute, section 39-796, R.S.Supp., 1969, and by this court. Bradford v. Ress, 167 Neb. 338, 93 N.W.2d 17. This characterization is more than a mere euphemism. They truly seem to be merely ministerial. While error might occur in one or more of these items, the likelihood certainly is not very great. There is of course in the system no latitude for discretion nor does it require any factual determinations in the judicial, quasi-judicial, or administrative law sense. There are no inferences to be drawn.\nWe eliminate from consideration, of course, such matters as completely void judgments as would be the case of no process being served upon the motorist and no appearance by him. We also eliminate such things as fraudulent records of conviction or fraudulent abstracts. We are not required to assume on the appeal that any agency of government will indulge in such practices. Cf. Bourjois, Inc. v. Chapman, 301 U.S. 183, 57 S.Ct. 691, 81 L.Ed. 1027.\nIf errors do occur, or if there should be fraud, or an absolutely void judgment, what remedy is afforded? Section 39-7,130, R.R.S.1943, provides for an appeal from an order of revocation to the district court and authorizes the judge to stay the order of revocation pending the appeal. This court has also held that the procedures authorized by section 60-420, R.R.S.1943, are available. Durfee v. Ress, 163 Neb. 768, 81 N.W.2d 148. Both procedures contemplate a full evidentiary hearing. Under the statutes no fact finding of the Director is binding on the courts. In this context is due process lacking under sections 39-7,129 and 39-7,130, R.R.S.1943? We believe not.\nWe think that in a very real sense the essential facts have been determined in the judicial proceedings in connection with each conviction. In a very real sense the Director acts only ministerially. The result\u0097the revocation\u0097flows from the operation of the statute upon the already judicially determined facts, that is, the series of convictions of traffic offenses. Of these the motorist already has knowledge. Of their effect point-wise he is charged by law with knowledge just as with any other case of knowledge of the law. These circumstances do, in our opinion, make the procedures applicable to revocation of a driver's license for an accumulation of points for traffic offense conviction clearly distinguishable from revocation under the financial responsibility law as in Bell v. Burson, supra. The financial responsibility statutes in effect create without any hearing a presumption of fault. This, if we understand the footing of Bell v. Burson, supra, is their constitutional deficiency. Such a situation does not exist in the case here involved. We hold that under the statutory scheme of Nebraska no notice and hearing were required before the issuance of the order of revocation.\nThe Supreme Court of the United States, in Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287, has recently said: \"The extent to which procedural due process must be afforded the recipient is influenced by the extent to which he may be `condemned to suffer grievous loss,' Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 168, 71 S.Ct. 624, 95 L.Ed. 817 (1951) (Frankfurter, J., concurring), and depends upon whether the recipient's interest in avoiding that loss outweighs the governmental interest in summary adjudication. Accordingly, as we said in Cafeteria & Restaurant *224 Workers Union, etc. v. McElroy, 367 U.S. 886, 895, 81 S.Ct. 1743, 6 L.Ed.2d 1230 (1961), `consideration of what procedures due process may require under any given set of circumstances must begin with a determination of the precise nature of the government function involved as well as of the private interest that has been affected by governmental action.' See also Hannah v. Larche, 363 U.S. 420, 440, 442, 80 S.Ct. 1502, 4 L.Ed.2d 1307 (1960).... It is true, of course, that some governmental benefits may be administratively terminated without affording the recipient a pre-termination evidentiary hearing.\" See cases cited in note 10, p. 263. That court has long recognized that the requirements of due process may vary according to the nature of the interest to be protected and the likelihood of harm to the individual. In Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 315, 70 S.Ct. 652, 657, 94 L.Ed. 865, the court, quoting from another case, said: \"`The criterion is not the possibility of conceivable injury but the just and reasonable character of the requirements, having reference to the subject with which the statute deals.'\" See, also, 16A C.J.S. Constitutional Law \u00a7 628b, p. 856. The due process of law provisions do not prevent an administrative agency in every case from issuing an order affecting the private rights of an individual without formal notice and hearing before such order. The due process requirements may under some circumstances be satisfied if full hearing in the courts is available after the administrative order with judicial power to stay irreparable injury pending court hearing. Parker v. Board of Barber Examiners (La.App.), 84 So.2d 80.\n\"Apart from statute, the necessity of notice and hearing in an administrative proceeding depends on the character of the proceeding and the circumstances of the case; insofar as generalization is possible, it may be stated as a general rule that notice and hearing are required where an administrative body acts in a quasi-judicial manner but not where its actions are executive, administrative, or legislative.\" 73 C.J.S. Public Administrative Bodies and Procedure \u00a7 130, p. 452.\nUnder the Nebraska scheme the Director acts ministerially. The likelihood of error is small. The compelling public interest in removing from the highways those drivers whose records demonstrate unsafe driving habits outweighs the need for notice and hearing prior to the order to protect the individual against mistake. In this connection the matter must be viewed not as an isolated case but in the collective aspect, that is, the removal of many such drivers from the highways.\nCases such as Francisco v. Board of Dental Examiners (Tex.Civ.App.), 149 S. W.2d 619, where summary revocation of a dental license followed upon a conviction of a felony involving moral turpitude, are distinguishable upon at least two grounds. First, in the cited case there was the question of whether the felony involved moral turpitude and this requires a separate determination or judgment apart from the conviction itself, and second, the conviction in that case would not have any necessary and immediate relationship to the competence of the individual to practice dentistry hence no direct immediate relationship to the public health. On the other hand, in our case the Legislature has determined, and we believe reasonably so, that a habit of repeated traffic violations has a definite relationship to the fitness of the driver to operate a motor vehicle and hence to the compelling public interest in safety on the highways.\nIf a ministerial error has occurred or if there is a fraudulent abstract a notice of revocation is void and this may be determined on the appeal. There is in fact no final \"taking\" until the court review has occurred or the motorist has acquiesced by failing to take an appeal. The following we think is pertinent. Forkosch, Constitutional Law (2d Ed.), \u00a7 191, p. 208, *225 says: \"The concept of procedural due process, as we have seen, gives to every person the constitutional right to notice and hearing before his life, liberty or property is finally taken. To this point we have assumed that the agency, in its proceedings, is `taking' because its findings of fact are binding upon the judiciary when reviewed. Regardless of this finality, and even if it is or is not present, a person is entitled only to one fair hearing (adequate notice is assumed) at some point before a final taking. This fair hearing may or may not be in an agency proceeding, as there may be a court or judicial one instead or in addition. Obviously this latter proceeding accords with procedural due process; if the former, then the question is whether procedural due process was given therein. We are not here concerned with substantive rights * * *, so that if all of the required procedural rights are obtained either in the agency, or in the courts on review, or in a combination of both, before a final taking occurs, then no procedural violation has occurred.\"\nThe Court of Appeals of Kentucky, in Commonwealth, Dept. of Public Safety v. Thomas (Ky.App.), 467 S.W.2d 335, may have come to a different conclusion than have we as to the scope of Bell v. Burson, supra, for it has applied the principles of that case to void that State's \"point\" statute because of lack of provision for prerevocation hearing. There are, however, some significant differences between our and the Kentucky statute. There the administrative agency was entrusted with discretion both as to whether the license should be suspended upon conviction and also as to the period of suspension. The details of the statutory scheme are not set forth. We think, however, that the element of discretion is sufficient to clearly distinguish the case. If discretion is to be exercised, it must be based upon some factual basis if it is not to be purely arbitrary and this would of course require notice and hearing.\nAffirmed.\n"} -{"text": "628 F.2d 546\nAndrew OWENS, Appellant,v.Harold J. CARDWELL, Warden, Attorney General, State ofArizona, Appellees.\nNo. 79-2566.\nUnited States Court of Appeals,Ninth Circuit.\nArgued and Submitted July 9, 1980.Decided Sept. 22, 1980.\n\nAtmore Baggot, Phoenix, Ariz., for appellant.\nJessica L. Gifford, Asst. Atty. Gen., Phoenix, Ariz. (argued), William J. Schafer, III, Asst. Atty. Gen., Phoenix, Ariz., on brief, for appellees.\nAppeal from the United States District Court for the District of Arizona.\nBefore WRIGHT, GOODWIN and WALLACE, Circuit Judges.\nPER CURIAM.\n\n\n1\nThe issue in this appeal by a state prisoner is whether the district court erred in denying his petition for 28 U.S.C. \u00a7 2254 relief. Owens sought an evidentiary hearing to determine the constitutional validity of a 1948 conviction which he alleged had been used to enhance his prison sentence in violation of United States v. Tucker, 404 U.S. 443, 92 S.Ct. 589, 30 L.Ed.2d 592 (1972). Our examination of the record satisfies us that there was no need for an evidentiary hearing in the district court.\n\n\n2\nOwens is serving a 21 to 25 year sentence for kidnapping with intent to rape. After exhausting his Arizona state court appeals from his kidnapping conviction, Owens applied for post-conviction relief in Arizona state court. Because the sentencing judge had retired when Owens brought his post-conviction claim, another Arizona judge was assigned. Owens asserted, among other things, that the Arizona judge who sentenced him had improperly considered a 1948 murder conviction obtained when Owens was not represented by counsel. The new judge, the Honorable C. Kimball Rose, conducted an evidentiary hearing, reviewed the record of the trial and sentencing, and received memoranda from the parties. Judge Rose determined that the sentencing judge had been aware of the Louisiana conviction, and that no inquiry had been made concerning its constitutional validity. But he denied Owens' petition upon finding that the trial judge would have imposed the same sentence even if he had known that the 1948 conviction was unconstitutional.1\n\n\n3\nWhen Owens sought habeas corpus in federal district court, the court reviewed the record of Owens' trial and sentencing, the findings and conclusions of Judge Rose, and briefs submitted by the parties. The district judge dismissed Owens' petition.2\n\n\n4\nFarrow v. United States, 580 F.2d 1339 (9th Cir. 1978), notes that three factors are required to establish Tucker error: \"(1) a prior conviction rendered invalid by Gideon ; (2) the sentencing judge's mistaken belief that the prior conviction was valid; and (3) enhancement of the defendant's sentence because of it.\" 580 F.2d at 1345.\n\n\n5\nJudge Rose found that the sentencing judge did not use Owens' 1948 conviction to enhance his sentence. The district court was bound to accept that finding if (1) Judge Rose had provided a full and fair hearing on the factual issue and (2) the record of the hearing fairly supported that finding. Stone v. Cardwell, 620 F.2d 212 (9th Cir. 1980), see 28 U.S.C. \u00a7 2254(d).\n\n\n6\nOwens does not contend that he did not receive a full and fair hearing on the issue of enhancement. To the extent that he challenges the state court hearing on that issue itself, he argues only that Judge Rose should have inquired into the constitutional validity of the Louisiana conviction or resentenced him without regard to it. Owens relies on Farrow for this assertion, but that reliance is misplaced.\n\n\n7\nOwens received no less a hearing from Judge Rose upon his state post-conviction petition than Farrow requires of federal courts presented with \u00a7 2255 Tucker motions.3 Under Farrow, if the district court finds that the prisoner's sentence would not have been different even if the sentencing judge had treated a challenged prior conviction as invalid, the district court need not hold a hearing to determine the constitutional validity of the prior conviction nor order a resentencing. 580 F.2d at 1345-46. Owens has failed to raise any meritorious challenge to the adequacy of the hearing he received from Judge Rose. The record reveals no fault with the hearing.\n\n\n8\nThe principal issue remaining is whether the record supports Judge Rose's conclusion that the original sentence would not have been different even if the sentencing judge had treated the prior conviction as invalid under Gideon. It does.\n\n\n9\nThe record which was before Judge Rose showed that the sentencing judge was concerned with the reliability and relevance of the 1948 Louisiana conviction. He barred use of the conviction at trial. The sentencing judge was aware that the trial judge who sentenced Owens in 1948 later became governor and commuted Owens' sentence before he had served five years of a life term. At the sentencing hearing following Owens' 1973 conviction, Owens' attorney put him on the stand and explored the details of the 1948 case and the commutation. Owens testified that the governor came to the penitentiary and told him there had been mistakes and that others may have been responsible for the murder. The record before Judge Rose also showed that Owens was convicted of robbery in 1967.4 At the sentencing hearing, attorneys for both parties examined Owens regarding the 1967 conviction.\n\n\n10\nThe record before Judge Rose shows that the sentencing judge was aware of infirmities in the 1948 conviction. Nothing in the record indicates that he gave it any weight whatsoever in imposing sentence. Other sentencing factors were properly before him. He could take them into account. The record fairly supports the finding that the 1948 conviction was not used to enhance Owens' sentence.\n\n\n11\nWe, therefore, find that the district court was not required to conduct an evidentiary hearing to review Owens' sentence. It properly held that no Tucker error occurred.\n\n\n12\nOther alleged errors do not require discussion.\n\n\n13\nAffirmed.\n\n\n\n1\n Judge Rose made a finding that there is no reasonable probability that the Louisiana conviction was used as the basis for the sentence imposed or that it was used as enhancement resulting in the sentence imposed\n\n\n2\n The district court mistakenly stated that Owens had received the minimum sentence allowed by statute. The statute allowed a minimum of 20 years, and Owens received 21 to 25. The error is immaterial because the real question is whether the sentencing judge would have sentenced Owens differently if he had known the 1948 conviction was one that would be found defective under Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963)\n\n\n3\n We do not reach the question whether a lesser standard for review under these circumstances is appropriate under \u00a7 2254 because clearly the case meets the standards set by Farrow pursuant to \u00a7 2255\n\n\n4\n Though Owens claims that use of the 1967 conviction also violated Tucker, he never raised the claim in the state proceeding or before the district court. Moreover, the record specifically contradicts his assertion that he was not represented by counsel at the time of the 1967 conviction\n\n\n"} -{"text": "544 U.S. 1022\nSUMBRYv.SHARP ET AL.\nNo. 04-8952.\nSupreme Court of United States.\nMay 2, 2005.\n\n1\nC. A. D. C. Cir. Certiorari denied.\n\n"} -{"text": "\n856 N.E.2d 389 (2006)\n222 Ill.2d 218\n305 Ill.Dec. 584\nTRI-G, INC., et al., Appellees,\nv.\nBURKE, BOSSELMAN & WEAVER et al., Appellants.\nNos. 99584, 99595.\nSupreme Court of Illinois.\nJune 22, 2006.\nRehearing Denied September 25, 2006.\n*394 Michael L. Shakman, Edward W. Feldman, Diane F. Klotnia and Thomas M. Staunton, of Miller, Shakman & Hamilton, L.L.P., Chicago, for appellant and appellee Burke, Bosselman & Weaver.\nDaniel A. Edelman, Cathleen M. Combs, James O. Latturner, Francis R. Greene, of Edelman, Combs, Latturner & Goodwin, L.L.C., Chicago, and Thomas W. Gooch, Wauconda, for appellee and appellant Tri-G, Inc.\nThomas P. McGarry, Stephen R. Swofford and Terry Wand, of Hinshaw & Culbertson, L.L.P., Chicago, for amicus curiae The Illinois Association of Defense Trial Counsel.\nKimball R. Anderson, David E. Koropp and Linda T. Coberly, of Winston & Strawn, L.L.P., Chicago, for amici curiae The Illinois Civil Justice League et al.\nJustice KARMEIER delivered the judgment of the court, with opinion:\nTri-G, Inc. (Tri-G), brought a legal malpractice action in the circuit court of McHenry County against the law firm of Burke, Bosselman & Weaver (Burke) to recover damages it sustained as a result of Burke's failure to prosecute a complaint Tri-G had previously filed against Elgin Federal Bank (Elgin Federal). Following a trial on the merits, a jury found that Burke had been negligent in handling Tri-G's case against Elgin Federal and that but for that negligence, Tri-G would have recovered $1,168,775 in compensatory damages and an equal sum in punitive damages from Elgin Federal. Accordingly, the jury returned a verdict in favor of Tri-G and against Burke for $2,337,550.\nAfter the circuit court entered judgment on the jury's verdict, Burke appealed. Tri-G cross-appealed. The appellate court affirmed the judgment in part, reversed in part, and remanded the cause to the trial court for further proceedings. 353 Ill. App.3d 197, 288 Ill.Dec. 580, 817 N.E.2d 1230. In so ruling, the appellate court expressly rejected Burke's arguments that the award of punitive damage to Tri-G was either improper as a matter of law or excessive in light of the evidence adduced at trial. It held that Illinois law permits a legal malpractice plaintiff to receive an award of lost punitive damages from a defendant attorney and concluded that the punitive damages award made in this case was justified by the evidence. 353 Ill. App.3d at 232, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nBurke and Tri-G each filed petitions for leave to appeal. 177 Ill.2d R. 315(a). We allowed their respective petitions and consolidated the appeals for review. The primary issue before us is whether the appellate court erred in upholding the award of lost punitive damages to Tri-G. For the reasons that follow, we hold that it did. The judgment of the appellate court is therefore affirmed in part and reversed in part.\nThe basic principles governing legal malpractice claims are well established. To prevail on a legal malpractice claim, the plaintiff client must plead and prove that the defendant attorneys owed the client a duty of due care arising from the attorney-client relationship, that the defendants breached that duty, and that as a proximate result, the client suffered injury. Northern Illinois Emergency Physicians v. Landau, Omahana & Kopka, Ltd., 216 Ill.2d 294, 306, 297 Ill.Dec. 319, 837 N.E.2d 99 (2005).\nThe injury in a legal malpractice action is not a personal injury, nor is it the attorney's negligent act itself. Rather, it is a pecuniary injury to an intangible property interest caused by the lawyer's negligent *395 act or omission. The fact that the attorney may have breached his duty of care is not, in itself, sufficient to sustain the client's cause of action. Even if negligence on the part of the attorney is established, no action will lie against the attorney unless that negligence proximately caused damage to the client. The existence of actual damages is therefore essential to a viable cause of action for legal malpractice. Northern Illinois Emergency Physicians v. Landau, Omahana & Kopka, Ltd., 216 Ill.2d at 306-07, 297 Ill. Dec. 319, 837 N.E.2d 99.\nThe theory underlying a cause of action for legal malpractice is that the plaintiff client would have been compensated for an injury caused by a third party, absent negligence on the part of the client's attorney. Where the alleged legal malpractice involves litigation, no actionable claim exists unless the attorney's negligence resulted in the loss of an underlying cause of action. If the underlying action never reached trial because of the attorney's negligence, the plaintiff is required to prove that but for the attorney's negligence, the plaintiff would have been successful in that underlying action. A legal malpractice plaintiff must therefore litigate a \"case within a case.\" See Cedeno v. Gumbiner, 347 Ill.App.3d 169, 174, 282 Ill.Dec. 600, 806 N.E.2d 1188 (2004).\nThe \"case within a case\" on which Tri-G's malpractice claim is predicated was Tri-G's cause of action against Elgin Federal. That cause of action arose from certain construction loans Tri-G received from the bank to build residential homes in a development known as Huntington Point. Tri-G's complaint, filed in 1981, alleged breach of contract, common law fraud, and violation of the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (Ill.Rev.Stat.1983, ch. 121\u00bd, par. 261 et seq. (now 815 ILCS 505/1 et seq. (West 2002))).\nTrial of the case was postponed for several years, during which time Tri-G was represented by a succession of law firms. Eventually, a May 11, 1987, trial date was set by the court. Approximately three months before the trial was scheduled to begin, Tri-G retained Burke to handle the case. The attorney from Burke assigned to represent Tri-G did not file an appearance, however, until May 4, 1987. When the case was called for trial as scheduled the following week, the attorney answered \"not ready.\"\nBecause the attorney was not prepared to proceed, the trial court dismissed Tri-G's case with prejudice. Tri-G, still represented by Burke, appealed the dismissal. On November 13, 1987, the appellate court dismissed the appeal sua sponte on the grounds that Tri-G had failed to comply with a previous order of that court.\nTri-G subsequently replaced Burke with new legal counsel, who filed a second complaint against Elgin Federal. The new complaint alleged the existence of oral construction loan contracts between the parties, numerous breaches by Elgin Federal of those contracts, and fraud. On Elgin Federal's motion, the circuit court dismissed the complaint based on res judicata. The court also imposed sanctions against Tri-G and its attorneys. The appellate court affirmed. Tri-G, Inc. v. Elgin Federal Savings & Loan Ass'n, 182 Ill.App.3d 357, 131 Ill.Dec. 418, 538 N.E.2d 793 (1989).\nWith the failure of its substantive claims against Elgin Federal, Tri-G looked to Burke for recourse. In 1989 it filed a legal malpractice action against the law firm. It voluntarily dismissed that action in 1994 and refiled it in 1995. Burke then moved to dismiss the complaint. Although Burke's motion was allowed by the circuit *396 court, the appellate court reversed and remanded. Tri-G, Inc. v. Burke, Bosselman & Weaver, No. 2-96-0980, 289 Ill. App.3d 1142, 239 Ill.Dec. 303, 713 N.E.2d 834 (1997) (unpublished order under Supreme Court Rule 23).\nTri-G's original and amended complaints against Burke each consisted of a single count claiming negligence. In its original complaint, Tri-G alleged that Burke was negligent for (1) failing to file an appearance until May 4, 1987; (2) failing to advise Tri-G's witnesses and discuss their testimony in advance of depositions; (3) failing to attend certain depositions; (4) failing to properly prepare the case for trial; and (5) failing to seek a voluntary nonsuit on the date of trial.\nThe 1981 complaint against Elgin Federal was attached as an exhibit to the malpractice complaint. The 1981 complaint contained 10 counts, claiming breach of contract, common law fraud, and violations of the Consumer Fraud Act (Ill.Rev.Stat. 1981, ch. 121\u00bd, par. 261 et seq. (now 815 ILCS 505/1 et seq. (West 2002))). It alleged that in 1976, Tri-G was the general contractor for a residential real estate development in McHenry County known as the Huntington Point subdivision. First National Bank of Woodstock (First National) owned Huntington Point as the trustee of a land trust with Tri-G as beneficiary. In 1978, Elgin Federal made construction loans to Tri-G to build residential homes on vacant lots in Huntington Point, specifically enumerating 13 lots. Tri-G entered into a contract with Chain of Lakes Group (CLG), in which CLG agreed to complete construction on eight of those lots, specifically 7, 24, 25, 30, 32, 35, 36, and 37.\nCounts I through VII of Tri-G's complaint asserted claims for breach of contract regarding lots 7, 24, 25, 30, 32, 36, and 37, respectively. Tri-G alleged that Elgin Federal breached its construction loan agreements by making payouts to CLG from the construction loans without the written authorization of Tri-G and allowing CLG to submit new contractor's affidavits that Elgin Federal used as a basis for additional payouts in excess of the amounts stated in the original contractor's affidavits submitted by Tri-G.\nConcurrent with the construction loans, Elgin Federal made a land loan to Tri-G for improvements to land surrounding the lots. In count VIII of its complaint, Tri-G alleged that Elgin Federal breached that land loan agreement by withholding payouts owed to Tri-G after it entered into the contract for CLG to complete construction on the eight above-listed lots.\nIn count IX, Tri-G alleged that Elgin Federal committed common law fraud by: (1) making unauthorized payouts on the construction loans for lots 16, 17, 26, 28, and 31; (2) withholding money from Tri-G at the time of closing on lots 16, 26, 28, 30, and 37; (3) withholding from Tri-G the fact that Elgin Federal had made unauthorized disbursements to CLG; (4) allowing CLG to substitute new contractor's affidavits for the original contractor's affidavits with respect to the construction loans on all 13 lots; and (5) misleading Tri-G into believing that an accounting would be done once all of the lots had been closed upon, at which time Tri-G would receive monies withheld by Elgin Federal. In pleading damages under this count, Tri-G itemized the damages incurred with respect to the construction loans on lots 7, 17, 24, 25, 26, 28, 30, 31, 36, and 37. Tri-G further alleged that it was damaged by unauthorized payouts from the land loan it secured from Elgin Federal in the amount of $30,000. Tri-G claimed a total of $139,159 in compensatory damages and $140,000 in punitive damages. In count X, Tri-G's allegations under the Consumer *397 Fraud Act essentially mirrored those of the common law fraud count.\nDiscovery ensued. In January 2002, one month prior to trial, Tri-G was allowed to amend the malpractice complaint to add an allegation that Burke was negligent for failing to review and amend the 1981 complaint against Elgin Federal. Also, the trial court denied Burke's motion in limine to exclude punitive damages. The court reasoned that if the jury assessed punitive damages against Elgin Federal in the underlying case, that amount would be compensatory damages to Tri-G in the malpractice action.\nDuring the trial, Irene Geschke testified that in June of 1976, she and her husband, Clarence, purchased a 16.5-acre tract of land, intending to develop it as the Huntington Point subdivision. Irene was working as a real estate broker. Irene and Clarence obtained a loan from First National to purchase the property and placed it in a land trust with First National as trustee and Irene and Clarence as beneficiaries. Irene and Clarence formed Tri-G as general contractor for the development of the property. Clarence was the sole shareholder of Tri-G and Irene was principally responsible for Tri-G's operation. Tri-G divided Huntington Point into 46 lots, 45 of which were for single-family homes.\nIrene recounted that in 1977, she approached Dennis Neubert of Elgin Federal regarding financing for Tri-G. Tri-G subsequently obtained a loan from Elgin Federal to pay off the loan from First National. The loan was secured by the then-remaining 38 unsold Huntington Point lots, 37 of which were planned for single-family homes. Irene also spoke with Neubert about financing for the construction of homes on Huntington Point. Neubert told Irene that Elgin Federal would finance the construction.\nTri-G introduced into evidence a one-page document from Elgin Federal entitled \"Construction Loan Procedure,\" which dealt with such matters as Elgin Federal's inspection of construction sites and its payout of loan proceeds to subcontractors and suppliers of materials. Tri-G also introduced into evidence several loan commitment letters from Elgin Federal that set forth specific terms for each construction loan, e.g., the loan amount and the rate of interest. According to Irene, the documents, which purported to memorialize the loan agreements, actually included only some of the loan terms. Additional terms were agreed to orally.\nThe oral terms identified by Irene were as follows: (1) payout from loans would be made only upon Tri-G's written request; (2) each loan was separate so that funds advanced on one loan could not be used for construction on a lot that was subject to a different loan; (3) although interest on a particular loan would begin accruing once funds were disbursed, principal and interest payments on that loan would not be due until all the funds on that loan had been paid out; and (4) the purchaser of a completed home would be given a loan with the same interest rate and terms, i.e., 9% interest and no points, as the construction loan Tri-G had obtained for that house. Finally, Irene and Neubert agreed that if a subcontractor or supplier of materials required more funds than were originally stated in Tri-G's affidavit itemizing the costs for constructing the home, Tri-G was required to submit an amended affidavit before the additional funds would be disbursed. According to Irene, the loan agreements contained no provision for when payouts could be terminated by Elgin Federal.\nIrene testified that Tri-G's dealings with Elgin Federal initially went smoothly. Although she and Neubert agreed that interest *398 payments on any particular loan would not be due until the proceeds had been entirely paid out, Elgin Federal initially billed her for interest, and she paid the interest as billed. Also, when Tri-G needed a payout from one of its loans, Elgin Federal would issue the payout within three days after Tri-G had submitted a payout authorization.\nTri-G built and sold homes on eight of the Huntington Point lots. In each case, in accord with the construction loan agreements, the buyer of the home received a loan from Elgin Federal with the same interest rate and terms as Tri-G's construction loan.\nIn late 1977, Neubert left Elgin Federal and Edward Swartz assumed responsibility for the Huntington Point loans. Around this time, Tri-G began having difficulties with Elgin Federal. For example, Elgin Federal's response to payout requests slowed down in early 1978. According to Irene, the slowdown caused one of Tri-G's suppliers, Hines Lumber, to file a lien in February 1978. Irene complained to Swartz about the slowdown in payouts, and Swartz responded that the delay was due to his having just taken over the construction loans from Neubert. Irene stopped paying interest in March 1978.\nDuring Irene's testimony, the trial court, over Burke's objection, allowed Tri-G to introduce evidence of breach of contract and fraud regarding lots not specified in the 1981 complaint. The purpose of this evidence was to establish the existence of a scheme alleged to exist with respect to the lots that were specified in the 1981 complaint.\nIrene testified that on April 17, 1978, Swartz sent Tri-G several letters demanding regular monthly payments of principal and interest under three of the construction loans, even though the proceeds had not been paid out entirely on any of these loans. Irene testified that, without warning from Elgin Federal and without her independent knowledge, payouts stopped altogether on May 26, 1978, during Tri-G's construction of homes on 14 projects: lots 7, 16, 17, 22, 24, 26, 28, 30, 31, 32, 35, 36, 37, and 38. The total amount of the loans on these projects was $795,797. As of May 1978, $548,626 in loan proceeds had been paid out and $247,171 remained unpaid. Irene testified that, contrary to Elgin Federal's position, no interest was due on any of the open loans in May 1978 because the proceeds had not been paid out entirely on any of the loans.\nAccording to Irene, she received another letter from Swartz on June 16, 1978. In that letter, Swartz stated that there was a total of $21,688 in delinquent interest on the open construction loans and the land loan. Swartz demanded that the delinquent interest be paid within 45 days. Swartz also stated that Tri-G would have to complete construction of four of the homes on which Tri-G had open loans before Elgin Federal would open any further loans. Swartz demanded that Tri-G begin advertising its unsold homes at \"realistic prices.\" Swartz also stated that purchasers of Huntington Point houses would receive mortgages at 9.25% and 1 point. Swartz threatened that if Tri-G did not comply with the terms of the letter, Elgin Federal would take legal action effective August 1, 1978.\nIrene testified that at no time before the June 16, 1978, letter did Elgin Federal suggest that Tri-G's homes were overpriced. She also testified that the letter gave no indication that Elgin Federal had decided to terminate payouts, though in fact payouts had ceased several weeks before, unbeknownst to her. Irene noted that, although Elgin Federal required Tri-G to complete four homes before it could obtain any more loans, Elgin Federal continued *399 to refuse to make payouts, which were necessary for construction. Irene testified that, had Elgin Federal continued the payouts and allowed construction to finish, Tri-G could have paid the allegedly delinquent interest with proceeds from sales of the homes. Irene also noted that the terms of the mortgages offered to potential buyers in the June 16, 1978, letter were less favorable than the terms that she and Neubert had agreed upon.\nIrene recounted that on June 20, 1978, Elgin Federal sent her bills for interest relative to the loans on several lots. Irene did not believe that she was obligated to pay any interest because the entire proceeds had not been paid out on any of the loans.\nSwartz sent Tri-G another letter on July 3, 1978, demanding payment of delinquent interest prior to Elgin Federal refinancing any of the existing construction loans to secure additional funds for construction. Swartz required Tri-G to cure the delinquency on the land loan interest before Elgin Federal would release its interest in any lots that Tri-G might wish to sell to a third party. Swartz also stated that the terms of the mortgages offered to potential buyers in the letter of June 16, 1978, would be valid only until October 1, 1978, after which current market rates and fees would apply. Swartz threatened legal action if Tri-G took no action to complete the homes and establish an advertising plan to sell the homes \"at a realistic price.\" Swartz further stated that Elgin Federal's \"board feels that it is important to complete this project at an early date or we will ask for a deed in lieu of foreclosure or foreclosure proceedings will commence.\"\nSwartz informed Irene that Elgin Federal had found a buyer, CLG, for the 23 lots in Huntington Point that were still vacant. CLG proposed to pay $15,000 for each of the vacant lots. Based on her experience in the real estate market, Irene testified that the fair market value of the lots at that time was $25,000 each. Irene had found another party who wanted to buy the lots at a higher price, but Elgin Federal refused to release its mortgages on the lots unless the delinquencies in interest were paid.\nElgin Federal subsequently presented Irene and Clarence with a contract for the sale to CLG of the 23 vacant lots at the price of $15,000 per lot. The contract provided that $9,300 of the purchase price for each lot would be paid to Elgin Federal for the release of the lot under the land loan agreement. The contract also provided that CLG would act as general contractor on 8 of the 14 lots where construction was partially completed, and Tri-G would finish construction on the remaining 6 partially completed lots. Tri-G would remain responsible for the loans on all 14 lots. To compensate for any shortfall should CLG fail to complete construction of the homes within 90 days of the signing of the contract, CLG was required to place $2,500 in escrow for each of the eight lots on which CLG agreed to complete construction (totaling $20,000). The contract also required Tri-G to pay Elgin Federal $51,300 to cover any deficiency in the open construction loans. The contract further provided that Irene and Clarence would execute the necessary documents to allow CLG to handle exclusively all payouts under construction loans on the partially completed lots to be completed by CLG.\nIrene's attorney, Michael Poper, suggested changes to the contract, but Elgin Federal rejected them and essentially gave Tri-G the choice of signing the contract or facing foreclosure on the open loans. Irene and Clarence agreed to the terms. The contract was executed on August 17, 1978. The parties to the contract were First National, as trustee of the land trust; *400 Irene and Clarence, as sole owners of the entire beneficial interest in the land trust; and CLG.\nAfter the contract with CLG was signed, Elgin Federal refused to make payouts on the six lots on which Tri-G was to complete construction. Irene also discovered that Elgin Federal was permitting CLG to use payouts for purposes other than construction on the eight lots on which CLG was general contractor. Irene considered this practice to be a violation of the oral construction loan agreements, which did not allow payouts from a particular loan to be applied to a purpose other than construction on the lot for which that particular loan was obtained.\nIrene reviewed Elgin Federal's ledger and determined the amount of funds that CLG used improperly. The total was $75,787. Irene complained to Swartz about Elgin Federal's refusal to make payouts on the lots on which Tri-G was to complete construction and about the inappropriate payouts to CLG. Swartz told her that the contract between CLG and the Geschkes made CLG the agent of First National and deprived Tri-G of any control over the Huntington Point development.\nAccording to Irene, Elgin Federal made payouts from the land loan without Tri-G's authorization, a practice contrary to the land loan's terms. The trial court admitted into evidence portions of Elgin Federal's ledger reflecting payouts to subcontractors during the years 1977 through 1979. Irene identified $21,725 in payouts that she did not authorize.\nWithout Tri-G's approval, CLG submitted its own contractor's affidavits on the eight lots on which it had agreed to finish construction. Irene considered this a violation of the terms of the construction loan agreements on those lots. The costs specified in CLG's affidavits exceeded the costs specified in Tri-G's original affidavits, thus reducing Tri-G's equity in the eight homes.\nAlso, according to Irene's testimony, Elgin Federal eventually foreclosed on the 14 open construction loans. Although CLG did not fulfill its contractual promise to complete construction on the eight lots, Elgin Federal returned the $20,000 in escrow funds to CLG without Irene's knowledge or approval.\nIrene testified that she would never have entered into loan agreements with Elgin Federal had she known it did not intend to honor its oral agreements. She also would not have entered into the contract with CLG had Elgin Federal not threatened foreclosure and disallowed her from selling the lots to any party other than CLG.\nMichael Poper was the Geschkes' attorney during their dealings with Elgin Federal. He testified that, without notice, Elgin Federal stopped making payouts on May 26, 1978. Poper noted that, even in June 1978, Elgin Federal still had not formally announced that it had stopped payouts. When Irene complained about the cessation of payouts, Elgin Federal told her that it would make no more payouts until interest was brought current.\nIn Poper's opinion, Elgin Federal's demand for interest was premature under the construction loan agreements. In his view, if Elgin Federal had continued making payouts, thereby enabling Tri-G to finish constructing the homes, Tri-G could have used the proceeds from the sales of the homes to pay whatever interest was then due. By withholding payouts and thus halting construction, however, Elgin Federal effectively precluded payment of the interest it demanded. Over Burke's objection, Poper testified that he had represented other developers whom Elgin *401 Federal had placed in the same kind of predicament.\nJohn Brittain was a member of Elgin Federal's board of directors when Elgin Federal extended the land and construction loans to Tri-G in 1977. He testified that Elgin Federal's standard policy at that time was to require monthly interest payments on construction loans. Elgin Federal threatened foreclosure in June 1978 because Tri-G had fallen behind in interest payments. Brittain acknowledged that Irene had complained to him that Elgin Federal had paid proceeds from certain of Tri-G's construction loans toward deficiencies on other construction loans. According to Brittain, Elgin Federal commingled funds in this fashion to avoid placing Tri-G in default. Brittain admitted, however, that such commingling was contrary to Elgin Federal's policies. Tri-G rested its case.\nFor its defense, Burke first called Brent Sherman, the founder and sole shareholder of CLG. Sherman testified to the events surrounding CLG's contract with the Geschkes under which CLG agreed to purchase 23 vacant lots and to finish construction on several of the remaining lots. According to Sherman, the contract gave him full authority to request payouts from Elgin Federal on the homes he was completing, but he nonetheless obtained Irene's approval for all payouts he requested. Also, because he did not complete construction of the homes within the agreed time, Sherman disbursed to Tri-G $10,000 of the $20,000 CLG had placed in escrow to guarantee completion of the homes. Sherman admitted, however, that he had no documentation reflecting that payment. Sherman denied that he ever conspired with Elgin Federal to deprive Tri-G of control over the Huntington Point development. Also, Sherman had anticipated receiving a profit of $20,000 on each of the 23 lots once construction was complete.\nBurke next called Edward Swartz, who testified that he assumed responsibility for Tri-G's loans after Dennis Neubert left Elgin Federal in late 1977. According to Swartz, Elgin Federal's policies made borrowers responsible for monthly interest payments on their construction loans once funds were disbursed. Tri-G initially paid interest on the construction loans without protest but stopped paying in early 1978, giving rise to Elgin Federal's delinquency notices and threats of foreclosure. Contrary to Irene's interpretation, Swartz stated that the contract between CLG and Tri-G made CLG responsible for interest and principal on the loans relating to the construction it had agreed to finish. Swartz denied that funds from Tri-G's loans were ever commingled with funds from the loans CLG took over.\nOn cross-examination, Swartz conceded that the written construction loan agreements between Elgin Federal and Tri-G did not specify when interest was to be paid. Swartz admitted that Elgin Federal's procedures were \"informal\" and that not all policies were in writing. Swartz acknowledged that the total amount of delinquent interest reflected in his June 16, 1978, letter included interest for June 1978, which in fact was not due until after the date of the letter. According to Swartz, the characterization of the June interest as delinquent was an innocent error. Swartz categorically denied that Elgin Federal had ever stopped payouts on any of Tri-G's loans. Shown documents from Elgin Federal reflecting that the bank had made virtually no payouts between May 26 and September 19, 1978, Swartz speculated that no payouts were made because Tri-G had not requested them.\n*402 Swartz further admitted on cross-examination that, after the contract between CLG and Tri-G was signed, Irene told him several times that she did not want CLG authorizing payouts on the homes CLG agreed to finish and that she was revoking CLG's authority under the contract to make such authorizations. In response, Swartz told Irene that she would have to cancel the contract in writing if she wanted to stop CLG from authorizing payouts.\nSwartz further admitted on cross-examination that he could point to no document memorializing CLG's assumption of responsibility for interest and principal on the loans relating to the construction projects CLG agreed to complete. Swartz acknowledged that the fact that foreclosure proceedings were brought against Tri-G when these projects failed indicated that Tri-G remained responsible for the loans despite the contract with CLG. Swartz also admitted that Elgin Federal commingled funds on Tri-G's loans and that Irene protested the practice on numerous occasions.\nAt the conclusion of the evidence, the trial court instructed the jury on five specific categories of damages, with their respective elements, sought by Tri-G. In its closing argument, Tri-G sought damages in the following amounts: $75,787 for breach of the construction loan agreements; $21,675 for breach of the land loan agreement; $10,000 for breach of the escrow agreement; $361,000 for fraud that resulted in loss of profits on the 23 vacant lots; and $280,000 for fraud that resulted in lost profits on the 14 partially completed lots. These sums totaled $748,562.\nThe jury ultimately returned a verdict in favor of Tri-G for $2,337,550, more than three times the amount Tri-G asked for. In four special interrogatories, the jury found that: (1) Burke was negligent in representing Tri-G in the underlying case; (2) Burke's negligence proximately caused Tri-G to lose the underlying case; (3) had Tri-G prevailed in the underlying case, it would have recovered a verdict against Elgin Federal for $1,168,775 in compensatory damages; and (4) had Tri-G prevailed in the underlying case, Elgin Federal would have been required to pay it an additional $1,168,775 in punitive damages.\nBurke filed a posttrial motion seeking alternative forms of relief. Tri-G filed a posttrial motion in which it requested interest on the judgment and an award of attorney fees and costs pursuant to the Consumer Fraud Act. Both motions were denied.\nBurke appealed and Tri-G cross-appealed. The appellate court rejected a contention by Burke that the amount of compensatory damages awarded to Tri-G was not supported by the record. 353 Ill.App.3d at 222-23, 288 Ill.Dec. 580, 817 N.E.2d 1230. It upheld the award of punitive damages to Tri-G (353 Ill.App.3d at 226-32, 288 Ill. Dec. 580, 817 N.E.2d 1230), but rejected Tri-G's claim for judgment interest (353 Ill.App.3d at 223-24, 288 Ill.Dec. 580, 817 N.E.2d 1230). In addition, it reversed the trial court's denial of Tri-G's request for attorney fees and costs pursuant to the Consumer Fraud Act and remanded the cause to the trial court to allow Tri-G to request attorney fees and costs incurred in bringing the consumer fraud claim. 353 Ill.App.3d at 224-26, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nOne justice dissented solely on the issue of lost punitive damages. 353 Ill.App.3d at 233, 288 Ill.Dec. 580, 817 N.E.2d 1230 (Gilleran Johnson, J., concurring in part and dissenting in part). That justice would have followed precedent from New York and California and held that \"a plaintiff may not recover punitive damages lost by reason of attorney malpractice.\" 353 Ill. App.3d at 236, 288 Ill.Dec. 580, 817 N.E.2d *403 1230 (Gilleran Johnson, J., concurring in part and dissenting in part).\nBurke and Tri-G each filed petitions for leave to appeal. 177 Ill.2d R. 315(a). We allowed their respective petitions and consolidated the appeals for review. We subsequently granted leave to the Illinois Association of Defense Trial Counsel, and the Illinois Civil Justice League, the Du Page County Bar Association, and the Northwest Suburban Bar Association to file amicus curiae briefs in support of Burke. See 155 Ill.2d R. 345.\nIn its appeal to our court, Burke contends that it was denied procedural due process when Tri-G was permitted to amend its complaint to add allegations regarding lots not specified in the 1981 complaint, that the amount of compensatory damages awarded was not supported by the record, and that the award of lost punitive damages was erroneous. Because only the punitive damages issue was raised in Burke's petition for leave to appeal (No. 99584). Tri-G filed motions to strike Burke's additional two issues from its brief. We took the motions with the case and now deny them.\nSupreme Court Rule 315(b)(3) requires that a petition for leave to appeal contain \"a statement of the points relied upon for reversal of the judgment of the Appellate Court.\" 177 Ill.2d R. 315(b)(3). A party's failure to raise an issue in the petition for leave to appeal may be deemed a waiver of that issue. Central Illinois Light Co. v. Home Insurance Co., 213 Ill.2d 141, 152, 290 Ill.Dec. 155, 821 N.E.2d 206 (2004); Sullivan v. Edward Hospital, 209 Ill.2d 100, 124-25, 282 Ill.Dec. 348, 806 N.E.2d 645 (2004). In this case, however, Tri-G filed its own, separate petition for leave to appeal to contest the lower courts' denial of its claim for judgment interest (No. 99595) and that petition was allowed. Pursuant to Supreme Court Rule 318(a) (155 Ill.2d R. 318(a)), Burke, as appellee in that cause, is entitled to \"seek and obtain any relief warranted by the record on appeal without having filed a separate petition for leave to appeal or notice of crossappeal or separate appeal.\" This authorization encompasses the two additional issues asserted by Burke.\nIn challenging this conclusion, Tri-G argues that to apply Rule 318(a) to permit Burke to assert the additional issues \"eviscerates the principle that points relied on by an appellant for reversal not contained in the petition for leave to appeal are waived.\" We disagree. Tri-G chose to file a separate petition for leave to appeal, and our application of Rule 318(a) is a natural consequence of Tri-G's tactical decision. See, e.g., Weatherman v. Gary-Wheaton Bank of Fox Valley, 186 Ill.2d 472, 489-91, 239 Ill.Dec. 12, 713 N.E.2d 543 (1999); Zimmerman v. Village of Skokie, 183 Ill.2d 30, 40-41, 231 Ill.Dec. 914, 697 N.E.2d 699 (1998). Tri-G's motions to strike the additional issues from Burke's brief are therefore denied.\nTurning then to the merits of this appeal, Burke first contends that it was denied procedural due process by the trial court's decision to allow Tri-G to recover damages for the 23 vacant lots and the 14 partially completed lots not specified in the 1981 complaint and by the appellate court's review of that decision. As earlier noted, Tri-G was allowed to amend the malpractice complaint prior to trial to add an allegation that Burke was negligent for failing to review and amend the 1981 complaint against Elgin Federal. In allowing Tri-G's motion to amend, the trial court stated:\n\"Both sides are dragging in the question of damages. * * * [T]he proposed amendment has absolutely nothing to do with damages because you can't back *404 door the damages. I mean the damages if there are any, if it gets that far, would have to come from the 1981 complaint. It doesn't come from anywhere else.\"\nThe trial court reasoned that the amendment only went to the question of what negligence Tri-G intended to prove.\nDuring Irene's testimony, the trial court allowed Tri-G to introduce evidence of breach of contract and fraud regarding the 23 vacant and 14 partially completed lots not specified in the 1981 complaint. The trial court admitted this evidence for the purpose of establishing an alleged scheme with respect to the lots that were specified in the 1981 complaint. Indeed, the trial court expressly stated that Tri-G would not be able to argue to the jury that it was entitled to damages based on the additional lots. However, at the jury instruction conference, over Burke's objection, the trial court ruled that damages on the fraud claims properly included the additional lots. Tri-G sought such damages, which the jury awarded. In denying Burke's posttrial motion, the trial court explained that the fraud claims relating to the additional lots were encompassed within the 1981 complaint.\nIn the appellate court, Burke assigned error to this decision. The appellate court disagreed with the trial court that the 1981 complaint was sufficiently broad to encompass claims relating to the additional lots. Noting that it can affirm the trial court's decision on any basis in the record, however, the appellate court held as follows:\n\"We hold that the claims outside the 1981 complaint were admissible at the malpractice trial on the basis that a reasonably competent attorney would have filed a motion to amend the complaint to add the claims within a reasonable time after being retained by Tri-G in January 1987, and that such a motion should have been granted because it would have been proper under the prevailing rules of pleading.\" 353 Ill. App.3d at 214, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nThe appellate court opined that a reasonably competent attorney retained by Tri-G in late January 1987, aware that May 11, 1987, was the date certain for trial, would have immediately reviewed the 1981 complaint. Further, according to the appellate court, given the interrelationship between the claims relating to the lots specified in the 1981 complaint and the same claims relating to the additional lots, a reasonably competent attorney would have sought to amend the 1981 complaint prior to the May 11, 1987, trial. 353 Ill.App.3d at 214-15, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nIn this court, Burke specifically contends that the lower courts' decisions cumulatively effected a deprivation of procedural due process because Burke was unable to present a defense to claims related to the additional lots. Burke argues that it was fundamentally unfair for the trial court to permit the jury to award damages on claims relating to the additional lots, which the trial court ruled, during trial, could not be the basis of recovery. Burke further argues that the appellate court, instead of correcting the trial court's error, compounded it by upholding the trial court's decision based on alternative reasoning. Thus, according to Burke, the appellate court's conclusion \"was an integral part of the due process violation.\"\nProcedural due process claims concern the constitutionality of the specific procedures employed to deny a person's life, liberty, or property interest. East St. Louis Federation of Teachers, Local 1220 v. East St. Louis School District No. 189 Financial Oversight Panel, 178 Ill.2d 399, 415, 227 Ill.Dec. 568, 687 N.E.2d 1050 (1997). The requirement of due process is *405 met by having an orderly proceeding wherein a person is served with notice, actual or constructive, and has an opportunity to be heard and to enforce and protect his rights. The \"`fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.'\" People ex rel. Devine v. $30,700.00 United States Currency, 199 Ill.2d 142, 156, 262 Ill.Dec. 781, 766 N.E.2d 1084 (2002), quoting Stratton v. Wenona Community Unit District No. 1, 133 Ill.2d 413, 432, 141 Ill.Dec. 453, 551 N.E.2d 640 (1990). Due process does not guarantee against erroneous or unjust decisions by courts which have jurisdiction of the parties and the subject matter, and a constitutional question is not presented where a court may have misconstrued the law or committed an error for which its judgment should be reversed. See Reyes v. Court of Claims, 299 Ill.App.3d 1097, 1104-05, 234 Ill.Dec. 58, 702 N.E.2d 224 (1998).\nApplying these principles to this case, it is clear that Burke was not denied procedural due process. There is no merit to Burke's contention that Burke was not able to present a defense to claims relating to the additional lots. The issue of damages related to the additional lots permeated the entire trial, including Tri-G's pretrial motion to amend the malpractice complaint to include an allegation that Burke was negligent for failing to review and amend the 1981 complaint. \"An element of damage anticipated by a pretrial motion can hardly be said to come as a surprise.\" Union Electric Power Co. v. Sauget, 1 Ill.2d 125, 132, 115 N.E.2d 246 (1953). Further, the evidence of the additional lots is nearly identical to allegations relating to the lots pled in the 1981 complaint. If Burke were truly surprised by evidence of the additional lots, it would have requested a continuance to conduct further discovery. Instead, Burke chose to proceed. Indeed, Burke did not even introduce expert witnesses or other evidence valuating the lots that were specified in the 1981 complaint. Burke does not explain how it was prevented from deposing any witness, pursuing any line of questioning, or presenting any avenue of proof. The absence of surprise or other prejudice militates against finding a procedural due process violation. See, e.g., McDermott v. Metropolitan Sanitary District, 240 Ill. App.3d 1, 38-39, 180 Ill.Dec. 758, 607 N.E.2d 1271 (1992); La Salle National Bank v. International Ltd., 129 Ill.App.2d 381, 397-98, 263 N.E.2d 506 (1970).\nIn support of its position, Burke cites Delarosa v. Approved Auto Sales, Inc., 332 Ill.App.3d 623, 266 Ill.Dec. 331, 774 N.E.2d 437 (2002), Hiscott v. Peters, 324 Ill.App.3d 114, 257 Ill.Dec. 847, 754 N.E.2d 839 (2001), Koplin v. Hinsdale Hospital, 207 Ill.App.3d 219, 151 Ill.Dec. 685, 564 N.E.2d 1347 (1990), and Pettigrew v. National Accounts System, Inc., 67 Ill.App.2d 344, 213 N.E.2d 778 (1966). In each of those cases, new causes of action were adjudicated on the merits without the appellant being given the opportunity to answer the new causes of action, take discovery, and prosecute or defend itself against the new causes of action at trial. Those cases are distinguishable from the matter before us. Unlike the appellants in those cases, Burke was not required to litigate new causes of action on short notice with no opportunity to answer the causes of action, take discovery, and present evidence in opposition to the new causes of action. Burke had ample time to take discovery on all claims related to Tri-G's dealings with Elgin Federal.\nAbsent its unsuccessful claim of prejudice, Burke's contention amounts to nothing *406 more than an argument that it was denied procedural due process because the decisions of the trial and appellate courts were erroneous. As we have previously indicated, however, procedural due process is not a guaranty against erroneous or unjust decisions, or the incorrect interpretation of statutes or rules of law. Neither an abuse of discretion nor an erroneous rule of law will support a reversal for a deprivation of procedural due process. Peoples Gas Light & Coke Co. v. Buckles, 24 Ill.2d 520, 530, 182 N.E.2d 169 (1962); Benton v. Marr, 364 Ill. 628, 629, 5 N.E.2d 466 (1936), quoting Genslinger v. New Illinois Athletic Club of Chicago, 332 Ill. 316, 319, 163 N.E. 707 (1928). In this case, the trial court had within its discretion the power to rule as it did on the complained-of matters. Even if the challenged rulings of the lower courts may have been erroneous \u0097which we expressly do not decide\u0097 they did not deprive Burke of due process of law. See Kazubowski v. Kazubowski, 45 Ill.2d 405, 413, 259 N.E.2d 282 (1970); Chicago Land Clearance Comm'n v. Darrow, 12 Ill.2d 365, 369-70, 146 N.E.2d 1 (1957).\nBurke next challenges the amount of the jury's compensatory damages award. As earlier noted, the trial court instructed the jury on the elements of five specific categories of damages that Tri-G sought. In its closing argument, Tri-G requested $75,787 for breach of the construction loan agreements, $21,675 for breach of the land loan agreement, $10,000 for breach of the escrow agreement, $361,000 for fraud that resulted in loss of profits on the 23 vacant lots, and $280,000 for fraud that resulted in lost profits on the 14 partially completed lots. These amounts totaled $748,562. The jury, however, determined that Tri-G was actually entitled to $1,168,775 in compensatory damages.\nIn assailing the jury's verdict, Burke contends that Tri-G should not have recovered compensation for lost profits on the 14 partially completed lots. The firm also takes issue with the total amount of the compensatory damages awarded by the jury. Our consideration of these arguments is guided by the principle that \"[t]he determination of damages is a question reserved to the trier of fact, and a reviewing court will not lightly substitute its opinion for the judgment rendered in the trial court.\" Richardson v. Chapman, 175 Ill.2d 98, 113, 221 Ill.Dec. 818, 676 N.E.2d 621 (1997). Absent a clear indication in the record that the jury failed to follow some rule of law or considered some erroneous evidence, or that the verdict was the obvious result of passion or prejudice, a reviewing court will not upset the jury's assessment of damages. See Perry v. Storzbach, 206 Ill.App.3d 1065, 1069, 151 Ill.Dec. 940, 565 N.E.2d 211 (1990).\nBurke challenges the jury's award of $280,000 for lost profits on the 14 partially completed lots on the grounds that it was speculative and not supported by the evidence. This argument cannot be sustained. As we noted earlier, CLG president Brent Sherman testified that he reasonably anticipated a profit of $20,000 per lot for each completed house. During closing argument, Tri-G relied on Sherman's testimony in requesting compensatory damages for lost profits in the amount of $20,000 for each of the 14 partially completed lots, which totals $280,000. The appellate court held that Sherman's testimony as to the expected profits was an adequate basis for the jury's award. 353 Ill.App.3d at 221-22, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nThe controlling principles are well established. \"A recovery may be had for prospective profits when there are any criteria by which the probable profits can *407 be estimated with reasonable certainty.\" Barnett v. Caldwell Furniture Co., 277 Ill. 286, 289, 115 N.E. 389 (1917). \"In order to recover lost profits, it is not necessary that the amount of loss be proven with absolute certainty. [Citation.] Being merely prospective, such profits will, to some extent, be uncertain and incapable of calculation with mathematical precision.\" Midland Hotel Corp. v. Reuben H. Donnelley Corp., 118 Ill.2d 306, 315-16, 113 Ill.Dec. 252, 515 N.E.2d 61 (1987); accord Barnett, 277 Ill. at 289, 115 N.E. 389. The impossibility of proof of the exact amount of lost profits will not justify refusing damages. The law requires only that the plaintiff approximate the claimed lost profits by competent evidence. Such evidence must with a fair degree of probability tend to establish a basis for the assessment of damages for lost profits. Barnett, 277 Ill. at 289, 115 N.E. 389. \"However, recovery of lost profits cannot be based upon conjecture or sheer speculation. [Citation.] It is necessary that the evidence afford a reasonable basis for the computation of damages * * *.\" Midland Hotel, 118 Ill.2d at 316, 113 Ill.Dec. 252, 515 N.E.2d 61.\nA plaintiff may satisfy the requirement of proving with a reasonable basis or with reasonable certainty damages for claimed lost profits through evidence of past profits in an established business. Generally speaking, however, courts consider evidence of lost profits in a new business too speculative to sustain the burden of proof. Chapman v. Kirby, 49 Ill. 211, 219 (1868); see Malatesta v. Leichter, 186 Ill.App.3d 602, 621, 134 Ill.Dec. 422, 542 N.E.2d 768 (1989); Drs. Sellke & Conlon, Ltd. v. Twin Oaks Realty, Inc., 143 Ill.App.3d 168, 174, 96 Ill.Dec. 633, 491 N.E.2d 912 (1986).\nReviewing the record, the appellate court observed that Sherman spent several years in the construction business, which he described as profitable, prior to becoming involved in Huntington Point. Each of the 23 vacant lots was comparable to the 14 partially completed lots. Also, Sherman's, i.e., CLG's, business of selling houses for profit was comparable to Tri-G's business of selling houses for profit. In the appellate court's view, Sherman's testimony was an adequate basis for calculating Tri-G's lost profits on the 14 partially completed lots. 353 Ill.App.3d at 221-22, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nAssigning error to the appellate court's reasoning, Burke contends that, as a matter of law, evidence of past success in a similar enterprise is not sufficient to support an award of lost profits and, specifically, past success on one real estate project is not sufficient to support an award of lost profits on a subsequent real estate project. According to Burke, \"Sherman's testimony about his expectations based on his prior successes on other real estate projects was [therefore] not sufficient to support an award of lost profits of Tri-G on this project.\" (Emphases in original.)\nWe cannot accept Burke's contention. There is no inviolate rule that a new business can never prove lost profits. Rather, in some cases, \"courts have found that the rule that a new business' profits are too speculative did not fit the circumstances before them.\" Milex Products, Inc. v. Alra Laboratories, Inc., 237 Ill.App.3d 177, 192, 177 Ill.Dec. 852, 603 N.E.2d 1226 (1992); see, e.g., Malatesta, 186 Ill.App.3d at 620-22, 134 Ill.Dec. 422, 542 N.E.2d 768.\nThe cases on which Burke relies determined that where lost profits are based solely upon speculation, such proof was inadequate to establish lost profits with reasonable certainty. In this case, CLG's business was an established business. The 14 houses to be completed cost the same amount to construct and had comparable prices as the completed houses. Given *408 these facts, with Sherman's testimony, Tri-G's lost profits could be determined with reasonable certainty from CLG's past experience. See, e.g., Milex, 237 Ill. App.3d at 193, 177 Ill.Dec. 852, 603 N.E.2d 1226. We therefore uphold the jury's award of $280,000 for lost profits on the 14 partially completed lots.\nBurke's contention that the jury's overall award was excessive presents a more difficult question. Tri-G requested a total of $748,562 in compensatory damages for five categories of damages on which the jury was instructed. The jury, however, awarded $1,168,775 in compensatory damages, which was $420,213\u0097over 50%\u0097 more than what Tri-G requested. Burke contends that such an award was not supported by the record and was the result of passion, prejudice, or confusion. It therefore requests that we remand the cause for a new trial solely on the issue of damages or, alternatively, that we order a remittitur in the amount of $420,213, thereby reducing the compensatory damages award to $748,562. We conclude that remittitur is necessary in this case.\nUnder Illinois law, an award of damages will be deemed excessive if it falls outside the range of fair and reasonable compensation, results from passion or prejudice, or is so large that it shocks the judicial conscience. Richardson, 175 Ill.2d at 113, 221 Ill.Dec. 818, 676 N.E.2d 621. In Burke's view, the jury's decision to award Tri-G $420,213 more than it had requested, \"could only have been produced by passion, prejudice, or confusion.\" We disagree. \"A jury's award of a verdict higher than that requested by counsel does not, by itself, indicate that the jury acted out of passion or prejudice.\" See Fedt v. Oak Lawn Lodge, Inc., 132 Ill.App.3d 1061, 1072, 88 Ill.Dec. 154, 478 N.E.2d 469 (1985). Having said that, however, we must nevertheless conclude that the jury's verdict, as rendered, cannot stand.\nIn attempting to rationalize the jury's compensatory damage award, Tri-G suggests that its trial counsel deliberately asked for less than it was entitled to recover as a strategic maneuver. The record, however, belies that notion. During its closing argument, Tri-G referred extensively to evidence from documents and witnesses. In each of the five categories of damages on which the jury was instructed, Tri-G asked the jury to award it the dollar amount that corresponded to the loss reflected in the evidence. Indeed, in one category of damages, Tri-G presented the jury with a time range within which to determine damages and asked for the maximum amount within that range, which the jury awarded.\nIn its brief, Tri-G additionally responds that the record contains \"ample\" evidence to support the jury's $1,168,775 compensatory damages award. Citing again to documents and witness testimony, Tri-G argues that the award \"appears to consist\" of a list of categories of damages, assigning a dollar value to each category. Two of Tri-G's claimed categories of damages, however, are outside of the five categories of damages on which the jury was instructed: \"$255,336.00 paid by Tri-G to purchase the land and develop it into 24 lots,\" and \"$240,754.00 loss of money paid by Tri-G in opening waivers for 14 houses.\"\nTri-G does not dispute that these two claimed categories of damages were not identified in the jury instructions. Rather, Tri-G contends that it is not reversible error for a jury to disregard the elements of damages identified in jury instructions as long as the ultimate damages award \"is consistent with the evidence and proven damages.\" This contention is meritless.\nJurors do not possess a roving commission to find such damages as they *409 please. The damages awarded by a jury must be measured by a legal standard, and that standard must guide the jury's determination as to what sum would compensate the injured party. Accordingly, while the amount of recoverable damages is a question of fact for the jury, the measure of damages upon which the jury's factual computation is based is a question of law for the court (see United States for the Use of N. Maltese & Sons, Inc. v. Juno Construction Corp., 759 F.2d 253, 255 (2d Cir.1985); Basic American, Inc. v. Shatila, 133 Idaho 726, 745, 992 P.2d 175, 194 (1999); 25A C.J.S. Damages \u00a7 342 (2002); 15 Ill. L. & Prac. Damages \u00a7 125, at 558 (2000)), and the court's instructions should limit the jury's consideration to facts that are properly a part of the damages allowable (Allied Vista, Inc. v. Holt, 987 S.W.2d 138, 141 (Tex.Ct.App.1999); accord Creek v. Village of Westhaven, 144 F.3d 441, 447 (7th Cir.1998) (\"A jury's discretion in awarding damages is limited by the parameters of what the law will allow [citations], and it is the court's instructions which hopefully assist the jury\"); C. McCormick, Damages \u00a7 15, at 58 (1935) (observing that, in action for damages, trial judge has duty to include in jury instructions a rule or standard for measuring amount of award)).\nIn the present case, the trial court instructed the jury: \"It is your duty to resolve this case by determining the facts and following the law given in the instructions.\" See Illinois Pattern Jury Instructions, Civil, No. 1.01(2) (2000). The trial court further instructed the jury on only the five above-stated categories of damages. Under the principles discussed above, Tri-G therefore cannot justify the jury's award of compensatory damages by hypothesizing categories of damages on which the jury was not instructed.\nWe are thus left with no basis in the law or the record to support a verdict $420,213 greater than Tri-G had requested. Where, as here, a jury's award \"exceed[s] the proven damages, it must be corrected. The practice of entering or ordering a remittitur has long been an accepted practice in Illinois and it has been consistently acknowledged to be promotive of both the administration of justice and putting an end to litigation.\" See McElroy v. Patton, 130 Ill.App.2d 872, 877, 265 N.E.2d 397 (1970) (collecting authorities); see generally Best v. Taylor Machine Works, 179 Ill.2d 367, 411-13, 228 Ill.Dec. 636, 689 N.E.2d 1057 (1997).\nIn this legal malpractice action, the underlying case was instituted with the filing of the 1981 complaint\u0097approximately 24 years ago. \"Rather than prolong this litigation any further, remittitur will be utilized to correct the excessive verdict.\" Peter J. Hartmann Co. v. Capitol Bank & Trust Co., 353 Ill.App.3d 700, 711, 288 Ill.Dec. 263, 817 N.E.2d 913 (2004).\nThe applicable principles are widely recognized. A remittitur is an agreement by the plaintiff to relinquish, or remit, to the defendant that portion of the jury's verdict which constitutes excessive damages and to accept the sum which has been judicially determined to be properly recoverable damages. It is a judicial determination of recoverable damages and should not be construed as an agreement between the parties or a concession by the plaintiff that the damages were excessive. See Carter v. Kirk, 256 Ill.App.3d 938, 947-48, 194 Ill.Dec. 821, 628 N.E.2d 318 (1993); Congregation of the Passion, Holy Cross Province v. Touche Ross & Co., 224 Ill.App.3d 559, 588, 166 Ill.Dec. 642, 586 N.E.2d 600 (1991), aff'd, 159 Ill.2d 137, 201 Ill.Dec. 71, 636 N.E.2d 503 (1994); Haid v. Tingle, 219 Ill.App.3d 406, 411, 162 Ill.Dec. *410 99, 579 N.E.2d 913 (1991) (collecting authorities).\nAlthough a trial court may refuse to enter judgment on a verdict unless a portion of the verdict is remitted, the court does not have the authority to reduce the damages by entry of a remittitur if the plaintiff objects or does not consent. The trial court must afford the plaintiff the choice of agreeing or refusing to the entry of a remittitur, with the proviso that the plaintiff's refusal to agree to the entry of a remittitur will result in the ordering of a new trial. The only alternative to a remittitur in a case where the verdict exceeds the damages properly proven, or where the verdict can be accounted on the sole basis that the jury acted from some improper motive, such as passion or prejudice, is for the trial judge to order a new trial. Carter, 256 Ill.App.3d at 947-48, 194 Ill.Dec. 821, 628 N.E.2d 318; Haid, 219 Ill.App.3d at 411-12, 162 Ill.Dec. 99, 579 N.E.2d 913 (and cases cited therein). Further, Supreme Court Rule 366(a)(5) specifically provides that a reviewing court has the power to grant any relief, including the entry of a remittitur. 155 Ill.2d R. 366(a)(5).\nAccordingly, in the present case, we enter a remittitur of $420,213, thereby reducing Tri-G's compensatory damages award to $748,562, conditioned upon Tri-G's consent. Absent such consent, we order a new trial solely on the issue of damages. See, e.g., Peter J. Hartmann Co., 353 Ill. App.3d at 711-12, 288 Ill.Dec. 263, 817 N.E.2d 913; Haid, 219 Ill.App.3d at 417, 162 Ill.Dec. 99, 579 N.E.2d 913; Briante v. Link, 184 Ill.App.3d 812, 815, 132 Ill.Dec. 922, 540 N.E.2d 844 (1989).\nWe next consider Tri-G's contention that the lower courts erred in denying its claim for judgment interest. In considering Tri-G's arguments, which repeat those it presented in the appellate court, we observe that the pertinent facts are undisputed and the issues raised are purely legal. \"If the facts are uncontroverted and the issue is the trial court's application of the law to the facts, a court of review may determine the correctness of the ruling independently of the trial court's judgment.\" Norskog v. Pfiel, 197 Ill.2d 60, 70-71, 257 Ill.Dec. 899, 755 N.E.2d 1 (2001).\nTri-G divides the interest it seeks into two time periods, with the focal point being June 1, 1987. First, Tri-G seeks \"prejudgment\" interest, which covers the period from June 1978, when Elgin Federal committed the acts from which the underlying case arose, to June 1, 1987, the approximate date that a verdict would have been entered against Elgin Federal but for Burke's negligence. Prejudgment interest is recoverable only where authorized by agreement of the parties or by statute. In chancery proceedings, however, equitable considerations permit a court to allow interest as the equities of the case may demand. City of Springfield v. Allphin, 82 Ill.2d 571, 576, 579, 45 Ill.Dec. 916, 413 N.E.2d 394 (1980) (collecting cases); Continental Casualty Co. v. Commonwealth Edison Co., 286 Ill.App.3d 572, 577, 221 Ill.Dec. 807, 676 N.E.2d 328 (1997) (collecting cases). Tri-G argues that, had a damages judgment been entered against Elgin Federal in 1987, Tri-G would have been entitled to prejudgment interest on equitable grounds.\nTri-G also seeks \"postjudgment\" interest for the period from June 1, 1987, through February 28, 2002, when judgment against Burke was entered. Before the appellate court, Tri-G relied on section 2-1303 of the Code of Civil Procedure, which provides in relevant part:\n\"Judgments recovered in any court shall draw interest at the rate of 9% per annum from the date of the judgment *411 until satisfied * * *. When judgment is entered upon any award, report, or verdict, interest shall be computed at the above rate, from the time when made or rendered to the time of entering judgment upon the same, and included in the judgment.\" 735 ILCS 5/2-1303 (West 2002).\nTri-G argues that, because Burke failed to obtain a judgment against Elgin Federal in 1987, Burke is responsible for \"postjudgment\" interest, extending from June 1, 1987, when the judgment should have been entered, through February 28, 2002, when Tri-G finally recovered on its allegations against Elgin Federal.\nRelying on the plain language of the statute, the appellate court rejected Tri-G's purported category of \"postjudgment\" interest. \"Section 2-1303 speaks of judgments recovered, not judgments that should have been recovered. Tri-G recovered no judgment in this action until February 28, 2002, and therefore this is the date by which interest will be reckoned.\" 353 Ill.App.3d at 224, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nBefore this court, Tri-G concedes that its claim to what it characterizes as \"postjudgment\" interest \"is not based directly\" on section 2-1303. Rather, according to Tri-G:\n\"Combining section [2-1303] and the principle that the judgment in a legal malpractice case is supposed to give the plaintiff `those sums which would have been recovered if the underlying suit had been successfully prosecuted,' * * * Tri-G is entitled to additional compensatory damages equal to the amount of post-judgment interest on a judgment that would have been entered in June 1987 but for Burke's negligence.\"\nTri-G now contends that the appellate court's rejection of its claim to \"postjudgment\" interest \"completely ignored the principle that the prevailing plaintiff in a legal malpractice case is entitled to everything it would have recovered if the underlying action had been successfully prosecuted.\"\nThis argument is erroneous. A judgment is the final determination of a court upon matters submitted to it in an action or proceeding. A judgment is the judicial act of the court. In contrast, the right to judgment interest, apart from contract, \"does not emanate from the controversy, or from the judgment, or from anything of a judicial nature. * * * The recovery of interest in this State, not contracted for, finds its only authority in the statute. It is purely statutory.\" Blakeslee's Storage Warehouses, Inc. v. City of Chicago, 369 Ill. 480, 482-83, 17 N.E.2d 1 (1938).\nIn this case, as the appellate court reasoned, section 2-1303 refers only to judgments recovered, not to judgments that should have been recovered. We must give effect to this statutory provision by giving its language its plain and ordinary meaning. Hall v. Henn, 208 Ill.2d 325, 330, 280 Ill.Dec. 546, 802 N.E.2d 797 (2003). Therefore, we agree with the appellate court that the focus of this claim should not be June 1, 1987, the date of a purported, hypothetical judgment against Elgin Federal, but rather February 28, 2002, the date when the judgment against Burke was entered, which was the only judgment rendered in this legal malpractice action.\nBecause February 28, 2002, is the operative date, the appellate court reasoned that the interest Tri-G was seeking was actually entirely prejudgment interest, but of two types. In the appellate court's view, the interest covering the period from June 1978 to June 1, 1987, was sought from Burke only derivatively, its ultimate basis *412 being Elgin Federal's wrongdoing. By contrast, the interest for the period from June 1, 1987, to February 28, 2002, was claimed directly on the basis of Burke's own negligent misconduct. 353 Ill.App.3d at 224, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nIn analyzing and rejecting Tri-G's claims for this interest, the appellate court looked to the nature of the claims for which interest was sought. With respect to later period, ending February 28, 2002, the appellate court reasoned that the request for interest failed because the claim against Burke was one at law and our state does not allow nonstatutory prejudgment interest on any type of claim at law. We agree.\nAs we have already suggested, \"[i]t is well settled that interest is not recoverable absent a statute or agreement providing for it.\" Allphin, 82 Ill.2d at 576, 45 Ill.Dec. 916, 413 N.E.2d 394. An exception to this rule exists in equity. \"In chancery proceedings, the allowance of interest lies within the sound discretion of the judge and is allowed where warranted by equitable considerations and disallowed if such an award would not comport with justice and equity.\" (Emphasis added.) Allphin, 82 Ill.2d at 579, 45 Ill.Dec. 916, 413 N.E.2d 394; accord Groome v. Freyn Engineering Co., 374 Ill. 113, 131, 28 N.E.2d 274 (1940) (observing: \"In a proper case, equitable considerations permit a court of equity to allow or disallow interest as the equities of the case may demand\"). The availability of equitable relief is not necessarily precluded merely because a case is heard in the law division of a circuit court, nor is equitable relief automatically awarded merely because a case is proceeding in the chancery division of a circuit court. Rather, it is the substance of the claim that determines the appropriate relief and the nature of the court. Continental Casualty Co., 286 Ill.App.3d at 579, 221 Ill.Dec. 807, 676 N.E.2d 328; see, e.g., In re Estate of Wernick, 127 Ill.2d 61, 86-87, 129 Ill.Dec. 111, 535 N.E.2d 876 (1989) (referring to \"proceedings sounding in equity\"). There is no question, however, that this legal malpractice action was entirely an action at law. See 65A C.J.S. Negligence \u00a7 649 (2000) (stating that negligence is an action at law); Cook v. Gould, 109 Ill.App.3d 311, 314, 64 Ill.Dec. 896, 440 N.E.2d 448 (1982) (stating that legal malpractice action is no different than cause of action for ordinary nonprofessional negligence). \"Illinois courts have declined to apply the rule governing equitable awards of prejudgment interest to cases at law, notwithstanding that an injured party who is eventually compensated may suffer detriment from the inability to use the money from the date of loss to the date of compensation.\" Continental Casualty Co., 286 Ill.App.3d at 579, 221 Ill.Dec. 807, 676 N.E.2d 328 (collecting cases). Prejudgment interest in therefore not available for the period ending February 28, 2002.\nIn our view, the same rationale is applicable to the earlier period between June 1978 and June 1, 1987. The interest for that period was ultimately linked to the February 28, 2002, judgment and is therefore based on the legal malpractice claim against Burke, just as the interest for the latter period was. Because prejudgment interest is not available in legal malpractice cases, Tri-G's claim for prejudgment interest for this earlier period was also properly rejected.\nIn reaching this conclusion, we are aware that our analysis on this point differs from that of the appellate court. It is axiomatic, however, that we are not bound by the appellate court's reasoning and may affirm for any basis presented in the record. Raintree Homes, Inc. v. Village of Long Grove, 209 Ill.2d 248, 261, 282 Ill.Dec. 815, 807 N.E.2d 439 (2004).\n*413 The final issue in this case, and the only one about which the members of the appellate court were in disagreement, concerns the jury's decision to include in its judgment against Burke the sum of $1,168,775 to compensate Tri-G for lost punitive damages Tri-G would have received in the underlying action against Elgin Federal but for Burke's legal malpractice. As noted earlier in this opinion, Burke contended in the appellate court that allowing recovery of punitive damages was expressly prohibited by 2-1115 of the Code of Civil Procedure, which provides that \"[i]n all cases, whether in tort, contract or otherwise, in which the plaintiff seeks damages by reason of legal, medical, hospital, or other healing art malpractice, no punitive, exemplary, vindictive or aggravated damages shall be allowed.\" 735 ILCS 5/2-1115 (West 2002).\nThe appellate court rejected Burke's position, over the dissent of one justice. It viewed Tri-G's lost punitive damages in the underlying case as an element of compensatory damages in the malpractice action, and held that such compensatory damages were not prohibited by Code of Civil Procedure section 2-1115. 353 Ill. App.3d at 226-32, 288 Ill.Dec. 580, 817 N.E.2d 1230. In reaching this result, the appellate court acknowledged the divergence of authority on this issue. The court recognized that courts in New York and California have held, based on public policy, that lost punitive damages are not recoverable in a legal malpractice action. 353 Ill.App.3d at 226-27, 288 Ill.Dec. 580, 817 N.E.2d 1230 (citing Ferguson v. Lieff, Cabraser, Heimann & Bernstein, LLP, 30 Cal.4th 1037, 69 P.3d 965, 135 Cal.Rptr.2d 46 (2003), and Summerville v. Lipsig, 270 A.D.2d 213, 704 N.Y.S.2d 598 (2000)).\nThe appellate court discussed Ferguson, which presented several reasons for prohibiting recovery of lost punitive damages in legal malpractice actions. First, according to Ferguson, allowing such recovery would defeat the punitive and deterrent purposes of punitive damages because the negligent attorney in the legal malpractice action is usually not the tortfeasor who committed the intentional or malicious acts that gave rise to the punitive damages claim in the underlying case. Therefore, imposing liability for lost punitive damages on the negligent attorney would neither punish the culpable tortfeasor nor deter that tortfeasor and others from committing similar wrongful acts in the future. Also, the amount of the award bears no relationship to the gravity of the negligent attorney's misconduct or the attorney's wealth. 353 Ill.App.3d at 227, 288 Ill.Dec. 580, 817 N.E.2d 1230, discussing Ferguson, 30 Cal.4th at 1046-48, 69 P.3d at 970-71, 135 Cal.Rptr.2d at 52-54; see Summerville, 270 A.D.2d at 213, 704 N.Y.S.2d at 599.\nSecond, according to Ferguson, allowing recovery of lost punitive damages in legal malpractice actions would violate public policy against speculative damages for several reasons. Compensatory damages in a legal malpractice action requires an objective determination. However, an award of punitive damages is an expression of the jury's moral condemnation and thus necessarily requires a moral judgment. Because moral judgments are inherently subjective, a jury assessing damages in a legal malpractice action cannot objectively determine whether punitive damages would have been awarded or the proper amount of those damages with any legal certainty. Also, the standards of proof for compensatory and punitive damages differ. Accordingly, the standard of proof for lost punitive damages would be a standard in a standard. This pragmatic difficulty is so complex that it militates against recovery of such damages. 353 Ill.App.3d at 227, 288 Ill.Dec. 580, 817 N.E.2d 1230, discussing *414 Ferguson, 30 Cal.4th at 1048-49, 69 P.3d at 971-72, 135 Cal.Rptr.2d at 54-55.\nLastly, as the Ferguson court discussed, allowing malpractice plaintiffs to recover lost punitive damages would exact a societal cost. Exposing attorneys to such liability would likely increase legal malpractice premiums, cause insurers to exclude coverage for these damages, or discourage insurers from providing professional liability insurance in the jurisdiction. This financial burden on attorneys would probably make it more difficult and costly for consumers to obtain legal services, or to obtain recovery for legal malpractice. 353 Ill.App.3d at 227, 288 Ill.Dec. 580, 817 N.E.2d 1230, discussing Ferguson, 30 Cal.4th at 1050, 69 P.3d at 972-73, 135 Cal.Rptr.2d at 55-56. Further, there is no compelling reason to take these risks. The recovery of lost punitive damages is not necessary to make a successful plaintiff whole in a legal malpractice action. Rather, a plaintiff is made whole by compensatory damages and punitive damages constitute an undeserved windfall. 353 Ill. App.3d at 227, 288 Ill.Dec. 580, 817 N.E.2d 1230, discussing Ferguson, 30 Cal.4th at 1050-51, 69 P.3d at 973, 135 Cal.Rptr.2d at 56.\nThe appellate court recognized that the view taken by the courts of California and New York is not universally accepted. Courts in several jurisdictions have held that a plaintiff in a legal malpractice action may recover as compensatory damages those damages that the plaintiff would have been awarded as punitive damages in the underlying action. 353 Ill.App.3d at 226-27, 288 Ill.Dec. 580, 817 N.E.2d 1230 (citing Jacobsen v. Oliver, 201 F.Supp.2d 93 (D.C.2002) (interpreting District of Columbia law), Haberer v. Rice, 511 N.W.2d 279 (S.D.1994), Scognamillo v. Olsen, 795 P.2d 1357 (Colo.App.1990), Elliott v. Videan, 164 Ariz. 113, 791 P.2d 639 (1989), and Hunt v. Dresie, 241 Kan. 647, 740 P.2d 1046 (1987)). Rather than focusing on the purpose behind punitive damages, these courts have focused on the concept of compensatory damages. 353 Ill.App.3d at 227-28, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nCompensatory damages for negligence are those which flow directly and proximately from a defendant's breach of duty owed to a plaintiff. In a legal malpractice action based on an attorney's breach of duty to represent the client in a prior case, it is the defendant attorney's conduct and its consequences which govern the analysis of damages. See Scognamillo, 795 P.2d at 1361. \"If an attorney's negligence is the cause of dismissal of the underlying claim, the proper measure of damages is all compensatory and punitive damages awarded by the jury in the trial of the case within a case.\" Elliott, 164 Ariz. at 119-20, 791 P.2d at 645-46. From the vantage point of the underlying case, some of a plaintiff's damages might be designated \"punitive\" damages. However, from the vantage point of the legal malpractice action, all the damages are simply those which proximately resulted from the attorney's negligence. Indeed, they are no longer properly called punitive damages. Hunt, 241 Kan. at 661, 740 P.2d at 1057. Thus, the punitive damages assessed in the underlying case \"are part and parcel\" of the damages which the plaintiff suffered as a result of the defendant's alleged negligence. See Haberer, 511 N.W.2d at 288; Scognamillo, 795 P.2d at 1361.\nThese courts have also reasoned that allowance of lost punitive damages in a legal malpractice action furthers the goal of deterrence: \"Attorneys who appreciate that they will be liable in malpractice actions for `lost punitives' will be motivated to exercise reasonable care in investigating or defending punitive damages claims.\" *415 Jacobsen, 201 F.Supp.2d at 101-02, citing Hunt, 241 Kan. at 661, 740 P.2d at 1057.\nAfter discussing the two conflicting approaches, the appellate court adopted the view of the latter group of jurisdictions and concluded that it should regard lost punitive damages in the underlying case as compensatory damages in the malpractice case. In its view,\n\"the proper focus of our analysis [is] what would make the plaintiff whole with respect to the defendant attorney's negligence. When, as in this case, a jury has determined that the plaintiff would have been entitled to punitive damages but for the negligence of the attorney, then such damages must be recoverable in order for the plaintiff to be made whole. We note that this result is consistent with the general principle in this state that `[a] legal malpractice plaintiff is entitled to recover those sums which would have been recovered if the underlying suit had been successfully prosecuted.' Weisman v. Schiller, Ducanto & Fleck, 314 Ill.App.3d 577, 580 [248 Ill.Dec. 143, 733 N.E.2d 818] (2000). Based on (1) our view of lost punitive damages as compensatory and (2) the fact that such damages are not imposed for the purpose of punishing the attorney who commits malpractice, we hold that section 2-1115 does not bar the recovery of lost punitive damages in a legal malpractice case.\" 353 Ill.App.3d at 228-29, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nThe appellate court lastly concluded that the evidence adduced at trial justified the award of punitive damages. 353 Ill.App.3d at 232, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nThe dissenting justice, who rejected the majority's approach, observed that punitive damages are not awarded for compensation and have nothing to do with a plaintiff's loss or making the plaintiff whole. Rather, the purpose of punitive damages is similar to a criminal penalty, i.e., to punish a defendant for wrongdoing and to deter that defendant and others from committing similar misconduct in the future. Also, section 2-1115 of the Code of Civil Procedure (735 ILCS 5/2-1115 (West 2002)) bars recovery of punitive damages in a legal malpractice action. The dissent viewed the appellate court majority as attempting to \"circumvent\" these limitations by \"mischaracterizing\" lost punitive damages as compensatory damages. 353 Ill. App.3d at 233-34, 288 Ill.Dec. 580, 817 N.E.2d 1230 (Gilleran Johnson, J., concurring in part and dissenting in part). The dissent also observed: \"It is inconsistent with Illinois public policy to transfer punishment and deterrence intended for a malicious, fraudulent, or deliberately oppressive wrongdoer to another who has not acted with such a wanton disregard.\" 353 Ill.App.3d at 234, 288 Ill.Dec. 580, 817 N.E.2d 1230 (Gilleran Johnson, J., concurring in part and dissenting in part). Based on these considerations, the dissenting justice concluded that \"a plaintiff may not recover punitive damages lost by reason of attorney malpractice.\" 353 Ill. App.3d at 236, 288 Ill.Dec. 580, 817 N.E.2d 1230 (Gilleran Johnson, J., concurring in part and dissenting in part).\nBurke assigns error to the reasoning and conclusion of the appellate court majority on this issue, and points to the dissent as \"cogent and correct, and ably describ[ing] why the majority was wrong and why this Court should reverse the award of underlying punitive damages.\" Supported by amici, Burke focuses on the nature of punitive damages. It is well established that such damages are not awarded as compensation to a plaintiff. Rather, they serve to punish the defendant and to deter the defendant and others from committing similar misconduct in the *416 future. Misconduct for which punitive damages are imposed must be outrageous, because it is committed with an evil motive or a reckless indifference to the rights of others. See Loitz v. Remington Arms Co., 138 Ill.2d 404, 414-16, 150 Ill.Dec. 510, 563 N.E.2d 397 (1990) (collecting authorities). Indeed, the punitive and deterrent function of punitive damages is similar to that of a criminal penalty. \"Because of their penal nature, punitive damages are not favored in the law, and the courts must take caution to see that punitive damages are not improperly or unwisely awarded.\" Kelsay v. Motorola, Inc., 74 Ill.2d 172, 188, 23 Ill.Dec. 559, 384 N.E.2d 353 (1978).\nBurke correctly observes that it was not a wanton or malicious wrongdoer. Elgin Federal was. Elgin Federal, however, will bear none of the consequences of its wrongdoing. If the punitive damage award is allowed to stand, those consequences will fall entirely on Burke.\nBurke argues that punitive damages imposed against a wrongdoer in the underlying case do not become compensatory when paid by the attorney in the legal malpractice action. In Burke's view, shifting the punishment from the wrongdoer in the underlying case to the law firm in the legal malpractice action does not make the punishment less punitive. Rather, Burke continues, it makes the punishment unjust because it is inflicted on the wrong party.\nIn support of its argument, Burke notes the following comment from the Restatement (Third) of the Law Governing Lawyers:\n\"A few decisions allow a plaintiff to recover from a lawyer punitive damages that would have been recovered from the defendant in an underlying action but for the lawyer's misconduct. However, such recovery is not required by the punitive and deterrent purposes of punitive damages. Collecting punitive damages from the lawyer will neither punish nor deter the original tortfeasor and calls for a speculative reconstruction of a hypothetical jury's reaction.\" Restatement (Third) of the Law Governing Lawyers \u00a7 53, Comment h, at 393 (2000).\nAccording to Burke: \"A lost opportunity to punish does not become `compensatory' and should not be recoverable from someone other than the person for whom the punishment was intended.\"\nBurke further cites section 2-1115 of the Code of Civil Procedure, which bars recovery of punitive damages in a legal malpractice action. 735 ILCS 5/2-1115 (West 2002). Burke reasons that if punitive damages cannot, by statute, be imposed on a law firm in a legal malpractice action for its own negligence, it follows that punitive damages cannot be imposed on the firm for the intentional or reckless wrongdoing of someone else. Burke contends that the appellate court erred \"by shifting Elgin Federal's punishment onto Burke.\"\nBurke next contends that the award of lost punitive damages that would have been imposed against Elgin Federal in the underlying case \"grants Tri-G a windfall\" in this legal malpractice action. Burke notes this court's recognition of the effect of punitive damages imposed against a defendant on the plaintiff's compensation. See Mattyasovszky v. West Towns Bus Co., 61 Ill.2d 31, 36, 330 N.E.2d 509 (1975) (\"The fine that is imposed upon the defendant in a criminal case goes to the State. But in a civil case the exaction taken from the defendant, under the label of exemplary damages, becomes a windfall for the plaintiff\"). According to Burke, granting a legal malpractice plaintiff the punitive damages it would have recovered in the underlying case \"is not a `make-whole,' compensatory recovery. It is a windfall.\"\n*417 In further support of its position, Burke urges this court to adopt what it considers to be the \"well-reasoned\" rationale of the above-mentioned Ferguson and Summerville decisions. Burke also criticizes the cases that allow recovery of lost punitive damages in the underlying case as compensatory damages in the legal malpractice action. In Burke's view, the case law allowing such recovery is wrongfully decided, or at least factually distinguishable.\nFinally, Burke warns that allowing recovery for lost punitive damages in the underlying case as compensatory damages in a legal malpractice action will necessarily result in increased professional liability insurance premiums or denials of coverage. According to Burke, attorneys representing plaintiffs will be encouraged to seek punitive damages in cases where they would not have done so, motivated by a fear that \"their failure to make the claim could be the seed from which a malpractice claim might grow.\"\nWhether a plaintiff in a legal malpractice action may recover as an element of damages punitive damages he or she would have recovered in the underlying action but for the attorney's professional negligence is a question of first impression in Illinois. It is a question on which reasonable minds can certainly disagree. The dissent in the appellate court, the dissent which follows in this case, and the split among courts from other jurisdictions illustrates that sound arguments can be made for both sides of the issue. In the end, however, we have concluded that the approach taken by the courts of California and New York and urged by Burke in this case represents the sounder view. Lost punitive damages are not recoverable in a subsequent action for legal malpractice.\nDisallowing lost punitive damages means that plaintiffs in legal malpractice actions may not receive as much money as they might have if the underlying action had been handled properly. Compensating plaintiffs, however, is but one of several factors that must be balanced in assessing whether lost punitive damages should be recognized in legal malpractice actions. There is no reason in logic or the law why it should be given preeminent effect where, as here, the jury has already awarded full compensation to the plaintiff for all the damages it actually sustained.\nPunitive, or exemplary, damages are not awarded as compensation, but serve instead to punish the offender and to deter that party and others from committing similar acts of wrongdoing in the future. Loitz v. Remington Arms Co., 138 Ill.2d at 414, 150 Ill.Dec. 510, 563 N.E.2d 397. Allowing Tri-G to recover its lost punitive damages from Burke would not advance that policy in any way. To the contrary, by holding the firm liable for the intentional or willful and wanton misconduct of a third party, it tears the concept of punitive damages from its doctrinal moorings.\nSection 2-1115 of the Code of Civil Procedure (735 ILCS 5/2-1115 (West 2002)) expressly bars recovery of punitive damages in a legal malpractice action. By characterizing lost punitive damages as \"compensatory,\" Tri-G is attempting to evade reach of this statute. In our view, its efforts are ultimately unpersuasive. If the General Assembly has determined that lawyers cannot be compelled to pay punitive damages based on their own misconduct, as section 2-1115 decrees, it would be completely nonsensical to hold that they can nevertheless be compelled to pay punitive damages attributable to the misconduct of others. Any construction of the *418 law that permits such a result would be absurd and unjust.[1]\nFor the foregoing reasons, we reverse that portion of the appellate court's judgment which upheld the award of $1,168,775 in lost punitive damages to Tri-G. The judgment in favor of Tri-G and against Burke is hereby reduced by that amount. We also reverse the appellate court's judgment to the extent that it sustained the full $1,168,775 in compensatory damages awarded to the company by the jury. Pursuant to Supreme Court Rule 366(a)(5) (155 Ill.2d R. 366(a)(5)), we enter a remittitur of $420,213 on the compensatory damage award and affirm the judgment entered in favor of Tri-G for the reduced amount of $748,562. If Tri-G does not consent to the entry of a remittitur within 21 days of the filing of this opinion, or any further period in which the mandate is stayed, the cause will be remanded to the circuit court of McHenry County for a new trial solely on the issue of damages. In all other respects, the judgment of the appellate court is affirmed.\nAppellate court judgment affirmed in part and reversed in part; circuit court judgment affirmed in part and reversed in part; remittitur entered.\nChief Justice THOMAS and Justices KILBRIDE and GARMAN concurred in the judgment and opinion.\nJustice FREEMAN concurred in part and dissented in part, with opinion, joined by Justices McMORROW and FITZGERALD.\nJustice FREEMAN, concurring in part and dissenting in part:\nMy colleagues in the majority hold that lost punitive damages are not recoverable in a legal malpractice action. See 221 Ill.2d 257-68, 305 Ill.Dec. at 607-13, 856 N.E.2d at 412-18. The majority offers insufficient justification for allowing legal malpractice plaintiffs to be candidly undercompensated. Further, the majority disregards the fundamental distinction between the nature of the damages that would have been awarded to Tri-G in the underlying case and the nature of the damages that were actually awarded to Tri-G in this legal malpractice action. Accordingly, I dissent specifically from this portion of the court's opinion.\nAfter recognizing that this \"is a question on which reasonable minds can certainly disagree,\" and \"that sound arguments can be made for both sides of the issue,\" this court now holds: \"Lost punitive damages are not recoverable in a subsequent action for legal malpractice.\" 221 Ill.2d 266-67, 305 Ill.Dec. at 612, 856 N.E.2d at 417. The court then frankly concedes: \"Disallowing lost punitive damages means that plaintiffs in legal malpractice actions may not receive as much money as they might have if the underlying action had been handled properly.\" 222 Ill.2d 267, 305 Ill. Dec. at 612, 856 N.E.2d at 417. After making this candid admission, my colleagues *419 in the majority attempt to justify this gross injustice by positing: \"Compensating plaintiffs, however, is but one of several factors that must be balanced in assessing whether lost punitive damages should be recognized in legal malpractice actions.\" 222 Ill.2d 267, 305 Ill.Dec. at 612, 856 N.E.2d at 417.\nThis declaration leads the reader to anticipate a thorough discussion of the reasons why this court is going to allow legal malpractice plaintiffs to be candidly undercompensated. However, the court points to only one reason for its conclusion: the attorney in the legal malpractice action was not the wrongdoer in the underlying case. I cannot accept this reasoning.\nA bare majority of this court accepts Burke's emphasis on the nature of punitive damages and relies solely thereon in bluntly denying full compensation to legal malpractice plaintiffs. However, I consider reference to the nature of compensatory damages to be more helpful in resolving this case. An award of compensatory damages is intended to compensate an injured person for the wrong or injury that person sustained. The goal is to make the injured party whole and restore the injured party, as nearly as reasonably possible, to the position in which he or she would have held absent the injury. See Harris v. Peters, 274 Ill.App.3d 206, 207, 210 Ill.Dec. 812, 653 N.E.2d 1274 (1995); Rodrian v. Seiber, 194 Ill.App.3d 504, 508-09, 141 Ill.Dec. 585, 551 N.E.2d 772 (1990); Roark v. Musgrave, 41 Ill.App.3d 1008, 1011, 355 N.E.2d 91 (1976); 25 C.J.S. Damages \u00a7 21 (2002). In this case, the appellate court reasoned:\n\"Of course, a punitive damages award was not imposed against [Burke]. The verdict form designates the $2,337,550 simply as `damages,' and one of the special interrogatories specifies what amount of that award represents punitive damages that Tri-G would have recovered but for [Burke's] negligence. Thus, the judgment against [Burke] is designed to compensate, not punish.\" 353 Ill.App.3d at 229, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nI agree. I view the punitive damages that would have been imposed against Elgin Federal in the underlying case as an element of Tri-G's compensatory damages in this legal malpractice action.\nIt is indisputable that Burke's negligence deprived Tri-G of a punitive damages award and that Tri-G will not receive all sums to which it was entitled in the underlying case unless Burke is directed to pay an amount equal to the underlying punitive damages. \"The legal malpractice action places the plaintiff in the same position he or she would have occupied but for the attorney's negligence.\" Bloome v. Wiseman, Shaikewitz, McGivern, Wahl, Flavin & Hesi, P.C., 279 Ill.App.3d 469, 478, 216 Ill.Dec. 197, 664 N.E.2d 1125 (1996). Thus, a plaintiff's damages in a legal malpractice action are limited to the actual amount the plaintiff would have recovered had he or she been successful in the underlying case. Eastman, 188 Ill.2d at 412, 242 Ill.Dec. 623, 721 N.E.2d 1154; see Weisman v. Schiller, Ducanto & Fleck, 314 Ill.App.3d 577, 580, 248 Ill.Dec. 143, 733 N.E.2d 818 (2000) (\"A legal malpractice plaintiff is entitled to recover those sums which would have been recovered if the underlying suit had been successfully prosecuted).\" In this case, \"[Burke] simply has been called to account for the full consequences of its professional negligence.\" 353 Ill.App.3d at 229, 288 Ill.Dec. 580, 817 N.E.2d 1230.\nFurther, this court relies on section 2-1115 of the Code of Civil Procedure, which bars recovery of punitive damages in a legal malpractice action. 735 ILCS 5/2-1115 *420 (West 2002). My colleagues in the majority explain:\n\"By characterizing lost punitive damages as `compensatory,' Tri-G is attempting to evade reach of this statute. In our view, its efforts are ultimately unpersuasive. If the General Assembly has determined that lawyers cannot be compelled to pay punitive damages based on their own misconduct, as section 2-1115 decrees, it would be completely nonsensical to hold that they can nevertheless be compelled to pay punitive damages attributable to the misconduct of others. Any construction of the law that permits such a result would be absurd and unjust.\" 222 Ill.2d 267-68, 305 Ill.Dec. at 612-13, 856 N.E.2d at 417-18.\nMy colleagues in the majority misperceive the nature of the damages that the jury awarded in this legal malpractice action.\nAs revealed by a special interrogatory, the jury in this legal malpractice action awarded Tri-G $1,168,775 in compensatory damages for lost punitive damages that would have been imposed against Elgin Federal in the underlying case. The jury's assessment of lost punitive damages was not a finding that Burke's conduct was outrageously willful and wanton; it was a finding that Elgin Federal's conduct was. Although Burke's conduct was only negligent, it nevertheless caused Tri-G to lose its entire underlying claim. See Elliott v. Videan, 164 Ariz. 113, 119, 791 P.2d 639, 645 (1989). In this case, the appellate court reasoned as follows:\n\"[A]s we noted above, a punitive damages award has not been imposed against any party to this dispute. Rather, [Burke] has been made to compensate Tri-G for the recovery, composed in part of punitive damages, that was denied it by [Burke's] negligence. Elgin Federal, the party that should have been punished, was insulated by [Burke's] negligence, and now [Burke] is being held liable for the full consequences of that negligence, in accord with the dictate that a legal malpractice plaintiff is entitled to whatever sums it would have recovered in the underlying action but for the malpractice. [Burke] is not being punished; it is being made to compensate.\" 353 Ill.App.3d at 230, 288 Ill. Dec. 580, 817 N.E.2d 1230.\nI agree with the appellate court's view of the record.[2]\nThis court expressly adopts the rationale of the above-discussed Ferguson and Summerville decisions. 222 Ill.2d 266, 305 Ill. Dec. at 612, 856 N.E.2d at 417. However, I view as better reasoned the decisions that allow the recovery of lost punitive damages in the underlying case as an element of compensatory damages in the legal malpractice action. See Jacobsen v. Oliver, 201 F.Supp.2d 93 (D.C.2002) (interpreting District of Columbia law); Haberer v. Rice, 511 N.W.2d 279 (S.D.1994); Scognamillo v. Olsen, 795 P.2d 1357 (Colo.App. 1990); Elliott v. Videan, 164 Ariz. 113, 791 P.2d 639 (1989); Hunt v. Dresie, 241 Kan. 647, 740 P.2d 1046 (1987).\nThese cases are in accord with a fundamental principle of tort law. \"The general rule of damages in a tort action is that `the wrongdoer is liable for all injuries resulting *421 from the wrongful acts * * *, provided the particular damages are the legal and natural consequences of the wrongful act imputed to the defendant, and are such as might reasonably have been anticipated.'\" Haudrich v. Howmedica, Inc., 169 Ill.2d 525, 543, 215 Ill.Dec. 108, 662 N.E.2d 1248 (1996), quoting Siemieniec v. Lutheran General Hospital, 117 Ill.2d 230, 259, 111 Ill.Dec. 302, 512 N.E.2d 691 (1987). I agree with the court in Jacobsen that \"permitting recovery of punitive damages as compensatory damages in a legal malpractice action is consistent with [this principle].\" Jacobsen, 201 F.Supp.2d at 102, citing Haymon v. Wilkerson, 535 A.2d 880, 885 (D.C.1987) (\"The normal measure of tort damages is the amount which compensates the plaintiff for all of the damages proximately caused by the defendant's negligence\"). I agree with these cases that, from the vantage point of the legal malpractice action, all the damages are simply those which proximately resulted from the attorney's negligence. Accordingly, the punitive damages assessed in the underlying case are included in the damages which the plaintiff suffered as a result of the defendant's negligence. See, e.g., Jacobsen, 201 F.Supp.2d at 100-02; Haberer, 511 N.W.2d at 288; Elliott, 164 Ariz. at 119-20, 791 P.2d at 645-46. As the dissent in Ferguson correctly explained: \"In a malpractice action, punitive damages lost because of attorney error are not true punitive damages but are merely a measure of some of the injury resulting from the attorney's malpractice. Thus, lost punitive damages are a form of compensatory damages.\" (Emphasis in original.) Ferguson, 30 Cal.4th at 1055, 69 P.3d at 976, 135 Cal.Rptr.2d at 59 (Kennard, J., concurring and dissenting, joined by Werdegar and Moreno, JJ.).\nTo be sure, the divergence of opinion in the appellate court's decision as well as in the above-cited cases from foreign jurisdictions reveals a \"[r]ough equality in the persuasiveness of the competing arguments.\" C. Thatcher, Recovery of \"Lost Punitive Damages\" as \"Compensatory Damages\" in Legal Malpractice Actions: Transference of Liability or Transformation of Character?, 49 S.D. L.Rev. 1, 3-4 (2003). However, after careful consideration, I would adopt the reasoning of the courts that have allowed recovery of lost punitive damages in the underlying case as compensatory damages in the legal malpractice action. As a learned commentator recently explained:\n\"Even if the competing arguments are considered to be about equally persuasive, it does not seem appropriate * * * to adopt an exception to the general rule entitling plaintiff-clients in legal malpractice actions to recover the full value of their lost claim, including any punitive damages they would have collected but for the defendant-lawyer's negligence. * * * [T]he punitive damages portion of the award the client should have collected from the original tortfeasor is legitimately transformed into a portion of the compensatory damages the client must be able to recover from the negligent lawyer in order to make the client whole and vindicate the client's expectation interest.\" (Emphasis omitted.) 49 S.D. L.Rev. at 30.\nI agree with the appellate court that section 2-1115 of the Code of Civil Procedure does not bar recovery of lost punitive damages in a legal malpractice action.\nAlthough I would have upheld the award of lost punitive damages as a component of Tri-G's compensatory damages in the legal malpractice action, I note that a remittitur would have been required. The jury assessed Tri-G's compensatory and punitive damages in the underlying case in the amount of $1,168,775 for each component, a ratio of one-to-one. Earlier in this opinion, *422 this court entered a remittitur of $420,213 in compensatory damages, reducing the compensatory damages award to $748,562. Consequently, to maintain the jury's one-to-one ratio of compensatory and punitive damages, I would have entered a remittitur of $420,213 in punitive damages, thereby reducing the punitive damages award to $748,562. Therefore, in my view, the total amount remitted should be $840,426, thereby reducing the total amount of Tri-G's award to $1,497,124. See 155 Ill.2d R. 366(a)(5).\nLastly, I agree with the court's conclusions regarding the following issues. The trial court's decision to allow Tri-G to recover damages for the 23 vacant lots and the 14 partially completed lots not specified in the 1981 complaint and the appellate court's review of that decision did not deprive Burke of procedural due process. 222 Ill.2d 242-47, 305 Ill.Dec. at 598-601, 856 N.E.2d at 403-06. The evidence supported the award of lost profits on the 14 partially completed lots. 222 Ill.2d 247-49, 305 Ill.Dec. at 601-03, 856 N.E.2d at 406-08. The jury's award of $1,168,775 was excessive and required a remittitur, thereby reducing Tri-G's compensatory damages award to $748,562. 222 Ill.2d 249-54, 305 Ill.Dec. at 603-05, 856 N.E.2d at 408-10. Also, the lower courts correctly rejected Tri-G's claim for judgment interest. 222 Ill.2d 254-58, 305 Ill.Dec. at 605-07, 856 N.E.2d at 410-12. Indeed, I embrace the court's analysis of these issues as though it were my own.\nFor the foregoing reasons, I concur in part and dissent in part.\nJustices McMORROW and FITZGERALD join in this partial concurrence and partial dissent.\nNOTES\n[1] Contrary to the claim made by Justice Freeman in his separate opinion, this characterization is not meant to castigate him or anyone else on the court. It is simply an application of the \"no absurdity\" rule for statutory construction. The rule has been formulated in various ways, but essentially it holds that statutes should be construed in a manner that avoids absurd, unreasonable, unjust or inconvenient results. See, e.g., In re Mary Ann P., 202 Ill.2d 393, 406, 269 Ill.Dec. 440, 781 N.E.2d 237 (2002). Our court invokes the rule frequently. It appeared in In re Donald A.G., 221 Ill.2d 234, 302 Ill.Dec. 735, 850 N.E.2d 172 (2006), an opinion we just filed, and is regularly cited by this court and our appellate court. Justice Freeman, himself, has discussed it in cases he has authored. See, e.g., Antunes v. Sookhakitch, 146 Ill.2d 477, 485-88, 167 Ill.Dec. 981, 588 N.E.2d 1111 (1992).\n[2] Parenthetically, the court correctly recognizes that this \"is a question on which reasonable minds can certainly disagree,\" and \"that sound arguments can be made for both sides of the issue.\" 222 Ill.2d 266-67, 305 Ill.Dec. at 612, 856 N.E.2d at 417. It is curious that my colleagues in the majority subsequently castigate this viewpoint of Tri-G, shared by their dissenting colleagues, as \"nonsensical\" and \"absurd and unjust.\" 222 Ill.2d 257-68, 305 Ill.Dec. at 612-13, 856 N.E.2d at 417-18. The use of such rhetoric in this case is unfortunate and uncivil.\n"} -{"text": "\n879 A.2d 1086 (2005)\n388 Md. 404\nBoard of Educ.\nv.\nHeister.\nCourt of Appeals of Maryland.\nGranted August 10, 2005.\nPetition for writ of certiorari granted on the motion of this Court.\n"} -{"text": "J-S30036-16\n\n\nNON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37\n\nCOMMONWEALTH OF PENNSYLVANIA IN THE SUPERIOR COURT OF\n PENNSYLVANIA\n Appellee\n\n v.\n\nRUBEN GONZALEZ\n\n Appellant No. 1077 EDA 2015\n\n\n Appeal from the Judgment of Sentence March 10, 2015\n In the Court of Common Pleas of Philadelphia County\n Criminal Division at No(s): CP-51-CR-0001498-2013\n\n\nBEFORE: GANTMAN, P.J., FORD ELLIOTT, P.J.E., and JENKINS, J.\n\nMEMORANDUM BY JENKINS, J.: FILED MAY 10, 2016\n\n Appellant Ruben Gonzalez appeals from the judgment of sentence\n\nentered in the Philadelphia County Court of Common Pleas following his open\n\nguilty plea to aggravated assault and conspiracy to commit aggravated\n\nassault.1 We affirm and grant counsel\u2019s petition to withdraw.\n\n At his guilty plea hearing, Appellant stipulated to the following facts:\n\n [O]n October 24[,] 2012[,] the complaining witness,\n Christopher Corisdeo [(\u201cVictim\u201d),] was high on PCP and\n walking down the [1900] block of East Dauphin Street\u2026.\n [Victim] was flailing his arms and he [struck] one of the\n codefendants in the face. That codefendant is Myleidi\n Rodriguez. Ms. Rodriquez at the time was the girlfriend of\n [Appellant]\u2026.\n\n\n\n____________________________________________\n\n\n1\n 18 Pa.C.S. \u00a7\u00a7 2702(a) and 903(c), respectively.\n\fJ-S30036-16\n\n\n As a result of witnessing that, [Appellant] along with\n several codefendants struck the victim. [V]ictim was\n knocked to the ground immediately. The defendants,\n Brandon Baez, Melvin Soto, Frank Justiniano, Aaron Webb,\n and Alex Webb proceeded to kick, punch, and stomp\n [Victim] in his face. [Victim] was dragged to an empty lot\n at the corner of Dauphin and Emerald Streets where the\n assault continued. Responding officers found [Victim\u2019s]\n body in a pool of blood. One of his eyes had fallen out of\n the socket. One of the codefendants, Mr. Frank Justiniano,\n was observed by witnesses and several of the\n codefendants gave statements saying that Mr. Justiniano\n picked up a cinder block at the end of the assault and\n dropped the cinder block on [Victim\u2019s] head.\n\n Every bone in [Victim\u2019s] face was fractured. He had to\n have his entire face reconstructed with titanium plate.\n [H]e had over 18 hours [of] surgery and now two years\n later he still suffers serious side effects including seizures,\n \u2026serious cognizant delays, memory issues, and\n depression.\n\nN.T., Guilty Plea, 12/02/2014, at 7-8.\n\n On January 11, 2013, a grand jury indicted Appellant with attempted\n\nmurder, aggravated assault, robbery, possession of an instrument of crime,\n\nand conspiracy to commit those crimes. On December 2, 2014, Appellant\n\ncompleted a written guilty plea, and the court conducted an oral guilty plea\n\ncolloquy. In exchange for pleading guilty to aggravated assault and\n\nconspiracy to commit aggravated assault, the other charges against\n\nAppellant were nolle prossed. Appellant indicated on his written guilty plea\n\nthat he was aware he could go to prison for twenty (20) to forty (40) years.\n\n On March 10, 2015, the court sentenced Appellant to six (6) to twenty\n\n(20) years\u2019 incarceration for aggravated assault and three (3) to twenty (20)\n\n\n -2-\n\fJ-S30036-16\n\n\nyears\u2019 incarceration for conspiracy. The court imposed the sentences\n\nconsecutively, resulting in an aggregate sentence of nine (9) to forty (40)\n\nyears\u2019 incarceration.\n\n On March 17, 2015, Appellant filed a motion to withdraw his guilty\n\nplea and for reconsideration of sentence, claiming he did not know his\n\nsentences could be imposed consecutively. On April 13, 2015, before the\n\ncourt had ruled on this motion, Appellant filed a motion to have his appellate\n\nrights re-instated nunc pro tunc, because he believed he had missed the\n\ndeadline to file a timely appeal. That same day, the court reinstated\n\nAppellant\u2019s appellate rights nunc pro tunc, and Appellant filed a timely notice\n\nof appeal on April 14, 2015.2 On April 15, 2015, the court ordered Appellant\n\nto file a concise statement of errors complained of on appeal pursuant to\n\nPa.R.A.P. 1925(b), and he timely complied on April 20, 2015.\n\n On October 26, 2015, Appellant\u2019s counsel filed a petition for leave to\n\nwithdraw along with an Anders brief.\n\n____________________________________________\n\n\n2\n Neither the docket nor the certified record reflects that the court ruled on\nAppellant\u2019s motion to withdraw his guilty plea and for reconsideration of\nsentence. In its opinion, however, the trial court states: \u201cThe motions were\ndenied.\u201d Trial Court Pa.R.A.P. 1925(a) Opinion, filed July 13, 2015, at 1. If\nthe trial court did not rule on Appellant\u2019s post sentence motion, it would\nhave been denied by operation of law July 15, 2015. See Pa.R.Crim.P.\n720(B)(3)(a). Because the trial court indicated that it denied Appellant\u2019s\nmotion and because it reinstated Appellant\u2019s appellate rights nunc pro tunc,\nwe deem this appeal properly before us, despite the ambiguous procedural\nhistory.\n\n\n\n\n -3-\n\fJ-S30036-16\n\n\n As a preliminary matter, appellate counsel seeks to withdraw his\n\nrepresentation pursuant to Anders v. California, 386 U.S. 738, 87 S.Ct.\n\n1396, 18 L.Ed.2d 493 (1967) and Commonwealth v. Santiago, 978 A.2d\n\n349 (Pa.2009). Prior to withdrawing as counsel on a direct appeal under\n\nAnders, counsel must file a brief that meets the requirements established\n\nby our Supreme Court in Santiago. The brief must:\n\n (1) provide a summary of the procedural history and facts, with\n citations to the record; (2) refer to anything in the record that\n counsel believes arguably supports the appeal; (3) set forth\n counsel\u2019s conclusion that the appeal is frivolous; and (4) state\n counsel\u2019s reasons for concluding that the appeal is frivolous.\n Counsel should articulate the relevant facts of record, controlling\n case law, and/or statutes on point that have led to the\n conclusion that the appeal is frivolous.\n\nSantiago, 978 A.2d at 361. Counsel must also provide a copy of the\n\nAnders brief to the appellant, together with a letter that advises the\n\nappellant of his or her right to \u201c(1) retain new counsel to pursue the appeal;\n\n(2) proceed pro se on appeal; or (3) raise any points that the appellant\n\ndeems worthy of the court\u2019s attention in addition to the points raised by\n\ncounsel in the Anders brief.\u201d Commonwealth v. Nischan, 928 A.2d 349,\n\n353 (Pa.Super.2007), appeal denied, 936 A.2d 40 (Pa.2007). Substantial\n\ncompliance with these requirements is sufficient. Commonwealth v.\n\nWrecks, 934 A.2d 1287, 1290 (Pa.Super.2007). \u201cAfter establishing that the\n\nantecedent requirements have been met, this Court must then make an\n\nindependent evaluation of the record to determine whether the appeal is, in\n\n\n\n\n -4-\n\fJ-S30036-16\n\n\n\nfact, wholly frivolous.\u201d Commonwealth v. Palm, 903 A.2d 1244, 1246\n\n(Pa.Super.2006).\n Here, counsel filed a petition for leave to withdraw as counsel along\n\nwith an Anders brief and a letter advising Appellant of his right to obtain\n\nnew counsel or proceed pro se to raise any points he deems worthy of the\n\ncourt\u2019s attention in addition to the issues raised in the Anders brief. The\n\npetition states counsel determined there were no non-frivolous issues to be\n\nraised on appeal, notified Appellant of the withdrawal request, supplied him\n\nwith a copy of the Anders brief, and sent him a letter explaining his right to\n\nproceed pro se or with new, privately-retained counsel to raise any\n\nadditional points or arguments that Appellant believed had merit. In the\n\nAnders brief, counsel provides a summary of the facts and procedural\n\nhistory of the case with citations to the record, refers to evidence of record\n\nthat might arguably support the issue raised on appeal, provides citations to\n\nrelevant case law, and states his conclusion that the appeal is wholly\n\nfrivolous and his reasons therefor. See Anders Brief, at 7-9, 13-19.\n\nAccordingly, counsel has substantially complied with the technical\n\nrequirements of Anders and Santiago.\n\n As Appellant filed neither a pro se brief nor a counseled brief with new,\n\nprivately-retained counsel, we review this appeal based on the issues raised\n\nin the Anders brief:\n\n WHETHER [APPELLANT\u2019S] GUILTY PLEA WAS A KNOWING\n AND VOLUNTARY PLEA[?]\n\n -5-\n\fJ-S30036-16\n\n\n\n WHETHER THE TRIAL COURT SHOULD HAVE PERMITTED\n [APPELLANT] TO WITHDRAW HIS GUILTY PLEA WHERE\n IMMEDIATELY AFTER IMPOSITION OF SENTENCE AT THE\n BAR OF THE COURT [APPELLANT] ORALLY REQUESTED\n WITHDRAWAL[?]\n\nAnders Brief at 6. 3\n\n Appellant claims the trial court abused its discretion by denying his\n\nmotion to withdraw his guilty plea, after imposition of sentence, because he\n\ndid not enter into it knowingly and voluntarily. We disagree.\n\n This Court\u2019s scope of review of a trial court\u2019s ruling on a motion to\n\nwithdraw a plea is to review the record of the plea and any post-sentence\n\nproceeding. See Commonwealth v. Moser, 921 A.2d 526, 528-530\n\n(Pa.Super.2007). Our standard of review is whether the trial court abused\n\nits discretion. Id. at 530.\n\n \u201c[T]he law does not require that [the defendant] be pleased with the\n\noutcome of his decision to enter a plea of guilty: All that is required is that\n\n[his] decision to plead guilty be knowingly, voluntarily, and intelligently\n\nmade.\u201d Commonwealth v. Willis, 68 A.3d 997, 1002 (Pa.Super.2013)\n\n____________________________________________\n\n\n3\n Appellant also listed the following issue in the Anders Brief:\n\n WHETHER THERE IS ANYTHING IN THE RECORD THAT\n MIGHT ARGUABLY SUPPORT THE APPEAL THAT OBVIATES\n A CONCLUSION THAT THE APPEAL IS FRIVOLOUS[?]\n\nAnders Brief at 6. This issue reflects counsel\u2019s request to withdraw, which\nwe grant herein after a discussion of Appellant\u2019s other issues, infra.\n\n\n\n -6-\n\fJ-S30036-16\n\n\n(quoting Commonwealth v. Anderson, 995 A.2d 1184, 1192\n\n(Pa.Super.2010), appeal denied, 9 A.3d 626 (Pa.2010) (alterations in\n\noriginal)). A guilty plea colloquy must \u201caffirmatively demonstrate the\n\ndefendant understood what the plea connoted and its consequences.\u201d Id.\n\n(quoting Commonwealth v. Lewis, 708 A.2d 497, 501 (Pa.Super.1998)).\n\nNo absolute right to withdraw a plea exists. Commonwealth v. Flick, 802\n\nA.2d 620, 623 (Pa.Super.2002). After a defendant enters a guilty plea, \u201cit is\n\npresumed that he was aware of what he was doing, and the burden of\n\nproving involuntariness is upon him.\u201d Commonwealth v. Bedell, 954 A.2d\n\n1209, 1212 (Pa.Super.2008).\n\n The standard for withdrawal of a guilty plea after the imposition of\n\nsentence is much higher than the standard applicable to a pre-sentence\n\nmotion to withdraw. Commonwealth v. Byrne, 833 A.2d 729, 737\n\n(Pa.Super.2003). A defendant must demonstrate that manifest injustice\n\nwould result if the court were to deny his post-sentence motion to withdraw\n\nthe plea. Id. \u201c[D]isappointment by a defendant in the sentence actually\n\nimposed does not represent manifest injustice.\u201d Id. \u201cManifest injustice may\n\nbe established if the plea was not tendered knowingly, intelligently, and\n\nvoluntarily.\u201d Commonwealth v. Hodges, 789 A.2d 764, 765\n\n(Pa.Super.2002); see also Pa.R.Crim.P. 590(a)(3). \u201cDetermining whether a\n\ndefendant understood the connotations of his plea and its consequences\n\n\n\n\n -7-\n\fJ-S30036-16\n\n\nrequires an examination of the totality of the circumstances surrounding the\n\nplea.\u201d Commonwealth v. Moser, 921 A.2d 526, 529 (Pa.Super.2007).\n\n \u201cA valid plea colloquy must delve into six areas: 1) the nature of the\n\ncharges, 2) the factual basis of the plea, 3) the right to a jury trial, 4) the\n\npresumption of innocence, 5) the sentencing ranges, and 6) the plea court\u2019s\n\npower to deviate from any recommended sentence.\u201d Commonwealth v.\n\nMorrison, 878 A.2d 102, 107 (Pa.Super.2005), appeal denied, 887 A.2d\n\n1241 (Pa.2005); Comment to Pa.R.Crim.P. 590(A)(2). A written plea\n\ncolloquy that is read, completed and signed by the defendant and made part\n\nof the record may serve as the defendant\u2019s plea colloquy when\n\nsupplemented by an oral, on-the-record examination. Morrison, 878 A.2d\n\nat 108 (citing Comment to Pa.R.Crim.P. 590). Even if \u201cthere is an omission\n\nor defect in the guilty plea colloquy, a plea of guilty will not be deemed\n\ninvalid if the circumstances surrounding the entry of the plea disclose that\n\nthe defendant had a full understanding of the nature and consequences of\n\nhis plea and that he knowingly and voluntarily decided to enter the plea.\u201d\n\nFluharty, 632 A.2d at 315. Further, \u201cwhere the record clearly demonstrates\n\nthat a guilty plea colloquy was conducted, during which it became evident\n\nthat the defendant understood the nature of the charges against him, the\n\nvoluntariness of the plea is established.\u201d Moser, 921 A.2d at 529.\n\n Here, in denying Appellant\u2019s petition to withdraw his guilty plea, the\n\ntrial court reasoned:\n\n\n -8-\n\fJ-S30036-16\n\n\n Appellant both signed the colloquy form, and later testified\n in court that he understood the terms of his plea. N.T.,\n 12/02/2014, at 2. Appellant verbally verified that he\n understood the rights he was giving up. Id. at 3. He\n stated that he understood he was submitting an \u201copen\n plea\u201d[4] and that sentencing would be at the discretion of\n the judge following presentence and mental health\n evaluations. Id. at 2. He stated in the colloquy form and\n before this court that he understood that the sentence\n could be up to forty years\u2019 imprisonment. Colloquy, at 6;\n N.T., 12/2/2014, at 3. Appellant was questioned by this\n court prior to sentencing to ensure that he understood and\n accepted the terms of the plea arrangement. Id. at 3. He\n was sentenced in accordance with the sentencing\n guidelines, as well as within the range of possible\n sentences indicated in the colloquy form. Upon hearing\n that his sentences were to be served consecutively,\n Appellant immediately objected and indicated he would like\n to withdraw his guilty plea. N.T., 3/10/2015.\n\n * * *\n\n It is the opinion of this court that the guilty plea was\n entered into with a full understanding of its terms. No\n manifest injustice is created by refusing to allow Appellant\n to use a guilty plea to \u201ctest the waters\u201d of sentencing only\n to renege when an appropriate sentence within the\n sentencing guidelines is handed down.\n____________________________________________\n\n\n4\n We observe:\n\n [i]n an open plea agreement, there is an agreement as to the\n charges to be brought, but no agreement at all to restrict the\n prosecution\u2019s right to seek the maximum sentences applicable to\n those charges. At the other end of the negotiated plea\n agreement continuum, a plea agreement may specify not only\n the charges to be brought, but also the specific penalties to be\n imposed.\n\nCommonwealth v. Dalberto, 648 A.2d 16, 20 (Pa.Super.1994) (quoting\nCommonwealth v. Porreca, 567 A.2d 1044, 1047 (Pa.Super.1989), rev'd\non other grounds in 595 A.2d 23 (Pa.1991)).\n\n\n\n -9-\n\fJ-S30036-16\n\n\n\nTrial Court Pa.R.A.P. 1925(a) Opinion, filed July 13, 2015, at 5, 6.\n\n The trial court did not abuse its discretion in denying Appellant\u2019s\n\nrequest to withdraw his guilty plea that he entered into knowingly,\n\nintelligently, and voluntarily. In return for his open plea to aggravated\n\nassault and conspiracy, Appellant received the benefit of all other charges\n\nbeing nolle prossed. Appellant knew he could receive a maximum of 40\n\nyears\u2019 incarceration. Moreover, his minimum sentence of 9 years\u2019\n\nincarceration is far less than what he could have received. Appellant cannot\n\nnow escape the terms of the bargain into which he voluntarily entered.\n\n Further, after an independent review of the record, we agree with\n\nCounsel that this appeal is wholly frivolous.\n\n Judgment of sentence affirmed. Counsel\u2019s petition to withdraw\n\ngranted.\n\n\nJudgment Entered.\n\n\n\n\nJoseph D. Seletyn, Esq.\nProthonotary\n\n\n\nDate: 5/10/2016\n\n\n\n\n - 10 -\n\f"} -{"text": "\n448 A.2d 141 (1982)\nJanet THORBURN\nv.\nTOWN OF NORWICH.\nNo. 324-80.\nSupreme Court of Vermont.\nMay 7, 1982.\nMahady, Johnson, Dunne, Hershenson & Scott, Norwich, for plaintiff.\nPlante, Richards, Terino & Hanley, White River Junction, for defendant.\nBefore BARNEY, C. J., and BILLINGS, HILL, UNDERWOOD and PECK, JJ.\nBARNEY, Chief Justice.\nThis litigation involves the plaintiff's appeal of her 1978 property tax by the defendant town. Her appeal had been on the docket of the Windsor Superior Court since August of 1978 without being brought on for trial. At the calendar call for the September Term, 1980, this matter was listed on the progress calendar as ripe for dismissal under V.R.C.P. 41(b)(1).\nOn opening day, at calendar call, the case was not dismissed, but set for a \"settlement\" conference on September 11, 1980. That conference was attended by plaintiff and her attorney, and officials of the defendant town and its attorney. As a result of the conference a pretrial order was issued that day, scheduling the case as number two \"back-up\" on the trial calendar for September 23, 1980.\nFollowing the conference at the court-house but after the representatives of the defendant had left, the plaintiff informed her attorney that she had to be absent from the state during the week of September 23, 1980, and that she would not be available to attend trial of the matter until April or May, 1981.\nPlaintiff's attorney contacted counsel for the defendant and obtained a stipulation for continuance over the term. This was signed by counsel on September 12th and 15th, 1980, and filed with a proposed order of continuance on September 17, 1980. On being informed that consideration by the court required the filing of a motion for continuance and supporting affidavit, in accordance with V.R.C.P. 40(c) and (d), a motion and an affidavit were also drawn and submitted on September 18, 1980.\nThe motion came on for hearing September 25, 1980. The court denied the continuance and dismissed the action on the basis of V.R.C.P. 41(b)(1), which reads:\nThe court, on its own motion, after reasonable notice to all the parties, may dismiss any action that has been pending two years unless good cause is shown for continuance.\nThe defendant, arguing for affirmance of the ruling below, points out that the requirements of V.R.C.P. 40(c) and (d), which would allow the granting of a continuance, were not complied with in several particulars. First, it was not demonstrated that the absence of the plaintiff, even if she was to be treated as a witness, was in fact *142 unavoidable. Second, the substance of her testimony was not set out. Thirdly, the affidavit was made by the plaintiff's attorney, not by the plaintiff herself.\nWe agree that all of these considerations indicate a failure to comply with V.R.C.P. 40(c) and (d) and justify this order of dismissal. A reading of the full text of V.R.C.P. 40 reflects the concern that courts must have for the orderly use of court facilities, provided at great expense to the taxpayer for the use of litigants. The design of that rule is directed at avoidance of unnecessary delay, and seeks out alternatives preferable to postponement of the trial if the rights of the parties can be accommodated.\nJudgment affirmed.\n"} -{"text": "\n911 N.E.2d 100 (2009)\nT-3 MARTINSVILLE, LLC, and MS Martinsville, LLC, Appellants-Plaintiffs-Counterclaim Defendants/Cross-Appellees,\nv.\nU.S. HOLDING, LLC, Hoosier Enterprises IX, Inc., and John W. Bartle, Appellees-Defendants-Counterclaimants/Cross-Appellants.\nNo. 55A01-0810-CV-462.\nCourt of Appeals of Indiana.\nAugust 14, 2009.\n*103 C. Daniel Motsinger, Libby Y. Mote, Krieg DeVault LLP, Indianapolis, IN, Attorneys for Appellants.\nDavid F. McNamar, McNamar & Associates, P.C., Indianapolis, IN, Attorney for Appellees, U.S. Holding, LLC, and John W. Bartle.\nRichard B. Kaufman, Doninger Tuohy & Bailey LLP, Indianapolis, IN, Attorney for Appellee, Hoosier Enterprises IX, Inc.\n\nOPINION\nCRONE, Judge.\n\nCase Summary\nT-3 Martinsville, LLC, and MS Martinsville, LLC (\"Landlords\"), bring this interlocutory appeal of the rulings against them in the trial court's \"Ruling on Motions for Summary Judgment.\" US Holding, LLC (\"USH\"), John W. Bartle, and Hoosier Enterprises IX, Inc. (\"Hoosier\") (sometimes collectively referred to as \"Appellees\"), cross-appeal the rulings against them in the aforementioned order. We affirm.[1]\n\nIssues\nLandlords raise one issue, which we restate as follows:\nI. Whether Landlords were required to provide USH with notice and an opportunity to cure its default under a lease for nonpayment of rent.\nWe also address the following issues raised on cross-appeal:[2]\nII. Whether the trial court's use of compound interest in determining *104 the amount USH owes Landlords is ripe for appellate review;\nIII. Whether the trial court erred in declining to find that USH's default has been cured;\nIV. Whether the trial court erred in finding that specific performance of USH's option to purchase is premature; and\nV. Whether the trial court erred in entering summary judgment in favor of Landlords and against Hoosier on its counterclaims.\n\nFacts and Procedural History[3]\nThe center of the current controversy is a lease (\"the Lease\"), to which Landlords and USH are parties, and the nonpayment of rent thereunder. The relevant facts are undisputed. On April 1, 2004, Rynard III, LLC (\"Rynard\"), owner of the Grandview Convalescent Center (\"Grandview\") located in Martinsville, Indiana, entered into the Lease with USH, as tenant, and Bartle, as guarantor, wherein USH agreed to lease Grandview for a term of twenty years. Contemporaneously with the Lease, USH entered into a sublease *105 agreement with Hoosier, wherein Hoosier subleased Grandview for a term of twenty years to operate a comprehensive care nursing facility. Subsequently, Landlords purchased Grandview from Rynard. On March 24, 2006, Rynard, as seller, and Landlords, as purchasers, entered into an \"Assignment and Assumption Agreement,\" wherein Rynard assigned and Landlords assumed Rynard's rights and obligations under the Lease.\nThe Lease included the following relevant provisions:\n10. Events of Default and Landlord's Remedies.\n\n10.1 Events of Default. The occurrence of any of the following shall constitute an event of default on the part of Tenant hereunder (\"Event of Default\"):\n10.1.1 The failure to pay within five (5) business days of the date when due any Rent, taxes or assessments, utilities, premiums for insurance or other charges or payments required of Tenant under this Lease;\n10.1.2 Any other material default by Tenant (or any Affiliate thereof) under any agreement between Tenant (or any Affiliate) and Landlord or any Affiliate of Landlord other than this Lease, which default is not cured within any applicable cure period provided in such agreement; provided, however, so long as Tenant is not in default of the monetary obligations of this Lease, then any matter which would fall within the scope of the Section 10.1.2 shall not constitute an Event of Default;\n...\n10.1.5 Any revocation of the nursing home license for Facility of termination of the certification under the Medicare and/or Medicaid programs (or any successor program);\n...\n10.1.8 The filing by tenant of a voluntary petition under any federal bankruptcy law or under the law of any state...;\n10.1.9 The failure to perform or comply with any other term or provision of the Lease not requiring the payment of money (except a default under Section 10.1.5 or 10.1.8), including, without limitation, the failure to comply with the provisions hereof pertaining to the use, operation and maintenance of the Premises; provided, however, the default described in this Section 10.1.9 is curable and shall be deemed cured, if: (a) within ten (10) business days of Tenant's receipt of a notice of default from Landlord, Tenant gives Landlord notice of its intent to cure such default; and (b) Tenant cures such default within thirty (30) days after such notice from Landlord, unless such default cannot with due diligence be cured within a period of thirty (30) days because of the nature of the default or delays beyond the control of Tenant, and cure after such thirty (30) day period will not have a material and adverse effect upon the Premises, in which case such default shall not constitute an Event of Default if Tenant uses its best efforts to cure such default by promptly commencing and diligently pursuing such cure to the completion thereof, and such default does not cause Landlord to be in default of any other agreement to which Landlord is a party; provided, however, no cure period for such default shall continue for more than ninety (90) days from Tenant's receipt of notice of such default from Landlord;\n10.1.10 There shall be no cure period in the event of breach by Tenant of (a) the obligation to obtain insurance as provided in Section 4, (b) the provisions *106 of Section 21,[[4]] or (c) the provisions of Section 23,[[5]] and\n10.1.11 All notice and cure periods provided herein shall run concurrently with any notice or cure periods provided by applicable law.\n10.2 Remedies. Upon the occurrence of an Event of Default, Landlord may exercise all rights and remedies under this Lease and the laws of the State of Indiana available to a lessor of real and personal property in the event of a default by its lessee. Without limiting the foregoing, Landlord shall have the right to do any of the following:\n10.2.1 Sue for the specific performance of any covenant of Tenant under this Lease as to which Tenant is in breach;\n10.2.2 Enter upon the Premises, terminate this Lease, dispossess Tenant from the Premises and/or collect money damages by reason of Tenant's breach, including, without limitation, the acceleration of all rent which would have accrued after such termination and all obligations and liabilities of Tenant under this Lease which survive the termination of the Term; provided however, Landlord shall use reasonable efforts to mitigate its damages;\n10.2.3 Elect to leave this Lease in place and sue for rent and/or other money damages as the same come due; provided, however, Landlord shall use reasonable efforts to mitigate its damages[.]\n....\n10.3 Receivership. Tenant acknowledges that one of the rights and remedies available to Landlord under applicable law is to apply to a court of competent jurisdiction for the appointment of a receiver to take possession of the Premises, to collect the rents, issues, profits and income of the Premises and to manage the operation of the Premises. Upon Tenant's failure to pay within thirty (30) calendar days of the date when due any Rent, or in the event a Sanction is imposed and not enjoined, stayed or otherwise held in abeyance as contemplated under Section 5.2.2, and in addition to any other right or remedy of Landlord under this Lease, Landlord may petition any appropriate court for the appointment of a receiver to take possession of the Premises, to manage the operation of the Premises, to collect and disburse all rents, issues, profits and income generated thereby and to preserve or replace to the extent possible any operating license for the Premises or to otherwise substitute the licensee or provider thereof....\n....\n10.5 Remedies Cumulative: No Waiver. No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder or now or hereafter existing at law or in[]equity. No failure of Landlord to insist at any time upon the strict performance of any provision of this Lease or to exercise any option, right, power or remedy contained in this Lease shall be construed as a waiver, modification or relinquishment thereof as to any similar or different breach (future or otherwise) by Tenant. A receipt by Landlord of any rent or other sum due hereunder (including any late charge) with knowledge of the *107 breach of any provision contained in this Lease shall not be deemed a waiver of such breach, and no waiver by Landlord of any provision of this Lease shall be deemed to have been made unless expressed in a writing signed by Landlord.\nAppellants' App. at 70-73.\nApparently, all parties performed their obligations under their respective agreements until September 2006. However, it is undisputed that from September 2006 to February 2008, USH did not make its rent payments to Landlords as required under the Lease. (We provide a more detailed discussion of the parties' conduct during this period in section I below.)\nOn February 18, 2008, Landlords filed their complaint against Appellees, alleging the following claims and seeking the following relief: Count 1, breach of lease by USH by reason of failure to pay rent from September 2006 through February 2008 and damages for breach of lease; Count 2, ejectment of USH and Hoosier and immediate possession of the premises; Count 3, temporary restraining order and preliminary injunction to prevent USH and Hoosier from removing any property from Grandview, removing any patients from Grandview, and granting possession to Landlords; Count 4, breach of guaranty claim against Bartle for damages caused by USH. Id. at 40-51.\nOn February 19, 2008, following a hearing, the trial court denied Landlords' request for a temporary restraining order. On February 29, 2008, following a hearing, the trial court issued a ruling on Landlords' motion for immediate possession (\"the Prejudgment Possession Ruling\"), which essentially required either USH or Hoosier to pay Landlords the delinquent rent and back charges or lose possession of Grandview. The Prejudgment Possession Ruling provides in relevant part:\n2. Although each missed payment of rent and late charges may be an `event of default' under the terms of the lease, USH is not precluded from curing the default. [Landlords] did not provide notice of default to USH in the manner stated in the lease agreement until [Landlords] filed their Verified Complaint on 2-18-2008 and served the complaint on USH and [Hoosier] on 2-19-2008.\n3. The filing of the Verified Complaint by [Landlords] is not, at this time, considered \"Notice of Termination,\" as the issue of whether the [L]ease has been properly terminated must be resolved in the final judgment in this case, not at this pre-judgment stage of the proceedings.\n4. IT IS THEREFORE ORDERED THAT: USH and [Hoosier] may retain possession of Grandview during the pendency of this action upon the condition that USH and/or [Hoosier] fully comply with the following conditions ...:\n(A) To cure the `event of default' of non-payment of past rent, either USH or [Hoosier] must pay to [Landlords] the sum of $741,987.47 ... not later than THURSDAY, MARCH 20, 2008 AT NOON.\n....\n(D) IT IS THEREFORE ORDERED THAT: Any payments made by [Hoosier] to [Landlords] under the terms of [this order] shall be setoff to any rent payments owed by [Hoosier] to USH under the sub-lease to the extent that [Hoosier's] payments to [Landlords] equal or exceed the amount of rent payable to USH under the terms of the sublease.\nId. at 222-23.\nPursuant to the Prejudgment Possession Ruling, Hoosier timely paid $741,987.47 to *108 Landlords, and Landlords accepted the payment.\nOn April 8, 2008, Hoosier counterclaimed against Landlords asserting (1) tortious interference with sublease; (2) civil violations of Indiana Code Section 35-43 et seq. (offenses against property); (3) unjust enrichment; (4) money had and received; and (5) specific performance of exercise of option to purchase.[6]Id. at 249-57.\nOn March 26, 2008, USH and Bartle filed their motion for summary judgment, arguing that because Landlords had been paid the amount as ordered by the Prejudgment Possession Ruling, the alleged default of nonpayment of rent had been cured and there was no genuine issue of material fact remaining as to Landlords' claims. USH-Bartle's Appellees' App. at 20.\nOn June 12, 2008, Hoosier filed three motions for summary judgment, in which USH and Bartle joined. In its first summary judgment motion (\"First Motion\"), Hoosier alleged that there was no genuine issue of material fact that USH was entitled to but did not receive notice of default and an opportunity to cure, and therefore Landlords are barred from asserting an Event of Default under the Lease and their claim for termination of the Lease is premature. Appellants' App. at 321-22. In its second summary judgment motion (\"Second Motion\"), Hoosier argued that any prior violation of the Lease was cured by its payment to Landlords pursuant to the Prejudgment Possession Ruling and that Landlords were overpaid by Hoosier, for which Hoosier was entitled to summary judgment in the amount of the overpayment. Id. at 599-600. Finally, in its third summary judgment motion (\"Third Motion\"), Hoosier contended that Landlords breached the Lease by refusing to honor USH and Hoosier's option to purchase Grandview under the terms of the Lease. Id. at 966-68. Further, Hoosier requested that the trial court order specific performance of the option-to-purchase provision in the Lease.\nOn June 18, 2008, Landlords filed their summary judgment motion, in which they argued that the Lease does not require notice and an opportunity to cure for nonpayment of rent, that USH breached the Lease by failing to pay rent when due, and that as such, Landlords were entitled to terminate the Lease, recover possession of Grandview, and collect past due rents and fees. In addition, Landlords sought summary judgment in their favor on all counterclaims raised by USH, Bartle, and Hoosier.\nOn August 15, 2008, a hearing on all five of the summary judgment motions was held. On August 29, 2008, the trial court issued its \"Ruling on Motions for Summary Judgment\" (\"the Ruling\"). The trial court denied Landlord's summary judgment motion on the issues of notice and opportunity to cure and whether USH breached the Lease such that Landlords were entitled to terminate the Lease and recover possession of Grandview.[7] The trial court granted Landlords' summary judgment motion on Hoosier's counterclaims for (1) tortious interference with sublease; (2) civil violations of Indiana Code Section 35-43 et seq.; (3) unjust enrichment *109 and money had and received;[8] and (4) specific performance of the exercise of the option to purchase. The trial court denied USH and Bartle's summary judgment motion. The trial court granted Hoosier's First Motion but denied its Second Motion and Third Motion. Given the length and complexity of the Ruling, we set forth its provisions as necessary at the beginning of the relevant discussion section.\n\nDiscussion and Decision\n\nStandard of Review\nSummary judgment is appropriate only when there are no genuine issues of material fact and the moving party is entitled to a judgment as a matter of law. Ind. Trial Rule 56(C). Our standard of review is well settled:\nIn reviewing a trial court's ruling on summary judgment, this court stands in the shoes of the trial court, applying the same standards in deciding whether to affirm or reverse summary judgment. Thus, on appeal, we must determine whether there is a genuine issue of material fact and whether the trial court has correctly applied the law. In doing so, we consider all of the designated evidence in the light most favorable to the non-moving party. The party appealing the grant of summary judgment has the burden of persuading this court that the trial court's ruling was improper.\nPerryman v. Motorist Mut. Ins. Co., 846 N.E.2d 683, 687 (Ind.Ct.App.2006) (citations omitted). Specific findings of fact and conclusions of law are neither required nor prohibited in the summary judgment context. City of Gary v. Ind. Bell Tel. Co., 732 N.E.2d 149, 153 (Ind.2000). Such findings aid our review of a summary judgment, but they are not binding on this Court. Id. In reviewing a trial court's ruling on a motion for summary judgment, we may affirm on any grounds supported by the Indiana Trial Rule 56 materials. Catt v. Bd. of Comm'rs of Knox County, 779 N.E.2d 1, 3 (Ind.2002). \"The fact that the parties made cross-motions for summary judgment does not alter our standard of review. Instead, we must consider each motion separately to determine whether the moving party is entitled to judgment as a matter of law.\" Hartford Acc. & Indem. Co. v. Dana Corp., 690 N.E.2d 285, 291 (Ind.Ct.App.1997), trans. denied (1998).\n\nI. Notice and Opportunity to Cure\nThe trial court found that the Lease required Landlords to provide notice of default and an opportunity to cure for the nonpayment of rent. Appellants' App. at 28, 32. This finding is the basis for the trial court's grant of Hoosier's First Motion and denial of Landlords' summary judgment motion on this issue. The Ruling reads in pertinent part as follows:\n[Landlords] argue that the language of subsection 10.1.9 is dispositive and they focus solely on the phrase \"not requiring the payment of money\" in support of [Landlords'] opinion that non-payment of rent is excluded from the requirements of notice of default and \"cure period\" set forth in the subsection 10.1.9. The Court finds otherwise.\nAs previously noted, the Court must examine the entire lease agreement, not just one sentence or phrase, in determining the intent of the parties at the time the contract was executed [between Rynard and USH]. Clearly, the failure to pay rent within five (5) business days of the due date is an \"event of default.\" Neither [Landlords] [n]or [Appellees] *110 dispute this fact. But, the Court finds that the intent of the parties within the four corners of the lease agreement at the time of execution of the contract was that the event of default of non-payment of rent was and is \"curable\" and required Landlord[s] to give the Tenant written notice of default, thus triggering the requirements of the Tenant to give [Landlords] notice of intent to cure and to cure such default within the time limits set forth in subparagraph 10.1.9.\nThis intent (i.e., that there is a requirement of notice of default and the ability to cure within a limited time) is supported by common sense, and by the undisputed fact that Grandview has been and is being operated as a skilled nursing facility for patients requiring continuous care. This is not a commercial lease concerning a warehouse, office building or retail facility. A disruption in service and the emotional toil [sic] that a sudden eviction of the operator of the skilled nursing facility would impose upon patients, family members and staff of the facility would be devastating. It is obvious that a continuum of care for the patients was a priority in the parties' original intent with the terms of the contract. Delays in payment of rent could be \"cured\" by payment of rent, late fees and other costs incurred by the Landlord[s]. If the Tenant did not cure the non-payment of rent, the transition period of thirty (30) days provided for in the default cure period would give the Landlord[s], Tenant, patients, families of patients and staff time to adjust to the transition in operational control of the facility.\nThe Court finds that the phrase \"not requiring the payment of money\" in subparagraph 10.1.9 refers to the vast array of other duties and responsibilities of the Tenant under the terms of the lease agreement, such as: Tenant's maintenance requirements under Section 5; Tenant's personal property requirements under Section 7; financial and regulatory reports under Section 9. The Court finds that the only subparagraph of the [L]ease that unequivocally removed the possibility of any cure period after default is subparagraph 10.1.10 pertaining to Tenant's requirements regarding insurance coverage (Section 4), Tenant's diversion of residents to other nursing facilities owned by the Tenant (Section 21: Preservation of Investment), and Tenant's assignment or subletting of the premises without Landlord[s'] consent (Section 23).\nAlthough Subsection 10.1 is entitled \"Events of Default,\" this subsection clearly encompasses not only the definition of default events, but also the cure period afforded to the Tenant if the Tenant has not committed the forbidden acts described in Sections 4, 21, and 23 of the Master Lease.\nThere is no genuine issue of fact that [Appellees] failed to pay rent to the [Landlords] for a period of several months, and the non-payment of rents when due was an event of default under the Master Lease. But, as a matter of law under the terms of the contract, the Court finds that [Landlords] were required to provide notice of default to [USH] which [Landlords] did not do. The filing of [Landlords'] Complaint is not, as a matter of law, the notice of default required under the terms of the lease agreement.\nRULING: The Court will therefore enter partial summary judgment on [Hoosier's First Motion] solely on this issue: That the [Landlords] did not comply with the conditions precedent to the filing of the complaint (and [Landlords'] request for eviction and possession of the premises) by failing *111 to provide notice of default to USH as required by subparagraph 10.1.9 and Section 16,[[9]] which would then have given USH the opportunity to cure the default within the time periods set forth in subparagraph 10.1.9. As a result, the filing of the [Landlords'] Complaint was premature and did not terminate the lease agreement.\nId. at 26-28 (emphasis in original).\nOn appeal, the parties dispute the trial court's interpretation of the Lease. A lease is construed in the same manner as any other contract. Stout v. Kokomo Manor Apts., 677 N.E.2d 1060, 1064 (Ind.Ct.App.1997). The construction of the terms of a written contract is a pure question of law, which we review de novo. Bailey v. Mann, 895 N.E.2d 1215, 1217 (Ind.2008).\nWhen construing the meaning of a contract, our primary task is to determine and effectuate the intent of the parties. First, we must determine whether the language of the contract is ambiguous. The unambiguous language of a contract is conclusive upon the parties to the contract and upon the courts. If the language of the instrument is unambiguous, the parties' intent will be determined from the four corners of the contract. If, on the other hand, a contract is ambiguous, its meaning must be determined by examining extrinsic evidence and its construction is a matter for the fact-finder. When interpreting a written contract, we attempt to determine the intent of the parties at the time the contract was made. We do this by examining the language used in the instrument to express their rights and duties. We read the contract as a whole and will attempt to construe the contractual language so as not to render any words, phrases, or terms ineffective or meaningless. We must accept an interpretation of the contract that harmonizes its provisions, rather than one that places the provisions in conflict.\nWhitaker v. Brunner, 814 N.E.2d 288, 293-94 (Ind.Ct.App.2004) (citations and quotation marks omitted), trans. denied (2005).\nThe parties agree that section 10.1 of the Lease governs \"Events of Default\" and that subparagraph 10.1.1 lists the failure to pay rent as an Event of Default. The parties' disagreement centers on subparagraph 10.1.9, which describes another Event of Default as the \"failure to perform or comply with any other term or provision of the Lease not requiring the payment of money ... including ... the failure to comply with the provisions hereof pertaining to the use, operation and maintenance of the Premises[.]\" Appellants' App. at 71 (emphasis added). The trial court found that the phrase \"not requiring the payment of money\" refers to other duties and responsibilities of the tenant under the terms of the Lease, such as maintenance requirements, personal property requirements, and financial and regulatory reporting requirements. Id. at 27. Like the trial court, we find that the language of the Lease is unambiguous. However, we find that the language unambiguously excludes the payment of money from the notice of default and opportunity to cure requirements of subparagraph 10.1.9.\nTo understand the meaning of subparagraph 10.1.9, it is helpful to read the provision without the phrase \"not requiring the payment of money.\" Without that phrase, 10.1.9 reads, \"The failure to perform or *112 comply with any other term or provision of the Lease ... including ... the failure to comply with the provisions hereof pertaining to the use, operation, and maintenance of the Premises[.]\" Id. at 71 (emphasis added). Thus, 10.1.9 is a catch-all provision, covering the failure to perform any other term of the Lease. Specifically, under 10.1.9, the failure to comply with the use, operation, and maintenance requirements in section 5 of the Lease is an Event of Default.[10]\nWhen we reinsert the phrase \"not requiring the payment of money,\" it is clear that the phrase excludes obligations to make payments of money from the definition of an Event of Default in subparagraph 10.1.9. There can be no dispute that the payment of rent is a payment of money. In addition, 10.1.9 states, \"the default described in this Section 10.1.9 is curable.\" Id. As such, the notice and opportunity to cure provisions apply only to 10.1.9 Events of Default. The payment of rent is excluded from the definition of default in 10.1.9, and therefore the notice and cure provisions of 10.1.9 do not apply to it. We think that the trial court's interpretation of the Lease renders the phrase \"not requiring the payment of money\" meaningless.\nOur interpretation is in harmony with subparagraph 10.1.10, which states that there is no cure period for breaches under section 4 (describing the types of insurance the tenant is obligated to obtain), section 21 (prohibiting the tenant from diverting patients to other facilities owned by the tenant), and section 23 (setting forth the terms for assignment and subletting). Id. These sections govern all sorts of obligations that do not involve the payment of money. Consequently breaches under these sections would have fallen into the ambit of subparagraph 10.1.9 if they were not specifically excluded.\nIn addition, our interpretation harmonizes subparagraph 10.1.9 with section 10.3, entitled \"Receivership.\" This provision specifically provides that Landlords are entitled to apply to a court for a receiver to take possession of Grandview \"[u]pon Tenant's failure to pay within thirty (30) calendar days of the date when due any Rent[.]\" Id. at 72. It does not say within thirty days after notice of default to Tenant. Since 10.1.9 enables the tenant to cure the default within thirty days of receiving notice of default from Landlords, and since the notice of default would not be given until sometime after the date of the default, if the notice and opportunity to cure provisions of 10.1.9 were applicable to the nonpayment of rent, section 10.3 would permit Landlords to apply for a receiver before the period to cure provided by 10.1.9 had expired.\nFurther, while we recognize that Grandview is a skilled nursing facility with patients requiring a continuum of care, this does not lead us to conclude that the parties must have intended that the tenant be provided with notice and opportunity to cure with respect to nonpayment of rent. Section 10.3 provides Landlords with the option of appointing a receiver and thus provides for the continued operation of Grandview as a skilled nursing facility where nonpayment of rent is at issue. Further, subparagraph 10.1.10, which specifically excludes breaches under sections *113 4, 21, and 23 from the notice and opportunity to cure requirements, demonstrates the parties' intent to dispense these requirements under certain Events of Default. Thus, the nature of the premises is not necessarily a basis for concluding that the Lease requires notice and opportunity to cure for nonpayment of rent. For all the reasons discussed above, we conclude that the trial court erred in finding that subparagraph 10.1.9 requires Landlords to provide notice of default to USH and an opportunity to cure as to the nonpayment of rent.\nThat said, we must address Hoosier's argument that Landlords were required to provide notice to USH and an opportunity to cure pursuant to Indiana common law principles, and therefore the trial court did not err in ruling that Landlords' complaint was premature and did not terminate the Lease.[11] In support of its argument, Hoosier relies on Scott-Reitz Ltd. v. Rein Warsaw Associates, 658 N.E.2d 98 (Ind.Ct.App.1995).\nIn Scott-Reitz, the lessee, Scott, entered into a lease agreement with Rein Warsaw Associates, as lessor, wherein Rein was to build a grocery store on its property and Scott was to finish the building by installing the necessary trade fixtures and equipment. Rein was required to develop an overall building plan for the grocery store after Scott provided it with building details such as general plumbing and electrical plans. Rein was also required to obtain the necessary building permits. After the execution of the lease, Scott became concerned about the startup costs it faced with the grocery store and another store it was opening and decided to postpone the openings of both stores for a year. Meanwhile, Rein was experiencing difficulties in obtaining the necessary wetlands permit for the construction of the grocery store. Consequently, Rein offered Scott a different facility for his grocery store. Scott found that the facility, a Big Wheel Store, could be converted into a grocery store and for six months thereafter \"engaged in a course of conduct evidencing the parties' interest in converting the Big Wheel Store into Scott's [] grocery store in lieu of constructing a new store as called for in the Lease.\" Id. at 102. On the same day that Scott was meeting with a Big Wheel Store representative to discuss details for its conversion, Rein received notice from Scott that Scott was repudiating the lease.\nRein filed a complaint against Scott for breach of the lease. The trial court entered summary judgment in favor of Rein. Scott appealed, arguing that Rein could not recover for breach of the lease because Rein itself had defaulted under the lease by failing to deliver possession of the grocery store building within a reasonable time. In addressing Scott's argument, we first noted that the lease contained an express provision that required Scott to provide Rein notification and thirty days' opportunity to cure before taking action to terminate the lease. Id. at 103. Thus, we concluded that even if there had been an unreasonable delay caused by Rein, Scott could not unilaterally terminate the lease *114 without first providing Rein thirty days' notice and opportunity to cure. However, we then stated, \"notwithstanding the existence of the express provision within the [l]ease, the common law dictates the same result.\" Id. We concluded as follows:\n[W]hen a party deviates from strict performance called for by the contract, the former cannot suddenly declare the deviation a breach of contract. See Pierce v. Yochum (1975), 164 Ind.App. 443, 457, 330 N.E.2d 102, 112, trans. denied. Notice must be given to the other party that strict performance will be required in the future, then if the party continues to deviate, a default can be declared. Id. Similarly, when both parties to a contract acquiesce to a delay, neither side can suddenly declare the contract rescinded and simply walk away. Notice must be given to the other party along with an opportunity to perform within a reasonable time. Keliher v. Cure (1989), Ind.App., 534 N.E.2d 1133, 1137.\nShortly after executing the [l]ease, Scott became concerned with the start up costs it faced with the possible simultaneous construction of the Kendallville and Warsaw stores and desired to postpone the opening of both stores until 1991. Thereafter, Scott withheld the tenant details necessary to begin construction of the store. Without Scott's tenant details as described in Section 3.1(e)(1) of the [l]ease, Rein's architects were unable to prepare the Plan which was a necessary step prior to construction of the actual building. Then in 1990, Scott expressed its interest in converting the Big Wheel Store, in lieu of constructing a new building. Scott's participation in the Big Wheel Store conversion project through January 18, 1991, continued to promote the delay in constructing the grocery store as described in the [l]ease. Additionally, there is evidence that in November of 1990, prior to the breach of the [l]ease, Scott had entered into sales negotiations with Super Valu Stores, Inc. which already had two grocery stores in the Warsaw area. Thus, it can be inferred that Scott decided that it was not in its best interest to lease a store in Warsaw. Scott could not willingly participate in a delay of performance and then declare the [l]ease rescinded because of delay; reasonable notice had to be given to Rein, along with an opportunity to perform within a reasonable time.\nId. at 104.\nLandlords and Hoosier vigorously debate whether Scott-Reitz is dispositive of this issue. Landlords correctly note that \"the lease in Scott-Reitz, unlike the Lease here, contained an express provision compelling the tenant to give notice of default and an opportunity to cure for any default of the [l]andlord.\" Appellants' Reply Br. at 7 (citation, quotation marks, and emphasis omitted). In advancing this argument, however, Landlords ignore the fact that the Scott-Reitz court specifically stated that it would reach the same result even if there had not been an express provision in the lease based solely on the common law. Thus, if we determine that the common law principles set forth in Scott-Reitz are applicable to the facts here, then there is certainly no barrier to disposing of this issue based on those principles.\nLandlords also assert that Scott-Reitz is inapposite because the tenant there \"intentionally and actively engaged in a pattern of conduct that deliberately postponed the construction project and prevented the landlord from timely performing its obligations under the lease.\" Id. In contrast, according to Landlords, there is no evidence that they engaged in a deliberate course of conduct to prevent USH from *115 making monthly rental payments. We think, however, that the undisputed evidence shows that Landlords engaged in a deliberate course of conduct in which they acquiesced to, or even promoted, a delay in the payment of rent.\nHere, the trial court found, and the parties do not dispute, the following facts. Landlords are owned directly or indirectly by various members of the Turner family, including Paul Turner, Paul Eric Turner (\"Eric\"), Kyle Turner, and Paul Ezekiel Turner (\"Zeke\"). Appellants' App. at 10. Hoosier is owned by Stuart Reed. The Turners and Bartle have been in the business of developing and operating nursing homes and similar businesses across Indiana for many years. In recent years \"there was a `falling out' between the Turners and Bartle related to other projects and business dealings that are not the subject of this action.\" Id. at 13. Following the last payment of rent under the Lease, the Turners and Bartle continued to do business with each other on various projects. From September 2006 to the filing of the complaint in February 2008, Eric, Zeke, and Bartle held periodic discussions and meetings, during which the nonpayment of rent under the Lease was discussed. \"Apparently, allegations were made on both sides of the discussion about non compliance with business obligations in this and other projects[.]\" Id. at 13-14.\nOur review of the record shows that in June or July of 2006, shortly after Rynard assigned its rights and obligations under the Lease to Landlords, Landlords and USH experienced significant issues under the Lease, which gave rise to numerous discussions between them. Id. at 514, 530-31. The parties agree that USH stopped making rent payments in September 2006. On the other hand, as of January 2008, USH had advanced hundreds of thousands of dollars to the Turners' operation in Batesville, Indiana. USH-Bartle's Appellees' App. at 1-7. Landlords do not dispute this. Apparently, the parties were negotiating a possible setoff of the amounts due and owing at Batesville with the amounts due and owing under the Lease. Id. at 14. Also, Reed met with the Turners regarding the rent due under the Lease, the money the Turners owed to USH for the Batesville operation, and the possibility of his exercise of the option in his sublease to purchase Grandview. Appellants' App. at 517-18, 572, 577-79, 582. As of the last meeting between Reed and Eric, Eric agreed to provide an accounting of what USH owed to the Turners' companies under the Lease so that it could be compared with the amount they owed to USH with respect to their Batesville operation. Id. at 579-581. Landlords do not dispute this. Thus, for a year and a half, the parties were actively negotiating significant issues directly related to the Lease and various agreements involving other properties, and the rent due under the Lease was only one factor in these negotiations. During this time, Landlords refrained from pursuing their remedies under the Lease to enforce the payment of rent.[12] In fact, in Scott-Reitz, the trial *116 court found that as of the date Scott repudiated the lease, Rein was \"ready, willing, and able to resume its activities in preparing for the construction of the grocery store called for in the [l]ease.\" 658 N.E.2d at 103. Likewise, here, on January 3, 2008, (approximately two weeks before Landlords filed their complaint) Reed specifically informed Eric that he was willing to \"step in and cure [the nonpayment of rent under the Lease].\" Appellants' App. at 586.\nThus, Landlords' course of conduct in actively negotiating with Bartle and Reed for an alternative solution for one and a half years demonstrates a willing delay in USH's nonpayment of rent. Based on the designated evidence, we conclude that both parties acquiesced to a delay in the payment of rent, and therefore neither side can suddenly declare the contract terminated and \"simply walk away.\" Scott-Reitz, 658 N.E.2d at 104. Instead, Landlords were required to give reasonable notice to USH with an opportunity to perform within a reasonable amount of time before taking action to terminate the Lease.\nFinally, Landlords assert that section 10.5 of the Lease precludes Landlords' acquiescence to the delay in the payment of rent from constituting a waiver of their rights under the Lease. That section provides that no failure of Landlords to insist upon strict performance shall be construed as a waiver and that any waiver by Landlords of any provision must be expressed in writing. Appellants' App. at 73. Landlords interpret Hoosier's common law argument as one of waiver. \"Waiver is an intentional relinquishment of a known right involving both knowledge of the existence of the right and the intention to relinquish it.\" van de Leuv v. Methodist Hosp. of Ind., Inc., 642 N.E.2d 531, 533 (Ind.Ct.App.1994).\nHowever, we think that estoppel is a more appropriate characterization. The estoppel doctrine is based on the rationale that one who by deed or conduct has induced another to act in a particular manner will not be permitted to adopt an inconsistent position, attitude, or course of conduct that causes injury to such other. 31 C.J.S. ESTOPPEL AND WAIVER \u00a7 1 (2008). Our supreme court has stated, \"Estoppel is a judicial doctrine sounding in equity. Although variously defined, it is a concept by which one's own acts or conduct prevents the claiming of a right to the detriment of another party who was entitled to and did rely on the conduct.\" Brown v. Branch, 758 N.E.2d 48, 51-52 (Ind.2001).\nOur resolution of this issue is based on the principle of estoppel not waiver, and therefore section 10.5 is inapplicable to the circumstances.[13] Specifically, we have concluded that Landlords' conduct during the one-and-a-half years between the last rent payment and the filing of their complaint demonstrates their acquiescence to the delay of rent payments and that therefore they are estopped from suddenly, without notice, and without a reasonable time to cure, claiming that USH breached the Lease by failing to make rent payments. Accordingly, based on the foregoing, we conclude that USH was entitled to notice and an opportunity to cure, and therefore the filing of the Landlords' complaint was premature and did not terminate the Lease. See Catt, 779 N.E.2d at 3 (noting *117 that we may affirm a trial court's ruling on a summary judgment motion on any grounds supported by the record). Therefore, we affirm the trial court's denial of Landlords' summary judgment motion on this issue and its grant of Hoosier's First Motion on this issue.\n\nII. Compound Interest\nIn the Prejudgment Possession Ruling, the trial court made a preliminary calculation of rent and late charges owed by USH to Landlords of $741,987.47. The trial court used a five percent interest rate, compounded, to calculate the total due Landlords based on paragraph 10.4 of the Lease, which provides, \"Tenant shall pay to Landlord ... a late charge equal to five percent (5%) of the amount of all installments of Rent not paid on the due date.\" Appellants' App. at 15, 72. However, in making this calculation the trial court stated,\nThis is not to be considered as a final judgment, res judicata, or in any other way a final determination of damages that may be owed to the [Landlords] or the [Appellees], as the Landlord[s] or the [Appellees] may also be entitled to collect attorney fees and litigation costs as well as actual damages proven under the [Landlords'] Complaint, or proven under any potential counterclaims that may be filed by the [Appellees].\nId. at 15.\nAlso relevant is the trial court's statement in the \"Factual Background\" section of the Ruling, which provides as follows:\nUSH and [Hoosier] complied with the Court's [Prejudgment Possession Ruling] and have apparently made all monthly payments to date as required... and continue to operate Grandview as a nursing facility. [Landlords] still assert that the Court's calculation of rent and late fees is erroneous, and that more payments and late fees are owed to [them]. USH and [Hoosier] still assert that the Court's calculation of rent and late fees is erroneous, and that less money is owed to [Landlords].\nId. at 17.\nRegarding USH and Bartle's motion for summary judgment, the Ruling provides:\nAlthough USH and Bartle claim that [Appellees'] compliance with the Court's [Prejudgment Possession Ruling] \"cured\" any default of the [L]ease, the Court finds that a genuine and material issue of fact exists as to the correct amount of back rent, late fees, attorney fees and costs that the [Appellees] may owe to the [Landlords]. RULING: Summary judgment as to this issue is denied.\nId. at 23. As to Hoosier's Second Motion, the trial court noted, \"the exact amount owed to [Landlords] in rent, late fees and other costs under the terms of the lease agreement are genuine and material facts in issue, yet to be determined.\" Id. at 29. The trial court denied Hoosier's Second Motion \"insofar as any determination of law by the Court that ... [Hoosier] is or is not entitled to `overpayments' to [Landlords].\" Id.\nAppellees contend that the trial court erred in compounding late charges, which resulted in Landlords being overpaid. Landlords argue that because the Prejudgment Possession Ruling is an interlocutory order for the payment of money, it is an interlocutory appeal of right, and therefore Appellees had to bring such appeal within thirty days of the ruling. See Ind. Appellate Rule 14(A) (providing that interlocutory orders for payment of money are appealable as a matter of right by filing notice of appeal within thirty days of entry of interlocutory order). Having failed to do so, Landlords assert, Appellees must wait until after the final judgment on *118 damages is entered to present the matter of compound charges for appellate review. We agree.\nWe observe that \"even though an interlocutory order may be appealable as of right under Appellate Rule 14(A)[], there is no requirement that an interlocutory appeal be taken. A claimed error in an interlocutory order is not waived for failure to take an interlocutory appeal but may be raised on appeal from the final judgment.'\" Bojrab v. Bojrab, 810 N.E.2d 1008, 1014 (Ind.2004) (emphasis added) (citation omitted). Our supreme court has explained,\n[A] final judgment disposes of all issues as to all parties thereby ending the particular case. It leaves nothing for future determination. This doctrine is now formalized in Indiana Rule of Appellate Procedure 2(H), which provides that a judgment is final if, \"(1) it disposes of all claims as to all parties....\" Ind. Appellate Rule 2(H).\nGeorgos v. Jackson, 790 N.E.2d 448, 451 (Ind.2003) (some citations and quotation marks omitted).\nIndiana Appellate Rule 2(H) also provides that a judgment is a final judgment if\nthe trial court in writing expressly determines under Trial Rule 54(B) or Trial Rule 56(C) that there is no just reason for delay and in writing expressly directs the entry of judgment (i) under Trial Rule 54(B) as to fewer than all the claims or parties, or (ii) under Trial Rule 56(C) as to fewer than all the issues, claims or parties[.]\nHere, although the Ruling contains the relevant language from Indiana Trial Rules 54(B) and 56(C), we do not think that the Ruling is \"a final judgment\" for purposes of appealing a previous interlocutory appeal of right because the Ruling \"did not end the case.\" Georgos, 790 N.E.2d at 451. Having failed to appeal the Prejudgment Possession Ruling within thirty days, Appellees must now wait until the final judgment, i.e., the one that \"leaves nothing for future determination,\" is entered. Id.[14]\nSimply put, we agree with Landlords that there has been no final determination of late charges for this Court to consider on appeal. Based on the trial court's *119 statements in the Prejudgment Possession Ruling and the Ruling itself, it appears that the trial court recognizes that all parties dispute its calculation of rent and late fees and that it has not made a final determination regarding the amount of back rent and late fees due Landlords. As such, the question of compound charges is not yet ripe for appellate review.[15]\n\nIII. Cure of Default\nUSH and Bartle in their summary judgment motion, and Hoosier in its Second Motion, argued that Hoosier's payment to Landlords pursuant to the Prejudgment Possession Ruling \"cured\" the default. Hoosier also argued that Landlords were overpaid and that Hoosier was entitled to that overpayment. The trial court denied both motions, finding that a genuine issue of material fact exists as to the correct amount of back rent, late fees, attorney's fees, and costs that USH may owe to Landlords. Appellants' App. at 23, 29. Given that there has not been a final determination as to these amounts, we are unpersuaded by Appellees' arguments that Hoosier's payment cured USH's default. Therefore, we affirm the trial court's denial of USH and Bartle's summary judgment motion and Hoosier's Second Motion on this issue.\n\nIV. Option to Purchase\nIn its Third Motion, Hoosier argued that Landlords breached the Lease by failing to honor the terms of the Lease's option to purchase and requested that the trial court order specific performance of its terms. Section 15 provides as follows:\n15. Option to Purchase. So long as no Event of Default shall have occurred and be continuing, Tenant shall have the option (the \"Purchase Option\") to purchase the Premises at any time during the Term, provided Tenant is not in default, for the Purchase Price of Two Million Five Hundred Thousand Dollars ($2,500,000) (the \"Purchase Price\"). The option may be exercised by Tenant on no less than ninety (90) days prior notice to Landlord, identifying the date on which closing shall occur. At closing, Landlord shall convey the Premises to Tenant by warranty deed and bill of sale. If closing does not occur by the date identified by Tenant, then Tenant shall reimburse Landlord for all costs, expenses and fees (including attorney's fees) incurred by Landlord in respect of the exercise of the option, negotiation and preparation for closing.\nAppellants' App. at 75. The trial court's Ruling provides as follows:\nThere is no factual dispute that USH was delinquent in the payment of rent to [Landlords] prior to the filing of [Landlords'] Complaint and the issuance of the Court's [Prejudgment Possession Ruling]. The event of default, non-payment of rent, occurred. As previously noted, both [Landlords] and [Appellees] dispute the amount of rent and late fees ordered payable by USH and/or [Hoosier] to [Landlords] in the Court's [Prejudgment Possession Ruling]. Thus, a genuine and material issue of fact as to the exact amount of rent, late fees and costs owed to [Landlords] still exists, and must be resolved by agreement of the parties or by further Court hearing or trial; the event of default is \"continuing\" until the issue of rent, late fees and costs payable by the Tenant to [Landlords] is resolved. Until this issue is resolved, the option to purchase the real estate may not be exercised under the terms of the *120 lease agreement. [Hoosier's] request that the Court order [Landlords] and USH to convey the real estate is premature.\nRULING: The motion for summary judgment by [Hoosier] (and USH, Bartle, by adoption) on the issue of breach of lease by [Landlords'] refusal to transfer the real estate under the option to purchase under the present facts and circumstances, and for specific performance of the option to purchase is premature and is denied.\nId. at 30-31.\nAppellees argue that the trial court erred in denying the Third Motion. However, Appellees' argument rests on the acceptance of their argument that Hoosier's payment to Landlords pursuant to the Prejudgment Possession Ruling cured USH's default. We have previously rejected that argument and affirmed the trial court's finding that a genuine issue of material fact exists as to the correct amount of back rent, late fees, attorney's fees, and costs owed by USH to Landlords. We affirm the trial court's denial of Hoosier's Third Motion.\n\nV. Remaining Counterclaims\nIn this section, we address Hoosier's counterclaims against Landlords: (1) tortious interference with sublease; (2) civil violations of Indiana Code Section 35-43 et seq. (offenses against property); and (3) unjust enrichment and money had and received. The trial court granted Landlords' summary judgment motion on these claims. We address each in turn.\n\nA. Tortious Interference with Sublease\nThe trial court's Ruling provides as follows:\nTo prevail upon [Hoosier's] claim against [Landlords] of tortious interference with the contract (sublease) between USH and [Hoosier], [Hoosier] must prove the following elements: (1) the existence of a valid and enforceable contract; (2) [Landlords'] knowledge of the existence of the contract; (3) [Landlords'] intentional inducement of the breach of the contract; (4) the absence of justification; and (5) damages resulting from [Landlords'] wrongful inducement of the breach.\n[Hoosier's] claim of tortious interference must fail, as there is absolutely no evidence that [Landlords] intentionally induced USH (sublease Landlord/master lease Tenant) to breach the sublease agreement between USH and [Hoosier] [(sublease tenant)]. In addition, [Hoosier] has no privity of contract with [Landlords] upon the Master Lease between [Landlords] and USH.\nAppellants' App. at 32-33 (footnote with citation omitted).\nHoosier attempts to argue that the filing of the Landlords' complaint caused USH to breach the covenant of quiet enjoyment owed to Hoosier pursuant to the sublease. Although Hoosier sets forth the applicable law related to tortious interference with a contract and discusses the meaning of inducement, it fails to demonstrate how the initiation of the suit was without justification. Hoosier's Appellee's Br. at 48-50. Therefore, its argument is without merit. We affirm the trial court's judgment on this issue.\n\nB. Civil Violations\nThe Ruling also provides:\nTo recover civil damages under I.C. 34-24-[3]-1[[16]] for a violation of I.C. 35-43, *121 the claimant must prove by a preponderance of the evidence all of the elements of the underlying criminal act.\nTo prove criminal deception, the claimant must prove that the tortfeasor knowingly or intentionally [made] a false or misleading written statement with the intent to obtain property, employment or an educational opportunity. I.C. XX-XX-X-X(a)(2).\nTo prove criminal mischief, the claimant must prove that the tortfeasor knowingly or intentionally [caused] another to suffer pecuniary loss by deception or by an expression of intention to injure another person or to damage the property or to impair the rights of another person. I.C. XX-XX-X-X(a)(2).\n[Hoosier's] claim for damages under I.C. 34-24-[3]-1 must fail, as there is absolutely no evidence that [Landlords] made any false or misleading written statement to USH or [Hoosier] with the intent to obtain property from USH or [Hoosier], and there is absolutely no evidence that [Landlords] knowingly or intentionally caused USH or [Hoosier] pecuniary loss by deception or to impair the rights of another person. This is a dispute over enforcement of the Master Lease, a contract, between commercial entities, well versed in the nature, meaning and operation of commercial lease agreements. Granted, [Landlords] and [Appellees] disagree on the interpretation and meaning of the \"default\" and \"cure\" provisions of the Master Lease, and there remains a dispute as to the amount of rent, late fees and costs due and owing to [Landlords], but that alone does not elevate this dispute into the realm of actionable criminal behavior.\nAppellants' App. at 33-34 (footnote with citation omitted).\nHoosier baldly asserts that \"Landlords were not entitled to compound late charges yet under the penalties of perjury filed the Complaint and Turner Affidavit, thereby repeatedly making the material and deceptive misrepresentations of existing fact that the total rents owing as of the date of filing of the Complaint, including late charges, equaled $774,915.54.\" Hoosier's Appellee's Br. at 50. However, just because the parties disagree as to whether interest is properly compounded under the Lease does not mean that Landlords misrepresented the amount due under the Lease. We affirm the trial court's grant of Landlords' summary judgment motion on this issue.\n\nC. Unjust Enrichment and Money Had and Received\nAs to this issue, the Ruling states:\n\n*122 The existence of an express contract precludes recovery on the equitable theory of money had and received. Shelby Eng'g., Inc. v. Action Steel Supply, Inc., 707 N.E.2d 1026, 1028 [(Ind.Ct.App. 1999)]. The Master Lease in this case is an express contract between [Landlords] and USH. The sublease is an express contract between USH and [Hoosier]. Assuming arguendo, that [Hoosier] overpaid back rent and late fees to [Landlords] to preserve the Master Lease for USH, then [Hoosier's] claim of unjust enrichment, money had and received, and any claim for reimbursement or damages should be directed to USH, the beneficiary of such payments\u0097not [Landlords], the Landlord entitled to rent payments under the Master Lease.\nAppellants' App. at 34.\nHoosier contends that Shelby \"absolutely authorizes recovery by Hoosier.\" Hoosier's Appellee's Br. at 39. We disagree.\nInitially, we observe that\nan action for money had and received is an equitable remedy that lies in favor of one person against another, when that other person has received money either from the plaintiff himself or third persons, under such circumstances that in equity and good conscience he ought not to retain the same, and which money, ex aequo et bono, belongs to the plaintiff, and where money has been received by mistake of facts, or without consideration, or upon a consideration that has failed, it may be recovered back. Such an action rests upon an implied promise and may be maintained against the person who received money from the plaintiff under circumstances which in equity and good conscience he should not retain.\nPufahl v. Nat'l Bank of Logansport, 129 Ind.App. 191, 195, 154 N.E.2d 119, 120-21 (1958) (emphasis in original).\nThe facts of Shelby are as follows:\nThe record shows that in the fall of 1996 Action Steel was in the market for an overhead crane when it discovered one for sale in a building occupied by Thomas Melvin. Shelby Engineering owned the building but was leasing it to Melvin who was doing business as Speedway Pallet. Shelby Engineering also owned the crane and had agreed to pay Melvin a $500.00 commission if he succeeded in selling it. Giving the impression that it was he who owned the crane, Melvin entered negotiations with Action Steel for the crane's purchase. The parties entered a written agreement that provided for a $25,000.00 purchase price with a $14,000.00 down payment. Melvin received the down payment, deposited it into his own checking account, and purchased a cashier's check for $8,000.00. The check was made payable to Shelby Engineering. He then presented the check to George Hilgemeier, the president of Shelby Engineering, indicating that it represented a down payment from a buyer who was purchasing the crane. Melvin told Hilgemeier that the purchase price was $24,000.00. When asked the name of the buyer, Melvin did not respond. Hilgemeier informed Melvin that he wanted a written agreement from the party wishing to buy the crane along with proof of the buyer's insurance. When three weeks had passed and Melvin still had not provided the written agreement or the name of the buyer, Hilgemeier wrote a letter to Melvin indicating the crane was no longer for sale. The letter again requested the name of the buyer so that the $8,000.00 could be refunded. In response Melvin produced a fictitious bill of sale that included the name of a fictitious *123 buyer along with a fictitious address. When Shelby Engineering was unable to contact the fictitious person it eventually concluded that no such person existed. Thereafter, Action Steel discovered that Shelby Engineering was the true owner of the crane. Hilgemeier and a representative of Action Steel then tried to negotiate a deal but could not reach an agreement. During the failed negotiations Hilgemeier acknowledged that the $8,000.00 belonged to Action Steel. However even after a demand, Shelby Engineering refused to return the money. Action Steel then filed suit against Shelby Engineering on various theories of liability including unjust enrichment and money had and received.\n707 N.E.2d at 1027. The trial court entered judgment in Action Steel's favor, and Shelby appealed, arguing that the theory of money had and received did not apply where a transaction is based on an express contract. The Shelby court reached the following conclusion:\nThere is no question that the existence of an express contract precludes recovery on the equitable theory of money had and received. In this case however there was no contract between Shelby Engineering and Action Steel. Rather, the contract existed between Shelby Engineering and Melvin. Although Melvin may not have been able to pursue against Shelby Engineering the equitable remedy of money had and received, there is no such prohibition pertaining to Action Steel.\nIn this case the record is clear that Shelby Engineering received from a third person money belonging to Action Steel. The money was provided for the purchase of Shelby Engineering's crane. Shelby Engineering acknowledged the money belonged to Action Steel but refused to return the money even after the parties could not reach agreement on the crane. The consideration failed and under the circumstances in equity and good [conscience] Shelby Engineering should not retain the money.\nId. at 1028 (citation omitted).\nShelby does not support Hoosier's argument. Here, Landlords and USH are parties to the Lease, and USH and Hoosier are parties to the corresponding sublease. Section 40 of the sublease expressly provides that\n[i]f, at any time during the Term, Tenant shall have been advised by Master Landlord that Landlord is in default under the terms of the Master Lease, Tenant may, but shall not be required to, pay to Master Landlord Rent and any other amounts due Landlord hereunder. In such event, all amounts so paid to Master Landlord by Tenant shall be credited to Tenant hereunder as if such payments had been made to Landlord.\nAppellants' App. at 160. Therefore, the existence of an express contract precludes recovery under the theory of money had and received. Likewise, the existence of an express contract precludes recovery under the theory of unjust enrichment. See City of Indianapolis v. Twin Lakes Enterprises, Inc., 568 N.E.2d 1073, 1079 (Ind.Ct. App.1991) (stating that where there is an express contract, failure to perform does not give rise to action for unjust enrichment), trans. denied.[17] Accordingly, we *124 affirm the trial court's grant of summary judgment to Landlords on these issues.[18]\nAffirmed.\nBRADFORD, J., and BROWN, J., concur.\nNOTES\n[1] By separate order, we deny Appellees' request for oral argument. Also by separate order, we deny Hoosier's motion to strike portions of Landlords' reply brief and Hoosier's motion for leave to file reply to Landlords' response to Hoosier's motion to strike.\n[2] USH and Bartle in their brief, and Hoosier in its brief, separately raise issues II through IV. Hoosier alone raises issue V.\n[3] Hoosier's appellee's brief fails to conform to Indiana Appellate Rule 46 in several important respects. Appellate Rule 46(A)(4) provides that the statement of issues \"shall concisely and particularly describe each issue presented for review.\" Concise is defined as \"marked by brevity of expression or statement: free from all elaboration and superfluous detail[.]\" Merriam-Webster Online Dictionary, http://www.merriam-webster.com/ dictionary/concise. Hoosier's four-page statement of issues is a mixture of issues, facts, and argument. Hoosier's Appellee's Br. at 1-5. It is most emphatically not concise. In addition, both Hoosier and USH failed to identify which issues relate to Landlords' appeal and which issues are raised on cross-appeal. Finally, Hoosier appears to raise an issue in its argument that it did not set forth in its statement of issues. See id. at 45-47 (arguing that Hoosier's motion to strike portions of Landlords' designation of evidence in support of Landlords' motion for summary judgment should be granted).\n\nAppellate Rule 46(A)(8)(a) provides that \"the argument must contain the contentions of the [cross-]appellant on the issues presented, supported by cogent reasoning[,]\" and Rule 46(B)(2) provides that the appellee's argument \"shall address the contentions raised in the appellant's argument.\" Hoosier's brief violates these rules by attempting to \"incorporate by reference\" more than a hundred pages from other documents, including Hoosier's answer to the complaint, all three of its summary judgment motions, and its response to Landlords' motion for summary judgment. Id. at 8, 40, 44, 45-46. We have previously expressed our disapproval with such attempts and declined to consider arguments outside the brief. See Oxley v. Lenn, 819 N.E.2d 851, 855 n. 2 (Ind.Ct.App.2004) (refusing to consider the argument section of a summary judgment brief submitted to the trial court); Greg Allen Constr. Co. v. Estelle, 762 N.E.2d 760, 778-79 (Ind.Ct.App.2002) (finding that where appellant had merely asked to incorporate by reference its argument made at trial, appellant had waived issue for appellate review), aff'd in relevant part, vacated in part on other grounds by 798 N.E.2d 171 (Ind.2003); Pluard ex rel. Pluard v. Patients Comp. Fund, 705 N.E.2d 1035, 1038-39 (Ind.Ct.App.1999) (stating that attempt to incorporate entire argument raised and argued to trial court by reference in footnote does not comply with either letter or spirit of former Appellate Rules), trans. denied. Accordingly, we will consider only the argument presented in Hoosier's appellee's brief. Any other argument incorporated by reference is waived, including whether Hoosier's motion to strike portions of Landlords' designation of evidence in support of Landlords' summary judgment motion should be granted. We note that Hoosier claims in its reply brief that \"the Hoosier Brief has specifically and in great detail (and without any incorporation by reference) moved to strike the Complaint and Turner Affidavit to any extent necessary to grant Hoosier Motions.\" Hoosier's Reply Br. at 11 (emphasis added). This claim is simply untrue. See Hoosier's Appellee's Br. at 45 (\"In the Hoosier Response, the Defendants moved to strike significant portions of the Landlords Designation. App. at 725-729. Those motions to strike are entirely incorporated within this Brief by reference[.]\") (emphasis added).\n[4] Section 21 is titled \"Preservation of Investment.\"\n[5] Section 23 is titled \"Assignment and Subletting.\"\n[6] USH and Bartle also filed counterclaims against Landlords, but they do not appeal the trial court's summary judgment ruling against them on such counterclaims.\n[7] Landlords do not appeal the denial of their summary judgment motion on the issue of whether USH breached the Lease such that they are entitled to terminate the Lease and take possession of Grandview.\n[8] The trial court's Ruling combined these two theories.\n[9] Section 16 sets forth the requirements for notices and demands under the Lease, such as that must be in writing, how they shall be sent, and where they shall be sent. Appellants' App. at 76.\n[10] Section 5 requires the tenant to keep the premises in good condition, make all repairs, maintain Landlords' personal property, comply with federal, state, and local licensing laws, occupy the premises solely as a nursing facility, and comply with IRS guidelines; allows the tenant to alter, improve, or expand the facilities and request that Landlords fund capital improvements; and prohibits the tenant from permitting liens. Appellants' App. at 64-66.\n[11] Landlords assert that\n\nAppellees' waiver and modification theories contradict the assertion that the clear and unambiguous terms of the Lease compel notice of payment default and the opportunity to cure. By invoking waiver and modification as grounds for affirming the Summary Judgment Ruling, Appellees effectively concede that the plain language of the Lease did not require the Landlord[s] to give [USH] notice of payment default and the opportunity to cure before filing its Complaint.\nAppellants' Reply Br. at 6 n. 5. Landlords cite no authority in support of this assertion. Further, we fail to see how Appellees' alternative argument amounts to a concession regarding the interpretation of the Lease.\n[12] Landlords argue that they never deviated from requiring strict performance under the Lease. They point to an email sent by Eric to Bartle demanding that rent due under the Lease be paid. Appellants' Reply Br. at 8; Appellants' App. at 594. We find this email entirely unavailing, as it is dated June 19, 2006, before USH stopped making rent payments. In addition, Landlords direct our attention to testimony regarding numerous communications between the parties, in which the nonpayment of rent was discussed. Even if the nonpayment of rent was discussed in these meetings, Landlords do not dispute that they were holding meetings that also included discussions regarding the amounts Landlords owed USH with the possibility of a setoff as well as negotiations to sell Grandview to Reed pursuant to his option to purchase.\n[13] We also observe that \"[a] right of forfeiture for breach of a condition, is, in effect, waived if the lessor does not avail himself or herself of the right or if there is an unreasonable delay in enforcement.\" 52 C.J.S. LANDLORD AND TENANT \u00a7 185 (2003) (emphasis added).\n[14] We observe that there may be instances in which a cross-appeal from a prior interlocutory order may be appropriate. In Murray v. City of Lawrenceburg, 903 N.E.2d 93 (Ind.Ct. App.2009), trans. granted, the defendants filed a motion for judgment on the pleadings, which the trial court denied and certified for interlocutory appeal. However, we denied defendants' motion to accept interlocutory jurisdiction. Subsequently, the trial court denied plaintiffs' demand for jury trial and certified this order for interlocutory appeal. We accepted interlocutory jurisdiction over the order denying plaintiffs' request for jury trial, and defendants cross-appealed the order denying their motion for judgment on the pleadings. The plaintiffs objected to such cross-appeal, arguing that it was unrelated to their interlocutory appeal and that we had previously declined to accept interlocutory jurisdiction over the order denying defendants' motion for judgment on the pleadings. We noted that \"`in rare instances reconsideration of motions to accept or oppose discretionary interlocutory appeals may be appropriate, such as where a successive motion demonstrates good cause why the motion panel's initial ruling should be reconsidered.'\" Id. at 100 (quoting Bridgestone Americas Holding, Inc. v. Mayberry, 854 N.E.2d 355, 360 (Ind.Ct. App.2006), trans. granted, summarily aff'd in relevant part by 878 N.E.2d 189, 191 n. 2 (Ind.2007)). We concluded that good cause had been demonstrated in that (1) we had accepted interlocutory jurisdiction to hear the appeal of the denial of plaintiffs' demand for jury trial, (2) the motion for judgment on the pleadings was potentially dispositive, and (3) judicial economy was served by consideration of both certified interlocutory orders simultaneously. Id. Transfer has been granted in Murray.\n[15] Hoosier also argues that Landlords are not entitled to attorney's fees. Hoosier's Appellee's Br. at 35-36. The trial court has not issued a final ruling on attorney's fees and costs from which to appeal. Consequently, the issue is not ripe for appellate review.\n[16] Indiana Code Section 34-24-3-1 provides that a person who suffers a pecuniary loss as a result of a violation of Indiana Code Section 35-43 et seq., may bring a civil action against the person who caused the loss for\n\n(1) An amount not to exceed three (3) times the actual damages of the person suffering the loss.\n(2) The costs of the action.\n(3) A reasonable attorney's fee.\n(4) Actual travel expenses that are not otherwise reimbursed under subdivisions (1) through (3) and are incurred by the person suffering loss to:\n(A) have the person suffering loss or an employee or agent of that person file papers and attend court proceedings related to the recovery of a judgment under this chapter; or\n(B) provide witnesses to testify in court proceedings related to the recovery of a judgment under this chapter.\n(5) A reasonable amount to compensate the person suffering loss for time used to:\n(A) file papers and attend court proceedings related to the recovery of a judgment under this chapter; or\n(B) travel to and from activities described in clause (A).\n(6) Actual direct and indirect expenses incurred by the person suffering loss to compensate employees and agents for time used to:\n(A) file papers and attend court proceedings related to the recovery of a judgment under this chapter; or\n(B) travel to and from activities described in clause (A).\n(7) All other reasonable costs of collection.\n[17] We have explained that\n\nUnjust enrichment comes within the purview of an action based on quasi contract and becomes an [indispensable] indispensible element thereof. Generally, the plaintiff must show the benefit was rendered to the party sought to be charged at his implied request under circumstance in which a court of equity invokes the remedy of restitution in order to avoid unjust enrichment. Therefore, quasi contract is designed to remedy a wrong, and relevant considerations include whether the defendant is [u]njustly enriched and whether the benefits were bestowed at his implied request. Absent a wrong, intervention by equity is inappropriate.\nIndianapolis Raceway Park, Inc. v. Curtiss, 179 Ind.App. 557, 560, 386 N.E.2d 724, 726 (1979) (citations, quotation marks, and footnote omitted).\n[18] Further, we observe that the Prejudgment Possession Ruling specifically provides,\n\nAny payments made by [Hoosier] to [Landlords] under the terms of [this order] shall be setoff to any rent payments owed by [Hoosier] to USH under the sub-lease to the extent that [Hoosier's] payments to [Landlords] equal or exceed the amount or rent payable to USH under the terms of the sub-lease.\nAppellants' App. at 16.\n"} -{"text": "\n165 F.Supp.2d 812 (2001)\nIDX SYSTEMS CORPORATION, Plaintiff,\nv.\nEPIC SYSTEMS CORPORATION, Mitchell Quade, Michael Rosencrance and the University of Wisconsin Medical Foundation, Defendants,\nand\nWestfield Insurance Company, Defendant Intervenor\nNo. 01-C-0039-S.\nUnited States District Court, W.D. Wisconsin.\nJuly 31, 2001.\n\n\n*813 *814 MEMORANDUM AND ORDER\nSHABAZ, District Judge.\nPlaintiff IDX Systems Corporation (\"IDX\") commenced this diversity action against defendants Epic Systems Corporation (\"Epic\"), Mitchell Quade (\"Quade\"), Michael Rosencrance (\"Rosencrance\") and The University of Wisconsin Medical Foundation (\"UWMF\") alleging Wisconsin state law causes of action for trade secret misappropriation and tortious interference with prospective advantage. Defendants UWMF and Epic counterclaim for tortious interference with contract and UWMF further counterclaims for declaratory judgment. Defendant intervenor Westfield Insurance Company (\"Westfield\") cross claims for a declaration as to its duties toward its insureds, defendants UWMF, Quade and Rosencrance. The action is presently before the Court on motions for summary judgment under Federal Rule of Civil Procedure 56(c). All motions have been briefed and the parties have submitted their proposed findings of fact and conclusions of law (\"PFFs\").\n\nUNDISPUTED FACTS\nPlaintiff IDX is a Vermont corporation. Defendants Epic and UWMF are Wisconsin corporations. Defendants Quade and Rosencrance are both Wisconsin residents, current employees of UWMF and former employees of Epic.\nPlaintiff IDX and defendant Epic are competing vendors of information management software for physicians groups, hospitals and healthcare delivery systems. This software has various applications in organizing patient registration, physician and hospital billing and scheduling, managed care and clinical practice. Plaintiff's product is known as the IDX Practice Management System.\nIn December 1986 Affiliated University Physicians (\"AUP\") executed a contract with plaintiff IDX's predecessor-in-interest, Interpretative Data Systems for the provision of information management software (\"the 1986 contract\"). In June 1989 Physicians' Plus Medical Group (\"P-Plus\") contracted with IDX to utilize the IDX Practice Management System (\"the 1989 contract\"). Both contracts contain provisions reserving IDX's proprietary rights and requiring AUP and P-Plus to adhere to certain confidentiality precautions. The then newly-formed UWMF merged with AUP in 1997 and acquired P-Plus in 1998.[1]*815 UWMF continued to use the IDX Practice Management System employed by its predecessors-in-interest.\nIn May 1998 defendant UWMF sought a vendor to provide it with information management, accounting and billing software. Plaintiff IDX and defendant Epic were two of several vendors competing for the new UWMF contract. Throughout the vendor selection process UWMF continued to use the IDX Practice Management System.\nIn March 2001 after hearing the recommendations of the various internal task forces conducting the vendor selection process the UWMF Board of Directors voted to approve the purchase of the IDX product and to extend contract negotiations with IDX. Several contract issues remained to be resolved. Plaintiff IDX signed and forwarded a proposed contract in September 2000, but it was never signed by UWMF. Instead, in October 2000 UWMF awarded its contract to defendant Epic. The two parties executed an agreement in December 2000.\nIn October 2000 IDX's President, Bob Hueber, states that he was called by a person using the pseudonym \"Jack Lutkens\" who apprised him of questionable practices by UWMF during the vendor selection process. IDX subsequently learned that during the vendor selection process defendants UWMF and Epic had engaged in a long series of \"design\" meetings whereby technical employees from the parties met and discussed improvements to Epic's product.\nIn early November 2000, IDX was sent a copy of a memorandum from an anonymous source detailing numerous improprieties during the vendor selection process. Later that month, UWMF employee Cliff Pulver came forward as the anonymous source when he contacted Hueber. Among other things, Pulver told Hueber and IDX attorney David Sellinger that in the design meetings UWMF disclosed detailed information to Epic about the IDX Practice Management System and that a UWMF employee \"translated\" the IDX product to Epic programmers. Pulver further told IDX that defendants Quade and Rosencrance, who were in charge of the vendor selection process, were biased in favor of their former employer Epic, pressured UWMF employees to favor Epic in the selection process, and directed UWMF employees to assist Epic in improving its software in the design meetings.\nPlaintiff filed this suit on January 18, 2001. It alleged causes of action for trade secret misappropriation, tortious interference with contract, tortious interference with prospective advantage, unfair competition, conspiracy and breach of contract. The Court subsequently dismissed plaintiff's claims for tortious interference with contract, unfair competition and conspiracy and limited its claim for tortious interference with prospective advantage pursuant to Federal Rule of Civil Procedure 12(b)(6). Additional facts will be provided as made necessary by the analysis of the parties' claims.\n\nMEMORANDUM\nSummary judgment will be granted where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.Pro. 56(c). Facts are material in a summary judgment analysis if they are outcome influencing under the substantive law governing the action, and any disputes *816 of material fact are \"genuine\" if from the evidence a reasonable jury could find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In determining whether such disputes exist the Court resolves ambiguities and reasonable inferences against the moving party. Id. at 255, 106 S.Ct. 2505. If and when the movant makes its prima facie showing under Rule 56(c) the burden shifts to the non-movant to show, by affidavit or otherwise, that a genuine issue of material fact remains for the fact finder. Fed.R.Civ. Pro. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).\n\nI. Plaintiff's Claim for Trade Secret Misappropriation by Defendants Epic, UWMF, Quade and Rosencrance\nDefendants move for summary judgment on plaintiff's trade secret misappropriation claim on the ground that plaintiff IDX has failed to identify its alleged trade secrets with the requisite particularity.[2] Plaintiff contends that its Supplemental Answer to Defendant Epic's Interrogatory No. 1 (\"Supplemental Answer\"), and the appendices thereto, meet its burden to identify its trade secrets. Exhibits to Pl.'s PFF in Opp'n to Defs.' Mot. for Summ. J., Ex. 10 (\"Exs. to Pl.'s PFF\").\nThe Wisconsin Uniform Trade Secrets Act (\"WUTSA\"), Wis. Stat. \u00a7 134.90, defines a trade secret as information, \"such as a formula, pattern, compilation, program, device, method, technique or process\" that (1) has independent economic value and (2) is the subject of reasonable efforts to maintain secrecy. ECT Int'l, Inc. v. Zwerlein, 228 Wis.2d 343, 597 N.W.2d 479, 482 (App.1999). The information cannot be generally known or readily ascertainable. Wis. Stat. \u00a7 134.90(1)(c)(1). Implicit in this definition is the requirement that plaintiff particularize the information it seeks to protect. Plaintiff therefore has the burden to specify its trade secrets. MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511, 522 (9th Cir.1993) (cited in ECT Int'l, 597 N.W.2d at 483).\nGeneral allegations of the existence trade secrets will not suffice \u0097 a reasonable degree of precision and specificity is necessary. The Seventh Circuit Court of Appeals has held that putative trade secret holders must do more than point to broad areas of technology and claim unspecified trade secrets. Composite Marine Propellers, Inc. v. Van Der Woude, 962 F.2d 1263, 1266 (7th Cir.1992). Trade secrets must be concrete and particularized. Id.; see also AMP Inc. v. Fleischhacker, 823 F.2d 1199, 1203 (7th Cir.1987) (\"AMP has consistently failed throughout this litigation to identify any particularized trade secrets actually at risk.\"); Minnesota Mining & Mfg. Co. v. Pribyl, 259 F.3d 587, 594 n. 2 (7th Cir.2001).[3]\nThis begs the question as to the level of specificity required in identifying trade secrets on summary judgment. At the complaint stage, with its notice pleading requirements under Federal Rule of Civil Procedure 8, plaintiff is not and cannot be expected to plead its trade secrets in detail. Such a public disclosure would amount to an effective surrender of trade secret status. However, once protective *817 orders have been erected to maintain the necessary secrecy plaintiff must come forward with particularized trade secrets. By the summary judgment and trial stages plaintiff must describe its trade secrets in sufficient detail such that a reasonable jury could find that plaintiff established each statutory element of a trade secret. See Trandes Corp. v. Guy F. Atkinson Co., 996 F.2d 655, 661 (4th Cir.1993) (cited in ECT Int'l, 597 N.W.2d at 483). In other words, the description must be specific enough to allow the meaningful comparison of the putative trade secret with information that is generally known and ascertainable in the relevant field or industry. See Universal Analytics v. MacNealSchwendler Corp., 707 F.Supp. 1170, 1177 (C.D.Cal.1989)(trade secret should be described \"with sufficient particularity to separate it from matters of general knowledge in the trade or of special knowledge of those persons ... skilled in the trade.\")(cited in ECT Int'l, 597 N.W.2d at 483). Were it otherwise plaintiff could not prove its case at trial, defendants would be unable to mount a defense and the Court would be hampered in fashioning appropriate injunctive relief.\nPlaintiff contends that it has met its burden to identify the specific trade secrets that it seeks to protect in this action. It relies exclusively on the Supplemental Answer and its appendices. The Supplemental Answer purports to provide nine summary descriptions of plaintiff's trade secrets. Appendix A contains \"specific references\" to technical documentation. Pl.'s Br. in Resp. to Def. UWMF's Mot. for Summ. J. at 18 (\"Pl.'s Resp. Br.\"). Appendix B is a \"forty two page complete description of the trade secrets.\" Id. Plaintiff submits that these three documents, read together, create a definitive list of nine trade secrets.\n\nA. Supplemental Interrogatory Answer\nPlaintiff's Interrogatory Answer sets forth so-called summary trade secret descriptions. It lists as trade secrets the \"concepts, designs, methods and processes that, in combination, provide:\" (1) batch charge entry and batch payment posting, (2) heads down charge entry, (3) real time checking of charges, (4) heads down payment posting, (5) invoice level processing, (6) account inquiry, (7) end user reminder notices, (8) end user defined comments associable with a tickler system and (9) demand statements and statement messages. Exs. to Pl.'s PFF, Ex. 10 at 2-6.\nThese nine items are not trade secrets themselves, but rather are areas of trade secrets. Each area is a feature, or functionality, of plaintiff IDX's Practice Management System. The trade secrets are more narrowly said to be the \"concepts, designs, methods and processes\" underlying each of these nine functionalities. Plaintiff IDX's position is that the means by which the functionalities are provided in its product are trade secrets. Pl.'s PFF at \u00b6 33. The functionalities themselves are not trade secrets. See Pl.'s Resp. to Def. UWMF's PFF \u00b6\u00b6 141, 145, 147, 150, 152, 154, 156, 157, 159, 161, 163, 165, 168, 170, 172, 174, 175, and 178. Nor could they be as plaintiff concedes that the software products of defendant Epic and other competitors incorporate these same nine functionalities. Id. Because the means used to provide the nine functionalities in the IDX product are the asserted trade secrets at issue these means are those which plaintiff must identify with specificity.\nPlaintiff's Supplemental Answer is silent as to any specific concepts, designs, methods or processes underlying the functionalities. It designates nine functionalities as trade secret areas but fails to identify any trade secrets. The document does not *818 identify any means devised by IDX to provide the nine functionalities. It succeeds only in describing the functionalities, specific abilities and benefits they provide IDX customers.\nBy specifying its trade secrets only as \"concepts, designs, methods and processes\" plaintiff is simply regurgitating the statutory definition of trade secrets under WUTSA. See Wis. Stat. \u00a7 134.90 (incorporating \"methods\" and \"processes\" in the statutory definition). Beyond narrowing the areas of the product in which to look, there is no clue as to the substantive content of trade secret information. It fails to clarify that actual information to be protected or even that number of trade secrets which are at issue. Plaintiff has pointed to nine features of its product, not trade secrets themselves, and asserted that their existence is the result of trade secrets. This is insufficient. The Supplemental Answer, by itself, fails to carry plaintiff's burden of identifying specific trade secrets at risk.\n\nB. Appendix A \u0097 Technical Documentation\nPlaintiff urges the Court to consider its summary trade secret descriptions in the Supplemental Answer in conjunction with Appendix A. Appendix A purports to be a set of specific references to technical documentation verifying the identity of plaintiff's alleged trade secrets.\nAppendix A, however, is merely a list of twenty-one user manuals. Their extensive contents cover far more than the nine trade secret areas identified in the Supplemental Answer, and it cites no pages in reference to any specific trade secrets. Moreover, the list provides no indication as to those trade secrets or trade secret areas documented in any given manual. The only apparent way to search the manuals is through a cover-to-cover reading of all twenty-one volumes.\nAppendix A is of no use in identifying the specific trade secrets at issue. Neither defendants nor this Court are required to sift through stacks of technical manuals and speculate as to what amorphous \"concepts, designs, methods and processes\" found within that plaintiff may be seeking to protect. Plaintiff's broad-brush documentation stands in sharp contrast to the narrowing and clarifying documentation provided in Nilssen v. Motorola, Inc., 963 F.Supp. 664 (N.D.Ill.1997). There the district court found the plaintiff's relatively generalized identification of a set of trade secret information to be sufficient given the supplemental reference to specific documents contained in an otherwise voluminous record. Nilssen, 963 F.Supp. at 673.\nPlaintiff's documentation, in contrast, adds nothing. Plaintiff has effectively buried its trade secrets in documentation. After reading plaintiff's Supplemental Answer together with Appendix A the Court faces an unknown number of concepts, designs, methods and processes somewhere documented within twenty-one technical product manuals. This combination can yield no concrete, particularized trade secrets.\n\nC. Appendix B \u0097 Forty-two Page Description of Trade Secrets\nPlaintiff IDX asserts that Appendix B provides a complete description of the trade secrets it pursues in this litigation. Plaintiff argues that summary judgment can only be granted to defendants under their argument if the Court finds that \"absolutely nothing in those forty-two pages is a trade secret.\" Pl.'s Resp. Br. at 19.\nAppendix B is a forty-two page narrative. Like Appendix A, its subject matter *819 significantly exceeds the nine trade secret areas set forth in the Supplemental Answer, and any discussions pertaining to said areas are scattered and incomplete. Discussion of certain trade secret areas as identified in the Supplemental Answer is wholly absent. The Court finds no explicit discussion of real time charge checking (area No. 3), account inquiry (area No. 6) or end user reminder notices (area No. 7). The appendix does contain discussion of heads down data entry (areas Nos. 2 & 4), batches (area No. 1), the tickler system (area No. 8), invoice level processing (area No. 5) and statements (area No. 9). See Exhibits to Pl.'s PFF in Opp'n to Defs.' Mot. for Summ. J., Ex. 10, Appendix B at 11, 13-15, 19, 25, 27 & 34. However, these discussions do not distinguish between descriptions of the functionalities and their benefits and any descriptions of the concepts, designs, methods and processes that provide them. The narrative fails to explicitly identify any concepts, designs, methods or processes as trade secrets. Appendix B provides no new light on the identity of the trade secrets in this action.\nThe Court cannot begin to speculate on the identity of the trade secrets plaintiff is seeking to protect. IDX has produced an unnavigable amount of documentation and instructed the Court and defendants to find its trade secrets themselves. Plaintiff's position that everything in Appendix B is a trade secret until shown otherwise is no different than the approach, repeatedly rejected by the courts, that plaintiff can point to broad areas of technology and vaguely assert that something within is a trade secret. Composite Marine, 962 F.2d at 1266. Long lists of general areas of information containing unidentified trade secrets are not substitutes for particularized and concrete trade secrets. AMP, 823 F.2d at 1203.\nPlaintiff has failed to produce any evidence so as to identify its secret \"concepts, designs, methods and processes\". As the Fourth Circuit Court of Appeals held in Trandes, without some evidence as to what this information is a jury will be unable to compare it to matters within the general knowledge in the trade. Trandes, 996 F.2d at 662. Listing product functionalities as trade secret areas is insufficient, particularly here, where it is conceded that the functionalities are not trade secrets and exist in competing products. Where plaintiff seeks to protect as trade secrets specific means of providing common features those specific means must be identified. The substance of plaintiff's trade secrets is wholly unknown. From plaintiff's vague and amorphous submissions it is impossible to determine whether plaintiff's information satisfies the statutory definition of trade secret. Plaintiff's claim fails for lack of particularized trade secrets and, accordingly, will be dismissed.\n\nII. Plaintiff's Claim for Breach of Contract against Defendant UWMF\nPlaintiff IDX claims defendant UWMF breached the 1986 and 1989 contracts by disclosing trade secrets and confidential information to defendant Epic. Pl.'s Amended Compl. \u00b6\u00b6 112-113. Paragraph 12 in the 1986 contract and Paragraph 13 in the 1989 contract govern the parties' obligations as to confidentiality, non-disclosure and proprietary rights. In the 1986 contract Paragraph 12(c) precludes the customer from providing or making available to a third party the Practice Management system or any related materials. Related materials are defined in 12(a) as \"manuals, documentation, techniques, procedures, ideas, concepts, output and reports.\" The 1989 contract contains a more explicit confidentiality provision. Paragraph 13.2.2(ii) prohibits the customer *820 from using or disclosing or divulging any data or information relating to the IDX system. The provisions do not purport to be limited to information rising to the level of trade secret but rather attempt to restrict disclosure of all information relevant to plaintiff's product regardless of temporal or geographic considerations.\nThis Court has previously held that such confidentiality agreements, which contain no geographic or temporal limitations, can be enforced only to protect proprietary information that rises to the level of trade secret. See Memorandum and Order of May 4, 2001 at 2-3; see also Memorandum and Order of April 11, 2001 at 5-6. An agreement that acts to shield information from the promisee's competitors acts as a trade restraint under Wisconsin law. See Tatge v. Chambers & Owen, Inc., 219 Wis.2d 99, 579 N.W.2d 217, 222 (1998). Such a restraint is reasonable only where it serves to protect the promisee's legitimate business interests. Journal Co. v. Bundy, 254 Wis. 390, 37 N.W.2d 89, 89 (1949).\nPlaintiff has legitimate business interests in trade secrets. Confidentiality provisions that protect trade secrets are inherently reasonable and need not include geographic or temporal limitations. Nalco Chemical Co. v. Hydro Technologies, Inc., 984 F.2d 801, 803 (7th Cir.1993). Provisions protecting information not rising to the level of trade secrets, however, are suspect and must incorporate such limitations. Id. This is only logical. Confidential information that does not rise to the level of trade secret is by definition either worthless, generally known or readily ascertainable, or not the subject of reasonable secrecy efforts. See Wis. Stat. \u00a7 134.90(c)(1)-(2). Plaintiff has little, if any, legitimate interest in forbidding disclosure of such information. Paragraphs 12(c) and 13.2.2(ii) of the 1986 and 1989 contracts, respectively, as applied to mere confidential information, are unreasonable restraints of trade and cannot be enforced.\nWhile both paragraphs are enforceable as to the protection of trade secret information plaintiff cannot show a breach of contract because, as discussed in Part I of this Memorandum and Order, it has failed to identify any trade secrets. The possession of trade secrets is a condition precedent to showing a breach of these provisions. Its failure to identify trade secrets forecloses this claim. Plaintiff's breach of contract claim will be dismissed.\n\nIII. Plaintiff's Claim for Tortious Interference with Prospective Advantage against Defendant Epic\nIn its complaint plaintiff IDX claims that defendant Epic interfered with its prospective economic advantage by inducing UWMF's breach of confidentiality provisions and by making false statements to UWMF about plaintiff. The Court dismissed plaintiff's claim as it related to the induced breach of confidentiality provisions on the grounds that it was displaced by WUTSA. See Memorandum and Order of March 23, 2001 at 10-11. Presently, the Court has been apprised that plaintiff IDX is no longer pursuing its tortious interference claim as it relates to Epic's alleged false statements to UWMF. See Letter of Attorney Mark Camelli of July 11, 2001 (citing insufficient evidence of false statements by Epic). Accordingly, summary judgment will be granted and the claim will be dismissed.\n\nIV. Defendant UWMF and Epic's Counterclaims for Tortious Interference with Contract\nDefendants UWMF and Epic claim that by pursuing its claims plaintiff IDX has imposed heavy legal costs on defendants. These costs have allegedly hindered defendants' performance under their new contract because of the necessary re-direction *821 of capital and personnel time. Defendants claim IDX tortiously interfered with their contract by filing this action. Plaintiff moves for summary judgment based on the Noerr-Pennington doctrine as well as the claims' substantive merits.\n\nA. The Noerr-Pennington Doctrine\nPlaintiff asserts that defendants' tortious interference counterclaims are barred by the Noerr-Pennington doctrine. The Noerr-Pennington doctrine provides that \"parties may petition the government for official action favorable to their interests without fear of suit even if the result of the petition, if granted, might harm the interest of others.\" Tarpley v. Keistler, 188 F.3d 788, 794 (7th Cir.1999). In its Memorandum and Order of April 11, 2001 the Court held that Noerr-Pennington applied to defendants' counterclaims for tortious interference because defendants sought to impose liability for plaintiff's act of filing suit in federal court. See Memorandum and Order of April 11, 2001 at 8-12 (citing Tarpley, supra, and Video Int'l Prod., Inc. v. Warner-Amex Cable Communications, 858 F.2d 1075 (5th Cir. 1988)). The Court left open the question whether the \"sham litigation\" exception was applicable to deprive plaintiff's action of Noerr-Pennington's immunity. Defendants argue in opposition to summary judgment that plaintiff's action is sham litigation and therefore not immunized under Noerr-Pennington.\nNoerr-Pennington's underlying First Amendment right to petition the government does not immunize a petitioning party who seeks to use the governmental process, as opposed to the results of that process, to harm a party. Tarpley, 188 F.3d at 794. Sham litigation is the pursuit of claims so baseless that no reasonable litigant could realistically expect to secure favorable relief. Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49, 62, 113 S.Ct. 1920, 123 L.Ed.2d 611 (1993) (\"PRE\").[4] This objective criteria for determining sham litigation has been equated to the common law notion of probable cause. PRE at 62-63, 113 S.Ct. 1920. A party has probable cause to institute civil proceedings if it could reasonably believe in the possibility of the claim being held valid. Restatement (2d) of Torts \u00a7 674, cmt e (cited in PRE, 508 U.S. at 62-63, 113 S.Ct. 1920). Following the rationale of the Restatement, the petitioner must reasonably believe that facts exist in support of its claim. Restatement (2d) of Torts \u00a7 675.\nDefendants argue that plaintiff IDX's action is completely baseless and was instituted to bully a competitor and former customer in order to gain a market advantage. First, they submit that no reasonable litigant in plaintiff's position would have believed that it had protectable trade secrets. Defendants argue that plaintiff freely disclosed its product in promotional literature, at trade show demonstrations and at on-site customer visits. They cite the large numbers of customer employees and IDX's own former employees who know of IDX's trade secrets. They contend that IDX's product, as used by UWMF, was the result of UWMF's own tailoring and customization and that this tailoring negated IDX trade secrets. They maintain that plaintiff's purported trade secrets are well known among those in the industry, including Epic. Finally, defendants argue that plaintiff has known that its trade secrets can be found on the Internet. *822 According to defendants, these facts, and more specifically plaintiff's knowledge of them, make it unreasonable for IDX to believe that it has any trade secrets to protect.[5] Second, defendants argue that plaintiff had no basis to believe that any misappropriation had occurred in the design meetings.\nIt is not unreasonable to attempt to protect computer software or its components as a trade secret. Software \"includes source code, which is the developer's tool in creating software, object code, and other technical information, including program architecture, design definitions or specifications, flow diagrams and flow charts, data structures, data compilations, formulae and algorithms embodied and used in the software.\" ECT, 597 N.W.2d at 483 (quoting Robert C. Scheinfeld & Gary M. Butter, Using Trade Secret Law to Protect Computer Software, 17 Rutgers Computer and Tech. L.J., 381, 383 (1991) (footnotes omitted)). As a general proposition computer software can, and often does, qualify for trade secret protection. E.g. MAI, 991 F.2d at 522.\nDefendants have cited no evidence which would dissuade a reasonable litigant from believing it had a realistic expectation of possessing trade secrets. While it is undisputed that plaintiff gives potential customers significant access to its product there is no evidence that plaintiff's trade-show demonstrations, on-site visits and promotional literature revealed trade secrets.[6] Trade show disclosure would not ordinarily include the types of information plaintiff eventually pursued as trade secrets. Plaintiff pursued vague concepts, designs, methods and processes that provide or underly features or functionalities of its product. As a practical matter, demonstrations of plaintiff's product are marketing tools and highlight the system's functionalities and capabilities and not the technical concepts as to how those functionalities are provided. This is reiterated by plaintiff's expert, who provides uncontroverted evidence that the level of information provided at software trade shows generally is not of the type or \"level\" of information containing trade secrets. See Expert Report of Donald Michaels, June 29, 2001, at 2.\nSimilarly, the promotional materials cited by defendants are nothing more than marketing materials trumpeting the functionalities, features and capabilities of plaintiff's product and their utility to customers. Nowhere does it appear within them that technical information is divulged. Moreover, the record shows that it is an industry-wide practice to attend these trade shows and hold on-site demonstrations and that few, if any, information management software vendors require potential customers to sign non-disclosure agreements. Thus, a reasonable litigant could expect to prevail by showing that such activities are consistent with reasonable efforts to maintain secrecy. A reasonable litigant would not believe that it had surrendered its trade secrets by using demonstrations and promotional literature.\n*823 While it is undisputed that large number of customer employees and former IDX employees are familiar with IDX's trade secrets defendants fail to mention plaintiff IDX's consistent use of confidentiality agreements. Typically, IDX's employees sign confidentiality agreements and IDX's customers sign agreements stating that they will treat IDX's proprietary information confidentially as they would their own.[7] Implicit in this is the requirement that customers impose confidentiality on their employees. While defendants point to exceptions where confidentiality agreements were not signed there is no requirement that trade secrets be subject to absolute secrecy. Those seeking to protect trade secrets need only employ reasonable measures to protect their trade secrets. Wis. Stat. \u00a7 134.90(1)(c)(2). Plaintiff's expert again testifies that it is the practice of many of those in plaintiff's industry to employ confidentiality agreements in an attempt to preserve secrecy. See Expert Report of Donald Michaels, June 29, 2001, at 2. By consistently employing confidentiality agreements with employees and customers, a reasonable litigant could realistically expect to have preserved its trade secrets despite a high degree of access by third parties.\nDefendants have offered no evidence that the tailoring done to the specific IDX product employed by UWMF has extinguished trade secrets. Defendants' position amounts to a blanket assertion that because some unspecified customization has occurred plaintiff has lost all its trade secrets and should have known as much. Given the vague nature of this customization, a reasonable litigant could expect the possibility that at least some of its trade secrets could be protected.\nThe evidence that other competitors offer products with functionalities similar to those in the IDX product is insufficient by itself to show that plaintiff could not reasonably expect to protect its trade secrets. Defendants' argument necessarily assumes that the functionalities themselves are the trade secrets plaintiff seeks to protect. However, as stated previously, plaintiff identified, albeit insufficiently, its trade secrets as the concepts, designs, methods, and processes underlying or providing the functionalities it shared in common with competitors. The complaint identifies areas of technology and not just features and functions of the product. Pl.'s Compl. \u00b6\u00b6 52, 54. The fact that plaintiff's product had features in common with those of plaintiff's competitors is not reason for it to lose any expectation that its trade secrets were preserved.\nDefendants resurrect their partial summary judgment argument that plaintiff's trade secrets were accessible on the Internet. Defendants have produced no evidence as to the duration of any public accessibility of plaintiff's user manuals on its customers' websites. It is undisputed that plaintiff knew that its manuals were accessible on the Internet for a brief period on one customer's website during the fall of 1999 and were again found to be more broadly accessible on multiple sites in May 2001 during the pendency of this litigation. When IDX learned in 1999 that its manuals were inadvertently accessible to the public via the Internet it took immediate action and directed the customer, the University of Virginia, to remove the material *824 or block public access. To its knowledge this was done. If instead there was continuous Internet access to its materials until May 2001 there is no evidence that plaintiff had knowledge of this. Nor is there evidence that plaintiff possessed knowledge prior to its commencement of litigation of the more widespread public access to its materials in 2001 on other customer websites. Although plaintiff became aware of facts during discovery that may have damaged the protectibility of its proprietary information a reasonable litigant, knowing what plaintiff knew when it filed suit, had no reason to believe that its trade secrets had been extinguished and were therefore unenforceable. Even knowing that its manuals were posted for a brief period in 1999 on a customer website, a reasonable litigant still could expect, given the infancy of the law regarding trade secrets and the Internet, that its trade secrets were still not generally known, not readily ascertainable or were subject to reasonable secrecy measures.\nFinally, defendants maintain that even if plaintiff could reasonably have expected to have preserved its trade secrets it had no basis to believe that any trade secrets were misappropriated by defendants. Plaintiff IDX and defendant Epic were engaged in a long and competitive vendor selection process to win defendant UWMF as a customer. Plaintiff IDX was the tentative winner of this competition when the UWMF board voted to enter negotiations with IDX in March 2000. Defendant UWMF then reversed course and awarded the contract to defendant Epic in October 2000. At that time IDX officials began receiving anonymous correspondence alleging UWMF's unfairness and unethical behavior during the vendor selection process. Prior to IDX's filing of its action, in November 2000 UWMF employee Cliff Pulver, no longer anonymous, told IDX President Bob Hueber that UWMF had disclosed to Epic detailed information about the IDX system in a long series of face-to-face meetings between defendants UWMF and Epic. Aff. of Bob Hueber, \u00b6 8. Defendant UWMF had substantial access to any trade secrets in IDX's product, and was under contract not to disclose them. Pulver told Hueber that a UWMF programmer had \"translated\" the IDX system to Epic programmers and that all of this was done to aid Epic in the vendor selection process. Id.[8] Although in hindsight plaintiff may have no case for trade secret misappropriation, given its state of knowledge prior to commencing suit a reasonable litigant in IDX's position realistically could have believed that its secrets had been misappropriated or were in jeopardy.\nThe circumstances surrounding the vendor selection process and the correspondence from at least one source from within UWMF provided probable cause for plaintiff to commence this litigation. This case, therefore, cannot be considered sham litigation. Under the Noerr-Pennington doctrine defendants' tortious interference *825 claims cannot be used to impose liability upon plaintiff based on its resort to the federal courts.\n\nB. Substantive Requirements for Tortious Interference\nHad defendants shown plaintiff's action to constitute sham litigation their tortious interference with contract claim was fatally defective nonetheless. To prevail on a claim of tortious interference with contract, defendants must show, among other things, that plaintiff interfered with their contract. Shank v. William R. Hague, Inc., 192 F.3d 675, 681 (7th Cir. 1999). Defendants maintain that plaintiff's lawsuit has imposed legal costs on them and therefore has interfered with their contract by making their respective performances more difficult. However, where, as here, there has been no induced breach of the contract the contracting parties must show interference with a particular contractual right. Sampson Investments v. Jondex Corp., 176 Wis.2d 55, 499 N.W.2d 177, 184 (1993). The failure to show interference with a specific contractual right is fatal to a tortious interference claim. Id. Legal expenses and wasted time generally imposed on the defendants' operation are insufficient for this purpose. Sampson requires more than a disrupted expectancy that a contractual relationship will be continued in a certain manner. Shank, 192 F.3d at 689. Here, defendants contend that they had an expectancy that they could complete their contract in the absence of legal difficulties. Defendants conception of Wisconsin law, that any burden imposed on contractual performance is actionable as tortious interference, was the position taken by the dissent and rejected by the majority in Sampson. Sampson, 499 N.W.2d at 185 (Abrahamson, J. dissenting). Defendants have no cause of action for tortious interference under this theory of interference.\n\nV. Defendant UWMF's Claim for Declaratory Judgment on the Validity of Plaintiff's Contract\nDefendant UWMF seeks a declaration that the confidentiality provisions in 1986 and the 1989 contracts unreasonably restrain trade contrary to Wis. Stat. \u00a7 133.03 and thus are invalid and unenforceable. Said defendant also seeks to recover all monies paid under the contracts pursuant to Wis. Stat. \u00a7 133.14.\n\nA. Declaratory Judgment \u0097 Wis. Stat. \u00a7 133.03\nFor the reasons set forth in Part III herein defendant is entitled to a declaration that Paragraph 12(c) of the 1986 contract and Paragraph 13.2.2(ii) of the 1989 contract both violate Wis. Stat. \u00a7 133.03 in part and thus cannot be enforced to protect confidential information that does not rise to the level of a trade secret under Wis. Stat. \u00a7 134.90. However, the provisions are valid in part and may be enforced to protect any trade secrets plaintiff may have in its product.\n\nB. Contract Payment Recovery \u0097 Wis. Stat. \u00a7 133.14\nSection 133.14 of the Wisconsin Statutes states that \"[a]ll contracts or agreements made by any person while a member of any combination or conspiracy prohibited by \u00a7 133.03 shall be void ...\" and that \"[a]ny payment made upon, under or pursuant to such contract or agreement may be recovered ....\" Defendant UWMF seeks to recover all payments made to plaintiff IDX under the 1986 and 1989 contracts. Plaintiff has contested defendant UWMF's reliance on \u00a7 133.14, arguing that the statute applies only to contracts or agreements that are the product of a combination or conspiracy. This *826 Court agreed with defendant's interpretation on plaintiff's motion to dismiss, and held that \u00a7 133.14 applies to all contracts in violation of \u00a7 133.03 regardless of whether they were made as part of a combination or conspiracy. See Memorandum and Order of April 11, 2001 at 7.\nThe Court is persuaded to reconsider its prior interpretation of Wis. Stat. \u00a7 133.14. A more natural reading of the statute is the one proffered by plaintiff \u0097 that \u00a7 133.14 applies only to contracts that are made as part of a conspiracy or combination. The language \"[a]ll contracts or agreements\" is inclusive and is meant to cover all forms of pacts whether formal or informal. It is not designed to distinguish between contracts and agreements for the purposes of the statute. Indeed, the statute provides no basis for such a distinction between contracts and agreements. Under defendant's reading payments may be recovered upon every contract in restraint of trade and upon every agreement made as part of a conspiracy or combination in restraint of trade, but not upon simple agreements in restraint of trade that are not made as part of a combination or conspiracy. The Court finds no support for this result in the language of the statute nor in any decision of a Wisconsin court.[9]\nThere is no allegation or evidence that the 1986 or 1989 contracts or any provisions thereof were the products of a combination or conspiracy. Accordingly, defendant is not entitled to recover any payments it made under the 1986 or 1989 contracts pursuant to Wis. Stat. \u00a7 133.14.\nFurthermore, even had this Court re-affirmed defendant UWMF's interpretation of Wis. Stat. \u00a7 133.14 it could not recover its contract payments made under the contracts. The confidentiality provisions are clearly provisions ancillary to the primary purposes of the 1986 and 1989 contracts. Partially invalidating these provisions will not defeat the primary purposes of the bargains \u0097 which were for the licensing of IDX's Practice Management System. Both contracts contain a severability provision. Wisconsin law provides for the severing of an illegal or invalid provision where the primary purpose of the contract can be enforced. See Simenstad v. Hagen, 22 Wis.2d 653, 126 N.W.2d 529, 534 (1964). Section 133.14 does not foreclose this result. Because \u00a7 133.14 conditions recovery to where the \"contract or agreement is founded upon, is the result of, grows out of or is connected with any violation of [\u00a7 133.03]\" it is entirely consistent with severing invalid provisions where such severance does not defeat the primary purpose of the bargain. Here, it cannot be said that the bargain for the licensing of IDX's product grows from the confidentiality provisions. Rather, it is the reverse. Defendant made no payments under either confidentiality provision and therefore it has no payments under those provisions to recover. To allow defendant to recover more than ten years of payments made for the legitimate goods and services provided because of the inclusion of one illegal ancillary clause would be an absurd result, and one not called for or contemplated by \u00a7 133.14. Defendant is not entitled to such a windfall.\n\n\n*827 VI. Defendant Intervenor Westfield's Cross Claim for Declaratory Judgment on Its Insurance Contract with Defendants UWMF, Quade and Rosencrance.\n\nDefendant intervenor Westfield is an insurance company licensed to do business in the State of Wisconsin. It maintains corporate offices in Westfield Center, Ohio. Westfield issued to defendant UWMF policy No. CSP 3 760 125 which provides insurance coverage during the time periods from January 1, 1999 to January 1, 2002. Westfield intervened in this action to resolve the question of its duty to defend and indemnify defendants UWMF, Quade and Rosencrance from IDX's claims.\nThe policy provides both primary Commercial General Liability (\"CGL\") coverage as well as Umbrella liability coverage. Both the CGL and Umbrella coverages provide insurance for \"advertising injury,\" \"personal injury\" and \"property damage.\" The CGL policy defines advertising injury to include the \"[m]isappropriation of advertising ideas and style of doing business.\" The Umbrella policy includes this language in its definition of personal injury. Personal injury is defined by both the CGL and Umbrella policies to include \"wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises.\" Property damage in both coverages is defined to include \"[l]oss of use of tangible property that is not physically injured.\" Such property damage must occur a the result of an \"occurrence,\" defined as an accident. Under the policy, Westfield has a duty and a right to defend suits that seek damages for \"advertising injury,\" \"personal injury\" and \"property damage\", but the policy disclaims any such duty and right where the insurance does not apply by its terms.\nAn insurer's duty to defend depends on the allegations of the complaint, and is unrelated to the merits of the claim. Newhouse v. Citizens Sec. Mut. Ins. Co., 176 Wis.2d 824, 501 N.W.2d 1, 5 (1993). It is triggered by the allegations found within the four corners of the complaint. Id. The duty to defend is not limited by a plaintiff's choice of legal theories \u0097 rather, where the conduct attributed to the insured in the complaint is arguably within the categories of covered wrong-doing the duty to defend will apply. Curtis-Universal, Inc. v. Sheboygan Emergency Medical Services, Inc., 43 F.3d 1119, 1122 (7th Cir.1994).\nPlaintiff IDX's claims against UWMF, Quade and Rosencrance by all accounts relate solely to theft of confidential information and trade secrets. UWMF employees are alleged to have met with Epic personnel to disclose aspects of the IDX Practice Management System including the product's design, processes, systems and organization. Defendants' alleged theft is limited to technical aspects of IDX's product. These alleged actions form the basis for plaintiff's claims for trade secret misappropriation, conspiracy and breach of contract against defendants.\nDefendants UWMF, Quade and Rosencrance maintain that plaintiff IDX's complaint alleges conduct that arguably falls within misappropriation of advertising ideas and style of business. Advertising injury clauses are given an \"ordinary language\" meaning. Zurich Ins. Co. v. Amcor Sunclipse North America, 241 F.3d 605, 607 (7th Cir.2001). The contractual phrase \"misappropriation of advertising ideas or style of business\" was interpreted by the Wisconsin Court of Appeals in Atlantic Mutual Ins. Co. v. Badger Medical Supply Co., 191 Wis.2d 229, 528 N.W.2d 486 (App.1995). By its plain meaning, an advertising idea is \"an idea for calling public attention to a product or business, *828 especially by proclaiming desirable qualities so as to increase sales or patronage.\" Id., 528 N.W.2d at 490. Similarly, a style of doing business refers to \"a company's comprehensive manner of operating its business.\" Id. (stating that trade dress and distinctive sales techniques could qualify as style of business).\nThere is no allegation in plaintiff's complaint that can be read to allege that defendants misappropriated IDX's advertising ideas or style of business. Rather, all allegations of misappropriation relate to technical aspects of IDX's product itself, and not to ideas which call attention to IDX's product in the market or as to the manner in which it operates its business. Plaintiff has not alleged that defendants misappropriated the image of its product or business, or any techniques by which it operates its business. A style of business cannot be said to not include technical aspects of a product that creates functionality. Only such technical aspects are alleged to have been misappropriated. Plaintiff's specific allegations of misappropriation do not obligate Westfield to defend UWMF, Quade and Rosencrance under this part of the insurance contract.\nDefendants argue that Westfield must defend plaintiff's action because it amounts to a claim that IDX has suffered property damage in the \"loss of use of tangible property that is not physically injured.\" This argument fails for several reasons. First, under this contractual provision the property damage related to loss of use occurs when the property in question is rendered useless by the insured's actions. Wisconsin Label Corp. v. Northbrook Property & Cas. Ins. Co., 233 Wis.2d 314, 607 N.W.2d 276, 288 (2000) (analyzing cases). There is no allegation, explicit or implicit, in plaintiff's complaint that it has lost the use of its product as the result of defendants' purported trade secret misappropriation. Nor does plaintiff allege that the value of its product was diminished. The Court finds no support for the proposition that theft of trade secrets results in such a loss of use. Second, intellectual property such as trade secrets and copyrights are intangible property, not tangible property as required by the provision for coverage. See Rhein Bldg. Co. v. Gehrt, 21 F.Supp.2d 896, 902 (E.D.Wis.1998). Third, and finally, the trade secret misappropriation as alleged in the complaint was not an accident as required by the policy, but rather the product of a conscious course of action by UWMF, Quade and Rosencrance. Accordingly, plaintiff's complaint raises no duty to defend under the property damage coverage clause.\nDefendants finally maintain that the wrongful eviction definition of personal injury provides coverage under plaintiff's complaint. They cite a district court case holding that unsolicited e-mails are actionable as trespasses or wrongful entries. See America Online, Inc. v. LCGM, Inc., 46 F.Supp.2d 444 (E.D.Va.1998). They argue by analogy that their conduct, as alleged, has effectively barred IDX from the UWMF computer system and thus may be viewed as a wrongful eviction. While in some legal circles defendants' argument, had it been better developed, would be lauded as \"novel,\" \"creative\" or \"inventive\" this Court identifies it more accurately as \"ridiculous\" or \"frivolous.\" Plaintiff's allegations permit no inference that it had a right to occupancy in UWMF's premises or access to its computer systems. Moreover, any fantastically-conceived wrongful eviction from UWMF's premises came as a result of UWMF's decision to hire Epic, which is not plaintiff's proposed basis for defendants' liability. No wrongful eviction can be created as a result of the alleged misappropriation that forms the entire basis *829 for plaintiff's claims against defendants UWMF, Quade and Rosencrance.\nThe Court finds no coverage, whether affirmatively argued by defendants or left buried in the expanse of the insurance contract, that when read in conjunction with the allegations of IDX's complaint obligates defendant intervenor Westfield to defend UWMF, Quade and Rosencrance. Accordingly, Westfield is entitled to a declaration that it has no such duty to defend or to indemnify said defendants under the contract of insurance.\n\nVII. Scheduling of Contempt Hearing\nHaving resolved the substantive merits of the parties claims the Court schedules a contempt hearing for Attorney David Sellinger. See Memorandum and Order of July 11, 2001. Said hearing is scheduled in Court at 9:00 A.M. on August 15, 2001. Attorney Sellinger may show good cause at that time why he should not be found in contempt of court and fined for his actions detailed in the July 11 Memorandum.\nAccordingly,\n\nORDER\nIT IS ORDERED that defendant UWMF's motion for summary judgment, in which defendants Epic, Rosencrance and Quade join in part, is GRANTED dismissing with prejudice plaintiff's claims for trade secret misappropriation, tortious interference with contract and breach of contract;\nIT IS FURTHER ORDERED that plaintiff's motion for summary judgment on defendant UWMF and defendant Epic's counterclaims for tortious interference with contract is GRANTED dismissing those counterclaims with prejudice;\nIT IS FURTHER ORDERED that plaintiffs motion for summary judgment on defendant UWMF's counterclaim for declaratory judgment is DENIED, that summary judgment is GRANTED in favor of defendant UWMF and that judgment is ordered in its favor declaring that Paragraph 12(c) of the 1986 contract and Paragraph 13.2.2(ii) of the 1989 contract are invalid in part and unenforceable to protect confidential information not rising to the level of trade secret under Wisconsin law;\nIT IS FURTHER ORDERED that plaintiff's motion for summary judgment on defendant UWMF's counterclaim for contract payment recovery under Wis. Stat. \u00a7 133.14 is GRANTED dismissing this counterclaim with prejudice;\nIT IS FURTHER ORDERED that defendant intervenor Westfield's motion for summary judgment is GRANTED, and judgment is entered in its favor declaring that Westfield has no obligation under policy number CSP 3 750 125 to defend or indemnify defendants UWMF, Quade and Rosencrance from the claims of IDX in this action;\nIT IS FURTHER ORDERED that a contempt hearing is scheduled in Court at 9:00 A.M. on August 15, 2001 whereby plaintiff's counsel Attorney David Sellinger may show good cause as to why he should not be found in contempt of court and fined;\nIT IS FURTHER ORDERED that judgment be entered in favor of defendants dismissing plaintiff's complaint and all claims contained therein with prejudice and costs.\nIT IS FURTHER ORDERED that judgment be entered in favor of plaintiff dismissing the counterclaims of defendants UMF and Epic with prejudice and claims except for that declaratory judgment which is entered in favor of defendant UMF declaring that Paragraph 12(c) of the 1986 contract and Paragraph 13.2.2(ii) of the 1989 contract are invalid in part and *830 unenforceable to protect confidential information not rising to the level of trade secret under Wisconsin law.\nNOTES\n[1] Defendant UWMF disputes the extent to which it assumed AUP's liabilities and acquired P-Plus' assets. It omits any argument, however, that the 1986 and 1989 contracts are not binding upon it. Its arguments on summary judgment assume that they are so binding. Accordingly, the Court will assume for purposes of this motion that the two contracts bind defendant UWMF.\n[2] Only defendant UWMF makes this argument in its brief. The remaining defendants join in UWMF's argument.\n[3] Both Wisconsin and Illinois have adopted the Uniform Trade Secrets Act (\"ITSA\"). Compare Wis. Stat. \u00a7 134.90 with 765 Ill. Comp. Stat. \u00a7 1065. In Composite Marine and AMP the Seventh Circuit construed the ITSA. These interpretations are authoritative. See Wis. Stat. \u00a7 134.90(7).\n[4] If the petitioning party's action fails this objective test courts are to examine next subjective intent. PRE, 508 U.S. at 60, 113 S.Ct. 1920. A petition that fails both the objective and subjective tests is a sham and is not immunized by Noerr-Pennington.\n[5] Defendants also rely on plaintiff's conduct during the course of the litigation. While plaintiff's and its counsel's conduct has been at times obstructionistic such argument is irrelevant to the existence of whether plaintiff had probable cause to institute these proceedings.\n[6] Given that defendants cannot identify the specific trades secrets at issue because of plaintiff's inadequate specification it remains to be seen how defendants can now contend that specific trade secrets were disclosed by plaintiff through its practices. Just as plaintiff does not specify any trade secrets it possesses defendants cannot specify any trade secret plaintiff failed to protect.\n[7] The fact that atypical circumstances may exist where an employee or consultant did not sign such an agreement would not require a reasonable litigant to abandon hope of preserving its trade secrets as defendants argue. Whether isolated cases of employees not signing such agreements is consistent with overall reasonable measures to maintain secrecy is an issue upon which a reasonable litigant could realistically hope to prevail in court.\n[8] Defendants cite numerous objections to Hueber's affidavit. See Def. UWMF's Resp. to Pl. IDX's PFF in Supp. of IDX's Mot. for Summ. J., \u00b6 37. Although they contend that Hueber's affidavit is self-serving and inconsistent with Pulver's deposition testimony, they provide no evidence contradicting Hueber's account of what Pulver said during the prefiling interviews, despite having ample opportunity to do so. What Pulver told Hueber prior to IDX's commencement of litigation is relevant. This, and not what Pulver said subsequently, is what factored into plaintiff's choice to file suit. Their objection that the affidavit contains hearsay is meritless, as Pulver's statements are being offered as a basis for plaintiff's probable cause to file suit, and not for the truth of the matter asserted that defendants actually engaged in misappropriation. Defendants' remaining objections are similarly without merit.\n[9] Defendant UWMF cannot rely on Open Pantry Food Marts of Southeastern Wisconsin, Inc. v. Falcone, 92 Wis.2d 807, 286 N.W.2d 149 (App.1979). The Court of Appeals in Open Pantry examined \u00a7 133.14 in the context of a statute of limitations question in the pleadings stage of a contract litigation. While the court broadly characterized the statute as a remedial one it never made a substantive interpretation as to the statute's applicability. Open Pantry, 286 N.W.2d at 152.\n"} -{"text": "\n244 B.R. 499 (1999)\nIn re Marshall S. STERMAN, Debtor.\nXerox Financial Services Life Insurance Company and Van Kampen Merritt, Inc., Plaintiffs,\nv.\nMarshall S. Sterman and J. Daniel Hoffman, Defendants.\nXerox Financial Services Life Insurance Company and Van Kampen Merritt, Inc., Plaintiffs,\nv.\nMarshall S. Sterman, Defendant,\nand\nDibo Attar, Esther Attar, J. Daniel Hoffman, and Davstar II Managed Investments Corp. N.V., Reach and Apply Defendants.\nNos. Civ.A. 97-11887-GAO, Civ.A. 92-11029-GAO.\nUnited States District Court, D. Massachusetts.\nNovember 9, 1999.\n*500 *501 Richard A. Oetheimer, Goodwin, Procter & Hoar, Boston, MA, for Debtor.\nDaniel S. Savrin, Bingham, Dana & Gould, Boston, MA, for Plaintiffs.\nJohn G. Loughnane, Goodwin, Procter & Hoar, Boston, MA, for Defendants.\n\nMEMORANDUM AND ORDER\nO'TOOLE, District Judge.\nPursuant to prior judgments entered against him, defendant Marshall S. Sterman (\"Sterman\") owes the plaintiffs Xerox Financial Services Life Insurance Company and Van Kampen Merritt, Inc. (\"Xerox/VKM\") a combined total of more than $6 million. The plaintiffs' efforts at collection have been unsuccessful, and as a result this contentious litigation has lasted more than seven years. On November 18, 1996, Sterman filed a Chapter 7 bankruptcy petition. Xerox/VKM filed a complaint in the bankruptcy proceedings seeking to deny Sterman a discharge under section 727(a) of the Bankruptcy Code, 11 U.S.C. \u00a7 727(a). On the motion of Xerox/VKM, this Court withdrew the reference of the complaint and consolidated the matter with the pending post-judgment collection proceedings. The plaintiffs have also moved, in the proceedings pending in this Court since 1992, to reach and apply certain shares of stock in companies related to Sterman that had been transferred, putatively by foreclosure sales, to the reach and apply defendants, Esther Attar, J. Daniel Hoffman, and Davstar II Managed Investments Corporation N.V. (\"Davstar II\"), with the active cooperation of the other reach and apply defendant, Dibo Attar.\nBoth issues were tried to the Court sitting without a jury. Upon consideration of the evidence and the arguments of the parties, the Court makes the following findings of fact and rulings of law.\nI. General Findings\nA. Marshall Sterman and His Companies\nMarshall Sterman is an experienced businessman who has been essentially self-employed as an entrepreneur, investment banker, and venture capitalist for many years. He has conducted his business affairs through a variety of entities controlled by him, including the Mayflower Group, Ltd., Mayflower Partners, M.S. Sterman and Associates, The Sterman Company, Pilgrim Financial Services, and the State Street Group, Inc., sometimes with \"partners,\" sometimes on his own. One of his \"partners\" in the Mayflower Group is Barry Hoffman, his first cousin. Barry Hoffman's son, Daniel Hoffman, figures in the events at issue in ways to be explained later. The other \"partners\" in the Mayflower Group originally were Paul Chrestensen and Lester Grant, who was deceased at the time of the relevant events and whose interest was held (so far as appears, passively) by his widow, Faith Grant.\nThe interrelationships among Sterman's companies were complex. For present purposes, the most important ones were these: Mayflower Group owned a 75% interest in Pilgrim Financial Services, which company in turn owned 100% of a company called Allied Programs Corp. Allied Programs held interests in some other companies *502 engaged, in broad terms, in running private correctional programs, including a facility located in Brush, Colorado. Specifically, Allied Programs owned a 90% interest in Rebound Corp., which operated and managed the Brush facility under contract with various states. The Brush facility's physical plant and real estate were owned by the High Plains Limited Partnership. Allied Programs was the general partner of the High Plains Limited Partnership, with a 25% stake. The limited partner, with a 75% interest, was a company called Allied First Class Partners, Inc. (\"AFCP\"). The shareholders of AFCP, before the transactions described below, included Sterman, Lane Hoffman (Barry's wife), Faith Grant, Chrestensen and others. Rebound Corp., the operator of the Brush facility, paid rent to the owner of the real estate, High Plains Limited Partnership. Through Allied Programs, the Mayflower Group \u0097 and therefore Sterman \u0097 had a significant financial interest in both the owner (High Plains) and the operator (Rebound) of the Brush facility. Sterman also had a separate interest in High Plains through his ownership of 11.4% of the outstanding shares of its limited partner, AFCP.\nA chart of the interrelationships, received in evidence as Exhibit 271, is attached to this memorandum as Appendix A.\nB. Sterman's Relatives and Friends\nIn addition to Sterman's cousins, Barry and Daniel Hoffman, there are other relatives and friends of Sterman who figure in the events at issue.\nSterman's wife is Dorothy Sterman (\"Dorothy\"). Throughout Sterman's business career, Dorothy has been at home, not directly engaged in business affairs. Title to the Sterman residence in Beverly, Massachusetts, is in her name, although Sterman has seen to the payment of the mortgage and any necessary other business with the mortgagee bank, as well as the payment of real estate taxes on the property.\nDr. Joel Glovsky is a longtime friend of Sterman's. Sterman has described him as his \"closest personal friend.\" Glovsky lent Sterman money from time to time, secured by a pledge of certain assets. Of especial importance to the issues presented in this case, Sterman pledged as security for his debt to Glovsky 300 shares of the stock of the Mayflower Group and 1200 shares of the stock of AFCP, in each case the full extent of his holdings in the company. Sterman and Glovsky also participated in some of the same business ventures. For example, both Dr. Glovsky and Sterman were hired as consultants by a company called Omega Orthodontics, Inc., receiving their compensation in shares of Omega stock.\nDibo Attar is also a business investor whom Sterman met in connection with some investments they had each made. For example, Attar and Sterman had served together on the board of directors of KTI, Inc. for several years. Attar also apparently conducted business through a number of entities. Attar was a consultant to Davstar II and able to direct its investments. Attar's wife is Esther Attar, who, like Dorothy Sterman, did not take an active role in her husband's business affairs.\nC. The Consent Judgment and the Subsequent Injunctions\nConsent judgments in favor of Xerox/VKM and against Sterman were entered in mid-1993. In August 1993, Xerox/VKM began serving trustee summonses on the various entities through which Sterman conducted his business affairs, including High Plains Limited Partnership, AFCP, Allied Programs, M.S. Sterman & Associates, and the Mayflower Group. In December 1993, the plaintiffs moved for an injunction to reach and apply Sterman's interests in those entities. A temporary restraining order was granted and entered, on January *503 6, 1994, this Court (Zobel, J.) entered an \"Agreed Injunction and Order of Payment and Dissolution.\" See Docket No. 76. Among other things the Agreed Injunction prohibited Sterman and anyone acting \"in participation or concert with him\" from assigning, encumbering, selling, transferring or otherwise disposing of any property interest Sterman had in High Plains, AFCP, Allied Programs, M.S. Sterman, or Mayflower Group. The injunction also directed the named entities \"to continue making income payments . . . to Sterman consistent in amount and frequency with past practice, including but not limited to salary, shareholder distributions and dividends, consulting fees and management fees.\" The injunction established an escrow fund into which all income Sterman received from any of the named entities would be deposited and from which Sterman was permitted a $10,000 monthly allowance for living expenses.\nBy an order entered February 25, 1994 (Docket No. 129), the Court continued the injunction in effect \"until further order\" and extended its scope to reach Sterman's interests in a number of other companies, including The Sterman Company; KTI Realty Limited, LP; KTI Holdings, Inc.; KTI Realty Trust; Microfluidics; Pilgrim Financial Services; Mayflower Partners, Inc.; Mayflower Venture Corporation; Rebound Colorado Corporation; and several others not relevant here. In entering the February 25 order, the Court (again Zobel, J.) noted, \"The record is clear that [Sterman] has used a variety of means to obstruct collection of this debt.\"\nBy mid-1995, the plaintiffs had become convinced that Sterman was not abiding by the injunctions, and they moved, among other things, for a finding of contempt and a reduction in Sterman's living expense allowance. After an evidentiary hearing, this Court found Sterman in contempt of the injunctions on the basis of several different evasions that were convincingly proved by the evidence. This Court said:\nIn sum, Sterman has orchestrated a mind-boggling array of transactions among several corporations under his control in an effort to keep his various business undertakings afloat and to avoid his creditors (or at least those creditors he does not like). Rarely has a more tangled web been woven. The evidence is overwhelmingly clear and convincing that Sterman has violated this Court's orders.\nXerox Financial v. Sterman, No. 92-11029-GAO at 9 (D.Mass. filed Aug. 9, 1996) (Memorandum and Order).\nThe Court reduced Sterman's living expense allowance and scheduled a hearing to consider what further sanctions might be imposed for the contempt. Before the hearing was held, Sterman filed his petition in bankruptcy, interrupting the Court's consideration of the matter.\nII. Conclusions of Law and Specific Supporting Findings\nAs noted above, there are two separate complaints brought by the plaintiffs, consolidated for hearing, that are to be resolved. One is the complaint, initially brought within the bankruptcy case but withdrawn to be heard by this Court in the first instance, to deny Sterman a discharge in bankruptcy under 11 U.S.C. \u00a7 727(a). The other is the complaint to reach and apply shares of stock that the plaintiffs claim Sterman improperly caused to be transferred to other persons.\nA. Denial of a Discharge\n1. General Considerations\nThe statutory right to a discharge in bankruptcy is to be \"construed liberally in favor of the debtor\" and strictly against the objecting creditor. In re Tully, 818 F.2d 106, 110 (1st Cir.1987); see also In re Bajgar, 104 F.3d 495, 498 n. 1 (1st Cir.1997); 6 Collier on Bankruptcy \u00b6 727.01[4] at 727-12 (15th ed. rev.1999). *504 The reasons for denial of a discharge \"must be real and substantial, not merely technical and conjectural.\" In re Tully, 818 F.2d at 110 (internal quotations and citations omitted).\nHowever, despite this preference for discharges, there are limitations on a debtor's \"right\" to a discharge. There must be, for example, some way of ensuring that \"those who seek the shelter of the bankruptcy code do not play fast and loose with their assets or with the reality of their affairs.\" Id. So, \"[w]hile the law favors discharges in bankruptcy, it will not ordinarily tolerate the [debtor's] intentional departure from honest business practices where there is a reasonable likelihood of prejudice.\" Kentile Floors, Inc. v. Winham, 440 F.2d 1128, 1131 (9th Cir.1971).\nUnder section 727(a) of the Bankruptcy Code, the burden of persuasion rests with the party opposing the discharge. Fed.R.Bankr.P. 4005; In re Burgess, 955 F.2d 134, 136 (1st Cir.1992), abrogated on other grounds Field v. Mans, 516 U.S. 59, 116 S.Ct. 437, 133 L.Ed.2d 351 (1995). The objecting party must prove each element of its objection to a discharge by a preponderance of the evidence. See, e.g., In re Adams, 31 F.3d 389, 394 (6th Cir.1994); Farouki v. Emirates Bank Int'l, Ltd., 14 F.3d 244, 249-50 n. 17 (4th Cir.1994); In re Beaubouef, 966 F.2d 174, 178 (5th Cir.1992); In re Serafini, 938 F.2d 1156, 1157 (10th Cir.1991); cf. Grogan v. Garner, 498 U.S. 279, 286-87, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991) (applying a preponderance of the evidence standard to a creditor seeking to prove an exception to discharge under \u00a7 523(a) of the Bankruptcy Code).\n2. 11 U.S.C. \u00a7 727(a)(2)(A)\nA debtor may be denied a discharge under \u00a7 727(a)(2)(A) if the creditor proves by a preponderance of the evidence that the debtor (1) with actual intent to hinder, delay or defraud a creditor (2) transferred, removed, destroyed, mutilated or concealed his property, or permitted another to do so (3) within one year before the date of the filing of the petition for bankruptcy. 11 U.S.C. \u00a7 727(a)(2)(A). Moreover, a concealment of a property interest that occurred more than one year prior to the filing may still provide a basis for denial of discharge if it continues within the year preceding the filing. See, e.g., Rosen v. Bezner, 996 F.2d 1527, 1531 (3d Cir.1993); In re Olivier, 819 F.2d 550, 554-55 (5th Cir.1987); In re Sicari, 187 B.R. 861, 875 (Bankr.S.D.N.Y.1994); 6 Collier on Bankruptcy \u00b6 727.02[2] at 727-14 (15th ed. rev.1999).\nThe objecting creditor must prove that the debtor acted with an actual intent to hinder, delay or defraud. In re Wines, 997 F.2d 852, 856 (11th Cir.1993); In re Moreno, 892 F.2d 417, 419 (5th Cir. 1990). Since actual intent will rarely be capable of proof by direct evidence, circumstantial evidence of intent may suffice. See In re Varrasso, 37 F.3d 760, 764 (1st Cir.1994); see also In re Krehl, 86 F.3d 737, 743 (7th Cir.1996); In re Smiley, 864 F.2d 562, 566 (7th Cir.1989); In re Devers, 759 F.2d 751, 753 (9th Cir.1985). Bankruptcy judges have sometimes inferred actual intent from the existence of \"badges of fraud,\" for which no adequate rebuttal or explanation is evident. See, e.g., In re Silverstein, 151 B.R. 657, 660-61 (Bankr. E.D.N.Y.1993); In re Penner, 107 B.R. 171, 175-76 (Bankr.N.D.Ind.1989); In re Titus, 75 B.R. 256, 259 (Bankr.W.D.Mo. 1985). Some of the \"badges of fraud\" include (1) the lack or inadequacy of consideration for the property transferred; (2) the existence of a family, friendship or other relationship between the transferor and transferee; (3) the transferor's retention of the benefits or possession of the transferred property; (4) the chronology or timing of the particular transfer under question. See In re Penner, 107 B.R. at 175-76. The concurrence of several telltale \"badges of fraud\" will support a finding that the debtor acted with the necessary fraudulent intent. Id. at 176. As with other aspects of the evaluation of *505 evidence, determinations concerning fraudulent intent are questions of fact that \"`depend[] largely upon an assessment of the credibility and demeanor of the debtor. . . .'\" In re Burgess, 955 F.2d at 137 (quoting Williamson v. Fireman's Fund Ins. Co., 828 F.2d 249, 252 (4th Cir.1987)).\nConclusion: Sterman transferred or concealed property interests with the actual intent to hinder, delay or defraud Xerox/VKM within a year prior to the filing of his petition in bankruptcy, and for that reason he ought to be denied the benefit of a discharge.\nFindings: On the basis of the credible evidence, the Court makes the following findings:\na. Foreclosure Sales of the Mayflower Group/AFCP Stock.\nAs noted earlier, Sterman held 300 shares, or 25%, of the stock of Mayflower Group and 1200 shares, or 11.4%, of the stock of AFCP. In 1990, he pledged these shares, along with other property, as security for a debt he owed to his close friend Glovsky. At the time he pledged the stock, he owed Glovsky over $100,000. The value of the property he pledged to secure the debt approached $2 million. In other words, Glovsky was vastly over-secured. This was not a disadvantage to Sterman, however. On the contrary, it would prove to be a useful circumstance to have Glovsky's interest senior to the interests of less friendly creditors.\nIn the Spring of 1995, the financial pressure on Sterman increased. In early March, the Court of Appeals affirmed the plaintiffs' judgment against Sterman. See Xerox Financial Serv. Life Ins. Co. v. High Plains Ltd. Partnership, 44 F.3d 1033 (1st Cir.1995). About a month later, the plaintiffs filed a motion in this action seeking to establish an equitable interest in the Sterman residence and to reach the asset and apply it to reduce the debt. The plaintiffs' argument was, in brief, that Sterman was the true owner of the property, who had supplied all the consideration for its purchase and upkeep, despite the fact that legal title was held solely by his wife. In addition, in April, the Internal Revenue Service recorded a federal tax lien against Sterman and his wife for three tax years in a total amount exceeding $50,000. These events, as well as the continuing restrictions imposed by the Court's injunctions, increased the financial pressure Sterman was feeling.\nBut there was also a ray of hope glistening on the horizon. Around this time, private companies that managed correctional facilities or operated related programs were attracting the interest of potential investors. In light of this development, the Brush facility \u0097 through Rebound or High Plains or both \u0097 began to look like it might produce real value for its investors, including Sterman. For instance, from 1994 to 1995 both revenues and net income rose substantially for Rebound and its related company Rebound Programs. As early as the latter part of 1994, Sterman had begun to pursue the possibility of a public offering of Rebound stock. From late 1994 through 1995 and into the first half of 1996, Sterman was in negotiation with a number of different potential buyers or merger partners. For example, in the Spring of 1995, Sterman was engaged in discussions with Cornell Cox, Inc. about that company's proposal to acquire Rebound Corp. by merger. From Sterman's contemporaneous notes, it appears he was suggesting to Cornell Cox that Rebound had a value upwards of $20 million.\nIn approximately June 1995, Sterman had discussions with Community Psychiatric Centers in approximately June 1995. Contemporaneous notes indicate that he was proposing the value of Rebound was about $27.5 million. In early 1996, J.H. Whitney & Co. sent Sterman, as president of the Mayflower Group, a proposal to purchase 90% of the ownership of the combination of High Plains, Rebound, and Rebound *506 Programs. The proposal valued the acquired businesses at $35.8 million. In March 1996, Sterman, as \"representative\" of Rebound and Rebound Programs, received from Wackenhut Corrections Corporation a proposal to purchase all the outstanding shares of the Rebound entities for $33 million. None of the proposals came to fulfillment, perhaps in large part because the financial condition of the companies did not stand up to rigorous examination, but also because in general the private corrections bubble was beginning to fizzle.[1]\nIn May 1995, just as the pressure on Sterman was increasing from the plaintiffs and the IRS, Sterman's friend, Glovsky, demanded payment on Sterman's indebtedness to him. Sterman offered to find a buyer for some of the collateral Glovsky was holding for the debt, offering to pay Glovsky from the proceeds of the sale. At the time, of course, the Court's injunctions prohibited Sterman from disposing of any of his assets, including that stock. Therefore, the transaction could not proceed as a sale by Sterman; it was necessary to structure it as a foreclosure by Glovsky. The injunctions did not explicitly forbid Glovsky from foreclosing his security interest in the shares.[2] Accordingly, Glovsky retained an attorney to commence the foreclosure process. Through his lawyer he gave notice of his intent to foreclose to a number of Sterman's other creditors, including the IRS and the Boston Private Bank, but not to the plaintiffs, the creditors to whom Sterman owed the most by far. Glovsky knew of Sterman's debt to the plaintiffs.[3]\nSterman took an active role in bringing about the foreclosure sale. Specifically, he arranged with his friend Dibo Attar to have Davstar II purchase the Mayflower Group shares for $50,000 at the private sale. Although the sale was meant to look like an arm's length transaction, it was not. The buyer, Davstar II, conducted no investigation into the value of the shares, and there appears to have been no sound investment reason for Davstar II to purchase such shares. From all the circumstances, the inference is inescapable that Sterman persuaded Attar to purchase the shares as a way of helping him in his financial difficulties. Sterman handled all the arrangements.[4]\nThis was not the first time that Glovsky had moved to foreclose his security interest. *507 A few years earlier, when Sterman was being pressured by the Boston Private Bank, Glovsky attempted a foreclosure, but the bank had an injunction against Sterman's alienation of assets and it was able to obtain an order that the proceeds of any foreclosure sale be held in escrow pending adjudication of the creditors' respective entitlements to the proceeds. After the escrow order, Glovsky abandoned the foreclosure proceedings.\nNor was it the first time that Attar had helped Sterman out by buying an asset from him. In early February 1995, Sterman arranged a sale of 174,439 shares of stock of KTI, Inc. held by his company, M.S. Sterman and Associates, to The Bridge Fund, N.V. for the sum of $150,000, or about 86 cents per share. Dibo Attar controlled The Bridge Fund's decision. At the time, both Sterman and Attar were members of the Board of Directors of KTI, Inc., and both knew that the company's stock would shortly begin public trading. After the sale, on February 9, the stock began trading on the NASDAQ exchange at a price of $1.75 per share. At the time of the sale, Sterman was enjoined by the Court's second injunction from selling or transferring \"any property, right title, interest, or asset of any kind held by or due to\" him, including any interest in (among other entities) M.S. Sterman and Associates, KTI Realty Limited, LP, KTI Holdings, Inc., and KTI Realty Trust.[5] Mem. and Order at 2 (Feb. 24, 1994). The Court has previously found the transaction to be one of the bases for the adjudication of contempt against Sterman. See Mem. and Order at 6, 8-9 (Aug. 9, 1996).\nShortly after the purported foreclosure sale of the Mayflower Group stock, Sterman arranged a similar foreclosure by Glovsky of his interest in Sterman's 1200 shares of AFCP stock. The transaction was substantially similar to the prior one. Glovsky gave notice of the intended private foreclosure sale to other creditors, but not to the plaintiffs. Again, Sterman arranged the sale with Dibo Attar and set the price, this time $250,000.[6] Attar originally planned to have an entity called Wellington Corporation, N.V. purchase the stock, but for technical reasons that could not legally be done. Accordingly, Sterman, Attar and Barry Hoffman agreed that the shares would be purchased in the names of Esther Attar, Dibo's wife, and Daniel Hoffman, Barry's son. Dibo Attar furnished half the total price, and Barry Hoffman furnished the other half. Neither Esther Attar nor Daniel Hoffman participated in any way in the transaction. Neither was, either in law or in fact, a good faith purchaser, but rather only a *508 \"straw\" nominated without her or his knowledge in order to facilitate the transaction.[7] As with the purchase of the Mayflower Group stock, the purchasers conducted no evaluation or investigation of the value of the investment, but simply agreed to go along with the price that Sterman suggested. Except at the most superficial level, the sale had none of the hallmarks of a good faith, arm's length transaction.\nThe proceeds of the sale of the Mayflower Group stock went to Glovsky to reduce Sterman's debt. The proceeds of the sale of the AFCP stock were distributed among Glovsky, the Boston Private Bank, and the IRS, in each case reducing Sterman's indebtedness.\nIt is difficult on the evidence to assess the true value of the shares of Mayflower Group or AFCP at the time of the sales. It is clear, however, that at the time Sterman himself was projecting their value to be considerably in excess of the sales prices. During this period, he was actively pursuing the possibility of selling the Rebound interests, including the Brush facility, which were substantially owned ultimately by Mayflower Group and AFCP. Sterman's contemporaneous notes show computations in which he placed the value to him of a sale of the Rebound interests in the range of several million dollars. Of course, the prospect of selling the Rebound interests was highly contingent, and his projections are not necessarily an indication of the actual value of the Mayflower Group and AFCP stock. Nonetheless, the considerable disparity between Sterman's own projections of the value of his stock and the prices he set for the \"foreclosure\" sales is a further indication that the sales were inauthentic and contrived, rather than genuine.\nThe sale of the AFCP shares occurred at the end of November 1995, within one year prior to the filing of Sterman's bankruptcy petition, and it may thus serve as a basis for a denial of a discharge under section 727(a)(2)(A). The sale of the Mayflower Group stock occurred at the end of August 1995, more than a year prior to the filing of the petition. The sale of the Mayflower Group stock falls outside the relevant statutory period and by itself does not qualify as a basis for denial of a discharge. However, the transaction may still be considered in determining whether denial of a discharge is justified if it was part of a concealment of property that continued into the relevant time period. See Rosen, 996 F.2d at 1531; In re Olivier, 819 F.2d at 554-55. See also, In re Charette, 148 B.R. 94 (Bankr.D.Mass.1992). But see, In re Bottone, 209 B.R. 257 (Bankr.D.Mass.1997). As the next section explains, Sterman continued to conceal an actual interest in Mayflower Group during the year prior to the filing of the petition.\nb. Sterman's Continuing Interest in Mayflower Group and AFCP Despite the Sales.\nDespite the purported transfers of his entire interests in Mayflower Group and AFCP, Sterman has continued to act as if he still owns those shares. The evidence disclosed several instances of his causing compensation for his business consulting, including directors' fees, to be paid to Mayflower Group, rather to himself personally. It must be remembered that he is bound under the Court's injunctions to deposit his income into an escrow account for the benefit of the plaintiffs. He thus has an incentive not to receive the consulting or directors' fees personally. Instead, he has them paid to the Mayflower Group and other of his entities. For instance, in 1996 for consulting services that Sterman personally provided, PracSys Corporation paid Mayflower Group a cash fee and, *509 later, granted Mayflower Group 37,500 shares of PracSys common stock. It was not unusual for Sterman to receive common stock in his client companies as compensation for his consulting work. Also in 1996, Amnet Technologies, Inc., granted stock options to its five outside directors, one of whom was Sterman. He directed that the options be granted to Mayflower Group. Around the same time, Sterman caused Mayflower Group to enter into a consulting agreement with Omega Orthodontics, Inc., pursuant to which Mayflower Group would be paid 225,000 shares of Omega common stock.[8] Sterman was a director of a company called Epigen, Inc. Prior to 1994, Epigen paid directors' fees directly to Sterman personally. In June 1996, Epigen distributed as a \"bonus\" 200,000 shares of its stock to \"the Mayflower Group, a corporation controlled by Marshall Sterman.\" Ex. 4 at 5.\nAlthough there were other shareholders of Mayflower Group, only Sterman performed any personal services for the company. He took no regular salary. Even before the injunctions in this case were entered, Sterman apparently took his compensation in ways other than through a regular salary, mostly by means of distributions of various sorts from one or another of his companies. Thus, if he were to be believed, despite the sale of his entire ownership interest in Mayflower Group, he has worked solely to enhance the value of the company for its other shareholders and has himself taken no compensation \u0097 not in salary, not in stock \u0097 for his consulting work. That is simply not believable. On the other hand, if Sterman has retained his interest in Mayflower Group by agreement (tacit or otherwise) with Dibo Attar, then it is understandable that he would work to increase the assets and value of Mayflower Group while avoiding any receipt of compensation personally, because that income would be clearly subject to the Court's orders and would have to be escrowed.\nSterman's conduct after the \"foreclosure\" of the AFCP stock was also consistent with his having retained an ownership interest in that stock. On April 5, 1996, Sterman's assistant sent to the IRS a check in the sum of $26,220 to be credited against the amount owed by Sterman and his wife. The check, dated April 4, 1996, was drawn on the account of AFCP and signed by Sterman. Sterman thus caused AFCP to make a payment on account of his personal tax obligations even though at the time the payment was made he was supposedly no longer a shareholder of AFCP and not entitled to any distributions from it. His explanation was that the $26,220 represented a delayed payment of a dividend that had been declared on November 15, 1995, conveniently just before the \"foreclosure\" sale. He pointed to an entry in the notebook diary that he personally kept about a meeting of the AFCP board of directors on November 15, 1995, at which the dividend had been declared. His explanation is not believable. The note about what the directors supposedly did in November 1995 is located in Sterman's notebook pages for April 1996, when the payment was made, rather than, as might reasonably be expected, in the pages for November 1995, when the meeting was supposed to have occurred. The note is transparently an attempt to backdate the payment to make it appear that it was authorized while Sterman was still a shareholder of record.[9] The conclusion is inescapable *510 that the note of the directors' meeting is a fake, and it shows that Sterman was consciously trying to conceal his continuing interest in AFCP.\nSterman's notebook contains another entry made in late April 1996 in which he estimates what each of the shareholders of AFCP would receive in the event that the Wackenhut offer to purchase the Rebound interests were to be completed. Though he was not then a shareholder of record, his note shows that he estimated that he would receive $2.55 million from an acquisition of the Rebound interests by Wackenhut. The note consists of a list of initials, each pair consistent with the name of a shareholder, with the adjacent dollar amount apparently consistent with each particular shareholder's respective percentage of ownership. One of the pairs of initials is \"M.S.\" \u0097 clearly, Marshall Sterman. There is no reference to either Esther Attar or Daniel Hoffman, who were supposed to be shareholders at the time.\nIt is clear that after the purported sales of the Mayflower Group and AFCP stock, Sterman acted as if he continued to own the shares. There was no direct evidence of an express agreement by the supposed transferees that they would hold the stock for Sterman's benefit; the participants have hewed to a consistent, if fabulous, tale. But the inference from all the circumstantial evidence is overpowering that the purported foreclosures were not genuine transactions, but frauds.\nThe \"badges of fraud\" are present. The \"foreclosure\" sales were conveniently timed by and orchestrated by Sterman with the cooperation of close friend, Glovsky, and were consummated with other close friends and associates. The prices paid were inadequate when judged in comparison with the values that Sterman was himself assigning to those interests in other contexts in the same time period. After the transfers, Sterman continued to act as if he owned the shares that had supposedly been foreclosed and sold. The Court finds that Sterman was, as the plaintiffs have alleged, merely \"parking\" his stock in friendly hands until it would be safe to retrieve it \u0097 such as after a discharge in bankruptcy.\nc. Other Deceptive Transactions.\nSterman was engaged to perform consulting services in 1996 for the Ray Dirks Research Group (\"Ray Dirks\") for a total fee of $175,000. In July 1996, Sterman directed that the fee be paid in two installments, consisting of a wire transfer of $100,000 to the Mayflower Group and a check for $75,000 to the Sterman Company. Sterman caused the check to be endorsed over to the City of Beverly, Massachusetts, to pay real estate taxes due on the Sterman residence. The plaintiffs have pointed out that by endorsing the check over, rather than depositing it and then writing a second check to the City against it, Sterman was able to keep the transaction from appearing in the Sterman Company's books. Sterman thus concealed this transaction and property interest as well, which occurred within the year prior to the filing of his petition.\nThe way he handled the Ray Dirks payments illustrates how Sterman typically structured transactions freely through one entity or another as it suited his purpose at any given time. There are other examples. In April 1995, in need of money to pay taxes but subject to the Court's injunctions, Sterman caused Allied Programs Corp. to transfer $5,000 to State Street Group, Inc. He then caused State Street Group to purchase a treasurer's check from a bank, which he sent to the IRS. It should be noted that State Street Group was not named in the Court's injunctions because the plaintiffs had not yet learned of its existence as a Sterman entity.[10]\n*511 Sterman used State Street Group for other transactions. In December 1994, Sterman caused State Street Group to loan money to the Sterman Company. In March 1995, Sterman had State Street Group issue a check for $3,800 to the Kernwood Country Club to be applied to Sterman's personal account. Despite these transactions, Sterman did not disclose any affiliation with State Street Group in his original Statement of Financial Affairs filed in his bankruptcy case. He amended the Statement to include State Street Group only after it became clear to him that the plaintiffs had discovered the connection.\nSterman also used an entity known as Mayflower Partners to hide transactions. For example, in a note in his notebook for July 1994, he wrote, \"Have payments from MFG [Mayflower Group] put in MF Ptrs [Mayflower Partners] when they come in and work out of that acct!!\" Ex. 216. Just a few days after he made this note, KTI, Inc. wired $1,667 to the Mayflower Partners bank account. The money represented a director's fee for Sterman. Prior to this, KTI directors' fees had been paid either to the Mayflower Group or to the Sterman Company, but never to Mayflower Partners. Two days after the fee was received by Mayflower Partners, Sterman drew a check on the Mayflower Partners account in the amount of $2,000, payable to the Sterman Company. On another occasion, Sterman received a fee for testifying as an expert witness in a Massachusetts state court action. The lawyer who had hired him sent him a check made payable to \"Marshall Sterman.\" Sterman returned the check and asked that a new one be issued to Mayflower Partners, which the lawyer did. Sterman then deposited the second check into the Mayflower Partners account, evading the requirement that such income be put in the escrow account. Sterman also caused Mayflower Partners, like State Street Group, to make a payment on his behalf to the Kernwood Country Club. And as with State Street Group, Sterman did not disclose his affiliation with Mayflower Partners on his original Statement of Financial Affairs, but disclosed it in the Amended Statement only after it had otherwise been discovered.\nAs these transactions illustrate, from the time the Court's injunctions were entered through the filing of his bankruptcy petition, Sterman has persistently used a variety of techniques and manipulations to conceal the identity and extent of his property interests.\n3. 11 U.S.C. \u00a7 727(a)(4)(A)\nSection 727(a)(4)(A) authorizes denying a discharge to a debtor who knowingly and fraudulently makes a false oath of a fact material to the bankruptcy case. In re Tully, 818 F.2d at 110. A fact is material if it is \"pertinent to the discovery of assets, including the history of a bankrupt's financial transactions.\" In re Mascolo, 505 F.2d 274, 277 (1st Cir.1974); see also In re Sapru, 127 B.R. 306, 316 (Bankr.E.D.N.Y.1991). Section \u00a7 727(a)(4)(A) seeks to assure that \"complete, truthful, and reliable information is put forward at the outset of the proceedings, so that decisions can be made by the parties in interest based on fact rather than fiction.\" In re Tully, 818 F.2d at 110.\nConclusion: Sterman knowingly and fraudulently made material false statements under oath in connection with his bankruptcy case, and for that reason he ought to be denied the benefit of a discharge.\nFindings: In addition to the factual findings set forth elsewhere in this memorandum, the Court makes the following findings of fact:\nSterman submitted a Statement of Financial Affairs (\"Statement\") to the Bankruptcy Court in December 1996, which he signed under the pains and penalties of perjury. He intentionally omitted from the Statement material facts regarding his *512 financial status and interests. Sterman neglected to list his affiliation with Mayflower Partners and the State Street Group in his original Statement. He claims that he simply forgot to add those entities, but the claim is incredible. As noted above, Sterman used both Mayflower Partners and the State Street Group actively in 1994 and 1995 to channel payments that he did not want detected in order to avoid the terms of the Court's injunctions. He decided to \"work out of\" the Mayflower Partners account because Mayflower Partners was not specifically named in the injunctions. He directed that fees he had earned personally be paid to Mayflower Partners. He used State Street Group to pay the IRS. Both entities made payments to Sterman's personal country club account. It is impossible to believe that Sterman simply forgot about the existence of these entities when he submitted his original Statement.\nSterman likewise intentionally omitted to list his continuing interests in the Mayflower Group and AFCP. He failed to declare the existence of the $26,220 Allied Partners dividend or the $75,000 Ray Dirks payment, both received in 1996. He did not disclose his interests in the stock issued to him by the various companies, such as Amnet, Omega Orthodontics, and Epigen, for his services as a director. All these omissions were material to the complete statement of Sterman's assets and business dealings. The omissions were clearly intentional, part of Sterman's calculated effort to play fast and loose not only with his assets and business dealings, but also with both the bankruptcy court and his legitimate creditors. They are adequate reason for denying Sterman a discharge pursuant to section 727(a)(4)(A).\n4. 11 U.S.C. \u00a7 727(a)(3)\nThe plaintiffs also assert that Sterman's failure to maintain proper financial records for the Sterman Company and Mayflower Group in the years prior to bankruptcy have prevented them from ascertaining Sterman's true financial condition and business transactions, and as such should be grounds for a denial of discharge under 11 U.S.C. \u00a7 727(a)(3). The plaintiffs have provided insufficient evidence concerning Sterman's record keeping to carry their burden on this issue. Accordingly, \u00a7 727(a)(3) does not serve as a basis for denying a discharge.\nB. The Complaint to Reach and Apply Sterman's Interest in Stock\nIn the collection action that has been pending in this Court since 1992, the plaintiffs brought a petition to reach and apply Sterman's interest in the Mayflower Group and AFCP stock that was transferred as a result of the Glovsky \"foreclosure\" sales. In substance, the motion seeks an order directing Davstar II, Esther Attar, and Daniel Hoffman to surrender for the benefit of the plaintiffs the shares of stock they respectively hold. For the reasons that follow, however, the Court concludes that the plaintiffs may not reach and apply those assets.\nConclusion: Although the \"foreclosure\" sales were conducted as sham transactions with an actual intent to defraud the plaintiffs, the plaintiffs did not have an equitable lien against the shares of stock by reason of this Court's injunctions, and the plaintiffs have not proved that either transaction was a \"fraudulent conveyance\" under Massachusetts law.\nFindings and Discussion: The facts concerning the \"foreclosure\" sales of the stock are set forth above. As noted, the Court concludes that the sales of the stock were not conducted in good faith and that the purchasers in those sales were not good faith purchasers. Sterman orchestrated the transactions, both setting the prices at which the stock would be sold and finding the buyers. Each \"foreclosure\" sale was no different in substance, and not very much different in mechanics, from a voluntary sale by Sterman with the approval of a secured creditor who surrenders the security interest *513 in exchange for payment from the proceeds, just as a person who sells his mortgaged house uses the some of the proceeds to pay the bank and clear the lien. Indeed, Glovsky's testimony indicates that that is what he understood Sterman was doing. The \"foreclosure\" veneer was a contrivance to accomplish what Sterman was prohibited from doing by the Court's injunctions \u0097 alienating assets that might be used to satisfy the plaintiffs' judgment.\nSterman acted with an actual intent to defraud the plaintiffs. Dibo Attar (and his straw Davstar II) and Barry Hoffman participated with Sterman in the transactions as a favor to him, and not in their own interests. They did so knowingly (at the very least they were \"willfully blind\") and with the purpose of cooperating with him to accomplish his fraud. Esther Attar and Daniel Hoffman, the nominal holders of the stock, were unaware of the transactions at the time they occurred, but since then they also have cooperated in attempting to maintain the legitimacy of the transactions, knowing that they were not legitimate.\n1. Equitable Lien\nUnder Massachusetts law, an injunction prohibiting a debtor from transferring or alienating property entered in an action by a creditor to reach and apply such property operates as an equitable lien against the property. McCarthy v. Rogers, 295 Mass. 245, 3 N.E.2d 787, 788 (1936). See also, In re Ballarino, 180 B.R. 343, 348 (D.Mass.1995); In re Borofsky, 138 B.R. 345, 347 (Bankr.D.Mass.1992). The plaintiffs contend that the Court's injunctions prohibiting Sterman from disposing of his Mayflower Group and AFCP stock gave them an equitable lien against those shares of stock.\nThe difficulty with their argument is that the injunctions were not entered in an action to reach and apply, and that qualification appears critical. See In re Osgood, 203 B.R. 865, 869 (Bankr.D.Mass.1997) (\"Only upon both the filing of an action to reach and apply and the issuance of an injunction restraining the transfer of the property sought to be reached and applied does the plaintiff acquire an equitable lien or equitable attachment upon the property.\"). See also Borofsky, 138 B.R. at 347-48. The original complaint in this action was one by Xerox to compel arbitration under the Federal Arbitration Act.[11] It sought neither to reach and apply property nor to enjoin the transfer of property. See Compl. at 5. The injunctions were sought after a money judgment had been entered against Sterman and he had given the first signs of trying to avoid satisfying the judgment. The petition to reach and apply now under consideration was filed early in 1998, well after the sale of the Mayflower Group and AFCP stock.[12]\nAccordingly, under Massachusetts law, the injunctions by themselves did not create an equitable lien in favor of the plaintiffs in Sterman's Mayflower Group or AFCP stock. The plaintiffs therefore did not have a security interest in the stock at the time of the \"foreclosure\" sales, and they were not entitled under Massachusetts law to advance notice of the sales. See Mass.Gen.Laws ch. 106, \u00a7 9-504(3). The absence of notice to them thus did not by itself have any legal (or equitable) significance, although it helps illuminate the context in which the sales occurred.\n2. Fraudulent Conveyance\nTo prove that a debtor has made a fraudulent conveyance, under Massachusetts *514 law it is not enough to prove only that the debtor transferred property with an actual intent to defraud creditors. There must also be proof that as a result of the conveyance, there was a diminution of the assets of the debtor available to creditors. Richman v. Leiser, 18 Mass. App.Ct. 308, 465 N.E.2d 796, 798 (1984). See also Comjean v. Cruickshank, 191 B.R. 504, 509 (Bankr.D.Mass.1995).\nThus, the burden lay with the plaintiffs to show not only that Sterman intended to defraud them by alienating property that might have been applied to reduce his debt to them \u0097 a proposition which they have proved \u0097 but also that if the conveyances had not occurred and Sterman continued to hold the stock, there was sufficient value in it that the plaintiffs would have received something in the event that the shares were sold for the benefit of creditors. The problem is, of course, that the plaintiffs were not Sterman's only creditors, and his debt to the plaintiffs was unsecured. The evidence indicated that there may have been others who held security interests in the shares of stock junior to Glovsky's interest, but senior to the plaintiffs' rights as unsecured creditors. Unfortunately, it is not possible on the evidence to say precisely who had what rights and to what extent. However, at least some evidence indicated that secured interests or liens may have been held by the Boston Private Bank, the IRS, the law firm of Goldstein & Manello, and perhaps the Middlesex Savings Bank. One or more of these creditors may have held a secured position superior to the plaintiffs' claims. On the inconclusive state of the evidence, there is a sufficient possibility that there were such interests that would have absorbed any residual equity in the stock remaining after Glovsky's interest had been satisfied. It cannot be presumed, and the plaintiffs have not proven, that, after Glovsky's interest, there would have been value available to the plaintiffs. That was a proposition necessary to their fraudulent conveyance claim, and it was up to them to offer enough evidence that the unanswered questions could be answered. They did not carry that burden.\nThus, while the plaintiffs proved that Sterman and his collaborators had the actual intent to defraud creditors, they have nonetheless failed to prove a fraudulent conveyance of the stock under applicable Massachusetts law. Without a fraudulent conveyance, the Court cannot void or otherwise undo the sales \u0097 that is, the Court cannot order that the stock be reached and applied to reduce Sterman's indebtedness to them.\nIII. Conclusion and Order for Judgment\nFor the foregoing reasons, judgment shall enter in favor of the plaintiffs on their complaint to deny Sterman a discharge in bankruptcy pursuant to 11 U.S.C. \u00a7\u00a7 727(a)(2)(A) and 727(a)(4)(A).\nOn the plaintiffs' petition to reach and apply, judgment shall enter in favor of the reach and apply defendants Dibo Attar, Esther Attar, J. Daniel Hoffman, and Davstar II Managed Investments Corporation N.V.\n\n\n*515 APPENDIX A\n\nNOTES\n[1] Because of the shakiness of the valuations, the proposals are not entirely reliable indicators of the true value of the Rebound enterprise or, by extension, Sterman's investment in it. Nevertheless, the evidence is reliable to show the values that Sterman himself was proposing to potential purchasers of the companies, and in this respect illuminates the question, addressed below, whether he properly valued his shares of Mayflower Group and AFCP.\n[2] The second injunction did prohibit \"those persons or entities acting in participation or concert with [Sterman], who receive actual notice of this Order by personal service or otherwise\" from assisting Sterman's transfer of assets. See Xerox Financial v. Sterman, No. 92-11029-Z at 2 (D.Mass. filed Feb. 25, 1994) (Memorandum and Order).\n[3] As a foreclosing secured creditor, Glovsky was legally required to give notice to other secured creditors, not to unsecured creditors. The absence of notice to the plaintiffs is noted not because it represents any legal defect, but because it is one of the many factual circumstances that lead to an understanding of Sterman's plans and motivations in the transactions, as well as the assistance given him by his friends.\n[4] In his deposition, offered in evidence at trial, Glovsky testified that he was not aware of anyone, including his lawyer, conducting negotiations with the buyer about the stock. Glovsky Dep. at 16 (Aug. 1, 1996). He further testified as follows:\n\nQ. Okay. So it was Mr. Sterman's idea to sell these shares?\nA. That's correct. To sell shares, whatever. I didn't \u0097 I told him I wanted the money.\nQ. And Mr. Sterman said, well, I'll sell \u0097\nA. No, he didn't say that. He said I'll try and find a buyer for some of the collateral you're holding and get you the money.\nId. at 27.\n[5] It is not clear whether \"KTI, Inc.\" was distinct from these other \"KTI\" interests. It would be consistent with Sterman's manipulations for him to have rationalized the sale on the ground that \"KTI, Inc.\" was not expressly named, so he was free, under the injunction, to sell his shares of its stock. It is clear, however, that the scope of the injunction was not limited to the entities specifically enumerated and that it reached \"any property, right, title, interest, or asset of any kind\" held by Sterman. Stock owned by his alter ego corporations, such as M.S. Sterman and Associates, was an interest owned by him for purposes of the injunction.\n[6] Glovsky testified:\n\nQ. . . . You did understand that when you asked Mr. Sterman for additional money that he was going to try to find a buyer for the Allied First Class Partners stock?\nA. No, I did not understand that. I had some other things that were pledged to me or whatever, and I didn't understand anything except that he was going to get me the money, try to get me the money.\nQ. At some point you became aware that that stock was going to be sold; correct?\nA. Yeah. Sure.\n* * *\nQ. How was the money paid?\nA. It was paid as the result of the sale of Allied First Class Partners stock as you well know.\nQ. That was a sale where Mr. Sterman found the buyer?\nA. That's correct.\nQ. And after Mr. Sterman found a buyer, you wanted a private sale done?\nA. I didn't care what was done. . . . All I cared was that I got my money.\n[7] Daniel Hoffman testified that he knew of the transaction in advance, but I do not believe his testimony in this respect. It may be noted that this was not the only occasion in which Daniel has been used by his father and Sterman to facilitate transactions. Daniel was named as the \"president\" of one of Sterman's shells, State Street Group, Inc., but he did not know of that fact until the time of his deposition by the plaintiffs in this case.\n[8] By the same instrument, Omega also retained Glovsky as a consultant for the same compensation.\n[9] The note indicated that the board of AFCP declared a distribution of $230,000. Sterman's ownership interest in AFCP, 11.4%, entitled him to $26,220. The other shareholders of AFCP as of November 1995 also received distributions in April in amounts appropriate to their respective percentage of ownership. Sterman explained that the distributions were not made in November when authorized because the purpose was to give the investors cash to help with their April tax payments, and if they were given the money too early they would imprudently dissipate it and not have it available when they needed it in April. The explanation is ludicrous.\n[10] In a deposition given in April 1995, Sterman deliberately misled the plaintiffs about his connection with State Street Group, pretending that Daniel Hoffman was the only person involved in State Street. As noted earlier, Hoffman did not even know he was supposed to be connected with State Street until he was questioned at his own deposition.\n[11] Shortly thereafter, VKM registered a consent judgment in its favor that had been entered in another district. See 28 U.S.C. \u00a7 1963. The two actions were consolidated in November 1993 and have proceeded under the earlier docket number.\n[12] It is not necessary to resolve the interesting question whether the conjunction of the later-filed petition to reach and apply with the previously existing injunctions caused an equitable lien to arise at that point in time. At the time of the 1995 \"foreclosure\" sales of the stock, that conjunction had not yet occurred.\n"} -{"text": "370 F.3d 668\nCydney A. CRUE, John M. McKinn, Debbie A. Reese, Brenda M. Farnell, Frederick E. Hoxie, Stephen Kaufman, and Philip W. Phillips, Plaintiffs-Appellees,v.Michael AIKEN, Defendant-Appellant.\nNo. 02-3627.\nNo. 03-2281.\nNo. 03-2951.\nUnited States Court of Appeals, Seventh Circuit.\nArgued February 9, 2004.\nDecided June 1, 2004.\n\nCOPYRIGHT MATERIAL OMITTED Harvey M. Grossman (argued), Roger Baldwin Foundation of ACLU, Inc., Chicago, IL, for Plaintiff-Appellee.\nTimothy S. Bishop (argued), Nicola Jackson, Mayer, Brown, Rowe & Man, Chicago, IL, Michael R. Cornyn, Thomas, Mamer & Haughey, Champaign, IL, for Defendant-Appellant.\nAnn D. Springer, American Association of University Professors, Washington, D.C., for Amicus Curiae, American Association of University Professors.\nMatthew W. Finkin, University of Illinois College of Law, Champaign, IL, for Amicus Curiae, University of Illinios.\nBefore BAUER, MANION, and EVANS, Circuit Judges.\nTERENCE T. EVANS, Circuit Judge.\n\n\n1\nThis case, raising First Amendment issues involving the University of Illinois, concerns \"Chief Illiniwek,\" who, depending on one's point of view, is either a mascot or a symbol of the university. More on this distinction later but first, before getting to the issue at hand, we detour for a brief look at college nicknames and their embodiment as mascots.\n\n\n2\nIn the Seventh Circuit, some large schools \u2014 Wisconsin (Badgers), Purdue (Boilermakers), Indiana (Hoosiers), Notre Dame (The Fighting Irish), DePaul (the Blue Demons), the University of Evansville (Purple Aces), and Southern Illinois (Salukis) \u2014 have nicknames that would make any list of ones that are pretty cool. And small schools in this circuit are no slouches in the cool nickname department. One would have a hard time beating the Hustlin' Quakers of Earlham College (Richmond, Indiana), the Little Giants of Wabash College (Crawfordsville, Indiana), the Mastodons of Indiana University-Purdue University-Fort Wayne (Fort Wayne, Indiana), and the Scarlet Hawks of the Illinois Institute of Technology.\n\n\n3\nBut most schools have mundane nicknames. How can one feel unique when your school's nickname is Tigers (43 different colleges or universities),1 Bulldogs (40 schools), Wildcats (33), Lions (32), Pioneers (31), Panthers or Cougars (30 each), Crusaders (28), or Knights (25)? Or how about Eagles (56 schools)? The mascots for these schools, who we assume do their best to fire up the home crowd, are pretty generic \u2014 and pretty boring.\n\n\n4\nSome schools adorn their nicknames with adjectives \u2014 like \"Golden,\" for instance. Thus, we see Golden Bears, Golden Bobcats, Golden Buffaloes, Golden Bulls, Golden Eagles (15 of them alone!), Golden Flashes, Golden Flyers, Golden Gophers, Golden Griffins, Golden Grizzlies, Golden Gusties, Golden Hurricanes, Golden Knights, Golden Lions, Golden Panthers, Golden Rams, Golden Seals, Golden Suns, Golden Tigers, and Golden Tornados cheering on their teams.\n\n\n5\nAll this makes it quite obvious that, when considering college nicknames, one must kiss a lot of frogs to get a prince. But there are a few princes. For major universities, one would be hard pressed to beat gems like The Crimson Tide (Alabama), Razorbacks (Arkansas), Billikens2 (St.Louis), Horned Frogs (TCU), and Tarheels (North Carolina). But as we see it, some small schools take the cake when it comes to nickname ingenuity. Can anyone top the Anteaters of the University of California-Irvine; the Hardrockers of the South Dakota School of Mines and Technology in Rapid City; the Humpback Whales of the University of Alaska-Southeast; the Judges (we are particularly partial to this one) of Brandeis University; the Poets of Whittier College; the Stormy Petrels of Oglethorpe University in Atlanta; the Zips of the University of Akron; or the Vixens (will this nickname be changed if the school goes coed?) of Sweet Briar College in Virginia? As wonderful as all these are, however, we give the best college nickname nod to the University of California-Santa Cruz. Imagine the fear in the hearts of opponents who travel there to face the imaginatively named \"Banana Slugs\"?3\n\n\n6\nFrom this brief overview of school nicknames, we can see that they cover a lot of territory, from the very clever to the rather unimaginative. But one thing is fairly clear \u2014 although most are not at all controversial, some are. Even the Banana Slug was born out of controversy. For many years, a banana slug (ariolomax dolichophalus to the work of science) was only the unofficial mascot at UC-Santa Cruz.4 In 1981, the chancellor named the \"Sea Lion\" as the school's official mascot. But some students would have none of that. Arguing that the slug represented some of the strongest elements of the campus, like flexibility and nonaggressiveness, the students pushed for and funded a referendum which resulted in a landslide win for the Banana Slug over the Sea Lion. And so it became the official mascot.\n\n\n7\nNot all mascot controversies are \"fought\" out as simply as was the dispute over the Banana Slug. Which brings us to the University of Illinois where its nickname is the \"Fighting Illini,\" a reference to a loose confederation of Algonquin Indian Tribes that inhabited the upper Mississippi Valley area when French explorers first journeyed there from Canada in the early seventeenth century. The university's mascot, to mirror its nickname \u2014 or to some its symbol \u2014 is \"Chief Illiniwek.\" Chief Illiniwek is controversial. And the controversy remains unresolved today.\n\n\n8\nChief Illiniwek does not participate in traditional cheerleading activities, but he does \"perform\" at athletic events. Whether his presence, and what he does, makes him more mascot than symbol, or vice versa, is really for others to decide. Suffice to say that opponents consider him to be a mascot, while supporters often refer to him as a symbol. The \"debate,\" however, over the use of Native-American names whether as logos, mascots, or symbols is not unique to the University of Illinois.\n\n\n9\nForty years ago, Marquette University used a mascot named \"Willie Wampum\" \u2014 a crude Indian caricature with a huge papier-m\u00e2ch\u00e9 head (about 4 feet high!) \u2014 to whip up the crowd at its basketball games in support of its nickname \u2014 Warriors. Marquette is now the Golden Eagles. Similarly, the Stanford Indians became the \"Cardinal,\" St. John's transformed from \"Red Men\" to \"Red Storm,\" Miami of Ohio moved from \"Redskins\" to \"Redhawks,\" and Eastern Michigan went from \"Hurons\" to \"Eagles.\" Some schools, most notably Florida State (\"Seminoles\") and the University of North Dakota5 (the Fighting Sioux), have resisted change. And so has the University of Illinois.\n\n\n10\nChief Illiniwek traces his existence to 1926 when, according to the University of Illinois web site, as assistant band director \"conceived the idea of having a Native American war dance performed at half-time at the Illinois-Pennsylvania game.\" A student, wearing \"a homemade costume complete with a war bonnet made of turkey feathers,\" performed a dance at half-time, which \"was a big hit.\" According to NCAA News (April 23, 2001), the student mascot also smoked a \"peace pipe\" at halftime with Pennsylvania's mascot, \"William Penn.\"\n\n\n11\nFrom the home page of the UIUC web site, we are informed as to how the chief was named:\n\n\n12\nThe expression \"Illiniwek\" was first used in conjunction with the University of Illinois by football coach Bob Zuppke in the mid 1920's. Zup was a philosopher and historian by training and inclination, and he was intrigued by the concept the Illini peoples held about their identity and aspirations. They spoke a dialect of the Algonquin language and used the term \"Illiniwek\" to refer to the complete human being \u2014 the strong, agile human body; the unfettered human intellect; the indomitable human spirit.\n\n\n13\nChief Illiniwek's \"costume\" underwent several revisions before settling on its present incarnation in 1982. Similarly, the chief's dance, involving intricate footwork and fast, spinning movements with split jumps and high kicks, has changed over the years. While these changes were taking place, some opposition to the presence of the chief began to percolate around Urbana-Champaign, beginning around 1975.\n\n\n14\nThe earliest signs of protest we could find appear in the university's 1975 yearbook, where this appears:\n\nA CHALLENGE TO THE CHIEF\n\n15\nChief Illiniwek has been hailed as a symbol of University spirit since 1926. But while thousands have cheered his acrobatic gyrations during halftime, others look upon him with disgust.\n\n\n16\n\"Chief Illiniwek is a mockery not only of Indian customs but also of white people's culture,\" said Bonnie Fultz, Citizens for the American Indian Movement (AIM) executive board member. According to Fultz, the continued use of Indian history as entertainment degrades the Indian and disgraces the white race by revealing an ignorance of tribal cultures.\n\n\n17\n\"The Illiniwek exhibition is tantamount to someone putting on a parody of a Catholic Mass,\" Norma Linton, Citizens for AIM member and visiting anthropology lecturer at the University said. She continued by saying that Chief Illiniwek is an inaccurate composite.\n\n\n18\n\"The Indians within the Illinois area are of a different tribal culture. The idea of symbols from several different tribes mashed together angers Indians,\" she added. \"They do not want their individual tribal customs combined and distorted, but want their traditions to remain separate and unique.\"\n\n\n19\nMike Gonzalez, the current Chief, said that the only requirement in being considered for the position is an eagle spread jump. However, Gonzalez felt that Illiniwek is \"majestic\" and a symbol of fighting spirit. \"In no way does it degrade the American Indian,\" Gonzalez said. \"I think Illiniwek honors the Indian.\"\n\n\n20\nJohn Bitzer, Illiniwek from 1970-73, also defended the role. \"Other university mascots are just caricatures but Illiniwek portrays the Indians as they would want to be portrayed.\"\n\n\n21\nRep. A. Webber Borchers, R-Decatur, the originator of the costume while a student at the University, also spoke in defense of Chief Illiniwek. \"It's the most outstanding tradition of any university in the land, with no intention of disrespect to the Indians,\" he said.\n\n\n22\nUniversity officials have sensed the Chief Illiniwek controversy. The symbol of Chief Illiniwek was removed from University stationary this year to appease AIM. Everett Kissinger, coordinator of Chief Illiniwek and marching band director, was indignant about the controversy. \"Illiniwek has been a tradition here since 1926, and I don't want you people (reporters) opening up a lot of problems about it,\" he said. Kissinger in turn has ordered Gonzalez to avoid radio interviews and large-scale publicity about his role as Chief.\n\n\n23\nThe first sounds of protest over Chief Illiniwek in 1975 have grown to a crescendo. Many people today find him to be offensive, including the Peoria Tribe of Indians of Oklahoma, known collectively as the Illiniwek or Illinois Nations, who just a few years ago formally voted to ask the university to stop using him as a mascot. And that takes us to today's suit where a loose group of faculty members and a graduate teaching assistant6 at the university escalated the debate a little further. The group, whom we will simply call \"plaintiffs,\" claim that the chief creates a hostile environment for Native American students and that he promotes dissemination of inaccurate information in an educational setting. They have expressed their opposition to Chief Illiniwek through public speeches, letter writing, meetings with student groups, and by submitting newspaper articles for publication. They have also attended meetings protesting what they term is his use as a mascot. The university has not interfered with any of these activities.\n\n\n24\nIt was not until the plaintiffs expressed interest in contacting prospective student-athletes about the controversy surrounding Chief Illiniwek that the university began to frown on their activities. The university was alerted to their activities by a press account on February 28, 2001, wherein some plaintiffs made known their intention to contact prospective student-athletes and inform them of the Chief Illiniwek controversy and the implications of competing athletically on behalf of a university which they said employs racial stereotypes. That got the university's attention.\n\n\n25\nVincent Ille, the assistant director of athletics, asked the membership services coordinator of the National Collegiate Athletics Association (NCAA) whether NCAA rules applied to contacts by faculty members with prospective student-athletes.\n\n\n26\nTwo days later, on March 2, 2001, the chancellor of the university, defendant Michael Aiken, sent the e-mail which precipitated this lawsuit. It said:\n\n\n27\nQuestions and concerns have been raised recently about potential contacts by employees, students or others associated with the University with student athletes who are being recruited by the University of Illinois. As a member of the National Collegiate Athletics Association (NCAA) and the Big Ten Athletic Conference, there are a number of rules with which all persons associated with the University must comply. For example, the NCAA regulates the timing, nature and frequency of contacts between any University employee and prospective athletes. It is the responsibility of the coaches and administration in the Division of Intercollegiate Athletics to recruit the best student athletes to participate in varsity sports at the University of Illinois. No contacts are permitted with prospective student athletes, including high school and junior college students, by University students, employees or others associated with the University without express authorization of the Director of Athletics or his designee.\n\n\n28\nThe University faces potentially serious sanctions for violation of NCAA or Big Ten rules. All members of the University community are expected to abide by these rules, and certainly any intentional violations will not be condoned. It is the responsibility of each member of the University to ensure that all students, employees and others associated with the University conduct themselves in a sportsmanlike manner. Questions about the rules should be addressed to Mr. Vince Ille, Assistant Director for Compliance, Bielfeldt Athletic Administration Building, 1700 S. Fourth Street, Champaign, IL 61820, (217) 333-5731, E-mail: ille@uiuc.edu.\n\n\n29\nImmediately, the university administration received questions about the reach of what was accurately termed a \"preclearance directive.\" Chancellor Aiken directed Associate Chancellor Larry Mann to oversee Mr. Ille as he responded to inquiries.\n\n\n30\nThe same day Aiken's e-mail went out, plaintiff Frederick Hoxie e-mailed Aiken, stating his desire to advise prospective student-athletes of the university's unresponsiveness to the concerns of Native Americans. Hoxie said he thought the preclearance directive barred him from writing to prospective students, and he asked for guidance.\n\n\n31\nAlmost a week after Hoxie's request, on March 8, Ille asked the NCAA, in writing, for guidance as to whether its rules applied in six specific situations:\n\n\n32\n1. telephone calls where the recipient is \"selected based on his or her participation in athletics\"\n\n\n33\n2. telephone calls \"for the purpose of discussing issues related to athletics or the prospective student-athlete's possible participation in intercollegiate athletics\"\n\n\n34\n3. correspondence where the recipient is \"selected based upon his or her participation in athletics\"\n\n\n35\n4. correspondence \"for the purpose of addressing issues related to athletics or the prospective student-athlete's possible participation in intercollegiate athletics\"\n\n\n36\n5. in-person off-campus contact where the recipient is \"selected based upon his or her participation in athletics\"\n\n\n37\n6. in-person off-campus contact \"for the purpose of addressing issues related to athletics or the prospective student-athlete's possible participation in intercollegiate athletics\"\n\nThe NCAA replied the same day:\n\n38\nNCAA recruiting regulations are designed in part to protect prospective student-athletes from undue pressures that may interfere with their scholastic or athletics interest as well as to promote equity among member institutions in their recruiting of prospects. In this regard, if an institution either identifies and contacts a group of prospective students based on their athletics ability or contacts prospective students to discuss their athletics participation those contacts are subject to NCAA regulations. Therefore, as outlined in your questions, if an institutional staff member makes a telephone contact, an in-person off-campus contact or sends written correspondence to a prospective student to discuss his or her athletics ability or possible participation in intercollegiate athletics such contacts would be considered recruiting contacts and would be subject to NCAA regulations. Further, if an institutional staff member makes a telephone contact, an in-person contact or sends written correspondence to prospective students who have been identified based on their athletics ability such contacts would be considered recruiting contacts regardless of the content of the message and thus would also be subject to NCAA regulations. I hope this information is helpful. Please feel free to contact me if you have further questions.\n\n\n39\nAfter receiving the NCAA response, on March 14, Ille informed Hoxie that the directive applied in four situations: when a prospective student-athlete is identified for contact based on participation in athletics, if the contact is made to address any issue relating to athletics, if it is made to address the prospective student's possible participation in athletics, or if it is made at the request of a member of the athletics department.\n\n\n40\nOn March 19, the statements from his e-mail were essentially reiterated by Chancellor Aiken in an address to the faculty Senate:\n\n\n41\nThe University values and defends the principles of free speech and academic freedom for members of the University community.\n\n\n42\nThe University does not seek to interfere with the expression of views regarding matters of public concern. However, we also are a member of the NCAA, and are committed to controlling our intercollegiate athletics program in compliance with the rules and regulations of the NCAA.\n\n\n43\nThis means that we expect members of the University community to respect NCAA rules, and certainly not intentionally violate them.\n\n\n44\nAs explained in my e-mail of March 2, there are numerous and detailed NCAA rules regarding contacts by faculty and other University representatives with prospective student-athletes. The NCAA Division I Manual itself is 480 pages long. That is why my e-mail advised that any such contacts should occur only with the express authorization of the Director of Athletics or his designee, who have experience in these issues. This is the same policy that this campus consistently has followed in regulating contacts with prospective student-athletes.\n\n\n45\nI have sought advice from the DIA compliance officer, Vince Ille, and Legal Counsel on this issue. Mr. Ille also consulted with the NCAA.\n\n\n46\nWe expect members of the University community to express their viewpoints without violating NCAA rules concerning contacts with prospective student-athletes. Numerous such opportunities abound, including letters to the editor, press releases, radio/TV interviews, leafleting, and public speeches. Various faculty members and others have availed themselves of these opportunities over the years.\n\n\n47\nLet me address one other point: we have received some e-mails in response to my March 2 e-mail that pose a series of hypothetical questions about the First Amendment and other issues. Engaging in a debate at this time about such matters hardly seems helpful or productive.\n\n\n48\nIn two ways, Aiken's statement was broader than the NCAA response: it applied to students as well as staff members, and it applied to all prospective contacts with prospective student-athletes. Similarly, Mr. Ille did not limit the reach of the preclearance directive. Rather, he said it applied to any contacts made \"for the purpose of addressing any issue related to athletics.\" Ille insisted that persons intending to contact prospective athletes inform him of what they were going to be talking about.\n\n\n49\nThese statements were seen by the plaintiffs as prior restraints on their free-speech rights so they filed this lawsuit on March 22. The district judge, the Honorable Michael M. Mihm, after a hearing on April 4, 2001, granted the plaintiffs' request and issued a temporary restraining order (TRO) two days later. The TRO enjoined the chancellor from enforcing the preclearance directive. After the entry of the TRO, Chancellor Aiken retracted part of his original e-mail in a second e-mail sent June 5, 2001:\n\n\n50\nAs you may recall, on March 2, 2001, I sent an e-mail message to persons associated with the University regarding \"Contact with Potential Student Athletes.\" My e-mail message stated, in part, that: \"No contacts are permitted with prospective student athletes, including high school and junior college students, by University students, employees or others associated with the University without express authorization of the Director of Athletics or his designee.\" However, in light of Judge Mihm's order of April 6, 2001 and more recent testimony by representatives of the National Collegiate Athletic Association (NCAA), I have concluded that express authorization of the Director of Athletics or his designee should not be required. Therefore, effective this date, I am permanently retracting the above-quoted sentence of my March 2, 2001 e-mail message.\n\n\n51\nThe retraction of the above-quoted language from my earlier e-mail does not lessen the University's commitment to complying with NCAA rules in the recruitment of student athletes at the University of Illinois. I continue to call upon all members of the University community to abide by the rules of the NCAA when dealing with potential student athletes. Should you have questions concerning NCAA rules, please contact Mr. Vince Ille, Assistant Director for Compliance, at the Division of Intercollegiate Athletics. Thank you.\n\n\n52\nDespite the retraction (which rendered the TRO moot) and the appointment of a new chancellor,7 the case proceeded. The district judge ultimately entered summary judgment for the plaintiffs on their request for a declaratory judgment that the directive violated their First Amendment rights; he ordered nominal damages of $1,000 to plaintiffs Cydney Crue, Brenda Farnell, Hoxie, Stephen Kaufman, and Philip Phillips plus attorney's fees to them as prevailing parties. Chancellor Aiken appeals.\n\n\n53\nOn the merits, the issue before us is whether the March 2 e-mail violated the plaintiffs' First Amendment rights. A secondary issue is whether Chancellor Aiken, in his individual capacity, is entitled to qualified immunity because the law at the time the e-mail was in force did not clearly establish that it violated the First Amendment. We review a grant of summary judgment de novo.\n\n\n54\nAs a preliminary matter, we will mention the claim that this action must be dismissed as moot because the offending e-mail has been retracted and Chancellor Aiken has resigned. Those facts render the request for injunctive relief moot; however, the requests for declaratory relief and for damages remain. When a claim for injunctive relief is barred but a claim for damages remains, a declaratory judgment as a predicate to a damages award can survive. Wolff v. McDonnell, 418 U.S. 539, 94 S.Ct. 2963, 41 L.Ed.2d 935 (1974); see also Powell v. McCormack, 395 U.S. 486, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969); Penny Saver Publ'ns, Inc. v. Village of Hazel Crest, 905 F.2d 150 (7th Cir.1990). Accordingly, we will proceed to the merits.\n\n\n55\nThere is no doubt that the speech involved here concerns a matter of public concern. And so to decide the merits of the dispute we must perform a balancing test. The parties disagree, however, what test should be applied. Is it the one set out in Pickering v. Board of Education, 391 U.S. 563, 88 S.Ct. 1731, 20 L.Ed.2d 811 (1968), or the one announced in United States v. National Treasury Employees Union, 513 U.S. 454, 115 S.Ct. 1003, 130 L.Ed.2d 964 (1995) (NTEU)? Both cases and their tests concern the scope of free-speech rights enjoyed by public employees. To oversimplify, Pickering applies to speech which has already taken place, for which the public employer seeks to punish the speaker. NTEU applies when a prior restraint is placed on employee speech. That distinction seems simple enough, but of course, like almost all things legal, there are ways to argue about where the dividing line should be.\n\n\n56\nThe Pickering Court struck a balance between the interests of the employee, as a citizen, in commenting upon 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. Pickering was a teacher in a public school who wrote a letter to a local newspaper criticizing the school board's handling of a bond issue. The board dismissed him from employment. After balancing the respective rights, the Court determined that, in the situation before it, the dismissal was improper. In Connick v. Myers, 461 U.S. 138, 140, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983), the Court further fleshed out its view of what constitutes \"matters of public concern.\"\n\n\n57\nThen, in NTEU, the Court considered the constitutionality of a law setting out a broad prohibition on federal employees receiving compensation for making speeches or writing articles. The Court noted that the Pickering test did not quite fit the situation before it. NTEU said Pickering involved a post hoc analysis of one employee's speech and its impact on that employee's public responsibilities. The ban in NTEU was in the nature of a prior restraint on a large number of people on a multitude of issues. The Court determined that, when imposing a prior restraint on employee speech, the government has a greater burden than when it is making an isolated employment decision. With a prior restraint, the government must demonstrate that\n\n\n58\nthe interests of both potential audiences and a vast group of present and future employees in a broad range of present and future expression are outweighed by that expressions' \"necessary impact on the actual operation\" of the Government.\n\n\n59\nNTEU, 513 U.S. at 468, 115 S.Ct. 1003, quoting Pickering, 391 U.S. at 571, 88 S.Ct. 1731.\n\n\n60\nChancellor Aiken points out that the prior restraint in NTEU was broader than the one here. He argues, therefore, that we must use a Pickering analysis. We disagree. We are not considering whether the university improperly disciplined an individual for a single statement. Even though there are differences in scope between the enormously wide ban in NTEU and the one here, Chancellor Aiken's directive is a broad prohibition on speech on a matter of significant importance and public concern. It applied to 44,000 members of the university community, including students. The broad scope of the March 2 directive requires, we think, an analysis under the NTEU test.\n\n\n61\nWe have applied the NTEU test in a case involving a prior restraint which is similar to the one now before us. In Milwaukee Police Association v. Jones, 192 F.3d 742 (7th Cir.1999), Police Chief Arthur Jones issued a directive to his officers forbidding them from discussing with anyone, including their union representatives, any verbal or written complaint they might make against another officer. Later, the directive was clarified and expanded by subordinate officers in the police department. We found that the NTEU test was appropriate because the directive banned speech generally; it was not an isolated disciplinary response to previously uttered speech.\n\n\n62\nWhen using the NTEU balancing test, we look first to the interest the university sees threatened by the speech. In its view, the purpose of the speech was to harm the university's athletic recruiting in order to pressure the university into dropping Chief Illiniwek as mascot. The university says it had a compelling interest in adhering to the rules of the NCAA to protect its athletic program, that program being of particular importance to the university. The university, having had prior unpleasant experience with NCAA sanctions, was particularly concerned with NCAA rules. It points out that the NCAA has broad authority to enforce its rules and to sanction institutions and athletes for violations. For minor violations it can terminate an institution's recruitment of an athlete, impose ineligibility on an athlete, require the institution to forfeit a game for a rules violation, impose a fine, or reduce the number of financial aid awards the institution can grant. NCAA bylaw 19.6.1. For more serious violations it can place an institution on probation, prohibit recruiting efforts for a year, reduce the number of financial aid awards it can grant, and even terminate institutional staff members. NCAA bylaw 19.6.2. And in this case, in fact, NCAA and Big Ten officials informed Chancellor Aiken that the NCAA rules covered communications designed to dissuade athletes from enrolling in the university. In addition to protecting itself from sanctions, the university also says it wants to protect prospective athletes from undue pressure and to maintain an efficient recruiting program.\n\n\n63\nFor their part, the plaintiffs assert their long-standing interest in convincing the administration that Chief Illiniwek hurts the university by, for example, creating a hostile environment for Native American students. The plaintiffs' speech is \"addressed to a public audience ... made outside the workplace, and involve[s] content largely unrelated to their government employment.\" NTEU, 513 U.S. at 466, 115 S.Ct. 1003. They say they do not intend to harm the university but seek to make it a better place \"free of a mascot that mocks the religious rituals of Native Americans.\" They also say they have an interest in the timeliness of their activity because the NCAA rules limit the timing of recruiting activity. The preclearance directive does not have a schedule for the review of proposed communications. Therefore, nothing prevents Mr. Ille from delaying approval of their communications until the recruiting season is over.\n\n\n64\nBecause we are dealing with a significant prior restraint on speech, we must determine whether the impact of the speech on the actual operation of the university and its athletic program outweighs the plaintiffs' right to free expression on the matter which is, as we have noted, a clear issue of public concern. First, we note that the fact that the NCAA might or might not like the speech cannot ultimately control a First Amendment issue like this. This is especially true where, as here, the mission of the NCAA is not related to the purpose of the speech. It would seem that the university should reasonably have questioned further the NCAA response that its rules prohibited the speech at issue. The plaintiffs were able to easily determine that there was no real threat that the university would be penalized because of their activities. In response to an inquiry, the NCAA stated to the plaintiffs that they may, without causing sanction to the university, send letters informing prospective student-athletes about the Chief Illiniwek controversy. Even without that assurance, one surely could doubt that the NCAA would venture to overstep its bounds in this manner and be seen as protecting an individual university's questionable mascot when so many other universities have changed theirs. However, were we faced with a situation in which the university would in some way be sanctioned based on the plaintiffs' activities, it does not necessarily follow that the university's interest in preventing a sanction would outweigh a legitimate interest in protesting allegedly racially offensive behavior.\n\n\n65\nThe free-speech interest of the plaintiffs \u2014 members of a major public university community \u2014 in questioning what they see as blatant racial stereotyping is substantial. That interest is not outweighed by fear that an athletic association might not approve of what they say. Furthermore, if something said by a plaintiff to prospective student-athletes is actionable in and of itself, disciplinary action, subject to a Pickering analysis, could be pursued by the university. For these reasons, we conclude that the district court correctly found that the plaintiffs' free-speech rights were infringed by the March 2 preclearance directive.\n\n\n66\nChancellor Aiken's claim of qualified immunity also fails. Qualified immunity protects from civil liability those who perform discretionary functions so long as \"their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.\" Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). The burden in establishing that a right is clearly established falls on the plaintiff. Gregorich v. Lund, 54 F.3d 410 (7th Cir.1995). Whether a right is clearly established depends on the particular facts of the case. Here, that public employees retain certain rights to free speech on matters of public concern has been apparent since the Pickering decision in 1968 and NTEU in 1995. We added our voice on a remarkably similar situation in Jones in 1999. Chancellor Aiken sent his critical e-mail in March 2001. He cannot reasonably claim that the law was unclear.\n\n\n67\nChancellor Aiken also appeals from the award of attorney fees. He does not contest the amount of the award, but rather contends that because the fee request was one day late it should have been disallowed.\n\n\n68\nRule 54(d)(2)(B) of the Federal Rules of Civil Procedure says that \"[u]nless otherwise provided by statute or order of the court, the motion must be filed no later than 14 days after entry of judgment ....\" Pursuant to the introductory clause, the United States District Court for the Central District of Illinois has issued a local rule which requires fee petitions to be filed within 30 days of final judgment. The petition in this case was filed on the 31st day. The judge found that the untimely filing was due to excusable neglect and accepted the petition. Chancellor Aiken argues that the neglect in this case was not excusable.\n\n\n69\nFed.R.Civ.P. 6(b) allows for the enlargement of time after the expiration of the specified period \"where the failure to act was the result of excusable neglect.\" The rule also sets out actions under certain of the rules in which there can be extensions granted. Rule 54 is not among those. Indeed, we have determined that Fed.R.Civ.P. 54 is not jurisdictional. See Johnson v. Lafayette Fire Fighters Ass'n Local 472, 51 F.3d 726 (7th Cir.1995). It can and has been modified by the local rule. In determining whether a late filing is the result of excusable neglect, the district court looks to whether there will be prejudice to the opposing party, the effect on the judicial proceedings, the reason for the delay, and whether the movant acted in good faith. Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993). Our review of a finding of excusable neglect is only for an abuse of discretion. Robb v. Norfolk & Western Rwy. Co., 122 F.3d 354 (7th Cir.1997). We afford particular deference in procedural matters because of the trial judge's familiarity with the parties.\n\n\n70\nIn this case, the delay was as short as possible \u2014 one day. The reason for it was an error in calculating the 30-day period, which should perhaps be embarrassing to the attorney but which surely cannot be said to have been in bad faith. Nor can it be said that there would be any effect on the judicial proceedings, particularly as Aiken himself asked for an extension of time of 60 to 100 days to respond to the fee petition. And, as a fundamental matter, the district judge is in the best position to decide whether the proceedings are adversely affected. We cannot find an abuse of discretion in the decision to allow the petition to be filed.\n\n\n71\nAccordingly, the judgment of the district court is AFFIRMED.\n\n\n\nNotes:\n\n\n1\n See list compiled by Adam Joshua Smargon atwww.smargon.net/nicknames.\n\n\n2\n What in the worldis a \"Billiken\"?\n\n\n3\n As evidence of the Banana Slug's uniqueness, we offer this: of all the nicknames to choose from, acclaimed film director Quentin Tarantino selected it to appear in one of the memorable scenes of his 1994 classic, \"Pulp Fiction.\" Although the movie includes scores of unique scenes (film critic Roger Ebert gushes over it in his 2002 book,The Great Movies), it was certainly shocking to see stone-cold killer Vincent Vega (John Travolta) wearing a Banana Slug T-shirt after being \"cleansed\" at the end of the picture (but not the end of the story \u2014 you have to see it to grasp the distinction).\n\n\n4\n See slug.web.com\n\n\n5\n It's quite possible that the University of North Dakota is still the \"Fighting Sioux\" because its $100 million ice hockey arena, which was under construction in 2000, depended on it. According to the April 23, 2001, edition ofNCAA News, \"News & Features,\" a hot debate over the school's nickname was brewing in Grand Forks when a wealthy alumnus \u2014 who contributed $35 million to the ice hockey arena \u2014 threatened to close the project down if the \"Fighting Sioux\" nickname and related logo were retired. The North Dakota State Board of Higher Education subsequently voted to keep the status quo.\n\n\n6\n The teaching assistant, Cydney Crue, identifies herself as a student; defendant Aiken claims she is a faculty member. For purposes of this decision, it is not necessary for us to decide this issue of university politics\n\n\n7\n We note, off the record, that the new chancellor has now resigned. According to the Chicago Tribune, February 26, 2004, Chancellor Nancy Cantor, who favors retiring Chief Illiniwek, resigned but denied that it was because of the chief\n\n\n\n72\nMANION, Circuit Judge, dissenting.\n\n\n73\nThe plaintiffs, faculty members at the University of Illinois, are among a number of people, in and outside the University, who have for years objected to the use of Chief Illiniwek as part of the cheer-leading effort at athletic events, particularly football games. As the court notes, this symbol is, among other things, labeled a mockery of Indian customs and white people's culture. Criticism by faculty, students, and anyone else at the University who cared was unrestricted and included protests, demonstrations, radio and television interviews, letters to editors and articles published in many venues. To the plaintiffs, this was not enough. They wanted to write to potential athletic recruits for University teams and discourage attendance because of the offensive use of the Chief. But when the NCAA issued a guarded warning that direct contact with potential recruits by University officials could violate NCAA regulations, the University reacted. Chancellor Aiken issued the e-mail that stated in part:\n\n\n74\n... [T]he NCAA regulates the timing, nature and frequency of contacts between any University employee and prospective athletes. It is the responsibility of the coaches and administration in the Division of Intercollegiate Athletics to recruit the best student athletes to participate in varsity sports at the University of Illinois. No contacts are permitted with prospective student athletes, including high school and junior college students, by University students, employees or others associated with the University without express authorization of the Director of Athletics or his designee.\n\n\n75\nThe University faces potentially serious sanctions for violation of NCAA or Big Ten rules. All members of the University community are expected to abide by these rules, and certainly any intentional violations will not be condoned.... Questions about the rules should be addressed to Mr. Vince Ille, Assistant Director for Compliance ....\n\n\n76\nThe district court ruled that this was an unconstitutional prior restraint on speech and issued a temporary restraining order. Chancellor Aiken retracted the directive, but the damage was done. The court awarded $1,000 damages to each plaintiff plus attorney's fees.\n\nI.\n\n77\nOn appeal, the critical question before us is which balancing test applies to the Chancellor's directive regarding speech by state employees: the balancing test derived from Pickering v. Board of Education, 391 U.S. 563, 88 S.Ct. 1731, 20 L.Ed.2d 811 (1968), and Connick v. Myers, 461 U.S. 138, 140, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983) (Pickering/Connick), or the strict scrutiny approach of United States v. National Treasury Employees Union, 513 U.S. 454, 115 S.Ct. 1003, 130 L.Ed.2d 964 (1995) (NTEU). We need to offer clear guidance as to when the heightened scrutiny of NTEU does and does not apply. Instead the court treats all prior restraints alike without balancing the governmental interests at issue. In effect the court creates a new rule of law pronouncing that NTEU applies to all \"broad prohibitions\" on government employee speech. Such \"broad prohibitions\" are defined as involving a \"large number\" of potential plaintiffs concerning a matter of \"significant importance.\" For these and the following reasons, I respectfully dissent.\n\nII.\n\n78\nAs an initial matter, both the district court and this court summarily conclude that the e-mail is a prior restraint. The prior restraint label, however, has a significantly different meaning when applied to the speech of governmental employees (as is the case here) than when applied to non-governmental employees. It is clear that \"the State's interests as an employer in regulating the speech of its employees `differ significantly from those it possesses in connection with regulation of the speech of the citizenry in general.'\" Connick, 461 U.S. at 140, 103 S.Ct. 1684 (quoting Pickering, 391 U.S. at 568, 88 S.Ct. 1731). While this circuit has not squarely addressed the variations or gradations of prior restraints in the government employee context after NTEU, it is well settled that traditional prior restraint analysis is inappropriate where the government acts under its special authority as an employer. See, e.g., Weaver v. United States Information Agency, 87 F.3d 1429, 1440 (D.C.Cir.1996). In fact, \"courts have uniformly assessed prior restraints in the setting of government employment by standards less demanding than those used for traditional prior restraints.\" Id. at 1443.\n\n\n79\nCalling the e-mail a \"preclearance directive,\" even if an accurate label, does not establish that the e-mail constitutes a prior restraint subject to the heightened scrutiny of NTEU in the context of government employment. The distinction between a relatively mild preclearance directive and a broad general prohibition on speech in the employment context \u2014 i.e., a full-fledged prior restraint \u2014 is significant. We have yet to address in a published opinion whether NTEU applies in cases of preclearance directives and we have applied NTEU in only one reported case involving a sweeping, general ban (or prior restraint) on speech. See Milwaukee Police Assoc. v. Jones, 192 F.3d 742, 750 (7th Cir.1999).\n\n\n80\nJones amplifies the differences between a preclearance directive and a more sweeping general ban. Jones addresses a ban on \"all communication before it occurs.\" Id. at 749. The Police Chief of Milwaukee issued an order to all police department employees, stating that if any employee made a verbal or written complaint against another employee, the complaint had to remain confidential. Id. at 744-45. In fact, the Chief's directive forbade complaining members from discussing the matter with their lawyer and/or union representative. Id. at 745. The ban emphasized that complaining officers \"are to be instructed not to discuss the matter with anyone.\" Id. (emphasis added).\n\n\n81\nIn sum, Jones addresses an actual prohibition of speech in totality, including mere discussion of the matter. Jones did not involve a simple prepublication review of speech. Cf. Weaver, 87 F.3d at 1443 (holding valid under Pickering and NTEU a prepublication review of speech). In contrast to the broad, sweeping (and total) ban on speech at issue in Jones, the e-mail at issue here merely applied to a narrow band of speech by University employees directed only at potential student athletes who were currently in high school or junior college. It is undisputed that the e-mail is viewpoint-and content-neutral, see Ward v. Rock Against Racism, 491 U.S. 781, 791, 109 S.Ct. 2746, 105 L.Ed.2d 661 (1989); Renton v. Playtime Theatres, Inc., 475 U.S. 41, 47-48, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986), and is not intended to censor any certain message, whether it be in favor of or against the Chief. See Appellee's brief, p. 19 (\"[T]he Preclearance Directive applies without regard to the content of the communication, if the student is selected because of his or her participation in athletics.\").\n\n\n82\nThe e-mail does not purport to prohibit the right to leaflet, make speeches, write letters to the editor, or freely debate/discuss the merits or demerits of the Chief in any forum. Instead, the plain language of the e-mail merely reminds potential speakers of the time restrictions imposed by the NCAA rules on contacting prospective student athletes. It also cautions that intentional violations of these rules will not be condoned. This is a prototypical prepublication review calling for a dialogue between potential speakers and the University in order to assess the appropriate manner and timing for the speech. The D.C. Circuit has upheld a similar directive requiring a dialogue with the government before publication. See Weaver, 87 F.3d at 1431, 1435. Accordingly, the e-mail should not receive the heightened scrutiny of NTEU, which Jones properly reserves for sweeping, general bans on all communications.\n\n\n83\nEven if the preclearance directive were properly labeled as a full-fledged prior restraint in the government employee context, not all prior restraints on speech are analyzed under the same test. Jones, 192 F.3d at 749. Prior restraint analyses applicable to private sector plaintiffs do not apply when the plaintiffs are government employees. Id; Weaver, 87 F.3d at 1440 (\"There is certainly no logical reason to think that the existence of some element of prior restraint should remove a restriction on employee speech from the usual Pickering approach.\"). Here, however, the court departs from the traditional balancing test applied to government employees and instead applies the heightened scrutiny of NTEU. This application more closely resembles the test for prior restraints involving private sector plaintiffs. In choosing the NTEU heightened scrutiny test, the court reasons: (1) \"NTEU applies when a prior restraint is placed on employee speech\"; (2) the Preclearance Directive \"is a broad prohibition on speech on a matter of significant importance1 and public concern\"; and (3) the preclearance directive applied to \"44,000 members of the university community.\" Ante at 677, 679.\n\n\n84\nThese reasons do not suffice. The court even acknowledges the oversimplified nature of its conclusion that NTEU applies to all prior restraints and that Pickering/Connick applies to instances of speech that have already taken place. Not only is the before-and-after distinction an oversimplification, but, as Jones makes clear, it is a misstatement of law. See Jones, 192 F.3d at 749; see also NTEU, 513 U.S. at 480, 115 S.Ct. 1003 (O'Connor, J., concurring/dissenting) (\"[R]eliance on the ex ante/ex post distinction is not a substitute for the case-by-case application of Pickering.\").\n\n\n85\nAnd while the speech clearly involves a matter of public concern, the Directive is not so clearly a broad prohibition. The court's claim that the e-mail applies to 44,000 students, faculty, and staff of the University ignores NTEU's critical distinction concerning the scope of the speech prohibited by the government. The 44,000 number may accurately reflect the entire population of the University of Illinois, but this case involves far fewer potential speakers: only those plaintiffs employed by the University.\n\n\n86\nEven so, the fact that there were nearly two million potential speakers at issue in NTEU, 513 U.S. at 481-82, 115 S.Ct. 1003 (O'Connor, J. concurring/dissenting), was not the determining factor in the Court's decision to apply strict scrutiny. Nor should the 44,000 number, or a much smaller number, be dispositive here. In addition to focusing on the number of potential plaintiffs, NTEU emphasized the \"sweeping statutory impediment to speech,\" which the opinion characterized as a \"wholesale deterrent to a broad category of expression by a massive number of potential speakers.\" Id. at 467, 115 S.Ct. 1003 (emphasis added) (footnote omitted). The emphasis should not be on numbers, but rather on the degree to which speech is deterred and the avenues of speech left open to the plaintiffs. NTEU, 513 U.S. at 467 n. 11, 115 S.Ct. 1003.\n\n\n87\nNTEU involved a broad congressional prohibition on speech that prevented nearly two million federal employees (including lower-level employees) from accepting any compensation for making speeches or writing articles, even if the speech or article were totally unconnected to the employee's official duties. Id. at 457, 115 S.Ct. 1003. The ban went so far as to prohibit a mail handler from receiving compensation for giving a speech on the Quaker religion and an aerospace engineer from being compensated for lecturing on black history. Id. at 461, 115 S.Ct. 1003. To be sure, NTEU involved plaintiffs seeking compensation \"for their expressive activities in their capacity as citizens, not as government employees.\" Id. at 465, 115 S.Ct. 1003 (emphasis added). The ban at issue applied to \"off-hour speech bearing no nexus to Government employment \u2014 speech that by definition does not relate to `internal office affairs' or the employee's status as an employee.\" Id. at 480, 115 S.Ct. 1003 (O'Connor, J., concurring/dissenting) (citing Connick, 461 U.S. at 149, 103 S.Ct. 1684).\n\n\n88\nIn stark contrast, the preclearance directive in this case did not purport to limit the plaintiffs' right to give speeches concerning the Chief controversy, to write letters to the editor, participate in demonstrations, etc. The e-mail left open a wide variety of unfettered speech opportunities for the plaintiffs, which the plaintiffs frequently used. Instead of fully availing themselves of the many alternative speech opportunities, the plaintiffs intended to make their employee status an integral component of their speech. Specifically, they intended to write letters to potential student athletes on University letterhead to discourage attendance at the University. The preclearance directive applies solely to the plaintiffs' acts in their government employee capacity, as opposed to the plaintiffs' acts as citizens. The NCAA warning was directed at contacts with potential recruits by school officials. NTEU does not establish a right for government employee speakers to elevate the influence of their speech by emphasizing their official government position. In sum, the ban at issue in NTEU is vastly different than Chancellor Aiken's e-mail because the prohibition in NTEU involved a significantly greater number of potential speakers; it involved a whole-sale deterrent to a broad category of expression; and it applied both to the plaintiff's capacity as government employees and as public citizens.\n\n\n89\nIt is true that the prior restraint context imposes problems not present in the typical Pickering/Connick analysis which involves a post hoc disciplinary decision. See Jones, 192 F.3d at 750. In addition, this case is different than the typical application of Pickering/Connick because the plaintiffs have not suffered any adverse employment action often at issue in the application of Pickering/Connick. See, e.g., Rankin v. McPherson, 483 U.S. 378, 388, 107 S.Ct. 2891, 97 L.Ed.2d 315 (1987). Regardless, there is no authority for applying NTEU to all cases of prior restraints. See Jones, 192 F.3d at 749. Applying the heightened standard of NTEU to restrictions on employee speech is the exception, not the rule.2 See, e.g., Belcher v. City of McAlester, 324 F.3d 1203, 1206 n. 3 (10th Cir.2003) (rejecting request to apply NTEU to prior restraint because the restraint was narrow and left open ample alternate channels of communication). Likewise, this case is far removed from the facts of NTEU. The Pickering/Connick balancing test is appropriate because the e-mail leaves open many alternate venues for the plaintiffs to communicate their message. In fact, we have previously applied Pickering/Connick and rejected an invitation to apply NTEU to prohibitions that are not a \"blanket restriction on speech\" where \"alternate venues\" are left open for the plaintiffs' communication. See Messman v. Helmke, 133 F.3d 1042, 1047 (7th Cir.1998).\n\n\n90\nUnder Pickering/Connick, the proper analysis requires \"a balance between the interests of the [employee], as a citizen, in commenting upon 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.\" Connick, 461 U.S. at 140, 103 S.Ct. 1684 (quoting Pickering, 391 U.S. at 568, 88 S.Ct. 1731). The government's interest when acting as a mere sovereign is subordinate, but the government's interest as an employer is a \"significant one.\" Waters v. Churchill, 511 U.S. 661, 675, 114 S.Ct. 1878, 128 L.Ed.2d 686 (1994). In conducting this balance, the Supreme Court cautions that we are to give substantial weight to government employers' reasonable predictions of disruption, even when the speech involved was on a matter of public concern. Id. at 673-74, 114 S.Ct. 1878. In fact, the Supreme Court has deferred to reasonable predictions of disruption by upholding a congressional ban on Executive Branch employees from taking an active part in political campaigns or political management. Public Workers v. Mitchell, 330 U.S. 75, 99, 67 S.Ct. 556, 91 L.Ed. 754 (1947).\n\n\n91\nThe plaintiffs' depositions reveal that the purpose behind the letter-writing campaign was to encourage potential student athletes not to attend the University. We have consistently permitted government employers to take proactive steps when facing obvious acts of disruption by employees. See Sullivan v. Ramirez, 360 F.3d 692, 701 (7th Cir.2004) (balancing \"the potential disruptiveness\" of the speech); Greer v. Amesqua, 212 F.3d 358, 372 (7th Cir.2000); Propst v. Bitzer, 39 F.3d 148, 152 (7th Cir.1994). The Illinois legislature has declared national athletic competition \"essential\" to the state's schools and their finances. 110 ILCS 25/2(c). Damage to recruiting or other aspects of the athletics program is damage to the University's bottom line.3 See Messman, 133 F.3d at 1047; cf. Lewis v. Cowen, 165 F.3d 154, 164 (2d Cir.1999) (upholding defendants' predictions of disruption that state employee's \"refusal to promote the proposed change would result in negative publicity and decreased morale, in turn impairing ... profitability.\").\n\n\n92\nThe government interest here goes beyond the obvious interest in effective recruiting. Compliance with NCAA regulations concerning the quantity and timing of contacts between representatives of the University and prospective student athletes is critical to the University. For even \"secondary,\" \"isolated,\" or \"inadvertent\" violations with \"minimal\" effects, the NCAA wields an arsenal of stiff sanctions, including terminating the school's recruitment of a particular athlete, imposing ineligibility on an athlete, requiring a school to forfeit a game in which an impermissibly contacted athlete played, and fines. See NCAA Bylaws 19.02.2.1; 19.6.1. The University had been sanctioned three times for major rules violations shortly before the tenure of Chancellor Aiken and it is undisputed that Chancellor Aiken was concerned that the plaintiffs' letter-writing campaign could violate NCAA recruiting rules.\n\n\n93\nNCAA rules strictly limit recruiting activities by \"institutional staff\" which includes \"faculty members.\" NCAA Bylaw 13.1.2.3(a). The NCAA rules apply to \"general correspondence related to athletics.\" NCAA Bylaw 13.4.1. In order to be certain that the prospective faculty contacts were subject to NCAA rules, Chancellor Aiken questioned NCAA and Big Ten Conference officials before sending the e-mail. In response, NCAA rules expert Denise O'Meally explained in an e-mail that NCAA regulations apply when \"an institution either identifies and contacts a group of prospective students based on their athletics ability or contacts prospective students to discuss their athletics participation.\" Before sending the e-mail, Chancellor Aiken also conferred with various University officials and with in-house and outside counsel before concluding that the letter-writing campaign potentially fell within NCAA restrictions.\n\n\n94\nThe plaintiffs' attorneys later obtained a letter from the NCAA stating that the letter-writing campaign would not likely result in sanctions provided that the University \"either was unaware of the correspondence or acted reasonably to preclude it from being sent.\" Regardless, the constitutional inquiry is not whether the school would have faced sanctions due to the letters. The plaintiffs' attempt to question the likelihood of sanctions is an especially unhelpful inquiry in reviewing plaintiffs' motion for summary judgment, because all disputed issues of fact must be resolved in favor of Chancellor Aiken. Instead, the test is whether the e-mail was reasonably necessary to prevent anticipated harms. See NTEU, 513 U.S. at 475, 115 S.Ct. 1003; Myers v. Hasara, 226 F.3d 821, 826 (7th Cir.2000) (balancing the government interest based on the facts reasonably known to the government employer). As stated above, the e-mail served to caution employees that, due to NCAA regulations, a dialogue was necessary before the contacts with student athletes could be made. Even under the plaintiffs' view of the regulations, the University could face sanctions if it did not act reasonably to preclude from being sent a communication in violation of the rules. The e-mail was a reasonable response and is entitled to the deference normally given to government predictions of harm used to justify restrictions on employee speech. See Waters, 511 U.S. at 673, 114 S.Ct. 1878. The careful investigation and advice sought by Chancellor Aiken establishes that the e-mail was not written out of mere conjecture or speculative fear. Cf. NTEU at 475, 115 S.Ct. 1003 (citing Turner Broadcasting System v. FCC, 512 U.S. 622, 664, 114 S.Ct. 2445, 129 L.Ed.2d 497 (1994)).\n\n\n95\nTurning to the plaintiffs' interest, the balancing test, again, considers the plaintiffs' interest as a citizen in commenting upon matters of public concern. The plaintiffs' interests, as citizens, are not impacted by the e-mail, only their interests in commenting as government employees. Connick, 461 U.S. at 140, 103 S.Ct. 1684. As a citizen, the plaintiffs remained free to hold news conferences, write letters to the editor, deliver public speeches, engage in rallies or protests, or speak publicly in any other way concerning the Chief controversy. In fact, the record is replete with examples of plaintiffs appearing on radio and TV regarding the Chief, writing newspaper articles, addressing the board of trustees, and participating in anti-Chief marches and demonstrations. An enormous category of speech remains open to the plaintiffs, not to mention the availability of anonymous speech. See McIntyre v. Ohio Elections Commission, 514 U.S. 334, 343, 115 S.Ct. 1511, 131 L.Ed.2d 426 (1995) (extolling the United States' respected tradition of anonymity in the advocacy of political causes).\n\n\n96\nThis is simply not a case where the University is attempting to suppress the plaintiffs' message, which happens to be against the Chief. At issue here is the plaintiffs' demand that they be permitted to use their status as University professors or employees to magnify the impact of their speech by directly contacting and discouraging potential athletes. The court complied by granting to the plaintiffs an extended right to communicate in their capacity as government employees in a time, place, and manner of their own choosing. The court does not consider the many alternative modes of communication left open to the plaintiffs and whether such alternatives were adequate when balanced against the University's concern for violating NCAA regulations. Myers v. Hasara, 226 F.3d 821, 828 (7th Cir.2000) (citing Coady v. Steil, 187 F.3d 727, 731 (7th Cir.1999)). The plaintiffs were already using numerous venues to communicate their message in ways less disruptive to the University, but still communicating with anyone willing to read or listen. The First Amendment does not require the University to eliminate the time requirements of the NCAA regulations and allow University employees the imprimatur of official positions to communicate to prospective student athletes.\n\n\n97\nEven if the court were correct that NTEU applied to this case and that balance tipped in favor of the plaintiffs, qualified immunity applies to Chancellor Aiken. Assuming there were a constitutional violation, in order to remove the cloak of qualified immunity, the plaintiffs have the burden of proof to show that the law prohibiting Chancellor Aiken's conduct was \"clearly established.\" Gregorich v. Lund, 54 F.3d 410, 413 (7th Cir.1995). The test for whether the law was clearly established must be conducted based on the specific facts of the case, and not at a high level of generality. See Greenberg v. Kmetko, 922 F.2d 382, 383-84 (7th Cir.1991).\n\n\n98\nHere, both Pickering/Connick and NTEU involve balancing tests and, unless there is \"very closely analogous\" case law, the balance struck by the official will not remove qualified immunity. See Gregorich, 54 F.3d at 414. Plaintiffs have not identified any such closely analogous case law. The obvious proposition that prior restraints are disfavored is far too general to satisfy the plaintiffs' burden. As set forth above, Chancellor Aiken did not act without caution. He consulted attorneys and relied upon advice by the NCAA before sending the e-mail. The court merely relies upon Jones to support its conclusion that the law was clearly established. As set forth above, Jones involved an actual prohibition on speech, unlike the prepublication review at issue here. Jones banned all speech concerning disciplinary matters and did not leave open any alternative channels of communication. In contrast, the e-mail at issue here did not purport to make discussions regarding the Chief confidential. The plaintiffs remained free to write letters to the editor, engage in protests, lead discussion, give public speeches, etc. The plaintiffs have not approached meeting their burden of showing \"very closely analogous case law\" and Chancellor Aiken is thus entitled to qualified immunity.\n\nIII.\n\n99\nThe Pickering/Connick balancing test applies to Chancellor Aiken's e-mail because it merely places time restrictions on a narrow band of communication by plaintiffs in their capacity as government employees. The e-mail is not a \"wholesale deterrent to a broad category of expression by a massive number of potential speakers\" and thus the test for applying the heightened scrutiny of NTEU is not met. Under the Pickering/Connick test, the government has an important interest in the efficiency of recruiting; in complying with NCAA time limitations regarding contacts with prospective student athletes; and in protecting prospective student athletes from intimidating, confusing, or burdensome communication. Moreover, the e-mail leaves open a wide variety of alternative communication, of which the plaintiffs have taken advantage. Finally, Chancellor Aiken is entitled to qualified immunity because the plaintiffs have failed to meet their burden of showing very closely analogous case law controlling the outcome of this case. I therefore DISSENT from the court's decision and would vacate the district court's judgment as to the plaintiffs' request for declaratory relief and damages and grant Chancellor Aiken's motion for summary judgment.\n\n\n\nNotes:\n\n\n1\n It is undisputed that the plaintiffs' speech involves a matter of public concern. Whether the speech is of \"significant importance\" or not should be of no concern to this court\n\n\n2\n There is no legal requirement that the speech actually be delivered beforePickering/Connick can be applied. That is, the government's interest can be weighed in anticipation of the potential effect, without having to wait and review the impact of the speech after the fact. See NTEU, 513 U.S. 454, 481, 115 S.Ct. 1003, 130 L.Ed.2d 964 (O'Connor, J. dissenting, concurring) (emphasizing that the ex ante/ex post distinction is not the determinative factor triggering NTEU heightened scrutiny).\n\n\n3\n The court does not discuss the University's interest in effective recruiting and maintaining a sound bottom line. Our precedent emphasizes that \"[e]fficiency and fiscal responsibility are powerful governmental interests.\"Messman, 133 F.3d at 1047. The plaintiffs acknowledge the University's actual interest in recruiting speech and that Chancellor Aiken \"might constitutionally require pre-approval of such contacts.\" Nor does the court discuss the University's interest in regulating the timing of potentially intimidating, confusing, or burdensome communication to impressionable teenage athletes who are entitled to privacy. Cf. Muller v. Jefferson Lighthouse Sch., 98 F.3d 1530, 1541 (7th Cir.1996) (permitting principal to prescreen for speech that \"materially interfere[d] with school procedures and intrude[d] into school affairs or the lives of others.\"). Far from being \"paternalistic\" as the plaintiffs claim, such concerns are the basis for the NCAA rules limiting the number and timing of recruiting contacts to prospective student athletes.\n\n\n"} -{"text": "337 F.3d 1373\nNIPPON STEEL CORPORATION, Plaintiff-Appellee,v.UNITED STATES, Defendant-Appellant,v.Bethlehem Steel Corporation and U.S. Steel Group (a Unit of USX Corporation), Defendants-Appellants, andISPAT Inland Inc., LTV Steel Company, Inc., Gallatin Steel, Ipsco Steel, Inc., Steel Dynamics, Inc., and Weirton Steel Corporation, Defendants.\nNo. 02-1266.\nNo. 02-1267.\nUnited States Court of Appeals, Federal Circuit.\nAugust 8, 2003.\n\nCOPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED J. Christopher Wood, Gibson, Dunn & Crutcher, LLP, of Washington, DC, argued for plaintiff-appellee. With him on the brief were Daniel J. Plaine and Gracia M. Berg.\nKyle E. Chadwick, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for defendant-appellant United States. With him on the brief were David M. Cohen, Director; and Lucius B. Lau, Assistant Director. Of counsel on the brief were John D. McInerney, Chief Counsel; Elizabeth C. Seastrum, Senior Counsel; and Linda S. Chang, Senior Attorney, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.\nJeffrey D. Gerrish, Skadden, Arps, Slate, Meagher & Flom LLP, of Washington, DC, argued for defendants-appellants Bethlehem Steel Corporation, et al. With him on the brief were Robert E. Lighthizer, John J. Mangan, and Ellen Schneider. Of counsel were James C. Hecht and Daniel L. Schneiderman, Skadden, Arps, et al.\nBefore LOURIE, GAJARSA and LINN, Circuit Judges.\nLINN, Circuit Judge.\n\n\n1\nA group of domestic steel producers (\"petitioners\"), including appellants Bethlehem Steel and U.S. Steel Group (collectively, \"Bethlehem\"), petitioned the Department of Commerce (\"Commerce\") to initiate an antidumping investigation of hot-rolled flat-rolled carbon-quality steel products (\"hot-rolled steel\") from Japan. The United States and Bethlehem separately appeal from a final judgment entered by the United States Court of International Trade, in which the court (1) rejected Commerce's application of partial adverse facts available; (2) invalidated 19 C.F.R. \u00a7 351.104(a); (3) ordered the use of a particular weight conversion factor; and (4) affirmed Commerce's starting price for the hot-rolled steel sales at issue. Because Commerce's decision to apply partial adverse facts available to the theoretical weight sales is supported by substantial evidence and is otherwise in accordance with law, we reverse the Court of International Trade's judgment to the contrary. Because Commerce's methodology of calculating the starting price was not in accordance with law, we reverse the Court of International Trade's affirmance of that issue.\n\nBACKGROUND\n\n2\nThe underlying facts in this case are largely undisputed and are taken from the Court of International Trade's decisions. See Nippon Steel Corp. v. United States, 118 F.Supp.2d 1366, 1369-72 (Ct. Int'l Trade 2000) (\"Nippon I\"). On September 30, 1998, petitioners filed a petition with Commerce pursuant to section 732(b) of the Tariff Act of 1930, 19 U.S.C. \u00a7 1671a(b) (2000), alleging that hot-rolled steel from Japan and other countries was being dumped in the United States, injuring a domestic industry. On October 22, 1998, in response to the information presented in the petition, Commerce published its notice of initiation of the antidumping investigation underlying this litigation. Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and the Russian Federation, 63 Fed. Reg. 56,607 (Dep't Commerce Oct. 22, 1998) (\"Initiation of Antidumping Invest.\").\n\n\n3\nCommerce issued antidumping questionnaires to six Japanese steel producers identified in the petition. Because Commerce could not examine all six, it selected plaintiff-appellee Nippon Steel Corporation (\"NSC\") and two other producers as respondents and advised the remaining companies that they need not respond. See Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan, 64 Fed.Reg. 8291, 8292 (Dep't Commerce Feb. 19, 1999) (\"Preliminary Results\").\n\n\n4\nFrom November 16, 1998, through January 25, 1999, Commerce received responses to initial and supplemental questionnaires. Questionnaire section B requested, among other things, figures that Commerce could use to convert sales made at actual and theoretical weights, respectively, to a common basis (\"conversion factor data\"). NSC, in a response dated December 21, 1998, did not provide that data, asserting instead that Commerce did not need a \"uniform quantity of measure\" because \"all NSC quantity types are consistent within the product type.\" In its January 25, 1999 response to a supplemental request, NSC stated that steel sheet sold at theoretical weight (i.e., estimated weight, based upon dimensions) \"are never actually weighed\" and, thus, NSC had \"no way of calculating the requested theoretical-to-actual weight conversion factor.\" NSC later admitted that, contrary to its initial and supplemental responses, \"the actual weight can be calculated.\"\n\n\n5\nNSC timely reported its gross unit prices for U.S. sales in dollars. It also reported net prices in yen for each sale, which NSC and its customers derived by discounting the invoiced dollar amount by the standard discount rate, then converting to yen at the exchange rate applicable on the ninth day after shipment. NSC's invoices reflect both the gross dollar price and the net yen price. Commerce verified that NSC received payments in yen, and that NSC internally recorded the accounts receivable in yen.\n\n\n6\nOn February 19, 1999, Commerce published its preliminary dumping determination. Preliminary Results, 64 Fed.Reg. at 8291. Among other findings, Commerce preliminarily assigned an adverse (highest calculated) margin to sales made by NSC upon a theoretical weight basis because \"NSC did not provide conversion factors for these U.S. sales upon [Commerce's] request....\" Id. at 8298. Three days later, on February 22, 1999, NSC submitted a theoretical-to-actual weight conversion factor with no explanation for its lateness. On March 2, 1999, NSC submitted preverification changes and raw backup data supporting a corrected conversion factor. NSC stated that its prior \"misstatement\" that actual weights were unavailable was \"based on a factual misunderstanding on the part of the NSC staff responsible for the preparation of NSC's responses in the instant investigation.\" Because NSC had not timely provided weight conversion data, Commerce informed NSC at verification that it would not accept or verify the conversion factor or supporting data. See Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Japan, 64 Fed.Reg. 24,329, 24,361 (Dep't Commerce May 6, 1999) (\"Final Results\").\n\n\n7\nIn its May 6, 1999 final determination, Commerce reached a number of conclusions, two of which are pertinent to this appeal. First, Commerce used the yen value listed on NSC's invoices as the starting point for determining NSC's U.S. prices, upon the ground that the yen figure was \"the value which is invoiced and paid by NSC's customers.\" Id. at 24,345. Commerce converted this value to dollars at the exchange rate effective on the shipment date. See id. Second, Commerce confirmed its rejection of NSC's conversion factor data and assigned a margin to the affected sales based upon facts available. See id. at 24,360-61. Finding that NSC had failed to act to the best of its ability with respect to the conversion factor data because NSC could have provided it when originally requested, Commerce drew an adverse inference in assigning that margin. See id. at 24,362.\n\n\n8\nBethlehem and NSC timely filed actions before the Court of International Trade contesting Commerce's final determination pursuant to 19 U.S.C. \u00a7 1516a(a)(2). The Court of International Trade remanded the case to Commerce three times before entering final judgment. See Nippon Steel Corp. v. United States, 118 F.Supp.2d 1366, (Ct. Int'l Trade 2000) (\"Nippon I\"); Nippon Steel Corp. v. United States, 146 F.Supp.2d 835 (Ct. Int'l Trade 2001) (\"Nippon II\"); Nippon Steel Corp. v. United States, No. 01-122 (Ct. Int'l Trade Oct. 12, 2001) (\"Nippon III\"); Nippon Steel Corp. v. United States, No. 01-152 (Ct. Int'l Trade Dec. 27, 2001) (\"Nippon IV\"). In Nippon I, the court vacated Commerce's decision to use adverse facts available against NSC and remanded the matter to determine whether the failure to timely produce the conversion factor data was \"an excusable inadvertence on NSC's part or a demonstration of a lack of due regard for its responsibilities in the investigation.\" 118 F.Supp.2d at 1378-79. The court also affirmed Commerce's use of the invoiced yen price as the starting price in its export price calculations. Id. at 1380-81. In Nippon II, the court held that Commerce's decision to apply adverse facts available on remand was not supported by substantial evidence because Commerce failed to \"cite factors beyond NSC's failure to respond correctly to the agency's two requests for the weight conversion factor.\" 146 F.Supp.2d at 838. The court also held that 19 C.F.R. \u00a7 351.104(a) was not in accordance with law to the extent that it prohibited Commerce from considering the untimely conversion factor data when evaluating the impact on NSC's dumping margins. Id. at 843-44. That regulation precludes the inclusion of material returned to a submitter in the official record of proceedings. The case was remanded for Commerce to determine the dumping margin without using adverse facts available. Id. at 845. In Nippon III, the court again remanded, holding that Commerce's calculations using neutral facts available resulted in an implausible conversion factor. Nippon III, slip op. at 11. Finally, in Nippon IV, the court found that \"Commerce has not meaningfully changed its methodology as ordered.\" Nippon IV, slip op. at 4. Instead of remanding a fourth time, the court \"refuse[d] to further extend litigation by reopening the issue\" and ordered Commerce to use NSC's suggested weight conversion factor. Id. at 6.\n\n\n9\nBethlehem and the government separately appeal to this court. Both appellants argue that the Court of International Trade erred by rejecting Commerce's original determination to apply partial adverse facts available because Commerce's determination was supported by substantial evidence. Both appellants also argue that the court erred in its conclusion that 19 C.F.R. \u00a7 351.104 is invalid because Commerce's interpretation of that regulation is in accordance with law and entitled to deference. Bethlehem separately argues that the court erred by holding that Commerce's determination of the \"starting price\" to be used for NSC's U.S. sales was supported by substantial evidence.\n\n\n10\nThis court has jurisdiction under 28 U.S.C. \u00a7 1295(a)(5).\n\nDISCUSSION\nA. Standard Of Review\n\n11\nWe review a decision of the Court of International Trade evaluating an antidumping determination by Commerce by reapplying the statutory standard of review that the Court of International Trade applied in reviewing the administrative record. Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1335 (Fed.Cir.2002) cert. denied, ___ U.S. ___, 123 S.Ct. 2073, 155 L.Ed.2d 1059 (2003) (No. 02-1141). Commerce's special expertise in administering the anti-dumping law entitles its decisions to deference from the courts. See, e.g., Micron Tech., Inc. v. United States, 117 F.3d 1386, 1394 (Fed. Cir.1997); Torrington Co. v. United States, 68 F.3d 1347, 1350-51 (Fed.Cir. 1995); see also Chevron USA, Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843-44, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). We will uphold Commerce's determination unless it is \"unsupported by substantial evidence on the record, or otherwise not in accordance with law.\" 19 U.S.C. \u00a7 1516a(b)(1)(B)(i) (2000); Micron Tech., 117 F.3d at 1393. \"Substantial evidence\" has been defined as \"more than a mere scintilla,\" as \"such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.\" Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). To determine if substantial evidence exists, we review the record as a whole, including evidence that supports as well as evidence that \"fairly detracts from the substantiality of the evidence.\" Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed. Cir.1984).\n\nB. Imposition of Adverse Inference\n\n12\nThe first issue before us is whether Commerce's initial decision to apply an adverse inference in selecting facts available was supported by substantial evidence. Appellants argue that Commerce acted within its discretion because NSC had the ability to provide the conversion factor data requested in a timely manner and simply failed to comply. Appellants contend that under the circumstances of this case, 19 U.S.C. \u00a7 1677e allows Commerce to apply an adverse inference against respondents who fail to act to the best of their ability in complying with department requests. To the extent that the Court of International Trade required Commerce to show that the failure to provide information was not \"inadvertence\" or \"a simple mistake,\" appellants complain that the court injected an element of intent not found in the statute.\n\n\n13\nNSC argues that the Court of International Trade properly rejected Commerce's interpretation of section 1677e. Specifically, NSC supports the court's conclusion and contends that the inquiry into whether a respondent has acted to the best of its ability requires a determination whether the respondent showed a \"lack of due regard for its responsibilities in the investigation.\" See Nippon I, 188 F.Supp.2d at 1379. NSC argues that Commerce's interpretation of the statute amounts to a requirement that responses to inquiries be perfectly compliant and that \"punishing\" respondents for inadvertent errors serves no legitimate purpose under the antidumping laws.\n\n\n14\nThe parties frame the issue in this case as a dispute over the scope of the \"best of its ability\" standard in section 1677e. When evaluating an interpretation of a statutory scheme that an agency is charged to administer, we apply the familiar two-part inquiry to determine whether to sustain an agency's interpretation of that statute. See Chevron, 467 U.S. at 842-44, 104 S.Ct. 2778. First, the court must determine \"whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.\" Id. at 842-43, 104 S.Ct. 2778. However, \"if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.\" Id. at 843, 104 S.Ct. 2778.\n\n\n15\nTurning to the words themselves, section 1677e provides:\n\n\n16\nIf \u2014\n\n\n17\n(a) In general\n\n\n18\n* * *\n\n\n19\n(2) an interested party or any other person \u2014\n\n\n20\n(B) fails to provide such information by the deadlines for submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 1677m of this title,\n\n\n21\n* * *\n\n\n22\nthe administering authority and the Commission shall, subject to section 1677m(d) of this title, use the facts otherwise available in reaching the applicable determination under this subtitle.\n\n\n23\n(b) Adverse inferences\n\n\n24\nIf the administering authority or the Commission (as the case may be) finds that an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information from the administering authority or the Commission, the administering authority or the Commission (as the case may be), in reaching the applicable determination under this subtitle, may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available.\n\n\n25\n19 U.S.C. \u00a7 1677e (2000). The statute has two distinct parts respectively addressing two distinct circumstances under which Commerce has received less than the full and complete facts needed to make a determination. Under subsection (a), if a respondent \"fails to provide [requested] information by the deadlines for submission,\" Commerce shall fill in the gaps with \"facts otherwise available.\" The focus of subsection (a) is respondent's failure to provide information. The reason for the failure is of no moment. The mere failure of a respondent to furnish requested information \u2014 for any reason \u2014 requires Commerce to resort to other sources of information to complete the factual record on which it makes its determination. As a separate matter, subsection (b) permits Commerce to \"use an inference that is adverse to the interests of [a respondent] in selecting from among the facts otherwise available,\" only if Commerce makes the separate determination that the respondent \"has failed to cooperate by not acting to the best of its ability to comply.\" The focus of subsection (b) is respondent's failure to cooperate to the best of its ability, not its failure to provide requested information.\n\n\n26\nThe legislative history found in the Statement of Administrative Action (\"SAA\") accompanying the Uruguay Round Agreements Act, Pub.L. No. 103-465, 108 Stat. 4809 (1994) (\"URAA\"), confirms the distinction between the two sections. Prior to the adoption of the URAA, the Tariff Act mandated the use of the \"best information available\" if a respondent refused or was unable to produce information in a timely manner or in the form requested by Commerce. In adopting the URAA, Congress changed the terminology and noted:\n\n\n27\nNew section [1677e(a)] requires Commerce and the Commission to make determinations on the basis of facts available where the requested information is missing from the record or cannot be used because, for example, it has not been provided, it was provided late, or Commerce could not verify the information.\n\n\n28\n* * *\n\n\n29\n[N]ew section [1677e(b)] permits Commerce and the Commission to draw an adverse inference where a party has not cooperated in a proceeding. A party is uncooperative if it has not acted to the best of its ability to comply with requests for necessary information. Where a party has not cooperated, Commerce and the Commission may employ adverse inferences about the information to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.\n\n\n30\nSAA at 869-70, reprinted in 1994 U.S.C.C.A.N. 4040, 4198-99. Thus, the legislative history mirrors the language in the statute by recognizing that: (1) Commerce must use facts otherwise available when requested information is missing and (2) Commerce may impose an adverse inference after determining that a respondent has not been fully cooperative or has failed to act to the best of its ability in gathering information.\n\n\n31\nThe statute does not provide an express definition of \"the best of its ability.\" None of the parties argue that the language is ambiguous. Rather, they each dispute the plain meaning of the phrase. Appellants argue that the statute requires Commerce to determine (1) \"the best of [the respondent's] ability\" and (2) whether the respondent has met that standard. NSC criticizes that test, claiming that it amounts to a \"perfection standard.\" We disagree. The ordinary meaning of \"best\" means \"one's maximum effort,\" as in \"do your best.\" Webster's New Collegiate Dictionary 104 (1981). \"Ability\" refers to \"the quality or state of being able,\" especially \"physical, mental, or legal power to perform.\" Id. at 2. Thus, the statutory mandate that a respondent act to \"the best of its ability\" requires the respondent to do the maximum it is able to do.\n\n\n32\nBefore making an adverse inference, Commerce must examine respondent's actions and assess the extent of respondent's abilities, efforts, and cooperation in responding to Commerce's requests for information. Compliance with the \"best of its ability\" standard is determined by assessing whether respondent has put forth its maximum effort to provide Commerce with full and complete answers to all inquiries in an investigation. While the standard does not require perfection and recognizes that mistakes sometimes occur, it does not condone inattentiveness, carelessness, or inadequate record keeping. It assumes that importers are familiar with the rules and regulations that apply to the import activities undertaken and requires that importers, to avoid a risk of an adverse inference determination in responding to Commerce's inquiries: (a) take reasonable steps to keep and maintain full and complete records documenting the information that a reasonable importer should anticipate being called upon to produce; (b) have familiarity with all of the records it maintains in its possession, custody, or control; and (c) conduct prompt, careful, and comprehensive investigations of all relevant records that refer or relate to the imports in question to the full extent of the importers' ability to do so.\n\n\n33\nThe Court of International Trade concluded that \"[t]he fact that NSC did not make appropriately timely submissions as a result of inadequate inquiries ... only provides sufficient basis for the use of facts available pursuant to 19 U.S.C. \u00a7 1677e(a)(2)(B).\" Nippon II, 146 F.Supp.2d at 839. We disagree with that interpretation because it is predicated on an unduly stringent interpretation of 1677e(b) and, thus, fails to appreciate the proofs needed to trigger an adverse inference. To conclude that an importer has not cooperated to the best of its ability and to draw an adverse inference under section 1677e(b), Commerce need only make two showings. First, it must make an objective showing that a reasonable and responsible importer would have known that the requested information was required to be kept and maintained under the applicable statutes, rules, and regulations. See Ta Chen, 298 F.3d at 1336 (holding that Commerce reasonably expected importer to preserve records of accused antidumping activity). Second, Commerce must then make a subjective showing that the respondent under investigation not only has failed to promptly produce the requested information, but further that the failure to fully respond is the result of the respondent's lack of cooperation in either: (a) failing to keep and maintain all required records, or (b) failing to put forth its maximum efforts to investigate and obtain the requested information from its records. An adverse inference may not be drawn merely from a failure to respond, but only under circumstances in which it is reasonable for Commerce to expect that more forthcoming responses should have been made; i.e., under circumstances in which it is reasonable to conclude that less than full cooperation has been shown. While intentional conduct, such as deliberate concealment or inaccurate reporting, surely evinces a failure to cooperate, the statute does not contain an intent element. \"Inadequate inquiries\" may suffice. The statutory trigger for Commerce's consideration of an adverse inference is simply a failure to cooperate to the best of respondent's ability, regardless of motivation or intent.\n\n\n34\nThe Court of International Trade's requirement that Commerce show that NSC made more than \"a simple mistake\" or exercised a \"lack of due regard for its responsibilities in the investigation\" is likewise not supported by the statute. NSC suggests that under the facts of this case, Commerce should have evaluated NSC's overall pattern of behavior, examined the reasons for the initial mistake and subsequent correction, considered the \"inordinate pressures placed on NSC by Commerce's accelerated investigation schedule,\" and permitted NSC to explain the extenuating circumstances related to its initial response. Commerce certainly could have done that; however, section 1677e(b) does not by its terms set a \"willfulness\" or \"reasonable respondent\" standard, nor does it require findings of motivation or intent. Simply put, there is no mens rea component to the section 1677e(b) inquiry. Rather, the statute requires a factual assessment of the extent to which a respondent keeps and maintains reasonable records and the degree to which the respondent cooperates in investigating those records and in providing Commerce with the requested information. In preparing a response to an inquiry from Commerce, it is presumed that respondents are familiar with their own records. It is not an excuse that the employee assigned to prepare a response does not know what files exist, or where they are kept, or did not think\u2014through inadvertence, neglect, or otherwise to look beyond the files immediately available.\n\n\n35\nIn this case, it is undisputed that NSC triggered section 1677e(a) by failing to timely provide the conversion factor data to Commerce. The issue is whether NSC triggered section 1677e(b). Under the proper standard, substantial evidence supports Commerce's conclusion that NSC failed to act to the best of its ability in acquiring the conversion factor data. Commerce asked NSC for the data, and NSC responded that the information was not necessary for the investigation. Commerce asked again, and NSC responded that the information did not exist. Commerce concluded that NSC failed to act to the best of its ability and assigned an adverse margin to sales made by NSC upon a theoretical weight. Three days after assigning the adverse margin, NSC produced the information Commerce requested. NSC later explained that it never asked the actual factories for the information, and once it did, it was able to provide that information to Commerce.\n\n\n36\nFollowing the first remand in this case, Commerce set forth its opinion as to what efforts NSC could have put forth to comply with the \"best of its ability standard\" and concluded that NSC did not meet that standard in this case.\n\n\n37\nA \"reasonable respondent,\" acting to the \"best of its ability\" to comply with the Department's request for such [conversion factor data], would minimally have contacted the factory, where the steel coils were produced and where weighing was most likely to take place, to determine whether they were weighed and the weight data maintained. A \"reasonable respondent\" would have attempted to obtain the data when it was first requested, or at least when it was requested for the second time, rather than telling the Department, without any factual basis to support such a claim, that the respondent did not believe the Department needed the information. With respect to this issue, NSC was not acting as a \"reasonable respondent\" nor was it acting \"to the best of its ability,\" as required by the statute.\n\n\n38\nFinal Results of Redetermination Pursuant to Court Remand at 5 (Dec. 8, 2000). The second step of the test we set forth is subjective. While Commerce framed its response as an objective inquiry, Commerce's opinion of the level of cooperation this \"reasonable respondent\" provided was clearly a subjective assessment of NSC's abilities. The response refers to NSC's failure to look for the information at the factories and its initial insistence that Commerce did not actually need the requested information. Using different language, Commerce made the two showings required by the statute. First, Commerce showed, and NSC has not disputed, that the requested conversion factor data is the type of information required to be kept. Second, Commerce determined that NSC was able, but failed to fully investigate and obtain the requested information from the records kept by NSC at the factories where the steel was made.\n\n\n39\nBecause Commerce properly concluded that NSC failed to act to the best of its ability, Commerce's decision to apply an adverse inference was in accordance with law. 19 U.S.C. \u00a7 1677e(b). Commerce properly returned the untimely conversion factor data to NSC. See 19 C.F.R. \u00a7 351.302(d)(1) (1999) (\"[T]he Secretary will not consider or retain in the official record of the proceeding ... [u]ntimely filed factual information....\"). We need not reach the issue of whether, on remand, Commerce was precluded from evaluating the effects of the missing data because of the prohibition of using factual information returned to the respondent under 19 C.F.R. \u00a7 351.104. Thus, we vacate as moot the Court of International Trade's holding that 19 C.F.R. \u00a7 351.104(a) is not in accordance with law.\n\n\n40\nC. Use of Yen as the Starting Price for U.S. Sales\n\n\n41\nThe next issue is whether Commerce's calculation of the \"starting price\" of NSC's U.S. sales is supported by substantial evidence and otherwise in accordance with law. Unlike the adverse inference issue, Commerce is aligned with NSC rather than Bethlehem on this issue. Bethlehem argues that the correct \"starting price\" is the gross price stated in U.S. dollars on NSC's sales invoices. Commerce argues, and NSC agrees, that the \"starting price\" should be calculated by taking the net yen price actually received by NSC and converting it to dollars at the exchange rate effective on the shipment date. We hold that Commerce's methodology was not in accordance with law.\n\n\n42\nThe starting price is a component of the export price, which is explicitly defined in 19 U.S.C. \u00a7 1677a(a):\n\n\n43\nThe term \"export price\" means the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States, as adjusted under subsection (c) of this section.\n\n\n44\nIf the starting price is not in U.S. dollars, then Commerce is required to convert the starting price to dollars \"using the exchange rate in effect on the date of sale of the subject merchandise....\" 19 U.S.C. \u00a7 1677b-1(a) (2000). Under the facts of this case, Commerce's methodology conflicts with the plain language of the statute.\n\n\n45\nNSC and its customers agreed to a sales price in U.S. dollars. On the date of sale (the day the merchandise was shipped), the only price agreed to by the buyer and seller was the U.S. dollar price. The U.S. customer then paid NSC an amount of yen equal to the agreed upon U.S. net price based on the exchange rate in effect on the ninth day following shipment. Depending on the direction of exchange rate fluctuations between the shipping date and nine days following that, either the buyer or seller would benefit from the change, but the sales price in U.S. dollars remained constant.\n\n\n46\nThe methodology employed by Commerce requires that the agreed U.S. dollar sales price be converted twice. The first conversion used by Commerce is the conversion from the U.S. dollar sales price to yen at the exchange rate effective on the ninth day following shipping. The second conversion is the conversion from yen back to U.S. dollars at the exchange rate effective on the day of shipment. Commerce argues that its methodology is a better reflection of what NSC actually charges for steel. The net yen amount found on the invoices is the amount of money actually received from the customer. We are sympathetic to Commerce's position. As a policy matter, Commerce's interpretation is appealing. However, because the language of the statute is unambiguous, this is not an area where the agency is afforded deference for its interpretation of the statute. The only \"price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation\" is the U.S. dollar price found on the invoice. Commerce's methodology uses a price determined nine days after the merchandise is first sold. The unambiguous language of the statute does not allow that, and the Court of International Trade erred by affirming Commerce's methodology.\n\nCONCLUSION\n\n47\nCommerce's decision to apply partial adverse facts available upon NSC for its failure to timely submit the weight conversion data is supported by substantial evidence and is otherwise in accordance with law. Commerce's methodology of calculating the starting price is not in accordance with law. To the extent that the Court of International Trade held the opposite on those issues, we reverse. We vacate as moot the Court of International Trade's holding that 19 C.F.R. \u00a7 351.104(a) is invalid. The case is remanded for further proceedings not inconsistent with this opinion.\n\n\n48\n\nREVERSED-IN-PART, VACATED-IN-PART, AND REMANDED\n\n\nCOSTS\n\n49\nNo costs.\n\n"} -{"text": "\n412 B.R. 15 (2009)\nIn re LATIN AMERICAN ROLLER CO., Debtor.\nLatin American Roller Co., Plaintiff\nv.\nCooperativa De Seguros Multiples De Puerto Rico, Defendant.\nBankruptcy No. 07-06101(ESL). Adversary No. 08-0007.\nUnited States Bankruptcy Court, D. Puerto Rico.\nJanuary 29, 2009.\n*18 Fausto D. Godreau Zayas, Rafael A. Gonzalez Valiente, Latimer, Biaggi, Rachid & Godreau, San Juan, PR, for Plaintiff.\nVictor J. Casal Vazquez, San Juan, PR, for Defendant.\n\nOPINION AND ORDER\nENRIQUE S. LAMOUTTE, Bankruptcy Judge.\nLatin American Roller Co. (the \"Debtor\") filed a Chapter 11 petition on October 18, 2007, Case No. 07-0610, and subsequently filed the instant complaint against Cooperativa de Seguros Multiples de Puerto Rico (\"Cooperativa\") on January 18, 2008. An amended complaint was filed on March 28, 2008. At the status conference held on August 1, 2008 the parties were directed to brief if the claims for relief in the amended complaint were core or non core matters. After considering the legal memoranda filed by the parties the court concludes that the causes of action in the amended complaint are non-core but otherwise related to the above captioned bankruptcy case.\n\nBackground\nThe Debtor operates a cardboard tubes manufacturing plant in Rio Grande, P.R., The Debtor had a commercial property and casualty insurance policy to protect against property damage and business losses provided by Cooperativa; policy No. CPP-0506039-6/000 (the \"Policy\"). The Policy was in effect from May 30, 2006 to May 30, 2007.\nOn or about October 19, 2006, a fire broke out in the Debtor's business premises, damaging several parts of the business, including manufacturing and office equipment, and supplies.[1] The Debtor filed claims for reimbursement for damage to offices supplies and raw materials. Cooperativa reimbursed these claims. The Debtor also filed a claim for the repair and cleanup work done to the facility. Cooperativa partially reimbursed this claim. The amended complaint centers around Cooperativa's alleged failure and/or refusal to reimburse the Debtor for losses to the manufacturing plant and equipment, and for $13,485 in cleanup work expenses. The Debtor submitted an expert report regarding the nature and scope of the damage to the manufacturing plant and equipment, and claims to have complied with the policy's claim filing requirements. Pursuant to the terms of the policy, the Debtor is entitled to reimbursement for the \"replacement value\" (i.e., today's value without reference to original cost or depreciation) for property that was damaged \"beyond repair\" (or total loss). Property is considered damaged beyond repair if the cost of fixing it is more than the replacement value. The Debtor claims that the content of its expert's damage report satisfies *19 the criteria for coverage under the policy. Consequently, the Debtor raises the following three claims for relief in the amended complaint:\n1) for the turnover of $254,691 in various types of damage/loss claims resulting from coverage under the policy, matured and payable on demand, plus $12,000 a month in continuing damages for loss of income until the new equipment is installed and for six additional months for the stabilization of the business, pursuant to 11 U.S.C. \u00a7 542(b);\n2) for breach of insurance contract (P.R.Civ.Code articles 1041-1062, 32 LPRA \u00a7\u00a7 2991-3026), the sum of $254,691 plus legal interest and $12,000 a month in continuing damages for loss of income until the new equipment is installed and for six additional months for the stabilization of the business;\n3) for extra-contractual damages (P.R.Civ.Code article 1082, 32 LPRA \u00a7 5141), the sum of $1,098,941, plus legal interest and $12,000 a month until the new equipment is installed and for six additional months for the stabilization of the business, plus $1,000,000 in \"punitive damages\".\nThe Debtor alleges that the first two claims for relief are core matters. The first, because it is brought under section 542 of the Bankruptcy Code. As to the second, Debtor concedes that normally a cause of action based on a breach of contract is considered to be non-core. However, the Debtor argues that several circuits, particularly the Second Circuit, have held that insurance policies are assets of the estate, and the determination of rights under the policies is essential to the administration of the estate, and consequently these actions are considered core proceedings pursuant to 28 U.S.C. \u00a7 157(b)(2)(A). The Debtor maintains that this insurance claim is the main asset of the estate and that this is a breach of contract that is still occurring post-petition, thus this is a core proceeding under the holding of United States Lines, Inc. v. American Steamship Owners Mutual Protection an Indemnity Assoc., Inc. (In re United States Lines, Inc.), 197 F.3d 631 (2nd Cir.1999). The Debtor argues that the third cause of action is non core related to, as it invokes art 1802 of the Civil Code of Puerto Rico. As to this third claim for relief the Debtor submits that the bankruptcy court need not abstain and it may submit its proposed findings of fact and conclusions of law to the district court.\nCooperativa denies that this is a core proceeding because in the absence of bankruptcy these actions would have been brought before the Office of the Insurance Commissioner of Puerto Rico and/or the Superior Court of Puerto Rico, and suggests that the actions should be dismissed. As to the first cause of action Cooperativa argues that the Debtor did not comply with the terms and conditions of the insurance policy in its claims of loss and for that reason the claim cannot be matured and payable on demand, hence, the turnover action falters. They further state that it is an action based on state law arising before the bankruptcy was filed thereby being a non core matter according to the First Circuit case of In re Arnold Print Works, Inc., 815 F.2d 165 (1st Cir.1987). As to the second cause of action Cooperativa alleges that because it would survive outside of bankruptcy, it is a non core matter. Cooperativa does not consent to this court hearing this matter. And in conclusion, Cooperativa submits that this court may choose to discretionally abstain from hearing this case for reasons of justice, comity with state courts or respect for state law, pursuant to 28 U.S.C. \u00a7 1334(c)(1), because the applicable law is state law and the Superior Court of Puerto Rico or the *20 Office of the Insurance Commissioner will be a more appropriate forum to entertain and adjudicate the case.\n\nDiscussion\n\nCore and `related' proceedings\nFederal courts have jurisdiction over bankruptcy cases pursuant 28 U.S.C. \u00a7 1334, which provides in subsection (a) that the district courts have original and exclusive jurisdiction over \"cases under title 11\" (such as the bankruptcy petition itself), and in subsection (b) that the district courts have original but not exclusive jurisdiction over \"proceedings arising under title 11, or arising in, or related to cases under title 11\". Pursuant to 28 U.S.C. \u00a7 157(a), the district courts may refer to the bankruptcy courts any or all cases and proceedings arising under title 11 or proceedings arising in or related to a case under title 11[2]. Cases under title 11 and \"core proceedings\" arising under or arising in cases under title 11 constitute the bankruptcy court's \"core\" jurisdiction. 28 U.S.C. \u00a7 157(b)(1); Concerto Software, Inc. v. Vitaquest International Inc., 290 B.R. 448, 452 (D.Maine 2003). \"[C]ore proceedings are integral to the core bankruptcy function of restructuring debtor-creditor rights.\" In re Arnold Print Works, Inc., 815 F.2d 165, 167 (1st Cir. 1987). Subsection 157(b)(2) sets forth a non-exhaustive list enumerating sixteen actions that constitute core proceedings which fall into five categories, to wit, 1) matters of administration, 2) avoidance actions, 3) matters concerning property of the estate, 4) omnibus categories and 5) cases filed under chapter 15 of the Bankruptcy Code. 1 Alan N. Resnick and Henry J. Sommer, Collier on Bankruptcy, \u00b6 3.02[3] at 3-35 (15th Ed. Rev'd 03/2008).\nThe statute distinguishes between cases \"arising under\", \"arising in\" (core) and \"related to\" (non-core) proceedings under title 11, although it provides no definitions. \"`Arising under' proceedings have been interpreted as those cases in which the cause of action is created by title 11, as are a claim of exemptions under 11 U.S.C. \u00a7 522 and any action by a trustee under an avoiding power.\" In re Middlesex Power Equipment & Marine, Inc., 292 F.3d 61, 68 (1st Cir.2002); 1-3 Collier on Bankruptcy \u00b6 3.01[4][c][i]. \"`Arising in' proceedings are those that are not based on any right expressly created by title 11, but nevertheless, would have no existence outside of the bankruptcy.\" Middlesex, 292 F.3d at 68 (citation omitted). \"Claims that `arise in' a bankruptcy case are claims that by their nature, not their particular factual circumstance, could only arise in the context of a bankruptcy case.\" Marotta Gund Budd & Dzera LLC v. Costa, 340 B.R. 661, 666 (D.N.H.2006) (citation omitted).\n`Related to' proceedings are \"the broadest of the potential paths to bankruptcy jurisdiction.\" In re Seven Fields Development Corp., 505 F.3d 237, 257 (3rd Cir.2007). \"[B]ankruptcy courts ordinarily may exercise related to jurisdiction as long as the outcome of the litigation potentially could have some effect on the bankruptcy estate, such as altering debtor's rights, liabilities, options, or freedom of action, or otherwise have an impact upon the handling and administration of the bankrupt estate.\" In re Boston Regional Medical Center, Inc., 410 F.3d 100, 105 (1st Cir. 2005); In re G.S.F. Corp., 938 F.2d 1467, 1475 (1st Cir.1991). If the determination of the case could have an effect on the bankruptcy estate, it is a related matter. *21 Id. citing Pacor v. Higgins, 743 F.2d 984, 994 (3d Cir.1984).\nThe determination of the bankruptcy court's \"core\" or \"related to\" jurisdiction is committed to the judgment of the court, and it shall not be affected solely because resolution of the proceeding may be affected by state law. 28 U.S.C. \u00a7 157(b)(3); In re Arnold Print Works, Inc., 815 F.2d 165, 169 (1st Cir.1987). If a bankruptcy judge chooses to hear a non-core proceeding, also referred to as a `related' proceeding, the judge shall submit proposed findings of fact and conclusions of law to the district court, subject to de novo review by such court. 28 U.S.C. \u00a7 157(c)(1). However, a bankruptcy judge may enter final orders and judgments concerning `related' matters if all parties to the proceeding have consented. 28 U.S.C.A. \u00a7 157(c)(2); In re G.S.F. Corp., 938 F.2d 1467, 1477 (1st Cir. 1991).\nThese classifications and parameters were introduced by the Bankruptcy Amendments and Federal Judgeship Act of 1984 (\"BAFJA\") as a result of the landmark decision by the Supreme Court in the case of Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982). The Supreme Court held unconstitutional the grant of Article HI judicial powers upon non-tenured Article I courts. Article I judges do not have the constitutional power to enter final orders without the parties' consent in traditionally common law cases involving state-created private rights. As a result of this decision, the bankruptcy court may not enter a final determination in those cases that are classified as non-core related matters. The Marathon decision, however, has been given a narrow interpretation by subsequent Supreme Court opinions, In re Arnold, 815 F.2d at 166, citing Thomas v. Union Carbide Agricultural Products Co., 473 U.S. 568, 105 S.Ct. 3325, 87 L.Ed.2d 409 (1985) and Commodity Futures Trading Com. v. Schor, 478 U.S. 833, 106 S.Ct. 3245, 92 L.Ed.2d 675 (1986).\nIn Arnold the Court of Appeals for the First Circuit differentiates Marathon-type contract claims arising pre-petition from the ones arising post-petition. In Arnold the First Circuit stated that if the claim arises after the filing of the petition it involves a matter directly related to the administration of the estate; thus, it is a core matter upon which a bankruptcy judge has the power to enter final orders. On the other hand, if the claim arose before the filing of the petition it is only a related case and a bankruptcy judge is limited to submit proposed findings of fact and conclusions of law to the district court. \"It should be clear that actions to collect prepetition accounts receivable are straightforward Marathon-type [`related'] contract actions and are, thus, not core proceedings. However, courts have used sections ... 157(b)(2)(E) (turnover) ... to obliterate Marathon. These cases ... should not be followed.\" 1 Collier on Bankruptcy \u00b6 3.02[4].\nThere is `related' jurisdiction in this case because the Debtor's claim on the policy is an asset of the estate, which includes all of the Debtor's legal or equitable interests in property as of the commencement of the case. 11 U.S.C. \u00a7 541(a)(1). To the extent that any recovery on these claims will fund the plan and contribute to the Debtor's rehabilitation, such claims are related to the Debtor's case. To the extent that resolution of the Debtor's insurance claim could conceivably have any effect on the estate or could alter the Debtor's rights, liabilities, options or freedom of action, this case falls within the court's \"related to\" jurisdiction. See, Pacor, Inc. v. Higgins, 743 F.2d at 994. Thus, Cooperativa's contention that this *22 court is not a proper forum to hear this case is misplaced.\nNevertheless, the Debtor's insurance claim could have been brought and would have survived in the appropriate state forum, absent the bankruptcy case, In this case, the Debtor had property insurance and wants to recover for apparent losses allegedly covered by the insurance policy. Factually similar cases reveal that in situations where a debtor is making a pre-petition claim under a property insurance policy against an insurer that is contesting liability, such a claim is not a \"turnover\" action and does not support core proceeding jurisdiction. See, e.g., In re R.I. Lithograph Corp., 60 B.R. 199 (Bkrtcy.D.R.1.1986) (action by debtor against insurer to recover for losses under a property insurance policy was not a core proceeding where insurer contested liability); Matter of Pied Piper Casuals, Inc., 65 B.R. 780 (S.D.N.Y.1986) (holding that a debtor's action for reimbursement under a theft insurance policy was not a core proceeding in a case where the insurer contested coverage, because the alleged debt was not a matured obligation payable on demand).\nIf the insurer is contesting liability, the debtor's action is not a `turnover' proceeding and thus not core. \"A turnover action can only be considered a core proceeding when the purpose of the proceeding is to obtain the turnover of property or the collection of a matured debt, rather than the creation, recognition, or liquidation of a debt. When a bona fide dispute exists as to liability involving state law, then the proceeding is not core.\" 2 Bankruptcy Desk Guide \u00a7 14:81 (2008). After all, \"not every cause of action demanding money damages or payment of sums due under a contract should be construed as a turnover action ... [A] debtor's suit against an insurer to recover for losses covered under a policy is not a turnover proceeding where the insurer disputes liability.\" 9 Am.Jur.2d Bankruptcy \u00a7 788 (2008) (citing Pied Piper & Lithograph Corp.) \"[A]s long as there is some doubt as to the defendant's liability[,]\" the action cannot be considered a turnover action. In re Mec Steel Bldgs., Inc., 136 B.R. 606, 610 (Bankr.D.P.R.1992).[3]\nThe claims for relief raised in the amended complaint are non-core `related' matters to the bankruptcy case. As discussed above, the first cause of action cannot be considered a `turnover' action as it does not seek to collect a \"matured, payable on demand, or payable on order\" debt as required by 11 U.S.C. \u00a7 542. The second and third cause of action exist independently of the bankruptcy. They are ordinary, Marathon-type, pre-petition breach of contract actions. Therefore, this court is limited to submit its `proposed findings of fact and conclusions of law' to the district court. 28 U.S.C. \u00a7 157(c)(1).\n\nAbstention\nThe discretionary abstention provision of 28 U.S.C. \u00a7 1334(c)(1) provides that the district court may abstain from hearing a particular proceeding \"arising under title 11 or arising in or related to a case under title 11\" if to do so would be \"in the interest of justice, or in the interest of comity with State courts or respect for State law\". See Middlesex, 292 F.3d at 69 (citation omitted). The *23 Supreme Court in the case of Thompson v. Magnolia Petroleum Co., 309 U.S. 478, 60 S.Ct. 628, 84 L.Ed. 876 (1940) reaffirmed the principle that the bankruptcy court had \"an exclusive and nondelegable control over the administration of an estate\" but \"the proper exercise of that control may, where the interests of the estate and the parties will best be served, lead the bankruptcy court to consent to submission to state courts of particular controversies involving unsettled questions of state property law and arising in the course of bankruptcy administration.\" 309 U.S. at 483-484, 60 S.Ct. 628; 1 Collier on Bankruptcy \u00b6 3.05[1]. In affirming the bankruptcy court's decision to abstain the First Circuit Court of Appeals in Middlesex, the First Circuit Court of Appeals observed that the bankruptcy court \"took into account judicial economy and comity\", \"noted that the issues between the parties had already been fully litigated in the [state] court\", stated that the party moving the court \"essentially ask this court to review a final judgment of the state court\" and commented on \"`avoidance of forum shopping'\". Middlesex, 292 F.3d at 69. \"This discretionary abstention is intended to soften the tensions inherent in a system that contemplates parallel judicial processes.\" In re Texaco, 77 B.R. 433, 437-438 (Bankr.S.D.N.Y.1987) (citation omitted). Cooperativa has failed to raise grounds warranting discretionary abstention from this proceeding. The only grounds raised by Cooperativa in favor of abstention is that state law must be applied, no reference to unsettled questions of state law is made. State law is applied in bankruptcy proceedings routinely, as in order to determine the nature and existence of property rights reference must made to state law. William Norton, Jr., Norton Bankruptcy Law and Practice 3d \u00a7 4:119 (Thomson Reuters/West 2008). Without more, discretionary abstention is not applicable in this case.\n\nWithdrawal of Reference\nSection 157(d) of the Judicial Code provides in part that \"[t]he district court may withdraw, in whole or in part, any case or proceeding referred under this section, on its own motion or on timely motion of any party, for cause shown.\" 28 U.S.C. \u00a7 157(d). In determining whether cause exists to withdraw reference of a case, courts have examined the following factors: judicial economy, whether withdrawal will promote uniformity of bankruptcy administration, reduction of forum shopping and confusion, conservation of debtor and creditor resources, expedition of the bankruptcy process and whether jury trial has been requested. Holland America Insurance Co. v. Succession of Roy, 777 F.2d 992 at 999 (5th Cir.1985) The analysis of judicial economy depends largely on whether the claims asserted are core or non-core; \"it is upon this issue that questions of efficiency and uniformity will turn.\" In re Orion Pictures Corp., 4 F.3d 1095, 1101 (2d Cir.1993).\n\nConclusion\nThe claims for relief in the amended complaint are non core `related' matters which may be heard by this court but may not be finally resolved by a bankruptcy judge. Therefore, cause exists under 28 U.S.C. \u00a7 157(d) for the withdrawal of reference of these claims. This court hereby recommends that reference be withdrawn in this adversary proceeding. The Clerk of the Bankruptcy Court shall certify to the United States District Court for the District of Puerto Rico its recommendation for the withdrawal of reference of the present case.\nSO ORDERED.\nNOTES\n[1] On page 3 of the amended complaint (Dkt. 6), the Debtor mistakenly states that the fire occurred on October 19, 2007, that is, one day after the petition date of October 18, 2007. However, as per other documents filed, both parties agree that the fire broke out on October 19, 2006, one year before the petition date. (See, Dkt. 6 Main Document at 9, \u00b6 37; Dkt. 6, Exhibit, page 9, Fire Report dated October 19, 2006; Dkt. 26 at 2, \u00b6 4; 31 at 2, \u00b6 10).\n[2] As provided by L.Civ.R. 77.2, pursuant to 28 U.S.C. \u00a7 157(a) and the District Court's Resolution of July 19, 1984, the District Court of Puerto Rico has referred all cases and proceedings in bankruptcy to the Bankruptcy Court for the District of Puerto Rico.\n[3] Other insurance-related actions that did not involve disputed claims for reimbursement brought by a debtor against an insurer have nonetheless also been treated as non core proceedings. See, In re Baldwin-United Corp., 52 B.R. 541 (Bkrtcy.S.D.Ohio 1985) (declaratory action regarding debtor's right to indemnification not a core proceeding); In re Ramex International, Inc., 91 B.R. 313 (E.D.Pa.1988) (declaratory action regarding coverage not a core proceeding).\n"} -{"text": "\n350 So.2d 771 (1977)\nJohn Roy PETERSON\nv.\nSTATE.\n6 Div. 403.\nCourt of Criminal Appeals of Alabama.\nOctober 4, 1977.\n*772 William M. Dawson, Jr., Birmingham, for appellant.\nWilliam J. Baxley, Atty. Gen. and C. Lawson Little, Asst. Atty. Gen. for the State.\nBOWEN, Judge.\nThe appellant was indicted by a Grand Jury of Jefferson County for the first degree murder of James McBride. A jury found the appellant guilty of murder in the second degree and fixed his punishment at thirty years imprisonment. Retained trial counsel was appointed to represent the appellant on this appeal.\nThe facts of this case need not be set out in detail. The evidence produced by the state revealed that on the evening of March 15, 1976, the appellant and the deceased were drinking at Minniefield's shot house in Birmingham, Alabama. An argument developed between the two men when the deceased would not loan or give the appellant two dollars. Angered, the appellant left the drinking establishment only to return within a short time with three other men and again asked the deceased for the two dollars. When the deceased refused, the appellant shot him as the deceased was rising from his seat.\nThe appellant claimed that he shot the deceased in self-defense when the deceased advanced toward him with a knife. Although the appellant admitted that he and the deceased had been arguing, he denied asking the deceased for any money.\n\nI\nInitially the appellant argues that his motion for a new trial was due to be granted because the evidence did not justify a conviction of second degree murder. The argument presented by counsel is more properly reserved for presentation to a jury. It is not within the province of the Court of Criminal Appeals to pass judgment on the truthfulness of conflicting evidence, May v. State, Ala.Cr.App., 335 So.2d 242 (1976), or to disturb the verdict of the jury where the evidence is conflicting. Parham v. State, Ala.Cr.App., 333 So.2d 912, cert. denied, Ala., 333 So.2d 915, and 429 U.S. 963, 97 S.Ct. 393, 50 L.Ed.2d 332 (1976). The weight and credence to be given the testimony of the defendant as to the issue of self-defense is a question for the jury. Moore v. State, 54 Ala.App. 22, 304 So.2d 263, cert. denied, 293 Ala. 768, 304 So.2d 268 (1974); 11A Alabama Digest, Homicide, 276.\n\nII\nIt is argued that the photographs of the deceased which were taken at the hospital after his death were improperly admitted into evidence because they lacked probative value because the fact that the deceased was shot was never denied, because they reflected the condition of the accused after surgery and profound swelling and because they were gruesome.\n*773 It is clear that, in a charge of homicide, the state may introduce a duly authenticated photograph of so much of the victim's body as is necessary to show the wounds inflicted by the accused. Gamble, McElroy's Alabama Evidence, 3rd Ed. \u00a7 207.01(2), p. 459, citing authorities.\nAs the photographs in question showed the portion of the victim's body where the wound had been inflicted, they were relevant as shedding light on the character and location of the wound and corroborating the testimony of the medical doctor and the toxicologist, even though they were cumulative and there was no dispute as to the location of the wound. Farris v. State, 57 Ala.App. 390, 328 So.2d 640 (1976); Robinson v. State, Ala.Cr.App., 335 So.2d 420, cert. denied, Ala., 335 So.2d 426 (1976).\nThe marks resulting from the surgery to the deceased were sufficiently identified to the jury and distinguished from the wounds caused by the bullet. Where a photograph of the deceased depicts not only the wound which allegedly caused death but also depicts a surgical incision such photograph is not rendered inadmissible because of the depiction of the surgical incision where the incision is clearly identified. Hurst v. State, 277 Ala. 686, 174 So.2d 325 (1965); Maness v. State, 57 Ala.App. 431, 329 So.2d 120, cert. denied, 295 Ala. 411, 329 So.2d 126 (1976); Means v. State, 51 Ala. App. 8, 282 So.2d 356, cert. denied, 291 Ala. 792, 282 So.2d 359 (1973).\nThe photographs depicted the entrance and exit wounds of the bullet. In the process of entering the right thigh of the deceased and exiting the left thigh, the bullet passed through the scrotum injuring and severing a number of blood vessels causing the scrotum itself to swell to a grotesque size. The photographs were in fact gruesome. However this fact is not, without more, an appropriate ground upon which to exclude a photograph from evidence. Davis v. State, Ala.Cr.App., 333 So.2d 168 (1976); Brown v. State, Ala.Cr. App., 331 So.2d 820 (1976).\n\"Gruesomeness becomes objectionable in a photograph only where there is distortion of either of two kinds; first, distortion of the subject matter as where necroptic or other surgery causes exposure of non-probative views, e. g. `massive mutilation', McKee v. State, 33 Ala.App. 171, 31 So.2d 656; or, second, focal or prismatic distortion where the position of the camera vis-a-vis the scene or object to be shown gives an incongruous result, e. g., a magnification of a wound to eight times its true size, Wesley v. State, 32 Ala.App. 383, 26 So.2d 413.\" Metcalf v. State, 40 Ala.App. 25, 33,108 So.2d 435, 443 (1958).\nNeither kind of distortion is present in this case. The pictures were not due to be excluded because they depicted the sexual organs of the deceased. Cobern v. State, 273 Ala. 547, 142 So.2d 869 (1962). For these reasons the pictures were properly admitted.\n\nIII\nThe appellant complains that the trial court erred in not allowing individual questioning of the jurors at the time when the jurors were being qualified. The appellant contends that this individual questioning was necessitated by a newspaper article which appeared on the very morning the jury was to be qualified. The article was entitled \"`Good time' law riles law enforcers\" and expressed the \"simple, unbelieving outrage\" of law enforcement over the new \"good time\" law which would allow prisoners to earn time off for good behavior at the rate of two days for each day served and when coupled with the existing law which was not repealed, would allow prisoners to be eligible for parole consideration after serving one-third of their sentences. The appellant contends that any juror that read the article would be prejudiced into giving a harsher sentence.\nAfter the trial court denied defense counsel's motion to question the jurors individually, counsel did not attempt to question the venire on the newspaper article stating that \"asking these questions in front of the whole venire cannot help but raise doubts in those people who have read the article\".\n*774 Examination of jurors takes place \"under the direction of the court\". Title 30, \u00a7 52, Code of Alabama 1940, Recompiled 1958. The accused has no absolute right to personally interrogate each prospective juror. Bales v. State, 63 Ala. 30 (1879); Lundy v. State, 91 Ala. 100, 9 So. 189 (1890); Burns v. State, 226 Ala. 117, 145 So. 436 (1932); Annotation: Right of Counsel in Criminal Cases Personally to Conduct the Voir Dire Examination of Prospective Jurors. 73 A.L.R.2d 1187, \u00a7 7 at 1203. This is within the sound discretion of the trial judge and his ruling will not be disturbed on appeal absent an abuse of that discretion. Clark v. State, 294 Ala. 493, 318 So.2d 822 (1975); Gilliland v. State, 291 Ala. 89, 277 So.2d 901 (1973).\nThe preferred procedure to follow is to allow counsel to ask his questions of the group of prospective jurors as a whole and then allow counsel to ask other questions of a particular juror, if requested, if any juror should give an answer which would call for more information. Massey v. State, 49 Ala. App. 345, 272 So.2d 271, cert. denied, 289 Ala. 747, 272 So.2d 278 (1972).\nFrom the record it does not even appear that defense counsel asked the jurors whether they had read that particular edition of the morning newspaper. If counsel had done so and received an affirmative answer from any juror he could have then requested to be allowed to individually examine that juror out of the presence of the others. This issue was raised on the motion for new trial and no evidence, either by testimony or affidavit, was presented showing that any juror even read the alleged prejudicial article.\nEven if a prospective juror had read the article it would not constitute a challenge for cause. The article itself made no mention of the appellant nor the crime with which he was charged. The actual punishment imposed by the jury (thirty years for second degree murder) was well within the range of their discretion and does not appear to be unusually harsh.\nBecause defense counsel was permitted to examine the jury venire as a whole and in view of the fact that it had not even been shown that any prospective juror read the edition of the newspaper containing the alleged inflammatory article, we conclude that the trial judge did not abuse his discretion in refusing the appellant's request to examine each juror individually. McPherson v. State, 271 Ala. 533, 125 So.2d 709 (1961); Aaron v. State, 273 Ala. 337, 139 So.2d 309 (1962).\nMindful of our duty under Title 15, \u00a7 389, Code of Alabama 1940, Recompiled 1958, we have examined the record for any reversible error, whether called to our attention or not. We find no reversible error and the judgment of the trial court is due to be affirmed.\nAFFIRMED.\nAll Judges concur.\n"} -{"text": " ACCEPTED\n 03-14-00738-CV\n 6105954\n THIRD COURT OF APPEALS\n AUSTIN, TEXAS\n 7/16/2015 5:20:51 PM\n JEFFREY D. KYLE\n CLERK\n Oral Argument Requested\n\n No. 03-14-00738-CV FILED IN\n 3rd COURT OF APPEALS\n AUSTIN, TEXAS\n In The Court of Appeals 7/16/2015 5:20:51 PM\n For The Third District of Texas JEFFREY D. KYLE\n at Austin Clerk\n\n\nElness, Swenson, Graham \u00a7 From the 200th District Court\nArchitects, Inc., \u00a7\nAppellant and Cross-Appellee, \u00a7\n \u00a7\nv. \u00a7\n \u00a7\nRLJ II-C Austin Air, LP, \u00a7\nRLJ II-C Austin Air Lessee, LP \u00a7\nand RJL Lodging Fund II \u00a7\nAcquisitions, LLC, \u00a7\nAppellees and Cross-Appellants. \u00a7 Of Travis County, Texas\n\n\n CROSS-APPELLANTS\u2019 REPLY BRIEF\n\n\nMUNSCH, HARDT, KOPF\n& HARR, P.C.\n\nMichael W. Huddleston Benton T. Wheatley\nState Bar No: 10148415 State Bar No. 24015171\nJ. Stephen Gibson Tracy McCreight\nState Bar No: 07866000 State Bar No. 24037064\n3800 Ross Tower 401 Congress Avenue\n500 North Akard Street Suite 3050\nDallas, Texas 75201 Austin, TX 78701\n214-855-7500 telephone 512-391-6100 telephone\n214-855-7584 facsimile 512-391-6149 facsimile\n\nATTORNEYS FOR APPELLEES,\nCROSS-APPELLANTS\n\f IDENTITY OF PARTIES AND COUNSEL\n The undersigned counsel of record, pursuant to Texas Rule of Appellate\n\nProcedure 38.2, certifies that the following persons have an interest in the outcome\n\nof this case:\n\nAppellant, Cross-Appellee: Elness, Swenson, Graham Architects, Inc.\nAppellant\u2019s, Cross-Appellee\u2019s Weston M. Davis\nCounsel on Appeal: Gregory N. Ziegler\n Steven R. Baggett\n Macdonald Devin, P.C.\n 1201 Elm Street\n 3800 Renaissance Tower\n Dallas, TX 75270\n\nAppellant\u2019s, Cross-Appellee\u2019s Weston M. Davis\nCounsel at Trial: Gregory N. Ziegler\n Matthew Mumm\n Macdonald Devin, P.C.\n 1201 Elm Street\n 3800 Renaissance Tower\n Dallas, TX 75270\n\nAppellees, Cross-Appellants: RLJ II-C Austin Air, LP\n RLJ II-C Austin Air Lessee, LP\n RLJ Lodging Fund II Acquisitions, LLC\n\nAppellees\u2019, Cross-Appellants\u2019 Michael W. Huddleston\nCounsel on Appeal: J. Stephen Gibson\n Munsch Hardt Kopf & Harr, P.C.\n 3800 Ross Tower\n 500 North Akard Street\n Dallas, Texas 75201\n\n\n\n\n ii\n\fAppellees\u2019, Cross-Appellants\u2019 Benton T. Wheatley\nCounsel at Trial: Tracy McCreight\n Munsch Hardt Kopf & Harr, P.C.\n 401 Congress Avenue\n Suite 3050\n Austin, TX 78701\n\n By: /s/ Michael W. Huddleston\n\n Attorney for Appellees, Cross-\n Appellants\n\n\n\n\n iii\n\f STATEMENT CONCERNING ORAL ARGUMENT\n Appellees and Cross-Appellants respectfully request oral argument in this\n\ncase. Appellees and Cross-Appellants respectfully submit that oral argument will\n\nassist the Court in resolving the issues necessary to decide this appeal.\n\n\n\n\n iv\n\f TABLE OF CONTENTS\nIdentity of Parties and Counsel ................................................................................. ii\nStatement Concerning Oral Argument .....................................................................iv\nTable of Contents .......................................................................................................v\nIndex of Authorities ............................................................................................... viii\nI. Joint and Several Liability Is Necessary For\n \u201cOne Satisfaction\u201d Settlement Credit. ............................................................. 1\n A. All Courts That Have Actually Considered Whether\n Joint and Several Liability Is Necessary Have Ruled That It Is. ......... 1\n B. The Joint and Several Liability Requirement Is Not Satisfied\n When There Is No Potential Joint and Several Liability. ..................... 4\n 1. Joint Contractual Liability Was Not Admitted\n In RLJ\u2019s Pleading. ....................................................................... 4\n a. Request to Impose Joint and Several Liability Included\n Request for Joint or Several Liability. .............................. 5\n 1) RLJ Was Seeking the Broadest Relief Possible,\n Not to Narrow the Relief Available. ...................... 5\n 2) The Architect Ignores RLJ\u2019s Intent Manifest in the\n Rest of the Prayer. .................................................. 5\n 2. The Request for Relief Did Not Clearly, Deliberately and\n Unequivocally Allege Joint Contractual Liability. ..................... 6\n a. Then-Pending Tort Claims Supported Request for\n Imposition of Joint and Several Liability. ........................ 7\n b. Specific Allegations Negated Joint or Common\n Contractual Duty. .............................................................. 7\n c. Joint and Several Liability Request Asserted a Legal\n Conclusion And Is Not a \u201cFact\u201d That Can Be\n Judicially Admitted........................................................... 8\n 3. The Architect Waived the Effect of Any Admission On\n Introduction of Evidence Showing No Joint Duty. .................... 9\n C. Potential Joint Contractual Liability Not Presumed From\n Any Failure to Allocate Damages. ......................................................10\n D. RLJ Had No Notice The Architect Would Claim Under the\n One Satisfaction Rule Credit for Contractual Liability Settlements... 11\n\n v\n\f 1. The Architect Only Pleaded Chapter 33 Tort Contribution,\n Not \u201cOne Satisfaction\u201d Settlement Contribution ......................11\n 2. Limiting Its Contribution Claim to Chapter 33 Only\n Prevents the Architect from Relying on Bases for\n Claiming Contribution. .............................................................12\n 3. Liberal Construction Is Not a License to\n Infer Claims Not Alleged. .........................................................12\n 4. There Was No Opportunity And No Need to Allocate............. 13\n E. Indivisible Injury Alone Does Not Establish Joint and Several\n Contractual Liability or the \u201cOne Satisfaction\u201d Settlement Credit. .... 15\nII. \u201cOne Satisfaction\u201d Settlement Credit Does Not Apply to\n Any Contractual Liability. .............................................................................18\n A. Beware the Multiple Uses of \u201cOne Satisfaction.\u201d...............................18\n 1. There Was No \u201cOne Satisfaction\u201d Settlement Credit\n Until After Article 2212 Was Enacted. .....................................20\n 2. The Cases Cited By The Architect Did Not Involve\n Settlement Credits. ....................................................................20\n 3. Utts Does Not Suggest That the \u201cOne Satisfaction\u201d\n Settlement Credit Existed at Common Law\n Before Article 2212...................................................................21\n B. This and Other Texas Courts Have Refused to Apply \u201cOne\n Satisfaction\u201d Settlement Credits to Contractual Liability. .................. 22\n C. CTTI Is Still Valid. ..............................................................................25\n 1. No Later Decision Expressly Limits or Overturns CTTI. ......... 25\n 2. Stare Decisis and En Banc Standards Make Sub\n SilentioOverruling of CTTI Both Unthinkable and Unlikely. .. 26\n 3. Pool May Potentially Conflict with CTTI, But Does Not\n Overrule It. ................................................................................27\n 4. Conflicts With Other Cases. .....................................................29\n D. Extension of \u201cOne Satisfaction\u201d Settlement Credit to\n Contractual Liability Prohibited by\n Texas Constitution Article I, Section 16. ............................................30\nIII. Conclusion .....................................................................................................31\nCertificate of Compliance ........................................................................................33\n\n\n vi\n\fCertificate of Service ...............................................................................................33\n\n\n\n\n vii\n\f INDEX OF AUTHORITIES\n\n Page(s)\nCASES\nAerospatiale Helicopter Corp. v. Universal Health Servs., Inc.,\n 778 S.W.2d 492 (Tex. App.\u2014Dallas 1989, writ denied) ..................................... 5\n\nAlvord v. Waggoner,\n 88 Tex. 615, 32 S.W. 872 (1895) .......................................................................21\nAMX Enters., Inc. v. Bank One, N.A.,\n 196 S.W.3d 202 (Tex. App.\u2014Houston [1st Dist.] 2006, pet. denied) ...............26\n\nAndrews v. Harvey,\n 39 Tex. 123 (1873)..............................................................................................21\nAustin Home Ctr. Associates v. State,\n 794 S.W.2d 593 (Tex. App.\u2014Austin 1990, no writ) .........................................27\nBarstow v. State,\n 742 S.W.2d 495 (Tex. App.\u2014Austin 1987, writ denied)..................................... 7\nBartley v. Guillot,\n 990 S.W.2d 481 (Tex. App.\u2014Houston [1st Dist.] 1999, pet. denied) ......... 24-25\nBd. of Ins. Comm\u2019rs of Tex. v. Guardian Life Ins. Co. of Tex.,\n 142 Tex. 630, 180 S.W.2d 906 (1944) ................................................................. 5\n\nBentley v. Bunton,\n 94 S.W.3d 561 (Tex. 2002)...................................................................................8\n\nBoulet v. State,\n 189 S.W.3d 833 (Tex. App.\u2014Houston [1st Dist.] 2006, no pet.) ..................9, 15\nBP Am. Prod. Co. v. Marshall,\n 288 S.W.3d 430 (Tex. App.\u2014San Antonio 2008),\n rev\u2019d on other grounds, 342 S.W.3d 59 (Tex. 2011) .....................................2, 24\n\nBroughton Assoc. Joint Venture v. Boudreaux,\n 709 S.W.3d 324 (Tex. App.\u2014Waco 2002, no pet.) ...........................................13\n\n\n\n\n viii\n\fBurke v. Union Pac. Res. Co.,\n 138 S.W.3d 46 (Tex. App.\u2014Texarkana 2004, pet. denied) ...............................29\n\nCBI NA-CON, Inc. v. UOP, Inc.,\n 961 S.W.2d 336 (Tex. App.\u2014Houston [1st Dist.] 1997, pet. denied) ............... 24\n\nCrown Life Ins. Co. v. Casteel,\n 22 S.W.3d 378 (Tex. 2000)..........................................................................passim\n\nCTTI Priesmeyer, Inc. v. K&O Limited Partnership,\n 164 S.W.3d 675 (Tex. App.\u2014Austin 2005, no pet.) ...................................passim\n\nCunningham v. Haroona,\n 382 S.W.3d 492 (Tex. App.\u2014Fort Worth 2012, pet. denied) ............................30\n\nEl Paso Nat. Gas v. Berryman,\n 858 S.W.2d 362 (Tex. 1993) .................................................................. 19, 29-30\nElliott v. Newsom,\n No. 01-07-00692-CV, 2009 WL 214551\n (Tex. App.\u2014Houston [1st Dist.] Jan. 29, 2009, no pet.)(mem. op.) .................... 9\n\nEmerson Elec. Co. v. Am. Permanent Ware Co.,\n 201 S.W.3d 301 (Tex. App.\u2014Dallas 2006, no pet.) ..........................................30\n\nFairfield Ins. Co. v. Stephens Martin Paving LP,\n 246 S.W.3d 653 (Tex. 2004) ..............................................................................31\nFina Supply, Inc. v. Abilene Nat\u2019l Bank,\n 726 S.W.2d 537 (Tex. 1987) ..............................................................................19\n\nFirst Title Co. of Waco v. Garrett,\n 860 S.W.2d 74 (Tex. 1993)..........................................................................passim\n\nFlowers v. Flowers,\n 407 S.W.3d 452 (Tex. App.\u2014Houston [14th Dist.] 2013, no pet.) ................... 12\n\nGalle, Inc. v. Pool,\n 262 S.W.3d 564 (Tex. App.\u2014Austin 2008, pet. denied) ............................passim\nGE Capital Commercial Inc. v. Worthington Nat\u2019l Bank,\n 754 F.3d 297 (5th Cir. 2014) ............................................................................2, 9\n\n\n\n ix\n\fGoggin v. Grimes,\n 969 S.W.2d 135 (Tex. App.\u2014Houston [14th Dist.] 1998, no pet.) ................... 16\n\nGriffin v. Superior Ins. Co.,\n 161 Tex. 195, 338 S.W.2d 415 (1960) ................................................................. 7\n\nGym-N-I Playgrounds, Inc. v. Snider,\n 220 S.W.3d 905 (Tex. 2007) ..............................................................................30\n\nHennigan v. I.P. Petroleum Co.,\n 858 S.W.2d 371 (Tex. 1993) ................................................................................ 7\n\nHeritage Gulf Coast Properties, Ltd. v. Sandalwood Apartments, Inc.,\n 416 S.W.3d 642 (Tex. App.\u2014Houston [14th Dist.] 2013, no pet.) ................... 12\n\nHighlands Ins. Co. v. Currey,\n 773 S.W.2d 750 (Tex. App.\u2014Houston [14th Dist.] 1989, writ denied) .............. 6\nHorizon Offshore Contractors, Inc. v. Aon Risk Servs. of Tex., Inc.,\n 283 S.W.3d 53 (Tex. App.\u2014Houston [14th Dist.] 2009, pet. denied) ............... 19\nHorizon/CMS Healthcare Corp. v. Auld,\n 34 S.W.3d 887 (Tex. 2000)...................................................................................6\nHouston First Am. Sav. v. Musick,\n 650 S.W.2d 764 (Tex. 1983) ............................................................................6, 9\nHunt v. Ellisor & Tanner,\n 739 S.W.2d 933 (Tex. App.\u2014Dallas 1987, writ denied) ......................... 2, 22-23\nIlami v. Rowinska,\n No. 05-07-00893-CV, 2008 WL 3522242\n (Tex. App.\u2014Dallas Aug. 14, 2008, no pet.) ........................................................ 8\n\nIn re Prudential Ins. Co. of Am.,\n 148 S.W.3d 124 (Tex. 2004) ..............................................................................30\n\nIn re Velazquez,\n 660 F.3d 893 (5th Cir. 2011) ................................................................................ 5\nKizer v. Meyer, Lytton, Allen & Whitaker, Inc.,\n 228 S.W.3d 384 (Tex. App.\u2014Austin 2007, no pet.) ..............................19, 25, 27\n\n\n\n x\n\fLanders v. East Texas Salt Water Disposal Co.,\n 151 Tex. 251, 248 S.W.2d 731, 734 (1952) ...................................................3, 15\n\nLentz Eng\u2019g, L.C. v. Brown,\n No. 14-10-00610-CV, 2011 WL 4449655\n (Tex. App.\u2014Houston [14th Dist.] Sept. 27, 2011, no pet.)(mem. op.)................ 6\nLewis v. Taylor,\n 17 Tex. 57 (1856)................................................................................................21\nLJ Charter, LLC v. Air America Jet Charter, Inc.,\n No. 14-08-00534-CV, 2009 WL 4794242 (Tex. App.\u2014Houston [14th\n Dist.] Dec. 15, 2009, pet. denied) ......................................................................... 2\n\nMadison v. Williamson,\n 241 S.W.3d 145 (Tex. App.\u2014Houston [1st Dist.] 2007, no pet.) ................19, 26\n\nMatthew v. Sohn,\n 13-12-00302-CV, 2013 WL 2949562\n (Tex. App.\u2014Corpus Christi 2013, no pet.)(mem. op.) ......................................30\nMays v. Pierce,\n 203 S.W.3d 564 (Tex. App.\u2014Houston [14th Dist.] 2006, pet. denied)............. 16\n\nMendoza v. Fid. & Guar. Ins. Underwriters, Inc.,\n 606 S.W.2d 692 (Tex. 1980) ................................................................................ 6\nMetal Bldg. Components, LP v. Raley,\n No. 03-05-00823, 2007 WL 74316\n (Tex. App.\u2014Austin Jan. 10, 2007, no pet.)............................................ 25, 27-28\n\nMolberg v. State,\n No. 03-13-00330-CV, 2014 WL 904286\n (Tex. App.\u2014Austin 2014, no pet.) ....................................................................... 6\nMonsanto Co. v. Milam,\n 494 S.W.2d 534 (Tex. 1973) ..........................................................................7, 12\n\nO\u2019Connor v. First Court of Appeals,\n 837 S.W.2d 94 (Tex. 1992).................................................................................27\n\nOsborne v. Jauregui, Inc.,\n 252 S.W.3d 70 (Tex. App.\u2014Austin 2008, pet. denied) ..............................passim\n\n xi\n\fOyster Creek Fin. Corp. v. Richwood Investments II, Inc.,\n 176 S.W.3d 307 (Tex. App.\u2014Houston [1st Dist.] 2004, pet. denied) ......... 29-30\n\nPaschall v. Peevey,\n 813 S.W.2d 710 (Tex. App. \u2013 Austin 1991, writ denied)..................................... 2\n\nRegions Bank v. Bay,\n No. 05\u201312\u201300531\u2013CV, 2013 WL 5299174\n (Tex. App.\u2014Dallas Sept. 18, 2010, no pet.)(mem. op.).....................................30\nSeureau v. ExxonMobil Corp.,\n 274 S.W.3d 206 (Tex. App.\u2014Houston [14th Dist.] 2008, no pet.) ................... 16\nSmith v. Deneve,\n 285 S.W.2d 904 (Tex. App.\u2014Dallas 2009, no pet.) ..........................................12\nSmithKline Beecham Corp. v. Doe,\n 903 S.W.2d 347 (Tex. 1995) ..............................................................................12\nStewart Title Guar. Co. v. Sterling,\n 822 S.W.2d 1 (Tex. 1992)............................................................................passim\n\nStorrie v. Cortes,\n 90 Tex. 283, 38 S.W. 154 (1896) .......................................................................31\n\nSun Oil Co. v. Robicheaux,\n 23 S.W.2d 713 (Tex. Comm. App. 1930)...........................................................17\nUtts v. Short,\n 81 S.W.3d 822 (Tex. 2002)........................................................................... 21-22\n\nWalker v. Packer,\n 827 S.W.2d 833 (Tex. 1992) ................................................................................ 1\n\nWarren v. La Salle Co.,\n 262 S.W. 527 (Tex. Civ. App.\u2014Austin 1924, writ dismissed w.o.j.).................. 5\n\nWhitley v. King,\n 227 S.W.2d 241 (Tex. Civ. App.\u2014Waco 1950, no writ) ..................................... 8\n\nOTHER AUTHORITIES\nTex. R. App. P. 41.2(c) ............................................................................................27\n\n\n xii\n\f I. JOINT AND SEVERAL LIABILITY IS NECESSARY FOR\n \u201cONE SATISFACTION\u201d SETTLEMENT CREDIT. 1\n The settlement credit issue is whether the Architect was entitled to any\n\nsettlement credit at all, not the amount. Contrary to the Architect\u2019s suggestion\n\n(Cross-Appellee\u2019s 5), applicability of the settlement credit is a legal question\n\nreviewed de novo, Galle, Inc. v. Pool, 262 S.W.3d 564, 570 n.3 (Tex. App.\u2014\n\nAustin 2008, pet. denied). No discretion is allowed in deciding the law or applying\n\nit to the facts. Walker v. Packer, 827 S.W.2d 833, 840 (Tex.1992).\n\n The Architect insists, without authority, that \u201cTexas law does not require\n\njoint and several liability for application of the one satisfaction rule\u201d concerning\n\nsettlement credits. (Cross-Appellee\u2019s 6). It also alleges that RLJ \u201cseeks to \u2026\n\nintroduc[e] a new requirement \u2013 joint and several liability,\u201d as if that requirement\n\nwere previously unknown. (Cross-Appellee\u2019s 7). Apparently, it maintains that\n\n\u201cindivisible injury\u201d alone is enough. (Cross-Appellee\u2019s 14-17).\n\nA. All Courts That Have Actually Considered Whether Joint and\n Several Liability Is Necessary Have Ruled That It Is.\n The Texas Supreme Court, this Court (twice), the Fifth Circuit, and other\n\nTexas appellate courts recognize that \u201cone satisfaction\u201d settlement credits only\n\n\n1\n The Architect fails to distinguish between the multiple differing circumstances in which\nthe phrase \u201cone satisfaction\u201d is used. To avoid confusion, RLJ refers to the issue in this\ncase as involving the \u201c\u2018one satisfaction\u2019 settlement credit\u201d to distinguish it from other\ndoctrines under the broader \u201cone satisfaction\u201d heading. See II.A., infra.\n\n\n\n 1\n\fapply to joint liability. GE Capital Commercial Inc. v. Worthington Nat\u2019l Bank,\n\n754 F.3d 297, 306 (5th Cir. 2014); Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378,\n\n390 (Tex.2000); First Title Co. of Waco v. Garrett, 860 S.W.2d 74, 78 (Tex.1993);\n\nStewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 8 (Tex.1992); LJ Charter, LLC\n\nv. Air America Jet Charter, Inc., No. 14-08-00534-CV, 2009 WL 4794242 at *9\n\n(Tex. App.\u2014Houston [14th Dist.] Dec. 15, 2009, pet. denied); BP Am. Prod. Co. v.\n\nMarshall, 288 S.W.3d 430, 456 (Tex. App.\u2014San Antonio 2008), rev\u2019d on other\n\ngrounds, 342 S.W.3d 59 (Tex.2011); CTTI Priesmeyer, Inc. v. K&O Limited\n\nPartnership, 164 S.W.3d 675, 684 (Tex. App.\u2014Austin 2005, no pet.); Paschall v.\n\nPeevey, 813 S.W.2d 710, 712 (Tex. App. \u2013 Austin 1991, writ denied). CTTI\n\nspecifically ruled:\n\n Because tortfeasors cannot be jointly and severally liable for contract\n damages, and other contract defendants are only jointly and severally\n liable for breaches of contracts to which they are a party or that\n promise the same performance, we \u2026 affirm the trial court\u2019s decision\n to deny any settlement credits.\n\n164 S.W.3d at 685 (emphasis added).\n\n After calling the requirement a \u201cstraw man\u201d (Cross-Appellee\u2019s 7), the\n\nArchitect later recognizes the need for joint and several liability. It argues GE\n\nCapital \u201cholds only that the one-satisfaction rule requires an allegation of joint and\n\nseveral liability between the defendants.\u201d (Cross-Appellee\u2019s 10). The Architect\n\nalso attempts to distinguish Hunt v. Ellisor & Tanner, 739 S.W.2d 933, 938 (Tex.\n\n\n 2\n\fApp.\u2014Dallas 1987, writ denied), because \u201cit did not involve any allegations of\n\njoint liability\u2026.\u201d (Cross-Appellee\u2019s 18). As the Architect itself recognizes, joint\n\nand several liability is prerequisite for a \u201cone satisfaction\u201d settlement credit.\n\n Allowing this credit in non-tort cases based on indivisible injury alone\n\nignores Texas joint and several tort liability law. After Landers v. East Texas Salt\n\nWater Disposal Co., joint and several tort liability is based solely on indivisible\n\ninjury. 151 Tex. 251, 248 S.W.2d 731, 734 (1952), Thus, some post-Landers tort\n\ncases discuss indivisible injury requirement without mentioning joint and several\n\nliability because, post-Landers, in tort cases the former automatically satisfies the\n\nlatter. The Texas Supreme Court made abundantly clear that joint and several\n\nliability is essential to receiving a \u201cone satisfaction\u201d settlement credit. Casteel, 22\n\nS.W.3d at 390; Garrett, 860 S.W.2d at 78; Sterling, 822 S.W.2d at 8. There was no\n\npotential joint and several contractual liability here, 2 so there could be no \u201cone\n\nsatisfaction\u201d settlement credit. 3 (Cross-Appellants\u2019 23-29, 34-39).\n\n\n\n2\n The Architect does not question that joint contractual liability requires promising the\nsame performance. The Architect only argues that the joint liability requirement was\nsatisfied by taking three words in the relief RLJ requested out of context while ignoring\ndetailed allegations that the Architect and Settling Defendants breached distinct\ncontractual duties. (Cross-Appellee\u2019s 9). Why this argument is meritless is explained in\nI.B., infra.\n3\n Demonstrating the dearth of supporting authority, the Architect resorts to arguing\nwhether such credits are available in breach of contract cases. (Cross-Appellee\u2019s 7-9). To\nuphold the settlement credit in this case, the Architect must prevail on both the joint-and-\nseveral and the contractual liability issues.\n\n\n 3\n\fB. The Joint and Several Liability Requirement Is Not Satisfied\n When There Is No Potential Joint and Several Liability.\n The specific factual allegations about the Defendants\u2019 respective contractual\n\nduties showed that there was no common undertaking. (Cross-Appellants\u2019 25-31,\n\n34-39). The Architect attempts, however, to create the appearance of potential joint\n\nand several liability by arguing \u201cRLJ pled that [the Architect and the Settling\n\nDefendants] were jointly and severally liable for RLJ\u2019s breach of contract claims.\u201d\n\n(Cross-Appellee\u2019s 9; emphasis added). Nothing in RLJ\u2019s request specifically\n\nrefers to \u201cbreach of contract claims\u201d 4 as the Architect says. (CR202; Id.). Nowhere\n\ndoes RLJ \u201cadmit\u201d Defendants\u2019 contractual liability was joint.\n\n 1. Joint Contractual Liability Was Not Admitted In RLJ\u2019s\n Pleading.\n The Architect\u2019s categorical and incorrect assertion is based exclusively on\n\nthree words \u2013 \u201cjointly and severally\u201d \u2013 in RLJ\u2019s request for relief. (CR202). RLJ\n\npleaded tort claims against all Defendants for which joint and several liability\n\nwould have been appropriate. (CR197-200). Many pages of RLJ\u2019s petition and\n\nsupporting documentation detail facts showing that each Defendant\u2019s contractual\n\nduties were dissimilar and distinct. (CR192-93, 197-98, 200-01, 209-12).\n\n\n\n\n4\n The prayer requests \u201cjudgment against the Defendants, jointly and severally, for [RLJ\u2019s]\ndamages, interest, attorneys' fees, costs, and any other relief to which [it] may be\nentitled.\u201d (CR202; emphasis added).\n\n\n 4\n\fNevertheless, the Architect argues as if the general request for relief overrides\n\nmore specific allegations and alone admits joint and several liability.\n\n a. Request to Impose Joint and Several Liability\n Included Request for Joint or Several Liability.\n The Architect is wrong. Pleadings must be interpreted reasonably by\n\nconstruing words in context and allowing substance to control form. See Warren v.\n\nLa Salle Co., 262 S.W. 527, 531 (Tex. Civ. App.\u2014Austin 1924, writ dismissed\n\nw.o.j.).\n\n 1) RLJ Was Seeking the Broadest Relief\n Possible, Not to Narrow the Relief Available.\n The request for judgment against all \u201cDefendants, jointly and severally\u201d is\n\nincluded in a prayer seeking that and \u201cany other relief.\u201d (CR202). In context, it\n\ncannot be reasonably interpreted to seek only joint liability. \u201cAnd\u201d refers to \u201ceither\n\nor both\u201d when manifest intent and context requires. In re Velazquez, 660 F.3d 893,\n\n898 (5th Cir. 2011); see Bd. of Ins. Comm\u2019rs of Tex. v. Guardian Life Ins. Co. of\n\nTex., 142 Tex. 630, 180 S.W.2d 906, 908 (1944); Aerospatiale Helicopter Corp. v.\n\nUniversal Health Servs., Inc., 778 S.W.2d 492, 502 (Tex. App.\u2014Dallas 1989, writ\n\ndenied). \u201cJointly and severally,\u201d in context, also requested joint or several liability.\n\n 2) The Architect Ignores RLJ\u2019s Intent Manifest\n in the Rest of the Prayer.\n Even if \u201cand\u201d were only conjunctive, the Architect\u2019s interpretation ignores\n\nRLJ\u2019s manifest intent. Seeking the maximum relief available, RLJ requested \u201cany\n\n\n 5\n\fother relief to which [it] may be entitled.\u201d Read reasonably and in that context, the\n\nprayer did not only seek to hold the defendants jointly liable. It also included an\n\nassertion of several liability. Therefore, the request that the Defendants be \u201cjointly\n\nand severally\u201d liable was pleaded alternatively, not unequivocally, that the\n\nDefendants\u2019 contractual liability was only joint.\n\n To be judicially admitted, a fact allegedly must be alleged deliberately,\n\nclearly and unequivocally. Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d\n\n887, 905 (Tex.2000); Mendoza v. Fid. & Guar. Ins. Underwriters, Inc., 606\n\nS.W.2d 692, 694 (Tex.1980). Only \u201c\u2018[a]ssertions of fact, not pled in the\n\nalternative, in [a party\u2019s] live pleadings\u2019\u201d may be judicial admissions. Molberg v.\n\nState, No. 03-13-00330-CV, 2014 WL 904286 at *2 (Tex. App.\u2014Austin 2014, no\n\npet.)(quoting Houston First Am. Sav. v. Musick, 650 S.W.2d 764, 767 (Tex.1983);\n\nemphasis added). RLJ\u2019s request for relief was, at most, equivocal and could not\n\njudicially admit joint liability.\n\n 2. The Request for Relief Did Not Clearly, Deliberately and\n Unequivocally Allege Joint Contractual Liability.\n This is especially true when the entire pleading is considered, as it must be\n\nwhen deciding whether it is sufficiently clear, deliberate, and unequivocal to\n\njudicially admit a fact. Lentz Eng\u2019g, L.C. v. Brown, No. 14-10-00610-CV, 2011\n\nWL 4449655, at *1 (Tex. App.\u2014Houston [14th Dist.] Sept. 27, 2011, no\n\npet.)(mem. op.); see, e.g., Highlands Ins. Co. v. Currey, 773 S.W.2d 750, 755\n\n\n 6\n\f(Tex. App.\u2014Houston [14th Dist.] 1989, writ denied)(no admission in motion when\n\nparty specifically denied the same fact in its answer); Barstow v. State, 742 S.W.2d\n\n495, 509 (Tex. App.\u2014Austin 1987, writ denied)(no admission when motion\n\ncontained conflicting statements). \u201c[M]ere mistake or slip of the tongue must be\n\neliminated\u201d before a statement may be treated as a judicial admission. Hennigan v.\n\nI.P. Petroleum Co., 858 S.W.2d 371, 372 (Tex.1993)(quoting Griffin v. Superior\n\nIns. Co., 161 Tex. 195, 338 S.W.2d 415, 419 (1960)).\n\n a. Then-Pending Tort Claims Supported Request for\n Imposition of Joint and Several Liability.\n RLJ alleged pending tort claims so that including a request for joint and\n\nseveral liability was appropriate for those claims. It does not necessarily or even\n\nreasonably follow that such request must have also included contractual liability.\n\n b. Specific Allegations Negated Joint or Common\n Contractual Duty.\n This is further illustrated because the specific facts alleged contradict any\n\ninference that RLJ admitted joint liability. Reasonable interpretation means\n\nspecific allegations control more general averments. Monsanto Co. v. Milam, 494\n\nS.W.2d 534, 536 (Tex.1973). RLJ alleged breaches of distinct contractual\n\nobligations by the Soils Engineer (CR192, 211-212), General Contractor (CR192),\n\nand the Architect. (CR192, 205-07). These factual averments eliminated as a\n\nmatter of law any potential joint contractual liability. (Cross-Appellants\u2019 25-28,\n\n\n\n 7\n\f35-39). Even the Architect agreed that its responsibilities were different.\n\nAccording to its closing argument, \u201cAn architect is not an engineer [or] \u2026 a\n\ngeneral contractor.\u201d (10RR33). \u201cArchitects do not \u2026 and cannot second-guess\n\nengineers.\u201d (10RR34). The specific factual allegations, therefore, control the\n\ngeneral relief requested over whether the contractual liability alleged was joint.\n\n c. Joint and Several Liability Request Asserted a\n Legal Conclusion And Is Not a \u201cFact\u201d That Can\n Be Judicially Admitted.\n Whether liability is joint and several is a legal conclusion, not a factual\n\nassertion. See Bentley v. Bunton, 94 S.W.3d 561, 619 (Tex.2002)(conspiracy\n\nfinding \u201crequires the legal conclusion to impose joint and several liability\u201d); Ilami\n\nv. Rowinska, No. 05-07-00893-CV, 2008 WL 3522242, at *2 (Tex. App.\u2014Dallas\n\nAug. 14, 2008, no pet.)(\u201cdefendants are jointly and severally liable\u201d is a \u201clegal\n\nconclusion\u201d). \u201cThe mere fact that plaintiffs incidentally inserted in their petition\n\nthe legal conclusion that \u2018[the defendant], under the facts alleged, is further liable\n\nto plaintiffs, jointly and severally, in his individual capacity\u2019 did not in any respect\n\nchange or alter the nature and character of the cause of action otherwise asserted\n\n\u2026.\u201d Whitley v. King, 227 S.W.2d 241, 244 (Tex. Civ. App.\u2014Waco 1950, no\n\nwrit)(emphasis added).\n\n Even if the request had \u201cadmitted\u201d potential joint contractual liability, it\n\nwould not have been binding because it concerned a question of law, not fact.\n\n\n\n 8\n\fBoulet v. State, 189 S.W.3d 833, 838 (Tex. App.\u2014Houston [1st Dist.] 2006, no\n\npet.). Admission of a legal conclusion has no legal effect. Elliott v. Newsom, No.\n\n01-07-00692-CV, 2009 WL 214551, at *2 (Tex. App.\u2014Houston [1st Dist.] Jan.\n\n29, 2009, no pet.)(mem. op.).\n\n 3. The Architect Waived the Effect of Any Admission On\n Introduction of Evidence Showing No Joint Duty.\n Further, the Architect waived reliance on any such admission by permitting\n\nthe introduction of contradictory evidence without objecting that the matter had\n\nbeen conclusively established. \u201cThe party relying on his opponent\u2019s pleadings as\n\njudicial admissions of fact, however, must protect his record by objecting to the\n\nintroduction of evidence contrary to that admission\u2026.\u201d Musick, 650 S.W.2d at\n\n769.\n\n When RLJ introduced evidence precluding any joint contractual liability, the\n\nArchitect never asserted it was barred by judicial admission. (Cross-Appellants\u2019 7-\n\n11, 34-38). For this additional reason, there is no judicial admission of joint\n\ncontractual liability. Without allegation of or evidence showing a joint contractual\n\nliability, there is no distinction between this case and GE Capital.5 Neither\n\ninvolved pleadings for potential joint contractual liability.\n\n\n5\n The Architect asserts that RLJ argues the \u201cone satisfaction\u201d settlement credit \u201conly\napplies if there is a finding of joint and several liability between the defendants.\u201d (Cross-\nAppellee\u2019s 10). RLJ made no such argument. When Chapter 33 does not apply, there is\nno mechanism for obtaining any liability finding about a settling party\u2019s liability. RLJ\n\n 9\n\fC. Potential Joint Contractual Liability Not Presumed From Any\n Failure to Allocate Damages.\n Without potential joint contractual liability in this case, no duty to allocate\n\never arose. The Architect acknowledges (Cross-Appellee\u2019s 11) there must first be\n\n\u201csome damages for which there could be joint and several liability.\u201d CTTI, 164\n\nS.W.3d at 685, n.3. Nevertheless, it dismisses CTTI as merely \u201cexplain[ing] the\n\nburden[-]shifting procedure\u201d for \u201cone satisfaction\u201d settlement credits. (Cross-\n\nAppellee\u2019s 12). The Architect ignores that the CTTI footnote it cites concludes:\n\n [t]his burden shifting applies only where there are at least some\n damages for which there could be joint and several liability. Because\n \u2026 there can be no damages for which CTTI is jointly liable with other\n settling parties, K & O had no burden to allocate\u2026.\n\nId. (emphasis added). CTTI rejected the Architect\u2019s suggestion (Cross-Appellee\u2019s\n\n11-13) that the duty to allocate arises regardless of whether the potential liability\n\nwould be joint. Failure to allocate does not otherwise make \u201cjoint\u201d a separate\n\nsettled liability. There must be a potential joint liability before allocation is\n\nnecessary. According to the Architect, it had no common contractual duty with any\n\nSettling Defendant. (10RR33-39).\n\n\n\n\ndoes not quarrel whether the joint and several liability requirement is satisfied by\nallegation or introduction of evidence supporting such liability. It need not do so. Neither\nhappened in this case. Rather, the pleading and the evidence showed that there was no\npossibility, as the Architect itself argued to the jury (Cross-Appellants\u2019 38-39), that the\nArchitect\u2019s and the Settling Defendants\u2019 liability could have arisen from any common\ncontractual duty. (Cross-Appellants\u2019 34-38).\n\n\n 10\n\fD. RLJ Had No Notice The Architect Would Claim Under the\n One Satisfaction Rule Credit for Contractual Liability\n Settlements.\n Further, RLJ had no notice of any need to allocate because the Architect\n\nnever pleaded for any \u201cone satisfaction\u201d settlement credit. The Architect asserts\n\nthat its answer, \u201cconstrued liberally \u2026 did provide notice of ESG\u2019s intent to reduce\n\nany damage award based on sums received [from] other settling parties\u201d (Cross-\n\nAppellee\u2019s 28), and that RLJ was at fault for not \u201crequest[ing] \u2026 an \u2018opportunity\u2019\n\nto \u2026 apportion[] its damages.\u201d (Cross-Appellee\u2019s 3, 26). (Id.).\n\n 1. The Architect Only Pleaded Chapter 33 Tort\n Contribution, Not \u201cOne Satisfaction\u201d Settlement\n Contribution\n The Architect\u2019s selective quote from its answer 6 omits its explicit limitation\n\nto a Chapter 33 settlement credit. The Architect pleaded:\n\n Alternatively, if the economic loss rule does not completely bar all of\n Plaintiffs\u2019 tort claims, then, pursuant to Chapter 33 of the Texas Civil\n Practice and Remedies Code, Defendants are entitled to a credit for\n any settlement Plaintiffs receive from any other person or entity. If\n Plaintiffs settle with any other person or entity, then Defendants\n\n\n6\n Attempting to create the appearance of pleading for a \u201cone satisfaction\u201d settlement\ncredit implicitly acknowledges the Texas Rule of Civil Procedure 94 obligation to plead\nfor it affirmatively. Under 2212, it was unnecessary to affirmatively plead for the \u201cone\nsatisfaction\u201d settlement credit because no fact issue was potentially presented. The credit\nwas fixed by statute on a per capita basis. (Cross-Appellants\u2019 22). Under modern\npractice, a \u201cone satisfaction\u201d settlement credit is not fixed and must be pleaded as an\naffirmative defense under Rule 94. (Cross-Appellants\u2019 57-59). Cases stating generally\nthat it is unnecessary to plead the \u201cone satisfaction\u201d settlement credit appear to have\nuncritically adopted language from cases decided when the credit amount was fixed by\narticle 2212.\n\n\n 11\n\f reserve the right to make a written election of credit for settlement\n under \u00a733.014 of the Texas Civil Practice and Remedies Code.[ 7]\n\n(CR47; emphasis added).\n\n 2. Limiting Its Contribution Claim to Chapter 33 Only\n Prevents the Architect from Relying on Bases for\n Claiming Contribution.\n Specific allegations control general assertions. Monsanto Co., 494 S.W.2d at\n\n536. Pleading a particular ground precludes reliance on others not alleged.\n\nHeritage Gulf Coast Properties, Ltd. v. Sandalwood Apartments, Inc., 416 S.W.3d\n\n642, 660 (Tex. App.\u2014Houston [14th Dist.] 2013, no pet.); Smith v. Deneve, 285\n\nS.W.2d 904, 916 (Tex. App.\u2014Dallas 2009, no pet.). The Architect\u2019s pleading\n\ncannot be reasonably read to request a \u201cone satisfaction\u201d settlement credit.\n\n 3. Liberal Construction Is Not a License to Infer Claims\n Not Alleged.\n Liberal construction is not a \u201clicense to read into [a pleading] a claim that it\n\ndoes not contain.\u201d Flowers v. Flowers, 407 S.W.3d 452, 458 (Tex. App.\u2014Houston\n\n[14th Dist.] 2013, no pet.). It only allows that which may be \u201creasonably inferred\n\nfrom what is specifically stated.\u201d SmithKline Beecham Corp. v. Doe, 903 S.W.2d\n\n347, 354 (Tex.1995). Allegation of a \u201cone satisfaction\u201d settlement credit against\n\ncontractual liability cannot be inferred from the Architect\u2019s pleading for Chapter\n\n33 tort contribution.\n\n7\n This section was repealed September 1, 2003, nine years before the Architect\u2019s Second\nAmended Answer. (CR46).\n\n 12\n\f This is especially true because, when the Architect asserted Chapter 33\n\ncontribution, RLJ\u2019s tort claims were still pending. (CR197-200). The trial court\n\nonly later rendered a take-nothing summary judgment on those claims. (CR1710).\n\nAfter the trial court disposed of the tort claims, RLJ settled with the Settling\n\nDefendants. (Cross Appellants\u2019 11). The Architect never pleaded or otherwise gave\n\nRLJ any notice it would seek a \u201cone satisfaction\u201d settlement credit. 8\n\n 4. There Was No Opportunity And No Need to Allocate.\n The Architect further asserts that RLJ now attempts to \u201cshow allocation of\n\ndamages on appeal despite the fact that [it] presented no such evidence to the trial\n\ncourt.\u201d (Cross-Appellee\u2019s 2). This is incorrect for several reasons. \u201cA party cannot\n\nwaive a right before [it] is in a position to assert it.\u201d Broughton Assoc. Joint\n\nVenture v. Boudreaux, 709 S.W.3d 324, 328 (Tex. App.\u2014Waco 2002, no pet.).\n\nWithout notice the Architect was claiming a \u201cone satisfaction\u201d settlement credit for\n\ncontractual liability, RLJ can hardly be faulted for not allocating. 9\n\n\n8\n Because the Architect failed to plead the \u201cone satisfaction\u201d settlement credit, its\narguments concerning laches (Cross-Appellee\u2019s 29) are founded on an incorrect premise\nand need not be considered further.\n9\n If allocation was necessary, the Architect\u2019s delay until after trial in raising the \u201cone\nsatisfaction\u201d settlement credit issue deprived RLJ of its right to have the jury resolve all\nfact issues. This delay alone foreclosed the application of the one satisfaction rule due to\nlaches. (Cross-Appellants\u2019 58-59). The Architect\u2019s contention that laches as an avoidance\nwas waived by not being pleaded is baseless because the Architect never pleaded for any\ncontractual liability contribution defense. RLJ specifically asserted laches when the issue\narose post-trial. (CR1817). The Architect never objected this avoidance was untimely.\n(CR1633-39).\n\n\n 13\n\f The lynchpin of the Architect\u2019s allocation argument was that RLJ\u2019s petition\n\nasserted potential joint and several contractual liability. As shown here and\n\npreviously (Cross-Appellants\u2019 34-39), it did no such thing. The Architect never\n\nsatisfied its \u201cinitial burden to show that there are \u2018at least some damages for which\n\nthere could be joint and several liability.\u2019\u201d (Cross-Appellee\u2019s 12; see also Cross-\n\nAppellee\u2019s 27). The need to allocate never arose.\n\n The Architect further misapprehends what must be allocated. It argues\n\nincorrectly RLJ had \u201cto show allocation of damages applicable only to ESG.\u201d\n\n(Cross-Appellee\u2019s 12; emphasis added; see also Cross-Appellee\u2019s 27). Actually,\n\nallocation is only required for settlement proceeds, not the non-settling defendant\u2019s\n\ndamages. CTTI, 164 S.W.3d at 675, n.3.\n\n Even if it were necessary to allocate to specifically identify those damages\n\nfor which the Architect was liable, the jury\u2019s verdict did that. (Cross-Appellants\u2019\n\n40-47). The charge only asked about the damages from the Architect\u2019s failure to\n\ncomply with its own contractual obligations, not for all damages resulting from all\n\nDefendants\u2019 alleged breaches. (CR1127; App.B). According to this Court and the\n\nTexas Supreme Court, the \u201cone satisfaction\u201d settlement credit would not apply for\n\nthis reason alone.\n\n The [\u201cone satisfaction\u201d settlement credit] rule guards against a\n plaintiff receiving a windfall \u201cby recovering an amount in court that\n covers the plaintiff\u2019s entire damages, but to which a settling defendant\n has already partially contributed. The plaintiff would otherwise be\n\n 14\n\f recovering an amount greater than the trier of fact has determined\n would fully compensate for the injury.\u201d\n\nOsborne v. Jauregui, Inc., 252 S.W.3d 70, 75 (Tex. App.\u2014Austin 2008, pet.\n\ndenied)(quoting First Title Co. v. Garrett, 860 S.W.2d 74, 78 (Tex.1993)).\n\n RLJ questions whether the \u201cone satisfaction\u201d settlement credit applies at all.\n\nIt does not question whether, if the Architect was entitled to such a credit, the trial\n\ncourt correctly calculated the amount. The Architect\u2019s discussion of allocation is\n\nultimately an immaterial diversion.\n\nE. Indivisible Injury Alone Does Not Establish Joint and Several\n Contractual Liability or the \u201cOne Satisfaction\u201d Settlement\n Credit.\n The Architect\u2019s confusion continues into its indivisible injury argument.\n\nThere, the Architect again asserts judicial admission as substitute for a non-existent\n\nfact. It urges RLJ judicially admitted the injury in this case was indivisible. (Cross-\n\nAppellee\u2019s 14). An injury is \u201cindivisible\u201d when, by its very nature, it cannot be\n\napportioned with reasonable certainty to the individual wrongdoers. Landers v. 248\n\nS.W.2d at 734. Whether an injury is indivisible is a question of law that cannot be\n\nestablished by admission. Boulet, 189 S.W.3d at 838.\n\n Legal injury cannot be conflated with damages. They are separate and\n\ndistinct. A legal injury consists of the invasion to a claimant\u2019s legally protected\n\nrights. Seureau v. ExxonMobil Corp., 274 S.W.3d 206, 226-227 (Tex. App.\u2014\n\nHouston [14th Dist.] 2008, no pet.); Goggin v. Grimes, 969 S.W.2d 135, 137 (Tex.\n\n\n 15\n\fApp.\u2014Houston [14th Dist.] 1998, no pet.). For contract breaches, the legal injury\n\nis failing or refusing to do something a party promised. Mays v. Pierce, 203\n\nS.W.3d 564, 575 (Tex. App.\u2014Houston [14th Dist.] 2006, pet. denied). By\n\ndefinition, the \u201cinjury\u201d in a contract case in which there is no joint or common\n\ncontractual duty and no joint liability is not \u201cindivisible\u201d as it is in tort cases.\n\n However, even assuming arguendo that the \u201cinjury\u201d here could be treated as\n\n\u201cindivisible\u201d sans a common contractual duty, that alone is not enough to establish\n\nentitlement to a \u201cone satisfaction\u201d settlement credit. The settlement must have also\n\nbeen for the same damages assessed against the non-settling defendant. Casteel, 22\n\nS.W.3d at 391; CTTI, 164 S.W.3d at 675, n.3. The jury was not asked the amount\n\nof damages resulting from breaches by all defendants \u2013 only those of the Architect.\n\n(CR1127; App.B). The Architect points to the general release of all past and future\n\nclaims arising out of the Project to suggest overlapping damages (Cross-Appellee\u2019s\n\n3-4) even though the damages question was limited to those caused by the\n\nArchitect. (CR1127; App.B). As the Architect itself previously urged, joint liability\n\nis based on the liability alleged, not the liability released. (Cross-Appellee\u2019s 10-\n\n13). Further, every prudent litigant will obtain a release of all claims that were or\n\ncould have been asserted. The scope of the release will always be broader than the\n\nsettlor\u2019s alleged liability.\n\n\n\n\n 16\n\f The Architect\u2019s allocation argument is but an attempt to bolster its complaint\n\nthat the damages evidence was legally insufficient. (Appellant\u2019s 36-57). The\n\nArchitect maintains the jury could not \u201callocate\u201d damages unless a witness\n\nparticularly attributed to it a specific sum of damages it alone caused. (Cross-\n\nAppellee\u2019s 15). Among the reasons this argument is meritless (Appellees\u2019\n\nAmended 61-62), is that it requires a return to the now-rejected rule of Sun Oil Co.\n\nv. Robicheaux, 23 S.W.2d 713, 715 (Tex. Comm. App. 1930)(judgment adopted),\n\nbarring recovery if the claimant failed to establish the damage caused by each\n\ndefendant. Ironically, the \u201cone satisfaction\u201d settlement credit the Architect sought\n\nwas created in response to the statute rectifying the very same \u201cintolerable\n\nburden.\u201d (Cross-Appellants\u2019 21).\n\n If the Architect wanted a jury determination of an amount of damages that\n\nincluded those caused by the Settling Defendants, it was obliged to properly\n\npreserve that complaint. Any necessity for allocation of damages was not related to\n\nthe elements of RLJ\u2019s recovery as the Architect suggests (Cross-Appellee\u2019s 26),\n\nbut to the Architect\u2019s post-verdict claim for a \u201cone satisfaction\u201d settlement credit.\n\nThe Architect did not assert that issue by affirmative pleading as required. (See n.\n\n6, supra.; Cross-Appellants\u2019 57-58).\n\n It did not preserve for complaint any failure of the charge to obtain a finding\n\nabout whether damages overlapped. (Cross-Appellants\u2019 56-57). Such a finding was\n\n\n 17\n\fnecessary to trigger any alleged duty to allocate. CTTI, 164 S.W.3d at 675, n.3. In\n\naddition to having no joint contractual liability with any Settling Defendant, the\n\nArchitect failed to show that any settlement proceeds were for the injury or the\n\nsame damages as those assessed against the Architect. The Architect was,\n\ntherefore, not entitled to a \u201cone satisfaction\u201d settlement credit for these reasons.\n\n II. \u201cONE SATISFACTION\u201d SETTLEMENT CREDIT DOES NOT\n APPLY TO ANY CONTRACTUAL LIABILITY.\n The Architect also deserved no \u201cone satisfaction\u201d settlement credit because\n\nit is not available for contractual liabilities. The credit is limited to cases of joint\n\ntort liability. (Cross-Appellants\u2019 19-25). Yet, the Architect contends that there is an\n\noverarching common law \u201cone satisfaction\u201d settlement credit available beyond that\n\ncreated in response to article 2212. Actually, the common law generally allowed\n\nneither joint and several liability nor claims for contribution. (Cross-Appellants\u2019\n\n20-21). Nevertheless, the Architect infers from pre-article 2212 cases containing\n\nthe phrase \u201cone satisfaction\u201d a pre-existing common law \u201cone satisfaction\u201d\n\nsettlement credit. (Cross-Appellee\u2019s 6 n.2).\n\nA. Beware the Multiple Uses of \u201cOne Satisfaction.\u201d\n Texas cases have used the phrase \u201cone satisfaction\u201d for at least three distinct\n\npurposes: 1) limiting recovery to the judgment amount in later enforcement suits,\n\ne.g., El Paso Nat. Gas v. Berryman, 858 S.W.2d 362, 364 (Tex.1993)(alleged alter\n\nego had no derivative liability if judgment against alleged principle fully paid);\n\n\n 18\n\f2) describing the election of remedies necessary for formulating the judgment\n\nwhen damages for indivisible injury are awarded or recovered under multiple\n\nrecovery theories, Madison v. Williamson, 241 S.W.3d 145, 159 (Tex. App.\u2014\n\nHouston [1st Dist.] 2007, no pet.); and 3) describing the settlement credit created\n\nin response to article 2212 to limit the amount of recoverable damages recoverable\n\nwhen a potentially liable defendant settles its tort liability before judgment. Stewart\n\nTitle Guar. Co. v. Sterling, 822 S.W.2d 1, 5 (Tex.1991).\n\n The election-of-remedies \u201cone satisfaction\u201d bars recovery if plaintiff elects\n\nto recover or has obtained judgment under a different theory of liability for the\n\nsame wrong, regardless of whether it would exceed the loss. See Fina Supply, Inc.\n\nv. Abilene Nat\u2019l Bank, 726 S.W.2d 537, 541 (Tex.1987); Horizon Offshore\n\nContractors, Inc. v. Aon Risk Servs. of Tex., Inc., 283 S.W.3d 53, 60 (Tex. App.\u2014\n\nHouston [14th Dist.] 2009, pet. denied); e.g., Kizer v. Meyer, Lytton, Allen &\n\nWhitaker, Inc., 228 S.W.3d 384, 392, n.3 (Tex. App.\u2014Austin 2007, no\n\npet.)(second action\u2019s judgment might be barred by recovery in previous judgment).\n\nThe \u201cone satisfaction\u201d judgment rule does not concern the amount of damages that\n\ncan be awarded by a forthcoming judgment, only the amount recoverable from a\n\njudgment debtor or those in privity under an existing judgment.\n\n This case involves neither of those rules. Instead, it involves the \u201cone\n\nsatisfaction\u201d settlement credit created in response to legislation overturning the\n\n\n 19\n\fcommon-law rule prohibiting contribution among tortfeasors. As the Texas\n\nSupreme Court explained in Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 5\n\n(Tex.1991),\n\n [The judgment debtor] alleges that it is entitled to an off-set from the\n settlement under the one satisfaction rule. This doctrine developed at\n common law from the interpretation and application of [article 2212,]\n the original contribution statute. This common law development was\n necessary, because the statute did not address the implications of a\n partial settlement on contribution.\n\n(Emphasis added); see also Cross-Appellants\u2019 20-22.\n\n 1. There Was No \u201cOne Satisfaction\u201d Settlement Credit\n Until After Article 2212 Was Enacted.\n Without acknowledging the different purposes for which courts use \u201cone\n\nsatisfaction,\u201d the Architect infers from pre-article 2212 cases containing that\n\nexpression that a common law settlement credit previously existed even if recovery\n\nwas for a non-tort liability. The Architect declares, \u201cThe Texas Supreme Court\n\nbegan enforcing the one-satisfaction rule as early as 1856.\u201d (Cross-Appellee\u2019s 6).\n\nWhile that is true for the \u201cone satisfaction\u201d of judgment rule and election-of-\n\nremedies rule, it is untrue for the \u201cone satisfaction settlement credit.\u201d\n\n 2. The Cases Cited By The Architect Did Not Involve\n Settlement Credits.\n None of the three cases the Architect cites involved settlement, a settling\n\nparty, or reduction of a damage award. Lewis v. Taylor, 17 Tex. 57, 59 (1856)\n\ninvolved the \u201cone satisfaction\u201d of judgment rule, holding that a judgment creditor\n\n\n 20\n\fwas not entitled to recover more than the judgment amount in a suit against the\n\ndebtor\u2019s bond surety. Alvord v. Waggoner, 88 Tex. 615, 32 S.W. 872, 873 (1895),\n\nconcerned the \u201cone satisfaction\u201d election of remedies when it observed that a\n\ngrantee could sue each of his successors in title for breach of the general warranty\n\ndeed, but \u201ccould have but one satisfaction of his damages.\u201d The opinion in\n\nAndrews v. Harvey, 39 Tex. 123 (1873), contains no reference whatever to any\n\n\u201cone satisfaction\u201d rule. \u201cOne satisfaction\u201d appears only in the summary of the\n\nlosing party\u2019s argument, which preceded opinions in Texas Reports. See 1 Tex.\n\nPreface. And that reference appears to be to the election-of-remedies \u201cone\n\nsatisfaction.\u201d None of these cases show a \u201cone satisfaction\u201d settlement credit\n\nexisted before article 2212.\n\n 3. Utts Does Not Suggest That the \u201cOne Satisfaction\u201d\n Settlement Credit Existed at Common Law Before\n Article 2212.\n From the fallacious premise that settlement contributions under the one-\n\nsatisfaction rule antedated article 2212, the Architect urges that in Utts v. Short, 81\n\nS.W.3d 822, 831-32 (Tex.2002), \u201c[t]he [Texas] Supreme Court explained that\n\nTexas\u2019 statutory contribution scheme upholds the broader one-satisfaction rule\n\nrather than supersedes the common law one-satisfaction rule.\u201d There are numerous\n\nerroneous assumptions underlying this suggestion.\n\n\n\n\n 21\n\f Creating a specific settlement credit in response to article 2212 would have\n\nbeen unnecessary if a common-law \u201cone satisfaction\u201d settlement credit already\n\nexisted. Further, the cited passage from Utts was only the opinion of Justice Baker,\n\nnot a majority of the court. Id. at 824. Finally, Utts involved a tort claim governed\n\nby the Chapter 33 contribution statute. It presented no question whether Chapter 33\n\nsupplanted a pre-existing common-law settlement credit other than the \u201cone\n\nsatisfaction\u201d settlement credit created in response to article 2212, which only\n\napplied to tort cases. Id. at 825.\n\nB. This and Other Texas Courts Have Refused to Apply \u201cOne\n Satisfaction\u201d Settlement Credits to Contractual Liability.\n To bolster its contention that \u201cone satisfaction\u201d settlement credits apply to\n\ncontractual liabilities, the Architect sweepingly but incorrectly declares \u201cneither\n\nthis Court nor any other appellate jurisdiction in Texas holds that the one-\n\nsatisfaction rule is limited by the particular cause of action asserted.\u201d (Cross-\n\nAppellee\u2019s 7).\n\n In CTTI Priesmeyer, Inc. v. K & O Ltd. Partnership, 164 S.W.3d 675, 683-\n\n84 (Tex. App.\u2014Austin 2005, no pet.), this Court noted that the Dallas appellate\n\ncourt in Hunt v. Ellisor & Tanner, 739 S.W.2d 933, 938 (Tex. App.\u2014Dallas 1987,\n\nwrit denied), ruled a breach of contract claim does not support comparative\n\ncausation. The Architect attempts to distinguish Hunt by urging \u201cthat it did not\n\ninvolve any allegations of joint liability and indivisible damages\u2026.\u201d (Cross-\n\n\n 22\n\fAppellees\u2019 18). If Hunt meant the one satisfaction rule applies to contractual\n\nliabilities, then it nevertheless requires joint and several liability. Either way, Hunt\n\nsupports RLJ\u2019s contention that the trial court erroneously gave the Architect credit\n\nfor the sums paid by the Settling Defendants either because the \u201cone satisfaction\u201d\n\nsettlement credit does not apply to contractual liability at all or does not apply if\n\nthe potential contractual liability is not joint.\n\n Even more to the point, CTTI discussed Stewart Title Guar. Co. v. Sterling,\n\n822 S.W.2d 1 (Tex.1991), First Title Co. of Waco v. Garrett, 860 S.W.2d 74\n\n(Tex.1993), and Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378 (Tex.2000) \u2013 the\n\npost-Hunt Texas Supreme Court cases analyzing the availability of settlement\n\ncredits under the one satisfaction rule. CTTI observed that in each of those cases\n\nthe liable and settling defendants were joint tortfeasors. It pointed out that the\n\nTexas Supreme Court had observed in Casteel:\n\n Under the one satisfaction rule, the nonsettling defendant may only\n claim a credit based on the damages for which all tortfeasors are\n jointly liable.... [T]he nonsettling defendant is entitled to offset any\n liability for joint and several damages by the amount of common\n damages paid by the settling defendant, but not for any amount of\n separate or punitive damages paid by the settling defendant.\n\nCTTI, 164 S.W.3d at 684 (quoting Casteel, 22 S.W.3d at 391-92; emphasis added).\n\n Without explanation, the Architect nevertheless declares CTTI\u2019s \u201cholding\n\nitself acknowledges and allows for the application [of one satisfaction settlement\n\ncredits] to breach of contract claims.\u201d (Cross-Appellee\u2019s 12, n. 4). In reality, CTTI\n\n 23\n\f\u201cconclude[d] that the one satisfaction rule applies only to tort claims, not to breach\n\nof contract claims.\u201d Id. (emphasis added). This Court could not have been more\n\nclear.\n\n CTTI is not an isolated example. CBI NA-CON, Inc. v. UOP, Inc., 961\n\nS.W.2d 336, 339 (Tex. App.\u2014Houston [1st Dist.] 1997, pet. denied), also\n\ncategorically ruled \u201c[c]ontribution is allowed in Texas only among joint\n\ntortfeasors.\u201d Id. at 33910; accord, Marshall, 288 S.W.3d at 456 (\u201cA nonsettling\n\ndefendant may only successfully urge the one satisfaction rule when there are joint\n\ntortfeasors\u201d). CBI explained \u201cthe only way [C]hapter 33 could apply is if [the\n\nplaintiff] had a negligence claim, breach of warranty claim \u2026 or a strict products\n\nliability claim\u201d because \u201c[a] breach of contract claim is not a basis for contribution\n\nunder Chapter 33.\u201d Id. at 339, 341. Bartley v. Guillot, 990 S.W.2d 481, 484 (Tex.\n\nApp.\u2014Houston [1st Dist.] 1999, pet. denied), also disallowed a \u201cone satisfaction\u201d\n\nsettlement credit because \u201cany set-off [the liable defendant] may be entitled to\n\nreceive must come from another tortfeasor, not \u2026 a party merely involved by\n\ncontract.\u201d Id. These decisions further illustrate that \u201cone satisfaction\u201d settlement\n\ncredits apply only to joint tort, not contractual, liabilities.\n\n10\n Despite the assertion of a general right of contribution for all the claims asserted\nagainst UOP, the court deemed it necessary only to consider Chapter 33. It could not\nhave based its disposition on Chapter 33 alone if there were a common-law contribution\nright. Thus, CBI also rebuts the Architect\u2019s contentions that joint and several liability is\nnot required and that there is an overarching common-law contribution right beyond\nChapters 32 and 33.\n\n 24\n\fC. CTTI Is Still Valid.\n Without acknowledging or considering origin or purpose of the \u201cone\n\nsatisfaction\u201d settlement credit, the Architect assails generally the notion it only\n\napplies to tort liability and attacks in particular the continuing vitality of CTTI\n\nbased on four later decisions by this Court. (Cross-Appellee\u2019s 12, n.4).\n\n 1. No Later Decision Expressly Limits or Overturns CTTI.\n Two of these opinions make no mention of CTTI whatever. Kizer v. Meyer,\n\nLytton, Alen & Whitaker, Inc., 228 S.W.3d 384, 392 n.3 (Tex. App. \u2013 Austin 2007,\n\nno pet.); Metal Bldg. Components, LP v. Raley, No. 03-05-00823, 2007 WL 74316\n\n(Tex. App.\u2014Austin Jan. 10, 2007, no pet.). Galle, Inc. v. Pool, 262 S.W.3d 564,\n\n573-74 (Tex. App.\u2014Austin 2008, pet. denied), and Osborne v. Jauregui, Inc., 252\n\nS.W.3d 70, 75 (Tex. App.\u2014Austin 2008, pet. denied)(en banc), cite CTTI, but not\n\nconcerning whether the \u201cone satisfaction\u201d settlement credit applies to contractual\n\nliability. Neither Pool nor Osborne discuss CTTI\u2019s explanation why the \u201cone\n\nsatisfaction\u201d settlement credit was created or analyzes why that reason and the\n\nTexas Supreme Court authorities on which CTTI relied meant the credit was\n\nlimited to joint tort liability.\n\n Using the identical language, Pool and Osborne cite general boilerplate\n\noriginating in election-of-remedies cases, Madison, 241 S.W.3d at 159, that the\n\n\u201cone satisfaction\u201d rule applies regardless of theory of recovery when multiple\n\n\n\n 25\n\fdefendants commit the same or \u201ctechnically\u201d different acts resulting in the same\n\ninjury. Pool, 262 S.W.3d at 573; Osborne, 252 S.W.3d at 75. Both Pool and\n\nOsborne cite Stewart, Sterling, Garrett, and Casteel \u2013 tort cases that had no reason\n\nto address non-tort liability. Nothing in Pool or Osborne reflects an actual\n\nawareness that CTTI disallowed \u201cone satisfaction\u201d settlement credits for\n\ncontractual liabilities. Neither opinion suggests conscious or overt rejection of\n\nCTTI\u2019s holding.\n\n Pool and Osborne relied on AMX Enters., Inc. v. Bank One, N.A., 196\n\nS.W.3d 202, 206 (Tex. App.\u2014Houston [1st Dist.] 2006, pet. denied), for the\n\nproposition that \u201c[t]he application of the rule is not limited to tort claims and \u2026\n\ndepends not on the cause of action asserted but rather the injury sustained.\u201d AMX\n\nrelied on Sterling as support:\n\n There can be but one recovery for one injury, and the fact that more\n than one defendant may have caused the injury or that there may be\n more than one theory of liability, does not modify this rule.\n\n822 S.W.2d at 8. AMX ignored that Sterling was a tort case applying article 2212,\n\nthe original contribution statute, id. at 5, and involved no potential contractual\n\nliability.\n\n 2. Stare Decisis and En Banc Standards Make Sub Silentio\n Overruling of CTTI Both Unthinkable and Unlikely.\n Conscious, but surreptitious, overruling of CTTI would have been\n\nirreconcilable with respect for stare decisis, see Austin Home Ctr. Associates v.\n\n\n 26\n\fState, 794 S.W.2d 593, 595 (Tex. App.\u2014Austin 1990, no writ), and the established\n\npractice of explicit, en banc resolution of conflicting opinions. O\u2019Connor v. First\n\nCourt of Appeals, 837 S.W.2d 94, 96 (Tex.1992); see also Tex. R. App. P. 41.2(c).\n\nIt is inconceivable this Court would treat CTTI in the cavalier manner the Architect\n\nsuggests had it been concerned in Pool or Osborne about conflict with CTTI. It\n\nwould not have left its resolution to the soothsaying of litigants.\n\n 3. Pool May Potentially Conflict with CTTI, But Does Not\n Overrule It.\n No later decisions suggests this Court overruled CTTI. Kizer, 228 S.W.3d at\n\n392 n.3, involved successive suits against a single defendant, not a \u201cone\n\nsatisfaction\u201d settlement credit. Without mentioning CTTI, the Court observed\n\nhypothetically that \u201cpotential recovery on [a later] breach of contract claim \u2026\n\nmight well be barred by [a previous recovery under] the one satisfaction rule which\n\nprohibits more than one recovery for a given harm.\u201d Id. Kizer did not address\n\nwhether a \u201cone satisfaction\u201d settlement credit applied to contractual liability.\n\n In Raley, the plaintiff sued in tort to enforce a previous judgment imposing a\n\ncontract against alleged alter egos of, and recipients of alleged fraudulent property\n\ntransfers from, the original judgment debtor. 2007 WL 74316 at *3, 13. In response\n\nto the plaintiff\u2019s misunderstanding about the nature of the liability in the\n\nenforcement suit, Id. at *18, Justice Patterson stated in dicta that credit under\n\n\u201c[t]he one satisfaction rule is consistent with principles of contract law, which\n\n\n 27\n\fpreclude a non-breaching party from recovering damages \u2026 that would put [it] in a\n\nbetter position than it would have been had the contract been fully performed.\u201d Id.\n\nat 19, n. 22. The court did not and could not rule the liable defendant was entitled\n\nto a \u201cone satisfaction\u201d settlement credit for contract liability because the liability in\n\nthe case before the court was based on a tort.\n\n As already discussed, Osborne simply recited the standard \u201cboilerplate\u201d\n\nfrom cases that imported the election-of-remedies \u201cone satisfaction\u201d rule, see\n\nII.C.1, supra., and mingled it with the observation in tort cases that the \u201cone\n\nsatisfaction\u201d settlement credit was available because of the nature of the injury, not\n\nthe cause of action. It neither expressly nor implicitly overruled CTTI.\n\n Pool, on the other hand, at least superficially conflicts with CTTI because it\n\napplied the \u201cone satisfaction\u201d settlement credit to dispose of an alternative\n\ncontractual liability theory. 262 S.W.3d at 574. Regardless of whether doing so\n\nwas necessary, the Pool opinion did not overtly consider 1) the original need for\n\nthe \u201cone satisfaction\u201d settlement credit; 2) the \u201crule\u201d about application regardless\n\nof theory of recovery is properly limited to election-of-remedy, not settlement\n\ncredit, cases; or 3) the first case expanding \u201cone satisfaction\u201d settlement credits\n\nbeyond tort cases relied on Berryman \u2013 an election-of-remedies case. (Cross-\n\nAppellants\u2019 49-50).\n\n\n\n\n 28\n\f Even if a conflict existed between CTTI and Pool, CTTI controls. CTTI\n\nexpressly considered and independently analyzed whether the \u201cone satisfaction\u201d\n\nsettlement credit applied in contract cases. The opinion in Pool did not.\n\nPresumably, the parties in Pool did not alert the court that cases holding the \u201cone\n\nsatisfaction\u201d rule applied regardless of liability theory were election-of-remedies,\n\nnot settlement credit, cases.\n\n 4. Conflicts With Other Cases.\n RLJ acknowledged that there are cases saying the \u201cone satisfaction\u201d\n\nsettlement credit applies to more than tort cases. (Cross-Appellants\u2019 48). Two such\n\ncases cited by the Architect \u2013 Oyster Creek Fin. Corp. v. Richwood Investments II,\n\nInc., 176 S.W.3d 307, 328 (Tex. App.\u2014Houston [1st Dist.] 2004, pet. denied), and\n\nBurke v. Union Pac. Res. Co., 138 S.W.3d 46, 70, (Tex. App.\u2014Texarkana 2004,\n\npet. denied) \u2013 this Court expressly declined to follow because they \u201chave not\n\ndiscussed the requirement of joint liability.\u201d CTTI, 164 S.W.3d at 685. The\n\nArchitect\u2019s cited decisions (Cross-Appellee\u2019s 7-8, 22) make no attempt to reconcile\n\nobservations about allowing credits for a non-tort liability with the reasons why the\n\n\u201cone satisfaction\u201d settlement credit was created 11 \u2013 reasons that only existed in tort\n\ncases. 12\n\n\n11\n Cunningham v. Haroona, 382 S.W.3d 492 (Tex. App.\u2014Fort Worth 2012, pet. denied),\ninvolved a medical malpractice wrongful death claim, so there was no reason to consider\nwhether the \u201cone satisfaction\u201d settlement credit applied to breach-of-contract liability.\n\n 29\n\fD. Extension of \u201cOne Satisfaction\u201d Settlement Credit to\n Contractual Liability Prohibited by Texas Constitution\n Article I, Section 16.\n Texas strongly favors parties\u2019 freedom of contract. Gym-N-I Playgrounds,\n\nInc. v. Snider, 220 S.W.3d 905, 912 (Tex.2007). Generally, parties are entitled to\n\nconsensually allocate risks and rewards by contract as they wish so long as there is\n\nno public policy violation. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 129\n\n& n. 11 (Tex.2004). It is difficult to imagine a greater infringement than\n\ninvoluntarily transferring a party\u2019s contract rights to benefit a wrongdoer who was\n\nnot a party to that agreement. Yet, the Architect argues Texas\u2019s constitutionally\n\nguaranteed contractual freedom only applies to statutory restrictions. The Texas\n\nSupreme Court perceived no such limitation when it considered this right\n\nparamount to a court-recognized public policy against insuring exemplary\n\n\n\n\nAMX, like Berryman, involved no \u201csettlement\u201d but was a case about what derivative\nliability remained when a jointly liable party paid part of the alleged debt. In Regions\nBank v. Bay, No. 05\u201312\u201300531\u2013CV, 2013 WL 5299174 at *4 (Tex. App.\u2014Dallas Sept.\n18, 2010, no pet.)(mem. op.), the plaintiff conceded the settlement was for the same loss\nand the opinion did not discuss applicability to contract liability. Emerson Elec. Co. v.\nAm. Permanent Ware Co., 201 S.W.3d 301, 314 (Tex. App.\u2014Dallas 2006, no pet.),\ninvolved an uncritical application of misguided language from Oyster Creek to support\napplication of the \u201cone satisfaction\u201d settlement credit to a breach of contract case.\n12\n Matthew v. Sohn, 13-12-00302-CV, 2013 WL 2949562 (Tex. App.\u2014Corpus Christi\n2013, no pet.)(mem. op.), involved whether the non-settling defendant was entitled to a\ncredit against DTPA liability from a settlement with a defendant sued for alleged tort\nliability. The court ruled it was solely because of an indivisible injury. Id. at *5. It did not\nconsider application to contract liability.\n\n\n 30\n\fdamages. Fairfield Ins. Co. v. Stephens Martin Paving LP, 246 S.W.3d 653, 664\n\n(Tex.2004).\n\n Restricting the guarantee to statutes is based on the federal parallel, Storrie\n\nv. Cortes, 90 Tex. 283, 287, 38 S.W. 154, 156 (1896), because, being located in\n\nArticle I, it only limited legislative power. The Texas freedom-of-contract\n\nprovision is contained in the Bill of Rights and limits the power of state\n\ngovernment generally. \u201cNo \u2026 law impairing the obligations of contract shall be\n\nmade\u201d by any branch, not just the Legislature. Tex. Const. art. I, \u00a716.\n\n The Architect also argues that art. I, \u00a716 does not apply because a \u201cone\n\nsatisfaction\u201d settlement credit is not a retroactive law. It reasons \u201cthe rule was in\n\nexistence long before any contract at issue.\u201d (Cross-Appellee\u2019s 25). This argument\n\nbegs the question this case presents: does any such rule apply to breach of contract\n\nclaims? In light of the cases holding it does not, see II.B., supra., it can hardly be\n\ndeemed an \u201cundisputed\u201d rule whose existence was certain. It cannot be deemed\n\npart of the settling parties\u2019 agreement. If it were, it would operate retroactively and\n\nunconstitutionally.\n\n III. CONCLUSION\n For the foregoing reasons and those stated in RLJ\u2019s previously-filed briefs,\n\nthe court should grant the relief RLJ has requested therein and all other relief to\n\nwhich RLJ may be justly entitled.\n\n\n\n 31\n\f Respectfully submitted,\n\n MUNSCH HARDT KOPF & HARR PC\n\n /s/Michael W. Huddleston\n Michael W. Huddleston\n State Bar No. 10148415\n J. Stephen Gibson\n State Bar No. 07866000\n 3800 Ross Tower\n 500 North Akard Street\n Dallas, TX 75201\n (214) 855-7500 Main Tel.\n (214) 855-7584 Main Fax\n mhuddleston@munsch.com\n sgibson@munsch.com\n\n Benton T. Wheatley\n State Bar No. 24015171\n Tracy McCreight\n State Bar No. 24037064\n Munsch Hardt Kopf & Harr, P.C.\n 401 Congress Avenue, Suite 3050\n Austin, TX 78701\n (512) 391-6100 Main Tel.\n (512) 391-6149 Main Fax\n bwheatley@munsch.com\n tmccreight@munsch.com\n\n Attorneys For Appellees and\n Cross-Appellants.\n\n\n\n\n32\n\f CERTIFICATE OF COMPLIANCE\n I hereby certify that this Appellees\u2019 Brief was prepared using Microsoft\n\nWord 2010, which indicated that the total word count (exclusive of those items\n\nlisted in Tex. R. App. P. 9.4(i)(1)) is 7479 words.\n\n /s/ Michael W. Huddleston\n Michael W. Huddleston\n\n\n CERTIFICATE OF SERVICE\n I certify that I served a true and correct copy of the foregoing document\n\nupon counsel listed below on this 16th day of July, 2015 by e-file:\n\nWeston M. Davis\nGregory N. Ziegler\nSteven R. Baggett\nMacdonald Devin, P.C.\n1201 Elm Street\n3800 Renaissance Tower\nDallas, TX 75270\n\n /s/ Michael W. Huddleston\n Michael W. Huddleston\n\n\n\n\n 33\n\f"} -{"text": "\n563 So.2d 824 (1990)\nFelicia BLAIR, Appellant,\nv.\nSTATE of Florida, Appellee.\nNo. 87-03264.\nDistrict Court of Appeal of Florida, Second District.\nJuly 6, 1990.\nJames Marion Moorman, Public Defender and Kevin Briggs, Asst. Public Defender, Bartow, for appellant.\nRobert A. Butterworth, Atty. Gen., Tallahassee, and Charles Corces, Jr., Asst. Atty. Gen., Tampa, for appellee.\n*825 RYDER, Acting Chief Judge.\nFelicia Blair challenges the trial court's order denying her motion to suppress the cocaine found on her. Because we hold that the police officer had no founded suspicion to detain and search Blair, we reverse.\nBlair was charged with possession of cocaine. She filed a motion to suppress, arguing that an illegal search uncovered the seized cocaine. The trial court denied this motion. Blair entered a no contest plea reserving the right to appeal the motion to suppress. The trial court adjudicated Blair guilty and sentenced her to two years of community control.\nOn March 31, 1987, Officer David Livingston stopped a motor vehicle for speeding. Blair was a passenger in the car. When the driver failed to produce the registration for the vehicle, Livingston asked for permission to search the automobile. The driver consented to the search. All occupants of the vehicle were ordered to exit the car. As Blair got out of the automobile, Livingston noticed a bulge in the front of her pants. Livingston found no contraband in the car.\nAfter searching both male occupants of the car, Livingston read Miranda rights to Blair and explained the interdiction program to her. Livingston later testified that he did not believe that Blair was armed or dangerous and added that he did not ask for Blair's consent to a search of her person. Livingston testified he told Blair, \"If you have rock cocaine, go ahead and pull it out.\" He further advised Blair that if she did not pull the cocaine out, he would have a female officer search her. After Livingston asked Blair to explain the bulge in her pants, she pulled out two bags containing cocaine.\nIn order for the temporary detention of Blair to be lawful, the officer must have a \"founded\" suspicion of criminal activity. Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). Livingston found no contraband in the stopped vehicle or on the other occupants. A \"bare\" suspicion of illegal activity cannot support a stop. Freeman v. State, 433 So.2d 9 (Fla. 2d DCA 1983). Livingston did not have a \"founded\" suspicion that Blair was involved in criminal conduct, possessed a weapon or was, in fact, dangerous. Thus, the detention of Blair after searching the car was illegal.\nLivingston's conduct in demanding Blair to pull the cocaine out of her pants constituted a search. See Wallace v. State, 540 So.2d 254 (Fla. 4th DCA 1989). The situation confronting Livingston had stabilized, and he did not feel he was in danger, therefore, he had no probable cause to conduct a search. Thomas v. State, 533 So.2d 861 (Fla. 2d DCA 1988). Observing the bulge in Blair's pants does not amount to probable cause which would justify a search. See Gray v. State, 550 So.2d 540 (Fla. 4th DCA 1989). Because Livingston had no probable cause to search Blair and she did not consent to the search, the cocaine was illegally seized. The judgment and sentence are reversed and set aside and the case is remanded for entry of an order granting the motion to suppress and for further proceedings consistent with this opinion.\nReversed and remanded.\nHALL and ALTENBERND, JJ. concur.\n"} -{"text": "\n336 F.Supp.2d 890 (2004)\nWillie R. HAMBRICK, Plaintiff\nv.\nFIRST SECURITY BANK, Defendant.\nNo. 4:04CV00067 JLH.\nUnited States District Court, E.D. Arkansas, Western Division.\nSeptember 17, 2004.\n*891 Robert M. Abney, District Judge, Attorney at Law, Des Arc, AR, for Plaintiff.\nBuck Canyon Gibson, Millar Gibson, P.A. Searcy, AR, for Defendant.\n\nOPINION AND ORDER\nHOLMES, District Judge.\nWillie Hambrick alleges that First Security Bank violated the anti-assignment provision of the Social Security Act, 42 U.S.C. \u00a7 407, as well as Arkansas law, when it offset funds deposited directly by the Social Security Administration into Hambrick's closed bank account against an account overdraft and an amount due on an unpaid promissory note. First Security Bank filed a motion for summary judgment (Docket # 7), arguing that it acted pursuant to the set-off provisions contained in the contract for the bank account and in the promissory note. For the reasons stated below, First Security Bank's motion for summary judgment is GRANTED in part and DENIED in part.\nA court should grant summary judgment 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.\" Fed.R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The party moving for summary judgment bears the initial responsibility of informing the district court of the basis of its motion and identifying the portions of the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Group Health Plan, Inc. v. Philip Morris USA, Inc., 344 F.3d 753, 763 (8th Cir.2003). When the moving party has carried its burden under Rule 56(c), the non-moving party must \"come forward with `specific facts showing that there is a genuine issue for trial.'\" Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1985) (quoting Fed.R.Civ.P. 56(c)). The non-moving party sustains this burden by showing that \"there are genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.\" Anderson, 477 U.S. at 250, 106 S.Ct. 2505. When a non-moving party cannot make an adequate showing on a necessary *892 element of the case on which that party bears the burden of proof, the moving party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. In deciding a motion for summary judgment, the court must view the facts and inferences in the light most favorable to the party opposing summary judgment. Boerner v. Brown & Williamson Tobacco Corp., 260 F.3d 837, 841 (8th Cir.2001).\nThe facts are, for the most part, undisputed. On June 24, 1996, Hambrick and his wife opened a joint checking account, account # XXXXXXX, with First Security Bank. The account agreement signed by Hambrick contained the following set-off provision:\nYou each agree that we may (without prior notice and when permitted by law) set off the funds in this account against any due and payable debt owed to us now or in the future, by any of you having the right of withdrawal, to the extent of such persons' or legal entity's right to withdraw. If the debt arises from a note, \"any due and payable debt\" includes the total amount of which we are entitled to demand payment under the terms of the note at the time we set off, including any balance the due date for which we properly accelerate under the note.\nHambrick overdrew this account until it had a negative balance of $405.40. He alleges that First Security Bank closed this account on March 24, 2003, due to the overdraft. In response to the motion for summary judgment, Hambrick has produced a letter dated June 11, 2003, from Brenda Reynolds of First Security Bank stating this fact. The account agreement attached to First Security Bank's motion bears the date, March 24, 2003, in a handwritten notation in the top right corner underneath the notation, \"CO $405.40.\" In its answer to Hambrick's complaint, First Security Bank denied that it closed the account, but it has produced no evidence contradicting Hambrick's assertion.\nHambrick was also indebted to First Security Bank pursuant to a promissory note that he and his wife executed in favor of First Security Bank on May 31, 2001, in the amount of $37,600.00. The note was secured by a lien on Hambrick's mobile home and a mortgage on his real property. The note gave First Security Bank a right of set-off in the case of default. In its relevant portion, the note stated:\nI agree that you may set off any amount due and payable under this note against any right I have to receive money from you.\n\"Right to receive money from you\" means:\n(a) any deposit account balance I have with you;\n(b) any money owed to me on an item presented to you or in your possession for collection or exchange; and\n(c) any repurchase agreement or other nondeposit obligation.\n\"Any amount due and payable under this note\" means the total amount of which you are entitled to demand payment under the terms of this note at the time you set off. This total includes any balance the due date for which you properly accelerate under this note.\nHambrick defaulted on the note. As a result, First Security Bank accelerated the sum due and foreclosed on the real and personal property. After the sale of this property, an indebtedness on the note in the amount of $19,226.30 remained unpaid. Hambrick asserts that First Security Bank failed to pursue a deficiency judgment, but neither party introduced records from the foreclosure proceeding to show whether or not First Security Bank's claims for the unpaid balance were merged into the foreclosure judgment.\n*893 On June 11, 2003, which apparently was after the sale of the property in foreclosure, the Social Security Administration made a direct deposit into account 1431390 in the amount of $23,562.33. This amount constituted a lump sum payment of accrued Social Security disability benefits due to Hambrick. Upon acceptance of the funds into account 1431390, First Security Bank applied the deposit as a set-off against the account overdraft and the unsatisfied portion of the note. After the set-off, it forwarded the remaining balance of $3,930.63 to Hambrick's attorney.\n\nSOCIAL SECURITY ACT\nSection 407(a) of the Social Security Act states:\nThe right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.\n42 U.S.C. \u00a7 407. Section 407(a) prohibits the transfer or assignment of any future payment of Social Security benefits, and it also protects \"moneys paid or payable\" from \"execution, levy, attachment, garnishment, or other legal process.\" 42 U.S.C. \u00a7 407(a). Hence, Congress saw fit to provide, first, that future payments of Social Security benefits are not transferrable or assignable, and, secondly, that moneys paid or payable are exempt from execution, levy, attachment, garnishment, other legal process, or operation of bankruptcy and insolvency laws. See In the Matter of Capps, 251 B.R. 73 (Bankr.D.Neb.2000). Section 407 thus provides comprehensive protection that places payments of Social Security benefits beyond the reach of creditors. Such protection is consistent with the purpose behind the Social Security Act, the \"protection of its beneficiaries from some of the hardships of existence.\" Mazza v. Sec'y of Dep't of Health and Human Serv., 903 F.2d 953, 960 (3rd Cir.1990) (quoting U.S. v. Silk, 331 U.S. 704, 711, 67 S.Ct. 1463, 91 L.Ed. 1757 (1947)). See also Helvering v. Davis, 301 U.S. 619, 641, 57 S.Ct. 904, 81 L.Ed. 1307 (1937).\nFirst Security Bank argues that \u00a7 407(a) does not apply to lump sum payments of accrued benefits payable under that Act. However, \u00a7 407 makes no distinction between lump sum payments and other payments. Section 407 \"imposes a broad bar against the use of any legal process to reach all social security benefits.\" Philpott v. Essex County Welfare Bd., 409 U.S. 413, 417, 93 S.Ct. 590, 34 L.Ed.2d 608 (1973) (emphasis added). Hence, \u00a7 407 reaches \"all Social Security benefits\"; it does not exempt lump sum payments from its protection. In Philpott, the Supreme Court applied \u00a7 407 to a lump sum payment of retroactive Social Security disability insurance benefits that had accrued over a period of more than two years. Section 407 makes no distinction between accrued funds and regular monthly payments. \"The protection afforded by \u00a7 407 is to `moneys paid.'\" Id. at 416, 93 S.Ct. 590.\nFirst Security Bank next argues that summary judgment should be granted because it acquired the Social Security moneys pursuant to its contractual right under the account and note agreements, rather than by writ of garnishment, attachment, execution, or by means of any other formal judicial act proscribed by \u00a7 407. However, \u00a7 407 protects not only against legal processes, it also prohibits the transfer or assignment of future payments of Social Security benefits. An agreement, even one voluntarily entered into by Hambrick, that transferred or assigned his rights to future payment of Social Security benefits to First Security *894 Bank to offset debts owed would violate \u00a7 407. Hambrick could, consistent with \u00a7 407, make payments on his debts from his Social Security benefits, but he could not transfer or assign payments that he had not received at the time of the agreement. The set-off provisions in the account agreement and the promissory note cannot lawfully apply to payments of Social Security benefits that Hambrick had not received when those agreements were executed. In light of the Supreme Court's direction to construe federal benefit statutory schemes liberally in order to \"protect funds granted by the Congress for the maintenance and support of the beneficiaries thereof\" (Porter v. Aetna Cas. & Sur. Co., 370 U.S. 159, 162, 82 S.Ct. 1231, 8 L.Ed.2d 407 (1962)), this Court is not persuaded by First Security Bank's argument that \u00a7 407 should be interpreted in any other way. See also Capps, 251 B.R. at 75.\nOther courts have applied \u00a7 407 to bank set-offs and have held that Social Security benefits are protected against this self-help remedy. See Tom v. First Am. Credit Union, 151 F.3d 1289, 1291-93 (10th Cir.1998); Capps, 251 B.R. 73. But cf. Frazier v. Marine Midland Bank, 702 F.Supp. 1000 (W.D.N.Y.1988); In re Gillespie, 41 B.R. 810 (Bankr.D.Colo.1984); Lopez v. Washington Mutual Bank, 302 F.3d 900 (9th Cir.2002). The Tenth Circuit Court of Appeals found no principled difference between using the court system to reach Social Security benefits and using a self-help remedy to offset those funds against a debt:\nWe can see no reason why Congress would, on the one hand, choose to protect Social Security beneficiaries from creditors who utilized the judicial system, a system that is built upon principles of fairness and protection of the rights of litigants, yet, on the other hand, leave such beneficiaries exposed to creditors who devised their own extra-judicial methods of collecting debts.\nTom, 151 F.3d at 1292 (citing Crawford v. Gould, 56 F.3d 1162, 1166 (9th Cir.1995)). Neither can this Court.\nEven if this Court were persuaded by the reasoning of the other courts cited by First Security Bank, namely the courts in Frazier, Gillespie, and Lopez, summary judgment would nonetheless be inappropriate in this case. Hambrick has presented evidence that creates a genuine issue of material fact and thus would preclude this Court from granting First Security Bank's motion for summary judgment. Because the status of account # XXXXXXX is at issue, and because First Security Bank has not met its burden of showing that its contractual right of set-off continued to exist after First Security Bank closed the account, the Court cannot say that First Security Bank was acting pursuant to a valid, effective contractual right.\nFrazier involved a contractual set-off of Social Security funds deposited into the plaintiff's bank against the unpaid balance on a defaulted loan with that bank. Frazier, 702 F.Supp. 1000. The court noted that the plaintiff could have effectively avoided this set-off by simply closing the account and opening another at a different bank. Id. at 1003. See also Gillespie. In this case, Hambrick has presented evidence that First Security Bank had closed his account prior to the set-off in question. The set-off provision in the account agreement does not specify that the right of set-off would continue after the account was closed. The agreement does contain a term entitled \"Amendments and Termination,\" which states, \"we may change any term of this agreement....We may also close this account at any time upon reasonable notice to you and tender of the account balance personally or by mail.\" It seems that closing the account would terminate the contract. Thus, even if the Court were to agree with First Security *895 Bank's interpretation of \u00a7 407, a genuine issue of material fact would exist as to whether First Security Bank acted pursuant to an effective contract at the time of the set-off.\n\nREMAINING STATE LAW CLAIMS\nFirst Security Bank also seeks the dismissal of each of the state-law claims that Hambrick raises in his complaint. In its motion for summary judgment, First Security Bank states that the state-law claims should be dismissed pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief may be granted. However, First Security Bank answered without asserting that any claims should be dismissed under Rule 12(b)(6). The Court will treat First Security Bank's argument as one for summary judgment, which is appropriate because matters outside the pleadings will be considered. Stahl v. U.S. Dept. of Agric., 327 F.3d 697, 700 (8th Cir.2003).\nIn addition to claiming a violation of the Social Security Act, Hambrick alleges that First Security Bank's actions constituted fraud, negligence, breach of fiduciary duty, conversion, negligent misrepresentation, and breach of good faith and fair dealing under the common law and the Arkansas Uniform Commercial Code. In his response to this motion for summary judgment, Hambrick admits that there is not a sufficient factual basis for his claims of fraud and breach of fiduciary duty. Accordingly, summary judgment will be granted on those claims.\nAs to Hambrick's claim for negligence, First Security Bank asserts that Hambrick fails to set forth the duty owed and to establish facts that constitute a breach of that duty. The question of what duty is owed is always one of law. Mans v. Peoples Bank of Imboden, 340 Ark. 518, 524, 10 S.W.3d 885, 888 (2000). Ordinarily, the relationship between a bank and its customer is one of debtor and creditor. Id. at 525, 10 S.W.3d at 889. The duty owed is one of ordinary care. Id. at 526, 10 S.W.3d at 889. In his response to this motion for summary judgment, Hambrick stated in a conclusory manner that First Security Bank's actions in reopening his closed account constituted negligence. Neither party has devoted much argument to this issue separate from the argument regarding \u00a7 407. Viewing the facts in the light most favorable to Hambrick and in the absence of substantial argument from either party, this Court cannot say as a matter of law that First Security Bank acted with ordinary care. As with so many of the claims that follow, a genuine issue of material fact exists as to the status of the account at the time of the set-off. Summary judgment on the negligence claim will be denied.\nFirst Security Bank next asserts that Hambrick cannot establish a cause of action for conversion because the set-off was exercised pursuant to the account and note agreements. Hambrick asserts that First Security Bank was required to return the funds to the Social Security Administration because account 1431390 had been closed. He alleges that its failure to do so constitutes conversion. In Arkansas, conversion requires the intent to exercise dominion or control over property which is inconsistent with the owner's right. J.W. Reynolds Lumber Co. v. Smackover State Bank, 310 Ark. 342, 351, 836 S.W.2d 853, 857 (1992). Whether the offset was contrary to Hambrick's right depends on whether that offset violated \u00a7 407 and whether, apart from \u00a7 407, there was a contract in effect at the time of the offset. First Security Bank has not met its burden of proving that it is entitled to judgment as a matter of law. Summary *896 judgment on the conversion claim will be denied.\nFirst Security Bank next argues that summary judgment should be granted on the claim for negligent misrepresentation. Arkansas does not recognize a cause of action for negligent misrepresentation. South County, Inc. v. First Western Loan Co., 315 Ark. 722, 725-726, 871 S.W.2d 325, 326 (1994). See also Boerner v. Brown & Williamson Tobacco Co., 126 F.Supp.2d 1160, 1170 (E.D.Ark.1999) (aff'd in part and rev'd in part on other grounds by Boerner v. Brown & Williamson Tobacco Corp., 260 F.3d 837 (8th Cir.2001)). Summary judgment on the claim of negligent misrepresentation will be granted.\nFinally, First Security Bank asserts that summary judgment should be granted on each of Hambrick's claims dealing with breach of common law and of the Arkansas Uniform Commercial Code duties of good faith and fair dealing. First Security Bank again refers to its right to set-off pursuant to its contractual agreements. It also appeals to the rights \"long afforded by Arkansas common law and explicitly recognized by the Arkansas Uniform Commercial Code.\" Neither party cites cases on a common-law right of set-off. The code provision cited by First Security Bank states that \"(a) Except as otherwise provided in subsection (c), a bank with which a deposit account is maintained may exercise any right of recoupment or set-off against a secured party that holds a security interest in the deposit account.\" Ark.Code Ann. 4-9-340. Whether the set-off was proper again revolves around the issue of whether the account was \"maintained,\" which is disputed. Summary judgment on breach of the duty of good faith and fair dealing will be denied.\n\nCONCLUSION\nDefendant's motion for summary judgment (Docket # 7) is GRANTED in part and DENIED in part.\n"} -{"text": "510 U.S. 1215\nPawlakv.Pennsylvania Board of Law Examiners.\nNo. 93-7488.\nSupreme Court of United States.\nMarch 21, 1994.\n\n1\nAppeal from the Sup. Ct. Pa.\n\n\n2\nMotion of petitioner for leave to substitute questions presented denied. Certiorari denied.\n\n"} -{"text": "\n613 N.W.2d 748 (2000)\n241 Mich. App. 133\nIn the Matter of Bianca Monyai GILLIAM, Constance Latrice Gilliam, Cortes Deshawn Gilliam and Chanell Chachet Gilliam, Minors.\nFamily Independence Agency, Petitioner-Appellee,\nv.\nLoyzes Gilliam, Sr., Respondent-Appellant, and\nIna Ray Gilliam, a/k/a Ina Ray Mixon, Respondent.\nDocket No. 218044.\nCourt of Appeals of Michigan.\nSubmitted January 19, 2000, at Detroit.\nDecided May 12, 2000, at 9:20 a.m.\nReleased for Publication July 26, 2000.\n*749 Jennifer M. Granholm, Attorney General, Thomas L. Casey, Solicitor General, Judy Hartsfield, Assistant in Charge, and Larry W. Lewis, Assistant Attorney General, for petitioner.\nMarcia J. Covert, Detroit, for Loyzes Gilliam, Sr.\nBefore: BANDSTRA, C.J., and HOLBROOK, JR., and FITZGERALD, JJ.\nHOLBROOK, JR., J.\nRespondent father appeals as of right from the family court order terminating his parental rights to his minor children under M.C.L. \u00a7 712.19b(3)(c)(i), (3)(g), and (3)(j); MSA 27.3178(598.19b)(3)(c)(i), (3)(g), and (3)(j). We reverse and remand.\nIn February 1996, petitioner, Family Independence Agency, filed the initial petition in this matter asking for the court to assume jurisdiction over the four minor children. Petitioner alleged that the children had suffered smoke inhalation after a fire broke out in respondent mother's apartment. The petition asserted that at the time of the fire, the children had been left alone in the apartment by respondent mother. The petition also alleged that respondent father, who was separated from respondent mother at the time of the fire, had indicated that he did not have a suitable home for the children and was not able to plan for them at that time. A supplemental petition was filed in July 1998. This later petition contained new and different allegations. Specifically, the supplemental petition alleged that respondent father had tested positive for cocaine use twice in 1996 and for cocaine or amphetamine use on eight occasions in 1998 and that he had failed to attend parenting classes and drug abuse therapy.[1]\nTwo witnesses were called by petitioner at the termination hearing. Esther Ryans, who worked at Evergreen Counseling Service (hereinafter Evergreen), testified that several drug screens submitted by respondent father had come back positive. Respondent father's hearsay objection to this testimony was overruled by the trial court. Ryans admitted that she did not know how the tests were conducted or what their accuracy rate was and that respondent father had consistently questioned the accuracy of the testing procedures and results obtained. The second witness was Kristin White, a therapist with Evergreen, who had been working with the children since 3 July 1997. White testified that some of the children had anxiety about visiting with respondent father because of his inability to control his anger. Respondent father's hearsay objection to this testimony was also overruled by the court. Ultimately, the court concluded that because of respondent father's possible substance abuse and anger management problems, the children would be at risk if they were returned to him.\n*750 Respondent father first contends that the trial court abused its discretion in admitting hearsay testimony concerning possible drug abuse and the children's anxiety over visiting with him. We agree. The rules of evidence apply at the adjudicative phase of a child protective proceeding. MCR 5.972(C)(1). However, the rules of evidence do not apply at the dispositional phase of the proceeding. MCR 5.973(A)(4)(a). Instead, \"[a]ll relevant and material evidence ... may be received and may be relied on to the extent of its probative value, even though such evidence may not be admissible at trial.\" Id. If termination is sought on the basis of one or more circumstances \"new or different\" from those that led to the original assumption of jurisdiction, \"[l]egally admissible evidence must be used to establish the factual basis of parental unfitness sufficient to warrant termination of parental rights.\" MCR 5.974(E)(1).\nThe primary factors relied on by the trial court for terminating respondent father's parental rights were an ongoing substance abuse problem and problems with anger management. Neither of these circumstances was related to the court's initial assumption of jurisdiction. Accordingly, these matters were required to be proved by legally admissible evidence. Id.; In re Snyder, 223 Mich.App. 85, 88-91, 566 N.W.2d 18 (1997). However, only inadmissible hearsay evidence was presented to establish both of these new and different circumstances. MRE 801. The drug abuse allegation was supported by drug screen results testified to by Ryans, while White's testimony was the only evidence presented relative to the issue of how respondent father's alleged anger management problems may have affected the children. Given that no legally admissible evidence was presented to establish these new circumstances, we conclude that the erroneous admission of this hearsay testimony was not harmless.\nAccordingly, we conclude that reversal is warranted. At the hearing regarding the supplemental petition, any allegations of new or different circumstances from those that justified the original assumption of jurisdiction must be established with legally admissible evidence. Because of our disposition of this issue, we need not address respondent father's claim that insufficient evidence was introduced to support the termination of parental rights.\nFinally, we will address the concurring judge's criticisms of In re Snyder. While we sympathize with our brethren's comments regarding the type of evidence that should be relied on by a court when faced with terminating a parent's fundamental interest in the care, custody, and management of the parent's children, we do not agree that In re Snyder misconstrues the relevant court rules. We believe that the In re Snyder analysis of the plain language and interplay of the relevant court rules was correct.\nWe reverse and remand for proceedings consistent with this opinion. We do not retain jurisdiction.\nFITZGERALD, J., concurred.\nBANDSTRA, C.J., (concurring).\nI agree with the majority that this matter must be reversed under the core holding of In re Snyder, 223 Mich.App. 85, 566 N.W.2d 18 (1997), that legally admissible evidence is required in termination proceedings brought on the basis of new or different circumstances unrelated to the offense that led the court to take jurisdiction. I write separately to question the scope of language found within Snyder concerning matters that were not critical to its outcome.\nSnyder says that whenever the basis for the court taking jurisdiction is related to the basis for seeking termination, legally admissible evidence need not be introduced to establish the basis for termination. Snyder, supra at 90, 566 N.W.2d 18. However, the rules require legally admissible evidence to support termination if it is sought at the initial dispositional hearing, without regard to whether the bases for jurisdiction and for termination *751 are related to one another. MCR 5.974(D)(3). Similarly, it is at least arguable that all forms of termination proceedings require legally admissible evidence to establish the statutory basis for termination. 5 Martin, Dean & Webster, Michigan Court Rules Practice, pp. 759-760 (legally admissible evidence must be introduced to support the grounds for termination in cases brought under MCR 5.974[D], MCR 5.974[E], and MCR 5.974[F]). On the other hand, there is commentary that would lead to the conclusion that legally admissible evidence is not required in termination proceedings under MCR 5.974(F). Note following MCR 5.993, Mich. Ct. R., p. R. 5.9-61; Staff Comment relative to order entered March 27, 1989, Mich. Ct. R., p. 5.9-65; see also 5 Martin, Dean & Webster, Michigan Court Rules Practice, pp. 813, 819 (when the basis for termination of rights is provided in a supplemental petition, and does not allege a new or different circumstance, the basis for termination may be proved by material and relevant evidence; when new or different circumstances are alleged, bases for termination must be proved by legally admissible evidence); Newman, Evidentiary Rules and Standards of Proof in Child Neglect and Abuse Cases, 75 Mich. BJ 1165, 1167 (1996) (when a supplemental petition is filed under MCR 5.974(F), the evidentiary standard is relaxed to allow all relevant and material evidence to the extent of its probative value.)\nIn my view, although any relevant and material evidence may be used in determining whether it is in the best interests of the child to terminate parental rights, only legally admissible evidence may be used when determining whether the statutory basis for termination has been established. In other words, I find the evidentiary standards found in subsections 1 and 2 of MCR 5.974(E) to be applicable in all termination contexts. I would not limit those standards as applying only where circumstances \"new or different\" from those supporting jurisdiction are alleged in support of termination. To the extent that MCR 5.974(F)(2) permits the court to consider \"evidence ... not ... admissible at trial,\" that evidence may only be considered on the \"best interests\" question.\nIn a similar vein, I question the statement in Snyder that \"termination ... solely on the basis of evidence not admissible in ordinary civil proceedings would be improper.\" Snyder, supra at 91, 566 N.W.2d 18. This implies that termination would be proper even if some legally inadmissible evidence was also considered by the court, as long as some legally admissible evidence was considered. As I see it, termination may or may not be proper if supported by such a combination of evidence, depending on whether the legally admissible evidence was itself sufficient to establish a statutory basis for the termination. It is possible that Snyder concluded only that termination is improper as a matter of law whenever it is based exclusively on legally inadmissible evidence. Under this reading of Snyder, impropriety might or might not be found in cases where both legally admissible and inadmissible evidence formed the basis for a decision that the statute was satisfied. In those cases, a harmless error analysis could be employed to determine the effect the legally inadmissible evidence had on that decision.\nMy interpretation of the rules derives in part from the need for procedural protections against the drastic sanction that termination of parental rights represents. Parents have a fundamental liberty interest in the care, custody, and management of their children. Santosky v. Kramer, 455 U.S. 745, 753, 102 S.Ct. 1388, 71 L.Ed.2d 599 (1982). \"If anything, persons faced with forced dissolution of their parental rights have a more critical need for procedural protections than do those resisting state intervention into ongoing family affairs.\" Id., see Lassiter v. Dep't of Social Services, 452 U.S. 18, 27, 101 S.Ct. 2153, 68 L.Ed.2d 640 (1981). Interpreting the rules to require that a statutory basis for termination must be shown by evidence that is legally admissible is particularly warranted in consideration of the fact that, once this hurdle is overcome, termination *752 is mandated absent a finding that it is not in the best interests of a child. MCL 712A.19b(5); MSA 27.3178(598.19b)(5). The statute itself requires \"clear and convincing evidence\" before a court is empowered to terminate rights. It seems inconsistent for the statute to require that petitioner show by clear and convincing evidence that termination is justified, while the rules allow the use of legally inadmissible and, thus, potentially unreliable evidence to satisfy this standard. The evidentiary rules should not undermine the procedural protections afforded by the statute.\nIn any event, parental rights are important, and the rules regarding the type of evidence that must be used before a court is authorized to terminate those rights should be clear. The provisions of MCR 5.974 are, at best, confusing; at worst, they establish admissibility standards that are irrationally inconsistent from one parental termination context to another. I encourage the Supreme Court to consider amendments to address this problem.\nNOTES\n[1] Drug testing, parenting classes, and therapy were some of the conditions set forth in the parent-agency treatment plan. Petitioner agreed at the termination hearing not to pursue other allegations of abuse.\n"} -{"text": "\n103 F.Supp. 971 (1952)\nKENNY et al.\nv.\nUNITED STATES et al.\nCiv. No. 1153-51.\nUnited States District Court D. New Jersey.\nMarch 26, 1952.\n*972 Harold Krieger, Jersey City, N. J., for plaintiffs.\nC. H. Johns, Washington, D. C., for Interstate Comm. Commission.\nWilliam A. Roberts, Washington, D. C., for Hudson & Manhattan R. R.\nWilliam J. Hickey, Special Asst. to Atty. Gen., Roger Yancey, Asst. U. S. Atty., Newark, N. J., for the United States.\nBefore HASTIE, Circuit Judge, and SMITH and HARTSHORNE, District Judges.\nSMITH, District Judge.\nThis is a civil action under Sections 2321 to 2325, inclusive, of Title 28 U.S.C., 28 U.S.C.A. \u00a7\u00a7 2321 to 2325. The jurisdiction of the Court is based upon the provisions of Section 1336 of Title 28 U.S.C., 28 U.S. C.A. \u00a7 1336. The plaintiffs seek: first, to set aside and annul an order heretofore entered by the Interstate Commerce Commission; and second, to enjoin the operation of a tariff filed by the Hudson & Manhattan Railroad Co., and the collection of fares thereunder. The action is before the *973 Court on the record made at the hearing before the Commission.\nThe defendants challenge the right of the plaintiffs to maintain this action. It appears from the record that several, if not all, of the plaintiffs have a real interest in the controversy and have a right to maintain the action; the others have a right to intervene therein. 28 U.S.C.A. \u00a7 2323. We, therefore, believe it unnecessary to discuss the question. It is our opinion that the case can, and should, be decided on the merits.\nThe Hudson & Manhattan Railroad Co., hereinafter identified as the Railroad, is engaged exclusively in the transportation of passengers; it handles no package, freight or express matter, except certain mail. It operates a rapid transit system between terminals in the cities of New York, N. Y., and Jersey City and Hoboken, N. J., and maintains stations at intermediate points between these terminals. The service which it renders may be described as a \"local interstate service.\"[1] The lines and basic services of the Railroad are fully described in the Report of the Commission.\nPursuant to the provisions of the \"Interstate Commerce Acts\" 49 U.S.C.A. \u00a7 1 et seq., and the regulations promulgated thereunder, the Railroad filed with the Commission a passenger tariff establishing a fare of twenty cents, an increase of five cents, for interstate transportation between points in the cities of New York, N. Y., and Jersey City and Hoboken, N. J. The tariff was published and filed on April 11, 1951, and by its terms was to become effective on May 13, 1951; this procedure was in compliance with Section 6(3) of the said Act. Thereafter the City of Jersey City and twelve other municipalities filed a formal protest.\nPursuant to the authority vested in it by Section 15(7) of the Act, 49 U.S.C.A. \u00a7 15(7), the Commission suspended the operation of the tariff for a period of seven months, the maximum permitted by statute, and initiated an investigation \"concerning the lawfulness\" of the fares established therein. (Suspension Orders entered on May 11 and May 25, 1951). Thereafter the proceeding was assigned for hearing before a designated examiner. The hearings, conducted on June 26, 27, 28 and July 16, 17, 18 and 19, were finally concluded on July 20, 1951. The proceeding was assigned for oral argument and was heard by the Commission on October 31, 1951 on the record made before the examiner. The decision of the Commission was reported and filed on December 3, 1951, and on that date it entered an order vacating the suspension and discontinuing the proceeding. The present action followed.\nThe principal grounds urged by the plaintiffs in support of this action are stated in Point One and Point Two of their brief. It is charged in the former that \"the Commission has failed so manifestly in the exercise of its powers and responsibilities as to present a case of arbitrariness and statutory ultra vires.\" It is charged in the latter that the Commission's order \"is arbitrary and ultra vires because it rests upon a total misconception by the Commission of the regulatory tasks which faced it in this case.\"\nA careful study of the arguments advanced under Point One discloses that the principal complaint is that the Commission \"made a determination of justness and reasonableness without proper findings, and on the basis of findings which are inadequate both on the face of its report and as tested by the record.\" The contention appears to be that the Commission failed to make the basic findings essential under the law to support its order and that its approval of the tariff was therefore arbitrary and not in accordance with the law. This contention is without merit.\nWe concede that the law imposes upon the Commission a duty to find and adequately state the basic facts upon which it has proceeded. United States v. Chicago, M., St. P. & P. R. Co., 294 U.S. 499, 504-506, 55 S.Ct. 462, 79 L.Ed. 1023; United States v. Baltimore & O. R. Co., 293 U.S. 454, 463, 55 S.Ct. 268, 79 L.Ed. 587; Florida v. United States, 282 U.S. 194, 215, 51 S.Ct. 119, 75 L.Ed. 291. An adequate statement *974 of fact is essential to the proper and intelligent review by the court of a proceeding conducted by the Commission; the sufficiency of such a statement, however, should be measured by the limits of the statutory power invoked, here the jurisdiction \"to prescribe just and reasonable\" rates and fares. Ibid. This jurisdiction is defined in Sections 15 and 15a of the Act, 49 U.S.C.A. \u00a7\u00a7 15 and 15a, particularly subdivisions (1) and (7) of the former and subdivision (2) of the latter.\nThe statutory standards which the Commission must apply in the exercise of its jurisdiction are defined by Section 15a(2), supra, as follows: \"In the exercise of its power to prescribe just and reasonable rates the Commission shall give due consideration, among other factors, to the effect of rates on the movement of traffic by the carrier or carriers for which the rates are prescribed; to the need, in the public interest, of adequate and efficient railway transportation service at the lowest cost consistent with the furnishing of such service; and to the need of revenues sufficient to enable the carriers, under honest, economical, and efficient management to provide such service.\" A proposed tariff may be approved as lawful only if it is determined to be \"just and reasonable\" in the light of these factors. It should be noted, however, that the statute does not exclude the consideration of \"other factors.\"\nThe statute reserves to the carrier a primary right to establish tariffs but vests in the Commission the authority to determine their \"lawfulness.\" United States v. Chicago, M., St. P. & P. R. Co., supra, 294 U.S. 506 and 510, 55 S.Ct. 462; Skinner & Eddy Corp. v. United States, 249 U.S. 557, 564, 565, 39 S.Ct. 375, 63 L.Ed. 772; Interstate Commerce Commission v. Louisville & Nashville R. Co., 227 U.S. 88, 92, 33 S.Ct. 185, 57 L.Ed. 431. This power is specifically defined by Section 15(7), supra. The burden is upon the carrier to prove not only that the proposed tariffs are \"just and reasonable\" but also that they are lawful. Ibid. The proposed tariffs may be approved as \"just, reasonable and not unlawful\" only if they meet the statutory requirements. A tariff initiated by the carrier pursuant to the provisions of the Act \"must be upheld as lawful unless adequate reasons are presented for setting it aside.\" United States v. Chicago, M., St. P. & P. R. Co., supra, 294 U.S. 510, 55 S.Ct. 467.\nThe report of the Commission must be examined in the light of these established principles and its sufficiency must be tested by the statutory criteria. United States v. Chicago, M., St. P. & P. R. Co., supra. It is our opinion that the report, when thus examined and tested, is adequate. It contains a comprehensive recital of the ultimate facts upon which the Commission proceeded and an adequate statement of the reasons which prompted its action.\nThe Commission found and concluded that the \"evidence as a whole indicates (1) that respondent is in need of an immediate substantial increase in revenue, which can be obtained only through substantially higher fares; (2) that the proposed fares do not exceed maximum reasonable fares; (3) that respondent's facilities are efficiently and economically operated, and their continued operation is necessary to the large majority of protestants; (4) that numerous improvements and economies have been and are being made by respondent in its operations; (5) that the principal expenses which the proposed fares are to offset are those resulting from the increased costs of labor, materials, and supplies which have occurred since 1948; that the evidence upon which the present fares were authorized was based upon financial and operating conditions for that year; and (6) that under the proposed fares respondent's revenues will be substantially increased.\" The Commission further found and concluded \"(1) that respondent's aggregate operating revenues are less than its reasonable expenses, and (2) that the proposed local interstate fares are just and reasonable and not otherwise unlawful.\"\nThese ultimate findings and conclusions are supported by the additional, subsidiary findings of fact stated in the report. The subsidiary findings of fact are germane to the ultimate facts found by the commission. They cover: (1) the value of the carrier's *975 properties; (2) the earning record and financial condition of the carrier; (3) the efficiency of management and operation; (4) the nature and extent of the service rendered and the need therefor; (5) the approximate cost per passenger for the service rendered; (6) the schedule of operations and the nature and extent of the traffic; (7) the increase in passenger accommodations and the consequent increase in car mileage; (8) the income, past and expected, from railway operations; (9) the income from sources other than railway operations; (10) the improvement program undertaken by the carrier and the necessity therefor; (11) the increase in the basic rates of wages and the effect thereof on the cost of operations; (12) the increase in the cost of materials and the effect thereof on the cost of operations; (13) the diversion of passenger traffic experienced by the carrier in past years and occasioned by the growth and availability of other means of transportation, to wit, other carriers and private automobiles; (14) the prospective loss of traffic reasonably ascribable to public resistance to the proposed increase; (15) the increase in revenue which may be expected from the proposed fare increase notwithstanding such public resistance; and (16) the need of the carrier for further revenue if it is to maintain an efficient railway operation.\nIt is our opinion, after a careful examination and study of the entire record, including the exhibits, that there was ample evidence to support the findings of fact stated by the Commission in its report. The arguments of the plaintiffs, as we understand them, necessarily invite \"the court to substitute its judgment for that of the Commission upon matters of fact within the Commission's province. This is not the function of the court.\" Interstate Commerce Comm. v. Atchison, T. & S. F. R. Co. (Los Angeles Switching Case), 234 U.S. 294, 314, 34 S.Ct. 814, 820, 58 L. Ed. 1319. It is settled that an order of the Commission, adequately supported by findings of fact, is conclusive unless it appears that (1) it is unjust and unreasonable in its consequences; (2) it is based upon a mistake of law; (3) it is not supported by substantial evidence; or (4) the Commission acted arbitrarily and exceeded its statutory powers. Interstate Commerce Commission v. City of Jersey City, 322 U.S. 503, 512, 513, 64 S.Ct. 1129, 88 L.Ed. 1420; Virginian Railway Co. v. United States, 272 U.S. 658, 663, 665, 666, 47 S.Ct. 222, 71 L.Ed. 463; Western Paper Makers' Chemical Co. v. United States, 271 U.S. 268, 271, 46 S.Ct. 500, 70 L.Ed. 941; Skinner & Eddy Corp. v. United States, supra, 249 U.S. 562, 39 S.Ct. 375. See also The Administrative Procedure Act, 5 U.S.C.A. \u00a7 1009(e); Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 487, et seq., 71 S.Ct. 456, 95 L.Ed. 456. The report of the Commission and the order entered thereon appear to be free of any such defects.\nThe general principle by which this Court must be guided was succinctly stated by the Supreme Court in the case of Mississippi Valley Barge Line Co. v. United States, 292 U.S. 282, 54 S.Ct. 692, 78 L.Ed. 1260. It is therein stated, 292 U.S. at pages 286 and 287, 54 S.Ct. at page 694: \"The structure of a rate schedule calls in peculiar measure for the use of that enlightened judgment which the commission by training and experience is qualified to form. (Citation omitted.) It is not the province of a court to absorb this function to itself. (Citations omitted.) The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body.\"\nThe statement made by the Supreme Court in earlier litigation, Interstate Commerce Commission v. City of Jersey City, supra, seems apposite in the present case. It is therein stated, 322 U.S. at pages 522 and 523, 64 S.Ct. at page 1138: \"The Interstate Commerce Commission has responsibility for maintaining an adequate system of wartime transportation. It is without power to protect these essential transportation agencies from rising labor and material costs. It can decide only how such unavoidable costs shall be met. They can in whole or in part be charged to increased fares, or they can be allowed to result in defaults and receiverships and reorganizations, *976 or they may be offset by inadequate service or delayed maintenance. All of these considerations must be weighed by the Commission with wartime transportation needs as well as avoiding inflationary tendencies as a public responsibility. The need for informed, expert and unbiased judgment is apparent. The problem is intricate, the carrier is one of peculiar characteristics, its wartime traffic is of varying density, with peaks and rush hours, the rates and carrying capacities of competitors by bus and ferry are involved in any estimate of traffic diversions or probable effects of rates. What rates are required to meet actual and proper operating expenses, what revenue must be available to avoid defaults and sustain credit, what divisions should be made on interchanged traffic are as complex problems in rate-making as can readily be imagined. The delicacy of the Commission's task in wartime is no reason for allowing greater scope to judicial review than we are willing to exercise in peacetime. * * * The scope of proper judicial review does not expand or contract, depending on what party invokes it. It is as narrow now as it was when appealed to by the Company. Cf. Hudson & Manhattan R. Co. v. United States, 313 U.S. 98, 61 S.Ct. 884, 85 L.Ed. 1212.\"\nIt is further contended that the Commission did not have before it sufficient evidence upon which to found \"a rate base.\" This contention seems to be fully answered by the Supreme Court in the opinion filed in the earlier litigation. It is therein stated, 322 U.S. at pages 512 and 513, 64 S.Ct. at page 1134: \"`Moreover, the Commission's order does not become suspect by reason of the fact that it is challenged. It is the product of expert judgment which carries a presumption of validity. And he who would upset the rate order under the Act carries the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences.' Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591, 602, 64 S.Ct. 281, 288 [88 L.Ed. 333]. The Commission considered that it had, and we find no reason to doubt that it had, the evidence before it that was needful to the discharge of its duty to the public and to the regulated railroad. `With that sort of evidence before them, rate experts of acknowledged ability and fairness, and each acting independently of the other, may not have reached identically the same conclusion. We do not know whether the results would have been approximately the same. For there is no possibility of solving the question as though it were a mathematical problem to which there could only be one correct answer. Still there was in this mass of facts that out of which experts could have named a rate. The law makes the commission's finding on such facts conclusive.'\" (Emphasis by the Court.)\nWe turn to the charge made in Point Two, to wit, that the order \"is arbitrary and ultra vires because it rests upon a total misconception by the Commission of the regulatory tasks which faced it in this case.\" The argument appears to be that the proper exercise of the statutory power to prescribe \"just and reasonable rates\" required the Commission to undertake an independent investigation under Section 19a of Title 49 U.S.C., 49 U.S.C.A. \u00a7 19a. It is interesting to note that the brief cites no authority in support of this argument. We have examined the statute and we find therein no such requirement.\nWe see no reason to discuss at length the many provisions of Section 19a because they would not seem to be pertinent to the issues here raised. We observe, however, that subdivision (i) provides: \"All final valuations by the commission and the classification thereof shall be published and shall be prima facie evidence of the value of the property in all proceedings under this chapter as of the date of the fixing thereof, and in all judicial proceedings for the enforcement of this chapter, and in all judicial proceedings brought to enjoin, set aside, annul, or suspend, in whole or in part, any order of the Interstate Commerce Commission.\" (Emphasis by the Court.)\nIt is apparent from an examination of the Act, and particularly Section 15(7) thereof, that the Commission may not found a \"just and reasonable rate\" on the basis *977 of its own valuation without having afforded the carrier not only the opportunity to be heard on such valuation but also the opportunity to offer evidence to refute it. The published valuation may be considered as prima facie evidence in the proceeding but it is clearly not conclusive.\nThe procedure which must be followed is prescribed by Section 15(7) of the Act, supra. The pertinent provisions of this section read as follows: \"Whenever there shall be filed with the commission any schedule stating a new individual * * * rate, fare, or charge, * * *, the commission shall have, and it is * * * given, authority, either upon complaint or upon its own initiative without complaint, at once, and if it so orders without answer or other formal pleading by the interested carrier or carriers, but upon reasonable notice, to enter upon a hearing concerning the lawfulness of such rate, fare, (or) charge, * * *.\" The statute clearly contemplates that the interested parties, both the carrier and protestants, shall be afforded an adequate opportunity to be heard on the merits of the controversy; nothing more would seem to be required. The right to be heard must be interpreted as embracing the right to present evidence.\nIt cannot be seriously contended that the plaintiffs in the instant case were not accorded a full and complete hearing. The record before the Commission includes more than 900 pages of testimony and 63 exhibits, most of which contain statistical data. The protestants were granted an adequate opportunity to present their objections to the proposed tariff and to offer evidence in support thereof.\nThe plaintiffs further contend that the failure of the Commission \"to serve a proposed report\" violated the procedural requirements of Section 8(a) of the Administrative Procedure Act, 5 U.S.C.A. \u00a7 1007 (a). The pertinent provisions of this Act read as follows: \"Whenever the agency makes the initial decision without having presided at the reception of the evidence, such officers (designated examiner) shall first recommend a decision except that in rule making * * * (1) in lieu thereof the agency may issue a tentative decision or any of its responsible officers may recommend a decision or (2) any such procedure may be omitted in any case in which the agency finds upon the record that due and timely execution of its functions imperatively and unavoidably so requires.\" (Emphasis by the Court.)\nSection 2(c) of the said Act, 5 U.S.C.A. \u00a7 1001(c) defines \"rule making\" as \"agency process for the formulation, amendment, or repeal of a rule.\" This section defines \"rule\" as \"the whole or any part of any agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy * * * and includes the approval or prescription for the future of rates, * * *.\" (Emphasis by the Court.) Section 15a(1) of the Interstate Commerce Acts, 49 U.S.C.A. \u00a7 15a(1), defines the term \"rates\" as \"rates, fares, and charges, and all classifications, regulations, and practices relating thereto.\" These statutory definitions must be read in pari materia.\nWe are of the opinion that the exceptions embodied in the Administrative Procedure Act, hereinabove quoted, were intended to permit the omission of a preliminary report or tentative decision where, as here, the law imposes upon the agency the duty to proceed expeditiously. Section 15(7) of the Interstate Commerce Acts, supra, provides: \"the Commission shall give to the hearing and decision of such questions preference over all other questions pending before it and decide the same as speedily as possible.\" This section further provides that if the proceeding \"has not been concluded and an order made within the period of suspension, the proposed change of rate, fare, charge, * * * shall go into effect at the end of such period\". These provisions require expeditious action, especially where, as here, the proposed tariff is suspended and a hearing thereon ordered.\nWe are of the further opinion that the Commission properly exercised the discretionary power vested in it by the provisions of the Administrative Procedure Act hereinabove quoted. It appears upon examination of the record that the hearings before the examiner were concluded at 12:30 a. m., *978 on July 20, 1951, and that the participants were permitted thirty days, until August 20, to file briefs. The time for filing briefs was thereafter extended until September 10, at the request of counsel for the plaintiffs. The participants were notified that the matter was listed for oral argument before the Commission on October 4, 1951. The oral argument was then twice adjourned, once on the application of counsel for the plaintiffs. The oral argument was held on October 31, and the report of the Commission was filed on December 3, 1951. It would appear from this recital of the history of the proceeding that further delay would have hampered the Commission in the discharge of its functions.\nThe record in this case was voluminous, and it would seem that the Commission had a right to make the initial decision without awaiting a tentative decision and recommendation by the examiner, provided, of course, \"that due and timely execution of its functions imperatively and unavoidably\" so required. The final report filed in this proceeding stated: \"No proposed report was served in this proceeding for the reasons that due and timely execution of our functions imperatively and unavoidably requires that there be no such report.\" The present record will not support a determination by this Court that the action of the Commission was arbitrary.\nThe error, if any, was a procedural one to which no objection was interposed by counsel for the plaintiffs. The designated examiner advised counsel at the conclusion of the hearing on July 20 that no proposed report would be filed in the proceeding. The record discloses that no objection was interposed upon his being so advised. The objection is here made for the first time and, therefore, should be dismissed as without merit. Unemployment Compensation Commission v. Aragon, 329 U.S. 143, 155, 67 S.Ct. 245, 91 L.Ed. 136; United States v. Hancock Truck Lines, 324 U.S. 774, 779, 65 S.Ct. 1003, 89 L.Ed. 1357. It may be inferred that counsel for the plaintiffs, by his failure to object and his subsequent conduct, acquiesced in the procedure followed by the Commission.\nWe have considered the other arguments advanced by the plaintiffs but we deem it unnecessary to decide the questions they raise. The complaint will be dismissed for the reasons herein stated. The defendants will prepare and submit to the Court, on notice to the plaintiffs, a proper order for judgment.\nNOTES\n[1] It also renders a local intrastate service between intermediate stations.\n"} -{"text": "\n456 F.Supp.2d 387 (2006)\nKimberly BORGES\nv.\nSEABULK INTERNATIONAL, INC. f/k/a HVIDE Marine Inc., Interocean Management Corporation, and The SS HMI Diamonds Shoals, In Rem.\nNo. 3:04CV324(DJS)(TPS).\nUnited States District Court, D. Connecticut.\nOctober 17, 2006.\n*388 Brian T. Foley, McGovern & Associates, New York City, Robert K. Lansden, Ponchatoula, LA, for Kimberly Borges.\nGregory W. O'Neill, James M. Hazen, Hill, Betts & Nash LLP, New York City, Robert K. Marzik, Stratford, CT, for Seabulk International, Inc. f/k/a HVIDE Marine Inc., Interocean Management Corporation, *389 and The SS HMI Diamonds Shoals, In Rem.\n\nRULING ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT\nSMITH, United States Magistrate Judge.\nThis case concerns personal injuries suffered by the plaintiff, Kimberly Borges, while working as a merchant seaman on the S.S. HMI Diamond Shoals, a large \"product tanker.\" The vessel is owned by Defendant Seabulk International Inc. (\"Seabulk\"), as the agent for Lightship Tankers V, LLC, and operated and managed by Defendant Interocean Management Corporation (\"Interocean\"). The defendants have filed a motion for summary judgment as to plaintiff's claims based on (1) unseaworthiness and (2) negligence. The motion is before the court pursuant to 28 U.S.C. \u00a7 636(c). (See Dkt. # 39.)\n\nI. SUMMARY OF FACTS\nThe court must view all the evidence presented by the moving party in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Viewing the facts in the light most favorable to the plaintiff, the record alleges the following events. The plaintiff began working as the Chief Mate on the S.S. HMI Diamond Shoals in July of 1998, while the vessel was at the shipyard in Newport News, Virginia. As Chief Mate, the plaintiff was second in command on the vessel. On March 4, 2001, while in service as the Chief Mate, the plaintiff was injured while conducting an annual inspection inside the forepeak ballast tank. During the interior inspection of the tank, the plaintiff walked from the starboard side of the tank to the port side in order to retrieve a piece of plastic. After the plaintiff turned around to begin her walk back across the tank, she fell into one of many \"lightening holes\" in the horizontal framing of the tank. The plaintiff has described a lightening hole as approximately the size of a manhole, with \"nothing around them to prevent stepping into one of them.\" (Pl.'s Dep. at 44). According to the plaintiff, the holes are scattered all over the deck in order to \"allow water to come up from the lower level of the forepeak . . . into the next level.\" Id. Although there were two other crew members inside the tank and one crew member directly outside the tank at the time of the accident, none of them were able to witness the plaintiff fall into the lightening hole.\nThe plaintiff was removed from the tank after the accident and brought ashore for medical treatment upon complaining of pain in her rib cage area. The physician's initial report stated that the plaintiff suffered no fractures, and was authorized to return to work in a \"light duty\" condition. The plaintiff returned to work in a light duty role but continued to suffer pain in her right chest and neck area. The plaintiff has continued to seek medical and chiropractic treatment since the accident, and has since been diagnosed with four unevenly healed ribs which were broken in the original fall. The uneven healing of the ribs has caused reoccurring pain in her back and other parts of her body.\nThe plaintiff filed the complaint in this action on February 26, 2004, seeking damages for (1) negligence under the Jones Act, 46 App. U.S.C. \u00a7 688; (2) unseaworthiness of the vessel; (3) maintenance and cure; and (4) punitive damages. The defendants denied all of the plaintiffs claims and filed a. Motion for Summary Judgment as to the negligence and unseaworthiness claims.\n\n\n*390 II. STANDANDARD OF REVIEW\nThe standards governing summary judgment are well-settled. Rule 56(c) of the Federal Rules of Civil Procedure states that summary judgment is appropriate \"if the pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.\" Fed.R.Civ.P. 56(c). The party moving for summary judgment bears the burden of demonstrating a lack of genuine issue as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). \"An issue of fact is `genuine' where the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'\" Giordano v. City of New York, 274 F.3d 740, 746 (2d Cir. 2001) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed2d 202 (1986)). \"A fact is `material' if it `might affect the outcome of the suit under the governing law.'\" Id. at 746-47. If evidence exists from which a reasonable inference could be drawn in favor of the nonmoving party, summary judgment is improper. Gummo v. Village of Depew, 75 F.3d 98, 107 (2d Cir.1996). All factual inferences are to be drawn in favor of the party against whom summary judgment is sought. Ramseur v. Chase Manhattan Bank, 865 F2d 460, 465 (2d Cir.1989).\n\nIII. DISCUSSION\nA. Negligence Claim under the Jones Act, 46 App. U.S.C. \u00a7 688\nIn her complaint, the plaintiff seeks to recover under the Jones Act, 46 App. U.S.C. \u00a7 688, for damages for personal injuries she sustained as a result of the defendants' alleged negligence while the plaintiff was working as a merchant seaman on the defendants' vessel. The Jones Act was enacted in 1920 to create a negligence cause of action for ship personnel against their employers. California Home Brands, Inc. v. Ferreira, 871 F.2d 830, 833 (9th Cir.1989). The Act extends to seamen and women the same rights accorded railway workers under the Federal Employers Liability Act (\"FELA\"). American Dredging Co. v. Miller, 510 U.S. 443, 455-56, 114 S.Ct. 981, 127 L.Ed.2d 285 (1994); Johannessen v. Gulf Trading & Transp. Co., 633 F.2d 653, 656 (2d Cir.1980). The Act therefore \"places . . . a duty on the [shipowner] to provide a reasonably safe workplace.\" Oxley v. City of New York, 923 F.2d 22, 25 (2d Cir.1991) (citing Mahnich v. Southern S.S. Co., 321 U.S. 96, 102-03, 64 S.Ct. 455, 88 L.Ed. 561 (1944)).\nThe standards of proof for negligence and causation under the Jones Act are the same as that of the FELA. American Dredging, 510 U.S. at 455-56, 114 S.Ct. 981; Johannessen, 633 F.2d at 656. As the Second Circuit recently stated, \"the plaintiff's burden in making a showing of causation and negligence is lighter under FELA than it would be at common law.\" Tufariello v. Long Island R.R. Co., 458 F.3d 80, 87 (2d Cir.2006). Under FELA, and by extension, the Jones Act, an employer has \"a duty to provide its employees with a safe workplace,\" which it has breached \"if it knew or should have known of a potential hazard in the workplace, and yet failed to exercise reasonable care to inform and protect its employees.\" Id. (quoting Ulfik v. Metro-North Commuter R.R., 77 F.3d 54, 58 (2d Cir.1996)).\nAs compared to a common law negligence action, however, \"the standard of proof for causation when asserting negligence under the Jones Act is relaxed, sometimes termed `featherweight: \" Evans v. United Arab Shipping Co, SAG., 4 F.3d 207, 210 (3d Cir.1993). In order to *391 sustain their burden on summary judgment, the defendants' must show an absence of evidence that could \"`justify with reason the conclusion that employer negligence played any part, even the slightest, in producing the injury.'\" Wills v. Amerada Hess Corp., 379 F.3d 32, 50 (2d. Cir.2004)(emphasis in original)(quoting Rogers v. Mo. Pac. R.R. Co., 352 U.S. 500, 506, 77 S.Ct. 443, 1 L.Ed.2d 493 (1957)). As such, an employer may be held liable under FELA and the Jones Act \"for risks that would otherwise be too remote to support liability at common law.\" Ulfik, 77 F.3d at 58. Furthermore, in Jones Act cases \"[t]he right of the jury to pass upon the question of fault and causation must be most liberally viewed.\" Oxley, 923 F.2d at 25 (quoting Johannessen, 633 F.2d at 656).\nWith these principles in mind, the court finds that there are material fact issues in this case that cannot be resolved at the summary judgment stage and must therefore be submitted to the trier of fact. First, there is an issue of material fact as to whether the defendants' duty to provide a reasonably safe workplace was breached by not providing intrinsically safe droplights inside the ballast tank. The plaintiff contends that intrinsically safe droplights were provided to sister vessels owned and operated by the defendants, that these lights would have dramatically changed the visibility of the space, that no other drop lights can be used aboard product tankers due to the combustible nature of the cargo, and that she complained to the Captain on multiple occasions regarding the lack of lights. There is a material fact issue as to whether the defendants' duty to provide a reasonably safe workplace required installation of lights inside the ballast tank.\nSecond, under the relaxed standard on causation applicable to the Jones Act, there is a genuine .issue of material fact as to whether the failure to provide the lights played a part in causing the plaintiff's injuries. Although the plaintiff, as the defendants' point out, saw some of the lightening holes while inside the tank, she stated in her deposition that she \"probably [would] not\" have fallen in a lightening hole if the droplights had been available. (Pl.'s Dep. at 115). Thus, there is a material fact issue as to whether the lack of lighting inside the tank played \"a part, even the slightest,\" Amerada Hess, 379 F.3d at 50, in causing the plaintiffs injuries.\nIn addition, the court notes that the plaintiff's failure to provide expert testimony on causation is not fatal. Expert testimony \"`usually is necessary to establish a causal connection between an injury and its source unless the connection is a kind that would be obvious to laymen, such as a broken leg from being struck by an automobile.'\" Tufariello, 458 F.3d at 89 (quoting Simpson v. Northeast Ill. Reg'l Commuter R.R. Corp., 957 F.Supp. 136, 138 (N.D.Ill.1997)). Here, the court finds that a layman could easily establish the causal connection between the alleged insufficient lighting in the ballast tank and the injuries suffered by the plaintiff while attempting to navigate around the lightening holes in the tank's framing, and thus expert testimony is unnecessary. Accordingly, the defendants' Motion for Summary Judgment as to the claim of negligence under the Jones Act is DENIED.\nB. Unseaworthiness Claim\nThe plaintiffs complaint also contains a cause of action for failure to furnish a seaworthy vessel. The Supreme Court has made clear that a ship owner is strictly liable for personal injuries caused by his or her vessel's \"unseaworthiness.\" Mitchell v. Trawler Racer, Inc., 362 U.S. 539, 549, 80 S.Ct. 926, 4 L.Ed.2d 941 (1960). A vessel is unseaworthy if the *392 vessel, crew and appurtenances are not \"reasonably fit for their intended use.\" Id. at 550, 80 S.Ct. 926. \"The standard is not perfection, but reasonable fitness; not a ship that will weather every conceivable storm or withstand every imaginable peril of the sea, but a vessel reasonably suitable for her intended service.\" Id. The condition of unseaworthiness is a question of fact that generally should not be resolved by the court as a matter of law. Cook v. American S.S. Co., 53 F.3d 733, 742 (6th Cir.1995)\nIn the instant case, the plaintiff asserts that the proper safety equipment, in the form of intrinsically safe droplights, was not provided, and that the failure to provide these lights was the proximate cause of her injuries. She also alleges that intrinsically safe droplights were provided to sister vessels owned and operated by the defendants, and that no other lights could have been used on board the tanker due to the combustible nature of the cargo. Neither of these two assertions have been contested by the defendants, and all factual inferences are to be drawn in favor of the party against whom summary judgment is sought. Ramseur v. Chase Manhattan Bank, 865 F.2d 460, 465 (2d Cir. 1989). As the Second Circuit has noted, \"[a] ship is considered to be unseaworthy when it is 'insufficiently or defectively equipped.'\" Oxley v. City of New York, 923 F.2d 22, 25 (2d Cir.1991) (quoting Waldron v. Moore-McCormack Lines, Inc., 386 U.S. 724, 726, 87 S.Ct. 1410, 18 L.Ed.2d 482 (1967)); see Poignant v. United States, 225 F.2d 595, 598 (2d Cir.1955). On the record before the court, a reasonable jury could conclude that the vessel was rendered unseaworthy by the lack of droplights in the ballast tank.\nThere are also material fact issues as to whether the alleged unseaworthiness of the vessel was the proximate cause of the plaintiffs injuries. To prevail on an unseaworthiness claim, a plaintiff must establish that a vessel's unseaworthy condition was the proximate cause of his or her injuries. Miller v. Am. President Lines, Ltd., 989 F.2d 1450, 1463-64 (6th Cir.1993). A vessel's unseaworthiness is the proximate cause of a plaintiff's injuries if it was a substantial factor in causing such injuries. Id. at 1464. In other words, unseaworthiness proximately causes an injury if it \"`played a substantial part in bringing about or actually causing the injury and the injury was either a direct result or a reasonably probable consequence of unseaworthiness.\" Id. (quoting Johnson v. Offshore Express, Inc., 845 F.2d 1347, 1354 (5th Cir.1988)). Whether the alleged failure to properly equip the vessel was the result of negligence on the defendants' part is irrelevant. Barlas v. United States, 279 F.Supp.2d 201, 206 (S.D.N.Y. 2003). On the record before the court, there is a genuine issue of material fact as to whether the alleged unseaworthiness was the proximate cause of the plaintiffs injuries. Although the plaintiff was able to see some of the lightening holes while walking across the horizontal framing of the tank, she stated in her deposition that she \"probably [would] not\" have fallen in a lightening hole if the droplights had been available. (Pl.'s Dep. at 115). Therefore, the defendants' Motion for Summary Judgment as to the claim of unseaworthiness is DENIED.\nC. Primary Duty Rule as a Bar to Recovery\nWith regard to the defendants' contention that the primary duty doctrine precludes recovery on both the negligence and unseaworthiness claims, the court does not agree. The Primary Duty Rule, or Walker doctrine, arises from Judge Learned Hand's opinion in Walker v. *393 Lykes Brothers S.S. Co., 193 F.2d 772 (2d Cir.1952). Under this rule, a supervising seaman cannot recover for his injuries when he breaches \"a duty which the injured person has consciously assumed as a term of his employment.\" Id. at 774. When applicable, the Primary Duty Rule therefore acts as an absolute bar to a seaman's recovery under the Jones Act. Id. At the outset, the court notes the questionable continued validity of the Walker doctrine in this Circuit. See Lombas v. Moran Towing & Transp. Co., 899 F.Supp. 1089 (S.D.N.Y.1995); McSpirit v. Great Lakes Int'l, 882 F.Supp. 1430, 1432 (S.D.N.Y.1995) (noting that \"Walker's continuing viability is doubtful\"). In Dunbar v. Henry Du Bois' Sons Co., Inc., 275 F.2d 304, 306 (2d Cir.), cert. denied, 364 U.S. 815, 81 S.Ct. 45, 5 L.Ed.2d 46,(1960), two of the three judges on a panel of the Court of Appeals expressly rejected the Walker doctrine as \"incompatible with the congressional mandate that contributory negligence and assumption of risk shall not bar recovery in a Jones Act case.\" Id. at 306.\nEven if the Primary Duty Rule remains viable in this Circuit, the court finds little merit in its application to this case at the summary judgment stage. As the defendants' themselves point out in their motion, the Primary Duty Rule acts as an absolute bar to recovery by a ship's officer \"when there is no other cause of the officer's injuries other than the officer's breach of his consciously assumed duty to maintain safe conditions aboard the vessel.\" Wilson v. Maritime Overseas Corp., 150 F.3d 1, 11 (1st Cir.1998). \"As Judge Hand noted in Walker, the bar is not based on the contributory negligence of the officer, but on a finding of no negligence of the employer.\" Kelley v. Sun Transp. Co., 900 F.2d 1027, 1031 (7th Cir. 1990). According to the plaintiff, it is the responsibility of the Master to the Port Captain to get a piece of equipment \"that is not in place that is essential for the operation of that vessel,\" (Pl.'s Dep. at 116), and she recommended to the Captain that they should get a number of items that previous vessels to leave the shipyard possessed, including intrinsically safe droplights. There is a genuine issue of material fact as to whether the plaintiff's consciously assumed duty, as the seaman primarily responsible for safety on the ship, extended to furnishing the vessel with specific equipment that the owner had not supplied despite repeated requests. Moreover, there is sufficient evidence for a reasonable jury to conclude that the plaintiff s injuries were in fact a result of the defendants' breach of their own duty to provide their employees with a safe workplace and/or a seaworthy vessel. Under either scenario, the Primary Duty Rule would be inapplicable. Therefore, the Primary Duty Rule cannot act as a bar to the plaintiffs claims at the summary judgment stage, and its applicability must be submitted to the trier of fact.\n\nIV. CONCLUSION\nFor the foregoing reasons, the Defendants' Motion for Summary Judgment is DENIED on both counts.\n"} -{"text": " *** NOT FOR PUBLICATION IN WEST\u2019S HAWAI#I REPORTS AND PACIFIC REPORTER ***\n\n\n\n Electronically Filed\n Supreme Court\n SCWC-11-0000661\n 18-JUN-2014\n 07:54 AM\n\n\n\n\n SCWC-11-0000661\n\n IN THE SUPREME COURT OF THE STATE OF HAWAI#I\n\n\n STATE OF HAWAI#I,\n Respondent/Plaintiff-Appellee,\n\n vs.\n\n STANLEY K. HUIHUI, JR.,\n Petitioner/Defendant-Appellant.\n\n\n CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS\n (CAAP-11-0000661; FC-CR. NO. 10-1-27K)\n\n MEMORANDUM OPINION\n (By: Recktenwald, C.J., Nakayama, McKenna and Pollack, JJ.,\n and Circuit Judge Sakamoto, in place of Acoba, J., recused)\n\n Following a bench trial, Petitioner Stanley K. Huihui,\n\nJr. (Huihui) was convicted of Abuse of Family or Household\n\nMembers, Terroristic Threatening, and Unlawful Imprisonment. His\n\nconvictions were affirmed by the Intermediate Court of Appeals\n\n(ICA). On application to this court, Huihui contends that the\n\nFamily Court of the Third Circuit (family court) abused its\n\ndiscretion when it precluded evidence of the complaining\n\nwitness\u2019s (CW\u2019s) propensity for self-harm. Because such evidence\n\f *** NOT FOR PUBLICATION IN WEST\u2019S HAWAI#I REPORTS AND PACIFIC REPORTER ***\n\n\nwould have been relevant to establish that Huihui reasonably\n\nbelieved that the CW was attempting to harm herself, it should\n\nhave been admitted.\n\n I. BACKGROUND\n\n Huihui\u2019s appeal arises from an incident where he\n\nallegedly confined the CW in his vehicle, threatened her, and\n\ncommitted various acts of physical abuse on her person. Huihui\n\nwas charged by complaint with one count of Abuse of Family or\n\nHousehold Members, HRS \u00a7 709-906, one count of Terroristic\n\nThreatening in the Second Degree, HRS \u00a7\u00a7 707-715(1) and 707-\n\n717(1), and one count of Unlawful Imprisonment in the Second\n\nDegree, HRS \u00a7 707-722(1).\n\n Prior to trial, Huihui filed a motion to introduce\n\ncharacter evidence of the CW\u2019s \u201csuicidal tendencies\u201d pursuant to\n\nHawai#i Rules of Evidence (HRE) Rule 404(a)(2). The family court\n\ndid not dispose of Huihui\u2019s motion until August 10, 2011, when\n\nthe case proceeded to a bench trial.1 At the start of the\n\nproceedings, Huihui made an oral motion to introduce an audio\n\nrecording:\n DEFENSE COUNSEL: I\u2019ll do also an oral motion in limine\n regarding . . . an audio recording that was provided . . .\n to me by the State. That audio recording occurred . . . two\n or three days prior to this incident.\n\n THE COURT: When did you receive this recording?\n\n DEFENSE COUNSEL: I received the recording . . . last week.\n\n\n 1\n The Honorable Joseph P. Florendo, Jr. presided.\n\n 2\n\f *** NOT FOR PUBLICATION IN WEST\u2019S HAWAI#I REPORTS AND PACIFIC REPORTER ***\n\n\n I actually requested the recording because . . . the\n defense, would like to introduce it. I think that the State\n with my discussions with [the Prosecutor] stated that there\n would be an objection regarding relevance[,] so we could\n address . . . whether that recording will be allowed into\n evidence or not.\n\n THE COURT: Well, why don\u2019t you wait until that time comes.\n\n DEFENSE COUNSEL: We can do it that way, too.\n\n The trial itself hinged on a credibility determination:\n\nWhether to believe the CW\u2019s or Huihui\u2019s version of events. The\n\nCW testified as follows. She and Huihui got into an argument\n\nwhile driving in Huihui\u2019s truck. Huihui eventually pulled his\n\ntruck to the side of the road and punched the CW in the face.\n\nWhen the CW tried to open her passenger-side door, Huihui grabbed\n\nher arm and told her that if she got out, he was going to punch\n\nher in the face again. The CW then jumped into the back seat of\n\nthe truck, where her daughter was seated. Huihui grabbed the CW\n\nby the hair and yanked her back into the front seat. The CW\n\nagain tried to open her door and Huihui punched her in the face.\n\n Huihui testified to a substantially different version\n\nof events. He claimed that while driving in his truck, the CW\n\naccused him of having a sexual relationship with another woman.\n\nThe argument escalated until the CW tried to open the passenger-\n\nside door. Huihui testified that he believed she was going to\n\njump out of the moving truck. Huihui grabbed the door handle and\n\ntold the CW that if she wanted to get out he would stop the\n\n\n\n 3\n\f *** NOT FOR PUBLICATION IN WEST\u2019S HAWAI#I REPORTS AND PACIFIC REPORTER ***\n\n\ntruck. Huihui then pulled to the side of the road and offered to\n\nlet the CW out. The CW remained in the vehicle.\n\n Huihui resumed driving at approximately 55-miles-per-\n\nhour. Shortly thereafter, the CW opened the passenger-side door\n\nand attempted to jump from the moving truck. Huihui testified\n\nthat he grabbed the CW by the hair to keep her from falling out.\n\nHuihui held the CW by the hair until he could bring his truck to\n\na stop. As the truck slowed, the CW repeatedly slammed into the\n\nside of the truck, sustaining several injuries. Once the truck\n\nhad come to a stop, Huihui pulled the CW by the hair back into\n\nthe front seat, where she hit her head on the gear shift.\n\n At this point, Huihui\u2019s attorney attempted to introduce\n\nevidence that the CW had threatened to harm herself on prior\n\noccasions:\n DEFENSE COUNSEL: Have you had any prior contact with [the\n CW] where she threatened to hurt herself?\n\n PROSECUTOR: Objection. . . . Relevance.\n\n THE COURT: Sustained.\n\n DEFENSE COUNSEL: Your Honor, . . . it is character evidence\n but I believe it is permissible under 404 \u2013 404(a)(2), . . .\n evidence of [the] character of the victim is . . .\n admissible . . . to show that she was acting . . . to harm\n herself during this incident and that she had done so or\n threatened to do so on prior occasions.\n\n THE COURT: Character is not at issue in this case.\n\n DEFENSE COUNSEL: [The CW] did attempt to harm herself by\n jumping out of the car.\n\n THE COURT: It\u2019s not a character question in my mind.\n\n DEFENSE COUNSEL: Well, the character of . . . having\n\n 4\n\f *** NOT FOR PUBLICATION IN WEST\u2019S HAWAI#I REPORTS AND PACIFIC REPORTER ***\n\n\n suicidal tendency[.]\n\n THE COURT: You need more foundation in order to establish\n that the acts in this case were suicidal.\n\n DEFENSE COUNSEL: Your Honor, just evidence that the victim\n attempted to jump out of the car while going 55, I think\n that\u2019s circumstantial evidence [that] a person has . . .\n suicidal traits or at least traits that she wants to harm\n herself.\n\n THE COURT: I\u2019ll sustain the objection.\n\n At the close of trial, Huihui was found guilty of all\n\nthree charges and sentenced accordingly. Huihui timely appealed\n\nto the ICA, which affirmed the family court\u2019s judgment and\n\nconviction.\n\n II. STANDARD OF REVIEW\n\n Evidentiary rulings made on the basis of HRE Rule 404\n\nare reviewed for abuse of discretion. State v. Richie, 88\n\nHawai#i 19, 36, 960 P.2d 1227, 1244 (1998).\n Evidentiary decisions based on HRE Rule 403, which require a\n judgment call on the part of the trial court, are reviewed\n for an abuse of discretion. HRE 404 represents a\n particularized application of the principle of HRE 403 (see\n Commentary to HRE 404), and we will employ the same abuse of\n discretion standard of review.\n\nId. (internal quotation marks and citations omitted).\n\n Under the abuse of discretion standard\n the trial court may not be reversed by an appellate court\n unless the trial court clearly exceeded the bounds of reason\n or disregarded rules or principles of law or practice to the\n substantial detriment of a party litigant. Under that\n standard different trial judges may, on the same facts,\n arrive at opposite rulings without any of them being\n reversible on appeal.\n\nKealoha v. Cnty. of Hawai#i, 74 Haw. 308, 318, 844 P.2d 670, 675\n\n\n\n 5\n\f *** NOT FOR PUBLICATION IN WEST\u2019S HAWAI#I REPORTS AND PACIFIC REPORTER ***\n\n\n(1993) (citation and quotations omitted).\n\n Where evidence is improperly excluded, the judgment of\n\nthe trial court must be reversed unless it can affirmatively be\n\nsaid that the exclusion was harmless beyond a reasonable doubt.\n\nSee State v. Perez, 64 Haw. 232, 234, 638 P.2d 335, 337 (1981);\n\nState v. Russo, 67 Haw. 126, 138, 681 P.2d 553, 563 (1984).\n\n III. DISCUSSION\n\n In this case, the family court abused its discretion\n\nwhen it excluded evidence of the CW\u2019s propensity for self-harm.\n\nA. Relevance\n\n HRE Rule 401 (2004) states that evidence is relevant if\n\nit has \u201cany tendency to make the existence of any fact that is of\n\nconsequence to the determination of the action more probable or\n\nless probable than it would be without the evidence.\u201d See also\n\nState v. Maddox, 116 Hawai#i 445, 457, 173 P.3d 592, 604 (App.\n\n2007) (stating that character evidence \u201cis properly excluded\n\nwhere the evidence at trial does not support a factual dispute\u201d\n\nthat is of consequence to the action).\n\n Character evidence that the CW had a propensity for\n\nself-harm was relevant to Huihui\u2019s defense. A defendant may make\n\nout a choice of evils defense if, among other things, the\n\ndefendant reasonably believed that his or her action was\n\nnecessary to avoid an imminent harm. See HRS \u00a7\u00a7 703-300,\n\n\n 6\n\f *** NOT FOR PUBLICATION IN WEST\u2019S HAWAI#I REPORTS AND PACIFIC REPORTER ***\n\n\n703-302(1) (1993). Huihui\u2019s testimony indicated that the CW\n\nsustained her injuries in an apparent suicide attempt, and that\n\nhis act of pulling the CW by the hair was motivated by his belief\n\nthat the CW was attempting to harm herself. Thus, a fact \u201cof\n\nconsequence to the determination of the action\u201d was whether a\n\nreasonable person would believe that the CW was attempting to\n\nharm herself.\n\n If the CW had a propensity for self-harm, then it is\n\nmore likely that she actually attempted to jump from a vehicle\n\nmoving at 55-miles-per-hour. If that were true, then it would\n\nsupport the conclusion that Huihui reasonably believed he needed\n\nto grab the CW\u2019s hair and/or confine her to his vehicle to\n\nprevent an imminent harm. Thus, evidence of the CW\u2019s prior\n\nattempts to harm herself would make the occurrence of a fact of\n\nconsequence more likely. The family court erred when it\n\nconcluded that such evidence was irrelevant.\n\nB. Character Evidence\n\n Having established that evidence of the CW\u2019s propensity\n\nfor self-harm was relevant, Huihui should have been allowed to\n\nintroduce that evidence pursuant to the rules governing character\n\nevidence. HRE Rule 404(a) (2004) states: \u201cEvidence of a person\u2019s\n\ncharacter or a trait of a person\u2019s character is not admissible\n\nfor the purpose of proving action in conformity therewith on a\n\n\n 7\n\f *** NOT FOR PUBLICATION IN WEST\u2019S HAWAI#I REPORTS AND PACIFIC REPORTER ***\n\n\nparticular occasion[.]\u201d However, HRE Rule 404(a)(2) allows the\n\naccused to introduce \u201c[e]vidence of a pertinent trait of\n\ncharacter of the victim of the crime[.]\u201d See also State v.\n\nBasque, 66 Haw. 510, 512, 666 P.2d 599, 601 (1983) (\u201c\u2018[A]\n\ndefendant who claims self-defense to a charge of homicide is\n\npermitted to introduce evidence of the [victim\u2019s] violent or\n\naggressive character either to demonstrate the reasonableness of\n\nhis apprehension of immediate danger or to show that the [victim]\n\nwas the aggressor.\u2019\u201d) (quoting State v. Lui, 61 Haw. 328, 330,\n\n603 P.2d 151, 154 (1979)). Here, the CW\u2019s propensity for self-\n\nharm was a pertinent character trait, and evidence tending to\n\nestablish that trait should have been admitted pursuant to HRE\n\nRule 404(a)(2).2 Because there is a reasonable possibility that\n\nthe family court\u2019s error might have contributed to Huihui\u2019s\n\nconviction, we cannot say that it was harmless beyond a\n\nreasonable doubt.\n\nC. Foundation\n\n The family court also precluded evidence of the CW\u2019s\n\npropensity for self-harm because it concluded that Huihui had not\n\nlaid adequate foundation to establish that the acts in this case\n\nwere suicidal. Huihui testified that the CW attempted to jump\n\n\n 2\n Accordingly, we need not address whether evidence of the CW\u2019s\nprior attempts to harm herself should have been admitted pursuant to HRE Rule\n404(b).\n\n 8\n\f *** NOT FOR PUBLICATION IN WEST\u2019S HAWAI#I REPORTS AND PACIFIC REPORTER ***\n\n\nfrom a vehicle that was traveling at approximately 55-miles-per-\n\nhour. No further foundation was required to establish that the\n\nCW\u2019s alleged action was an attempt at self-harm.\n\n IV. CONCLUSION\n\n For the reasons set forth above, we vacate the ICA\u2019s\n\nNovember 1, 2013 judgment on appeal and the family court\u2019s\n\nAugust 10, 2011 judgment of conviction and sentence. This case\n\nis hereby remanded to the family court for further proceedings\n\nbefore a different judge.3\n\n DATED: Honolulu, Hawai#i, June 18, 2014.\n\nCraig W. Jerome /s/ Mark E. Recktenwald\n(Summer M.M. Kupau with him\non the briefs) for petitioner /s/ Paula A. Nakayama\n\nJason R. Kwiat /s/ Sabrina S. McKenna\n(Kimberly B. Taniyama and\nLinda L. Walton with him on /s/ Richard W. Pollack\nthe briefs) for respondent\n /s/ Karl K. Sakamoto\n\n\n\n\n 3\n This case must be resolved before a different judge on remand\nbecause the family court made problematic statements during sentencing\nallocution.\n\n 9\n\f"} -{"text": "\n80 Mich. App. 663 (1978)\n264 N.W.2d 89\nMERRITT\nv.\nNICKELSON\nDocket No. 77-1034.\nMichigan Court of Appeals.\nDecided January 5, 1978.\nJennings & DeVries, for plaintiff.\nZerafa, Zerafa & Christian, P.C., for defendants.\nBefore: R.M. MAHER, P.J., and M.F. CAVANAGH and N.J. KAUFMAN, JJ.\nPER CURIAM.\nDefendant Marie Ledford appeals as of right from a January 26, 1976, judgment after a nonjury trial in which $137,800 in damages were awarded to plaintiff against both defendants Marie and James Ledford. The trial court found both defendants negligent in the operation of a race track which functioned primarily as a drag strip. Prior to May 6, 1970, defendant Marie Ledford was the sole owner of the land, approximately 25 acres, on which the drag strip was built. On *665 that date she deeded the property to herself and to her son, defendant James Ledford, as tenants in common by a quitclaim deed for a consideration of $500.\nOn May 30, 1970, the first day that the drag strip had been opened to the public, defendant Howard Nickelson, one of the participants at the track, while racing his car, was shifting into third gear when his clutch came apart and the flywheel disintegrated. Pieces of the steel flywheel tore holes in the floorboard and roof of his car; one of the pieces was thrown through the air and injured Alan Merritt, a spectator. Merritt died from the injury.\nThe driver of the car, Nickelson, through his insurance company, paid the plaintiff's estate the sum of $8,500.\nPlaintiff, as administratrix of Alan Merritt's estate, claimed that defendants, Marie and James Ledford, as owners and operators of the track, were negligent in failing to make a safety inspection of the cars and in not requiring that the cars be equipped with a scatter shield for the flywheel. Rules promulgated by the National Hot Rod Association recommend that cars engaged in drag racing have scatter shields to contain pieces of the flywheel in the event it disintegrates. The trial court found both defendants negligent and further held that their negligence was the cause of Mr. Merritt's death.\nOn appeal, defendant Marie Ledford claims that mere ownership of property by one co-tenant is not a sufficient basis on which to impose liability for the negligent acts of another co-tenant. We agree.\nNothing in the record discloses that Marie Ledford operated the drag strip: to the contrary, uncontradicted testimony at trial made it clear that *666 Marie Ledford was in no way involved in the operation of the drag strip. She was merely, along with her son, James Ledford, a tenant in common of the property.\nTenants in common are persons who hold land or other property by unity of possession. When two or more persons are entitled to land in such a manner that they have an undivided possession, but separate and distinct freeholds, they are tenants in common. Not only is the possession of one the possession of all, but the tenants respectively have the present right to enter upon the whole land, and upon every part of it, and to occupy and enjoy the whole. Fenton v Miller, 94 Mich 204; 53 NW 957 (1892), Metcalfe v Miller, 96 Mich 459; 56 NW 16 (1893), Tiffany, The Law of Real Property (3d ed), \u00a7 426, p 212.\nOrdinarily, negligence of one co-owner is not imputed to the other co-owner. Mortensen v Knight, 81 Ariz 325; 305 P2d 463 (1956). The fact that one party is a tenant in common with a second party does not ipso facto render the first party liable for acts of the second party when that second party has exclusive control. McDonald v Standard Gas Engine Co, 8 Cal App 2d 464; 47 P2d 777 (1935).\nTo argue, as plaintiff does, that a co-owner's right to possession of the premises is sufficient to hold that co-owner liable for all injuries on the premises is to be simplistic. The issue of control is preeminent.\n\"[T]he rights and liabilities arising out of the condition of land, and activities conducted upon it, have been concerned chiefly with the possession of the land * * * for the obvious reason that the man in possession is in a position of control, and normally best able to prevent *667 any harm to others.\" Prosser, Law of Torts (3d ed), \u00a7 57, p 358. (Footnote omitted.)\n\"Possession\" differs from the \"right to possession\" and \"ownership\" because of the concept of control. Possession is the detention and control of anything which may be the subject of property, for one's use and enjoyment. Blacks Law Dictionary (4th ed), p 1325. The mere \"right to possession\" does not necessarily entail the control inherent in the nature of \"possession\".\nIt has been recognized in this state that control and possession are the determinative factors in the imposition of liability.\n\"It is a general proposition that liability for an injury due to defective premises ordinarily depends upon power to prevent the injury and therefore rests primarily upon him who has control and possession.\" Dombrowski v Gorecki, 291 Mich 678, 681; 289 NW 293 (1939), citing Bannigan v Woodbury, 158 Mich 206; 122 NW 531 (1909).\nSee also Nezworski v Mazanec, 301 Mich 43; 2 NW2d 912 (1942), and Paisley v United Parcel Service, Inc, 17 Mich App 672; 170 NW2d 283 (1969).\nIn the instant case, defendant James Ledford had complete control over the drag strip according to trial testimony which plaintiff did not refute. Appellant Marie Ledford was merely a co-owner with no control whatsoever. In analogous situations, owners of land as tenants by the entirety or as joint tenants do not share liability when injury or negligence is attributable to the independent act of a single tenant who has exclusive control of the premises. Dombrowski v Gorecki, supra, Maynard v Hawley, 331 Mich 123; 49 NW2d 92 (1951).\n*668 Kearns v Steinkamp, 184 Ark 1177; 45 SW2d 519 (1932), is characteristic of this class of cases. A husband had constructed and operated a swimming pool owned jointly with his wife. The wife was held to be not liable for injuries to a swimmer using the pool, since she exercised no control over its operation and there was no relation of master and servant or principal and agent subsisting between husband and wife.\nIt is likewise true that a tenant in common cannot be held liable for injury caused by a cotenant who has exclusive control of the object of common ownership.\n\"It is a general principle of tort law that a person is liable only as he participates in an activity giving rise to a tort. Mere co-ownership of land standing alone will not subject a person to liability for torts committed in the land by the other co-owners.\" Musser v Loon Lake Shores Association, Inc, 384 Mich 616, 622; 186 NW2d 563 (1971).\nMarie Ledford had no control over the condition of the drag strip or the cars driven there. As she did not participate in the operation of the raceway nor have any interest in it other than her status as a tenant in common, she cannot be held liable for injuries which occurred as a result of the race track's operation.\nWe see nothing in the case warranting a new trial. However, plaintiff may have believed that for purposes of liability she need only show that Marie Ledford was a co-tenant of the property. Plaintiff may be able to present evidence which proves that Marie Ledford was more than a mere co-tenant and that she had some degree of possession and control. Mindful of this possibility, we remand this cause for a hearing before the trial judge at *669 which time plaintiff may make an offer of proof of Marie Ledford's status as possessor and controller of the property.\nShould the offer of proof disclose a possible basis for liability, the judge will reopen the trial on the issue of liability alone. If the judge is satisfied that the proof plaintiff offers will be an insufficient basis on which to find Marie Ledford liable, the judgment of the trial court as to appellant is reversed. In either case, the damages remain the same.\n"} -{"text": "Abatement Order filed November 8, 2012.\n\n\n\n\n In The\n\n Fourteenth Court of Appeals\n ____________\n\n NO. 14-12-00643-CR\n ____________\n\n CHRISTOPHER WASHINGTON, Appellant\n\n V.\n\n THE STATE OF TEXAS, Appellee\n\n\n On Appeal from the 248th District Court\n Harris County, Texas\n Trial Court Cause No. 1301887\n\n\n ABATEMENT ORDER\n\n Appellant is represented by appointed counsel, Emily Munoz-De Toto. On\nOctober 8, 2012, time to file appellant\u2019s brief expired without a brief and no motion for\nextension of time was filed. See Tex. R. App. P. 38.6(a). Counsel and the trial court\nwere notified on October 12, 2012, that no brief had been received. No response from\nappellant has been received.\n\n Pursuant to Tex. R. App. P. 38.8(b) (a copy of which is attached) the judge of the\n248th District Court shall (1) immediately conduct a hearing, at which appellant,\n\fappellant\u2019s counsel, and state\u2019s counsel shall participate, either in person or by video\nteleconference, to determine (a) whether appellant desires to prosecute his appeal; (b)\nwhether appellant is indigent; (c) if not indigent, whether appellant has abandoned the\nappeal or whether appellant has failed to make necessary arrangements for filing a brief;\n(d) the reason for the failure to file a brief; (e) if appellant desires to continue the appeal,\na date certain when appellant\u2019s brief will be filed; and (2) prepare a record, in the form of\na reporter\u2019s record, of the hearing. If appellant is indigent, the judge shall take such\nmeasures as may be necessary to assure effective representation of counsel, which may\ninclude the appointment of new counsel. The judge shall see that a record of the hearing\nis made, shall make findings of fact and conclusions of law, and shall order the trial clerk\nto forward a transcribed record of the hearing, a videotape or compact disc, if any,\ncontaining a recording of the video teleconference, and a supplemental clerk\u2019s record\ncontaining the findings and conclusions. Those records shall be filed with the clerk of\nthis court on or before December 7, 2012.\n\n The appeal is abated, treated as a closed case, and removed from this Court\u2019s\nactive docket. The appeal will be reinstated on this Court\u2019s active docket when the trial\ncourt\u2019s findings and recommendations are filed in this Court. The Court will also\nconsider an appropriate motion to reinstate the appeal filed by either party, or the Court\nmay reinstate the appeal on its own motion. It is the responsibility of any party seeking\nreinstatement to request a hearing date from the trial court and to schedule a hearing in\ncompliance with this Court\u2019s order. If the parties do not request a hearing, the court\ncoordinator of the trial court shall set a hearing date and notify the parties of such date.\n\n\n\n\n PER CURIAM\n\n\n\n\n 2\n\f RULE 38. REQUISITES OF BRIEFS\n\n\n\n\nTex. R. App. P. 38.8. Failure of Appellant to File Brief.\n\n (b) Criminal Cases.\n\n (1) Effect. An appellant=s failure to timely file a brief does not authorize\neither dismissal of the appeal or, except as provided in (4), consideration of the appeal\nwithout briefs.\n\n (2) Notice. If the appellant=s brief is not timely filed, the appellate clerk\nmust notify counsel for the parties and the trial court of that fact. If the appellate court\ndoes not receive a satisfactory response within ten days, the court must order the trial\ncourt to immediately conduct a hearing to determine whether the appellant desires to\nprosecute his appeal, whether the appellant is indigent, or, if not indigent, whether\nretained counsel has abandoned the appeal, and to make appropriate findings and\nrecommendations.\n\n (3) Hearing. In accordance with (2), the trial court must conduct any\nnecessary hearings, make appropriate findings and recommendations, and have a record\nof the proceedings prepared, which recordCincluding any order and findingsCmust be\nsent to the appellate court.\n\n (4) Appellate Court Action. Based on the trial court=s record, the appellate\ncourt may act appropriately to ensure that the appellant=s rights are protected, including\ninitiating contempt proceedings against appellant=s counsel. If the trial court has found\nthat the appellant no longer desires to prosecute the appeal, or that the appellant is not\nindigent but has not made the necessary arrangements for filing a brief, the appellate\ncourt may consider the appeal without briefs, as justice may require.\n\n\n 3\n\f"} -{"text": " TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN\n\n\n NO. 03-08-00039-CV\n\n\n\n Stephen N. Lisson, Appellant\n\n v.\n\n Mary Padgett, Appellee\n\n\n FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT\n NO. D-1-GN-05-000835, HONORABLE MARGARET A. COOPER, JUDGE PRESIDING\n\n\n\n MEMORANDUM OPINION\n\n\n Appellant Stephen N. Lisson\u2019s brief was due on June 9, 2008. On December 15, 2008,\n\nthis Court notified Lisson that his brief was overdue and that his failure to file a proper motion for\n\nextension of time by December 29, 2008, would result in the dismissal of his appeal for want of\n\nprosecution. To date, Lisson has not filed a brief or a motion for extension of time. Accordingly, we\n\ndismiss this appeal for want of prosecution.\n\n\n\n ___________________________________________\n\n Diane M. Henson, Justice\n\nBefore Chief Justice Jones, Justices Puryear and Henson\n\nDismissed for Want of Prosecution\n\nFiled: February 5, 2009\n\f"} -{"text": "536 U.S. 905\nNATIONAL ELECTRICAL MANUFACTURERS ASSN.v.SORRELL, ATTORNEY GENERAL OF VERMONT, ET AL.\nNo. 01-1489.\nSupreme Court of the United States.\nJune 10, 2002.\n\n1\nC. A. 2d Cir. Certiorari denied. Reported below: 272 F. 3d 104.\n\n"} -{"text": " FILED\n JUNE 14, 2016\n In the Office of the Clerk of Court\n WA State Court of Appeals, Division III\n\n\n\n\n IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON\n DIVISION THREE\n\nMICHAEL A. BOISE, )\n ) No. 33202-1-111\n Appellant, )\n )\n V. )\n )\nEMPLOYMENT SECURITY ) UNPUBLISHED OPINION\nDEPARTMENT OF THE STATE OF )\nWASHINGTON, )\n )\n Respondent. )\n\n SIDDOWAY, J. -One circumstance in which an employee who voluntarily quits a\n\njob may still receive unemployment benefits is where the employee's usual work is\n\nchanged to work that violates the individual's religious convictions or sincere moral\n\nbeliefs. RCW 50.20.050(2)(b )(x). Michael Boise resigned from a sales position shortly\n\nafter being hired, ostensibly because of such a work change. Benefits were denied him\n\nby the state employment security department and, on appeal, by its commissioner.\n\n His first petition for judicial review resulted in a superior court order remanding\n\nthe administrative decision to the commissioner's review office \"to issue a decision after\n\nemploying a subjective analysis of whether a change in the conditions of employment\n\nviolated a sincerely held moral belief of the petitioner.\" Clerk's Papers (CP) at 131. In\n\nisolation, the directive was ambiguous, because at least one fact essential to Mr. Boise's\n\fNo. 33202-1-III\nBoise v. Emp 't Security\n\n\nentitlement-that there had been a change in his usual work-is an objective, not\n\nsubjective, determination. On remand, the commissioner found that Mr. Boise's usual\n\nwork had not changed, an order that the superior court then affirmed. Mr. Boise\n\ncomplains both decisions were contrary to an implicit finding by the superior court,\n\ninitially, and that there had been a change in his usual work.\n\n The superior court did not engage in fact finding. Its directive did not perfectly\n\nexpress its intent, but it is clear from its order as a whole that the court recognized that\n\nthe commissioner would objectively analyze whether there had been a change in Mr.\n\nBoise's usual work and subjectively analyze only whether the change violated his sincere\n\nmoral belief. For that reason, and because the commissioner's ultimate order making the\n\nrequired findings is supported by substantial evidence, we affirm.\n\n FACTS AND PROCEDURAL BACKGROUND\n\n Cleary Building Corporation (Cleary) is in the business of selling and constructing\n\nmanufactured buildings. It hired Michael Boise as a commissioned salesperson on\n\nFebruary 1, 2013, at a standard base salary of $580 per week. He signed two documents\n\non the date of hire: a six-page employment agreement and a six-page pay plan.\n\nCollectively, they disclosed he was expected to meet a $516,000 annual sales target on a\n\nregular basis and that his weekly salary could be reduced if, after 60 days, he failed to\n\nmeet the target. They also disclosed that in cases where he arranged subcontract work to\n\nbe performed in connection with a building sale, he must increase the actual cost of the\n\n 2\n\fNo. 33202-1-III\nBoise v. Emp 't Security\n\n\nsubcontract by a 12 percent minimum markup and, if he increased the actual cost by\n\nlarger markups (up to 16 percent), he could earn additional \"incentive\" pay. CP at 86.\n\nMr. Boise claims that although he signed the pay plan on the day he was hired, he did not\n\nread it and was provided with a copy of only the signature page. It was the pay plan that\n\ndisclosed the detail about compensation and compensation reduction.\n\n After being hired and signing the two documents, Mr. Boise was sent to\n\nWisconsin for two weeks of training. He claims it was there that he first learned about\n\nthe potential for salary reduction and the subcontractor markup practice. At the end of\n\ntwo weeks' training, Mr. Boise notified his branch manager that he was quitting because\n\nhe could not afford a reduction in the base salary. When he returned the company car the\n\nfollowing Monday, the branch manager asked him ifhe wanted to stay and work through\n\nthe wage issues. Mr. Boise told his manager that it would not work, because he was not\n\ngoing to be able to add money to subcontracts. In his notice of termination, Mr. Boise\n\nmarked that he was leaving for \"family issues.\" CP at 75.\n\n Mr. Boise then applied to the Washington State Department of Employment\n\nSecurity (department) for unemployment benefits. On the voluntary quit statement he\n\nwas required to complete, he stated his main reason for quitting was, \"Cleary did not\n\ndisclose I would lose salary amount if I did not have over $48,000 in sales per month.\"\n\nCP at 61. He wrote that the reasons he gave his employer for quitting were \"[p ]ersonal-\n\nreasons, my concern I would lose salary.\" Id. Asked if he quit due to a \"[r]eduction in\n\n 3\n\fNo. 33202-1-III\nBoise v. Emp 't Security\n\n\npay and/or fringe benefits,\" Mr. Boise marked \"Yes.\" CP at 64. 1 Asked ifhe quit due to\n\na \"[c]hange in customary job duties which was against [his] religious or moral beliefs,\"\n\nMr. Boise marked \"No,\" and did not answer the question \"[h]ow did the change violate\n\nyour beliefs?\" CP at 65. Asked about any work changes (in the event the employee's\n\nusual work had changed since the time of hire) Mr. Boise wrote \"none.\" Id. Asked if\n\nother work factors made it necessary for him to quit, Mr. Boise wrote that Cleary had\n\ngiven him a filthy work car and would not reimburse him for having it cleaned. Nowhere\n\non the form did Mr. Boise state he quit due to moral objections.\n\n After the department denied Mr. Boise's claim for unemployment benefits, he\n\ncontested the determination, requesting a hearing. At the hearing before an\n\nadministrative law judge (ALJ), Mr. Boise testified he did not receive the first five pages\n\nof the pay plan until sometime during his training in Wisconsin, which began on\n\nFebruary 4. He stated he was uncomfortable with marking up subcontractor bids without\n\ndisclosing the markup to the customer, that Cleary's markup practice was not consistent\n\nwith his previous experience in the industry, and that he found it morally objectionable.\n\nCleary's witness disagreed with Mr. Boise's claim that its markup practice was atypical,\n\ntestifying it \"is a pretty standard business practice for a general contractor to mark up,\n\n\n 1\n Earlier in the proceedings, Mr. Boise contended he was eligible for\nunemployment benefits because his \"usual compensation was reduced by twenty-five\npercent or more,\" as provided by RCW 50.20.050(2)(v). He has abandoned that\nargument.\n\n 4\n\fNo. 33202-1-III\nBoise v. Emp 't Security\n\n\num, the cost or the bids if [sic] their subcontractors.\" CP at 39. The ALJ affirmed the\n\ndepartment's determination, finding that Mr. Boise quit because he was \"unhappy with\n\nthe pay plan.\" CP at 55, 99-100.\n\n Mr. Boise petitioned for review. Review was delegated by the commissioner to\n\nreview judge Susan Buckles. She affirmed the ALJ's decision. Addressing Mr. Boise's\n\ncontention that he had moral objections to Cleary's markup practice, she stated, \"we are\n\npersuaded that this is a normal practice in the industry, and that claimant's objections are\n\nmisplaced.\" CP at 111.\n\n Mr. Boise petitioned for judicial review. In findings of fact, conclusions of law,\n\nand an order, the superior court remanded the case to the commissioner's review office.\n\nIt concluded that the commissioner's finding of fact that \"Mr. Boise acknowledged\" that\n\nthe billing practice to which he objected was common was not supported by substantial\n\nevidence; that in discounting Mr. Boise's sincere moral belief because the markup\n\npractice was customary, the commissioner erroneously applied an objective standard; and\n\nthat the commissioner \"also erred in not making a finding of fact on whether or not there\n\nwas a change in the usual work, as required by RCW 50.20.050.\" CP at 130-31. It\n\nconcluded its remand order with the directive that the commissioner's review office was\n\n\"to issue a decision after employing a subjective analysis of whether a change in the\n\nconditions of employment violated a sincerely held moral belief of the petitioner.\" CP at\n\n131 (emphasis added).\n\n 5\n\fNo. 33202-1-111\nBoise v. Emp 't Security\n\n\n The department filed a motion for reconsideration, challenging the superior court's\n\nrequirement of a subjective analysis. 2 The superior court's letter response denied the\n\nmotion, but stated:\n\n The application ofRCW 50.20.050(2)(b) requires the examination of three\n matters: Does the employee have a sincere moral belief? Have work duties\n changed to where continued employment would offend the employee's\n sincere moral belief? Was the change in work duties [and] that employee's\n sincere moral belief the reason for termination of the employment\n relationship? The Court agrees that the second and third questions must be\n analyzed objectively . ... The first question, however, must involve a\n subjective analysis.\n\nCP at 127 (emphasis added).\n\n On remand, review judge Annette Womac did not adopt all the findings of fact\n\ncontained in the ALJ's initial order. She made some new findings. In a new conclusion\n\nof law, she affirmed the denial of benefits, reasoning that, as more fully set forth in her\n\nfindings, neither Mr. Boise's duties nor conditions of work changed:\n\n The terms of the employer's subcontract incentive program were clearly set\n forth in the Payment Plan referenced in the Employment Agreement.\n Although the claimant chose not to read the Plan before signing the\n Agreement, he nonetheless was apprised of the employer's practice because\n he signed a document that explicitly referenced the markup of subcontract\n bids.\n\nCP at 136-37. She also concluded that despite having read the payment plan on about the\n\n\n\n 2\n The department represents in its appeal brief that it moved for reconsideration on\nthe issue of whether a subjective standard should be used when determining whether a\nmoral belief is sincerely held. Br. of Resp 't at 6 n.1. The motion is not in our record.\n\n 6\n\fNo. 33202-1-111\nBoise v. Emp 't Security\n\n\nsecond day of training, Mr. Boise did not quit until nearly two weeks thereafter, but\n\ninstead continued to participate in a training program at his employer's expense,\n\nsomething she found \"not consistent with an individual whose sincere moral beliefs,\n\nviewed subjectively, have been violated.\" CP at 137.\n\n Mr. Boise again petitioned for judicial review. He argued that by referring only\n\nthe subjective issue of his sincere moral belief to the commissioner's review office, the\n\nsuperior court implicitly found that a change in usual work had occurred, and that the\n\nreview judge's conclusion to the contrary violated the remand order.\n\n Judicial review was assigned to a different superior court department than had\n\nheard the first petition for review. It affirmed the commissioner's decision. Mr. Boise\n\nappeals.\n\n ANALYSIS\n\n The Washington Administrative Procedure Act (APA), chapter 34.05 RCW,\n\ngoverns judicial review of employment benefit decisions by the commissioner of the\n\nemployment security department. Verizon Nw., Inc., v. Emp 't Sec. Dep 't, 164 Wn.2d\n\n909,915, 194 P.3d 255 (2008). \"In reviewing administrative action, this court sits in the\n\nsame position as the superior court, applying the standards of the [ ]APA directly to the\n\nrecord before the agency.\" Tapper v. Emp 't Sec. Dep 't, 122 Wn.2d 397, 402, 858 P.2d\n\n494 (1993). We review the decision of the commissioner, not the underlying decision of\n\n\n\n\n 7\n\fNo. 33202-1-III\nBoise v. Emp 't Security\n\n\nthe ALJ or the decision of the superior court. Verizon, 164 Wn.2d at 915; Markam\n\nGroup, Inc., P.S. v. Emp 't Sec. Dep 't, 148 Wn. App. 555, 560, 200 P.3d 748 (2009).\n\n A threshold problem with Mr. Boise's assignments of error is that they are\n\ncouched in terms of trial court error. See Br. of Appellant at 1. Reframed as agency\n\nerror-which is all that we review-they are, in substance, that ( 1) the commissioner\n\nimproperly made new findings of fact exceeding the scope of the superior court's remand\n\norder; (2) the commissioner failed to undertake further fact finding into whether Mr.\n\nBoise subjectively held a sincere moral belief; and (3) the trial court erred in affirming\n\nthe commissioner's decision. Elsewhere, Mr. Boise argues that four of the\n\ncommissioner's findings are not supported by substantial evidence. Id. at 9-10.\n\n We first address Mr. Boise's first and second assignments of error, which\n\nchallenge the commissioner's interpretation or application of the law. We then tum to\n\nMr. Boise's challenge to the sufficiency of evidence to support the four findings,\n\nincluding whether Mr. Boise has demonstrated substantial prejudice from any\n\nunsupported finding. Our resolution of those challenges will necessarily resolve Mr.\n\nBoise's third, catchall assignment of error.\n\n I. Challenged procedure following remand\n\n The AP A authorizes courts to grant relief from an agency order in an adjudicative\n\nproceeding in nine enumerated instances, two of which are that the agency has\n\n\"erroneously interpreted or applied the law,\" and that it \"has not decided all issues\n\n 8\n\fNo. 33202-1-III\nBoise v. Emp 't Security\n\n\nrequiring resolution by the agency.\" RCW 34.05.570(3)(d), (f). Pursuant to this\n\nauthority, the superior court initially remanded the commissioner's decision for\n\nadditional agency decision making.\n\n Mr. Boise challenges the commissioner's action following the remand, arguing it\n\nexceeded the scope of the remand order by finding that Mr. Boise's usual work had not\n\nchanged, and it should have, but failed to engage in further fact finding as to Mr. Boise's\n\nsincere moral belief. He also suggests, without citation to authority, that \"[b]ecause a\n\nremand is unlikely to remedy this error, based on the prior actions of the Commissioner,\"\n\nwe should reverse and order the department to provide Mr. Boise with unemployment\n\nbenefits. Br. of Appellant at 7.\n\n We reject the premise that the commissioner exceeded the scope of the remand\n\norder. We have already recognized that the superior court's order was imperfectly\n\nphrased when it directed the commissioner to \"employ a subjective analysis\" of some\n\nmatters that require objective analysis. But when the court's order is read as a whole, it is\n\nclear the court intended for the commissioner to address the overlooked factual issue of\n\nwhether Mr. Boise's usual work had changed.\n\n First, the court's third conclusion of law states that the department \"also erred in\n\nnot making a finding of fact on whether or not there was a change in the usual work, as\n\nrequired by RCW 50.20.050.\" CP at 131. Second, it directed the commissioner's review\n\noffice to \"issue a decision after employing a subjective analysis of whether f! change in\n\n 9\n\fNo. 33202-1-III\nBoise v. Emp 't Security\n\n\nthe conditions of employment violated a sincerely held moral belief of the petitioner.\" Id.\n\n(emphasis added). If it had already been established that conditions of employment had\n\nchanged, the superior court's order would have called for an analysis of whether \"the\n\nchange in the conditions of employment violated a sincerely held moral belief.\" 3 Any\n\nconfusion should have been dispelled by the court's statement, in denying the\n\ndepartment's motion for reconsideration, that whether \"work duties changed to where\n\ncontinued employment would offend the employee's sincere moral belief' and whether\n\nthat change and resulting offense was \"the reason for termination of the employment\n\nrelationship\" must be analyzed objectively. CP at 127.\n\n By making a finding of fact that Mr. Boise's work duties had not changed, then,\n\nthe commissioner did not erroneously interpret or misapply the law.\n\n Mr. Boise argues the agency also committed error by failing to take additional\n\nevidence on the issue of the subjective sincerity of his moral belief. When a court grants\n\nrelief from an agency order because the agency failed to decide all the issues requiring\n\nresolution, the relief may be in the form of a remand for further proceedings. RCW\n\n34.05.570(t); RCW 34.05.574(1). Mr. Boise argues that Suquamish Tribe v. Central\n\nPuget Sound Growth Management Hearings Board, 156 Wn. App. 743,778,235 P.3d\n\n\n\n 3 The authority of the superior court under the AP A includes reviewing whether\nsubstantial evidence supports the agency's findings of fact, but does not include making\nits own findings of fact.\n\n 10\n\fNo. 33202-1-III\nBoise v. Emp 't Security\n\n\n812 (2010) holds that \"further proceedings\" mean further fact finding proceedings.\n\n In Suquamish Tribe, the court remanded for further factual proceedings because\n\nthe record was not complete enough to conduct the proper analysis. 156 Wn. App. at\n\n769, 777-78. The court never stated that further fact finding proceedings were always\n\nrequired where an agency failed to decide an issue, and common sense suggests the\n\nexisting agency record might sometimes be sufficient. Washington Public Employees\n\nAssociation v. Community College District 9, 31 Wn. App. 203,213,642 P.2d 1248\n\n(1982) illustrates as much. In that case, after finding that the administrative agency had\n\napplied the wrong legal standard, the court remanded the matter for \"additional\n\nproceedings,\" stating: \"A new hearing will not be required. The [Higher Education\n\nPersonnel] Board need only evaluate the testimony and evidence received at the previous\n\nhearings in light of the legal standard we have set forth in this opinion.\" Id. at 213-14.\n\n In this case no further fact finding was needed, because the record contained the\n\nwritten agreements identifying the objectionable terms of Mr. Boise's incentive\n\ncompensation, which he had signed on the first day of his employment. In fact, Mr.\n\nBoise has never contended that Cleary's terms and policies changed, but only that he did\n\nnot learn about them until the second week of employment.\n\n Mr. Boise had also testified to his objections, moral belief, and the actions he took\n\nbased on his objections and moral belief. \"Issu[ing] a decision after employing a\n\n\n\n\n 11\n\fNo. 33202-1-111\nBoise v. Emp 't Security\n\n\nsubjective analysis,\" as ordered by the court, did not require taking further evidence. CP\n\nat 131.\n\n II. Only one of the commissioner's challenged findings lacks\n substantial support in the record, and Mr. Boise fails to demonstrate\n any resulting prejudice\n\n Mr. Boise argues that the four findings of fact by the commissioner were not\n\nsupported by substantial evidence. A court shall grant relief from an agency order in an\n\nadjudicative proceeding if it determines the agency's order is not supported by evidence\n\nthat is substantial when viewed in light of the whole record, but only if the person\n\nseeking judicial relief has been substantially prejudiced by the lack of evidentiary\n\nsupport. RCW 34.05.570(3)(e), (l)(d).\n\n Substantial evidence supports three of the four findings challenged by Mr. Boise.\n\nBut even if none of the four was supported by substantial evidence, the lack of\n\nevidentiary support would not be prejudicial because a critical fact remains: no change in\n\nMr. Boise's usual work occurred. For his voluntary quit not to disqualify him from\n\nbenefits, that is an essential element of the exemption on which he relies.\n\n We nonetheless briefly address the sufficiency of the evidence to support three of\n\nthe four findings that he challenges: 4 the findings that (1) Mr. Boise quit because of a\n\ndisagreement with pay; (2) he continued working for Cleary for two weeks with\n\n\n 4\n The department concedes that evidence in the record does not support the\nchallenged finding that Mr. Boise was reimbursed for cleaning his company car.\n\n 12\n\fNo. 33202-1-III\nBoise v. Emp 't Security\n\n\nknowledge of the subcontract incentive plan; and (3) markups are common in the\n\nconstruction industry. Br. of Appellant at 9-11.\n\n Review of the commissioner's findings of fact is for substantial evidence in light\n\nof the whole record. RCW 34.05.570(3)(e); Smith v. Emp't Sec. Dep't, 155 Wn. App. 24,\n\n32, 226 P.3d 263 (2010). Evidence is substantial if it would \"'persuade a fair-minded\n\nperson of the truth or correctness of the order.'\" King County v. Cent. Puget Sound\n\nGrowth Mgmt. Hrg's. Bd., 142 Wn.2d 543, 553, 14 P.3d 133 (2000) (quoting Callecod v.\n\nWash. State Patrol, 84 Wn. App. 663,673,929 P.2d 510 (1997). Because the substantial\n\nevidence standard is deferential, the evidence is viewed \"' in the light most favorable to\n\nthe party that prevailed in the highest forum exercising fact-finding authority.'\"\n\nAffordable Cabs, Inc. v. Emp 't Sec. Dep 't, 124 Wn. App. 361, 367, 101 P .3d 440 (2004)\n\n(quoting Schofield v. Spokane County, 96 Wn. App. 581, 586-87, 980 P .2d 277 (1999) ).\n\nWe will not substitute our judgment for the commissioner's with regard to witness\n\ncredibility or the weight of evidence. Id.\n\n Disagreement with pay. Mr. Boise testified at length that he quit because he was\n\nafraid of having his salary reduced if he failed to make $48,000 per month in sales. He\n\ntold his branch manager he was quitting because he could not \"afford to lose that [pay].\"\n\nCP at 29. On his voluntary quit statement, he wrote that loss of salary, and \"[r]eduction\n\nin pay and/or fringe benefits\" were his reasons for quitting. CP at 64. The commissioner\n\n\n\n\n 13\n\fNo. 33202-1-111\nBoise v. Emp 't Security\n\n\nalso found he quit over dissatisfaction with Cleary's subcontract incentive program, but\n\nfindings that he had more than one reason for quitting are not contradictory.\n\n Continued work. The commissioner found that even if Mr. Boise did not read the\n\npayment plan when it was first presented to him, he \"nonetheless was apprised of the\n\nemployer's practice because he signed a document that explicitly referenced the markup.\"\n\nCP at 137. The exhibits support the finding. Mr. Boise testified in some instances to\n\nhaving seen the pay plan \"the second week\" of training and in other instances \"the second\n\nday\" of training. CP at 43, 45 (\"second or third day\"). Given his inconsistent statements,\n\nand viewing the evidence in the light most favorable to the department, substantial\n\nevidence supports the finding.\n\n Industry markup practice. The commissioner found that it is \"common in the\n\nconstruction industry\" to mark up subcontractor bids. CP at 134-35. Cleary's witness,\n\nJohn Schinderle, testified to that effect, explaining the markup was part of the company's\n\ncost structure. While the commissioner acknowledged that Mr. Boise disputed Cleary's\n\nevidence of industry practice, she was not persuaded that Mr. Boise had refuted Cleary's\n\nevidence. We do not substitute our judgment for that of the agency fact finder on issues\n\nof credibility and weight of the evidence.\n\n Substantial evidence supports three of the four challenged findings and Mr. Boise\n\nfails to demonstrate substantial prejudice from any shortfall in evidentiary support.\n\n Affirmed.\n\n 14\n\fNo. 33202-1-111\nBoise v. Emp 't Security\n\n\n A majority of the panel has determined this opinion will not be printed in the\n\nWashington Appellate Reports, but it will be filed for public record pursuant to RCW\n\n2.06.040.\n\n\n 2/_d,,t;w~, ~-\n Siddoway, J.\n\nWE CONCUR:\n\n\n\n\n 15\n\f"} -{"text": "\n89 Ill. App.2d 277 (1967)\n231 N.E.2d 459\nRockford Memorial Hospital Association, a Corporation, Plaintiff-Appellant,\nv.\nMax Wells and Oregon Township, a Municipal Corporation, Defendant-Appellee.\nGen. No. 67-81.\nIllinois Appellate Court \u0097 Second District.\nNovember 29, 1967.\n*278 Pedderson, Menzimer, Conde and Stoner, and Harold Stern, of Rockford, for appellant.\nJohn L. Moore, of Oregon, for appellee.\nMR. JUSTICE ABRAHAMSON delivered the opinion of the court.\nThis action was originally filed by Rockford Memorial Hospital Association on November 22, 1965, against Max Wells and Oregon Township. Count I of the complaint was against Max Wells, who is now deceased, and does not concern us in this appeal. Count II was against Oregon Township to recover for hospital services allegedly rendered Wells from January 21, 1963, when he was admitted as a patient, to his discharge on February 26, 1963, less that portion of the total bill paid by private insurance. The cause was heard by the court without a jury on March 3, 1967, and was taken under advisement at the conclusion of the evidence.\nOn March 9, 1967, judgment was entered against the plaintiff and on April 4, 1967, the court denied a post-trial motion to vacate the prior judgment and this appeal followed.\n*279 The action was brought under section 4-14 of the Public Assistance Code of 1949, as amended (Ill Rev Stats, c 23, par 414, 1961) which provided, in part, as follows:\n\"414. #4-14. Assistance to the Medically Indigent.) When a person not otherwise eligible for or receiving general assistance under Article IV, or assistance under Articles V, V-B, VI, VII, or VIIA falls sick or dies, not having sufficient money, property or other resources, including income and earnings available to him over a 12 month period, to meet the cost of necessary medical, dental, hospital, boarding or nursing care, or burial, the supervisor of general assistance in the governmental unit in which such person is at the time of his illness or death, shall give or cause to be given to him such care as may be necessary and proper, . ..\" (Emphasis ours.)\nParagraph 414 further provides that \"Eligibility for care as a medical indigent shall be determined in accordance with the rules and regulations of the Commission.\"\nIt is agreed that Max Wells was a resident of Oregon Township at the time of his illness in January and February, 1963, and that if he were otherwise eligible for assistance under the Code, that it would be due from Oregon Township under the provisions quoted. The evidence disclosed that Wells was suffering from cancer at the time of his admission to the hospital and that he had a lung removed during this hospitalization. On February 20, 1963, a hospital administrator wrote to Mr. Clarence Anderson, the Oregon Township supervisor of public assistance, and informed him that Wells was \"an emergency patient\" at the hospital and that they \"have only recently been able to determine that he may be medically indigent as that term is defined in the Illinois *280 State Statutes\" and that reimbursement was accordingly expected from the township for services rendered. Anderson returned the letter with a cryptic note on the bottom that \"Max Wells is not an indigent case by our standards. He has been working and has hospital insurance. Also, I was not notified until after he had left the hospital.\" On February 26, Wells was discharged from the hospital and returned home.\nIt was also disclosed that Wells had been adjudicated a bankrupt on the basis of his voluntary petition filed March 5, 1964. The bankruptcy schedules were admitted into evidence and revealed that he had liabilities of $5,522.97 and assets worth $1,100 on the date he filed the petition. Most of the liabilities were medical and hospital bills, but the schedules did not indicate when they were incurred. The bankruptcy petition also stated that Wells was employed as a laborer at the Conover-Kable Piano Company at that time; that he had been so employed for 5 years prior; and that he had earned approximately $4,800 during each of the two years immediately preceding the filing of the petition.\nRule 38.02 of the Illinois Public Aid Commission was in effect at the time in question. That rule provided:\n\"When it is determined by a source of medical care or funeral director that a sick or deceased person is without sufficient income and resources to meet the cost of necessary medical care or funeral and burial, and a request is being made for Assistance to the Medically Indigent, the source of medical care or funeral director shall notify the supervisor with reasonable promptness of such request and furnish information that the person does not have sufficient resources to pay the medical and/or funeral and burial expense.\n\"For purpose of this rule, `reasonable promptness' is to be considered notification within five working *281 days. However, if there are extenuating circumstances in any case, the supervisor may extend the period of time for such notification ...\"\nRule 38.06 provides that the determination of medical indigency shall include a consideration of \"all money, property, or other resources, including assistance from relatives, income and earnings available to the applicant over a 12 month period\" beginning one month prior to the month of application.\nPrior to the enactment of the Public Assistance Code, the cases held that one who furnished hospitalization or medical assistance to a needy person would be required to notify the appropriate overseer of the poor \"within a reasonable time\" to be entitled to reimbursement for the services thus rendered. St. Anthony's Hospital of Sisters of St. Francis, Inc. v. County of Fayette and Town of Avena, 313 Ill. App. 653, 40 NE2d 538 (Abst.). In the 1960 case of Rockford Memorial Hospital Ass'n v. Whaples, 25 Ill. App.2d 79, 165 NE2d 523, decided after the Code was in effect, notice furnished by the hospital to the McHenry Township supervisor 23 days after admission of Ruth Whaples as an emergency patient was sufficient notice on the basis of the earlier rule that notice must be furnished \"within a reasonable time.\" Ruth Whaples, then 4 years of age, had been ill with what her mother diagnosed as \"Asiatic flu.\" When her condition worsened, a doctor was consulted in the afternoon of November 11, 1957, who determined that the child had pneumonia and made arrangements to have her admitted to the hospital that evening as an emergency patient. On December 4, the associate director of the hospital advised the township supervisor, by letter, that Ruth was a patient and that the parents were medically indigent. The letter requested an investigation and reimbursement to the hospital for the expenses of the hospitalization. The court concluded that the notice was sufficient under the *282 circumstances, particularly since the supervisor did nothing to either investigate or object to the claim of medical indigency; and, that under the evidence found in the record, the parents of Ruth were medically indigent persons.\n[1] The five working-day rule was promulgated by the Commission after the Whaples decision. It is contended by the plaintiff, however, that this case should be determined by the earlier decisions and not the five-day rule since, by reason of the \"extenuating circumstances,\" it is an exception to that rule. However, the record does not indicate any extenuating circumstances that would remove the case from the effect of the rule. Wells was admitted to the hospital on January 21, and signed an admission application. The operation was performed several days after the admission and he was discharged in due course. We do not consider the sole fact that Wells was not a resident of metropolitan Rockford as a sufficient extenuating circumstance as urged by the hospital nor does it appear that Wells was an emergency patient at the time of his admission.\n[2, 3] The plaintiff states that the delay in the notice could not possibly have harmed the interests of the township and that, therefore, it would be a mere legalism to deny their claim on that basis. An argument to that end seems to ignore a major reason for the rule. The purpose of the prompt notification is to afford a protection for both the township and the hospital or other source of assistance. An early determination of the question of medical indigency would permit the hospital to make a timely and realistic appraisal of its financial relationship to the patient and to act accordingly.\nIt also appears to us that the evidential facts in the record before us fail to establish that Wells was a \"medical indigent\" at the time of his hospitalization. The Whaples case is also the only reported case on that question since the enactment of the Code. In that case, *283 the parents of Ruth Whaples were both unemployed at the time of her hospitalization. Ruth was the oldest of four children and the combined gross income of the parents during the 12-month period was $3,051. The only assets owned by the family were a small equity in a house trailer, an inoperable automobile and a $20 television set. The court concluded that they were properly categorized as \"medically indigent.\"\n[4, 5] The evidence in the case before us is that Max Wells was employed and earned $4,800 a year at the time he entered the hospital on January 21, 1963. Although he was married, he did not live with or support his wife and he had no dependent children. Wells had some hospitalization insurance, but apparently few other assets. Any right of the plaintiff to recover against Oregon Township was dependent upon Wells' indigency. The plaintiff had the burden of proof in this respect. We cannot but agree with the trial court that this evidence failed to show that Max Wells was a medical indigent as the term is contemplated by the Public Assistance Code when he entered the hospital. Wells' bankruptcy petition filed March 5, 1964, while relevant, offers very inadequate proof as to his financial condition on January 21, 1963.\nIn the light of our conclusion on the issues of notice and indigency, we need not consider plaintiff's contention that the trial court improperly excluded the testimony of the credit manager of the hospital to the effect that the charges for the services rendered Wells were \"usual and customary.\"\n[6, 7] It was, of course, the function of the trial court, as trier of the facts, to weigh the evidence and formulate its decision. We will not substitute our judgment for that decision where, as here, it is well supported by the record for review. Bennis v. Chicago Transit Authority, 33 Ill. App.2d 334, 341, 179 NE2d 421; Petition of Breger v. Seymour, 74 Ill. App.2d 197, 202, 219 NE2d 265.\n*284 The decision of the Circuit Court of Ogle County will be affirmed for the reasons stated.\nJudgment affirmed.\nDAVIS, P.J. and MORAN, J., concur.\n"} -{"text": "\n191 U.S. 532 (1903)\nTOLTEC RANCH COMPANY\nv.\nCOOK.\nNo. 48.\nSupreme Court of United States.\nArgued November 3, 1903.\nDecided December 21, 1903.\nERROR TO THE SUPREME COURT OF THE STATE OF UTAH.\n*534 Mr. Maxwell Evarts, with whom Mr. Lindsay R. Rogers and Mr. T.D. Johnson were on the brief, for plaintiff in error.\nMr. B.H. Jones for defendants in error submitted.\n*537 MR. JUSTICE McKENNA, after stating the case as above, delivered the opinion of the court.\nThe case is in narrow compass. The question presented is whether adverse possession under claim of right for the period prescribed by the statute of limitations of Utah before patent was issued by the United States can prevail against the latter. It has been decided by this court that adverse possession of land gives title to it and all of the remedies which attach to the *538 title. This was expressly ruled in Sharon v. Tucker, 144 U.S. 533. The suit was a bill in equity to establish as matter of record a title acquired by adverse possession, and it was brought against those who but for such acquisition would have been the owners. Mr. Justice Field, speaking for the court, said:\n\"It is now well settled that by adverse possession for the period designated by the statute, not only is the remedy of the former owner gone, but his title has passed to the occupant, so that the latter can maintain ejectment for the possession against such former owner should he intrude upon the premises. In several of the States this doctrine has become a positive rule, by their statutes of limitations declaring that uninterrupted possession for the period designated to bar an action for the recovery of land shall, of itself, constitute a complete title. Leffingwell v. Warren, 2 Black, 599; Campbell v. Holt, 115 U.S. 620, 623.\" See also Shelly v. Guy, 11 Wheat. 361.\nAdverse possession, therefore, may be said to transfer the title as effectually as a conveyance from the owner; it may be considered as tantamount to a conveyance. And the Central Pacific Railroad Company had the title. Salt Co. v. Tarpey, 142 U.S. 241. It would seem, therefore, an irresistible conclusion that it could have been transferred by any of the means which the law provided. It is, however, contended otherwise, and Ankeny v. Clark, 148 U.S. 345; Barden v. Northern Pacific R.R. Co., 154 U.S. 288, and Nelson v. Northern Pacific Ry. Co., 188 U.S. 108, are urged to support the contention. A comparison of those cases with Salt Co. v. Tarpey becomes necessary.\nSalt Co. v. Tarpey was an action of ejectment. Tarpey was the plaintiff in the trial court. He relied for his title upon a lease from the Central Pacific Railroad Company, and it became necessary to consider the nature of the Congressional grant to that company. The issue made was direct and unmistakable, and the decision was equally so. The plaintiff contended that the grant vested in the company the legal title. It was asserted on the other hand that the title to the land was *539 retained until the cost of selecting, surveying and conveying all the granted lands was paid, and, also, that by other provisions of the granting act the title remained in the government until patent issued. Both contentions were rejected. The court said that the terms of the grant \"import the transfer of a present title, not one to be made in the future. They are that `there be and is hereby granted' to the company every alternate section of the lands. No partial or limited interest is designated, but the lands themselves are granted, as they are described by the sections mentioned. Whatever interest the United States possessed in the lands was covered by those terms, unless they were qualified by subsequent provisions, a position to be presently considered.\" Those provisions were considered, and it was determined that they did not qualify the terms of the grant conveying the title or essentially limit them. Anticipating the question that if such be the import of the act, what was the necessity of patents, it was said, there were many reasons why the issue of patents would be of great service to the patentees. \"While not essential to transfer the legal right the patents would be evidence that the grantee had complied with the conditions of the grant, and to that extent the grant was relieved from the possibility of forfeiture for breach of its conditions. . . . They would thus be in the grantee's hands deeds of further assurance of his title, and, therefore, a source of quiet and peace to him in its possession.\" And the conclusion was that the title transferred was a legal title, as distinguished from an equitable and inchoate interest. The distinction expressed the completeness of the title conveyed.\nAnkeny v. Clark was an action for the recovery of the value of 12,767 bushels of wheat, which had been delivered by Clark to Ankeny in pursuance of a contract by which Ankeny agreed to sell and deliver to Clark two sections of land in Walla Walla County, in what was then the Territory of Washington. After the delivery of the wheat Clark demanded a deed for the land. Ankeny, after some delay on one pretext or another, informed Clark that he could have a warranty deed to a part of the land, *540 and a quitclaim deed to the part which was called railroad land, and informed him, as to the latter part, that if the Northern Pacific Railroad Company could not get title he would be obliged to procure title from the government. Ankeny promised to pay the necessary expenses of obtaining title in that way. Clark refused the offer and gave notice that, unless a good title was conveyed to him for the whole of the land within five days, he would abandon possession and claim compensation for the violation of the contract. Ankeny paid no attention to the notice, and Clark brought suit for the value of the wheat and recovered. The case came to this court from the Supreme Court of the Territory. In passing on the case this court said there were three principal matters of contention in the trial court. We are concerned with only one of them, and that is, \"Did Ankeny have good title to the northeast quarter of section 19, being part and parcel of the lands which he agreed to sell to Clark?\" Clark asserted the negative of the question; Ankeny contended for the affirmative, and cited Salt Co. v. Tarpey. The court did not find it necessary to decide the issue thus accurately presented. It followed Salt Co. v. Tarpey, to the effect that the government could enforce the payment of the costs and could withhold the patents until they were paid, and this, it was said, gave \"the government a lien for said costs.\" And it was hence held that Ankeny \"did not hold such a title as it was obligatory on the plaintiff (Clark) to accept.\" But Salt Co. v. Tarpey was not questioned. It was only decided that the land was subject to a lien and, so burdened, Clark was not compelled to receive it.\nBarden v. Northern Pacific R.R. Co., 154 U.S. 288, was an action by the Railroad Company for the recovery of certain lands containing veins or lodes of rock in place bearing gold, silver and other precious metals. The plaintiff relied for title upon its grant. The defendant contended that the lands were excepted by express words from the grant. This contention was sustained. It is manifest, therefore, that the case in no way militates with the decision in Salt Co. v. Tarpey, and the *541 court said so. Mr. Justice Field was the organ of the court in both cases, and he expressed the inapplicability of the Tarpey case and left it unimpaired. What was there said was affirmed, that the title passed at the date of the grant. Of what lands? Of those, it was held, which were not reserved as mineral. In other words, mineral lands were not conveyed, whether known or unknown to be such at the time of the grant. This was the main question decided. It was also held that the issue of patent would constitute a determination of the character of the land by reason of the power of the Land Department to determine and establish it. But it was not intimated, nor does it follow, that the conveyance of the title to the company was by the patent and not by the granting act. There was, therefore, nothing decided which detracts from Salt Co. v. Tarpey.\nNelson v. Northern Pacific Railway was an action brought by the Railway Company to recover the possession of a quarter section of land claimed to be within the land grant of the Northern Pacific Railroad, and the company held a patent. Nelson claimed to have settled upon the land three years before the definite location of the road. He claimed, therefore, to be within the exceptions of the grant. The land when he settled upon it was unsurveyed, and the effect of this constituted one of the questions in the case. Upon the filing of a map by the Railroad Company of its general route, an order was made by the Land Department withdrawing from settlement the lands within the limits of the grant. The effect of this order was another question in the case. It was held \"that the Railroad Company did not acquire any vested interest in the land here in dispute in virtue of its map of general route or the withdrawal order based on such map,\" and it was further held that Nelson's settlement upon and occupancy of the land was valid, and constituted a claim upon the land within the meaning of the Northern Pacific act of 1864. In other words, it was held that the land was excluded from the grant by express words. The operative words which produced that effect were expressed in the following provision of section 3 of the act: \"And wherever, *542 prior to said time, [of definite location] any of said sections or parts of sections shall have been granted, sold, reserved, occupied by homestead settlers, or preempted, or otherwise disposed of, other lands shall be selected by said company in lieu thereof,\" etc. This view was established in an elaborate opinion. The case, therefore, like Barden v. Northern Pacific R.R., decided only that lands did not pass by the grant which were reserved from it. An evident proposition, whatever might have been the difficulties in determining what lands were reserved. And there were difficulties. This court in consequence divided in opinion. But those difficulties do not confront us in the case at bar. They are settled, and in their settlement no doubts were cast upon the efficacy of the grants to convey title to all the lands they covered \u0097 to all that were not reserved from them.\nJudgment affirmed.\nMR. JUSTICE BREWER concurs in the judgment.\n"} -{"text": "\n56 Cal.App.4th 230 (1997)\nIn re CODY S., a Person Coming Under the Juvenile Court Law.\nLOS ANGELES COUNTY DEPARTMENT OF CHILDREN AND FAMILY SERVICES, Plaintiff and Respondent,\nv.\nRHONDA P., Defendant and Appellant.\nDocket No. B105664.\nCourt of Appeals of California, Second District, Division Four.\nJune 18, 1997.\n*231 COUNSEL\nJane Winer, under appointment by the Court of Appeal, for Defendant and Appellant.\nDe Witt W. Clinton, County Counsel, Auxiliary Legal Services, Holly R. Bryan and Kim D. Kedeshian for Plaintiff and Respondent.\nOPINION\nEPSTEIN, Acting P.J.\nIn this appeal, mother Rhonda P. challenges the juvenile court order terminating her parental rights. Her sole contention on appeal is that the court was not provided with adequate information and hence was unable to consider the minor's wishes regarding placement. We conclude that the department of children and family services (DCFS) provided sufficient information and affirm the order.\n\nFACTUAL AND PROCEDURAL SUMMARY\nAppellant is the mother of Cody S., born February 1, 1992. When Cody was two years old, he witnessed his father's murder. On February 16, 1995, Cody was declared a dependent child (Welf. & Inst. Code, \u00a7 300, subds. (b) and (j); all undesignated statutory references are to this code) based on sustained allegations that his home was in a filthy and unsanitary condition, and that his brother was a dependent child suitably placed in foster care. Appellant was ordered to participate in parenting and grief counseling, and conjoint counseling with Cody.\n*232 At the six-month judicial review, the court continued jurisdiction over Cody, and continued the reunification services plan. At the 12-month judicial review, the court continued jurisdiction, terminated reunification services, and set the matter for a hearing pursuant to section 366.26.\nAppellant challenged this order by writ petition, which was ultimately denied. (In re Cody S. (May 10, 1996) B099366 [nonpub. opn.].) Appellant also sought a change of order pursuant to section 388. That petition was denied on May 16, 1996.\nAt the section 366.26 hearing on September 9, 1996, the court terminated parental rights. This is an appeal from that order.\n\nDISCUSSION\n(1) Appellant claims the order terminating parental rights must be reversed because DCFS failed to provide the court with information regarding Cody's wishes as required under section 366.21, subdivision (i)(5) (hereafter section 366.21(i)(5)), thereby precluding the court from giving adequate consideration to Cody's wishes. Section 366.21(i)(5) requires preparation of an adoption assessment prior to a section 366.26 hearing, which \"shall include\" information addressing \"The relationship of the minor to any identified prospective adoptive parent or guardian, the duration and character of the relationship, the motivation for seeking adoption or guardianship, and a statement from the minor concerning placement and the adoption or guardianship, unless the minor's age or physical, emotion, or other condition precludes his or her meaningful response, and if so, a description of the condition.\" (\u00a7 366.21(i)(5), italics added.)\nIn this case, the adoption assessment did not include a statement from Cody. Instead, the report stated: \"Cody, age 4 years, is too young to make a meaningful statement about adoption.\" Appellant argues this cannot be a valid basis to excuse compliance with the requirement of obtaining a statement where the child is age four or older. She relies on section 317, subdivision (e), which provides: \"In any case in which the minor is four years of age or older, counsel [for the minor] shall interview the minor to determine the minor's wishes and to assess the minor's well-being, and shall advise the court of the minor's wishes.\" According to appellant, if the Legislature considers a four-year-old mature enough to be interviewed by counsel, then DCFS could not use the fact that Cody was only four years old as an excuse for failing to obtain his statement regarding adoption. We decline to graft the specific age requirement of section 317 onto section 366.21(i)(5).\n*233 Prior to its amendment in 1993, section 366.21(i)(5) required DCFS to include a statement from the minor \"if the minor is 10 years of age or older.\" In amending the statute, the Legislature expanded the opportunity for children of any age to express their feelings to the court regarding proposed placement, adoption, or guardianship. (Com. Analysis Statement of Assem. Com. on Judiciary, Sen. Bill No. 426 (July 7, 1993).) Rather than simply lower the age at which a statement must be obtained, the Legislature deleted the specific age requirement, instead requiring the statement \"unless the minor's age or physical, emotional, or other condition precludes his or her meaningful response.\" By this choice, the Legislature rejected a purely chronological requirement in favor of a formulation which recognizes that children vary in their ability to provide a meaningful statement based on several different factors. There is no ambiguity in that formulation.\nWhat is required under section 366.21(i)(5) is a statement from the minor concerning placement, adoption or guardianship, or an explanation as to why the child's physical, emotional or other condition precludes the child from making a meaningful statement on that subject. In this case, the explanation was that Cody was too young to provide a meaningful statement about adoption. The record bears that out.\nCody was four years, three months old at the time the initial assessment report was prepared, and four years, seven months old at the time of the section 366.26 hearing. At the hearing, the children's social worker (CSW) testified that she had discussed adoption with Cody, although she had not specifically explained that he would not see appellant anymore if he were adopted. According to the CSW, Cody's foster mother had many books on adoption and what it means to be adopted. The foster mother had been reading these books regularly to Cody, \"[a]nd he's beginning to get an understanding of adoption and he seemed to relay that back to me.\" This evidence indicates that at the time of the hearing, four-year-old Cody had not yet grasped the full implications of adoption, and therefore would not be able to provide a meaningful statement about it to the CSW.\nThe court was provided with other information regarding Cody's wishes. In the September 1996 progress report, the CSW reported on the development of Cody's relationship with his prospective adoptive parents: \"It does appear that at this time, Cody considers Mr. and Mrs. K. to be special friends with whom he would like to live; however, it is important that he also begin to see them in their parental roles.\" The report continued: \"CSW has met with Cody on several occassions, and he has expressed a desire to live with Mr. and Mrs. K. In fact, [sic] he continually asks them when he can move into their house.\"\n*234 While Cody's age and lack of understanding of adoption may have precluded him from making a meaningful statement about adoption, his wishes about placement were adequately reflected in the reports submitted to the trial court for the section 366.26 hearing.\n\nDISPOSITION\nThe order terminating parental rights is affirmed.\nHastings, J., and Baron, J., concurred.\n"} -{"text": "\n257 F.Supp.2d 768 (2003)\nCARY OIL CO., INC., et al., Plaintiffs,\nv.\nMG REFINING & MARKETING, INC., et al., Defendants.\nNo. 99 CIV. 1725(VM).\nUnited States District Court, S.D. New York.\nApril 28, 2003.\n*771 Richard G. Tashjian, Tashjian & Padian, New York, NY, for plaintiffs.\nRobert B. Bernstein, Kaye, Scholer, Fierman, Hays & Handler, L.L.P., New York, NY, for defendants.\n\nDECISION AND ORDER\nMARRERO, District Judge.\nBefore the Court are ten motions in limine (the \"Motions\") submitted by Plaintiffs in connection with the trial of this matter, scheduled to begin on May 5, 2003.\nAs discussed in the Statement of the Court Regarding Certain Motions in Limine of Plaintiffs, dated April 28, 2003, which is attached hereto and incorporated by reference herein, the Court denies five of the Motions, grants three of the Motions, and grants in part and denies in part two of the Motions. Accordingly, it is hereby\nORDERED that the Plaintiffs' Motion to Exclude Evidence and Argument Regarding MG's Illegality Defense or to Enforce the Flexie Without Paragraph 16 is denied; and it is further\nORDERED that the Plaintiffs' Motion to Exclude Evidence and Argument on the Beliefs and Statements of Salesmen is denied; and it is further\n*772 ORDERED that the Plaintiffs' Motion to Exclude Evidence and Argument on the Motivations, Communications, and Reasons Behind Plaintiffs Filing the Instant Lawsuit is granted; and it is further\nORDERED that the Plaintiffs' Motion to Preclude Admission of Unrelated Arbitration Decision is granted in part and denied in part; and it is further\nORDERED that the Plaintiffs' Motion to Exclude Evidence and Argument Relating to Alleged Malfeasance and Unauthorized Acts of the Former President of MGRM is granted in part and denied in part; and it is further\nORDERED that the Plaintiffs' Motion to Exclude Evidence and Argument on the Statute of Frauds is denied; and it is further\nORDERED that the Plaintiffs' Motion to Exclude Evidence and Argument on Failure of Consideration is granted; and it is further\nORDERED that the Plaintiffs' Motion to Exclude Any Argument or Evidence That MGRM Did Not Breach the Flexies is denied; and it is further\nORDERED that the Plaintiffs' Motion to Exclude Evidence and Argument Concerning Former Plaintiffs or Other MG Customers is granted; and it is further\nORDERED that the Plaintiffs' Motion to Exclude Evidence of Plaintiffs' Accounting Practices and Whether Premiums Were Paid on the Flexies is denied; and it is finally\nORDERED that the parties shall initiate a conference call with the Court to discuss all outstanding pre-trial matters on Tuesday, April 29, 2003 at 1:15 p.m.\nSO ORDERED.\n\nATTACHMENT\n\nSUMMARY DECISIONS OF THE COURT REGARDING CERTAIN MOTIONS IN LIMINE OF PLAINTIFFS\n\nI. MOTION TO EXCLUDE EVIDENCE AND ARGUMENT REGARDING MG'S ILLEGALITY DEFENSE OR TO ENFORCE THE FLEXIE WITHOUT PARAGRAPH 16\n\nPlaintiffs' motion is denied.\nWith regard to MG's illegality defense, the Court notes two considerations. First, in In re: MG Ref. & Marketing, Inc., No. 94 Civ. 2512(SS), 1997 WL 23177 (S.D.N.Y.1997), 1997 U.S. Dist. LEXIS 444, Judge Sotomayor held that Paragraph 19(c) of the flexie contracts (the \"Contracts\") does not waive a claim of illegality because \"public policy dictates that the Court refrain from enforcing [illegal] agreements.\" Id. at *8. Second, despite what Plaintiffs allege are changes to public policy\u0097as reflected by the enactment of the Commodity Futures Modernization Act (\"CFMA\")\u0097since Judge Sotomayor's ruling, this Court has already ruled in this case concerning a similar issue that the \"presumption against retroactivity\" applies to provisions of the CFMA that might \"`eliminate a defense' to a breach of contract action and `therefore change[] the substance of the existing cause of action for ... defendants by attaching] a new disability, in respect to transactions or considerations already past.'\" Cary Oil Co., Inc. v. MG Refin. & Marketing, Inc., 230 F.Supp.2d 439, 457 (S.D.N.Y.2002).\nConcerning the severability of Paragraph 16, the Court finds the following points compelling. First, in determining whether a contract is severable or entire, \"the primary factor to consider is the intent of the parties as determined by *773 a fair construction of the terms and provisions of the contract itself, by the subject matter to which it has reference, and by the circumstances existing at the time of contracting.\" Mun. Capital Appreciation Partners I, L.P., v. Page, 181 F.Supp.2d 379, 384 (S.D.N.Y.2002). Second, because intent of the parties is a crucial element, the Court does not feel that, on the eve of trial, it is appropriate for the Court to usurp the jury's role in evaluating the totality of the evidence and determining whether the parties intended, based on the circumstances existing at the time of contracting, to create a Contract that could exist despite the elimination of the blowout provision.\nIndeed, one of the questions that the jury must answer is whether Plaintiffs viewed the Contracts as speculative instruments, or as fuel delivery contracts or risk management tools to hedge against possible problems with other fuel delivery contracts. The jury's answer will also allow it to determine whether the parties intended the Contracts to remain valid despite the loss of what could be viewed as a crucial provision of the Contract.\n\nII. MOTION TO EXCLUDE EVIDENCE AND ARGUMENT ON THE BELIEFS AND STATEMENTS OF SALESMEN\n\nPlaintiffs' motion is denied, for the reasons expressed by the Court in more detail at the pre-trial conference held on the record on April 23, 2003.\n\nIII. MOTION TO EXCLUDE EVIDENCE AND ARGUMENT ON THE MOTIVATIONS, COMMUNICATIONS, AND REASONS BEHIND PLAINTIFFS' FILING THE INSTANT LAWSUIT\n\nPlaintiffs' motion is granted.\nDefendants wish to introduce such evidence and argument to support certain affirmative defenses. The Court has barred three of these defenses (equitable estoppel, waiver and rescission) as a matter of law based on prior rulings in this matter at the summary judgment phase. With regard to the two remaining affirmative defenses (illegality and release), the Court is persuaded that Defendants will be able to argue these defenses without needing to introduce evidence and argument relating to the motivations of Plaintiffs in bringing the instant lawsuit.\nMoreover, such evidence would be distracting to the jury, focusing them on the irrelevant issue of why the Plaintiffs may have filed the lawsuit. The Court is not persuaded that such an issue has a direct bearing on the illegality of the Contracts or whether or not Plaintiffs signed a release that barred their claims. Indeed, the Court believes the \"probative value [of such evidence] is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury Fed.R.Evid. 403.\n\nIV. MOTION TO PRECLUDE ADMISSION OF UNRELATED ARBITRATION DECISION\n\nPlaintiffs' motion is granted in part, and denied in part.\nThe Court is persuaded that the decision issued by a panel of arbitrators in an employment dispute between Defendants and two of its former employees, W. Arthur Benson and William Benson (the \"Arbitration Decision\") could, if introduced in full to the jury, have a prejudicial effect on the jury's deliberations, creating an impression that an official decision-maker found the Bensons to be negligent in their fiduciary duties as employees. Such an impression could encourage the jury to make a decision on how much blame to *774 assign to Defendants based on the arbitration panel's findings, not on the jury's own deliberations. Therefore, Defendants will not be allowed to introduce the Decision as a trial exhibit, nor to introduce deposition testimony from cross-examination of the Bensons that essentially serves as a backdoor means to read the arbitration panel's hearsay and unduly prejudicial findings into the record of this case.\nHowever, insofar as Defendants seek to introduce such deposition testimony, assuming a proper foundation for it exists, to demonstrate bias by any of the Bensons against Defendants or to raise questions of the Bensons' credibility in their testimony regarding Defendants, the evidence may be admitted. In addition, the Court will permit relevant discussion of the Decision only if Defendants lay the proper foundation to introduce any portion of the Arbitration Decision as it bears upon the bias or credibility of the Bensons.\n\nV. MOTION TO EXCLUDE EVIDENCE AND ARGUMENT RELATING TO ALLEGED MALFEASANCE AND UNAUTHORIZED ACTS OF THE FORMER PRESIDENT OF MGRM\n\nPlaintiffs' motion is granted in part, and denied in part.\nThe Court is not persuaded that all evidence and argument relating to the actions of Arthur Benson (\"Benson\") should be excluded. As Defendants note, certain elements of Plaintiffs' veil-piercing argument will require Plaintiffs to prove and the jury to find that MGAG controlled and dominated the decision by MGRM to enter into the Consent Order and that in doing so it employed improper means. This issue necessarily involves questions of what actions Benson took and whether those actions were known and approved of by executives of MGAG and/or MG Corp.\nHowever, consistent with its ruling regarding the permissible use of portions of the Arbitration Decision for limited purposes, the Court is not persuaded that Defendants should be allowed to introduce any findings from that proceeding that show Benson was terminated by MGRM for gross negligence. Moreover, the Court is not inclined to permit Defendants to engage in a debate over whether Benson's business judgment was good or bad. Thus, the Court will limit any discussions of Benson's actions to those that directly involve the relationship between MGAG and MGRM as it pertains to and informs the veil-piercing test, as previously defined by this Court.\n\nVI. MOTION TO EXCLUDE EVDENCE AND ARGUMENT ON THE STATUTE OF FRAUDS\n\nPlaintiffs' motion is denied.\nThe Court is persuaded that Defendants should be permitted to argue that some Contracts with certain Plaintiffs were never binding because the Contracts were not signed and returned by the Plaintiffs. New York courts have consistently held that \"if parties do not intend to be bound by an agreement until it is in writing and signed, then there is no contract until that event occurs.\" R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d 69, 74 (2d Cir.1984). To determine such intent, courts look to four factors: \"(1) whether there has been an express reservation of the right not to be bound until a writing is executed; (2) whether there has been partial performance; (3) whether any terms of the alleged agreement remain to be negotiated; and (4) whether the disputed agreement is the type of contract that is ordinarily committed to writing.\" Stockalert, Inc. v. Nasdag Stock Market, Inc., No. 95 Civ. 9335(JFK), 1998 WL 556036, at *9 (S.D.N.Y. 1998). The Court is satisfied *775 that Defendants should be permitted to introduce evidence to the jury in order to prove that these factors demonstrated an intent by both parties not to be bound by the Contracts unless they were signed, and that some Plaintiffs did not sign the Contracts as necessary to manifest this intention, thus making any such Contracts invalid.\n\nVII. MOTION TO EXCLUDE EVIDENCE AND ARGUMENT ON FAILURE OF CONSIDERATION\n\nPlaintiffs' motion is granted.\nThe Court agrees with Judge Sotomayor that \"\u00a7 2 of [the flexie contracts] unambiguously places an obligation on each Customer to take delivery sometime within the five or ten year terms set by the individual instruments.\" MG Ref. & Marketing, Inc. v. Knight Enter., Inc., 25 F.Supp.2d 175, 181 (S.D.N.Y.1998). Thus, the Court is persuaded that when Plaintiffs entered into the Contracts, they assumed an irrevocable obligation to purchase petroleum products at some point, and that this obligation satisfies the legal requirement of consideration.\nDefendants argue that this obligation was in fact \"illusory\" because (1) \"it was a virtual certainty that futures prices would spike during the contract term\" and allow Plaintiffs to blow out their contracts and (2) even if such a spike did not happen, MGRM had told Plaintiffs that it would roll over the Contracts so that Plaintiffs would never have to take delivery. (MG Defendants' Opposition to Plaintiffs' Motion in Limine to Exclude Evidence and Argument on Failure of Consideration, dated Apr. 11, 2003, at 2.) However, an oil price spike was an outside event uncontrollable by either party, and while it is possible that Plaintiffs may have thought that a price spike would happen, they had to enter into the Contracts with the knowledge that a spike in oil prices during the term of the Contracts was not an inevitable event. Thus, their promise to take delivery was not entirely illusory.\nIn addition, Defendants' purported promise to roll over the Contracts to prevent Plaintiffs from having to take delivery is speculative, unsupported by written documentation, and, even if it did exist, could have changed if the personnel that made the alleged promise left MGRM during the term of the Contracts. Thus, the Court is not persuaded that Defendants' alleged oral promises, which were supported only by the word of MGRM personnel who may not have been employed at MGRM long enough to enforce such promises, are sufficient to demonstrate an illusory promise as a matter of law.\n\nVIII. MOTION TO EXCLUDE ANY ARGUMENT OR EVIDENCE THAT MGRM DID NOT BREACH THE FLEXIES\n\nPlaintiffs' motion is denied.\nThe Court has already ruled that the Consent Order may be introduced at the trial to enable the jury to understand why Defendants entered into the Consent Order and what the Consent Order meant to the future of the Contracts. In the same ruling, the Court noted that for Plaintiffs to prove their veil-piercing argument, they will have to show both domination by MGAG and/or MG Corp. of MGRM's decision to enter into the Consent Order and that such domination was used to commit a fraud or wrong, such as a breach of a legal duty, that injured Plaintiffs.\nTo instruct the jury at the outset that MGRM's entry into the Consent Order constituted a breach of the Contracts would disrupt the Court's prior ruling and deny Defendants the opportunity to argue *776 that their inability to perform was forced upon them by order of a governmental entity and that therefore they did not intentionally breach a legal duty or commit a wrong, fraud or dishonest and unjust act. As the Court previously ruled on summary judgment, the record presents a genuine issue of material fact as to whether MGAG or MG Corp. used its alleged domination to cause MGRM to breach the Contracts, and the Court is not inclined to usurp the jury's role in evaluating Defendants' motivations in entering into the Consent Order and deciding whether or not such an entry constituted a legal breach.\nThe Court notes that in a previous ruling, it precluded Defendants from offering an affirmative defense of agreement to rescind. Thus, Defendants will be unable to assert that certain Contracts implicated in their proposed affirmative defense were rescinded and that no breach occurred as a result.\n\nIX. MOTION TO EXCLUDE EVIDENCE AND ARGUMENT CONCERNING FORMER\n\nPLAINTIFFS OR OTHER MG CUSTOMERS\nPlaintiffs' motion is granted.\nThe Court is persuaded that evidence concerning statements made by former plaintiffs or other MGRM flexie customers who are not a party to the instant lawsuit is inadmissible both because of the nature of the statements Defendants seek to introduce and the manner in which they were procured. While the Court has ruled that certain statements made directly by the MGRM salesmen to their customers, including former plaintiffs in this action, are admissible, the Court is persuaded that statements made by former plaintiffs themselves or other such customers, in affidavits given in connection with other proceedings, about what the MGRM salesmen may have said in marketing the Contracts constitute inadmissible hearsay.\nDefendants contend that these statements are admissible as statements against pecuniary interest, but the Court is not satisfied that the record is sufficiently clear as to why the former plaintiffs or customers made such statements in prior proceedings or whether they then reasonably contemplated that such statements would adversely affect their pecuniary interests. This lack of clarity is worsened by the fact that Defendants intend to introduce such statements via affidavits and/or deposition testimony, which makes it nearly impossible to fully understand the declarants' state of mind or to ascertain their purpose at the time they made the statements.\nThe Court notes that this ruling does not alter its previous ruling allowing statements made directly by the MGRM salesmen themselves as evidence of a consistent MGRM business policy or practice carried out by the Company's employees, even if such statements were made to former plaintiffs or other MGRM flexie customers who are not parties to the instant lawsuit.\n\nX. MOTION TO EXCLUDE EVIDENCE OF PLAINTIFFS' ACCOUNTING PRACTICES AND WHETHER PREMIUMS WERE PAID ON THE FLEXIES\n\nPlaintiffs' motion is denied.\nWith regard to whether or not Defendants should be allowed to introduce evidence that Plaintiffs failed to list the Contracts as contingent liabilities on their financial statements, the Court is persuaded that Defendants should be permitted to elicit testimony from certain Plaintiffs that they understood that the Contracts represented contingent purchase obligations, that they had been told by their accountants that the Contracts should be recorded *777 in their respective company's financial statements as contingent liabilities, and that they never so recorded the Contracts. Such evidence could provide the jury with insight into certain Plaintiffs' intentions regarding the Contracts, one of the central factual issues in dispute in this litigation that the jury will be called to resolve. The fact that Plaintiffs had been appraised by outside counsel that the Contracts should be accounted for in a specific way, and yet did not follow that advice, may provide evidence of whether Plaintiffs actually anticipated utilizing the Contracts in a certain manner.\nThe Court is not persuaded that expert testimony on this point is necessary as long as Defendants plan to elicit such evidence through questioning of employees of the Plaintiffs who were in charge of or worked on the Plaintiffs' financial statements. Most if not all such employees, by virtue of their corporate duties, will be familiar with standard accounting practices in the Plaintiffs' field, and can testify as to typical practice for their employer or in the industry\u0097insofar as they may qualify by training or experience to do so\u0097in accounting for certain liabilities. Through cross-examination, Plaintiffs can rebut Defendants' line of questioning by eliciting testimony from the employees that standard practice did not require the Contracts to be accounted for as contingent liabilities, nor were the Plaintiffs required by law or custom to follow all of their accountants' advice.\nWith regard to whether or not Defendants should be allowed to introduce evidence concerning whether Plaintiffs paid premiums on the Contracts, the Court previously ruled that evidence and argument on failure of consideration should be excluded. As a result, evidence on premiums is unnecessary for the purpose of arguing about the issue of failure of consideration. Moreover, the Court is not persuaded that the lack of any payment by Plaintiffs on the Contracts is relevant to Plaintiffs' damages. The Court is satisfied that the Contracts had value for the Plaintiffs, either in the fuel delivery option or the blowout option, although the question of how that value should be measured if damages are to be awarded to Plaintiffs will be left to the jury to decide based on the testimony and evidence that it considers. Thus, Defendants will not be permitted to introduce evidence, for purposes of damages determination, concerning whether premiums were paid by Plaintiffs on the Contracts.\n"} -{"text": " Slip Op. 06-1\n\n UNITED STATES COURT OF INTERNATIONAL TRADE\n______________________________\n :\nESSEX MANUFACTURING, INC., :\n :\n Plaintiff, :\n : Before: Richard K. Eaton, Judge\n v. :\n : Court No. 02-00101\nUNITED STATES, :\n :\n Defendant. :\n :\n______________________________:\n\n OPINION\n\n[Defendant\u2019s motion for summary judgment granted; Plaintiff\u2019s\ncross-motion for summary judgment denied; case dismissed]\n\n\n Dated: January 3, 2006\n\n\n Neville Peterson, LLP (John M. Peterson and Maria E. Celis),\nfor plaintiff.\n\n Peter D. Keisler, Assistant Attorney General, Civil\nDivision, United States Department of Justice; Barbara S.\nWilliams, Attorney-in-Charge, International Trade Field Office\n(Jack S. Rockafellow); Chi S. Choy, Office of Assistant Chief\nCounsel for United States Bureau of Customs and Border\nProtection, of counsel, for defendant.\n\n\n\n Eaton, Judge: This matter is before the court on cross-\n\nmotions for summary judgment pursuant to USCIT Rule 56.\n\nPlaintiff Essex Manufacturing, Inc. (\u201cEssex\u201d or \u201cplaintiff\u201d),\n\nchallenges the classification of its imitation leather jackets by\n\fCourt No. 02-00101 Page 2\n\nthe United States Customs Service (\u201cCustoms\u201d)1 under the\n\nHarmonized Tariff Schedule of the United States (2000)\n\n(\u201cHTSUS\u201d).2 Customs classified the jackets under HTSUS\n\nsubheading 3926.20.90 as \u201cOther articles of plastics and articles\n\nof other materials of headings 3901 to 3914: . . . . Articles of\n\napparel or clothing accessories (including gloves, mittens and\n\nmitts): . . . Other: . . . \u201d subject to a 5% ad valorem tariff\n\nrate.3 Essex argues that its jackets are properly classifiable\n\n\n 1\n Effective March 1, 2003, the United States Customs\nService was renamed the United States Bureau of Customs and\nBorder Protection. See Reorganization Plan Modification for the\nDep\u2019t of Homeland Security, H.R. Doc. 108-32 at 4 (2003).\n 2\n With respect to the subsections at issue in this\naction, the terms of the Harmonized Tariff Schedule of the United\nStates in 1999 are identical to those of 2000.\n 3\n It is undisputed that Customs properly found in\nHeadquarters Ruling Letter 963800 of April 17, 2001, that in\norder to classify the jackets under plaintiff\u2019s proposed\nsubheading, HTSUS 3926.20.60, plaintiff had to establish that:\n\n 1. The article in issue is plastic;\n\n 2. The article is \u201crainwear,\u201d which includes jackets,\n coats, ponchos, parkas and slickers;\n\n 3. The article features an outer shell of polyvinyl\n chloride plastic;\n\n 4. The article may, but need not feature an attached\n hood; and\n\n 5. The article is not valued over ten ($10) dollars per\n unit.\n\nSee also Pl.\u2019s Mem. of Points and Auth. in Supp. of Pl.\u2019s Mot.\nfor Summ. J. at 7. It is also undisputed that defendant concedes\n (continued...)\n\fCourt No. 02-00101 Page 3\n\nunder HTSUS subheading 3926.20.60 as \u201cPlastic rainwear, including\n\njackets, coats, ponchos, parkas and slickers, featuring an outer\n\nshell of polyvinyl chloride plastic with or without attached\n\nhoods, valued not over $10 per unit,\u201d and, thus, not subject to\n\nany tariff. By its cross-motion, defendant United States (the\n\n\u201cGovernment\u201d or \u201cdefendant\u201d), on behalf of Customs, maintains\n\nthat Customs properly classified the subject merchandise under\n\nHTSUS subheading 3926.20.90, and asks the court to deny Essex\u2019s\n\nmotion and dismiss this case. The court has jurisdiction\n\npursuant to 28 U.S.C. \u00a7 1581(a) (2000). For the reasons set\n\nforth below, the court denies plaintiff\u2019s motion for summary\n\njudgment, grants the Government\u2019s cross-motion for summary\n\njudgment, and dismisses this case.\n\n\n\n BACKGROUND\n\n Plaintiff is an importer of the subject merchandise, which\n\nit identifies as polyvinyl chloride (\u201cPVC\u201d) or \u201cpleather\u201d\n\njackets. See Pl.\u2019s Mem. of Points and Auth. in Supp. of Pl.\u2019s\n\nMot. for Summ. J. (\u201cPl.\u2019s Mem.\u201d) at 1. In June, July, and August\n\nof 1999, plaintiff imported these jackets at ports of entry in\n\nAtlanta, Georgia and Los Angeles, California. See Summons of\n\n\n 3\n (...continued)\nthat plaintiff\u2019s jackets meet each of these criteria except so\nmuch of number 2 as requires that the jackets be \u201crainwear.\u201d See\nDef.\u2019s Mem. in Opp\u2019n to Pl.\u2019s Mot. for Summ. J., and in Supp. of\na Trial or Def.\u2019s Cross-Mot. for Summ. J. (\u201cDef.\u2019s Mem.\u201d) at 7.\n\fCourt No. 02-00101 Page 4\n\n1/17/01. Customs subsequently liquidated plaintiff\u2019s five\n\nAtlanta entries in November 1999, and the single Los Angeles\n\nentry in June 2000, classifying the merchandise under HTSUS\n\nsubheading 3926.20.90. Id. Thereafter, plaintiff timely filed\n\nprotests challenging Customs\u2019 classification.4 Customs, finding\n\nthat plaintiff\u2019s jackets were not \u201crainwear,\u201d denied the protests\n\nand plaintiff timely commenced the present action. Id. Both\n\nparties then moved for summary judgment pursuant to USCIT Rule\n\n56. After briefing was complete, the court ordered each party to\n\nsubmit a letter brief addressing the issue of whether there was a\n\n\u201ccommon or commercial\u201d meaning of the term \u201crainwear.\u201d See Pl.\u2019s\n\nLetter of 6/24/05; Def.\u2019s Letter of 6/24/05. Further, on August\n\n4, 2005, an evidentiary hearing was held. At the hearing, in\n\naddition to presenting testimony as to the \u201ccommon or commercial\u201d\n\nmeaning of the term \u201crainwear,\u201d the parties, through their expert\n\nwitnesses and various exhibits, also presented evidence as to the\n\nconstruction, design, and marketing of plaintiff\u2019s jackets and\n\nother garments. All of the testimony presented by the expert\n\nwitnesses was subject to cross-examination by opposing counsel as\n\nwell as questioning by the court.\n\n\n\n\n 4\n Plaintiff filed its protest concerning the Atlanta\nentries on December 22, 1999, and the Los Angeles entry on June\n12, 2001. See Summons of 1/17/01.\n\fCourt No. 02-00101 Page 5\n\n STANDARD OF REVIEW\n\n This court may resolve a classification issue by means of\n\nsummary judgment. See Bausch & Lomb, Inc. v. United States, 148\n\nF.3d 1363, 1365 (Fed. Cir. 1998). Summary judgment is\n\nappropriate \u201cif the pleadings, depositions, answers to\n\ninterrogatories, and admissions on file, together with the\n\naffidavits, if any, show that there is no genuine issue as to any\n\nmaterial fact . . . .\u201d USCIT R. 56(c). Summary judgment of a\n\nclassification issue \u201cis appropriate when there is no genuine\n\ndispute as to the underlying factual issue of exactly what the\n\nmerchandise is.\u201d Bausch & Lomb, 148 F.3d at 1365; Rollerblade,\n\nInc. v. United States, 112 F.3d 481, 483 (Fed. Cir. 1997). Where\n\njurisdiction is predicated on 28 U.S.C. \u00a7 1581(a), Customs\u2019\n\ninterpretation of an HTSUS tariff term, a question of law, is\n\nsubject to de novo review. See 28 U.S.C. \u00a7 2640(a)(1); see also\n\nE.T. Horn Co. v. United States, 27 CIT __, __, slip op. 03-20 at\n\n4 (Feb. 27, 2003) (not published in the Federal Supplement)\n\n(quoting Clarendon Mktg., Inc. v. United States, 144 F.3d 1464,\n\n1466\u201367 (Fed. Cir. 1998)).\n\n\n\n DISCUSSION\n\n The court employs a two-step process when analyzing a\n\nclassification issue: \u201c[F]irst, construe the relevant\n\nclassification headings; and second, determine under which of the\n\fCourt No. 02-00101 Page 6\n\nproperly construed tariff terms the merchandise at issue falls.\u201d\n\nBausch & Lomb, 148 F.3d at 1365 (citing Universal Elecs. Inc. v.\n\nUnited States, 112 F.3d 488, 491 (Fed. Cir. 1997)). Here, the\n\ncourt finds, and the parties agree, that the subject merchandise\n\nshould be classified within HTSUS chapter 39, which provides for\n\nclassification of \u201cplastics and articles thereof.\u201d Furthermore,\n\nthere is no disagreement that the subject merchandise should be\n\nclassified within heading 3926, which provides for \u201cOther\n\narticles of plastics and articles of other materials of headings\n\n3901 to 3914.\u201d The parties differ, however, as to the\n\nappropriate classification subheading. Plaintiff argues that the\n\nsubject merchandise should be classified under subheading\n\n3926.20.60 as \u201cPlastic rainwear, including jackets . . .\n\nfeaturing an outer shell of polyvinyl chloride plastic . . .\n\nvalued not over $10 per unit.\u201d See Pl.\u2019s Mem. of Points and\n\nAuth. in Opp\u2019n to Def.\u2019s Mot. for Summ. J. (\u201cPl.\u2019s Opp\u2019n\u201d) at 1\u20132\n\n(emphasis added). Defendant, on the other hand, claims that,\n\nbecause it is not rainwear, the subject merchandise is properly\n\nclassified under subheading 3926.20\u2019s \u201cbasket\u201d provision, i.e.,\n\n\u201cOther articles of plastics . . . Articles of apparel . . . ,\n\nOther . . . \u201d under subheading 3926.20.90. See Def.\u2019s Mem. in\n\nOpp\u2019n to Pl.\u2019s Mot. for Summ. J., and in Supp. of a Trial or\n\nDef.\u2019s Cross-Mot. for Summ. J. (\u201cDef.\u2019s Mem.\u201d) at 7. Where goods\n\nare capable of being classified under two or more headings, the\n\fCourt No. 02-00101 Page 7\n\nGeneral Rules of Interpretation5 (\u201cGRI\u201d) direct that the \u201cmost\n\nspecific description shall be preferred to headings providing a\n\nmore general description.\u201d GRI 3(a). Under the GRIs, then, if\n\nthis court finds that the jackets constitute \u201crainwear,\u201d\n\nplaintiff\u2019s more specific proposed subheading would trump\n\ndefendant\u2019s general provision. Therefore, because \u201c[t]he meaning\n\nof [a] tariff[] term is a question of law,\u201d the classification of\n\nplaintiff\u2019s jackets is, in accordance with the two-step process,\n\ninitially dependent upon this court\u2019s construction of the word\n\n\u201crainwear.\u201d See E.M. Chem. v. United States, 20 CIT 382, 386,\n\n923 F. Supp. 202, 206 (1996) (citing E.M. Chem. v. United States,\n\n920 F.2d 910, 912 (Fed. Cir. 1990)).\n\n\n\nI. HTSUS 3926.20.60 is a Principal Use Provision\n\n For plaintiff to prevail in its proposed classification, its\n\njackets must be shown to be rainwear. Both parties contend that\n\n\u201crainwear,\u201d as contained in subheading 3926.20.60, is a use\n\nprovision. See Pl.\u2019s Opp\u2019n at 16\u201317; Def.\u2019s Mem. at 1. As such,\n\nthe term is properly read in the subheading as \u201cplastic apparel\n\n\n 5\n Classification of goods under the HTSUS is governed by\nthe General Rules of Interpretation (\u201cGRI\u201d). See Carl Zeiss v.\nUnited States, 195 F.3d 1375, 1379 (Fed. Cir. 1999) (citing\nBaxter Healthcare Corp. of P.R. v. United States, 182 F.3d 1333,\n1337 (Fed. Cir. 1999)). If the proper classification cannot be\ndetermined by reference to GRI 1, it is then necessary to refer\nto the succeeding GRIs in numerical order. See N. Am. Processing\nCo. v. United States, 236 F.3d 695, 698 (Fed. Cir. 2001)\n(citation omitted).\n\fCourt No. 02-00101 Page 8\n\nused as rainwear.\u201d See United States v. Hillier\u2019s Son Co., 14\n\nCt. Cust. App. 216, 222 (1929) (\u201cObviously, the test of use must\n\nbe applied to a preparation in order to determine whether it is\n\nto be classified as a medicinal preparation, although the word\n\n\u2018use\u2019 does not appear in paragraph 5.\u201d); see also Stewart-Warner\n\nCorp. v. United States, 748 F.2d 663, 667 (Fed. Cir. 1984)\n\n(stating that \u201c[d]og food is a tariff item which, like smokers\u2019\n\narticles, household utensils, tableware, and other\n\nclassifications too numerous to detail, is a use classification.\n\nIt means food that is used to feed dogs.\u201d). Moreover, in\n\ncompleting the first step of the two-step process, the court is\n\nrequired to reach a conclusion as to the principal use of the\n\nsubject merchandise. Under the Additional U.S. Rules of\n\nInterpretation (\u201cAUSRI\u201d),\n\n 1. In the absence of special language or context which\n otherwise requires\u2013\n\n (a) a tariff classification controlled by use\n (other than actual use) is to be determined\n in accordance with the use in the United\n States at, or immediately prior to, the date\n of importation, of goods of that class or\n kind to which the imported goods belong, and\n the controlling use is the principal\n use . . . .\n\nAUSRI 1(a) (emphasis added). Principal use is \u201cthe use \u2018which\n\nexceeds any other single use.\u2019\u201d Lenox Collections v. United\n\nStates, 20 CIT 194, 196 (1996) (not reported in the Federal\n\nSupplement) (emphasis in original). Thus, the court must decide\n\fCourt No. 02-00101 Page 9\n\nif plaintiff\u2019s jackets belong to the class or kind of goods\n\nprincipally used as rainwear.\n\n\n\n A. Proper Meaning of Rainwear under the HTSUS\n\n \u201cWhere a tariff term is not defined in either the HTSUS or\n\nits legislative history, the term is given its common meaning,\n\nwhich is presumed to be the same as its commercial meaning.\u201d\n\nIntercontinental Marble Corp. v. United States, 381 F.3d 1169,\n\n1173 (Fed. Cir. 2004) (citing Rocknel Fastener, Inc. v. United\n\nStates, 267 F.3d 1354, 1356 (Fed. Cir. 2001); Carl Zeiss, Inc. v.\n\nUnited States, 195 F.3d 1375, 1379 (Fed. Cir. 1999)). \u201cTo\n\nascertain the common meaning of a term, a court may consult\n\ndictionaries, scientific authorities, and other reliable\n\ninformation sources and lexicographic and other materials.\u201d Id.\n\n(internal quotation marks omitted).\n\n\n\n Here, both parties cite various reference sources in support\n\nof their positions. Plaintiff presents the following definitions\n\nof the term \u201crainwear\u201d: \u201cClothing and accessories that are\n\nwaterproofed or water-repellant,\u201d Fairchild\u2019s Dictionary of\n\nFashion 301 (2d ed. 1998); and \u201cwaterproof or water-resistant\n\nclothing,\u201d Merriam-Webster Online Dictionary.6 Likewise,\n\ndefendant presents the following definitions of the term\n\n 6\n See wwww.m-w.com/dictionary/rainwear.\n\fCourt No. 02-00101 Page 10\n\n\u201crainwear\u201d: \u201cgarments suited for wearing in rain,\u201d XIII The\n\nOxford English Dictionary 133 (quot. 1953) (2d ed. 1989); and\n\n\u201cwaterproof or water-resistant clothing (as a raincoat) for bad\n\nweather wear,\u201d Webster\u2019s Third New International Dictionary of\n\nthe English Language, 1877 (1993). In like manner, at the\n\nevidentiary hearing held in this matter, the parties\u2019 experts\n\ntestified as to the definition of rainwear.7 Plaintiff\u2019s witness\n\ndefined the term as \u201can article of clothing that is worn to\n\nprotect you against the elements - - of warmth8 and keeping you\n\ndry and . . . water-resistant.\u201d Tr. of Civ. Cause For Evid.\n\nHearing (\u201cTr.\u201d) at 19:12-14. Defendant\u2019s witness defined the\n\nterm as having the \u201cprimary function of protecting the wearer\n\nfrom the rain.\u201d Tr. at 95:4\u20135. In other words, the parties are\n\nin substantial agreement that \u201crainwear\u201d means a garment that\n\nkeeps the wearer dry in the rain. The question then arises as to\n\n\n 7\n On June 13, 2005, prior to the evidentiary hearing,\nthis court ordered the parties to submit letter briefs\naddressing, among other things, whether the term \u201crainwear\u201d had a\ncommon or commercial meaning within the trade. See Order of\n6/13/05. Neither party claimed that \u201crainwear\u201d had any special\nmeaning within the garment trade. See Pl.\u2019s Letter of 6/24/05 at\n2 (arguing that \u201cthe common meaning of rainwear does not include\nany of the limitations posited by Customs . . . .\u201d); see also\nDef.\u2019s Letter of 6/24/05 at 1 (contending that, despite not\nhaving a special meaning, the common meaning of the term should\nbe limited).\n 8\n It is worth noting that, at various times, plaintiff\nseeks to introduce the notion that rainwear is worn not only to\nward off the rain, but also to keep the wearer warm. See, e.g.,\nPl.\u2019s Opp\u2019n at 17 (\u201cpurchasers use [the] merchandise to stay dry\nand warm in inclement weather.\u201d) (emphasis added).\n\fCourt No. 02-00101 Page 11\n\nwhether all garments that are waterproof or water-resistant and,\n\ntherefore, provide some protection from the rain, are rainwear in\n\ntheir principal use.\n\n\n\n B. Principal Use of the Subject Merchandise\n\n As previously noted, the principal use of an article is that\n\n\u201cuse . . . which exceeds all others.\u201d Sports Graphics, Inc. v.\n\nUnited States, 24 F.3d 1390, 1394 (Fed. Cir. 1994); see also\n\nLenox Collections, 20 CIT at 196; Automatic Plastic Molding, Inc.\n\nv. United States, 26 CIT 1201, 1205 (2002) (not published in the\n\nFederal Supplement); Int\u2019l Custom Prods., Inc. v. United States,\n\n29 CIT __, __, 374 F. Supp. 2d 1311, 1332 (2005). This court\n\ncustomarily employs the several factors first referenced in\n\nUnited States v. Carborundum Co., 536 F.2d 373, 377 (C.C.P.A.\n\n1976) (\u201cCarborundum Factors\u201d), to decide whether an article is\n\nincluded in a particular class or kind of merchandise.\n\nSpecifically,\n\n Factors which have been considered by courts to be\n pertinent in determining whether imported merchandise\n falls within a particular class or kind include [1] the\n general characteristics of the merchandise, [2] the\n expectation of the ultimate purchasers, [3] the\n channels, class or kind of trade in which the\n merchandise moves, [4] the environment of the sale, [5]\n the use, if any, in the same manner as merchandise\n which defines the class, [6] the economic practicality\n of so using the import, and [7] the recognition in the\n trade of this use.\n\nCarborundum, 536 F.2d at 377 (internal citations omitted); see\n\fCourt No. 02-00101 Page 12\n\nalso Bousa, Inc. v. United States, 25 CIT 386, 389 (2001) (not\n\nreported in the Federal Supplement); Simon Mktg., Inc. v. United\n\nStates, 29 CIT __, __, 395 F. Supp. 2d 1280, 1289 (2005).\n\n\n\n 1. General Characteristics of the Merchandise\n\n Plaintiff argues that its jackets have the characteristics\n\nof a garment that would keep the wearer warm and dry in inclement\n\nweather. To that end, plaintiff describes the merchandise as\n\n below-waist-length \u201cstadium\u201d rainwear jackets, which\n feature the logos and colors of National Football\n League (NFL), National Basketball Association (NBA),\n Collegiate Licensing and Major League Baseball (MLB)\n teams. The outer shell of each jacket is constructed\n of a thick layer of polyvinyl chloride (PVC) plastic\n bonded to a tricot knit \u201cscrim\u201d fabric, which is\n composed 65% by weight of polyester and 35% of cotton.\n The jacket features a full front heavy zipper with long\n sleeves and elasticized cuffs. The collar is folded\n down and the bottom of the jacket features an\n elasticized waist. . . . The jackets are designed to\n be worn out of doors, in rainy or inclement weather.\n For example, they might be worn to football games or\n other sporting events (hence the name \u201cstadium\u201d\n jackets).\n\nPl.\u2019s Opp\u2019n at 2\u20133. For plaintiff, these physical\n\ncharacteristics place its jackets in the rainwear class or kind\n\nof garment. \u201c[T]he subject merchandise is used in the same\n\nmanner which defines the rainwear class. Like rubber slickers,\n\nthe subject pleather jackets are intended to be used in the rain\n\nor snow to prevent rain from reaching the wearer.\u201d Pl.\u2019s Opp\u2019n\n\nat 17\u201318.\n\fCourt No. 02-00101 Page 13\n\n Customs disputes plaintiff\u2019s assessment of the subject\n\nmerchandise\u2019s physical characteristics. Specifically, Customs\n\nargues that\n\n common experience has taught us that many outerwear\n garments which are primarily used or intended to be\n used for warmth and/or fashion may also have some\n water-repellant qualities. But those qualities alone\n do not qualify an article of clothing as belonging to\n the class or kind of merchandise known as rainwear.\n Rather, the principal purpose of rainwear is to keep\n the wearer dry in the rain. The primary function of\n [plaintiff\u2019s] PVC jacket is as [a] substitute\n leather . . . varsity jacket, rather than functioning\n primarily as rainwear.\n\nDef.\u2019s Mem. at 1 (emphasis omitted). Customs bases this\n\nassertion on its observation that the jackets at issue \u201cdo not\n\nhave any underarm vents, back vents, or chest vents . . . are\n\n\u2018waist\u2019 length . . . . The outside pockets . . . do not have\n\nflaps, buttons, zippers or velcro fasteners . . . [and] there is\n\nno fabric flap covering the zipper . . . .\u201d9 Def.\u2019s Mem. at 2\u20133.\n\nCustoms maintains that although the jackets may be waterproof or\n\nwater-resistant, the absence of these features prevents the\n\nmerchandise from effectively keeping the wearer dry in the manner\n\nthat would allow their principal use to be as rainwear. That is,\n\nwithout these features, the jackets cannot have as their \u201cuse\n\nthat exceeds all others\u201d the protection of the wearer from the\n\n\n 9\n Plaintiff agrees that the subject merchandise lacks the\nabove mentioned features; however, plaintiff disagrees that the\npresence or absence of those features is determinative of whether\nthe subject merchandise can be properly classified as rainwear.\nSee generally Pl.\u2019s Opp\u2019n at 14\u201318.\n\fCourt No. 02-00101 Page 14\n\nrain.\n\n\n\n Based on the undisputed facts and the court\u2019s own\n\nexamination of plaintiff\u2019s jackets, it is apparent that they lack\n\nthe characteristics of garments whose principal use is as\n\nrainwear. First, the jackets fail to protect the lower half of\n\nthe body from getting wet in the rain.10 Indeed, the jackets are\n\ndesigned with an elasticized waistband over which the jacket\n\nblouses, which, as this court observed when a jacket was worn in\n\nopen court, tends to make the jacket ride up to the waist. As a\n\nresult, the wearer\u2019s buttocks and legs would be subject to the\n\nsoaking effects of rain. See Tr. at 103:22-24. Further, the\n\nscrim tricot fiber material that lines the jackets is intended to\n\nprovide warmth, see Tr. at 28:11\u201313; Tr. at 109:19, an\n\nunnecessary feature of a garment principally designed to keep the\n\nwearer dry in the rain irrespective of the outside temperature.\n\nRather, this feature is typical of a jacket whose purpose is to\n\nprovide warmth whether it is raining or not. See Def.\u2019s Resp. to\n\nPl.\u2019s Facts at 2; Tr. at 108:10\u201313. Here, the subject\n\nmerchandise is constructed of non-breathable PVC material with no\n\nmeans of ventilation. See Tr. at 49:17\u201319. The absence of any\n\n\n\n\n 10\n As the Federal Circuit has noted, \u201cthe merchandise\nitself is often a potent witness in classification cases.\u201d Simod\nAm. Corp. v. United States, 872 F.2d 1572, 1578 (Fed. Cir. 1989).\n\fCourt No. 02-00101 Page 15\n\nventilation, such as grommets or breathable fabric,11 along with\n\nthe scrim tricot lining, will cause the wearer to perspire if the\n\njacket is worn in the rain for any length of time. See Tr. at\n\n108:15\u201316, 20\u201321 (explaining, through testimony of defendant\u2019s\n\nexpert, that some type of ventilation is needed for \u201ccomfort and\n\nwearability\u201d); see also id. at 55:1\u20139, 10\u201313 (admitting, through\n\nthe testimony of plaintiff\u2019s expert, that vents might help to\n\ncarry away perspiration). Thus, the general characteristics of\n\nthe jackets indicate that they are not of the class or kind of\n\nmerchandise whose principal use is as rainwear.\n\n\n\n 2. Expectations of the Ultimate Consumer\n\n The second of the Carborundum Factors, the expectations of\n\nthe ultimate consumer, does little to support plaintiff\u2019s\n\nposition. According to defendant, it is difficult to see how a\n\nconsumer can expect plaintiff\u2019s jackets to be used as rainwear\n\nwhen the \u201cprimary function . . . is as a substitute leather\n\n(\u201cpleather\u201d) varsity jacket . . . .\u201d Def.\u2019s Mem. at 1. Indeed,\n\nplaintiff\u2019s own expert repeatedly referred to the subject\n\nmerchandise as a \u201cstadium jacket,\u201d not as rainwear. See Tr. at\n\n\n\n 11\n The experts for both parties testified that the PVC\nmaterial that constitutes the subject merchandise is not\nbreathable, while at the same time acknowledged that breathable\nfabrics, such as Gortex or Microfiber, are often used to\nconstruct garments that are intended to be worn in the rain. See\nTr. at 48\u201349, 107:15\u201317.\n\fCourt No. 02-00101 Page 16\n\n44:5\u20137. Specifically, plaintiff\u2019s expert stated that the subject\n\nmerchandise was \u201can all-purpose garment that could be used for\n\n[both] rainwear and activewear.\u201d Id. Plaintiff\u2019s expert further\n\nasserted that the type of individual who would purchase the\n\nsubject merchandise is \u201csomeone that wants to be noticed . . . to\n\nbe with their peers and . . . wants to feel part of the whole\n\nsports thing.\u201d Id. at 37:11\u201313. Such evidence leads the court\n\nto conclude that a purchaser would not primarily buy the subject\n\nmerchandise for protection from the rain, but instead would\n\npurchase the jacket for wear in any cool weather conditions.\n\nThus, the expectations of the ultimate purchaser provide support\n\nfor Customs\u2019 classification.\n\n\n\n 3. Channels of Trade\n\n Third among the Carborundum Factors is the channels of trade\n\nin which the merchandise moves. In arguing that their jackets\n\nmove in the same channels of trade as merchandise included in the\n\nclass or kind of rainwear, plaintiff claims that \u201cthe licensing\n\nagreements and sales sheets [for the production and sale of the\n\nmerchandise] show that the merchandise moves in particular sales\n\nenvironments and channels of trade belonging to rainwear and is\n\nrecognized in the trade as rainwear.\u201d Pl.\u2019s Opp\u2019n at 18. An\n\nexamination of these documents, however, reveals that they\n\nprovide, at best, equivocal evidence for plaintiff. While the\n\fCourt No. 02-00101 Page 17\n\nsales sheets (some of which appear to be with a related\n\nmanufacturer) refer to the merchandise as rainwear, the licensing\n\nagreements do not. For instance, the licensing agreement with\n\nNBA Properties, Inc. refers to \u201cAdult sized synthetic leather\n\njackets for mass retail distribution only,\u201d see Letter from NBA\n\nto William Baum of 9/3/1998 at 2, and that of The Collegiate\n\nLicensing Company to \u201cWater Repellant PVC Jacket (Pleather),\u201d see\n\nThe Collegiate Licensing Company Specification Sheet at 1. Thus,\n\nthe documents plaintiff cite as support for its proposed\n\nclassification are of little use for that purpose.\n\n\n\n 4. Environment of Sale\n\n The fourth Carborundum Factor is the environment in which\n\nthe merchandise is sold. Despite plaintiff\u2019s contention in its\n\nbrief that \u201cthe merchandise moves in particular sales\n\nenvironments . . . as rainwear,\u201d Pl.\u2019s Opp\u2019n at 18, nothing\n\nindicates that the subject merchandise was ever specifically\n\npromoted, advertised, or sold as rainwear. To the contrary, as\n\nplaintiff\u2019s expert testified and Customs\u2019 expert agreed, given\n\nthe \u201cmass-market\u201d character of the subject merchandise, the\n\nstores that would ultimately purchase the jackets for retail and\n\nin which the jackets would be sold, i.e., Sears, Wal-Mart, or\n\nTarget, \u201cdon\u2019t . . . have specific departments that say\n\nrainwear . . .,\u201d Tr. at 33:16\u201319 (testimony of plaintiff\u2019s\n\fCourt No. 02-00101 Page 18\n\nexpert), and \u201c[the purchaser] almost ha[s] to do the shopping\n\n[herself] in those kind of stores.\u201d Id. at 47:4\u20135; see also Tr.\n\nat 113:9\u201312, 20\u201325 (concurring testimony of defendant\u2019s expert).\n\nThus, it appears that the environment of sale does not aid\n\nplaintiff.\n\n\n\n 5. Use, Economic Practicality, Recognition in the Trade\n\n The remaining Carborundum Factors, (a) use of the subject\n\nmerchandise in the same manner as merchandise which defines the\n\nclass; (b) the economic practicality of so using the import; and\n\n(c) the recognition in the trade of this use, merit brief\n\nexamination. First, while there was no direct evidence of the\n\njackets being actually used to prevent the wearer from getting\n\nwet, there is no dispute that the jackets are waterproof or\n\nwater-resistant. Thus, nothing would preclude the jackets from\n\nhaving some utility as protection if worn in the rain. That is,\n\nwhile they may not afford the more complete protection of other\n\ngarments, the court finds that one of the uses of the jackets\n\ncould be to provide the wearer some protection from the rain.\n\nNext, while there was no direct evidence of the economic\n\npracticality of using the jackets as rainwear, at an imported\n\nprice of under $10 per jacket, there would appear to be little\n\neconomic impediment to the jackets being purchased by many\n\nconsumers. Finally, there is no evidence on the record\n\fCourt No. 02-00101 Page 19\n\nindicating that the jackets would be recognized in the trade as\n\nrainwear. Both experts consistently referred to the jackets as\n\nsomething other, i.e., \u201cstadium jackets,\u201d Tr. at 118:5\u201315,\n\n\u201cvarsity jackets,\u201d id., and \u201couterwear jackets,\u201d id. at 45:12\u201313,\n\n115:13\u201314. Indeed, plaintiff\u2019s expert stated that the jackets\n\nwould not be found in a \u201crainwear\u201d section because the stores\n\nsimply \u201c[do not] really have specific departments that say\n\nrainwear anymore.\u201d Tr. at 33:23\u201324. Thus, to the extent that\n\nevidence is on the record, it does not support a finding that the\n\njackets are recognized in the trade as rainwear.\n\n\n\n Having applied the Carborundum Factors to the subject\n\nmerchandise, it is apparent they do not indicate that the\n\njackets\u2019 \u201cuse which exceeds any other single use\u201d is to keep the\n\nwearer dry. Thus, the jackets are not principally rainwear.\n\nChief among the reasons for this conclusion is that the general\n\nphysical characteristics of the jackets are not in accord with\n\ntheir principal use being rainwear. In addition, the remainder\n\nof the Carborundum Factors would not compel a different\n\nconclusion. As a result, the court rejects plaintiff\u2019s proposed\n\nclassification. This being the case, the court finds that the\n\ndefendant has demonstrated that the proper classification12 of\n\n\n 12\n In a classification case, this court is \u201crequired to\ndecide the correctness not only of the importer\u2019s proposed\n (continued...)\n\fCourt No. 02-00101 Page 20\n\nthe merchandise is the basket provision under HTSUS subheading\n\n3926.20.90, \u201cOther articles of plastics and articles of other\n\nmaterials of headings 3901 to 3914: . . . Articles of apparel and\n\nclothing accessories (including gloves, mittens and mitts): . . .\n\nOther . . . .\u201d\n\n\n\n CONCLUSION\n\n Therefore, the court denies plaintiff\u2019s motion for summary\n\njudgment, grants the Government\u2019s cross-motion for summary\n\njudgment, and dismisses this case. Judgment shall be entered\n\naccordingly.\n\n\n\n /s/ Richard K. Eaton\n Richard K. Eaton\n\n\nDated: January 3, 2006\n New York, New York\n\n\n\n\n 12\n (...continued)\nclassification but of the government\u2019s classification as well.\u201d\nJarvis Clark Co. v. United States, 733 F.2d 873, 874 (Fed. Cir.\n1984). Indeed, this court \u201cmust consider whether the\ngovernment\u2019s classification is correct, both independently and in\ncomparison with the importer\u2019s alternative.\u201d Id. at 878.\n\f"} -{"text": " Case: 12-31064 Document: 00512558652 Page: 1 Date Filed: 03/12/2014\n\n\n\n\n IN THE UNITED STATES COURT OF APPEALS\n FOR THE FIFTH CIRCUIT\n United States Court of Appeals\n Fifth Circuit\n\n FILED\n No. 12-31064 March 12, 2014\n\n Lyle W. Cayce\n Clerk\nDANNY KELLY,\n\n Plaintiff\u2013Appellant\nv.\n\nSTATE FARM FIRE & CASUALTY COMPANY,\n\n Defendant\u2013Appellee\n\n\n Appeal from the United States District Court\n for the Middle District of Louisiana\n USDC No. 3:09-CV-619\n\n\n\nBefore HIGGINBOTHAM, CLEMENT, and PRADO, Circuit Judges.\nPER CURIAM:*\n Plaintiff\u2013Appellant Danny Kelly (\u201cKelly\u201d) sued State Farm Fire &\nCasualty Company (\u201cState Farm\u201d or \u201cinsurer\u201d) on behalf of Henry Thomas\n(\u201cThomas\u201d), one of State Farm\u2019s insured customers. Kelly asserted two bad-faith\nclaims arising out of a car accident that occurred on November 21, 2005. Kelly\nalleged that State Farm failed to notify Thomas of a settlement offer and failed\nto settle Kelly\u2019s claim against Thomas. The district court granted summary\n\n\n\n *\n Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not\nbe published and is not precedent except under the limited circumstances set forth in 5TH CIR.\nR. 47.5.4.\n\f Case: 12-31064 Document: 00512558652 Page: 2 Date Filed: 03/12/2014\n\n\n\n No. 12-31064\n\njudgment in State Farm\u2019s favor on both counts. For the reasons that follow, we\naffirm in part, reverse in part, and remand for further proceedings.\n I\n On November 21, 2005, a car accident occurred involving Thomas and\nKelly. Thomas and Kelly were driving opposite directions when Thomas\ninitiated a left turn. Thomas hit Kelly while making the left turn. Kelly and a\nwitness at the scene told police that Thomas failed to yield to oncoming traffic.\nThomas maintained that he was not negligent. Kelly was taken to a hospital by\nambulance and was treated for a fractured femur. His hospital stay lasted\napproximately six days and cost $26,803.17.\n On January 6, 2006, Kelly\u2019s attorney mailed a letter to Thomas\u2019s insurer,\nState Farm, regarding Kelly\u2019s claim. The letter included copies of Kelly\u2019s\nhospital records and stated:\n Please find enclosed a copy of Danny Kelly\u2019s Medical\n Summary with attached medical records/reports and bills\n concerning his hospital treatment for the above referenced incident\n involving your insured. I will recommend release of State Farm\n Insurance Company and your insured, Henry Thomas, Jr., for\n payment of your policy limits.\n\n Please give me a call in the next ten (10) days to discuss this\n matter.\nThe parties dispute, however, when this letter was received. According to Kelly\u2019s\ncertified-mail receipt, the letter was accepted by \u201cG. Johnson\u201d on January 9,\n2006. State Farm maintains that the letter was not received until February 14,\n2006. A State Farm activity log indicates that State Farm received a demand\nfor \u201cpolicy limits $25,000.00\u201d on February 11, 2006.1 It does not appear that\nState Farm ever responded to the letter.\n\n\n 1\n The activity log technically shows \u201cDEMAND REC\u2019D: 2/11/05.\u201d However, since the\naccident did not occur until November 2005, this is likely a typo.\n\n 2\n\f Case: 12-31064 Document: 00512558652 Page: 3 Date Filed: 03/12/2014\n\n\n\n No. 12-31064\n\n Kelly\u2019s attorney spoke with State Farm representatives on March 8 and\nMarch 22. During the March 22, 2006 conversation, the representative offered\nto settle the case for $25,000, the policy limit. The offer was memorialized in a\nletter dated March 23, 2006. Kelly\u2019s attorney rejected the offer and proceeded\nto file suit. On the day that Kelly rejected State Farm\u2019s settlement offer, State\nFarm mailed a letter to Thomas informing him of the possibility of personal\nliability and suggesting that he consider retaining independent counsel. State\nFarm\u2019s letter to Thomas did not discuss the letter from Kelly\u2019s attorney, State\nFarm\u2019s offer to Kelly, or the extent of Kelly\u2019s medical bills.\n At trial, Thomas was found liable for the accident and judgment was\nrendered against him for $176,464.07, plus interest. State Farm promptly paid\nKelly the policy limit. Under the terms of his policy, Thomas was liable for the\nremainder of the judgment. However, Thomas entered into a compromise\nagreement with Kelly. Thomas assigned Kelly his right to pursue a bad faith\naction against State Farm in exchange for Kelly\u2019s promise not to enforce the\njudgment against Thomas\u2019s personal assets.\n Kelly filed suit against State Farm soon thereafter, alleging two counts of\nbad faith under Louisiana law. Kelly alleged that State Farm acted in bad faith\nwhen it (1) failed to notify Thomas of Kelly\u2019s January 2006 letter; and (2) failed\nto accept Kelly\u2019s January 2006 settlement offer. State Farm removed the case\nto federal court and filed a motion for summary judgment. On November 8,\n2011, the district court partially granted State Farm\u2019s motion. The district court\ngranted summary judgment in State Farm\u2019s favor on Kelly\u2019s first argument,\nholding that the January 2006 letter did not constitute a settlement offer and\nthat State Farm did not have a duty to notify Thomas when the letter was\nreceived. The district court denied summary judgment on the second point,\nhowever, stating that Kelly might be able to prove that State Farm\u2019s failure to\nsettle the claim constituted bad faith.\n\n 3\n\f Case: 12-31064 Document: 00512558652 Page: 4 Date Filed: 03/12/2014\n\n\n\n No. 12-31064\n\n State Farm moved for reconsideration on November 23, 2011, arguing that\nState Farm could be liable for bad faith failure to settle only if it failed to accept\nan actual offer and acted in bad faith. According to State Farm\u2019s contention, the\ndistrict court\u2019s finding that the January 2006 letter did not constitute an offer\nnecessarily precluded liability on Kelly\u2019s second claim. The district court agreed\nand revised its opinion to grant full summary judgment in State Farm\u2019s favor.\nJudgment was entered accordingly, and Kelly appealed.\n II\n We review the district court\u2019s grant of summary judgment de novo. McFaul\nv. Valenzuela, 684 F.3d 564, 571 (5th Cir. 2012). Summary judgment is\nappropriate when there is no genuine issue of material fact and the moving\nparty has shown it is entitled to judgment as a matter of law. Id. A dispute is\n\u201cgenuine\u201d if the evidence is sufficient for a reasonable jury to return a verdict for\nthe nonmoving party. Hamilton v. Segue Software, Inc., 232 F.3d 473, 477 (5th\nCir. 2000). A fact issue is \u201cmaterial\u201d if its resolution could affect the outcome of\nthe action. Id. We construe all facts and all reasonable inferences in the light\nmost favorable to the non-moving party. McFaul, 684 F.3d at 571.\n When evaluating issues of state law, federal courts \u201clook to the final\ndecisions of that state\u2019s highest court.\u201d Chaney v. Dreyfus Serv. Corp., 595 F.3d\n219, 229 (5th Cir. 2010). \u201cIn the absence of such a decision, \u2018[federal courts]\nmust make an Erie guess and determine, in [their] best judgment, how [the\nsupreme court of that state] would resolve the issue if presented with the same\ncase.\u2019\u201d Six Flags, Inc. v. Westchester Surplus Lines Ins. Co., 565 F.3d 948, 954\n(5th Cir. 2009) (quoting In re Katrina Canal Breaches Litig., 495 F.3d 191, 206\n(5th Cir. 2007)). \u201cIn making an Erie guess, [federal courts] defer to intermediate\nstate appellate court decisions, unless convinced by other persuasive data that\nthe highest court of the state would decide otherwise.\u201d Mem\u2019l Hermann\n\n\n\n 4\n\f Case: 12-31064 Document: 00512558652 Page: 5 Date Filed: 03/12/2014\n\n\n\n No. 12-31064\n\nHealthcare Sys. Inc. v. Eurocopter Deutschland GMBH, 524 F.3d 676, 678 (5th\nCir. 2008) (internal quotation marks omitted).\n III\n The parties\u2019 briefs and the district court\u2019s orders at times seem to conflate\nthe various causes of action and concomitant legal standards relevant to this\nlawsuit. This conflation stems in large part from confusion over Kelly\u2019s position\nas a party in this case. Kelly\u2019s lawsuit is premised on the assignment of rights\nhe received in his settlement agreement with Thomas. In the settlement\nagreement, Thomas assigned to Kelly his right to pursue bad faith claims\nagainst State Farm in exchange for Kelly\u2019s promise not to pursue Thomas\u2019s\npersonal assets in satisfaction of the judgment. When rights are assigned by\ncontract, the assignee\u2014here, Kelly\u2014stands in the shoes of the assignor\u2014here,\nThomas.2 See N.S.Q. Assocs. v. Beychok, 94-2760, p. 9 (La. 9/5/95), 659 So.2d\n729, 734 (noting \u201cthe general concept that an assignee usually stands in the\nshoes of his or her assignor\u201d). Thus, whereas Kelly was a third-party claimant\nvis-\u00e0-vis State Farm in the parties\u2019 earlier lawsuit\u2014as well as during all pre-suit\ninteractions\u2014he stands in Thomas\u2019s shoes as the insured in his capacity as\nplaintiff here. Therefore, any cause of action Kelly claims here must be available\nto the insured. Kelly is not asserting a third-party claimant\u2019s claims. In fact, he\nspecifically disclaims any third-party claims in his brief. With this in mind,\nthere appear to be two possible bases for Kelly\u2019s bad-faith claims against State\nFarm: Louisiana Revised Statutes \u00a7 22:1892 and \u00a7 22:1973. We review each in\nturn.\n\n\n\n\n 2\n The Louisiana Supreme Court has affirmed that individuals may assign their contract\nrights in the insurance context. See In re Katrina Canal Breaches Litig., 2010-1823, p. 11 (La.\n5/10/11), 63 So. 3d 955, 962 (stating that, in the insurance context, \u201cthe Louisiana legislature\nhas clearly indicated an intent to allow parties freedom to assign contractual rights\u201d).\n\n 5\n\f Case: 12-31064 Document: 00512558652 Page: 6 Date Filed: 03/12/2014\n\n\n\n No. 12-31064\n\n A\n Section 22:1892 establishes rules governing the relationship between\ninsurers, their insured, and third-party claimants in a variety of circumstances.\nLa. Rev. Stat. \u00a7 22:1892. For purposes of this suit, two provisions are potentially\nrelevant: \u00a7\u00a7 22:1892(A)(1) and (2). Subsection (A)(1) states that all insurers\n\u201cshall pay the amount of any claim due any insured within thirty days after\nreceipt of satisfactory proofs of loss from the insured or any party in interest.\u201d\nId. \u00a7 22:1892(A)(1) (emphasis added). Section (A)(2) states that insurers \u201cshall\npay . . . any reasonable medical expenses claim due any bona fide third party\nclaimant within thirty days after written agreement of settlement of the claim\nfrom any third party claimant.\u201d Id. \u00a7 22:1892(A)(2) (emphasis added).3 As\nexplained below, Kelly does not have a claim under either provision of \u00a7 22:1892\nbecause the facts of this case do not fall within the statutory language.\n Subsection (A)(1) contemplates a cause of action only when the insurer\nfails to pay a claim based on a satisfactory proof of loss received from the\ninsured. Id. \u00a7 22:1892(A)(1). While Kelly stands in Thomas\u2019s shoes as the\ninsured for purposes of this suit, Kelly\u2019s allegations focus on State Farm\u2019s failure\nto pay a claim based on a proof of loss submitted by Kelly as a third-party\nclaimant. Specifically, Kelly argues State Farm failed to settle his third-party\nclaim after he submitted a purported settlement letter and medical receipts in\nJanuary 2006. These documents do not fall within the statute\u2019s language. The\nassignment between Kelly and Thomas provided Kelly with the ability to make\nThomas\u2019s bad-faith claims on his behalf; the assignment does not allow Kelly to\nshoehorn his third-party claims into \u00a7 22:1892(A)(1). Kelly has not alleged that\nThomas submitted a proof of loss to State Farm or that State Farm failed to pay\nThomas based on a proof of loss. Because Kelly\u2019s purported settlement letter\n\n\n 3\n The parties do not dispute that the thirty-day period was not met here.\n\n 6\n\f Case: 12-31064 Document: 00512558652 Page: 7 Date Filed: 03/12/2014\n\n\n\n No. 12-31064\n\nand medical receipts did not constitute \u201ca satisfactory proof of loss from the\ninsured,\u201d Kelly cannot maintain a claim under \u00a7 22:1892(A)(1) as a matter of\nlaw. Id. Therefore, summary judgment is appropriate. Fed. R. Civ. P. 56(a).\n Kelly cannot maintain a claim under subjection (A)(2) either, for two\nreasons. First, Kelly has expressly disavowed any third-party claims in this suit,\nand subsection (A)(2) only pertains to such claims. See La. Rev. Stat.\n\u00a7 22:1892(A)(2). Second, subsection (A)(2) only mandates payment by an\ninsurer when the insurer and third-party claimant have produced a written\nsettlement agreement. Id. Since neither party suggests that a settlement was\nreached between State Farm and Kelly, Kelly cannot maintain a cause of action\nunder subsection (A)(2). State Farm is thus entitled to judgment as a matter of\nlaw. Therefore, summary judgment is appropriate. Fed. R. Civ. P. 56(a).\n B\n Section 22:1973 contains two relevant subsections: subsection (A) describes\nbroad duties that insurers owe to their insured and subsection (B) lists acts\nwhich constitute a breach of insurers\u2019 duties when knowingly committed.\nSubsection (A) states that insurers owe their insured \u201ca duty of good faith and\nfair dealing\u201d and an \u201caffirmative duty . . . to make a reasonable effort to settle\nclaims.\u201d La. Rev. Stat. \u00a7 22:1973(A).4 Two parts of subsection (B) are relevant\n\n 4\n The parties debate how the Fifth Circuit\u2019s opinions in Commercial Union Insurance\nCo. v. Mission Insurance Co., 835 F.2d 587 (5th Cir. 1988), and Brown v. Liberty Mutual Fire\nInsurance Co., 168 F. App\u2019x 558 (5th Cir. 2006), impact this case. In Commercial Union, the\ncourt held that \u201cLouisiana law only imposes liability for an excess judgment against a primary\ninsurer if that insurer failed to accept an actual offer to settle within its policy limits and such\nfailure was negligent, arbitrary and/or in bad faith.\u201d 835 F.3d at 588. The court reached this\nconclusion while acknowledging that \u201cLouisiana courts have not explicitly articulated the\nrequirement . . . that a firm settlement offer be on the table before an insurer can be held\nliable for its arbitrary refusal to settle.\u201d Id. at 588 n.2. In Brown, an unpublished decision,\nthe court rejected the bad-faith claim at issue in part because a letter sent by the plaintiff did\nnot constitute an actual offer. 168 F. App\u2019x at 563.\n While the precise scope of a bad-faith failure-to-settle claim probably deserves attention\nfrom the Louisiana Supreme Court, we are nevertheless bound by prior precedent holding that\nan actual offer is required in order to maintain such a claim. See French v. Allstate Indem.\n\n 7\n\f Case: 12-31064 Document: 00512558652 Page: 8 Date Filed: 03/12/2014\n\n\n\n No. 12-31064\n\nhere: (B)(1), which forbids \u201cmisrepresenting pertinent facts . . . relating to any\ncoverages at issue[;]\u201d and (B)(5), which states that an insurer violates its duty\nif it \u201c[f]ail[s] to pay the amount of any claim due any person insured by the\ncontract within sixty days after receipt of satisfactory proof of loss from the\nclaimant when such failure is arbitrary, capricious, or without probable cause.\u201d\nId. \u00a7\u00a7 22:1973(B)(1), (B)(5).\n While subsection (A) states the duties of insurers in broad, precatory\nterms, the Louisiana Supreme Court has held that the list of conduct in\nsubsection (B) constitutes the exclusive list of conduct that provides a cause of\naction under \u00a7 22:1973. Theriot v. Midland Risk Ins. Co., 95-2895, p. 15\u201316 (La.\n5/20/97), 694 So. 2d 184, 193. The Louisiana Supreme Court considered the\nscope of \u00a7 22:1973 in the context of third-party claims, but intermediate\nLouisiana courts have nevertheless interpreted Theriot as holding that\nsubsection (B) provides an exhaustive list of possible causes of action for the\ninsured under \u00a7 22:1973. See, e.g., Arvie v. Safeway Ins. Co. of La., 2006-1266,\np. 2 (La. App. 3 Cir. 2/7/07), 951 So. 2d 1284, 1285; McGee v. Omni Ins. Co.,\n2002-1012, p. 7\u20138, 10\u201311 (La. App. 3 Cir. 3/5/03), 840 So. 2d 1248, 1254, 1256.\n 1\n A violation of (B)(1) \u201ccan occur when an insurer either makes untrue\nstatements to an insured concerning pertinent facts or fails to divulge pertinent\n\n\nCo., 637 F.3d 571, 589 (5th Cir. 2011) (affirming binding effect of prior Fifth Circuit precedent\non a state-law issue absent a clear change in law). Since the January 2006 letter from Kelly\u2019s\nattorney only stated that Kelly\u2019s attorney would \u201crecommend\u201d a release in exchange for\npayment of the policy\u2019s limit, the letter did not constitute an offer. See McPherson v. Cingular\nWireless, LLC, 2007-0462, p. 5\u20137 (La. App. 3 Cir. 10/3/07), 967 So. 2d 573, 577\u201378 (holding that\n\u201cnoncommittal\u201d language in an employee handbook did not modify the parties\u2019 contract of\nemployment); Restatement (Second) of Contracts \u00a7 26 (1981) (\u201cA manifestation of willingness\nto enter into a bargain is not an offer if the person to whom it is addressed knows or has\nreason to know that the person making it does not intend to conclude a bargain until he has\nmade a further manifestation of assent.\u201d). Therefore, Kelly cannot maintain a cause of action\nas a matter of law, and State Farm was entitled to summary judgment on Kelly\u2019s bad-faith\nfailure-to-settle claim.\n\n 8\n\f Case: 12-31064 Document: 00512558652 Page: 9 Date Filed: 03/12/2014\n\n\n\n No. 12-31064\nfacts to the insured.\u201d McGee, 840 So. 2d at 1256. Some intermediate appellate\ncourts have held that (B)(1) is only violated when an insurer misrepresents facts\nabout coverage, not facts concerning liability. See, e.g., Talton v. USAA Cas. Ins.\nCo., 2006-1513, 2007-1414, p. 20 (La. App. 4 Cir. 3/19/08), 981 So. 2d 696, 710;\nStrong v. Farm Bureau Ins. Co., 32,414, p. 5 (La. App. 2 Cir. 10/29/99), 743 So.\n2d 949, 953. \u201cA misrepresentation relating to a coverage issue would involve\nfacts about the policy itself, such as the amount of coverage, lapse or expiration\nof the policy, or exclusions from coverage.\u201d Strong, 743 So. 2d at 953. An insurer\nalso has \u201can independent duty to keep its insured informed of the status of\nsettlement negotiations[.]\u201d Teague v. St. Paul Fire & Marine Ins. Co.,\n2006-1266, p. 62 (La. App. 1 Cir. 4/7/09), 10 So. 3d 806, 845. This includes a duty\nto inform the insured about offers to settle that are made and received, offering\ninput on the settlement decision, and generally keeping the insured apprised of\nthose facts necessary for the insured to make a decision that is in their own\npersonal interest. Arvie, 951 So. 2d at 1285; McGee, 840 So. 2d at 1254, 1256;\nLafauci v. Jenkins, 2001-2960 (La. App. 1 Cir. 1/15/03), 844 So. 2d 19, 27-29. As\nexplained below, it is not clear that State Farm is entitled to judgment as a\nmatter of law on Kelly\u2019s (B)(1) claim. As such, we reverse the district court\u2019s\ngrant of summary judgment.\n In McGee, an insurer was found to have violated (B)(1) when it\n\u201cconsistently failed to communicate the status of the claim to [the insured] on a\nregular basis\u201d and, when it did communicate with the insured, it \u201cfailed to\ncommunicate the pertinent facts necessary for [the insured] to consider in\ndetermining what was in her personal interest.\u201d McGee, 840 So. 2d at 1256. The\ninsurer in Arvie committed similar bad faith conduct and also \u201cfailed to offer [its\ninsured] input into the settlement decision.\u201d Arvie, 951 So. 2d at 1286. The only\ncommunication between State Farm and Thomas alleged here consisted of a\nsingle letter in which State Farm told Thomas that he might face personal\n\n 9\n\f Case: 12-31064 Document: 00512558652 Page: 10 Date Filed: 03/12/2014\n\n\n\n No. 12-31064\nliability and that he should consider seeking independent counsel. At no point\ndid State Farm inform Thomas the extent to which Kelly\u2019s medical bills exceeded\nhis policy limits, nor did State Farm tell Thomas that it had made a settlement\noffer that was rejected by Kelly. In short, State Farm sent a single, cursory\ncommunication to Thomas, and it cannot be said as a matter of law that this\nletter communicated the pertinent facts necessary for Thomas to determine what\nwas in his best interest. Therefore, State Farm was not entitled to judgment as\na matter of law on Kelly\u2019s claim under \u00a7 22:1973(B)(1). Fed. R. Civ. P. 56(a).\n 2\n Under \u00a7 22:1973(B)(5), it is the plaintiff\u2019s burden to show that the insured\nsubmitted a satisfactory proof of loss, which is one that is sufficient to fully\napprise the insurer of the insured\u2019s claim. Reed v. State Farm Mut. Auto. Ins.\nCo., 2003-0107, p. 13 (La. 10/21/03), 857 So. 2d 1012, 1020 (stating that the \u201cone\nwho claims entitlement\u201d has the \u201cburden of proving\u201d receipt of a satisfactory\nproof of loss); see also McDill v. Utica Mut. Ins. Co., 475 So. 2d 1085, 1089 (La.\n1985) (defining \u201csatisfactory proof of loss\u201d). Moreover, \u00a7 22:1973(B)(5) does not\nprovide a cause of action based on third-party proofs of loss. Langsford v.\nFlattman, 2003-0189, pp. 3\u20134 (La. 1/21/04), 864 So. 2d 149, 151.\n Kelly\u2019s claim under \u00a7 22:1973 fails for the same reason that his claim\nunder \u00a7 22:1892(A)(1) failed, see supra Part III.A: Kelly has not alleged that\nThomas submitted a proof of loss to State Farm that went unpaid. Rather, the\npremise of Kelly\u2019s case is his allegation that State Farm failed to act when his\nattorney sent State Farm a third-party demand letter. As discussed earlier,\nassuming arguendo that Kelly\u2019s letter constituted a satisfactory proof of loss at\nall, the letter was a proof of loss from a third-party claimant. The assignment\nbetween Kelly and Thomas does not allow Kelly to shoehorn otherwise ineligible\nclaims into Louisiana\u2019s insurance statutes. Section 22:1973 does not provide a\n\n\n\n 10\n\f Case: 12-31064 Document: 00512558652 Page: 11 Date Filed: 03/12/2014\n\n\n\n No. 12-31064\ncause of action when an insurer fails to pay a third party\u2019s claim based on a proof\nof loss. Therefore, summary judgment is appropriate. Fed. R. Civ. P. 56(a).\n IV\n For the foregoing reasons, we AFFIRM IN PART and REVERSE IN PART\nthe district court\u2019s grant of summary judgment. We REMAND to the district\ncourt for further proceedings consistent with this opinion.\n\n\n\n\n 11\n\f"} -{"text": "\nCHERA B. NORTON, Plaintiff,\nv.\nHENRY CLIFTON GOODS, Defendant.\nNo. COA08-963\nCourt of Appeals of North Carolina\nFiled April 7, 2009\nThis case not for publication\nR. Lee Farmer, for plaintiff-appellant.\nHaywood, Denny & Miller, L.L.P., by Robert E. Levin, for defendant-appellee.\nMARTIN, Chief Judge.\nPlaintiff appeals from orders dismissing her complaint on the grounds that it was filed after the expiration of the statute of limitations. We affirm.\nThe factual and procedural history of this case is undisputed and may be summarized as follows: On 18 September 2003, Chera Norton (\"plaintiff\") and Henry Goods (\"defendant\") were involved in an automobile accident. On 18 September 2006, plaintiff filed a North Carolina AOC Form CV-101, \"Application and Order Extending Time to File Complaint,\" with the Caswell County Clerk of Court. Form CV-101 states in pertinent part that \"[t]he undersigned requests permission to file a complaint in this action withintwenty (20) days of any order granting this Application, as provided in Rule 3 of the Rules of Civil Procedure.\" The form has an area for the plaintiff to describe the nature and purpose of the action, and a space for the clerk to indicate the date by which the plaintiff must file a complaint. Below this space printed in italics is the following: \"(Date must be within 20 days of date of Order.)\" Plaintiff's attorney signed this form and marked the box labeled \"Attorney For Applicant.\" Contrary to the directives on the form, however, the clerk entered 19 October 2006 as the extended date for the filing of plaintiff's complaint.\nPlaintiff filed a complaint on 18 October 2006 in Caswell County, Case File No. 06 CVD 51, seeking to recover damages for injuries allegedly sustained in the collision. Defendant filed an answer on 5 January 2007, and moved to dismiss the complaint on the grounds that the statute of limitations had expired before the complaint was filed. On 25 April 2007, plaintiff voluntarily dismissed her complaint. She refiled the claim about four months later on 31 August 2007 in Caswell County, File No. 07 CVD 405. Defendant answered on 19 October 2007, and again moved to dismiss on the grounds the statute of limitations had expired. The trial court granted defendant's motion, dismissing plaintiff's claim in an order filed 15 May 2008 and in a \"Supplemental Order\" filed 6 June 2008. Plaintiff appeals from these orders.\n\nStandard of Review\n\"Ordinarily, a dismissal predicated upon the statute of limitations is a mixed question of law and fact. But where the relevant facts are not in dispute, all that remains is the question of [the statute of] limitations which is a matter of law.\" Udzinski v. Lovin, 159 N.C. App. 272, 273, 583 S.E.2d 648, 649 (2003) (citing Poultry Co. v. Oil Co., 272 N.C. 16, 21, 157 S.E.2d 693, 697 (1967); Yancey v. Watkins, 17 N.C. App. 515, 519, 195 S.E.2d 89, 92, cert. denied, 283 N.C. 394, 196 S.E.2d 277 (1973)), aff'd, 358 N.C. 534, 597 S.E.2d 703 (2004). Once the statue of limitations has been pled, the burden is on the plaintiff to show that his cause of action accrued within the limitations period. See Crawford v. Boyette, 121 N.C. App. 67, 70, 464 S.E.2d 301, 303 (1995) (citing Hooper v. Lumber Co., 215 N.C. 308, 311, 1 S.E.2d 818, 820 (1939)). Where the relevant facts are undisputed, we review a trial court's decision to dismiss an action based on the statute of limitations de novo. See Udzinski, 159 N.C. App. at 273, 583 S.E.2d at 649. In this case, the parties agree on the pertinent facts, leaving only a question of law for our determination.\nThe issue before this Court is whether the statute of limitations expired before plaintiff commenced her action. For the reasons stated below, we conclude that plaintiff's action is barred by the statute of limitations and we affirm the trial court's dismissal.\nPlaintiff's claim was for damages for personal injuries arising from an automobile accident. The statute of limitations for an action for recovery for personal injuries suffered in a motor vehicle accident is three years. N.C. Gen. Stat. \u00a7 1-52(16) (2007). The date of the automobile accident giving rise to plaintiff's claim was alleged to have been 18 September 2003. The parties agree that on 18 September 2006, the day that the statute of limitations would otherwise have expired, plaintiff sought an extension of time to file her complaint pursuant to N.C.G.S. \u00a7 1A-1, Rule 3.\nUnder the Rules of Civil Procedure, an action may be commenced by the filing of a complaint or, under certain circumstances, by the issuance of a summons. N.C. Gen. Stat. \u00a7 1A-1, Rule 3 (2005). Rule 3 allows a plaintiff to request that the clerk commence the action by issuance of a summons and provides in relevant part:\n(a) A civil action is commenced by filing a complaint with the court. The clerk shall enter the date of filing on the original complaint, and such entry shall be prima facie evidence of the date of filing.\nA civil action may also be commenced by the issuance of a summons when\n(1) A person makes application to the court stating the nature and purpose of his action and requesting permission to file his complaint within 20 days and\n(2) The court makes an order stating the nature and purpose of the action and granting the requested permission.\n\nThe summons and the court's order shall be served in accordance with the provisions of Rule 4. When the complaint is filed it shall be served in accordance with the provisions of Rule 4 or by registered mail if the plaintiff so elects. If the complaint is not filed within the period specified in the clerk's order, the action shall abate.\nId. \u00a7 1A-1, Rule 3(a) (emphasis added). Where the language of a statute is clear and unambiguous, there is no room for judicial construction and the courts must construe the statute using its plain meaning. See Burgess v. Your House of Raleigh, Inc., 326 N.C. 205, 209, 388 S.E.2d 134, 136 (1990) (citing Utils. Comm. v. Edmisten, 291 N.C. 451, 232 S.E.2d 184 (1977)). Here, the statutory language of Rule 3(a) is clear and provides that a civil action may be commenced by the issuance of a summons only when the \"court makes an order stating the nature and purpose of the action and granting the requested permission,\" referring to plaintiff's request for \"permission to file his complaint within 20 days.\" See N.C. Gen. Stat. \u00a7 1A-1, Rule 3(a). In North Carolina, the clerk of Superior Court has \"very limited jurisdiction, having only such jurisdiction as is given by statute.\" Beaufort Co. v. Bishop, 216 N.C. 211, 214, 4 S.E.2d 525, 526 (1939). Clearly, Rule 3 only gives the clerk jurisdiction to grant a party's request for permission to file his complaint within twenty days.\nHere, the trial court found plaintiff had complied with the provisions of Rule 3(a) by applying for permission to file her complaint within twenty days, and that the clerk had entered an order granting her until 19 October 2006 to file her complaint, thus extending the period beyond that authorized by the statute. The complaint was filed on 18 October 2006, more than twenty days after the entry of the clerk's order, and more than three years after the accident occurred. Based upon these findings, the trial court correctly concluded, inter alia: 2. The Caswell County Clerk of Superior Court either through mistake or inadvertence extending [sic] the time for filing the Complaint for 30 days.\n3. The Clerk was without authority to extend the time for filing the Complaint beyond the 20 days provided for in Rule 3.\n4. That statute of limitations in this case therefore expired on October 8, 2006.\n. . . .\n8. Neither the Court nor the Clerk has the authority or discretion to extend the time for filing of a Complaint beyond the three year statute of limitations and the twenty day extension authorized by Rule 3.\nThese conclusions of law comport with our holding in Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870 (1970). In that case, the clerk erroneously granted the appellant an extension of twenty-one days in violation of N.C.G.S. \u00a7 1-121, which provided for a maximum extension of twenty days and was in effect until superceded by Rule 3. We affirmed the trial court's ruling that \"the clerk was without authority to grant an extension for more than [twenty] days and his order for an extension of [twenty-one] days was of no effect.\" Id. (citing Deanes v. Clark, 261 N.C. 467, 135 S.E.2d 6 (1964)). Furthermore, we noted that \"the statute of limitations operates to vest a defendant with the right to rely on the statute of limitations as a defense.\" Id. (citing Wilkes Cty. v. Forester, 204 N.C. 163, 167 S.E. 691 (1933)). \"It is clear that a judge may not, in his discretion, interfere with the vested rights of a party where pleadings are concerned.\" Id. (citingState Highway Comm'n v. Hemphill, 269 N.C. 535, 153 S.E.2d 22 (1967)).\nWe conclude that the trial court correctly granted defendant's motion to dismiss.\nAffirmed.\nJudges BRYANT and BEASLEY concur.\nReport per Rule 30(e).\n"} -{"text": " IN THE NEBRASKA COURT OF APPEALS\n\n MEMORANDUM OPINION AND JUDGMENT ON APPEAL\n (Memorandum Web Opinion)\n\n STATE V. EATON\n\n\n NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION\n AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. \u00a7 2-102(E).\n\n\n STATE OF NEBRASKA, APPELLEE,\n V.\n\n MONTY R. EATON, APPELLANT.\n\n\n Filed August 11, 2020. No. A-19-796.\n\n\n Appeal from the District Court for Nemaha County: JULIE D. SMITH, Judge. Affirmed.\n Stuart J. Dornan and Jason E. Troia, of Dornan, Troia, Howard, Breitkreutz & Conway,\nP.C., L.L.O., for appellant.\n Douglas J. Peterson, Attorney General, and Kimberly A. Klein for appellee.\n\n\n MOORE, Chief Judge, and BISHOP and WELCH, Judges.\n WELCH, Judge.\n INTRODUCTION\n Monty R. Eaton was convicted by a jury of manslaughter and operating a motor vehicle\nwhile under the influence with underage passengers. Eaton argues there was insufficient evidence\nto support his convictions, the sentences imposed were excessive, and his trial counsel was\nineffective. We affirm his convictions and sentences.\n STATEMENT OF FACTS\n On February 3, 2018, at approximately 8 p.m., three vehicles were traveling northbound\non a highway in Nemaha County, Nebraska. The first vehicle was driven by Eaton who was with\nhis family, including two children under the age of 16 years. The second vehicle was driven by\nMarilyn Schneider. The third vehicle was driven by Heather Spurlin. Schneider estimated that\nEaton\u2019s vehicle was traveling at 20 miles per hour which was much slower than the speed limit.\n\n\n\n -1-\n\fUnaware she was in a no passing zone, Spurlin attempted to pass both vehicles. As Spurlin\u2019s\nvehicle was next to Eaton\u2019s vehicle, Eaton turned on his left turn signal and immediately turned\nleft colliding with Spurlin\u2019s vehicle. The collision caused Spurlin\u2019s passengers, who were not\nwearing seatbelts, to be ejected from her vehicle, resulting in the death of one passenger.\n Eaton was charged with one count of manslaughter, a Class IIA felony. In connection\ntherewith, the amended information alleged Eaton unintentionally caused the death of an\nindividual while in the commission of one or more of the following unlawful acts: (1) driving his\nvehicle carelessly or without due caution so as to endanger a person or property in violation of\nNeb. Rev. Stat. \u00a7 60-6,212 (Reissue 2010); (2) driving his vehicle in a manner indicating an\nindifferent or wanton disregard for the safety of persons or property in violation of Neb. Rev. Stat.\n\u00a7 60-6,213 (Reissue 2010); (3) turning his vehicle left on a roadway when such movement could\nnot be made safely in violation of Neb. Rev. Stat. \u00a7 60-6,161 (Reissue 2010); (4) turning his vehicle\nleft upon a roadway without giving an appropriate signal in violation of Neb. Rev. Stat.\n\u00a7\u00a7 60-6,162 and 60-6,163 (Reissue 2010) or continuously during not less than the last one hundred\nfeet traveled by the vehicle before turning in violation of \u00a7 60-6,161; (5) driving his vehicle at a\nslow speed impeding normal and reasonable movement of traffic in violation of Neb. Rev. Stat.\n\u00a7 60-6,193 (Cum. Supp. 2018); or (6) operating his vehicle with a concentration of .08 of 1 gram\nor more by weight of alcohol per 210 liters of his breath, in violation of Neb. Rev. Stat. \u00a7 60-6,196\n(Reissue 2010). See Neb. Rev. Stat. \u00a7 28-305 (Reissue 2016). Eaton was also charged with two\ncounts of operating a motor vehicle while under the influence with underage passengers, Class I\nmisdemeanors. See Neb. Rev. Stat. \u00a7 28-1254 (Reissue 2016). A jury trial was held in May 2019.\n Trooper Clint Zost, the responding trooper, testified that upon arriving at the scene around\n8:24 p.m., he learned Eaton was the driver of one of the vehicles involved in the accident. Zost\nbelieved Eaton was under the influence of alcohol because he observed that Eaton\u2019s breath smelled\nlike alcohol and his eyes were bloodshot and watery. Zost further testified that when he asked\nEaton if he had consumed alcohol, Eaton responded he had one 25-ounce beer followed by four or\nfive more beers between the hours of 3:45 and 7 p.m. There were approximately 10 beer cans in\nEaton\u2019s vehicle and 75 percent of them were open.\n Approximately 10 minutes after arriving on the scene, Zost performed a horizontal gaze\nnystagmus test on Eaton. Zost testified that Eaton showed nystagmus on all six clues of\nimpairment. Zost testified that a person who has consumed alcohol will exhibit nystagmus in some,\nif not all, of the six clues, while a person who has not consumed alcohol would exhibit none. Zost\nfurther elaborated that a person exhibiting nystagmus on all six clues of impairment indicates the\nperson is under the influence of alcohol to such a degree that the person is operating a vehicle\nwhile impaired.\n After arresting Eaton, Zost transported Eaton to the Nemaha County Law Enforcement\nCenter where he performed a breath alcohol content (BAC) test on Eaton at 9:17 p.m. using a\nDataMaster machine. In connection therewith, Zost testified that he is a trained DUI investigator\nand is certified to perform DataMaster tests. Zost testified that the BAC test results indicated that\nEaton had a breath alcohol content of 0.101. Zost testified that in his opinion, Eaton was under the\ninfluence of alcohol while operating his motor vehicle in February 2018.\n The jury convicted Eaton on all three charges. Regarding manslaughter, the district court\nsentenced Eaton to 6 to 10 years\u2019 imprisonment with credit for 4 days served. For the Class I\n\n\n -2-\n\fmisdemeanors, Eaton was sentenced to 0 to 90 days on each count and the district court revoked\nEaton\u2019s license for 1 year and ordered him not to drive for 45 days in connection with each count.\nThe sentences were ordered to run consecutively. Eaton has timely appealed to this court and is\nrepresented by counsel different from counsel who represented him during his trial and sentencing.\n ASSIGNMENTS OF ERROR\n On appeal, Eaton contends there was insufficient evidence to support his convictions and\nthat the district court abused its discretion in sentencing him.\n Eaton also assigns as error that he \u201creceived ineffective assistance of counsel.\u201d Brief for\nappellant at 3. Assignments of error on direct appeal regarding ineffective assistance of trial\ncounsel must specifically allege deficient performance, and an appellate court will not scour the\nremainder of the brief in search of such specificity. State v. Mrza, 302 Neb. 931, 926 N.W.2d 79\n(2019). This assigned error is a general allegation and clearly lacks the specificity required by\nMrza. Accordingly, Eaton has failed to raise an ineffective assistance claim on direct appeal.\n STANDARD OF REVIEW\n In reviewing a criminal conviction for a sufficiency of the evidence claim, whether the\nevidence is direct, circumstantial, or a combination thereof, the standard is the same: An appellate\ncourt does not resolve conflicts in the evidence, pass on the credibility of witnesses, or reweigh\nthe evidence; such matters are for the finder of fact. State v. Smith, 302 Neb. 154, 922 N.W.2d 444\n(2019). The relevant question for an appellate court is whether, after viewing the evidence in the\nlight most favorable to the prosecution, any rational trier of fact could have found the essential\nelements of the crime beyond a reasonable doubt. Id.\n An appellate court will not disturb a sentence imposed within the statutory limits absent an\nabuse of discretion by the trial court. State v. Iddings, 304 Neb. 759, 936 N.W.2d 747 (2020). It is\nwithin the discretion of the trial court whether to impose probation or incarceration, and an\nappellate court will uphold the court\u2019s decision denying probation absent an abuse of discretion.\nState v. Wills, 285 Neb. 260, 826 N.W.2d 581 (2013).\n ANALYSIS\n INSUFFICIENCY OF EVIDENCE\n Eaton first assigns that the State failed to offer evidence beyond a reasonable doubt to\nconvict him on all three charges. Specifically, Eaton argues that the evidence failed to establish\nthat he had a concentration of .08 of 1 gram or more by weight of alcohol per 210 liters of breath\nat the time of the accident because the test result obtained after the accident was not sufficiently\nrelated back to the time of the accident. Additionally, Eaton argues the evidence failed to establish\nhe drove a vehicle in a manner as to indicate an indifferent or wanton disregard for the safety of\npersons or property.\n Eaton\u2019s argument is better understood when analyzed in relation to the jury instructions\nissued by the district court. In connection with the State\u2019s manslaughter charge, jury instruction\nnumber 7 set forth, in pertinent part:\n The elements of Manslaughter as charged in the Amended Information are that:\n 1. On or about the 3rd day of February, 2018,\n\n\n -3-\n\f 2. In Nemaha County, Nebraska,\n 3. Defendant Monty R. Eaton, then and there did,\n 4. Cause the death of another, namely Travis E. Ries,\n 5. Unintentionally while in the commission of one or more unlawful acts:\n a. Did drive a motor vehicle in such a manner as to indicate an indifferent or wanton\n disregard for the safety of persons or property; or\n b. Did operate or be in the actual physical control of a motor vehicle when he had\n a concentration of eight-hundredths of one gram or more by weight of alcohol per two\n hundred ten liters of his breath.\n\n In connection with the State\u2019s charge of operation of a vehicle while under the influence\nwith an underage passenger, jury instruction number 12 set forth, in pertinent part:\n The elements of Motor Vehicle Operation While Under the Influence with [an]\n Underage Passenger as charged in the Amended Information are that:\n 1. On or about the 3rd day of February, 2018,\n 2. In Nemaha County, Nebraska,\n 3. The defendant, Monty R. Eaton,\n 4. Did then and there operate or be in the actual physical control of a motor vehicle,\n 5. With a person under the age of sixteen years as a passenger, namely Wyatt Eaton,\n 6. When the defendant had a concentration of eight-hundredths of one gram or more\n by weight of alcohol per two hundred ten liters of his breath.\n\n As to that portion of the manslaughter instruction in which the State was required to prove\nthat Eaton operated a motor vehicle while over the legal alcohol limit, Eaton argues:\n The result of the DataMaster test was that Eaton\u2019s breath had .101 grams of alcohol per\n 210 liters of his breath at 9:17 p.m. or 9:18 p.m. Zost approximated that the .101 result was\n anywhere from 40 minutes to an hour after the accident. Zost could not testify to what\n Eaton\u2019s BAC was at the time of the accident. Zost attempted to interject inadmissible\n preliminary breath test evidence when initially asked if he could testify to Eaton\u2019s BAC at\n the time of the accident. There was not sufficient evidence offered to establish what Eaton\u2019s\n BAC was at the time of the accident or any evidence to establish how the observations by\n any of the witnesses would support an inference or be considered circumstantial evidence\n that Eaton was above .08 at the time of the accident. As a result, his conviction for\n Manslaughter should be reversed.\n\n(Citations omitted.) Brief for appellant at 16. Eaton makes the same argument in relation to that\nportion of the instruction governing the State\u2019s charge that he operated a vehicle while under the\ninfluence with underage passengers.\n Contrary to Eaton\u2019s assertion that the State was required to offer evidence of a temporal\nnexus between the BAC test conducted between 40 minutes and 1 hour after the accident and the\ntime of the accident, the Nebraska Supreme Court specifically rejected that assertion in State v.\nDinslage, 280 Neb. 659, 789 N.W.2d 29 (2010). In Dinslage, the defendant was charged with\ndriving under the influence of alcohol in violation of \u00a7 60-6,196 and that the concentration of\n\n\n -4-\n\falcohol in her breath was sufficient to make her offense punishable under Neb Rev. Stat.\n\u00a7 60-6,197.03(6) (Cum. Supp. 2018). Dinslage argued that because of the significant amount of\nalcohol she consumed at \u201clast call\u201d at the bar before driving, the intoxilyzer test results obtained\napproximately 50 minutes after her stop which placed her over the legal limit did not establish that\nshe was operating her vehicle with a breath alcohol concentration beyond the legal limit at the time\nof her stop. In response, the Nebraska Supreme Court held:\n In State v. Kubik, [235 Neb. 612, 456 N.W.2d 487 (1990),] we explained that the\n State is not required to prove a temporal nexus between the test and the defendant\u2019s alcohol\n level at the moment he or she was operating the vehicle. It would be an impossible burden\n on the State to conduct such an extrapolation when its accuracy depends on the defendant\u2019s\n willingness to testify and his or her honesty in reporting all relevant factors, including the\n time and quantity of consumption. Thus, matters of delay between driving and testing are\n properly viewed as going to the weight of the breath test results, rather than to the\n admissibility of the evidence. And a valid breath test given within a reasonable time after\n the accused was stopped is probative of a violation. We speculated in Kubik that there\n might in some cases be a \u201cdelay . . . so substantial as to render the test results nonprobative\n of the accused\u2019s impairment or breath alcohol level while driving.\u201d But we held that a\n breath test given \u201cless than 1 hour\u201d after the defendant was stopped did not entail an\n unreasonable delay.\n\nDinslage, 280 Neb. at 664, 789 N.W.2d at 34.\n As in Dinslage, we hold that the 40-minute to 1-hour delay from the time of the accident\nto the BAC test given to Eaton in the current case was not unreasonable. Taken together with the\nevidence of the quantity of alcohol Eaton consumed prior to the accident in this case and his failure\nof the field sobriety tests, there was sufficient evidence for a rational trier of fact to conclude that\nEaton was operating his vehicle with a BAC of .08 or greater as it relates to all three charges he\nchallenges in relation to that finding.\n Eaton then separately challenges that as to the State\u2019s manslaughter charge only, there was\ninsufficient evidence to convict him of driving in a manner indicating an indifferent or wanton\ndisregard for the safety of persons or property, but as we indicated above, the district court\u2019s\ninstruction indicated the State need only prove Eaton drove in a manner indicating an indifference\nor wanton disregard for the safety of persons or property as an alternative to driving while\nintoxicated. Certain crimes are single crimes that can be proved under different theories. State v.\nBrouillette, 265 Neb. 214, 655 N.W.2d 876 (2003). As to such crimes, when there are alternative\ntheories of guilt presented to the jury, we will affirm the verdict if the evidence is sufficient to\nsupport any alternative theory presented. State v. Dady, 304 Neb. 649, 936 N.W.2d 486 (2019).\nThe offense of manslaughter as charged by the State is such a crime. The State alleged Eaton could\nbe convicted of manslaughter if he either unintentionally caused the death of the victim because\nof intoxication or by operating with indifference or wanton disregard for the safety of persons or\nproperty. Because we have already found there was sufficient evidence in the record to support\nEaton\u2019s conviction for causing the death of the victim unintentionally due to intoxication, we need\nnot consider his argument that there was insufficient evidence to support his manslaughter\nconviction on the basis that he drove his motor vehicle with a degree of indifference or wanton\n\n\n -5-\n\fdisregard for the safety of persons or property. See State v. Parnell, 305 Neb. 932, 943 N.W.2d\n678 (2020) (appellate court is not obligated to engage in analysis that is not necessary to adjudicate\ncase and controversy before it). Eaton\u2019s first assignment of error fails.\n EXCESSIVE SENTENCES\n Eaton argues the sentences imposed were an abuse of discretion. Specifically, Eaton asserts\nthe district court abused its discretion during sentencing when the district court articulated that\nprobation \u201c\u2018would depreciate the serious nature of the crime and would not be justice in the event\nthat someone has lost their life, which is the case here.\u2019\u201d Brief for appellant at 21. Eaton contends\nthat one of the elements of manslaughter is that a death occurred, yet the Legislature has classified\nmanslaughter as a Class IIA felony, which requires neither a minimum, nor a mandatory, period\nof incarceration. Additionally, Eaton argues that more of the sentencing factors weighed in favor\nof probation.\n Eaton was convicted of one count of manslaughter, a Class IIA felony, and two counts of\noperating a motor vehicle while under the influence with an underage passenger, Class I\nmisdemeanors. See, \u00a7\u00a7 28-305 and 28-1254. Eaton\u2019s sentence of 6 to 10 years\u2019 imprisonment is\nwithin the statutory sentencing range for Class IIA felonies which are punishable by a minimum\nof no imprisonment to a maximum of 20 years\u2019 imprisonment. See Neb. Rev. Stat. \u00a7 28-105\n(Reissue 2016). Additionally, on each of the two Class I misdemeanor convictions, Eaton was\nsentenced to 0 to 90 days\u2019 jail time and his license was revoked for 1 year with an order not to\ndrive for 45 days, then a requirement that he must apply and install an ignition interlock permit.\nThese sentences are within the statutory sentencing ranges for Class I misdemeanors which are\npunishable by a minimum of no imprisonment to a maximum of not more than 1 year\u2019s\nimprisonment, and/or a $1,000 fine. See Neb. Rev. Stat. \u00a7 28-106 (Reissue 2016). Also, Neb. Rev.\nStat. \u00a7 60-496 (Reissue 2010) authorizes the revocation of a motor vehicle operator\u2019s license for\nup to 1 year based on a conviction of a violation of any Nebraska law pertaining to the operation\nof motor vehicles.\n Where a sentence imposed within the statutory limits is alleged on appeal to be excessive,\nthe appellate court must determine whether a sentencing court abused its discretion in considering\nand applying the relevant factors as well as any applicable legal principles in determining the\nsentence to be imposed. State v. Price, 306 Neb. 38, 944 N.W.2d 279 (2020). In determining a\nsentence to be imposed, relevant factors customarily considered and applied are the defendant\u2019s\n(1) age, (2) mentality, (3) education and experience, (4) social and cultural background, (5) past\ncriminal record or record of law-abiding conduct, and (6) motivation for the offense, as well as (7)\nthe nature of the offense and (8) the amount of violence involved in the commission of the crime.\nId.\n During the sentencing hearing, Eaton\u2019s counsel asked the district court to consider Eaton\u2019s\nrisk and need levels regarding the factors in the Level of Service/Case Management Inventory\n(LS/CMI). At the time of the preparation of the presentence investigation report (PSR), Eaton was\n53 years old, married with two dependents, and had completed the 12th grade. His only prior\nconvictions were violating a stop/yield sign, reckless driving (amended from willful reckless\ndriving), and speeding. The LS/CMI indicated alcohol/drug problems as medium risk. Eaton\nparticipated in a substance abuse evaluation approximately 3 months after the accident and the\n\n\n -6-\n\fevaluation noted Eaton was focused on his financial and legal problems but he was not observed\nto be remorseful for the accident. The evaluation also noted Eaton scored low on the readiness to\nchange factor in that Eaton did not identify a need to modify his current drinking patterns. At the\nsentencing hearing, Eaton apologized for his actions and the pain he caused. Prior to handing down\nthe sentence, the district court stated it had considered Eaton\u2019s PSR including his limited criminal\nhistory, victim impact statements, the effect this case has on the lives of the families involved, the\nevaluation, the seriousness of the offense, and the impact to Eaton\u2019s family. In sum, based upon\nthe factors that the sentences imposed were within the relevant statutory sentencing range, the\nserious nature of the offenses, Eaton\u2019s lack of remorse, and the impact to the victim\u2019s family, the\ndistrict court did not abuse its discretion in determining that probation was not appropriate and in\nthe sentences imposed.\n CONCLUSION\n For the foregoing reasons, we affirm Eaton\u2019s convictions and sentences. We further find\nthat Eaton has failed to properly preserve his claims of ineffective assistance of trial counsel on\ndirect appeal.\n AFFIRMED.\n\n\n\n\n -7-\n\f"} -{"text": "\n521 S.E.2d 212 (1999)\n239 Ga. App. 301\nSLEDGE\nv.\nThe STATE.\nNo. A99A1014.\nCourt of Appeals of Georgia.\nJuly 23, 1999.\n*213 Trauffer & Associates, Harry L. Trauffer, Marietta, Lawrence J. Zimmerman, for appellant.\nTommy K. Floyd, District Attorney, Sandra A. Graves, Assistant District Attorney, for appellee.\nMcMURRAY, Presiding Judge.\nAfter the denial of his motion to suppress cocaine discovered in the vehicle he was driving, defendant consented to a bench trial and was found guilty of a single count of trafficking in cocaine. He appeals from the judgment of conviction, contending the trial court erred in concluding a valid consent search occurred and further erred in concluding the police had probable cause of any suspicious activity to detain him.\nOnly the arresting officers testified at defendant's suppression hearing. Viewed in the light most favorable to the trial court's determination, their evidence authorized the following material facts: Uniformed Butts County Sheriff's Deputy Mark C. Whitwell and his partner (and brother), Deputy Scott *214 Whitwell, were on traffic patrol on Interstate 75 on May 21, 1998, when they observed a van driven by defendant. Defendant attempted to change lanes from the middle lane to the slow lane without the use of a turn signal. One quarter width of the vehicle went into the slow lane, causing the traffic around defendant to brake and slow in an effort to avoid him. Defendant then went into the left lane with approximately one quarter vehicle width and returned to the center lane. Concerned that defendant might be under the influence of something that would render defendant a less safe driver, the deputies initiated a traffic stop of defendant's van. Deputy Scott Whitwell spoke with defendant at the driver's window. When Deputy Scott Whitwell was asking for the driver's license, defendant was \"looking up at [Deputy Scott Whitwell], but ... had extended his right arm down and was pushing a box away from him, ... towards the van's passenger seat.\" It appeared to be a shoe box; something large enough to contain a weapon. Defendant was very nervous and apprehensive and was slow to identify the person to whom the vehicle was registered. While defendant searched for registration papers, Deputy Scott Whitwell informed Deputy Mark Whitwell that defendant was \"hiding a box.\" Deputy Mark Whitwell asked defendant for permission to search the box, because the deputy was worried due to the fact that defendant tried to hide the box, was nervous, and remained focused on the box. Defendant gave permission, saying \"`Yes, Sir,' an affirmative reply that [Deputy Mark Whitwell] could search the box.\" Defendant was not threatened and did not appear to be under the influence of alcohol or any other drug. Inside the box, Deputy Mark Whitwell found an opaque plastic bag, the contents of which, while unknown, did not seem threatening. But underneath this was a small, clear plastic bag containing suspected cocaine. Deputy Mark Whitwell signaled his partner, and Deputy Scott Whitwell put defendant \"on the ground to his knees and cuffed him....\" According to the videotape of this traffic stop, less than three minutes elapsed between the initial encounter and defendant's formal arrest. Held:\n1. Defendant first contends the trial court erred in denying the motion to suppress because his consent to search the box containing suspected cocaine was the product of an illegal detention, relying on Rogers v. State, 206 Ga.App. 654, 657(2), 426 S.E.2d 209. We disagree.\n(a) In a consent search, the burden is on the State to demonstrate that the consent was voluntarily given, and not the result of duress or coercion, express or implied. Voluntariness is a question of fact for the trial court to be determined from all the circumstances. Code v. State, 234 Ga. 90, 93(III), 214 S.E.2d 873. Where, as here, the evidence is uncontradicted and no question regarding the credibility of witnesses is presented, the trial court's application of the law to undisputed facts is subject to de novo appellate review. Vansant v. State, 264 Ga. 319, 320(1), 443 S.E.2d 474.\n(b) The test to determine whether a temporary traffic stop has evolved into a custodial arrest is whether a reasonable person in the detainee's position would have thought the detention would not be temporary. Sutton v. State, 223 Ga.App. 721, 722(1), 478 S.E.2d 910, citing Berkemer v. McCarty, 468 U.S. 420, 104 S.Ct. 3138, 82 L.Ed.2d 317. In Rogers, this Court reversed the denial of a suppression motion, concluding \"that when [the investigating officer] retained appellant's license [while questioning him on matters unrelated to any possible traffic, parking, or loitering violations], the encounter matured into an investigative stop,\" from which that defendant could not reasonably have believed himself free to leave, and so coerced his consent to search. 206 Ga.App. at 657-658(2), 426 S.E.2d 209, supra.\nIn the case sub judice, the initial traffic stop of defendant's vehicle was not pretextual but was authorized by the apparent violation of OCGA \u00a7 40-6-48, committed in the officers' presence. State v. Holcomb, 219 Ga.App. 231, 232, 464 S.E.2d 651. Roadside questioning at a routine traffic stop does not, in and of itself, constitute custodial interrogation. Lebrun v. State, 255 Ga. 406, 407(3), 339 S.E.2d 227. An officer conducting a routine traffic stop may request and examine a driver's license and vehicle registration *215 and run a computer check on the documents. Rogers v. State, 206 Ga.App. at 657(1), 426 S.E.2d 209, supra. The fact that an officer retains a detainee's license for a short period during the course of an investigation does not necessarily mean that detainee is in custody, even if, at that point, the detainee could have been arrested for some violation of state law. Crum v. State, 194 Ga.App. 271, 272, 390 S.E.2d 295. Here, Deputy Scott Whitwell had not yet completed the license check on defendant during the three-minute episode, before Deputy Mark Whitwell obtained consent to search the shoe box defendant had attempted to hide. A reasonable person not under the influence of any drug or intoxicant to the extent he was rendered a less safe driver would have thought the traffic stop for weaving across the roadway was only temporary. Sutton v. State, 223 Ga.App. at 724(1), 478 S.E.2d 910, supra. Consequently, the trial court in the case sub judice correctly concluded under the totality of the circumstances that defendant's consent was not the impermissible result of an unauthorized custodial detention.\n2. Next, defendant contends the denial of his suppression motion was error because the officers had neither probable cause nor reasonable suspicion to search the box for contraband or weapons. But a valid consent to search eliminates the need for probable cause to support, a warrant or for reasonable suspicion to conduct a limited search for weapons. McDaniel v. State, 227 Ga.App. 364, 366(2), 489 S.E.2d 112; Boggs v. State, 194 Ga.App. 264, 390 S.E.2d 423. Thus assuming, but not deciding, the deputies did not harbor a reasonable suspicion that the shoebox defendant nervously kept eying contained either a weapon or contraband, his valid consent to examine that box rendered irrelevant the alleged absence of such probable cause or reasonable suspicion of wrongdoing.\nJudgment affirmed.\nANDREWS, P.J., and RUFFIN, J., concur.\n"} -{"text": " IN THE SUPERIOR COURT OF THE STATE OF DELAWARE\n\n\n IN AND FOR NEW CASTLE COUNTY\n\nTEAMSTERS LOCAL 237 ) C.A. No. N04C-11-191 VLM\nWELFARE FUND, et. al., on behalf of\n )\nthemselves and others similarly situated,\n )\n )\n Plaintiffs )\n )\n v. )\n )\nASTRAZENECA PHARMACEUTICALS )\nLP and ZENECA, INC., )\n )\n Defendants )\n\n Submitted: May 18, 2015\n Decided: July 8, 2015\n\n\n Upon Consideration of Defendants\u2019 Motion to Dismiss\n Plaintiffs\u2019 Second Amended Complaint,\n GRANTED.\n\n\n\n\n OPINION\n\n\nA. Zachary Naylor, Esquire, Chimicles & Tikellis LLP, Wilmington, DE,\nAttorney for Plaintiffs.\n\nMichael P. Kelly, Esquire, McCarter & English, LLP, Wilmington, DE,\nAttorney for Defendants.\n\n\nMEDINILLA, J.\n\f I. INTRODUCTION\n\n Plaintiffs, six New York-based health care funds,1 filed this class action suit\n\nin November 2004 against Defendants Astrazeneca Pharmaceuticals, L.P. and\n\nZeneca, Inc. (\u201cDefendants\u201d or \u201cAstrazeneca\u201d) alleging consumer fraud, unjust\n\nenrichment, and negligent misrepresentation in connection with Astrazeneca\u2019s\n\nmarketing of its prescription heartburn medication, Nexium. Defendants moved to\n\ndismiss. This Court stayed the action while parallel litigation involving essentially\n\nthe same factual allegations was pending in the United States District Court for the\n\nDistrict of Delaware (\u201cDistrict Court\u201d). Following a lengthy procedural history in\n\nthe District Court, the stay was lifted. Now before the Court are Defendants\u2019\n\nmotions to dismiss Plaintiffs\u2019 Second Amended Complaint (\u201cSAC\u201d), or\n\nalternatively, to strike certain allegations in the SAC. For the reasons set forth\n\nbelow, the Motion to Dismiss is GRANTED.\n\n II. FACTS AND PROCEDURAL HISTORY\n\n Astrazeneca is the manufacturer of Prilosec, a drug used to treat heartburn\n\nand related diseases. The generic term for Prilosec is omeprazole. In 2000,\n\n\n\n1\n Plaintiffs are Teamsters Local 237 Welfare Fund, Local 237 Teamsters Retirees\u2019 Benefit Fund,\nLocal 237 Teamsters-Plainview-Old Bethpage Central School District Health and Welfare Trust\nFund, Local 237 Teamsters-North Babylon School District Health and Welfare Trust Fund,\nLocal 237 Teamsters-Brentwood School District Health and Welfare Trust Fund, and Local 237\nTeamsters-Suffolk Regional Off-Track Betting Corporation Health and Welfare Trust Fund, on\nbehalf of themselves and others similarly situated.\n 2\n\fPrilosec generated approximately $6 billion in sales for Astrazeneca.\n\nAstrazeneca\u2019s patent for Prilosec was set to expire in 2001. 2\n\n Plaintiffs are six New York-based union health and benefit funds that\n\nallegedly reimbursed for their members\u2019 purchases of Astrazeneca products in\n\nfifteen different states. 3 Plaintiffs contend that Astrazeneca, a Delaware company,\n\nengaged in consumer fraud by introducing an essentially identical drug called\n\nNexium to the market when generic omeprazole became available as over-the-\n\ncounter \u201cPrilosec OTC.\u201d 4 Plaintiffs allege that Astrazeneca falsely represented\n\nNexium to be superior to Prilosec in an effort to keep Astrazeneca\u2019s market share\n\ndominant after losing its patent for Prilosec. 5\n\n Plaintiffs filed their original class action complaint on November 18, 2004.\n\nAn amended complaint was filed on February 16, 2005. Defendants filed a motion\n\nto dismiss on March 3, 2005. On May 4, 2005, the Court entered a stipulated order\n\n\n\n\n2\n Second Amended Class Action Complaint (\u201cSAC\u201d) \u00b6 2.\n3\n Including Delaware, Arizona, Colorado, Connecticut, Florida, Hawaii, Kentucky, Louisiana,\nMissouri, New Jersey, New Mexico, New York, Pennsylvania, Tennessee, and Washington. Id.\n\u00b6 27.\n4\n Id. \u00b6 11.\n5\n According to Plaintiffs, Astrazeneca\u2019s strategy was to (1) precondition Prilosec users toward\nNexium; (2) aggressively identify and profile Prilosec users; (3) position the \u201cmakers of\nPrilosec\u201d as category experts; (4) rapidly convert Prilosec users to Nexium users; (5) create\nimmediate awareness of Nexium as a Prilosec upgrade; and (6) build awareness of Nexium as a\nPrilosec upgrade. The marketing campaign at issue involved both physician-directed marketing\nand direct-to-consumer marketing. Id. \u00b6\u00b6 4-10.\n 3\n\fto stay the proceedings because parallel litigation in the District Court had been\n\ninstituted. 6\n\n The District Court case was styled as Pennsylvania Employee Benefit Trust\n\nFund v. Zeneca (hereinafter \u201cZeneca\u201d) and involved a putative class of plaintiffs\n\nfrom Pennsylvania, New York, and Michigan. 7 Defendants moved to dismiss on\n\ngrounds that, inter alia, Plaintiffs\u2019 claims were preempted by federal law.\n\nPlaintiffs appealed, and the Third Circuit affirmed. 8 In 2009, the United States\n\nSupreme Court remanded the case to the Third Circuit with instructions to\n\nreconsider the case in light of another then-recent decision wherein the Court held\n\nthat state consumer protection laws were not preempted by federal law in all\n\ncases. 9\n\n On May 6, 2010, following remand from the Third Circuit, the District Court\n\nagain dismissed the complaint.10 Specifically, the District Court held: (1) under a\n\nDelaware choice of law analysis, the law of the plaintiffs\u2019 home states controlled\n\n\n\n\n6\n See Pennsylvania Employee Benefit Trust Fund v. Zeneca, Inc., 2005 WL 2993937 (D. Del.\nNov. 8, 2005) aff'd sub nom. Pennsylvania Employees Ben. Trust Fund v. Zeneca Inc., 499 F.3d\n239 (3d Cir. 2007) cert. granted, judgment vacated, 556 U.S. 1101, 129 S. Ct. 1578, 173 L. Ed.\n2d 672 (2009).\n7\n 710 F.Supp.2d 458 (D. Del. 2010) (ruling on Defendant\u2019s motion to dismiss).\n8\n 499 F.3d 239 (3d Cir. 2007).\n9\n 556 U.S. 1101 (2009) (citing Wyeth v. Levine, 555 U.S. 555 (2009)).\n10\n Pennsylvania Employee Benefit Trust Fund v. Zeneca, Inc., 710 F.Supp.2d 458 (D. Del. 2010)\n(hereinafter \u201cZeneca\u201d).\n 4\n\fthe claims; 11 (2) the complaint failed to state a claim under each of the respective\n\nstates\u2019 consumer protection laws; 12 (3) there was no adequate causal connection\n\nbetween Defendants\u2019 alleged misrepresentations and Plaintiffs\u2019 decision to\n\npurchase Nexium over Prilosec such that the unjust enrichment claim could survive\n\ndismissal; 13 and (4) the complaint did not contain allegations of reliance such that\n\nthe claim for negligent misrepresentation could survive dismissal. 14 Although the\n\nDistrict Court granted leave to do so, Plaintiffs did not file an amended complaint,\n\nnor did Plaintiffs appeal the decision.\n\n Following the District Court\u2019s decision, on August 8, 2010, the Court\n\ngranted Plaintiffs\u2019 motion to lift the stay on the instant action. Unfortunately, and\n\nwithout much explanation, more than three years passed without any action taken\n\nby either party. 15 On October 4, 2013, Astrazeneca moved to dismiss the action in\n\nthis Court for failure to prosecute. After a status conference with the then-\n\npresiding judge, the Court denied the motion and issued a scheduling order. On\n\n\n\n11\n Id. at 466-470.\n12\n Specifically, the Pennsylvania plaintiffs\u2019 claims could not survive dismissal because the\ncomplaint did not allege justifiable reliance on Defendant\u2019s marketing/advertising campaigns as\nrequired by Pennsylvania law, id. at 471-73; the New York plaintiff\u2019s claims did not sufficiently\nallege causation, as required by New York law, id. at 473-75; and the Michigan plaintiffs\u2019 claims\nfailed because the plaintiffs did not have standing under the Michigan Consumer Protection Act,\nid. at 475-77.\n13\n Zeneca, 710 F.Supp.2d at 477.\n14\n Id. at 477-78.\n15\n This case was reassigned to this judge on January 15, 2014. Representations made by counsel\nduring oral argument before this Court on April 23, 2015 offered little explanation for the delay.\n 5\n\fApril 4, 2014, pursuant to the scheduling order, Plaintiffs filed the Second\n\nAmended Class Action Complaint (the \u201cSAC\u201d).\n\n The SAC before this Court alleges (1) violations of the Delaware Consumer\n\nFraud Act (\u201cDCFA\u201d); 16 (2) violations of the other 14 individual state consumer\n\nprotection statutes wherein Plaintiffs are alleged to have purchased Nexium; (3)\n\nunjust enrichment; and (4) negligent misrepresentation. The SAC differs from the\n\noriginal class action complaint in two respects: it removes claims for tortious\n\ninterference, and raises new factual allegations that Astrazeneca engaged in an\n\nillegal \u201cpay-for-delay\u201d or \u201creverse\u201d settlement scheme with potential generic\n\nmanufacturers of Nexium in order to maintain Astrazeneca\u2019s dominance over the\n\nomeprazole market. The \u201cpay-for-delay\u201d activities allegedly occurred in 2008. 17\n\n On May 8, 2014, Astrazeneca filed a notice of removal to the District Court.\n\nDefendants sought removal on the basis that the new \u201creverse settlement\u201d and\n\n\u201cpay-for-delay\u201d allegations raised a new and distinct claim, which gave the federal\n\ncourt jurisdiction under the Class Action Fairness Act of 2005 (\u201cCAFA\u201d). 18\n\nPlaintiffs disagreed and moved to remand the case back to this Court. By order\n\n\n\n16\n 6 Del. C. \u00a7 2513 et. seq.\n17\n See SAC \u00b6 7, 114-15, n. 62. The \u201cpay-for-delay\u201d allegations are the subject of Defendants\u2019\nalternative motion to strike certain allegations in the Second Amended Complaint. Because this\nCourt grants Defendants\u2019 motion to dismiss, this Court does not reach the merits of Defendants\u2019\nalternative motion to strike.\n18\n 28 U.S.C. \u00a71332(d), 1453, and 1711-1715.\n 6\n\fdated November 18, 2014, the District Court granted Plaintiffs\u2019 motion.19 The\n\nDistrict Court concluded that the new allegations related back to the date of the\n\noriginal filing, which occurred before the enactment of CAFA, and, therefore,\n\nCAFA did not apply. 20\n\n After remand, Defendants filed the instant motion to dismiss and a briefing\n\nschedule was issued. Defendants also filed a separate motion to strike the\n\nallegations concerning the \u201cpay-for-delay\u201d scheme from the SAC. A hearing was\n\nheld on both motions on April 23, 2015.\n\n On May 7, 2015, Plaintiffs filed a \u201cNotice of Supplemental Authority\u201d and\n\nattached two cases from the Northern District of California, which purport to\n\nbolster Plaintiffs\u2019 argument against dismissal. 21 On May 12, 2015, Defendants\n\nfiled their response which urged the Court to disregard the cases as inapposite.22\n\nOn May 14, 2015, Plaintiffs filed a \u201cResponse in Furtherance of their Notice of\n\nSupplemental Authority,\u201d again urging this Court to consider the California cases,\n\n\n\n19\n Teamsters Local 237 Welfare Fund, et. al. v. Astrazeneca Pharmaceuticals L.P., et al., Civ.\nNo. 140587-SLR (D.Del. 2014).\n20\n Id. at 3-6.\n21\n In re Lidoderm Antitrust Litig., -- F.Supp.3d --, 2015 WL 2088223 (N.D. Cal. May 5, 2015)\n(hereinafter \u201cLidoderm I\u201d); United Food & Commer. Workers Local 1776 & Participating\nEmployers Health & Welfare Fund v. Teikoku Pharma USA, Inc., -- F.Supp.3d --, 2014 WL\n6465235 (N.D. Cal Nov. 17, 2014) (hereinafter Lidoderm II) (collectively, \u201cIn re Lidoderm\u201d).\n22\n Specifically, Defendants note that In re Lidoderm considered only the issue of whether third-\nparty payers have standing to assert an antitrust claim under the laws of the states in which their\nmembers purchased a drug. See Def.\u2019s Response (citing Lidoderm I, at *87-88; Lidoderm II, at\n*32-65).\n 7\n\fand restating their disagreement with Defendants\u2019 position.23 On May 18, 2015,\n\nDefendants filed a \u201cFurther Response Re: Plaintiffs\u2019 Notice of Supplemental\n\nAuthority.\u201d\n\n Having considered the briefs and submissions of the parties, exhibits and\n\nappendices attached thereto, relevant case law and authorities, and the oral\n\narguments of the parties, the matter is ripe for review.\n\n III. STANDARD OF REVIEW\n\n When deciding a motion to dismiss for failure to state a claim under\n\nSuperior Court Rule 12(b)(6), all-well pleaded allegations in the complaint are to\n\nbe accepted as true,24 and the Court must draw all reasonable inferences in favor of\n\nthe non-moving party. 25 The complaint will be dismissed only if it appears to a\n\ncertainty that under no set of facts which could be proved to support the claim\n\nasserted would Plaintiff be entitled to relief. 26\n\n\n\n\n23\n In this filing, Plaintiffs attempt to inject the fact that Defendants \u201ceffectuate[d] [a] $20 million\nclass settlement of similar allegations\u201d under Massachusetts law into the record in this case.\nPltfs.\u2019 Further Response at 1 (citation omitted). Plaintiffs\u2019 eleventh-hour submission fails to\npersuade this Court to reconsider its disposition of the case.\n24\n Spence v. Funk, 396 A.2d 967 (Del. 1978).\n25\n In re Gen. Motors (Hughes) S\u2019holder Litig., 897 A.2d 162, 168 (Del. 2006) (quoting Savor,\nInc. v. FMR Corp., 812 A.2d 894, 896-97 (Del. 2002).\n26\n Id.\n 8\n\f IV. DISCUSSION\n\n\n The Court will first undertake a choice of law analysis to determine what\n\nlaw should apply to the claims at issue in this case. The Court will next apply the\n\ncontrolling state law to Plaintiffs\u2019 claims. Finally, the Court will address any\n\nsupplemental issues concerning the disposition of this case.\n\n\n A. Choice of Law27\n\n In Pennsylvania Employee Benefit Trust Fund v. Zeneca, Inc. (\u201cZeneca\u201d),28\n\nthe District Court applied Delaware\u2019s choice of laws principles and determined that\n\nthe law of each of the plaintiffs\u2019 residence or place of business controlled the\n\nconsumer fraud claims they asserted against Astrazeneca.29 The Court notes that\n\nthe allegations are essentially identical to those alleged in the instant complaint. 30\n\n Defendants argue the same analysis undertaken in Zeneca should apply in\n\nthis action, and accordingly, this Court should reach the same conclusion: that the\n27\n On April 6, 2015, the Delaware Supreme Court issued its ruling on an interlocutory appeal\nconcerning choice of law in Bell Helicopter Textron, Inc. v. Arteaga, 113 A.3d 1045 (Del. 2015).\nThe Court emphasized Delaware\u2019s public policy interest in \u201cavoid[ing] contributing to forum-\nshopping[,]\u201d and urged trial courts to be \u201cextremely cautious not to intrude on the legitimate\ninterests of other sovereign states.\u201d Id. at 1052. This Court acknowledges the ruling of Bell\nHelicopter on a general choice of law analysis. However, Bell Helicopter was issued after the\nclose of briefing on the instant motion, and this Court does not find that any additional briefing\nregarding that case would change the disposition of this matter.\n28\n 710 F.Supp.2d 458 (D. Del. 2010) (Robreno, J.).\n29\n See, e.g., id. at 471-72 (finding that the \u201clocation of Defendants\u2019 principal place of business\nstands, at best, in equipoise with the residence/place of business of plaintiffs. The fact that\nDefendants \u2018made\u2019 the alleged misrepresentations, i.e., orchestrated the allegedly deceptive\nmarketing campaigns, in Delaware does not weigh more strongly than the other factors . . . .\u201d).\n30\n Id. at 464-65.\n 9\n\flaw of Plaintiffs\u2019 principal place of business\u2014New York\u2014applies to their claims.\n\nDefendants argue that to the extent that Plaintiffs received and acted in reliance\n\nupon the challenged marketing practices, they did so in New York. New York law\n\ngoverns Plaintiffs\u2019 contractual relationship with their members; Plaintiffs\u2019\n\nheadquarters, their decisions to reimburse, and their money payments for Nexium\n\nare located in New York.31\n\n Plaintiffs contend that Delaware law should apply because (1) Delaware has\n\nthe most significant relationship to the action because the alleged deceptive\n\nmarketing practices \u201cemanated from\u201d Delaware; (2) Plaintiffs\u2019 members purchased\n\nNexium in 14 different states, including Delaware, where the purchase of Nexium\n\nat the pharmacy counter should be considered the location of the injury; and (3)\n\nthere is no conflict between Delaware law and the law of the 14 states where\n\nPlaintiffs\u2019 members reside, such that Delaware law should apply to all claims.\n\nPlaintiffs further argue that the District Court\u2019s analysis was erroneous, yet\n\nconcede that no application was made to that Court by motion, appeal, or otherwise\n\nto reconsider Plaintiffs\u2019 position. Rather, Plaintiffs ask this Court, in effect, to\n\n\u201ccorrect\u201d the District Court\u2019s ruling, which would be inconsistent with and\n\ncontrary to that court\u2019s prior analysis and conclusions.\n\n\n\n31\n Defs. Op. Br. at 10 (citing SAC at \u00b6\u00b6 18-23; In re K-Dur Antitrust Litig., 2008 WL 2660783, at\n*5) (D.N.J. Mar. 19, 2008).\n 10\n\f A preliminary step when confronting a choice of law determination is to\n\nidentify the jurisdictions whose laws might apply to a claim and determine if those\n\nlaws are materially different from one another. 32 If they are not materially\n\ndifferent, then there is a \u201cfalse conflict,\u201d and the forum state\u2019s law applies. 33 If\n\nthere is a material difference, the Court applies the \u201cmost significant relationship\u201d\n\ntest in order to determine what law should apply. 34 In applying the most\n\nsignificant relationship test, Sections 6, 145, and 148 of the Restatement (Second)\n\nof Conflict of Laws (the \u201cRestatement\u201d) are implicated. 35\n\n 1. General Choice of Law Principles\n\n Section 6 of the Restatement provides the foundation of the most significant\n\nrelationship test:\n\n (1) A court, subject to constitutional restrictions, will follow\n a statutory directive of its own state on choice of law.\n\n (2) When there is no such directive, the factors relevant to\n the choice of the applicable rule of law include:\n\n (a) the needs of the interstate and international systems;\n (b) the relevant policies of the forum;\n\n\n\n\n32\n Parlin v. Dyncorp Intern., Inc., 2009 WL 3636756, at *3 n. 16 (Del. Super. Ct. Sept. 30,\n2009).\n33\n Shook & Fletcher Asbestos Settlement Trust v. Safety Nat. Cas. Corp., 2005 WL 2436193, at\n*5 (Del. Super. Sept. 29, 2005) aff'd, 909 A.2d 125 (Del. 2006).\n34\n Travelers Indemnity Co. v. Lake, 594 A.2d 38, 47 (D. Del. 1991).\n35\n Zeneca, 710 F.Supp.2d at 468.\n 11\n\f (c) the relevant policies of other interested states and\n the relative interests of those states in the\n determination of the particular issue;\n (d) the protection of justified expectations;\n (e) the basic policies underlying the particular field of\n law;\n (f) certainty, predictability, and uniformity of result;\n and\n (g) ease in the determination and application of law to\n be applied.\n\n Section 145 of the Restatement provides a general framework for the most\n\nsignificant relationship test with respect to tort actions, and provides that contacts\n\nto be taken into account in applying the principles of Section 6 include:\n\n (1) The rights and liabilities of the parties with respect to an\n issue in tort are determined by the local law of the state\n which, with respect to that issue, has the most significant\n relationship to the occurrence and the parties under the\n principles stated in \u00a7 6.\n\n (2) Contacts to be taken into account in applying the\n principles of \u00a7 6 to determine the law applicable to an\n issue include:\n\n (a) the place where the injury occurred,\n (b) the place where the conduct causing the injury\n occurred,\n (c) the domicil, residence, nationality, place of\n incorporation and place of business of the parties,\n and\n (d) the place where the relationship, if any, between the\n parties is centered.\n\n These contacts are to be evaluated according to their relative\n importance with respect to the particular issue.\n\n\n 12\n\f Section 148 \u201crecasts the rule set forth in \u00a7 145 with greater precision with\n\nrespect to fraud or misrepresentation claims.\u201d 36 Section 148 presents two\n\nalternative subparts; the first deals with the location of plaintiff\u2019s action taken in\n\nreliance occurring in the same state where the false representation was made:\n\n (1) When the plaintiff has suffered pecuniary harm on\n account of his reliance on the defendant's false\n representations and when the plaintiff's action in reliance\n took place in the state where the false representations\n were made and received, the local law of this state\n determines the rights and liabilities of the parties unless,\n with respect to the particular issue, some other state has a\n more significant relationship under the principles stated\n in \u00a7 6 to the occurrence and the parties, in which event\n the local law of the other state will be applied.\n\n The second subsection to \u00a7 148 sets forth factors to consider where the\n\nplaintiff\u2019s action taken in reliance occurred in a different state from where the false\n\nrepresentation occurred:\n\n (2) When the plaintiff's action in reliance took place in\n whole or in part in a state other than that where the false\n representations were made, the forum will consider such\n of the following contacts, among others, as may be\n present in the particular case in determining the state\n which, with respect to the particular issue, has the most\n significant relationship to the occurrence and the parties:\n (a) the place, or places, where the plaintiff acted in\n reliance upon the defendant's representations,\n (b) the place where the plaintiff received the\n representations,\n\n\n36\n Id.\n 13\n\f (c) the place where the defendant made the\n representations,\n (d) the domicil, residence, nationality, place of\n incorporation and place of business of the parties,\n (e) the place where a tangible thing which is the subject\n of the transaction between the parties was situated at\n the time, and\n (f) the place where the plaintiff is to render performance\n under a contract which he has been induced to enter\n by the false representations of the defendant.\n\n 2. Application of Choice of Law Principles\n\n This Court first examines the competing laws at issue to determine whether\n\nan actual conflict exists. 37 The dispute arises in this case over whether the laws of\n\nDelaware, New York, or the 14 states in which each of Plaintiffs\u2019 individual union\n\nmembers reside, apply to the respective consumer fraud claims. Plaintiffs argue\n\nthat there is no conflict between the laws of Delaware and the 14 states in which\n\nthe union members reside, and therefore Delaware law should apply to their\n\nclaims. Defendants argue there is a conflict, requiring the application of New York\n\nlaw.\n\n At the outset, the Court finds that the competing laws at issue are the laws of\n\nDelaware and New York. The Court is not persuaded by Plaintiffs\u2019 argument that\n\nthe law of each of the 14 states in which individual union members reside should\n\napply to the claims, because, according to Plaintiffs, that is where their members\n\n\n37\n See Zeneca, 710 F.Supp.2d at 468.\n 14\n\fmost likely purchased Nexium. The Court finds that Plaintiffs are third-party\n\npayer unions providing benefits for current and former New York City employees.\n\nWhile some of the individual members may currently reside elsewhere, and thus\n\nmay have purchased Nexium \u201cin nearly two-thirds of the United States,\u201d38 New\n\nYork is the place with the most significant interest in enforcing its consumer\n\nprotection laws in this action. Plaintiffs are headquartered in New York where\n\ntheir contractual relationships with their members, their decisions to reimburse for\n\nNexium, and their money payments necessarily were made. 39 The Restatement\n\ninstructs that when considering the relevant contacts to apply, \u201cthe domicil,\n\nresidence and place of business of the plaintiff are more important than are similar\n\ncontacts on the part of the defendant.\u201d40 It logically follows that New York law\n\nbest protects the third-party payers\u2019 justified expectations with respect to their\n\nconsumer fraud claims. Accordingly, when conducting its choice of law analysis,\n\nthis Court will consider the laws of Delaware and New York as the competing\n\ninterests in this case.\n\n\n\n\n38\n SAC \u00b6 27.\n39\n Def.\u2019s Op. Br. at 10 (citing In re K-Dur Antitrust Litig., 2008 WL 2660783, at *5 (D.N.J. Mar.\n19, 2008)).\n40\n Restatement (Second) of Conflict of Laws \u00a7 148 cmt. i. See also In re K-Dur Antitrust Litig.,\n2008 WL 2660783 (D.N.J. Mar. 19, 2008) (\u201c[T]he state with the greatest interest in a [third party\npayer\u2019s] claims brought on its own behalf is the state where the [third party payer] has its own\nprincipal place of business and from which it presumably paid the alleged supracompetitive\nprices.\u201d).\n 15\n\f Of note is that in Zeneca, the District Court conducted an extensive analysis\n\nof the consumer protection laws of Delaware and New York. 41 The Zeneca court\n\nconcluded that an actual conflict between New York and Delaware law exists\n\nbecause New York law requires some awareness, if not reliance, on defendant\u2019s\n\nmisrepresentation, and Delaware law does not. 42\n\n Specifically, the Delaware Consumer Fraud Act (\u201cDCFA\u201d) provides, in\n\npertinent part:\n\n The act, use or employment by any person of any deception,\n fraud, false pretense, false promise, misrepresentation . . . in\n connection with the sale, lease or advertisement of any\n merchandise, whether or not any person has in fact been misled,\n deceived or damaged thereby, is an unlawful practice. 43\n\n Accordingly, reliance is not a required element in establishing a\n\nmisrepresentation claim under the DCFA. 44\n\n Under New York State General Business Law Section 349 (\u201cGBL 349\u201d), to\n\nstate a claim for misleading and deceptive business practices, Plaintiffs must show:\n\n First, that the challenged act or practice was consumer-oriented;\n second, that it was misleading in a material way; and third, that\n the plaintiff suffered injury as a result of the deceptive act. 45\n\n41\n Zeneca, 710 F.Supp.2d at 473-75.\n42\n Id. at 474.\n43\n 6 Del. C. \u00a72513.\n44\n See Stephenson v. Capano Dev. Inc., 462 A.2d 1069 (Del. 1983).\n45\n Zeneca, 710 F.Supp.2d at 472 (quoting Vitolo v. Mentor H/S, Inc., 426 F.Supp.2d 28, 33\n(E.D.N.Y. 2006)). For an act to be \u201cdeceptive\u201d under GBL 349, it must be likely to mislead a\nreasonable consumer. Id. (citing Marcus v. AT&T Corp., 128 F.3d 46, 63-64 (2d Cir. 1998).\n 16\n\f Although a New York plaintiff need not prove individual reliance, he must\n\nnevertheless \u201cshow that the defendant\u2019s act caused the complained-of injury.\u201d46\n\nThis requires a showing that the plaintiffs were at least aware of the deceptive\n\nmarketing practice. 47\n\n Plaintiffs contend that there is no conflict between Delaware and New York\n\nlaw with respect to the issue of causation in a consumer fraud claim. 48 This Court\n\ndisagrees. This Court finds the analysis in Zeneca is most persuasive, and agrees\n\nthat an actual conflict exists between Delaware and New York law, specifically\n\nwith respect to the elements of causation in a consumer fraud claim.\n\n Having determined that there is an actual conflict between the laws of the\n\nproposed states with respect to the issue at hand, the Court now turns to its analysis\n\nunder \u00a7148. The Court must first determine the applicable subsection. 49 Finally,\n\nthe Court will weigh this conclusion in accordance with the factors enumerated in\n\n\u00a76.50\n\n In Zeneca, the Court found that the second subsection of \u00a7148 applies to the\n\nalleged consumer fraud in that case, because:\n\n\n46\n Id. (citations omitted).\n47\n Id. (citing Pelman v. McDonald\u2019s Corp., 396 F.Supp.2d 439, 444-46 (S.D.N.Y. 2005)\n(dismissing a class action complaint against a fast food restaurant for allegedly deceptive\nmarketing practices)).\n48\n Pltfs. Opp. Br. at 23-24.\n49\n Zeneca, 710 F.Supp.2d at 470.\n50\n Id.\n 17\n\f [the] alleged misrepresentations underlying plaintiffs\u2019 claims\n were \u2018made\u2019 in Delaware because that is the place where the\n substance of the factual statements emanated. In other words,\n the alleged misrepresentations at issue were made in Delaware\n and then repeated in the Plaintiffs\u2019 home states. 51\n\n\n\nThis Court agrees with the conclusions of the District Court in Zeneca, because the\n\nDistrict Court was confronted with the same attendant facts and circumstances as\n\nare present in this case. Accordingly, the Court will apply the second subsection of\n\n\u00a7148 in conducting its \u201cmost significant relationship\u201d analysis.52\n\n Section 148(2) instructs that the Court must consider factors such as the\n\nlocation where plaintiff received and acted in reliance upon defendant\u2019s\n\nrepresentation, the place where defendant made the representation, the parties\u2019\n\nrespective places of business, and the place where the tangible thing which is the\n\nsubject of the action is located. This Court finds that \u00a7148(2) supports the\n\napplication of New York law to the instant action for the following reasons: (1)\n\nPlaintiffs \u201creceived\u201d Defendants\u2019 representations in New York, because that is\n\nwhere Plaintiffs were located when they paid for Nexium; (2) Plaintiffs \u201cacted in\n\nreliance upon\u201d any allegedly deceptive statements in New York because that is\n\n51\n 710 F.Supp.2d at 470.\n52\n Even if this Court conducted its analysis under \u00a7148(1), and determined that Plaintiffs\u2019 action\nin reliance on Defendants\u2019 alleged false representations took place in Delaware, this Court would\nconclude that New York has a more significant relationship to this action than does Delaware\nunder the principles set forth in Section 6 of the Restatement. Section 148(1) contemplates such\na balancing, and so for the reasons stated, New York law shall apply to this action.\n 18\n\fwhere they reimbursed their members for the purchase of Nexium; and (3)\n\nPlaintiffs\u2019 place of business is New York. 53 Although the Court recognizes that\n\nDefendants\u2019 place of business is Delaware, and the fact that Plaintiffs\u2019 individual\n\nunion members may have purchased Nexium in pharmacies across the country\n\nbefore Plaintiffs reimbursed for said payments, those factors do not outweigh the\n\nfactors which heavily favor the application of New York law to this action.\n\n Consistent with the conclusions of the Zeneca court, this Court finds that the\n\nfactors under \u00a7148 require the application of New York law to Plaintiffs\u2019 claims.\n\nFurther, this Court finds that \u00a76 does not countervail the presumption that New\n\nYork law should apply. GBL 349 represents the New York legislature\u2019s intent to\n\nprotect consumer injury and harm to the public interest in that state. 54 \u201cIn light of\n\nthe strong governmental interest in shielding consumers from fraudulent practices\n\nembodied in GBL 349, New York has at least as strong an interest as Delaware in\n\nhaving its law apply.\u201d 55 This Court agrees with the Zeneca court that \u201ca balancing\n\n\n\n\n53\n See Zeneca, 710 F.Supp.2d at 471 (discussing the application of \u00a7 148(2) to Pennsylvania\nlaw); Id. at 475 n.8 (stating that \u201cthe Court's analysis of the second and third prongs of the\nconflict of laws issue are essentially identical with respect to each Plaintiff's home state\u201d).\n54\n Zeneca, 710 F.Supp at 475 (quoting Maurizio v. Goldsmith, 230 F.3d 518, 522 (2d Cir. 2000)\n(explaining that GBL \u00a7 349 was designed to augment the Attorney General\u2019s power to curtail\ndeceptive trade practices toward consumers, and was later expanded to allow for a private right\nof action).\n55\n Id.\n 19\n\fof the relevant policies of the respective forums supports the conclusion that New\n\nYork maintains the most significant relationship to the instant dispute.\u201d 56\n\n\n B. Application of New York Law\n\n To state a claim for relief under GBL \u00a7 349, the SAC must allege that the\n\ninjury complained of was the result of the deceptive act, practice, or\n\nadvertisement. 57 This Court finds that the SAC fails to meet this standard because\n\nit does not allege that that Plaintiffs purchased Nexium in response to Defendants\u2019\n\nrepresentations concerning the quality of Nexium in relation to Prilosec.58\n\n While it is not necessary under New York law to plead justifiable or\n\nreasonable reliance, Plaintiff must nevertheless show \u201csome awareness\u201d of a\n\ndefendant\u2019s misrepresentation prior to purchasing the product in order to establish\n\nthe element of causation. 59 To plead deceptive advertising to the public, generally,\n\nis insufficient. The SAC does not allege that Plaintiffs ever received such\n\nadvertising, or that Defendants\u2019 alleged misrepresentations ever played a role in\n\ntheir decisions about whether to pay or reimburse for Nexium. Further, the SAC\n\n\n56\n Id.\n57\n Zeneca, 710 F.Supp.2d at 480 (citing Nealy v. U.S. Surgical Corp., 587 F.Supp.2d 579\n(S.D.N.Y. 2008)).\n58\n Because the Court finds Plaintiffs have failed to adequately plead causation, the Court assumes\nwithout deciding that Plaintiffs have standing to pursue their claims under GBL \u00a7 349.\nAdditionally, because the issue of causation is dispositive, the Court does not reach the issue of\nwhether Plaintiffs have adequately pleaded injury within the meaning of GBL \u00a7349.\n59\n Zeneca, 710 F.Supp.2d at 474.\n 20\n\fdoes not contain allegations about what advertisements their members or their\n\nmembers\u2019 physicians may have seen, or that they were misled by the allegedly\n\ndeceptive acts. Therefore, any purported chain of causation that runs from the\n\nallegedly deceptive advertisements that may have influenced the decisions of\n\nindividual doctors to prescribe a drug to their patients to causally affect the payer\n\nunions in this case is simply too attenuated. \u201c[T]here are many factors that a\n\ndoctor may consider in determining what medication to administer to a given\n\npatient,\u201d and \u201cdoctors are presumed to go beyond advertising medium and use their\n\nindependent knowledge in making medical decisions.\u201d 60\n\n Because the Court finds that the complaint has not adequately stated a claim\n\nfor consumer fraud under New York law specifically with regard to the issue of\n\ncausation, those claims must be dismissed.\n\n C. Unjust Enrichment and Negligent Misrepresentation\n\n The Court reaches the same conclusion as in Zeneca with respect to the\n\nclaims for unjust enrichment and negligent misrepresentation.\n\n\n\n\n60\n Southeast Laborers Health & Welfare Fund v. Bayer Corp., 655 F.Supp.2d 1270, 1280-81\n(S.D.Fla. 2009), aff\u2019d, 444 F.App\u2019x. 401, 404 n.1 (11th Cir. 2011) (citing cases from the Southern\nDistrict of West Virginia, the Northern District of California and the Ninth Circuit, the Southern\nDistrict of Illinois, the Middle District of Florida, and the District of New Jersey which follow\nthis approach to causation).\n 21\n\f As to the unjust enrichment claim, this Court finds that there is no conflict of\n\nlaw between the elements of such a claim and thus will apply Delaware law. 61 To\n\nmake out a claim for unjust enrichment, Plaintiffs must allege: (1) an enrichment;\n\n(2) an impoverishment; (3) a relation between the enrichment and impoverishment;\n\n(4) the absence of justification; and (5) the absence of a remedy provided by law. 62\n\nThe Court finds that, for the reasons stated with respect to causation for Plaintiffs\u2019\n\nconsumer fraud claims, Plaintiffs fail to establish a causal connection between the\n\nalleged \u201cenrichment\u201d and the alleged \u201cimpoverishment\u201d in this case. Accordingly,\n\nthe SAC fails to state a claim for unjust enrichment and must, therefore, be\n\ndismissed.\n\n As to the negligent misrepresentation claim, the Court also finds there is no\n\nconflict and will apply Delaware law to the elements of the claim. 63 To make out a\n\nclaim for negligent misrepresentation, Plaintiffs must allege: (1) a pecuniary duty\n\nto provide accurate information; (2) the supplying of false information; (3) failure\n\nto exercise reasonable care in obtaining or communicating information; and (4) a\n\npecuniary loss caused by justifiable reliance upon false information. 64 Further,\n\n\n\n61\n See Zeneca, 710 F.Supp.2d at 477 (citing Powers v. Lycoming Engines 245 F.R.D. 226, 231\n(E.D.Pa. 2007)).\n62\n Nemec v. Schrader, 991 A.2d 1120, 1130-31 (Del. 2010).\n63\n Zeneca, 710 F.Supp.2d at 477-78.\n64\n Id. at 485-86 (citing Atwell v. RHIS, Inc., 2006 WL 268532, at *1 (Del. Super. Ct. Aug. 18,\n2006).\n 22\n\fPlaintiffs must assert that they relied upon the misrepresentation. 65 For the reasons\n\nset forth above, and for those addressed by the District Court in Zeneca, the SAC\n\nfails to allege that Plaintiffs relied upon, or were even aware of, Defendants\u2019\n\nallegedly deceptive marketing campaigns before making reimbursement decisions\n\nfor Nexium. Because the SAC does not allege reliance, the claim for negligent\n\nmisrepresentation must be dismissed.\n\n D. Dismissal is with Prejudice\n\n The Court finds that dismissal with prejudice is appropriate. Plaintiffs have\n\nhad ample opportunity to amend their pleadings since 2004 to cure the defects\n\nidentified in Zeneca. This case was dormant in this Court for over three years. No\n\napplication for reconsideration, re-argument, appeal or otherwise was made by\n\nPlaintiffs in the District Court. Plaintiffs do not proffer any way that they could\n\namend or address the defects described above, but request instead a different result\n\nthan what was reached in the District Court. This Court cannot grant Plaintiffs\u2019\n\nrequest.\n\n\n\n\n65\n Id. at 486 (citing H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129-142-43 (Del. Ch. 2003)).\n 23\n\f V. CONCLUSION\n\n For the reasons stated, this Court finds that Plaintiffs have failed to state a\n\nclaim under applicable law, and Defendants\u2019 motion to dismiss is therefore\n\nGRANTED. The matter is DISMISSED WITH PREJUDICE.\n\n IT IS SO ORDERED.\n\n\n\n\n /s/ Vivian L. Medinilla\n Judge Vivian L. Medinilla\n\n\n\n\n 24\n\f"} -{"text": " FILED\n NOT FOR PUBLICATION OCT 12 2010\n\n MOLLY C. DWYER, CLERK\n UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS\n\n\n\n\n FOR THE NINTH CIRCUIT\n\n\n\nUNITED STATES OF AMERICA, No. 09-30420\n\n Plaintiff - Appellee, D.C. No. 4:07-cr-00032-SEH\n\n v.\n MEMORANDUM *\nROMAN WAYNE ENCINAS,\n\n Defendant - Appellant.\n\n\n\n Appeal from the United States District Court\n for the District of Montana\n Sam E. Haddon, District Judge, Presiding\n\n Submitted September 13, 2010 **\n\nBefore: SILVERMAN, CALLAHAN, and N.R. SMITH, Circuit Judges.\n\n Roman Wayne Encinas appeals from the 110-month sentence imposed\n\nfollowing his guilty-plea conviction for conspiracy to distribute methamphetamine,\n\nin violation of 21 U.S.C. \u00a7 846. Pursuant to Anders v. California, 386 U.S. 738\n\n(1967), Encinas\u2019 counsel has filed a brief stating there are no grounds for relief,\n\n *\n This disposition is not appropriate for publication and is not precedent\nexcept as provided by 9th Cir. R. 36-3.\n **\n The panel unanimously concludes this case is suitable for decision\nwithout oral argument. See Fed. R. App. P. 34(a)(2).\n\falong with a motion to withdraw as counsel of record. We have provided the\n\nappellant with the opportunity to file a pro se supplemental brief. No pro se\n\nsupplemental brief or answering brief has been filed.\n\n Our independent review of the record pursuant to Penson v. Ohio, 488 U.S.\n\n75, 80-81 (1988), discloses no arguable grounds for relief as to Encinas\u2019\n\nconviction. We dismiss the appeal of the sentence in light of the valid appeal\n\nwaiver. See United States v. Nguyen, 235 F.3d 1179, 1182 (9th Cir. 2000).\n\n Counsel\u2019s motion to withdraw is GRANTED.\n\n The conviction is AFFIRMED, and the appeal of the sentence is\n\nDISMISSED.\n\n\n\n\n 2 09-30420\n\f"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n\n No. 97-7199\n\n\n\nUNITED STATES OF AMERICA,\n\n Plaintiff - Appellee,\n\n versus\n\n\nKEVIN RODELL JOHNSON, a/k/a Chucky,\n\n Defendant - Appellant.\n\n\n\nAppeal from the United States District Court for the Eastern Dis-\ntrict of Virginia, at Alexandria. Albert V. Bryan, Jr., Senior\nDistrict Judge. (CR-95-319-A)\n\n\nSubmitted: December 11, 1997 Decided: December 31, 1997\n\n\nBefore HALL and WILLIAMS, Circuit Judges, and PHILLIPS, Senior\nCircuit Judge.\n\n\nAffirmed by unpublished per curiam opinion.\n\n\nKevin Rodell Johnson, Appellant Pro Se. Leslie Bonner McClendon,\nOFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for\nAppellee.\n\n\nUnpublished opinions are not binding precedent in this circuit.\nSee Local Rule 36(c).\n\fPER CURIAM:\n\n Appellant appeals the district court's order denying his\n\nmotion for a new trial under Fed. R. Crim. P. 33. We have reviewed\n\nthe record and the district court's opinion and find no reversible\n\nerror. Accordingly, we affirm on the reasoning of the district\n\ncourt. United States v. Johnson, No. CR-95-319-A (E.D. Va. July 23,\n1997). We dispense with oral argument because the facts and legal\n\ncontentions are adequately presented in the materials before the\n\ncourt and argument would not aid the decisional process.\n\n\n\n\n AFFIRMED\n\n\n\n\n 2\n\f"} -{"text": "\n976 So.2d 526 (2006)\nDAVID L. LUCAS\nv.\nSTATE.\nNo. CR-05-0021.\nCourt of Criminal Appeals of Alabama.\nJanuary 6, 2006.\nDecision of the Alabama Court of Criminal Appeal Without Opinion. Reh. denied.\n"} -{"text": "\n63 Wn.2d 384 (1963)\n387 P.2d 541\nGEORGE COSON, Respondent,\nv.\nREUBEN R. ROEHL et al., Appellants.[*]\nNo. 36497.\nThe Supreme Court of Washington, En Banc.\nDecember 12, 1963.\nStephen E. Chaffee and Kenneth C. Hawkins, for appellants.\nTonkoff, Holst & Hopp, for respondent.\nWEAVER, J.\nDefendants appeal from a money judgment against them. The judgment is based on an alleged breach of a written contract dated October 27, 1959.\nPlaintiff sells building materials. October 27, 1959, three of plaintiff's agents negotiated with defendants to sell them materials and labor to install ceramic siding and to reroof their residence. The agents used an ancient sales canard: *385 when completed, defendants' residence would be a bellwether for additional sales.[1]\nUpon conflicting evidence, the trial court found (and we cannot disturb the findings): (a) defendants stated to plaintiff's agents \"... that $3,500.00 was all that they could afford and would agree to pay\"; (b) plaintiff's agents told defendants that plaintiff company would furnish the labor and materials and perform according to the contract for a total price of $3,500.00; and \"... that the plaintiff would absorb the sales tax and other charges so that the total the defendants would be required to pay would be $3,500.00.\" (Italics ours.)\nIn the presence of defendants, \"$3500.00 inc. tax\" was inserted in the appropriate blank of the printed contract. At the same time, the figures \"60\" and \"$71.88\" were inserted so that the contract provided for 60 monthly installments of $71.88. Both entries were made in ink. Defendants were led to believe that the monthly installments totaled $3,500.00; in fact, they total $4,312.80. The space for \"Finance Charge\" was left blank.\nIn the absence of defendants, plaintiff caused to be entered on the contract (in pencil) a finance charge of $812.80, thus making the total $4,312.80.\nThe same evening the contract was signed, defendants computed the total of monthly payments ($4,312.80) and later refused to allow plaintiff to perform the work.\nThe contract contains the following clause:\n*386 \"... this [agreement] shall constitute the entire contract and be binding upon the parties hereto, as there are no covenants, promises or agreements, written or oral, except as herein set forth....\"\nThe trial judge was well aware of this court's decision in Haagen v. Landeis, 56 Wn. (2d) 289, 352 P. (2d) 636 (1960). He had tried that case also; our decision had been filed for publication 11 days prior to the trial of the instant case.\nAfter trial, the judge announced his oral ruling. He analyzed the facts and concluded:\n\"... the court is finding that fraud is here and vitiated the contract. The judgment will be for the defendants.\"\nIn reaching this conclusion, the judge observed:\n\"... the court is still adhering to the rule, unless and until the recent case of Haagen v. Landeis, 156 W.D. 301 [the remittitur had not yet been sent down by this court and the possibility of a petition for rehearing had not been determined], becomes definitely the law, that fraud vitiates the entire contract, and notwithstanding the provision in the contract that there are no understandings or agreements that are not contained in writing in the contract, that nevertheless fraud can be shown and if shown vitiates the contract. Now, if our Supreme Court does in fact abandon that rule, of course the court will have to change its ruling here because that is the basis of the court's ruling.\" (Italics ours.)\nPetition for rehearing in Haagen was denied November 10, 1960. Subsequently (the date does not appear in the record before us), the trial judge filed a written memorandum opinion in which he again recognized that plaintiff's agents were guilty of fraud when they stated to defendants that $3,500.00 was all they would be required to pay. The trial judge said:\n\"... It was the defendants' testimony that it was agreed that they would not be required to pay finance charges. The contract contained a clause providing in part:\n\"`* * * * this shall constitute the entire contract and be binding upon the parties hereto, as there are no covenants, promises, or agreements, written or oral, except as herein set forth.'\n*387 \"The court held that despite this clause, fraud vitiated the contract. The court further stated however, that the case of Haagen v. Landeis, 56 Wn. (2d) 289, which was then pending in the Supreme Court (petition for a rehearing having been filed) would control when finally determined. The petition for a rehearing in that case has been denied. Our court in the Haagen case, supra held:\n\"`The oral representations upon which the respondents relied were not contained in the agreement and, in fact, contradicted the plain and unambiguous provision thereof. Therefore, the respondents had no right to rely upon the oral representations. See Kelly v. Von Herberg, 184 Wash. 165; 50 Pac. (2d) 23, (1935). The trial court erred in finding fraud.'\n\"Under the rule of the Haagen case, supra, the defendants may not rely upon the oral representation which they claim constituted fraud.\n\"Plaintiff will, therefore, be awarded judgment.\"\nIn view of our holding in Haagen the trial judge had no choice. He entered a conclusion of law upon which judgment is based:\n\"That the defendants were not entitled to rely upon the representation of the plaintiff's agents that the total amount called for by the contract was $3,500.00.\"\nIn Webster v. L. Romano Engineering Corp., 178 Wash. 118, 34 P. (2d) 428 (1934) and in a plethora of decisions citing it, the court set forth the nine essential elements of fraud, all of which must be established by clear, cogent, and convincing evidence. In the instant case, we are concerned only with the eighth element \u0097 the right of defendants to rely upon the false and fraudulent representation.\nHaagen v. Landeis, supra (four judges signed the majority opinion; four dissented; one concurred in the result), is authority for the trial court's conclusion that, in the face of a merger clause in the contract, as a matter of law, defendants were not entitled to rely upon the fraudulent representations of plaintiff's agents.\n[1] Recently, this court had occasion to notice that there has been a\n\"... marked change in judicial attitude during the last half century toward the question of justifiable reliance. *388...\" Johnson v. Olsen, 62 Wn. (2d) 133, 135, 381 P. (2d) 623 (1963).\nWe believe that Haagen sub silentio overruled at least seven prior decisions of this court.[2] To the extent that it is inconsistent with the general rule that a merger clause in a written contract does not foreclose the right to prove fraud, it is overruled.\nRestatement, Contracts \u00a7 573, uses the following example:\n\"2. A and B enter into a written bargain that contains a clause stating that no representations not therein contained have been made. Fraudulent misrepresentations not contained in the writing in fact induced its formation. The bargain is voidable and an action can be maintained for deceit, the clause intended to exclude the assertion of fraud being illegal.\"\nThe policy reasons behind the majority rule are discussed in the classic case of Angerosa v. White Co., 248 App. Div. 425, 290 N.Y.S. 204 (1936):\n\"... To deny relief to the victim of a deliberate fraud because of his own negligence would encourage falsehood and dishonesty ...\n\"...\n\"... In this jurisdiction protection is given to one who is injured by falsehood or deception; fraud vitiates everything which it touches, and destroys the very thing which it was devised to support; the law does not temporize with trickery or duplicity. A contract, the making of which was induced by deceitful methods or crafty device, is nothing more than a scrap of paper, and it makes no difference whether the fraud goes to the factum, or whether it is preliminary to the execution of the agreement itself....\"\n[2] Plaintiff argues that the contract shows on its face that defendants were to pay $71.88 per month for a period *389 of 60 months. The product of these figures ($4,312.80) would have been apparent to defendants had they been facile with mental arithmetic. This, of course, is in direct conflict with the written price of $3,500.00, defendants' insistence that they would pay no more, and the agents' representations that $3,500.00 would include all charges. Misrepresentations frequently have the effect of causing the other party to fail to use the means of knowledge within his power.\nOne authority said:\n\"... The modern tendency is certainly toward the doctrine that failure to use available means of knowledge because of reliance on misrepresentation, even negligent failure to use them, because of trusting to a misrepresentation, will not excuse positive wilful fraud or deprive the defrauded person of his remedy....\" 3 Williston on Sales (rev. ed.) \u00a7 634.\nWe conclude, as did the trial court in the first instance, that fraud vitiates the contract, and that defendants are not foreclosed by the merger clause of the contract from placing reliance upon the fraudulent representations.\nThe judgment is reversed.\nDONWORTH, ROSELLINI, HUNTER, HAMILTON, and HALE, JJ., concur.\nHILL, J. (concurring in the result)\nI concur in the result. There is no question but that fraud vitiates a contract; and that, as a general rule, a party to a written contract is not foreclosed by a merger clause from proving fraudulent representations made by the other party, or his agent acting within the scope of his authority.\nI cannot agree with the majority in its statement that, in view of our holding in Haagen v. Landeis (1960), 56 Wn. (2d) 289, 352 P. (2d) 636, the trial court had no alternative but to enter the judgment we are now reversing. The majority, in its treatment of the Haagen case, sets up a straw man and, then, proceeds with a devastating demolition.\n*390 It was never intended that Haagen should overrule sub silentio or any other way the cases enumerated in footnote 2 of the majority opinion, or that it would apply in a case like the present, where no one questions the authority of the agents who made the representations relied on.\nHaagen has a very limited application, so far as the merger clause is concerned, and relates to cases where the issue is the authority on the part of an agent (whose misrepresentation is the basis of the claimed fraud) to vary by parol the plain and unambiguous provisions of a written application prepared by his principal. None of the cases listed in the footnote to which we have referred presents such an issue.\nHaagen was an action to recover the agreed price of certain advertising. The defendants testified that certain misrepresentations were made by an agent who was urging them to list their properties for sale in a publication called the \"National Buyers' Guide.\" The merger clause[3] in no way limited the defendants in their proof. The issue was whether, having signed a short and simple application (set out in full in the opinion) for space in that publication, which application clearly stated the amount to be paid and the time of payment, the defendants were entitled to rely on representations by the agent which were that they would not have to pay for the advertising unless they sold their property.\nThe defendants knew that they were dealing with an agent, and their contention was that he had apparent authority to vary the terms of the application for advertising. There was no evidence of any such authority, except the representations of the agent.\nThe representations by the agent were not about something extraneous to the writing, but in effect were that the plain and unambiguous provisions relative to payment, contained in the application, did not mean what they said. *391 It is difficult to see how a publishing company could do more to make clear the limitation on the authority of an agent soliciting advertising than by limiting the agreement with the advertiser to the application which the advertiser signed. This was not a contract until the application was accepted by the publishing company, and the advertiser could have refused to sign the application unless it contained the terms to which he agreed. The publishing company had nothing to act upon except the application submitted to it.\nThere is still another reason why the Haagen case was correctly decided. The defendants \u0097 after the application for advertising space had been sent to the publishing company \u0097 notified that company of the claimed representations by its agent and, then, within 2 or 3 days after this notification, the defendants sent the company the following letter:\n\"`This note is [to] cancel expressed misunderstanding recently sent you. Please continue service on regular schedule.'\"\nThe Haagen opinion states:\n\"... The letter withdrew respondents' previous objections to the contract as written and requested performance as provided therein.\"\nHaagen held:\n1. To prove fraud, the person claiming a misrepresentation must prove that he had a right to rely thereon.\n2. Where the claimed misrepresentation is made by one known to be an agent, there can be no right to rely thereon, unless the agent was acting within the apparent scope of his authority.\n3. Under the circumstances of the case, there being no evidence of apparent authority to vary the printed application for advertising except the fact of agency, the statement in the application that\n\"... `This Agreement contains the entire understanding between us and no representation or inducement has been made that is not set forth herein.' ...\" *392 conclusively negated the claimed apparent authority of the agent to modify the application orally. (The word \"conclusively\" was properly used in that case because there was no evidence to the contrary.)\n4. The persons claiming fraudulent representations had failed to prove their right to rely thereon by clear, cogent, and convincing evidence.\n5. The persons claiming misrepresentations had specifically withdrawn their objection to the agreement claimed to be procured by fraud.\nIn my opinion, Haagen was correctly decided. Two statements in that opinion, taken out of context, are the reason for its repudiation by the majority:\nA. Since the oral representations, upon which defendants relied, were not contained in the agreement and, in fact, contradicted the plain and unambiguous provisions thereof, they had no right to rely thereon.\nB. The written agreement conclusively negates the alleged apparent authority of the agent to modify the agreement orally.\n\"A\" would not be an accurate statement, if the representations had been made by a party to the agreement or by an agent whose authority to make them was not questioned, or by an agent who had apparent authority to make them. Considered in the context, the defendants in Haagen had no right to rely upon such representations because the agent had no apparent authority to make them. Actually, the merger clause alone is unimportant to a cause of action for fraud, except to the extent that it, together with other language in the contract, shows an absence of apparent authority (as in Haagen), or the presence of that authority, which is conceded in the instant case.\nWith reference to \"B,\" we have already commented on the justification for the use of the word \"conclusively.\"\nThe court has properly decided this case upon its facts, as it did the Haagen case upon its facts.\nOTT, C.J., concurs with HILL, J.\n*393 FINLEY, J. (concurring in the result)\nI concur in the result for the reasons stated in my dissent in Haagen v. Landeis (1960), 56 Wn. (2d) 289, 352 P. (2d) 636. The apparent authority of the agent of the seller is material only where the buyer is attempting to hold the principal on a warranty, made by the agent but excluded in the written contract. It is immaterial if the seller is seeking enforcement of a contract whereby he would benefit through the fraud of his agent.\nNOTES\n[*] Reported in 387 P. (2d) 541.\n[1] Mr. Roehl (defendant) testified:\n\n\"... they made the stipulation that they would make us a good deal if we will let them take pictures of before and after on the house and later on show people the place.\"\nMrs. Roehl (defendant) testified:\n\"... they told us that they could give us a real good cheap job, they said a cheap job but a good job, if we would allow them to use our home as a before-and-after advertisement on TV. We had no objection to that and also I believe it was Mr. Brown who said that they would bring people past our house out on the street, they wouldn't bother us, but they would bring them past to show our house which is in need of paint, they would see the difference in it and they expected Mr. Ayers to get quite a few sales in Sunnyside from it because they could see the improvement that the siding made on our house.\"\n[2] Becker v. Lagerquist Bros., Inc., 55 Wn. (2d) 425, 348 P. (2d) 423 (1960); Nyquist v. Foster, 44 Wn. (2d) 465, 268 P. (2d) 442 (1954); Gronlund v. Andersson, 38 Wn. (2d) 60, 227 P. (2d) 741 (1951); Peoples Bank & Trust Co. v. L. Romano Engineering Corp., 188 Wash. 290, 62 P. (2d) 445 (1936); Producers' Grocery Co. v. Blackwell Motor Co., 123 Wash. 144, 212 Pac. 154 (1923); Schroeder v. Hotel Commercial Co., 84 Wash. 685, 147 Pac. 417 (1915); Union Inv. Co. v. Rosenzweig, 79 Wash. 112, 139 Pac. 874 (1914).\n[3] The merger clause in the application for the advertising read: \"`This Agreement contains the entire understanding between us and no representation or inducement has been made that is not set forth herein.'\"\n"} -{"text": " United States Court of Appeals\n For the First Circuit\n\n\nNo. 15-1667\n\n JEANNETTE BUNTIN,\n\n Plaintiff, Appellant,\n\n v.\n\n CITY OF BOSTON; JAMES MCGONAGLE; SCOTT ALTHER,\n\n Defendants, Appellees.\n\n\n APPEAL FROM THE UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF MASSACHUSETTS\n\n [Hon. Richard G. Stearns, U.S. District Judge]\n\n\n Before\n\n Kayatta, Stahl, and Barron,\n Circuit Judges.\n\n\n W.Kendall, with whom Law Office of W.Kendall was on brief,\nfor appellant.\n Nicole M. O'Connor, Assistant Corporation Counsel, with whom\nEugene L. O'Flaherty, Corporation Counsel, and City of Boston Law\nDepartment were on brief, for appellees.\n\n\n December 29, 2015\n\f STAHL, Circuit Judge. Jeannette Buntin's late father,\n\nOswald Hixon, was formerly employed as a mechanic by the City of\n\nBoston (\"City\"). Buntin, proceeding as the administratrix of\n\nHixon's estate, brought suit alleging that the City and Hixon's\n\nsupervisors, James McGonagle and Scott Alther, discriminated\n\nagainst Hixon on the basis of his race and retaliated against him\n\nby terminating his employment.1 Concluding that Buntin had not\n\npled facts sufficient to support one claim and had failed to timely\n\nexhaust the administrative prerequisites necessary to bring suit\n\non another claim, the district court dismissed Buntin's complaint.\n\nAfter careful review, we AFFIRM in part and REVERSE in part.\n\n I. Facts and Background\n\n We set forth the facts as alleged in Buntin's complaint.\n\nHixon, who is black, was hired by the City in 2002 to work as a\n\nmechanic at the City's public works facility. At all relevant\n\ntimes, Hixon's immediate supervisors were Alther and McGonagle,\n\nboth of whom are white. In 2007, Hixon failed a random drug and\n\nalcohol test and was put on probation and required to undergo\n\ncounselling. Hixon protested his selection for the test, which he\n\nsuggested was made on the basis of race.\n\n Roughly four years later, on Friday, February 4, 2011,\n\nAlther and McGonagle issued Hixon a written warning for bringing\n\n\n 1 At points, we refer to the City, Alther, and McGonagle\ncollectively as the \"Defendants.\"\n\n\n - 2 -\n\fhis personal vehicle into a City garage for repairs in violation\n\nof a City policy. Hixon protested the warning \"vociferously\" and\n\npointed out to Alther and McGonagle that white employees had\n\nviolated the same policy (and other City policies in place at the\n\ntime) without consequence.\n\n The following Monday, February 7, 2011, Hixon returned\n\nto work and was informed that he had been suspended. Then, on\n\nFebruary 10, Hixon was notified that he had been terminated based\n\non a purported violation of the City's drug and alcohol policy, an\n\nexplanation that the complaint alleges was both untrue and merely\n\na pretext for unlawful discrimination and retaliation.2\n\n In January 2013, Hixon filed an application for\n\nunemployment benefits with the Massachusetts Department of\n\nUnemployment Assistance (\"DUA\"). Alther and McGonagle appeared at\n\na series of ensuing hearings and allegedly testified falsely that\n\nHixon had been under the influence of controlled substances at\n\nwork and had refused to submit to a drug and alcohol test.3 Soon\n\n\n 2 The complaint contains a number of allegations relating\nto Hixon's membership in a union of City employees and the union's\nfailure to pursue grievances that he filed relating to the 2007\nand 2011 incidents. Because Hixon did not bring suit against the\nunion, we view these allegations as relevant only to provide\ncontext to Hixon's claims against the Defendants.\n\n 3 Although not in the record before us, Buntin\nrepresented at oral argument that Hixon was vindicated in an appeal\nof the DUA proceedings before the Boston Municipal Court, which\nawarded him benefits and found that he had not been under the\ninfluence while at work.\n\n\n - 3 -\n\fthereafter, Hixon applied for reinstatement with the City, but was\n\nnot offered a job.\n\n Thereafter, on December 13, 2013, Hixon filed a charge\n\nwith the Massachusetts Commission Against Discrimination (\"MCAD\"),\n\nwhich dismissed his charge as untimely.4 Hixon passed away in\n\n2014, and Buntin was appointed as the administratrix of his estate.\n\n Buntin brought this lawsuit on behalf of Hixon's estate\n\non February 6, 2015 in Massachusetts Superior Court, asserting a\n\ntotal of seventeen claims against the Defendants under both state\n\nand federal law. While the complaint is confusing at times,\n\nBuntin's federal claims appear to arise under 42 U.S.C. \u00a7\u00a7 1981\n\n(\"Section 1981\") and 1983 (\"Section 1983\"). As we read it, the\n\nSection 1981 claim alleges that the Defendants discriminatorily\n\nterminated Hixon on the basis of race and, separately, retaliated\n\nagainst him by suspending him and terminating his employment for\n\nprotesting his discriminatory treatment.5 The Section 1983 claim\n\n\n 4 Later, on January 11, 2014, Hixon filed a second MCAD\ncharge premised on the allegedly untrue testimony of Alther and\nMcGonagle at the January 2013 DUA hearings. This charge too was\ndismissed as untimely.\n\n 5 In addition, one could perhaps tease out from the\ncomplaint a Section 1981 claim premised on the Defendants' creation\nof a hostile work environment, but we find any such claim to be\nboth inadequately pled and entirely undeveloped on appeal. See,\ne.g., Edwards v. Prime, Inc., 602 F.3d 1276, 1300 (11th Cir. 2010)\n(noting that a hostile work environment claim requires the\nplaintiff to allege that the harassment endured was \"severe or\npervasive enough to alter the terms and conditions of employment\nand create a hostile or abusive working environment\").\n\n\n - 4 -\n\fappears to be premised on the same allegations of discrimination\n\nand retaliation, as well as the City's failure to provide Hixon\n\nwith a \"name-clearing hearing\" after Alther and McGonagle's\n\ntestimony at the 2013 DUA hearings impugned his reputation. The\n\nDefendants promptly removed the suit to the district court and\n\nthen moved to dismiss pursuant to Federal Rule of Civil Procedure\n\n12(b)(6).\n\n In ruling on the motion to dismiss, the district court\n\nconsidered only the federal claims. Buntin v. City of Boston, No.\n\n15-10556-RGS, 2015 U.S. Dist. LEXIS 60561 (D. Mass. May 8, 2015).\n\nThe district court concluded that the Section 1981 claim must be\n\ndismissed because Buntin failed to exhaust her administrative\n\nremedies by filing a timely charge of discrimination with the MCAD\n\nbefore bringing suit. Id. at *10. With respect to the Section\n\n1983 claim, the district court concluded that it too must be\n\ndismissed because Buntin failed to plead facts sufficient to\n\nsupport the claim. Id. at *10-11.\n\n II. Discussion\n\n We review the district court's dismissal of a complaint\n\nfor failure to state a claim de novo. Cardigan Mountain Sch. v.\n\nN.H. Ins. Co., 787 F.3d 82, 84 (1st Cir. 2015). In doing so, we\n\nassume the truth of Buntin's factual allegations and draw all\n\nreasonable inferences in her favor. Id. at 87. To survive a\n\nmotion to dismiss, the complaint must contain sufficient factual\n\n\n - 5 -\n\fmatter, accepted as true, to state a claim to relief that is\n\n\"plausible on its face.\" Id. at 84 (quoting Ashcroft v. Iqbal,\n\n556 U.S. 662, 678 (2009)). We are not wedded to the district\n\ncourt's reasoning; rather, we may affirm the dismissal of a claim\n\non any basis made evident by the record. Rocket Learning, Inc. v.\n\nRivera-S\u00e1nchez, 715 F.3d 1, 8 (1st Cir. 2013).\n\n A. Section 1981\n\n Section 1981 provides, in relevant part, that \"[a]ll\n\npersons within the jurisdiction of the United States shall have\n\nthe same right . . . to make and enforce contracts . . . and to\n\nthe full and equal benefit of all laws and proceedings . . . as is\n\nenjoyed by white citizens . . . .\" 42 U.S.C. \u00a7 1981(a). Buntin's\n\ncomplaint alleges that the Defendants violated Section 1981 by\n\nsuspending Hixon on February 7, 2011, and terminating him on\n\nFebruary 10, 2011, both on account of his race and as retaliation\n\nfor his having complained that his treatment on February 4, 2011\n\nwas discriminatory. As we have said, the district court dismissed\n\nthis claim solely on the grounds that Hixon failed to file a charge\n\nof discrimination with the MCAD in a timely manner prior to\n\nbringing suit.\n\n In doing so, however, the district court appears to have\n\nconflated the administrative exhaustion requirements imposed by\n\nTitle VII of the Civil Rights Act of 1964, 42 U.S.C. \u00a7 2000e et\n\nseq., with Section 1981, which has no such exhaustion requirement.\n\n\n - 6 -\n\fCompare Aly v. Mohegan Council, Boy Scouts of Am., 711 F.3d 34, 41\n\n(1st Cir. 2013) (noting that a Title VII plaintiff must file a\n\ncharge of discrimination with the MCAD within 300 days of the\n\nalleged unlawful act prior to bringing suit) (citing 42 U.S.C.\n\n\u00a7 2000e-5(e)(1)), with Fane v. Locke Reynolds, LLP, 480 F.3d 534,\n\n539 (7th Cir. 2007) (observing that Section 1981 does not require\n\nadministrative exhaustion). Thus, the district court erred when\n\nit imputed an administrative exhaustion requirement to Section\n\n1981 and dismissed Buntin's claim for failure to comply with that\n\nrequirement.\n\n To the Defendants' credit, they do not argue that the\n\ndistrict court's dismissal should be affirmed on the basis of\n\nadministrative exhaustion. Rather, they urge that we affirm either\n\nbecause the Section 1981 claim was not brought within its statute\n\nof limitations, or because the claim was premised merely on\n\nconclusory allegations. We reject both arguments.\n\n As an initial matter, we find that Buntin's Section 1981\n\nclaim was brought within the applicable four-year statute of\n\nlimitations. Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369,\n\n382 (2004). Hixon was issued a written warning on February 4,\n\n2011 for bringing his personal vehicle into a City garage for\n\nrepairs, discipline that he protested on grounds that it was\n\napplied to him in a discriminatory manner. It was not until\n\nFebruary 7, 2011, however, that Hixon returned to work and learned\n\n\n - 7 -\n\fthat he had been suspended, and it was not until February 10, 2011\n\nthat he was fired. These dates are important because Buntin filed\n\nher lawsuit almost exactly four years later on February 6, 2015.\n\n The Defendants insist that the statute of limitations\n\nbegan to run on February 4, 2011, when Hixon received a written\n\nwarning. But, claims for discrimination and retaliation accrue\n\nwhen the alleged unlawful act \"has a crystallized and tangible\n\neffect on the employee and the employee has notice of both the act\n\nand its invidious etiology.\" Shervin v. Partners Healthcare Sys.,\n\nInc., 804 F.3d 23, 33 (1st Cir. 2015). Here, Hixon did not learn\n\nof his suspension and termination, the alleged unlawful acts, until\n\nFebruary 7 and 10, respectively. Therefore, Buntin's lawsuit,\n\nlaunched just as time was about to expire on February 6, 2015,\n\nbeat the statute of limitations buzzer (albeit just barely).\n\n The Defendants next argue that Buntin's complaint should\n\nbe dismissed because it relies solely on conclusory allegations.\n\nWe disagree. Buntin's complaint sets forth, in fairly significant\n\ndetail, the specific facts and circumstances surrounding the\n\nevents of February 4 through 10, 2011, during which time Hixon was\n\nallegedly disciplined in an unlawfully discriminatory manner, then\n\nsuspended and terminated discriminatorily and in retaliation for\n\nhaving protested his disparate treatment. These allegations are\n\n\"specific and factual,\" and they plausibly suggest that Buntin is\n\nentitled to relief on a Section 1981 claim for discriminatory\n\n\n - 8 -\n\ftermination and retaliation. Cardigan Mountain Sch., 787 F.3d at\n\n84, 87.\n\n In sum, because the district court erred by imposing an\n\nadministrative exhaustion requirement where none exists, and\n\nbecause we reject the alternative bases for dismissal proffered by\n\nthe Defendants, we REVERSE the district court's dismissal of\n\nBuntin's Section 1981 claim.\n\n B. Section 1983\n\n Section 1983 provides a cause of action for the\n\n\"deprivation of any rights, privileges, or immunities secured by\n\nthe Constitution and laws\" by any person acting under color of\n\nstate law. 42 U.S.C. \u00a7 1983. Buntin's Section 1983 claim is\n\nsubject to a three-year statute of limitations. See Poy v.\n\nBoutselis, 352 F.3d 479, 483 (1st Cir. 2003) (citing Mass. Gen.\n\nLaws ch. 260, \u00a7 2A and explaining that Section 1983 \"borrows\" state\n\nstatutes of limitations for personal injury claims).\n\n As we have said, Buntin's complaint is unclear at points.\n\nNevertheless, we discern two possible bases for the Section 1983\n\nclaim: (1) Hixon's suspension and termination; and (2) the City's\n\nfailure to give Hixon a \"name-clearing hearing\" after Alther and\n\nMcGonagle impugned his character by allegedly testifying falsely\n\nat Hixon's DUA hearings in January 2013. We conclude, however,\n\nthat under either theory, dismissal is required.\n\n\n\n\n - 9 -\n\f To the extent that the Section 1983 claim is premised on\n\nHixon's alleged unlawful suspension and termination, any such\n\nclaim was indisputably brought more than three years after it\n\naccrued. To reiterate the point, Hixon's suspension and\n\ntermination took place in February 2011, and Buntin's complaint\n\nwas filed some four years later.\n\n On the other hand, a Section 1983 claim premised on the\n\nJanuary 2013 testimony of Alther and McGonagle would have been\n\nbrought within the three-year statute of limitations. However,\n\nany such claim would fail on its merits. \"[W]here a public-sector\n\nemployer creates and disseminates a false and defamatory\n\nimpression about an employee in connection with the employee's\n\ndischarge. . . . the Constitution's due process protections require\n\nthe employer to provide the employee with an opportunity to dispute\n\nthe defamatory allegations.\" Wojcik v. Mass. State Lottery Comm'n,\n\n300 F.3d 92, 103 (1st Cir. 2002) (citations omitted). Indeed, the\n\n\"failure to provide an adequate name-clearing forum is actionable\n\nunder [Section 1983].\" Id.; see also Burton v. Town of Littleton,\n\n426 F.3d 9, 14-15 (1st Cir. 2005). Nevertheless, a Section 1983\n\nclaim premised on the failure to afford a name-clearing hearing\n\nrequires that the employee satisfy five elements: (1) the alleged\n\ndefamatory statement must seriously damage the employee's standing\n\nand association in the community; (2) the employee must dispute\n\nthe statement as false; (3) the statement must have been\n\n\n - 10 -\n\fintentionally publicized by the government; (4) the stigmatizing\n\nstatement must have been made in conjunction with an alteration of\n\nthe employee's legal status, such as the termination of his\n\nemployment; and (5) the government must have failed to comply with\n\nthe employee's request for a name-clearing hearing. Wojcik, 300\n\nF.3d at 103 (citations omitted).\n\n As we must, we assume the truth of Buntin's factual\n\nallegations and we draw all reasonable inferences in her favor.\n\nCardigan Mountain Sch., 787 F.3d at 87. Yet, even after doing so,\n\nthe complaint fails to allege any facts whatsoever establishing\n\nthe third, fourth, and fifth elements of a Section 1983 claim\n\npremised on the denial of a name-clearing hearing. As an initial\n\nmatter, there is no allegation that the City publicized the\n\ndefamatory statements beyond the DUA hearings at which they were\n\nmade. What is more, the complaint itself establishes that the\n\nalleged defamatory statements were not made in conjunction with an\n\nalteration in Hixon's employment status. Rather, they were made\n\nsome two years after his termination at a hearing regarding Hixon's\n\nentitlement to unemployment benefits. Perhaps most importantly,\n\nthe complaint does not suggest that the City denied Hixon a name-\n\nclearing hearing, or that Hixon even requested one in the first\n\nplace.\n\n\n\n\n - 11 -\n\f Thus, whether premised on Hixon's 2011 termination or on\n\nthe testimony of Alther and McGonagle at the 2013 DUA hearings,\n\nBuntin's Section 1983 claim was properly dismissed.\n\n III. Conclusion\n\n For the reasons we have described, dismissal of the\n\nSection 1983 claim is AFFIRMED, dismissal of the Section 1981 claim\n\nis REVERSED, and the case is REMANDED to the district court for\n\nfurther proceedings consistent with this opinion.6 Costs are taxed\n\nin favor of the plaintiff-appellant Jeannette Buntin.\n\n\n\n\n 6 Buntin's complaint and brief make passing reference to\nTitle VII, which prompted the City in its brief to dispute the\nviability of any potential Title VII claim. Although it is far\nfrom clear that Buntin is in fact pursuing a Title VII claim, we\nnote that any such claim is foreclosed based on Hixon's failure to\nfile a charge of discrimination with the MCAD within 300 days of\nhis suspension and termination. See Aly, 711 F.3d at 41 (\"Failure\nto exhaust [the] administrative process [of filing an MCAD charge]\n'bars the courthouse door.'\" (quoting Jorge v. Rumsfeld, 404 F.3d\n556, 564 (1st Cir. 2005))).\n\n\n - 12 -\n\f"} -{"text": " UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS\n\n No. 16-2333\n\n HANK M. SMIDDY, APPELLANT,\n\n V.\n\n ROBERT L. WILKIE,\n SECRETARY OF VETERANS AFFAIRS, APPELLEE.\n\n On Appeal from the Board of Veterans' Appeals\n\n (Decided May 28, 2020)\n\n Amy F. Odom and Barton F. Stichman, both of Washington, D.C., and James D. Arden,\nof New York, New York, were on the brief for the appellant.\n\n Meghan Flanz, Interim General Counsel; Mary Ann Flynn, Chief Counsel; Carolyn F.\nWashington, Deputy Chief Counsel; and Laura R. Braden, all of Washington, D.C., were on the\nbrief for the appellee.\n\n Before PIETSCH, GREENBERG, and MEREDITH, Judges.\n\n PIETSCH, Judge: The appellant, Hank M. Smiddy, appeals through counsel a March 17,\n2016, Board of Veterans' Appeals (Board) decision that denied a disability rating higher than 10%,\non an extraschedular basis, for status post left inguinal hernia repair with ilioinguinal nerve\nentrapment (inguinal hernia repair residuals). Record (R.) at 2-19. This appeal is timely, and the\nCourt has jurisdiction to review the Board's decision pursuant to 38 U.S.C. \u00a7\u00a7 7252(a) and 7266(a).\nThis case concerns the legal analysis that the Board conducts after receiving an extraschedular\ndecision from the director of the Compensation Service (Director) under 38 C.F.R. \u00a7 3.321(b)(1)\n(2015).\n On January 19, 2018, the Court submitted this matter to a panel for consideration. On\nMarch 12, 2018, the Court received the parties' supplemental briefs. The following month, the\nappellant filed a motion for oral argument, which the Secretary opposed. The Court concludes\nthat oral argument will not materially assist its deliberations. See O'Brien v. Wilkie, 30 Vet.App.\n21, 24 (2018). The appellant's motion is therefore denied.\n\f For the reasons that follow, the Court will vacate the Board's March 17, 2016, decision and\nwill remand the matter for further proceedings consistent with this decision.\n\n\n I. BACKGROUND\n The appellant served in the U.S. Army from October 1991 to September 1995. R. at\n3084-86, 1439. During service, he underwent a left inguinal hernia repair, which resulted in nerve\nentrapment. R. at 1448, 1725. In a March 2004 rating decision, the Nashville, Tennessee, VA\nregional office (RO) awarded service connection for inguinal hernia repair residuals and assigned\na 10% disability rating effective June 1998. R. at 2958-61.\n In January 2005, the appellant filed an increased-rating claim for this disability. R. at\n2953-54. In a July 13, 2005, rating decision, the RO denied entitlement to a higher rating, noting\nthat the appellant's 10% rating was the maximum schedular evaluation possible under the\napplicable diagnostic code (DC). R. at 2786-93 (assigning a hyphenated disability rating under\n38 C.F.R. \u00a7\u00a7 4.114, DC 7338 (inguinal hernia) (2006), 4.124a, DC 8730 (neuralgia of ilio-inguinal\nnerve) (2006)). The RO also declined to refer the case for extraschedular consideration. Id. The\nappellant submitted a Notice of Disagreement the following month, R. at 2776, and VA issued a\nStatement of the Case in May 2006 that continued the 10% schedular disability rating and denied\nextraschedular referral, R. at 2743-60. The appellant perfected his appeal in June 2006. R. at\n2729-30.\n In August 2010, the Board remanded the appellant's claim for a new VA examination \"to\naddress the current nature and etiology of [the appellant's] chronic left inguinal hernia repair\nresiduals, left ilioinguinal nerve entrapment, and erectile dysfunction.\" R. at 2635. The appellant\nunderwent the VA examination in January 2011, R. at 5, but the Board again remanded the case\nin August 2012, finding that the January 2011 VA examination had not complied with the Board's\nAugust 2010 remand instructions, R. at 2558-59.\n The appellant underwent a new VA examination in September 2012. R. at 2489-518. The\nexaminer did not detect a hernia on physical examination and found no conditions calling for a\nsupporting belt. R. at 2491. The examiner diagnosed the appellant with moderate sensory\nneuropathy of the left ilioinguinal nerve. R. at 2510. He noted that the hernia affected the\nappellant's ability to work, and that the pain from the corresponding peripheral nerve condition\nwas \"worsened by walking, squatting, and lifting at work,\" such that it \"caused him to work longer\n\n\n\n 2\n\fhours . . . since the pain [] slow[ed] him down.\" R. at 2493, 2509-10. The examiner also found\nthat the appellant could not \"wear tight fitting clothing since the touch of the clothing [] cause[d]\npain in [his] thigh.\" R. at 2510. The examiner further found that the appellant had a voiding\ndysfunction, and that the etiology of the voiding dysfunction was the inguinal hernia repair\nsurgery. R. at 2511.\n In July 2013, the Board requested that a Veterans Health Administration (VHA) medical\nexpert opine on two questions: (1) What current disabilities were associated with the appellant's\nleft inguinal hernia repair residuals with ilioinguinal nerve entrapment? and (2) whether the\nappellant's voiding dysfunction with urinary leakage was a symptom of his service-connected\ndisability? R. at 2149. The following month, a VHA medical expert opined that the appellant's\nchronic left testicular discomfort and left thigh numbness should not interfere with employment,\nand that it was \"highly unlikely\" that his urological complaints were associated with his\nilioinguinal nerve entrapment, given that the ilioinguinal nerve \"is a peripheral nerve and not\nassociated with voiding function.\" R. at 2116-17.\n In an April 2014 decision, the Board denied the appellant's claim for a schedular rating\ngreater than 10% for inguinal hernia repair residuals. R. at 1969-73. However, the Board\ndetermined that \"the unusual or exceptional disability picture associated with the [appellant's] left\ninguinal nerve entrapment render[ed] the schedular criteria under 38 C.F.R. \u00a7\u00a7 4.123, 4.124a\nDiagnostic Code 8530, 86[3]0 inadequate,\" and that \"[t]he [appellant's] clinical records and written\nstatements on appeal reflect significant impairment of his occupational and social activities not\nrepresented by the current 10 percent evaluation.\" R. at 1974. The Board concluded that the\nappellant's inguinal hernia repair residuals presented \"an exceptional disability picture\" and,\naccordingly, referred the claim to the Director for extraschedular consideration. Id.\n In August 2015, the appellant submitted to VA a request for a total disability rating based\non individual unemployability (TDIU). R. at 1318-19. He identified the conditions preventing a\ngainful occupation as his knees, ankles, arthritis, and kidney stones. R. at 1318; see R. at 1316-17.\n In October 2015, the Director issued a decision denying an extraschedular rating for the\nappellant's inguinal hernia repair residuals. R. at 1269-70. The Director stated:\n [A]part from the objective evidence confirming the 10% evaluation\n currently entitled to and other subjective evidence[,] such as the [appellant]\n indicating that his scar has caused him discomfort so that he can't wear tight\n fitting clothing, has affected his sexual activity, and it's slowed him down\n\n\n\n 3\n\f at work[,] no further evidence of an unusual disability picture such as\n frequent hospitalizations or of marked interference with employment have\n been presented.\n\nR. at 1269. The Director also reasoned that the objective medical evidence of record suggested\nthat the 10% schedular evaluation was adequate, that the appellant had continued to work full-\ntime, and that the various medical opinions had found that the appellant's disability should not\nprevent him from maintaining gainful employment. Id. The Director also noted that the appellant\nwas already service connected for erectile dysfunction. Id.\n In its March 2016 decision we consider here on appeal, the Board determined that an\nextraschedular rating for inguinal hernia repair residuals was not warranted. R. at 2-19. The Board\nfound that the evidence of record was against a finding that the appellant's inguinal hernia repair\nresiduals presented \"such an exceptional or unusual disability picture that the available schedular\nevaluations are inadequate.\" R. at 17-18 (citing Thun v. Peake, 22 Vet.App. 111, 115 (2008), aff'd\nsub nom. Thun v. Shinseki, 572 F.3d 1366 (Fed. Cir. 2009)). Specifically, the Board found that\nthe manifestations of the appellant's disability included \"pain and discomfort at the left testicle and\nthigh, in addition to left thigh numbness,\" and that \"[t]hese manifestations [were] fully\ncontemplated by the rating criteria for neuralgia of the ilioinguinal nerve.\" R. at 18. Additionally,\nthe Board determined that, although the appellant \"assert[ed] his disability has worsened due to\nurinary symptomatology, competent medical evidence of record indicates that [his] voiding\ndysfunction with urinary leakage is not a symptom of his left inguinal hernia repair residuals.\"\nR. at 8. The Board also found \"no evidence of unusual factors such as frequent hospitalizations or\nmarked interference with employment stemming from the [appellant's] inguinal hernia repair\nresiduals.\" R. at 18. In reaching this conclusion, the Board stated that it had no reason to doubt\nthe appellant's reports of slowed work performance due to pain from his inguinal hernia repair\nresiduals, but that \"slower performance alone does not comprise [sic] marked interference with\nemployment\" and that in his TDIU request he \"did not attribute his inability to work to his hernia\nrepair residuals.\" R. at 17. The Board thus concluded that an extraschedular rating was not\nwarranted. R. at 17-18. This appeal followed.\n\n\n\n\n 4\n\f II. THE PARTIES' ARGUMENTS\n The appellant argues that, in its 2016 decision, the Board provided an inadequate statement\nof reasons or bases because the Board failed to explain why it revisited and reversed its 2014\nreferral findings. Appellant's Brief (Br.) at 9-17; Reply Br. at 1-5. He also asserts that, even if the\nBoard were permitted to reverse its prior factual findings, it nonetheless failed to adequately\nexplain its conclusion denying an extraschedular rating. Appellant's Br. at 18-25; Reply Br. at 6-8.\nThe appellant also contends that the Board erred when it conflated its \"marked interference with\nemployment\" analysis with a \"total disability\" analysis, and offered no legal basis or explanation\nfor concluding that slower work performance alone does not constitute marked interference with\nemployment. Appellant's Br. at 23-24; Reply Br. at 7-8. He also argues that the Board failed to\nadequately explain its determination that his genitourinary symptoms were not related to his\ninguinal hernia repair residuals. Appellant's Br. at 25-27; Reply Br. at 9-11. Finally, the appellant\nasserts that remand is required because it is not possible to determine whether the outcome of this\ncase would have been different if the Board had corrected the errors and deficiencies in its decision.\nReply Br. at 5.\n The Secretary avers that the Board provided adequate reasons or bases for denying an\nextraschedular rating and was not obligated to more specifically address its provisional factual\nfindings supporting the 2014 referral. Secretary's Br. at 9-14. He also argues that the appellant\nwas not prejudiced by any error in the Board's extraschedular analysis. Id. at 14-20. Finally, he\ncontends that the Board did not err in finding that the appellant's genitourinary symptoms were not\nrelated to his inguinal hernia repair residuals. Id. at 20-22.\n In February 2018, the Court directed the parties to file supplemental memoranda discussing\nseveral aspects of the Thun framework for establishing entitlement to extraschedular consideration,\nparticularly the role of the Board when it receives a post-referral decision from the Director. In\nresponse, the appellant asserted that, after the Director makes a decision, the Board should review\nthe entirety of that decision to \"ultimately determine\" whether it accords justice to award an\nextraschedular rating. Appellant's Supplemental Memorandum (Supp. Memo.) at 3. The appellant\nfurther argued that the Board's factual findings regarding Thun steps 1 and 2 should not differ\nbetween the referral stage and the adjudication stage and, if they do, the Board must explain why.\nId. at 6-8. In that regard, he asserts that the Board's ordinary reasons-or-bases requirement is\nheightened when its adjudication decision is different from its referral decision. Id. at 8-10.\n\n\n\n 5\n\f For his part, the Secretary argued that, if after receiving the Director's decision the Board\ndetermines on de novo review that Thun steps 1 and 2 are not met, the Board need not conduct any\nanalysis under Thun step 3. Secretary's Supp. Memo. at 1-3. If the Board conducts an analysis\nunder step 3, the Secretary continued, the Board's discussion should focus on whether an\nextraschedular rating would be commensurate with the average, rather than actual, impairment of\nearning capacity due exclusively to the disability. Id. at 3-4. Next, the Secretary argued, as the\nappellant did, that the Board's de novo review of steps 1 and 2 \"should not differ depending upon\nwhether the Board is considering extraschedular referral or adjudication.\" Id. at 5. Yet the\nSecretary asserted that, after the Board receives the Director's decision, the Board should not be\nsubject to a heightened reasons-or-bases standard when it considers whether an extraschedular\nrating is warranted. Id. at 6-7.\n\n\n III. ANALYSIS\n By way of background, on April 16, 2018, the Court submitted Morgan v. Wilkie to the full\nCourt to address the viability of the extraschedular framework as set out in Thun. 31 Vet.App. 162\n(2019). On May 16, 2019, the full Court returned Morgan to a panel of Judges, which issued its\ndecision without addressing the extraschedular framework, finding the Board's decision unclear as\nto whether extraschedular referral had been raised. Id. at 166. The day Morgan issued, the Court\nsubmitted Long v. Wilkie, U.S. Vet.App. No. 16-1537 (oral argument held Aug. 28, 2019), to the\nfull Court to address the viability of the extraschedular framework. While the Court is considering\nthe continued viability of the extraschedular framework in Long, the panel determines that the\nreasoning and holding of Ray v. Wilkie largely control this appeal and that the panel may proceed\nto consider this appeal because the decision is limited to post-referral extraschedular\ndeterminations based on the 2016 regulatory framework. 31 Vet.App. 58 (2019).\n A. Extraschedular Evaluations and Standard of Review\n VA's schedule of disability ratings is based on the average impairment of earning capacity\nin civil occupations from specific injuries or combinations of injuries. 38 U.S.C. \u00a7 1155; 38 C.F.R.\n\u00a7 3.321(a) (2015). However, \"[t]o accord justice[] . . . to the exceptional case where the schedular\nevaluations are found to be inadequate, . . . the Director\" is authorized to approve an extraschedular\nrating \"commensurate with the average earning capacity impairment due exclusively to the service\n\n\n\n\n 6\n\fconnected disability or disabilities.\" 38 C.F.R. \u00a7 3.321(b)(1).1 The \"governing norm\" in these\ncases is whether they present \"such an exceptional or unusual disability picture with such related\nfactors as marked interference with employment or frequent periods of hospitalization so as to\nrender impractical the application of the regular schedular standards.\" Id.\n In Thun, the Court set forth the \"three-step inquiry\" for determining whether a claimant is\nentitled to an extraschedular rating under \u00a7 3.321(b)(1). 22 Vet.App. at 115-16; see Anderson v.\nShinseki, 22 Vet.App. 423, 427 (2009) (clarifying that the \"steps\" described in Thun \"are, in fact,\nelements that must be established before an extraschedular rating can be awarded\"). First, either\nthe RO or the Board must find \"that the evidence before VA presents such an exceptional disability\npicture that the available schedular evaluations for that service-connected disability are\ninadequate.\" Thun, 22 Vet.App. at 115. This step requires \"a comparison between the level of\nseverity and symptomatology of the claimant's service-connected disability with the established\ncriteria found in the rating schedule for that disability.\" Id. If \"the schedular evaluation does not\ncontemplate the claimant's level of disability and symptomatology and is found inadequate,\" the\nsecond step of Thun provides that \"the RO or Board must determine whether the claimant's\nexceptional disability picture exhibits other related factors such as those provided by the regulation\nas 'governing norms,'\" such as \"marked interference with employment\" and \"frequent periods of\nhospitalization.\" Id. (citing 38 C.F.R. \u00a7 3.321(b)(1) (2007)). Finally, if the criteria under the first\ntwo steps are satisfied, \"then the case must be referred to the [Director] for completion of the third\nstep\u2014a determination of whether, to accord justice, the claimant's disability picture requires the\nassignment of an extraschedular rating.\" Id.\n The Board's extraschedular referral decision, as well as the ultimate determination of\nwhether an extraschedular rating is appropriate, are factual determinations that the Court reviews\nunder the \"clearly erroneous\" standard of review. Ray, 31 Vet.App. at 65 (stating that if the\n\"Board's referral[s] [for extraschedular consideration] denials are factual decisions . . . [w]e can\nthink of no principled reasons why . . . a decision to refer a claim [for extraschedular consideration]\nis not [a factual decision]\" (emphasis added)); Pederson v. McDonald, 27 Vet.App. 276, 286\n(2015) (en banc) (noting that the Board's decision not to refer a claim for extraschedular\n\n1\n Effective January 8, 2018, VA amended \u00a7 3.321(b)(1) to prohibit extraschedular consideration based on the\ncombined effects of more than one service-connected disability. See Department of Veterans Affairs, Extra-Schedular\nEvaluations for Individual Disabilities, 82 Fed. Reg. 57,830 (Dec. 8, 2017); see also Thurlow v. Wilkie, 30 Vet.App.\n231, 238-40 (2018).\n\n\n\n 7\n\fconsideration is based on several factual determinations); Thun, 22 Vet.App. at 115. As with any\nfinding on a material issue of fact and law presented on the record, the Board must support its\ndetermination with an adequate statement of reasons or bases that enables the claimant to\nunderstand the precise basis for that determination and facilitates review in this Court. 38 U.S.C.\n\u00a7 7104(d)(1); Thun, 22 Vet.App. at 115; Allday v. Brown, 7 Vet.App. 517, 527 (1995); Gilbert v.\nDerwinski, 1 Vet.App. 49, 57 (1990). To comply with this requirement, the Board must analyze\nthe credibility and probative value of evidence, account for evidence it finds persuasive or\nunpersuasive, and provide reasons for rejecting material evidence favorable to the claimant.\nCaluza v. Brown, 7 Vet.App. 498, 506 (1995), aff'd per curiam, 78 F.3d 604 (Fed. Cir. 1996)\n(table).\n B. Post-Referral Analysis\n 1. Law\n In Anderson, a decision review officer (DRO) referred the case to the Director to determine\nwhether an extraschedular rating was warranted. The Director denied an extraschedular rating and\nthe Board agreed with the Director's denial. 22 Vet.App. at 424-25. On appeal, the Court rejected\nthe appellant's argument elevating the analysis under each Thun element into a separate final\ndecision that was binding on the Director and the Board. Id. at 427. Instead, the Court held that\nthe Board was permitted to review the DRO's and Director's findings, and that the Board \"has\njurisdiction to review whether the decision not to award an extraschedular rating was appropriate\nunder all three elements set forth in Thun.\" Id. at 428. The Court also clarified that \"the [referral]\nanalysis performed by the RO or Board is done for the limited purpose of determining whether\nreferral of the matter for extraschedular consideration is warranted[,] [but] [t]he actual review of\nthe matter and approval of an extraschedular rating is done for the first time by the Director . . . .\"\nId. (citations omitted).\n There is no dispute over Anderson's holding that the extraschedular referral determinations\nare not binding on the actual extraschedular adjudication; however, the present case differs in one\nkey respect: Here, the Board was reviewing not the DRO's referral findings, but its own referral\nfindings. And, although Anderson distinguished between the \"limited purpose\" of the referral\nanalysis and the \"actual review of the matter and approval of an extraschedular rating\" performed\nfor the first time by the Director, the Court did not clarify whether the Board's post-referral analysis\nof its own referral findings necessarily required a re-evaluation of Thun elements 1 and 2.\n\n\n\n 8\n\fAccordingly, this case presents the following question: How does the Board's review of Thun\nelements 1 and 2 at the adjudication stage differ from its review at the referral stage?\n In Wages v. McDonald, the Court held that the Director's opinion was not evidence that the\nBoard could use in its post-referral decision. 27 Vet.App. 233, 239 (2015) (per curiam). Rather,\nthe Director's decision was a decision adopted by the RO and reviewed by the Board de novo. Id.\nUnder Thun, following referral, the Director and the Board must determine \"whether, to accord\njustice, the claimant's disability picture requires the assignment of an extraschedular rating.\"\n22 Vet.App. at 115. Although this Court has held that extraschedular determinations are capable\nof judicial review, Kuppamala v. McDonald, 27 Vet.App. 447, 457 (2015), neither \u00a7 3.321 nor\nThun provides any concrete test or guidance for the Court to apply when reviewing the Board's\nextraschedular decision, aside from the first two elements described at the referral stage. For\nguidance as to what the Board must do in the absence of any other specified test at the post-referral\nstage, the Court turns to its recent precedent in Ray, as well as the Board's reasons-and-bases\nrequirement under 38 U.S.C. \u00a7 7104(d)(1).\n Although Ray addressed the extraschedular referral process in the TDIU context under\n38 C.F.R. \u00a7 4.16, Ray nonetheless offers compelling logic that also applies in the increased-rating\ncontext under \u00a7 3.321. See 31 Vet.App. at 66-67; cf. King v. Shulkin, 29 Vet.App. 174, 178 (2017)\n(\"The goal of the entire rating process is to appropriately compensate veterans. The schedular and\nextraschedular analyses are just different means of doing so.\"); Norris v. West, 12 Vet.App. 413,\n420-21 (1999) (\"A TDIU rating is not a basis for an award of service connection. Rather, it is\nmerely an alternate way to obtain a total disability rating without being rated 100% disabled under\nthe Rating Schedule.\"). But see Kellar v. Brown, 6 Vet.App. 157, 162 (1994) (noting that\nevaluations regarding employability in \u00a7 4.16 and interference with employment contained in\n\u00a7 3.321(b)(1) are different metrics); Stanton v. Brown, 5 Vet.App. 563, 564-70 (1993) (holding\nthat the issue of extraschedular rating is separate from the issue of TDIU rating).\n In Ray, the Court acknowledged that \"the decisions to refer and to award a[n extraschedular\nTDIU] rating are fundamentally different\" and that a referral decision does not require the Board\nto award an extraschedular rating. 31 Vet.App. at 65. The Court explained that to hold otherwise\nwould make the Director \"little more than a rubberstamp.\" Id. at 64. However, the Court also held\nthat, because the en banc Court in Pederson held that the Board's referral denials are factual\ndecisions, it would be logically inconsistent to hold that a decision to refer a claim is not a factual\n\n\n\n 9\n\fdecision. Id. at 65. Rather, the Court held that \"the initial extraschedular referral decision under\n\u00a7 4.16(b) addresses whether there is sufficient evidence to substantiate a reasonable possibility that\na veteran is unemployable by reason of his or her service-connected disabilities.\" Id. at 66. And,\nwhether a \"preponderance of the evidence nevertheless shows that a veteran is unemployable by\nreason of his or her service-connected disabilities\" is the question to answer in the adjudication\nstage of assigning an extraschedular disability rating. Id.\n The Court also held in Ray that \"the Board must ensure that it adequately explains its\nreasoning when a factual finding made at the referral stage comes out differently at the review\nstage.\" Id. at 66-67. The Court suggested that the certitude or equivocality of the Board's language\nin a referral decision could affect the amount of explanation required where there is deviation at\nthe award stage. Id. at 67 (\"For example, where the Board finds referral appropriate because 'it is\nbeyond dispute' that a veteran was unemployable because of his service-connected disabilities,\nmore explanation might be needed for a contrary finding than where the Board's referral finding is\nmore equivocal.\"). In Ray, the Court remanded the case to the Board for an adequate statement of\nreasons or bases for \"its different factual determinations at the referral and review stages.\" Id.\n In the instant case, the Court extends Ray's reasoning and holding in the context of\nextraschedular TDIU under \u00a7 4.16(b) to the context of extraschedular rating under \u00a7 3.321(b). Cf.\nRice v. Shinseki, 22 Vet.App. 447, 453 (2009) (per curiam) (\"Because Mr. Rice was challenging\nthe initial disability rating assigned for the disability upon which he based his assertion of\nunemployability . . . the determination of whether he is entitled to TDIU . . . is part and parcel of\nthe determination of the initial rating for that disability.\"). The initial extraschedular referral\ndecision under \u00a7 3.321(b) addresses whether there is sufficient evidence to substantiate a\nreasonable possibility that \"application of the regular schedular standards\" is impractical because\nthe disability is \"exceptional or unusual . . . with such related factors as marked interference with\nemployment or frequent periods of hospitalization.\" 38 C.F.R. \u00a7 3.321(b) (2015); see Thun,\n22 Vet.App. at 115-16. Accordingly, the Court holds that, in the extraschedular rating context, the\nBoard's reasons-or-bases requirement obligates it to \"explain[] its reasoning when a factual finding\nmade at the referral stage comes out differently at the review stage.\" Ray, 31 Vet.App. at 67.\n 2. Application to the Facts of this Case\n Here, the language of the Board's 2014 referral decision was not equivocal. The Board\nfound that the\n\n\n\n 10\n\f unusual or exceptional disability picture associated with the [appellant's] left inguinal nerve\n entrapment renders the schedular criteria under 38 C.F.R. \u00a7\u00a7 4.123, 4124a, Diagnostic\n Code[s] 8530, 86[3]0[,] inadequate in the instant appeal. The [appellant's] clinical records\n and written statements on appeal reflect significant impairment of his occupational and\n social activities not represented by the current 10 percent evaluation. Accordingly, the\n Board concludes that [his] left inguinal hernia repair residuals with ilioinguinal nerve\n entrapment present an exceptional disability picture which warrants referral to the Under\n Secretary for Benefits or the Director of the Compensation and Pension Service for extra-\n schedular consideration.\n\nR. at 1974. And little was added to the record following the 2014 referral.2 The Director's opinion\ndoes not count as evidence. See Wages, 27 Vet.App. at 239. The appellant's 2015 TDIU\napplication, although new, is not necessarily determinative of his increased-rating claim. See\nKellar, 6 Vet.App. at 162 (holding that, because \"the effect of a service-connected disability\nappears to be measured differently for purposes of extraschedular consideration\" and \"for purposes\nof a TDIU\" request, the appellant's claim for extraschedular consideration of his service-connected\ncondition \"is not inextricably intertwined with the TDIU [matter] which has been referred to\" the\nagency of original jurisdiction). Thus, it is unclear why, on mostly the same facts, the Board\nreached opposite conclusions. See Appellant's Br. at 9-14. Although the Board was not bound by\nits 2014 referral decision, it did not explain why it had reached an opposite conclusion in its 2016\ndecision. In the 2016 decision, the Board did not discuss the 2014 referral findings, but simply\nnoted the referral. To enable the appellant to understand the precise basis for its decision, the\nBoard must explain why it reached a different result. Here, the appellant believes that, by the\nreferral in 2014, he received a \"yes\" to an extraschedular rating, and then in 2016 received a \"no,\"\nalthough the Board had evaluated the same two Thun factors. Because the Board treated the 2014\nand 2016 Thun determinations differently, it must explain why and how they were different. See\nAllday, 7 Vet.App. at 527. Its failure to do so frustrates judicial review. See id.; see also 38 U.S.C.\n\u00a7 7104(d)(1); Gilbert, 1 Vet.App. at 56-57.\n To the extent the Secretary may be asserting that any Board reasons or bases deficiency in\nfailing to explain its conflicting referral and award determinations is nonprejudicial, the Court\ncannot conclude that this error was harmless. In that regard, the Board previously acknowledged\nevidence of \"significant impairment of [the appellant's] occupational and social activities not\n\n\n 2\n After the October 2015 Supplemental Statement of the Case issued, Social Security Administration records,\nincluding private medical records, were placed in the appellant's file and he waived consideration by the RO. R. at 3.\n\n\n\n 11\n\frepresented by the current 10 percent evaluation\" and provided no explanation in the decision on\nappeal as to why that is no longer the case. The Court will not undertake that analysis in the first\ninstance. See Arneson v. Shinseki, 24 Vet.App. 379, 389 (2011) (finding prejudice when error\n\"could have altered\" the Board's determinations); see also Hensley v. West, 212 F.3d 1255, 1263\n(Fed. Cir. 2000) (stating that \"appellate tribunals are not appropriate fora for initial fact finding\").\n C. Other Reasons-or-Bases Arguments\n Given that the Court is remanding the appellant's extraschedular claim, and because the\nappellant's additional reasons-or-bases arguments could result in no greater relief, the Court need\nnot address these arguments. See Mahl v. Principi, 15 Vet.App. 37, 38 (2001) (per curiam order)\n(\"[I]f the proper remedy is a remand, there is no need to analyze and discuss all the other claimed\nerrors that would result in a remedy no broader than a remand.\"); Best v. Principi, 15 Vet.App. 18,\n20 (2001) (per curiam order) (\"A narrow decision preserves for the appellant an opportunity to\nargue those claimed errors before the Board at the readjudication, and, of course, before this Court\nin an appeal, should the Board rule against him.\"). On remand, the appellant is free to submit\nadditional evidence and argument on the remanded matter, and the Board is required to consider\nany such relevant evidence and argument. See Kay v. Principi, 16 Vet.App. 529, 534 (2002)\n(stating that, on remand, the Board must consider additional evidence and argument in assessing\nentitlement to the benefit sought); Kutscherousky v. West, 12 Vet.App. 369, 372-73 (1999) (per\ncuriam order). Additionally, the Court has held that \"[a] remand is meant to entail a critical\nexamination of the justification for the decision.\" Fletcher v. Derwinski, 1 Vet.App. 394, 397\n(1991). The Board must proceed expeditiously, in accordance with 38 U.S.C. \u00a7 7112 (requiring\nthe Secretary to provide for \"expeditious treatment\" of claims remanded by the Court).\n\n\n IV. CONCLUSION\n The appellant's motion for oral argument is denied. After consideration of the parties'\nbriefs, supplemental memoranda, and the record, the Board's March 17, 2016, decision denying a\ndisability rating greater than 10% on an extraschedular basis for inguinal hernia repair residuals is\nVACATED, and the matter is REMANDED for further proceedings consistent with this decision.\n\n\n\n\n 12\n\f"} -{"text": "\n817 F.Supp. 789 (1993)\nMartha HELTON, et al., Plaintiffs,\nv.\nPHELPS COUNTY REGIONAL MEDICAL CENTER, et al., Defendants.\nNo. 4:92CV00883 GFG.\nUnited States District Court, E.D. Missouri, E.D.\nMarch 31, 1993.\nRobert J. Albair, Clayton, MO, for plaintiffs.\nMark A. Ludwig, Ronald R. McMillin, R. Max Humphreys, Carson and Coil, Jefferson City, MO, Cheryl A. Callis, Ben Ely, Jr., Joseph M. Kortenhof, Kortenhof and Ely, Joseph L. Leritz, President, Leritz and Plunkert, St. Louis, MO, Paul Wacker, Richard Paul Wacker, Daniel and Clampett, Springfield, MO, for defendants.\n\nMEMORANDUM\nGUNN, District Judge.\nThis matter is before the Court on various motions to dismiss and motions for summary judgment brought by defendants Dr. Donald James Curran and Phelps County Regional Medical Center (Hospital). Also before this Court is Dr. Curran's motion to strike and plaintiffs' motion for a more definite statement, directed at Dr. Curran's answer. For *790 the reasons stated below, the Court will sua sponte dismiss Count I of the second amended complaint (the complaint) as to Dr. Curran and grant Dr. Curran's motion to dismiss Counts II and III for lack of subject matter jurisdiction. Consequently, plaintiffs' motion for a more definite statement and Dr. Curran's motions for summary judgment and motion to strike will be denied as moot. The Court will deny the Hospital's motion for summary judgment and its renewed motion to dismiss.\nAccording to the allegations of the complaint, Virgil Lee Helton was admitted to the Hospital on July 15, 1991, with an admitting diagnosis of major depression with anxiety. During the admission, personnel of the Hospital noted, among other things, that Helton displayed confusion, severe depression, paranoia and self-inflicted mutilation. At the time, Dr. Curran was the physician at the hospital responsible for examining, treating and discharging Helton. On July 16, 1991, defendants learned that Helton was apparently indigent and lacked health insurance. As a result of his apparent indigency, defendants decided to discharge him. Helton was discharged the following morning of July 17, 1991. He committed suicide by a gunshot wound to the head in the early morning hours of July 18, 1991.\nThis action was brought by Helton's surviving wife and children. Count I of the complaint alleges that defendants Dr. Curran, the Hospital and Care Unit, Inc., improperly discharged Helton from the Hospital in violation of 42 U.S.C. \u00a7 1395dd, the Emergency Medical Treatment and Active Labor Act (EMTALA), also known as the \"anti-dumping\" or \"patient dumping\" act.[1] Count II is a wrongful death claim against Dr. Curran and Care Unit, Inc., and Count III is a lost chance of recovery and survival claim against Dr. Curran and Care Unit, Inc.\n\nSua Sponte Dismissal\nPlaintiffs' claim against Dr. Curran is predicated upon the civil enforcement provision of EMTALA, which states\nAny individual who suffers personal harm as a direct result of a participating hospital's violation of a requirement of this section may, in a civil action against the participating hospital, obtain those damages available for personal injury under the law of the State in which the hospital is located, and such equitable relief as is appropriate.\n42 U.S.C. \u00a7 1395dd(d)(2)(A). Under the above provision, a person injured by a violation of EMTALA may bring a private action against a participating hospital for civil damages. However, no similar private cause of action exists under EMTALA for recovery of damages from a physician. Although the Eighth Circuit has not yet ruled on this issue, this Court is guided in its decision by recent well-reasoned opinions from other jurisdictions. See, e.g., Delaney v. Cade, 986 F.2d 387, 393 (10th Cir.1993) (plain language of statute indicates civil actions can only be brought against participating hospitals, not doctors); Baber v. Hosp. Corp. of Am., 977 F.2d 872, 876-78 (4th Cir.1992) (reaching same conclusion based upon plain language and legislative history of statute); Gatewood v. Washington Healthcare Corp., 933 F.2d 1037, 1040 n. 1 (D.C.Cir.1991) (noting in dicta that civil enforcement provision is \"explicitly limited to actions against participating hospitals\"); Jones v. Wake County Hosp. Sys., Inc., 786 F.Supp. 538, 545 (E.D.N.C.1991) (no private cause of action against physicians exists under \u00a7 1395dd(d)(2)).[2] Accordingly, Count I of the complaint will be sua sponte dismissed for failure to state a claim. Fed. R.Civ.P. 12(b)(6).[3]\n*791 Counts II and III of the complaint will be dismissed as to Dr. Curran on grounds that the Court no longer has supplemental jurisdiction over these state law claims under 28 U.S.C. \u00a7 1367(a). Additionally, plaintiffs' motion for a more definite statement and Dr. Curran's motions for summary judgment and motion to strike will be denied as moot.\n\nRemaining Motions of the Hospital\nThe Hospital has separately moved for summary judgment on plaintiffs' EMTALA claim and has renewed its motion to dismiss, which was previously denied by the Court. The Hospital is entitled to summary judgment if it can show \"that there is no genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law.\" Fed.R.Civ.P. 56(c). Under Rule 56(e), in order to defeat a properly supported motion, plaintiffs may not simply rest upon the allegations of their complaint but must present affirmative evidence from which a jury might return a verdict in their favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986). Ultimately, the burden of proof is on the Hospital as the moving party and this Court will not grant summary judgment unless it is convinced that there is no evidence to sustain a recovery under any circumstances. Foster v. Johns-Manville Sales Corp., 787 F.2d 390, 392 (8th Cir.1986).\nIn the present case, plaintiffs have alleged violations of 42 U.S.C. \u00a7\u00a7 1395dd(a) and (c)(1)(A)(ii). Thus, to prevail on summary judgment, the Hospital must establish that no genuine issue of material fact exists under either provision. The Hospital contends that there is no genuine dispute as to (1) the fact that Helton received an \"appropriate\" medical screening examination within the capability of the Hospital's emergency department (42 U.S.C. \u00a7 1395dd(a)), and (2) the facts that Helton did not have an \"emergency medical condition\" at the time he was hospitalized and, even if he did, his condition was \"stabilized\" at the time of his discharge (42 U.S.C. \u00a7 1395dd(c)(1)(A)(ii)).\nThe evidence before the Court includes, among other things, Helton's hospital records, deposition testimony by Dr. Curran, affidavits by Helton's family members, and documents purporting to state the Hospital's policies and procedures for admitting and discharging patients. The Court finds that the evidence, particularly the hospital records, is inconclusive as to the factual issues identified above. In addition, the Court notes that documents obtained by plaintiff from the Hospital through discovery, including one which states \"Patients with inadequate financial coverage will be discharged and referred to other resources,\" raises the possibility that this case involves precisely the type of \"patient dumping\" that EMTALA was designed to prevent. Upon review of the record as a whole, the Court therefore finds that there are genuine issues of material fact.\nAlternatively, the Hospital argues that, under Missouri law, plaintiffs' federal claim is barred by sovereign immunity because EMTALA specifically refers to state law for the measure of damages available in a private action and it does not preempt state law except where there is a direct conflict between the state and federal laws. See 42 U.S.C. \u00a7\u00a7 1395dd(d)(2)(A), (f). The Hospital relies on Mo.Rev.Stat. \u00a7 537.600 which provides sovereign immunity to public entities to the extent they have no insurance coverage. See State ex rel. Cass Medical Ctr. v. Mason, 796 S.W.2d 621, 623 (Mo.1990) (en banc).[4]\nThe preemption provision of EMTALA states\nThe provisions of this section do not preempt any State or local law requirement, except to the extent that the requirement directly conflicts with a requirement of this section.\n42 U.S.C. \u00a7 1395dd(f). In this instance, the Court finds a direct conflict between the state doctrine of sovereign immunity relied upon by the Hospital and EMTALA. Directly on point is Power v. Arlington Hosp., 800 F.Supp. 1384, 1391-92 (E.D.Va.1992) (Power). In Power, the court held that a Virginia *792 statute limiting the liability of charitable hospitals to the lesser of their insurance coverage or one million dollars was preempted by EMTALA.[5] Noting that the touchstone of the preemption analysis is congressional intent, the Power court reasoned:\n[A]pplication of the Virginia statute would impede the accomplishment and execution of the purposes underlying EMTALA, namely deterring \"patient dumping\" and compensating those who are unlawfully \"dumped.\" ... Importing the limits of a charitable immunities statute into EMTALA would, in essence, allow states to limit EMTALA recoveries to very low, or even negligible levels, thus effectively undermining the purposes of the federal law.\nId. at 1392. The Power court's reasoning is equally applicable here. Moreover, the impact of giving effect to the Missouri sovereign immunity statute would be particularly invidious because the most likely patients to fall into the class of persons EMTALA was designed to protect are also more likely to seek emergency medical care at a public rather than a private hospital. Accordingly, the Hospital's motion for summary judgment and its renewed motion to dismiss will be denied.\n\nORDER\nFor the reasons set forth in the Memorandum filed on this date and incorporated herein, IT IS HEREBY ORDERED that Count I of the second amended complaint is sua sponte dismissed as to Dr. Curran.\nIT IS FURTHER ORDERED that Dr. Curran's motion to dismiss Counts II and III for lack of subject matter jurisdiction is granted.\nIT IS FURTHER ORDERED that plaintiffs' motion for a more definite statement is denied as moot.\nIT IS FURTHER ORDERED that all of Dr. Curran's outstanding motions for summary judgment are denied as moot.\nIT IS FURTHER ORDERED that Dr. Curran's motion to strike is denied as moot.\nIT IS FURTHER ORDERED that the Hospital's motion for summary judgment is denied.\nIT IS FURTHER ORDERED that the Hospital's renewed motion to dismiss is denied.\nNOTES\n[1] The Emergency Medical Treatment and Active Labor Act (EMTALA), 42 U.S.C. \u00a7 1395dd, was enacted by Congress as part of the Comprehensive Omnibus Budget Reconciliation Act of 1986 (COBRA).\n[2] But cf. Sorrells v. Babcock, 733 F.Supp. 1189, 1193-94 (N.D.Ill.1990) (although plaintiff may not recover civil damages against physician, district court has subject matter jurisdiction over private action against physician which alleges violations of EMTALA).\n[3] For district court's inherent authority to dismiss plaintiffs' claim sua sponte, see Smith v. Boyd, 945 F.2d 1041, 1042-43 (8th Cir.1991) (district court sua sponte may dismiss a complaint under Rule 12(b)(6) provided the dismissal does not precede service of process).\n[4] In a previous order of this Court, plaintiffs' Missouri wrongful death claim against the Hospital was dismissed on sovereign immunity grounds. Helton v. Phelps County Regional Medical Ctr., 794 F.Supp. 332 (E.D.Mo.1992) (memorandum and order).\n[5] The plaintiff in Power was seeking damages in excess of one million dollars.\n"} -{"text": "J-S77017-16\n\n\nNON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37\n\nIN RE: ADOPTION OF: A.L.W., a Minor IN THE SUPERIOR COURT OF\n PENNSYLVANIA\n\nAPPEAL OF: J.L.W., Father No. 655 MDA 2016\n\n\n Appeal from the Order entered March 8, 2016, in the\n Court of Common Pleas of Mifflin County,\n Orphans\u2019 Court, at No. 22 of 2015.\n\n IN THE SUPERIOR COURT OF\nIN RE: ADOPTION OF: E.M.W., a Minor PENNSYLVANIA\n\n\nAPPEAL OF: J.L.W., Father No. 656 MDA 2016\n\n\n Appeal from the Order entered March 8, 2016, in the\n Court of Common Pleas of Mifflin County,\n Orphans\u2019 Court, at No. 2015-00021\n\n\nBEFORE: PANELLA, OLSON, and PLATT,* JJ.\n\nMEMORANDUM BY OLSON, J.: FILED DECEMBER 02, 2016\n\n Appellant, J.L.W. (hereinafter \u201cFather\u201d), appeals from the orders\n\nentered on March 8, 2016, denying his petitions to involuntarily terminate\n\nthe parental rights of C.L.W. (hereinafter \u201cMother\u201d) to their minor children\n\nA.L.W. (born in August 2007) and E.M.W. (born in July 2005) (hereinafter,\n\ncollectively \u201cthe Children\u201d). We affirm.\n\n On July 6, 2015, Father filed separate petitions to terminate Mother\u2019s\n\nparental rights to the Children. Within the petitions, Father claimed that\n\n\n\n\n*\n Retired Senior Judge assigned to the Superior Court.\n\fJ-S77017-16\n\n\nMother\u2019s parental rights to the Children should be terminated pursuant to 23\n\nPa.C.S.A. \u00a7 2511(a)(1) because:\n\n a. . . . Mother has not spent time with [the Children] since\n May 10, 2014.\n\n b. From November 12, 2011 until May 10, 2014 (a period of\n 910 days . . . ), Mother saw the [Children] on approximately\n six [] occasions.\n\n c. The occasions mentioned above on which Mother has\n seen the [Children] have historically been one to two hour\n visits at a public park.\n\n d. During the visits[,] Mother and [the Children] interact\n very little.\n\n e. . . . Mother has had less than eight [] meaningful\n telephone conversations with [the Children] since October\n 2013 to the present, a period of approximately [20]\n months.\n\n f. . . . Mother has had no involvement in the [Children\u2019s]\n educational development. . . .\n\n g. . . . Mother has had no involvement in the [Children\u2019s]\n medical care and treatment for a period in excess of five []\n years.\n\n h. Mother has not performed day-to-day parental\n responsibilities such as getting the [Children] out of bed;\n ensuring the [Children\u2019s] proper hygiene; providing or\n arranging childcare, transporting the [Children] to [their]\n community-based[] social events and/or attending the\n same; establishing a supportive, loving[,] and nurturing\n emotional bond with the [Children]; etc., for a period in\n excess of five [] years.\n\n i. For a period in excess of five [] years, Mother has\n demonstrated only a passive interest at best in the\n [Children] and has refused and/or failed to undertake an\n active role and a position of importance in [the Children\u2019s\n lives].\n\n\n -2-\n\fJ-S77017-16\n\n\n\n j. Mother\u2019s child support order was suspended on June 25,\n 2013, nearly two years ago, and she has failed to provide\n financial support for the [Children] since prior to that time.\n Prior to the suspension of [] the support obligation, Mother\u2019s\n support arrearages were in excess of [$5,000.00].\n\n k. Mother has evidenced a settled purpose of relinquishing\n her parental claim and has refused and/or failed to perform\n any meaningful parental duties for the [Children] by\n conduct continuing for at least six [] months.\n\nFather\u2019s Petition to Terminate Mother\u2019s Parental Rights to A.L.W., 6/6/15, at\n\n2-4; Father\u2019s Petition to Terminate Mother\u2019s Parental Rights to E.M.W.,\n\n6/6/15, at 2-4.\n\n On December 15, 2015, the trial court held a hearing on Father\u2019s\n\npetitions. As the trial court explained, during the hearing the parties\n\npresented the following evidence:\n\n Father and Mother separated . . . in late 2007 to early 2008\n and divorced by official decree [on] March 26, 2009.\n\n Following divorce, Father began seeing [D.W.] in mid-\n summer 2008 and married [D.W. in] July[] 2011. Following\n [Father and] Mother\u2019s separation, Father maintained a\n calendar illustrating when Mother exercised her rights to see\n the [C]hildren. The calendar reflects that, in 2008, Mother\n visited regularly; in 2009, Mother visited [41] times; in\n 2010, the visits decreased towards the end of the year\n (showing one visit in October, in November, and in\n December); in 2011, four visits; in 2012, two visits; in\n 2013, three visits; in 2014, one visit; and in 2015, no visits.\n\n [A custody order entered in 2007] required that Mother\u2019s\n visits be supervised in [the home of B.P., the maternal\n grandmother (hereinafter \u201cMaternal Grandmother\u201d)] and\n [that] the visits [were] to occur once a week for two hours[.\n This] order changed slightly in 2008 by maintaining\n\n\n\n -3-\n\fJ-S77017-16\n\n\n supervision, but no longer limiting Mother\u2019s visits to\n [Maternal Grandmother\u2019s] home. . . .\n\n According to Mother\u2019s own testimony, the requirement for\n supervision arose following a Children and Youth [Services\n (hereinafter \u201cCYS\u201d)] investigation that concluded that she\n could not meet the basic needs of a child. However, Mother\n testified that [CYS] never removed [the Children] from her\n care and that she was never charged with child abuse\n crimes. . . .\n\n In 2014, Father\u2019s parents filed a custody action resulting in\n Mother being required to contact Father if she wished to see\n or communicate with [the Children]. Initially, [D.W.] did\n not attend visits, as [Maternal Grandmother] would not let\n her in her home. However, [D.W.] joined the visitations in\n the later years and observed Mother taking pictures of [the\n Children]. Further[,] first-hand observations by Mother\u2019s\n relatives indicate that, at the last visitation in 2014,\n Mother[] and Mother\u2019s other two daughters interacted\n positively with [the Children and] that Mother was warm,\n loving, and interactive.\n\n [Father also] maintained records reflecting that, in the six\n months prior to filing the July 6, 2015 petitions to terminate\n Mother\u2019s parental rights, Mother had not called [or] left a\n voicemail with Father[;] however, Father\u2019s records from\n Verizon ended [in March 2015]. Notwithstanding his phone\n records, Father testified that Mother texts, stating that she\n loves and misses the [C]hildren and asks that they call her.\n Father supplemented this by stating that, in the six months\n prior to the filing of the petitions, Mother texted him,\n inquiring about the [C]hildren, once per week. Further,\n [K.L.] (Mother\u2019s sister) [(hereinafter \u201cMother\u2019s Sister\u201d)],\n who receives Mother\u2019s cell phone bill, verified that Mother\n contacts Father via text many times and that her records\n show that Father sometimes fails to respond to the text\n messages.\n\n Father testified that Mother and her family historically buy\n Christmas gifts for [the Children]. [Mother\u2019s Sister] further\n testified that Mother and her family bought Christmas\n presents for [the Children from 2011 through 2015], and\n that these gifts were given to [B.H.] ([the C]hildren\u2019s great-\n\n\n -4-\n\fJ-S77017-16\n\n\n grandmother), to give to Father. Mother corroborated this\n by stating that she buys the [C]hildren Christmas gifts and\n has sent cards. Further, Mother testified that she tried to\n arrange a visit with [the Children] in Christmas of 2014, but\n that Father refused and would only meet with Mother\u2019s\n grandmother.\n\n In addition to trying to organize a visit over Christmas in\n 2014, Mother testified that she tried to schedule a visit for\n Mother\u2019s Day [in] 2015 [with the Children], but Father\n refused. And while Mother acknowledged that, in the past,\n Father tried to provide suitable accommodations for visits if\n he could not coordinate with the times Mother wanted, over\n the past six months[] Father would propose times that were\n inappropriate for [the Children,] who are in school all day.\n For example, Mother testified that Father would propose\n that her visits with the [C]hildren occur from 6:00 [to] 8:00\n p.m. during the week and that Mother believed that the\n [C]hildren should be \u201cunwinding\u201d during that time, eating\n dinner, and bathing. Mother testified that she wanted\n weekend visits so as not to interfere with the [C]hildren\u2019s\n schooling.\n\n Father testified that Mother never requested a change in\n custody and that Mother had ample opportunity to do so\n when Father\u2019s parents petitioned the court for custody.\n Father testified that, notwithstanding Mother attending two\n proceedings relating to the 2014 custody case, that Mother\n never met with the [C]hildren\u2019s guardian ad litem\n [(hereinafter \u201cGAL\u201d)], Stuart Cilo, nor did she actively\n participate in the proceedings[. I]n contrast, Father,\n Father\u2019s parents, and [D.W] all met with the [C]hildren\u2019s\n GAL. . . .\n\n In response, Mother testified that she did not meet with\n [the GAL], that he did call her, and that she returned the\n call, left a message with his secretary, and never received a\n return call. Mother further testified that she did not relay\n her concerns about not being able to see the [C]hildren to\n [the GAL] because she perceived it to be irrelevant to the\n custody case at issue. In addition, Mother testified that she\n tried to alter the custody visits by, first, contacting the\n [C]hildren\u2019s original GAL, Nancy Searer and[,] two, when\n Ms. Searer informed Mother that she was no longer involved\n\n\n -5-\n\fJ-S77017-16\n\n\n in the case, Mother tried to contact an attorney, but could\n not afford one. Mother testified that she was unaware that\n she could proceed without an attorney.\n\nTrial Court Opinion, 3/8/16, at 1-5 (internal citations omitted) (some internal\n\ncapitalization omitted).\n\n On March 8, 2016, the trial court entered orders denying Father\u2019s\n\npetitions to terminate Mother\u2019s parental rights. Father filed timely notices of\n\nappeal and now raises the following claims to this Court:\n\n 1. Were the trial court\u2019s findings regarding Mother\u2019s\n attempts to maintain a relationship and bond with the\n [C]hildren and attempts to meet the emotional needs of the\n [C]hildren supported by competent evidence of record such\n that termination of parental rights is not warranted?\n\n 2. Did the trial court abuse its discretion by concluding that\n Mother adequately fulfilled her parental duties given the\n lack of contact between Mother and the [C]hildren, Mother\u2019s\n failure to use any resources to address Father\u2019s alleged\n obstruction of her visits, and Mother\u2019s mere passive interest\n in the [C]hildren\u2019s development?\n\n 3. Did the trial court commit an error of law in excusing\n Mother\u2019s failure to pursue legal relief based on her\n allegations that she did not realize she could participate\n while attending custody proceedings involving [the\n C]hildren, Father, and paternal grandparents?\n\n 4. Did the trial court, in considering the [C]hildren\u2019s\n developmental, physical and emotional needs and welfare,\n commit an abuse of discretion in finding that Mother had an\n emotional bond with the [C]hildren and that the parental\n relationship was \u201cexisting, necessary, and beneficial?\u201d\n\nFather\u2019s Brief at 4-5.1\n\n\n\n1\n For ease of discussion, we have re-ordered Father\u2019s claims on appeal.\n\n\n -6-\n\fJ-S77017-16\n\n\n In reviewing an appeal from an order terminating parental rights, we\n\nadhere to the following standard:\n\n [A]ppellate courts must apply an abuse of discretion\n standard when considering a trial court\u2019s determination of a\n petition for termination of parental rights. As in\n dependency cases, our standard of review requires an\n appellate court to accept the findings of fact and credibility\n determinations of the trial court if they are supported by the\n record. In re: R.J.T., 9 A.3d 1179, 1190 (Pa. 2010). If the\n factual findings are supported, appellate courts review to\n determine if the trial court made an error of law or abused\n its discretion. Id.; R.I.S., [36 A.3d 567, 572 (Pa. 2011)\n (plurality opinion)]. As has been often stated, an abuse of\n discretion does not result merely because the reviewing\n court might have reached a different conclusion. Id.; see\n also Samuel Bassett v. Kia Motors America, Inc., 34\n A.3d 1, 51 (Pa. 2011); Christianson v. Ely, 838 A.2d 630,\n 634 (Pa. 2003). Instead, a decision may be reversed for an\n abuse of discretion only upon demonstration of manifest\n unreasonableness, partiality, prejudice, bias, or ill-will. Id.\n\n As [the Pennsylvania Supreme Court] discussed in R.J.T.,\n there are clear reasons for applying an abuse of discretion\n standard of review in these cases. [The Supreme Court]\n observed that, unlike trial courts, appellate courts are not\n equipped to make the fact-specific determinations on a cold\n record, where the trial judges are observing the parties\n during the relevant hearing and often presiding over\n numerous other hearings regarding the child and parents.\n R.J.T., 9 A.3d at 1190. Therefore, even where the facts\n could support an opposite result, as is often the case in\n dependency and termination cases, an appellate court must\n resist the urge to second guess the trial court and impose\n its own credibility determinations and judgment; instead we\n must defer to the trial judges so long as the factual findings\n are supported by the record and the court\u2019s legal\n conclusions are not the result of an error of law or an abuse\n of discretion. In re Adoption of Atencio, 650 A.2d 1064,\n 1066 (Pa. 1994).\n\nIn re Adoption of S.P., 47 A.3d 817, 826-27 (Pa. 2012).\n\n\n\n -7-\n\fJ-S77017-16\n\n\n The burden is upon the petitioner to prove by clear and convincing\n\nevidence that the asserted grounds for seeking the termination of parental\n\nrights are valid. In re R.N.J., 985 A.2d 273, 276 (Pa. Super. 2009).\n\n Moreover, we have explained:\n\n [t]he standard of clear and convincing evidence is defined\n as testimony that is so \u201cclear, direct, weighty and\n convincing as to enable the trier of fact to come to a clear\n conviction, without hesitance, of the truth of the precise\n facts in issue.\u201d\n\nId., quoting In re J.L.C., 837 A.2d 1247, 1251 (Pa. Super. 2003).\n\n In the case at bar, Father petitioned to terminate Mother\u2019s parental\n\nrights under 23 Pa.C.S.A. \u00a7\u00a7 2511(a)(1) and (b). These sections provide:\n\n \u00a7 2511. Grounds for involuntary termination\n\n (a) General rule.--The rights of a parent in regard to a\n child may be terminated after a petition filed on any of the\n following grounds:\n\n (1) The parent by conduct continuing for a period of at\n least six months immediately preceding the filing of the\n petition either has evidenced a settled purpose of\n relinquishing parental claim to a child or has refused or\n failed to perform parental duties.\n\n ...\n\n (b) Other considerations.--The court in terminating the\n rights of a parent shall give primary consideration to the\n developmental, physical and emotional needs and welfare of\n the child. The rights of a parent shall not be terminated\n solely on the basis of environmental factors such as\n inadequate housing, furnishings, income, clothing and\n medical care if found to be beyond the control of the parent.\n With respect to any petition filed pursuant to subsection\n (a)(1), (6) or (8), the court shall not consider any efforts by\n the parent to remedy the conditions described therein which\n\n\n -8-\n\fJ-S77017-16\n\n\n are first initiated subsequent to the giving of notice of the\n filing of the petition.\n\n23 Pa.C.S.A. \u00a7 2511.\n\n We have explained this Court\u2019s review of a challenge to the sufficiency\n\nof the evidence supporting the involuntary termination of a parent\u2019s rights\n\npursuant to section 2511(a)(1) as follows:\n\n To satisfy the requirements of section 2511(a)(1), the\n moving party must produce clear and convincing evidence\n of conduct, sustained for at least the six months prior to the\n filing of the termination petition, which reveals a settled\n intent to relinquish parental claim to a child or a refusal or\n failure to perform parental duties.\n\n ...\n\n Once the evidence establishes a failure to perform parental\n duties or a settled purpose of relinquishing parental rights,\n the court must engage in three lines of inquiry: (1) the\n parent\u2019s explanation for his or her conduct; (2) the post-\n abandonment contact between parent and child; and (3)\n consideration of the effect of termination of parental rights\n on the child pursuant to Section 2511(b).\n\nIn re Z.S.W., 946 A.2d 726, 730 (Pa. Super. 2008) (internal citations\n\nomitted).\n\n [T]o be legally significant, the [post-abandonment] contact\n must be steady and consistent over a period of time,\n contribute to the psychological health of the child, and must\n demonstrate a serious intent on the part of the parent to\n recultivate a parent-child relationship and must also\n demonstrate a willingness and capacity to undertake the\n parental role. The parent wishing to reestablish his parental\n responsibilities bears the burden of proof on this question.\n\n\n\n\n -9-\n\fJ-S77017-16\n\n\nIn re Z.P., 994 A.2d 1108, 1119 (Pa. Super. 2010) (internal citation\n\nomitted); see also In re Adoption of C.L.G., 956 A.2d 999, 1006 (Pa.\n\nSuper 2008) (en banc).\n\n Further, regarding the definition of \u201cparental duties,\u201d this Court has\n\nstated as follows:\n\n There is no simple or easy definition of parental duties.\n Parental duty is best understood in relation to the needs of\n a child. A child needs love, protection, guidance, and\n support. These needs, physical and emotional, cannot be\n met by a merely passive interest in the development of the\n child. Thus, this court has held that the parental obligation\n is a positive duty which requires affirmative performance.\n\n This affirmative duty encompasses more than a financial\n obligation; it requires continuing interest in the child and a\n genuine effort to maintain communication and association\n with the child.\n\n Because a child needs more than a benefactor, parental\n duty requires that a parent exert himself to take and\n maintain a place of importance in the child\u2019s life.\n\n Parental duty requires that the parent act affirmatively with\n good faith interest and effort, and not yield to every\n problem, in order to maintain the parent-child relationship\n to the best of his or her ability, even in difficult\n circumstances. A parent must utilize all available resources\n to preserve the parental relationship, and must exercise\n reasonable firmness in resisting obstacles placed in the path\n of maintaining the parent-child relationship. Parental rights\n are not preserved by waiting for a more suitable or\n convenient time to perform one\u2019s parental responsibilities\n while others provide the child with . . . her physical and\n emotional needs.\n\nIn re B., N.M., 856 A.2d 847, 855 (Pa. Super. 2004).\n\n\n\n\n - 10 -\n\fJ-S77017-16\n\n\n Within the trial court\u2019s opinion to this Court, the trial court ably\n\nexplained why it concluded that Father \u201cdid not, by clear and convincing\n\nevidence, establish the termination ground found in \u00a7 2511(a)(1) relative to\n\nMother.\u201d Trial Court Opinion, 3/8/16, at 6. As the trial court explained:\n\n Under the totality of the circumstances, [the trial court]\n does not find sufficient evidence proving either a \u201csettled\n purpose of relinquishing parental claim\u201d or a \u201crefus[al] or\n fail[ure] to perform parental duties\u201d on behalf of Mother.\n The [trial] court finds that Mother did attempt to coordinate\n visits with [the Children] on both Christmas 2014 and\n Mother\u2019s Day 2015, and while Father provided phone\n records reflecting Mother\u2019s failure to consistently call,\n Father\u2019s records end in March of 2015, not July of 2015.\n Further, even if phone records illustrate that Mother failed\n to call in the six months prior to the filing, [the trial] court\n finds that Mother texted Father about the [C]hildren to\n convey loving messages. Mother and her family also buy\n Christmas gifts for the [C]hildren and appear to have\n continued that tradition since Mother and Father separated.\n ...\n\n Parental duties \u201cencompass[] more than financial\n obligation; [they] require[] continuing interest in the child\n and a genuine effort to maintain communication and\n association with the child. In re C.M.S., 832 A.2d 457, 462\n (Pa. Super. 2003). . . . [The trial] court finds that Mother\n satisfied this test. And while Mother did not file a petition to\n modify the current custody arraignment, [the trial] court is\n satisfied that Mother truly believed that her visitation\n concerns were inappropriate to raise at the 2008 custody\n hearing and that she believed that she needed an attorney\n to alter the arraignment.\n\nTrial Court Opinion, 3/8/16, at 6-7 (some internal capitalization omitted).\n\n Further, with respect to section 2511(b), the trial court concluded that\n\nterminating Mother\u2019s parental rights would not serve the Children\u2019s best\n\ninterests. According to the trial court:\n\n\n - 11 -\n\fJ-S77017-16\n\n\n Having found that Father failed to establish, by clear and\n convincing evidence, the termination ground stated in\n \u00a7 2511(a)(1), [the trial] court further concludes that\n terminating Mother\u2019s parental rights would not serve the\n [C]hildren\u2019s best interests. [The trial] court must give\n \u201cprimary determination\u201d to the [C]hildren\u2019s \u201cdevelopmental,\n physical, and emotional needs\u201d and must examine\n \u201cintangibles such as love, comfort, security, and stability\u201d. .\n . . Of critical concern are the [C]hildren\u2019s needs and\n welfare. . . .\n\n Here, [the trial] court looked at the emotional bond between\n Mother and [the Children] . . . [and concluded] that\n severing the parental ties \u201cwould destroy an existing,\n necessary and beneficial relationship.\u201d In re Adoption of\n T.B.B., 835 A.2d 387, 397 (Pa. Super. 2003). Mother and\n her extended family demonstrably try to maintain a\n relationship with [the Children] despite not having had a\n scheduled visit since 2014. Mother texts Father to convey\n loving messages to [the Children], tried to arrange visits,\n sends Christmas gifts in care of the [C]hildren\u2019s great-\n grandmother, and when visits were organized, Mother and\n all four of her children positively interacted. Testimony also\n indicates that Mother wished to see [the C]hildren on\n holidays as recent as Mother\u2019s Day 2015. Based upon\n Mother\u2019s efforts to maintain a relationship with [the\n C]hildren, [the trial] court finds that severing the tie\n between them would not serve the best interests of the\n [C]hildren.\n\nTrial Court Opinion, 3/8/16, at 7-8 (some internal capitalization omitted).\n\n Within the \u201cstatement of questions involved\u201d section of Father\u2019s brief,\n\nFather lists four separate claims of relief. See Father\u2019s Brief at 4-5.\n\nHowever, the argument section of Father\u2019s brief is not divided into separate\n\nparts. See Father\u2019s Brief at 11-24. In fact, within the argument section of\n\nFather\u2019s brief, Father simply argues that the trial court should have viewed\n\nhis evidence more favorably, viewed Mother\u2019s action and inaction towards\n\n\n\n - 12 -\n\fJ-S77017-16\n\n\nthe Children more unfavorably, and mistakenly \u201coverlooked\u201d certain\n\nevidence that Father put forth. See id. In other words, Father\u2019s claim on\n\nappeal is simply a challenge to the weight of the evidence. Yet, as our\n\nSupreme Court has explained:\n\n appellate courts are not equipped to make the fact-specific\n determinations on a cold record, where the trial judges are\n observing the parties during the relevant hearing and often\n presiding over numerous other hearings regarding the child\n and parents. Therefore, even where the facts could support\n an opposite result, as is often the case in dependency and\n termination cases, an appellate court must resist the urge\n to second guess the trial court and impose its own\n credibility determinations and judgment; instead we must\n defer to the trial judges so long as the factual findings are\n supported by the record and the court\u2019s legal conclusions\n are not the result of an error of law or an abuse of\n discretion.\n\nIn re Adoption of S.P., 47 A.3d at 826-27 (internal citations omitted).\n\n In the case at bar, all of the trial court\u2019s factual findings are supported\n\nby the record; and, since Father\u2019s claim on appeal is simply a request that\n\nthis Court reweigh the evidence in his favor and arrive at different credibility\n\ndeterminations than did the trial court, we conclude that Father\u2019s claim on\n\nappeal necessarily fails. Id.\n\n Order affirmed. Jurisdiction relinquished.\n\n\n\n\n - 13 -\n\fJ-S77017-16\n\n\n\n\nJudgment Entered.\n\n\n\n\nJoseph D. Seletyn, Esq.\nProthonotary\n\nDate: 12/2/2016\n\n\n\n\n - 14 -\n\f"} -{"text": "\n609 N.W.2d 278 (2000)\nDEMOLITION LANDFILL SERVICES, LLC, Appellant,\nv.\nCITY OF DULUTH, Respondent.\nNo. C6-99-1635.\nCourt of Appeals of Minnesota.\nApril 25, 2000.\n*279 Timothy R. Thornton, Jack Y. Perry, Briggs and Morgan, Minneapolis (for appellant).\nWilliam P. Dinan, Duluth City Attorney, M. Alison Lutterman, Assistant City Attorney, Duluth (for respondent).\nConsidered and decided by RANDALL, Presiding Judge, AMUNDSON, Judge, and FOLEY, Judge.\n\nOPINION\nDANIEL F. FOLEY,[*] Judge.\nAppellant Demolition Landfill Services challenges the district court's order denying its motion for summary judgment and dismissing its petition for a writ of mandamus to compel respondent City of Duluth to grant appellant a special-use permit for a landfill. Appellant asserts that the city was required to issue the permit pursuant to Minn.Stat. \u00a7 15.99, subd. 2 (1998), because the city failed to approve or deny the permit application within the statutory time period. Appellant further asserts that the district court erred in concluding that the city's rejection of a resolution granting the permit constituted a denial of the permit application. We agree and reverse.\n\nFACTS\nOn December 18, 1998, appellant completed an application for a special-use permit for a landfill. On April 12, 1999, the Duluth City Council (the council) heard testimony on the application and then voted on, and rejected, a resolution approving the permit. On May 24, 1999, the council passed a resolution denying the permit.\nAppellant petitioned the district court for a writ of mandamus and filed a complaint *280 for declaratory and other relief. The parties stipulated to the withdrawal of all issues except the petition for a writ of mandamus and appellant moved for summary judgment on the petition. In support of its petition, appellant asserted that pursuant to Minn.Stat. \u00a7 15.99, subd. 2 (1998), the permit application must be approved because the city did not deny the application within 120 days of the application's submission. After concluding that there were no material facts in dispute, the district court denied appellant's motion for summary judgment and dismissed the petition, holding that the city council's action on April 12, 1999, constituted a denial of the application for a special-use permit.\n\nISSUE\nDid the district court err in concluding that the city's rejection of a resolution granting a special-use permit equated to a denial of the permit application and thereby err in dismissing appellant's petition for a writ of mandamus?\n\nANALYSIS\nWhen the district court's decision on a petition for a writ of mandamus is based solely on legal determinations, the appellate court's review is de novo. Manco of Fairmont, Inc. v. Town Bd., 583 N.W.2d 293, 294 (Minn.App.1998), review denied (Minn. Oct. 20, 1998). To obtain mandamus relief a petitioner must establish\n(1) the failure of an official duty clearly imposed by law; (2) a public wrong specifically injurious to petitioner; and (3) no other adequate specific legal remedy.\nCoyle v. City of Delano, 526 N.W.2d 205, 207 (Minn.App.1995) (citations omitted).\nPursuant to Minn.Stat. \u00a7 15.99, subd. 2 (1998):\n[A]n agency must approve or deny within 60 days a written request relating to zoning * * * for a permit, license, or other governmental approval of an action. Failure of an agency to deny a request within 60 days is approval of the request. If an agency denies the request, it must state in writing the reasons for the denial at the time that it denies the request.\nThe agency may extend the 60-day limit an additional 60 days if the agency provides the applicant with written notice before the initial 60-day period expires. Id., subd. 3(f) (1998). Statutory or home rule charter cities are included within the definition of \"agencies.\" Id., subd. 1 (1998).\nThe parties here agree that (1) the city is an agency within the statutory definition; (2) appellant completed its permit application December 18, 1998; and (3) the city extended its time for review an additional 60 days, giving it 120 days to make a decision. It is also undisputed that the 120 days expired on April 16, 1999.\nThis dispute revolves around an interpretation of the council's actions taken at the April 12, 1999, meeting. At that meeting, the council discussed appellant's application, heard testimony, and voted on a resolution entitled:\nA Resolution Granting a Special Use Permit to Demolition Landfill Services, LLC for a Demolition Debris Land Disposal Facility Property Located at 1100 W. Gary Street.\nThe resolution failed by a 2-5 vote.\nAt the next meeting, held May 24, 1999, a resolution denying the permit application was introduced, and the council members voted on whether to approve the resolution. The resolution passed with a 7-2 vote. The resolution stated:\n[A] special use permit application by Demolition Landfill Services, Inc., to allow for a select waste disposal demolition debris landfill at 1100 Gary Street, is hereby denied.\nAppellant asserts that, contrary to the district court's conclusion, the city council's rejection of the resolution granting the permit did not equate to a denial of the permit application. See Minn.Stat. \u00a7 15.99, subd. 2 (requiring agency to \"approve *281 or deny\" application within statutory time period). Thus, appellant contends, the agency failed to deny the permit application within 120 days and the application must be approved by default.\nThe city council may have intended its rejection of the resolution granting the permit to equate to a denial of the permit application. The council discussed the permit application at the April 12 meeting and after rejecting the resolution granting it, discussed whether it was necessary to enact a separate resolution denying the permit. They decided to do so after being informed by the city attorney that although such a resolution might not be \"absolutely necessary, * * * it's a good practice to do that\" and to provide written reasons for the denial.\nRegardless of the council's intent, however, it voted on two separate resolutions: a resolution granting a special-use permit and a resolution denying a special-use permit. There is no evidence that a council member's vote on the first resolution dictated that member's vote on the second resolution. The council members were not precluded from voting against the resolution to deny the permit, regardless of their vote on the resolution to grant the permit. Thus, we cannot conclude that the council's rejection of the resolution granting the permit equated to a denial of the permit application.\nMinn.Stat. \u00a7 15.99, subd. 2, unambiguously states that failure to deny a permit application within the statutory time period mandates an approval. Because the statute is unambiguous, this court must \"give effect to the statute's plain meaning.\" Tuma v. Commissioner of Econ. Sec., 386 N.W.2d 702, 706 (Minn. 1986) (citations omitted); see also Minn. Stat. \u00a7 645.16 (1998) (\"When the words of a law in their application to an existing situation are clear and free from all ambiguity, the letter of the law shall not be disregarded under the pretext of pursuing the spirit.\"). We cannot permit a municipality to bend the letter of the statute for the sake of administrative ease. Cf. Olympia Brewing Co. v. Commissioner of Revenue, 326 N.W.2d 642, 648 (Minn.1982) (recognizing \"administrative ease, while a legitimate concern, does not justify an interpretation of a statute which is inconsistent with its purpose\" (citation omitted)).\nFurther, even if we were to conclude that the refusal to approve the resolution granting the permit constituted a denial of the permit application, it is undisputed that no written reasons were given to appellant when the council rejected the resolution granting the permit. The governing statute requires the agency to provide written reasons for a denial \"at the time that it denies the request.\" Minn.Stat. \u00a7 15.99, subd. 2. Here, written reasons for rejecting the resolution granting the permit were provided within the resolution denying the permit that was adopted May 24.\nIn Manco, this court discussed the application of the doctrine of substantial compliance to Minn.Stat. \u00a7 15.99 (1998) and explained the distinction between mandatory and directory statutes. Manco, 583 N.W.2d at 295-96. This court concluded that Minn.Stat. \u00a7 15.99, subd. 3(f), which requires an agency to give reasons when it requests an extension on the initial 60-day time limit for approving or denying an application, is directory because there is no stated consequence for an agency's failure to provide reasons. Manco, 583 N.W.2d at 296; see Sullivan v. Credit River Township, 299 Minn. 170, 176-77, 217 N.W.2d 502, 507 (1974) (recognizing statute that does not state consequences of failure to comply is directory). We went on to conclude in Manco that because subdivision 3(f) is directory, the doctrine of substantial performance applies. Manco, 583 N.W.2d at 296.\nSubdivision 2, at issue here, states that the consequence of not denying a request within 60 days is automatic approval. Immediately following this stated consequence, the subdivision mandates simultaneous, *282 written reasons for the denial. Cf. R.A. Putnam & Assocs. v. City of Mendota Heights, 510 N.W.2d 264, 267 (Minn.App.1994) (\"The requirement that contemporaneous findings be recorded prevents a city from offering after-the-fact justifications * * * unrelated to the actual reasons for the initial decision.\" (quotation omitted)), review denied (Minn. Mar. 15, 1994). We conclude therefore, that simultaneous, written reasons for a denial are mandatory and not directory.[1] Because we hold that the provisions of subdivision 2 are mandatory, including the requirement that written reasons be given simultaneously with the decision, the substantial performance doctrine is not applicable to this case.\n\nDECISION\nThe Duluth City Council's rejection of a resolution approving a special-use permit did not equate to a denial of the permit application. Minn.Stat. \u00a7 15.99, subd. 2 (1998), is unambiguous and mandatory. Absent a denial within the statutory time limit and simultaneous, written reasons for the denial, the permit application is approved. Thus, the district court erred in refusing to grant appellant's petition for a writ of mandamus.\nReversed.\nNOTES\n[*] Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, \u00a7 10.\n[1] Notably, in Manco this court stated in dicta that subdivision 2 is mandatory because it contains consequences for noncompliance with the time-limit requirement. Manco, 583 N.W.2d at 295.\n\nWe reject the city's assertion that under R.A. Putnam, the city was not required to prepare simultaneous, written reasons for its denial and was entitled to a reasonable amount of time to prepare them. In R.A. Putnam, this court considered whether a zoning decision was arbitrary and concluded that if a record is prepared within a reasonable time after a zoning decision, arbitrariness should not be presumed. 510 N.W.2d at 267. Here, we are not deciding whether the city acted arbitrarily. Instead, we are applying the unambiguous language of Minn.Stat. \u00a7 15.99, subd. 2.\n"} -{"text": "404 F.2d 987\nUNITED-HAGIE HYBRIDS, INC., Appellant,v.ESCAMBIA CHEMICAL CORPORATION, Appellee.\nPatent Appeal No. 8057.\nUnited States Court of Customs and Patent Appeals.\nJanuary 9, 1969.\n\nJames L. Kurtz, Mason, Fenwick & Lawrence, Boynton P. Livingston, G. Cabell Busick, Washington, D. C., for appellant.\nLouis F. Reed, Lee C. Robinson, Jr., New York City, for appellee.\nBefore WORLEY, Chief Judge, and RICH, ALMOND, BALDWIN, and KIRKPATRICK,* JJ.\nALMOND, Judge.\n\n\n1\nEscambia Chemical Corporation, appellee, filed application1 to register for fertilizers the mark reproduced below, asserting use since April 18, 1962.\n\n\n2\nNOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE\n\n\n3\nUnited-Hagie Hybrids, Inc., appellant, registrant of the following mark for hybrid seed corn,2 opposes the registration.\n\n\n4\nNOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE\n\n\n5\nThe Trademark Trial and Appeal Board dismissed the opposition,3 holding that no likelihood of confusion would result from the contemporaneous use of the two marks in issue, from which decision United-Hagie prosecutes this appeal. Both parties took testimony.\n\n\n6\nThe record adduced by appellant disclosed that it has used the slogan \"MORE KICK IN THE SPRING \u2014 BIGGER EARS IN THE FALL\" and the design of a kicking and snorting mule in various formats, on hybrid seed corn since 1945. It also appears that the design feature, without the slogan, has been used by appellant on alfalfa and clover seed as well as baler twine. Substantial sales of appellant's products have been realized under these marks, stimulated through advertisement in farm papers, by the use of highway signs and promotional literature mailed out to customers both actual and prospective. Sales of the products are made through dealers who sell primarily to farmers in the central states of this country.\n\n\n7\nAppellee's mark has been used since April 1962 on ammonium nitrate fertilizers. Its products are sold through approximately two hundred dealers as well as its own retail stores to farmers residing primarily in the southern portions of the United States. Appellee's products are advertised under the mark sought to be registered in trade journals and various other media.\n\n\n8\nIt is clear that priority of use resides with appellant-opposer. The single issue, therefore, with which we are concerned is whether or not appellee's mark so resembles the mark of appellant as to be likely, when applied to appellee's goods, to cause confusion, or to cause mistake, or to deceive within the purview of section 2(d) of the Lanham Act, 15 U.S.C. \u00a7 1052(d).\n\n\n9\nAppellant asserts that the marks are confusingly similar as both are design marks or symbols disclosing the representation of a kicking mule with slogans conveying similar connotations. Appellee advances a diametrically opposite view, pointing out distinct differences in the appearance of the symbol portions, i. e. the animal phases of the marks and the readily distinguishable language and appearance of the slogan features.\n\n\n10\nThe board's response to the contentions and arguments of the parties follows:\n\n\n11\nWhile it is apparent that the marks possess some features in common in that they both contain the picturization of a kicking mule and slogans which include the word \"kick,\" we believe that, regardless of whether or not these marks are analyzed in whole or in part, the differences therebetween far outweigh the points of similarity. It is therefore concluded that no likelihood of confusion would result from the contemporaneous use thereof. In this regard we find is unnecessary to go into any detail in describing these various differences since, in our opinion, the reproduction of the marks [is] adequate for such purpose. Finally, while it is not the decisive factor on our conclusion herein, it is apparent that the agricultural products here involved are specifically different, albeit they may move through the same trade channels to the same class of purchasers for conjoint uses.\n\n\n12\nIn evaluating the testimony adduced of record and considering the arguments advanced by counsel, we think the rationale set forth by this court in Diamond Alkali Co. v. Dundee Cement Co., 343 F. 2d 781, 52 CCPA 1216, has significant application here. The court said:\n\n\n13\nWhen symbol marks such as these are being considered, appearance is most significant. \"Symbols of this kind do not sound.\" [Citation omitted.] Appellant requests our consideration of the approximately equal size of the competing marks, the similar overall configuration, the central space, the thick right and left leg, and the direction or sweep of the mark with the right leg terminating above and spaced from the left. We have considered these features but agree with the board that in appearance the marks are sufficiently dissimilar that there is no likelihood of confusion. In setting out the marks above we have not meant to convey the impression that we are making a side-by-side comparison of the marks. We find the dissimilarities persist although the marks are compared by separate recall later in time and removed in place. Contentions that the newcomer has the burden of staying clear of the established mark, and that doubts are to be resolved in favor of the prior user have been considered but are not found convincing of the opposite result.\n\n\n14\nViewing the respective marks of the parties in their entireties, as we must, and considering the different nature of the agricultural products, we are not persuaded of reversible error in the decision of the board dismissing appellant's opposition. That decision is, accordingly, affirmed.\n\n\n15\nAffirmed.\n\n\n16\nWORLEY, C. J., took no part in the decision of this case.\n\n\n\nNotes:\n\n\n*\n Senior District Judge, Eastern District of Pennsylvania, sitting by designation\n\n\n1\n Serial No. 174,756 filed August 9, 1963\n\n\n2\n Reg.No. 626,029 issued May 1, 1956\n\n\n3\n 151 USPQ 65\n\n\n\n17\nKIRKPATRICK, Judge (concurring).\n\n\n18\nI concur in the result reached by the majority in the present case for the reasons set out in the two dissenting opinions in Planters Nut & Chocolate Co. v. Crown Nut Co., 305 F.2d 916, 50 CCPA 1120. Viewing the symbols in their entireties the appellee's mark simply bears no resemblance to the appellant's. The only thing in which any similarity can be found is in the concept of a kicking mule, plus the use of the word \"kick\" in the slogan which accompanies each mark. This I think is insufficient ground on which to base a finding that the applicant's mark \"so resembles a mark registered in the Patent Office * * * as to be likely * * * to cause confusion,\" etc. which is the statutory requirement. The majority evidently feels that similarity of an abstract concept is not sufficient to overcome lack of resemblance and I agree.\n\n"} -{"text": "\n422 A.2d 765 (1980)\nTerry R. BUNDY, Appellant,\nv.\nUNITED STATES, Appellee.\nNo. 79-468.\nDistrict of Columbia Court of Appeals.\nArgued September 9, 1980.\nDecided October 17, 1980.\n*766 Donald W. Whitehead, Washington, D.C., appointed by the court, with whom Edward N. Leavy, Washington, D.C., was on the brief, for appellant.\nRichard C. Bicki, Asst. U. S. Atty., Washington, D.C., with whom Charles F. C. Ruff, U. S. Atty., John A. Terry and John R. Fisher, Asst. U. S. Attys., Washington, D.C., were on the brief, for appellee.\nBefore KELLY, NEBEKER and MACK, Associate Judges.\nMACK, Associate Judge:\nFollowing a jury trial, appellant was convicted of armed robbery, D.C.Code 1973, \u00a7\u00a7 22-2901, -3202, assault with a dangerous weapon, D.C.Code 1973, \u00a7 22-502, and carrying a concealed weapon, D.C.Code 1973, \u00a7 22-3204. On appeal, appellant contends inter alia,[1] that the trial court committed reversible error by admitting into evidence, in violation of Super.Ct.Cr.R. 12.1(f), testimony of a prior withdrawn alibi defense. Although we agree with appellant that admission of the prior alibi defense was error, our review of the record leads us to conclude that the defect did not rise to the level of plain error. Accordingly, we affirm the judgment of conviction.\nThe pertinent facts are as follows. At approximately 9:00 a. m. on the morning of June 5, 1977, Byron Lindsey, an employee of the Gino's Restaurant at 1448 Pennsylvania Avenue, S.E., was working in the parking lot of that establishment preparing for the 11:00 a. m. opening of business, when he observed appellant at a nearby bus stop. After appellant failed to board any of the several buses that passed, he approached Mr. Lindsey and inquired about a job. Lindsey advised appellant to direct his inquiry to the manager, Antoine Perry, who, at that time was not on the premises. Mr. Perry arrived shortly thereafter and appellant confirmed his identity with Lindsey. After Lindsey completed his parking lot duties, appellant grabbed him by the arm, told him that \"This is a stick up . . .\", pointed a gun at his ribs and ordered him to gain entry into the rear of the restaurant. Lindsey rang the rear door bell while appellant stood out of view. When Mr. Perry opened the door, appellant entered, pushing Lindsey ahead of him, put the gun in Perry's back, and ordered him to open the safe of the establishment. Perry opened the safe and placed approximately $200 in a brown paper bag supplied by appellant. Appellant then fled and the police were notified and provided with a description of him.\nOne week later, on June 12, 1977, Police Officer Steven M. Smith observed appellant sitting on a brown paper bag at the same bus stop near Gino's Restaurant. Once again, appellant failed to board several buses that passed. Recalling the Gino's robbery and the description of the robber, Officer Smith attempted to question appellant. Appellant, however, had started to walk away from the bus stop, and he ignored Officer Smith's inquiries. Smith then exited his patrol car and confronted appellant. Appellant put his hand to his waistband while backing up in a nervous and fidgety manner. Officer Smith ordered appellant to remove his hand from his waist, conducted a pat\u0097down search, and discovered a butcher knife in appellant's waistband. Appellant was then arrested. Lindsey and Perry identified appellant's picture from a photographic array and subsequently identified him in a police lineup.\nIn response to the prosecution's demand for written proffer of an alibi defense, defense counsel, Alan Bayles, on February 11, 1978, tendered a handwritten note listing appellant's cousin, Keith Bundy, as a possible alibi witness. Mr. Bayles orally notified the prosecution that the defense would be that appellant was in the company of Keith Bundy, in the District of Columbia on the day of the crime. However, at the end of *767 February, Mr. Bayles informed the government that appellant no longer intended to call his cousin as an alibi witness, and he conveyed the impression that appellant would present no alibi defense.\nAt trial, commencing on June 23, 1978, appellant, now represented by Harvey Smith, testified that on the day of the crime, he was with a since\u0097deceased friend, Janice Perry, visiting the campus of her college, Virginia Union College, Richmond, Virginia. The prosecution asked for a side bar conference and there requested that the alibi be stricken from the record due to appellant's failure to give prior notification to the government in accordance with the Superior Court Rules of Criminal Procedure. A ruling on this request was postponed and, at the conclusion of appellant's testimony on direct examination, the court, after another conference with counsel, ordered a continuance to allow the government time to investigate appellant's new alibi. On the following day, another conference was held at which time defense counsel asserted, in effect, the attorney\u0097client privilege in an attempt to preclude the government from calling Mr. Bayles as a witness for impeachment purposes. The objection was denied as premature, and the government was granted an additional day to pursue its investigation.[2]\nWhen trial resumed, the prosecution cross-examined appellant concerning his prior alibi defense. No defense objection was raised, and appellant proceeded to testify that no previous alibi existed and that he intended to call his cousin merely as a character witness. The prosecution, over the objection[3] of defense counsel, then called Alan Bayles to the stand. Mr. Bayles testified that he disclosed to the prosecution in early February, 1978, appellant's alibi defense involving his cousin, but that in the latter part of that month he gave notice that appellant no longer intended to call Keith Bundy as an alibi witness.\nOn appeal, appellant contends[4] that the prosecution's cross-examination of him and direct examination of his former counsel concerning the subject of a previously withdrawn alibi defense violated Super.Ct.Cr.R. 12.1(f), and constituted reversible error. Rule 12.1(f) provides that:\n\nInadmissibility of Withdrawn Alibi. Evidence of an intention to rely upon an alibi defense, later withdrawn or of statements made in connection with such intention, is not admissible in any civil or criminal proceeding against the person who gave notice of the intention.\nThe line of questioning pursued by the prosecution clearly violated Rule 12.1(f) and therefore constituted error. However, because appellant did not object on the basis of this rule at trial, our review is limited to the question whether the error committed rose to the level of plain error. See Brown v. United States, D.C.App., 387 A.2d 728 (1978); Watts v. United States, D.C. App., 362 A.2d 706 (1976) (en banc). Under the plain error standard, the error complained *768 of must be so clearly prejudicial to substantial rights as to jeopardize the very fairness and integrity of the trial. Watts v. United States, supra. In this endeavor, we look to all the circumstances of the case to determine whether there is a probability that there has been a miscarriage of justice. Lloyd v. United States, D.C.App., 333 A.2d 387 (1975). After reviewing the record in the instant case, we conclude that admission of the challenged evidence did not constitute plain error requiring reversal.\nAt trial, the government produced substantial evidence strongly indicating appellant's guilt of the crimes charged. Byron Lindsey and Antoine Perry, the victimized employees of Gino's Restaurant, testified that appellant was the individual who threatened them at gunpoint. The two employees had the opportunity to get a good view of appellant during the robbery, and consequently, they identified him, without hesitation, both from a photographic array and from a police lineup. Additionally, the circumstances of appellant's arrest lend themselves to a finding of guilt: appellant was observed at the same bus stop from which he initiated his criminal activity the week before; he again carried an empty brown paper bag and he exhibited the same preliminary behavioral pattern of letting numerous buses pass him by; he attempted to avoid Officer Smith; and he was armed at the time of arrest. Although he testified that on the date of the robbery he was with Janice Perry touring her college campus and meeting her friends, appellant presented no evidence to corroborate this account and, indeed, he testified that he made no attempt to contact the people to whom he was allegedly introduced on the date of the robbery. Thus, we conclude that, quite apart from the testimony that appellant previously intended to present a different alibi defense, the government's evidence was so compelling as to justify a finding of guilt. While we strongly caution against the use of any evidence in violation of Rule 12.1(f), we hold that the error in the circumstances of this case was not so clearly prejudicial as to jeopardize the very fairness and integrity of trial. Finding no plain error, we affirm the convictions.\nAffirmed.\nNOTES\n[1] Appellant also contends that he was denied a fair trial due to the prosecutor's tactic of \"intimidating\" defense counsel during trial and that the trial court erred by not allowing appellant to testify regarding an unrelated criminal offense. After reviewing the record, we hold that these contentions are meritless.\n[2] After interviewing the family of the deceased Ms. Perry, the government concluded that it would be inappropriate to subpoena them to testify in light of the ordeal they had recently experienced in burying Ms. Perry and in participating in the trial of her murderer.\n[3] The objection lodged by counsel was based on the grounds previously raised during conference, i. e., that the attorney\u0097client privilege precluded the admission of Mr. Bayles' testimony.\n[4] Appellant also contends that the attorney\u0097client privilege precludes the admission of evidence of his conversations with Mr. Bayles regarding an alibi defense. We hold that the communications in question were not privileged. The privilege which attaches to a confidential communication between attorney and client is waived when the substance of that communication is related to a nonprivileged party. See, e. g., Gale v. United States, D.C. App., 391 A.2d 230 (1978), cert. denied, 439 U.S. 1133, 99 S.Ct. 1057, 59 L.Ed.2d 96 (1979). In the instant case, when the substance of appellant's prior alibi defense was disclosed to the prosecution by appellant's attorney, that information became public knowledge and was not subject to assertion of the attorney-client privilege. See, e. g., Underwater Storage, Inc. v. United States Rubber Co., 314 F.Supp. 546 (D.D.C.1970) (material disclosed to adverse party via discovery proceedings thereby became part of the public domain and was no longer subject to the attorney-client privilege).\n"} -{"text": "987 F.2d 927\n122 A.L.R.Fed. 825\nUNITED STATES of America, Appellee,v.Dwight G. TOWNSEND, Defendant-Appellant.\nNo. 747, Docket 92-1399.\nUnited States Court of Appeals,Second Circuit.\nArgued Jan. 5, 1993.Decided March 8, 1993.\n\nR. Peter Decato, Lebanon, NH (Nighswander, Martin & Mitchell, of counsel), for defendant-appellant.\nDavid V. Kirby, Chief, Crim. Div., D.Vt. (Charles A. Caruso, U.S. Atty., Peter W. Hull, Asst. U.S. Atty., D.Vt., of counsel), for appellee.\nBefore: KEARSE, WINTER, and ALTIMARI, Circuit Judges.\nALTIMARI, Circuit Judge:\n\n\n1\nDefendant-appellant Dwight G. Townsend appeals from a judgment entered after a jury trial in the United States District Court for the District of Vermont (Franklin S. Billings, Jr., Judge.), convicting him of intentionally intercepting the telephone conversations of third parties without their knowledge or consent in violation of 18 U.S.C. \u00a7 2511(1)(a) (1988). Townsend was sentenced to a prison term of twelve months to be followed by two years of supervised release.\n\n\n2\nOn appeal, Townsend contends that his conviction should be reversed because the district court erroneously instructed the jury as to the mens rea element of the crime charged. Specifically, Townsend contends that the district court instructed the jury that it could find Townsend guilty if he \"knowingly\" intercepted the telephone conversations, whereas the statute under which Townsend was prosecuted required the government to prove that he had acted \"intentionally.\" 18 U.S.C. \u00a7 2511(1)(a) (1988). Townsend further argues that the district court committed reversible error by excluding evidence which Townsend claims supported his professed motive in taping phone calls made to his office and residence.\n\n\n3\nFor the reasons set forth below, we affirm the judgment of the district court.\n\nBACKGROUND\n\n4\nIn September 1990, Special Agent Charles McGinnis, Jr. of the FBI began an investigation of Townsend's conduct as Sheriff of Orange County in Vermont. The investigation was prompted by a complaint lodged by a former deputy sheriff alleging that Townsend routinely used automatic recording equipment to capture the telephone conversations of his employees.\n\n\n5\nIn an initial interview with Special Agent McGinnis, Townsend denied that he had ever recorded conversations of third parties, and specifically denied recording a telephone conversation between Roseann Sayers and Reevie Rockhill, a present and a past employee respectively. Townsend did, however, admit that he had purchased recording equipment capable of automatically recording calls.\n\n\n6\nAlmost immediately after this initial interview, Townsend's attorney called Special Agent McGinnis in order to schedule another interview for Townsend to explain his answers, conceding that Townsend had not been \"completely candid\" in the first interview. In the second interview, Townsend admitted that he had \"accidentally\" taped the specific conversation about which Special Agent McGinnis had previously questioned him. However, Townsend continued to maintain that the equipment was routinely used to record only his own conversations. Townsend explained that he had been getting harassing phone calls at the sheriff's complex, which included his office and official residence, and was trying to capture these conversations on tape.\n\n\n7\nTownsend was subsequently indicted in May 1991, and his one count indictment charged him with violating 18 U.S.C. \u00a7 2511(1)(a) by surreptitiously recording the telephone conversations of third parties without their knowledge or consent. In February 1992, Townsend was tried by a jury before the United States District Court for the District of Vermont (Billings, J.). At trial, the government introduced Special Agent McGinnis's testimony concerning Townsend's initial denial and subsequent admissions. The government also presented the testimony of Townsend's former wife, who recounted that Townsend had purchased the automatic recording equipment and she observed that it was turned on most of the time. Moreover, Townsend's ex-wife testified that Townsend had played for her the specific conversation about which Special Agent McGinnis had questioned Townsend. The topic of this recorded conversation was the antipathy that both Roseann Sayers and Reevie Rockhill felt for Townsend. According to Townsend's ex-wife, one of the reasons Townsend gave for recording this conversation was to \"find out who might be in the office that was betraying him [sic].\" This recording was also played for one of Townsend's deputies who testified that Townsend explained that this was his way of keeping track of his employees' loyalties. Another of Townsend's former deputies testified that Townsend had played for him a recording of a conversation between the deputy and the deputy's wife. The deputy testified that after playing the recording Townsend told him: \"this shows you what I can do.\"\n\n\n8\nTownsend testified in his own defense, stating that he had purchased the equipment in order to capture harassing telephone calls he had received. Townsend admitted to recording only one conversation not involving himself--the conversation between Roseann Sayers and Reevie Rockhill about which both his ex-wife and former deputy had previously testified--but, according to Townsend, his recording of this conversation was accidental.\n\n\n9\nTownsend also sought to introduce testimony about the \"bad blood\" between himself and the previous sheriff, specifically concerning the condition in which Townsend found the sheriff's complex upon assuming the office. Townsend claims to have found dead rats, weapons missing, and a picture of a pig with the notation \"Kill the Pig, Townsend.\" Townsend attempted to introduce this testimony to support the proposition that he had additional reasons to be concerned about getting harassing phone calls. Through this testimony Townsend hoped to establish that he had a proper motive for employing the recording equipment. The district court excluded this testimony, pursuant to Fed.R.Evid. 403, on the ground that it was tangential to Townsend's motivation for putting in the recording equipment. The district court ruled that Townsend could testify to the harassing phone calls, but not to the unrelated problems with the former sheriff, since there was no evidence of any connection between the two.\n\n\n10\nFollowing a two-day trial, the jury convicted Townsend of the one count contained in the indictment. Thereafter, the district court denied Townsend's motion for a new trial, and sentenced Townsend to twelve months imprisonment.\n\n\n11\nTownsend now appeals.\n\nDISCUSSION\nI. The Jury Instruction\n\n12\nOn appeal, Townsend first contends that the district court erred by failing to provide the jury with the proper definition of \"intentionally\"--the mens rea element of 18 U.S.C. \u00a7 2511(1)(a). Specifically, Townsend argues that the district court improperly employed a model jury charge adapted from the definition of \"knowingly,\" whereas the statute under which he was prosecuted required the government to prove that he had acted \"intentionally.\" 18 U.S.C. \u00a7 2511(1)(a).\n\n\n13\nIn order to convict Townsend, the jury had to find that he \"intentionally\" intercepted the conversations of third parties without their knowledge or consent. 18 U.S.C. \u00a7 2511(1)(a). However, there are apparently no model jury instructions that define the word \"intentionally\" in this context. See, e.g., 1 Leonard B. Sand et al., Modern Federal Jury Instructions (Criminal) \u00a7 3A.01; Comm. on Model Criminal Jury Instructions Within the Eighth Cir., Manual Of Model Criminal Jury Instructions for the Dist. Courts Of The Eighth Cir. \u00a7 7 (1992); U.S. Sixth Cir. Dist. Judges Ass'n., Pattern Criminal Jury Instructions \u00a7\u00a7 2.05-2.09 (1991); United States Fifth Cir. Dist. Judges Ass'n., Pattern Jury Instructions: Criminal Cases \u00a7\u00a7 1.35-1.36 (1990). The court, therefore, solicited a proposed charge.\n\n\n14\nTownsend's counsel proposed that the following charge be given:\n\n\n15\nIn the case before you, the government must prove beyond a reasonable doubt that the defendant's acts were intentional. As used in the Electronic Communications Privacy Act, the term intentional is narrower than the dictionary definition of intentional. Intentional means more than that one voluntarily engaged in conduct or caused the result. Such conduct or the causing of the result must have been the person's conscious object. An intentional state of mind means that one's state of mind is intentional as to one's conduct or the result of one's conduct if such conduct or result is one's conscious objective. The intentional state of mind is applicable only to conduct and results. Since one has no control over the existence of circumstances, one cannot intend them. A common means to describe conduct as intentional or to say that one causes the result intentionally, is to state that it was done or accomplished on purpose. The term intention is not meant to connote the existence of a motive. Liability for intentionally engaging in prohibited conduct is not dependent on an assessment of the merit of the motive that led the person to disregard the law.\n\n\n16\nThe district court rejected this definition and instead provided the following definition, which was derived from a model jury instruction definition of \"knowingly\":\n\n\n17\nThe third element which must be proved by the government beyond a reasonable doubt is that the defendant acted intentionally when he intercepted the wire communication. Thus, before you can find that the defendant acted knowingly, you must be satisfied beyond a reasonable doubt that [the defendant] acted deliberately, intentionally, and understandingly; that is, that he knew what he was doing when he intercepted the wire communication.\n\n\n18\n[A. 63]. See Leonard B. Sand, et al., 1 Modern Federal Jury Instructions (Criminal) \u00a7 3A.01, at 3A-1.\n\n\n19\nAccording to Townsend, this charge misdefined the element of \"intent\" by utilizing a less restrictive requirement. Specifically, Townsend argues that by employing a \"knowingly\" standard the charge failed to provide for a defense of inadvertence. We disagree with this contention.\n\n\n20\nInitially we take heed of the warning issued in United States v. Bailey, 444 U.S. 394, 403, 100 S.Ct. 624, 631, 62 L.Ed.2d 575 (1980), that \"[f]ew areas of criminal law pose more difficulty than the proper definition of the mens rea required for any particular crime.\" While admittedly the charge given by the district court could have been more artfully drawn, the charge did make clear to the jury that it had to find that Townsend acted \"deliberately, intentionally, and understandingly.\" Consequently, Townsend cannot justifiably complain that the jury might misinterpret such a charge and convict him on the basis of finding that he negligently or inadvertently intercepted the telephone conversations of third parties without their knowledge or consent. One cannot deliberately act inadvertently. By convicting Townsend on the district court's charge, the jury necessarily discredited his testimony that the taping was inadvertent.\n\n\n21\nThe district court's charge required that the jury find that the defendant acted \"knowingly\", \"deliberately\", \"intentionally\" and \"understandingly.\" Townsend cannot be heard to complain about the use of the term \"deliberately\" or \"intentionally\" which are synonyms of the term \"purposefully.\" While it is true that the terms \"knowingly\" and \"understandingly\" were mingled in the charge, the court instructed the jury to find that Townsend \"acted deliberately, intentionally, and understandingly, that is, that he knew what he was doing when he intercepted the wire communication.\" Although the charge also used the term \"knowingly,\" viewed as a whole, there can be no doubt that the definition provided excluded any interception that might have been inadvertent. Therefore, we conclude that the charge in question properly instructed the jury as to the degree of culpability that the government needed to prove in order to meet its burden under the statute.\n\n\n22\nFinally, in order to forestall such problems in the future, we suggest that the following definition of \"intentionally\" be used when appropriate:\n\n\n23\nThe government must prove beyond a reasonable doubt that the defendant acted intentionally when [he or she committed the act charged]. Before you can find that the defendant acted intentionally, you must be satisfied beyond a reasonable doubt that the defendant acted deliberately and purposefully; that is, defendant's act must have been the product of defendant's conscious objective rather than the product of a mistake or an accident.\n\nII. The Evidentiary Ruling\n\n24\nTownsend also asserts that the district court erred in excluding Townsend's proffered testimony of his troubles with the previous sheriff. This testimony concerned the fact that dead rats had been left in the office, weapons had been taken from the office, and a picture of a pig had been left in the sheriff's residence with the notation \"Kill the Pig, Townsend.\" According to Townsend, the district court abused its discretion and committed reversible error in excluding this testimony on the ground that it was tangential. This argument is without merit.\n\n\n25\nPursuant to Federal Rule of Evidence 403, a trial judge can exclude evidence \"if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.\" Fed.R.Evid. 403. This court will not reverse a decision to exclude evidence as tangential under Rule 403 unless it constitutes an abuse of discretion. See, e.g., In re Brooklyn Navy Yard Asbestos Litigation, 971 F.2d 831, 840 (2d Cir.1992). Here no such abuse occurred.\n\n\n26\nTownsend contends that the excluded testimony was necessary to establish a proper motive for the automatic taping, i.e., to capture the harassing phone calls made to him on tape. There was, however, no established connection between these phone calls and the excluded evidence. Since Townsend was able to testify about the harassing phone calls, it was not error for the court to exclude the far less relevant testimony concerning Townsend's conflict with the former sheriff.\n\n\n27\nMoreover, 18 U.S.C. \u00a7 2511(a)(1) only requires intentional interception of communications, not willful interception. The question of whether the defendant had a good or evil purpose in utilizing the automatic recording equipment is, therefore, irrelevant. See S.Rep. No. 541 99th Cong., 2d Sess. 23 (1986), reprinted in 1986 U.S.C.C.A.N. 3555, 3578. All that is relevant is that Townsend intentionally intercepted communications between two unknowing and unconsenting individuals.\n\n\n28\nFinally, even if evidence of motivation had in some way been relevant, Townsend cannot complain that he was not provided with an opportunity to present such evidence. Townsend testified at length as to the harassing phone calls, which were the only reliable evidence of motive. The other evidence was only probative of Townsend's dispute with the former sheriff, not the harassing phone calls, and was properly excluded.\n\nCONCLUSION\n\n29\nBased on the foregoing, the judgment of the district court is affirmed.\n\n"} -{"text": "\n135 Wis.2d 334 (1986)\n400 N.W.2d 56\nFrank G. GUERTIN, Plaintiff-Appeallant,[\u0086]\nv.\nHARBOUR ASSURANCE COMPANY OF BERMUDA, LTD., International Harvester Company, Royal Insurance Company of America, Ryder Truck Rental, Inc., Edward Krissman, ABC Insurance Company and XYZ Corporation, Defendants-Respondents.\nNo. 85-2316.\nCourt of Appeals of Wisconsin.\nSubmitted on briefs August 5, 1986.\nDecided November 21, 1986.\n*335 For the plaintiff-appellant the cause was submitted on the briefs of Hope K. Olson and Dean M. Horwitz from the firm of Goldberg, Previant, Uelmen, Gratz, Miller & Brueggeman of Milwaukee.\nFor the defendants-respondents Harbour Assurance Company of Bermuda, Ltd., and International Harvester Company the cause was submitted on the briefs of Michael J. Gonring from the firm of Quarles & Brady, Milwaukee.\n*336 For the defendants-respondents Ryder Truck Rental, Inc. and Edward Krissman the cause was submitted on the briefs of Douglas J. Carroll of Arnold, Murray, O'Neill & Schimmel, Milwaukee.\nBefore Moser, P.J., Wedemeyer and Sullivan, JJ.\nSULLIVAN, J.\nFrank G. Guertin appeals a summary judgment dismissing his complaint for personal injuries sustained in Illinois. The trial court applied the borrowing statute, sec. 893.07(1), Stats., and concluded that the action was barred by Illinois's two-year statute of limitations. We agree with the trial court and, accordingly, affirm the judgment.\nThis case arises out of personal injuries sustained by Guertin on February 15, 1982. Guertin, a truck driver, was hurt when he fell from the fuel tank of his employer's semi-tractor. The semi-tractor, designed and manufactured by International Harvester Company, was sold or leased by Ryder Truck Rental, Inc., to Guertin's employer, JWI Trucking, Inc. Ryder's employee, Edward Krissman, maintained and serviced the truck at Ryder's Milwaukee garage prior to Guertin's injuries. Guertin, a Wisconsin resident, was in Illinois when he fell off the truck.\nGuertin commenced this suit in Wisconsin on October 22, 1984, against Harvester, Ryder, Krissman, and their insurers, alleging negligence and strict liability. Harvester moved for dismissal of the complaint on the ground that the action was barred by Illinois's two-year statute of limitations. Harvester's insurer, Harbour Assurance Company of Bermuda, Ltd., moved for dismissal on the grounds of misjoinder and lack of personal jurisdiction. The trial court granted Harvester's motion and therefore declined to address Harbour's motion. *337 Judgment was entered dismissing Guertin's complaint on the merits, and Guertin appeals.\nAt issue is the meaning of the phrase \"foreign cause of action\" in sec. 893.07, Stats., which reads as follows:\n(1) If an action is brought in this state on a foreign cause of action and the foreign period of limitation which applies has expired, no action may be maintained in this state.\n(2) If an action is brought in this state on a foreign cause of action and the foreign period of limitation which applies to that action has not expired, but the applicable Wisconsin period of limitation has expired, no action may be maintained in this state.\nThis section replaced sec. 893.205(1), Stats. (1977), which read as follows:\nAn action to recover damages for injuries to the person [shall be brought within three years]....But no action to recover damages for injuries to the person, received without this state, shall be brought in any court in this state when such action is barred by any statute of limitations of actions of the state or country in which such injury was received unless the person so injured shall, at the time of such injury, have been a resident of this state.\nGuertin contends that Wisconsin's \"center of gravity\" approach to conflict of laws questions must be applied to the various contacts in this case to determine whether his cause of action is foreign. He concludes that Wisconsin has had more significant contacts than Illinois has had in this case. The defendants asserts, a the trial court held, that a cause of action is foreign or local depending on where the cause of action accrues. They reason that no cause of action accrues until there is an injury and that the injury in this case occurred in a *338 foreign state. Hence, they conclude, it is a foreign cause of action. We agree.\nThe interpretation of a statute is a question of law, which we review without deference to the trial court's reasoning. Town of Seymour v. City of Eau Claire, 112 Wis. 2d 313, 319, 332 N.W.2d 821, 823 (Ct. App. 1983). The primary goal in statutory construction is to give effect to legislative intent. Barth v. Board of Education, 108 Wis. 2d 511, 517, 322 N.W.2d 694, 697 (Ct. App. 1982). A statute, phrase, or word is ambiguous when capable of being interpreted by reasonably well-informed persons in two or more senses. When a statute or part there of is ambiguous, it is permissible to look to the legislative intent, which is to be found in the language of the statute, in relation to the statute's context, scope, history, subject matter, and the object intended to be accomplished. Town of Seymour, 112 Wis. 2d at 319, 332 N.W.2d at 824.\nIn the context of a personal injury action, the phrase \"foreign cause of action\" is ambiguous because it can reasonably mean either a cause of action accruing in a foreign state or one with which the foreign state has had more significant contacts. We therefore look to the Judicial Council Committee's 1979 note to sec. 893.07, Stats. (emphasis added):\nSub. (1) applies the provision of s. 893.05 that the running of a statute of limitations extinguishes the right as well as the remedy to a foreign cause of action on which an action is attempted to be brought in Wisconsin in a situation where the foreign period has expired. Sub. (1) changes the law of prior s. 893.205(1), which provided that a resident of Wisconsin *339 could sue in this state on a foreign cause of action to recover damages for injury to the person even if the foreign period of limitation had expired.\n\nSub. (2) applies the Wisconsin statute of limitations to a foreign cause of action if the Wisconsin period is shorter than the foreign period and the Wisconsin period has run.\nThis note, in effect, equates an \"action to recover damages for injuries to the person, received without this state,\" sec. 893.205(1), Stats. (1977), with \"a foreign cause of action\" under sec. 893.07. This note exhibits the history and the object intended to be accomplished by the legislature in adopting sec. 893.07. We agree with the Committee's implicit interpretation.\nGuertin relies on Officer Supply Co. v. Basic/Four Corp., 538 F. Supp. 776 (E.D. Wis. 1982), the only decision to date addressing the interpretation of sec. 893.07, Stats. The Officer Supply court applied Wisconsin's center of gravity conflict of laws analysis to the facts of a contract case, concluding that it was not \"a foreign cause of action\" under sec. 893.07. Id. at 782. Guertin suggests that the center of gravity approach must be used in this case as well, and that such an analysis would show that his cause of action is not foreign. His reliance on Office Supply, however, is misplaced.\nIn interpreting sec. 893.07, Stats., the Office Supply court said that the legislature's use of the term \"foreign cause of action\" \"suggests that where the cause of action arises in Wisconsin, Wisconsin's statute of limitations is applicable to it.\" Id. at 782. The court then followed the center of gravity analysis that was used in Air Products & Chemicals, Inc. v. Fairbanks Morse, Inc., 58 Wis. 2d 193, 201-04, 206 N.W.2d 414, 418-19 (1973), to decide a conflict of laws question involving statutes of limitations *340 in a contract case. The Office Supply court used the center of gravity approach to determine where the cause of action arose, 538 F. Supp. at 782, concluding that \"the parties' most significant contacts involving the contract are with Wisconsin and thus the cause of action arose in Wisconsin and [Wisconsin's] six-year statute of limitation policy. . . is applicable. . . .\"Id.\nWe agree with the Office Supply court that the phrase \"foreign cause of action\" refers to a cause of action that arose outside of Wisconsin. We must next determine whether Guertin's cause of action arose in Illinois or Wisconsin.\nIt may be that a center of gravity analysis must be done to decide where a contract action arose and, hence, whether it is a foreign cause of action. That question, however, is not before us. To determine where Guertin's personal injury action arose, we need only look at where the last element of the cause of action, his injury, took place. Because Guertin was injured in Illinois, his cause of action is foreign for the purposes of sec. 893.07, Stats., and the shorter Illinois statute of limitations applies.\nGuertin argues that this interpretation revives the doctrine of lex loci delicti, which states that the court must apply the substantive law of the place of the injury. This doctrine was expressly rejected for conflict of laws questions in favor of the center of gravity approach. See Air Products, 58 Wis. 2d at 202-03, 206 N.W.2d at 418-19. We are dealing here, however, with a question of statutory interpretation, not with a common law conflict of laws question. A borrowing statute would be meaningless if it did not preclude a traditional conflict of laws analysis. If the legislature intended the *341 courts to apply the center of gravity approach to all conflicts between statutes of limitations, it would not have created sec. 893.07, Stats. A statute should not be construed such that any part of its rendered surplusage. We may not presume that any part of a statute, much less an entire statute, is superfluous. See State v. Wisconsin Telephone Co., 91 Wis. 2d 702, 714, 284 N.W.2d 41, 46 (1979).\nWe conclude that Guertin's complaint addressed a foreign cause of action that arose in Illinois. Illinois's two-year statute of limitations, rather than Wisconsin's three-years statute, applies to bar the action. Sec. 893.07, Stats. We thus affirm the judgment dismissing the complaint on the merits, and it is unnecessary to address whether the court had personal jurisdiction over Harbour.\nBy the Court.\u0097Judgment affirmed.\nNOTES\n[\u0086] Petition to review granted.\n"} -{"text": "\n107 Ariz. 283 (1971)\n486 P.2d 181\nIsabelle EDWARDS and Mason Edwards, her husband, Appellants,\nv.\nEdwin B. YOUNG and Edwin F. Young, Appellees.\nNo. 10260-PR.\nSupreme Court of Arizona, In Banc.\nJune 24, 1971.\nJ. William Moore, Phoenix, for appellants.\nJohnson & Tucker, Phoenix, for appellees.\nSTRUCKMEYER, Chief Justice.\nAppellants Isabelle and Mason Edwards instituted suit against Edwin B. Young, a minor, and Edwin F. Young, his father, for injuries suffered by Isabelle as a result of an automobile accident allegedly caused *284 by the tortious conduct of the minor, Edwin B. Young. A jury trial resulted in a verdict for the Youngs, and after a motion for a new trial was denied, this appeal followed. The Court of Appeals dismissed the appeal and we accepted review to consider the question raised.\nThe problem centers around the proper interpretation of the Arizona Rules of Civil Procedure, 16 A.R.S. Rule 59(d) thereof requires that a motion for a new trial shall be filed not later than ten days after entry of judgment. Rule 73(b) requires that notice of appeal must be filed within sixty days from the judgment, but that the time for appeal is extended by a \"timely\" motion for a new trial. In that event, the sixty days runs from the entry of an order denying a motion for a new trial.\nThis sequence of events occurred:\n\n\n April 17, 1969 Judgment entered for appellees.\n April 22, 1969 Appellant's attorney received actual notice that judgment\n had been entered.\n May 2, 1969 Motion for a new trial served and filed.\n June 3, 1969 Order entered denying a motion for a new trial.\n\nNotice of appeal was filed on August 4, 1969, within sixty days of June 3rd, but not within sixty days of entry of judgment.\nAppellant's counsel states that he was not in court on the 17th of April, the day judgment was rendered, and he did not learn of the judgment until five days later. He immediately called opposing counsel and the two agreed that appellant should then have the full ten days contemplated in Rule 59(d) in which to serve a motion for a new trial. The trial court accepted the motion as timely, and ruled on the merits. Appellant then filed his notice of appeal. The Court of Appeals refused to entertain the appeal on the merits, stating that it lacked jurisdiction because the motion for a new trial had not been \"timely.\"\nThe instant case is one of first impression in Arizona. Because Arizona has substantially adopted the Federal Rules of Civil Procedure, we give great weight to the federal interpretations of the rules. Jenney v. Arizona Exp., Inc., 89 Ariz. 343, 362 P.2d 664; Harbel Oil Co. v. Steele, 80 Ariz. 368, 298 P.2d 789.\nAppellant relies on federal interpretations, Thompson v. Immigration and Naturalization Service, 375 U.S. 384, 84 S.Ct. 397, 11 L.Ed.2d 404, and Pierre v. Jordan, 333 F.2d 951 (9th Cir.), 8 F.R.2d 73a. 63, Case 1. Both concerned a lack of \"timeliness\" under Rule 59 and the subsequent appeals under Rule 73. Both appeals were allowed because of the \"unique circumstances\" existing. In Thompson, the petitioner relied on a statement of the district court that the motion was made \"in ample time\" and in Pierre, appellant was a layman acting in propria persona, whose ignorance of the federal rules was felt excusable.\nNonetheless, we do not think the appeal was timely. It is settled in Arizona that the perfecting of an appeal within the time prescribed is jurisdictional; and, hence, where the appeal is not timely filed, the appellate court acquires no jurisdiction other than to dismiss the attempted appeal. Patterson v. Patterson, 102 Ariz. 410 at 415, 432 P.2d 143; Murphey v. Gray, 84 Ariz. 299 at 307, 327 P.2d 751; Harbel Oil Co. v. Steele, supra, 80 Ariz. at 370, 298 P.2d 789; In re Gipson's Estate, 64 Ariz. 181 at 183, 167 P.2d 383; Burney v. Lee, 59 Ariz. 360, 129 P.2d 308.\nThere are, of course, two additional facts which were not present in the foregoing cases; first, the understanding of opposing counsel that appellant would have a full ten days after he received notice of the judgment within which to file the motion for a new trial, and that the trial court ruled upon the motion for a new trial. The majority in Thompson recognized the \"obvious great hardship to a party.\" The four dissenting judges stated, \"Rules of procedure are a necessary part *285 of an orderly system of justice. Their efficacy, however, depends upon the willingness of the courts to enforce them according to their terms.\"\nRule 6(b) of the Arizona Rules of Civil Procedure provides that the time under 59(d) may not be enlarged. It is a corollary of Federal Rule 6(b) and provides:\n\"6(b) Enlargement. When by these rules or by a notice given thereunder or by order of court an act is required or allowed to be done at or within a specified time, the court for cause shown may, at any time in its discretion:\n* * * * * *\n2. upon motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect, but it may not extend the time for taking any action under Rule * * * 59(d), * * *.\"\nWe are convinced that where, as here, the Rules of Civil Procedure specifically recognize that the time for filing of a motion for a new trial may not be enlarged, the efficacy of the rule depends upon the willingness of the courts to enforce it. We hold that the time may not be extended by agreement of counsel nor is jurisdiction thereby conferred upon the trial court to rule upon the merits of the motion.\nAlthough this holding may create some hardship as in the instant case, the rule is clear and we take it as we find it. In general, opposing parties have their rights too, and one of them is to feel secure in the knowledge that they are finally freed from the burdens of a suit. They cannot do this as long as a case may be re-opened because of allegedly \"unique circumstances\" occurring after the time for appeal has passed.\nThe appeal is dismissed.\nHAYS, V.C.J., and UDALL and LOCKWOOD, JJ., concur.\nNOTE: Justice JAMES DUKE CAMERON did not participate in the determination of this matter.\n"} -{"text": "\n153 Ill. App.3d 417 (1987)\n505 N.E.2d 1107\nTHE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee,\nv.\nDISBY SEALS, Defendant-Appellant.\nNo. 84-3041.\nIllinois Appellate Court \u0097 First District (2nd Division).\nOpinion filed February 24, 1987.\nRehearing denied March 30, 1987.\n*418 *419 *420 James J. Doherty, Public Defender, of Chicago (Nicolette Katsivalis and Ronald P. Alwin, Assistant Public Defenders, of counsel), for appellant.\nRichard M. Daley, State's Attorney, of Chicago (Thomas V. Gainer, Jr., Paula M. Carstensen, and Kathryn A. Gallanis, Assistant State's Attorneys, of counsel), for the People.\nJudgment affirmed in part and cause remanded.\nJUSTICE HARTMAN delivered the opinion of the court:\nDefendant appeals his convictions for voluntary manslaughter and aggravated battery and his concurrent sentences of 15 years' imprisonment for manslaughter and 5 years' imprisonment for aggravated battery. He raises as issues whether: (1) the circuit court erred in not finding that the State's use of peremptory challenges improperly excluded black jurors because of their race; (2) the circuit court erred in admitting certain demonstrative evidence; (3) the circuit court erred in refusing to admit into evidence a certified copy of the homicide victim's aggravated-battery conviction; (4) defendant's due process rights were violated by improper argument by the prosecutor; (5) the juvenile court abused its discretion by transferring the case for prosecution under the criminal code; and (6) the circuit court abused its discretion by considering improper factors at sentencing.\nOn November 17, 1983, defendant Disby Seals, then age 14, a member of the Puerto Rican Stones gang, fired five shots from a.45-caliber semi-automatic pistol that killed Ricky Perez, age 19, a member of the Latin Eagles, and wounded Johnny Nieves, age 17, another Latin Eagle. Defendant had been walking with two female friends, Gloria Galvan, age 17, and Kathy Curtis, age 16, near Blaine School when they met three members of the Latin Eagles: Edwin Villariny, age 17, Perez, and Nieves. Nieves told Galvan that she should not wear the sweater she was wearing, and Galvan replied she would wear what she pleased. Perez then asked Nieves, \"Who is that punk?\" referring to defendant. Two different versions of what happened next were given at trial.\nAccording to Nieves and Villariny, Nieves told Perez that defendant had fired shots at them four weeks earlier. Perez then turned to look at defendant, who drew a pistol from his waistband, causing Perez, Villariny, and Nieves to start running away. Defendant chased them, shouted \"Stone Love,\" and fired shots which hit *421 Perez and Villariny.\nDefendant and his two companions asserted that Nieves, in addition to talking to Galvan, had reached out and tried to grab her sweater and a struggle began. According to defendant, Perez asked defendant what gang he belonged to. After defendant did not reply, Villariny put his hand in the front waistband of his pants as if to pull out a gun and Perez, holding his hands closed and chest high, started towards defendant. Defendant asserts he believed Villariny would shoot him and Perez would hit him. Defendant took one step back, pulled out his gun, and fired five times. According to defendant he did not aim the gun, had never used a gun before, had heard of Nieves and Villariny's having guns, and believed the three Latin Eagles were going to kill him.\nAfter the shooting, defendant and his companions ran away. He returned the gun to Jose Rivera, leader of the Puerto Rican Stones. Defendant then went to 1137 West Belmont, where he was arrested. Perez, Villariny, and Nieves were taken to Illinois Masonic Hospital. Villariny had a bullet removed from his leg which had entered from the back. Villariny also had a bullet bruise to his hip. Perez died at the hospital of massive internal bleeding caused by a bullet that entered through his back and lacerated his lung, bronchus, and aorta.\nDefendant claimed to have had three previous hostile encounters with Nieves. On the last day of school in June 1982, while walking home with his younger sister he had been punched by Nieves and Villariny when he denied being a gang member. A third Latin Eagle present kicked defendant in the stomach. As defendant and his sister ran away, Nieves followed and shouted that he would kill defendant the next time they met. Defendant believed he saw a gun in Nieves' hands. In September 1982, defendant and a friend came across Nieves, who ripped a jacket of his friend and reminded defendant of their past meeting. In October of 1983, Nieves hit another friend of defendant's with a crowbar and took a swing at defendant. Defendant further stated he had been given the gun he used on November 17 earlier that day by Jose Rivera for protection against Latin Eagles.\nDefendant was indicted on two counts of attempted murder, one count of murder, and one count of aggravated battery. (Ill. Rev. Stat. 1983, ch. 38, pars. 8-4, 9-1, 12-4.) After a hearing, the juvenile court ordered defendant to be tried as an adult. A jury convicted defendant of voluntary manslaughter and aggravated battery on October 26, 1984. The circuit court sentenced defendant as previously noted. Defendant appeals.\n\n\n*422 I\nDefendant contends that the prosecution improperly used peremptory challenges to disproportionately exclude black jurors from his jury. The United States Supreme Court's recent decision on this subject (Batson v. Kentucky (1986), 476 U.S. 79, 90 L.Ed.2d 69, 106 S.Ct. 1712) supports defendant's theory. The State asserts that the Batson analysis should not be used and, in any case, no purposeful discrimination took place.\n\u0095 1, 2 Prosecutors may not purposefully discriminate against a racial group in selecting a petit jury in a trial of a defendant belonging to that group. To establish a prima facie case of discrimination, a defendant must demonstrate that he is a member of a recognizable racial group and that the prosecutor used peremptory challenges to remove members of his race from the jury panel. (Batson v. Kentucky (1986), 476 U.S. 79, ___, 90 L.Ed.2d 69, 88, 106 S.Ct. 1712, 1723.) The defendant must then show the relevant facts and circumstances of the case raise an inference of discrimination. After this prima facie case is made, the State has the burden of putting forward a neutral explanation for its challenges. The circuit court must then determine whether defendant has proved purposeful discrimination. 476 U.S. 79, ___, 90 L.Ed.2d 69, 88-90, 106 S.Ct. 1712, 1723-24.\n\u0095 3 The State contends Batson should not be applied retroactively, citing the views of four Supreme Court justices in Batson (476 U.S. 79, ___, ___, ___, 90 L.Ed.2d 69, 91, 97, 110-11, 106 S.Ct. 1712, 1726, 1731, 1741-42) and an even more recent case barring Batson relief for cases on collateral review (Allen v. Hardy (1986), 478 U.S. ___, 92 L.Ed.2d 199, 106 S.Ct. 2878). The Supreme Court has now decided this issue adversely to the State's position in Griffith v. Kentucky (1987), 479 U.S. ___, 93 L.Ed.2d 649, 107 S.Ct. 708. There the Supreme Court retroactively applied Batson to all cases pending on direct review, such as the present case.\nThe next question to be considered is whether the facts in this case demonstrate a prima facie case of discrimination. In Batson, the prosecutors excluded four black jurors. The resulting jury was all white. (Batson v. Kentucky (1986), 476 U.S. 79, ___, 90 L.Ed.2d 69, 78, 106 S.Ct. 1712, 1715.) In the instant case, the record indicates the prosecutors used 10 peremptory challenges to exclude 6 blacks, 1 Latino, and 3 whites, one of the blacks being excluded from becoming an alternate juror. Defendant, the child of a racially mixed marriage, was described by the defense as having the appearance of a black. Only one black served on the actual jury that convicted him. Notwithstanding the fact that one black juror did serve, Batson does *423 not require complete exclusion of a racial group to prove discrimination. (See Fleming v. Kemp (11th Cir.1986), 794 F.2d 1478, 1483 (pointing out that otherwise prosecutors could allow one or two black jurors to serve to immunize their other challenges).) In pre-Batson decisions, made under State constitutions, several courts found discrimination when one black juror served, even in cases when that juror was jury foreman. State v. Neil (Fla. 1984), 457 So.2d 481, 482-83, 487; Commonwealth v. Soares (1979), 377 Mass. 461, 473, 387 N.E.2d 499, 508, cert. denied (1979), 444 U.S. 881, 62 L.Ed.2d 110, 100 S.Ct. 170. See also United States v. McDaniels (E.D. La. 1974), 379 F. Supp. 1243, 1244.\n\u0095 4 Here, the prosecutors excluded twice as many black jurors as white jurors, with the result that only one black juror and one Hispanic juror served. The voir dire is preserved and the reasons for exclusion, other than race, are not apparent. This disproportionate use of peremptory challenges establishes a prima facie case of discrimination requiring a neutral explanation by the prosecutors or a new trial. The cause therefore must be remanded to the circuit court for reconsideration of defendant's motion for a mistrial based upon the exclusion of potential minority jurors from the jury.\nBecause we sustain defendant's conviction and sentencing otherwise, as the following discussion reveals, the cause will be deemed affirmed in the event no systematic exclusion based upon race is found by the circuit court after reconsideration and there is no further review sought here. In the event such impermissible exclusion of potential jurors is found by the circuit court, a mistrial shall be declared and defendant shall be granted a new trial.\n\nII\nDefendant asserts that the circuit court erred in admitting a.45-caliber handgun into evidence because the State failed during discovery to disclose its intent to use the weapon, claiming the prejudicial impact of the weapon outweighed its probative value. The State replies that defendant was not prejudiced by the use of the gun, which helped Sergeant Vincent Lamoro testify regarding the casings found at the crime site.\n\u0095 5 Demonstrative evidence can be used to make other testimony more understandable. (People v. Chatman (1981), 102 Ill. App.3d 692, 701, 430 N.E.2d 257.) If it provides a visual aid for the jury, it should be used for factual explanation, not dramatic effect. (Smith v. Ohio Oil Co. (1956), 10 Ill. App.2d 67, 75, 77, 134 N.E.2d 516.) The use of demonstrative evidence is within the discretion of the trial court. (10 Ill. App.2d 67, *424 76-77, 134 N.E.2d 526.) It should be observed that defendant in the present case admitted firing the gun that caused the injuries and death, his defense having been based upon the theory of self-defense. The jury was told that the gun demonstrated was not the gun used in the shootings, since that weapon was never recovered.\n\u0095 6 In the case sub judice, the gun was used only briefly during Sergeant Lamoro's testimony, but was not permitted to go to the jury. It may have helped explain Sergeant Lamoro's testimony. When original objects are unavailable, similar or identical physical objects have been allowed into evidence. See People v. Chatman (1981), 102 Ill. App.3d 692, 701-02, 430 N.E.2d 257; see also Fedt v. Oak Lawn Lodge, Inc. (1985), 132 Ill. App.3d 1061, 1069, 478 N.E.2d 469, appeal denied (1985), 108 Ill.2d 561.\n\u0095 7 Defendant's discovery motion had requested a description of any tangible objects which the prosecution intended to use. A gun is a tangible object. Accordingly, the State should have disclosed its intent to use the gun. In view of the limited use of the gun, however, this error in discovery response did not prejudice defendant. People v. Greer (1980), 79 Ill.2d 103, 117, 120, 402 N.E.2d 203.\n\nIII\nDefendant also contends that he was prejudiced by the court's failure to admit into evidence a certified copy of the homicide victim's prior conviction for aggravated battery because the State tried to minimize that incident when a defense witness testified to the battery. The State responds that such evidence would have been cumulative and that even defendant's version of the facts asserts Villariny, not Perez, was the aggressor.\n\u0095 8 A defendant claiming self-defense has the right to present evidence of a victim's aggressive and violent behavior which can be relevant to indicate which party was the aggressor. (People v. Lynch (1984), 104 Ill.2d 194, 199-200, 470 N.E.2d 1018.) Battery convictions are fairly reliable evidence of a violent character. (104 Ill.2d 194, 201, 203, 470 N.E.2d 1018; People v. Trimble (1985), 131 Ill. App.3d 474, 477, 475 N.E.2d 971.) Before a court admits evidence of a victim's character, a defendant must provide some evidence that the victim was the aggressor. (People v. Lynch (1984), 104 Ill.2d 194, 204, 470 N.E.2d 1018.) Here, defendant testified that he saw Villariny reach into his pants, thought he was going to pull out a gun and kill him, and therefore pulled out the gun given him by Rivera for protection and began shooting at the victims. The only potential aggressor at that point was Villariny, not Perez, whose criminal record was at issue. *425 Although defendant claimed that Perez advanced closely upon him at the same time that Villariny allegedly reached for a gun, both shooting victims were shot from the back.\n\u0095 9 The record also discloses that substantial evidence of the specific prior incident had been presented. Therefore, failure to permit additional evidence of that same incident may be deemed harmless error. (People v. Cleveland (1986), 140 Ill. App.3d 462, 471-72, 488 N.E.2d 1276.) Daniel Greer was involved in that altercation and testified in detail with respect to Perez' role in the battery which was the subject of the criminal record sought to be admitted. Any error in its exclusion from evidence, therefore, was harmless.\n\nIV\nDefendant asserts improper and prejudicial remarks of the prosecutors both separately and cumulatively denied him a fair trial. The State contends that these remarks are proper comment or, alternatively, were harmless error.\n\nA\nIn closing rebuttal the prosecutor urged the jury not to find a verdict of voluntary manslaughter because \"[t]o get to that point, however, you have to believe Disby Seals. You have to believe the defense case.\" Defense counsel's objection to shifting the burden was overruled and the prosecutor continued, stating, \"because the minute he puts a case on, that case is subject to the same scrutiny that the People's case is.\"\n\u0095 10, 11 An accused is presumed innocent until a jury finds otherwise beyond a reasonable doubt. (People v. Ray (1984), 126 Ill. App.3d 656, 661, 467 N.E.2d 1078.) It is improper to argue that the defendant has to provide evidence to create a reasonable doubt. (People v. Weinstein (1966), 35 Ill.2d 467, 469-70, 220 N.E.2d 432.) Although the prosecutor's argument, that the jury had to believe defendant to find voluntary manslaughter, not murder, may have been improper, this error was harmless since the jury convicted defendant of voluntary manslaughter, not murder.\n\u0095 12 Defendant's claimed error in the prosecutor's characterization of the burden of proof as not overwhelming and the same in every jurisdiction cannot be sustained. Such remarks are not improper. People v. Bryant (1983), 94 Ill.2d 514, 523, 447 N.E.2d 301; People v. Calhoun (1986), 144 Ill. App.3d 829, 834, 494 N.E.2d 498.\n\n\n*426 B\n\u0095 13 Defendant urges error in the prosecutor's assertedly unfair arguments that defendant had run away from home and was living with gang members. One of the prosecutors asserted that defendant was living with the Puerto Rican Stones; he did not state that defendant ran away from home. Defendant testified that he considered the gang very important in his life, but that he lived elsewhere with a friend who was not a gang member. Although the prosecution may not assert a fact not based on the record, it was harmless in these circumstances since defendant's gang membership was admitted.\n\nC\nDefendant asserts that other improper prosecutorial remarks prejudiced him, particularly by their cumulative effect; however, none of these remarks, either separately or cumulatively, rises to the level of prejudicial error.\n\nV\nDefendant contends that the juvenile court abused its discretion by ordering a transfer for defendant's prosecution as an adult, overemphasizing that a life was lost. By statute, six factors must be considered in making such a decision (Ill. Rev. Stat. 1983, ch. 37, par. 702-7(3)(a)), which include whether: (1) there is sufficient evidence for a grand jury indictment; (2) there is evidence that the alleged offense was committed in an aggressive and premeditated manner; (3) the minor's age; (4) his previous history; (5) facilities are available to the juvenile court for the minor's treatment and rehabilitation; and (6) his best interest and the public's security require that he continue in custody or under supervision for a period extending beyond his minority.\n\u0095 14 The juvenile court gave attention to all these factors, together with the evaluations of a probation officer, psychiatrist, and psychologist. Defendant was just two months short of age 15 when he shot his victims and had two pending charges against him. There is no evidence to justify a finding of abuse of the court's discretion. People v. Clark (1986), 144 Ill. App.3d 420, 427-28, 494 N.E.2d 551; see People v. Taylor (1979), 76 Ill.2d 289, 300-01, 391 N.E.2d 366.\n\nVI\nAs his final argument, defendant insists there was an abuse of discretion in his sentencing. Defendant received the maximum sentence on both counts, 15 years' imprisonment for voluntary manslaughter *427 and a concurrent term of 5 years' imprisonment for aggravated battery. (Ill. Rev. Stat. 1983, ch. 38, pars. 9-2(c), 12-4(e), 1005-8-1(4) and (6).) The court emphasized that one victim had died and that shooting people in the back was a \"cowardly act.\" It also stated: \"I will never understand the jury's verdict * * *.\"\nThe court heard testimony in both aggravation and mitigation. A teacher at Oak Park-River Forest High School testified that six months after the shooting, he and defendant had an argument during which defendant threatened to get a .45-caliber gun and kill him. In mitigation, a minister testified to defendant's improvement since the shooting and defendant's uncle testified to his lack of a father image and his recent living free of gang influence.\n\u0095 15 The trial court is best suited to determine the most appropriate sentence. (People v. Hicks (1984), 101 Ill.2d 366, 375, 462 N.E.2d 473; People v. Staten (1986), 143 Ill. App.3d 1039, 1058, 1060, 493 N.E.2d 1157.) The sentence should contemplate both the seriousness of the offense and defendant's potential for rehabilitation. (Ill. Const. 1970, art. I, sec. 11.) Here the teacher's testimony raised a serious doubt concerning defendant's potential for rehabilitation. The comment of the judge about not understanding the jury verdict is similar to another comment by a sentencing judge recently held not improper. (People v. Russell (1986), 143 Ill. App.3d 296, 304-05, 492 N.E.2d 960.) We find no abuse of discretion.\nIn consideration of the foregoing, we affirm and remand for consideration by the circuit court of defendant's claim of juror selection discrimination. In the absence of such a finding, the conviction and sentence stand affirmed. Should the circuit court find an improper use of the State's peremptory challenges, it is directed to vacate the conviction and sentencing and grant defendant a new trial.\nAffirmed in part and remanded with directions.\nSCARIANO, P.J., and STAMOS, J., concur.\n"} -{"text": "334 F.2d 768\nFOODTOWN OF OYSTER BAY, INC., Appellant,v.DILBERT'S LEASING AND DEVELOPMENT CORPORATION Debtor-Appellee.\nNo. 510, Docket 28952.\nUnited States Court of Appeals Second Circuit.\nArgued June 12, 1964.Decided July 20, 1964.\n\nLawrence G. Nusbaum, Jr., New York City, for appellant.\nDaniel A. Shirk, New York City (Joseph Jaspan, Brooklyn, N.Y., on the brief), for debtor-appellee.\nBefore FRIENDLY, SMITH and MARSHALL, Circuit Judges.\nJ. JOSEPH SMITH, Circuit Judge.\n\n\n1\nFoodtown of Oyster Bay, Inc., the lessee of store premises at 111 South Street, Oyster Bay, New York, appeals from an order of the United States District Court for the Eastern District of New York, Matthew T. Abruzzo, District Judge, awarding possession of the leased premises and a judgment of $1,261.12 for unpaid rent to the debtor-lessor, Dilbert's Leasing and Development Corporation, which is currently in reorganization under Chapter X of the Bankruptcy Act. We find no error and affirm the order of the district court.\n\n\n2\nOn January 10, 1963, Dilbert's Leasing and Development Corporation leased the premises for a term of ten years, commencing April 1, 1963, to One Eleven South Street Corporation for a monthly rental of $2,579.27. A rider to the lease obligated the lessee to pay as additional rent the amount by which the real property taxes on the premises exceeded the sum of $10,699.24. This additional rent was due on the first day of the month following the lessor's notifying the tenant of the assessment of excess taxes. On February 5, 1963 the lessor filed a petition for an arrangement under Chapter XI of the Bankruptcy Act. On March 14, 1963, the same day the lessor filed an amended petition for relief under Chapter X, the lease was assigned to the appellant.\n\n\n3\nOn March 5, 1964 the trustee of the lessor petitioned the district court for an order to show cause why the lessee should not be dispossessed and why a judgment for unpaid and overdue rent should not be entered. The petition alleged that the trustee had duly demanded and the lessee had failed to pay $1,261.12 additional rent for excess real property taxes that had become due on January 1, 1964, and $5,158.54 overdue rent for the months of February and March. At the request of the lessee's attorney, the hearing on the order to show cause was adjourned until April 8, 1964. During the interim, the lessee paid the back rent, and the order to show cause was marked off the calendar. However, after the lessee's check for the $1,261.12 additional rent failed to clear the bank on several occasions, the trustee had the show cause order restored to the calendar.\n\n\n4\nThe lessee has never answered the allegations of the trustee's petition. Instead it moved to quash the show cause order on the ground that the court lacked jurisdiction to determine the merits of the controversy in a summary proceeding because the lessee is in possession of the property and has a substantial adverse claim which must be determined in a plenary suit. However, the affidavit failed to state the nature or basis of this 'substantial adverse claim.' Nor were any facts to back up the claim stated at any stage in the action. The district court denied the jurisdictional objection raised by the appellant and gave the appellant three and a half hours in which to file an answer to the allegations of the trustee. No answer was filed during that period, and the district court granted the relief requested by the trustee.\n\n\n5\nThe main thrust of this appeal is that the reorganization court lacked jurisdiction to dispossess the lessee by a summary proceeding. While it is well settled that a bankruptcy court may summarily adjudicate controversies involving property claimed to be a part of the bankrupt's estate which is in the actual or constructive possession of the bankrupt, Thompson v. Magnolia Petroleum Co., 309 U.S. 478, 481, 60 S.Ct. 628, 84 L.Ed. 876 (1940), we agree with the appellant that a lessee in possession under a valid lease cannot normally be ousted save by a plenary suit in the reorganization court or in the state courts unless he consents to the exercise of the bankruptcy court's summary jurisdiction. Matter of Mt. Forest Fur Farms of America, 122 F.2d 232 (6 Cir. 1941), cert. denied, 314 U.S. 701, 62 S.Ct. 480, 86 L.Ed. 561 (1942); 6 Collier on Bankruptcy 706 (14th ed. 1947). The appellee is mistaken in contending that possession by the lessee confers constructive possession on the lessor so as to permit exercise of summary jurisdiction; to the contrary, possession by the lessee under an initially valid lease is hostile to possession by the lessor. See 2 Colier, Bankruptcy, 23.06(12).\n\n\n6\nHowever, under the facts here, we are constrained to hold that the lessee consented to the exercise of summary jurisdiction. The lessee was served by registered mail with the order to show cause signed March 5, 1964. Counsel for the lessee admitted service on that date, obtained an adjournment for a month so that he could arrange for payment and take a vacation, and adjournments from time to time while payments were being made. Although the attorney for the tenant wrote on March 5 that he had advised his client to make payment without prejudice to any of his rights concerning the motion, a series of adjournments followed without any question being raised of the summary nature of the proceeding. Two months' basic rent back payments were made during this period, but a check for additional rent measured by taxes, due under the lease several times failed to clear and the motion was brought on for hearing. It was only after these occurrences that counsel for the lessee on May 22 attempted to file a special appearance and object to the exercise of summary jurisdiction by the reorganization court.\n\n\n7\nWe think that the lessee's participation in the summary proceedings, arranging for continuances of the order to show cause over the period from March 5 to May 22, retaining possession while making back payments, even though admitting in argument on the motion on May 22 the trustee's right to possession, amounted to a consent to the summary character of the proceeding. The lessee obtained the advantage of the delay from the continuances in the summary proceeding itself and should not now be heard to object that a different procedure should have been followed during that period to enforce the trustee's admitted right. We therefore do not reach appellee's further contention based on the debtor's possession at the time of the petition. The district court's exercise of summary jurisdiction was quite proper.\n\n\n8\nWe see no merit to appellant's contentions that New York eviction practice and procedure should have been followed, for they are not binding upon a bankruptcy court. Cf. Sproul v. Gambone, 34 F.Supp. 441 (W.D.Pa.1940); Frederick v. Motors Mtge. Corp., 1 F.2d 437 (W.D.Pa.1924).\n\n\n9\nThe order of the district court is affirmed.\n\n"} -{"text": " RECOMMENDED FOR FULL-TEXT PUBLICATION\n Pursuant to Sixth Circuit I.O.P. 32.1(b)\n File Name: 18a0001p.06\n\n UNITED STATES COURT OF APPEALS\n FOR THE SIXTH CIRCUIT\n\n\n\n BEAU DARRELL HEIMER, \u2510\n Plaintiff-Appellee, \u2502\n \u2502\n > No. 16-2274\n v. \u2502\n \u2502\n \u2502\n COMPANION LIFE INSURANCE COMPANY, \u2502\n Defendant-Appellant. \u2502\n \u2518\n\n Appeal from the United States District Court\n for the Western District of Michigan at Grand Rapids.\n No. 1:15-cv-00338\u2014Janet T. Neff, District Judge.\n\n Argued: November 30, 2017\n\n Decided and Filed: January 2, 2018\n\n Before: COLE, Chief Judge; McKEAGUE and STRANCH, Circuit Judges.\n _________________\n\n COUNSEL\n\nARGUED: Kimberly J. Ruppel, DICKINSON WRIGHT PLLC, Troy, Michigan, for Appellant.\nChristopher P. Desmond, Detroit, Michigan, for Appellee. ON BRIEF: Kimberly J. Ruppel,\nDICKINSON WRIGHT PLLC, Troy, Michigan, for Appellant. Christopher P. Desmond,\nDetroit, Michigan, for Appellee.\n\n COLE, C.J., delivered the opinion of the court in which STRANCH, J., joined, and\nMcKEAGUE, J., joined in the result. McKEAGUE, J. (pp. 7\u20138), delivered a separate opinion\ndissenting from Part II.A of the majority opinion and concurring in the judgment.\n\f No. 16-2274 Heimer v. Companion Life Ins. Page 2\n\n\n _________________\n\n OPINION\n _________________\n\n COLE, Chief Judge. This matter is about whether a contract should mean what it says.\nAfter Beau Darrell Heimer was injured in a motorbike accident, he filed an insurance claim with\nCompanion Life for the bill. Companion Life denied the claim, citing a plan exclusion that\ndisclaimed coverage for injuries resulting from the \u201cillegal use of alcohol.\u201d But the district court\nread \u201cillegal use of alcohol\u201d to disclaim coverage only for the illegal consumption of alcohol,\nand not for Heimer\u2019s illegal post-consumption conduct of operating a motorbike while under the\ninfluence of alcohol. The district court\u2019s reading is consistent with the ordinary meaning of\n\u201cuse\u201d and best gives effect to the contract as a whole. We affirm.\n\n I. BACKGROUND\n\n Heimer was only a year over the legal drinking age on a fateful night in April 2013. That\nnight, he and his friends drank and, later, rode their motorbikes in a field in Michigan. While\nriding their motorbikes, Heimer and one of his friends collided. Heimer suffered extensive\ninjuries and incurred more than $197,333.50 in medical bills. Medical records indicate that\nHeimer\u2019s blood alcohol level shortly after the crash was 0.152, nearly twice the limit to legally\nuse an off-road vehicle in Michigan.\n\n Heimer was insured by Companion Life. As required by his plan, he submitted a medical\nclaim form shortly after the accident, but the plan administrator denied coverage. The plan\nadministrator pointed to a plan exclusion that disclaimed coverage for \u201c[s]ervices, supplies, care\nor treatment of any injury or [s]ickness which occurred as a result of a Covered Person\u2019s illegal\nuse of alcohol.\u201d (Administrative Record, R. 34-1, Page ID 550, 605.)\n\n After exhausting his administrative appeals, Heimer filed suit, and the case eventually\nfound its way into federal court. Parting with the insurance administrator, the district court held\nthat the plan exclusion did not encompass Heimer\u2019s injuries. It noted that there is a difference\nbetween the illegal use of alcohol\u2014such as drinking while under 21 or drinking in defiance of a\ncourt order\u2014and illegal post-consumption conduct, such as the illegal use of a motor vehicle.\n\f No. 16-2274 Heimer v. Companion Life Ins. Page 3\n\n\nWhat was illegal about Heimer\u2019s behavior was his use of a motor vehicle, not of alcohol. And if\nthere were any doubts, the district court explained, the contract should be construed against the\ninsurance company as the drafter.\n\n Companion Life now appeals.\n\n II. ANALYSIS\n\n We review Companion Life\u2019s plan, and the district court\u2019s reading of it, without\ndeference. See Hoover v. Provident Life & Accident Ins. Co., 290 F.3d 801, 808\u201309 (6th Cir.\n2002). We interpret plan provisions \u201caccording to their plain meaning, in an ordinary and\npopular sense,\u201d giving effect to the unambiguous terms of the plan. Perez v. Aetna Life Ins. Co.,\n150 F.3d 550, 556 (6th Cir. 1998).\n\n A. The Ordinary Meaning of \u201cUse of Alcohol\u201d is the Act of Consuming Alcohol.\n\n We agree with the district court that \u201cuse of alcohol\u201d most naturally refers to the act of\nconsuming alcohol, and not post-consumption conduct.\n\n The plan does not define \u201cuse,\u201d so we give the term its ordinary meaning. In this context,\n\u201cuse\u201d means \u201c[t]he action of consuming something as food, drink, a drug, etc.\u201d Oxford English\nDictionary (3d ed. 2011); see also Merriam Webster\u2019s Collegiate Dictionary (defining \u201cto use\u201d\nas \u201cto consume or take (as liquor or drugs) regularly\u201d) (11th ed. 2004); American Heritage\nDictionary of the English Language (\u201cTo partake of, especially as a habit: She rarely uses\nalcohol.\u201d) (5th ed. 2017). In everyday English, an \u201cillegal use of alcohol\u201d thus means an illegal\nact of consuming alcohol\u2014such as drinking while under 21, on public streets, or in an\nunlicensed restaurant. See, e.g., Mich. Const. Art. 4, \u00a7 40; Mich. Comp. Laws \u00a7 436.1915; Mich.\nComp. Laws \u00a7 436.1913. Read this way, Heimer\u2019s conduct was not an \u201cillegal use of alcohol\u201d:\nHeimer was over the legal age to drink, and Companion Life has not pointed to any law that\nprohibited Heimer from consuming alcohol.\n\n Companion Life would have us read \u201cuse\u201d to mean \u201cunder the influence\u201d of alcohol, but\nwe have found no definitions of \u201cuse\u201d that are so capacious. To be sure, \u201cuse\u201d can also be\ndefined to mean \u201cthe act of putting something to work, or employing or applying a thing.\u201d\n\f No. 16-2274 Heimer v. Companion Life Ins. Page 4\n\n\nOxford English Dictionary (3d ed. 2011). But \u201c[i]n law, as in life,\u201d context matters. Yates v.\nUnited States, 135 S. Ct. 1074, 1082 (2015) (Ginsburg, J., plurality op.). A natural English\nspeaker would say that one \u201cconsumes\u201d alcohol, but no natural speaker would say that someone\n\u201cemploys\u201d or \u201capplies\u201d alcohol. The other definitions of \u201cuse\u201d must give way to the context-\nspecific one. And though \u201cuse\u201d sometimes means habitual consumption\u2014for instance, \u201chis drug\nuse lasted years\u201d\u2014even that usage is not so broad to mean \u201cunder the influence.\u201d\n\n Other plan language also forecloses Companion Life\u2019s reading. When the plan intended\nto disclaim coverage for injuries sustained while under the influence of something, it used\nspecific language. In that vein, the plan disclaimed coverage for injuries \u201cwhile under the\ninfluence of any controlled substance . . . not administered on the advice of a Physician.\u201d\n(Administrative Record, R. 34-1, Page ID 550.) This \u201cdifference in language demands a\ndifference in meaning.\u201d Gallo v. Moen Inc., 813 F.3d 265, 270 (6th Cir. 2016). Under the plan,\n\u201cuse\u201d and \u201cunder the influence\u201d are different.\n\n Nor has Companion Life argued that \u201cillegal use of alcohol\u201d is a term of art for driving\nunder the influence. Instead, it volunteered its belief that the \u201cillegal use of alcohol\u201d language\nwould exclude coverage for injuries from misdemeanor bar fights and, remarkably, for \u201csimply\nsustaining a fall while at home.\u201d (Appellant\u2019s Opening Br. 19.) Whatever the merits of that, it\ndoes not argue that \u201cillegal use of alcohol\u201d is a specialized term for driving under the influence.\n\n And there is still more to support our reading: Heimer pleaded guilty to an offense that\nproscribed the use of a motor vehicle, not the use of alcohol. Heimer operated an off-road\nvehicle while intoxicated, a misdemeanor offense under Michigan law. That law provides that\n\u201c[a] person shall not operate an [off-road vehicle] if, due to the consumption of intoxicating\nliquor . . . the person has visibly impaired his or her ability to operate the [off-road vehicle].\u201d\nMich. Comp. Laws \u00a7 324.81135(1) (repealed 2015). True, Heimer\u2019s conduct was illegal \u201cdue to\nthe consumption of intoxicating liquor,\u201d but the illegal act proscribed by the statute is the use of\na vehicle. As the statute says, \u201c[a] person shall not operate an [off-road vehicle].\u201d The statute\ndoes not say that a person \u201cshall not consume alcohol,\u201d the language used by the Michigan\nlegislature when it intended to make illegal the consumption of alcohol. See, e.g., Mich. Comp.\nLaws \u00a7 436.1913 (\u201cA person shall not consume alcoholic liquor . . . .\u201d); Mich. Comp. Laws\n\f No. 16-2274 Heimer v. Companion Life Ins. Page 5\n\n\n\u00a7 436.1915 (\u201cAlcoholic liquor shall not be consumed . . . .\u201d). Indeed, had Heimer\u2019s night ended\nwith him going to bed instead of going for a drive, there would have been nothing illegal about\nhis conduct at all, even though his use of alcohol is the same in either scenario. The only\ndifference between this fiction and reality is Heimer\u2019s post-use conduct. And only that is illegal.\n\n Finally, none of the hodgepodge of district court cases cited by Companion Life persuade\nus to adopt a different reading. As Companion Life conceded at oral argument, many of those\ncases considered different plan language. E.g., Tourdot v. Rockford Health Plans, Inc., 357 F.\nSupp. 2d 1100, 1103 (W.D. Wis. 2005) (excluding coverage for injuries resulting from \u201cillegal\nacts\u201d); Sutton v. Hearth & Home Distribs., Inc. Emp. Benefit Plan, 881 F. Supp. 210, 213 (D.\nMd. 1995) (excluding coverage for injuries \u201cdue to the use or misuse of alcohol\u201d). More\nimportantly, none of the cases analyzed the ordinary meaning of the word \u201cuse,\u201d and all instead\ndeferred to the reading of the plan adopted by the insurance company\u2019s administrator. By giving\nshort shrift to the ordinary meaning of \u201cuse,\u201d those cases elided the distinction between \u201cuse of\nalcohol\u201d and post-use conduct.\n\n The worst one can say about our reading is that it does not give effect to the insurance\ncompany\u2019s understandable desire not to pay for injuries sustained during a drunken ride on a\nmotorbike. But if the insurance company wanted to exclude this type of injury, it should have\nused specific language to that effect, as many other insurance companies have done. E.g.,\nCultrona v. Nationwide Life Ins. Co., 748 F.3d 698, 702 (6th Cir. 2014) (discussing exclusion\nwhere the \u201cCovered Person [is] deemed and presumed, under the law of the locale in which\nthe Injury is sustained, to be under the influence of alcohol or intoxicating liquors.\u201d (emphasis\nomitted)).\n\n B. The Plan is Construed Against Companion Life, the Drafter.\n\n Were there any doubts that the plan is unambiguous, the ordinary contract principle to\nconstrue a contract against its drafter is the final nail in the coffin. When a court conducts de\nnovo review, as here, \u201cany ambiguities in the language of the plan [must] be construed strictly\nagainst the drafter of the plan.\u201d Regents of Univ. of Mich. v. Emps. of Agency Rent-A-Car Hosp.\n\f No. 16-2274 Heimer v. Companion Life Ins. Page 6\n\n\nAss\u2019n, 122 F.3d 336, 340 (6th Cir. 1997). Because our reading of the contract is at least\nreasonable, Heimer would still prevail even if we had concluded that the plan was ambiguous.\n\n III. CONCLUSION\n\n We affirm the judgment of the district court.\n\f No. 16-2274 Heimer v. Companion Life Ins. Page 7\n\n\n ________________________________________________________\n\n CONCURRING IN PART AND DISSENTING IN PART\n ________________________________________________________\n\n McKEAGUE, Circuit Judge, dissenting in part and concurring in the judgment. I agree\nwith the result we reach today, but I cannot agree with the majority\u2019s conclusion that the relevant\nexclusion is unambiguous. The majority declares \u201ccontext matters.\u201d I agree. Let\u2019s consider the\ncontext. Beau Darrell Heimer and some friends decided to over-indulge in alcoholic beverages\nto work up the nerve to hurtle themselves toward each other at high speed on dirt bikes\u2014after\nnightfall in a farm field\u2014to see who might \u201cchicken out\u201d at the last second. No one plays this\ngame sober. The alcohol they deliberately ingested emboldened them to play a reckless game of\nchicken, leading to predictably tragic results when neither Heimer nor his contestant \u201cblinked\u201d\nand they collided head-on. Heimer\u2019s health insurer, Companion Life, denied coverage, invoking\nan \u201cillegal use of alcohol\u201d exclusion. We review de novo.\n\n The majority reasons that Heimer was not \u201cusing\u201d alcohol when he crashed because he\nhad completed the \u201cact of consuming alcohol\u201d beforehand.1 I disagree with the majority\u2019s\nholding in Part II.A that the relevant exclusion unambiguously supports Heimer\u2019s position. The\nmajority offers one valid reading. However, other valid readings capture the unlawful\n\u201cemployment of [alcohol]\u201d under these circumstances. Black\u2019s Law Dictionary (10th ed. 2014).\n\n In one sense, can we really doubt that a person who has a blood-alcohol level of over\ntwice the legal limit continues to \u201cuse\u201d the alcohol in his bloodstream after he ingests it? Cf.\nAroma Wines & Equip., Inc. v. Columbian Distrib., 844 N.W.2d 727, 731 (Mich. Ct. App.\n2013).2 Read this way, Heimer \u201cused\u201d (indeed abused) alcohol after he ingested it to play\nchicken in the same way one \u201cuses\u201d (abuses) cocaine after he inhales it to get high.\n\n\n 1\n Yet, inasmuch as Heimer\u2019s blood-alcohol was 0.152 shortly after the collision, his body was in a sense\nstill \u201cconsuming\u201d the alcohol in an inebriated state, as intended, at the time of collision.\n 2\n \u201cContrary to the trial court\u2019s conclusion that \u2018to use a wine, one would have to drink it or perhaps sell it,\u2019\nwe hold that the definition of \u2018use\u2019 encompasses a much broader meaning. The term \u2018use\u2019 requires only that a\nperson \u2018employ for some purpose,\u2019 and clearly, drinking or selling the wine are not the only ways that defendant\ncould have employed plaintiff\u2019s wine to its own purposes.\u201d Id. (citing Random House Webster\u2019s College Dictionary\n(1992)).\n\f No. 16-2274 Heimer v. Companion Life Ins. Page 8\n\n\n The majority cites the fact that the phrase \u201cunder the influence\u201d appears elsewhere in the\ncontract, but \u201cuse\u201d can reasonably be construed to encompass both the discrete \u201cact of ingesting\nalcohol\u201d and the process of bringing oneself into a prolonged state of being \u201cunder the influence\nof alcohol,\u201d to embolden participation in a reckless game. See Black\u2019s Law Dictionary (10th ed.\n2014) (defining \u201cuse\u201d as \u201c[t]he application or employment of something . . . for [a] purpose\u201d).\n\n Moreover, several district courts have upheld broader constructions of \u201cillegal use of\nalcohol\u201d provisions under an arbitrary and capricious standard of review. See, e.g., Johnson v.\nPrudential Ins. Co. of Am., 2012 WL 5378313, at *5 (S.D. Ohio Oct. 31, 2012) (\u201c[T]he \u2018use\u2019 [of\nalcohol] became illegal when Chapman began to drive.\u201d); Jones v. Channel Shipyard & Co.,\nInc., 2001 WL 1490915, at *3 (E.D. La. Nov. 20, 2001) (\u201cJones illegally used alcohol\u2014not\nbecause the drinking in and of itself was illegal but, because combined with driving, it was.\u201d).\nThese rulings substantiate the notion that a broader reading of \u201cillegal use of alcohol\u201d exclusions\nis not unreasonable and support the conclusion that the language of the exclusion, viewed in\ncontext, is not unambiguous. The majority\u2019s determination that the phrase \u201cillegal use of\nalcohol\u201d is unambiguous says more than needs to be said and may establish bad precedent\nunnecessarily.\n\n Companion Life surely did not intend its policy to cover injuries arising from drunken\nparticipation in a reckless game of chicken. Reading \u201cillegal use of alcohol\u201d so narrowly leaves\none seeing double.3 But ultimately, in this case, the insurer must bear the consequences of its\nsloppy drafting. See Regents of Univ. of Mich. v. Emps. of Agency Rent-A-Car-Hosp. Ass\u2019n,\n122 F.3d 336, 340 (6th Cir. 1997)) (noting on de novo review that \u201cany ambiguities in the\nlanguage of the plan [must] be construed strictly against the drafter of the plan\u201d). Thus, although\nI disagree with the majority\u2019s holding in Part II.A, above, I concur in the judgment.\n\n\n\n\n 3\n For example, treatment for injuries resulting from operating a motor vehicle while intoxicated, third-\noffense\u2014a felony under Mich. Comp. Laws \u00a7 257.625(4) punishable by up to ten years in prison\u2014would not trigger\nthe exclusion; but treatment for injuries resulting from consuming alcohol as a minor, first-offense\u2014a misdemeanor\nunder Mich. Comp. Laws \u00a7 436.1703(1) punishable by a fine of no more than $100.00 and community service\u2014\nwould trigger the exclusion.\n\f"} -{"text": "\n476 U.S. 426 (1986)\nFEDERAL DEPOSIT INSURANCE CORPORATION\nv.\nPHILADELPHIA GEAR CORP.\nNo. 84-1972.\nSupreme Court of United States.\nArgued March 4, 1986\nDecided May 27, 1986\nCERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT\n*427 Charles A. Rothfeld argued the cause for petitioner. With him on the briefs were Solicitor General Fried, Assistant Attorney General Willard, Deputy Solicitor General Wallace, and John C. Murphy, Jr.\nGerald F. Slattery, Jr., argued the cause and filed a brief for respondent.[*]\nGeorge W. Miller and Dennis J. Lehr filed a brief for William H. Allen et al. as amici curiae urging affirmance.\nJUSTICE O'CONNOR delivered the opinion of the Court.\nWe granted certiorari to consider whether a standby letter of credit backed by a contingent promissory note is insured as a \"deposit\" under the federal deposit insurance program. We hold that, in light of the longstanding interpretation of petitioner Federal Deposit Insurance Corporation (FDIC) that such a letter does not create a deposit and, in light of the fact that such a letter does not entrust any noncontingent assets to the bank, a standby letter of credit backed by a contingent promissory note does not give rise to an insured deposit.\n\nI\nOrion Manufacturing Corporation (Orion) was, at the time of the relevant transactions, a customer of respondent Philadelphia *428 Gear Corporation (Philadelphia Gear). On Orion's application, the Penn Square Bank, N. A. (Penn Square) issued a letter of credit for the benefit of Philadelphia Gear in the amount of $145,200. The letter of credit provided that a draft drawn upon the letter of credit would be honored by Penn Square only if accompanied by Philadelphia Gear's \"signed statement that [it had] invoiced Orion Manufacturing Corporation and that said invoices have remained unpaid for at least fifteen (15) days.\" App. 25. Because the letter of credit was intended to provide payment to the seller only if the buyer of the invoiced goods failed to make payment, the letter of credit was what is commonly referred to as a \"standby\" or \"guaranty\" letter of credit. See, e. g., 12 CFR \u00a7 337.2(a), and n. 1 (1985) (defining standby letters of credit and mentioning that they may \" `guaranty' payment of a money obligation\"). A conventional \"commercial\" letter of credit, in contrast, is one in which the seller obtains payment from the issuing bank without looking to the buyer for payment even in the first instance. See ibid. (distinguishing standby letters of credit from commercial letters of credit). See also Verkuil, Bank Solvency and Guaranty Letters of Credit, 25 Stan. L. Rev. 716, 717-724 (1973); Arnold & Bransilver, The Standby Letter of Credit \u0097 The Controversy Continues, 10 U.C.C.L.J. 272, 277-279 (Spring 1978).\nOn the same day that Penn Square issued the standby letter of credit, Orion executed an unsecured promissory note for $145,200 in favor of Penn Square. App. 27. The purpose of the note was listed as \"Back up Letter of Credit.\" Ibid. Although the face of the note did not so indicate, both Orion and Penn Square understood that nothing would be considered due on the note, and no interest charged by Penn Square, unless Philadelphia Gear presented drafts on the standby letter of credit after nonpayment by Orion. 751 F. 2d 1131, 1134 (CA10 1984). See also Tr. of Oral Arg. 32.\nOn July 5, 1982, Penn Square was declared insolvent. Petitioner FDIC was appointed its receiver. Shortly thereafter, *429 Philadelphia Gear presented drafts on the standby letter of credit for payment of over $700,000 for goods delivered before Penn Square's insolvency. The FDIC returned the drafts unpaid. 751 F. 2d., at 1133-1134.\nPhiladelphia Gear sued the FDIC in the Western District of Oklahoma. Philadelphia Gear alleged that the standby letter of credit was an insured deposit under the definition of \"deposit\" set forth at 12 U. S. C. \u00a7 1813(l)(1), and that Philadelphia Gear was therefore entitled to $100,000 in deposit insurance from the FDIC. See 12 U. S. C. \u00a7 1821(a)(1) (setting forth $100,000 as the maximum amount generally insured by the FDIC for any single depositor at a given bank). In apparent hopes of obtaining additional funds from the FDIC in the latter's capacity as receiver rather than as insurer, respondent also alleged that terms of the standby letter of credit allowing repeated reinstatements of the credit made the letter's total value more than $145,200.\nThe District Court held that the total value of the standby letter of credit was $145,200, App. B to Pet. for Cert. 20a, 28a-30a; that the letter was an insured deposit on which the FDIC was liable for $100,000 in deposit insurance, id., at 37a-43a; and that Philadelphia Gear was entitled to prejudgment interest on that $100,000, id., at 43a. The FDIC appealed from the District Court's ruling that the standby letter of credit backed by a contingent promissory note constituted a \"deposit\" for purposes of 12 U. S. C. \u00a7 1813(l)(1) and its ruling that Philadelphia Gear was entitled to an award of prejudgment interest. Philadelphia Gear cross-appealed from the District Court's ruling on the total value of the letter of credit.\nThe Court of Appeals for the Tenth Circuit reversed the District Court's award of prejudgment interest, 751 F. 2d, at 1138-1139, but otherwise affirmed the District Court's decision. As to the definition of \"deposit,\" the Court of Appeals held that a standby letter of credit backed by a promissory note fell within the terms of 12 U. S. C. \u00a7 1813(l)(1)'s definition *430 of \"deposit,\" and was therefore insured. Id., at 1134-1138. We granted the FDIC's petition for certiorari on this aspect of the Court of Appeals' ruling. 474 U. S. 918 (1985). We now reverse.\n\nII\nTitle 12 U. S. C. \u00a7 1813(l)(1) provides:\n\"The term `deposit' means \u0097\n\"(1) the unpaid balance of money or its equivalent received or held by a bank in the usual course of business and for which it has given or is obligated to give credit, either conditionally or unconditionally, to a commercial. . . account, or which is evidenced by . . . a letter of credit or a traveler's check on which the bank is primarily liable: Provided, That, without limiting the generality of the term `money or its equivalent,' any such account or instrument must be regarded as evidencing the receipt of the equivalent of money when credited or issued in exchange for checks or drafts or for a promissory note upon which the person obtaining any such credit or instrument is primarily or secondarily liable. . . .\"\nPhiladelphia Gear successfully argued before the Court of Appeals that the standby letter of credit backed by a contingent promissory note constituted a \"deposit\" under 12 U. S. C. \u00a7 1813(l)(1) because that letter was one on which the bank was primarily liable, and evidenced the receipt by the bank of \"money or its equivalent\" in the form of a promissory note upon which the person obtaining the credit was primarily or secondarily liable. The FDIC does not here dispute that the bank was primarily liable on the letter of credit. Brief for Petitioner 7, n. 7. Nor does the FDIC contest the fact that the backup note executed by Orion is, at least in some sense, a \"promissory note.\" See Tr. of Oral Arg. 7 (remarks of Mr. Rothfeld, representing the FDIC) (\"It was labeled a note. It can be termed a note\"). The FDIC argues rather that it has consistently interpreted \u00a7 1813(l)(1) not to *431 include standby letters of credit backed only by a contingent promissory note because such a note represents no hard assets and thus does not constitute \"money or its equivalent.\" Because the alleged \"deposit\" consists only of a contingent liability, asserts the FDIC, a standby letter of credit backed by a contingent promissory note does not give rise to a \"deposit\" that Congress intended the FDIC to insure. Under this theory, while the note here may have been labeled a promissory note on its face and may have been a promissory note under state law, it was not a promissory note for purposes of the federal law set forth in 12 U. S. C. \u00a7 1813(l)(1). See D'Oench, Duhme & Co. v. FDIC, 315 U. S. 447, 456 (1942) (holding that liability on a promissory note acquired by the FDIC is a federal question); First National Bank v. Dickinson, 396 U. S. 122, 133-134 (1969) (holding that federal law governs the definition of branch banking under the McFadden Act).\nThe Court of Appeals quite properly looked first to the language of the statute. See Florida Power & Light Co. v. Lorion, 470 U. S. 729, 735 (1985); United States v. Yermian, 468 U. S. 63, 68 (1984). Finding the language of the proviso in \u00a7 1813(l)(1) sufficiently plain, the Court of Appeals looked no further. But as the FDIC points out, the terms \"letter of credit\" and \"promissory note\" as used in the statute have a federal definition, and the FDIC has developed and interpreted those definitions for many years within the framework of the complex statutory scheme that the FDIC administers. The FDIC's interpretation of whether a standby letter of credit backed by a contingent promissory note constitutes a \"deposit\" is consistent with Congress' desire to protect the hard earnings of individuals by providing for federal deposit insurance. Since the creation of the FDIC, Congress has expressed no dissatisfaction with the FDIC's interpretation of \"deposit\"; indeed, Congress in 1960 adopted the FDIC's regulatory definition as the statutory language. When we weigh all these factors together, we are *432 constrained to conclude that the term \"deposit\" does not include a standby letter of credit backed by a contingent promissory note.\n\nA\nJustice Holmes stated that, as to discerning the constitutionality of a federal estate tax, \"a page of history is worth a volume of logic.\" New York Trust Co. v. Eisner, 256 U. S. 345, 349 (1921). Although the genesis of the Federal Deposit Insurance Act may not be quite so powerful a substitute for legal analysis, that history is worthy of at least a page of recounting for the light it sheds on Congress' purpose in passing the Act. Cf. Watt v. Alaska, 451 U. S. 259, 266 (1981) (\"The circumstances of the enactment of particular legislation may persuade a court that Congress did not intend words of common meaning to have their literal effect\").\nWhen Congress created the FDIC, the Nation was in the throes of an extraordinary financial crisis. See generally F. Allen, Since Yesterday: The Nineteen-Thirties in America 98-121 (1940); A. Schlesinger, The Crisis of the Old Order 474-482 (1957). More than one-third of the banks in the United States open in 1929 had shut their doors just four years later. Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970, pt. 2, pp. 1019, 1038 (1976). In response to this financial crisis, President Roosevelt declared a national banking holiday effective the first business day after he took office. 48 Stat. 1689. Congress in turn responded with extensive legislation on banking, including the laws that gave the FDIC its existence.\nCongress' purpose in creating the FDIC was clear. Faced with virtual panic, Congress attempted to safeguard the hard earnings of individuals against the possibility that bank failures would deprive them of their savings. Congress passed the 1933 provisions \"[i]n order to provide against a repetition of the present painful experience in which a vast sum of assets and purchasing power is `tied up.' \" S. Rep. No. 77, 73d Cong., 1st Sess., 12 (1933) (emphasis added). The *433 focus of Congress was therefore upon ensuring that a deposit of \"hard earnings\" entrusted by individuals to a bank would not lead to a tangible loss in the event of a bank failure. As the chairman of the relevant Committee in the House of Representatives explained on the floor:\n\"[T]he purpose of this legislation is to protect the people of the United States in the right to have banks in which their deposits will be safe. They have a right to expect of Congress the establishment and maintenance of a system of banks in the United States where citizens may place their hard earnings with reasonable expectation of being able to get them out again upon demand. . . .\n.....\n\"[The purpose of the bill is to ensure that] the community is saved from the shock of a bank failure, and every citizen has been given an opportunity to withdraw his deposits. . . .\n.....\n\"The public . . . demand of you and me that we provide a banking system worthy of this great Nation and banks in which citizens may place the fruits of their toil and know that a deposit slip in return for their hard earnings will be as safe as a Government bond.\" 77 Cong. Rec. 3837, 3838, 3840 (1933) (remarks of Rep. Steagall).\nSee also id., at 3913 (remarks of Rep. Keller) (\"[We must make] it absolutely certain that . . . any and every man, woman, or child who puts a dollar in any bank can absolutely know that he will under no circumstances lose a single penny of it\"); id., at 3924 (remarks of Rep. Green) (\"It is time that we pass a law so secure that when a man puts his money in a bank he will know for sure that when he comes back it will be there\"). To prevent bank failure that resulted in the tangible loss of hard assets was therefore the focus of Congress' effort in creating deposit insurance.\nDespite the fact Congress revisited the deposit insurance statute in 1935, 1950, and 1960, these comments remain the *434 best indication of Congress' underlying purpose in creating deposit insurance. The Reports on the 1935 amendments presented the definition of \"deposit\" without any specific comment. See H. R. Rep. No. 742, 74th Cong., 1st Sess., 2 (1935); S. Rep. No. 1007, 74th Cong., 1st Sess., 2-4 (1935); H. R. Conf. Rep. No. 1822, 74th Cong., 1st Sess., 44 (1935). The floor debates centered around changes in the Federal Reserve System made in the same bill, not on deposit insurance. See, e. g., 79 Cong. Rec. 6568-6577, 6651-6660 (1935). Indeed, in light of the fact that instruments denominated \"promissory notes\" seem at the time to have been considered exclusively uncontingent, see, e. g., 16 Fed. Res. Bull. 520 (1930) (Regulation A) (defining promissory note as an \"unconditional promise . . . to pay [a sum certain in dollars] at a fixed or determinable future time\") (emphasis added); Gilman v. Commissioner, 53 F. 2d 47, 50 (CA8 1931) (\"The form of these [contingent] instruments referred to as `promissory notes' is very unusual\"), it is unlikely that Congress would have had occasion to refer expressly to contingent notes such as the one before us here even if Congress had turned its attention to the definition of \"deposit\" when it first enacted the provision treating \"money or its equivalent.\"\nThe legislative history of the 1950 amendments is similarly unhelpful, as one would expect given that the relevant provisions were reenacted but unchanged. See S. Rep. No. 1269, 81st Cong., 2d Sess., 2-3 (1950); H. R. Rep. No. 2564, 81st Cong., 2d Sess., 5-6 (1950). The Committee Reports on the 1960 amendments likewise give no indication that the amendments' phrasing was meant to effect any fundamental changes in the definition of deposit; those Reports state only that the changes are intended to bring into harmony the definitions of \"deposit\" used for purposes of deposit insurance with those used in reports of condition, and that the FDIC's rules and regulations are to be incorporated into the new definition. See H. R. Rep. No. 1827, 86th Cong., 2d Sess., 3, 5 (1960); S. Rep. No. 1821, 86th Cong., 2d Sess., 7, 10 (1960). *435 See also 106 Cong. Rec. 14794 (1960) (discussing pre-1960 scheme).\nCongress' focus in providing for a system of deposit insurance \u0097 a system that has been continued to the present without modification to the basic definition of deposits that are \"money or its equivalent\" \u0097 was clearly a focus upon safeguarding the assets and \"hard earnings\" that businesses and individuals have entrusted to banks. Congress wanted to ensure that someone who put tangible assets into a bank could always get those assets back. The purpose behind the insurance of deposits in general, and especially in the section defining deposits as \"money or its equivalent,\" therefore, is the protection of assets and hard earnings entrusted to a bank.\nThis purpose is not furthered by extending deposit insurance to cover a standby letter of credit backed by a contingent promissory note, which involves no such surrender of assets or hard earnings to the custody of the bank. Philadelphia Gear, which now seeks to collect deposit insurance, surrendered absolutely nothing to the bank. The letter of credit is for Philadelphia Gear's benefit, but the bank relied upon Orion to meet the obligations of the letter of credit and made no demands upon Philadelphia Gear. Nor, more importantly, did Orion surrender any assets unconditionally to the bank. The bank did not credit any account of Orion's in exchange for the promissory note, and did not treat its own assets as increased by its acceptance of the note. The bank could not have collected on the note from Orion unless Philadelphia Gear presented the unpaid invoices and a draft on the letter of credit. In the absence of a presentation by Philadelphia Gear of the unpaid invoices, the promissory note was a wholly contingent promise, and when Penn Square went into receivership, neither Orion nor Philadelphia Gear had lost anything except the ability to use Penn Square to reduce Philadelphia Gear's risk that Philadelphia Gear would go unpaid for a delivery of goods to Orion.\n\n\n*436 B\nCongress' actions with respect to the particular definition of \"deposit\" that it has chosen in order to effect its general purpose likewise lead us to believe that a standby letter of credit backed by a contingent promissory note is not an insurable \"deposit.\" In 1933, Congress amended the Federal Reserve Act to authorize the creation of the FDIC and charged it \"to insure . . . the deposits of all banks which are entitled to the benefits of [FDIC] insurance.\" \u00a7 8, Banking Act of 1933, ch. 89, 48 Stat. 168. Congress did not define the term \"deposit,\" however, until the Banking Act of 1935, in which it stated:\n\"The term `deposit' means the unpaid balance of money or its equivalent received by a bank in the usual course of business and for which it has given or is obligated to give credit to a commercial, checking, savings, time or thrift account, or which is evidenced by its certificate of deposit, and trust funds held by such bank whether retained or deposited in any department of such bank or deposited in another bank, together with such other obligations of a bank as the board of directors [of the FDIC] shall find and shall prescribe by its regulations to be deposit liabilities by general usage . . . .\" \u00a7 101, Banking Act of 1935, ch. 614, 49 Stat. 684, 685-686.\nLess than two months after this statute was enacted, the FDIC promulgated a definition of \"deposit,\" which provided in part that \"letters of credit must be regarded as issued for the equivalent of money when issued in exchange for . . . promissory notes upon which the person procuring [such] instruments is primarily or secondarily liable.\" See 12 CFR \u00a7 301.1(d) (1939) (codifying Regulation I, rule 1, Oct. 1, 1935), revoked after incorporation into statutory law, 12 CFR 234 (Supp. 1962).\nIn 1950, Congress revisited the provisions specifically governing the FDIC in order to remove them from the Federal *437 Reserve Act and place them into a separate Act. See Act of Sept. 21, 1950, ch. 967, 64 Stat. 874. The new provisions did not modify the definition of \"deposit.\" In 1960, Congress expanded the statutory definition of \"deposit\" in several categories, and also incorporated the regulatory definition that the FDIC had employed since 1935 into the statute that remains in force today. See supra, at 430 (quoting current version of statute).\nAt no point did Congress disown its initial, clear desire to protect the hard assets of depositors. See supra, at 432-435. At no point did Congress criticize the FDIC's longstanding interpretation, see infra, at 438, that a standby letter of credit backed by a contingent promissory note is not a \"deposit.\" In fact, Congress had reenacted the 1935 provisions in 1950 without changing the definition of \"deposit\" at all. Compare 49 Stat. 685-686 with 64 Stat. 874-875. When the statute giving rise to the longstanding interpretation has been reenacted without pertinent change, the \"congressional failure to revise or repeal the agency's interpretation is persuasive evidence that the interpretation is the one intended by Congress.\" NLRB v. Bell Aerospace, 416 U. S. 267, 275 (1974). See Zenith Radio Corp. v. United States, 437 U. S. 443, 457 (1978). Indeed, the current statutory definition of \"deposit,\" added by Congress in 1960, was expressly designed to incorporate the FDIC's rules and regulations on \"deposits.\" As Committees of both Houses of Congress explained the amendments: \"The amended definition would include the present statutory definition of deposits, and the definition of deposits in the rules and regulations of the Federal Deposit Insurance Corporation, [along] with . . . changes [in sections other than what is now \u00a7 1813(l)(1)].\" H. R. Rep. No. 1827, 86th Cong., 2d Sess., 5 (1960) (emphasis added); S. Rep. No. 1821, 86th Cong., 2d Sess., 10 (1960) (same). Congress, therefore, has expressly incorporated into the statutory scheme the regulations that the FDIC devised to assist it in determining what constitutes a \"deposit\" *438 within the statutory scheme. Under these circumstances, we must obviously give a great deal of deference to the FDIC's interpretation of what these regulations do and do not include within their definition of \"deposit.\"\n\nC\nAlthough the FDIC does not argue that it has an express regulation excluding a standby letter of credit backed by a contingent promissory note from the definition of \"deposit\" in 12 U. S. C. \u00a7 1813(l)(1), that exclusion by the FDIC is nonetheless longstanding and consistent. At a meeting of FDIC and bank officials shortly after the FDIC's creation, a bank official asked whether a letter of credit issued by a charge against a customer's account was a deposit. The FDIC official replied:\n\" `If your letter of credit is issued by a charge against a depositor's account or for cash and the letter of credit is reflected on your books as a liability, you do have a deposit liability. If, on the other hand, you merely extend a line of credit to your customer, you will only show a contingent liability on your books. In that event no deposit liability has been created.' \" Transcript as quoted in FDIC v. Irving Trust Co., 137 F. Supp. 145, 161 (SDNY 1955).\nBecause Penn Square apparently never reflected the letter of credit here as a noncontingent liability, and because the interwoven financial instruments at issue here can be viewed most accurately as the extension of a line of credit by Penn Square to Orion, this transcript lends support to the FDIC's contention that its longstanding policy has been to exclude standby letters of credit backed by contingent promissory notes from 12 U. S. C. \u00a7 1813(l)(1)'s definition of \"deposit.\"\nThe FDIC's contemporaneous understanding that standby letters of credit backed by contingent promissory notes do not generate a \"deposit\" for purposes of 12 U. S. C. \u00a7 1813(l)(1) has been fortified by its behavior over the following *439 decades. The FDIC has asserted repeatedly that it has never charged deposit insurance premiums on standby letters of credit backed by contingent promissory notes, and Philadelphia Gear does not contest that assertion. See Tr. of Oral Arg. 42. Congress requires the FDIC to assess contributions to its insurance fund at a fixed percentage of a bank's \"deposits\" under 12 U. S. C. \u00a7 1813(l)(1). See 12 U. S. C. \u00a7\u00a7 1817(a)(4), (b)(1), (b)(4)(A). By the time that this suit \u0097 the first challenge to the FDIC's treatment of standby letters of credit backed by contingent promissory notes \u0097 was brought, almost $100 billion in standby letters of credit was outstanding. See Board of Governors of the Federal Reserve System, Annual Statistical Digest 71 (1983); FDIC, 1983 Statistics on Banking (Table 110F). The FDIC's failure to levy premiums on standby letters of credit backed by contingent promissory notes therefore clearly demonstrates that the FDIC has never considered such letters to reflect deposits.\nAlthough the FDIC's interpretation of the relevant statute has not been reduced to a specific regulation, we conclude nevertheless that the FDIC's practice and belief that a standby letter of credit backed by a contingent promissory note does not create a \"deposit\" within the meaning of 12 U. S. C. \u00a7 1813(l)(1) are entitled in the circumstances of this case to the \"considerable weight [that] should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer.\" Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 844 (1984). As we have stated above, the FDIC's interpretation here of a statutory definition adopted wholesale from the FDIC's own regulation is consistent with congressional purpose, and may certainly stand.\n\nIII\nPhiladelphia Gear essentially seeks to have the FDIC guarantee the contingent credit extended to Orion, not assets entrusted *440 to the bank by Philadelphia Gear or by Orion on Philadelphia Gear's behalf. With a standard \"commercial\" letter of credit, Orion would typically have unconditionally entrusted Penn Square with funds before Penn Square would have written the letter of credit, and thus Orion would have lost something if Penn Square became unable to honor its obligations. As the FDIC concedes, deposit insurance extends to such a letter of credit backed by an uncontingent promissory note. See Tr. of Oral Arg. 8 (statement of Mr. Rothfeld, representing the FDIC) (\"If this note were a fully uncontingent negotiable note that were not limited by any side agreements, it would be a note backing a letter of credit within the meaning of the statute\"). See also id., at 17-18. But here, with a standby letter of credit backed by a contingent promissory note, Penn Square was not in possession of any of Orion's or Philadelphia Gear's assets when it went into receivership. Nothing was ventured, and therefore no insurable deposit was lost. We believe that, whatever the relevant State's definition of \"letter of credit\" or \"promissory note,\" Congress did not by using those phrases in 12 U. S. C. \u00a7 1813(l)(1) intend to protect with deposit insurance a standby letter of credit backed only by a contingent promissory note. We thus hold that such an arrangement does not give rise to a \"deposit\" under 12 U. S. C. \u00a7 1813(l)(1).\nAccordingly, the judgment of the court below is reversed, and the case is remanded for further proceedings consistent with this opinion.\nReversed and remanded.\nJUSTICE MARSHALL, with whom JUSTICE BLACKMUN and JUSTICE REHNQUIST join, dissenting.\nThere is considerable common sense backing the Court's opinion. The standby letter of credit in this case differs considerably from the savings and checking accounts that come most readily to mind when one speaks of an insured deposit. Nevertheless, to reach this common-sense result, the Court must read qualifications into the statute that do not appear *441 there. We recently recognized that even when the ingenuity of businessmen creates transactions and corporate forms that were perhaps not contemplated by Congress, the courts must enforce the statutes that Congress has enacted. See Board of Governors, FRS v. Dimension Financial Corp., 474 U. S. 361, 373-375 (1986). Congress unmistakably provided that letters of credit backed by promissory notes constitute \"deposits\" for purposes of the federal deposit insurance program, and the Court's attempt to draw distinctions between different types of letter of credit transactions forces it to ignore both the statute and some settled principles of commercial law. Here, as in Dimension, the inflexibility of the statute as applied to modern financial transactions is a matter for Congress, not the FDIC or this Court, to remedy.\nIt cannot be doubted that the standby letter of credit in this case meets the literal definition of a \"deposit\" contained in 12 U. S. C. \u00a7 1813(l)(1). It is \"a letter of credit . . . on which the bank is primarily liable . . . issued in exchange for. . . a promissory note upon which [Orion] is primarily or secondarily liable.\" The Court, however, holds that the note in this case, whether or not it is a promissory note under the Uniform Commercial Code (UCC) and Oklahoma law, is not a promissory note for purposes of the Federal Deposit Insurance Act. We should assume, absent convincing evidence to the contrary, that Congress intended for the term \"promissory note\" to derive its meaning from the ordinary sources of commercial law. I believe that there is no such evidence in this case.\nThe Court justifies its restrictive reading of the term \"promissory note\" in large part by arguing that Congress would not have wanted to include in that term any obligation that was not the present equivalent of money. The keystone of the FDIC's arguments, and of the Court's decision, is that Orion did not entrust \"money or its equivalent\" to the bank. The note in this case, however, was the equivalent of money, *442 and the Court's reading of Congress' intent is therefore largely irrelevant.\nFDIC concedes, as it must, that Congress has determined that a promissory note generally constitutes money or its equivalent. Moreover, that statutory definition comports with economic reality. Promissory notes typically are negotiable instruments and therefore readily convertible into cash. The FDIC argues, and the Court holds, that the promissory note in this case is \"contingent\" and therefore not the equivalent of money. However, while the FDIC argues strenuously that Orion's note is not a promissory note in the usual sense of the word, one could more plausibly state that it is not a \"contingent\" obligation in the usual sense of that word. On its face the note is an unconditional obligation of Orion to pay the holder $145,200 plus accrued interest on August 1, 1982. It sets out no conditions that would affect the negotiability of the note, and therefore is fully negotiable for purposes of the UCC, U.C.C. \u00a7 3-104(1) (1977); Okla. Stat., Tit. 12A, \u00a7 3-104(1) (1981).\nThe Court therefore misses the point when it states that at the time of the original banking Acts, the term \"promissory note\" was not understood to include a contingent obligation. Ante, at 434. The note at issue in this case is an unconditional promise to pay, and satisfies all the requisites of a negotiable promissory note, either under the UCC or the common law as it existed in the 1930's. The only contingencies attached to Orion's obligation arise out of a separate contract. As to such contingencies, the law was well settled long before 1930:\n\"[I]n order to make a note invalid as a promissory note, the contingency to avoid it must be apparent, either upon the face of the note, or upon some contemporaneous written memorandum on the same paper; for, if the memorandum is not contemporaneous, or if it be merely verbal in each case, whatever may be its effect as a matter of defence between the original parties, it is not deemed to be a part of the instrument, and does not affect, *443 much less invalidate, its original character.\" J. Thorndike, Story on Promissory Notes 34 (7th ed. 1878) (footnotes omitted).[1]\nIt is far from a matter of semantics to state that while Orion and the bank may have an oral understanding concerning the bank's treatment of Orion's note, that note itself is unconditional and equivalent to money. The Court correctly observes that the bank would have breached its oral contract had it attempted to sue on the note; nevertheless, Orion would have had separately to plead and prove a breach of contract in that case, because parol evidence that the contract between the parties differed from the written instrument would have been inadmissible in the bank's action to collect the debt. See American Perforating Co. v. Oklahoma State Bank, 463 P. 2d 958, 962-963 (Okla. 1970). Similarly, should the note have found its way into the hands of a third party, Orion would have had no choice but to honor it, again being left with only the right to sue the bank for breach of the oral contract. Orion's entrustment of the note to the bank was not, therefore, completely risk free.\nThe risk taken on by Orion may not differ substantially from the risk assumed by one who hands over money to the bank to guarantee repayment of funds paid out on a letter of credit. The bank typically undertakes to put such cash collateral into a special account, where it never enters into the general assets of the bank. See U.C.C. \u00a7 5-117, comment (1977). Should the bank cease operations, the customer will enjoy a preference in bankruptcy, entitling it to receive its money back before general unsecured creditors of the bank *444 are paid. U.C.C. \u00a7 5-117; Okla. Stat., Tit. 12A, \u00a7 5-117 (1981). Like Orion, then, that hypothetical customer has little to fear absent misconduct by the bank or a third party. If the federal deposit insurance program should not protect Philadelphia Gear, therefore, it probably should not protect any holder of a letter of credit, whether commercial, standby, funded, or unfunded.[2] That, however, is clearly a matter for Congress to determine.\nWhile the Court purports to examine what Congress meant when it said \"promissory note,\" in fact the Court's opinion does not rest on any special attributes of Orion's note. Rather, the Court rules that when an individual entrusts a negotiable instrument to a bank, that instrument is not \"money or its equivalent\" for purposes of \u00a7 1813(l)(1) so long as the bank promises not to negotiate it or collect on it until certain conditions are met. That is a proviso that Congress might have been well advised to include in the Act, but did not. I therefore dissent.\nNOTES\n[*] Briefs of amici curiae urging reversal were filed for the American Bankers Association et al. by John L. Warden and Stanley F. Farrar; for the Council on International Banking, Inc., by Bud G. Holman; for the National Association of Bond Lawyers by Daniel O. Mahoney; and for the U. S. Conference of Mayors et al. by Benna Ruth Solomon and Joyce Holmes Benjamin.\n[1] We would have a very different case if the conditions put upon Orion's obligation to the bank were reflected on the face of the note, as they were in Allen v. FDIC, 599 F. Supp. 104 (ED Tenn. 1984), appeal pending, No. 85-5003 (CA6), a case raising the same issue as the present one. Because such a note is not negotiable, it is much more plausible to argue that Congress would not have considered it \"money or its equivalent.\" The note in this case, however, is in no sense a contingent note.\n[2] It seems odd that Philadelphia Gear's status as an insured depositor should depend on the terms of the repayment agreement between Orion and the bank. Ordinarily, Philadelphia Gear would be indifferent to the agreement between Orion and the bank, and might not even be aware of the terms of that agreement. The Court, therefore, is not necessarily bringing greater rationality to this area of the law by creating distinctions between types of letters of credit for purposes of federal deposit insurance coverage.\n"} -{"text": "\n758 N.W.2d 91 (2008)\nSTATE\nv.\nGUMAN.\nNo. 2007AP1205.\nSupreme Court of Wisconsin.\nAugust 18, 2008.\nPetition for review denied.\n"} -{"text": "873 F.2d 944\n27 Fed. R. Evid. Serv. 999\nRonnie HOLMAN, Plaintiff-Appellee,v.Steve CAYCE, Defendant-Appellant.\nNo. 88-5161.\nUnited States Court of Appeals,Sixth Circuit.\nArgued Dec. 8, 1988.Decided May 2, 1989.\n\nJames D. White, Jr., Reneau & Reneau, Celina, Tenn., for plaintiff-appellee.\nErnest D. Bennett, III, Sparta, Tenn., for City of Sparta, Tenn.\nErnest D. Bennett, III, Sparta, Tenn., for Carl Dilldine.\nJohn E. Acuff (argued), Barnes & Acuff, Cookeville, Tenn., Robert H. Watson, Jr., Watson & Emert, Knoxville, Tenn., for Steve Cayce.\nBefore MARTIN, JONES and NORRIS, Circuit Judges.\nALAN E. NORRIS, Circuit Judge.\n\n\n1\nThe only issue presented on appeal in this civil action is whether a police officer, who refused to reveal the identity of his confidential informant, was properly held to be in contempt of court. Because the identity of the informant was protected from discovery by the \"informer's privilege,\" we reverse the district court's order.\n\nI.\n\n2\nDefendant, Steve Cayce, is a police officer for the City of Sparta, Tennessee. Acting upon information received from an informant, he was waiting in an unoccupied residence when plaintiff, Ronnie Holman, attempted to burglarize it. Cayce shot Holman in the course of apprehending him. After Holman was convicted of burglary and served a prison sentence, he filed this action for damages, pursuant to 42 U.S.C. Sec. 1983, claiming the shooting violated his constitutional rights.\n\n\n3\nWhen Cayce refused to identify his informant, Holman sought to compel discovery. Although the trial court denied Holman's motion because \"the relevancy of such information was not sufficiently proved by the plaintiff,\" the court went on to order Cayce to provide the informant's identity to his attorney, who was in turn to obtain the affidavit of the informant, including \"all relevant information disclosed to Cayce by his informant,\" and submit it to the district court for filing \"after the case is disposed of\" to be \"forwarded to the Court of Appeals\" in the event of an appeal. In a later memorandum order, the district judge said he had reasoned that the informant might provide relevant information regarding Cayce's state of mind at the time he used force to prevent Holman's escape, and the judge wanted the affidavit submitted under seal, for review.\n\n\n4\nWhen the court ascertained that the informant's affidavit had not been filed, the court conducted a hearing and held Cayce in contempt.\n\n\n5\nThe trial resulted in a jury verdict for the defendants, from which no appeal has been taken. Subsequently, the court entered the order finding Cayce in contempt, which is now before this court on appeal.\n\nII.\n\n6\nFed.R.Civ.P. 26(b)(1) provides that \"[p]arties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action.\" (Emphasis supplied.)\n\n\n7\nAmong the evidentiary rules of privilege said to be uniquely available to the government is its privilege to withhold from disclosure the identity of persons who furnish to law enforcement personnel information concerning violations of law. Roviaro v. United States, 353 U.S. 53, 59, 77 S.Ct. 623, 627, 1 L.Ed.2d 639 (1957). See also 8 C. Wright & A. Miller, Federal Practice & Procedure Sec. 2019 (1970). By preserving their anonymity, the privilege fosters the public's interest in effective law enforcement by encouraging citizens to communicate to the government information regarding the commission of crimes. United States v. Whitley, 734 F.2d 1129, 1137 (6th Cir.1984) (citing Roviaro, 353 U.S. at 59, 77 S.Ct. at 627). Although originally applied in the context of criminal proceedings, the \"informer's privilege\" is also applicable in civil cases. See Hampton v. Hanrahan, 600 F.2d 600, 637 (7th Cir.1979), rev'd on other grounds, 446 U.S. 754, 100 S.Ct. 1987, 64 L.Ed.2d 670 (1980); 8 Wright & Miller Sec. 2019. The privilege is not an absolute one; its limit is found by balancing \"the public interest in protecting the flow of information against the individual's right to prepare his defense.\" Roviaro, 353 U.S. at 62, 77 S.Ct. at 629. Whether, in balance, the public policy favoring nondisclosure will be outweighed by a party's interest in obtaining disclosure, will depend upon the particular circumstances of each case. Id.\n\n\n8\nIn balancing those competing interests in the context of a criminal case, courts must consider \"the crime charged, the possible defenses, the possible significance of the informer's testimony, and other relevant factors.\" Roviaro, 353 U.S. at 62, 77 S.Ct. at 629. When the informant has not been \"an active participant in the events underlying the defendant's potential criminal liability,\" the balance weighs heavily toward nondisclosure. United States v. Sharp, 778 F.2d 1182, 1186 n. 2 (6th Cir.1985), cert. denied, 475 U.S. 1030, 106 S.Ct. 1234, 89 L.Ed.2d 342 (1986); see also United States v. Skeens, 449 F.2d 1066, 1071 (D.C.Cir.1971) (collecting cases).\n\n\n9\nIn the context of civil litigation, the emphasis shifts from consideration of whether disclosure is necessary to an accused's defense to whether disclosure is essential to the fair determination of a party's cause. Since the guilt or innocence of a criminal defendant may be viewed as \"qualitatively more significant\" than the outcome of civil litigation, that difference in significance is a factor to be considered when the privilege is asserted in a civil proceeding. Hampton, 600 F.2d at 637 n. 40. But this distinction should be treated only as one of the factors utilized in a Roviaro balancing; it does not, by itself, warrant our saying that a higher standard of justification must be satisfied in civil cases in order for an exception to the privilege to be recognized, since it cannot be said that all civil cases are less significant than all criminal cases. Id. Nonetheless, while the standard is said to be no different whether the privilege is sought to be invoked in a civil or criminal proceeding, as a practical matter, consideration of the circumstances involved in civil litigation will usually mean that the privilege is less likely to give way in a civil action. 8 Wright & Miller, Sec. 2019.\n\n\n10\nThus, where the informant was neither a witness to nor an active participant in the conduct which gave rise to the civil cause of action, the party seeking to compel disclosure of the identity of a confidential government informant will shoulder a formidable burden in establishing a justification for overriding the privilege. Normally, that can be accomplished only by a compelling demonstration that the information sought from the informant is likely to influence the outcome of the case or is essential to the party's preparation for trial.\n\n\n11\nHere, Holman failed to make a compelling demonstration that the name of the informant was relevant to the outcome of his civil rights action. There was no indication that the informant was an active participant in the burglary or a witness to it.\n\n\n12\nAccordingly, any balancing analysis begins with the scales tipped in favor of nondisclosure. Holman was not asserting that disclosure was necessary in order for him to effectively defend himself against the serious criminal charge of burglary. Instead, he was seeking disclosure in the context of a civil case based upon his claim that Cayce used excessive force in preventing his escape from the scene of the burglary. Obviously, the context giving rise to the alleged need for this information was vastly different in the civil case. Indeed, Holman's need for the information was so speculative that the trial judge concluded that the information was not relevant to the proof of his case. Certainly, then, considerations of fairness do not compel the conclusion that the public's interest in effective law enforcement was outweighed by a demonstration that the privilege must yield in order that Holman obtain information essential to a fair determination of his cause. The trial court's subsequent suggestion that the affidavit may have revealed relevant information is simply too tenuous to provide a compelling basis to overcome the privilege. Finally, the trial court's expressed concern for establishing a record has been rendered moot by Holman's failure to appeal.\n\n\n13\nBecause we conclude that the surrounding circumstances weighed in favor of nondisclosure, the identity of Cayce's confidential informant was privileged matter, and the trial judge improperly imposed contempt sanctions.\n\nIII.\n\n14\nFor the foregoing reasons, the order of the district court is reversed.\n\n"} -{"text": "\n390 B.R. 257 (2008)\nIn re Yuval RAN, Debtor in a Foreign Proceeding.\nNo. 06-37067-H5-15.\nUnited States Bankruptcy Court, S.D. Texas, Houston Division.\nJune 12, 2008.\n*260 H. Miles Cohn, Sheiness Scott, et. al, Houston, TX, for Foreign Representative.\nHector Duran, Office of US Trustee, Houston, TX, for U.S. Trustee.\nWayne Kitchens, Heather Heath McIntyre, Steven Douglas Shurn, Hughes Watters and Askanase, Houston, TX, for Debtors.\n\nORDER AFTER REMAND\nKAREN K. BROWN, Bankruptcy Judge.\n\nI. Order Denying Recognition Under Chapter 15\nAfter a full evidentiary trial on the merits, consideration of all of the evidence presented at trial, and evaluation of the credibility of the witnesses, on May 22, 2007, the Court issued its order denying recognition of a foreign proceeding under 11 U.S.C. \u00a7 1515, which states the Court's findings, in pertinent part:\n... the Court finds that Houston, Harris County, Texas is the center of Yuval Ran's main interests and has been since 1997.\nOrder Denying Recognition of Foreign Proceeding Under 11 U.S.C. \u00a7 1515 at p. 4.[1] Zuriel Lavie appealed that order to the district court.\n\n\n*261 II. Remand and Instructions of the District Court\nOn February 6, 2008, the district court issued its order of remand which instructs the Court to: (1) determine what factors are appropriate when considering the center of main interests of an individual debtor; (2) make findings of fact in accord with those factors; and (3) determine if the presumption that an individual debtor's habitual residence is his center of main interests has been rebutted. The district court further instructs:\nTherefore, a review of proffered proof is required to determine whether contrary evidence justifies a finding that an individual debtor's COMI is somewhere other than the place of his habitual residence. See, e.g., In re Loy, 380 B.R. 154; In re SPhinX, 371 B.R. 10 (contrary evidence reviewed in determining COMI of corporate debtor).\nLavie v. Ran, 384 B.R. 469, 471 (S.D.Tex. 2008).\nIn In re Loy, 380 B.R. 154, 163 (Bankr. E.D.Va.2007), the court ruled that the single factor of debtors' ownership of real property located outside the country of debtors' habitual residence, was insufficient to rebut the \u00a7 1516(c) presumption that debtors' habitual residence was the location of debtors' center of main interests. In re Loy, 380 B.R. 154, 163 (Bankr. E.D.Va.2007). The bankruptcy court in In re SPhinX, Ltd., 351 B.R. 103, 121 (Bankr. S.D.N.Y.2006), aff'd, 371 B.R. 10 (S.D.N.Y. 2007), held that the foreign representative's improper motive in seeking recognition of the debtors' insolvency proceeding as a foreign main proceeding under Chapter 15 was the decisive factor in the court's denial of recognition of the foreign proceeding as a main proceeding. The court stated:\nBut for one additional consideration, ... in balancing all of the foregoing factors the Court might be inclined to find the *262 Debtors' COMI in the Cayman Islands and recognize the proceedings as foreign main proceedings ... normally the Court would recognize the Cayman Islands proceedings as main proceedings. However, a primary basis for the Petition, and the investors' tacit consent to the Cayman Islands proceedings as foreign main proceedings, is improper: that is, it has the purpose of frustrating the RCM Settlement by obtaining a stay of the appeals upon the invocation of Bankruptcy Code section 362(a) that would go into effect under section 1520(a)(1) upon such recognition. See Tr. at 87, at which counsel for the JOLs reluctantly admitted this strategy, after considerable efforts by Mr. Stride and counsel to obfuscate it. Id. at 41-4, 47, 84. As noted above, staying the appeal would have the same effect as overturning the RCM settlement without addressing or prevailing on the merits. (It is this sidestepping of consideration of the merits, or, at a minimum, obtaining strategic leverage without addressing the merits, rather than the JOLs' taking a position contrary to the settlement, that is the problem.) Indeed, given that the JOLs did not articulate a proper basis, or even actively pursue a request, for any other relief under chapter 15-for example, an injunction or turnover of property-with the exception of a request for further discovery primarily relating to the appeals, Tr. at 88-89, this litigation strategy appears to be the only reason for their request for recognition of the Cayman Islands proceedings as foreign main proceedings.\nIn any event, the strategy taints the JOLs' request and the investors' consent to it, giving the clear appearance of improper forum shopping.\nIn re SPhinX, Ltd., 351 B.R. 103, 121 (Bankr.S.D.N.Y.2006), aff'd, 371 B.R. 10 (S.D.N.Y.2007). The district court affirmed, holding \"Such circumstances as this support denial of recognition as a foreign main proceedings on the ground that the recognition is being sought for an improper purpose.\" In re SPhinX, Ltd., 371 B.R. 10, 18 (S.D.N.Y.2007).\nBy leaving undisturbed this Court's finding that Lavie failed to prove the alternative statutory basis for recognition, the district court recognized that Lavie failed to prove that Ran has an establishment in Israel. Under Chapter 15, \"establishment\" means any place of operations where the debtor carries out a nontransitory economic activity. 11 U.S.C. \u00a7 1502(2). The Court's findings concerning Ran's establishment are set forth at note 1, findings 24-26.\n\nIII. Factors Used to Identify Center of Main Interests\n\nA. Comparison of Chapter 15 with International Law on Cross-Border Insolvency\nAn order shall be entered recognizing a foreign proceeding as a foreign main proceeding only if the debtor's center of main interests is located in the country where the foreign proceeding is pending. 11 U.S.C. \u00a7\u00a7 1502(4); 1517(a)(1). If the foreign proceeding is not pending in a country where the debtor has its center of main interests or where it has an establishment, then the foreign proceeding is simply not eligible for recognition under Chapter 15. In re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., 374 B.R. 122 (Bankr.S.D.N.Y. 2007) (citing Daniel M. Glosband, SPhinX Chapter 15 Opinion Misses the Mark, 25 Am. Bankr.Inst. J. 44, 45 (Dec./Jan.2007) at 85), aff'd, Slip Copy, 2008 WL 2198272 (S.D.N.Y.2008).\nChapter 15 is based on the UNCITRAL Model Law on Cross-Border Insolvency. *263 The House Report issued in connection with enactment of Chapter 15 as part of P.L. 109-8, Bankruptcy Abuse Prevention and Consumer Protection Act, states that the Guide to Enactment of the UNCITRAL Model Law on Cross-Border Insolvency, U.N. Gen. Ass., UNCITRAL 30th Sess. U.N. Doc. A/CN.9/442 (1997) (\"the Guide\") is to be consulted for guidance as to the meaning and purpose of its provisions. H.R. REP. 109-51(I), 2005 U.S.C.C.A.N. 88.\nThe use of a single criterion, center of main interests, for qualifying a foreign proceeding as a main proceeding, is intended to avoid the risk of various foreign proceedings competing for recognition as the main proceeding. The Guide at section 127.[2] Thus, a debtor has only one center of main interests.\n*264 In interpreting Chapter 15, the Court is to consider its international origin and the need to promote an application of Chapter 15 that is consistent with the application of similar statutes adopted by foreign jurisdictions. 11 U.S.C. \u00a7 1508. European Council Regulation No. 1346/2000 of 29 May 2000 is the regulation applicable to the member states of the European Union governing initiation and *265 recognition of insolvency proceedings opened in an EU member state.[3] The EU *266 Regulation provides, \"The `centre of main interests' should correspond to the place where the debtor conducts the administration of his interests on a regular basis and is therefore ascertainable by third parties.\" Id. at recital 13.\nThe EU Regulation was preceded by the European Union Convention on Insolvency Proceedings. The text of the Regulation and of the Convention are \"identical in all material respects.\" Eurofood IFSC Ltd. (C-341/04), [2006] ECR 3813, (ECJ 2006) (Opinion of Advocate-General Jacobs, 2005)(Reference for a preliminary ruling: Supreme Court-Ireland) at \u00b6 2. The Report on the Convention on Insolvency Proceedings by Miguel Virgos and Etienne Schmit provides \"useful guidance when interpreting the Regulation.\" Eurofood at \u00b6 2. The Report explains that as used in the phrase \"centre of main interests,\" the term \"interests\" includes not only commercial, industrial and professional activities, but also the general economic activities of private individuals (eg. consumers). Furthermore, the term \"main\" serves as a criterion for the cases where these interests include activities of different types which are run from different centres. The Report at \u00b6 75. The Report states, \"In principle, the centre of main interests will in the case of professionals be the place of their professional domicile and for natural persons in general, the place of their habitual residence.\" Id. A debtor's centre of main interests \"must be identified by reference to criteria that are both objective and ascertainable by third parties.\" Id.\nThe EU Regulation provides, \"The courts of the Member State within the territory of which the centre of a debtor's main interests is situated shall have jurisdiction to open insolvency proceedings.\" Id. at Article 3.1. Under the EU Regulation, the petitioner, either the debtor or a creditor, seeking to initiate a main insolvency proceeding, represents that the country in which the petition is filed is the *267 centre of main interests of the debtor. The petitioned court opens main insolvency proceedings if it determines it has jurisdiction under the EU Regulation as the location of the debtor's centre of main interests. Id. at Article 3.1 While under the EU Regulation, the determination of the location of the debtor's centre of main interests is made at the time the petition is presented initiating the insolvency proceeding, under Chapter 15, the determination is made at the time the petition for recognition is presented to the U.S. court.\nIf the court of an EU member state determines that it has jurisdiction under the EU Regulation to open main insolvency proceedings as the location of the debtor's centre of main interests, that decision is not subject to reconsideration by the courts of any other EU member state and must be accepted as final on the issue. Id. at recital 22 and Article 17.2. In contrast, Chapter 15 does not provide for recognition of an insolvency proceeding based on a foreign court's determination that it has jurisdiction as the location of the debtor's center of main interests. In re SPhinX, Ltd., 351 B.R. 103, 120 n. 22(Bankr.S.D.N.Y.2006) (\"... [E]ven if the Cayman Court had made such a determination [that the insolvency proceeding was a main proceeding] it would not be binding on this Court\"), aff'd, 371 B.R. 10. Instead, Chapter 15 requires the U.S. court to make an independent evaluation of the location of the debtor's center of main interests at the time a petition for recognition is presented.\nThe EU Regulation is not the international equivalent of Chapter 15 or the Model Law as it does not provide any procedure for recognition by the courts of an EU member state of insolvency proceedings initiated in a non-EU member state. See European Council Regulation No. 1346/2000 of 29 May 2000, Article 3.1. Similarly, the EU Regulation does not provide any procedure for recognition of an insolvency proceeding when the debtor's centre of main interests is located outside of the EU member states. Id. at Article 3.2.\n\nB. Objective Factors Considered by European Courts\nAlthough, as stated in Proceedings brought by Staubitz-Schreiber (Case 1/04), [2006] E.C.R. 1-701 [2006] I.L.Pr. 30 (ECJ Grand Chamber 2006), the term \"centre of main interests\" \"has the status of an independent concept of Community law, which confers on it a uniform meaning that is independent of the national legal systems ... [and][i]t must therefore be given a single Community definition,\" the concept of identifying the location of an individual's \"centre of interests\" is well recognized in the EU. The right of freedom of movement within the European Community allows individual citizens to travel freely between European countries to live and work. Various EU regulations and the national laws of EU member states governing, among other things, taxation, unemployment compensation, and old age compensation, base jurisdiction on the location of the individual's centre of interests. European courts and administrative authorities are routinely presented with complex fact scenarios requiring an evaluation of objective factors to determine the location of an individual's permanent centre of interests for purposes of application of these laws and regulations.\nAs used in Community law, \"permanent residence,\" \"habitual residence,\" and \"normal residence\" mean the location of the individual's permanent centre of interests. See Anciens Etablissements d'Angenieux Fils Aine v. Hakenberg (Case 13/73), [1973] ECR 935 (ECJ 1973) (Reference for a preliminary ruling: Cour de cassation-France) *268 (holding that under Community law, the phrase, \"permanent residence,\" meaning habitual residence, for purposes of determining which social security system applied to a French citizen who represented various French businesses, who had a permanent residence in France where he worked three months of the year, but spent nine months of the year in Germany on continuous business-canvassing tours on behalf of his French clients, and who had no fixed place of abode in Germany, must be understood as the place in which the worker \"has established the permanent centre of his interests and to which he returns in the intervals between his tours\").\nA temporary move to another member state does not mean that an individual has moved the permanent centre of his interests and cannot, therefore, be regarded as terminating his habitual residence. Pedro Magdalena Fernandez v. Commission of the European Communities (C-452/93) [1994] ECR 4295 (ECJ 3rd Chamber 1994). When an individual relocates, for purposes of determining his centre of interests, account must be taken of the length and continuity of the person's residence before he moved, the length and purpose of his absence, the nature of his occupation in the other Member State, the family situation, and the intentions of the person. Di Paolo v. Office National del'Emploi, (Case 76/76), [1977] ECR315(ECJ 1977) (Reference for a preliminary ruling: Cour de cassation \u0097 Belgium). The concept of residence signifies a person's \"habitual or permanent centre of interests\"; a person resides in a particular place if he has occupational or family ties there, and the length of his stay there is relevant only in so far as it throws light on those ties. Pinna v. Caisse d'Allocations Familiales de la Savoie, (Case 41/84) [1986] E.C.R. 1(ECJ 1986) (Reference for a preliminary ruling: Cour de cassation \u0097 France).\nIn other words, `residence' is not based simply on a physical fact, such as that of determining a person's address; what is more important is the intention that the stay should be of a permanent character. As a result, a person may be resident in a place even if he spends only a few months there and, conversely, a long stay may not constitute residence \u0097 for instance where the person concerned extends his stay for the purposes of study, work, treatment or recreation but does not intend it to be permanent.\nPinna v. Caisse d'Allocations Familiales de la Savoie, (Case 41/84) [1986] E.C.R. 1(ECJ 1986).\nFormal and quantitative factors such as the number of days a person remains in a location per year or the fact that an individual possesses an official residence permit may evidence actual residence, but these factors are not decisive where other evidence exists which suggests that the centre of an individual's interests is, in fact, located elsewhere. Schaflein v. Commission of the European Communities, (Case284/87) [1988] ECR 4475, (ECJ 2nd Chamber 1988). \"Residence is not based simply on the actual fact of living in a given place. It also involves the intention of thereby achieving the continuity which stems from a stable way of life and from the course of normal social relations.\" Id. (Opinion of Advocate-General Mancini).\nIn Gouvras-Laycock v. Commission of the European Communities (T44/89)(CFI 3rd Chamber 1990) [1990] 3 C.M.L.R. 174, the court was required to determine the location of Gouvras-Laycock's centre of interests. Gouvras-Laycock was a British national and official of the Commission of the European Communities, whose father lived in Dublin, and whose mother, a Greek national, lived in London as a member *269 of the staff of the Greek Embassy in Great Britain. Gouvras-Laycock's husband was a Greek national who worked in Luxembourg. Gouvras-Laycock had lived in London and been employed by British Airways from July 1974 to September 1982, except for a leave period from June 1980 through May 1981 when she lived with her husband in Athens. From May 1981 to October 1982 she lived in London then moved to Luxembourg where she began working on September 1, 1986 in the Official Publications Office of the European Communities in Luxembourg. Gouvras-Laycock contended that she took up permanent residence in Athens, that she and her husband own a house there, that she was married in Athens and lived there prior to entering the service of the Commission, that she retains family ties there, and that the centre of her interests is there. The court agreed that there were more relevant ties establishing Athens over any other place as the centre of the applicant's interests.\nIn Rigsadvokaten v. Ryborg, (Case 297/89) [1993] 1 C.M.L.R. 218 (ECJ 6th Chamber 1991) (Reference from Denmark by the Hojesteret (Supreme Court)) the court rejected the contention of Danish authorities that Ryborg, a Danish national, was a resident of Denmark. Ryborg had emigrated to Germany where he had obtained work and an apartment. However, he traveled frequently to Denmark in a German-registered motor car to visit a woman friend resident in Denmark with whom he regularly stayed for the night. On the premise that Ryborg was normally resident in Denmark, Danish authorities confiscated his car which was not registered in Denmark and charged Ryborg with the offence of intentionally smuggling his car into Denmark without declaring it to the customs authority for the purpose of payment of customs duties and of tax, and with the offence of using the car in Denmark without having paid tax. Since the impoundment of his car, Ryborg was only able to visit on weekends. Thereafter, on 13 March 1989 Ryborg obtained German nationality. Ryborg admitted that from July or August 1982 onwards, he spent nearly every night and most weekends at his friend's house, but denied that he had transferred his residence to Denmark.\nIn Ryborg, the court held that the consistent case law of the court provides that \"residence\" is the place in which the individual has established the permanent centre of his interests. Id. Once residence has been defined as \"a person's habitual or permanent centre of interests,\" it is clear that occupational links and personal links \u0097 in particular the number of days (or nights) spent in a particular place in the course of a year \u0097 are all to be regarded as relevant factors, individually and collectively, in determining a person's normal residence. Id. Quantitative criterion, for example, the number of nights spent in a particular place, cannot be regarded as decisive if other factors point to a situation different from that which derives from the quantitative criterion alone. Id. Thus, despite the fact that Ryborg had spent every night and/or weekend in Denmark, the court found that he had never manifested any intention to move permanently into his friend's house; he had never moved furniture or other personal effects to Denmark and never contributed in any way to the household expenses. Id. Therefore, the court held that in the context of determining \"normal residence,\" \"the mere fact that a national of member-State B who has moved to member-State A, where he has found employment and accommodation, has after a certain date and for over a year spent almost every night and weekend with a woman friend in member-State B whilst retaining his employment and his accommodation in member-State A is not *270 sufficient to justify the conclusion that he has moved his normal residence to member-State B.\" Id.\nIn Swaddling v. Adjudication Officer (C90/97), [1999] ECR 1075, [1999] Fam. Law 382, (ECJ 5th Chamber 1999) (Reference for a preliminary ruling: Social Security Commissioner \u0097 United Kingdom), a British national, who had worked mainly in France for 15 years, then lost his job, and was unable to find other work in France, returned to the UK and claimed income support. He declared that he no longer wished to take up employment which involved spending long periods working abroad. The ECJ ruled that the term \"residence\" has a Community-wide meaning. It means a person's habitual residence and refers to the State where the habitual centre of that person's interests is to be found. Id. Relevant considerations in determining that location are the person's family circumstances, his reasons for moving, the length and continuity of his residence, the security of his employment, and his apparent intentions as they appear from all the circumstances. Id. The court found that the short length of the applicant's residence since his return to his State of origin, where his close relatives live and in which he intends to remain, could not preclude his entitlement to income: support from that State. Id.\nIn Louloudakis v. Greece (C262/99) [2001] ECR 5547 (ECJ 6th Chamber, 2001) (Reference for a preliminary ruling: Trimeles Dioikitiko Protodikeio Irakleiou-Greece) the Greek court sought clarification of the criteria relevant to a determination of \"normal residence\" under Article 7(1) of Council Directive 83/182/EEC of 28 March 1983 for tax exemptions within the Community for vehicles temporarily imported into one Member State from another where a person has both personal and occupational ties in two Member States. The facts of the case showed that Mr. Louloudakis: (1) was born in Greece in 1956 and moved to Italy in 1974; (2) held Greek and Italian nationality; (3) held a Greek passport and driver's license and an Italian identity card and driver's license; (4) owned a house in Florence, Italy; (5) rented a house in Greece; (6) with his wife, started a business in Florence, Italy, Studio Fiorentino SA, and another business in Greece, Kritiki Viomikhania Elaioladou AE (Kriyel); (7) filed income tax returns in Greece; (8) was an architect insured professionally by a Greek insurance association, but had never pursued his profession in Greece; and (9) was registered on the electoral roll of the town of San Severo, Italy, where he voted in the elections of 21 April 1996, subsequent to the facts material to the main proceedings. In addition, his children attended both a private school in Greece and a school in Florence. One of the children had received inoculations in San Severo, Italy, on 18 August 1994, 24 September 1994, and 25 February 1995. In March 1995, Greek authorities impounded three, vehicles owned by Studio Fiorentino, which were registered in Italy, and fined Mr. Louloudakis for customs charges and penalties on the basis that he was normally resident in Greece and had wilfully failed to pay duties due.\nThe European Court of Justice held that the phrase \"normal residence,\" contained in the Directive, means the location of the individual's permanent centre of interests. Id. The location of an individual's permanent centre of interests must be determined in the context of an overall assessment by reference to all the relevant facts including the actual presence of the person concerned and of the members of his family, availability of accommodation, the place where the children actually attend school, the place where business is conducted, the place where property interests are situated, *271 and the place of administrative links to public authorities and social services, inasmuch as those factors express the intention of that person to confer a certain stability on the place of connection, by reason of the continuity arising from a way of life and the development of normal social and occupational relationships. Id. In the event that such an overall assessment does not result in its determination, primacy must be given to personal ties. Id.\nPersonal ties are an individual's links with natural persons, that is, with specific individuals. Alevizos v. Ikonomikon, (Case C-392/05), [2007] 2 C.M.L.R. 51 (ECJ 4th Chamber, 2007) (Reference from Greece \u0097 Simvoulio tis Epikratias (Council of State)). If an individual has changed his residence from one Member State to another Member State and lives in the new state together with his wife and his underage children, that is a strong indication that his personal ties have moved there despite the fact that he may also have personal ties in his home state with other family members. Id. An individual's personal ties are, as a rule, with the persons with whom he lives permanently in a common household. Id. Administrative links to public authorities and social services are possible criteria for determining a person's centre of interests, but only in so far as those factors express the intention of that person to confer a certain stability on such ties by reason of continuity and a way of life. Id. Normally, it would not be appropriate, in determining the focal point of the personal ties of the person concerned, to give primacy to such factors over his ties with specific individuals with whom he lives in a common household. Id. Residence means the centre of interests of the individual concerned, and refers to the place where the person has established and intends to maintain the permanent or habitual centre of his interests and it implies, irrespective of the purely quantitative element of the time spent by the person concerned in a particular country, not only the actual fact of living in a given place, but also the intention of thereby achieving the continuity which stems from a stable way of life and from the course of normal social relations. Borbely v. Commission of the European Communities, (Case F-126/05) 2007 WL 98303, (CFI 2007). A temporary posting to a country does not preclude a person from making a specific place the centre of his interests. Id. It is for the authorities to examine on a case-by-case basis whether individuals whom it appoints have indeed moved the centre of their interests to the place of their Community posting. Such an assessment includes elements of subjectivity with actual residence constituting one factor which, among others, determines the centre of the official's interests. Id.\nIn Skjevesland v. Geveran Trading Co Ltd (No.4), [2003] B.C.C. 391, [2002] EWHC 2898 (Ch. Div.2002), the U.K. court evaluated the impact of the EU Regulation on its jurisdiction to open insolvency proceedings brought by a creditor against Mr. Skjevesland, an international securities trader who regularly traveled on business between a number of cities in Europe, staying at his various residences, including a leased flat in London. The court determined that Mr. Skjevesland did not have his centre of main interests in the UK; therefore the UK court did not have jurisdiction under the EU Regulation to open insolvency proceedings. Id. Nonetheless, insolvency proceedings could be opened against Mr. Skjevesland if his centre of main interests was not otherwise located in an EU member state. The evidence showed that Mr. Skjevesland during the prior three years spent 30 per cent of his time in Spain; 22.5 per cent of his time in Switzerland; 15 per cent of his time in France; 7.5 per cent of his time in Norway/Sweden; *272 and 25 per cent of his time in England. Mr. Skjevesland owned properties in Marbella, Spain; Oslo, Norway; Divonne, France; and Villars, Switzerland. Most of Mr. Skjevesland's business was done either over the telephone or the internet from France or Spain. While he spent the majority of his time in Spain, he regarded Switzerland as the place where he had emotional ties and as his home. The court found that Switzerland was the location of his family, his wife's family, his emotional ties, his pension, and his bank accounts, and that all Mr. Skjevesland had always wanted to be and had been was a Swiss banker. Based on these factors, Switzerland was the location of Mr. Skjevesland's center of main interests. Therefore, as Switzerland is not an EU Member State, jurisdiction for an insolvency proceeding in the UK was proper under UK national law.\nIn X v. Fortis Bank (Nederland) NV, [2004] I.L.Pr. 37, (HogeRaadDen Nederlanden (Dutch Supreme Court) 2004), the court rejected X's argument that the location of his habitual residence was the location of his centre of his main interests. The court states:\nParagraph 13 of the Preamble to the Regulation states that the \"centre of main interests\" should be the place where the debtor habitually conducts the management of his interests, and where he is recognised as so doing by third parties. Neither the text of the Regulation nor its Preamble specify that for natural persons the centre of main interests within the meaning of Art.3(1) of the EU Insolvency Regulation must be the place of their habitual residence, as was argued in para.2.4.1. Nor can sufficient support for this argument be\" found in the passage to which the paragraph refers, from Virgos and Schmit's explicatory report on the unimplemented Convention on Insolvency Proceedings of 1995, which formed the model for the EU Insolvency Regulation. Paragraph 13 of the Advocate General's opinion does not imply that, for natural persons, the place of their habitual residence \"must be considered to be\" the centre of their main interests, nor that this should be inferred where no evidence to the contrary is adduced. This legal objection is therefore founded upon an incorrect interpretation of the law, and accordingly fails.\nId. at 18. In dismissing his appeal, the court found unavailing X's arguments that he had moved from the Netherlands to the Virgin Islands, and from there to Belgium, where he had resided until shortly before the court's decision; that he had carried out no commercial activities in the Netherlands since 1994; that Fortis had sent bank statements to his Belgian address; and that he did not in fact have substantial interests in a large number of companies registered in the Netherlands. The court held that the evidence supported the lower court's judgment and showed that X had a large number of companies registered in the Netherlands, had continued to administer his commercial interests from within the Netherlands, and that Fortis had sent business correspondence to X's address in the Netherlands to which X had, without fail, responded. Id. at 19.\nIn Shierson v. Vlieland-Boddy, [2006] I.L.Pr. 12, [2005] EWCA Civ 974, (CA (Civ Div) 2005), Mr. Malcolm Shierson, the trustee in bankruptcy of Mr. Martin Vlieland-Boddy, initiated insolvency proceedings against his twin brother, Mr Clive Vlieland-Boddy to recover costs awarded in favor of Shierson and against Mr Clive Vlieland-Boddy in an earlier voluntary insolvency proceeding initiated by Mr Clive Vlieland-Boddy in which he had claimed the UK as his centre of main interests. In response to the involuntary petition, Mr. *273 Clive Vlieland-Boddy contended that subsequent to the initiation of his voluntary proceeding, he had moved his centre of main interests to Spain and was no longer subject to the jurisdiction of the UK courts. The opinion of Lord Chadwick states:\n38 It is convenient to consider the first two of those grounds together. The issue on which each may be said to turn is, I think, the same: what weight should be given to the perception of creditors as to the debtor's centre of main interest at the time that credit is extended. In particular, how ready should the court be to accept that the debtor is free to change his centre of main interest between the time at which credit is extended and the opening of insolvency proceedings. It is a striking feature of the present case that the petition debt, itself, arises from costs orders made in proceedings in which the debtor was invoking the insolvency jurisdiction of the High Court on the basis that his centre of main interests was in the United Kingdom.\nCentre of main interest\n... [B]efore it could assume jurisdiction to open main insolvency proceedings, the court of a Member State must be satisfied that, at the time that it did so, the debtor's centre of main interests was situated within the territory of that state.\nAddressing the argument that recital (4) to the Regulation reflects the intent that the Regulation should be interpreted to discourage forum shopping by the debtor, the court stated at 276-277:\n... [S]een in context, recital (4) of the Regulation provides little, if any, assistance to the appellant. The need \"to avoid incentives for the parties to transfer assets ... from one Member State to another\" is met by the Community regime (introduced by the Regulation) which gives to the main proceedings \"universal scope\" and the aim of \"encompassing all the debtor's assets\". So no advantage is obtained by moving assets from one territory to another. The need \"to avoid incentives to the parties to ... transfer judicial proceedings from one Member State to another\" \u0097 by which, I think, is meant (at least, primarily) the need to avoid forum shopping by the creditor \u0097 is met by restricting the courts in which insolvency proceedings may be opened. For my part, I do not think that recital (4) is directed to the question in the present case: whether and in what circumstances there could be a change in the debtor's centre of main interests. Recital (4) cannot be read as imposing some restriction on the ability of the debtor to choose where he carries on the activities which fall within the concept \"administration of his interests\"; nor to require the court to give some special meaning to the phrase \"where the debtor conducts the administration of his interests on a regular basis\". The most that can be said, as it seems to me, is that the court should look critically at the facts which are said to give rise to a change in the centre of a debtor's main interests in circumstances where there are grounds for suspicion that the debtor has sought, deliberately, to change his centre of main interests at a time when he is insolvent in order to alter the insolvency rules which will apply to him in respect of existing debts.\nAs to the argument that jurisdiction to open main insolvency proceedings is conferred on the courts of the Member State in which the centre of the debtor's main interests is situated so that a creditor will be able to assess what will be the centre of *274 the debtor's main interests at the time when he extends credit, the court stated:\n[I]t is reading too much into the commentary to conclude that the centre of main interests will not change \u0097 if the underlying facts change \u0097 between the time that the creditor extends credit and the time when a court is asked to open insolvency proceedings. That could not have been in the minds of the commentators.\n49 The point may be illustrated by an example. Suppose a case in which the debtor incurs debts in the territory of State A and then (while those debts remain unpaid) relocates his home and business to the territory of State B. He then incurs further debts in the territory of State B and becomes insolvent. It is of as much importance to the creditors in State B to know \u0097 or to be able to assess \u0097 where the debtor's centre of main interests is situated as it is to the creditors in State A. Seen through the eyes of the creditors in State B the debtor is conducting the administration of his interests on a regular basis in State B. Seen through the eyes of the creditors in State A, at the time when the debts to them were incurred, the debtor was conducting the administration of his interests on a regular basis in State A. But it is a necessary feature of the Community regime established by the Regulation that, at the time when a court is asked to open insolvency proceedings, the debtor can have only one centre of main interests within the Community. There is nothing in the Virgos-Schmit commentary which suggests that that should situated in State A, rather than in State B. In particular, there is nothing in that commentary to suggest that the centre of main interests, once established in State A, remains in State A \u0097 notwithstanding the debtor's relocation to State B \u0097 until, say, all his debts in State A have been paid.\n50 In my view, the commentary does not support any principle of immutability. It does no more than point out the obvious advantages of a scheme under which, so far as possible, a creditor will be able to identify the legal system which will govern his debtor's insolvency at the time he advances credit. But unless the debtor is to be prevented from relocating his home and business \u0097 which he may wish to do for perfectly proper reasons unconnected with any threat of insolvency \u0097 there is a limit to the extent to which those advantages can be guaranteed.\nLord Chadwick summarized his conclusions as follows:\n(1) A debtor's centre of main interests is to be determined at the time that the court is required to decide whether to open insolvency proceedings. In a case where those proceedings are commenced by the presentation of a bankruptcy petition, that time will normally be the hearing of the petition. But, in a case such as the present, where the issue arises in the context of an application for permission to serve the petition out of the jurisdiction, the time at which the centre of the debtor's main interests falls to be determined will be at the hearing of that application. Similar considerations would apply if the court were faced with an application for interim relief in advance of the hearing of the petition.\n(2) The centre of main interests is to be determined in the light of the facts as they are at the relevant time for determination. But those facts include historical facts which have led to the position as it is at the time for determination.\n\n*275 (3) In making its determination, the court must have regard to the need for the centre of main interests to be ascertainable by third parties; in particular, creditors and potential creditors. It is important, therefore, to have regard not only to what the debtor is doing but also to what he would be perceived to be doing by an objective observer. And it is important, also, to have regard to the need, if the centre of main interests is to be ascertainable by third parties, for an element of permanence. The court should be slow to accept that an established centre of main interests has been changed by activities which may turn out to be temporary or transitory.\n(4) There is no principle of immutability. A debtor must be free to choose where he carries on those activities which fall within the concept of \"administration of his interests\". He must be free to relocate his home and his business. And, if he has altered the place at which he conducts the administration of his interests on a regular basis \u0097 by choosing to carry on the relevant activities (in a way which is ascertainable by third parties) at another place \u0097 the court must recognise and give effect to that.\n(5) It is a necessary incident of the debtor's freedom to choose where he carries on those activities which fall within the concept of \"administration of his interests\", that he may choose to do so for a self-serving purpose. In particular, he may choose to do so at time when insolvency threatens. In circumstances where there are grounds for suspicion that a debtor has sought, deliberately, to change his centre of main interests at a time when he is insolvent, or threatened with, insolvency, in order to alter the insolvency rules which will apply to him in respect of existing debts, the court will need to scrutinise the facts which are said to give rise to a change in the centre of main interests with that in mind. The court will need to be satisfied that the change in the place where the activities which fall within the concept of \"administration of his interests\" are carried on which is said to have occurred is a change based on substance and not an illusion; and that that change has the necessary element of permanence.\n56 Applying those principles to the facts in the present case, I find it impossible to say that the judge was not entitled to reach the conclusion that he did \u0097 that the debtor's centre of main interests had moved to Spain. The judge was clearly aware that there were grounds for suspicion that the move was self-serving and might not be genuine. But, unless he were prepared to disbelieve the debtor's evidence as to what he was doing in Spain and why he was living there, the judge was bound to take that evidence into account.\nShierson v. Vlieland-Boddy, [2006] I.L.Pr. 12 (CA (Civ Div) 2005).\nIn Proceedings brought by Staubitz-Schreiber (Case C-1/04), [2006] E.C.R. I-701 [2006] I.L.Pr. 30 (ECJ Grand Chamber 2006) (Reference for a preliminary ruling: Bundesgerichtshof \u0097 Germany (Federal Supreme Court)), the court held that where the debtor had initiated a voluntary insolvency proceeding in Germany, but before the German court had entered an order of bankruptcy, had moved her domicile to Spain with the intention of living and working there, thereby transferring her center of main interests, the German court retained jurisdiction to enter an order of bankruptcy. Addressing concerns about forum shopping, the Opinion of Mr. Advocate General Ruiz-Jarabo Colomer states:\n\n*276 71. If forum shopping is defined as the search by a plaintiff for the international jurisdiction most favourable to his claims, (34) there is no doubt that, in the absence of legal uniformity in the different private international law systems, that phenomenon must be accepted as a natural consequence which is not open to criticism. (35)\n72. Thus the dispute is dealt with at the place which is most suitable for reasons of substance and procedure. Forum shopping is merely the optimisation of procedural possibilities and it results from the existence of more than one available forum, which is in no way unlawful. (36)\n73. However, where forum shopping leads to unjustified inequality between the parties to a dispute with regard to the defence of their respective interests, the practice must be considered and its eradication is a legitimate legislative objective.\n74. The Community legislature took that approach in relation to insolvency and analogous proceedings, because, in the 4 th recital in the preamble to the Regulation the legislature states its intention to avoid incentives for parties to transfer assets or judicial proceedings from one Member State to another, seeking to obtain a more favourable legal position, and includes the term forum shopping in brackets.\n75. That fundamental principle of Regulation No 1346/2000 would be rendered worthless if a debtor were entitled to transfer the centre of his main interests to another Member State between the filing of the request and the judgment opening insolvency proceedings. Such an interpretation is incompatible with the efficient operation of cross border insolvency proceedings which, pursuant to the 2nd recital in the preamble thereto, the Regulation seeks to achieve, because it would oblige creditors to pursue debtors wherever the latter chose to establish themselves with any degree of permanence, thereby depriving the former of the necessary legal certainty.\n76. Moreover, as the Commission states in its written observations, such conduct would mean that the courts in every place where a debtor established himself would be required to determine, of their own motion, whether or not they had jurisdiction, (37) which would be incompatible with the principle of the sound administration of justice.\n77. In any event, on the facts of the main proceedings this is not a case of forum shopping, since Ms Staubitz-Schreiber herself argues for the jurisdiction of the court with which she filed the request for the opening of insolvency proceedings. The reason for her position is a special feature of German insolvency law known as Restschuldbefreiung, pursuant to which a debtor receives a general discharge from any remaining debts which have not been paid with the return from the realisation of assets, (38) a rule which is unknown in the legal systems of the other Member States. (39)\n[2006] ECR 1-701. The ruling of the ECJ states:\nArticle 3(1) of EC Regulation 1346/2000 on insolvency proceedings must be interpreted as meaning that the court of the Member State within the territory of which the centre of the debtor's main interests is situated at the time when the debtor lodges the request to open insolvency proceedings retains jurisdiction to open those proceedings if the debtor moves the centre of his main interests to the territory of another Member State after lodging the request but before the proceedings are opened.\n*277 Staubitz-Schreiber (C1/04), [2006] E.C.R. 1-701, [2006] I.L.Pr. 30 (ECJ (Grand Chamber) 2006).\nIn Cross Construction Sussex Ltd v. Tseliki, [2006] EWHC 1056 (High Court of Justice Chancery Division 2006), the court dismissed for lack of jurisdiction, a creditor's bankruptcy petition brought under EU Regulation 1346/2000 against Tseliki. The opinion of Mr. Justice Lewison states:\n1 This is an appeal from a decision of District Judge Gamber of 23 December 2005. The district judge dismissed a petition for the bankruptcy of James Tseliki on the grounds that it had not been established to his satisfaction that the court had jurisdiction to entertain the petition. The question arises under Regulation (EC) 1346/2000 which deals with jurisdiction relating to the opening of insolvency proceedings.\n. . . .\n5 Although it may seem obvious it is perhaps worth saying that the concept of a centre of main interests means that there can only be one such centre. There may be many centres of interests but only one of them can be the main centre. The petition arose out of a debt for which judgment was given in the Technology and Construction Court in this country. The underlying debt, in fact, arose out of an arbitration award which, as I understand it, was consequent upon work which had been carried out by the petitioning creditor. That work was carried out on a property in England.\n6 The debtor's evidence about his own position was given in his first witness statement. He said that he was a Greek citizen and exhibited a copy of his passport. He said in paragraph 3 of his witness statement:,\n\"I am not a resident in this country and have not been for at least 15 years. I consider that my domicile of choice, in so far as I have changed my domicile of origin from Greece, is France as I am habitually resident at Chateau de Saint Germain Beaupre 23160, France.\"\nIn paragraph 4 he said:\n\"I am an international businessman trading through the medium of limited companies in many jurisdictions around the world. However, this action is brought against me in my personal capacity. I have never traded in my personal capacity in any jurisdiction and particularly not in the United Kingdom.\"\nIn paragraph 6 he said:\n\"I am ordinarily resident at my address in France and spend approximately six months of the year there. I have lived there permanently for the last six years. As I am a Greek citizen I spend considerable periods of time visiting my 80 year old mother who is the matriarch and head of the family. She is resident in Greece. I visit my adult children who are resident in the United Kingdom and may visit them three or four times a year. However, I am not resident in the United Kingdom and have never been found to be resident by the tax authorities here. I spend, at the very most, 15 per cent to 20 per cent of the year in this country. When I am here I stay with friends, family or in hotels but usually with my children.\"\nIn paragraph 7 he said:\n\"As far as my economic interests are concerned, as I derive income from family discretionary trusts administered by my mother in Greece, this is my domicile for the purposes of payment tax. However, my emotional ties and principal residence is in France. Although I travel for work purposes all over the world, my wife resides and remains in France during my periods of absence.\" *278 7 Mr Tudway, who appears on behalf of the petitioning creditor, submits that the district judge was, in effect, wrong to accept that evidence and that the district judge should have paid far more attention to the objective facts. The objective facts are contained in a number of exhibits to which I have been taken. By way of preliminary Mr Tudway submits that the debtor's witness statement, not just the one from which I have quoted, but subsequent witness statements which he made, are evasive and cagey and notably short on documentary evidence to corroborate the debtor's assertions about his place of residence and business affairs. I think that there is force in Mr Tudway's criticism.\n8 What then are the objective facts? The pointers in favour of a connection, to use a neutral word, between the debtor and the jurisdiction in England and Wales, are as follows:\n(1) There is a personal telephone number which was revealed by a search of a British Telecom website. The personal telephone number is attributed to the debtor at an address in Ripe in Sussex;\n(2) The passport, which the debtor exhibited to his witness statement, was in fact issued by the Greek Consulate in London;\n(3) The debtor is registered as the owner of an aeroplane. The registration details with the Civil Aviation Authority reveal an address in Brighton as being his address;\n(4) There is a website relating to a club of similar aircraft owners which lists him as living in Brighton;\n(5) There is a letter written in 1996 by a company called Kittyhawk Farms Limited, to which I will return, which gives an address in Brighton as the address of that company.\n9 Pointers to the lack of a connection between the debtor personally and the jurisdiction in England and Wales also appear from the objective facts: (1) The debtor is a Greek national; (2) It is accepted that he has a home in France; (3) The properties in and around Brighton which are relied upon as establishing the connection between the debtor and this jurisdiction are, or were at the material time, held, according to the Land Registry, not by the debtor personally but by a company called Kittyhawk Estates Limited of which Kittyhawk Farms Limited appears to have been a subsidiary. Kittyhawk Estates Limited is not a company registered within the jurisdiction but is a company registered in the Isle of Man.\n10 In connection with the proceedings that led to the making of the order for summary judgment, thus creating the judgment debt, the debtor's solicitors came off the record and said, as they did so, that any further correspondence should be sent to the debtor at his address in France.\n11 Mr Tudway points to the lack of documentary evidence to corroborate what the debtor has said. He says that it would have been easy for the debtor to have exhibited, and that he should have exhibited, documents relating to motor insurance, home insurance, utility bills, credit card statements, evidence of his directorships, business dealings and so on. I think there is force in that criticism and that the evidence which the debtor produced does have, what I might call, a defensive air to it.\n12 The district judge went through the various exhibits though without analysing them in great detail. He said in his judgment that he did not find the debtor's evidence to be inherently incredible. Having gone through the exhibits he then concluded as follows:\n\n*279 \"I cannot see, from what has been adduced by cross, that there is any evidence that Tseliki was acting personally. I am satisfied he was conducting the business of a limited company as a director and not in his own right and thus it cannot be said that he was conducting the administration of his interests. In my view it would not have been apparent to an objective observer that he was acting in anything other than on behalf of a corporate entity.\"\n13 Mr Tudway criticises the district judge for having failed to distinguish between the carrying on of a business by a company and the discharge by a director of that company of his duties as director. The latter, he submits, can amount to the administration by the director personally of his own interests and as such can give rise to the location of a centre of main interests. In principle it seems to me that Mr Tudway is right in that submission but where, as here, the company is registered in the Isle of Man, one would expect that the discharge of the director's duties, in his capacity as director, would be in the Isle of Man or at least where the management of the company, as a corporate entity, took place. There was, in fact, no evidence about that and no exploration of where Mr Tseliki might have discharged his duties as director. I do not consider that the giving of instructions, on behalf of the company, to others to undertake, for example development projects, would be sufficient to establish that Mr Tseliki, in discharging his duties as director, was doing so in the place where the instructions were given. Moreover, it seems to me that it is not enough simply to establish a connection between the debtor and this jurisdiction. That, as Ms Higgins for the debtor submits, may establish a centre of interests but not necessarily a main one. 14 The task for the court is to balance the evidence on both sides giving appropriate weight to such evidence as may be adduced by the debtor himself.... It follows, in my judgment, that this appeal must be dismissed.\nCross Construction Sussex Ltd v. Tseliki [2006] EWHC 1056 (High Court of Justice Chancery Division 2006).\nAlthough an individual may be considered to have more than one habitual residence under national law, the ECJ has consistently interpreted EU law to provide that an individual cannot be habitually resident in more than one country at the same time. Jane Elizabeth Marinos v. Nikolaos Lykourgos Marinos, [2007] EWHC 2047 (High Court of Justice Family Division 2007). An individual may, however, be habitually resident in one country at the same time as one is also resident (though not habitually resident) in another. Id. at 41. The Marinos court stated:\n81 The question to be determined is the location of the habitual centre of the wife's interests. The difficulty is presented by the fact that whereas the centre of many of her interests was indubitably this country, the centre of at least some of her interests was equally obviously Greece. On the one hand the centre of her employment and education interests was plainly in this country, the land of her birth, the country to which she retained the emotional commitment which she never had to Greece, and the country with which she retained all the other links identified by Mr Castle. As against that, the centre of her emotional, personal and family interests was equally plainly Greece, the country where her children lived \u0097 the children who not surprisingly were, in her own words, \"the centre of my life.\"\n\n*280 82 At the end of the day all these various factors, some pointing in one direction, some in the other, have to be balanced and evaluated with a view to identifying the habitual centre of the wife's interests. One cannot, as it seems to me, say a priori that any one factor is of more or less intrinsic weight than another. How the balance comes to be struck must depend upon all the factors in issue in the particular case, the task for the judge being to attribute to each of those factors the weight which in his estimation attaches to it in the particular circumstances of the particular case. In one case the factor of employment may weigh more heavily than in another superficially similar case. In another case the location of the matrimonial home may carry particular weight.\n83 Acknowledging that the factors which are in play in this case point very sharply to starkly' opposing conclusions, and recognising that they are, when all is said and done, very evenly balanced, I am nonetheless persuaded that the overall balance points to this country as being the habitual centre of the wife's interests. Evaluating all those interests together and in the round, the centre of gravity is located in this country and not in Greece. If the wife was a mother she was also a career woman, and if her children were in Greece both her current career and her planned future career were in this country.\n84 I find therefore that the wife was both resident and habitually resident in this country at all material times from (say) September 2004 onwards. On this basis she was entitled to petition in this country when she issued her petition on 1 February 2007.\n85 Even if I am wrong in this, there is, in my judgment, another basis upon which the wife is entitled to succeed. She was, for the reasons I have already given, resident in this country at all times from September 2004 onwards, in particular, resident in this country for at least six months before she issued her petition on 1 February 2007. But she was also, in my judgment, habitually resident in this country on 1 February 2007 even if not before then.\n86 It is important to remember the circumstances in which the wife returned to this country on 31 January 2007. She had severed her links with Greece. She was returning to this country with her children, intending to make it her, and their, permanent home. She had arranged schools for them and taken steps to obtain early vacant possession of the Chiswick property. Moreover, and as Sumner J found, she and the children came with the husband's consent, not merely consent to them coming over here but consent to them staying here. I can see no reason why, in these circumstances, she did not immediately acquire a habitual residence in this country upon her return here on 31 January 2007 even if, immediately prior to that, she was in fact habitually resident in Greece.\n87 It is of course trite learning under our domestic law that although habitual residence can be lost in a day it cannot be gained in a day. There must be an appreciable period of residence before it becomes habitual, though that period need not be very long. It can certainly be measured in weeks rather than in months and in an appropriate case it can probably be measured in nothing more than days. But here, of course, we are concerned with a period of less than 24 hours, for the wife returned on 31 January 2007 and issued her petition the following day.\n88 However, ... the approach is quite different as a matter of ECJ law. As *281... so far as concerns the Regulation one can in appropriate circumstances establish habitual residence very quickly, in my judgment very quickly indeed. As the Court said in Swaddling v. Adjudication Officer (Case C-90/97) [1999] ECR 1-01075, [1999] 2 FLR 184, at para [30], the length of residence is not an intrinsic element of the concept of habitual residence in this context.\n89 In a case such as this \u0097 where someone, as in the case of the wife here, is undertaking a planned, purposeful and permanent relocation from one country to another \u0097 there is nothing in Community law to prevent the acquisition of a new habitual residence contemporaneously or virtually contemporaneously with the loss of one's previous habitual residence. In a situation such as that in which the wife found herself on 31 January 2007 there is nothing in Community law to prevent the conclusion that just as (on this hypothesis) she lost her habitual residence in Greece as the aircraft in which she and the children were travelling took off from Greece, in the same way she acquired a new habitual residence in this country as the aircraft touched down at Heathrow.\n90 In my judgment, the wife was habitually resident in this country for the purposes of the Regulation on 1 February 2007 even if she had not been prior to the day before.\nJane Elizabeth Marinos v. Nikolaos Lykourgos Marinos, [2007] EWHC 2047 (High Court of Justice Family Division 2007).\n\nC. Objective Factors Considered by U.S. Courts\nThe factors by which European courts determine the location of an individual's center of interests are similar to the factors considered by U.S. courts in determining the location of an individual's domicile. Residence in fact, coupled with the purpose to make the place of residence one's home, are the essential elements of domicile. State of Texas v. State of Florida, 306 U.S. 398, 59 S.Ct. 563, 83 L.Ed. 817 (1939). \"Domicile\" is established by physical presence in a place in connection with a certain state of mind concerning one's intent to remain there. Id. One acquires a \"domicile of origin\" at birth, and that domicile continues until a new one (a \"domicile of choice\") is acquired. Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 109 S.Ct. 1597, 104 L.Ed.2d 29 (1989). \"An individual is domiciled in the place where he has his true, fixed, and permanent home and principal establishment, and to which he has the intention of returning whenever he is absent therefrom.\" Deep Marine. Technology, Inc. v. Conmaco/Rector, L.P., 515 F.Supp.2d 760 (S.D.Tx.2007) (citing Mas v. Perry, 489 F.2d 1396, 1399 (5th Cir.1974)). To defeat the presumption of continuing domicile and establish a new domicile that applies whenever a person relocates, a person must demonstrate residence in a new state, and an intention to remain in that state indefinitely. Id. (citing Acridge v. Evangelical Lutheran Good Samaritan Soc'y, 334 F.3d 444, 448 (5th Cir.2003)).\nIn Coury v. Prot, 85 F.3d 244 (5th Cir. 1996), the Fifth Circuit considered various factors in evaluating the location of a person's domicile:\nA change in domicile typically requires only the concurrence of: (1) physical presence at the new location and (2) an intention to remain there indefinitely; or, as some courts articulate it, the absence of any intention to go elsewhere. Thus, a person who has the clear intent to change domicile does not accomplish the change until he is physically present in the new location with that intent. On the other hand, mere presence in a new location does not effect a change of domicile; *282 it must be accompanied with the requisite intent. In most cases, the difficult issue is not presence but whether the intent to change domicile can be shown.\nA person's domicile persists until a new one is acquired or it is clearly abandoned. There is a presumption in favor of the continuing domicile which requires the party seeking to show a change in domicile to come forward with enough evidence to that effect to withstand a directed verdict. While some opinions seem to imply that the burden of persuasion rests with the party attempting to show a change of domicile, this is an overstatement. The proper rule is that the party attempting to show a change assumes the burden of going forward on that issue. The ultimate burden on the issue of jurisdiction rests with the plaintiff or the party invoking federal jurisdiction.\nIn determining a litigant's domicile, the court must address a variety of factors. No single factor is determinative. The court should look to all evidence shedding light on the litigant's intention to establish domicile. The factors may include the places where the litigant exercises civil and political rights, pays taxes, owns real and personal property, has driver's and other licenses, maintains bank accounts, belongs to clubs and churches, has places of business or employment, and maintains a home for his family. A litigant's statement of intent is relevant to the determination of domicile, but it is entitled to little weight if it conflicts with the objective facts.\nMost courts regard domicile as presenting a mixed question of law and fact. Nevertheless, in practice, the district court's determination of domicile is reviewed on appeal as a question of fact; it will be upheld unless \"clearly erroneous.\"\nCoury v. Prot, 85 F.3d 244, 250-251 (5th Cir.1996). The 5th Circuit agreed with the lower court's determination that Prot was domiciled in Texas when the action was initially filed and when he removed it to federal court. The district court found that Prot established a domicile in Texas in 1987, and that although he had physically moved himself and his family to France in 1991, to avoid transatlantic commuting, the evidence failed to show an essential requisite of a change in domicile, that is, that Prot had formed an intention in 1991 or 1992, to remain in France indefinitely. Id. at 252. In view of Profs repeated statements that he and his wife did not intend to stay in France indefinitely and that they always intended to return to Texas, the court concluded that the district court's findings were not clearly erroneous. Id.\n\nD. Objective Factors Considered by Israeli Courts\nThe factors considered by European courts in determining an individual's centre of interests and by U.S. courts in determining the location of an individual's domicile are similar to the factors considered by Israeli courts to decide the location of an individual's center of life. Under Israeli tax law, an individual will be considered an Israeli resident if the center of his life is located in Israel. George A. Rosenberg, Israeli Tax Reform, J. Int'l Tax'n 31, 2003 WL 1871011 *31 (April 2003) (citing the Law to Amend the Income Tax Ordinance (No. 132)-2002.) The center-of-life test takes into consideration the individual's financial, economic, and social ties including: the location of his permanent home, the place of residence of the individual and his family, the location of his regular activities, jobs, assets, investments, clubs, unions, and institutions of which he is a member. Id.\n*283 The National Insurance Institute of Israel, which administers social security benefits, considers a resident of Israel is a person whose life is centered in Israel.[4] The criteria by which the National Insurance Institute of Israel determines residence include \"permanent place of residence, place at which the family is staying, place of the children's education, main place of work, place of learning.\"[5]\nThe concepts of residency and of an individual's center of life under Israeli law are explained in Israel Doron and Tal Golan, Aging, Globalization, and the Legal Construction of \"Residence\": the Case of Old-age Pensions in Israel, 15 Elder L.J. 1 (2007). The article states:\nIn the National Insurance Law, and indeed in Israeli legislation as a whole, there is no definition of the term \"resident.\" Accordingly, the burden of imbuing the concept with meaning has been borne mainly by case law, through numerous rulings passed down over the years. The basic definition developed over the years has been that a person's residence is the place that constitutes that person's \"center of life.\" The test of the center of life primarily includes an objective dimension (the sum total of objective data actually indicating the place to which the individual is most closely attached) with limited weight given to the subjective dimension (the place to which the individual personally feels most strongly attached).\n15 Elder L.J. 1 at 16 (citing CA 8313/02 Halamish v. Nat'l Ins. Inst. [2002] IsrSC 44(4) 432). Further, quoting the National Labor Court in Nat'l Labor Court Rulings, 1987, 14-0, Yalouz v. Nat'l Ins. Inst; 32(2), 208, the article states:\nDetermination of the question as to whether a person is a resident of Israel \"will come from the totality of circumstances... that, in the final reckoning, will establish the actual affinity to Israel.\"... The determination of the \"affinity,\" the place \"where he lives,\" and which \"is his home\" is effected in accordance with the factual infrastructure and the evaluation of the facts, with reference to the totality of circumstances.\n15 Elder L.J. 1 at 17 (citing Nat'l Labor Court Rulings, 1987, 14-0, Yalouz v. Nat'l Ins. Inst; 32(2), 208.) The article continues:\nIt appears that there is a considerable degree of discretion in determining when a person is a resident, as courts are able to take into account numerous variables unique to each specific case. The tests employed by the courts look at numerous economic, familial, or even cultural factors: where the citizen purchased his apartment, where he works (both in terms of statutory status \u0097 where he obtained his work permit \u0097 and in terms of his actual work), whether the citizen has any general economic connections to Israel and, if so, what the nature of this connection is.\n15 Elder L.J. 1 at 17.\nFactors Israeli courts consider as evidence that a person's center of life is outside Israel include: (1) the possession of property abroad or the absence of property in Israel (2) possession of United States passports and \"green cards\" indicating that one's center of life is in the United States, (3) possession of a permit for U.S. residency and employment, and (4) the location of one's family abroad. 15 Elder *284 L.J. 1, 17-23. These factors indicate severed connections with Israel. Id. Conversely, neither ownership of an apartment in Israel, nor the existence of an active bank account, constitutes sufficient evidence of an individual's connection with Israel to preserve an individual's affinity to the country. 15 Elder L.J. 1 at 20. Furthermore, \"the Entry to Israel Regulations... establish that, for the purpose of examining the validity of an entry visa to Israel and a temporary residency permit, a person shall be considered to have settled in a country other than Israel if he or she has spent a period of seven years outside Israel and if they have received a permanent residency permit or citizenship in another country.\" 15 Elder L.J. 1 at 17 (citing Entry to Israel Regulations, XXXX-XXXX, KT 3201.)\nIn Harosh, Cr. C. (B.S.) 2484/99, the Israeli court determined that \"residency\" for purposes of application of the Extradition Act (Amendment No. 6) of 1999, is determined by reference to past and present, factual and emotional, connections, including \"subjective ones that constitute, in their accretion, the centrality of a person's life.\" Abraham Abramovsky and Jonathan I. Edelstein, The Post-Sheinbein Israeli Extradition Law: Has it Solved the Extradition Problems Between Israel and the United States or Has it Merely Shifted the Battleground?, 35 Vand. J. Transnat'l L. 1, 45-46 (2002). While intent is not controlling as to whether a person's \"center of life\" is in Israel, intent may explain or illuminate the objective facts relevant to a determination of the center of a person's life. 35 Vand. J. Transnat'l L. 1 at 47. Thus, the fact that Harosh had fled to Israel in order to escape U.S. justice might raise doubts about his real intentions and may \"raise the suspicion that the stay in Israel is a temporary one, until the storm blows over and not later.\" 35 Vand. J. Transnat'l L. 1 at 48, n. 348 (quoting Cr. C. (B.S.) 2484/99, Attorney General v. Harosh, slip op. at 50-51.) The Harosh court found that, when an Israeli citizen lives abroad, his center of life gradually shifts away from Israel to the country where he resides. 35 Vand. J. Transnat'l L. 1 at 49 (citing Cr. C. (B.S.) 2484/99; Attorney General v. Harosh, slip op. at 54-55.) At a certain point, his status changes from a resident of Israel to a resident of the foreign country, and, if this point is passed, he must gradually re-establish his residency upon return to Israel. Id. The court determined that Harosh's prolonged absence from Israel, coupled with the fact that he had married a U.S. citizen and obtained a green card in the United States, meant that his center of life had shifted to the United States between 1991 and 1998. 35 Vand. J. Transnat'l L. 1 at 49 (citing Cr. C. (B.S.) 2484/99, Attorney General v. Harosh, slip op. at 58.) The court found that Harosh had not shifted his center of life back to Israel in the eleven months he had resided in Israel prior to the extradition request. 35 Vand. J. Transnat'l L. 1 at 49 (citing Cr. C. (B.S.) 2484/99, Attorney General v. Harosh, slip op. at 59-60, 63.) Therefore, the court concluded, although \"at present there are, in fact, ties connecting the respondent to Israel, these are insufficient to bestow upon the respondent the status of an Israeli resident as defined in the Extradition Law.\" 35 Vand. J. Transnat'l L. 1 at 49 (citing Cr. C. (B.S.) 2484/99, Attorney General v. Harosh, slip op. at 63.) The Israeli Supreme Court concurred in the lower court's reliance on the \"center of life\" test to determine residency, agreeing that Harosh's center of life had moved to the United States during his absence from Israel and that he had not re-established residency during the short period of his return. 35 Vand. J. Transnat'l L. 1 at 52 (citing Cr. A. 3025/00, Harosh v. State of Israel, slip *285 op. at 23-29 (Isr.2000)). Further, while Harosh's flight from justice did not preclude a finding that he was a resident of Israel, Harosh had only begun \"a process of integration into the life of Israel,\" that \"ha[d] not yet been completed\" at the time his extradition was requested. 35 Vand. J. Transnat'l L. 1 at 53 (citing Cr. A. 3025/00 at 27, 29.)\nIn H.C. 129/63, Matalon v. Regional Rabbinical Court of Tel Aviv-Yafo, 17(3) P.D. 1640, 1644 (Isr.1963), the Israeli Supreme Court stated, \"[e]ven an improper motive is proper as far as decision on [the] question [of residency] is concerned, but only if [the petitioner's] true and sincere desire is to remain in the new country, and not merely to live and reside in it until the storm has passed.\" 35 Vand. J. Transnat'l L. 1 at 47, n. 350 (quoting Matalon, 17(3) P.D. at 1644.)\nAlthough the Israeli Supreme Court in C.A. 657/76, Harashut Hamusmehet Letzora hok Nehey Redifot Hanazim v. Hasdai, 32(1) P.D. 778, 781 (Isr.1978), recognized that a person's intention to return to Israel may remain with him throughout his stay abroad, the court held in H.C. 282/88, Awad v. Minister of the Interior, 42(2) P.D. 424 (Isr.1988), that Awad's intention, during his absence from Israel always to return to Israel was not controlling for purposes of determining his residency in connection with his application to renew his Israeli identity card. 35 Vand. J. Transnat'l L. 1 at 46-47. Awad left Israel in 1970 to study in the United States, obtained a U.S. green card and, in 1978, obtained U.S. citizenship. 35 Vand. J. Transnat'l L. 1 at 46-47. Awad had visited Israel only three or four times between 1970 and 1983 (even though he made more frequent trips to Israel during 1984 to 1988 as he became active in the movement against the Israeli occupation of the West Bank and Gaza). 35 Vand. J. Transnat'l L. 1 at 47. The Israeli Supreme Court held regarding Awad:\nIt may be that in [Awad's] heart of hearts he sought to return to Israel. But the decisive criterion is the reality as it actually occurred. Based on this criterion, at a certain stage the petitioner moved his center of life to the United States, and he may no longer be viewed as one who resides permanently in Israel.\n35 Vand. J. Transnat'l L. 1 at 47 (citing H.C. 282/88, Awad v. Minister of the Interior, 42(2) P.D. 424, 434 (Isr.1988)). Likewise, in C.A. 4127/95, Zelkind v. Beit-Zayit, 52(2) P.D. 306, 319 (Kr.1998), \"it can be said that the duration of absence from the fixed place of domicile can serve as a significant indication ... and can point to the severance of connection with the fixed abode.\" 35 Vand. J. Transnat'l L. 1 at 47 (citing C.A. 4127/95, Zelkind v. Beit-Zayit, 52(2) P.D. 306, 319 (Kr.1998)).\n\nIV. Review of Evidence, Consideration of Factors, and Further Findings of Fact\n\nA. Lavie Negotiates Settlement with Ran on Behalf of Bank Hapoalim\nPrior to 1997, Yuval Ran was CEO of a publicly traded Israeli company known as Israel Credit Lines Supplementary Financial Services, Ltd.(\"ICL\"). Zuriel Lavie testified that in the first quarter of 1997, Bank Hapoalim approached Lavie to work with the bank to negotiate with Ran regarding his personal debts with Bank Hapoalim. According to Lavie, the bank wanted to find a way to settle with Ran. Lavie had settlement meetings with Ran's attorney and, Lavie recalls, at least two meetings with Ran and the bank together, \"to see how we can settle and how we can resolve the debt.\" Transcript pp. 17-18. Lavie testified that in April 1997, either Ran or his attorneys told Lavie that Ran *286 was leaving Israel for a short business trip and would come back, but Ran never returned. Transcript p. 18.\n\nB. Ran Leaves Israel and Transfers the Center of His Life\nIn April 1997, Ran left Israel and has never returned. After Ran's departure from Israel, Bank Hapoalim Ltd, in June 1997, sought an ex parte temporary attachment order over Ran's assets. On July 10, 1997, the court appointed Zuriel Lavie as temporary receiver over Ran's assets.\nAccording to Lavie's report to the Israeli court, Ran's departure from Israel and relocation to the United States, was so genuine and permanent that legal consequences attached under Israeli law. Ran's departure from Israel in April 1997, according to Lavie, constitutes an \"act of bankruptcy\" and is a permanent transfer of Ran's center of life away from Israel. Lavie Ex.1 at \u00b6\u00b6 21.5, 26. Lavie states, \"... Lavie was appointed temporary receiver over [Ran's] assets (CA 2448/97) after [Ran] committed an act of bankruptcy and during April 1997 left Israel with his family, leaving behind him huge debts on a scale of tens of millions of new Israeli shekels.\" Lavie Ex. 1 at \u00b6 26. \"In addition, [Ran's] decision to permanently transfer the center of his life abroad only reinforces the Trustee's argument that the Debtor committed an act of bankruptcy and does not intend to return to Israel.\" Lavie Ex. 1 at \u00b6 21.5. Lavie's report states that evidence that Ran's departure from Israel was done with no intention of returning is established by: (1) ICL's decision at the end of May 1997, to appoint a co-CEO for the company in addition to Ran, as that \"delegation of the CEO's powers to another person clearly shows\" that Ran \"had abandoned the country for an unlimited period of time;\" (2) that \"on 4th June 1997 Zvika Dgani, who served as director of [Navigator Investments Ltd.] gave notice of his resignation from the Company's board of directors\" for the reason, \"In light of recent developments, Mr. Yuval Ran's stay abroad and the lack of certainty as to if and when he will return, I do not consider it possible to continue serving as director of the company;\" (3) \"the change of personnel on the board of directors of Passport Ltd and Oil Exploration Ltd,\" Ran's place on those boards of directors \"being taken by Mr. Eyal Gibor, CPA, after [Ran] resigned on 5th May 1997;\" and (4) \"the meeting that took place between [Ran] and his business partners in Rome, in May 1997,\" in which \"[i]nstead of [Ran] attending the planned meeting in Israel-where all the parties were, all the parties had to make the effort to go to Rome, where they met with [Ran].\" Lavie Ex. 1, \u00b6\u00b6 21.1., 21.2, 21.3, and 21.4.\nThe Courts notes that the \"act of bankruptcy\" to which Lavie attaches significance is not Ran's default on millions in NIS debt, but is, instead, Ran's leaving Israel with no intention of returning while he owes creditors there. See Israel Treiman, Acts of Bankruptcy: A Medieval Concept in Modern Bankruptcy Law, 52 Harv. L.Rev. 189, 192-197 (1938-1939). The Tremain article explains the origins of the phrase, \"an act of bankruptcy\":\nAs one inspects the numerous laws dealing with defaulting debtors in Continental countries during the medieval period: the remarkable frequency with which they speak of such debtors as \"fugitives\" is striking. Indeed, in many localities the term fugitivi, apparently older than bancarotti, seems to have been used synonymously with the latter. Apparently it was the regular custom on the Continent for a failing debtor to flee from his creditors. The explanation probably lies in two facts: first, the notorious harshness of medieval Continental laws in their treatment of all *287 insolvent debtors, regardless of their honesty; second, the ease with which it must have been possible, considering the lack of communication facilities as well as the political barriers separating the mercantile communities of that time, for a debtor who had fled to elude pursuit by his creditors. Voluntary flight in those days must have offered the same hope of rehabilitation which voluntary bankruptcy provides at the present time. In any event, it seems that by the middle of the sixteenth century, an act either of flight from the country or, at least, withdrawal from the market place (foro cedere) was regarded as an essential element in the legal definition of bankruptcy. Having made that act voluntarily, the debtor was naturally said to have made his bankruptcy. In short, conduct, not financial embarrassment, was the gist of the offense.\nThus when the English legislator toward the middle of the sixteenth century turned his attention to a bankruptcy law, he had for his models a multitude of contemporary Continental laws in which he observed a striking unanimity in the use of the phrase \"persons who make bankrupt\" \u0097 bancham ruptam facientes, qui font banqueroute. How directly these Continental laws influenced the shaping of the first English statute on bankruptcy may be seen from the fact that a few months before its passage a bill was introduced in the House of Lords against \"Merchants that Run Away With Other Men's Goods,\" a title that is practically a literal translation of a phrase appearing in the contemporary Spanish Code on bankruptcy \u0097 se ausentan con caudelas agenos.\n\n. . . .\nEnglish bankruptcy law thus was from its inception grounded in the notion that the status of bankruptcy commenced with some positive and intentional act on the part of the debtor, and that, such an act having been committed, the solvency of the debtor was unimportant. As in its Continental prototype, attention was riveted solely upon the debtor's conduct.\n. . . .\nThe debtor's conduct, not his financial condition, is still the technical basis of his bankruptcy.\nIsrael Treiman, Acts of Bankruptcy: A Medieval Concept in Modern Bankruptcy Law, 52 Harv. L.Rev. 189, 192-197(1938-1939).\nRan's transfer of his center of life from Israel to the U.S. served as the basis for attachment of his Israeli assets and appointment of Lavie. In addition, as one who had transferred his center of life away from the State of Israel, Ran would no longer be entitled to Israeli social security benefits, such as unemployment and old age compensation payments, to treatment as a resident under Israeli tax law, and as a non-resident, would be subject to denial of a return entry visa. See Abraham Abramovsky and Jonathan I. Edelstein, The Post-Sheinbein Israeli Extradition Law: Has it Solved the Extradition Problems Between Israel and the United States or Has it Merely Shifted the Battleground?, 35 Vand. J. Transnat'l L. 1, 45-46 (2002) (and the cases cited therein); George A. Rosenberg, Israeli Tax Reform, J. Int'l Tax'n 31, 2003 WL 1871011 *31 (April 2003) (citing the Law to Amend the Income Tax Ordinance (No. 132) 2002); Israel Doron and Tal Golan, Aging, Globalization, and the Legal Construction of \"Residence\": the Case of Old-age Pensions in Israel, 15 Elder L.J. 1 (2007) (and the cases cited therein). See also National Insurance Institute of Israel, Nil English Home Page > Definitions and Terms, Definitions Applicable to Insurance Contributions, Resident of Israel, http://www.btl. *288 gov.il/NR/exeres/FE8AAEC6-6D04-4956-8C5F-835B2D63FF39.\nWhile maintaining the position before the Israeli court that Ran's relocation to the United States is permanent for purposes of Israeli bankruptcy law, Lavie contends that Ran's relocation should not be considered significant or permanent for purposes of U.S. bankruptcy law. Despite the legal consequences under Israeli law resulting from Ran's transfer of the center of his life from Israel to the United States, Lavie contends that Ran's relocation does not equate to a transfer to the U.S. of Ran's center of main interests because when Ran left Israel: (1) he owed debts to Israeli creditors, (2) he left as a \"fugitive\" to escape the reach of Israeli justice, (3) Ran continued to manage ICL from the United States, (4) Ran is guilty of forum shopping, (5) Ran's creditors chose Israel as their favored jurisdiction in which to initiate bankruptcy proceedings against Ran, and (6) the Court should defer to the jurisdiction of the Israeli bankruptcy court under principles of comity.\n\nC. Lavie's Actions As Temporary Receiver\nThe Court notes that throughout the trial, Lavie and his counsel used the terms \"receiver,\" \"trustee,\" and \"liquidator\" interchangeably without distinction as to their powers and duties under Israeli law. See eg. Transcript p. 68, \"And I don't know if I'm using the right terms \"liquidator,\" \"trustee\" and they seem to use them interchangeably ...\" It is apparent to the Court from Lavie's testimony, that Lavie understood his role as receiver to be to continue to act on behalf of Bank Hapoalim to collect its debt from Ran, rather than to act on behalf of all creditors to collect and preserve Ran's assets for the benefit of all.\nLavie purports to have aggressively investigated Ran, his assets, his business associates, and his family members while collecting and liquidating assets during his appointment as temporary receiver acting on behalf of Bank Hapoalim. Lavie's report to the Israeli court on the status of Ran's bankruptcy as of January 2007, states:\n29. Upon his appointment the temporary receiver began acting intensively in order to trace assets owned by the debtor, approaching every relevant entity and demanding that they give him assets and rights of the debtor. Thus, inter alia, the temporary receiver turned to banks, insurance companies, the stock exchange, the various companies in which the debtor held shares and other entities and bodies directly and indirectly related to the debtor and his business.\n30. In order to expand the scope of the temporary receiver's acts to trace assets of the debtor and for the purpose of streamlining the temporary receivership proceedings, the honorable court allowed the temporary receiver to summon for investigation any relevant entity in respect of which the Official Receiver had reasonable basis to assume had information and/or documents and/or anything else connected with the debtor's assets and/or was able to otherwise assist the temporary receiver in tracing assets of the debtor (ca 2791/97).\n31. Indeed, in the framework of the investigative powers vested in him by the honorable court, the temporary receiver summoned for investigation various entities close to the debtor whom the official receiver believed might have information regarding the debtor's assets. Thus, for example, summoned for investigation were the debtor's brother, Yoav Ran, his business partners, Messrs Nathan Torner and Abraham Goldreich, Ms. Dina Claude, who served as Credit *289 Lines' comptroller and Mr. Eyal Gibor, who served as co-ceo of Credit Lines together with the debtor.\n32. In consequence of the action taken by the temporary receiver in order to trace assets of the debtor, he was able to seize the following assets:\n32.1 21,135 shares of Agri-Invest Ltd, a company whose shares are traded on the Tel Aviv stock exchange, the market value of which, correct as at 22nd February 2000, was NIS 316,602 (NIS 14.98 per unit) (hereinafter referred to as \"the shares.\"). The consideration was deposited in the trust account.\n32.2 a hen over the rights in the debtor's residence at 9 Barazani Street, Tel Aviv, known as block 6631, parcel 208/62 (hereinafter referred to as \"the apartment\").\nLavie Ex. 1.\n\nD. More Settlement Negotiations\nLavie testified that after his appointment as receiver, or, in his words, as \"temporary trustee,\" he did not hear from Ran, but continued to negotiate with Ran's attorney until the middle of 1998, in attempts to see if Ran \"can finish and settle his debt to the bank.\" Transcript pp.27-28. Ran's attorney had offered \"some settlement ideas and we had to check them. There were negotiations.\" Transcript p. 28.\nOn August 31, 1998, Bank Hapoalim took judgment against Ran, in the amount of NIS 11,750,531. According to Lavie, on November 18, 1998, the court granted a permanent receivership order against Ran and appointed Lavie as special administrator on behalf of the Official Receiver, who served as the permanent receiver. Lavie Ex. 1 at \u00b6 27.\n\nE. Bankruptcy Proceedings Are Filed Against ICL\nMore than a year after Ran's re-location to the United States, on July 12, 1998, Bank Leumi Le-Israel Ltd instituted bankruptcy proceedings against ICL, bankruptcy case no. 1218/98. A year after initiation of that proceeding, in August 1999, the Israeli court before whom the corporate bankruptcy is pending, appointed Yitzhak Miron and Haim Rabinowitz as joint liquidators. Miron and Rabinowitz also serve as liquidators for IsraelCredit Lines (Center) Ltd and Israel Credit Lines (A.S.) Ltd.\n\nF. Ran is Declared a Bankrupt\nTwo and one-half years after Ran left Israel and transferred the center of his life to the United States, on October 28, 1999, an Israeli court issued an order declaring Ran bankrupt and appointing Lavie as trustee for Ran's assets. Lavie Ex. 1 at \u00b6 28. By the time the bankruptcy order was granted: Ran had left Israel and had re-settled in the United States; Ran had resigned from his corporate positions and left all of his Israeli business interests behind; and his former businesses were under the Israeli court's supervision and control in a separate corporate bankruptcy proceeding.\n\nG. Lavie's Actions As Trustee\nIn contrast to his relative aggressiveness in investigation and collection activity as temporary receiver on behalf of Bank Hapoalim, Lavie testified that since his appointment as bankruptcy trustee, he has done little and agreed several years ago that the joint liquidators of ICL should take the lead on behalf of the creditors:\n... we made some attempts on a minor level then there were a period of two to three years in which we agreed or \u0097 in which we agreed with the liquidator that *290 he will take care of that because there are some \u0097 since the liquidator has major problems, he has some claims of like $500 million \u0097 shekels \u0097 Israeli shekels.\nTranscript pp. 32-33. Lavie testified that he has reviewed claims asserted in Ran's bankruptcy.\n\nH. Lavie Contends Ran's Center of Main Interests is Determined by the Location of Lawsuits and Debts\nSome years after Ran had relocated to the United States, the joint liquidators of ICL filed suit against Ran and other individuals in the Tel Aviv-Jaffa District Court, civil file no. 2602/01, pending before the Honorable Ruth Ronen. Ran has hired counsel to defend that lawsuit.\nLavie testified that claims have been asserted in Ran's bankruptcy by Bank Hapoalim Ltd., Pozeilov Pinchas, Pozeilov Ben Zion, American Israeli Bank, Ltd., Israel Discount Bank Ltd, United Mizrahi Bank of Israel Ltd, Bank Leumi Le-Israel Ltd, taxing authorities and the joint liquidators of ICL. Lavie testified that claims against Ran, apart from the lawsuit filed by the ICL joint liquidators, total NIS 60 million. In addition to that, the ICL liquidators seek NIS 560 million in connection with their lawsuit.\nAccording to Lavie, the existence in Israel of the ICL lawsuit and the bankruptcy claims constitute evidence that Ran's center of main interest is in Israel compelling this Court to consider the principles of comity and deference to the Israeli court as overriding any other consideration. \"Otherwise, anybody could just up and leave their country of origin, leave behind their business and bankruptcy and say, `well, now I live next door and you can't do anything.'\"\nAlthough Lavie strenuously argues in favor of consideration of the location of Israeli creditors, he is silent as to the weight to be given to debts Ran has incurred since his move here 10 years ago, such as his home mortgage. Lavie urges the Court to consider the location of creditors left behind in Israel, but gives no weight to the consideration that those creditors have exclusive claim to the Israeli assets and businesses that Ran left behind.\nLavie urges the Court to recognize the Israeli proceeding to effect the principles of comity and deference encompassed in Chapter 15 by deferring to the jurisdictional choice of the Israeli creditors. To the contrary, these principles are incorporated into Chapter 15 in \u00a7 1507, available only if recognition is first granted.[6]\nIn denying recognition to a foreign proceeding as not pending in a country where the debtors had their center of main interests or where they have an establishment, the court in In re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., 374 B.R. 122 (Bankr.S.D.N.Y. 2007), stated:\nThe Petitioners' reliance on the discretionary and flexibility attributes of case-law under former section 304 of the Bankruptcy Code is misplaced. While much of the jurisprudence developed under section 304 is preserved in the context of new section 1507, section 304 did not have a recognition requirement as a first step.... Chapter 15, on the other *291 hand, imposes a rigid procedural structure for recognition of foreign proceedings as either main or nonmain and thus the jurisprudence developed under section 304 is of no assistance in determining the issues relating to the presumption for recognition under chapter 15.\nIn re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., 374 B.R. 122 (Bankr.S.D.N.Y.2007). Affirming the lower court's ruling on appeal, the district court stated:\nAppellants argue that Chapter 15 \"was enacted to foster comity,\" AOB 15, and the courts should therefore apply Chapter 15 \"pragmatically, based on their understanding that recognition should be withheld only in very limited circumstances.\" AOB 3. This argument cannot overcome the plain language of Chapter 15.\nChapter 15 and the Model Law are designed to optimize disposition of international insolvencies by facilitating appropriate access to the court system of a host country (the United States, in the case of Chapter 15) by a representative of an insolvency proceeding pending in a foreign country. See \u00a7 1521; Model Law art. 21. If access is granted, then a wide range of relief from the host country's courts may be available. See \u00a7 1521; Model Law art. 21. \"Recognition,\" the statutory parlance for such access, is distinct from the relief that may be granted post-recognition. Recognition turns on the strict application of objective criteria. See \u00a7 1517; Model Law art. 17. Conversely, relief is largely discretionary and turns on subjective factors that embody principles of comity. See, e.g., \u00a7\u00a7 1507, 1521, 1525; Model Law art. 7, 21, 25. If recognition is refused, then the bankruptcy court is authorized to take any action necessary to prevent the U.S. courts from granting comity or cooperation to the foreign representatives. See \u00a7 1509(d).\nRequiring recognition as a condition to nearly all court access and consequently as a condition to granting comity distinguishes Chapter 15 from its predecessor section 304. Prior to the enactment of Chapter 15, access to the United States courts by a foreign representative was not dependent on recognition; rather, all relief under section 304 was discretionary and based on subjective, comity-influenced factors. See Decision, 374 B.R. at 126; see also In re Basis Yield Alpha Fund (Master), 381 B.R. 37, 46 (Bankr.S.D.N.Y.2008); Jay Lawrence Westbrook, Locating the Eye of the Financial Storm, 32 Brooklyn J. Int'l L. 1019, 1024 (2007); Daniel Glosband, SPhinX Chapter 15 Opinion Misses the Mark, 25 Am. Bankr.Inst. J. 44, 45 (Dec/Jan.2007). By establishing a simple, objective eligibility requirement for recognition, Chapter 15 promotes predictability and reliability. The considerations for post-recognition relief remain flexible and pragmatic in order to foster comity and cooperation in appropriate cases.\nThe objective criteria for recognition reflect the legislative decision by UNCITRAL and Congress that a foreign proceeding should not be entitled direct access to or assistance from the host country courts unless the debtor had a sufficient pre-petition economic presence in the country of the foreign proceeding. See House Report at 110; \u00a7 1509(b)(3). If the debtor does not have its center of main interests or at least an establishment in the country of the foreign proceedings, the bankruptcy court should not grant recognition and is not authorized to use its power to effectuate the purposes of the foreign proceeding. See House Report at 113; Guide paras. 73, 75, 128. Implicitly, in such an instance *292 the debtor's liquidation or reorganization should be taking place in a country other than the one in which the foreign proceeding was filed to be entitled to assistance from the United States.\nBoth the plain language and legislative history of Chapter 15 thus requires a factual determination with respect to recognition before principles of comity come into play.\nIn re Bear Stearns High-Grade Structured Credit, Slip Copy, 2008 WL 2198272 *6-8 (S.D.N.Y. May 27, 2008).\nBy arguing comity without satisfying the conditions for recognition, Lavie urges this Court to ignore the statutory requirements of 11 U.S.C. \u00a7 1517. In accordance with In re Bear Stearns High-Grade Structured Credit, comity is not an element of recognition; it is rather, a consideration once recognition is granted.\n\nI. Lavie Contends Ran's Center of Main Interests is Determined By Ran's Motive\nLavie asserts that Ran's motive for leaving Israel is a factor to be considered in determining Ran's center of main interests. Lavie contends that Ran is a fugitive escaping the reach of Israeli bankruptcy court orders. During argument, Lavie's counsel characterized Ran as a \"fugitive\" from Israeli justice.[7] As to the origins of the use of the term \"fugitive\" in reference to bankrupt individuals see Israel Treiman, Acts of Bankruptcy: A Medieval Concept in Modern Bankruptcy Law, 52 Harv. L.Rev. 191 (1938-1939).\n*293 As previously noted, under Israeli law, an individual's motive for moving to Israel in order to escape U.S. justice is relevant to an Israeli court's determination of whether the individual's move to Israel represents a genuine attempt to establish his center of life in Israel or whether his flight from justice indicates that his stay in Israel is a temporary one, \"until the storm blows over and not later.\" Abraham Abramovsky and Jonathan I. Edelstein, The Post-Sheinbein Israeli Extradition Law: Has it Solved the Extradition Problems Between Israel and the United States or Has it Merely Shifted the Battleground?, 35 Vand. J. Transnat'l L. 1, January, 2002 (citing Attorney General v. Harosh, Cr. C. (B.S.) 2484/99).\nIn November 2006, Ran sought permission from the Israeli court to defend himself from the United States by submitting to a video cross-examination. In his application to conduct cross-examination by video conference, Ran explains that he has transferred the center of his life to the United States and seeks permission to defend himself from the United States because should he re-enter Israel, the bankruptcy order would result in his indefinite detention in Israel which would work a hardship upon his wife and children in the United States. The application for cross-examination by video conference states:\n11. If the applicant comes to Israel to be examined on his affidavit, he will thereafter be unable, in view of the stay of departure order pending against him, to return to his home, family, and work in the United States.\n12. This risk does not only exist in view of the stay of departure order that was granted in the bankruptcy proceedings, but also in view of the probability that others (who in one way or another were involved with Credit Lines) will also be interested in staying his departure from Israel with applications of their own in order to exert pressure on him.\n13. The immediate significance of his coming to Israel is the absolute collapse of the family, the income and the security \u0097 and the applicant cannot take such a risk.\nLavie Ex.5.\nJudge Ronen denied Ran's requested for cross-examination by video conference. The order states:\n... according to applicant if he comes to Israel to be cross-examined on his affidavit there is a fear that his departure from Israel will be stayed as a result of a pending stay of departure order against him in the framework of a bankruptcy order. The applicant is arguing that he left Israel about nine years ago and has since lived with his wife in five children in Houston, Texas. The center of the applicant life is therefore in the United States. The immediate significance of his coming to Israel is therefore the absolute collapse of his family, his income and his safety, which he cannot risk ... as aforesaid, if the order staying the applicants departure from Israel is indeed justified, there is also justification for the possible prejudice to the applicant arising as a result of this order and as a result of which the applicant must come to a decision \u0097 whether to come to Israel for the purpose of being cross-examined on his affidavit (in which case the stay of departure order will indeed enter into force and he will not be allowed to leave the country \u0097 so long as he does not regulate the matters by reason of which the order was issued) or to waive the filing of his affidavit, with everything implied therefrom. Accordingly the application is denied.\nIn addition to the reasons stated in the application, Ran testified that he is afraid *294 to go back to Israel. Transcript p. 48. Ran explained that prior to his departure in 1997, he and his wife received death threats, as well as threats to kidnap their children; that his car and his brother's office were firebombed; that his brother's car was destroyed in an acid attack; and that his parents had been harassed. Transcript p. 45. The veracity of Ran's testimony concerning his fear was carefully probed by Lavie's counsel on cross-examination.[8] In addition, Lavie testified that he was surprised by Ran's testimony on this point, as he did not recall any threats against Ran.[9] On cross-examination, however, Lavie remembered his investigators' report from 1997, which states:\nYuval Ran had the use of a private 1994 Mercedes motorcar, registration 381600... according to information, the motorcar was reported as stolen in April or May 1997. Persons close to Yuval Ran have stated that the motorcar was stolen by a private creditor who burned it as a warning to Yuval Ran. Some of those close to him claim that it was probably against this background that he made the decision to leave the country. Since 8/1997, Yuval Ran has not been registered as the owner of any vehicle.\nTranscript pp. 53-56.\nThe motive of an individual in moving from one country to another may be relevant to a determination of the location of his center of main interests when a petition under Chapter 15 for recognition of a foreign proceeding is presented to the U.S. court on the heels of the individual's flight from the country in which the foreign proceeding is pending, but only to the extent that it might show the individual has not genuinely transferred his center of main interest to the U.S. and that his stay in the U.S. is only temporary. See Shierson v. Vlieland-Boddy, [2006] I.L.Pr. 12, [2005] EWCA Civ 974, (CA (Civ Div) 2005); Jane Elizabeth Marinos v. Nikolaos Lykourgos Marinos, [2007] EWHC 2047 (High Court of Justice Family Division 2007); Alevizos v. Ikonomikon, (Case C-392/05), [2007] 2 C.M.L.R. 51 (ECJ 4th Chamber, 2007) (Reference from Greece \u0097 *295 Simvoulio tis Epikratias (Council of State)); Pedro Magdalena Fernandez v. Commission of the European Communities (C-452/93) [1994] ECR 4295 (ECJ 3rd Chamber 1994); Pinna v. Caisse d'Allocations Familiales de la Savoie, (Case 41/84) [1986] E.C.R. 1(ECJ 1986); Schaflein v. Commission of the European Communities, (Case284/87) [1988] ECR 4475, (ECJ 2nd Chamber 1988).\nThe Court finds Ran to be a credible witness. The Court credits Ran's testimony that he left Israel because he was afraid for his safety and for that of his family. The Court finds that Ran's fears for his safety and his concern that he will be indefinitely detained in Israel under the bankruptcy order issued after his move to the United States are genuine. The Court finds that Ran's concern that returning to Israel will work a hardship on his family is legitimate. The Court finds that Ran is not a \"fugitive\" from Israeli justice and has not violated any Israeli bankruptcy court order. Ran's reasons for seeking to defend himself by video-conference from the United States do not support Lavie's contention that Ran remains in the United States to avoid the reach of the Israeli bankruptcy court's jurisdiction.\nThe Court credits Lavie's evidence that Ran transferred his center of life away from Israel. The Court credits Ran's evidence that he transferred the center of his main interests to the United States. The Court credits Ran's testimony that he intends to remain in the United States permanently. No facts show that Ran's move to the United States is temporary or that Ran intends to return to Israel once \"the storm blows over.\" In addition to those facts previously found by the Court in its order of May 22, 2007, the Court finds that the following facts indicate Ran's relocation to the United States is permanent: (1) Ran owns a home in the United States in which he resides with his wife and their five children whose ages were 6, 8, 14, 15, and 17 at the time of trial; (2) Ran's wife and children are U.S. citizens; (3) Ran is a permanent resident of the United States whose application for U.S. citizenship was pending at the time of trial; (4) Ran's children attend school in Harris County, Texas; (5) Ran works in the United States; (6) Ran has not returned to Israel since he left in April 1997; (7) Ran maintains a bank account in Harris County, Texas, and does not maintain a bank account anywhere else; (8) Ran spends his free time going to baseball with his son and to soccer with his daughter; (9) Ran was an assistant coach with Bellaire Little League; and (10) Ran is a member of Beth Yeshurun Synagogue in Harris County, Texas. The Court finds that the United States, specifically Harris County, Texas, is the location of Ran's personal and occupational ties.\n\nJ. Analysis of Foreign Representative's Motive Under In re SPhinX, Ltd., 371 B.R. 10 (S.D.N.Y.2007)\nLavie is neither the foreign representative of the bankruptcy estate of the Israeli corporations with which Ran was formerly associated, nor one of the corporate liquidators jointly appointed by the Israeli court currently managing the liquidation of those businesses. Lavie's admitted lack of activity since his appointment as trustee shows that he is not currently actively investigating, managing, collecting and liquidating Ran's former assets, in connection with which, he might be aided by recognition of his foreign proceeding under Chapter 15.\nLavie's lack of collection activity as bankruptcy trustee comports, however, with his stated goal in obtaining recognition of the Israeli bankruptcy proceeding. Lavie testified that he seeks recognition of *296 the Israeli bankruptcy pending against Ran because Ran has not agreed to repay the \"tens of millions of Israeli shekels\" in debts claimed by Bank Hapoalim Ltd., Pozeilov Pinchas, Pozeilov Ben Zion, American Israeli Bank, Ltd., Israel Discount Bank Ltd, United Mizrahi Bank of Israel Ltd, Bank Leumi Le-Israel Ltd, taxing authorities and the joint liquidators of ICL. Lavie testified that claims against Ran, apart from the lawsuit filed by the ICL joint liquidators, total NIS 60 million. In addition, the ICL liquidators seek NIS 560 million. Lavie testified:\nQ. And when a discharge is requested, is it common to work out some sort of arrangement with the Debtor?\nA. Yes, the way that is \u0097 it is traditionally done in Israel is that the process of discharging of the Debtor is done with his creditors, with arrangement with the creditors.\nQ. That's if \u0097\nA. Why they do set what to his and they are reaching a settlement or arrangement.\n. . . .\nQ. Does it also request typically that the Debtor make some payments out of his earnings for a few years?\nA. Yes, absolutely. This is a possibility \u0097 possible way which happen quite often.\nQ. What are the typical ranges of \u0097 how many years' payments are generally approved?\nA. Assuming the Debtor tells the truth \u0097 claimed the truth of what he has, it is a process of four to five years. It takes four to five years to complete it.\nQ. And how does the Court and the Debtor determine how much will he pay?\nA. By the information \u0097 detailed information data that he is providing to the Court while he is obligated to provide everything and tell the entire truth.\n. . . .\nQ. Okay. Mr. Lavie, you have asked this Court to recognize you as foreign bankruptcy trustee. Could you explain to the Court why you want to be recognized, what you want to do with this case?\nA. The situation for my point is very simple. Yuval left Israel leaving behind him debts of tens of millions of Israeli shekels. Now, he is not taking care of anything. He is not trying to get any settlement or arrangement. He crossed the ocean. He is doing whatever he wants to do here.\nTranscript pp.31-32. At an exchange rate of about 4 NIS to 1 U.S. dollar, Lavie's testimony shows that he seeks recognition in order to obtain Ran's agreement to repay from his future earnings the equivalent of roughly $15,000,000.00-$140,000,000.00 over 4-5 years.\nThe history of the development of Israeli bankruptcy law up to 1996 is described in Rafael Efrat, The Evolution of the Fresh-Start Policy in Israeli Bankruptcy, 32 Vand. J. Transnat'l L. 49 (1999). The Efrat article explains:\nFollowing the end of World War I, Britain gained military control over Palestine, parts of which are now Israel. In 1922, the League of Nations Council approved British control over that area pursuant to what is known as the British Mandate.\n. . . .\nThe adopted British bankruptcy system served primarily as a creditors' collection mechanism ... while the debtor had the right to apply for an order of discharge, debt forgiveness was linked to payments that the debtor made or might make to creditors in the future.\n\n*297 . . . .\nThe bankruptcy process ... generally involved several years of obligatory monthly payments by the bankrupt to the bankruptcy trustee. During this period, the undischarged debtor was restricted and limited in many aspects of his life and no attempt was made to address the financial and other related problems of the debtor. At the end of this prolonged bankruptcy period, debtors were not assured a debt forgiveness; in fact, very few discharges were granted to bankrupts.... The courts' assessment of whether the debtor was likely to get a discharge was generally based on the anticipated repayment level of the debtor's debts. That is, where courts found that the debtor was unlikely to repay at least fifty percent of his debts in bankruptcy, courts denied the debtor's application for bankruptcy protection on the ground that the debtor was unlikely to meet one of the statutory prerequisites for debt forgiveness.\n... [M]ost courts tied such relief to adequate repayment of the debtor's debts ... As a result, some bankrupts remained in that status without receiving a discharge for a period that sometimes extended up to fifteen or even twenty-five years.... [In 1996]the standard by which a court must decide whether to grant a bankrupt an unconditional discharge was significantly liberalized.... [W]hereas prior to the reform law a bankrupt would not be entitled to receive an unconditional discharge if he failed to pay the creditors at least fifty percent of his debts, that requirement has now been deleted.... [T]he length of time under which a bankrupt may be required to make monthly payments to his creditors as a condition of getting a discharge has been significantly altered. Whereas prior to the reform, a judge could have required the bankrupt to make monthly payments to his creditors for an indefinite period of time as a condition for getting a discharge, under the reformed law a judge can only limit such conditional discharge for a period not exceeding four years.\nRafael Efrat, The Evolution of the Fresh-Start Policy in Israeli Bankruptcy, 32 Vand. J. Transnat'l L. 49, 62-110 (1999).\nIn addition to these reforms, \"... the legislators eased the out-of-court restructuring process ... by reducing the minimum payments to be made under a proposed compromise from fifty to thirty percent of the unsecured debts.\" Id. at n. 305. Further, if the debtor does not qualify for bankruptcy relief, Israeli law provides the alternative of debtor's prison. Id. at 101-102 (Although \"[t]he massive and routine utilization of debtor's prison as a collection vehicle irrespective of the debtor's financial condition ... [has been] significantly curtailed and diminished in scope, it still remains an available and sometimes powerful collection tool.\")\nBy citing favorably to In re SPhinX, 371 B.R. 10 (S.D.N.Y.2007) in its order of remand, the district court suggests that a foreign representative's bad faith motive in seeking recognition of a foreign proceeding may appropriately be considered in determining the location of a debtor's center of main interests. Lavie v. Ran, 384 B.R. 469, 471 (S.D.Tex.2008). Conducting a fact finding inquiry into the foreign representative's motives in seeking recognition of a foreign proceeding would, however, shift the Court's focus away from identifying the location of a debtor's center of main interests \"by reference to criteria that are both objective and ascertainable by third parties.\" See Eurofood IFSC Ltd. (C-341/04), [2006] ECR 3813, (ECJ 2006). In F.D.I.C. v. Maxxam, Inc., 523 F.3d 566 (5th Cir.2008), the Fifth Circuit stated the following concerning the FDIC's intent in pursuing litigation:\n\n*298 Doubtless many plaintiffs have multiple purposes in pursuing litigation. And so long as the merits of their claim, viewed objectively, are supported by a good-faith belief that the allegations are well founded and not frivolous, the subjective motivation for pursuing the claim and the multiple purposes are ordinarily of no moment.[FN79] As the Supreme Court held in Hartman v. Moore, \"It may be dishonorable to act with an unconstitutional motive and perhaps in some instances be unlawful, but action colored by some degree of bad motive does not amount to a constitutional tort if that action would have been taken anyway.\"[FN80]\nFN79. We recognize the difficulty in identifying an \"improper purpose\" objectively, as an \"improper purpose\" connotes intent. However, we have consistently emphasized that we must follow an objective inquiry. See, e.g., Whitehead, 332 F.3d at 802; Nat'l Ass'n of Gov't Employees, Inc., 844 F.2d at 224.\nFN80. 547 U.S. 250, 260, 126 S.Ct. 1695, 164 L.Ed.2d 441 (2006).\nF.D.I.C. v. Maxxam, Inc., 523 F.3d 566, 581 (5th Cir.2008).\nIn light of the foregoing, and as the parties have not raised the issue of the foreign representative's motive in seeking recognition of the foreign proceeding as a factor to be considered in determining the debtor's center of main interests, the Court declines to make findings on remand of whether Lavie has acted in bad faith.\n\nK. Lavie Asserts that Ran Operates ICL by \"Remote Control\" and that this is a Factor Determining Ran's Center of Main Interests\nRan filed an affidavit in the Israeli litigation that states:\n27. The only remaining activity in the financing sphere was the collection of old loans. This activity is limited (more or less relies on the appointment of external lawyers for the purpose of handling the collection which was never stopped and the deponent on behalf of the plaintiff, Barak Harari, even admits this in paragraph 52 of his affidavit) and is not at all similar in its scope to the active management of an active credit set \u0097 up as intended by the company and the managers at the time of contracting.\n. . . .\n29. Even in relation to the little that remained (the collection of the old loans), I never stopped providing the company with my services. I engaged therein so long as I was in Israel (until March or April 1997) and even after my departure, until the receivership and liquidation proceedings began in 1998 I believe, and it was no longer possible to engage therein. The plaintiff confirms, in paragraph 49 of Barak Harari's affidavit on its behalf, that even after I left Israel I continued engaging in the company's affairs. In such capacity, I also attended to collection of the old loans as mentioned in paragraph 27 above.\nLavie Ex. 4.\nLavie asserts, in his report to the Israeli court concerning the status of Ran's bankruptcy, that Ran operated ICL by \"remote control\" after Ran left Israel. Lavie Ex. 1 \u00b6 18. Lavie bases his conclusion on his reading of reports written by the joint liquidators of ICL and on the content of Ran's affidavit excerpted above.[10] Lavie's report states:\n\n*299 18. In that regard, it should be noted that as emerges from the liquidator's reports, even after fleeing abroad, the debtor continued managing Credit Lines by \"remote control\" from his place of refuge abroad, through local officers in Israel and various advisors, such as: Ms. Dina Claude, who in fact functioned as manageress in the Credit Lines companies and the various officers acted on her instructions, and through Mr. Eyal Gibor, who was elected as a co-CEO and acted in accordance with instructions he received from the debtor and other officers. In addition, as also emerges from the liquidator's reports, whilst abroad the debtor continued to participate in meetings of Credit Lines' board of directors and to take part in the company's decision-making process via telephone.\n19. Mention should also be made of paragraph 29 of the affidavit filed by the debtor with the Tel Aviv district court on 20th November 2006, in the framework of the liquidator's claim (cf 2601/01), in which the debtor expressly stated as follows: 29. Even in relation to the little that remained (the collection of the old loans), I never stopped providing the company with my services. I engaged therein so long as I was in Israel (until March or April 1997) and even after my departure, until the receivership and liquidation proceeding began in 1998, I think, and it was no longer possible to engage therein. The plaintiff confirms, in paragraph 49 of Barak Harari's affidavit on its behalf, that even after I left Israel I continued engaging in the company's affairs. In such capacity, I also engaged in matters concerning the collection of the old loans as mentioned in paragraph 27 above.\nLavie Ex. 1.\nLavie did not prepare the reports referred to in paragraph 18. Lavie testified that all he knows of the operation of Ran's former businesses in Israel \"is what is written in the liquidator report because you have to remember that I'm not dealing with the companies.\" Transcript p. 28. Lavie failed to introduce any credible evidence supporting his conjecture that Ran operated Israeli companies after he relocated to the United States.[11]\nConversely, Ran testified that he did not manage the affairs of any company in Israel after he left. Transcript p. 45. Ran testified that the only activity in which he was involved after he left Israel was at the request of ICL's Israeli management who telephoned him for help in collecting bad debts of ICL customers. Transcript pp. 45-46. Ran testified that when ICL's Israeli management called him, he tried to help them as much as he could even though he did not have anything with him when he came from Israel. Transcript p. 46. Ran testified that he helped ICL's Israeli management in every task that they asked until the company was sold to a third party at the end of 1997. Transcript p. 46. Ran testified that the buyer ran the company for a year. Transcript p. 46. Ran testified that he left the company in the end of 1997, when the company asked him to resign. Transcript p. 46.\nThe Court finds Ran's testimony is credible. The Court finds Lavie failed to prove that Ran manages any companies located in Israel since he relocated to the United States.\n\n\n*300 V. Conclusion\nAt the conclusion of his presentation, Lavie's counsel argued, \"The intent of the law is: there has to be some connection with the country in which the bankruptcy sits in order for this country's bankruptcy courts to be required to recognize it.\" Transcript p. 62. Lavie's counsel's argument reveals Lavie's fundamental misunderstanding of the statutory requirements for recognition under Chapter 15. For the Israeli bankruptcy to be entitled to recognition as pending in the location of Ran's center of main interests, the facts must show, at the time recognition is sought, not simply \"some connection\" between Ran and Israel, but that Ran's center of main interests is located in Israel. 11 U.S.C. \u00a7 1517(b)(1).\nLavie's proof proffered to establish that Ran's center of main interests lies in Israel consists of the fact that Ran was born in Israel and lived and worked there until 1997; that Ran has been sued in Israel, hired counsel to defend the lawsuit, and submitted an affidavit to the Israeli court; and, that Ran's debts to creditors incurred before his departure from Israel in 1997 remain unpaid.\nThese factors are outweighed by Lavie's other testimony and exhibits establishing that Ran transferred the center of his life away from the State of Israel in 1997, leaving all of his assets and business interests in Israel with the intention to never return. Lavie proved that Ran does not live in Israel, and that all of Ran's former Israeli business interests remain in Israel under the control of Israeli joint liquidators. The Court finds that Lavie failed to prove that Ran manages any business in Israel by \"remote control\" or otherwise.[12] The Court finds Lavie's evidence supports both his representation to the Israeli bankruptcy court and to this Court that Ran's departure from Israel in 1997 was intended by Ran to be and has been so genuine and permanent as to constitute both an act of bankruptcy under Israeli bankruptcy law and a permanent transfer of the center of Ran's life from the State of Israel to the U.S.\n\nVI. The Presumption\nTo expedite issuance of an order granting or denying recognition of a foreign proceeding, Chapter 15 allows the Court the discretion to presume that in the absence of evidence to the contrary, an individual debtor's habitual residence is his center of main interests. 11 U.S.C. \u00a7 1516. This presumption is rebutted if the record contains evidence that some other location is the center of main interests of an individual debtor.\nRebuttal of the presumption contained in \u00a7 1516 is governed by Fed.R.Evid. 301, which provides:\nPresumptions in General in Civil Actions and Proceedings. In all civil actions and proceedings not otherwise provided for by Act of Congress or by these rules, a presumption imposes on the party against whom it is directed the burden of going forward with evidence to rebut or meet the presumption, but does not shift to such party the burden of proof in the sense of the risk of nonpersuasion, which remains throughout the trial upon the party on whom it was originally cast.\nFed.R.Evid. 301.\nThe Fifth Circuit has adopted a \"bursting bubble\" theory of presumptions *301 under which the only effect of a presumption is to shift the burden of producing evidence with regard to the presumed fact. Pennzoil Co. v. F.E.R.C., 789 F.2d 1128, 1136 (5th Cir.1986). If the party against whom the presumption operates produces evidence challenging the presumed fact, the presumption simply disappears from the case. Id. at 1137. Once the side against whom the presumption operates meets its burden of production the presumption completely disappears leaving the factual issue to be resolved at trial. Id. Rebuttal evidence dispels the presumption, but the underlying evidence remains in the case. Id. A fact finder could still credit the evidence of the party in favor of whom the rebutted presumption operates despite the existence of contrary evidence and despite the resultant destruction of the presumption. Id.\nThe court in In re Tri-Continental Exchange Ltd., 349 B.R. 627 (Bankr.E.D.Cal. 2006) considered the effect of \u00a7 1516's presumption that the debtor's registered office is the center of main interests:\nIn effect, the registered office (or place of incorporation) is evidence that is probative of, and that may in the absence of other evidence be accepted as a proxy for, \"center of main interests.\" The registered office, however, does not otherwise have special evidentiary value and does not shift the risk of nonpersuasion, i.e. the burden of proof, away from the foreign representative seeking recognition as a main proceeding.\nThus, if the foreign proceeding is not in the country of the registered office, then the foreign representative has the burden of proof on the question of \"center of main interests.\" Correlatively, if the foreign proceeding is in the country of the registered office, and if there is evidence that the center of main interests might be elsewhere, then the foreign representative must prove that the center of main interests is in the same country as the registered office.\nIt follows that the burden of proof as to the \"center of main interests\" is never on the party opposing \"main\" status and that such an opponent has only a burden of going forward to adduce some evidence inconsistent with the registered office warranting a conclusion of \"main\" status.\nIn re Tri-Continental Exchange Ltd., 349 B.R. 627, 635 (Bankr.E.D.Cal.2006).\nLavie had the burden of proving that Ran's center of main interests is in Israel, the location of the foreign proceeding for which Lavie seeks recognition. To the extent that Lavie had the burden of going forward with evidence to overcome the presumption that Ran's habitual residence in the U.S. is his center of main interests, Lavie met that burden and survived a motion for judgment at the close of Lavie's case in chief. To the extent that Ran might be understood to have the burden of going forward with evidence to show that he had changed his center of main interests from Israel, where he lived until 1997, to the U.S., where he has lived and maintained his personal and occupational ties since 1997, Ran met that burden.\nLavie's evidence, while sufficient to rebut the presumption was insufficient to prove by a preponderance of the evidence that Israel is the location of Ran's center of main interests. Lavie has not proved that Ran maintains any center of interests in Israel. The preponderance of the evidence shows that the location of Ran's center of main interests is the United States. Therefore, the facts show that Ran's center of main interests is located in the United States, which is the same location as Ran's habitual residence. Having *302 failed to carry his burden of proof as the foreign representative, Lavie is not entitled to recognition of the Israeli bankruptcy, and so the Court denied his petition for recognition.\nNOTES\n[1] In addition, the Court found the following in its order of May 22, 2007:\n\n1. Prior to 1997, Yuval Ran was a notable Israeli businessman associated with nearly one-hundred Israeli companies including a public Israeli company known as Israel Credit Lines Supplementary Financial Services, Ltd.\n2. Between 1992 and 1995, Credit Lines greatly expanded its activity through monies it raised and borrowed.\n3. In 1994, these companies began sustaining large losses and in 1995, Credit Lines began liquidating its various interests.\n4. In April 1997, Ran left Israel and has never returned.\n5. Subsequent to his departure, in July of 1997, a bank instituted receivership proceedings against him in Israel.\n6. Zuriel Lavie was appointed temporary receiver, and eventually, trustee, over Ran's property.\n7. After leaving Israel, Ran moved to Houston, Harris County, Texas in May or June of 1997.\n8. Ran's wife and children joined him in Houston shortly after he arrived, and the family has resided here without interruption since.\n9. Ran maintains no bank accounts outside of Harris County, Texas.\n10. Ran and his wife are salaried employees of a furniture company in Houston and own a home in the Houston area.\n11. Ran's wife and five children are United States Citizens.\n12. Ran has a green card and is a legal permanent resident of the United States.\n13. Ran testified that he intends to remain in the United States for the remainder of his life.\n14. After leaving Israel, Ran temporarily assisted in collecting debts owed to the company, but ceased doing so when receivership and liquidation proceedings for Credit Lines began in 1998.\n15. Ran testified that he carries out no business activity in Israel, and has not done so since 1998.\n16. Ran testified that he left Israel after his car and his brother's office were firebombed; his brother's car was destroyed in an acid attack; his parents were harassed; and he and his wife received death threats, as well as threats to kidnap their children.\n17. Ran's two youngest children were born in the United States.\n18. Ran has applied to become a United States citizen, and his application is pending.\n19. By order dated October 28, 1999, Zuriel Lavie was appointed by the District Court of Tel-Aviv-Jaffa as trustee of the property of Yuval Ran.\n20. The order declares that Yuval Ran \"went bankrupt,\" and, among other things, orders the debtor to \"deposit his passport in the Official Receiver's hands\" to prohibit the debtor's exit from Israel.\n21. The evidence shows that since 1997, Yuval Ran has lived with his family and worked in Houston, Harris County, Texas, which the Court finds is Yuval Ran's habitual residence.\n22. Consequently, the Court finds that Houston, Harris County, Texas is the center of Yuval Ran's main interests and has been since 1997.\n23. As the center of Ran's main interests are not in Israel, the proceeding pending in Israel for which Lavie has been appointed trustee does not constitute a \"foreign main proceeding\" under 11 U.S.C. \u00a7 1502(4).\n24. The evidence shows that since 1997, the only economic activity carried out by Yuval Ran and his only place of operations has been in Houston, Harris County, Texas.\n25. The Court finds that Yuval Ran's \"establishment\" for purposes of \u00a7 1502(2) is Houston, Harris County, Texas.\n26. Consequently, the Israeli proceeding does not constitute a foreign nonmain proceeding under \u00a7 1502(5).\n27. As the Israeli proceeding does not constitute either a foreign main or a foreign nonmain proceeding, the Israeli proceeding is not entitled to recognition under 11 U.S.C. \u00a7 1517.\n[2] The Report of the Working Group on Insolvency Law on the Work of its Nineteenth Session, United Nations General Assembly A/CN. 9/422 (25 April 1996), illustrates the process of development of the provisions regarding recognition of foreign insolvency proceedings:\n\nArticle 6. Recognition of foreign insolvency proceedings\n76. The text of the draft article as considered by the Working Group read as follows:\n\"(1) For the purposes of this Law, a foreign judgement opening insolvency proceedings shall be recognized [from the time that it becomes effective in the State of the opening of proceedings],\nVARIANT A\nunless it is shown that there was no substantial connection between the foreign jurisdiction and the debtor.\nVARIANT B\nif the judgement emanates from a competent court or authority. A court or authority shall be deemed competent if that court or authority has jurisdiction based on any of the following criteria:\n(a) domicile or habitual residence of the debtor;\n(b) seat or place of registered office;\n(c) [principal place of business] [centre of debtor's main interests];\n(d) location of assets.\nVARIANT C\nif the foreign proceeding originates from a court or competent authority in a State [appearing on the following list: ...] [certified for purposes of recognition of insolvency by [name of appropriate entity or officer in enacting State].]\n. . . .\nParagraph (1)\n79. The Working Group noted that paragraph (1) presented several options as to a rule to be followed by the courts of the enacting State in determining whether to accord recognition to a foreign proceeding. The Working Group paused to consider the necessity of including such a provision, in view of the fact that the model provisions were meant to open as wide a door to cooperation as would be appropriate, while at the same time not prejudicing the rights of local creditors under the insolvency laws of the enacting State. The Working group affirmed the utility of article 6, which could play an important part in the provisions designed to secure an opportunity for foreign representatives to seek cooperation and assistance in the enacting State.\n80. While some support was expressed for variant A, the predominant inclination in the Working Group was to follow an approach based on variant B. At the same time, it was acknowledged that selecting variant B would not preclude the possibility of offering, as an additional option for States, variant C. Inclusion of a variant C ...\n81. As to the content of a provision based on variant B, a number of suggestions were made so as to enable the courts of the enacting State to have a better and more predictable idea of how they should react to an application for recognition.\n82. In the first place, and in view of the decision to distinguish in article 7 (relief available upon recognition) between foreign main and foreign non-main proceedings, the Working Group agreed that such a distinction would have to be reflected also in article 6. It was suggested to the Working Group that, aside from linking the rule on recognition to whether the foreign proceeding was a main or non-main proceeding, it might be useful to predicate the rule on recognition in some way on the range of effects that would flow from recognition. Another suggestion was that possible additional factors might be added to the list set forth in variant B of paragraph (1).\n83. It was also noted that consideration might be given to limiting paragraph (1), for the purposes of recognition of a foreign proceeding as a main proceeding, to one or the other of the factors listed. It was said that such a limitation would be necessary to avoid placing the courts in the enacting State in the position of dealing with multiple claims for recognition as a foreign main proceeding.\nParagraph (2)\n. . . .\n86. Upon completion of the first round of consideration of article 6, the Working Group referred it to the drafting group with a view to taking into account the above deliberations. The drafting group subsequently submitted the following revised version of article 6 to the Working group:\n\"(1) For the purposes of this Law, a foreign proceeding shall be recognized:\n(A) as a foreign main proceeding if the court of the foreign proceeding has jurisdiction based on the:\n(i) domicile or habitual residence of the debtor;\n(ii) seat or place of registered office of the debtor; or\n(iii) [principal place of business of the debtor! [centre of the debtor's main interests];\nor\n(B) as a [non-main] foreign proceeding if the debtor had an establishment [within the meaning of article ___] in the foreign jurisdiction.\n[(C) If recognition is sought in respect of more than one foreign proceeding, the court [shall] [may] designate one such proceeding as the foreign main proceeding.]\n\"(2) The court shall grant or refuse an application for recognition of a foreign main proceeding within ___ days after the application has been filed with the court.\"\n. . . .\n88. A concern that was emphasized was that the revised version of paragraph (1) raised the spectre of recognition of more than one foreign main proceeding. It was suggested that such a possibility would place courts in an untenable position and would detract from the acceptability of the model provisions. The attempt to equip the court to deal with such a case, by including in subparagraph (c) the authorization top select one of several competing foreign proceedings as the main proceeding, was not regarded as an adequate solution.\n89. The Working Group acknowledged the concern about possibly giving rise to recognition of more than one foreign proceeding as \"main\", and, upon further consideration, agreed that paragraph (1)(a) should be modified to refer to one factor as a competency test for recognition of a foreign main proceeding. It was agreed that that factor should be the \"centre of the debtor's main interests\".\n90. Advantages cited in favour of the selection of that particular factor included that it would encompass as debtors both legal and natural persons, and that it would be in harmony with the approach and terminology utilized in the European Union (EU) Convention. The latter aspect would enable to draft model provisions to contribute to the development of a standardized and widely understood terminology, rather than inadvertently contributing to an undesirable diversification of terminology.\n91. It was suggested, in order to add further specificity to the rule, to establish a rebuttable presumption that the registered seat of the debtor was the centre of its main interests.\n[3] The opinion of Mr. Advocate General Ruiz-Jarabo Colomer in Proceedings brought by Staubitz-Schreiber (Case C-1/04), [2006] E.C.R. I-701 [2006] I.L.Pr. 30 (ECJ Grand Chamber 2006) (Reference for a preliminary ruling: Bundesgerichtshof \u0097 Germany (Federal Supreme Court)), summarizes the history of the EU Regulation as follows:\n\nAG7 The idea of regulating insolvency proceedings within the Community has its origins in Art.220 of the EC Treaty (now Art. 293 EC), which calls upon the Member States, so far as is necessary, to enter into negotiations with each other with a view to securing for the benefit of their nationals, inter alia, the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals and of arbitration awards. AG8 That provision gave rise, first of all, to the well-known 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters [FN6] (\"the Brussels Convention\").\nFN6 [1978] O.J. L304/36. Amended successively by the Convention of Accession of October 9, 1978 on the accession of the Denmark, Ireland and the United Kingdom [1978] O.J. L304/1 and amended version p. 77, by the Convention of October 25, 1982 on the accession of the Greece [1982] O.J. L388/1 by the Convention of May 26, 1989 on the accession of Spain and the Portugal [1989] O.J.L285/1, and by the Convention of November 29, 1996 on the accession of Austria, Finland and Sweden [1997] O.J. CI5/1. That legislation is currently contained in Regulation 44/2001 of December 22, 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2001] O.J. L12/1.\nAG9 However, Art.1 of the Brussels Convention excludes from the scope of the convention \"bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings\", and therefore those areas remained to be dealt with in a future agreement between the Member States. Nevertheless, a committee of experts drafted two proposals between 1963 and 1980. In the case of the second proposal, which was based on the principles of unity and universality,[FN7] a group from the Council of the Community was asked to prepare a report but work was suspended in 1985 owing to lack of agreement.[FN8]\nFN7 By \"principle of unity\" is meant the existence of a single set of proceedings for the whole of the territory of the Community, while \"principle of universality\" refers to the fact that the proceedings extend to all the debtor's assets wherever they may be situated.\nFN8 Virgos/Schmit Report on the Convention on Insolvency Proceedings (Virgos-Schmit Report) in Virgos and Garcimart n, Comentario al Reglamento Europeo de Insolvencia, (Civitas, Madrid, 2003), point 3. AG10 It is important to point out that, even before the decision was taken to adopt the Community legislation, the Member States had fostered the process of mutual recognition and enforcement of judgments in bankruptcy proceedings by means of bilateral treaties, a list of which is set out in Art.44(1) of Regulation 1346/2000. That article provides that the Regulation is to replace the conventions concerned. *646 AG11 In addition, other initiatives arose outside the Community sphere, particularly within the Council of Europe, which culminated in the European Convention on certain international aspects of bankruptcy opened for signature in Istanbul in 1990 (\"the Istanbul Convention\"). However, the entry into force of Regulation 1346/2000 leaves the ratification of that convention in doubt. The main contribution of the Istanbul Convention is the introduction of greater flexibility in the use of the abovementioned principles.[FN9]\nFN9 Virgos/Schmit Report, point 4.\nAG 12 The Istanbul Convention left its mark on the subsequent process of drafting the Regulation, because, with a view to avoiding the complexities of the 1985 draft convention, an ad hoc group of national experts finalised the text of the Convention on Insolvency Proceedings, done at Brussels on November 23, 1995, which has a less rigid approach and simpler solutions.[FN10]\nFN10 Virgos/Schmit Report, point 5.\nAG 13 Unlike its immediate predecessor at Community level, the scheme of the latter convention was based around the principle of universality limited by the possibility of opening one or more secondary proceedings in other States, whose scope was limited to the respective territories of those countries.[FN11] FN11 ibid.\nAG 14 Since not all 15 Member States acceded to it, the 1995 convention collapsed irrevocably. However, as a result, the convention underwent a transformation, rather like a chrysalis: its content was unaltered but its legal status changed so that it ceased to be an international treaty and became a regulation pursuant to the second paragraph of Art.249 EC.\nAG 15 Nurtured by Finland and Germany, the impulse for that transformation flourished in the fertile ground of Arts 61(c) EC (formerly Art.73i of the EC Treaty) and 67(1) EC, (formerly Art.730 of the EC Treaty), which were \"communitarised\" under the Treaty of Amsterdam, thereby constituting one of that Treaty's main achievements.[FN12] FN12 (T. Wiedemann, Visa, Asyl, Einwanderung, in Schwarze, J. (Coord.), EU-Kommentar, BadenBaden, 2000), p. 842.\nAG 16 The convention was finally free from the creeping fate to which it was destined by its former status as a treaty and its new nature endowed it with the gracefulness resulting from the direct applicability inherent in regulations.\nAG 17 It is clear from the preamble to Regulation 1346/2000 that the proper functioning of the internal market requires three main elements in the sphere of insolvency: first, a Community act requiring co-ordination of the measures to be taken regarding an insolvent debtor's assets[FN13]; secondly, the effectiveness of cross-border insolvency proceedings[FN14]; and, lastly, the avoidance of so-called forum shopping, that is where parties have incentives to transfer assets or judicial proceedings from one Member State to another, seeking to obtain a more favourable legal position.[FN15]\nFN13 Recital 3 in the preamble to Regulation 1346/2000.\nFN14 Recital 2 in the preamble to Regulation 1346/2000.\nFN15 Recital 4 in the preamble to Regulation 1346/2000.\nAG 18 The Regulation does not seek to govern insolvency proceedings in an all embracing consolidated manner but rather the applicable law, international jurisdiction to open such proceedings, and the recognition of those proceedings in other Member States.\n[4] See National Insurance Institute of Israel, NII English Home Page > Definitions and Terms, Definitions Applicable to Insurance Contributions, Resident of Israel, http://www. btl.gov.il/NR/exeres/FE8AAEC6-6D04-4956-8 C5F-835B2D63FF39.\n[5] Id.\n[6] \"The decision to grant recognition is not dependent upon any findings about the nature of the foreign proceedings of the sort previously mandated by section 304c of the Bankruptcy Code. The requirements of this section, which incorporates the definitions in section 1502 and sections 101(23) and (24), are all that must be fulfilled to attain recognition.\" Hon. Burton R. Lifland, Una O'Boyle, Esq. and Erin Healy Mautner, Esq., \"Chapter 15 of the United States Bankruptcy Code: An Annotated Section-By-Section Analysis.\"\n[7] Lavie's counsel persistently characterized Ran's application for cross-examination by video conference as evidence that Ran is a \"fugitive\" from the Israeli bankruptcy system who remains in the United States to avoid answering questions concerning his bankruptcy and to avoid Israeli bankruptcy procedure:\n\n... it's not our burden to prove that Israel is a habitual residence ... it is not disputed that Mr. Ran lives in Houston. I do not know whether that means it's a habitual residence because the evidence also shows that the reason he came here is to flee from creditors and from a court order that required him to be there to answer questions. His own affidavit and motion recently filed in Israel which are in evidence state that he doesn't want to go back to Israel because he's afraid of being held there for questioning in the bankruptcy. So the reason he's here is to avoid the procedure there. I don't know that that makes him a habitual resident of Houston. Maybe it just makes him a habitual fugitive to Houston.\nTranscript p. 35.\nHowever, if I try to look at the big picture, I think that what Mr. Ran's view is at base is that the statute allows a fugitive from another country's bankruptcy system to move here \u0097 I'm talking about individuals ... for an individual to move here, the next day say this is his residence, `I'm a habitual resident because my children are in school here and I coach Little League or whatever \u0097 and therefore the reach of the other bankruptcy court cannot get to me.'\nTranscript pp. 58-59.\nNow, I'm not sure that Houston is where Mr. Ran habitually resides because the evidence is that he left Israel rather than deal with his creditors. Now, it may be that some of his creditors got rough and burned his car \u0097 and that's the only thing that apparently was reported to anybody in 1997 \u0097 but it was still leaving because of \u0097 he didn't want to face his creditors. It wasn't because he liked the weather here in Houston. He left.\nTranscript p. 64.\nHe says specifically in a motion filed within the last several months in Israel, that the reason he doesn't want to come back to Israel is the bankruptcy court order and he's afraid he's going to be detained to give evidence in that case. So he doesn't want to return for that reason. I don't know if a person under that kind of legal restraint who can't go back to his home country because he doesn't want to face the questioning of a bankruptcy trustee, I don't know that that's what is meant by `habitual residence.' I don't think so.\nTranscript pp. 64-65.\n[8] Q. Okay. Well, let's turn to that, exhibit 5 please.\n\n. . . .\nQ. I'm looking at the English version of it \u0097 paragraph 11.\nA. Uh-huh.\nQ. Just to refresh your recollection, what you told the court is that you were concerned if you come to Israel you would have to submit to the bankruptcy trustee.\nA. Mr. Miles I read the Hebrew. In the Hebrew it said in 11 that if I will come to Israel I will not be able to go out because court will not let me to go out.\nQ. Okay\nTranscript pp. 49-50. Further:\nQ. Okay. Well, in any event, you don't say here that you're concerned about threats to your life in Israel today.\nA. (No verbal response)\nQ. You don't mention anything about threats in this motion.\nA. No, I didn't mention a lot of things in this motion.\nQ. Okay. And you don't mention anything about threats in your affidavit.\nA. No.\nTranscript p. 50.\n[9] Lavie testified as follows:\n\nQ. Okay. Mr. Lavie, back in 1997 when Mr. Ran left the country, did Mr. Ran or his attorney ever say anything to you about these threats?\nA. No, I do not recall.\nQ. Until the testimony you heard just a few minutes ago, have you ever heard from Mr. Ran or anybody else anything about any of these alleged threats or car bombings whatever?\nA. The truth is that the testimony surprised me in this matter. I do not totally recall. I cannot claim that there was no such but this is definitely the first time I heard in today's testimony. To the best of my memory as of this moment, currently, I do not recall that in 1997 I heard about it.\nTranscript pp. 52-53.\n[10] Lavie did not introduce the reports of the joint liquidators into the record of this proceeding.\n[11] Despite the lack of any supporting facts for Lavie's speculation, Lavie's counsel represented to the Court, \"But we don't know exactly what he did, but he was continuing to work for the company.\" Transcript p. 67.\n[12] Lavie testified that he has no personal knowledge about the business activities of the corporations in which Ran was involved in Israel that are currently under the control of Israeli liquidators. Lavie testified that he does not know what business activity Ran has done since departing Israel in 1997.\n"} -{"text": " IN THE SUPREME COURT OF PENNSYLVANIA\n MIDDLE DISTRICT\n\n\nCOMMONWEALTH OF PENNSYLVANIA, : No. 40 MAL 2017\n :\n Respondent :\n : Petition for Allowance of Appeal from\n : the Order of the Superior Court\n v. :\n :\n :\nJOSEPH S. EMEL, SR., :\n :\n Petitioner :\n\n\n ORDER\n\n\n\nPER CURIAM\n\n AND NOW, this 5th day of June, 2017, the Petition for Allowance of Appeal is\n\nDENIED.\n\n Justice Wecht did not participate in the consideration or decision of this matter.\n\f"} -{"text": " In the United States Court of Federal Claims\n OFFICE OF SPECIAL MASTERS\n No. 13-119V\n (Not to be published)\n\n*************************\n *\nROBERT HOFSTETTER, *\n * Filed: April 21, 2014\n Petitioner, *\n * Petitioner\u2019s Motion for a Decision;\n v. * Dismissing the Petition for\n * Insufficient Proof of Causation;\nSECRETARY OF HEALTH AND * Vaccine Act Entitlement; Denial\nHUMAN SERVICES , * Without Hearing\n *\n Respondent. *\n *\n*************************\n\nAmy C. Gunn, St. Louis, MO, for Petitioner\n\nJennifer L. Reynaud, Washington, DC, for Respondent\n\n DECISION 1\n On February 14, 2013, Robert Hofstetter filed a petition for Vaccine Compensation in the\nNational Vaccine Injury Compensation Program 2 alleging that the diphtheria, tetanus, and\n\n\n\n1\n Because this decision contains a reasoned explanation for my action in this case, I will post\nthis decision on the United States Court of Federal Claims\u2019 website, in accordance with the E-\nGovernment Act of 2002, Pub. L. No. 107-347, \u00a7 205, 116 Stat. 2899, 2913 (codified as\namended at 44 U.S.C. \u00a7 3501 note (2006)). As provided by 42 U.S.C. \u00a7 300aa-12(d)(4)(B),\nhowever, the parties may object to the published decision\u2019s inclusion of certain kinds of\nconfidential information. To do so, Vaccine Rule 18(b) permits each party 14 days within which\nto request redaction \u201cof any information furnished by that party: (1) that is a trade secret or\ncommercial or financial in substance and is privileged or confidential; or (2) that includes\nmedical files or similar files, the disclosure of which would constitute a clearly unwarranted\ninvasion of privacy.\u201d Vaccine Rule 18(b). Otherwise, the decision will be available to the\npublic. Id.\n2\n The National Vaccine Injury Compensation Program is set forth in Part 2 of the National\nChildhood Vaccine Injury Act of 1986, Pub. L. No. 99-660, 100 Stat. 3755, codified as amended,\n42 U.S.C.A. ' 300aa-10-' 300aa-34 (West 1991 & Supp. 2002). All citations in this decision to\nindividual sections of the Vaccine Act are to 42 U.S.C.A. ' 300aa.\n\facellular pertussis (DTaP) vaccine he received on February 15, 2010 caused him to suffer\nvarious injuries, including chronic inflammatory demyelinating polyneuropathy (CIDP).\n After gathering all of his relevant medical records, Petitioner filed a motion on April 16,\n2014 seeking a decision dismissing his petition, indicating that \u201cadditional information\u201d he had\ngathered had led him to seek dismissal of his claim.\n\n To receive compensation under the Program, Mr. Hofstetter must prove either 1) that he\nsuffered a \u201cTable Injury\u201d \u2013 i.e., an injury falling within the Vaccine Injury Table \u2013 corresponding\nto one of his vaccinations, or 2) that he suffered an injury that was actually caused by a\nvaccine. See \u00a7\u00a713(a)(1)(A) and 11(c)(1). An examination of the record, however, did not\nuncover any evidence that Mr. Hofstetter suffered a \u201cTable Injury.\u201d Further, the record does not\ncontain a medical expert\u2019s opinion or any other persuasive evidence indicating that Mr.\nHofstetter\u2019s alleged injury was vaccine-caused.\n\n Under the Act, a petitioner may not be given a Program award based solely on the\npetitioner\u2019s claims alone. Rather, the petition must be supported by either medical records or by\nthe opinion of a competent physician. \u00a713(a)(1). In this case, there is insufficient evidence in\nthe record for Mr. Hofstetter to meet his burden of proof. Petitioner\u2019s claim therefore cannot\nsucceed and must be dismissed. \u00a711(c)(1)(A).\n\n Thus, this case is dismissed for insufficient proof. The Clerk shall enter judgment\naccordingly.\n\nIT IS SO ORDERED.\n\n /s/ Brian H. Corcoran\n Brian H. Corcoran\n Special Master\n\f"} -{"text": "812 F.2d 1425\n259 U.S.App.D.C. 31\nJames T. MARTIN, Jr.v.D.C. METROPOLITAN POLICE DEPARTMENT, et al., Richard Xander,et al., Appellants.James T. MARTIN, Jr.v.D.C. METROPOLITAN POLICE DEPARTMENT, et al., Richard Xander,et al., Appellants.\nNos. 85-6071, 85-6072.\nUnited States Court of Appeals,District of Columbia Circuit.\nArgued Sept. 12, 1986.Decided Feb. 10, 1987.Rehearing En Banc Granted May 8, 1987.*\n\nAppeals from the United States District Court for the District of Columbia (Civil Action No. 85-00624).\nJohn D. Bates, Asst. U.S. Atty., with whom Joseph E. diGenova, U.S. Atty., Royce C. Lamberth and R. Craig Lawrence, Asst. U.S. Attys., Washington, D.C., were on the brief, for appellant.\nKerry W. Kircher, with whom James E. Coleman, Jr., Washington, D.C., was on the brief, for appellee.\nBefore EDWARDS, GINSBURG and STARR, Circuit Judges.\nOpinion for the Court filed by Circuit Judge GINSBURG.\nConcurring opinion filed by Circuit Judge EDWARDS.\nOpinion concurring in part and dissenting in part filed by Circuit Judge STARR.\nRUTH BADER GINSBURG, Circuit Judge:\n\n\n1\nThis case concerns the \"absolute\" immunity of federal law enforcement officers from common law tort liability, and their \"qualified\" immunity from \"constitutional tort\" liability. In a civil action for compensatory and punitive damages, plaintiff-appellee James T. Martin charged officers of the United States Capitol Police1 with malicious prosecution, abuse of process, and violation of rights guaranteed him under the fifth amendment to the United States Constitution.2 The federal officers moved to dismiss Martin's claims on immunity grounds. Citing Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959), the officers asserted absolute immunity from suit on Martin's common law claims; featuring Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982), they asserted qualified immunity from suit for constitutional torts. The district court denied the officers' threshold, immunity-based dismissal motions and ordered the parties to proceed with discovery.3\n\n\n2\nWe hold that Martin's common law tort claims must be dismissed because the federal officers legitimately asserted absolute immunity and were not tenably charged with action beyond the outer perimeter of their law enforcement responsibilities. We remand Martin's constitutional claims for reconsideration in light of the pleading directions for qualified immunity cases indicated in Hobson v. Wilson, 737 F.2d 1 (D.C. Cir.1984), cert. denied sub nom. Brennan v. Hobson, 470 U.S. 1084, 105 S.Ct. 1843, 85 L.Ed.2d 142 (1985), and in this opinion.\n\nI.\n\n3\nOn November 27, 1982, the Ku Klux Klan held a march in Washington, D.C. The event attracted public controversy and media attention. Plaintiff Martin became a figure in the day's incidents. As Martin alleged in the instant litigation, local and national news media captured on film an assault on him by District of Columbia Metropolitan Police Department (MPD) officers wherein Martin was \"shoved ... through a plate glass window [and beaten] with nightsticks about the head, shoulders, and arms.\"4 Martin does not claim that any of the present defendants, all U.S. Capitol Police officers, participated in the November 27, 1982 incident. He does assert, however, that after photographs of the MPD officers' assault were broadcast, various MPD officers and the Capitol Police defendants \"conspired to develop an unlawful scheme to deflect attention from their actions and to deter plaintiff from seeking to vindicate the violation of his rights.\"5 Allegedly in furtherance of this scheme, Capitol Police officers arrested Martin and charged him with burglary, destruction of a police cruiser and theft of police property; he was subsequently acquitted of the latter two offenses and convicted, at his trial for burglary, of the lesser included offense of unlawful entry.\n\n\n4\nOn February 21, 1985, Martin commenced this action. His suit in the district court included in the array of defendants the District of Columbia, MPD officers alleged to have participated in the assault or its aftermath, and Capitol Police officers alleged to have conspired with MPD officers to impede Martin's access to justice. While the instant appeal was sub judice, Martin reached a settlement with the District of Columbia and the MPD defendants, and all claims against those defendants have been voluntarily dismissed.\n\n\n5\nThe federal officer (Capitol Police) defendants had promptly moved in the district court for dismissal of all claims asserted against them. First confronting the common law tort claims, the Capitol Police officers cited Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959), as the pathmarking precedent establishing their absolute immunity. The district judge denied the officers' request for instant dismissal of the common law tort claims. She pointed to Martin's allegations that the federal defendants had \"exceeded their authority by conspiring to violate the plaintiff's rights,\"6 and had \"resorted to 'manifestly excessive means' to achieve their objectives.\"7 The court further remarked that \"at this early stage, dismissal or summary judgment is plainly inappropriate\"; \"[h]aving asserted a claim that could potentially defeat the defendants' immunity claim, the plaintiff is entitled to conduct discovery to determine if an issue of material fact exists.\"8\n\n\n6\nThe Capitol Police officers also failed to gain early dismissal of Martin's claims of constitutional violations. Their plea to this branch of the complaint was qualified immunity. The district court stated that qualified immunity exonerates federal officials only when their conduct \"does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.\" Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982). Martin's allegations of \"a police conspiracy whose aim was to deter plaintiff from seeking to vindicate his legal rights,\" taken as true for purposes of ruling on defendants' motion for summary judgment, indicated the deprivation of two clearly established constitutional rights: the right of access to the courts and due process.9 When the law in question is clearly established, the district court observed citing this court's words, \"the Government actor is presumed to have known about it [and] summary judgment in his favor must be denied.\" Hobson, 737 F.2d at 25. The Capitol Police officer defendants, by this appeal, seek reversal of the district court's rulings refusing to dismiss the action in response to the officers' pleas of absolute and qualified immunity.10\n\nII.\n\n7\nAll parties, and the district court, agreed that if the Capitol Police were engaged in discretionary activity within the \"outer perimeter of their line of duty,\" then plaintiff's common law claims for malicious prosecution and abuse of process would be barred by the doctrine of absolute immunity. See Barr, 360 U.S. at 575, 79 S.Ct. at 1341; McKinney v. Whitfield, 736 F.2d 766, 768-69 (D.C.Cir.1984).11\n\n\n8\nThe district court, in refusing to dismiss the common law claims, emphasized Martin's allegations of an unlawful conspiracy among the federal and municipal defendants. The conspiracy theory, the court thought, placed the federal officers' conduct beyond the pale or \"outer perimeter\" of their authority, and thus let down the absolute immunity bar. In its initial order denying summary adjudication, the court stated: \"[T]he plaintiff has clearly alleged that the federal defendants exceeded their authority by conspiring to violate the plaintiff's rights.\"12 In response to the defendants' renewed motion, the court further commented: \"[T]he conspiracy allegations brought against the federal defendants, if true, constitute acts that fail to satisfy the 'functional' test set out in McKinney \" insofar as the \"immunity's justifying purpose [which] may best be defined as 'the effective functioning of government' [is not] 'related closely' to an alleged conspiracy to deprive an individual of basic constitutional rights.\"13 We find the conspiracy theory inadequate to overcome the absolute immunity defense; we set out our reasoning below.\n\n\n9\nNo government officer, of course, can be \"authorized\" to act unlawfully. But if the scope of an official's authority or line of duty were viewed as coextensive with the official's lawful conduct, then immunity would be available only where it is not needed; in effect, the immunity doctrine would be \"completely abrogate[d].\" Briggs v. Goodwin, 569 F.2d 10, 15 (D.C.Cir.1977), cert. denied, 437 U.S. 904, 98 S.Ct. 3089, 57 L.Ed.2d 1133 (1978); see also Gregoire v. Biddle, 177 F.2d 579, 581 (2d Cir.1949) (proper inquiry is whether \"the occasion [was] such as would have justified the act, if [the defendant] had been using his power for any of the purposes on whose account it was vested in him\") (emphasis added), cert. denied, 339 U.S. 949, 70 S.Ct. 803, 94 L.Ed. 1363 (1950).\n\n\n10\nThe core of Martin's complaint in this case, before one can reach his conspiracy theory, is that the defendants were animated by improper motives in deciding to pursue his arrest and indictment. While such official pursuit of an individual may indeed invade a recognized legal interest, we stress that the pursuer would not on that account lose his absolute immunity from common law tort liability, for immunity of the absolute kind adheres \"even when the [officer] is accused of acting maliciously and corruptly.\" Pierson v. Ray, 386 U.S. 547, 554, 87 S.Ct. 1213, 1218, 18 L.Ed.2d 288 (1967); see also Barr, 360 U.S. at 575, 79 S.Ct. at 1341. So long as the officer \"performed the kind of act not 'manifestly or palpably beyond his authority,' but rather 'having more or less connection with the general matters committed by law to his control or supervision,' \" Briggs, 569 F.2d at 11-16, quoting Spalding v. Vilas, 161 U.S. 483, 498, 16 S.Ct. 631, 637, 40 L.Ed. 780 (1896), absolute immunity clings to the officer's actions. Cf. Imbler v. Pachtman, 424 U.S. 409, 419 n. 13, 96 S.Ct. 984, 989 n. 13, 47 L.Ed.2d 128 (1976) (distinguishing the significance of the defendant's motivations in the absolute and qualified immunity contexts). The only overt acts in which the defendants are alleged to have engaged are squarely within both the statutory authority conferred on the U.S. Capitol Police, see 40 U.S.C. Sec. 212a (1982), and the general ambit of law enforcement duties, i.e., participating in the decision to initiate criminal proceedings, and swearing out and executing an arrest warrant.14\n\n\n11\nMartin's conspiracy allegations cannot change the analysis, for \"[a]ccusing [the defendants] jointly, or by way of a count in conspiracy, gives [plaintiff's] case no more virtue than if he had proceeded against each [defendant] singly.\" Cooper v. O'Connor, 99 F.2d 135, 142 (D.C.Cir.), cert. denied, 305 U.S. 643, 59 S.Ct. 146, 83 L.Ed. 414 (1938). The essence of a conspiracy is an agreement to perform an unlawful act. Eliminating consideration of motive, as the Barr line of cases does, it is hardly unlawful for federal and municipal police officers to agree to pursue in concert lawful means of apprehending a suspect; such an agreement surely would not fall outside the scope of defendants' general law enforcement duties. See id. at 143 (officers' \"combining to perform [law enforcement] acts was lawful, [and] so long as each is proceeding within the scope of his official duties\" plaintiff's suit is barred).15\n\n\n12\nThe district court stressed the \"formative stage\" of the proceedings in denying the defendants' dispositive motions:\n\n\n13\nDiscovery has not yet begun, and thus it is not yet clear whether evidence exists to support the plaintiff's allegations.... [A]t this early stage, dismissal or summary judgment is plainly inappropriate. Having asserted a claim that could potentially defeat the defendants' immunity claim, the plaintiff is entitled to conduct discovery to determine if an issue of material fact exists.\n\n\n14\nMemorandum Order, Civil Action No. 85-0624, at 5-6 (D.D.C. Sept. 25, 1985), J.A. at 59-60. We think the \"sue now, discover if you have a claim later,\" approach is particularly inappropriate in the context at hand.\n\n\n15\nAllowing discovery to proceed so as to enable Martin to establish \"whether evidence exists to support\" his allegation and \"if an issue of material fact exists\" is not the \"firm application\" of Rules 12 and 56 the Supreme Court envisioned in cases of this kind. See Butz, 438 U.S. at 508, 98 S.Ct. at 2911. Discovery is itself one of the burdens from which defendants are sheltered by the immunity doctrine. See Mitchell, 105 S.Ct. at 2815 (absolute immunity is not \"a mere defense to liability\"; its \"essence\" is \"its possessor's entitlement not to have to ... stand trial or face the other burdens of litigation \") (emphasis added); Elliott v. Perez, 751 F.2d 1472, 1478 (5th Cir.1985) (\"subjecting officials to trial, traditional discovery, or both concerning acts for which they are likely immune undercuts the protection from governmental disruption which official immunity is purposed to afford\"); cf. Harlow, 457 U.S. at 814, 102 S.Ct. at 2736 (\"social costs\" against which immunity guards \"include the expenses of litigation [and] the diversion of official energy from pressing public issues\").\n\n\n16\nPlaintiff's burden, when confronted with a properly supported summary judgment motion, is to \"set forth specific facts showing that there is a genuine issue for trial.\" Anderson v. Liberty Lobby, Inc., --- U.S. ----, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986) (emphasis added). A plaintiff's hope that further evidence may develop prior to trial is an \"insufficient basis upon which to justify the denial of [defendants'] motion.\" Contemporary Missions, Inc. v. United States Postal Service, 648 F.2d 97, 107 (2d Cir.1981). This general rule bears particularly firm application in the immunity context in light of the policy basis for shielding public officials from civil suit. Plaintiff Martin has come forward with no specific facts to suggest that defendants, if one does not inquire into their motives, were acting outside the scope of their authorized responsibilities. See Morrison v. City of Baton Rouge, 761 F.2d 242, 248 (5th Cir.1985). And motive inquiry, as we earlier observed, is incompatible with Barr -style absolute immunity.\n\n\n17\nIn sum, the record now stands without \"evidence from which reasonably minded jurors might draw an inference\" that defendants' actions were unprotected by the absolute shield doctrine in point. See Anderson, 106 S.Ct. at 2510. Martin has proffered no such evidence, nor has he even hinted at what such evidence might be. Therefore, defendants' motion for summary judgment dismissing Martin's common law claims must be granted.16III.\n\n\n18\nAs earlier indicated, we follow the route traveled by the parties and the district court in approaching Martin's common law tort claims under an \"absolute immunity\" rubric, and his constitutional tort claims under a \"qualified immunity\" headline. If the double standard is problematic, see 5 K. DAVIS, ADMINISTRATIVE LAW TREATISE 97-100, 109-36 (2d ed. 1984), it is nonetheless the framework High Court precedent currently delineates. See Harlow; Butz, 438 U.S. at 494-98, 98 S.Ct. at 2904-06. Having set out above our analysis of the common law tort/absolute immunity facet of this case, we turn now to the question whether the Capitol Police officers are entitled to summary judgment on their qualified immunity defense to Martin's Constitution-based claims.\n\n\n19\nMartin alleges, in substance, that the decision to arrest and prosecute him, in which the Capitol Police officers participated, was calculated to stop him from vindicating his legal rights. In particular, he asserts that federal and District police force members sought to impede his access to court to recover for his mistreatment by MPD officers on the Klan march day, November 27, 1982. If his allegations are true, he has indeed suffered an injury of constitutional dimension. See, e.g., United States v. Goodwin, 457 U.S. 368, 372, 102 S.Ct. 2485, 2488, 73 L.Ed.2d 74 (1982) (\"[it is] 'patently unconstitutional' [for an official] to pursue a course of action whose objective is to penalize a person's reliance on his legal rights\") (quoting Bordenkircher v. Hayes, 434 U.S. 357, 363, 98 S.Ct. 663, 668, 54 L.Ed.2d 604 (1978)); Silver v. Cormier, 529 F.2d 161, 163 (10th Cir.1976) (right of access to courts is guaranteed by due process clause; official's action designed to impede that right is actionable under 42 U.S.C. Sec. 1983); Dellums v. Powell, 490 F.Supp. 70, 74 (D.D.C.1980), aff'd, 660 F.2d 802 (D.C.Cir.1981) (allegation of malicious prosecution undertaken for express purpose of coercing plaintiffs to refrain from exercising constitutional rights states Bivens -type claim); Jennings v. Shuman, 567 F.2d 1213, 1220 (3d Cir.1977) (malicious abuse of process is \"by definition\" a denial of due process).\n\n\n20\nFor constitutional claims of the kind Martin has attempted to state, the official actor's intent, motive, or purpose is the critical element. Defendants in this case are quite right when they describe Martin's charge that the Capitol Police \"acted unlawfully\" as \"coextensive with [Martin's] allegation of unconstitutional motive, for ... only a bad motive ... could transform [defendants'] otherwise objectively lawful conduct [i.e., their participation in arresting and initiating criminal proceedings against Martin] into unlawful conduct.\" Brief of Appellants at 27 n. 11. We do not agree with defendants' further position, however, that under the Harlow decision now guiding the qualified immunity inquiry, as under Barr -style absolute immunity, an official's state of mind is never relevant, so that Martin is totally disarmed and the Capitol Police must prevail based simply and solely on the \"objective reasonableness\" of their conduct.\n\n\n21\nDefendants' position exposes a fault or vulnerability in the current law of qualified immunity. We explain the problem as we see it. The Supreme Court in Harlow held that \"government officials performing discretionary functions, generally are shielded from liability for civil damages insofar as their conduct does not violate clearly established rights of which a reasonable person would have known.\" Harlow, 457 U.S. at 818, 102 S.Ct. at 2738 (emphasis added); see also Davis v. Scherer, 104 S.Ct. 3012, 3018, 82 L.Ed.2d 139 (1984) (\"Whether an official may prevail in this qualified immunity defense depends upon the 'objective reasonableness of [his] conduct as measured by reference to clearly established law.' No other 'circumstances' are relevant to this issue of qualified immunity.\") (footnotes omitted); Mitchell, 105 S.Ct. at 2816 (defendant entitled to dismissal on qualified immunity plea unless plaintiff states a claim of violation of clearly established law). The district judge in the instant case, endeavoring to heed the High Court's instruction, observed that the constitutional rights in question had \"been established by case precedent for years\"; consequently, she denied defendants' motions for summary judgment.\n\n\n22\nA reasonable law enforcement officer would surely know that an arrest or prosecution undertaken to deter an individual from pursuing bona fide civil claims would trample upon clearly established constitutional rights. Defendants do not suggest otherwise. Their focus is not on Harlow 's \"conduct ... violat[ing] clearly established ... rights\" reference. See Harlow, 457 U.S. at 818, 102 S.Ct. at 2738. Instead, they underscore Harlow 's concern to confine court examination to \"the objective reasonableness of an official's conduct.\" See id.; see also Davis, 104 S.Ct. at 3018 (\"Harlow ... rejected the inquiry into state of mind in favor of a wholly objective standard \") (emphasis added); Mitchell, 105 S.Ct. at 2811 (\"Harlow ... purged qualified immunity doctrine of its subjective components\"). Martin has advanced only \"bare allegations of malice,\" defendants say, and Harlow instructs that such undocumented assertions \"should not suffice to subject government officials either to the costs of trial or to the burdens of broad-reaching discovery.\" Harlow, 457 U.S. at 817-18, 102 S.Ct. at 2738.\n\n\n23\nThe \"clearly established law\" and \"objective reasonableness\" facets of current qualified immunity doctrine tug in opposite directions where, as here, the \"clearly established law\" itself contains a subjective component. If Harlow and progeny do not ever permit inquiry into a government official's state of mind, defendants' motion must be granted forthwith, for in Martin's case, absent unconstitutional motive for the plaintiff's arrest and prosecution, no clearly established law has been violated. We do not think, however, that the Harlow decisional line reaches that far.\n\n\n24\nHarlow involved plaintiff Fitzgerald's allegation that, in violation of his rights under the first amendment, he had been dismissed in \"retaliation for his truthful testimony before a congressional Committee.\" Nixon v. Fitzgerald, 457 U.S. 731, 736, 740, 102 S.Ct. 2690, 2694, 2696, 73 L.Ed.2d 349 (1982). The substantive law governing that claim required Fitzgerald to establish that his protected speech was a \"substantial or motivating factor\" in his dismissal. Mt. Healthy City School District Board of Education v. Doyle, 429 U.S. 274, 287, 97 S.Ct. 568, 576, 50 L.Ed.2d 471 (1977). Had the Court intended its formulation of the qualified immunity defense to foreclose all inquiry into the defendants' state of mind, the Court might have instructed the entry of judgment for defendants Harlow and Butterfield on the constitutional claim without further ado. In fact, the Court returned the case to the district court in an open-ended remand, a disposition hardly consistent with a firm intent to delete the state of mind inquiry from every constitutional tort calculus.\n\n\n25\nOur recent decision in Hobson v. Wilson, 737 F.2d 1, 29-31 (D.C.Cir.1984), devotes some pages to the topic \"Pleading Unconstitutional Motive.\" Our endeavor in Hobson to specify pleading requirements for cases involving allegations of unconstitutional motive is at odds with the \"state-ofmind-is-never-relevant\" interpretation of the qualified immunity doctrine.\n\n\n26\nHobson implicitly recognized that the \"motive never counts\" interpretation would radically alter the existing balance with respect to claims of constitutional deprivations. In effect, the alteration would insulate officials from liability in all cases in which the substantive prescription makes the official's state of mind an essential component of the alleged constitutional violation.17 So major a change, we believe, should not be embraced in the absence of unambiguous instructions from the High Court. Accord Kenyatta v. Moore, 744 F.2d 1179, 1185 (5th Cir.1984) (Harlow \"did not entirely eliminate subjective inquiry from every qualified immunity analysis\"), cert. denied, 471 U.S. 1066, 105 S.Ct. 2141, 85 L.Ed.2d 498 (1985); Harris v. Eichbaum, 642 F.Supp. 1056, 1065 (D.Md.1986) (\"To completely foreclose any inquiry into the officials' subjective motivation in such cases would unfairly deprive potential victims of constitutional abuses of a remedy in a manner which this court is of the opinion the Harlow Court did not intend.\"). See also Halperin v. Kissinger, 807 F.2d 180, 186 (D.C.Cir.1986) (restating this circuit's position that subjective inquiry is not proscribed where plaintiff's claim, as here, rests upon the \"presence of an invalidating intent unrelated to knowledge of the law (e.g., racial or political antagonism)\"). We adhere to Hobson, and hold that when the governing precedent identifies the defendant's intent (unrelated to knowledge of the law) as an essential element of plaintiff's constitutional claim, see Halperin, 807 F.2d at 185-87, the plaintiff must be afforded an opportunity to overcome an asserted immunity with an offer of proof of the defendant's alleged unconstitutional purpose.18\n\n\n27\nAt the same time, we do not lose sight of the goal the Harlow Court had in view when it set an objective standard in the qualified immunity context. That prime goal is the prompt termination of vexatious litigation against public officials. Harlow, 457 U.S. at 815-16, 102 S.Ct. at 2736-37. Mindful of Harlow 's rationale, we attempted in Hobson to strike a fair balance between 1) the \"need to protect officials who are required to exercise their discretion and the related public interest in encouraging the vigorous exercise of official authority,\" Butz, 438 U.S. at 506, 98 S.Ct. at 2911, and 2) the countervailing need to provide a \"realistic avenue for vindication of constitutional guarantees.\" Harlow, 457 U.S. at 814, 102 S.Ct. at 2736. The instant case illustrates the difficulties trial courts may encounter in grappling with appellate opinions on slippery subjects. Aware that our abstract statements, like the Supreme Court's, sometimes elude concrete application, we next essay further amplification and clarification.IV.**\n\n\n28\nIn Celotex Corp. v. Catrett, --- U.S. ----, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986), the Supreme Court emphasized that \"[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed 'to secure the just, speedy, and inexpensive determination of every action.' \" (quoting FED.R.CIV.P. 1). Accord Anderson v. Liberty Lobby, Inc., --- U.S. ----, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). As Catrett and Anderson clarify, it is not the moving party's burden to disprove unsupported claims of his opponent; that consideration has added force when, as in the area of concern in this case, the reasons for swiftly terminating insubstantial lawsuits are particularly strong. See Harlow, 457 U.S. at 814, 102 S.Ct. at 2736.\n\n\n29\nDefendants here, we think it safe to conclude, have said and produced enough in the first instance to cross into summary judgment territory.19 By affidavit, the Capitol Police officers have attested to their good faith. They have shown, in support of the \"objective reasonableness\" of their conduct, the at least arguable existence of probable cause to arrest Martin, and they have cited in corroboration Martin's subsequent indictment and conviction.20 We therefore turn our attention to plaintiff's side. In response to defendants' prima facie showing of entitlement to qualified immunity, has Martin demonstrated, or should he be accorded further opportunity to demonstrate, the existence of a \"genuine issue of material fact\"?\n\n\n30\nAs Hobson indicated, plaintiffs must \"produce some factual support for their claim [of unconstitutional motive] to avert dismissal.\" Hobson, 737 F.2d at 30; see also Elliott, 751 F.2d at 1482 (plaintiff must state \"with particularity all material facts on which he contends he will establish his right to recovery, which will include detailed facts supporting the contention that the plea of immunity cannot be sustained\").21 The factual support plaintiff Martin alleged in response to defendants' motions is contained in these recitations:\n\n\n31\n--the defendants participated in a meeting on November 29, 1982, to review videotapes of the November 27 beating incident;\n\n\n32\n--plaintiff was the \"only person identified and marked for prosecution solely as a result of that review\";\n\n\n33\n--the defendants \"worked closely with\" the U.S. Attorney in deciding to arrest and prosecute plaintiff;\n\n\n34\n--an \"abnormally large and complex team of officers\" effected plaintiff's arrest.\n\n\n35\nPlaintiff's Opposition to Defendants' Motion for Summary Judgment at 10.\n\n\n36\nThis enumeration is insufficient, we hold, to demonstrate the existence of a \"genuine issue\" as to the reasonableness and good faith of the Capitol Police. We recognize that in an ordinary case, where \"the inferences to be drawn from the underlying facts ... must be viewed in the light most favorable\" to the opponent of the summary judgment motion, see United States v. Diebold, 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962), circumstantial evidence of this quality might allow a plaintiff to remain in court. See Anderson, 106 S.Ct. at 2510 (dispute over material fact is \" 'genuine' ... if the evidence is such that a reasonable jury could return a verdict for the nonmoving party\"); see also Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-58, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970) (where party opposing summary judgment motion introduced evidence which would permit a jury to \"infer from the circumstances\" that an actionable conspiracy had taken place, moving party's \"failure to foreclose\" that possibility mandated denial of motion).\n\n\n37\nThis is not, however, an ordinary case. While we hold that plaintiffs may present claims that depend upon proof of unconstitutional motive, we must take care not to reimpose \"precisely the burden Harlow sought to prevent.\" Hobson, 737 F.2d at 29. Before Harlow, \"an official's subjective good faith ha[d] been considered to be a question of fact ... inherently requiring resolution by a jury.\" Harlow, 457 U.S. at 816, 102 S.Ct. at 2737. That approach produced results \"incompatible with [the Supreme Court's] admonition in Butz that insubstantial claims should not proceed to trial.\" Id. at 815-16, 102 S.Ct. at 2737. The Supreme Court's \"strong condemnation of insubstantial suits against government officials,\" Krohn v. United States, 742 F.2d 24, 31 (1st Cir.1984), impels the application of a standard more demanding of plaintiffs when public officer defendants move for summary judgment on the basis of their qualified immunity.\n\n\n38\nWe set out, as best as we can capture it, that more demanding standard. Where the defendant's subjective intent is an essential component of plaintiff's claim, once defendant has moved for pretrial judgment based on a showing of the objective reasonableness of his actions, then plaintiff, to avert dismissal short of trial, must come forward with something more than inferential or circumstantial support for his allegation of unconstitutional motive. That is, some direct evidence that the officials' actions were improperly motivated must be produced if the case is to proceed to trial. See Harris, 642 F.Supp. at 1066.\n\n\n39\nLimitations of this kind on the range of inferences a trial court may draw are not extraordinary. Where an antitrust conspiracy is alleged, for example, \"mistaken inferences ... are especially costly, because they chill the very conduct the antitrust laws are designed to protect.\" Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., --- U.S. ----, 106 S.Ct. 1348, 1360, 89 L.Ed.2d 538 (1986); see also Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 762-64, 104 S.Ct. 1464, 1470-71, 79 L.Ed.2d 775 (1984). Therefore, to survive a motion for summary judgment, a plaintiff \"must present evidence 'that tends to exclude the possibility' that the alleged conspirators acted independently.\" Matsushita, 106 S.Ct. at 1357, quoting Monsanto, 465 U.S. at 764, 104 S.Ct. at 1471; cf. First National Bank v. Cities Service Co., 391 U.S. 253, 280-90, 88 S.Ct. 1575, 1588-93, 20 L.Ed.2d 569 (1968) (circumstantial evidence of conspiracy insufficient to take the case to the jury where inference of nonconspiratorial conduct equally plausible); Smith v. Northern Michigan Hospitals, Inc., 703 F.2d 942, 956 (6th Cir.1983) (inference that anticompetitive conduct resulted from concerted activities and improper motive not permissible where \"persuasive evidence\" of legitimate purpose opposed inference); Paul Kadair, Inc. v. Sony Corp., 694 F.2d 1017, 1027 (5th Cir.1983) (evidence of parallel conduct as basis for inference of conspiracy will not suffice to block summary judgment for defendant unless plaintiff comes forward with \"some 'plus' factor which tends to indicate that the asserted unilateral behavior was not such in fact\").\n\n\n40\nTo recapitulate, plaintiff Martin's fact recitations, as they now stand, are insufficiently probative of the alleged unconstitutional motive to warrant denial of the Capitol Police officers' motion for summary judgment. Martin has indeed produced more than merely \"his own subjective belief that the defendant[s] intended him harm.\" Barker v. Norman, 651 F.2d 1107, 1127 (5th Cir.1981). The record contains no direct evidence, however, that Martin's arrest and prosecution were impermissibly designed to deter him from exercising his legal rights. Thus Martin has not overcome the objective indicia of good faith proffered by defendants.\n\n\n41\nWe do not put down our pen yet, and mandate immediate entry of judgment for the Capitol Police officers, for the approach to pretrial development of cases such as this one was far from clear and certain when the district court made its rulings in Martin's favor. Fairness therefore requires that we afford plaintiff in the case at hand a last chance to make the showing necessary to survive defendants' summary judgment motion.22\n\n\n42\nSummary judgment, in the mine-run of cases, is generally inappropriate \"until all discovery has been completed.\" City of Rome v. United States, 450 F.Supp. 378, 384 (D.D.C.1978), aff'd, 446 U.S. 156, 100 S.Ct. 1548, 64 L.Ed.2d 119 (1980); see also Grove v. Mead School District No. 354, 753 F.2d 1528, 1532 (9th Cir.1985), cert. denied, --- U.S. ----, 106 S.Ct. 85, 88 L.Ed.2d 70 (1986). Reasonable opportunity for discovery, we have commented, \"is particularly important where crucial facts are in the control of the opposing party.\" Black Panther Party v. Smith, 661 F.2d 1243, 1278 (D.C.Cir.1981), vacated as moot, 458 U.S. 1118, 102 S.Ct. 3505, 73 L.Ed.2d 1381 (1982); see also Hobson, 737 F.2d at 30-31 (\"in some circumstances plaintiffs are able to paint only with a very broad and speculative brush at the pre-discovery stage\"). We have noted that creditable pleas of official immunity remove cases from the mine-run category. See supra p. 1435. Nonetheless, we are alert to this reality: Allowing plaintiffs to raise certain claims of unconstitutional motive could become an empty gesture were we to impose a blanket restriction on all discovery prior to the resolution of the qualified immunity issue on summary judgment.23\n\n\n43\nWhile leaving some space for discovery, and, thereafter, the opportunity to replead,24 we reiterate here the necessity, underscored in recent Supreme Court decisions, to minimize the burdens imposed upon government officials:\n\n\n44\nWhat is a federal trial judge to do? One thing he may not do: face it as just another lawsuit in which the notice pleading's liberal policy of F.R.Civ.P. 8 counts on pre-trial discovery to ascertain the factual basis for the claim[.] ... Allowing pretrial depositions, especially those taken adversely of the government official to ferret all of his actions and the reasons therefor ... would defeat and frustrate the function and purpose of the ... immunity[.] ... [U]se of liberal discovery to establish the basis of a claim is directly at odds with the Court's direction in Harlow that government officials entitled to immunity be freed from the burdens, the stress, the anxieties and the diversions of pretrial preparations.\n\n\n45\nElliott, 751 F.2d at 1479 (footnotes omitted); see also Morrison, 761 F.2d at 244 (\"liberal notions of notice pleading must ultimately give way to immunity doctrines that protect us from having the work of our public officials dulled or disrupted by participation in ... the pretrial development of civil lawsuits\"). To balance these concerns properly, district courts will need to employ with particular care and sensibility their large authority to exercise control over discovery. See FED.R.CIV.P. 26(b); 8 C. WRIGHT & A. MILLER, FEDERAL PRACTICE and PROCEDURE Sec. 2036 at 267-68 (1970).\n\n\n46\nThe Federal Rules permit the district judge to defer decision on a summary judgment application to permit the opponent of the motion to obtain affidavits, take depositions or pursue other discovery. FED.R.CIV.P. 56(f).25 The Rules also instruct district judges to allow pleading amendments \"freely\" and at any time \"when justice so requires.\" FED.R.CIV.P. 15(a). Those Rules could be utilized here, with limitations appropriate \"to ensure that [the defendants will not be subjected to] unnecessary involvement in further litigation.\" Black Panther Party, 661 F.2d at 1278. Thus, the district court could permit particularized interrogation of the defendants for the circumscribed purpose of ascertaining whether there is any substance to Martin's assertions concerning when and why the municipal and federal officers decided to arrest and prosecute him. Martin asserts that the decision to pursue him was made at the November 29, 1982 meeting at which MPD and Capitol Police officers reviewed videotapes of November 27 Klan march day events. See supra pp. 1434-35. His interrogatories or questions on deposition, accordingly, should focus precisely on the participants in, and what occurred, at, the November 29 session.\n\n\n47\nUltimately, when summary judgment for defendants on Martin's constitutional tort claims is reconsidered, the district judge should recall that Martin may not take his case to the jury simply because defendants' state of mind is at issue and jurors might disbelieve defendants' testimony. See Anderson, 106 S.Ct. at 2514; cf. Dyer v. MacDougall, 201 F.2d 265 (2d Cir.1952) (L. Hand for the court; J. Frank dissenting). At that point, Martin will have only one way to remain in court under Hobson. If, after the limited discovery we have specified, he has not presented an amended complaint containing \"nonconclusory allegations of evidence of [unconstitutional] intent,\" see Hobson, 737 F.2d at 29, his constitutional tort claims must be dismissed.\n\nCONCLUSION\n\n48\nWhile we part company with the district court in this case, we recognize that the Supreme Court precedent with which we deal in this opinion is still evolving, may be variously interpreted, and sometimes slips from the grasp of lower court (and therefore fallible) judges in the courts of appeals and district courts.26\n\n\n49\nFor the reasons stated in the opinion, we vacate the orders on review and instruct on remand (1) dismissal of the common law tort claims asserted against the Capitol Police officers, because those officers possess absolute immunity from suit on those claims; (2) deferral of decision on defendants' request for summary judgment on the constitutional tort claims alleged in the complaint, pending (a) plaintiff's pursuit of discovery, limited in the manner indicated in this opinion, and (b) an opportunity for plaintiff's prompt presentation thereafter of an amended complaint meeting the standard set out in Hobson, 737 F.2d at 29.\n\n\n50\nOrders vacated and case remanded to the district court for proceedings consistent with this opinion.\n\nHARRY T. EDWARDS, Circuit Judge, concurring:\n\n51\nI concur fully in Judge Ginsburg's thoughtful opinion, including her reading of this court's decision in Hobson v. Wilson, 737 F.2d 1 (D.C.Cir.1984), cert. denied, 470 U.S. 1084, 105 S.Ct. 1843, 85 L.Ed.2d 142 (1985). Contrary to the protestations of our dissenting colleague, the majority opinion is not unfaithful to the teachings of Hobson. The majority opinion merely instructs the district court to permit carefully circumscribed discovery focused precisely on the events of the November 29, 1982 meeting. Allowing such limited discovery in this context is fully consistent with our position in Hobson that plaintiffs who are unable to allege specific facts to support a claim of unconstitutional motive should not be permitted to involve government actors in \"protracted\" discovery and trial. 737 F.2d at 30. It is also fully consistent with this court's twin goals in Hobson: to limit the litigation burdens placed on government officials by \"insubstantial\" lawsuits, while preserving the opportunity for plaintiffs to vindicate constitutional rights. Id. at 29-31. After sharply limited discovery, Martin will be required to allege nonconclusory evidence of unconstitutional intent; if he is unable to sustain this burden, the district court will be required to dismiss his claim, thereby precluding burdensome, protracted discovery and trial. Hobson, which emphasized the need to maintain some flexibility in this context, certainly does not require that we completely foreclose Martin from pursuing a potentially meritorious constitutional claim.\n\n\n52\nSTARR, Circuit Judge, concurring in part and dissenting in part:\n\n\n53\nI concur fully in Sections I and II of the majority opinion. I also agree with much of Section III, which ably treats the difficult issue of the defendants' qualified immunity from Martin's constitutional claims. Notwithstanding these important areas of agreement, I am obliged to part company from the majority with respect to its reading of our decision in Hobson v. Wilson, 737 F.2d 1 (D.C.Cir.1984), cert. denied, 470 U.S. 1084, 105 S.Ct. 1843, 85 L.Ed.2d 142 (1985), and the majority's assessment of Martin's complaint which flows from this discussion. Because Hobson meant what it so plainly said and Martin's complaint presents nothing more than conclusory allegations of improper motive, I respectfully dissent from that portion of the judgment elucidated in Section III.\n\n\n54\n* As is evident from this circuit's recent opinions on the subject, vexing and sensitive questions are posed by application of the \"objective reasonableness\" immunity test of Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982), to claims premised on a government official's motive or purpose. See, e.g., Halperin v. Kissinger, 807 F.2d 180 (D.C.Cir.1986); Smith v. Nixon, 807 F.2d 197 (D.C.Cir.1986). The issue basically calls upon us to balance Harlow 's focus on the need expeditiously to dispose of \"insubstantial\" lawsuits with the preservation of avenues for judicial vindication of constitutional rights.\n\n\n55\nThis circuit's most definitive attempt to date to strike the proper balance is Hobson v. Wilson. In my view, the majority opinion's handling of Hobson is at best grudging and at worst a regrettable failure to adhere to binding precedent. Our opinion in Hobson contained a separate section entitled, \"Pleading Unconstitutional Motive,\" which dealt explicitly with the precise issue in this case. The majority here rightly draws from Hobson a requirement that \"plaintiffs must 'produce some factual support for their claim [of unconstitutional motive] to avert dismissal.' \" Majority Opinion at 1434 (quoting Hobson, 737 F.2d at 30). But that is by no means all that Hobson required. Our opinion in that case also established pleading requirements that the majority, for reasons that are enshrouded in mystery, simply refuses to recognize.\n\n\n56\nIn Hobson, the court carefully noted the potential circumvention of Harlow that could be worked through an allegation of unconstitutional motive:\n\n\n57\nWe recognize that in some instances, plaintiffs might allege facts demonstrating that defendants have acted lawfully, append a claim that they did so with an unconstitutional motive, and as a consequence usher defendants into discovery, and perhaps trial, with no hope of success on the merits. The result would be precisely the burden Harlow sought to prevent.\n\n\n58\n737 F.2d at 29. Animated by this concern, the Hobson court went on to strike a careful balance between the competing interests in this difficult area. To prevent the easy evisceration of Harlow that \"unconstitutional motive\" cases make possible, Hobson determined that the pleading requirements must be carefully drawn in such cases, and, in a passage of critical--I believe controlling--importance to the case at hand, the court undertook to set out a more exacting pleading requirement:\n\n\n59\nAccordingly, in cases involving a claim that defendants acted with an unconstitutional motive, we will require that nonconclusory allegations of evidence of such intent must be present in a complaint for litigants to proceed to discovery on the claim.\n\n\n60\nId. (emphasis added).\n\n\n61\nAs if that statement were not enough, Hobson went on to quote with approval the Second Circuit's standard: \" '[C]omplaints containing only \"conclusory,\" \"vague,\" or \"general allegations\" of a conspiracy to deprive a person of constitutional rights will be dismissed.' \" Id. at 30 (quoting Ostrer v. Aronwald, 567 F.2d 551, 553 (2d Cir.1977)). How this could be plainer I, for one, do not know. Perhaps we could have added, \"And we really mean it,\" to allay any concerns that ambiguity might nonetheless infect our admirably clear language. Cf. Young v. Community Nutrition Institute, --- U.S. ----, 106 S.Ct. 2360, 90 L.Ed.2d 959 (1986). Yet, the majority's analysis omits this pivotal teaching of Hobson: the complaint itself must include \"nonconclusory allegations of evidence of [unconstitutional] intent.\" 737 F.2d at 29 (emphasis added).\n\n\n62\nHobson was, after all, a lengthy, careful, and well-reasoned opinion. And it cannot be gainsaid that this heightened pleading requirement was central to the delicate balance Hobson struck. Even if one has latter-day doubts as to Hobson 's wisdom, the pleading requirement which it so clearly articulates is the law of this circuit. We are bound to follow it. Indeed, just recently we did not hesitate to apply Hobson in other cases of no little moment. See, e.g., Smith v. Nixon, 807 F.2d 197, 200-01 (D.C.Cir.1986). Yet, this carefully-drawn standard, crafted with the strictures of Harlow in mind, is entirely ignored by the majority.\n\n\n63\nIn my view, if Hobson were conscientiously applied to this case, Martin's complaint would plainly fail. It contains nothing that could be construed, even under the most charitable view, as a \"nonconclusory allegation of evidence of [unconstitutional] intent,\" Hobson, 737 F.2d at 29. To the contrary, the complaint alleged in classically vague and conclusory fashion:\n\n\n64\nAs a result of public and media attention to the unprovoked attack on plaintiff, defendants conspired to develop an unlawful scheme to deflect attention from their actions and to deter plaintiff from seeking to vindicate the violation of his rights.\n\n\n65\nFirst Amended Complaint, p 18, J.A. at 26, 31. This broadside is scarcely the stuff of \"nonconclusory allegations.\"\n\n\n66\nThe majority appears to divine a sufficiently nonconclusory allegation in Martin's reference to a meeting of law enforcement officials on November 29, 1982. See Majority Opinion at 1434-35, 1437-38. But there is a problem. Nothing of this November 29 conclave appears in Martin's complaint. He apparently proceeded in utter ignorance of this now-crucial meeting, where the alleged \"get-Martin\" scheme was hatched, until the Government's summary judgment motion, which was supported by an affidavit describing the meeting. Indeed, Martin's only invocation of the November 29 meeting is in his opposition to summary judgment, where he merely asserts that he was the only person identified for prosecution as a result of that meeting. See Plaintiff's Opposition to Federal Defendants' Motion for Summary Judgment, Docket Entry 113, at 10; see also Majority Opinion at 1434-35 (referencing this filing as Martin's factual support for his claims). In my view, the majority properly concludes that this enumeration is \"insufficient\" to create a genuine issue, Majority Opinion at 1435, but then in the next breath the majority permits Martin's claim to go forward to discovery. Fairly and dispassionately viewed, Martin's \"factual\" enumeration is similarly an \"insufficient\" \"nonconclusory allegation\" to withstand Hobson's threshold test, even overlooking for the moment that it comes too late in the litigation process. Cf. Hobson, 737 F.2d at 29 (allegations \"must be present in a complaint\"). Only if one evades--or discards--the language of Hobson to which I have referred can Martin's complaint survive. Accordingly, I pause briefly to examine Hobson for possible qualifications of the \"nonconclusory allegations\" requirement that would justify jettisoning what was, until today, quite clear.\n\nII\n\n67\nTwo passages in Hobson could perhaps be employed to water down the opinion's direct requirement. In my view, however, neither does service as a justification for the majority's decision.\n\n\n68\nFirst, immediately after setting forth the \"nonconclusory allegations\" requirement, the opinion notes that\n\n\n69\n[t]he allegations on this [unconstitutional motive] issue need not be extensive, but they will have to be sufficiently precise to put defendants on notice of the nature of the claim and enable them to prepare a response and, where appropriate, a summary judgment motion on qualified immunity grounds.\n\n\n70\n737 F.2d at 29. While this language could be taken to suggest the appropriateness of a forgiving approach, it obviously cannot be read to reduce the \"nonconclusory allegations\" requirement to a nullity. This is what the majority does, however, by permitting Martin to go forward. Far from being extensive, Martin's \"nonconclusory allegations\" are non-existent. He alleges no specific facts. Instead, he employs the tactic of which Hobson clearly warned, namely \"pleading that [an] act was performed with an intent to violate clearly established constitutional rights and thereby surmounting the threshold test set out in Harlow.\" Id.\n\n\n71\nSecond, toward the end of the \"Pleading Unconstitutional Motive\" section, the Hobson court wrote:\n\n\n72\nIn so holding we do not forget that in some circumstances plaintiffs are able to paint only with a very broad and speculative brush at the pre-discovery stage, and that overly rigid application of the rule we articulate could lead to dismissal of meritorious claims.\n\n\n73\nId. at 30-31. This passage, apart from suggesting that the Hobson court certainly thought it was espousing a \"rule,\" suggests that the shortcomings of Martin's complaint should be overlooked if he was merely painting \"with a very broad and speculative brush.\" This does not, however, forgive him from even painting. Martin fails to allege even broad or speculative \"facts\" regarding the defendants' conduct, offering instead only the bald assertion that the \"defendants conspired to develop an unlawful scheme.\" This brush is broad indeed, and not at all what Hobson had in mind. Otherwise, the Hobson \"exception\" would swallow the rule or be so broad and ill-defined so as to drain the \"rule\" of any meaning. Moreover, the sentence immediately following this picturesque \"painting\" language sets forth the following conclusion:\n\n\n74\nThus, while we hasten to add that district court judges must act cautiously in this regard, and freely give leave to amend an inadequate complaint, we conclude that Harlow requires that merely conclusory allegations of unconstitutional motive, devoid of factual support, must be found lacking and be dismissed.\n\n\n75\nId. at 31 (emphasis added). It therefore appears to me that even if we forgive the inadequacies of Martin's complaint as due to his being forced to \"paint\" broadly and speculatively, the proper remedy would be to grant leave for Martin to amend his complaint, not to expose government officials at this stage to the intrusive processes of discovery.\n\n\n76\nThus, I find nothing in Hobson to undercut the pleading requirements which I should have thought were established beyond peradventure. My view is straightforward. I take Hobson to mean what it twice says: \"merely conclusory allegations of unconstitutional motive, devoid of factual support, must be found lacking and dismissed.\" Id.; see also id. at 29 (\"nonconclusory allegations ... must be present in a complaint\").III\n\n\n77\nHobson set forth a clear standard and outlined how it might typically be applied. The parties in this litigation had ample benefit of our teaching in that case; the opinion issued on June 8, 1984 and Martin's complaint was filed on February 21, 1985.* But while the Government has followed Hobson 's guidelines, Martin has not. Specifically, after noting that the Second Circuit's test from Ostrer was \"more than adequate to address the Harlow concerns,\" see supra pp. 1426-27, the Hobson court continued:\n\n\n78\nWe simply remind our trial courts that some factual allegations must support claims of unconstitutional motive. Plaintiffs who fail to allege any specific facts to support a claim of unconstitutional motive cannot expect to involve Government actors in protracted discovery and trial. On receipt of such a complaint, Government defendants might move for dismissal or, alternatively, for summary judgment. Then plaintiffs must produce some factual support for their claim to avert dismissal.\n\n\n79\nId. at 30. This is precisely the course that the Government has followed. After receipt of Martin's complaint, the Government moved for summary judgment. While the complaint should have been dismissed as an initial matter due to Martin's failure to include \"nonconclusory allegations\" of \"specific facts,\" granting a remand to permit discovery is even more outlandish in the posture of this case.\n\n\n80\nMartin has had ample opportunity to bring to the court's attention any information he possesses regarding the unconstitutional motive that allegedly infected the law enforcement officials' decision to arrest and prosecute him. He has displayed that he has no such \"specific facts.\" Yet, the majority allows Martin to latch onto a fact set forth in the Government's summary judgment motion to carry him into discovery. This is court-sanctioned sandbagging in the extreme.\n\n\n81\nIn sum, the majority's failure to adhere to applicable precedents, both from the Supreme Court and this circuit, adds confusion where clarity is needed, subjects government officials to needless and time-consuming discovery, and permits future plaintiffs to avoid Harlow 's application with a mere conclusory allegation of unconstitutional motive. Claims such as Martin's should not be allowed to proceed to discovery. Rather, as the precedents direct, they should be dismissed. I would take Hobson to mean what it says and move on to the next case.\n\n\n\n*\n Section IV and the dissenting opinion were vacated. See 817 F.2d 144\n\n\n1\n Defendant Richard Xander is employed by the District of Columbia Metropolitan Police Department; at all times relevant to this litigation, Xander was \"on detail\" to the U.S. Capitol Police. See Xander Affidavit at 1, Joint Appendix (J.A.) at 81\n\n\n2\n Amended Complaint at 8-11, J.A. at 33-36\n\n\n3\n The district court stayed discovery, first pending resolution of the defendants' motions, see J.A. at 46, and again pending this appeal. J.A. at 107\n\n\n4\n Amended Complaint p 13, J.A. at 30\n\n\n5\n Id. at p 18, J.A. at 31\n\n\n6\n Memorandum Order, C.A. No. 85-0624, at 12 (D.D.C. July 22, 1985), J.A. at 24\n\n\n7\n Memorandum Order, C.A. No. 85-0624, at 5 (D.D.C. Sept. 25, 1985) (quoting Mcwrnney v. Whitfield, 736 F.2d 766, 770 (D.C.Cir.1984)), J.A. at 59\n\n\n8\n Id. at 6, J.A. at 60 (citation omitted)\n\n\n9\n Memorandum Order, C.A. No. 85-0624, at 6-7 (D.D.C. Oct. 31, 1985), J.A. at 102-03\n\n\n10\n Denial of a claim of absolute immunity is immediately appealable under the \"collateral order\" doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1225, 93 L.Ed. 1528 (1949). See Nixon v. Fitzgerald, 457 U.S. 731, 742-43, 102 S.Ct. 2690, 2697, 73 L.Ed.2d 349 (1982). Denial of a qualified immunity claim is similarly appealable at once. Mitchell v. Forsyth, 472 U.S. 511, 105 S.Ct. 2806, 2815-17, 86 L.Ed.2d 411 (1985)\n\n\n11\n As we observed in McKinney, courts have \"extended the absolute immunity defense to 'executive officials at all levels' of the federal hierarchy\" and to \"a full range of common law delicts.\" McKinney, 736 F.2d at 768-69, quoting Expeditions Unlimited Aquatic Enterprises v. Smithsonian Institution, 566 F.2d 289, 307 (D.C.Cir.1977) (Wilkey, J., concurring), cert. denied, 438 U.S. 915 (1978); see also Butz v. Economou, 438 U.S. 478, 494-95, 98 S.Ct. 2894, 2904-05, 57 L.Ed.2d 895 (1978) (federal officials entitled to absolute immunity from \"state tort claims\")\nThe distinction indicated (but not explained) in Butz between a federal official's absolute immunity from common law claims and qualified immunity from constitutional claims has not been universally well-received. See, e.g., Queen v. Tennessee Valley Authority, 689 F.2d 80, 87 (6th Cir.1982) (Merritt, J., dissenting), cert. denied, 460 U.S. 1082, 103 S.Ct. 1770, 76 L.Ed.2d 344 (1983); Morinville v. Old Colony Cooperative Bank, 579 F.Supp. 1498, 1502-03 (D.R.I.1984); 5 DAVIS, ADMINISTRATIVE LAW TREATISE 116-17 (2d ed. 1984); SCHUCK, SUING GOVERNMENT 89-92 (1983). We think it irrational for a federal court to shield a federal official more broadly than the court would shield \"his state or territorial brother similarly situated.\" Carter v. Carlson, 447 F.2d 358, 371 (D.C.Cir.1971) (Nichols, J., concurring), rev'd on other grounds sub nom. District of Columbia v. Carter, 409 U.S. 418, 93 S.Ct. 602, 34 L.Ed.2d 613 (1973); cf. Harlow v. Fitzgerald, 457 U.S. 800, 818 n. 30, 102 S.Ct. 2727, 2738 n. 30, 73 L.Ed.2d 396 (1982). We do not, however, confront that situation here; while state law enforcement officers generally have been accorded only a qualified immunity from suits alleging false imprisonment, see Pierson v. Ray, 386 U.S. 547, 555-57, 87 S.Ct. 1213, 1218-19, 18 L.Ed.2d 288 (1967); Carter, 447 F.2d at 361-65, absolute immunity is the general common law rule where malicious prosecution is alleged. Cooper v. O'Connor, 99 F.2d 135, 137-42 (D.C.Cir.), cert. denied, 305 U.S. 643, 59 S.Ct. 146, 83 L.Ed. 414 (1938); see Laughlin v. Garnett, 138 F.2d 931, 931 (D.C.Cir.1943), cert. denied, 322 U.S. 738, 64 S.Ct. 1055, 88 L.Ed. 1572 (1944). See generally White v. Towers, 37 Cal.2d 727, 730-33, 235 P.2d 209, 211-14 (1951) (reviewing cases); Annot., Civil Liability of Law Enforcement Officers for Malicious Prosecution, 28 A.L.R.2d 646, 649-51 (1953).\n\n\n12\n Memorandum Order, C.A. No. 85-0624, at 12 (D.D.C. July 22, 1985), J.A. at 24\n\n\n13\n Memorandum Order, C.A. No. 85-0624, at 4 (D.D.C. Sept. 25, 1985), J.A. at 58\n\n\n14\n See Amended Complaint, p 7, 9-10, 25-27, J.A. at 29-33\n\n\n15\n Martin argues that \"[i]t is one thing to say that a police officer who engages in otherwise proper activities for an improper purpose is immune from common law tort liability. It is quite another to suggest that two or more officers may conspire together for an unlawful purpose and still obtain immunity.\" Brief of Appellee at 15 n. 15. Our Cooper precedent, however, does indeed suggest that one of these things is like the other. The distinction Martin proposes, moreover, would open the door to artful pleading of conspiracy as a means to circumvent the immunity bar. Furthermore, we see no logical justification for treating differently an agreement to perform acts to which absolute immunity attaches, on the one hand, and the individual acts themselves, on the other hand, absent reason to believe that the very agreement (once more, leaving aside what motivated it) was somehow unauthorized\n\n\n16\n As an additional ground for refusing to dismiss the common law claims, the district court observed: \"[P]laintiff's claims clearly imply that the defendants resorted to 'manifestly excessive means' to achieve their objectives.\" Order, Sept. 25, 1986, J.A. at 59 (quoting McKinney, 736 F.2d at 770)\nWe are uncertain what \"means\" the district court had in view. In McKinney, the defendant supervisor had used unauthorized means--physical force--to achieve an otherwise authorized objective. We held that the supervisor forfeited his absolute immunity pro tanto; the employee allegedly hurt by the use of force could sue for assault and battery. Id. at 769, 771; see also Bishop v. Tice, 622 F.2d 349 (8th Cir.1980). In the instant case, the district court apparently thought that the alleged conspiracy among defendants constituted \"excessive means\" within the meaning of McKinney. Our McKinney decision does not bear so broad a construction. In contrast to the literal arm twisting alleged as the improper means in McKinney, coordinating federal and local police efforts to arrest and prosecute persons in the District of Columbia is not an objectively identifiable impermissible mode of behavior.\nAnother possible interpretation of the district court's position--that the defendants' allegedly improper motives constitute \"excessive means\"--is similarly infirm. Such an interpretation would subvert the protection afforded even improperly motivated actions by the absolute immunity doctrine. McKinney homed in on directly observable behavior--physical force visited on desk employees by supervisors. The opinion in no way suggests the propriety of a state of mind inquiry to defeat an absolute immunity claim.\nMartin's assertion that he was \"arrested by an abnormally large and complex team of officers ... even though [he] had only one prior criminal conviction ... and was charged with a relatively minor offense not involving physical violence,\" Plaintiff's Opposition to Defendants' Motion for Summary Judgment at 10, comes closer to the McKinney mark. However, not only did plaintiff fail to provide factual support for his claim that the arresting team was \"abnormally large and complex,\" he failed to demonstrate a sufficient nexus between the allegedly excessive means and his common law claims. Even if the arresting officers forfeited their immunity with respect to \"th[at] specific conduct,\" see McKinney, 736 F.2d at 770, the charge that the arrest force was undue does not tightly relate to Martin's claims of malicious prosecution and abuse of process.\n\n\n17\n A government official's motive or purpose is often an essential element of plaintiff's prima facie constitutional claim. See, e.g., Washington v. Davis, 426 U.S. 229, 239, 96 S.Ct. 2040, 2047, 48 L.Ed.2d 597 (1976) (discriminatory intent required to establish violation of equal protection guarantee); Estelle v. Gamble, 429 U.S. 97, 104-05, 97 S.Ct. 285, 291, 50 L.Ed.2d 251 (1976) (\"deliberate indifference\" required to show violation of prohibition against cruel and unusual punishment); Wayte v. United States, 470 U.S. 598, 105 S.Ct. 1524, 1531, 84 L.Ed.2d 547 (1985) (selective prosecution claim must be supported by evidence of discriminatory purpose). See generally Note, Qualified Immunity for Government Officials: The Problem of Unconstitutional Purpose in Civil Rights Litigation, 95 YALE L.J. 126, 134-36 (1985); Kirkpatrick, Defining a Constitutional Tort Under Section 1983: The State-of-Mind Requirement, 46 U. CIN.L.REV. 45 (1977). In the words of one court:\n[A] police officer does not violate a citizen's constitutional rights by accidentally running into him on the street ... unless that police officer was trying to prevent the citizen from arriving at the polls to vote.... If the officer accidentally ran into a march of peaceful protestors, mangling and killing several, his careless driving alone would amount to no more than a State tort.... If, however, he swerved to frighten the protestors, of whom he disapproved, his accidental bruising of even one makes out a First Amendment violation under [42 U.S.C.] Sec. 1983, being the natural result of an unconstitutional intent.\nDandridge v. Police Dep't of Richmond, 566 F.Supp. 152, 160-61 (E.D.Va.1983) (citations omitted).\n\n\n18\n We emphasize that this holding applies only to instances in which the controlling substantive law makes the official's state of mind an essential element of plaintiff's constitutional claim. Where that is not the case, Harlow should rule out subjective inquiry\n\n\n**\n Section IV was vacated on grant of rehearing en banc\n\n\n19\n It is not entirely clear which party bears proof burdens on the various issues subsumed within the qualified immunity inquiry. The Supreme Court may have intended to place on plaintiffs the burden of establishing that the rights at issue were \"clearly established\" at the time of the alleged violation. See Davis, 104 S.Ct. at 3021 (\"A plaintiff ... may overcome the defendant official's qualified immunity only by showing that those rights were clearly established\") (emphasis added). But see Ellsberg v. Mitchell, 709 F.2d 51, 66-69 (D.C.Cir.1983), cert. denied, 465 U.S. 1038, 104 S.Ct. 1316, 79 L.Ed.2d 712 (1984) (placing burden on defendant). At the same time, the Court in Gomez v. Toledo, 446 U.S. 635, 100 S.Ct. 1920, 64 L.Ed.2d 572 (1980), held that qualified immunity is an affirmative defense which defendants must plead on pain of preclusion; several lower courts, citing the Supreme Court's statement in Gomez that \"[t]he existence of a subjective belief will frequently turn on factors which a plaintiff cannot reasonably be expected to know,\" id. at 641, 100 S.Ct. at 1924, had placed on defendants the burden of proving good faith. See Dellums v. Powell, 566 F.2d 167, 175-76 (D.C.Cir.1967). See generally Gildin, The Standard of Culpability in Section 1983 and Bivens Actions: The Prima Facie Case, Qualified Immunity and the Constitution, 11 HOFSTRA L.REV. 557, 595-96 (1983), and cases cited therein. It may be that the most appropriate solution to the state of mind proof burden in these cases is a middle way, i.e., the initial burden of production would be cast on the defendant, while the ultimate burden of persuasion would rest with the plaintiff\n\n\n20\n See Contemporary Missions Inc. v. United States Postal Service, 648 F.2d 97, 107 (2d Cir.1981) (where defendants \"produced affidavits setting forth reasonable grounds for their actions and, in addition, attested that they acted in good faith ... [they] sustained their burden of demonstrating that no genuine issue of material fact existed\")\nA magistrate's probable cause determination, the Supreme Court has held, does not conclusively establish the objective reasonableness of a police officer's search or arrest. Malley v. Briggs, --- U.S. ----, 106 S.Ct. 1092, 89 L.Ed.2d 271 (1986). As the court of appeals decision affirmed by the Supreme Court indicated, however, the magistrate's determination ordinarily should carry some weight in the immunity inquiry. See Briggs v. Malley, 748 F.2d 715, 721 (1st Cir.1984) (where sufficiency of facts in affidavit \"fall[s] into the grey area appropriate for judicial determination,\" magistrate's probable cause finding \"will insulate the officer from liability\"); see also id. at 722 (magistrate's finding \"might be admissible as expert evidence of [defendant's] reasonableness\") (Aldrich, J., concurring); cf. United States v. Leon, 468 U.S. 897, 922-24 & n. 23, 104 S.Ct. 3405, 3421-22 & n. 23, 82 L.Ed.2d 677 (1984) (officer's reliance on magistrate must still be \"objectively reasonable,\" for determination of which \"all of the circumstances ... may be considered\").\n\n\n21\n Although the question came up as a pleading matter in Hobson, the essential inquiry remains the same whether it is posed under FED.R.CIV.P. 12(b)(6) at the threshold of the proceedings (dismissal for failure to state a claim upon which relief can be granted), or under FED.R.CIV.P. 50(b) at the end of the adjudication (judgment n.o.v.). The inquiry is whether there exists no genuine issue of material fact that would permit a reasonable jury to find against the moving party. See The Supreme Court, 1985 Term--Leading Cases, 100 HARV.L.REV. 100, 250, 257 (1986) (comment on Celotex and Anderson )\n\n\n22\n Our dissenting colleague, observing that \"Martin has been represented throughout by highly competent counsel,\" would cut Martin off at this pass, with absolutely no chance for discovery, and no opportunity thereafter to replead. See Dissent at 1441-42 & n.*. We fear that our colleague, from his lofty appellate perch, has overlooked litigation's exigencies. A highly competent district judge, diligently endeavoring to follow our Hobson precedent, allowed Martin to proceed to uncircumscribed discovery. Should Martin have objected and insisted on a more guarded ruling?\nWe raise here, in addition, other doubts we have about the sense and sensitivity of the dissenting view. If the able district judge, a prime addressee of our Hobson opinion, did not fully grasp our meaning, might it be that we were less clear than the dissent supposes? Might it also be that a judge-made rule emerging in one context--e.g., the Hobson appeal, where discovery had long since been completed and where the narrow question of the permissible scope of discovery was at the periphery of the court's field of view--requires adjustment when applied in a different context? Is that not the way case law develops, through constant accretion, erosion, and correction, as judges sensibly respond to the varieties of human experiences that troop before our courts?\n\n\n23\n Harlow directed that \"[u]ntil this threshold immunity question is resolved, discovery should not be allowed.\" 457 U.S. at 818. The post-Harlow Mitchell decision, however, indicates the Court's awareness that some opportunity for discovery may be necessary for the just resolution of the threshold question. See Mitchell, 105 S.Ct. at 2815-16 (\"Harlow emphasizes that even such pretrial matters as discovery are to be avoided if possible [.] ... Even if the plaintiff's complaint adequately alleges the commission of acts that violated clearly established law, the defendant is entitled to summary judgment if discovery fails to uncover evidence sufficient to create a genuine issue as to whether the defendant in fact committed those acts.\") (emphasis added)\nIn two recent cases, we applied the Hobson pleading standard to deny plaintiffs an opportunity to conduct further discovery where they had failed to set forth \"nonconclusory allegations of evidence of [unconstitutional] intent\" in their complaints. Smith v. Nixon, 807 F.2d 197, 200 (D.C.Cir.1986), quoting Hobson v. Wilson, 737 F.2d 1, 29 (D.C.Cir.1984); Ellsberg v. Mitchell, 807 F.2d 204, 207 (D.C.Cir.1986). In the Smith and Ellsberg cases, the defendants had asserted a national security justification for their allegedly unlawful conduct, and we held that their entitlement to qualified immunity turned exclusively on the \"objective reasonableness\" of their actions. Smith, 807 F.2d at 200-201; Ellsberg, 807 F.2d 207; see Halperin v. Kissinger, 807 F.2d 180, 185-88 (D.C.Cir.1986). In contrast, the instant defendants' qualified immunity claims can be defeated by direct evidence of their subjective intent--evidence which, as noted above, is now in the defendants' sole possession. We may, without undermining Smith and Ellsberg, permit sharply limited discovery in the present context so as to avoid \"overly rigid application\" of the Hobson pleading rule. Hobson, 737 F.2d at 31.\n\n\n24\n The Dissent would disallow this last chance; our colleague \"would take Hobson to mean what [he] says [it means] and move on to the next case.\" Dissent at 8. There may be no next case under the Dissent's analysis, however\nOur colleague reads Hobson with the rigidity Hobson's author cautioned against. See Hobson, 737 F.2d at 30-31. The Dissent appears to insist on an invulnerable complaint at the outset, despite the instruction of the Federal Rules that \"leave [to amend] shall be freely given [at any time] when justice so requires.\" FED.R.CIV.P. 15(a). Similarly, the Dissent seemingly rules out entirely the rule that summary judgment may be deferred pending a discovery opportunity for the opponent of peremptory dismissal. See FED.R.CIV.P. 56(f). A \"get-Martin\" scheme, if one existed, could be brought to light, the Dissent apparently would allow, only in the unlikely event that a police officer volunteered the information, or the equally unlikely happenstance that an eavesdropper heard and reported what the officers said. Cf. Vaise v. Delaval, 1 Term Rep. 11, 99 Eng.Rep. 944 (K.B. 1785).\n\n\n25\n The Rule reads:\nWhen Affidavits are Unavailable. Should it appear from the affidavits of a party opposing the motion that he cannot for reasons stated present by affidavit facts essential to justify his opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just.\n\n\n26\n Cf. Brown v. Allen, 344 U.S. 443, 540, 73 S.Ct. 397, 97 L.Ed. 469 (1952) (Jackson, J., concurring) (Supreme Court is \"not final because [it is] infallible, but ... infallible only because [it is] final\")\n\n\n*\n This case does not involve a pro se litigant, a situation where a pleading requirement such as this might be less stringently applied consistent with other rules governing the interpretation of pro se complaints. See, e.g., Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972). Mr. Martin has been represented throughout by highly competent counsel\n\n\n"} -{"text": "932 F.2d 1317\nKnowlton MERRITT, Plaintiff-Appellee,v.John E. MACKEY, Defendant-Appellant,andJerry Howard, et al., Defendant.Knowlton MERRITT, Plaintiff-Appellant,v.John E. MACKEY; Steve Vincent, et al., Defendants-Appellees.\nNos. 89-35233, 89-35270.\nUnited States Court of Appeals,Ninth Circuit.\nArgued and Submitted Sept. 12, 1990.Decided May 8, 1991.\n\nStephen L. Brischetto, Brischetto & Baldwin, Portland, Or., for plaintiff-appellee-appellant.\nRichard A. Olderman, Civ. Div., U.S. Dept. of Justice, Washington, D.C., for defendants-appellants-appellees.\nAppeal from the United States District Court for the District of Oregon.\nBefore CANBY, and TROTT, Circuit Judges, and LEGGE,* District Judge.\nCANBY, Circuit Judge:\n\n\n1\nJohn Mackey appeals the district court's judgment, following a bench trial on remand from this court, in favor of Knowlton Merritt in Merritt's action against Mackey, et al. Merritt's action charges that Mackey, a federal official, violated his due process rights in improperly coercing Merritt's private employer to fire him. Merritt cross-appeals. We affirm all of the rulings of the district court except for the award of a multiplier in the award of attorney's fees.\n\nBACKGROUND\n\n2\nMerritt is a former counselor supervisor with Klamath Alcohol and Drug Abuse, Inc. (\"KADA\"), a private nonprofit corporation. He was fired from that position, partly as a consequence of actions taken by Mackey and Steven Vincent. Mackey was the Area Alcoholism Coordinator for Indian Health Services (\"IHS\"), a federal agency. Vincent was a Regional Alcohol Specialist with the State of Oregon's Mental Health Division. Mackey and Vincent had jointly evaluated the management of KADA, and had concluded that Merritt had failed to perform adequately. Their report recommended that further funding of KADA be conditioned on Merritt's dismissal. The KADA Board of Director's dismissed Merritt without a pre-termination hearing. The circumstances of this dispute are related in this court's earlier decision in this case, Merritt v. Mackey, 827 F.2d 1368 (9th Cir.1987) (\"Merritt I\" ).\n\n\n3\nMerritt brought this action against several defendants alleging various claims. Among those claims was one against Vincent under 42 U.S.C. Sec. 1983, and one against Mackey pursuant to Bivens v. Six Unknown Agents of the Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). Both of those claims alleged deprivation of liberty and property without due process. The district court granted summary judgment in favor of Vincent and Mackey on the ground that Merritt had not stated a claim for deprivation of liberty upon which relief could be granted. The court also decided, after this first trial, that Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), precluded Merritt's claim that his property interest in continued employment could not be extinguished without a pretermination hearing. Finally, the district court ruled that Vincent and Mackey were protected from liability by the doctrine of qualified immunity.\n\n\n4\nOn appeal, a divided panel of this court affirmed the grant of summary judgment as to the liberty deprivation claims, but reversed and remanded as to the property deprivation claims. Merritt I, 827 F.2d 1368 (9th Cir.1987). Merritt I first held that Merritt had a protected property interest in his continued employment with KADA. It then concluded that under the circumstances of this case, Merritt's right to due process was not satisfied by a posttermination remedy, and that he was entitled to \"a meaningful hearing at a meaningful time\" to challenge his dismissal. Id. at 1371. This court also held that Vincent and Mackey were not entitled to qualified immunity because they knowingly acted outside the scope of their employment and violated a clearly established due process right. Id. at 1372-73.\n\n\n5\nOn remand, the district court ruled that Merritt was entitled to a pretermination hearing and that his due process rights were violated because he had not received such a hearing. The court also found, however, that Merritt would have been terminated even if he had been provided with an adequate predeprivation hearing. Further, the district court concluded that Vincent and Mackey were not entitled to qualified immunity, under this court's mandate in Merritt I.\n\n\n6\nAfter a bench trial, the district court awarded Merritt $35,000 in damages as compensation for emotional distress arising from the due process deprivation. It concluded that he was not entitled to either lost wages or punitive damages because he would have been terminated even if he had been afforded a pretermination hearing. In addition, the court awarded Merritt approximately $100,000 in attorney's fees pursuant to 42 U.S.C. Sec. 1988. The court reasoned that Mackey, although a federal official, was liable under Section 1988 because he acted jointly with Vincent, a state official, to violate Merritt's rights. The court awarded Merritt fees for 90% of the hours he requested at $125 per hour. It also enhanced the fee by one-third.\n\n\n7\nMackey appeals the district court's rulings that he is not entitled to qualified immunity, and that he is liable for attorney's fees under 42 U.S.C. Sec. 1988. He also challenges as excessive the amount of damages and attorney's fees awarded. Merritt cross-appeals,1 contending that the district court failed to recognize that his rights to due process were violated not only by the deprivation of a timely hearing, but also by unreasonable governmental interference with his property rights in his chosen occupation. Consequently, Merritt claims, the court improperly denied him damages for lost wages and punitive damages. We affirm the district court as to all issues raised by these appeals.\n\nANALYSIS\nI. Qualified Immunity\n\n8\nIn Merritt I, this court held that neither Vincent nor Mackey was entitled to qualified immunity because \"their conduct exceeded the scope of their authority and because they violated Merritt's clearly established constitutional rights.\" 827 F.2d at 1373. On remand, the district court held that this court's prior holding was \"the law of the case.\" Mackey now asks this court to reconsider the issue, and hold that Vincent and Mackey were entitled to qualified immunity. We agree with the district court that the ruling in Merritt I is the law of the case and decline to address the merits of qualified immunity, except as necessary to determine whether we ought to leave the matter as settled by Merritt I.\n\n\n9\n\"[U]nder the 'law of the case' doctrine, one panel of an appellate court will not as a general rule reconsider questions which another panel has decided on a prior appeal in the same case.\" Kimball v. Callahan, 590 F.2d 768, 771 (9th Cir.), cert. denied, 444 U.S. 826, 100 S.Ct. 49, 62 L.Ed.2d 33 (1979). The doctrine is discretionary, not mandatory. United States v. Houser, 804 F.2d 565, 567 (9th Cir.1986). It merely expresses the practice of courts generally to refuse to reopen that which has been decided, and is not a limitation of the courts' power. Id. (citing Messenger v. Anderson, 225 U.S. 436, 444, 32 S.Ct. 739, 740, 56 L.Ed. 1152 (1912)); United States v. Maybusher, 735 F.2d 366, 370 (9th Cir.1984), cert. denied, 469 U.S. 1110, 105 S.Ct. 790, 83 L.Ed.2d 783 (1985). \"[T]he prior decision of legal issues should be followed on a later appeal 'unless the evidence on a subsequent trial was substantially different, controlling authority has since made a contrary decision of the law applicable to such issues, or the decision was clearly erroneous and would work a manifest injustice.' \" Kimball, 590 F.2d at 771-72 (citing White v. Murtha, 377 F.2d 428, 431 (5th Cir.1967)).2\n\n\n10\nMackey contends that two of these exceptions apply here. First, he contends that Anderson v. Creighton, 483 U.S. 635, 107 S.Ct. 3034, 97 L.Ed.2d 523 (1987), effected a change in the appropriate standard for determining qualified immunity, which the panel in Merritt I failed to consider. Second, he contends that the decision in Merritt I court was clearly erroneous and would work a manifest injustice. We disagree with both arguments.\n\nA. A change in the law\n\n11\nAnderson v. Creighton did not change controlling authority on this issue so as to require us to reconsider the merits of Mackey's qualified immunity defense. First, Anderson was decided three months prior to Merritt, so there was no intervening change of law. More important, Anderson did not change the controlling standard as Mackey suggests. Anderson clarified and refined the law articulated in Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). In Merritt I, this court relied on Harlow. Examination of its analysis indicates that it complies with the Anderson \"clarification.\"\n\n\n12\nThe Supreme Court in Anderson said, \"our holding today does not extend official qualified immunity beyond the bounds articulated in Harlow and our subsequent cases....\" 483 U.S. at 641-42 n. 3, 107 S.Ct. at 3039-40 n. 3. It was Harlow that first established that qualified immunity is based on the \"objective legal reasonableness\" of the defendant's conduct. 457 U.S. at 818-19, 102 S.Ct. at 2738-39.\n\n\n13\nThe Merritt I opinion recognized that immunity attaches to official action unless that action \" 'violate[s] clearly established statutory or constitutional rights of which a reasonable person would have known.' \" 827 F.2d at 1373 (quoting Harlow, 457 U.S. at 818, 102 S.Ct. at 2738). Anderson emphasized the level of specificity at which that inquiry must be made, requiring that \"[t]he contours of the right must be sufficiently clear that a reasonable official would understand that what he is doing violates that right.... [I]n the light of pre-existing law the unlawfulness must be apparent.\" Anderson, 483 U.S. at 640, 107 S.Ct. at 3039. Anderson goes on to require that the unlawfulness of the official's activity must be apparent in light of \"the circumstances with which [the official] was confronted.\" Id.\n\n\n14\nThe Merritt I court had the Anderson decision before it, and the language of its opinion indicates that it exercised the specificity of scrutiny required by Anderson:\n\n\n15\nVincent and Mackey testified that they knew they had no authority to require KADA to fire Merritt. Because they knowingly acted outside the scope of their authority, they are not entitled to qualified immunity.... Vincent and Mackey should have known that they could not cause Merritt's summary dismissal without violating his due process rights.\n\n\n16\nMerritt I, 827 F.2d at 1373.\n\nB. Clearly erroneous and manifest injustice\n\n17\nWe also reject Mackey's other argument that the Merritt I qualified immunity holding should not be considered the law of the case. Mackey contends that it is \"manifestly unjust\" to hold that he violated a clearly established right, when the dissent in Merritt I strongly disputed the very existence of that right. See Merritt I, 827 F.2d at 1374. In essence, Mackey asks how a right can be \"clearly established\" for government officials when appellate judges cannot agree to its existence.3\n\n\n18\nMackey poses a question with seductive implications for qualified immunity doctrine, but it is not the question upon which this appeal should turn. We are not presented as a matter of first impression with the question of which view in Merritt I--that of the majority or that of the dissent--was correct. That issue was thrashed out in Merritt I itself, and we owe a certain deference to the view that prevailed. The question before us on this appeal is whether the majority decision in Merritt I is so clearly incorrect that we are justified in refusing to regard it as the law of the case. See United States v. Houser, 804 F.2d at 568.\n\n\n19\nAlthough there was substantial precedential support for the Merritt I majority opinion,4 and it has been cited approvingly since,5 Mackey contends that the very fact of a dissent establishes manifest error in the majority's conclusion that the right in issue was clearly established. We cannot accord a dissent that much probative power.\n\n\n20\nDissent or no, two judges ruled that the right in question was clearly established and that reasonable officials would have known that their actions infringed that right. Those two judges may well have been correct. To hold that they could not have been correct simply because a dissent was filed would be to hold the majority hostage to the dissent. One judge would have a veto that would prevent any majority of two from denying a claim of qualified immunity.\n\n\n21\nThe dissent alone does not compel us, therefore, to conclude that the decision in Merritt I was incorrect. Nor do we approach the qualified immunity question as if it were being presented for the first time. At this stage of the litigation, it is incumbent upon Mackey to convince us not only that the majority decision in Merritt I was wrong, but that it was clearly wrong. This he has failed to do. Mackey has not demonstrated clear error by the Merritt I majority in applying this principle to the specific facts of his case. We accordingly find no justification for departing from our usual policy of adhering to the law of the case.6\n\nII. Damages\nA. Merritt's appeal\n\n22\nThe district court awarded Merritt damages for emotional suffering, but did not award him lost wages or punitive damages. Merritt cross-appeals, arguing that the district court erroneously identified the due process violation which he suffered.\n\n\n23\nThe district court confined its finding of a due process violation to KADA's failure to provide Merritt with a pretermination hearing. That finding was based on this court's holding in Merritt I that Merritt \"was deprived of his property interest in continued employment when the state and federal agents intentionally coerced KADA to fire him.\" Merritt I, 827 F.2d at 1372. Merritt contends that such a holding requires that his compensable injury includes, not only the deprivation of his right to a pretermination hearing, but also the deprivation of his property interest in continuing employment itself.\n\n\n24\nThe district court found, however, that Merritt would have been fired regardless of Mackey's involvement. Unless that finding is clearly erroneous, it limits Merritt's damages to those arising from the denial of procedural due process only, and precludes an award of damages for deprivation of the employment itself, a loss not caused by Mackey. Carey v. Piphus, 435 U.S. 247, 260-66, 98 S.Ct. 1042, 1050-54, 55 L.Ed.2d 252 (1977); See Alexander v. City of Menlo Park, 787 F.2d 1371, 1375 (9th Cir.1986), cert. denied, 479 U.S. 1032, 107 S.Ct. 879, 93 L.Ed.2d 833 (1987).\n\n\n25\nWe cannot say that the district court's finding that Merritt would have been fired anyway was clearly erroneous. Although the evidence conflicted, there was ample support for the district court's finding. We therefore conclude that the district court did not err in refusing to award Merritt damages for his loss of employment.7\n\nB. Mackey's appeal\n\n26\nMackey also appeals the district court's damage award. He contends that Merritt is entitled to no damages, in spite of his loss of a pretermination hearing, because any injury sustained was caused by his loss of employment. Mackey contends that because the district court found that Merritt's discharge was justified and would have occurred regardless of Mackey's intervention, he is liable for no damages.\n\n\n27\nMerritt can recover for mental and emotional distress caused by the denial of procedural due process if he proves actual injury. Carey v. Piphus, 435 U.S. 247, 264, 98 S.Ct. 1042, 1052, 55 L.Ed.2d 252 (1977); Chalmers v. City of Los Angeles, 762 F.2d 753, 761 (9th Cir.1985). Here, the district court reviewed extensive evidence of actual damages arising from Merritt's \"being terminated without adequate opportunity to be heard or to protest his termination.\" It found Merritt's evidence credible, and awarded $35,000 damages. The district court thus awarded damages, not for Merritt's loss of employment, but for his denial of a hearing before he was discharged.\n\n\n28\nWe review the district court's computation of damages for clear error. See Galindo v. Stoody Co., 793 F.2d 1502, 1516 (9th Cir.1986). In light of the evidence offered by Merritt, we are not prepared to say that the district court's award was clearly erroneous.\n\nIII. Attorney's Fees\n\n29\nThe district court ordered Mackey, as well as Vincent, to pay Merritt's attorney's fees, in the amount of $99,856.39, pursuant to 42 U.S.C. Sec. 1988. Mackey contends that, as a federal official, he is not liable for attorney's fees under 42 U.S.C. Sec. 1988, and, alternatively, that the fees awarded here were excessive.\n\n\n30\nA. Mackey's liability for fees under Sec. 1988\n\n\n31\nSection 1988 allows the court to award attorney's fees to the prevailing party in an action brought under 42 U.S.C. Sec. 1983. Actions filed under Sec. 1983 require state action. Mackey, as an individual or as a federal official, is, thus, exempt from Section 1988 liability unless he \"conspire[d] with or participate[d] in concert with state officials who, under color of state law, act[ed] to deprive a person of protected rights.\" Scott v. Rosenberg, 702 F.2d 1263, 1269 (9th Cir.1983), cert. denied, 465 U.S. 1078, 104 S.Ct. 1439, 79 L.Ed.2d 760 (1984). Such liability will not attach unless \"the state or its agents significantly participated in the challenged activity.\" Gibson v. United States, 781 F.2d 1334, 1343 (9th Cir.1986), cert. denied, 479 U.S. 1054, 107 S.Ct. 928, 93 L.Ed.2d 979 (1987).\n\n\n32\nThe district court found that Mackey was acting under color of state law because he was involved in a joint action with Vincent, a state official. \"Historical\" factual findings underlying that holding are reviewed for clear error. The district court found that \"Mackey and Vincent jointly evaluated KADA (and plaintiff), and jointly agreed to require plaintiff's termination.\" Opinion, Mar. 6, 1989. The final report resulting in Merritt's termination (and this litigation) was issued under state letterhead, signed by both Mackey and Vincent. The district court's finding was not clearly erroneous; the form of that report accurately reflected what the investigation was--a joint collaboration between a state and federal official.\n\n\n33\nWe review de novo the district court's application of these facts to statutory and precedential authority leading to the district courts finding that \"state action\" was present here. United States v. McConney, 728 F.2d 1195, 1199-1204 (9th Cir.) (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984). We agree with the district court that Mackey is liable for attorney's fees under Section 1988, because he acted in concert with Vincent, a state official. Vincent \"significantly participated in the challenged activity.\" Gibson v. United States, 781 F.2d 1334, 1343 (9th Cir.1986), cert. denied, 479 U.S. 1054, 107 S.Ct. 928, 93 L.Ed.2d 979 (1987).8\n\nB. Amount of attorneys' fees awarded\n\n34\nMackey alternatively argues that the fee award of nearly $100,000 was excessive. We review this award for an abuse of discretion. See Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 1941, 76 L.Ed.2d 40 (1983); Blum v. Stenson, 465 U.S. 886, 898-901, 104 S.Ct. 1541, 1548-50, 79 L.Ed.2d 891 (1984). The district court provided a thorough and thoughtful explanation of the lodestar fee at which it arrived. It discounted for hours that it deemed to be unreasonable. We reject Mackey's claim that the district court abused its discretion in failing to find that more hours were excessive.\n\n\n35\nWe conclude, however, that the district court granted a multiplier of 1.33 on improper grounds. Even though the district court properly recognized that some of the factors derived from Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir.1975), cert. denied, 425 U.S. 951, 96 S.Ct. 1726, 48 L.Ed.2d 195 (1976), were properly subsumed in the lodestar figure, see Cabrales v. County of Los Angeles, 864 F.2d 1454, 1464 (9th Cir.1988), it nevertheless relied on impermissible grounds for enhancement. The time involved is clearly subsumed in the lodestar figure, and the difficulty of the case is similarly inappropriate as a ground of enhancement. See Fadhl v. City and County of San Francisco, 859 F.2d 649, 651 n. 2 (1988). Finally, the district court relied upon the risk inherent in Merritt's case. A majority of the Supreme Court has held, however, that risk in the individual case is not a proper ground for a multiplier. Pennsylvania v. Delaware Valley Citizens' Council, 483 U.S. 711, 734, 107 S.Ct. 3078, 3091, 97 L.Ed.2d 585 (1987) (concurring opinion of Justice O'Connor); see Fadhl, 859 F.2d at 650 n. 1 (Justice O'Connor's concurring opinion constitutes Court's holding in Delaware Valley ). Enhancements for risk are only appropriate when supported by a showing that such enhancement is \"necessary to attract competent counsel in the relevant community\" for the class of cases in question. Delaware Valley, 483 U.S. at 734, 107 S.Ct. at 3091 (concurring opinion of Justice O'Connor). There is neither a finding nor evidence here to establish that necessity. We therefore reverse that portion of the district court's fee awards that includes multipliers of 1.33, and we remand the fee awards to the district court for recalculation and reentry of the awards without the multiplier.\n\nCONCLUSION\n\n36\nThe fee awards entered by the district court are reversed insofar as they include a multiplier of 1.33, and the fee awards are remanded to the district court for recalculation and reentry of the awards without the multiplier.\n\n\n37\nIn all other respects, the judgment of the district court is affirmed. Each party will bear its own share of the regular costs on appeal.\n\n\n38\nAs prevailing party in this litigation, Merritt is entitled to an award of fees on appeal pursuant to 42 U.S.C. Sec. 1988, subject to reduction in light of Merritt's unsuccessful cross-appeal. Application is to be made as provided in 9th Cir. Rule 39-1.\n\n\n39\nAFFIRMED IN PART; REVERSED IN PART; REMANDED.\n\n\n\n*\n The Honorable Charles A. Legge, United States District Judge for the Northern District of California, sitting by designation\n\n\n1\n Vincent also appealed, but later voluntarily dismissed his appeal\n\n\n2\n This formulation has since been repeatedly quoted in this circuit. See, e.g., League of Women Voters of California v. F.C.C., 798 F.2d 1255, 1256 (9th Cir.1986); United States v. Houser, 804 F.2d 565, 568 (9th Cir.1986); Handi Investment Co. v. Mobil Oil Corp., 653 F.2d 391, 392 (9th Cir.1981)\n\n\n3\n In support of his argument, Mackey cites Harris v. Young, 718 F.2d 620, (4th Cir.1983), where the Fourth Circuit stated, \"It would not be fair to hold a state official liable for not fulfilling 'clearly established' obligations when a federal Circuit Court of Appeals was unable to unanimously decide the same issue.\" Id. at 624. That case is inapposite because the Harris court was faced with the issue, in the first instance, of whether a government official had violated a clearly established right. To that issue of whether a right was \"clearly established,\" the Harris court considered relevant an earlier split decision in a separate case. Harris is not relevant here, since it did not deal with the entirely separate concerns of whether an earlier appellate decision in the same case should be final\n\n\n4\n The majority opinion relied primarily on the Supreme Court's opinion in Greene v. McElroy, 360 U.S. 474, 79 S.Ct. 1400, 3 L.Ed.2d 1377 (1959), that an employee of a private employer \"has the right to be free from unauthorized actions of government officials which substantially impair his property interests.\" Id., at 493, n. 22, 79 S.Ct. at 1412, n. 22. The majority went on to conclude that Merritt's employment contract, including a \"for cause\" termination clause, was not simply a \"unilateral expectation\" of continued employment but a \"legitimate claim of entitlement\" to due process procedural protections as established by Oregon law (citing Board of Regents v. Roth, 408 U.S. 564, 571, 92 S.Ct. 2701, 2706, 33 L.Ed.2d 548 (1972))\n\n\n5\n See, e.g., Roth v. Veteran's Administration of United States, 856 F.2d 1401, 1407 (9th Cir.1988) (citing Merritt I for proposition that qualified immunity does not protect public officials who deprive employees of a property interest in their employment); Love v. U.S., 871 F.2d 1488, 1495 (9th Cir.1989) (citing Merritt I for proposition that a deprivation of property in violation of the due process clause states a viable claim for damages under the constitution); Bateson v. Geisse, 857 F.2d 1300 (9th Cir.1988) (citing Merritt I for the proposition that interference that causes a due process violation may be actionable under 42 U.S.C. Sec. 1983). All of these opinions were unanimous and none of them questioned the logic or holding of Merritt I\nMackey contends that this court's Memorandum Disposition in Johnson v. Serv-Air, Inc., 833 F.2d 1016 (9th Cir.1987), is directly in conflict with the Merritt I majority holding, demonstrating that that holding is \"clearly erroneous.\" Because Johnson is not directly \"relevant under the doctrines of law of the case, res judicata, or collateral estoppel,\" Ninth Circuit Rule 36-3 (1989), it cannot be considered as precedent. See DiMartini v. Ferrin, 889 F.2d 922, 929 (9th Cir.1989) (court refused to consider Johnson as support for the proposition that due process violations not clearly established).\n\n\n6\n Mackey also argues that adhering to Merritt I will cause \"manifest injustice.\" This argument is simply a reprise of his \"clearly erroneous\" argument. He argues that because the majority holding is \"clearly erroneous\" (by virtue of a dissent), for that reason it works a \"substantial injustice\" on Mackey. We reject that argument because we find no clear error in the majority decision in Merritt I. Moreover, we would depart from the law of the case only if we found clear and manifest injustice. See Houser, 804 F.2d at 568. See Moore v. James H. Matthews & Co., 682 F.2d 830, 833-34 (9th Cir.1982)\n\n\n7\n Merritt also contends that the district court erred in failing to award punitive damages for Mackey's violation of his right to continued employment. Without any evidence that Mackey acted willfully or recklessly in disregard of Merritt's due process rights, we are unprepared to overturn the district court's denial of punitive damages\n\n\n8\n Scott v. Rosenberg, 702 F.2d 1263 (9th Cir.1983), cert. denied, 465 U.S. 1075, 1078, 104 S.Ct. 1439, 79 L.Ed.2d 760 (1984), is inapposite. In Scott, this court held that federal officials had not participated in \"state action\" when the FCC and the California Attorney General separately investigated the plaintiff. In that case, any basis for a finding of joint activity was limited to the sharing of information: \"At most, the [federal] employees requested information from, offered to exchange, and did exchange information with the California attorney general's office.... This, without more, is not enough to establish that their conduct was under color of state law.\" Id. at 1269. See also Nat'l Collegiate Athletic Ass'n v. Tarkanian, 488 U.S. 179, 196 n. 16, 109 S.Ct. 454, 464 n. 16, 102 L.Ed.2d 469 (1984) (NCAA not liable under Sec. 1988 as joint actor with state university; the two \"were antagonists, not joint participants\")\n\n\n"} -{"text": " COURT OF APPEALS\n\n THIRTEENTH DISTRICT OF TEXAS\n\n CORPUS CHRISTI - EDINBURG\n\n\n NUMBER 13-07-353-CV\n\n IN RE BNP PARIBAS\n\n\n On Petition for Writ of Mandamus\n\n\n NUMBER 13-07-358-CV\n\nBNP PARIBAS, Appellant,\n\n v.\n\nVIRGO COMMODITIES CORP., ET AL., Appellees.\n\n\n On Appeal from the 107th District Court\n of Cameron County, Texas.\n\n\n\n MEMORANDUM OPINION\n\f Before Chief Justice Valdez, Justices Garza and Vela\n Memorandum Opinion by Justice Vela\n\n Relator, BNP Paribas (\u201cBNP\u201d), brought a petition for writ of mandamus and\n\ninterlocutory appeal contesting the trial court\u2019s denial of its motion to compel arbitration.\n\nFor the reasons discussed below, we conditionally grant the petition for mandamus, Cause\n\nNo. 13-07-353-CV, and, granting full relief under our mandamus jurisdiction, we dismiss\n\nas moot the interlocutory appeal, Cause No. 13-07-358-CV. See Am. Std. v. Brownsville\n\nIndep. Sch. Dist., 196 S.W.3d 774, 781 (Tex. 2006).\n\n I. Background\n\n Real parties in interest, Virgo Commodities Corp., Alamo Feeders, Inc., Mid Valley\n\nGrain Co., USA Meat and Grain Co., Inc., and The Laredo Grain Co., buy and sell\n\nagricultural commodities such as grain. BNP executed identical master sale and purchase\n\nagreements with each of the real parties through which BNP helped finance the real\n\nparties\u2019 operations by purchasing their accounts receivable. The master sale and purchase\n\nagreements contained an arbitration clause and were signed by BNP\u2019s employee, Jovenal\n\n\u201cJerry\u201d M. Cruz.\n\n Real parties in interest demanded arbitration against BNP and Cruz alleging, inter\n\nalia, that Cruz made unauthorized demands for payment to real parties while employed by\n\nBNP.\n\n Arbitration commenced, but Cruz failed to appear or pay for his share of the fees.\n\nReal parties brought suit in state court against Cruz, then subsequently included BNP as\n\na defendant in that suit. In the state court proceeding, BNP filed a motion to compel\n\narbitration. The trial court denied BNP\u2019s motion to compel arbitration. This original\n\n 2\n\fproceeding and interlocutory appeal ensued. This Court granted an emergency stay of the\n\ntrial court proceedings and requested a response from the real parties in interest.1 The\n\nCourt also consolidated the petition for writ of mandamus and interlocutory appeal.\n\n II. Federal or State Arbitration\n\n We first address whether this matter is governed by the Federal Arbitration Act\n\n(\u201cFAA\u201d) or the Texas General Arbitration Act (\u201cTGAA\u201d). See 9 U.S.C. \u00a7\u00a7 1-16; TEX . CIV.\n\nPRAC . & REM . CODE ANN . \u00a7\u00a7 171.001-.098 (Vernon 2005); In re Educ. Mgmt. Corp., 14\n\nS.W.3d 418, 422 (Tex. App.\u2013Houston [14th Dist.] 2000, orig. proceeding) (holding that\n\nquestion of whether transaction affects interstate commerce, and thus whether federal act\n\ngoverns, is one of fact where arbitration agreement is silent as to application of federal or\n\nTexas act). The FAA \"applies to all suits in state or federal court when the dispute\n\nconcerns 'a contract evidencing a transaction involving commerce.'\" Jack B. Anglin Co.,\n\nInc. v. Tipps, 842 S.W.2d 266, 269-70 (Tex. 1992) (orig. proceeding) (quoting 9 U.S.C.S.\n\n\u00a7 2 (2000)); In re Profanchik, 31 S.W.3d 381, 384 (Tex. App.\u2013Corpus Christi 2000, orig.\n\nproceeding). The United States Supreme Court has held that the word \"involving\" in the\n\nFAA is broad and the functional equivalent of \"affecting,\" signaling Congress's intent to\n\nexercise its Commerce Clause powers to the fullest. Allied-Bruce Terminix Cos. v.\n\nDobson, 513 U.S. 265, 268 (1995); L&L Kempwood Assocs., L.L.P., v. Omega Builders,\n\nInc., 9 S.W.3d 125, 127 (Tex. 1999) (orig. proceeding) (per curiam).\n\n\n\n\n 1\n The Court GRANTS the m otion for leave to file a responsive brief filed by real parties in interest and\nDENIES relator\u2019s m otion to strike the real parties\u2019 responsive brief. Any other m otions, not disposed of herein,\nor previously disposed of by this Court, are DISMISSED as m oot.\n\n 3\n\f BNP, a French Public Limited Company, acted through its Houston unincorporated\n\nbranch in entering the master sale and purchase agreements with real parties. The real\n\nparties in interest are all Texas corporations. Pursuant to the agreements, BNP purchased\n\naccounts receivable from the real parties in interest. The accounts receivable represent\n\ndebt obligations owed to the real parties by Mexican importers of United States agricultural\n\nproducts. Real parties utilized the proceeds from the sales of their accounts receivable to\n\nBNP to purchase agricultural products from the Midwest, which were then shipped into\n\nTexas and sold into Mexico.\n\n We conclude that the master sale and purchase agreements evidenced interstate\n\ncommerce. See 9 U.S.C. \u00a7 1 (stating that the definition of \u201ccommerce\" includes, inter alia,\n\ncommerce among the several States or with foreign nations); Citizens Bank v. Alafabco,\n\nInc., 539 U.S. 52, 56 (2003) (discussing the impact of economic transactions, such as\n\ncommercial lending, on interstate commerce); see also Serv. Corp. Int'l v. Lopez, 162\n\nS.W.3d 801, 807-08 (Tex. App.\u2013Corpus Christi 2005, no pet.); Stewart Title Guar. Co. v.\n\nMack, 945 S.W.2d 330, 333 (Tex. App.\u2013Houston [1st Dist.] 1997, orig. proceeding); see\n\nalso Anglin, 842 S.W.2d at 270. Accordingly, the transactions at issue are governed by\n\nthe FAA.\n\n III. Standard of Review\n\n A writ of mandamus will issue to correct a clear abuse of discretion when there is\n\nno adequate remedy by appeal. See Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992).\n\nA trial court abuses its discretion if it reaches a decision so arbitrary and unreasonable as\n\nto amount to a clear and prejudicial error of law or if it clearly fails to correctly analyze or\n\n\n\n 4\n\fapply the law. In re Ford Motor Co., 165 S.W.3d 315, 317 (Tex. 2005). The relator has\n\nthe burden to establish that the trial court abused its discretion. See id. If a trial court\n\nerroneously denies a party's motion to compel arbitration under the FAA, the movant has\n\nno adequate remedy at law and is entitled to a writ of mandamus. In re Nexion Health at\n\nHumble, Inc., 173 S.W.3d 67, 69 (Tex. 2005); Serv. Corp. Int\u2019l, 162 S.W.3d at 808.\n\n IV. Validity and Scope of the Arbitration Agreement\n\n A party seeking to compel arbitration by a writ of mandamus must establish the\n\nexistence of a valid agreement to arbitrate under the FAA and show that the claims in\n\ndispute are within the scope of the agreement. In re Bank One, N.A., 216 S.W.3d 825, 826\n\n(Tex. 2007) (per curiam); In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex.\n\n2005) (orig. proceeding). In determining the validity of agreements to arbitrate which are\n\nsubject to the FAA, we generally apply state-law principles governing the formation of\n\ncontracts. In re Palm Harbor Homes, Inc., 195 S.W.3d 672, 676 (Tex. 2006) (citing First\n\nOptions of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). Whether a valid arbitration\n\nagreement exists is a legal question subject to de novo review. Am. Std., 196 S.W.3d at\n\n781. If the trial court finds there is a valid agreement to arbitrate, the burden shifts to the\n\nparty opposing arbitration to prove his defenses. J.M. Davidson, Inc. v. Webster, 128\n\nS.W.3d 223, 227 (Tex. 2003).\n\n Once a valid agreement to arbitrate has been established, the court must then\n\ndetermine whether the nonmovants' claims fall within the scope of the arbitration clause.\n\nIn re FirstMerit Bank, N.A., 52 S.W.3d 749, 753 (Tex. 2001). To determine whether an\n\nexisting arbitration agreement covers a party's claims, a court must \"focus on the\n\n\n\n 5\n\fcomplaint's factual allegations rather than the legal causes of action asserted.\" Id. at 754.\n\nFederal policy embodied in the FAA favors agreements to arbitrate and courts must resolve\n\nany doubts about an arbitration agreement's scope in favor of arbitration. Id. at 753. If the\n\narbitration agreement encompasses the claims and the party opposing arbitration has\n\nfailed to prove its defenses, the trial court has no discretion but to compel arbitration and\n\nstay its own proceedings. Id. at 753-54; D.R. Horton, Inc. v. Brooks, 207 S.W.3d 862, 866-\n\n67 (Tex. App.\u2013Houston [14th Dist.] 2006, no pet.); Feldman/Matz Interests, L.L.P. v.\n\nSettlement Capital Corp., 140 S.W.3d 879, 883 (Tex. App.\u2013Houston [14th Dist.] 2004, no\n\npet.).\n\n The master sale and purchase agreements provide that:\n\n Upon the demand of either Buyer or Seller, any dispute between the parties\n that concerns any purchased Account or that arises out of the relationship\n of the parties under this Agreement or any document delivered hereunder\n shall be resolved by binding arbitration held in Houston, Texas.\n\nThe Agreement was signed by Jerry M. Cruz Vice President, on behalf of BNP, and was\n\nnotarized by Cruz \u201con behalf of said bank.\u201d\n\n We conclude that BNP has established valid agreements to arbitrate with real\n\nparties in interest. We also conclude that the real parties\u2019 claims, which concern additional\n\npayments made under the agreements, fall squarely within the broad scope of the\n\narbitration provision, which applies to \u201cany dispute between the parties\u201d regarding the\n\npurchased accounts or any dispute \u201cthat arises out of the relationship of the parties.\u201d See\n\nAm. Std. v. Brownsville Indep. Sch. Dist., 196 S.W.3d at 783.\n\n Real parties contend that BNP lacks standing to compel arbitration because an\n\narbitration agreement, requiring arbitration between real parties and Cruz, individually,\n\n\n 6\n\fdoes not exist. Real parties further argue that BNP lacks standing to assert the right to\n\narbitration on behalf of Cruz.\n\n The Texas Supreme Court has addressed a similar situation wherein investors sued\n\ntheir individual investment advisor and his employer, but sought to avoid arbitration on\n\ngrounds that the arbitration agreement at issue had been signed by their investment\n\nadvisor in his capacity as an agent for his employer, but not in his personal capacity. In\n\nre H&R Block Fin. Advisors, Inc., 235 S.W.3d 177, 178 (Tex. 2007). The court rejected this\n\nargument thusly:\n\n Nor can the Bonds skirt arbitration with Bullock when the substance of the\n suit is against both him and his employer. Bullock had no duty to provide\n investment advice to the Bonds but for their contract with Olde/H&R Block,\n and the damages the Bonds seek is the investment they made through that\n contract. As Bullock's liability arises from and must be determined by\n reference to the parties' contract rather than general obligations imposed by\n law, the suit is subject to the contract's arbitration provisions. In re Weekley\n Homes, L.P., 180 S.W.3d 127, 131-32 (Tex. 2005); see also In re Vesta Ins.\n Group, Inc. 192 S.W.3d 759, 762 (Tex. 2006) (\"When contracting parties\n agree to arbitrate all disputes 'under or with respect to' a contract (as they did\n here), they generally intend to include disputes about their agents' actions .\n . . .\").\n\nSee id. Such is the case herein. As stated previously, the arbitration agreement was\n\nsigned by Cruz on behalf of BNP. When the principal, that is, BNP, is bound by a valid\n\narbitration agreement, \"its agents, employees, and representatives are covered by that\n\nagreement.\" Merrill Lynch Trust Co. FSB v. Alaniz, 159 S.W.3d 162, 168 (Tex.\n\nApp.\u2013Corpus Christi 2004, orig. proceeding); McMillan v. Computer Translation Sys. &\n\nSupport, Inc., 66 S.W.3d 477, 481 (Tex. App.\u2013Dallas 2001, orig. proceeding). Accordingly,\n\nCruz, as an employee of BNP, is included in the arbitration agreement at issue. Moreover,\n\nas a signatory and party to the arbitration agreement, BNP clearly has standing to assert\n\n\n 7\n\fthe right to arbitrate. In re Choice Homes, Inc., 174 S.W.3d 408, 412 (Tex. App.\u2013Houston\n\n[14th Dist.] 2005, orig. proceeding) (\u201cTo have standing a party must be affected by the\n\ncontroversy at hand.\u201d).\n\n We would further note that real parties brought the same causes of action against\n\nboth BNP and Cruz and alleged concerted, coordinated acts by these parties, and all of\n\nreal parties\u2019 causes of action arise from the same operative facts concerning the payment\n\nof extra-contractual fees. See Brown v. Anderson, 102 S.W.3d 245, 250 (Tex.\n\nApp.\u2013Beaumont 2003, pet. denied) (finding substantially interdependent and concerted\n\nmisconduct where the causes of action against the non-signatory defendants are \"based\n\nupon the same operative facts and are inherently inseparable from the causes of action\n\nagainst the signatory-defendant\"). Accordingly, we reject the real parties\u2019 arguments\n\npertaining to standing.\n\n Because an order denying arbitration must be upheld if it is proper on any basis\n\nconsidered by the trial court, we will next consider real parties\u2019 alleged defenses to the\n\nagreement. See In re H.E. Butt Grocery Co., 17 S.W.3d 360, 367 (Tex. App.\u2013Houston\n\n[14th Dist.] 2000, orig. proceeding); City of Alamo v. Garcia, 878 S.W.2d 664, 665 (Tex.\n\nApp.\u2013Corpus Christi 1994, no writ).\n\n V. Defenses\n\n In real parties\u2019 response to BNP\u2019s motion to compel arbitration, real parties raise\n\nthree defenses to the motion to compel. First, real parties contend that BNP has materially\n\nbreached its agreement to arbitrate by failing to pay one-half of the costs of arbitration. In\n\nthe instant case, BNP and real parties, collectively, each paid one-third of the arbitration\n\nfees. Cruz failed to pay his one-third share. Under protest, BNP has now paid Cruz\u2019s\n\n 8\n\fshare of the fees. Accordingly, this issue is effectively moot. See Camarena v. Texas\n\nEmployment Comm'n, 754 S.W.2d 149, 151 (Tex. 1988) (matter is \"moot\" if the issues\n\npresented in the case are no longer \"live\" or if the parties lack a legally cognizable interest\n\nin the outcome). Moreover, we would note that real parties\u2019 complaint regarding BNP\u2019s\n\nalleged failure to pay its share of the arbitration fees is a matter of procedural arbitrability,\n\nand thus is a matter to be determined at arbitration. See In re Pisces Foods, L.L.C., 228\n\nS.W.3d 349, 352 (Tex. App.\u2013Austin 2007, orig. proceeding).\n\n Second, real parties also contend that BNP materially breached the arbitration\n\nagreement by calling into question the inherent fairness of the arbitration procedure. In this\n\nregard, real parties specifically allege that BNP engaged in improper, ex parte\n\ncommunications with the arbitration tribunal. The record before the Court fails to contain\n\nevidence substantiating any such alleged improper communications. We conclude that\n\nreal parties have failed to carry their burden to establish this alleged defense to arbitration.\n\n Finally, real parties contend that complete relief cannot be afforded in arbitration\n\ngiven Cruz\u2019s failure to participate in arbitration. We need not address this alleged defense\n\nin detail, however, because real parties\u2019 generalized allegation of harm is not substantiated\n\nby affidavit or other evidentiary support. Cf. In re Oakwood Mobile Homes, Inc., 987\n\nS.W.2d 571, 573 (Tex. 1999) (requiring non-movant to present evidence of defenses to\n\narbitration). Moreover, real parties\u2019 argument is belied by the International Dispute\n\nResolution Procedures, applicable in the instant case, which specifically provide that if a\n\nparty fails to file a statement of defense, fails to appear at a hearing, or fails to produce\n\nevidence, the arbitration \u201ctribunal may proceed with the arbitration\u201d and \u201cmay make the\n\n[arbitration] award on the evidence before it.\u201d Accordingly, we reject this alleged defense\n\n 9\n\fto the arbitration agreement.\n\n VI. Conclusion\n\n A party denied the right to arbitration under the FAA has no adequate remedy by\n\nappeal and is entitled to mandamus relief to correct a clear abuse of discretion. See L&L\n\nKempwood Assocs., L.P., 9 S.W.3d at 128. Because we conclude that the trial court\n\nclearly abused its discretion in denying arbitration of the parties' dispute, we conditionally\n\ngrant mandamus relief. The stay previously imposed by this Court is lifted. See TEX . R.\n\nAPP. P. 52.10(b) (\u201cUnless vacated or modified, an order granting temporary relief is\n\neffective until the case is finally decided.\u201d). We direct the trial court to vacate its order\n\ndenying arbitration and to issue an order compelling arbitration.\n\n We are confident that the trial court will comply and our writ will issue only if it does\n\nnot. Having finally disposed of the petition for mandamus in Cause No. 13-07-353-CV, we\n\ndismiss as moot the interlocutory appeal in Cause No. 13-07-358-CV. See Am. Std. v.\n\nBrownsville Indep. Sch. Dist., 196 S.W.3d at 781.\n\n\n\n\n ROSE VELA\n Justice\n\n\nMemorandum Opinion delivered and\nfiled this 29th day of May, 2008.\n\n\n\n\n 10\n\f"} -{"text": " UNPUBLISHED\n\n UNITED STATES COURT OF APPEALS\n FOR THE FOURTH CIRCUIT\n\n\n No. 19-1522\n\n\nAVEMARIA M. LADSON,\n\n Plaintiff - Appellant,\n\n v.\n\nUNITED STATES OF AMERICA,\n\n Defendant - Appellee.\n\n\n\nAppeal from the United States District Court for the Eastern District of Virginia, at\nAlexandria. Anthony John Trenga, District Judge. (1:18-cv-00811-AJT-MSN)\n\n\nSubmitted: September 24, 2019 Decided: September 26, 2019\n\n\nBefore WYNN and HARRIS, Circuit Judges, and TRAXLER, Senior Circuit Judge.\n\n\nAffirmed by unpublished per curiam opinion.\n\n\nAveMaria M. Ladson, Appellant Pro Se. Dennis Carl Barghaan, Jr., Assistant United\nStates Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia,\nfor Appellee.\n\n\nUnpublished opinions are not binding precedent in this circuit.\n\fPER CURIAM:\n\n AveMaria M. Ladson appeals the district court\u2019s order granting Defendant\u2019s motion\n\nfor summary judgment in Ladson\u2019s civil action. On appeal, we confine our review to the\n\nissues raised in the Appellant\u2019s brief. See 4th Cir. R. 34(b). Because Ladson\u2019s informal\n\nbrief does not challenge the basis for the district court\u2019s disposition, Ladson has forfeited\n\nappellate review of the court\u2019s order. See Jackson v. Lightsey, 775 F.3d 170, 177 (4th Cir.\n\n2014) (\u201cThe informal brief is an important document; under Fourth Circuit rules, our\n\nreview is limited to issues preserved in that brief.\u201d). Accordingly, we affirm the district\n\ncourt\u2019s judgment. We dispense with oral argument because the facts and legal contentions\n\nare adequately presented in the materials before this court and argument would not aid the\n\ndecisional process.\n\n AFFIRMED\n\n\n\n\n 2\n\f"} -{"text": "\n397 N.E.2d 973 (1979)\nRodrick HICKS, Appellant,\nv.\nSTATE of Indiana, Appellee.\nNo. 579S134.\nSupreme Court of Indiana.\nDecember 18, 1979.\nPeter J. Caras, Jr., Gary, for appellant.\nTheo. L. Sendak, Atty. Gen., Gordon R. Medlicott, Deputy Atty. Gen., Indianapolis, for appellee.\nGIVAN, Chief Justice.\nAppellant was convicted of dealing in drugs and was sentenced to 12 years in prison.\n*974 The evidence most favorable to the State reveals that the chief prosecution witness was a confidential informant for the United States Drug Enforcement Administration (DEA). The informant had known appellant for about seven months at the time of the drug transaction. On September 28, 1977, appellant called the informant to see if the informant was ready to make a purchase. The informant told appellant he would first have to find the money. The informant contacted DEA agents. The informant, with the DEA monitoring, then made several calls to appellant to arrange the purchase. A meeting was set up for October 5, 1977, at a service station in Gary, Indiana. The informant was given $600.00 by DEA agents to make the purchase. At the service station the informant got into appellant's car, where appellant delivered a bag of heroin to the informant in return for the $600.00 payment. DEA agents searched the informant before and after the transaction. Other than the $600.00 before the meeting and the bag of heroin afterward, neither money nor contraband were found on the informant.\nThe informant's version of the transaction was supported by the testimony of DEA agents. Although the agents did not actually see the transaction, they testified that they observed appellant's vehicle pull into the station and the informant get into the backseat of appellant's car. There was also testimony that an agent saw appellant reach toward the informant in the backseat. The bag of heroin, which appellant sold to the informant, was introduced in evidence.\nAppellant claims the evidence is insufficient as a matter of law to sustain his conviction. In particular, he contends the State produced no evidence that he intended to deliver the narcotics. We will not weigh evidence, but will look only to the evidence most favorable to the State. The conviction will be upheld if the record contains substantial evidence of probative value from which the jury could have inferred that appellant was guilty beyond a reasonable doubt. Shipp v. State (1976) 265 Ind. 108, 350 N.E.2d 619.\nAppellant was convicted of dealing in a narcotic drug under IC \u00a7 35-48-4-1 [Burns 1979]. The statute provides that any person who \"knowingly or intentionally manufactures or delivers a narcotic drug\" will be guilty of a violation of the statute. \"Intentionally\" is defined as engaging in conduct with a \"conscious objective to do so.\" IC \u00a7 35-41-2-2(a). \"Knowingly\" is defined as engaging in conduct with an awareness of a \"high probability that he is doing so.\" IC \u00a7 35-41-2-2(b). Under the facts of this case, as recited above, the evidence is more than sufficient to sustain the verdict.\nAppellant testified and now claims that he did not have the requisite intent to deliver the narcotics, since he intended to return the money to the informant. However, he fails to recognize the well-established rule that where an offense consists of a violation of a statute, the only intent necessary is the intent to commit the actions proscribed by the statute. Crider v. State (1972) 258 Ind. 541, 282 N.E.2d 819. Moreover, the jury may infer this intent from all the facts and surrounding circumstances in evidence. Spivey v. State (1971) 257 Ind. 257, 274 N.E.2d 227; Cooper v. State (1975) 165 Ind. App. 471, 332 N.E.2d 843. The record reveals substantial evidence of probative value on each element of this crime and in particular, on the element of appellant's conscious objective and intent to deliver the drugs. Appellant has merely pointed to a conflict in the evidence, the resolution of which is a function for the jury. Choctaw v. State (1979), Ind., 387 N.E.2d 1305.\nAppellant next claims the trial court erred in denying his motion for mistrial. During cross examination of the informant by counsel for the co-defendant Spence, the informant was asked if he recalled giving a deposition earlier in the year. The informant replied by asking whether counsel was referring to another case. Counsel for appellant then approached the bench and moved for a mistrial, which motion was denied. When the court offered to admonish the jury to disregard any reference to another case, counsel for appellant declined.\n*975 The trial court has broad discretion in ruling upon a motion for mistrial. The court's determination will be reviewed only for an abuse of judicial discretion or for clear error in the decision. Randolph v. State (1978) Ind., 378 N.E.2d 828. Here the mere reference to another case, without more, is insufficient to show substantial prejudice. Moreover, appellant had a duty to request the court to take action to remedy the alleged error. Rexroat v. State (1964) 245 Ind. 688, 201 N.E.2d 558. Since he refused the trial court's offer to admonish the jury, he may not now complain of error.\nAppellant claims the trial court erred in permitting the informant to testify that he had previously sold heroin for appellant. The State offered the evidence to show that appellant was predisposed to commit this crime. The trial court, after argument at the bench, permitted the first question but sustained an objection to the next question, which went to the length of time the informant has worked for appellant. The trial court then admonished the jury that \"any evidence of any prior dealings is not proof of what occurred on the fifth day of October, 1977.\" We hold the trial court properly permitted the first question to be asked and answered. The court's admonishment concerning the question and answer was correct. Furthermore, appellant himself later testified that he had known the informant for about seven months and had worked with him in a drug-selling scheme. Under these circumstances, we can discern no prejudicial error in the rulings of the trial court.\nThe judgment of the trial court is affirmed.\nDeBRULER, HUNTER, PIVARNIK and PRENTICE, JJ., concur.\n"} -{"text": "\n915 F.Supp. 1108 (1996)\nMajor Gregory L. RUSSELL, USAF, Plaintiff,\nv.\nThe DEPARTMENT OF the AIR FORCE; Dr. Sheila Widnall, ex officio, the Secretary of the Air Force; Lieutenant General Paul Stein, Superintendent, United States Air Force Academy, ex officio, Brigadier General Ruben A. Cubero, *1109 Dean of the Faculty, United States Air Force Academy, ex officio, Lieutenant Colonel Bradford L. Buchanan, USAFR, ex officio, American Express Travel Related Services Company, Inc., and Citicorp Diners Club, Inc., Defendants.\nCivil A. No. 95-B-1428.\nUnited States District Court, District of Colorado.\nJanuary 26, 1996.\n*1110 *1111 *1112 Alison Ruttenberg, Denver, CO, Denis H. Mark, William C. Waller, Jr., Waller and Mark, P.C., Denver, CO, for plaintiff.\nLinda Surbaugh, Assistant U.S. Attorney, Denver, CO, Arthur R. Goldberg, Alina S. Kofsky, Federal Programs Branch, Civil Division, U.S. Department of Justice, Washington, DC, Major Jo Ann Stringfield, Air Force Legal Services Agency, General Litigation Division, Arlington, VA, for government defendants.\nJohn M. Vaught, Beth N. Nesis, Holland & Hart, Denver, CO, for American Express and Citicorp Diners Club.\nG. Hamilton Loeb, Paul, Hasting, Janofsky & Walker, Washington, DC, Craig S. King, Richard J. Webber, Arent Fox Kintner Plotkin & Kahn, Washington, DC, for American Express Travel Related Services.\n\nMEMORANDUM OPINION AND ORDER\nBABCOCK, District Judge.\nIn this action under the Right to Financial Privacy Act (RFPA), 12 U.S.C. \u00a7 3401 et seq., plaintiff, Major Gregory L. Russell, U.S.A.F. (Russell), moves, pursuant to Fed. R.Civ.P. 65, for a preliminary injunction against the Air Force defendants, to enjoin them from using, photocopying, or disseminating his financial records obtained from co-defendants American Express Travel Related Services Company, Inc. (American Express) and Citicorp Diners Club (Citicorp). Jurisdiction is proper under 12 U.S.C. \u00a7 3416. The motion is fully briefed and heard. Plaintiff has failed to show likelihood of success on the merits of his claim. Therefore, I will deny the motion for preliminary injunction.\n\nI.\nThe following facts are not in dispute. Major Russell is an active duty member of the United States Air Force stationed at the United States Air Force Academy in Colorado Springs, Colorado. From fall, 1989, to February 10, 1994, Russell was the coach of the United States Air Force Academy forensics team. During that time, Russell traveled with the team to various forensic competitions. In connection with his duties in the Air Force, Russell applied for and obtained American Express and Citicorp Diners Club charge cards available to him through a government travel program between the Air Force, the General Services Administration (GSA), and the respective charge card companies. *1113 As a cardholder, Russell is personally liable for the charges incurred on these cards. The cards are not to be used for personal purposes, being limited to use in connection with official United States government business.\nIn 1980, the Office of Management and Budget, in conjunction with the GSA, the Departments of Defense and State, the Office of Personnel Management, and the General Accounting Office examined government travel patterns, policies, and procedures. (Def.Exh. 1) Their findings, known as the Interagency Travel Management Improvement Project (ITMIP), resulted in new GSA procurement techniques designed to reduce the cost of federal travel. Id. at 19.\nPursuant to 40 U.S.C. \u00a7 481(a), the administrator of GSA is authorized to enter into contracts on behalf of federal agencies. By this authority, in 1983 GSA opened competitive bidding for a contractor. Thereafter, GSA awarded the contract to Citicorp (South Dakota), N.A. and its subsidiary, Citicorp Diners Club, Inc. In 1988, GSA awarded a \"follow-on\" contract to Citicorp. In 1993, once again after competitive bidding, GSA awarded the contract to American Express.\nUnder the GSA contracts, Citicorp and American Express issued government cards to military personnel designated by authorized representatives of the Air Force. On the card itself, under the employee's name, American Express imprints in raised letters the name of the government agency through which the card was issued. Similar designation was typically imprinted on the Citicorp cards. Eligibility for the government card is determined by Air Force commanders who have authority to deny a government card to anyone with financial problems or a history of credit card abuse. Cardholders receive the government card without charge and with no credit-check or limit. Cardholders are charged no interest or late fees on outstanding balances. Use of the government card is limited to charging expenses and obtaining cash advances for official government purposes. The Air Force then reimburses the cardholder for official expenses charged in accordance with the joint federal travel regulations. The Air Force is not liable to the card issuer for payment of the charge card balance. Rather, the individual cardholder is personally liable for all charges incurred on the government card. Typically, as in this case, the monthly charge statement is sent to the individual's home address.\nThe Citicorp Diners Club credit card application and agreement states, \"[b]y signing below I ... agree to be bound by the terms and conditions of the Diners Club government program employee card account agreement accompanying the card ... and acknowledge that the card is to be used for official government business.\" (Exh. 6).\nThe American Express government card application agreement recites, \"[b]y signing below I agree to use the card for official travel and official travel-related expenses and to be bound by the terms and conditions of the attached agreement governing my use of the government card.\" The agreement also provides that the recipient \"agree[s] to use the government card only for official travel and travel-related expenses away from the cardholder's official duty station.\" (Exh. 7).\nPursuant to the GSA contracts, Citicorp and American Express are required to assemble and maintain monthly reports on government cardholder accounts. These reports include an account aging report which is sent to the Air Force each month. This report lists every government cardholder's account, with delinquent amounts listed in columns headed XX-XX-XX-XXX days. American Express also sends out a separate 60-day list with names of Air Force military personnel who are 60 days delinquent in paying their account. Master Sergeant Jerry C. Pio (Pio), chief of travel pay at the United States Air Force Academy, receives this report and sends a copy to the member's unit resource advisor or sub-account coordinator.\nPio received and forwarded one or two 60-day delinquent notices to plaintiff's unit. Pio then called American Express on June 27, 1994, and requested that they telecopy to him Russell's American Express government card statements. These statements were requested by the Air Force because Russell was under \"investigation.\" (Doyon Declaration, \u00b6 4). Pio received the requested financial *1114 statements which were forwarded through the Air Force Office of Special Investigations (OSI), along with the results of OSI's investigation, to the Air Force Academy's legal office. Id. Defendant, Major Kurt D. Schuman (Schuman), Staff Judge Advocate at the Air Force Academy, received the documents and contacted Citicorp Diners Club and American Express. He requested and obtained further information from the two companies, including the current status of Russell's accounts. Schuman then drafted criminal charges against Russell based on the information. (Schuman Declaration \u00b6 5).\nBy March, 1995, Schuman assigned defendant, Captain Thomas F. Doyon (Doyon), as trial counsel and prosecutor. (Doyon Declaration \u00b6 3). Doyon drafted \"blanket\" requests for records from both American Express and Citicorp Diners Club. (Def.Opp. to PI p. 10). No notice pursuant to the RFPA was ever provided to Russell.\nThe Air Force held an Article 32 proceeding, see 10 U.S.C. \u00a7 832, (similar to a civilian grand jury or preliminary hearing proceeding) on April 21, 1995 at which the American Express and Citicorp financial records were considered in the military investigating officer's determination that there was sufficient evidence to bring charges against Russell at a general court-martial.\nIn late summer 1994, Russell applied for early retirement under a plan whereby the Air Force opened 1000 slots to officers who met certain requirements. However, Russell's application for early retirement was denied because he was \"under investigation.\" On June 5, 1995, Russell filed this action. On June 16, 1995, the Air Force withdrew the charges preferred against Russell \"while retaining the full range of disciplinary and administrative options....\" (Def.Opp. p. 11).\n\nII.\n\nJurisdiction\nAlleged violations of the RFPA are \"peculiarly\" within the jurisdiction of Article III courts and not the military justice system. See United States v. Wooten, 34 M.J. 141 (CMA 1992); 12 U.S.C. \u00a7 3416. Thus, it is exclusively the province of Article III courts to grant relief for violations of the RFPA. I recognize, as I did in McDonough v. Widnall, 891 F.Supp. 1439, 1447 (D.Colo. 1995), that the effect of injunctive relief under the RFPA in this case could have collateral consequences upon court-martial and administrative actions against Russell. The potential for such collateral consequences, however, does not diminish my clear equitable jurisdiction to grant relief in this case. Indeed, that jurisdiction rests exclusively with Article III courts beginning, in the first instance, with \"any appropriate United States district court.\" \u00a7\u00a7 3416 and 3418.\n\nIII.\n\nPreliminary Injunction\nThe purpose of a preliminary injunction under Fed.R.Civ.P. 65 is to preserve the status quo between the parties pending a final determination on the merits. University of Texas v. Camenisch, 451 U.S. 390, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981); Lundgrin v. Claytor, 619 F.2d 61, 63 (10th Cir.1980). Preliminary injunction is an extraordinary remedy\u0097an exception rather than the rule. GTE Corp. v. Williams, 731 F.2d 676, 678 (10th Cir.1984). Thus, the right to relief must be clear and unequivocal. See Penn v. San Juan Hosp., 528 F.2d 1181, 1185 (10th Cir.1975). See generally 11 C. Wright & A, Miller, Federal Practice and Procedure \u00a7 2948m at 428-29 nn. 19-21 (1973 & 1991 Supp.).\nA preliminary injunction is an equitable remedy that invokes the sound discretion of the district court. Lundgrin, 619 F.2d at 63. The burden is on the movant to make a prima facie showing of a probable right to the ultimate relief and a probable danger of injury if the motion is denied. Id. A preliminary injunction may issue if the movant clearly shows: (1) irreparable injury if the injunction is not granted; (2) the threatened injury outweighs any harm the preliminary injunction will cause the opposing party; (3) the preliminary injunction is not adverse to the public interest; and (4) a substantial likelihood of success on the merits. SCFC ILC, Inc. v. Visa USA, Inc., 936 *1115 F.2d 1096, 1098 (10th Cir.1991); Lundgrin, 619 F.2d at 63.\nRussell seeks to enjoin Air Force defendants from \"using, photocopying or disseminating the Plaintiff's financial records from American Express and Citicorp, that were obtained in violation of the Right to Financial Privacy Act.\" (Motion \u00b6 21). Air Force defendants contend that the RFPA does not apply to the information obtained from Citicorp and American Express in connection with the government card travel program. Rather, these defendants state they properly obtained the financial records pursuant to 5 U.S.C. \u00a7 552a, commonly known as the Privacy Act. Alternatively, if the RFPA does apply, defendants state that they obtained the information properly as a \"co-customer\" of Citicorp and American Express as Russell's \"authorized representative.\" Air Force defendants also argue pursuant to 12 U.S.C. \u00a7 3403(d) that they are entitled to the records incident to collecting a debt. For the following reasons, I will deny the preliminary injunction.\n\nA. Substantial likelihood that Plaintiffs will prevail on the merits\n\n1. RFPA or Privacy Act\nRussell argues that the financial records disclosed by American Express and Citicorp are subject to the Right to Financial Privacy Act, (RFPA), 12 U.S.C. \u00a7 3401 et seq. Air Force defendants argue that the Privacy Act of 1974, 5 U.S.C. \u00a7 552a et seq. controls. Based on principles of statutory construction, I conclude that the RFPA applies to financial records generated under the government card programs.\nThe \"cardinal canon\" on statutory construction is that \"courts must presume that the legislature says in the statute what it means and means in the statute what it says there.\" Connecticut Nat'l Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 1149, 117 L.Ed.2d 391 (1992). Also, I presume that Congress is aware of other existing law when it passes legislation. Miles v. Apex Marine Corp., 498 U.S. 19, 32, 111 S.Ct. 317, 325, 112 L.Ed.2d 275 (1990).\nStatutes that relate to the same subject matter are considered in pari materia and should be construed together. Barth v. United States, 28 Fed.Cl. 512, 515 (1993). In construing statutes, the specific governs the general. Morales v. Trans World Airlines, Inc. 504 U.S. 374, 384-85, 112 S.Ct. 2031, 2037, 119 L.Ed.2d 157 (1992). If construction in pari materia leads to irreconcilable inconsistency, the later and more specific statute usually controls the earlier and more general. Hellon & Associates, Inc. v. Phoenix Resort Corp., 958 F.2d 295, 297 (9th Cir.1992). Moreover, regardless of the priority of enactment, a specific statute should not be deemed to be controlled or nullified by a general statute absent definite contrary intention. Franklin v. United States, 992 F.2d 1492, 1502 (10th Cir.1993).\n\na. Privacy Act, 5 U.S.C. \u00a7 552a\nIn response to concerns raised regarding personal privacy, Congress enacted the Privacy Act of 1974, 5 U.S.C. \u00a7 552a, to govern information data banks maintained by the federal government. Pub.L. No. 93-579, 88 Stat. 1896 (1974), codified, as amended, at 5 U.S.C. \u00a7 552a; L. Richard Fischer, The Law of Financial Privacy, 2d ed., \u00b6 8.02[1] (1991). The Privacy Act is based on the principles that there should be no secret federal information files or government data banks maintained on individuals and that the dissemination of, and access to, personal information in government data banks should be strictly controlled. A Citizen's Guide on Using the Freedom of Information Act and the Privacy Act of 1974 to Request Government Records, H.R.Rep. No. 101-193, 101st Cong., 1st Sess. 15, 18-19 (1989); 5 U.S.C. \u00a7 552a notes.\nGovernment contractors who maintain personal records on behalf of an agency are subject to the requirements of the Privacy Act \"to prevent federal agencies from contracting with outside recordkeeping organizations in order to avoid the requirements of the Privacy Act.\" 5 U.S.C. \u00a7 552a(m); Fischer, The Law of Financial Privacy; \u00b6 8.02[2]. Thus, the focus of the Privacy Act is on the actions of government *1116 agencies in disclosing personal information maintained by them.\n\nb. Right to Financial Privacy Act 12 U.S.C. \u00a7 3401 et seq.\n\nIn contrast, the RFPA, 12 U.S.C. \u00a7 3401 et seq. prohibits financial institutions from providing the government with information about their customers' financial records unless the customer authorizes the release or the government obtains a valid subpoena or warrant. United States v. Frazin, 780 F.2d 1461 (9th Cir.1986); 12 U.S.C. \u00a7 3402.\nCongress passed the RFPA, in part in response to United States v. Miller, 425 U.S. 435, 96 S.Ct. 1619, 48 L.Ed.2d 71 (1976). There, the Supreme Court held that a bank customer has no constitutionally protected privacy interest in bank records. See H.R.Rep. No. 1383, 95th Cong., 2d Sess. 34 (1978). The RFPA \"fill[s] the void in ... Federal law [left by Miller] regarding statutory protection against unrestricted access to third-party records\" by the federal government. Hearings on S. 2096, S. 2293, and S. 1460 before the Subcomm. on Financial Institutions of the Senate Comm. on Banking, Housing, and Urban Affairs, 95th Cong., 2d Sess. 154 (1978) (statement of Senator Mathias). Both Congress and the Executive regarded the Act as a compromise between a \"bank customer's right of financial privacy and the need of law enforcement agencies to obtain financial records pursuant to legitimate investigations.\" United States v. Frazin, 780 F.2d at 1465; See H.R.Rep. No. 1383 at 34 reprinted in 1978 U.S.Code Cong.Ad. News 9273, 9306.\nThe RFPA \"provid[es] that the government cannot gain access to a bank customer's financial records or other information without first complying with the notice and procedure requirements of the RFPA.\" Adams v. Board of Governors of the Federal Reserve Bd., 659 F.Supp. 948, 954 (D.Minn. 1987). See also Donovan v. National Bank of Alaska, 696 F.2d 678, 683 (9th Cir.1983). The RFPA, enacted four years after the Privacy Act, prescribes detailed, narrowly-tailored procedures by which the government may obtain financial institution records. See 12 U.S.C. \u00a7 3402; McDonough, 891 F.Supp. at 1448. For purposes of the RFPA, Congress defines \"Government authority\" to mean \"any agency or department of the United States, or any officer, employee, or agent, thereof.\" 12 U.S.C. \u00a7 3401(3).\nIn deciding which statute controls in this case, I also look to the respective subject matter of the Privacy Act and the RFPA. The RFPA regulates disclosure to the government of a citizen's financial information maintained by a private financial institution. In contrast, the Privacy Act governs disclosure to citizens of information maintained by the federal government. American Express and Citicorp disclosed financial information about Major Russell to the federal government. This information then became part of the information data banks maintained by the government. It is undisputed that at the request of the Air Force, Russell's financial information flowed from American Express and Diners Club, to the federal government. Thus, the source of the information was the financial institutions and the recipient of the information was the federal government. Because the Privacy Act governs the release of information from the government, while, in contrast, the RFPA regulates the release of information from financial institutions to the federal government, as between the RFPA and the Privacy Act, the RFPA would apply to the release of Major Russell's financial information. Construing the Privacy Act and the RFPA in pari materia, I find and conclude that the RFPA was more recently enacted and, as applied here, is substantively more specific in its provisions than the Privacy Act. Accordingly, I apply the RFPA rather than the Privacy Act to the financial records disclosed in this case.\n\n2. Authorized Representative\nThe RFPA limits the kinds of customers to whom it applies. 12 U.S.C. \u00a7\u00a7 3401(2), (4), and (5). \"Customer\" is defined as \"any person or authorized representative of that person who utilized or is utilizing any service of a financial institution.\" 12 U.S.C. \u00a7 3401(5) (emphasis supplied). \"Person\" is defined as \"individuals or partnerships of five or fewer individuals.\" 12 U.S.C. *1117 \u00a7 3401(4). The Air Force defendants do not meet the RFPA definition of \"person.\"\nThe Air Force defendants argue, however, that the Air Force is Russell's \"authorized representative\" and, thus, is a \"customer\" as defined by the RFPA. Thus, they contend they are entitled to the records obtained by them from Citicorp and American Express. I agree.\nThe RFPA contains no restriction on who may be an authorized representative and it does not require an authorized representative to be designated in any formal or particular manner. The RFPA does not even define authorized representative. Consequently, I turn to other sources to define authorized representative within the context of the RFPA.\n\"The touchstone in construing statutory language is legislative intent.\" Stauffer Chemical Co. v. EPA, 647 F.2d 1075, 1078 (10th Cir.1981); see Caminetti v. United States, 242 U.S. 470, 490, 37 S.Ct. 192, 196, 61 L.Ed. 442 (1917). I am mindful that the plain meaning test is useful in determining legislative intent. Id. However, the ordinary and usual meaning commonly attributed to the words \"authorized\" and \"representative\" each spans several paragraphs in the dictionary. Webster's Third New International Dictionary, pp. 146-47, 1926-27 (1986). Such numerous and varied definitions are not helpful in determining legislative intent. Thus, I look to legislative history.\nAs indicated, Congress passed the RFPA, in part in response to United States v. Miller, 425 U.S. 435, 96 S.Ct. 1619, 48 L.Ed.2d 71 (1976). See H.R.Rep. No. 1383, 95th Cong., 2d Sess. 34 (1978); Hearings on S. 2096, S. 2293, and S. 1460 before the Subcomm. on Financial Institutions of the Senate Comm. on Banking, Housing, and Urban Affairs, 95th Cong., 2d Sess. 154 (1978) (statement of Senator Mathias). More specifically, Congress enacted the RFPA \"in response to a pattern of government abuse in the area of individual privacy.\" Donovan v. National Bank of Alaska, 696 F.2d 678, 683 (9th Cir. 1983).\nThe relationship between and among American Express, Citicorp, the Air Force defendants, and Russell is instructive in defining the status of Russell and the Air Force under the RFPA. First, GSA, on behalf of the Air Force, negotiated the terms and conditions of the government card contract between the Air Force and Citicorp and American Express. See 40 U.S.C. \u00a7 481(a)(4); (Exh. 1, 2, 3). Second, pursuant to the GSA contracts with Citicorp and American Express, Russell was issued Citicorp and American Express government cards. However, Russell was issued these cards only after he completed and signed applications that established his agreement with the card issuers.\n\nCiticorp Agreement\nThe Citicorp application contains several sections reflecting the nature of the relationship between the applicant and the government agency for whom the applicant worked. First, the form is titled \"Employee Card Application.\" Next, the applicant information section is titled:\nDiners Club Government Card Program\nEmployee Card Application\nIndividual Billing\n(Exh. 6)\nThe portion directly above the applicant's signature includes the following statement:\nBy signing below, I (I) ask Citicorp ... to open a Card Account in my name and issue a Diners Club Card ... to me, (II) agree to be bound by the terms and conditions of the Diners Club Government Card Program Employee Card Account Agreement accompanying the Card, (III) agree to be liable for all charges to the Card Account in accordance with such Agreement, and (IV) acknowledge that the Card is to be used for official Government business.\nId.\nThe next section is highlighted and titled \"Agency Information and Authorization.\" The \"Agency\" section has blocks for the \"Name of Agency Requesting Issuance of Card,\" the \"Address of Agency,\" and \"Summary Account Number.\" This section is followed by a signature section containing the following statement:\n\n*1118 By signing below as the duly authorized representative of the Agency named above, I ask Citicorp ... to open a Card Account in the name of, and to issue a Diners Club Card ... to, the employee named hereon in accordance with General Services Administration Contract Number GS-OOF-95032.\nId. (emphasis supplied).\nThis is followed by blocks labeled \"Name of Authorizing Officer or Individual,\" \"Title of Authorizing Officer or Individual,\" and \"Authorizing Signature.\" Id. The next page of Exhibit 6 is titled \"APPLICANT ACKNOWLEDGMENT\" (emphasis in original) and contains the following statement directly above the applicant signature line:\nI certify that I have received, read, and understand the \"Description of Employee Rights and Obligations for Contractor-Issued Charge Cards.\" I will abide by the rules, regulations, and other instructions that are issued by my Government Agency and Citicorp Diners Club for the use of any Card issued to me for official Government travel.\nCentered at the bottom of the page is the statement:\nPLEASE RETURN THIS ACKNOWLEDGMENT TO YOUR GOVERNMENT TRAVEL MANAGEMENT SYSTEM COORDINATOR.\n(Exh. 6) (emphasis in original).\nCiticorp also provided the employee with the \"Employee Card Account Agreement.\" (Exh. 6). This form is titled \"DINERS CLUB GOVERNMENT CARD PROGRAM EMPLOYEE CARD ACCOUNT AGREEMENT.\" (emphasis in original). Pertinent provisions include the following:\n\"Agency\" means the United States federal agency, ... participating in the Diners Club Government Card Program that has authorized Diners Club to issue the Card to and to open an account with Diners Club (\"Account\") for the agency employee named on the Card.\nThe words \"I\" \"me\" and \"my\" refer to the agency employee named on the card who has asked Diners Club to issue the Card and open the Account, and who has agreed to be bound by this Agreement.\nThe Card and the Account are provided by Diners Club under the authority of my Agency. The Card and the Account are not to be used for personal purposes and may only be used in connection with official United States Government business.\nDiners Club will continue to issue renewal or replacement Cards until I or my Agency tells Diners Club to stop or the Card and the Account are canceled.\nThe Card and the Account will be automatically canceled upon the (a) end of my employment with my Agency regardless of the reason; (b) termination or expiration of the GSA Contract; (c) request of my Agency; (d) request of Diners Club with the permission of my Agency; ....\n\nDelinquency may result in suspension of Card privileges or cancellation of the Card and the Account if Diners Club obtains the permission of my Agency ....\n\n(Exh. 6) (emphasis supplied).\n\nAmerican Express Agreement\nThe American Express Government Card application is headed:\nGOVERNMENT CARD APPLICATION & AGREEMENT\nFor Employees of the United States Government\n(Exh. 7) (emphasis in original).\nThe top of the application directs that a copy of the application be returned to:\n American Express\n Government Account Unit\n P.O. Box 53609\n Phoenix, AZ XXXXX-XXXX\nId. (emphasis supplied).\nThe next portion of the application is completed by the employee and requests personal information about the employee. This section also includes blanks for the agency name, address, and office phone number.\nDirectly above the space for the \"Employee Signature\" is the following statement:\nBy signing below, I (a) request that a Government Card be issued in my name, (b) agree to use the Card for official travel *1119 and official travel related expenses and to be bound by the terms and conditions of the attached Agreement governing my use of the Government Card and (c) authorize American Express to verify information supplied on this application.\n(Exh.7) (emphasis supplied).\nThe next section of the application states in highlighted text, \"TO BE COMPLETED BY AGENCY PROGRAM COORDINATOR.\" (emphasis in original). This section seeks such information as the \"Control Account\" number, agency name, address, and the \"ATM Cash Limit\" allowed for the agency employee. The bottom of the form contains the following signature section:\nBy signing below, I hereby authorize, on behalf of the Agency/Organization indicated above, that a Government Card be issued to the employee named above....\nName of Agency Official _____ Title/Rank\n_____\nSignature _____________ Date ___________\n(Exh.7) (emphasis supplied).\nBelow this section is a Privacy Act Notice followed by:\nNOTE: See Reverse Side for Important Information\n(Exh. 7) (emphasis in original).\nThe reverse side is titled:\nAGREEMENT BETWEEN AGENCY/ORGANIZATION EMPLOYEE AND AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.\nThe Agreement states in pertinent part:\nIMPORTANT: BEFORE YOU SIGN THE APPLICATION, READ THIS AGREEMENT THOROUGHLY.\nDEFINITIONS (emphasis in original).\n... [T]he works \"you,\" \"your,\" or \"Government Cardholder\" means the Agency employee named on the Government Card. The word \"Agency\" means the United States federal agency ... participating in the American Express Government Program under the General Services Administration contract no. GS-COF-34139 ... that has authorized American Express to open an account (the \"Card Account\") for the Agency employee (the \"Government Cardholder\"). A Card issued to a Government Cardholder is called a Government Card.\n\n\nYou agree to use the Government Card only for official travel and official travel related expenses away from your official station/duty station (lodging, meals, incidentals) and submit the charges for same for Agency reimbursement in accordance with Agency policy. You understand that the Card and the Account are not to be used for personal purposes.\n\n. . . . .\nWe will continue to issue renewal or replacement Card, until you or the Agency tell us to stop or the Account is suspended or canceled....\n. . . . .\nThe Card and the Account will be automatically canceled upon the (a) termination of your employment with Agency regardless of the reason; (b) termination or expiration of the GSA Contract; (c) request of the Agency; (d) request of American Express with the permission of the Agency. ...\n. . . . .\nYou, as the Government Cardholder, are responsible for making payment to American Express.\n\nYou are not permitted to use the Government Card to incur charges for any other purposes including personal purposes. (sic). Such charges shall be considered as unauthorized charges but you will nevertheless be personally liable to us for them, and we will look to you for payment.\n\n... With the consent of the Agency, the Card Account may be canceled if [an] undisputed amount is not paid in full within 120 days of the date of the first billing statement on which the Charge appears.\n(Exh. 7) (emphasis supplied).\nRestatement (Second) of Agency \u00a7 1 defines agency as \"the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.\" The one for whom action is to be taken is the *1120 \"principal\" and the one who is to act is the \"agent.\" Id. Further, a \"master\" is a type of principal who employs a \"servant\", a type of agent, to perform service in his affairs and who controls or has the right to control the physical conduct of the \"servant\" in the performance of the service. Restatement (Second) of Agency \u00a7 2. \"Principal\" is further described as \"disclosed\" if, \"at the time of a transaction conducted by an agent, the other party thereto has notice that the agent is acting for a principal and of the principal's identity.\" Id. at \u00a7 4. Unless otherwise agreed, a person making a contract with another as an agent for a disclosed principal does not become a party to the contract and is not liable on the contract. Id. at \u00a7 320. However, if the agent of a disclosed principal makes an authorized contract with a third person, the liability of the principal depends upon the agreement between the agent and the other party. Id. at \u00a7 146.\nHere, it is undisputed that Major Russell knew and agreed that:\n1. the Air Force was required to authorize his initial application for the government travel card and then controlled whether his account was renewed, suspended or canceled by the card issuers;\n2. the account would be canceled upon termination of his employment with the Air Force;\n3. he could use the government card only for \"official United States Government business\" (Citicorp agreement) and \"official travel and travel related expenses\" (American Express agreement);\n4. use of the government card for \"personal purposes\" was prohibited; and\n5. he was personally liable for all charges made on the government cards.\nUnder these circumstances, as a matter of law, a principal-agent relationship existed between the Air Force and Russell, the Air Force was a disclosed principal, and pursuant to his contracts with the card issuers Russell, not the Air Force, was personally liable for the charges he incurred on the government cards.\nThe issue remains whether the Air Force was, under the RFPA, Russell's \"authorized representative.\" I am mindful of the legislative intent of the RFPA to provide, statutorily, some limited right of privacy to individuals or partnerships with five or fewer individuals in their private financial transactions. I also consider Russell's role as agent of the Air Force in his use of the government cards.\nUnder specific agency principles, a \"principal has the right to control the conduct of the agent\" in matters entrusted to the agent, Restatement (Second) of Agency \u00a7 14, which right is \"continuous and continues as long as the agency relation exists. ...\" Id. at \u00a7 14, comment a. Thus, the role of \"principal\" encompasses reciprocal status of \"authorized representative\" of the \"agent,\" at least to the extent of the matters entrusted to the agent by the principal. See Restatement (Second) of Agency, \u00a7 14, comment b.\nMy consideration of the language of the RFPA, its legislative history, settled agency principles, and the contracts underlying issuance of the government cards leads me to conclude, as a matter of law, that the Air Force was Russell's \"authorized representative\" as contemplated by the RFPA. As Russell's \"authorized representative,\" the Air Force was a \"customer\" as defined by the RFPA. As a \"customer,\" the Air Force defendants were entitled to the financial information they obtained from American Express and Citicorp.\nIt is axiomatic that a statute will not be construed so as to yield an absurd result. Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 575, 102 S.Ct. 3245, 3252, 73 L.Ed.2d 973 (1982); Turner v. Davis, Gillenwater & Lynch, 4 F.3d 1556, 1564 (10th Cir.1993). To construe the RFPA as Russell would have me construe it would lead to the absurd result that a government employee could, under the cloak of the RFPA, abuse the public fisc or worse with impunity. Congress could never have intended such a result. Consequently, I conclude there is not a substantial likelihood that Russell will prevail on his RFPA claim.\n*1121 This statutory construction is in harmony with, although not controlled by, constitutional standards of privacy under the Fourth Amendment. Under this standard, the law will recognize as legitimate, a \"subjective expectation of privacy\" if the expectation is \"one that society is prepared to recognize as `reasonable.'\" Smith v. Maryland, 442 U.S. 735, 740, 99 S.Ct. 2577, 2580, 61 L.Ed.2d 220 (1979).\nRussell could not prevail under either prong of this test. Given the language of the agreements underlying issuance of the government cards coupled with Russell's agency relationship with the Air Force, Russell cannot credibly claim a subjective expectation of privacy in the records. Even if he could, taxpayer concern for the integrity of the public fisc undermines any claim that society would recognize as reasonable an expectation of privacy under the RFPA where Russell, as the agent and employee of the Air Force, was bound to use the government cards solely for travel related expenses incurred on government business.\n\n3. Collecting a Debt\nAir Force defendants also seek to justify disclosure to them of Russell's financial records incident to the financial institution's collection of a debt. 12 U.S.C. \u00a7 3403(d). I disagree.\nIt is undisputed that American Express sent the Air Force a 60-day delinquent list which included Russell's account. Master Sergeant Pio noticed and forwarded one or two of these delinquency notices to Russell's resource advisor. (Pio Testimony). In June, 1994, Pio called American Express and requested additional, more detailed financial information on Russell's account. In February, 1995, defendant Major Kurt Schuman, contacted Citicorp Diners Club and American Express and obtained further financial information on Russell's accounts. Schuman then drafted charges against plaintiff based on this information. (Schuman Declaration \u00b6 5).\nThe RFPA provides a \"debt collection\" exception. 12 U.S.C. \u00a7 3403(d) states:\n[n]othing in this chapter shall preclude a financial institution, as an incident to ... collecting on a debt owing either to the financial institution itself or in its role as a fiduciary, from providing copies of any financial record to any court or Government authority.\nThis subsection, written with the financial institution in mind, allows the financial institution to disclose financial records for the purpose of collecting a debt owed to it. \u00a7 3403(d) authorizes financial information to flow from the financial institution to government authorities which assist in the financial institution's collection of the debt owed to it.\nThe actions of American Express and Citicorp in notifying the Air Force of overdue accounts on the 60-day list seem consistent with collecting a debt. Thus, arguably, the information contained in the 60-day list is not subject to the RFPA. However, the actions and policy of the Air Force in response to the 60-day delinquent list belie their self-characterization as a \"debt collector.\"\nAmerican Express and Citicorp never formally requested the Air Force's assistance in collecting Russell's debts to them. Indeed, it is undisputed that the financial institutions engaged the services of a third-party civilian debt collection agency to collect from Russell. (TRO Exh. C and E). Also, Air Force guidelines for dealing with bad debts and financial responsibility include the following instructions:\nMembers are individually responsible\n\u0097 as a general rule, Air Force does not have legal authority to require members ... to pay personal debts\n\u0097 debt enforcement is a civil matter (do not \"take sides\" particularly when legal issues arise as to the validity of the debt)\n. . . . .\nCommanders should not act as debt collectors\n\u0097 do not admit or imply liability of a member in responding to complaints\n\u0097 do not divulge that administrative or disciplinary action will be taken\n\u0097 do not act as an intermediary for any party\n*1122 (Pltfs. Exh. 2, Military Commander's Deskbook p. 11-53).\nThese guidelines further undermine Air Force defendants' claim that they were acting in the role of a \"debt collector.\" Thus, I find and conclude that the Air Force was not acting as a \"debt collector\" under the RFPA in obtaining Russell's financial records.\nHaving decided that Russell has not shown clearly that he has a substantial likelihood of success on the merits, I need not address the remaining factors set forth in SCFC ILC, Inc. v. Visa USA, Inc., 936 F.2d 1096, 1098 (10th Cir.1991). Mitel, Inc. v. Iqtel, Inc., 896 F.Supp. 1050, 1057 (D.Colo.1995). Even if I were to address those factors at length, I could not find and conclude that Russell has met his burden.\nAccordingly, it is ORDERED that plaintiff Russell's motion for preliminary injunction is DENIED.\n"} -{"text": "\n564 N.E.2d 1280 (1990)\n206 Ill. App.3d 828\n151 Ill.Dec. 618\nALUMA SYSTEMS, INC., a foreign corporation, and the State of Illinois through its agency, the Capitol Development Board, for Use and Benefit of Aluma Systems, Inc., Plaintiff-Appellant,\nv.\nFREDERICK QUINN CORPORATION, C. Dew and Son, Inc., Conform Erectors, Inc. and the Fireman's Fund Insurance Company of Newark, New Jersey, and the State of Illinois through its agency the Capitol Development Board, Defendants-Appellees.\nNo. 1-87-3072.\nAppellate Court of Illinois, First District, Fifth Division.\nNovember 30, 1990.\n*1281 Nigro & Westfall, P.C., Glendale Heights, for plaintiff-appellant.\nO'Halloran, Lively & Walker, Chicago (Paul T. Lively, of counsel), for defendants-appellees Frederick Quinn Corp. and Firemen's Ins. Co. of Newark, N.J.\nPresiding Justice COCCIA delivered the opinion of the court:\nOn July 30, 1985, the Capitol Development Board (CDB), an agency of the State of Illinois, entered into a contract with Frederick Quinn Corporation (Quinn), as general contractor, for the construction of the Biotechnology Research Facility (hereafter, \"the Project\"), part of Chicago Technology Park at the University of Illinois, Chicago, Illinois. Quinn subcontracted a portion of its work, i.e., the concrete work, to C. Dew & Son, Inc. (Dew), which in turn subcontracted the concrete forming work to Conform Erectors, Inc. (Conform). Under the terms of a written agreement executed on or about September 9, 1985, Conform rented a variety of aluminum beam and other construction equipment from the plaintiff, Aluma Systems, Inc., a foreign corporation licensed to do business in Illinois. The contract between Conform and Aluma specifically stated that the equipment was rented for a three-month period, for use at the Project construction site. Conform, which never paid Aluma the amount due under the rental agreement, has since gone out of business and apparently filed for bankruptcy after the filing of this appeal.\nIn an effort to recover the $20,953.78 which it claims it is owed for its contribution to the Project, Aluma sought a remedy pursuant to section 23 of the Mechanics' Liens Act (Ill.Rev.Stat.1985, ch. 82, par. 23) (hereinafter referred to as section 23), which allows subcontractors of a general contractor employed by a public body to establish a lien on funds, in possession of *1282 the public body, which have not yet been paid but to the general contractor. It simultaneously brought a claim pursuant to \"An Act in relation to * * * contracts for public construction\" (Ill.Rev.Stat.1985, ch. 29, pars. 15, 16; hereinafter referred to as the Bond for Public Works Act, or the Bond Act), which permits recovery, on the general contractor's surety bond, of payments for labor and materials used in public construction projects. Firemen's Insurance Company of Newark, New Jersey (Firemen's), a defendant in this case and a party to this appeal, was Quinn's surety for the Project under the terms of a payment bond, to be discussed more fully below. Aluma is appealing from certain orders of the circuit court of Cook County, chancery division, dismissing with prejudice both counts of its complaint: Count I, asserting a claim under section 23; and Count II, relying on the Bond Act.\nIn order to adequately explain the issues raised by the parties and our resolution of those issues, it is necessary to set out the procedural history of this litigation in the context of the statutory requirements which govern the plaintiff's claims. Section 23, the section of the Mechanics' Liens Act (the Act) (Ill.Rev.Stat.1985, ch. 82, par. 1 et seq.) pertaining to public improvements, provides in relevant part:\n\"Any person who shall furnish material, apparatus, fixtures, machinery or labor to any contractor having a contract for public improvement for the State, may have a lien for the value thereof on the money * * * due or about to become due the contractor * * * by giving to the Director or other official, whose duty it is to let such contract, written notice of his claim for lien containing a sworn statement of the claim showing with particularity the several items and the amount claimed to be due on each. The claimant shall furnish a copy of said notice at once to the contractor. The person claiming such lien may cause such written notice with sworn statement of claim to be given either by sending such notice (by registered or certified mail, return receipt requested, with delivery limited to addressee only) to, or by delivering such notice to the Director or other official of the State whose duty it is to let such contract; and the copy of such notice * * * may be sent * * * or delivered to such contractor in like manner. * * * The person so claiming a lien shall, within 90 days after giving such notice, commence proceedings by complaint for an accounting, making the contractor having a contract with the State and the contractor to whom such material, apparatus, fixtures, machinery or labor was furnished, parties defendant, and shall, within the same period notify the Director * * * by delivering to him a copy of the complaint filed * * *. Failure to commence proceedings within 90 days after giving notice of lien pursuant to this subsection shall terminate the lien and no subsequent notice of lien may be given for the same claim nor may that claim be asserted in any proceedings pursuant to this Act. It shall be the duty of the Director, upon receipt of the written notice with sworn statement as herein provided, to withhold payment of a sum sufficient to pay the amount of such claim, for the period limited for the filing of suit * * *. Upon the expiration of this period the money * * * so withheld shall be released for payment to the contractor unless the person claiming the lien shall have instituted proceedings and delivered a copy of the complaint to the Director as herein provided, in which case, the amount claimed shall be withheld until final adjudication of the suit is had. * * *\" (Emphasis added.) (Ill.Rev.Stat.1985, ch. 82, par. 23(c).)\nAdditionally, section 23(a) states as follows:\n\"For the purposes of this Section `contractor' includes any sub-contractor; `State' includes any department, board or commission thereof * * *; and `director' includes any chairman or president of any State department, board or commission, or the president or chief executive officer or such other person financing and constructing a public improvement, for the benefit of the State.\" Ill.Rev. Stat. 1985, ch. 82, par. 23(a).\n*1283 The record reveals that Aluma, on September 12, 1986, sent a \"Notice of Claim for Lien on Public Funds and on Bond\" (the \"September 12 notice\") by certified mail, return receipt requested, to each of the following: Fred Garcia, Director of Physical Plant, University of Illinois, Chicago; Robert Conte, Project Manager, University of Illinois, Chicago; Attorney Diane Sagner, University of Illinois Counsel's Office, Chicago; Capitol Development Board, Stratton Office Building, Springfield, Illinois; Frederick Quinn Corporation; Conform Erectors; Dew Construction; and \"Fireman's [sic] Fund Insurance Company, Parsicppany, New Jersey.\" The notice included a sworn statement that Aluma was owed the sum of $19,422.47 for providing to Conform \"certain rental equipment\" for the Project, plus interest and attorney fees. However, it is undisputed that Gary Skoien, Executive Director of the State of Illinois Capitol Development Board, was in fact the \"Director or other official * * * whose duty it [was] to let the contract\" entered into by the CDB and Quinn. It is also undisputed that no copy of Aluma's September 12 notice was ever sent, delivered, or addressed specifically to Gary Skoien, or to the \"executive director\" of the CDB.\nAlso contained in the record on appeal is a letter dated September 9, 1986, and signed by Aluma's attorney. The letter is addressed to Fred Garcia, Director of Physical Plant, University of Illinois, Chicago. It requests from Garcia a copy of the bond posted on Quinn's contract for the Project, and further asks Garcia to \"advise as to the name, address and title of the State of Illinois official responsible for letting the contracts and [sic] thus should receive service of the Contractor's Claim for Lien on Public Funds.\" Plaintiff's attorney stated, in other court documents of record, that he received no response to this this letter. He further stated that his initial information from Aluma indicated that the Project was a University of Illinois at Chicago job; that upon personal investigation, he was advised by the University attorney's office and two other University employees that it was a University job and was given \"the name of the person who supposedly let the contract in behalf of the University.\" He then sent the letter to Garcia and filed the notice of lien claim three days later.\nOn October 27, 1986, Aluma sent its \"Second Notice of Claim for Lien on Public Funds and on Bond\" (\"the October 27 notice\"), by certified mail, return receipt requested, to the same addresses who were sent the September 12 notice, with two changes. Attorney Brian Higgins was substituted for Attorney Diane Sagner at the University of Illinois counsel's office, and \"Kenneth E. Delford, Office for Capitol Programs, University of Illinois, Chicago, Illinois\" was also notified. The October 27 notice included the same sworn statement as the previous notice, except that the sum owed to Aluma in rental fees was stated to be $20,953.78.\nOn November 6, 1986, Aluma filed an action in the circuit court of Cook County, chancery division (hereafter, \"the first lawsuit\"). Aluma's complaint, entitled \"Complaint to Foreclose Public Lien,\" named Quinn, Dew, Conform and the \"University of Illinois at Chicago, a subdivision of the State of Illinois\" as defendants. The complaint contained the following allegations: (1) that Aluma was a corporation \"engaged in the business of providing aluminum beam and related construction material and equipment\"; (2) that the University of Illinois at Chicago entered into a contract with Quinn for the construction of the Project, and that plaintiff did not have a copy of that contract; (3) that Quinn had subcontracted a portion of its work to Dew, which in turn had subcontracted a portion of its work to Conform; (4) that on September 9, 1985, Aluma entered into a \"subcontract agreement\" to rent certain materials to Conform and had performed every condition of that agreement; (5) that all of the material was \"accepted and incorporated into the [Project] premises * * * or used on said job * * *\"; and (6) that on August 15, 1986, \"the last date of delivery and work,\" the sum of $20,953.78 became due and remained due and unpaid. The complaint further stated that \"on September 12, 1986 and on October 27, 1986, Plaintiff notified *1284 [the] University of Illinois at Chicago of the abovementioned sums due to the Plaintiff for materials furnished and of its Claim for Lien * * * upon the money due to Quinn\" by certified mail, return receipt requested, and that \"it thereupon became the duty of the University * * * to withhold sufficient money to pay the amount due to Plaintiff * * *.\" Aluma requested from the court an accounting to determine the amount due; an order declaring Aluma to have a lien on the sums due and \"now in the possession of the University * * *,\" and an order directing the University to pay Aluma the amount found to be due, with interest and costs.\nAttached to Aluma's complaint in the first lawsuit was a copy of its contract with Conform and copies of the September 12 and October 27 notices of lien claim. The two-page agreement between Conform, \"as lessee,\" and Aluma, specifically states that plaintiff thereby agreed to supply to Conform certain \"Aluma and Hi-Load equipment\" for the \"Clarence Dew/Bio-Tech/Chicago Technology Park\" project for a three-month period beginning September 17, 1985, at a certain discount rental fee, and that an interest charge of 1.5% would be charged on overdue payments. The second page of the contract consists of a \"quantity breakdown sheet\" stating the various types and amounts of equipment rented, and its total monthly rental value.\nIt is apparent from other documents of record that sometime prior to December 8, 1986, the University filed a motion to dismiss Aluma's complaint. Plaintiff's attorney has stated in the record and at oral argument before this court that he first discovered that the Project was a CDB project at this time, and \"immediately\" endeavored to serve the correct public official. On December 8, 1986, Aluma sent a notice, titled \"Corrected Notice of Claim for Lien on Public Funds and on Bond\" (the \"December 8 notice\"), with sworn statement, by certified mail, return receipt requested, to each of the following: Gary Skoien, Executive Director, State of Illinois Capitol Development Board, Stratton Office Building, Springfield, Illinois; Charles Stevenson, Project Manager, State of Illinois Center, Chicago, Illinois; Quinn; Dew; Conform; and \"Fireman's [sic] Fund Insurance Company, Parsicppany, New Jersey.\" The sworn statement, including the sum of money claimed, was identical to that of the October 27 notice.\nOn January 9, 1987, Aluma sent another notice, labeled \"Second Corrected Notice of Claim for Lien on Public Funds and on Bond\" (the \"January 9 notice\"), also by certified mail, return receipt requested, and containing the same sworn statement, to the following: Gary Skoien; Charles Stevenson; Quinn; Dew; Conform; and \"Fireman's [sic] Insurance Company of Newark New Jersey * * *, New York, New York 10038.\"\nSubsequently, plaintiff moved to voluntarily dismiss the first lawsuit. On January 26, 1987, the same day as its motion was granted, it filed the suit which is the subject of this appeal (hereafter, the \"second lawsuit\"). Count I of Aluma's \"Complaint to Foreclose Public Lien and Other Relief\" contained essentially the same allegations as its complaint in the first lawsuit. However, the \"State of Illinois through its agency the Capitol Development Board\" was named as a defendant, along with Quinn, Dew and Conform, and plaintiff alleged that the CDB, instead of the University, had entered into the contract with Quinn. Plaintiff further stated, in Count I, that it had notified the CDB and all the officials therein listed, by a notice served by certified mail \"on December 12, 1986\" (the notice dated December 8), a copy of which was attached to the complaint. Count I did not mention the January 9 notice. It requested that the court take an accounting, that Aluma be decreed to have a lien, and that the CDB be ordered to pay to Aluma the amount due.\nCount II, naming Firemen's (incorrectly sued as \"Fireman's Fund\") as an additional defendant, asserted a claim based on the payment bond, pursuant to the Bond Act. It stated that within 180 days of the last date upon which material was furnished by Aluma, a notice of claim under the contractor's bond was given to the CDB, with copies sent to Quinn and Firemen's. The *1285 January 9 notice, as Exhibit IV, was attached to the complaint in support of these allegations. Also attached to the complaint were copies of Aluma's contract with Conform and Quinn's contract with the CDB, including the performance and payment bonds which formed an integral part of that agreement.\nQuinn filed its motion to dismiss on February 25, 1987, asserting that plaintiff's claim against it was barred by affirmative matter avoiding the legal effect of the claim, pursuant to section 2-619 of the Code of Civil Procedure. (Ill.Rev.Stat. 1987, ch. 110, par. 2-619(a)(9).) In support of its motion, Quinn pointed to the allegation in Aluma's complaint that it gave notice of its lien to the public body on December 12, 1986. Quinn contrasted this statement with the allegation in Aluma's earlier complaint, in the first lawsuit, that Aluma's claim for lien was served on the University on September 12, 1986, and noted that the September 12 notice was also served on the CDB. Quinn argued that pursuant to the express requirements of section 23, plaintiff was to have commenced its action prior to December 12, 1986, in order to meet the 90-day filing limitation, and that furthermore, the statute provides that \"no subsequent notice of lien may be given * * *.\" Thus, Quinn contended that Aluma's November 6, 1986, complaint, which Quinn attached to its motion, constituted affirmative matter barring the instant claim, which was based upon a purported lien which Aluma, by not adhering to the statute's procedural requirements, had never perfected.\nAlso on February 25, 1987, Firemen's moved to dismiss the claim asserted against it in Count II. Firemen's contended that Count II was deficient in two respects. First, while the payment bond specifically defined a \"claimant\" under the bond as \"any person, firm or corporation having contracts with Principal [Quinn] or with Principal's subcontractor [Dew] for labor or materials,\" Aluma had alleged only that it had contracted with Conform. Second, Aluma had not supplied \"labor or materials,\" but instead had only \"rented certain equipment.\" Citing Illinois case law in support of the premise that a surety on a payment bond is not liable beyond the express terms of its undertaking, which terms in this case did not include either material suppliers of sub-subcontractors or suppliers of rental equipment, Firemen's argued that Aluma was not entitled to relief under the bond.\nPlaintiff filed written memoranda in opposition to both motions to dismiss. With respect to Quinn's motion, plaintiff argued that only the public body, and not the general contractor, has standing to seek a dismissal based on an alleged defect in a notice of lien under section 23. It further contended that the September 12 and October 27 notices should be considered nullities, since they were not served on the proper State official named in the statute, and that because the instant case was filed within 90 days of the December 8 \"valid\" notice, it was commenced within the requisite statutory period and should not be dismissed. With respect to Firemen's motion to dismiss its claim under the Bond Act, Aluma argued that it fell within the express language of the statute defining those who were entitled to assert claims, and that the legislature had not intended to exclude persons in its position from recovery.\nOn May 26, 1987, the trial court heard arguments on the motions to dismiss. Counsel for Quinn and Firemen's maintained that Aluma was trying to circumvent the express language of section 23, which prohibits subsequent notices for the same claim, by claiming that its first two notices were \"invalid\" and that the period for commencing its lawsuit should run from the time of its \"valid\" notice of December 8. In its order granting Quinn's motion, the court found that \"plaintiff's notices of lien * * * dated September 12, 1986, October 27, 1986, and December 12, 1986 as served by Aluma are null and void.\" The court's order further stated that it did not need to consider the arguments related to Firemen's motion in order to dismiss the entire action, because \"the granting of Quinn's [m]otion * * * disposes of Firemen's [m]otion * * *.\"\n*1286 Aluma moved for reconsideration of the court's May 26, 1987, order. At the hearing on Aluma's motions to reconsider, defendants' counsel agreed with Aluma's position that the two motions to dismiss should have been considered separately. Both sides were permitted to reargue the merits of Firemen's motion, whereupon the trial judge found that Firemen's motion should be granted on \"grounds as re-enunciated.\" In an order dated September 16, 1987, the trial court denied plaintiff's motions to reconsider, granted Firemen's motion to dismiss, and found that there was no just reason to delay enforcement or appeal.\nOn appeal, Aluma presents the following issues for our review: (1) whether the trial court erred in granting Quinn's motion to dismiss its mechanics' lien claim (a) because Quinn, as general contractor, had no standing to challenge the sufficiency of its notice to the public body; or (b) because Aluma's December 8 notice satisfied the statutory requirements, and, as the first \"valid\" notice, allowed 90 days from December 8, 1986, in which to commence an action for an accounting and thus perfect the lien; or (c) because the spirit and intent of section 23 was not violated by successive notices where the previous notices were served on incorrect officials in good faith and the correct official was subsequently notified and a suit commenced within 90 days thereof; or (d) alternatively, assuming that this court finds its September 12 notice to be legally valid for purposes of section 23, because Aluma extended by one year the time period for filing its second lawsuit, by virtue of the involuntary dismissal of its first lawsuit, pursuant to provisions of the Code of Civil Procedure (Ill.Rev.Stat.1985, ch. 110, sec. 13-217); and (2) whether the trial court improperly granted Firemen's motion to dismiss Count II of Aluma's complaint because Aluma was an intended claimant under the provisions of the Bond Act and the payment bond posted by Quinn.\nOPINION\nWe observe at the outset that Counts I and II of plaintiff's complaint are separate and independent claims under different statutes. Consequently, Quinn's motion, challenging the mechanics' lien claim, and Firemen's motion, challenging the Bond Act claim, require separate analysis and determination.\nWe first address the trial court's order granting Quinn's section 2-619 motion to dismiss Aluma's public mechanics' lien claim. As a preliminary matter, we find no merit in plaintiff's contention that Quinn is challenging the validity of its September 12 notice based on service to the incorrect public official, and that only the public body has standing to seek dismissal on that ground. Aluma relies on Chicago Wood Piling Co. v. Anderson (1942), 313 Ill.App. 242, 39 N.E.2d 702, a section 23 case in which the court held that the original contractor was not in a position to question the sufficiency of notice given to the county by a subcontractor's supplier, citing prior case law for the premise that the question of whether notice is served on the proper official can be raised only by the party upon which notice must be served. (Chicago Wood Piling Co., 313 Ill.App. at 247-48, 39 N.E.2d at 704-705.) While contrary authority may also be cited (Pirola v. W.J. Turnes Co. (1909), 238 Ill. 210, 87 N.E. 354; Edwin Pratt's Sons' Co. v. Schafer (1937), 290 Ill.App. 80, 7 N.E.2d 901), we need not resolve the issue of standing because Quinn's motion to dismiss does not challenge the sufficiency or validity of the September 12 or October 27 notices, based on service to an incorrect official or any other defect. Quinn's motion alleges that Aluma, by filing successive notices for the same claim, and by filing the instant lawsuit more than 90 days after its first notice, failed to comply with the prescribed statutory procedure for perfecting a lien upon which a cause of action could be based. Certainly Quinn, as a defendant in the case, can assert as grounds for dismissal the plaintiff's failure to perfect the purported lien upon which its claim rests.\nIllinois case law on public mechanics' liens is not extensive. Issues relating to the procedural requirements, particularly, have not been well litigated and *1287 are not settled. (See, generally, Finch, A Primer on Illinois Mechanics' Liens, 75 Ill.Bar J. 500 (1987).) However, certain established principles must guide our analysis of the issues. Mechanics' liens, public or private, are wholly a creation of statute; no comparable right or remedy was recognized at common law or in equity. This fact has given rise to the well-settled rule that the Mechanics' Liens Act must be strictly construed with reference to all requirements upon which the right to a lien depends. (North Side Sash & Door Co. v. Hecht (1920), 295 Ill. 515, 129 N.E. 273; Eisendrath Co. v. Gebhardt (1906), 222 Ill. 113, 78 N.E. 22; Mixer v. Billingsley (1982), 110 Ill.App.3d 239, 66 Ill.Dec. 3, 442 N.E.2d 275.) Courts have specifically applied this general rule to liens on funds for public improvements under section 23. (See e.g., Alexander Lumber Co. v. Coberg (1934), 356 Ill. 49, 190 N.E. 99; Gunther v. O'Brien Brothers Construction Co. (1937), 293 Ill.App. 28, 12 N.E.2d 23, rev'd on other grounds (1938), 369 Ill. 362, 16 N.E.2d 890.) The burden of proving that each requisite has been satisfied is on the party seeking to enforce the lien. (Edward Electric Co. v. Automation, Inc. (1988), 164 Ill.App.3d 547, 549, 115 Ill.Dec. 647, 649, 518 N.E.2d 172, 174.) Furthermore, it has been stated that a mechanics' lien \"should be enforced when the party brings himself within the provisions of the statute, but it should not be extended to cases not provided for by the language of the act even though they may fall within its reason.\" Alexander Lumber Co. v. Coberg (1934), 356 Ill. 49, 53, 190 N.E. 99, 101; Hoier v. Kaplan (1924), 313 Ill. 448, 451, 145 N.E. 243, 244.\nThe above-stated rules of strict construction are followed by the courts despite the equitable nature of mechanics' liens procedures and despite section 39 of the Act, which states, \"This act is and shall be liberally construed as a remedial act.\" (Ill. Rev.Stat.1985, ch. 82, par. 39.) Thus, the effect of section 39 has not been to broaden the class of claimants to which the right of lien extends or to substantially ameliorate the necessity for strict procedural compliance in order to perfect a lien. While our supreme court has declined to establish filing requirements other than those expressly provided in the Act, not wishing to render validly perfected liens technically unenforceable, it remains the settled rule that \"the lien is valid only if each of the statutory requirements is scrupulously observed.\" (First Federal Savings & Loan Association v. Connelly (1983), 97 Ill.2d 242, 246, 73 Ill.Dec. 454, 456, 454 N.E.2d 314, 316.) Once a proper lien claimant has \"strictly complied with each of the statutory requirements, he has a right to expect that his lien will be completely enforceable.\" (Connelly, 97 Ill.2d at 251, 73 Ill. Dec. at 459, 454 N.E.2d at 319.) As one commentator has succinctly stated:\n\"The effect of [section] 39, therefore, is to liberalize the court proceedings necessary to enforce the right of lien created by the [Mechanics' Liens] Act. To obtain that right, however, one must comply strictly with the Act. It is this rule of strict construction which is chiefly responsible for the somewhat technical interpretation of the Act by the courts and for the difficulty often involved in exercising the rights created by it.\" Simon, Nature, Origin, and Classes of Mechanics' Liens, in Illinois Mechanics' Liens ch. 1, section 1.9 (Ill.Inst, for Cont. Legal Educ.1986).\nHowever, notwithstanding the strict construction generally given to all sections of the Mechanics' Liens Act, there is authority which favors some flexibility in applying the general rules, so that the statute's provisions are not construed so technically that its remedial purpose is undermined and all but lost in the process. For example, United Cork Companies v. Volland (1937), 365 Ill. 564, 7 N.E.2d 301, involved a complaint which alleged an incorrect completion date for the subcontractor's work on a private construction project. The completion date as alleged occurred two months before the claim was filed, while evidence showed that the final work was actually done several months after the filing of the claim, although plaintiff was requesting no payment for the work done subsequent to the filing. Our supreme *1288 court reversed the appellate court decision overturning the subcontractor's recovery in the trial court, based on this technical variance, and further stated:\n\"The doctrine of strict construction was never meant to be applied as a pitfall to the unwary, in good faith pursuing the path marked by the statute, nor as an ambuscade from which an adversary can overwhelm him for an immaterial misstep. Its function is to preserve the substantial rights of those against whom the remedy offered by the statute is directed, and it is never employed otherwise.\" (United Cork, 365 Ill. at 572, 7 N.E.2d at 305; see also First Federal Savings & Loan Association v. Connelly (1983), 97 Ill.2d 242, 251, 73 Ill.Dec. 454, 459, 454 N.E.2d 314, 319.)\nMoreover, in an early appellate decision, the court was required to apply the original language of section 23, which limited lien claimants to those furnishing materials to \"any contractor,\" excluding subcontractors, and yet upheld the lien of a supplier who had received an oral promise of payment by the contractor, but who delivered the materials to a subcontractor in reliance on the contractor's promise. The court concluded:\n\"While it has been said by the Supreme Court that this statute [is] in derogation of the common law and should be strictly construed, yet we do not believe that such a construction should be adopted as to deprive one of a remedy for the materials furnished and used in the erection of the building, if the proper notices have been given * * *. The object and purpose of the lien law is to protect those who in good faith furnish materials for the construction of buildings, and such persons ought not by a strict construction to be deprived of this remedy.\" Granite City Lime & Cement Co. v. Board of Education of School District No. 126 (1916), 203 Ill.App. 134, 140.\nMechanics' liens have a long history in Illinois, dating back to the first mechanics' lien statute in 1825, which created a contractor's lien on private real estate. (1825 Ill.Laws 101; S. Love, Illinois Mechanics' Liens 2 (2d ed. 1950).) In 1863 and 1869, statutes were enacted providing for subcontractors' liens (1863 Ill.Laws 57; 1869 Ill.Laws 255). With the passage of the Mechanics' Liens Act of 1895, a lien for labor performed and materials supplied to public improvements projects for the State, municipalities, and other governmental bodies, became part of Illinois law. (1895 Ill. Laws 226.) In 1903, a new mechanics' lien statute superseded all prior enactments. (1903 Ill.Laws 230.) The Mechanics' Liens Act of 1903, as amended, remains in force to the present day. The only section of the Act which pertains to liens on funds for public improvements (public mechanics' liens) is the current section 23, and it is a matter of settled law that only section 23 governs the preservation and enforcement of liens on public funds. (Alexander Lumber v. Coberg (1934), 356 Ill. 49, 54, 190 N.E. 99, 101; Anderson \"Safeway\" Guard Rail Corp. v. Champaign Asphalt Co. (1971), 131 Ill.App.2d 924, 929, 266 N.E.2d 414, 418; see also S. Love, Illinois Mechanics' Liens 425 (2d ed. 1950)). This is a reasonable rule, as the lien created by section 23 is materially different from all other liens established under the Act. A public mechanics' lien is available only to subcontractors, as it is a lien upon the funds awaited by, and due to, the original contractor. More significantly, it is a lien on the fund set aside for the public improvement, rather than upon the land where the building is located. 7A C. Nichols, Illinois Civil Practice, section 7577, at 420.\nSection 23 has been amended on numerous occasions since 1903, most often to implement changes in the technical notice and filing procedures and to gradually extend the limitation period for commencing suit from the original 30 days (1919 Ill. Laws 642), to the current 90 days after the filing of the lien claim notice. A 1935 amendment also extended the right of lien to sub-subcontractors and suppliers to subcontractors, where previously a lien had been available only to the general contractor's immediate subcontractor. (1935 Ill. Laws 950.) In order to resolve the issues presented, we will first need to focus on a 1979 amendment to section 23 which extended *1289 the period for commencing suit to its current 90 days, and added the language pertaining to a termination of the lien for failure to comply with the limitation period. The amendment also prohibited filing subsequent notices of lien for the same claim. Public Act 81-794, eff. Jan. 1, 1980 (amending Ill.Rev.Stat.1979, ch. 82, par. 23).\nThe applicable rules of statutory construction were well articulated in Koenig v. McCarthy Construction Co. (1951), 344 Ill. App. 93, 100 N.E.2d 338. In interpreting the language used in a statute,\n\"the primary aim is to ascertain the legislative intent [citation], which may be discerned from the history of the legislation or from the use of the terms in other sections of the same or other Illinois statutes. [Citation.] This approach must precede any analogy to interpretations of allegedly similar statutes by courts of other jurisdictions.\" (Emphasis added.) (Koenig, 344 Ill.App. at 97, 100 N.E.2d at 340.)\nIt has been further noted that the dissimilarity of the various mechanics' lien statutes makes judicial decisions based on the statutes of other states of little use in the construction of ours. (Hoier v. Kaplan (1924), 313 Ill. 448, 455, 145 N.E. 243, 245; Provost v. Shirk (1906), 223 Ill. 468, 475-76, 79 N.E. 178, 180-81.) Of course, the reviewing court's determination of the legislative intent must always begin with the statutory language itself. As our supreme court has recently reiterated, the express language of an enactment is the best indication of the intent of the drafters, and that language should be examined, and given its plain and ordinary meaning, before resort is made to other interpretive aids. Henry v. St. John's Hospital (1990), 138 Ill.2d 533, 540-542, 150 Ill.Dec. 523, 526-528, 563 N.E.2d 410, 413-415.\nPlaintiff, by any one of several arguments, urges us to find that, despite technical noncompliance, it has not violated the spirit and intent of section 23's procedural requirements in attempting to perfect a lien. It maintains that it is a proper lien claimant protected by the statute, and that under the particular circumstances here presented, it should not be deprived of an opportunity to establish its claim. For the reasons set forth below, we agree.\nAt the outset, we observe that there has been no suggestion by any party that plaintiff acted with anything but good faith in prosecuting its claim. Plaintiff contends, as it did in the circuit court, that it made its first effort to notify the correct public official after receiving incorrect and misleading information from several sources. Later, upon discovering its error, it acted promptly to notify the director whose duty it was to let the contract in question. At that point, plaintiff apparently believed that the most prudent course of action was to seek a voluntary dismissal of its first lawsuit and immediately file a new complaint, relying on its \"valid\" December 8 notice. Aluma feared that after it moved to amend its complaint, which would then relate back to the date of its original complaint (i.e., November 6, 1986) for the purpose of determining whether it was time barred, the court would deem its suit \"premature,\" because its first \"valid\" notice, to the correct official, had been sent after, not before, the date of its complaint for an accounting. By the express terms of section 23, the lien claim notice is a prerequisite for filing suit based upon the claim. Aluma therefore determined to commence an action that would unambiguously \"follow\" the requisite \"valid\" notice.\nThere are few reported cases dealing with the statutory notice provisions of section 23 as they relate to a misdirected notice or to the notification of an incorrect public official. While it is clear that the circuit court has jurisdiction over the subject matter of the claim, even if the lien notice is, for some reason, not valid (People ex rel. Anderson v. Village of Bradley (1937), 367 Ill. 301, 304-305, 11 N.E.2d 415, 418; A.J. Davinroy Plumbing & Heating v. Finis P. Ernest, Inc. (1980), 87 Ill. App.3d 1047, 1052, 42 Ill.Dec. 757, 759, 409 N.E.2d 372, 376), the law is unsettled as to the effect of procedural defects upon a plaintiff's attempt to perfect a lien.\n*1290 In Wilbur Waggoner Equipment Rental & Excavating Co. v. Johnson (1975), 33 Ill.App.3d 358, 342 N.E.2d 266, plaintiff furnished material and equipment for the demolition of a public high school and then attempted to claim a lien on the money due the original contractor. When defendants, officials of the school district, failed to withhold the money from the contractor, Waggoner sued the officials, in their individual capacities, for breach of their duty under section 23. The appellate court found that Waggoner was \"in neither literal nor substantial compliance with th[e] statute,\" as it had sent its lien claim notice to the \"Board of Education of District 189,\" attention of \"Miss Carol Frye,\" who apparently had no connection with the defendants, rather than directly to the defendants, business manager and superintendent, respectively, of \"School District No. 189.\" Furthermore, plaintiff had failed to commence a lawsuit within the then required 60 days of notice. (Waggoner, 33 Ill.App.3d at 362, 342 N.E.2d at 269-70.) Accordingly, the trial court had properly dismissed the damage claim against the two officials, because, \"in view of the failure of plaintiff to follow the procedure provided in section 23 no duty devolve[d] upon the officials charged.\" (Waggoner, 33 Ill.App.3d at 363, 342 N.E.2d at 270.) While Waggoner differs in important respects from the case at bar, particularly in that Waggoner never filed a lawsuit within the required time period after its \"insufficient\" notice, it does at least suggest that \"substantial compliance\" with the section 23 notice provisions might be held sufficient under different facts. Waggoner, 33 Ill.App.3d at 361-62, 342 N.E.2d at 269.\nAnother case raising an issue of substantial compliance is A.J. Davinroy Plumbing & Heating v. Finis P. Ernest (1980), 87 Ill.App.3d 1047, 42 Ill.Dec. 757, 409 N.E.2d 372. In Davinroy, plaintiff mailed its notice of lien to the county housing authority's attorney, among others, but not to the housing authority's chairman and executive director, who were the officials authorized to disburse funds under the relevant contract. Plaintiff urged the court to rule in its favor because of its \"substantial compliance\" with section 23. The court declined, based not only upon the defective notice, but also upon plaintiff's failure to file its suit within the prescribed time, and its failure to serve a copy of the complaint for that suit upon the correct official. As the court concluded, \"it [could] not be said that plaintiff * * * substantially complied with the act.\" (Davinroy, 87 Ill.App.3d at 1053, 42 Ill.Dec. at 761, 409 N.E.2d at 376.) Five months later, another appellate panel held that the mechanics' lien claim of a material supplier for a public school construction project should not have been dismissed. (O.E. Schrock, Inc. v. Blue Mound School District (1981), 92 Ill.App.3d 1138, 1140, 48 Ill.Dec. 459, 461, 416 N.E.2d 732, 734.) The only defect in Schrock's compliance with statutory procedure was that the copy of its complaint, timely served upon, and admittedly received by, the correct school board official, was not certified. The court stated that this one technical error, in what was otherwise perfect compliance with section 23, would not invalidate plaintiff's claim. Schrock, 92 Ill.App.3d at 1139, 48 Ill.Dec. at 460, 416 N.E.2d at 733.\nWhile the above-cited cases are useful, in that they illustrate the willingness of reviewing courts to at least consider the \"substantial compliance\" argument when deciding notice and filing questions, the older case of Edwin Pratt's Sons' Co. v. Schafer (1937), 290 Ill.App. 80, 7 N.E.2d 901, most closely parallels the case at bar on its facts. The defendants in Pratt contended, inter alia, that plaintiff had lost its lien because it had initially filed a notice on March 28, 1929, with the Illinois Director of Purchases and Construction, and other officials, rather than with the Director of Finance, as then required by section 23. Plaintiff subsequently filed another notice, on May 2, 1929, with the correct State officials, and then filed suit on May 15, 1929, within the then applicable 30-day limitation period as measured from the second notice. It had never commenced an action within 30 days of its first, defective notice. The court, holding that the plaintiff had not lost its lien under these facts, concluded:\n\n*1291 \"The lien was not enforceable unless the sworn statement was filed with the officials named in the section. (Pirola v. Turnes Co., 238 Ill. 210 [87 N.E. 354].) The sworn statement, or claim for lien, in the present case not having been filed with the officials named in the section, was irregular and defective. In cases of this kind, where the claim for lien is defective and not sufficient in law, the lien claimant is entitled to fix and attach his lien by filing a second claim for lien. Berger Mfg. Co. v. New York, 206 N.Y. 24, 99 N.E. 153 (See, also, 40 C.J. 177).\" Pratt, 290 Ill.App. at 87, 7 N.E.2d at 904.\nAlthough the approach taken by the Pratt court seems inherently practical and fair, we observe that Pratt was announced at a time when neither section 23 nor the analogous New York statute set any limit on the number of notices a lien claimant could file for the same claim. In 1979, the Illinois legislature amended section 23 to prohibit successive notices, while at the same time extending the limitation period for commencing suit to 90 days following the notice date. The legislative history of the amendment reveals that Public Act 81-794, which incorporated the changes into section 23, began as Senate Bill 1140, sponsored by Senator Walsh. (Pub.Act 81-794, eff. Jan. 1, 1980.) As originally introduced, the bill would have provided for the termination of any lien for which no suit was commenced within the limitation period, but would have retained the 60-day limitation period then in effect. (81st Gen.Assem., Senate Proceedings, May 22, 1979, at 155.) However, the House committee to which the bill was assigned adopted an amendment to the bill, after consultation with construction industry representatives and other interested parties, which essentially became the final version of Public Act 81-794. As enacted, the amendatory legislation, inter alia, extended the limitation period from 60 to 90 days following the lien claim notice, and inserted the express language providing that \"[f]ailure to commence proceedings within 90 days after filing notice of lien pursuant to this paragraph shall terminate the lien and no subsequent notice of lien may be filed for the same claim nor may that claim be asserted in any proceedings pursuant to this Act.\" Ill.Rev.Stat.1979, ch. 82, par. 23.\nFrom the legislative history we may discern some general objectives behind the new language of section 23. Senator Walsh explained that the provision for forfeiture of the lien if a suit was not commenced within the limitation period was inserted for the purpose of adding a \"sanction\" for failure to file a timely lawsuit, as opposed to simply stating the limitation period. (81st Gen.Assem., Senate Proceedings, May 22, 1979, at 155.) The bill's House sponsor, Representative Daniels, stated that with a 90-day limitation period, there was a \"greater possibility that settlements [might] be reached without the necessity for court action.\" 81st Gen.Assem., House Proceedings, June 19, 1979, at 135.\nThe most extensive discussion of Senate Bill 1140 occurred on June 13, 1979, when the House Judiciary I Committee heard testimony from construction industry spokesmen and entertained questions from legislators, before voting to adopt the amendment to the original bill. At this time, Robert Maher, representing an organization comprising a large segment of the Illinois construction industry, testified as a proponent of the bill at the request of Representative Daniels. Maher explained that the changes in section 23 had been drafted with input from many interested parties, including contractor and subcontractor groups, insurance industry groups, and State agencies. He further stated that those involved believed that there was a need to clarify the language in the Act regarding the forfeiture of liens on public funds for failure to file suit within the time prescribed. The clarification was necessary, according to Maher, because a practice had developed in Illinois, over the years, despite the express 60-day limitation period, whereby subcontractors would, for example, file a notice of lien, then \"wait 55 days,\" then file \"a successive notice,\" then wait another 55 days and file another notice, all for the same claim. This practice would both tie up public funds and \"circumvent the intent of the General Assembly *1292 and the law\" that in order to enforce a public mechanics' lien, one must file a lawsuit within the prescribed time. In Maher's words, he believed that, in order to \"protect the public body,\" it was necessary to \"clean up these contracts.\" (81st Gen.Assem., House Proceedings, June 13, 1979, Judiciary I Committee (taped debate on Senate Bill 1140).) While the above comments and testimony shed some light on the legislative intent behind the amendment, our research has uncovered no discussion or debate specifically focusing on the language which forbids \"subsequent notice of lien * * * for the same claim.\" This is the language upon which Quinn's motion to dismiss essentially relies.\nThe procedure followed by Aluma must be viewed in light of the express language of section 23, the legislative intent in amending the statute in 1979, and the applicable legal rules. With respect to the September 12 notice, we believe that the facts as presented support a ruling in favor of Aluma's substantial compliance with the statute and the validity of that notice under section 23. Notice to the Capitol Development Board, generally, did not in itself constitute compliance with the requirement of giving notice to the correct public official, i.e., its Executive Director, Gary Skoien. He was not notified until December 8. However, this court was informed at oral argument that Project Manager Robert Conte, who was sent the September 12 notice, apparently had duties directly related to the letting and execution of the contract. Furthermore, none of the parties have alleged that the State did not receive actual notice on or about September 12, 1986, or did not withhold the requested funds on the basis of that notice. While plaintiff would have been wise to pursue further its inquiries concerning the identity of the public official whose duty it was to let the contract, the fact remains that Aluma made numerous good faith efforts to serve notice on the correct public official, while at the same time directing notice of its claim to individual State employees at the University who undisputedly had some connection with the management of the project or the Quinn contract, as well as to the Capitol Development Board, generally.\nEqually important, Aluma filed a complaint for an accounting well within 90 days of its first notice. By December 8, still within 90 days of its September 12 notice, all of the correct persons had been sent proper notice of the claim. At this time, plaintiff had an action for an accounting filed and pending in the circuit court. In retrospect, we might question plaintiff's decision to request a voluntary dismissal in order to file a new complaint, naming the CDB as defendant and relying on what it believed would be an unquestionably \"valid\" notice of lien claim, but we can certainly understand the confusion which could arise in such a situation. Forfeiture of the lien for filing suit \"prematurely\" and failure to serve Gary Skoein with a copy of the November 6 complaint were both of concern. Having considered all of these factual circumstances, and the equitable concerns of justice and fundamental fairness, we hold that plaintiff's September 12 notice substantially complied with the statutory requirements, so as not to result in forfeiture of its purported lien for reasons of defective service or otherwise, and that the September 12 notice constituted a valid lien claim notice pursuant to section 23.\nIt is, however, the sending of successive notices, and not any defect in plaintiff's first notice, which is the substance of Quinn's objection to the claim and the basis for its motion to dismiss. We can glean from the legislative history that the objective of the express \"forfeiture\" and \"subsequent notice\" language added to section 23 was essentially to eliminate the tying up of public monies, for more time than reasonably necessary, based solely upon the unverified and unadjudicated claim notices of subcontractors. While subcontractors were still permitted to file the notice for a particular claim at any time, as long as funds remained in the hands of the State, and while they were given an additional 30 days to conduct negotiations and get to the courthouse, after the claim was filed, they were limited to one notice per claim. This would ensure that any necessary litigation *1293 would commence promptly and be completed within a reasonable time, and that an individual subcontractor, by filing successive claims for large sums of money, could not exert unwarranted leverage on other parties while causing de facto extension of the 90-day filing period.\nWe do not believe that any of these objectives were undermined by Aluma's attempts to comply with statutory procedure. While we acknowledge that the statutory provision could be read as imposing an absolute ban on notices subsequent to the first, even if sent only for purposes of correction, and even if the only suit ever brought on the claim was filed within 90 days of the first notice and in reliance thereon, we find the language to be somewhat ambiguous in the context of the entire sentence, \"Failure to commence proceedings within 90 days after giving notice of lien pursuant to this section shall terminate the lien and no subsequent notices of lien may be given for the same claim, nor may that claim be asserted in any proceedings pursuant to this Act.\" (Emphasis added.) (Ill.Rev.Stat.1985, ch. 82, par. 23(c).) As previously noted, we were unable to find any legislative history to aid in the interpretation of the \"subsequent notice\" provision, except for the brief testimony of a non-legislator proponent, focusing on the overall objective of eliminating practices which undercut the legislative intent in establishing a strictly limited filing period. While the express language of this provision is ambiguous, it is evident that Aluma's course of action in prosecuting its claim did not contravene the spirit and objectives of the amendment, as we can best discern them. The statute gives plaintiff, in defendants' words, \"one bite at the apple,\" and that is all it attempted to take. It attempted to pursue one claim for approximately $20,000 in rental fees, with suit for an accounting filed within 90 days of notice of that claim, and with proceedings continuously and actively pursued thereafter. To hold that, under all the intendant circumstances, Aluma forfeited its lien for filing the successive corrected notices would be unduly harsh and inconsistent with the remedial purpose of section 23. We therefore decline to do so.\nNonetheless, we wish to emphasize that our holding is limited to the particular circumstances of the case at bar. We are not suggesting that a lien claimant who files a notice with an incorrect official may later file another notice to correct the situation and then take up to 90 days from the corrected notice to file suit. The possibilities for abuse and confusion which would result from such a ruling are obvious. The intent of the legislature, that one notice be filed per claim, and that claimants who do not file suit within 90 days of that one notice forfeit their lien, seems clear. Beyond that, we are not willing to construe the prohibition against \"subsequent\" notices so strictly that it precludes recovery by a lien claimant who proceeded in good faith in the manner outlined here, without undermining the spirit of the statute or prejudicing defendants or third parties.\nBefore proceeding to other issues, we would also observe that section 23 provides no mechanism by which the public body may confidently determine whether a lien claim notice is \"valid\" or \"insufficient\" for the purpose of starting the 90-day limitation period. It appears that, in practice, when the public body receives actual notice of a claim, it withholds the amount claimed, although it may not be under a legal duty to do so where notice was not sent to the correct official. (See Wilbur Waggoner Equipment Rental & Excavating Co. v. Johnson (1975), 33 Ill.App.3d 358, 362, 342 N.E.2d 266, 270.) For this reason, among others, clarification of certain provisions of the notice and filing requirements of section 23 might serve the interests of fairness and efficiency in their practical application. Such concerns, however, are properly addressed by the legislature. In the case at bar, plaintiff will be permitted, on remand, to amend its complaint to allege a valid September 12, 1986, notice of lien claim, and Count I of its complaint will be deemed to relate back to the original November 6, 1986, filing date for the purpose of meeting the 90-day filing requirement. In addition, the subsequent service of the complaint upon the correct public official *1294 will be deemed effective to comply with the statutory provision requiring service on that official within the 90-day filing period. Finally, although plaintiff's September 12 notice stated that $19,422.47 was unpaid and owing on its rental contract, while its October 27 notice stated for the first time that it was claiming $20,953.78, we do not feel that a limitation of its claim at this point in time would serve any useful purpose, or serve the ends of justice. As it appears that the State has withheld the larger amount to cover Aluma's claim, its complaint may stand as to the amount requested.\nAlthough unnecessary for the disposition of this appeal, we will briefly address Aluma's alternative argument relating to involuntary dismissal under section 13-217 of the Code of Civil Procedure (the Code). (Ill.Rev.Stat.1985, ch. 110, par. 13-217.) Essentially, Aluma contends that, assuming arguendo the legal sufficiency of its September 12 notice, it had an absolute right to voluntarily dismiss its first, timely filed lawsuit, and to refile its complaint anytime within a one-year period, pursuant to section 13-217. The statute provides, in relevant part:\n\"In the actions specified in Article XIII of this Act or any other act or contract where the time for commencing an action is limited, if * * * the action is voluntarily dismissed by the plaintiff, * * * the plaintiff * * * may commence a new action within one year or within the remaining period of limitation, which-ever is greater, * * * after the action is voluntarily dismissed * * *.\" (Emphasis added.) Ill.Rev.Stat.1985, ch. 110, par. 13-217.\nAs plaintiff correctly points out, the Illinois Appellate Court, Fourth District, held in one case that a subcontractor who took a voluntary nonsuit of his complaint to foreclose a private mechanics' lien under section 21 of the Act, could file a new complaint for the same cause of action anytime within one year following the voluntary dismissal order, in reliance on the predecessor provision to section 13-217 of the Code. The court held that the subcontractor could do so despite the fact that the two-year statute of limitations, which applies to private mechanics' lien claims, had already run. (Ill.Rev.Stat.1979, ch. 82, pars. 7, 9, 21; LaBarge, Inc. v. Corn Belt Bank (1981), 101 Ill.App.3d 741, 744, 57 Ill.Dec. 161, 163, 428 N.E.2d 711, 713.) LaBarge has never been overruled on this point, nor has any appellate decision extended its rationale and holding to a situation involving a section 23 claim. Thus, the question of whether a proper section 23 lien claimant, who strictly complied with all procedural requirements in perfecting a lien, and who timely filed suit within the limitation period, may obtain a voluntary dismissal of the action and then refile the same cause of action anytime within the next year, has not been decided. As we are not required to rule on this issue under the facts of the instant case, we decline to do so. However, we would observe that commencing an action for an accounting within the 90-day limitation period of section 23 is an absolute prerequisite to a right of action under that section, not merely a limitation upon the amount of time allowed to enforce that right. It is also a limitation period which the legislature has been slow to extend, over the course of a century, from the original 30 days to the current 90 days, while taking steps, discussed above, to prevent its de facto extension by claimants. These factors will no doubt need to be considered in resolving the apparent conflict between the two statutory provisions.\nWe have held that Aluma's purported lien was not forfeited for reasons of procedural noncompliance. However, this holding can only aid plaintiff's position if Aluma is also within the general category of claimants who are entitled to protection under the statute. Quinn contends that plaintiff is not a proper lien claimant under section 23 because it is a supplier to a sub-subcontractor, occupying the fourth tier in the contractual chain from the original contractor. Our research has revealed no Illinois case upholding the lien rights of a fourth-tier claimant. Nor have we located a decision holding that such suppliers, as a matter of law, do not fall within the statute's protection. However, we believe *1295 that the case of Koenig v. McCarthy (1951), 344 Ill.App. 93, 100 N.E.2d 338, provides ample authority for holding that Aluma's claim is covered by the mechanics' liens statute.\nThe facts of Koenig are substantially similar to those of the instant case in certain aspects. In 1948, the City of Joliet engaged McCarthy Construction Company (McCarthy) as general contractor for the construction of a sewer system. McCarthy contracted with Gomorra & Girot Construction (Gomorra) for the system's precast manhole rings. Gomorra contracted with R.H. Koenig & Son (Koenig), which was to furnish wooden and steel forms for the concrete manhole rings. Koenig delivered the forms to Gomorra, who did not pay Koenig for them. It was stipulated that McCarthy originally had no knowledge of the contract between Koenig and Gomorra, but was served with notices of unpaid claims under the Mechanics' Liens Act. The circuit court ruled that Koenig had a section 23 lien on the funds held by the City of Joliet and due to McCarthy, to the extent of Koenig's unpaid balance, due from Gomorra. On appeal, the defendants argued, on grounds not relevant here, that Gomorra was not in fact a \"subcontractor,\" and that therefore Koenig could not be a supplier to a \"subcontractor,\" and thus entitled to a lien.\nIn resolving the issues presented, the Koenig court was required to interpret the term \"subcontractor\" as it appears in the Mechanics' Liens Act, and to apply that interpretation to the language of the 1935 amendment to section 23, extending lien rights to suppliers of \"subcontractors.\" (1935 Ill.Laws 950.) The specific language at issue, which remains part of the current section 23, declares simply, \"For the purposes of this Section `contractor' includes any sub-contractor.\" (Emphasis added.) (Ill.Rev.Stat.1985, ch. 82, par. 23(a).). While the 1935 amendment was clearly a reaction to a court decision construing the section as limited to those contracting directly with or supplying the original contractor (see Alexander Lumber Co. v. Coberg (1934), 356 Ill. 49, 190 N.E. 99), the amendment did not specifically define the term \"sub-contractor\" as used in section 23. Moreover, there was, and is, no legislative history which could shed some light on the particular meaning intended by the General Assembly. Accordingly, the Koenig court looked to section 21 of the Mechanics' Liens Act, which then stated in relevant part:\n\"Every mechanic, workman or other person who shall furnish any materials, apparatus, machinery or fixtures, or furnish or perform services or labor for the contractor, or shall furnish any material to be employed in the process of construction as a means for assisting in the erection of the building or improvement in what is commonly termed form or form work, where concrete, cement or like material is used in whole or in part, shall be known under this act as a subcontractor * * *.\" (Emphasis added.) (Ill.Rev.Stat.1949, ch. 82, par. 21.)\nThis language, virtually unchanged in the present version, was added to section 21 and other sections of the Act in 1913. (1913 Ill.Laws 400.) Applying the language in section 21 to the declaration of section 23, added in 1935, that \"contractor\" included for purposes of that section \"any subcontractor,\" the court concluded that Koenig was entitled to a lien as a supplier to Gomorra. The court reasoned as follows:\n\"Thus, it appears that, under a reasonable interpretation of the [Mechanics' Liens] Act, plaintiffs, who furnished the materials employed in the construction of sewer rings, involving forms work and the use of concrete, as well as defendant Gomorra * * *, which provided the completed sewer rings, can properly be regarded as subcontractors under the definition in the Lien Act. Inasmuch as plaintiffs furnished these materials to another subcontractor for the construction of a public improvement and gave proper notice of their unpaid claims, plaintiffs were properly entitled to a lien on the money * * * due the defendant McCarthy Construction Co. * * *.\" (Emphasis *1296 added.) Koenig, 344 Ill.App. at 99-100, 100 N.E.2d at 341.\nKoenig has not been overruled in its holding that both Gomorra and Koenig were \"subcontractors,\" by virtue of having furnished material to be employed in the process of construction as a means of assisting in concrete form work, and has been cited as authority for that proposition. (24 ALR 4th 963, 989 (1983).) The same reasoning applied in Koenig is logically applied to the facts of the instant case. All of the parties agree, as stated in their briefs submitted to this court and at oral argument, that Quinn subcontracted the concrete work on the Project to Dew, who subcontracted the concrete forming work to Conform, and that Aluma supplied Conform with concrete forms and related equipment which was used in the process of construction. Therefore, like Koenig, Conform was certainly a \"subcontractor\" within the statutory meaning of that term, and arguably Aluma as well. It is also undisputed that there was a written contract between Conform and Aluma which on its face tied Aluma's rental equipment directly to the \"Clarence Dew/Bio-Tech/Chicago Technology Park\" project. Accordingly, we hold that Aluma was, by virtue of being a supplier to a subcontractor, a proper lien claimant within the protection of section 23. While Aluma's complaint did not specifically allege that the rental equipment it provided consisted of concrete forms or was otherwise utilized in concrete forming work on the Project, it seems highly likely that Aluma will be able to establish this fact at trial. Therefore, plaintiff should be permitted to amend its complaint to include this allegation. See Douglas Lumber Co. v. Chicago Home for Incurables (1942), 380 Ill. 87, 94-95, 99, 43 N.E.2d 535, 538, 540.\nFinally, we find no reason to believe that Aluma's section 23 claim should be excluded because its equipment was rented, rather than supplied to and consumed in the building project. There is authority for the conclusion that, either by virtue of having provided rental equipment for use in the construction process (see New Erie Coal v. McMullen & Sons (1928), 247 Ill.App. 515), or by virtue of having provided equipment used in the process of concrete form work (see D.D. Kennedy, Inc. v. Lake Petersburg Association (1964), 54 Ill.App.2d 85, 107-108, 203 N.E.2d 145, 152-153), Aluma's claim for the rental value of its equipment is within the ambit of the Mechanics' Liens Act.\nOnce again, it is important to state that our holding is limited to finding that Aluma, under the facts of this case, is a proper lien claimant within the scope of section 23, being a supplier to a subcontractor, as that term has been interpreted in Koenig. There is no need, for the purpose of deciding the issues presented, to consider the broader question of whether section 23 extends to fourth-tier claimants, generally, or to all those, who in a direct chain of contracts leading to the prime contractor, perform services in furtherance of the original contract.\nWe turn next to that portion of the trial court's order granting Firemen's motion to dismiss plaintiff's claim under the Bond Act. Firemen's contends that plaintiff's claim must fail for two reasons: (1) Aluma is not a proper claimant under the terms of the payment bond, or within the meaning of the statute, because it did not have a contractual relationship with either the general contractor (Quinn), or the general contractor's subcontractor (Dew) and (2) Aluma did not supply labor or materials, which are within the bond's coverage, but instead furnished rental equipment, which is outside the scope of coverage.\nThis court has held that the Bond Act provides a separate and alternative remedy to that afforded by section 23 of the Mechanics' Liens Act. (Northwest Water Comm'n v. Carlo V. Santucci (1987), 162 Ill.App.3d 877, 898, 114 Ill.Dec. 132, 146, 516 N.E.2d 287, 301; City of Chicago ex rel. Charles Equipment Co. v. United States Fidelity & Guaranty Co. (1986), 142 Ill.App.3d 621, 626, 96 Ill.Dec. 809, 812, 491 N.E.2d 1269, 1272.) The purpose of sections 1 and 2 (Ill.Rev.Stat.1985, ch. 29, pars. 15 and 16), of the Bond for Public Works Act is to protect payment to contractors *1297 and materialmen for whom no right of mechanics' lien exists against a public body, and to regulate claims against public monies. (Charles Equipment Co., 142 Ill.App.3d at 626, 96 Ill.Dec. at 812, 491 N.E.2d at 1272.) Unlike section 23 of the Mechanics' Liens Act, which limits the amount of a claimant's recovery to the sum still due its immediate contractor at the time the notice of lien is served (Decatur Housing Authority ex rel. Harlan E. Moore & Co. v. Christy-Foltz, Inc. (1983), 117 Ill.App.3d 1077, 1081, 73 Ill.Dec. 519, 522, 454 N.E.2d 379, 382; Koenig v. McCarthy Construction Co. (1951), 344 Ill. App. 93, 104, 100 N.E.2d 338, 343), recovery under the Bond Act is limited only by the total amount of the bond, which is provided by a surety (Housing Authority v. Holtzman (1970), 120 Ill.App.2d 226, 240, 256 N.E.2d 873, 880).\nAccording to section 1 of the Bond for Public Works Act:\n\"All officials, boards, commissions or agents of this State * * * in making contracts for public work of any kind to be performed for the State * * * shall require every contractor for such work to furnish, supply and deliver a bond to the State * * * with good and sufficient sureties. The amount of such bond shall be fixed by such officials, boards, commissions, commissioners or agents, and such bond, among other conditions, shall be conditioned for the completion of the contract, for the payment of material used in such work, and for all labor performed in such work, whether by subcontractor or otherwise.\n\nEach such bond is deemed to contain the following provisions whether such provisions are inserted in such bond or not:\n`The principal and sureties on this bond agree that all the undertakings * * * of the contract or contracts entered into between the principal and the State * * * will be performed * * * and to pay all persons, firms and corporations having contracts with the principal or with subcontractors, all just claims due them under the provisions of such contracts for labor performed or materials furnished in the performance of the contract on account of which this bond is given * * *.'\" (Emphasis added.) (Ill.Rev. Stat.1985, ch. 29, par. 15.)\nSection 2 of the Bond Act, outlining the procedure by which a claimant may recover on the surety bond, declares that:\n\n\"Every person furnishing material or performing labor, either as an individual or as a sub-contractor for any contractor, with the State * * * shall have the right to sue on such bond in the name of the State * * * for his use and benefit * * *.\" (Emphasis added.) (Ill. Rev.Stat.1985, ch. 29, par. 16.)\nSection 2 also contains the Bond Act's technical notice and filing provisions, which are not germane to this appeal. The parties agree that plaintiff complied in every way with the procedural requirements of the statute.\nAs mandated by section 1, Quinn provided both a performance bond and a payment bond for the Project, with Firemen's as surety. The terms of the payment bond expressly provided:\n\"1. A claimant is defined as any person, firm or corporation having contracts with Principal or with Principal's subcontractor for labor or materials furnished in the performance of the Contract on account of which this bond is given.\n2. Nothing in the Bond * * * shall be taken to make the Obligee liable to any subcontractor, materialman, or laborer, or to any other person to any greater extent than it would have been liable prior to the enactment of an act entitled `An Act in Relation to Bonds of Contractors Entering into Contracts for Public Construction,' approved June 20, 1931, as amended * * *.\" (Emphasis added.)\nAlthough the express provisions of the statute are deemed to be contained in every bond for a public construction project, whether actually inserted in the bond or not, the contractor and its surety are free to contract with the public entity for additional liability which exceeds the *1298 statutory provisions. (Illinois State Toll Highway Comm'n v. M.J. Boyle & Co. (1962), 38 Ill.App.2d 38, 51, 186 N.E.2d 390, 396.) Here, it is apparent from the very precise language quoted above that the parties intended no such extension of liability. The coverage of the bond, therefore, both in terms of categories of claimants and types of materials covered, is no broader than what the statute itself would require.\nWith respect to claimants, the statute requires that all bonds guarantee payment to persons \"having contracts with the principal or with subcontractors.\" (Ill.Rev. Stat.1985, ch. 29, par. 15.) It reasonably follows that sub-subcontractors and suppliers to subcontractors (i.e., persons occupying the position of Conform) are statutorily permitted to recover. (Housing Authority v. Holtzman (1970), 120 Ill.App.2d 226, 256 N.E.2d 873.) As the Holtzman court observed, the Bond Act was originally enacted in 1931, four years before the legislature extended coverage of section 23 of the Mechanics' Liens Act to those who had not contracted directly with the principal contractor, and thus provided an alternative remedy for those not entitled to a lien. (Holtzman, 120 Ill.App.2d at 239, 256 N.E.2d at 880.) Although we have found no Illinois appellate case upholding a Bond Act claim by a supplier to a sub-subcontractor, or a person occupying the fourth tier in the contractual chain, we also have found no authority specifically excluding them from coverage.\nFiremen's points to the holding of the United States Supreme Court that recovery under the analogous federal statute, known as the Miller Act (40 U.S.C. section 270a-270d (1988), does not extend beyond a sub-subcontractor, and would exclude a fourth-tier claimant such as Aluma. (Clifford F. MacEvoy Co. v. United States (1944), 322 U.S. 102, 64 S.Ct. 890, 88 L.Ed. 1163; see also United States v. Idaho Crane & Rigging Co., (D.Idaho 1961), 193 F.Supp. 802.) The Court in MacEvoy stated:\n\"Congress cannot be presumed, in the absence of express statutory language, to have intended to impose liability on the payment bond in situations where it is difficult or impossible for the prime contractor to protect himself. The relatively few subcontractors who perform part of the original contract represent in a sense the prime contractor and are well known to him. It is easy for the prime contractor to secure himself against loss by requiring the subcontractors to give security by bond * * * for the payment of those who contract directly with the subcontractors. [Citations.] But this method of protection is generally inadequate to cope with remote and undeterminable liabilities incurred by an ordinary materialman * * *. To impose unlimited liability under the payment bond to those sub-materialmen and laborers is to create a precarious and perilous risk on the prime contractor and his surety. To sanction such a risk requires clear language in the statute and in the bond so as to leave no alternative.\" MacEvoy, 322 U.S. at 110-11, 64 S.Ct. at 895, 88 L.Ed, at 1169.\nThe Supreme Court in MacEvoy also construed the word \"subcontractor,\" as used in the Miller Act, to be \"a subcontractor who performs for and takes from the prime contractor a specific part of the labor or material requirement of the original contract,\" consistent with what it stated was the \"more technical meaning, as established by usage in the building trades,\" although \"[i]n a broad, generic sense a subcontractor includes anyone who has a contract to furnish labor or material to the prime contractor.\" (MacEvoy, 322 U.S. at 108-109, 64 S.Ct. at 894, 88 L.Ed, at 1168.) Nonetheless, whatever validity there may be to the Court's public policy rationale or its choice of definition for purposes of the Miller Act, neither can determine the construction and application of Illinois statutes. First, authority construing a federal statute is not binding on the courts of this State in interpreting our legislation. More importantly, the Miller Act is distinguished from the Illinois Bond Act in a significant respect. The Federal law's legislative history clearly supports the conclusion that Congress intended its protection to extend only to the level of a (third-tier) *1299 sub-subcontractor, and the MacEvoy decision was based in part on that legislative history. While the term \"subcontractor\" is undefined in the Bond Act, as it is in the Miller Act, there is neither legislative history nor case authority to guide a reviewing court in construing that term. However, we need not engage in statutory construction because we conclude that the second ground argued by Firemen's would in any event preclude Aluma's claim.\nPlaintiff's complaint in the instant case alleges, inter alia, that it \"entered into a subcontract agreement to rent certain materials to Conform Erectors, Inc., for the * * * [P]roject.\" A copy of this agreement, attached to the complaint, establishes that the contract was solely for the purpose of supplying rented equipment for a limited duration at a stated monthly fee. In 1976, a panel of this division addressed the question of rental equipment and machinery under the Bond Act, in a somewhat different but highly relevant context. Board of Local Improvements v. St. Paul Fire and Marine Insurance (1976), 39 Ill. App.3d 255, 350 N.E.2d 36.\nThe plaintiff in Board of Local Improvements had rented heavy construction equipment to a general contractor. The contractor's bond, while paralleling the statutory language in requiring payment to those \"furnishing materials for or performing labor in the prosecution of the work,\" expressly provided for additional coverage for \"all amounts due for materials, lubricants, oil, gasoline, coal and coke, repairs on machinery, equipment, and tools, consumed or used in connection with the construction of such work ...\" (Board of Local Improvements, 39 Ill.App.3d at 256-57, 350 N.E.2d at 38.) Plaintiff's loader was used at the job site for five months, but the rental fee was not paid by the subcontractor to which it was delivered. Subsequently, plaintiff sought recovery under the Bond Act for the rental fee, as well as for the amount expended for labor, service and parts used to repair and maintain the loader. This court agreed with the trial court that the bond as written provided greater coverage than that required by law, by virtue of the enumerated inclusions as well as the use of the phrase \"used in connection with the construction of such work.\" However, this court reversed the trial court's finding that the phrase, \"repairs on machinery, equipment, and tools,\" meant that the bond assured the payment of rental fees for use of equipment and machinery. The court reasoned that \"equipment\" was to be read only in the context of the phrase \"repairs on,\" and that, accordingly, only the claim for repair charges could survive. Board of Local Improvements, 39 Ill.App.3d at 258-59, 350 N.E.2d at 39.\nWhile Board of Local Improvements did not expressly hold that a bond which is merely coextensive with the mandatory coverage under the statute would not guarantee payment of rental fees for equipment used on a public works construction project, its rationale and holding are inconsistent with any other conclusion. Clearly, if we had concluded that the plaintiff in that case was entitled to rely upon the coverage deemed included in the bond by virtue of the statute, with or without broader language, its claim for rental payments for equipment used at the job site would have been valid. To date, although equipment rental claims have been upheld under section 23 of the Mechanics' Liens Act (see New Erie Coal v. H. McMullen & Sons (1928), 247 Ill.App. 515), no Illinois decision has construed the Bond Act, where the bond itself does not exceed the requirements of the statute, to guarantee payment for rental fees for equipment or machinery used on a job site but not consumed in the process of construction. Absent clear legislative intent to the contrary, we see no reason to depart from our prior holding in this regard. Accordingly, we find that the trial court did not err in dismissing Aluma's Bond Act claim.\nFor the reasons stated, we affirm the trial court's order of September 16, 1987, granting Firemen's motion to dismiss Aluma's claim against the surety bond. However, we reverse the trial court's order of May 26, 1987, which granted Quinn's motion to dismiss plaintiff's mechanics' lien claim and ruled that its notices of lien claim *1300 were null and void. We remand for further proceedings consistent with this opinion.\nIn so holding, we would make the following general observations. Legislation relating to public mechanics' liens is by its very nature technical and procedurally complex. It attempts to create an orderly process to fairly and expeditiously handle competing contractual claims in a specialized field with its own practices and terms of the trade. For important policy reasons, the legislature has created valuable rights and remedies which are available to certain categories of contributors to public works projects, but unavailable to creditors generally. Enforcement of such rights is necessarily limited to those who are clearly entitled to them under the relevant statutes. However, as the practices and economic realities of the construction industry and of public bodies change over the course of many decades, reviewing courts are called upon to construe and define the law in this area, in piecemeal fashion, working with precedents established decades earlier, while calling upon a limited body of case law and even more limited legislative history. All of these factors make the task of the reviewing court a difficult one at best, as our duty is to apply and interpret the law so as to carry out the intent of the legislature while affording substantial justice to the litigants. Legislative definition of various terms and further clarification of procedural requirements would no doubt greatly assist the courts in that endeavor.\nAFFIRMED IN PART; REVERSED IN PART AND REMANDED WITH DIRECTIONS.\nMURRAY and GORDON[*], JJ., concur.\nNOTES\n[*] Justice R. Eugene Pincham participated in this case prior to his resignation. Since that time Justice Joseph Gordon was designated the third members of the panel, has read the record and briefs, and has listened to the oral argument tapes.\n"} -{"text": "\n114 F.Supp. 392 (1953)\nJONCO AIRCRAFT CORP.\nv.\nFRANKLIN et al.\nCiv. A. 5122.\nUnited States District Court N. D. Texas, Dallas Division.\nJune 14, 1953.\nJudgment Reversed November 9, 1953.\n*393 Alto B. Cervin, Dallas, Tex., J. Rex Spurr, Shawnee, Okl., and John K. Pickens, Washington, D. C., for plaintiff.\nWallace C. Franklin Jr., Dallas, Tex., for defendants.\nBefore HUTCHESON, Chief Circuit Judge, ATWELL, Chief District Judge, and DAVIDSON, District Judge.\nJudgment Reversed November 9, 1953. See 74 S.Ct. 126.\nATWELL, Chief Judge.\nThe plaintiff is a Delaware corporation with its principal office in Shawnee, Oklahoma. The defendants are citizens of Dallas, Texas. More than $3,000 are involved, exclusive of interest and costs.\nThe plaintiff seeks relief from a threatened hearing before the defendant on complaint filed by the Wage Stabilization Board, alleging that it is not in compliance with the orders and statutes of the United States. That a hearing by said Board, and the consequent penalties and punishments, for which the plaintiff has no legal remedy at law, make it imperative that such hearing be not held, and that a restraining order issue from this court.\nAfter a careful analysis of the plaintiff's bill, the court concluded and called for the organizing of a three-judge court in *394 accordance with the statute, and, thereupon, Senior United States Circuit Judge of the Fifth Circuit was notified, and regulation notices were given to the Attorney General of the United States.\nSuch three-judge court heard the complaint, the answer thereto, and the arguments and testimony thereon, on Thursday, June 11, 1953, and conclude that the temporary restraint should be made permanent.\nThe plaintiff is engaged in the manufacture of precision tools and parts for the aircraft industry, and its plant is in Shawnee, Oklahoma. It is the largest producer of its kind in the mid-west, operating under fifteen prime national defense contracts, which include a majority of principal manufacturers of military aircraft. In excess of 98% of its production is for the national defense.\nThe defendants assert the power, as shown under E.S.A. General Order No. 15, to disallow a prior and unauthorized alleged payroll of plaintiff as of November 24, 1952, in the amount of $111,000, in addition to a total payroll of $575,000 for the period August 29, 1952 to February 2, 1953.\nThe burden and injury, because of the deprivation of Internal Revenue tax requirements and other penalties, fines, and indictments, required plaintiff to seek court refuge. See Defense Production Act 1950, as amended, 66 Stat. 296, Title 50 U.S.C.A.Appendix, \u00a7 2061 et seq.; also, General Order No. 15. 17 Federal Register 2994. Treating of the disallowance of wage payments, even for the entire amount. That such determination \"shall be final and not subject to review by the Tax Court of the United States, or, by any court in any civil proceeding. See also Bureau Internal Revenue ruling IT-4105, wherein it announces disallowance for tax purposes wage payments in amount certified to it by the economic stabilization agency. No provision is made for the review of such certifications by the Bureau of Internal Revenue.\"\nThe recital of the above is sufficient without going through the entire category, to show the seriousness of the penalties liable to be imposed upon the plaintiff.\nThe allegation is made that such Defense Production Act, as amended, is unconstitutional.\nSee such cases as United States v. Butler, 297 U.S. 1, 56 S.Ct. 312, 80 L.Ed. 477; Bailey v. Drexel Furniture Co., 295 U.S. 20, 42 S.Ct. 449, 66 L.Ed. 817; United States v. Constantine, 296 U.S. 287, 56 S.Ct. 223, 80 L.Ed. 233; Lilly v. Commissioner of Internal Revenue, 343 U.S. 90, 72 S.Ct. 497, 96 L.Ed. 769, and National Life Ins. Co. v. United States, 277 U.S. 508, 48 S. Ct. 591, 72 L.Ed. 968.\nUpon such questions as the delegation of legislative power, there is a line of decisions which classes it unconstitutional. See Carter v. Carter Coal Co., 298 U.S. 238, 56 S.Ct. 855, 80 L.Ed. 1160; Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446. There are no standards with which the President could be guided in determining the policy or wishes of Congress.\nAn order of the Board is subject to review by the designated court, and only when sustained by the court may the order be enforced. Upon that review all questions of the jurisdiction of the Board and the regularity of its proceedings, all questions of constitutional right or statutory authority, are open to examination by the court. N. L. R. B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 45, 57 S.Ct. 615, 81 L.Ed. 893. See also Stark v. Wickard, 321 U.S. 288, 309, 64 S.Ct. 559, 83 L. Ed. 733; Social Security Board v. Nierotko, 327 U.S. 358, 369, 66 S.Ct. 637, 90 L.Ed. 718; St. Joseph's Stockyards Co. v. United States, 298 U.S. 38, 73, 56 S.Ct. 720, 80 L.Ed. 1033. And these holdings support plaintiff's entrance here, and it is not obliged to pursue any so-called administrative remedy.\nHowever, defendants contend that since the General Savings Statute, 1 U.S. C.A. \u00a7 109, saves the liability for illegal wage payments made during the life of the Act, therefore, perforce administrative enforcement continues. That statute is concerned only with the preservation of judicial proceedings and it never has been contended or held that such savings statute preserved *395 administrative proceedings. U. S. v. Hark, D.C., 49 F.Supp. 95, reversed on other grounds, 320 U.S. 531, 64 S.Ct. 359, 88 L.Ed. 290, rehearing denied 321 U.S. 802, 64 S.Ct. 517, 88 L.Ed. 1089; Rodgers v. U. S., 6 Cir., 158 F.2d 835 reversed on other grounds, 332 U.S. 371, 68 S.Ct. 5, 92 L.Ed. 3.\nIt is also contended, and the contention seems to be correct, that the National Enforcement Commission has not been continued in existence by any executive order after April 30, 1953. The complaint against the plaintiff was issued on April 1, 1953 by the Board which acted through defendant Franklin, and who still purports to act. However, there has been no Wage Stabilization Board since December, 1952, when its members resigned.\nQuite recent decisions in this field may be found in Woodworth Co. v. Kavanagh, D.C., 102 F.Supp. 9, affirmed 6 Cir., 202 F. 2d 154. Also, in Aircraft & Diesel Equipment Corporation v. Hirsch, 331 U.S. 752, 67 S.Ct. 1493, 1503, 91 L.Ed. 1796, Mr. Justice Rutledge said, \"* * * The presence of constitutional questions, coupled with a sufficient showing of inadequacy of prescribed ministrative relief and of threatened or impending irreparable injury flowing from delay incident to following the prescribed procedure, has been held sufficient to dispense with exhausting the administrative process before instituting judicial intervention.\"\nHelpful also, in this interesting search for controlling authorities, are, Skinner & Eddy Corporation v. United States, 249 U.S. 557, 39 S.Ct. 375, 63 L.Ed. 772; Columbia Broadcasting System v. United States, 316 U.S. 407, 62 S.Ct. 1194, 86 L.Ed. 1563; Public Utilities Commission v. United Fuel Gas Co., 317 U.S. 456, 63 S.Ct. 369, 87 L.Ed. 396; Miguel v. McCarl, 291 U.S. 442, 54 S.Ct. 465, 78 L.Ed. 901.\nLikewise only a tripartite board, the members of which must be appointed by the President, by and with the advice and counsel of the Senate, as required by the Defense Production Act.\nThis is not a suit against the United States. The defendants cannot seek protection of their ultra vires acts by claiming that it is against the United States. Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 69 S.Ct. 1457, 93 L.Ed. 1628.\n\"Quite recent cases by two three-judge statutory courts may be helpful. They are Grand Central Aircraft Co. v. Allen, D.C. N.D.Cal., 114 F.Supp. 389, interlocutory injunction granted May 28, 1953 (defendant's motion for stay order to U. S. Sup. Ct. filed June 5, 1953, denied in memorandum order June 15, 1953, 345 U.S. 988, 73 S.Ct., Page 1128. Also Dumbarton Bridge v. Norbeck, D.C.N.D. of Calif., No. 32722 Civil, and Harold Peters v. Rasell, D.C.N.D. of Ill., Civil No. 53C982 (preliminary injunction entered May 15, 1953). Judge Holtzoff granted the same relief in Hoffman Machinery Co. v. National Enforcement Commission, D.C., Dist. of Columbia, Civil No. 2125-53 (preliminary injunction entered May 29, 1953).\"\nThe defendants concede that the entire violative payroll can be disallowed, and it is hardly logical for them to also assert that the amount of disallowance would be less than $10,000, or that they would only disallow such amounts for tax purposes, and would not disallow such wage payments as items of costs under plaintiff's government contracts. They cannot assure us that other statutory and administrative penalties would not be invoked at some time in the future, because they have no control over decisions of the National Enforcement Commission.\nThe facts set forth in the affidavit of Paul Willis show that plaintiff will suffer irreparable damage. For an indefinite period plaintiff will be subjected to the possibility of a huge penalty in the form of a disallowance for tax purposes, and in computing costs under its government contracts.\nIn the case of Woodworth v. Kavanagh, supra, plaintiff company received a determination on February 12, 1953, relating to its income tax liability for the years 1944 and 1945.\nIn addition, the Reconstruction Finance Corporation, and the participating bank, will call its loan a revolving credit fund *396 from which plaintiff is making its weekly payrolls, and the Air Force under its non-procurement policy, to allow sub-contracts to be let only to financially sound companies, will direct that plaintiff receive no more sub-contracts for tooling and aircraft parts. These are realities and require relief.\nFrom the foregoing it seems to us that irreparable injury will be suffered by the plaintiff if restraint is not granted and made permanent.\nHUTCHESON, Chief Circuit Judge, dissents.\n"} -{"text": "120 F.3d 272\n97 CJ C.A.R. 1415\nNOTICE: Although citation of unpublished opinions remains unfavored, unpublished opinions may now be cited if the opinion has persuasive value on a material issue, and a copy is attached to the citing document or, if cited in oral argument, copies are furnished to the Court and all parties. See General Order of November 29, 1993, suspending 10th Cir. Rule 36.3 until December 31, 1995, or further order.\nDonald Ray WILSON, Petitioner-Appellant,v.Steve HARGETT, Warden, Respondent-Appellee.\nNo. 97-6019.\nD.C. No. 96-CV-396\nUnited States Court of Appeals, Tenth Circuit.\nJuly 30, 1997.\n\nBefore SEYMOUR, PORFILIO, and MURPHY, Circuit Judges.\n\n\n1\nORDER AND JUDGMENT*\n\n\n2\nAfter examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed. R.App. P. 34(a); 10th Cir. R. 34.1.9. Therefore, the case is ordered submitted without oral argument.\n\n\n3\nPetitioner Donald Ray Wilson requests a certificate of appealability to appeal the district court's denial of his petition for writ of habeas corpus under 28 U.S.C. \u00a7 2254. We conclude Wilson is not entitled to a certificate of appealability and dismiss the appeal.\n\n\n4\nWilson was convicted by jury in the District Court of Garvin County, Oklahoma, of first degree murder and assault and battery with a dangerous weapon, and was sentenced to imprisonment for terms of life and fifty years, respectively. Wilson appealed his convictions to the Oklahoma Court of Criminal Appeals, and his convictions were affirmed in a summary opinion. Wilson's application for post-conviction relief filed in the District Court of Garvin County was denied, and his appeal of the denial was affirmed on the grounds of procedural default. See Okla. Stat. Ann. tit. 22, \u00a7 1086 (West 1986) (setting forth Oklahoma rule of procedural default).\n\n\n5\nHaving exhausted his state remedies, Wilson filed a \u00a7 2254 petition for writ of habeas corpus in federal district court, claiming (1) the state failed to prove the elements of first degree murder; (2) the trial court erred in admitting unreliable identification testimony; (3) the state failed to prove the elements of assault and battery with a deadly weapon, and (4) his trial and appellate counsel were ineffective in failing to raise these issues.\n\n\n6\nThe magistrate judge determined that issues one and two were properly denied in the state court habeas proceedings because they were not raised in the initial, direct appeal. As the district court correctly noted, federal habeas review of such procedurally barred issues is foreclosed \"unless the prisoner can demonstrate cause for the default and actual prejudice as a result of the alleged violation of federal law, or demonstrate that failure to consider the claims will result in a fundamental miscarriage of justice.\" Coleman v. Thompson, 501 U.S. 722, 750 (1991). Wilson asserts that ineffectiveness of counsel constituted cause for his procedural default. In considering the ineffectiveness of counsel claim, the district court considered the merits of issues one, two, and three in order to make a determination of whether Wilson's counsel erred in failing to raise the issues at trial or on direct appeal. The court found each of the issues meritless. The court therefore found that the ineffectiveness of counsel claim was also meritless and did not constitute cause for procedural default. Having considered and rejected each of the issues raised in the petition, the court dismissed the petition. The district court also denied Wilson's application for a certificate of appealability. In his certificate of appealability application to this court, Wilson reasserts the issues raised in his petition below.\n\n\n7\nUnder 28 U.S.C. \u00a7 2253, Wilson's appeal may not be considered unless a certificate of appealability is issued. A certificate of appealability will be issued only if the issues raised are debatable among jurists of reason, if a court could resolve the issues differently, or if the questions presented are deserving of further proceedings. See Lennox v. v. Evans, 87 F.3d 431, 434 (10th Cir.1996). For substantially the same reasons set forth in the magistrate's Recommendation of July 31, 1996, and the district court's Order of January 2, 1997, we agree with the district court that Wilson cannot satisfy this burden and is not entitled to a certificate of appealability.\n\n\n8\nWilson's application for a certificate of appealability is DENIED and this appeal is DISMISSED.\n\n\n\n*\n This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3\n\n\n"} -{"text": "\n171 B.R. 601 (1994)\nIn re EBP, INC., dba Epic Steel, Debtor.\nBankruptcy No. 93-12399.\nUnited States Bankruptcy Court, N.D. Ohio, Eastern Division.\nSeptember 6, 1994.\nSteven S. Davis, Cleveland, OH, for debtor.\nBruce W. McClain, West Lake, OH, for creditors committee.\n\nMEMORANDUM OF OPINION AND ORDER\nRANDOLPH BAXTER, Bankruptcy Judge.\nThe matter before the Court is the Debtor's Motion To Strike and objection to confirmation of the Debtor's proposed plan of reorganization (the Plan) filed by the Official Creditors' Committee.\nSpecifically, the Plan's ballot report indicated that the unsecured claimants, inter alia, had voted acceptance of the Plan, notwithstanding the Committee's objection to plan confirmation. In this regard the Debtor argues that the Committee's counsel, attorney Bruce W. McClain, filed the objection on behalf of the Committee without authorization and, thusly, violated his duty as a fiduciary to the Committee. In response, the Committee's counsel argued, in part, that, as counsel to the Committee, he was a fiduciary to all of the unsecured creditors and not solely to the members of the Official Committee.\nFor resolution, the Court must determine whether counsel for an Official Committee of Creditors may object to confirmation of a proposed plan of reorganization whereby the ultimate balloting report shows that the class of claimants represented by such counsel votes acceptance of the Plan.\nBy way of chronology the Debtor's disclosure statement was approved by this Court on July 21, 1994, over the objection of the Committee. Thereupon, a confirmation *602 hearing on the Plan was scheduled for August 31, 1994, with August 24, 1994 set as the deadline for filing any objections to the Plan. The deadline for balloting by claimants was also set for August 24, 1994, with the ballot report's submission date being August 29, 1994. Pursuant to the aforesaid schedule, a timely objection to the Plan was filed by the Committee.\nSection 1102 of the Bankruptcy Code [11 U.S.C. 1102] authorizes the establishment of both creditor and equity security holder committees. Therein, at subsection (b)(1), such committee will ordinarily consist of persons who are willing to serve who hold the seven largest claims against the debtor's estate of the type represented on such committee. Under \u00a7 1103, the Committee is authorized to employ counsel as well as other professionals upon Court approval. Section 1103 also enumerates the duties of the Committee. Among those duties, the Committee may consult with the trustee or debtor-in-possession, investigate accounts, etc., relevant to the case or the formulation of a plan and participate in the formulation of a plan. 11 U.S.C. 1103(c)(1)(2) and (3). Additionally, under \u00a7 1103(c)(3), the Committee may advise its constituents of its determination as to the formulated plan, as well as filing any acceptance or rejection thereto.\nIn the present case, the Committee was duly appointed under \u00a7 1102 and, pursuant to \u00a7 1103, the Committee retained counsel. Notedly, no language in either \u00a7 1102 or \u00a7 1103 addresses the scope of authority reposed in the Committee's counsel or other retained professionals. Retention upon Court approval is the only statutory constraint other than \u00a7 1103(b)'s requirement that such counsel may not represent an entity of adverse interest. The Debtor argued that the Committee's counsel acted outside the scope of his authority in filing an objection to the Debtor's plan. As mentioned above, the only statutory constraints are addressed under \u00a7 1103(a) and (b). None of those statutory constraints are violated or are at issue.[1] In other respects, the Debtor has failed to adduce any evidence to show the scope of any authority which the Committee, itself, may have imposed upon its counsel. Without such, the Debtor's assertion that the Committee's counsel acted beyond the scope of his authority is not only conclusory but, is otherwise unsubstantiated. Counsel to a creditors' committee undertakes the obligation to represent the interests of the entire class fairly, not just the members of the Committee. See, Matter of Arlan's Dept. Stores, 615 F.2d 925, 932 (2d Cir.1979); Berner v. Equitable Office Bldg. Corp., 175 F.2d 218 (2d Cir.1949).\nThe fact that the Class 8 unsecured claimants voted in favor of the Debtor's Plan, while the Committee filed an objection to the Plan is not necessarily incongruous.\nAs presented in the Plan there are seventy-two (72) nonpriority, nonsecured creditors of the Debtor's estate, totalling some $242,506.02. The Ballot Report shows that of that total number of nonpriority unsecured claimants, only nine (9) voted for the Plan to be confirmed, while none voted against confirmation. The total nonpriority, unsecured claimants voting approval of the Plan represented a total of $58,806.54, per the Ballot Report. Clearly, a majority of the nonpriority, unsecured claimant in Class 8, for whatever reason, did not cast a ballot. As such, an unsubstantiated assertion that the Committee's counsel filed an objection to the Plan beyond the scope of his authority cannot be supported from the record. Moreover, $20,000.00 of the $58,000.00 unsecured claims voting in favor of the Plan is an unsecured claim of an insider principal. Significantly, the largest unsecured claimant's (70%) vote is not included in the total unsecured dollar amount voting acceptance. That particular claimant also happens to be the chairman of the Committee. This additional factor militates against a finding that the Committee's counsel acted beyond the scope of his authority. At least, no evidence to the contrary was demonstrated.\n*603 In a motion to strike a pleading, the burden of proof is upon the movant who must meet the burden by a preponderance of the evidence standard. At bar, that burden is upon the Debtor who has failed to meet its burden. No violation of a fiduciary duty of the Committee's counsel is found herein. See, Pension Benefit Guar. v. Pincus, et al., 42 B.R. 960, 963-964 (E.D.Pa.1984); Matter of Celotex Corp., 123 B.R. 917, 920 (Bankr. M.D.Fla.1991); Matter of Oliver's Store's, Inc., 79 B.R. 588 (Bankr.N.J.1987); In re Mesta Machine Co., 67 B.R. 151, 156 (Bankr. W.D.Pa.1986). Matter of Levy, 54 B.R. 805, 807-808 (Bankr.S.D.N.Y.1985) (\"It is hornbook law that a creditor's committee may object to claims of other general unsecured creditors and, in so doing, they may rely upon the representation of counsel to the committee\"), citing, In re Drive-In Development Corp., 371 F.2d 215 (7th Cir.1966), cert. denied, 387 U.S. 909, 87 S.Ct. 1691, 18 L.Ed.2d 626 (1967).\nAccordingly, the Debtor's Motion To Strike is hereby denied.\nIT IS SO ORDERED.\nNOTES\n[1] Although the Committee's counsel also serves as counsel for one of the unsecured claimant's, that factor alone does not constitute an adverse interest pursuant to \u00a7 1103(b): \". . . Representation of one or more creditors of the same class as represented by the Committee shall not per se constitute the representation of an adverse interest.\" 11 U.S.C. 1103(b).\n"} -{"text": "\n336 B.R. 866 (2006)\nIn re BAYSHORE YACHT & TENNIS CLUB CONDOMINIUM ASSOCIATION, INC., Debtor.\nNo. 05-12454-BKCRAM.\nUnited States Bankruptcy Court, S.D. Florida.\nJanuary 12, 2006.\n*867 James B. Miller, Esq., Miami, FL, Ronald J. Isriel, Esq., Isriel & Associates, P.A., Miami, FL, for Al Coletta.\nThomas L. Abrams, Esq., Gamber & Adams, Ft. Lauderdale, FL, Marc Auerbacher, Esq., Katz Barron, Miami, FL, for Debtor.\nORDER GRANTING DEBTOR'S MOTION FOR SUMMARY JUDGMENT; DENYING COLETTA'S CROSS MOTION FOR SUMMARY JUDGMENT AND DISALLOWING CLAIM # 20\nROBERT A. MARK, Chief Judge.\nThe Court conducted a hearing on December 21, 2005, on cross motions for summary judgment on Debtor Bayshore Yacht & Tennis Club Condominium Association's (\"Bayshore\" or \"Debtor\") objection to Proof of Claim # 20 filed by Creditor Al Coletta (\"Coletta\"). Specifically, on November 15, 2005, Debtor filed its Motion for Final Summary Judgment as to Proof of Claim # 20 (\"Motion for Summary Judgment\")(CP # 151). On November 22, 2005, Coletta filed his Response and Cross Motion for Summary Judgment (\"Response and Cross Motion\")(CP # 174). Debtor subsequently filed its Reply to Al Coletta's Response in Opposition to Bayshore's Motion for Summary Judgment on Claim # 20 and Response to Coletta's Cross Motion for Summary Judgment (\"Reply\")(CP # 216). Upon reviewing the record, including the legal memoranda, and after considering the arguments of counsel and relevant case law, the Court finds it appropriate to grant Debtor's Motion for Summary Judgment and deny Coletta's Cross Motion. As such, Coletta Claim # 20 is disallowed.\n\nFactual and Procedural Background\nAlthough the history between the parties is tortured, and certain facts are in *868 dispute, the relevant facts necessary to address this claim are undisputed. Bayshore Yacht & Tennis Club is a condominium building located in North Bay Village, Florida. The Debtor was created pursuant to a Declaration of Condominium, attached as Exhibit \"1\" to the Response and Cross Motion. The Declaration of Condominium was recorded on June 16, 1978. In 1981, Coletta purchased three units (\"Penthouse Units\") at the Debtor's premises.[1] The Penthouse Units were located on the eleventh floor of the building.[2] At the time of purchase, elevator service within the building ceased at the tenth floor. Access to the Penthouse Units was, and still is, by way of a stairway from the tenth floor. It is undisputed that at the time of purchase, Coletta knew that the elevator did not go up to the Penthouse Units.\nUpon purchasing the Penthouse Units, Coletta attempted to convince the Debtor to provide elevator access to the eleventh floor. According to Coletta, on numerous occasions the Debtor committed to providing elevator access to the eleventh floor at no expense to Coletta. Deposition of Al Coletta at 18, 21, attached as Exhibit \"6\" to the Response and Cross Motion. However, no action was ever taken on this alleged commitment, purportedly because Bayshore lacked sufficient funds. Dep. Coletta at 17; Affidavit of Patrick Bilodeau \u00b6 3, attached as Exhibit \"9\" to the Response and Cross Motion. Conversely, Debtor maintains that it never promised to pay for any elevator extension. Board Meeting Minutes of July 5, 2002, attached as Exhibit \"3\" to the Response and Cross Motion. As discussed below, this factual dispute over what Bayshore's board promised Coletta is not a factual issue precluding entry of summary judgment.\nOver the years, the relationship between the parties deteriorated.[3] In connection with his dissatisfaction with the Debtor and members of its board of directors, Coletta, on February 15, 2001, filed a lawsuit in the Circuit Court of Florida against Bayshore, styled as Al Coletta v. Bavshore Yacht & Tennis Club Condominium Association, Inc., et al., Case No.: 01-03879CA(01)(\"State Court Case\"). In his Third Amended Complaint, Coletta sought injunctive and declaratory relief (Counts I and III respectively) and damages (Count II) against the Debtor in connection with its alleged failure to provide elevator access to the Penthouse Units. In support of these claims, Coletta alleged that (1) Debtor and members of its board promised to provide elevator access to the Penthouse Units at no charge to Coletta; (2) to provide such elevator access would not require material alterations to the common elements; (3) such alterations were required pursuant to the Declaration of Condominium, the Americans with Disabilities Act (\"ADA\") and the Florida Americans with Disabilities Act (\"FADA\") and (4) because the Debtor had not provided such elevator access, Coletta suffered damages.\n*869 On April 4, 2005, Bayshore filed its Chapter 11 petition. Amongst other claims, Coletta timely filed his Proof of Claim # 20 which referenced the State Court Case. Coletta subsequently sought stay relief, seeking to continue the State Court Case rather than litigating Claim # 20 in this Court. The requested relief was denied by Order dated October 31, 2005, and instead, this Court ruled that Claim # 20 would be resolved in connection with other contested matters arising from the Debtor's objections to Coletta's various proofs of claim.\nWhile the bankruptcy was ongoing, the Debtor informed unit owners that it needed to raise $1,500,000 through a special assessment. Part of this assessment included $250,000 to modernize and replace the elevator system within the building. Board Letter to Unit Owners, attached as Exhibit \"5\" to the Response and Cross Motion. The proposed elevator project subject of the assessment does not include extending elevator service to the Penthouse Units.\n\nSummary of the Arguments\nDebtor's primary arguments are (1) Bayshore has no contractual obligation to extend the elevator at its expense; (2) extending the elevator is not a maintenance obligation; (3) extending the elevator is a material alteration requiring seventy-five percent approval from the unit owners; and (4) even if the alteration is not material and board approval is sufficient, the Declaration of Condominium requires Coletta to pay for the improvement.\nColetta argues that (1) extension of the elevator is a maintenance obligation; (2) if it is an alteration, it is not a material alteration and therefore, board approval is sufficient; and (3) he is not obligated to pay for the improvement because Bayshore agreed to pay and since, under the relevant section of the Declaration of Condominium, the Penthouse Units would not be the substantially exclusive beneficiary if the elevator was extended.\nAfter a review of the legal memoranda and the exhibits attached thereto, the Court finds that there is no genuine issue of material fact that is in dispute. Extension of the elevator service would not constitute maintenance of the common elements. Moreover, pursuant to the Declaration of Condominium, Bayshore is not obligated to pay for any extension of the elevator. Thus, Coletta is not entitled to any relief on his claim.\n\nDiscussion\nSummary judgment is appropriate 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.\" Fed. R. Civ. P. 56(c).\nSummary judgment is not properly viewed as a device that the trial court may, in its discretion, implement in lieu of a trial on the merits. Instead, Rule 56 of the Federal Rules of Civil Procedure mandates the entry of summary judgment against a party who fails to make a showing sufficient to establish the existence of every element essential to that party's case on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). In such a situation, there can be no genuine issue as to any material fact, as a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial. Id. at 322-23, 106 S.Ct. 2548.\n*870 The movant bears the initial responsibility of asserting the basis for his motion. Id. at 323; Apcoa, Inc. v. Fidelity Nat'l Bank, 906 F.2d 610, 611 (11th Cir. 1990). The movant is not required to negate his opponent's claim, however. The movant may discharge his burden by merely \"`showing' \u0097 that is, pointing out to the court \u0097 that there is an absence of evidence to support the nonmoving party's case.\" Celotex, 477 U.S. at 325. After the movant has carried his burden, the nonmoving party is then required to \"go beyond the pleadings\" and present competent evidence. The nonmoving party may meet its burden through affidavit and deposition testimony, answers to interrogatories, and the like, Celotex, 477 U.S. at 324, designating \"`specific facts showing that there is a genuine issue for trial.'\" Id. at 324 (quoting Fed. R. Civ. P. 56(e)). While the court is to view all evidence and factual inferences in a light most favorable to the nonmoving party, Nat'l Parks Conservation Ass'n v. Norton, 324 F.3d 1229, 1236 (11th Cir. 2003), \"the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.\" Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).\nA fact is material when it is identified as such by the controlling substantive law. Id. at 248. An issue is genuine when the evidence is such that a reasonable jury could return a verdict for the nonmovant. Id. at 249-50. The nonmovant \"must do more than simply show that there is some metaphysical doubt as to the material facts. . . . Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.'\" Matsushita Electric Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986) (citations omitted). An issue is not genuine if it is unsupported by evidence, or if it is created by evidence that is \"merely colorable\" or is \"not significantly probative.\" Anderson, 477 U.S. at 249-50.\nI. Extending elevator access to the eleventh floor does not constitute maintenance of the common elements\nPursuant to Florida Statute \u00a7 718.111, a Florida condominium association has a statutory duty to \"maintain the common elements.\"[4] Based on this duty to maintain the common elements, the underpinning of Coletta's prayer for damages and equitable relief is that extension of the elevator to the eleventh floor constitutes such maintenance.[5] In support of his position *871 that extension of the elevator should be considered maintenance and not an alteration, Coletta presents an offer from a contractor to extend the elevator (\"Centrellx Offer\"), attached as Exhibit \"10\" to the Response and Cross Motion. The Centrellx Offer lists in detail the tasks needed to be performed to extend the elevator. Specifically, extension of the elevator requires the Debtor to (1) build a shaft and motor room in accordance with ADA and state code requirements; (2) install concrete structure pockets for new elevator machine beams; (3) move various components of the elevator system into a new machine room; (4) install a door to the machine room that must be fire rated, self-closing and self-locking; (5) and provide an overhead steel beam in the new machine room so that Centrellx may raise the machine and motor up one floor. The total cost of the Centrellx Offer is $41,900. Based on this detail, Coletta argues that extension of the elevator would constitute maintenance of the common elements.\nAs previously noted, the Debtor has a statutory duty to maintain the common elements. The Debtor's Declaration of Condominium reaffirms this obligation, stating:\n\nSection XXI Maintenance and Repair of Common Elements by Association: [Bayshore], at its expense, shall be responsible for the maintenance, repair and replacement of all of the COMMON ELEMENTS. . . .\nThe duty to maintain the common elements also includes making changes and modifications as to protect the common elements. Tiffany Plaza Cond. Ass'n, Inc. v. Spencer, 416 So.2d 823 (Fla. 2d DCA 1982); Ralph v. Envoy Point Condo. Ass'n, 455 So.2d 454 (Fla. 2d DCA 1984).\nBased on a review of the Centrellx Offer, the Court finds that as a matter of law, extension of the elevator to the eleventh floor does not constitute maintenance of the common elements. Although used in the Declaration of Condominium, the term \"maintenance\" is not defined. Looking to common meaning, \"maintenance,\" is the \"upkeep or preservation of condition of property.\" Black's Law Dictionary (6th ed. 1990).\nNothing in the Centrellx Offer indicates that extension of the elevator to the eleventh floor effectuates an \"upkeep or preservation\" of the common elements. Certainly, extending the elevator to the eleventh floor is not necessary to maintain and preserve the existing elevator service through the tenth floor. Quite to the contrary, as detailed above, the Centrellx Offer requires Bayshore to spend $41,000 to build, install and move various components of the elevator system in order to extend it to the eleventh floor. Even Coletta characterizes the various steps to extend the elevator as \"modifications\" in his Third Amended Complaint. Clearly, extending the elevator to the eleventh floor is not maintenance of the existing common elements.\nNeither party cited case law directly on point in analyzing the maintenance versus alteration issue but one case reviewed by the Court provides some guidance, Ralph v. Envoy Point Condominium Association, cited earlier. In Ralph, the board of directors of the association approved a special assessment to extend the seawall on the premises to protect the common elements. The issue in Ralph was whether the board of directors needed unit owner approval of the change to the seawall, or rather, could make such change without approval on the basis that it was maintaining the common elements. Looking at the evidence, the court concluded that a sufficient basis existed for the trial court's finding that the raising of the seawall constituted maintenance of the common elements *872 and therefore, did not require a unit owner vote. Here, unlike Ralph, failure to extend the elevator to the eleventh floor will not jeopardize the existing common elements on the Debtor's premises. The only effect of extending the elevator to the eleventh floor is to provide convenience to Coletta in his private or potentially, commercial use, of the Penthouse Units.\nII. The ADA and FADA, even if applicable, do not make extending the elevator a maintenance obligation\nAlthough he cites no law, Coletta alleges that the duty to maintain the common elements also requires that such maintenance be done in accordance with applicable laws. As such, when the Debtor attempts to modernize and replace the current elevator system, a task that the Debtor concedes is \"maintenance,\" it must also comply with the ADA and FADA.[6] Under the ADA and FADA, Coletta argues that various provisions require elevator access to the eleventh floor. Coletta's argument is unavailing.\nSection 12183 of the ADA, in full, states:\n(a) as applied to public accommodations and commercial facilities, discrimination for purposes of section 12182(a) of this title includes \u0097\n(1) a failure to design and construct facilities for first occupancy later than 30 months after July 26, 1990, that are readily accessible to and usable by individuals with disabilities . . . and (2) with respect to a facility or part thereof that is altered by, on behalf of, or for the use of an establishment in a manner that affects or could affect the usability of the facility or part thereof, a failure to make alterations in such a manner that, to the maximum extent feasible, the altered portions of the facility are readily accessible to and usable by individuals with disabilities, including individuals who use wheelchairs.\n42 U.S.C. \u00a7 12183 (2006)(emphasis added). Regardless of whether the ADA applies at all in this matter,[7] a plain reading highlights that it specifically pertains to alterations and not maintenance. Thus, assuming that Coletta's position is correct, that is, that the elevator modernization program somehow triggers ADA compliance on the part of the Debtor, it must follow that the modernization program is then an alteration, and not maintenance as the Debtor has characterized it.\nAs for FADA, the Notice of Violation issued to the Debtor does not state that the association has failed to properly maintain the common elements of the building, specifically, the elevator. It does not state that the elevator is in some manner faulty or defective. Rather, the Notice merely cites the Debtor for failing to extend the elevators up to the top floor of the building. In fact, assuming that the Notice of Violation was appropriately issued,[8] the *873 only action that could be taken by Debtor to comply would be to alter the elevators rather than maintain them as is. Accordingly, Debtor is entitled to summary judgment on Coletta's maintenance claim. Extension of the elevator does not fall within the Debtor's duty to maintain the common elements. It follows then that Coletta's claim for damages under Florida Statute \u00a7 718.111 fails as a matter of law.\nIII. Coletta's claim fails since Coletta, not Bayshore, must pay for an alteration which extends elevator service to the Penthouse Units\nIn its Motion for Summary Judgment, Bayshore argues that any alteration to the elevators requires a vote of the unit owners in the building. In support of this argument, the Debtor points to the Declaration of Condominium, a document binding on all unit owners. See Neuman v. Grandview at Emerald Hills, Inc., 861 So.2d 494 (Fla. 4th DCA 2003). Relevant portions of the Declaration of Condominium state the following:[9]\n\nSection XVIII Limitation Upon Right of Owners to Alter and Modify Units: No owner of any UNIT shall make or permit to be made any structural modifications or alterations in such UNIT which would materially affect or in any manner endanger the CONDOMINIUM in part or its entirety, or which would materially affect or interfere with the provision of utility services constituting COMMON ELEMENTS located therein without first obtaining the written consent of the [Debtor].\n\nSection XIX Right of Association to Alter and Improve Property and Assessment THEREFOR: [Bayshore] shall have the right to make or cause to be made such alterations or improvements to the COMMON ELEMENTS as do not prejudice the rights of the owner of any UNIT, provided the making of such alterations and improvements are approved by the Board of Directors of [Bayshore], and the cost of such alterations or improvements shall be . . . assessed and collected from all of the owners of UNITS. However, where any alterations and improvements are exclusively or substantially exclusively for the benefit of the owner or owners of a UNIT or UNITS requesting the same, then the cost of such alterations and improvements shall be assessed against and collected solely from the owner or owners of the UNIT or UNITS exclusively or substantially exclusively benefitted. . . .\nDebtor argues that because the Declaration of Condominium is silent in regard to approval of material alterations to the common elements, Florida Statute \u00a7 718.113(2)(a) establishes a default rule:\n[t]here shall be no material alteration or substantial additions to common elements or real property, except in a manner provided in the declaration. If the declaration does not specify the procedure for approval of material alterations or substantial additions, 75 percent of the total voting interests of the association *874 must approve the alterations or additions.\nF.S.A. \u00a7 718.113(2)(a)(2006).\nBased on these provisions, Debtor maintains that the elevator is a common element and that the change proposed by Coletta would constitute a material alteration as that term is used in Florida Statute \u00a7 718.113(2)(a) and defined under Florida case law. Accordingly, a unit owner vote would be required. Because it is undisputed that the unit owners have not voted to approve the elevator extension, Bayshore argues that it cannot be obligated to make the alteration. Coletta argues that any change to the elevator would not constitute a material alteration, and thus, no unit owner vote would be required, only approval by Bayshore's board.\nThe Court is not determining whether extending the elevator would be an alteration requiring only board approval or a material alteration requiring a vote. Under the case law reviewed by the Court, this issue is subject to bona fide dispute. See, e.g., Sterling Vill. Condo., Inc. v. Breitenbach, 251 So.2d 685, 687 (Fla. 4th DCA 1971)(holding that replacement of screen enclosures with glass jalousies constituted a material alteration); Tower House Condo., Inc. v. Millman, 410 So.2d 926 (Fla. 3d DCA 1981)(finding that acquisition of land to extend parking area constituted material alteration requiring unit owner approval); Islandia Condo. Ass'n, Inc. v. Vermut, 501 So.2d 741 (Fla. 4th DCA 1987)(change of color scheme of complex found to be material alteration). Resolving this issue is not necessary here because under either scenario, Coletta's claim fails. If the extension is a material alteration, Coletta's claim fails since it is without dispute that the improvement was not approved by a vote under Florida Statute \u00a7 718.113(2)(a). If the extension is an alteration requiring only board approval, Coletta still loses because, as discussed below, the applicable section of the Declaration of Condominium would require Coletta, not Bayshore, to pay for the alteration.\n\"The declaration of condominium, which is the condominium's `constitution,' creates the condominium and strictly governs the relationships among the condominium units owners and the condominium association.'\" Neuman, 861 So.2d at 496-97 (quoting Woodside Vill. Condo. Ass'n v. Jahren, 806 So.2d 452, 456 (Fla. 2002)). Here, there is no dispute that the Declaration of Condominium governs the relationship between Coletta and Bayshore. With this in mind, Section XIX of the Declaration of Condominium clearly states:\n[w]here any alterations and improvements are exclusively or substantially exclusively for the benefit of the owner or owners of a UNIT or UNITS requesting the same, then the cost of such alterations and improvements shall be assessed against and collected solely from the owner or owners of the UNIT or UNITS exclusively or substantially exclusively benefitted. . . .\nAlthough Coletta argues that he is not the exclusive or substantially exclusive beneficiary, it is hard for this Court to imagine a situation where this section would ever apply more aptly than here. Simply, extension of the elevator to the eleventh floor will not benefit those unit owners who reside on lower floors. Rather, it only benefits those units which are not receiving elevator service to the eleventh floor, in this case, the Penthouse Units. Thus, if Coletta, as the owner of the Penthouse Units, requests extension of the elevator to the eleventh floor, and it is determined that such extension falls within the ambit of Section XIX, he is obliged to pay on the basis that he is \"exclusively or substantially exclusively benefitted\" from *875 this alteration. Coletta's belief that he is not the exclusive beneficiary of this alteration because he does not reside in the Penthouse Units, nor intends to, is misplaced. This provision only requires that the alteration be \"for the benefit of the owner or owners of a UNIT or UNITS,\" and not as Coletta posits, residents of those units.\nIV. Coletta's contract argument also fails\nFinally, Coletta argues that even if Section XIX of the Declaration of Condominium would obligate him to pay, that section does not control because the Debtor orally promised to pay for the extension. This contract argument fails for several reasons.\nFirst, Coletta's deposition testimony, the affidavit of Patrick Bilodeau and the allegations in the State Court Case all refer, without specifics, to alleged oral promises made no later than in 1998 or 1999. The Court finds that these general allegations of oral promises cannot support a contract claim, particularly since the only written statement of Bayshore's position is that Coletta could extend the elevator at his own expense. See Board Meeting Minutes of July 5, 2002 (\"The Board has no objection to Coletta taking the elevators to the [Penthouse Units] at his own costs.\"). This written statement of the board's position was made well after the time that Coletta argues that the Debtor promised to pay for any extension.\nSecond, even if these vague oral promise allegations created a factual issue over Bayshore's commitment to pay, any alleged contract would fail for lack of consideration. A central tenet of contract law is that for a contract to be enforceable, there must be consideration. \"A mere gratuitous promise of a future gift, lacking consideration, is unenforceable.\" Kaufman v. Harder, 354 So.2d 109, 109 (Fla. 3d DCA 1978). Even assuming arguendo that the Debtor and its representatives did orally promise to provide elevator access to the eleventh floor at the Debtor's expense and Coletta subsequently accepted such a promise, Coletta cannot point to any consideration that he provided to induce a promise obligating Bayshore to pay for an alteration Coletta would otherwise have to pay for himself, nor is there any evidence that he detrimentally relied on such a promise.\nColetta's deposition is devoid of any statements that would support an argument that Debtor made an enforceable promise to Coletta. Nowhere did Coletta state that he provided any consideration to the Debtor.[10] Coletta states that one point he loaned $300,000 to the Debtor in return, for among other things, elevator access to the Penthouse Units. After commencing litigation based on this loan, Coletta reached settlement and the Debtor agreed to repay him on this loan. Dep. Coletta at 8-9. The settlement made no mention of any alleged obligation to extend the elevators. *876 Statements made by Patrick Bilodeau, further emphasize that any promise to provide elevator access, if at all, to the eleventh floor was solely at the discretion of the Debtor. Bilodeau Aff. \u00b6 3. Nor does Coletta's deposition testimony provide any evidence that Coletta detrimentally changed his position on the basis of a promise to provide elevator access.[11] Simply, the record reflects that Coletta asked, the Debtor allegedly promised and nothing happened over a span of twenty years. In sum, there is no genuine issue of material fact and Bayshore is entitled to judgment as a matter of law on Coletta's alternative theory that Bayshore is contractually obligated to extend the elevator at its expense.[12]\n\nConclusion\nAt first blush, it would appear that a condominium owner's demand for elevator service would be reasonable and supportable under the law since condominium elevators typically service all floors. In this case, however, the claim has no legal or equitable merit. Coletta bought the Penthouse Units knowing that they were not serviced by the elevators. Moreover, he bought the Penthouse Units subject to the condominium documents which clearly obligate him to pay for an extension of the elevator if an extension is authorized by Bayshore. Thus, Coletta's Claim # 20, which seeks damages, injunctive and declaratory relief fails in its entirety. Bayshore has no legal obligation to extend the elevator service to Coletta's Penthouse Units at its own expense. For the foregoing reasons, it is \u0097\nORDERED as follows:\n1. Bayshore's Motion for Summary Judgment is granted.\n2 Coletta's Cross Motion is denied.\n3. Claim # 20 is disallowed.\nNOTES\n[1] The three units are specifically identified as RU-1101, RU-1102 and RU-1103 within the Debtor's Declaration of Condominium, attached as Exhibit \"1\" to the Response and Cross Motion. Coletta also purchased several \"commercial units\" as that term is used in the Declaration of Condominium at Bayshore.\n[2] Coletta's papers sometimes refer to the Penthouse Units as being located on the twelfth floor. To avoid any confusion as to numbering, all references to floors within the Debtor's property will coincide with the schematic layout found in the Declaration of Condominium. In this schematic, the Penthouse Units are located on the eleventh floor.\n[3] Although an amusing read with possible late-night cable movie potential, the Affidavit of Horace Anthony Fonseca, attached as Exhibit \"8\" to the Response and Cross Motion for Summary Judgment, has little relevance to this matter.\n[4] Florida Statute \u00a7 718.111 provides that \"[t]he association may contract, sue, or be sued with respect to the exercise or nonexercise of its powers. For these purposes, the powers of the association include, but are not limited to, the maintenance, management, and operation of the condominium property.\" F.S.A. \u00a7 718.111(3)(2006).\n[5] Coletta's claim for damages, as presented in the Third Amended Complaint, alleges that the Debtor and its board of directors, by refusing to extend the elevators to the eleventh floor, \"breached its duty to manage the affairs of the condominium.\" Such breach resulted in \"lost profits and loss of value\" to the Penthouse Unit. The claim for equitable relief, specifically, extension of the elevator to the eleventh floor at the Debtor's expense, also flows from the Debtor's alleged failure to manage the affairs of the condominium. However, as Coletta's counsel conceded at oral argument, if the extension of the elevator to the eleventh floor is not considered maintenance, then Coletta's claim for damages would fail.\n[6] As for FADA, Coletta points to a Notice of Violation issued to the Debtor on January 25, 2001, attached as Exhibit \"7\" to the Response and Cross Motion. The Notice of Violation states that Bayshore is in violation of Florida Accessibility Code 4.10.1, which provides that elevator access must be \"to all floors inclusive of the top floor of the building.\"\n[7] Although it appears that the ADA and FADA are not applicable, the Court will not address whether Debtor is a \"public accommodation\" or \"commercial facility\" as those terms are defined in the ADA, and more importantly, whether Coletta has standing to assert Debtor compliance under either statute.\n[8] The evidentiary value of this Notice of Violation is at best minimal based on the fact that there is nothing in the record indicating any further governmental action on the Notice of Violation since the time it was entered almost five years ago.\n[9] The Declaration of Condominium provisions cited by Coletta in his Response and Cross Motion provide no guidance. Furthermore, Coletta's counsel cites \"Section XIV Use of Common Elements Subject to Rules of Association\" for the proposition that \"Commercial UNITS shall be permitted to use such portions of the COMMON ELEMENTS as may be reasonable and appropriate.\" Unfortunately, Coletta's counsel failed to read the entire sentence. In full, it reads \"owners and lessees of Commercial UNITS shall be permitted to use such portion of the COMMON ELEMENTS as may be reasonable and appropriate for the advertising of the business being conducted on said Commercial UNITS.\"\n[10] At oral argument Coletta's counsel asked for further discovery to find out what consideration his client provided to the Debtor in exchange for the promise to provide elevator access. Aside from it being highly unusual to need discovery from other parties to find out what your own client said or did, Coletta's counsel was fully aware that the hearing on the Motion for Summary Judgment was going forward on December 21, 2005. Moreover, Coletta knew, as stated in his own Response and Cross Motion, that as the non-moving party, he \"may not rest upon the mere allegations or denials . . . but . . . must set forth specific facts showing that there is a genuine issue for trial.\" Response and Cross Motion p. 6. Debtor raised the issue of consideration in its Motion for Summary Judgment and Coletta failed to meet his burden of establishing a genuine issue of fact over the existence of consideration to support the alleged contract.\n[11] In his Response and Cross Motion, Coletta alleges in conclusory fashion that he detrimentally relied upon Bayshore's representation. However, Coletta does not state what this detrimental reliance was. And as stated above, Coletta knew that he \"may not rest upon the mere allegations or denials.\"\n[12] In rejecting Coletta's contract claim, the Court has not even reached at least two other potential contract defenses: (1) whether Coletta's claim is barred by the applicable statute of limitations; and (2) whether the alleged oral promise falls within the statute of frauds, and therefore, is unenforceable. See F.S.A. \u00a7 725.01 (2006)(stating that \"any agreement that is not to be performed within the space of one year from the making thereof\" is not enforceable unless in writing).\n"} -{"text": "\n583 N.W.2d 370 (1998)\n7 Neb. App. 525\nJerry W. BENNETT, Appellant,\nv.\nJ.C. ROBINSON SEED CO., Appellee.\nNo. A-97-1185.\nCourt of Appeals of Nebraska.\nAugust 18, 1998.\n*371 Stephen L. Gerdes, of Law Offices of Stephen L. Gerdes, Omaha, for appellant.\nMelvin C. Hansen and Julie M. Martin, of Hansen, Engles & Locher, P.C., Omaha, for appellee.\nHANNON, IRWIN, and INBODY, JJ. IRWIN, Judge.\n\nI. INTRODUCTION\nJerry W. Bennett appeals from an order of the Workers' Compensation Court review panel which affirmed an order of the Workers' Compensation Court dismissing *372 Bennett's application to modify a previous compensation award. On appeal, Bennett challenges the court's conclusion that he failed to demonstrate a material and substantial increase in his incapacity since the time of the previous award and the court's method of computing the amount of temporary total disability benefits to which Bennett was entitled for a short period of temporary total disability. For the reasons stated herein, we affirm in part and in part reverse, and remand with directions.\n\nII. BACKGROUND\nBennett was injured in a work-related accident on April 28, 1987. As a result of the accident, Bennett suffered injuries to his back. Bennett was awarded temporary total disability benefits and permanent partial disability benefits in an award on August 15, 1989. The initial permanent partial disability award was computed based upon a finding that Bennett had suffered a 40-percent permanent impairment of earning capacity. On September 15, 1992, the court modified the initial award by raising Bennett's impairment rating to 60 percent and modifying his permanent partial disability benefits accordingly.\nOn May 14, 1996, Bennett filed a petition to modify the September 1992 compensation award. Bennett alleged that he had suffered a material and substantial increase in his incapacity and sought to have the court declare him permanently totally disabled. On January 13, 1997, the compensation court entered an \"Order of Dismissal.\" In the order, the court found that Bennett failed to prove by a preponderance of the evidence that he had suffered a material and substantial increase in incapacity. The court found that Bennett had suffered a short period of temporary total disability during October and November 1994 and held that Bennett was entitled to temporary total disability benefits for a 2 4/7-week period. The entire temporary total disability period occurred after Bennett had received his full 300 weeks of permanent partial disability benefits pursuant to Neb.Rev.Stat. \u00a7 48-121(2) (Reissue 1993). Nonetheless, the compensation court gave defendant, J.C. Robinson Seed Co. (J.C. Robinson), credit for having paid past partial disability benefits based on an impairment rating of 60 percent and ordered it to pay the 2 4/7 weeks of temporary total disability benefits based on the remaining 40-percent impairment rating.\nOn October 23, 1997, the review panel entered an order of affirmance on review. The review panel held that the compensation court's factual findings were not clearly wrong and that they were supported by competent evidence. Bennett filed this timely appeal.\n\nIII. ASSIGNMENTS OF ERROR\nOn appeal, Bennett has assigned nine errors. Because a number of these assigned errors are merely restatements of one another, we have consolidated the assigned errors for discussion to two. First, Bennett asserts that the compensation court erred in finding that he failed to prove a material and substantial increase in incapacity. Second, Bennett asserts that the court erred in giving J.C. Robinson credit for past permanent partial disability benefits when computing the amount he was entitled to receive for the period of temporary total disability.\n\nIV. ANALYSIS\n\n1. STANDARD OF REVIEW\nPursuant to Neb.Rev.Stat. \u00a7 48-185 (Reissue 1993), an appellate court may modify, reverse, or set aside a Workers' Compensation Court decision only when (1) the compensation court acted without or in excess of its powers; (2) the judgment, order, or award was procured by fraud; (3) there is not sufficient competent evidence in the record to warrant the making of the order, judgment, or award; or (4) the findings of fact by the compensation court do not support the order or award. Smart v. Scrivner/Food 4 Less, 254 Neb. 111, 574 N.W.2d 505 (1998); Hammelman v. Dreesen Enters., 6 Neb.App. 564, 575 N.W.2d 176 (1998). In determining whether to affirm, modify, reverse, or set aside the judgment of the review panel, a higher appellate court reviews the findings of the trial judge who conducted *373 the original hearing. Hammelman v. Dreesen Enters., supra.\nFindings of fact made by a Workers' Compensation Court after review have the same force and effect as a jury verdict and will not be set aside unless clearly erroneous. Id. However, as in other cases, an appellate court is obligated in workers' compensation cases to make its own determinations as to questions of law. Smart v. Scrivner/Food 4 Less, supra; Hammelman v. Dreesen Enters., supra.\n\n2. INCREASED INCAPACITY\nNeb.Rev.Stat. \u00a7 48-141 (Reissue 1993) provides the statutory authority for an action to modify a previous compensation award. Under \u00a7 48-141, an applicant seeking modification of a workers' compensation award must prove by a preponderance of the evidence that the increase in his or her incapacity is due solely to the injury resulting from the original accident. Hohnstein v. W.C. Frank, 237 Neb. 974, 468 N.W.2d 597 (1991). In proving an increase in incapacity, the applicant must demonstrate by a preponderance of the evidence that there exists a material and substantial change for the worse in the applicant's condition justifying a modification and distinct and different from that for which an adjudication has been previously made. Id.\nIn the present case, Bennett testified that various physical symptoms had gotten worse since the most recent award was entered in September 1992. Additionally, Bennett offered various medical records and office notes from treating physicians to support his claim that his physical condition had deteriorated. Bennett did not offer any evidence that his impairment rating had changed, except that his treating physician's notes indicated that he may have become \"totally disabled.\"\nIn concluding that Bennett failed to demonstrate a material and substantial change in incapacity, the compensation court found that most, if not all, of the physical complaints which Bennett testified about had been documented in medical records prior to September 1992 and that Bennett had failed to provide any numerical impairment rating. The court considered two functional capacity assessments and various vocational rehabilitation reports contained in the record.\nPrevious cases in Nebraska recognize that in order to succeed in obtaining a modification, an applicant must demonstrate a change in his or her physical disability. See, Gomez v. Kenney Deans, Inc., 232 Neb. 646, 441 N.W.2d 632 (1989); Ludwickson v. Central States Electric Co., 142 Neb. 308, 6 N.W.2d 65 (1942). As such, where a claimant is unable to demonstrate that his physical condition has changed since the prior award, a compensation court does not commit error in refusing to modify the previous award. Gomez v. Kenney Deans, Inc., supra.\nThe record in the present case contains competent evidence to support the compensation court's conclusion that Bennett failed to demonstrate a material and substantial change in incapacity. The rehabilitation specialist concluded that there were \"no knew [sic] objective findings other than [Bennett] has reported increased pain. Dr. Bowman does report degenerative changes, however, degenerative changes have been noted in the medical records going back to 1981.\" Because there was competent evidence to support a finding that Bennett's physical condition had not materially changed, we conclude that the compensation court was not clearly wrong in finding that Bennett failed to meet his burden of proof.\n\n3. CREDIT FOR PAST PARTIAL DISABILITY BENEFITS\nThe compensation court found that Bennett had demonstrated that he was temporarily totally disabled during a period of time between October 24 and November 10, 1994. During those 2 4/7 weeks, J.C. Robinson failed to pay Bennett any compensation for his disability, and his period of partial disability payments pursuant to \u00a7 48-121(2) had expired. The compensation court concluded that Bennett was entitled to temporary total disability benefits for the 2 4/7-week period. However, rather than awarding Bennett benefits computed at a rate of 100 percent impairment, the court gave J.C. Robinson credit for having previously paid benefits *374 computed at a rate of 60 percent impairment and ordered that Bennett receive 2 4/7 weeks' compensation computed at a rate of 40 percent impairment.\nSection 48-121(2) limits the number of partial disability payments which may be received by a plaintiff to 300 weeks' payments. Section 48-121(2) further provides that if a period of temporary total disability is followed by partial disability, then the 300 week period is to be reduced by the number of weeks for which temporary total disability benefits are paid. Bennett argues on appeal that \u00a7 48-121(2) does not apply when the period of temporary total disability occurs after the conclusion of partial disability payments but only applies where the period of temporary total disability occurs before a portion of the partial disability period.\nThe general rules of statutory interpretation in Nebraska provide that in the absence of anything to the contrary, statutory language is to be given its plain and ordinary meaning, and when the words of a statute are plain, direct, and unambiguous, no interpretation is necessary or will be indulged to ascertain their meaning. Memorial Hosp. of Dodge Cty. v. Porter, 251 Neb. 327, 557 N.W.2d 21 (1996). It is not within the province of a court to read anything plain, direct, and unambiguous out of a statute. Memorial Hosp. of Dodge Cty. v. Porter, 4 Neb.App. 716, 548 N.W.2d 361 (1996). An appellate court will, if possible, give effect to every word, clause, and sentence of a statute, since the Legislature is presumed to have intended every provision of a statute to have a meaning. Id.; Gatewood v. Powell, 1 Neb.App. 749, 511 N.W.2d 159 (1993).\nIn light of the foregoing principles, we conclude that the compensation court erred in determining that Bennett's period of temporary total disability, which occurred entirely after he had received his entire permanent partial disability award of 300 weeks' payments, should be computed based on a 40percent impairment instead of a 100-percent impairment. The effect of the court's action was to reduce the 300-week period of partial disability payments by the 2 4/7-week period of total disability which occurred after Bennett's partial disability. The language of \u00a7 48-121(2), in plain and unambiguous language, provides that such a reduction is to be done when \"total disability [is] followed by partial disability.\" To hold that the compensation court was correct in reducing the period of partial disability by the number of weeks of temporary total disability occurring after the partial disability would render the above-quoted language meaningless.\n\n4. SIGNATURES ON REVIEW PANEL DECISION\nWe note that Bennett also indicates in his brief that the order of the review panel was \"signed by only two of the three judges who heard the case.\" Brief for appellant at 2. Our review of the record indicates that this is correct. The order of the review panel contains three lines, with the word \"Judge\" immediately below each line. On two of the three lines are signatures, while the third line remains blank. Nothing else on the order indicates who the third judge was or what the third judge's decision was.\nWorkers' Comp. Ct. R. of Proc. 12 (1998) provides that an appeal from a trial judge's decision will be to \"a three-judge panel.\" There is no allegation raised by Bennett that his review was heard by less than a complete panel, and he has not assigned or argued any error concerning the fact that only two of the judges signed the order. In Craig v. American Community Stores Corp., 205 Neb. 286, 287 N.W.2d 426 (1980), the Nebraska Supreme Court noted that a decision of the review panel, even if signed by only one of the judges, constitutes a valid judgment so long as the findings and award are concurred in by at least two of the three judges. As such, despite the confusion caused by the review panel's actions in this case, and despite the fact that the review panel's order would be clearer if all three judges' votes were reflected on this order, we need not comment further on the failure of the third judge to render a signature on the order of the review panel.\n\nV. CONCLUSION\nWe conclude that the compensation court was not clearly wrong in finding that Bennett failed to meet his burden of establishing a material and substantial change in his physical *375 condition, and the compensation court's order is affirmed in that regard. We conclude that the court erred, however, in computing Bennett's temporary total disability award for the period of October 24 through November 10, 1994. As a result, we reverse that portion of the court's order and remand the case with directions to enter an award of temporary total disability in conformance with this opinion.\nAFFIRMED IN PART, AND IN PART REVERSED AND REMANDED WITH DIRECTIONS.\n"} -{"text": "\n208 Md. 677 (1956)\n119 A.2d 438\nBERGEN\nv.\nWARDEN OF MARYLAND PENITENTIARY\n[H.C. No. 16, October Term, 1955.]\nCourt of Appeals of Maryland.\nDecided January 6, 1956.\nBefore BRUNE, C.J., and DELAPLAINE, COLLINS, HENDERSON and HAMMOND, JJ.\nCOLLINS, J., delivered the opinion of the Court.\nThis is an application for leave to appeal from the denial of a writ of habeas corpus by Judge John B. Gontrum of Baltimore County. Petitioner was convicted on one charge of rogue and vagabond and on three charges of burglary, by a jury.\nPetitioner contends that the jury was misled by the introduction of certain photographs by the State. This Court has held that alleged error in admitting evidence is reviewable on appeal but not on habeas corpus. Tyson v. Warden, 198 Md. 684, 84 A.2d 59; Stokes v. Warden, 205 Md. 629, 106 A.2d 78; Johns v. Warden, 205 Md. 644, 108 A.2d 906.\nPetitioner also contends that the State's Attorney and his attorney entered into agreements which jeopardized his rights. He does not allege that he complained of the *679 services of his attorney at the time of trial, nor does the record show that he made such a complaint at that time. Goodman v. Warden, 190 Md. 746, 60 A.2d 527; Edmondson v. Wright, 193 Md. 710, 66 A.2d 386; Obenstine v. Warden, 198 Md. 648, 80 A.2d 610; Stokes v. Warden, supra. This cannot be reviewed on habeas corpus in the absence of such complaints.\nPetitioner further contends that he was refused the right to question the State's witnesses. This goes to the regularity of the proceedings and not to the jurisdiction of the court. It cannot be raised on habeas corpus. Hickman v. Warden, 203 Md. 668, 99 A.2d 730; Wagner v. Warden, 205 Md. 648, 109 A.2d 118; Tyler v. Warden, 206 Md. 635, 109 A.2d 919.\nPetitioner finally contends that witnesses testified falsely against him, and that the State's witnesses did not testify that their homes were broken into. Habeas corpus cannot be used for the purpose of an appeal to review the weight of the evidence, or the question of the guilt or innocence of a petitioner. Strahl v. Warden, 202 Md. 655, 97 A.2d 134; Friedel v. Warden, 205 Md. 657, 109 A.2d 50.\nApplication denied, with costs.\n"} -{"text": " FILED\n NOT FOR PUBLICATION AUG 26 2016\n\n MOLLY C. DWYER, CLERK\n UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS\n\n\n\n FOR THE NINTH CIRCUIT\n\n\nFARON E. LOVELACE, No. 15-35518\n\n Plaintiff-Appellant, D.C. No. 1:14-cv-00430-REB\n\n v.\n MEMORANDUM*\nROBIN SANDY; et al.,\n\n Defendants-Appellees.\n\n\n Appeal from the United States District Court\n for the District of Idaho\n Ronald E. Bush, Chief Magistrate Judge, Presiding\n\n Submitted August 16, 2016**\n\nBefore: O\u2019SCANNLAIN, LEAVY, and CLIFTON, Circuit Judges.\n\n Idaho state prisoner Faron E. Lovelace appeals pro se from the magistrate\n\njudge\u2019s judgment dismissing with prejudice his 42 U.S.C. \u00a7 1983 action arising out\n\nof the allegedly improper termination of a prison visit. We review de novo\n\nwhether a magistrate judge has jurisdiction. Allen v. Meyer, 755 F.3d 866, 867-68\n\n *\n This disposition is not appropriate for publication and is not precedent\nexcept as provided by Ninth Circuit Rule 36-3.\n **\n The panel unanimously concludes this case is suitable for decision\nwithout oral argument. See Fed. R. App. P. 34(a)(2).\n\f(9th Cir. 2014). We vacate and remand.\n\n Contrary to the magistrate judge\u2019s statement in its order dismissing\n\nLovelace\u2019s amended complaint, Lovelace did not consent to proceed before a\n\nmagistrate judge. See 28 U.S.C. \u00a7 636(c)(1) (authorizing magistrate judge to\n\n\u201cconduct any or all proceedings in a jury or nonjury civil matter and order the entry\n\nof judgment in the case\u201d \u201c[u]pon the consent of the parties\u201d). The consent forms\n\nfiled on October 17, 2014 and March 18, 2015 were executed by putative co-\n\nplaintiff Melissa Kuntz-Corta, not Lovelace. Accordingly, we vacate the judgment\n\nand remand to the district court for further proceedings. See Allen, 755 F.3d at 868\n\n(judgment entered by magistrate judge a nullity where some parties did not consent\n\nto magistrate judge\u2019s jurisdiction).\n\n On remand, the district court may review the complaint de novo in the first\n\ninstance pursuant to 28 U.S.C. \u00a7 1915A, or may construe the magistrate judge\u2019s\n\nMay 18, 2015 order as a report and recommendation and afford Lovelace\n\nreasonable time to file objections.\n\n In light of our disposition, we do not consider the other issues raised in the\n\nopening brief.\n\n VACATED and REMANDED.\n\n\n\n\n 2 15-35518\n\f"} -{"text": " In The\n\n Court of Appeals\n Ninth District of Texas at Beaumont\n ____________________\n\n NO. 09-13-00284-CV\n ____________________\n\n KELLY McCLANE, Appellant\n\n V.\n\n NEW CANEY OAKS APARTMENTS, Appellee\n_________________________________________________ ______________\n\n On Appeal from the County Court at Law No. 2\n Montgomery County, Texas\n Trial Cause No. 13-27046-CV\n___________________________________________________ _____________\n\n OPINION\n\n Kelly McClane appeals a judgment in favor of New Caney Oaks Apartments\n\nin a forcible detainer suit. McClane is a tenant at New Caney Oaks, a federally-\n\nsubsidized apartment complex, where she lives with her two children. She signed a\n\none-year lease. McClane received a \u201c7 Day Vacate Lease Termination Notice for\n\nNon-Payment of Rent.\u201d\n\n New Caney Oaks filed its petition for eviction in the Montgomery County\n\nJustice Court, and requested $866 in rent and \u201call rents accruing through date of\n\n 1\n\fjudgment.\u201d The justice of the peace signed a default judgment against McClane for\n\npast rent. The judgment stated that she had five days to vacate the apartment or\n\nappeal the judgment. McClane filed her appeal the next day.\n\n When an appeal from a justice court to a county court is perfected in a\n\nforcible detainer suit for nonpayment of rent, the county clerk dockets the cause,\n\n\u201cand the trial shall be de novo.\u201d Tex. R. Civ. P. 751.1 The justice court files the\n\npapers and the transcript of justice court proceedings, and any money in the justice\n\ncourt registry, with the clerk of the county court. See id. The county clerk then\n\nnotifies the parties of the \u201cdate of receipt of the transcript and the docket number of\n\nthe cause[,]\u201d and notifies the defendant of the \u201cnecessity for filing a written answer\n\nin the county court when the defendant has pleaded orally in the justice court.\u201d Id.\n\n The trial in county court at law was set for May 20, 2013, and then reset for\n\nMay 21. A visiting judge called the case. The property manager identified herself\n\nas the person representing New Caney Oaks. McClane did not appear. Based on\n\nMcClane\u2019s failure to appear, the court orally \u201cdismiss[ed] the case for\n\nnonappearance.\u201d\n\n\n\n\n 1\n The former rules governed this case. The Texas Supreme Court\nsubsequently adopted new Rules of Civil Procedure governing practice in justice\ncourts.\n 2\n\f According to McClane, she had called the court and explained that she could\n\nnot be at court on May 21 because she had a medical appointment. McClane claims\n\nthe person she spoke to informed her that a new notice with a different trial date\n\nwould be mailed. McClane received a notice that trial would be held on June 14,\n\n2013.\n\n On that date, the case was again called for trial. McClane did not appear. No\n\nattorney appeared on behalf of New Caney Oaks. The property manager\n\nannounced her presence, and stated on the record the amount of unpaid rent. That\n\nday the court signed a judgment granting possession of the property to New Caney\n\nOaks. McClane was ordered to vacate the property within ten days, and to pay the\n\nrent the court calculated based on the property manager\u2019s presentation.\n\n McClane asserts that on June 14 she searched for a parking space as she\n\ndrove around the courthouse. Her health made it difficult for her to get to the\n\ncourtroom, and she arrived after the trial had ended. With the assistance of counsel,\n\nshe filed a motion for new trial, and later an amended motion. She argued that her\n\nfailure to appear was not intentional but was an accident. She alleged that New\n\nCaney Oaks failed to comply with the lease terms, with section 24.005 of the\n\nTexas Property Code, and with federal housing regulations. Denying her motion,\n\nthe trial court noted on the order that McClane had missed two trial settings.\n\n 3\n\f McClane filed a second motion for new trial, which the trial court denied by\n\nwritten order. Included in the order are the following findings:\n\n 1. This Court finds that at the time of the first trial in this matter the\n judge did not have an order of appointment to sit for [the] County\n Court at Law Number Two;\n 2. This Court finds that the judge sitting at the time of the first trial\n dismissed the Defendant\u2019s appeal in favor of the original JP\n Court\u2019s judgment; and\n 3. This Court finds that new trial was granted on its own motion in\n the interest of justice to correct the situations detailed above.\n\nMcClane\u2019s motions for new trial were supported by exhibits and an affidavit.\n\n MOOTNESS RESPONSE\n\n New Caney Oaks argues the appeal is moot because McClane\u2019s lease term\n\nhas expired. See Marshall v. Hous. Auth. of the City of San Antonio, 198 S.W.3d\n\n782, 787 (Tex. 2006) (issue of possession in forcible detainer action). The lease\n\nhas a hold-over provision, and McClane claims the notice to vacate was\n\ninadequate. See Barnes v. Stone Way Ltd. P\u2019ship, 330 S.W.3d 925, 927-28 (Tex.\n\nApp.\u2014Beaumont 2011, no pet.). Unlike the tenant in Marshall, McClane has not\n\nvacated the apartment, and she has superseded the judgment. See Tex. Prop. Code\n\nAnn. \u00a7 24.007 (West Supp. 2012); Tex. R. App. P. 24.1; see also Marshall, 198\n\nS.W.3d at 784. She claims a continuing right to possession. The issue of proper\n\ntermination of the lease is disputed. The trial court ordered McClane to pay money\n\ndamages, and McClane challenges the judgment. See Barnes, 330 S.W.3d at 926-\n 4\n\f29; see also Cavazos v. San Antonio Hous. Auth., No. 04-09-00659-CV, 2010 Tex.\n\nApp. LEXIS 5453, at **5-7 (Tex. App.\u2014San Antonio July 14, 2010, no pet.)\n\n(mem. op.) (Trial court ordered tenant to pay unpaid rent.). Because the parties\u2019\n\ncontroversy continues and the case is not moot, we will address appellant\u2019s issues.\n\n THE FINAL JUDGMENT\n\n McClane argues that the June 14 final judgment is a nullity, because a\n\njudgment dismissing the case was orally rendered on May 21 and no order\n\nreinstating the case was signed prior to June 14. The date an order or judgment is\n\nsigned determines the beginning of the court\u2019s plenary power to grant a new trial\n\nor to vacate an order of dismissal. See Tex. R. Civ. P. 306a(1). The county court at\n\nlaw had jurisdiction over the matter until thirty days after a final written order\n\ndisposed of the case. See id.; Tex. R. Civ. P. 329b(d). No written order of dismissal\n\nwas signed after the first trial setting. No final order or judgment was signed until\n\nJune 14. The trial court had jurisdiction over the matter at that time. See Tex. R.\n\nCiv. P. 306a, 329b. Issue one is overruled.\n\n THE AUTHORIZED REPRESENTATIVE\n\n McClane maintains that the trial court erred in allowing New Caney Oaks, a\n\ncorporation, to be represented by a non-attorney at trial. She argues that \u201c[w]hen a\n\nnon-attorney purports to represent a corporation in a legal proceeding, the non-\n\n 5\n\fattorney\u2019s acts have no effect and are void.\u201d We understand this issue as including\n\na challenge to the legal sufficiency of the proof at trial, because McClane argues\n\nwe should treat the non-attorney\u2019s acts in this context as having no effect. See Tex.\n\nR. App. P. 33.1(d).\n\n A forcible detainer action is governed by discrete provisions in the Texas\n\nProperty Code and Rules of Civil Procedure. See Tex. Prop. Code Ann. \u00a7\u00a7 24.001-\n\n.011 (West 2000 & Supp. 2012); Tex. R. Civ. P. 738-55. The action is intended to\n\nbe a summary, speedy, and inexpensive remedy for resolving a dispute over \u201cwho\n\nis entitled to possession of the premises.\u201d See McGlothlin v. Kliebert, 672 S.W.2d\n\n231, 232 (Tex. 1984). The only issue to be determined is the right to actual\n\npossession. Tex. R. Civ. P. 746. But a claim for rent may be brought with the\n\naction. Tex. R. Civ. P. 738.\n\n Under the Rules and the Property Code, a party may be represented by an\n\n\u201cauthorized agent\u201d in justice court in a forcible detainer suit \u201cfor non-payment of\n\nrent or holding over beyond the rental terms[.]\u201d See Tex. R. Civ. P. 747a\n\n(\u201cauthorized agents\u201d); see also Tex. R. Civ. P. 739 (\u201cauthorized agent\u201d); Tex.\n\nProp. Code Ann. \u00a7 24.011 (West 2000) (\u201cauthorized agents, who need not be\n\nattorneys\u201d). The written sworn complaint must be filed by \u201cthe party aggrieved or\n\nhis authorized agent[.]\u201d See Tex. R. Civ. P. 739. The authorized agent must be an\n\n 6\n\findividual, not a business entity. See Tex. Att\u2019y Gen. Op. No. JM-451 (1986). The\n\nlaw anticipates that the business\u2019s authorized agent, if not a licensed attorney, will\n\nbe a property manager or someone similarly involved with the property, so that the\n\nindividual has knowledge sufficient to sign an oath that the allegations in the\n\ncomplaint are true. See id.; Tex. R. Civ. P. 739, 741. No written answer was filed\n\nin the justice court before the judgment, and the authority of the property manager\n\nto represent New Caney Oaks was not attacked by McClane in the justice court.\n\nSee generally Holloway v. Paul O. Simms Co., 32 S.W.2d 672, 673-74 (Tex. Civ.\n\nApp.\u2014Austin 1930, no writ) (affidavit sufficient \u201cwhere no attack is made upon\n\nthe authority of the agent\u201d in justice court). We conclude the property manager was\n\nan authorized agent for the purpose of signing the sworn complaint.\n\n In a forcible detainer action, Rule 753 provides that when no answer is filed\n\nin the justice court and no answer is filed within eight days after the transcript is\n\nfiled in the county court at law, the allegations of the sworn complaint \u201cmay be\n\ntaken as admitted[,]\u201d and a default judgment may be signed. See Tex. R. Civ. P.\n\n753. No trial is necessary unless the allegations are insufficient to support a\n\njudgment. See Cunningham v. Anglin, No. 05-10-01023-CV, 2011 Tex. App.\n\nLEXIS 6385, at **5-6 (Tex. App.\u2014Dallas Aug. 12, 2011, no pet.) (mem. op.).\n\n\n\n\n 7\n\fEssentially, Rule 753 treats the sworn complaint filed in the justice court as the\n\ninitial pleading in the county court at law.\n\n New Caney Oaks argues that McClane was in default because she failed to\n\nfile a written answer in the county court at law. The record does not include a\n\nnotice from the clerk to McClane of the necessity for filing a written answer in the\n\ncounty court at law. See Tex. R. Civ. P. 751. McClane filed an affidavit of inability\n\nto pay costs and a request to appeal in the justice court. The Supreme Court has\n\nheld that a \u201cpauper\u2019s affidavit\u201d in a forcible detainer case suffices as a pro se\n\nanswer entitling a defendant to notice of a hearing. See Hughes v. Habitat\n\nApartments, 860 S.W.2d 872, 872-73 (Tex. 1993); see also Brown v. Apex Realty,\n\n349 S.W.3d 162 (Tex. App.\u2014Dallas 2011, pet. denied) (\u201cBoth an appeal bond\n\nfiled pursuant to rule 749 and a pauper\u2019s affidavit filed pursuant to rule 749a\n\noperate as an answer.\u201d). McClane\u2019s affidavit of inability to pay costs included a\n\nhand-written note explaining her medical difficulties, and also stating: \u201cHowever I\n\nhad the money that was owed. She told me to hold on to everything and not to\n\nbother coming to court, that it would end up costing me an extra fee if I came to\n\ncourt.\u201d We conclude the affidavit suffices as a written answer. See Hughes, 860\n\nS.W.2d at 872-73.\n\n\n\n\n 8\n\f Despite notice of the trial setting, McClane failed to appear at trial. But a\n\npost-answer \u201cdefault\u201d is not an abandonment of the answer, nor is it an admission\n\nof any of the issues controverted by the answer. Stoner v. Thompson, 578 S.W.2d\n\n679, 682 (Tex. 1979). New Caney Oaks was required to offer evidence to prove the\n\ncase as in a judgment upon a trial. Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d\n\n922, 930 (Tex. 2009); Bradley Motors, Inc. v. Mackey, 878 S.W.2d 140, 141 (Tex.\n\n1994).\n\n The property manager could not represent the corporation at the trial in the\n\ncounty court at law. See L\u2019Arte de la Mode, Inc. v. Nieman Marcus Grp., 395\n\nS.W.3d 291, 295 (Tex. App.\u2014Dallas 2013, no pet.) (\u201cThe representative could not\n\nhave . . . presented a case[.]\u201d); Custom-Crete, Inc. v. K-Bar Servs., Inc., 82 S.W.3d\n\n655, 659 (Tex. App.\u2014San Antonio 2002, no pet.). A corporation is not authorized\n\nto practice law. Unauthorized Practice of Law Comm. v. Am. Home Assurance Co.,\n\n261 S.W.3d 24, 33 (Tex. 2008). The Supreme Court explained:\n\n [T]he Court has exclusive authority to adopt rules governing\n admission to the practice of law in Texas. Those rules permit only\n individuals meeting specified qualifications to practice law. Entities . . .\n are excluded.\n\nId. (footnotes omitted). And although Texas Rule of Civil Procedure 7 provides\n\nthat \u201c[a]ny party to a suit may appear and prosecute or defend his rights therein,\n\neither in person or by an attorney of the court[,]\u201d the Rule does not permit a\n 9\n\fcorporation to appear through an agent who is not a licensed attorney. See Dell\n\nDev. Corp. v. Best Indus. Unif. Supply Co., 743 S.W.2d 302, 303 (Tex. App.\u2014\n\nHouston [14th Dist.] 1987, writ denied); see also Elec. Data Sys. Corp. v. Tyson,\n\n862 S.W.2d 728, 737 (Tex. App.\u2014Dallas 1993) (orig. proceeding) (\u201c[O]nly a\n\nlicensed attorney can appear and represent a corporation.\u201d).\n\n The Property Code includes a provision permitting, under certain\n\ncircumstances, a party to \u201cbe represented by their authorized agents, who need not\n\nbe attorneys[,]\u201d in a county court hearing based on a sworn motion that a tenant\n\nfailed to pay rent ordered by the justice court to be paid during the appeal of the\n\neviction. See Tex. Prop. Code Ann. \u00a7 24.0054(a-4),(e) (West Supp. 2012); see also\n\nTex. Prop. Code Ann. \u00a7 24.0053 (West Supp. 2012). But the justice court\u2019s\n\njudgment in this case did not provide for a monthly amount of rent to be paid\n\nduring the pendency of the appeal, a requirement of section 24.0053(a). And even\n\nhad the justice court\u2019s judgment contained the required payment information, New\n\nCaney Oaks did not file a sworn motion in the county court at law \u201cthat the tenant\n\nfailed to pay rent as required.\u201d See Tex. Prop. Code Ann. \u00a7 24.0054(a-4). New\n\nCaney Oaks did not follow the procedures outlined in sections 24.0053 and\n\n24.0054 of the Texas Property Code. See also Tex. R. Civ. P. 749b(3) (writ of\n\nrestitution). Instead, New Caney Oaks sought and obtained a judgment against\n\n 10\n\fMcClane that was based on the sworn complaint filed in justice court by the\n\nproperty manager and on the presentation of the case by the property manager at\n\ntrial in the county court at law.\n\n Although, as the Supreme Court has explained, \u201c[g]enerally a corporation\n\nmay be represented only by a licensed attorney[,]\u201d whether a non-lawyer\u2019s act for\n\nthe corporation nevertheless may be given effect depends on whether the act is like\n\n\u201cthe specific ministerial task of depositing cash with a clerk in lieu of a cost bond\u201d\n\nthat the Supreme Court gave effect in Kunstoplast. See Kunstoplast of Am., Inc. v.\n\nFormosa Plastics Corp., 937 S.W.2d 455, 456 (Tex. 1996); compare L\u2019Arte de la\n\nMode, Inc., 395 S.W.3d at 295 (The non-attorney corporate representative could\n\nnot have objected to evidence, cross-examined witnesses, presented a case, or\n\npresented argument to the trier of fact.); Kelly v. Hinson, 387 S.W.3d 906, 912\n\n(Tex. App.\u2014Fort Worth 2012, pet. denied); Computize, Inc. v. NHS Commc\u2019ns\n\nGrp., Inc., 992 S.W.2d 608, 612-13 (Tex. App.\u2014Texarkana 1999, no pet.). The\n\npresentation of a claim at trial is not, however, a mere ministerial act. See L\u2019Arte\n\nde la Mode, Inc., 395 S.W.3d at 295; Computize, Inc., 992 S.W.2d at 612 (\u201c[A]\n\nresponse to a motion for summary judgment is not a ministerial act.\u201d). If a court\n\ngives any effect to the property manager\u2019s presentation, the unlicensed practice of\n\nlaw would be permitted. And evidence is legally insufficient when the court is\n\n 11\n\fbarred by rules of law from giving weight to the only evidence offered to prove a\n\nvital fact. See Volkswagen of Am., Inc. v. Ramirez, 159 S.W.3d 897, 903 (Tex.\n\n2004). We hold that the property manager\u2019s presentation of the claim in the county\n\ncourt of law had no legal effect. That is, her testimony under the circumstances is\n\nlegally insufficient evidence to support the judgment. On this record, therefore, the\n\ncounty court at law\u2019s judgment cannot be sustained.\n\n Normally, an appellate court renders judgment when the evidence is legally\n\ninsufficient to support the trial court\u2019s judgment following a trial on the merits. See\n\nGuevara v. Ferrer, 247 S.W.3d 662, 670 (Tex. 2007). In this case though, the trial\n\ncourt entered a judgment on the pleadings when neither party properly appeared.\n\nSee Custom-Crete, Inc., 82 S.W.3d at 659 (The non-attorney representative\u2019s\n\npresence does not amount to an appearance at trial by the corporation.). The case\n\nhas not been fully developed. See Dolgencorp, 288 S.W.3d at 930. In Dolgencorp,\n\nthe Supreme Court explained that the appropriate remedy is a new trial when there\n\nis legally insufficient evidence to support a post-answer default judgment. Id. A\n\nnew trial is required here. Appellant\u2019s issue two is sustained.\n\n CRADDOCK\n\n McClane argues she is entitled to a new trial under the standard in Craddock\n\nv. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex. 1939); see also Ivy v.\n\n 12\n\fCarrell, 407 S.W.2d 212, 213-14 (Tex. 1966). She argues her failure to appear at\n\ntrial was not intentional or the result of conscious indifference, but was the result\n\nof an accident or mistake. McClane provided an affidavit explaining her physical\n\ncondition and why she was eight minutes late for the trial setting. She was\n\nimpaired by the side-effects of chemotherapy. New Caney Oaks did not controvert\n\nher proof. See Barnes, 330 S.W.3d at 928. McClane also argues that she did not\n\nreceive adequate notice of termination, and that New Caney Oaks failed to comply\n\nwith the lease requirements to terminate the tenancy. See Kennedy v. Andover\n\nPlace Apartments, 203 S.W.3d 495, 498 (Tex. App\u2014Houston [14th Dist.] 2006,\n\nno pet.) (Section 24.005 provides that if a lease contains a provision granting an\n\nopportunity to respond, a notice to vacate may not be given until that period has\n\nexpired.). Finally, she notes that New Caney Oaks did not contest the assertion in\n\nher motion for new trial that a new trial would not injure New Caney Oaks. See\n\nCliff v. Huggins, 724 S.W.2d 778, 779 (Tex. 1987). Because her argument under\n\nCraddock would not result in greater relief than the new trial afforded by our\n\nresolution of issue two, however, we need not address appellant\u2019s issue three.\n\n The trial court\u2019s judgment is reversed. The cause is remanded for a new trial.\n\n\n\n\n 13\n\f REVERSED AND REMANDED.\n\n\n ____________________________\n DAVID GAULTNEY\n Justice\nSubmitted on September 13, 2013\nDelivered on October 31, 2013\n\nBefore Gaultney, Kreger, and Horton, JJ.\n\n\n\n\n 14\n\f"} -{"text": "\n495 S.E.2d 172 (1998)\nDouglas R. JONES, Plaintiff,\nv.\nCAPITOL BROADCASTING COMPANY, INC., and Carolina Ford Dealers Advertising Association, Inc., Defendants.\nNo. COA97-94.\nCourt of Appeals of North Carolina.\nJanuary 6, 1998.\n*173 Clark Wharton & Berry by Frederick L. Berry, Greensboro, for plaintiff-appellant.\nAdams, Kleemeier, Hagan, Hannah & Fouts by W. Winburne King, III, and Benjamin A. Kahn, Greensboro, for defendants-appellees.\nLEWIS, Judge.\nPlaintiff appeals from an order granting defendants' motion to dismiss under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure.\nAccording to the allegations of the complaint, during the 1995-1996 football season, defendants conducted a promotional campaign to promote the Carolina Panthers football team and the Ford Dealers of North Carolina, the \"One Half Ton of Fun\" Contest (\"Contest\"). Defendants advertised to the general public a contest for which the grand prize was a new Ford F-150 pickup truck. Plaintiff filled out an entry form and entered the Contest. On 16 January 1996, defendants' agent, Brittany Foster, notified plaintiff that he had been selected as the winner. Plaintiff alleged that Ms. Foster stated: \"Congratulations, you have won a F-150 Ford truck.\" At first plaintiff did not believe that he had won the Contest, but after repeated assurances from Ms. Foster, he was convinced. Later that day, Scott Crites, Manager of the Carolina Panthers Radio Network, called plaintiff and told him that he *174 had not won the Contest and that the prize had been given to someone else.\nDefendants maintained that plaintiff was not the winner because his name was not the first selected from the drawing. Unable to reach the first person whose name was drawn, defendants selected plaintiff's name during a second drawing. Subsequently, the first winner appeared to claim his prize and defendants awarded him the truck.\nPlaintiff initiated this suit alleging breach of contract, violation of N.C.Gen.Stat. \u00a7 75-32, \"Representation of Winning a Prize,\" and violation of N.C.Gen.Stat. \u00a7 75-1.1 for unfair and deceptive trade practices. Defendants moved to dismiss plaintiff's complaint for failure to state a claim for which relief could be granted. The motion was granted, and plaintiff appeals.\nPlaintiff assigns error to the trial court's dismissal of its complaint on the three aforementioned grounds. We find that plaintiff has stated a claim for breach of contract and violation of G.S. \u00a7 75-32, but not for unfair and deceptive trade practices.\nOur standard of review of a motion to dismiss is \"whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory.\" Harris v. NCNB Nat'l Bank of N.C., 85 N.C.App. 669, 670, 355 S.E.2d 838, 840 (1987). In ruling upon such a motion, the complaint is to be liberally construed, and the trial court should not dismiss the complaint \"unless it appears beyond doubt that [the] plaintiff could prove no set of facts in support of his claim which would entitle him to relief.\" Dixon v. Stuart, 85 N.C.App. 338, 340, 354 S.E.2d 757, 758 (1987).\nWith these principles in mind, we find that plaintiff has stated a claim for breach of contract against defendants. Plaintiff alleges that a contract was formed when he submitted his entry ticket according to contest rules. Defendants respond that no contract exists because the contest was completely voluntary, unconnected to the purchase of an automobile, and placed no obligation on plaintiff. As a result, defendants contend that there is no consideration supporting the purported contract.\nWhether the entry of a contest ticket into a raffle or contest gives rise to a binding contract is an issue of first impression for North Carolina courts. We choose to follow the majority of jurisdictions that hold contract law governs the issue. See Annotation, Private Contests and Lotteries: Entrants' Rights and Remedies, 64 A.L.R.4th 1021, 1045-52 (1988). We adopt the rule that advertising a promotional contest to the public is in the nature of an offer. An enforceable contract is formed when a party accepts that offer and consideration is provided by entering the contest and complying with all of the terms of the offer. See Walters v. National Beverages, Inc., 18 Utah 2d 301, 422 P.2d 524 (1967) (public promotion program offering automobile as first prize governed by contract law); Johnson v. BP Oil Company, 602 So.2d 885 (Ala.1992) (running a promotional contest is in the nature of offer and enforceable contract is formed when party accepts); Haynes v. Department of Lottery, 630 So.2d 1177 (Fla.1994) (lottery winner's entitlement to a prize is governed by the principles of contract law), review denied, 642 So.2d 746 (1994); Lucas v. Godfrey, Reader's Digest Association, 161 Wis.2d 51, 467 N.W.2d, 180 (1991) (contract law governs relationship between sponsor and contestant, so that contestant who returns card accepts offer to enter the contest and if number is selected, contestant is entitled to prize).\nIn this case, plaintiff alleged that he entered the Contest by submitting an entry form in exchange for an opportunity to have it drawn as the winning ticket. Plaintiff's name was drawn and plaintiff was notified by defendant that he had won the prize or its cash equivalent. Plaintiff has never received the truck or anything else. We find these allegations sufficient to state a claim for breach of contract.\nNext, we also find that plaintiff has stated a cause of action under G.S. \u00a7 75-32. The statute provides:\nNo person, firm or corporation engaged in commerce shall, in connection with the sale or lease or solicitation for the sale or lease *175 of any goods, property, or service, represent that any other person, firm or corporation has won anything of value or is the winner of any contest, unless all of the following conditions are met:\n(1) The recipient of the prize must have been selected by a method in which no more than ten percent (10%) of the names considered are selected as winners of any prize;\n(2) The recipient of the prize must be given the prize without any obligation; and\n(3) The prize must be delivered to the recipient at no expense to him, within 10 days of the representation.\nThe use of any language that has a tendency to lead a reasonable person to believe he has won a contest or anything of value, including but not limited to \"congratulations,\" and \"you are entitled to receive,\" shall be considered a representation of the type governed by this section.\nG.S. \u00a7 75-32 (1994).\nDefendants argue that plaintiff has not stated a claim under the statute because they were not engaged \"in commerce ... in connection with the sale or lease or solicitation for the sale or lease of any goods\" while operating the Contest. Plaintiff counters by claiming that while the purchase of a car was not necessary, the clear purpose of the contest was to advertise, generate interest in, and solicit customers for the purchase of Ford automobiles. This purpose qualifies as commerce in \"connection with the sale or solicitation of goods.\"\nDefendants admit in their own brief that, \"as a promotion, Capitol Broadcasting and Carolina Ford dealers organized a contest to give away a Ford F-150 truck.\" Advertising and promoting consumer interest in one's products are clearly business activities. Defendants rely on our decision in Malone v. Topsail Area Jaycees, Inc., 113 N.C.App. 498, 439 S.E.2d 192 (1994), in which we found that promotional activity did not amount to \"business activities ... in commerce.\" However, Malone is distinguishable from the facts of this case. In Malone, we held that a golfing contest which was sponsored by a nonprofit corporation in order to raise money did not, \"in the absence of any other evidence or allegations relating to the business activities\" of the nonprofit corporation, \"affect[ ] commerce\" for purposes of the unfair and deceptive trade practices statute. Id. at 502, 439 S.E.2d at 194.\nIn the instant case, defendants are in the business of advertising and selling automobiles. The Contest was calculated to promote and encourage additional sales of those automobiles. Defendants used language which had a tendency to lead plaintiff to believe that he had won a new truck in its contest; he was told \"Congratulations, you have won a F-150 Ford truck,\" thereby triggering the statute. Defendants then failed to deliver the truck to plaintiff within ten days of its representation to him that he had won. We find these allegations sufficient to state a claim for violation of G.S. \u00a7 75-32.\nFinally, plaintiff contends that he has also stated a claim for violation of the unfair and deceptive trade practices act under G.S. \u00a7 75-1.1. We disagree.\nUnder G.S. \u00a7 75-1.1, an act or practice is unfair if it \"is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers.\" Marshall v. Miller, 302 N.C. 539, 548, 276 S.E.2d 397, 403 (1981). An act or practice is deceptive if it \"has the capacity or tendency to deceive.\" Id. at 548, 276 S.E.2d at 403. A mere breach of contract, even if intentional, is not an unfair or deceptive act under G.S. \u00a7 75-1.1. Bartolomeo v. S.B. Thomas, Inc., 889 F.2d 530, 535 (4th Cir.1989); Mosley & Mosley Builders, Inc. v. Landin Ltd., 97 N.C.App. 511, 518, 389 S.E.2d 576, 580, disc. review denied, 326 N.C. 801, 393 S.E.2d 898 (1990). \"[A] plaintiff must show substantial aggravating circumstances attending the breach to recover under the Act.\" Bartolomeo, 889 F.2d at 535.\nA claim is properly dismissed where there is \"an absence of facts sufficient to make a good claim.\" Garvin v. City of Fayetteville, 102 N.C.App. 121, 401 S.E.2d 133 (1991). Here, plaintiff's complaint does not allege any aggravating circumstances. Plaintiff merely contends that defendants engaged *176 in unfair and deceptive business practices by breaching its contract in failing to award him a truck. We conclude that these facts do not present aggravating circumstances surrounding defendant's breach of contract and are insufficient to raise a claim of unfair and deceptive practices pursuant to G.S. \u00a7 75-1.1.\nIn conclusion, we find that plaintiff has stated a claim for breach of contract and a claim under G.S. \u00a7 75-32, but has not stated a claim of unfair deceptive trade practices under G.S. \u00a7 75-1.1. The trial court's order is therefore affirmed in part and reversed in part.\nAffirmed in part and reversed in part.\nJOHN C. MARTIN and McGEE, JJ., concur.\n"} -{"text": "309 F.3d 1\nINTERNATIONAL UNION OF PAINTERS AND ALLIED TRADES, LOCAL UNIONS NO. 970 AND 1144, AFL-CIO-CLC, Petitioners,v.NATIONAL LABOR RELATIONS BOARD, Respondent.\nNo. 01-1242.\nNo. 01-1323.\nUnited States Court of Appeals, District of Columbia Circuit.\nArgued September 6, 2002.\nDecided October 25, 2002.\n\nOn Petition for Review and Application for Enforcement of an Order of the National Labor Relations Board\nForrest H. Roles argued the cause and filed the briefs for W.R. Mollohan, Inc.\nJoseph E. Kolick, Jr. argued the cause for International Union of Painters and Allied Trades, Local Unions No. 970 and 1144, AFL-CIO-CLC. With him on the brief was Kirsten Lea Doolittle.\nDavid A. Fleischer, Senior Attorney, National Labor Relations Board, argued the cause for the Board. With him on the brief were Arthur F. Rosenfeld, General Counsel, John H. Ferguson, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Fred L. Cornnell, Jr., Supervisory Attorney. Frederick Havard, Supervisory Attorney, and Jill A. Griffin, Attorney, National Labor Relations Board, entered appearances.\nBefore: TATEL and GARLAND, Circuit Judges, and WILLIAMS, Senior Circuit Judge.\nOpinion for the Court filed by Senior Circuit Judge WILLIAMS.\nSTEPHEN F. WILLIAMS, Senior Circuit Judge:\n\n\n1\nThis case arises from the refusal of an employer to enter into and abide by a collective bargaining agreement (\"CBA\") negotiated with various unions (collectively, the \"union\"). The employer claimed that it had not authorized the negotiators and therefore was not bound by the agreement; it also argued that the union's failure to have obtained majority status excused the employer's non-compliance. The National Labor Relations Board rejected these arguments. See W.R. Mollohan, Inc., 333 NLRB No. 162, 2001 WL 497324, at *1, *3 (2001). The employer also claimed that two clauses of the agreement violated the National Labor Relations Act. The Board rejected one such claim and accepted the other, relating to the \"successorship clause.\" Id. at *2. But it ruled that the allegedly defective language in that clause was severable and therefore did not justify the employer's refusal to abide by the agreement. Id. at *3. The union petitioned for review, challenging the Board's edit of the successorship clause, and the Board filed an application for enforcement. The employer then filed an answer under Rule 15(b)(2) of the Federal Rules of Appellate Procedure, defending its refusal to bargain. Rejecting the employer's claims and accepting those of the union, we grant the Board's application for enforcement except with regard to the order's deletion of language from the successorship clause.\n\n\n2\nBecause there is little overlap between the issues relating to the negotiations and majority status on the one hand, and to the two disputed clauses on the other, we address them separately.\n\n\n3\nOur review is governed by \u00a7 10(e) of the Act, 29 U.S.C. \u00a7 160(e), and the Administrative Procedure Act. The Board's factual findings \"shall be conclusive\" if supported by substantial evidence. 29 U.S.C. \u00a7 160(e). Its reasonable interpretations of the Act are entitled to deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984). Board interpretations of the CBA, however, receive no deference. Litton Fin'l Printing Div. v. NLRB, 501 U.S. 190, 202-03, 111 S.Ct. 2215, 2223-24, 115 L.Ed.2d 177 (1991).\n\n\n4\n* * *\n\n\n5\nW.R. Mollohan, Inc. is in the business of painting and repainting bridges, overpasses, and tunnels on federal and state highways. For many years, Mollohan signed union contracts negotiated by the Charleston Chapter of the Painting and Decorating Contractors of America (\"the Association\"), which represented several area employers in collective bargaining negotiations with the union. Mollohan's Vice President of Operations, Joe Beam, was president of the Association and served on its negotiating committee. The Association negotiated the contract preceding the one now in dispute, which Beam then signed on behalf of the company.\n\n\n6\nIn March 1998 the union expressed its desire to negotiate a new contract by sending a letter to the Association. Beam, in his capacity as president of the Association, sent a similar letter to the union expressing the Association's desire to negotiate as well. At the first bargaining session, Beam and Association Secretary-Treasurer Ken Bowen told the union that they were representing seven named employers, including Mollohan. Negotiations began.\n\n\n7\nBeam resigned from the negotiating committee in the course of the negotiations, but didn't indicate that Mollohan was withdrawing authority from the Association to bargain on its behalf. About 10 days later, on April 28, 1998, the union and the Association reached agreement on a new CBA, subject to ratification by the union's membership, which followed in due course.\n\n\n8\nOn May 8 Mollohan notified the Association and the union that it was withdrawing authorization from the Association to bargain on its behalf. The union took the position that the company was already bound, and asked Mollohan to sign. Mollohan refused and, without bargaining with the union, ceased making contractually required payments to several funds, and instead began depositing employee pension funds into an escrow account.\n\n\n9\nActing on separate charges filed by the union, the Board's General Counsel issued a consolidated complaint alleging that Mollohan had violated \u00a7\u00a7 8(a)(1), (5) of the Act, 29 U.S.C. \u00a7 158(a)(1), (5), by these and related acts of non-compliance with the agreement. Besides its claim that the negotiators lacked authority, Mollohan argued that the agreement was invalid because two of its clauses violated the Act, thus excusing Mollohan's non-compliance.\n\n\n10\nAfter a hearing, the Administrative Law Judge issued a decision entirely rejecting Mollohan's claims. It didn't have to consider severability, as it found the two challenged clauses not violative of the Act.\n\n\n11\nThe Board affirmed the ALJ's findings of violations, holding that the Association had apparent authority to bind the company. Mollohan, 333 NLRB No. 162, 2001 WL 497324, at *1. Contrary to the ALJ, however, the Board found that some language in the successorship clause violated \u00a7 8(e) of the Act, and accordingly it modified the ALJ's recommended order to require that Mollohan execute and abide by the contract only after deletion of the unlawful language. Id. at *2-*3.\n\n\n12\nFirst, we reject Mollohan's argument that the Board's finding of apparent authority was not supported by substantial evidence. As both the ALJ and the Board discussed at length in their opinions, the Association told the union, in the presence of company representatives, that it represented the company, and the company did not purport to revoke that authority until after the agreement was reached. Id. at *1. Thus the Board's conclusion that the Association had apparent authority to bind Mollohan is supported by substantial evidence.\n\n\n13\nAlthough the company argues that the Board erred in deciding the case on an issue, apparent authority, that it says was not litigated before the ALJ, Employer's Br. at 13, Mollohan failed to raise the argument before the Board. Thus we lack jurisdiction. 29 U.S.C. \u00a7 160(e) (\"No objection that has not been urged before the Board ... shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances.\"). Mollohan's attempted parry \u2014 that it could not raise the claim because it didn't know that the Board would adopt that theory until it issued its decision \u2014 doesn't work. Mollohan could have raised the point in a petition for reconsideration. International Ladies' Garment Workers' Union v. Quality Mfg. Co., 420 U.S. 276, 281 n. 3, 95 S.Ct. 972, 975 n. 3, 43 L.Ed.2d 189 (1975).\n\n\n14\nSecond, although Mollohan appears to accept the general validity of the Board's rule that the company could not repudiate the agreement simply because the union had not attained majority status, John Deklewa & Sons v. Intern. Association of Bridge Workers, Local 3, 282 NLRB 1375, 1385, 1987 WL 90249 (1987) (\"Deklewa\"), enforced sub nom. International Ass'n of Bridge, Structural & Ornamental Iron Workers v. NLRB, 843 F.2d 770, 775-780 (3d Cir.1988), it argues that the Board erred in not creating an exception to that rule.\n\n\n15\nSection 8(f) of the Act permits a construction industry employer and a union to enter into a contract even though \"the majority status of such [union] has not been established ... prior to the making of such agreement.\" 29 U.S.C. \u00a7 158(f). The parties here pursued that course. The Board applied the interpretation of \u00a7 8(f) that it adopted in Deklewa, under which an employer may not unilaterally repudiate a pre-hire agreement unless the employees have voted to decertify the union or change their bargaining representative. See Mollohan, 333 NLRB No. 162, 2001 WL 497324, at *3.\n\n\n16\nIn Deklewa the Board changed course from an earlier interpretation that had allowed repudiation of \u00a7 8(f) agreements at any time before the union gained majority status. The Deklewa Board found that the prior interpretation was not supported by the text or legislative history of the Act, and had caused disruption and instability because \"neither the parties to the agreement nor the employees working under it can know with any degree of certainty what their respective rights and obligations are at any given time.\" Deklewa, 282 NLRB at 1383. In fact, the Board found that the right to repudiate a \u00a7 8(f) agreement was \"so antithetical to traditional principles of collective-bargaining under the Act\" that it was \"likely that Congress would have expressly stated such a right if it intended to create one.\" Id. at 1381. So it held that both parties to a \u00a7 8(f) agreement are required by \u00a7\u00a7 8(a)(5) and 8(b)(3) \"to comply with that agreement unless the employees vote, in a Board-conducted election, to reject (decertify) or change their bargaining representative.\" Id. at 1385. The Third Circuit enforced the Deklewa ruling, finding it to be a reasonable and permissible construction of the Act. 843 F.2d at 775-80.\n\n\n17\nMollohan does not here argue that the Board's Deklewa rule is an unreasonable interpretation of the Act. In fact, the company expressly \"acknowledges the soundness of the Board's ... argument that the Board has authority to adopt reasonable interpretations of the Act, to which this Court must give deference, even when the Board has changed its mind in an effort to better effectuate those policies.\" Emp. Reply Br. at 4. Instead, Mollohan suggests that we should not approve the Board's reliance on Deklewa, in certain circumstances, i.e., \"in a case like this one where its application is critical.\" Emp. Br. at 19.\n\n\n18\nIn light of the company's limited argument, we have no need to rule upon the reasonableness of the Deklewa interpretation as a whole. The narrower claim for an exception builds on the proposition that application of a generally valid rule may prove invalid in a case presenting special circumstances. See, e.g., WAIT Radio v. Federal Communications Comm'n, 418 F.2d 1153, 1157-58 (D.C.Cir.1969). But here Mollohan has pointed to no specific facts that distinguish it from any other situation in which a party to a \u00a7 8(f) agreement might wish to repudiate the agreement. So far as appears, its argument is simply that the \"application is critical\" in the sense that it is outcome-determinative; obviously an exception for that circumstance would obliterate the rule.\n\n\n19\nThe employer also argues that we should apply the Board's pre-Deklewa interpretation of the Act because \"this case arose within the jurisdiction of the Fourth Circuit,\" Employer's Brief at 20, which appears to be the only circuit to resist the Board's attempt to implement its Deklewa interpretation. See Industrial Turnaround Corp. v. NLRB, 115 F.3d 248 (4th Cir.1997). But the argument is to some degree inconsistent with Mollohan's failure to claim that the Deklewa rule is invalid. To the extent that Mollohan asks us to create special circuit law depending on the geographic origins of a case, it asks us \u2014 with no precedential support, unsurprisingly \u2014 to abandon the federal circuits' normal task of trying to determine federal law as correctly as possible. See, e.g., In re Korean Air Lines Disaster of September 1, 1983, 829 F.2d 1171, 1176 (D.C.Cir.1987) (\"The federal courts spread across the country owe respect to each other's efforts and should strive to avoid conflicts, but each has an obligation to engage independently in reasoned analysis. Binding precedent for all is set only by the Supreme Court....\"); compare Hill v. Henderson, 195 F.3d 671, 678 (D.C.Cir.1999) (discussing special situation where one circuit's \"law of the case\" is to be honored by another). Mollohan's other arguments against Deklewa, raised for the first time in its reply brief, are waived.\n\n\n20\n* * *\n\n\n21\nWe now turn to the validity of specific clauses in the CBA. First is the preservation-of-work clause.\n\n\n22\nIn a very obliquely expressed argument, Mollohan contends that the preservation-of-work clause is invalid because, it says, \"it applies ... to work of a type not performed by the Employer.\" Emp. Br. at 17. Mollohan offers no analysis, merely citing the dissent of Board member Hurtgen from the Board decision, Mollohan, 333 NLRB No. 162, 2001 WL 497324, *2, n. 11., a dissent that in turn simply cites his own dissent in Carpenter's District Council of New York City (Mfg. Woodworkers Ass'n.), 326 NLRB 321, 328-29, 1998 WL 554504 (1998) (Hurtgen dissent), which in turn points us to two other cases, see id. at 328 (Hurtgen dissent) (\"The more particularized rationale for my position is to be found in the [Painters District Council 51 (]Manganaro [Corp. Maryland), 321 NLRB 158, 1996 WL 251866 (1996)]dissent and in [Carpenters District Council of Northeast Ohio (]Alessio [Construction), 310 NLRB 1023, 1993 WL 104853 (1993)].\"). A litigant must do more than simply point to the beginning of a string of incorporations by reference and ask the court to discern which arguments he seeks to advance. This is particularly true where, as here, the incorporated arguments involve contract language that differs from case to case and in all instances from the text of the clause in this case. In order to prompt a ruling from this court, Mollohan needed to at least make a rudimentary argument explaining how the words of this contract conveyed an illegal meaning. As Mollohan has failed to do so, it would be irresponsible for us to interpret the language. Thus we cannot find that the preservation-of-work clause violates \u00a7 8(e).\n\n\n23\nThe remaining issue is posed by the successor clause. Its key parts are as follows: In the event the Employer's business is, in whole or in part, sold, leased, transferred, or taken over by sale, transfer, lease, assignment, receivership, or bankruptcy proceedings, such business and operation shall continue to be subject to the terms and conditions of this Agreement for the life thereof.\n\n\n24\nIt is understood by this provision that the parties hereto shall not use any leasing or other transfer device to a third party to evade this Agreement....\n\n\n25\nIn the event the Employer fails to require the purchase, transferee, or lessee to assume the obligations of this Agreement, the Employer (including partners thereof) shall be liable to the Union, and to the employees covered for all damages sustained as a result of such failure to require assumption of the terms of this Agreement, but shall not be liable after the purchaser, or lessee has agreed in writing to assume the obligations of this Agreement.\n\n\n26\nJ.A. at 245-46. Mollohan's complaint, which the Board accepted, is that the clause violates \u00a7 8(e) of the Act insofar as it covers leases. Section 8(e) provides in relevant part:\n\n\n27\nIt shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforceable and void....\n\n\n28\n29 U.S.C. \u00a7 158(e). The section is designed to eliminate secondary boycotts, i.e., union attempts to pressure neutral employers to stop doing business with other businesses involved in labor disputes. See National Woodwork Mfrs. Assoc. v. NLRB, 386 U.S. 612, 87 S.Ct. 1250, 18 L.Ed.2d 357 (1967). Section 8(e) does not, however, reach \"primary\" provisions, i.e., those encompassing \"employees' activity to pressure their employer to preserve for themselves work traditionally done by them.\" Id. at 635, 87 S.Ct. at 1263 (emphasis added).\n\n\n29\nThe Board noted that it \"has generally considered a lease to be a form of `doing business' within the meaning of Section 8(e),\" and that because the clause applies \"regardless of whether the unit employees are retained,\" it \"exceeds the legitimate primary purpose of protecting unit work and is directed at the secondary purpose of furthering union objectives elsewhere.\" Mollohan, 333 NLRB No. 162, 2001 WL 497324, *2.\n\n\n30\nBut the clause in question is a successorship clause, explicitly said to take effect only when \"the Employer's business is, in whole or in part\" transferred to another entity. Moreover, as the ALJ correctly noted, the clause itself refers to efforts to use a lease transfer \"to evade this Agreement.\" Id. We think it clear that the clause is designed to protect the employees' legitimate and primary interest in retaining the benefits of the CBA in the event of a transfer \u2014 as it says \u2014 of the \"business.\" The Board's argument that the clause is secondary because it applies \"regardless of whether unit employees are retained,\" Mollohan, 333 NLRB No. 162, 2001 WL 497324, at *2, not only overlooks the clause's limited trigger (transfer in whole or in part of the employer's \"business\"), but it proves too much, as the same reasoning would doom the sale language, which the Board finds acceptable. We therefore reverse the Board's finding that the leasing language of the successorship clause must be excised as unlawful.\n\n\n31\n* * *\n\n\n32\nThus we reject all of the employer's claims but grant the union's petition with respect to the successorship clause, and we grant the Board's application for enforcement except with regard to that clause.\n\n\n33\n\nSo ordered.\n\n\n"} -{"text": "\n235 Cal.App.2d 465 (1965)\nROBERT G. BROWNLEE, Plaintiff and Respondent,\nv.\nALFRED VANG et al., Defendants and Appellants.\nCiv. No. 519. \nCalifornia Court of Appeals. Fifth Dist. \nJune 28, 1965.\n William F. Reed and Carl Hoppe for Defendants and Appellants.\n James W. Funsten for Plaintiff and Respondent.\n BROWN (R. M.), J.\n This is an appeal by the defendant-appellant from an adverse judgment rendered by the court in an action based upon the theory of fraud. By the judgment the plaintiff was awarded $4,500 as compensatory damages, $3,000 as exemplary damages, and his costs of suit. The action was brought against Alfred Vang, Ann Vang and Magnatron Corporation of America, Inc. The court found that no liability attached to Ann Vang. It was stipulated that, for the purpose of this lawsuit, the defendant Alfred Vang and the defendant Magnatron Corporation of America, Inc. are one. For convenience, the word \"defendant\" as herein used will be a reference to Alfred Vang.\n The sole question presented by the appeal is whether the evidence supports the trial court's finding that the plaintiff relied upon the false representations made by the defendant and that such reliance was justified.\n The Facts\n [1a] The plaintiff met the defendant, Alfred Vang, and the latter's wife, Ann Vang, in the latter part of 1947 or the early part of 1948 in Carmel, California. They became friends. At that time the plaintiff was a merchant seaman. He had recently married and was desirous of obtaining a shore job. Although he had attended the Colorado Junior College for three years and Hastings College of the Law for one year, he had neither training nor experience in engineering, science, or business. He had never made investments in stocks or bonds. His savings amounted to $4,000. The defendant told the plaintiff that he was an engineer and had studied at the University of Copenhagen; that he was an associate of Neils Bohr, a famous scientist, and had worked with Bohr on the Manhattan Project; that he had worked for the Federal Defense Department over a period of years and was called to Washington for *467 consultation from time to time; that he had designed and developed numerous electronic processes and items including the first automobile valve of the type still in use today; that he was a partner in the firm of Stevenson, Jordan and Harrison, one of the biggest of the research and development companies in the United States; that he owned and operated a factory in the east which was producing welding machines; that he had invented an electronic tube which General Electric and other leading manufacturers were very much interested in; that he had invented a panel which he used with the electronic tube the use of which was practically unlimited; that he had a contract with Electrical Products Company of Los Angeles to produce the panels; that he was developing a fog dispersion machine at the Monterey airport; and that he had developed a welding machine which was in production and was being sold in the east. In October 1948, the defendant told the plaintiff that he was negotiating for a plant on the Monterey peninsula for the purpose of putting his electronic tube into production and asked to borrow $6,000. He promised the plaintiff a position with him in his project. On October 23, 1948, the plaintiff loaned the defendant his savings of $4,000 and received a promissory note executed by the defendant promising to repay the sum with interest 60 days thereafter. He relied in part upon the representations of the defendant made directly to him, and in part upon an article which appeared in the October 13, 1947, issue of the Monterey Peninsula Herald, and information therein which originated with the defendant, which spoke in glowing terms of the defendant, his reputed background as an electronic inventor, and of a revolutionary invention which would disperse fog which the defendant was reportedly building and should have ready for testing about two weeks after the article appeared. The plaintiff also testified that he had seen the electronic tube and relied upon its functioning properly before he loaned the defendant the money. Shortly after the loan was made the defendant left the community and went to Berkeley. He failed to repay the loan. When the loan became due the plaintiff telephoned the defendant; the defendant reassured the plaintiff that everything was working out; that he had started a company with one George Hart. The plaintiff testified, \"I felt he was a pretty important man and I didn't feel as though I wanted to badger him about the thing, and I felt that it was all right, that I would just--I would go along with *468 it more or less at his convenience, but I would like to have it back.\" The defendant also told the plaintiff that the panel was being used to drive a vibrator and that people from the University of California were very interested in the invention. About the middle of 1949, the plaintiff was told by George Hart that the defendant had left Berkeley and had removed to Vancouver, Canada. The plaintiff had several conversations with the defendant, who continually assured the plaintiff that his various enterprises were going well. He explained that George Hart had \"locked him out\" of the Berkeley plant and he had moved to Canada. He invited the plaintiff to come up to Canada and he would show the plaintiff what he was doing. On October 13, 1949, the plaintiff filed an action in the Superior Court of Monterey County in an attempt to collect on the note. Vang was never served. Subsequently the plaintiff asked Dun & Bradstreet to investigate what the defendant was doing in Canada. Dun & Bradstreet collected $500 on the note. The defendant asked the plaintiff to call off Dun & Bradstreet. In June of 1950 the plaintiff went to Canada and spent a \"couple\" of days with the defendant. The defendant showed him what they were doing, showed him drawings and parts of an electronic hammer, told him that he had a number of contracts for the equipment, told him that the defendant and one Eggleton had formed one company and were forming a second, gave a demonstration with the panel device, and suggested that he take stock in the companies in lieu of the amount of the debt. The plaintiff testified: \"I went up there pretty mad at Fred and I went away pretty happy with him. This appeared to me, from what he told me--the thing looked practical and looked as though his panels were a complete success.\" On some unspecified date between July 28, 1950, and March 5, 1951, the plaintiff cancelled the note in exchange for shares of stock in Magnatron Hammer Company, Ltd. and Magnatron Panel Company, Ltd., the two Canadian companies. The plaintiff returned for trips to Canada in 1951 and again in 1953, and attended shareholders' meetings. Although no dividends were paid on the stock, he received corporate financial statements showing that the companies were solvent. On some date between April 28, 1953, and January 13, 1954, the plaintiff purchased from one Joe Jordan further shares of stock in the two companies for $400. During the period from 1950 to 1955, the plaintiff also expended time and moneys in attending meetings in *469 Canada and preparing himself for the purpose of participating in projects of the defendant. At intervals during this period of time the defendant gave glowing progress accounts to the plaintiff and assured him that he would have a good position with the projects as soon as they got into production. The plaintiff testified: \"Well, we were friendly, and then I felt unfriendly toward Fred; then we would get together, and it would be friendly again, and then it would continue to be that way.\" As late as 1960, just before this suit was filed, the defendant continued to reassure the plaintiff. In 1955 the plaintiff engaged the law firm of Lawrence, Shaw, McFarlane and Stewart to attend a shareholder's annual meeting and send him a report. The attorneys' report was unfavorable and suggested that stock in the defendant's companies was watered. The trial court found:\n \"I. Commencing in the year 1947 and continuing through the year 1955 defendant Alfred Vang represented to plaintiff that said defendant was a university educated electronics scientist with experience in electronics research and development and with professional associations with leading scientists. Continuously during said period, Alfred Vang represented to plaintiff that he, Alfred Vang, had perfected several different devices employing a unique electronics tube and circuit system developed by said Alfred Vang which devices were of great commercial value for immediate use in electroplating hard rock drill bits, aluminum smelting, industrial hammers, welding and other uses. Continuously during said period said Alfred Vang represented that he was able to, and intended to, make immediate commercial application of said devices and provide plaintiff employment in connection with said project.\"\n \"II. Continuously during said period of time there was a relation of personal trust and confidence between the plaintiff and the defendant Alfred Vang.\"\n \"III. Said representations were false. Said Alfred Vang did not have any university or college education. Said Alfred Vang did not have certain electronics research and development experience that he claimed to have. Said Alfred Vang did not have professional associations with leading scientists. Said Alfred Vang knew he was unable to, or had intention [sic] to, make commercial application of his devices and he never had any intention to provide employment for plaintiff. Said Alfred Vang made said representations *470 regarding said projects for the purpose of raising money for his use and to promote his own interests and without any intention to carry out the projects.\"\n \"IV. Said representations were made by said Alfred Vang with the intent to deceive plaintiff Robert G. Brownlee. Said plaintiff reasonably relied upon the said representations above set forth, and each of them, and in reliance thereon, gave Alfred Vang $4,000 of which $3,500 remains unreimbursed, and thereafter purchased worthless stock in reliance thereon at a cost of $400, and expended additional time and money for attendance at the corporation meetings of the projects of Alfred Vang and for preparation of himself to participate in the projects of said Alfred Vang, all to the damage of Robert G. Brownlee in the total sum of $4,500.\"\n \"V. Before June 27, 1955, said Robert G. Brownlee had neither discovered the fraud nor failed to exercise due diligence to discover the fraud. Before June 27, 1955, Robert G. Brownlee did not have the means of discovering the fraud and could not have discovered it in the exercise of due diligence. On said June 27, 1955, said Robert G. Brownlee must be deemed to have notice of said fraud on account of the continued failure of Alfred Vang to do what he said he intended to do and also on account of the letter received said day from Canadian attorneys stating suspicions of watered stock.\"\n \"VI. * * *\"\n \"VII. The representations of said Alfred Vang were made as part of a continuous fraudulent and malicious course of conduct whereby he obtained money from numerous people as investments in projects which he never had any intention of carrying out.\"\n Argument and the Law\n The defendant does not challenge the trial court's findings relating to the misrepresentations or damages. The only charge of error is that the trial court erred in finding that the plaintiff reasonably relied upon the representations of the defendant. It is claimed that the evidence is to the contrary. The plaintiff testified at length; the defendant did not testify and apparently was not present at the trial, but portions of a prior deposition which he had given were read into the record. That record is voluminous. The reporter's transcript embraces 813 pages; the clerk's, 254 *471 pages; there are 179 interrogatories with answers; and more than 150 exhibits were received in evidence. From this vast record, the defendant has selected isolated items of evidence with which to persuade this court that the plaintiff, rather than relying upon representations of the defendant, took a calculated risk in the projects of the defendant in the hope of ultimate financial gain.\n The defendant argues that, at the outset, the defendant promised to repay to the plaintiff the sum of $4,000 within 60 days; that he defaulted and left the community. The plaintiff testified that the first statement made by the defendant that he thought was false was the promise to pay the money, which promise was not kept; that the next statement was when the defendant told the plaintiff that the defendant was going to remain in the Monterey area, but did not do so and left the community; that he discovered the falsity of that statement in the fall of 1949. The plaintiff also testified that the defendant represented he was going to build a fog dispersal machine in Monterey, which he did not do. This the plaintiff learned in 1949. The plaintiff testified that he relied in part on the newspaper article that the fog dispersing machine would be ready for testing in late October 1949; but made no investigation to determine whether or not the machine had been completed. The plaintiff further testified that prior to the exchange of the note for the stock, he had a conversation with George Hart in San Francisco and Hart told the plaintiff that the defendant never finished any of his work. On July 4, 1949, the plaintiff wrote to the defendant and stated, in part, \"... On October 23 of this year your 60 day note for the $4,000 loan I made you will be 10 months overdue.\" The defendant also points to the lawsuit which the plaintiff filed in Monterey County in an attempt to collect on the note, and the fact that he had Dun & Bradstreet investigate the defendant's activities in Canada and attempt collection. On March 31, 1950, the plaintiff wrote to the defendant stating in part: \"Got your latest promise the other day through Dun and Bradstreet. If you have plans for skipping out of Canada without notice with the idea of raising a little money and losing me at the same time--don't do it.\"\n When questioned concerning this letter, the plaintiff testified: \"As far as keeping his promise to pay the money to me my confidence had dropped to a rather low ebb ...\" The defendant contends that the plaintiff's testimony summarized *472 above shows that he did not rely upon representations made by the defendant. Nevertheless, with knowledge of the many promises which had been unfulfilled, the plaintiff negotiated his first five shares of stock in Magnatron Hammer, Ltd. on July 25, 1950. About six months later, on January 5, 1951, the plaintiff complained by letter to the defendant, \"... as you will recall, in 1948 when I made you the loan it was made with the understanding that I was to be given a chance to work for you.\" In a subsequent letter of February 8, 1951, the plaintiff admitted: \"... When I suggested in my last letter that I was willing to take a final chance by accepting a transfer of stock I meant just that. I had no idea at that time, nor do I have any idea now, when you will get into production, or if you ever will.\"\n Shortly after writing that letter and on March 5, 1951, the plaintiff obtained 15 shares in Magnatron Panel Company, Ltd., and 24 shares in Magnatron Hammer Company, Ltd., and cancelled the note.\n In April 1953, the plaintiff purchased stock from Joe Jordan; at that time he knew that he had not received any dividends on the stock which he had acquired in 1950 and 1951. Also at this time he knew that there had been no commercial production in any of the defendant's ventures up to that date.\n If the testimony on which the defendant relies was the sole evidence on the subject, it would be difficult to say that the plaintiff placed any reliance on the representations made by the defendant after the note was in default and the defendant had moved from the Monterey area. But it is not. The record is replete with testimony concerning telephone calls over the interval from 1949 through 1954 in which the defendant constantly explained difficulties he was encountering, soothed away the plaintiff's fears, gave glowing accounts of his various inventions, their marketability, desirability to manufacturers, and their potential worth. The defendant's wife, Ann Vang, wrote several letters to the plaintiff. One such letter, written on December 2, 1949, and authorized by the defendant, thanks the plaintiff for his patience; states that certain panels and electric hammers were being built to be shipped to California and would be in San Francisco no later than January 15th; that an attorney had been appointed to form a company for the immediate production of hammers; and that as soon as the hammers arrived in San Francisco the plaintiff could be paid in money or stock. The letter extolled the efficiency and low cost of *473 the hammers and their usefulness and salability. Mr. George Hart, who had been associated with the defendant in Berkeley, told the plaintiff that the equipment was good and that it would do the things the defendant claimed it would do. It was not until August 24, 1957, that the plaintiff learned for the first time that the electronic tube, which was claimed by the defendant to be a basis of his various inventions, did not work. It was not until after this suit was filed that plaintiff learned the hammer and panel were not inventions of the defendant. After 1957, plaintiff reached the conclusion that Vang's promises were made without the intention to perform, and this was after he had the opportunity of discovering that the defendant had a long history of promotional companies. Even as late as 1960, about a month before this suit was filed, the defendant again stated to the plaintiff that the projects in Canada were being successfully completed, and he furnished the plaintiff with what purported to be a financial statement and again attempted to allay the plaintiff's suspicions of fraud and assure him that defendant would protect his interests.\n [2] It is elementary that to make out a case of misrepresentation, the plaintiff must show not only a representation of a material fact upon which he was entitled to rely, but that he did in fact rely to his damage. (Edwards v. Lang, 198 Cal.App.2d 5 [18 Cal.Rptr. 60]; Eck v. McMichael, 176 Cal.App.2d 368 [1 Cal.Rptr. 369].) [3] Whether or not fraud exists, including the element of reliance, is ordinarily a question of fact for the fact-finding entity. [4] As this court said in Vogelsang v. Wolpert, 227 Cal.App.2d 102, 110-111 [38 Cal.Rptr. 440]:\n \"Because of the diversity of factors and the differing intelligence of those guilty of fraud and their victims, the function of the trial judge in fraud cases is particularly significant. It is the duty of the judicial officer who sees and hears the witnesses to determine the weight and effect of their evidence; if there is any substantial showing of fraud the trial court must determine whether it outweighs the testimony presented by the opposing side; and his decision is ordinarily final in matters of this kind; appellate courts will not disturb a finding of fraud if there is any substantial evidence to support the lower court's decision. [Citations.]\"\n \"As a determination of the existence of fraud is particularly within the decisional field of the trial judge, the *474 appellants are attempting to swim upstream against a strong current of authority when they maintain that there was no such showing in the long record, and in effect that this court should pass again upon the factors which the trial court found to be indicative of fraud.\"\n [5] And at pages 111-112: \"As is observed in Feckenscher v. Gamble, supra, 12 Cal.2d 482, 496-497 [85 P.2d 885]: ' \"That plaintiff is too credulous is not generally a defense. 'The test of the representation is its actual effect on the particular mind, whether it is a strong and circumspect mind, or one weak and too relying.' \" (Neff v. Engler, 205 Cal. 484, 489 [271 P. 744].)' \"\n Plaintiff points to the case of Blackman v. Howes, 82 Cal.App.2d 275, where the court, in considering the issue of justifiable reliance, said at pages 278-279 [185 P.2d 1019, 174 A.L.R. 1004]: \"When the facts are susceptible to opposing inferences, whether a party relied upon a false representation, notwithstanding prior information which, if investigated, might have led to discovery of the falsity of the representation, is itself a question of fact to be determined by the trier of fact. [Citation.] Where one is justified in relying, and in fact does rely, upon false representations, his right of action is not destroyed because means of knowledge were open to him. In such a case, no duty in law is devolved upon him to employ such means of knowledge. [Citation.]\"\n \" 'The mere circumstance that one makes an independent investigation or consults with others does not necessarily show that he relied upon his own judgment rather than upon the representations of the other party, nor does it give rise to a presumption of law to that effect.' [Citation.] A buyer is not chargeable with knowledge of conditions which he fails to discover because of some deception of the seller. [Citations.] When, as here, the buyer has only a suspicion of fraud and the seller lulls the buyer into inaction by a false representation, the seller will not be permitted to assert that the buyer lost his rights by accepting the assurance of the seller that there was no fraud. [Citation.]\"\n In Bank of America v. Greenbach, 98 Cal.App.2d 220, at page 233 [219 P.2d 814], the court said: \"It is, of course, the law that a party has a duty to investigate where he has notice of facts which indicate fraud. [Citations.] But this duty to investigate is a relative matter. The creditor has a legal right to rely upon the statements made by the debtor. If the debtor is guilty of deliberate fraud, it is not *475 good morals, nor does it make good sense or good law, to say that the creditor was too credulous because he placed too much reliance on the statements made by the fraudulent debtor, and is therefore barred.\"\n At page 234, the court said: \"It is also well settled that when a fact is peculiarly within the knowledge of the person making the representation and not within the knowledge of the person to whom it is made, the latter has the right to rely upon the representations of the former respecting such fact.\"\n The trial court found that during the period here involved there was a relation of personal trust and confidence between the plaintiff and the defendant, and that finding stands unquestioned.\n In volume 23, California Jurisprudence, Second Edition, Fraud and Deceit, section 31, pages 75-76, it is said: \"A person has a right to rely on statements of material facts essentially connected with the substance of the transaction where there is a confidential relation existing between the parties, and such reliance cannot be charged as negligence. ... A similar situation exists where one of the parties is ignorant and inexperienced in regard to the matters concerning which the material representations are made, and such ignorance is known to the other party, who is also aware that reliance is being placed on his representations and that the facts are not, and cannot be expected to be, within the first party's knowledge.\"\n The court, in Bank of America v. Greenbach, supra, 98 Cal.App.2d 220, said at page 235: \"[T]he question as to whether the known facts were sufficient to put the defrauded person on inquiry is one of fact for the trial court. ... '... Whether or not the plaintiff was negligent in relying upon the truth of the defendant's representations seems to be immaterial. If under the facts, because of the relation of the parties, involving trust and confidence, or because the representor was in a position to know the facts which was definitely superior to that of the representee, or where an investigation by the representee could not be easily made, the courts hold that he was justified in relying on the truth of the false statements.' \"\n In Garrett v. Perry, 53 Cal.2d 178 [346 P.2d 758], the issue of justifiable reliance on the part of the person defrauded was raised. Mr. Chief Justice Gibson, speaking for the Supreme Court, made brief disposition of the contention. *476 At pages 181-182, he stated: \"The fact that a buyer makes an independent investigation does not preclude him from relying on representations made by the seller where, as here, the seller has a superior knowledge. [Citation.] Nor did the receipt of some unfavorable information preclude plaintiff from such reliance as a matter of law. [Citation.] The trial court could properly conclude that any suspicions of plaintiff arising from the information he had obtained upon his investigations were allayed by defendant's subsequent reassurances and that under the circumstances of this case plaintiff was not precluded from relying upon what defendant told him.\"\n In volume 23 of California Jurisprudence, Second Edition, Fraud and Deceit, section 39, at page 97, it is said: \"..., a party's suspicions may have been reasonably allayed by the other party's positive reassurances or representations.\"\n In Kalkruth v. Resort Properties, Ltd., 57 Cal.App.2d 146, at page 150 [134 P.2d 513], the court said: \"We believe that when, as here, the buyer has only a suspicion of the fraud, and the seller who has defrauded the buyer, lulls the buyer into a sense of security by both words and conduct, the seller should not be permitted to assert that the buyer had lost his rights by waiving the suspicion and accepting the reassurance of the seller that no fraud had been perpetrated.\"\n [1b] In this case the defendant purported to be an expert in the field of electronics; the plaintiff was ignorant concerning such matters. Through friendship a relation of trust and confidence existed between them. The misrepresentations made relative to a subject matter of which the plaintiff had no knowledge were not such that their falsity must have been so obvious to the plaintiff as to preclude any justifiable reliance thereon by him. Further representations, made as statements of fact and not of opinion, dealing with contracts which the defendant had entered into with other firms, the potential production of and income from his claimed inventions, designed to allay the suspicions of the plaintiff, were themselves misrepresentations calculated to deceive. That they accomplished their purpose should not now redound to the benefit of the defendant. [6] It cannot be said that the plaintiff was more credulous than the average person would have been. The record shows that others invested in the projects and various corporations formed by the defendant and lost. It was said in the case of Sanfran Co. v. Rees Blow Pipe Mfg. Co., 168 Cal.App.2d 191, at pages 202-203 [335 P.2d 995]: *477\n \"In De Spirito v. Andrews, 151 Cal.App.2d 126, the court said at page 130 [311 P.2d 173]:\"\n \" 'It is a general rule that a vendor not in a confidential relation to the buyer is not under a duty to make full disclosure concerning the object which he would sell. However, it is a universally recognized exception that if he undertakes to do so he is bound not only to tell the truth but he is equally obligated not to suppress or conceal facts within his knowledge which materially qualify those stated. If he speaks at all, he must make a complete and fair disclosure. [Citations.]'\"\n \"As pointed out in Kuhn v. Gottfried, 103 Cal.App.2d 80, 81 [229 P.2d 137], any facts which affect the desirability of the property to be sold, are facts 'which materially qualify these stated.' Defendant admitted that the double lines on the plot plan could be interpreted to mean walls.\"\n \"... 'Where material facts are accessible to the vendor only and he knows them not to be within the reach of the diligent attention and observation of the vendee, the vendor is bound to disclose such facts to the vendee.' (Rothstein v. Janss Investment Corp., 45 Cal.App.2d 64 [113 P.2d 465]; Dyke v. Zaiser, 80 Cal.App.2d 639 [182 P.2d 344].) ...\"\n \"... Whether the investigation made by the plaintiff was a properly full one after his discovery that the building was not Class 'C,' was an issue of fact for the trial court.\"\n The cases upon which the defendant relies are not in point. In the case of Ruhl v. Mott, 120 Cal. 668 [53 P. 304], the plaintiff entered upon the land, discovered the fraud, expressed dissatisfaction, and notwithstanding this knowledge, thereafter affirmed the contract by including the unpaid interest in a new note and giving the defendant a new mortgage upon the land. It was held that the second transaction was free from fraud and the plaintiff's conduct constituted a waiver of all rights of rescission. In Gratz v. Schuler, 25 Cal.App. 117 [142 P. 899], the plaintiff purchased a panorama on defendant's representations that he could earn so much a day, and notwithstanding that after the plaintiff had operated the panorama for a few days to see what it was earning and thus knew the real earning capacity of the panorama, he completed the payment of the balance of the purchase price, and he could not be heard to say that he was deceived by the representations. In Carpenter v. Hamilton, 18 Cal.App.2d 69 [62 P.2d 1397], the plaintiffs, before parting with value, inspected a portion of the premises where there were patent defects contrary to representations which had been made by the *478 defendant. The reviewing court held that knowledge of the plaintiffs of the defendant's misrepresentations relating to the portion inspected, precluded reliance by them upon misrepresentations as to the condition of the premises which they did not visit. This case has never been overruled, but its broad language has been undercut by subsequent cases, such as Sanfran Co. v. Rees Blow Pipe Mfg. Co., supra, 168 Cal.App.2d 191, 203, and Hefferan v. Freebairn, 34 Cal.2d 715, 720 [214 P.2d 386], where its holding has been held applicable only to visible defects.\n [1c] In the case before us the plaintiff was constantly reassured by the defendant, and under the circumstances he was not precluded from relying on what the defendant told him or showed him.\n The defendant questions the sufficiency of the evidence to support the finding, but we think that the evidence is ample to support such, and will not belabor the well-settled law that this court is bound thereby. (Overton v. Vita-Food Corp., 94 Cal.App.2d 367 [210 P.2d 757]; Berniker v. Berniker, 30 Cal.2d 439 [182 P.2d 557].)\n The judgment is affirmed.\n Conley, P. J., and Stone, J., concurred.\n"} -{"text": "Nebraska Supreme Court Online Library\nwww.nebraska.gov/apps-courts-epub/\n07/21/2017 12:10 AM CDT\n\n\n\n\n - 165 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n\n\n\n M atthew Landrum et al., appellants and cross-appellees,\n v. City of Omaha Planning Board et al.,\n appellees and cross-appellants, and\n Daryl Leise et al., appellees.\n ___ N.W.2d ___\n\n Filed July 14, 2017. No. S-16-383.\n\n \u20021.\t Ordinances: Appeal and Error. Interpretation of a municipal ordi-\n nance is a question of law on which an appellate court reaches an\n independent conclusion irrespective of the determination made by the\n court below.\n \u20022.\t Administrative Law: Appeal and Error. In reviewing a decision based\n on a petition in error, an appellate court determines whether the inferior\n tribunal acted within its jurisdiction and whether the inferior tribunal\u2019s\n decision is supported by sufficient relevant evidence.\n \u20023.\t Standing: Words and Phrases. Standing is the legal or equitable right,\n title, or interest in the subject matter of the controversy.\n \u20024.\t Jurisdiction: Standing. The requirement of standing is fundamental to\n a court\u2019s exercise of jurisdiction, and either a litigant or a court before\n which a case is pending can raise the question of standing at any time\n during the proceeding.\n \u20025.\t Standing: Zoning. It is generally held that an adjacent landowner has\n standing to object to the rezoning of property if such landowner shows\n some special injury separate from a general injury to the public.\n \u20026.\t Municipal Corporations: Actions: Appeal and Error. An appeal or\n error proceeding does not lie from a purely legislative act by a public\n body to which legislative power has been delegated, and the only rem-\n edy in such cases is by collateral attack, that is, by injunction or other\n suitable action.\n \u20027.\t Municipal Corporations: Ordinances: Zoning. A zoning ordinance\n constitutes the exercise of a governmental and legislative function, and\n a city council adopting a rezoning ordinance which amends a general\n zoning ordinance acts in a legislative capacity.\n\f - 166 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n\u20028.\t Jurisdiction: Appeal and Error. When a trial court lacks the power,\n that is, jurisdiction, to adjudicate the merits of a claim, the Supreme\n Court also lacks power to adjudicate the merits of the claim.\n\u20029.\t Standing: Jurisdiction: Proof. A party invoking a tribunal\u2019s jurisdic-\n tion has the burden to establish the elements of standing.\n10.\t Appeal and Error. An issue not presented to the trial court may not be\n raised on appeal.\n11.\t Administrative Law: Evidence: Appeal and Error. The reviewing\n court is restricted to the record before the administrative agency and\n does not reweigh evidence or make independent findings of fact, and\n the evidence is sufficient to support an administrative agency\u2019s decision\n if the agency could reasonably find the facts as it did based on the testi-\n mony and exhibits contained in the record.\n12.\t Administrative Law: Due Process: Jurisdiction: Notice: Evidence:\n Appeal and Error. A court reviewing an order of an administrative\n agency must determine whether there has been due process of law; and\n this includes an inquiry into the jurisdiction of the agency, whether there\n was reasonable notice and an opportunity for fair hearing, and whether\n the finding was supported by evidence.\n\n Appeal from the District Court for Douglas County: J.\nMichael Coffey, Judge. Affirmed in part, and in part vacated\nand dismissed.\n Rex J. Moats and Margaret A. McDevitt, of Moats Law\nFirm, P.C., L.L.O., for appellants.\n Russell S. Daub for appellees Daryl Leise et al.\n Alan M. Thelen, Deputy Omaha City Attorney, for appellees\nCity of Omaha Planning Board et al.\n Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy,\nK elch, and Funke, JJ.\n K elch, J.\n I. INTRODUCTION\n Matthew Landrum, Shandra Landrum, Rex Moats, Diane\nMoats, Edward Malesa, and Valerie Malesa (Homeowners)\nappeal the order of the district court for Douglas County that\ndismissed their amended petition in error. The Homeowners\n\f - 167 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\nsought to challenge a conditional use permit issued by the\nOmaha Planning Board (Planning Board) and a special use\npermit and rezoning granted by the Omaha City Council (City\nCouncil). The City of Omaha (City), the Planning Board, and\nthe City Council cross-appeal, arguing that the Homeowners\u2019\npetition in error was untimely and that the district court lacked\nsubject matter jurisdiction. We dismiss for lack of jurisdiction\nthat portion of the Homeowners\u2019 appeal concerning rezoning\nand a special use permit, and we vacate the corresponding\nportion of the district court\u2019s order. However, because the\nPlanning Board acted within its jurisdiction, based its find-\nings on sufficient evidence, and afforded the Homeowners due\nprocess, we affirm the district court\u2019s order in regard to the\nconditional use permit.\n II. BACKGROUND\n 1. Procedural Background\n This appeal arises from permits and rezoning granted to\nDaryl Leise; Redbird Group, LLC; and Ray Anderson, Inc.\n(collectively the Developers), for a proposed convenience stor-\nage and warehouse facility to be constructed on real estate in\nthe Omaha area (subject property). Ray Anderson, Inc., is the\ncurrent owner of the subject property.\n The City carries out its zoning powers through the enact-\nment and enforcement of its zoning code, Omaha Municipal\nCode, chapter 55.\n The Omaha Municipal Code designates various base zoning\ndistricts, including a \u201ccommunity commercial\u201d (CC) district,\nwhich is the designation of the subject property. Omaha Mun.\nCode, ch. 55, art. VIII, \u00a7 55-362 (1980). Further, the code\nprovides for a special \u201coverlay district\u201d that can be \u201cover-\nlaid\u201d upon a property in addition to its base zoning district.\nOmaha Mun. Code, ch. 55, art. XI, \u00a7 55-682 (2007). One\ntype of overlay district is the \u201cmajor commercial corridor\u201d\n(MCC) district, for which Leise applied in this case. See id.\nThe zoning regulations enumerate various use types. For the\n\f - 168 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\nsubject property, Leise sought the use types \u201c[w]arehousing\nand distribution (limited),\u201d see Omaha Mun. Code, ch. 55, art.\nIII, \u00a7 55-49(h) (1980) (emphasis omitted), and \u201c[c]onvenience\nstorage,\u201d see Omaha Mun. Code, ch. 55, art. III, \u00a7 55-45(m)\n(2007) (emphasis omitted). The \u201c[w]arehousing and distribu-\ntion (limited)\u201d use type is allowed subject to approval of a\nconditional use permit. Omaha Mun. Code, ch. 55, art. VIII,\n\u00a7 55-364(e) (2008). Similarly, a special use permit is required\nfor convenience storage in the CC district. Omaha Mun. Code,\nch. 55, art. VIII, \u00a7 55-365(c) (2008).\n As noted above, Leise sought to place the subject property\ninto the MCC overlay district while maintaining the base\nCC zoning district. Buildings built within the MCC overlay\ndistrict are subject to certain urban design rules. See Omaha\nMun. Code, ch. 55, art. XI, \u00a7\u00a7 55-682 through 55-687 (2007),\nand Omaha Mun. Code, ch. 55, art. XXII, \u00a7\u00a7 55-927 through\n55-936 (2007). These urban design rules provide for enhanced\nregulation of screening, parking, site and building access, land-\nscaping, and general building design guidelines. Id.\n In sum, to proceed with the proposed project, the Omaha\nMunicipal Code required three zoning approvals from the\nCity: a conditional use permit, which could be issued by\nthe Planning Board; a special use permit, which could be\ngranted by the City Council after a recommendation by the\nPlanning Board; and a rezoning, which could be granted by\nthe City Council after a recommendation by the Planning\nBoard, to place the subject property within the MCC overlay\ndistrict. See Omaha Mun. Code, ch. 55, art. XX, \u00a7 55-883(h)\nand (k) (2008), \u00a7 55-884(g)(3) (2008), and \u00a7 55-886(f) and\n(g) (1980).\n\n 2. Municipal Proceedings\n The subject property is a 4.75-acre vacant lot at the north-\neast corner of 204th Street (Highway 31) and Farnam Street,\nlocated near a residential area. Leise\u2019s statement of proposed\nuse and plans for the subject property anticipated constructing\n\f - 169 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\na three-story storage building, resembling an office building,\nwith internal storage spaces. Leise also proposed construct-\ning five single-story storage buildings with garage-type stalls.\nThe storage facilities would contain 700 storage spaces for\nrental to customers, with estimated visits of two or three cars\nper hour.\n Leise submitted a proposed concept design to the City\u2019s\nplanning department. The concept design, dated February 17,\n2015, provided preliminary specifications to demonstrate com-\npliance with site development, landscaping, and buffer require-\nments for a CC property.\n After reviewing the proposed concept design, the plan-\nning department issued a responsive letter, dated February 27,\n2015. The planning department summarized the proposed proj-\nect\u2019s classification and permit requirements under the Omaha\nMunicipal Code.\n The planning department scheduled the matter for a May\n6, 2015, hearing before the Planning Board. On March 20,\nthe planning department issued the following notice via a\nletter to residents near the proposed project site: \u201cNOTICE\nOF REQUEST FOR: Approval of a Special Use Permit to\nallow Convenience storage and a Conditional Use Permit\nto allow Warehousing and distribution (limited) in a\nCC-Community Commercial District, with approval of an\nMCC-Major Commercial Corridor Overlay District.\u201d The\nnotice further invited any interested persons to hear and\ncomment on the proposal, which was on file at the planning\ndepartment, and provided details about the approval proce-\ndure and hearing.\n On April 6, 2015, Leise submitted a planning department\nzoning application form. The application form allowed the\napplicant to check boxes to select a special use permit, a con-\nditional use permit, and \u201cOther.\u201d Leise\u2019s application selected\na special use permit and \u201cOther,\u201d specifying \u201cAdopt MCC\nOverlay District,\u201d but a conditional use permit was not selected.\nThe application form provided basic factual information,\n\f - 170 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\nincluding the address and legal description of the subject\nproperty, its owner, the applicant, a contact person, and infor-\nmation on proposed building, parking, and landscaping. Leise\nincorrectly identified the property owner as \u201cRay Anderson\nc/o Anderson Food Shops,\u201d rather than \u201cRay Anderson, Inc.\u201d\nLeise listed himself as the applicant and contact person. There\nwere illegible signatures on the lines designated for \u201cOwner\u2019s\nSignature\u201d and \u201cApplicant Signature.\u201d Under the applicant\u2019s\nsignature, the form states, \u201c(If not the property owner, the\napplicant certificates [sic] with this signature to be the autho-\nrized agent of the property owner.)\u201d\n On April 29, 2015, the planning department issued a rec-\nommendation report that analyzed the proposed project in\nlight of applicable portions of the Omaha Municipal Code.\nThe report noted that the adjacent land use was primarily\nresidential. It stated that before the City annexed the subject\nproperty and converted it to a CC district, it was originally\nzoned \u201cC-3 Highway Commercial\u201d by the City of Elkhorn,\na designation which allowed warehousing and distribution as\na permitted use. The report noted that conditionally, Leise\u2019s\npermit request was in substantial conformance with \u201cthe zon-\ning ordinance\u201d and the City\u2019s master plan. The report further\nevaluated the proposed uses pursuant to specific portions of\nOmaha Mun. Code, ch. 55, art. XX, \u00a7 55-885 (2008), which\nsets forth criteria for the review and evaluation of applications\nfor conditional use permits and special use permits. It deduced\nthat the proposed uses would comply with those criteria and\nthat the economic impact on surrounding properties would\nbe acceptable. The report recommended (1) approval of \u201cthe\nMCC-Major Commercial Overlay District,\u201d (2) approval of the\nspecial use permit to allow convenience storage in \u201ca CC-MCC\nDistrict\u201d subject to plan revisions for compliance with zoning\nregulations, and (3) approval of the conditional use permit to\nallow \u201cWarehousing and distribution (limited) in a CC-MCC\nDistrict,\u201d subject to plan revisions for compliance with zon-\ning regulations.\n\f - 171 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n On May 5, 2015, residents near the subject property sub-\nmitted to the Planning Board a \u201cPetition\u201d with 52 signatures,\nexpressing opposition to the proposed project. Residents also\nsubmitted letters and email messages detailing the reasons\nfor their opposition, which included safety risks, lack of suf-\nficient buffer space from adjacent homes, increased risk of\ncrime, excessive light from the development, lack of conti-\nnuity with the adjacent homes, and adverse effects on prop-\nerty values.\n The Planning Board held a public hearing on Leise\u2019s\nrequests on May 6, 2015. Leise appeared and described the\nproposal. Several neighborhood opponents also spoke, includ-\ning one of the Homeowners. Opponents generally expressed\nthat they were not yet familiar with the plan. They opined that\nthe structure would not \u201cfit\u201d with the nearby residential neigh-\nborhoods and may contribute to crime and obstruct views. A\nreal estate broker with 14 years\u2019 experience and others stated\nthat the structure would be detrimental to the neighboring\nresidents\u2019 property values. Other concerns included lighting,\nsafety, and compliance with the City\u2019s master plan. Some\nopponents stated that they had not been personally informed\nabout the project and that they felt they had been \u201cambushed.\u201d\nAnother complained that some residents near the proposed\nproject site did not receive the notice of hearing from the\nPlanning Board. The Planning Board laid over the case to\nallow Leise and the neighboring residents to meet and discuss\nthe issues.\n Leise submitted revised plans, and the City\u2019s planning\ndepartment issued a revised recommendation report on July\n29, 2015. The revised recommendation report found that the\nrevised plans \u201caddressed most of the conditions listed in the\nprevious recommendation report.\u201d The report noted that the\nDevelopers needed to provide a floor plan for the indoor stor-\nage facility. Like the previous report, it provided a written\nanalysis of the project in light of \u00a7 55-885 and concluded that\nother than a few conditions to address, \u201cthe proposed uses\n\f - 172 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\nwill comply with all the applicable base district development\nstandards and [are] consistent with the criteria in Section\n55-885.\u201d The planning department added that \u201c[t]he proposed\nuses are consistent with and carry out the goals and objectives\nof the City[\u2019s] Master Plan.\u201d\n On August 5, 2015, the Planning Board conducted another\nhearing. The planning department again issued a notice let-\nter regarding the proposed conditional use permit, special use\npermit, and rezoning. At the hearing, the Developers\u2019 attorney\naddressed issues including tree buffers, the \u201cupgraded design,\u201d\ntopography, compliance with size regulations, views from the\nexterior, security issues, and fencing and buffering. He also\nnoted the meetings and contacts between Leise and the resi-\ndential neighbors.\n At the August 5, 2015, hearing, neighbors again expressed\nconcerns about views from the exterior, lighting, the City\u2019s\nmaster plan, compatibility with the neighborhood, and safety.\nOne of the Homeowners implied that demographically, owners\nof nearby starter homes valued at about $125,000 would be\nmore likely to use the storage facility than homeowners like\nhim with large homes valued at $400,000. Following these\nremarks, a board member advised the Homeowner and others\npresent to be \u201cvery careful about generalizing about people.\u201d\nThe Homeowner reiterated:\n The point I\u2019m trying to make here is that it is a dif-\n ferent type of housing in this neighborhood that would\n be next to that type of facility. It is not $125,000 homes,\n it is not whatever they are for trailer homes. These are\n houses that are valued between 300,000 and $400,000.\n Later in the hearing, another board member referred to pre-\nmeeting discussions, stating, \u201c[I]t was socioeconomic impact\ndiscussion that really sort of floored me because it dealt with\nthe income levels of people who will be using this type of\nstorage facility.\u201d He also alluded to the Homeowner\u2019s com-\nments and said:\n\f - 173 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n [T]hat\u2019s offensive to me, okay? It\u2019s offenses [sic] to have\n that type of discussion about the construction of a stor-\n age facility.\n I\u2019m convinced that if we took the same structure that\n [Leise] wants to build and put something else on the\n inside of it, we wouldn\u2019t get this argument because it\n wouldn\u2019t be a storage facility . . . .\n Immediately following the hearing, the Planning Board\nvoted in favor of the conditional use permit, special use per-\nmit, and MCC overlay rezoning. Thus, the conditional use\npermit was approved, subject to conditions, and the special use\npermit and rezoning were forwarded to the City Council for\nfinal action.\n On September 29, 2015, the City Council held a public\nhearing on the special use permit and rezoning, designated\nas separate agenda items. Prior to the hearing before the City\nCouncil, nearby residents submitted to the City Council an\n\u201cOpposition Document\u201d detailing their concerns about the pro-\nposed project. Two hundred ninety-two neighboring residents,\nincluding at least three of the Homeowners, signed \u201cpetitions\u201d\nthat accompanied the opposition document. The opposition\ndocument was later filed in the City clerk\u2019s office. At the hear-\ning, the Developers\u2019 attorney again spoke. In addition, some\nneighbors voiced concerns similar to those discussed at previ-\nous hearings. The City Council voted to lay over the case for\n3 weeks.\n On October 20, 2015, the City Council held another hear-\ning. The Developers\u2019 attorney stated that in response to the\nneighbors\u2019 concerns, the Developers had further revised the\nplan, adding seven features which the Developers listed in\na letter to the City Council. The seven features pertained to\nenhanced landscaping and finishes to improve the appear-\nance of the proposed development. At the hearing, the\nDevelopers\u2019 attorney reported that one of the homeowners\u2019\nassociations that had formerly objected to the project had now\napproved it.\n\f - 174 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n The Homeowners\u2019 representative stated at the hearing that\nthey had presented an \u201calternative design\u201d to the Developers.\nThe Developers\u2019 attorney responded that they had evaluated the\ncost of the alternative design relative to the potential income\nand concluded that it would be an \u201ceconomic disaster.\u201d\n The City Council voted 5 to 2 to approve the MCC rezoning\nand ultimately passed an ordinance to implement it. The City\nCouncil also approved the special use permit by a vote of 5 to\n2, subject to compliance with various regulations and condi-\ntions, including the seven features listed in the Developers\u2019\nOctober 19, 2015, letter.\n\n 3. District Court Proceedings\n On October 21, 2015, the Homeowners filed a petition\nin error with the district court, seeking to challenge the\napprovals of the conditional use permit, special use permit,\nand rezoning.\n On October 30, 2015, the Homeowners filed an application\nfor a temporary restraining order and temporary injunction in\ndistrict court. They sought to prevent the issuance of any per-\nmits, the implementation of the MCC overlay district, and the\ndevelopment of the subject property.\n On November 2, 2015, the Homeowners filed an amended\npetition in error. The Homeowners requested vacation or rever-\nsal of (1) the Planning Board\u2019s approval of the conditional\nuse permit, (2) the City Council\u2019s passage of a resolution that\napproved the special use permit, and (3) the City Council\u2019s\npassage of an ordinance implementing the MCC overlay dis-\ntrict. The Homeowners claimed that the decisions of the City\nCouncil and the Planning Board were illegal, not supported by\nthe evidence, and thus arbitrary, unreasonable, clearly wrong,\nand a violation of due process. Specifically regarding the spe-\ncial use permit and the MCC overlay district, the Homeowners\nalleged, among other things, that Leise had failed to provide\naccurate information about the ownership of the subject prop-\nerty or his authority to develop it.\n\f - 175 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n On November 9, 2015, the Developers filed a motion to\ndismiss the Homeowners\u2019 amended petition in error. However,\non November 25, they withdrew the motion to dismiss and\nfiled a motion to affirm the special use permit, along with\nthe MCC overlay district. The Developers alleged that while\nthe Homeowners\u2019 amended petition in error was pending, the\nspecial use permit had been issued and the ordinance approv-\ning the MCC overlay district had been passed and signed by\nthe mayor. The Developers further averred that the City enti-\nties\u2019 actions appeared to comply with the law and that the\nHomeowners\u2019 claims were not specific enough to meet their\nburden of proving otherwise.\n On December 1, 2015, the City Council, the Planning\nBoard, and the City filed an answer essentially denying the\nallegations of the amended petition in error. They affirma-\ntively alleged that the Homeowners lacked standing, that the\ndistrict court lacked subject matter jurisdiction over some\nor all of the claims, that the Homeowners made an untimely\nchallenge of the conditional use permit, and that the City\u2019s\nrezoning of the subject property was not reviewable by an\nerror proceeding.\n On February 17, 2016, the district court held a hearing on\nthe amended petition in error and received the administrative\nrecord, including chapter 55 of the Omaha Municipal Code. On\nthat date, the district court also determined that it did not have\nsubject matter jurisdiction over the application for a temporary\nrestraining order and temporary injunction.\n In an April 11, 2016, order, the district court affirmed the\ndeterminations of the City Council and the Planning Board\nand dismissed the amended petition in error with preju-\ndice. The district court stated that after reviewing the evi-\ndence, it found that the Planning Board and the City Council\nacted within their jurisdiction and that their determinations\nwere supported by sufficient relevant evidence. This appeal\nfollowed.\n\f - 176 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n III. ASSIGNMENTS OF ERROR\n On direct appeal, the Homeowners assign that the district\ncourt erred in (l) finding that the Planning Board acted within\nits jurisdiction and had sufficient evidence to approve the\nconditional use permit, (2) finding that the City Council had\njurisdiction and sufficient evidence to approve the special\nuse permit, (3) finding that the City Council acted within its\njurisdiction and had sufficient evidence to approve the MCC\nrezoning, and (4) affirming the determinations of the Planning\nBoard and City Council, because the record showed that the\nPlanning Board and City Council did not act with due process\nof law.\n On cross-appeal, the City, the Planning Board, and the City\nCouncil assign that the district court erred in (1) failing to rule\nthat the Homeowners\u2019 petition in error was untimely as to the\nconditional use permit, (2) failing to rule that the Homeowners\nlacked standing as to the rezoning challenge and that the\ndistrict court thereby lacked subject matter jurisdiction, and\n(3) failing to rule that the petition in error was an improper\nremedy as to the rezoning, thereby precluding subject mat-\nter jurisdiction.\n\n IV. STANDARD OF REVIEW\n [1] Interpretation of a municipal ordinance is a question of\nlaw, on which we reach an independent conclusion irrespec-\ntive of the determination made by the court below. See State\nex rel. Parks v. Council of City of Omaha, 277 Neb. 919, 766\nN.W.2d 134 (2009).\n [2] In reviewing a decision based on a petition in error,\nan appellate court determines whether the inferior tribunal\nacted within its jurisdiction and whether the inferior tribunal\u2019s\ndecision is supported by sufficient relevant evidence. Crown\nProducts Co. v. City of Ralston, 253 Neb. 1, 567 N.W.2d\n294 (1997).\n\f - 177 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n V. ANALYSIS\n 1. Cross-A ppeal\n We begin by addressing the cross-appeal of the City, the\nPlanning Board, and the City Council, because its resolution is\npartially dipositive of the Homeowners\u2019 direct appeal.\n (a) Timeliness of Petition in Error\n On cross-appeal, the City, the Planning Board, and the City\nCouncil contend that the district court lacked subject mat-\nter jurisdiction because the Homeowners untimely filed their\npetition in error more than 30 days after the Planning Board\u2019s\ndecision to approve the conditional use permit.\n Neb. Rev. Stat. \u00a7\u00a7 25-1905 and 25-1931 (Reissue 2016)\ngovern proceedings in error and require that within 30 days\nafter the rendition of the final judgment or order sought to\nbe reversed, vacated, or modified, a petitioner in error must\nfile a petition and an appropriate transcript containing the\nfinal judgment or order. See, Abdullah v. Nebraska Dept. of\nCorr. Servs., 245 Neb. 545, 513 N.W.2d 877 (1994); Glup\nv. City of Omaha, 222 Neb. 355, 383 N.W.2d 773 (1986).\nHere, the Homeowners filed their petition in error with the\ndistrict court on October 21, 2015, unquestionably more than\n30 days after the Planning Board approved the conditional\nuse permit on August 5. However, the Homeowners contend\nthat the Planning Board\u2019s approval was not a final order.\nWe agree.\n The Homeowners point to the Omaha Municipal Code,\nwhich provides that \u201c[a]pproval of a conditional use permit\nby the planning board shall be effective five days after action,\nunless associated with an application for rezoning or subdivi-\nsion approval.\u201d \u00a7 55-883(j). In this instance, the request for\nthe conditional use permit was associated with an application\nfor rezoning. Therefore, we apply \u00a7 55-883(c) of the Omaha\nMunicipal Code, which addresses concurrent applications.\nSection 55-883(c) provides in part, \u201cThe official effective\ndate of a conditional use permit shall be the effective date\n\f - 178 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\nof an ordinance approved by the city council implementing\nrezoning of the site.\u201d In this case, the conditional use permit\nwent into effect on October 20, 2015, when the City Council\npassed the ordinance approving the amendment of the MCC\noverlay district. On the same date, the conditional use permit\nbecame a final order, and the Homeowners filed their peti-\ntion in error on October 21, within 30 days of the final order.\nSee Neb. Rev. Stat. \u00a7 25-1902 (Reissue 2016) (defining final\norder for purposes of review on petition in error). Therefore,\nthe district court had subject matter jurisdiction. See Neb.\nRev. Stat. \u00a7 25-1901 (Reissue 2016) (providing for district\ncourt\u2019s appellate jurisdiction over any \u201cfinal order made by\nany tribunal, board, or officer exercising judicial functions\u201d)\nand \u00a7 25-1931.\n\n (b) Standing\n Next, the City, the Planning Board, and the City Council\ncontend that the Homeowners failed to allege or prove any\nspecial injury arising from the \u201cimposition of the stricter\nMCC overlay rules onto the subject property\u201d and that there-\nfore, they do not have standing. Brief for appellees on cross-\nappeal at 39. The City, the Planning Board, and the City\nCouncil point out that the MCC overlay district actually\nis more restrictive to future development than the existing\ncommercial base district and provides the Homeowners with\nadded protection.\n [3-5] Standing is the legal or equitable right, title, or inter-\nest in the subject matter of the controversy. Smith v. City of\nPapillion, 270 Neb. 607, 705 N.W.2d 584, 590 (2005). The\nrequirement of standing is fundamental to a court\u2019s exercise\nof jurisdiction, and either a litigant or a court before which a\ncase is pending can raise the question of standing at any time\nduring the proceeding. Id. It is generally held that an adjacent\nlandowner has standing to object to the rezoning of property\nif such landowner shows some special injury separate from a\ngeneral injury to the public. See id.\n\f - 179 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n The Homeowners point out that since they live adjacent to\nor within 300 feet of the proposed project, they have stand-\ning, like the property owners in Smith v. City of Papillion,\nsupra. There, we noted that Neb. Rev. Stat. \u00a7 19-905 (Reissue\n1997) required notice to owners of property within 300 feet\nof the proposed project in first-class cities such as Papillion\nand that the property owners\u2019 entitlement to such notice sup-\nported a finding of special injury. Here, the operative statute\nin \u00ad metropolitan-class cities like Omaha is Neb. Rev. Stat.\n\u00a7 14-420 (Cum. Supp. 2016), which also requires notice to\nowners of property within 300 feet of the proposed proj-\nect. See Neb. Rev. Stat. \u00a7 14-101 (Reissue 2012) (defining\n\u00admetropolitan-class cities). Thus, the Homeowners\u2019 entitlement\n to notice in this case tends to show the presence of a special\n injury. Further, in Smith, we noted that the finding of spe-\n cial injury was also supported by expert testimony that the\n proposed project would diminish property values in the area.\n We find similar evidence of a special injury in the instant\n case, where a real estate broker with 14 years of experience\n provided evidence to the Planning Board that the proposed\n changes would cause an adverse impact on the neighboring\n residents\u2019 property values. Although contradictory evidence\n was presented by way of the planning department report, the\n Homeowners met their initial burden to show standing to chal-\n lenge the proposed uses and rezoning.\n\n (c) Jurisdiction\n [6,7] Lastly, the City, the Planning Board, and the City\nCouncil contend that the City Council\u2019s decision on the appli-\ncation for rezoning was a legislative function and, therefore,\nnot the proper subject of an error proceeding. Previously, we\nhave found that \u201can appeal or error proceeding does not lie\nfrom a purely legislative act by a public body to which leg-\nislative power has been delegated\u201d and that \u201cthe only remedy\nin such cases is by collateral attack, that is, by injunction or\nother suitable action.\u201d In re Application of Frank, 183 Neb.\n\f - 180 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n722, 723, 164 N.W.2d 215, 216 (1969). We have held that a\nzoning ordinance constitutes the exercise of a governmental\nand legislative function and that a city council adopting a\nrezoning ordinance which amends a general zoning ordinance\nacts in a legislative capacity. Giger v. City of Omaha, 232\nNeb. 676, 442 N.W.2d 182 (1989); Copple v. City of Lincoln,\n210 Neb. 504, 315 N.W.2d 628 (1982); In re Application of\nFrank, supra.\n But as pointed out by the Homeowners, although the above-\ncited cases preclude a petition in error following a legislative\nact, none of them deals with a simultaneous rezoning and spe-\ncial use permit. See, Giger v. City of Omaha, supra; Copple\nv. City of Lincoln, supra; In re Application of Frank, supra.\nOur case law does not address that situation. And the ques-\ntion becomes whether the City Council acted legislatively or\njudicially when faced with simultaneous requests for rezoning\nand a special use permit.\n The Homeowners contend that by conducting simultaneous\nhearings on the special use permit and the rezoning, the City\nCouncil acted judicially. They argue:\n In deciding to include Leise\u2019s convenience storage\n and warehouse project within the MCC Overlay District,\n the . . . City Council acted judicially and not legisla-\n tively. The hearings on the amendment and the special\n use permit were at the same time and date, had the same\n participants and opponents and evidence, and utilized the\n same hearing procedures.\nReply brief for appellants at 10.\n To support their argument, the Homeowners cite McNally\nv. City of Omaha, 273 Neb. 558, 731 N.W.2d 573 (2007), for\nthe proposition that when a tribunal is required to conduct a\nhearing and receive evidence, it exercises a judicial function\nin determining questions of fact. And under Neb. Rev. Stat.\n\u00a7 25-1903 (Reissue 2016), proceedings to obtain a reversal,\nvacation, or modification of a final order made by any tri-\nbunal, board, or officer exercising judicial functions shall be\n\f - 181 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\nby a petition entitled \u201cpetition in error.\u201d However, McNally\ninvolved an administrative hearing before a building review\nboard and not a hearing before a city council. Further, we\nnoted in McNally that there was an adversarial hearing where\nevidence had been presented by both sides and that the build-\ning review board exercised \u201c\u2018judicial functions.\u2019\u201d 273 Neb. at\n564, 731 N.W.2d at 580.\n Where our case law has not explicitly stated whether a pro-\nceeding is quasi-judicial or legislative, the nature of the pro-\nceeding in question is a key factor in making that determina-\ntion. For example, in In re Application of Olmer, 275 Neb. 852,\n752 N.W.2d 124 (2008), we found that the county board acted\nquasi-judicially in denying an application for a conditional use\npermit; in so finding, we noted that the record included exhib-\nits offered and received and a stipulated supplemental record\nwhich included a deposition with attached exhibits.\n Here, the record reflects that the special use permit and\nrezoning applications proceeded at the same hearing pursuant\nto separate agenda items. Further, the record does not show\nthat evidence was offered and received or that testimony was\noffered. Rather, the Homeowners\u2019 opposition document was\nsimply submitted to the City Council prior to the hearing and\nlater filed with the City clerk\u2019s office. Several neighboring\nresidents, including some of the Homeowners, also presented\nargument at the two City Council hearings. Although we rec-\nognize that various boards and councils do not function as\ncourts in the strict sense, parties cannot transform an other-\nwise legislative proceeding into a quasi-judicial function or\nestablish a quasi-judicial record by simply presenting argu-\nments and handing documents to the presiding body. In light\nof the nature of the proceedings at issue here, we conclude\nthat the City Council acted as a legislative body in granting\nthe rezoning request and in granting the special use per-\nmit. Accordingly, a request for a permanent injunction, not\na petition in error, was the proper means to seek review of\nboth determinations.\n\f - 182 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n [8] Because the Homeowners filed a petition in error to\nreview both the rezoning and special use permit approvals by\nthe City Council, the district court did not have jurisdiction\nto proceed on those issues, and as a result, neither does this\ncourt. When a trial court lacks the power, that is, jurisdiction,\nto adjudicate the merits of a claim, the Supreme Court also\nlacks power to adjudicate the merits of the claim. Nebraska\nState Bar Found. v. Lancaster Cty. Bd. of Equal., 237 Neb.\n1, 465 N.W.2d 111 (1991). We therefore dismiss for lack of\njurisdiction that portion of the Homeowners\u2019 appeal regarding\nthe City Council\u2019s approval of the rezoning and the special use\npermit. Consequently, we need not address the Homeowners\u2019\nassignments of error concerning the rezoning and the special\nuse permit. Johnson v. Nelson, 290 Neb. 703, 861 N.W.2d 705\n(2015) (appellate court is not obligated to engage in analy-\nsis that is not necessary to adjudicate case and controversy\nbefore it).\n\n 2. Direct A ppeal\n Our holding regarding the cross-appeal limits our consid-\neration of the Homeowners\u2019 direct appeal to only the follow-\ning issues related to the conditional use permit: whether the\nPlanning Board acted within its jurisdiction, whether it had\nsufficient evidence to approve the conditional use permit, and\nwhether it acted with due process of law.\n\n (a) Jurisdiction\n [9] The Homeowners claim that the district court erred in\nfinding that the Planning Board acted within its jurisdiction. In\nreviewing a decision based upon a petition in error, an appel-\nlate court determines, among other things, whether the inferior\ntribunal acted within its jurisdiction. See Crown Products\nCo. v. City of Ralston, 253 Neb. 1, 567 N.W.2d 294 (1997).\nA party invoking the tribunal\u2019s jurisdiction has the burden to\nestablish the elements of standing. Field Club v. Zoning Bd. of\nAppeals of Omaha, 283 Neb. 847, 814 N.W.2d 102 (2012). The\n\f - 183 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\nHomeowners argue that Leise failed to show standing because\nthe application he submitted did not reflect that he was the\nowner of the subject property or the agent of the owner and did\nnot specifically request a conditional use permit.\n [10] Both sides agree that Leise failed to check the box\nrequesting a conditional use permit on the original applica-\ntion. On the other hand, the City, the Planning Board, and the\nCity Council point out that the Homeowners allege Leise\u2019s\nseeking of a conditional use permit in their amended petition\nin error and that the hearings were all advertised to reflect\nthat a conditional use permit was being considered. However,\nthe controlling issue here is that the Homeowners failed to\nchallenge, in their petition in error, Leise\u2019s failure to check\nthe box requesting a conditional use permit on the original\napplication. An issue not presented to the trial court may\nnot be raised on appeal. V.C. v. Casady, 262 Neb. 714, 634\nN.W.2d 798 (2001). Now, for the first time, the Homeowners\nraise the issue of Leise\u2019s failure to check the box requesting\na conditional use permit, and we cannot consider that portion\nof their argument.\n Similarly, the Homeowners now assert that Leise lacked\nstanding to obtain the conditional use permit because his\napplication did not demonstrate that he was the owner of\nthe subject property or the agent of the actual owner. They\nargue that Leise failed to establish any agency relationship\nwhen he incorrectly designated \u201cRay Anderson c/o Anderson\nFood Shops\u201d as the owner, rather than \u201cRay Anderson, Inc.\u201d\nHowever, the Homeowners did not raise this issue before the\ndistrict court in the context of the conditional use permit.\nInstead, their amended petition in error alleged that because\nLeise\u2019s application failed to provide accurate information\nabout the ownership of the subject property or the authority\nto develop it, the Planning Board and the City Council lacked\nsufficient evidence to approve the special use permit and the\nrezoning. As it pertains to the conditional use permit, then,\nthis issue was neither presented to nor passed upon by the\n\f - 184 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\ndistrict court, and the Homeowners cannot now raise it on\nappeal. See id.\n\n (b) Sufficiency of Evidence\n [11] The Homeowners also argued to the district court and\nnow on appeal that the Planning Board had insufficient evi-\ndence to approve the conditional use permit. In reviewing a\ndecision based on a petition in error, an appellate court deter-\nmines whether the inferior tribunal acted within its jurisdic-\ntion and whether the inferior tribunal\u2019s decision is supported\nby sufficient relevant evidence. Crown Products Co. v. City\nof Ralston, 253 Neb. 1, 567 N.W.2d 294 (1997). Further, the\nreviewing court is restricted to the record before the adminis-\ntrative agency and does not reweigh evidence or make inde-\npendent findings of fact, and the evidence is sufficient to sup-\nport an administrative agency\u2019s decision if the agency could\nreasonably find the facts as it did based on the testimony and\nexhibits contained in the record. Geringer v. City of Omaha,\n237 Neb. 928, 468 N.W.2d 372 (1991).\n In summary, the Homeowners argue that \u201c[t]here was not\nsufficient competent evidence for approval of the condi-\ntional use permit for the industrial use of warehousing and\ndistribution (limited) given the unrebutted evidence regard-\ning lack of compatibility, adverse economic effects, and\nsafety concerns.\u201d Brief for appellants at 30. Specifically,\nthe Homeowners maintain that the City, the Planning Board,\nand the City Council failed to follow the criteria as set forth\nin \u00a7 55-885. Section 55-885(a) does set forth the criteria\nfor review and evaluation for a conditional use permit. But\n\u00a7 55-885(b) further provides that \u201cconditional use permits . . .\nshall be reviewed in accordance with the relevant criteria,\u201d\nwhich means that the reviewing body need not consider each\nlisted standard. The record reflects that although the City, the\nPlanning Board, and the City Council did not consider each\nfactor within \u00a7 55-885, they gave due consideration to the\nfactors relevant in this case.\n\f - 185 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n Additionally, the Homeowners argue that the affected resi-\ndential areas are composed of single-family dwellings in\nmedium- to low-density neighborhoods and are not zoned to\ninclude convenience storage or warehousing as conditional\nor special uses. The Homeowners contend that the Planning\nBoard approved the conditional use permit for limited indus-\ntrial warehousing and distribution \u201cwithout any consideration\nof extensive public opposition to the project and the unrebutted\nconcerns regarding compatibility, adverse economic effects,\nand safety concerns.\u201d Brief for appellants at 29. Certainly,\nopposition and concerns were raised.\n On the other hand, the City\u2019s planning department presented\na report to the Planning Board dated April 29, 2015, which\nanalyzed Leise\u2019s application. That report acknowledged the\nsurrounding residential properties and that prior to the subject\nproperty\u2019s annexation by the City, warehousing and distribu-\ntion were permitted uses for the subject property. It noted that\nLeise\u2019s permit request was in substantial conformance with\nthe zoning ordinance and the City\u2019s master plan. Further, the\nplanning department\u2019s report thoroughly analyzed the proposed\nproject in light of the relevant criteria of \u00a7 55-885 and con-\ncluded that the economic impact on surrounding properties was\nacceptable. In an updated report dated July 29, 2015, the plan-\nning department opined that Leise had essentially complied\nwith all requested changes to his proposal and recommended\napproval of the conditional use permit, the special use permit,\nand the rezoning, subject to certain conditions.\n Although the Homeowners raised valid concerns, we can-\nnot find from the record that the Planning Board did not\nevaluate the application using its own criteria as outlined in\n\u00a7 55-885 or that its decision was not supported by sufficient\nrelevant evidence.\n\n (c) Due Process\n Lastly, the Homeowners contend that they were not pro-\nvided due process. They argue:\n\f - 186 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\n The [Planning] Board did not provide the opportunity to\n question . . . Leise or his counsel. Very little time was\n provided to present opposition evidence and concerns to\n the [Planning] Board. It was clear from the responses by\n the majority of [Planning] Board members to concerned\n citizens\u2019 testimony at the May 6 . . . and August 5, 2015\n public meetings that the [Planning] Board had already\n decided in favor of . . . Leise\u2019s plan.\nBrief for appellants at 33. The Homeowners obviously believe\nthat the Planning Board did not sufficiently consider their\nviewpoint.\n However, the two portions of the record that the Homeowners\ncite do not support their position. First, a Homeowner sug-\ngested that the storage facility would be frequented by owners\nof lower-end homes rather than owners of higher-end homes\nsuch as his. In response, a board member cautioned him and\nothers present to be \u201cvery careful about generalizing about\npeople.\u201d The Homeowners argue that this reflects that the\nPlanning Board was not an \u201cimpartial adjudicator . . . and in\neffect became witnesses\u201d for Leise. Brief for appellants at 32.\nCertainly, the Homeowner who offered the suggestion had the\nright to protect his property investment, which he believed\nwould be adversely affected by the proposed uses. However, a\nPlanning Board member\u2019s redirecting the Homeowner\u2019s com-\nments does not equate with partiality or becoming a witness.\nSecond, the Homeowners point to a portion of the record\nwherein a Planning Board member expressed his concerns\nabout the Homeowners\u2019 arguing against the project from a\nsocioeconomic standpoint. Again, we cannot find that those\nconcerns reflected either that the board member was not impar-\ntial or that he had become a witness. Further, neither instance\nshows that the Homeowners were not allowed to offer evi-\ndence, were not allowed to offer their opinion, or attempted to\nquestion Leise on the record.\n [12] A court reviewing an order of an administrative agency\nmust determine whether there has been due process of law;\n\f - 187 -\n Nebraska Supreme Court A dvance Sheets\n 297 Nebraska R eports\n LANDRUM v. CITY OF OMAHA PLANNING BD.\n Cite as 297 Neb. 165\n\nand this includes an inquiry into the jurisdiction of the agency,\nwhether there was reasonable notice and an opportunity for\nfair hearing, and whether the finding was supported by evi-\ndence. Ashby v. Civil Serv. Comm., 241 Neb. 988, 492 N.W.2d\n849 (1992). See, also, Crown Products Co. v. City of Ralston,\n253 Neb. 1, 567 N.W.2d 294 (1997) (in proceedings before\nadministrative agency or tribunal, procedural due process\nrequires, among other things, opportunity to present evidence\nand hearing before impartial board). As an appellate court\nperforming a review of the record for due process, we are\npositioned not to judge the wisdom of the Planning Board\u2019s\ndecision, but to ensure that an aggrieved party had the oppor-\ntunity to be heard. The Homeowners had that opportunity.\nCertainly, another board may have allowed more time than\nallotted here, but the amount of time devoted is not as relevant\nas the independence of the inquiry. In particular, for us to find\nerror, the record must reflect an actual bias rather than mere\ndisagreement. Based on our review of the record, we find that\nthe Homeowners were provided due process.\n VI. CONCLUSION\n For the aforementioned reasons, we dismiss for lack of\njurisdiction the portion of the Homeowners\u2019 appeal address-\ning the rezoning and special use permit, and we further vacate\nthe district court\u2019s order in that regard for lack of jurisdiction.\nHowever, we affirm the district court\u2019s order in regard to the\nconditional use permit.\n\tA ffirmed in part, and in part\n\t vacated and dismissed.\n\f"} -{"text": "\n\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 11th\nCourt of Appeals\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Eastland,\nTexas\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Opinion\n\u00a0\nDavid B. Smith\nAppellant\nVs.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 No.\u00a0 11-02-00156-CV C\nAppeal from Taylor County\nJ-Hite,\nInc. \nAppellee\n\u00a0\nThis appeal arises out of a proceeding filed by appellee, J-Hite, Inc., to confirm an arbitration\naward.\u00a0 Appellant, David B. Smith,\noriginally filed suit in state district court against appellee\non October 12, 1999, with respect to his purchase of a manufactured home from appellee.\u00a0 Appellee responded to appellant=s\noriginal petition by asserting that his claims were subject to binding\narbitration as a result of various documents executed by appellant.\u00a0 The trial court sustained appellee=s arbitration contention by dismissing\nappellant=s suit\nand referring the controversy to arbitration.\u00a0\nPursuant to the trial court=s\norder, the parties initiated arbitration proceedings with the American\nArbitration Association.\u00a0 The parties= disputes were heard by an arbitrator\nin a hearing conducted from June 13, 2001, through June 15, 2001.\u00a0 The arbitrator issued his arbitration award\non July 18, 2001.\u00a0 The arbitrator awarded\na net recovery in favor of appellant in the amount of $1,814.16.\u00a0 Appellee\nforwarded\u00a0 a check to appellant for the\namount of his net recovery on August 7, 2001.\n\n\n\n\nAppellee filed an\napplication in state district court on October 23, 2001, seeking the entry of a\njudgment confirming the arbitration award.\u00a0\nAppellant responded to the application for confirmation by filing on\nNovember 16, 2001, a pleading entitled ARespondent=s Answering Statement and Complaint.@\u00a0\nAppellant filed this pleading pro se.\u00a0\nAppellant sought in this pleading to have the arbitration award set\naside on several grounds, including corruption between appellee\nand the arbitrator, partiality of the arbitrator, and misconduct by the\narbitrator.\u00a0 Appellee\u00a0 filed a motion for summary judgment on\nJanuary 28, 2002, which the trial court granted on April 24, 2002.\u00a0 Appellant raises 10 points of error attacking\nthe trial court=s entry\nof summary judgment in favor of appellee.\u00a0 We affirm.\nThe trial court=s\norder granting summary judgment does not specify the grounds upon which it was\nbased.\u00a0 When a trial court=s order granting summary judgment does\nnot specify the ground or grounds relied upon for its ruling, summary judgment\nwill be affirmed on appeal if any of the summary judgment grounds advanced by\nthe movant are meritorious.\u00a0 Dow Chemical Company v. Francis, 46\nS.W.3d 237, 242 (Tex.2001); Carr v. Brasher, 776 S.W.2d 567, 569\n(Tex.1989).\u00a0 Appellee=s motion sought summary judgment on two\ngrounds.\u00a0 Appellee\nalleged in the first ground that appellant=s\nattempt to set aside the arbitration award was barred by limitations.\u00a0 In the second ground, appellee\nalleged that there was no evidence of any grounds sufficient to set aside the\narbitration award.\nAppellant=s\nfifth, sixth, seventh, and eighth points of error address appellee=s limitations contention.\u00a0 Appellee asserts\nthat a provision of the Federal Arbitration Act (FAA) bars appellant=s attempt to set aside the arbitration\naward more than 90 days after its entry.\u00a0\nSee 9 U.S.C.A. '\n12 (West 1999).[1]\u00a0 When reviewing a traditional motion for\nsummary judgment, the following standards apply:\u00a0 (1) the movant for\nsummary judgment has the burden of showing that there is no genuine issue of\nmaterial fact and that it is entitled to judgment as a matter of law; (2) in\ndeciding whether there is a disputed material fact issue precluding summary\njudgment, evidence favorable to the non-movant will\nbe taken as true; and (3) every reasonable inference must be indulged in favor\nof the non-movant and any doubts resolved in its\nfavor.\u00a0 TEX.R.CIV.P. 166a; Goswami v. Metropolitan Savings and Loan\nAssociation, 751 S.W.2d 487, 491 (Tex.1988); Nixon v. Mr. Property\nManagement Company, Inc., 690 S.W.2d 546, 548-49 (Tex.1985); City of\nHouston v. Clear Creek Basin Authority, 589 S.W.2d 671, 676 (Tex.1979).\n\n\n\n\nAppellant executed a written document entitled ARETAIL\nINSTALLMENT CONTRACT, SECURITY AGREEMENT, WAIVER OF TRIAL BY JURY, AND\nAGREEMENT TO ARBITRATION OR REFERENCE OR TRIAL BY JUDGE ALONE@ in connection with his purchase of the\nmanufactured home from appellee.\u00a0 The contract contains the following\nprovisions dealing with arbitration:\nARBITRATION\nOF DISPUTES AND WAIVER OF JURY TRIAL:\n\u00a0\na.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Dispute\nResolution.\u00a0 Any controversy or claim between\nor among you and me or our assignees arising out of or relating to this\nContract or any agreements or instruments relating to or delivered in\nconnection with this Contract, including any claim based on or arising from an\nalleged tort, shall, if requested by either you or me, be determined by\narbitration, reference, or trial by a judge as provided below.\u00a0 A controversy involving only a single\nclaimant, or claimants who are related or asserting claims arising from a\nsingle transaction, shall be determined by arbitration as described below.\u00a0 Any other controversy shall be determined by\njudicial reference of the controversy to a referee appointed by the court or,\nif the court where the controversy is venued lacks\nthe power to appoint a referee, by trial by a judge without a jury, as\ndescribed below.\u00a0 YOU AND I AGREE AND\nUNDERSTAND THAT WE ARE GIVING UP THE RIGHT TO TRIAL BY JURY, AND THERE SHALL BE\nNO JURY WHETHER THE CONTROVERSY OR CLAIM IS DECIDED BY ARBITRATION, BY JUDICIAL\nREFERENCE, OR BY TRIAL BY A JUDGE.\n\u00a0\nb.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Arbitration.\u00a0 Since this Contract touches and concerns\ninterstate commerce, an arbitration under this Contract shall be conducted in\naccordance with the United States Arbitration Act (Title 9, United States\nCode), notwithstanding any choice of law provision in this Contract.\u00a0 The Commercial Rules of the American\nArbitration Association (AAAA@) also shall apply. The arbitrator(s)\nshall follow the law and shall give effect to statutes of limitation in\ndetermining any claim.\u00a0 Any controversy\nconcerning whether an issue is arbitrable shall be\ndetermined by the arbitrator(s). The award of the arbitrator(s) shall be in\nwriting and include a statement of reasons for the award.\u00a0 The award shall be final.\u00a0 Judgment upon the award may be entered in any\ncourt having jurisdiction, and no challenge to entry of judgment upon the award\nshall be entertained except as provided by Section 10 of the United States\nArbitration Act or upon a finding of manifest injustice.\n\u00a0\n\n\n\n\nSection 12 of the FAA provides that notice of a motion to vacate\nan arbitration award must be served upon the adverse party or his attorney\nwithin three months after the arbitration award is filed or delivered.[2]\u00a0 Section 12 effectively establishes a 3-month\nlimitations period for filing a motion to vacate an arbitration award.\u00a0 See Eurocapital\nGroup Ltd. v. Goldman Sachs & Company, 17 S.W.3d 426, 430-31 (Tex.App. - Houston [1st Dist.] 2000, no pet=n).\nAppellant argues in his sixth point of error that\nthe trial court erred in applying Section 12 to his attack of the arbitration\naward.\u00a0 Appellant contends that the\nthree-month deadline in Section 12 only applies to an independent motion to\nvacate an arbitration award.\u00a0 He asserts\nthat Section 12\u00a0 does not apply to his\nchallenge because he filed his request to vacate the arbitration award in\nresponse to appellee=s\napplication for an order confirming the award.\u00a0\nAppellant cites three U.S. District Court opinions in support of this\nproposition.\u00a0 See Chauffeurs,\nTeamsters, Warehousemen and Helpers Local Union No. 364 v. Ruan\nTransport Corporation, 473 F. Supp. 298 (N.D. Ind. 1979); Paul Allison,\nInc. v. Minikin Storage of Omaha, Inc., 452 F.\nSupp. 573 (D. Neb. 1978); and Riko\nEnterprises, Inc. v. Seattle Supersonics Corporation, 357 F. Supp. 521\n(S.D. N.Y. 1973).\u00a0 The U.S. District\nCourt for the Southern District of Texas rejected the holdings of these three\ncases in Tokura Construction Co., Ltd. v. Corporacion Raymond, S.A., 533 F. Supp. 1274, 1276-78\n(S.D. Tex. 1982).\u00a0 We agree with the\nholding reached in Tokura that the 3-month\ndeadline contained in Section 12 applies to any attempt to vacate an\narbitration award.\u00a0 See Florasynth, Inc. v. Pickholz,\n750 F.2d 171, 174-75 (2nd Cir. 1984).\u00a0\nAppellant=s sixth\npoint of error is overruled.\u00a0 \nAppellant asserts additional grounds for escaping\nthe application of Section 12 in his fifth point of error.\u00a0 He first asserts that his challenge to set\naside the arbitration is a counterclaim subject to the timing requirements of\nTEX. CIV. PRAC. & REM. CODE ANN. '\n16.069 (Vernon 1997).\u00a0 Appellant supports\nthis assertion by noting that the contract contains a Texas choice-of-law\nprovision.\u00a0 We disagree with appellant=s contention that the timeliness of his\nchallenge to the arbitration award is subject to Section 16.069.\u00a0 The arbitration clauses of the contract\nexpressly state that the provisions of the FAA control the arbitration\nproceedings Anotwithstanding\nany choice of law provision in this Contract.@\nFurthermore, the court in Eurocapital held\nthat the 3-month deadline in Section 12 governs all attempts to vacate\narbitration awards governed by the FAA.\u00a0 Eurocapital Group Ltd. v. Goldman Sachs &\nCompany, supra at 430-431.[3]\u00a0 \n\n\n\n\nAppellant additionally argues that Section 12 is\ninapplicable as a result of the following provision in the contract:\u00a0 A[N]o\nchallenge to entry of judgment upon the award shall be entertained except as\nprovided by Section 10 of the United States Arbitration Act or upon a finding\nof manifest injustice.@\u00a0 Appellant contends that Section 12 does not\napply because the contract only referenced Section 10 of the FAA.[4]\u00a0 Section 10 sets out the grounds for vacating\nan arbitration award governed by the FAA while Section 12 establishes the time\nlimitation for bringing such a challenge on the grounds listed in Section\n10.\u00a0 See Eurocapital\nGroup Ltd. v. Goldman Sachs & Company, supra at 431. As noted by the\ncourt in Eurocapital, Sections 10 and 12 are\ncomplimentary enforcement provisions intended to promote the federal policy\nfavoring arbitration.\u00a0 Eurocapital Group Ltd. v. Goldman Sachs &\nCompany, supra at 431.\u00a0 We disagree\nwith appellant=s\ncontention that the contract=s\nomission of a specific reference to Section 12 renders the provision\ninapplicable.\u00a0 Appellant=s fifth point of error is\noverruled.\u00a0 \nIn his seventh point of error, appellant contends\nthat the trial court erred in calculating the date upon which the time\nlimitation of Section 12 began to run.\u00a0\nSection 12 provides that the 3-month period commences when the\narbitration award is Afiled\nor delivered.@\nAppellant acknowledged in his response to the motion for summary judgment that\nhe received the arbitration award on July 24, 2001.\u00a0 Appellant initially responded to the\narbitration award by filing a motion for reconsideration with the arbitrator on\nJuly 30, 2001.\u00a0 The arbitrator denied the\nmotion for reconsideration on August 3, 2001.\u00a0\nAppellant received a copy of the denial on August 7, 2001.\u00a0 Appellant argues on appeal that the\nlimitations period commenced on August 7, 2001, because that is the date that\nhe received the arbitrator=s\nfinal ruling.\u00a0 Assuming, without\ndeciding, that the pendency of appellant=s motion for reconsideration tolled the\nlimitations\u00a0 period set out in Section\n12, the date of August 7, 2001, is more than three months prior to the date\nthat appellant filed his challenge to the arbitration award (November 16,\n2001).\u00a0 Accordingly, appellant=s contention regarding the accrual date\ndoes not require a reversal of the trial court=s\ngrant of summary judgment.\u00a0 Appellant=s seventh point of error is overruled.\n\n\n\n\nAppellant argues in his eighth point of error that\nthe trial court erred in denying his request for equitable tolling of the\nlimitations period set out in Section 12.\u00a0\nIn support of this argument, appellant relies on his attempt to set\naside the arbitration award by filing a lawsuit in federal district court on\nAugust 1, 2001.\u00a0 Appellant filed his\ncomplaint in federal court pro se.\u00a0\nAppellant did not pay a filing fee with the federal court.\u00a0 Instead, he sought to prosecute the federal\naction as a pauper.\u00a0 The federal court\ndenied appellant=s request\nto proceed as a pauper by dismissing his claim without prejudice on September\n4, 2001.\u00a0 Appellant asserts that the\n3-month limitations period should be tolled during the period of time that his\nfederal complaint remained pending.\nFew Texas cases have addressed the concept of\nequitable tolling.\u00a0 Equitable tolling\napplies in situations where the claimant has actively pursued his judicial\nremedies by filing a defective pleading during the statutory period or where\nthe complainant has been induced or tricked by his adversary=s misconduct into allowing the\nfollowing deadlines to pass.\u00a0 Czerwinski\nv. The University of Texas Health Science Center at Houston School of Nursing,\n116 S.W.3d 119, 122-23 (Tex.App. - Houston [14th\nDist.] 2002, pet=n den=d)(citing Rowe v. Sullivan, 967\nF.2d 186, 192 (5th Cir. 1992)).\u00a0 The appellate\nrecord does not support appellant=s\ncontention that the trial court erred in denying appellant=s request for equitable tolling.\u00a0 While appellant did file a proceeding in federal\ncourt to vacate the arbitration award within the 3-month period, appellant=s federal complaint was not dismissed\nbecause of a pleading defect.\u00a0 Instead,\nthe federal complaint was dismissed because the federal court denied appellant=s request to proceed as a pauper.\u00a0 The dismissal date of the federal complaint\n(September 4, 2001) afforded appellant at least 6 weeks to re-file his claim to\nset aside the arbitration award within the 3-month period provided by Section\n12.\u00a0\u00a0 Appellant=s\neighth point of error is overruled.\n\n\n\n\nIn his tenth point of error, appellant presents\nthe general contention that the trial court erred\u00a0 in granting summary judgment in favor of appellee.\u00a0 As set\nforth in our discussion of appellant=s\nfifth, sixth, seventh, and eighth points of error, we have determined that the\ntrial court did not err in granting summary judgment on appellee=s limitations claim.\u00a0 Accordingly, appellant=s\ntenth point of error is overruled.\u00a0 We\nneed not address appellant=s\nfirst, second, third, fourth, and ninth points of error because they address appellee=s\nno-evidence contention under Rule 166a(i).\u00a0 Our determination that summary judgment was\nproper on appellee=s\nlimitations contention renders these points of error moot.\nThe judgment of the trial court is affirmed.\n\u00a0\nPER CURIAM\n\u00a0\nDecember 18, 2003\nPanel\nconsists of:\u00a0 Arnot,\nC.J., and\nWright,\nJ., and McCall, J.\n\n\n\n\n\u00a0\u00a0\u00a0\u00a0 [1]As\nused herein, the terms AFederal Arbitration Act,@ AFAA,@ and AUnited States Arbitration Act@ refer to Title 9 of the United States Code.\n\n\n\u00a0 \u00a0\u00a0\u00a0[2]As\nused herein, ASection 12@ refers\nto 9 U.S.C.A. ' 12 (West 1999).\n\n\n\u00a0\u00a0\u00a0\u00a0 [3]As\nnoted by the court in Eurocapital, the Texas\nGeneral Arbitration Act also contains a 90-day limitation for seeking to vacate\nan arbitration award.\u00a0 See TEX.\nCIV. PRAC. & REM. CODE ANN. '171.088(b) (Vernon Supp. 2003); Eurocapital\nGroup Ltd. v. Goldman Sachs & Company, supra at 430 n.4. \n\n\n\u00a0\u00a0\u00a0\u00a0 [4]As\nused herein, ASection 10@ refers\nto 9 U.S.C.A. '10 (West Supp. 2003).\n\n\n"} -{"text": " IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE\n AT KNOXVILLE\n January 23, 2002 Session\n\n STATE OF TENNESSEE v. WALTER MCGILL\n\n Direct Appeal from the Criminal Court for Knox County\n No. 71223 Ray L. Jenkins, Judge\n\n\n\n No. E2001-01074-CCA-R3-CD Filed April 24, 2002\n\n\nThe appellant, Walter McGill, pled guilty to one count of sexual battery by an authority figure and\nwas sentenced to five years incarceration in the Tennessee Department of Correction. On appeal,\nthe appellant contends that the trial court erred in failing to grant him full probation, or, in the\nalternative, split confinement. Upon review of the record and the parties\u2019 briefs, we affirm the\njudgment of the trial court.\n\n Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Criminal Court is Affirmed.\n\nNORMA MCGEE OGLE, J., delivered the opinion of the court, in which GARY R. WADE, P.J., and\nJOSEPH M. TIPTON, J., joined.\n\nDonald A. Bosch, Lisa B. Morton, and Keith D. Stewart, Knoxville, Tennessee, for the appellant,\nWalter McGill.\n\nPaul G. Summers, Attorney General and Reporter; Elizabeth B. Marney, Assistant Attorney General;\nRandall E. Nichols, District Attorney General; and Robert L. Jolley, Jr., Assistant District Attorney\nGeneral, for the appellee, State of Tennessee.\n\n OPINION\n\n I. Factual Background\n At the appellant\u2019s guilty plea hearing, the State recited the following stipulated facts\nunderlying the appellant\u2019s guilty plea:\n [O]n March 17, of the year 2000 that the [appellant] was a drafting\n teacher at Carter High School here in Knox County, that [D.S.1] was\n a student at Carter High School at that time. That as a result of his\n status, that the [appellant] touched her in her vaginal area. That the\n\n\n 1\n This court refers to m inor victim s of sex crim es only b y their initials.\n\f [appellant] gave a statement to members of the Knox County\n Sheriff\u2019s Department admitting that he had touched [D.S.] in that\n area.\n ....\n [D.S.] was between the statutory ages of 13 and less than 18 at [the\n time of the offense].\n\n Upon hearing the stipulated facts, the trial court accepted the appellant\u2019s plea of guilt\nto one count of sexual battery by an authority figure, a class C felony. See Tenn. Code Ann. \u00a7 39-\n13-527(a)(1) (1997). The trial court sentenced the appellant as a standard Range I offender to five\nyears incarceration. The trial court further denied the appellant alternative sentencing and ordered\nthe appellant to serve his sentence in confinement. The appellant now appeals the denial of\nalternative sentencing.\n\n II. Analysis\n This court reviews challenges to the manner of service of a sentence de novo.\nHowever, if the record reveals that the trial court adequately considered sentencing principles and\nall relevant facts and circumstances, this court will accord the trial court\u2019s determinations a\npresumption of correctness. Tenn. Code Ann. \u00a7 40-35-401(d) (1997); State v. Ashby, 823 S.W.2d\n166, 169 (Tenn. 1991). Regardless, we must consider the following factors in the course of our de\nnovo review: (1) the evidence, if any, received at the trial and the sentencing hearing; (2) the\npresentence report; (3) the principles of sentencing and arguments as to sentencing alternatives; (4)\nthe nature and characteristics of the criminal conduct involved; (5) evidence and information offered\nby the parties on enhancement and mitigating factors; (6) any statement by the appellant in his own\nbehalf; and (7) the appellant\u2019s potential for rehabilitation or treatment. Tenn. Code Ann. \u00a7 40-35-102\nand -103 (1997), -210 (2001 Supp.); see also Ashby, 823 S.W.2d at 168. The burden is on the\nappellant to demonstrate the impropriety of his sentence. Tenn. Code Ann. \u00a7 40-35-401, Sentencing\nCommission Comments.\n\n In the trial court, because the appellant is a Range I standard offender convicted of\na class C felony, he was presumed to be a favorable candidate for alternative sentencing, Tenn. Code\nAnn. \u00a7 40-35-102(5)-(6) (1997), and the State bore the burden of overcoming that presumption.\nState v. Lane, 3 S.W.3d 456, 462 (Tenn. 1999). However, the appellant bore the burden of\nestablishing his suitability for full probation, even if he was entitled to the statutory presumption of\nalternative sentencing. State v. Grissom, 956 S.W.2d 514, 520 (Tenn. Crim. App. 1997). The\nappellant was required to establish that granting him full probation would \u201csubserve the ends of\njustice and the best interest of both the public and the [appellant].\u201d State v. Dykes, 803 S.W.2d 250,\n259 (Tenn. Crim. App. 1990), overruled on other grounds by State v. Hooper, 29 S.W.3d 1, 9 (Tenn.\n2000).\n\n In denying the appellant alternative sentencing, the trial court stated:\n The Court has had the benefit of the presentence investigation; the\n psychological report of Dr. Lyons; a letter\u2013oh, yes, the\u2013the victim\n\n -2-\n\f impact statements filed by the mother, the father, stepmother of the\n victim; also letters from Dr. Fain and two friends, the Hakes.\n ....\n\n The Court has considered the [appellant\u2019s] interest, his behavioral\n record, his employment history, and social history, his present\n condition, including physical and mental, the interest of the public,\n the need of deterrence of the kind of crime for which the [appellant]\n has committed.\n\n The Court also is of the opinion that the [appellant] has demonstrated\n his lack of self-discipline. He has failed and refused to bring his\n conduct in line with conduct required in a civilized society.\n\n The Court sentences the [appellant] under the provisions of [Tenn.\n Code Ann. \u00a7] 40-35-103, Section 1(B), that confinement is necessary\n to avoid depreciating the seriousness of the offense and is suited to\n provide an effective deterrence to others likely to commit similar\n offenses. All of which require the imprisonment of the [appellant] for\n his own best interest and especially for the protection of the public.\n\n Initially we note that, contrary to the appellant\u2019s contention, there is an affirmative\nshowing in the record that the trial court \u201cconsider[ed] the circumstances of the offense, the\n[appellant\u2019s] criminal record, the [appellant\u2019s] social history and present condition, the need for\ndeterrence, and the best interest of the [appellant] and the public.\u201d State v. Batey, 35 S.W.3d 585,\n588 (Tenn. Crim. App. 2000). The trial court specifically noted the heavy weight it placed upon the\nvictim impact statements because the statements revealed the \u201ccomplete devastation of the victim.\u201d\nFurthermore, the trial court considered the psychological report filed by Dr. Bernard F. Lyons, Jr.,\nafter the appellant submitted to an evaluation, and the trial court noted specific portions of the report\nin support of its ruling. Consideration of such a report is mandated by Tenn. Code Ann. \u00a7 39-13-\n705 (2001 Supp.), which statute provides:\n (a) On and after January 1, 1996, each sex offender who is to be\n considered for probation or any other alternative sentencing shall be\n required to submit to an evaluation for treatment, risk potential,\n procedures required for monitoring of behavior to protect victims and\n potential victims, and an identification under the procedures\n developed pursuant to \u00a7 39-13-704(d)(1).\n\n (b) Those offenders found guilty at trial or who pled guilty without an\n agreement as to length of sentence and/or probation and/or alternative\n sentencing that are to have a pre-sentence report prepared for\n submission to the court shall be required to submit to the evaluation\n referred to in subsection (a). Such evaluation shall be included as part\n\n -3-\n\f of the pre-sentence report and shall be considered by the court in\n determining the sentencing issues herein stated. If the court grants\n probation or alternative sentencing, any plan of treatment\n recommended by such evaluation shall be a condition of the probation\n or alternative sentencing. Those offenders, that, as part of a\n negotiated settlement of their case, are to be placed on probation or\n alternative sentencing shall be required to submit to the evaluation\n referred to in subsection (a) as a condition of their probation or\n alternative sentencing and any plan of treatment recommended by\n such evaluation shall be a condition of probation or alternative\n sentencing.\nAccordingly, we will review the trial court\u2019s findings de novo with a presumption of correctness.\n\n The appellant argues that \u201calthough the trial court cited a statute, it failed to specify\nwhether the sentence was calculated to avoid depreciating the seriousness of the crime or to deter\nothers. The trial court merely cited the code provision and its language.\u201d We disagree. It is true that\nthe trial court announced that it was denying probation based upon Tenn. Code Ann. \u00a7 40-35-103\n(emphasis added), which statute provides:\n (1) Sentences involving confinement should be based on the\n following considerations:\n ....\n (B) Confinement is necessary to avoid depreciating the seriousness\n of the offense or confinement is particularly suited to provide an\n effective deterrence to others likely to commit similar offenses. . . .\nHowever, our reading of the record reveals that the trial court\u2019s intent was to deny probation based\nupon both the seriousness of the offense and the deterrent value of confinement.\n\n It is well-established that, \u201cif probation is to be denied because of the nature of the\noffense, it would have to be clear that the criminal act, as committed, would be described as\nespecially violent, horrifying, shocking, reprehensible, offensive, or otherwise of an excessive or\nexaggerated degree.\u201d State v. Travis, 622 S.W.2d 529, 534 (Tenn. 1981); see also State v. Fletcher,\n805 S.W.2d 785, 788-89 (Tenn. Crim. App. 1991). Dr. Lyons\u2019 report notes that the appellant and\nD.S. became familiar during interactions in and out of the classroom setting. According to Dr.\nLyons, the appellant told him that D.S. sat in the front row of his class and he talked to and helped\nher more than other students. During the course of their conversations, the appellant learned that\nD.S.\u2019s boyfriend had \u201cdumped\u201d her. He \u201cconcluded that [D.S.] received no love and attention from\na man. He decided to \u2018give her self-esteem\u2019 and \u2018give her self-worth.\u2019\u201d\n\n The appellant and D.S. began to talk more regarding D.S.\u2019s personal feelings, and she\n\u201cwould give [the appellant] hugs.\u201d The appellant conceded that the relationship made him \u201cfeel\ngood.\u201d He described himself as having a flirtatious nature but stated that, when his flirtations\nbecame unwanted, he always ceased.\n\n\n\n -4-\n\f The relationship evolved to a point where the conversations turned to sexual matters.\nThe appellant revealed to Dr. Lyons that he and D.S. engaged in private conversations, using codes\nto describe explicit sexual acts. According to the appellant, D.S. \u201ckissed him and they rubbed each\nother\u2019s buttocks.\u201d Additionally, on a March field trip, the two spent a full day together. When they\nreturned, the appellant embraced D.S. and kissed her.\n\n The charged offense occurred when, according to the appellant, D.S. offered to allow\nthe appellant to look at her thong underwear. According to Dr. Lyons, the appellant \u201cinsists he only\nran his finger down [the strap of the thong] two inches and only felt the material. He claims he did\nnot touch D.S.\u2019s vagina, though he was \u2018close.\u2019\u201d Despite the appellant\u2019s claims that he knew he had\ngone too far, he also acknowledged that he and D.S. continued to contact each other by e-mail\nthroughout the summer.\n\n Dr. Lyons notes that the appellant expresses sorrow for causing \u201cany trauma,\u201d but the\nappellant claims to be ignorant of \u201cwhat trauma might have occurred.\u201d Dr. Lyons further concludes\nthat the appellant is unable to empathize with D.S., continuing to maintain that he was attempting\nto help her. He posits that the appellant was \u201cgrooming\u201d the victim and concludes:\n In the short term, a modification of [the appellant\u2019s] currently\n depleted self-esteem and his regaining some confidence are major, if\n circumscribed, goals which might best be achieved by focused\n cognitive and interpersonal approaches in a group setting, particularly\n composed of other persons required to enter into such therapy.\n Unfortunately, this subject is unlikely to retain motivation. The\n precipitant for his treatment is situational rather than internal, and he\n is liable to be convinced that he could work things out best on his\n own. This can lead only to backsliding and recurrence of the\n behavior.\n\n Thus, it is clear that the forty-two-year-old appellant abused a position of trust by\nforming an inappropriate student-teacher relationship with D.S., which relationship ultimately\nculminated in the instant offense. We find it particularly important to note that the appellant\u2019s\nbehavior did not consist of a single, spontaneous bad act, but progressed over a period of time. Our\ncourts have often noted the offensiveness of an abuse of trust in such situations. See Lane, 3 S.W.3d\nat 462; State v. Victor D. Neuenschwander, No. M2000-01334-CCA-R3-CD, 2001 Tenn. Crim. App.\nLEXIS 335, at **11-12 (Nashville, May 8, 2001); State v. Mark Steven Marlowe, No. E1998-00873-\nCCA-R3-CD, 2000 Tenn. Crim. App. LEXIS 514, at **17-18 (Knoxville, June 30, 2000), perm. to\nappeal denied, (Tenn. 2001).\n\n Because of the nature of the offense, it is important to note that the abuse of the\nposition of trust is not the sole factor supporting the denial of alternative sentencing. This court has\nalso previously observed that\n [t]he issue in this case is the Appellant\u2019s entitlement to an alternative\n sentence. The potential for the rehabilitation of a defendant is one\n\n -5-\n\f factor which must be considered by the trial court in determining the\n sentencing alternative. Also to be considered is whether the offender\n is likely to reoffend. The risk assessment report speaks to both of\n these issues.\nState v. Martin Charles Jones, No. E1999-01296-CCA-R3-CD, 2001 Tenn. Crim. App. LEXIS 356,\nat *6 (Knoxville, May 7, 2001), perm. to appeal denied, (Tenn. 2001) (citations omitted). Dr. Lyons\u2019\nobservations concerning the appellant\u2019s lack of sympathy for the victim, his failure to perceive the\nharm he caused, and the risk of repetition of this behavior all militate against the appellant\u2019s\nrehabilitative potential. Cf. State v. Mark Logan, No. 01C01-9707-CC-00261, 1998 Tenn. Crim.\nApp. LEXIS 967, at *9 (Nashville, September 15, 1998); State v. Roger Lee Fleenor, No. 03C01-\n9611-CR-00400, 1997 Tenn. Crim. App. LEXIS 1019, at *10 (Knoxville, October 9, 1997).\n\n We also note that the trial court denied the appellant full probation because of the\npotential deterrent effect of the appellant\u2019s incarceration. In Hooper, 29 S.W.3d at 10-12, our\nsupreme court outlined factors which are instructive in determining whether deterrence may support\na denial of full probation:\n 1) Whether other incidents of the charged offense are increasingly\n present in the community, jurisdiction, or in the state as a whole.\n ....\n 2) Whether the defendant\u2019s crime was the result of intentional,\n knowing, or reckless conduct or was otherwise motivated by a desire\n to profit or gain from the criminal behavior.\n ....\n 3) Whether the defendant\u2019s crime and conviction have received\n substantial publicity beyond that normally expected in the typical\n case.\n ....\n 4) Whether the defendant was a member of a criminal enterprise, or\n substantially encouraged or assisted others in achieving the criminal\n objective.\n ....\n 5) Whether the defendant has previously engaged in criminal conduct\n of the same type as the offense in question, irrespective of whether\n such conduct resulted in previous arrests or convictions.\n ....\n Additional facts may be considered by the sentencing court, provided\n that (1) the sentencing court states these additional factors on the\n record with specificity, and (2) the presence of these additional\n factors is supported by at least some proof.\n\n Taking the guidelines of Hooper into consideration during our review of the record,\nwe conclude that there was proof adduced at the sentencing hearing to indicate that confining the\nappellant would have a deterrent effect on \u201cothers similarly situated and likely to commit similar\n\n -6-\n\fcrimes.\u201d Id. at 10. In his brief, the appellant concedes that his conduct in the instant offense was\nintentional, satisfying the second factor. Id. at 11. The State also argues that the appellant\u2019s case\n\u201creceived substantial publicity.\u201d Specifically, the State contends that\n the reference to a newspaper article [in the victim impact statement\n of the victim\u2019s mother] clearly shows that this [appellant\u2019s] crime and\n conviction were known in the community as well as in the discrete\n community of the high school that the victim attended.\n ....\n [Appellant\u2019s] argument that the trial court\u2019s failure to make a finding\n on the record that his \u201cpeers knew of the allegations or would likely\n be aware of any sentence imposed\u201d is disingenuous. Not only does\n the record show that the charges against [appellant] were published\n in a newspaper, but also the victim stated that she was forced to move\n to another high school to avoid this scandal and described the fear\n that continued to haunt her in the wake of the abuse.\nIn D.S.\u2019s victim impact statement, she explains that \u201cI had to go to another school and start my\nschool life over again. I had to leave a school in which I had attended for four years.\u201d Additionally,\nwe note that the victim impact statement of D.S.\u2019s stepmother mentions, \u201c[W]hen the television\nnews carried the story and I saw that man for the first time, all I could do was weep.\u201d Moreover, Dr.\nLyons, D.S.\u2019s mother, and D.S.\u2019s stepmother all mention reading the appellant\u2019s comments in a\nnewspaper.\n\n We acknowledge that, in Hooper, 29 S.W.3d at 11, our supreme court stressed \u201cthat\nin this age of instant access to virtually all types of information, something more than a newspaper\narticle or television report is necessary to fulfill this factor [regarding substantial publicity].\u201d\nHowever, \u201c[c]riminal acts by a professional in his or her official capacity . . . need not be publicized\nstatewide before deterrence may be considered as a factor. In most cases, substantial publicity\nwithin the defendant\u2019s professional community would probably suffice to meet this factor.\u201d Id. The\nrecord indicates that, as a result of this offense, the appellant has resigned from his position as a\nteacher at Carter High School and D.S. has transferred schools. The record does not specifically\nreflect that the reasons for the resignation and the transfer were publicized specifically within the\nappellant\u2019s \u201cprofessional community.\u201d Nevertheless, we conclude that the trial court correctly\nconsidered deterrence in denying the appellant probation.\n\n Although the appellant demonstrated that he has support from family and friends and\nhe has been a productive member of society, we conclude that he has failed to meet his burden of\nestablishing his suitability for full probation. See State v. Don Williams, No. 03C01-9303-CR-\n00072, 1994 Tenn. Crim. App. LEXIS 480, at *14 (Knoxville, August 3, 1994). Additionally, we\nfind sufficient proof in the record to uphold the trial court\u2019s denial of alternative sentencing. As we\nobserved in Fletcher, 805 S.W.2d at 789,\n [i[f appellate review reflects that the trial court, by following the\n statutory sentencing procedure, imposed a lawful sentence, after\n having given due consideration and proper weight to the factors and\n principles which are relevant to sentencing under the Act, and that the\n trial court's findings of fact upon which the sentence is based are\n\n -7-\n\fadequately supported in the record, then we may not disturb the\nsentence even if we would have preferred a different result.\n\n III. Conclusion\nFinding no reversible error, we affirm the judgment of the trial court.\n\n\n\n\n ___________________________________\n NORMA McGEE OGLE, JUDGE\n\n\n\n\n -8-\n\f"} -{"text": " T.C. Summary Opinion 2008-153\n\n\n\n UNITED STATES TAX COURT\n\n\n\n JERRY L. LAMB, Petitioner v.\n COMMISSIONER OF INTERNAL REVENUE, Respondent\n\n\n\n Docket No. 246-08S. Filed December 11, 2008.\n\n\n\n This opinion was withdrawn by order dated\n\nApril 17, 2009.\n\f"} -{"text": "42 F.3d 1385\nNOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.Thomas D. EDWARDS, Plaintiff Appellant,v.NORFOLK SOUTHERN CORPORATION, Defendant Appellee.\nNo. 94-1215.\nUnited States Court of Appeals, Fourth Circuit.\nSubmitted November 17, 1994.Decided December 5, 1994.\n\n1\nAppeal from the United States District Court for the Western District of Virginia, at Roanoke. James C. Turk, District Judge. (CA-92-870)\n\n\n2\nThomas D. Edwards, appellant pro se. William Fain Rutherford, Jr., Todd Albin Leeson, Woods, Rogers & Hazlegrove, Roanoke, VA, for appellee.\n\n\n3\nW.D.Va.\n\n\n4\nAFFIRMED.\n\n\n5\nBefore RUSSELL and MURNAGHAN, Circuit Judges, and BUTZNER,* Senior Circuit Judge.\n\nPER CURIAM\n\n6\nAppellant appeals from the district court's order granting summary judgment for Appellee in his employment discrimination case alleging age and sex discrimination. Our review of the record and the district court's opinion discloses that this appeal is without merit. Accordingly, we affirm on the reasoning of the district court. Edwards v. Norfolk S. Corp., No. CA-92-870 (W.D.Va. Jan. 11, 1994). We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the Court and argument would not aid the decisional process.\n\nAFFIRMED\n\n\n*\n Senior Judge Butzner did not participate in consideration of this case. The opinion is filed by a quorum of the panel pursuant to 28 U.S.C. Sec. 46(d)\n\n\n"} -{"text": "\n246 P.3d 755 (2010)\n239 Or. App. 629\nSTATE\nv.\nTYSON.\nA139962\nCourt of Appeals of Oregon.\nDecember 22, 2010.\nAffirmed without opinion.\n"} -{"text": "\n114 Ill. App.2d 124 (1969)\n252 N.E.2d 366\nRobert Stephenson, Plaintiff-Appellee,\nv.\nAir Products and Chemicals, Inc., Defendant-Appellant.\nGen. No. 68-94.\nIllinois Appellate Court \u0097 Fifth District.\nOctober 10, 1969.\n*125 *126 *127 *128 Chapman, Strawn & Kinder, of Granite City, for appellant.\nCarr, Raffaelle & Cook, of East St. Louis (Rex Carr, of counsel), for appellee.\nGOLDENHERSH, P.J.\nDefendant appeals from the judgment of the Circuit Court of Madison County entered upon a jury verdict in the amount of $300,000.\nIn the first trial of this case, the jury returned a verdict in favor of plaintiff, the circuit court ordered a new trial on the issue of damages only, and this court denied plaintiff's petition for leave to appeal.\nThe injuries of which plaintiff complained in the first trial were suffered on July 7, 1961. Prior to the second trial, plaintiff amended his complaint to allege that as a result of his permanent injuries he \"has been caused to suffer additional injuries....\" Defendant filed a motion stating that upon taking plaintiff's deposition it learned of a fall allegedly suffered on June 24, 1966, and plaintiff was contending the fall occurred because of the condition of his leg as the result of the injuries sustained in July 1961. In compliance with an order entered by the circuit court, and to meet issues raised in defendant's *129 motion to strike or make more definite and certain, plaintiff amended his complaint to allege that as a direct and proximate result of the injuries previously suffered \"and inherently related to these same injuries, plaintiff was caused to fall on the 24th day of June, 1966, at Irving School in St. Louis, Missouri, while he was in the exercise of ordinary care for his safety and without the intervention of any intervening cause or condition, plaintiff did sustain severe and additional injuries to his head, body and right foot, including a fracture thereof, which said injuries are permanent and permanently disabling.\"\nPlaintiff testified that he is 41 years of age, has a tenth grade education; prior to July 7, 1961, his health was good; he has been employed as a painter for 15 years; in July of 1961, a flagpole fell while he was painting it and he fell 20 to 25 feet to the rooftop on which it was mounted; he was treated by various physicians; he returned to work in 1963; he could not do the required lifting and his fellow workers helped him; his leg \"folded up\" on him on many occasions; he described falls while working in 1963 and 1964, and on other occasions when he was not working. In June 1966, while painting in a school his left leg \"folded up\" and he fell off a pick and broke his foot. A pick is a walk board that is placed on two ladders.\nLouis Mifflin testified that he is a painter, had known plaintiff 10 or 15 years, was working with plaintiff on July 7, 1961, when a flagpole at defendant's premises gave way while plaintiff was working near its top; he worked with plaintiff on various jobs; prior to July 7, 1961, plaintiff had performed his work well, but on jobs between 1963 and 1966, plaintiff \"performed his work very poorly\" and needed help in carrying paints and ladders; plaintiff sustained several falls; he was working with him on June 24, 1966, when plaintiff started to *130 make a step, \"his leg collapsed\" and he fell 8 feet off a pick.\nDonald Cook, a painter, testified that he had worked with plaintiff at various jobs since April 1963, plaintiff fell on a job in \"the middle of 1965\" and said \"his leg gave way on him\"; he described falls suffered by plaintiff later in 1965 and May 1966.\nRaymond Reed, a painter, had worked with plaintiff on various jobs since April 1963; on a job in September, 1964, plaintiff's leg gave way and he fell, he was laid off the job several times and Reed, as shop steward, intervened to get him back on; plaintiff needed help to lift things on the job; he fell on another occasion.\nDr. Bart Cole, an orthopedic surgeon, testified that he was called by Dr. Bowers to see plaintiff, who was then confined to St. Elizabeth's Hospital in Granite City. Plaintiff stated he had suffered a fall, prior to which he was in good health. He complained of pain in his neck, back and shoulders. The doctor identified X rays which he stated revealed loss of normal cervical lordosis and scoliosis. He made a diagnosis of cervical radiculitis and a lumbosacral joint derangement. Plaintiff was seen by Dr. Cole three times in 1961, seven times in 1962, in April 1963 and June 1964. He continued to have trouble with his neck, shoulder and back. There was a limitation of motion in lateral bending and a loss of left ankle reflex.\nDr. Cole saw plaintiff in 1966 at St. Mary's Hospital in East St. Louis. He gave a history of an injury several days earlier when his leg \"gave way\" and he fell. X rays revealed a compression type fracture of the right heel bone. X rays taken in January 1967 showed the loss of cervical lordosis and scoliosis as observed earlier, but with some improvement.\nExamination in January 1967 showed a loss of motion in the right foot and an X ray in June 1967 showed subtaler arthritis.\n*131 Dr. Cole expressed the opinion that the condition found in plaintiff's neck and lower back might or could result from the fall on July 7, 1961, and was permanent. In answer to a hypothetical question he expressed the opinion that there might or could be a causal connection between the injuries suffered on July 7, 1961, and the fall on June 24, 1966. He stated that in his opinion the condition found in plaintiff's foot was permanent, and plaintiff was unable to carry heavy objects, climb, or walk on uneven surfaces.\nDr. John McMahan, a psychiatrist testified that he first saw plaintiff on September 17, 1962. He enumerated plaintiff's complaints, reviewed the history given him and stated he had made a diagnosis of psychophysiological musculoskeletal disorder. He prescribed tranquilizers, and because plaintiff's condition did not improve, he was hospitalized on October 19, 1962. He was given electric shock treatments, and discharged on November 2. In his opinion the disorder described was \"connected with\" the fall on July 7, 1961. He last saw plaintiff on April 30, 1963, at which time he stated he had gone back to work and \"was getting along fairly well.\"\nDr. John W. Deyton, a specialist in physical medicine and rehabilitation, saw plaintiff for the first time on January 18, 1967. Plaintiff related a history of a fall while painting a flagpole in 1961, was hospitalized, and as the result of his injuries did not work again until April or May of 1963. He told him of a fall on June 24, 1966; he complained of headaches, pains in the shoulders and neck, pain in his arms, loss of grip, pain in the leg, nervousness, and inability to sleep. He wore orthopedic shoes and there was minimal weight bearing on the right foot.\nDr. Deyton testified that upon examination he found restriction in the range of motion of the neck, restriction of motion in the shoulders, limitation of motion of the back, evidence of a fracture of the right heel and ankle, *132 tenderness of the back on palpation, and atrophy of the right leg. He expressed the opinion that plaintiff could not perform work which required bending or lifting, looking up, shoulder flexion or back extension. He found arthritis in the ankle and evidence of pain which would persist until fusion, either surgical or natural, was effected of the heel bone and \"second\" bone. He believed plaintiff's condition to be permanent.\nDr. W.W. Bowers, called by defendant, testified that he saw plaintiff in his office on July 7, 1961. He was sent home, called later complaining of pain and was sent to the hospital. He developed a paralysis of the bowel which cleared up but he continued to complain of pain in the left shoulder, numbness of the left hand, pain in the chest and left side of the abdomen. All of the symptoms could result from a severe blow to the area affected.\nDr. Lee T. Ford, an orthopedic surgeon, called by defendant, did not examine plaintiff but testified from X rays.\nDr. Norman Shippey, a radiologist, called by defendant, identified and testified with respect to a number of X rays.\nDefendant contends that the trial court erred in admitting evidence of plaintiff's fall on June 24, 1966, and testimony with respect to the injuries suffered at that time. It argues that the injury of June 24, 1966, is not the natural or probable result of defendant's negligence and it cannot be held liable therefor.\nPlaintiff contends that whether the second injury proximately resulted from the injury suffered on July 7, 1961, is a question of fact for the jury.\n[1-3] The abstract proposition of law presented is stated in Restatement of Torts (2nd):\n\"\u00a7 460. Subsequent Accidents Due to Impaired Physical Condition Caused by Negligence.\n\n*133 \"If the negligent actor is liable for an injury which impairs the physical condition of another's body, the actor is also liable for harm sustained in a subsequent accident which would not have occurred had the other's condition not been impaired, and which is a normal consequence of such impairment.\"\nThat the application of the rule to factual situations is sometimes difficult is apparent from an examination of the cases gathered and discussed at 9 ALR 255, 20 ALR 524, and 76 ALR 1285. The majority rule appears to be that whether the harm sustained in a subsequent occurrence resulted from the impairment or injury suffered in the first occurrence is a question of fact for the jury. Eli Witt Cigar & Tobacco Co. v. Matatics (Supreme Court of Florida), 55 So.2d 549; Underwood v. Smith, 261 Ala 181, 73 So.2d 717; Stephenson v. F.W. Woolworth Co., 277 Minn 190, 152 NW2d 138. The fact that the site of the original injury was not the same as the site of the later injury is not determinative that the cause of the original injury did not proximately produce the later injury. Brenan v. Moore-McCormack Lines, 3 App Div2d 1006, 163 NYS2d 889 (Supreme Court, NY Appellate Division, First Department); Creech v. Riss & Company, Inc. (Supreme Court of Missouri), 285 S.W.2d 554.\nThe rule as stated is consistent with the holding of Chicago City Ry. Co. v. Saxby, 213 Ill. 274, 72 NE 755, that the question whether plaintiff's injuries were the result of defendant's negligence, or resulted from some other cause, is one of fact.\n[4] To sustain defendant's contention would require us to hold as a matter of law that there is no causal connection between plaintiff's second fall and the injuries which resulted therefrom. The record contains evidence that the causal relationship exists, and its sufficiency should be determined by the same standards which apply to direction of verdicts and entry of judgments n.o.v., *134 Pedrick v. Peoria & Eastern R. Co., 37 Ill.2d 494, 229 NE2d 504. Applying the test of Pedrick to the record before us, we hold that the issue was properly one for the jury.\n[5] Defendant argues that the evidence shows plaintiff was guilty of contributory negligence as a matter of law in working on a pick, knowing that his leg might \"fold up,\" causing him to fall. The record shows that defendant tendered, and the court gave, instructions which defined contributory negligence and told the jury that with respect to the occurrence of June 24, 1966 plaintiff had the burden of proving that before and at the time of the occurrence he was using ordinary care for his own safety and the additional injuries suffered as the result thereof are the direct and proximate result of the injuries suffered by plaintiff on July 7, 1961, and if they found either proposition has not been proved the verdict should not include any damages for those injuries. Applying the rule of Pedrick to the record before us, the question of whether plaintiff's negligence contributed to cause his fall of June 24, 1966, was properly one for the jury.\n[6] Defendant concedes there is authority for the award of damages for subsequent injuries but argues that recovery has been limited to those instances in which the second injury was suffered within the period of convalescence from the original injury. Some of the cases cited appear to support its contentions, but in our opinion, there is no sound basis for so holding. The test is whether there is a sufficient causal relationship and we are not persuaded that recovery should be limited to occurrences within the period of convalescence.\nDefendant states \"the basic question can be simply put \u0097 where does the responsibility on this or any other defendant end?\" It ends where it has always ended \u0097 when the injured person has been compensated for the damage resulting from its negligence.\n*135 [7] Defendant contends that any cause of action from injuries resulting from the occurrence of June 24, 1966, is barred by the Statute of Limitations (c 83, \u00a7 15, Ill Rev Stats 1967). We have examined the authorities cited (Larkin v. Gerhardt, 21 Ill. App.2d 122, 157 NE2d 426; 171 ALR 1087) and do not find them in point. Plaintiff, in his amendment, did not allege a new cause of action \u0097 he enumerated alleged further consequences of defendant's negligence.\n[8] Defendant argues that the trial court ignored a pretrial order entered by another judge, and in so doing made a fact issue of a question which the judge who conducted the pretrial proceeding decided as a question of law. It concedes that a pretrial order may be amended at the trial, but argues that no amendment may be made which will result in substantial prejudice to a litigant. We have examined the pretrial order and fail to see in what manner defendant was prejudiced. The record does not bear out its contention that as the result of the trial court's failure to follow the pretrial order it was required to assume the burden of proving plaintiff was contributorily negligent and the fall of June 24, 1966 was an intervening cause which would relieve it of liability for the injuries suffered therein. The case was tried, and the jury instructed, on the theory contemplated by the pretrial order, i.e., that plaintiff, with respect to the occurrence of June 24, 1966, was required to prove that he was, at that time, in the exercise of due care, the injuries suffered at that time were the proximate result of the first injury, and did not result from an independent, intervening cause.\n[9, 10] Defendant contends the trial court erred in denying its motion for a continuance after it allowed plaintiff to increase his ad damnum from $200,000 to $500,000. The denial of a motion for continuance is left to the sound discretion of the trial court. The record shows that when counsel for defendant argues the reason *136 for the need for a continuance, i.e., the involvement of another liability carrier, they were misinformed as to the applicable coverage. In denying the motion, the trial court did not abuse its discretion.\nDefendant moved for a directed verdict both at the close of plaintiff's case and at the close of all the evidence \"as to that part ... of the amendment to complaint which relates to the injuries allegedly sustained by plaintiff on the 24th day of June, 1966....\" It contends that the court erred in denying the motions.\nAs previously stated, applying the test of Pedrick we cannot say that the court erred in denying the motions.\n[11] Defendant contends the court erred in refusing to give its tendered instructions numbered 5, 6 and 11. Instruction number 5, not in IPI, purports to instruct on contributory negligence, already covered by defendant's instruction number 2 (IPI 10.03).\n[12] Defendant's instruction number 6 purports to be an issue instruction in the form of IPI 21.03, and states that defendant has pleaded, as an affirmative defense, that any injuries suffered in the occurrence of June 24, 1966, were not the result of the fall of July 7, 1961, but \"were a direct and proximate result of an intervening cause.\" The instruction, as tendered, advises the jury that plaintiff has the burden of proving certain enumerated propositions but fails to instruct them that the defendant has the burden of proving its affirmative defense.\nDefendant's instruction number 13 instructed the jury that plaintiff had the burden of proving that any additional injuries suffered in the occurrence of June 26, 1966, are a direct and proximate result of the injuries suffered on July 7, 1961, and if he failed so to prove the verdict should not include any damages for those injuries. The jury was adequately instructed with respect to the issue of proximate cause of the occurrence of June 24, 1966, and in view of that fact, and the defect *137 in the tendered instruction, the court did not err in its ruling.\nWhat we have said with respect to defendant's instruction number 6 is equally applicable to its number 11, and the court did not err in refusing the instruction.\n[13-15] Defendant tendered a special interrogatory in the following form \"Was the plaintiff in the exercise of ordinary care for his own safety on June 24, 1966?\" It has long been the rule that a special interrogatory should not be given unless the answer thereto could control the general verdict. Under the theory upon which this case was tried, no contention is made that defendant was guilty of a second tort or act of negligence. The issue with respect to the second injury is whether it was proximately caused by the first; therefore, a negative answer to the interrogatory could serve to reduce, not set aside, a verdict in favor of plaintiff, and the court correctly refused to submit it. Further, the interrogatory is improper in form in that it fails to limit the inquiry to \"before and at the time of the occurrence.\" (See IPI 10.03.)\n[16] During the conference on instructions, defendant tendered forms of verdict which provided for separate findings with respect to the occurrences of July 7, 1961, and June 24, 1966. The court refused to submit these verdicts to the jury. The form of verdict submitted to the jury provided only for the assessment of plaintiff's damages.\nSection 65 of the Civil Practice Act (c 110, \u00a7 65, Ill Rev Stats 1967) provides \"Unless the nature of the case requires otherwise, the jury shall render a general verdict.\" The single issue to be determined by the jury was the amount of plaintiff's damages, and there is no statutory provision for specific findings with respect to the elements of damage upon which the verdict is based. The court correctly refused to submit the tendered forms of verdict.\n*138 Defendant contends the verdict was grossly excessive and resulted from passion and prejudice on the part of the jury.\nThe testimony shows plaintiff continued to suffer pain, walks with a limp and requires the use of a cane. There is substantial evidence from which the jury could have decided that plaintiff was industrially unemployable and unable to pursue his trade of painter. He testified to a substantial loss of earnings up to the time of trial. At 41 years of age, he had lengthy life and work expectancies.\n[17, 18] The courts have repeatedly held that the amount of damages to be assessed is peculiarly a question of fact for the jury, and if the jury is properly instructed on the measure of damages, an appellate court should not substitute its judgment as to the sum to be awarded in a given case, for that of the jury.\n[19] Our conclusion, following careful examination of the record, is best described in the following statement found in the opinion in Lau v. West Towns Bus Co., 16 Ill.2d 442, 158 NE2d 63, at page 453:\n\"We are not unmindful of our obligation to carefully scrutinize the record to determine whether the amount of the verdict is so large as to indicate passion and prejudice. This we have done, and we conclude from the evidence that although the verdict may well be in excess of the amount which the judges of this court would have allowed if they had heard the evidence and made the original determination, yet we do not believe that it is so excessive as to show passion or prejudice.\n\"We therefore conclude that the verdict and judgment below are correct and the judgment is affirmed.\"\nJudgment affirmed.\nMORAN and EBERSPACHER, JJ., concur.\n"} -{"text": "\n2 Ill. App.3d 1054 (1971)\n278 N.E.2d 122\nCLANTON REESE, Plaintiff-Appellant,\nv.\nDOROTHY M. REESE, Defendant-Appellee.\nNo. 55610.\nIllinois Appellate Court \u0097 First District.\nNovember 17, 1971.\n*1055 William T. Davies, of Elgin, for appellant.\nAmiel G. Hall, of Chicago, for appellee.\nJudgment affirmed.\nMr. JUSTICE DIERINGER delivered the opinion of the court:\nThe plaintiff, Clanton Reese, filed a suit for divorce and the defendant, Dorothy Reese, filed a countersuit for separate maintenance. On May 2, 1967, a decree of separate maintenance was granted to Dorothy Reese, and since the entry of the decree the plaintiff and defendant have lived apart.\nOn March 23, 1970, Clanton Reese filed a petition to set aside the decree of separate maintenance or, in the alternative, to grant a divorce to either party, and on September 25, 1970, the petition was denied. The plaintiff appeals from that ruling. It is his contention he is being deprived of his right to life, liberty and the pursuit of happiness by a statute that is vague and indefinite; that he has been deprived of life, liberty and property without due process of law, has been a victim of involuntary servitude, and further maintains the uncertainty of such a decree amounts to cruel and inhuman punishment, all in violation of the United States Constitution Amendments 5, 8, 13, and 14, and the 1870 Illinois Constitution, Article II, Bill of Rights Numbers 1 and 2.\nThe plaintiff argues the intent of the Separate Maintenance Statute (Ill. Rev. Stat. 1967, ch. 68, par. 22) is solely to preserve the marital relation and to hold the way open for marital reconciliation. He suggests since he has lived apart from his wife for four years, there is no hope of reconciliation, and the purposes of the statute are not being served. His conclusion is that failure to have a time limit on a separate maintenance agreement renders the statute vague and uncertain and deprives him of his constitutional rights.\n\u0095 1-3 However, while one of the purposes of the statute is to prevent a hasty divorce, another purpose is to provide for the support of a spouse who is not at fault and who does not choose to sue for divorce. (Schneider v. Schneider (1941), 312 Ill. App. 59.) As regrettable as this situation may be for the plaintiff, the State has an interest in maintaining the integrity and permanency of the marriage relation and has chosen to limit the reasons for which a divorce may be granted. That a state may do so is well established. A Nevada court summed up the historical development of legislative control of divorce in Worthington v. District Court (1914), 37 Nev. 212, as follows:\n\"As divorce is not among the inalienable rights of man or the ones granted by Magna Charta, the federal or state constitutions or the common law, and except at the will and subject to any restrictions imposed by the legislature, has never been recognized as one of the *1056 guaranteed privileges of the citizen, and as marriage is the most important of the domestic relations, and of highest concern to the state, it follows that the right to have the bonds of matrimony dissolved is limited to the causes and subject to the requirement prescribed by the statute. * * * Questions relating to the policy, wisdom, and expediency of the law are for the people's representatives in the legislature assembled, and not for the courts to determine. It is the duty of the courts to interpret and enforce the statute in accordance with the intention of the law making body, unless it is clearly in conflict with some provisions of the organic law.\"\nPeople ex rel. Christiansen v. Connell (1954), 2 Ill.2d 332, contains language similar to the Nevada case, but also states:\n\"This, however, does not mean that because the origin of the right or privilege is legislative there are no constitutional restrictions on the type of legislation which may be enacted regulating the exercise of the right. Once the matter has been committed to the judiciary, the parties to such judicial proceedings are clearly entitled to the same constitutional safeguards as are parties to other proceedings. The fact that the legislature might entirely abolish the right of access to the courts for purposes of divorce and annulment does not imply the power to make the exercise of those rights conditional upon a surrender of constitutional guarantees. * * * The Supreme Court of the United States has frequently announced the rule that a state may not attach unconstitutional conditions to the exercise of a right even though the right itself exists entirely at the pleasure of the State.\"\n\u0095 4 The Separate Maintenance Statute, however, is not a restriction or condition of the right of access to divorce since it may only be used by the party who is without fault, and in no way precludes the innocent party from seeking a divorce.\n\u0095 5,6 Therefore, since it has been frequently held there is a presumption in favor of the constitutionality of a legislative enactment (Davies Warehouse Co. v. Bowles, 321 U.S. 144; Chicago v. Ames (1937), 365 Ill. 529) to uphold the constitutionality of the Separate Maintenance Statute, it is sufficient to say it is not unreasonable in the light of legislative objectives and is within the province of legislative power. (People ex rel. Doty v. Connell (1956), 9 Ill.2d 390.) We find the plaintiff's constitutional rights have not been violated.\n\u0095 7 Whether or not divorce or separate maintenance statutes are inadequate or inequitable, they can be corrected only by the legislature and not by judicial pronouncement. In Hilliard v. Hilliard (1960), 25 Ill. App.2d 468, the court faced a fact situation similar to the one at bar. In that case the court noted:\n\n*1057 \"Some cogent reasons are advanced in support of the husband's thesis that a wife, who is being supported under a separation decree, should neither accept a husband's proposals to resume married life or seek a divorce herself; or, if she fails to do either, he should be permitted to divorce her. * * * It is said to be unfair to allow a wife to retain indefinitely the unique status which a separate maintenance decree confers on her, while her husband, unable to free himself, is denied the advantages of marriage or the privileges of divorce. But it would also be unfair to compel a wife, who has kept her matrimonial vows, to either involuntarily condone her husband's misdeeds or be placed in the position of the guilty party and have divorce thrust upon her. * * * Whether the prolonged separation of husband and wife under a separate maintenance decree is sociologically desirable is a problem for legislative determination, and the problem has been before our legislature many times. * * * We have no power under the statute to approve a divorce upon the thesis urged by the husband in this case. If the divorce or separate maintenance statutes are regarded as inadequate or inequitable they can be corrected only by the legislature and not by judicial pronouncement.\"\nFor these reasons, the judgment of the circuit court of Cook County is affirmed.\nJudgment affirmed.\nADESKO, P.J., and BURMAN, J., concur.\n"} -{"text": "543 U.S. 934\nTAALIB-DINv.CITY OF DETROIT, MICHIGAN, ET AL.\nNo. 04-5806.\nSupreme Court of United States.\nOctober 12, 2004.\n\n1\nC. A. D. C. Cir. Certiorari denied. Reported below: 89 Fed. Appx. 281.\n\n"} -{"text": " NOT FOR PUBLICATION FILED\n UNITED STATES COURT OF APPEALS DEC 26 2017\n MOLLY C. DWYER, CLERK\n U.S. COURT OF APPEALS\n FOR THE NINTH CIRCUIT\n\nNICHOLAS PATRICK, No. 17-16243\n\n Plaintiff-Appellant, D.C. No. 1:16-cv-00239-LJO-MJS\n\n v.\n MEMORANDUM*\nREYNAGA; et al.,\n\n Defendants-Appellees.\n\n Appeal from the United States District Court\n for the Eastern District of California\n Lawrence J. O\u2019Neill, Chief Judge, Presiding\n\n Submitted December 18, 2017**\n\nBefore: WALLACE, SILVERMAN, and BYBEE, Circuit Judges.\n\n Nicholas Patrick, a California state prisoner, appeals pro se from the district\n\ncourt\u2019s judgment dismissing his 42 U.S.C. \u00a7 1983 action alleging constitutional\n\nviolations. We have jurisdiction under 28 U.S.C. \u00a7 1291. We review de novo a\n\ndismissal under 28 U.S.C \u00a7 1915(e)(2)(B)(ii). Barren v. Harrington, 152 F.3d\n\n\n *\n This disposition is not appropriate for publication and is not precedent\nexcept as provided by Ninth Circuit Rule 36-3.\n **\n The panel unanimously concludes this case is suitable for decision\nwithout oral argument. See Fed. R. App. P. 34(a)(2).\n\f1193, 1194 (9th Cir. 1998) (order). We may affirm on any basis supported by the\n\nrecord. Lopez v. Smith, 203 F.3d 1122, 1126 (9th Cir. 2000). We affirm in part,\n\nreverse in part, and remand.\n\n Dismissal of Patrick\u2019s equal protection claim was proper because Patrick\n\nfailed to allege facts sufficient to show that defendants discriminated against him\n\nbased on his membership in a protected class. See Hebbe v. Pliler, 627 F.3d 338,\n\n341-42 (9th Cir. 2010) (although pro se pleadings are liberally construed, a\n\nplaintiff must allege facts sufficient to state a plausible claim); Serrano v. Francis,\n\n345 F.3d 1071, 1081-82 (9th Cir. 2003) (setting forth elements of an equal\n\nprotection claim).\n\n Patrick alleged that defendants withheld his outgoing mail to state courts.\n\nLiberally construed, these allegations are sufficient to warrant ordering defendants\n\nto file an answer. See Wilhelm v. Rotman, 680 F.3d 1113, 1116 (9th Cir. 2012);\n\nWitherow v. Paff, 52 F.3d 264, 265 (9th Cir. 1995) (describing prisoners\u2019 First\n\nAmendment right to send and receive mail). We reverse the judgment in part and\n\nremand for further proceedings on this claim only.\n\n We do not consider arguments and allegations raised for the first time on\n\nappeal. See Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009).\n\n 2 17-16243\n\f We do not consider documents not presented to the district court. See\n\nUnited States v. Elias, 921 F.2d 870, 874 (9th Cir. 1990) (\u201cDocuments or facts not\n\npresented to the district court are not part of the record on appeal.\u201d).\n\n AFFIRMED in part, REVERSED in part, and REMANDED.\n\n\n\n\n 3 17-16243\n\f"} -{"text": "\n399 B.R. 470 (2008)\nIn re Cynthia A. REID, Debtor.\nNo. 02-34592.\nUnited States Bankruptcy Court, W.D. Kentucky.\nNovember 21, 2008.\n*471 Paul Musselwhite, Radcliff, KY, William Koehler, Louisville, KY, for Debtor.\n\nMEMORANDUM-OPINION-ORDER\nJOAN A. LLOYD, Bankruptcy Judge.\nThis matter is before the Court on the Motions to Allow Claims of Bob Thompson Construction Company filed by Debtor Cynthia Reid (\"Debtor\") and the Objections thereto of Trustee J. Baxter Schilling (\"Trustee\") to both Motions of the Debtor. The Court considered the Motions of the Debtor, the Objections of the Trustee and the comments of counsel for the parties at the hearing held on the matter. The Court DENIES both Motions.\nDebtor filed two Motions to Allow Claims of Bob Thompson Construction Company in the total amount of $15,044.34. Bob Thompson, owner of Bob Thompson Construction Company, made $15,044.34 in post-petition mortgage payments on real estate owned by the Debtor. These payments reduced the balance owed by Debtor to the Bank of Magnolia, increased Debtor's equity in the property and prevented the property from being foreclosed upon by the Bank.\nDebtor seeks an Order authorizing payment of Bob Thompson Construction Company's claims as administrative expenses pursuant to 11 U.S.C. \u00a7 503. Under \u00a7 503, administrative expenses include the actual, necessary costs and expenses of preserving the estate, including those incurred by a creditor. To qualify as an actual and necessary expense, the expenditure must benefit the estate as a whole. In re Jartran, Inc., 886 F.2d 859, 871 (7th Cir.1989). Administrative expense claims should be narrowly construed in order to keep administrative expenses at a minimum and thus preserve the estate for the benefit of all creditors. In re Federated Dept. Stores, Inc., 270 F.3d 994 (6th Cir.2001). The administrative claimant has the burden of proving entitlement to an administrative expense by the preponderance of the evidence and must demonstrate that the benefit is more than speculative or a potential benefit. In re HNRC Dissolution Co., 343 B.R. 839 (Bankr.E.D.Ky.2006).\nBob Thompson is a personal friend and the former boyfriend of the Debtor. He was also the Debtor's ad hoc employer and not a creditor of the estate. Thompson was not a joint debtor on this property. He had no ownership interest in the *472 real estate. The payments made by Bob Thompson Construction Company were voluntary payments made post-petition which prevented another creditor from foreclosing on estate property. While the payments were actual, there was no evidence that they were necessary as defined under 11 U.S.C. \u00a7 503.\nThe Trustee contends that he was in favor of a foreclosure sale and that the payments made by Thompson did not benefit the estate. Instead, according to the Trustee, Debtor attempted to gain access to the sale proceeds at closing and would have dissipated the proceeds before Trustee could administer this asset. Given Debtor's prior actions in this case, the Court agrees that the payments did not benefit the estate.\nAdditionally, on June 9, 2008, following an evidentiary hearing, this Court ruled that the sale proceeds from the real estate were property of the estate pursuant to 11 U.S.C. \u00a7 541. The Court specifically stated in that Order that the Trustee was to administer and pay claims in accordance with the distribution scheme of the United States Bankruptcy Code. Upon full administration of the estate assets any remaining claims to any excess sale proceeds were to be resolved by the Greene Circuit Court. Since this Court finds that the claims of Bob Thompson Construction Company are not claims entitled to administrative priority, these issues are to be resolved by the Greene Circuit Court following full administration of this estate by the Trustee.\nIT IS THEREFORE ORDERED, ADJUDGED AND DECREED that the two Motions to Allow Claims of Bob Thompson Construction Company, be and hereby are, DENIED.\n"} -{"text": "\n350 N.W.2d 563 (1984)\n217 Neb. 719\nSTATE of Nebraska, Appellee,\nv.\nAlfred S. LOPEZ, Appellant.\nNo. 83-730.\nSupreme Court of Nebraska.\nJune 22, 1984.\n*564 Kent E. Florom, Lincoln County Public Defender, North Platte, for appellant.\nPaul L. Douglas, Atty. Gen., and Sharon M. Lindgren, Asst. Atty. Gen., Lincoln, for appellee.\nKRIVOSHA, C.J., BOSLAUGH, WHITE, HASTINGS, CAPORALE, SHANAHAN, and GRANT, JJ.\n*565 WHITE, Justice.\nThis is the second appearance of this case in this court. In State v. Lopez, 215 Neb. 65, 337 N.W.2d 130 (1983), we affirmed the conviction of Lopez for the offenses of second degree sexual assault, Neb.Rev.Stat. \u00a7 28-320(1)(a) (Reissue 1979), and of second degree assault, Neb. Rev.Stat. \u00a7 28-309(1) (Reissue 1979). However, we determined that the flat sentence of 10 years was an improper application of the enhanced penalty statute, Neb. Rev.Stat. \u00a7 29-2221 (Reissue 1979), and remanded for resentencing. See State v. Ellis, 214 Neb. 172, 333 N.W.2d 391 (1983). On remand, the district court sentenced Lopez to a term of from 5 to 15 years for the sexual assault and a consecutive term of from 1 to 3 years for second degree assault.\nLopez appeals, and assigns a single error: \"The District Court of Lincoln County, Nebraska, erred in resentencing the Appellant to a potentially longer term of imprisonment.\" (Emphasis supplied.) Brief for Appellant at 2.\nThe propriety of imposing an increased sentence after an appeal has been considered by this court recently in State v. Beach, 215 Neb. 213, 221-22, 337 N.W.2d 772, 777-78 (1983), where we said:\nUnder the decision in [North Carolina v.] Pearce [395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656] it is clearly improper for a trial court to sentence a defendant to a greater sentence after appeal and retrial simply because the defendant exercised his right to appeal.\nIt must be pointed out that the Court in Pearce also stated: \"We hold, therefore, that neither the double jeopardy provision nor the Equal Protection Clause imposes an absolute bar to a more severe sentence upon reconviction. A trial judge is not constitutionally precluded, in other words, from imposing a new sentence, whether greater or less than the original sentence, in the light of events subsequent to the first trial that may have thrown new light upon the defendant's `life, health, habits, conduct, and mental and moral propensities.' Williams v. New York, 337 U.S. 241, 245 [69 S.Ct. 1079, 93 L.Ed. 1337 (1949)]. Such information may come to the judge's attention from evidence adduced at the second trial itself, from a new presentence investigation, from the defendant's prison record, or possibly from other sources.\" (Emphasis supplied.) Id. at 723 [89 S.Ct. at 2079].\nAnd, finally: \"In order to assure the absence of such a motivation, we have concluded that whenever a judge imposes a more severe sentence upon a defendant after a new trial, the reasons for his doing so must affirmatively appear. Those reasons must be based upon objective information concerning identifiable conduct on the part of the defendant occurring after the time of the original sentencing proceeding. And the factual data upon which the increased sentence is based must be made part of the record, so that the constitutional legitimacy of the increased sentence may be fully reviewed on appeal.\" Id. at 726 [89 S.Ct. at 2081].\nIt seems, by the decision in Pearce, the trial court in its discretion could increase the defendant's sentence without violating his due process rights, if such action was justified by reasons affirmatively appearing in the record.\nIt is apparent from the record, and not disputed by the parties, that no new or additional information concerning either the facts of the offenses or adverse information concerning other past offensive conduct was presented to the trial judge at the resentencing hearing. Therefore, under State v. Beach, supra, the court erred when resentencing Lopez if the term to which he was resentenced was longer than that originally imposed. We conclude that it was, and remand for the imposition of a new sentence.\nWe first observe that \u00a7 29-2221, under which Lopez was originally sentenced, does not create a new offense, but is designed to enhance penalties for repetitive criminal behavior. Davis v. O'Grady, 137 Neb. 708, *566 291 N.W. 82 (1940). We further observe that under \u00a7 29-2221 the range of sentence allowed is \"not less than ten nor more than sixty years.\" The difficulty arises due to the fact that Lopez was convicted of two felonies, second degree sexual assault and second degree assault, but he was sentenced to only one 10-year term of imprisonment. The trial court's order does not detail to which of the two felony convictions the sentence applies. We assume that the trial court sentenced Lopez to 10 years on each count, with the sentences to run concurrently. As such, the 10-year term originally imposed on Lopez constituted both the minimum and maximum terms for the purposes of parole eligibility and mandatory release date. Neb.Rev.Stat. \u00a7 83-1,107 (Reissue 1981).\nUnder the consecutive sentences imposed by the trial court upon resentencing, the maximum term is 18 years. This is an increased sentence, prohibited by State v. Beach, supra, and must be set aside. The sentences are vacated and the cause is remanded to the district court for the imposition of any lawful sentence wherein the maximum term does not exceed 10 years, with credit for time served awaiting or serving the previous sentences.\nREMANDED WITH DIRECTIONS.\n"} -{"text": "\n2 So.3d 939 (2006)\nVICK ANTHONY GEORGE\nv.\nSTATE.\nNo. CR-05-1793.\nCourt of Criminal Appeals of Alabama.\nOctober 27, 2006.\nDecision of the Alabama Court of Criminal Appeal without opinion. Affirmed.\n"} -{"text": "\n214 Ga. 478 (1958)\n105 S.E.2d 457\nWILLIAMS\nv.\nKWIK SHAKE DISPENSER MANUFACTURING COMPANY.\n20207.\nSupreme Court of Georgia.\nSubmitted September 9, 1958.\nDecided October 10, 1958.\nHowell C. Ravan, for plaintiff in error.\nHicks & Henderson, contra.\nHEAD, Justice.\nThe bill of exceptions assigns as error a judgment of the court sustaining the demurrers of the plaintiff to the defendant's answer and cross-action. Held: *479 The dismissal of a cross-bill or answer is not such a final disposition of a cause as may be reviewed in this court. Code \u00a7 6-701, as amended by Ga. L. 1957, pp. 229-232; Knights of the Ku Klux Klan v. Terrell, 155 Ga. 374 (116 S. E. 793); White v. Chisolm, 160 Ga. 177 (127 S. E. 140); Byrd v. Equitable Life Assurance Society, 184 Ga. 178 (190 S. E. 584); Darden v. Roberts, 193 Ga. 637 (19 S. E. 2d 270); Sanders v. Sanders, 212 Ga. 244 (91 S. E. 2d 604); Bowman v. Poole, 212 Ga. 697 (95 S. E. 2d 375). The amendment to the rules of practice and procedure, approved January 19, 1957 (Ga. L. 1957, pp. 224-248), did not repeal or modify the rule that the dismissal of a cross-action on demurrer is not such a final judgment as may be reviewed by direct bill of exceptions.\nWrit of error dismissed. All the Justices concur.\n"} -{"text": " SUPREME COURT OF THE STATE OF NEW YORK\n Appellate Division, Fourth Judicial Department\n\n1012\nCAF 12-01062\nPRESENT: SMITH, J.P., FAHEY, SCONIERS, VALENTINO, AND WHALEN, JJ.\n\n\nIN THE MATTER OF STARR L. ROSHIA,\nPETITIONER-RESPONDENT,\n\n V MEMORANDUM AND ORDER\n\nCHRISTOPHER J. THIEL, RESPONDENT-APPELLANT.\n(APPEAL NO. 2.)\n\n\nJENNIFER M. LORENZ, LANCASTER, FOR RESPONDENT-APPELLANT.\n\nMICHAEL A. SIRAGUSA, COUNTY ATTORNEY, BUFFALO (KRISTEN M. MARICLE OF\nCOUNSEL), FOR PETITIONER-RESPONDENT.\n\n\n Appeal from an order of the Family Court, Erie County (Kevin M.\nCarter, J.), entered May 16, 2012 in a proceeding pursuant to Family\nCourt Act article 4. The order confirmed the finding of the Support\nMagistrate that respondent willfully failed to obey an order of the\nCourt.\n\n It is hereby ORDERED that the order so appealed from is\nunanimously affirmed without costs.\n\n Same Memorandum as in Matter of Roshia v Thiel ([appeal No. 1]\n___ AD3d ___ [Oct. 4, 2013).\n\n\n\n\nEntered: October 4, 2013 Frances E. Cafarell\n Clerk of the Court\n\f"} -{"text": "\n775 N.W.2d 797 (2009)\nPEOPLE of the State of Michigan, Plaintiff-Appellee,\nv.\nJacob TRAKHTENBERG, Defendant-Appellant.\nDocket No. 138875. COA No. 290336.\nSupreme Court of Michigan.\nDecember 30, 2009.\n\nOrder\nOn order of the Court, the application for leave to appeal the March 20, 2009 order of the Court of Appeals is considered. We DIRECT the Oakland County Prosecuting Attorney to answer the application for leave to appeal within 28 days after the date of this order. The motion to withdraw as counsel and the application for leave to appeal remain pending.\n"} -{"text": "\n829 F.Supp. 420 (1993)\nEDMONDSON AND GALLAGHER, et al., Plaintiffs\nv.\nALBAN TOWERS TENANTS ASSOCIATION, et al., Defendants.\nCiv. A. No. 93-1090.\nUnited States District Court, District of Columbia.\nJuly 30, 1993.\n*421 David John Branson, Daniel J. Culhane, Kaye, Schlor, Fierman, Hays & Handler, Washington, DC, for plaintiffs.\nJames B. Rosenthal, Arent, Fox, Kintner, Plotkin & Kahn, Washington, DC, for defendants.\n\nMEMORANDUM OPINION\nSPORKIN, District Judge.\nThis action is before the Court after being removed from the District of Columbia Superior Court. The complaint was brought by Edmondson & Gallagher (\"E & G\"), a Virginia real estate company, against the Alban Towers Tenants Association (\"ATTA\"), Vera *422 Ruser, who is President of ATTA, and the partners of the law firm Foley, Hoag & Eliot (\"Foley\"). E & G alleges that Defendants wrongfully prevented it from buying the Alban Towers apartment building in Washington, D.C., through a carefully orchestrated scheme spanning almost three years.\nE & G's claims arise from its contract to buy the Alban Towers apartment building from Georgetown University. Under the District of Columbia Rental Housing Conversion and Sale Act, \u00a7\u00a7 45-1601 et seq. (the \"Act\"), that contract was subject to ATTA's right of first refusal. ATTA attempted to exercise its right but failed to obtain the necessary financing. Georgetown sued ATTA in the Superior Court of the District of Columbia to clear title to the project and E & G intervened in Georgetown's action against ATTA. The Superior Court order was decisively determined in favor of Georgetown. On appeal, that decision was affirmed. Despite the favorable court decision, the \"downturn\" in the economy between the original contract and the favorable determination in court made it impossible for E & G to obtain financing and complete its purchase of Alban Towers.\nIn this suit, E & G seeks to recover the profits it claims it lost because its contract with Georgetown fell through. E & G alleges (1) tortious interference with contractual relations, (2) two counts of abuse of process, (3) malicious prosecution, (4) violations of the federal Racketeer Influenced Corrupt Organization Act (\"RICO\"), 18 U.S.C. \u00a7 1962 et seq., and (5) conspiracy to commit RICO violations. E & G seeks compensatory damages of $6,000,000 and punitive damages of $20,000,000.\nBefore the Court is Defendants' Motion to Dismiss, or in the Alternative, for Summary Judgment. On July 21, 1993, a hearing was held on Defendants' motion. For the reasons stated below, Defendants' motion will be granted.\n\nI. FACTUAL BACKGROUND\nIn 1986, E & G entered into a contract with Alban Towers Limited Partnership (\"Georgetown\")[1] to purchase Alban Towers, an apartment building in the District of Columbia. The contract acknowledged that under the D.C. Rental Housing Conversion and Sale Act the tenants had right of first refusal against any prospective purchaser of Alban Towers.\nThat Act provides that \"[b]efore an owner of a housing accommodation may sell the accommodation ... the owner shall give the tenant an opportunity to purchase the accommodation at a price and terms which represent a bona fide offer of sale.\" D.C.Code \u00a7 45-1631(a). The purpose of this ordinance is to give tenants some rights to continue living in their apartments when the owners determine they want to convert a rental project to condominium housing. Under the Act, tenants are entitled to at least 120 days to negotiate a contract of sale, D.C.Code \u00a7 45-1640(2), and a 15-day period in which to exercise a right of first refusal, D.C.Code \u00a7 45-1637.\nAfter receiving Georgetown's offer of sale, the tenants of Alban Towers incorporated as the Alban Towers Tenants Association for the purpose of purchasing Alban Towers. ATTA retained Richard Gross, a partner in the law firm of Foley, Hoag & Eliot, to assist in negotiating and financing the deal.[2] ATTA also chose a development company, HDS, Inc., to devise a plan for redeveloping Alban Towers, obtain financing for the redevelopment, and secure the $650,000 deposit required by the proposed contract ultimately agreed upon between Georgetown and ATTA.\nThe negotiation period for Alban Towers began on August 12, 1986, and ended on December 30, 1986. The final draft of the proposed contract between ATTA and Georgetown provided that:\n\"[n]ot later than 5:00 p.m. on Thursday, December 30, 1986, purchaser shall deliver to seller an irrevocable letter of credit in *423 the amount of six hundred and fifty thousand dollars ... or shall deposit with Real Title Company, Inc. the sum of six hundred and fifty thousand dollars in cash, as an earnest money deposit with respect to the property[.]\"[3]\nSometime between the afternoon of December 30 and the close of business on December 31, 1986, a deposit check for $650,000 was delivered on behalf of ATTA to Real Title Company, Inc. for Georgetown. Because the check was unfunded, it did not satisfy ATTA's obligation under its proposed contract with Georgetown. Georgetown, informed of this development, treated the negotiations with the ATTA as over.\nOn January 5, 1987, ATTA, through Mr. Gross, filed a Notice of Exercise of Rights of First Refusal with the District of Columbia Recorder of Deeds. This had the effect of clouding title on the project. On February 2, 1987, Georgetown filed a complaint in Superior Court of the District of Columbia seeking a declaration that Georgetown be permitted to sell Alban Towers to E & G. On February 6, 1987, the Recorder of Deeds expunged ATTA's Notice of Exercise of Rights of First Refusal. E & G intervened in Georgetown's suit against ATTA, seeking a declaratory judgment and asserting claims against ATTA for tortious interference with contractual relations and tortious interference with business relations.\nOn October 6, 1988, Judge Henry Greene of the D.C. Superior Court granted summary judgment in favor of Georgetown and partial summary judgment in favor of E & G,[4] and held that those parties were \"free to close on their third-party contract for the purchase of Alban Towers.\" Alban Towers Limited Partnership v. Alban Towers Tenants Association, No. 87-822, slip op. at 18. ATTA moved for reconsideration which Judge Greene denied. ATTA then appealed. On December 1, 1989, the Court of Appeals affirmed Judge Greene's order, Alban Towers Tenants Association v. Alban Towers Limited Partnership, No. 88-1488, slip op. at 2 (D.C.Ct.App.). By the time the Court of Appeals issued its opinion in December 1989, the real estate market had \"turned down\" and E & G could no longer obtain financing.\nThree years later, in December 1992, with new counsel, Plaintiff brought this action against ATTA, Ruser and Gross in the Superior Court of the District of Columbia, alleging tortious interference with contractual relations and abuse of process. The complaint was removed to this Court in June 1993 after Plaintiff amended its complaint, adding an additional claim for abuse of process and two counts under the Federal Racketeer Influenced and Corrupt Organizations Act (\"RICO\"), 18 U.S.C. \u00a7\u00a7 1962 et seq.\n\nII. THE RICO CLAIMS\nE & G alleges that ATTA, Vera Ruser and Richard Gross engaged in an elaborate scheme of bribery and deceit \"which was intended to delay or prevent the sale of Alban Towers to extort money from Edmondson & Gallagher and Georgetown.\"[5] Plaintiff contends that this \"scheme\" constituted a RICO violation under 18 U.S.C. \u00a7 1962(c).\nRICO provides that:\nIt shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.\n18 U.S.C. \u00a7 1962(c).\nIn order to establish a pattern of racketeering activity under RICO, a plaintiff \"must show that the racketeering predicates are related and that they amount to or pose a threat of continued criminal activity.\" H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 239, 109 S.Ct. 2893, 2900, 106 L.Ed.2d 195 (1989) (emphasis in original).\n*424 E & G lists a variety of predicate acts spanning approximately three years, including the following: preventing the sale and rehabilitation of commercial real property worth over $16,000,000; attempting to defraud Georgetown by delivering a bad check; attempting to commit extortion by improperly clouding title to Alban Towers; using interstate commerce facilities for extortion; submitting fraudulent affidavits to the court; bribing witnesses and deliberately concealing materials sought to be discovered in a lawsuit. Plaintiff alleges that these acts, taken together, constitute a scheme of racketeering activity in violation of RICO.\nThe Court finds that, under the circumstances of this case, these alleged acts do not demonstrate a pattern of racketeering. Rather, what is alleged is a single scheme, directed at a single victim, and resulting in a single, distinct injury \u0097 namely, the alleged interference with the contractual rights of E & G vis a vis Georgetown. This is insufficient to state a claim under RICO. See, e.g., Sil-Flo, Inc. v. SFHC, Inc., 917 F.2d 1507, 1516 (10th Cir.1990) (No claim where single scheme to accomplish \"one discrete goal\" directed at one individual with no potential to extend to other persons or entities).\nAlthough RICO is an important law which has done much good to combat organized crime, too many private litigants have distorted the law in an effort to reach activities RICO was never intended to address. It is a blatant misapplication of RICO's treble damages remedy to seek to reach ordinary commercial activities such as that alleged by E & G. See, e.g., Menasco, Inc. v. Wasserman, 886 F.2d 681, 684 (4th Cir.1989), Pyramid Sec. Ltd. v. International Bank, 726 F.Supp. 1377, 1385 n. 8 (D.D.C.1989), aff'd, 924 F.2d 1114 (D.C.Cir.), cert. denied, ___ U.S. ___, 112 S.Ct. 85, 116 L.Ed.2d 57 (1991).[6] As the Ninth Circuit has observed, \"RICO was intended to combat organized crime, not to provide a federal cause of action and treble damages to every tort plaintiff.\" Oscar v. University Students Co-Op. Ass'n, 965 F.2d 783, 786 (9th Cir.) cert. denied, ___ U.S. ___, 113 S.Ct. 655, 121 L.Ed.2d 581 (1992).\nAlthough the alleged predicate acts in this case spanned approximately three years, from early 1987 until late 1989, duration alone is not enough to demonstrate continuity for a RICO claim. This time period reflects the litigation process between Georgetown, E & G and ATTA. Alleging multiple predicate acts which took place over a three-year period and which were part of a single litigation process will not magically transform what at best are state tort claims into a federal RICO action.[7]\nBased on the facts of this case, it is clear there is no basis for a RICO claim. ATTA asserted its statutory right of first refusal in the summer of 1986. Between August and December 1986 ATTA, primarily through Richard Gross, conducted negotiations with Georgetown. When the Georgetown-ATTA negotiations failed, Georgetown sought declaratory relief to clear title. E & G intervened in the suit and ATTA filed a counterclaim against Georgetown. The litigation ended in December 1989 when the D.C. Court of Appeals affirmed the Superior Court's order in favor of Georgetown. Even if it could be established that the Defendants devised a \"scheme,\" it would have been to accomplish one discrete goal, not a conspiracy in violation of RICO.\nReal estate developers face many risks when they proceed with condominium conversions. *425 That tenants may choose to exercise rights conferred to them under consumer protection laws must be factored into the developers' decisions. For tenants to pursue these rights is entirely foreseeable and it would defeat these worthwhile consumer protection laws to permit disappointed developers to assert RICO claims against tenants who aggressively seek to exercise these important rights conferred upon them. RICO simply has no office in cases of this kind.\n\nIII. COMMON LAW CLAIMS\nWhat remains, then, are Plaintiff's claims for tortious interference with contractual relations, abuse of process and malicious prosecution.\nAs with respect to the RICO allegations, Plaintiff's common law claims are based on the attempts of ATTA, Vera Ruser, and Richard Gross to exercise the tenants' rights to purchase Alban Towers through the ensuing three-year litigation.\nThough unsuccessful, the tenants' attempt to purchase Alban Towers was through rights conferred under D.C. law. There is no suggestion that when ATTA entered into negotiations with Georgetown to purchase Alban Towers it did not intend to complete the purchase. The crux of Plaintiff's complaint is that the deposit made on ATTA's behalf to meet its contractual rights with Georgetown had no funds behind it. While not salutary, this act alone does not give rise to the multiple causes of action asserted by E & G. Nor do Defendants' subsequent efforts to defend themselves and assert a counterclaim in the litigation initiated by Georgetown provide a basis for Plaintiff's common law claims.[8]\nFirst, the Plaintiff is barred from pursuing these claims at this juncture under the doctrine of laches and in the interest of finality of judgment. The gravamen of Plaintiff's common law claims is that ATTA had no legitimate basis on which to defend the first lawsuit or assert counterclaims and that it did so only to prevent the E & G-Georgetown deal from proceeding.[9] If ATTA's defense was as frivolous as Plaintiff suggests, E & G should have pursued its claims in that suit. Litigation must come to an end. Should this Court's disposition of Plaintiff's RICO claim give rise to another lawsuit alleging that Plaintiff's claim was frivolous? If the answer is yes, then of course this litigation would continue for years to come and could possibly spawn further litigation. Without particularized and discrete circumstances, parties cannot be permitted to piggyback one lawsuit on another in an endless series of litigation. Such \"parasitic\" lawsuits must be foreclosed.\nThere is no reason for Plaintiff to be asserting its common law claims in the instant lawsuit. It knew of its rights at the time of the original action initiated by Georgetown against ATTA. Indeed, E & G filed third-party claims against ATTA, specifically asserting tortious interference with its contractual and business relations. Since Judge Greene's decision did not address those claims, Plaintiff had the opportunity to subsequently pursue them in that litigation. Plaintiff deliberately chose not to go forward with that litigation. Rather, Plaintiff attempted to negotiate a cash settlement with ATTA so that it could proceed with its development. Indeed, Plaintiff offered ATTA $1.6 million to give up its rights in the project. It is ironic that if ATTA had accepted Plaintiff's *426 offer of $1.6 million, E & G would not now be suing Defendants for $26 million.\nThere is little excuse in E & G's failure to pursue its claims in the first lawsuit. E & G made a strategic business decision to negotiate rather than pursue its tort claims in court. That E & G's strategy failed does not give it the right to reassert the same tort claims in a second suit some six years later.\nPlaintiff's claims are also suspect because of Plaintiff's lack of privity with the Defendants. Georgetown is the real party in interest in the case. The District of Columbia's Rental Housing Conversion and Sale Act provides that a tenant organization shall have at least 120 days to negotiate a contract with a building owner, D.C.Code \u00a7 45-1631. If Georgetown wished to extend the negotiation period, it could have done so. E & G had no rights in the negotiation between Georgetown and ATTA and could not have compelled Georgetown to terminate negotiations with ATTA. Thus, if any party has suffered clear, direct injury in the case, it is Georgetown. Yet Georgetown has chosen not to file suit and there is nothing in the record indicating that Georgetown has assigned any of its rights to E & G.\nThe ensuing lawsuit between Georgetown and ATTA did not make E & G a third party beneficiary of the outcome of that lawsuit. Since E & G intervened in the lawsuit, it is difficult to understand how E & G now has the right to assert tort claims based on the original lawsuit. In short, E & G is now impermissibly attempting to exercise rights it never had and was never assigned.[10]\n\nIV. NOERR-PENNINGTON\nDefendants actions in defending their rights are protected by the First Amendment to the U.S. Constitution which protects the rights of citizens to petition the government to seek redress of grievances. Thus, a person cannot be held liable as a result of his or her filing a good-faith lawsuit or administrative claim or otherwise seeking governmental redress. See Eastern R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961); accord, Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965). This principle has become known as the Noerr-Pennington Doctrine.\nWhile this right was first recognized by the Supreme Court in the context of antitrust litigation, it has been extended beyond that context. \"[I]f a person has a protected right to bring an objectively-based antitrust claim against a competitor, the same protection must be afforded to others who bring other such objectively-based claims and allegations before a government agency or court.\" Whelen v. Abell, 827 F.Supp. 801, 803 (D.D.C.1993). See also Havoco of America, Ltd. v. Hollobow, 702 F.2d 643, 649 (7th Cir.1983).\nIn addition, while Noerr-Pennington is generally applied to protect plaintiffs who have petitioned the government for redress, there is no reason the doctrine should not be extended to protect a party who attempts to exercise a statutory right and then must defend that right in subsequent litigation filed against it.\nThe immunity provided under Noerr-Pennington is qualified by a so-called \"sham exception.\" Under the sham exception, otherwise protected activity does not qualify for Noerr-Pennington immunity \"if it is a mere sham to cover an attempt to interfere directly with the business relationships of a competitor.\" Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, ___ U.S. ___, ___, 113 S.Ct. 1920, 1928, 123 L.Ed.2d 611 (1993), Whelen v. Abell, 827 F.Supp. 801, 803 (D.D.C.1993).\nIn Professional Real Estate Investors, the Supreme Court articulated a two-prong test to determine whether the \"sham exception\" applies:\nFirst, the lawsuit must be objectively baseless in the sense that no reasonable litigant could realistically expect success on the *427 merits. If an objective litigant could conclude that the suit is reasonably calculated to elicit a favorable outcome, the suit is immunized ... Only if challenged litigation is objectively meritless may a court examine the litigant's subjective motivation. Under this second part of our definition of sham, the court should focus on whether the baseless lawsuit conceals an attempt to interfere directly with the business relationships of a competitor through the use of the governmental process \u0097 as opposed to the outcome of that process \u0097 as an anticompetitive weapon.\nProfessional Real Estate Investors, ___ U.S. at ___, 113 S.Ct. at 1928.\nIn this case, Defendants pursued their right to purchase Alban Towers. When Georgetown sued to clear title, ATTA defended itself. Though they may have made mistakes during the litigation, the tenants had the right to defend the suit in pursuit of their intent to purchase the building. This Court does not find that ATTA's counterclaim against Georgetown can in anyway be considered a \"sham action\" against Plaintiff, who was not a named party in the counterclaim.\n\nV. CONCLUSION\nWhile the Court is ruling in favor of Defendants, the behavior of ATTA and its counsel is far from exemplary. Judge Greene found that ATTA tendered an unfunded check to Georgetown. Alban Towers Limited Partnership v. Alban Towers Tenants Association, No. 87-822, (D.C. Oct. 7, 1988). In addition, some of Plaintiff's allegations about the conduct of Mr. Gross are troublesome. In rendering its decision today, this Court is in no way condoning such behavior if the allegations are in fact true.\nHowever, to permit this lawsuit to proceed would be a severe blow to the rights created by the District of Columbia Rental Housing Conversion and Sale Act of 1980, the purpose of which is to strengthen \"the legal rights of tenants or tenant organizations to the maximum extent permissible under the law.\" D.C.Code \u00a7 45-1661. Tenants' associations seeking to exercise the rights provided by the Act will undoubtedly falter and misstep. Such groups often are put together quickly on a reactive ad hoc basis by tenants unsophisticated in commercial real estate transactions. These highly vulnerable persons should not be punished if they err or are represented by overly zealous counsel. Whether or not E & G were ultimately successful, if this suit is permitted to go forward, it will have a chilling effect on future tenants associations' pursuit of their rights. Indeed, this case resembles a so-called \"SLAPP\" \u0097 \"strategic lawsuits against public participation\" \u0097 suit in which parties attempt to use litigation as a weapon to punish community activists for exercising their rights.[11]\nE & G, if it could meet the appropriate standing requirements, had ample opportunity to challenge the arguments and conduct of ATTA during the first litigation filed by Georgetown in 1987. To permit E & G to pursue this action where it seeks $26 million against a tenants association for exercising rights conferred by law would ironically be a greater abuse of process than the one Plaintiff claims it has been subjected to in this case. Accordingly, Defendants' Motion to Dismiss is granted. An appropriate order accompanies this opinion.\n\nORDER\nPresently before the Court is Defendants' Motion to Dismiss, or in the Alternative, for Summary Judgement. Upon consideration of Defendants' motion and Plaintiff's opposition thereto, and after conducting a hearing on the matter on July 21, 1993, for the reasons stated in the foregoing Memorandum Opinion, it is this 30 day of July, 1993 hereby\nORDERED that Defendants' Motion is granted. It is\nFURTHER ORDERED that this matter is dismissed with prejudice.\nNOTES\n[1] The real party in interest is Georgetown University which owns Alban Towers.\n[2] Approximately sixty partners of Foley have been named as individual defendants by E & G. However, only the activity of Mr. Gross is at issue in this case.\n[3] Alban Towers Limited Partnership v. Alban Towers Tenants Association, No. 87-822, slip op. at 8 (D.C.Super.Ct. Oct. 7, 1988).\n[4] Judge Greene's decision did not address the tort claims asserted by E & G.\n[5] Plaintiff's First Amended Complaint, \u00b6 89.\n[6] See also Committee to defend the United States Constitution v. Moon, 776 F.Supp. 568 (D.D.C. 1991) (alleged scheme to achieve one instance of economic injury would not amount to a RICO claim).\n\nFurthermore, Congressional intent indicates that RICO remedies are available only in relation to activities having some association with \"racketeering\" as that term is used in ordinary discourse. Exeter Towers Associates v. Bowditch, 604 F.Supp. 1547 (D.Mass.1985). See also HMK Corp. v. Walsey, 828 F.2d 1071, 1075 (4th Cir. 1987) cert. denied, 484 U.S. 1009, 108 S.Ct. 706, 98 L.Ed.2d 657 (1988) (\"The existence of a pattern ... depends on context, particularly on the nature of the underlying offenses. Attention to the nature of the underlying offenses is necessary because the heightened civil and criminal penalties of RICO are reserved for schemes whose scope and persistence set them above the routine.\")\n[7] See HMK, 828 F.2d at 1075 (no RICO claim though alleged fraudulent scheme spanned four years).\n[8] In its counterclaims, ATTA sought declaratory and injunctive relief which would prevent Georgetown from selling Alban Towers to E & G and allow ATTA to purchase the building. Additionally, ATTA sought monetary damages from Georgetown but not from E & G.\n[9] E & G also claims that Defendants tendered the bad check on December 31, 1986 \u0097 one day after the December 30 deadline set forth in ATTA's proposed contract with Georgetown. E & G further alleges that Defendants tried to cover up the late tender and that their actions to do so demonstrate bad faith and illicit motivation behind ATTA's actions.\n\nEven if true, Plaintiff's allegations in this regard provide scant evidence that ATTA's efforts to purchase Alban Towers were not in earnest. Moreover, Judge Greene did not find the timing issue to be of any moment; his decision turned on the fact that the check tendered by ATTA was unfunded, not on when the bad check was tendered. Apparently, Georgetown's rejection of the deal and termination of the negotiations with ATTA were also based on the insufficiency of the funds, not on the timing of the check's delivery.\n[10] To permit a contractor to assert rights such as Plaintiff pursues in this case would also allow subcontractors to pursue their lost expectations. The D.C. law would certainly become a dead letter if tenants could be made subject to the contingent and speculative contract expectancies of such remote parties.\n[11] This case would not be the first time a real estate developer filed such a suit against an individual or organization who opposed the developer's projects. See e.g., Westfield Partners, Ltd. v. Hogan, 740 F.Supp. 523, 525 (N.D.Ill.1990).\n"} -{"text": "\n898 P.2d 263 (1995)\nShelley L. RUSSELL, Plaintiff and Appellant,\nv.\nThe STANDARD CORPORATION, The Salt Lake Tribune, and The Associated Press, Defendants and Appellee.\nNo. 940378.\nSupreme Court of Utah.\nJuly 6, 1995.\nB. Ray Zoll, Salt Lake City, for appellant.\nRandy L. Dryer, David W. Zimmerman, Salt Lake City, for appellee.\nZIMMERMAN, Chief Justice:\nShelley Russell appeals the dismissal of her claim for libel against The Standard Corporation (\"Standard\") on the ground that her claim is barred by the applicable statute of limitations. We affirm.\nThe material facts in this case are not disputed. On November 26, 1992, Standard published an article in the Ogden Standard Examiner (\"Standard Examiner\"), an Ogden newspaper with approximately 63,000 subscribers. That same day, Standard electronically transmitted the article to The Associated Press news organization. The Associated Press then distributed the article to its Utah members, including The Salt Lake *264 Tribune, which published the article on November 29, 1992.\nIn November of 1993, Russell filed this libel action against The Associated Press and The Salt Lake Tribune, alleging that the article contained defamatory statements against her.[1] On February 7, 1994, after learning that Standard had originated the article, Russell amended her complaint to add Standard as a defendant. Shortly thereafter, Standard moved to dismiss pursuant to rule 12(b)(6) of the Utah Rules of Civil Procedure. The district court granted Standard's motion, concluding that Russell's claim against Standard was time-barred under Utah Code Ann. \u00a7 78-12-29(4), which provides a one-year statute of limitations for libel actions. Russell appeals.\n\"A rule 12(b)(6) motion to dismiss admits the facts alleged in the complaint but challenges the plaintiff's right to relief based on those facts.\" St. Benedict's Dev. Co. v. St. Benedict's Hosp., 811 P.2d 194, 196 (Utah 1991). In determining whether a trial court properly granted a motion to dismiss under rule 12(b)(6), we accept the factual allegations in the complaint as true and consider them and all reasonable inferences to be drawn from them in a light most favorable to the plaintiff. Colman v. Utah State Land Bd., 795 P.2d 622, 624 (Utah 1990); Lowe v. Sorenson Research Co., 779 P.2d 668, 669 (Utah 1989). \"Because the propriety of a 12(b)(6) dismissal is a question of law, we give the trial court's ruling no deference and review it under a correctness standard.\" St. Benedict's, 811 P.2d at 196 (citing Lowe, 779 P.2d at 669; Kimball v. Campbell, 699 P.2d 714, 716 (Utah 1985)).\nCiting Allen v. Ortez, 802 P.2d 1307 (Utah 1990), Russell contends that the running of the statute of limitations was tolled until she discovered or reasonably could have discovered that Standard was the source of the article. The plaintiffs in Allen brought a libel action arising out of, inter alia, a letter directed to the mayor of Murray City. Id. at 1308-09. The defendants argued that the plaintiffs' action was time-barred because the letter was sent more than one year before the action was commenced. Id. at 1313. We disagreed, holding:\n[I]n libel cases, the one-year period of section 78-12-29(4) does not begin to run until the libel is known or is reasonably discoverable by the plaintiff. Whether plaintiffs knew or should have known of the letter to the mayor is a question of fact to be determined on remand.\nId. at 1314. According to Allen, Russell asserts, this case should be remanded for a determination of the factual question of when she first learned or could reasonably have discovered that the article originated with Standard.\nIn response, Standard argues that the discovery rule does not operate to toll the running of the statute of limitations unless the alleged defamation is inherently undiscoverable by the plaintiff, such as that arising out of a private communication like the letter at issue in Allen. Because Russell's defamation claim arose out of a newspaper article, Standard contends, the alleged defamation was not inherently undiscoverable and therefore the discovery rule should not apply.\nWe decline any suggestion by Standard that we adopt a test different than that announced in Allen. However, we think that under Allen's standard, the complained-of statements were \"reasonably discoverable,\" as a matter of law, on the date when they were first published in the Standard Examiner. We stand by our statement in Allen that \"potential plaintiffs should not be barred from suit if they did not know and could not reasonably have known of the underlying facts giving rise to a cause of action,\" but we conclude that an alleged defamation is reasonably discoverable, as a matter of law, at the time it is first published and disseminated in a newspaper which is widely available to the public. See Tom Olesker's Exciting World of Fashion, Inc. v. Dun & Bradstreet, Inc., 61 Ill.2d 129, 334 N.E.2d 160, 164 (1975) (\"In claimed libels involving, for example, magazines, books, newspapers, and radio and television programs, the publication has been for public attention and knowledge and the *265 person commented on, if only in his role as a member of the public, has had access to such published information.\"); accord Fleury v. Harper & Row, Publishers, Inc., 698 F.2d 1022, 1028 & n. 4 (9th Cir.), cert. denied, 464 U.S. 846, 104 S.Ct. 149, 78 L.Ed.2d 139 (1983); McGuiness v. Motor Trend Magazine, 129 Cal.App.3d 59, 180 Cal.Rptr. 784, 786 & n. 2 (1982). Any other rule would unduly prolong the exposure of the media to libel suits by rewarding the inattentive plaintiff. Because the article at issue in this case was reasonably discoverable as a matter of law as soon as it was published and disseminated in the Standard Examiner, the discovery rule did not toll the running of the statute of limitations.\nRussell also contends that her claim against Standard is not time-barred because her amended complaint in which she added Standard as a defendant relates back to the date her original complaint was filed, which was within the one-year period of limitations following Standard's publication of the article in the Standard Examiner. Rule 15(c) of the Utah Rules of Civil Procedure provides, \"Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading.\" Utah R.Civ.P. 15(c). This rule allows a plaintiff to cure defects in his or her original complaint despite the intervening running of a statute of limitations. Meyers v. Interwest Corp., 632 P.2d 879, 882 (Utah 1981).\nNonetheless, rule 15(c) does not apply to amendments that add new parties \"who have no identity of interest with existing parties.\" Perry v. Pioneer Wholesale Supply Co., 681 P.2d 214, 217 (Utah 1984). \"`Identity of interest' as used in this context means that the parties are so closely related in their business operations that notice of the action against one serves to provide notice of the action to the other.\" Id. Russell does not assert that her original complaint \"serve[d] to provide notice of the action to [Standard].\" In fact, the only argument Russell raises in support of her contention that Standard, The Associated Press, and The Salt Lake Tribune have an identity of interest is that \"they adopt and incorporate the same material, pursuant to contractual agreements with one another.\" However, privity of contract alone is an insufficient identity of interest for relation back under rule 15(c). Id. Moreover, we cannot see how the fact that Standard and the two original defendants publish the same articles shows that they have an identity of interest. Therefore, Russell's amended complaint does not relate back to the date her original complaint was filed.\nFor the foregoing reasons, we conclude that Russell's claim against Standard is barred by the statute of limitations. Accordingly, we affirm.\nSTEWART, Associate C.J., and HOWE, DURHAM and RUSSON, JJ., concur.\nNOTES\n[1] Both The Salt Lake Tribune and The Associated Press were subsequently dismissed from the lawsuit on the ground that the alleged defamatory statements were privileged.\n"} -{"text": " \n\n\t\n\t\n\t\n\t\n\tOSCN Found Document:DANI v. MILLER\n\n\t\n\t\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\n\t\n\n\n\t\t\t\t\t\n\t\n \n\n\n\nOSCN navigation\n\n\n\n\n Home\n\n Courts\n\n \n\t Court Dockets\n\t\t\t \n\n Legal Research\n\n Calendar\n\n Help\n\n\n\n\n\n\n\n\t\t\t\t\t\tPrevious Case\n\n\t\t\t\t\t\tTop Of Index\n\n\t\t\t\t\t\tThis Point in Index\n\n\t\t\t\t\t\tCitationize\n\n\t\t\t\t\t\tNext Case\n\n\t\t\t\t\t\tPrint Only\n\n\n\n\n\n\n\n\nDANI v. MILLER2016 OK 35Case Number: 114482Decided: 03/29/2016THE SUPREME COURT OF THE STATE OF OKLAHOMA\nCite as: 2016 OK 35, __ P.3d __\n\nNOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL. \n\n\n\nROBERT N. DANI, as a resident beneficiary taxpayer claimant of the STATE OF OKLAHOMA UNIFORM UNCLAIMED PROPERTY ACT TRUST and for the benefit of all the other 938,021 (more or less) resident and non-resident beneficiary claimants of the Trust, Plaintiff/Appellant,v.(1) KEN MILLER, in his official capacity as TREASURER OF THE STATE OF OKLAHOMA and TRUSTEE OF THE STATE'S UNIFORM UNCLAIMED PROPERTY ACT TRUST; and (2) STATE OF OKLAHOMA; and (3) JOHN DOE and/or MARY DOE, Attorneys for the State of Oklahoma and/or State officials, etc. for legal malpractice in their advice that the Uniform Unclaimed Property Act Trust was lawful and constitutional in its use of private trust funds for the State of Oklahoma profits, Defendants/Appellees.\nON APPEAL FROM THE DISTRICT COURT OF OKLAHOMA COUNTYHONORABLE THOMAS E. PRINCEDISTRICT JUDGE\n\u00b60 An owner of unclaimed property filed suit in the District Court of Oklahoma County seeking relief, including damages, declaratory relief, and injunctive relief challenging the constitutionality and administration of the Oklahoma Uniform Unclaimed Property Act, 60 O.S. \u00a7\u00a7 651-688. The State Treasurer in his official capacity, and other defendants, moved to dismiss the petition for failure to state a claim for which relief could be grated pursuant to 12 O.S. 2011 \u00a7 2012(B)(6). The property owner moved for summary judgment. The trial court granted the defendants' motion to dismiss and denied the property owner's motion for summary judgment, and the property owner appealed.\nORDER OF THE TRIAL COURT IS AFFIRMED\nJerry R. Fent, Oklahoma City, OK, for Plaintiff/Appellant.Ted Pool, Oklahoma City, OK, for Plaintiff/Appellant.Jared B. Haines, Assistant Solicitor General, and Mithun S. Mansinghani, Deputy Solicitor General, Oklahoma City, OK, for Defendants/Appellees Ken Miller, State Treasurer of Oklahoma, and the State of Oklahoma.\nCOMBS, V.C.J.:\n\u00b61 The question presented to this Court is whether the trial court properly granted Defendants/Appellees' motion to dismiss the action for failure to state claims upon which relief may be granted, and denied Plaintiff/Appellant's motion for summary judgment. We hold in the affirmative, and affirm the trial court's order.\nFACTS AND PROCEDURAL HISTORY\n\u00b62 Plaintiff /Appellant Robert N. Dani (Appellant) is an Oklahoma resident and taxpayer. Certain property belonging to Appellant was handed over to the State Treasurer pursuant to the Uniform Unclaimed Property Act (UUPA), 60 O.S. \u00a7\u00a7 651-688, because it was presumed abandoned. This property consisted of $19.56, received in 2004 and submitted by Chevron/Texaco, as well as $150.00, received in 2013 and submitted by Office Depot, Inc. Appellant filed a claim for this property on or about January 16, 2014. His claim was approved, and a check was issued to Appellant for $169.56 on April 17, 2014. \n\u00b63 On June 22, 2015, Appellant filed suit in Oklahoma County District Court against Defendants/Appellees (collectively, \"State\"), seeking damages, declaratory relief, and injunctive relief, concerning the constitutionality and administration of the UUPA. Appellant's first causes of action center on the alleged creation of a trust by the UUPA, and he argues: 1) the UUPA is a \"public trust,\" having the State Treasurer as trustee and private parties such as Appellant as the beneficiaries; 2) UUPA provisions that require transfer of funds not held as reserve in the UUPA's Unclaimed Property Fund to the State of Oklahoma's General Revenue Fund violate trust obligations; and 3) the UUPA's requirement that interest and income accruing in the Unclaimed Property Fund's principal be paid to the general revenue fund violates trust obligations.\n\u00b64 Appellant also asserts the UUPA is a \"Ponzi scheme\". He then sets out causes of action detailing alleged violations of the United States and Oklahoma Constitutions, including: 1) the statutorily-required transfers to the General Revenue Fund create a debt in violation of Okla. Const. art. 10, \u00a7 23; and 2) the statutorily required transfers violate the U.S. Constitution's prohibition on takings without just compensation, the Due Process Clause and the Equal Protection Clause of the United States Constitution, as well as the due process protection of Okla. Const. art. 2, \u00a7 7. \n\u00b65 Appellant further alleges that by committing the above-described acts, state officials violated their oaths of office and unnamed attorneys for the state committed legal malpractice. Finally, Appellant asserts no statute of limitations bars his claim and that sovereign immunity does not apply.\n\u00b66 On July 16, 2015, the State filed a Motion to Dismiss Appellant's Petition. The State asserts generally that the UUPA complies with all constitutional requirements and the State Treasurer's administration of the Unclaimed Property Fund complies with the UUPA and any duties as a trustee. Specifically, the State argues: 1) Appellant's trust arguments fail to state a claim, and even if they do, whether the UUPA creates a public trust as provided for in 60 O.S. 2011 \u00a7 176 is irrelevant; 2) the UUPA does not create an obligation that binds future legislators to appropriate money for a certain purpose, and therefore does not create an unconstitutional debt in violation of Okla. Const. art. 10, \u00a7 23; 3) Longstanding State and Federal precedent upholding the constitutionality of state unclaimed property statutes defeats Appellant's other Constitutional claims; 4) Appellant's statute of limitations claim, oath claim, and malpractice claim are not legally cognizable; and 5) any claims for damages are precluded by sovereign immunity.\n\u00b67 While the State's Motion to Dismiss was pending, Appellant filed a Motion for Summary Judgment on August 31, 2015. The trial court held a hearing to consider both motions on October 7, 2015. In a journal entry filed on November 4, 2015, the trial court granted the State's Motion to Dismiss as to all of Appellant's causes of action, and denied Appellant's Motion for Summary Judgment. The trial court determined: 1) sovereign immunity precluded monetary damages in the case; 2) none of the provisions of the UUPA effectuate an unconstitutional taking; and 3) Appellant's other causes of action failed to state a claim on which relief could be granted for the reasons articulated by the State in its Motion to Dismiss.\n\u00b68 Appellant appealed the trial court's ruling, and filed his Petition in Error pursuant to Rule 1.36, Oklahoma Supreme Court Rules, 12 O.S. Supp. 2013, Ch. 15, App. 1, on November 30, 2015. In his Petition in Error, Appellant argues the trial court erred when it denied his Motion for Summary Judgment and granted the State's Motion to Dismiss. Appellant asserts: 1) the UUPA is a \"public trust\" having the Treasurer as a trustee and private parties as beneficiaries; 2) the UUPA provisions requiring transfer of funds not held as reserve to the State's General Revenue Fund violate trust obligations; 3) the UUPA requirement that interest and income accruing in the Unclaimed Property Fund's principle be paid to the State's General Revenue Fund violates trust obligations; 4) the UUPA is a \"Ponzi scheme\"; 5) transfers from the Unclaimed Property Fund to the State's General Revenue Fund create a debt in violation of Okla. Const. art. 10, \u00a7 23; and 6) transfers from the Unclaimed Property Fund to the State's General Revenue Fund violate the U.S. Constitution's prohibition on takings without just compensation, Due Process Clause, and Equal Protection Clause, as well as the due process protections of Okla. Const. art. 2, \u00a7 7.1\n\u00b69 Appellant filed a Motion to Retain in the Supreme Court on November 30, 2015, which this Court granted on December 22, 2015.2 The cause was assigned to this office on December 29, 2015. There is a pending Motion to Set Oral Argument Before This Court En Banc filed by Appellant on November 30, 2015. This motion is denied.\nSTANDARD OF REVIEW\n\u00b610 Motions to dismiss are generally viewed with disfavor, and the standard of review before this Court is de novo. Ladra v. New Dominion, LLC, 2015 OK 53, \u00b68, 353 P.3d 529; Simonson v. Schaefer, 2013 OK 25, \u00b63, 301 P.3d 413; Hayes v. Eateries, Inc., 1995 OK 108, \u00b62, 905 P.2d 778. The purpose of a motion to dismiss is to test the law that governs the claim, not the underlying facts. Wilson v. State ex rel. State Election Bd., 2012 OK 2, \u00b64, 270 P.3d 155; Darrow v. Integris Health, Inc., 2008 OK 1, \u00b67, 176 P.3d 1204; Zaharias v. Gammill, 1992 OK 149, \u00b66, 844 P.2d 137. Accordingly, when considering the legal sufficiency of the petition the court takes all allegations in the pleading as true together with all reasonable inferences that may be drawn from them. Ladra, 2015 OK 53, \u00b68; Simonson, 2013 OK 25, \u00b63; Fanning v. Brown, 2004 OK 7, \u00b64, 85 P.3d 841. A plaintiff is required neither to identify a specific theory of recovery nor to set out the correct remedy or relief to which the plaintiff may be entitled. Gens v. Casady School, 2008 OK 5, \u00b68, 177 P.3d 565; Darrow, 2008 OK 1, \u00b67; May v. Mid-Century Ins. Co., 2006 OK 100, \u00b610, 151 P.3d 132. \n\u00b611 If relief is possible under any set of facts which can be established and is consistent with the allegations, a motion to dismiss should be denied. Gens, 2008 OK 5, \u00b68; Darrow, 2008 OK 1, \u00b67; Lockhart v. Loosen, 1997 OK 103, \u00b64, 943 P.2d 1074. A motion to dismiss is properly granted only when there are no facts consistent with the allegations under any cognizable legal theory or there are insufficient facts under a cognizable legal theory. Wilson, 2012 OK 2, \u00b64; Darrow, 2008 OK 1, \u00b67; Lockhart, 1997 OK 103, \u00b65.3 Where not all claims appear to be frivolous on their face or without merit, dismissal for failure to state a claim upon which relief may be granted is premature. Gens, 2008 OK 5, \u00b68; Washington v. State ex rel. Dept. of Corrections, 1996 OK 139, \u00b612, 915 P.2d 359. The party moving for dismissal bears the burden of proof to show the legal insufficiency of the petition. Ladra, 2015 OK 53, \u00b68; Simonson, 2013 OK 25, \u00b63; Tuffy's, Inc. v. City of Oklahoma City, 2009 OK 4, \u00b66, 212 P.3d 1158.\nI.\nTHE UNIFORM UNCLAIMED PROPERTY ACT, 60 O.S. \u00a7\u00a7 651-688\n\u00b612 Appellant's causes of action all concern Oklahoma's Uniform Unclaimed Property Act (UUPA), 60 O.S. \u00a7\u00a7 651-688. Some background on how the UUPA functions is useful prior to delving into Appellant's arguments on appeal. The UUPA provides a comprehensive scheme for reporting, collection, maintenance, distribution, and escheat4 of tangible and intangible property deemed abandoned by its provisions. Quail Creek Golf and Country Club v. Okla. Tax Comm'n, 1996 OK 35, \u00b66, 913 P.2d 302; Lincoln Bank and Trust Co. v. Okla. Tax Comm'n, 1992 OK 22, \u00b63, 827 P.2d 1314. \n\u00b613 The UUPA specifies types of property that are presumed abandoned after a period of time, usually several years, in the absence of any action by or contact with the person or entity holding the property. See generally 60 O.S. 2011 \u00a7\u00a7 651.1 - 658.1A. The UUPA requires the holders of property, tangible or intangible, presumed abandoned and subject to custody as unclaimed property under the UUPA to file a report concerning the property with the State Treasurer. Title 60 O.S. Supp. 2013 \u00a7 661. It is then the responsibility of the State Treasurer to publish notice of abandoned property. Title 60 O.S. 2011 \u00a7 662.\n\u00b614 The holders of abandoned property, upon filing the required report, are also required to pay or deliver the abandoned property to the State Treasurer, 60 O.S. 2011 \u00a7 663, and are relieved from liability once they have done so and the State assumes custody and responsibility for the safekeeping of the property. Title 60 O.S. 2011 \u00a7 664. Generally, once the State Treasurer has taken custody of abandoned property it is deposited in the Unclaimed Property Fund. Title 60 O.S. 2011 \u00a7 668(A) provides in pertinent part: \n\n\n[t]here is hereby created in the State Treasury the \"Unclaimed Property Fund\", the principal of which shall constitute a trust fund for persons claiming any interest in any property delivered to the state under the Uniform Unclaimed Property Act and may be invested as hereinafter provided and shall not be expended except as provided in the Uniform Unclaimed Property Act. All funds received under the Uniform Unclaimed Property Act, including the proceeds from the sale of abandoned property under Section 667 of this title, shall forthwith be deposited by the State Treasurer in the Unclaimed Property Fund, herein created\u0085.\nTitle 60 O.S. 2011 \u00a7 669 vests the State Treasurer with authority to control the fund, and provides:\n\n\n[t]he State Treasurer is hereby vested with authority and the responsibility for the control and management of all monies in the Unclaimed Property Fund as provided for in the Uniform Unclaimed Property Act. It shall be the duty of the State Treasurer to take such steps as may be necessary to preserve the principal of monies accruing to the Unclaimed Property Fund as a trust for persons claiming any interest in any property delivered to the state pursuant to the provisions of the Uniform Unclaimed Property Act.\nThe UUPA provides a process by which the owners of abandoned property may file a claim to recover their property, or the value of their property if it was sold pursuant to provisions of the act. Title 60 O.S. 2011 \u00a7 674. The State Treasurer is required to consider these claims, hold a hearing if necessary and if the claim is approved, pay the claim from the Unclaimed Property Fund. Title 60 O.S. 2011 \u00a7 675.\n\u00b615 However, the UUPA contemplates and accounts for the fact that not all owners of abandoned property will seek to recover it. The UUPA therefore creates a system where a reserve is maintained in the Unclaimed Property Fund to pay approved claims and the remainder is deposited to the General Revenue Fund for use by the state. Specifically, 60 O.S. 2011 \u00a7 670 provides:\n\n\n[t]he State Treasurer shall determine, from time to time, what amount of unclaimed property in custody should be retained as a reserve in order to ensure that all claims presented by persons legally establishing a right to any unclaimed property shall be paid promptly. In making such determination, the State Treasurer shall take into account the following:\n1. The actual experience of other states having unclaimed property laws, as to the amount of claims presented and established as compared to the total amount of property taken into state custody;\n2. Such actuarial or other experience or statistics as may be available to show the frequency of the discovery of missing persons or their unknown heirs;\n3. Any other discoverable and relevant data having a tendency to establish the amount of reserve necessary for the purpose stated in this section.\nThe State Treasurer, after having found and determined the reserve necessary as stated in this section, shall pay all amounts in custody in excess of the necessary reserve into the State Treasury to the credit of the General Revenue Fund.\nWhen monies are deposited to the credit of the General Revenue Fund, all rights of any owner of unclaimed property to resort against the money so paid into the General Revenue Fund shall terminate, but the right of any person legally establishing a claim to any property right which has been taken into the custody of the State Treasurer shall be preserved and the value thereof shall be paid from such reserve.\nThe UUPA also provides for the hypothetical scenario in which the reserve is insufficient to pay established claims. Title 60 O.S. 2011 \u00a7 671 provides:\n\n\n[i]f, at any time, the reserve as provided for in the Uniform Unclaimed Property Act is insufficient to pay in full established claims, the State Treasurer immediately shall:\n1. Redetermine, on the basis of past experience, the percentage necessary to be maintained in the reserve; and\n2. Cease to make any payments to the General Revenue Fund until:\na. all validly established claims as provided for in the Uniform Unclaimed Property Act have been paid, and\nb. there is accumulated in the reserve the sum required to be kept therein under the redetermination, whereupon the State Treasurer shall resume payments to the General Revenue Fund in accordance with the terms of the Uniform Unclaimed Property Act.\n\u00b616 The UUPA thus protects the owners of unclaimed property by providing an orderly system of recovery for presumably abandoned property while simultaneously ensuring that the State and general public receive the benefits of such property rather than allowing holders of abandoned property to reap windfalls when a statute of limitations would cut off recovery from rightful owners. \nII.\nAPPELLANT'S NON-CONSTITUTIONAL CLAIMS \nA. Appellant's trust allegations are without merit.\n\u00b617 Appellant asserts the language of 60 O.S. 2011 \u00a7 668 creates a trust from the Unclaimed Property Fund. Title 60 O.S. 2011 \u00a7 668(A) provides in pertinent part:\n\n\n[t]here is hereby created in the State Treasury the \"Unclaimed Property Fund\", the principal of which shall constitute a trust fund for persons claiming any interest in any property delivered to the state under the Uniform Unclaimed Property Act and may be invested as hereinafter provided and shall not be expended except as provided in the Uniform Unclaimed Property Act. (Emphasis added).\nAppellant also asserts that 60 O.S. 2011 \u00a7 669 creates trust beneficiaries from persons claiming any interest in property delivered to the State pursuant to the UUPA and makes the State Treasurer the trustee. Title 60 O.S. 2011 \u00a7 669 provides:\n\n\n[t]he State Treasurer is hereby vested with authority and the responsibility for the control and management of all monies in the Unclaimed Property Fund as provided for in the Uniform Unclaimed Property Act. It shall be the duty of the State Treasurer to take such steps as may be necessary to preserve the principal of monies accruing to the Unclaimed Property Fund as a trust for persons claiming any interest in any property delivered to the state pursuant to the provisions of the Uniform Unclaimed Property Act. (Emphasis added).\nAppellant further asserts that the Treasurer's required actions under 60 O.S. 2011 \u00a7\u00a7 670-672, concerning the reserve and transfer of excess abandoned property to the General Revenue Fund, violate the trust obligations created by 60 O.S. 2011 \u00a7\u00a7 668 & 669.\n\u00b618 This Court need not address the question of whether the UUPA creates a trust under Oklahoma law.5 The question has no bearing on the determination of the propriety or impropriety of the trial court's grant of dismissal on this claim. Whether a trust is created or not, the terms of the UUPA control. In construing the terms of an instrument creating a trust, the intention of the settlor of the trust should control when such intention is not in conflict with established principles of law. In re Will of Dimick, 1975 OK 10, \u00b610, 531 P.2d 1027; Hurst v. Kravis, 1958 OK 290, \u00b613, 333 P.2d 314. The intent is to be gathered from the terms of the instrument as a whole. In re Will of Dimick, 1975 OK 10, \u00b610; Dunnet v. First Nat. Bank & Trust Co., 1938 OK 608, \u00b66, 85 P.2d 281. Where there is no ambiguity and the language of a trust is clear and plainly susceptible of only one construction, the plain provisions of the trust instrument must determine its construction. House of Realty, Inc. v. City of Midwest City, 2004 OK 97, \u00b636, 109 P.3d 314; Matter of Home-Stake Production Co., Etc., 1979 OK 81, \u00b68, 598 P.2d 1193.\n\u00b619 The standard for construing the terms of an instrument creating a trust is similar to the standard governing interpretation of the Oklahoma statutes. In construing a statute, the primary goal is to determine legislative intent. In re Estate of Jackson, 2008 OK 83, \u00b616, 194 P.3d 1269; Heldermon v. Wright, 2006 OK 86, \u00b612, 152 P.3d 855; George E. Failing Co. v. Watkins, 2000 OK 76, \u00b67, 14 P.3d 52. If the legislative intent is clear from a statute's plain and unambiguous language, this Court need not resort to rules of statutory construction. In re Estate of Jackson, 2008 OK 83, \u00b616; Heldermon, 2006 OK 86, \u00b612. Legislative intent is to be gleaned from the text in light of its general purpose and object. Watkins, 2000 OK 76, \u00b67; City of Tulsa v. State ex rel. Public Employees Relations Bd., 1998 OK 92, \u00b614, 967 P.2d 1214.\n\u00b620 Regardless of whether the UUPA creates a trust, the language of the UUPA is clear and unambiguous, and its terms control. Similarly, the duties of the State Treasurer, either as a trustee or executive official, are defined by the UUPA. Title 60 O.S. 2011 \u00a7 670 requires the State Treasurer to determine a necessary reserve amount of unclaimed property and to transfer the excess into the General Revenue Fund.6 Likewise, 60 O.S. 2011 \u00a7 671 requires the State Treasurer to cease those payments if the number of valid claims exceeds the reserve, and 60 O.S. 2011 \u00a7 672 requires the State Treasurer to care for the reserve fund and permits its investment, while requiring any interest to be paid into the General Revenue Fund. Title 60 O.S. 2011 \u00a7 668, which creates the Unclaimed Property Fund in the first place, does not require the Unclaimed Property Fund retain all money deposited into it. Title 60 O.S. 2011 \u00a7 668, in pertinent part, describes the Unclaimed Property Fund thusly:\n\n\nThere is hereby created in the State Treasury the \"Unclaimed Property Fund\", the principal of which shall constitute a trust fund for persons claiming any interest in any property delivered to the state under the Uniform Unclaimed Property Act and may be invested as hereinafter provided and shall not be expended except as provided in the Uniform Unclaimed Property Act. (emphasis added).\n\u00b621 Appellant has not alleged the State Treasurer has taken any action contrary to the provisions of the UUPA. To the contrary, Appellant alleges that the Treasurer has violated his obligations as a \"trustee\" by following the provisions of the UUPA, which would itself be the trust instrument if this Court were to hold it created an express trust. If it does not, the State Treasurer has simply done exactly as the legislature has directed in implementing the UUPA and fulfilling his obligations. There is no merit to Appellant's trust allegations.\nB. Appellant's allegations the UUPA constitutes a \"Ponzi scheme\" are without merit.\n\u00b622 Appellant also alleges the UUPA creates a \"Ponzi scheme\" because of how it handles the reserve to pay established claims. The UUPA provides for the maintenance of a reserve fund that might conceivably be insufficient to pay out all established claims. See 60 O.S. 2011 \u00a7 670. If this eventuality occurs, 60 O.S. 2011 \u00a7 671 requires the State Treasurer to recalculate the necessary reserve and cease making payments into the General Revenue Fund until all validly established claims are paid. In other words, if validly established claims exceed the established reserve, incoming unclaimed property will be held in reserve to pay valid claims until all established claims are paid. Appellant asserts this constitutes a \"Ponzi scheme\", because the reserve is not sufficient to pay all potential (including not-yet-established) claims and new abandoned property is to be used to pay any established claims exceeding the reserve.\n\u00b623 A \"Ponzi scheme\" is a fraudulent investment scheme. Black's Law Dictionary defines \"Ponzi scheme\" in the following manner:\n\n\n[a] fraudulent investment scheme in which money contributed by later investors generates artificially high dividends or returns for the original investors, whose example attracts even larger investments. Money from the new investors is used directly to repay or pay interest to earlier investors, usu. without any operation or revenue-producing activity other than the continual raising of new funds. This scheme takes its name from Charles Ponzi, who in the late 1920s was convicted for fraudulent schemes he conducted in Boston.\nBlack's Law Dictionary (10th ed. 2014).\nThe example from which the name is derived, masterminded by Charles Ponzi, was described by the Supreme Court of the United States in Cunningham v. Brown, 265 U.S. 1, 44 S.Ct. 424, 68 L.Ed. 873 (1924).7 This Court has considered the legal ramifications of \"Ponzi schemes\" in several cases, all of which concerned fraudulent investment schemes. See, e.g., Horton v. Hamilton, 2015 OK 6, 345 P.3d 357 (concerning purchase of a bond that was part of a fraudulent investment Ponzi scheme); Okla. Dep't of Sec. ex rel. Faught v. Wilcox, 2011 OK 82, 267 P.3d 106 (Department of Securities sought return of amounts defendants received from Ponzi scheme in excess of their investments); Okla. Dep't of Sec. ex rel. Faught v. Blair, 2010 OK 16, 231 P.3d 645 (same underlying issues as Wilcox). \n\u00b624 The UUPA is not a \"Ponzi scheme\" within the meaning of that term. It is not a fraudulent investment scheme being perpetrated against the citizens of Oklahoma, implicating violations of the Oklahoma Uniform Securities Act, 71 O.S. \u00a7\u00a7 1-101 to 1-701, or otherwise. The UUPA deals with unclaimed property that is presumed abandoned. It establishes a reserve to pay valid claims in the event owners of that property eventually come forward to claim it, and permits the State to put the rest to use. The State is not deceiving new investors in order to pay valid claims, but rather paying those claims with abandoned property it would be taking in anyway, per the terms of the UUPA. Title 60 O.S. 2011 \u00a7 671 operates in such a manner that even if they must wait, owners of abandoned property with valid claims will always be able to eventually recover their previously presumed-abandoned property. \n\u00b625 Should Appellant's allegations be read as constituting a more general claim of fraud, they still fail to state a claim upon which relief may be granted. Fraud is a generic term embracing the multifarious means which human ingenuity can devise so one can get advantage over another by false suggestion or suppression of the truth. Croslin v. Enerlex, Inc., 2013 OK 34, \u00b611, 308 P.3d 1041; Singleton v. LePak, 1967 OK 37, \u00b613, 425 P.2d 974; Morris v. McLendon, 1933 OK 619, \u00b68, 27 P.2d 811. Title 12 O.S. Supp. 2013 \u00a7 2009(B) sets out the pleading standard for fraud and provides: \"[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally.\" Under this standard, allegations of fraud must be stated with sufficient particularity to enable the opposing party to prepare his or her responsive pleadings and defenses. A-Plus Janitorial & Carpet Cleaning v. Employers' Workers' Comp. Ass'n, 1997 OK 37, \u00b635, 936 P.2d 916. This standard requires specification of the time, place, and content of an alleged false representation. Gianfillippo v. Northland Gas Co., 1993 OK 125, \u00b611, 861 P.2d 308. Appellant has not alleged any misrepresentation made concerning the operation of the UUPA in connection with his claim that it constitutes a \"Ponzi scheme\". The UUPA's requirements are set out in the Oklahoma Statutes for all to see, and were followed by the State Treasurer. Appellant's allegations that the UUPA constitutes a \"Ponzi scheme\" are without merit.\nIII.\nAPPELLANT'S CONSTITUTIONAL CLAIMS\n\u00b626 The Court now turns to the various questions concerning the constitutionality of the UUPA that Appellant has preserved for appeal. A challenger to the constitutionality of a statute bears a heavy burden. A legislative act is presumed to be constitutional and will be upheld unless it is clearly, palpably and plainly inconsistent with the Constitution. Rural Water Sewer and Solid Waste Mgmt. v. City of Guthrie, 2010 OK 51, \u00b615, 253 P.3d 38; EOG Resources Marketing, Inc. v. Okla. State Bd. of Equalization, 2008 OK 95, \u00b613, 196 P.3d 511; Mehdipour v. State ex rel. Dep't of Corr., 2004 OK 19, \u00b622, 90 P.3d 546. Every presumption is to be indulged in favor of the constitutionality of a statute. Thomas v. Henry, 2011 OK 53, \u00b68, 260 P.3d 1251; Fent v. Okla. Capitol Improvement Auth., 1999 OK 64, \u00b63, 984 P.2d 200.\nA. Transfers from the Unclaimed Property Fund to the State's General Revenue Fund do not create a debt in violation of Okla. Const. art. 10, \u00a7 23.\n\u00b627 Appellant asserts that the reserve provisions of the UUPA, 60 O.S. 2011 \u00a7\u00a7 670-671 create a \"debt\" in violation of Okla. Const. art. 10, \u00a7 23. In pertinent part, Okla. Const. art. 10, \u00a7 23 provides: \n\n\n[t]he state shall never create or authorize the creation of any debt or obligation, or fund or pay any deficit, against the state, or any department, institution or agency thereof, regardless of its form or the source of money from which it is to be paid, except as may be provided in this section and in Sections 24 and 25 of Article X of the Constitution of the State of Oklahoma.\n\u00b628 Over the years this Court has analyzed what constitutes a \"debt\" in violation of Okla. Const. art. 10, \u00a7 23. For example, in In re Application of Okla. Dep't of Transp., 2003 OK 105, \u00b625, 82 P.3d 1000, this Court held that notes issued by the Oklahoma Department of Transportation that were to be payable only from future federal highway aid did not constitute a debt of the State of Oklahoma pursuant to Okla. Const. art. 10, \u00a7 23. This Court stated:\n\n\n[t]he proposed GARVEE notes when issued by the Oklahoma Department of Transportation will constitute an obligation payable solely from future receipts of federal highway aid dedicated to the retirement of the notes. The principal, interest, or costs of the GARVEE notes will not be paid with future revenues raised by the taxing power of this State, nor will they be paid from future funds that would otherwise be available for general governmental purposes. In the event of default, note holders will be paid only from the Note Payment Fund and any receipts of federal highway aid dedicated to the retirement of the notes. Under these circumstances, the proposed GARVEE notes will not constitute a debt of the State of Oklahoma under the Okla. Const. art. 10, \u00a7 23. \nIn re Application of Okla. Dept. of Transp., 2003 OK 105, \u00b625 (emphasis added).\n\u00b629 This Court has also held that no debt is created when a statute authorizes bonds but does not attempt to bind future legislators to repay them. In Fent v. Okla. Capitol Imp. Auth., 1999 OK 64, \u00b67, this Court examined statutes authorizing the Oklahoma Capital Improvement Authority (OCIA) to issue and sell bonds for certain public building projects. This Court stated:\n\n\n[a]s we interpret both statutes, OCIA is authorized thereunder to fund the costs of the various projects by borrowing monies on the credit of the income and revenues to be derived from the projects. The money borrowed will, of course, come from the issuance and sale of the bonds. In turn, the bonds are to be retired by payments made to OCIA by the various agencies, departments and/or instrumentalities using and/or benefitting from the projects under lease or other agreements with OCIA. Although each statute expresses an intent to appropriate sufficient monies to the various agencies, etc. to make such payments to OCIA for the purpose of retiring the bonds, nowhere in either statute is there a provision obligating a future legislature to do so.\nFent v. Okla. Capitol Imp. Auth., 1999 OK 64, \u00b68. \n\u00b630 Appellant argues that the promise to return property to established claimants, set out in 60 O.S. 2011 \u00a7\u00a7670-671 violates Okla. Const. art. 10, \u00a7 23 by creating a \"debt\" within the meaning of that provision, without complying with the exceptions set out in Okla Const. art. 10, \u00a7\u00a7 23-25. Title 60 O.S. 2011 \u00a7 670 requires the State Treasurer to determine what amount of unclaimed property in custody should be retained as a reserve to pay established claims. The State Treasurer is then required to pay all amounts in custody in excess of that reserve into the State Treasury to the credit of the General Revenue Fund. However, especially important is the final sentence of 60 O.S. 2011 \u00a7 670, which provides:\n\n\n[w]hen monies are deposited to the credit of the General Revenue Fund, all rights of any owner of unclaimed property to resort against the money so paid into the General Revenue Fund shall terminate, but the right of any person legally establishing a claim to any property right which has been taken into the custody of the State Treasurer shall be preserved and the value thereof shall be paid from such reserve.\nPursuant to this section, claimants of unclaimed property have no rights whatsoever to seek payment from the General Revenue Fund, only from the reserve, itself composed of unclaimed property. \n\u00b631 Title 60 O.S. 2011 \u00a7 671 provides for the eventuality of a shortage of funds in the reserve to pay valid claims, and provides:\n\n\n[i]f, at any time, the reserve as provided for in the Uniform Unclaimed Property Act is insufficient to pay in full established claims, the State Treasurer immediately shall:\n1. Redetermine, on the basis of past experience, the percentage necessary to be maintained in the reserve; and\n2. Cease to make any payments to the General Revenue Fund until:\na. all validly established claims as provided for in the Uniform Unclaimed Property Act have been paid, and\nb. there is accumulated in the reserve the sum required to be kept therein under the redetermination, whereupon the State Treasurer shall resume payments to the General Revenue Fund in accordance with the terms of the Uniform Unclaimed Property Act.\nPursuant to this section, if there is a deficiency in the reserve to pay in full established claims, all payments to the General Revenue Fund must cease until those claims are paid and the reserve is built back up. \n\u00b632 The transfer of unclaimed property to the General Revenue Fund pursuant to the UUPA is one way. While excess funds above the determined reserve are transferred to the General Revenue Fund, recourse is never made to the General Revenue Fund to satisfy potential claims. Claimants' only recourse is to the reserve, itself filled only by the accumulation of abandoned property pursuant to the UUPA. The State has not legally pledged its full faith and credit to pay the owners of abandoned property. The Legislature, in enacting the UUPA, did not make any attempt to bind future legislatures to appropriate money or otherwise raise funds to pay established claims under the UUPA. Appellant's claim that the UUPA creates a debt in violation of Okla. Const. art. 10, \u00a7 23 is without merit. \nB. The UUPA does not effectuate a taking in violation of U.S. Const. amend. V.\n\u00b633 Appellant asserts that the UUPA effectuates a taking of private property without just compensation in violation of U.S. Const. amend. V.8 In Texaco, Inc. v. Short, 454 U.S. 516, 102 S.Ct. 781, 70 L.Ed.2d 738 (1982), the Supreme Court of the United States conclusively rejected the notion that legal termination of ownership rights in abandoned property constitutes a taking entitled to just compensation. In that case, the Court considered an Indiana statute under which a mineral lease not used for twenty years would automatically lapse unless the owner filed a statement of claim in the county recorder's office. Texaco, Inc., 454 U.S. at 518-520. Concerning the appellants' taking claim, the Court held: \n\n\n[i]n ruling that private property may be deemed to be abandoned and to lapse upon the failure of its owner to take reasonable actions imposed by law, this Court has never required the State to compensate the owner for the consequences of his own neglect. We have concluded that the State may treat a mineral interest that has not been used for 20 years and for which no statement of claim has been filed as abandoned; it follows that, after abandonment, the former owner retains no interest for which he may claim compensation. It is the owner's failure to make any use of the property-and not the action of the State-that causes the lapse of the property right; there is no \"taking\" that requires compensation. The requirement that an owner of a property interest that has not been used for 20 years must come forward and file a current statement of claim is not itself a \"taking.\"\nTexaco, Inc., 454 U.S. at 530.\n\u00b634 The Texaco, Inc. Court examined a statute that would completely extinguish rights to property if certain conditions were not met, and determined it did not effectuate a taking. Unlike the Indiana statute examined in Texaco, Inc., the UUPA does not extinguish the rights of owners of abandoned property. As previously discussed, the UUPA is a custodial taking statute. Title 60 O.S. 2011 \u00a7 674 provides a procedure through which owners of abandoned property may file a claim and \"[i]f a claim is allowed, the State Treasurer shall pay over or deliver to the claimant the property or the amount the State Treasurer actually received or the net proceeds if it has been sold by the State Treasurer.\" Appellant availed himself of this mechanism and by his own admission had his property returned to him. \n\u00b635 Regardless, much like the statute considered in Texaco, Inc., the UUPA provides that various types of property will be presumed abandoned unless certain actions are taken by the owner in a specified period of time. See 60 O.S. 2011 \u00a7 651.1-658.1A. Here, as in Texaco, Inc., the intake and custody of abandoned property is attributable to the inattention or abandonment of the owners. The rationale of Texaco, Inc. is thus applicable. No taking occurs.\n\u00b636 The rationale of Texaco, Inc., applies equally to Appellant's claims concerning interest on his property. The UUPA entitles an owner of abandoned property other than money to receive interest accruing prior to conversion of that property into money. Title 60 O.S. 2011 \u00a7 665. Excepting Section 665, the UUPA entitles a claimant only to the amount of their property the Treasurer actually received or the net proceeds if it was sold. Title 60 O.S. 2011 \u00a7 674. The State is not required to compensate a claimant for the consequences of their own neglect, and this includes interest their property might generate while temporarily in the custody of the State. Just because the Legislature chose not to terminate an owner's rights in abandoned property does not mean it is required to allow a claim for interest. Courts in other states have reached a similar result applying Texaco, Inc. to their own unclaimed property statutes, including claims for interest. See Smolow v. Hafer, 959 A.2d 298, 303-304 (Pa. 2008); Morris v. Chiang, 77 Cal.Rptr.3d 799, 804 (Cal. ApP.2d Dist. 2008); Smyth v. Carter, 845 N.E.2d 219, 223-224 (Ind. Ct. App. 2006); Clark v. Strayhorn, 184 S.W.3d 906, 914 (Tex. App. 2006). Appellant's claim that the UUPA effectuates a taking in violation of U.S. Const. amend. V is meritless.\nC. The UUPA does not violate the Due Process Provisions of either the United States or Oklahoma Constitutions.\n\u00b637 Appellant asserts that the UUPA deprives him and others of property without due process of law in violation of Okla. Const. art. 2, \u00a7 7,9 U.S. Const. amend. V,10 and U.S. Const. amend. XIV, \u00a7 1,11 by taking trust property, through the statutory provisions requiring transfer of abandoned property exceeding the reserve into the General Revenue Fund. Oklahoma's Due Process Clause is generally coextensive with its federal counterpart. State ex rel. Bd. of Regents of University of Okla. v. Lucas, 2013 OK 14, n. 25, 297 P.3d 378; Gladstone v. Bartlesville Indep. School Dist. No. 30 (I-30), 2003 OK 30, n. 16, 66 P.3d 442; Fair School Fin. Council of Okla., Inc. v. State, 1987 OK 114, n. 48, 746 P.2d 1135. At a minimum, due process requires notice and an opportunity to be heard. Crownover v. Keel, 2015 OK 35, \u00b614, 357 P.3d 470; Edwards v. City of Sallisaw, 2014 OK 86, \u00b619, 339 P.3d 870; Daffin v. State ex rel Okla. Dep't of Mines, 2011 OK 22, \u00b616, 251 P.3d 741. \n\u00b638 As this Court has not addressed in detail the question of whether the UUPA complies with constitutional due process requirements, federal jurisprudence is illustrative. The Supreme Court of the United States has previously held unclaimed property statutes to be a valid exercise of state power, stating: \"[a]s a broad principle of jurisprudence rather than as a result of the evolution of legal rules, it is clear that a state, subject to constitutional limitations, may use its legislative power to dispose of property within its reach, belonging to unknown persons.\" Standard Oil Co. v. State of N.J., by Parsons, 341 U.S. 428, 435-436, 71 S.Ct. 822, 95 L.Ed. 1078 (1951). Similarly, the Court held in Texaco, Inc., discussed supra.: \n\n\n[w]e have no doubt that, just as a State may create a property interest that is entitled to constitutional protection, the State has the power to condition the permanent retention of that property right on the performance of reasonable conditions that indicate a present intention to retain the interest.\nFrom an early time, this Court has recognized that States have the power to permit unused or abandoned interests in property to revert to another after the passage of time.\nTexaco, Inc., 454 U.S. at 526.\n\u00b639 In Texaco, Inc., the Supreme Court of the United States also considered whether Indiana's mineral lapse statute met the adequate notice requirement of due process. Concerning notice of the requirements of the statute itself, the Court held:\n\n\n[g]enerally, a legislature need do nothing more than enact and publish the law, and afford the citizenry a reasonable opportunity to familiarize itself with its terms and to comply \u0085. It is well established that persons owning property within a State are charged with knowledge of relevant statutory provisions affecting the control or disposition of such property. \nTexaco, Inc., 454 U.S. at 532.\nHaving determined that the appellants were presumed to have notice of the mineral lapse statute's provisions, the Court next considered the question of whether, given that knowledge, they had a constitutional right to be advised that the period of non-use was about to expire and their interest would revert to the surface owner. Texaco, Inc., 454 U.S. at 533. The Court then made an important distinction, noting: \"it is essential to recognize the difference between the self-executing feature of the statute and a subsequent judicial determination that a particular lapse did in fact occur.\" Texaco, Inc., 454 U.S. at 533. \n\u00b640 The appellants in Texaco, Inc., argued the Supreme Court's own seminal case of Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950)12 should be applied to determine whether they received proper notice that their mineral interests were about to revert to the surface owners. The Supreme Court disagreed, holding: \n\n\n[t]he reasoning in Mullane is applicable to a judicial proceeding brought to determine whether a lapse of a mineral estate did or did not occur, but not to the self-executing feature of the Mineral Lapse Act. The due process standards of Mullane apply to an \"adjudication\" that is \"to be accorded finality.\" The Court in Mullane itself distinguished the situation in which a State enacted a general rule of law governing the abandonment of property. It has long been established that \"laws [must] give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly,\" Grayned v. City of Rockford, 408 U.S. 104, 108, 92 S.Ct. 2294, 33 L.Ed.2d 333, but it has never been suggested that each citizen must in some way be given specific notice of the impact of a new statute on his property before that law may affect his property rights.\nTexaco, Inc., 454 U.S. at 535-536.\n\u00b641 Much like the mineral lapse statute at issue in Texaco, Inc., the UUPA sets conditions under which types of property are presumed abandoned, based primarily on the failure of the owner to take certain actions such as communicating with the holder. See, e.g., 60 O.S. 2011 \u00a7 651.2 (any sum payable on a check, certified check, cashier's check, draft, or similar instrument presumed abandoned after no written communication or indication of interest from the owner after five years). Title 60 O.S. 2011 \u00a7 663 then requires holders to turn this property over to the State Treasurer. Unlike in Texaco, Inc., this process does not result in the termination of the owner's interest in the property. Even if it did, however, the holding in Texaco, Inc., illustrates that due process requirements of notice and an opportunity to be heard do not apply to automatic termination of a property right through operation of statute based on an owner's failure to fulfill certain conditions. Rather, the requirements of due process would apply only to a proceeding brought to adjudicate if that right did in fact terminate. Texaco, Inc., 454 U.S. at 535. It follows by extension that due process is not offended by the automatic transfer of abandoned property into the custody of the State Treasurer.\n\u00b642 Since the UUPA does not terminate an individual owner's right to recover their abandoned property, even after the statute results in its transfer to the State, the statute provides a procedural mechanism for owners to seek return of their abandoned property. The procedural elements of this statute comply with due process requirements. They are consistent with the holdings of the Supreme Court of the United States in Texaco, Inc. and Mullane, as well as with this Court's jurisprudence concerning due process.\n\u00b643 The UUPA provides ample notice to potential claimants of abandoned property. Title 60 O.S. Supp. 2013 \u00a7 661 requires holders of abandoned property to file a report with the State Treasurer concerning the property. The report must provide the name, if known, and last-known address for the owner of any property valued over $50 and presumed abandoned. Title 60 O.S. Supp. 2013 \u00a7 661(E) requires holders of abandoned property to attempt to notify owners prior to filing the report. It provides in full:\n\n\nE. Not more than one hundred twenty (120) days before filing the report required by this section, the holder in possession of property presumed abandoned and subject to custody as unclaimed property under the Uniform Unclaimed Property Act shall send written notice to the apparent owner at the owner's last-known address informing the owner that the holder is in possession of property subject to the Uniform Unclaimed Property Act if:\n1. The holder has in the records of the holder an address for the apparent owner which the holder's records do not disclose to be inaccurate;\n2. The claim of the apparent owner is not barred by the statute of limitations; and\n3. The property has a value of Fifty Dollars ($50.00) or more, or the property has a value of less than Fifty Dollars ($50.00) and is one of a recurring number of continuous payments, including, but not limited to, royalties, annuities, dividends, distributions and other recurring sums presumed abandoned pursuant to subsection D of Section 655 of this title. The holder is not required to send written notice to the owner if the holder has previously attempted to communicate with the owner, or otherwise exercised due diligence to ascertain the whereabouts of the owner. The mailing of notice by first-class mail to the last-known address of the owner by the holder shall constitute compliance with this subsection and, if done, no further act on the part of the holder shall be necessary.\nTitle 60 O.S. 2011 \u00a7 661(E).\n\u00b644 Further, 60 O.S. 2011 \u00a7 662 requires the State Treasurer attempt to notify owners that their property is in State custody. It provides: \n\n\nA. The State Treasurer shall cause at least two notices to be published during the year following the report required by Section 661 of this title in a legal newspaper of general circulation in the county in this state in which is located the last-known address of any person to be named in the notice. Different legal newspapers of general circulation may be used for each notice. If no address is listed or if the address is outside this state, the notice must be published in the county within this state which is the principal place of business of the holder of the abandoned property, or in an Oklahoma newspaper which the State Treasurer believes most likely to be seen by the owner of the property or by heirs of the owner.\nB. The published notice must be entitled \"Notice of Names of Persons Appearing to be Owners of Abandoned Property\", and contain:\n1. The names in alphabetical order and last-known address, if any, of persons listed in the report and entitled to notice within the county as specified in subsection A of this section;\n2. A statement that information concerning the property and the name and last-known address of the holder may be obtained by any person possessing an interest in the property by addressing an inquiry to the State Treasurer; and\n3. A statement that the property is in the custody of the State Treasurer and all claims must be directed to the State Treasurer.\nC. The State Treasurer is not required to publish in the notice any items of less than Fifty Dollars ($50.00) unless the State Treasurer considers their publication to be in the public interest.\nD. The State Treasurer shall provide electronic access to the new names and last-known addresses of all persons reported to the State Treasurer as owners of unclaimed property on an Internet web site. The State Treasurer shall take reasonable steps to publicize the existence of this web site and shall publish an advertisement no less than once each calendar quarter in a legal newspaper of general circulation in each county of this state.\n\u00b645 Owners of abandoned property are then permitted by 60 O.S. 2011 \u00a7 674 to file a claim for the return of their property, which the State Treasurer must consider within ninety days and give written notice if the claim is denied in whole or part. Title 60 O.S. 2011 \u00a7 675 provides further procedure for determining claims, and provides in pertinent part: \n\n\nA. The State Treasurer shall consider any claim filed under the Uniform Unclaimed Property Act and may hold a hearing and receive evidence concerning it. The procedure to be followed hereunder shall be as prescribed by the Administrative Procedures Act. If a hearing is held, the State Treasurer shall prepare a finding and decision in writing on each claim filed, stating the substance of any evidence heard by the State Treasurer and the reasons for the State Treasurer's decision. The decision shall be a public record. (Footnotes omitted).\n\u00b646 This Court recently considered what constitutes adequate notice for due process purposes in Crownover v. Keel, 2015 OK 35, 357 P.3d 470. In that cause, this Court considered whether an owner of real property received constitutionally sufficient notice of the sale of his property for delinquent taxes, when notice was provided only by publication and certified mail that was returned undelivered. Applying Jones v. Flowers, 547 U.S. 220, 126 S.Ct. 1708, 164 L.Ed.2d 415 (2006), and Mullane, 339 U.S. 306, this Court held that notice must be reasonably calculated to reach the interested parties, and this standard was not satisfied by certified mail when the letter was returned unclaimed. See Crownover, 2015 OK 35, \u00b6\u00b627-30. \n\u00b647 Here, the UUPA requires notice to property owners via multiple mechanisms that are reasonably calculated, under the circumstances, to apprise interested parties that their abandoned property is (or is soon to be) in the custody of the State and that they may file a claim to have it returned to them. See Crownover, 2015 OK 35, \u00b6\u00b627-30; Jones, 547 U.S. at 226; Mullane, 339 U.S. at 314-315. The very nature of the UUPA as a custodial taking statute for property that is presumed abandoned means that communicating notice to potential owners may be difficult. Accordingly, the statute requires mailed notice, publication, and posting on the internet. As applied to Appellant, the undisputed facts of this cause indicate that he became aware the State had taken custody of his abandoned property, filed a claim, the claim was approved, and his property was returned to him. Appellant's allegations that the UUPA does not provide constitutionally-sufficient notice are without merit. \nD. The UUPA does not violate constitutional guarantees to equal protection under the law. \n\u00b648 Appellant also alleges that he has been denied equal protection under the law, as part of his due process argument. U.S. Const. amend. XIV, \u00a7 1 provides in pertinent part that no state shall: \"deny to any person within its jurisdiction the equal protection of the laws.\"13 Appellant makes no allegations, in his original Petition or in his Petition in Error, concerning any classes who receive constitutionally problematic treatment. Rather, Appellant appears to equate equal protection with due process and argues that the alleged deprivation of notice discussed supra also constitutes a violation of the Equal Protection Clause. \n\u00b649 The Equal Protection Clause, although not an absolute guarantee of equality of operation or application of state legislation, is intended to safeguard the quality of governmental treatment against arbitrary discrimination. Ross v. Peters, 1993 OK 8, \u00b617, 846 P.2d 1107. When called upon to analyze a case on equal protection grounds, a court will apply one of three standards of review: 1) rational basis; 2) heightened scrutiny; or 3) strict scrutiny. Gladstone, 2003 OK 30, n. 22; City of Cleburne, Tex. v. Cleburne Living Center, 473 U.S. 432, 440-442, 105 S.Ct. 3249, 87 L.Ed.2d 313 (1985). Unless a classification warrants some form of heightened review because it jeopardizes the exercise of a fundamental right or categorizes on the basis of an inherently suspect characteristic, the Equal Protection Clause requires only that the classification rationally further a legitimate state interest. Gladstone, 2003 OK 30, n. 25; Nordlinger v. Hahn, 505 U.S. 1, 10, 112 S.Ct. 2326, 120 L.Ed.2d 1 (1992); Cleburne, 473 U.S. at 439-441.\n\u00b650 Though Appellant makes no argument concerning a classification, any equal protection violations of the UUPA would have to hinge on its creation of a classification of owners of presumably abandoned property that are treated differently from owners of other property. Heightened levels of scrutiny apply only to statutes that: 1) operate to the peculiar disadvantage of a suspect class such as a class based on alienage or ancestry; or 2) interfere with the exercise of a fundamental right grounded in the constitution such as the right to vote, right to interstate travel, and rights guaranteed by the first amendment. Jacobs Ranch, L.L.C. v. Smith, 2006 OK 34, \u00b655, 148 P.3d 842; Mass. Bd. Of Retirement v. Murgia, 427 U.S. 307, 312, 96 S.Ct. 2562, 49 L.Ed.2d 520 (1976). As the UUPA implicates neither of those conditions through its treatment of abandoned property and owners, this Court must only determine if the classification rationally furthers a legitimate state interest. Gladstone, 2003 OK 30, n. 25.\n\u00b651 There is no doubt that the UUPA, and its treatment of unclaimed property, serves a legitimate state interest. It prevents holders of unclaimed property (such as banks, insurers, and other entities) from reaping financial windfalls from that property. Instead, the UUPA requires it be turned over to the State and allows it to be put to public use. Through its notification provisions, it requires efforts be made to contact the owners of abandoned property in an effort to reunite owners with their property. The Supreme Court of the United States has unequivocally stated that States have legitimate interests in terminating property rights in property that has not been used for years. Texaco, Inc., 454 U.S. at 526-530. The UUPA does not go that far, and permits owners to reclaim their property even as continuously-unclaimed property is put to public use. The UUPA's treatment of abandoned property and its owners rationally furthers a legitimate state interest, and does not operate in an arbitrary manner. Accordingly, the UUPA does not violate the equal protection components of either U.S. Const. amend. XIV, \u00a7 1 or Okla. Const. art. 2, \u00a7 7.\nCONCLUSION\n\u00b652 Appellant challenges the validity of the UUPA on multiple grounds, constitutional and otherwise. In our view, the Petition and the allegations contained therein, read in conformity with the arguments raised by Appellant in this appeal, indicate no relief is possible under any set of facts which can be established and is consistent with the allegations. Appellant's claims are without merit. Accordingly, the trial court's dismissal of Appellant's Petition, and its denial of his Motion for Summary Judgment, were proper. \nORDER OF THE TRIAL COURT IS AFFIRMED\nALL JUSTICES CONCUR \nFOOTNOTES\n1 Under the pre-1997 appellate rules, errors not presented by the petition in error would not be considered on appeal. See Okla. Tax Comm'n v. City Vending of Muskoge, Inc., 1992 OK 110, n. 6, 835 P.2d 97; Kirschstein v. Haynes, 1990 OK 8, \u00b631, 788 P.2d 941. This changed with the adoption of the modern Rule 1.26(b) in 1997,which provides that the petition in error will be deemed amended to include errors set forth in the brief-in-chief. Rule 1.26, Oklahoma Supreme Court Rules, 12 O.S. Supp. 2013, Ch. 15, App. 1. However, in accelerated appeals under Oklahoma Supreme Court Rule 1.36 and with the absence of appellate briefs, issues not raised by Appellant in his Petition in Error will not be considered by this Court on appeal.\n2 In our December 22, 2015, order granting Appellant's Motion to Retain, this Court made this cause a companion to Reynolds v. Fallin, No. 114,481. \n3 The distinction between lack of any cognizable legal theory and insufficient facts under a cognizable legal theory is important, because in order for the courts to dismiss a claim for failure to state a cause of action without giving the plaintiff the opportunity to amend, it must appear that the claim does not exist rather than the claim has been defectively stated. Fanning v. Brown, 2004 OK 7, \u00b623, 85 P.3d 841.\n4 Escheat is a procedure with ancient origins whereby a sovereign may acquire title to abandoned property if after a number of years no rightful owner appears. State of Tex. v. State of N.J., 379 U.S. 674, 676, 85 S.Ct. 626, 13 L.Ed.2d 596 (1965), supplemented 380 U.S. 518 (1965). Though this Court has previously used the term \"escheat\" to refer to the transfer of abandoned property to the State pursuant to the UUPA, in TXO Production Corp. v. Okla. Corp. Comm'n, 1992 OK 39, \u00b615, 829 P.2d 964, this Court explained that the UUPA is not a true escheat statute, but rather a custodial taking law. See Croslin v. Enerlex, Inc., 2013 OK 34, \u00b625, 308 P.3d 1041. Under the UUPA, the State does not acquire title to abandoned property but rather holds it in trust for the rightful owner. Croslin, 2013 OK 34, \u00b625; TXO Production Corp., 1992 OK 39, \u00b615. The Oklahoma Attorney General has also noted the custodial taking nature of the UUPA, stating:\nOklahoma enacted its unclaimed property legislation in 1967 and modeled it after the 1954 version of the Uniform Disposition of Unclaimed Property Act promulgated by the National Conference of Commissioners on State Laws. The Oklahoma Act contains the basic structure and most of the basic wording of the Uniform Act. One of the distinguishing characteristics of the Uniform Act is that it is custodial in nature, that is, it does not result in the loss of the owner's property rights. See, Uniform Disposition of Unclaimed Property Act. pref. n. 9A U.L.A.412 413 (1965). In custodial statutes, the state is only given possession and use of the property as long as it remains unclaimed. Also in custodial statutes, the state is required to keep its books open so that the true owner may make a claim to the held property at any time. Further, in custodial statutes, there is never a transfer of property from the treasurer's custodial rolls to the escheat rolls. See, 3 Harv. J. Legis., supra.,144. \nQuestion Submitted by: The Honorable Nancy Virtue, Oklahoma House of Representatives, The Honorable Herbert Rozell, Oklahoma State Senate, 1984 OK AG 141, \u00b69. \n5 Appellant alternates between using the terms trust and public trust when referring to the relevant sections of the UUPA. Public trusts are created and operate pursuant to the Public Trust Act, 60 O.S. \u00a7\u00a7 176 -180.4. Title 60 O.S. 2011 \u00a7 176 requires the State or one of its political subdivisions be the beneficiary of a public trust. Appellant's arguments rest on the assertion that he, and other owners of abandoned property similarly situated, are the beneficiaries of any trust created pursuant to the UUPA. The Public Trust Act is inapplicable to Appellant's allegations. \n6 Title 60 O.S. 2011 \u00a7 670 provides in pertinent part:\n[t]he State Treasurer shall determine, from time to time, what amount of unclaimed property in custody should be retained as a reserve\u0085.\nThe State Treasurer, after having found and determined the reserve necessary as stated in this section, shall pay all amounts in custody in excess of the necessary reserve into the State Treasury to the credit of the General Revenue Fund. (Emphasis added).\nGenerally, when the Legislature uses the term \"shall\", it signifies a mandatory directive or command. Tulsa County Budget Bd. v. Tulsa County Excise Bd., 2003 OK 103, n. 25, 81 P.3d 662; Keating v. Edmondson, 2001 OK 110, \u00b613, 37 P.3d 882; U.S. Through Farmers Home Admin. v. Hobbs, 1996 OK 77, n. 16, 921 P.2d 338. The use of shall in this instance is unambiguously a mandatory directive. \n7 The Court described the scheme thusly:\n[t]he litigation grows out of the remarkable criminal financial career of Charles Ponzi. In December, 1919, with a capital of $150, he began the business of borrowing money on his promissory notes. He did not profess to receive money for investment for account of the lender. He borrowed the money on his credit only. He spread the false tale that on his own account he was engaged in buying international postal coupons in foreign countries and selling them in other countries at 100 per cent. profit, and that this was made possible by the excessive differences in the rates of exchange following the war. He was willing, he said, to give others the opportunity to share with him this profit. By a written promise in 90 days to pay them $150 for every $100 loaned, he induced thousands to lend him. He stimulated their avidity by paying his 90-day notes in full at the end of 45 days, and by circulating the notice that he would pay any unmatured note presented in less than 45 days at 100 per cent. of the loan. Within eight months he took in $9,582,000, for which he issued his notes for $14,374,000. He paid his agents a commission of 10 per cent. With the 50 per cent. promised to lenders, every loan paid in full with the profit would cost him 60 per cent. He was always insolvent, and became daily more so, the more his business succeeded. He made no investments of any kind, so that all the money he had at any time was solely the result of loans by his dupes.\nCunningham, 265 U.S. at 7-8. \n8 U.S. Const. amend. V provides in pertinent part:\n\u0085 nor shall private property be taken for public use, without just compensation.\nThe Fifth Amendment to the U.S. Constitution is made applicable to the States by the Fourteenth Amendment. Board of County Comm'rs of Muskogee County v. Lowery, 2006 OK 31, n. 9, 136 P.3d 639.\nAppellant did not raise, in his petition or on appeal, the question of whether the UUPA violates Oklahoma's constitutional provisions concerning takings of private property, found in Okla. Const. art. 2, \u00a7\u00a7 23 & 24. In Lowery, this Court determined that Oklahoma's eminent domain provisions provide private property protection to Oklahoma citizens beyond that which is afforded them by the Fifth Amendment to the U.S. Constitution, specifically in the context of taking property for private, as well as public, use. 2006 OK 31, \u00b619, 136 P.3d 639. \n9 Okla. Const. art. 5, \u00a7 7 provides:\n[n]o person shall be deprived of life, liberty, or property, without due process of law.\n10 U.S. Const. amend. V provides in pertinent part:\n[n]o person shall \u0085 be deprived of life, liberty, or property, without due process of law;\n11 U.S. Const. amend. XIV, \u00a7 1 provides in pertinent part:\n\u0085 nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. \n12 Mullane set out the fundamental requirements for notice under the due process clause. The Court held: \n[m]any controversies have raged about the cryptic and abstract words of the Due Process Clause but there can be no doubt that at a minimum they require that deprivation of life, liberty or property by adjudication be preceded by notice and opportunity for hearing appropriate to the nature of the case.\nMullane, 339 U.S. at 313. The Court elaborated on the notice requirement specifically, further holding:\n[a]n elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. Milliken v. Meyer, 311 U.S. 457, 61 S.Ct. 339, 85 L.Ed. 278, 132 A.L.R. 1357; Grannis v. Ordean, 234 U.S. 385, 34 S.Ct. 779, 58 L.Ed. 1363; Priest v. Board of Trustees of Town of Las Vegas, 232 U.S. 604, 34 S.Ct. 443, 58 L.Ed. 751; Roller v. Holly, 176 U.S. 398, 20 S.Ct. 410, 44 L.Ed. 520. The notice must be of such nature as reasonably to convey the required information, Grannis v. Ordean, supra, and it must afford a reasonable time for those interested to make their appearance, Roller v. Holly, supra, and cf. Goodrich v. Ferris, 214 U.S. 71, 29 S.Ct. 580, 53 L.Ed. 914.\nMullane, 339 U.S. 314-315. \n13 Although the Oklahoma Constitution does not contain an equal protection provision like or similar to U.S. Const. amend. XIV, \u00a7 1, this Court has identified a functional equivalent of that clause in the anti-discrimination component of our state constitution's due process section, Okla. Const. art. 2, \u00a7 7. Gladstone, 2003 OK 30, n. 15; Fair School Finance Council v. State, 1987 OK 114, \u00b654, 746 P.2d 1135. We have also identified an equal protection component in Okla. Const. art. 2, \u00a7 6. See Thayer v. Phillips Petroleum Co., 1980 OK 95, \u00b6\u00b612-15, 613 P.2d 1041. \n\nCitationizer\u00a9 Summary of Documents Citing This Document\n\n\nCite\nName\nLevel\n\n\nNone Found.\n\n\nCitationizer: Table of Authority\n\n\nCite\nName\nLevel\n\n\nOklahoma Attorney General's Opinions\n\u00a0CiteNameLevel\n\u00a01984 OK AG 141, Question Submitted by: The Honorable Nancy Virtue, Oklahoma House of Representatives, The Honorable Herbert Rozell, Oklahoma State SenateCited\nOklahoma Supreme Court Cases\n\u00a0CiteNameLevel\n\u00a01987 OK 114, 746 P.2d 1135, 58 OBJ 3282, Fair School Finance Council of Oklahoma, Inc. v. StateDiscussed at Length\n\u00a01990 OK 8, 788 P.2d 941, 61 OBJ 241, Kirschstein v. HaynesDiscussed\n\u00a01992 OK 22, 827 P.2d 1314, 62 OBJ 3115, Lincoln Bank and Trust Co. v. Oklahoma Tax Com'nDiscussed\n\u00a01992 OK 39, 829 P.2d 964, 63 OBJ 942, TXO Production Corp. v. Oklahoma Corp. Com'nDiscussed at Length\n\u00a01992 OK 110, 835 P.2d 97, 63 OBJ 2287, Oklahoma Tax Com'n v. City Vending of Muskogee, Inc.Discussed\n\u00a01992 OK 149, 844 P.2d 137, 63 OBJ 3190, Zaharias v. GammillDiscussed\n\u00a01993 OK 8, 846 P.2d 1107, 64 OBJ 440, Ross v. PetersDiscussed\n\u00a01993 OK 125, 861 P.2d 308, 64 OBJ 2971, Gianfillippo v. Northland Cas. Co.Discussed\n\u00a01938 OK 608, 85 P.2d 281, 184 Okla. 82, DUNNETT v. FIRST NAT. BANK & TRUST CO.Discussed\n\u00a01997 OK 37, 936 P.2d 916, 68 OBJ 1266, A-Plus Janitorial & Carpet Cleaning v. Employers' Workers' Compensation Assoc.Discussed\n\u00a01996 OK 139, 915 P.2d 359, 67 OBJ 1339, WASHINGTON v. STATE ex rel. DEPT. OF CORRECTIONSDiscussed\n\u00a01997 OK 103, 943 P.2d 1074, 68 OBJ 2550, LOCKHART v. LOOSENDiscussed at Length\n\u00a02001 OK 110, 37 P.3d 882, 72 OBJ 3672, KEATING v. EDMONDSONDiscussed\n\u00a01958 OK 290, 333 P.2d 314, HURST v. KRAVISDiscussed\n\u00a01933 OK 619, 27 P.2d 811, 167 Okla. 68, MORRIS v. MCLENDONDiscussed\n\u00a01967 OK 37, 425 P.2d 974, SINGLETON v. LePAKDiscussed\n\u00a01995 OK 108, 905 P.2d 778, 66 OBJ 3281, Hayes v. Eateries, Inc.Discussed\n\u00a02003 OK 30, 66 P.3d 442, GLADSTONE v. BARTLESVILLE INDEPENDENT SCHOOL DISTRICT NO. 30Discussed at Length\n\u00a02003 OK 103, 81 P.3d 662, TULSA COUNTY BUDGET BOARD v. TULSA COUNTY EXCISE BOARDDiscussed\n\u00a02003 OK 105, 82 P.3d 1000, IN THE MATTER OF THE APPLIC. OF THE OKLA. DEPT. OF TRANSPORTATIONDiscussed at Length\n\u00a02004 OK 7, 85 P.3d 841, FANNING v. BROWNDiscussed at Length\n\u00a02004 OK 19, 90 P.3d 546, MEHDIPOUR v. STATE ex rel. DEPT. OF CORRECTIONSDiscussed\n\u00a02004 OK 97, 109 P.3d 314, HOUSE OF REALTY, INC. v. CITY OF MIDWEST CITYDiscussed\n\u00a01996 OK 35, 913 P.2d 302, 67 OBJ 869, Quail Creek Golf v. Okl. Tax Comm.Discussed\n\u00a02006 OK 31, 136 P.3d 639, BOARD OF COUNTY COMMISSIONERS OF MUSKOGEE COUNTY v. LOWERYDiscussed at Length\n\u00a02006 OK 34, 148 P.3d 842, JACOBS RANCH, L.L.C. v. SMITHDiscussed\n\u00a02006 OK 86, 152 P.3d 855, HELDERMON v. WRIGHTDiscussed at Length\n\u00a02006 OK 100, 151 P.3d 132, MAY v. MID-CENTURY INSURANCE COMPANYDiscussed\n\u00a01996 OK 77, 921 P.2d 338, 67 OBJ 2242, U.S. Through Farmers Home Admin. v. HobbsDiscussed\n\u00a02008 OK 1, 176 P.3d 1204, DARROW v. INTEGRIS HEALTH, INC.Discussed at Length\n\u00a02008 OK 5, 177 P.3d 565, GENS v. CASADY SCHOOLDiscussed at Length\n\u00a02008 OK 83, 194 P.3d 1269, IN THE MATTER OF THE ESTATE OF JACKSONDiscussed at Length\n\u00a02008 OK 95, 196 P.3d 511, EOG RESOURCES MARKETING v. OKLAHOMA STATE BD. OF EQUALIZATIONDiscussed\n\u00a02009 OK 4, 212 P.3d 1158, TUFFY'S, INC. v. CITY OF OKLAHOMA CITYDiscussed\n\u00a02010 OK 16, 231 P.3d 645, DEPT. OF SECURITIES ex rel. FAUGHT v. BLAIRDiscussed\n\u00a02010 OK 51, 253 P.3d 38, RURAL WATER SEWER AND SOLID WASTE MANAGEMENT v. CITY OF GUTHRIEDiscussed\n\u00a02011 OK 22, 251 P.3d 741, DAFFIN v. STATE ex rel. OKLAHOMA DEPT. OF MINESDiscussed\n\u00a02011 OK 53, 260 P.3d 1251, THOMAS v. HENRYDiscussed\n\u00a02011 OK 82, 267 P.3d 106, DEPT. OF SECURITIES ex rel. FAUGHT v. WILCOXDiscussed\n\u00a02012 OK 2, 270 P.3d 155, WILSON v. STATE ex rel. STATE ELECTION BOARDDiscussed at Length\n\u00a01975 OK 10, 531 P.2d 1027, IN RE WILL OF DIMICKDiscussed at Length\n\u00a02013 OK 14, 297 P.3d 378, STATE ex rel. BOARD OF REGENTS OF THE UNIVERSITY OF OKLAHOMA v. LUCASDiscussed\n\u00a02013 OK 25, 301 P.3d 413, SIMONSON v. SCHAEFERDiscussed at Length\n\u00a02013 OK 34, 308 P.3d 1041, CROSLIN v. ENERLEX, INC.Discussed at Length\n\u00a02014 OK 86, 339 P.3d 870, EDWARDS v. CITY OF SALLISAWDiscussed\n\u00a02015 OK 6, 345 P.3d 357, HORTON v. HAMILTONDiscussed\n\u00a02015 OK 35, 357 P.3d 470, CROWNOVER v. KEELDiscussed at Length\n\u00a02015 OK 53, 353 P.3d 529, LADRA v. NEW DOMINION, LLCDiscussed at Length\n\u00a01980 OK 95, 613 P.2d 1041, Thayer v. Phillips Petroleum Co.Discussed\n\u00a01979 OK 81, 598 P.2d 1193, MATTER OF HOME-STAKE PRODUCTION CO., ETC.Discussed\n\u00a02000 OK 76, 14 P.3d 52, 71 OBJ 2662, GEORGE E. FAILING CO. v. WATKINSDiscussed at Length\n\u00a01998 OK 92, 967 P.2d 1214, 69 OBJ 3242, City of Tulsa v. State ex rel. Public Employees Relations BoardDiscussed\n\u00a01999 OK 64, 984 P.2d 200, 70 OBJ 2100, Fent v. Oklahoma Capitol Improvement AuthorityDiscussed at Length\nTitle 12. Civil Procedure\n\u00a0CiteNameLevel\n\u00a012 O.S. 2009, Pleading Special MattersCited\n\u00a012 O.S. 2012, Defenses and Objections - When and How Presented - By Pleading or MotionCited\nTitle 60. Property\n\u00a0CiteNameLevel\n\u00a060 O.S. 176, Trusts for Benefit of State, County or Municipality - Approval - Expenditures - Bylaws - Amendments - Indebtedness - Bonds - ContractsDiscussed at Length\n\u00a060 O.S. 663, Payment or Delivery of Abandoned PropertyDiscussed\n\u00a060 O.S. 668, Unclaimed Property Fund - DepositsDiscussed at Length\n\u00a060 O.S. 651.1, Sums Payable on Travelers Check or Money Order Presumed AbandonedDiscussed\n\u00a060 O.S. 651.2, Outstanding Sums Presumed Abandoned - Record - Burden of Proof - Affirmative DefensesCited\n\u00a060 O.S. 661, Report of Abandoned PropertyDiscussed at Length\n\u00a060 O.S. 662, Notice and Publication of Lists of Abandoned PropertyDiscussed\n\u00a060 O.S. 664, Relief From Liability by Payment or DeliveryCited\n\u00a060 O.S. 665, Income Accruing After Payment or DeliveryCited\n\u00a060 O.S. 669, Authority and Responsibility for Control and Management of Unclaimed Property FundDiscussed at Length\n\u00a060 O.S. 670, Unclaimed Property - Determination of Amount - Payment of Amounts in ExcessDiscussed at Length\n\u00a060 O.S. 671, Actions upon Insufficient ReserveDiscussed at Length\n\u00a060 O.S. 672, Care, Custody, and Management of Reserve FundCited\n\u00a060 O.S. 674, Claim of Interest in Abandoned PropertyDiscussed at Length\n\u00a060 O.S. 675, Determination of Claims - Payment - Claims Against Mineral Owner's FundDiscussed\nTitle 71. Securities\n\u00a0CiteNameLevel\n\u00a071 O.S. 1-101, Short TitleCited\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n"} -{"text": "\n526 F.Supp. 292 (1981)\nUNITED STATES of America, Plaintiff,\nv.\nAlfred CARPENTIER and Alexander Alexandro, Defendants.\nNo. CR-80-00120.\nUnited States District Court, E. D. New York.\nNovember 25, 1981.\nJohn H. Jacobs and Thomas P. Puccio, U. S. Dept. of Justice, Organized Crime Strike Force, Laura Brevetti, Sp. Asst. U. S. Atty., Brooklyn, N.Y. for Edward R. Korman, U. S. Atty., E. D. N. Y.\nJames Pascarella, Carle Place, N. Y. for the defendant Alfred Carpentier.\n*293 Debevoise & Plimpton, and Katharine P. Darrow, New York City, for applicant New York Times Co.\nPatterson, Belknap, Webb & Tyler, New York City, for applicant New York News, Inc.\n\nMEMORANDUM OF DECISION AND ORDER\nCOSTANTINO, District Judge.\nThis is a motion by the Government to place under seal for a sixty (60) day period audio tapes admitted into evidence at the sentencing hearing of the defendant, Alfred Carpentier (\"Carpentier\"). Carpentier has not opposed the motion, but both The New York Times Company, publisher of the New York Times (\"the Times\"), and the New York News, Inc., publisher of the New York Daily News (\"the News\"), have opposed the motion on First Amendment grounds and on the basis of the common law right of access to information admitted into evidence at a public hearing. For reasons set forth below, the Government's motion is denied.\n\nBACKGROUND\nThe defendant Carpentier along with his co-defendant Alexander Alexandro (\"Alexandro\") was indicted and found guilty of certain crimes committed in the course of a covert investigation conducted by the Federal Bureau of Investigation (\"F.B.I.\"), commonly known as \"Abscam.\" The main characters in all of the Abscam investigations were Melvin Weinberg (\"Weinberg\"), a Government informant, and Special Agent Anthony Amoroso of the F.B.I., who in his undercover capacity was known as Tony DeVito (\"DeVito\").\nThe evidence at trial showed that Carpentier first met Weinberg in December of 1978, and that the two continued to meet quite frequently in the following months to discuss and negotiate various business transactions. During one of those meetings, Carpentier mentioned that in the past he had dealt with corrupt United States Immigration and Nationalization Service (\"INS\") inspectors, and that they could no doubt be of some assistance to Weinberg's and DeVito's employer \u0097 the ficticious Arab Sheik who controlled Abdul Enterprises, Ltd., a sham Middle Eastern company ostensibly interested in investing money in the United States.\nIn a subsequent meeting, Weinberg and DeVito pursued Carpentier's offer. They told Carpentier that their boss, the \"Sheik\", wanted to assist a friend in obtaining permanent residence status in the United States for the friend's son. The friend and the son were likewise ficticious.\nOn May 30, 1979, Carpentier met with Weinberg and DeVito to set up the meeting with the INS agent, Alexandro. On May 31, 1979, Carpentier attended a meeting with Alexandro, Weinberg and DeVito to plan the deal. During the following months, the details of a fraudulent immigration transaction were worked out and money was exchanged between the defendants and DeVito and Weinberg. The majority of these transactions were taped with audio and/or video recording devices.\nOn October 31, 1980, the defendant Carpentier was convicted after a jury trial of conspiracy to commit bribery, 18 U.S.C. \u00a7 371 and of conflict of interest. 18 U.S.C. \u00a7\u00a7 202, 203. In the conspiracy count, Carpentier was found guilty of conspiring with Alexandro to receive money in return for Alexandro's official misconduct. In the latter, Carpentier was found guilty of aiding and abetting Alexandro in performing acts of official misconduct. As for Alexandro, he was convicted on the same date of the substantive bribery count, 18 U.S.C. \u00a7 201(c), the substantive conflict of interest count, 18 U.S.C. \u00a7 203, and the conspiracy count, 18 U.S.C. \u00a7 371.\nThe sentencing of both Carpentier and Alexandro was delayed for several months at the request of the defendants to permit the defendants and the court to follow the \"due process\" hearings then being conducted before the Hon. George C. Pratt of this court. Those hearings, held upon the motion of other Abscam defendants, focused on alleged improprieties committed during the entire Abscam investigation. Judge *294 Pratt in United States v. Myers, et al., 527 F.Supp. 1206 (E.D.N.Y.1981) concluded that there were no such due process violations. Since that decision, neither defendant in this action has pursued any relief on the basis of the due process violations,[1] and sentencing for both defendants was scheduled for September 22, 1981.\nOn that date, Alexandro was sentenced to a four-year term of incarceration, but Carpentier's sentence was again adjourned to enable the Government to obtain authorization from the Attorney General of the United States to move to close Carpentier's sentencing hearing pursuant to 28 C.F.R. \u00a7 50.9. After the sentence was adjourned, the Government furnished the court with approximately six-to-eight hours of tapes which the Government was to admit in evidence at the sentencing hearing. With the understanding that the hearing was to be closed, the court agreed to listen to the tapes in camera to expedite the sentencing hearing.\nAfter another adjournment at the Government's request and after some discussion in Washington, D. C. between the press and the Justice Department, the Government informed the press and the court on November 13, 1981 that it would not seek to close the hearing. The sentencing hearing, also known as a Fatico hearing, began in open court on November 16, 1981. See United States v. Fatico, 579 F.2d 707 (2d Cir. 1978), remanded, 458 F.Supp. 388 (E.D.N.Y.), aff'd, 603 F.2d 1053 (2d Cir. 1979),[2]cert. denied, 444 U.S. 1073, 100 S.Ct. 1018, 62 L.Ed.2d 755 (1980).\nBefore the Fatico hearing again commenced on November 19, 1981, the defendant made a tactical decision not to play the tapes and to bypass examining any witnesses concerning the content of those tapes. The Government then moved to admit the tapes in evidence without playing the tapes in open court. Although the Government had been willing to play the tapes if the defendant sought to challenge their content, it altered that position once it learned that Carpentier had decided to limit his rebuttal case. In short, the Government then asked that the tapes, already admitted in evidence, be placed under seal for sixty days as their disclosure, according to the Government, would jeopardize an ongoing grand jury investigation. At this point, the Times and the News appeared before the court in opposition to the motion.\n\nCONCLUSIONS\nThe issue before this court is whether to allow the public and press access to tapes admitted into evidence without seal by the Government during a public sentencing hearing. The Supreme Court has enunciated the principle that \"[w]hat transpires in the courtroom is public property,\" Craig v. Harney, 331 U.S. 367, 374, 67 S.Ct. 1249, 1254, 91 L.Ed. 1546 (1947). While \"access to governmental information is subject to a degree of restraint dictated by the nature of the information and countervailing interests in security or confidentiality,\" Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 586, 100 S.Ct. 2814, 2832, 65 L.Ed.2d 973 (1980) (Brennan, J., concurring); see, e. g., Houchins v. KQED, Inc., 438 U.S. 1, 98 S.Ct. 2588, 57 L.Ed.2d 553 (1978), \"[t]he commission of crime, prosecutions resulting from it, and judicial proceedings arising from the prosecutions ... are ... events of legitimate concern to the public and ... fall within the responsibility of the press to report the operations of government.\" Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 492, 95 S.Ct. 1029, 1044, 43 L.Ed.2d 328 (1975). Accordingly, the court concludes that, on the basis of the growing trend in the Supreme Court, see Richmond Newspapers, Inc. v. Virginia, supra; Garrett v. DePasquale, 443 U.S. 368, 99 S.Ct. 2898, 61 L.Ed.2d 608 (1979), the public has a strong *295 First Amendment claim to access to evidence admitted in a public sentencing hearing, see Richmond Newspapers, Inc. v. Virginia, supra, and that the tapes should be disclosed.\nThere is good reason for allowing the public to see and hear evidence offered by the Government in an open hearing which a court is asked to consider when sentencing a convicted defendant. Primarily, there is a basic distrust of secret proceedings. In re Oliver, 333 U.S. 257, 273, 68 S.Ct. 499, 507, 92 L.Ed. 682 (1948). In addition, the public must have the opportunity to observe and criticize the judiciary in the operation of its duties. In sentencing, unlike other aspects of criminal proceedings, it is the distinct province of the court to determine what constitutes proper sentence. Nonetheless, the judiciary is an arm of the government, see Richmond Newspapers, Inc. v. Virginia, supra, 448 U.S. at 595, 100 S.Ct. at 2838 (Brennan, J., concurring), and if the public is to have access to a criminal trial to be part of the checks and balances in government, a fortiori that same check should be present when a court is asked to use its broad discretion and consider evidence admitted in a public hearing in imposing sentence. To the extent that the tapes at issue have become a matter of public record upon their admission into evidence by the Government at a public hearing, the press and the public should be allowed to hear the tapes and should be given access to these tapes. See United States v. Hubbard, 650 F.2d 293, 323 (D.C.Cir.1981); Cianci v. New Times Publishing Co., 88 F.R.D. 562 (S.D.N. Y.1980); cf. United States v. Gurney, 558 F.2d 1202, 1209 (5th Cir. 1977), cert. denied sub nom. Miami Herald Publishing Co. v. Krentzman, 435 U.S. 968, 98 S.Ct. 1606, 56 L.Ed.2d 59 (1978).\nThe Government argues that the public need not be informed as to the reasons underlying the court's pronouncement of sentence. The Government analogizes the information contained in these tapes to the information often contained in probation reports to which the public is not privy. However, this analogy is inaccurate in light of the adversarial nature of the instant proceeding. This characterization arises from the significant distinction that the probation department which submits its probation report to the court for the purpose of sentencing is part of the judiciary, see Fed.R.Crim.P. 32, whereas, the Government, which has admitted the tapes into evidence in the Fatico hearing for the purpose of sentencing is yet an adversary in a judicial hearing arising from its prosecution and conviction of Carpentier. See Cianci v. New Times Publishing Co., supra.\nThere is authority in this Circuit holding that evidence admitted under seal need not be disclosed \"because, with respect to that item of evidence, the session of court was not public.\" Application of National Broadcasting Co., Inc. (Myers), 635 F.2d 945, n. 4 (2d Cir. 1980). However, this ruling is not applicable to the instant action. During the Fatico hearing, the tapes in issue were admitted into evidence without a seal, so the above holding is not controlling. See, e. g., National Polymer Products v. Borg-Warner Corp., 641 F.2d 418, 421 (6th Cir. 1981). Further, the distinction in the instant case that the tapes were not played during the hearing as in Myers is not dispositive in light of the fact that, by the admission of the tapes into evidence without seal, they became part of the public record. See Cox Broadcasting Corp. v. Cohn, supra, 420 U.S. at 495, 95 S.Ct. at 1046. Accordingly, the court follows the Richmond Newspapers holding and concludes that the public has a First Amendment right to see and hear evidence admitted into evidence in a public sentencing hearing. Cf. United States v. Hubbard, 650 F.2d at 330 (MacKinnon, J., dissenting).\nThere is also an additional basis for giving the press and public access to the tapes. The common law right to inspect and copy judicial records is firmly established in our jurisprudence, Nixon v. Warner Communications, Inc., 435 U.S. 589, 597-98, 98 S.Ct. 1306, 1311-12, 55 L.Ed.2d 570 (1977), and that right applies to tapes as well as documents. See In re National Broadcasting Co., Inc. (Jenrette), 653 F.2d *296 609 (D.C.Cir.1981); United States v. Criden, 648 F.2d 814 (3d Cir. 1981); Application of National Broadcasting Co., Inc. (Myers), supra. While the decision to release those tapes for copying and reproduction rests in the sole discretion of the trial court, Nixon v. Warner Communications, Inc., supra, the presumption is in favor of disclosure.[3]\nThe court does recognize that under certain circumstances, disclosure would be denied if such disclosure would hamper law enforcement efforts. See generally United States v. Winner, 641 F.2d 825, 831 (10th Cir. 1981); Black v. Sheraton Corp., 564 F.2d 531 (D.C.Cir.1977); 28 C.F.R. \u00a7 16.1 et seq. Under the circumstances of this case, however, that privilege belatedly raised by the Government at the close of the Fatico hearing does not override the public's First Amendment right to hear those tapes and does not outbalance the presumption in favor of copying judicial records. Richmond Newspapers, Inc. v. Virginia, supra, 448 U.S. at 581, 100 S.Ct. at 2830.\nSpecifically, the Government maintains that disclosure would hamper an ongoing grand jury investigation. While parenthetically this fact alone might justify the sealing, the facts mitigate against nondisclosure. Firstly, the Government has had these tapes since 1978 or 1979 and has done little or nothing to investigate information revealed on the tapes, and the fears expressed regarding the ongoing investigation appear to be based solely on speculation. See In re Search Warrant For Second Floor Bedroom, 489 F.Supp. 207 (D.R.I.1980). Secondly, the Government had no reluctance to play the tapes in open court when it believed that Carpentier was going to contest certain facts contained in the tapes. It was only after Carpentier's position was clear to the Government that it sought to seal the tapes. Finally, the Government had numerous opportunities to discuss the closing of the entire proceeding with the Justice Department in Washington, D. C. and the press had some input in the Justice Department's decision against closing the hearing. It was only at the eleventh hour that the Government sought to alter its position. Taken as whole, these facts detract from the Government's position that disclosure would jeopardize a grand jury investigation. Such frequent changes of heart by the Government to further its position cause this court to view its request with skepticism.[4]\nIn conclusion, this court has been asked to consider the information on these tapes in sentencing the defendant, and it will do so. However, the court accords no weight to statements made regarding third parties mentioned on the tapes. There is absolutely no proof that the individuals mentioned were involved in illegal activities in any way nor does the Government make any claim regarding the substance of those statements as they pertain to third parties.\nAccordingly, the Government's motion is denied.\nSO ORDERED.\nNOTES\n[1] Both defendants did move to dismiss the indictment during the trial, but their joint motion was denied.\n[2] The purpose of the Fatico hearing was to place before the court evidence of the defendant's background, character, and conduct to be taken into consideration at sentencing. See 18 U.S.C. \u00a7 3577. As with all criminal hearings, the defendant in this adversarial proceeding is given a full opportunity to challenge the evidence submitted by the Government.\n[3] By its decision herein, the court does not expand the First Amendment right and the right of access to the extent that the public can examine matter contained in the presentence report. Such disclosure is specifically restricted by applicable statutes. Fed.R.Crim.P. 32. The court's holding pertains solely to the audio tapes admitted into evidence without seal in a public, criminal, adversarial proceeding.\n[4] On occasion, courts have expressed concern that disclosure may affect innocent third parties mentioned in the evidence. See United States v. Hubbard, supra; United States v. Criden, supra. While this is true in any case where a party makes possibly unfounded statements about third parties, under the circumstances, such considerations do not alter this court's decision. As the Second Circuit noted in Myers, supra, 635 F.2d at 952, the public has a strong interest in examining every aspect of the controversial Abscam investigation, which would not be outweighed by the interests of third parties who might be mentioned on those tapes.\n"} -{"text": "\n102 Ga. App. 96 (1960)\n115 S.E.2d 607\nMEADERS et al.\nv.\nJONES.\n38373.\nCourt of Appeals of Georgia.\nDecided June 22, 1960.\nRehearing Denied July 12, 1960.\n*98 David L. Mincey, John D. Hemingway, for plaintiffs in error.\nWalter Smith, Buford E. Hancock, contra.\nTOWNSEND, Judge.\n1. It is contended by the plaintiff in error, first, that there is no evidence to justify a verdict in *99 favor of the plaintiff, and, secondly, that the plaintiff is not entitled to recover except under the terms of a contract as pleaded and proved by himself. It is always true that one cannot recover on a cause of action, no matter how well sustained by proof, which is different from or at material variance with the cause of action set out in the declaration. Williams v. Eldridge, 53 Ga. App. 445 (186 S. E. 217); Central R. & Bkg. Co. v. Cooper, 95 Ga. 406 (22 S. E. 549); Dixie Ornamental Iron Co. v. Parrish, 91 Ga. App. 11 (84 S. E. 2d 716). There was, however, some slight evidence to sustain the contract as alleged between the plaintiff and Simmons, because of the plaintiff's testimony that Simmons was not only the defendant's agent in charge of the building but was in fact continuing to operate with him in a partnership relation. It is not necessary, however, to sustain the verdict on this theory. It was not denied that an oral contract existed between the parties; that the subject matter of the contract was the laying of brick and cement blocks on the project in question; that this contract was at least in part performed. The plaintiff contended that one of the terms of the contract was a rate of $45 per thousand for brick, as against the defendant's contention of $41 per thousand. As was stated in McClelland v. Carmichael Tile Co., 94 Ga. App. 645, 649 (96 S. E. 2d 202): \"A fair evaluation of the record shows, not that the plaintiff proved a contract different from the contract alleged, but that both the plaintiff and the defendant agreed upon the existence of the same contract, and the only dispute was as to one of its terms \u0097 that is, the amount to be paid for the services performed.\" Under the defendant's own pleadings he was indebted to the plaintiff under this contract for the sum of $543, subject to the sums sought to be recovered in the cross-action. The jury is at liberty, where the evidence is in dispute, to believe a part of the evidence of one witness while rejecting other parts, and to combine that portion of the testimony which they believe with a part of the testimony of other witnesses in the case. Scott v. Imperial Hotel Co., 75 Ga. App. 91 (42 S. E. 2d 179). In this action, and although Simmons did not testify for either side, the preponderance of evidence strongly points to the conclusion that the plaintiff did *100 have the conversation with Simmons to which the plaintiff testified; that Simmons was, at least, an agent of the defendant who handled some of the subcontracts on the project in question; that, however, the defendant had a later conversation with the defendant, to which the defendant testified, at which time he agreed to lay the brick at $41 per thousand provided the defendant made no profit on the project, and that as a matter of fact the defendant lost money on that construction. Both the price and the amount of work were in dispute. The jury might well have accepted the defendant's figure as to the rate of work and the plaintiff's figure as to the amount of work; they would then have returned a verdict for the plaintiff of between $1200 and $1600, according to how much they found had already been paid, which figure would have been further modified if, had they accepted the plaintiff's figure and arrived at approximately $1600, they had then set off certain items sued for in the crossaction, particularly those relating to expenses of scaffolding, as to which the preponderance of evidence supported the defendant's contentions. In such event a verdict of $1400 would seem not only sustainable but supported by a preponderance of all the evidence in the case. The general grounds of the motion for a new trial are accordingly without merit.\n2. The special grounds relating to the failure of the court to charge without request on certain issues of law are not argued in the briefs of the plaintiff in error. However, the charge as a whole was full and fair, and it was not error in the absence of request to fail to charge the language set out in the two special grounds. Equitable Credit Corp. v. Johnson, 86 Ga. App. 844 (8) (72 S. E. 2d 816); Carlisle v. Ragan-Malone Co., 17 Ga. App. 435 (2) (87 S. E. 608).\nThe trial court did not err in denying the motion for new trial.\nJudgment affirmed. Gardner, P. J., Carlisle and Frankum, JJ., concur.\n"} -{"text": "Filed 11/13/18\n CERTIFIED FOR PUBLICATION\n\n\n\n IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA\n THIRD APPELLATE DISTRICT\n (Placer)\n ----\n\n\n\n\nC.A., C084473\n\n Plaintiff and Respondent, (Super. Ct. No. SDR0049126)\n\n v.\n\nC.P. et al.,\n\n Defendants and Appellants.\n\n\n\n\n APPEAL from a judgment of the Superior Court of Placer County, Suzanne\nGazzaniga, Judge. Affirmed.\n\n Law Office of Stephanie J. Finelli and Stephanie J. Finelli for Defendants and\nAppellants.\n\n Forester Purcell Stowell and Matthew K. Purcell for Plaintiff and Respondent.\n\n\n\n This case involves a little girl bonded to and loved by each of her three parents.\n The wife in a married couple (defendants C.P. and J.P., wife and husband)\nconceived the child with a coworker (plaintiff C.A.), but hid that fact from wife\u2019s\n\n\n 1\n\femployer and--initially--from husband. The marriage remains intact and wife and\nhusband parent the child. For the first three years of the child\u2019s life, the couple allowed\nplaintiff to act in an alternate parenting role, and the child bonded with him and his close\nrelatives. Defendants excluded plaintiff from the child\u2019s life when he filed the instant\npetition seeking legal confirmation of his paternal rights. The trial court found that wife\nmisled the court at an interim custody hearing, prolonging what the court later viewed as\nan unwarranted separation. Despite this period of separation, the court found the child\nwas still bonded to all three parents and found this to be a \u201crare\u201d case where, pursuant to\nstatutory authority, each of three parents should be legally recognized as such, to prevent\ndetriment to their child. Defendants appeal. We shall affirm.\n BACKGROUND\n The child was born in July 2012 to wife, who was then and remains married to\nhusband. In November 2015, plaintiff filed the instant petition to confirm his relationship\nwith the child, change her name, and obtain paternity testing. After an interim order for\npaternity testing, a court trial was held, after which the trial court granted plaintiff some\nof the relief he sought.\n Defendants do not explicitly attack the sufficiency of the evidence, the key facts\nwere not disputed, and the trial court did not find defendants credible on some key points.\nIn particular, the trial court faulted wife for her \u201cmisleading portrayal\u201d that minimized\nplaintiff\u2019s involvement in the child\u2019s life at an earlier hearing.1 The minimization led the\ncourt to deny plaintiff\u2019s request for temporary visitation orders, a request that it otherwise\nwould have found appropriate. But the court found plaintiff\u2019s involuntary separation\nfrom the child due to \u201clack of candor\u201d by wife did not break the strong bond defendants\nhad allowed plaintiff to develop with the child.\n\n\n\n1 The settled statement does not describe wife\u2019s misrepresentations, and the trial court\u2019s\nwritten ruling does not provide further details of how she misled the court.\n\n 2\n\f Defendants never questioned plaintiff\u2019s status as the child\u2019s biological father, a\nfact each defendant had known before the child was born. Wife led plaintiff to believe\nshe was separated but continued to cohabit with husband without plaintiff\u2019s knowledge.\nPlaintiff and wife were coworkers, and wife wanted to ensure other coworkers did not\nfind out about the affair, which caused plaintiff to refrain from seeking paternity leave\nfrom their employer. Plaintiff was involved with the child\u2019s early medical evaluations\nand treatment, openly held her out as his daughter, received her into his home, paid child\nsupport, and had regular visitation until defendants cut him off after he filed the instant\npetition. Plaintiff\u2019s close relatives (sister, nieces, and mother) also developed\nrelationships with the child. Plaintiff had thought the child bore his last name until he\nsaw a prescription bottle showing otherwise, when the child was about eight or nine\nmonths old.\n Plaintiff had regular overnight parenting that increased over time to every other\nweekend, and saw the child \u201cfrom time to time\u201d during the week, from when the child\nwas about seven months old until late in 2015, when this petition was filed.\n When the child was about 18 months old, all parties participated in autism\nscreening and therapy for her. Neither defendant refused plaintiff\u2019s informal child\nsupport payments, set in an amount determined by wife. Plaintiff only stopped paying\nwhen defendants refused to let him continue to see the child. Plaintiff respected the\nmarriage and wanted to co-exist with husband; in turn, husband was committed to\nmaintaining his marriage and conceded that if the roles were reversed he would want to\nbe recognized as a third parent.\n The trial court found \u201cno doubt\u201d the child was \u201cwell bonded to [plaintiff] and his\nextended family\u201d and that \u201che has established a strong, long and enduring bond with\u201d her\nthat defendants had allowed to form. Plaintiff and husband were each found to be a\npresumed father of the child. Weighing the two presumptions, the court found it\nappropriate to recognize all three adults as parents, otherwise the child would suffer\n\n 3\n\fdetriment. The judgment declares that the child has three parents who shall share\ncustody, with mediation to resolve any conflicts, and also adds plaintiff\u2019s last name to the\nchild\u2019s existing set of names, though not as her last name.\n Defendants timely appealed. We denied their interim petition for writ of\nsupersedeas, but granted their request for calendar preference.\n DISCUSSION\n Defendants head four different claims in their opening brief. The root of all their\nclaims is that the trial court erred in finding that plaintiff was a third parent.\n We first explain that we presume the trial court\u2019s findings are supported by the\nevidence. (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) Although\ndefendants purport to raise purely legal issues, \u201clegal issues arise out of facts, and a party\ncannot ignore the facts in order to raise an academic legal argument.\u201d (Western\nAggregates, Inc. v. County of Yuba (2002) 101 Cal.App.4th 278, 291.) \u201c[I]n addressing\n[their] issues we will not be drawn onto inaccurate factual ground.\u201d (Ibid.)\n I\n Three-Parent Finding\n Defendants primarily contend the trial court should not have found plaintiff was a\nthird parent under the relevant statutes, and make the subsidiary claims that such a\nfinding interferes with the state\u2019s interest in preserving the institution of marriage and\nimpinges on their parental rights. As we explain, we disagree.\n A. Preface\n We begin with the observation that defendants repeatedly rest their arguments on\nan inaccurate premise, that because by statute husband is conclusively presumed to be the\nchild\u2019s father, the child cannot have more than one father. In other words, they interpret\nthe \u201cconclusive\u201d presumption to be an \u201cexclusive\u201d presumption, the application of which\nprecludes the operation of any other presumptions of parenting. This view does not\ncomport with the statutory scheme or extant precedent.\n\n 4\n\f Centuries ago, noted legal reformer William Murray, Earl of Mansfield,\nreferenced a rule that spouses could not give evidence that a child born during the\nmarriage was not born of the marriage. (Goodright v. Moss (K.B. 1777) 2 Cowp. [vol. 2]\n591, 592 [98 Eng.Rep. 1257] [\u201cthe law of England is clear, that the declarations of a\nfather or mother, cannot be admitted to bastardize the issue born after marriage\u201d]; see\nBlack\u2019s Law Dict. (10th ed. 2014) Lord Mansfield\u2019s rule, p. 1086.) This generally meant\nthe child was conclusively presumed to be the husband\u2019s child; the rule and its accreted\ncorollaries and exceptions ensured a child would be deemed \u201clegitimate\u201d for various\nlargely antiquated reasons. (See Estate of Mills (1902) 137 Cal. 298, 301-304; Michael\nH. v. Gerald D. (1989) 491 U.S. 110, 124 [105 L.Ed.2d 91, 107] [\u201cThe presumption of\nlegitimacy was a fundamental principle of the common law\u201d]; Jaen v. Sessions (2d Cir.\n2018) 899 F.3d 182, 188; 10 Witkin, Summary of Cal. Law (11th ed. 2017) Parent and\nChild, Evidence of Marriage, \u00a7\u00a7 5, 15-20, pp. 35-36, 46-53; 1 Bishop, New\nCommentaries on Marriage, Divorce, and Separation (2d ed. 1891) The Marriage\nDisclosed in the Proofs of Pedigree and Legitimacy, \u00a7\u00a7 1167-1182, pp. 503-509\n[describing development of the rule and some exceptions]; Annot., Who May Dispute\nPresumption of Legitimacy of Child Conceived or Born During Wedlock (1979) 90\nA.L.R.3d 1032, \u00a7 2(a); Elrod, Child Custody Prac. & Proc. (Mar. 2018 update) Historical\nPerspective, \u00a7 1:3 [the presumption \u201cwas one of the strongest presumptions known to the\nlaw\u201d and was strengthened via Lord Mansfield\u2019s rule].) The presumption sets out a\nsubstantive legal rule in California. (See Kusior v. Silver (1960) 54 Cal.2d 603, 619;\nBrian C. v. Ginger K. (2000) 77 Cal.App.4th 1198, 1203-1204 (Brian C.).)\n \u201cThe Legislature . . . used this conclusive presumption fiction for three public\npolicy reasons, namely, (1) preservation of the integrity of the family; (2) protection of\nthe innocent child from the social stigma of illegitimacy; and (3) a desire to have an\nindividual rather than the state assume the financial burden of supporting the child.\u201d\n\n\n\n 5\n\f(In re Marriage of B. (1981) 124 Cal.App.3d 524, 529-530.) Thus, although originating\nin ancient social contexts, valid reasons for the rule remain.\n The presumption continues in California today: \u201cExcept as provided in Section\n7541, the child of a wife cohabiting with her husband, who is not impotent or sterile, is\nconclusively presumed to be a child of the marriage.\u201d (Fam. Code, \u00a7 7540.)2 In turn,\nsection 7541 allows blood tests to be used to rebut the presumption, provided the husband\nor presumed father moves for testing within two years of the child\u2019s birth. (\u00a7 7541, subd.\n(b).)\n \u201cThe law concerning children born to married women when there is a dispute over\npaternity is a latter-day admixture of ancient common law presumptions and ideas,\nstatutes, statutory interpretation and legislative acquiescence, common law accretion and\nconstitutional imperatives, all in the face of the technological ability, developed only\nrecently, to positively identify who a biological father really is.\u201d (Brian C., supra, 77\nCal.App.4th at pp. 1202-1203.) Since then, the Legislature has responded to new\nscientific advances and new ways people now choose to form relationships. But the legal\nchanges express a consistent desire to preserve stability for the innocent children who\nhave no control over what their various parents have chosen to do with their lives. (See,\ne.g., id. at pp. 1209, 1219; Rodney F. v. Karen M. (1998) 61 Cal.App.4th 233, 239-240\n(Rodney F.) [purported biological father with no relationship with a child born of a\nmarried couple could not overcome presumption husband was the father and upset\nconstitutionally protected family]; In re Marriage v. Freeman (1996) 45 Cal.App.4th\n1437, 1444-1447.)\n But husband here is not trying to avoid being labeled as a father in this case. He is\nnot trying to evade the force of the conclusive presumption, such as to avoid child\n\n\n\n\n2 Further undesignated statutory references are to the Family Code.\n\n 6\n\fsupport liability (cf., e.g., In re Marriage of B., supra, 124 Cal.App.3d 524), and the\njudgment recognizes that he is a father to the child. Instead, defendants are trying to\nprevent plaintiff--the biological father--from also being treated as a father to the child.\nThat is a critical difference under the statutory scheme, as we next explain.\n B. Application of the Statute\n As stated, there is no dispute that husband is presumed to be at least a father of the\nchild under section 7540. Plaintiff is also presumed to be a father, under section 7611,\nsubdivision (d), which provides that a person \u201cis presumed to be the natural parent\u201d if the\n\u201cpresumed parent receives the child into his or her home and openly holds out the child\nas his or her natural child.\u201d Defendants do not challenge the sufficiency of the evidence\nshowing that plaintiff has satisfied this statute. Therefore, they cannot deny that plaintiff\nis a presumed father under this statute. The question is whether he can be deemed a third\nparent, as the trial court deemed him.\n The pertinent bill (Sen. Bill No. 274 (2013-2014 Reg. Sess.)) included a statement\nof legislative intent as follows:\n\n \u201c(a) Most children have two parents, but in rare cases, children have more\n than two people who are that child\u2019s parent in every way. Separating a child from\n a parent has a devastating psychological and emotional impact on the child, and\n courts must have the power to protect children from this harm.\n\n \u201c(b) The purpose of this bill is to abrogate In re M.C. (2011) 195\n Cal.App.4th 197 insofar as it held that where there are more than two people who\n have a claim to parentage under the Uniform Parentage Act, courts are prohibited\n from recognizing more than two of these people as the parents of a child,\n regardless of the circumstances.\n\n \u201c(c) This bill does not change any of the requirements for establishing a\n claim to parentage under the Uniform Parentage Act. It only clarifies that where\n more than two people have claims to parentage, the court may, if it would\n otherwise be detrimental to the child, recognize that the child has more than two\n parents.\n\n\n\n\n 7\n\f \u201c(d) It is the intent of the Legislature that this bill will only apply in the\n rare case where a child truly has more than two parents, and a finding that a child\n has more than two parents is necessary to protect the child from the detriment of\n being separated from one of his or her parents.\u201d (Stats. 2013, ch. 564, \u00a7 1.)\n To advance the public policy reflected by these explicit legislative findings,\nsection 7612, subdivision (c) now provides as follows:\n\n \u201cIn an appropriate action, a court may find that more than two persons with\n a claim to parentage under this division are parents if the court finds that\n recognizing only two parents would be detrimental to the child. In determining\n detriment to the child, the court shall consider all relevant factors, including, but\n not limited to, the harm of removing the child from a stable placement with a\n parent who has fulfilled the child\u2019s physical needs and the child\u2019s psychological\n needs for care and affection, and who has assumed that role for a substantial\n period of time. A finding of detriment to the child does not require a finding of\n unfitness of any of the parents or persons with a claim to parentage.\u201d\n Defendants contend plaintiff lacked standing to bring this case because he could\nnot rebut the conclusive presumption that husband was the child\u2019s father. We disagree.\nThe \u201cdivision\u201d referred to by the quoted subdivision (\u201ca claim to parentage under this\ndivision\u201d) is division 12 of the Family Code, which governs parent and child\nrelationships. It begins with section 7500 and ends with section 7962. Therefore, both\ndefendant husband (by virtue of section 7540) and plaintiff (by virtue of section 7611,\nsubd. (d)) have \u201ca claim to parentage under this division\u201d as provided by section 7612,\nsubdivision (c). Under section 7630, subdivision (b), \u201c[a]ny interested party may bring\nan action at any time\u201d (italics added) to determine the existence, if any, of a parental\nrelationship under section 7611, subdivision (d). Thus, plaintiff had statutory authority to\nbring this action. (See J.R. v. D.P. (2012) 212 Cal.App.4th 374, 384; Kevin Q. v. Lauren\nW. (2009) 175 Cal.App.4th 1119, 1133 [\u201cThere are no time limits or standing\nrequirements for challenging, or asserting, a section 7611, subdivision (d)\npresumption\u201d].)\n The fact that defendant husband\u2019s claim to parentage arises from a conclusive\nstatutory presumption (\u00a7 7540) and plaintiff\u2019s claim arises from a rebuttable statutory\n\n\n 8\n\fpresumption (\u00a7 7611, subd. (d)), does not change the fact that each man has a claim that\narises \u201cunder\u201d division 12 of the Family Code. (See Brian C., supra, 77 Cal.App.4th at\npp. 1219-1221 [in part (at p. 1220) rejecting the \u201cludicrous result that a man could fit\nwithin a statutory category of presumed fatherhood and still not have standing to\nestablish paternity\u201d]; Miller v. Miller (1998) 64 Cal.App.4th 111, 116-117 [\u00a7 7630, subd.\n(b) gave standing to seek paternity to a man who claimed parentage based on \u00a7 7611,\nsubd. (d), notwithstanding the existence of a conclusively presumed father under \u00a7 7540];\nsee also Craig L. v. Sandy S. (2004) 125 Cal.App.4th 36, 43 [couple could have excluded\npurported biological father, but because they \u201callegedly permitted the biological father to\nreceive the child into his home and hold him out as his child, the biological father may\nassert the rebuttable presumption provided by section 7611, subdivision (d)\u201d] (Craig L.).)\n Defendants point to statements in part of the legislative history to argue the three-\nparent statute was not meant to be applied where a stable marriage exists. But the\nrelevant report explains that \u201ccases involving more than two parents are, almost by\ndefinition, complicated and will require courts to balance many competing interests\u201d and\nthe bill allows a three-parent result \u201cin very narrow situation when necessary to prevent\ndetriment to the child.\u201d (Assem. Com. on Jud., Rep. on Sen. Bill No. 274 (2013-2014\nReg. Sess.) as amended May 14, 2013, p. 6.) The report notes, consistent with the statute,\nthat the bill requires a showing of detriment to the child and that the court must act in\n\u201cthe child\u2019s best interest, including the need for stability\u201d before making a three-parent\norder. (Id. at p. 7.) If the Legislature wanted to limit the bill\u2019s application to cases where\nno stable marriage existed, it easily could have said so. Instead, it directed courts to\nconsider \u201call relevant factors.\u201d (\u00a7 7612, subd. (c).) We may not insert into a statute\nwords that are not there. (See Trackman v. Kenney (2010) 187 Cal.App.4th 175, 184-\n185.) \u201cIf the Legislature has provided an express definition, we must take it as we find it.\n[Citation.]\u201d (Adoption of Kelsey S. (1992) 1 Cal.4th 819, 826.)\n\n\n\n 9\n\f Defendants point to Rodney F., supra, 61 Cal.App.4th 233 in support of their\nclaim plaintiff lacked any standing once (in their view) the conclusive presumption that\nhusband was the child\u2019s father became unrebuttable after two years. But Rodney F. is\nfactually distinguishable. That case involved a purported biological father of the child\nborn of a marriage who had no contact with the child. He did not claim to have held the\nchild out as his own (cf. \u00a7 7611, subd. (d)). (Rodney F., at p. 236.) In those\ncircumstances, the appellate court held the conclusive presumption could not be rebutted,\nas the claimant was not a presumed father under section 7611. (Rodney F., at pp. 238-\n239.) Here, as just explained, plaintiff is a presumed father because he claimed (and\nthereafter proved) that he received the child into his home and held her out as his own,\nthereby conferring standing to press his \u201cclaim to parentage\u201d under section 7612,\nsubdivision (c).\n In re Donovan L. (2016) 244 Cal.App.4th 1075 is instructive. There, the appellate\ncourt acknowledged the conclusive presumption in favor of the husband, but then\nproceeded to examine the then-new three-parent statute, something it would have no\nreason to do if--as defendants in this case assert--such inquiry was rendered unnecessary\nby the conclusive presumption. (Id. at pp 1086-1094; see also In re M.Z. (2016) 5\nCal.App.5th 53, 64-66.) Ultimately, Donovan L. concluded it was not appropriate to find\nthe child had three parents because the biological father in that case lacked a parent-child\nrelationship with the child. (Donovan L., at pp. 1092-1094.) For that reason, the\nappellate court found the husband\u2019s conclusive presumption defeated the biological\nfather\u2019s claim to parentage. (Id. at p. 1094.) Here, a bonded relationship still existed,\nthough it was interrupted by defendants after this petition was filed, and further interfered\nwith by wife\u2019s misrepresentations. Contrary to defendants\u2019 view, Donovan L. implicitly\nsupports plaintiff\u2019s claim to parentage in this case. (See also Martinez v. Vaziri (2016)\n246 Cal.App.4th 373, 382-389 [reversing where claimant uncle had relationship with the\nchild but trial court took too narrow a view of detriment and denied his petition; the fact\n\n 10\n\fthe child had two parents and a stable placement did not mean child would not suffer\ndetriment from severance of relationship with uncle].)\n Similarly, in In re L.L. (2017) 13 Cal.App.5th 1302, a biological father\u2019s exclusion\nfrom his child\u2019s life during a period after he met the presumed parent criteria under\nsection 7612, subdivision (d) did not deprive him of presumed parent status. (L.L., at pp.\n1310-1312; see also In re J.O. (2009) 178 Cal.App.4th 139, 148-151.) That is, such\nstatus (i.e., having the child in his home) did not have to exist at the moment of the court\norder. However, the L.L. court reversed a three-parent finding because no substantial\nevidence showed the biological father there had an extant relationship with the child, a\nresult consistent with the Donovan L. holding. (L.L., at pp. 1315-1317.) In contrast, in\nthis case the trial court found extant bonds between plaintiff and the child were not\nbroken.\n The mere fact plaintiff and the child had not seen each other for some time before\nthe trial did not mean there was no extant bonded relationship, as defendants assert.\nDefendants point to a passage of a case stating: \u201cA judgment of presumed parenthood\nrepresents a finding that, at the time of entry of the judgment, the person qualified as a\npresumed parent.\u201d (In re Alexander P. (2016) 4 Cal.App.5th 475, 491.) We do not read\nthis language to mean that someone who is a presumed father under section 7611,\nsubdivision (d) necessarily or automatically loses such status merely because of a\ntemporal gap in visitation. Whether the bond remains intact at the time of judgment is a\nfact-bound decision for the trial court to make. Although defendants warp specific words\nand phrases from the court\u2019s ruling to argue it found no bond existed, the court found\nplaintiff \u201chas an existing and significant bond\u201d with the child. The passages on which\ndefendants rely addressed how to cure the interim harm to that extant bond caused by the\ninvoluntary separation defendants themselves caused.\n Section 7612, subdivision (b) provides: \u201cIf two or more presumptions arise under\nSection 7610 or 7611 that conflict with each other, or if a presumption under Section\n\n 11\n\f7611 conflicts with a claim pursuant to Section 7610, the presumption which on the facts\nis founded on the weightier considerations of policy and logic controls.\u201d Section 7611 in\npart references the conclusive presumption provided by section 7540, and also includes in\nsubdivision (d) the presumption relied on by plaintiff, based on his holding out the child\nas his own. Thus, as the trial court recognized, \u201cthe presumption which on the facts is\nfounded on the weightier considerations of policy and logic controls.\u201d (\u00a7 7612, subd.\n(b).) Policy in cases such as this has been set by the Legislature.\n In lieu of determining which one of the two (or more) presumptions should prevail\nto the exclusion of all competing presumptions, section 7612, subdivision (c), quoted\nante, now offers an alternative by allowing more than two parents to be recognized. A\ncourt may do so \u201cif the court finds that recognizing only two parents would be\ndetrimental to the child.\u201d In making such a finding, the court shall \u201cconsider all relevant\nfactors, including, but not limited to, the harm of removing the child from a stable\nplacement with a parent who has fulfilled the child\u2019s physical needs and the child\u2019s\npsychological needs for care and affection, and who has assumed that role for a\nsubstantial period of time.\u201d (\u00a7 7612, subd. (c).) There is no need to find that any of the\npersons with a claim to parentage are unfit, and no such finding was made herein.\n Although defendants do not head and directly argue a challenge to the sufficiency\nof the evidence, the tenor of their briefing--including their repeated claims that a \u201cstable\u201d\nmarriage exists and therefore the child does not need a third parent--invites us to expound\non the trial court\u2019s detailed findings.\n The trial court discussed all appropriate factors before making the \u201crare\u201d case\nfinding. The court distinguished this case from others where a married couple\nconsistently excluded a biological father, because here defendants allowed plaintiff (and\nhis close relatives) to establish a bond with the child. The court found the child \u201cmust be\nprotected from the detriment of being separated from one of her three parents. The court\nfinds it would be detrimental to [her] to recognize only two parents, thus separating her\n\n 12\n\ffrom either [husband or plaintiff]. Moreover, it would be detrimental to [the child] and\nher progress to not allow [both men] to participate in legal custody decision-making such\nas health and education. The evidence establishes [she] is a child who would benefit\ngreatly from the continued love, devotion and day to day involvement of three parents.\u201d\n The trial court gave \u201csignificant weight to the strong, long and enduring bond\nshared by [the child and plaintiff] from the time leading up to her birth and from her birth\nand following for more than three years. [Plaintiff] was deeply involved in [her] life until\nhe was unilaterally excluded from visits . . . after he filed his petition for custody. It is\nalso established [that husband] has a strong bond with [her] and has been part of her life\nsince she was born. Both [men] provided persuasive and convincing testimony regarding\n. . . their affection and love for [her. She] is fortunate, to have two devoted Fathers that\ncare deeply for her, love her and are prepared to continue to play an active role in her\nlife.\u201d Plaintiff wanted \u201cto respectfully co-exist with\u201d husband, who himself had admitted\n\u201cthat if he stood in [plaintiff\u2019s] shoes he would want to be acknowledged as a third parent\nand have a role as a parent.\u201d\n The trial court did not find defendants\u2019 desire to govern the child\u2019s medical care\nsufficient to tip the scales in their favor, and found \u201cit would be detrimental to [the child]\nif the court were to only recognize two parents when considering the evidence presented\non her autism diagnosis. . . . The court finds each parent has the ability to contribute to\nand support [the child] through her childhood as she engages in the required therapies\nassociated with her diagnosis to assist her in becoming a happy, healthy and self-\nsupporting adult.\u201d The relatively short time during which plaintiff had been excluded\nwas lengthened by wife\u2019s actions at an earlier hearing, resulting in an ill-informed ruling.\nBut that gap did not break the bond plaintiff had developed with the child for over three\nyears, and could be dealt with by a \u201cmeasured pace of reconnection facilitated by a\nprofessional.\u201d Nor would recognizing plaintiff\u2019s role remove the child from a stable\nhome; instead, restoring something akin to the prior schedule \u201callows for continued\n\n 13\n\fconsistency and stability\u201d and \u201cpreserves the bonds created by more than three years of\ncontinuing care and contact exercised by both [men.]\u201d\n Thus, the record shows that the trial court carefully and conscientiously conducted\nthe weighing process contemplated by the Legislature before finding that this was one of\nthe \u201crare\u201d cases permitted by statute, where a child truly has three parents, and depriving\nher of one of them would be detrimental to her.\n Defendants have not pointed to any part of the statutory scheme that exempts\nconclusive fathers under section 7540 from the text of the three-parent statute (\u00a7 7612,\nsubd. (c)) and its immanent purpose to preserve extant parent-child relationships. Nor\nhave they shown that the conclusive presumption under which defendant husband claims\nfatherhood vitiates the rebuttable presumption under which plaintiff claims fatherhood.\n(See Craig L., supra, 125 Cal.App.4th at pp. 50-51 [decided before three-parent statute;\ncourts resolve competing paternity claims by balancing factors, a per se rule \u201cin favor of\npreserving any marriage, without regard to the harm the child might suffer, is at direct\nodds with the entire statutory framework\u201d].)\n C. Constitutional Claims\n In two sparsely analyzed claims, defendants contend that if the statutory scheme\nauthorizes the result herein, it violates constitutional norms in two ways. First, they\ncontend it impinges on the state\u2019s right to protect marriage. Second, they contend it\nimpinges on their ability to exercise their parental rights. But defendants do not contend\nthe statutory scheme is facially unconstitutional, and their as-applied challenges falter on\nthe facts as found by the trial court.\n 1. Protecting Marriage\n Defendant\u2019s claim that the judgment attacks the institution of marriage fails\nbecause the state expresses its will primarily through statutes passed by the Legislature\nand signed by the Governor. (See, e.g., People v. Knowles (1950) 35 Cal.2d 175, 181-\n182.) By such means, the state now authorizes three-parent findings in \u201crare\u201d cases. (See\n\n 14\n\fStats. 2013, ch. 564, \u00a7 1(a).) The trial court, following the text of the relevant statutes,\nfound the child would suffer detriment if she had only two parents. (See \u00a7 7612, subd.\n(c).) The state\u2019s interests in promoting and defending both the institution of marriage and\nthe stability of a given child\u2019s life have been protected by the judgment under attack.\n Although state governments have long promoted marriage as a source of stability,\nwhat constitutes a marriage--and the scope of legislative authority over marriage--has\nlately been the subject of significant changes. (See In re Marriage Cases (2008) 43\nCal.4th 757; Obergefell v. Hodges (2015) 576 U.S. ___ [192 L.Ed.2d 609].) Today,\nstable social compacts that differ from the \u201ctraditional\u201d husband-and-wife combination\nare protected. This does not diminish the state\u2019s interest in protecting children and\nensuring that their best interests are promoted, regardless of the actions of their parents.\n The statute implemented by the judgment is carefully designed to avoid detriment\nto a child by the removal from his or her life of a true third parent. Indeed, as one court\nexplained, \u201c \u2018[d]etriment\u2019 was selected as a standard for permitting more than one\npresumed parent after the Governor vetoed a bill that would have made the decision\ndependent on the \u2018 \u201cbest interest of the child.\u201d \u2019 \u201d (In re Alexander P., supra, 4\nCal.App.5th at p. 497.) By heightening the standard that had to be met to declare a third\nparent, the Legislature was treading carefully. But defendants do not--and cannot--deny\nthat protecting children from detriment is a constitutionally valid public policy.\n Instead, defendants make the following claim:\n\n \u201cAssuming this Court holds that despite the conclusive presumption of\n Family Code section 7540, a child may have two fathers, it should require a court\n to take into account the state\u2019s interest in maintaining marriage in deciding\n whether it may be to the child\u2019s detriment to find that he or she has two parents.\n In other words, before a court may determine that a man with whom the mother\n had an affair while married to the child\u2019s conclusively presumed father under\n Family Code section 7540 may be a third parent under Family Code section\n 7612(c), it must first determine the effect such a determination will have on the\n marriage and on the stability of the subject child\u2019s life if the third parent ultimately\n ruins that marriage.\u201d (Italics added.)\n\n\n 15\n\f First, we observe that defendants provide no authority for the implicit proposition\nthat a child\u2019s detriment should be subordinated to a marriage\u2019s detriment. The adult\nparties to a marriage will either work out any marital challenges they face, or they will\nnot. But generally, even if a marriage fails, the parties thereto will remain lawful parents\nof any child therefrom.\n Second, the trial court did consider and address the status of the marriage as we\noutlined ante. Defendants paint plaintiff as a would-be homewrecker, and point out that\nthey have other children together who could be impacted by a divorce. But the trial court\nfound wife misled plaintiff, causing him to believe she and husband were separated.\nBefore the child was born, all parties knew plaintiff was the biological father and, with\nthat knowledge, defendants allowed plaintiff to parent the child and she bonded with him\nand his relatives. For defendants now to claim plaintiff poses such a severe threat to their\nmarriage that he should be excluded despite the finding that his exclusion would be\ndetrimental to the child rings hollow.\n Third, the trial court explicitly found defendants \u201cintend to remain married\nnotwithstanding [husband\u2019s] acknowledgement that he was stressed by the affair\u201d and\nthat at trial \u201che expressed his renewed commitment to [his wife].\u201d\n Fourth, the trial court found plaintiff \u201carticulated his goal to respectfully co-exist\nwith\u201d husband, to whom he had apologized for the situation he had unwittingly caused\nand had not been aware of husband\u2019s role in the child\u2019s life (due to concealment of facts\nby wife). Further, the court found plaintiff had no desire to supplant husband, but instead\nwanted \u201ca plan that would allow [the child] to have a relationship with all parents,\u201d and\nhusband acknowledged that if the men\u2019s positions were reversed, he, too, would want\npaternal recognition. Thus, the record shows both men understand and accept the\ndifficulties inherent in the situation neither of them caused and, to their credit, both want\nthe best outcome for the child.\n\n\n\n 16\n\f Prior cases--albeit predating the three-parent statute--have emphasized that the\nburden of a paternity finding similar to the one in this case may or may not threaten a\nparticular marriage, depending on the facts. (See, e.g., H.S. v. Superior Court (2010) 183\nCal.App.4th 1502, 1507; Craig L., supra, 125 Cal.App.4th at p. 51; Brian C., supra, 77\nCal.App.4th at pp. 1216-1219; Michael H. v. Gerald D. (1987) 191 Cal.App.3d 995, 1009\n[predating the three-parent statute and noting that on the facts of that particular case, \u201cthe\nsignificant interest of the state in protecting the welfare of [the child] is best served by\nupholding the conclusive presumption that Gerald D. is her legal father\u201d].)\n Thus, defendants\u2019 claim that the judgment under review unconstitutionally\nthreatens their specific marriage lacks any factual basis. And because defendants have\nnot argued the statute is unconstitutional in all applications, they have forfeited any such\nclaim. (See In re S.C. (2006) 138 Cal.App.4th 396, 408; In re Marriage of Nichols\n(1994) 27 Cal.App.4th 661, 672-673, fn. 3.)\n 2. Protecting Paternal Rights\n In another sparsely reasoned claim, defendants contend that by recognizing\nplaintiff as a father, husband\u2019s status as a father was diminished. Within this claim they\nalso assert their joint parental rights are diminished. These claims largely rest on the\nerroneous view about the \u201cconclusive\u201d presumption of husband\u2019s paternity that we have\nalready rejected.\n Defendants point out that \u201c \u2018[a] parent\u2019s right to care, custody and management of\na child is a fundamental liberty interest protected by the federal Constitution that will not\nbe disturbed except in extreme cases where a parent acts in a manner incompatible with\nparenthood.\u2019 \u201d (In re Marquis D. (1995) 38 Cal.App.4th 1813, 1828.) We agree. But\nwhat defendants overlook is that plaintiff, too, is a parent. He is the biological father of\nthe child, who has consistently supported her both financially and otherwise. As we have\nexplained, the fact defendant husband is conclusively presumed to be the child\u2019s father\ndoes not exclude the possibility that she may have a second father.\n\n 17\n\f Defendants do not challenge the facts showing that ousting plaintiff from the\nchild\u2019s life will cause her detriment. Regardless of how it happened, the fact remains that\nthe child\u2019s biological father is an important part of her life. For defendants to allow\nplaintiff to bond with the child and then cut him off when he tried to formalize the\narrangement threatened detriment to the child.3\n In short, we find no infringement of defendants\u2019 constitutional rights to parent the\nchild (and their other children) on the facts as found by the trial court.\n II\n Paternity Test\n Defendants contend the trial court had no legal basis to order a paternity test, in\npart because plaintiff lacked standing to request such a test.\n Putting aside the fact that the notice of appeal was taken from the March 14, 2017\njudgment and not from the much earlier February 16, 2016 testing order, the issue is\nmoot because we cannot undo that which was done. (See Consol. etc. Corp. v. United A.\netc. Workers (1946) 27 Cal.2d 859, 863; In re Pablo D. (1998) 67 Cal.App.4th 759, 761\n[\u201cwe cannot rescind services that have already been received\u201d].)\n\n\n\n\n3 Defendants could have prevented plaintiff from meeting the definition of a presumed\nfather by excluding him from the child\u2019s life from the moment of birth. (See Dawn D. v.\nSuperior Court (1998) 17 Cal.4th 932, 942 [biological father\u2019s desire to establish a\nrelationship with his child is not a fundamental liberty interest protected by the due\nprocess clause]; In re Kiana A. (2001) 93 Cal.App.4th 1109, 1114 [\u201cthe unwed biological\nfather of a child conceived during and born into an existing marriage may be barred by\nthe conclusive presumption from developing a relationship with the child against the\nmarried [couple\u2019s] wishes\u201d]; Rodney F., supra, 61 Cal.App.4th at p. 239.) But they did\nnot choose that avenue. They instead allowed plaintiff to form a bond with the child, pay\nsupport for her, hold her out as his own, receive her into his home, and introduce her to\nhis close relatives, with whom she bonded during the first three years of her life. (See\nCraig L., supra, 125 Cal.App.4th at p. 43 [couple could have excluded purported\nbiological father, but did not].) The end result of this series of decisions by defendants\nwas the situation facing the trial court.\n\n 18\n\f Moreover, as the trial court found, and as the trial testimony showed, neither\ndefendant disputed that plaintiff was the child\u2019s biological father. For over three years he\ntreated the child as his daughter with the consent of defendants. As plaintiff\u2019s counsel\ncorrectly points out, the testing merely provided evidence that was cumulative of what\neveryone already knew. Thus, if the testing order was made in error, defendants have not\nshown any prejudice. (Cal. Const., art. VI, \u00a7 13; Code Civ. Proc., \u00a7 475.)\n Finally, the statute under which the testing was ordered permits such testing in any\naction where paternity \u201cis a relevant fact.\u201d (\u00a7 7551.) Defendants argue that because of\nthe conclusive presumption that the husband is the child\u2019s father (\u00a7 7540) and the two-\nyear period for testing provided by a connected statute (\u00a7 7541, subd. (b)), there was no\npoint to ordering genetic testing, that is, it would not resolve any relevant fact involved in\nthis case. We have already answered that argument adversely to defendants.\n DISPOSITION\n The judgment is affirmed. Defendants shall pay plaintiff\u2019s costs on appeal. (See\nCal. Rules of Court, rule 8.278.)\n\n\n\n /s/\n Duarte, J.\n\n\nWe concur:\n\n\n\n /s/\nHull, Acting P. J.\n\n\n\n /s/\nMurray, J.\n\n\n\n 19\n\f"} -{"text": "\n193 U.S. 127 (1904)\nDELAWARE INDIANS\nv.\nCHEROKEE NATION.\nNo. 240.\nSupreme Court of United States.\nArgued December 1, 2, 1903.\nDecided February 23, 1904.\nAPPEAL FROM THE COURT OF CLAIMS.\n*128 Mr. Walter S. Logan, with whom Mr. Charles M. Demond was on the brief, for appellants.\nMr. John J. Hemphill and Mr. William T. Hutchings for respondents.\nMR. JUSTICE DAY delivered the opinion of the court.\nOn June 28, 1898, the Congress of the United States passed an act entitled \"An act for the protection of the people of the Indian Territory and other purposes.\" 30 Stat. 495. By the twenty-fifth section of the act it is provided:\n\"That before any allotment shall be made of lands in the Cherokee Nation, there shall be segregated therefrom by the commission heretofore mentioned, in separate allotments or otherwise, the one hundred and fifty-seven thousand six hundred acres purchased by the Delaware tribe of Indians from the Cherokee Nation under agreement of April eighth, eighteen hundred and sixty-seven, subject to the judicial determination of the rights of said descendants and the Cherokee Nation under said agreement. That the Delaware Indians residing in the Cherokee Nation are hereby authorized and empowered to *129 bring suit in the Court of Claims of the United States, within sixty days after the passage of this act, against the Cherokee Nation, for the purpose of determining the rights of said Delaware Indians in and to the lands and funds of said nation under their contract and agreement with the Cherokee Nation dated April eighth, eighteen hundred and sixty-seven; or the Cherokee Nation may bring a like suit against said Delaware Indians; and jurisdiction is conferred on said court to adjudicate and fully determine the same, with right of appeal to either party to the Supreme Court of the United States.\"\nUnder this section the present suit was prosecuted in the Court of Claims by the Delaware Indians residing in the Cherokee Nation, as a tribe and individually, joined by certain others suing for the surviving registered Delawares, their children, descendants and personal representatives, against the Cherokee Nation, for the purpose of determining the right of the Delaware Indians \"in and to the lands and funds of said nation\" under the contract and agreement with the Cherokee Nation dated April 8, 1867. This contract sets forth:\n\"Now, therefore, it is agreed between the parties hereto, subject to the approval of the President of the United States, as follows:\n\"The Cherokees, parties of the first part, for and in consideration of certain payments and the fulfillment of certain conditions hereinafter mentioned, agree to sell to the Delawares for their occupancy, a quantity of land east of the line of the 96\u00b0 west longitude, in the aggregate equal to one hundred and sixty acres for each individual of the Delaware tribe, who has been enrolled upon a certain register made February 18, 1867, by the Delaware agent, and on file in the Office of Indian Affairs, being the list of Delawares who elect to remove to the `Indian country,' to which list may be added, only with the consent of the Delaware council, the names of such other Delawares as may, within one month after signing of this agreement, desire to be added thereto, and the selections of the lands to be purchased by the Delawares may be made by said Delawares in *130 any part of the Cherokee reservation east of said line 96\u00b0 not already selected and in possession of other parties, and in case the Cherokee lands shall hereafter be allotted among the members of said nation, it is agreed that the aggregate amount of land herein provided for the Delawares to include their improvements according to the legal subdivisions when surveys are made (that is to say, one hundred and sixty acres for each individual), shall be guaranteed to each Delaware incorporated by these articles into the Cherokee Nation, nor shall the continued ownership and occupancy of said land by any Delaware so registered be interfered with in any manner whatever without his consent, but shall be subject to the same conditions and restrictions as are by the laws of the Cherokee Nation imposed upon native citizens thereof.\n\"Provided that nothing herein shall confer the right to alienate, convey or dispose of any such lands except in accordance with the constitution and laws of said Cherokee Nation.\n\"And the said Delawares, parties of the second part, agree that there shall be paid to the said Cherokees from the Delaware funds now held or hereafter received by the United States, a sum of money equal to one dollar per acre for the whole amount of one hundred and sixty acres of land for every individual Delaware who has already been registered upon the aforesaid list, made February 18, 1867, with the additions thereto heretofore provided for.\n\"And the Secretary of the Interior is authorized and requested to sell any United States stocks belonging to the Delawares to procure funds necessary to pay for said lands; but in case he shall not feel authorized, under existing treaties, to sell such bonds belonging to the Delawares, it is agreed that he may transfer such United States bonds to the Cherokee Nation, at their market value, at the date of such transfer.\n\"And the said Delawares further agree that there shall be paid from their funds now or hereafter to come into possession of the United States a sum of money which shall sustain the same proportion to the existing Cherokee national fund that *131 the number of Delawares registered as above mentioned and removing to the Indian country sustains to the whole number of Cherokees residing in the Cherokee Nation. And for the purpose of ascertaining such relative numbers the registers of the Delawares herein referred to, with such additions as may be made within one month from the signing of this agreement, shall be the basis of calculation as to the Delawares, and an accurate census of the Cherokees residing in the Cherokee Nation shall be taken under the laws of that nation within four months, and properly certified copies thereof filed in the Office of Indian Affairs, which shall be the basis of calculation as to the Cherokees.\n\"And that there may be no doubt hereafter as to the amount to be contributed to the Cherokee national fund by the Delawares, it is hereby agreed by the parties hereto that the whole amount of the invested funds of the Cherokees, after deducting all just claims thereon, is $678,000.\n\"And the Delawares further agree that in calculating the total amount of said national fund there shall be added to the said sum of $678,000 the sum of $1,000,000, being the estimated value of the Cherokee neutral lands in Kansas, thus making the whole Cherokee national fund $1,678,000; and this last mentioned sum shall be taken as the basis for calculating the amount which the Delawares are to pay into the common fund.\n\"Provided, that as the $678,000 of funds now on hand belonging to the Cherokees is chiefly composed of stocks of different values, the Secretary of the Interior may transfer from the Delawares to the Cherokees a proper proportion of the stocks now owned by the Delawares of like grade and value, which transfer shall be in part of the pro rata contribution herein provided for by the Delawares to the funds of the Cherokee Nation; but the balance of the pro rata contribution by the Delawares to said fund shall be in cash or United States bonds, at their market value.\n\"All cash, and all proceeds of stocks, whenever the same may fall due or be sold, received by the Cherokees from the *132 Delawares under the agreement, shall be invested and applied in accordance with the twenty-third article of the treaty with the Cherokees of August 11, 1866.\n\"On the fulfillment by the Delawares of the foregoing stipulations, all the members of the tribe registered as above provided, shall become members of the Cherokee Nation, with the same rights and immunities, and the same participation (and no other) in the national funds, as native Cherokees, save as hereinbefore provided.\n\"And the children hereinafter born of such Delawares so incorporated into the Cherokee Nation shall, in all respects, be regarded as native Cherokees.\"\nThe treaties which led up to this agreement are referred to in the contract and were ratified in 1866. The fifteenth article of the treaty of August 11, 1866, between the United States and the Cherokee Nation provided:\n\"Article XV. The United States may settle any civilized Indians, friendly with the Cherokees and adjacent tribes, within the Cherokee country, on unoccupied lands east of 96 degrees, on such terms as may be agreed upon by any such tribe and the Cherokees, subject to the approval of the President of the United States, which shall be consistent with the following provisions, viz: Should any such tribe or band of Indians settling in said country abandon their tribal organization, there being first paid into the Cherokee national fund a sum of money which shall sustain the same proportion to the then existing national fund that the number of Indians sustain to the whole number of Cherokees then residing in the Cherokee country, they shall be incorporated into and ever after remain a part of, the Cherokee Nation, on equal terms in every respect with native citizens. And should any such tribe, thus settling in said country, decide to preserve their tribal organizations, and to maintain their tribal laws, customs, and usages, not inconsistent with the constitution and laws of the Cherokee Nation, they shall have a district of country set off for their use by metes and bounds equal to one hundred and sixty acres, *133 if they should so decide, for each man, woman, and child of said tribe, and shall pay for the same into the national fund such price as may be agreed on by them and the Cherokee Nation, subject to the approval of the President of the United States, and in cases of disagreement the price to be fixed by the President.\n\"And the said tribe thus settled shall also pay into the national fund a sum of money, to be agreed on by the respective parties, not greater in proportion to the whole existing national fund and the probable proceeds of the lands herein ceded or authorized to be ceded or sold than their numbers bear to the whole number of Cherokees then residing in said country, and thence afterwards they shall enjoy all the rights of native Cherokees. But no Indians who have no tribal organizations, or shall determine to abandon their tribal organizations, shall be permitted to settle east of the ninety-sixth degree of longitude without the consent of the Cherokee national council, or of a delegation duly appointed by it, being first obtained. And no Indians who have and determine to preserve their tribal organizations shall be permitted to settle, as herein provided, east of the ninety-sixth degree of longitude without such consent being first obtained, unless the President of the United States, after a full hearing of the objections offered by said council or delegation to such settlement, shall determine that the objections are insufficient, in which case he may authorize the settlement of such tribe east of the ninety-sixth degree of longitude.\"\nArticle IV of the Delaware treaty, referred to in the agreement of April 8, 1867, is in the following terms:\n\"Article IV. The United States agree to sell to the said Delaware Indians a tract of land ceded to the government by the Choctaws and Chickasaws, the Creeks, or the Seminoles, or which may be ceded by the Cherokees in the Indian country, to be selected by the Delawares in one body in as compact a form as practicable, so as to contain timber, water, and agricultural lands, to contain in the aggregate, if the said Delaware *134 Indians shall so desire, a quantity equal to one hundred and sixty (160) acres for each man, woman, and child who shall remove to said country, at the price per acre paid by the United States for the said lands, to be paid for by the Delawares out of the proceeds of sales of land in Kansas, heretofore provided for. The said tract of country shall be set off with clearly and permanently marked boundaries by the United States; and also surveyed as public lands are surveyed, when the Delaware council shall so request, when the same may, in whole or in part, be allotted by said council to each member of said tribe residing in said country, said allotment being subject to the approval of the Secretary of the Interior.\"\nAt the time of moving upon these lands there were 985 registered Delawares, of whom 212 survived at the beginning of this suit, together with children and descendants of those deceased.\nThe agreement of April 8, 1867, was before this court in the case of the Cherokee Nation v. Journeycake, 155 U.S. 196. While the precise questions involved in the present controversy were not then before the court, the rights adjudicated turned upon the construction of the agreement of April 8, 1867, and its nature and the history of the events which led up to its execution by the parties thereto were the subjects of consideration and determination by this court. In that case it was held that under the agreement the registered Delawares were incorporated into the Cherokee Nation, and as members and citizens thereof were entitled to participate in the proceeds of the sale of a portion of the Cherokee lands upon equal terms with native Cherokee citizens. The claim is made that the contract of 1867 secured to the registered Delawares individually, or to the Delawares as a tribe, the 157,000 acres of land which were to be set off to them east of the ninety-sixth meridian. This agreement was made and entered into in pursuance of the treaty stipulations hereinbefore referred to. And while it may be regarded as arising from these preliminary treaties with the United States, the care with which it was *135 made and the evident intention of the parties to deal at arm's length with full knowledge of their respective rights and aims, leaves little to be gained from these preliminary treaties as an aid to construction, except as a means of placing ourselves in the situation of the parties when the contract was signed and delivered. It is the claim in behalf of the Delawares that if not technically an estate in fee, one was conveyed permanent in its character and transmissible by descent to the children and kin of the registered Delawares, or at least it was a holding which should endure so long as the Delawares and their descendants continued to exist as a tribe.\nIt was held in the Journeycake case to be the purpose of this agreement to incorporate the registered Delawares into the Cherokee Nation, with full participation in the political and property rights of citizens of that nation. As a part of the general agreement, provision is made for rights in certain lands as a home for the Delawares who are to remove from their Kansas lands to the Indian Territory. These lands are to pass to registered Delawares and they are to have the privilege of selecting them from unoccupied lands east of the line 96 degrees west longitude. This right is conferred not upon the Delaware Nation, but upon certain registered Delawares who are to be incorporated into the Cherokee Nation. To such is given a quantity of land equal in the aggregate to 160 acres for each registered Delaware, whose name is required to be entered upon a register to be filed in the Office of Indian Affairs, the lands thus conveyed being distinctly declared to be sold to the Delawares \"for their occupancy.\" This limitation, in what may be characterized as the habendum clause of the conveyance, does not import a holding beyond the life of the first taker, and is entirely inconsistent with the idea of permanency of tenure in the estate conveyed unless there is something in the nature of Indian titles to lands or in the terms of the instrument which requires an enlargement of an estate for occupancy into one the equivalent of a fee. It is argued that an estate of occupancy is the ordinary estate of the Indian tribes and *136 embraces all the title held by them, the fee remaining in the United States. There is nothing to prevent the United States if it chooses to convey a fee to the Indian tribes from so doing.\nIndeed, in the sixteenth clause of the treaty with the Cherokee Nation of August, 1866, it is provided that a fee may be conveyed to friendly Indians settled west of the ninety-sixth meridian. But for the present purpose, it is unnecessary to speculate as to the nature of the Indian title derived from the United States by treaty. The nature and extent of the Cherokee title has been settled by previous adjudications of this court. In the case of Cherokee Trust Funds, 117 U.S. 288, 308, it was held that the lands in the Cherokee Nation belonged to them as a political body, and not to its individual members, and speaking of the rights of individual Cherokees it was said: \"He had a right to use parcels of the lands thus held by the nation, subject to such rules as its governing authority might prescribe.\"\nThe lands of the Cherokee Nation are not held in individual ownership, but are public lands, though held for the equal benefit of all the members. Stephens v. Cherokee Nation, 174 U.S. 445, 488; Cherokee Nation v. Hitchcock, 187 U.S. 294. Under the patent issued to the Cherokees for their lands, whatever title conveyed was to the Cherokees as a nation, and no title was vested in severally in any of the Cherokees. Cherokee Nation v. Journeycake, 155 U.S. 196, 207.\nIn an agreement incorporating certain Delawares into the Cherokee Nation it is important to consider under what terms and conditions its citizens held and used the lands occupied by them. We are here dealing with the extent of the title conveyed as between Indian tribes, and the question is what did the Cherokees convey in the agreement to the Delawares who came within the terms of the compact and who were to be incorporated into the Cherokee Nation. In addition to the limitations expressed in the conveyance, \"for occupancy,\" we find other terms of the instrument inconsistent with the grant of a perpetual estate. It is provided that in case the Cherokee *137 lands shall hereafter be allotted among the members of said nation, the aggregate amount of land provided for the Delawares to include their improvements according to the legal subdivisions when surveys are made (that is to say, one hundred and sixty acres for each individual), shall be guaranteed to each Delaware incorporated by the articles into the Cherokee Nation. The lands which are for occupancy of the Delawares are described as \"Cherokee lands,\" and a provision made which secures 160 acres to include their improvements to each registered Delaware in case of allotment. If the full title was intended to be transferred to the Delawares, either as a tribe or individually, this stipulation to secure the rights of the Delawares in the contingency named was entirely superfluous. Further, the contract reads: \"Nor shall the ownership and occupancy of said lands by any Delawares so registered be interfered with in any manner whatsoever without his consent, but shall be subject to the same conditions and restrictions as are by the laws of the Cherokee Nation imposed upon the native citizens thereof. Provided, that nothing herein shall confer the right to alienate, convey or dispose of any such land except in accordance with the constitution and laws of said Cherokee Nation.\"\nThese stipulations, wholly inconsistent with the full title of the Delawares to the lands in question, must be read in the light of the constitution and laws of the Cherokee Nation as to the holding of land by Cherokee citizens.\nThe provisions of the Cherokee constitution and the statutes passed in pursuance thereof pertinent to the subject are collected in the opinion of the Court of Claims in the Journeycake case, and are cited in a note to the opinion of this court in the same case. 155 U.S. 196, 207. From them it is apparent that lands to be held upon the same terms as the Cherokees hold their lands cannot be alienated by those who occupy and hold them, but the ownership is lodged in the Cherokee Nation. The individual has no right to alienate or lease the lands. The nation grants and restricts the right of occupancy. The title *138 to the lands is vested in the government, to be held and controlled in such wise as to promote the general welfare. Under these restrictions and conditions the registered Delawares held the lands set apart for their occupancy. In the laws of the Cherokee Nation we find that the use of the terms \"for use and occupancy\" was not an unfamiliar form of expression in describing the character and limitation upon the right of private ownership. Thus in the act relating to the public domain, and reserving tracts of lands one mile square along railroads at stations, and providing for the sale of town lots, it is provided that the purchaser shall acquire no other rights than those of use and occupancy. If the lands in question were granted in perpetuity to the Delawares, we have the awarding of an estate of this character carved out of lands recognized in the agreement as continuing to be Cherokee lands, belonging to the nation which expressly limits the conveyance of its lands to its own citizens for use and occupancy only. Again, if it was intended to provide for the children or heirs of the first takers \u0097 the registered Delawares \u0097 we should expect to find some words in the agreement competent for that purpose, conceding that the technical terms of the common law to create an estate in fee need not have been used. As to the children of the registered Delawares we find this specific provision: \"And the children hereafter born of such Delawares so incorporated into the Cherokee Nation shall in all respects be regarded as native Cherokees.\" This provision is utterly inconsistent with the grant of an estate in the lands to survive the \"occupancy\" of the registered Delawares. Such children are to have the rights of native Cherokees and no more. Their parents were incorporated into the Cherokee Nation with certain specific rights; the children were to stand upon an equality with their adopted brethren of the Cherokee blood.\nThe importance of the issue now distinctly made as to the title to these lands has led us to give renewed examination to the question of the extent and character of the interest conveyed to the Delawares, in the lands in controversy. In the *139 Journeycake case, while it is true that the precise question was not the same as is now presented, full consideration to all the terms of this contract was given in order to determine the interests of the Delawares in the Cherokee lands sold, and the court, speaking by Mr. Justice Brewer, used this pertinent language, the force of which has not been diminished in the light of subsequent examination aided by the arguments and briefs of counsel now presented: \"So far as the provision in the agreement for the purchase of homes is concerned, it will be perceived that no absolute title to these homes was granted. We may take notice of the fact that the Cherokees in their long occupation of this reservation had generally secured homes for themselves; that the laws of the Cherokee Nation provided for the appropriation by the several Cherokees of lands for personal occupation, and that this purchase by the Delawares was with the view of securing to the individual Delawares the like homes; that the lands thus purchased and paid for still remain a part of the Cherokee reservation. And as a further consideration for the payment of this sum for the purchase of homes the Delawares were guaranteed not merely the continued occupancy thereof, but also that in case of a subsequent allotment in severally of the entire body of lands among the members of the Cherokee Nation, they should receive an aggregate amount equal to that which they had purchased, and such a distribution as would secure to them the homes upon which they had settled, together with their improvements. So that if, when the allotment was made, there was for any reason not land enough to secure to each member of the Cherokee Nation 160 acres, the Delawares were to have at least that amount, and the deficiency would have to be borne by the native Cherokees pro rata. In other words, there was no purchase of a distinct body of lands, as in the case of the settlement of other tribes as tribes within the limits of the Cherokee reservation. The individual Delawares took their homes in and remaining in the Cherokee reservation, and as lands to be considered in any subsequent allotment in severally among the members of *140 the Cherokee Nation. All this was in the line of the expressed thought of a consolidation of these Delawares with and the absorption of them into the Cherokee Nation as individual members thereof. If it be said that all of the Delaware trust funds were not turned into the national fund it will be remembered that there was no impropriety in the reservation of a part thereof in order to enable the Delawares to make such improvements as they might desire on the tracts that they selected for homes, and also that there was no certainty that all the members of the Delaware tribe would elect to remove to the Cherokee country, and that those who remained in Kansas were entitled to their share in the Delaware national funds.\"\nIf such be the true construction of the agreement, it is nevertheless insisted that it should not be literally enforced in view of the understanding of the parties, more particularly of the Delawares, that they were thereby receiving full title to the occupied lands. To establish this contention it is claimed that in view of the character of the contracting parties they should not be held to the strict rule of evidence which denies the competency of parol testimony to contradict written agreements, and a class of cases is cited of which Worcester v. Georgia, 6 Pet. 515, may be taken as an example. The language of Mr. Justice McLean is quoted, in which he said (p. 582):\n\"The language used in treaties with the Indians should never be construed to their prejudice. If words be made use of which are susceptible of a more extended meaning than their plain import, as connected with the tenor of the treaty, they should be considered as used in the latter sense. . . . How the words of the treaty were understood by this unlettered people, rather than their critical meaning, should form the rule of construction.\"\nBut the learned Justice was here dealing with a treaty negotiated between the representatives of the United States and those of the Indians, wherein the disparity of the contracting parties in education and knowledge of law and the use of language is obvious.\n*141 The contract of April 7, 1867, was negotiated between representatives of Indian nations meeting upon equal terms. In the testimony of John G. Pratt, called for the Delawares, and at one time Indian agent for the Delaware agency, it appears:\n\"Question. Do you know whether or not the agreement frequently referred to in your testimony was read over to the two delegations representing the Delawares and Cherokee tribes of Indians?\n\"Answer. It was read over repeatedly; read over and corrected and altered and read over again several times, and each party put in his suggestions, until they finally harmonized.\n\"Question. Then, as I understand, the agreement, as finally signed, expressed the wishes of both sides, and both sides were fully satisfied with all it contained?\n\"Answer. No; the Delawares were not satisfied, but they signed because it was the best they could do. They wanted to own the land outright.\n\"Question. They did not contend at any time afterwards that the agreement did not fully express what they intended to express, did they?\n\"Answer. No, sir; I did not hear anything of that kind.\"\nWe can perceive no room in this case for a departure from the familiar rules of the law protecting written agreements from the uncertainties of parol testimony. The testimony offered was in the main that of interested persons nearly thirty years after the agreement had been reduced to writing and signed by the parties thereto. Nor can we find a latent ambiguity in the terms of the contract which requires the admission of parol testimony to explain its effect. In the light of the circumstances and the language used in the writing, its construction is not rendered difficult because of latent ambiguities. It is claimed as a cogent circumstance, which should be considered in construing this agreement, that the Cherokee Nation received one dollar per acre for these lands \u0097 a sum sufficient to cover their full value, and of consequent importance in determining the character of the estate conveyed. *142 In the Journeycake case it was held that, in consideration of the sum paid for citizenship rights, the Delawares obtained an interest in the lands of the Cherokee Nation, although the same were not considered in making up the sum paid for what has been denominated the right of citizenship. In that case it is pointed out that at the time the agreement under consideration was made the Cherokee Nation possessed, in addition to the \"neutral\" lands in Kansas, which were estimated at $1,000,000 in making up the total of the Cherokee national fund of $1,678,000 upon the basis of which the Delawares paid into the common fund \u0097\n\n\n\"Strip\" lands in Kansas (about) ........... 400,000 acres.\nLands west of 96 degrees, Indian Territory,\n (about) ................................ 8,000,000 \"\nLands east of 96 degrees, Indian Territory\n Home reservation (about) ............... 5,000,000 \"\n\nIn that case it was held that the Delawares acquired a right in the distribution of the proceeds, not only of the Kansas lands, but as well in such sales as were made of this vast domain held by the Cherokee Nation. Of this feature of the agreement Mr. Justice Brewer, in the Journeycake case, says: \"Neither should too much weight be given to the fact that the Delawares were to pay for their homes at the rate of one dollar an acre, for by that purchase they acquired no title in fee simple, and it is not unreasonable to believe that the price thus fixed was not merely as compensation for the value of the lands, (to be taken in the eastern portion of the reservation, where the body of the Cherokees had their homes, and therefore probably the most valuable portion of the entire reservation,) but also as sufficient compensation for an interest in the entire body of lands, that interest being like that of the native Cherokees, limited to a mere occupancy of the tracts set apart for homes, with the right to free use in common of the unoccupied portion of the reserve, and the right to share in any future allotment.\"\n*143 We conclude, then, that the registered Delawares acquired in these lands only the right of occupancy during life, with a right upon allotment of the lands, to not less than 160 acres together with their improvements, and the children and descendants of such Delawares took only the rights of other citizens of the Cherokee Nation as the same are regulated by its laws.\nThe bill further seeks to exclude from the allotment of Cherokee lands and funds certain citizens alleged to have been illegally admitted to citizenship, thereby wrongfully diminishing the shares of the Delawares in the common property. At the time of the agreement of April 7, 1867, the constitution, secs. 2 and 5, of the Cherokee Nation had been amended to read:\n\"SEC. 2. The lands of the Cherokee Nation shall remain common property until the national council shall request the survey and allotment of the same, in accordance with the provisions of article 20th of the treaty of 19th July, 1866, between the United States and the Cherokee Nation.\n\"SEC. 5. No person shall be eligible to a seat in the national council but a male citizen of the Cherokee Nation, who shall have attained to the age of twenty-five years, and who shall have been a bona fide resident of the district in which he may be elected at least six months immediately preceding such election. All native-born Cherokees, all Indians, and whites legally members of the nation by adoption, and all freedmen who have been liberated by voluntary act of their former owners or by law, as well as freed colored persons who were in the country at the commencement of the rebellion, and are now residents therein, or who may return within six months from the 19th day of July, 1866, and their descendants who reside within the limits of the Cherokee Nation, shall be taken and deemed to be citizens of the Cherokee Nation.\"\nThese constitutional provisions were in full force when the Delawares acquired their rights and when they were incorporated, or, as the agreement expressed it, \"consolidated,\" with *144 the Cherokee Nation. Under its terms the Delawares have participated in political rights and have taken part in the government of the nation. It is claimed that these amendments were illegally adopted for want of compliance with authorized methods for amending the national constitution. But the nation has never undertaken to set them aside or call in question their force and effect. They were in the fundamental law when the Delawares were made a part of the Cherokee Nation and the rights exercised were only those belonging to the nation when the Delawares saw fit to subject themselves to the laws of a new nation of which they were to become a component part upon equal terms with other citizens. The Cherokee Nation has many of the rights and privileges of an independent people. They have their own constitution and laws and power to administer their internal affairs. They are recognized as a distinct political community and treaties have been made with them in that character. Cherokee Trust Fund Cases, 117 U.S. 288. It is not reasonable to suppose that in the act under which these proceedings were brought it was intended to authorize inquiry into the administration of the political affairs of the Cherokee Nation with a view to setting aside the adoption of constitutional amendments and the revision of political action in admitting persons to citizenship in the nation under authority of its constitution. The same conclusion disposes of the contention of the appellants that relief can be granted in this case in respect to alleged maladministration of the financial affairs of the Cherokee Nation with a view to holding it to account in favor of the Delawares prosecuting this suit. We are authorized by the enabling act to determine the contractual rights of the Delawares in the national lands and funds, not to overhaul the political and administrative action of the Cherokee Nation.\nThe act authorizing this suit contemplates a determination of the rights and interest of the Delawares residing in the Cherokee Nation in the lands and funds of the Cherokee Nation under the compact of April, 1867. That it was the purpose *145 of Congress to have a full and final determination of such rights is further shown in the Cherokee allotment act of July 1, 1902. Section 23 of this act provides:\n\"SEC. 23. All Delaware Indians who are members of the Cherokee Nation shall take lands and share in the funds of the tribe, as their rights may be determined by the judgment of the Court of Claims, or by the Supreme Court if appealed, in the suit instituted therein by the Delawares against the Cherokee Nation, and now pending; but if said suit be not determined before said commission is ready to begin the allotment of lands of the tribe as herein provided, the commission shall cause to be segregated one hundred and fifty-seven thousand six hundred acres of land, including lands which have been selected and occupied by Delawares in conformity to the provisions of their agreement with the Cherokees dated April eighth, eighteen hundred and sixty-seven, such lands so to remain, subject to disposition according to such judgment as may be rendered in said cause; and said commission shall thereupon proceed to the allotment of the remaining lands of the tribe as aforesaid. Said commission shall, when final judgment is rendered, allot lands to such Delawares in conformity to the terms of the judgment and their individual rights thereunder. Nothing in this act shall in any manner impair the rights of either party to said contract as the same may be finally determined by the court, or shall interfere with the holdings of the Delawares under their contract with the Cherokees of April eighth, eighteen hundred and sixty-seven, until their rights under said contract are determined by the courts in their suit now pending against the Cherokees, and said suit shall be advanced on the dockets of said courts and determined at the earliest time practicable.\"\nThese acts contemplate a judgment of the court which shall determine the rights of the Delawares and Cherokees in the lands and funds of the Cherokee Nation in such wise as to enable a division to be made conformable to the rights of the parties as judicially determined. The Court of Claims rendered *146 a decree dismissing the bill. Whilst agreeing with the conclusions reached in that court, as to the rights of the Delawares, we think the bill was broad enough in its allegations and prayer for relief to require a definite settlement of the rights in controversy. Instead of dismissing the bill we think a decree should have been entered finding the registered Delawares entitled to participate equally with Cherokee citizens of Cherokee blood in the allotment of lands of the Cherokee Nation, with the addition that if there is not enough land to give to each citizen of the nation 160 acres, then the registered Delawares shall be given that quantity, together with their improvements. In all other respects the Cherokee citizens, whether of Delaware or Cherokee blood, should be given equal rights in the lands and funds of the Cherokee Nation. The decree dismissing the bill is so modified as to conform to the terms just stated; and as so modified it is\nAffirmed.\n"} -{"text": " COURT OF APPEALS\n SECOND DISTRICT OF TEXAS\n FORT WORTH\n\n NO. 02-14-00425-CR\n\nMichael Roy Short \u00a7 From the 297th District Court\n\n \u00a7 of Tarrant County (1343102D)\n\nv. \u00a7 July 30, 2015\n\n \u00a7 Opinion by Chief Justice Livingston\n\nThe State of Texas \u00a7 (nfp)\n\n JUDGMENT\n\n This court has considered the record on appeal in this case and holds that\n\nthere was no error in the trial court\u2019s judgment. It is ordered that the judgment of\n\nthe trial court is affirmed.\n\n\n SECOND DISTRICT COURT OF APPEALS\n\n\n\n By /s/ Terrie Livingston\n Chief Justice Terrie Livingston\n\f"} -{"text": "\n810 F.Supp. 674 (1993)\nHOWARD OAKS, INC.\nv.\nMARYLAND NATIONAL BANK, MNC Financial, Inc.\nCiv. No. S 92-3331.\nUnited States District Court, D. Maryland.\nJanuary 13, 1993.\n*675 Murray L. Deutchman, Rockville, MD, for plaintiff.\nClifford C. Whitney, III, J. Preston Turner, Maryland Nat. Bank, Office of Sp. Assets Counsel, Baltimore, MD, for defendant.\n\nMEMORANDUM OPINION\nSMALKIN, District Judge:\nThis is a case removed to this Court on the basis of two federal claims pleaded in the plaintiff's state court complaint, filed originally in the Circuit Court for Baltimore City, Maryland. That complaint followed the plaintiff's unsuccessful attempt, in the Circuit Court for Baltimore County, to vacate a confessed judgment in the amount of some $8,000,000.00 entered against it at the behest of Maryland National Bank (MNB), in consequence of defaulted loans. Judge Levitz of the Baltimore County court held that Howard Oaks, in the 33 page affidavit of its sole shareholder and CEO, Mr. Miller, had failed to show the existence of any meritorious defense. Howard Oaks immediately maneuvered to stave off the effect of the judgment by appealing it (and Judge Levitz's order denying the motion to vacate) to the Court of Special Appeals of Maryland. Howard Oaks took other steps, as well, to prevent Maryland National from collecting on its judgment, including the filing of a Suggestion of Bankruptcy with the Court of Special Appeals, which resulted in a stay, issued by that Court, of the appeal pending further order of the Bankruptcy Court. A few months later, while Maryland National was precluded from enforcing its judgment by Howard Oaks' defensive *676 maneuvers, Howard Oaks seized the offensive by suing Maryland National Bank and its parent, Maryland National Financial, in the Baltimore City suit, making a number of claims typical of \"lender malpractice\" suits. Indeed, the very filing of such a suit, in which the borrower essentially blames the lender for its business failure, might remind the lay observer of Danton's famous exhortation to the Legislative Assembly, \"Il nous faut de l'audace, encore de l'audace, toujours de l'audace,\" see Bartlett's Familiar Quotations (15th ed. 1980) at 412 n. 1, but the fact is that the Court of Special Appeals of Maryland has labelled the proliferation of such suits a \"growth industry.\" Parker v. Columbia Bank, 91 Md.App. 346, 351, 604 A.2d 521, cert. denied, 327 Md. 524, 610 A.2d 796 (1992).\nPresently, the suit is pending on the defendants' motion to dismiss, which has been briefed. Although the Court warned counsel that the present motion would be treated as a motion for summary judgment because it was accompanied by materials outside the pleading, the Court has, in the event, treated it as a motion to dismiss under Rule 12(b)(6), by confining its analysis to the legal sufficiency of the allegations of the complaint. No oral hearing on the motion is needed. Local Rule 105.6, D.Md.\nThe motion to dismiss will be granted for the reasons set forth below. Keeping in mind that the Court must take the allegations of the complaint as true, it still must be dismissed if it fails to allege essential elements of the claims asserted or is otherwise not maintainable as a matter of law.\nFirst, the Court agrees that the complaint alleges no cognizable claims against MNC Financial, nor does it allege any conduct that would justify piercing the corporate veil between MNB and MNC Financial under settled principles of law. Cf. Call Carl, Inc. v. BP Oil Corp., 391 F.Supp. 367, 371 (D.Md.1975), aff'd. in part and rev'd. in part on other grounds, 554 F.2d 623 (4th Cir.), cert. denied, 434 U.S. 923, 98 S.Ct. 400, 54 L.Ed.2d 280 (1977). In that the complaint fails to state any meritorious claim, though, this question is rather academic.\nThe Court begins its analysis of defendants' first issue, res judicata, by noting that, although it is on appeal, the judgment rendered in Baltimore County is entitled in this Court to receive full faith and credit, i.e., the same preclusive effect as it would be given in a state court of Maryland. Confessed judgments are judgments on the merits, entitled to preclusive effect under Maryland law, see Boyce v. Plitt, 274 Md. 333, 335-36, 335 A.2d 101 (1975), and the fact that an appeal is lodged does not necessarily disturb the finality of the judgment.\nThe finality of the Baltimore County judgment, however, does not, under Maryland law, preclude the plaintiff from maintaining this action. In Rowland v. Harrison, 320 Md. 223, 577 A.2d 51 (1990), the Court of Appeals noted that, because Maryland does not have a compulsory counterclaim rule, a matter that could be raised either as a defense or as an affirmative claim for relief is not barred by res judicata simply because it was not raised in a prior proceeding between the parties. To bar the action, it must have been actually litigated, in which case it is the principle of collateral estoppel, not res judicata, that bars the claim. 320 Md. at 236 n. 5, 577 A.2d 51. It is clear that none of plaintiff's claims was actually litigated in the Baltimore County proceeding.\nThis, however, is cold comfort to the plaintiff, because its allegations do not state facially meritorious claims under the governing law.\nCount I is defective because it does not contend that the written credit agreement between the parties was breached (except perhaps in a way asserted in other counts that will be dealt with below, such as the alleged breach of the duty of good faith). Rather, it contends that there were assurances, oral and written, beyond the face of the loan documents, that bound MNB to continue to fund Howard Oaks. Lender malpractice suits based on such \"side agreements\" are precisely the sort of *677 mischief that the Maryland legislature intended to curtail by enactment of Md.Cts. & Jud.Proc.Code Ann. \u00a7 5-317 (1989 repl. vol.), which clearly bars the claim attempted to be asserted in Count One.\nEven if not barred by that statute, Count I, alleging breach of a stated intent to make further loans, would merely amount to a claim that defendant breached an intention to enter into a further loan agreement in the future, which is not actionable under Maryland law. See Phoenix Mutual Life Ins. Co. v. Shady Grove Plaza Ltd. Partnership, 734 F.Supp. 1181, 1186 (D.Md.1990), aff'd. table, 937 F.2d 603 (4th Cir.1991).\nCount II also fails on the face of the complaint, because the complaint itself establishes the plaintiff as a sophisticated creation of a sophisticated businessman, whose reliance on the alleged fraudulent inducements of MNB was unreasonable as a matter of Maryland law, given the parties' relationship and the loan contracts actually executed between them (according to the complaint itself), which stated finite loan limits. See Phoenix Mutual, supra, 734 F.Supp. at 1192. See also, Foremost Guar. Corp. v. Meritor Sav. Bank, 910 F.2d 118, 123-26 (4th Cir.1990). Although reasonableness of reliance is sometimes a question of fact that should await trial or summary judgment, this case is unusual in that the complaint itself shows the level of Miller's sophistication, as well as the sophistication of the deal as a whole. Thus, a motion to dismiss, based on the allegations of the complaint, is in order, and the issue need not await a motion for summary judgment.\nThe Court notes that, in its opposition, plaintiff has offered to dismiss Counts III and IV, but that offer was not to dismiss them with prejudice. In that there is other litigation between the parties in state court involving these claims (at least potentially), the interests of judicial economy indicate that this Court should address whether the claims have legal merit or not, rather than simply accept their voluntary dismissal.\nAs to Count III, the undersigned disagrees with the decision of Senior Judge Murray in Quality Automotive Co. v. Signet Bank/Maryland, 775 F.Supp. 849 (D.Md.1991), which recognized a Maryland tort cause of action for breach of the duty of good faith in commercial dealings, arising from \u00a7 1-203 of the Uniform Commercial Code (U.C.C.). First, the U.C.C. should not be looked to as a source for tort duties or causes of action by implication; it was clearly intended only to give form to the commercial law of contract, not to be a source of tort law. Second, the Court is convinced that the authority relied upon by Judge Murray is unsound and would not be accepted by the Court of Appeals of Maryland. See Wilson v. Ford Motor Co., 656 F.2d 960 (4th Cir.1981). Rather, this Court holds that, under the U.C.C. as well as the general law of Maryland, there is no independent duty of good faith in commercial dealing enforceable by an action ex delicto. Under U.C.C. \u00a7 1-203, the duty of good faith is an accompaniment to the exercise of contractual rights and the performance of contractual duties; unless the contract itself obligates a party to perform a certain duty, no independent duty of good faith compels it to do so. See Parker v. Columbia Bank, supra, 91 Md.App. at 366, 604 A.2d 521. Cf. Republic Ins. Co. v. Board of County Comm'rs., 68 Md.App. 428, 432, 511 A.2d 1136 (1986) (no tort remedy of \"bad faith\" for failure to perform contract duty). The Court also holds that Count IV, to the extent that it asserts a tort claim for \"bad faith\" outside the U.C.C., is expressly barred by Maryland law. Republic Insurance Co., supra, at 432, 511 A.2d 1136.\nNext, the Court is of the opinion that Count V is also barred. Maryland does not recognize a cause of action for negligent breach of contract, see Heckrotte v. Riddle, 224 Md. 591, 595-96, 168 A.2d 879 (1960), and this complaint utterly fails to allege a claim under the \"negligent processing\" rule in Jacques v. First National Bank of Maryland, 307 Md. 527, 515 A.2d 756 (1986), in that there is no allegation here of extraordinary circumstances (such as those in Jacques involving purchase of a personal residence). Rather, this was *678 merely a commercial financing arrangement between a bank and its sophisticated business customer, in which no Jacques duty inhered. See e.g., G & M Oil Co. v. Glenfed Financial Corp., 782 F.Supp. 1085, 1089 (D.Md.1991); Flow Ind., Inc. v. Fields Constr. Co., 683 F.Supp. 527, 530 (D.Md.1988).\nCount VI, claiming for breach of fiduciary duty, is also meritless. The complaint fails to allege the degree of \"takeover\" that warrants imposition of a fiduciary duty on a lender either under Maryland's interpretation of her own law, see Parker v. Columbia Bank, supra, 91 Md. App. at 369-70, 604 A.2d 521, or under the Fourth Circuit's interpretation of the general law in the field, see NCNB v. National Bank v. Tiller, 814 F.2d 931, 936 (4th Cir. 1987), overruled on other grounds, 896 F.2d 833, 841 n. 8 (4th Cir.1990). Here, the complaint simply alleges measures taken by MNB to help keep the debtor afloat and to protect its own interests. The law does not require the lender to refrain from such exercise of prudence at the risk of becoming a fiduciary \"big brother\" to its customer. See, e.g., James E. McFadden, Inc. v. Baltimore Contractors, Inc., 609 F.Supp. 1102 (E.D.Pa.1985).\nCount VII, in which the plaintiff attempts to assert a claim for violation of the Equal Credit Opportunity Act, 15 U.S.C. \u00a7 1691(d)(1) (ECOA), also fails, because plaintiff has not alleged a necessary predicate for such liability, viz., its submission of a \"completed application\" under 12 C.F.R. \u00a7 202.1(f). In its opposition, plaintiff admits never having submitted a \"formal application,\" but argues that the defendant bank was supplied with \"additional information in the forms of letters and documents.\" Under the plain language of the regulation, ECOA liability cannot rest upon anything but a \"completed application,\" and Count VII does not state that a \"completed application\" was ever submitted. Of course, the complaint here, filed as it was in state court, was not subject to Fed.R.Civ.P. 11 when filed, see Fed. R.Civ.P. 81(c), but the Court is quite sure that, mindful of Maryland Rule 1-311(b), the plaintiff would not have alleged that it had submitted a \"completed application\" unless it had, beforehand, undertaken a factual and legal review to assure itself that what it submitted in fact had amounted to Maryland National's requirement for a \"completed application\" as defined in the pertinent regulation. Plaintiff did not so allege. Certainly, in any attempt to amend at this juncture, the strictures of Federal Civil Rule 11 would clearly require that the appropriate legal and factual investigation be carried out before the amendment could be made. But, as it stands, Count VII is fatally defective, as it was in the state court when filed.\nCount VIII, the RICO claim, is facially defective under settled law of this Circuit, primarily for its failure to show the requisite pattern and continuity for a RICO claim in this Circuit. See Menasco, Inc. v. Wasserman, 886 F.2d 681 (4th Cir.1989). This case involves but one alleged wrongdoer, but one alleged victim, but one transaction, and, most of all, no racketeering enterprise. See, e.g., Benard v. Hoff, 727 F.Supp. 211, 214 (D.Md.1989); United States v. Tillett, 763 F.2d 628, 631 (4th Cir.1985). Thus, although plaintiff has indicated a willingness voluntarily to dismiss Count VIII, the Court will dismiss it under Rule 12(b)(6) for failure to state a claim.\nIn short, despite the prolix accusations of the complaint, it only can be reasonably read as showing: that the plaintiff, a commercial venture run by a sophisticated businessman, was lent money by the defendant MNB; that money was not enough \u0097 in the plaintiff's opinion \u0097 to fund its ventures; that the defendant MNB watched out for its own commercial interests by monitoring the plaintiff and suggesting fiscal improvements; and that the plaintiff's ventures failed. This is precisely the kind of meritless dispute between lender and defaulting commercial borrower that the courts, in the cases cited hereinabove and a legion of others, have been quick to put to rest, as this Court will do here.\nFor the reasons stated, an order will be entered separately, granting the defendants' motion, and dismissing all counts of *679 the complaint for failure to state a claim upon which relief can be granted. Fed. R.Civ.P. 12(b)(6).\n\nORDER\nFor the reasons stated in a Memorandum Opinion entered this date, it is, by the Court, this 13th day of January, 1993, ORDERED:\n1. That the defendants' motion to dismiss BE, and it hereby IS, GRANTED;\n2. That the complaint herein BE, and it hereby IS, DISMISSED, for failure to state a claim upon which relief can be granted, Fed.R.Civ.P. 12(b)(6); and\n3. That the Clerk mail copies hereof to counsel.\n"} -{"text": "324 F.2d 38\nEASTERN AIR LINES, INC., Appellant,v.Joan A. SILBER and William Silber, her husband, Appellees.\nNo. 20116.\nUnited States Court of Appeals Fifth Circuit.\nNov. 6, 1963.\n\nA. Lee Bradford, A. H. Toothman and Dixon, DeJarnette, Bradford, Williams, McKay & Kimbrell, Miami, Fla., for appellant.\nJ. Arthur Hawkesworth, Jr., Miami, Fla., for appellees.\nBefore TUTTLE, Chief Judge, and BROWN and BELL, Circuit Judges.\nTUTTLE, Chief Judge.\n\n\n1\nThis is an appeal from a judgment of the trial court based on a jury verdict giving damages to the appellees for injuries suffered by the wife during the operation of a flight of appellant's aircraft. The jury was fully warranted to find that during a flight of the airplane, while in view of a storm at a distance estimated by the pilot at not less than five miles, it reacted suddenly and violently to air turbulence causing Mrs. Silber to be thrown from her seat, resulting in injury to her back. At the time of the occurrence it is undisputed that no signal had been given to the passengers to fasten their seat belts, the aircraft's radar was not operating, although appellant's witnesses testified that distance from a storm could be more accurately gauged by the use of radar, and also that estimates of distance from a storm were, in effect, unreliable when made based on visual means alone. Without attempting to recite the evidence more fully, we conclude that there was sufficient evidence to warrant submission of the case to the jury as to appellant's negligence.\n\n\n2\nThe only substantial point raised by appellant on this appeal is one paragraph of the charge to the jury dealing with the measure of care owed by the carrier. Since this paragraph must be considered in light of the remaining instructions touching on the same subject matter, we quote here the entire charge of the court dealing with the standards of care:\n\n\n3\n'I charge you that merely because a person suffers an injury while flying as a passenger on a scheduled flight does not in and of itself create any liability on the part of the carrier. A common carrier of passengers such as an airline is required to exercise with respect to its passengers the highest degree of care consistent with practical operation of the conveyance. It must use such degree of care, not only with respect to the operation of the conveyance, but also with respect to its equipment, its maintenance and the adjustment of all of its parts. However, a common carrier is not required to guarantee the safety of its passengers against all injuries, but only those which the exercise of the highest degree of care could have averted.\n\n\n4\n'Furthermore, a passenger on a common carrier is required to exercise reasonable care for his or her own safety and is chargeable with knowledge of conditions which his or her senses record.\n\n\n5\n'While the defendant owes a high degree of care, in this case you must judge its conduct by the circumstances. The more likelihood of danger requires greater care. The less likelihood of danger requires less care. So as to each case of this kind, you must judge the conduct of the defendant as to what would have been reasonable action under the circumstances in view of the high degree of care with which they are charged.\n\n\n6\n'A passenger on an airplane accepts as his responsibility certain conditions. It is well known that an airplane does not travel on a fixed rigid path. There are necessarily variations in the line of flight over which the airline and its employees have no control. If you find that the airline knew or should have known of the likelihood of turbulence at the time and place of the incident described by the witnesses in this case, then the defendant or its employees would be obligated to warn the passengers if they had sufficient time to do so, after they knew or should have known of turbulence likely to affect the flight of the ship.\n\n\n7\n'On the other hand, if the defendant's employees operating the plane had no knowledge of any turbulence likely to affect the flight of the ship, by the exercise of reasonable care on their part, then there would be no liability for injuries suffered by passengers because of the defendant's failure to warn them of unexpected air turbulence.\n\n\n8\n'It is common knowledge that airplanes have not yet achieved the constant stability in flight so that the pilot can maintain an even, steady flight on a direct plane, and this is known or should be known to passengers. Air turbulence in this case had without contradiction been referred to as clear air turbulence. There can be no liability on the part of the defendant to either plaintiff unless the pilot and co-pilot of this plane knew or should have known of the clear air turbulence to have avoided it or to have warned the passengers so that they could have fastened their seat belts.\n\n\n9\n'If it is possible to determine that under certain conditions down-drafts are likely, then it would be the duty of the plane operator in exercising the high degree of care required, to take whatever precautions are necessary to guard against dangerous consequences.\n\n\n10\n'You are instructed that in determining whether the defendant acted in a reasonably prudent manner considering all the circumstances and the high degree of care with which it is charged, you may consider what equipment was used or could have been used by the defendant to determine weather conditions under the conditions forecast and/or prevailing at the time of this accident.'\n\n\n11\nThe part of the charge objected to by appellant is the paragraph reading: 'If it is possible to determine that under certain conditions down-drafts are likely, then it would be the duty of the plane operator in exercising the high degree of care required, to take whatever precautions are necessary to guard against dangerous consequences.' Read standing by itself, it would appear that this paragraph is not properly adjusted to the trial of the case before the court, or it would appear that some language intended to be included was left out. However, viewed in light of the sentence immediately preceding this paragraph, we conclude that as to any part of the paragraph objected to by the appellant, it did not constitute substantial error in explaining to the jury the standard of care owed by the appellant to its passengers.\n\n\n12\nFollowing the statement, 'There can be no liability on the part of the defendant to either plaintiff unless the pilot and co-pilot of this plane knew or should have known of the clear air turbulence to have avoided it or to have warned the passengers so that they could have fastened their seat belts,' it seems to us clear that the language of the challenged paragraph merely means that if, in fact, the pilot and co-pilot of this plane had determined that the conditions existed under which 'down-drafts are likely,' then it would be their duty to exercise whatever precautions were necessary to guard against dangerous consequences. We do not construe the language to mean that the airline was required, under an absolute duty, to determine the likely presence of the air turbulence that here produced the injury. We think the objection made by appellant's counsel to this paragraph of the charge reached only this point. It did not accept to the charge on the ground that it was not adjusted to the facts of the case.\n\n\n13\nAppellant also complains of the repeated use by the trial court of terminology indicating that the appellant was required to exercise the high, or the highest degree of care consistent with operation of the airline. We think these several references to the high degree of care are not unwarranted since they are primarily found in reference to the court's statement to the jury as to the application of the standard in certain hypothetical situations presented by the trial judge.\n\n\n14\nThe trial appearing to be without other error, the judgment is\n\n\n15\nAffirmed.\n\n"} -{"text": "\n341 S.E.2d 394 (1986)\nHERCULES, INC. and Aetna Casualty & Surety Company\nv.\nJames Daniel STUMP.\nRecord No. 1088-85.\nCourt of Appeals of Virginia.\nArgued December 3, 1985.\nDecided March 18, 1986.\nEdwin C. Stone (Clifford L. Harrison, Spiers, Stone, Hamrick & Wall, on briefs), for appellants.\n*395 John W.L. Craig II (Jenkins, Quigley & Craig, on brief), for appellee.\nPresent: KOONTZ, C.J., and COLEMAN and MOON, JJ.\nCOLEMAN, Judge.\nHercules, Inc. and Aetna Casualty & Surety Company (collectively, employer) appeal from a decision of the Industrial Commission finding that a knee injury suffered by the appellee, James Daniel Stump (claimant), in a slip and fall on a stairway arose out of his employment. The Commission found that the injury arose out of the employment because \"the conditions of ... [claimant's] employment required ... [him] to ascend and descend this particular stairway with regularity and thereby to assume a degree of risk inherent in traversing that particular obstacle.\" Because the finding of whether an injury \"arose out\" of the employment is a mixed question of law and fact, Park Oil Co. v. Parham, 1 Va.App. 166, 168, 336 S.E.2d 531, 532 (1985), we must determine whether the facts presented are sufficient as a matter of law to justify the Commission's finding. We find that they are, and affirm.\nThe employee has the burden to show by a preponderance of evidence an injury by accident arising out of and in the course of his employment. See Code \u00a7 65.1-7. The employer does not dispute that the injury resulted from an accident which occurred during the course of claimant's employment since it occurred within the period of employment, at a place where the employee was reasonably expected to be, and while doing something which was reasonably incident to his employment. Norfolk & Washington Steamboat Co. v. Holladay, 174 Va. 152, 157, 5 S.E.2d 486, 488 (1939). The sole issue is whether the accident arose out of his employment.\nAll accidental injuries which occur in the course of employment are not necessarily compensable under the Workers' Compensation Act. To be compensable, an injury must grow out of the risks particular to the nature of the work. \"Risks to which all persons similarly situated are equally exposed and not traceable to some special degree to the particular employment are excluded.\" Dreyfus & Co. v. Meade, 142 Va. 567, 570, 129 S.E. 336, 337 (1925).\nEmployer, citing Dreyfus, contends that an injury arising from a slip and fall on a stairway which was not shown to be unusual or defective is not compensable because the injury arose from a hazard to which claimant would have been equally exposed apart from the employment. We disagree. The injury does not have to result from an unusual or defective condition; rather it must be caused by conditions which are particularly related to or associated with the work or work environment.\nThe phrase \"arising out of\" contained in Code \u00a7 65.1-7 refers to the \"origin or cause of the injury.\" Baggett & Meador Cos. v. Dillon, 219 Va. 633, 637, 248 S.E.2d 819, 822 (1978). An injury arises out of the employment\nwhen there is apparent to the rational mind upon consideration of all the circumstances, a causal connection between the conditions under which the work is required to be performed and the resulting injury. Under this test, if the injury can be seen to have followed as a natural incident of the work and to have been contemplated by a reasonable person familiar with the whole situation as a result of the exposure occasioned by the nature of the employment, then it arises \"out of\" the employment. But ... [t]he causative danger must be peculiar to the work and not common to the neighborhood.... [I]t must appear to have had its origin in a risk connected with the employment, and to have flowed from that source as a rational consequence.\nId. at 637-38, 248 S.E.2d at 822. (emphasis added) (citations omitted). \"In deciding whether a claim arises out of the employment,... `[t]he facts in no two cases are identical and to a certain extent each case must stand alone.'\" Richmond Memorial Hospital v. Crane, 222 Va. 283, 286, 278 S.E.2d 877, 879 (1981). (citation omitted).\n*396 The facts in this case are not in dispute. On January 7, 1985, while at work, claimant was descending a wooden stairway located outdoors on employer's premises when his foot \"slipped out from under [him] and when [he] hit the ground [his] knee twisted, it popped out of place.\" The wooden stairway, which led down to a gravel roadway, was regularly traversed by other employees in going to and from the nearest available restroom facilities. Although the stairway was subjected to the elements, claimant noticed nothing unusual or defective about the steps prior to his accident.\nImmediately after the fall, claimant was examined by Dr. Kenneth Gray at the employer's clinic. Dr. Gray found a mild tear in the medial collateral ligament of claimant's right knee, which necessitated open knee surgery. On February 8, 1985, during surgery, Dr. Gray also observed and repaired two tears in the menisco cartilage which, he noted, \"appeared to be quite recent.\" Although claimant acknowledged having had difficulty with his right knee before the industrial accident, he testified that any prior injuries had occurred long before and were 100% healed.\nWe conclude that the facts clearly support the Commission's finding that a causal connection existed between the claimant's injury and the conditions under which he was performing a function during and incidental to his employment. The conditions peculiar to the employment required claimant to regularly ascend and descend the stairway provided by employer as the only access to restroom facilities for employees working in that area. Any risks in traversing that particular obstacle were inherent to the employment environment.\nThe case of Reserve Life Insurance Co. v. Hosey, 208 Va. 568, 159 S.E.2d 633 (1968), controls the present case and supports the Commission's finding. In Hosey, the claimant, who was conducting a door-to-door survey for her employer concerning hospital insurance, felt a sharp, severe pain in her knee as she climbed the top step to one of the residences she called upon. In affirming the award of compensation by the Commission, the Supreme Court approved the finding that a factual situation was presented from which the rational mind could conclude that the work environment, the rock steps which she was climbing, was a contributing cause of the injury. The Court noted that climbing the steps was a condition incidental to the employment of conducting the surveys and that in this particular incident the steps were just a little bit higher than usual. Id. at 571-72, 159 S.E.2d at 634-35.\nThe employer urges that Crane, 222 Va. 283, 278 S.E.2d 877, and Badische Corp. v. Starks, 221 Va. 910, 275 S.E.2d 605 (1981), limit the usefulness of Hosey in resolving the issues in this case. In Crane, Mrs. Crane, a registered nurse, felt something snap in the lower back portion of her right leg, later diagnosed as a muscle tear, as she was walking along a level, clear, unobstructed and well-lighted corridor. In reversing the Commission's award of compensation to Mrs. Crane, the Court noted: \"She did not slip, stumble or fall. Nothing in her work environment contributed to her injury. The rational mind, upon consideration of all the circumstances, cannot reasonably conclude that there was a causal connection between the conditions under which her work was required to be performed and the resulting injury.\" 222 Va. at 286, 278 S.E.2d at 879. Additionally, in noting the factual distinctions between the employment conditions in Mrs. Crane's situation and those in Hosey, the Court said that \"the work environment was to some degree a contributing cause of [Mrs. Hosey's] injury. Unlike ... [Crane], Mrs. Hosey was climbing steps, not walking along a level corridor, and, more importantly, the steps `were just a little bit higher' than usual.\" Id.\nEmployer contends that the fact that the steps in Hosey \"`were just a little bit higher than usual'\" was vital to the outcome of that case, and that had an \"ordinary\" stairway been involved there would have been a different result. We disagree. The Court's reference in Crane to the height of *397 the steps merely emphasized an additional factor peculiar to the work environment which further distinguished the factual situation in Hosey from that in Crane, which involved a \"level, clean, unobstructed corridor.\" Id. at 285-86, 278 S.E.2d at 879.\nIn Badische Corp., the Court cited Hosey with approval for the proposition that an injury by accident, to be compensable, must arise from an identified incident, such as in Hosey where \"the claimant in the course of her employment was making a door-to-door survey ... [and as] she reached the top of a flight of stone steps her knee caught and snapped.\" Badische Corp., 221 Va. at 912, 275 S.E.2d at 606. Neither Crane nor Badische Corp. limit Hosey in a manner that controls our decision here.\nThe facts in this case are even more compelling than in Hosey. Similar to Hosey, claimant was descending a stairway that was integral to his employment environment because it was used by employees to perform tasks both directly and incidentally related to their employment. While we find that that factual situation alone was sufficient from which the rational mind could conclude that the work environment was to some degree a contributing cause of the injury, the nature and location of the outdoor wooden stairway, which was subjected to the elements, constituted an additional factor peculiar to this work environment, similar to the higher steps in Hosey. The nexus between conditions of the work environment which contributed to the risk or hazard and the occurrence of an identifiable movement or incident related to the work environment which caused the injury are apparent to the rational mind.\nClaimant suffered an obvious sudden mechanical or structural change to his body as the result of an identifiable movement or incident. He testified that as a result of the slip his knee twisted when he hit the ground and, \"it popped out of place.\" The medical examination which immediately followed and the subsequent surgery substantiate claimant's account that an obvious sudden mechanical or structural change occurred.\nThe Commission's finding that claimant sustained an injury by accident arising out of his employment is supported by credible evidence and is sufficient to sustain the award. The award is therefore affirmed.\nAFFIRMED.\n"} -{"text": " Slip Op. 11-20\n\n UNITED STATES COURT OF INTERNATIONAL TRADE\n\n\n MARSAN GIDA SANAYI VE TICARET\n A.S.,\n\n Plaintiff, Before: Richard W. Goldberg,\n Senior Judge\n v. Court No. 09-00483\n\n UNITED STATES,\n Defendant.\n\n\n\n OPINION\n\n[Plaintiff\u2019s Motion for Judgment on the Agency Record is denied and the final results of the\ncountervailing duty changed circumstances review are sustained.]\n\n Dated: February 16, 2011\n\nLaw Offices of David L. Simon (David L. Simon), for the Plaintiff.\n\nTony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy,\nAssistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice\n(Joshua E. Kurland); Office of the Chief Counsel for Import Administration, U.S. Department of\nCommerce (Deborah R. King), Of Counsel, for the Defendant.\n\n Goldberg, Senior Judge: Marsan Gida Sanayi ve Ticaret A.S. (\u201cMarsan\u201d or\n\n\u201cPlaintiff\u201d), a Turkish producer and exporter of pasta brought this appeal to contest the final\n\nresults of the changed circumstances review of the countervailing duty order on pasta from\n\nTurkey, published as Certain Pasta from Turkey: Final Results of Countervailing Duty Changed\n\nCircumstances Review, 74 Fed. Reg. 54,022 (Dep\u2019t Commerce Oct. 21, 2009) (\u201cFinal Results\u201d).\n\nThe changed circumstances review examined whether Marsan was the successor-in-interest to\n\fCourt No. 09-00483 Page 2\n\n\n\nGidasa for countervailing duty cash deposit purposes. Commerce determined that Marsan was\n\nnot the successor to Gidasa. Id. at 54,023.1 Consequently, Commerce determined that Marsan\u2019s\n\nmerchandise was not entitled to Gidasa\u2019s countervailing duty cash deposit rate, and instead,\n\nshould enter under the \u201call others\u201d cash deposit rate of 9.38 percent. Id. Marsan challenges the\n\nmethodology Commerce employed and its final determination as unsupported by substantial\n\nevidence and contrary to law.\n\n Background\n\n A. Commerce\u2019s Position on CVD CCRs\n\n In December 2006, several years prior to Marsan\u2019s petitions for an antidumping (\u201cAD\u201d)\n\nand countervailing duty (\u201cCVD\u201d) changed circumstances review (\u201cCCR\u201d), Commerce stated it\n\nmight change the successor-in-interest analysis for CVD CCRs. See Stainless Steel Sheet and\n\nStrip in Coils from the Republic of Korea: Preliminary Results of Countervailing Duty Changed\n\nCircumstances Review, 71 Fed. Reg. 75,937 (Dep\u2019t Commerce Dec. 19, 2006) (\u201cStainless\n\nSteel\u201d).\n\n Thus, in January 2007, Commerce published a Federal Register notice indicating its\n\nintention to change the successorship analysis in CVD CCRs. Countervailing Duty Changed\n\nCircumstances Reviews: Request for Comment on Agency Practice, 72 Fed. Reg. 3,107 (Dep\u2019t\n\nCommerce Jan. 24, 2007) (\u201cRequest for Comment\u201d). At that time, Commerce applied the same\n\ncriteria for both AD and CVD successor-in-interest CCRs to examine whether an alleged\n\nsuccessor and predecessor company were the same business entity. Commerce\u2019s criteria\n1\n Commerce determined that Marsan was the successor to Gidasa for antidumping duty cash deposit purposes.\nCertain Pasta from Turkey: Notice of Final Results of Antidumping Duty Changed Circumstances Review, 74 Fed.\nReg. 26,373 (Dep\u2019t Commerce June 2, 2009).\n\fCourt No. 09-00483 Page 3\n\n\n\ncompared the companies\u2019 (1) management; (2) production facilities; (3) supplier relationships;\n\nand (4) customer base before and after the changed circumstances. Id. at 3,108. Commerce\n\nstated it may not be appropriate to use the same analysis, given that AD and CVD determinations\n\nfocus on different issues. Id. Commerce noted the analysis focused on pricing behavior, which\n\nis less relevant in the CVD context where subsidization, not price discrimination, is the\n\nanalytical focus. Id.\n\n According to Commerce, \u201can examination that focuses largely or solely on changes in the\n\nlegal or managerial structure or the productive capacity of a company may overlook other\n\nimportant considerations that also may be relevant in the context of subsidies and countervailing\n\nduties.\u201d Id. In response to the Request for Comment, Commerce received comments from two\n\nparties, which were summarized in the Preliminary Results of Marsan\u2019s CVD CCR, published\n\nas Certain Pasta from Turkey: Preliminary Results of Countervailing Duty Changed\n\nCircumstances Review, 74 Fed. Reg. 47,225 (Dep\u2019t Commerce Sept. 15, 2009) (\u201cPreliminary\n\nResults\u201d).\n\n B. Marsan\u2019s CVD CCR\n\n In August 2007, the Sabanci Group, a Turkish conglomerate and then-owner of Gidasa,\n\nagreed to sell Gidasa to MGS Marmara Gida for cash. In March 2008, the parties finalized the\n\nagreement. In June 2008, Gidasa\u2019s new shareholders changed the name of the company to\n\nMarsan. In December 2008, Marsan filed petitions requesting that Commerce conduct CCRs for\n\nboth the AD and CVD orders on pasta from Turkey.2 Marsan asserted it was the successor-in-\n2\n Notice of Countervailing Duty Order: Certain Pasta from Turkey, 61 Fed. Reg. 38,546 (Dep\u2019t Commerce July 24,\n1996); Notice of Antidumping Duty Order and Amended Final Determination of Sales at Less Than Fair Value: Certain\nPasta From Turkey, 61 Fed. Reg. 38,545 (Dep\u2019t Commerce July 24, 1996).\n\fCourt No. 09-00483 Page 4\n\n\n\ninterest to Gidasa for purposes of those orders. Thus, Marsan claimed it was entitled to Gidasa\u2019s\n\nAD and CVD cash deposit rates.\n\n On January 28, 2009, Commerce published its Notice of Initiation regarding Marsan\u2019s\n\nCVD CCR.3 Notice of Initiation of Countervailing Duty Changed Circumstances Review:\n\nCertain Pasta from Turkey, 74 Fed. Reg. 4,938 (Dep\u2019t Commerce Jan. 28, 2009) (\u201cNotice of\n\nInitiation\u201d). Commerce reiterated that the successor-in-interest test used in AD and CVD CCRs\n\nmight not \u201cfully address whether it is appropriate to apply the CVD cash deposit rate of a\n\npreviously examined company\u201d to a different company claiming to be its successor. Id. at 4,939.\n\nReferencing its language from Stainless Steel and its Request for Comment, Commerce\n\nspecifically stated that it did not intend to apply the AD CCR successor-in-interest methodology\n\nin Marsan\u2019s CVD CCR to determine whether Marsan was the successor to Gidasa for CVD cash\n\ndeposit purposes. Id.\n\n In September 2009, Commerce published the Preliminary Results of Marsan\u2019s CVD\n\nCCR. Commerce announced that, in consideration of the comments it received, and drawing on\n\nthe Department\u2019s experience, it would be utilizing a new successor-in-interest methodology for\n\nCVD CCRs, including Marsan\u2019s CVD CCR. Preliminary Results, 74 Fed. Reg. at 47,227.\n\nUnder the new CVD CCR successor-in-interest methodology, Commerce makes \u201can affirmative\n\nCVD successorship finding (i.e., that the successor company is the same subsidized entity for\n\nCVD cash deposit purposes as the predecessor company) where there is no evidence of\n\nsignificant changes in the respondent\u2019s operations, ownership, corporate or legal structure\u201d that\n3\n Commerce also published a Notice of Initiation for the AD CCR in January 2009. Notice of Initiation of\nAntidumpting Duty Changed Circumstances Review: Certain Pasta from Turkey, 74 Fed. Reg. 681 (Dep\u2019t\nCommerce Jan. 7, 2009).\n\fCourt No. 09-00483 Page 5\n\n\n\ncould have affected the nature and extent of the company\u2019s subsidy levels. Id. Commerce\n\nprovided a non-exhaustive list of the changes it considered \u201csignificant and would affect the\n\nnature and extent of the requesting party\u2019s subsidization: (1) changes in ownership, other than\n\nregular buying and selling of publicly owned shares held by a broad array of investors; (2)\n\ncorporate mergers and acquisitions involving the respondent\u2019s consolidated or cross-owned\n\ncorporate family and outside companies; and (3) purchases or sales of significant productive\n\nfacilities.\u201d Id. at 47,227-28.\n\n In addition, under the new methodology, where a change occurs in a company\u2019s\n\noperations, ownership, corporate, or legal structure that is not reflected in the abovementioned\n\nnon-exhaustive list, Commerce will assess whether the \u201cchange could affect the nature and\n\nextent of the respondent\u2019s subsidization.\u201d Id. at 47,228. Commerce outlined additional non-\n\nexhaustive, objective criteria for this assessment: \u201c(1) [c]ontinuity in the cross-owned or\n\nconsolidated respondent company\u2019s financial assets and liabilities; (2) continuity in its\n\nproduction and commercial activities; and (3) continuity in the level of the government\u2019s\n\ninvolvement in the respondent\u2019s operations or financial structure (e.g., government ownership or\n\ncontrol, the provision of inputs, loans, equity).\u201d Id. According to Commerce, the particular\n\ncriteria \u201cbetter reflect [the] aspects of a company that are most impacted by, the target of, or the\n\nvehicle for subsidy benefits.\u201d Id. Commerce also highlighted that the successor-in-interest\n\nanalysis focuses on whether a significant change occurred and not whether those changes, in\n\nfact, affected a company\u2019s subsidization. Id.\n\fCourt No. 09-00483 Page 6\n\n\n\n Using the new criteria, Commerce preliminarily determined that Marsan was not the\n\nsuccessor to Gidasa for CVD cash deposit purposes because there was a significant change in the\n\ncompany\u2019s operations, ownership, corporate, or legal structure. Commerce reasoned that the\n\nchange in ownership was a significant change because new investors and a new corporate entity\n\nowned and controlled all of Gidasa\u2019s assets, including its facilities and brand names. Id.\n\nAccording to Commerce, these changes \u201ccould impact the nature and extent of the respondent\u2019s\n\nsubsidization.\u201d Id. However, Commerce did not analyze whether the change of ownership\n\nactually affected Marsan\u2019s subsidy levels because that analysis is only appropriate in a full\n\nadministrative review. Id.\n\n Ultimately, Commerce determined that Marsan\u2019s merchandise was not entitled to enter\n\nunder the CVD cash deposit rate previously established for Gidasa. Id. at 47,229. Instead,\n\nMarsan\u2019s merchandise should enter under the \u201call others\u201d cash deposit rate of 9.38 percent. Id.\n\nCommerce published the Final Results of Marsan\u2019s CVD CCR on October 21, 2009, adopting its\n\nnew successor-in-interest methodology for CVD CCRs, as well as the findings set forth in the\n\nPreliminary Results.\n\n Marsan challenges Commerce\u2019s new CVD CCR successor-in-interest test as unlawful.\n\nMarsan also challenges Commerce\u2019s final determination that Marsan was not the successor to\n\nGidasa for purposes of the CVD cash deposit rate, claiming it is not supported by substantial\n\nevidence and is unlawful.\n\fCourt No. 09-00483 Page 7\n\n\n\n Jurisdiction and Standard of Review\n\n This case deals with countervailing duty proceedings. Plaintiff brought this action\n\npursuant to section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, 19 U.S.C. \u00a7 1516a(a)(2)(B)(iii)\n\n(2006). This Court has jurisdiction pursuant to section 201 of the Customs Court Act of 1980,\n\n28 U.S.C. \u00a7 1581(c) (2006).\n\n This Court must \u201cuphold Commerce\u2019s determination unless it is \u2018unsupported by\n\nsubstantial evidence on the record, or otherwise not in accordance with law.\u2019\u201d Micron\n\nTechnology, Inc. v. United States, 117 F.3d 1386, 1393 (Fed. Cir. 1997) (quoting 19 U.S.C. \u00a7\n\n1516a(b)(1)(B)(i) (1994)). \u201cSubstantial evidence\u201d means \u201cmore than a mere scintilla\u201d and has\n\nbeen characterized as \u201csuch relevant evidence as a reasonable mind might accept as adequate to\n\nsupport a conclusion.\u201d Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938) (citations\n\nomitted). \u201c[T]he possibility of drawing two inconsistent conclusions from the evidence does not\n\nprevent an administrative agency\u2019s finding from being supported by substantial evidence.\u201d\n\nConsolo v. Fed. Mar. Comm\u2019n, 383 U.S. 607, 620 (1966) (citations omitted). When reviewing\n\nagency determinations, findings, or conclusions for substantial evidence, this Court determines\n\nwhether the agency action is reasonable in light of the entire record. See Nippon Steel Corp. v.\n\nUnited States, 458 F.3d 1345, 1350-51 (Fed. Cir. 2006). The Court must find evidence that\n\nreasonably led to the agency\u2019s conclusion, ensuring it was a rational decision. See Matsushita\n\nElec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984).\n\n Commerce\u2019s interpretation of a statute is reviewed pursuant to the two-prong analysis\n\nadopted by the Supreme Court in Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467\n\fCourt No. 09-00483 Page 8\n\n\n\nU.S. 837 (1984). The first prong of the Chevron analysis requires the Court to determine\n\n\u201cwhether Congress has directly spoken to the precise question at issue. If the intent of Congress\n\nis clear, that is the end of the matter; for the court, as well as the agency, must give effect to the\n\nunambiguously expressed intent of Congress.\u201d Id. at 842-43. However, if the statute is silent or\n\nambiguous, prong two of Chevron requires the Court to assess whether the agency\u2019s\n\ninterpretation of the statute is reasonable. Id. at 843.\n\n \u201cAs long as the agency\u2019s methodology and procedures are reasonable means of\n\neffectuating the statutory purpose, and there is substantial evidence in the record supporting the\n\nagency\u2019s conclusions, the court will not impose its own views as to the sufficiency of the\n\nagency\u2019s investigation or question the agency\u2019s methodology.\u201d Ceramica Regiomontana, S.A. v.\n\nUnited States, 10 CIT 399, 404-05, 636 F. Supp. 961, 966 (1986), aff\u2019d, 810 F.2d 1137 (Fed. Cir.\n\n1987).\n\n Discussion\n\n A. Commerce\u2019s Interpretation of Changed Circumstances Review Is\n Reasonable and the Successor-in-Interest Methodology Employed Therein Is\n in Accordance with Law\n\n Marsan asserts that \u201cCommerce created a per se rule that, whenever there had been a\n\nchange in ownership since the most recently completed administrative review, the resulting\n\ncompany would not qualify as successor to the old company.\u201d Pl.\u2019s Br. 11. Marsan argues that\n\nCommerce is, in effect, applying an irrebuttable presumption that a corporate acquirer brings\n\nsubsidies into the acquired company. Marsan challenges Commerce\u2019s analysis because\n\fCourt No. 09-00483 Page 9\n\n\n\n\u201cdecision-making based on an irrebuttable presumption is irreconcilable with the requirement\n\nthat decisions be supported by substantial evidence . . . . \u201d Pl.\u2019s Br. 13.\n\n In the reply brief, Marsan characterizes differently Commerce\u2019s alleged \u201cirrebuttable\n\npresumption.\u201d Marsan posits that \u201cCommerce has adopted a criterion that a change in ownership\n\nis per se a significant change. In other words, there is an irrebuttable presumption that a change\n\nin ownership is a significant change.\u201d Pl.\u2019s Reply Br. 2. Marsan asserts that \u201cChevron deference\n\ndoes not allow Commerce to sidestep the substantial evidence requirement . . . . \u201d Pl.\u2019s Reply\n\nBr. 6.; see Tariff Act of 1930, \u00a7 516A(b)(1)(B)(i), 19 U.S.C. \u00a7 1516a(b)(1)(B)(i). Therefore,\n\nMarsan contends that Commerce must formulate criteria that provide an evidentiary basis for\n\nmaking its determination as to whether there is an essential continuity between the pre-sale and\n\npost-sale company.4\n\n As Commerce noted, the statute authorizing Commerce to conduct a changed\n\ncircumstances review, 19 U.S.C. \u00a7 1675(b)(1), does not explicitly define what a CCR is or what\n\na CCR entails.5 In fact, a CCR may address a broad range of matters and the only limitation in\n\nthe statute is the requirement that there be \u201cchanged circumstances sufficient to warrant a\n\nreview.\u201d See Mittal Canada, Inc. v. United States, 30 CIT 1565, 1572, 461 F. Supp. 2d 1325,\n\n1332 n.7 (2006) (emphasis added). Thus, as Commerce pointed out, it has discretion to construe\n\n4\n The Court notes the agency action also may have been challenged as arbitrary and capricious. See SKF USA Inc.\nv. United States, No. 07-CV-0393, 2011 U.S. App. LEXIS 324, at *17-18 (Fed. Cir. Jan. 7, 2011) (noting that a\nchange in agency practice requires adequate explanation and laying out the factors to consider when determining\nwhether agency action is arbitrary and capricious). However, the Plaintiff did not raise that issue. Therefore, the\nCourt will not address it.\n5\n Section 751(b)(1) of the Tariff Act of 1930, 19 U.S.C. \u00a7 1675(b)(1) provides that Commerce shall conduct a review\nof a determination whenever the administering authority receives information concerning, or a request from an\ninterested party for a review of a final affirmative determination that resulted in a countervailing duty order which\nshows changed circumstances sufficient to warrant a review of such determination.\n\fCourt No. 09-00483 Page 10\n\n\n\nthe breadth of CCRs because statutory silence provides \u201can express delegation of authority to the\n\nagency to elucidate a specific provision of the statute by regulation.\u201d See Chevron, 467 U.S. at\n\n843-44.\n\n In matters of statutory construction, the Court will accord \u201cgreat deference to the\n\ninterpretation given the statute by the officers or agency charged with its administration.\u201d Koyo\n\nSeiko Co., Ltd. v. United States, 31 CIT 1512, 1514, 516 F. Supp. 2d 1323, 1329\u00a0(2007) (quoting\n\nUdall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 13 L. Ed. 2d 616 (1965)), aff\u2019d, 551 F.3d 1286\n\n(Fed. Cir. 2008). Specifically, the Court must defer to Commerce\u2019s reasonable interpretation of\n\nthe antidumping and countervailing duty statute. See Hangzhou Spring Washer Co., Ltd. v.\n\nUnited States, 29 CIT 657, 659, 387 F. Supp. 2d 1236, 1240 (2005). In order to survive judicial\n\nscrutiny, Commerce\u2019s construction need not be the only reasonable interpretation or even the\n\nmost reasonable interpretation. See Zenith Radio Corp. v. United States, 437 U.S. 443, 450, 57\n\nL. Ed. 2d 337, 98 S. Ct. 2441 (1978).\n\n Commerce argues that its CVD CCR successor-in-interest methodology is a reasonable\n\ninterpretation of 19 U.S.C. \u00a7 1675(b)(1) because Commerce articulated well-grounded reasons\n\nfor implementing a new successor-in-interest methodology in CVD CCRs, it identified concrete\n\nfactors for its methodology, and it related those factors to the purposes and limitations of CCRs.\n\nCommerce notes that the statute does not require the standards and analysis used in an AD CCR\n\nto parallel those used in a CVD CCR. See 19 U.S.C. \u00a7 1675(b)(1). Moreover, Commerce\n\nhighlights that the AD successorship analysis focuses on pricing, which is not relevant in the\n\nCVD context because subsidization is the focus.\n\fCourt No. 09-00483 Page 11\n\n\n\n 1. Commerce\u2019s Interpretation of Changed Circumstances Review Is Reasonable\n\n Commerce interpreted a CCR addressing successorship as a review in which it only\n\nanalyzes whether an alleged successor company is essentially the same entity as (i.e., virtually\n\nunchanged from) an alleged predecessor company such that it succeeds to it for purposes of an\n\nexisting AD or CVD order. Commerce\u2019s interpretation that a CVD CCR need only examine the\n\nchanges to the company that could impact subsidy levels is reasonable because only certain\n\ntypes of changes to a company may render it different from a former company such that it is\n\ninappropriate to apply the CVD cash deposit rate of the former company to the new company.\n\n Commerce underscores that it would be \u201cinfeasible and inappropriate for it to conduct a\n\nfact-intensive analysis of the extent to which significant changes affect a company\u2019s\n\nsubsidization level, and that such an analysis is the province of a full administrative review.\u201d\n\nDef.\u2019s Br. 17. Thus, when Commerce conducts a CCR to determine whether a company is\n\nentitled to a previously calculated CVD cash deposit rate, it is reasonable for Commerce to\n\nrefrain from delving into an analysis of subsidization because that requires deeper analysis,\n\nappropriate for a full administrative review. Therefore, Commerce\u2019s interpretation of \u201cchanged\n\ncircumstances review,\u201d including its construction that it is a review limited in scope and purpose,\n\nis reasonable.\n\n 2. Commerce\u2019s CVD CCR Successor-in-Interest Methodology Is in\n Accordance with Law\n\n Pursuant to Commerce\u2019s reasonable interpretation of a CCR, it devised a methodology\n\nfor CVD CCRs focusing on successorship. It has been recognized that the antidumping statute\n\n\u201creveals tremendous deference to the expertise of the Secretary of Commerce in administering\n\fCourt No. 09-00483 Page 12\n\n\n\nthe anti-dumping law.\u201d Fujitsu General Ltd. v. United States, 88 F.3d 1034, 1039 (Fed. Cir.\n\n1996) (citations omitted). In fact,\n\n [t]his deference is both greater than and distinct from that accorded the agency in\n interpreting the statutes it administers, because it is based on Commerce\u2019s technical\n expertise in identifying, selecting and applying methodologies to implement the dictates\n set forth in the governing statute, as opposed to interpreting the meaning of the statute\n itself where ambiguous.\n\nId. Therefore, this Court will not question Commerce\u2019s methodology \u201c[a]s long as the agency\u2019s\n\nmethodology and procedures are reasonable means of effectuating the statutory purpose.\u201d\n\nHangzhou, 387 F. Supp. 2d at 1240. In addition, if Commerce has discretion to create a\n\nmethodology, Commerce may revise it, and this Court will uphold the revised methodology if it\n\nis reasonable. See Koyo Seiko Co., Ltd., 516 F. Supp. 2d at 1331.\n\n As this Court previously noted, the \u201csuccessor-in-interest analysis was not explicitly\n\ncreated by statute or by regulation, but is an agency practice designed to facilitate the proper\n\nimplementation of the [trade] laws.\u201d East Sea Seafoods, LLC v. United States, 34 CIT ___ , ___,\n\n703 F. Supp. 2d 1336, 1352 (2010). Thus, the successor-in-interest analysis is precisely the type\n\nof methodology Commerce is tasked with identifying and applying, and the Court must not\n\ndirect Commerce on how to create that methodology. Rather, the Court must defer to\n\nCommerce\u2019s methodology if it is reasonable. See JTEKT Corp. v. United States, 33 CIT ___,\n\n___, 675 F. Supp. 2d 1206, 1219 (2009).\n\n As early as 2006, Commerce stated that it was considering changing the successor-in-\n\ninterest analsysis for CVD CCRs.6 Commerce noted it was not appropriate to use the same\n\n6\n Stainless Steel Sheet and Strip in Coils from the Republic of Korea: Preliminary Results of Countervailing Duty\nChanged Circumstances Review, 71 Fed. Reg. 75,937 (Dep\u2019t Commerce Dec. 19, 2006).\n\fCourt No. 09-00483 Page 13\n\n\n\nanalysis for AD and CVD CCRs, given that AD and CVD determinations focus on different\n\nissues. In 2007, Commerce published a notice requesting comments on its plan to change the\n\nCVD successor-in-interest methodology. Then, in the Notice of Initiation for this case,\n\nCommerce clearly stated it would not be utilizing the former successor-in-interest criteria in\n\nMarsan\u2019s CVD CCR. Finally, in the Preliminary Results of the present case, Commerce\n\nsummarized the comments it received, articulated its reasons for implementing a new\n\nmethodology, and provided the specific criteria applicable. Commerce asserts that its revised\n\ncriteria better address the focus (i.e., subsidization) of a successor-in-interest analysis in the\n\nCVD context than the factors examined in the AD context because the new criteria better reflect\n\nthose aspects of a company that generally are the most impacted by, the target of, or the vehicle\n\nfor subsidy benefits. In light of the foregoing, and for the following reasons, Commerce\u2019s CVD\n\nsuccessor-in-interest methodology is reasonable.\n\n Marsan challenges Commerce\u2019s CVD CCR successor-in-interest methodology as\n\nunlawful, claiming it constitutes decision-making by irrebuttable presumption. Marsan asserts\n\nthat Delverde SRL v. United States held decision-making by irrebuttable presumption unlawful,\n\nby stating:\n\n [the Court] ha[s] come to the conclusion that the Tariff Act as amended does not allow\n Commerce to presume conclusively that the subsidies granted to the former owner of\n Delverde\u2019s corporate assets automatically \u201cpassed through\u201d to Delverde following the\n sale. Rather, the Tariff Act requires that Commerce make such a determination by\n examining the particular facts and circumstances of the sale and determining whether\n Delverde directly or indirectly received both a financial contribution and benefit from a\n government.\n\fCourt No. 09-00483 Page 14\n\n\n\n202 F.3d 1360, 1364 (Fed. Cir. 2000). However, the Court in Delverde also stated that \u201cbefore\n\nCommerce imposes a countervailing duty on merchandise imported into the United States, it\n\nmust determine that a government is providing, directly or indirectly, a countervailable subsidy\n\nwith respect to the manufacture, production, or export of that merchandise.\u201d Id. at 1365. More\n\nspecifically, the Court read the portion of the statute at issue in that case as \u201cplainly requiring\n\nCommerce to make a determination that a purchaser of corporate assets received both a financial\n\ncontribution and benefit from a government, albeit indirectly through the seller, before\n\nconcluding that the purchaser was subsidized.\u201d Id. at 1367.\n\n Thus, Delverde addressed Commerce\u2019s methodology for analyzing subsidization and\n\nlevying countervailing duties in the course of a CVD investigation.7 In this case, on the other\n\nhand, the methodology at issue is applied in the context of a CCR; Commerce did not assess\n\nsubsidization or make a countervailing duty determination. Therefore, Commerce did not\n\npresume that subsidies granted to a seller passed through to the purchaser or conclude that\n\nMarsan was subsidized. Ultimately, \u201c[t]he question in a successor-in-interest determination is\n\nwhether an alleged successor should qualify for the cash deposit rate last calculated for the\n\nalleged predecessor.\u201d East Sea Seafoods, 703 F. Supp. 2d at 1352. Here, Commerce utilized its\n\nmethodology to answer that question.\n\n Commerce\u2019s methodology simply evaluates the changes to a company to determine\n\nwhether those changes would make it inappropriate to treat the former and subsequent company\n\n7\n In Delverde, the plaintiff challenged Commerce\u2019s methodology, which assumed that a pro rata portion of the\nformer owner\u2019s nonrecurring subsidies \u201cpassed through\u201d to Delverde as a consequence of the sale, as erroneous and\ninconsistent with the Tariff Act as amended by the Uruguay Round Agreements Act. Id. at 1363.\n\fCourt No. 09-00483 Page 15\n\n\n\nas if they were the same entity and entitled to the same cash deposit rate. As Commerce\n\nexplained, subsidization often seeks to stabilize a company\u2019s financial position or facilitate\n\ninvestment. Thus, changes in a company\u2019s name, ownership, or structure because of corporate\n\nreorganization, merger, or acquisition by another company are relevant to subsidy benefits.\n\nAccordingly, a methodology that examines whether a company underwent these types of\n\nchanges to determine whether the company is entitled to the CVD cash deposit rate Commerce\n\nassigned to the former company is reasonable. If, as here, the changes indicated the companies\n\nare not the same entity, the \u201call others\u201d rate would be assigned until the respondent requested a\n\nfull administrative review to determine its specific rate.\n\n Thus, contrary to Marsan\u2019s assertions, the successor-in-interest methodology does not\n\nentail an irrebuttable presumption that the corporate acquirer has subsidies because the analysis\n\nis not focused on the company\u2019s subsidization. Moreover, the governing principle of Delverde,\n\nthat Commerce could not conclusively presume subsidization, is inapplicable because\n\nCommerce\u2019s methodology does not determine, analyze, or presume subsidization. Instead, the\n\nmethodology examines the changes that warranted the CCR. The methodology also does not\n\nentail an irrebuttable presumption that any change constitutes a significant change. The analysis\n\nsimply focuses on certain changes to a company that would make it inappropriate to treat the old\n\nand new company similarly for purposes of the CVD order.\n\n Therefore, the successor-in-interest methodology in a CVD CCR, which concentrates on\n\nwhether there were significant changes to a company\u2019s operations, ownership, corporate, or legal\n\fCourt No. 09-00483 Page 16\n\n\n\nstructure to determine whether the changed company may receive a previously calculated CVD\n\ncash deposit rate, is reasonable and in accordance with law.\n\n B. Commerce\u2019s Determination that Marsan Is Not the Successor to Gidasa\n for CVD Cash Deposit Purposes Is Supported by Substantial Evidence\n and Otherwise in Accordance with Law\n\n Marsan argues that \u201cCommerce simply leapt from the fact of the acquisition to the\n\nconclusion that the post-acquisition company probably had subsidies even though it had none\n\nprior to the acquisition, with no evidentiary basis whatsoever and only its new irrebuttable\n\npresumption as rationale.\u201d Pl.\u2019s Br. 15. Marsan contends that Commerce did not make any\n\neffort to determine whether the purchaser brought any subsidies. According to Marsan,\n\nCommerce\u2019s only factual analysis was to find that Marsan had acquired Gidasa.8 Thus, Marsan\n\nclaims that \u201cin the absence of any evidence or reason to believe that the transfer of ownership\n\nbrought any subsidies into the company, Commerce could not lawfully determine that Marsan\n\nwas not the successor to Gidasa for purposes of the CVD CCR.\u201d Pl.\u2019s Br. 22.\n\n In support of Marsan\u2019s claim that it was the successor-in-interest to Gidasa, Marsan\n\nstresses that it had the same productive facilities as Gidasa, it was in the same line of business as\n\nGidasa, and the sale was a private-to-private transaction with a holding company whose sole\n\nasset was the shares of Marsan. Marsan asserts that these facts demonstrate a continuity of\n\nstructure, function, and operations between Gidasa and Marsan.\n\n\n\n\n8\n Specifically, Marsan asserts that Commerce never considered that Gidasa did not have subsidies according to its\nmost recent review, that there was no possibility of any infusion of domestic subsidies, that the holding company that\nacquired Gidasa did not have subsidies, or that a review of recent Turkish CVD cases establishes that there is little or\nno likelihood of subsidies applicable.\n\fCourt No. 09-00483 Page 17\n\n\n\n Marsan\u2019s arguments that Commerce did not find that Marsan had subsidies and that\n\nMarsan had similar productive facilities, customers, and suppliers are misplaced. Pursuant to\n\nCommerce\u2019s reasonable interpretation of a CCR, the review was limited to an analysis of\n\nsuccessorship, not subsidization, which is analyzed in a full administrative review. In addition,\n\npursuant to Commerce\u2019s expertise, it reasonably determined that an analysis of productive\n\nfacilities, customers, and suppliers is relevant to an AD determination, whereas the company\u2019s\n\nownership and assets are relevant to a CVD determination. Thus, the Court only determines\n\nwhether Commerce\u2019s final determination is supported by substantial evidence on the record. See\n\nTariff Act of 1930, \u00a7 516A(b)(1)(B)(i), 19 U.S.C. \u00a7 1516a(b)(1)(B)(i) (2006). Substantial\n\nevidence review essentially inquires into the reasonableness of the determination. See Nippon\n\nSteel Corp., 458 F.3d at 1351.\n\n As Commerce explained, it examined information Marsan submitted which shows\n\nevidence of a significant change in ownership and corporate structure. Marsan contends that the\n\n\u201cevidence in the present case establishes that Marsan is substantially identical to its predecessor,\n\nGidasa, and Commerce\u2019s refusal to consider that evidence resulted in a decision based on\n\nspeculation rather than substantial evidence.\u201d Pl.\u2019s Reply Br. 12. However, Commerce argues\n\nthat regardless of the factors Marsan claims demonstrate it is the successor, the record supports\n\nCommerce\u2019s decision to the contrary. According to Commerce, even if the Court considered the\n\ninformation Marsan offers to support its claim of successorship, substantial evidence still\n\nsupports Commerce\u2019s conclusion because the record demonstrates that Marsan underwent\n\nsignificant changes, and therefore, was not the successor to Gidasa for CVD cash deposit\n\fCourt No. 09-00483 Page 18\n\n\n\npurposes. Indeed, if there is evidence that reasonably led to Commerce\u2019s conclusion, such that it\n\nwas a rational decision, the conclusion is supported by substantial evidence. See Matsushita\n\nElec. Indus. Co., 750 F.2d at 933.\n\n By requesting a CCR, Marsan acknowledged it could not automatically succeed to\n\nGidasa\u2019s CVD cash deposit rate without a declaration by Commerce that it is essentially the\n\nsame entity as Gidasa and thus entitled to similar treatment. In fact, without such a\n\ndetermination, Marsan\u2019s merchandise would automatically enter under the \u201call others\u201d rate, the\n\nrate applicable to companies that have not been reviewed, until there was an administrative\n\nreview to determine the new or changed company\u2019s specific rate. Thus, the CCR was necessary\n\nto examine the changes that occurred in order for Commerce to determine whether it could treat\n\nMarsan as it had treated Gidasa. There is not a guarantee that a CCR will result in an affirmative\n\nfinding of successorship.\n\n In this case, Commerce made a negative determination as to Marsan\u2019s successorship\n\nstatus because there is substantial evidence to support the conclusion that the two companies,\n\nGidasa and Marsan, are not the same entity. The record shows that the ownership of Gidasa\n\nchanged, as well as its name. A change in ownership is a significant change because it entails\n\ndifferent assets and a different corporate identity, which are relevant to subsidization. Thus, the\n\nchange in ownership is \u201csuch relevant evidence as a reasonable mind might accept as adequate to\n\nsupport\u201d the conclusion that Marsan is not the successor to Gidasa for CVD cash deposit\n\npurposes. See Consol. Edison Co., 305 U.S. at 229.\n\fCourt No. 09-00483 Page 19\n\n\n\n Conclusion\n\n Commerce\u2019s interpretation of \u201cchanged circumstances review\u201d is reasonable, the\n\nmethodology it employed therein is in accordance with law, and its final determination is\n\nsupported by substantial evidence.\n\n For the foregoing reasons, Marsan\u2019s motion for judgment upon the agency record is\n\ndenied and judgment is entered in favor of the United States.\n\n /s/ Richard W. Goldberg\n Richard W. Goldberg\n Senior Judge\n\n\nDated: February 16, 2011\nNew York, New York\n\f"} -{"text": "J-S04006-16\n\n\n\nNON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37\n\nCOMMONWEALTH OF PENNSYLVANIA, IN THE SUPERIOR COURT OF\n PENNSYLVANIA\n Appellee\n\n v.\n\nCURTIS A. SHEERER,\n\n Appellant No. 1802 WDA 2014\n\n\n Appeal from the PCRA Order October 8, 2014\n In the Court of Common Pleas of Erie County\n Criminal Division at No(s): CP-25-CR-00002942-2012\n\n\nBEFORE: BOWES, OLSON, and STRASSBURGER,* JJ.\n\nMEMORANDUM BY BOWES, J.: FILED FEBRUARY 16, 2016\n\n Curtis A. Sheerer appeals pro se from the October 8, 2014 order\n\ndenying his first timely PCRA petition after counsel was permitted to\n\nwithdraw pursuant to Commonwealth v. Turner, 544 A.2d 927 (Pa. 1988),\n\nand Commonwealth v. Finley, 550 A.2d 213 (Pa.Super. 1988) (en banc)\n\n(\u201cTurner/Finley\u201d). We affirm.\n\n A jury found Appellant guilty of aggravated assault on July 23, 2013.\n\nAppellant, despite notice, failed to appear for sentencing. The court\n\nsentenced Appellant in his absence on September 17, 2013. It imposed a\n\nsentence of seven and one-half to fifteen years incarceration. Appellant did\n\nnot file an appeal. The underlying facts of this matter are as follows.\n\n\n\n\n*\n Retired Senior Judge assigned to the Superior Court.\n\fJ-S04006-16\n\n\n\n The victim, James McCoy, was at the Lakeside Tavern, in Erie County,\n\nwith Kim Schmidt on the evening of June 13, 2012. Mr. McCoy and Ms.\n\nSchmidt were friends and, according to Mr. McCoy, dating at that time.\n\nAppellant was previously romantically involved with Ms. Schmidt. Mr. McCoy\n\nalso had dated a woman named Tabitha Bromley, who at the time of both\n\nthe incident and trial in this matter was dating Appellant. Ms. Bromley\n\narrived at the bar and began to order drinks for Mr. McCoy. According to Mr.\n\nMcCoy, Ms. Bromley was attempting to rekindle their prior relationship. Ms.\n\nSchmidt telephoned Appellant and told him to come pick up his girlfriend,\n\nMs. Bromley. Appellant arrived, displeased with Mr. McCoy and Ms.\n\nBromley. Appellant chased Mr. McCoy around the parking lot of the bar\n\nbefore Mr. McCoy left in his vehicle. Ms. Bromley had also entered Mr.\n\nMcCoy\u2019s car and left the bar with him. Appellant then began to chase Mr.\n\nMcCoy and Ms. Bromley in his vehicle. Mr. McCoy pulled into a car\n\ndealership and turned his car lights off and Appellant passed him.\n\n Mr. McCoy and Appellant did not have additional contact with one\n\nanother that night. The next day, Ms. Bromley called Mr. McCoy and invited\n\nhim to come to the home of Jennifer Bailey, with whom Ms. Bromley was\n\nstaying at the time. Mr. McCoy arrived at Ms. Bailey\u2019s home around 6:00\n\np.m. Ms. Bromley and her twenty-year old daughter, Samantha, were\n\npresent. Ms. Bailey was inside preparing dinner and another person named\n\nRichard Fahey was also inside.\n\n -2-\n\fJ-S04006-16\n\n\n\n While Mr. McCoy and Ms. Bromley were outside smoking cigarettes,\n\nand Samantha Bromley was also present, Appellant came around the corner\n\nof the home and punched Mr. McCoy on the left side of his face, causing four\n\nfractures and the loss of three teeth. Specifically, Mr. McCoy suffered two\n\nacute sinus fractures and two orbital fractures. The blow to Mr. McCoy\u2019s face\n\ncaused him to stumble toward the house. Although Mr. McCoy did not see\n\nwho struck him, when he turned around he saw Appellant. Appellant then\n\nran around the house. Ms. Bailey did not witness the attack, but she did see\n\na person she believed was Appellant, running away from her home. She\n\nprovided a written statement to police identifying Appellant as the person\n\nwho fled from her home, but acknowledged at trial that she did not see his\n\nface.\n\n Mr. McCoy called 911 and Officer David Pernice arrived to investigate.\n\nMr. McCoy identified Appellant as his attacker. Ms. Bromley also informed\n\nOfficer Pernice that Appellant had punched Mr. McCoy. She then transported\n\nAppellant to the hospital. At trial, however, Ms. Bromley, who as mentioned,\n\nwas dating Appellant, declined to identify him as the assailant. 1 Similarly,\n\nSamantha Bromley testified that Appellant was walking down the side of the\n\nBailey house after Mr. McCoy was struck in the face. However, she had\n____________________________________________\n\n\n1\n The Commonwealth also introduced Facebook posts from Ms. Bromley to\nMr. McCoy, in which Ms. Bromley indicated that Appellant hit Mr. McCoy on\nthe day in question.\n\n\n\n -3-\n\fJ-S04006-16\n\n\n\nearlier provided a written statement to police indicating that Appellant\n\npunched Mr. McCoy.\n\n Ms. Schmidt testified that she received two text messages from\n\nAppellant on June 14, 2012. The first message arrived at 6:39 p.m. and\n\nread, \u201cI just punched James in the mouth.\u201d N.T., 7/23/13, at 49. Ms.\n\nSchmidt received a second message from Appellant at 6:45 p.m., which\n\nstated, \u201cI just dropped him in one hit.\u201d Id. When questioned by trial\n\ncounsel as to whether she sent the messages herself, she denied it. Based\n\non this evidence, the jury found Appellant guilty of aggravated assault. The\n\ncourt imposed the aforementioned sentence on September 17, 2013.\n\n As noted, Appellant did not file a direct appeal.2 However, on June 20,\n\n2014, Appellant filed his underlying pro se PCRA petition. The PCRA court\n\nappointed counsel, who filed a Turner/Finley no-merit letter and petition to\n\nwithdraw. The PCRA court granted counsel\u2019s petition to withdraw and\n\nprovided Rule 907 notice of its intent to dismiss Appellant\u2019s petition.\n\nAppellant filed a response and the PCRA court dismissed his petition.\n\nAppellant filed a timely notice of appeal and the PCRA court directed\n\nAppellant to file and serve a Pa.R.A.P. 1925(b) concise statement of errors\n\ncomplained of on appeal. Appellant complied by filing a boilerplate concise\n____________________________________________\n\n\n2\n PCRA counsel addressed this issue in his Turner/Finley no-merit letter.\nAppellant does not contest that he was denied his direct appeal rights in this\nmatter.\n\n\n\n -4-\n\fJ-S04006-16\n\n\n\nstatement that parroted the PCRA statute but did not raise any specific\n\nissues. The PCRA court issued an order indicating that the concise\n\nstatement\u2019s lack of specificity precluded it from authoring a decision\n\naddressing Appellant\u2019s claims. The matter is now ready for our\n\nconsideration. Appellant presents three issues for our review.\n\n A. Was Appellant denied effective assistance of counsel,\n whereby, his trial attorney offered no defense when there was\n [a] defense available?\n\n B. Should the lower court have given Appellant an evidentiary\n hearing on \u201cnewly discovered evidence\u201d?\n\n C. Was Appellant denied access to the court by not giving him\n (under court order of this Honorable Court, see attached\n Exhibit \u201cB\u201d, whereby he requested verious [sic] documents,\n police reports, witnesses statements and testimony\n transcripts?\n\nAppellant\u2019s brief at 2.\n\n In reviewing a PCRA appeal, we consider the record \u201cin the light most\n\nfavorable to the prevailing party at the PCRA level.\u201d Commonwealth v.\n\nHenkel, 90 A.3d 16, 20 (Pa.Super. 2014) (en banc). In performing this\n\nreview, we consider the evidence of record and the factual findings of the\n\nPCRA court. Id. We afford \u201cgreat deference to the factual findings of the\n\nPCRA court and will not disturb those findings unless they have no support in\n\nthe record.\u201d Id. Accordingly, so long as a PCRA court\u2019s ruling is free of\n\nlegal error and is supported by record evidence, we will not disturb its\n\n\n\n\n -5-\n\fJ-S04006-16\n\n\n\ndecision. Id. Where the issue presents a question of law, \u201cour standard of\n\nreview is de novo and our scope of review is plenary.\u201d Id.\n\n Preliminarily, we agree with the PCRA court\u2019s conclusion that\n\nAppellant\u2019s issues in his Rule 1925(b) statement were boilerplate and that,\n\nbecause they lacked specificity, it could not address his claims. Appellant\u2019s\n\nRule 1925(b) concise statement set forth the following issues verbatim:\n\n A. Ineffictive [sic] assistance of counsel which, in the\n circumstances of the particular case, so undermined the\n truth-determining process that no reliable adjuication [sic] of\n guilt or innocence could have taken place.\n\n B. The inavailability [sic] at the time of trial of exculpatory\n evidence that has subsequently become available and would\n have changed the outcome of the trial if it had been\n introduce[d].\n\n C. The improper obstruction by government officials of the\n petitioner\u2019s right of appeal where a meritorious appealable\n issue existed and was properly preserved in the records, and\n\n D. A violation of the Constitution of this Commonwealth and the\n Constitution of the United States which, in the circumstances\n of the particular cause [sic], so undermined the truth-\n determining process that no relable [sic] adjudocation [sic] of\n guilt or innocence could have taken place.\n\nAppellant\u2019s Pa.R.A.P. 1925(b) concise statement, 11/10/14. These issues\n\nmerely repeated subsections of the PCRA statute. As Appellant failed to\n\nadequately preserve his first two issues in his Rule 1925(b) statement, they\n\nare waived; further, they are without merit. Insofar as Appellant\u2019s third\n\nissue leveled on appeal contends that he was not provided the necessary\n\ntranscripts to effectuate his appeal, we find that he is not entitled to relief.\n\n -6-\n\fJ-S04006-16\n\n\n\n Appellant argues that he was not supplied with his preliminary hearing\n\nor trial transcripts. First, we note that Appellant\u2019s claims do not relate to his\n\npreliminary hearing; moreover, Appellant could not establish actual\n\nprejudice relative to issues that transpired at his preliminary hearing. See\n\nCommonwealth v. Stultz, 114 A.3d 865 (Pa.Super. 2015). To the extent\n\nAppellant claims that his trial transcripts were not provided, we acknowledge\n\nthat both the PCRA court and this Court entered orders directing that\n\nAppellant be provided with his trial transcripts.\n\n The Commonwealth posits in its brief that it provided a copy of its file\n\nto Appellant without the transcript and avers that original PCRA counsel\n\nturned over his file to Appellant. Even assuming Appellant did not receive\n\nhis transcripts from either the PCRA court or PCRA counsel, he does not\n\nargue how this omission prejudiced him in his ability to address his merits\n\nbased arguments.\n\n Appellant\u2019s first issue on appeal relates to trial counsel not presenting\n\ncertain witnesses, permitting inculpatory text messages he sent that were\n\npurportedly not turned over in discovery into evidence, and that another\n\nperson admitted to committing the assault. The only portion of Appellant\u2019s\n\nargument that relates to evidence that would have been part of the\n\ntranscript pertains to the text messages. There is no dispute by the parties\n\nor in the record regarding those communications. Thus, the alleged lack of a\n\ntrial transcript could not have prejudiced Appellant\u2019s ability to address his\n\n -7-\n\fJ-S04006-16\n\n\n\nissue. Appellant\u2019s contention is that the messages were not contained in\n\ndiscovery. PCRA counsel below inquired into this matter and learned from\n\ntrial counsel that these messages were provided in discovery. Further,\n\nadditional evidence demonstrated that Appellant struck the victim in this\n\nmatter.\n\n Similarly, the absence of a transcript would have little impact on\n\nAppellant\u2019s ability to litigate his extra-record ineffectiveness claim relative to\n\ncounsel\u2019s failure to present certain witnesses. \u201cTo plead and prove\n\nineffective assistance of counsel a petitioner must establish: (1) that the\n\nunderlying issue has arguable merit; (2) counsel's actions lacked an\n\nobjective reasonable basis; and (3) actual prejudice resulted from counsel's\n\nact or failure to act.\u201d Commonwealth v. Stewart, 84 A.3d 701, 706\n\n(Pa.Super. 2013) (en banc). The failure to meet any of these aspects of the\n\nineffectiveness test results in the claim failing. Id.\n\n A claim has arguable merit where the factual predicate is accurate and\n\n\u201ccould establish cause for relief.\u201d Id. at 707. A determination as to\n\nwhether the facts asserted present a claim of arguable merit is a legal one.\n\nId. In considering whether counsel acted reasonably, we do not use a\n\nhindsight analysis; rather, an attorney\u2019s decision is considered reasonable if\n\nit effectuated his client\u2019s interests. Id. Only where \u201cno competent counsel\n\nwould have chosen that action or inaction, or, the alternative, not chosen,\n\noffered a significantly greater potential chance of success[,]\u201d will counsel\u2019s\n\n -8-\n\fJ-S04006-16\n\n\n\nstrategy be considered unreasonable. Id. Finally, actual prejudice exists if\n\n\u201cthere is a reasonable probability that, but for counsel's errors, the result of\n\nthe proceeding would have been different.\u201d Id. It is presumed that counsel\n\nrenders effective representation.\n\n Where the issue involves an attorney\u2019s failure to call a witness, the\n\npetitioner must prove: (i) the witness existed; (ii) the witness was available\n\nto testify; (iii) counsel knew of, or should have known of, the existence of\n\nthe witness; (iv) the witness was willing to testify; and (v) the absence of\n\nthe testimony was so prejudicial as to have denied the defendant a fair trial.\n\nCommonwealth v. Chmiel, 30 A.3d 1111, 1143 (Pa. 2011);\n\nCommonwealth v. Cox, 983 A.2d 666, 692 (Pa. 2009).\n\n In his brief, Appellant specifically refers to Johnathan Schwab and\n\nForest Vannucci. These men, according to Appellant, would offer testimony\n\nthat another person, Bobby McClelland, admitted to them to striking the\n\nvictim.3 This evidence, if introduced for its truth, would be inadmissible\n\nhearsay.4 Thus, the evidence could only be introduced as possible\n\n____________________________________________\n\n\n3\n There was testimony at trial that Mr. McClelland, eighteen years old at the\ntime of the incident, was present in the area. However, no one identified\nhim as the attacker. Mr. McClelland is now deceased.\n4\n It is unclear whether Mr. McClelland was deceased at the time of trial,\nthereby implicating the statement against interest exception to the hearsay\nrule. However, such a statement must be supported by corroborating\ncircumstances that clearly indicate trustworthiness. See Pa.R.E. 804(b)(3).\n\n\n\n -9-\n\fJ-S04006-16\n\n\n\nimpeachment evidence. Appellant does not develop any argument in this\n\nregard and every witness to the incident either identified Appellant as the\n\nassailant at one time, or acknowledged that he fled the area after the\n\nassault.\n\n As to unnamed other witnesses whom Appellant claims would have\n\ntestified that the victim had a disreputable character and angered other\n\npeople who would have had a motive to assault the victim, his failure to\n\nidentify these witnesses is fatal. Furthermore, Appellant has neglected to\n\nproffer any admissible testimony that these alleged witnesses could have\n\nprovided.\n\n Appellant\u2019s second issue leveled on appeal also does not require the\n\ntrial transcript to materially advance his position. That claim argues that he\n\nlearned of newly-discovered evidence in the nature of information from\n\nJohnathan Schwab that another individual struck the victim and that Mr.\n\nSchwab\u2019s mother, Kim Schmidt, lied at trial about the text messages.5 The\n\ninitial portion of Appellant\u2019s claim is inconsistent with his first issue where he\n\nalleges counsel was ineffective for failing to present Mr. Schwab. Moreover,\n\nAppellant fails to indicate in any manner how this evidence could not have\n\nbeen ascertained prior to trial.\n____________________________________________\n\n\n5\n Appellant\u2019s theory is that Kim Schmidt, the mother of Johnathan Schwab,\nand Appellant\u2019s former girlfriend, kept Appellant\u2019s cell phone, and somehow\nknew of the attack and then texted herself from Appellant\u2019s phone.\n\n\n\n - 10 -\n\fJ-S04006-16\n\n\n\n This Court has explained in the PCRA context that a \u201cpetitioner must\n\nplead and prove by a preponderance of the evidence \u2018the unavailability at\n\nthe time of trial of exculpatory evidence that has subsequently become\n\navailable and would have changed the outcome of the trial if it had been\n\nintroduced.\u2019 42 Pa.C.S. \u00a7 9543(a)(2)(vi).\u201d Commonwealth v.\n\nForeman, 55 A.3d 532, 537 (Pa.Super. 2012). In addition, this Court has,\n\nin Commonwealth v. Padillas, 997 A.2d 356 (Pa.Super. 2010), opined\n\nthat a petitioner must show the evidence \u201c(1) could not have been obtained\n\nprior to the conclusion of the trial by the exercise of reasonable diligence;\n\n(2) is not merely corroborative or cumulative; (3) will not be used solely to\n\nimpeach the credibility of a witness; and (4) would likely result in a different\n\nverdict if a new trial were granted.\u201d Id. at 363; see also Commonwealth\n\nv. Walker, 36 A.3d 1, 14 n.17 (Pa. 2011). Failure to satisfy any of these\n\naspects of the test results in the claim failing. Padillas, supra at 363.\n\n Mr. Schwab\u2019s proffered testimony that another person admitted to\n\ncommitting the crime and that his mother stated that she lied at trial also\n\nwould be hearsay if introduced for its truth. Further, after-discovered\n\nevidence claims generally cannot succeed if the evidence will be used solely\n\nfor impeachment purposes. In sum, Appellant\u2019s first two issues are both\n\nwaived and without merit and his final issue does not entitle him to relief.\n\n Order affirmed.\n\n\n\n\n - 11 -\n\fJ-S04006-16\n\n\n\nJudgment Entered.\n\n\n\n\nJoseph D. Seletyn, Esq.\nProthonotary\n\n\n\nDate: 2/16/2016\n\n\n\n\n - 12 -\n\f"} -{"text": "753 F.2d 779\n40 Fed.R.Serv.2d 1450\nFrederick HOPTOWIT, et al., Plaintiffs-Appellees,v.John SPELLMAN, et al., Defendants-Appellants.\nNo. 83-4284.\nUnited States Court of Appeals,Ninth Circuit.\nArgued and Submitted Oct. 3, 1984.Decided Feb. 12, 1985.\n\nTimothy K. Ford, American Civil Liberties Union, Richard P. Blumberg, Mark & Blumberg, Seattle, Wash., for plaintiffs-appellees.\nWilliam C. Collins, Sr. Asst. Atty. Gen., Dept. of Corrections, Olympia, Wash., for defendants-appellants.\nAppeal from the United States District Court for the Eastern District of Washington.\nBefore DUNIWAY, FERGUSON, and NELSON, Circuit Judges.\nDUNIWAY, Circuit Judge:\n\n\n1\nThis is the second appeal in this case. In the prior appeal, Hoptowit v. Ray, 9 Cir., 1982, 682 F.2d 1237 (Hoptowit I ), we affirmed in part, reversed in part, and remanded for further proceedings. Our decision in Hoptowit I is the law of the case, see Planned Parenthood of Central and Northern Arizona v. Arizona, 9 Cir., 1983, 718 F.2d 938, 949; Moore v. Jas. H. Matthews & Co., 9 Cir., 1982, 682 F.2d 830, 833-35, and we are required to follow it, absent special considerations that are not present here. In this opinion we assume that the reader is familiar with our decision in Hoptowit I.\n\n\n2\nI. Failure to Reopen the Record.\n\n\n3\nAfter our mandate went down, the trial judge set a date for a hearing on the remanded issues, in November, 1982. Shortly before that hearing, the State had filed a motion for declaratory judgment, asking the court to declare that the penitentiary meets or exceeds the constitutional minima in areas including physical brutality and medical care. At the opening of the hearing the State asked the district court to determine whether or not it was in compliance in those areas. The state also moved for relief from the judgment under Fed.R.Civ.P. 60(b) on the ground that conditions at the penitentiary had improved. The judge allowed the State to file evidence relating to the issue of changed circumstances, but ruled that the appropriate time to consider such evidence would be at a later compliance hearing. He limited the hearing \"to enter[ing] an order in conformance with the Ninth Circuit.\" The judge entered the Order on Remand in May, 1983, and the State appeals.\n\n\n4\nThe State argues that it was error for the district court to refuse to conduct a hearing regarding alleged new defendants and changed circumstances before issuing its order on remand. We hold that the district court did not abuse its discretion.\n\n\n5\nA. New Defendants.\n\n\n6\nThe State argues that the named defendants have been succeeded by others, and, therefore, the district court erred by failing to conduct a hearing to determine whether the new administration has continued and will continue the unconstitutional practices of its predecessors. The State maintains that such a hearing is required under Mayor of City of Philadelphia v. Education Equality League, 1974, 415 U.S. 605, 94 S.Ct. 1323, 39 L.Ed.2d 630, and Spomer v. Littleton, 1974, 414 U.S. 514, 94 S.Ct. 685, 38 L.Ed.2d 694.\n\n\n7\nThe complaint named as defendants the Governor of the State of Washington, the Secretary of its Department of Social and Health Services (the agency responsible for the operation of the penitentiary at that time), as well as various officials within the Corrections Division of that Department. The complaint named these defendants in both their personal and official capacities. The State says that each of the named defendants has either left office or changed position. It also says that, in 1981, a new Department of Corrections was created to administer the Washington State adult corrections program.\n\n\n8\nThose changes did not require the district court to reopen the record before issuing its order on remand. First, the two defendants principally responsible for the administration of the penitentiary remain in control; they have simply been promoted. Lawrence Kinchloe, formerly the Associate Superintendent, is now the Superintendent. James Spaulding, formerly the Superintendent, is now the Deputy Director of the Division of Prisons of the new Department of Corrections.\n\n\n9\nSecond, the successors of the named defendants, although not named, are themselves parties by reason of Fed.R.Civ.P. 25(d)(1):\n\n\n10\nWhen a public officer is a party to an action in his official capacity and during its pendency dies, resigns or otherwise ceases to hold office, the action does not abate and his successor is automatically substituted as a party.\n\n\n11\nThe State argues that, despite this rule, an injunction cannot be issued against a successor to public office without \"supplemental findings of fact indicating that the new officer will continue the practices of his predecessor,\" Mayor, supra, 415 U.S. at 622, 94 S.Ct. at 1334, citing Spomer, supra. Cases in other circuits have applied the Mayor-Spomer analysis. See Kincaid v. Rusk, 7 Cir., 1982, 670 F.2d 737, 741; A.C.L.U. v. Finch, 5 Cir., 1981, 638 F.2d 1336, 1345-47. But see Santiago v. Corporacion de Renovacion, etc., 1 Cir., 1977, 554 F.2d 1210, 1213. However, Mayor and Spomer involved circumstances quite different from those here. Mayor was \"a case devoted exclusively to the personal appointment policies of [the new mayor's] predecessor.\" Mayor, supra, 415 U.S. at 613, 94 S.Ct. at 1329. Spomer involved alleged racial discrimination by a former State's Attorney. As the Court said, \"[t]he wrongful conduct charged in the complaint is personal to [the former official], despite the fact that he was also sued in his then capacity as State's Attorney.\" Spomer, supra, 414 U.S. at 521, 94 S.Ct. at 689.\n\n\n12\nIn this case, most of the evidence does not relate to the personal conduct of the principal named defendants. In Hoptowit I, we affirmed various findings of fact concerning institutional practices and physical conditions at the penitentiary. These are facts \"from which the continuation of the dispute is a reasonable inference,\" Ciudadanos Unidos de San Juan v. Hidalgo County Grand Jury Commissioners, etc., 5 Cir., 1980, 622 F.2d 807, 822, and not merely \"idiosyncratic abuses of the particular members of the outgoing administration,\" A.C.L.U. v. Finch, supra, 638 F.2d at 1346-47. This case fits squarely within the principle stated in the Advisory Committee Notes to Rule 25(d)(1):\n\n\n13\nIn general it will apply whenever effective relief would call for corrective behavior by the one then having official status and power, rather than the one who has lost that status and power through ceasing to hold office.\n\n\n14\nMoreover, we do not read the record as showing a fixed determination by the judge that all of the named defendants' successors must be kept in the case as defendants. Rather, we conclude that, at most, the record only shows that the court elected to decide, first, what findings it should make and what conclusions it should reach in the light of our remand in Hoptowit I, and then decide what it should do in response to the successors' arguments. Surely, when two or three motions are presented to a court, it has discretion to decide the order in which it would consider and decide them. A party claiming abuse of that discretion has a heavy burden of persuasion. We do not think that the burden has been met here.\n\n\n15\nB. Changed Circumstances.\n\n\n16\nThe State argues that the district court abused its discretion by failing to reopen the record in the light of the time which had elapsed between trial (May, 1980) and the Order on Remand (May, 1983) and in the light of alleged improvements at the penitentiary. We disagree.\n\n\n17\n1. The motion was deficient.\n\n\n18\nThe motion did not comply with the Rules of the United States District Court for the Eastern District of Washington. E.D. Local Rule 11(c) requires that a moving party serve and file a memorandum of points and authorities \"with the motion \" (original italics). The State's motion for Declaratory Judgment was filed before the remand hearing. However, the State did not file its accompanying brief until after the hearing had taken place. Under E.D. Local Rule 11(i),\n\n\n19\nA failure to timely file a memorandum of points and authorities in support of or in opposition to any motion may be considered by the Court as consent on the part of the party failing to file such memorandum to the entry of an order adverse to counsel in default.\n\n\n20\n2. The court did not abuse its discretion.\n\n\n21\nDuring the hearing the State again raised its claims in a motion for relief from the judgment under Fed.R.Civ.P. 60(b). Such a motion is addressed to the discretion of the district court. Martella v. Marine Cooks & Stewards U., 9 Cir., 1971, 448 F.2d 729, 730.\n\n\n22\nThe district court correctly explained that the purpose of the remand hearing was to follow the instructions of this court and order an appropriate remedy for Eighth Amendment violations found at the penitentiary. The court acted within its discretion in refusing to review the State's evidence of alleged compliance until after the issuance of the order on remand.\n\n\n23\nII. Eighth Amendment Violations.\n\n\n24\nIn its original opinion, the district court found that various aspects of the penitentiary's \"old, dilapidated, and ill-maintained\" physical plant have \"serious health implications.\" Hoptowit I, 682 F.2d at 1256. More specifically, the district judge found: overcrowding, substandard lighting, unsatisfactory plumbing, substandard fire prevention, substandard food service, vermin infestation, lack of an effective maintenance program, inadequate ventilation, safety hazards in the occupational areas, unavailable or inadequate cell cleaning supplies. We affirmed these findings of fact, except the finding regarding overcrowding. Id.\n\n\n25\nOn the basis of these findings, the district court concluded that \"the general condition of [the penitentiary's] physical facilities when considered in their totality ... falls below minimum standards of decency and conditions of confinement and violates [p]laintiffs' Eighth Amendment rights.\" Id. We reversed this conclusion of law on the ground that the district court improperly applied the \"totality of conditions\" analysis. We instructed the district court on remand to \"consider each finding and decide whether each condition amounts to an unnecessary and wanton infliction of pain.\" Id. We added: \"Of course, each condition can be considered in light of other conditions.\" Id.\n\n\n26\nThe district court followed this direction, and concluded that each of several of the conditions did violate the Eighth Amendment. On this appeal, the State attacks the district court's legal conclusions as to several of these conditions. We review these conclusions de novo. Hoptowit I, 682 F.2d at 1245.\n\n\n27\nA. Inadequate Lighting.\n\n\n28\nAdequate lighting is one of the fundamental attributes of \"adequate shelter\" required by the Eighth Amendment. The district court's conclusion that the lighting at the penitentiary violated the amendment is based upon evidence that the lighting was so poor that it was inadequate for reading and caused eyestrain and fatigue and hindered attempts to insure that basic sanitation was maintained. We uphold the district court's conclusion.\n\n\n29\nB. Plumbing.\n\n\n30\nPlumbing at the penitentiary is in such disrepair as to deprive inmates of basic elements of hygiene and seriously threaten their physical and mental well-being. Such conditions amount to cruel and unusual punishment under the Eighth Amendment. Ramos v. Lamm, 10 Cir., 1980, 639 F.2d 559, 567-69; Gates v. Collier, 5 Cir., 1974, 501 F.2d 1291, 1300-03. We uphold the district court's conclusion.\n\n\n31\nC. Vermin.\n\n\n32\nThe district court found vermin infestation throughout the prison. It concluded that such a condition is inconsistent with the adequate sanitation required by the Eighth Amendment. We agree. The health hazard caused by vermin at the penitentiary is exacerbated by the plumbing and ventilation inadequacies. Such vermin infestation, properly considered in the light of unsanitary conditions such as standing water, flooded toilets and sinks, and dank air, is an unnecessary and wanton infliction of pain proscribed by the Eighth Amendment.\n\n\n33\nD. Fire Safety.\n\n\n34\nThe district court concluded that the substandard fire prevention at the penitentiary endangered the prisoners' lives and therefore violated the Eighth Amendment. Prisoners have the right not to be subjected to the unreasonable threat of injury or death by fire and need not wait until actual casualties occur in order to obtain relief from such conditions. Leeds v. Watson, 9 Cir., 1980, 630 F.2d 674, 675-76.\n\n\n35\nE. Ventilation and Air Flow.\n\n\n36\nThe lack of adequate ventilation and air flow undermines the health of inmates and the sanitation of the penitentiary, see Ramos, supra, 639 F.2d at 569. We agree with the district court's conclusion that the condition violates the minimum requirements of the Eighth Amendment. Id. at 568.\n\n\n37\nF. Safety Hazards.\n\n\n38\nThe district court found \"serious\" safety hazards in the occupational areas.\n\n\n39\nPersons involuntarily confined by the state have a constitutional right to safe conditions of confinement. See Youngberg v. Romeo, 1982, 457 U.S. 307, 315-16, 102 S.Ct. 2452, 2458, 73 L.Ed.2d 28; Santana v. Collazo, 1 Cir., 1983, 714 F.2d 1172, 1183. Not every deviation from ideally safe conditions amounts to a constitutional violation, see, e.g., Santana at 1183. However, the Eighth Amendment entitles inmates in a penal institution to an adequate level of personal safety. This is required because inmates, by reason of their confinement, cannot provide for their own safety. Santana, supra, 714 F.2d at 1183. See also Estelle v. Gamble, 1976, 429 U.S. 97, at 103-04, 97 S.Ct. 285, 290-91, 50 L.Ed.2d 251. We conclude that the safety hazards found throughout the penitentiary's occupational areas, exacerbated by the institution's inadequate lighting, seriously threaten the safety and security of inmates and create an unconstitutional infliction of pain.\n\n\n40\nG. Inadequate Cell Cleaning Supplies.\n\n\n41\nThis problem must be evaluated in the light of the overall squalor at the penitentiary. Failure to provide adequate cell cleaning supplies, under circumstances such as these, deprives inmates of tools necessary to maintain minimally sanitary cells, seriously threatens their health, and amounts to a violation of the Eighth Amendment. See Ramos, supra, 639 F.2d at 570.\n\n\n42\nH. Segregation and Protective Custody.\n\n\n43\nThe State challenges portions of the district court's order on remand regarding physical plant aspects of segregation and protective custody units at the penitentiary. It does not challenge this order with respect to the penitentiary's isolation units. Although the State considers segregation and protective custody together, the district court considered them separately, and so do we.\n\n\n44\n1. Segregation.\n\n\n45\nIn Hoptowit I, at 1257, we set out the judge's findings relating to segregation. We do not repeat them here. We held that they were not clearly erroneous. On remand, the judge made similar findings, omitting two, numbered 4 and 6, comparing segregation to isolation, and stating the difficulty prisoners have in working their way out of segregation. The new findings are still not clearly erroneous.\n\n\n46\n2. Protective custody.\n\nIn its brief, the State says:\n\n47\n\"The protective custody findings on remand do not specifically mention physical plant conditions.\" Here is what the findings say:\n\n\n48\n25. Conditions in the protective custody section of WSP exhibit the same or greater deficiencies as conditions elsewhere in the penitentiary area and failed to adequately promote the purposes for which protective custody exists. These conditions cause the prisoners housed in protective custody to live in an atmosphere of fear, vulnerability, and frustration.\n\n\n49\nWe do not understand the State's position.\n\n\n50\nThe judge also found that protective custody guards regularly subjected protective custody prisoners to harassment and racial slurs and threatened to return those prisoners to the general population. The State does not attack this finding, which we held not clearly erroneous in Hoptowit I, at p. 1257. We have not changed our minds.\n\n\n51\nIII. Relief.\n\n\n52\nThe State argues that the following portions of the district court's order on remand, relating to physical plant, segregation and protective custody, are overbroad:\n\n\n53\n[Penitentiary] officials shall operate and maintain the penitentiary physical plant so that inmates receive adequate food, shelter, clothing, sanitation, medical care and personal safety.\n\n\n54\n[Penitentiary] officials shall provide inmates in protective custody ... [and] segregation ... with adequate food, clothing, shelter, sanitation, personal safety and medical care.\n\n\n55\nWe agree.\n\n\n56\nThere is no finding that there was not adequate food or adequate clothing in the prison. To that extent the order is overbroad. Moreover, while the court's language is taken almost verbatim from our opinion in Hoptowit I, at p. 1258, and appears verbatim in Wolfish v. Levi, 2 Cir., 1978, 573 F.2d 118, 125, which we cited, it does not follow that it is good language to embody in an injunction.\n\n\n57\nWe agree with the view that the court should not try to tell the administrators of the prison how to cure the unconstitutional conditions that the court found. The administrators presumably know more about how to run a prison, and how to improve conditions there, than the judge does. Doing those things is their business, not that of the court. The court was wise in not trying to take over the management of the prison.\n\n\n58\nHowever, as we said in Hoptowit I, the judge \"must order the correction of specific violations ... and may require only that these corrections bring the conditions above constitutional minima.\" Hoptowit I, supra, 682 F.2d at 1257. The injunction should refer to the specific violations and order their correction. It need not tell the defendants how to do the correcting. The court can, and perhaps should, monitor what is being done in response to the order. That is a question for the district court to decide. As we said in Hoptowit I, the remedy should be \"tailored to correct the specific violation and no more obtrusive than to satisfy the constitutional minima,\" p. 1258. The judge should do some cutting and fitting.\n\n\n59\nIV. Conclusion.\n\n\n60\nWe affirm the district court's findings of fact and conclusions of law. We vacate the following provisions of the court's order of May 20, 1983:\n\n\n61\nPart IV, paragraph 7, and Part V, paragraph 8. In all other respects, we affirm the order. The case is remanded to the district court for further proceedings consistent with this opinion. The appropriate individuals who have succeeded the defendants originally named should be brought into the case, and named as defendants. The injunction may also be phrased to run against other successors who may take office hereafter.\n\n\n62\nAffirmed in part, vacated in part, and remanded.\n\n"} -{"text": " United States Court of Appeals\n Fifth Circuit\n F I L E D\n IN THE UNITED STATES COURT OF APPEALS January 5, 2004\n FOR THE FIFTH CIRCUIT\n Charles R. Fulbruge III\n Clerk\n\n No. 03-10142\n Summary Calendar\n\n\n\nUNITED STATES OF AMERICA,\n\n Plaintiff-Appellee,\n\nversus\n\nSHAWN DOUGLAS CROPP,\n\n Defendant-Appellant.\n\n\n --------------------\n Appeal from the United States District Court\n for the Northern District of Texas\n USDC No. 4:02-CR-6-1-Y\n --------------------\n\n\nBefore JONES, BENAVIDES, and CLEMENT, Circuit Judges.\n\nPER CURIAM:*\n\n Shawn Douglas Cropp was charged in a two-count indictment\n\nfor being a felon in possession of firearms. See 18 U.S.C.\n\n\u00a7 922(g)(1). He was tried before a jury and convicted. Cropp\n\nhas appealed, contending that the evidence did not prove that he\n\nknowingly possessed a firearm.\n\n Cropp was arrested after guns were found during the traffic\n\nstop of a vehicle in which Cropp was a passenger. A reasonable\n\n *\n Pursuant to 5TH CIR. R. 47.5, the court has determined that\nthis opinion should not be published and is not precedent except\nunder the limited circumstances set forth in 5TH CIR. R. 47.5.4.\n\f No. 03-10142\n -2-\n\njuror could have concluded from Cropp\u2019s proximity to the weapons\n\nwhich were in plain view, the number of weapons found in the\n\nvehicle, Cropp\u2019s furtive movements, and the concealment of a\n\npistol in the crack of the seat underneath Cropp, that Cropp had\n\ndominion or control over the weapons. See United States v.\n\nYbarra, 70 F.3d 362, 365 (5th Cir. 1995); see also United States\n\nv. Smith, 930 F.2d 1081, 1085\u201386 (5th Cir. 1991). The judgment\n\nof conviction is affirmed.\n\n Although Cropp has not raised the issue and has not filed a\n\nreply brief, the Government states correctly that the district\n\ncourt plainly-erred in imposing consecutive terms of supervised\n\nrelease. See United States v. Myers, 104 F.3d 76, 81 (5th Cir.\n\n1997); 18 U.S.C. \u00a7 3624(e); U.S.S.G. \u00a7 5G1.2, comment. (n.2). We\n\nvacate the sentence and remand the case to the district court for\n\nresentencing.\n\n AFFIRMED IN PART; VACATED AND REMANDED IN PART.\n\f"} -{"text": " Okf'~LC:. 0 ~ C(&k.-r ~~I ~31' 03\n ~r~~ wur{ o .P G\\f'~ M-~ ~a..( Mf~\\\n '\u00b7\n\n '\n=-==-\n \u00b7\u00b7\u00b7\u00b7~- ~o,f1o'J( Ja..:3oc?\n ffittj ~ ~ ~0 26'\n 'Au.-~+~AV:.7I.-e_~ - 7_~_]_[(\n\n l'te. ~ ~-o.-\u00a3 l:f_-;j~\n ~P-k05-=--.\u00a3(f~J.\n RECEIVED IN\n COURT OF CRIMINAL APPEALS\n P~r L L~v- J< }.\n MAY 28 2015\n [\n l' M.. ~''V\\... b eJ(' li c:9u...s n. e. eJ J?o ~ a... 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