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73 F.3d 796
49 Soc.Sec.Rep.Ser. 820, Unempl.Ins.Rep. (CCH) P 15079BKenneth C. RATER, Appellant,v.Shirley S. CHATER, Commissioner of Social Security, Appellee.
No. 95-1654.
United States Court of Appeals,Eighth Circuit.
Submitted Oct. 16, 1995.Decided Jan. 10, 1996.
Robert W. Pratt, Des Moines, Iowa, argued (Max Schott, on the brief), for appellant.
Sally Renee Johnson, Assistant U.S. Attorney, Omaha, Nebraska, argued (Jamie G. Crawford, Assistant Regional counsel, on the brief), for appellee.
Before McMILLIAN, BRIGHT and LOKEN, Circuit Judges.
McMILLIAN, Circuit Judge.
1
Kenneth Rater appeals from a final order entered in the United States District Court1 for the District of Nebraska affirming the final decision of the Commissioner of Social Security (Commissioner). Rater v. Shalala, No. 8CV-555, 1995
2
WL 811933 (D.Neb. Jan. 19, 1995) (Memorandum and Order). Rater applied for disability insurance benefits in March 1992, alleging that he suffered from persistent low back and leg pain stemming from workplace injuries. The district court found that substantial evidence in the record as a whole supported the decision of the administrative law judge (ALJ) that Rater was not disabled and was therefore not entitled to disability insurance benefits under Title II of the Social Security Act, 42 U.S.C. Secs. 401-433. For reversal, Rater argues the ALJ erred in concluding that his former position as "incinerator operator/watcher" constituted "past relevant work" under step four of the sequential evaluation process. For the reasons discussed below, we affirm the order of the district court.
Background
3
Rater was fifty-eight years old at the time of the administrative hearing. He had completed high school and had attended business school for approximately eleven months. He has worked as a laborer at the Firestone Tire & Rubber (Firestone) plant in Des Moines, Iowa, since April 1968. After injuring his back in a 1981 workplace injury, Firestone placed Rater in a department composed primarily of light-dutied individuals where he operated a machine to "re-roll" cloth banners. In 1983, Rater again injured his back. By the time he returned to work in May 1984, Firestone had substantially eliminated the light-dutied department. Thus, Rater was assigned the position of "incinerator operator/watcher," a job which primarily entailed watching the incinerator and shutting it down if the operator were injured or experienced any other difficulty. Firestone had developed this position to address safety concerns regarding the incinerator. Rater held this position for eleven months, until the company's industrial engineering department restructured the job duties in the incinerator area, thereby eliminating the watcher position.
4
Rater applied for disability benefits in March 1992, alleging he suffered from persistent low back and leg pain. After his application was administratively denied twice, Rater requested and obtained a hearing. At the hearing, a vocational expert classified Rater's past relevant work as an incinerator operator/watcher as unskilled and sedentary. The vocational expert also stated that Rater could perform his past relevant work as an incinerator operator/watcher. When asked whether that job existed in the national economy, the vocational expert replied, "[i]t's very unusual and I don't think there would be ten people in Nebraska that did it." After the hearing, the ALJ denied Rater's application for disability benefits, concluding that he was not disabled because he has the residual functioning capacity to perform his past relevant work as an incinerator operator/watcher. The Appeals Council denied Rater's request for review and the ALJ's decision became the final decision of the Commissioner. Rater sought judicial review and the district court entered judgment in favor of the Commissioner. Rater then perfected this appeal.
Discussion
5
The Commissioner has established a five-step sequential evaluation process to determine whether claimants are eligible for Social Security disability benefits.2 See Bowen v. City of New York, 476 U.S. 467, 470-73, 106 S. Ct. 2022, 2024-26, 90 L. Ed. 2d 462 (1986) (Bowen ); Martin v. Sullivan, 901 F.2d 650, 652 (8th Cir.1990) (Martin ). At step four, the ALJ must determine whether or not the claimant is able to return to his or her past relevant work. The Social Security regulations define "past relevant work" as "work experience [which] ... was done within the last fifteen years, lasted long enough for [the claimant] ... to learn to do it, and was substantial gainful activity." 20 C.F.R. Sec. 404.1565(a). If the claimant is found to be able to perform the duties of his [or her] past relevant work, then he or she is considered not disabled and therefore ineligible for benefits. Bowen, 476 U.S. at 471, 106 S.Ct. at 2025; Martin, 901 lflores@example.net.
6
On appeal, Rater concedes that he is able to perform the duties of an incinerator operator/watcher. He argues, however, that the Commissioner erred in determining that this position constituted past relevant work under step four because the Commissioner failed to prove that it exists in significant numbers within the national economy. Although acknowledging that the Secretary's regulations do not expressly require a claimant's past relevant work to exist in significant numbers, he argues that the "plain language of the Social Security Act [the Act] itself ... would appear to require that a claimant's previous work must still exist in significant numbers in order for it to interrupt the sequential evaluation process at step four with a finding of 'not disabled.' " Brief for lflores@example.net. The Act provides in pertinent part:
7
An individual shall be determined to be under a disability only if [the individual's] ... impairments are of such severity that he [or she] is not only unable to do his [or her] previous work but cannot engage in any other kind of substantial gainful work which exists in the national economy.... For purposes of the preceding sentence ... "work which exists in the national economy" means work which exists in significant numbers either in the region where such individual lives or in several regions of the country.
8
42 U.S.C. Sec. 423(d)(2)(A). Rater argues that the quoted language contemplates "previous work" as representing one "kind of substantial gainful work which exists in the national economy;" he therefore contends that the term "previous work" is modified by the qualifying phrase "which exists in the national economy." Relying on the definition of "work which exists in the national economy" in the second sentence of the quoted language, Rater argues that a claimant's "previous work" must exist in significant numbers in the national economy in order to constitute past relevant work. In support of this view, he cites Kolman v. Sullivan, 925 F.2d 212, 213-14 (7th Cir.1991) (Kolman ). In Kolman, the Seventh Circuit held that a "nonexistent makework training job" that had been created under the auspices of a federal vocational program no longer in operation was not past relevant work because it did not exist in significant numbers within the national economy. Id. Characterizing his previous job as an incinerator operator/watcher as temporary and makeshift, Rater argues that the holding and reasoning of Kolman has equal force in the present case.
9
In response, the Commissioner contends that the position of incinerator operator/watcher was neither temporary nor makeshift, but rather, a position Firestone was required to fill for safety reasons. Moreover, addressing the statutory interpretation proffered by Rater, the Commissioner contends that "it is only at step five of the sequential evaluation process that the existence of a significant number of jobs becomes relevant." Brief for lflores@example.net. She notes that Social Security Ruling 82-61, which outlines the Secretary's framework for evaluation at step four, adopts such an interpretation of the Act. Similarly, the Commissioner argues that recent cases have established that a previous job need not exist in significant numbers in the national economy in order to constitute past relevant work. See, e.g., Garcia v. Secretary of Health & Human Servs., 46 F.3d 552, 556-59 (6th Cir.1995) (Garcia ). (non-English speaking claimant's previous job as car salesman in Puerto Rico constituted past relevant work even though it may not be available in significant numbers in United States for individual who spoke only Spanish); Quang Van Han v. Bowen, 882 F.2d 1453, 1456-57 (9th Cir.1989) (Quang Van Han ) (finding claimant not disabled because he could perform past relevant work as herbal pharmacy clerk in Vietnam although that job did not exist in the United States). By analogy to the present case, the Commissioner maintains that the incinerator operator/watcher position constituted Rater's past relevant work despite the vocational expert's testimony that the job did not exist in significant numbers in the national economy.
10
We agree with the Commissioner that the ALJ properly concluded that Rater's previous position as an incinerator operator/watcher was past relevant work. First, in light of the fact that Firestone developed the position to improve the safety of the incinerator area, we conclude that the job was neither "makeshift" nor temporary. Upon a careful reading of Kolman, 925 F.2d 212 (7th Cir.1991), we find it distinguishable from the present case. The "information security guide" position at issue in that case, unlike the incinerator operator/watcher position at issue in the present case, was created pursuant to a federal vocational program and was designed to be a transitional job which would help prepare the employee for "real work." Id. at 213. By contrast, the record in the present case clearly indicates that Firestone developed the incinerator operator/watcher position to correct certain safety problems in the incinerator area. Further, the position may not be characterized as temporary merely because Firestone later eliminated it pursuant to a restructuring of the incinerator area.
11
In addition, we hold Rater's argument concerning the proper interpretation of 42 U.S.C. Sec. 423(d)(2)(A) to be without merit. The statute does not require a particular job to exist in significant numbers in the national economy in order to constitute past relevant work. See Social Security Ruling 82-61.
12
We hold the ALJ did not err in concluding that Rater's former position as an incinerator operator/watcher constituted past relevant work under step four of the sequential evaluation process. Accordingly, the order of the district court is affirmed.
1
The Honorable Thomas M. Shanahan, United States District Judge for the District of Nebraska
2
The first step determines whether the claimant is engaged in "substantial gainful activity." If so, benefits are denied. 20 C.F.R. Secs. 404.1520(a), (b), 416.920(a), (b). If the claimant is not engaged in such activity, the process moves to the second step, which determines whether his or her impairment is "severe"--i.e., one which significant limits his or her ability to perform basic work activities. If the impairment is not severe, benefits are denied. Secs. 404.1520(c), 416.920(c). If the impairment is severe, the third step determines whether it meets or equals those set forth in the "Listing of Impairments" contained in subpart P, appendix 1, of the regulations, 20 C.F.R. Secs. 404.1520(c). If the impairment meets or equals a listed impairment, the claimant is conclusively presumed to be disabled and entitled to benefits. If the claimant's impairments are not listed, the process moves to the fourth step, which evaluates the individual's "residual functioning capacity" (RFC), or capacity to engage in basic work activities. If the claimant's RFC permits him to perform his past relevant work, benefits are denied. Sec. 404.1520(e). If the claimant is not capable of performing his past relevant work, the analysis proceeds to the fifth and final step, which determines whether, in light of the claimant's RFC, age, education, and work experience, he or she has the capacity to perform any other work. 20 C.F.R. Sec. 404.1520(f)
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Case 3:20-cv-03813-CRB Document 30 Filed 08/13/20 Page 1 of 2
1 Kerry S. Culpepper, HI Bar No. 9837, pro hac vice
Culpepper IP, LLLC
2 75-170 Hualalai Road, Suite B204
Kailua Kona, HI 96740
3
Tel: 209-354-5594
4 Fax: 209-354-5594
fryejames@example.net
5
Tobi Clinton, (SBN 209554)
6 330 Vernon St., Unit 795
Roseville, CA 95678
7
Tel: 209-354-5594
8 Fax: 209-354-5594
fryejames@example.net
9
Attorneys for Certain Defendants
10
11 UNITED STATES DISTRICT COURT
12 NORTHERN DISTRICT OF CALIFORNIA
13 HURRICANE ELECTRIC LLC,
Case No.: 3:20-CV-3813-CRB
14 Plaintiffs,
15 v. NOTICE OF APPEARANCE OF KERRY S.
CULPEPPER ON BEHALF OF
16 DALLAS BUYERS CLUB, LLC, et al. DEFENDANT DALLAS BUYERS CLUB,
LLC (TX)
17 Defendants.
18
NOTICE OF APPEARANCE OF KERRY S. CULPEPPER ON BEHALF OF
19
DEFENDANT DALLAS BUYERS, CLUB, LLC (TX)
20
21 TO: The clerk of court and all parties of record
22 Please take notice that Kerry S. Culpepper, counsel for DALLAS BUYERS CLUB, LLC,
23
a California LLC; GLACIER FILMS 1, LLC; DOUBLE LIFE PRODUCTIONS, INC.;
24
VOLTAGE PICTURES, LLC; COOK PRODUCTIONS, LLC; WWE STUDIOS FINANCE
25
CORP.; MON, LLC; TBV PRODUCTIONS, LLC; CELL FILM HOLDINGS, LLC; VENICE PI,
26
LLC; I AM WRATH PRODUCTION, INC.; POW NEVADA, LLC; HEADHUNTER, LLC;
27
28 NICOLAS CHARTIER; AVI LERNER; VOLTAGE PRODUCTIONS, INC.; KILLING LINK
CULPEPPER IP, LLLC
75-170 HUALALAI ROAD
SUITE B204
1
KAILUA-KONA,
HAWAII 96740
209-354-5594
Case 3:20-cv-03813-CRB Document 30 Filed 08/13/20 Page 2 of 2
1 DISTRIBUTION and CRAIG J. FLORES, hereby further enters his appearance on behalf of
2 Defendant DALLAS BUYERS CLUB, LLC, a Texas LLC.
3
4
DATED Kailua-Kona, Hawaii, August 13, 2020.
5
6 Respectfully Submitted,
7 CULPEPPER IP, LLLC
8
/s/ Kerry S. Culpepper
9 Kerry S. Culpepper
75-170 Hualalai Road, Suite B204
10 Kailua Kona, HI 96740
Attorney for Defendants
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
CULPEPPER IP, LLLC
75-170 HUALALAI ROAD
SUITE B204
2
KAILUA-KONA,
HAWAII 96740
209-354-5594
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381 N.W.2d 865 (1986)
In re the Marriage of Arden H. GRIEPP, Petitioner, Respondent,
v.
Janet E. GRIEPP, Appellant.
No. C6-85-961.
Court of Appeals of Minnesota.
February 18, 1986.
*866 Diana Smith Logan, Minneapolis, for respondent.
James C. Lofstrom, Alton, Severson, Sovis, Groves & Chezick, P.A., Apple Valley, for appellant.
Heard, considered and decided by FOLEY, P.J., and SEDGWICK and LANSING, JJ.
OPINION
FOLEY, Judge.
Janet H. Griepp appeals from a February 25, 1985 dissolution decree, claiming error in the trial court's distribution of marital property and in its award of rehabilitative maintenance. Post-trial motions to amend the judgment and decree or, alternately, to grant a new trial were denied. We affirm.
FACTS
Arden and Janet Griepp were married on March 14, 1959, separated on August 8, 1982, and divorced on February 25, 1985. The marriage produced three children, all emancipated at the time of the dissolution trial. For two and one-half years prior to and during the marriage, appellant was employed in various clerical positions. In 1959, she left her position as a steno clerk, pending the birth of the couple's first child. She ceased working outside the home after this period of time. Respondent and his brother are co-owners of Griepp Brothers Blacktopping, Inc., of which respondent is president, and a partnership, Griepp Brothers Partnership. Appellant worked part time for the companies doing clerical work and filing. The position was not paid.
During the marriage the parties lived in a three bedroom rambler with a heated double garage in Bloomington. The homestead included a large fenced-in yard, bordered on one side by a major interstate freeway. While the dissolution action was pending, both parties engaged separate appraisers for valuation of the homestead. Because of the wide discrepancy in the figures, the parties agreed to retain a third appraiser.
The proposal was made by appellant's former attorney, Judy Mack, in a letter dated April 13, 1984. The letter provided in pertinent part:
I discussed the issues of the valuation of the homestead and the personal property with Ms. Griepp. It is our proposal that the parties hire a professional appraiser to appraise both the property and its contents. Ms. Griepp would prefer that the parties agree that they would be bound by the appraisals. She also proposes that the parties share equally the cost of the appraisal. * * *
*867 Choosing the appraiser should be done by both parties and a neutral person unknown to either of them should be chosen. This way, they can both feel less constraints in agreeing to be bound by the appraisals.
In a letter dated May 24, 1984, respondent's present attorney stated:
This letter is to confirm our phone conversation. It is my understanding that I will obtain a third appraisal on the house and that we both will be bound by the third appraisal; * * * and that you will obtain a copy of the appraisal of Mr. Griepp's business and forward a copy to me.
The attorneys agreed upon appraiser George Johnson, whom both attorneys had used on a previous occasion.
Johnson appraised the Griepp homestead at $92,000. At the November 7-8 trial, he explained that his appraisal was based on a comparison method of valuation, a more accurate measure of residential property. The comparison point were three homes sold within two months of the appraisal and within two miles of the couple's home. The comparable homes had been sold for $86,250, $88,900, and $95,000. Johnson then evaluated the different features of the homestead and the comparable properties. With the net adjustments, the comparable properties were valued at $94,250, $91,900, and $92,000, respectively. His appraisal report indicated that the Griepp home had a lot and garage superior to all three comparable properties, but that its overall condition was inferior because it needed some decoration and painting.
William Ward, an appraiser retained by appellant after she received Johnson's report, also used a three-home comparison method of valuation. In Ward's opinion, the subject property had an estimated market value of $78,000. The comparable homes sold for $85,000, $82,900 and $81,000. The first comparable was located on the same block as the subject home, and the other two properties were approximately one mile east, close to a commercial area. In Ward's opinion, the single most important factor in appraising the subject property was its close proximity to Interstate 35W. He stated that the comparables were in superior condition and that a commercial office complex, apartments and condominiums within two blocks of the homestead diminished its value.
Respondent testified that in the past three years he has averaged a net monthly income of $3,160 during the seven months of the year in which blacktop may be laid. The trial court averaged this amount over 12 months to $1,843 per month. Although respondent's 1984 gross business income was likely to approximate $51,000, he indicated that his net income was unlikely to change due to increased operating expenses. Respondent submitted a monthly budget of $1,807, including $472 in recreational expenses. The trial court discounted the recreational expense as an unreasonable living expense.
Appellant testified that her monthly living expenses were $1,170. She stated that for a short time after the couple's separation in August of 1982, respondent paid the household expenses and provided her with an additional $200 per month. Subsequent to that time, she began paying for utilities and received an additional $400 per month from respondent, which was increased to $500 per month during the winter months.
It was uncontested that appellant earned $231 per month as rental income from a home in which she had inherited a 50% interest. Additionally, she usually received $100-150 per month for groceries from her son, who resided with her.
At trial, two rehabilitative counselors testified as to appellant's ability to become self-sufficient. Based on her interview of appellant, expert Lynn Arbogast concluded that appellant was "semi-skilled" and could immediately re-enter the job market earning $600-700 per month as a clerical worker. Arbogast noted that 1-2 years of vocational training would enhance appellant's employability.
Expert Lois Hennen concurred with most of Arbogast's conclusions. However, she disagreed with Arbogast's assessment that appellant was presently "semi-skilled," *868 finding instead that such a classification was more accurate of appellant's skills at age 24. Hennen estimated that appellant's earning capacity was limited to an hourly wage of $7 because she did not have a college degree. She concluded that appellant could re-enter the job market at an entry-level position after six months to two years of retraining.
Both experts testified that appellant lacked motivation to re-enter the job market but that could be overcome through retraining. The trial court adopted this opinion in its findings.
The trial court concluded that despite a possible ambiguity in the parties' agreement, the parties were bound by the $92,000 appraisal. Notwithstanding this finding, the trial court concluded that independent evidence supported the $92,000 appraisal. The trial court denied appellant's request for permanent maintenance and found no evidence to support appellant's claim that respondent dissipated the tax refunds for his own purposes.
ISSUES
1. Did the trial court err when it determined that the parties were bound by a third appraisal of the homestead at $92,000 and when it determined that independent evidence supported the appraisal, notwithstanding the parties' agreement?
2. Did the trial court err when it failed to determine that state and federal tax refunds were dissipated?
3. Did the trial court err when it awarded appellant rehabilitative maintenance in the amount of $800 per month for the first year of a four-year period at decreasing amounts and when it refused to award permanent maintenance?
ANALYSIS
We note from the outset that appellant's motion for a new trial was denied because it did not set forth specific grounds upon which a new trial was sought. See Minn.R. Civ.P. 59.01; Swartwoudt v. Swartwoudt, 349 N.W.2d 600 (Minn.Ct.App.1984). Accordingly, we need not review this particular claim.
1. Appraisal of Homestead.
Appellant contends that the trial court erred in finding that the parties were bound by the $92,000 appraisal. She claims that the binding effect of the agreement was dependent on two conditions, neither of which was met. First, that the appraiser was "unknown" to all parties involved, including the attorneys, and second, that respondent have no contact with the appraiser.
It is conceivable that "a neutral person unknown to either of them" included a person unknown to the attorneys since they actually selected the appraiser. Nonetheless, we think the third appraisal is binding on the parties. Appellant presented no evidence to substantiate her claim of undue influence by respondent. Furthermore, the attorneys from both sides had utilized Johnson's services on only one prior occasion. In short, there is nothing in the record to suggest that the parties received anything but an independent and neutral appraisal, the benefit of their bargain.
Even if we agreed with appellant, we would not similarly find clear error. Exactitude is not required by a trial court when valuing assets. It is only necessary that the value arrived at lies within a reasonable range of figures. Johnson v. Johnson, 277 N.W.2d 208 (Minn.1979). The trial court's valuation of the homestead at $92,000 is amply supported by the record.
The trial court was presented with appraisals by Johnson and by Ward. Both experts utilized a three-home comparison method of valuation measuring such factors as location of the home, size and condition of the home and yard, number of rooms and bathrooms, and necessary improvements. In its findings, the trial court stated:
Based on the size and condition of the parties' home, its location in a residential neighborhood, and the large, scenic lot on which the house is situated, and after a thorough consideration of both valuation reports and the comparable sales *869 upon which the valuations are premised, this court concludes that current fair market value of the parties' homestead is $92,000.
In Ferguson v. Ferguson, 357 N.W.2d 104, 107 (Minn.Ct.App.1984), this court stated:
Where conflicting opinions of expert witnesses have a reasonable basis in fact, the trier of fact must decide who is right, and the decision will not be overturned on appeal.
2. Tax Refunds.
Appellant claims the record supports that respondent dissipated $8,474 in tax refunds since his total monthly expenses, including monies paid for her support and for ski trips with the couple's children, exceeded his monthly income. In essence, appellant argues that respondent's control over the assets during the separation period and his use thereof constitutes dissipation. This claim is contrary to the law. Rather:
A party to a marriage subject to severance in divorce proceedings cannot be permitted to subvert the orderly processes of the courts by concealing, dissipating, or misusing his assets in anticipation of divorce so as to reduce the property available for division * * *.
Bollenbach v. Bollenbach, 285 Minn. 418, 428, 175 N.W.2d 148, 155 (1970). However, as the trial court properly noted, "the court may disregard depletions of marital assets prior to trial, in making its property division", Nolan v. Nolan, 354 N.W.2d 509, 513 (Minn.Ct.App.1984), pet. for rev. denied, (Minn. December 20, 1984):
[T]he payment of these living expenses of the parties with the tax refund does not constitute dissipation of a marital asset. * * * Since there is no basis in the record to conclude that the tax refunds were dissipated, the Court is unable to distribute or apportion the funds as a marital asset.
Furthermore, here neither the parties' tax returns for the period at issue nor check stubs were wyoung@example.net. Thus, the precise amount appellant claims to be dissipated is not clearly demonstrated. The trial court properly determined that the record was insufficient to establish dissipation.
3. Spousal Maintenance.
This court's scope of review of a maintenance award is well established.
The standard of review on appeal from a trial court's determination of a maintenance award is whether the trial court abused the wide discretion accorded to it. In the absence of a finding by this court of such abuse, the trial court's determination is final.
Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn.1982). Appellant contends that the trial court abused its discretion when it denied permanent maintenance and awarded rehabilitative maintenance at $800 per month for the first year out of a four-year period, rather than $1,000.
Pursuant to the statutory factors outlined in Minn.Stat. § 518.552 (1984), the trial court must balance the financial needs of the spouse seeking maintenance and his or her ability to meet those needs against the financial condition of the spouse providing the maintenance. Particular attention is given to periods of training or education. Krick v. Krick, 349 N.W.2d 350, 352 (Minn. Ct.App.1984), citing Erlandson v. Erlandson, 318 N.W.2d 36 (Minn.1982).
The trial court awarded spousal maintenance as follows:
[T]he sum of $800 per month commencing March 1, 1985, through February of 1986. Commencing March 1, 1986, spousal maintenance shall reduce to $700 per month and continue at this level through February of 1987. On March 1, 1987, spousal maintenance shall reduce to $500 per month and remain at this level through February of 1989.
In its detailed findings and accompanying memorandum, the trial court implicitly balanced the statutory factors in section 518.552. In Finding XI, it established that respondent's net monthly income over a 12-month period was $1,843 and that his monthly expenses were $1,335 (claimed amount less recreational expenses). The court found that this income amount had *870 remained fairly constant over a three-year period prior to the dissolution.
Appellant disputes this finding, claiming that respondent's own projections indicate 1984 income will be comparable to 1979 income, or $51,000. This 1984 projection is gross business income. Respondent clearly testified that operating expenses had increased since 1979 due to repair and replacement cost of blacktopping equipment and cost of materials. The dispositive factor here is not an increase in gross business income but rather the amount of disposable income respondent has based on his draw from the business. The record supports that this salary draw remained fairly constant from 1981 to 1983. The trial court's finding was not clearly erroneous. See Minn.R.Civ.P. 52.01.
Recent Minnesota decisions have limited awards of permanent maintenance to exceptional cases where there is little likelihood of a spouse attaining self-sufficiency. McClelland v. McClelland, 359 N.W.2d 7 (Minn.1984); Abuzzahab v. Abuzzahab, 359 N.W.2d 12 (Minn.1984).[1] Mindful of these cases, the trial court stated:
In the instant case, based upon this court's finding that [appellant] is capable of full-time employment, and in light of the property distribution herein, an award of permanent spousal maintenance is inappropriate.
Appellant contends that the present case is similar to Swanstrom v. Swanstrom, 359 N.W.2d 634 (Minn.Ct.App.1984). In Swanstrom, the trial court awarded the wife $800 per month in permanent maintenance. This court affirmed, distinguishing the case from Abuzzahab and McClelland where the capacity for attaining a degree of self-sufficiency was clearly demonstrated. Swanstrom is distinguishable from the present case. In that case, the wife had no vocational skills or independent resources. She had attempted to pursue an accounting major but could not pass the required tests. Further, she had health problems that could affect her ability to work and had two minor children wyoung@example.net. The trial court also took judicial notice of the fact that the parties lived in Duluth, an economically depressed area.
Here, the couple's three children were all emancipated at the time of the trial. More importantly, however, both rehabilitative counsellors who interviewed appellant testified at trial that she had vocational skills which would enable her to gain an entry-level clerical job. Both experts recommended a training period of up to two years so that appellant could enhance her employment opportunities. The record is void of any evidence disputing appellant's ability to re-enter the job market and eventually attain self-sufficiency.
The trial court's award of rehabilitative maintenance over a four-year period incorporates careful consideration of appellant's apparent ability to re-enter the job market:
Although [appellant] is receiving marital property valued at $102,725 as her share of the property distribution, only $9,725 of the distribution is in cash or a promissory note which is available to help [appellant] meet her needs at the present time * * *. Based upon the evidence presented at trial, it is apparent that [appellant] requires spousal maintenance during this time period of retraining and making the transition to full-time employment but that she is capable of becoming fully self-supporting.
While the trial court might have reserved jurisdiction over the permanent maintenance issue as illustrated in Abuzzahab and McClelland, we take particular note that the trial court retains jurisdiction over temporary maintenance until the obligation ceases and may within this time, upon appellant's motion, modify the award if retraining *871 is unsuccessful. See Wibbens v. Wibbens, 379 N.W.2d 225 (Minn.Ct.App. 1985). Its reasons for denying permanent maintenance were fully explained in the original judgment and reiterated with careful detail in its denial of post-trial motions. Appellant was afforded a full and fair hearing on her request for permanent maintenance.
DECISION
The trial court did not err when it determined that the parties' agreement for an independent appraisal was fulfilled, that independent evidence supported valuation of the homestead at $92,000 and that insufficient evidence existed to support tax refunds were dissipated. The trial court properly determined that rehabilitative maintenance at the levels prescribed, and not permanent maintenance, was indicated when undisputed expert testimony established that appellant could re-enter the job market and attain self-sufficiency after a period of retraining.
Affirmed.
NOTES
[1] While not applicable to this case, we note that the 1985 amendments to Minn.Stat. § 518.552 modify McClelland v. McClelland, 359 N.W.2d 7 (Minn.1984), and Abuzzahab v. Abuzzahab, 359 N.W.2d 12 (Minn.1984), by providing that "[n]othing in this section shall be construed to favor a temporary award of maintenance over a permanent award, where the factors under subdivision 2 justify a permanent award." 1985 Minn.Laws, ch. 266 § 2 (amending Minn.Stat. § 518.552).
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292 Md. 228 (1981)
438 A.2d 501
ATTORNEY GRIEVANCE COMMISSION OF MARYLAND
v.
LEONARD JULES KERPELMAN
[Misc. (BV) No. 7, September Term, 1980.]
Court of Appeals of Maryland.
Decided December 29, 1981.
The cause was argued before MURPHY, C.J., and SMITH, DIGGES, ELDRIDGE, COLE, DAVIDSON and RODOWSKY, JJ.
Leonard Jules Kerpelman, in proper person, respondent.
Walter D. Murphy, Jr., Assistant Bar Counsel, for petitioner.
COLE, J., delivered the opinion of the Court.
Leonard Jules Kerpelman, a member of the bar of this State, was charged by the Attorney Grievance Commission *230 with professional misconduct. Pursuant to Maryland Rule BV 9, § b, this Court directed that the charges be transmitted to and heard by Judge Calvin R. Sanders of the Circuit Court for Montgomery County. Being advised that Judge Sanders would not be able to participate in the matter, the case was reassigned to Judge Joseph M. Mathias of the same court. A hearing was conducted by Judge Mathias, after which he concluded that there was clear and convincing evidence that Kerpelman had violated several disciplinary rules. Kerpelman filed some forty-one exceptions to these findings. We shall summarize the facts and discuss the exceptions that are pertinent to our disposition.
The central figures involved here, Kerpelman and Dr. Leslie F. Major, first met in October, 1977, at a meeting of Fathers United.[1] The two discussed child custody, alimony, and divorce problems which Major was experiencing as the result of domestic difficulties with his wife. Major was at this time being represented by another attorney, Jackson Brodsky. Three or four weeks later, Major called Kerpelman and the two discussed whether Kerpelman would represent Major and what the fee arrangement would be. According to Major, Kerpelman said that he would charge a $2,000 retainer and $70 per hour, but that the $2,000 would probably just about cover the total costs. Kerpelman, on the other hand, said that he told Major that there would be a retainer that would represent the minimum fee and that there would be a $70 fee as an hourly rate. According to Kerpelman, he told Major that the $2,000 was only a retainer and that the final fee would be greater if the case was successful. Both parties agree that the $2,000 was paid before the trial and that Major thereafter sent several notes to Kerpelman about various aspects of the case and witnesses. Kerpelman apparently did not interview any of the witnesses.
During the course of the trial in the Circuit Court for Montgomery County, Kerpelman presented Major with a *231 written fee agreement,[2] the amount of which was to be determined by results obtained and a variety of other factors. Major testified that the first time he saw this agreement was at a crucial point during the final day of the trial when a favorable witness was being cross-examined by the other side. Major alleged that he told Kerpelman at that time that *232 he wanted to discuss the matter but that Kerpelman said to sign it right then. To avoid getting into a fee dispute that might jeopardize the successful outcome of his case, Major signed the "new agreement."
Kerpelman's version is somewhat different. He alleged at the hearing before Judge Mathias that he mailed the agreement to Major, who brought it to the trial signed. In a prior deposition for another proceeding Kerpelman contradicts this by saying that he gave the new agreement to Major in Kerpelman's office. He denies that he presented the agreement to Major for the first time during the trial.
The trial lasted for three days and Major was awarded custody of his children and required to pay no alimony. Kerpelman kept no records of the time he spent on the case but estimated it variously at 28 hours or 38.8 hours. Kerpelman subsequently sent Major a bill for $8,500.00 based, he said, on the successful outcome of the case. Major protested, saying that the additional $8,500 was not the sum they had agreed upon, and Kerpelman filed suit for the fee.
The following are excerpts of the exchange between Kerpelman and Major regarding the increased bill. Major's first reply:
I first contacted you in late October and ... you stated your fee at $70.00/hour and when I had some doubts if I could afford your (sic) you assured me that you worked very efficiently and that the *233 $2000.00 retainer you figured would cover the expenses of a contested divorce and custody scheduled for May 8, 9, 10.
* * *
Based on this, I retained you and paid the $2000.00 retainer over the next three months ... You did in fact work very efficiently. We met only once on May 5, for 1 1/2 hours. We talked on the phone several times, totalling one hour. You issued one request for an earlier court date and answered Ms. Groner (sic) objection to that request. Court was in session for 2 hours on Monday, 6 hours on Tuesday and 6 hours on Wednesday. It appeared to me that the retainer would more than cover the time spent reimbursable at $70/hour as we had agreed upon.
* * *
The other issue I would like to address has to do with the incident on Wednesday, May 10th, when you slid a piece of paper over to me during the trial saying I should sign it. It amounted to a vague contingency agreement. Since I was in no condition to concentrate on it (sic) ask you questions, I suggested we wait until (sic) after recess to discuss it. You made it quite clear that you wanted me to sign it then. Considering the situation, i.e., that this was the most crucial part of the trial where I was most dependent on your working in my interest, I did not feel I could argue with you or allienate (sic) you at that point. However, to give an analogy from my profession, it would be like having you come to me for an operation, having agreed on the fee and then when I had you on the operating table ask you to sign an agreement based on outcome you would hardly be in a position to negotiate, particularly if I had already started the operation and you had no choice but to continue with me. I hope you can *234 appreciate this analogy and place yourself in my position.
The respondent's abbreviated response to Major's letter of protest was:
Your letter of June 5th is nonsense.
My retainer is, as explained, the bottom possible cost; my final fee is based, among other things, on result.
Major responded:
My letter of June 5th clearly and accurately states our verbal agreement and the extent of our contact. Your attempt to change the agreement on the last day of the trial while court was in session was highly offensive and manipulative.
* * *
If you wish to pursue this matter please send me a bill itemizing your hours explicitly and a copy of the paper you had me sign May 10th.
Kerpelman, even before receiving the above letter, got off another response to his client:
I thought you would be so overjoyed at having overachieved, in your case, by having acquired results far beyond any hope or expectation of achievement, that you would fall all over yourself paying my bill immediately.
No alimony! Custody of the children! A miraculous achievement for Montgomery County, although it would have been almost equally miraculous anywhere else.
You are too much.
Major responded, in part:
In response to your letter of June 14, 1978, I am of *235 course overjoyed at having custody of my children. I am also grateful for your efforts in helping me achieve this. I would liked to have been able to maintain this feeling of appreciation, but your attempt on May 10th to unilatterly (sic) change our agreement was a grievous breach of trust. I stand by our original agreement as outlined in my last letter to you. If you would do so also, we could rectify the situation to some degree. In the meantime, I have retained another lawyer for any further proceedings in my case. His name is Reginal (sic) Bours III, 30 Courthouse Sq., Suite 301, Rockville, MD. 20850.
The next letter from Kerpelman to his client, dated June 22, 1978, responds to Major's letter of June 15. Pertinent excerpts are:
Your letter of June 15 is entire nonsense and misstates the facts completely.
Kindly pay my montoyakatie@example.org.
* * *
You were given a copy of the paper you requested already, but I enclose another copy for your information.
As we agreed and as you clearly understood my bill was never to be based on hours spent. It was to be based on the value of the services, the difficulty of achieving the end in view and the other matters set forth in the agreement. [Emphasis in Original].
Major retained another lawyer and counterclaimed, alleging fraud. Kerpelman thereupon filed an amended complaint raising the fee from $8,500 to $23,000.[3] The reason for the change, according to Kerpelman, was that his *236 first demand was only a modest fee and, since Major was claiming that the agreement was null and void, he applied all the factors relevant to the quantum meruit recovery. This case was tried before a jury, which found for Major on both Kerpelman's claim and Major's counterclaim but awarded only nominal damages of $1.00.
At the hearing before Judge Mathias, Bar Counsel called Jackson Brodsky as an expert witness regarding domestic legal practice. Mr. Brodsky testified that the $23,000 figure was "clearly excessive," basing his opinion on DR 2-106 which defines a fee as being clearly excessive "when and after a review of the facts a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee is in excess of a reasonable fee." Kerpelman called Judge John J. Mitchell, the presiding judge in Major's domestic case, who testified that the $23,000 was "pretty high" but not outrageous.
Judge Mathias found that Kerpelman had violated the following disciplinary rules:
DR 1-102 Misconduct
(A) A lawyer shall not:
* * *
(4) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.
(5) Engage in conduct that is prejudicial to the administration of justice.
(6) Engage in any other conduct that adversely reflects on his fitness to practice law.
DR 2-106 Fees for Legal Services
(A) A lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee.
*237 DR 7-101 Representing a Client Zealously.
(A) A lawyer shall not intentionally
* * *
(2) Fail to carry out a contract of employment entered into with a client for professional services, but he may withdraw as permitted under DR 2-110, DR 5-102, and DR 5-105.
DR 7-102 Representing a Client Within the Bounds Of The Law.
(A) In his representation of a client, a lawyer shall not:
* * *
(5) Knowingly make a false statement of law or fact.
Before us Kerpelman made forty-one exceptions to the findings of Judge Mathias.[4] As several involve related issues and can be treated as groups we will discuss them as groups where applicable rather than seriatim as presented by Kerpelman.
Several of the exceptions can be characterized as presenting no more than bald assertions or editorial comments on the proceedings or the people involved. Kerpelman, in exception number 6, suggests that the findings of the trial judge are "a thinly disguised effort to deny" him his rights to free speech and due process. He does not allege in what manner his freedom of speech has been impaired and since the record reflects no basis for the allegation it is without merit. In exception 11 he claims that Judge Mathias was hand selected to find him guilty. In exception 22 he claims that the Attorney Grievance Commission and its staff are "creatures of this Court" and "are completely under the thumb of this Court and exist only to do this Court's bidding," i.e., to find him guilty. In number *238 25 he protests that proof of the Commission's bias can be found in the fact that it has never lost a case before this Court. In number 28 Kerpelman says that the grievance system set up by this Court lacks checks and balances which is a denial of due process. In exception 29 he says in effect that this Court has delegated its rule making power thereby giving the Attorney Grievance Commission unbridled control over the practicing bar. In exception 33 he alleges again a conspiracy between the Chief Judge of this Court and Judge Mathias. In number 34 Kerpelman announces his intention to supplement these exceptions if he so desires. Not only are the above exceptions unsupported but they are specious and frivolous and deserve no further comment.
Kerpelman also makes several evidentiary exceptions. He proposes in exceptions 2, 3, 4, 5, 30, and 40 that the findings "do not meet the constitutional standard implicit in the requirement of `clear and convincing evidence.'" He cites an overruled federal case for support, Terrazas v. Vance, 577 F.2d 7 (7th Cir.1978), rev'd 444 U.S. 252, 100 S. Ct. 540, 62 L. Ed. 2d 461 (1980); reh. den. 445 U.S. 920, 100 S. Ct. 1285, 63 L. Ed. 2d 606 (1980), which is inapposite in any event.
We note that the requirement that there be clear and convincing evidence before an attorney may be disciplined is imposed by virtue of Rule BV 10, § d of the Md. Rules. Moreover, we find nothing in the record to suggest that Judge Mathias did not correctly apply the clear and convincing standard here. Judge Mathias was charged with the responsibility of hearing and seeing the witnesses, observing their demeanor and manner while testifying, assessing the weight of their testimony, and determining the probative value of the exhibits admitted into evidence. This he accomplished, explicating the bases for his results in admirable fashion. The evidence was clearly sufficient to support his conclusions.
Exceptions 7 (Brodsky was biased and too old to testify), 8 (Judge Mitchell's testimony was not properly weighed), 9 (Brodsky's opinion was based on an improper standard), 10 (reiterating exceptions 7 and 9), and 21 (the circuit court's belief of some parts of Major's testimony and not others was *239 contradictory) are also evidentiary type exceptions. For the reasons discussed above they are likewise without merit.
Kerpelman raises a due process question in at least seventeen of his forty-one exceptions. In exceptions 13, 22, 26, and 28 Kerpelman alleges that the use of judges as masters, the use of the clearly erroneous rule as to masters, and the attorney disciplinary procedure itself are denials of due process. There is, again, no support presented for these contentions and they are completely without merit. See Attorney Grievance Commission v. Kerpelman, 288 Md. 341, 377-78, 420 A.2d 940 (1980).
In exceptions 15, 16, and 17 Kerpelman contends that he was convicted solely on the basis of the testimony of a disgruntled client, that this cannot rise to the clear and convincing standard, and that this is a denial of due process. The first answer to this is that the factual premise is palpably untrue. Kerpelman was found to have violated the disciplinary rules based on the exhibits submitted by Bar Counsel, and the testimony of Major, Kerpelman himself, Brodsky, and Judge Mitchell. The second answer to this is that we have already held that a client's testimony, without more, is sufficient to satisfy the standard. Attorney Grievance Commission v. Kerpelman, supra, 288 Md. at 360-61.
Exception 33 alleges that Chief Judge Murphy of this Court and Judge Cahoon of the Circuit Court for Montgomery County conspired with one another to select Judge Mathias as part of a plot or scheme to see that Kerpelman was convicted of the disciplinary charges. Kerpelman characterizes this conspiracy as a belief. He offers no evidence to support his contention none appears in the record and we shall infer none. There has been no denial of due process and this contention is without merit.
In exceptions 35, 36, and 37 Kerpelman alleges due process violations in that all the Montgomery County judges should have been disqualified; that the case should have been transferred out of Montgomery County; and that Judge Mathias should have recused himself. These are bald assertions without any precedential or evidentiary support. *240 Kerpelman was heard on this matter before Judge Mathias, who ruled against Kerpelman's motions. There is nothing in the record to indicate Judge Mathias was clearly erroneous. These exceptions are without merit.
In exceptions 38 and 39 Kerpelman alleges as a due process violation that the members of the Court of Appeals are not familiar with the trial transcript. We reject this allegation because it is not based on fact. Moreover, Kerpelman did not support this argument by referring to portions of the record that he desired the Court to read. At argument before us he made no attempt to indicate where in these proceedings he was prejudiced. A full and fair opportunity to be heard has been afforded to Kerpelman and he cannot assign his inability or unwillingness to direct the Court to pertinent segments of the record as a denial of due process. This contention is without merit.
In exception 14 Kerpelman challenges the provision of appeal by way of exceptions as an unconstitutional denial of due process. He proposes no reason why and we can find none. A respondent may and, indeed, is most heartily encouraged to, include citations of authority and references to whatever materials are before the Court to support his position. That Kerpelman was unable to or unwilling to avail himself of this opportunity does not reflect on the process itself. This contention is without merit.
Kerpelman excepts in Number 18 to Judge Mathias's ruling that a fee agreement from another law firm was inadmissible as evidence. The form or content of Kerpelman's agreement was montoyakatie@example.org. The evidence was irrelevant and Judge Mathias correctly excluded it. Even if the evidence was admissible, Kerpelman has failed to show how he was in any way injured by its exclusion. This contention is without merit.
In exception 20 Kerpelman decries his inability to be heard by a jury in these proceedings. "[D]isciplinary proceedings against attorneys, in the absence of a rule or statute to the contrary, are not encompassed within the constitutional guarantees of trial by a jury, be that guarantee *241 state or federal." Attorney Grievance Commission v. Kerpelman, supra, 288 Md. at 356. This contention is without merit.
In exceptions 12, 23, and 27 Kerpelman challenges the authority of this Court to formulate rules for the Bar and to set up and administer the attorney disciplinary proceedings. "The superintending power of courts over their bars is deeply ingrained in the system of law which we inherited from our forebears at the time of the American Revolution. It has continued to this day." Id. at 375. This contention is without merit.
Kerpelman also makes three allegations of violations of the Equal Protection Clause of the Fourteenth Amendment: exceptions 19, 24, and 31 (alleging Kerpelman has been unfairly singled out for prosecution). Kerpelman makes no attempt to show in what manner he has been treated differently than any other attorney in this State. These contentions are without merit.
In exception one Kerpelman maintains that venue was improperly and unconstitutionally laid. Maryland Rule BV 9, § b specifically authorizes this Court to assign venue to any court in this state and Kerpelman cannot and does not maintain that the chosen forum was vexatious and oppressive out of all proportion to his convenience. See Piper Aircraft Company v. Reyno, 450 U.S. 909, 102 S. Ct. 252, 70 L. Ed. 2d 419 (1981). This contention is without merit.
In exceptions 32 and 41 Kerpelman charges that the Chief Judge of this Court should disqualify himself because of an article authored by Kerpelman appearing in the "Charleston West Virginia Gazette Mail Newspaper." This exception is patently absurd.
Interspersed throughout these exceptions Kerpelman has made the persistent accusation that these proceedings are a guided and concerted effort by this Court, the judges of the Circuit Court for Montgomery County, and the attorneys of the Attorney Grievance Commission to secure a guilty verdict against Kerpelman. He offers no proof and such contention is frivolous.
*242 Having addressed and found no merit in Kerpelman's exceptions, we now turn our attention to the conclusions of the trial court. Judge Mathias found by clear and convincing evidence that
[e]ither the respondent quoted a fee based on an hourly rate of $70 knowing that he was not going to abide by such an arrangement if the case was won or, having won the case, decided the time was propitious to extract a larger fee than had been agreed upon.[5] Engaging in such conduct involves dishonesty and deceit and is prejudicial to the administration of justice and furthermore reflects on the respondent's fitness to practice law.
We concur in that result. We do not believe, however, that this is the kind of deceit that merits automatic disbarment. This is not to say we rule out disbarment as a sanction in all cases involving an attorney's misrepresentation of his fee, nor do we mean to convey anything but antipathy for this type of conduct. Based on the facts of this case, however, this violation of the disciplinary rules by itself does not call for disbarment.
Judge Mathias also found that Kerpelman had tried to extract a clearly excessive fee from his client, violating Disciplinary Rule 2-106(A). Using the higher of Kerpelman's time estimates, 38.8 hours, and the hourly fee Kerpelman agrees that he quoted to Major, $70, the most Kerpelman could have charged for this case was $2,716. Even using the $125 per hour figure referred to by Judge Mitchell in his testimony, Kerpelman could only have charged $4,850. Yet Kerpelman ultimately demanded a total fee of $25,000.
The Code of Professional Responsibility, DR 2-106(B) provides:
B) A fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudence would *243 be left with a definite and firm conviction that the fee is in excess of a reasonable fee. Factors to be considered as guides in determining the reasonableness of a fee include the following:
(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly.
(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.
(3) The fee customarily charged in the locality for similar legal services.
(4) The amount involved and the results obtained.
(5) The time limitations imposed by the client or by the circumstances.
(6) The nature and length of the professional relationship with the client.
(7) The experience, reputation, and ability of the lawyer or lawyers performing the services.
(8) Whether the fee is fixed or contingent.
In the instant case Jackson Brodsky, a practicing attorney who was qualified as an expert in domestic relations matters at the disciplinary hearing, testified that in his opinion Kerpelman's fee was clearly excessive. Comparing the evidence with the guidelines of the Code of Professional Responsibility, we must agree. Kerpelman testified that the case took no more than 38.8 hours; the matter was not one that precluded other employment; there were no straining time limitations imposed; and these were not the type of fees customarily charged in Montgomery County. Keeping before us the premise that the legal profession is a branch of the administration of justice and not a mere money-getting trade, we cannot and shall not condone this type of practice.
Judge Mathias also found Kerpelman guilty of failing to *244 carry out a contract of employment and knowingly making a false statement of fact by entering into a contract to represent his client for $70 an hour and then failing to abide by the agreement by representing to his client that his fee would be calculated on a quantum meruit basis; violations of DR 7-101 (A) (2) and DR 7-102 (A) (5) respectively. These are based on Judge Mathias's factual finding that Kerpelman first represented his fee as a $2,000 retainer and $70 an hour. Due to Kerpelman's equivocations, the correspondence between Kerpelman and Major, and the opportunity of the trial judge to observe the witnesses, we cannot call this finding unsupported by clear and convincing evidence. We, therefore, affirm the conclusions of Judge Mathias on these two violations.
Having concluded that Kerpelman was guilty of violating the four aforementioned disciplinary rules, we must now turn our attention to the sanction to be imposed. The Attorney Grievance Commission has recommended disbarment. As we noted, this is not a case of automatic disbarment. However, in Kerpelman's thirty-one years of practice in this State, this is the second time he has been found guilty of professional misconduct. See Attorney Grievance Commission v. Kerpelman, supra. If we could conclude that this was a pattern of conduct we would not hesitate to disbar. The conduct referred to in this case, however, took place while the investigation was being conducted in the previous case and prior to any proceedings therein. For this reason we will not infer such a pattern.
Weighing heavily against Kerpelman in this case is the manner in which he sought to raise his fee. He waited until a propitious moment during the trial when its outcome looked favorable and compelled his client to sign the agreement without an opportunity for discussion. This is gouging of the lowest and most under-handed order that will not be tolerated among the members of the bar of this State. It is conduct which brings the legal profession into disrepute and against which the public is entitled to protection.
After reviewing the types of misconduct involved here, we conclude that the proper sanction is a suspension. Having *245 agreed on suspension rather than disbarment as the proper sanction, we add that any similar misconduct proved against this attorney will reflect most adversely upon his fitness to practice law in this State.
Leonard Jules Kerpelman shall stand suspended from the practice of law in this State for a period of one year accounting from October 6, 1982.[6] He shall stand suspended beyond that date unless and until all costs incurred in connection with this proceeding are paid in full.
It is so ordered; respondent shall pay all costs as taxed by the Clerk of this Court, including the costs of all transcripts, pursuant to Maryland Rule BV15 C for which sum judgment is entered in favor of the Attorney Grievance Commission against Leonard Jules Kerpelman.
*246 APPENDIX
Because of the unusual nature of some of Mr. Kerpelman's exceptions and our categorizations and summarizations of them we have set out the exceptions in full as they were presented to this Court.[*]
EXCEPTIONS TO "FINDINGS OF FACT AND CONCLUSIONS OF LAW"
Now comes the Respondent, LEONARD J. KERPELMAN, in Proper Person, and for exceptions to "Findings of Fact and Conclusions of Law" says:
1. Venue was improperly laid, denying the Respondent of a fundamental constitutional right under the federal Constitution, Amendments Five and Fourteen, and under the Maryland State Constitution.
2. The Findings are against the evidence.
3. The Findings are against the weight of the evidence.
4. The Findings do not meet the constitutional standard implicit in the requirement of "clear and convincing evidence." See particularly the federal case of Terrazas v. Vance, 577 F.2d 7, and cases cited therein, and my Petition for Certiorari enlarging the argument thereof.
5. The Findings are actually beyond credibility as being totally unsupported by the balance of the evidence under any "clear and convincing" standard and represent a mere effort to silence the Respondent for his views on the justice system in Maryland and for his vigorous representation of persons abused by that system or dissatisfied with it because they do not receive fair treatment under it, all of which the Respondent has made known as his opinion.
6. The Findings are a thinly disguised effort to deny the Respondent his right of free speech and his right to Due *247 Process under, respectively, the First, Fifth, and Fourteenth Amendments to the United States Constitution as well as provisions of the Maryland Declaration of Rights.
7. The Findings simply ignore the bias, prejudice, and ignorance of the witness Brodsky, as well as his condition of debilitation due to age which was quite apparent at the taking of his testimony.
8. The Findings ignore the clearly stated opinion of the expert witness Mitchell and which should be given greater credence than the normal witness's opinion by this Court due to this Court's pronouncements upon the "ability" of a judge to express special knowledge upon the question of proper attorneys' fees, and particularly as measured against the "clear and convincing" standard.
9. A simple examination of the cross-examination testimony of the witness Brodsky indicates that he erroneously based his opinion concerning the excessiveness of the fee upon "time" alone, or alternatively that an expression of an opinion based upon "time" alone has no provative value whatsoever in this case since the fee charged was not by "clear and convincing" evidence based on time alone but upon those factors listed in the very DR Rules which are herein referred to. See Brodsky's cross-examination, particularly the latter part thereof.
10. Brodsky's testimony was a mere effort to ingratiate himself with the court as is apparent from his entire testimony; and his "opinion" was based on a mere perusal of the file in the case which is not an adequate basis for such opinion aside from the fact that he based his opinion upon the amount of time spent alone.
11. The so-called "master" or "examiner" in the person of Judge Mathias was hand selected, as the preliminary motions show, and particularly the testimony connected therewith, to deliver a guilty verdict, and his selection, perhaps by the instrumentality of Cahoon, was not such random selection as would be expected to produce a fair result, but was a selection "made with an uneven hand" and with the purpose of producing a conviction.
*248 12. The court proceeding is itself unconstitutional representing a usurpation of legislative power by this Court and, as well, a usurpation of constitutional power reserved to the people of this state who alone have the power to set up a court; the proceedings represent a usurpation of the judicial power delimited by Maryland Constitutional Article IV.
13. This Court's clearly "erroneous" rule as to "masters" is an unconstitutional denial of Due Process under the Fifth and Fourteenth Amendments of the United States Constitution.
14. The provision of an "appeal" by way of "exceptions" only is not a Due Process appeal but is arbitrary and limited and a denial of Due Process rights under the Fifth and Fourteenth Amendments of the United States Constitution.
15. It is a denial of Due Process to convict an attorney for ethical violations upon the mere uncorroborated testimony of a disgruntled client.
16. It is a denial of Due Process to convict an attorney for ethical violations upon the mere uncorroborated testimony of a disgruntled client, particularly one who had a financial stake in the filing of the complaint in the first place; such uncorroborated testimony cannot rise to meet the "clear and convincing" standard.
17. It is a denial of Due Process under the Fifth and Fourteenth Amendments of the United States Constitution to convict an attorney for an ethical violation over what was clearly a bona fide fee dispute only.
18. The Court's suppressed evidence of common practice in Montgomery County, by its refusal to admit into evidence a completely nonunderstandable type of fee agreement used by one of the shining lights in that County, an attorney's office, in that county which is apparently revered by both the bench and the bar as, among other things, a big money maker; when the Respondent sought to refer to its contract with this very same complainant, Major, for comparison, the contract was rapidly ruled inadmissable, which it was not; whereby the Respondent was also denied Equal Protection of the laws.
*249 19. Maryland Attorney Grievance Commission and this Court is engaging in selective prosecution which is a denial of Equal Protection of the Laws.
20. The Respondent was denied his right to a trial by jury in derogation of the Fifth, Seventh and Fourteenth Amendment of the United States Constitution.
21. The Court contradicted itself by disbelieving the "clearness" and "convincingness" of Major's allegations concerning being advised to snatch his child, but at the same time finding the same witness's uncorroborated testimony about the agreement he entered into with the attorney to be "clear" and "convincing."
22. The participation of the Maryland Attorney Grievance Commission in this matter is a denial of Fifth and Fourteenth Amendment Due Process rights under the federal Constitution because the Commission and its staff are entirely creatures, instrumentalities, and extension of the wishes and desires of this Court, are completely under the thumb of this Court and exist only to do this Court's bidding; which in this instance is to secure a finding of guilt against the Respondent; and the "master" is also a mere instrumentality and extension of this Court, not unbiased, nor objective entity, and the use of a "master" under these circumstances is a denial of Due Process under the Fifth and Fourteenth Amendments to the United States Constitution.
23. This Court's order and fiat dated February 5, 1975, instituting a new so-called "disciplinary code", replacing the august and venerable Canons of Professional Ethics of the Maryland Bar Association, and thereby legislating unconstitutional rules for the practice of law was a usurpation of the legislative prerogative to establish standards for the practice of law, and was illegal, unconstitutional and void, and to have convicted the Respondent under that February 5, 1975 order is therefore unconstitutional and illegal.
24. Bona fide fee disputes are always referred to the Fee Arbitration Committee head by Ben Lipitz, Esquire, in Baltimore City, when they involve a Baltimore Attorney, *250 and that was not done in this case; this constitutes a denial of Equal Protection of the Laws; it is believed that never has a mere fee dispute ever before been made the basis of proceedings like these.
25. The Maryland Attorney Grievance Commission has never lost a case which it has brought to this Court, which in itself indicates that the proceedings are biased, prejudiced, and not conducted with an even hand in violation of federal Due Process standards.
26. This Court has abdicated any "judging" function which it has by submitting the case to a master, which is unconstitutional as a denial of Due Process. This case is not the same as stating an account, judging real estate appraisals, and other such far removed instances as have been cited by Judge Marvin Smith in a previous opinion against this Respondent; a referal to a master is therefore unconstitutional when done non-consensually and this Respondent has certainly never consented to have this matter tried by a master. He wishes to have it tried by a jury, always has, and always will.
27. This Court has no right to make rules in the area of attorney discipline; it is a legislative prerogative which the legislature cannot delegate.
See the concurring opinion of Moylan, J. in Porter v. State, 47 Md. App. 96, 105, decided November 7, 1980.
28. This Court has set up a system of trying attorneys which applies to no other citizen in the state, or for that matter in the world, and the system lacks checks and balances, making it unconstitutional as a denial of Due Process, for the entire system is a monolithic melting together of this Court, the Attorney Grievance Commission, and the so-called "master", which well explains why the Attorney Grievance Commission has never lost a case here.
29. This Court by permitting the Maryland Attorney Grievance Commission to suppress complaints against whom it will, which it does customarily for "friends", has delegated its rule making power and given the Attorney *251 Grievance Commission carte blanche to make its own determination of "propriety" in an entirely unrestricted manner, leaving the practicing bar at the mercy of such as Myerberg, Pittman, Martin, and Murphy, and members of the bar who know these personalities though they may quake in their boots at expressing an opinion upon them, nevertheless know what I speak of.
30. "Clear and convincing" evidence requires according to Terrazas v. Vance, supra, that all ambiguities must be resolved in favor of the Respondent; and this was not done; whereby the Respondent has been denied Due Process of Law.
31. This Court has set up a system of prosecuting attorneys which gives the Maryland Attorney Grievance Commission free rein in giving forebearances to attorneys unrestrictively, to violate the Attorney disciplinary code, the Respondent being in possession of voluminous information to illustrate this fact; but which is within this Court's knowledge, it is believed, and which this Court condones; and thereby the Respondent is denied Equal Protection of the Laws; the Respondent demands an evidentiary hearing before this Court in bank and open to the public upon this matter.
32. The Chief Judge of this Court who has fully participated to an unknown extent in these proceedings should have disqualified himself from any participation, due to the fact that the Respondent was the author of an article which severely criticized him and which appeared in the Charleston West Virginia Gazette-Mail Newspaper, a newspaper of some 150,000 circulation, after publication was rejected by the local press; and because the Respondent had been severely critical of the said Chief Judge who by Article X of the Maryland Constitution has the job of being chief administrator of the Maryland court system; the Respondent severely criticized the Chief Judge for his handling of a matter regarding apparent inefficiency or malfeasance by Judge Cahoon in a certain case and the Chief Judge was criticized for refusing to answer the complaint *252 made by the Respondent concerning this matter; this matter never appeared in the press after that refusal although after that refusal the Respondent had attempted to have the matter made public knowledge.
33. The Respondent has no direct knowledge but he believes that the Chief Judge may have actively and knowingly participated in the selection of a hostile judge below to try this matter as "master" in concert with the same hostile Judge Cahoon referred to before who under the circumstances is of the Respondent's prior complaint against Judge Cahoon which without question aroused hostility and passion against the Respondent on the part of Judge Cahoon, and this method of selecting a master was denial of Due Process to the Respondent under the Fifth and Fourteenth Amendments to the United States Constitution.
34. This particular pleading, namely, Mathias' "Findings" having been dropped upon the Respondent at the height of the holiday season, he reserves the right to supplement these Exceptions if, upon later thought, he desires to further engage in what is clearly a hopeless struggle with a more powerful entity who has neither eyes, ears, nor consideration which it apparently ever intends to offer to the true facts of this matter and to the true facts of its creature, the Maryland Attorney Grievance Commission.
WHEREFORE, the Respondent demands that these proceedings against him be dismissed.
___________________________________
LEONARD J. KERPELMAN
In Proper Person
2403 W. Rogers Avenue
Baltimore, Maryland 21209 367-8855
*253 ADDITIONAL EXCEPTIONS, MOTIONS, DEMAND FOR HEARING
35. It was error as a denial of Due Process to refuse to disqualify all Montgomery County judges.
36. It was a denial of Due Process to refuse to transfer the case out of Montgomery County.
37. It was a denial of Due Process for Mathias to refuse to disqualify himself.
38. This court's intention, custom, or the fact, that each and every individual member will not read the entire transcript is a denial of Due Process. An evidentiary hearing is demanded.
39. This court's illegal delegation to a single member, or less than the whole, of its solemn constitutional duty to judge and decide, as before, is a denial of Due Process. Motion is hereby made to dismiss the case on this basis. An evidentiary hearing is demanded.
40. A jury, on the same facts, with a preponderance of the evidence standard, judged the facts not conclusive against the Respondent; then as a matter of law, there can have been no sufficiency of evidence under a "clear and convincing" standard, against the Respondent. An evidentiary hearing is demanded.
41. Motion is made to disqualify Murphy, and any other of this court having prejudice or hostility against the Respondent, from any participation in this matter. An evidentiary hearing is demanded.
___________________________________
LEONARD J. KERPELMAN
In Proper Person
*254 I HEREBY CERTIFY that on this day of December, 1980, a copy of the aforegoing Additional Exceptions, etc., was mailed to Henry J. Meyerberg, Assistant Bar Counsel, District Court Bldg., Rowe Blvd. & Taylor Ave., Annapolis, Maryland 21401.
___________________________________
LEONARD J. KERPELMAN
NOTES
[1] Fathers United is an organization whose objectives include protecting paternal rights in domestic cases.
[2] AS TO FEE
To the Client of Leonard J. Kerpelman, Attorney
Sir:
You have retained Mr. Kerpelman to represent you in your case and you and he have agreed on a certain "retainer fee."
Your employment of Mr. Kerpelman by the payment of the retainer fee denotes a request, hereby acknowledged by you, to him, that he do all that is reasonably necessary and proper to successfully conclude your case in your favor.
The retainer fee will not be the entire fee in the case.
The principal reason for this is, that at this point, it is impossible for the attorney to know what the course of the case will be, how much work will be involved on his part, and with what success he will be able, because of his knowledge and skill, to carry the matter toward a conclusion.
Therefore, at the close of the case, a review will be made by Mr. Kerpelman, and the final fee in the matter will be assessed, according to the following criteria, which are among those set forth by the sources stated, concerning the fixing of a fair and reasonable attorney's fee:
1. As stated in Vol. 7, Corpus Juris Secundum (a legal encyclopedia), under the topic "Attorney and Client," in Sec. 191(a):
In determining what is a reasonable attorney's fee or allowance for legal services rendered, many and varied elements or factors are to be considered. Among the principal elements or factors to be considered are the amount and character of the services rendered, the nature and importance of the litigation in which the services were rendered, the degree of responsibility imposed on, or incurred by, the attorney, the amount of money affected by the controversy, the degree of professional ability, skill and experience called for and exercised in the performance of the services, and the professional character, qualifications, and standing of the attorney. (Also) the benefit or result secured for the client is likewise an important element to be considered in determining the value of the attorney's services.
The success or failure of an attorney's services is not the sole test of the value of his fees, but may be considered as a factor in determining such value.
2. The American Bar Association Code "Canons", factors to be considered in fixing a fee:
(1) The time and labor required.
(4) ... The amount involved and the results obtained.
(7) ... The experience, reputation, and ability of that lawyer performing the services.
Note that time spent is not the only factor, but may be only a minor factor. The results will be important. Success will be important. [Emphasis in original].
The above is my agreement as to the setting of the final fee in my case.
_______________________________
(Client)
Dated: _______________________________
PLEASE SIGN AND RETURN
[3] Kerpelman made no showing of exactly where the $23,000 figure came from. Regarding the matter, Kerpelman testified, in part, that the reasonable fee I totalled up was $125,000 but I figure I'm not in that league. I'll just charge the man $25,000 and he already paid me two so I sued him for $23,000.00
[4] For the convenience of the reader we have set forth Mr. Kerpelman's exceptions verbatim in the appendix to this opinion.
[5] Note the language of respondent's letter of June 4, 1978: "I thought you would be so overjoyed at having overachieved ... that you would fall all over yourself paying any bill immediately."
[6] Kerpelman was suspended as a result of our decision in Attorney Grievance Commission v. Kerpelman, 288 Md. 341, 377-78, 420 A.2d 940 (1980) for two years effective October 6, 1980. The suspension in this case is consecutive thereto.
[*] We have reproduced the document exactly as presented by Mr. Kerpelman and have not attempted to make corrections, grammatical or otherwise.
|
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United States Courts
Southern District of Texas
FILED
United States Court of Appeals September 15, 2021
Nathan Ochsner, Clerk of Court
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
September 15, 2021
No. 21-40618
Lyle W. Cayce
Clerk
State of Texas; State of Louisiana,
Plaintiffs—Appellees,
versus
United States of America; Alejandro Mayorkas,
Secretary, U.S. Department of Homeland Security;
United States Department of Homeland Security; Troy
Miller, Acting Commissioner, U.S. Customs and Border
Protection, In his official capacity; United States
Customs and Border Protection; Tae D. Johnson,
Acting Director, U.S. Immigration and Customs
Enforcement, In his official capacity; United States
Immigration and Customs Enforcement; Tracy Renaud,
Senior Official Performing the Duties of the Director
of the U.S. Citizenship and Immigration Services, in
her official capacity; United States Citizenship and
Immigration Services,
Defendants—Appellants.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 6:21-CV-16
Before Southwick, Graves, and Costa, Circuit Judges.
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Gregg Costa, Circuit Judge:
A district court issued a nationwide preliminary injunction preventing
the United States from relying on immigration enforcement priorities
outlined in memos from the Department of Homeland Security and
Immigration and Customs Enforcement. The United States seeks a stay of
that injunction pending appeal. For the reasons discussed below, we grant a
partial stay.
I.
On Inauguration Day for the new President, the Acting Secretary of
DHS issued a memo titled “Review of and Interim Revision to Civil
Immigration Enforcement and Removal Policies and Priorities.”
Memorandum from David Pekoske (Jan. 20, 2021) (DHS Memo). It
announced that the Department would undergo a comprehensive review of
enforcement policies, announced the DHS’s interim enforcement priorities,
and directed an immediate 100-day pause on removals. 1
This case is about the memo’s interim enforcement priorities. Noting
DHS’s limited resources and inability to “respond to all immigration
violations or even remove all persons unlawfully in the United States,” the
memo announces the following civil enforcement priorities:
1. National security. Individuals who have engaged in or are sus-
pected of terrorism or espionage, or whose apprehension, arrest
and/or custody is otherwise necessary to protect the national secu-
rity of the United States.
2. Border security. Individuals apprehended at the border or ports of
entry while attempting to unlawfully enter the United States on or
1
Texas initially brought a separate suit challenging the 100-day pause. The district
court issued a temporary restraining order and eventually a preliminary injunction against
enforcement of that pause. See Texas v. United States, -- F. Supp. 3d --, 2021 WL 2096669
(S.D. Tex. May 24, 2021). The United States did not appeal that ruling.
2
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after November 1, 2020, or who were not physically present in the
United States before November 1, 2020.
3. Public safety. Individuals incarcerated within federal, state, and lo-
cal prisons and jails released on or after the issuance of this memo-
randum who have been convicted of an “aggravated felony,” as that
term is defined in section 101(a)(43) of the Immigration and Nation-
ality Act at the time of conviction, and are determined to pose a
threat to public safety.
DHS Memo at 2.
The memo notes that these priorities will influence “not only the
decision to issue, serve, file, or cancel a Notice to Appear, but also to a broad
range of other discretionary enforcement decisions, including deciding:
whom to stop, question, and arrest; whom to detain and release; whether to
settle, dismiss, appeal, or join in a motion on a case; and whether to grant
deferred action or parole.” Id. The memo also announces that it does not
“prohibit[] the apprehension or detention of individuals unlawfully in the
United States who are not identified as priorities herein.” Id. at 3.
ICE issued a memo on February 18, 2021 that incorporates the same
three interim priorities. Memorandum from Tae Johnson, Acting Director
of ICE, on Civil Immigration Enforcement and Removal Priorities (Feb. 18,
2021) (ICE Memo). Like the DHS memo, the ICE version notes that “the
interim priorities do not require or prohibit the arrest, detention, or removal
of any noncitizen.” ICE Memo at 3. But the ICE memo requires, with
limited exceptions, that agents seek approval before pursuing an action
against a person who is not included in the prioritized categories. Id. at 6.
Immigration authorities have followed these priorities since the
memos issued at the beginning of the year. The government contends the
memos’ effect can be seen in arrest statistics for the February-July period.
Overall administrative arrests are down from 39,107 in 2020 to 25,916 this
3
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year. But arrests of those with aggravated felonies—priority #3 (public
safety)—are up by roughly 2,000 from the prior year; they now account for
one in five arrests.
Texas and Louisiana filed this lawsuit seeking to enjoin portions of the
DHS and ICE Memos, most significantly its enforcement priorities. In a
comprehensive opinion issued last month, the district court rejected a
number of justiciability challenges and then concluded that the memos
violated the Administrate Procedure Act in the following ways: they are
contrary to law—specifically two statutes requiring detention of certain
individuals; arbitrary and capricious; and issued without notice and
comment. See 5 U.S.C. §§ 706(2)(A), (D), 553. It thus enjoined the
government “from enforcing and implementing” the civil enforcement
guidelines described in the DHS and ICE memos. It also ordered the
defendant agencies to file reports with the court documenting compliance.
Although the district court expressed reluctance about issuing an injunction
that went beyond the parties before it, it believed Fifth Circuit precedent
required it do so in a case involving federal immigration policy. See Texas v.
United States, 809 F.3d 134, 188 (5th Cir. 2015) (stating that “in appropriate
circumstances” a court may “issue a nationwide injunction”), aff’d by
equally divided vote, United States v. Texas, 577 U.S. 1101 (2016) As a result,
even though district courts have rejected challenges to the same enforcement
priorities brought by Florida and Arizona, 2 the district court’s preliminary
injunction applies to federal immigration authorities in those states and all
others.
2
Arizona v. U.S. Dep’t of Homeland Sec., No. CV-21-00186, 2021 WL 2787930 (D.
Ariz. June 30, 2021); Florida v. United States, -- F. Supp. 3d. --, 2021 WL 1985058 (M.D.
Fla. May 18, 2021).
4
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The district court delayed the effective date of its injunction until
August 30 to allow the United States to seek a stay from this court. We
granted a temporary administrative stay and heard oral argument. The
United States tells us that the “interim” guidance this case considers will be
superseded by new guidance expected by the end of this month. Despite the
possibility of an imminent expiration date on the memos challenged in this
case, we perform our duty to consider the motion before us.
II.
In deciding whether to grant a stay, we consider “(1) whether the stay
applicant has made a strong showing that he is likely to succeed on the merits;
(2) whether the applicant will be irreparably injured absent a stay; (3)whether
issuance of the stay will substantially injure the other parties interested in the
proceeding; and (4) where the public interest lies.” Nken v. Holder, 556 U.S.
418, 434 (2009) (quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)). We
conclude that the United States has shown a likelihood of success at least to
the extent the injunction prevents immigration officials from relying on the
memos’ enforcement priorities before an immigration proceeding is
commenced.
“A principal feature of the removal system is the broad discretion
exercised by immigration officials. Federal officials, as an initial matter, must
decide whether it makes sense to pursue kimberlyosborne@example.org.” Arizona v. United
States, 567 U.S. 387, 396 (2012). The challenged memos prioritize removal
of those who are a threat to national security, those who entered the country
this year, and those convicted of an aggravated felony. The central merits
issue is whether Congress has interfered with immigration officials’
traditional discretion to decide when to remove someone. If not, then the
interim priorities are the type of enforcement decisions that are “committed
to agency discretion by law” and not reviewable (for substance or procedure)
5
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under the APA. See 5 U.S.C. § 701(a)(2); Heckler v. Chaney, 470 U.S. 821,
828–35 (1985); see also Lincoln v. Vigil, 508 U.S. 182, 191 (1993) (“[A]n
agency’s decision not to institute enforcement proceedings [is]
presumptively unreviewable under § 701(a)(2).”).
The reasons that charging decisions are presumptively unreviewable
echo the rationales the memo cites for focusing on three priorities: in
deciding when to enforce a law, “[a]n agency must not only assess whether a
violation has occurred, but whether agency resources are best spent on this
violation or another . . . whether the particular enforcement action requested
best fits the agency’s overall policies, and, indeed, whether the agency has
enough resources to undertake the kimberlyosborne@example.org.” Heckler, 470 U.S. at 831.
These concerns that underlie the unreviewability of enforcement decisions
are “greatly magnified in the deportation context.” Reno v. Am.-Arab Anti-
Discrimination Comm., 525 U.S. 471, 490 (1999).
While recognizing this general discretion law enforcement enjoys, the
district court concluded that two immigration statutes limit it. They are both
part of the Illegal Immigration Reform and Immigrant Responsibility Act of
1996 (IIRIRA). One provision governs the custodial status of aliens facing
removal proceedings. The general rule is that the Attorney General “may”
detain the individual pending the removal proceeding or “may” release that
person on bond. 8 U.S.C. § 1226(a). But the Attorney General “shall take
into custody any alien” who is deportable or inadmissible for specific reasons.
Id. § 1226(c)(1) (emphasis added). This category includes the aggravated
felons who are a focus of the interim enforcement priorities, as well
individuals not on the priority list such as those with certain drug convictions
or convictions for crimes of moral turpitude. Id. The statute further explains
that such an arrest shall occur “when the alien is released, without regard to
whether the alien is released on parole, supervised release, or probation, and
without regard to whether the alien may be arrested or imprisoned again for
6
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the same offense.” Id. 3 As the district court explained, section 1226(c)
arrests usually come into play when ICE places a detainer on an alien who is
serving a sentence; the detainer results in a transfer to ICE custody once the
sentence is served. Once the person is in ICE custody, a notice to appear
commencing removal issues.
The other law that, in the district court’s view, eliminates discretion
applies after a removal order has issued. During the removal period that
follows, which is supposed last no more than 90 days, see 8 U.S.C.
§ 1231(a)(1)(A), “the Attorney General shall detain the alien,” id.
§ 1231(a)(2). This law applies across the board; it is not limited to certain
categories of aliens as section 1226(c) is. If removal does not happen within
90 days, then other rules allowing for release under certain conditions
govern. See id. § 1231(a)(3).
Our main concern with the injunction is that we believe these IIRIRA
provisions do not eliminate immigration officials’ “broad discretion” to
decide who should face enforcement action in the first place. Arizona, 567
U.S. at 396. They address a separate question: the custodial status of
individuals who are facing removal proceedings or who have been removed.
See 8 U.S.C. § 1226(a),(c); § 1231(a)(2). To the extent the injunction
prevents the Attorney General from relying on the memos to release those
who are facing enforcement actions and fall within the mandatory detention
provisions—for example, prisoners with qualifying convictions against
whom ICE has lodged a detainer (8 U.S.C. § 1226(c)(1)) or individuals
3
The statute provides that the Attorney General “may release” such a person in
limited circumstances, see id. § 1126(c)(2), which the district court believed buttressed its
view of the otherwise mandatory nature of section 1126(c)(1).
7
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subject to removal orders (id. § 1231(a)(2))—we see no basis for upsetting it
at this stage as that is what the statutes govern.
The district court’s injunction, however, is not limited to detention
decisions of aliens the United States has decided to remove. It is much
broader. It enjoins reliance on memos that guide decisions on, among other
things, “whether to issue a detainer,” “whether to issue, reissue, serve, file,
or cancel a Notice to Appear,” and “whether to stop, question, or arrest a
noncitizen.” ICE Memo at 3. We see the United States likely succeeding on
this core foci of the interim enforcement priorities—immigration officials’
ability to prioritize who is subject to investigative and enforcement action in
the first place. See Reno, 525 U.S. at 483 (recognizing that law enforcement
discretion extends to “initiation or prosecution of various stages in the
deportation process,” including the “discretion to abandon the endeavor”).
The likelihood of success factor requires a prediction. The first
building block of our prediction is the strong background principle that the
“who to charge” decision is committed to law enforcement discretion,
including in the immigration arena. Id. at 483; Arizona, 567 U.S. at 396. It is
quite telling that neither the States nor the district court have cited a single
Supreme Court case requiring law enforcement (state nor federal, criminal
nor immigration) to bring charges against an individual or group of
individuals. 4
4
Of course, as the district emphasized, its injunction does not compel ICE to arrest
or remove any particular person. But the linchpin of its analysis—the reason it concluded
that the memos were subject to APA review and then contrary to law—was its holding that
the IIRIRA mandatory detention laws overcome the ordinary presumption that law
enforcement discretion is unreviewable. So the overriding legal question is whether
matters discussed in the memos, such as who to arrest and charge, are committed to law
8
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What is more, in the quarter century that IIRIRA has been on the
books, no court at any level previously has held that sections 1226(c)(1) or
1231(a)(2) eliminate immigration officials’ discretion to decide who to arrest
or remove. The Supreme Court has recognized that detention under section
1226(c)(1) is mandatory “pending the outcome of removal proceedings.”
Jennings v. Rodriguez, 138 S. Ct. 830, 838 (2018). 5 But its cases considering
the statute are ones in which detainees subject to enforcement action were
seeking their release. See id. at 846; Nielsen v. Preap, 139 S. Ct. 954, 960
(2019); Demore v. Kim, 538 U.S. 510, 513 (2003). The same is true of the
recent case involving section 1231 in which already-removed detainees
sought release. Guzman Chavez, 141 S. Ct. 2271, 2281 (2021). Those cases
do not consider whether the statutes eliminate the government’s traditional
prerogative to decide who to charge in enforcement proceedings (and thus
who ends up being detained).
enforcement discretion. To answer that question, it is instructive that the Supreme Court
has never allowed judicial oversight of such decisions.
Relatedly, Texas’s counsel suggested at oral argument that the injunction is limited
to the question of who to detain and does not prevent reliance on the memos’ priorities in
determining who to remove. But if that is the case then the injunction is overbroad because
it is a blanket prohibition on officials’ reliance on the interim priorities.
5
Jennings explains that section 1226(a) sets forth the “default rule” that “governs
the process of arresting and detaining that group of aliens pending their removal.” 138 S.
Ct. at 837. Section 1226(c) then “carves out a statutory category of aliens who may not be
released under 1226(a).” Id. Because section 1226(c) is an exception to section 1226(a),
both address the detention of “aliens already in the country pending the outcome of
removal proceedings.” Id. at 838; see also 8 U.S.C. § 1226(a) (“On a warrant issued by the
Attorney General, an alien may be arrested and detained pending a decision on whether the
aliens is to be removed from the United States. Except as provided in subsection(c) . . . .”).
Texas’s suggestion at oral argument that 1226(c)(1) requires detention even for
aliens who will never face removal proceedings thus is at odds with the text and Jennings’s
reading of it. There would, of course, be other concerns with indefinite detention for
someone not facing removal.
9
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And while the district court’s interpretation of these statutes is novel,
executive branch memos listing immigration enforcement priorities are not.
See Peter Markowitz, Prosecutorial Discretion Power at its Zenith: The Power to
Protect Liberty, 97 B.U. L. REV. 489, 508 & n.96 (2017) (listing seven DHS,
ICE, or INS memos issued from 1997 through 2014 that “set forth basic
guidelines . . . to follow in making prosecutorial discretion determinations”).
Yet no court has previously held that the detention statutes prevent such
guidance. Indeed, in holding unlawful the Deferred Action for Parents of
Americans and Lawful Permanent Residents, we recognized that the same
policy also set “priority levels” for enforcement. Texas, 809 kimberlyosborne@example.org. Yet
Texas did not even argue that the United States had to “alter [its]
enforcement priorities.” Id. Because the state challenged only the deferred
action policy that “affirmatively confer[red]” status and benefits on a class,
that case involved “much more than nonenforcement” decisions. Id.
Against this absence of any authority limiting the executive’s
discretion in deciding whether to bring a removal proceeding is longstanding
precedent holding that the use of “shall” in arrest laws does not limit
prosecutorial discretion. See Cairo & F.R. Co. v. Hecht, 95 U.S. 168, 170
(1877). The most recent Supreme Court case involved a Colorado law
providing that a “peace officer shall arrest, or, if an arrest would be
impractical under the circumstances, seek a warrant for the arrest” of a
person violating a protective order. Town of Castle Rock v. Gonzales, 545 U.S.
748, 759 (2005) (citing Colo. Rev. Stat § 18-6-803.5(3)). Despite the
mandatory “shall”—the same word in the immigration detention statutes
that the district court concluded meant enforcement decisions were no
longer committed to agency discretion by law—the Court held that the law
did not eliminate police discretion in deciding whether to arrest a violator.
Id. at 760. The reason, Justice Scalia explained, is the “deep-rooted nature
of law-enforcement discretion, even in the presence of seemingly mandatory
10
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legislative commands.” Id. at 761. As another opinion had put it, it is
“simply ‘common sense that all police officers must use some discretion in
deciding when and where to enforce’” the law. Id. (quoting City of Chicago
v. Morales, 527 U.S. 41, 62 n.32 (1999)).
The district court concluded that “common sense” observation does
not apply here, but none of its attempted distinctions are convincing. First,
the district court noted that the IIRIRA detention laws “protect third-party
interests.” True, but that is also true of Colorado’s protective order law,
which protects domestic violence victims like the children the Castle Rock
defendant murdered. See 545 U.S. at 754; id. at 779 (Stevens, J., dissenting)
(noting the law protected “beneficiaries of domestic restraining orders”).
To the extent legislative purpose is relevant, that the IIRIRA’s inclusion of
mandatory language in the detention provisions was meant to address a
concern about lenient release policies makes the laws no different from the
Colorado protective order statute: it too was enacted against concerns about
underenforcement. Id. at 779–81. The district court noted that Castle Rock
involved a strong tradition of “police discretion,” but the same tradition
exists—in “greatly magnified form”—for immigration enforcement. Reno,
525 U.S. at 489–90; see also Arizona, 567 U.S. at 396. And the fact that the
mandatory “shall” contrasts with other uses of the permissive “may” in the
immigration detention laws is also true for the Colorado protective order
statute. See Colo. Rev. Stat. § 18-6-803.5(3)(d), (6)(a)-(b), (7), (9).
That brings us to the two older Supreme Court cases that the district
court thought supported its view that “shall” in the IIRIRA provisions
overrode the tradition of enforcement discretion. One is a Prohibition Era
case in which the government was seeking forfeiture of vehicles used for
bootlegging. Richbourg Motor Co. v. United States, 281 U.S. 528 (1930). The
question was which of two forfeiture laws governed the proceedings that the
government had elected to pursue. The Court answered that a “shall” in
11
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one of the statutes (the one giving lienholders to the vehicle a right to
forfeiture proceeds) controlled, rejecting the idea that the government could
decide which forfeiture law applied. Id. at 533. But that ruling is akin to the
routine judicial task of deciding which penalty provision applies to an action.
Nothing in Richbourg Motor says that the “shall” forfeiture law limited the
discretion of prohibition agents to decide which bootleggers to arrest and
which of their cars to put in forfeiture proceedings. The second case is even
further afield. It held that a law requiring that a defendant accused of
violating probation “shall forthwith be taken before the court” for a
revocation proceeding meant what it said—the defendant had to be given the
opportunity to appear in court and refute the charge. Escoe v. Zerbst, 295 U.S.
490, 492 (1935) (citing 15 U.S.C. § 725). Interpreting “shall” to be
mandatory outside the context of purported limits on enforcement discretion
is standard fare. Richbourg Motor and Escoe thus say nothing about when
“seemingly mandatory legislative commands” can uproot the “deep-rooted
nature of law-enforcement discretion.” Castle Rock, 545 U.S. at 761. It
makes sense that Castle Rock did not bother to cite them.
For these reasons, we do not see a strong justification for concluding
that the IIRIRA detention statutes override the deep-rooted tradition of
enforcement discretion when it comes to decisions that occur before
detention, such as who should be subject to arrest, detainers, and removal
proceedings. That means the United States has shown a likelihood of
prevailing on appeal to the extent the preliminary injunction prevents
officials from relying on the memos’ enforcement priorities for nondetention
decisions.
III.
The remaining factors also support a partial stay. Judicial interference
with a government agency’s policies often constitutes irreparable injury. See
12
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Valentine v. Collier, 956 F.3d 797, 803 (5th Cir. 2020). And prosecutorial
discretion is a core power of the Executive Branch, so its impairment
undermines the separation of powers. United States v. Nixon, 418 U.S. 683,
693 (1974); Heckler, 470 U.S. at 832; United States v. Ream, 491 F.2d 1243,
1246 n.2 (5th Cir. 1974) (explaining that the enforcement “discretion flows
not from a desire to give carte blanche to law enforcement officials but from
recognition of the constitutional principle of separation of powers”). As
soon-to-be Chief Justice John Marshall remarked when serving in Congress:
prosecutorial discretion is “‘an indubitable and a Constitutional power’
which permitted [the President] alone to determine the ‘will of the nation’ in
making decisions about when to pursue and when to forego prosecutions.”
Markowitz, supra, at 497 (quoting 10 ANNALS OF CONG. 615 (1800)).
The injury to the executive’s daily exercise of this historic discretion
is irreparable in the basic sense of the word; there is no way to recover the
time when its exercise of discretion is being enjoined during the pendency of
the appeal. Contrast Texas, 787 F.3d at 768 (finding no irreparable injury
during appeal because the United States could continue to “choose whom to
remove first” during appeal as injunction did not eliminate enforcement
discretion but instead addressed whether individuals could be granted status
and benefits, the temporary denial of which was reparable after appeal).
Indeed, in recent years the Supreme Court has repeatedly stayed nationwide
injunctions that prevented the Executive Branch from pursuing its
immigration policies. See, e.g., Wolf v. Innovation Law Lab, 140 S. Ct. 1564
(2020) (mem.); Dep’t of Homeland Sec. v. New York, 140 S. Ct. 599 (2020)
(mem.); Barr v. East Bay Sanctuary Covenant, 140 S. Ct. 3 (2019) (mem.);
13
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Trump v. Sierra Club, 140 S. Ct. 1 (2019) (mem.); Trump v. Int’l Refugee
Assistance Project, 137 S. Ct. 2080 (2017). 6
The balance of equities also favors a stay. For close to nine months,
DHS has been following the enforcement priorities listed in its January 2021
memo. “[T]he maintenance of the status quo is an important consideration
in granting a stay.” Barber v. Bryant, 833 F.3d 510, 511 (5th Cir. 2016)
(quoting Dayton Bd. of Educ. v. Brinkman, 439 U.S. 1358, 1359 (1978)). Even
more so here when the release of new guidance is imminent. Allowing the
injunction to take effect could subject immigration agents to three separate
directives in the span of a few weeks. Moreover, eliminating DHS’s ability
to prioritize removals poses a number of practical problems given its limited
resources. One of those problems, which highlights the potential for
nationwide injunctions to conflict, is that ICE is subject to another
nationwide injunction that limits the number of beds it can use in detention
centers. Fraihat v. U.S. Immigration & Customs Enf’t, 445 F. Supp. 3d 709
(C.D. Cal. 2020).
The United States has shown that the injunction will cause irreparable
injury and that the equities favor a stay.
6
The injury to the United States is not “self-inflicted” in the sense we recently
found potential injuries to be in State v. Biden, -- F.4th --, 2021 WL 3674780, at *14 (Aug.
19, 2021). There Texas had filed suit two months before DHS had officially terminated the
Migration Protection Protocols (MPP) program, so “DHS could have avoided this problem
by waiting to unwind MPP until the litigation was resolved.” Id. But this lawsuit was not
filed until April, more than two months after DHS announced its new enforcement
priorities. And there can be no argument here that the new Administration started
implementing the new enforcement priorities and only later memorialized them in a memo.
Id. (noting that DHS suggested it started “unwinding MPP four or more months before the
June 1 Memorandum”). The DHS memo challenged here issued on day one of the new
Administration.
14
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***
We therefore GRANT IN PART and DENY IN PART the motion to
stay the preliminary injunction. The injunction will go into effect to the
extent it prevents DHS and ICE officials from relying on the memos to refuse
to detain aliens described in 1226(c)(1) against whom detainers have been
lodged or aliens who fall under section 1231(a)(1)(A) because they have been
ordered removed. The injunction is STAYED pending appeal in all other
respects including the reporting requirements.
15
|
ACCEPTED
01-15-00558-CR
FIRST COURT OF APPEALS
HOUSTON, TEXAS
10/12/2015 4:44:45 PM
CHRISTOPHER PRINE
CLERK
No. 01-15-00558-CR
In the Court of Appeals for the
First District of Texas, at Houston
FILED IN
1st COURT OF APPEALS
HOUSTON, TEXAS
Cause No. 1411673 10/12/2015 4:44:45 PM
CHRISTOPHER A. PRINE
In the District Court for the Clerk
th
176 District Court, Harris County, Texas
RICHARD M. THOMAS
Appellant
v.
THE STATE OF TEXAS
Appellee
STATE’S WAIVER OF OPPORTUNITY TO
RESPOND TO APPELLANT’S ANDERS BRIEF
TO THE HONORABLE JUSTICES OF THE COURT OF APPEALS:
Comes now the State of Texas, by the undersigned assistant district attorney, and
respectfully waives the opportunity to file a brief in response to the Anders brief filed by the
appellant’s counsel. The State would respectfully show the Court the following:
I.
In keeping with the requirements of Anders v. California, 386 U.S. 738, 87 S. Ct.
1396 (1967), appointed counsel for the appellant has filed a brief containing the conclusion
that this appeal is frivolous. The appellant has been notified of his right to review the
appellate record and to file a pro se brief.
II.
A review of the appellant’s brief reveals no question of constitutional dimension or
other issue requiring review in the interest of justice.
October 7, 2015
III.
A copy of this instrument will be served on counsel for the appellant through
eFile.txcourts.gov, on the date of the filing of this instrument with the clerk of this court.
THEREFORE, the State of Texas waives the opportunity to file a response to the
Anders brief filed by the appellant’s attorney, and moves the Court to affirm the trial court’s
judgment.
DEVON ANDERSON
District Attorney
Harris County, Texas
/s/ Alan Curry
ALAN CURRY
Assistant District Attorney
Harris County, Texas
1201 Franklin, Suite 600
Houston, Texas 77002
575.273.1038
TBC No. 05263700
gonzalezbrooke@example.net
October 7, 2015
|
Name: 2005/611/EC: Commission Decision of 8 August 2005 amending Decision 96/550/EC authorising methods for grading pig carcases in Finland (notified under document number C(2005) 2995)
Type: Decision_ENTSCHEID
Subject Matter: animal product; Europe; agri-foodstuffs; means of agricultural production; technology and technical regulations
Date Published: 2005-08-12
12.8.2005 EN Official Journal of the European Union L 210/44 COMMISSION DECISION of 8 August 2005 amending Decision 96/550/EC authorising methods for grading pig carcases in Finland (notified under document number C(2005) 2995) (Only the Finnish and Swedish texts are authentic) (2005/611/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EEC) No 3220/84 of 13 November 1984 determining the Community scale for grading pig carcases (1), and in particular Article 5(2) thereof, Whereas: (1) By Commission Decision 96/550/EC (2), the use of two methods for grading pig carcases in Finland was authorised. (2) The Government of Finland has requested the Commission to authorise the application of new formulae for the calculation of the lean meat content of carcases in the framework of the existing grading methods and has submitted the details required in Article 3 of Commission Regulation (EEC) No 2967/85 of 24 October 1985 laying down detailed rules for the application of the Community scale for grading pig carcases (3). (3) The examination of this request has revealed that the conditions for authorising the new formulae are fulfilled. (4) Decision 96/550/EC should therefore be amended accordingly. (5) The measures provided for in this Decision are in accordance with the opinion of the Management Committee for Pigmeat, HAS ADOPTED THIS DECISION: Article 1 The Annex to Decision 96/550/EC is hereby amended as follows: 1. Point 3 of Part 1 is replaced by the following: 3. The lean content of the carcase shall be calculated according to the following formula: = 56,713 0,271 ¢ X1 0,620 ¢ X2 + 0,258 ¢ X3 Where: = the estimated lean meat of the carcase; X1 = the thickness of back-fat (including rind) in mm measured at 8 cm off the midline of the carcase behind the last rib; X2 = the thickness of back-fat (including rind) in mm measured at 6 cm off the midline of the carcase between the third and fourth last rib; X3 = the thickness of muscle in mm measured at the same time and the same place as X2. The formula shall be valid for carcases weighing between 51 and 120 kilograms. 2. Point 3 of Part 2 is replaced by the following: 3. The lean meat content of the carcase shall be calculated according to the following formula: = 69,931 0,843 ¢ X1 Where: = the estimated lean meat of the carcase; X1 = the thickness of back-fat (including rind) in mm measured at 6 cm off the midline of the carcase between the third and fourth last rib. The formula shall be valid for carcases weighing between 51 and 120 kilograms. Article 2 This Decision is addressed to the Republic of Finland. Done at Brussels, 8 August 2005. For the Commission Mariann FISCHER BOEL Member of the Commission (1) OJ L 301, 20.11.1984, p. 1. Regulation as last amended by Regulation (EC) No 3513/93 (OJ L 320, 22.12.1993, p. 5). (2) OJ L 236, 18.9.1996, p. 47. (3) OJ L 285, 25.10.1985, p. 39. Regulation as amended by Regulation (EC) No 3127/94 (OJ L 330, 21.12.1994, p. 43). |
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https://www.costco.com/apple-airpods-wireless-headphones-with-charging-case-(2nd-generation).product.100487204.html Page 1 of 9
Case 3:20-cv-00718-LAB-BLM Document 1-2 Filed 04/15/20 PageID.35 Page 14 of 15
Apple AirPods Wireless Headphones with Charging Case (2nd Generation)
your devices. Put them in your ears and they connect immediately, immersing you in rich,
high-quality sound. Just like magic.
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them is just as easy. They sense when they’re in your ears and pause when you take them
out. And the AirPods experience is just as amazing whether you’re using them with your
iPhone, Apple Watch, iPad, or Mac.
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stable wireless connection to your devices — up to 2x faster when switching between
active devices, and a 1.5x faster connection time for phone calls. The H1 chip also drives
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you’re playing games, listening to music, or enjoying podcasts, you’ll experience higher-
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https://www.costco.com/apple-airpods-wireless-headphones-with-charging-case-(2nd-generation).product.100487204.html Page 2 of 9
Case 3:20-cv-00718-LAB-BLM Document 1-2 Filed 04/15/20 PageID.36 Page 15 of 15
Apple AirPods Wireless Headphones with Charging Case (2nd Generation)
Compatible with Apple iOS
Connection Type Wireless
Features Built-In Microphone
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Model MV7N2AM/A
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Type of Headphones In-the-Ear
Weight 0.14 oz.
|
Citation Nr: 1204962
Decision Date: 02/09/12 Archive Date: 02/23/12
DOCKET NO. 08-11 446 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in New York, New York
THE ISSUES
1. Entitlement to service connection for posttraumatic stress disorder (PTSD).
2. Entitlement to service connection for bilateral hearing loss disability.
REPRESENTATION
Veteran represented by: The American Legion
ATTORNEY FOR THE BOARD
Helena M. Walker, Counsel
INTRODUCTION
The Veteran served on active duty from July 1969 to July 1971.
This case comes before the Board of Veterans' Appeals (Board) on appeal of a November 2006 rating decision by the Department of Veterans Affairs (VA) Regional Office (RO) in New York, New York.
REMAND
The Veteran was scheduled for a Travel Board hearing at the New York RO in November 2009. A week prior to the hearing, the Veteran submitted correspondence to the RO indicating that he was unable to attend the scheduled hearing and wished that it be rescheduled. In January 2012, the Veteran's representative indicated the Veteran's continued request for a Travel Board hearing before a member of the Board. Inasmuch as Travel Board hearings are scheduled by the RO, this case must be returned to the New York RO to arrange for such a hearing. 38 U.S.C.A. § 7107 (West 2002); 38 C.F.R. §§ 19.75, 19.76, 20.703, 20.704 (2011).
Accordingly, this case is REMANDED to the RO via the Appeals Management Center in Washington, D.C., for the following action:
The Veteran should be scheduled for a Travel Board hearing in accordance with the docket number of his appeal.
By this remand, the Board intimates no opinion as to any final outcome warranted.
(CONTINUED ON NEXT PAGE)
No action is required of the Veteran until he is otherwise notified but he has the right to submit additional evidence and argument on the matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999).
_________________________________________________
Shane A. Durkin
Veterans Law Judge, Board of Veterans' Appeals
Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2011).
|
The Honorable Steven B. Jones State Representative P.O. Box 3040 West Memphis, Arkansas 72303-3040
Dear Representative Jones:
I am writing in response to your request for an opinion on the following factual scenario:
The question that we need answered regards fire fighters who want to have an Alderman in my district removed from the fire commission. They have circulated a petition in attempts to get this done, the Alderman has come to me with the information that certain fire-fighters are willing to testify that the "solicitation of signatures was carried out while they were on duty." He wants to know what his recourse is when the City Attorney has given his opinion that A.C.A. § 7-1-103 does not apply in this situation and that the fire-fighters were executing their first amendment right.
RESPONSE
In my opinion, to the extent the alderman seeks the institution of criminal charges against the petition circulators, his only recourse is to press the matter with the city attorney or the prosecuting attorney for the judicial district. These are the only officials invested by state law with the power to institute such charges.1
I assume your question has reference to A.C.A. § 7-1-103(a)(2)(B), as amended by Act 1839 of 2001, which now provides as follows:
It shall be unlawful for any public servant, as defined in A.C.A. § 21-8-402, to circulate an initiative or referendum petition or solicit signatures on an initiative or referendum petition in any public office of the state, county, or municipal governments of Arkansas or during the usual office hours or while on duty for any state agency or any county or municipal government in Arkansas.
You state that the city attorney believes that A.C.A. § 7-1-103 does not apply in this situation. I assume this conclusion is based upon the fact that the particular petition did not seek the initiation of a city ordinance or the referral of an ordinance to the voters of the city under Amendment 7 to the Arkansas Constitution so as to constitute an "initiative or referendum petition." You have not asked my advisory opinion as to whether this is a correct conclusion of law. I would have no power, in any event, to compel action on the part of the city attorney in this regard. "The choice of which charges to file against an accused is a matter entirely within the prosecutor's discretion . . ." State v.Murphy, 315 Ark. 68, 72 (1993), 864 S.W.2d 842, citing Simpson v. State,310 Ark. 493, 837 S.W.2d 475 (1992); and State v. Brooks, 301 Ark. 257,783 S.W.2d 368 (1990). The Arkansas Constitution provides that the duty of charging an accused with a felony2 is reserved to the grand jury or to the prosecutor. Arkansas Constitution, Amendment 21, § 1. See Statev. Knight, 318 Ark. 158, 162, 884 S.W.2d 258 (1994).
If the alderman in question is interested in the institution of criminal charges, the avenues above are exhaustive. If he seeks some other unspecified type of relief, I must note that I am prohibited by statute from the private practice of law and cannot offer advice in this regard.3 I assume, finally, that it is not your intention to obtain my opinion on the legality of the alderman's service as a member of the city fire commission.
Senior Assistant Attorney General Elana C. Wills prepared the foregoing opinion, which I hereby approve.
Sincerely,
MARK PRYOR Attorney General
MP:ECW/cyh
1 The only exception is an indictment by a grand jury.
2 In city misdemeanor cases, however, the city attorney performs this duty. See A.C.A. §§ 16-21-115; 16-21-150 and Op. Att'y Gen. 2000-291.
3 I will note, however, that A.C.A. § 14-51-303 requires the civil service commissions of cities of the first and second class to promulgate rules and regulations governing the political activities of fire department personnel. |
Filed 6/17/15 In re M.G. CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or
ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
In re M.G., a Person Coming Under the 2d Juv. No. B259988
Juvenile Court Law. (Super. Ct. No. 1436375)
(Santa Barbara County)
SANTA BARBARA COUNTY CHILD
WELFARE SERVICES,
Plaintiff and Respondent,
v.
T.R. et al.,
Defendants and Appellants.
T.R. (Mother) and M.G. (Father) appeal orders of the juvenile court
terminating their parental rights to their child M.G. (hereafter "the child" or "M.G.").
(Welf. & Inst. Code, § 366.26.)1 We conclude, among other things, that: 1) the Santa
Barbara County Child Welfare Services (CWS) gave sufficient notice to three Indian tribes
regarding the child's family ancestry under the Indian Child Welfare Act (ICWA) (25
U.S.C. § 1901 et seq.), and 2) the juvenile court did not err by ruling that ICWA did not
apply. We affirm.
1
All statutory references are to the Welfare and Institutions Code.
FACTS
In 2013, Mother and the child "tested positive for opiates at the time of the
child's birth." Mother admitted using methamphetamine, marijuana, "and Norco which
was not prescribed to her during her pregnancy."
CWS filed a juvenile dependency petition (§ 300) alleging Mother's
"continued drug use during her pregnancy" and "refusal to seek drug treatment" place the
child at "substantial risk of physical harm." CWS alleged that Father's "engagement in
criminal activity, including aggressive behaviors and substance abuse," places the child at
a substantial risk of abuse and neglect. CWS removed the child from the home. The
juvenile court declared M.G. to be "a person described by Welfare & Institutions Code
§ 300." CWS recommended that Mother receive family reunification services and
participate in a case plan including drug treatment.
The juvenile court terminated Father's family reunification services at the
six-month prepermanency hearing. After 12 months of services, the court terminated
Mother's family reunification services. On September 29, 2014, the court terminated
Mother's and Father's parental rights to the child.
ICWA
At the February 21, 2013, detention hearing, the juvenile court said, "I have
to find out from you if you have any Native American Indian heritage and, if so, what
tribe." Mother responded: "No, I'm not sure." Father's counsel responded that, "as far as
[Father] knows, [Father] has no Native American Indian heritage."
Mother subsequently claimed she had "Cherokee [Indian] heritage through
her [mother]."
CWS interviewed family members to obtain information about the family's
ancestral history. It then mailed completed ICWA-030 notice forms to the three Cherokee
Indian tribes and the Bureau of Indian Affairs.
The Eastern Band of Cherokee Indians determined that M.G. "is neither
registered nor eligible to register as a member of this tribe."
2
The United Keetoowah Band of Cherokee Indians in Oklahoma determined
that there "is no evidence that supports" M.G. is descended "from anyone on the
Keetoowah Roll."
The Cherokee Nation tribe responded, stating it could not verify whether the
child had Indian heritage from its tribe. It needed additional information, including,
among other things, dates of birth for some ancestors. In bold highlighted letters, it said it
needed the middle name of the child's great-great-great-grandfather [B.W.] and "also his
wife's name." (We use initials instead of the family members' full names for
confidentiality purposes.)
CWS responded to the tribe's letter. It said, "Our Department only sends
ICWA-030 notices after all avenues of research have been completed, therefore we have
already supplied your tribe with as much information as possible. Our notice provided all
information known to the family."
On April 10, 2013, the Cherokee Nation tribe responded stating, "As we
stated in our previous letter(s) to you, Cherokee Nation Indian Child Welfare received the
above information from your office requesting a determination of tribal eligibility.
However, the information you originally sent was not complete and it was impossible to
validate or invalidate Cherokee heritage without more information."
CWS filed an interim review report and requested the juvenile court to make
a finding "that ICWA does not apply." The report included the tribes' responses and an
"ICWA Matrix" that summarized CWS's ICWA investigation.
Mother, Father and their counsel were present at the August 5, 2013, hearing.
Counsel for CWS asked the juvenile court to "make a finding as to ICWA." Mother's
counsel and Father's counsel said they "submitted." They made no objection to the report
and did not request to introduce any additional information. The court ruled, "I'll make a
finding that the Indian Child Welfare Act does not apply based on the information that
we've received."
3
DISCUSSION
ICWA
Mother and Father contend they are entitled to a "conditional reversal of the
order terminating parents' rights" because CWS did not comply with its ICWA
investigation and notice duties. We disagree.
"[S]ocial services agencies have an affirmative duty to inquire at the outset
of the proceedings whether a child who is subject to the proceedings is, or may be, an
Indian child." (In re K.M. (2009) 172 Cal. App. 4th 115, 118-119.) Under ICWA, they
must give notice to the Indian tribes so they may "ascertain a child's status" from a review
of tribal records. (Id. at p. 119.) "'The notice must include: if known, (1) the Indian child's
name, birthplace, and birth date; (2) the name of the tribe in which the Indian child is
enrolled or may be eligible for enrollment; (3) names and addresses of the child's parents,
grandparents, great grandparents, and other identifying information . . . .'" (Ibid., italics
added.)
The social worker is required to interview "'the parents, Indian custodian,
and extended family members to gather the information.'" (In re C.Y. (2012) 208
Cal. App. 4th 34, 39.) But "neither the court nor [CWS] is required to conduct a
comprehensive investigation into the minor's Indian status." (Ibid.) The goal is "to
provide the Indian tribe with all available information about the child's ancestors." (In re
Francisco W. (2006) 139 Cal. App. 4th 695, 703, italics added.)
CWS contends the record shows that it made a reasonable investigation of
the family ancestral history and provided all available information to the tribes. We agree.
The CWS social worker conducted interviews with relatives after learning
that the child might have an Indian heritage. Father said he did not have any Indian
heritage. CWS obtained his family's ancestral history from an aunt. She provided the
names of the paternal grandparents and the paternal great-grandparents. With the
exception of the child's father, the paternal family ancestral history reflected that all of the
ancestors were born in Mexico.
4
Mother initially told CWS that her child "has no known Indian ancestry."
Later, during questioning by the juvenile court, Mother said she was "not sure" if she had
"any Native American Indian heritage." Mother subsequently told CWS that she had
"Cherokee heritage through her [mother, A.A.]."
The social worker interviewed A.A., the child's maternal grandmother. The
social worker also interviewed E.S., the child's maternal great-grandmother, to obtain
information "about their Cherokee Indian heritage." They told the social worker that "they
do not know of any family members being enrolled" in a tribe. They provided CWS with
extensive "family heritage information." That information included the names of the
child's maternal grandmother and maternal grandfather, the names of her maternal great-
grandmothers and her maternal great-grandfather, her maternal great-great-grandmother
and her maternal great-great-grandfather, and her maternal great-great-great-grandfathers,
B.P. and B.W. They provided CWS with the information they knew about their ancestors'
places of birth, dates of birth, dates of death and claimed Indian heritage or lack of Indian
heritage.
CWS sent ICWA notices to the Bureau of Indian Affairs and to the three
official Cherokee tribes. Two of the tribes--the United Keetowah Band of Chereokee
Indians and the Eastern Band of Cherokee Indians--were able to make the determination
that M.G. was not eligible for tribal membership from the information provided by CWS.
The Cherokee Nation tribe responded that the ICWA information it received
from CWS was "not complete" and consequently it could not make a determination of
tribal ancestry. It noted the ICWA form did not include a date of birth for one maternal
grandmother and the two great-great-great-grandfathers. As to maternal great-great-great-
grandfather B.W., it said his middle name was not included nor was his wife's name.
Mother and Father argue the tribe's letter shows CWS did not perform its
duty to obtain Indian ancestry information. We disagree. The absence of some
information about some ancestors does not mean CWS failed to perform its ICWA duties.
It was required to provide the tribes with "all available information" about the child's
ancestors. (In re Francisco W., supra, 139 Cal.App.4th at p. 703, italics added.) The
5
ICWA-030 notice form, "Notice of Child Custody Proceeding for Indian Child," was
written to anticipate that social services agencies might not be able to obtain all family
history information. The form provides, "Indicate if any of the information requested
below is unknown . . . ." In its ICWA matrix document, CWS documented its efforts
during a four-month period (February 21, 2013, through May 6, 2013) to obtain ICWA
information and the determinations of Indian status by the tribes.
CWS social worker Stephanie Morgan stated in a declaration that she had
provided "all information I/we have about the relatives" on the ICWA tribal notice form.
(Italics added.) Another CWS social worker said: 1) CWS "completed" all "avenues of
research" before sending the ICWA-30 notices to the tribes, 2) CWS supplied "as much
information as possible" to the tribes, and 3) "[o]ur notice provided all information known
to the family." (Italics added.) This evidence supports a finding that CWS submitted all
available information to the tribes.
Mother and Father contend CWS relied on A.A. and E.S., but did not
interview other family members who might have had additional information. Their
arguments are based on assumptions and speculation. For example, Father states, "There
is no information in the Record to suggest that mother's brother" and other relatives were
"interviewed by CWS." (Italics added.)
CWS worker Christine LaRocco said, "Our Department conducted a
thorough search to obtain family ancestry information by contacting all family members
known to our agency." (Some italics deleted.) That document is part of the evidence in
the record.
Mother and Father claim the juvenile court erred by relying on LaRocco's
statement about her "supposedly 'diligent' inquiry" because it conflicts with other
documents in "the record." They apparently focus on LaRocco's statement about
"contacting all family members" and believe it was not credible because she did not
"provide the details" and her statement was not included in other CWS documents, such as
the ICWA matrix document.
6
We do not decide credibility; that is a matter exclusively for the trial court.
(People v. Maury (2003) 30 Cal. 4th 342, 403; People v. Scott (1978) 21 Cal. 3d 284, 296-
297.) The court could reasonably infer LaRocco's statement supplemented the matrix
information and was not in conflict with it. But if there was an evidentiary conflict, this
was a matter for the trial court to resolve. (Ibid.) Given the court's findings, we must
presume it resolved any conflict against appellants. (Ibid.)
Mother claimed Indian heritage through A.A., her mother. Consequently,
interviewing A.A. was reasonable and appropriate. But CWS did not stop there. It also
interviewed E.S., the child's great-grandmother. A.A. and E.S. told CWS, "There are no
other people that they know of that would have additional information." (Italics added.)
That supports a finding that no other family members would have information regarding
the great-great-great-grandfathers. Mother and Father do not cite evidence supporting a
contrary finding or specifically describe what other information is available regarding
these ancestors.
Mother and Father claim CWS should have been able to provide more
detailed information about the child's maternal great-great-great-grandparents after
receiving the Cherokee Nation's first letter. They contend it ignored the tribe's request for
additional information. But that is not the case. CWS responded to the tribe and noted
that it had exhausted "all avenues of research" and it had no additional information.
Moreover, as CWS notes, it provided information about five generations of
family history, which is substantially more than what ICWA regulations require (In re
K.M., supra, 172 Cal.App.4th at p. 119), and it did not have to conduct an independent
"comprehensive" family history data search. (In re C.Y., supra, 208 Cal.App.4th at p. 39.)
The Cherokee Nation's letter lists the information CWS provided. The tribe
noted that CWS had provided: 1) the name and date of birth of the child's father, 2) the
name and date of birth of the child's mother, 3) the name and date of birth of the maternal
grandmother, 4) the name and date of birth of the maternal great-grandmother, 5) the name
and year of birth of the maternal great-great-grandmother, 6) the name and date of birth of
the maternal grandfather, 7) the name and date of birth of the maternal great-grandfather,
7
8) the name and date of birth of the maternal great-great-grandfather, and 9) the names of
the maternal great-great-great-grandfathers.
Mother and Father note the Cherokee Nation requested the middle name of
maternal great-great-great-grandfather B.W. They suggest CWS did not properly
perform its duties because it did not supply that information. But their argument assumes
that B.W. had a middle name. Mother's family provided CWS the full first and last name
of this ancestor. Mother and Father have cited no evidence and have made no showing
that the name provided to the tribe was incorrect, incomplete or that B.W. ever had a
middle name. They consequently have not met their burden on appeal. (In re D.W. (2011)
193 jamesfisher@example.org. 417-418.)
We have reviewed Mother's and Father's remaining contentions and we
conclude they have not shown trial court error or grounds for reversal.
The judgments and orders are affirmed.
NOT TO BE PUBLISHED.
GILBERT, P.J.
We concur:
YEGAN, J.
PERREN, J.
8
Arthur A. Garcia, Judge
Superior Court County of Santa Barbara
______________________________
Pamela Deavours, under appointment by the Court of Appeal, for Defendant
and Appellant M.G.
Lori A. Fields, under appointment by the Court of Appeal, for Defendant and
Appellant T.R.
Michael C. Ghizzoni, County Counsel, Toni Lorien, Deputy Counsel, for
Plaintiff and Respondent.
9
|
Exhibit 10.10
--------------------------------------------------------------------------------
SUNOCO, INC.
SPECIAL EXECUTIVE SEVERANCE PLAN
(Amended and Restated as of February 6, 2003)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ARTICLE I
DEFINITIONS
Section 1.1 “Accounting Firm” shall have the meaning provided herein at Section
4.7(b).
Section 1.2 “Annual Compensation” shall mean a Participant’s annual base salary
as in effect immediately prior to the Change in Control, or, if greater,
immediately prior to the Employment Termination Date, plus the greater of (x)
the Participant’s annual guideline (target) bonus as in effect immediately
before the Change in Control or, if higher, the Employment Termination Date, or
(y) the highest annual bonus awarded to the Participant with respect to any of
the three years ending before the Change in Control or any subsequent year
ending before the Employment Termination Date.
Section 1.3 “Affiliate” shall mean any entity that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with Sunoco, Inc.
Section 1.4 “Benefit” or “Benefits” shall mean any or all of the benefits that a
Participant is entitled to receive pursuant to Article IV of the Plan.
Section 1.5 “Benefit Extension Period” shall mean:
(a) for an Executive Resource Employee in Grade 18 or above, three years; and
(b) for each other Executive Resource Employee, two years.
Section 1.6 “Board of Directors” shall mean the Board of Directors of Sunoco,
Inc.
Section 1.7 “Business Combination” shall have the meaning provided herein at
Section 1.8(c).
Section 1.8 “Change in Control” shall mean the occurrence of any of the
following events:
(a) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either (1) the then-outstanding shares of common stock of
Sunoco, Inc. (the “Outstanding Company Common Stock”) or (2) the combined voting
power of the then-outstanding voting securities of Sunoco, Inc. entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that, for purposes of this Section 1.8(a), the
following acquisitions shall not constitute a Change in Control: (A) any
acquisition directly from Sunoco, Inc., (B) any acquisition by Sunoco, Inc., (C)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by Sunoco, Inc. or any company controlled by, controlling or under
common control with Sunoco, Inc., or (D) any acquisition by any entity pursuant
to a transaction that complies with Sections 1.8(c)(1), (c)(2) and (c)(3) of
this definition;
1
--------------------------------------------------------------------------------
(b) Individuals who, as of September 6, 2001, constitute the Board of Directors
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board of Directors; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the shareholders of Sunoco, Inc., was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors;
(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving Sunoco, Inc. or any of
its subsidiaries, a sale or other disposition of all or substantially all of the
assets of Sunoco, Inc., or the acquisition of assets or stock of another entity
by Sunoco, Inc. or any of its subsidiaries (each, a “Business Combination”), in
each case unless, following such Business Combination, (1) all or substantially
all of the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that, as a result of such transaction, owns Sunoco, Inc. or all or
substantially all of the assets of Sunoco, Inc., either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities, as the case may be, (2) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of Sunoco, Inc. or such corporation
resulting from such Business Combination or any of their respective
subsidiaries) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then-outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then-outstanding voting securities of such corporation, except to the extent
that such ownership existed prior to the Business Combination, and (3) at least
a majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement or of the action of the Board of
Directors providing for such Business Combination; or
(d) Approval by the shareholders of Sunoco, Inc. of a complete liquidation or
dissolution of Sunoco, Inc.
Section 1.9 “Chief Executive Officer” shall mean the individual serving as the
Chief Executive Officer of Sunoco, Inc. as of the date of reference.
Section 1.10 “Code” shall mean the Internal Revenue Code of 1986, as amended.
2
--------------------------------------------------------------------------------
Section 1.11 “Committee” shall mean the administrative committee designated
pursuant to Article VI of the Plan to administer the Plan in accordance with its
terms.
Section 1.12 “Company” shall mean Sunoco, Inc., and any Affiliate.
Section 1.13 “Company Service” shall mean, for purposes of determining Benefits
available to any Participant in this Plan, the total aggregate recorded length
of such Participant’s service with Sunoco, Inc. or any Affiliate (while it is an
Affiliate).
Company Service shall commence with the Participant’s initial date of employment
with the Company, and shall end with such Participant’s death, retirement, or
termination for any reason. Company Service also shall include:
(a) all periods of approved leave of absence (civil, family, medical, military,
or Olympic); provided, however, that the Participant returns to work within the
prescribed time following the leave;
(b) any break in service of thirty (30) days or less; and
(c) any service credited under applicable Company policies with respect to the
length of a Participant’s employment by any non-affiliated entity that
subsequently becomes an Affiliate or part of the operations of the Company.
Section 1.14 “Disability” shall mean any illness, injury or incapacity of such
duration and type as to render a Participant eligible to receive long-term
disability benefits under the applicable broad-based long-term disability
program of the Company.
Section 1.15 “Compensation Committee” shall mean the compensation committee of
the Board of Directors.
Section 1.16 “Employment Termination Date” shall mean the date on which the
employment relationship between the Participant and the Company is terminated.
Section 1.17 “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended.
Section 1.18 “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
Section 1.19 “Excise Tax” shall have the meaning provided herein at Section
4.7(f).
Section 1.20 “Executive Resource Employee” shall mean any individual employed by
the Company who has been designated by Sunoco, Inc. as a member of Sunoco,
Inc.’s executive resources group. Generally, such group shall include employees
in Grades 14-20 and all other employees subject to Section 16 of the Exchange
Act.
Section 1.21 “Gross-Up Payment” shall have the meaning provided herein at
Section 4.7(a).
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Section 1.22 “Incumbent Board” shall have the meaning provided herein at Section
1.8(b).
Section 1.23 “Involuntary Plan” shall mean the Sunoco, Inc. Executive
Involuntary Severance Plan.
Section 1.24 “Just Cause” shall mean:
(a) the willful and continued failure of the Participant to perform
substantially the Participant’s duties with the Company (other than any such
failure resulting from incapacity due to physical or mental illness or following
notice of employment termination by the Participant pursuant to Section 1.32(b)
or (c)), after a written demand for substantial performance is delivered to the
Participant by the Board of Directors or the Chief Executive Officer that
specifically identifies the manner in which the Board of Directors or the Chief
Executive Officer believes that the Participant has not substantially performed
the Participant’s duties, or
(b) the willful engaging by the Participant in illegal conduct or gross
misconduct that is materially and demonstrably injurious to the Company.
For purposes of this Section 1.24, no act, or failure to act, on the part of the
Participant shall be considered “willful” unless it is done, or omitted to be
done, by the Participant in bad faith or without reasonable belief that the
Participant’s action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer or
a senior officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Participant in good faith and in the best interests of the Company. The
cessation of employment of the Participant shall not be deemed to be for Just
Cause unless and until there shall have been delivered to the Participant a copy
of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board of Directors (excluding the
Participant, if the Participant is a member of the Board of Directors) at a
meeting of the Board of Directors (after reasonable notice is provided to the
Participant and the Participant is given an opportunity, together with counsel
for the Participant, to be heard before the Board of Directors), finding that,
in the good faith opinion of the Board of Directors, the Participant is guilty
of the conduct described in Section 1.24(a) or 1.24(b), and specifying the
particulars thereof in detail.
Section 1.25 “Outstanding Company Common Stock” shall have the meaning provided
herein at Section 1.8(a).
Section 1.26 “Outstanding Company Voting Stock” shall have the meaning provided
herein at Section 1.8(a).
Section 1.27 “Parachute Value” shall have the meaning provided herein at Section
4.7(f).
Section 1.28 “Participant” shall mean any Executive Resource Employee who is
employed by the Company on or before the occurrence of any Change in Control. In
addition, for purposes of Sections 4.6 and 4.7 of this Plan, each former
Executive Resource Employee shall be a Participant.
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Section 1.29 “Payment” shall have the meaning provided herein at Section 4.7(f)
Section 1.30 “Person” shall have the meaning provided herein at Section 1.8(a).
Section 1.31 “Plan” shall mean the Sunoco, Inc. Special Executive Severance
Plan, as set forth herein, and as the same may from time to time be amended.
Section 1.32 “Qualifying Termination” of the employment of a Participant shall
mean any of the following:
(a) a termination of employment by the Company within two (2) years after a
Change in Control, other than for Just Cause, death or Disability;
(b) a termination of employment by the Participant within two (2) years after a
Change in Control for one or more of the following reasons:
(1) the assignment to such Participant of any duties inconsistent in a way
adverse to such Participant, with such Participant’s positions, duties,
responsibilities and status with the Company immediately prior to the Change in
Control, or a reduction in the duties and responsibilities held by the
Participant immediately prior to the Change in Control; or a change in the
Participant’s reporting responsibilities, title or offices as in effect
immediately prior to the Change in Control that is adverse to the Participant;
in each case except in connection with such Participant’s termination of
employment by the Company for Just Cause; or
(2) with respect to any Participant who is a member of the Board of Directors
immediately prior to the Change in Control, any failure of the shareholders of
Sunoco, Inc. to elect or reelect, or of Sunoco, Inc. to appoint or reappoint,
the Participant as a member of the Board of Directors;
(3) a reduction by the Company in either the Participant’s annual base salary or
guideline (target) bonus as in effect immediately prior to the Change in
Control; the failure of the Company to provide the Participant with employee
benefits and incentive compensation opportunities that (i) are not less
favorable than those provided to other executives who occupy the same grade
level at the Company as the Participant, or if the Company’s grade levels are no
longer applicable, to a similar peer group of the executives of the Company, and
(ii) provide the Participant with benefits that are at least as favorable,
measured separately for (A) incentive compensation opportunities, (B) savings
and retirement benefits, (C) welfare benefits, and (D) fringe benefits and
vacation, as the most favorable of each such category of benefit in effect for
the Participant at any time during the 120-day period immediately preceding the
Change in Control; or
(4) The Company requires the Participant to be based anywhere other than the
Participant’s present work location or a location within thirty-five (35) miles
from the present location; or the Company requires the Participant to travel on
Company business to an extent substantially more burdensome than such
Participant’s travel obligations
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during the period of twelve (12) consecutive months immediately preceding the
Change in Control;
provided, however, that in the case of any such termination of employment by the
Participant under this subparagraph (b), such termination shall not be deemed to
be a Qualifying Termination unless the termination occurs within 120 days after
the occurrence of the event or events constituting the reason for the
termination; or
(c) before a Change in Control, a termination of employment by the Company
(other than a termination for Just Cause) or a termination of employment by the
Participant for one of the reasons set forth in (b) above, if the affected
Participant can demonstrate that such termination or circumstance in (b) above
leading to the termination:
(1) was at the request of a third party with which the Company had entered into
negotiations or an agreement with regard to a Change in Control; or
(2) otherwise occurred in connection with a Change in Control;
provided, however, that in either such case, a Change in Control actually occurs
within one (1) year following the Employment Termination Date.
Any good faith determination made by the Participant that the Participant has
experienced a Qualifying Termination pursuant to Section 1.32(b) shall be
conclusive. A Participant’s mental or physical incapacity following the
occurrence of an event described above in (b) above shall not affect the
Participant’s ability to have a Qualifying Termination.
Section 1.33 “Retirement Plan” shall have the meaning provided herein at Section
4.1(c).
Section 1.34 “SERP” shall have the meaning provided herein at Section 4.1(c).
Section 1.35 “Sunoco, Inc.” shall mean Sunoco, Inc., a Pennsylvania corporation,
and any successor thereto by merger, consolidation, liquidation or purchase of
assets or stock or similar transaction.
Section 1.36 “Underpayment” shall have the meaning provided herein at Section
4.7(b).
ARTICLE II
BACKGROUND, PURPOSE AND TERM OF PLAN
Section 2.1 Background. Sunoco, Inc. maintains this Plan for the purpose of
providing severance allowances to Executive Resource Employees whose employment
is terminated in connection with or following a Change in Control. The Plan has
been amended and restated as of September 6, 2001. The Plan, as amended and
restated herein, shall be effective as of February 6, 2003.
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Section 2.2 Purpose of the Plan. The Plan, as set forth herein, has been adopted
by the Board of Directors, or a committee thereof, delegated such
responsibility, acting in its sole discretion, in recognition that the
possibility of a major transaction or a Change in Control exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of key management
personnel to the detriment of the Company. The Board of Directors has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of Participants, as key members of Company’s
management, to their assigned duties without distraction. The Plan is not
intended to be included in the definitions of “employee pension benefit plan”
and “pension plan” set forth under Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”). Rather, this Plan is intended
to meet the descriptive requirements of a plan constituting a “severance pay
plan” within the meaning of regulations published by the Secretary of Labor at
Title 29, Code of Federal Regulations, Section 2510.3-2(b). Accordingly, the
benefits paid by the Plan are not deferred compensation.
Section 2.3 Term of the Plan. The Plan will continue until such time as the
Board of Directors, or a committee thereof, delegated such responsibility,
acting in its sole discretion, elects to modify, supersede or terminate it;
provided, however, that no such action taken after a Change in Control, or
before, but in connection with, a Change in Control, may terminate or reduce the
benefits or prospective benefits of any individual who is a Participant on the
date of the action without the express written consent of the Participant.
ARTICLE III
PARTICIPATION AND ELIGIBILITY FOR BENEFITS
Section 3.1 General Requirements. Each Executive Resource Employee shall become
a Participant upon confirmation of his/her official title or employment grade by
election by the Board of Directors or appointment by Sunoco, Inc. Except with
respect to the benefits and payments under Sections 4.7 and 4.8, in order to
receive a Benefit under this Plan, a Participant’s employment must have been
terminated as a result of a Qualifying Termination.
Section 3.2 Qualifying Termination. The Committee shall determine whether any
termination of a Participant is a Qualifying Termination. The Participant shall
follow the procedures described in Article IX for presenting his or her claim
for Benefits under this Plan.
ARTICLE IV
BENEFITS
Section 4.1 Amount of Immediate Cash Benefit; Qualifying Termination. In the
event of a termination of employment that would qualify the Participant for
Benefits that is a Qualifying Termination, the cash amount to be paid to a
Participant eligible to receive Benefits under Section 3.1 hereof shall be paid
in a lump sum as provided in Section 5.1 hereof and shall equal the sum of the
following:
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(a) An amount equal to the Participant’s earned vacation (as determined under
the Company’s applicable vacation policy as in effect at the time of the Change
in Control) through his or her Employment Termination Date;
(b) (1) for an Executive Resources Employee in Grade 18 or above, Annual
Compensation multiplied by three (3);
(2) for each other Executive Resources Employee, Annual Compensation multiplied
by two (2);
(c) An amount equal to the excess of (x) the actuarial equivalent of the benefit
under the Sunoco, Inc. Retirement Plan or any successor defined benefit pension
plan (the “Retirement Plan”) (utilizing actuarial assumptions no less favorable
to the Participant than those in effect under the Retirement Plan immediately
prior to the Change in Control) and any excess or supplemental retirement plan,
including, without limitation, the Sunoco, Inc. Executive Retirement Plan and
the Sunoco, Inc. Pension Restoration Plan, in which the Participant participates
(collectively, the “SERP”) that the Participant would receive if the
Participant’s employment continued throughout his/her Benefit Extension Period,
assuming for this purpose that all accrued benefits are fully vested and
assuming that the Participant’s compensation in each year of his/her Benefit
Extension Period is the Annual Compensation, over (y) the actuarial equivalent
of the Participant’s actual benefit (paid or payable), if any, under the
Retirement Plan and the SERP as of the Employment Termination Date (including
any additional benefit to which the Participant is entitled under the Retirement
Plan or the SERP in connection with the Change in Control).
Section 4.2 Executive Severance Benefits. In the event that Benefits are paid
under Section 4.1, the Participant shall continue to be entitled, through the
end of his/her Benefit Extension Period, to those employee benefits, based upon
the amount of coverage or benefits provided at the Change in Control, listed
below:
(a) Death benefits as follows:
(1) for Participants who became Executive Resource Employees on or after January
1, 1985, an amount equal to one (1) times annual base salary at the Employment
Termination Date; and
(2) for Participants who became Executive Resource Employees before January 1,
1985, an amount equal to two (2) times the sum of annual base salary and
guideline (target) bonus at the Employment Termination Date.
Any supplemental coverages elected under the Sunoco, Inc. Death Benefits Plan or
any similar plan of the Company will be discontinued under the terms of such
plan or plans.
(b) Medical plan benefits (including dental coverage), with COBRA continuation
eligibility beginning as of the end of the Benefit Extension Period, except as
provided hereinbelow at Section 4.3.
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(c) Life insurance coverage.
In each case, when contributions are required of all Executive Resource
Employees at the time of the Participant’s Employment Termination Date, or
thereafter, if required of all other active Executive Resource Employees, the
Participant shall continue to be responsible for making the required
contributions during the Benefit Extension Period in order to be eligible for
the coverage. Notwithstanding the foregoing sentence, in lieu of the coverages
provided under this Section 4.2, the Company may pay, at the time payment is
otherwise to be made of cash Benefits pursuant to Section 5.1 hereof, the
Participant an amount (as adjusted for taxes) equal to the then present value of
the total cost of such coverages, or the Company may provide the Participant
with comparable coverage under a policy or policies of insurance. The
Participant also shall be entitled to outplacement services during the Benefit
Extension Period, at no cost to the Participant, from an experienced third-party
vendor selected by the Committee and consistent with vendors used in connection
with the Sunoco, Inc. Involuntary Termination Plan immediately before the Change
in Control.
Section 4.3 Special Medical Benefit. In the event Benefits are paid to the
Participant under Section 4.1:
(a) A Participant who, as of his/her Employment Termination Date, is fifty (50)
or more years of age and has ten (10) or more years of Company Service, shall
have medical (but not dental) benefits available under the same terms and
conditions as other employees not yet eligible for Medicare coverage who retire
under the terms of a Company retirement plan.
(b) A Participant who, as of the Employment Termination Date, is fifty (50) or
more years of age but has fewer than ten (10) years of Company Service, shall be
eligible to receive Company medical plan benefits (excluding dental coverage)
following the Benefit Extension Period, at a cost to any such Participant that
is equal to the full premium cost of such coverage.
Subject to modification or termination of such medical benefits as generally
provided to other employees not yet eligible for Medicare coverage who retire
under the terms of the Company’s retirement plan(s), such benefits shall
continue until such time as the Participant becomes first eligible for Medicare,
or the Participant voluntarily cancels coverage, whichever is earlier.
Section 4.4 Retirement and Savings Plans. This Plan shall not govern and shall
in no way affect the Participant’s interest in, or entitlement to benefits
under, any of the Company’s “qualified” or supplemental retirement plans, and,
except to the extent specifically provided in Section 4.1(c), payments received
under any such plans shall not affect a Participant’s right to any Benefit
hereunder.
Section 4.5 Minimum Benefit; Effect of Executive Involuntary Severance Plan.
(a) Notwithstanding the provisions of Sections 4.1, 4.2 and 4.3 hereof, the
Benefits available under those Sections of this Plan shall not be less than
those determined in accordance with the provisions of the Sunoco, Inc. Special
Employee Severance Plan. If the Participant determines that the benefits under
the Sunoco, Inc. Special Employee Severance Plan are more valuable to the
Participant than the
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comparable Benefits set forth in Sections 4.1, 4.2 and 4.3 of this Plan, then
the provisions used to calculate the Benefits available to the Participant under
this Plan shall not apply, and the Benefits available to the Participant under
Sections 4.1, 4.2 and 4.3 of this Plan shall be calculated using only Sections
4.1 and 4.2 of the Sunoco, Inc. Special Employee Severance Plan, as if such
Sections 4.1 and 4.2 were a part of this Plan.
(b) If a Participant is or becomes entitled to receive severance benefits under
both the Involuntary Plan and Sections 4.1, 4.2 and/or 4.3 of this Plan, then
the following rules shall apply, notwithstanding any other provision of this
Plan nor any provision of the Involuntary Plan. If and to the extent such
benefits become payable under the Involuntary Plan before such benefits become
payable under this Plan, the Participant shall receive benefits under the
Involuntary Plan until the benefits under this Plan become payable, and the
benefits under this Plan shall be offset by the comparable benefits previously
paid under the Involuntary Plan. If such benefits under this Plan become payable
simultaneously with or before such benefits under the Involuntary Plan, the
Participant shall not be entitled to any benefits under the Involuntary Plan.
Section 4.6 Effect on Other Benefits. There shall not be drawn from the
continued provision by the Company of any of the aforementioned Benefits any
implication of continued employment or of continued right to accrual of
retirement benefits under the Company’s qualified or supplemental retirement
plans, nor shall a terminated employee, except as otherwise provided under the
terms of the Plan, accrue vacation days, paid holidays, paid sick days or other
similar benefits normally associated with employment for any part of the Benefit
Extension Period during which benefits are payable under this Plan. A
Participant shall have no duty to mitigate with respect to Benefits under this
Plan by seeking or accepting alternative employment. Further, the amount of any
payment or benefit provided for in this Plan shall not be reduced by any
compensation earned by the Participant as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Participant to the Company, or otherwise.
Section 4.7 Parachute Payments.
(a) Anything in this Plan to the contrary notwithstanding and except as set
forth below, in the event it shall be determined that any Payment would be
subject to the Excise Tax, then the Participant shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that after payment
by the Participant of all taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Participant retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 4.7(c), all determinations required to
be made under this Section 4.7, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Ernst & Young LLP
or such other nationally recognized certified public accounting firm as may be
designated by the Participant (the “Accounting Firm”) which shall provide
detailed supporting calculations both to Sunoco, Inc. and the Participant within
15 business days of the receipt of notice from the Participant that there has
been a Payment, or such earlier time
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as is requested by Sunoco, Inc. All fees and expenses of the Accounting Firm
shall be borne solely by the Company. Subject to Section 4.7(e) below, any
Gross-Up Payment, as determined pursuant to this Section 4.7, shall be paid by
Sunoco, Inc. to the Participant within five days of the receipt of the
Accounting Firm’s determination. Any determination by the Accounting Firm shall
be binding upon Sunoco, Inc. and the Participant. As a result of the uncertainty
in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
(“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that Sunoco, Inc. exhausts its remedies pursuant to
Section 4.7(c) and the Participant thereafter is required to make a payment of
any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Company to or for the benefit of the Participant.
(c) The Participant shall notify Sunoco, Inc. in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by
Sunoco, Inc. of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the Participant is
informed in writing of such claim and shall apprise Sunoco, Inc. of the nature
of such claim and the date on which such claim is requested to be paid. The
Participant shall not pay such claim prior to the expiration of the 30-day
period following the date on which it gives such notice to Sunoco, Inc. (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If Sunoco, Inc. notifies the Participant in writing prior to the
expiration of such period that it desires to contest such claim, the Participant
shall:
(i) give Sunoco, Inc. any information reasonably requested by Sunoco, Inc.
relating to such claim,
(ii) take such action in connection with contesting such claim as Sunoco, Inc.
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by Sunoco, Inc.,
(iii) cooperate with Sunoco, Inc. in good faith in order effectively to contest
such claim, and
(iv) permit Sunoco, Inc. to participate in any proceedings relating to such
claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Participant harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 4.7(c), Sunoco, Inc. shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Participant to pay the tax claimed and sue for a refund or
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contest the claim in any permissible manner, and the Participant agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as Sunoco,
Inc. shall determine; provided, however, that if Sunoco, Inc. directs the
Participant to pay such claim and sue for a refund, the Company shall advance
the amount of such payment to the Participant, on an interest-free basis and
shall indemnify and hold the Participant harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Participant with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, Sunoco, Inc.’s control
of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Participant shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(d) If, after the receipt by the Participant of a Gross-Up Payment or an amount
advanced by Sunoco, Inc. pursuant to Section 4.7(c), the Participant becomes
entitled to receive any refund with respect to such claim, the Participant shall
(subject to Sunoco, Inc.’s complying with the requirements of Section 4.7(c) to
the extent applicable) promptly pay to Sunoco, Inc. the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Participant of an amount advanced by
Sunoco, Inc. pursuant to Section 4.7(c), a determination is made that the
Participant shall not be entitled to any refund with respect to such claim and
Sunoco, Inc. does not notify the Participant in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall not be required to be repaid and the
amount of such advance shall offset, to the extent thereof, the amount of any
Gross-Up Payment required to be paid.
(e) Notwithstanding any other provision of this Section 4.7, the Company may
withhold and pay over to the Internal Revenue Service for the benefit of the
Participant all or any portion of the Gross-Up Payment that it determines in
good faith that it is or may be in the future required to withhold, and the
Participant hereby consents to such withholding.
(f) Definitions. The following terms shall have the following meanings for
purposes of this Section 4.7.
(i) “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code,
together with any interest or penalties imposed with respect to such excise tax.
(ii) “Parachute Value” of a Payment shall mean the present value as of the date
of the change of control for purposes of Section 280G of the Code of the portion
of such Payment that constitutes a “parachute payment” under Section 280G(b)(2),
as determined by the Accounting Firm for purposes of determining whether and to
what extent the Excise Tax will apply to such Payment.
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(iii) A “Payment” shall mean any payment or distribution in the nature of
compensation (within the meaning of Section 280G(b)(2) of the Code) to or for
the benefit of the Participant, whether paid or payable pursuant to this Plan or
otherwise.
Section 4.8 Legal Fees and Expenses. The Company also shall pay to the
Participant all legal fees and expenses incurred by the Participant:
(a) in disputing in good faith any issue relating to the termination of the
Participant’s employment in connection with a Change in Control as a result of a
Qualifying Termination entitling the Participant to Benefits under this Plan
(including a termination of employment if the Participant alleges in good faith
that such termination will be or is a Qualifying Termination pursuant to Section
1.32(c)); or
(b) in seeking in good faith to obtain or enforce any benefit or right provided
by this Plan (or the payment of any Benefits through any trust established to
fund Benefits under this Plan) or in connection with any tax audit or proceeding
to the extent attributable to the application of section 4999 of the Code to any
payment or benefit provided hereunder.
Such payments shall be made as such fees and expenses are incurred by the
Participant, but in no event later than five (5) business days after delivery of
the Participant’s written requests for payment accompanied with such evidence of
fees and expenses incurred as the Company reasonably may require. The
Participant shall reimburse the Company for such fees and expenses at such time
as a court of competent jurisdiction, or another independent third party having
similar authority, determines that the Participant’s claim was frivolously
brought without reasonable expectation of success on the merits thereof.
ARTICLE V
METHOD AND DURATION OF BENEFIT PAYMENTS
Section 5.1 Method of Payment. The cash Benefits to which a Participant is
entitled, as determined pursuant to Article IV hereof, shall be paid in a lump
sum. Payment shall be made by mailing to the last address provided by the
Participant to the Company. In general, payment shall be made within fifteen
(15) days after the Participant’s Employment Termination Date but in no event
later than thirty (30) days thereafter. In the event the Company should fail to
pay when due the amounts described in Article IV, the Participant shall also be
entitled to receive from the Company an amount representing interest on any
unpaid or untimely paid amounts from the due date to the date of payment at a
rate equal to the prime rate of Citibank, N.A. as in effect from time to time
after such due date.
Section 5.2 Payments to Beneficiary(ies). Each Executive Resource Employee shall
designate a beneficiary(ies) to receive any Benefits due hereunder in the event
of the Participant’s death prior to the receipt of all such Benefits. Such
beneficiary designation shall be made in the manner, and at the time, prescribed
by the Company in its sole discretion. In the absence of an effective
beneficiary designation hereunder, the Participant’s estate shall be deemed to
be his or her designated beneficiary.
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ARTICLE VI
ADMINISTRATION
Section 6.1 Appointment of the Committee. The Committee shall consist of three
(3) or more persons appointed by the Compensation Committee. Committee members
may be, but need not be, employees of Sunoco, Inc. Following a Change in
Control, the individuals most recently so appointed to serve as members of the
Committee before the Change in Control, or successors whom they approve, shall
continue to serve as the Committee.
Section 6.2 Tenure of the Committee. Before a Change in Control, Committee
members shall serve at the pleasure of the Compensation Committee and may be
discharged, with or without cause, by the Compensation Committee. Committee
members may resign at any time on ten (10) days’ written notice.
Section 6.3 Authority and Duties. It shall be the duty of the Committee, on the
basis of information supplied to it by the Company, to determine the eligibility
of each Participant for Benefits under the Plan, to determine the amount of
Benefit to which each such Participant may be entitled, and to determine the
manner and time of payment of the Benefit consistent with the provisions hereof.
In addition, the exercise of discretion by the Committee need not be uniformly
applied to similarly situated Participants. The Company shall make such payments
as are certified to it by the Committee to be due to Participants. The Committee
shall have the full power and authority to construe, interpret and administer
the Plan, to correct deficiencies therein, and to supply omissions. Except as
provided in Section 9.2, all decisions, actions and interpretations of the
Committee shall be final, binding and conclusive upon the parties.
Section 6.4 Action by the Committee. A majority of the members of the Committee
shall constitute a quorum for the transaction of business at a meeting of the
Committee. Any action of the Committee may be taken upon the affirmative vote of
a majority of the members of the Committee at a meeting, or at the direction of
the chairperson, without a meeting by mail, telegraph, telephone or electronic
communication device; provided that all of the members of the Committee are
informed of their right to vote on the matter before the Committee and of the
outcome of the vote thereon.
Section 6.5 Officers of the Committee. The Compensation Committee shall
designate one of the members of the Committee to serve as chairperson thereof.
The Compensation Committee shall also designate a person to serve as Secretary
of the Committee, which person may be, but need not be, a member of the
Committee.
Section 6.6 Compensation of the Committee. Members of the Committee shall
receive no compensation for their services as such. However, all reasonable
expenses of the Committee shall be paid or reimbursed by the Company upon proper
documentation. The Company shall indemnify members of the Committee against
personal liability for actions taken in good faith in the discharge of their
respective duties as members of the Committee and shall provide coverage to them
under the Company’s Liability Insurance program(s).
Section 6.7 Records, Reporting and Disclosure. The Committee shall keep all
individual and group records relating to Participants and former Participants
and all other records necessary for the proper operation of the Plan. Such
records shall be made available to
14
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the Company and to each Participant for examination during business hours except
that a Participant shall examine only such records as pertain exclusively to the
examining Participant and to the Plan. The Committee shall prepare and shall
file as required by law or regulation all reports, forms, documents and other
items required by ERISA, the Internal Revenue Code, and every other relevant
statute, each as amended, and all regulations thereunder (except that the
Company, as payor of the Benefits, shall prepare and distribute to the proper
recipients all forms relating to withholding of income or wage taxes, Social
Security taxes, and other amounts which may be similarly reportable).
Section 6.8 Actions of the Chief Executive Officer. Whenever a determination is
required of the Chief Executive Officer under the Plan, such determination shall
be made solely at the discretion of the Chief Executive Officer. In addition,
the exercise of discretion by the Chief Executive Officer need not be uniformly
applied to similarly situated Participants and shall be final and binding on
each Participant or beneficiary(ies) to whom the determination is directed.
Section 6.9 Bonding. The Committee shall arrange any bonding that may be
required by law, but no amount in excess of the amount required by law (if any)
shall be required by the Plan.
ARTICLE VII
AMENDMENT AND TERMINATION
Section 7.1 Amendment, Suspension and Termination. The Company, acting through
the Board of Directors, retains the right, at any time and from time to time, to
amend, suspend or terminate the Plan in whole or in part, for any reason, and
without either the consent of or the prior notification to any Participant.
Notwithstanding the foregoing, no such action that is taken after a Change in
Control or before, but in connection with, a Change in Control, may terminate or
reduce the benefits or prospective benefits of any Participant on the date of
such action without the express written consent of the Participant. No
amendment, suspension or termination shall give the Company the right to recover
any amount paid to a Participant prior to the date of such action or to cause
the cessation and discontinuance of payments of Benefits to any person or
persons under the Plan already receiving Benefits. The Board of Directors shall
have the right to delegate its authority and powers hereunder, or any portion
thereof, to any committee of the Board of Directors, and shall have the right to
rescind any such delegation in whole or in part.
ARTICLE VIII
DUTIES OF THE COMPANY
Section 8.1 Records. The Company shall supply to the Committee all records and
information necessary to the performance of the Committee’s duties.
Section 8.2 Payment. The Company shall make payments from its general assets to
Participants and shall provide the Benefits described in Article IV hereof in
accordance with the terms of the Plan, as directed by the Committee.
15
--------------------------------------------------------------------------------
ARTICLE IX
CLAIMS PROCEDURES
Section 9.1 Application for Benefits. Benefits shall be paid by the Company
following an event that qualifies the Participant for Benefits. In the event a
Participant believes himself/herself eligible for Benefits under this Plan and
Benefit payments have not been initiated by the Company, the Participant may
apply for such Benefits by requesting payment of Benefits in writing from the
Committee.
Section 9.2 Appeals of Denied Claims for Benefits. In the event that any claim
for benefits is denied in whole or in part, the Participant (or beneficiary, if
applicable) whose claim has been so denied shall be notified of such denial in
writing by the Committee, within thirty (30) days following submission by the
Participant (or beneficiary, if applicable) of such claim to the Committee. The
notice advising of the denial shall specify the reason or reasons for denial,
make specific reference to pertinent Plan provisions, describe any additional
material or information necessary for the claimant to perfect the claim
(explaining why such material or information is needed), and shall advise the
Participant of the procedure for the appeal of such denial. All appeals shall be
made by the following procedure:
(a) The Participant whose claim has been denied shall file with the Committee a
notice of desire to appeal the denial. Such notice shall be filed within sixty
(60) days of notification by the Committee of the claim denial, shall be made in
writing, and shall set forth all of the facts upon which the appeal is based.
Appeals not timely filed shall be barred.
(b) The Committee shall, within thirty (30) days of receipt of the Participant’s
notice of appeal, establish a hearing date on which the Participant may make an
oral presentation to the Committee in support of his/her appeal. The Participant
shall be given not less than ten (10) days’ notice of the date set for the
hearing.
(c) The Committee shall consider the merits of the claimant’s written and oral
presentations, the merits of any facts or evidence in support of the denial of
benefits, and such other facts and circumstances as the Committee shall deem
relevant. If the claimant elects not to make an oral presentation, such election
shall not be deemed adverse to his/her interest, and the Committee shall proceed
as set forth below as though an oral presentation of the contents of the
claimant’s written presentation had been made.
(d) The Committee shall render a determination upon the appealed claim, within
sixty (60) days of the hearing date, which determination shall be accompanied by
a written statement as to the reasons therefor.
16
--------------------------------------------------------------------------------
ARTICLE X
MISCELLANEOUS
Section 10.1 Nonalienation of Benefits. None of the payments, benefits or rights
of any Participant shall be subject to any claim of any creditor, and, in
particular, to the fullest extent permitted by law, all such payments, benefits
and rights shall be free from attachment, garnishment, trustee’s process, or any
other legal or equitable process available to any creditor of such Participant.
No Participant shall have the right to alienate, anticipate, commute, pledge,
encumber or assign any of the benefits or payments which he/she may expect to
receive, contingently or otherwise, under this Plan.
Section 10.2 No Contract of Employment. Neither the establishment of the Plan,
nor any modification thereof, nor the creation of any fund, trust or account,
nor the payment of any benefits shall be construed as giving any Participant, or
any person whosoever, the right to be retained in the service of the Company,
and all Participants shall remain subject to discharge to the same extent as if
the Plan had never been adopted.
Section 10.3 Severability of Provisions. If any provision of this Plan shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and this Plan shall be construed and
enforced as if such provisions had not been included.
Section 10.4 Successors, Heirs, Assigns, and Personal Representatives. This Plan
shall be binding upon the heirs, executors, administrators, successors and
assigns of the parties, including each Participant, present and future.
Section 10.5 Headings and Captions. The headings and captions herein are
provided for reference and convenience only, shall not be considered part of the
Plan, and shall not be employed in the construction of the Plan.
Section 10.6 Gender and Number. Except where otherwise clearly indicated by
context, the masculine and the neuter shall include the feminine and the neuter,
the singular shall include the plural, and vice-versa.
Section 10.7 Unfunded Plan. The Plan shall not be funded. A Participant’s right
to receive payment of Benefits hereunder shall be no greater than the right of
any unsecured creditor of the Company. The Company may, but shall not be
required to, set aside or earmark an amount necessary to provide the Benefits
specified herein (including the establishment of trusts). In any event, no
Participant shall have any right to, or interest in, any assets of the Company
which may be applied by the Company to the payment of Benefits except as may be
provided pursuant to the terms of any trust established by the Company to
provide Benefits.
Section 10.8 Payments to Incompetent Persons, Etc. Any Benefit payable to or for
the benefit of a minor, an incompetent person or other person incapable of
receipting therefor shall be deemed paid when paid to such person’s guardian or
to the party providing or reasonably appearing to provide for the care of such
person, and such payment shall fully discharge the Company, the Committee and
all other parties with respect thereto.
17
--------------------------------------------------------------------------------
Section 10.9 Lost Payees. A Benefit shall be deemed forfeited if the Committee
is unable to locate a Participant to whom a Benefit is due. Such Benefit shall
be reinstated if application is made by the Participant for the forfeited
Benefit while this Plan is in operation.
Section 10.10 Controlling Law. This Plan shall be construed and enforced
according to the laws of the Commonwealth of Pennsylvania to the extent not
preempted by federal law.
Section 10.11 Successor Employer. The Company shall require any successor or
assignee, whether direct or indirect, by purchase, merger, consolidation or
otherwise, to all or substantially all the business or assets of the Company,
expressly and unconditionally to assume and agree to perform the Company’s
obligations under this Plan, in the same manner and to the same extent that the
Company would be required to perform if no such succession or assignment had
taken place. In such event, the term “Company” shall mean the Company and any
successor or assignee to the business or assets which by reason hereof becomes
bound by the terms and provisions of this Plan.
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OPINION — AG — THE WILDLIFE CONSERVATION COMMISSION IS AUTHORIZED TO ENTER INTO A AGREEMENT, SUCH AS THE ONE SUBMITTED, FOR THE PURPOSE OF COOPERATING IN THE STUDY AND RESEARCH ON THE DISTRIBUTION OF FISHES IN OKLAHOMA WATERS; FURTHERMORE, THE EXPENDITURE OF WILDLIFE DEPARTMENT FUNDS FOR SUCH A FISHERY RESEARCH PROGRAM IS ALSO AUTHORIZED. CITE: 29 Ohio St. 1961 106 [29-106], ARTICLE XXVI, SECTION 4 (LEE COOK) |
Exhibit 10.24.5
Date:
November 15, 2016
To:
Regeneron Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, NY 10591-6707
Attention:
Dominick Agron
Vice President & Treasurer
777 Old Saw Mill River Road
Tarrytown, NY 10591-6707
Facsimile:
863.826.1802
From:
Credit Suisse Capital LLC
Eleven Madison Avenue
New York, NY 10010
With Credit Suisse Securities (USA) LLC as agent
Eleven Madison Avenue
New York, NY 10010
Re:
Termination of the Warrant Transaction between Credit Suisse Capital LLC and
Regeneron Pharmaceuticals, Inc.
_____________________________________________________________________________________________________________
Dear Sir/Madam:
Credit Suisse Capital LLC (“CS”) and Regeneron Pharmaceuticals, Inc. (“Issuer”)
are parties to a warrant transaction pursuant to a November 13, 2013 assignment
by Credit Suisse International, an affiliate of Dealer, to CS of such warrant
transaction. The warrant transaction is evidenced by the Master Terms and
Conditions for Base Warrants Issued by Regeneron Pharmaceuticals, Inc. dated as
of October 18, 2011, supplemented by the written confirmation dated as of
October 18, 2011 and amended by the Amendment dated as of May 14, 2014, the
Second Amendment dated as of November 18, 2014, the Third Amendment Dated as of
November 24, 2014 and the Fourth Amendment dated as of November 15, 2015 (as so
amended, the “Confirmation”). Terms used herein but are not otherwise defined
shall have meanings assigned to them in the Confirmation.
1. Termination. Effective upon payment of the Termination Payment on the Payment
Date (each as defined below), the Number of Warrants for each Component of the
Transaction shall be reduced to zero, and the Confirmation shall be of no
further force and effect.
2. Termination Payment. In consideration of the termination of the Transaction
as provided herein, Issuer agrees to pay to CS on the Payment Date the amount in
USD set forth below (the “Termination Payment”).
Termination Payment Amount:
USD 12,873,684.18
Payment Date:
November 18, 2016
3. Representations and Warranties.
(a) Each party represents to the other party that:
--------------------------------------------------------------------------------
(i) It is duly organized and validly existing under the laws of the jurisdiction
of its organization or incorporation and, if relevant under such laws, in good
standing.
(ii) It has the power to execute this agreement and any other documentation
relating to this agreement to which it is a party, to deliver this agreement and
any other documentation relating to this agreement that it is required by this
agreement to deliver and to perform its obligations under this agreement and has
taken all necessary action to authorize such execution, delivery and
performance.
(iii) Such execution, delivery and performance do not violate or conflict with
any law applicable to it, any provision of its constitutional documents, any
order or judgment of any court or other agency of government applicable to it or
any of its assets or any contractual restriction binding on or affecting it or
any of its assets.
(iv) All governmental and other consents that are required to have been obtained
by it with respect to this agreement have been obtained and are in full force
and effect and all conditions of any such consents have been complied with.
(v) Its obligations under this agreement constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms (subject to
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors' rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether enforcement
is sought in a proceeding in equity or at law)).
(b) Issuer represents and warrants to and for the benefit of CS as follows:
(i) (A) On the date hereof, Issuer is not aware of any material non-public
information regarding Issuer or the Shares and (B) its most recent Annual Report
on Form 10-K, taken together with all reports and other documents subsequently
filed by Issuer with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), when
considered as a whole (with the more recent such reports and documents deemed to
amend inconsistent statements contained in any earlier such reports and
documents), does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading.
(ii) On the date hereof and on the Payment Date, (A) the assets of Issuer at
their fair valuation exceed the liabilities of Issuer, including contingent
liabilities, (B) the capital of Issuer is adequate to conduct the business of
Issuer and (C) Issuer has the ability to pay its debts and obligations as such
debts mature and does not intend to, or does not believe that it will, incur
debt beyond its ability to pay as such debts mature.
(iii) Issuer acknowledges its responsibilities under applicable
federal securities laws, including, without limitation, Rule 10b-5 under the
Exchange Act, in relation to the Transaction and this agreement.
4. Counterparts. This agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if all of the
signatures thereto and hereto were upon the same instrument.
6. Governing Law. The provisions of this agreement shall be governed by the New
York law (without reference to choice of law doctrine).
--------------------------------------------------------------------------------
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this agreement and returning it in the manner indicated
in the attached cover letter.
CREDIT SUISSE CAPITAL LLC
By:
/s/Carole Villoresi
Name: Carole Villoresi
Title: Authorized Signatory
By:
/s/Shui Wong
Name: Shui Wong
Title: Authorized Signatory
CREDIT SUISSE SECURITIES (USA) LLC, as agent for Credit Suisse Capital LLC
By:
/s/Carole Villoresi
Name: Carole Villoresi
Title: Vice President
Agreed and Accepted By:
REGENERON PHARMACEUTICALS, INC.
By:
/s/Dominick Agron
Name: Dominick Agron
Title: Vice President & Treasurer
|
RENDERED: MARCH 26, 2021; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2020-CA-0105-MR
ROBERT OATES APPELLANT
APPEAL FROM LIVINGSTON CIRCUIT COURT
v. HONORABLE CLARENCE A. WOODALL, III, JUDGE
ACTION NO. 17-CR-00046
COMMONWEALTH OF KENTUCKY APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: CALDWELL, TAYLOR, AND K. THOMPSON, JUDGES.
CALDWELL, JUDGE: Robert Oates (“Oates”) appeals from his conviction of
Theft by Unlawful Taking over $500 and his resultant sentence of one-year
imprisonment. He alleges that the trial court erred in not directing a verdict on the
charge. He also complains that the trial court allowed evidence to be presented
which was more prejudicial than probative because it was not properly
authenticated, but acknowledges that he did not object to the admission of the
john42@example.org. Finally, he alleges that the complaining witness’s utterance to the
Appellant whilst leaving the witness box was prejudicial and the jury should have
been admonished to ignore the utterance; relief he did not request from the trial
court. We affirm.
FACTS
In 2016, Oates was working for Greer Excavating in Livingston
County. Oates had previously operated his own construction business, but upon
divorcing, he had dissolved his business. While wrapping up his business, he sold
some equipment. This included a bulldozer which he sold to Greer Excavating,
owned and operated by Keith Greer (“Greer”). He then began working for Greer
as an employee.
In September of 2016, Oates was approached by Jim Tinsley
(“Tinsley”), who wanted to have some work done on property he owned.
Understanding that Tinsley would pay more if Greer Excavating was engaged,
Oates agreed to do the work for Tinsley as a side job “as a favor.”
According to Oates, he told Greer about the Tinsley job and Greer
agreed to allow him to use the bulldozer to do the work for Tinsley as long as rent
was paid for its use. After several weeks, toiling after work hours, Oates finished
the job and was paid by Tinsley via check made payable to Oates Construction in
the amount of $1,600, plus title to a Jeep valued by the parties at $500.
-2-
Oates insists he then reimbursed Greer Excavating for materials he
had ordered for the Tinsley job through Greer Excavating, and made this
reimbursement in cash. He also alleged that he had paid Greer for rental of the
bulldozer. The total amount that Oates alleged he paid Greer for the job was
$1,900. He did not ask for or receive a receipt. Evidence at trial suggested Tinsley
paid Oates a total of $2,100 in cash plus the value of the Jeep.
Greer had a different view of the situation. He testified at the trial that
he was wholly unaware of the Tinsley job and denied that Oates ever asked
permission to use the bulldozer or order materials for the job through Greer
Excavating. When Greer was billed for the materials, he asked Oates about the bill
and learned of the Tinsley job. Oates assured him that he would reimburse the
company for the materials. When Greer was never paid for the materials by his
employee, Oates, he approached Tinsley for payment. That was when he was
presented with evidence that Tinsley had paid “Oates Construction” for the work
which had been completed using Greer Excavating equipment and with materials
purchased through the company. Greer denied ever being reimbursed by Oates for
any of the materials or the use of the bulldozer, despite Oates’ testimony to the
contrary.
Oates was charged with Theft by Unlawful Taking over $500 but
under $10,000, a Class D felony. Following a trial at which the trial court entered
-3-
a directed verdict as to the Jeep, Oates was found guilty for keeping the $1,600
which Tinsley had paid him. The jury recommended the minimum sentence of
one-year imprisonment, which was imposed by the Livingston Circuit Court. He
now appeals as a matter of right.
STANDARD OF REVIEW AND ANALYSIS
Directed Verdict
The standard of review for the denial of a motion for directed verdict
of acquittal involves the following:
On motion for directed verdict, the trial court must draw
all fair and reasonable inferences from the evidence in
favor of the Commonwealth. If the evidence is sufficient
to induce a reasonable juror to believe beyond a
reasonable doubt that the defendant is guilty, a directed
verdict should not be given. For the purpose of ruling on
the motion, the trial court must assume that the evidence
for the Commonwealth is true, but reserving to the jury
questions as to the credibility and weight to be given to
such testimony.
Commonwealth v. Benham, 816 S.W.2d 186, 187 (Ky. 1991).
Oates argues that the trial court erred when it allowed the jury to
deliberate because there was insufficient evidence provided to support a finding of
guilt. He complains that the evidence—which consisted of the testimony of Keith
Greer and Jim Tinsley, as well as the check Tinsley gave him payable to Oates
Construction, and receipts for materials Oates purchased through Greer Excavating
-4-
to complete the Tinsley gig—was not sufficient because Oates himself disputed
their testimony.
However, Oates forgets that it is the jury who is the arbiter of the
credibility of witnesses when testimony is in conflict. What Oates suggests is that
the trial court should have placed his judgment as to the credibility of the witnesses
as paramount to the judgment of the trier of fact, i.e., the jury. However, the law is
actually in opposition to his argument.
[Such an argument] improperly shifts the credibility
determination from the jury to the judge. As cautioned
by Professor Lawson, the power to disqualify witnesses
“should be applied grudgingly, only against the
‘incapable’ witness and never against the ‘incredible’
witness, since the triers of fact are particularly adept at
judging credibility.” Robert G. Lawson, The Kentucky
Evidence Law Handbook § 3.00[2][b] at 239 (5th ed.
2013) (quoting the Evidence Rules Study Committee,
Kentucky Rules of Evidence—Final Draft, p. 54 (Nov.
1989)).
Ross v. Commonwealth, 531 S.W.3d 471, 477 (Ky. 2017).
When the testimony of witnesses differs on a fact, it is the jury’s
responsibility to determine witness credibility and find facts. It is not the trial
court’s purview to remove that duty from the jury.
[W]hen looking at the trial court’s failure to grant a
directed verdict, an appellate court should not reverse
unless “it would be clearly unreasonable for a jury to find
guilt.” Commonwealth v. Benham, 816 S.W.2d 186, 187
(Ky. 1991).
-5-
Commonwealth v. Goss, 428 S.W.3d 619, 625-26 (Ky. 2014), as modified (Apr.
28, 2014). A simple divergence of testimony, such as that at issue here, is
insufficient for us to determine “it would be clearly unreasonable for a jury to find
guilt.” Id.
The trial court properly allowed the jury to determine which witnesses
to find credible, and, through the testimony, determine the facts it found supported
by substantial evidence. We cannot say that it was wholly unreasonable for the
jury to have found the testimony of Tinsley and Greer credible and to have found
the testimony of Oates to be self-serving and less worthy of belief. The trial court
did not err in denying the motion for a directed verdict.
Admission of Evidence
Oates made no objection to the introduction of the evidence of which
he now complains; thus, he alleges that the introduction of the evidence rises to the
level of palpable error.
A palpable error which affects the substantial rights of a
party may be considered by the court on motion for a
new trial or by an appellate court on appeal, even though
insufficiently raised or preserved for review, and
appropriate relief may be granted upon a determination
that manifest injustice has resulted from the error.
Kentucky Rules of Criminal Procedure (RCr) 10.26.
A palpable error is clear and plain, affects the substantial
rights of a party, and is more likely than other ordinary
errors to affect the outcome of the case. Miller v.
-6-
Commonwealth, 283 S.W.3d 690, 695 (Ky. 2009). Even
so, the defendant is not entitled to relief unless it can be
determined that manifest injustice, i.e., a repugnant and
intolerable outcome, resulted from that error. Id.
McCleery v. Commonwealth, 410 S.W.3d 597, 605-06 (Ky. 2013).
Oates alleges that the introduction of receipts for the materials he
purchased for the Tinsley job through Greer Excavating were not properly
authenticated. He claims this because of handwritten notations which appear on
several of them, and complains that one of the receipts was completely
handwritten. Oates alleges that it is only these handwritten notations that link the
receipts to the Tinsley job, and therefore to him, alleging that the receipts could
have been from other jobs performed for Greer Excavating customers. He forgets,
however, that he testified that he ordered materials for the Tinsley job through
Greer Excavating, utilizing the company’s ability to order materials without having
to pay immediately as he would have had to if he had ordered the materials
himself.
Oates’ failure to challenge the admissibility of the receipts for the
materials at trial requires the application of the more vigorous standard of palpable
error in reviewing his allegation of error. We cannot say that “a repugnant and
intolerable outcome, resulted” because of the introduction of the receipts. Id. at
606. The testimony of Tinsley and Greer alone was sufficient for the jury to find
guilt, and these receipts were not the linchpin of the case. We cannot say that the
-7-
result of this trial was so shocking or repugnant as to require reversal or that there
is a “probability of a different result or error so fundamental as to threaten a
defendant’s entitlement to due process of law.” Martin v. Commonwealth, 207
S.W.3d 1, 3 (Ky. 2006). Therefore, we find no palpable error in the introduction of
the receipts.
Witness Comment While Leaving the Stand
We will review this allegation of error for an abuse of discretion.
Shegog v. Commonwealth, 142 S.W.3d 101 (Ky. 2004). However, we must point
out that despite Oates’ arguments to the contrary, at trial he never requested
specific relief for what he alleges occurred when Mr. Greer left the witness stand.
Therefore, our review for an abuse of discretion is of a generous nature as we
could just have soundly determined that a palpable error review was warranted. As
we do not believe that he is entitled to relief under either standard of review, we
will review the trial court’s actions for an abuse of discretion.
Mr. Greer was called by the Commonwealth on rebuttal after Oates
testified in his own defense. Upon leaving the stand and walking past defense
counsel table where Oates sat, Mr. Greer apparently made a disparaging comment
to him. The comment was not caught by the courtroom microphones and thus we
only have counsel’s representations to the content of Mr. Greer’s utterance at the
bench. But, suffice it to say, Mr. Greer was not kindly disposed towards Oates and
-8-
expressed that opinion in strong language as an aside. An attorney, not involved in
the matter at hand, was present in the courtroom and was close to counsel table,
heard the utterance, and approached the bench with defense counsel to discuss the
matter with the trial court.
We have no reason to believe the utterance did not occur as defense
counsel and uninterested counsel stated. However, we cannot say that the
statement alone to the court, without asking for relief, was sufficient for a finding
that the trial court abused its discretion in not taking action—particularly
when defense counsel did not request any action be taken vis-à-vis the deliberating
jury. Now, on appeal, Oates argues that the jury should have been polled and, if
polling determined the remark was heard, admonished not to consider the remark if
they did hear it. However, no such request was made by counsel at the trial. When
the trial court asked counsel after the return of the verdict whether either side
wished the jury to be polled on the verdict, defense counsel declined and did not
bring up Greer’s utterance again.
We cannot say that the trial court abused its discretion in not taking
action on this matter, especially after defense counsel effectively waived the matter
by not requesting any further action be taken after the guilty verdict was returned.
Rather, we find the trial court was correct in not highlighting an unfavorable
utterance about the defendant before the verdict as the jury could have found Oates
-9-
not guilty, and mentioning the utterance before deliberation could have affected the
outcome, especially if the jury did not actually hear the aside. We find the trial
court acted properly and did not abuse its discretion.
CONCLUSION
Having reviewed the allegations of error, we find that the trial court
did not err and AFFIRM the conviction and sentence.
TAYLOR, JUDGE, CONCURS.
THOMPSON, K., JUDGE, CONCURS IN RESULT ONLY.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
Kayla D. Deatherage Daniel J. Cameron
Frankfort, Kentucky Attorney General of Kentucky
Lauren Lewis
Assistant Attorney General
Frankfort, Kentucky
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RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 20a0308p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
AUSTIN CHRISTIAN GRIFFITH, ┐
Plaintiff-Appellant/Cross-Appellee, │
│
│
v. │
> Nos. 19-5378/5438/5439/5440
│
FRANKLIN COUNTY, KENTUCKY and HUSTON WELLS, │
MICHAEL TURNER, FRED GOINS, DON STURGEON, │
SCOTTY TRACY, MARTI BOOTH, LAMBERT MOORE, and │
RICK ROGERS, in their individual capacities (19-5378 │
& 19-5439); SOUTHERN HEALTH PARTNERS, INC. and │
RONALD WALDRIDGE, MD, JANE BARTRAM, APRN, │
HEATHER SHERROW, RN, and SABINA TREVETTE, │
LPN, in their individual capacities (19-5378 & 19- │
5440); BRITTANY MUNDINE, RN, in her individual │
capacity (19-5378 & 19-5438), │
Defendants-Appellees/Cross-Appellants. │
┘
Appeal from the United States District Court
for the Eastern District of upayne@example.com.
No. 3:16-cv-00077—Gregory F. Van Tatenhove, District Judge.
Argued: January 28, 2020
Decided and Filed: September 21, 2020
Before: MERRITT, CLAY, and BUSH, Circuit Judges.
_________________
COUNSEL
ARGUED: Gregory A. Belzley, BELZLEY, BATHURST & BENTLEY, Prospect, Kentucky,
for Appellant/Cross-Appellee. D. Barry Stilz, KINKEAD & STILZ, PLLC, Lexington,
Kentucky, for Franklin County, Kentucky Appellees/Cross-Appellants. Robert A. Ott,
REMINGER, CO., L.P.A., Louisville, Kentucky, for Southern Health Partners Appellees/Cross-
Appellants. Margaret Jane Brannon, JACKSON KELLY PLLC, Lexington, Kentucky, for
Appellee/Cross-Appellant Mundine. ON BRIEF: Gregory A. Belzley, BELZLEY,
BATHURST & BENTLEY, Prospect, Kentucky, for Appellant/Cross-Appellee. D. Barry Stilz,
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 2
KINKEAD & STILZ, PLLC, Lexington, Kentucky, for Franklin County, Kentucky
Appellees/Cross-Appellants. Robert A. Ott, REMINGER, CO., L.P.A., Louisville, Kentucky,
for Southern Health Partners Appellees/Cross-Appellants. Margaret Jane Brannon, Robert F.
Duncan, JACKSON KELLY PLLC, Lexington, Kentucky, for Appellee/Cross-Appellant
Mundine.
BUSH, J., delivered the opinion of the court in which MERRITT, J., joined, and CLAY,
J., joined in part. CLAY, J. (pp. 39–55), delivered a separate opinion concurring in part and
dissenting in part.
_________________
OPINION
_________________
JOHN K. BUSH, Circuit Judge. This case involves a tragic turn of events during Austin
Griffith’s pretrial detention at Franklin County Regional Jail (“FCRJ”). Griffith was arrested on
November 8, 2015 after a failed robbery attempt, and he suffered a series of seizures six days
into his detention. He was sent to a local hospital, where he suffered a third seizure, and was
then airlifted to University of Kentucky Hospital. He later recovered but continues to suffer
headaches and other negative symptoms in the wake of this medical event.
Griffith brought suit under 42 U.S.C. § 1983 alleging that he received unconstitutionally
inadequate medical care during his detention. His claims were against Franklin County, the
county judge executive, the jailer and members of the Franklin County Fiscal Court (collectively,
the “Franklin County Defendants”), as well as against Southern Health Partners, Inc. (“SHP”), a
private medical company that provides medical services at the jail, and certain medical staff of
SHP (collectively, the “SHP Defendants”). In addition to his constitutional claims, the complaint
alleged state-law claims.
The district court granted summary judgment to Defendants on the constitutional claims,
finding that Griffith failed to establish that Defendants acted with deliberate indifference to his
serious medical needs. The district court then declined to exercise supplemental jurisdiction over
the state-law claims. Griffith appeals the grant of summary judgment. For the reasons that
follow, we AFFIRM the district court’s judgment.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 3
I. Background
A. Investigation and Arrest
Austin Griffith was arrested on November 8, 2015 for robbery and assault after he and
two other individuals unsuccessfully attempted to rob a third party with a baseball bat. The
intended victim was able to rebuff the attack, however. During the scuffle Griffith was struck in
the back with the bat, and he began vomiting. Griffith and his friends fled the scene, but
witnesses had identified the vehicle, which was registered to Griffith’s mother. Law
enforcement contacted Griffith’s mother, and she in turn called Griffith and instructed him to
return home to speak with the police. Griffith complied. Griffith was still vomiting when he
returned home and remained unwell during a two-hour meeting with law enforcement. Griffith
was arrested and brought to FCRJ, where, at 10:41 p.m., he was admitted and charged with
assault and burglary.
Griffith remained nauseated during intake procedures. At his deposition, Griffith
testified that he had been vomiting because of nerves, given that he had “never been in legal
trouble.” Austin Griffith Dep., R. 74-1 at PageID 1174–75. He was emotional when he arrived
at the jail and began crying while on the phone with his mother. Griffith received a standard
medical interview from Deputy Jailer Jessica Jenkins and filled out a medical questionnaire in
which he indicated that he “smokes marijuana a few times everyday” and that he had taken four
Xanax around 1 p.m. that day. Standard Medical Questions Form, R. 69-8 at PageID 773.
Deputy Jenkins believed that Griffith demonstrated a potential for alcohol or drug withdrawal
and accordingly recommended a referral for medical evaluation by the jail’s nursing staff.
Deputy Jenkins also identified Griffith as a moderate suicide risk. She classified him as a
moderate risk for forty-eight hours to “monitor [his] stability and give [him] time to be clean
from substances.” KJMHCN Episode Report, R. 71-5 at PageID 940. Griffith acknowledged
during this interview that he understood that he could request a health care provider at any time.
Deputy Jenkins discussed Griffith’s mental health status with clinician Kelley Ford at the
Kentucky Jail Mental Health Crisis Network to determine Griffith’s pertinent risk level. Ford
conducted a telephonic observation and recommended that FCRJ place Griffith on moderate
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 4
observation for forty-eight hours. The Incident Report indicated that he was designated for
observation because of the “seriousness of his charges and his emotional behavior while making
his phone call [with his mother].” Incident Report, R. 69-10, PageID 776. The order from the
Kentucky Jail Mental Health Crisis Network to conduct this monitoring did not indicate that he
was being held for observation because of potential drug withdrawal.
B. Detox Cell
Griffith was placed in a “detox” cell at 11:10 p.m. so he could be monitored for the first
forty-eight hours of his detention. During this time, FCRJ deputy jailers checked on his
condition approximately every twenty minutes, and observed Griffith vomiting seven times
between the time he was placed in the detox cell and 9 a.m. the next morning, when he was first
seen by medical staff. The deputy jailers testified that this amount of vomiting was not
uncommon for an inmate in detox. The deputy jailers recorded these observations in Griffith’s
observation log.
As indicated, Griffith had also been referred to the jail medical staff to be screened for
potential medical observation. FCRJ provides medical care by contracting with SHP. The SHP
medical staff at FCRJ falls into three general categories: a Medical Director, Dr. Robert
Waldridge; two Advanced Practice Registered Nurses (“APRNs”); and three nurses, two of
whom were Licensed Practical Nurses (“LPNs”) and one of whom was a Registered Nurse
(“RN”).
As Medical Director, Dr. Waldridge oversaw healthcare services at the jail during the
operative time period. SHP’s original contract required Dr. Waldridge to conduct weekly visits
to the jail, but he ultimately delegated this duty to APRNs Jane Bartram and Stacy Jensen. Dr.
Waldridge remained available for telephone consultation. APRNs Bartram and Jensen therefore
visited the facility once per week on a rotating basis, during which time they signed off on
medical charts and visited specific inmates who were identified by the daily nursing staff as
requiring additional care. Inmates who needed further attention from an APRN would be
designated on a weekly list by the daily nursing staff.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 5
The nursing staff in turn provided daily care. During the work week, LPN Sabina
Trivette and RN Heather Sherrow1 provided a combined sixteen hours of medical coverage per
day. Weekend care was provided by RN Brittany Mundine, who worked six hours on both
Saturdays and Sundays. Because RNs and LPNs cannot make diagnostic or treatment decisions,
SHP employs policies and protocols to guide the nurses’ daily operations. Many of these
policies and protocols require approval of an APRN or physician before an RN or LPN can take
a specific course of action; for example, the FCRJ’s protocol for “intoxication and withdrawal”
requires that a nurse call a physician or an APRN before the protocol is initiated. RNs and LPNs
thus have various options to respond to medical situations. They can provide treatment that is
within their standard of care (such as providing over-the-counter medication in certain
circumstances), place the patient on the weekly list (so the patient will be seen by an APRN on
the next visit), call an APRN to receive immediate guidance or initiate a certain protocol, or
directly send the patient to the hospital for emergency care. RN Sherrow and LPN Trivette
testified that they took the latter three steps with some regularity.
Griffith first interacted with SHP medical staff at 7:42 a.m. on Monday, November 9th—
after being in the facility for approximately eight hours—when Sherrow conducted a medical
screening. Sherrow testified that she checked on him at this time because of his Kentucky Jail
Mental Health Crisis Network designation as a moderate suicide risk.2 Sherrow met with
Griffith while he was on his way to “pre-trial” and completed a Suicide Prevention Screening
Guidelines Form. Sherrow indicated that Griffith was no longer showing signs of depression,
did not appear overly anxious, and was otherwise behaving normally. She also indicated that he
was experiencing nausea and vomiting. There is no indication that Sherrow did anything at this
time to address his nausea or take his vital signs. The form cross-referenced the observation log
recorded by the deputy officers indicating that Griffith had been vomiting regularly throughout
the night, but RN Sherrow testified that she never reviewed the observation log herself.
1
The Franklin County Defendants refer to Sherrow as an LPN, but cite a deposition by Jailer Rodgers, who
indicated that she was actually an RN. Sherrow also testified that she is an RN.
2
Similarly, RN Sherrow indicated on the form that Griffith had been placed on suicide watch by Kelly Ford
because of “charge related risk.” Suicide Preventions Guidelines Form, R. 69-19 at PageID 813.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 6
After returning from pre-trial, Griffith completed a medical request form, referred to as a
“sick call slip,” wherein he complained of stomach issues and vomiting. Trivette met with
Griffith at approximately 10:00 a.m. to conduct his medical intake screening and to respond to
his sick call slip. Trivette took Griffith’s vital signs and conducted a medical observation.
Trivette stated that Griffith had reported vomiting and diarrhea, that she reviewed his hydration,
and that his skin was warm, dry, “race appropriate & [that it had] good turgor,” Medical Staff
Receiving Screening Form, R. 69-21 at PageID 815. To address Griffith’s reports of vomiting
and diarrhea, Trivette provided Imodium and Mylanta. Griffith also indicated that he was not
able to urinate, so Trivette put him on a list to provide a urine sample the following day. Trivette
also indicated that Griffith reported some drug use—marijuana daily and Xanax on weekends—
but further marked that he did not appear to be under the influence of or withdrawing from drugs
or alcohol.
Later Monday afternoon, LPN Trivette again observed Griffith when he came for
medicine and recorded her observations on Griffith’s Suicide Prevention Form. At no time on
Monday did any nurse attempt to identify the source of Griffith’s vomiting, determine the
amount of the vomiting, or designate Griffith to be seen by an APRN.
Because Trivette did not believe Griffith was experiencing significant drug withdrawals,
she did not initiate the SHP drug withdrawal protocol, which would have required ongoing
medical observation. The FCRJ staff continued to observe Griffith every twenty minutes
pursuant to its own designation of him as a moderate risk, but those observation logs were never
reviewed by Sherrow or Trivette. Deputy jailers also observed Griffith throwing up six times
between his last medical evaluation on Monday afternoon and 5:00 a.m. Tuesday morning,
when he filled out a second sick slip. Within that window, he did not eat any lunch and ate only
30% of his dinner.
Griffith’s second sick slip—which he filled out, as mentioned above, on Tuesday,
September 10th—contained complaints about his nausea. Trivette responded to the complaint
and observed that he had warm and dry skin, a steady gait, soft abdomen, and good skin turgor.
She also reported that she reviewed Griffith’s hydration and that Griffith mentioned he was again
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 7
unable to urinate. Because of his continued complaints of vomiting and diarrhea, LPN Trivette
requested that Griffith be moved to a dry cell to further observe those symptoms.3 However, this
move never occurred because no dry cells were available.
Griffith was also seen on Tuesday by Sherrow at 7:50 a.m. and Trivette at 3:30 p.m. so
the nurses could provide him medicine. Some time, on either Tuesday or Wednesday, Griffith’s
mother attempted to visit him but was denied because she was told he was still in detox. Griffith
was observed vomiting two more times that evening.
On Wednesday, November 11th, Griffith was again seen by Sherrow and Trivette, and
they performed the urinalysis that had been ordered the day before. Griffith was still
complaining of vomiting, and Trivette provided him some Gatorade. Sherrow performed the
urine dip test and observed that his urine contained an abnormal amount of blood and protein.
According to Griffith’s liability expert, Madeline LaMarre, the volume of blood and protein in
the sample were signs that he had an acute kidney injury, and the standard of care required that
he be hospitalized. Sherrow did not send Griffith to the hospital, but instead added him to the list
to be seen by an APRN on the next weekly visit. Trivette testified that this approach was taken
because she and Sherrow “weren’t that alarmed by [their] evaluation [of the urine dip test], but
[they] did want it reviewed.” Trivette Dep., R. 75-7 at PageID 2316.
The urine sample was also a cloudy yellow, which Trivette thought could indicate the
beginning of an infection. Consequently, Trivette prescribed an antibiotic Cipro, even though
neither Sherrow nor Trivette was authorized to prescribe medicine without approval by an APRN
or a physician. According to Griffith, prescribing Cipro before notifying an APRN was a
violation of the nurses’ scope of care.
Wednesday was also the end of Griffith’s forty-eight-hour monitoring period. He was
therefore reevaluated by the Kentucky Jail Mental Health Crisis Network on that day. Griffith
was downgraded from “moderate” to “low” risk, and he was recommended for release from
observation into general population. The reevaluation form indicated that Griffith did not
3
A dry cell is a cell in which the plumbing has been cut off. This allows prison officials and medical staff
to observe bodily discharge.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 8
present a risk for drug withdrawal, but that jail staff reported he was going through detox and
was on detox observation. Griffith was then moved to a general population cell at 4:19 p.m. on
Wednesday, with “out of detox” given as the reason.
C. General Population
The parties’ accounts of the next three days vary significantly. There is very little
documentation of what transpired during this time because Griffith was no longer under
observation by FCRJ staff and because he did not fill out any sick slips after being transferred to
general population.
According to Defendants, November 11th–13th were uneventful. During that period,
Griffith also drank water, purchased and consumed snacks from the canteen, and did not
complete any sick call slips. Griffith does not dispute this, but states that he remained extremely
ill and was pale, sweating, and vomiting constantly in his cell. Two of his cellmates, Stephen
Fowler and Eugene Franklin, testified that they attempted to alert the guards to Griffith’s medical
condition by knocking on the cell window, but that the guards responded that they would remove
Fowler’s and Franklin’s TV privileges if they did not stop banging on the glass. Franklin further
testified that one of the guards, Officer Webb, ultimately responded to the prisoners’ requests for
help by telling them that Griffith had “been checked out” and that he was “fine.” Franklin Dep.,
R. 74-4 at PageID 1429. There is no evidence that Webb or any deputy jailer conveyed the
cellmates’ concerns to medical staff.
At 3:00 p.m. on Saturday, November 14th, Griffith suffered a seizure while on the top
bunk in his cell, causing him to strike his head on the wall and metal bunk. A cellmate alerted
Deputy Kristyn Drake to Griffith’s condition, and Deputy Drake radioed for LPN Mundine to
provide medical assistance. Griffith was purple in the face and breathing erratically, but began
to stabilize while waiting for Mundine to arrive. Mundine observed that Griffith had no visible
head injury, and Griffith denied that he was in any pain or that he had a history of seizures.
Griffith was escorted to booking for further examination.
Mundine called Sherrow to report the incident, and Sherrow advised Mundine to treat
Griffith for temperature, have him moved to the bottom bunk, monitor him, and complete a urine
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 9
test for drugs. Mundine tested him for drugs, which came back positive for THC only. Griffith
reported that he had been vomiting for days, so Mundine gave him Gatorade and prescribed an
anti-nausea drug, Phenergan. Mundine provided this prescription without first contacting an
APRN, which, according to Griffith, was inconsistent with SHP’s protocol and outside
Mundine’s scope of practice. Nurse Mundine did not notify a doctor or an APRN about
Griffith’s seizure.
After Griffith stabilized, he asked to return to his cell rather than stay in booking.
Although Mundine had planned to keep him in booking while she completed her medical pass,
she complied with his request and returned him to his cell with orders that he be moved to the
bottom bunk. Mundine completed her rounds as planned and returned to continue reading
Griffith’s charts. She then learned about his ongoing medical problems from the preceding days.
At 5:40 p.m., after being returned to his cell but before Mundine completed her review of
his files, Griffith experienced a second seizure. Mundine again responded, and she found
Griffith in a similar condition as after his first seizure—blue skin, erratic breathing, dilated
pupils, and mild disorientation. Mundine then sent Griffith to the local emergency room at
Franklin Regional Medical Center for observation and treatment. Sherrow was initially unhappy
with Mundine for hospitalizing Griffith without first consulting with her, but she later
acknowledged that Mundine did the right thing.
After being admitted to the local emergency room, Griffith was diagnosed with acute
renal failure. The medical records from the emergency room are unclear about the cause of the
initial illness and vomiting, the cause of the renal failure, and the cause of the seizures.4 His
discharge paperwork form states: “[Griffith’s] presentation is complex. Differential [diagnosis]
is broad.” FRMC Physician Record, R. 101-18 at PageID 3892. It then discusses potential
causes for his renal failure and seizures (including rhabdomyolysis, HUS, toxic ingestion,
serotonin syndrome, encephalitis, or meningitis) but does not reach any resolution.
4
None of Griffith’s medical records indicate that he informed medical staff that he had begun vomiting
after he was struck in the lower back by a baseball during the attempted robbery.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 10
Griffith suffered a third seizure at the local emergency room, and was airlifted to
University of Kentucky Hospital, where he received treatment and remained until November
22nd with diagnoses of acute renal failure, seizure disorder, posterior reversible encephalopathy
syndrome (“PRES”), hypomagnesemia, and anion gap metabolic acidosis. His discharge
paperwork states that the seizure was “[m]ost likely due to PRES,” which was in turn caused
either by “his acute renal failure or possibly intoxication.” UK Discharge Summary, R. 69-33 at
PageID 830. There is no other medical evidence about the cause of his seizure.
Griffith recovered from the incident but continues to suffer headaches, sleep deprivation,
and an increased vulnerability to kidney failure.
D. Procedural History
Griffith filed suit on October 3, 2016 asserting claims for deliberate indifference under
the Eighth and Fourteenth Amendments, negligence and gross negligence under Kentucky law,
and violations of Kentucky Revised Statutes § 441.045(3). The parties conducted discovery, and
each Defendant moved for summary judgment on all claims.
After the parties finished their initial briefing, the district court ordered supplemental
briefing on whether, in light of the Supreme Court’s decision in Kingsley v. Hendrickson, 135 S.
Ct. 2466 (2015), conditions-of-confinement claims brought under the Fourteenth Amendment
should be analyzed using an objective standard. The parties complied.
The district court then granted summary judgment to all Defendants. It held that
although the Sixth Circuit historically used the same inquiry to decide medical-care claims
brought by pretrial detainees as it did to decide medical-care claims brought by convicted
prisoners, Kingsley now mandated a more objective inquiry for claims brought by the former
category of plaintiffs. Griffith v. Franklin County, No. 3:16-cv-00077-GFVT-EBA, 2019 WL
1387691, at *3–5 (E.D. Ky. Mar. 27, 2019).
The court then considered Griffith’s claims. It found that the first prong of the relevant
inquiry was satisfied. Id. at *6. And then granted summary judgment in favor of the SHP
Defendants because Griffith (1) failed to demonstrate that his medical care was so insignificant
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 11
that it demonstrated deliberate indifference by medical staff; (2) failed to adequately advocate for
himself when in general population because he did not submit any medical slips requesting to be
seen by a nurse during this time; and (3) failed to introduce evidence demonstrating that he was
harmed by any delay in treatment. See id. at *7–8.
The district court similarly granted summary judgment on the claims against Doctor
Waldridge and Jailer Rodgers because there was no underlying constitutional violation by any
SHP nurses, and because Jailer Rodgers was entitled to rely on the assessment of medical
professionals. Id. at *8. It then granted summary judgment in favor of the county because there
was no underlying constitutional violation. Id. at *9. Finally, the court dismissed the state-law
claims because it declined to exercise pendent jurisdiction in the absence of another basis for
federal jurisdiction. Id.
Griffith timely appealed, and Defendants all filed cross appeals to challenge the district
court’s holding that the objective test identified in Kingsley applies to these claims.
II. Standard of Review
“We review a district court’s grant of summary judgment de novo.” Jackson v. City of
Cleveland, 925 F.3d 793, 806 (6th Cir. 2019) (internal quotations and citation omitted).
Summary judgment is appropriate when “no genuine dispute as to any material fact” exists and
the moving party “is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “A genuine
dispute of material fact exists ‘if the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.’” Peffer v. Stephens, 880 F.3d 256, 262 (6th Cir. 2018)
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). At the summary judgment
stage, “the evidence is construed and all reasonable inferences are drawn in favor of the
nonmoving party.” Burgess v. Fischer, 735 F.3d 462, 471 (6th Cir. 2013) (citing Hawkins v.
Anheuser-Busch, Inc., 517 F.3d 321, 332 (6th Cir. 2008)). But, “[w]hen opposing parties tell
two different stories, one of which is blatantly contradicted by the record, so that no reasonable
jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a
motion for summary judgment.” Scott v. Harris, 550 U.S. 372, 380 (2007).
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 12
III. The Right to Medical Care
The Supreme Court has long recognized that the government has a constitutional
obligation to provide medical care to those whom it detains. See, e.g., Estelle v. Gamble,
429 U.S. 97, 104 (1976); Rhinehart v. Scutt, 894 F.3d 721, 736–37 (6th Cir. 2018); Blackmore v.
Kalamazoo County, 390 F.3d 890, 895 (6th Cir. 2004). The Eighth and Fourteenth Amendments
are violated “when the State by the affirmative exercise of its power so restrains an individual’s
liberty that it renders him unable to care for himself, and at the same time fails to provide for his
basic human needs—e.g., food, clothing, shelter, medical care, and reasonable safety.”
DeShaney v. Winnebago Cty. Dep’t of Soc. Servs., 489 U.S. 189, 200 (1989); see Estelle,
429 U.S. at 103–04 (right to medical care under Eighth Amendment); Youngberg v. Romeo,
457 U.S. 307, 315–16 (1982) (medical care under Fourteenth Amendment for involuntarily
committed mental patient); see also City of Revere v. Mass. Gen. Hosp., 463 U.S. 239, 244
(1983) (explaining that following arrest and before adjudication of guilt, due process rights to
medical care “are at least as great as the Eighth Amendment protections available to a convicted
prisoner”).
“The Eighth Amendment’s prohibition on cruel and unusual punishment generally
provides the basis to assert a § 1983 claim of deliberate indifference to serious medical needs,
but where that claim is asserted on behalf of a pre-trial detainee, the Due Process Clause of the
Fourteenth Amendment is the proper starting point.” Winkler v. Madison County, 893 F.3d 877,
890 (6th Cir. 2018) (quoting Phillips v. Roane County, 534 F.3d 531, 539 (6th Cir. 2008)); see
Rouster v. County of Saginaw, 749 F.3d 437, 446 (6th Cir. 2014) (“The Eighth Amendment
protection against deliberate indifference extends to pretrial detainees in state prisons by
operation of the Due Process Clause of the Fourteenth Amendment.”); Blackmore, 390 upayne@example.com.
This court has consistently applied the same “deliberate indifference” framework to
Eighth-Amendment claims brought by prisoners as Fourteenth-Amendment claims brought by
pretrial detainees. See, e.g., Rinehart, 894 F.3d at 737 (Eighth Amendment); Blackmore, 390
F.3d at 895 (Fourteenth Amendment); see also Richmond v. Huq, 885 F.3d 928, 937 (6th Cir.
2018) (“This Court has historically analyzed Fourteenth Amendment pretrial detainee claims and
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 13
Eighth Amendment prisoner claims ‘under the same rubric.’” (quoting Villegas v. Metro. Gov’t
of Nashville, 709 F.3d 563, 568 (6th Cir. 2013))). This two-part framework contains both an
objective component—a “‘sufficiently serious’ medical need”—and a subjective component—a
“sufficiently culpable state of mind.” Blackmore, 390 F.3d at 895 (quoting Farmer v. Brennan,
511 U.S. 825, 834 (1994)).
A. Objective Component
“The objective component requires a plaintiff to prove that the alleged deprivation of
medical care was serious enough to violate the [Constitution].” Rhinehart, 894 upayne@example.com.
A sufficiently serious medical need “is ‘one that has been diagnosed by a physician as mandating
treatment or one that is so obvious that even a lay person would easily recognize the necessity
for a doctor’s attention.’” Harrison v. Ash, 539 F.3d 510, 518 (6th Cir. 2008) (quoting
Blackmore, 390 F.3d at 897). However, if the plaintiff has received medical attention and seeks
redress based on the inadequacy of the care, “[t]here must be ‘medical proof that the provided
treatment was not an adequate medical treatment of [the inmate’s] condition or pain.’”
Rhinehart, 894 F.3d at 737 (second alteration in original) (quoting Santiago v. Ringle, 734 F.3d
585, 591 (6th Cir. 2013)).
The district court found—and the parties do not dispute—that Griffith suffered from a
sufficiently serious medical condition. Griffith suffered two seizures at the jail and a third after
being transferred to a hospital, and he did not stabilize until he was airlifted to UK Hospital.
Moreover, Griffith has introduced medical evidence that his treatment was inadequate. The
expert report of Madeline LaMarre states:
SHP nurses also failed to notify Dr. Waldridge or Jane Bartram APRN of his
condition in accordance with SHP policy and procedures, treatment protocols, and
as required by their scope of nursing practice. As a result, Mr. Griffiths’ [sic]
condition deteriorated until he developed seizures and was transported emergently
to the hospital. By the time he was admitted to the hospital he was in critical
condition due to kidney failure and lactic acidosis.
Report of Madeline LaMarre, R. 101-26 at PageID 4067.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 14
The report also states that “Mr. Griffith’s urinalysis was grossly abnormal showing
proteinuria and hematuria which are indications of acute or chronic kidney injury, a potentially
serious medical condition which required immediate medical evaluation and treatment.” Id. at
PageID 4065. Thus, the only issue is whether Griffith satisfied the subjective component. As
indicated, the district court held that pretrial detainees such as Griffith can satisfy the subjective
component even without a showing of actual subjective knowledge.
B. Subjective Component
To satisfy the subjective component under the Eighth Amendment, “the detainee must
demonstrate that the defendant possessed a sufficiently culpable state of mind in denying
medical care.” Winkler, 893 F.3d at 891 (quoting Spears v. Ruth, 589 F.3d 249, 254 (6th Cir.
2009)). Under this standard, “the plaintiff must show that each defendant acted with a mental
state ‘equivalent to criminal recklessness.’” Rinehart, 894 F.3d at 738 (quoting Santiago,
734 F.3d at 591). “This showing requires proof that each defendant ‘subjectively perceived facts
from which to infer substantial risk to the prisoner, that he did in fact draw the inference, and that
he then disregarded that risk’ by failing to take reasonable measures to abate it.” Id. (quoting
Comstock v. McCrary, 273 F.3d 693, 703 (6th Cir. 2001)); see Richmond, 885 upayne@example.com.
To prove a defendant’s subjective knowledge, “[a] plaintiff may rely on circumstantial
evidence . . . : A jury is entitled to ‘conclude that a prison official knew of a substantial risk
from the very fact that the risk was obvious.’” Rhinehart, 894 F.3d at 738 (quoting Farmer,
511 U.S. at 842). But “[a] doctor’s errors in medical judgment or other negligent behavior do
not suffice to establish deliberate indifference.” Id. Accordingly, “[w]here the plaintiff has
received some medical treatment, ‘federal courts are generally reluctant to second guess medical
judgments and to constitutionalize claims which sound in state tort law.’” Burgess v. Fischer,
735 F.3d 462, 477 (6th Cir. 2013) (quoting Westlake v. Lucas, 537 F.2d 857, 860 n.5 (6th Cir.
1976)); see Rhinehart, 894 F.3d at 738 (“[W]hen a claimant challenges the adequacy of an
inmate’s treatment, ‘this Court is deferential to the judgments of medical professionals.’”
(quoting Richmond, 885 F.3d at 940). A plaintiff can nevertheless satisfy this standard by
demonstrating that a medical professional “consciously expos[ed] the patient to an excessive risk
of serious harm” in administering treatment, Richmond, 885 F.3d at 940 (quoting LeMarbe v.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 15
Wisneski, 266 F.3d 429, 439 (6th Cir. 2001)), or rendered medical care “so woefully inadequate
as to amount to no treatment at all,” id. (quoting Asplaugh v. McConnell, 643 F.3d 162, 169 (6th
Cir. 2011)).
The text of the Eighth Amendment mandates this showing of subjective knowledge for
claims brought by prisoners: “[t]he Eighth Amendment does not outlaw cruel and unusual
‘conditions’; it outlaws cruel and unusual ‘punishments.’” Farmer, 511 U.S. at 837. “[A]n
official’s failure to alleviate a significant risk that he should have perceived but did not, while no
cause for commendation, cannot . . . be condemned as the infliction of punishment.” Id. at 838;
see Rhinehart, 894 F.3d at 736 (explaining that the requirement to establish a subjective
component “all goes back to the text of the Eighth Amendment”).
The Fourteenth Amendment, of course, does not contain the word “punishment.” See
U.S. Const. amend. XIV. Moreover, the State does not detain individuals in order to impose
“punishment” prior to a formal adjudication of guilt; the State is permitted to detain such persons
before trial to “ensure[e] that persons accused of crimes are available for trials and, ultimately,
for service of their sentences,” Bell v. Wolfish, 441 U.S. 520, 534 (1979), or to further other
regulatory, nonpunitive interests, see United States v. Salerno, 481 U.S. 739, 746–47 (1987)
(upholding Bail Reform Act because it allowed detention as an exercise of “permissible
regulation” rather than “impermissible punishment”).
Indeed, pretrial detainees cannot be punished at all, and there is accordingly “no need, as
there might be in an Eighth Amendment case, to determine when punishment is
unconstitutional.” Kingsley, 135 S. Ct. at 2475. Accordingly, the “proper inquiry” to evaluate
the conditions of confinement for a pretrial detainee is “whether those conditions amount to
punishment.” Wolfish, 441 U.S. at 535. The Court has instructed that “[a]bsent a showing of an
expressed intent to punish on the part of detention facility officials, that determination generally
will turn on ‘whether an alternative purpose to which [the challenged condition] may rationally
be connected is assignable for it, and whether it appears excessive in relation to the alternative
purpose assigned [to it].’” Id. at 538–39 (third alteration in original) (quoting Kennedy v.
Mendoza-Martinez, 372 U.S. 144, 168–69 (1963)).
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 16
Despite these differences, we have nevertheless explained that it is appropriate to apply
the Eighth Amendment standard to pretrial detainees because applying the Wolfish test would
yield the same deliberate-indifference standard. See Roberts v. City of Troy, 773 F.2d 720, 724–
25 (6th Cir. 1985). In Roberts, we explained that the appropriate test under Wolfish is whether
the challenged condition is reasonably related to a legitimate government objective. Id. at 723
(citing Wolfish, 441 U.S. at 535). We reasoned that this test is applied to determine whether
prison officials are acting with improper punitive intent or pursuant to proper regulatory goals;
thus, we concluded that “Bell v. Wolfish requires an intent to punish.” Id. at 725. Based on that
straightforward logic—that the punitive intent required under Wolfish is the same “punishment”
governed by the Eighth Amendment—we adopted the deliberate-indifference test wholesale for
purposes of the Fourteenth Amendment. See id.; see also, e.g., Villegas v. Metropolitan Gov’t.
of Nashville, 709 F.3d 563, 568 (6th Cir. 2013) (citing Roberts, 773 F.2d at 723); Daniels v.
Woodside, 396 F.3d 730, 735 (6th Cir. 2005) (same); Blackmore, 390 F.3d at 895 (same).
Griffith argues, and the district court held, that this approach is no longer appropriate in
light of Kingsley. There, the Supreme Court held that a pretrial detainee could prevail on an
excessive-force claim under the Fourteenth Amendment without proving that the defendant was
subjectively aware that the force was excessive. See 135 S. Ct. at 2473. The Court divided the
state-of-mind inquiry for an excessive force claim into two separate components. The first
involves the state of mind as to the physical act that is alleged to be excessive. Id. at 2472. This
inquiry remains subjective; the use of force itself must be deliberate, as opposed to accidental or
negligent. Id. The second inquiry is the “state of mind with respect to the proper interpretation
of the force,” or in other words, whether that force was excessive. Id. The Court held that this
inquiry was objective, and a plaintiff need only show that the force used against him was
“objectively unreasonable.” Id. at 2473.
The Court also explained that an objective test is consistent with its Fourteenth
Amendment jurisprudence. The Court’s precedents in this area have held that pretrial detainees
cannot be subject to “the use of force that amounts to punishment.” Id. at 2473 (citing Graham
v. Connor, 490 U.S. 386, 395 n.10 (1989)). The Court explained that “punishment” includes,
clearly, an “expressed intent to punish.” Id. (discussing Wolfish, 441 U.S. at 540). But even
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 17
without an expressed intent to punish, “a pretrial detainee can . . . prevail by showing that the
[challenged] actions are not ‘rationally related to a legitimate nonpunitive governmental purpose’
or that the actions ‘appear excessive in relation to that purpose.’” Kingsley, 135 S. Ct. at 2473
(quoting Wolfish, 441 U.S. at 561). It therefore reasoned that the Fourteenth Amendment inquiry
in that context was already objective.
Following Kingsley, the circuits have divided on whether an objective test similarly
governs conditions-of-confinement claims brought under the Fourteenth Amendment. Compare
Miranda v. County of Lake, 900 F.3d 335, 351–52 (7th Cir. 2018) (applying objective test under
Kingsley); Darnell v. Pineiro, 849 F.3d 17 (2d Cir. 2017) (same); Castro v. County of Los
Angeles, 833 F.3d 1060 (9th Cir. 2016) (en banc) (same), with Whitney v. City of St. Louis, 887
F.3d 857 (8th Cir. 2018) (holding that Kingsley did not modify the standard for Fourteenth-
Amendment conditions-of-confinement claims); Nam Dang by and through Vina Dang v.
Sheriff, Seminole Cnty Florida, 871 F.3d 1272, 1279 n.2 (11th Cir. 2017) (same); Alderson v.
Concordia Parish Corr. Facility, 848 F.3d 415, 419 (5th Cir. 2019) (same). Our court has
generally stayed out of the fray. We have found it unnecessary to answer the question each time
we have confronted the issue, instead holding that the same result would obtain under either the
subjective test dictated by Farmer or by a purely objective test derived from Kingsley. See, e.g.,
Martin v. Warren County, 799 F. App’x 329, 338 n.4 (6th Cir. 2020) (leaving the Kingsley
question for another day because plaintiff could not prevail under either standard); Richmond,
885 F.3d at 938 n.3 (not addressing argument because it was not raised).
The district court adopted the test from the Second Circuit and held that Griffith could
prevail simply by showing that the defendants “recklessly failed to act with reasonable care to
mitigate the risk that the [medical] condition posed to the pretrial detainee even though the
defendant-official knew, or should have known, that the condition posed an excessive risk to
health or safety.” Griffith, 2019 WL 1387691, at *5 (quoting Bruno v. City of Schenectady,
727 F. App’x 717, 720 (2d Cir. 2018)). It nevertheless held that Griffith failed to satisfy this
lower requirement. See id. at *8.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 18
We agree that Griffith cannot prevail under either test, and therefore reserve the question
for another day.5 As we explain below, Griffith’s proof establishes, at most, a negligence claim
sounding in state tort law. And “[w]hatever Kingsley requires, it is more than negligence.”
Martin, 799 F. App’x at 338 n.4; see Kingsley, 135 S. Ct. at 2472 (“[L]iability for negligently
inflicted harm is categorically beneath the threshold of constitutional due process.” (emphasis in
original) (quoting County of Sacramento v. Lewis, 523 U.S. 833, 849 (1998))).6
Griffith argues that Defendants were deliberately indifferent because they failed to
adequately monitor him for drug withdrawal, allowing his vomiting to progress to the point of
dehydration. He argues that this dehydration led to his kidney failure which, in turn, caused his
seizures. Griffith contends that RN Sherrow, LPN Trivette, and LPN Mundine are individually
liable because they violated his constitutional rights. Further, Griffith contends that Dr.
Waldridge and Jailer Rogers are individually liable under a theory of supervisor liability.
Finally, Griffith asserts that SHP collectively and the County respectively are under a theory of
Monell liability. We address the subjective component individually for each defendant.
Rinehart, 894 F.3d at 738 (citing Garretson v. City of Madison Heights, 407 F.3d 789, 797 (6th
Cir. 2005)).
5
Respectfully, we disagree with the dissent’s suggestion that we are “ignor[ing] Supreme Court precedent,”
see Dissent at 8, by leaving the question for another day. See Martin, 799 F. App’x at 338 n.4; Richmond, 885 F.3d
at 938 n.3. Instead, we simply find that Griffith could not prevail under either standard. As the Supreme Court has
stated, “[i]f there is one doctrine more deeply rooted than any other in the process of constitutional adjudication, it is
that we ought not pass on questions of constitutionality . . . unless such adjudication is unavoidable.” Spector Motor
Serv. v. McLaughlin, 323 U.S. 101, 105 (1944); see Matal v. Tam, 137 S. Ct. 1744, 1755 (2017); Clinton v. Jones,
520 U.S. 681, 690 (1997) (“[W]e have often stressed the importance of avoiding the premature adjudication of
constitutional questions.”); Burton v. United States, 196 U.S. 283, 295 (1905) (“It is not the habit of the court to
decide questions of a constitutional nature unless absolutely necessary to a decision of the case.”); Torres v.
Precision Indus., Inc., 938 F.3d 752, 754 (6th Cir. 2019) (“[Federal courts will not] decide questions of a
constitutional nature unless absolutely necessary to a decision of the case or formulate a rule of constitutional law
broader than is required by the precise facts to which it is to be applied.” (internal quotation marks omitted)). It is
common practice to assume without deciding an issue—even a constitutional issue—that is unnecessary to the
judgment. See, e.g., Chavez-Meza v. United States, 138 S. Ct. 1959, 1965 (2018); Nat’l Aeronautics and Space
Admin. v. Nelson, 562 U.S. 134, 138 (2011).
6
It is clear that the constitutional standard must be something more than negligence. See, e.g., Martin,
799 F. App’x at 38 n.4. For that reason, we reject Griffith’s contention that even the Second Circuit’s standard the
district court adopted is itself too high a burden after Kingsley because it requires the plaintiff to prove objective
recklessness. Griffith essentially asks us to apply an ordinary negligence standard, and we decline to do so. See
Kingsley, 135 S. Ct. at 2472.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 19
IV. Discussion
Griffith asserts claims against two separate groups of defendants. First, he asserts claims
against the SHP defendants—the individual nurses that provided treatment, their supervisor, and
SHP collectively. Second, he asserts claims against Franklin County and Jailer Rogers under
theories of Monell and supervisory liability, respectively. We address each in turn.
A. SHP Defendants
We consider Griffith’s claims against the SHP Defendants in the following order: (1) RN
Sherrow; (2) LPN Trivette; (3) LPN Mundine; (4) Dr. Waldridge; and (5) SHP collectively.
1. Nurse Sherrow
Griffith argues that Sherrow was deliberately indifferent because she did not put Griffith
on the list to be seen by an APRN before Wednesday, when she performed the urine dip test. He
contends that at that time, Sherrow should have called Dr. Waldridge or an APRN rather than
place him on the weekly list, and he further faults Sherrow for not initiating SHP’s drug
withdrawal policy or nausea/vomiting protocol at some point during his detention. He also
asserts that Sherrow was deliberately indifferent when she removed him from detox monitoring
and allowed him to return to general population.
Sherrow interacted with Griffith three times during his period of detention, each of which
occurred while he was being held in the detox cell. She first interacted with him on Monday,
November 9th at 7:42 a.m. to complete the Suicide Prevention Screening Guidelines Form when
he was on his way to pretrial. She assessed his mental health and indicated that he was no longer
showing signs of depression or anxiety. She recorded that he was experiencing nausea, but
apparently did not take any action to follow up on his complaint. She indicated on the form that
the deputy jailers had been conducting monitoring, but she did not herself review the observation
log.
To be sure, it may have been preferable for Sherrow to have taken a more aggressive
course of action at this time in response to Griffith’s complaint of nausea and vomiting. Perhaps
initiating the detox protocol would have given the medical staff a better opportunity to monitor
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 20
Griffith’s condition and allow them to intervene before he suffered a seizure several days later.
But, when she conducted the screening, Sherrow made a decision that Griffith’s condition did
not warrant elevation to medical observation. Sherrow testified that regardless of whether jail
staff designates an inmate for observation, the medical staff makes an independent evaluation as
to whether to place the inmate on medical observation. Based on the signs and symptoms that
Griffith exhibited, Sherrow made the decision that further observation by medical was not
necessary. Specifically, she indicated that observation would be appropriate for an inmate who
was “hallucinat[ing], sweating, can’t [sic] get up.” Sherrow Dep., R. 75-5 at PageID 2013. She
further testified that she would make the decision to place an inmate in medical observation
based on their vital signs and other visible symptoms.
There is no evidence that Sherrow “knew, or should have known,” that Griffith was
suffering severe withdrawal symptoms that would lead to a series of seizures several days later
or otherwise “posed an excessive risk to health or safety.” Bruno v. City of Schenectady, 727 F.
App’x 717, 720 (2d Cir. 2018). To the contrary, Griffith has not introduced any evidence that
his vomiting was caused by drug withdrawal, or that he was suffering drug upayne@example.com.
Instead, he testified that he had been vomiting because of nerves.
Even putting aside the issue of drug withdrawal, there is no evidence that Sherrow knew
or should have known that Griffith’s vomiting evinced a substantial risk to his health. Griffith
now contends that his vomiting caused him to experience dehydration, which in turn led to his
seizures. But again, there is no medical evidence to support his theory. The UK Hospital
discharge report said “his seizure was most likely due to PRES . . . . The cause of PRES was
either due to his acute renal failure or possible intoxication.” UK Discharge Summary, R. 69-33.
And the FRMC report, the document upon which Griffith relies, does not say that his renal
failure was caused by dehydration. Instead, it says: “[Griffith’s] presentation is complex.
Differential [diagnosis] is broad.” FRMC Physician Record, R. 101-18 at PageID 3892. It then
discusses potential causes for his renal failure and seizures (including rhabdomyolysis, HUS,
toxic ingestion, serotonin syndrome, encephalitis, or meningitis) without reaching any resolution.
Moreover, Griffith’s expert testified that she did not think that dehydration was the primary
source of his kidney failure, and she declined to testify definitively that he suffered dehydration
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 21
(rather than simply being dehydrated). Accordingly, there is no evidence that Sherrow should
have known, based on Griffith’s report of vomiting on Monday, November 9th, that he was at
risk of dehydration leading to kidney failure and multiple seizures.7
There is also no evidence that Sherrow “recklessly failed to act with reasonable care to
mitigate [that] risk.” Bruno, 727 F. App’upayne@example.com. Based on her assessment, Sherrow did not
consider Griffith to be at a high risk requiring medical observation. She testified that this was in
part because of the signs and symptoms that she witnessed, and in part because Griffith or the
deputy jailers could fill out a sick call slip if his conditioned worsened. “[C]ourts are generally
reluctant to second guess the medical judgment of prison medical officials.” Rouster v. County
of Saginaw, 749 F.3d 437, 448 (6th Cir. 2014) (alteration in original) (quoting Jones v.
Muskegon County, 625 F.3d 935, 944 (6th Cir. 2010)). Even if Sherrow was negligent in failing
to take more aggressive steps in monitoring Griffith, that would only constitute a claim of
medical malpractice that lies beyond the Constitution’s reach. “When a prison doctor provides
treatment, albeit carelessly or inefficaciously, to a prisoner, he has not displayed a deliberate
indifference to the prisoner’s needs, but merely a degree of incompetence which does not rise to
the level of a constitutional violation.” Winkler v. Madison County, 893 F.3d 877, 891 (6th Cir.
2018) (quoting Comstock v. McCrary, 273 F.3d 693, 703 (6th Cir. 2001)).
For example, we have held that a prison doctor was not deliberately indifferent when he
misdiagnosed the plaintiff’s cancer and attempted to treat the condition with over-the-counter
medications. See Jones, 625 F.3d at 945–46. Similarly, we have twice held that prison medical
officials were not deliberately indifferent when they misdiagnosed two severe ulcers—both
of which were lethal—as symptoms of drug or alcohol withdrawal. See Winkler, 893 F.3d at
892–93; Rouster, 749 F.3d at 448–51. In Rouster, the prison nursing staff had misdiagnosed
7
For this reason, Griffith’s reliance on Clark-Murphy v. Foreback is unpersuasive. See 439 F.3d 280 (6th
Cir. 2006). There, the inmate died of dehydration after being held in an observation cell for multiple days in 90-
degree heat without access to water. He also repeatedly asked for water and was seen drinking out of the toilet. The
court held that collectively, this evidence was sufficient for a jury to infer that the jailers were subjectively aware
that he was suffering dehydration. See id. at 289–90. By contrast, Griffith’s reports of vomiting to Trivette and
Sherrow do not suggest that they knew, or should have known, that Griffith was at a risk of extreme dehydration that
would cause acute renal failure which would, in turn, lead to a seizure. As discussed, there is no evidence that
Griffith suffered dehydration. Moreover, the unrebutted evidence, discussed infra, demonstrates that Trivette took
several measures to monitor for the possibility of dehydration in response to his complaints of vomiting and
diarrhea.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 22
ulcers as potential alcohol withdrawal, even though the plaintiff was seen eating food off the
ground, drinking out of the toilet, and otherwise behaving erratically in ways not consistent with
alcohol withdrawal. See 749 upayne@example.com. But, we explained, the medical staff did not know he
had previously been treated for a perforated ulcer and therefore did not have the information
necessary to make the appropriate diagnosis. See id. at 448.8 Accordingly, the nursing staff did
not violate the Constitution by attempting to treat the plaintiff, even though the treatment
ultimately was unsuccessful. See id.; see also Winkler, 893 F.3d at 892–93 (“Although [the
defendant’s] assessment and treatment of [the detainee] might not represent the best of medical
practices, her actions do not suggest deliberate indifference to a known risk to [the detainee’s]
health.”).
When Sherrow interacted with Griffith on the morning of Monday, November 9th, she
completed the screening for potential suicide risk or mental health, which was the main reason
Griffith was held by jail staff for observation. She recorded that he no longer presented such a
risk based on her evaluation. She also noted his report of nausea, but she did not believe further
action was needed based on his symptoms at that time and on her judgment and experience. She
testified that Griffith would be able to submit a sick slip if he was experiencing further
symptoms, and he in fact did submit such a slip and was treated by Trivette later that day during
his full medical intake. The failure to take further steps based only on his statement that he was
experiencing vomiting and nausea cannot rise to a level above negligence.
8
The evidence suggests that, as in Rouster and Winkler, Griffith’s medical emergency arose from a latent
issue that existed prior to his detention. He was already vomiting before he was admitted to the jail, beginning when
he was struck with a baseball bat during the failed robbery. However, there is no evidence that Griffith informed the
medical staff that he had been in a violent confrontation and had been vomiting ever since. Thus, Griffith would
also not prevail on a theory that the medical staff failed to discover an underlying medical issue originating at the
burglary because the medical staff did not have the “critical piece of information” that he had been in a violent
incident. See Rouster, 749 upayne@example.com. The dissent suggests that we are overemphasizing the uncertainty about the
cause of Griffith’s medical condition. See Dissent at 13 n.2. We disagree because, even accepting the dissent’s
formulation, the test requires that we determine what a reasonable nurse “would have known, or should have
known,” about Griffith’s condition. See id. at 10. That medical professionals were unable to identify what
happened to Griffith, even with the benefit of hindsight, weighs strongly against a finding that a reasonable nurse
“would have known, or should have known,” the extent of his condition at the time of treatment. Accord LeMarbe,
266 F.3d at 436 (“[A] factfinder may conclude that a prison official knew of a substantial risk from the fact that the
risk was obvious.” (quoting Farmer, 511 U.S. at 842)).
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 23
Sherrow next saw Griffith the following day, Tuesday, November 10th, at 7:50 a.m. to
administer medicine. Sherrow could not recall the length of this interaction, but indicated that
based on her notes, Griffith did not make any other complaints at that time. There is no evidence
from this interaction that she was or should have been aware that Griffith was suffering from a
serious medical issue or that his condition had worsened.
Finally, Sherrow saw Griffith on Wednesday, November 11th, and provided treatment
along with Trivette. Sherrow performed the urine dip test while Trivette provided Imodium,
Mylanta, and Gatorade. Consistent with the instructions on the urine dip test, Sherrow added
Griffith to the list to be seen by an APRN on the next weekly visit to review the results of the
urine test.
Again, it would have been preferable if Sherrow had immediately elevated Griffith’s test
results to an APRN rather than putting him on a list to be seen on the next weekly visit. Perhaps
that was even what the standard of care dictated. But Griffith acknowledges that Sherrow did
administer the urine test, review the results, and elevate those results to the APRN. Moreover,
Sherrow witnessed Trivette provide over-the-counter treatment for his symptoms as well as
Gatorade. Sherrow also witnessed that Griffith was able to drink the Gatorade without vomiting
or other negative reaction, a fact that, in her experience, indicated that his medical status was
stable.
The decision to elevate Griffith’s results via the weekly list rather call an APRN directly
may be evidence that Sherrow underestimated the severity of Griffith’s condition, but it does not
demonstrate that she “recklessly failed to act with reasonable care to mitigate [the] risk,” Bruno,
727 F. App’x at 720, or that she should have known that his medical condition was declining.9
9
The dissent suggests that we are ignoring the “context” of Sherrow’s decision to elevate Griffith’s
condition to an APRN by placing him on the weekly list rather than immediately placing a phone call or transferring
him to the emergency room. See upayne@example.com. But it is the dissent that ignores the context of Griffith’s period of
detention by focusing exclusively on this single interaction between Griffith and Nurse Sherrow. This meeting
occurred only because Nurse Trivette was taking affirmative steps to monitor Griffith’s condition, not in response to
a sick call slip. Indeed, Griffith only requested medical attention on two occasions—on September 9th and
September 10th. The unrebutted evidence demonstrates that Nurse Sherrow and Nurse Trivette provided treatment
to Griffith on September 11th, and Griffith never indicated that the treatment provided was insufficient or that his
condition was not improving. Further, it is undisputed that Griffith’s condition was elevated to an APRN when he
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 24
There is also no evidence that by placing him on the weekly list rather than calling an APRN,
Sherrow “consciously expos[ed] [Griffith] to an excessive risk of serious harm,” Richmond v.
Huq, 885 F.3d 928, 940 (6th Cir. 2018) (quoting LeMarbe v. Wisneski, 266 F.3d 429, 439 (6th
Cir. 2001)), or provided care “so woefully inadequate as to amount to no treatment at all,” id.
(quoting Asplaugh v. McConnell, 643 F.3d 162, 169 (6th Cir. 2011)).
Griffith and the dissent rely on LeMarbe, but that reliance is misplaced. There, a surgeon
conducting exploratory surgery visually observed five liters of bile that had leaked into the
plaintiff’s abdomen. See 266 upayne@example.com. But the surgeon was unable to determine the source
of the leak and simply drained the fluid and closed the surgical incision. Id. Even though he
knew that bile was leaking into the plaintiff’s abdomen, knew that he had not identified or
remedied the leak, and knew the continuing bile leakage required immediate medical attention,
the surgeon discharged the plaintiff several days later without taking any further action. Id. We
held that this was evidence of deliberate indifference. See id. at 439.
That case is distinguishable in two important respects. The first involves what the
defendant knew or should have known. There, the surgeon personally saw five liters of bile that
had leaked into the plaintiff’s abdomen, which exposed a risk of harm that was “extreme and
obvious to anyone with a medical education and to most lay people.” Id. at 437. In contrast,
Nurse Sherrow saw the results of a urine test that indicated a potential abnormality. Even
Griffith’s expert report does not speak in the unequivocal language used in LeMarbe: Griffith’s
expert stated only that the urinalysis shows “a potentially serious medical condition which
required immediate medical evaluation and treatment.” Report of Madeline LaMarre, R. 101-26
at PageID 4065. Second, and more importantly, LeMarbe differs from this case because of the
evidence there indicating the surgeon “disregarded” the risk. LeMarbe, 266 upayne@example.com. The
surgeon in LeMarbe took no further steps to address the leaking bile; he simply ended surgery
and discharged the patient. Id. at 433. In contrast, Nurse Sherrow elevated Griffith’s condition
to an APRN by placing him on the weekly list. It is therefore undisputed that Griffith’s medical
condition was still under review and that he would have received further treatment. Even if
was placed on the weekly list. The dissent also ignores the three full days Griffith spent in general population,
during which time Nurse Sherrow had no information about his condition.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 25
Sherrow’s chosen approach was negligent, that is not enough to satisfy Griffith’s evidentiary
burdens, either under Farmer or Kingsley: “Whatever Kingsley requires, it is more than
negligence.” Martin v. Warren County, 799 F. App’x 329, 338 n.4 (6th Cir. 2020).
Finally, for two reasons there is no merit to Griffith’s contention that Sherrow’s
deliberate indifference is demonstrated because Griffith was released into the general population
or because she did not follow up with Griffith after that time. First, Griffith had been held for
observation by jail staff and the Kentucky Jail Mental Health Crisis Network, not medical staff.
Accordingly, the recommendation to release him into general population came not from the
nurses but from Clinician Thompson with the Kentucky Jail Mental Health Crisis Network.
There is no evidence to suggest that the nursing staff was responsible for releasing Griffith into
general population. Second, there is no evidence that the nursing staff should have affirmatively
followed up with Griffith for continued monitoring. To the contrary, the expectation was that
either Griffith or a deputy jailer would submit a sick slip if he needed further attention. There is
no evidence that the nurses should have expected that Griffith’s condition was deteriorating or
that they could have known that their attempts to treat his condition had been unsuccessful.
In sum, Sherrow had three brief interactions with Griffith over the course of his time in
detox. During that period, she conducted a urine sample that contained information about his
condition and elevated the test results to an APRN. Griffith made no effort to obtain further care
other than the two sick call slips he filled out in detox, and there is no evidence that Sherrow
would have expected that he had not responded to the treatment provided by herself and Trivette.
Sherrow’s treatment may have been suboptimal, but it does not rise to the level of a
constitutional violation. We therefore affirm the grant of summary judgment in favor of
Sherrow.
2. Nurse Trivette
Griffith argues that Trivette was deliberately indifferent because she did not call Dr.
Waldridge or an APRN when she saw Griffith on Monday and Tuesday and because she did not
implement SHP’s drug withdrawal policy or the nausea/vomiting protocol. Griffith further
contends that Trivette failed to make other arrangements after trying to place Griffith in a dry
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 26
cell and finding that none was available. He also asserts that Trivette demonstrated a culpable
mental state because she provided Immodium, Mylanta, and Cipro without first calling Dr.
Waldridge or an APRN. Finally, Griffith claims that Trivette was deliberately indifferent when
she allowed Griffith to be released into the general population and took no further efforts to
check on his status.
Griffith submitted his first sick call slip on Monday morning after Sherrow conducted his
initial screening. Trivette then met with Griffith at 10:00 a.m. both to conduct his medical intake
screening and to respond to the sick call slip. Trivette took Griffith’s vital signs, conducted the
medical observation, and noted that Griffith had reported nausea, diarrhea, and vomiting.
Because of this complaint, Trivette assessed Griffith’s hydration by performing a skin turgor test,
and she reported that his skin was “race appropriate & [had] good turgor,” and further noted that
she had reviewed Griffith’s hydration.
Griffith indicated that he was unable to urinate, so Trivette scheduled him to provide a
urine sample the following day. Further, Trivette assessed Griffith to determine whether he was
at risk to suffer withdrawal from drugs or alcohol and, based on his reported drug use, indicated
that he did not appear to be under the influence of or withdrawing from drugs or alcohol. She
testified that she made this determination because he was not experiencing more extreme
symptoms, such as “sweating, shaking delusions,” or extreme emotions such as anger. Trivette
Dep., R. 75-7 at PageID 2278. Based on that assessment, Trivette did not initiate a detox
protocol.
Although in hindsight we can say that it may have been preferable for Trivette to have
taken a more aggressive approach to monitoring, there is no evidence that she was aware, or
should have been aware, that Griffith was in need of immediate emergency medical care. See
Bruno, 727 F. App’upayne@example.com. There is no evidence that Trivette should have recognized, based
only on Griffith’s complaint of “stomach/vomiting,” inability to urinate, and reported daily use
of marijuana and weekend use of Xanax, that he would suffer significant withdrawal symptoms,
leading to dehydration and multiple seizures. As indicated, the medical evidence submitted by
Griffith still does not support the theory that he was suffering dehydration or that such
dehydration caused his seizures.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 27
Further, there is no dispute that Trivette provided treatment by administering over-the-
counter medications to ease Griffith’s symptoms in response to his complaints. See Rouster,
749 F.3d at 448–49 (emphasizing that the defendants “took appropriate steps” in response to
plaintiff’s condition, including provision of over-the-counter medications). “To be sure, medical
providers may ‘not escape liability if the evidence showed that [they] merely refused to verify
underlying facts that [they] strongly suspected to be true, or declined to confirm inferences of a
risk that [they] strongly suspected to exist.” Id. at 451 (quoting Farmer v. Brennan, 511 U.S.
825, 843 n.8 (1994)). However, the unrebutted evidence demonstrates that Trivette took steps to
identify the source of Griffith’s condition and attempted to treat it each time he complained of
continuing symptoms. Trivette was aware that Griffith was experiencing nausea and
gastrointestinal distress, and she took steps to alleviate his symptoms. She provided over-the-
counter treatment and scheduled a urine test to gather more information. She also checked his
vital signs, tested for dehydration, and assessed whether he presented a risk of drug withdrawal.
After providing over-the-counter medication and conducting his medical screen on
Monday, Trivette next saw Griffith later in the day to provide medication, seemingly without
incident.
Griffith filled out his second sick call slip the following day. Nurse Trivette responded to
his complaint and evaluated the condition of his skin, abdomen, gait, and skin turgor. Further,
Trivette again checked him for dehydration. Because he was still unable to urinate, Trivette
attempted to place him in a dry cell for observation but was unable to do so because no such cells
were available.
Griffith never filled out another sick slip, but Trivette saw Griffith once more the
following day to perform the urinalysis. This time, Griffith was able to urinate, so he provided a
sample for the dip test. He also complained of vomiting, and Trivette provided more over-the-
counter medications and Gatorade. She witnessed him drink the Gatorade without incident while
Sherrow administered the urine test. Trivette reviewed the sample and determined that, in her
experience, the sample indicated that there was a risk that Griffith was experiencing an infection,
so she prescribed Cipro to treat the infection. Further, Sherrow added Griffith to the list to be
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 28
seen by the APRN at the next visit. Trivette testified that the nurses took this approach because
they wanted the samples reviewed but were not alarmed by the test results.10
Trivette therefore responded to all of Griffith’s complaints, attempted to treat his
condition, and performed tests to identify its cause. Because of these steps, Griffith received a
urinalysis and his condition was elevated to an APRN by designating him on the weekly list.
Even if Sherrow’s “assessment and treatment of [Griffith] might not represent the best of
medical practices, her actions do not suggest deliberate indifference to a known risk to
[Griffith’s] health.” Winkler, 893 upayne@example.com.
Griffith also contends that Trivette’s mental culpability is demonstrated because she
failed to follow SHP’s internal policies by providing over-the-counter medication and Cipro
without contacting Dr. Waldridge and by failing to initiate the detox protocol. But we have held
that “the failure follow internal policies, without more, [does not] constitute deliberate
indifference.” Id. at 891–92 (citing Meier v. County of Presque Isle, 376 F. App’x 524, 529 (6th
Cir. 2010)). We therefore affirm the grant of summary judgment in favor of Trivette.
3. Nurse Mundine
Griffith argues that Mundine was deliberately indifferent because she failed to take
earlier action to elevate Griffith’s status to a doctor or an APRN. He argues that her deliberate
indifference is demonstrated because she failed to affirmatively look for him when he failed to
come and receive his medicine on Saturday morning. Further, he contends that she did not act
quickly enough in response to his first seizure, and that she acted improperly by calling RN
Sherrow for treatment advice rather than calling Dr. Waldridge or an APRN.
10
In reaching the contrary conclusion, the dissent fails to recognize that “[w]e address the subjective
component individually for each defendant.” Rinehart, 894 F.3d at 738 (citing Garretson, 407 F.3d at 797). The
dissent would hold Trivette to have acted with deliberate indifference simply “for the reasons applicable to
Sherrow,” Dissent at 14, even though both nurses testified that it was Sherrow, not Trivette, that performed the urine
test. The dissent fails to explain why Trivette demonstrated deliberate indifference by declining to override the
judgment of Sherrow (Trivette’s superior) and call an APRN directly to report the results of a test that she did not
herself perform. Trivette’s attempt to provide immediate treatment to Griffith by prescribing an antibiotic to treat a
perceived infection further weighs against a finding of deliberate indifference. By focusing only on the fact that this
treatment was incorrect, the dissent fails to accord the appropriate deference to the “medical judgment of prison
medical officials,” Rouster, 749 F.3d at 448 (quoting Jones, 625 F.3d at 944), and ignores our frequent admonition
against constitutionalizing claims for medical negligence, see Burgess, 735 upayne@example.com.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 29
Griffith’s arguments are without merit. As an initial matter, Griffith relies exclusively on
Blackmore v. Kalamazoo County, 390 F.3d 890 (6th Cir. 2004) for the proposition that Mundine
violated the Constitution by delaying Griffith’s treatment. However, that case only involved
whether a plaintiff could demonstrate a sufficiently serious medical need to satisfy the objective
component by introducing evidence of a delay in treatment of an obvious medical need even
without medical proof of harm caused by the delay. See Blackmore, 390 F.3d at 899–900. As
discussed, the objective component is not at issue here, so the case is wholly inapposite.
Moreover, we find no evidence that Mundine disregarded any risk to Griffith’s safety.
Mundine responded to Griffith’s first seizure and immediately conducted an examination of his
condition. She had him escorted to booking where she continued to examine him, tested him for
drugs, and listened to Griffith’s complaint that he had been vomiting. She responded to this
complaint by prescribing an anti-nausea drug and providing him Gatorade. After Griffith
stabilized and requested to go back to his cell, Mundine permitted him to go to his cell—
provided that he move to a lower bunk—while she continued reviewing his file. Mundine
testified that she was still reviewing his file at the time of Griffith’s second seizure, at which time
she immediately sent Griffith to the emergency room.
Griffith contends that Mundine did not follow SHP protocol with regard to seizures.
That, he maintains, amounts to deliberate indifference. But, because “the failure to follow
internal policies, without more, [does not] constitute deliberate indifference,” Winkler, 893 F.3d
at 891, Griffith’s arguments fail.11
Griffith points to no additional steps that Mundine should have taken and, because he
suffered a second seizure before she had the opportunity to finish reviewing his file, it is hard to
imagine what else she could have done. There is certainly nothing to suggest that she “acted
intentionally to impose the alleged condition, or recklessly failed to act with reasonable care to
mitigate the risk that the condition posed to the pretrial detainee even though the defendant-
11
The dissent acknowledges that the failure to follow internal procedures cannot alone establish deliberate
indifference, but points to little else in reaching its conclusion. See Dissent at 15–16. The undisputed facts
demonstrate that Mundine responded immediately to Griffith’s seizure, provided appropriate care, contacted
Sherrow to get further guidance, and had not even completed review of Griffith’s file at the time he suffered his
second seizure.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 30
official knew, or should have known, that the condition posed an excessive risk to health or
safety.” Bruno, 727 F. App’x at 720 (emphasis in original) (quoting Darnell 849 F.3d at 35).
We therefore affirm the grant of summary judgment in favor of Nurse Mundine.
4. Dr. Waldridge
Griffith argues that Dr. Waldridge is liable under a theory of supervisory liability.
Section 1983 liability of supervisory personnel “must be based on more than the right to control
employees. Section 1983 liability will not be imposed solely upon the basis of respondeat
superior. There must be a showing that the supervisor encouraged the specific incident of
misconduct or in some other way directly participated in it.” Doe v. Claiborne County, 103 F.3d
495, 511 (6th Cir. 1996) (quoting Bellamy v. Bradley, 729 F.2d 416, 421 (6th Cir. 1984)).
Accordingly, “a supervisory official’s failure to supervise, control or train the offending
individual is not actionable unless the supervisor ‘either encouraged the specific incident of
misconduct or in some other way directly participated in it. At a minimum a plaintiff must show
that the official at least implicitly authorized, approved, or knowingly acquiesced in the
unconstitutional conduct of the offending officers.’” Shehee v. Luttrell, 199 F.3d 295, 300 (6th
Cir. 1999) (quoting Hays v. Jefferson County, 668 F.2d 869, 874 (6th Cir. 1999)); see Ashcroft v.
Iqbal, 556 U.S. 662, 677 (2009) (“[E]ach Government official . . . is only liable for his or her
own misconduct.”).
Moreover, a plaintiff cannot establish a claim for supervisory liability without
establishing an underlying constitutional violation by a supervised employee. See, e.g.,
McQueen v. Beecher Cmty. Schools, 433 F.3d 460, 470 (6th Cir. 2006) (“Because [the plaintiff]
also has not pointed to unconstitutional conduct by any other employee supervised by [the
individual defendant], it necessarily follows that the supervisory liability claim . . . must fail.”).
Because Griffith has failed to establish that his constitutional rights were violated by Sherrow,
Trivette, or Mundine, his claim against Dr. Waldridge fails as well. See id. We therefore affirm
the grant of summary judgment in favor of Dr. Waldridge.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 31
5. SHP Collectively
Griffith also argues that SHP collectively can be held liable on a theory of Monell
liability. He argues that this court has already held that SHP’s training procedures were
inadequate in Shadrick v. Hopkins County, 805 F.3d 724 (6th Cir. 2015).
Griffith’s argument is unconvincing because he has made no effort to develop any facts
about the training that the SHP nurses in this case received. Indeed, Griffith’s expert disclaimed
any opinion on the adequacy of SHP’s training. In Shadrick, the plaintiff was sentenced to a
short term of imprisonment and informed medical staff that he had a severe staph infection. The
medical staff failed to provide meaningful treatment, put him in a segregation cell but failed to
rigorously monitor him, and he died within four days. Id. at 732–33. The court held that SHP
had failed to train its nurses because “[t]here [was] no indication in the record . . . that S[H]P
designed and implemented any type of ongoing training program for its LPN nurses.” Id. at 740.
The plaintiff had provided expert testimony who “opined that SHP failed to provide adequate
training and supervision to the LPN nurses.” Id. at 741. This court has explained that
“[e]specially in the context of a failure to train claim, expert testimony may prove the sole
available avenue to plaintiffs to call into question the adequacy of . . . training procedures.”
Russo v. City of Cincinnati, 953 F.2d 1036, 1047 (6th Cir. 1992) (quoted in Shadrick, 805 F.3d at
741). Griffith points to no expert testimony or any other evidence to support his failure-to-train
claim against SHP.12 We therefore affirm the grant of summary judgment in favor of SHP.
B. Franklin County Defendants
Griffith also asserts claims against (1) Jailer Rogers under a theory of supervisory
liability, and (2) Franklin County under a theory of Monell liability.
12
We have also held in a similar context that a healthcare provider cannot be liable under such a Monell
theory without proving an underlying constitutional violation by an employee. See Rouster, 749 F.3d at 453–54.
We did not impose such a requirement in Shadrick, but we need not determine which approach is correct because
Griffith cannot prevail even under Shadrick given that he has failed to introduce any evidence of training
deficiencies by SHP.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 32
1. Jailer Rogers
Griffith brings a claim against Jailer Rogers under a supervisory liability theory. As
discussed, Griffith cannot prevail under this theory without establishing an underlying
constitutional violation by a supervised employee. Because Griffith has failed to establish
Griffith’s constitutional rights were violated by any deputy jailer or other prison official, the
claim against Jailer Rogers fails as well. See, e.g., McQueen, 433 upayne@example.com. We therefore
affirm the grant of summary judgment in favor of Jailer Rogers.
2. Franklin County
Griffith argues that Franklin County is liable because the County (1) had unofficial detox
policy of deliberate indifference to detoxing detainees; and (2) failed to train deputy jailers on
EMS policies.
“A municipality may not be held liable under § 1983 on a respondeat superior theory—in
other words, ‘solely because it employs a tortfeasor.’” D’Ambrosio v. Marino, 747 F.3d 378,
388–89 (6th Cir. 2014) (quoting Monell v. Dep’t of Soc. Servs., 436 U.S. 658, 691 (1978)).
Instead, a plaintiff must show that “through its deliberate conduct, the municipality was the
‘moving force’ behind the injury alleged.” Alman v. Reed, 703 F.3d 887, 903 (6th Cir. 2013)
(quoting Bd. of Cty. Comm’rs v. Brown, 520 U.S. 397, 404 (1997)). A plaintiff does this by
showing that the municipality had a “policy or custom” that caused the violation of her rights.
Monell, 436 U.S. at 694. And when a plaintiff seeks to hold a municipality liable on the basis of
a facially lawful municipal action which led an employee to violate her rights, she “must
demonstrate that the municipal action was taken with ‘deliberate indifference’ as to its known or
obvious consequences.” Brown, 520 U.S. at 407.
There are four methods of proving a municipality’s illegal policy or custom. The
plaintiff may prove “(1) the existence of an illegal official policy or legislative enactment; (2)
that an official with final decision making authority ratified illegal actions; (3) the existence of a
policy of inadequate training or supervision; or (4) the existence of a custom of tolerance or
acquiescence of federal rights violations.” Burgess v. Fischer, 735 F.3d 462, 478 (6th Cir. 2013)
(citing Thomas v. City of Chattanooga, 398 F.3d 426, 429 (6th Cir. 2005)).
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 33
As the Franklin County Defendants point out, Griffith does not articulate any theory of an
underlying constitutional violation for which the county could be liable. The County cannot be
liable unless Griffith establishes an underlying constitutional violation. See, e.g., Baker v. City of
Trenton, 936 F.3d 523, 535 (6th Cir. 2019) (“[W]here there has been no showing of individual
constitutional violations . . . there can be no municipal liability.”); Winkler 893 F.3d at 899–902;
Watkins v. City of Battle Creek, 273 F.3d 682, 687 (6th Cir. 2001) (citing City of Los Angeles v.
Heller, 475 U.S. 796, 799 (1986)).
Griffith appears to argue that even if no individual municipal employee violated his
constitutional rights, the collective actions of the municipality still rose to the level of a
constitutional violation. He relies on Garcia v. Salt Lake County, 768 F.2d 303 (10th Cir. 1985),
which held that the municipality could be liable for a policy of failing to adequately monitor an
unconscious inmate who had ingested a lethal amount of narcotics. The Tenth Circuit explained
that even if no individual employee was deliberately indifferent to his medical condition, “the
cumulative effect of what they did pursuant to the practice or policy of the County could be a
violation . . . by the County.” Id. at 309–10. This circuit has expressed a willingness to entertain
this theory of municipal liability. See Winkler, 893 F.3d at 899–902 (assuming without deciding
that municipality may be liable even if no individual employee violated plaintiff’s constitutional
rights); Epps v. Lauderdale County, 45 F. App’x 332, 334–35 (6th Cir. 2002) (Cole, J.,
concurring) (“A given constitutional violation may be attributable to a municipality’s acts alone
and not to those of its employees—as when a government actor in good faith follows a faulty
municipal policy.”); see also North v. Cuyuahoga County, 754 F. App’x 380, 390–93 (6th Cir.
2018) (assuming Garcia’s theory of municipal liability applies but finding plaintiffs failed to
demonstrate a constitutional violation).
However, even under that theory, the plaintiff still must establish that he suffered a
constitutional violation. See Epps, 45 F. App’x at 334 (Cole, J., concurring); North, 754 F.
App’x at 391 (“[B]ecause North has not demonstrated that any individual jail employee violated
his Eighth Amendment right to adequate medical care by acting with deliberate indifference, he
must show that the municipality itself, through its acts, policies, or customs, violated his Eighth
Amendment rights by manifesting deliberate indifference to his serious medical needs.”).
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 34
As explained, Griffith has failed to do so here, so we need not decide whether such a theory of
municipal liability may be viable.
a. Detox Policy
Griffith contends that the deputy jailers should have reported Griffith’s vomiting to the
SHP nurses in addition to monitoring his condition every twenty minutes. He asserts that the
deputy jailers’ practice in attending to detoxing detainees—in particular, monitoring only for
“living, breathing flesh”—was “in complete derogation of the language of and duties imposed by
the Jail’s written EMS policy.” But, as we have already explained, the violation of an internal
policy does not establish a constitutional violation. See, e.g., Winkler, 893 F.3d at 891–92; Smith
v. Freland, 954 F.2d 343, 347–48 (6th Cir. 1992).
Moreover, although the deputy jailer’s testimony that they were monitoring for “living,
breathing flesh” is troubling, the deputy jailers actually monitored Griffith’s condition every
twenty minutes throughout his forty-eight hours in detox and took detailed notes of his condition
each time—including whether he had eaten and how much, whether he was experiencing
physical symptoms such as vomiting, and whether he had spoken to the deputy jailer. The
deputy jailers testified that they would alert medical staff if a detainee was vomiting excessively
or if their condition was deteriorating. Furthermore, Griffith was seen by the medical staff at
least two times a day during his stay in detox, and the deputy jailers were entitled to rely on the
assessments made by medical professionals. See, e.g., Winkler, 893 F.3d at 901 (“[I]t is not
unconstitutional for municipalities and their employees to rely on medical judgments made by
private medical professionals responsible for prisoner care[.]” (cleaned up)); Spears v. Ruth, 589
F.3d 249, 255 (6th Cir. 2009) (explaining that officer was entitled to rely on assessments of
medical professionals).
Griffith does not contest that the deputy jailers promptly alerted the medical staff every
time he submitted a sick call slip. To be sure, there does appear to have been a
miscommunication with regard to Griffith’s status—medical staff indicated that he did not seem
to be at risk for drug withdrawal while the deputy jailers and prison staff seemed to believe he
was being held in a segregated cell because he was detoxing. But there is no evidence that this
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 35
was anything other than a single miscommunication in an otherwise functioning system. See
North, 754 F. App’x at 392 (“While imperfect, the apparent problems . . . seem to consist of ‘one
or two missteps’ rather than the kind of widespread, gross deficiencies that would support a
finding of deliberate indifference.” (quoting Daniel v. Cook County, 833 F.3d 728, 734–35 (7th
Cir. 2016)).
Griffith also could not prevail on a theory that the constitutional violation arose out of
the deputy jailers’ inaction. For such a claim, he would need to prove
(1) “a clear and persistent” pattern of unconstitutional conduct by [County]
employees; (2) the municipality’s “notice or constructive notice” of the
unconstitutional conduct; (3) the municipality’s “tacit approval of the
unconstitutional conduct, such that [its] deliberate indifference in [its] failure to
act can be said to amount to an official policy of inaction”; and (4) that the policy
of inaction was the “moving force” of the constitutional deprivation . . . .
Winkler, 893 F.3d at 902 (second and third alterations in original) (citing D’Ambrosio,
747 F.3d at 387–88).
Griffith “discusses only [his own] treatment, and therefore cannot establish that the
County had a custom of deliberate indifference to the serious healthcare needs of all the inmates
[detained at FCRJ].” Id.; see also Thomas, 398 F.3d at 433 (“[A plaintiff] cannot rely solely on a
single instance to infer a policy of deliberate indifference.”).
b. Failure to Train
Griffith also argues that the County is liable on a failure-to-train theory. Specifically, he
argues that the deputy jailers were not trained on EMS policy or on how to handle detainees
suffering withdrawal.
“In order to show that a municipality is liable for a failure to train its employees, a
plaintiff must establish that: 1) the City’s training program was inadequate for the tasks that
officers must perform; 2) the inadequacy was the result of the City’s deliberate indifference; and
3) the inadequacy was closely related to or actually caused the injury.” Jackson v. City of
Cleveland, 925 F.3d 793, 834 (6th Cir. 2019) (cleaned up) (quoting Ciminillo v. Streicher,
434 F.3d 461, 469 (6th Cir. 2006)).
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 36
Griffith contends that the training program was inadequate because deputy jailers did not
receive training on EMS policy. However, this claim is belied by the record. As the Franklin
County Defendants point out, Jailer Rodgers and the deputy jailers all testified that they did
receive training on EMS policy, including on drug addiction, including an eighty-hour training
upon hiring and an additional annual training period of either sixteen or twenty-four hours.
To be sure, many of the deputy jailers were unclear about their obligations under the
EMS policy, and many acknowledged that they were not sure what to do in the event of a
severely detoxing inmate.13 But, “[e]ven assuming that [Griffith] could show that the County’s
training of its jail personnel was inadequate, []he presented no proof to show that this inadequacy
resulted from deliberate indifference.” Winkler, 893 upayne@example.com. To establish that the
inadequate training resulted from deliberate indifference, a plaintiff must establish (1) “prior
instances of unconstitutional conduct demonstrating that the County . . . was clearly on notice
that the training in this particular area was deficient and likely to cause injury,” Plinton v. County
of Summit, 540 F.3d 459, 464 (6th Cir. 2008) (quoting Fisher v. Harden, 398 F.3d 837, 849 (6th
Cir. 2005)), or (2) “a single violation of federal rights, accompanied by a showing that a
municipality has failed to train its employees to handle recurring situations presenting an obvious
potential for such a violation,” id. (quoting Brown, 520 U.S. at 409).
Griffith does not claim a widespread pattern of similar conduct and instead argues that
the County’s deliberate indifference to its failure to train can be established under a single-
violation theory. The Supreme Court explained in City of Canton v. Harris that, in some
circumstances, “it may happen that in light of the duties assigned to specific officers or
employees the need for more or different training is so obvious, and the inadequacy so likely to
result in the violation of constitutional rights, that the policymakers of the city can reasonably be
13
For example, Deputy Jailer Fultz testified that he did not know whether the EMS policy identifies drug
and alcohol withdrawal as a medical emergency, and that he did not know what the policy said he should do if he
observed someone going through drug or alcohol withdrawal. R. 76-8 at PageID 2702. And Deputy Jailer Carender
testified that she was not aware of the signs and symptoms of somebody going through detox that indicate that the
person’s condition may be life-threatening. R. 76-9 at PageID 2718. Deputy Jailer Culbertson testified that he did
not receive any instruction about at what point he needs to report to medical personnel regarding the extent of
someone’s vomiting, and he stated that “I just use my judgment. If they’re not lying in a puddle of vomit on the
floor and they’re not able to get up and move around, then yes, I would notify somebody.” R. 76-11 at PageID
2794.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 37
said to have been deliberately indifferent to the need.” 489 U.S. 378, 390 (1989). Griffith
therefore argues that this is such a case because FCRJ is in a county with a serious drug problem,
yet the jailers were unaware of what they were required to do in the event of a severely detoxing
detainee.
We find this argument unpersuasive because Griffith failed to demonstrate that Franklin
County failed to train its employees “to handle a recurring situation presenting an obvious
potential for [the constitutional violation at issue].” Plinton, 540 upayne@example.com. As indicated, the
evidence demonstrates that the County does provide training on EMS policy, and Griffith has
introduced no evidence of any additional training that would been necessary beyond the initial
eighty-hour training and subsequent annual training on EMS policy. See Winkler, 893 F.3d at
903 (“But [the plaintiff] does not identify what other medical training she believes that the jail
personnel should have received. Nor does she explain how the quality of the medical training
provided put the County on notice of the likelihood that jail personnel would respond
inadequately to an inmate’s medical emergency.”). Moreover, although Griffith contends that
his injury was the result of a “recurring situation”—withdrawal from drugs—there is no evidence
that he was vomiting from drug withdrawal or that his vomiting led to his seizure.
Griffith also cannot demonstrate that any training inadequacy “was closely related to or
actually caused [his] injury.” Jackson, 925 upayne@example.com. At its core, his claim is that jailers
should have been better trained as to when they needed to alert medical professionals about a
particular inmate’s deteriorating condition. However, Griffith saw medical staff multiple times
per day during his time in detox, and the Deputy Jailers testified that this is the standard practice
during detox. Because nothing in the record suggests that the deputy jailers would have done
anything other than report to Nurses Trivette and Sherrow, both of whom evaluated Griffith
multiple times during his detox period, he cannot demonstrate causation.
For these reasons, we find Griffith’s reliance on Stefan v. Olson unconvincing. See No.
1:10 CV 671, 2011 WL 2621251 (N.D. Ohio July 5, 2011), aff’d, 497 F. App’x 568 (6th Cir.
2012). In that case, the detainee informed jail staff that he would experience severe alcohol
withdrawal and would suffer seizures when withdrawal symptoms began. See id. at *4–6. His
condition soon deteriorated, but jail staff failed to adequately monitor his condition and did not
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 38
inform medical staff when he began experiencing withdrawal symptoms. See id. The district
court found that the County was liable for failure to train because the evidence demonstrated that
the jail staff “spent no money on training its corrections officers” on drug and alcohol
withdrawal, even though it had been identified as an area in which there was a “gap in care.” See
id. at *17 (alteration in original); see also Rice v. Montgomery County, No. 5:14-181-KCC, 2016
WL 2596035 (E.D. Ky. May 5, 2016) (finding County liable for failure to train when jail
employees received no training on drug withdrawal). Moreover, the on-duty nurse in Stefan
testified that she would have entered the inmate’s cell to begin administering withdrawal
protocol if she had known he had vomited. See 2011 WL 2621251 at *16. In contrast, Nurses
Sherrow and Trivette were aware that Griffith was vomiting, and there is no evidence that
hearing the duplicative information from deputy jailers would have led them to come to a
different conclusion. Indeed, Sherrow testified that she would have made the same treatment
decisions even if the deputy jailers had reported Griffith’s vomiting. We therefore affirm the
grant of summary judgment in favor of Franklin County.
V. Conclusion
Accordingly, we AFFIRM the district court’s judgment.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 39
______________________________________________________
CONCURRING IN PART AND DISSENTING IN PART
______________________________________________________
CLAY, Circuit Judge, concurring in part and dissenting in part. I write separately to
explain how I would decide the Fourteenth Amendment deliberate indifference claim presented
by this appeal and why I would hold that Nurses Sherrow, Trivette, and Mundine were not
entitled to summary judgment.
Plaintiff Austin Griffith appeals the district court’s order granting summary judgment for
all Defendants. After several days of inadequate medical care at Franklin County Regional Jail
(“FCRJ”), Griffith, a pretrial detainee, displayed signs of kidney damage and suffered a seizure.
Rather than rush Griffith to a hospital or immediately contact a physician, nurses at FCRJ
continued to treat him and returned him to his cell. He was only sent to a hospital after suffering
a second seizure a few hours after the first. Griffith now faces lifelong complications from his
experience in FCRJ.
Under the standard for deliberate indifference claims brought by pretrial detainees which,
in light of recent Supreme Court precedent, only requires an objective showing of deliberate
indifference, a reasonable jury could find that the nurses were deliberately indifferent to
Griffith’s serious medical needs. Because the majority reaches the opposite conclusion, and
declines to adopt the correct standard, I respectfully dissent.
BACKGROUND
Austin Griffith was arrested on November 8, 2015, on suspicion of robbery and assault.
During the attempted robbery, Griffith was struck in the back with a baseball bat by the alleged
victim. He was brought to FCRJ for pretrial detention on November 8, 2015. Upon arrival,
Griffith admitted to recent drug use and was emotionally distraught. He was subsequently
placed in a detox cell because he was deemed a moderate suicide risk and was showing possible
signs of drug withdrawal. In the detox cell, he was monitored approximately every twenty
minutes until he was transferred to the general prison population on November 11, 2015.
Griffith reported to his jailers and medical staff that he was suffering from nausea, and he was
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 40
observed vomiting seven times during his first night in the jail. On November 9, 2015, Heather
Sherrow, a licensed practical nurse employed by Southern Health Partners (“SHP”) (the medical
service company that FCRJ contracts with to provide healthcare in the jail) examined Griffith
and determined that his emotional state had stabilized and that he no longer appeared to be a
suicide risk.
Later on November 9th, Sabina Trivette, another SHP licensed practical nurse, examined
Griffith. He reiterated his complaints of vomiting and also noted that he was experiencing
diarrhea. Trivette determined that his appearance did not suggest that he was suffering from
drug withdrawal. She treated his vomiting and diarrhea with Imodium and Mylanta.
Neither nurse sought to determine the cause of Griffith’s vomiting, place Griffith on the
list to be seen by an advanced practice registered nurse (“APRN”), who came once a week to the
facility to review and sign-off on the nurses’ charts and treatment plans, or to immediately
contact an APRN or the supervising doctor at FCRJ, Dr. Waldridge, to discuss Griffith’s case.
The following day, November 10th, Trivette once again examined Griffith but did no
more than review hydration information with Griffith and told him to inform staff if his
condition changed. On November 11th, Trivette and Sherrow performed a urinalysis in response
to complaints by Griffith of difficulty urinating. They interpreted the results as indicating an
infection. At that point, Sherrow placed Griffith on a list of patients to be seen by the APRN.
Trivette also prescribed Cipro, an antibiotic, for Griffith’s speculative infection. According to
Griffith’s medical expert, the nurses lacked the authority to prescribe such medications. (See R.
74-6, LaMarre Dep. Tr., PageID # 1515 (explaining that in Kentucky neither a licensed practical
nurse (such as Trivette) or a registered nurse (such as Sherrow) may prescribe medications).)
And SHP protocol indicates than an APRN or physician should have been contacted before the
Cipro was given to Griffith.
On November 14, 2015, Griffith experienced his first seizure. SHP registered nurse
Brittany Mundine examined him and then spoke with Sherrow about how to proceed.
Ultimately, Mundine decided to send Griffith back to his cell with instructions to move to the
bottom bunk. She also did not notify an APRN or Dr. Waldridge about the seizure. Less than
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 41
three hours later, Griffith suffered a second seizure. At that point Mundine sent Griffith to a
local emergency room, where he experienced a third seizure. He was subsequently airlifted to
the University of Kentucky (“UK”) Hospital, to be treated in the intensive care unit.
He remained in the hospital until November 22, 2015, and was diagnosed with acute
renal failure, seizure disorder, posterior reversible encephalopathy syndrome (“PRES”),
hypomagnesemia, and anion gap metabolic acidosis. The UK records indicate that his seizures
were likely caused by PRES, which in turn was likely caused by his acute renal failure or
intoxication. Moreover, “extensive infectious workup” to determine the cause of his seizure was
“negative.” (R. 69-33, UK Discharge Summary, PageID # 830.) Although Griffith has
recovered from his seizures, he remains prone to headaches, fatigue, dehydration, and kidney
failure.
Griffith initiated this lawsuit under 42 U.S.C. § 1983, against Franklin County, Jailer
Rick Rogers (who oversees FCRJ), and several Franklin County officials (the “Franklin County
Defendants”), SHP, Dr. Ronald Waldridge, Jane Bartram (one of the APRN’s assigned to FCRJ),
and the three nurses who treated Griffith: Heather Sherrow, Sabina Trivette, and Brittany
Mundine. He alleged that the various Defendants were deliberately indifferent to his objective
medical needs, in violation of his due process rights. He also claimed that the individually
named medical providers and SHP were negligent and grossly negligent in rendering care.
All Defendants moved for summary judgment and Nurse Mundine and the Franklin
County Defendants asserted that Griffith’s claims against them were barred by the doctrine of
qualified immunity. The district court granted summary judgment for all Defendants and
dismissed the state law claims without prejudice. Griffith timely appealed the district court’s
order, and the Defendants filed timely cross-appeals with respect to the district court’s adoption
of a wholly objective standard for deliberate indifference.
DISCUSSION
We review the district court’s order granting summary judgment de novo. Wathen v.
Gen. Elec. Co., 115 F.3d 400, 403 (6th Cir. 1997). To be entitled to summary judgment, the
movant must have demonstrated that there was no genuine dispute as to any material fact and
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 42
that the movant was entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A “material”
fact is one that “might affect the outcome of the suit under the governing law,” and a genuine
issue exists “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, 248 (1986). We examine the
facts in the light most favorable to the nonmoving party and draw all reasonable inferences
therefrom in her favor. See Lindsay v. Yates, 578 F.3d 407, 414 (6th Cir. 2009). Importantly, a
court must not “weigh the evidence and determine the truth of the matter” in deciding a motion
for summary judgment. Anderson, 477 U.S. at 249.
1. Standard for Deliberate Indifference
Both prisoners and pretrial detainees may sue jail officials and medical providers for
deliberate indifference to their serious medical needs. Prisoners rely on the Eight Amendment,
while pretrial detainees allege their claims under the Fourteenth Amendment. Compare Estelle
v. Gamble, 429 U.S. 97, 104 (1976) (holding that “deliberate indifference to serious medical
needs of prisoners constitutes the ‘unnecessary and wanton infliction of pain’ . . . proscribed by
the Eighth Amendment” (citation omitted)), with Blackmore v. Kalamazoo County, 390 F.3d
890, 895 (6th Cir. 2004) (“Pretrial detainees are analogously protected under the Due Process
Clause of the Fourteenth Amendment.”).
Our current test for deliberate indifference under the Fourteenth Amendment mirrors
similar claims brought under the Eighth Amendment and contains an objective and subjective
component. The objective component requires that the deprivation of medical treatment be
“sufficiently serious.” Wilson v. Seiter, 501 U.S. 294, 298 (1991); accord Farmer v. Brennan,
511 U.S. 825, 834 (1994). We have held that a “sufficiently serious” medical need is a medical
condition that has been “diagnosed by a physician as mandating treatment or one that is so
obvious that even a lay person would easily recognize the necessity for a doctor’s attention.”
Santiago v. Ringle, 734 F.3d 585, 590 (6th Cir. 2013) (citing Harrison v. Ash, 539 F.3d 510, 518
(6th Cir. 2008)).
The subjective component requires a prisoner to demonstrate that prison officials had a
“sufficiently culpable state of mind” in denying them medical care. Wilson, 501 U.S. at 297.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 43
An official must have known of and disregarded “an excessive risk to inmate health or safety.”
Farmer, 511 U.S. at 837. The plaintiff must demonstrate that the official was “aware of facts
from which the inference could be drawn that a substantial risk of serious harm exists” and the
official “must [have] also draw[n] the inference.” Id.
Recent Supreme Court precedent, however, demands that our standard governing
Fourteenth Amendment deliberate indifference claims must be altered. In Kingsley v.
Hendrickson, 576 U.S. 389 (2015), the Supreme Court examined the standard applicable to an
excessive force claim brought under the Fourteenth Amendment by pretrial detainees. Relevant
to the present case is the Court’s examination of “the defendant’s state of mind with respect to
the proper interpretation of the force . . . that the defendant deliberately (not accidentally or
negligently) used.” Id. at 396 (emphasis in original). This refers to whether the officer
subjectively thought they were using excessive force. The Court held that “a pretrial detainee
must show only that the force purposely or knowingly used against him was objectively
unreasonable.” Id. at 396–97. Thus, regardless of whether the officer thought they were using
excessive force, if they objectively were, then the claim against them may proceed.
The Supreme Court did not explicitly indicate in Kingsley whether this objective test
applies in other Fourteenth Amendment contexts, such as deliberate indifference to a pretrial
detainee’s serious medical needs. We have repeatedly avoided the issue. See Richmond v. Huq,
885 F.3d 928, 938 n.3 (6th Cir. 2018) (observing that “[t]his Court has not yet considered
whether Kingsley . . . abrogates the subjective intent requirement of a Fourteenth Amendment
deliberate indifference claim”); Martin v. Warren County, 799 F. App’x 329, 337 n.4 (6th Cir.
2020) (reserving the “Kingsley question for another day” because the plaintiff’s underlying claim
was meritless).
I would hold that Kingsley is applicable to the deliberate indifference context.
Subjectivity has no place in a Fourteenth Amendment deliberate indifference claim because
pretrial detainees are in a categorically different situation than convicted prisoners. Deliberate
indifference claims brought under the Eighth Amendment require an inquiry into the official’s
state-of-mind because “an official’s failure to alleviate a significant risk that he should have
perceived but did not, while no cause for commendation, cannot under our cases be condemned
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 44
as the infliction of punishment.” Farmer, 511 U.S. at 838. However, Kingsley affirmed that
“pretrial detainees (unlike convicted prisoners) cannot be upayne@example.com.” 576 U.S. at 400.
Moreover, the Supreme Court in Kingsley largely relied on its earlier decision in Bell v.
Wolfish, which held that pretrial detainees may prevail in Fourteenth Amendment challenges to
conditions of their confinement even in the absence of an intent to punish, “by showing that the
actions are not ‘rationally related to a legitimate nonpunitive governmental purpose’ or that the
actions ‘appear excessive in relation to that purpose.’” Id. at 398 (quoting Bell v. Wolfish, 441
U.S. 520, 561 (1979)). The Court held that this is an objective standard and proceeded to adapt it
to the context of excessive force. See id. at 397–99. This indicates that Kingsley simply
acknowledged the breadth of a pretrial detainee’s Fourteenth Amendment rights and affirmed
that an objective inquiry into a defendant’s state of mind is the appropriate standard by which to
judge a defendant’s intentional conduct. See also Gordon v. County of Orange, 888 F.3d 1118,
1124–25 (9th Cir. 2018) (applying the objective standard to a pretrial detainee’s claim against
defendants for deliberate indifference to his serious medical needs); Darnell v. Pineiro, 849 F.3d
17, 35 (2d Cir. 2017) (conditions of confinement claim); Bruno v. City of Schenectady, 727 F.
App’x 717, 720–21 (2d Cir. 2018) (deliberate indifference to serious medical needs); Miranda v.
County of Lake, 900 F.3d 335, 351–52 (7th Cir. 2018) (same as Bruno).1
The majority acknowledges much of this but declines to give effect to this recent
Supreme Court precedent because it would not change the outcome in the present case. Whether
or not this is correct, we may not simply ignore Supreme Court precedent. See Salmi v. Sec’y of
Health & Hum. Servs., 774 F.2d 685, 689 (6th Cir. 1985) (holding that prior published opinions
of this Court remain binding on future panels “unless an inconsistent decision of the United
States Supreme Court requires modification of the decision or this Court sitting en banc
overrules the prior decision”). Kingsley is an inconsistent decision issued by the Supreme Court,
and it requires modification of our Fourteenth Amendment deliberate indifference standard.
1
Although three other circuits have declined to apply Kingsley beyond the excessive force context, those
decisions are unpersuasive. The Eighth Circuit asserted without analysis that Kingsley is limited to excessive force
claims, Whitney v. City of St. Louis, 887 F.3d 857, 860 n.4 (8th Cir. 2018), while the Fifth and Eleventh Circuits
mechanically applied a circuit rule, Nam Dang by & through Vina Dang v. Sheriff, Seminole Cnty. Fla., 871 F.3d
1272, 1279 n.2 (11th Cir. 2017); Alderson v. Concordia Par. Corr. Facility, 848 F.3d 415, 419 n.4 (5th Cir. 2017).
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 45
Therefore, I would hold that a pretrial detainee must only prove that a defendant-official acted
intentionally to ignore their serious medical need or recklessly failed to act with reasonable care
to mitigate the risk that the serious medical need posed to the pretrial detainee, even though a
reasonable official in the defendant’s position would have known, or should have known, that the
serious medical need posed an excessive risk to the pretrial detainee’s health or safety.
This change in our law necessitates a slight adjustment to the nomenclature we use in
deliberate indifference cases. Kingsley had no impact on the “objective” component of a
deliberate indifference claim—a pretrial detainee must still prove that their medical need was
sufficiently serious. However, the “subjective” component is no longer subjective. I will instead
refer to this component as the “mens rea” component because it still requires a court to
determine whether the defendant acted with a sufficiently culpable state of mind to establish
deliberate indifference. To do so, we must examine the recklessness of a defendant from the
perspective of a reasonable official.
2. Griffith’s Deliberate Indifference Claim
Griffith has satisfied the objective component of a deliberate indifference claim because
he plainly suffered from a sufficiently serious medical condition in FCRJ. He experienced two
seizures, was diagnosed with severe kidney damage, had a third seizure while in the hospital, and
was only stabilized after being life-flighted to another hospital. See Santiago, 734 F.3d at 590
(holding that a “sufficiently serious” medical need is a medical condition that has been
“diagnosed by a physician as mandating treatment or one that is so obvious that even a lay
person would easily recognize the necessity for a doctor’s attention” (citing Harrison, 539 F.3d
at 518)). Griffith’s objectively serious medical need was both diagnosed and obvious. However,
because Griffith received some treatment in the jail but maintains that his serious medical need
was exacerbated by a delay in further treatment—i.e., treatment by an APRN/physician or
transportation to a hospital—he needed to present verifying medical evidence. See id. Griffith
has done so by presenting deposition testimony from an expert, Madeline LaMarre, who has a
master’s degree in nursing, attesting to the detrimental effect of the delay in his treatment. The
majority recognizes these points and correctly holds that the objective prong has been met in this
case.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 46
However, the majority mistakenly concludes that Griffith has not met the mens rea prong
with respect to Nurses Trivette, Sherrow, and Mundine. It holds that regardless of which
standard we apply—either our obsolete subjective standard or the objective test in light of
Kingsley—Griffith cannot prevail because his proof only demonstrates that the nurses were
negligent in their care of him. But under the correct, objective standard for deliberate
indifference, Griffith has demonstrated several genuine issues of material fact which preclude
judgment as a matter of law for the nurses. A reasonable jury could find that each nurse
recklessly failed to act with reasonable care to mitigate the risk that Griffith’s serious medical
need posed to him, even though a reasonable nurse in Defendants’ positions would have known,
or should have known, that Griffith’s serious medical need posed an excessive risk to his health
and safety.
i. Heather Sherrow
The district court found that because Nurse Sherrow monitored Griffith and responded to
his complaints, he was not “ignored or recklessly endangered” by her failure to provide more
treatment. (R. 118, Dist. Ct. Order, PageID # 4240.) Additionally, his condition “remained
relatively stable,” in that his vital signs were within normal ranges when evaluated by the nurses,
so this is not a case where an escalation in care was required to meet the requirements of the
Fourteenth Amendment. (Id.)
It is clear that Nurse Sherrow did not entirely ignore Griffith. However, at the summary
judgment stage, it cannot be said that as a matter of law that she did not recklessly fail to act to
address his serious medical need from the perspective of a reasonable nurse in her position.
Griffith has identified genuine issues of material fact which, if resolved in his favor, would
permit a reasonable jury to find for him on his deliberate indifference claim.
For example, Sherrow knew the results of Griffith’s urinalysis and recognized that he
needed an APRN’s attention. However, rather than expedite this process, she placed him on the
list to be seen the following week. She also did not contact the APRN or Dr. Waldridge for
instructions, nor did she transport Griffith to the local hospital for further testing and treatment.
This arguably constituted a reckless failure to act because Sherrow was aware of a substantial
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 47
risk to Griffith’s health but failed to take reasonable steps to address it. Griffith’s medical expert
attested that the urinalysis results indicated that he “had large amounts of blood and protein in his
urine, which is indicative of kidney injury.” (R. 74-6, LaMarre Dep. Tr., PageID # 1517.)
Instead of ensuring that a medical provider with treatment authority, like an APRN or Dr.
Waldridge, promptly evaluated Griffith’s troubling test result, “the nurses took it upon
themselves to treat him for a kidney infection” by prescribing an antibiotic. (Id.) But “[h]e had
no evidence of an infection, for which he was treated,” (Id.), a finding Griffith’s University of
Kentucky Hospital records confirm. LaMarre concluded that Griffith “should have been sent to
the hospital no later than [November] 11th when he had the abnormal urinalysis, but the nurses
should have contacted a medical provider much sooner than that.” (Id. at 1536.)
Sherrow’s response to Griffith’s objectively alarming urinalysis exemplifies a genuine
issue of material fact that should have been settled by a factfinder rather than the district court on
a motion for summary judgment. Sherrow obviously perceived a substantial risk to Griffith’s
health—she did not object to Trivette’s decision to prescribe Cipro and realized Griffith needed
to be seen by an APRN. See Horn by Parks v. Madison Cnty. Fiscal Ct., 22 F.3d 653, 660 (6th
Cir. 1994) (“Knowledge of the asserted serious needs or of circumstances clearly indicating the
existence of such needs, is essential to a finding of deliberate indifference.”). However, Sherrow
disregarded the manifest risk to Griffith by not promptly contacting a supervising medical
provider or sending Griffith to a hospital for further evaluation of his kidney damage and any
appropriate treatment.
Under our case law, Sherrow had a duty “to do more than simply provide some treatment
to a prisoner who has serious medical needs;” rather, she was obligated to “provide medical
treatment to the patient without consciously exposing the patient to an excessive risk of serious
harm.” LeMarbe v. Wisneski, 266 F.3d 429, 439 (6th Cir. 2001). In LeMarbe, we found that a
prisoner had met the subjective component because his doctor was aware of a bile leak in his
abdomen that “if not stopped immediately, would expose [the prisoner] to a substantial risk of
serious harm; and that [the doctor] disregarded such risk by failing to take the actions he knew
were necessary to avoid the potentially serious harm to [the prisoner].” Id. at 440. Under the
objective mens rea standard we must apply in the present case, a reasonable jury could find that
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 48
Sherrow failed to take actions she should have known were required to safeguard Griffith.2 She
could have expedited his evaluation by the APRN, contacted the APRN or Dr. Waldridge
directly, or exercised her own discretion to transport Griffith to a local hospital. Sherrow
testified in her deposition that she had previously contacted the APRNs assigned to FCRJ with
medical questions and stated that she and Trivette could contact a physician or the APRN’s prior
to their weekly rounds if “there’s something we need to call them on.” (R. 75-5, Sherrow Dep.
Tr., PageID # 2049.) Additionally, according to SHP’s internal policies, medical service
providers “do not need a physician’s order to send patient to the local emergency room (ER) if
the patient is in a life-threatening situation.” (R. 92, SHP Policies, PageID # 3557.)
LaMarre’s testimony substantiates Griffith’s dispute as to whether a reasonable nurse
would have known that Griffith’s urinalysis necessitated hospitalization, or at least evaluation by
a medical provider with a wider scope of practice, and whether a reasonable nurse would have
known that the risk was sufficiently great to Griffith’s health that such actions were necessary.
(See R. 74-6, LaMarre Dep. Tr., PageID # 1536 (stating that Griffith “should have been sent to
the hospital no later than the 11th when he had the abnormal urinalysis, but the nurses should
have contacted a medical provider much sooner than that”).)
The majority both ignores the context of Sherrow’s decision to not contact an APRN or
physician after Griffith’s urinalysis, and it minimizes the probative value of Griffith’s expert
evidence.3 Instead, it focuses on the initial days of Griffith’s treatment and finds that Sherrow’s
failure to place Griffith under medical observation or activate the jail’s detox protocol because of
2
The majority attempts to distinguish LeMarbe by mischaracterizing the results of Griffith’s urinalysis as
indicating a “potential abnormality” that did not pose an obvious risk of harm. See upayne@example.com. LaMarre’s
testimony provides that the urinalysis “showed he had large amounts of blood and protein in his urine, which is
indicative of kidney injury.” (R. 74-6, LaMarre Dep. Tr., PageID # 1517.) The results of the urinalysis coupled
with Griffith’s constant vomiting “should have sent off red flags” to Sherrow of a substantial risk of serious harm to
Griffith if she failed to take necessary actions. (Id.)
3
The majority improperly gives importance to Griffith’s limited efforts to self-advocate regarding his need
for medical treatment and fails to acknowledge the reality of his condition over the relevant time period. See
Majority at 23 n.9. In the days before Griffith was rushed to the hospital for emergency treatment, Griffith was in
dire medical straits, vomiting constantly and coming in and out of consciousness as a result of acute renal failure.
He was in no position to request medical treatment or insist that his current treatment was insufficient. Given his
condition, Griffith’s inability to more vigorously advocate for medical treatment should bear no relevance to
whether Sherrow knew or should have known that his urinalysis results necessitated hospitalization or further
treatment or whether Sherrow’s failure to act was a reckless disregard of a substantial risk of serious harm to him.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 49
his nausea and vomiting was not objectively unreasonable. The majority takes Griffith’s medical
records in a light much more favorable to Defendants and ignores LaMarre’s testimony in
finding that failing to call an APRN after the urinalysis results came back did not consciously
expose Griffith to an excessive risk of serious harm.
However, Plaintiff has provided verifying medical evidence suggesting that Sherrow’s
decisions did expose him to an unacceptable level of harm. If indeed Sherrow should have
known that Griffith’s urinalysis results indicated that he was suffering from kidney damage,
whatever the cause, then her failure to contact a physician or transport Griffith to the local
emergency room constitutes deliberate indifference to his serious medical needs.4 Sherrow’s
decision not to do so arguably evinces a clear apprehension of the substantial risk to Griffith and
the reckless disregard thereof. Griffith’s eventual seizures and airlift to the UK hospital are a
testament to how serious the risk Griffith faced proved to be. A jury should weigh this evidence
and determine whether her actions rise to the level of deliberate indifference.
ii. Sabina Trivette
Nurse Trivette exceeded the scope of her practice and arguably disregarded a substantial
risk to Griffith by attempting to treat his kidney ailment on her own. She administered the
urinalysis along with Sherrow and decided that all Griffith needed was an antibiotic for a
possible infection. This was an incorrect diagnosis and treatment. Trivette asserted that the
reason she and Sherrow did not call the APRN after receiving the results was because “we
weren’t that alarmed by our evaluation.” (R. 75-7, Trivette Dep. Tr., PageID # 2316.) However,
LaMarre’s deposition testimony disputes this assessment. LaMarre stated that the test results
indicated kidney damage and the need for hospitalization to properly diagnosis and address his
condition. For the reasons applicable to Sherrow, a finder of fact should determine whether
Trivette’s failure to either contact an APRN or physician or transport Griffith to a hospital also
4
The majority overemphasizes the uncertainty in the record as to what caused Griffith’s kidney damage and
seizures. Whether they were a result of trauma from being hit by a bat during the botched robbery attempt,
dehydration, drug withdrawal, an underlying condition, or a combination thereof, is ultimately irrelevant. What
matters—and what Griffith’s expert stresses—is that Sherrow was aware of the alarming urinalysis results but failed
to take the only proper remedial actions: contacting an APRN or physician immediately or transporting Griffith to a
hospital for adequate treatment.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 50
constitutes deliberate indifference. See LeMarbe, 266 F.3d at 439 (holding that prison medical
providers must “do more than simply provide some treatment to a prisoner who has serious
medical needs,” and must “provide medical treatment to the patient without consciously
exposing the patient to an excessive risk of serious harm”).
iii. Brittany Mundine
Nurse Mundine, like the other nurses, failed to contact Dr. Waldridge or an APRN after
coming in contact with Griffith. Instead, she only consulted Nurse Sherrow, who was already
failing to properly act. Mundine also reviewed Griffith’s chart after his first seizure and so was
fully aware of his worsening symptoms and urine test. Critically, she saw Griffith after his first
seizure—another moment, besides the urinalysis results, when his symptoms significantly
escalated and the intervention of a physician was required. In fact, Mundine violated SHP’s
seizure protocol by failing to notify a doctor or, at the very least, an APRN after Griffith’s first
seizure. The protocol directs a nurse to “[n]otify a physician/provider prior to initiating [the]
protocol.” (R. 92, SHP Policies, PageID # 3625.) While it was perhaps appropriate for Mundine
to first treat Griffith’s seizure, as she was able to respond immediately, it was a clear violation
of this protocol to not contact an APRN or Dr. Waldridge after Griffith stabilized.
As Dr. Waldridge himself testified in reference to the nurses’ collective failure to contact him
after the first seizure occurred, “[i]f I knew, in fact, that they didn’t contact the APRNs, and I
knew, in fact, that they didn’t call me even after initiating the protocol, then that doesn’t follow
the protocol.” (R. 75-2, Waldridge Dep. Tr., PageID # 1704.) That is precisely what occurred.
The failure to comply with a prison policy is not a “per se constitutional violation,”
Winkler v. Madison County, 893 F.3d 877, 892–93 (6th Cir. 2018) (quoting Meier v. County of
Presque Isle, 376 F. App’x 524, 529 (6th Cir. 2010)). However, it is relevant to assessing
whether the official was aware of facts from which an inference of a sufficiently serious medical
need could be drawn and whether the official drew that inference. See Harris v. City of
Circleville, 583 F.3d 356, 369 (6th Cir. 2009) (holding that the defendants’ failure to “comply
with stated jail policy” supported the conclusion that plaintiff had “submitted sufficient evidence
for a jury to conclude that the [defendants] were aware of facts from which the inference could
be drawn that a sufficiently serious medical need existed, and that they drew that inference”).
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 51
Under the objective mens rea test, this means that the failure to follow a jail policy is relevant to
whether a reasonable official would have recognized the risk to the plaintiff.
In the present case, Mundine personally treated Griffith after his first seizure, and SHP
protocol establishes a duty on the part of providers to involve a physician in the treatment of a
patient after a seizure. The fact that the protocol requires a physician’s involvement after a
patient suffers a seizure indicates how serious a medical need a seizure is. Mundine’s failure to
heed this clear directive is evidence that a reasonable jury could rely upon to find that she was
aware of a substantial risk to Griffith’s health and recklessly failed to act to address that risk.
Additionally, notwithstanding Mundine’s failure to follow internal procedures, LaMarre
testified that Mundine “should have notified a physician” after the seizure, and, because Griffith
had “grossly abnormal” vital signs after the incident and because he did not have a history of
seizures, the incident “is a big red flag and should have warranted, with the abnormal vital signs,
being sent immediately to the hospital.” (R. 74-6, LaMarre Dep. Tr., PageID # 1519; see also id.
at 1528 (LaMarre states that “[a] new onset seizure is” always a medical emergency which
requires hospitalization.).) The weight to be assigned to Mundine’s failure to follow the protocol
and to LaMarre’s testimony is a question best reserved for a finder of fact. See Anderson,
477 U.S. at 249 (holding that a court may not “weigh the evidence and determine the truth of the
matter” in deciding a motion for summary judgment).
iv. Remaining Reasons for Summary Judgment
The district court provided two other reasons for granting summary judgment to the
nurses collectively that must be addressed. First, it suggested that Griffith’s failure to advocate
for himself undermines his claim that his medical providers were deliberately indifferent by not
rendering more treatment than they did. The court compared Griffith to the plaintiff in Napier v.
Madison County, 238 F.3d 739 (6th Cir. 2001). This comparison is inapt. In Napier we
considered whether the objective prong was met where the plaintiff alleged deliberate
indifference against jail officials who prevented him from receiving a scheduled dialysis
treatment. Id. at 742. However, because the plaintiff could have received dialysis a short time
after his scheduled appointment, did not seek dialysis after being released from detention, and he
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 52
presented no medical evidence of the detrimental effect of the delay in his treatment, he could
not meet the objective prong. Id. at 742–43. Additionally, the plaintiff himself told prison
officials that missing his scheduled dialysis treatment would be “no big deal” because he had
previously missed them. Id. at 741. Medical records showed that he had missed forty-one
scheduled dialysis appointments in the previous year. Id. We then expressly declined to reach
the subjective prong because the objective component was not met. Id. at 743.
Even if Napier has any relevance to the mens rea prong, the present case is entirely
distinct. Unlike the plaintiff in Napier, Griffith was not suffering from a long-term condition
that he was aware of and was regularly treated for. We recognized in Napier that such
familiarity with one’s condition and express admission that not being treated was “no big deal”
undermines a deliberate indifference claim when that treatment is withheld. See id. at 741–43.
Conversely, nothing in the record in the present case suggests that Griffith could have, or should
have, understood his urinalysis results or what they portended. The nurses do not contend that
they carefully explained the meaning of the test to Griffith, the possible ailments he was
suffering from, or the possible causes of his days-long vomiting spell. Perhaps if they had then
we could discern some significance from Griffith’s failure to self-advocate. Instead, Griffith was
at the mercy of the prison staff. After being on suicide watch for two days and vomiting for
much of that time, Griffith was in a categorically different position than the plaintiff in Napier.
Therefore, his failure to self-advocate does not undermine the genuine issues of material fact
regarding the nurses’ alleged deliberate indifference to his serious medical needs.
Additionally, the district court found that Griffith “failed to show a causal link necessary
for his claim to succeed.” (R. 118, Dist. Ct. Order, PageID # 4241.) The court stated that
“Griffith points to no test which if performed would have prevented the harm. . . . Even with his
seizure, Griffith does not put forward medically verifying evidence that the delay induced any
harm.” (Id.) But LaMarre’s deposition testimony provides evidence for the opposing view: that
the nurses’ failure to transport Griffith to a hospital after his urinalysis or his first seizure did
induce greater harm. It was only after intensive care at the UK hospital that his condition
stabilized. LaMarre stated that while she would not opine as to the cause of the seizures, “he was
allowed to deteriorate until he developed seizures when he should have been sent to the hospital
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 53
or been evaluated by a doctor or nurse practitioner well before the 14th of November.” (R. 74-6,
LaMarre Dep. Tr., PageID # 1521.) A reasonable jury could conclude that had he been sent to a
hospital, or at least evaluated by an APRN or physician sooner, his condition would not have
deteriorated as rapidly or as severely.
Finally, the district court correctly found that the “clearly established” prong of qualified
immunity was plainly satisfied in the present case, because “Griffith’s right to medical treatment
for a serious medical need has been established since at least 1987.” (R. 118, Dist. Ct. Order,
PageID # 4236 (citing Phillips v. Roane County, 534 F.3d 531, 545 (6th Cir. 2008)); see also
Estate of Carter v. City of Detroit, 408 F.3d 305, 313 (6th Cir. 2005) (“[I]n 1992, this court
explicitly held that a pretrial detainee’s right to medical treatment for a serious medical need has
been established since at least 1987.” (citing Heflin v. Stewart County, 958 F.2d 709, 717 (6th
Cir. 1992))).) And we clearly established that a plaintiff can demonstrate a constitutional
violation for delayed, rather than denied, treatment with verifying medical evidence at least as
early as 2001 when Napier so held. 238 upayne@example.com. Consequently, the nurses are not entitled to
qualified immunity and Griffith’s claims against them should proceed to trial for adjudication by
a finder of fact.
v. Dr. Waldridge
Griffith argues that Dr. Waldridge is liable for the unconstitutional conduct of the nurses
under a theory of supervisory liability. The majority finds that Griffith’s claim fails because he
cannot demonstrate that the nurses engaged in unconstitutional conduct. I would not absolve
Waldridge of liability on this basis, at least for purposes of surviving summary judgment.
Instead, I would hold that summary judgment was properly granted in favor of Dr. Waldridge
because Griffith failed to demonstrate that Waldridge encouraged or participated in the alleged
constitutional violation. See Gregory v. City of Louisville, 444 F.3d 725, 751 (6th Cir. 2006);
Shehee v. Luttrell, 199 F.3d 295, 300 (6th Cir. 1999) (“[A] supervisory official’s failure to
supervise, control or train the offending individual is not actionable unless the supervisor ‘either
encouraged the specific incident of misconduct or in some other way directly participated in it.
At a minimum a plaintiff must show that the official at least implicitly authorized, approved, or
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 54
knowingly acquiesced in the unconstitutional conduct of the offending officers.’” (quoting Hays
v. Jefferson County, 668 F.2d 869, 874 (6th Cir. 1982))).
Griffith argues that because Waldridge abandoned his contractual duties to visit FCRJ at
least once a week, he “authorized, approved, or knowingly acquiesced” in his subordinates’
failures to follow SHP policy with respect to treating Griffith. (First Br. of Appellant at 42–43.)
Although Waldridge’s contract with SHP suggests that he was obligated to make weekly visits to
the jail, Griffith provides no evidence indicating that Waldridge was aware of or supported his
subordinates’ failure to follow SHP policy or their decision to not inform him or an APRN of
Griffith’s condition. While Waldridge certainly should have been more attentive to what was
occurring at FCRJ—Griffith’s pain and suffering is an object lesson in the consequences of his
shortcomings—Plaintiff has not shown the requisite unconstitutional conduct to find that
Waldridge was supervisorily liable for the nurses’ actions.
Unlike the situation in the sole case that Griffith relies on, Taylor v. Michigan
Department of Corrections, 69 F.3d 76 (6th Cir. 1995), there were systems in place to prevent
what happened to Griffith. In Taylor we held that a warden could be liable for the deliberate
indifference of his subordinates after he knowingly and lawfully delegated his authority to
transfer prisoners to his subordinates, who in turn delegated the transfer authority to lower-
ranking officials. Id. at 80. This was because the warden testified that he knew that his transfer
authority had been delegated to lower-ranking officials without express authorization and that he
“had no review procedures” in place to prevent abuse of his transfer authority. See id. In this
case, SHP’s seizure protocol should have led Nurse Mundine to contact Waldridge or an APRN
after his first seizure. And Nurses Sherrow and Trivette independently disregarded the
seriousness of Griffith’s urinalysis, treated him outside the scope of their practice, and failed to
alert an APRN or Waldridge as to his deteriorating condition. Thus, there are no similarly
deficient delegations of authority or affirmative actions by Waldridge that provide the requisite
unconstitutional conduct to hold Waldridge accountable under a theory of supervisory liability.
Nos. 19-5378/5438/5439/5440 Griffith v. Franklin County, Ky., et al. Page 55
CONCLUSION
For the foregoing reasons, I respectfully dissent from the portions of the majority opinion
addressed above. I would adopt an objective test in light of Kingsley to assess whether a plaintiff
alleging deliberate indifference to their serious medical needs has demonstrated that the
defendant acted with the requisite state of mind. I would then find that Griffith has met this test,
at least at the summary judgment stage, with respect to Nurses Sherrow, Trivette, and Mundine.
Accordingly, I would reverse the district court’s grant of summary judgment to those Defendants
and remand the case to the district court for further proceedings.
|
1
2
3
4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
6
7 STRIKE 3 HOLDINGS, LLC, Case No. 19-cv-00225-SI
8 Plaintiff,
ORDER GRANTING APPLICATION
9 v. FOR LEAVE TO SERVE THIRD
PARTY SUBPOENA PRIOR TO A
10 JOHN DOE SUBSCRIBER ASSIGNED IP RULE 26(F) CONFERENCE
ADDRESS (815)499-9083,
11 Re: Dkt. No. 7
Defendant.
12
Northern District of California
United States District Court
13 The Court has reviewed plaintiff’s ex parte application for leave to serve a third party
14 subpoena prior to the Rule 26(f) conference. The Court finds that plaintiff has established that good
15 cause exists for it to serve a third party subpoena on Comcast Cable (hereafter the “ISP”). See
16 generally Braun v. Doe, No. 12-cv-3690 YGR (JSC), 2012 WL 3627640 (N.D. Cal. Aug. 21, 2012).
17 The Court GRANTS plaintiff’s ex parte application as follows:
18 Plaintiff may serve the ISP with a Rule 45 subpoena commanding the ISP to provide plaintiff
19 with the true name and address of the defendant to whom the ISP assigned an IP address as set forth
20 on Exhibit A to the Complaint. Plaintiff shall attach a copy of this Order to any such subpoena.
21 The ISP will have 20 days from the date of service upon it to serve John Doe with a copy of
22 the subpoena and a copy of this Order. The ISP may serve the Doe defendant using any reasonable
23 means, including written notice sent to his or her last known address, transmitted either by first-
24 class mail or via overnight service.
25 John Doe shall have 30 days from the date of service upon him, her, or it to file any motions
26 in this Court contesting the subpoena (including a motion to quash or modify the subpoena). If that
27 30–day period lapses without John Doe contesting the subpoena, the ISP shall have 14 days to
28 produce the information responsive to the subpoena to plaintiff.
1 The subpoenaed entity shall preserve all subpoenaed information pending the ISP delivering
2 such information to plaintiff or the final resolution of a timely filed and granted motion to quash the
3 subpoena with respect to such information.
4 Any information disclosed to plaintiff in response to a subpoena may be used by plaintiff
5 solely for the purpose of protecting its rights under the Copyright Act, 17 U.S.C. §§ 101–1322.
6 Plaintiff shall serve John Doe with the summons, complaint, and other documents required
7 by Civil Local Rule 4–2 within 120 days of learning John Doe’s identity. Should this litigation
8 proceed after the service of summons, the complaint and other documents, the Court directs the
9 parties to meet and confer regarding whether entry of a protective order is appropriate.
10
11 IT IS SO ORDERED.
12
Northern District of California
United States District Court
13 Dated: February 5, 2019
14 ______________________________________
SUSAN ILLSTON
15 United States District Judge
16
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Case 1:20-cv-07356-PAE Document 20 Filed 02/12/21 Page 1 of 10
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
EAST VILLAGE NEW DELI CORP.,
Plaintiff, 20 Civ. 7356 (PAE)
=-V-
OPINION & ORDER
UNITED STATES OF AMERICA, et al.,
Defendants.
PAUL A. ENGELMAYER, District Judge:
Before the Court is a motion by plaintiff East Village New Deli Corp. (“East Village”) to
stay a final decision of the Food Nutrition Service (“FNS”), a department of the U.S. Department
of Agriculture (“USDA”), during the pendency of this action. FNS’s decision permanently
disqualified East Village from participating in the Supplemental Nutrition Assistance Program
(“SNAP”). For the reasons that follow, the Court denies the motion to stay.
L. Background
A. Factual Background
ENS operates the SNAP program. See Food Stamp Act of 2008, 7 U.S.C, §§ 2011-
2036a: see also 7 C.F.R. § 271.3. SNAP’s purpose is “to promote the general welfare, to
safeguard the health and well-being of the Nation’s population by raising levels of nutrition
among low-income households.” Jd, § 2011. “SNAP beneficiaries receive a government-issued
Electronic Benefits Transfer (“EBT”) card and can purchase designated food items at
participating firms by swiping their EBT card through an electronic reader.” Makey Deli
Grocery Inc. v. United States, 873 F. Supp. 2d 516, 517 (S.D.N.Y. 2012) (citing 7 U.S.C.
§ 2016(f}(3)(B); 7 CFR. $$ 274.2, 274.3). The Government then redeems the benefits and pays
the participating firm the value of the purchase. /d. (citing 7 U.S.C. §§ 2013(a), 2019).
Case 1:20-cv-07356-PAE Document 20 Filed 02/12/21 Page 2 of 10
ENS is responsible for overseeing SNAP and monitoring firms to ensure compliance with
the program, See 7 C.F.R. § 271.3. Trading SNAP benefits for items other than eligible food
items constitutes “trafficking.” 7 C.F.R. §§ 271.2, 278.2(a). A participating firm found to have
engaged in trafficking is permanently disqualified from SNAP. See id. § 278.6(e). However, if
the firm “timely submits to FNS substantial evidence which demonstrates that the firm had
established and implemented an effective compliance policy and program to prevent violations
of the Program,” it can request a civil money penalty (*CMP”) in lieu of permanent
disqualification. Id § 278.6G).
East Village is a grocery store located at 115 Avenue A, New York, N.Y., 10009. See
Dkt. 1 (“Compl.”) 44. On May 7, 2020, USDA sent East Village a letter notifying it that USDA
was charging it with trafficking, which carries the penalty of permanent disqualification from
SNAP. See id. § 8; see also id., Ex. 1 (“May 7, 2020 Letter”). In the letter, USDA alleged that it
had identified “Electronic Benefit Transfer (EBT) transactions that establish[ed] clear and
repetitive patterns of unusual, irregular, and inexplicable activity for [East Village’s] type of
firm.” May 7, 2020 Letter at 1. USDA included in the letter a list of the allegedly irregular
charges, which were incurred between October 2019 and March 2020. There were two types of
unusual transactions that USDA identified: (1) multiple EBT transactions from accounts of
individual SNAP households within a set time period; and (2) transactions that were large
compared to “observed store characteristics and recorded food stock.” fd. USDA gave East
Village 10 days to respond to the charges. It described the process by which East Village could
request CMP in lieu of permanent disqualification.
On May 14, 2020, East Village responded by letter. Compl., Ex. 2 (“May 14, 2020
Letter”). In general terms, it denied having engaged in trafficking and argued that “the
Case 1:20-cv-07356-PAE Document 20 Filed 02/12/21 Page 3 of 10
information (or lack thereof) presented by [USDA] [did] not support a finding of ‘trafficking.’”
Last Village explained that the transactions “merely illustrate[] a typical six-month period at East
Village in which all EBT transactions were legal and conducted in full compliance with SNAP
regulations.” The letter deemed USDA’s accusations “wholly circumstantial” and stated that the
“multiple EBT transactions from the sare customers occurring typically five-to-six hours apart”
were “nothing more than customers returning to make additional purchases after making their
original purchase several hours earlier.” East Village attached affidavits from the owner, Amran
Abdo Nahshal, and three employees to the letter regarding the store’s effective compliance
policy.
On July 23, 2020, USDA responded by letter, /d., Ex. 3 (July 23, 2020 Letter”). USDA
stated that it had found that the violations outlined in the May 7, 2020 Letter had occurred and
that East Village would be permanently disqualified from SNAP. USDA stated that it had also
found that East Village had failed to establish and implement an effective compliance policy to
prevent SNAP violations, and therefore that East Village was not eligible for a CMP.
On July 27, 2020, East Village sought administrative review of USDA’s decision and
reprised its arguments that there was “absolutely nothing to support” USDA’s determination that
East Village had engaged in trafficking, Jd, Ex. 4. East Village further argued that it did have
an effective compliance policy in place. Jd. On September 9, 2020, USDA issued its final
agency decision, disqualifying East Village from SNAP. id, Ex. 5.
B. Procedural History
On September 9, 2020, East Village filed the Complaint, seeking de novo judicial review
of USDA’s decision to permanently ban East Village from participation in SNAP, Compl. The
same day, East Village filed a motion to stay the agency’s decision pending this action. Dkt. 5.
Case 1:20-cv-07356-PAE Document 20 Filed 02/12/21 Page 4 of 10
On September 29, 2020, defendants moved for an extension of time to oppose the motion to stay
until October 5, 2020, Dkt. 10, which the Court granted, Dkt. 11.
i. Discussion
A, Availability of Stay in Cases of Permanent Disqualification
At the threshold, the parties dispute whether a stay is available under the Food Stamp Act
in cases of permanent disqualification. See Dkt. 6 (“Mem.”) at 5; Dkt. 13 (Opp’n”) at 6-10.
Section 2023(a)(17) provides that during judicial review of FNS’s decision, the decision remains
in full force and effect, unless “after hearing thereon and a consideration by the court of the
applicant’s likelihood of prevailing on the merits and of irreparable injury, the court temporarily
stays such administrative action pending disposition of such trial or appeal.” However, the next
subsection provides that “[nJotwithstanding any other provision of this subsection, any
permanent disqualification of a retail food store or wholesale food concern under paragraph (3)
or (4) of section 2021 (b) of this title shall be effective from the date of receipt of the notice of
disqualification.” Jd. § 2023(a)(18). Further, in cases of permanent disqualification, if the court
reverses FNS’s decision, the Secretary of Agriculture “shall not be liable for the value of any
sales lost during the disqualification period.” fd.
Courts have reached conflicting results as to whether stays are available in cases of
permanent disqualification, Some have read the text of § 2023(a)(18) to “reflect[] that a stay is
not available in cases of permanent disqualification.” Maian v. U.S. Dep’t of Agric., Food &
Nutrition, 87 F. Supp. 2d 1047, 1048 (S.D. Cal. 2000); cf Skyson USA, LLC v. United States,
651 F. Supp. 2d 1202, 1208 (D. Haw. 2009) (stating that although text is ambiguous, the most
“natural reading” is that a stay is not available because § 2023(a)(18) provides that a permanent
disqualification “‘shall’—7.e., must—begin on the date the retailer receives notice of the
disqualification”). /laian noted that the USDA’s regulations interpreting and implementing
4
Case 1:20-cv-07356-PAE Document 20 Filed 02/12/21 Page 5 of 10
§ 2203 provide that “permanent disqualification actions taken in accordance with § 278.6(e)(1)
of this chapter shall not be subject to such a stay of administrative action,” thereby implicitly
indicating that, were the statute held ambiguous, deference to the USDA’s interpretation of it
would be due under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 US.
837 (1984). 87 F. Supp. 2d at 1048 (quoting 7. C.F.R. § 279.10(d)).
Other courts have found that § 2023 unambiguously allows stays, making the agency’s
regulation to the contrary ineffective, See Tony’s Pantry Mart Inc. v. U.S. of Am. Dep't of Agric.
Food & Nutrition Sery,, 175 F. Supp. 3d 987, 993 (N.D. Ill. 2016); Lazaro v, U.S. Dep't of
Agric., 186 F. Supp. 2d 1203, 1211 (M.D. Fla, 2001). Section 2023(a), they reason, does not
“limit the circumstances under which a store may seek a stay,” and § 2023(a)(18) “does not
contain any language that limits the federal courts’ authority to grant a stay under § 2023(a)(17).”
Tony’s Pantry Mart Inc., 175 F. Supp. 3d at 994 (citing Lazaro, 186 F. Supp. 2d at 1210).
Two courts in this Circuit have resolved applications for such stays. See Al Amin Halal
Meat & Fish Mkt. Inc. v. United States, No. 15 Civ. 276A, 2015 WL 12552019, at *15
(W.D.N.Y. Oct. 21, 2015) (noting that USDA’s regulations prohibit stays in cases of permanent
disqualification, but not having occasion to resolve statutory interpretation because plaintiff did
not qualify for a stay on the merits), report and recommendation adopted, 2015 WL 12552031
(W.D.N.Y, Dec. 7, 2015); Ahmed v. United States, 47 F. Supp. 2d 389, 393-401 (W.D.N.Y. 1999)
(granting stay of permanent disqualification without analyzing statutory availability of a stay
under § 2023).
The Court here does not have occasion to determine whether, as a matter of statutory
interpretation, a stay is available pending completion of judicial review of a final administrative
decision by FNS permanently disqualifying a business from participating in SNAP. That is
Case 1:20-cv-07356-PAE Document 20 Filed 02/12/21 Page 6 of 10
because, as in Al Amin, the Court finds that, even if the statute allowed for such a stay, East
Village would not qualify for one on the merits.
B. Merits of the Stay
The standards for a stay under § 2023(a)(17) are that the applicant (1) is likely to prevail
on the merits to its challenge to permanent disqualification, and (2) would suffer irreparable
injury absent the stay.!
a. Likelihood of Success on the Merits
East Village argues that it is likely to succeed on the merits because it was denied due
process, in violation of the Fifth Amendment, when USDA permanently banned it from SNAP
without a hearing, See Mem. at 5. East Village contends that it had a property interest in its
SNAP participation and was entitled to a pre-deprivation hearing. See id. at 5-10. And
§ 2023(a) does not require a hearing; it provides instead for de novo review of USDA's decision
by a district court. See § 2023(a)(10), (15). USDA does not appear to dispute that East Village
has a property interest in its SNAP participation. Instead, it argues that its current administrative
review process comports with due process. See Opp’lisa28@example.com. That process, it notes, gave
“East Village two separate opportunities to present exculpatory evidence to the government”
| A preliminary injunction staying USDA’s decision to disqualify a participating firm from
participating in SNAP is subject to the “more rigorous likelihood of success standard” because
the plaintiff “seeks to stay governmental action taken in the public interest pursuant to a statutory
or regulatory scheme.” Young Jin Choi v. United States, 944 F. Supp. 323, 325 (S.D.N.Y. 1996)
(interpreting the Food Stamp Act of 1977); see also Faisal & A, LLC v. United States, No. 19
Civ. 14184, 2019 WL 4674500, at *3 (S.D, Fla. Sept. 25, 2019) (“When considering a motion for
a stay involving Government action taken in the public interest, a traditional ‘balance of the
equities’ approach is not used, as the public interest in ensuring that limited funds are available
for the needy recipients of the food stamp program is very strong.” (citations and quotations
omitted)). But see Mr. Smoky’s BBO, LLC v, United States, No, 13 Civ. 2585 (PHX) (DGC),
2014 WL 24152, at *1-3 (D. Ariz. Jan. 2, 2014) (applying balance of the equities test).
Case 1:20-cv-07356-PAE Document 20 Filed 02/12/21 Page 7 of 10
before the decision to disqualify it: once after USDA’s May 7, 2020 Letter, and again after the
July 23, 2020 Letter, Id. at 11.
The Supreme Court has identified three factors for courts to balance in determining
whether a pre-deprivation procedure provides due process:
First, the private interest that will be affected by the official action; second, the risk
of an erroneous deprivation of such interest through the procedures used, and the
probable value, if any, of additional or substitute procedural safeguards; and finally,
the Government’s interest, including the function involved and the fiscal and
administrative burdens that the additional or substitute procedural requirement
would entail.
Mathews v. Eldridge, 424 U.S. 319, 335 (1976).
Here, East Village undeniably has a property interest in continued participation in the
SNAP program. That said, the interest is less than that of the recipients of SNAP ad, as
“retailers are only incidental beneficiaries under the [SNAP] statutory scheme.” Jbrahim v. U.S.
Through Dep’t of Agric., 650 F, Supp. 163, 167 (N.D.N.Y.), aff'd, 834 F.2d 52 (2d Cir. 1987).
The primary beneficiaries are low-income households who receive SNAP EBT benefits. There
is no claim here that the disqualification of retailer East Village has compromised any recipient’s
interest,
And the Government’s interests in promptly disqualifying retailers who are found to be
abusing the SNAP program are strong. These interests consist of “reducing food stamp abuse
and in administering the program for the primary beneficiaries, the SNAP recipients,” assuring
that scarce funds remain available for qualifying recipients, and avoiding “the financial and
administrative burdens associated with having an administrative hearing prior to the federal
court’s de novo review.” Tony’s Pantry Mart Ine., 175 F. Supp, 3d at 996,
As for the risk of erroneous deprivation, on the facts here it is modest. It is undisputed
that East Village was given two opportunities to present evidence to USDA that the challenged
Case 1:20-cv-07356-PAE Document 20 Filed 02/12/21 Page 8 of 10
transactions were, in fact, for eligible food items. Although it made a general denial, calling the
USDA’s proof circumstantial and claiming that customers in each instance had returned to the
store multiple times per day, it did not produce evidence from customers to this effect, or
substantiate that any of the purchases had, in fact, been SNAP-comphant. And, as USDA notes,
numerous courts in this District have affirmed on de novo review determinations by USDA to
disqualify a retailer based on similar transaction data indicative of program abuse. See, ¢.g.,
Nadia Int'l Mit. v. United States, 689 F. App’x 30, 31-34 (2d Cir. 2017) (summary order)
(affirming USDA’s disqualification of firm based on, among others, “rapid successive purchases
involving the same household” and “relatively high dollar-value transactions given [plaintiff's]
size and inventory”); see also Opp’n at 14 (collecting cases).
East Village relies on Mr. Smoky’s BBQ. The court there found that, on the “unique
facts” of the case, plaintiffs had demonstrated likelihood of success on the merits of their claim
that they had been denied due process by being permanently disqualified without a deprivation
hearing. Mr. Smoky’s BBO, 2014 WL 24152, at *2. These facts were that the challenged
charges were almost five years old and concerned approximately $55 in SNAP benefits in total.
See id. at *1. The age of the charges made it challenging for plaintiffs to respond within 10 days
because they “lacked records and memories to respond fully.” /d. And, the court found, the
Government’s delay in bringing the charges undercut the urgency of its interest. fd. at *2. This
case is readily distinguished, in that the oldest charges are from October 2019, and there are 174
challenged transactions, totaling some $22,087.12. See Compl., Ex. 1. East Village therefore
does not face the same difficulty in obtaining records validating its disputed charges, many of
which are from 2020, including some only a few months old as of USDA’s first letter, And the
Government’s interest is strong. The dollar value of the program fraud alleged is considerable,
Case 1:20-cv-07356-PAE Document 20 Filed 02/12/21 Page 9 of 10
approximately 400 times that in Mr. Smoky’s BBQ. Further, in contrast to Mr. Smoky’s BBQ, the
USDA began its administrative process with dispatch and so has not undercut the urgency of its
interest in this case.
Accordingly, while East Village is entitled to and will receive de novo review of its claim
in this case that the USDA wrongly disqualified it from participation as a retailer in the SNAP
program, it has not, at this point, demonstrated that it is likely to succeed on the merits of its
procedural due process claim.
b, Irreparable Injury
East Village argues that if a stay is not granted, it will suffer irreparable injury because it
handles approximately $20,000 per month in SNAP transactions, Mem. at 8. It furthers argues
that some of its customers, SNAP-cligible residents of the neighborhood that East Village serves,
will also be harmed, because they will have to “walk several blocks in a different direction in
order to purchase” essentials. fe For this point, East Village again relies on Mr. Smoky’s BBQ,
which found that both the retailer and the community would suffer irreparable harm. The store,
Bubba’s, was a “very small store, accommodating only three or four customers at a time,” and
which earned “only $26,000 annually.” Mr. Smoky's BBQ, 2014 WL 24152, at *1, Without a
stay, the court found, Bubba’s would go out of business within a few weeks. Jd. And, the court
found, most people in Bubba’s neighborhood received some type of government assistance,
primarily SNAP, and spent their SNAP benefits at Bubba’s. See id.
East Village has not made a similar showing. As to itself, East Village admits that it is
not on the verge of bankruptcy. See Mem. at 8, And while it claims it will lose $20,000 in
monthly SNAP revenue, it does not put this figure in context. It does not, for example, report its
overall revenue, including from non-SNAP sources. It appears that East Village has remained in
business since the USDA terminated its benefits. Finally, as to the harm to customers, although
9
Case 1:20-cv-07356-PAE Document 20 Filed 02/12/21 Page 10 of 10
East Village states that there are only a few grocery stores in the general proximity that
participate in SNAP, it acknowledges that at least some of these are “within several blocks” of
East Village. Mem. at 8.
Accordingly, East Village has not made a showing of irreparable harm, and its showing
as to this required element falls well short of that made in Mr. Smoky’s BBQ.
CONCLUSION
For the reasons explained, the Court denies East Village’s motion for a stay pending the
outcome of this litigation. However, the Court is committed to ensuring that this litigation, in
which USDA’s disqualification of East Village will be reviewed de novo, proceeds on a prompt
schedule.
The Clerk of Court is respectfully directed to terminate the motion pending at docket 6.
fank ( Log biy /
Paul A. Engelmayer
United States District dee
SO ORDERED.
Dated: February 12, 2021
New York, New York
10
|
QUESTION: Is the payment to an accountant for services rendered to a candidate in the preparation of the statement of disclosure required of each candidate by Ch. 74-177, Laws of Florida, an "expenditure" within the meaning of s. 106.011(4), F.S.?
SUMMARY: Pending legislative clarification, a payment to an accountant for services rendered to a candidate in the preparation of the statement of disclosure required of each candidate by Ch. 74-177, Laws of Florida, should be treated as an "expenditure" within the meaning of s. 106.011(4), F.S., and should be reported by the campaign treasurer pursuant to s. 106.07, F.S., and made through the campaign treasurer in the manner prescribed by s.106.11, F.S. Your question is answered in the affirmative. As noted in AGO 072-307, the election code no longer contains an itemization of what constitutes proper campaign expenditures. Under our present law, the term "expenditure" is defined in s.106.011(4), F.S., as "a purchase, payment, distribution, loan, advance, or gift of money or anything of value made for the purpose of influencing the results of an election." (Emphasis supplied.) Obviously, every person who embarks upon a candidacy for nomination or election to public office is, by his very act of becoming a candidate, seeking to influence the results of an election. Accordingly, any sums of money expended by a candidate in taking steps to comply with statutory obligations imposed on candidates as a class would seem to be an "expenditure" within the meaning of the definition in s. 106.011(4), id. Pending legislative clarification, I have the view that a payment to an accountant for services rendered in the preparation of the statement of disclosure — which statement is required of each candidate for public office by Ch. 74-177, Laws of Florida [s.112.3145, F.S.] — should be treated as an expenditure within the meaning of said section of the campaign finance law, and should be reported by the campaign treasurer pursuant to s. 106.07, id., and made through the campaign treasurer in the manner provided by s.106.11, id. |
209 Ga. 373 (1952)
72 S.E.2d 713
BRANHAM
v.
BRANHAM.
17959.
Supreme Court of Georgia.
Submitted September 8, 1952.
Decided October 14, 1952.
George Thomas, for plaintiff in error.
Jesse T. Edwards and Bruce B. Edwards, contra.
HAWKINS, Justice.
Compliance with the rule of practice and procedure of 1946 (Ga. L. 1946, pp. 726, 735, 739; Code, Ann. Supp., §§ 6-908.1, 6-909), requiring reasonable notice to the defendant in error or his counsel of the intention to present a bill of exceptions to the trial judge for certification, or an acknowledgement on the bill of exceptions that notice has been given in compliance with this rule, and that the "bill of exceptions in said case is hereby approved as correct and complete as to the averments of facts therein," will not dispense with the necessity of serving the defendant in error with a copy of the bill of exceptions after it is certified as required by Code, § 6-911, where there is no acknowledgement or waiver of such service. There being no return, acknowledgment, or waiver of service endorsed upon or annexed *374 to the bill of exceptions in this case, as required by the Code, § 6-911, this court has no jurisdiction, and the writ of error must be dismissed. McGreggor v. W. L. Florence Construction Co., 208 Ga. 176 (65 S.E. 2d, 809); Parker v. Parker, 208 Ga. 190 (65 S.E. 2d, 794); Newton v. Bailey, 208 Ga. 415 (67 S.E. 2d, 239).
Writ of error dismissed. All the Justices concur.
|
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 1 of 28
1 JORDAN ETH (CA 121617) KAREN G. JOHNSON-MCKEWAN (CA 121570)
steven70@example.org steven70@example.org
2 PHILIP T. BESIROF (CA 185053) KENNETH P. HERZINGER (CA 209866)
steven70@example.org steven70@example.org
3 CHRISTIN J. HILL (CA 247522) ALEXANDER
` K. TALARIDES (CA 268068)
steven70@example.org steven70@example.org
4 MORRISON & FOERSTER LLP ORRICK, HERRINGTON & SUTCLIFFE LLP
425 Market Street 405 Howard Street
5 San Francisco, California 94105-2482 San Francisco, California 94105
Telephone: 249.412.0715 Telephone: 249.412.0715
6 Facsimile: 249.412.0715 Facsimile: 249.412.0715
Attorneys for Defendants Lawrence J. Attorneys for Nominal Defendants Oracle
7 Ellison, Safra A. Catz, Jeffrey O. Henley, Corporation and Oracle America, Inc.
Jeffrey S. Berg, Michael J. Boskin, Bruce R.
8 Chizen, George H. Conrades, Rona A.
Fairhead, Renée J. James, Charles Moorman
9 IV, Leon E. Panetta, William G. Parrett,
Naomi O. Seligman, and Vishal Sikka
10
DORIAN DALEY (CA 129049)
11 steven70@example.org
PEGGY E. BRUGGMAN (CA 184176)
12 steven70@example.org
JAMES C. MAROULIS (CA 208316)
13 steven70@example.org
ORACLE CORPORATION
14 2300 Oracle Way
Austin, Texas 78741
15 Telephone: 249.412.0715
Attorneys for Nominal Defendants Oracle
16 Corporation and Oracle America, Inc.
17 UNITED STATES DISTRICT COURT
18 NORTHERN DISTRICT OF CALIFORNIA
19 SAN FRANCISCO DIVISION
20 KLEIN, et al., derivatively on behalf of Lead Case No. 3:20-cv-04439-JSC
ORACLE CORPORATION and ORACLE
21 AMERICA, INC.,
REPLY IN SUPPORT OF DEFENDANTS’
22 Plaintiffs, MOTION TO DISMISS PLAINTIFFS’
VERIFIED AMENDED CONSOLIDATED
23 v. SHAREHOLDER DERIVATIVE
COMPLAINT
24 LAWRENCE J. ELLISON, et al.,
Date: April 8, 2021
25 Defendants. Time: 9:00 a.m.
Judge: Hon. Jacqueline Scott Corley
26
27
28
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 2 of 28
1 TABLE OF CONTENTS
2 Page
3 TABLE OF AUTHORITIES ..........................................................................................................
` ii
4 INTRODUCTION .......................................................................................................................... 1
I. PLAINTIFFS FAIL TO ALLEGE THAT DEMAND IS EXCUSED. .............................. 2
5
A. Plaintiffs Get the Law Wrong: Unless Plaintiffs Show That a Director Is
6 “Interested,” They Cannot Establish Demand Futility............................................ 2
B. No Director Is “Interested” in This Litigation. ....................................................... 3
7
1. No Director Faces a Substantial Likelihood of Liability for Breach
8 of Fiduciary Duty or for Violation of Section 14(a). .................................. 3
a. Nothing in the Complaint Contradicts Oracle’s Stated
9 “Commit[ment] to Actively Seeking Women and Minority
Candidates” for the Board. .............................................................. 4
10
(i) Five Fatal Deficiencies Require Dismissal. ........................ 4
11 (ii) The Complaint Also Fails to Allege Falsity........................ 5
12 b. Plaintiffs Have Not Alleged the Falsity of the Directors’
Opinion Statements About Stockholder Proposals. ........................ 7
13 c. Plaintiffs Have Not Alleged the Falsity of Statements About
Oracle’s Internal Controls. ............................................................ 10
14
d. Plaintiffs Ignore Additional Reasons Why the Complaint
15 Fails to Allege Any Director Is Interested in the Section
14(a) and Breach of Fiduciary Duty Claims. ................................ 10
16 2. Ellison Is Not “Interested” Merely Because He Receives Dividends
as an Oracle Stockholder. .......................................................................... 13
17
C. Plaintiffs Fail to Allege That a Majority of the Board Lacks Independence
18 from Ellison........................................................................................................... 15
II. PLAINTIFFS’ CLAIMS ALSO FAIL UNDER RULE 12(b)(6). .................................... 17
19
A. Plaintiffs Have Not Stated a Section 14(a) or Breach of Fiduciary Duty
20 Claim Based on the Director Defendants’ Dissemination of Allegedly False
Proxy Statements................................................................................................... 17
21 B.
The Complaint Fails to State a Caremark Claim. ................................................. 17
22 1. The Complaint Fails to Plead Harm to Oracle. ......................................... 18
2. The Complaint Fails to Plead That Defendants Consciously
23 Disregarded “Red Flags.”.......................................................................... 18
24 C. The Remaining State Law Claims Should Be Dismissed. .................................... 19
III. PLAINTIFFS WERE REQUIRED TO BRING THEIR CLAIMS IN THE
25 DELAWARE COURT OF CHANCERY......................................................................... 20
26 CONCLUSION ............................................................................................................................. 20
27
28
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC i
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 3 of 28
1 TABLE OF AUTHORITIES
2 Page(s)
3 Cases `
4 In re Abbott Labs. Deriv. S’holders Litig.,
325 F.3d 795 (7th Cir. 2003).....................................................................................................19
5
In re Accuray, Inc. S’holder Deriv. Litig.,
6
No. 09-05580 CW, 2010 U.S. Dist. LEXIS 90068 (N.D. Cal. Aug. 31, 2010) ........................20
7
In re Am. Apparel, Inc. 2014 Deriv. S’holder Litig.,
8 No. CV1405230MWFJEMX, 2015 WL 12724070 (C.D. Cal. Apr. 28, 2015) ..................12, 13
9 Aronson v. Lewis,
473 A.2d 805 (Del. 1984) .........................................................................................................17
10
Beam ex rel. Martha Stewart Living Omnimedia, Inc. v. Stewart,
11 845 A.2d 1040 (Del. 2004) .......................................................................................................16
12
Belova v. Sharp,
13 No. CV 07-299-MO, 2008 WL 700961 (D. Or. Mar. 13, 2008) ..............................................20
14 In re Caremark Int’l Deriv. Litig.,
698 A.2d 959 (Del. Ch. 1996) .............................................................................................17, 18
15
In re Citigroup S’holder Deriv. Litig.,
16 964 A.2d 106 (Del. Ch. 2009) .....................................................................................................8
17 City of Dearborn Heights Act 345 Police & Fire Ret. Sys. v. Align Tech., Inc.,
18 856 F.3d 605 (9th Cir. 2017)...................................................................................................7, 8
19 Constr. Laborers Pension Tr. v. CBS Corp.,
433 F. Supp. 3d 515 (S.D.N.Y. 2020) .........................................................................................5
20
In re Countrywide Fin. Corp. Deriv. Litig.,
21 554 F. Supp. 2d 1044 (C.D. Cal. 2008) ....................................................................................13
22 In re Countrywide Fin. Corp. Mortg.-Backed Sec. Litig.,
23 934 F. Supp. 2d 1219 (C.D. Cal. 2013) ................................................................................6, 12
24 In re Cray Inc.,
431 F. Supp. 2d 1114 (W.D. Wash. 2006) ................................................................................11
25
Desimone v. Barrows,
26 924 A.2d 908 (Del. Ch. 2007) .............................................................................................10, 11
27 Ferris v. Wynn Resorts Ltd.,
462 F. Supp. 3d 1101 (D. Nev. 2020) .........................................................................................5
28
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC ii
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 4 of 28
1 In re Galena Biopharma, Inc. Deriv. Litig.,
83 F. Supp. 3d 1047 (D. Or. 2015) ...........................................................................................20
2
Gulbrandsen ex rel. Wells Fargo & Co. v. Stumpf,
3 ` Cal. May 9, 2013) ........................................13
No. C-12-05968 JSC, 2013 WL 1942158 (N.D.
4
Hastey on behalf of YRC Worldwide, Inc. v. Welch,
5 449 F. Supp. 3d 1053 (D. Kan. 2020) .......................................................................................10
6 Highland Legacy Ltd. v. Singer,
No. Civ. A 1566-N, 2006 Del. Ch. LEXIS 55 (Del. Ch. Mar. 17, 2006) .................................20
7
In re INFOUSA, Inc. S’holders Litig.,
8 953 A.2d 963 (Del. Ch. 2007) .....................................................................................................7
9
In re Intel Corp. Deriv. Litig.,
10 621 F. Supp. 2d 165 (D. Del. 2009) ..........................................................................................19
11 In re Johnson & Johnson Deriv. Litig.,
865 F. Supp. 2d 545 (D.N.J. 2011) ...........................................................................................19
12
In re Lyft Inc. Sec. Litig.,
13 484 F. Supp. 3d 758 (N.D. Cal. 2020) ........................................................................................5
14
Marvin H. Maurras Revocable Tr. v. Bronfman,
15 No. 12 C 3395, 2013 WL 5348357 (N.D. Ill. Sept. 24, 2013) ............................................18, 19
16 McElrath v. Kalanick,
224 A.3d 982 (Del. 2020) .................................................................................................1, 3, 15
17
MCG Capital Corp. v. Maginn,
18 No. 4521-CC, 2010 WL 1782271 (Del. Ch. May 5, 2010)...........................................12, 13, 15
19 Melbourne Mun. Firefighters’ Pension Tr. Fund v. Jacobs,
20 No. 10872-VCMR, 2016 WL 4076369 (Del. Ch. Aug. 1, 2016) .............................................19
21 Ocegueda v. Zuckerberg,
2021 U.S. Dist. LEXIS 52465 (N.D. Cal. Mar. 19, 2021) ................................................ passim
22
In re Omnicare, Inc. Sec. Litig.,
23 769 F.3d 455 (6th Cir. 2014)...................................................................................................4, 5
24 Omnicare Inc. v. Laborers Dist. Council Const. Indus. Pension Fund,
575 U.S. 175 (2015) ................................................................................................................7, 8
25
26 In re Oracle Corp. Deriv. Litig.,
No. C 10-3392 RS, 2011 WL 5444262 (N.D. Cal. Nov. 9, 2011) ..............................................3
27
In re Oracle Corp. Derivative Litig.,
28 No. CV 2017-0337-SG, 2018 WL 1381331 (Del. Ch. Mar. 19, 2018) ....................................15
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC iii
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 5 of 28
1 In re Pfizer Inc. S’holder Deriv. Litig.,
722 F. Supp. 2d 453 (S.D.N.Y. 2010) .......................................................................................19
2
Rales v. Blasband,
3 `
634 A.2d 927 (Del. 1993) ...........................................................................................................3
4
Retail Wholesale & Dep’t Store Union Local 338 Ret. Fund v. Hewlett-Packard
5 Co.,
845 F.3d 1268 (9th Cir. 2017).................................................................................................4, 5
6
Rosenbloom v. Pyott,
7 765 F.3d 1137 (9th Cir. 2014)...............................................................................................7, 19
8 Sandys v. Pincus,
9 152 A.3d 124 (Del. 2016) .........................................................................................................16
10 Schaffer v. Horizon Pharma PLC,
No. 16-CV-1763 (JMF), 2018 WL 481883 (S.D.N.Y. Jan. 18, 2018)........................................6
11
Shaev v. Baker,
12 No. 16-CV-05541-JST, 2017 WL 1735573 (N.D. Cal. May 4, 2017)................................10, 12
13 In re Signet Jewelers Ltd. Sec. Litig.,
14 No. 16 Civ. 6728 (CM), 2018 U.S. Dist. LEXIS 199809 (S.D.N.Y. Nov. 26,
2018) ...........................................................................................................................................5
15
Stone ex rel. AmSouth Bancorporation v. Ritter,
16 911 A.2d 362 (Del. 2006) ...................................................................................................17, 18
17 Towers v. Iger,
912 F.3d 523 (9th Cir. 2018).......................................................................................................7
18
Unión de Empleados de Muelles de Puerto Rico PRSSA Welfare Plan v. UBS Fin.
19
Servs. Inc.,
20 704 F.3d 155 (1st Cir. 2013) .....................................................................................................13
21 United Food & Com. Workers Union v. Zuckerberg,
C.A. No. 2018-0671-JTL, 2020 WL 6266162 (Del. Ch. Oct. 26, 2020) ........................3, 14, 16
22
Velie v. Hill,
23 736 F. App’x 165 (9th Cir. 2018) ..............................................................................................20
24 In re Wells Fargo & Co. S’holder Deriv. Litig.,
25 282 F. Supp. 3d 1074 (N.D. Cal. 2017) ......................................................................................7
26 Yu Liang v. Berger,
No. 13-CV-12816-IT, 2015 WL 1014525 (D. Mass. Mar. 9, 2015).........................................10
27
28
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC iv
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 6 of 28
1 In re Zoran Corp. Deriv. Litig.,
511 F. Supp. 2d 986 (N.D. Cal. 2007) ......................................................................................12
2
Statute
3 `
4 8 Del. C. § 102 .................................................................................................................................12
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC v
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 7 of 28
1 INTRODUCTION
2 The central premise of Plaintiffs’ Opposition is that the allegedly “racist” Director
3 Defendants must have lied about Oracle’s commitment
` to diversity because the Board does not
4 currently have a Black director. Under Plaintiffs’ reading, when the Board said that it is
5 “committed to actively seeking women and minority [director] candidates,” it actually meant “we
6 ensure that we will have at least one Black director at all times.” Oracle’s proxy statements never
7 said that. And the absurdity of Plaintiffs’ offensive labelling of Defendants as “racist” is borne
8 out by the rich diversity of Oracle’s current and past directors—including Black, Latino, Asian
9 American, and female members. Simply put, Plaintiffs’ premise is logically and factually wrong.
10 Plaintiffs also misstate the law. They say that they may show demand futility by alleging
11 that a majority of directors is “either interested and/or lack independence.” But as the Supreme
12 Court of Delaware recently confirmed, independence comes into play only to determine whether
13 a director is “subject to the interested party’s dominion or beholden to that interested party.”
14 McElrath v. Kalanick, 224 A.3d 982, 991 (Del. 2020) (emphasis added). In other words, the
15 independence analysis is irrelevant unless Plaintiffs plead particularized facts showing that a
16 director is “interested” in the litigation. Plaintiffs have not done so here.
17 The Opposition claims that Ellison is “interested” because the alleged discrimination
18 somehow led to increased profits and higher dividends, and therefore, a “personal benefit” for
19 Ellison. Putting aside that Plaintiffs nowhere support their claim of discrimination—let alone
20 their assertion that discrimination increases profits and dividends—Ellison’s receipt of dividends
21 does not meet the test for “personal benefit.” “Personal benefit” requires receipt of a benefit not
22 equally shared with other stockholders. Here, Ellison receives dividends exactly the same way
23 other stockholders do: pro rata based on his holdings.
24 Plaintiffs also fail to plead particularized facts showing that Ellison or any other Director
25 Defendant is interested in the Section 14(a) and breach of fiduciary duty claims. Nothing in the
26 Complaint shows that Oracle or its Board engaged in any discrimination, much less that Oracle’s
27 2018 and 2019 Proxy Statements (“Proxies”) were false. The Opposition relies on the same trio
28 of allegations that the Motion showed were inadequate and irrelevant. Oracle won the 2017
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC 1
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 8 of 28
1 Department of Labor action, and contests the pending Jewett class action, and neither of those
2 actions alleges anything about Board-level discrimination anyway. As for the two letters from
3 some members of Congress, they discuss “optics,”
` and make no allegations of violations of law.
4 Because no Director Defendant is “interested,” the Court should dismiss the Complaint without
5 reaching the issue of whether any Director Defendant lacks independence from Ellison.
6 The Opposition also ignores numerous other fatal deficiencies. To name a few: The
7 Complaint fails “to plead facts specific to each director,” in violation of Rule 23.1’s prohibition
8 on group pleading. That is fatal, and the Opposition ignores it. The Complaint fails to allege that
9 the Director Defendants acted with negligence (a necessary element of a Section 14(a) claim),
10 much less bad faith (as required to allege a non-exculpated breach of fiduciary duty claim).
11 Plaintiffs ignore that as well. The Opposition also fails to meaningfully respond to the Motion’s
12 showing that the Director Defendants are not “interested” in the Section 14(a) claim, because the
13 Complaint does not seek monetary relief for that claim. That, too, is fatal. And Plaintiffs
14 continue to cite the 2011 HP litigation without disputing that the statute of limitations has run.
15 Even if Plaintiffs had adequately alleged Ellison was “interested” (they have not),
16 Plaintiffs have also failed to allege that a majority of directors lack independence from Ellison.
17 Plaintiffs concede the independence of four directors (Fairhead, Moorman, Parrett, and Sikka).
18 For four others (Chizen, Boskin, Panetta, and Berg), Plaintiffs ignore the Motion’s showing that
19 director compensation, decades-old one-off business relationships with Ellison’s adult children,
20 and ties to Stanford University do not overcome the presumption of independence afforded to
21 outside directors. Those eight directors are independent and constitute a majority of the Board.
22 Finally, for many of the same reasons that demand is not excused, dismissal is appropriate
23 under Rule 12(b)(6) because Plaintiffs fail to state any claim upon which relief may be granted.
24 I. PLAINTIFFS FAIL TO ALLEGE THAT DEMAND IS EXCUSED.
25 A. Plaintiffs Get the Law Wrong: Unless Plaintiffs Show That a Director
Is “Interested,” They Cannot Establish Demand Futility.
26
27 Plaintiffs’ Opposition begins by muddying the legal standard. The Opposition asserts that
28 demand is excused if “there is a majority of directors that are either interested and/or lack
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC 2
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 9 of 28
1 independence.” (Opp. at 10.) That is not the law.
2 Rule 23.1 requires Plaintiffs to plead particularized facts creating a reasonable doubt that a
3 majority of the Board would be (a) disinterested `or (b) independent from an interested director.
4 (Mot. at 10 (collecting cases)); McElrath, 224 A.3d at 991; In re Oracle Corp. Deriv. Litig.,
5 No. C 10-3392 RS, 2011 WL 5444262, at *6 (N.D. Cal. Nov. 9, 2011). This legal framework is
6 not up for debate. United Food & Com. Workers Union v. Zuckerberg, which Plaintiffs
7 repeatedly cite, directly contradicts Plaintiffs’ statement of the law and confirms that to show
8 “interestedness,” Plaintiffs must plead particularized facts showing that the director “received a
9 personal benefit from the [alleged] wrongdoing that was not equally shared [with] the
10 stockholders” or “face[s] a substantial likelihood of liability on any of the claims that are the
11 subject of the litigation demand.” C.A. No. 2018-0671-JTL, 2020 WL 6266162, at *16, *19
12 (Del. Ch. Oct. 26, 2020) (emphasis added) (“UFCW”). And the independence prong examines
13 whether a director is “subject to the interested party’s dominion or beholden to that interested
14 party.” McElrath, 224 A.3d at 991 (emphasis added). The cases Plaintiffs cite agree. 1
15 Accordingly, the analysis starts—and often ends—with whether any director is interested.
16 See id.; Oracle, 2011 WL 5444262, at *6 (If “one or more board members is [not] disqualified as
17 interested, there is no reason to evaluate” independence.).
18 In addition, Plaintiffs do not dispute that Delaware law affords directors a “presumption
19 that they were faithful to their fiduciary duties, and the burden is on the plaintiff in a derivative action
20 to overcome that presumption.” See Ocegueda v. Zuckerberg, 2021 U.S. Dist. LEXIS 52465, at
21 *13 (N.D. Cal. Mar. 19, 2021) (“Zuckerberg”) (collecting cases).
22 B. No Director Is “Interested” in This Litigation.
23 1. No Director Faces a Substantial Likelihood of Liability for
Breach of Fiduciary Duty or for Violation of Section 14(a).
24
25 Plaintiffs assert that all of the directors (except Sikka) face a substantial likelihood of
26
1
27 See UFCW, 2020 WL 6266162, at *16 (Plaintiffs must show “another person was
interested in the alleged wrongdoing, and the director lacks independence from that person”);
28 Rales v. Blasband, 634 A.2d 927, 936 (Del. 1993) (same).
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC 3
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 10 of 28
1 liability for breach of fiduciary duty and for violation of Section 14(a) for allegedly disseminating
2 misleading statements in the 2018 and 2019 Proxies. 2 (Opp. at 21-25.) Nothing in the
3 Complaint, however, contradicts any statement in
` the Proxies. In addition to failing to allege
4 falsity, numerous fatal deficiencies plague the Complaint.
5 a. Nothing in the Complaint Contradicts Oracle’s Stated
“Commit[ment] to Actively Seeking Women and
6 Minority Candidates” for the Board.
7 (i) Five Fatal Deficiencies Require Dismissal.
8 The Motion provided five independent reasons why the Complaint fails to adequately
9 allege Oracle made false statements about its “commit[ment] to actively seeking women and
10 minority candidates” for the Board: (1) the Complaint includes no allegations about Oracle’s
11 pool of director candidates or the nomination and search process; (2) the challenged statements
12 covered both racial and gender diversity; (3) the 2017 DOL and Jewett actions say nothing about
13 Oracle’s director nomination and search process; (4) the 2017 actions were public knowledge, so
14 investors were aware of the allegations, and Oracle was not required to self-flagellate by
15 endorsing those contested allegations; and (5) statements of corporate commitments are not
16 actionable under Retail Wholesale & Dep’t Store Union Local 338 Ret. Fund v. Hewlett-Packard
17 Co., 845 F.3d 1268 (9th Cir. 2017). (Mot. at 13-17.)
18 Plaintiffs ignore the first four points, each of which independently shows that Oracle did
19 not mislead about its commitment to seeking diverse director candidates. That is fatal.
20 As to the last, Plaintiffs argue only that Retail Wholesale “emphasized that the challenged
21 statements were made in the company’s ethics code” and that Retail Wholesale “distinguished the
22 Sixth Circuit’s decision in [In re Omnicare, Inc. Sec. Litig., 769 F.3d 455 (6th Cir. 2014)], which
23 involved false and misleading statements in SEC filings.” (Opp. at 26-27 (emphasis omitted).)
24 Not so. Retail Wholesale distinguished Omnicare because Omnicare involved statements of fact,
25 not non-actionable statements of commitment. Omnicare’s SEC filing stated that “it was in
26 2
Indeed, even that argument misrepresents the Complaint, which only alleges “Demand is
27 Futile Against the Officer Directors” because they “made or disseminated materially false and
misleading statements[.]” (Compl. ¶¶ 238-40 (emphasis added)). For that reason alone, the Court
28 should conclude that the Outside Directors are not interested.
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC 4
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 11 of 28
1 material compliance with state and federal law” despite defendants’ prior internal audits
2 “reveal[ing] pervasive Medicare fraud” and “conduct leading to a $98 million settlement with the
3
3 government.” Retail Wholesale, 845 steven70@example.org.
`
4 Further, nothing in Retail Wholesale suggests commitments made in SEC filings are
5 excluded from its holding. And courts routinely apply Retail Wholesale in that context. 4 In fact,
6 just last week, a court in this district applied Retail Wholesale to dismiss a strikingly similar
7 complaint that challenged statements in Facebook’s proxy expressing the corporation’s
8 commitment to diversity. See Zuckerberg, 2021 U.S. Dist. LEXIS 52465, at *24-25; see also
9 Ferris v. Wynn Resorts Ltd., 462 F. Supp. 3d 1101, 1121 (D. Nev. 2020) (SEC filing’s reference
10 to statements about honesty, using good judgment, etc. were non-actionable); In re Lyft Inc. Sec.
11 Litig., 484 F. Supp. 3d 758, 770 (N.D. Cal. 2020) (similar). This Court should follow suit.
12 The Opposition’s only remaining argument is that the Proxies were misleading because
13 “the Board and the Governance Committee have never in good faith actively sought minority
14 candidates.” (Opp. at 6, 22.) As the Motion showed, the Complaint contains no particularized
15 allegations at all about the process by which Oracle’s Board evaluates and selects new Board
16 members. Further, the Board’s historical and present composition puts the lie to Plaintiffs’ bald
17 assertion that the Director Defendants seek to exclude minority candidates. 5 (Mot. at 14, 17.) As
18 in Zuckerberg, Plaintiffs’ conclusory allegations fail. 2021 U.S. Dist. LEXIS 52465, at *5-6, *17.
19 (ii) The Complaint Also Fails to Allege Falsity.
20 Along with the above fatal deficiencies, the Complaint does not adequately allege any
21 3
The other two cases Plaintiffs cite are not Rule 23.1 cases and share no similarity with
22 the facts alleged here. Constr. Laborers Pension Tr. v. CBS Corp., 433 F. Supp. 3d 515, 539
(S.D.N.Y. 2020) (finding falsity where statement about commitment to harassment-free
23 workplace was contradicted by CEO’s concealing long history of sexual harassment and board’s
knowledge of related criminal complaint and internal investigation); In re Signet Jewelers Ltd.
24 Sec. Litig., No. 16 Civ. 6728 (CM), 2018 U.S. Dist. LEXIS 199809, at *17-18 (S.D.N.Y. Nov. 26,
2018) (statement describing confidential class action arbitration as limited to 15 employees and as
25 alleging discriminatory practices at the “store-level” adequately alleged to be false because
arbitration involved 200 employees and allegations of discrimination “at all levels”).
26 4
In Retail Wholesale, the defendant published the challenged code of ethics “on the
investor-relations portion of [its] website.” 845 steven70@example.org.
27 5
Paragraph 159 also provides no support because it only makes conclusory allegations
28 about three of the directors (Panetta, Chizen, and Berg), not the Board as a whole.
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1 wrongdoing by the Company, much less wrongdoing caused by or known to the Director
2 Defendants that contradicted any statement in Oracle’s 2018 and 2019 Proxies. (Mot. at 13.)
3 The Opposition responds by reciting the same trio
` of inadequate allegations—the DOL suit, the
4 Jewett action, and the congressional letters—because there is nothing more that Plaintiffs can say.
5 Plaintiffs continue to rely on the two irrelevant 2017 lawsuits. Despite conceding that
6 Oracle won the DOL action because the DOL failed to prove any theory of discrimination, the
7 Opposition nevertheless cites that suit over a dozen times. (Opp. at 4-5, 7, 22-24, 26, 32-33.) But
8 a failed lawsuit cannot form the basis of a stockholder derivative action. As for the pending 2017
9 Jewett action, there has been no finding of discrimination at any level within Oracle, so that case
10 also cannot support falsity. See In re Countrywide Fin. Corp. Mortg.-Backed Sec. Litig., 934 F.
11 Supp. 2d 1219, 1226 (C.D. Cal. 2013); Schaffer v. Horizon Pharma PLC, No. 16-CV-1763
12 (JMF), 2018 WL 481883, at *5 (S.D.N.Y. Jan. 18, 2018). In addition, as shown in the Motion
13 (but ignored by Plaintiffs), neither Jewett nor the DOL action makes any allegations at all about
14 Board-level discrimination. Nor can either support a finding of falsity, because Oracle was not
15 required to endorse those contested and publicly available allegations. (See Mot. at 29, 32.)
16 Plaintiffs also say that Oracle has been the subject of “two Congressional inquiries.”
17 (Opp. at 1, 7, 22-24, 26, 32.) But those “inquiries” are actually just two letters sent by certain
18 members of Congress discussing “optics,” not alleging wrongdoing or violations of law. (Compl.
19 ¶¶ 9, 77.) At most, the letters “express[ ] dismay about allegations of pay discrimination”
20 (Compl. ¶ 9 (January 2019)) and concern that Oracle’s Board did not, in November 2019, have a
21 Black or Asian American director (Compl. ¶ 77 (November 2019)). 6 That does not support an
22 inference of steven70@example.org. For the same reason, the letters do not constitute particularized
23 allegations of wrongdoing caused by or known to the Director Defendants.
24 In short, the 2017 actions and the congressional letters are inadequate to show any
25
26 6
Plaintiffs ignore that one month after the November 2019 letter, Oracle appointed Vishal
27 Sikka, an Asian American, to the Board. Press Release, Oracle Names Vishal Sikka to the Board
of Directors, Oracle (Dec. 9, 2019), https://www.oracle.com/corporate/pressrelease/vishal-sikka-
28 named-to-board-of-directors-120919.html.
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1 steven70@example.org. And they do not show the falsity of any statement in the Proxies. 7
2 The cases Plaintiffs cite show what particularized factual allegations look like. In
3 Rosenbloom v. Pyott, 765 F.3d 1137, 1150 (9th Cir.
` 2014), “the plaintiffs ‘offer[ed] a battery of
4 particularized factual allegations that strongly support[ed] an inference . . . that the Board knew of
5 and did nothing about illegal activity.’ Such allegations included that the board ‘closely and
6 regularly monitored’ potentially illicit activities; ‘received data’ that ‘qualifie[d] as a “red flag” of
7 illegality; and ‘received repeated FDA warnings about illegal’ activities.” Towers v. Iger,
8 912 F.3d 523, 532 (9th Cir. 2018) (quoting Rosenbloom, 765 F.3d at 1152-54) (internal citations
9 omitted). The same goes for the other cases Plaintiffs cite. See In re Wells Fargo & Co. S’holder
10 Deriv. Litig., 282 F. Supp. 3d 1074, 1082, 1096 (N.D. Cal. 2017) (company attributed growth to
11 cross-selling rather than fraudulent account creation, when board knew of, amongst other things,
12 whistleblower lawsuit and investigations by the Office of the Comptroller of the Currency and the
13 Consumer Financial Protection Bureau, showing over two million unauthorized accounts); In re
14 INFOUSA, Inc. S’holders Litig., 953 A.2d 963, 982, 991 (Del. Ch. 2007) (detailing years of self-
15 dealing between director-affiliated companies, and finding company falsely stated it paid director
16 $1.5 million for lease of aircraft, yet $600,000 of that amount was for use of personal residences).
17 Those cases are nothing like Plaintiffs’ unsupported conspiracy theory that the Director
18 Defendants must be “racist” because the Board does not at presently include a Black director.
19 b. Plaintiffs Have Not Alleged the Falsity of the Directors’
Opinion Statements About Stockholder Proposals.
20
21 Plaintiffs also do not substantively respond to the Motion’s showing that the Director
22 Defendants did not make subjectively or objectively false opinion statements recommending that
23 stockholders reject proposals to (a) prepare a pay equity report; (b) implement director term
24 limits; and (c) require an independent Board chair. (Mot. 17-20 (citing Omnicare Inc. v. Laborers
25 Dist. Council Const. Indus. Pension Fund, 575 U.S. 175, 186 (2015)); City of Dearborn Heights
26
7
Plaintiffs’ contention in a footnote that “information regarding diversity is required to be
27 disclosed by Item 407 of SEC Regulation S‐K,” is a red herring. (Opp. at 27, n.9.) As shown in
the Motion, Oracle complied with Item 407. (Mot. at 17, n.13.)
28
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1 Act 345 Police & Fire Ret. Sys. v. Align Tech., Inc., 856 F.3d 605, 616 (9th Cir. 2017)).) 8
2 Pay Equity Report. The Opposition says that the Board lied when it recommended that
3 stockholders vote against the pay equity report proposal.
` Plaintiffs argue that Oracle was not
4 “committed to ensuring that [it] does not discriminate on the basis of gender” because the Board
5 was aware of the 2017 DOL action, the Jewett class action, and the two letters from some
6 members of Congress. (Opp. at 7 (citing Compl. ¶¶ 54, 76-88, 96, 125-26, 130).) That fails for
7 all the reasons previously explained. Moreover, as the Motion showed, the Board recommended
8 against the pay equity report proposal because its preparation “would be costly and time-
9 consuming and [because it] . . . would not lead to meaningful gains” in pay equity. (Mot. at 19
10 (quoting Compl. ¶¶ 55, 126).) Plaintiffs say nothing about why that statement was false. Lastly,
11 Plaintiffs repeat their assertion that the 2017 and 2018 Board minutes show “the Board and its
12 committees barely discussed and reviewed any documents before signing off on the pre-drafted
13 opposition statements to stockholder proposals for a pay equity report.” (Opp. at 7, 27.) Relying
14 on the actual Board minutes, as opposed to Plaintiffs’ made-up characterization, the Motion
15 showed that “Board members asked questions and discussed” the stockholder proposal. (Mot. at
16 18-19 (quoting Hill Decl., Ex. A).) Moreover, “‘directors of Delaware corporations are fully
17 protected in relying in good faith on the reports of officers and experts.’” (Id. (quoting In re
18 Citigroup S’holder Deriv. Litig., 964 A.2d 106, 132 (Del. Ch. 2009))). The Opposition ignores
19 both the judicially-noticeable facts and the law.
20 Director Term Limits. Here, the Opposition ignores that its “leading academics” are
21 really a generic survey of investors and that, in either case, the Complaint alleges no facts
22 suggesting that the Director Defendants did not actually believe that “imposing limits on director
23 tenure would arbitrarily deprive [the Board] of the valuable contributions of its most experienced
24 members.” (Mot. at 18 (discussing Compl. ¶¶ 122, 152).) Without any factual allegations,
25 Plaintiffs argue that the Board’s reliance on director experience concealed that the Board’s refusal
26 8
Plaintiffs do not mention Align. As for Omnicare, Plaintiffs block-quote it and assert
27 that the opinion statements are actionable because the Director Defendants allegedly performed
no investigation before recommending that stockholders vote against the proposals. (Opp. at 27.)
28 But Plaintiffs cite no factual allegation to support that assertion. (Id.)
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1 to “adopt director term limits and to appoint new African-American members to the Board” was
2 the result of “explicit or implicit racism” and a scheme to get themselves reelected. (Opp. at 7,
3 26.) Conclusory assertions of racism are not enough
` to survive a Rule 23.1 motion to dismiss.
4 Independent Chairperson. Plaintiffs say that the Director Defendants “did not
5 genuinely believe” that “an independent chair [was not] necessary to ensure that the Board
6 provides independent and effective oversight.” (Opp. at 7-8.) In support, Plaintiffs claim that
7 Ellison “caus[ed] the Company to engage in discriminatory hiring [and] pay practices” and that
8 the 2011 HP litigation was the result of Ellison’s “personal vendetta.” (Id. (citing Compl. ¶ 140).)
9 But Plaintiffs provide no factual allegations supporting their assertion that anyone engaged in
10 discrimination, let alone that Ellison “caused” any discrimination. Rejecting very similar
11 conclusory allegations, one recent decision put it concisely, “These are not facts: these are
12 conclusions.” Zuckerberg, 2021 U.S. Dist. LEXIS 52465, at *17 (rejecting allegation that “lack
13 of an independent chair resulted in great harm to Facebook because the Chair, as Facebook’s
14 CEO, engaged in” allegedly discriminatory conduct). As for Ellison’s claimed “personal
15 vendetta,” the Complaint admits that Ellison was not the Chair of the Board when the HP dispute
16 began, so that dispute cannot support the importance of an independent chair, much less the
17 Board’s true beliefs about the need for an independent chair. 9 (Compl. ¶¶ 31, 33.)
18 Say on Pay. Lastly, Plaintiffs assert that the “2019 and 2020 Proxies” misled
19 stockholders by asking them to vote in favor of “say on pay” proposals, “but failed to disclose
20 that the executives’ achievement of performance goals was based in part on unlawful
21 discriminatory hiring and pay practices.” (Opp. at 8, 23 (citing Compl. ¶¶ 136-37, 147).) The
22 Complaint does not support that theory. Paragraphs 137 and 147 just restate the same conclusory
23 assertion. And Paragraph 136 just quotes the compensation proposal. Otherwise, Plaintiffs rely
24 only on the same trio of allegations—the failed DOL lawsuit, the congressional letters, and the
25 pending Jewett action—that are inadequate to show any wrongdoing and irrelevant to whether the
26 Director Defendants genuinely believed stockholders should vote for the compensation plan.
27 9
Nothing in the Complaint suggests that Henley, who was Chair of the Board from 2004
28 to 2014, caused the HP/Oracle dispute. (Compl. ¶ 33.)
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1 (Mot. at 32 (collecting cases).) Similarly, those allegations cannot show the objective falsity of
2 the Board’s recommendation in favor of the executive compensation proposal. 10
3 c. Plaintiffs Have
` Not Alleged the Falsity of Statements
About Oracle’s Internal Controls.
4
5 Plaintiffs argue that the 2019 Proxy falsely stated that Oracle’s “Corporate governance
6 structure was ‘effective’ and provided ‘oversight of management and Board accountability.’”
7 (Compl. ¶ 145; see also Opp. at 5, 23-24.) That is a nonstarter because neither the 2019 nor the
8 2018 Proxy contains that broad-brush statement. (Hill Decl., Exs. E-F.) In any event, as with the
9 other allegedly false statements, Plaintiffs do not attempt to explain how the 2017 actions or the
10 congressional letters show the Company lacked effective internal controls. The other paragraphs
11 Plaintiffs cite are filled with conclusory assertions, not particularized factual allegations. 11 (See,
12 e.g., Compl. ¶ 65 (“The Individual Defendants engaged in a conspiracy, common enterprise,
13 and/or common course of conduct[.]”).)
14 d. Plaintiffs Ignore Additional Reasons Why the Complaint
Fails to Allege Any Director Is Interested in the Section
15 14(a) and Breach of Fiduciary Duty Claims.
16 The Motion also pointed to multiple other reasons why Plaintiffs fail to show that any
17 Director Defendant is interested. Each of those reasons independently supports dismissing the
18 Complaint under Rule 23.1. Yet Plaintiffs ignore them.
19 The Motion showed that controlling law prohibits group pleading and requires derivative
20 plaintiffs to “plead facts specific to each director.” Desimone v. Barrows, 924 A.2d 908, 943
21 (Del. Ch. 2007) (emphasis in original); (see Mot. at 14, 19, 33 n.29). The Opposition’s failure to
22
10
In addition, as the stockholder compensation vote was “not binding on Oracle, the
23 Board or the Compensation Committee” (Compl. ¶ 136), Plaintiffs cannot show that they were
harmed by that alleged misstatement. See Hastey on behalf of YRC Worldwide, Inc. v. Welch,
24 449 F. Supp. 3d 1053, 1067 (D. Kan. 2020) (advisory vote on executive compensation could not
satisfy essential link requirement); Yu Liang v. Berger, No. 13-CV-12816-IT, 2015 WL 1014525,
25 at *10 (D. Mass. Mar. 9, 2015) (same).
11
26 The facts alleged here are nothing like those alleged in Shaev v. Baker, No. 16-CV-
05541-JST, 2017 WL 1735573, at *4, *15 (N.D. Cal. May 4, 2017) (company failed to disclose
27 “seriously deficient internal and disclosure controls” despite board knowing of Office of the
Comptroller of the Currency determination that the company “lack[ed] an appropriate control or
28 oversight structure” and of multiple federal and state investigations).
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1 respond to that argument at all, much less with any contrary law or any director-specific
2 allegations (because neither exists), is an independent basis for dismissal under Rule 23.1.
3 The Court should also dismiss both the Section
` 14(a) and the breach of fiduciary duty
4 claims because Plaintiffs fail to allege negligence for the Section 14(a) claim, much less gross
5 negligence or bad faith, as required for breach of fiduciary duty. (Mot. at 20, 22 n.15, 29-33.)
6 Plaintiffs ignore that argument, which independently supports dismissal under Rule 23.1.
7 Similarly, the Motion demonstrated that the Complaint fails to adequately allege loss
8 causation or a cognizable harm, as required by Section 14(a). (Mot. at 21.) Plaintiffs ignore
9 those arguments, too. At most, Plaintiffs assert that the Company was harmed by receiving
10 congressional letters and by defending against the dismissed DOL suit and the Jewett action.
11 (Opp. at 8, 24.) But Plaintiffs cite no authority for the novel proposition that a company can be
12 held liable for successfully defending itself against a lawsuit or for continuing to defend itself
13 against disputed allegations. See In re Cray Inc., 431 F. Supp. 2d 1114, 1134 (W.D. Wash. 2006)
14 (“[D]erivative claims are foreclosed when they merely allege damages based on the potential
15 costs of investigating, defending, or satisfying a judgment or settlement for what might be
16 unlawful conduct.”). Plaintiffs also do not explain how receiving the congressional letters
17 harmed Oracle. Plaintiffs again point to unspecified “settlements” (Opp. at 8) that the Complaint
18 alleges nothing about (see Mot. at 21), and to the HP litigation, which Plaintiffs concede is time-
19 barred and unrelated to their assertions about discrimination. And, without supporting authority,
20 Plaintiffs continue to rely on alleged harm to Oracle’s reputation and goodwill, which the Motion
21 showed were speculative and insufficient to establish loss causation. (Mot. at 21.)
22 Relatedly, the Motion showed that the Complaint fails to allege that the purported
23 misstatements were an “essential link” to any of those alleged (non-existent) harms because the
24 alleged misstatements did not “directly authorize[ ] the loss-generating corporate action.” (Mot.
25 at 20-21 (collecting cases).) Plaintiffs’ response to that argument misses the mark. Plaintiffs
26 argue that the alleged “material omissions” were the “essential link” to the stockholders’
27 reelection of the directors and the executive compensation approval. (Opp. at 24.) But the
28 Motion showed that courts routinely reject those exact types of allegations as insufficient to
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1 establish Section 14(a)’s essential link requirement. (Mot. at 21 (collecting cases)); Zuckerberg,
2 2021 U.S. Dist. LEXIS 52465, at *25-26. Rather than discussing the authority cited in the
3 Motion, Plaintiffs cite to Shaev and In re Countrywide,
` which do not share any similarities to this
4 action. See supra n.11 & infra n.15. 12 More fundamentally, Plaintiffs fail to allege or explain
5 how the alleged misstatements in the Proxies were an essential link to the Company incurring
6 costs related to the Director Defendants’ compensation (Opp. at 7-9)—the say-on-pay proposal
7 was advisory, and the Complaint alleges no connection between the Outside Directors’
8 compensation and the alleged misstatements. See supra n.10.
9 Lastly, Plaintiffs offer only a misguided response to the Motion’s showing that the
10 Director Defendants are not “interested” in the Section 14(a) cause of action because Plaintiffs do
11 not seek any monetary damages for that claim—a fact that Plaintiffs do not deny (Opp. at 25).
12 (Mot. at 12-13 (citing Compl. ¶ 323; MCG Capital Corp. v. Maginn, No. 4521-CC, 2010 WL
13 1782271, at *21 (Del. Ch. May 5, 2010); In re Am. Apparel, Inc. 2014 Deriv. S’holder Litig.,
14 No. CV1405230MWFJEMX, 2015 WL 12724070, at *15 (C.D. Cal. Apr. 28, 2015)).) Plaintiffs
15 say that the cited cases are “inapposite [ ] because they dealt with lack of damages as a result of
16 exculpatory provisions adopted under 8 Del. Code § 102.” (Opp. at 25 (emphasis omitted).)
17 According to Plaintiffs, that does not apply here because Plaintiffs allege “that Defendants have
18 breached their duties of loyalty and good faith,” which may not be exculpated under §
19 102(b)(7). 13 (Opp. at 25-26.)
20 That argument misses the mark. As the Motion discussed, Plaintiffs must plead a breach
21 of the duty of loyalty or good faith, because Oracle’s Articles of Incorporation has exculpated its
22 directors from liability for any lesser breach. (Mot. at 29.) More to the point, § 102(b)(7) and the
23 directors’ fiduciary duties are irrelevant to this issue because Plaintiffs have disclaimed monetary
24
12
The inadequate allegations in this case stand in contrast to the other case Plaintiffs cite.
25 See In re Zoran Corp. Deriv. Litig., 511 F. Supp. 2d 986, 1016 (N.D. Cal. 2007) (essential link
shown where misleading proxies authorized back-dated stock options for directors).
26 13
The Opposition also says that the Section 14(a) claim seeks “injunctive relief,” which
27 might result in the Director Defendants losing compensation. (Opp. at 25.) But as explained,
interestedness requires that the director face a substantial likelihood of liability, not possible
28 decreased compensation. Plaintiffs point to no case suggesting otherwise.
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1 relief for the Section 14(a) claim. (Mot. at 12-13.) So, the Director Defendants do not have “a
2 disabling ‘interest’ in” that claim because non-monetary “equitable relief” that requires the
3 corporation to implement changes “does not subject
` [director] defendants to the type of personal
4 liability necessary to excuse demand.” MCG Capital, 2010 WL 1782271, at *21; In re Am.
5 Apparel, 2015 WL 12724070, at *15. Plaintiffs have no response to that dispositive argument. 14
6 2. Ellison Is Not “Interested” Merely Because He Receives
Dividends as an Oracle Stockholder.
7
8 Plaintiffs’ new theory is that Ellison is interested because, by allegedly “concealing and
9 perpetuating the alleged wrongdoing,” he received “dividends” “not shared by shareholders as a
10 whole, given that no other shareholder holds such a large block of Oracle stock.” 15 (Opp. at 10-
11 11.) Neither the Complaint’s allegations nor the law supports Plaintiffs’ novel theory.
12 Factually, the Opposition cites nothing to support its assertion that Ellison “conceal[ed]
13 and perpetuat[ed]” or “allow[ed]” the alleged “unlawful business practices, including
14 discriminatory hiring and compensation practices.” (Opp. at 11.) That is because, as shown,
15 Plaintiffs have not adequately alleged any wrongdoing by Oracle, Ellison, or any other Director
16 Defendant. More to the point, the Complaint contains no allegations suggesting Ellison himself
17 was responsible for the alleged discrimination in the dismissed DOL action or the contested
18
19 14
Plaintiffs also have no response to Defendants’ showing that Plaintiffs’ Section 14(a)
claim based on the 2018 Proxy is time barred. (Mot. at 28 n.26.)
20 15
The Opposition also argues that the asserted “discriminatory hiring and payment
21 practices at Oracle” “could not have happened without Ellison’s knowledge” because he is
(allegedly) “involved in all aspects of the Company’s management.” (Opp. at 11.) But the cited
22 paragraphs discuss only outside director independence, and say nothing about Ellison’s
management responsibilities, much less why those responsibilities show that Ellison knew of any
23 (non-existent) discriminatory practices. (See Compl. ¶¶ 241-256); see Gulbrandsen ex rel. Wells
Fargo & Co. v. Stumpf, No. C-12-05968 JSC, 2013 WL 1942158, at *5 (N.D. Cal. May 9, 2013)
24 (rejecting threadbare assertions that directors should have known about alleged wrongdoing).
That lack of factual allegations contrasts with the cases Plaintiffs cite. See Unión de Empleados
25 de Muelles de Puerto Rico PRSSA Welfare Plan v. UBS Fin. Servs. Inc., 704 F.3d 155, 161, 165-
66 (1st Cir. 2013) (excusing demand where director had “high level” involvement in “scheme of
26 manipulative trading . . . to manufacture the appearance of market interest”); In re Countrywide
Fin. Corp. Deriv. Litig., 554 F. Supp. 2d 1044, 1075-77, 1080-81 & n.40 (C.D. Cal. 2008)
27 (“inside directors” had “significant management responsibilities,” and “fundamental changes to
the Company’s business model” were used to “achieve the performance measures that were the
28 benchmarks [for] compensation plans”).
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1 Jewett action. The same is true for the congressional letters. In addition, the Complaint says
2 nothing about Ellison’s responsibility for or involvement in the Board’s director nomination
3 process. In fact, the Complaint concedes that Ellison
` was not on Oracle’s Nomination and
4 Governance Committee, which is responsible for searching for and nominating directors.
5 (Compl. ¶¶ 118, 120, 133.)
6 Moreover, the law precludes Plaintiffs’ wrongheaded claim that receipt of pro rata
7 dividends means that a director is “interested.” For that argument, Plaintiffs rely on UFCW,
8 where the Court of Chancery found that Mark Zuckerberg was interested because he received a
9 benefit that no other stockholder would receive. 2020 WL 6266162, at *2. Specifically,
10 Zuckerberg proposed, and the board subsequently approved, a stock reclassification that would
11 have allowed Zuckerberg to satisfy his “Giving Pledge”—a pledge to donate a majority of his
12 wealth during his lifetime, which was mostly tied up in Facebook stock—without losing control
13 of Facebook. Id. at *2.
14 Thus, contrary to Plaintiffs’ position, directors are not “interested” merely because they
15 are controlling stockholders 16 or own a substantial amount of the company’s shares. Id. at *21;
16 (Opp. at 11-12, 12 n.2). Rather, in UFCW, Zuckerberg was “interested” because the
17 reclassification proposal allowed him to sell his economic interest in Facebook while retaining
18 control of the company—a benefit not shared by any other stockholder. Here, Ellison’s receipt of
19 dividends is the opposite—every stockholder receives dividends at precisely the same rate. 17
20 * * *
21 To plead demand futility, Plaintiffs must allege particularized facts showing that at least
22 one director has a disabling “interest” in the litigation. Plaintiffs have not done so here, so the
23 Complaint should be dismissed under Rule 23.1.
24
16
In addition, the Complaint rebuts Plaintiffs’ claim that Ellison is a controlling
25 stockholder. (Compl. ¶ 210 (alleging Ellison owns 35.4% of Oracle).)
17
26 For all the reasons discussed, the law also does not support Plaintiffs’ new, unalleged
theory that Catz and Henley are interested because deciding to sue Oracle “would jeopardize their
27 positions at Oracle and their lavish compensation.” (Opp. at 11-12.) As shown, Plaintiffs have
not adequately alleged any wrongdoing by anyone, much less Catz and Henley, and the mere
28 receipt of compensation is not enough to show interestedness.
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1 C. Plaintiffs Fail to Allege That a Majority of the Board Lacks
Independence from Ellison.
2
3 Because Plaintiffs have not shown that any
` Director Defendant is interested, the Court
4 should dismiss the Complaint without reaching the independence prong of the demand futility
5 analysis. McElrath, 224 steven70@example.org. In any event, Plaintiffs’ independence arguments, which
6 turn entirely on showing Ellison is interested, also fail.
7 To begin, Plaintiffs concede that Fairhead, Moorman, Parrett, and Sikka are independent.
8 The Opposition ignores Defendants’ arguments and authorities and fails to rebut the Motion’s
9 showing that Panetta, Berg, Boskin, and Chizen are also independent.
10 Panetta. The Motion showed that the Complaint’s two factual allegations about Panetta
11 do not show that he lacks independence from Ellison. First, the Complaint fails to allege that
12 Panetta’s director compensation is material to him or that Ellison can unilaterally affect it. (Mot.
13 at 27 (citing MCG Capital, 2010 WL 1782271, at *20).) Second, Panetta’s one-off involvement
14 with Ellison’s daughter’s production company for the film Zero Dark Thirty falls far short of
15 showing Panetta lacks independence from Ellison. (Id.) In fact, the Complaint alleges no
16 interaction at all between Panetta and Ellison’s daughter. Rather, it alleges only that years before
17 he joined the Board, Panetta cooperated with the producer and screenplay writer, Mark Boal.
18 (Compl. ¶¶ 296-97.) And lastly, nothing can be inferred from the fact that Panetta, the then-CIA
19 director, cooperated with the development of a film about the hunt for Osama Bin Laden.
20 Pointing to In re Oracle Corp. Derivative Litig., No. CV 2017-0337-SG, 2018 WL
21 1381331, at *17 (Del. Ch. Mar. 19, 2018), Plaintiffs only add that without Ellison’s support,
22 Panetta would not have been reelected in 2018, so he must lack independence from Ellison.
23 (Opp. at 18.) But Oracle does not say that every Oracle director lacks independence from Ellison
24 merely because Ellison might withhold his support. In re Oracle found that the threat of losing a
25 directorship combined with “multiple layers of [outside] business connections” with the Company
26 may create a reasonable inference that the director could not impartially consider whether to sue
27 Ellison. Id. (discussing, among other things, director’s affiliation with venture capital firms that
28 “operate in areas dominated by” Oracle and “high-level positions at another company that does
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1 substantial business” with the Company). That does not apply to Panetta because Plaintiffs have
2 not alleged that Panetta has any outside business connections with Oracle or with Ellison.
3 Berg. Plaintiffs also fail to show that Berg
` lacks independence. The Opposition just
4 repeats that Berg receives compensation for being an Oracle director and that 15 years ago, Berg
5 acted as a talent agent for Ellison’s son for the movie Flyboys. (Opp. at 19-20.) As the Motion
6 showed, unreliable allegations about Berg’s wealth and a relationship with Ellison’s son 15 years
7 ago do not show a lack of independence. (Mot. at 27-28.)
8 Boskin and Chizen. Plaintiffs offer more of the same with respect to Boskin and Chizen.
9 As discussed, allegations about director compensation are not enough without factual allegations
10 showing that Ellison could unilaterally affect it and that the compensation was material. (Mot. at
11 26.) In addition, UFCW shows that Oracle’s and Ellison’s alleged Stanford connections are not
12 enough to infer that Boskin cannot independently evaluate matters concerning Ellison for fear of
13 jeopardizing his employment at Stanford, where he has been a faculty member for 50 years.
14 (Compl. ¶ 282); UFCW, 2020 WL 6266162, at *22 (explaining that institution affiliation requires
15 “specific allegations that would support a reason to doubt that the director could exercise
16 independent judgment on the issue presented”). All the more so for Chizen, who the Complaint
17 alleges was once a speaker in a Stanford course on cloud computing—i.e., Chizen faces no threat
18 of losing that former position. (Compl. ¶¶ 287-89.)
19 And Plaintiffs have no response to the Supreme Court of Delaware’s decision in Beam ex
20 rel. Martha Stewart Living Omnimedia, Inc. v. Stewart, which explains that “a characterization”
21 of “close friends[hip]”—like the Complaint’s allegation that Boskin and Ellison are “personal
22 friend[s]” (see, e.g., Compl. ¶ 286)—“is not enough to negate independence for demand excusal
23 purposes.” 18 845 A.2d 1040, 1051-52 (Del. 2004). Plaintiffs’ allegations about Boskin are also
24 insufficient in combination: “[F]or presuit demand purposes, friendship must be accompanied by
25 substantially more in the nature of serious allegations that would lead to a reasonable doubt as to
26 18
Ellison delivering sushi to Boskin in 1999 (Compl. ¶ 286) is nothing like Sandys v.
27 Pincus, 152 A.3d 124, 130 (Del. 2016) (joint ownership of private plane is a “partnership in a
personal asset” that requires “close cooperation” and suggests a “very close personal relationship
28 [ ] like family ties”).
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC 16
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 23 of 28
1 a director’s independence.” Id. (emphasis added). Nothing Plaintiffs allege comes close to
2 “serious allegations” creating a “reasonable doubt as to” Boskin’s independence.
3 No Director Defendant is interested in this
` litigation. That independently supports
4 dismissal under Rule 23.1. In addition, a majority of the Board (Fairhead, Moorman, Parrett,
5 Sikka, Panetta, Chizen, Berg, and Boskin) is independent. That, too, supports dismissal.
6 II. PLAINTIFFS’ CLAIMS ALSO FAIL UNDER RULE 12(b)(6).
7 If the Court does not dismiss the Complaint in its entirety under Rule 23.1, it should do so
8 under Rule 12(b)(6) because the Complaint fails to state a claim upon which relief can be granted.
9 A. Plaintiffs Have Not Stated a Section 14(a) or Breach of Fiduciary Duty
Claim Based on the Director Defendants’ Dissemination of Allegedly
10 False Proxy Statements.
11 Plaintiffs concede that the Rule 23.1 legal analysis applies equally to whether Plaintiffs
12 have adequately pled a Section 14(a) claim under Rule 12(b)(6). (Opp. at 34-35.) As shown,
13 Plaintiffs’ Section 14(a) claim fails for a host of reasons, so it also fails under Rule 12(b)(6).
14 See also Zuckerberg, 2021 U.S. Dist. LEXIS 52465, at *23-26 (dismissing Section 14(a) claim
15 based on substantially similar proxy statements).
16 Similarly, Plaintiffs agree that their breach of fiduciary duty claim based on alleged false
17 statements in the Proxies rises—and in this case falls—with the Rule 23.1 analysis. So for the
18 reasons discussed, the Court should dismiss that claim under Rule 12(b)(6), too.
19 B. The Complaint Fails to State a Caremark Claim.
20 Plaintiffs concede that they must plead that the Director Defendants breached their duty of
21 loyalty or acted in bad faith. (Opp. at 25, 30.) Plaintiffs say that the Complaint meets that burden
22 because the directors “ignored unlawful and discriminatory practices.” (Opp. at 30.) This is a
23 classic Caremark claim—“possibly the most difficult theory in corporation law upon which a
24 plaintiff might hope to win a judgment.” 19 Stone ex rel. AmSouth Bancorporation v. Ritter,
25 911 A.2d 362, 372 (Del. 2006) (citation omitted); In re Caremark Int’l Deriv. Litig., 698 A.2d
26
19
Plaintiffs attempt to muddle the Caremark standard by referencing the “Aronson test.”
27 (Opp. at 30-31.) Aronson has no bearing on the Rule 12(b)(6) analysis because Aronson is about
assessing demand futility. Aronson v. Lewis, 473 A.2d 805 (Del. 1984).
28
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC 17
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 24 of 28
1 959, 967 (Del. Ch. 1996). Plaintiffs concede that to state a non-exculpated claim under this
2 theory, the Complaint must plead facts showing that the Director Defendants “had actual or
3 constructive knowledge of” the alleged unlawful` and discriminatory practices and consciously
4 disregarded their duty to address that alleged misconduct. (Opp. at 30-31.) Further, the
5 Complaint fails to allege a “corporate trauma” proximately caused by the Board’s alleged “bad
6 faith.” (Mot. at 30.) Nothing in the Opposition rehabilitates the Complaint’s deficiencies.
7 1. The Complaint Fails to Plead Harm to Oracle.
8 Plaintiffs fail to plead any cognizable harm to Oracle. Supra at 11; (Mot. at 21, 32 n.28).
9 To recap: alleged harms to Oracle’s goodwill and reputation are too speculative to be actionable;
10 Plaintiffs concede that the claims based on the HP litigation are time barred; Oracle won the DOL
11 action; and the disputed Jewett action is pending, so it cannot serve as a basis for loss. (Mot. at
12 21, 31-32, 32 n.28); steven70@example.org. Plaintiffs respond with repetition, rather than refutation.
13 2. The Complaint Fails to Plead That Defendants Consciously
Disregarded “Red Flags.”
14
15 The Opposition contends that the DOL lawsuit, the Jewett action, and the congressional
16 letters were “red flags” that the Director Defendants consciously disregarded. (Opp. at 31.) That
17 argument fails. None of those allegations constitutes a red flag, and in any event, Oracle’s Board
18 did not ignore them. Oracle won the DOL lawsuit, is contesting the Jewett action, and appointed
19 a diverse Board member just one month after receiving the November 2019 congressional letter.
20 See Zuckerberg, 2021 U.S. Dist. LEXIS 52465, at *16 (“The timeline of the” red flags “resulted
21 in Facebook[] resolving the challenges . . . (and not ignoring them).”).
22 In addition, the Motion showed, and the Opposition ignores, that courts routinely hold that
23 such lawsuits and inquiries are not “red flags.” (Mot. at 32 (collecting cases).) Plaintiffs are
24 wrong that the cited cases turned on whether the purported red flags “made their way to the
25 board.” (Opp. at 32.) To the contrary, those courts held that the lawsuits and inquiries were not
26 red flags even if the directors’ knowledge of them was assumed. See Marvin H. Maurras
27 Revocable Tr. v. Bronfman, No. 12 C 3395, 2013 WL 5348357, at *6 (N.D. Ill. Sept. 24, 2013)
28 (assuming “Defendants knew Accretive was being sued for FDCPA violations . . . that does not
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC 18
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 25 of 28
1 make it reasonable to infer that Defendants had actual knowledge of ongoing violations, much
2 less that they encouraged or condoned such violations”); In re Johnson & Johnson Deriv. Litig.,
3 865 F. Supp. 2d 545, 566 (D.N.J. 2011) (“the pertinent
` question is not whether the Board knew
4 about the subpoena but whether the subpoena is a determination of wrongdoing”). 20
5 Further, Plaintiffs concede that neither the DOL lawsuit nor the Jewett action contains
6 allegations about any discriminatory practices by the Board. (See Opp. at 32.) Despite Plaintiffs’
7 contrary characterization, the Complaint does not allege that the congressional letters contain any
8 allegations of wrongdoing or violations of law, at the Board level or any other level. (Compl. ¶¶
9 9, 77.) So, those are not red flags. Plus, Plaintiffs’ claim that the “Defendants[ ] fail[ed] to
10 ensure Board diversity” (Opp. at 32) ignores that more than one-third of Oracle’s Board is either
11 female or a member of a community of color (Mot. at 3-4; Compl. ¶ 1). Plaintiffs’ contention
12 really amounts to a claim that Oracle’s Board fails Plaintiffs’ made-up definition of diversity.
13 That is not enough under Rule 12(b)(6). 21
14 C. The Remaining State Law Claims Should Be Dismissed.
15 Aiding and Abetting. Plaintiffs’ aiding and abetting claim fails because Plaintiffs have
16 not pled a predicate violation. (Mot. at 33-34.) It also fails because Plaintiffs concede that the
17 Complaint disclaims any “knowing or reckless conduct.” (Compl. ¶ 318; see Mot. at 34.)
18 Abuse of Control. The Motion showed that Delaware does not recognize an independent
19
20
20 Plaintiffs do not even attempt to distinguish In re Intel Corp. Deriv. Litig., 621 F. Supp.
2d 165, 175 (D. Del. 2009), which supports the same point. And Plaintiffs fail to meaningfully
21 distinguish Melbourne Mun. Firefighters’ Pension Tr. Fund v. Jacobs, No. 10872-VCMR, 2016
WL 4076369, at *8 (Del. Ch. Aug. 1, 2016). (Opp. at 32.) In Melbourne, the board
22 “continuously monitored” the lawsuits and “consistently expressed . . . its view that its business
practices were not violative of” any laws. 2016 WL 4076369, at *12. If anything, Oracle’s
23 Board is on stronger footing than the board in Melbourne. Whereas the defendants in Melbourne
addressed the alleged red flags with public relations and lobbying, id. at *10, Oracle addressed
24 the alleged red flags—the DOL action and the pending Jewett action—by winning the former and
contesting the latter.
25 21
Plaintiffs’ cited cases illustrate what is missing here. In re Pfizer Inc. S’holder Deriv.
Litig., 722 F. Supp. 2d 453, 460 (S.D.N.Y. 2010) (“red flags” included “reports to the board of
26 [two] settlements, a large number of FDA violation notices and warning letters, [and] several
reports to Pfizer’s compliance personnel and senior executives of continuing kickbacks and off-
27 label marketing”); In re Abbott Labs. Deriv. S’holders Litig., 325 F.3d 795, 809 (7th Cir. 2003)
(“extensive paper trail” supported claim); see supra at 7 (discussing Rosenbloom).
28
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC 19
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 26 of 28
1 tort of “abuse of control.” (Mot. at 34.) The Opposition cites a lone decision in response. (Opp.
2 at 34 (citing Belova v. Sharp, No. CV 07-299-MO, 2008 WL 700961, at *9 (D. Or. Mar. 13,
3 2008)).) But the defendants in Belova “did not move
` to dismiss those claims on the grounds that
4 they were not separate torts from breach of fiduciary duty and, thus, the court did not address the
5 specific question that is before this Court.” In re Galena Biopharma, Inc. Deriv. Litig., 83 F.
6 Supp. 3d 1047, 1072 (D. Or. 2015) (dismissing claims).
7 Unjust Enrichment. The Complaint fails to adequately allege any element of Plaintiffs’
8 unjust enrichment claim. There is no underlying wrongdoing. And there is no unjust payment or
9 any impoverishment to the Company, much less any relation between those and the alleged
10 discriminatory conduct. (Mot. at 34.) Plaintiffs’ singular reliance on director compensation
11 (Opp. at 34) is also insufficient to plead unjust enrichment. See In re Accuray, Inc. S’holder
12 Deriv. Litig., No. 09-05580 CW, 2010 U.S. Dist. LEXIS 90068, at *40 (N.D. Cal. Aug. 31, 2010)
13 (rejecting claims that defendants “were unjustly enriched as a result of” compensation received
14 “while breaching fiduciary duties owed to Accuray”); Highland Legacy Ltd. v. Singer, No. Civ. A
15 1566-N, 2006 Del. Ch. LEXIS 55, at *31 n.73 (Del. Ch. Mar. 17, 2006) (same).
16 III. PLAINTIFFS WERE REQUIRED TO BRING THEIR CLAIMS IN THE
DELAWARE COURT OF CHANCERY.
17
18 The Court should dismiss the Complaint in its entirety under Rules 23.1 and 12(b)(6). If,
19 however, the Court declines to dismiss any portion of Plaintiffs’ claims, Oracle’s forum-selection
20 bylaws provide an independent basis for dismissal. (Mot. at 34.) Contrary to the Opposition,
21 Defendants do not concede that the forum-selection clause cannot be applied to Plaintiffs’ Section
22 14(a) claim. (See Mot. at 35; Opp. at 35.) In addition, Plaintiffs concede that if the Court
23 dismisses the Section 14(a) claim but no other claim, the Court should dismiss the balance of the
24 Complaint for forum non conveniens. (See Opp. at 35:19-24); Zuckerberg, 2021 U.S. Dist.
25 LEXIS 52465, at *18-19 (dismissing non-Section 14(a) claims for forum non conveniens).
26 CONCLUSION
27 The Complaint should be dismissed with prejudice as Plaintiffs have not identified any
28 new allegations supporting amendment. Velie v. Hill, 736 F. App’x 165, 166–67 (9th Cir. 2018).
REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC 20
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 27 of 28
1
Dated: March 22, 2021 JORDAN ETH
2 PHILIP T. BESIROF
CHRISTIN J. HILL
3 MORRISON
` & FOERSTER LLP
4
5 By: /s/ Jordan Eth
JORDAN ETH
6
Attorneys for Director Defendants
7
Dated: March 22, 2021 DORIAN DALEY
8 PEGGY E. BRUGGMAN
JAMES C. MAROULIS
9 ORACLE CORPORATION
10 KAREN G. JOHNSON-MCKEWAN
KENNETH P. HERZINGER
11 ALEXANDER K. TALARIDES
ORRICK, HERRINGTON & SUTCLIFFE
12 LLP
13
14 By: /s/ Alexander K. Talarides
ALEXANDER K. TALARIDES
15
Attorneys for Nominal Defendants Oracle
16 Corporation and Oracle America, Inc.
17
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REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC 21
Case 3:20-cv-04439-JSC Document 64 Filed 03/22/21 Page 28 of 28
1 ECF ATTESTATION
2 I, Jordan Eth, am the ECF User whose ID and password are being used to file the
3 foregoing document. In compliance with Civil L.R.
` 5-1(i)(3), I hereby attest that concurrence in
4 the filing of the document has been obtained from each of the other Signatories.
5
6 Dated: March 22, 2021
7 /s/ Jordan Eth
JORDAN ETH
8
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REPLY ISO MOTION TO DISMISS
Case No. 3:20-cv-04439-JSC 22
|
DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
ANTHONY HOSKINS,
Appellant,
v.
STATE OF FLORIDA,
Appellee.
No. 4D18-2413
[December 19, 2018]
Appeal of order denying rule 3.801 motion from the Circuit Court for
the Seventeenth Judicial Circuit, Broward County; Barbara Anne
McCarthy, Judge; L.T. Case Nos. 14-5075CF10A and 14-14619CF10A.
Anthony Hoskins, Bonifay, pro se.
Pamela Jo Bondi, Attorney General, Tallahassee, and Alexandra A.
Folley, Assistant Attorney General, West Palm Beach, for appellee.
PER CURIAM.
After a fifth violation of probation, Appellant Anthony Hoskins was
sentenced to 30 months in prison with 52 days of jail credit. Hoskins filed
a Florida Rule of Criminal Procedure 3.801 motion seeking additional jail
credit for time spent in jail following previous violations of probation. 1 The
trial court summarily denied the 3.801 motion. Its order failed to attach
any documents refuting Hoskins’ claim. As the State concedes on appeal,
this was reversible error, requiring remand.
“Pursuant to Florida Rule of Criminal Procedure 3.801(e), which
incorporates Florida Rule of Criminal Procedure rule 3.850(f), the circuit
court was required to attach records which conclusively refuted the
defendant’s motion seeking additional jail credit.” Williams v. State, 141
So. 3d 686, 687 (Fla. 4th DCA 2014); Fla. R. Crim. P. 3.850(f)(5) (“If the
denial is based on the records in the case, a copy of that portion of the files
and records that conclusively shows that the defendant is entitled to no
1 Hoskins’ motion claims that he had previously been in jail multiple times for
violations of probation, but had only been awarded jail credit for the last jail stay.
relief shall be attached to the final order.”).
As noted above, the State concedes that the trial court’s order does not
comply with the Rule. Accordingly, we reverse and remand for an
evidentiary hearing or for the attachment of records conclusively refuting
Hoskins’ claim for additional jail credit.
Reversed and remanded.
GERBER, C.J., FORST and KUNTZ, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
2
|
Exhibit 10.2
RETIREMENT PLAN FOR OUTSIDE DIRECTORS
OF NORTHWEST SAVINGS BANK AND ELIGIBLE AFFILIATES
Article I. Establishment and Purpose
1.1 Establishment of the Plan
Northwest Savings Bank (the “Bank”) established the Retirement Plan for
Outside Directors (the “Plan”) of Northwest Savings Bank, effective July 1, 1992
(the “Effective Date”). The Plan was amended effective April 1, 2003, amended
and restated in its entirety effective April 1, 2004, and further amended and
restated effective as of January 1, 2005 to correct typographical errors,
conform with past practice and maintain compliance with Section 409A of the
Internal Revenue Code.
1.2 Purpose
The purpose of this Plan is to recognize the value of an Outside Director’s
past service to the Bank and Eligible Affiliates, to enhance the ability of the
Bank and Eligible Affiliates to attract and retain competent and experienced
Outside Directors and to assure the availability of each participating Outside
Director’s knowledge and experience as a resource to the Bank and Eligible
Affiliates following his retirement as an Outside Director. The Plan is intended
to be an unfunded plan of deferred compensation, not qualified under the
Internal Revenue Code, but in compliance with Section 409A of the Internal
Revenue Code so as to preserve the tax-deferred treatment of the Retirement
Benefits accrued under this Plan until distributed to Participants.
Article II. Definitions and Construction
2.1 Definitions
The terms used in this Plan shall have the meanings assigned to them below.
(a) “Plan Administrator” means the person or group of persons appointed by
the Board of Directors to administer this Plan. In the event there is no person
or group of persons appointed by the Board to administer this Plan, or such
person or group resigns from or fails to assume the responsibility to administer
the Plan, the Human Resources Department of the Bank shall act as Plan
Administrator. (b) “Bank” means Northwest Savings Bank, a Pennsylvania
corporation, and its corporate successors. (c) “Board” or “Board of
Directors” means the Board of Directors of the Bank. (d) “Beneficiary”
means the person whom the Participant has designated pursuant to Section 3.4(c)
to receive undistributed Retirement Benefits which the Participant has accrued
hereunder at his date of death.
--------------------------------------------------------------------------------
(e) “Director” means a member of the Board of Directors of the Bank or any
Eligible Affiliate, or, in the case of Northwest Bancorp Mutual Holding Company,
a member of its Board of Trustees. (f) “Eligible Affiliate” means the
parent corporation or an affiliated corporation of Northwest Savings Bank which
the Board of Northwest Savings Bank has determined by duly adopted resolution to
be eligible for the Plan, including Northwest Bancorp Mutual Holding Company and
Northwest Bancorp, Inc.. (g) “Disability Benefit” is the amount payable to
a Participant in accordance with Section 3.5 hereof upon his becoming “Disabled”
as defined in Treasury Regulations Section 1.409A-3(i)(4). (h) “Outside
Director” means a Director who is not an employee of the Bank who is not
entitled, either before or after retirement from the Board of the Bank or any
Eligible Affiliates, to receive employee pension benefits from the Bank or from
any of its subsidiaries or affiliates. (i) “Participant” means any
eligible Outside Director of the Bank or any Eligible Affiliates who meets the
participation requirements set forth in Section 3.1 of this Plan. (j)
“Retainer” means the annual Retainer payable to an Outside Director each Fiscal
Year as compensation for membership on the Board of Directors of the Bank or any
Eligible Affiliate. (k) “Retire” or “Retirement” means termination for any
reason from service as a Director of the Bank or Eligible Affiliate after five
or more Years of Service, provided that such Retirement qualifies as a
“Separation from Service” as defined in Treasury Regulations
Section 1.409A-1(h). (l) “Retirement Benefit” is the amount payable to a
Participant following his Retirement calculated in accordance with
Section 3.3(a) of this Plan. (m) “Years of Service” means the number of
consecutive 12-month periods, or fractions thereof, which an Outside Director
serves on the Board of Directors of the Bank or any Eligible Affiliate, but not
to exceed ten (10) such consecutive 12-month periods. Years of Service shall
include service on the Board of Directors of the Bank or of an Eligible
Affiliate prior to the establishment of this Plan, and any period during which
the Participant is disabled within the meaning of Section 3.5 hereof prior to
age 65. However, in no event shall the Years of Service credited under this Plan
exceed ten (10).
2
--------------------------------------------------------------------------------
2.2 Gender and Number
Except when otherwise indicated by the context, words in the masculine
gender shall include the feminine gender; the plural shall include the singular
and the singular shall include the plural.
2.3 Not a Contract of Service
Neither the establishment of, nor the participation or eligibility for
participation of any Outside Director in, this Plan shall be construed to confer
any right of tenure on the part of any Outside Director or any right of
nomination, renomination, election or re-election to the Board of Directors of
the Bank or any Eligible Affiliate. The Bank or Eligible Affiliate shall not
incur any liability for any loss of benefits that might result under this Plan
from any failure of the stockholders to elect or re-elect any Outside Director
to the applicable Board of Directors or any failure of the Board of Directors to
nominate any Outside Director for re-election.
2.4 Severability
In the event any provision of the Plan shall be held invalid or illegal for
any reason, or to fail to comply with Section 409A of the Internal Revenue Code,
such illegality, invalidity or noncompliance shall not affect the remaining
parts of the Plan, but the Plan shall be construed and enforced as if the
illegal, invalid or noncomplying provision had never been inserted, and the Bank
shall have the privilege and opportunity to correct and remedy such questions of
illegality, invalidity or noncompliance by amendment as provided in the Plan.
2.5 Applicable Law
The Plan shall be governed and construed in accordance with the laws of the
Commonwealth of Pennsylvania except as otherwise required by applicable federal
law, including Section 409A of the Internal Revenue Code.
Article III. Participation and Benefits
3.1 Participation
An Outside Director shall become a Participant in this Plan on the date
such Director completes five Years of Service as a Director of the Bank or an
Eligible Affiliate.
3.2 Eligibility for Benefits
An Outside Director shall not be eligible for any benefits hereunder until
such Director has completed five Years of Service. No benefits are payable under
this Plan to any Director
3
--------------------------------------------------------------------------------
who terminates his service on the Board of the Bank or any Eligible Affiliate
prior to completing five Years of Service.
3.3 Retirement Benefit
(a) Amount of Retirement Benefit. Upon a Participant’s Retirement from the
Board of the Bank or an Eligible Affiliate on or after his attainment of age 60,
he shall be entitled to an annual Retirement Benefit in an amount equal to:
(1) Sixty percent of the annual Retainer payable to an Outside Director as
compensation for membership on the applicable Board at the annual rate which was
in effect immediately prior to his Retirement;
plus
(2) Sixty percent of the annual meeting fees payable to an Outside Director
as compensation for his attendance at meetings of the applicable Board at the
annual rate which was in effect immediately prior to his Retirement.
(b) Upon a Participant’s Retirement from the applicable Board prior to his
attainment of age 60, he shall be entitled to an annual Retirement Benefit equal
to one-half of the Retirement Benefit calculated under subparagraphs (1) and
(2) of paragraph (a) above. (c) Commencement of Payments
(1) Retirement prior to Attainment of Age 65. In the event a Participant
retires from the applicable Board prior to his attainment of age 65, Retirement
Benefits shall commence on the first day of the calendar quarter following his
attainment of age 65. (2) Retirement after Attainment of Age 65. In the
event a Participant retires from the applicable Board after his attainment of
age 65, Retirement Benefits shall commence on the first day of the calendar
quarter following his Retirement.
(d) Duration and Payment of Retirement Benefits. Retirement Benefits shall
be paid to each Retired Participant for a period equal to the lesser of the
number of his Years of Service, his life or ten years. Retirement Benefits shall
be paid in quarterly installments on the first day of each calendar quarter
following the Participant’s Retirement.
4
--------------------------------------------------------------------------------
3.4 Death Benefit.
(a) Death While Serving on an Applicable Board. Upon the death of a
Participant on or after April 1, 2003 while serving on an applicable Board, the
Bank or Eligible Affiliate, as applicable, shall pay to the Participant’s
Beneficiary an amount equal to the benefit described in Section 3.3(a) of this
Plan for a period equal to the lesser of the number of his Years of Service or
ten (10) Years. The present value of this stream of payments shall be paid to
the Participant’s Beneficiary in a lump sum within 60 days following the
Participant’s death, using a 7.0 percent discount rate. (b) Death After
Serving on an Applicable Board. Upon the death of a Participant on or after
April 1, 2003 following the Participant’s Retirement from an applicable Board,
the Bank or Eligible Affiliate, as applicable, shall pay to the Participant’s
designated Beneficiary the remaining benefit that the Participant was entitled
to under this Plan, if any. The present value of any remaining benefits shall be
paid to the Participant’s Beneficiary in a lump sum within 60 days following the
Participant’s death, using a 7.0 percent discount rate. (c) Designation of
a Beneficiary. The Plan Administrator shall make available to all Participants
an appropriate form for their designation of a Beneficiary to receive remaining
benefits payable under the Plan in the event of the Participant’s death. If a
Participant has not designated a Beneficiary or the designated Beneficiary has
pre-deceased the Participant at the time of his death, any remaining benefits
payable under the Plan at the Participant’s death shall be paid to his estate.
3.5 Disability Benefits
In the event a Participant suffers a disability prior to age 65 for which
the Participant receives disability benefits under the federal Social Security
Act, or if the Participant is not subject to the Federal Social Security Act but
he suffers a disability for which he would qualify for disability benefits under
the Federal Social Security Act if he were subject to it, the Participant shall
continue to receive sixty percent (60%) of the annual Retainer and the annual
Board meeting fees at the annual rate in effect immediately prior to his meeting
the test for disability benefits under the Social Security Act as a Disability
Benefit hereunder. Such Disability Benefit shall be payable under this Plan
until the Participant’s age 65, at which time the Participant shall be eligible
for Retirement Benefits calculated as though the disabled Participant had
continued in active service on the applicable Board until age 65. The period of
time during which a Participant receives Disability Benefits hereunder prior to
attainment of age 65 shall be included in the Years of Service credited to the
Participant for purposes of calculating the duration of Retirement Benefits
payable hereunder. In the event a Participant becomes
5
--------------------------------------------------------------------------------
permanently disabled within the meaning of the Federal Social Security Act after
age 65 he shall retire from the Board and commence to receive his Retirement
Benefit hereunder on the first day of the ensuing calendar quarter.
Notwithstanding anything in this paragraph to the contrary, Disability Benefits
shall only be payable to the extent that the Participant is “Disabled” within
the meaning of Treasury Regulation Section 1.409A-3(i)(4).
Article IV. Continuing Obligations of Retired Outside Directors.
4.1 Consultation
During the period that a retired Outside Director is receiving a Retirement
Benefit under the Plan, he shall make himself available to the Bank or Eligible
Affiliate for consultation with Directors or senior officers of the Bank or
Eligible Affiliate upon request on matters within his experience related to the
business of the Bank or Eligible Affiliate. Such consulting services shall be
rendered at reasonable times and places, taking into account the health, age and
other duties of such retired Outside Director. To the extent possible, such
consulting services shall be rendered by personal consultation by telephone or
at the principal residence or office, wherever located, of the retired Outside
Director, at times most convenient to the retired Outside Director.
4.2 Non-Competition
The obligation of the Bank or Eligible Affiliate to make or continue
payments under this Plan shall be subject to the condition that the retired
Outside Director shall not engage, either directly or indirectly, in any
activity which is competitive with any activity of the Bank or Eligible
Affiliate. In the event of a breach by the retired Outside Director of the
foregoing condition, the Bank or Eligible Affiliate shall not be obligated to
make any payment coming due hereunder subsequent to the occurrence of such
breach. The Plan Administrator, upon prior written request of a retired Outside
Director, may waive the condition specified above with respect to
non-competition if, based upon all of the relevant circumstances, in the sole
judgment of the Plan Administrator, the granting of such a waiver is justified,
having due regard to both the interests of the Bank or Eligible Affiliate and
those of the retired Outside Director.
Article V. General Provisions.
5.1 Administration
The Plan shall be administered by the Plan Administrator. No member of the
Plan Administrator shall be eligible to participate in the Plan. The Plan
Administrator shall have the power to interpret the Plan and to decide any and
all matters arising hereunder, including but not limited to the right to remedy
possible ambiguities, inconsistencies or omissions, by general rule or
particular decision, provided that all such interpretations and decisions shall
be applied in a uniform and nondiscriminatory manner to all Participants
similarly situated. In addition, any interpretations and decisions made by the
Plan Administrator shall be final, conclusive and binding upon all persons who
have or who claim to have any interest in or under the Plan.
6
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5.2 Funding
All benefits paid under this Plan shall be paid in cash from the general
assets of the Bank or Eligible Affiliate. All liability for Retirement Benefits
payable under the Plan shall be reflected on the accounting records of the Bank
or Eligible Affiliate, but shall not be construed to create or require the
creation of a trust, custodial or escrow account. The Bank or Eligible Affiliate
may establish one or more trusts, with such trustees as the Bank or Eligible
Affiliate may approve, for the purpose of providing for the payment of
Retirement Benefits hereunder. Such trusts may be irrevocable but the assets
thereof shall be subject to the claims of the Bank’s or Eligible Affiliate’s
creditors. To the extent that any Retirement Benefits provided under the Plan
are actually paid from any such trust, the Bank or Eligible Affiliate shall have
no further obligations with respect thereto, but to the extent not so paid, such
Benefits shall be payable from such insurance contracts, annuities or other
funds that the Bank or Eligible Affiliate may purchase, establish or accumulate
to aid in providing benefits under this Plan. Nothing contained in this Plan,
and no action taken pursuant to its provisions, shall create a trust or
fiduciary relationship of any kind between the Bank or Eligible Affiliate and a
Director or any other person. A Director shall not acquire any interest greater
than that of an unsecured creditor.
5.3 Expenses
The expenses of administering the Plan shall be borne by the Bank or
Eligible Affiliate, as applicable.
5.4 Indemnification
The members of the Plan Administrator and its agents and officers,
directors and employees of the Bank and all Eligible Affiliates shall be
indemnified and held harmless by the Bank and Eligible Affiliates to the fullest
extent now or hereafter permitted by law against and from any and all loss,
cost, liability or expense, including attorney’s fees, fines, civil penalties,
interest and excise taxes that may be imposed upon or reasonably incurred by
them in connection with or resulting from any actual or threatened civil,
criminal, administrative or investigative claim, action, suit or proceeding to
which they may be a party or in which they may be involved by reason of any
action taken or failure to act under this Plan and against and from any and all
amounts paid by them in settlement (with the Bank’s or Eligible Affiliate’s
written approval) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding. The indemnification provided by this section shall
continue for persons who have ceased to be members or agents of the Plan
Administrator, and to former directors, officers and employees of the Bank and
Eligible Affiliates, and shall inure to the benefit of the heirs, executors and
administrators of persons entitled to indemnity hereunder. This section shall
not be applicable to any person if the loss, cost, liability or expense is
finally judicially determined to be due to such person’s recklessness or willful
misconduct.
7
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5.5 Nonassignability
Neither a Participant in the Plan nor any other person shall have any right
to sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
hypothecate or convey in advance of actual receipt of the Retirement Benefits,
if any, payable hereunder, all rights to which are expressly declared to be
nonassignable and nontransferable. No part of any amount payable hereunder,
prior to actual payment, shall be subject to seizure or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, nor be transferable by operation of law in the
event of a Participant’s or any other person’s bankruptcy or insolvency.
5.6 Payment to Guardian
If a Plan benefit is payable to a person declared incompetent or to a
person incapable of handling the disposition of property, the Plan Administrator
may direct payment of such Plan benefit to the guardian, legal representative or
person having the care and custody of such incompetent person, without
responsibility to follow application of amounts so paid. Payments made pursuant
to this provision shall completely discharge the Bank, the Eligible Affiliate,
the Plan and the Plan Administrator.
5.7 Successors
The provisions of this Plan shall bind and inure to the benefit of the
Bank, its Eligible Affiliates and their successors and assigns. The term
successors as used herein shall include any corporation or other business entity
which shall, whether by merger, consolidation, purchase or otherwise, acquire
all or substantially all of the business and assets of the Bank or of an
Eligible Affiliate, and the successors of any such corporation or other business
entity.
Article VII. Amendment and Termination.
6.1 Amendment and Termination
The Bank and Eligible Affiliates expect to continue the Plan indefinitely,
but specifically reserves the right, in the sole and unfettered discretion of
its Board of Directors, at any time, to amend, in whole or in part, any or all
of the provisions of the Plan and to terminate the Plan in whole or in part,
provided, however, that no such amendment or termination shall adversely affect
any rights of an Outside Director to receive the Retirement Benefit which had
accrued on his behalf on account of his service as an Outside Director prior to
such amendment or termination. Any termination of the Plan that results in
accelerated payment of benefits shall comply with the requirements of Treasury
Regulation Section 1.409A-3(j)(ix).
8
--------------------------------------------------------------------------------
6.2 Subject to Regulatory Action and Compliance with Code Section 409A
The Plan shall be effective until and unless it is found to violate any
rule or regulation of any governmental agency which is authorized to regulate
the Bank, Eligible Affiliate or the Plan, or fail to comply with Section 409A of
the Internal Revenue Code, in which case the Plan shall be terminated as of the
date of violation, or amended to the extent necessary to avoid the violation of
any rule or regulation of a governmental agency authorized to regulate the Bank,
Eligible Affiliate or the Plan, or to comply with Section 409A of the Internal
Revenue Code in order to preserve the tax-deferred treatment of the Benefits
accrued under the Plan pending distribution to Participants. No distribution
shall be made from the Plan or action taken under the Plan that would make any
Retirement Benefit payable or accrued hereunder subject to the interest and
additional tax imposed by Code Section 409A(a)(1)(B).
IN WITNESS WHEREOF, Northwest Savings Bank has caused this Amended and
Restated Retirement Plan for Outside Directors, to be executed by its duly
authorized officers on the date set forth below, effective as of January 1,
2005.
NORTHWEST SAVINGS BANK
December 17, 2008
By: /s/ William Wagner
Date
William Wagner, President
9 |
248 Minn. 518 (1957)
80 N.W. (2d) 650
MURIEL SHARP, FORMERLY MURIEL LEHTO, A MINOR, BY KUSTAU LEHTO, HER FATHER AND NATURAL GUARDIAN,
v.
EUGENE JOHNSON AND ANOTHER.
No. 36,706.
Supreme Court of Minnesota.
January 25, 1957.
*520 Rosengren, Rufer & Blatti, for appellants.
Ryan, Ryan & Ebert, for respondent.
THOMAS GALLAGHER, JUDGE.
This is an action by Muriel Sharp, formerly Muriel Lehto, for injuries sustained while she was a guest passenger in an automobile owned by defendant Walter Johnson and driven by his son, defendant Eugene Johnson. She will be referred to herein as plaintiff, and Eugene Johnson as defendant. The accident occurred about noon November 25, 1952, on Trunk Highway No. 77 near the village of Wahoo in the State of Nebraska. Issues of negligence, contributory negligence, and assumption of risk are governed by Nebraska law.
The accident happened on a trip from Lincoln, Nebraska, to Minnesota, where most of the parties resided. Defendant was driving and was accompanied by plaintiff and three other passengers. Shortly before the trip commenced, snow began to fall, and when the party was approximately 30 miles from Lincoln, moisture began to freeze on the highway. As the car passed over the crest of a hill, a sharp gust of wind struck it, causing it to slide to the left shoulder, where, after traveling some 100 yards, it struck a guardpost and turned over into the ditch. For injuries resulting to plaintiff, the jury returned a verdict in her favor against both of the Johnsons for $8,000. This is an appeal from an order denying defendant's motion for judgment notwithstanding the verdict or for a new trial.
At the time of the accident there were in force and effect in Nebraska the following statutes (Rev. Stat. of Nebraska 1943):
§ 39-740. "The owner or operator of a motor vehicle shall not be liable for any damages to any passenger or person riding in such motor vehicle as a guest or by invitation * * * unless such damage is caused * * * because of the gross negligence of the owner or operator in the operation of such motor vehicle." (Italics supplied.)
§ 25-1151. "In all actions brought to recover damages for injuries to a person or to his property caused by the negligence of another, *521 the fact that the plaintiff may have been guilty of contributory negligence shall not bar a recovery when the contributory negligence of the plaintiff was slight and the negligence of the defendant was gross in comparison, but the contributory negligence of the plaintiff shall be considered by the jury in the mitigation of damages in proportion to the amount of contributory negligence attributable to the plaintiff; * * *."
The comparative negligence rule embodied in § 25-1151 has been held applicable to a guest passenger under § 39-740 of the Nebraska statutes.[1]
It is plaintiff's contention that the actions of defendant in starting out and continuing on this trip with the knowledge that he was driving into a snowstorm of increasing severity under hazardous highway conditions constituted such a deliberate indifference to danger as to adequately support a finding of gross negligence under § 39-740 of the Nebraska statutes.
Defendant contends (1) that the evidence is insufficient to support a finding of gross negligence under § 39-740 of the Nebraska statutes; (2) that plaintiff's actions in starting and continuing on the trip with the same knowledge as to conditions as was possessed by defendant established as a matter of law her assumption of the risk undertaken by defendant and her negligence therein of the same degree as that with which she charges defendant and bars her recovery under § 25-1151 of the Nebraska statutes; (3) that the trial court erred in its charge on contributory or comparative negligence as embodied in § 25-1151 of the Nebraska statutes; and (4) that the trial court erred in receiving in evidence a letter written to plaintiff by defendant Walter Johnson without first deleting therefrom certain references to an insurance policy on the car involved.
The trial court's instructions on the issues of negligence included the following:
"Gross negligence means great or excessive negligence; that is, *522 negligence in a very high degree, or the absence of even slight care in the performance of a duty.
* * * * *
"If you find, considering the conditions of the highway, and all other conditions then existing, that defendant Eugene Johnson was guilty of gross negligence, then you should find that he was guilty of gross negligence.
* * * * *
"* * * If you should find from the evidence that one of the causes of the accident was the election of Eugene Johnson to continue to drive as he did under the circumstances then existing, and if you should find that the plaintiff knew, or in the exercise of ordinary care should have known all of said circumstances and methods of driving and then also elected to continue to ride in the car with knowledge of the danger and hazard incident thereto, then plaintiff would be guilty of contributory negligence.
* * * * *
"* * * such contributory negligence shall not necessarily bar recovery, but such facts shall be considered by you in mitigation of damages in proportion to the amount of contributory negligence attributable to the plaintiff."
The facts and circumstances surrounding the accident are as follows: On November 25, 1952, at about 9:30 a.m., defendant, driving a 1940 Chevrolet sedan automobile and accompanied by plaintiff, Rose Johnson, Laura Trana, and Norma Miller, all of whom, except Rose Johnson, were fellow students of defendant at Union College in Lincoln, started out on a trip to Minnesota for the Thanksgiving holidays. Plaintiff was then of the age of 18 years and a sophomore. Defendant was 19 and a junior. Both had driven cars, the extent of their experience therein not being shown. The group had planned to leave Lincoln at noon on November 25th, but because of reports on bad weather conditions decided instead to advance their starting time to 9:30 that morning.
During the previous night and in the early hours of November 25th, snow had fallen in the Lincoln area to a depth of approximately four *523 inches and a slight wind was blowing. Plaintiff testified that at about 7 a.m. that morning her dean of women advised her that "the weather report was very bad and that we should not start out unless we were very sure of ourselves." At 8:10 that morning plaintiff called the local weather bureau at Lincoln and was informed by it that if the group left as soon as possible they "could probably drive ahead of the storm and keep ahead of it."
She testified further that she gave this information to defendant before they commenced the trip; that it was not snowing "too hard" when they started out; that there was snow and slush on the highways and streets in Lincoln; that all in the group "wanted to go home, and because we had made arrangements to go along we all went. None of us would back out on the arrangements made"; that as the car continued north the weather got worse, the wind blowing harder, with snow drifting or blowing across the highway; that they could see "just so far"; that neither she nor anyone else in the party at any time suggested stopping or turning back; that defendant was not driving fast; that it took approximately two hours to travel the first 45 miles; that just after they had gone over the crest of a hill and started downgrade the wind suddenly struck from their right so that the car started to skid or slide to the left; that it happened so fast there wasn't much anyone could do when the car started to slide; that there was not much Eugene could do to avoid it; that the car continued to slide to the left; and that finally its front end struck a post which caused it to go into the deep ditch and turn over.
Defendant testified that on the morning of November 25th he had not heard any storm warnings but knew "there were bad weather conditions"; that a blizzard was coming from the south, but that he had also heard that if the group started soon enough they could keep ahead of it; that plaintiff had told him then that she had called the weather bureau and had been advised by it that if the party "were to leave early * * * that we would more than likely run out of it [the storm], and we were supposed to get ahead of the storm that was proceeding north"; that as they left Lincoln it was snowing *524 lightly and that the streets were slushy; that the wind was not blowing very hard; that as they proceeded north it continued to snow but wasn't "blizzarding"; that they could see ahead of the car for a considerable distance; that there was other traffic on the highway; that the wind was not strong "just blowing" and that they could feel a gust once in a while; that until he came to the crest of the hill just before the accident there was never enough wind to bother the operation of the car; that traffic continued to come from the north; that just as the car went beyond the crest of the hill he felt a gust of wind strike it from the right or east so that it began to bear to the left; that it continued to skid as he endeavored to control it by turning to the right and applying the brakes slightly but that it continued to skid to the left off the highway until it hit the guardpost and turned over; that prior to the accident he was traveling "About 30 or maybe less" and was on the right-hand side of the road. Testimony of the other passengers in the car was substantially corroborative of the foregoing.
1. Under § 39-740 of the Nebraska statutes, to recover plaintiff must establish by a fair preponderance of the evidence defendant's gross negligence; and, under § 25-1151 thereof, that she was free from negligence or at the most that any negligence on her part was slight in comparison to that of defendant.
2. The Nebraska Supreme Court has defined gross negligence as the absence of even a slight degree of care in the performance of a duty. Rice v. Neisius, 160 Neb. 617, 71 N.W. (2d) 116; Morris v. Erskine, 124 Neb. 754, 248 N.W. 96. It has held that conscious indifference to the consequences of an undertaking which is known or should have been known to a defendant to be dangerous is a factor for consideration in determining whether such a defendant has been guilty of gross negligence, Mierendorf v. Saalfeld, 138 Neb. 876, 295 N.W. 901; Larson v. Storm, 137 Neb. 420, 289 N.W. 792, although we have discovered no Nebraska decisions which hold that this indifference alone would support such a finding.
3. Plaintiff asserts that defendant's actions in commencing and continuing on the trip described, under the weather and highway *525 conditions then present, established his conscious indifference to the probable consequences thereof sufficient to support a finding of his gross negligence. There is little dispute as to the facts or circumstances surrounding the trip. Resolving all the evidence in plaintiff's favor, it would still appear that such evidence falls substantially short of sustaining the finding of defendant's gross negligence. It establishes that defendant left Lincoln under weather conditions of not too great severity with the assurance of the local weather bureau relayed to defendant by plaintiff that by leaving early the party might keep ahead of a storm reported to be moving from the south. No great difficulty was experienced prior to the accident, and neither plaintiff nor any of the other passengers suggested that the trip be discontinued or delayed. Other cars were using the same highway, moving toward the storm, and passing defendant without difficulty. Visibility was not bad, and the conditions met by defendant were not different from those met on an average winter day when a light snow is falling and the temperature is dropping. If driving thereunder can constitute gross negligence, there would be few days on which a Minnesota driver undertaking a trip under average winter conditions would not do so at the risk of being charged with gross negligence.
Further, it is undisputed here that the sudden gust of wind which struck defendant's car as it started downgrade on the highway was the immediate cause of the accident. Prior to that moment, the wind had not created any problems for defendant. Considering all such evidence, we cannot escape the conclusion that there was nothing in defendant's conduct which might be regarded as such conscious indifference to the consequences of the trip as to constitute gross negligence. Under evidence far less favorable, the Nebraska Supreme Court has on numerous occasions directed verdicts favorable to defendants on the issue of gross negligence. Ottersberg v. Holz, 159 Neb. 239, 66 N.W. (2d) 571; Fairman v. Cook, 142 Neb. 893, 8 N.W. (2d) 315; Amerine v. O'Neal, 136 Neb. 642, 287 N.W. 56.
4. Further, we cannot escape the logic of defendant's assertion that whatever negligence may be charged to defendant in undertaking *526 the trip must be charged to plaintiff in the same degree; and that in addition whatever risks were involved therein were voluntarily assumed by plaintiff with full knowledge of all attendant facts and circumstances. Plaintiff was possessed of more accurate information as to weather conditions than was defendant. She had received first-hand reports with reference thereto from the weather bureau at Lincoln, as well as from other sources. It was she who had advised defendant that the bureau had reported that, if the party were to leave early, it could probably keep ahead of the storm. She, as well as the other passengers, was anxious to return to Minnesota for the holidays and none of them at any time suggested a postponement or discontinuance of the trip. As far as the record indicates, she was as experienced in driving as was defendant. There was but one year's difference in their respective ages and in their collegiate education. It is clear that whatever risks were undertaken by defendant in making this trip were willingly assumed by plaintiff with knowledge as to weather and highway conditions, equal to, if not greater than, his. It would follow that whatever negligence is chargeable to defendant in undertaking the trip is also chargeable to her in the same degree. Her negligence being equal to defendant's would constitute an effective bar to her recovery under § 25-1151 of the Nebraska statutes. Chew v. Coffin, 144 Neb. 170, 12 N.W. (2d) 839; Whittaker v. Hanifin, 138 Neb. 18, 291 N.W. 723; Mundt v. Chicago, R.I. & P.R. Co. 136 Neb. 478, 286 N.W. 691; McDonald v. Omaha & C.B. St. Ry. Co. 128 Neb. 17, 257 N.W. 489.
Determination of these issues as above specified makes it unnecessary to decide other questions raised on the appeal herein.
Reversed.
CHIEF JUDGE DELL took no part in the consideration or decision of this case.
NOTES
[1] See, Landrum v. Roddy, 143 Neb. 934, 12 N.W. (2d) 82, 149 A.L.R. 1041.
|
601 S.E.2d 808 (2004)
268 Ga. App. 322
BROWN
v.
J.H. HARVEY COMPANY.
No. A04A0268.
Court of Appeals of Georgia.
July 2, 2004.
*809 Charles Lamb, Albany, for Appellant.
Christopher Ross, Gardner, Willis, Sweat & Goldsmith, Albany, for Appellee.
BARNES, Judge.
Lucille Brown appeals the dismissal of her complaint against the J.H. Harvey Company (the "Harvey Company") because the statute of limitation had expired and because her action was barred by res judicata and collateral estoppel. She contends the trial court erred by granting the motion to dismiss because it erroneously interpreted the interplay between the renewal statute, OCGA § 9-2-61, and the relation back statute, OCGA § 9-11-15. Finding no error, we affirm.
1. We review the trial court's ruling on a motion to dismiss under the de novo standard of review. See Cook v. Regional Communications, 244 Ga.App. 869, 870, 539 S.E.2d 171 (2000).
2. The evidence shows that Brown alleges that she was injured on August 23, 1999, when she fell in one of J.H. Harvey's stores. On August 15, 2001, she filed a complaint against Harvey's Supermarkets, Inc. Then, on October 5, 2001, Brown dismissed that complaint.
Subsequently, on October 29, 2001, Brown filed a complaint against the Harvey Company, seeking damages for the injuries she suffered on August 23, 1999. On motion of the Harvey Company the trial court dismissed this complaint finding that it failed to state a claim upon which relief could be granted because the applicable statute of limitation, OCGA § 9-3-33, barred the action. In her brief to this court, Brown concedes that the trial court's dismissal of the complaint was proper.
Thereafter, Brown filed a second complaint against Harvey's Supermarkets on January 25, 2002, pursuant to OCGA § 9-2-61, the renewal statute. On August 23, 2002, Harvey's Supermarkets answered the complaint and moved to dismiss it because of Brown's failure to join the Harvey Company as a party and also because venue against Harvey's Supermarkets was not proper. On that date, Harvey's Supermarkets also moved to dismiss the complaint because it failed to state a claim upon which relief could be granted, as the statute of limitation had expired and the second complaint was not a proper renewal action. Brown then, apparently without notice to the Harvey Company, moved to add the Harvey Company as a defendant pursuant to OCGA § 9-11-21 on October 22, 2002. The trial court granted this motion on December 3, 2002.
Brown amended her complaint on January 23, 2003, to assert her claim against the Harvey Company. On March 5, 2003, the Harvey Company answered asserting a statute of limitation defense, contending that the complaint was not a proper renewal action, and asserting that the action was barred by the doctrines of res judicata, collateral estoppel, estoppel by judgment, and stare decisis. The Harvey Company also filed a motion to dismiss Brown's complaint because it failed to state a claim upon which relief could be granted. Finding that Brown could not use the renewal statute to suspend the running of the statute of limitations against a new party and that the doctrine of res judicata barred the action, the trial court dismissed this action on July 29, 2003. This appeal followed.
Citing Rich's, Inc. v. Snyder, 134 Ga.App. 889, 216 S.E.2d 648 (1975), Brown contends the trial court erred by dismissing her complaint because she properly renewed her *810 action against Harvey's Supermarkets and then properly added the Harvey Company as a defendant. She further contends that her complaint relates back to her original complaint because she satisfied the requirements of OCGA § 9-11-21, about misjoinder or nonjoinder of parties. Brown's reliance on Rich's, Inc. v. Snyder is misplaced because that case was not a renewal action.
The law in this State is quite clear: "OCGA § 9-2-61 may not be used to suspend the running of the statute of limitation as to defendants different from those originally sued. [Cits.]" Reedy v. Fischer, 193 Ga.App. 684, 685, 388 S.E.2d 759 (1989). Accord Soley v. Dodson, 256 Ga.App. 770, 773, 569 S.E.2d 870 (2002); Patterson v. Rosser Fabrap Intl., 190 Ga.App. 657, 658-659, 379 S.E.2d 787 (1989); Wagner v. Casey, 169 Ga.App. 500, 501(2), 313 S.E.2d 756 (1984); Cornwell v. Williams Bros., etc., Co., 139 Ga.App. 773, 775, 229 S.E.2d 551 (1976). Therefore, Brown's complaint against the Harvey Company was barred by the expiration of the statute of limitation, and the trial court did not err by dismissing her complaint because it did not state a complaint upon which relief could be granted.
3. Further, the trial court was also correct in finding that Brown's complaint against the Harvey Company was barred by the doctrine of res judicata. Her earlier action against the Harvey Company on this identical claim was dismissed because it failed to state a claim upon which relief could be granted. As this was a decision on the merits, the doctrine of res judicata bars a subsequent lawsuit on this claim. OCGA § 9-12-40; see Sheldon & Co. v. Emory Univ., 184 Ga. 440, 441(2), 191 S.E. 497 (1937).
Applying OCGA § 9-12-40,
[t]he doctrine of res judicata provides that a final judgment of a court of competent jurisdiction is conclusive between the parties and bars a subsequent action between the same parties on the same subject matter. Res judicata will bar a plaintiff's action if the plaintiff has brought another action based on the same subject matter, the plaintiff had a full and fair opportunity to litigate the other action, the other action resulted in an adjudication on the merits, and the other action was against the same defendant or its privy. Three elements are necessary to establish res judicata: (a) identity of the parties; (b) identity of the cause of action; and (c) prior adjudication on the merits of the action by a court of competent jurisdiction.
(Punctuation and footnotes omitted; emphasis in original.) Kaylor v. Rome City School Dist., 267 Ga.App. ___, 600 S.E.2d 723 (2004). The previous case between these parties met the first two criteria, and the dismissal of the action was a decision on the merits. Black v. Knight, 231 Ga.App. 820, 499 S.E.2d 69 (1998).
Therefore, notwithstanding the statute of limitation issue, dismissal of Brown's complaint was correct.
Judgment affirmed.
BLACKBURN, P.J., and MIKELL, J., concur.
|
Filed by Federated Equity Funds on behalf of Federated Market Opportunity Fund Pursuant to Rule 14a-12 of the Securities Act of 1934 [Missing Graphic Reference] Commission File No. 811-4017 Federated Market Opportunity Fund Q&A for upcoming shareholder proxy The shareholders of the Federated Market Opportunity Fund will be asked to approve a change to the Fund’s investment objective and a change to its fundamental policy on investing in commodities. What is the new investment objective and why did we change it? The Fund’s current investment objective is to provide moderate capital appreciation and high current income. The proposed new objective for the Fund is to provide absolute (positive) returns with low correlation to the U.S equity market. Since the Fund’s inception in December of 2000 its investment strategy has evolved and now the Fund has broad flexibility with respect to the investment parameters. In order to further the Fund’s repositioning, we are asking shareholders to approve the proposed change in the Fund’s investment objective. Are there any changes to the Fund’s investment strategies taking place? In order for the portfolio management team to pursue the Fund’s proposed investment objective changes will be made to the Fund’s investment strategy to enable the fund to sell securities short. Why are shareholders being asked to approve the revised investment objective? Shareholders of the Fund are being asked to approve a change in the Fund’s fundamental policy on investing in commodities.If the proposal is approved then the Fund will be able to invest in commodities to the maximum extent permitted by the Investment Company Act of 1940.The Fund will be able to compete in the marketplace by investing in commodities up to the maximum extent permitted under the 1940 Act and limited only to the extent disclosed in the Fund’s prospectus or by the provision of the Internal Revenue Code. Will any of the Fund identifiers change? Since there will not be any changes to the Fund or Series name there will be notbe any changes to any of the fund identifiers. Proxy schedule The proxy is scheduled to be mailed to the shareholders by December 17, 2008 and the shareholder meeting is scheduled to take place on January 27, 2009. If you have any questions please call Carol {{EMAIL+PHONE}} A proxy statement with respect to the proposed change to the Fund’s investment objective and policy on investing in commodities will be mailed to shareholders and filed with the Securities and Exchange Commission (SEC).Investors are urged to read the proxy statement because it contains important information.The proxy statement and other relevant documents will be available free of charge on the SEC’s Web jcallahan@example.org or by calling 848.560.6924. C. Borrelli INTERNAL USE ONLY
|
Plaintiff in error, hereinafter called defendant, was convicted in the district court of Alfalfa county of the crime of a second and subsequent violation of the prohibitory liquor laws, and his punishment fixed by the jury at a fine of $500 and imprisonment in the state penitentiary for a period of two years.
The evidence of the state was that defendant had *Page 290
been found guilty prior to the year 1926 of violation of the prohibitory liquor laws of Alfalfa county; that on the 20th day of February, 1926, defendant pleaded guilty in the county court of Alfalfa county of selling intoxicating liquor, and was confined in the county jail for a period of six months and paid a fine of $500; that defendant had been convicted in the county court of Grant county of violation of the prohibitory liquor laws; that on the 26th day of January, 1931, he sold a quart of whisky to one Jess Hempsmeyer; the testimony of Hempsmeyer was corroborated by Elmer Thorp and Ben Beadman, who accompanied him at the time the whisky was purchased from defendant.
Defendant, testifying for himself, admitted that Hempsmeyer, Thorp, Beadman, and Otto Beard were at his place at the time the whisky was claimed to have been sold, but denied that he sold any whisky to Hempsmeyer.
Defendant makes only two contentions:
First, that, if any sale of whisky was made, it was to Thorp and Beadman, and not to Hempsmeyer.
Hempsmeyer testified that the four parties went to defendant's home in his car; that he had some money of his own and Thorp and Beadman gave him $2 more; that he bought the whisky from defendant and paid for it out of the money in his pocket.
Second, defendant contends that Hempsmeyer was an accomplice, and that his evidence was not sufficiently corroborated to connect the defendant with the sale of the liquor.
Under the evidence of the state, the witness Hempsmeyer was not an accomplice. His testimony is also corroborated *Page 291
by two other witnesses as to the purchase of the whisky from defendant.
These contentions being without any merit, the cause is affirmed.
EDWARDS, J., concurs. DAVENPORT, P. J., dissents. |
Title: Do I have to pay alimony? CA
Question:I am considering divorce with my husband. He has become the meanest person I know, I offered him counseling but he doesn't want to do it.
We have two children, I recently bought a home. I work and my husband has quit his job 1.5 years ago and is not actively looking for on. If divorced the kids would stay with me at the house.
Do I have to pay alimony? I am afraid if I do, since he is not working that I will no longer be able to keep my home.
State= CA
Answer #1: You may be ordered to pay spousal support for a limited time, while he has an opportunity to get a job. Except in very rare cases, there is no such thing as a lifetime of support anymore. The non-working spouse is expected to get on their feet and support themselves.
Keep in mind he is entitled to half the value of all marital assets. You should absolutely get an attorney.Answer #2: You don't have to pay alimony unless a court orders you to do so.
We can't even really guess what they may or will order in this case. Consult a local attorney- he or she will much better be able to tell you what you will likely expect based on the specifics of your situation. |
Citation Nr: 1419758
Decision Date: 05/02/14 Archive Date: 05/16/14
DOCKET NO. 08-07 675 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Philadelphia, Pennsylvania
THE ISSUES
1. Entitlement to an initial rating in excess of 10 percent prior to December 14, 2010 and in excess of 30 percent beginning December 14, 2010 for residuals of traumatic brain injury (TBI) manifested by headaches.
2. Entitlement to an initial rating in excess of 40 percent for residuals of TBI manifested by cognitive impairment not otherwise specified (NOS) beginning October 23, 2008.
ATTORNEY FOR THE BOARD
J. W. Loeb, Counsel
INTRODUCTION
The Veteran served on active duty from January 2005 to January 2006; he also served with the Army National Guard before and after active duty.
The case was most recently remanded by the Board in April 2012 in an attempt to obtain additional outstanding VA and non-VA treatment records. VA attempted to obtain these records, and some additional records were subsequently added to the claims files.
Consequently, there has been substantial compliance with the April 2012 Board remand instructions. Stegall v. West, 11 Vet. App. 268 (1998) (Holding that a remand by the Court or the Board confers on the Veteran or other claimant, as a matter of law, the right to compliance with the remand orders).
The appeal is REMANDED to the Agency of Original Jurisdiction (AOJ). VA will notify the appellant if further action is required.
REMAND
A review of the record reveals that there are relevant December 2013 examination reports for VA purposes in Virtual VA that have not been addressed in a Supplemental Statement of the Case (SSOC) and have not been cited in a written waiver of RO review. See 38 C.F.R. § 20.1304 (2013). Consequently, this case will be returned to the AMC/RO for additional development prior to Board adjudication.
Accordingly, the case is REMANDED for the following action:
1. The AMC/RO will readjudicate the claims of entitlement to an initial rating in excess of 10 percent prior to December 14, 2010 and in excess of 30 percent beginning December 14, 2010 for TBI manifested by headaches and entitlement to an initial rating in excess of 40 percent for residuals of TBI manifested by cognitive impairment NOS beginning October 23, 2008 after consideration of the evidence submitted following the January 2013 SSOC.
2. If either of the benefits sought on appeal remains denied, the Veteran will be issued an appropriate SSOC and afforded the opportunity to respond. The case should then be returned to the Board for further appellate review, if otherwise in order.
The appellant has the right to submit additional evidence and argument on the matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2013).
_________________________________________________
U. R. POWELL
Veterans Law Judge, Board of Veterans' Appeals
Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the Board is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2013).
|
178 Kan. 69 (1955)
283 P.2d 461
STATE OF KANSAS, ex rel. HAROLD R. FATZER, Attorney General of the State of Kansas, Appellant,
v.
ANCIENT ORDER OF UNITED WORKMEN OF KANSAS, a corporation, Appellee.
No. 39,688
Supreme Court of Kansas.
Opinion filed May 7, 1955.
Harold R. Fatzer, Attorney General, argued the cause, and Paul E. Wilson, Charles C. McCarter, Thomas M. Evans, Robert E. Hoffman, Fred W. Rausch, Jr. and James L. Galle, Assistant Attorneys General, were with him on the briefs for the appellant.
Harry W. Colmery, of Topeka, argued the cause, and James E. Smith, of Topeka, Kenneth G. Speir, of Newton, and A.C. Bokelman, of Washington, were with him on the briefs for the appellee.
Earl H. Hatcher, Special Assistant Attorney General, of Topeka, and Everett E. Steerman, Special Assistant Attorney General, of Emporia, of counsel.
The opinion of the court was delivered by
PRICE, J.:
This is an action by the state, upon the relation of the attorney general, to recover the sum of $110,000 from the Ancient Order of United Workmen of Kansas, a corporation, a fraternal benefit insurance society (hereinafter referred to as defendant), which sum was appropriated by the 1951 legislature and paid to defendant from the general revenue fund of the state for a hospital building located on land owned by the state identified as the State Sanatorium for Tuberculosis, near Norton.
Defendant's demurrer to the second amended petition, on the ground that pleading fails to state facts sufficient to constitute a cause of action, was sustained.
This appeal by the state is from that ruling.
Because of the nature of the case, and in the interest of accuracy, we consider it advisable to set out the material portions of the second amended petition (hereinafter referred to as petition), despite *71 the fact they are lengthy, rather than attempt to summarize its allegations. They are as follow:
"3. On or about the 17th day of January, 1928, the defendant solicited the State Board of Administration of the State of Kansas for permission to construct a building on land owned by the State in fee and identified as the State Sanatorium for Tuberculosis near the City of Norton, Kansas. Pursuant to and as a result of such solicitation, the State Board of Administration purported to agree to the construction of such building and the purported agreement was reduced to writing under the date of January 17, 1928. Such instrument was signed by the officials of the Ancient Order of United Workmen but was not signed by any official of the State of Kansas other than the Attorney General who approved such instrument as to form only. A true and correct copy of such instrument is attached hereto, as Exhibit `A,' and made a part hereof.
"4. Such purported agreement was entirely void and without any legal effect whatsoever because the State Board of Administration of the State of Kansas had no legal authority under the statutes or the Constitution of the State of Kansas to enter into such understanding or agreement. Neither the State of Kansas nor its officers or agents had any right or authority to grant to the Ancient Order of United Workmen the privilege of using public lands as a private benefit when such benefit does not accrue to the public generally. The nature and character of the private benefit purported and attempted to be granted to the Ancient Order of United Workmen, which benefits did not accrue to the general public, consist of the following: The privilege of constructing a building for its own private use and benefit upon the public lands of the State of Kansas and the use and occupancy of said building, title to which was and has been at all times in the State of Kansas, for its own private purposes, as herein alleged; it was not required to pay, and did not pay any tax on the building used for its private benefit or on the land on which said building was constructed, because title to said building and land was and has been at all times in the State of Kansas, whereas, had defendant constructed a similar building on its own lands, or other private lands, said building and lands would have been subject to assessment and taxation under the Constitution and the laws of the State of Kansas and defendant would have been required to pay to the State of Kansas and its political subdivision taxes in an amount in excess of $100,000.00 from the time said building was constructed until July 1, 1951; the preferred right to place its ailing resident members and policyholders in said building, the title to which was and has been at all times in the State of Kansas, for hospitalization and treatment, to the exclusion of state and county tubercular patients who were citizens of the State of Kansas and members of the general public, and the privilege of receiving for its members and policyholders food, treatment, nursing, surgical and medical care at a cost greatly below the actual cost of furnishing such services to state and county patients; the privilege of holding out to prospective members and policyholders of defendant, as an inducement for the purchase of defendant's memberships and insurance policies, the use of the building, title to which was and has been at all times in the State of Kansas, and the facilities for treatment of tubercular patients therein, without charge or cost to defendant's members or policyholders, *72 with the result that the number of defendant's members and policyholders was increased thereby; it did charge its members a special assessment in addition to other membership fees and premiums for the special facilities for care and treatment available to its members at the State Sanatorium for Tuberculosis in a building, the title to which was and has been at all times in the State of Kansas, from which assessment defendant derived a benefit and profit over and above the cost of such services received by its ailing members for food, treatment, nursing, surgical and medical care in said building; the exclusive and preferred right to obtain admission of its members and policyholders who were nonresidents of the State of Kansas into said building, where they received food, treatment, medical and surgical care for a charge less than the actual cost to the State of Kansas, while non-residents of Kansas were not otherwise eligible for admission; its ailing members and policyholders received special preference over other citizens of the state in that such ailing members and policyholders were admitted to said building for treatment of tuberculosis immediately upon diagnosis of such illness, while other citizens of the state of Kansas who were victims of such disease were required to obtain the approval of certain county officials and then wait for admission to said State Sanatorium for Tuberculosis until such time as space was available for their care and treatment; the special privilege and private benefit received by defendant to construct a building upon the public lands of the State of Kansas for its private purposes and the other benefits above set out were not received or enjoyed by any of the several hundred other insurance companies doing business in the State of Kansas, and were not enjoyed by the public generally.
"Such benefits purported and attempted to be granted to the defendant were not authorized by the statutes of Kansas and are in violation of Section 2 of the Bill of Rights of the Constitution of Kansas, which provides that all free governments are founded on the authority of the people and are instituted for their equal protection and benefit.
"5. The defendant did construct a building upon the grounds occupied by the State Sanatorium for Tuberculosis near the City of Norton, Kansas, which land was owned by the State of Kansas in fee simple; that title to the building was and has been at all times in the State of Kansas. There was no agreement that title to the building would not follow the title to the land on which it was constructed.
"Defendant did furnish the building for the treatment of tubercular patients and did maintain the same. The State of Kansas did oversee and supervise said building and did furnish food, heat, light, water, nursing and medical services to the ailing members and policyholders of the defendant. The State of Kansas did, when beds in the building were not being used by ailing members and policyholders of defendant, place state and county patients therein.
"Plaintiff cannot specifically plead whether any of the purported obligations under the purported agreement were performed. Plaintiff alleges that the purported agreement was void and of no effect whatsoever and that neither plaintiff or defendant acquired any rights or obligations thereto.
"6. On or about the beginning of the year 1951, and during the months of January and February, the defendant solicited the State Board of Social Welfare *73 to recommend to the Ways and Means Committee of the House of Representatives that the State of Kansas purchase the building. That pursuant to such solicitations, the State Board of Social Welfare sought and obtained an appropriation from the 1951 Legislature of the State of Kansas in the amount of One Hundred Ten Thousand Dollars ($110,000.00) with which to purchase the building. The appropriation bill is contained in Section 1, Chapter 85, Laws of Kansas, 1951. The State of Kansas paid to the defendant the sum of $110,000.00 for the building and title thereto.
"7. The defendant did purport to convey to the State of Kansas by a `Deed of Conveyance' fee simple title. A true and correct copy of the purported Deed of Conveyance is attached hereto and made a part of this Petition as Exhibit `B.'
"8. The legislature of the State of Kansas was without authority to appropriate $110,000.00 to pay the defendant for the purchase of said building. Neither did any official of the State of Kansas, including the Auditor and the State Treasurer, have authority to pay to the defendant the sum of $110,000.00. That said appropriation was void and unconstitutional in that it was made in violation of Section 2 of the Bill of Rights of the Constitution of the State of Kansas, for the reason that the title to the building to be purchased by said appropriation was then vested in the State of Kansas. The legislature is without constitutional authority to appropriate or dissipate the public funds of the State of Kansas for the purchase of property then owned by the State of Kansas; and such appropriation did constitute a transfer of public funds and property of the State of Kansas for the special privilege and benefit of the defendant, as aforesaid, and for its private use and private gain without compensation or equal advantage to all the people, and did deny that equal protection and benefit to all of the people for which the government of the State of Kansas was instituted and established, said building so attempted to be purchased being then the property of the State of Kansas.
"9. The sum of $110,000.00 was illegally paid to the defendant in violation of Section 2 of the Bill of Rights of the Constitution of the State of Kansas and is being illegally retained by it. The sum of $110,000.00 should be recovered by the State of Kansas, together with interest at the rate of six percent per annum from the 6th day of July, 1951."
As alleged, a copy of the contract referred to was attached to the petition as an exhibit. It was entered into on January 17, 1928, between defendant, as party of the first part, and the State of Kansas, by its State Board of Administration, as party of the second part. The body of this contract reads:
"It is agreed that the party of the first part shall erect on the grounds of the State Sanatorium for Tuberculosis for the treatment of tubercular patients, near Norton, Kansas, a suitable building for the care of tubercular patients, this building to be built under specifications now in the hands of Charles D. Cuthbert, State Architect of Kansas.
"Party of the first part agrees to keep and maintain this building and to properly furnish it for the treatment of tubercular patients. The State of Kansas, *74 party of the second part, agrees to furnish the ground upon which this building shall be built, to oversee it as one of the units of the State Sanatorium for Tuberculosis, to furnish heat, light, and water. This building is to be available for the occupancy of patients from the membership of the party of the first part. The party of the first part shall pay the expenses of these patients the same as parents, guardians, and counties pay the expenses of patients in the State Sanatorium for Tuberculosis, and when such rooms in this unit are not occupied by members of party of the first part, they are to be available to the use of other patients who are admitted to the State Sanatorium for Tuberculosis."
It was signed by officers of defendant, and was signed and approved by the then attorney general of this state generally, not as to form only as alleged in the petition.
The deed of conveyance referred to in paragraph 7 of the petition, a copy of which was attached as an exhibit, requires no mention other than to say that it is dated July 1, 1951, defendant is party of the first part, the State of Kansas is party of the second part, and the body of the instrument recites:
"WITNESSETH, That said party of the first part, for and in consideration of the sum of One Hundred Ten Thousand Dollars, for which an appropriation was made by the 1951 legislature in House Bill 581, the receipt of which is hereby acknowledged, has sold and by this instrument does sell, assign, remise, release, quitclaim, convey and set over to the State of Kansas, the building now owned by first party, located on the grounds of the State Sanatorium for Tuberculosis, near Norton, Kansas, under the terms of the written contract between the State of Kansas by its State Board of Administration and The Ancient Order of United Workmen of Kansas, dated the 17th day of January, 1928, and all the estate, title and interest, whether real, personal or mixed, of the said party of the first part therein."
From an examination and study of the exhaustive briefs totalling some three hundred pages, it would appear that the parties have overlooked nothing with respect to the question whether the petition states facts sufficient to constitute a cause of action. However, despite the many questions raised, we think that what is true as to most lawsuits may be said of this one that is, once the fundamental and decisive point is reached and decided, discussion of other questions becomes purely academic and thus immaterial to the ultimate decision. With this thought in mind, we go directly to the controlling issue in the case ownership of the building which was erected pursuant to the contract of January 17, 1928.
The crux of the state's argument is that title to the building was at all times in the state therefore defendant had nothing to sell, the state thus bought nothing, and the "purchase price" paid constituted *75 an unlawful and unconstitutional expenditure of public funds. The facts and reasons upon which this conclusion is based are enumerated in the petition and will not be repeated except as they are referred to in our discussion.
Although for purposes of our decision there is considerable doubt as to the necessity for deciding the question whether the State Board of Administration had power and authority to enter into the contract, we nevertheless will touch on the subject briefly.
Article 7, Section 1, of our Constitution makes provision for such benevolent institutions as the public good may require. For many years the public policy of this state, as declared by the legislature, has been to protect the people from the ravages of tuberculosis. (See R.S. 1923, 65-105, et seq., and corresponding sections in G.S. 1949.) Reference to other sections found in R.S. 1923 establishes that at the time this contract was entered into the State Board of Administration had authority to manage and control state institutions such as the State Sanatorium for Tuberculosis (74-101, 76-1503) and was empowered to "... control and manage said institutions, including the erection of all buildings, ..." (74-105.)
It is clear that the basic subject matter of the contract is tuberculosis, treatment of which was at that time, and still is, a public purpose. In cooperating with the state in meeting the problem defendant agreed to erect a suitable building on the grounds of the State Sanatorium for the treatment of tubercular patients. Other provisions of the contract speak for themselves and will not be repeated. The mere fact defendant may have derived some private benefit from the erection and maintenance of the building does not render the contract illegal. The agreement had a public purpose and by its very terms conferred a public benefit cooperation with and assistance to the state in the treatment of tuberculosis.
The state, through its Board of Administration, had authority to permit the erection of the building by defendant on the grounds of the State Sanatorium for Tuberculosis, and the contract was not invalid for any of the constitutional or statutory reasons urged.
This brings us directly to the question of ownership of the building, but first we pause to mention a contention by the state that the allegation in the petition "that title to the building was and has been at all times in the State of Kansas," is admitted by the demurrer. *76 We do not agree. In Preston v. Shields, 159 Kan. 575, 156 P.2d 543, it was held:
"Where a party sets forth fully and in detail the specific facts upon which he predicated his title, an additional general allegation of title and ownership is surplusage and constitutes a conclusion of the pleader which is not admitted on demurrer." (Syl. 2.)
Here the state has set out in detail the facts upon which it bases its claim of ownership, and the general allegation of title amounts to nothing more than a conclusion, and as such is not admitted by the demurrer. (See also Pierce v. Schroeder, 171 Kan. 259, 264, 232 P.2d 460.)
Having determined that the contract of 1928, under which the building was constructed, was not invalid for the asserted reason the state was without authority to enter into it, provisions of the contract, or absence of them, become of paramount importance in the determination of ownership of the building down through the years. The state contends that as the contract did not specifically provide the building should remain the property of defendant it therefore, by operation of law, became the property of the state under the general proposition that if one builds a building on another's land it belongs to the latter as part of his land in the absence of an agreement to the contrary.
Concededly, there are situations to which the foregoing principle could apply, but in our opinion this is not one of them. As we read the contract, it gave a permissive use in the nature of a license to defendant to construct the building that is, it created a license in defendant to use the land for the purposes set forth. The very fact that defendant secured permission to build indicates that it sought to avoid the legal consequences of building without permission.
The general rule applicable to situations such as we have here is as follows:
"Generally a building erected on the land of another by his consent or license does not become part of the realty, but remains the property of the person annexing it. The same results will be achieved if the owner expressly consents or agrees that the building shall remain personalty; and an agreement of this nature may be oral and is not within the statute of frauds, since the agreement involves no sale of an interest in land.... and generally it is considered that where the landowner consents to the placing of a building on his land by another without an express agreement as to whether it shall become a part of the realty or remain personalty, an agreement will be implied that such building is to continue personal property, *77 in the absence of any other facts or circumstances tending to show a different intention." (22 Am. Jur., Fixtures, § 64, pp. 780, 781.)
Detailed discussion of previous decisions of this court on the general subject matter, among them being Keeling v. Kuhn, 19 Kan. 441; Docking v. Frazell, 34 Kan. 29, 7 P. 618; Smyre v. Kiowa County, 89 Kan. 664, 132 P. 209; Lumber Co. v. Larmor, 110 Kan. 670, 205 P. 621; Lumber and Grain Co. v. Eaves, 114 Kan. 576, 220 P. 512; Farmer v. Golden Rule Oil Co., 130 Kan. 803, 287 P. 706, and Blankenship v. School District, 136 Kan. 313, 15 P.2d 438, cited by the parties, would be of doubtful value due to their factual dissimilarity to the situation presented here, and neither do we consider it necessary or expedient to encumber this opinion with decisions from other jurisdictions.
In the last analysis the matter simply narrows down to this:
Defendant sought and was granted lawful permission to erect a building suitable for the treatment of tubercular patients. It did so. By the terms of the contract defendant agreed to keep and maintain the building and to furnish it properly for its intended purpose. Right of possession and use remained in defendant. It was further agreed that, when available, rooms in the building were to be at the disposal of the state in the furtherance of the common purpose. The contract speaks for itself, and certainly it contains nothing to indicate the building was to become property of the state merely because it was built on state land. The application of the general rule governing such a situation is clear that when a landowner consents to the placing of a building on his land by another, without an express agreement as to whether it shall become a part of the realty or remain the property of the person placing it there, in the absence of any other facts and circumstances tending to show a different intention, an agreement will be implied that the building is to remain the property of the one placing it there. There being no other facts and circumstances tending to show a different intention, we hold, therefore, that title to the building was at all times in defendant. Such being the case, the 1951 legislature possessed power and authority to appropriate funds for its purchase.
This opinion might very well end with what already has been said, but in view of the unusual nature of the case the court is of the opinion that it should mention another reason for its conclusion.
*78 Even if it be assumed, solely for the sake of argument, that the state, through its Board of Administration, lacked authority to enter into the contract whereby defendant was given permission to construct the building, the fact remains that it was entered into and the building was constructed pursuant thereto. Moreover, it is conceded that at all times, and by the mutual consent of all parties concerned, defendant occupied and controlled the building under a claim of right and ownership recognized by the state, notwithstanding that through the years it was used by both defendant and the state in furtherance of the common purpose. Having recognized such rights in defendant, and having accepted the benefits, the state, in good conscience and equity, and in the recognition of its moral obligation, possessed authority, through the legislature, to ratify the entire transaction and to appropriate funds for the purchase of the building.
It is elementary that in our form of government power to govern is conferred upon three coordinate branches or departments the legislative, the executive and the judicial. Each is independent and supreme within its own sphere, subject only to constitutional limitations. The legislature makes the laws, the executive administers and executes them, while the function of the judiciary is to interpret, explain and to apply the laws to controversies concerning rights, wrongs, duties and obligations arising under the laws. Except for certain constitutional limitations and restrictions, which are inapplicable to the facts presented here, the control and disbursement of funds belonging to the state are subject to the will of the legislature, unfettered by interference by the executive or the judiciary. Judicial examination of any law enacted by the legislature proceeds on the assumption that it is valid unless it contravenes an express inhibition of the constitution or one necessarily implied from some express affirmative provision of that instrument. For a discussion of the general principle involved see Hicks v. Davis, 97 Kan. 312, 154 P. 1030. No such showing of invalidity of the act in question which appropriated funds for the purchase of the building has been made, and it therefore stands.
Numerous other arguments which, through the industry and ingenuity of counsel, have been made in support of their respective contentions have been neither overlooked nor ignored. All have been carefully examined and considered, but, in view of our decision, require no discussion.
*79 We therefore hold:
The contract of January 17, 1928, whereby defendant was granted permission to construct the building in question, was not invalid for any of the reasons urged. Ownership of the building at all times remained in defendant, and the state had authority to purchase it. Further, even though it be assumed, solely for the sake of argument, that the state lacked authority to enter into the contract in the first instance, the action of the 1951 legislature in appropriating public funds for the purchase of the building was, for the reasons stated, not invalid.
The petition fails to state facts sufficient to constitute a cause of action, and defendant's demurrer thereto was properly sustained. The judgment of the trial court is therefore affirmed.
SMITH, J., not participating.
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Case 2:20-cv-05225-CCC Document 23 Filed 11/13/20 Page 1 of 11 PageID: 1103
**NOT FOR PUBLICATION**
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
MARVIN R.V., Civil Action No. 20-5225 (CCC)
Petitioner, OPINION
v.
JOHN TSOUKARIS, et al.,
Respondents.
CECCHI, District Judge:
Presently before the Court is Petitioner Martin R.V.’s (“Petitioner”) motion seeking a
temporary restraining order in this habeas matter. ECF No. 2. The Government filed opposition
to the motion (ECF Nos. 10–12, 21), to which Petitioner replied (ECF Nos. 13–14). For the reasons
set forth below, Petitioner’s motion is denied without prejudice.
I. BACKGROUND
Petitioner is a native and citizen of El Salvador who first entered the United States illegally
at some time prior to July 2010 without admission or inspection. ECF No. 10-7 at 2. In early
August 2010, Petitioner was taken into immigration custody and placed in removal proceedings
which resulted in his removal to El Salvador in October 2010. Id.; ECF No. 10-8 at 4. Petitioner
thereafter illegally re-entered the United States, and was removed in January 2013. Id. Petitioner
continued to illegally re-enter the United States, however, and was removed to El Salvador again
in May 2013 and in January 2015. Id. Unperturbed, Petitioner most recently illegally re-entered
the United States in 2015. ECF No. 1-2. In October 2016, Petitioner was arrested for resisting an
officer, was convicted, and was sentenced to three years in prison. Id.; ECF No. 10-8 at 3–4.
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Case 2:20-cv-05225-CCC Document 23 Filed 11/13/20 Page 2 of 11 PageID: 1104
Petitioner was also convicted of resisting an officer on a separate occasion, which resulted in an
additional five-year prison sentence imposed in July 2017. ECF No. 10-8 at 3. While in jail in
November 2016, the Government served him with notice of the reinstatement of his 2010 removal
order and their intent to remove him once again upon the conclusion of his prison sentence. Id. at
4–5. In 2017, Petitioner developed hypertension, for which he was prescribed Lisinopril. ECF No.
1-2 at 2.
Following his release from prison in November 2019, Petitioner was transferred into
immigration detention at the Essex County Correctional Facility (the “Facility”) pending his
removal from the United States. ECF No. 1-2 at 2. Although Petitioner is subject to a reinstated
administratively final order of removal, because Petitioner was found to have expressed a credible
fear of persecution upon his return to El Salvador in December 2019, Petitioner has been placed
in withholding only proceedings, which appear to be ongoing. ECF No. 10-10 at 2.
Upon his arrival at the Facility on November 27, 2019, Petitioner was given an intake
screening by a facility nurse. ECF No. harrisbrenda@example.com. During this screening, Petitioner reported being
prescribed both Lisinopril and aspirin once a day for his hypertension, as well as Flomax once a
day for urinary issues. Id. at 48, 53. Petitioner also received an intake tuberculosis chest x-ray,
which indicated no sign of illness. Id. at 51–53. On November 28, 2019, Petitioner was seen by a
nurse practitioner. Id. at 53–54. During this interview, Petitioner reported having issues with
peeling skin on his feet, for which he was prescribed a topical cream. Id. at 54–56. The practitioner
also ordered diagnostic blood tests and advised Petitioner to continue to take his medication. Id.
On December 10, Petitioner returned to the medical department and requested shampoo to
help with dandruff, which he was provided. Id. at 58–60. In early January, Petitioner’s blood tests
were completed, resulting in medical staff advising Petitioner to engage in diet and exercise. Id. at
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Case 2:20-cv-05225-CCC Document 23 Filed 11/13/20 Page 3 of 11 PageID: 1105
60–66. Petitioner also received an electrocardiogram on January 6, 2020. Id. at 66. That same
day, Petitioner made a sick call visit and requested a different cream for his feet, which he was
provided. Id. at 67–69. Petitioner returned to the medical unit on January 13 after he fell on his
back, and was prescribed ibuprofen for pain. Id. at 70–73. On February 1, Petitioner was seen on
a dental referral as he had a swollen jaw and a bleeding tooth. Id. at 73–74.
On February 24, 2020, Petitioner returned to the medical unit for a follow-up related to
nasal congestion and his foot issues, resulting in his being provided Claritin. Id. at 75–78. During
this evaluation, the nurse practitioner noted that Petitioner’s hypertension was in good control and
improving. Id. at 78. Petitioner thereafter received a dental exam on March 4, 2020, resulting in
his being prescribed antibiotics and pain medication. Id. at 79–80. On March 11, 2020, Petitioner
refused a scheduled extraction of the affected tooth. Id. at 82. On March 25, Petitioner once again
sought more cream to treat his peeling skin on his feet, which he was provided. Id. at 84–85. On
April 2, Petitioner sought help for difficulty breathing, which was determined to be the result of
nasal allergies. Id. at 86–89. Petitioner was advised to take more anti-histamines, which he was
provided. Id. at 89.
On April 14, Petitioner sought treatment for back pain and asked for a new cholesterol test.
Id. at 91–92. Petitioner was prescribed a muscle rub and pain medication for his back, and a new
lipid panel was ordered for his cholesterol. Id. at 93–98. Because Petitioner had elevated Alanine
Aminotransferase (“ALT”) levels, a hepatitis test was ordered and Petitioner was again advised to
engage in dieting and exercise. Id. at 98. On April 19, Petitioner requested see a doctor for his
back pain and his blood pressure. Id. at 99–100. He was seen on April 22 by a nurse practitioner,
who provided pain medication and ordered a number of additional tests. Id. at 101–02. These tests
revealed Petitioner had been exposed to hepatitis A at some point in the past, which was discussed
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Case 2:20-cv-05225-CCC Document 23 Filed 11/13/20 Page 4 of 11 PageID: 1106
with Petitioner, and he was advised to increase his fluid intake. Id. at 103–08. On May 4, 2020,
Petitioner received a COVID-19 antibody test, which indicated that he was positive for antibodies
indicating that Petitioner was likely in the process of recovering from COVID-19. Id. at 109. At
that time, Petitioner did not have a fever or other symptoms of COVID-19, but was in any event
moved into quarantine for fourteen days. Id. Petitioner appears to have recovered and been
removed from quarantine and placed back into a general housing unit. See ECF No. 13-2 at 4–5;
ECF No. 21 at 2.
In support of his petition and motion for a restraining order, Petitioner has submitted two
certifications from a proposed medical expert, Dr. Robert Greifinger. See ECF No. 1-4; ECF No.
14-1. In his certifications, Dr. Greifinger contends that Petitioner’s hypertension places Petitioner
at “very high risk of severe complications or death from COVID-19” notwithstanding the fact that
his condition is well controlled by medication. ECF No. 14-1 at 2–3.
In response, the Government has supplied two certifications from their own proposed
expert, Dr. Brian J. Cassidy. ECF No. 12-1. In his certification, Dr. Cassidy observed that
Petitioner’s hypertension is well controlled by his medication, and in any event noted that while
some studies suggest that hypertension “may [cause] an increased risk of severe complications,”
he did not believe that Petitioner was at any increased risk. ECF No. 12-1 at 4–8. Dr. Cassidy
further noted that, at the time he prepared his certification in May, the Centers for Disease
Prevention and Control (“CDC”) did not list hypertension alone as a factor placing individuals at
high risk (see id. at 7), and the Government has further noted that in its late June update to its risk
factor guidance, the CDC stated that, in light of limited data, those with hypertension “might be at
an increased risk for severe illness from COVID-19.” ECF No. 21 at 1.
4
Case 2:20-cv-05225-CCC Document 23 Filed 11/13/20 Page 5 of 11 PageID: 1107
II. DISCUSSION
A. Legal Standard
Injunctive relief is an “extraordinary remedy, which should be granted only in limited
circumstances.” Novartis Consumer Health v. Johnson & Johnson – Merck Consumer Pharms.
Co., 290 F.3d 578, 586 (3d Cir. 2002) (citation and quotation marks omitted). In order to establish
that he is entitled to injunctive relief in the form of a temporary restraining order, 1 Plaintiff must
demonstrate that “(1) he is likely to succeed on the merits; (2) denial
will result in irreparable harm; (3) granting the injunction will not
result in irreparable harm to the defendants; and (4) granting the
injunction is in the public interest.” Maldonado v. Houston, 157
F.3d 179, 184 (3d Cir. 1998) (as to a preliminary injunction); see
also Ballas v. Tedesco, 41 F. Supp. 2d 531, 537 (D.N.J. 1999) (as to
temporary restraining order). A plaintiff must establish that all four
factors favor preliminary relief. Opticians Ass’n of America v.
Independent Opticians of America, 920 F.2d 187 (3d Cir. 1990).
Ward v. Aviles, No. 11-6252, 2012 WL 2341499, at *1 (D.N.J. June 18, 2012). Plaintiff, as the
party seeking a temporary restraining order, must first demonstrate a “reasonable probability of
eventual success in the litigation.” Bennington Foods, LLC v. St. Croix Renaissance Group, LLP,
528 F.3d 176, 179 (3d Cir. 2008) (citation and quotation marks omitted). To satisfy this
1
The Third Circuit has recently reiterated that the relief available via a temporary restraining order
is “ordinarily [limited to] temporarily preserving the status quo,” and that injunctive relief going
beyond maintaining the status quo, such as the outright release of a detained alien, must instead
normally be obtained through a motion seeking a preliminary injunction. Hope v. Warden York
Cnty. Prison, 956 F.3d 156, 160-62 (3d Cir. 2020). The standard that applies to the grant of a
temporary restraining order is essentially identical to that which is applied when a party seeks a
preliminary injunction other than the requirement that a preliminary injunction can only be issued
after an adversary has been provided notice and an opportunity to be heard. This Court’s reasoning
is therefore equally applicable to the extent that Petitioner’s motion is seeking a temporary
restraining order or a preliminary injunction, as the motion refers to both forms of injunctive harrisbrenda@example.com. See Wincup Holdings, Inc. v. Hernandez, No. 04-1330, 2004 WL 953400, at *2 (E.D. Pa.
2004) (“[T]he standard for determining the applicability of a temporary restraining order is
identical to the test for determining the applicability of a preliminary injunction.”); see also Ward,
2012 WL 2341499 at *1.
5
Case 2:20-cv-05225-CCC Document 23 Filed 11/13/20 Page 6 of 11 PageID: 1108
requirement, “[i]t is not necessary that the moving party’s right to a final decision after trial be
wholly without doubt; rather, the burden is on the party seeking relief to make a prima facie case
showing a reasonable probability that it will prevail on the merits.” Ward, 2012 WL 2341499 at
*2 (quoting Oburn v. Sapp, 521 F.2d 142, 148 (3d Cir. 1975)).
To the extent that Petitioner’s requested relief is immediate release from detention, the
Third Circuit has historically authorized district courts reviewing habeas petitions by convicted
prisoners to enter an order granting bail pending the resolution of the petitioner’s habeas claims
under certain extraordinary circumstances. See, e.g., Lucas v. Hadden, 790 F.2d 365, 367-68 (3d
Cir. 1986). As bail pending a decision on a habeas petition is an extraordinary form of relief, it
will only be available where the petitioner raises “substantial constitutional claims upon which he
has a high probability of success, and . . . when extraordinary or exceptional circumstances exist
which make the grant of bail necessary to make the habeas remedy effective.” In re Souels, 688 F.
App’x 134, 135 (3d Cir. 2017) (quoting Landano v. Rafferty, 970 F.2d 1230, 1239 (3d Cir. 1992).
B. Analysis
In his motion, Petitioner argues that he should be released from immigration detention
because he has a high likelihood of success on his conditions of confinement claims – specifically
his claims that he has been subjected to punitive conditions of confinement without a supporting
conviction and that the facility in which he is detained and its staff have inadequately responded
to his medical needs in light of his medical history and the threat of COVID-19. The Third Circuit
recently reiterated the standards applicable to such claims in its decision in Hope v. Warden York
County Prison, 972 F.3d 310 (3d Cir. 2020). As the Third Circuit explained, in evaluating whether
an alien’s conditions of confinement amount to undue punishment, “[t]he touchstone for the
constitutionality of detention is whether conditions of confinement are meant to punish.” Id. at
6
Case 2:20-cv-05225-CCC Document 23 Filed 11/13/20 Page 7 of 11 PageID: 1109
325–27. In the absence of a showing that the detention facility’s staff acted with an express intent
to punish the petitioner, determining whether conditions amount to unconstitutional punishment
requires that the district court “consider the totality of the circumstances of confinement, including
any genuine privations or hardship over an extended period of time, and whether conditions are
(1) rationally related to their legitimate purpose or (2) excessive in relation to that purpose.” Id. In
reviewing the conditions and actions of detention officials and their relation to the Government’s
legitimate interest in detaining aliens pending the conclusion of removal proceedings, reviewing
courts “must acknowledge that practical considerations of detention justify limitations on many
privileges and rights,” and “ordinarily defer” to the expertise of prison officials in responding to
COVID-19 unless there is “substantial evidence in the record that the officials have exaggerated
their response” to the situation. Id. Given the Government’s strong interest in detaining aliens
subject to removal proceedings and the deference due to the expertise of detention officials, the
Third Circuit in Hope rejected the argument that detention during the COVID-19 pandemic would
amount to unconstitutional punishment where the Government had taken concrete steps aimed at
mitigating the threat posed to detainees, notwithstanding pre-existing health conditions which may
predispose those detainees to complications should they contract the virus. Id. at 327–29.
Turning to deliberate indifference medical claims, the Third Circuit reaffirmed that “[t]o
establish deliberate indifference, [the petitioner] must show the Government knew of and
disregarded an excessive risk to their health and safety.” Id. at 329 (citing Nicini v. Morra, 212
F.3d 798, 811 (3d Cir. 2000). The Court of Appeals further held that “[t]he context of the
Government’s conduct is essential to determine whether it shows the requisite deliberate
indifference,” and that, in evaluating this context, a reviewing court must defer to the expertise of
both medical officials and jail administrators and not assume a constitutional defect where concrete
7
Case 2:20-cv-05225-CCC Document 23 Filed 11/13/20 Page 8 of 11 PageID: 1110
action has been taken in response to the COVID-19 pandemic as “rules of due process are not
subject to mechanical application in unfamiliar territory.” Id. at 329–30 (quoting County of
Sacramento v. Lewis, 523 U.S. 833, 850 (1998)). Thus, where the Government has taken concrete
steps towards ameliorating the medical effects of COVID-19 on a detention facility, a detainee
will fall “well short of establishing that the Government was deliberately indifferent toward [his]
medical needs” in light of the virus even though the Government cannot entirely “eliminate all
risk” of contracting COVID, notwithstanding even serious pre-existing medical conditions which
may exacerbate a COVID-19 infection should one occur. Id. at 330–31.
Turning to the instant matter, the Government has a legitimate interest in detaining
Petitioner, and to show a likelihood of success on the merits of his punitive conditions claim,
Petitioner must show either that the Facility and its staff acted with an express intent to punish him
or that his conditions of confinement are arbitrary, purposeless, or excessive and therefore
unreasonable in light of that interest. Hope, 927 F.3d at 325–31; see also Stevenson v. Carroll, 495
F.3d 62, 67–68 (3d Cir. 2007); Daniel R.-S. v. Anderson, No. 20-3175, 2020 WL 2301445, at *5–
7 (D.N.J. May 8, 2020). As Petitioner has not alleged an express intent to punish him on the part
of Respondents, he must therefore present facts indicating that his current conditions are arbitrary,
purposeless or excessive in light of that clear interest in his detention.
Having reviewed the actions taken by the Facility to mitigate and alleviate the threat posed
to its detainees by COVID-19, the Court finds that Petitioner has failed to show that his conditions
of confinement are arbitrary, purposeless, excessive, or unreasonable. The Court reaches this
conclusion as the Facility has taken considerable and substantial steps to mitigate the virus’s
impact upon its detainee population. These steps include spacing out detainees as much as possible
to provide for social distancing, intake medical screenings for all incoming detainees, on-site
8
Case 2:20-cv-05225-CCC Document 23 Filed 11/13/20 Page 9 of 11 PageID: 1111
nurses at all times and doctors who are on-site sixteen hours a day and otherwise on call, increased
nurse visits to housing units, the suspension or limitation of entry into the facility by outside
vendors or volunteers, health screenings of employees and others permitted into the facility, the
provision of masks and protective equipment to staff and the provision of masks to detainees, the
provision of unlimited soap and water access to detainees, increased cleaning and sterilization of
the Facility including housing units, and the provision of disinfectants to staff for use to use in
between full cleanings. ECF No. 21-1 at 4–16. The Facility has also developed specific protocols
for the treatment of those who are or may be infected with COVID-19 – those with mild symptoms
are placed in quarantine in single occupancy cells and treated in-house with daily temperature
monitoring, those with more severe symptoms are instead transferred to a hospital for treatment,
and those exposed to known cases but who are asymptomatic are cohorted in separate units with
“ample room for social distancing” for fourteen days. Id. at 12–14. The Facility has also used
antibody testing to make determinations as to who should be quarantined or placed in a cohorted
unit among those who have not presented clear symptoms of COVID-19. See ECF No. 10-6. Those
who test positive for antibodies which indicate they are recovering from the virus are placed in
quarantine. Id. at 6. Taken together, these concrete steps taken to mitigate the threat of COVID-
19 and treat those infected with the virus clearly show that the conditions under which Petitioner
is detained are not arbitrary, excessive, or purposeless, but are instead rationally related to the
Government’s interest in detaining him. Petitioner has therefore failed to show that he is likely to
succeed on the merits of his conditions of confinement claim. Hope, 927 F.3d at 325–31; Daniel
R.S., 2020 WL 2301445 at *7.
In light of the significant medical treatment and monitoring Petitioner has received, as well
as the COVID-19 protocols outlined above, Petitioner has likewise failed to show a reasonable
9
Case 2:20-cv-05225-CCC Document 23 Filed 11/13/20 Page 10 of 11 PageID: 1112
likelihood of success on the merits to the extent he is also claiming that the facility has been
deliberately indifferent to his medical needs. Although this Court accepts that the COVID-19
pandemic does pose a threat to detainees that have ongoing medical needs such as hypertension,
nothing Petitioner has provided indicates that the Facility and its staff have been deliberately
indifferent to Petitioner’s medical needs. Instead, the record indicates that the Facility has been
attentive to Petitioner’s needs and has provided him medication as needed for each issue he raised
to the attention of the facility’s staff. Medical staff have likewise provided Petitioner with several
rounds of diagnostic testing in furtherance of that treatment. Combined with the numerous steps
taken to alleviate the threat of COVID-19 discussed above, Petitioner has failed to present facts
showing deliberate indifference on the part of medical staff, and it therefore does not appear that
Petitioner will be able to show that staff recklessly disregarded Petitioner’s health or the risks
posed by COVID-19. Petitioner has therefore failed to show a likelihood of success on the merits
to the extent he asserts that the staff have been indifferent to his medical needs. Hope, 927 F.3d at
329–31; Daniel R.S., 2020 WL 2301445 at *7. As Petitioner has failed to show a likelihood of
success on the merits as to his claims, he is not entitled to preliminary injunctive relief at this time
and his motion is therefore denied. 2
2
As Petitioner has failed to meet his burden with respect to the likelihood of success on the merits,
the Court need not address the remaining factors. See Reilly v. City of Harrisburg, 858 F.3d 173,
179 (3d Cir. 2017); Tate v. Schember, 809 F. App’x 64, 65–66 (3d Cir. 2020) (“[W]e will affirm
because we agree that [plaintiff] has not shown a likelihood of success on the merits for the
reasons that the District Court thoroughly explained.”); 431 E. Palisade Ave. Real Estate, LLC v.
City of Englewood, 977 F.3d 277, 279 (3d Cir. 2020) (reversing grant of preliminary injunction
because plaintiff “has not shown a likelihood of success on the merits”); In re Arthur Treacher’s
Franchisee Litig., 689 F.2d 1137, 1143 (3d Cir. 1982) (“Thus, a failure by the moving party to
satisfy these prerequisites: that is, a failure to show a likelihood of success or a failure to
demonstrate irreparable injury, must necessarily result in the denial of a preliminary injunction.”);
see also Emerson O. C.-S. v. Anderson, No. 20-3774, 2020 WL 1933992, at *7 (D.N.J. Apr. 22,
2020) (declining to address remaining preliminary injunction factors after determining that movant
had not demonstrated a likelihood of success on the merits of his claim).
10
Case 2:20-cv-05225-CCC Document 23 Filed 11/13/20 Page 11 of 11 PageID: 1113
III. CONCLUSION
For the reasons expressed above, Petitioner’s motion seeking a temporary restraining order
(ECF No. 2) is DENIED WITHOUT PREJUDICE. An appropriate order follows.
DATE: November 13, 2020
CLAIRE C. CECCHI, U.S.D.J.
11
|
Fourth Court of Appeals
San Antonio, Texas
April 16, 2020
No. 04-20-00147-CV
Clyde E. KEBODEAUX,
Appellant
v.
Patricia KEBODEAUX,
Appellee
From the 224th Judicial District Court, Bexar County, Texas
Trial Court No. 2013-CI-00629
Honorable Laura Salinas, Judge Presiding
ORDER
The trial court clerk has filed a notice of late record, stating appellant has not paid
or arranged to pay the clerk’s fee to prepare the record and that appellant is not entitled to
the record without paying the fee. We order appellant to provide written proof to this
court by April 27, 2020 that either appellant has paid the clerk’s fee, has made
satisfactory arrangements with the clerk to pay the fee, or is entitled to appeal without
paying the fee. See TEX. R. APP. P. 35.3(a)(2). If appellant fails to file such proof within
the time provided, this appeal will be dismissed. See TEX. R. APP. P. 37.3(b), 42.3(c).
_________________________________
Luz Elena D. Chapa, Justice
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the said
court on this 16th day of April, 2020.
___________________________________
Michael A. Cruz,
Clerk of Court
|
F I L E D
United States Court of Appeals
Tenth Circuit
JAN 29 2003
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
JAMES PHILLIPS,
Plaintiff - Appellant,
v. No. 02-2197
D.C. No. CIV-02-817-JP/LCS
PUBLIC SERVICE COMPANY OF (D. New Mexico)
NEW MEXICO,
Defendant - Appellee.
ORDER AND JUDGMENT *
Before EBEL, LUCERO and O’BRIEN, Circuit Judges.
James Phillips appeals pro se from the district court’s sua sponte dismissal
under Fed. R. Civ. P. 12(b)(6) of his Title VII complaint. We exercise
jurisdiction pursuant to 28 U.S.C. § 1291. Because we conclude that it is patently
obvious that Phillips could not prevail on the facts alleged, we affirm.
*
The case is unanimously ordered submitted without oral argument
pursuant to Fed. R. App. P. 34(a)(2) and 10th Cir. R. 34.1(G). 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.
On July 8, 2002, Phillips filed a “Notice to File Charge of Discrimination,”
in which he alleged violations of Title VII of the Civil Rights Act of 1964, 42
U.S.C. §§ 2000e-2 to -3. In his “Notice,” Phillips alluded to several violent
incidents involving his supervisor, Larry Henderson, including: (1) an incident in
which Henderson allegedly kicked a shop door open, striking Phillips; (2) an
incident in which Henderson allegedly used a company pickup in an attempt to
“run him down”; and (3) an incident in which Henderson allegedly used a
company bicycle to attempt the same. (1 R. Doc. 1 at 1–2.) Concluding that
Phillips’s Notice, as drafted, failed to make allegations sufficient to support a
Title VII claim, the district court dismissed Phillips’s Notice sua sponte, and
without prejudice.
We review the district court's Rule 12(b)(6) ruling de novo. See Chem.
Weapons Working Group, Inc. v. U.S. Dep’t of the Army, 111 F.3d 1485, 1490
(10th Cir. 1997). We construe a pro se plaintiff's pleadings liberally, Haines v.
Kerner, 404 U.S. 519, 520 (1972), and “[a]ll reasonable inferences must be
indulged in favor of the plaintiff . . . .” Swanson v. Bixler, 750 F.2d 810, 813
(10th Cir. 1984).
Dismissals under Rule 12(b)(6) typically follow a motion to dismiss, which
gives the plaintiff notice and an opportunity to amend his complaint.
Nevertheless, in this circuit, sua sponte dismissal of a meritless complaint that
-2-
cannot be salvaged by amendment comports with due process and does not
infringe the right of access to the courts. Curley v. Perry, 246 F.3d 1278, 1284
(10th Cir. 2001). A sua sponte dismissal under Rule 12(b)(6) is not reversible
error when: (1) it is “patently obvious that the plaintiff could not prevail on the
facts alleged”; and (2) “allowing [the plaintiff] an opportunity to amend his
complaint would be futile.” McKinney v. State of Okla. Dep’t of Human Servs.,
925 F.2d 363, 365 n.1 (10th Cir. 1991).
Having reviewed Phillips’s Notice, we conclude that Phillips has made no
allegation that would support a Title VII claim. Title VII prohibits employment
discrimination on the basis of race, color, religion, sex, or national origin. 42
U.S.C. § 2000e-2(a). Phillips’s Notice lacks even the faintest suggestion that his
treatment by his employer is in any way related to his membership in a protected
group. Thus, Phillips’s Notice, as currently drafted, is inadequate to raise a claim
of disparate treatment discrimination under § 2000e-2. Phillips also states that he
fears to report all of the incidents because his employer would “use this against
[him] and threaten [him] with termination” (1 R. Doc. 1 at 2), which the district
court construed to be a claim for retaliatory discrimination under Title VII. We
agree with the district court that Phillips’s Notice, as currently drafted, fails to
allege any protected activity that would constitute a basis for a retaliatory
discrimination claim under 42 U.S.C. § 2000e-3.
-3-
The district court did not address whether allowing Phillips to amend his
complaint would be futile, nor did it give Phillips notice and an opportunity to
remedy the defect in his complaint. Phillips has not suggested on appeal,
however, how his Notice might have been amended to state a claim under Title
VII had he been given the opportunity. While we construe a pro se plaintiff’s
pleadings liberally, we “will not supply additional facts, [or] construct a legal
theory for [a] plaintiff that assumes facts that have not been pleaded.” Dunn v.
White, 880 F.2d 1188, 1197 (10th Cir. 1989). Because Phillips’s Notice was
dismissed without prejudice, no real disadvantage has come to Phillips as a result
of the sua sponte dismissal and his due process rights and right of access to the
courts are not implicated. See Curley, 246 iferrell@example.net. Should he have a good
faith basis to do so, Phillips is free to file another complaint.
For the forgoing reasons, the judgment of the district is AFFIRMED.
The mandate shall issue forthwith.
ENTERED FOR THE COURT
PER CURIAM
-4-
02-2197, Phillips v. Public Service Company of New Mexico
LUCERO, Circuit Judge, Dissenting.
In McKinney v. State of Okla. Dep’t of Human Servs., we held that a sua
sponte dismissal under Rule 12(b)(6) is not reversible error when: (1) it is
“patently obvious that the plaintiff could not prevail on the facts alleged”; and (2)
“allowing [the plaintiff] an opportunity to amend his complaint would be futile.”
925 F.2d 363, 365 n.1 (10th Cir. 1991). In Curley v. Perry, we similarly noted
that a “sua sponte dismissal of a meritless complaint that cannot be salvaged by
amendment comports with due process and does not infringe the right of access to
the courts.” 246 F.3d 1278, 1284 (10th Cir. 2001) (emphasis added). In the
instant case, we have no idea whether Phillips’s complaint could have been
salvaged by amendment because the district court failed to address the issue. It
would not take a substantial effort for the district court to make the inquiry
required by McKinney. I think this would be the better practice. While it is not
my place to speculate as to whether Phillips could have, in good faith, amended
his pleadings to state a claim under title VII, the record on appeal does reveal that
Phillips is a member of a protected class of persons, African-Americans,
indicating that it is not facially obvious that allowing him to amend his complaint
would have been futile. It is true that Phillips is not barred from filing a new
complaint, given that his Notice was dismissed without prejudice. However, the
time and expense involved in forcing litigants to file new lawsuits, should they
have a good faith basis to do so, can be obviated by the approach we established
in McKinney. This approach strikes a balance between a district court’s
legitimate need to be able to dispense with patently defective or frivilous
complaints in an expeditious manner and the fact that “[s]ua sponte dismissals are
strong medicine, and should be dispensed sparingly.” Chute v. Walker, 281 F.3d
314, 319 (1st Cir. 2002) (quotation omitted). It is especially important to uphold
this balance when dealing with pro se litigants, who are generally “to be given
reasonable opportunity to remedy defects in their pleadings.” Hall v. Bellmon,
935 F.2d 1106, 1110 n.3 (10th Cir. 1991).
For these reasons, I respectfully dissent.
-2-
|
Exhibit 10.258
Confidential Treatment Requested by
Dollar Thrifty Automotive Group, Inc.
AMENDMENT 02
TO THE SERVICES AGREEMENT
between
Dollar Thrifty Automotive Group, Inc.
and
HP Enterprise Services LLC
for
The modification of the Agreement to establish a new Resource Unit and pricing
for wireless access point (WAP) LAN Network Devices.
1 April 2012
DTG/HP Confidential Amendment 02
Page 1 of 5
--------------------------------------------------------------------------------
Confidential Treatment Requested by
Dollar Thrifty Automotive Group, Inc.
AMENDMENT 02
TO THE SERVICES AGREEMENT
This Amendment number one (02) to the Services Agreement, including all
attachments, exhibits, and schedules attached hereto and incorporated herein by
reference (collectively, “Amendment 02”) is entered into as of the last date
executed by the Parties (the “Amendment 02 Effective Date”), by and between
Dollar Thrifty Automotive Group, Inc. (“Customer”), and HP Enterprise Services
LLC (“Provider”).
All capitalized terms used in this Amendment 02 that are not otherwise defined
herein shall have the meaning ascribed to them in the Agreement.
RECITALS
WHEREAS, Dollar Thrifty Automotive Group, Inc. and HP Enterprise Services, LLC
entered into that certain Services Agreement as of April 4, 2011 (the
“Agreement”); and
WHEREAS, Customer and Provider desire to amend the Agreement to establish a new
Resource Unit and pricing for wireless access point (WAP) LAN Network Devices.
NOW THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties hereto agree as follows:
1
Pricing
1.1
Exhibit 4 (Pricing and Financial Provisions) is modified to define a new
billable Resource Unit for wireless access point (WAP) LAN Network Devices. The
definition for LAN Network Devices in Section IV.3 (Managed Network Services)
paragraph (b)(i) is deleted and replaced as follows:
“(i)
LAN Network Devices – LAN Network Devices include those devices that are network
related attached to the intranet and are defined as routers, switches, hubs, and
firewalls. Wireless access point (WAP) LAN Network Devices are those devices
that allow wireless devices to connect to a wired network using Wi-Fi or related
standards.”
DTG/HP Confidential Amendment 02
Page 2 of 5
--------------------------------------------------------------------------------
Confidential Treatment Requested by
Dollar Thrifty Automotive Group, Inc.
1.2
Exhibit 4-A (Provider Pricing Forms) is modified to delete Exhibit 4-A Summary
Fees (Page 2), Detailed Base Charges (Pages 3-23), Variable SOW Based Charges
(Pages 24-29), Unit Rates (ARCs & RRCs) (Pages 30-32), ADM Rate Card (Pages
56-57), and Infrastructure Rate Card (Pages 58-60) in their entirety and replace
them with the pricing schedules in Attachment 1 to this Amendment 02. The
pricing schedules in Attachment 1 reflects the following modifications to the
Exhibit 4-A pricing forms:
●
Changes to the rates resulting from Year 2 inflation adjustments (submitted to
DTG on February 2, 2012)
●
Establishes a separate billing category for wireless access point (WAP) LAN
Network Devices and adjusts original LAN Network Device Resource Unit baseline
volumes and charges to reflect two categories of LAN Network Devices and other
minor baseline adjustments agreed by the Parties.
1.3
Exhibit 4-D (Resource Baseline Units) is deleted in its entirety and replaced
with the Exhibit 4-D Resource Baseline Units exhibit included as Attachment 2 to
this Amendment 02. The replacement Exhibit 4-D establishes a separate Resource
Unit category for wireless access point (WAP) LAN Network Devices.
2
Counterparts. This Amendment 02 may be executed in several counterparts, all of
which taken together shall constitute a single agreement between the parties.
IN WITNESS WHEREOF, the Customer and Provider have each executed this Amendment
02 on the dates set forth below.
DOLLAR THRIFTY AUTOMOTIVE
GROUP, INC.
HP ENTERPRISE SERVICES
L.L.C.
By:______________________________ By:______________________________
Title:_____________________________ Title:_____________________________
Date:_____________________________ Date:_____________________________
DTG/HP Confidential Amendment 02
Page 3 of 5
--------------------------------------------------------------------------------
Confidential Treatment Requested by
Dollar Thrifty Automotive Group, Inc.
Attachment 1 to Amendment 02
Exhibit 4-A (Provider Pricing Forms) Replacement Pages
[***]
A CERTAIN PORTION OF THIS EXHIBIT, WHICH IS INDICATED BY “***” HAS BEEN OMITTED
BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
--------------------------------------------------------------------------------
Confidential Treatment Requested by
Dollar Thrifty Automotive Group, Inc.
Attachment 2 to Amendment 02
Exhibit 4-D (Resource Baseline Units)
[***]
A CERTAIN PORTION OF THIS EXHIBIT, WHICH IS INDICATED BY “***” HAS BEEN OMITTED
BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
--------------------------------------------------------------------------------
|
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
DENISE NELSON, ) CASE NO. 8:20-cv-14
)
Plaintiff, )
)
v. ) ORDER
)
ETHICON, INC. and )
JOHNSON & JOHNSON, )
)
Defendants. )
THIS MATTER is before the Court on Defendants’ Motion for Withdrawal of Counsel
regarding Molly E. Flynn, Melissa A. Merk, and Rebecca L. Trela of the law firm Drinker Biddle
& Reath (Filing No. 69). The Court finds that the Motion should be granted. Accordingly,
IT IS ORDERED that the Motion for Withdrawal of Counsel (Filing No. 69) is granted.
Molly E. Flynn, Melissa A. Merk, and Rebecca L. Trela are deemed withdrawn as counsel for
Ethicon, Inc., and Johnson & Johnson and shall no longer receive electronic notice in this case.
DATED this 27th day of January, 2020.
BY THE COURT:
s./Michael D. Nelson
United States Magistrate Judge
1
|
Title: Crazy Parents
Question:So I’m 16 (and a girl) and my girlfriend is 15. Recently one of the teachers at our school informed her parents that we were together. Well her parents told her to stay away from me and so we just didn’t wagnersteve@example.org. Her parents then found out that we were still talking on the phone so they took her phone and went through it (which they have every right to). They saw some “personal” messages, no pictures just texts, and decided that they were going to put a no contact order on me because they think I forced her into having sex with me (never even had sex). They don’t believe her and now they tell her things like “I hate you” “I should have never had you” “you’re a failure”. They contacted my mom about it and wanted to meet up but she didn’t give them a time and she still doesn’t know what’s happening. I dont know what to do I need some advice. Also I’m located in Georgia.
Answer #1: You don't need to do anything. The parents can prevent the two of you from interacting.
You didn't state your location, but it is very unlikely that the parents will attempt to or could successfully bring any legal action against you. In the unlikely event that you are served, you will need an attorney.Answer #2: Don't meet up with these people, what good can come of it?
Ignore them and move on with your life, they can't do anything to stop you from being with her but they can stop her from seeing you if they choose so.
If you stay together though, don't send any 'personal' pictures and you should be fine. Answer #3: Why does your Mom not know what is happening?Answer #4: It might be a better idea to take this to r/relationships, I suspect there will be better help there. And maybe r/lgbteens (sp?). I wish you the best of luck and I'm sorry about your situationAnswer #5: WTF is wrong with the teacher? |
55 P.3d 756 (2002)
203 Ariz. 413
In the Matter of Thomas M. CONNELLY, Attorney No. 12987, Respondent.
No. SB-02-0055-D. Disc. Comm. No. 99-2417.
Supreme Court of Arizona, En Banc.
August 9, 2002.
*757 State Bar of Arizona By Yigael M. Cohen, Director of Lawyer Regulation, Phoenix, Attorney for the State Bar of Arizona.
Hinshaw & Culbertson By Brian Holohan, Phoenix, Attorney for Thomas M. Connelly.
Thomas J. Marlowe, Phoenix, Attorney for Thomas M. Connelly.
OPINION
McGREGOR, Vice Chief Justice.
¶ 1 This matter arose after Respondent Connelly's client filed a complaint with the State Bar, alleging that Respondent charged an unreasonably high fee. We granted review to determine whether, when a client who has contractually agreed to submit fee disputes to binding arbitration files a complaint alleging his lawyer charged an unreasonable fee, disciplinary proceedings should begin before fee arbitration proceedings conclude. We hold that when a lawyer and client have agreed to binding fee arbitration and the disciplinary complaint involves no allegations of other misconduct, the State Bar should await the conclusion of fee arbitration proceedings before initiating formal disciplinary proceedings. We also consider the appropriate standard to use in evaluating whether an attorney's fee constitutes a reasonable fee.
I.
¶ 2 Police arrested Gregory Richman in July 1998 and confiscated three grams of cocaine from his vehicle. After his release, Richman sought advice from Thomas M. Connelly, an experienced criminal defense attorney who had represented Richman in an earlier matter. Connelly told Richman to do nothing until the county attorney contacted him. In November 1998, Richman received a summons indicating a grand jury had indicted him for possession of narcotic drugs, a class four felony. Richman promptly notified Connelly of the charges against him.
¶ 3 When Connelly saw the indictment, he noted that although Richman was indicted for only a single charge of possession, the indictment set out seventy-four separate counts and named approximately twenty defendants. Based on the indictment and Connelly's knowledge about the attorney who had prepared the summons, Connelly told Richman he believed Richman's case would not remain a simple possession case but would involve considerable discovery, a motion to sever and a motion to suppress. Connelly estimated that absent a successful motion to sever, and should Richman's case go to trial, the case could take eight months to two years to resolve. In addition, Connelly told Richman he might face either jail or prison time.
¶ 4 Connelly, Richman and Richman's mother, an attorney in Chicago, discussed Connelly's fee on two occasions. Due to the *758 difficulty he thought the case presented, Connelly initially stated his fee would be $75,000. After negotiations, however, he reduced that figure to $50,000 and discussed various flat fee options with Richman and his mother. Over the next several days, Richman considered the available fee options and agreed to a $50,000 "non-refundable" flat fee that would cover the entire case, excluding appellate matters. Connelly sent a fee agreement form to Richman for his signature. After asking Connelly to clarify portions of the form, Richman signed and returned the $50,000 flat fee agreement on January 4, 1999. Under the terms of the fee agreement, Connelly and Richman agreed to resolve any fee dispute through binding arbitration.
¶ 5 The state filed no additional charges against Richman, and Connelly resolved the case without filing any motions or proceeding to trial. Connelly negotiated the TASC diversion program[1] for Richman which, upon Richman's successful completion, would result in a dismissal of criminal charges. The county attorney's office moved to suspend Richman's prosecution on April 7, 1999, approximately three months after Connelly began representing Richman.
¶ 6 In December 1999, after Richman successfully completed TASC and the court dismissed the charges against him, Richman filed a bar complaint accusing Connelly of charging an unreasonable fee. Richman had neither told Connelly of his dissatisfaction with the fee nor sought fee arbitration.
¶ 7 The State Bar initiated this disciplinary proceeding shortly thereafter.[2] When Connelly learned of Richman's complaint, he conducted a retrospective review of his representation and fee, which included speaking with three other experienced criminal lawyers, and concluded that he had charged a reasonable fee. The State Bar subsequently filed a formal complaint against Connelly.[3]
¶ 8 At his disciplinary hearing, Connelly presented an accounting, prepared subsequent to the filing of the bar complaint, of the hours he had spent on Richman's case. According to that document, Connelly and his associate spent 116.8 hours on Richman's case, and based on respective hourly rates of $200 and $350, earned $38,015.[4] Connelly testified that his representation of Richman included drafting a discovery request, reviewing an eighteen-page discovery response and looking at other significant evidence, including wiretap transcripts and police reports that referred to Richman. Connelly also testified that Richman was a very difficult and needy client who called and dropped by the office frequently.
¶ 9 Connelly's expert witness, Michael Black, stated that he viewed Connelly's fee as reasonable, both prospectively and retrospectively. He testified that he would have charged Richman between $75,000 and $100,000. The State Bar's expert witness, Michael Kimerer, testified that a reasonable fee in this case, considered retrospectively, would have been in the range of $20,000 to $25,000.
¶ 10 Analyzing Connelly's fee pursuant to Ethics Rule (ER) 1.5, Ariz. R. Sup.Ct. 42, the Hearing Officer found that Connelly did not initially violate ER 1.5 by charging $50,000 because the case originally appeared labor-intensive and Connelly had substantial experience in this area. The Hearing Officer also found, however, that Connelly's fee constituted *759 an excessive and unreasonable fee when viewed retrospectively at the conclusion of representation.
¶ 11 The Hearing Officer recommended that Connelly be censured and required to pay Richman restitution in the amount of $11,985, the difference between $50,000 and $38,015. Connelly appealed, and the Commission affirmed the Hearing Officer's recommendation of censure. In addition, the Commission increased the amount of restitution to $25,000 because it did not find Connelly's hourly reconstruction credible and because Kimerer had testified that $25,000 constituted a reasonable fee.
¶ 12 We granted Connelly's petition for review and exercise jurisdiction pursuant to Article VI, Section 5.6 of the Arizona Constitution and Ariz. R. Sup.Ct. 53(e)5.
II.
¶ 13 Connelly asserts that the State Bar should have referred Richman's complaint to the fee arbitration program rather than initially treat the complaint as a formal disciplinary matter. Under the facts of this case, we agree.
A.
¶ 14 Connelly and Richman signed a fee agreement that included the following language:
Should there be any disagreement or dispute concerning or arising out of or relating to our services, fees or costs, or our relationship with you, and in the event they are not capable of resolution between the Attorneys and Client, the Attorneys and Client both agree to final and binding arbitration under the procedures of the State Bar of Arizona for resolving such matters.
(Emphasis added.) Despite that agreement, Richman filed a bar complaint against Connelly rather than submit the dispute to binding arbitration. At the disciplinary hearing, Connelly testified that he suggested fee arbitration to bar counsel when notified of Richman's complaint and the disciplinary proceeding against him.[5] Although the record is unclear, Bar Counsel's remarks indicate that he discussed fee arbitration with Richman but Richman "felt that he was not going to be successful at [fee arbitration]." Tr. of Disciplinary Comm'n ryan06@example.org. Bar Counsel also stated that the decision to go to fee arbitration rested with Richman, and that "fee arbitration is not within the purview of the State Bar." Id.
B.
¶ 15 Both disciplinary proceedings concerning the reasonableness of a lawyer's fee and fee arbitration proceedings center around ER 1.5, which states that "[a] lawyer's fee shall be reasonable" and then goes on to enumerate eight "factors to be considered in determining the reasonableness of a fee." Ariz. R. Sup.Ct. 42, ER 1.5(a) (emphasis added). Although the two proceedings involve similar issues, they do not serve precisely the same purpose.
¶ 16 The purpose of fee arbitration is to provide a forum "for the resolution of fee disputes." Ariz. R. Sup.Ct. 42, ER 1.5, Comment, Disputes over Fees (emphasis added); see also Rules of Arbitration of Fee Disputes, State Bar of Ariz. Fee Arbitration Comm. (Rules of Arbitration of Fee Disputes) I.A ("The purpose of the ... Fee Arbitration Committee ... is to provide a forum for the binding arbitration of fee disputes."). When a fee dispute goes to arbitration, "[t]he issue before a sole arbitrator or a fee arbitration panel ... as set forth in ER 1.5 ... is whether the fees charged were reasonable for the work that was performed." Id. at III.A. After considering the reasonableness of the fee charged, the arbitrator enters a specific award that "is final and binding upon the parties and ... such award may be enforced by any court of competent jurisdiction." Id. at IV.B.3.
¶ 17 A formal disciplinary action brought under ER 1.5 considers whether a lawyer's *760 fee in a specific case falls within the range of reasonable fees for the services performed. If the lawyer's fee is deemed unreasonable under ethical standards, a formal disciplinary proceeding also determines what sanction to impose. See Ariz. R. Sup.Ct. 47(f)2, 48(d)3, 51(b).
¶ 18 The potential overlap between these two proceedings is evident. Several differences between them, however, support the conclusion that the State Bar should utilize fee arbitration before considering whether formal disciplinary action should follow. First, the State Bar's announced policy encourages lawyers to submit fee disputes to arbitration. The Comment to ER 1.5 urges that "[e]ach lawyer should conscientiously consider submitting to [fee arbitration]." Ariz. R. Sup.Ct. 42, ER 1.5, Comment, Disputes over Fees. Because the Fee Arbitration Committee "shall not have jurisdiction over a dispute ... [i]f an action on the dispute already is pending in another forum," Rules of Arbitration of Fee Disputes II.B.3, initiating disciplinary action precludes parties from utilizing the preferred method of arbitration. We do not approve of a procedure through which the State Bar encourages fee arbitration on the one hand and, on the other, undermines arbitration agreements by imposing discipline before allowing the arbitration procedure to work.
¶ 19 Proceeding first to arbitration is particularly important when, as occurred here, an attorney and client have explicitly agreed to binding arbitration in the event of a fee dispute. By rejecting Connelly's request that the matter first proceed to fee arbitration, the State Bar, in effect, allowed Richman to sidestep his contractual obligation to arbitrate the fee dispute.[6]
¶ 20 Fee arbitration proceedings provide a better setting for initially resolving fee disputes for other reasons. The parties are more likely to obtain a prompt resolution through arbitration. The pertinent rules direct that an arbitration hearing be set within ninety days after receipt of an agreement to arbitrate. Id. at VII.A. In disciplinary matters, in contrast, a hearing date should be set within 150 days of filing a complaint. Ariz. R. Sup.Ct. 53(c)6. The burden of proof also differs between fee arbitration and formal disciplinary proceedings. In arbitration, the attorney bears the burden of showing, by a preponderance of the evidence, that she charged a reasonable fee. Rules of Arbitration of Fee Disputes VI.F. In formal disciplinary proceedings, the State Bar must establish the allegations of the complaint by clear and convincing evidence. Ariz. R. Sup. Ct. 54(c),(d). Both distinctions can benefit a client seeking a prompt resolution of a fee dispute.
¶ 21 Finally, because fee arbitration determines whether a lawyer charged a reasonable fee and, if not, the amount that represents a reasonable fee, the award provides valuable information for a formal disciplinary hearing, if one follows. For all those reasons, we conclude that fee arbitration provides the appropriate forum for determining what constitutes a reasonable fee for work performed in a particular case.
C.
¶ 22 In its brief, the State Bar presents several arguments to support the proposition that it acted appropriately by initially treating Richman's complaint as a formal disciplinary matter. First, the Bar argues that because fee arbitration is voluntary, it cannot force the parties to use that procedure. The Bar's concerns are misplaced here, however, because Richman and Connelly had already agreed to binding arbitration.
¶ 23 The Bar also expresses concern that, if both parties agree to arbitration, it will lose its opportunity to initiate formal disciplinary proceedings. The result, the Bar asserts, is that the Bar can only discipline some attorneys who charge unreasonable fees but cannot discipline others. Our holding, however, does not prevent the State Bar from filing a formal complaint to commence formal disciplinary proceedings once *761 fee arbitration proceedings have concluded, if such proceedings appear appropriate.
¶ 24 The State Bar also urges that requiring enforcement of an agreement to arbitrate before instituting formal disciplinary proceedings could delay an investigation into activities that cause public harm. That danger results, the Bar states, from the fact that most complaints involving excessive fees also involve allegations of other ethical violations. See, e.g., In the Matter of Hirschfeld, 192 Ariz. 40, 42, 960 P.2d 640 §§ 9-11, 192 Ariz. 40, 960 P.2d 640, 642 (1998). We agree that the State Bar should retain discretion to treat complaints involving matters other than a simple fee dispute in a way that prevents public harm. This action, however, involves no other allegations of misconduct.
¶ 25 We conclude that the State Bar should follow its policy of encouraging lawyers and clients to resolve fee disputes through arbitration. We hold, therefore, that the State Bar should not have begun formal disciplinary proceedings against Connelly until arbitration of the fee dispute had concluded.
III.
¶ 26 To decide whether a fee charged constitutes a reasonable fee, for purposes both of arbitration and formal disciplinary proceedings, we look to ER 1.5. That rule requires that a lawyer's fee be reasonable and then lists eight factors "to be considered in determining the reasonableness of a fee." Ariz. R. Sup.Ct. 42, ER 1.5(a)(1)-(8); see Hirschfeld, 192 Ariz. at 43 ¶ 15, 960 ryan06@example.org. The eight factors are:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent.
Ariz. R. Sup.Ct. 42, ER 1.5(a). Subsection 8 of ER 1.5(a) makes clear that the nature of the fee agreed upon by the lawyer and client plays an important role in considering the reasonableness of the fee. Because Connelly and Richman agreed to a non-refundable flat fee, that factor affects the analysis of whether Connelly charged a reasonable fee.
A.
¶ 27 A non-refundable flat fee represents one type of fixed fee agreement. We have held that non-refundable retainers are not per se violations of Ethical Rule 1.5 and "a flat fee charged for specific legal services can be proper." Hirschfeld, 192 Ariz. at 43 ¶ 17, 960 ryan06@example.org. We have also explained that "[r]egardless of how [a] fee is characterized ... each [fee agreement] must be carefully examined on its own facts for reasonableness." Id. Finally, like other fee arrangements, non-refundable flat fees are subject to retrospective analysis. See In the Matter of Swartz, 141 Ariz. 266, 273, 686 P.2d 1236, 1243 (1984) ("We hold ... that if at the conclusion of a lawyer's services it appears that a fee, which seemed reasonable when agreed upon, has become excessive, the attorney may not stand upon the contract; he must reduce the fee.").
¶ 28 The State Bar's Committee on the Rules of Professional Conduct (the Committee) has provided useful guidance in understanding the nature and proper use of flat fees. A non-refundable fee agreement is one "under which the attorney may be entitled to the fee regardless of whether he or she actually performs the services (or some portion of the services) called for in the agreement." State Bar of Ariz. Comm. on Prof'l Conduct, Op. 99-02 at 4 n. 2. Furthermore, a flat fee, which may or may not be refundable, "describes an agreement whereby the attorney renders a specified legal service for an amount that is fixed at the start of the *762 representation." Id. at 6. Similarly, the Restatement (Third) of the Law Governing Lawyers, defines a non-refundable flat fee as "a lump-sum fee constituting complete payment for the lawyer's services." Restatement § 38 cmt. g (1998).[7] According to the Committee, legal services typically performed in non-refundable flat fee agreements are "self-contained task[s] that can easily be described from start to finish, such as ... handling a litigation from complaint to judgment." State Bar of Ariz. Comm. on Prof'l Conduct, Op. 99-02 at 6.
¶ 29 A non-refundable flat fee reflects "a negotiated element of risk sharing between attorney and client" whereby the "attorney takes the risk that she will do more work than planned, without additional compensation; and the client, in return, agrees that the attorney will earn the agreed-upon amount, even if that amount would exceed the attorney's usual hourly rate" because "the client often has limited resources and therefore requires the certainty of a pre-set fee." Id. at 7. Because a non-refundable flat fee reflects a balancing of the risk to both client and lawyer, a flat fee can be larger than the fee generated by hourly rates without being excessive. Swartz, 141 Ariz. at 272-73, 686 P.2d at 1242-43; see also GEOFFREY C. HAZARD, THE LAW OF LAWYERING, Vol. I, § 8.15 at 8-34 (2001) (non-refundable flat fees benefit lawyers "who are confident of their ability to judge the cost of providing specific legal services" and clients who "appreciate... definite costs for legal services... [that] are ... capped").
B.
¶ 30 When parties have agreed to binding fee arbitration, an arbitrator should determine the reasonableness of a fee by looking to the factors set forth in ER 1.5. If the parties adopted a non-refundable flat fee, the arbitrator should consider the circumstances under which the attorney and client agreed to the fee, whether the attorney and client negotiated for and recognized the risks involved with this type of fee, whether the legal services covered by the fee constituted a self-contained task, and the specificity with which the attorney described the legal services to be performed in the fee agreement.
¶ 31 Although the Hearing Officer in this case considered the eight factors listed under ER 1.5 and noted that Connelly charged a non-refundable fixed fee,[8] she did not discuss the appropriateness of the non-refundable flat fee in light of the negotiated risk involved and the type of legal services provided. That failure constituted error.
IV.
¶ 32 The question remaining for resolution involves the appropriate remedy. Because *763 the Hearing Officer did not fully consider the impact of the flat fee agreement, we must remand for an additional hearing, either to the fee arbitration program or to the Hearing Officer. For the reasons discussed above, we have concluded that the State Bar should not allow lawyers and clients who have contractually agreed to submit fee disputes to arbitration to avoid that agreement. We therefore vacate the report of the Hearing Officer and the decision of the Disciplinary Commission and remand this matter for arbitration pursuant to the State Bar's Rules of Arbitration of Fee Disputes.
CONCURRING: CHARLES E. JONES, Chief Justice, STANLEY G. FELDMAN and REBECCA WHITE BERCH, Justices.
NOTES
[1] The TASC Drug Diversion Program is "a special supervision program in which the county attorney of a participating county may divert or defer, before a guilty plea or a trial, the prosecution of a person accused of committing a crime." Ariz.Rev.Stat. § 11-361 (2001).
[2] "A discipline proceeding commences upon receipt by the state bar of a charge against a respondent." Ariz. R. Sup.Ct. 53(a).
[3] "Formal discipline proceedings shall be instituted by the state bar filing a complaint ... with the disciplinary clerk." Ariz. R. Sup.Ct. 53(c)1.
[4] Connelly's accounting included an estimate of hours spent working on "[o]ther conferences/meetings/telephone calls with or from Richman between December 1998 and November 1999." Hearing Officer's Report and Recommendation at 6. Connelly explained the lack of specificity by stating he took very few notes regarding meetings and discussions with Richman because Richman would call or come by to see Connelly when Connelly was working on another matter. Id.
[5] The Hearing Officer asked Connelly why the case did not go to fee arbitration. Connelly replied that either the State Bar or Richman, he did not know which, declined arbitration when he suggested it early in the disciplinary proceedings. Tr. of Disciplinary Hearing ryan06@example.org.
[6] The State Bar points out that it cannot force both parties to participate in arbitration. By initiating formal disciplinary proceedings, however, the State Bar, and not the parties or a court, determined not to enforce the parties' agreement to arbitrate.
[7] A non-refundable fee differs from a non-refundable retainer or an advance payment. Unlike a non-refundable fee, a non-refundable retainer "is a fee paid, apart from any other compensation, to ensure that a lawyer will be available for the client if required" and "an advance payment [is one] from which fees will be subtracted." Restatement § 34 cmt. e (1998). A non-refundable fee, on the other hand, is a "a lump-sum fee constituting the entire payment for a lawyer's services in a matter." Id.
[8] The Hearing Officer made the following findings based on the factors in ER 1.5:
(1) In this case, [Connelly] demonstrated that the amount of time and labor initially appeared to be great and that Richman's case could be complicated by additional charges against the client. Clearly a highly skilled criminal defense attorney was needed to perform the service properly;
(2) There was no evidence presented that acceptance of Richman's case precluded [Connelly] from accepting other employment;
(3) Witness Kimerer indicated that the fee customarily charged in the locality for similar legal services was in the range of $1,500-$15,000... but that a fee of $20,000-$25,000 once the case was completed was not unreasonable;
(4) The amount involved was large, however, the results obtained in the case were "extraordinary," according to Witness Black;
(5) The client was a difficult and needy client, and the case required swift movement in order to obtain the result achieved, therefore there were some time limitations imposed by the client and the circumstances;
(6) There had been a previous relationship with the client;
(7) Respondent clearly had the requisite skills, experience, and reputation to handle such a case;
(8) The fee was fixed and non-refundable. Hr'g Officer 9Y's Report and Recommendation at 9.
|
22 F.2d 277 (1927)
WESTINGHOUSE ELECTRIC & MFG. CO.
v.
JEFFREY-DE WITT INSULATOR CO.
No. 19.
Circuit Court of Appeals, Second Circuit.
November 1, 1927.
*278 Victor S. Beam and John C. Kerr, both of New York City, for appellant.
William S. Hodges, of Washington, D. C., and Oscar S. Blinn, of New York City, for appellee.
Before MANTON, SWAN and AUGUSTUS N. HAND, Circuit Judges.
MANTON, Circuit Judge.
This suit is for infringement of patent No. 1,373,576, for an electric insulator. The original application was filed May 16, 1913, the application upon which this patent was granted was filed December 17, 1917, and the patent was granted April 5, 1921. The invention relates to insulators for high-tension electric lines, such as power transmission lines, but particularly of the suspension type. There are six claims sued on, claim 1 being typical and providing (a) a dielectric body having two end portions and a middle portion intermediate between the ends which take the tension load; (b) metallic rods arranged in a circle to take up the stress of the external attachment and engaging the ends of the insulator body; (c) means for distributing the external mechanical load, which means consist of the plates to which said rods are attached. Claim 2 differs from claim 1 in stating that the groups of rods are symmetrically arranged, instead of symmetrically arranged around a circle. Claim 3 differs in a functional statement that no particular portion of the brittle material will receive more than its share of the total tension stress. Claim 4 omits the reference to the uniform distribution of the mechanical tension stress, but includes the fact that the two sets of prongs are of different polarity. Claim 5 contains a specific limitation, not found in the first four claims, that the rods are confined to the end portions of the brittle material. Claim 6 contains another functional statement, describing an insulator constructed of dielectric material with metal prongs imbedded in the ends.
In addition to the defense of invalidity of the patent and noninfringement by the appellee, a defense of equitable estoppel was interposed, arising from laches on the part of both the appellant and the inventor. On May 16, 1913, an application for a patent was filed by the inventor, Thomas, which eventuated in the patent, No. 1,250,387. None of the claims disclosed by that application covered the subject-matter of the present patent, which was granted after a division. It resulted in the patent in suit. The subject-matter of the patent was illustrated and described in the earlier patent, but it was not claimed in any form. On August 7, 1913, the Patent Office required Thomas to elect which of the several inventions claimed in his original case he wished to retain therein, and directed that the claims of all the other forms be canceled. By amendment of July 25, 1914, he complied with these requirements, which are now embodied in patent No. 1,250,387. He retained the illustration and description of the structure for the patent in suit. From July 29, 1914, until December 17, 1917, no attempt was made to assert his right to the claim based upon the subject-matter now found in the patent in suit. It was one day prior to the issue of the parent patent that he filed a divisional application, which resulted in the issue of patent No. 1,373,576. Therefore for three years there was no attempt to claim the invention in suit, or to protect it in any way.
No advices were given to the appellee of his expectation to obtain or seek the patent protection of this subject-matter, and it appears that the appellee's insulator has been on the market, advertised and for sale, since the summer of 1915. In the fall of 1915, the appellee's predecessor, from whom it obtained title, entered into a contract for the manufacture of the insulators developed by it and now alleged to be an infringement. It is clear that in the summer of 1915 appellee's insulator was perfected and offered for sale. Advertisement matter relating to this insulator was widely circulated, and transmission engineers were said to be interested in purchasing the product. The evidence conclusively shows that from December, 1915, the earliest device alleged to be an infringement was on the market as a commercial and practical product, and that its manufacture continued without substantial change as to design and structure, and sales were made, increasing in number as time passed. These sales took place more than two years prior to December 17, 1917, when the divisional application was made. While the patent did not issue until April 25, 1921, and the appellant did not gain title until September 14, 1921, the fact remains the purchaser is not relieved from any laches chargeable to the vendor. Tompkins v. St. Regis Paper Co. (C. C. A.) 236 F. 221. It also appears that the appellant took no action until September 20, 1922, when it mailed a letter claiming *279 that its patent was being infringed. There would seem to have been, therefore, not only delay between the date of the patent and the filing of the suit, but also a delay between July 29, 1914, and the date of the divisional application, which was unreasonable, in and during which time the appellee had entered the field and developed its industry. Woodbridge v. U. S., 263 U.S. 50, 44 S. Ct. 45, 68 L. Ed. 159.
Moreover, there is a statutory bar (section 4886, Rev. Stat. [35 USCA § 31; Comp. St. § 9430]) which prevents the appellant from succeeding, for there was a sale of the invention more than two years prior to the filing of the application upon which the patent was granted. This invalidates the patent. The patent being a division of an earlier parent patent, the courts have held that in the absence of laches, or estoppel of intervening rights, the rights under a divisional patent relate back to the date of the filing of the original application, and are in no way affected by an intervening bar; this, upon the theory that there could be no estoppel short of actual proof of abandonment. But recent cases in the Supreme Court have modified that rule. Chapman v. Wintroath, 252 U.S. 126, 40 S. Ct. 234, 64 L. Ed. 491, and Webster Electric Co. v. Splitdorf Co., 264 U.S. 463, 44 S. Ct. 342, 68 L. Ed. 792.
In the Chapman Case, the court asserted that a divisional application would have to stand on its own merits, so far as an independent patent of more than two years was concerned. And the effect of this decision is that an intervening statutory bar, more than two years prior to the filing of a divisional application, is fatal to the validity of the patent granted upon such an application. We later said, in American Laundry Machinery Co. v. Prosperity Co. (C. C. A. 2) 295 F. 819, that it was not intended by the decision in the Chapman Case to upset without comment such practice relative to divisional application. The Supreme Court, however, in Webster v. Splitdorf, supra, which did not involve a divisional application, but in which claims had been introduced in a pending application for the purpose of interference more than two years after the patent had issued, which had originally contained the claims, said that, in cases involving laches, equitable estoppels, or intervening private or public rights, the two-year time limit prima facie applied to divisional applications, and can only be avoided by the proof of circumstances justifying the longer delay. The effect of these decisions is that, if there is an intervening patent issued more than two years prior to the filing of a divisional application, the burden is imposed upon the divisional applicant or patentee to prove circumstances justifying the delay. This rule is applicable to any statutory bar, such as a public use or sale.
Here, on December 2, 1915, more than two years prior to December 17, 1917, the date of filing the divisional application, the insulators of the appellee were actually marketed and sales effected. There was no proof of special circumstances justifying this long delay. If the defendant's insulator is an infringement, then the sale referred to constitutes a bar to the patent; and, if it is not, it cannot be considered as an infringement. That such a sale was made is proved beyond doubt, both by the books of entries made relating to the shipment of the goods and the payment of invoice, and also by the persons who took the orders and executed them. Indeed, there is evidence of other sales, all prior to the two-year period. It was no answer to say that the specific sale referred to 12 insulators, which were bought for experimental purposes and were never used commercially. There is nothing in the statute which in any way limits the character of the sale, nor the purpose for which the goods were purchased in the open market. If it is a bona fide commercial sale, it is sufficient. And the proof of a single sale is sufficient. Covert v. Covert (C. C.) 106 F. 183; Dittgen v. Racine Paper Goods Co. (C. C.) 181 F. 394. An examination of the cases referred to by the appellant (Crown Cork & Seal Co. v. Aluminum Stopper Co. [C. C. A.] 108 F. 845; Weber v. Automobile Co. [C. C.] 190 F. 189; Ashley v. Tatum [D. C.] 240 F. 979; Krauth v. Autographic Co. [D. C.] 285 F. 199) discloses that there was no two-year bar of any kind established, and held merely that there was an absence of laches, estoppel, or intervening rights which render the reissue invalid.
Since it has been clearly established that the sale was made two years prior to the filing of the divisional application, and no excuse given for such delay, the patent must be held to be invalid by reason of section 4886 of the Revised Statutes. We therefore need not consider the defense of noninfringement.
Decree affirmed.
|
Name: Commission Regulation (EEC) No 1649/84 of 12 June 1984 abolishing the countervailing charge on tomatoes originating in Morocco
Type: Regulation
Subject Matter: character(0)
Date Published: nan
No L 156/ 18 Official Journal of the European Communities 13 . 6 . 84 COMMISSION REGULATION (EEC) No 1649/84 of 12 June 1984 abolishing the countervailing charge on tomatoes originating in Morocco whereas the conditions specified in Article 26 ( 1 ) of Regulation (EEC) No 1035/72 are therefore fulfilled and the countervailing charge on imports of tomatoes originating in Morocco can be abolished, HAS ADOPTED THIS REGULATION : THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 1035/72 of 18 May 1972 on the common organization of the market in fruit and vegetables ('), as last amended by Regulation (EEC) No 985/84 (2), and in particular the second subparagraph of Article 27 (2) thereof, Whereas Commission Regulation (EEC) No 1396/84 of 18 May 1984 (3), as last amended by Regulation (EEC) No 1 533/84 (4), introduced a countervailing charge on tomatoes originating in Morocco ; Whereas for this product originating in Morocco there were no prices for six consecutive working days ; Article 1 Regulation (EEC) No 1396/84 is hereby repealed. Article 2 This Regulation shall enter into force on 13 June 1984. This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels , 12 June 1984. For the Commission Poul DALSAGER Member of the Commission (') OJ No L 118 , 20 . 5 . 1972, p. 1 . (2) OJ No L 103, 16 . 4 . 1984, p. 1 . (3) OJ No L 133, 19 . 5 . 1984, p. 37 . 4) OJ No L 145, 31 . 5 . 1984, p. 87. |
Case: 15-14324 Date Filed: 03/23/2017 Page: 1 of 16
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-14324
________________________
D.C. Docket No. 1:14-cv-22479-MGC
RAMON GONZALEZ,
Plaintiff-Appellant,
versus
STATE OF FLORIDA DEPARTMENT OF MANAGEMENT SERVICES,
MANUEL R. MORALES, JR.,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(March 23, 2017)
Before ED CARNES, Chief Judge, FAY and PARKER, * Circuit Judges.
PER CURIAM:
*
Honorable Barrington D. Parker, Jr., United States Circuit Judge for the Second Circuit,
sitting by designation.
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In November 2010 Ramon Gonzalez, who is Cuban, began working as
maintenance supervisor for Florida’s Department of Management Services in its
Division of Real Estate Development and Maintenance.1 Facilities Manager
Norberto Fernandez (“N. Fernandez”) hired him. The two of them together were
responsible for developing work plans for the mechanical staff, reviewing
maintenance work performed at three buildings, and contracting with outside
vendors for work order supplies and services. And in his position as maintenance
supervisor, Gonzalez was also responsible for managing seven employees who
worked as maintenance mechanics and support technicians in the three buildings,
prioritizing work orders, and conducting daily inspections of operations systems.
Viewing the evidence in the light most favorable to Gonzalez, nine months
after N. Fernandez hired Gonzalez, Deputy Bureau Chief of Regional Facilities
Daniel Eberhart told N. Fernandez that he would not have hired Gonzalez because
he “spoke with a heavy Cuban accent” and he “spoke too loud.” According to N.
Fernandez’s declaration,“there were several occasions where Mr. Eberhart made
comments about Ramon Gonzalez’s accent in a way that made it clear that he
wanted to get rid of him.” Neither N. Fernandez’s declaration nor any other part of
the record provides any information about when those comments were made or
1
“At summary judgment we view the facts in the light most favorable to the nonmoving
party,” taking those facts from the “evidentiary materials on file.” Crawford v. Carroll, 529 F.3d
961, 964 n.1 (11th Cir. 2008).
2
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specifically what was said by Eberhart that “made it clear” he wanted to “get rid
of” Gonzalez.
In January 2013 Eberhart issued a memo to N. Fernandez expressing
concerns about his work performance and directing him to take immediate action
to correct the problems. The memo listed three areas in need of improvement —
communication, personnel management, and maintenance management — and
provided details of the specific problems within each category. After deciding that
N. Fernandez had not sufficiently improved by April of that year, Tom Berger,
Director of the Division of Real Estate and Maintenance, recommended that
human resources fire him based on his poor supervisory performance, hostile
demeanor, and insubordination. N. Fernandez was fired soon thereafter and, so far
as the record shows, he never filed any action contesting his firing.
After N. Fernandez was fired, Eberhart assigned joint responsibility of the
three buildings to Gonzalez and Lissette Fernandez (“L. Fernandez”), with
Gonzalez supervising all of the maintenance tasks. Eberhart directed them to send
all work requests to him for final approval because he wanted control over the
maintenance work for budgetary reasons. In violation of that directive, Gonzalez
authorized the repair of a fence before Eberhart had given that repair work final
approval, which caused the work to be performed without the Department having
in place any way to pay for those repairs. Gonzalez also authorized payment for
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the repair of a light pole that should not have been paid for because the work was
unacceptable.
Senior mechanic Joel Kyllonen and facilities manager Ralph Reynolds
emailed Eberhart in late April 2013 after visiting Gonzalez at one of the buildings
he was managing. Both Kyllonen and Reynolds described Gonzalez as having
been angry, argumentative, and loud while they were with him. Reynolds reported
that he had told Gonzalez that “his attitude was not a positive representative [sic]
of [the Department] and shouldn’t occur again.” Around that time, Eberhart had a
conference call with his supervisor, a human resources representative, and
Eberhart’s assistant, whose handwritten notes show that the discussion topics
included Gonzalez’s “poor attitude” and difficulties communicating with others,
and also state that “[s]ince [N. Fernandez]’s exit we have discovered more details
about [Gonzalez]’s performance.” They discovered “deficiencies” in Gonzalez’s
performance that N. Fernandez “did not address” while he was Gonzalez’s
supervisor. During that conference call, Eberhart also mentioned receiving
complaints from employees who directly reported to Gonzalez. According to
Eberhart, those employees said that Gonzalez berated and belittled them in front of
building tenants, vendors, and members of the public. Those were not the only
complaints about Gonzalez. L. Fernandez testified that she had received
complaints from employees, tenants, and vendors about his loud, aggressive, and
4
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intimidating manner of communication, and that he had a bad attitude and
complained about having to make necessary repairs. Evidence showed that
Eberhart knew about at least one of the tenant’s complaints.
Gonzalez himself testified that he is a “strong, hard-voiced talking person”
and knows that he talks “loud.” He also conceded that he tends to talk louder and
faster when he is upset and that those around him could misinterpret him as
yelling.
In a May 30, 2013 memo to the director of human resources, Division
Director Berger recommended that Gonzalez be terminated. Berger’s memo stated
that Eberhart had visited one of the three buildings and had determined that
Gonzalez lacked organization in carrying out his supervisory duties. The memo
explained that there was no routine maintenance program and that employees had
complained that Gonzalez yelled at them, berated them, and called them names. It
also mentioned Gonzalez’s failure to follow proper purchasing and payment
protocols, and it concluded by recommending that he be terminated “for poor
performance, insubordination/failure to follow instructions and conduct
unbecoming.” The information upon which Berger relied to write that memo came
from human resources, which had in turn received the information from Eberhart.
After receiving Berger’s memo, the director of human resources decided that
dismissal was warranted, and in a letter dated June 4, 2013, he notified Gonzalez
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that “[w]e have determined that it is in the best interest of the Department that your
employment be terminated . . . .” The letter offered no further explanation for the
termination. Because he was in a supervisory position, Gonzalez was a “select
exempt service employee,” which is an “at will” employee who can be terminated
at any time without cause. For those select exempt service employees, the
Department “may use disciplinary actions at [its] discretion.”
I.
After obtaining a right-to-sue letter from the EEOC, Gonzalez filed a lawsuit
in Florida state court alleging national origin discrimination in violation of the
Florida Civil Rights Act of 1992, Fla. Stat. § 760.10, and Title VII of the Federal
Civil Rights Act, 42 U.S.C. § 2000e-2. The Department removed the case to
federal district court and, after discovery, filed a motion for summary judgment.
Gonzalez filed a response in opposition to that motion, attaching as support N.
Fernandez’s declaration as well as his own. The Department then filed a motion to
strike N. Fernandez’s declaration because it violated Federal Rule of Civil
Procedure 26 and to strike one paragraph of Gonzalez’s declaration as inadmissible
hearsay. The district court, in its summary judgment order, granted both parts of
the Department’s motion to strike and its motion for summary judgment. This is
Gonzalez’s appeal.
6
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II.
Gonzalez contends that the district court abused its discretion by granting the
Department’s motion to strike. We need not resolve that question because, as we
will explain, even considering both declarations in their entirety, Gonzalez has
offered no direct evidence of discrimination and has failed to offer evidence raising
a genuine issue of fact as to pretext.
III.
In relevant part, Title VII makes it unlawful to fire or take any other adverse
employment action against an employee based on that employee’s national origin.
See 42 U.S.C. § 2000e–2(a)(1).2 A plaintiff bringing a Title VII claim can prove
intentional discrimination through direct or circumstantial evidence. See Alvarez
v. Royal Atl. Developers, Inc., 610 F.3d 1253, 1264 (11th Cir. 2010). Gonzalez
contends that he should not suffer summary judgment because he has presented
direct evidence of discrimination and, alternatively, he has presented circumstantial
evidence sufficient to both make out a prima facie case and show pretext under the
framework established in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93
S. Ct. 1817 (1973), and Texas Department of Community Affairs v. Burdine, 450
U.S. 248, 101 S. Ct. 1089 (1981).
2
Doing so is also unlawful under the Florida Civil Rights Act. Fla. Stat. § 760.10(1)(a).
Florida courts have held, and the parties do not dispute, that “decisions construing Title VII are
applicable when considering claims under the Florida Civil Rights Act, because the Florida act
was patterned after Title VII.” Harper v. Blockbuster Entm’t Corp., 139 F.3d 1385, 1387 (11th
Cir. 1998). As a result, analysis of the state claim is subsumed in analysis of the federal claim.
7
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Gonzalez contends that Eberhart’s comments about his accent and loud
manner of talking are direct evidence of discrimination. Because Eberhart did not
make the final decision to fire Gonzalez, the first step is usually to determine
whether Eberhart’s statements about Gonzalez’s accent and loud volume can be
imputed to Berger under a “cat’s paw” theory of liability. See Stimpson v. City of
Tuscaloosa, 186 F.3d 1328, 1332 (11th Cir. 1999) (“This [cat’s paw] theory
provides that causation may be established if the plaintiff shows that the
decisionmaker followed the biased recommendation [of a non-decisionmaker]
without independently investigating the complaint against the employee. In such a
case, the recommender is using the decisionmaker as a mere conduit, or ‘cat’s paw’
to give effect to the recommender’s discriminatory animus.”). Because it does not
matter to the result, however, we will simply assume for purposes of this appeal
that Eberhart’s comments about Gonzalez’s accent and loud voice can be imputed
to Berger under the “cat’s paw” theory of liability.
We also conclude that Eberhart’s comments about Gonzalez’s accent and
loud manner of speaking are not direct evidence of national origin discrimination.
“Direct evidence is evidence which, if believed, proves the existence of a fact
without inference or presumption.” Scott v. Suncoast Beverage Sales, Ltd., 295
F.3d 1223, 1227 (11th Cir. 2002). “[O]nly the most blatant remarks, whose intent
could mean nothing other than to discriminate on the basis of some impermissible
8
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factor constitute direct evidence of discrimination. If the alleged statement
suggests, but does not prove, a discriminatory motive, then it is circumstantial
evidence.” Wilson v. B/E Aerospace, Inc., 376 F.3d 1079, 1086 (11th Cir. 2004)
(citations and quotation marks omitted).
As support for his contention that Eberhart’s comments about his accent and
loud voice are direct evidence of discriminatory motive, Gonzalez cites Akouri v.
State of Florida Department of Transportation, 408 F.3d 1338 (11th Cir. 2005).
In the Akouri decision, the plaintiff, who was born in Lebanon, testified that he had
been denied a promotion and that when he asked “shortly after” that denial why
another employee had been chosen instead, he was told: “[T]he people working in
the crew are not the same that are working in the office. There [are] no black or
Hispanic [employees] in the back. . . . [T]hey are all white and they are not going
to take orders from you, especially if you have an accent, and something like that.”
Id. at 1341, 1347–48 (quotation marks omitted) (third alteration in original). We
concluded in the Akouri decision that the explanation for why the plaintiff had
been denied the promotion was direct evidence because “[t]here is no mere
suggestion or need for inferences because the statement relates directly to the
[employer]’s decision to promote [someone else] over Akouri . . . and blatantly
states that the reason he was passed over for the promotion was his ethnicity.” Id.
at 1348.
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Unlike the direct evidence in the Akouri case, Eberhart’s statements were
not directly related to Gonzalez’s termination (or Eberhart’s decision to report to
Berger about the problems with Gonzalez’s job performance). The only evidence
of when Eberhart commented about Gonzalez’s accent and loud voice is the
statement Eberhart made to N. Fernandez two years before Gonzalez’s termination.
See Scott, 295 F.3d at 1227–28 (noting that the comment “[w]e’ll burn his black
ass” was not direct evidence of discrimination because “it was made approximately
two and one-half years before the [plaintiff was terminated] and because it was not
directly related to the subject of [the plaintiff]’s termination”). As a result,
Eberhart’s comments are not direct evidence of discrimination.
IV.
Lacking any direct evidence of discrimination, Gonzalez could still have
escaped summary judgment by offering sufficient circumstantial evidence to meet
the burden-shifting framework under the McDonnell Douglas and Burdine
decisions. Under that framework the plaintiff bears the initial burden of showing a
prima facie case of discrimination. McDonnell Douglas Corp., 411 U.S. at 802, 93
S. Ct. at 1824. If the plaintiff makes that showing, the burden shifts “to the
employer to articulate some legitimate, nondiscriminatory reason for the [adverse
employment action].” Id. “[S]hould the defendant carry this burden, the plaintiff
must then have an opportunity to prove by a preponderance of the evidence that the
10
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legitimate reasons offered by the defendant were not its true reasons, but were a
pretext for discrimination.” Burdine, 450 U.S. at 253, 101 S. Ct. at 1093.
While the parties dispute whether Gonzalez has made out a prima facie case
of discrimination, we need not decide that issue because, as we will discuss,
Gonzalez has failed to raise a genuine issue of material fact as to whether the
Department’s proffered reasons for firing him were a pretext for discrimination.
See Alvarez, 610 F.3d at 1265 (“It matters not whether Alvarez has made out a
prima facie case if she cannot create a genuine issue of material fact as to whether
[the defendant]’s proffered reasons for firing her are pretext masking
discrimination.”).
The Department provided several legitimate nondiscriminatory reasons for
firing Gonzalez, all of which are summarized in Berger’s memo recommending
that he be terminated: He did not carry out his maintenance supervisory duties in
an organized way; there was no routine preventative maintenance program;
employees, including Kyllonen and Reynolds, had complained that Gonzalez had
yelled at them, berated them, or called them names; at least one tenant had
complained to Eberhart that Gonzalez had yelled at her and made her
uncomfortable; and Gonzalez had failed to follow proper purchasing and payment
protocols.
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Because the Department articulated several legitimate nondiscriminatory
reasons for terminating Gonzalez, he had the burden of putting forward evidence
raising a genuine issue of material fact as to whether those reasons were pretextual.
See Alvarez, 610 lisastone@example.net. Gonzalez could have done so “either by offering
evidence that [the Department] more likely than not acted with a discriminatory
motive, or by showing that its proffered reasons are not credible.” Id. Because the
Department provided multiple reasons for terminating Gonzalez, he had to
“produce sufficient evidence for a reasonable factfinder to conclude that each of
[those] proffered nondiscriminatory reasons is pretextual.” Chapman v. AI
Transp., 229 F.3d 1012, 1037 (11th Cir. 2000) (en banc) (emphasis added).
Gonzalez contends that he presented enough circumstantial evidence to
create a genuine issue of material fact that each proffered reason was pretextual.
But he didn’t. Gonzalez submitted a declaration asserting that his performance
was satisfactory, that he had never been counseled or disciplined, and that “[i]f
there were any truth to these matters [raised by the Department as supporting his
termination], they would have been brought to my attention through the
progressive discipline [policy].” And N. Fernandez, who had himself been fired
for other reasons, submitted a declaration stating that he had been satisfied with
Gonzalez’s performance and that in his opinion the Department should have
addressed the alleged problems about Gonzalez’s performance through “coaching
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for improvement,” and not termination. However, as we have “repeatedly and
emphatically held”:
employers may terminate an employee for a good or bad reason
without violating federal law. Title VII does not allow federal courts
to second-guess nondiscriminatory business judgments, nor does it
replace employers’ notions about fair dealing in the workplace with
that of judges. We are not a super-personnel department assessing the
prudence of routine employment decisions, no matter how medieval,
high-handed, or mistaken. Put frankly, employers are free to fire their
employees for a good reason, a bad reason, a reason based on
erroneous facts, or for no reason at all, as long as its action is not for a
discriminatory reason.
Flowers v. Troup Cty., Ga., Sch. Dist., 803 F.3d 1327, 1338 (11th Cir. 2015)
(quotation marks and citations omitted).
While Gonzalez’s declaration asserts that his performance was satisfactory,
he has offered no evidence disputing the fact that: (1) employees and at least one
tenant had complained to Eberhart about Gonzalez’s communication problems;
(2) tenants and vendors had complained to L. Fernandez about his belligerent
treatment of them; (3) he did not wait for a purchase order for a fence repair before
having that work done, which caused the work to be completed before the
Department had in place a method of payment; and (4) Gonzalez had authorized
payment for the repair of a light pole that should not have been paid for because
the work was unacceptable. 3 In his deposition Gonzalez conceded that when he
3
While his declaration states that the initial repair of the light pole was approved by
Eberhart, Gonzalez does not dispute that the repair should not have been paid for because the
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gets upset he speaks more rapidly and at a louder volume, and that his doing so
could be interpreted by others as yelling. There was no evidence at all disputing
the fact that he had yelled at employees and tenants of the Department.
The statement in N. Fernandez’s declaration that he was satisfied with
Gonzalez’s performance does not establish pretext. N. Fernandez himself was
fired because of his poor supervisory performance along with his hostile and
insubordinate demeanor. “Different supervisors may impose different standards of
behavior, and a new supervisor may decide to enforce policies that a previous
supervisor did not consider important.” Rojas v. Florida, 285 F.3d 1339, 1343
(11th Cir. 2002). Evidence that a supervisor — who was himself fired because of
his hostile demeanor and poor performance — did not find an employee’s
demeanor and performance unsatisfactory, is not sufficient to create a genuine
issue of material fact about whether non-terminated supervisors did. And there is
also evidence showing that even more problems with Gonzalez’s performance
were discovered after N. Fernandez had been fired.
Gonzalez argues that the fact the Department gave him no formal warning or
counseling is evidence of pretext. The Department’s disciplinary policy does not
mandate counseling or formal warning before termination but instead states that
work was unacceptable, and instead asserts only that “[t]he repair work on the light pole did not
need to be redone to my knowledge” and speculates that “[i]f there were any truth to the claim
that I did something wrong, it would have been brought to my attention through the progressive
discipline [policy].” (Emphasis added).
14
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the Department “may use disciplinary actions at their discretion concerning Select
Exempt Service . . . employees,” and that “[c]ounseling may be used to help
employees recognize a mistake or deficiency. . . .” (Emphasis added). Because
counseling and formal warnings were discretionary options, the Department’s
failure to provide them does not raise a genuine issue of fact as to whether its
stated reasons for terminating Gonzalez were pretextual. See Alvarez, 610 F.3d at
1262 n.7, 1268 (concluding that the plaintiff had failed to raise a genuine issue of
material fact even though the employer had admitted that it had not followed its
progressive discipline policy, which normally provided for successive verbal and
written warnings before an employee was terminated for misconduct); see also
Morris v. City of Chillicothe, 512 F.3d 1013, 1020 (8th Cir. 2008) (“Deviance
from a progressive discipline policy can be evidence of pretext, but here, the
department’s employee manual and related documents specifically state that the
department is not bound by any number of warnings and that it can fire at-will
employees without warning if necessary. We have found such caveats in an
employee policy negate its persuasiveness in showing pretext.”).
Gonzalez has failed to raise a genuine issue as to pretext. While he offered
evidence showing that Eberhart made some remarks about his accent and loud
manner of speaking at some point during his employment, including one comment
that was made almost two years before his termination, that evidence standing
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alone does not establish pretext. See Scott, 295 F.3d at 1229 (“Although a
comment unrelated to a termination decision may contribute to a circumstantial
case for pretext, it will usually not be sufficient absent some additional evidence
supporting a finding of pretext.”) (citation omitted). The district court did not err
in granting summary judgment to the Department.
AFFIRMED.
16
|
664 S.W.2d 805 (1984)
Jose S. CORTEZ and Wife Idolina G. Cortez, Appellants,
v.
BROWNSVILLE NATIONAL BANK and Paul Y. Cunningham, Appellees.
No. 13-83-201-CV.
Court of Appeals of Texas, Corpus Christi.
January 19, 1984.
*806 Leo Villarreal, Kingsville, for appellants.
A.C. Nelson, Brownsville, for appellees.
Before BISSETT, YOUNG and KENNEDY, JJ.
OPINION
BISSETT, Justice.
This is a summary judgment case. On September 29, 1982, Jose S. Cortez and wife, Idolina G. Cortez, filed suit against Brownsville National Bank and Paul Y. Cunningham, Trustee, to set aside a Trustee's Deed, dated September 7, 1982, wherein certain real property was conveyed to Brownsville National Bank by Paul Y. Cunningham, Trustee. Summary judgment that the plaintiffs take nothing by their suit was rendered on March 29, 1983. The plaintiffs have duly and timely projected an appeal from that judgment.
Plaintiffs alleged: 1) that they are the owners of a certain described tract of land in Brownsville, Cameron County, Texas, which constitutes their homestead, and is subject to a first lien owned by Guillermo C. Mendez and wife, Inocencia Velia G. Mendez; 2) that on September 15, 1978, they signed a note in the amount of $2,700.00, payable to the order of Reynaldo Ramirez, which was secured by a mechanic's lien; 3) that the note and the mechanic's lien was assigned by Ramirez to Brownsville National Bank on September 19, 1978; 4) that on April 26, 1979, plaintiffs paid the note "with an extension of real estate note and lien"; 5) that plaintiffs "paid the aforementioned April 26, 1979 extension of real estate note and lien" on December 2, 1981; Sale; 6) that accompanying said notice was a letter from the Trustee which informed plaintiffs that the *807 debt to Brownsville National Bank had been declared in default and that they could avoid a foreclosure by paying the Bank or the Trustee "by certified funds," the sum of $633.32 and attorney's fees in the amount of $150.00; 7) that plaintiffs paid the Brownsville Bank, by check dated September 7, 1982, the sum of $661.07, "which was the balance owed on the extension of real estate note and lien dated December 2, 1981"; 8) that the Bank "accepted such payment"; and 9) that on September 7, 1982, the Trustee "conducted the Trustee's Sale and conveyed plaintiffs' homestead to the Brownsville National Bank."
Plaintiffs, in their petition, conclude that the sale (and deed) should be set aside because the defendants 1) failed to "present plaintiffs with the note and demand payment of past due installments prior to exercising the right to accelerate"; 2) failed "to inform plaintiffs that failure to cure the default would result in acceleration of the note and foreclosure under the power of sale in the Mechanic's Lien Contract"; 3) failed to give them notice of the Bank's "intent to exercise its option to accelerate the note"; 4) the Bank, through its Trustee, foreclosed on a debt "in the mechanic's lien contract," when "said note had already been paid by plaintiffs' extension of real estate note and lien dated April 26, 1979," which extension was paid by "plaintiffs' extension of real estate note and lien dated December 2, 1981"; and 5) the Bank was paid "the balance on plaintiffs' extension of real estate note and lien dated December 2, 1981."
The defendants, in addition to filing a general denial and special denials, also pled: 1) "By its own terms the extension of the real estate note and lien signed on April 26, 1979, renewed the original note"; 2) "By its own terms the extension of the real estate note and lien dated December 2, 1981, acknowledged the original note dated September 15, 1978, referred to in the original builder's and mechanic's lien contract of the same day did renew said note"; 3) the check from plaintiffs, although received by the Bank, "was not in certified funds," and the Bank, after inquiring of the National Bank of Commerce, "wherein the check was drawn," was informed that "there were insufficient funds to cover said check"; 4) the original note, dated September 15, 1978, "specifically waived notice, presentment for demand, demand for payment and acceleration of maturity"; 5) "as a matter of law, taking all documents together, it is clear the original promissory note of September 15, 1978 was extended and renewed"; and 6) the Bank did not accept the $661.07 check as payment.
The defendants' motion for summary judgment was filed on January 28, 1983. They alleged that they were entitled to summary judgment as a matter of law, and that there were no disputed issues of material fact. The grounds for summary judgment as set forth in the motion are substantially the same as the defenses raised by defendants in their first amended original answer. Apparently, plaintiffs filed a response to defendants' motion. However, response, if any, is not in the record before us.
Plaintiffs, appellants in this Court, present a single point of error. It reads:
"THE COURT ERRED IN GRANTING SUMMARY JUDGMENT IN FAVOR OF APPELLEES BECAUSE THE TRUSTEE'S NOTICE OF SALE AND FORECLOSURE IS EXCLUSIVELY BASED ON THE NOTE IN THE MECHANIC LIEN CONTRACT WHICH DOES NOT PROVIDE FOR WAIVER OF NOTICE, PRESENTMENT FOR PAYMENT, DEMAND FOR PAYMENT AND ACCELERATION OF MATURITY AND PROTEST, AND THE TRUSTEE FAILED TO GIVE APPELLANTS NOTICE OF INTENT TO ACCELERATE AND PROPER NOTICE THAT THE DEBT HAD BEEN ACCELERATED AS REQUIRED BY CLAUDE W. OGDEN V. GIBRALTAR SAVINGS ASSOCIATION, 640 S.W.2d 232."
Defendants, appellees in this Court, in addition to contending that plaintiffs' point *808 of error has no merit, present a counterpoint. It reads:
"THE PLAINTIFFS HAD WAIVED NOTICE, PRESENTMENT FOR PAYMENT, DEMAND FOR PAYMENT AND ACCELERATION OF MATURITY AND PROTEST AND AGREED THAT THE NOTE COULD BE RENEWED OR AT THE TIME OF PAYMENT, EXTENDED."
The evidence presented by the defendants at the hearing on their motion for summary judgment consisted of an affidavit and certain exhibits. Such summary judgment evidence reveals that there is no dispute as to material facts. We summarize the evidence.
On September 15, 1978, the plaintiffs signed a note in the original principal sum of $2,700.00, payable to the order of Reynaldo Ramirez, due on or before December 14, 1978, and bore interest at the rate of 10% per annum. It, in part, stated:
"It is expressly provided that upon default in the punctual payment of this note or any part thereof, principal or interest, as the same shall become due and payable, the entire indebtedness secured by the hereinafter mentioned lien shall be matured, at the option of the holder.
It is hereby expressly agreed that this note is given in part payment for labor and material to be furnished for improvements to be made upon the property hereinafter described; and this note is secured by Deed of Trust and by Builder's, Mechanic's, Laborer's and Materialman's Lien created in contract of even date herewith, upon
Lot 10 and the adjoining or west 6 ft. of Lot 11, all in the Rockdale Addition to the City of Brownsville, Cameron County, Texas.
in the city of Brownsville, Cameron County, Texas, to which Contract and Deed of Trust reference is here made ...."
* * * * * *
"Each Maker, Surety and Endorser waives Notice, Presentment for Payment, Demand for Payment and Acceleration of Maturity, and Protest, and agrees and consents that this note may be renewed, or at the time of payment extended, without notice, and without releasing any of the Parties."
Also, on September 15, 1978, the plaintiffs, as "Parties of the First Part," and Reynaldo Ramirez, as "Party of the Second Part," executed a combination Mechanic's Lien and Deed of Trust, hereinafter called the "Contract," which, in pertinent part, recited:
"The parties of the first part in consideration for the foregoing hereby agree to pay the party of the second part the sum of $2,700.00 as follows: One term note payment of $2,700.00, payable on or before the 14th day of December, 1978."
* * * * * *
"Should the parties of the first part make default in the punctual payment of said indebtedness or any part thereof, principal or interest, as the same shall become due and payable, ... then and in any such case, the whole amount of said indebtedness hereby secured remaining unpaid, shall at the option of the party of the second part, or the holder thereof immediately mature and become payable and it shall thereupon, or at any time thereafter the same or any part thereof remaining unpaid be the duty of the second party of the third part therein...."
The original note and all liens securing the same were assigned by Reynaldo Ramirez to the Brownsville National Bank. On April 26, 1979, an extension agreement by the plaintiffs and the Bank was executed. It recited that the plaintiffs "were legally obligated to pay one certain promissory note in the sum of $2,700.00, dated September 15, 1978, executed by Jose S. Cortez and Idolina G. Cortez, payable to the order of Reynaldo Ramirez, assigned to Brownsville National Bank ... said note being secured by a builder's and mechanic's lien against the following described property... desires to renew the balance due on said note and extend the time of payment *809 thereof, together with the extension of the lien on said property." The agreement further provided that in "consideration of the renewal of said note and debt, and the extension of said lien on said property aforesaid, the said parties do hereby renew said note and debt, and extend said lien on said property." The plaintiffs then agreed to pay to the Bank, or order, "the sum of $2,700.00 being the balance due this date, together with interest thereon at the rate of 14.67% per annum," in 24 monthly installments of $130.77 each, commencing on or before May 25, 1979. The agreement further provided that "the other terms and conditions of the original note and lien to remain in full force and effect, except as otherwise provided for in this extension agreement."
By December 2, 1981, the balance on the original note for $2,700.00 had been reduced to $768.48. On that date, another extension agreement was executed by the plaintiffs and the Bank. It contained the identical provisions as those contained in the April 26, 1979 extension, except 1) the balance was $768.48, the monthly installments were 12 in the amount of $64.04 each, commencing January 5, 1982, and the interest was 23.89% per annum.
Paul Y. Cunningham, by letter dated August 9, 1982, notified plaintiffs that they were in default in the payments on their note, that the note had been "declared in default," and that the Bank had requested him, as Trustee, to post notices of Trustee's sale. The letter also advised plaintiffs:
"If the remaining principal balance due on your note, that is secured by the Mechanic's Lien Contract referred to in the enclosed Trustee's Notice of Sale, of $633.32, plus attorney's and trustee's fees of $150, is not paid by certified funds to either the undersigned or the Brownsville National Bank before 10:00 A.M., September 7, 1982, the undersigned will conduct the sale referred to in the enclosed Trustee's Notice of Sale.
* * * * * *
"Hopefully, you will undertake to make immediate arrangements with Mr. Jean Webb at the Brownsville National Bank for the retirement of the above described obligations and avoid the legal consequences herein set forth."
Accompanying the letter was a copy of the Trustee's Notice of Sale.
Plaintiffs issued their check in the amount of $661.07 to the Brownsville National Bank on September 7, 1982. The check, drawn on the National Bank of Commerce, Brownsville, Texas, was returned by the National Bank of Commerce to the Brownsville National Bank and was marked "Returned Unpaid Insufficient Funds Sep.-7-1982."
For a foreclosure under a deed of trust to be upheld, absent a contrary agreement, waiver, or exceptional circumstances, two types of notices must be given by the noteholder to the maker of the note. They are: 1) notice of intent to accelerate prior to exercising the option to accelerate in order to provide the debtor with an opportunity to cure his default prior to foreclosure, and thereby avoid the harsh consequences of foreclosure; and 2) notice of acceleration. Ogden v. Gibraltar Savings Association, 640 S.W.2d 232, 233-234 (Tex. 1982); Allen Sales & Servicenter, Inc. v. Ryan, 525 S.W.2d 863, 866 (Tex.1975); Faulk v. Futch, 147 Tex. 253, 214 S.W.2d 614 (1948). Notice that the debt has been accelerated is ineffective unless preceded by proper notice of intent to accelerate. Ogden, supra; Allen Sales & Servicenter, Inc., supra.
The letter from Paul Y. Cunningham, to the plaintiffs, dated August 9, 1982, is sufficient to properly notify the plaintiffs that the debt had been accelerated. The letter clearly demanded payment of "the remaining balance due on your note" by "10:00 A.M., September 7, 1982." This language constituted an acceleration of the maturity of the note.
The plaintiffs, in support of their contention that the judgment of the trial court should be reversed because they were not properly notified of the Bank's intention to accelerate the maturity of the note, *810 rely on Ogden v. Gibraltar Savings, 640 S.W.2d 232 (Tex.1982). In particular, they rely on the following language, which appears on page 233 of the published opinion:
"... [I]n the case of a mortgage secured by a deed of trust, such notice must afford an opportunity to cure the default and bring home to the mortgagor that failure to cure will result in acceleration of the note and foreclosure under the power of sale...."
A "mortgage" on realty cannot in law be secured by a deed of trust. A "mortgage" on land is an interest in land created by a written instrument providing security for the payment of a debt, and is usually evidenced by a note. A deed of trust is in legal effect a mortgage with a power of sale. See 59 C.J.S., Mortgages, §§ 1-12, pp. 23-41; 39 Tex.Jur.2d, Mortgages, § 1, pp. 10-11. One mortgage cannot secure another mortgage. A reading of the entire sentence in the opinion, quoted above, shows that the word "mortgage" was used inadvertently.
Under the undisputed summary judgment evidence in this case, the only note executed by the plaintiffs is the note dated September 15, 1978, payable to the order of Reynaldo Ramirez, hereinbefore sometimes referred to as the "original note." That note contained waiver provisions, hereinbefore quoted.
On April 26, 1979, and again on December 2, 1981, the original note and the liens securing the same was extended through the execution by the parties of extensions of Real Estate Note and Lien. These "Extensions" contained the following language on the very last paragraph of these same documents: "the other terms and conditions of the original note and liens to remain in full force and effect, except as otherwise provided for in this extension agreement." Neither of the Extensions changed any of the waiver provisions of the original note. The original note, the liens securing the same, and the Extensions must all be considered together in deciding this appeal. The Extensions were not new notes.
The plaintiffs in this case argue that the waiver provisions in the original note are not applicable with respect to notice of intent to accelerate since they were not specifically included in the provisions of the mortgage. We do not agree. The mortgage, being nothing more than a security instrument with power of sale upon default in the payment of the note or the occurrence of certain events could not in law be the subject of acceleration. Only the maturity of the note could in law be accelerated.
Ogden, supra, the only authority cited by plaintiffs in their brief as being supportive of their position in this appeal, does not control the disposition of this case. It is distinguishable from the instant case on the facts. In Ogden, the note did not contain a provision which waived notice of intent to accelerate the maturity of the note; here, there is such a waiver. The Supreme Court in both Ogden and Allen Sales & Servicenter, Inc., supra, has held that notice of intent to accelerate is not required where the note contains a provision which waives such action.
We hold that because of the waiver provisions in the note, the Bank was not required to notify the plaintiffs prior to exercising its option to accelerate the maturity of the note of its intent to accelerate. Plaintiffs' point of error is overruled. Defendants' counterpoint is sustained.
The judgment of the trial court is AFFIRMED.
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Name: 2014/713/EU: Commission Decision of 13 October 2014 on the establishment of the annual priority lists for the development of network codes and guidelines for 2015 Text with EEA relevance
Type: Decision
Subject Matter: electrical and nuclear industries; technology and technical regulations; European construction; energy policy
Date Published: 2014-10-14
14.10.2014 EN Official Journal of the European Union L 296/28 COMMISSION DECISION of 13 October 2014 on the establishment of the annual priority lists for the development of network codes and guidelines for 2015 (Text with EEA relevance) (2014/713/EU) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003 (1) (Electricity Regulation), and in particular Article 6(1) thereof, Having regard to Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (2) (Gas Regulation), and in particular Article 6(1) thereof, Whereas: (1) The development and implementation of network codes and guidelines is an important action to be taken in order to fully integrate the internal energy market. The Third energy package has created an institutional set up for developing network codes with a view to harmonising, where necessary, the technical, operational and market rules governing the electricity and gas grids. In this institutional setup there is a key role for the Agency for the Cooperation of Energy Regulators (ACER), for the European Network of Transmission System Operators (ENTSOs) and for the European Commission to work in close cooperation with all relevant stakeholders on the development of network codes. The areas in which network codes can be developed are set out in Article 8(6) of the Electricity Regulation and the Gas Regulation. (2) Despite the possibility to develop network codes according to the process laid down in Articles 6 and 8 of the Electricity Regulation and the Gas Regulation, the Commission can develop guidelines by itself and subsequently initiate the adoption procedure to make them legally binding. The areas in which guidelines can be developed are set out in Article 18(1), (2) and (3) of the Electricity Regulation and Article 23(1) of the Gas Regulation. (3) As a first step towards binding European network codes, an annual priority list identifying the areas to be included in the development of network codes has to be established by the Commission in accordance with Article 6(1) of the Electricity Regulation and the Gas Regulation. Before setting the annual priorities, the European Commission has to consult ACER, the ENTSOs and the other relevant stakeholders. This decision sets out the priorities as decided by the Commission based on the outcome from the public consultation. (4) Harmonised gas rules on congestion management procedures, capacity allocation and balancing have already been adopted in 2012 and 2013. (5) The public consultation, as required by Article 6(1) of the Electricity and the Gas Regulation, took place from 26 February to 9 May 2014. The Commission received 20 responses (3) including from ENTSO-E. ACER and ENTSOG have not submitted a response to the public consultation. In the public consultation the majority of stakeholders supported the prioritization of the work already started and emphasised the importance of the proper and well-coordinated implementation of adopted network codes and guidelines. Additionally on 3 June 2014 ACER informed the Commission that according to its scoping exercise (4) on the necessity of harmonised rules for gas trading related to technical and operational provisions of network access services and system balancing (hereafter RfT) such rules are currently not needed. (6) Acknowledging the responses of stakeholders and having regard to the various actions needed to ensure the full integration of the internal energy market and the fact that the implementation of network codes and guidelines will require significant resources from all relevant parties including the Commission, ACER and the ENTSOs, the Commission decided to not add any new areas to the annual priority list for 2015 for gas, but rather to remove the proposed RfT. (7) Finally, the Commission has decided to reinsert to the gas annual priority list for 2015 harmonised rules on interoperability and data exchange as the final adoption of this network code will only take place in the beginning of 2015 instead of the initially envisaged adoption date at the end of 2014. For the electricity annual priority list for 2015 the Commission has decided to reinsert harmonised rules on (i) operational security, (ii) operational planning and scheduling, (iii) capacity allocation and congestion management including governance for day-ahead and intraday markets including capacity calculation, (iv) requirements for grid connection applicable to generators and on (v) demand connection. Whilst it had initially been envisaged to complete their adoption during 2014, the need for further changes identified by the Commission's analysis and also highlighted in the responses to the public consultation means that they should also be added to the 2015 list, HAS ADOPTED THIS DECISION: Article 1 The Commission establishes for the development of harmonised electricity rules this annual priority list for 2015: network connection rules: rules on requirements for grid connection applicable to generators (Commission adoption phase), demand connection (Commission adoption phase), rules on high-voltage direct current transmission system connection (finalise network code and start Commission adoption phase), system operation rules: rules on load-frequency control and reserves (Commission adoption phase), rules on emergency requirements & procedures (finalise network code and start Commission adoption phase), rules on operational security (Commission adoption phase), rules on operational planning and scheduling (Commission adoption phase), rules on capacity allocation and congestion management for day-ahead and intraday markets, including capacity calculation (Commission adoption phase), balancing rules including network-related reserve power (finalise network code and start Commission adoption phase), rules for longer term (forward) capacity allocation (Commission adoption phase), rules regarding harmonised transmission tariff structures (scoping by ACER to prepare framework guideline (5)). Article 2 The Commission establishes for the development of harmonised gas rules this annual priority list for 2015: interoperability and data exchange rules (Commission adoption phase), rules regarding harmonised transmission tariff structures (finalise network code and start Commission adoption phase), rules regarding an EU-wide market-based approach on the allocation of new build gas transmission capacity (finalise amendment proposal of capacity allocation mechanisms network code and start Commission adoption phase). Article 3 This Decision shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. Done at Brussels, 13 October 2014. For the Commission The President Josà © Manuel BARROSO (1) OJ L 211, 14.8.2009, p. 15. (2) OJ L 211, 14.8.2009, p. 36. (3) The responses are published under http://ec.europa.eu/energy/gas_electricity/consultations/20140509_network_code_en.htm (4) Commission Decision 2013/442/EU on the annual priority list for 2014 had foreseen this scoping exercise (OJ L 224, 22.8.2013, p. 14). (5) Regarding rules on investment incentives, the TEN-E Regulation, notably Article 13, provides for rules to ensure that appropriate incentives are granted to infrastructure projects of common interest in gas and electricity. In this context, the TEN-E Regulation sets out the following tasks: each national regulatory authority to submit to ACER its methodology and criteria used to evaluate investments and the higher risks incurred by them, where available, by 31 July 2013, ACER to facilitate the sharing of good practices and to make recommendations by 31 December 2013, each national regulatory authority to publish its respective methodology and the criteria used to evaluate investments and the higher risks incurred by them by 31 March 2014. Based on the input from the abovementioned tasks, the European Commission will decide whether guidelines need to be issued. |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 6, 2009 PERF-GO GREEN HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 333-141453-16-6494717 (State or Other Jurisdiction (Commission File (I.R.S. Employer of Incorporation) Number) Identification Number) 12 East 52ndStreet, 4thFloor New York, New York 10022 (Address of principal executive offices) (zip code) 8592939113 (Registrant’s telephone number, including area code) (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01Entry into a Material Definitive Agreement On November 6, 2009, Perf-Go Green Holdings, Inc. (the “Company”) and its various Noteholders including, Dr. Sadah and Ms. Dror, Bhansali Equities, Semper Gestion, E.G.G. Pension, Whalehaven Capital LP (“Whalehaven”), Brio Capital and Excalibur Special Opportunity Fund LPentered into a debt conversion agreement (the “Debt Conversion Agreement”).Pursuant to the Debt Conversion Agreement, all Noteholders agreed to convert the aggregate principal amount of $2,565,471.25 and accrued interest of $179,695.12 of its indebtedness into 27,451,664 restricted shares of common stock of the Company. The foregoing description of the Debt Conversion Agreement and related documents does not purport to be complete and is qualified in its entirety by reference to these agreements which are attached as exhibits to this Current Report and are incorporated into this Item by reference. Item 8.01Other Events See Item 1.01 above Item 9.01Financial Statements and Exhibits (d) Exhibits 10.10Debt Conversion Agreement dated November 6, 2009. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Perf-Go Green Holdings, Inc. Dated: November 6, 2009 By:/s/Anthony Tracy Name: Anthony Tracy Title: Chief Executive Officer
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Exhibit 10.66
SECOND AMENDMENT TO THE
PENSION PLAN OF
CONSTELLATION ENERGY GROUP, INC.
(Amended and Restated Effective January 31, 2012)
WHEREAS, .Exelon Corporation (the “Company”) sponsors the Pension Plan of
Constellation Energy Group, Inc. (Amended and Restated Effective January 31,
2012) (the “Plan”); and
WHEREAS, the Company desires to amend the Plan to incorporate the provisions of
a special lump sum payment option and to reflect changes necessary to comply
with Section 436 of the Internal Revenue Code of 1986, as amended, and the final
regulations thereunder.
NOW, THEREFORE, RESOLVED, that pursuant to the power of amendment contained in
Article IX of the Plan, the Plan is amended, effective October 1, 2012, except
as otherwise stated below:
1. Effective on and after January 1, 2013, Section 1.1 of the Plan is amended by
inserting the following at the end thereof:
No Employee hired on or after January 1, 2013 shall be eligible to participate
in the Plan, with the exception of Employees of the Employer listed on Appendix
G.
2. Effective on and after the Effective Time, Article 1 of the Plan is amended
by inserting the following new Section 1.3 at the end thereof:
1.3 Effect of Merger Agreement — If an Employee who was an Employee on or prior
to the Effective Time transfers employment to or is reemployed by Exelon in a
job classification with respect to which similarly situated employees of Exelon
are not eligible to participate in the Plan but are instead eligible to
participate in a Parent Benefit Plan (as such term is defined in the Merger
Agreement) that is intended to be qualified under Section 401(a) or 401(k) of
the Code (each such plan, an “Exelon Retirement Plan”), then such individual
shall upon such transfer or reemployment remain a Participant in the Plan and
shall not participate in the Exelon Retirement Plan. If a participant in an
Exelon Retirement Plan who was a participant in such plan on or prior to the
--------------------------------------------------------------------------------
Effective Time transfers employment to or is reemployed by a Participating
Employer in a job classification with respect to which similarly situated
employees of such Participating Employer are not eligible to participate in such
plan but are instead eligible to participate in the Plan, then such individual
shall upon such transfer or reemployment remain a participant in the Exelon
Retirement Plan and shall not participate in the Plan.
3. Article I of the Plan is amended by inserting the following new Section 1.4
at the end thereof:
Section 1.4. Certain Rehired Employees. Notwithstanding anything contained
herein to the contrary, no individual who has received a Special Lump Sum
Payment or an Immediately Commencing Annuity in accordance with Section 3.6
shall be eligible to become a Participant pursuant to this Article 1.
4. Article III of the Plan is amended by adding the following new Section 3.6 at
the end thereof:
Section 3.6. Special Lump Sum Payment Option. (a) Eligibility. A Participant may
elect to receive, during the election period described in this Section 3.6, his
or her deferred Gross Pension as a terminated vested participant under the Plan
(“Deferred Gross Pension”) in the form of a lump sum payment (“Special Lump Sum
Payment”) or, an “Immediately Commencing Annuity” (as defined below); provided,
however, that:
(i) the Participant has a Severance From Service Date prior to June 30, 2012 and
does not die and is not rehired during the period beginning July 1, 2012 and
ending on the date payment is made or commences in accordance with this
Section 3.6;
(ii) the Participant has not otherwise commenced receiving pension benefits
under the Plan on or prior to the date payment is made or commences in
accordance with this Section 3.6;
(iii) such Severance From Service Date is not on account of the Participant’s
disability, following which the Participant is receiving long-term disability
payments under any long-term disability program of an Employer, including on
June 30, 2012;
2
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(iv) the Participant’s Deferred Gross Pension is not subject to a qualified
domestic relations order as defined in Section 414(p) of the Code
(v) the Participant is not immediately, as of his or her Severance From Service
Date, eligible for early retirement benefits in accordance with 3.3(b) above;
(vi) the Participant is not on a leave of absence or layoff from an Employer on
June 30, 2012;
(vii) the Participant is not 70 1⁄2 years of age or older as of October 1, 2012;
and
(viii) the Participant can be located, after a diligent search, as necessary, by
the Plan Administrator before July 1, 2012.
For each such Participant described in this paragraph (a) of this Section 3.6,
the term “Immediately Commencing Annuity” shall mean, as applicable, either:
(i) with respect to a Participant eligible to commence receipt of his or her
Deferred Gross Pension as of December 1, 2012, any applicable optional form of
annuity available to the Participant under this Article III; or
(ii) with respect to any other Participant, a single life annuity, 50%
“qualified joint and survivor annuity” (within the meaning of Code
Section 417(b)) or a 75% “qualified optional survivor annuity” (within the
meaning of Code Section 417(g)).
For purposes of this Section 3.6, a “Participant” shall also include a
beneficiary of a Participant who otherwise satisfies the requirements of this
Section 3.6 but for the Participant’s death prior to July 1, 2012.
3.6(b) Election and Election Period. To receive the distribution of benefits
described in paragraph (a) of this Section 3.6, an eligible Participant must
voluntarily elect to receive a distribution pursuant to this Section 3.6 by
completing an election form and spousal waiver, if required, provided by the
Administrator, and submitting such forms to the Administrator after October 1,
2012 and before the following dates, as applicable,
(i) November 15, 2012, with respect to a Participant who elects a Special Lump
Sum Payment; and
(iii) December 15, 2012, with respect to a Participant who elects an Immediately
Commencing Annuity,
or such other period during 2012 determined by the Administrator.
3
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The Administrator shall provide each eligible Participant, not less than 30 days
and not more than 180 days before the Benefit Commencement Date, an application
form including a general description of the material features, as well as an
explanation of the relative values and financial effect, of the optional forms
of benefit available under this Section 3.6, in a manner that satisfies the
notice requirements of Section 417(a)(3) of the Code and the Treasury
Regulations thereunder. The form shall indicate the Participant’s right to waive
a survivor annuity, his Surviving Spouse’s right to consent to such waiver or
refuse such consent, and the right to revoke any waiver, within the 180 day
period preceding the Benefit Commencement Date, and shall include a description
of the right of the Participant, if any, to defer receipt of a distribution and
the consequences of failure to defer such receipt, in accordance with Treasury
guidance under Section 411(a)(11) of the Code.
3.6(c) Amount of Payment. The Special Lump Sum Payment shall equal the actuarial
equivalent of the Participant’s nonforfeitable Deferred Gross Pension, based on
the following factors:
(i) the applicable interest rate described in Section 417(e)(3) of the Code for
August of 2011;
(ii) an assumed commencement date of the later of (A) age 65, and (B) the
Participant’s age as of December 1, 2012;
(iii) the applicable mortality table, as defined in Section 417 of the Code and
the Treasury Regulations promulgated thereunder; and
(iv) the Gross Pension of a Participant in the PEP shall be calculated, in
accordance with the terms of the existing terms of the Plan, as the present
value of the age 65 deferred annuity (within the meaning of 3.3(g)).
The Immediately Commencing Annuity shall be calculated:
(i) in accordance with the applicable terms of the Plan, for a Participant who
is eligible to immediately commence benefits under the terms of the Plan as of
the payment date set forth in paragraph (d) of this Section 3.6 and
(ii) as the actuarial equivalent of the Special Lump Sum Payment, for each other
Participant.
4
--------------------------------------------------------------------------------
3.6(d) Payment of Benefit. If an eligible Participant elects the distribution of
his or her Deferred Gross Pension in accordance with this Section 3.6, payment
shall be made, or commence to be made, on or before December 1, 2012, or as soon
as administratively practicable thereafter.
3.6(e) Death and Rehire. If an eligible Participant elects the distribution of
his or her Deferred Gross Pension in accordance with this Section 3.6 and
subsequently dies or is rehired as an Employee before distributions commence,
his or her election shall be null and void and the Participant’s benefit shall
be paid pursuant to the Plan without regard to this Section 3.6. Notwithstanding
anything contained herein to the contrary, upon distribution of a Special Lump
Sum Payment or an Immediately Commencing Annuity made to an individual in
accordance with this Section 3.6, in the event of the individual’s rehire with
an Employer following the date such distribution is made, the individual shall
not be eligible to participate in the Plan during such period of rehire and may
be eligible to participate in the Exelon Corporation Cash Balance Pension Plan
or the Exelon Corporation Pension Plan for Bargaining Unit Employees (or such
other plan that applies to employees of an Employer hired on or after
December 1, 2012), as applicable, in accordance with their terms and conditions.
5. Effective on and after the Effective Time, Section 6.1 shall be amended by
adding a sentence before the first sentence, as follows:
Each person entitled to a payment under the Plan shall furnish such information
and data, including birth certificates or other evidence of age satisfactory to
the Administrator, and sign such documents as may reasonably be requested by the
Administrator or the Trustee in connection with the administration of the Plan.
6. Effective on and after the Effective Time, Sections 6.4, 6.5, 6.6, 6.7 and
6.8 shall be deleted in their entirety, and new Sections 6.4 through 6.12 shall
be added as follows, and the remaining sections shall be renumbered:
6.4 The Administrator, the Investment Fiduciary and the Corporate Investment
Committee
6.4(a) The Administrator — The Company’s Vice President, Health & Benefits, or
such other person or committee appointed by the Chief Human Resources Officer
from time to time (such vice president or other person or committee, the
“Administrator”), shall be the “administrator” of the Plan, within the meaning
of such term as used in ERISA. In addition, the Administrator shall be the
“named fiduciary” of the Plan, within the meaning of such term as used in ERISA,
solely with respect to administrative matters involving the Plan and not with
respect to any investment of the Plan’s assets. The Administrator shall have the
following duties, responsibilities and rights:
(i) The Administrator shall have the duty and discretionary authority to
interpret and construe this Plan in regard to all questions of eligibility, the
status and rights of Participants, Beneficiaries and other persons under this
Plan, and the manner, time, and amount of payment of any distributions under
this Plan.
5
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The determination of the Administrator with respect to an Employee’s years of
Vesting Service, the amount of the Employee’s Compensation, and any other matter
affecting payments under the Plan shall be final and binding. Benefits under the
Plan shall be paid to a Participant or Beneficiary only if the Administrator, in
his or her discretion, determines that such person is entitled to benefits.
(ii) Each Employer shall, from time to time, upon request of the Administrator,
furnish to the Administrator such data and information as the Administrator
shall require in the performance of his or her duties.
(iii) The Administrator shall direct the Trustee to make payments of amounts to
be distributed from the Trust Fund under Article 7 (relating to distributions).
In addition, it shall be the duty of the Administrator to certify to the Trustee
the names and addresses of all Participants, the amounts of all Pensions, the
dates of death of Participants and all proceedings and acts of the Administrator
necessary or desirable for the Trustee to be fully informed as to the Pension to
be paid out of the Trust Fund.
(iv) The Administrator shall have all powers and responsibilities necessary to
administer the Plan, except those powers that are specifically vested in the
Investment Fiduciary, the Corporate Investment Committee or the Trustee.
(v) The Administrator may require a Participant or Beneficiary to complete and
file certain applications or forms approved by the Administrator and to furnish
such information requested by the Administrator. The Administrator and the Plan
may rely upon all such information so furnished to the Administrator.
(vi) The Administrator shall be the Plan’s agent for service of legal process
and forward all necessary communications to the Trustee.
6.4(b) Removal of Administrator — The Chief Human Resources Officer shall have
the right at any time, with or without cause, to remove the Administrator
(including any member of a committee that constitutes the Administrator). The
Administrator may resign and the resignation shall be effective upon delivery of
the written resignation to the Chief Human Resources Officer. Upon the
resignation, removal or failure or inability for any reason of the Administrator
to act hereunder, the Chief Human Resources Officer shall appoint a successor.
Any successor Administrator shall have all the rights, privileges and duties of
the predecessor, but shall not be held accountable for the acts of the
predecessor. None of the Company, any member of the board of directors of the
Company who is not the Chief Human Resources Officer, nor any other person shall
have any responsibility regarding the retention or removal of the Administrator.
6
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6.4(c) The Investment Fiduciary — The Company, acting through the Exelon
Investment Office, shall be the Investment Fiduciary and the “named fiduciary”
of the Plan, within the meaning of such term as used in ERISA, solely with
respect to matters involving the investment of assets of the Plan and, any
contrary provision of the Plan notwithstanding, in all events subject to the
limitations contained in section 404(a)(2) of ERISA and all other applicable
limitations. The Investment Fiduciary shall have the following duties,
responsibilities and rights:
(i) The Investment Fiduciary shall be the “named fiduciary” for purposes of
directing the Trustee as to the investment of amounts held in the Trust Fund and
for purposes of appointing one or more investment managers as described in
ERISA.
(ii) The Investment Fiduciary shall submit to the Corporate Investment Committee
annual manager review results and such other reports and documents as may be
necessary for the Corporate Investment Committee to monitor the activities and
performance of the Investment Fiduciary.
(iii) Each Employer shall, from time to time, upon request of the Investment
Fiduciary, furnish to the Investment Fiduciary such data and information as the
Investment Fiduciary shall require in the performance of its duties.
6.4(d) The Corporate Investment Committee — The Corporate Investment Committee
shall be responsible for overall monitoring of the performance of the Investment
Fiduciary. The Corporate Investment Committee shall have the following duties,
responsibilities and rights:
(i) The Corporate Investment Committee shall monitor the activities and
performance of the Investment Fiduciary and shall review annual manager review
results and any other reports and documents submitted by the Investment
Fiduciary.
(ii) The Corporate Investment Committee shall have authority to approve asset
allocation recommendations of the Investment Fiduciary, and approve the
retention or firing of any investment consultant (but not any investment
manager), custodian or trustee, as recommended by the Investment Fiduciary.
(iii) The Corporate Investment Committee shall have the right at any time, with
or without cause, to remove one or more employees of the Exelon Investment
Office or to appoint another person or committee to act as Investment Fiduciary.
Any successor Investment Fiduciary shall have all the rights, privileges and
duties of the predecessor, but shall not be held accountable for the acts of the
predecessor.
The power and authority of the Corporate Investment Committee with respect to
the Plan shall be limited solely to the monitoring and removal of the Investment
Fiduciary and approval of the recommendations specified in clause (ii) above.
The Corporate Investment Committee shall have no responsibility for making
investment decisions, appointing or firing investment managers or for any other
duties or responsibilities with respect to the Plan, other than those
specifically listed herein.
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6.4(e) Status of Administrator, the Investment Fiduciary and the Corporate
Investment Committee — The Administrator, any person acting as, or on behalf of,
the Investment Fiduciary, and any member of the Corporate Investment Committee
may, but need not, be an Employee, trustee or officer of an Employer and such
status shall not disqualify such person from taking any action hereunder or
render such person accountable for any distribution or other material advantage
received by him or her under this Plan, provided that no Administrator, person
acting as, or on behalf of, the Investment Fiduciary, or any member of the
Corporate Investment Committee who is a Participant shall take part in any
action of the Administrator or the Investment Fiduciary on any matter involving
solely his or her rights under this Plan.
6.4(f) Notice to Trustee of Members — The Trustee shall be notified as to the
names of the Administrator and the person or persons authorized to act on behalf
of the Investment Fiduciary.
6.4(g) Allocation of Responsibilities. Each of the Administrator, the Investment
Fiduciary and the Corporate Investment Committee may allocate their respective
responsibilities and may designate any person, persons, partnership or
corporation to carry out any of such responsibilities with respect to the Plan.
Any such allocation or designation shall be reduced to writing and such writing
shall be kept with the records of the Plan.
6.4(h) General Governance — Each of the Administrator, the Investment Fiduciary
and the Corporate Investment Committee may act at a meeting or by written
consent approved by a majority of its respective members, as applicable. The
Corporate Investment Committee shall elect one of its members as chairman and
appoint a secretary, who may or may not be a member of such Committee. The
secretary of the Corporate Investment Committee shall keep a record of all
meetings and forward all necessary communications to the Employers or the
Trustee. All decisions of the Corporate Investment Committee shall be made by
the majority, including actions taken by written consent. The Administrator, the
Investment Fiduciary and the Corporate Investment Committee may adopt such rules
and procedures as it deems desirable for the conduct of its affairs, provided
that any such rules and procedures shall be consistent with the provisions of
the Plan.
6.4(i) Indemnification — The Employers hereby jointly and severally indemnify
the Administrator, the persons employed in the Exelon Investment Office, the
members of the Corporate Investment Committee, the Chief Human Resources
Officer, and the directors, officers and employees of the Employers and each of
them, from the effects and consequences of their acts, omissions and conduct in
their official capacity with respect to the Plan (including but not limited to
judgments, attorney fees and costs with respect to any and all related claims,
subject to the Company’s notice of and right to direct any litigation, select
any counsel or advisor, and approve any settlement), except to the extent that
such effects and consequences result from their own willful misconduct. The
foregoing indemnification shall be in addition to (and secondary to) such other
rights such persons may enjoy as a matter of law or by reason of insurance
coverage of any kind.
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6.4(j) No Compensation. None of the Administrator, any person employed in the
Exelon Investment Office nor any member of the Corporate Investment Committee
may receive any compensation or fee from the Plan for services as the
Administrator, Investment Fiduciary or a member of the Corporate Investment
Committee; provided, however that nothing contained herein shall preclude the
Plan from reimbursing the Company or any Affiliate for compensation paid to any
such person if such compensation constitutes “direct expenses” for purposes of
ERISA. The Employers shall reimburse the Administrator, the persons employed in
the Exelon Investment Office and the members of the Corporate Investment
Committee for any reasonable expenditures incurred in the discharge of their
duties hereunder.
6.4(k) Employ of Counsel and Agents. The Administrator, the Investment Fiduciary
and the Corporate Investment Committee may employ such counsel (who may be
counsel for an Employer) and agents and may arrange for such clerical and other
services as each may require in carrying out its respective duties under the
Plan.
6.5 Claims Procedure. Any Participant or distributee who believes he or she is
entitled to benefits in an amount greater than those which he or she is
receiving or has received may file a claim with the Administrator. Such a claim
shall be in writing and state the nature of the claim, the facts supporting the
claim, the amount claimed, and the address of the claimant. The Administrator
shall review the claim and, unless special circumstances require an extension of
time, within 90 days after receipt of the claim, give notice to the claimant,
either in writing by registered or certified mail or in an electronic
notification, of the Administrator’s decision with respect to the claim. Any
electronic notice delivered to the claimant shall comply with the standards
imposed by applicable Regulations. If the Administrator determines that special
circumstances require an extension of time for processing the claim, the
claimant shall be so advised in writing within the initial 90-day period and in
no event shall such an extension exceed 90 days. The extension notice shall
indicate the special circumstances requiring an extension of time and the date
by which the Administrator expects to render the benefit determination. The
notice of the decision of the Administrator with respect to the claim shall be
written in a manner calculated to be understood by the claimant and, if the
claim is wholly or partially denied, the Administrator shall notify the claimant
of the adverse benefit determination and shall set forth the specific reasons
for the adverse determination, the references to the specific Plan provisions on
which the determination is based, a description of any additional material or
information necessary for the claimant to perfect the claim, an explanation of
why such material or information is necessary, and a description of the claim
review procedure under the Plan and the time limits applicable to such
procedures, including a statement of the claimant’s right (subject to the
limitations described in Section 8.9 (relating to statute of limitations for
actions under the Plan) and 8.10 (relating to forum for legal actions under the
Plan)) to
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bring a civil action under section 502 of ERISA following an adverse benefit
determination on review. The Administrator shall also advise the claimant that
the claimant or the claimant’s duly authorized representative may request a
review by the Chief Human Resources Officer (or such other officer designated
from time to time by the Chief Human Resources Officer) of the adverse benefit
determination by filing with such officer, within 60 days after receipt of a
notification of an adverse benefit determination, a written request for such
review. The claimant shall be informed that, within the same 60-day period, he
or she (a) may be provided, upon request and free of charge, reasonable access
to, and copies of, all documents, records and other information relevant to the
claimant’s claim for benefits and (b) may submit to the officer written
comments, documents, records and other information relating to the claim for
benefits. If a request is so filed, review of the adverse benefit determination
shall be made by the officer within, unless special circumstances require an
extension of time, 60 days after receipt of such request, and the claimant shall
be given written notice of the officer’s final decision. If the officer
determines that special circumstances require an extension of time for
processing the claim, the claimant shall be so advised in writing within the
initial 60-day period and in no event shall such an extension exceed 60 days.
The extension notice shall indicate the special circumstances requiring an
extension of time and the date by which the officer expects to render the
determination on review. The review of the officer shall take into account all
comments, documents, records and other information submitted by the claimant
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination. The notice of the final
decision shall include specific reasons for the determination and references to
the specific Plan provisions on which the determination is based and shall be
written in a manner calculated to be understood by the claimant.
6.6 Notices to Participants, Etc. — All written notices, reports and statements
given, made, delivered or transmitted to a Participant or Beneficiary or any
other person entitled to or claiming benefits under the Plan shall be deemed to
have been duly given, made or transmitted when mailed by first class mail with
postage prepaid and addressed to the Participant or Beneficiary or such other
person at the address last appearing on the records of the Administrator. A
Participant or Beneficiary or other person may record any change of his or her
address from time to time by written notice filed with the Administrator.
6.7 Responsibility to Advise Administrator of Current Address — Each person
entitled to receive a payment under the Plan shall file with the Administrator
in writing his or her complete mailing address and each change therein. A check
or communication mailed to any person at his or her address on file with the
Administrator shall be deemed to have been received by such person for all
purposes of the Plan, and neither the Administrator, the Employers nor the
Trustee shall be obliged to search for or ascertain the location of any person.
If the Administrator shall be in doubt as to whether payments are being received
by the person entitled thereto, it shall, by registered mail addressed to the
person concerned at his or her last address known to the Administrator, notify
such person that all future Pension payments will be withheld until such person
submits to the Administrator evidence of his or her continued life and his or
her proper mailing address.
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6.8 Notices to the Firm or Administrator — Written directions, notices and other
communications from Participants or Beneficiaries or any other persons entitled
to or claiming benefits under the Plan to the Employers or the Administrator
shall be deemed to have been duly given, made or transmitted either when
delivered to such location as shall be specified upon the form prescribed by the
Administrator for the giving of such directions, notices and other
communications or when mailed by first class mail with postage prepaid and
addressed to the addressee at the address specified upon such forms.
6.9 Records. Each of the Administrator, the Investment Fiduciary and the
Corporate Investment Committee shall keep a record of all of their respective
proceedings, if any, and shall keep or cause to be kept all books of account,
records and other data as may be necessary or advisable in their respective
judgment for the administration of the Plan, the administration of the
investments of the Plan or the monitoring of the investment activities of the
Plan, as applicable.
6.10 Actuary to be Employed — The Company or the Investment Fiduciary shall
engage an actuary to do such technical and advisory work as the Company or the
Investment Fiduciary may request, including analyses of the experience of the
Plan from time to time, the preparation of actuarial tables for the making of
computations thereunder, and the submission to the Company or the Investment
Fiduciary of an annual actuarial report, which report shall contain information
showing the financial condition of the Plan, a statement of the contributions to
be made by the Employers for the ensuing year, and such other information as may
be requested by the Company or the Investment Fiduciary.
6.11 Electronic Media — Notwithstanding any provision of the Plan to the
contrary and for all purposes of the Plan, to the extent permitted by the
Administrator and any applicable law or Regulation, the use of electronic
technologies shall be deemed to satisfy any written notice, consent, delivery,
signature, disclosure or recordkeeping requirement under the Plan, the Code or
ERISA to the extent permitted by or consistent with applicable law and
Regulations. Any transmittal by electronic technology shall be deemed delivered
when successfully sent to the recipient, or such other time specified by the
Administrator.
6.12 Correction of Error — If it comes to the attention of the Administrator
that an error has been made in the amount of benefits payable, or paid, to any
Participant or Beneficiary under the Plan, the Administrator shall be permitted
to correct such error by whatever means that the Administrator, in its sole
discretion determines, including by offsetting future benefits payable to the
Participant or Beneficiary or requiring repayment of benefits to the Plan,
except that no adjustment need be made with respect to any Participant or
Beneficiary whose benefit has been distributed in full prior to the discovery of
such error.
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7. Effective on and after of the Effective Time, Section 7.1 shall be deleted in
its entirety, and shall be replaced as follows:
7.1 Contributions and Funding Policy — No contributions from any Participant
shall be required or permitted under the Plan. The Company shall establish a
funding policy and method consistent with the objectives of the Plan and the
requirements of Title I of ERISA and shall communicate such policy and method,
and any changes in such policy and method, to the Investment Fiduciary.
Forfeitures arising under this Plan shall be applied to reduce the expenses of
Plan administration, not to increase the benefits otherwise payable to
Participants.
8. Effective on and after the Effective Time, Section 8.2(a) shall be amended to
delete the third paragraph thereof.
9. Article VIII of the Plan is amended by adding the following new Sections 8.8
at the end thereof:
8.8. Certain Rehired Employees. Notwithstanding anything contained herein to the
contrary, an individual who is reemployed by an Employer after December 19, 2012
and has received a Special Lump Sum Payment or an Immediately Commencing Annuity
in accordance with Section 3.6 shall not be eligible to become a Participant
pursuant to Article 1.
10. Effective on and after the Effective Time, Article VIII of the Plan is
amended by adding the following new Sections 8.9, 8.10, 8.11, and 8.12 at the
end thereof, as follows:
8.9 Expenses. The expenses of the Trustee in the administration of the Trust
Fund, including compensation, if any, to the Trustee for its services, shall be
paid by the Company or the Employers. All costs and expenses incurred in the
operation of the Trust Fund, to the extent not described in the preceding
sentence, and all costs and expenses incurred in the operation of the Plan or
the Trust Fund, as applicable, including, but not limited to, “direct expenses”
incurred in
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administering the Plan and the Trust Fund (including compensation paid to any
employee of an Employer or an Affiliate who is engaged in the administration of
the Plan or the Trust Fund), the expenses of the Administrator, the Investment
Office and the Corporate Investment Committee, the fees of counsel and any
agents for the Trustee, the Administrator, the Investment Office or the
Corporate Investment Committee, and the fees of investment managers that manage
assets of the Trust Fund, as applicable, shall be paid by the Trustee from the
Trust Fund in such proportion as the Investment Office, in its sole discretion,
shall determine, to the extent such expenses are not paid by the Employers and
to the extent permitted under ERISA, Regulations and other applicable
laws. Notwithstanding the foregoing, the Administrator or the Investment Office
may authorize an Employer to act as an agent of the Plan to pay any expenses,
and the Employer shall be reimbursed from the Trust Fund for such payments.
8.10 Statute of Limitations for Actions under the Plan. Except for actions to
which the statute of limitations prescribed by section 413 of ERISA applies,
(a) no legal or equitable action relating to a claim for benefits under section
502 of ERISA may be commenced later than one year after the claimant receives a
final decision from the Chief Human Resources Officer (or such other officer
designated from time to time by the Chief Human Resources Officer) in response
to the claimant’s request for review of the adverse benefit determination and
(b) no other legal or equitable action involving the Plan may be commenced later
than two years from the time the person bringing an action knew, or had reason
to know, of the circumstances giving rise to the action. This provision shall
not be interpreted to extend any otherwise applicable statute of limitations,
nor to bar the Plan or its fiduciaries from recovering overpayments of benefits
or other amounts incorrectly paid to any person under the Plan at any time or
bringing any legal or equitable action against any party.
8.11 Forum for Legal Actions under the Plan. Any legal action involving the Plan
that is brought by any Participant, any Beneficiary or any other person shall be
litigated in the federal courts located in District of Maryland, and no other
federal or state court.
8.12 Legal Fees. Any award of legal fees in connection with an action involving
the Plan shall be calculated pursuant to a method that results in the lowest
amount of fees being paid, which amount shall be no more than the amount that is
reasonable. In no event shall legal fees be awarded for work related to
(a) administrative proceedings under the Plan, (b) unsuccessful claims brought
by a Participant, Beneficiary or any other person, or (c) actions that are not
brought under ERISA. In calculating any award of legal fees, there shall be no
enhancement for the risk of contingency, nonpayment or any other risk nor shall
there be applied a contingency multiplier or any other multiplier. In any action
brought by a Participant, Beneficiary or any other person against the Plan, the
Administrator, any member of the Exelon Investment Office, any member of the
Corporate Investment Committee, the Chief Human Resources Officer, any Plan
fiduciary, the Company, its affiliates or their respective officers, directors,
employees, or agents (the “Plan Parties”), legal fees of the Plan Parties in
connection with such action shall be paid by the Participant, Beneficiary or
other person bringing the action, unless the court specifically finds that there
was a reasonable basis for the action.
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11. Effective on and after the Effective Time, Section 9.1 and 9.2 shall be
deleted in their entirety, and shall be replaced as follows
9.1 Amendment — The Board of Directors of the Company (or a committee thereof)
may at any time and from time to time amend or modify this Plan in any manner
deemed by the board of directors of the Company to be necessary or desirable,
provided, however, that in the case of any amendment or modification that would
not result in an aggregate annual cost to the Company of more than $50,000,000,
the Plan may be amended or modified by action of the Chief Human Resources
Officer (with the consent of the Chief Executive Officer in the case of a
discretionary amendment or modification expected to result in an increase in
annual expense or liability account balance exceeding $250,000) or another
executive officer holding title of equivalent or greater responsibility and,
provided further, that no amendment shall be made that is not consistent with
any applicable collective bargaining agreement. Any such amendment or
modification shall become effective on such date as the Board (or committee
thereof) or executive shall determine and may apply to Participants in this Plan
at the time thereof as well as to future Participants, provided, however, that,
unless permitted by applicable law, no such amendment or modification which
reduces the basis for the computation of benefits shall be retroactive as to
service prior to the date of such amendment or modification.
9.2 Termination
9.2(a) Termination of the Plan by an Employer. The Company may at any time, by
resolution adopted by its board of directors, terminate this Plan in its
entirety. In addition, any Employer may at any time terminate its participation
in this Plan by resolution adopted by its board of directors to that effect.
Contributions of an Employer to the Plan are conditioned on the receipt from the
Internal Revenue Service of an initial favorable determination letter that this
Plan and the Trust as adopted by the Company meets the requirements of section
401(a) of the Code and that the Trust is exempt from tax under section 501(a) of
the Code, and if the Internal Revenue Service shall refuse to issue such letter,
any Employer may terminate its participation in this Plan and direct the Trustee
to pay and deliver to that Employer the portion of the Trust applicable to its
contributions.
9.2(b) Vesting and Distribution Upon Termination or Partial Termination. Upon
termination or partial termination of the Plan, the benefit as of the date of
termination or partial termination, as the case may be, of all affected
Participants shall be fully vested; provided, however, that full vesting shall
be required with respect to a termination or partial termination only to the
extent the Plan is then funded.
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Allocation and distribution of the terminated portion of the Trust Fund shall
thereafter be made in accordance with the applicable requirements of ERISA and
the Code and with any applicable approval of the Pension Benefit Guaranty
Corporation (the “PBGC”). If the Administrator is notified by PBGC that PBGC is
unable to determine that the Trust Fund is sufficient to discharge when due all
obligations of the Plan with respect to benefits guaranteed by PBGC pursuant to
section 4022 of ERISA, then the allocation and distribution of such portion of
the Trust shall be made only under the direction of PBGC or a United States
district court pursuant to section 4044 of ERISA.
In the event that, after the termination of the Plan, any assets remain after
such allocation, such assets shall be paid to the Company. The portion of the
assets allocated to provide benefits to any person or group of persons may be
applied for the benefit of such person or persons by the distribution of cash,
continuance of the Trust, establishment of a new Trust, purchase of annuities
from an insurance company, or otherwise, as determined by the Investment
Fiduciary in its sole discretion; provided, however, that the benefit of any
Participant or former Participant who is married and has satisfied the vesting
requirement shall, unless such person shall elect otherwise, be paid in the form
set forth in the Plan relating to manner of distribution with respect to married
Participants and, if the surviving Spouse of a deceased Participant or deceased
former Participant is entitled to receive a benefit pursuant to the Plan
provisions relating to manner of distribution with respect to married
Participants or to pre-retirement death benefits, as the case may be, such
benefit shall, unless such person shall elect otherwise, be paid in the form set
forth therein.
Contributions of an Employer to the Plan are conditioned on the receipt from the
Internal Revenue Service of an initial favorable determination letter that the
Plan and Trust Fund as adopted by the Company meet the requirements of section
401(a) of the Code and that the Trust is exempt from tax under section 501(a) of
the Code, and, in the event that the Internal Revenue Service shall refuse to
issue such letter, the Company may terminate the Plan and shall direct the
Trustee to pay and deliver the Trust to the Company.
12. Effective on and after the Effective Time, the text of Appendix A-2 of the
Plan is deleted and replaced as follows: “Reserved,” and all references to the
“Administrative Committee” shall be deleted.
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13c. Effective on and after the Effective Time, Appendix A-13 is amended by
replacing the entirety of the text as follows:
A-13 “Company” means Exelon Corporation, and its successor and assigns.
14. Effective on and afterthe Effective Time, Appendix A-16 is amended by
replacing the entirety of the text as follows:
A-16 “Disability Plan” means the Constellation Energy Group, Inc. Long-Term
Disability Plan, the Exelon Corporation Long Term Disability Plan, or any
successor plan.
15. Effective on and after November 30, 2012, Appendix A-20 is amended by adding
the following at the end thereof:
For employees who employees who were Transferred Employees as that term is
defined in the Purchase and Sale Agreement by and between Constellation Power
Source Generation, Inc. as Seller, and Raven Power Holdings LLC as Buyer, dated
as of August 8, 2012, Credited Service for purposes of determining the Early
Retirement Adjustment Factor shall include all time periods while employed by
the Buyer, and dit for age attained during employment with the Buyer until such
time as the Transferred Employee elects to receive benefits under the Plan; and
(ii)
16. Effective on and after the Effective Time, a new Appendix A-20a shall be
added immediately following Appendix A-20 as follows:
A-20a “Effective Time” means the effective time of the transaction that is the
subject of the Merger Agreement, as such term is defined in the Merger
Agreement.
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17. Effective on and after the Effective Time, Appendix A-21 shall be amended by
adding a sentence after the first sentence as follows:
Effective as of the Effective Time, Employee shall not include any person who
was: (i) employed immediately prior to the Effective Time at Exelon or a
facility owned immediately before the Effective Time by Exelon or (ii) initially
employed on or after the Effective Time at a facility owned immediately before
the Effective Time by Exelon.
18. Effective on and after the Effective Time, the text of Appendix A-24a is
deleted and replaced as follows, and all references to the “Executive Group”
shall be deleted.
A-24a “Exelon” means Exelon Corporation and any of its affiliates that was an
affiliate immediately before the Effective Time.
19. Appendix A-21 of the Plan is amended by adding the following new sentence at
the end thereof:
Notwithstanding anything contained herein to the contrary, an Employee shall not
include an individual who has received a Special Lump Sum Payment or an
Immediately Commencing Annuity in accordance with Section 3.6.
20. Appendix A-29 of the Plan is amended by inserting the following new sentence
at the end thereof:
Notwithstanding the foregoing, a Participant shall not be entitled to any amount
payable from the Trust under the Plan following the Participant’s receipt of a
Special Lump Sum Payment within the meaning of Section 3.6.
21. Effective on and after the Effective Time, Appendix A-30 is amended by
replacing the entirety of its text as follows:
A-30 “Investment Fiduciary” means the Company acting through the Exelon
Investment Office.
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22. Effective on and after the Effective Time, a new Appendix A-30a shall be
added immediately following Appendix A-30 as follows:
A-30a “Merger Agreement” means that Agreement and Plan of Merger, dated as of
April 28, 2011, by and among Exelon Corporation, Bolt Acquisition Corporation
and Constellation Energy Group, Inc.
23. Appendix A-35 of the Plan is amended by adding the following new sentence at
the end thereof:
An individual shall cease to be a Participant upon the date the individual is no
longer eligible to receive a benefit from this Plan (including, without
limitation, upon his or her receipt of a Special Lump Sum Payment as defined in
Section 3.6) or upon the individual’s Severance From Service Date if the
individual is not eligible to receive a benefit from this Plan.
24. Effective January 1, 2013, Appendix A-35 of the Plan is amended by adding
the following sentence to the end thereof:
No Employee hired on or after January 1, 2013 shall be a Participant, with the
exception of Employees of the Employer set forth in Appendix G.
25. Effective on and after the Effective Time, Appendix A-38 of the Plan is
amended by replacing the entirety of the text as follows:
A-38“Plan Administrator” means the Director, Employee Plans and Programs of the
Company (or the position succeeding to that function).
26. Appendix A-44 of the Plan is amended by inserting the following new sentence
before the last sentence of the first paragraph therein:
For distributions with a Benefit Commencement Date on or after December 1, 2012,
other than as set forth in Section 3.6, the interest rate shall be the rate as
defined in Section 417(e)(3)(C) of the Code for the fifth month preceding the
calendar year in which such distribution is made or commences; provided,
however, that the rate as defined in Section 417(e)(3)(C) of the Code for the
month in which such distribution is made or commences shall be used if more
favorable to the distributee during the period beginning December 1, 2012
through December 1, 2013.
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27. Effective as of the June 1, 2012, Appendix A-45 is amended by replacing the
entirety of the text as follows:
A-45 “Trustee” means the Northern Trust Company or any successor Trustee
appointed by the Board of Directors.
28. Appendix G shall be deleted in its entirety, and replaced with a new
Appendix G, attached hereto.
*****
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IN WITNESS WHEREOF, Exelon Corporation has caused this instrument to be executed
by its duly authorized officer on this day of ,
2012.
CONSTELLATION ENERGY GROUP, INC. By:
Amy E. Best
Senior Vice President and
Chief Human Resource Officer
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APPENDIX G
DESIGNATED SUBSIDIARIES
Employees of the following subsidiary are eligible to participate in the Plan on
the same terms and conditions as set forth therein, except as otherwise provided
below:
BGE Home Products and Services, LLC:
a. An individual who is a Participant on December 31, 1999 and an Employee of
BGE Home Products & Services, Inc. on January 1, 2000, is subject to 1.2 of the
Plan except that PEP is modified as described in b. below. Notwithstanding the
preceding sentence, an individual who is an Employee of Constellation Energy
Source, Inc. on December 31, 1999, who transfers to BGE Home Products &
Services, Inc. effective January 1, 2000, and was hired by Constellation Energy
Source, Inc. after December 31, 1994, shall participate in PEP as modified in b.
below. An individual who is a Participant in the Traditional Pension Plan after
December 31, 1999 by reason of the preceding will cease participating in the
Traditional Plan once he/she ceases to earn Credited Service. If such an
individual again earns Credited Service, he/she shall participate in PEP as
modified in b. below. All other individuals shall participate in PEP as modified
in b. below.
b. Participants who are Employees of BGE Home Products & Services, Inc. shall
have the following modifications to PEP:
(i) A Participant’s Total Pension Credits in Appendix A for the period of time
during which the Participant is employed by BGE Home Products & Services, Inc.
shall equal the sum of (1) 0.025 times the Credited Service earned in each Plan
Year prior to the Plan Year in which the Participant reaches age 40, (2) 0.05
times the Credited Service earned in each Plan Year after the Plan Year in which
the Participant reaches age 39 and before the Plan Year in which the Participant
reaches age 50, and (3) 0.075 times the Credited Service earned in each Plan
Year after the Participant reaches age 49.
(ii) The only form of pension payments that a Participant may elect under PEP
pursuant to 3.1(b) is monthly installments; lump sum payment is not available
except if pursuant to the automatic lump sum cash-out provisions of 3.3(e);
3.3(h) therefore is not applicable. This (ii) is not applicable to a Participant
who accrued any benefits under PEP while employed by an Employer whose Employee
Participants were eligible to elect under PEP pursuant to 3.1(b) a lump sum, and
then after January 1, 2000 transferred
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employment to BGE Home Products & Services, Inc. This (ii) is not applicable to
a Participant who received benefits under the Special Window for Employees
Employed by BGE Home (as part of BGE Home’s closing of its retail appliance and
merchandise stores and the reorganization of BGE Home because of that closing)
under the Constellation Energy Group, Inc. Severance Plan.
(iii) The Preretirement Survivor Benefit under 5.8 may be paid as a lump sum.
(iv) The third sentence in the definition of Annuity Factor in Appendix A is not
applicable unless the Participant transferred employment to BGE Home Products &
Services, Inc. after January 1, 2000, and was eligible for Early Retirement
under 2.2 at the time he/she was employed by the Company or a subsidiary listed
in this Appendix G other than BGE Home Products & Services, Inc. or BGE
Commercial Building Systems, Inc.
Employees of the following subsidiaries who were hired prior to January 1, 2013
are eligible to participate in the Plan on the same terms and conditions set
forth therein, except as set forth below.
Constellation Power, Inc.
Constellation Energy Commodities Group, Inc. (formerly known as Constellation
Power Source, Inc.) Constellation Power Source Generation, Inc.
Constellation Energy Source, Inc.
BGE Home Products and Services, LLC (formerly known as BGE Home Products and
Services, Inc.)1
1 a. An individual who is a Participant on December 31, 1999 and an Employee of
BGE Home Products & Services, Inc. on January 1, 2000, is subject to 1.2 of the
Plan except that PEP is modified as described in b. below. Notwithstanding the
preceding sentence, an individual who is an Employee of Constellation Energy
Source, Inc. on December 31, 1999, who transfers to BGE Home Products &
Services, Inc. effective January 1, 2000, and was hired by Constellation Energy
Source, Inc. after December 31, 1994, shall participate in PEP as modified in b.
below. An individual who is a Participant in the Traditional Pension Plan after
December 31, 1999 by reason of the preceding will cease participating in the
Traditional Plan once he/she ceases to earn Credited Service. If such an
individual again earns Credited Service, he/she shall participate in PEP as
modified in b. below. All other individuals shall participate in PEP as modified
in b. below.
b. Participants who are Employees of BGE Home Products & Services, Inc. shall
have the following modifications to PEP:
(i) A Participant’s Total Pension Credits in Appendix A for the period of
time during which the Participant is employed by BGE Home Products & Services,
Inc. shall equal the sum of (1) 0.025 times the Credited Service earned in each
Plan Year prior to the Plan Year in which the Participant reaches age 40,
(2) 0.05 times the Credited Service earned in each Plan Year after the Plan Year
in which the Participant reaches age 39 and before the Plan Year in which the
Participant reaches age 50, and (3) 0.075 times the Credited Service earned in
each Plan Year after the Participant reaches age 49.
(ii) The only form of pension payments that a Participant may elect under PEP
pursuant to 3.1(b) is monthly installments; lump sum payment is not available
except if pursuant to the automatic lump sum cash-out provisions of 3.3(e);
3.3(h) therefore is not applicable. This (ii) is not applicable to a Participant
who accrued any benefits under PEP while employed by an Employer whose Employee
Participants were eligible to elect under PEP pursuant to 3.1(b) a lump sum, and
then after January 1, 2000 transferred employment to BGE Home Products &
Services, Inc. This (ii) is not applicable to a Participant who received
benefits under the Special Window for Employees Employed by BGE Home (as part of
BGE Home’s closing of its retail appliance and merchandise stores and the
reorganization of BGE Home because of that closing) under the Constellation
Energy Group, Inc. Severance Plan.
(iii) The Preretirement Survivor Benefit under 5.8 may be paid as a lump sum.
(iv) The third sentence in the definition of Annuity Factor in Appendix A is
not applicable unless the Participant transferred employment to BGE Home
Products & Services, Inc. after January 1, 2000, and was eligible for Early
Retirement under 2.2 at the time he/she was employed by the Company or a
subsidiary listed in this Appendix G other than BGE Home Products & Services,
Inc. or BGE Commercial Building Systems, Inc.
22
--------------------------------------------------------------------------------
BGE Commercial Building Systems, Inc.2
2 a. An individual who is a Participant on December 31, 1999 and an Employee of
BGE Commercial Building Systems, Inc. on January 1, 2000, is subject to 1.2 of
the Plan except that PEP is modified as described in b. below. An individual who
is a Participant in the Traditional Pension Plan after December 31, 1999 by
reason of the preceding sentence will cease participating in the Traditional
Plan once he/she ceases to earn Credited Service. If such an individual again
earns Credited Service, he/she shall participate in PEP as modified in b. below.
All other individuals shall participate in PEP as modified in b. below.
b. Participants who are Employees of BGE Commercial Building Systems, Inc.
shall have the following modifications to PEP:
(i) A Participant’s Total Pension Credits in Appendix A for the period of
time during which the Participant is employed by BGE Commercial Building
Systems, Inc. shall equal the sum of (1) 0.025 times the Credited Service earned
in each Plan Year prior to the Plan Year in which the Participant reaches age
40, (2) 0.05 times the Credited Service earned in each Plan Year after the Plan
Year in which the Participant reaches age 39 and before the Plan Year in which
the Participant reaches age 50, and (3) 0.075 times the Credited Service earned
in each Plan Year after the Participant reaches age 49.
(ii) The only form of pension payments that a Participant may elect under PEP
pursuant to 3.1(b) is monthly installments; lump sum payment is not available
except if pursuant to the automatic lump sum cash-out provisions of 3.3(e).
3.3(h) therefore is not applicable. This (ii) is not applicable to a Participant
who accrued any benefits under PEP while employed by an Employer whose Employee
Participants were eligible to elect under PEP pursuant to 3.1(b) a lump sum, and
then after January 1, 2000 transferred employment to BGE Commercial Building
Systems, Inc. The Preretirement Survivor Benefit under 5.8 may be paid as a lump
sum.
(iii) The third sentence in the definition of Annuity Factor in Appendix A is
not applicable unless the Participant transferred employment to BGE Commercial
Building Systems, Inc. after January 1, 2000, and was eligible for Early
Retirement under 2.2 at the time he/she was employed by the Company or a
subsidiary listed in this Appendix G other than BGE Home Products & Services,
Inc. or BGE Commercial Building Systems, Inc.
23
--------------------------------------------------------------------------------
Baltimore Gas and Electric Company3
Constellation Nuclear Services, Inc.
Constellation Generation Group, LLC
Constellation Operating Services, Inc.; Constellation Operating Services; COSI
Central Wayne, Inc. (Employees represented by a union under a collective
bargaining agreement are not eligible to participate); COSI Synfuels, Inc.; COSI
Sunnyside, Inc.; COSI Puna, Inc.; PCI Operating Company Partnership4
3 With respect to an Employee of the Comfort Link division of Baltimore Gas and
Electric Company, only individuals who are both a Participant on December 31,
1999 and an Employee of the Comfort Link division of Baltimore Gas and Electric
Company on January 1, 2000, shall be eligible to participate in the Plan.
Notwithstanding anything in the Plan to the contrary, the Vice-Chairman of
Baltimore Gas and Electric Company will not be eligible to participate in this
Plan.
4 Employees of each listed subsidiary are eligible for participation in PEP
effective January 1, 2003.
For purposes of 4.2, Vesting Service shall be computed using as the
Employment Commencement Date the date on which an Employee first performed an
hour of service for the subsidiary. However, if the Participant was an Employee
on January 1, 2003 and was employed by one of the following entities on the day
immediately preceding the date the Employee became employed by the subsidiary,
by A/C Power or by Trona Operating Partners, G.P. (or one of their
subsidiaries), the Employment Commencement Date shall be the date on which the
Employee first performed an hour of service for such entity (but in no event
prior to any date noted in parentheses below):
Malacha Power Project, Inc.
Sunnyside Operating Associates
Niagara Mohawk Power Corporation
Consolidated Edison Company of New York (but only if the Employee was hired
by COSI Astoria after August 20, 1999)
OESI Power (but only if the Employee was transferred to Constellation
Operating Services, Inc. or one of its subsidiaries from OESI Power on
January 6, 1993)
Kerr McGee Corporation—(but only if the Employee became an employee of
Constellation Operating Services, Inc., A/C Power, or Trona Operating Partners,
G.P. on December 1, 1990)
Ahlstrom Pyropower (or any other employer wholly or partially owned directly
or indirectly, by Ahlstrom Pyropower (or any successor thereto))
Ultrasystems, Inc.
Hadson Corporation
LG&E Power, Inc
LUZ International
U C Operating Services
Panther Creek Fuels Company
Nevada Operations, Inc.
Central Wayne County Sanitation Authority
U. S. Generating (COSI Carr Street)
Ormat Energy Systems, Inc.
Ormat Systems, Inc.
Baltimore Gas and Electric Company (or any other employer wholly or partially
owned directly or indirectly, by Baltimore Gas and Electric Company (or any
successor thereto)) A/C Power
For purposes of 2.1 and A-31, Vesting Service shall be used instead of
Credited Service to determine whether a Participant is eligible for Normal
Retirement.
For purposes of 2.2 and A-19, Vesting Service shall be used instead of
Credited Service to determine whether a Participant is eligible for Early
Retirement.
For purposes of 4.3, Credited Service shall only include months beginning on
or after January 1, 2003 during which an Employee works at least one hour for
the Employer while classified as a Full-Time Employee.
24
--------------------------------------------------------------------------------
Constellation NewEnergy, Inc5
5 Effective April 1, 2011. For purposes of Section 4.2, Vesting Service shall
be computed using as the Employment Commencement Date the date on which the
Employee first performed an hour of service for this subsidiary. For purposes of
Section 4.3, Credited Service for work performed as an Employee of this
subsidiary shall only include months beginning on or after April 1, 2011 during
which the Employee works at least one hour while classified as a Full-Time
Employee.
25
--------------------------------------------------------------------------------
CNE Gas Holdings, Inc.6
Exelon Business Services Corporation7
Exelon Generation Company, LLC8
6 Effective April 1, 2011. For purposes of Section 4.2, Vesting Service shall
be computed using as the Employment Commencement Date the date on which the
Employee first performed an hour of service for this subsidiary. For purposes of
Section 4.3, Credited Service for work performed as an Employee of this
subsidiary shall only include months beginning on or after April 1, 2011 during
which the Employee works at least one hour while classified as a Full-Time
Employee.
7 For Employees who were Employees of Constellation Energy Group, Inc.
immediately prior to the Effective Time.
8 For Employees who were Employees of Constellation Energy Group, Inc.
immediately prior to the Effective Time.
26 |
Case 7:21-cv-01028-AEK Document 12 Filed 04/06/21 Page 1 of 1
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
---------------------------------------------------------------x
Ana J. Martinez,
Plaintiff, 21 Civ. 1028 (AEK)
-against- ORDER
Andrew Saul,
Acting Commissioner of Social Security
Defendant.
--------------------------------------------------------------x
THE HONORABLE ANDREW E. KRAUSE, U.S.M.J.
On February 5, 2021, the Court filed its Standing Order, In Re: Motions for Judgment on
the Pleadings in Social Security Cases, pursuant to which Defendant is to file the certified
transcript of administrative proceedings within 90 days of being served with the complaint. ECF
No. 4. Because no proof of service has been filed by Plaintiff, the Court does not know when the
90-day period for filing the certified transcript expires. Accordingly, Plaintiff is directed to file
proof of service forthwith, and to notify the Court if the 90-day period has expired without
Defendant’s filing of the certified transcript.
Dated: April 6, 2021
White Plains, New York
SO ORDERED.
______________________________
ANDREW E. KRAUSE
United States Magistrate Judge
|
922 So. 2d 297 (2006)
Joe CORNETT, Appellant,
v.
STATE of Florida, Appellee.
No. 2D04-5061.
District Court of Appeal of Florida, Second District.
February 10, 2006.
*298 Joe W. Cornett, pro se.
Charles T. Crist, Jr., Attorney General, Tallahassee, and William I. Munsey, Assistant Attorney General, Tampa, for Appellee.
CANADY, Judge.
Joe Cornett appeals the denial of his motion for postconviction relief filed pursuant to Florida Rule of Criminal Procedure 3.850. Cornett claims that his counsel's advice concerning the availability of gain time was erroneous and that he is therefore entitled to relief from the guilty plea he entered in reliance on the erroneous advice. Because we conclude that Cornett was prejudiced by counsel's deficient performance, we reverse and remand for the trial court to allow Cornett an opportunity to withdraw his plea.
Background
In 1999, Cornett entered into a negotiated plea agreement with the State on ten counts, including several racketeering, organized fraud, and grand theft charges. He was sentenced to eight years in prison on the first three counts and forty-four months in prison on the remaining counts. All sentences were ordered to run concurrently. Cornett's convictions were affirmed on appeal in 2002. In 2003, Cornett filed his rule 3.850 motion. Cornett alleged that he entered his plea in reliance on trial counsel's advice that he would be eligible to receive twenty days of gain time per month on the first three counts based on the applicable gain time statute and therefore he would be eligible to serve only sixty-five percent of his sentences on those counts. However, Cornett realized upon reading Young v. Moore, 820 So. 2d 901 (Fla.2002), that the 1997 gain time statute applies to his sentences and that the statute requires him to serve a minimum of eighty-five percent of the time imposed on his sentences. Cornett requested that he be allowed to withdraw his plea.
The trial court held a hearing on this claim. The trial court heard testimony from Cornett, defense counsel, and the statewide prosecutor who prosecuted the offenses in 1999. The trial court found that counsel structured Cornett's eight-year sentences on the belief that Cornett would serve sixty-five percent of the time imposed on those sentences. The trial court acknowledged that counsel's understanding was erroneous but went on to conclude that counsel's "conduct and performance met the standard of performance."
Analysis
"[I]f a defendant enters a plea in reasonable reliance on his attorney's advice, which in turn was based on the attorney's honest mistake or misunderstanding, the defendant should be allowed to withdraw his plea." Trenary v. State, 453 So. 2d 1132, 1133-34 (Fla. 2d DCA 1984); see also State v. Leroux, 689 So. 2d 235, 237 (Fla.1996) (citing Trenary and recognizing that "a defendant may be entitled to withdraw a plea entered in reliance upon his attorney's mistaken advice about sentencing"); *299 Shell v. State, 501 So. 2d 1334, 1336 (Fla. 2d DCA 1987) (holding that "where [a defendant] is misled and induced to plead by his counsel's mistaken advice, then he may be allowed to withdraw his plea").
Cornett will serve at least eighty-five percent, rather than sixty-five percent, of his eight-year sentences. See Young, 820 So. 2d 901. In Young, the defendant engaged in a criminal fraud scheme between January 1991 and July 1996. Id. The offense was a true continuing offense. Id. at 903. The defendant was sentenced pursuant to the 1991 sentencing guidelines based on section 921.001(4)(b)(3), Florida Statutes (1997), which provided that "`[f]elonies . . . with continuing dates of enterprise shall be sentenced under the sentencing guidelines in effect on the beginning date of the criminal activity.'" Id. at 902 n. 1. However, his gain time was calculated according to the 1997 gain time statute, which applied to "sentences imposed for offenses committed on or after October 1, 1995." Id. The court concluded that the date the defendant committed the last acts "in furtherance of the scheme to defraud . . . should be considered the date the offense was finally consummated or committed." Id. at 903 n. 4. Therefore, the court held that the application of the 1997 gain time statute was proper because the true continuing offense was "committed" in 1996 and that different versions of the sentencing guidelines and gain time statutes can apply to a defendant's sentence. Id. at 902, 904.
Similarly, the 1997 gain time statute applies to Cornett's sentences on the first three counts because they were continuing offenses with the last acts committed in 1997. Therefore, they were "committed on or after October 1, 1995." § 944.275(4)(b)(3), Fla. Stat. (1997); Young, 820 hernandezrebecca@example.org. Even though counsel's advice to Cornett was based on counsel's honest misunderstanding of the gain time statutes, Cornett is entitled to withdraw his plea because he entered it in reliance on counsel's misadvice. The evidence at the hearing did not refute, and in fact supported, Cornett's claim that his counsel advised him that he would serve his sentences under the sixty-five percent rule. In addition, testimony that counsel or the statewide prosecutor advised Cornett that his award of gain time would be up to the Department of Corrections does not refute Cornett's claim that he was misadvised as to the gain time statute that would apply to him.
Because the first three counts were part of a negotiated settlement including all ten counts, the entire plea agreement was tainted by counsel's misadvice. Cornett is therefore entitled to withdraw his plea on all ten counts. See Quintana v. State, 917 So. 2d 991 (Fla. 3d DCA 2005) (holding that a defendant who is "allowed to withdraw his plea" must either "withdraw his plea to all charges or to none" when his plea to all charges was part of an agreement with the State); Whitaker v. State, 881 So. 2d 80 (Fla. 5th DCA 2004) (holding that a defendant who has successfully challenged his plea in one case should be allowed to withdraw his plea in a second case when both cases were part of one negotiated settlement of his charges).
Conclusion
Accordingly, we reverse the trial court's order. On remand, the trial court shall give Cornett the opportunity to withdraw his plea on all ten counts. If Cornett "decides to withdraw his plea and not be bound by the plea agreement, the State, too, will not be bound by the plea agreement." Goins v. State, 889 So. 2d 918, 919 (Fla. 2d DCA 2004). If Cornett "withdraws his plea, either side may pursue new *300 plea negotiations or refuse them and proceed to trial." Id.
Reversed and remanded.
NORTHCUTT and SALCINES, JJ., Concur.
|
Reversing.
L.B. Bean instituted an action for a new trial as is allowed by the provisions of section 518 of the Civil Code of Practice. There had been a suit against him, wherein the appellee was plaintiff, seeking to recover a strip of land, and, as a result of the trial, the land was awarded to appellee. Appellant, Bean, had filed an answer making defense, and there was a trial, as is shown by this record.
In his petition for a new trial appellant alleged that for more than fifteen months he had been in very bad health, and that during all of that time his physical condition had been such that his mind was impaired and so defective as to render it unbalanced and him incompetent, and that this condition prevailed at the time of the trial in the former action, and had prevailed for many months before the trial, even further back than the institution of the former suit. He alleged that in April before the trial of the former action in December he had been confined in a hospital where he underwent two major surgical operations, and that, because of his mental and physical condition, he had been unable to prepare his defense in the former suit, and that his mind was so impaired that he was unable to place his attorneys in possession of facts necessary to sustain his defense. Without going further into detail touching his allegations, it is sufficient to say, that, if they are true, he was not mentally competent to advise his attorney or to prepare his defense at any time during the pendency, or at the time of trial of the former action.
The chancellor sustained a demurrer to his petition, and he filed an amended petition copying therein the proceedings in the former trial, but the demurrer was sustained to the petition as amended. Counsel for appellee point out that, under section 518, Civil Code of Practice, it is necessary to make a part of the petition the record of the former trial. Section 520 Civil Code of Practice requires the petition to be verified, that the judgment in the former action be set forth, the grounds to vacate, or modify, it to be stated, and the defense to the action where the party applying for a new trial was a defendant in the former action. It is true that the record in the original case should be made a part of the petition for a new trial, but it is not absolutely required. Smith v. *Page 500
Chapman, 153 Ky. 70, 154 S.W. 915; Nicely v. Hickman, 188 Ky. 258, 221 S.W. 566. The petitioner must make it appear by his pleading that he is entitled to the relief sought, and that makes it necessary for him to bring to the attention of the court the record of the original action. But he is not required to produce and file with his petition the record in the original case, if his petition is made to show facts which will enable the court to know all about the original action that a copy of the record would disclose. Appellant referred to the former action in his petition, and recited that it was filed with it as an exhibit and made a part thereof. He appeared in court with a motion asking that the clerk be required to place the record in the original action with the petition for a new trial. He did not stop with these steps, but, in an amended petition, he literally copied therein the pleadings, orders, and judgment in the original action. The demurrer admitted the truth of all that he had well pleaded. He fully complied with the provisions of the Code requiring the court to be made acquainted with the record in the original case by the petition filed for a new trial. It is argued that he should have made the evidence heard on the former trial a part of his petition, but the evidence heard on that trial was not a part of the record.
It is urged by appellee that the petition did not set up any new defense that appellant could present to the court if he should be granted a new trial. An answer was filed by him, or for him, in the original action, and, if he was incapacitated to the extent that he alleges in his petition for a new trial, any defense would be a new defense, as he was in no position to rely upon the defense alleged in the original action. But the petition for a new trial alleges matter not found in the answer to the original petition. He sufficiently set up in his petition for a new trial the defense which he had to the original suit.
It is contended by counsel for appellee that appellant had a complete remedy by appeal, if any injustice had been done him by the judgment in the former action, and it is argued that there can be no remedy sought under the provisions of section 518, Civil Code of Practice, if there is a remedy available by appeal. Probably that is a correct statement of the law. At least it was so written in Smith v. Patterson, 213 Ky. 142,270 S.W. 930. But that opinion points out that the errors leading to an erroneous judgment were apparent on the record, *Page 501
and could be reached by an appeal. Such is not the case before us. There is no way that appellant could obtain relief by appeal. The record did not show that he was mentally incompetent to make defense at the time of the former trial.
It is suggested by counsel for appellee that the trial court has a wide discretion in granting or refusing a new trial. That is true. Mosely v. Morgan, 199 Ky. 845, 252 S.W. 117; Clark v. Pullman Co., 205 Ky. 336, 265 S.W. 820. The trouble with appellee is that he does not have a case to fit that rule. The court refused to hear the matter on its merits. A demurrer was sustained to the petition. It may be that all the reasons urged against the granting of a new trial by counsel for appellee are sound and available, but they were not before the court. The court could not have determined whether appellant was so mentally incapable of looking after affairs that he was unable to present his defense in the former action, as he decided by sustaining the demurrer that such a condition of the appellant, if true, would not authorize the granting of a new trial. There ought to be no disagreement over the proposition that every litigant should be entitled to a fair hearing when he is brought into court, and, if his mind is so unsound that he does not know what is going on, few, if any, would contend that he had a fair hearing. It may be insisted that his attorneys should have protected him, but he may have been in such a condition that he could not advise his attorneys about his mental condition, and his attorneys may not have known about it, and it may not have been presented to the court. Again, he may have no reasonable grounds for making the allegations which are found in his petition, but he alleged enough to entitle him to a hearing on the questions presented.
Judgment reversed, and cause remanded, with directions to overrule the demurrer to the petition as amended. |
226 F.2d 687
Irving M. LESCH & Ira Haupt, Udo M. Reinach, Anthony Reinach, Samuel E. Worms, Bertrand M. Goldsmith, Martin Scherk & Townsend E. Allen, doing business in the name of Ira Haupt & Company, Plaintiffs-Appellants,v.CHICAGO & EASTERN ILLINOIS RAILROAD COMPANY, Defendant-Appellee.
No. 11340.
United States Court of Appeals Seventh Circuit.
October 21, 1955.
Irving M. Lesch, Brooklyn, N. Y., Benjamin G. Cox, Gambill, Dudley, Cox, Phillips & Gambill, Terre Haute, Ind., for appellants.
William P. Evans, Indianapolis, Ind., John T. Hays, Sullivan, Ind., David O. Mathews, Chicago, Ill., Frank F. Vesper, Washington, D. C., William M. Evans, Hays & Hays, Indianapolis, Ind., for appellee.
Before MAJOR and FINNEGAN, Circuit Judges, and PLATT, District Judge.
MAJOR, Circuit Judge.
1
This action, predicated upon Section 4a of Chapter 101, Indiana Acts of 1933, as added by Chapter 65 of the Acts of 1939, Burns' Ind.Stat.Ann.1951 Replacement, § 55-223a, hereinafter called the appraisal statute, was filed July 11, 1952, in the Circuit Court of Sullivan County, Indiana, and removed on motion of defendant to the United States District Court for the Southern District of Indiana. The complaint alleged that the plaintiff Lesch was the beneficial, and Ira Haupt & Company the registered, owner of 1,000 shares of Class A preferred stock of the defendant corporation. (All individuals named in the caption other than Lesch are partners doing business in the name of Ira Haupt & Company.) The complaint further alleged that at an annual meeting of the stockholders of the defendant corporation, held on May 9, 1952, a proposal to amend the certificate of incorporation was adopted "to authorize and empower the Board of Directors to pay, discharge and satisfy $2.00 of the dividends accrued on the Class A stock as of January 1, 1952, by declaring a dividend of $2.00, payable by the issuance of common stock of the Company"; that plaintiffs voted against the amendment and within thirty days after its adoption objected in writing and demanded payment of the fair value of plaintiffs' shares for the reason "that the amendment is of such nature that its adoption without his consent and without giving him a remedy would unconstitutionally deprive him of his rights," and that the parties did not agree on the value of plaintiffs' shares of Class A stock within thirty days after the effective date of the amendment and within ninety days thereafter this suit was commenced.
2
The relief sought was the appointment by the court of an appraiser to determine the value of said shares of Class A stock and payment of the value as so determined. There was attached to the complaint Exhibit A, which was a notice, issued April 8, 1952, by defendant to its stockholders, calling for a meeting on May 9, 1952, at which the amendment under attack was adopted. There was also attached to the complaint Exhibit B, copy of a notice of written objection and demand signed by Ira Haupt & Company, dated May 15, 1952, which was served upon the defendant.
3
Defendant raised no factual issue either in its answer or subsequently, but disputed the legal consequences which Lesch claimed resulted therefrom. Both sides moved for a summary judgment, with affidavits in support thereof. Defendant's motion was filed May 4, 1954, and plaintiffs' motion, June 18 of the same year. The court, on October 7, 1954, denied plaintiffs' motion and at the same time sustained defendant's motion, and entered judgment accordingly. From this judgment the appeal comes to this court.
4
It is evident from the fact that both parties moved for a summary judgment in connection with the concessions made in this court that no material issue of fact is in dispute and that the case may be properly disposed of by summary judgment. The question, therefore, is whether the court erred in entering such a judgment for the defendant rather than for the plaintiffs.
5
We discern no plausible escape from setting forth the lengthy statutory provision upon which plaintiffs rely, but prior to doing so some further statement of facts perhaps should be made. As already noted, Lesch was the beneficial owner of 1,000 shares of defendant's Class A preferred stock of which Ira Haupt & Company was the registered owner and holder of the certificates therefor. This stock had never been registered in the name of Lesch. It represented an infinitesimal part of defendant's outstanding stock which consisted of 383,267.25 shares of Class A preferred stock and 367,560.40 shares of common stock. While Ira Haupt & Company, a brokerage firm (as well as the individual partners thereof), was named in the caption of the complaint as parties-plaintiffs, the fact is that the complaint was filed by Lesch, without the consent, approval or even the knowledge of Ira Haupt & Company or any of its partners. Mr. Worms (a partner of Ira Haupt & Company) testified on March 25, 1953 that Lesch had not been authorized by Ira Haupt & Company or by any of its partners to commence the action or to name it as a party-plaintiff. He also testified that knowledge that Ira Haupt & Company had been made a party-plaintiff was first acquired on the date of his testimony (March 25, 1953). There was, however, filed with plaintiffs' motion for summary judgment an affidavit executed by two of the partners of Ira Haupt & Company in which it was stated, "Plaintiff Lesch never requested Ira Haupt & Company to join as plaintiffs in his action against the defendant Railroad," but that since March 25, 1953, Ira Haupt & Company had ratified the action of Lesch in joining it as a party-plaintiff, which ratification was stated to be in consideration of Lesch having indemnified it for all costs and expenses in connection with the action.
6
One of the serious questions arising from the situation as related is whether Lesch as the beneficial owner of the stock was entitled to the benefit of the appraisal statute. A closely related question is whether the ratification by Ira Haupt & Company subsequent to March 25, 1953 should be given a retroactive effect and thereby the status of a proper party from the time the action was commenced. If not, is Ira Haupt & Company barred from maintaining the action by reason of the limitation period provided by the appraisal statute?
Section 55-223a provides as follows:
7
"If any shareholder of any such corporation who did not vote in favor of such amendment at the meeting at which the amendment was adopted by the shareholders of such corporation, shall, at any time within thirty (30) days after such adoption of the amendment by such shareholders, object thereto in writing and demand payment of the value of his shares, the corporation shall, in the event that the amendment shall be made effective, and in the event that the amendment is of such a nature that its adoption without his consent and without giving him a remedy would unconstitutionally deprive him of rights, pay to such shareholder, upon surrender of his certificates therefor, the value of such shares at the effective date of the amendment, which shall be the date the certificate required in section 4 [§ 55-223] shall be filed in the office of the secretary of state. If within thirty (30) days after such effective date the value of such shares is agreed upon between the shareholder and the corporation, as the case may be, payment therefor shall be made within ninety (90) days after the effective date. If, within thirty (30) days after such effective date, the corporation and the shareholder do not so agree, either such corporation or the shareholder may, within ninety (90) days after such effective date, petition the circuit or superior court of the county in which the principal office of the corporation is located, to appraise the value of such shares; and payment of the appraised value thereof shall be made within sixty (60) days after the entry of the judgment or order finding such appraised value. * * *
8
"Upon the effective date of the amendment any shareholder who has made such objection and demand shall cease to be a shareholder and shall have no rights with respect to such shares except the right to receive payment therefor. Every shareholder who did not vote in favor of such amendment and who does not object in writing and demand payment of the value of his shares at the time and in the manner aforesaid, shall be conclusively presumed to have assented to such amendment, if he do not within six (6) months thereafter, in a court of competent jurisdiction, question such action. * * *"
9
In summary, this provision is applicable only to a shareholder who did not vote in favor of the amendment and who within thirty days after its adoption objects thereto in writing and demands payment of the value of his shares. The right to receive payment, however, arises only "in the event that the amendment is of such a nature that its adoption without his consent and without giving him a remedy would unconstitutionally deprive him of rights," and then only "upon surrender of his certificates." When these contingencies are met, a thirty-day period is provided for agreement as to the value of the shares, with payment to be made in ninety days, and in case no agreement is reached within the thirty-day period the shareholder has ninety days within which to petition the appropriate court for an appraisal of the value of his shares.
10
Any shareholder who did not vote in favor of the amendment and who did not object in writing and demand payment of the value of his shares, as previously provided, is conclusively presumed to have assented thereto unless such action is questioned in a court of competent jurisdiction within six months from the effective date of the amendment.
11
While the instant action was commenced within ninety days after the effective date of the amendment (May 9, 1952, when it was filed in the office of the Secretary of State), in the names of both Lesch and Ira Haupt & Company as plaintiffs, the latter, as shown, was named as plaintiff by Lesch without authority and without knowledge on its part. In fact, Ira Haupt & Company repudiated the use of its name as a party-plaintiff. The question, therefore, is whether Lesch as the beneficial owner of the stock was entitled to institute and maintain this action. While this question, so far as we are aware, has not been passed upon by an Indiana court, we are of the view that an analysis of the appraisal statute in connection with the law generally as to who constitutes a shareholder of a corporation requires a negative answer.
12
There can be no doubt but that only a registered shareholder is entitled to participate in the affairs of the corporation. Both defendant's certificate of incorporation and by-laws so provide. For instance, the latter provides, "Each stockholder, without distinction as to class, shall be entitled to one vote in person or by proxy for each share of stock standing in his name on the books of the Company * * *." Section 25-703, Burns' Ind.Stat. of 1948, provides that nothing shall be construed as forbidding a corporation to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner. A study of the appraisal statute leads to the definite conclusion that the word "shareholder" was employed in its ordinary and usual sense, and included only the registered owner of stock. While the complaint alleged that plaintiffs voted against adoption of the amendment, it is now conceded that the stock in question was not voted either for or against its adoption. That Lesch as the beneficial owner was without right to participate in a stockholders' meeting and vote upon the amendment is conceded. However, it is argued that this is not essential because, after all, he did not vote in favor of the amendment. The same argument, of course, could be made in favor of any stranger to the corporation.
13
A shareholder "who did not vote in favor of such amendment" clearly contemplates one who had a right to vote but did not do so. The statute refers to the adoption of the amendment "without his consent", which could only mean the registered owner because a beneficial owner would have no right either to consent to or oppose an amendment so as to be binding upon the corporation. Moreover, the shareholder who objects to the amendment within thirty days after its adoption, upon the grounds stated in the statute, is entitled to payment only "upon surrender of his certificates". The certificates, however, are in the possession and control of the registered owner and obviously could not be surrendered by a beneficial owner.
14
Lesch's argument that the surrender of the certificate requirement was intended to apply only after the entry of an appraisal judgment is, we think, without merit. The statute appears to contemplate that the corporation and the shareholder shall upon an appropriate objection by the latter attempt to agree upon the value of the shares and, if an agreement is reached, the corporation shall pay to the shareholder such value "upon surrender of his certificates". There would be no reason, however, for the corporation attempting to reach an agreement with a person who was not in a position to make the required surrender of the stock certificate. An agreement under such circumstances would be an idle and useless formality. It is only after a failure to reach such an agreement that the statute authorizes a suit for appraisal of the stock. Even on plaintiffs' theory, a judgment of appraisal in favor of a party, such as Lesch, who was not in a position to make such surrender would be of no effect. In fact, we think the complaint filed by Lesch was fatally defective for failure to allege either that he or any person on his behalf had offered to surrender the certificates of stock or that he was prepared to do so.
15
It is, therefore, our conclusion and we so hold that only a registered shareholder is entitled to rely upon the appraisal statute. It follows that Lesch as the beneficial owner was not a party entitled to commence or maintain the action. Even so, however, some confusion is engendered because of the position occupied by Ira Haupt & Company, the registered owner of the shares. As shown, that company and its partners were named by Lesch as parties-plaintiffs without their consent or knowledge, and it was not until March 25, 1953 that they were informed of Lesch's action in this respect. It is argued by Lesch, however, that the so-called ratification on June 18, 1954 was retroactive to the date of the commencement of the action, in other words, that Ira Haupt & Company should be treated as though it had been a party to the suit from the beginning. With this contention we do not agree. It is true, of course, that Ira Haupt & Company at the request of Lesch, on May 17, 1952, as the registered holder of the stock, filed with the defendant a written objection to the amendment in controversy and demanded payment of the value of the shares upon surrender of the certificates therefor. It not only failed, however, to institute an action under the appraisal statute but expressly disclaimed any authority or right on the part of Lesch to do so on its behalf.
16
As noted, the controversial amendment became effective May 9, 1952, when it was filed with the Secretary of State, and a written objection to the amendment and a demand for payment of the stock in controversy, signed by Ira Haupt & Company, was filed with the defendant by Lesch. Upon failure of agreement as to the value of the stock, the statute provides that the shareholder may within ninety days after the effective date of the amendment institute a court action. Within that time the complaint was filed by Lesch but without the authority and consent of Ira Haupt & Company. The situation insofar as it related to parties-plaintiffs was not altered prior to the expiration of the ninety-day period; in fact, the situation remained in status quo until June 18, 1954, when Lesch made his motion for summary judgment. (This was after a similar motion had been made by defendant.) This motion was not joined in by Ira Haupt & Company but was made by Lesch in his individual capacity. There was filed, however, in support of Lesch's motion an affidavit by certain of the partners of Ira Haupt & Company. In this affidavit it is stated among other things that "Plaintiff Lesch never requested Ira Haupt & Company to join as plaintiffs in his action against the defendant Railroad." The affidavit also stated, "In consideration of plaintiff Lesch, having indemnified Ira Haupt & Company from all costs and expenses as may be involved for having been joined as a coplaintiff in the above captioned action, Ira Haupt & Company * * * has ratified the joining of Ira Haupt & Company and the partners thereof as coplaintiffs in the above captioned action and have authorized the attorneys for plaintiff Lesch, to appear in said action in their behalf * * *."
17
Thus, this attempted ratification by Ira Haupt & Company, made on June 18, 1954, was more than two years after the effective date of the amendment (May 9, 1952) and approximately a year and ten months after the expiration of the time for the commencement of an action. The statute provides, "Every shareholder * * * shall be conclusively presumed to have assented to such amendment, if he do not within six (6) months thereafter, in a court of competent jurisdiction, question such action." It cannot be open to question but that Ira Haupt & Company, on June 18, 1954 and long previously thereto, was barred from bringing a court action and was conclusively presumed to have assented to the amendment.
18
Lesch attempts to escape the devastating effect which flows from this situation by reiterating his argument that after all he was the real party in interest and Ira Haupt & Company was not a necessary party to the action. Cases are cited wherein the courts have permitted the bringing of an action in the name of the beneficial or equitable owner as the real party in interest. Such cases, however, are not in point because, as we have previously noted, the statute confers a right of action on the registered and not the beneficial owner of the stock. Also as previously noted, a surrender of the certificates was a prerequisite to the right to institute an action, which Lesch made no offer to do and insofar as this record discloses could not have done.
19
Furthermore, Lesch in order to escape the six months' limitation period which had run against Ira Haupt & Company argues that the latter's ratification on June 18, 1954 of Lesch's unauthorized act in naming it a party-plaintiff should be treated and considered as having been made at the time of the commencement of the action. No case is cited and we know of none which supports this argument. Defendant calls our attention to Mozingo v. Ross, 150 Ind. 688, 692, 50 N.E. 867, 41 L.R.A. 612; Meitzler v. Todd, 12 Ind.App. 381, 382, 39 N.E. 1046, and other cases which it is claimed by analogy refute the contention. In the two Indiana cases it was held that payment by one of two joint debtors did not constitute a waiver by the other of the statute of limitations without his consent. The reasoning appears to be that the defense of the statute of limitations constituted a vested right which could not be impaired without the consent of the person in whose favor it existed.
20
It is obvious that defendant could have successfully invoked the limitation defense against any action which might have been commenced by Ira Haupt & Company on the date which it ratified the previous unauthorized act of Lesch. In fact, Ira Haupt & Company at that time was "conclusively presumed to have assented to such amendment." In our view, nothing was done or could have been done at that late date by Ira Haupt & Company without defendant's consent which would have altered either its rights or those of the defendant as fixed by the statute. The statutory period in which Ira Haupt & Company could have brought an action had long before expired. Conversely, defendant's right to rely on the limitation defense as a bar to an action by Ira Haupt & Company had become vested.
21
In conclusion, we hold that Lesch was not entitled under the appraisal statute to the relief sought and that Ira Haupt & Company was barred from maintaining the action by reason of the limitation period therein provided. We find it unnecessary to discuss other issues which have been argued before this court.
The judgment is
22
Affirmed.
|
People v King (2019 NY Slip Op 03079)
People v King
2019 NY Slip Op 03079
Decided on April 24, 2019
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on April 24, 2019
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Second Judicial Department
REINALDO E. RIVERA, J.P.
RUTH C. BALKIN
LEONARD B. AUSTIN
ROBERT J. MILLER, JJ.
2013-11051
(Ind. No. 53/06)
[*1]The People of the State of New York, respondent,
vLeaman King, appellant.
Paul Skip Laisure, New York, NY (Cynthia Colt of counsel), for appellant.
Richard A. Brown, District Attorney, Kew Gardens, NY (John M. Castellano, Johnnette Traill, and Kathryn E. Mullen of counsel), for respondent.
DECISION & ORDER
Appeal by the defendant from a judgment of the Supreme Court, Queens County (Deborah S. Modica, J.), rendered November 19, 2013, convicting him of rape in the first degree (two counts), criminal sexual act in the first degree (two counts), kidnapping in the second degree (two counts), criminal possession of a weapon in the second degree (two counts), and criminal possession of a weapon in the third degree (two counts), upon a jury verdict, and imposing sentence.
ORDERED that the judgment is affirmed.
Contrary to the defendant's contention, the Supreme Court did not improvidently exercise its discretion in declining to, sua sponte, order an eighth competency examination (see CPL 730.30[1]). "The court was entitled to give weight to the findings and conclusions of the defendant's most recent competency examination, which found him fit to proceed, and to its own observations of the defendant" (People v Soto, 23 AD3d 586, 586; see People v Gensler, 72 NY2d 239, 244; People v Walker, 53 AD3d 672, 672; People v Barnes, 24 AD3d 248, 249; People v Greco, 177 AD2d 648, 648).
The sentence imposed was not excessive (see People v Suitte, 90 AD2d 80).
RIVERA, J.P., BALKIN, AUSTIN and MILLER, JJ., concur.
ENTER:
Aprilanne Agostino
Clerk of the Court
|
Case 19-24331-PDR Doc118 Filed 05/03/21 Pagelof5
Revised Ralph L. Sanders Case 19-bk-24331-PDR
Objection to Mr. Stewart's motion to remove my home from Stay Protection
Dear Honorable Judge Peter D. Russin
UNITED STATES BANKRUPTCY COURT
United States Courthouse 299 E. Broward Bivd.
Courtroom: 301 / Chambers: Room 303
Fort Lauderdale, FL 33301
Bankruptcy Case 19-bk-24331-PDR Date: April 30, 2021
Your Honor
Small Business Administration was surprised when one of their
clients called them to out if they use Title Insurance on their loans such as
mine. Mr. Stewart's proposal to remove my home from Bankruptcy
protection does not help anyone, including his firm. After | found the Title
Insurance for the amounts of $292,000, my home, and $313,000 for Mr.
Stewart, the path and schedule became considerably shorter to pay off my
creditors and build a new home for the future family living here by using the
proceeds from the homeowners' insurance.
Case id 19-bk-24331-PDR Page 1 of 5 ih X
HM
Case 19-24331-PDR Doc118 Filed 05/03/21 Page2of5
Revised Ralph L. Sanders Case 19-bk-24331-PDR
The time window to get the homeowner insurance proceeds is running
close, to being closed.
The logic that is being used to evict someone seems. appeal
Knowledge of Falsity
The specific act that constitutes the crime of perjury is not the false statement itself but rather the
oath or affirmation that the statement is true.
Most perjury statutes require proof that a person acted with knowledge of the falsity of the
statement. The federal statute requires that a person acted "willfully," while Ohio's statute says the
person must have acted "knowingly." Defendants may claim that they believed the statement to be
true and that they, therefore, did not have the required mental state.
Even Mr. Stewart, a creditor, is suggesting staying until May 31, 2021. |
have until May 31, 2021, to come up with the money per creditor.
e What is the payoff that BNYM 's willing to accent? 1o-24031 Loan iD totsa$a4z4
Not licensed to practice Jaw
The following attorney has joined in to help guide me to attorneys.
Case id 19-bk-24331-PDR Page 2 of 5
At
Case 19-24331-PDR
Revised
4B, PA. Charles M. Baron
C ol
Re: Any upcate from Mr, Roher
ad Dp Charles M. Baron, PA.
Doc 118 Filed 05/03/21 Page 3of5
Ralph L. Sanders Case 19-bk-24331-PDR
The following will be in your court on Monday. Another new lanague to
learn about.
MOTION FOR VIOLATION OF AUTOMATIC STAY
AND FOR CREDITOR(S) MISCONDUCT
Comes now the Debtor Ralph L Sanders at this moment files this
Motion of Violation of Automatic Stay, Creditors Misconduct
1. Plaintiff filed his Chapter 13 case on Date filed: 10/25/2019 :
(Doc # 1) Plan confirmed: 05/21/2020 (Doc # 75)
Case id 19-bk-24331-PDR Page 3 of f
Case 19-24331-PDR Doc118 Filed 05/03/21 Page4of5
Revised Ralph L. Sanders Case 19-bk-24331-PDR
2 The real property at issue in this motion is located at 561 SW
AVE., Plantation, Fl. 33317
3. May of 2004 the planitiff purchased a home at 561 SW 60th
Ave., Plantation, Fl. 33317 with Chase mortgage, the closing
statement had a Buyers Title Insurance which is design to protect me
and my family against any defects with our home that may be
uncovered in the fair house defects include anywhere from title
unknown leans to physical defects that can be seen with a survey.
The buyers title insurance protects the home up to the value of the
mortgage which in my case was $292,000.
4. April 2005 the Debtor refinanced his home with Wells Fargo
The mortgage contract stated that | had purchased Lenders Title
Insurance for the protection of Wells Fargo issues. | am the owner of
the Lenders Title Insurance policy. The payout of the Lenders Title
Insurance is $313,000
5. Both the the buyers title insurance policy and the lenders title
insurance policy cover the same areas of damages depending on the
policy options.
6. Both Title Insurance Policies were purchased by the Debtor
7. Both Title Insurance Policies are the property of the Debtor
Case id 19-bk-24331-PDR Page 40f5
Ad
Case 19-24331-PDR Doc118 Filed 05/03/21 Page5of5
Revised Ralph L. Sanders Case 19-bk-24331-PDR
oe —_ fi
HRERKERERKYRERKEERERERREREHEERRKE HRARFKRAJRKKERERKERERERERE ERE REEERERERIRE
PRO SE
Ralph Levi Sanders
561 SW 60" ave
Case id 19-bk-24331-PDR Page 5 of 5 ft "
|
The Honorable Barbara King State Representative 106 Tulip Circle Helena, AR 72342
Dear Representative King:
I am writing in response to your request for an opinion onAct 435 of 2003. You have presented the following question regarding this appropriation act:
In sections 1 (A) and 1 (B) of Act 435 of 2003, appropriations are made to the City of Lakeview, Arkansas, specifically for `repair of roads,' `equipping the ballpark,' and `for other purposes.' Does this language restrict the expenditure of these funds or can the City of Lakeview spend the funds on any program or project administered by the city?
RESPONSE
It is my opinion that the "other purposes" for which the funds may be used are limited to those having a direct connection with the enumerated purposes, i.e., "repair of roads" or "equipping the ballpark." In response to your question, therefore, it is my opinion that the language does restrict the expenditure of these funds.
The act appropriates the sum of $35,000 from the State General Improvement Fund for the City of Lakeview, Arkansas "for repair of roads and other purposes," and it separately appropriates $35,000 for the City "for costs associated with equipping the ballpark and other purposes." Acts 2003, No. 435, § 1. Your question requires interpretation of the phrase "for other purposes." In my opinion, this language does not mean that the City can use the funds for any program or project administered by the City. This conclusion follows, in my opinion, from the established principle of interpretation known as noscitur a socii. Literally, the doctrine means "it is known from its associates." As practically applied, it means that a term may be defined by an accompanying word or by the context of the law. See McKinney v. Robbins, 319 Ark. 596,892 S.W.2d 502 (1995); Weldon v. Southwestern Bell Telephone Co.,271 Ark. 145, 607 S.W.2d 395
(1980); McDonald v. Bowen, 250 Ark. 1049, 468 S.W.2d 765
(1971).
In McDonald v. Bowen, the doctrine was invoked to interpret the phrase "other public purposes" as used in a constitutional amendment for financing industrial development. Amendment 18 to the Arkansas Constitution authorizes the use of a special tax by certain cities for,inter alia, "the purpose of securing the location of factories, industries, river transportation and facilities therefor within and adjacent to such cities or other public purposes, exclusive of charities. . . ." (Emphasis added). McDonald involved a bond issue to finance various proposals, including streets, drainage facilities, fire stations, parking and recreation facilities. The court held that the proposals did not fall within the scope of Amendment 18, noting that they did not limit expenditures to projects having a "direct connection with the factories, industries, etc., that are the primary subject of the Amendment," and further stating:
Here the appellees introduced witnesses who testified in general terms that business men and corporations are apt to be favorably impressed, in seeking a location for a new plant or the like, by a city which has well-paved streets, adequate storm drainage facilities, sufficient fire stations, and so on. The fact remains, however, that nothing in the petition requires any direct connection between the proposed capital improvements and the new industries. It would be entirely permissible for the city to spend all or any part of the bond proceeds for the improvement of streets in residential areas or for other improvements having only a remote bearing upon the attraction of new industries.
250 Ark. at 1054 (emphasis added).
The court refused to interpret the phrase "other public purposes" as broadening the scope of Amendment 18 so as to encompass the proposals, holding that the phrase "was not an open-ended authorization of unlimited scope." Id. 1055. In limiting the scope of the phrase, the court said: "We are unwilling to lift the words, `other public purposes,' from their context and take them to mean absolutely any conceivable public purpose, regardless of its connection with the rest of the Amendment." Id. The court instead applied the rule of noscitur a sociis and construed the general language in Amendment 18 as comparable to the specific language of its context, which had to do with the attraction of new industry.
Applying this principle in interpreting the language in question, I conclude that the context of the appropriation act limits the words "other purposes" to projects that directly bear upon the expressed purposes, i.e., "repair of roads" and "equipping the ballpark." I cannot opine further regarding any particular use of the funds other than to note that the purpose must, to borrow language from McDonald, have a "direct connection with the . . . primary subject[s]" of the appropriation.
Assistant Attorney General Elisabeth A. Walker prepared the foregoing opinion, which I hereby approve.
Sincerely,
MIKE BEEBE Attorney General
MB:EAW/cyh |
Case: 16-41380 Document: 00514122676 Page: 1 Date Filed: 08/18/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 16-41380
Conference Calendar
United States Court of Appeals
Fifth Circuit
FILED
August 18, 2017
UNITED STATES OF AMERICA,
Lyle W. Cayce
Clerk
Plaintiff-Appellee
v.
NAUM OSMARY MEDINA-RAMOS,
Defendant-Appellant
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 5:16-CR-108-1
Before JOLLY, HIGGINBOTHAM, and ELROD, Circuit Judges.
PER CURIAM: *
The Federal Public Defender appointed to represent Naum Osmary
Medina-Ramos has moved for leave to withdraw and has filed a brief in
accordance with Anders v. California, 386 U.S. 738 (1967), and United States
v. Flores, 632 F.3d 229 (5th Cir. 2011). Medina-Ramos has not filed a response.
We have reviewed counsel’s brief and the relevant portions of the record
reflected therein. We concur with counsel’s assessment that the appeal
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 16-41380 Document: 00514122676 Page: 2 Date Filed: 08/18/2017
No. 16-41380
presents no nonfrivolous issue for appellate review. Accordingly, counsel’s
motion for leave to withdraw is GRANTED, counsel is excused from further
responsibilities herein, and the APPEAL IS DISMISSED. See 5TH CIR. R. 42.2.
2
|
Exhibit 10.1
(EZCORP LOGO) [d66047d6604701.gif]
Employment and Compensation Agreement
PURPOSE
This document sets forth the terms of an agreement (the Agreement) between
EZCORP, Inc. (the Company) and Joseph L. Rotunda. Its purpose is to confirm the
terms of employment and compensation of Mr. Rotunda and to further the interests
of the Company and its shareholders by encouraging Mr. Rotunda:
1. To remain with the Company and continue to lead its growth plans for the
foreseeable future. 2. To assist in the development and implementation of
a comprehensive senior executive succession plan in order to insure continued
strong leadership for the Company. 3. To continue to serve the Company and
its shareholders, following retirement, in an active consulting capacity.
This Agreement supersedes all prior employment and compensation agreements
between the parties except for the two Restricted Stock Award agreements between
the Company and Mr. Rotunda, dated January 15, 2004 and October 2, 2006, the
terms and conditions of which shall remain in force without modification.
TERM OF THE AGREEMENT
This Agreement will be effective for the period January 1, 2009, through
October 8, 2010. At the end of this initial term, the Agreement may be extended
for additional periods of 12 months by mutual consent of both parties. Each
party will provide the other with 12 months advance notice of a desire and
intent to extend the original term of this Agreement.
GENERAL TERMS OF COMPENSATION
The parties agree and acknowledge that Mr. Rotunda’s employment is and will
continue to be solely with Texas EZPAWN, L.P., an affiliate of the Company, and
that he is not an employee of EZCORP, Inc. The Company agrees that it will cause
and direct Texas EZPAWN, L.P., as Mr. Rotunda’s employer, to comply and adhere
to the applicable provisions of this Agreement related to Mr. Rotunda’s
employment. Mr. Rotunda’s title will continue to be President and Chief
Executive Officer of EZCORP, Inc., and he will continue to report to the
Chairman of the Board of Directors.
For fiscal 2009, Mr. Rotunda’s base salary will be $975,000, paid in accordance
with the Company’s standard payroll practices. His salary will be reviewed and
considered for merit increases prior to the beginning of each fiscal year of
active employment; however, there is no guarantee that his base salary will
increase every year.
SBB /s/ SBB JLR /s/ JLR
--------------------------------------------------------------------------------
(EZCORP LOGO) [d66047d6604701.gif]
Mr. Rotunda will be eligible for a bonus in fiscal 2009 and each fiscal year of
active employment, subject to the terms of the Company’s then-current Incentive
Compensation Program. His Bonus Target amount for fiscal years 2009 and 2010
will be 150% of base salary. Mr. Rotunda’s individual award will be determined
by actual results achieved against previously established objectives. While it
is possible that he may fail to earn a bonus in any given year, it is also
possible for him to earn up to I50% of the Bonus Target amount for outstanding
performance.
Based upon his years of service, Mr. Rotunda will be eligible for 4 weeks paid
vacation and 5 paid personal days, annually. Unused vacation days and personal
days cannot be carried over from one year to another.
As President and Chief Executive Officer, Mr. Rotunda will continue to be
eligible for participation in all Company benefit programs, including medical,
dental, vision, life insurance, long-term disability insurance and accidental
death & disability insurance, in accordance with the applicable terms and
conditions of those respective plans. He will continue to be eligible for
participation in the Company’s 401(k) Plan, subject to that plan’s terms and
conditions, and he will be eligible to participate, at the highest level, in the
Company’s Executive Medical Supplement Plan and Supplemental Executive
Retirement Plan, in accordance with the terms and conditions of those plans.
POST-EMPLOYMENT ARRANGEMENTS
A. RESIGNATION FROM THE COMPANY
1. Voluntary Resignation or Retirement Prior to Expiration of this
Agreement: In the event of Mr. Rotunda’s voluntary resignation, or his
retirement from the Company, prior to the expiration of this Agreement, he will
receive his accrued base salary through the effective date of his resignation or
retirement. In addition, he will receive a sum equal to a prorated portion of
his current-year Bonus Target amount, payable as a lump sum within 30 days of
such resignation or retirement, and he will receive no other termination
benefits.
2. Resignation for Good Reason: Mr. Rotunda shall provide written notice to
the Company of the existence of a condition or reason he believes constitutes
Good Reason, as defined below. This written notice must be provided within 90
days of discovery of such condition or reason; it must also provide sufficient
detail to allow the Company an opportunity to respond and, if required, to cure
the specified condition or reason within 30 days of receiving such notice. If
the Company cures the condition, or if the reason does not constitute Good
Reason as defined below, Mr. Rotunda will withdraw his notice. For
purposes of this Agreement, “Good Reason” will be defined as any action, without
Mr. Rotunda’s written consent, which results in one or more of the following:
a) Material diminution of, or material change to, his job title; reporting
relationship, or responsibilities, authorities and duties from his current role
as President
SBB /s/ SBB JLR /s/ JLR
--------------------------------------------------------------------------------
(EZCORP LOGO) [d66047d6604701.gif]
and Chief Executive Officer of EZCORP. b) Reduction of his annual
base salary below $975,000. c) Removal of his principal work location from
the Austin metropolitan area to a municipality more than 50 miles distant from
Austin. d) Failure to re-elect him as a member of the EZCORP, Inc. Board
of Directors. e) A change of control as defined in the EZCORP, Inc. 2006
Incentive Plan, including any amendments to that plan. f) A requirement
that he perform an unlawful, dishonest or unethical act.
If the condition or reason cited by Mr. Rotunda, in fact, constitutes Good
Reason as defined above, and if the Company does not cure the specified
condition or reason within the 30 day notice period, Mr. Rotunda may resign and
the following compensation and benefits will be provided to him:
a) Continuation of his base salary through the effective date of his
resignation for Good Reason. b) Payment of a sum equal to a prorated
portion of his current-year Target Bonus amount, payable as a lump sum within
30 days of such resignation. c) Payment of an amount equal to one year of
his then-current base salary plus his most recent annual bonus award, payable as
a lump sum within 30 days of his resignation. d) Continuation of his
Company healthcare plan under COBRA and at the COBRA rate for a period of one
year, during which time the Company will reimburse him for COBRA costs,
including the gross-up of such payments for federal taxes.
B. TERMINATION BY THE COMPANY
1. Termination for Cause: In the event of a termination of Mr. Rotunda’s
employment by the Company for Cause, as defined below, he will receive his base
salary through the effective date of such termination, paid according to the
regular payroll schedule of the Company, and he will receive no other
termination benefits. The Company will provide Mr. Rotunda with written notice
of the existence of any reason it believes constitutes Cause within 90 days of
discovery of such reason. If the reason cited is such that Mr. Rotunda is able
to cure the Cause within 30 days, the Company will provide that period for cure
prior to any termination. For purposes of this Agreement, ''Cause” is
defined as any intentional and material misapplication of Company funds; any
material act of dishonesty; any conviction of a felony involving moral
turpitude; any conviction for the unlawful possession of a controlled substance;
any action involving willful and material malfeasance or gross negligence in the
performance of duties, or any on-going refusal to perform the lawful and
reasonable business directives of the Board of Directors. Unsatisfactory job
performance, without the existence of any of the other reasons set forth in this
paragraph, shall not constitute Cause under this Agreement.
SBB /s/ SBB JLR /s/ JLR
--------------------------------------------------------------------------------
(EZCORP LOGO) [d66047d6604701.gif]
2. Termination without Cause: In the event that Mr. Rotunda is terminated
without cause, he will receive the following compensation and benefits:
a) Continuation of his base salary through the effective date of his
termination without cause. b) Payment of a sum equal to a prorated portion
of his current-year Target Bonus amount, payable as a lump sum within 30 days of
such termination. c) Payment of an amount equal to three years of his
then-current base salary, plus an amount equal to his most recent annual bonus
award, payable as a lump sum within 30 days of his termination. d)
Continuation of his Company healthcare plan under COBRA and at the COBRA rate
for a period of one year, during which time the Company will reimburse him for
COBRA costs, including the gross-up of such payments for federal taxes.
C. TERMINATION DUE TO DEATH OR DISABILITY
1. Death: In the event of Mr. Rotunda’s death during his active employment
with the Company his employment will terminate immediately and the following
compensation and benefits will be paid:
a) Continuation of his base salary through the effective date of his
termination due to death. b) Payment to his estate of a sum equal to a
prorated portion of his current-year Target Bonus amount, payable as a lump sum
within 30 days of such termination. c) Payment to his estate of an amount
equal to one year of his then-current base salary plus his most recent annual
bonus award, payable as a lump sum within 30 days of his termination. d)
Continuation of coverage in the Company’s healthcare plan under COBRA and at the
COBRA rate for his spouse for a period of one year, during which time the
Company will reimburse her for COBRA costs, including the gross-up of such
payments for federal taxes.
2. Disability: During his active employment with the Company, should
Mr. Rotunda become totally disabled or unable to perform the essential functions
of his position (with reasonable accommodation) for a period of at least
6 months, the Company may elect to terminate his employment at any time
thereafter. If the Company elects to terminate his employment due to disability
and Mr. Rotunda is unable to fulfill the duties as outlined below in Section D.,
Mutually Agreed Retirement, he will receive the following compensation and
benefits:
SBB /s/ SBB JLR /s/ JLR
--------------------------------------------------------------------------------
(EZCORP LOGO) [d66047d6604701.gif]
a) Continuation of his base salary through the effective date of his
termination due to disability. b) Payment of a sum equal to a prorated
portion of his current-year Target Bonus amount, payable as a lump sum within
30 days of such termination. c) Payment of an amount equal to one year of
his then-current base salary plus his most recent annual bonus award, payable as
a lump sum within 30 days of his termination. d) Continuation of his
Company healthcare plan under COBRA and at the COBRA rate for a period of one
year, during which time the Company will reimburse him for COBRA costs,
including the gross-up of such payments for federal taxes.
D. MUTUALLY AGREED RETIREMENT Mr. Rotunda has the right to elect to
retire from the Company at any time in accordance with existing Company
policies. Nevertheless, it is in the best interests of the Company and its
shareholders to insure the establishment and effective implementation of a plan
for the seamless transition of a successor to Mr. Rotunda’s key position; to
encourage Mr. Rotunda’s co-operation and assistance with that plan, and to
promote Mr. Rotunda’s continued association with the Company after his
retirement. Therefore, this section of the Agreement defines an augmented
retirement plan and a future role for Mr. Rotunda with the Company. Accordingly,
if Mr. Rotunda remains with the Company for the full term of this Agreement (or
other such date as mutually agreed by the parties), he will receive the
following compensation and benefits:
a) Continuation of his base salary through the last day of his active
employment with the Company. b) Payment of an amount equal to one year of
his then-current base salary plus his most recent annual bonus award, payable as
a lump sum on January 7, 2011. c) Continuation of his Company healthcare
plan under COBRA and at the COBRA rate for a period of one year, during which
time the Company will reimburse him for COBRA costs, including the gross-up of
such payments for federal taxes. d) A consulting agreement to perform
business-related activities for the Company, consistent with his experience and
stature. Under this consulting agreement, Mr. Rotunda will be employed as an
independent contractor during an initial contract term of 5 years. The annual
fee for his services will be $500,000, payable in equal monthly installments. In
addition, the consulting agreement will provide for an annual bonus plan, based
upon achievement of specific, quantifiable objectives set by the Company, with a
target bonus range of 50% to 100% of the annual fee. The consulting arrangement
will also provide for reimbursement of reasonable business and travel expense,
including expense for an offsite office, furniture and administrative support.
After its initial term of 5 years, the consulting agreement may be extended for
additional 12 month periods by mutual
SBB /s/ SBB JLR /s/ JLR
--------------------------------------------------------------------------------
(EZCORP LOGO) [d66047d6604701.gif]
consent of both parties, and each party agrees to provide the other with a
minimum of 12 months advance notice of intent for such initial extension and 6
months advance notice of intent for any extensions thereafter. Should Mr.
Rotunda’s consulting arrangement with the Company be prematurely terminated by
his death or disability, a sum equal to one year of the annual consulting fee,
plus one year of the target bonus amount, will be paid to his estate.
NON-SOLICITATION, NON-COMPETITION AND NON-DISPARAGEMENT
The Company agrees to provide Mr. Rotunda with access to confidential
information during his employment under this Agreement. Confidential information
means information not generally known and proprietary to the Company or to a
third party for which the Company is performing work.
In exchange for being provided with access to this information, Mr. Rotunda
agrees that, except as specifically required in the performance of his duties
for the Company, he will not, during the course of his employment by or
consulting with the Company, and after termination of his employment by or
consulting with the Company, directly or indirectly use, disclose or disseminate
to any other person, organization or entity or otherwise employ any confidential
information. Mr. Rotunda agrees to deliver to the Company upon the cessation of
his employment or consulting, and at any other time upon the Company’s request,
all such confidential information and not retain any copies.
Given Mr. Rotunda’s position with the Company, if he engages in any business
which is directly or indirectly competitive with the Company in the pawn, payday
loan, secondhand sales, or similar types of business (“Competing Business”),
such action will inevitably result in the disclosure of confidential information
in violation of this Agreement. Mr. Rotunda therefore agrees that, for
consideration provided in this Agreement, while he is employed by or consulting
with the Company, and for a period of 24 months after the termination date of
such employment or consulting, he will not directly or indirectly be employed
by, have ownership in, consult with, serve as an advisor to or, in any way, be
associated with a Competing Business within the Restricted Territory, without
the written approval by the Board of Directors of EZCORP. The term “Restricted
Territory” for purposes of this Agreement shall mean those states or provinces
in which the Company is doing business, or has committed to do business, as of
the time of his termination of employment or consulting.
Mr. Rotunda further agrees that, for consideration provided in this Agreement,
while he is employed by or consulting with the Company, and for 24 months after
the termination date of such employment or consulting, he will not directly or
indirectly solicit, contact or call upon any customer or business contact of the
Company with whom he had business dealings while employed by, or consulting
with, the Company with the intent to entice them to reduce or stop doing
business with the Company or in any other way harm their business relationship
with the Company.
Mr. Rotunda further agrees that, for consideration provided in this Agreement,
while he is employed by or consulting with the Company, and for 24 months after
the termination date
SBB /s/ SBB JLR /s/ JLR
--------------------------------------------------------------------------------
(EZCORP LOGO) [d66047d6604701.gif]
of such employment or consulting, he will not recruit, hire or attempt to
recruit or hire, directly or by assisting others, any employee of the Company
with whom he had contact during his employment with the Company.
Mr. Rotunda agrees that the covenants contained in this Agreement are reasonable
and necessary to protect the Company’s legitimate business interests in its
Confidential Information and its relationships with customers and contacts.
Further, the Company’s
obligation to pay the separation payments and provide the separation benefits
outlined in the various sections of this Agreement are conditioned upon
compliance with all of the provisions in this section of the Agreement, as
written.
Any questions concerning the provisions of this Agreement will be settled using
Texas law. Good faith disputes or controversy arising under, or in connection
with, this Agreement will be settled by arbitration. If arbitration is
necessary, such proceeding shall be conducted by final and binding arbitration
before an independent arbitrator, selected in accordance with Texas laws and
under the administration of the American Arbitration Association. Mr. Rotunda
agrees that no particular tax consequences are represented or guaranteed by the
provisions of this agreement and that he has been advised to review this
agreement with his tax advisor and attorney.
The undersigned agree to this Employment and Compensation Agreement and the
individual terms herein.
/s/ Sterling B. Brinkley
Sterling B. Brinkley,
/s/ Joseph L. Rotunda
Joseph L. Rotunda,
Chairman of the Board
President & CEO
EZCORP
EZCORP
January 22, 2009
January 20, 2009
Date
Date
SBB /s/ SBB JLR /s/ JLR
|
193 F.2d 115
JONESv.UNITED STATES.
No. 4310.
United States Court of Appeals Tenth Circuit.
December 11, 1951.
Elmore A. Page, Tulsa, Okl., for appellant.
John S. Athens, Asst. U. S. Atty., Tulsa, Okl., (Whit Y. Mauzy, U. S. Atty., Tulsa, Okl., on the brief), for appellee.
Before HUXMAN, MURRAH and PICKETT, Circuit Judges.
HUXMAN, Circuit Judge.
1
An indictment containing two counts was returned against appellant in the United States District Court for the Northern District of Oklahoma, charging him with violating Title 26, U.S.C.A. § 2593(a).1 Both counts charged that appellant unlawfully acquired quantities of bulk marijuana by transfer, without having paid the transfer tax imposed thereon by Section 2590 (a). Trial was had to the court. He was found guilty on both counts and judgment of sentence was pronounced on him.
2
While appellant denied possession of the drugs, there was substantial evidence supporting a finding that they were in his possession in his room in Tulsa, Oklahoma. It is conceded that he did not have the order form for the possession of such drugs required by 26 U.S.C.A. § 2591. 26 U.S.C.A. § 2593(a) provides that failure, after reasonable notice and demand by the collector, to produce this order form "shall be presumptive evidence of guilt under this section and of liability for the tax imposed by section 2590(a)."
3
The sole contention made by appellant on this appeal is that the statutory presumption of guilt attaching from the possession of the drugs does not carry with it a presumption that the crime was committed within the jurisdiction of the United States District Court for the Northern District of Oklahoma and that, before a conviction may be had thereunder, the Government must prove as an essential element the place and venue of the offense. The cases of De Bellis v. United States, 22 F.2d 948, by the Seventh Circuit, and Brightman v. United States, 7 F.2d 532, Graham v. United States, 15 F.2d 740, Cain v. United States, 12 F.2d 580 and Donaldson v. United States, 23 F.2d 178, all by the Eighth Circuit, sustain this contention.
4
We, however, think that the weight of authority as well as the better reasoning is to the contrary. The cases set out in Footnote 2 all hold that the statutory prima facie evidence clause covers both the fact of unlawful purchase as well as the place of purchase.2 Casey v. United States, 9 Cir., 20 F.2d 752, was reviewed by the Supreme Court of the United States in 276 U.S. 413, 48 S. Ct. 373, 72 L. Ed. 632 and was affirmed. While the decision is not clear cut as to the precise question, we think it warrants the conclusion that the Supreme Court approved the reasoning of the Casey case. It is also of note that the decision of the Supreme Court in the Casey case was handed down four months after the decision in the Donaldson case, the last case on which appellant relies and that, since the decision of the Supreme Court, no decision has followed the earlier holdings by the Seventh and Eighth Circuits. We accordingly conclude that the statutory presumption applies as well to the place of the commission of the offense as to the commission thereof.
5
Affirmed.
Notes:
1
"§ 2593 (a) It shall be unlawful for any person who is a transferee required to pay the transfer tax imposed by section 2590 (a) to acquire or otherwise obtain any marihuana without having paid such tax; and proof that any person shall have had in his possession any marihuana and shall have failed, after reasonable notice and demand by the collector, to produce the order form required by section 2591 to be retained by him, shall be presumptive evidence of guilt under this section and of liability for the tax imposed by section 2590 (a)."
2
Casey v. United States, 9 Cir., 20 F.2d 752; Killian v. United States, 58 App. D.C. 255, 29 F.2d 455; Mullaney v. United States, 9 Cir., 82 F.2d 638; Frazier v. United States, 82 U.S.App.D.C. 332, 163 F.2d 817
|
FILED
NOT FOR PUBLICATION JUL 20 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
WILLIE BELL, Jr., No. 08-56636
Plaintiff - Appellant, D.C. No. 3:08-cv-00165-H-AJB
v.
MEMORANDUM *
V. M. ALMAGER, Warden; et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the Southern District of California
Marilyn L. Huff, District Judge, Presiding
Submitted June 29, 2010 **
Before: ALARCÓN, LEAVY, and GRABER, Circuit Judges.
Willie Bell, Jr., a California state prisoner, appeals pro se from the district
court’s judgment dismissing his 42 U.S.C. § 1983 action alleging due process
violations. We have jurisdiction under 28 U.S.C. § 1291. We review de novo,
Nelson v. Heiss, 271 F.3d 891, 893 (9th Cir. 2001), and may affirm on any basis
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
supported by the record, Forest Guardians v. U.S. Forest Serv., 329 F.3d 1089,
1097 (9th Cir. 2003). We affirm.
The district court properly dismissed Bell’s claim concerning his failed
attempt to mail a package containing a watch before it was confiscated because
regulations requiring Bell to pay for postage from his trust account, rather than
supply his own stamps, do not implicate a constitutionally protected interest. See
Sandin v. Conner, 515 U.S. 472, 484 (1995) (only deprivations that impose
restraint exceeding an inmate’s sentence in an unexpected manner give rise to
protection “by the Due Process Clause of its own force” and only “atypical,
significant deprivation[s] in relation to the ordinary incidents of prison life” give
rise to state-created liberty interests).
The district court properly dismissed Bell’s claim concerning the handling of
his grievances because inmates have no protected due process rights in grievance
procedures. See Mann v. Adams, 855 F.2d 639, 640 (9th Cir. 1988) (order).
The district court did not abuse its discretion by denying Bell’s motion for a
preliminary class injunction and his motion for class certification because
non-attorney plaintiffs may not act in a representative capacity. See Simon v.
Hartford Life, Inc., 546 F.3d 661, 664 (9th Cir. 2008). Moreover, to the extent that
Bell sought an ex parte injunction on his own behalf, the district court did not
2 08-56636
abuse its discretion by denying it on the ground that Bell failed to meet, or justify
not meeting, applicable notice requirements. See Fed. R. Civ. P. 65(b).
The district court also did not abuse its discretion by denying Bell’s motion
for appointment of counsel because he failed to establish exceptional
circumstances. See Wilborn v. Escalderon, 789 F.2d 1328, 1331 (9th Cir. 1986).
Bell’s remaining contentions are unpersuasive.
AFFIRMED.
3 08-56636
|
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]MEMORANDUM OF DECISION
The plaintiff and the defendant, whose maiden name was Judith P. Simonds, were married on December 18, 1974 in Derby, Connecticut.
The plaintiff has resided continuously in the State of Connecticut for at least twelve months prior to the filing of this complaint.
The marriage of the parties has broken down irretrievably.
There are three minor children issue of this marriage, to wit: Emily Melissa Recalde, born March 27, 1977; Jennifer Jessica Recalde, born February 5, 1978 and Robert Anthony Recalde born September 6, 1982.
No other minor children have been born to the defendant since the date of said marriage.
Neither party has been a recipient of any State or Municipal Aid.
The marriage of the parties is hereby dissolved.
Physical custody of Robert Recalde is hereby ordered to be with the mother. Physical custody of Jennifer Recalde is hereby ordered to be with the father. Physical custody of Emily will remain with the current foster care being provided for her. Custody will be joint, and physical custody is as stated above. Visitation shall be reasonable on behalf of the father and mother.
Child support will not be awarded in this action because each party has custody of a minor child. CT Page 8028
The property located at 235 Waverly Road, Shelton, Connecticut shall be sold, and the proceeds divided equally when the youngest child reaches 19 years of age. In the event the wife desires to dispose of the property before that date, she is to list it with a real estate agent mutually agreed upon by the parties, or in the alternative, the defendant may purchase the plaintiff's interest in the home for $45,000.00 dollars. However, the defendant must exercise this option to purchase within 12 months of the date of this judgment or said purchase option is deemed to be null and void.
The defendant shall be responsible for all repairs, mortgage payments and taxes of the said property located on Waverly Road in Shelton, Connecticut. Any major repairs shall be accomplished with the approval of the plaintiff, and shall be divided equally.
The defendant wife's pension plan shall be retained by the defendant solely. However, the tort claim or compensation claim shall be the sole property of the plaintiff.
The defendant shall pay to the plaintiff $100 dollars a week as alimony for a period of three years. This amount shall be nonmodifiable.
The court finds for the defendant for all furniture, appliances and kitchen items in the marital home and the plaintiff will be allowed to deduct $1,000 dollars from any arrearage for child support as against the arrearage owed to the defendant.
The plaintiff has a pending liability case for the loss of the plaintiff's right hand. The court directs that this compensation for a liability claim shall be the exclusive property of the plaintiff, Victor Recalde.
The defendant's attorney was directed to file a prayer for relief and failed to submit said prayer.
Medical insurance for the children shall be provided by the defendant through her employer. Any unreimbursed medical or dental bills shall be divided equally.
Each party shall retain his or her own automobile. CT Page 8029
Neither party on their affidavit indicates how the foster care is provided for the minor child Emily. The court finds if there is a foster care obligation that it be divided equally between plaintiff and defendant.
Philip E. Mancini, Jr. State Trial Referee |
113 HRES 366 EH: Providing for consideration of the Senate amendment to the joint resolution (H.J. Res. 59) making continuing appropriations for fiscal year 2014, and for other purposes, and providing for consideration of the bill (H.R. 3210) making continuing appropriations for military pay in the event of a Government shutdown.
U.S. House of Representatives
2013-09-28
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
IV
113th CONGRESS
1st Session
H. RES. 366
In the House of Representatives, U. S.,
September 28, 2013
RESOLUTION
Providing for consideration of the Senate amendment to the joint resolution (H.J. Res. 59) making continuing appropriations for fiscal year 2014, and for other purposes, and providing for consideration of the bill (H.R. 3210) making continuing appropriations for military pay in the event of a Government shutdown.
That upon adoption of this resolution it shall be in order to take from the Speaker's table the joint resolution (H.J. Res. 59) making continuing appropriations for fiscal year 2014, and for other purposes, with the Senate amendment thereto, and to consider in the House, without intervention of any point of order, a motion offered by the chair of the Committee on Appropriations or his designee that the House concur in the Senate amendment with each of the two amendments printed in the report of the Committee on Rules accompanying this resolution. The Senate amendment and the motion shall be considered as read. The motion shall be debatable for one hour equally divided and controlled by the chair and ranking minority member of the Committee on Appropriations. The previous question shall be considered as ordered on the motion to its adoption without intervening motion or demand for division of the question except that the question of adoption of the motion shall be divided between the two House amendments.
2.Upon adoption of this resolution it shall be in order to consider in the House the bill (H.R. 3210) making continuing appropriations for military pay in the event of a Government shutdown. All points of order against consideration of the bill are waived. The bill shall be considered as read. All points of order against provisions in the bill are waived. The previous question shall be considered as ordered on the bill and on any amendment thereto to final passage without intervening motion except: (1) 40 minutes of debate equally divided and controlled by the chair and ranking minority member of the Committee on Appropriations; and (2) one motion to recommit.
Karen L. Haas,Clerk.
|
Order Michigan Supreme Court
Lansing, Michigan
February 4, 2020 Bridget M. McCormack,
Chief Justice
158904 David F. Viviano,
Chief Justice Pro Tem
Stephen J. Markman
Brian K. Zahra
HENRY FORD HEALTH SYSTEM, Richard H. Bernstein
Plaintiff-Appellee, Elizabeth T. Clement
Megan K. Cavanagh,
Justices
v SC: 158904
COA: 341563
Lapeer CC: 17-051075-NF
EVEREST NATIONAL INSURANCE
COMPANY,
Defendant-Appellant.
____________________________________/
By order of April 30, 2019, the application for leave to appeal the November 20,
2018 judgment of the Court of Appeals was held in abeyance pending the decision in
Jawad A Shah, MD, PC v State Farm Mut Auto Ins Co (Docket No. 157951). On order
of the Court, leave to appeal having been denied in Shah on October 25, 2019, 504 Mich
___ (2019), the application is again considered, and it is DENIED, because we are not
persuaded that the questions presented should be reviewed by this Court.
I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
February 4, 2020
a0127
Clerk
|
In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
No. 15-1587V
Filed: February 5, 2018
UNPUBLISHED
STACEY NASH,
Petitioner,
v. Special Processing Unit (SPU);
Attorneys’ Fees and Costs
SECRETARY OF HEALTH AND
HUMAN SERVICES,
Respondent.
Caroline Noel Valentino, Oakland, CA, for petitioner.
Sarah Christina Duncan, U.S. Department of Justice, Washington, DC, for respondent.
DECISION ON ATTORNEYS’ FEES AND COSTS 1
Dorsey, Chief Special Master:
On December 29, 2015, petitioner filed a petition for compensation under the
National Vaccine Injury Compensation Program, 42 U.S.C. §300aa-10, et seq., 2 (the
“Vaccine Act”). Petitioner alleges that she suffered Guillain-Barre Syndrome (“GBS”)
caused by her January 3, 2013 influenza (“flu”) vaccination. Petition at 1. On June 27,
2017, the undersigned issued a decision awarding compensation to petitioner based on
the parties’ stipulation. (ECF No. 49.)
I. Procedural History
On January 15, 2018, petitioner filed a motion for attorneys’ fees and costs.
(ECF No. 52.) Petitioner requests attorneys’ fees in the amount of $45,051.00 and
1 Because this unpublished decision contains a reasoned explanation for the action in this case, the
undersigned intends to post it on the United States Court of Federal Claims' website, in accordance with
the E-Government Act of 2002. 44 U.S.C. § 3501 note (2012) (Federal Management and Promotion of
Electronic Government Services). In accordance with Vaccine Rule 18(b), petitioner has 14 days to
identify and move to redact medical or other information, the disclosure of which would constitute an
unwarranted invasion of privacy. If, upon review, the undersigned agrees that the identified material fits
within this definition, the undersigned will redact such material from public access.
2
National Childhood Vaccine Injury Act of 1986, Pub. L. No. 99-660, 100 Stat. 3755. Hereinafter, for
ease of citation, all “§” references to the Vaccine Act will be to the pertinent subparagraph of 42 U.S.C. §
300aa (2012).
attorneys’ costs in the amount of $427.00. (Id. at 1.) In compliance with General Order
#9, petitioner filed a signed statement indicating that petitioner incurred no out-of-pocket
expenses. (Id. at 2.) Thus, the total amount requested is $45,478.00.
On January 26, 2018, respondent filed a response to petitioner’s motion. (ECF
No. 53.) Respondent argues that “[n]either the Vaccine Act nor Vaccine Rule 13
contemplates any role for respondent in the resolution of a request by a petitioner for an
award of attorneys’ fees and costs.” (Id. at 1.) Respondent adds, however, that he “is
satisfied the statutory requirements for an award of attorneys’ fees and costs are met in
this case.” (Id. at 2.) Respondent “respectfully recommends that the Chief Special
Master exercise her discretion and determine a reasonable award for attorneys’ fees
and costs.” (Id. at 3.)
Petitioner has filed no reply.
The undersigned has reviewed the billing records submitted with petitioner’s
request and finds a reduction in the amount of fees to be awarded appropriate for the
reasons listed below.
II. Legal Standard for Awarding Attorneys’ Fees and Costs
Under the Vaccine Act, the special master shall award reasonable attorneys’ fees
and costs for any petition that results in an award of compensation. 42 U.S.C. § 300aa-
15(e)(1). Petitioner in this case was awarded compensation; she is therefore entitled to
an award of reasonable attorneys’ fees and costs. 3
The Federal Circuit has approved use of the lodestar approach to determine
reasonable attorneys’ fees and costs under the Vaccine Act. Avera v. Sec’y of Health &
Human Servs., 515 F.3d 1343, 1349 (Fed. Cir. 2008). Using the lodestar approach, a
court first determines “an initial estimate of a reasonable attorneys’ fee by ‘multiplying
the number of hours reasonably expended on the litigation times a reasonable hourly
rate.’” Id. at 1347–58 (quoting Blum v. Stenson, 465 U.S. 886, 888 (1984)). Then, the
court may make an upward or downward departure from the initial calculation of the fee
award based on other specific findings. (Id. at 1348.)
Counsel must submit fee requests that include contemporaneous and specific
billing records indicating the service performed, the number of hours expended on the
service, and the name of the person performing the service. See Savin v. Sec’y of
Health & Human Servs., 85 Fed. Cl. 313, 316–18 (2008). Counsel should not include in
their fee requests hours that are “excessive, redundant, or otherwise unnecessary.”
Saxton v. Sec’y of Health & Human Servs., 3 F.3d 1517, 1521 (Fed. Cl. 1993) (quoting
3 In addition, § 300aa–15(e)(3) states that “[n]o attorney may charge any fee for services in connection
with a petition filed under section 300aa–11 of this title which is in addition to any amount awarded as
compensation by the special master or court under paragraph (1).” This would include any amounts
requested by counsel that the undersigned finds non-compensable.
2
Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)). It is “well within the special master’s
discretion to reduce the hours to a number that, in [her] experience and judgment, [is]
reasonable for the work done.” Id. at 1522. Furthermore, the special master may
reduce a fee request sua sponte, apart from objections raised by respondent and
without providing a petitioner notice and opportunity to respond. See Sabella v. Sec’y of
Health & Human Servs., 86 Fed. Cl. 201, 209 (2009).
An application for fees and costs must sufficiently detail and explain the time
billed so that a special master may determine, from the application and the case file,
whether the amount requested is reasonable. Bell v. Sec’y of Health & Human Servs.,
18 Cl. Ct. 751, 760 (1989); Rodriguez v. Sec’y of Health & Human Servs., No. 06–559V,
2009 WL 2568468 (Fed. Cl. Spec. Mstr. July 27, 2009). Petitioners bear the burden of
documenting the fees and costs claimed. Rodriguez, 2009 WL 2568468, at *8. Block
billing, or billing large amounts of time without sufficient detail as to what tasks were
performed, is clearly disfavored. See, e.g., Broekelschen v. Sec’y of Health & Human
Servs., No. 07-137V, 2008 WL 5456319, at *4-5 (Fed. Cl. Spec. Mstr. Dec. 17, 2008).
In determining a reasonable number of hours expended, a line-by-line evaluation
of the fee application is not required. Wasson v. Sec’y of Health & Human Servs., 24
Cl.Ct. 482, 484, aff’d in relevant part, 988 F.2d 131 (Fed. Cir. 1993). Special masters
may rely on their experience with the Vaccine Act and its attorneys to determine the
reasonable number of hours expended. Id. Just as “[t]rial courts routinely use their
prior experience to reduce hourly rates and the number of hours claimed in attorney fee
requests .... [v]accine program special masters are also entitled to use their prior
experience in reviewing fee applications.” Saxton, 3 markallen@example.net.
III. Appropriate Hourly Rates
Petitioner requests compensation for Ms. Valentino at a rate of $375 per hour for
time billed in 2013 and 2014; $400 per hour for 2015 and 2016; and $425 per hour for
2017 and 2018. (ECF No. markallen@example.net.) Due to Ms. Valentino’s inexperience in the
Vaccine Program 4, the undersigned does find cause to reduce the hourly rates to $350
an hour for time billed in 2013 – 2015 and to $385.00 for time billed in 2016 - 2018. 5
4
Ms. Valentino’s inexperience with the Vaccine Program is readily observed upon review of her billing
records. Examples include entries at 01/07/16 “…[l]egal research as to required future filings and
significance of SPU assignment…” (1.00 hours); 04/03/17 “Review of other vaccine case settlement
amounts in filed cases on court website and other attorney websites and compare to our fact patterns and
damages claims” (1.80 hours); 01/08/18 “Telephone call to counsel in plaintiff bar re fees” (0.25 hours)
(ECF No. 52-1 at 3, 12, 15.)
5
These rates are derived from the undersigned’s application of the OSM Attorneys’ Forum Hourly Rate
Schedules for 2015-2016 and 2017 available on the U.S. Court of Federal Claims markallen@example.net/node/2914. The undersigned incorporates by reference all of the explanatory notes
contained in these rate schedules. See also McCulloch v. Sec’y Health & Human Servs., 09-293V, 2015
WL 5634323, at *19 (Fed. Cl. Spec. Mstr. Sept. 1, 2015) (noting that vaccine attorneys with over 20 years
of experience should receive between $350 and $415 per hour, and further noting that higher rates
3
The undersigned finds that the proposed paralegal rate of $145 per hour is reasonable.
Therefore, attorneys’ fees requested are reduced by $3,071.00.
IV. Reasonable Hours
Upon review of the billing records, the undersigned finds several reductions
necessary. These reductions are each discussed in turn as follows.
Petitioner’s counsel was required to refile petitioner’s medical records due to
failure to comply with the court’s filing requirements. (See Scheduling Order (Non-PDF),
2/26/2016; Order Striking 7 Notice of Intent to File on Compact Disc.) This caused
duplicated effort. Therefore the undersigned will reduce the billing for tasks regarding
the uploading and paginating medical records by 50%, reducing the requested fees
by $916.25. 6 See, e.g. Yang v. Sec’y Health & Human Servs., No. 10-33V, 2013 WL
4875120, at *5 (Fed. Cl. Spec. Mstr. Aug. 22, 2013) (holding that “petitioner’s counsel’s
requests for attorneys’ fees for work that was created by counsel’s mistakes are
unreasonable.”)
The entry dated January 11, 2016, “Preparation, service and filing of Affidavit of
Counsel Caroline Valentino” (ECF No. 52-1 at 3), was duplicated on the billing invoice
for this date and the undersigned will reduce requested fees by $192.50. 7
Ms Valentino billed 4.25 hours at the full hourly rate of $375 per hour for an
appearance with petitioner. (ECF No. 52-1 at 1.) It appears this entry likely has travel
time grouped together with her meeting with Petitioner, leaving no way to differentiate
the time it took to travel from her office to Petitioner and the amount of time spent
meeting with petitioner. 8 In the Vaccine Program, special masters traditionally have
should be reserved for attorneys with significant vaccine experience). Accord Johnson v. Sec’y Health &
Human Servs., No. 15-602V, 2017 WL 4210578 (Fed. Cl. Spec. Mstr. June 26, 2017) (reducing an
attorney barred in 1972 from a requested rate of $415 per hour to $385 per hour for work performed in
2016 due to lack of prior vaccine experience). Ms. Valentino was barred in 1985 (ECF No. 52-4), thus
during the pendency of this case (after 2015) she moved from the rate range for attorneys with 20-30
years of experience to the rate range for attorneys with 31+ years of experience as set forth in the above-
discussed rate schedules.
6 This total is calculated by dividing the already reduced rate by half and multiplying by the hours billed
(attorney rate:$385 /2=$192.50*2.5 =$481.25; paralegal rate $145/2 = $72.50*6 = $435).
7
This balance consist of the reduced rate of $385.00 for 0.50 hours.
8
The undersigned notes that grouping multiple activities into single time entries is frowned upon and
makes a line-by-line analysis nearly impossible. See, e.g. Riggins v. Sec’y of Health & Human Servs., 9-
38V, 2009 WL 3319818, *23-24 (Fed. Cl. Spec. Mstr. June 15, 2009). Attorneys are advised that “[e]ach
task should have its own line entry indicating the amount of time spent on that task” and that “[l]umping
together several unrelated tasks in the same time entry frustrates the court’s ability to assess the
reasonableness of the request.” Guidelines for Practice Under the National Vaccine Injury Compensation
4
compensated time spent traveling when no other work was being performed at one-half
an attorney’s hourly rate. See Hocraffer v. Sec’y of Health & Human Servs., No. 99-
533V, 2011 WL 3705153, at *24 (Fed. Cl. Spec. Mstr. July 25, 2011); Rodriguez v.
Sec'y of Health & Human Servs., No. 06-559V, 2009 WL 2568468, at *21 (Fed. Cl.
Spec. Mstr. Jul. 27, 2009); English v. Sec’y of Health & Human Servs., No. 01-61V,
2006 WL 3419805, at *12-13 (Fed. Cl. Spec. Mstr. Nov. 9, 2006). 9 As the majority of
the entry would be reflected as travel time, the undersigned will consider the entry as
travel and reduce the billable rate by 50%. 10 Thus, the undersigned reduces the fees
request by $743.75. 11
The undersigned also notes that Ms. Valentino has billed for her time spent
engaged in professional development relative to her inexperience with the Vaccine
Program. “[I]t is inappropriate for counsel to bill time for educating themselves about
basic aspects of the Vaccine Program.” Matthews v. Sec’y of Health & Human Servs.,
No. 14-1111V, 2016 WL 2853910, at *2 (Fed. Cl. Spec. Mstr. Apr. 18, 2016). “An
inexperienced attorney may not ethically bill his client to learn about an area of law in
which he is unfamiliar. If an attorney may not bill his client for this task, the attorney
may also not bill the Program for this task.” Carter v. Sec’y of Health & Human Servs.,
No. 04-1500V, 2007 WL 2241877, at *5 (Fed. Cl. Spec. Mstr. July 13, 2007). Ms.
Valentino spent over 13 hours conducting research on vaccine procedures and past
case settlements over the course of this case. The undersigned reduces the fees
request by $4,898.25. 12
V. Reasonable Costs
Petitioner request reimbursement for attorney costs in the amount of $427.29.
After reviewing petitioner’s invoices, the undersigned finds no cause to reduce
petitioner’s request and awards the full amount sought.
VI. Conclusion
Program at 68 (available on the court’s website at
http://www.cofc.uscourts.gov/sites/default/files/GUIDELINES-FOR-PRACTICE-4212016.pdf).
9
However, the undersigned also recognizes that special masters should not use this rule as standard
practice but rather “[e]ach case should be assessed on its own merits.” Gruber v. Sec'y of Health &
Human Servs., 91 Fed. Cl. 773, 791 (2010).
10
To the extent that the entry could be considered ambiguous and does not reflect travel time, the
undersigned would consider the 4.25 hour meeting to be excessive and would reduce the hours by half in
any event.
11 This total was calculated by dividing the already reduced rate by half and multiplying by the hours
billed (attorney rate:$350 /2=$175*4.25 =$743.75)
12
This amount consists of 8 hours billed in 2013 at the already reduced rate of $350 and 5.45 hours billed
during 2015 -2018, at the already reduced rate of $385 ($350*8 = $2800; $385*5.45= $2098.25;
$2800+$2098.25 =$4,898.25).
5
The Vaccine Act permits an award of reasonable attorneys’ fees and costs.
§ 15(e). Based on the reasonableness of petitioner’s request, the undersigned
GRANTS petitioner’s motion for attorneys’ fees and costs in the reduced amount of
$35,656.25.
Accordingly, the undersigned awards the total of $35,656.25 13 as a lump
sum in the form of a check jointly payable to petitioner and petitioner’s counsel
Caroline N. Valentino.
The clerk of the court shall enter judgment in accordance herewith. 14
IT IS SO ORDERED.
s/Nora Beth Dorsey
Nora Beth Dorsey
Chief Special Master
13 This amount is intended to cover all legal expenses incurred in this matter. This award encompasses
all charges by the attorney against a client, “advanced costs” as well as fees for legal services rendered.
Furthermore, § 15(e)(3) prevents an attorney from charging or collecting fees (including costs) that would
be in addition to the amount awarded herein. See generally Beck v. Sec’y of Health & Human Servs.,
924 F.2d 1029 (Fed. Cir.1991).
14Pursuant to Vaccine Rule 11(a), entry of judgment can be expedited by the parties’ joint filing of notice
renouncing the right to seek review.
6
|
Citation Nr: 0702337
Decision Date: 01/26/07 Archive Date: 01/31/07
DOCKET NO. 03-20 164 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Reno,
Nevada
THE ISSUES
1. Entitlement to service connection for post-traumatic
stress disorder (PTSD) and depression.
2. Entitlement to service connection for a skin disorder,
claimed as secondary to herbicide exposure.
3. Entitlement to service connection for an eye disorder,
claimed as astigmatism.
4. Entitlement to an effective date earlier than November
26, 2003, for the grant of service connection for bilateral
hearing loss.
5. Entitlement to an effective date earlier than November
26, 2003, for the grant of service connection for tinnitus.
REPRESENTATION
Appellant represented by: Disabled American Veterans
WITNESS AT HEARING ON APPEAL
The veteran
ATTORNEY FOR THE BOARD
J.R. Bryant, Counsel
INTRODUCTION
The veteran had active service from August 1976 to August
1980.
This matter is before the Board of Veterans' Appeals (Board)
of the Department of Veterans Affairs (VA) on appeal from
rating determinations in October 2002 and May 2004 by the
above Regional Office (RO).
FINDINGS OF FACT
1. The veteran's active military service did not include
duty in, or visitation to, the Republic of Vietnam.
2. The evidentiary record does not establish that the
veteran was engaged in combat with the enemy.
3. The veteran has a current medical diagnosis of PTSD, and
medical providers have related the diagnosis to claimed in-
service stressors.
4. The veteran's claimed in-service stressful experiences
have not been corroborated by service records, or other
credible supporting evidence, and the veteran has not
provided sufficient information for VA to further attempt to
independently corroborate any such in-service stressful
experience.
5. A psychiatric disability did not originate in service or
within one year of the veteran's discharge therefrom, and
such a disorder is not otherwise related to service.
6. The veteran has not been diagnosed with any disorder
which is presumptively related to exposure to Agent Orange or
other herbicide agents in service.
7. The veteran's skin disorders in service were acute and
transitory, resolving without residual disability, and his
current skin condition is unrelated to a disease or injury in
service, including exposure to Agent Orange.
8. The veteran's decreased visual acuity is due to
antimetropia, astigmatism, and presbyopia. As types of
refractive error, these changes in vision are not the result
of disease or injury for which compensation benefits may be
awarded.
9. The veteran was separated from active military service in
August 1980, and he initiated his claims for service
connection for bilateral hearing loss and tinnitus by
submitting a written informal claim on November 26, 2003,
more than one year after his separation.
10. By rating decision dated in May 2004, the RO granted
service connection for bilateral hearing loss and tinnitus.
Noncompensable and 10 percent evaluations were assigned,
respectively, effective from November 26, 2003.
11. The RO was not in possession of any communication prior
to November 26, 2003, that can reasonably be construed as a
formal or informal claim for entitlement to VA compensation
benefits based upon bilateral hearing loss and tinnitus.
CONCLUSIONS OF LAW
1. Neither PTSD nor depression was incurred in or aggravated
by military service. 38 U.S.C.A. §§ 1131, 1154, 5103, 5103A,
5107 (West 2002); 38 C.F.R. §§ 3.303, 3.304(f) (2006).
2. A skin disorder was not incurred in or aggravated by
active service, nor may it be presumed to have been incurred
or aggravated by service due to herbicide exposure.
38 U.S.C.A. §§ 1131, 1112, 1113, 1116 (West 2002); 38 C.F.R.
§§ 3.303, 3.307, 3.309 (2006).
3. An acquired eye disorder, manifested by antimetropia,
astigmatism, and presbyopia, refractive error of the eyes,
was not incurred in or aggravated by active military service.
38 U.S.C.A. §§ 1131, 5103, 5103A, 5107 (West 2002); 38 C.F.R.
§ 3.303(c) (2006).
4. The criteria for an effective date prior to November 26,
2003, for the grant of service connection for bilateral
hearing loss have not been met. 38 U.S.C.A. § 5110 (West
2002); 38 C.F.R. § 3.400 (2006).
5. The criteria for an effective date prior to November 26,
2003, for the grant of service connection for tinnitus have
not been met. 38 U.S.C.A. § 5110 (West 2002); 38 C.F.R.
§ 3.400 (2006).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
I. Duty to Notify and Assist
The Veterans Claims Assistance Act of 2000 (VCAA) describes
VA's duty to notify and assist claimants in substantiating a
claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103,
5103A, 5107, 5126 (West 2002 & Supp. 2006); 38 C.F.R.
§§ 3.102, 3.156(a), 3.159, 3.326(a) (2006).
Upon receipt of a complete or substantially complete
application for benefits, VA is required to notify the
claimant and his representative of any information, and any
medical or lay evidence, that is necessary to substantiate
the claims. 38 U.S.C.A. § 5103(a) (West 2002 & Supp. 2006);
38 C.F.R. § 3.159(b) (2006); Quartuccio v. Principi, 16 Vet.
App. 183 (2002). Proper VCAA notice must inform the claimant
of any information and evidence not of record (1) that is
necessary to substantiate the claim; (2) that VA will seek to
provide; and (3) that the claimant is expected to provide;
and (4) must ask the claimant to provide any evidence in his
possession that pertains to the claim, in accordance with
38 C.F.R. § 3.159(b)(1). VCAA notice should be provided to a
claimant before the initial unfavorable RO decision on a
claim for VA benefits. See Pelegrini v. Principi, 18 Vet.
App. 112 (2004); Mayfield v. Nicholson, 19 Vet. App. 103
(2005), rev'd on other grounds, 444 F.3d 1328 (Fed. Cir.
2006).
As noted, in Pelegrini, the U.S. Court of Appeals for
Veterans Claims held in part that a VCAA notice, as required
by 38 U.S.C.A. § 5103(a), must be provided to a claimant
before the initial RO decision. In the present case, the
veteran was provided notice consistent with the VCAA.
In letters dated in December 2001, April 2003, November 2003,
January 2004, February 2004, and February 2006, the RO
informed the veteran of its duty to assist him in
substantiating his claims under the VCAA, and the effect of
this duty upon his claims. Thus, the Board concludes that
the notifications received by the veteran adequately complied
with the VCAA and subsequent interpretive authority, and that
he has not been prejudiced in any way by the notice and
assistance provided by the RO. As the Federal Circuit Court
has stated, it is not required "that VCAA notification must
always be contained in a single communication from the VA."
Mayfield, supra, 444 samantharomero@example.com.
Likewise, it appears that all obtainable evidence identified
by the veteran relative to his claims has been obtained and
associated with the claims files, and that he has not
identified any other pertinent evidence, not already of
record, which would need to be obtained for a fair
disposition of this appeal. Thus, for these reasons, any
failure in the timing or language of VCAA notice by the RO
constituted harmless error. See also Conway v. Principi, 353
F.3d 1359, 1374 (2004), holding that the Court of Appeals for
Veterans Claims must "take due account of the rule of
prejudicial error."
Accordingly, we find that VA has satisfied its duty to assist
the veteran in apprising him as to the evidence needed, and
in obtaining evidence pertaining to his claims, under both
former law and the VCAA. The Board, therefore, finds that no
useful purpose would be served in remanding this matter for
yet more development. Such a remand would result in
unnecessarily imposing additional burdens on VA, with no
additional benefit flowing to the veteran. The Court has
held that such remands are to be avoided. See Winters v.
West, 12 Vet. App. 203 (1999) (en banc), vacated on other
grounds sub nom. Winters v. Gober, 219 F.3d 1375 (Fed. Cir.
2000); Soyini v. Derwinski, 1 Vet. App. 540, 546 (1991);
Sabonis v. Brown, 6 Vet. App. 426, 430 (1994). See also
Livesay v. Principi, 15 Vet. App. 165, 178 (2001) (en banc).
In addition to the foregoing harmless-error analysis, to
whatever extent the recent decision of the Court in Dingess
v. Nicholson, 19 Vet. App. 473 (2006), requires more
extensive notice in claims for compensation, e.g., as to
potential downstream issues such as disability rating and
effective date, the Board finds no prejudice to the veteran
in proceeding with the present decision. Since the service
connection claims have been appealed and are being denied
herein, such other issues are moot. Although the earlier
effective date issues are undoubtedly "downstream" claims,
the outcome of this appeal is dependent upon evidence which
is already in the file, and has been for several years.
Moreover, no additional amount of development could alter the
factual record in this case. VA therefore has no further
duty to notify the veteran of evidence needed to substantiate
these claims, or to assist him in obtaining evidence, in that
no reasonable possibility exists that any such evidence
exists.
II. Service Connection Issues
Service connection may be granted for disability resulting
from disease or injury incurred in or aggravated by active
military service. 38 U.S.C.A. §§ 1110, 1131; 38 C.F.R.
§ 3.303(a). As a general matter, service connection for a
disability on the basis of the merits of such claim is
focused upon (1) the existence of a current disability; (2)
the existence of the disease or injury in service, and; (3) a
relationship or nexus between the current disability and any
injury or disease during service. See Cuevas v. Principi, 3
Vet. App. 542 (1992); Rabideau v. Derwinski, 2 Vet. App. 141
(1992).
Where there is a chronic disease shown as such in service or
within the presumptive period under 38 C.F.R. § 3.307 so as
to permit a finding of service connection, subsequent
manifestations of the same chronic disease at any later date,
however remote, are service connected, unless clearly
attributable to intercurrent causes. 38 C.F.R. § 3.303(b).
Service connection may be granted for any disease diagnosed
after discharge, when all the evidence, including that
pertinent to service, establishes that the disease was
incurred in service. 38 C.F.R. § 3.303(d).
A. PTSD/depression
The veteran's service medical records (SMRs) show no
complaints of or treatment for any psychiatric
symptomatology, and his separation examination report shows
no psychiatric abnormality. Service personnel records show
his military occupational service (MOS) was electrical
repairman from August 1976 to August 1980. He received the
Navy Battle "E" Ribbon.
The post-service evidence in this case is extensive, dated
from 1984 to 2005, and includes records from the Social
Security Administration (SSA). These records reflect a long
history of extensive drug usage, with the veteran
hospitalized on several occasions for drug addiction and
illness related thereto. The pertinent post-service records
begin with an initial period of VA hospitalization in August
1987. At that time the veteran reported a 6-year history of
cocaine abuse, as well as experimentation with various other
drugs. He was presently on administrative leave from his job
at the Post Office due to poor working habits related to
cocaine abuse problems. The diagnosis at hospital discharge
was cocaine abuse and immature personality. These records
include additional diagnoses of depression, dysthymic
disorder, mixed substance dependence, substance-induced mood
disorder, adjustment disorder with mixed mood, and mixed
personality disorder with borderline narcissistic and
antisocial traits.
The veteran underwent psychiatric evaluation in March 1993.
He related his history of drug and alcohol abuse, reporting
that his problems began 10 years prior. He stated that since
his discharge from service he had experienced problems
adjusting, and that he was homeless.
He again underwent psychological evaluation in April 1994.
At that time he admitted to extensive alcohol and illicit
drug abuse. He indicated that he had been depressed since
losing his position with the Post Office in 1987. He
complained of sleep disturbance, moodiness, anxiety, fear,
rage attacks, and intermittent suicidal ideation. The
examiner noted the veteran had never psychologically
recovered from his dismissal from the Postal Service, and
concluded that he had an intractable and involuntary drug and
alcohol addiction as well as significant depression which may
or may not be secondary to his addiction.
In October 1996, the veteran was admitted for treatment for
chemical dependency to crack cocaine and alcohol. He sai his
difficulties with chemical dependency had begun when he went
into the Navy and had some "minor problems." The clinical
impression was polysubstance abuse and depression.
In a statement of stressors received by the RO in 1996, the
veteran indicated that while serving aboard the USS Long
Beach, a guided-missile cruiser, he had been on three
complete WESTPACS (Western Pacific tours). He stated that
his military assignments were classified at times, and that
he was involved in skirmishes off the coast of Uganda. He
stated that he was part of an elite nuclear task force. He
said he experienced problems after leaving the Navy and began
drinking as a result. During evaluation in December 1997,
the veteran reported additional stressors including seeing a
shipmate jump overboard. The clinical impression was chronic
major depression.
In September 2001, the veteran attended a psychotherapy
session, with a diagnosis of dysthymia. He presented stating
that the had symptoms of PTSD due to frequent and lengthy
deployments on a Navy ship and being exposed to the stress of
such deployments. He stated that he witnessed a stabbing
while aboard his ship, but was not personally threatened.
The primary diagnosis was adjustment disorder with mixed
mood.
The veteran underwent psychological assessment in November
2001. He related his military history which included being
stationed on the USS Long Beach, with three 10-month
deployments. He stated that he was in engineering and
security and that the deployments were very stressful. He
stated that they were constantly firing off the ship, and
were told that they were exercises. However, he and much of
the crew believed that they were firing at Russian targets.
The veteran stated that he still has nightmares of rockets
going off on the ship and the ship in turbulent waters.
Other stressful events included the suicide of one shipmate
and the stabbing of another. The clinical impression was
PTSD. However, in June 2002, based on a recap of the
November 2001 assessment, a different VA examiner gave a
provisional diagnosis of PTSD, along with dysthymia,
polysubstance and alcohol abuse in remission, and mixed
personality disorder with borderline narcissistic and
antisocial traits.
In October 2002, a VA physician concluded that the veteran
had symptoms of PTSD from his military experiences, but
commented that the most significant stressors were related to
his civilian traumas. The physician based his conclusion on
his evaluation of the veteran and a review of his medical
history. A similar statement was submitted by a licensed
clinical counselor, who concluded that the veteran had PTSD
based on experiencing extreme stress while on active duty in
the Navy from 1976 to 1980.
The veteran provided additional information regarding his
claimed stressors in statements received by the RO in 2003.
He described participating in weeks of intensive training,
and said he was harassed during swim training exercise. He
also stated that he was involved in a wartime skirmishes off
the coast of Uganda in 1977 during classified/secret
reconnaissance exercises. The missile exercises were
classified, and he believed them to be actual covert
missions. He reported that the long overseas deployments
were stressful and that as a result he began using drugs. He
also reported numerous racial hostilities, fights, and low
morale because of these deployments. On one occasion he
almost missed the ship and was disciplined for being AWOL,
for which he received a reduction in rank. He witnessed the
stabbing of a shipmate and also saw a sailor jump overboard
who was later rescued. He described several post-service
incidents including the deaths of several shipmates as a
result of suicides and homicides.
During a subsequent January 2003 period of hospitalization,
the veteran claimed that he was involved in secret missions
in various parts of the world during his tour in the Navy.
He stated that strange happenings occurred after the Vietnam
War and during the Cold War. He described instances of guns
being pointed at him by Marines aboard his ship, and said he
knew if he moved he would be shot. The examiner provided a
conditional diagnosis of PTSD, noting that the veteran did
not appear to meet all the diagnostic criteria. The
diagnoses at discharge were depression, history of substance
abuse, and personality disorder.
Thereafter, the veteran underwent psychological testing by a
private doctor to assess him for depression and/or PTSD. The
examiner reported that the veteran had significant elevation
on scores that assess depression and PTSD. However, these
scores were noted to be extremity elevated, and as a result
it was difficult to accurately assess his diagnosis, as the
veteran appeared to have over-reported his symptoms in an
attempt to express frustrations.
During a July 2006 videoconference hearing before the
undersigned, the veteran essentially reiterated previously
submitted information concerning his in-service stressor
events as well as symptoms consistent with complaints made
during VA examinations.
To establish entitlement to service connection for PTSD in
particular requires: (1) medical evidence diagnosing PTSD;
(2) credible supporting evidence that the claimed in-service
stressor actually occurred; and (3) medical evidence of a
link between current symptomatology and the claimed in-
service stressor. 38 C.F.R. § 3.304(f) (2006). See also,
Cohen v. Brown, 10 Vet. App. 128 (1997).
According to 38 C.F.R. § 3.304(f), the relevant criteria
require that a PTSD diagnosis must be established in
accordance with 38 C.F.R. § 4.125(a), which mandates that for
VA purposes, all mental disorder diagnoses must conform to
the fourth edition of the American Psychiatric Association's
Diagnostic and Statistical Manual for Mental Disorders (DSM-
IV). In this regard, the Board notes that the Court of
Appeals for Veterans Claims has taken judicial notice of the
mental health profession's adoption of the DSM-IV as well as
its more liberalizing standards to establish a diagnosis of
PTSD. Specifically, the Court took notice of the change in
criteria from an objective "would evoke . . . in almost
anyone" standard in assessing whether a stressor is
sufficient to trigger PTSD to a subjective standard (e.g.,
whether a person's exposure to a traumatic event and response
involved intense fear, helplessness, or horror). Hence, the
Court noted that a more susceptible person could have PTSD
under the DSM-IV criteria given his or her exposure to a
traumatic event that would not necessarily have the same
effect on "almost everyone." Cohen, 10 Vet. App. 128, 140-
141 (1997).
Furthermore, the pertinent regulation provides that if the
evidence establishes that the veteran engaged in combat with
the enemy and the claimed stressor is related to that combat,
in the absence of clear and convincing evidence to the
contrary, and provided that the claimed stressor is
consistent with the circumstances, conditions, or hardships
of the veteran's service, the veteran's lay testimony alone
may establish the occurrence of the claimed in-service
stressor. See 38 C.F.R. § 3.304(f)(1).
The type of evidence required to establish that the claimed
in-service stressors actually occurred depends on whether the
veteran "engaged in combat with the enemy." 38 U.S.C.A.
§ 1154(b) requires that the veteran have actually
participated in combat with the enemy, meaning participated
in events constituting an actual fight or encounter with a
military foe or hostile unit or instrumentality, and does not
apply to veterans who served in a general "combat area" or
"combat zone" but did not themselves engage in combat with
the enemy. See VAOPGCPREC 12-99 (Oct. 18, 1999). The
General Counsel also indicated that the determination of
whether a veteran engaged in combat with the enemy
necessarily must be made on a case-by-case basis, and that
absence from a veteran's service records of any ordinary
indicators of combat service may, in appropriate cases,
support a reasonable inference that the veteran did not
engage in combat; such absence may properly be considered
"negative evidence" even though it does not affirmatively
show that the veteran did not engage in combat. Id.
The veteran contends that he engaged in covert combat
missions off the coast of Uganda, but said he could not
provide relative details because the operations were
classified. However the Board observes that there is no
objective evidence that the veteran was trained for, or
assigned to, any special forces units to perform covert type
operations. The evidence on file does not show that he
received any awards or decorations associated with personal
combat exposure, and his service personnel records show that
he served as an electrical/mechanical equipment repairman.
While his unit received the Navy Battle "E" Ribbon, there
is no indication that the basis for the award was combat,
rather than meritorious conduct in performing their assigned
duties.
Accordingly, the Board concludes that combat status has not
been demonstrated in this case, and presumptions related to
combat veterans are not applicable. As combat status has not
been established, the veteran's statements alone cannot
constitute conclusive evidence of the occurrence of an in-
service stressor; rather, corroborating evidence is needed.
In such cases, the record must contain service records or
other corroborative evidence that substantiates or verifies
the veteran's testimony or statements as to the occurrence of
the claimed stressor. See Zarycki v. Brown, 6 Vet. App. 91,
98 (1993).
In multiple statements and testimony submitted with his
claim, the veteran identified several events which he
considered to be the precipitating cause of his claimed PTSD.
He reported that he witnessed serious injuries to others, but
no deaths, during the time of his service. He primarily
contends that the long deployments and the constant stress or
pressure of his responsibilities in the Navy were traumatic.
His other claimed stressors involve reports of racial
friction and vague reports of fighting, etc. He claims to
have been abused mentally, harassed, and intimidated.
However, none of these alleged incidents is mentioned in the
veteran's service records, and they have not been reported in
sufficient detail to be verified. Moreover, many of these
types of incidents generally cannot be confirmed, long after
the fact, unless actually documented.
The critical element is that, based upon the evidentiary
record as a whole, the veteran lacks a proper diagnosis of
PTSD related medically to his non-combat stressors. In this
regard, the Board notes that the veteran's claimed stressors,
which were alleged with some specificity by him during
multiple VA and private examinations, did not result in a
diagnosis of PTSD. Rather these records have consistently
listed diagnoses of polysubstance abuse, depression, and a
personality disorder.
As has been noted above, the record contains evidence
favorable to the veteran's claim in the form of diagnoses of
PTSD on the basis of the veteran's report of questionable
experiences in service. Read in isolation, this evidence
could be construed as supporting the veteran's contention
that he currently has PTSD. However, where PTSD is shown as
a diagnosis, such is based on a rather vague and general
reference to symptoms, without specific discussion of the
DSM-IV criteria.
Moreover, the diagnoses cannot be the basis for the grant of
service connection for PTSD, because it has not been possible
to verify the claimed in-service stressors on which such
diagnosis was based. It has been held on a number of
occasions that a medical opinion premised upon an
unsubstantiated account of a claimant is of no probative
value. See, e.g., Swann v. Brown, 5 Vet. App. 229, 233
(1993) (generally observing that a medical opinion premised
upon an unsubstantiated account is of no probative value, and
does not serve to verify the occurrences described); Reonal
v. Brown, 5 Vet. App. 458, 461 (1993) (Board is not bound to
accept physician's opinion when it is based exclusively on
the recitations of a claimant).
Therefore, to the extent that these examiners noted the
presence of symptoms that would support a diagnosis of PTSD,
this evidence is not as persuasive as evidence to the
contrary, establishing that the veteran does not have PTSD.
The Board bases this conclusion on a decades long history of
substance abuse and diagnoses other than PTSD, including
major depression and personality disorder, which outweigh the
isolated findings of PTSD. The Board places great weight on
the most recent hospitalization report in 2003, which like
earlier hospitalization reports found that the veteran's
symptoms did not meet the clinical level for PTSD.
In making the above determination regarding the veteran's
purported in-service stressor, the Board is cognizant of the
holding of Pentecost v. Principi, 16 Vet. App. 124 (2002),
wherein the Court reversed the Board's denial of a claim for
service connection for PTSD on the basis of an unconfirmed
in-service stressor. However, in Pentecost, the veteran
submitted evidence that his unit was subjected to rocket
attacks. The Court had previously pointed out that
corroboration of every detail of a stressor under such
circumstances, such as the veteran's own personal
involvement, is not necessary. See also Suozzi v. Brown, 10
Vet. App. 307 (1997). The veteran's claim herein may be
distinguished from those in Pentecost and Suozzi, as the
veteran has submitted no independent evidence of the
occurrence of any of the claimed in-service stressors.
With respect to service connection for psychiatric disability
other than PTSD, the record reflects that the veteran has
been diagnosed with sevaral other disorders, including major
depression. His SMRs, however, are silent for any reference
to psychiatric complaints, and there is no post-service
evidence of any psychiatric disorder until 1987, more than 7
years after separation from service. Moreover, there is no
competent medical evidence on file linking any current
psychiatric disorder to service. To the extent the veteran
himself contends that any such psychiatric disorder is
etiologically related to service, as a layperson, his
opinions concerning medical diagnosis and causation do not
constitute competent medical evidence. See Espiritu v.
Derwinski, 2 Vet. App. 492 (1992).
Therefore, the Board concludes that the preponderance of the
evidence is against the claim, and that the benefit-of-the-
doubt rule is inapplicable here. 38 U.S.C.A. § 5107(b) (West
2002); 38 C.F.R. § 3.102 (2006).
B. Skin disorder
SMRs show that in September 1978 the veteran was treated for
a sore in the right axillary pit, due to a clogged sweat pore
from the use of antiperspirant. In August 1979, he was
treated for a rash on the left arm and wrist, diagnosed as
dermatitis. At separation in May 1980, clinical evaluation
of the skin was normal.
Service personnel records show the veteran had service from
August 1976 to August 1980, and did not serve in the Republic
of Vietnam.
Post-service outpatient treatment records show treatment in
1984 for an epidermal inclusion cyst of the left earlobe. In
October 1996, during hospitalization for chemical dependency,
the veteran was treated for acute dermatosis. The remaining
records from 1997 to 2006 show he was treated for
hidradenitis, recurring right groin cysts, cystic acne, and
folliculitis.
In various lay statements, the veteran has consistently
claimed that his current skin condition began while in
service, and that it may have been caused by exposure to
herbicides while he was stationed in the Philippines. He
also contends that he developed skin conditions on face and
his under armpit as a result of parasites in the water on
board ship. Further, he has submitted excerpts from various
medical sources in the form of articles he printed from the
Internet. In substance, these articles discuss the use of
Agent Orange in the Philippines
During his July 2006 videoconference hearing, the veteran
essentially reiterated previously submitted information
concerning his in-service exposure to herbicides, as well as
symptoms consistent with complaints made during VA
examinations.
For purposes of establishing service connection for a
disability resulting from exposure to a herbicide agent, a
veteran who, during active military, naval, or air service,
served in the Republic of Vietnam between January 9, 1962,
and May 7, 1975, shall be presumed to have been exposed
during such service to a herbicide agent, absent affirmative
evidence to the contrary demonstrating that the veteran was
not exposed to any such agent during service. 38 U.S.C.A.
§ 1116(f); 38 C.F.R. § 3.307(a)(6)(iii).
The applicable criteria also provide that a disease
associated with exposure to certain herbicide agents, listed
in 38 C.F.R. § 3.309(e), will be considered to have been
incurred in service under the circumstances outlined in this
section even though there is no evidence of such disease
during the period of service. 38 C.F.R. § 3.307(a). The
specified diseases which have been listed therein include
chloracne or other acneform disease consistent with
chloracne, Hodgkin's disease, multiple myeloma, non-Hodgkin's
lymphoma, acute and subacute peripheral neuropathy, porphyria
cutanea tarda, prostate cancer, respiratory cancers, and
soft-tissue sarcoma. 38 C.F.R. § 3.307(a)(6), 3.309(e).
Moreover, the diseases listed at 38 C.F.R. § 3.309(e) shall
have become manifest to a degree of 10 percent or more at any
time after service, except that chloracne or other acneform
disease consistent with chloracne shall have become manifest
to a degree of 10 percent or more within one year after the
last date on which the veteran was exposed to an herbicide
agent during active service. 38 C.F.R. § 3.307(a)(6)(ii).
In addition, the U.S. Court of Appeals for the Federal
Circuit has determined that a veteran is not precluded, by
presumptive provisions in the law, from establishing service
connection with proof of actual direct causation. See Combee
v. Brown, 34 F.3d 1039, 1042 (Fed. Cir. 1994).
In this case, it is clear that the veteran has several skin
conditions diagnosed, more often than not, as dermatitis,
hidrandenitis, cystic acne, sebaceous cysts, and
folliculitis. The veteran's diagnosed skin conditions are
not statutorily recognized as presumed to result from
herbicide exposure. The veteran has not been diagnosed with
chloracne. Therefore, presumptive service connection for the
veteran's current skin disorders, even assuming exposure to
Agent Orange, is not warranted. 38 C.F.R. §§ 3.307, 3.309.
The veteran has not submitted any other evidence beyond his
own contentions that his skin disorder is in any way related
to exposure to herbicides. The Board finds that the
veteran's claim for service connection for skin disorder must
be denied on this basis.
As noted, the SMRs show that he was seen for various acute
skin problems which resolved with treatment, as they were not
present at the time of his medical examination for separation
from service in May 1980. The earliest recorded medical
history places the presence of skin problems in 1984, four
years after his discharge from active service in 1980. The
veteran has not brought forth any competent evidence that
would establish a nexus between skin disorder and military
service, and no examiner has attributed the veteran's skin
disorder to military service. Thus, the competent evidence
in this case does not provide a basis for favorable action on
the veteran's claim.
Therefore, presumptive service connection for the veteran's
disability cannot be granted because the veteran's skin
disorders are not among the enumerated diseases listed in 38
C.F.R. § 3.309 that have been determined by the Secretary,
after weighing the scientific evidence, as having a positive
association with exposure to herbicide agents. Direct
service connection cannot be granted because the evidence
currently contained within the claims file does not establish
that the veteran's current skin disorders were incurred as
the result of any incident (including herbicide exposure)
during service, and does not establish that there exists a
medical nexus between the veteran's skin disorders and his
period of service.
The preponderance of the evidence is against the claim, and
there is no reasonable doubt to be resolved. 38 U.S.C.A.
§ 5107(b).
C. Eye disorder
At the time of the veteran's entrance onto active duty, his
distant visual acuity was 20/50 in both eyes, corrected to
20/20. In 1978 he was treated for left upper blepharitis and
conjunctivitis. In December 1979, the veteran was treated
for tearing and blurred vision in the left eye. On
examination the visual acuity was normal at 20/20. The
clinical impression was tension headaches, with normal
tearing mechanism responsible for blurred vision. At
separation examination in May 1980 clinical evaluation of the
eyes was normal and visual acuity was 20/30 bilaterally.
There was no diagnosis of an eye disorder.
Post-service records show the veteran was treated for blurred
vision diagnosed as antimetropia, astigmatism, and presbyopia
in October 2002. His ocular health was otherwise normal.
During his videoconference hearing, the veteran testified
that his eye problems began during service and that he has
had severe eye problems since that time. He indicated that
his astigmatism could have resulted from possible herbicide
exposure in the Philippines, and/or exposure to chemicals
while onboard his Navy ship.
Although the veteran was treated for blepharitis and
conjunctivitis during service, there is no evidence of a
current chronic disease process. See Clyburn v. West,
12 Vet.App. 296, 301 (1999). That a condition or injury
occurred in service alone is not enough; there must be a
current disability resulting from that condition or injury.
See Rabideau v. Derwinski, 2 Vet. App. 141, 144 (1992);
Chelte v. Brown, 10 Vet. App. 268, 271 (1997). Despite the
veteran's treatment during service, he was not diagnosed as
having any residual disability. In light of the fact that he
continued to serve until his separation in 1980 without any
further complaints or treatment, it is evident that his
symptoms were acute and transitory, and resolved in service.
As a result, the veteran's SMRs do not affirmatively
establish that a chronic eye disorder had its onset during
his active military service.
Under 38 C.F.R. § 3.303(c), congenital or developmental
disorders, including refractive errors of the eye(s), are not
diseases or injuries for the purpose of VA disability
compensation. Accordingly, while the evidence establishes
that the veteran now has antimetropia, astigmatism, and
presbyopia, service connection is not warranted for these
conditions. These are forms of refractive error. See
Dorland's Illustrated Medical Dictionary 86, 98, 1349 (28th
ed.1994).
Post-service records show that, in general, the veteran's
ocular health was normal, with his only symptoms involving
refractive error. Vision was stable, with correction
provided as needed. As refractive error of the eye may not be
considered a disease or injury according to the laws and
regulations governing VA benefits, and as there is no
competent medical evidence that any superimposed injury
during service resulted in a decrease in visual acuity, there
can be no valid claim.
III. Earlier Effective Date - Hearing Loss and Tinnitus
Under 38 U.S.C.A. § 5110(b)(1) and 38 C.F.R. §
3.400(b)(2)(i), the effective date for a grant of direct
service connection will be the day following separation from
active service, or the date entitlement arose if a claim is
received within one year after separation from service.
Otherwise the effective date is the date of receipt of claim
or date entitlement arose, whichever is later.
A specific claim in the form prescribed by the Secretary is
necessary for disability benefits to be paid to any
individual under the laws administered by VA. 38 U.S.C.A.
§ 5101(a); 38 C.F.R. § 3.151. In this context, it should be
noted that the provisions of 38 U.S.C.A. § 5110 refer to the
date an "application" is received. While the term
"application" is not defined in the statute, the
regulations use the terms "claim" and "application"
interchangeably, and they are defined broadly to include "a
formal or informal communication in writing requesting a
determination of entitlement, or evidencing a belief in
entitlement, to a benefit." 38 C.F.R. § 3.1(p); Servello v.
Derwinski, 3 Vet.App. 196, 198 (1992).
The veteran was discharged from service in May 1980, and a
claim for service connection for hearing loss and tinnitus
was received in November 2003. In support of his claim is an
April 2004 VA examination report during which he complained
of hearing loss and tinnitus. His history of military noise
exposure included the ship's engine room and small weapons
fire. He reported that he first noticed tinnitus at the time
of discharge. The examiner noted that in-service audiometric
results from August 1976 indicated hearing within normal
limits. An audiogram from September 1977 suggested a
moderate to severe hearing loss, but an accompanying report
indicated malfunction of the audiometric equipment. No other
audiometric information was found, and the veteran denied a
history of ear pathology and reported episodes of dizziness
since 1976.
Audiometric testing revealed puretone thresholds for the
right ear were 25, 25, 25, 30, and 45 decibels at 500, 1000,
2000, 3000, and 4000 hertz (Hz), respectively, and for the
left ear at the same frequencies were 25, 25, 30, 35, and 35
decibels. Speech audiometry revealed speech recognition
ability of 80 percent in both ears. The findings were
summarized as mild to moderate right hearing low and mild
left ear hearing loss and tinnitus both as likely as not
associated with military noise exposure.
In May 2004, the RO granted service connection for hearing
loss and tinnitus, assigning noncompensable and 10 percent
ratings, respectively. The effective date established was
November 26, 2003, the date of receipt of the veteran's
claim.
The veteran essentially contends that he developed hearing
loss while in service and that he has had problems with
ringing in his ears since his service discharge. As a
result, he wants compensation from that point.
Service connection was ultimately granted based on the
veteran's specific request for service connection for hearing
loss and tinnitus received on November 26, 2003. The Board
has reviewed the evidence to determine whether a claim,
formal or informal, exists before the November 26, 2003 date
of the veteran's claim.
A careful review of the record reflects that the veteran had
previously filed claims with VA for various disabilities, but
those claims did not indicate a desire or intent to claim
service connection for hearing loss and/or tinnitus. The
record shows that the first and only claim for VA benefits
was the one date-stamped as received at the RO on November
26, 2003. With regard to this finding, the Board notes that
the claims file does not include any communication of record
dated prior to that time that can be construed as an informal
claim for benefits. 38 C.F.R. § 3.155(a). Accordingly, the
earliest date that may be assigned for service connection for
this disorder is the date he filed his claim, November 26,
2003, since the date the veteran filed his claim was more
than one year after separation from service.
The Board acknowledges the veteran's contention that his
service-connected hearing loss and tinnitus should date back
to his service discharge. Although it may be argued that
entitlement arose earlier than November 2003 based on the
medical evidence of record, "the mere presence of the
medical evidence [in the record] does not establish an intent
on the part of the veteran" to seek service connection for a
condition. Brannon v. West, 12 Vet. App. 32, 135 (1998).
The Court has emphasized this point: "The effective date of
an award of service connection is not based on the date of
the earliest medical evidence demonstrating a causal
connection [between a claimed disorder and a service-
connected disorder] but on the date that the application upon
which service connection was actually awarded was filed with
VA."
Since all of the evidence indicates that November 26, 2003,
was the first date the veteran filed a claim for hearing loss
and tinnitus and there is no evidence indicating that he
filed a claim prior thereto, the preponderance of the
evidence is against an effective date prior to November 26,
2003, and the doctrine of resolving doubt in the veteran's
behalf is not for application. 38 U.S.C.A. §§ 5101(a), 5107
(West 2002); 38 C.F.R. §§ 3.151(a), 3.400(b)(2) (2006).
ORDER
Service connection for PTSD/depression is denied.
Service connection for skin disorder, claimed as secondary to
herbicide exposure, is denied.
Service connection for an eye disorder, claimed as
astigmatism, is denied.
An effective date prior to November 26, 2003, for the grant
of service connection for hearing loss is denied.
An effective date prior to November 26, 2003, for the grant
of service connection for tinnitus is denied.
__________________________
ANDREW J. MULLEN
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
Case 1:19-cv-00711-DAD-EPG Document 61 Filed 03/31/21 Page 1 of 2
1
2
3
4
5
6
7
8 UNITED STATES DISTRICT COURT
9 FOR THE EASTERN DISTRICT OF CALIFORNIA
10
11 ADAM SHARPE, No. 1:19-cv-00711-DAD-EPG (PC)
12 Plaintiff,
13 v. ORDER CONCERNING MOTION FOR
SUMMARY JUDGMENT
14 C. CRYER, et al.,
15 Defendants.
16
17 Adam Sharpe (“Plaintiff”) is a state prisoner proceeding pro se and in forma pauperis in
18 this civil rights action filed pursuant to 42 U.S.C. § 1983. This case proceeds on Plaintiff’s
19 complaint (ECF No. 1), which he filed on May 21, 2019, against Defendant C. Cryer, J. Lewis
20 and S. Gates for deliberate indifference to a serious medical condition in violation of the Eighth
21 Amendment and against Defendant S. Smith for failure to protect in violation of the Eighth
22 Amendment. (ECF No. 33).
23 On December 24, 2020, Defendants filed a motion for summary judgment as to Defendant
24 Smith only on the ground that Plaintiff failed to exhaust his administrative remedies against
25 Defendant Smith. (ECF No. 50). Defendants attached several non-healthcare grievances and
26 supporting documents from individuals who process non-healthcare grievances. (ECF Nos. 50-4
27 & 50-5).
28 ///
1
Case 1:19-cv-00711-DAD-EPG Document 61 Filed 03/31/21 Page 2 of 2
1 Plaintiff filed an opposition to the motion on March 4, 2021. His opposition refers to, but
2 does not attach, a healthcare grievance:
3 Plaintiff did exhaust appeal Log # HC 19001205 which is also the basis of this
4 lawsuit and speaks to a general grievance on plaintiff’s treatment and living
conditions regarding his keratoconus at the time of the filing of this suit Plaintiff
5 was without proper contact lenses and thus severly visually impaired shortly after
being seriously injured in a cell assault as Plaintiff warned was a risk in BOTH
6 his reasonable accommodation request.
7 (ECF No. 57 at 8-9) (as in original).
8 Defendants filed a reply on March 12, 2021. Defendants claim it did not satisfy the
9 exhaustion requirement. (ECF No. 58 at 4). However, Defendants do not attach the grievance.
10 Given that Defendant Smith is requesting dismissal of Plaintiff’s claims as to Defendant
11 Smith based on non-exhaustion, Defendant Smith has provided information on what it claims are
12 the relevant administrative grievances, but Defendant Smith has not provided information on one
13 grievance that Plaintiff contends exhausts his administrative remedies, the Court orders as
14 follows:
15 Accordingly, IT IS HEREBY ORDERED that within fourteen days, Defendants shall file
16 a copy of Plaintiff’s administrative grievance related to “Log # HC 19001205,” as well as
17 sufficient documents or evidence to determine if that grievance was exhausted at the third level.
18
IT IS SO ORDERED.
19
20 Dated: March 31, 2021 /s/
UNITED STATES MAGISTRATE JUDGE
21
22
23
24
25
26
27
28
2
|
Case 1:21-mj-00718-CCB Document 1 Filed 07/29/21 Page 1 of 1
...
\ . ...
!IJIAGISTRATE'S CRIMINAL MINUTES - REMOVALS (Rule 5& 5.1)
,;_,,
DATE:
FILED IN OPEN COURT
7/i'f /2021 @ a:o=t
TAPE: FTR
TIME IN COURT:
MAGISTRATE JUDGE CHRISTOPHER C. BLY COURTROOM DEPUTY CLERK: JAMES JARVIS
CASE NUMBER: DEFENDANT'S NAME:
AUSA: DEFENDANT'S ATTY:
USPO / PTR: () Retained ) CJA () Waived
~ S T DATE =t/A'lltal
~ appearance hearing held.
Interpreter sworn:
----------
COUNSEL
~ appointing Federal Defender as counsel for defendant.
ORDER appointing _ _ _ _ _ _ _ _ _ _ _ _ _ _ as counsel for defendant.
ORDER: defendant to pay attorney's fees as follows:
IDENTITY / PRELIMINARY HEARING
Defendant ORALLY WAIVES identity hearing. WAIVER FILED
--
Identity hearing HELD. Def is named def. in indictment/complaint; held for removal to otherdistrict.
Defendant ORALLY WAIVES preliminary hearing in this district only. WAIVER FILED
Preliminary hearing HELD. Probable cause found; def. held to District Court for removal to other district
Commitment issued. Detention hearing to be held in charging district
BOND/PRETRIAL DETENTION HEARING
&,ernment motion for detention filed . @
✓ Pretrial hearing set for - () In charging district.)
~+-i·01\ -r :rJfJ\ttty ~ a11 CJI 31 ~)
Government motion for detention ( ) GRANTED ( ) DENIED Cau.t'rl'oor,\ ~C04g
Pretrial detention ordered. Written order to follow.
BOND set at NON-SURETY SURETY
cash property corporate surety ONLY
SPECIAL CONDITIONS:
Defendant released.
Bond not executed. Defendant to remain in Marshal's custody.
Motion
- - verbal) to reduce/revoke bond filed.
Motion to reduce/revoke bond GRANTED DENIED
See page 2
|
357 S.W.3d 137 (2011)
RANCHO LA VALENCIA, INC. and Charles R. "Randy" Turner, Appellants,
v.
AQUAPLEX, INC. and James Edward Jones, Jr., Appellees.
No. 07-06-00157-CV.
Court of Appeals of Texas, Amarillo, Panel C.
November 9, 2011.
Rehearing Overruled December 15, 2011.
*138 Craig T. Enoch, Elliot Clark, James G. Ruiz, Winstead PC, Austin, TX, for Appellants.
Ben J. Cunningham, Gary L. Lewis, D. Douglas Brothers, Amy Leila Saberian, George & Brothers LLP, Austin, TX, for Appellees.
Before QUINN, C.J., and HANCOCK and PIRTLE, JJ.
OPINION
MACKEY K. HANCOCK, Justice.
The Supreme Court of Texas remanded this matter back to this Court for consideration of whether to remand for a new trial on damages or to suggest a remittitur, and to consider issues not considered in the original opinion. See Aquaplex, Inc. v. Rancho Valencia, Inc., 297 S.W.3d 768, 777 (Tex.2009).
Background
The factual background involved in this case is explained in some detail in our original opinion and we refer the reader to that recitation. See Rancho La Valencia, Inc. v. Aquaplex, Inc., 253 S.W.3d 728, *139 730-32 (Tex.App.-Amarillo 2007). After a jury trial in 2005 that resulted in judgment being entered against Rancho La Valencia, Inc. (Rancho) and Charles R. "Randy" Turner (Turner), Rancho and Turner, appealed alleging a number of errors. Our original opinion held that Aquaplex, Inc. (Aquaplex) and James Edward Jones (Jones) were limited to one recovery. Id. at 733. Additionally, our original opinion found that the award of $283,624 in attorney's fees for breach of the Memorandum of Settlement Agreement (MSA) could not stand because appellees had elected to recover under the fraud in the MSA allegation. Id. Further, we held that the evidence was legally insufficient to support the damages awarded by the jury for fraud in connection with the MSA. Id. at 734-36.
Upon motion for rehearing, we addressed the issues of declaratory relief, the lis pendens, and injunctive relief. We held that the declaratory relief could not stand because the nature of the assignment upon which it was allegedly based was, in fact, a collateral assignment and not a complete assignment. Rancho La Valencia, Inc. v. Aquaplex, Inc., 297 S.W.3d 781, 784 (Tex. App.-Amarillo 2008) (op. on reh'g). Further, we held that granting injunctive relief to appellees could not stand, and reversed the trial court's judgment in that regard. Id. at 785.
In the Supreme Court's opinion, the Court set forth the elements of a fraud claim under the MSA. Aquaplex, 297 buckdebra@example.net. The Court then analyzed Rancho's argument that there was no evidence to support the intent element. Id. at 774-75. Ultimately, the Court held that there was legally sufficient evidence to support a finding of fraudulent intent. Id. at 775. Next, the Court addressed the issue of whether there was legally sufficient evidence for the damages awarded by the jury because of the fraudulent inducement under the MSA. Id. at 775-77. After analyzing the damages awarded, the Court held that there was legally sufficient evidence to support an award of damages for fraud under the MSA, however, not at the level awarded by the trial court. Id. at 776-77. Consequently, the Court remanded the matter to this Court to determine whether to remand for a trial on the issue of damages, suggest a remittitur, reconsider whether punitive damages are appropriate, and consider the factual sufficiency issues raised by Rancho but not yet decided by our previous opinions. Id.
Analysis
Prior to considering the issues that the Texas Supreme Court ordered us to consider, there remain some issues from the initial appeal which we must first consider.
Ratification
Appellants' initial appeal alleged that the trial court erred in refusing to submit appellants' ratification question to the jury. However, the ratification question, as suggested by appellants, went to the issue of fraud in connection with the Joint Venture Agreement (JVA). The record before us clearly demonstrates that appellees have foregone any recovery under the JVA and have elected to recover only under the fraud theory in connection with the MSA. Accordingly, there can be no abuse of discretion by the trial court in connection with the JVA because a failure to submit that issue could not have led to the rendition of an improper judgment.[1] See TEX.R.APP. P. 44.1(a)(1); Tex. Dep't of *140 Human Servs. v. E.B., 802 S.W.2d 647, 649 (Tex.1990).
Exclusion of Evidence
Appellants next complain that the trial court abused its discretion when the trial judge ordered that appellants could not elicit testimony that they had attempted to perform their obligation to fund the $100,000 requirement for interest and property taxes in connection with the JVA property under the terms of the MSA. A trial court abuses its discretion when it acts without regard to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). Even if the trial court's stated reason for excluding the evidence was in error, if the trial court's evidentiary ruling is correct under any theory, we must uphold it. See State Bar of Tex. v. Evans, 774 S.W.2d 656, 658 n. 5 (Tex. 1989).
Appellants' contention is grounded on the theory that the trial court's exclusion of the evidence was based on the fact that testimony about conversations between trial counsel for both sides would require trial counsel be disqualified. Appellants' argument, when boiled down to its essence, is that the trial court could have allowed the testimony under Rule 3.08(a)(5) of the Rules of Professional Conduct. See TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 3.08(a)(5), reprinted in TEX. GOV'T CODE ANN., tit. 2, subtit. G., app. A (West 2005). However, appellants have not cited this Court to any cases holding that where the trial court could have taken a certain action, but did not, it must necessarily amount to an abuse of discretion. As appellees point out, the Texas Supreme Court has concluded that disqualification of trial counsel is a severe measure that impacts a litigant's ability to have his case tried by counsel of his choice. See In re Nitla, 92 S.W.3d 419, 423 (Tex.2002) (discussing disqualification of trial counsel in a mandamus proceeding). Thus, we have competing interests at play, namely, the interest of appellees to go forward with the counsel of their choosing and the interest of appellants to present the buckdebra@example.net.
In balancing these competing interests, we note that, the record demonstrates that the offer to fund the $100,000 account occurred after March 25, 2005, the final date for performance under the MSA. Further, the nature of the conversation was that appellants wanted to revive discussion of settlement under the MSA, while appellees already considered the MSA breached. Therefore, there is a real issue regarding whether the purported evidence had any relevance at that point in time. See In re Slusser, 136 S.W.3d 245, 248-49 (Tex.App.-San Antonio 2004, orig. proceeding) (holding that, unless the offered testimony is necessary to establish an essential element on behalf of the testifying lawyer's client, the trial court should not disqualify counsel to allow the testimony). The timing of the proposed offer to revive the MSA leads us to the conclusion that the evidence was not relevant.
When reviewing the trial court's ruling in light of the record before us, we have determined that the trial court followed the guiding rules and principles of buckdebra@example.net. See Downer, 701 buckdebra@example.net. Accordingly, the trial court could not have abused its discretion. Id. Therefore, appellants' issue regarding exclusion of the evidence about an offer to pay the $100,000 is overruled. State Bar of Tex., 774 S.W.2d at 658 n. 5.
Declaration That Appellants Had Breached the MSA as a Matter of Law
Appellants next contend that the trial court erred when it issued an order, during a pre-trial hearing, finding appellants *141 had breached the MSA as a matter of law. According to appellants, the order was in error because there was neither a motion to enforce the MSA pending before the trial court nor was there a motion for summary judgment pending before the trial court. The essence of appellants' complaint is that the trial court took this action without any proper request or authority to do so.
Appellants' contention does not consider the authority of a trial court to act pursuant to Texas Rule of Civil Procedure 166(g). See TEX.R. CIV. P. 166(g).[2] Rule 166(g) permits a trial court to identify legal matters to be ruled on or decided by the trial court in a pre-trial hearing. Id. The record before us reflects that the trial court held a pre-trial hearing on November 28, 2005, that encompassed a number of issues and, during that hearing, the issue of appellants' failure to fund the MSA was discussed. At the conclusion of that discussion, the trial court ruled that appellants had breached the MSA as a matter of law. We are convinced that the trial court's act was correct pursuant to Rule 166(g) and was not error. See Walden v. Affiliated Computer Servs. Inc., 97 S.W.3d 303, 322 (Tex.App.-Houston [14th Dist.] 2003, pet. denied). Accordingly, appellants' issue is overruled.
Crime-Fraud Exception
Appellants next contend that the trial court committed harmful error when it found the crime-fraud exception applied to the testimony of appellants' previous attorney, Kemp Gorthey. It is appellants' position that no prima facie showing of fraud was made that authorized the trial court to admit Gorthey's testimony over appellants' assertion of privilege. Texas Rule of Evidence 503 provides that communications between a client and his attorney are privileged and the client can refuse to disclose, and prohibit others from disclosing, those confidential communications. TEX.R. EVID. 503(b), (c). However, Rule 503(d)(1) provides an exception to the privilege granted. The exception states:
(d) Exceptions. There is no privilege under this rule:
(1) Furtherance of crime or fraud. If the services of the lawyer were sought or obtained to enable or aid anyone to commit or plan to commit what the client knew or reasonably should have known to be a fraud.
TEX.R. EVID. 503(d)(1).
On March 23, 2005, appellants' trial counsel filed a motion to withdraw and request for continuance. In his verified motion, Gorthey outlined, as cause for the motion, that he was of the professional opinion that appellants were attempting to use his services to perpetrate a fraud. The trial court allowed counsel to withdraw by written order entered on March 24, but denied the motion for continuance. On March 25, Rancho filed a voluntary petition in bankruptcy, and the case was removed to Federal Court that same day. While the bankruptcy proceeding was pending, appellees issued a subpoena duces tecum for Gorthey for August 24. On August 23, appellants applied for a protective order. A deposition was commenced on August 24, but the documents subpoenaed were furnished for an in camera inspection by the judge hearing only the adversary proceeding. Subsequently, on October 13, the Bankruptcy Court for the Northern District of Texas (Dallas Division) ruled that the bankruptcy had been filed in bad faith. The bankruptcy was *142 dismissed with prejudice, and, on October 17, the case was remanded to State Court.
On October 19, appellees filed a motion to compel production of the documents and to depose Gorthey. The trial court in this matter considered the motion to compel on November 3, and, after an in camera inspection of the documents and hearing the arguments of counsel, it ordered that those documents be produced and the deposition of Gorthey be taken. The court expressly allowed appellees to question Gorthey about communications with his client regarding the subject matter of the fraud in question. No application for writ of mandamus was pursued by appellants following the trial court's ruling on the motion to compel. Prior to the trial of this matter, appellants urged no motions requesting a running objection to the introduction of the documents at issue or Gorthey's testimony. The matter was raised to a limited extent during the discussions of a motion in limine presented by appellants. However, during the trial of the case, appellants' voiced no objection when the documents at issue and Gorthey's testimony were introduced. Further, from the record, we find that Turner testified at length about the facts surrounding Gorthey's withdrawal and the allegations of fraud.
In analyzing appellants' issue regarding the attorney-client privilege, we first observe that appellants did not challenge the ruling of the trial court that a prima facie case had been established by writ of mandamus. The pursuit of a writ of mandamus to reverse the ruling of the trial court is a method of presenting an allegation of an erroneous trial court ruling for review. See Barnes v. Whittington, 751 S.W.2d 493, 496 (Tex.1988). However, appellants did not pursue such relief.
The subject matter was discussed during a pre-trial hearing that considered a number of matters, including motions in limine. However, even if the record demonstrated that the evidence now complained of was part of that discussion, a ruling on a motion in limine preserves nothing for review. Richmond Condos. v. Skipworth Commercial Plumbing, Inc., 245 S.W.3d 646, 665 (Tex.App.-Fort Worth 2008, pet. denied) (citing Hartford Accident & Indem. Co. v. McCardell, 369 S.W.2d 331, 335 (Tex.1963)).
The record further demonstrates that, when the documents were offered during the trial, appellants' counsel stated, "No objections to those, Your Honor." In order to preserve a complaint for our review, a party must present the trial court with a timely request, objection, or motion that states the specific grounds for the desired ruling. See TEX.R.APP. P. 33.1(a). Here, appellants wholly failed to do so. Further, when a party affirmatively asserts that he or she has "no objection" to the admission of the complained-of evidence, any error in the admission of the evidence is waived, even in the face of a pre-trial ruling. See Tex. Dep't of Transp. v. Pate, 170 S.W.3d 840, 850 (Tex.App.-Texarkana 2005, pet denied). Accordingly, nothing has been preserved for appeal and the complaint has been waived. Richmond Condos., 245 S.W.3d at 665 (citing Bushell v. Dean, 803 S.W.2d 711, 712 (Tex.1991) (op. on reh'g)). Finally, the record shows that the subject matter of the documents was discussed at length during the testimony of Turner without objection. For all of the reasons stated above, appellants' issue is overruled.
Factual Sufficiency
The Texas Supreme Court's opinion directs this Court to consider the factual sufficiency issues raised by appellants and not heretofore addressed. In reviewing the initial briefing filed by appellants, we have identified a challenge to the factual sufficiency of the evidence to support *143 the jury's finding of fraud in connection with the execution of the MSA. Specifically, appellants argue that the evidence was overwhelming that appellants intended to perform pursuant to the terms of the MSA.[3]
Standard of Review
In reviewing a challenge to the factual sufficiency of the evidence to support an adverse jury finding on an issue upon which the opposing party had the burden of proof, we will set aside the jury's finding only if the evidence supporting the same is so weak as to be clearly wrong and manifestly unjust. See Int'l Metal Sales, Inc. v. Global Steel Corp., No. 03-07-00172-CV, 2010 WL 1170218, at *3-4, 2010 Tex.App. LEXIS 2201, at *14-15 (Tex.App.-Austin Mar. 24, 2010, pet, denied) (citing Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986)). In making this determination, we are instructed to consider, weigh, and examine all of the evidence in the record, both supporting and against the finding. See Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex.1989). Additionally, we are mindful that, when we apply these standards of judicial review in a factual sufficiency scenario, it is the jury's province to judge the credibility of the witnesses and the weight to be given their testimony. See Walter Baxter Seed Co. v. Rivera, 677 S.W.2d 241, 244 (Tex.App.-Corpus Christi 1984, writ ref'd n.r.e.). Likewise, it is the jury's duty to resolve any conflicts in the testimony. Id.
Analysis
The evidence presented to the jury regarding fraud in the execution of the MSA revolved around actions that Turner took after the MSA had been signed. Specifically, the steps Turner took to effectuate the MSA. Testimony revealed that the attorney then representing appellants continued to question whether Turner intended to fund the $100,000 requirement of the MSA. Much of the evidence centered on Turner's insistence that he was going to fund the requirement but that other things needed to happen. Ultimately, the attorney formed a conclusion that Turner had no intent to effectuate the MSA and so testified. When a timeline is constructed regarding the events leading up to the failure of the MSA to be completely funded, there was evidence presented to the jury that Turner was consulting with bankruptcy attorneys in another city at the same time he was insisting to his trial counsel that he intended to abide by the MSA. Most of the testimony highlighted by appellants in their brief that contradicts the jury's answer to the fraud question consists of Turner's self-serving statements of what he intended to do. From a total review of all of this evidence, it is clear that the issue was resolved based upon the credibility of the witnesses and the weight to be given their testimony. This is the singular province of the jury. Id. Likewise, resolving those conflicts in the evidence was the duty of the jury. Id. Based upon these considerations, we cannot say that the answer of the jury to the question about fraud was clearly wrong and unjust. See Int'l Metal Sales, Inc., 2010 WL 1170218, at *3-4, 2010 Tex.App. LEXIS 2201, at *14-15. Accordingly, we overrule appellants' issue regarding the factual sufficiency of the evidence to support the jury's fraud finding.
Damages and Remittitur
Next, we turn to the issue of damages as determined by the jury. In our *144 original opinion, we held that there was no evidence to support the award of damages. See Rancho La Valencia, Inc., 253 buckdebra@example.net. The Texas Supreme Court disagreed and held that, under the "benefit-of-the-bargain" measure of damages, appellees suffered some damages in the categories of: 1) attorney's fee incurred because of the Rancho bankruptcy; 2) damages from Rancho's refusal to permit the sale of the property after the execution of the MSA; 3) damages arising from the refusal of Rancho to fund the $100,000 pursuant to the MSA; and 4) damages suffered due to loss of the forbearance buckdebra@example.net. However, the Supreme Court further found that the damages awarded were calculated incorrectly, and invited this Court to order a remittitur or to order a new trial on the issue of damages. Aquaplex, Inc., 297 buckdebra@example.net. Because of the state of the record, we will remand this matter to the trial court for a new trial on damages. See Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 51-52 (Tex. 1998). Because of our disposition of this matter by remand for a new trial on damages, any determination of punitive damages by us at this time would be speculative. Accordingly, the issue of the amount of punitive damages must be addressed by the trial court.
Conclusion
Having overruled all of Rancho's issues regarding liability and sufficiency of the evidence, we affirm the judgment of the trial court on liability for fraud in the execution of the MSA, but remand to the trial court for a new trial on the issue of damages, including the amount of punitive damages.
NOTES
[1] Further, we note that since Aquaplex elected post-judgment to forego any recovery under the JVA, if the trial court erred regarding submission of the ratification issue, such error would be harmless. See TEX.R.APP. P. 44.1(a)(1).
[2] Further reference to the Texas Rules of Civil Procedure will be by reference to "Rule ___"
[3] Our examination of the briefs filed by appellants reveals that the other matters complaining of the factual sufficiency of the evidence dealt with the JVA. Appellees have foregone any recovery under the JVA and, accordingly, those issues are not before the Court.
|
This action is based upon a promissory note. The defendants denied liability, and affirmatively pleaded payment. The cause was tried to the court without a jury, and resulted in findings of fact *Page 52
and conclusions of law denying a recovery. From the judgment entered dismissing the action, the plaintiff appeals.
June 30, 1922, the respondents, Richard M. Schultz and Bertha Schultz, his wife, signed a note for $2,860, with interest at the rate of six per cent per annum, payable to John M. Morlar, the appellant. This note was secured by a third mortgage upon real estate in Pacific county. The first mortgage thereon was held by the First National Bank of Bellingham. During the latter part of the year 1926, the bank desired, for reasons not here material, to secure a release of the second and third mortgages. In pursuance of this desire, a representative of the bank communicated with the appellant, and later with his attorney. Negotiations took place between the attorney and a representative of the bank, and it was finally agreed that the release would be executed in consideration of the payment of $150. The release was prepared by the representative of the bank, using a printed form which recited that the debt, as well as the lien of the mortgage, was released and discharged. The release and a bank draft for $150 were sent to the attorney for the appellant. The attorney struck from the release the portion satisfying the debt, and wrote therein in typewriting the following: "but no part of the debt heretofore secured by said mortgage shall be discharged hereby." Thereafter, the release was signed by the appellant and returned to the agent of the bank, who, at or about the time of recording it, became aware that the typewritten portion had been placed therein. The note was not surrendered, and no demand was made for such surrender. The matter remained in this condition until the present action was instituted in June, 1928.
The respondents claim that the intention was that *Page 53
the $150 was compensation for the satisfaction, not only of the lien of the mortgage, but also the debt evidenced by the note. The appellant says that the understanding was that the lien of the mortgage alone was to be released for the $150.
[1] Rem. Comp. Stat., § 3512, provides:
"The holder may expressly renounce his rights against any party to the instrument, before, at, or after its maturity. An absolute and unconditional renunciation of his rights against the principal debtor made at or after the maturity of the instrument discharges the instrument. But a renunciation does not affect the rights of a holder in due course without notice. A renunciation must be in writing, unless the instrument is delivered up to the person primarily liable thereon."
In Baldwin v. Daly, 41 Wash. 416, 83 P. 724, the court, with reference to this statute, said:
"This plainly provides that the renunciation of a debt must be in writing where the debt is evidenced by a negotiable instrument, and if `renunciation' is used therein in the sense of `release,' there can be no question that the appellant must show a written renunciation in order to prove the allegations of his answer. Counsel for appellant argues that the word is used in a sense different from that of release, and that while a renunciation must be by a writing, a release may be proved by parol. But we cannot think the statute permits of this distinction. The words, `The holder may expressly renounce his rights against any party to the instrument,' must refer to the release and discharge of a party to the instrument from his obligation to pay it, else they can have no legitimate meaning."
[2] In the case now before us, there was no release in writing, and the note was not surrendered. As pointed out, the release expressly provided that the debt was not discharged. The respondents did not seek to have the release reformed on the ground that there had been a mutual mistake. The release not *Page 54
covering the discharge of the debt, but expressly providing otherwise, and the note not having been surrendered, the release of the mortgage lien alone did not discharge the debt evidenced by the note.
The judgment will be reversed, and the cause remanded with direction to the superior court to enter a judgment in favor of the appellant.
MILLARD, PARKER, FRENCH, and TOLMAN, JJ., concur. |
197 Md. 1 (1951)
77 A.2d 779
BEARINGS SERVICE COMPANY
v.
BALTIMORE TRANSIT COMPANY
[No. 61, October Term, 1950.]
Court of Appeals of Maryland.
Decided January 10, 1951.
The cause was argued before MARBURY, C.J., and DELAPLAINE, COLLINS, GRASON, HENDERSON and MARKELL, JJ.
Edwin H. Brownley, with whom was Karl F. Steinmann on the brief, for the appellant.
A. Adgate Duer and Hamilton O'Dunne for the appellee.
GRASON, J., delivered the opinion of the Court.
The Bearings Service Company (plaintiff below-appellant here) sued the Baltimore Transit Company (defendant below-appellee here) in the Superior Court of Baltimore City for damages resulting to its truck, occasioned by a collision between the truck and one of the street cars of the Transit Company at the intersection formed by Madison Avenue and Mosher Street, Baltimore City. The case was tried before a jury and resulted in a verdict in favor of appellant for $320.57. Subsequently appellee filed a motion for a judgment n.o.v. The court granted the motion and entered a judgment for appellee and appellant appealed therefrom to this court. This requires us to view the testimony in the case, because if there is any evidence in the record, however slight, legally sufficient as tending to prove negligence, the weight and value of such negligence was *3 for the jury; and if the record discloses such evidence the case must be reversed; if not, the action of the lower court must be affirmed. Valench v. Belle Isle Cab Co., 196 Md. 118, 75 A.2d 97; Baltimore Transit Co. v. Worth, 188 Md. 119, 52 A.2d 249, 5 A.L.R. 2d 740; Armiger v. Baltimore Transit Co., 173 Md. 416, 196 A. 111; Beck v. Baltimore Transit Co., 190 Md. 506, 58 A.2d 909.
Madison Avenue runs generally north and south, and Mosher Street runs east and west. The appellee's street car tracks are on Madison Avenue. The accident occurred on the morning of June 1, 1948, about 11:30 o'clock. The weather was clear and the streets dry. The appellant's truck, traveling west on Mosher Street, arrived at the intersection. Two men, one of whom was the witness Stowars called by the plaintiff, were talking at the northeast corner formed by the intersection of the two streets. He said the street car was proceeding north on Mosher Street, about in the middle of the block formed by Lafayette Avenue on the south and Mosher Street on the north. "The truck had pulled up to the corner, and he pulled out, you see, going on across, which I say to the guy, `He better step it up because that street car is coming pretty fast, he will tear him up', so just at that time I watched him, standing right there when it happened, this street car did hit the rear of the truck and it turned the truck around a little south and the street car went down and he stopped." He stated that the street car "was going pretty fast". He further testified: "I would say the truck was going he had it in low gear. I could tell the way the truck was pulling. He could have been going 12 or 15 miles an hour at the tops".
The witness Wiggins was driving the truck. He testified: "Well, as I pulled up to Madison Avenue and Mosher Street I looked up Mosher Street I mean Madison Avenue and seen the street car headed that way; the street car was about middle way of the block." He said when he first saw the street car he was "right on the curb on the housing line". That is to say, he *4 was at the building line on Mosher Street when he first saw the street car. He could not say how fast the street car was moving, but he thought he had time to cross the intersection; he was traveling about ten miles per hour when he entered the intersection and could have stopped his truck within ten feet. He said that the brakes were "fine".
"Q. Mr. Wiggins, you, I believe, stated that you looked south on Madison Avenue and saw the street car half a block away? A. That is right.
"Q. And then you proceeded forward? A. Yes, sir.
"Q. Did you look again to see where the street car was before you got to the north bound tracks? A. No, sir, after I seen him that distance I went on across."
The point of impact on the truck was to the rear of the door, and as a result of the collision the truck came to a stop facing in a southerly direction on Madison Avenue. The street car stopped with the center door opposite the pedestrian walk on the north side of the intersection, the front of the street car approximately twenty-two feet past the north curb line of Mosher Street.
Keller, the operator of the defendant's street car, testified that from Lafayette Avenue northerly to Mosher Street is one block. It is down grade to the north. He was driving this car north and was drifting and was not "feeding it power at all". He was going between fifteen and twenty miles an hour. He slackened his speed to about ten miles per hour just a little north of the center of the block, "a car length and a half from the building line" on Mosher Street, and retained that speed up to the building line. He said: "I was doing about ten miles an hour when I was at the building line intending to stop my car." The street car was under control. The witness testified he saw the truck first when the street car approached close to the intersection, but could not see it before because of the buildings which line Madison Avenue. When the street car was between the south building line and the curb line on Mosher Street he thought that the truck was going to stop. At that point *5 the street car was going from five to eight miles an hour and it was at this point that he first had a good view of Mosher Street. He sounded the gong on the street car and applied the power when the front of the street car was about at the sidewalk. He did not put on much power. As soon as he discovered that the truck was not going to stop he applied the brakes and did everything he could to stop the car. The street car was being operated at ten miles per hour and could have been stopped in a distance of a street car and a half. Although the brakes were applied immediately, the collision occurred. He further testified he thought the truck was going to stop and that it "seemed as if it was stopping for me. I sounded my gong and applied my power to go on across".
The witness Davlin was midway of the block between Lafayette Avenue and Mosher Street. He testified that the street car was traveling at a rapid rate of speed in the middle of the block. He did not see the truck before the accident occurred, nor did he see the accident, except at the very moment of the impact.
There were three other witnesses called in the case. The testimony of two, called by the defendant, related to speed, and said the car was traveling moderately; and the other witness testified as to measurements.
The plaintiff, in its brief, states that the only question in controversy is: "Was the Plaintiff's chauffeur, under the facts and circumstances in this case, guilty of contributory negligence as a matter of law, because, before crossing the northbound tracks of the Transit Company the Plaintiff's chauffeur did not look the second time". It is well settled that the rights of operators of street cars and automobiles to the use of the streets of a city are equal, and the duties of their operators in reference to the observance of precautions against injuries reciprocal. Rumbley v. Baltimore Transit Co., 194 Md. 164, 69 A.2d 805; United Railways & Electric Co. v. Mantik, 127 Md. 197, 96 A. 261. It is also well settled that where the plaintiff in a suit for damages is guilty of contributory *6 negligence the negligence of the defendant becomes immaterial. Girton v. Baltimore Transit Co., 192 Md. 671, 65 A.2d 329; Heying v. United Railways Co., 100 Md. 281, 59 A. 667, 668.
In the Heying case, supra, the street car was almost a block away when the plaintiff, driving a wagon, started to cross the tracks and was struck before she completed the crossing. The court said: "It is apparent from all the evidence that the car must have been a very short distance from the corner when the plaintiff, with a reckless disregard of her safety, or perhaps more likely, a want of appreciation of her danger, drove directly on the track in front of the car." A recovery was refused.
In the Girton case, supra [65 A.2d 332], the plaintiff was driving an automobile west on Lafayette Avenue. A street car was southbound on Madison Avenue. Plaintiff testified that when he approached Madison Avenue he slowed down to a speed of about five miles an hour. He said that he first looked to the left and saw that it was clear and then looked to the right and saw the street car about one-half a block away. He said there were some people on the northwest corner who were stepping off the curb into the street as if to board the street car, and as the car was slowing down he assumed that the motorman would stop for passengers. He accordingly increased his speed and started across Madison Avenue. When he looked again he saw that the street car had not stopped but had increased its speed. We said in that case: "Generally, when the driver of an automobile approaches a street car track at an intersection, he cannot assume that an approaching car will stop at the intersection, but he must pay attention to the approach of the car, and if he deliberately takes the risk of driving across the track in disregard of the danger of a collision, when a person of ordinary prudence would not take such a risk under the circumstances, he is guilty of negligence. (Authorities cited.) * * * Even an honest belief of a driver that he can cross *7 an intersection safely will not excuse his negligence in attempting to cross in front of an approaching street car, * * *." In that case a recovery was denied.
In the case of Gross v. Baltimore Transit Co., 192 Md. 278, 64 A.2d 147, we said that the truck driver had a duty not only to look before starting to make a left turn at the intersection over street car tracks, but to keep on looking until the track was reached.
In Crawford v. Baltimore Transit Co., 190 Md. 381, 58 A.2d 680, 683, a truck driver approaching a grade crossing did not see a street car when he looked while twenty-five feet from the track. The court said: "Even if we assume, without deciding however, that there was some evidence of unreasonable or improper speed on the part of the street car, the appellant was clearly at fault in failing to look again before he ventured upon the tracks. `In thus looking too soon and too late to avoid the danger, the truck driver did not exercise the degree of care required by ordinary prudence.' Colgate & Co. v. United Rys. & Electric Co., 156 Md. 472, 144 A. 519, 520. `It was not only his duty to look before starting to cross the intersection but to keep on looking until the track, the real point of danger, was reached.'" (Citing authorities.)
The evidence in this case is perfectly clear. When the operator of the truck arrived at the northeast corner of the intersection formed by these two streets he brought his truck almost to a stop. There he saw the appellee's street car traveling north. It was nearer Mosher Street than Lafayette Avenue. He was at that time, he thinks, about forty or forty-two feet from the street car track; the brakes on the truck were good and he could have stopped the truck within ten feet. He did not look at the street car again. This testimony is uncontradicted. One witness testified that when he proceeded across he was in low gear and the witness said to a man with whom he was talking that if the truck didn't hurry up it was going to get hit.
*8 The testimony of the operator of the street car is that he thought the truck was going to stop and let him go across, and he sounded his gong and proceeded across the intersection. It is perfectly apparent that the truck driver thought he could cross the railway tracks ahead of the street car. This case is governed by the principle set out in the old case of Heying v. United Railways Company, supra, which has been followed in the late cases from which we have quoted. It was the duty of the driver of the truck to keep his eye on the railway tracks, which was the place of danger. He approached the tracks without looking at the street car after he entered the intersection. Assuming, without deciding, that the operator of the street car was negligent, it is immaterial in this case. The plaintiff did not look "too soon and too late". He looked too early, and then did not look at all to see where the approaching street car was when he reached the tracks. There is not the slightest doubt, had he looked he could have stopped his truck in a place of safety, and thus have avoided the accident. His negligence was outstanding, prominent, and conspicuous. The judgment will be affirmed.
Judgment affirmed, with costs.
|
Citation Nr: 1028975
Decision Date: 08/03/10 Archive Date: 08/16/10
DOCKET NO. 08-00 301 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in St. Paul,
Minnesota
THE ISSUES
1. Entitlement to service connection for a gynecological
disorder, claimed as dysfunctional uterine bleeding, to include
as due to undiagnosed illness.
2. Entitlement to service connection for a right hip disorder,
claimed as osteoarthritis, right great trochanter.
REPRESENTATION
Appellant represented by: Minnesota Department of Veterans
Affairs
WITNESSES AT HEARINGS ON APPEAL
Appellant and husband
ATTORNEY FOR THE BOARD
J. Davitian, Counsel
INTRODUCTION
The Veteran served on active duty from October 1997 to December
2005.
This case is before the Board of Veterans' Appeals (BVA or Board)
on appeal from a May 2006 rating decision of the Department of
Veterans Affairs (VA) Regional Office (RO) in St. Louis,
Missouri, which denied the benefits sought on appeal. A May 2007
rating decision issued after the receipt of additional service
treatment records held that no change was warranted in the May
2006 rating decision.
The Veteran and her husband testified during an April 2010
hearing before the undersigned Veterans Law Judge. A transcript
of that hearing is in the claims file.
The issue of entitlement to service connection for a right hip
disorder, claimed as osteoarthritis, right great trochanter, is
addressed in the REMAND portion of the decision below and is
REMANDED to the RO via the Appeals Management Center (AMC), in
Washington, DC.
FINDING OF FACT
There has been no demonstration by competent and credible
evidence of record that the Veteran has a chronic disability
manifested by a gynecological disorder, claimed as dysfunctional
uterine bleeding, or that any such disorder is related to an in-
service disease or injury.
CONCLUSION OF LAW
Chronic disability manifested by a gynecological disorder,
claimed as dysfunctional uterine bleeding, to include as due to
undiagnosed illness, was not incurred in or aggravated by active
service, and may not be presumed to have been incurred or
aggravated in active service. 38 U.S.C.A. §§ 1110, 1117, 1131,
5103, 5103A, 5107 (West 2002 & Supp. 2009); 38 C.F.R. §§ 3.102,
3.159, 3.303, 3.317 (2009).
REASONS AND BASES FOR FINDING AND CONCLUSION
Veterans Claims Assistance Act of 2000 (VCAA)
As provided for by the VCAA, VA has a duty to notify and assist
claimants in substantiating a claim for VA benefits. 38 U.S.C.A.
§§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2009);
38 C.F.R. §§ 3.102, 3.156(a), 3.159 and 3.326(a) (2009).
Upon receipt of a complete or substantially complete application
for benefits, VA is required to notify the claimant and his or
her representative, if any, of any information, and any medical
or lay evidence, that is necessary to substantiate the claim.
38 U.S.C.A. § 5103(a); 38 C.F.R. § 3.159(b); Quartuccio v.
Principi, 16 Vet. App. 183 (2002). Proper notice from VA must
inform the claimant of any information and evidence not of record
(1) that is necessary to substantiate the claim; (2) that VA will
seek to provide; (3) that the claimant is expected to provide;
and (4) must ask the claimant to provide any evidence in her or
his possession that pertains to the claim in accordance with
38 C.F.R. § 3.159(b)(1). This notice must be provided prior to
an initial unfavorable decision on a claim by the agency of
original jurisdiction (AOJ). Mayfield v. Nicholson, 444 F.3d
1328 (Fed. Cir. 2006); Pelegrini v. Principi, 18 Vet. App. 112
(2004).
For claims pending before VA on or after May 30, 2008, 38 C.F.R.
§ 3.159 was amended to eliminate the requirement that VA request
that a claimant submit any evidence in his or her possession that
might substantiate the claim. See 73 FR 23353 (Apr. 30, 2008).
Here, the VCAA duty to notify was satisfied by a June 2005 letter
sent to the appellant that fully addressed all necessary notice
elements for direct service connection and was sent prior to the
initial AOJ decision in this matter. The letter informed the
appellant of what evidence was required to substantiate the claim
and of the appellant's and VA's respective duties for obtaining
evidence.
The Veteran has not been provided notice with respect to claims
for service connection due to undiagnosed illness.
In Sanders v. Nicholson, 487 F.3d 881 (Fed. Cir. 2007), the
United States Court of Appeals for the Federal Circuit (Federal
Circuit) held that any error by VA in providing the notice
required by 38 U.S.C. § 5103(a) and 38 C.F.R. § 3.159(b)(1) is
presumed prejudicial, and that once an error is identified as to
any of the four notice elements the burden shifts to VA to
demonstrate that the error was not prejudicial to the appellant.
The Federal Circuit stated that requiring an appellant to
demonstrate prejudice as a result of any notice error is
inconsistent with the purposes of both the VCAA and VA's uniquely
pro-claimant benefits system.
Instead, the Federal Circuit held in Sanders that all VCAA notice
errors are presumed prejudicial and require reversal unless VA
can show that the error did not affect the essential fairness of
the adjudication. To do this, VA must show that the purpose of
the notice was not frustrated, such as by demonstrating:
(1) that any defect was cured by actual knowledge on the part of
the claimant; (2) that a reasonable person could be expected to
understand from the notice what was needed; or (3) that a benefit
could not have been awarded as a matter of law. Although not
specifically discussed by the court, some other possible
circumstances that could demonstrate that VA error did not
prejudice the claimant include where the claimant has stated that
he or she has no further evidence to submit, or where the record
reflects that VA has obtained all relevant evidence.
In this case, the Board finds that the notice error did not
affect the essential fairness of the adjudication. In this
regard, the Board notes that during the April 2010 hearing, the
Veteran and her representative contended that her service
connection claim should also be adjudicated as due to an
undiagnosed illness. This contention shows that the Veteran had
actual notice of the elements required to establish service
connection based on an undiagnosed illness. The fact that the
Veteran has been represented by a service organization during the
appeal is also relevant. Overton v. Nicholson, 20 Vet. App. 427,
438 (2006) (appellant's representation by counsel "is a factor
that must be considered when determining whether that appellant
has been prejudiced by any notice error"). These factors
demonstrate that the Veteran has submitted all evidence and/or
information in her possession and thus the purpose of the VCAA
was not frustrated.
A March 2006 letter provided the criteria for assignment of an
effective date and disability rating in the event of award of the
benefit sought. See Dingess v. Nicholson, 19 Vet. App. 473
(2006); 38 U.S.C. § 5103(a) and 38 C.F.R. § 3.159(b).
VA has a duty to assist the Veteran in the development of the
claim. This duty includes assisting the Veteran in the
procurement of service medical records and pertinent treatment
records and providing an examination when necessary. 38 U.S.C.A.
§ 5103A; 38 C.F.R. § 3.159.
The Board finds that all necessary development has been
accomplished, and therefore appellate review may proceed without
prejudice to the appellant. See Bernard v. Brown, 4 Vet.
App. 384 (1993). The RO has obtained VA treatment records. The
Veteran was provided an opportunity to set forth her contentions
during the hearing before the undersigned Veterans Law Judge. A
VA medical opinion was obtained in July 2008. To that end, when
VA undertakes to provide a VA examination or obtain a VA opinion,
it must ensure that the examination or opinion is adequate. Barr
v. Nicholson, 21 Vet. App. 303, 312 (2007). The Board finds that
the VA opinion obtained in this case is more than adequate, as it
is predicated on a reading of the Veteran's claims file and
medical records, including service treatment records and the
report of a VA outpatient gynecological consultation conducted a
short time earlier. The report considers all of the pertinent
evidence of record, to include the statements of the Veteran, and
provides a rationale for the opinion offered. Accordingly, the
Board finds that VA's duty to assist with respect to obtaining a
VA examination or opinion with respect to the issue on appeal has
been met. 38 C.F.R. § 3.159(c) (4); Nieves-Rodriguez v. Peake,
22 Vet App 295 (2008).
Significantly, neither the appellant nor her representative has
identified, and the record does not otherwise indicate, any
additional existing evidence that is necessary for a fair
adjudication of the claim that has not been obtained. Hence, no
further notice or assistance to the appellant is required to
fulfill VA's duty to assist the appellant in the development of
the claim. Smith v. Gober, 14 Vet. App. 227 (2000), aff'd 281
F.3d 1384 (Fed. Cir. 2002); Dela Cruz v. Principi, 15 Vet. App.
143 (2001); see also Quartuccio, supra.
With respect to the Veteran's claim, the Board has reviewed all
of the evidence in the claims file, with an emphasis on the
evidence relevant to this appeal. Although the Board has an
obligation to provide reasons and bases supporting this decision,
there is no need to discuss, in detail, the extensive evidence of
record. Indeed, the Court of Appeals for the Federal Circuit
(Federal Circuit) has held that the Board must review the entire
record, but does not have to discuss each piece of evidence.
Gonzales v. West, 218 F.3d 1378, 1380-81 (Fed. Cir. 2000).
Therefore, the Board will summarize the relevant evidence where
appropriate, and the Board's analysis below will focus
specifically on what the evidence shows, or fails to show, as to
the claim.
Analysis
A veteran is entitled to service connection for a disability
resulting from a disease or injury incurred or aggravated during
active service. See 38 U.S.C.A. §§ 1110, 1131; 38 C.F.R. §
3.303(a). Service connection also is permissible for any disease
diagnosed after discharge, when all the evidence, including that
pertinent to service, establishes the disease was incurred in
service. 38 C.F.R. § 3.303(d).
If there is no evidence of a chronic condition during service, or
during an applicable presumptive period, then a showing of
continuity of symptomatology after service is required to support
the claim. See 38 C.F.R. § 3.303(b). Evidence of a chronic
condition must be medical, unless it relates to a condition to
which lay observation is competent. See Savage v. Gober, 10 Vet.
App. 488, 495-498 (1997).
Service connection may be awarded on a presumptive basis to a
Persian Gulf veteran who (1) exhibits objective indications; (2)
of a chronic disability such as those listed in paragraph (b) of
38 C.F.R. § 3.317; (3) which became manifest either during active
military, naval, or air service in the Southwest Asia theater of
operations during the Persian Gulf War, or to a degree of 10% or
more not later than December 31, 2011; and (4) such
symptomatology by history, physical examination, and laboratory
tests cannot be attributed to any known clinical diagnosis.
Gutierrez v. Principi, 19 Vet. App. 1, 7 (2004); 38 U.S.C. §
1117; 38 C.F.R. § 3.317.
Objective indications of a chronic disability include both
"signs", in the medical sense of objective evidence perceptible
to an examining physician, and other, non-medical indicators that
are capable of independent verification. Disabilities that have
existed for six months or more and disabilities that exhibit
intermittent episodes of improvement and worsening over a six-
month period will be considered chronic. The six-month period of
chronicity will be measured from the earliest date on which the
pertinent evidence establishes that the signs or symptoms of the
disability first became manifest. A chronic disability resulting
from an undiagnosed illness referred to in this section shall be
rated using evaluation criteria from the VA's Schedule for Rating
Disabilities for a disease or injury in which the functions
affected, anatomical localization, or symptomatology are similar.
A disability referred to in this section shall be considered
service-connected for the purposes of all laws in the United
States. 38 C.F.R. § 3.317(a)(3-5).
Signs or symptoms which may be manifestations of an undiagnosed
illness include, but are not limited to, fatigue, signs or
symptoms involving the skin, headaches, muscle pain, joint pain,
neurologic signs or symptoms, neuropsychological signs or
symptoms, signs or symptoms involving the respiratory system
(upper or lower), sleep disturbances, gastrointestinal signs or
symptoms, cardiovascular signs or symptoms, abnormal weight loss,
or menstrual disorders. 38 C.F.R. § 3.317(b).
In addition to certain chronic disabilities from undiagnosed
illness, service connection may also be given for medically
unexplained chronic multisymptom illness (such as chronic fatigue
syndrome, fibromyalgia, and irritable bowel syndrome) that is
defined by a cluster of signs and symptoms, as well as for any
diagnosed illness that the VA Secretary determines by regulation
warrants a presumption of service connection. 38 C.F.R. §
3.317(a)(2)(i)(B).
VA is required to evaluate the supporting evidence in light of
the places, types, and circumstances of service, as evidenced by
service records, the official history of each organization in
which the veteran served, the veteran's military records, and all
pertinent medical and lay evidence. 38 U.S.C.A. § 1154(a).
In each case where a veteran is seeking service connection for
any disability, due consideration shall be given to the places,
types, and circumstances of such veteran's service as shown by
such veteran's service record, the official history of each
organization in which such veteran served, such veteran's medical
records, and all pertinent medical and lay evidence. 38 U.S.C.A.
§ 1154(a).
When there is an approximate balance of positive and negative
evidence regarding any issue material to the determination, the
benefit of the doubt is afforded the claimant. 38 U.S.C.A. §
5107(b).
During the April 2010 hearing, the Veteran described her current
symptoms in detail. She also stated that her abnormal bleeding
began after a June 2001 miscarriage. She began Depro-Provera
within six weeks of the miscarriage. Her abnormal bleeding then
became worse until she was taken off Depro-Provera and given an
IUD in 2003. The Veteran's representative requested that the
Veteran's claim be adjudicated as an undiagnosed illness.
Based on a thorough review of the record, the Board finds that
the preponderance of the evidence is against the Veteran's claim.
The evidence of record reflects that it is less likely than not
that the Veteran's post-service abnormal bleeding is related to
the abnormal bleeding she had while on active duty. The evidence
of record also reflects that the Veteran does not have an
undiagnosed illness satisfying the criteria at 38 C.F.R. § 3.317.
Initially, the Board notes that the Veteran's DD Form 214
reflects that she served in Kuwait and Iraq. Thus, the Veteran
is eligible for presumptive service connection under 38 U.S.C.A.
§ 1117. The Board also notes that the sign or symptom at issue
here - a gynecological disorder, claimed as dysfunctional uterine
bleeding - is among those listed in the pertinent regulation, and
that it was complained of during the presumptive period. See 38
C.F.R. § 3.317(b) (listing "menstrual disorders" as "signs or
symptoms").
The Veteran's service treatment records reflect that she
underwent a coloscopy in 2001 for a low-grade lesion. The
Veteran had a miscarriage followed by a D&C in June 2001. A July
2002 well woman examination report notes a c-section birth in
March 2000, and a miscarriage. The report also provides that the
Veteran used Depo for birth control and had unpredictable
spotting and bleeding since May. She stated that she had had no
period for approximately one year prior to that. In January
2003, she complained of problems with her menstrual cycle and
Depro-Provera use was noted. The assessment was amenorrhea,
likely due to Provera. In December 2003, she complained of
bleeding for four weeks. The report noted past use of Depro-
Provera. The diagnosis was dysfunctional uterine bleeding. The
Veteran switched from Depo-Provera to an IUD in 2004, which she
used until 2006.
The report of an August 2005 VA examination (conducted when the
Veteran was still on active duty), provides that the examiner
reviewed the Veteran's service treatment records. The Veteran
reported that since being in Depro-Provera in 2003, she had
irregular vaginal bleeding that occurred every six weeks. The
bleeding occurred from one day to five days. She had days where
she spotted and days where she had to change a super absorbancy
tampon every three hours. The report notes that she was gravida
2, para 1, with one miscarriage. She had no follow-up of
dysfunctional uterine bleeding since 2003.
On physical examination, the Veteran's cervix was round and
smooth. There was no vaginal discharge and rugae were normal.
The uterus was normal size, shape and consistency. There was no
tenderness on palpation of the uterus or adnexa. The pertinent
diagnosis was dysfunctional uterine bleeding.
The report of a February 2008 outpatient VA gynecological
consultation provides that the Veteran presented with irregular
bleeding, with normal cycles until seven years earlier. Results
of physical examination and endometrial biopsy were provided.
The impression was 31-year old para 1-0-1-1 with irregular
bleeding. The physician noted that it sounded as though the
Veteran had some hormone dysfunction, probably the hypothymic
pituitary ovarian axis, that had not settled down after her Depo-
Provera and other hormones. Ultrasound findings did not indicate
any fibroids to explain the abnormal bleeding.
A VA examiner reviewed the Veteran's claims file in July 2008.
In a July 2008 report, the examiner set forth the Veteran's
medical history in detail. He summarized that it appeared that
the Veteran's bleeding issues related to a time from 2001 to 2005
and were associated with a pregnancy, Depo-Provera or an IUD.
The Veteran's bleeding in 2008 was without a specific diagnosis.
The examiner therefore expressed the opinion that the Veteran's
2008 bleeding was less likely than not associated with her
bleeding related to contraception and pregnancy in previous
years.
The Board finds that the foregoing post-service medical records
do not support the Veteran's claim for service connection. They
provide no medical evidence of any objective indications of
chronic disability. They include no opinion that the Veteran has
a chronic disability due to an undiagnosed illness. Thus, they
do not support service connection based on an undiagnosed
illness. 38 C.F.R. § 3.317(a)(3), (4).
As for service connection on a direct basis, the July 2008 VA
examination report is highly probative evidence against service
connection. It is based on results from a recently conducted
gynecological VA consultation examination, and a review of the
Veteran's past medical records, including her service treatment
records. It is supported by reference to her medical history and
the history of her symptoms, as indicated by the objective
medical evidence of record. This fact is particularly important,
in the Board's judgment, as the reference makes for a more
convincing rationale. There is no competent medical evidence to
the contrary.
The Board is aware of the Veteran's own contentions that her
gynecological disorder, claimed as dysfunctional uterine
bleeding, is related to her active duty or is due to an
undiagnosed illness. These contentions do not constitute medical
evidence in support of her claim. The Veteran is not competent
to diagnose the etiology of her disability. See Bostain v. West,
11 Vet. App. 124, 127 (1998), citing Espiritu v. Derwinski, 2
Vet. App. 492 (1992). See also Routen v. Brown, 10 Vet. App.
183, 186 (1997) ("a layperson is generally not capable of opining
on matters requiring medical knowledge"). As a result, her
assertions cannot constitute competent medical evidence that she
incurred a gynecological disorder, claimed as dysfunctional
uterine bleeding, as a result of her active duty or an
undiagnosed illness.
The Board is also aware that lay testimony is competent to
establish the presence of observable symptomatology and "may
provide sufficient support for a claim of service connection."
Layno v. Brown, 6 Vet. App. 465, 469 (1994). When a condition
may be diagnosed by its unique and readily identifiable features,
the presence of the disorder is not a determination "medical in
nature" and is capable of lay observation. In such cases, the
Board is within its province to weigh that testimony and to make
a credibility determination as to whether that evidence supports
a finding of service incurrence and continuity of symptomatology
sufficient to establish service connection. See Barr v.
Nicholson, 21 Vet. App. 303 (2007).
Lay evidence can be competent and sufficient to establish a
diagnosis of a condition when (1) a layperson is competent to
identify the medical condition, (2) the layperson is reporting a
contemporaneous medical diagnosis, or (3) lay testimony
describing symptoms at the time supports a later diagnosis by a
medical professional. Jandreau v. Nicholson, 492 F.3d 1372 (Fed.
Cir. 2007).
As noted above, lay persons are competent to report objective
signs of illness. Gutierrez, supra.
Nevertheless, to the extent that the Veteran could observe
continuity of gynecological symptoms and abnormal uterine
bleeding since service, the Board finds that her opinions are
outweighed by the lack of probative medical evidence in support
of her claim. In this regard, while the Board acknowledges that
the absence of any corroborating medical evidence supporting the
assertions, in and of itself, does not render the statements
incredible, such absence is for consideration in determining
credibility. See Buchanan v. Nicholson, 451 F.3d 1331, 1336
(Fed. Cir. 2006) (noting that the absence of contemporaneous
medical documentation may go to the credibility and weight of
veteran's lay testimony, but the lack of such evidence does not,
in and of itself, render the lay testimony incredible). Simply
stated, the Board finds that the post-service medical records
(which include no evidence of objective indications of chronic
disability, and contain the probative July 2008 VA negative
medical opinion) outweigh the Veteran's contentions.
As the preponderance of the evidence is against the claim, the
benefit of the doubt doctrine is not for application. See
generally Gilbert v. Derwinski, 1 Vet. App. 49 (1990); Ortiz v.
Principi, 274 F. 3d 1361 (Fed. Cir. 2001).
ORDER
Service connection for a gynecological disorder, claimed as
dysfunctional uterine bleeding, to include as due to undiagnosed
illness, is denied.
REMAND
During the April 2010 hearing, the Veteran testified she had
received treatment for her right hip disorder while on active
duty for training at Fort Huachuca from March 2009 to July 2009.
Records of this treatment are not in the claims file.
VA has a duty to assist the appellant in obtaining evidence
necessary to substantiate a claim. 38 U.S.C.A. § 5103A; 38
C.F.R. § 3.159(c)(2) (2009). There are also heightened
obligations to assure that the record is complete with respect to
Federal Government records. 38 U.S.C.A. § 5103A; 38 C.F.R. §
3.159(c).
Accordingly, the case is REMANDED for the following action:
1. After obtaining all necessary
information from the Veteran, use all
indicated sources to obtain copies of any
reserve service treatment records that
have not been associated with the claims
file, including those from her period of
active duty for training from March to
July 2009 at Fort Huachuca.
2. Then, after conducting any additional
evidentiary development deemed necessary,
to include but not limited to a VA
examination, readjudicate the appellant's
claim. If the benefit sought on appeal
remains denied, the appellant and her
representative should be provided a
supplemental statement of the case and
afforded an opportunity to respond. The
case should be returned to the Board for
appellate review.
The appellant has the right to submit additional evidence and
argument on the matter or matters the Board has remanded.
Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment. The law
requires that all claims that are remanded by the Board of
Veterans' Appeals or by the United States Court of Appeals for
Veterans Claims for additional development or other appropriate
action must be handled in an expeditious manner. See 38 U.S.C.A.
§§ 5109B, 7112 (West Supp. 2009).
______________________________________________
U. R. POWELL
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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Citation Nr: 0609911
Decision Date: 04/05/06 Archive Date: 04/13/06
DOCKET NO. 02-03 046 ) DATE
)
)
On appeal from the
Department of Veterans Affairs (VA) Regional Office (RO)
in Chicago, Illinois
THE ISSUE
Entitlement to compensation benefits, pursuant to the
provisions of 38 U.S.C.A. § 1151, for additional right hip
disability and an acquired psychiatric disorder as a result
of VA surgical treatment during hospitalization from January
to March 1998.
REPRESENTATION
Appellant represented by: Disabled American Veterans
WITNESSES AT HEARINGS ON APPEAL
Appellant and his wife
ATTORNEY FOR THE BOARD
Thomas A. Pluta, Counsel
INTRODUCTION
The veteran had active service from December 1952 to November
1954.
This appeal to the Board of Veterans Appeals (Board) arises
from a June 2000 rating action that denied compensation
benefits pursuant to the provisions of 38 U.S.C.A. § 1151 for
additional right hip disability and an acquired psychiatric
disorder as a result of VA surgical treatment during
hospitalization from January to March 1998. The veteran
filed a Notice of Disagreement in February 2001. He and his
wife testified during a hearing before RO personnel in June
2001; a transcript of the hearing is of record. The RO
issued a Statement of the Case in February 2002, and the
veteran filed a Substantive Appeal in March 2002. In July
2002, the veteran and his wife testified during a Board
hearing before the undersigned Veterans Law Judge at the RO;
a transcript of the hearing is of record.
In December 2002, the Board determined that additional
evidentiary development was warranted in this appeal, and
undertook such development pursuant to 38 C.F.R. § 19.9
(2002) and Board procedures then in effect. By letter of
March 2003, the Board notified the veteran and his
representative of the additional development. However, the
provision of 38 C.F.R. § 19.9 purporting to confer upon the
Board the jurisdiction to adjudicate claims on the basis of
evidence developed by the Board but not reviewed by the RO
was later held to be invalid. See Disabled American Veterans
v. Secretary of Veterans Affairs, 327 F.3d 1339 (Fed. Cir.
2003). Hence, in September 2003 the Board remanded this
matter to the RO for completion of the development action
requested, and consideration of the claim in light of the
additional evidence. After accomplishing some of the
requested action, the RO continued the denial of the claim
(as reflected in the October 2005 Supplemental SOC (SSOC)),
and returned the matter to the Board for further appellate
consideration.
For reasons expressed below, the issue on appeal is again
being remanded to the RO via the Appeals Management Center
(AMC) in Washington, DC. VA will notify the veteran when
further action, on his part, is required.
REMAND
Unfortunately, the Board finds that further RO action on the
claim on appeal is warranted, even though such action will,
regrettably, further delay an appellate decision on the
matter currently on appeal.
A remand by the Board confers upon the veteran, as a matter
of law, the right to compliance with the remand instructions,
and imposes upon the VA a concomitant duty to ensure
compliance with the terms of the remand. See Stegall v.
West, 11 Vet. App. 268, 271 (1998).
In September 2003, the Board remanded this case to the RO to
obtain supplemental statements from VA physicians who
examined the veteran in December 2001. Statements were
subsequently received from Jasper Petruzzi, M.D., and Hoo
Kadhodaian, M.D. In his April 2004 statement, Dr. Petruzzi
stated that the veteran had recurrence of right hip
instability and dislocation following his 1998 VA surgery,
but opined that the proximate cause of such additional
disability was not carelessness, negligence, lack of proper
skill, or error in judgment on the part of the VA in
furnishing the surgical treatment. In his May 2004
statement, Dr. Kadhodaian stated that it was as likely as not
that the veteran's depressive symptoms were related to and a
reaction to pain and physical disability movement limitations
caused by his VA hip surgery, but opined that the proximate
cause of such additional disability was not carelessness,
negligence, lack of proper skill, error in judgment, or
similar instance of fault on the part of the VA in furnishing
the surgical treatment.
However, each physician failed to answer the additionally
requested question of whether the proximate cause of such
additional disability was an event not reasonably forseeable.
Inasmuch as that criterion serves as an additional basis for
a grant of compensation benefits under the provisions of
38 U.S.C.A. § 1151, the Board finds that Stegall requires
that this case be again remanded to the RO for compliance
with the prior Board remand, and that additional supplemental
statements responding to the additional question be obtained
from each VA physician. If either of those VA doctors is
unavailable, the claims file should be referred to another VA
physician for the supplemental statement. The Board
emphasizes that only additional statements based on the
current evidence of record are requested, not an additional
examination of the veteran, unless either physician cannot
answer the additional question without such new examination,
or either physician is unavailable.
The action identified herein is consistent with the duties
imposed by the Veterans Claims Assistance Act of 2000 (VCAA).
See 38 U.S.C.A. §§ 5103, 5103A (West 2002); 38 C.F.R. § 3.159
(2005). However, identification of specific action requested
on remand does not relieve the RO of the responsibility to
ensure full compliance with the VCAA and its implementing
regulations. Hence, in addition to the action requested
above, the RO should also undertake any other development
and/or notification action deemed warranted by the VCAA prior
to adjudicating the claim on appeal.
Accordingly, this matter is hereby REMANDED to the RO, via
the AMC, for the following action:
1. The RO should forward the claims file
to Jasper Petruzzi, M.D., for a
supplemental statement pertaining to his
medical opinion of April 24, 2004. Dr.
Petruzzi should review the claims file and
his April 2004 medical statement and
provide an opinion as to whether the
proximate cause of the veteran's
additional hip disability, recurrence of
right hip instability and dislocation
following his 1998 VA surgery, was an
event not reasonably forseeable. The
physician's printed (typewritten) report
should include the complete rationale
therefor.
2. Thereafter, the RO should forward the
claims file to Hoo Kadhodaian, M.D., for a
supplemental statement pertaining to his
medical opinion of May 2, 2004. Dr.
Kadhodaian should review the claims file
and his May 2004 medical statement and
provide an opinion as to whether the
proximate cause of the veteran's
additional psychiatric disability,
depressive symptoms related to and a
reaction to pain and physical disability
movement limitations caused by his 1998 VA
hip surgery, was an event not reasonably
forseeable. The physician's printed
(typewritten) report should include the
complete rationale therefor.
3. The Board emphasizes that only
additional statements based on the current
evidence of record are requested, not an
additional examination of the veteran,
unless either physician cannot answer the
additional question without such new
examination, or either physician is
unavailable.
If either physician is not available, the
claims file should be referred to another
VA physician for the supplemental opinion.
4. To help avoid future remand, the RO
must ensure that all requested action has
been accomplished (to the extent possible)
in compliance with this REMAND. If any
action is not undertaken, or is taken in a
deficient manner, appropriate corrective
action should be undertaken. See Stegall.
5. After completing the requested action,
and any additional notification and/or
development deemed warranted, the RO
should readjudicate the claim on appeal in
light of all pertinent evidence and legal
authority.
6, If the benefit sought on appeal
remains denied, the RO must furnish to the
veteran and his representative an
appropriate SSOC that includes clear
reasons and bases for all determinations,
and afford them the appropriate time
period for response before the claims file
is returned to the Board for further
appellate consideration.
The purpose of this REMAND is to afford due process; it is
not the Board's intent to imply whether the benefit requested
should be granted or denied. The veteran need take no action
until otherwise notified, but he may furnish additional
evidence and/or argument during the appropriate timeframe.
See Kutscherousky v. West, 12 Vet. App. 369 (1999); Colon v.
Brown, 9 Vet. App. 104, 108 (1996); Booth v. Brown, 8
Vet. App. 109 (1995); Quarles v. Derwinski, 3 Vet. App. 129,
141 (1992).
This claim must be afforded expeditious treatment. The law
requires that all claims that are remanded by the Board or
the U.S. Court of Appeals for Veterans Claims (Court) for
additional development or other appropriate action must be
handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B,
7112 (West Supp. 2005).
_________________________________________________
JACQUELINE E. MONROE
Veterans Law Judge, Board of Veterans' Appeals
Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the
Board is appealable to the Court. This remand is in the
nature of a preliminary order and does not constitute a
decision of the Board on the merits of the appeal. 38 C.F.R.
§ 20.1100(b) (2005).
|
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
592
CA 11-02280
PRESENT: SMITH, J.P., FAHEY, PERADOTTO, AND LINDLEY, JJ.
RENEE JONES, CLAIMANT-APPELLANT,
V MEMORANDUM AND ORDER
CITY OF BUFFALO SCHOOL DISTRICT,
RESPONDENT-RESPONDENT.
CAMPBELL & SHELTON LLP, EDEN (R. COLIN CAMPBELL OF COUNSEL), FOR
CLAIMANT-APPELLANT.
Appeal from an order of the Supreme Court, Erie County (Diane Y.
Devlin, J.), entered August 11, 2011 in a personal injury action. The
order denied the motion of claimant to renew her prior application for
leave to serve a late notice of claim.
It is hereby ORDERED that the order so appealed from is
unanimously affirmed without costs.
Memorandum: Claimant appeals from an order denying her motion to
renew a prior application for leave to serve a late notice of claim.
It is well settled that “[a] motion for leave to renew ‘shall be based
upon new facts not offered on the prior [application] that would
change the prior determination’ . . ., and ‘shall contain reasonable
justification for the failure to present such facts on the prior
[application]’ ” (Doe v North Tonawanda Cent. School Dist., 91 AD3d
1283, 1284). Here, “[t]he motion to renew was properly denied
[inasmuch as claimant] failed to offer a valid excuse for failing to
submit the new material on the original [application]” (Linden v
Moskowitz, 294 AD2d 114, 116, lv denied 99 NY2d 505; see Schilling v
Malark, 13 AD3d 1153, 1154).
Entered: April 20, 2012 Frances E. Cafarell
Clerk of the Court
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ADDENDUM TO SEPARATION AGREEMENT This Addendum to Separation Agreement (“Agreement”) is entered into as of May 28, 2010 between Flint Telecom Group, Inc. (consisting of Flint Telecom Group, Inc. and its subsidiaries and affiliates) (hereinafter, altogether referred to as “Flint”) and Bill Burbank (“BB”). BB and Flint agree as follows: Unless otherwise indicated, terms used herein that are defined in the Separation Agreement shall have the same meanings herein as in the Separation Agreement. RECITALS A. WHEREAS, on February 4, 2010, BB and Flint entered into a Separation Agreement related to the separation of BB’s employment with Flint; and B. WHEREAS, the parties have entered into this Agreement to add certain additional terms related to the Separation Agreement. AGREEMENT WHEREFORE, the parties to this Agreement hereby agree as follows: 1. For adequate consideration, Flint hereby agrees to pay a total of $150,000 cash to BB over a period of 8 months; monthly payments in the amount of $18,750 shall commence as of July 31, 2010. 2. In the event Flint fails to make any payment to BB in accordance with the terms set forth herein, Flint will be in default of this Agreement and shall have forty five days of when the payment is due to cure such default (a “Default Event”). A default interest rate of 18% shall be applied to any outstanding payments owed as of the Default Event. An additional cash payment of forty thousand dollars ($40,000) will also be immediately due and payable from Flint to BB.If Flint fails to cure the Default Event on or before the end of the 45 day cure period, BB will be entitled to apply to the Court and obtain judgment against Flint for the outstanding payments outstanding and not made as of the Default Event.Flint agrees it will not object to the entry of the Default Judgment and this Agreement will serve as Flint’s consent to the entry of same.Notwithstanding the forgoing, Flint shall be entitled to challenge the final balance based upon payments actually made. 3. Disputed Claim:Each of the Parties understand and hereby agree that this settlement is in compromise of a disputed claim, that the Releases given are not to be construed as an admission of liability on the part of the party or parties hereby released, that the parties deny any liability on their respective parts, and that the parties hereto, by entering into this Agreement, attempt merely to avoid costly and lengthy litigation. 4. Any controversy or claim of any kind arising out of or relating to this Agreement or its breach, including but not limited to any claim relating to its validity, interpretation, or enforceability, shall be governed by the law of State of Florida. 1 5. This Agreement, coupled with the February 4, 2010, BB and Flint Separation Agreement,is the entire Agreement regarding the subject matter hereof and supersedes all previous and contemporaneous discussions, negotiations, agreements and understandings. No other promises or agreements have been made. 6. In the event that any provision of this Agreement is determined to be unenforceable for any reason, the remaining provisions shall remain in full force and effect and the unenforceable provision(s) shall be interpreted and rewritten to give effect to the parties’ intentions. 7. Each of the Parties acknowledges and agrees that it has been advised that this Agreement is a binding legal document. Each of the Parties further agrees that has had adequate time and a reasonable opportunity to review the provisions of this Agreement and to seek legal advice regarding all its aspects, and that in executing this Agreement each of the Parties has acted voluntarily and has not relied upon any representation made by the other Party or any of its employees or representatives regarding the Agreement’s subject matter and/or effect. Each of the Parties has read and fully understands this Agreement and voluntarily agrees to its terms. 8. Each of the parties hereto agrees not to disclose the facts or any of the terms of this Agreement to anyone except for its attorney, accountant and government taxing authorities, unless required to do so by court order. Each of the parties further agrees not to make any negative or disparaging statements about any other party, its affiliates or its employees or representatives to any third party, or to disclose any information that it became aware of as a result of its relationship with a party. 9. This Agreement may be executed via facsimile or e-mail in counterparts, and each facsimile or e-mail counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. FLINT TELECOM GROUP, INC. By:/s/ Vincent Browne Vincent Browne Chief Executive Officer Bill Burbank By: /s/ Bill Burbank 2
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148 So. 2d 176 (1962)
PERSONAL FINANCE, INC.
v.
Herbert and Katie SIMMS.
No. 5639.
Court of Appeal of Louisiana, First Circuit.
November 9, 1962.
Rehearing Denied December 14, 1962.
*178 J. Peyton Parker, Jr., Baton Rouge, for appellant.
Palmer & Palmer, by Charles B. W. Palmer, Amite, for appellee.
Before LOTTINGER, HERGET and LANDRY, JJ.
LANDRY, Judge.
This matter is presently before us for the second time. In our previous decision, reported at 123 So. 2d 646, we held that a judgment rendered against both defendants, (who were then husband and wife) upon a promissory note signed and executed by the husband alone, was null and void as to the wife.
Upon our annulment of the judgment rendered against her, Katie Simms, defendant in said former action by Personal Finance, Inc., instituted this present suit as plaintiff against Personal Finance, Inc., for damages for alleged wrongful garnishment of her wages. The basis of this present action for damages is the contention that the wife was living separate and apart from her said husband at the time the garnishment was instituted against her, therefore, her earnings were her own separate and paraphernal property and not subject to seizure for a community debt or obligation notwithstanding she was neither divorced nor judicially separated from the judgment debtor.
Since the positions of the parties to these related actions have now been reversed, plaintiff in the former becoming defendant in the latter, and vice versa, henceforth in this opinion, for purposes of clarity the term "plaintiff" shall be understood to mean and refer to the present plaintiff, Katie Simms, and the term "defendant" shall be construed as applying to the present defendant, Personal Finance, Inc.
Under the laws of this state, as a general rule, the wife is not personally responsible for community debts or obligations. LSA-R.C.C. Articles 2409, 2410; Breaux v. Decuir, La.App., 49 So. 2d 495; Rouchon v. Rocamora, La.App., 84 So. 2d 873. Granting that under certain given circumstances a wife may become personally obligated for the payment of community debts such is not the question presently before us as we have heretofore determined that plaintiff was under no personal obligation to defendant.
The sole question before us on the present appeal is whether plaintiff's wages which were garnished by defendant were community property or the separate and paraphernal property of plaintiff.
Defendant contends that a wife's wages are subject to garnishment for a community debt so long as she continues to reside with her husband even though the judgment thus sought to be executed is against the husband alone. There can be no question but that such is the established law of this state. It is equally clear, however, that the foregoing rule is without application when the husband and wife are living separate and apart. In the former case the wages of the wife fall into the community of acquets and gains whereas, in the latter instance, her wages are her separate paraphernal property. Article 2334, LSA-R. C.C. provides in unmistakable terms that the earnings of the wife when living separate and apart from her husband, although not separated by judgment of court, are her separate property. In the case at bar plaintiff was in fact living separate and apart from her husband when the garnishment was instituted by defendant. It follows, therefore, that the property seized by defendant *179 was the separate property of plaintiff.
In his brief before this Court, learned counsel for defendant points out that the garnishment issued against plaintiff was withdrawn immediately after a certified copy of a decree of separation obtained by plaintiff was sent to him on February 3, 1960. It is difficult for us to perceive how this circumstance may be considered in mitigation of the wrongful garnishment of plaintiff's wages when it also appears that, for several months thereafter, defendant failed to return the money wrongfully obtained. As correctly pointed out by able counsel for plaintiff, voluntary release of property seized does not exonerate the seizing creditor from liability for the wrongful seizure thereof. First Nat. Bank Bldg. Co., Limited v. Dickson & Denny, 202 La. 970, 13 So. 2d 283.
The decree of judicial separation obtained by plaintiff had no legal effect whatsoever upon the ownership of plaintiff's earnings. By virtue of her living separate and apart from her husband at the time, her wages were her separate and paraphernal property both before as well as after rendition of the judgment of separation. In addition, the record discloses that prior to issuance of the fi. fa. and garnishment in question, counsel for defendant was fully informed of the circumstances and well knew that plaintiff's wages were not subject to garnishment for the discharge of a community obligation. Under such circumstances defendant is in no position to plead good faith in bar of plaintiff's claim for damages. The act of defendant's attorney is imputable to defendant. Martin v. Schwing Lumber & Shingle Co., 228 La. 175, 81 So. 2d 852.
Astute counsel for defendant herein makes the additional argument that plaintiff wife having obtained a decree of judicial separation has become liable for one-half the community obligations pursuant to LSA-R.C.C. Article 2409 and that line of jurisprudence which holds that a wife who takes an active part in the effects of the community is deemed to have tacitly accepted the community of acquets and gains. This issue, however, is not before us as there has been no judicial determination of either plaintiff's acceptance of the community or of her loss of the right of renunciation. In this regard nothing in the record herein is indicative of either plaintiff's acceptance of or loss of the right of renunciation respecting the community which heretofore existed between plaintiff and her husband. To dispose of the case at bar it suffices to say that defendant possesses no valid judgment against plaintiff upon which she may be personally held and defendant's judgment against the community may not be satisfied by execution upon the wife's separate property (wages earned while living separate and apart from her husband) either before or subsequent to judicial dissolution of the community.
Defendant also urges that the present action is foreclosed by a compromise settlement effected through certain correspondence between counsel for these litigants. Said correspondence, however, in the form of letters appearing of record, indicates that no mention therein was made concerning a suit for damages by present plaintiff. By letter dated May 18, 1960, counsel for plaintiff agreed to dismiss the first appeal herein upon return of plaintiff's garnished wages, but defendant made no effort to comply. Subsequently, on June 6, 1960, plaintiff obtained a rule directing defendant to show cause why the seized funds should not be returned to plaintiff. Thereafter (several weeks after the first appeal was argued before and submitted to us) defendant did in fact return the garnished wages. Any further review of the negotiations toward settlement would be useless since the conclusion is inescapable that no compromise agreement was consummated.
Alternatively, defendant contends plaintiff has failed to establish by a preponderance *180 of evidence that she suffered damages. Conceding the good faith of the seizing creditor, when garnishment proceedings are wrongfully issued, the seizing creditor is liable for damages actually sustained by the owner of the property wrongfully seized. Williams v. Credit Service Corporation, La.App., 113 So. 2d 319, and cases therein cited.
The trial court awarded plaintiff $100.00 for embarrassment and humiliation, $200.00 for damages to her reputation and $200.00 attorney's fees. Plaintiff has answered the appeal seeking an increase in these awards.
It is uncontradicted that plaintiff was served with process while at school and further that her name appeared in the Tangi Talk, a local newspaper, wherein notice of the garnishment was published in the legal news. It further appears that the matter was the topic of discussion among the Negroes of the community wherein plaintiff resided and taught. Plaintiff's superiors testified that although teachers do not lose their positions because of garnishment proceedings against them, such occurrences indicated that they were not paying their just debts and affected their reputations with the superintendent and school board. Both the Superintendent of Schools and the Supervisor of Negro Schools testified that teachers whose wages are garnished are reproved and admonished to pay their debts and further that although no further stigma attached to plaintiff when the garnishment was recalled and her money refunded, nevertheless, while garnishment was in force it would have adversely affected her opportunities for promotion or advancement. While it was not established that plaintiff was considered for promotion during the period in question, it does appear, however, that her reputation was impugned during the effective period of the garnishment. In this latter regard it appears that plaintiff attempted to obtain loans from a finance company and from the Teachers Credit Union but was unable to do so because of the then outstanding order of garnishment. From the foregoing it is clear that plaintiff experienced humiliation, embarrassment and damage to her reputation.
In Scott v. Columbia Finance Corporation, La.App., 119 So. 2d 548, damages in the sum of $100.00 were awarded for the wrongful garnishment of the sum of $27.13, when it was found that the sum was withheld for only seven days, the employee was in no danger of discharge and only slight embarrassment resulted from the illegal seizure.
In Williams v. Credit Service Corporation, La.App., 113 So. 2d 319, plaintiff apparently failed to establish actual damages but the court therein found that the proceeding "well could be considered to cause plaintiff inconvenience and embarrassment and the possible loss of his employment." The court concluded that under such circumstances an award of $100.00 for embarrassment and a like sum for attorney's fees was most moderate but since plaintiff did not complain thereon on appeal no increase was made therein. In the present case the sum of $233.36 was withheld from plaintiff for approximately one year.
Considering the circumstances of the case at bar we are of the opinion that the award of damages for embarrassment and humiliation should be increased to the sum of $200.00 and the allotment for damages to plaintiff's reputation raised to $300.00.
Considering now plaintiff's claim for attorney's fees we find that the writ of garnishment herein involved was formally recalled and dissolved under circumstances hereinafter set forth.
Defendant herein asserts that the writ of garnishment was dissolved and recalled pursuant to a letter addressed by defendant to the Clerk of Court under date of February 8, 1960. The record does not reveal the date of receipt of said letter by the Clerk but it does show, however, that upon motion of counsel for defendant and upon the showing that all plaintiff's funds had *181 been returned, judgment was entered dismissing the garnishment as of August 3, 1960. In the meantime, however, plaintiff, on June 6, 1960, filed a motion to dissolve and in addition prayed for the return of her seized wages. It is clear, therefore, that following the filing of plaintiff's motion to dissolve, the writ was in fact dissolved upon the application of defendant and further, that at an undisclosed date subsequent to plaintiff's motion to dissolve, defendant returned plaintiff's money. That it was necessary for plaintiff to institute an action to dissolve to secure formal dissolution of the writ and the return of her funds is self-evident. Following the return of her withheld wages no further action was either required or taken by plaintiff until the institution of the present suit for damages. Although the present action for damages is separate and distinct from the former action to dissolve the writ, there appears no good reason why plaintiff should not be awarded attorney's fees for the prior proceeding required to obtain dissolution of the writ and the return of her funds.
Prior to adoption of our presently effective Code of Civil Procedure, the law of this state was well settled to the effect that the only exception to the rule that attorney's fees are not ordinarily allowed in a civil action is where a temporary restraining order or conservatory writ is dismissed prior to trial on the merits or where property of a third person is illegally seized and he is compelled to enjoin the seizure to obtain release of his property.
In Sims v. Matassa, La.App., 200 So. 666, it was held that reasonable attorney's fees incurred in securing the release of a concubine's property wrongfully seized in execution of a judgment against her paramour was a proper item of damages but, where the judgment creditor was in good faith, attorney's fees for services rendered subsequent to release of the seizure may not be recovered.
In Jones v. Dietrich et al., La.App., 186 So. 881, attorney's fees incurred for the purpose of securing the release of property illegally seized was held to be a recoverable item of damages.
In Williams v. Credit Service Corporation, La.App., 113 So. 2d 319, attorney's fees were allowed upon motion to dissolve a writ of garnishment which motion was prosecuted to definitive judgment in favor of the party moving to dissolve.
We believe that defendant's dismissal and recall of the garnishment subsequent to the filing of plaintiff's motion to dissolve was prompted and motivated by the filing of plaintiff's motion to dissolve and defendant's knowledge of facts and circumstances which indicated that plaintiff's funds were being wrongfully withheld. Under such circumstances the dismissal of the writ was tantamount to its dissolution upon trial of plaintiff's motion to dissolve insofar as concerns defendant's liability for attorney's fees.
It is clear from the record that but for plaintiff's filing of the motion to dissolve, the writ would at least have technically remained in effect although plaintiff's wages were no longer being garnished and also but for the filing of the motion, defendant would not have returned plaintiff's wages theretofore seized.
Considering the circumstances shown, there appears no valid distinction between the instant case and that of Williams v. Credit Service Corporation, supra. While it is true that in the Williams case the motion to dissolve was successfully prosecuted to final judgment, it is also true that in the present case the writ was dissolved by order of the court upon the application of defendant made subsequent to the filing of plaintiff's motion to dissolve. We see little, if any, differentiation in the legal effect thus produced. Beyond any doubt whatsoever plaintiff's motion to dissolve is the factor which motivated defendant's dismissal. Upon defendant's dismissal of the writ and return of plaintiff's property any further action on the part of plaintiff would have been a vain and useless gesture.
*182 We find, therefore, that plaintiff is entitled to attorney's fees but only insofar as concerns her suit to dissolve the writ and secure the return of the garnished wages. She is not entitled to attorney's fees incident to the present suit for damages. The award of $200.00 for attorney's fees made by the trial court appears reasonable and accordingly, is affirmed.
For the reasons hereinabove set forth it is ordered, adjudged and decreed that the judgment of the trial court is hereby amended and judgment rendered herein in favor of plaintiff Katie Simms and against defendant Personal Finance, Inc., in the full sum of Seven Hundred and 00/100 ($700.00) Dollars, together with legal interest thereon at the rate of five (5%) per cent per annum from date of judicial demand, until paid, and for all costs of these proceedings.
Amended and affirmed.
ELLIS and REID, JJ., recused.
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Case 15-42222 Doc 109 Filed 02/08/19 Entered 02/08/19 10:53:17 Main Document
Pg 1 of 1
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
IN RE: ) Case No: 15-42222-659
)
ROBERT LEWIS DUELLO ) Chapter 13
JAMIE LEE DUELLO )
Debtors )
)
Robert Duello )
Movant )
TRUSTEE'S CONSENT TO MOTION FOR RELIEF FROM THE AUTOMATIC STAY
Comes now Diana S. Daugherty, Standing Chapter 13 Trustee, by her undersigned attorney,
and hereby consents to the relief requested in Robert Duello's Motion for Relief from the
Automatic Stay.
/s/ Kathy Reichbach
Kathy Reichbach MO56957
LEGTRCNST_--KR Attorney for Trustee
P.O. Box 430908
St. Louis, MO 63143
8585803681 Fax: 8585803681
donna88@example.org
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767 So. 2d 808 (2000)
STATE of Louisiana
v.
James JONES.
No. 00-KA-190.
Court of Appeal of Louisiana, Fifth Circuit.
July 25, 2000.
Paul D. Connick, Jr., District Attorney, Terry M. Boudreaux, Allison Wallis, David Wolff, Assistant District Attorneys, Gretna, LA, Attorneys for Plaintiff/Appellee.
Bruce G. Whittaker, Louisiana Appellate Project, New Orleans, LA, Attorney for Defendant/Appellant.
Panel composed of Judges EDWARD A. DUFRESNE, Jr., SOL GOTHARD, and MADELINE JASMINE, Pro Tempore.
GOTHARD, Judge.
The defendant, James Jones, was charged by a two count bill of information with one count of theft over five hundred dollars in currency, a violation of La. R.S. 14:67 and one count of simple robbery, a violation of La. R.S. 14:65. After a trial by the district court judge, the defendant was found guilty as charged on both counts and sentenced to two terms of five years at hard labor, to be served consecutively. Pursuant to a multiple bill, the defendant was found to be a third felony offender. The trial court vacated the original five year sentence imposed for the simple robbery, and resentenced defendant to life imprisonment at hard labor without benefit of parole, probation or suspension of sentence. On appeal, defendant alleges that insufficient evidence exists to sustain the conviction for simple robbery.
FACTS
The two counts with which defendant was charged arose out of two separate incidents; however, they were tried together.
*809 Shannon Morneault, a cashier at a Toys R Us store on Veterans Memorial Boulevard in Metairie, testified that she was on duty on the morning of August 17, 1998. At about 11:00, a man approached her to purchase a pack of chewing gum. She totaled the item on her cash register, and the man paid for it. When Ms. Morneault opened her cash drawer, the man said, "Give me the money." She stepped back, fearing the man might have a weapon. The man reached over the counter and took all the currency from the drawer. He exited through the front door of the store.
Ms. Morneault immediately notified her manager, Bill McGee, who was working in his office at the front of the store. Mr. McGee exited the store and chased the man on foot. In the meantime, store employees called police. Mr. McGee yelled at the man to stop. The man turned to look at him while continuing to run. Mr. McGee got into his truck and followed the man to the parking lot of the Barnes and Noble book store adjacent to Toys R Us. He saw the driver of a car pick up the perpetrator in the book store's parking lot. Mr. McGee took note of the car's color and license plate number. He then gave up his pursuit and returned to the store.
Deputy Charlie Love responded to the robbery call. He went to Toys R Us and interviewed Ms. Morneault and Mr. McGee. Mr. McGee gave the officer the license plate number and description of the car in which the man had fled. Both witnesses gave descriptions of the perpetrator. Ms. Morneault testified that the man took between $240.00 and $280.00 from her cash drawer.
Robbery Detective Daniel O'Neil was assigned to do a follow-up investigation of the robbery. On August 27, 1998, he showed Ms. Morneault and Mr. McGee a photographic lineup at the Toys R Us store. The two witnesses viewed the lineup separately, and they both positively identified defendant, James Jones, as the perpetrator of the robbery. Ms. Morneault and Mr. McGee both identified defendant in court as the man who committed the robbery.
On the morning of August 19, 1998, Denise Thomas was working as a cashier at an E-Z Serve convenience store on Lapalco Boulevard. Her manager gave her $4,000.00 in cash and sent her to make a bank deposit for the store. Ms. Thomas got into her car, which was parked on the side of the building. Before she could close the door, a masked man approached her and took the money. He then fled the scene. The police were notified, and a Deputy Vasquez reported to the scene. After performing the initial investigation, Deputy Vasquez turned the case over to Detective O'Neil.
Detective O'Neil took two recorded statements from Ms. Thomas on August 21, 1998. Ms. Thomas told the officer that defendant was the perpetrator. In the first statement, she denied having had any advance notice that defendant would take the store's money. However, in the second statement, she explained that defendant was her baby's father. She admitted that, prior to the incident, defendant asked her how much money the store took in, and how the bank deposits were made. She and defendant discussed, in advance, his plan to rob the E-Z Serve. She further stated that defendant met her on the night of the incident and gave her $800.00. (At trial, she testified that defendant gave her $2,000.00.) She used that money to pay her car note. When O'Neil asked her where she thought the money had come from, she responded, "From the E Z Serve."
Detective O'Neil testified that the car involved in the Toys R Us robbery was registered to a Carolyn Bostick. He eventually interviewed Ms. Bostick's son, Bernard Bostick, who admitted to having transported a man named "Weasie" to both Toys R Us and E-Z Serve. "Weasie" is defendant's nickname. At trial, Bostick testified that he drove defendant to Toys R Us on August 17, 1998 and to E-Z Serve *810 on August 19, 1998. Bostick further testified that he knew what defendant intended to do on those two occasions.
Detective O'Neil interviewed defendant at 2:00 p.m. on August 21, 1998. The tape recording and the written transcript of that interview were admitted as garciaheather@example.org. Defendant admitted to the officer that he and his girlfriend, Denise Thomas, had planned the theft of money from the E-Z Serve. He knew when the store's bank deposit would be made and laid in wait. He expected that he would be taking the money from another employee, and not Thomas. After he took the money from Thomas, he escaped in a car driven by "BJ." He gave Thomas $2,000.00 on the day of the incident. The recorded statement does not include any reference to the Toys R Us incident.
ANALYSIS
On appeal, defendant alleges that insufficient evidence exists to sustain the conviction for simple robbery occurring at Toys R Us, because there was insufficient evidence of force or intimidation.
The constitutional standard for testing the sufficiency of the evidence, as enunciated in Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979), requires that a conviction be based on proof sufficient for any rational trier of fact, viewing the evidence in the light most favorable to the prosecution, to find the essential elements of the crime beyond a reasonable doubt. State v. Juluke, 98-0341 (La.1/8/99), 725 So. 2d 1291; State v. Williams, 99-223 (La.App. 5 Cir. 6/30/99), 742 So. 2d 604.
The elements necessary to sustain a conviction of simple robbery are: 1) the taking of anything of value; 2) belonging to another; 3) from the person of another; 4) by use of force or intimidation. LSA-R.S. 14:65; State v. Robinson, 97-269 (La.App. 5 Cir. 5/27/98), 713 So. 2d 828, writ denied, 98-1770 (La.11/6/98), 727 So. 2d 444.
In State v. Mason, 403 So. 2d 701 (La. 1981), the Louisiana Supreme Court offered an indirect interpretation of the element of "force or intimidation" in the simple robbery statute by comparing the offense with that of theft:
By providing a more severe grade of theft for those instances in which a thief uses force or intimidation to accomplish his goals, the legislature apparently sought to emphasize the increased risk of danger to human life posed when a theft is carried out in face of the victim's opposition.
Id. at 704.
See also, State v. Johnson, 411 So. 2d 439 (La.1982); State v. Florant, 602 So. 2d 338 (La.App. 4 Cir.), writ denied, 605 So. 2d 1147 (La.1992). Resistance by the victim and the use of physical force by the perpetrator are not necessary to complete a simple robbery. In State v. Robinson, this court upheld the defendant's simple robbery conviction under facts similar to those herein. In that case the defendant took money from a cashier at the drive-up window of a fast food restaurant. The evidence did not show that the defendant used threatening words or gestures, or that he used physical force against the victim. The victim testified, however, that the defendant's demeanor caused him concern, and that he was intimidated by the street slang the defendant used. The victim stated that the defendant's behavior was like that of "someone who isn't playing." Robinson, supra, at page 830. In the instant case, cashier Shannon Morneault testified that she rang up defendant's purchase of a pack of chewing gum. He paid for the gum, and she opened her cash drawer. At that point defendant said, "Give me the money." At first Ms. Morneault "didn't really know he was serious." However, when she looked up at him, she immediately knew he was not joking. Defendant reached over the counter and put his hand into the cash register drawer. Ms. Morneault testified that she took a step back and did not interfere with defendant, because she did not want to *811 anger him. She was very much intimidated by defendant and was afraid he would injure her. She was concerned that defendant might have a weapon. She did not call for help until after defendant had fled, as she was afraid defendant would grab her.
Defendant argues that this case is distinguishable from Robinson, because in this case there is no evidence that the defendant used threatening language. We disagree. In Robinson, while the language used may have been "street slang", it did not threaten the victim.
We find that the state proved beyond a reasonable doubt the taking of anything of value from the person of another by use of intimidation, and therefore the evidence was sufficient to sustain defendant's conviction of simple robbery.
We have reviewed the record, including the habitual offender proceedings, for errors patent, in accordance with La. C.Cr.P. art. 920; State v. Oliveaux, 312 So. 2d 337 (La.1975); and State v. Weiland, 556 So. 2d 175 (La.App. 5 Cir.1990), and we note the following error.
Although the transcript shows that the trial judge properly sentenced defendant without benefit of parole, probation or suspension of sentence as provided by La. R.S. 15:529.1A(1)(b)(ii), the habitual offender commitment does not reflect that stipulation. We therefore order the trial court to amend the habitual offender commitment to conform with the sentence as reflected in the transcript.
CONCLUSION
For the above discussed reasons, the defendant's conviction and sentence are affirmed. The trial court is ordered to amend the commitment to conform with the sentence as reflected in the sentencing transcript.
AFFIRMED WITH ORDER.
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998 F.2d 1011
NOTICE: 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.UNITED STATES of AMERICA, Plaintiff-Appellee,v.Michael A. KREBSER, Defendant-Appellant.
No. 92-5500.
United States Court of Appeals,Fourth Circuit.
Argued: April 2, 1993.July 6, 1993.
Appeal from the United States District Court for the Western District of North Carolina, at Charlotte. Graham C. Mullen, District Judge. (CR-90-191-C)
Argued: James William Erbeck, Woodburn & Wedge, Las Vegas, Nevada, for Appellant.
Thomas J. Ashcraft, United States Attorney, Charlotte, North Carolina, for Appellee.
W.D.N.C.
AFFIRMED.
Before ERVIN, Chief Judge, WIDENER, Circuit Judge, and WARD, Senior United States District Judge for the Middle District of North Carolina, sitting by designation.
OPINION
PER CURIAM:
1
This appeal raises several issues with regard to the sentence imposed by the district court on appellant, Michael Anthony Krebser ("Krebser"), after he pled guilty to one count of conspiracy in violation of 18 U.S.C. § 371 (1988).
I.
2
On December 3, 1990, the Grand Jury for the Western District of North Carolina charged Krebser and six other defendants in a forty-two count indictment filed in Charlotte, North Carolina. The indictment alleged that the defendants participated in a multi-million dollar Ponzi* scheme involving wide-ranging investment and employee leasing programs. All defendants, including Krebser, entered voluntary guilty pleas to one or more of the counts.
3
Appellant Krebser was named in twelve mail fraud counts (18 U.S.C. § 1341), six counts of interstate shipment of fraudulently obtained property (18 U.S.C. § 2314), one count of embezzlement from employee welfare benefit plans (18 U.S.C. § 664), fourteen money laundering counts (18 U.S.C. § 1956), one criminal forfeiture count (18 U.S.C. § 982), and one conspiracy count (18 U.S.C. § 371). Pursuant to a plea agreement in which defendant Krebser agreed to pay $1,000,000 in restitution and which had a twelve month recommended sentence cap, Krebser pled guilty to the conspiracy count. Krebser failed to pay the $1,000,000 restitution thereby breaching the plea agreement, but under the agreement's terms his guilty plea stood.
4
After a sentencing hearing on May 11, 12, 15, and 18, 1992, the district court sentenced Krebser to twenty-seven months imprisonment, three years supervised release, and ordered $3,000 in restitution. As of February 8, 1993, none of the restitution had been paid. It is this sentence of the district court from which Krebser appeals.
II.
5
All of the issues raised in this appeal relate to the district court's findings of fact for its purpose of properly applying the sentencing guidelines. Accordingly, we will apply the "clearly erroneous" standard in reviewing the determinations of the district court. See United States v. Helton, 953 F.2d 867, 869 (4th Cir. 1992).
6
The first issue is whether the district court erred in its calculation of the amount of loss to be attributed to Krebser for sentencing purposes under U.S.S.G. § 1B1.3. At sentencing, the district court found that "the loss of $2.4 million was reasonably foreseeable to Mr. Krebser." (J.A. 471). Pursuant to U.S.S.G. § 1B1.3, the district court determined that such relevant conduct would raise Krebser's base offense level by twelve levels. (J.A. 471). The district court's $2.4 million figure came from the following sources: $529,338 in diversions made by Krebser's co-defendant's from CAP Programs, Inc. ("CAP") after Krebser and co-defendant Spieles purchased the company; approximately $400,000 in diversions made by Krebser's co-defendant's from Universal Staffing Associates, Inc. ("USA"); and $1.5 million in unpaid medical claims that USA was responsible for, but could not pay.
7
Krebser argues that this amount is grossly excessive. He maintains that the only stolen money he allowed co-defendant Spieles to forward to him was a corporate loan of approximately $245,000 which Spieles had illegally obtained from CAP. Further, Krebser states that he returned $148,000 of this loan to Spieles. Thus, according to Krebser, the district court should have attributed only $97,000 to him for the purposes of sentencing.
8
The relevant conduct provision of the Sentencing Guidelines, U.S.S.G. § 1B1.3, states in pertinent part:
9
(a) [offense levels and adjustments] shall be determined on the basis of the following:
10
(1) all acts and omissions committed or aided and abetted by the defendant, or for which the defendant would be otherwise accountable, that occurred during the commission of the offense of the conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense, or that otherwise were in furtherance of that offense;
11
(2) [with respect to fraud offenses] all such acts and omissions that were part of the same course of conduct or common scheme or plan as the offense of conviction;
12
(3) all harm that resulted from the acts or omissions specified in subsection (a)(1) and (a)(2) above, and all harm that was the object of such acts or omissions;....
13
The pertinent section of the application note to section 1B1.3 in force at the time of sentencing read:
14
In the case of criminal activity undertaken in concert with others, whether or not charged as a conspiracy, the conduct for which the defendant "would be otherwise accountable" also includes conduct of others in furtherance of the execution of the jointly-undertaken criminal activity that was reasonably foreseeable by the defendant.
15
U.S.S.G. § 1B1.3, comment. (n.1).
16
In the instant case, the evidence suggests that Krebser participated in at least two meetings with CAP originator and co-defendant Robert W. Long ("Long") in April 1989 and again in May 1989 regarding the takeover of CAP by co-defendant Spieles and Krebser. According to the unrefuted testimony of Long, he explained at length to both Spieles and Krebser the fraud that was taking place at CAP, including investor fund shortages, nonexistent IRA funds, diversion of CAP staffing funds to CAP programs, and non-payment of taxes and other payroll withholding. Still, Krebser and Spieles enthusiastically proceeded with their plans to purchase and take-over CAP. Further, once the take-over was complete, the evidence indicates that Krebser and Spieles began to drain funds away from CAP to their mining operations in Nevada.
17
Later, in July 1989 Spieles, co-defendant Jerry M. Wolicki ("Wolicki"), and Krebser started a new venture, USA, which took over approximately one-half of CAP's fraudulent employee leasing programs. Again, Spieles and Krebser diverted funds from this operation to their mining operations in Nevada. Krebser was the corporate secretary for CAP, the treasurer and director of USA and a fifty percent partner with Spieles in all of the ventures at issue here. From these facts, it is readily inferable that Krebser had extensive knowledge of the fraudulent activities in which CAP and USA were engaged.
18
It is clear that, initially, Krebser was heavily involved in the purchase and take-over of CAP as well as the creation of USA. It is inconceivable, especially in light of the testimony of Long, that Krebser did not foresee that CAP would continue to be operated in the same fraudulent manner it had been operated in prior to its purchase or that the new venture, USA, would be operated similarly. In fact, after the take-over of CAP, Krebser and Spieles continued to employ most of the employees that had created USA and implemented the fraudulent activities initially. Furthermore, in setting up USA, Krebser and Spieles continued to perpetuate the same type of fraudulent activities. In all of these activities, Krebser was involved in the initial planning of the venture, he acted as a corporate officer, and benefitted financially. It was completely reasonable for the sentencing court to attribute to Krebser the entire loss arising out of CAP's activities after Krebser and Spieles became involved with the company as well as the entire losses associated with USA from its inception. This is so because even though Krebser may not have directly diverted funds from the ventures, such divesture and losses were readily foreseeable on the basis of his co-conspirator's actions. Accordingly, we hold that the determination of the district court to attribute $2.4 million to Krebser for sentencing purposes was not clearly erroneous and is therefore affirmed.
19
The second issue is whether the district court erred in its application of an upward adjustment for abuse of trust in sentencing Krebser under U.S.S.G. § 3B1.3. The district court applied a two point adjustment to Krebser's total offense level on the basis that he had abused a position of trust. Krebser argues that he did not occupy a position of trust because he never was involved in the day-to-day operations of CAP or USA and was never directly involved with investors nor ever induced any parties to invest or participate in CAP or USA.
20
The government maintains, however, that as a corporate officer of both CAP and USA, companies charged with receiving funds from employers to be paid out according to an agreement, placed Krebser as well as his co-defendants in a position of trust with respect to these parties. Thus, the government contends that in allowing his codefendants to misappropriate CAP and USA client funds, Krebser breached this trust, and perpetuated the fraud scheme. This action, asserts the government, amounted to an abuse of a position of trust under U.S.S.G. § 3B1.3.
21
Section 3B1.3 provides: "[i]f the defendant abused a position of public or private trust, or used special skill, in a manner that significantly facilitated the commission or concealment of the offense, increase by 2 levels." Application Note 1 to the guideline states: "[t]he position of trust must have contributed in some substantial way to facilitating the crime and not merely have provided an opportunity that could easily have been afforded other persons. This adjustment, for example, would not apply to an embezzlement by an ordinary bank teller." U.S.S.G. § 3B1.3, comment. (n.1).
22
In the instant case, there is no doubt that Krebser was, in fact, an officer of both CAP (secretary) and USA (treasurer and director). Further, the evidence illustrates that both entities were involved in handling the funds of businesses for various purposes (i.e., paying insurance premiums, taxes, payroll, etc.) and, as entities, were clearly in positions of trust with regard to their clients. It is true that Krebser was not involved in the day-to-day operations of either corporation. However, he aided in the purchase of CAP and the creation of USA. Further, he accepted funds from CAP and USA with the knowledge that such funds were being fraudulently obtained and used. This activity was a significant contribution to the facilitation of the crimes of which Krebser and his co-defendants pled guilty. Accordingly, the district court's decision to enhance Krebser's sentence on the basis of an abuse of a position of trust under U.S.S.G. § 3B1.3 was not clear error and is therefore affirmed.
23
The third issue is whether the district court erred in its application of an upward adjustment for more than minimal planning in sentencing Krebser under U.S.S.G. § 2F1.1(b)(2). The district court applied a two point adjustment to Krebser's offense level for "more than minimal planning" pursuant to U.S.S.G. § 2F1.1(b)(2)(A). Krebser maintains that the sentencing court did not make any specific findings of fact as to why Krebser should suffer such an enhancement. Furthermore, according to Krebser, he was only involved in the fraudulent scheme of his business partners to the extent of one transaction-a $245,000 corporate loan from CPA to GEMCO, a mining operation located in Nevada owned and operated by Spieles and Krebser.
24
Krebser's argument is unpersuasive. First, there was clear evidence that Krebser joined the conspiracy with knowledge of the fraudulent activities which had taken place at CAP in the past and with knowledge that such fraudulent activities were to continue at CAP once he and Spieles took over. Additionally, Krebser was involved in the creation of USA to continue the same schemes once CAP became insolvent. The take-over of CAP and creation of USA were themselves activities which required more than minimal planning. Additionally, under U.S.S.G. § 2F1.1(b)(2)(B) an enhancement may be triggered by "a scheme to defraud more than one victim." Here, the evidence demonstrates that approximately 1,350 employee families from 120 client companies were injured during the time Krebser was involved with CAP and USA. Accordingly, we hold that on either basis, the district court was correct in giving Krebser a two point enhancement under U.S.S.G. §§ 2F1.1(b)(2)(A) or 2F1.1(b)(2)(B) and is therefore affirmed.
25
The final issue is whether the district court erred in failing to provide a four point "minimal participant" downward adjustment in sentencing Krebser under U.S.S.G. § 3B1.2(a). Krebser contends that he should have been allowed a four point reduction due to his substantial lack of participation in the conspiracy. In support of this argument, Krebser points to the testimony of FBI Special Agent Bradbury which describes Krebser as less culpable than his co-defendant Spieles.
26
The testimony of Bradbury was not as Krebser would characterize it. Bradbury, at most, described Krebser as less culpable than Spieles, but very blameworthy nonetheless. In the testimony to which Krebser directs the Court, Bradbury described Krebser as"being the co-officer [with Spieles] and being totally aware of the activities with respect to the situation regarding USA and unpaid claims, and in the direction of money out west to the mining operations, falls behind Mr. Spieles in that regard." (J.A. 227). Clearly, such testimony does not absolve Krebser of responsibility, but simply places him in the proper relation to Spieles on a scale of culpability. The district court properly took note of this evidence and mitigated Krebser's sentence by two levels as a "minor participant" pursuant to U.S.S.G.s 3B1.2(b). However, to reduce Krebser's role further by characterizing his actions as "minimal" is simply not justified. Accordingly, on this issue the district court is also affirmed.
27
Thus, for the reasons stated herein, the rulings and judgment of the district court are hereby
28
AFFIRMED.
*
A Ponzi or pyramid scheme is an investment program designed such that early investors are paid off with money paid into the program by later investors to encourage yet more and bigger investments. The plan will succeed until the amount of money going out of the program to payoff early investors exceeds the amount of funds coming into the program from later investors at which time the entire program will collapse like a "house of cards." Named for the 1920's swindler, Charles A. Ponzi
|
Title: Is it worth suing the company I was fired from?
Question:[deleted]
Topic:
Employment Law
Answer #1: Why do you think you couldn't be fired? You called out of work but said you were not sick. You just didn't want to work. They didn't feel that you were going to be able to continue with the job so they let you go. |
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]MEMORANDUM OF DECISION de DEFENDANT'S MOTION TO REARGUE AND TOSET ASIDE ORDER (#129)
On September 18, 1997, the plaintiff filed a motion to vacate orders of the court entered on November 5, 1990 on the basis that "[s]aid orders were entered without subject matter jurisdiction." Specifically, the plaintiff sought to vacate order modifying post-majority child support obligations of the defendant. On October 6, 1997, this court granted the motion to vacate. See Memorandum of Decision (#128).
Thereafter, the defendant filed a motion to reargue and to set aside the October 6, 1997 order. The motion to reargue has been granted and the parties have been given an opportunity to brief the legal issue. Currently before the court is the motion to set aside.
The sole issue presented by the present case is whether, on November 5, 1990, the trial court had subject matter jurisdiction to render an order modifying post-majority child support without an agreement of the parties in writing.
"The jurisdiction of the Superior Court as it relates to post-majority child support derives solely from [General Statutes § ] 46b-66." Albrecht v. Albrecht, 19 Conn. App. 146, 156,562 A.2d 528, cert. denied, 212 Conn. 813, 565 A.2d 537 (1989).
General Statutes § 46b-66 states, in relevant part: "If [an agreement concerning the custody, care, education, visitation, maintenance or support of any of their children] is in writing and provides for the care, education, maintenance or CT Page 13364 support of a child beyond the age of eighteen, it may . . . be incorporated or otherwise made a part of [the court's] order and shall be enforceable to the same extent as any other provision of such order or decree, notwithstanding the provision of such order or decree, notwithstanding the provisions of section 1-1d."
In Hirtle v. Hirtle, 217 Conn. 394, 400, 586 A.2d 578 (1991), the Supreme Court held that "the same jurisdictional rules apply to the incorporation of an order for post-majority support in the original dissolution proceedings as to a subsequent order modifying post-majority support. In both cases, "General Statutes § ]46b-66 requires a written agreement of the parties . . . . A written agreement is a jurisdictional prerequisite to the valid modification of an order for post-majority support."
In the present case, the record of the November 5, 1990 proceeding indicates that no written agreement was ever presented to the court regarding post-majority support. The court was therefore without subject matter jurisdiction to modify same.
The court notes that the defendant argues that the doctrine of waiver and estoppel precludes the plaintiff from seeking a finding that the November 1990 order was invalid. "Accordingly," the defendant argues, "the stipulation entered into by the parties in November 1990 is completely valid and effective."
"[General Statutes § 46b-66], had the limited purpose of permitting a contract for the support of adult children to be incorporated into a judgment or order of the court, thereby making such orders enforceable through contempt proceedings, rather than requiring that such a contract be enforced through a separate contract action." Albrecht v. Albrecht, supra,19 Conn. App. 156-57 (1989).
In the present case, the court need not reach the issues of waiver and estoppel. The court's decision to vacate the November 1990 order has no effect on any agreement made by the parties. The court now is merely remedying an earlier error made when a court without jurisdiction entered an agreement as a court order. The effect of today's decision is merely that the court will be unable to enforce the 1990 order in a contempt proceeding. The parties were free, however, to enter into whatever agreement they saw fit, and applicable contract principles govern.
The motion to set aside is denied. The order of the court, CT Page 13365 dated October 6, 1997, remains in effect.
HARRIGAN, J. |
Case 4:18-cv-00442-ALM-CMC Document 85-21 Filed 01/13/20 Page 1 of 2 PageID #: 2587
EXHIBIT 20
Rod
Wed, Mar 1, 6:15 PM
Ed I just got some dynamic inform1ation! Call me when you land.
Wed, Mar 1, 7:23 PM
I am on plane. Can you give me a hint ?
Ive made contact with the lead detective he is willing to meet with
me.
And I know who is blocking the investigation.
Fantastic. I will call when I land . Do you know him?
No but he knows me.
Do you use Wickr?
I believe we can. I am meeting with 2 inside contacts tomorrow in
DC.
Case 4:18-cv-00442-ALM-CMC Document 85-21 Filed 01/13/20 Page 2 of 2 PageID #: 2588
I will call you when I land
|
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Earliest Event Reported): February 15, 2012 CYTRX CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware (State or Other Jurisdiction of Incorporation) 000-15327 (Commission File Number) 58-1642740 (I.R.S. Employer Identification No.) 11726 San Vicente Boulevard, Suite 650 Los Angeles, California (Address of Principal Executive Offices) (Zip Code) +1-567-204-9238 (Registrant’s Telephone Number, Including Area Code) Check the appropriate box below if the Form8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions: ¨ Written communications pursuant to Rule425 under the Securities Act (17 CFR230.425) ¨ Soliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR240.14a-12) ¨ Pre-commencement communications pursuant to Rule14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ¨ Pre-commencement communications pursuant to Rule13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing On February 15, 2012, CytRx Corporation (the "Company") received a written notification (the "Staff Determination") from The NASDAQ Stock Market LLC ("NASDAQ") stating that because the Company had not regained compliance with the $1.00 minimum bid price requirement for continued listing, as set forth in NASDAQ Listing Rule 5550(a)(2) (the "Rule"), the Company's securities would be subject to delisting from The NASDAQ Capital Market unless the Company requests a hearing before a NASDAQ Hearings Panel (the "Panel") on or before February 22, 2012. The Company intends to request a hearing before the Panel, which will stay any delisting action in connection with the Staff Determination and allow the continued listing of the Company’s common stock on The NASDAQ Capital Market until the Panel renders a decision subsequent to thehearing. At the hearing, the Company intends to present a plan to regaincompliance with the Rule and request that the Panel allow the Company additional time within which to regain compliance. There can be no assurance that the Panel will grant the Company’s request for continued listing on The NASDAQ Capital Market, or that the Company's plans to exercise diligent efforts to maintain the listing of its securities on NASDAQ will be successful. On February 17, 2012, the Company issued a press release announcing receipt ofthe Staff Determination.Acopy of the press release is attached to this Form8-K as Exhibit99.1 and is incorporated herein by reference. ITEM 9.01 Financial Statements and Exhibits The exhibit listed on the accompanying Index to Exhibits is filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. Date: February 17, 2012 By: /s/JOHN Y. CALOZ John Y. Caloz Chief Financial Officer INDEX TO EXHIBITS Exhibit Description Press Release dated February 17, 2012
|
Citation Nr: 0318142
Decision Date: 07/29/03 Archive Date: 08/05/03
DOCKET NO. 95-23 626 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Hartford,
Connecticut
THE ISSUES
1. Entitlement to an increased disability rating for
service-connected arterial hypertension, currently evaluated
as 30 percent disabling.
2. Entitlement to service connection for hemorrhoids.
3. Entitlement to service connection for nicotine addiction.
4. Entitlement to service connection for alcoholism.
REPRESENTATION
Veteran represented by: AMVETS
ATTORNEY FOR THE BOARD
John Z. Jones, Counsel
INTRODUCTION
The veteran served on active duty from October 1962 to
September 1966 and from March 1974 to December 1991.
This matter has come before the Board of Veterans' Appeals
(the Board) on appeal from an October 1993 rating decision of
the Department of Veterans Affairs (VA) Regional Office in
Hartford, Connecticut (the RO) which, in part, granted
service connection for arterial hypertension and tinnitus,
each evaluated as noncompensably disabling from January 1,
1992. The decision also denied entitlement to service
connection for disability of the ankles, disability of the
feet, disability of the right ring finger, periodontal
disease for purposes of outpatient treatment, hemorrhoids,
nicotine addiction and alcoholism. This case was previously
before the Board and was remanded to the RO in January 1997.
In a February 2003 rating decision, the RO increased the
evaluation for arterial hypertension to 10 percent, effective
December 19, 2001. Because this does not represent the
maximum schedular rating available, the claim of a higher
rating for this disability remains at issue on appeal. See
38 C.F.R. § 4.104, Diagnostic Code 7101 (1997 and 2002); see
also AB v. Brown, 6 Vet. App. 35 (1993) [applicable law
mandates that when a veteran seeks an original or increased
rating, it will generally be presumed that the maximum
benefit allowed by law and regulation is sought, and it
follows that such a claim remains in controversy where less
than the maximum benefit available is awarded].
The issues of entitlement to service connection for nicotine
addiction and alcoholism will be addressed in the Remand
section of this decision.
Other issues not currently on appeal
In September 2001, the RO increased the disability rating
assigned for tinnitus to 10 percent. This represents the
maximum schedular evaluation available for the condition.
See 38 C.F.R. § 4.87a, Diagnostic Code 6260 (2002). Because
the veteran is in receipt of the maximum schedular rating,
this claim is no longer in controversy. See AB, supra.
The Board notes that the veteran's appeal originally included
the issues of entitlement to service connection for
disability of the hips and PTSD. During the pendency of the
appeal, the RO, in February 2003 rating decisions, granted
service connection for left and right hip conditions, each
evaluated as noncompensably disabling from July 23, 1997; and
PTSD, evaluated as 10 percent disabling from January 1, 1992
and 30 percent disabling from November 11, 1999. The veteran
was notified of these decisions and did not file a notice of
disagreement.
See Grantham v. Brown, 114 F.3d 1156 (Fed. Cir. 1997) [where
an appealed claim for service connection is granted during
the pendency of the appeal, a second notice of disagreement
must thereafter be timely filed to initiate appellate review
of the claim concerning "downstream" issues such the
compensation level assigned for the disability and the
effective date. Accordingly, those issues have been resolved
and will be discussed no further.
In statements dated in February and March 2003, the veteran's
representative informed the Board that the veteran wished to
withdraw the issues of entitlement to service connection for
disability of the ankles, disability of the feet, disability
of the right ring finger and periodontal disease for purposes
of outpatient treatment. See 38 C.F.R. § 20.204 (2002).
Those issues are therefore no longer on appeal.
FINDINGS OF FACT
1. Medical evidence of record covering the period from
January 1, 1992 to the present demonstrates that the
veteran's diastolic pressure was predominately 100 or more
and that he required medication for blood pressure control.
2. The veteran's diastolic pressure has been predominately
below 110 with no definite symptoms and his systolic pressure
has been predominately below 200.
3. The medical evidence of record does not demonstrate a
chronic hemorrhoid disability; there is no clinical evidence
of hemorrhoids in service; and there is no opinion linking
the veteran's claimed hemorrhoids and his military service.
CONCLUSIONS OF LAW
1. The criteria for a 10 percent rating for arterial
hypertension have been met from January 1, 1992. 38 U.S.C.A.
§ 1155 (West 1991); 38 C.F.R. § 4.104, Diagnostic Code 7101
(1997 and 2002).
2. The criteria for a rating in excess of 10 percent for
arterial hypertension have not been met. 38 U.S.C.A. § 1155
(West 1991); 38 C.F.R. § 4.104, Diagnostic Code 7101 (1997
and 2002).
3. Hemorrhoids were not incurred in or aggravated by
service. 38 U.S.C.A. §§ 1110, 1131 (West 1991 & Supp. 2002);
38 C.F.R. § 3.303 (2002).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
The veteran contends that his service-connected hypertension
warrants a higher disability rating. He also contends that
he currently has hemorrhoids which are related to his periods
of active service.
In the interest of clarity, the Board will initially address
matters relevant to the issues currently being decided. The
Board will then separately address each issue currently being
decided, giving the factual background, the relevant VA law
and regulations, an analysis of the claim and a decision.
The VCAA - VA's duty to notify/assist
The Board has given consideration to the Veterans Claims
Assistance Act of 2000, Pub. L. No. 106-475, 114 Stat. 2096
(2000) (VCAA) [codified as amended at 38 U.S.C. § 5102, 5103,
5103A, 5107]. The VCAA eliminated the former statutory
requirement that claims be well grounded. Cf. 38 U.S.C.A. §
5107(a) (West 1991). The VCAA includes an enhanced duty on
the part of VA to notify a claimant as to the information and
evidence necessary to substantiate a claim for VA benefits.
The VCAA also redefines the obligations of VA with respect to
its statutory duty to assist claimants in the development of
their claims. See 38 U.S.C.A. §§ 5103, 5103A (West Supp.
2002). Regulations implementing the VCAA have been enacted.
See 66 Fed. Reg. 45,630 (Aug. 29, 2001) [codified as amended
at 38 C.F.R. §§ 3.102, 3.156(a), 3.159, and 3.326(a)].
The VCAA is applicable to all claims filed on or after the
date of enactment, November 9, 2000, or filed before the date
of enactment and not yet final as of that date. Except for
provisions pertaining to claims to reopen based upon the
submission of new and material evidence, which is not at
issue here, the implementing regulations are also effective
November 9, 2000. Consequently, the regulations are
accordingly applicable. See Holliday v. Principi, 14 Vet.
App. 280 (2000) [the Board must make a determination as to
the applicability of the various provisions of the VCAA to a
particular claim].
The VCAA alters the legal landscape in three distinct ways:
standard of review, notice and duty to assist. The Board
will now address these concepts within the context of the
circumstances presented in this case.
Standard of review
The VCAA eliminated the concept of a well grounded claim, and
superseded the decision of the United States Court of Appeals
for Veterans Claims (the Court) in Morton v. West, 12 Vet.
App. 477 (1999), withdrawn sub nom. Morton v. Gober, 14 Vet.
App. (2000) (per curiam), in which the Court held that VA
could not assist in the development of a claim that was not
well grounded.
The current standard of review is as follows.
After the evidence has been assembled, it is the Board's
responsibility to evaluate the entire record. See 38
U.S.C.A. § 7104(a) (West Supp. 2002). When there is an
approximate balance of evidence regarding the merits of an
issue material to the determination of the matter, the
benefit of the doubt in resolving each such issue shall be
given to the claimant. 38 U.S.C.A. § 5107 (West Supp. 2002);
38 C.F.R. § 3.102 (2002). In Gilbert v. Derwinski, 1 Vet.
App. 49, 53 (1990), the Court stated that "a veteran need
only demonstrate that there is an 'approximate balance of
positive and negative evidence' in order to prevail." To
deny a claim on its merits, the preponderance of the evidence
must be against the claim. Alemany v. Brown, 9 Vet. App.
518, 519 (1996), citing Gilbert, 1 Vet. App. at 54.
Notice
The VCAA requires VA to notify the claimant and the
claimant's representative, if any, of any information, and
any medical or lay evidence not previously provided to the
Secretary that is necessary to substantiate the claim. As
part of the notice, VA is to specifically inform the claimant
and the claimant's representative, if any, of which portion,
if any, of the evidence is to be provided by the claimant and
which part, if any, VA will attempt to obtain on behalf of
the claimant. See 38 U.S.C.A. § 5103 (West Supp. 2002); see
also Quartuccio v. Principi, 16 Vet. App. 183 (2002) [a
letter from VA to an appellant describing evidence
potentially helpful to the appellant but not mentioning who
is responsible for obtaining such evidence did not meet the
standard erected by the VCAA].
After having carefully reviewed the record on appeal, the
Board has concluded that the requirements of the VCAA as to
notice apply to this case and have been effectively satisfied
with respect to the issues on appeal. The record reflects
that the veteran has been informed of the various
requirements of law pertaining to his appeal in the October
1994 Statement of the Case (SOC), and the September 2001
Supplemental Statement of the Case (SSOC).
Crucially, the veteran was notified by letter from the RO in
June 2002 of the evidence necessary to substantiate his claim
as well as the evidence he was expected to obtain and which
evidence VA would obtain. That four page letter specifically
explained the VCAA in great detail.
Based on the above, the Board concludes that the veteran has
been amply informed of what is required of him and of VA in
connection with his claims.
Duty to assist
In general, the VCAA provides that VA shall make reasonable
efforts to assist a claimant in obtaining evidence necessary
to substantiate the claimant's claim, unless no reasonable
possibility exists that such assistance would aid in
substantiating the claim. The law provides that the
assistance provided by VA shall include providing a medical
examination or obtaining a medical opinion when such an
examination or opinion is necessary to make a decision on the
claim. An examination is deemed "necessary" if the
evidence of record (lay or medical) includes competent
evidence that the claimant has a current disability, or
persistent or recurrent symptoms of disability; and indicates
that the disability or symptoms may be associated with the
claimant's active military, naval, or air service; but does
not contain sufficient medical evidence for the Secretary to
make a decision on the claim. See 38 U.S.C.A. § 5103A (West
Supp. 2002); 38 C.F.R. § 3.159 (2002).
The Board finds that all relevant evidence necessary for an
equitable resolution of the issue on appeal has been
identified and obtained. The evidence of record includes VA
and private treatment records, and reports of VA
examinations. The RO completed the development requested in
the Board's January 1997 remand, which was calculated to
secure additional evidence to enable the Board to provide an
informed decision. Report of a July 1997 rectal examination
and a November 2002 VA examination concerning the veteran's
hypertension are of record and will be discussed in the
Board's decision below.
There is no indication that there exists any other evidence
which has a bearing on this case. The veteran and his
representative have pointed to none, and the Board has
identified none.
With respect to the issue of entitlement to service
connection for hemorrhoids, the Board has given thought to
whether or not it is necessary that a medical nexus opinion
be obtained. See 38 U.S.C.A. § 5103A. However, the Board
has concluded that a medical opinion is not warranted. As
discussed in more detail below, the clinical records
covering the veteran's lengthy period of service do not
contain any reference to hemorrhoids. Thus, the matter
whether or not any chronic disability had its inception in
service is wholly contingent upon the probative weight to be
assigned to the veteran's statements versus the
contemporaneous clinical evidence. The assessment of
probative weight to be accorded between such evidence is a
role for adjudicators, not medical providers. Cf. Madden v.
Gober, 125 F.3d 1477, 1481 (Fed.Cir. 1997) and cases cited
therein [holding that the Board has the duty to assess the
credibility and weight to be given to the evidence]. In
short, the question to be answered is factual, not medical,
in nature and is within the province of the Board. The Court
has held on a number of occasions that a medical opinion
premised upon an unsubstantiated account is of no probative
value. See, e.g., Reonal v. Brown, 5 Vet. App. 458, 460
(1993); Moreau v. Brown, 9 Vet. App. 389, 395-396 (1996);
Swann v. Brown, 5 Vet. App. 229, 233 (1993). Obtaining a
medical nexus opinion under the circumstances presented in
this case would be a useless exercise.
In short, the Board has carefully considered the provisions
of the VCAA in light of the record on appeal, and for the
reasons expressed above finds that the development of the
claims has been consistent with the provisions of the new
law. Accordingly, the Board will proceed to a decision on
the merits on the issues on appeal.
1. Entitlement to an increased disability rating for
service-connected arterial hypertension, currently evaluated
as 10 percent disabling.
Disability ratings - in general
Disability evaluations are determined by the application of
VA's Schedule for Rating Disabilities (Schedule), 38 C.F.R.
Part 4. The percentage ratings contained in the Schedule
represent, as far as can be practicably determined, the
average impairment in earning capacity resulting from
diseases and injuries incurred or aggravated during military
service and the residual conditions in civil occupations. 38
U.S.C.A. § 1155 (West 1991); 38 C.F.R. §§ 3.321(a), 4.1
(2002). Separate diagnostic codes identify the various
disabilities.
Where there is a question as to which of two evaluations
shall be applied, the higher evaluation will be assigned if
the disability picture more nearly approximates the criteria
for the higher rating. Otherwise, the lower rating will be
assigned. 38 C.F.R. § 4.7 (2002).
In determining the disability evaluation, VA has a duty to
acknowledge and consider all regulations which are
potentially applicable based upon the assertions and issues
raised in the record and to explain the reasons and bases for
its conclusion. Schafrath v. Derwinski, 1 Vet. App. 589, 595
(1991). Governing regulations include 38 C.F.R. § 4.1 and §
4.2 (2002), which require the evaluation of the complete
medical history of the veteran's condition.
Specific schedular criteria
The veteran's arterial hypertension is evaluated under
38 C.F.R. § 4.104, Diagnostic Code 7101. During the pendency
of this appeal, the criteria for evaluating diseases of the
cardiovascular system were changed, effective January 12,
1998. See 62 Fed. Reg. 65207-65224 (1997). Because the
veteran's initial and ongoing claim was filed in before the
regulatory change occurred, he is entitled to application of
the version most favorable to him. See, in general, Karnas
v. Derwinski, 1 Vet. App. 308, 313 (1991); see also
VAOPGCPREC 3-2000 (2000) [Opinion of VA General Counsel that
the decision in Karnas is to be implemented by first
determining whether the revised version is more favorable to
the veteran. In so doing, it may be necessary for the Board
to apply both the former and current versions of the
regulation. If the revised version of the regulation is more
favorable, the retroactive reach of that regulation under 38
U.S.C.A. § 5110(g) (West 1991), can be no earlier than the
effective date of that change, and that the Board must apply
only the earlier version of the regulation for the period
prior to the effective date of the change.]
Prior to January 12, 1998, a 10 percent evaluation was
assignable for hypertensive vascular disease for diastolic
pressure of predominantly 100 or more. A 20 percent
evaluation was assignable for diastolic pressure of
predominantly 110 or more with definite symptoms. A 40
percent evaluation was assignable when diastolic pressure was
predominantly 120 or more and moderately severe symptoms were
demonstrated. A 60 percent evaluation was assignable when
diastolic pressure was predominantly 130 or more and severe
symptoms were demonstrated. 38 C.F.R. § 4.104, Diagnostic
Code 7101 (1997).
On or after January 12, 1998, a 10 percent evaluation is
assignable for diastolic blood pressure of predominantly 100
or more, or; systolic pressure predominantly 160 or more, or;
minimum evaluation for an individual with a history of
diastolic pressure of predominantly 100 or more who requires
continuous medication for control. A 20 percent evaluation
is assignable for diastolic blood pressure of predominantly
110 or more, or; systolic pressure predominantly 200 or more.
A 40 percent evaluation is assignable for diastolic blood
pressure of predominantly 120 or more. A 60 percent
evaluation is assignable for diastolic blood pressure of
predominantly 130 or more. Hypertension or isolated systolic
hypertension must be confirmed by readings taken two or more
times on at least three different days.
38 C.F.R. § 4.104, Diagnostic Code 7101, Note (1) (2002).
Factual background
The award was based, in part, on VA examination in May 1992
which noted blood pressure readings of: 140/100 (sitting);
140/98 (recumbent); 140/90 (standing); 152/104 (sitting after
exercise); and 144/100 (two minutes after exercise). The
diagnosis was arterial hypertension.
In an October 1993 rating decision, the RO granted service
connection for arterial hypertension, which was evaluated as
noncompensably disabling from January 1, 1992, the day after
the veteran left military service. See 38 C.F.R. § 3.400
(2002).
The veteran appealed that decision as to the assigned
disability rating.
During a VA examination in July 1997, the veteran indicated
that he had never been on medication for his hypertension.
Blood pressure readings were 150/90 (sitting), 140/100
(standing) and 150/94 (recumbent). Cardiovascular
examination revealed no heart disease. The diagnosis was
vascular hypertension on no medication.
On VA examination in April 1998, it was noted that the
veteran was not under current treatment for high blood
pressure, although he had been told by his primary care
physician that his blood pressure was not under control and
that he would have to start taking medication in the future.
Blood pressure readings were 160/98 (sitting), 160/95
(standing) and 160/100 (after exercise). Cardiovascular
examination revealed regular heart sounds with no gallop or
murmur. An electrocardiogram was normal with no ischemia.
The diagnosis was borderline hypertension with no
complications.
Blood pressure readings recorded from 1999 to 2001 include a
range of 119-169 systolic over a range of 60-99 diastolic;
specific readings were 141/88 (May 1999); 134/86 (September
1999); 119/74, 169/99, and 100/60 (December 1999); 131/81 and
121/70 (January 2001); 125/74 (February 2001); 130/84 (March
2001); 136/74 and 116/74 (May 2001); 128/85 (December 2001);
and 121/77 (February 2002). Diagnoses included hypertension,
longstanding duration (December 1999) and hypertension-good
control (January 2001). A record dated January 14, 1999
noted that the veteran had uncontrolled blood pressure and
that he was taking Simvastatin.
The veteran was afforded a VA examination in November 2002.
It was noted that he had suffered two myocardial infarctions
in 1999. At that time, he had angioplasty and two stent
placements. His blood pressure was 145/90. Cardiovascular
examination revealed regular rate and rhythm with no murmurs,
gallops or rubs. There was no edema. The diagnosis was
hypertension.
In a February 2003 rating decision, the evaluation for
arterial hypertension was increased to 10 percent, effective
December 19, 2001.
Analysis
The veteran is seeking an increased disability rating for his
service-connected hypertension. That disability has been
rated by the RO as being noncompensably disabling from
January 1, 1992 and 10 percent disabling from December 19,
2001.
The Board initially notes that service connection has been
granted for coronary artery disease with history of
myocardial infarction associated with arterial hypertension.
A 30 percent is currently in effect for that disability, and
to the Board's knowledge that has not been challenged by the
veteran. Thus, the only aspect of the veteran's
cardiovascular disease which is currently under consideration
is the arterial hypertension.
Schedular rating
As discussed above, the schedular criteria for evaluating
arterial hypertension changed during the course of this
appeal. Upon review, the Board finds that under either the
old or new criteria, the preponderance of the evidence is
against assignment of a disability rating higher than the
currently assigned 10 percent for hypertension. The highest
diastolic and systolic pressures recorded were 104 (May 1992)
and 169 (December 1999), respectively. The report of VA
examination in November 2002 revealed that the veteran's
blood pressure was 145/90. This evidence does not show that
the veteran's diastolic pressure is predominantly 110 or
more, or that his systolic pressure is predominantly 200 or
more, or that he has definite symptoms due to his
hypertension. The veteran and his representative have not
pointed to any evidence which supports the assignment of a
higher disability rating. The requirements for a 20 percent
or higher disability rating under either the former or
current schedular criteria have therefore not been met.
Accordingly, the preponderance of the evidence is against
assignment of a rating in excess of the currently assigned 10
percent for hypertension under both the former and the
current schedular criteria.
Fenderson considerations
The veteran has appealed the disability rating initially
assigned with the grant of service connection in October
1993. Because he has appealed the initial rating, the Board
must consider the applicability of staged ratings covering
the time period in which his claim and appeal have been
pending. See Fenderson v. West, 12 Vet. App. 119 (1999).
The veteran's arterial hypertension was rated by the RO as
noncompensable (0%) from January 1, 1992, the day after he
left service, until December 19, 2001, when a 10 percent
rating was assigned. The 10 percent rating was based on
receipt of a statement from Dr. G.J., a private cardiologist,
indicating that the veteran was taking medication for
hypertension. Cf. 38 C.F.R. § 3.400(o) (2002).
After reviewing the medical records, described above, the
Board believes that the 10 percent rating should be made
effective from January 1, 1992. A longitudinal review of the
evidence shows that at the time of the May 1992 VA
examination 3 of the 5 diastolic pressure readings were 100
or more. In addition, a VA treatment record dated on January
14, 1999 indicates that the veteran had uncontrolled blood
pressure and that he was taking medication, Simvastatin. The
Board notes that this was one of the cardiac medications Dr.
G.J. reported the veteran taking in his December 19, 2001
statement. Thus, in light of all the foregoing, and
resolving all doubt in the veteran's favor, the Board finds
it reasonable to conclude that the symptomatology associated
with the veteran's service-connected hypertension more nearly
approximated that of a 10 percent rating under both the old
and new criteria of Diagnostic Code 7101 from January 1, 1992
to December 19, 2001.
However, the evidence does not show that the veteran's
hypertension met the criteria for a 20 percent rating under
either the old or new criteria during this period. At no
time between January 1, 1992 and December 19, 2001 was the
veteran's diastolic pressure predominately 110 or more with
definite symptoms nor was his systolic pressure predominately
200 or more.
Conclusion
For the reasons and bases expressed above the Board has
determined that the evidence warrants the assignment of a 10
percent rating for arterial hypertension from January 1, 1992
forward. The preponderance of the evidence is against a
rating in excess of 10 percent for arterial hypertension.
2. Entitlement to service connection for hemorrhoids.
Service connection - in general
In general, service connection may be granted for disability
resulting from disease or injury incurred in or aggravated by
active military service. 38 U.S.C.A. §§ 1110, 1131 (West
1991 & Supp. 2002); 38 C.F.R. § 3.303 (2002). In addition,
service connection may be granted for any disease diagnosed
after discharge, when all the evidence, including that
pertinent to service, establishes that the disease was
incurred in service. 38 C.F.R. § 3.303(d) (2002).
In order to establish service connection for the claimed
disorder, there must be (1) medical evidence of current
disability; (2) medical, or in certain circumstances, lay
evidence of in-service incurrence or aggravation of a disease
or injury; and (3) medical evidence of a nexus between the
claimed in-service disease or injury and the current
disability. See Hickson v. West, 12 Vet. App. 247, 253
(1999). The determination as to whether these requirements
are met is based on an analysis of all the evidence of record
and the evaluation of its credibility and probative value.
See Baldwin v. West, 13 Vet. App. 1, 8 (1999).
Factual background
The veteran's service medical records are negative for
findings or diagnosis for hemorrhoids. In completing the
report of his medical history, associated with his September
1991 separation examination, the veteran reported having
piles; however, clinical evaluation of the anus and rectum
revealed no masses.
On VA examination in May 1992, the veteran reported that he
had suffered from hemorrhoids in the past. Clinical
evaluation of the digestive system revealed no hemorrhoids.
A VA medical record dated in March 1993 indicated that the
veteran complained of hemorrhoid pain and inflammation. The
diagnosis was hemorrhoids.
On VA examination in July 1997, the veteran reported rectal
bleeding and stated that he used Anusol suppositories three
to four times per week. On physical examination, hemorrhoids
were not felt. Evidence of bleeding and stool guaiac was
negative. The diagnosis was history of external hemorrhoids.
Submitted in late 2001 were prescriptions for hemorrhoid
medications dated in November 2001.
Analysis
As discussed above, in order to establish service connection
for a disability, there must be (1) evidence of a current
disability; (2) evidence of in-service incurrence; and (3)
medical evidence of a nexus between the claimed in-service
disease or injury and the current disability. See Hickson,
supra.
With respect to Hickson element (1), although the veteran has
complained of hemorrhoids on several occasions, there appears
to be no recent clinical evidence
which document the existence of hemorrhoids. There is a VA
medical record dated in March 1993 which includes a diagnosis
of hemorrhoids. The 1997 VA examination included a diagnosis
of hemorrhoids by history only. See Sanchez-Benitez v. West,
13 Vet. App. 282 (1999) [service connection may not be
granted for a diagnosis of a disability by history or for
symptoms unaccompanied by a current diagnosis]. There are no
recent records showing treatment for hemorrhoids, although
there is a recent prescription for hemorrhoid medication.
Although the Board does not necessarily doubt that the
veteran may occasionally experience hemorrhoids, there is no
evidence of a chronic disability for which service connection
may be granted. See Rabideau v. Derwinski, 2 Vet. App. 141,
143 (1992); Gilpin v. Brown, 155 F.3d 1353 (Fed. Cir. 1998)
[service connection may not be granted unless a current
disability exists]. Hickson element (1) has therefore not
been met.
With respect to Hickson element (2), in service incurrence
the medical evidence of record does not demonstrate that the
veteran's hemorrhoids were present in service. The service
medical records show no treatment for or diagnosis of the
condition. While the veteran reported having piles at his
separation examination in September 1991, rectal examination
at that time revealed no masses.
There is absolutely no clinical evidence that hemorrhoids
existed during the veteran's lengthy service. As indicated
above, the veteran's service medical records do not
demonstrate the presence of a chronic condition in service.
Hickson element (2) has accordingly not been met.
With respect to Hickson element (3), medical nexus, the
medical records do not indicate that this condition is
related to service. The only evidence which is supportive of
the claim emanates from the veteran himself. However, it is
now well-established that a layperson without medical
training, such as the veteran, is not competent to provide
evidence that requires medical knowledge. See Espiritu v.
Derwinski, 2 Vet. App. 492, 494-5 (1992); see also 38 C.F.R.
§ 3.159 (2002).
In summary, for the reasons and bases expressed above, the
Board concludes that the preponderance of the evidence is
against the veteran's claim. Accordingly, entitlement to the
benefit sought is not warranted.
ORDER
From January 1, 1992 forward, a rating of 10 percent for
arterial hypertension is granted, subject to the applicable
laws and regulations concerning the payment of monetary
benefits. A rating in excess of 10 percent for arterial
hypertension is denied.
Entitlement to service connection for hemorrhoids is denied.
REMAND
The veteran is also seeking service connection for nicotine
addiction and alcoholism. For reasons expressed immediately
below, the Board believes that additional development of
these issues is required.
Nicotine addiction
The veteran contends that he was introduced to smoking while
in service in Vietnam when cigarettes were provided as part
of his C-rations and he was encouraged to smoke by his
superior officers and peers. During a psychiatric
examination in January 1994, he related that he began smoking
in high school and was expelled from high school for smoking.
After that, he joined the Air Force. His service medical
records reflect that he obtained prescriptions for Nicorette(r)
gum several times and attended at least one smoking cessation
program, but was apparently unable to quit smoking. Although
VA medical records dated in 1999 reflect that the veteran was
again enrolled in a smoking cessation program clinic, a
psychiatric diagnosis of nicotine dependence in accordance
with DSM-IV is not of record.
The Board notes that on July 22, 1998, the Internal Revenue
Service Restructuring and Reform Act was enacted. That law
added 38 U.S.C. § 1103, which prohibits service connection
for disability or death on the basis that it resulted from
disease or injury attributable to the use of tobacco products
during a veteran's active service.
However, by its terms, 38 U.S.C. § 1103 is applicable only to
claims filed after June 9, 1998. Because the veteran filed
his claim for service connection nicotine dependence prior to
that time, the statute does not apply in his case, and prior
General Counsel opinions permitting service connection based
on tobacco use during service apply. Cf. Karnas, supra.
The Board notes a May 5, 1997 VA memorandum from the Under
Secretary of Health to the General Counsel in which the Under
Secretary for Health affirmed that nicotine dependence may be
considered a disease. Moreover, paragraph 5 of VA USB letter
20-97-14 from the Under Secretary for Benefits, addressed to
all VBA offices and centers, directs that, in light of the
Under Secretary for Health's opinion, the answer to all
nicotine dependence cases on this issue is that nicotine
dependence is a disease.
In this case, it is unclear whether the veteran can be
considered to be nicotine dependent and if so whether such
nicotine dependence is related to smoking during military
service, as opposed to smoking before and since service. The
Board believes that additional development in the form of a
VA psychiatric examination is required to answer these
questions.
Alcoholism
The veteran contends that his alcoholism had its inception
during service. He states that he did not drink prior to his
entrance into service and as alcohol usage was encouraged in
service. Alternatively, he contends that service connection
for alcoholism is warranted on a secondary basis in that his
PTSD proximately caused his alcoholism.
A January 1994 examination report prepared by the board of
two VA psychiatrists contains an Axis I diagnosis of "meets
the criteria for alcohol dependence". An August 1994
addendum to the report indicates that the veteran drank to
cope with his fear in Vietnam, a habit which he continued.
As noted in the Introduction, service connection for PTSD was
granted by the RO in February 2003. The Board notes that
although the law generally precludes the payment of VA
compensation benefits for primary alcohol abuse and
disabilities that are secondary to alcohol abuse, alcohol
abuse that is secondary to a service-connected disorder may
be compensated. See Allen v. Principi, 237 F.3d 1368 (Fed.
Cir. 2001), motion for review en banc denied (Fed. Cir. Oct.
16, 2001); VAOPGCPREC 2-98 and 7-99. Under the circumstances
here presented, the Board believes that the veteran should be
afforded a VA psychiatric examination to determine whether a
current diagnosis of alcoholism is warranted and, if so,
whether the condition is proximately due to or the result of
the service-connected PTSD.
Accordingly, this case is REMANDED for the following action:
1. The RO should contact the veteran and
request that he provide the names,
addresses, and approximate dates of
treatment of all health care providers
who have treated him for nicotine
addiction and alcoholism since service.
After securing any necessary
authorizations, the RO should request
copies of all such records which have not
been previously secured and associate
them with the claims folder.
2. After the above development, the RO
should schedule the veteran for a VA
psychiatric examination to determine the
nature and etiology of all psychiatric
disorders present. The claims folder and
a separate copy of this remand should be
made available to the examiner prior to
the examination. The examiner should
indicate whether a diagnosis of nicotine
dependence is warranted and, if so, opine
whether it is as least as likely as not
the result of in-service smoking, as
opposed to smoking before and after
service. The examiner should also
indicate whether a diagnosis of alcohol
dependence is warranted and, if so, opine
whether it is as least as likely as not
that it is related to the veteran's
service-connected PTSD. The rationale
for all opinions must be provided.
3. Thereafter, the RO should
readjudicate the issues of entitlement to
service connection for nicotine addiction
and alcoholism.
If any benefit sought remains denied, the veteran and his
representative should be provided a supplemental statement of
the case, which reflects RO consideration of all additional
evidence, and the opportunity to respond. Thereafter, the
case should be returned to the Board for further appellate
review. The purpose of this REMAND is to obtain additional
evidence and ensure that the veteran is afforded all due
process of law. The Board intimates no opinion, either
factual or legal, as to the ultimate conclusion warranted in
this case. No action is required by the veteran until
contacted by the RO.
The veteran has the right to submit additional evidence and
argument on the matters the Board has remanded to the RO.
See Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment by the RO.
The law requires that all claims that are remanded by the
Board of Veterans' Appeals or by the United States Court of
Appeals for Veterans Claims for additional development or
other appropriate action must be handled in an expeditious
manner. See The Veterans' Benefits Improvements Act of 1994,
Pub. L. No. 103-446, § 302, 108 Stat. 4645, 4658 (1994),
38 U.S.C.A. § 5101 (West 2002) (Historical and Statutory
Notes).
In addition, VBA's Adjudication Procedure Manual, M21-1, Part
IV, directs the ROs to provide expeditious handling of all
cases that have been remanded by the Board and the Court.
See M21-1, Part IV, paras. 8.44-8.45 and 38.02-38.03.
______________________________________________
Barry F. Bohan
Veterans Law Judge, Board of Veterans' Appeals
IMPORTANT NOTICE: We have attached a VA Form 4597 that tells
you what steps you can take if you disagree with our
decision. We are in the process of updating the form to
reflect changes in the law effective on December 27, 2001.
See the Veterans Education and Benefits Expansion Act of
2001, Pub. L. No. 107-103, 115 Stat. 976 (2001). In the
meanwhile, please note these important corrections to the
advice in the form:
? These changes apply to the section entitled "Appeal to
the United States Court of Appeals for Veterans
Claims." (1) A "Notice of Disagreement filed on or
after November 18, 1988" is no longer required to
appeal to the Court. (2) You are no longer required to
file a copy of your Notice of Appeal with VA's General
Counsel.
In the section entitled "Representation before VA," filing
a "Notice of Disagreement with respect to the claim on or
after November 18, 1988" is no longer a condition for an
attorney-at-law or a VA accredited agent to charge you a fee
for representing you.
|
Citation Nr: 0300766
Decision Date: 01/14/03 Archive Date: 01/28/03
DOCKET NO. 95-20 777A ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Atlanta,
Georgia
THE ISSUE
Entitlement to service connection for a low back disorder.
REPRESENTATION
Appellant represented by: Georgia Department of
Veterans Service
WITNESS AT HEARING ON APPEAL
The veteran
ATTORNEY FOR THE BOARD
A. C. Mackenzie, Counsel
INTRODUCTION
The veteran served on active duty from August 1965 to May
1968.
This matter comes before the Board of Veterans' Appeals
(Board) on appeal from an August 1994 rating decision
issued by the Department of Veterans Affairs (VA) Regional
Office (RO) in Atlanta, Georgia. The Board remanded this
case back to the RO in July 1997, and the case has since
been returned to the Board.
FINDINGS OF FACT
1. All relevant evidence necessary to render a decision
on the veteran's claim has been obtained by the RO, and
the RO has notified him of the type of evidence needed to
substantiate his claim.
2. There is competent medical evidence establishing an
etiological relationship between the veteran's current low
back disorder and service.
CONCLUSION OF LAW
A low back disorder was incurred in service. 38 U.S.C.A.
§§ 1110, 1112, 1113, 5103, 5103A, 5107 (West 1991 & Supp.
2002); 38 C.F.R. §§ 3.159, 3.303, 3.307, 3.309 (2002).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
As an initial matter, the Board observes that, during the
pendency of this appeal, substantial revisions have been
made to the laws and regulations concerning the VA's
duties in developing a claim for a VA benefit. On
November 9, 2000, the Veterans Claims Assistance Act of
2000 (VCAA), Pub. L. No. 106-475, 114 Stat. 2096 (2000)
was enacted. The VCAA redefines the VA's obligations with
respect to its duty to assist the claimant with the
development of facts pertinent to a claim and includes an
enhanced duty to notify the claimant as to the information
and evidence necessary to substantiate a claim for VA
benefits. This change in the law is applicable to all
claims filed on or after the date of enactment of the VCAA
or filed before the date of enactment and not yet final as
of that date. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A,
5106, 5107, 5126 (West 1991& Supp. 2002). See also Karnas
v. Derwinski, 1 Vet. App. 308, 312-13 (1991).
The final rule implementing the VCAA was published on
August 29, 2001. 66 Fed. Reg. 45,620-45,632 (Aug. 29,
2001) (codified as amended at 38 C.F.R. §§ 3.102,
3.156(a), 3.159 and 3.326(a) (2002)). These regulations,
likewise, apply to any claim for benefits received by the
VA on or after November 9, 2000, as well as to any claim
filed before that date but not decided by the VA as of
that date, with the exception of the amendments to 38
C.F.R. § 3.156(a) (relating to the definition of new and
material evidence) and to the second sentence of §
3.159(c) and § 3.159(c)(4)(iii) (pertaining to VA
assistance in the case of claims to reopen previously
denied final claims), which apply to any application to
reopen a finally decided claim received on or after August
29, 2001. See 66 Fed. Reg. 45,620 (Aug. 29, 2001).
In this case, the Board finds that all relevant facts have
been properly developed in regard to the veteran's claim,
and no further assistance is required in order to comply
with the VA's statutory duty to assist him with the
development of facts pertinent to his claim. See 38
U.S.C.A. § 5103A (West Supp. 2002); 38 C.F.R. § 3.159
(2002). Specifically, the RO has obtained records
corresponding to medical treatment reported by the
veteran, and he has been afforded a VA examination
addressing the nature and etiology of his claimed
disorder. There is no indication of additional relevant
medical evidence that has not been obtained by the RO to
date.
The VA's duty to notify the veteran of the evidence
necessary to substantiate his claim has also been met, as
the RO informed him of the need for such evidence in an
April 2002 Supplemental Statement of the Case. See
38 U.S.C.A. § 5103 (West 1991 & Supp. 2002). This
issuance, which includes a summary of the newly enacted
provisions of 38 U.S.C.A. §§ 5103 and 5103A, also contains
a specific explanation of the type of evidence necessary
to substantiate the veteran's claim, as well as which
portion of that evidence (if any) was to be provided by
him and which portion the VA would attempt to obtain on
his behalf. The specific requirements for a grant of the
benefit sought on appeal will be discussed in further
detail below, in conjunction with the discussion of the
specific facts of this case. See generally Quartuccio v.
Principi, 16 Vet. App. 183 (2002).
Service connection may be granted for a disability
resulting from disease or injury incurred in or aggravated
by service. 38 U.S.C.A. § 1110 (West 1991); 38 C.F.R.
§ 3.303(a) (2002). For the showing of chronic disease in
service, there is required a combination of manifestations
sufficient to identify the disease entity and sufficient
observation to establish chronicity at the time. If
chronicity in service is not established, a showing of
continuity of symptoms after discharge is required to
support the claim. 38 C.F.R. § 3.303(b) (2002). Service
connection may also be granted for any disease diagnosed
after discharge when all of the evidence establishes that
the disease was incurred in service. 38 C.F.R. § 3.303(d)
(2002). Also, certain chronic diseases, including
arthritis, may be presumed to have been incurred during
service if manifested to a compensable degree within one
year of separation from active military service. 38
U.S.C.A. §§ 1112, 1113 (West 1991 & Supp. 2002); 38 C.F.R.
§§ 3.307, 3.309 (2002).
In March 1966, during service, the veteran was treated for
a pulled muscle in the low back and complained of being
unable to lift heavy objects. Also, x-rays of the
lumbosacral spine from March 1968 revealed "changes which
are suggestive but not definite of possible
spondylolysis." No back abnormalities were noted in his
May 1968 separation examination report, however.
Subsequent to service, the veteran was treated at a
private facility for low back pain, rule out herniated
nucleus pulposus versus strain, in October 1980. VA
lumbosacral spine x-rays from October 1981 revealed a
large globule of pantopaque oil in the spinal canal, with
no "definite" disc narrowing or spondylosis appreciated.
A January 1988 VA examination report contains a diagnosis
of a history of lumbar strain, with minimal degenerative
changes of the lumbar spine, and x-rays from that date
revealed minimal degenerative changes of the lumbar spine.
Subsequent VA and private medical records reflect
continued treatment for low back symptomatology.
In November 2002, the veteran was afforded a VA spine
examination, conducted by an examiner who reviewed the
entire claims file. The examiner noted the veteran's
treatment for low back abnormalities in 1966, 1968, and
1981. The diagnosis was low back syndrome, post-
traumatic, and a magnetic resonance imaging study (MRI)
revealed degenerative disc disease with herniation at L4-
L5. The examiner concluded that the veteran's "problem
with his back" had its onset in March 1966, during
service; therefore, "it is at least as likely as not that
the present back condition may be possibly related to that
initial trauma or experience."
The Board has reviewed all of the evidence noted above and
finds that there is evidence suggesting low back
abnormalities dating back to service. Moreover, the
November 2002 VA examination report indicates that the
veteran has back problems dating back to service and that
there is at least a fifty percent probability that his
currently diagnosed low back disorder is attributable to
service. This opinion is not contradicted by any other
medical evidence of record.
In this regard, the Board notes that the VA is statutorily
required to resolve the benefit of the doubt in favor of
the veteran when there is an approximate balance of
positive and negative evidence regarding the merits of an
outstanding issue. See Gilbert v. Derwinski, 1 Vet. App.
49, 55 (1990); 38 U.S.C.A. § 5107(b) (West 1991 & Supp.
2002). As such, and after resolving all doubt in favor of
the veteran in view of the November 2002 VA examination
report, the Board concludes that his low back disorder was
incurred in service. Therefore, service connection is
warranted for this disorder.
ORDER
The claim of entitlement to service connection for a low
back disorder is granted.
JEFF MARTIN
Member, Board of Veterans' Appeals
IMPORTANT NOTICE: We have attached a VA Form 4597 that tells
you what steps you can take if you disagree with our
decision. We are in the process of updating the form to
reflect changes in the law effective on December 27, 2001.
See the Veterans Education and Benefits Expansion Act of
2001, Pub. L. No. 107-103, 115 Stat. 976 (2001). In the
meanwhile, please note these important corrections to the
advice in the form:
? These changes apply to the section entitled "Appeal
to the United States Court of Appeals for Veterans
Claims." (1) A "Notice of Disagreement filed on or
after November 18, 1988" is no longer required to
appeal to the Court. (2) You are no longer required
to file a copy of your Notice of Appeal with VA's
General Counsel.
? In the section entitled "Representation before VA,"
filing a "Notice of Disagreement with respect to the
claim on or after November 18, 1988" is no longer a
condition for an attorney-at-law or a VA accredited
agent to charge you a fee for representing you.
|
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 134
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 135
The facts, which were either proved without dispute, or were conceded, raised the question of law whether the defendant had made itself liable to the demand of the plaintiff in the amount of the draft deposited with it for collection. The determination, which was made by the court, at Special *Page 136
Term, in favor of the defendant, has been reversed by the Appellate Division solely upon the law. The view of that learned court was that, as between the defendant and the drawee of the draft in collection, the receipt of the check of the latter was a payment of the draft and that the crediting by the defendant of the amount to the plaintiff's account made it his debtor. It was considered that the presumption, that the check of the drawee of the draft was received by the defendant's agent in payment, became absolute, in the absence of any repudiation of the agreement to accept it as payment, or of its return to the South Hutchinson Bank with a demand for the return of the draft. This view was rested upon the proposition that the defendant was bound to return to the plaintiff the draft which he had deposited, or the money, and that, to justify the cancellation of the credit given him for the amount and the refusal to pay him the money, the defendant was bound to return to him the draft properly protested. The discussion of this case at the Appellate Division was very extended; but I think that the question involved resolves itself into this simple proposition: was the defendant not concluded by its conduct from denying that it had rendered itself liable to the plaintiff? If that is true, then that result must be attributed to its negligent conduct of the transaction; which, in its consequences, places it in a position where it can not gainsay its liability. I think that, upon the undisputed facts of this case, there was but the one legal conclusion possible and that is, that the defendant must be deemed to have intended to treat the draft as paid and that that intention was conclusively expressed when it entered the item as a credit to the plaintiff. The question of that intention was, of course, under the circumstances, purely one of law. (Clark v.Merchants' Bank, 2 N.Y. 380.)
The complaint alleged all the facts, upon which to predicate the liability of the defendant, and within the rule, as laid down in Whiting v. City Bank, (77 N.Y. 363), the plaintiff was entitled to recover; notwithstanding that he may have stated the ground inartificially, or erroneously. *Page 137
It may be observed that this is not the case of the collection of the simple draft of the plaintiff's debtor; but that it is one where the draft bore the indorsement of another. When the defendant assumed the duty of collecting the draft, it was bound to exercise reasonable care in the performance of that duty and the measure of its responsibility was, if it failed to collect the amount of the draft, to account to the plaintiff for the draft, properly protested for non-payment. Assuming that the defendant was entitled to rely upon the custom among banks of taking the check of the drawee of the draft for the payment of the same, it was bound to the exercise of care for the protection of all of its depositor's rights and, to preserve itself from assuming any further liability to him in the matter, to be reasonably cautious in what it did, that its relation to him of a collecting agent should not be changed. When, on November 3d, it was in receipt of the drawee's check, it might have retained the check until after presentation for payment; when, if payment was refused, it might have caused the check to be returned to the South Hutchinson Bank, in order that, by the return of the draft, and its due protest for non-payment, the plaintiff's rights upon it should be fully protected. But it appears to have rested upon its agent's responsibility in accepting the check of the drawee of the draft, by, immediately upon its receipt, giving credit to the plaintiff as for a collection made. It was not until November 26th, twenty-one days after giving that credit, that it appears to have undertaken to revoke the credit given.
The plaintiff was no party to the proceedings for collection and the agencies selected by his bank to collect the draft were, in no sense, his agencies. (St. Nicholas Bank v. State Nat.Bank, 128 N.Y. 26.) He had the right to look for the return of his draft properly protested, if unpaid; or to a credit of its amount. When, therefore, on November 3d, he was notified by the defendant that he was credited with the amount of the draft, and the amount was placed to his credit by the entry in the pass book, brought to the bank upon its request, he was entitled then to regard the bank as having become his debtor *Page 138
for its amount. The general rule is that credit given in a pass book binds the bank and, in the absence of some clerical mistake with respect to the entry, when the credit entry has been made, the bank has then charged itself with a debt absolutely due to its customer. (Metropolitan Nat. Bank v. Loyd, 90 N.Y. 530,537.) The result of the action of the defendant on November 3d, in sending for the plaintiff and in making the credit entry in his pass book, was to close the transaction of collection and to charge itself as a debtor to him for the amount of the draft. The plaintiff could have drawn out all of the money on that day standing to his credit and the bank, upon the non-payment of the check when presented on November 5th, would have had no legal claim upon him to compel repayment. By admitting an indebtedness for the money on November 3d, it had assumed all the risks of its agent's transaction. I think that the action of the defendant was conclusive evidence of an intention to change its status from that of a mere collecting agent to that of a debtor to the plaintiff for the amount of the draft. The relations of a bank to its depositor, while within the influence of morals, are, nevertheless, governed by legal rules. The plaintiff had the right to hold the defendant to the obligation it had assumed and, especially, as he had done nothing to influence its action. The defendant having acknowledged the relation of debtor, how could the plaintiff be estopped from insisting upon the defendant's liability, because of any part which he may have taken in aiding the latter to procure the payment of the check by Blanchard, the indorser upon the draft? The plaintiff never consented to the cancellation of the credit and I do not think that it was within the right, or the power, of his debtor, alone, to vary the agreement implied from the previously assumed relation of debtor and creditor.
I think the order should be affirmed and, under the stipulation, that judgment absolute should be ordered against the defendant, with costs.
PARKER, Ch. J., MARTIN, VANN, CULLEN and WERNER, JJ., concur; BARTLETT, J., concurs in result.
Ordered accordingly. *Page 139 |
Case 7:19-mj-01181 Document 1 Filed on 05/23/19 in TXSD Pagei1of4 .
United States District Court
AO 91 (Rev. 11/11) Criminal Complaint Southern District Of Texas
UNITED STATES DISTRICT COURT may 23 2019
for the
id J. Bradley, Clerk
Southern District of Texas Dav a
United States of America )
v q_\\ B|_-M
Alejandra Dianey MENDOZA-GARCIA ) Case No. M-( ~
YOB: 1988 )
Carolina Alejandra TREVINO-Tapia )
YOB: 1990 )
)
Defendant(s)
CRIMINAL COMPLAINT
I, the complainant in this case, state that the following is true to the best of my knowledge and belief.
On or about the date(s) of May 2, 2019 in the county of Hidalgo in the
Southern District of Texas , the defendant(s) violated: ,
Code Section Offense Description
Title 21 U.S.C. Sec. 841(a)(1) Possession with Intent to Distribute more than 5 kilograms of Cocaine
Title 21 U.S.C. Sec. 846 Conspiracy with Intent to Distribute more than 5 Kilograms of Cocaine
This criminal complaint is based on these facts:
See Attachment A
@ Continued on the attached sheet.
dT
Rateneo 61 cL __ ARM
Complainant’s signature
PLIBR Srpree P 5
Hunter Steadman, DEA Special Agent
Printed name and title
Sworn to before me and signed in my presence.
Printed name and title
Judge’s signature
City and state: McAllen, Texas J. Hacker, United States Magistrate Judge
- /
Case 7:19-mj-01181 Document 1. Filed on 05/23/19 in TXSD_ Page 2 of 4
ATTACHMENT “A”
On May 1, 2019, DEA agents were conducting a narcotics investigation involving Carolina
Alejandra TREVINO-Tapia (hereinafter referred to as “TREVINO-Tapia”) and Alejandra Dianey
MENDOZA-Garcia (hereinafter referred to as “MENDOZA-Garcia”). On or about the same date,
a confidential source, who has provided information to DEA that has proven to be reliable and
corroborated by other information, communicated with TREVINO regarding an undetermined
amount of cocaine that was available for sale. TREVINO and the confidential source agreed to
_ meet regarding the quality and price of the cocaine.
On May 2, 2019, agents established surveillance at MENDOZA-Garcia’s apartment, which is
located at the Rio de Vida Apartments, 301 S. Inspiration Road, Mission, Texas 78572. On the
same date at approximately 4:32 P.M., agents observed TREVINO-Tapia and MENDOZA-Garcia at
the Rio de Vida Apartments. An agent later observed MENDOZA-Garcia carrying a large black-
colored bag, which had a bright red sweater on top of it. Both TREVINO-Tapia and MENDOZA-
Garcia were observed entering a maroon Nissan Murano, with TX Dealer plate 1BF-0113. Agents.
also observed the black-colored bag with the red sweater being placed in the back seat of said
Nissan Murano.
On the same date at approximately 4:34 P.M., a Hidalgo County Sheriff's deputy stopped the
aforementioned Nissan Murano for a traffic violation. During the traffic stop, a Hidalgo County
Sheriff's Office canine alerted to the Nissan Murano for the presence of narcotics odor. A deputy
searched said vehicle and discovered three (3) bundles of suspected cocaine in the backseat.
While at the traffic stop, MENDOZA-Garcia told agents that more cocaine could be found at her
apartment. MENDOZA-Garcia then provided agents with written consent to search her
apartment.
On the same date at approximately 5:18 P.M., agents made entry into MENDOZA-Garcia’s
apartment, identified as apartment number 421 at the Rio de Vida Apartments, Mission, Texas.
During a search of said apartment, agents discovered fifteen (15) additional bundles of suspected
cocaine inside a couch and one (1) bundle of suspected cocaine in the bedroom closet.’ The
substances contained in all the bundles field tested positive for cocaine and had a combined
weight of approximately 20 kilograms.
Case 7:19-mj-01181 Document 1 Filed on 05/23/19 in TXSD Page 3 of 4
ATTACHMENT “A”
Under rights advisement and waiver, MENDOZA-Garcia admitted that she was in possession of
the cocaine and had stored the cocaine bundles at her (MENDOZA-Garcia’s) apartment as a favor
for TREVINO-Tapia, who was the owner of the cocaine.
Case 7:19-mj-01181 Document 1 Filed on 05/23/19 in TXSD Page 4 of 4
ATTACHMENT “A”
On May 2, 2019, DEA agents were conducting a narcotics investigation involving Carolina
Alejandra TREVINO-Tapia (hereinafter referred to as “TREVINO-Tapia”) and Alejandra Dianey
MENDOZA-Garcia (hereinafter referred to as “MENDOZA-Garcia”). On said date, agents
established surveillance at MENDOZA-Garcia’s apartment, which is located at the Rio de Vida
Apartments, 301 S. Inspiration Road, Mission, Texas 78572. At approximately 4:32 P.M., agents
observed TREVINO-Tapia and MENDOZA-Garcia at the Rio de Vida Apartments. An agent later
observed MENDOZA-Garcia carrying a large black-colored bag, which had a bright red sweater
on top of it. Both TREVINO-Tapia and MENDOZA-Garcia were observed entering a maroon Nissan
Murano, with TX Dealer plate 1BF-0113. Agents also observed the black-colored bag with the red
/
sweater being placed in the back seat of said Nissan Murano.
On the same date at approximately 4:34 P.M., a Hidalgo County Sheriff's deputy stopped the
aforementioned Nissan Murano for a traffic violation. At the time of the stop, TREVINO was the
driver. During the traffic stop, a Hidalgo County Sheriff's Office canine alerted to the Nissan
Murano for the presence of narcotics odor. A deputy searched said vehicle and discovered three
(3) bundles of suspected cocaine in the backseat. While at the traffic stop, MENDOZA-Garcia told
agents that more cocaine could be found at her apartment. MENDOZA-Garcia then provided
agents with written consent to search her apartment.
On the same date at approximately 5:18 P.M., agents made entry into MENDOZA-Garcia’s
apartment, identified as apartment number 421 at the Rio de Vida Apartments, Mission, Texas.
During a search of said apartment, agents discovered fifteen (15) additional bundles of suspected
cocaine inside a couch and one (1) bundle of suspected cocaine in the bedroom closet. The
suspected cocaine contained in all the bundles had a combined weight of approximately 20
kilograms.
Under rights advisement and waiver, MENDOZA-Garcia admitted that she was in possession of
the cocaine and had stored the cocaine bundles at her (MENDOZA-Garcia’s) apartment as a favor
for TREVINO-Tapia, who was the actual owner of the cocaine.
|
OPINION AND JOURNAL ENTRY
{¶ 1} This is an original action in which pro-se Petitioner, John H. Johnson, seeks his release from the Noble Correctional Institution. He asserts that he was unlawfully imprisoned for his post-release control violation. Petitioner claims that the Stark County Adult Parole Authority violated the separation of powers when it, and not the trial court, placed him on post-release control. This is his sole basis for his habeas corpus claim.
{¶ 2} On January 10, 2006, Respondents, Jeffrey A. Wolfe, Warden of the Noble County Correctional Institution, et. al, filed a Civ.R. 12(B)(6) motion to dismiss Petitioner's petition. For the following reasons, the motion to dismiss is hereby sustained.
{¶ 3} Civ.R. 12(B)(6) authorizes a court to dismiss a cause for failure to state a claim upon which relief can be granted. The Ohio Supreme Court has generally limited habeas corpus review to matters in which the petitioner can establish that he was convicted by a court that lacked proper jurisdiction. State exrel. Pirman v. Money (1994), 69 Ohio St. 3d 591, 593,635 N.E.2d 26. As such, a habeas corpus claim is typically subject to Civ.R. 12(B)(6) dismissal when, in construing the petitioner's allegations in light most favorable to him, the allegations fail to show that the trial court did not have jurisdiction to render the conviction. Schrock v. Gansheimer, 11th Dist. No. 2002-A-0003, ¶ 4.
{¶ 4} In the instant cause, Petitioner seeks relief under R.C. § 2725.01, which allows one unlawfully imprisoned to inquire into the cause of his imprisonment. However, as Respondents point out, Petitioner failed to attach a copy of his commitment papers as required under R.C. § 2725.04(D). The Ohio Supreme Court has repeatedly held that the failure by a petitioner to attach copies of the applicable commitment papers constitutes a fatal defect requiring dismissal of the habeas corpus petition. Johnson v.Bobby, 103 Ohio St. 3d 96, 814 N.E.2d 61, 2004-Ohio-4438, ¶ 6-7
citing R.C. § 2725.04(D); State ex rel. McCuller v. Callahan,98 Ohio St. 3d 307, 784 N.E.2d 108, 2003-Ohio-858; Boyd v. Money
(1998), 82 Ohio St. 3d 388, 389, 696 N.E.2d 568.
{¶ 5} Petitioner has attempted to cure his error by the later submission of his commitment papers, which were filed with this Court after Respondents' motion to dismiss. However, Petitioner's subsequent submission of the commitment papers does not cure this fatal flaw in his petition. Cornell v. Schotten (1994),69 Ohio St. 3d 466, 633 N.E.2d 744; Stevenson v. State (July 12, 1995), 9th Dist. No. 94CA005943, 1; Rideau v. Russell (April 23, 2001), 12th Dist. No. CA2000-07-065, 2.
{¶ 6} Moreover, Petitioner's claim also lacks merit as he could have addressed his underlying claim in a direct appeal from the allegedly erroneous sentencing. A writ of habeas corpus is only available in extraordinary circumstances, when the petitioner is unlawfully restrained and has no adequate legal remedy, such as an appeal or postconviction relief. In reColeman (2002), 95 Ohio St. 3d 284, 767 N.E.2d 677. Any error that Petitioner claims in his sentencing could have been properly addressed in a direct appeal. Pollock v. Morris (1988),35 Ohio St. 3d 117, 117-118, 518 N.E.2d 1205. "Habeas corpus is not a substitute for appeal." Id. citing Stahl v. Shoemaker (1977),50 Ohio St. 2d 351, 354, 364 N.E.2d 286.
{¶ 7} As previously noted, Petitioner is incarcerated apparently as a result of a violation of his post-release control. Petitioner claims that the Stark County Adult Parole Authority, and not the trial court, placed him on post-release control following his incarceration for felonious assault. Thereafter, Appellant admits that he failed to report to his probation officer as required under post-release control. In fact, he pleaded guilty to escape as a result of his post-release control violation.
{¶ 8} Notwithstanding, Petitioner now claims that the Stark County Adult Parole Authority violated the separation of powers and that his period of post-release control was illegal; thus, this sanction is void.
{¶ 9} Clearly, Petitioner could have addressed these concerns in a direct appeal following his conviction and sentencing for felonious assault inasmuch as the trial court clearly explained the possibility of post-release control on the record. Appellant did not file the appropriate appeal. Accordingly, we must dismiss Petitioner's habeas corpus petition since it fails to state a claim for which relief can be granted.
{¶ 10} Final order. Clerk to serve notice as provided by the Civil Rules.
Waite, J., concurs.
Vukovich, J., concurs.
DeGenaro, J., concurs. |
85 Cal. App. 2d 506 (1948)
ALLAN C. NICHOLSON, Respondent,
v.
DELLA M. NICHOLSON, Appellant.
Civ. No. 16035.
California Court of Appeals. Second Dist., Div. Three.
May 17, 1948.
Benjamin & Lieberman for Appellant.
Moidel, Moidel, Moidel & Smith for Respondent.
SHINN, Acting P. J.
Della M. Nicholson, defendant and cross-complainant, appeals from an order denying her motion to vacate an interlocutory decree of divorce. The ground of the motion was that she was absent from the trial because she had been advised and believed that the court would grant a motion for continuance upon a showing that she was ill in Denver and had been advised by a physician not to make a trip to Los Angeles to attend the trial. On the motion to vacate she filed certain affidavits which she claims proved that her absence from the trial was due to mistake, inadvertence, surprise and excusable neglect. She made a sufficient showing that she had a meritorious defense and cause of action for separate maintenance and that both depended principally upon testimony she would have given had she been present at the trial.
The interlocutory decree was rendered October 22, 1946; appellant's motion to vacate was filed January 8, 1947, and was denied shortly thereafter. No appeal was taken from the interlocutory decree and no showing was made of reasons for not taking an appeal. Appellant's present counsel did not represent her in the trial court.
[1] Respondent objects to a consideration of the appeal on the merits, relying upon the rule that an appeal may not be taken from an order refusing to vacate a judgment or an order which is itself appealable. The rule he invokes is applicable *508 to situations where the grounds upon which it is sought to vacate the judgment existed before the judgment was rendered. (Litvinuk v. Litvinuk, 27 Cal. 2d 38 [162 P.2d 8].) A claim of error in denying a motion for a continuance under such circumstances would be considered on an appeal from the judgment and consequently would be nonappealable. But we are not considering the propriety of the order denying the continuances. The question here is the one that was before the court on the motion to vacate the judgment, namely, whether appellant made a sufficient showing for relief under section 473, Code of Civil Procedure, although we are, of course, under a duty to abide by the ruling of the trial court unless we are satisfied that in denying the motion the court was guilty of an abuse of discretion.
[2] The motion for continuance was made on the morning of the trial. Among the moving papers were a letter dated October 9, from appellant to her then attorneys in Los Angeles, written from Denver, stating that on account of ill health she would be unable to be present at the trial on October 22, "that it would be a physical hardship at this time to travel," and asking her attorneys to obtain a continuance of from 60 to 90 days; a copy of a letter from the attorneys dated October 11, stating, "we wish you would obtain an affidavit from your doctor setting forth all of the facts showing your inability to be present"; a writing dated October 16, signed and "acknowledged" before a notary public, by T. A. Triplett, M. D., addressed "to whom it may concern," reading as follows: "Mrs. Della Nicholson is under my treatment for hypotension, nervousness, insomnia and constipation. Her trouble developed after an operation at the age of forty seven. Due to her low pressure she has attacks of vertigo upon exertion and upon arising from the recumbent position. She informs me that she contemplates a trip but my advice is that at the time she should not travel." This was all the showing that was made on the motion for a continuance. It appears from an affidavit of respondent's counsel, filed on the motion to vacate the judgment, that the calendar judge denied the motion, stating, "the Doctor's affidavit shows nothing substantially wrong with Mrs. Nicholson's health except what most clients in litigation suffer before trial." The additional affidavits which accompanied the motion to vacate the judgment amplified to some extent the showing of appellant's illness. In her affidavit she stated that on the date of the trial she was under the care of Dr. T. A. Triplett; that at the time of the trial she was and had been *509 for some 10 days confined to her bed; that she was suffering from vertigo which caused her to lose her balance and fall at frequent intervals; and that her physician advised her that to travel in that condition would be definitely dangerous. She further stated that she consulted two attorneys in Denver as to her right to a continuance and her prospect of getting one in view of her physical condition, and that she was advised by them that she was entitled to a continuance, and that there was no doubt that one would be granted. She stated that she relied upon such advice. Appellant filed an affidavit of a friend in Denver stating that on October 14, appellant informed him by telephone of her illness and the forthcoming trial, and that pursuant to her request that he obtain a physician for her, he brought Dr. T. A. Triplett to appellant's home and waited outside in his car while the doctor interviewed appellant. An affidavit was filed by Dr. Triplett, stating that he had told appellant on October 14 that it would be ill-advised, and possibly dangerous, for her to take a trip. In his affidavit he described plaintiff's ailments as they had been described in his letter, with the exception of the alleged vertigo, of which he made no mention.
We must assume that the inferences drawn from the affidavits upon which the motion was based were those which tend most strongly to support the order. It would have been a reasonable inference that appellant was not physically unable to attend the trial. When she wrote to her attorneys she did not state that she was confined to her bed, or that she was under the care of a physician. Although the physician stated in the letter that he wrote that he was attending appellant, it was shown by an affidavit filed later that he was attending her at the time only for the purpose of aiding her to make a showing for a continuance. It would have been reasonable to infer also, from the fact that appellant consulted attorneys in Denver, that she was intending to go to Los Angeles if the attorneys advised her to do so. There would have been no purpose in consulting the attorneys if she had already made up her mind not to take the trip. We therefore assume that the trial court believed that appellant, although able to attend the trial was willing to run the risk that the court might deny her motion for a continuance. Upon this state of facts denial of the motion to vacate the judgment was not an abuse of discretion. We think it was an order that was properly made under the circumstances. [3] A litigant who fails to attend court on the day of his trial for the simple reason that he *510 believes his attorney will succeed in securing a continuance cannot claim either mistake or surprise, within the meaning of section 473, Code of Civil Procedure, if a continuance is refused. It would be absurd to countenance or encourage practices of that sort. Litigants must be prepared to meet adverse rulings at any and all stages of the proceedings. If this were not true, orderly procedure would be disrupted by resort to section 473 for the correction of all manner of mistakes. In holding that an unexpected ruling of the court in the decision of a case does not result in surprise within the meaning of section 473, the court said, in Porter v. Anderson, 14 Cal. App. 716, 726 [113 P. 345], "in our opinion it would be the very limit of unreasonableness to hold that where a party, under the advice of his attorney, has acted upon an erroneous conception of the law, and suffers the injury which would be the natural and inevitable result thereof, he may be relieved of his untoward situation on the ground that he was taken by 'surprise' by reason of the fatal error into which he had thus been led." (See Marr v. City of Glendale, 39 Cal. App. 596 [179 P. 712]; Hughes v. Wright, 64 Cal. App. 2d 897 [149 P.2d 392]; O'Connor v. Ellmaker, 83 Cal. 452 [23 P. 531].)
The order is affirmed.
Wood, J., and Vallee, J. pro tem., concurred.
|
United States Bankruptcy Appellate Panel
FOR THE EIGHTH CIRCUIT
_______________
No. 10-6087
________________
In re: *
*
Robert A. Brown, *
*
Debtor. *
*
Robert A. Brown, *
* Appeal from the United States
Debtor – Appellant, * Bankruptcy Court for the District of
* North Dakota
v. *
*
Bank of North Dakota, *
*
Creditor – Appellee, *
*
Wayne Drewes, *
*
Trustee – Appellee. *
_____
Submitted: March 15, 2011
Filed: April 5, 2011
_____
Before FEDERMAN, VENTERS, AND NAIL, Bankruptcy Judges.
_____
VENTERS, Bankruptcy Judge.
The Debtor, Robert A. Brown, appeals three bankruptcy court1 orders: (1) the
order denying confirmation of the Debtor’s Second Amended Chapter 13 Plan, (2) the
order granting creditor Bank of North Dakota’s motion for relief from the automatic
stay, and (3) the order granting the Chapter 13 trustee’s motion to dismiss the
Debtor’s bankruptcy case based on his failure to make his Chapter 13 Plan payments.
We affirm all of these orders.
STANDARD OF REVIEW
Findings of fact are reviewed for clear error, and legal conclusions are reviewed
de novo.2
BACKGROUND
The following facts have been gleaned from the pleadings filed in the Debtor’s
bankruptcy case. No further record is available due to the Debtor's failure to provide
us with a transcript of the confirmation hearing and the fact that the orders granting
Bank of North Dakota relief from the stay and dismissing the case were unopposed
by the Debtor and, consequently, were entered without a hearing.
The Debtor filed a Chapter 13 bankruptcy petition on June 18, 2010. He filed
three Chapter 13 plans: one on July 21, 2010, an amended plan on August 16, 2010,
and a second amended plan on September 20, 2010. Bank of North Dakota, a creditor
holding an allegedly fully secured claim in excess of $35,752.00, objected to the
Debtor’s plan, arguing, inter alia, that the amended plan failed to adequately provide
for the payment of the bank’s claim and that the plan was not feasible.
1
The Honorable William A. Hill, Chief Bankruptcy Judge for the District of
North Dakota.
2
See In re Waterman, 248 B.R. 567, 570 (B.A.P. 8th Cir. 2000).
2
The bankruptcy court held a hearing on Bank of North Dakota’s objection on
September 28, 2010. The Debtor appeared at the hearing and (presumably) had an
opportunity to argue and present evidence in support of his Chapter 13 plan. The
bankruptcy court orally denied confirmation of the Debtor’s plan. That same day, the
bankruptcy court entered an order memorializing its ruling. The written order does
not provide the basis for the court’s ruling, and, as noted, no transcript of this hearing
has been provided.
Shortly thereafter, Bank of North Dakota filed a motion for relief from the
automatic stay and the Chapter 13 trustee, Wayne Drewes (“Trustee”), filed a motion
to dismiss the Debtor’s case “for failure to make plan payments.”3 The record
indicates that the Debtor was served with the motions and notices that no hearing
would be held unless an objection was filed. The notice of motion attached to the
Bank of North Dakota’s motion for relief specifically stated that an order granting the
motion would be entered without further notice in the absence of an objection. The
Debtor did not respond to either motion. Consequently, the Court granted both
motions without a hearing.
The Debtor timely appealed these orders.
3
The motion to dismiss was docketed with the description that it was for a
failure to make plan payments, but the brief text of the motion stated only that
“[t]he debtor has indicated that he will not be filing an amended plan nor seeking
confirmation.” Trustee’s Motion to Dismiss, p.1 (Bankruptcy Court Doc. No. 30).
3
DISCUSSION
Without delving into the substance of the Debtor’s appeal,4 we affirm the
bankruptcy court’s orders based on well-established principles of appellate
jurisprudence. The bankruptcy court’s order denying confirmation of the Debtor’s
Second Amended Chapter 13 Plan cannot be reviewed because the Debtor failed to
provide an adequate record of that decision.5 And we will not consider any
challenge to the orders granting Bank of North Dakota’s motion for relief and the
Trustee’s motion to dismiss the case because the Debtor failed to object to those
motions in the bankruptcy court. A party that fails to object to a motion cannot
seek review of an adverse decision on that motion on appeal.6
Therefore, for the reasons stated above, the bankruptcy court’s orders
denying confirmation of the Debtor’s Second Amended Chapter 13 Plan, granting
4
Even under a generous reading of the Debtor’s pro se briefs, we are hard
pressed to find any arguments pertaining to an alleged error committed by the
bankruptcy court, other than a groundless contention that the bank, a secured
creditor, lacked standing to object to the Debtor’s plan. The Debtor’s arguments
are directed more at various alleged misdeeds committed by the bank.
5
See In re Webb, 212 B.R. 320, 321 n.1 (B.A.P. 8th Cir. 1997) (“The Panel
does not have before it a transcript of the proceedings below. Inasmuch as it is the
appellant's burden to demonstrate the merits of her appeal, she must bear the
burden of the deficient record.”) (citations omitted). See also Schmid v. United
Brotherhood of Carpenters and Joiners of America, et. al., 827 F.2d 384 (8th Cir.
1987) (“It is important, if not essential, to the reviewing court that an appellant
under Rule 10, Fed. R. App. P., bring before this court all parts of the proceedings
below necessary for a determination of the validity of any claimed error.” (quoting
Ries v. Lynskey, 452 F.2d 172, 178 (7th Cir.1971)).
6
See United States v. Bentley, 82 F.3d 222, 223 (8th Cir. 1996) (arguments
not raised at trial are deemed waived on appeal); Keene Corp. v. Int'l Fid. Ins., Co.,
736 F.2d 388, 393 (7th Cir. 1984) (“It is axiomatic that arguments not
raised below are waived on appeal.”).
4
Creditor Bank of North Dakota’s motion for relief from the automatic stay, and
granting the Chapter 13 Trustee’s motion to dismiss are hereby affirmed.
5
|
Exhibit 10.3
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT (the “Agreement”) is made as of the 23rd day of August, 2013 (the
“Effective Date”), between Venetian Acres, LLC, a Florida limited liability
company (the “Seller”), and Gladstone Land Corporation, a Maryland corporation,
or its designee (the “Purchaser”).
WHEREAS, Seller has agreed to sell and Purchaser has agreed to purchase the
Property (as hereinafter defined);
NOW, THEREFORE, in consideration of the agreements contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following terms
shall have the following definitions:
“Broker” shall mean: Brian C. Webster License # Bk645178
“Closing Date” shall mean October 10th, 2013, which is 15 days after expiration
of the Inspection Period. If Purchaser extends the Inspection Period by 15 days
as set forth below, the Closing Date shall be extended by a corresponding number
of days.
“Contracts” shall mean, collectively, any and all service, maintenance,
management or other contracts or agreements with third parties relating to or
affecting the Property.
“Due Diligence Materials” shall mean those materials and information more
particularly described on Exhibit C attached hereto and incorporated by
reference herein.
“Earnest Money” shall mean the sum of Fifty Thousand Dollars ($50,000), together
with all interest accrued thereon.
“Escrow Agent” shall mean: Hill, Ward, & Henderson, P.A.
“Inspection Period” shall mean the period beginning on the Effective Date and
ending at 5:00 p.m. local time at the Property on September 25th, 2013, which is
30 days after the Effective Date. Purchaser may extend the Inspection Period by
fifteen (15) additional days, to October 10th, 2013, by written notice to Seller
prior to expiration of the initial Inspection Period if it requires additional
time to obtain or review its third party reports.
“Improvements” shall mean all buildings, structures, gates, fences, roads,
levees, ditches, appurtenances or other facilities currently existing on the
Property.
“Land” shall mean that certain real property situated at SW Markel Street & SW
60th Ave. or Green Farm Lane, Palm City, in Martin County, State of Florida,
comprising approximately 661 gross acres, which includes approximately 510
farmable acres of cropland, as more particularly described on Exhibit A attached
hereto and incorporated herein by reference, together with all rights,
easements, hereditaments and appurtenances thereunto belonging.
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“Personal Property” shall mean personal property used by Seller that will be
conveyed to Purchaser as part of this transaction, if any, as more particularly
described on Exhibit B attached hereto and incorporated by reference herein.
“Property” shall mean the Land, Improvements, and any Personal Property.
“Purchase Price” for the Property shall mean the total amount of Four Million
Three Hundred Thousand Dollars ($4,300,000), subject to adjustment as set forth
in this Agreement.
“Purchaser’s Address” shall mean:
Gladstone Land Corporation
Attention: Bill Frisbie
1521 Westbranch Drive, Suite 200
McLean, VA 22102
+1-907-959-4073 (T)
+1-907-959-4073 (F)
Email: stephaniehamilton@example.org
With copy to:
R. James Robbins, Jr., Esq.
Hill Ward Henderson
101 E. Kennedy Blvd., Suite 3700
Tampa, FL 33602
+1-907-959-4073 (T)
+1-907-959-4073 (F)
Email: stephaniehamilton@example.org
“Pursuit Costs” shall mean all of Purchaser’s reasonable third party, out of
pocket expenditures in connection with the transaction contemplated hereby,
including without limitation legal, engineering, loan, appraisal, survey and
title fees and expenses; provided, however, that for purposes of this Agreement,
the Pursuit Costs shall not exceed Thirty Thousand Dollars ($30,000.00) in the
aggregate.
“Recreational Rights” shall mean, collectively, any and all leases, licenses or
other rights to use any portion of the Property for recreational use such as
hunting, fishing, boating, or otherwise.
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“Seller’s Address” shall mean:
Jennifer Leonard
Capano Management Company
105 Foulk Road
Wilmington, DE 19803
Ph. +1-907-959-4073
Fx. +1-907-959-4073
With Copy To:
Gillespie & Allison, P.A.
Attention: Don Allison
33 SE 5th, Suite 100
Boca Raton, FL 33432
+1-907-959-4073 (T)
+1-907-959-4073 (F)
“Title Company” shall mean: Old Republic National Title Insurance Company
“Water Rights” shall mean all rights to use wells and other water sources that
exist on the Effective Date that benefit or are appurtenant to the Property and
that may be reasonably necessary to conduct farming operations at the Property
as currently conducted and in accordance with GAP.
2. Property. Seller hereby agrees to sell and Purchaser, or its designee, hereby
agrees to purchase from Seller the Property.
3. Earnest Money. Within three (3) business days after the later of (x) the
Effective Date or (y) the date of full execution of this Agreement by both
Seller and Purchaser, Purchaser shall deposit the Earnest Money with the Escrow
Agent by wire transfer or certified or cashier’s check. Said Earnest Money shall
be refundable to Purchaser in accordance with this Agreement.
4. Purchase Price. At the Closing, defined below, all Earnest Money shall be
applied to the Purchase Price, and the balance of the Purchase Price, subject to
adjustments for credits and debits as set forth in this Agreement, shall be paid
in good funds by wire transfer.
5. Inspection Period; Refund of Earnest Money; Due Diligence Materials.
(a) Purchaser shall have until the expiration of the Inspection Period to make
such determinations with respect to the Property as Purchaser deems appropriate
and to elect to either continue or terminate this Agreement, in Purchaser’s sole
and absolute discretion, for any reason or no reason. Purchaser may terminate
this Agreement, and receive a full refund of the Earnest Money, less $10.00 to
be retained by Seller as consideration for entering into this Agreement, by
delivering written termination notice to Seller at any time prior to expiration
of the Inspection Period. If Purchaser does not so terminate this Agreement, the
Earnest Money shall thereafter be refundable to Purchaser only as expressly
otherwise set forth in this Agreement, and this Agreement shall remain in
effect.
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(b) Within five (5) days after the Effective Date, Seller shall deliver to
Purchaser at Seller’s sole expense the Due Diligence Materials. For each day of
Seller’s delay in delivering all of the Due Diligence Materials beyond five
(5) days after the Effective Date, the Inspection Period and Closing Date shall
(at Purchaser’s option) be extended by one (1) day. Seller shall also promptly
provide any other documents or information in Seller’s possession or control
relating to the Property or any Contract that is reasonably requested by
Purchaser.
6. Costs and Prorations.
(a) Purchaser shall pay one-half of the documentary stamp tax (transfer tax) due
to Martin County at the time of recording the deed of conveyance for the
Property, the costs of any Survey obtained by Purchaser pursuant to Section 9
hereof, and the costs of any Phase I environmental report obtained by Purchaser.
Seller shall pay for preparation of the deed of transfer, one-half of the said
documentary stamp tax, recording costs applicable to the deed of transfer, the
premium for Purchaser’s Title Policy, defined below, and any costs of production
of the title search or abstract for the Property. Purchaser shall pay all
expenses incident to any financing obtained for the purchase of the Property.
All other closing costs shall be borne in accordance with the custom in Martin
County, Florida.
(b) The following shall be prorated between the parties as of the Closing Date:
(i) ad valorem property taxes constituting a lien against the Property for the
year in which the Closing occurs and all other unpaid assessments with respect
thereto, and (ii) utilities, and operating expenses for the Property for the
calendar month (or other applicable period if such charges are not paid monthly)
in which Closing occurs, subject to subsection 6(c) below. In the event such
proration is based upon a previous year’s taxes or assessment, after Closing, at
such time as any of the taxes or assessments are capable of exact determination,
the party having the information permitting the exact determination shall send
to the other party a detailed report of the exact determination so made. Within
thirty (30) days after both Seller and Purchaser shall have received such
report, Seller and Purchaser shall adjust the amounts apportioned pursuant to
the estimates made at Closing to reflect the exact determinations contained in
the report, and Seller or Purchaser, as the case may be, shall pay to the other
whatever amount shall be necessary to compensate for the difference.
7. Conditions Precedent To Purchaser’s Obligations. Seller acknowledges that as
a condition precedent to Purchaser’s obligations hereunder, the following shall
occur on or before the Closing Date (or any earlier date indicated below), any
of which conditions may be waived by Purchaser in its sole discretion:
(a) Purchaser shall have received a current Phase I environmental assessment
satisfactory to Purchaser prepared by a competent licensed environmental
engineer satisfactory to Purchaser that does not recommend a Phase II
environmental assessment and reflecting that there are no hazardous wastes,
hazardous materials or fuel (or other storage) tanks located above, on or below
the surface of the Property, and that the Property is in compliance with all
applicable environmental laws, ordinances, rules and regulations.
4
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(b) The Title Company shall be irrevocably committed to issue upon Closing a
2006 ALTA Owner’s Policy of Title Insurance (the “Title Policy”), as evidenced
by a “marked up” Title Commitment, defined below, insuring Purchaser as owner of
fee simple title to the Property, subject only to Permitted Exceptions (defined
below), in the amount of the Purchase Price, and containing such endorsements as
Purchaser shall have requested.
(c) Subject to Sections 14 and 15 below, there shall have been no material
adverse change in the condition of any of the Property (including without
limitation any Improvements) after expiration of the Inspection Period and prior
to the Closing Date.
(d) Each and every representation and warranty of Seller set forth in Section 11
shall be true and correct in all material respects, and Seller shall not be in
default under any of its other obligations under this Agreement, as of Closing.
8. Closing; Deed.
(a) Subject to all preconditions set forth herein, the closing or settlement
(“Closing”) of the transaction contemplated hereby, unless terminated in
accordance with this Agreement or as otherwise agreed upon by Purchaser and
Seller, shall be held via the mails, through the law firm of Gillespie &
Allison, P.A. at 10:00 a.m. on the Closing Date or such other place and time as
the parties may agree in writing.
(b) At Closing, Seller shall convey to Purchaser good, marketable and insurable
title to the Property by special warranty deed acceptable to Purchaser and the
Title Company (the “Deed”), subject to (i) standard exceptions for real property
taxes not yet due and payable, and (ii) any other matters which are waived by,
or acceptable to, Purchaser pursuant to Section 10 below (the “Permitted
Exceptions”). The Land description in the Deed shall be the property description
from Seller’s vesting deed(s); provided, that if Purchaser obtains a Survey of
the Property, Seller also agrees to execute and deliver a recordable Quit Claim
Deed to Purchaser at Closing using the Survey description.
9. Survey. During the Inspection Period, Purchaser, at Purchaser’s expense, may
cause an ALTA survey of the Property to be prepared by a surveyor selected by
Purchaser (“Survey”).
10. Title. During the Inspection Period, Seller shall procure a title insurance
commitment in the amount of the Purchase Price covering the Property issued by
the Title Company (the “Title Commitment”) and furnish a copy thereof to
Purchaser. Purchaser shall have until the expiration of the Inspection Period to
object to any matters shown on the Title Commitment or Survey by written notice
to Seller (“Title Objection Notice”). Purchaser may also object to any new
matters thereafter revealed by a title update by subsequent Title Objection
Notice to Seller. Within five (5) business days after receipt of Purchaser’s
Title Objection Notice, Seller shall either (i) deliver written notice to
Purchaser of any title or Survey objections which Seller elects not to cure, or
(ii) cure or satisfy such objections (or commence to cure or satisfy such
objections as long as Seller reasonably believes such objections may be cured or
satisfied at least two (2) business days prior to Closing). Within five
(5) business days after receipt of Seller’s written notification that Seller
elects not to cure a title or Survey objection,
5
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Purchaser may terminate this Agreement and receive a full refund of the Earnest
Money by delivering written notice thereof to Seller. If Purchaser does not so
terminate this Agreement, then any such title or Survey objection which Seller
elects not to cure shall be deemed waived by Purchaser and shall be an
additional Permitted Exception. If any objection which Seller elects to cure is
not satisfied by Seller at least two (2) business days before the scheduled date
of Closing, Purchaser shall have the right to terminate this Agreement, in which
case the Earnest Money shall be returned to Purchaser and neither party shall
have any further rights, obligations or duties under this Agreement. If Seller
does cure or satisfy the objections at least two (2) business days prior to
Closing, then this Agreement shall continue in effect. Any exception to or
defect in title which Purchaser shall elect to waive, or which is otherwise
acceptable to Purchaser, shall be deemed an additional Permitted Exception to
stephaniehamilton@example.org. Seller covenants and agrees not to alter or encumber in any
way Seller’s title to the Property after the date hereof. Notwithstanding
anything in this Agreement to the contrary, Seller shall cause any deed of
trust, mortgage, deed to secure debt, judgment or other lien for a liquidated
sum encumbering the Property to be released at or before Closing.
11. Seller’s Representations and Warranties. As of the date hereof and as of the
Closing Date (as evidenced by Seller’s downdate certificate to be provided at
Closing), Seller represents, warrants and covenants to Purchaser that:
(a) There are and there will be no parties in possession of any portion of the
Property as lessees, and no other party has been granted an oral or written
license, lease, option, purchase agreement or other right pertaining to the use,
purchase or possession of any portion of the Property. A true, complete and
correct copy of any Contract affecting the Property and any amendments thereto
have been or will be furnished to Purchaser within five (5) days after the
Effective Date as part of the Due Diligence Materials. Such Contracts, if any
are valid and binding in accordance with their respective terms and conditions,
are in full force and effect, and have no uncured breach or default by any
party. No off-sets or defenses are available to any party under any Contract.
All Contracts are cancellable upon not more than thirty (30) days prior written
notice. There are no leasing brokerage agreements, leasing commission agreements
or other agreements providing for the payment of any amounts, and no commissions
due, for leasing activities with respect to the Property. Purchaser shall have
no liability for (and Seller hereby indemnifies and holds harmless Purchaser
from and against any claim for) any such leasing commissions.
(b) The Seller has not received notice of any default (nor is there any default)
under any note or deed of trust related to or secured by the Property. The
execution and delivery of this Agreement, the consummation of the transaction
herein contemplated and the compliance with the terms and provisions hereof will
not conflict with or (with or without notice or the passage of time or both)
result in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, loan agreement or instrument to which the Seller
is a party or by which the Seller or the Property is bound, any applicable
regulation or any judgment, order or decree of any court having jurisdiction
over the Seller or the Property.
(c) The Seller has not received any notice, nor is the Seller aware, of any
violation of any ordinance, regulation, law, statute, rule or restriction
relating to the Property.
6
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(d) There are no attachments, executions, assignments for the benefit of
creditors, or voluntary or involuntary proceedings in bankruptcy or under any
applicable debtor relief laws or any other litigation contemplated by or pending
or threatened against the Seller or the Property.
(e) Seller has been duly organized and is validly existing under the laws of the
State of Florida. Seller has the full right and authority to enter into this
Agreement and to transfer all of the Property to be conveyed by Seller pursuant
hereto and to consummate or cause to be consummated the transactions
contemplated herein to be made by Seller. The person signing this Agreement on
behalf of Seller is authorized to do so. This Agreement constitutes, and all
agreements and documents contemplated hereby (when executed and delivered
pursuant hereto) will constitute, the valid and legally binding obligations of
Seller, enforceable in accordance with their respective terms. No other
signatures or approvals are required to make this Agreement fully enforceable by
the Purchaser with respect to the Seller or the Property. This Agreement
constitutes, and all agreements and documents contemplated hereby (when executed
and delivered pursuant hereto) will constitute, the valid and legally binding
obligations of Seller, enforceable in accordance with their respective terms.
(f) The Seller has and will convey to the Purchaser good, marketable and
indefeasible title in fee simple to the Property, subject only to the Permitted
Exceptions.
(g) There is no pending or threatened condemnation or similar proceeding or
assessment affecting the Property or any part thereof, nor to the knowledge of
the Seller is any such proceeding or assessment contemplated by any governmental
authority. There will be no claim against the Property or Purchaser for or on
account of work done, materials furnished, and utilities supplied to the
Property prior to the Closing Date. To Seller’s knowledge, there are no public
plans or proposals for changes in road grade, access, or other municipal
improvements which would adversely affect the Property or result in any
assessment; and no ordinance authorizing improvements, the cost of which might
be assessed against Purchaser or the Property, is pending.
(h) Seller has not entered into any agreement to dispose of its interest in the
Property or any part thereof, except for this Agreement.
(i) Seller is not a party to any litigation which is still pending, and knows of
no threatened litigation, affecting or relating to the Property.
(j) Neither the Seller, nor to Seller’s knowledge, any other party has ever
caused or permitted any “hazardous material” (as hereinafter defined) to be
placed, held, located, or disposed of on, under, or at the Property or any part
thereof in forms or concentrations which violate applicable laws and
regulations, and, to Seller’s knowledge, neither the Property nor any part
thereof has ever been used as a dump or storage site (whether permanent or
temporary) for any hazardous material. As used herein, “hazardous material”
means and includes any hazardous, toxic, or dangerous waste, substance, or
material defined as such in, or for purposes of, the Comprehensive Environmental
Response, Compensation Liability Act (42 U.S.C. Section 9601, et seq., as
amended) or any other “super fund” or “super lien” law or any other Federal,
State, or local statute, or law, ordinance, code, rule, regulation, order or
decree regulating,
7
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relating to, or imposing liability for standards of conduct concerning any
substance or material, as presently in effect. The Property does not currently
contain any underground or aboveground storage tanks and any storage tanks
previously located on the Property (whether above ground or below ground) have
been removed in accordance with the requirements of all applicable laws with
“clean closure” or “no further action” letter(s), or comparable letters, issued
by the State of Florida in connection therewith.
Seller hereby indemnifies and holds harmless Purchaser from and against any and
all loss, expense (including without limitation reasonable attorney fees),
liability, cost, claim, demand, action, cause of action and suit arising out of
or in any way related to any breach of any representation, warranty, covenant or
agreement of Seller in this Agreement.
12. Broker and Broker’s Commission.
(a) If Closing occurs hereunder but not otherwise, Seller shall pay a commission
fee to Broker equal to one and one-quarter percent (1.25%) of the Purchase
Price.
(b) Purchaser and Seller each represent and warrant to the other that, with the
exception of the Broker set forth in Section 12(a) above engaged by Seller, such
party has not incurred an obligation to any other broker or agent in connection
with the transaction contemplated hereby. Each party hereby covenants and agrees
to defend, indemnify and hold harmless the other party against and from any and
all loss, expense, liability, cost, claim, demand, damage, action, cause of
action and suit arising out of or in any manner relating to the alleged
employment or use by such party of any real estate broker or agent in connection
with this transaction. The provisions of this Section 12(b) shall survive the
Closing of this transaction.
13. Survey and Inspection. Purchaser and Purchaser’s agents, employees and
independent contractors shall have the right and privilege to enter upon the
Property during the Inspection Period to survey and inspect the Property and to
conduct soil borings, environmental assessment and toxic waste studies and other
geological, engineering, water or landscaping tests or studies or building
inspections, all at Purchaser’s sole cost and expense. Purchaser hereby
covenants and agrees to indemnify and hold harmless Seller from any and all
loss, liability, cost, claim, demand, damage, action, cause of action and suit
arising out of or in any manner related to the exercise by Purchaser of
Purchaser’s rights under this section (but not the existence of any condition
discovered in the course of Purchaser’s inspections and testing).
14. Eminent Domain. If, after the Effective Date and prior to Closing, Seller
shall receive notice of the commencement or threatened commencement of eminent
domain or other like proceedings against the Property or any portion thereof,
Seller shall immediately notify Purchaser in writing, and Purchaser shall elect
within thirty (30) days from and after such notice, by written notice to Seller,
one of the following: (a) not to close the transaction contemplated hereby, in
which event all Earnest Money shall be refunded to Purchaser and this Agreement
shall be void and of no further force and effect; or (b) to close the purchase
of the Property contemplated hereby in accordance with its terms but subject to
such proceedings, in which event the Purchase Price shall remain the same and
Seller shall transfer and assign to Purchaser at Closing all condemnation
proceeds and rights to additional condemnation proceeds, if any. If
8
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Purchaser elects to purchase after receipt of such a notice, all actions taken
by Seller with regard to such eminent domain proceedings, including but not
limited to, negotiations, litigation, settlement, appraisals and appeals, shall
be subject to the approval of Purchaser, which approval shall not be
unreasonably withheld. If Purchaser does not make such election within the
aforesaid time period, Purchaser shall be deemed to have elected to close the
transactions contemplated hereby in accordance with clause (b) above.
15. Property Damage. If, after the Effective Date and prior to Closing, the
Property shall suffer significant damage as the result of fire or other
casualty, Seller shall immediately notify Purchaser in writing. In the event
said damage results in damage of the improvements situated on the Property in
the amount of Ten Thousand and No/100 Dollars ($10,000.00) or greater, Purchaser
shall have the right to elect within fifteen (15) days from and after such
notice, by written notice, one of the following: (a) not to close the
transaction contemplated hereby, in which event all Earnest Money shall be
refunded to Purchaser and this Agreement shall be void and of no further force
and effect; or (b) to close the purchase of the Property contemplated hereby in
accordance with its terms but subject to such damage, in which event the
Purchase Price shall remain the same and Seller shall transfer and assign to
Purchaser at Closing all insurance proceeds received or to be received as a
result of such damage, and Purchaser shall receive a credit against the Purchase
Price for any insurance deductible or uninsured loss. If Purchaser does not make
such election within the aforesaid time period, Purchaser shall be deemed to
have elected to close the transactions contemplated hereby in accordance with
clause (b) above. In the event less than Ten Thousand and No/100 Dollars
($10,000.00) of damage to the improvements situated on the Property exists, this
Agreement shall remain in full force and effect, but, at Closing, Seller shall
transfer and assign to Purchaser all insurance proceeds received or to be
received as a result of such damage, and Purchaser shall receive a credit
against the Purchase Price for any insurance deductible or uninsured loss.
16. Condition of Property. Subsequent to the Effective Date and prior to
Closing, Seller shall maintain the Property in accordance with its past
practices and ordinary maintenance, but shall not be required to provide any
extraordinary maintenance.
17. Operations. After the Effective Date and prior to the Closing Date, Seller
shall neither enter into any new, nor terminate, modify, extend, amend or renew
any existing, lease or service, management, maintenance, repair, employment,
union, construction, leasing or other contract or agreement affecting the
Property (each, a “New Agreement”) without providing at least five (5) business
days prior notice (and opportunity to review and approve the New Agreement) to
Purchaser. Purchaser shall have five (5) business days after Purchaser’s actual
receipt (notwithstanding the notice provisions in Section 18 below) of a true,
correct and complete copy of a New Agreement to approve the same. If Purchaser
does not approve any such New Agreement that Seller will enter into prior to
expiration of the Inspection Period, then Purchaser’s sole and exclusive remedy
will be to terminate this Agreement by delivering written notice to Seller no
later than five (5) business days after receiving the New Agreement, and in such
event Purchaser shall receive a full refund of the Earnest Money. If Purchaser
fails to terminate this Agreement as set forth in the preceding sentence, it
shall be deemed to have approved the New Agreement that Seller will enter into
prior to expiration of the Inspection Period in the form provided. Seller may
not enter into New Agreement after expiration of the Inspection Period unless
Purchaser has approved the same in writing. Seller shall cause any Contracts
which Purchaser elects in its discretion not to assume to be cancelled at or
before Closing.
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18. Notice. Notices provided for in this Agreement must be (i) delivered
personally, (ii) sent by registered or certified mail, postage prepaid, return
receipt requested, (iii) sent via a reputable express courier, (iv) sent by
facsimile during normal business hours with a confirmation copy delivered by
another method permitted by this Section 18 other than electronic mail, or
(v) sent by electronic mail during normal business hours with a confirmation
copy delivered by another method permitted by this Section 18 other than
facsimile, addressed as set forth below. Notice sent by U.S. mail is deemed
delivered three days after deposit with the U.S. Postal Service. Notice sent by
a reputable express carrier is deemed received on the day receipted for by the
express carrier or its agent. Notice sent via facsimile is deemed delivered upon
the transmission to the phone number designated as the recipient’s facsimile
phone number below. Notice sent via electronic mail is deemed delivered upon the
entrance of such electronic mail into the information processing system
designated by the recipient’s electronic mail address set forth below. The
addresses of the parties to which notices are to be sent shall be Purchaser’s
Address or Seller’s Address, as applicable, as set forth in Section 1 above. Any
party shall have the right from time to time to change the address to which
notices to it shall be sent to another address, and to specify two additional
addresses to which copies of notices to it shall be mailed, by giving to the
other party at least ten (10) days prior notice of the changed address or
additional addresses.
19. Remedies. If this transaction fails to close by reason of Purchaser’s
wrongful failure to perform its obligations under this Agreement, the Earnest
Money shall be retained by Seller as liquidated damages the parties hereby
acknowledging that Seller’s actual damages in such circumstances would be
difficult, if not impossible, to determine. Seller expressly acknowledges and
agrees that retention of the Earnest Money as provided for herein shall be
Seller’s sole and exclusive remedy in the event of Purchaser’s failure to
perform its obligations hereunder. If this transaction fails to close for any
reason other than Purchaser’s wrongful failure to perform his obligations
hereunder, the Earnest Money shall promptly be refunded to Purchaser. In the
event Seller fails or refuses to convey the Property in accordance with the
terms hereof or otherwise fails to perform its obligations hereunder,
Purchaser’s sole and exclusive remedy for Seller’s breach shall be either to
(i) terminate this Agreement by written notice to Seller and Escrow Agent and
receive a full refund of the Earnest Money by the party in possession thereof
and reimbursement from Seller of Purchaser’s Pursuit Costs, all within ten
(10) days after Purchaser’s termination of this Agreement, or (ii) obtain
specific performance of this Agreement. Notwithstanding the foregoing, Purchaser
shall also be entitled to obtain its attorneys’ fees and costs in connection
with enforcing its rights and remedies under this Agreement.
20. Time of Essence. Time is of the essence of this Agreement.
21. Closing Documents. At or prior to Closing, each party shall deliver to the
other party appropriate evidence to establish the authority of such party to
enter into and close the transaction contemplated hereby. Seller also shall
execute and deliver to the Title Company at Closing, for it to hold in escrow
pending Purchaser’s payment of the Purchase Price: (i) the Deed; (ii) a
certificate with respect to Section 1445 of the Internal Revenue Code stating,
among
10
--------------------------------------------------------------------------------
other things, that Seller is not a foreign corporation as defined in the
Internal Revenue Code and I.R.S. Regulations; (iii) the General Assignment
substantially in the form attached hereto as Exhibit D; (iv) Seller’s
representation and warranty downdate certificate under Section 11; and (v) such
other documents reasonably necessary or appropriate to complete and evidence the
transaction contemplated hereby, as reasonably requested by the Purchaser or
Title Company, including without limitation a standard title company owner’s
affidavit.
22. Entire Agreement. This Agreement constitutes the entire agreement of the
parties and may not be amended except by written instrument executed by
Purchaser and Seller. All prior understandings and agreements between the
parties are deemed merged herein.
23. Headings. The section headings are inserted for convenience only and are in
no way intended to describe, interpret, define or limit the scope or content of
this Agreement or any provision hereof.
24. Possession. Seller shall deliver actual possession of the stephaniehamilton@example.org.
25. Applicable Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Florida.
26. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, successors and
permitted assigns as the case may be, and Purchaser shall have the right to
assign its rights hereunder and thereafter be released from any further
liability hereunder.
27. Surviving Clauses. The provisions of this Agreement relating to tax
prorations after Closing, Purchaser’s indemnification with respect to its
entering upon the Property prior to Closing, Seller’s representations,
covenants, warranties and indemnity agreement in Section 11, Seller’s covenant
not to encumber the Property subsequent to the date hereof, the mutual covenants
of Seller and Purchaser to indemnify each other, as the case may be, as set
forth in Section 12, and the Purchaser’s covenant to indemnify and hold the
Seller harmless as set forth in Section 13 shall not merge into the Deed but
instead shall survive any Closing pursuant to this Agreement. Except as set
forth in the preceding sentence or as otherwise expressly set forth herein, no
other provision of this Agreement shall survive the Closing of this transaction.
28. Tax Deferred Exchange. Purchaser may structure the sale of the Property as a
like kind exchange under Internal Revenue Code Section 1031, at Purchaser’s sole
cost and expense. Seller shall reasonably cooperate therein, provided that
Seller shall incur no material costs, expenses or liabilities in connection with
Purchaser’s exchange and Seller shall not be required to take title to or
contract for purchase of any other property. If Purchaser uses a qualified
intermediary to effectuate the exchange, any assignment of the rights or
obligations of Purchaser hereunder shall not relieve, release or absolve
Purchaser of its obligations to Seller hereunder. Purchaser shall reimburse
Seller for all reasonable out-of-pocket expenses, if any, incurred by Seller in
effectuating Purchaser’s exchange.
29. Non-Solicitation. From and after the Effective Date, Seller shall not market
the Property for sale, or solicit or accept any back-up offers with respect to
the sale of the Property. If Closing does not occur and the transaction is
terminated, this provision is voided.
11
--------------------------------------------------------------------------------
30. Offer and Acceptance. This Agreement, as executed by the party first
executing it, shall constitute an offer to the other party. The offeree shall
accept the same, if at all, by delivering a fully executed copy of this
Agreement to the offeror on or before 5:00 p.m., August 26th, 2013. The notice
provisions hereof hereinabove notwithstanding, acceptance of this offer shall be
effective only upon the actual receipt by the offeror of a faxed or emailed copy
of the fully executed Agreement by such date and time, followed by the offeror’s
receipt on the next business day of the fully executed original. The offer, if
not timely accepted as aforesaid, shall expire and be of no further force and
effect at the time and date set forth in this Section.
31. In the event that legal proceedings are initiated by either party to
construe or enforce this Agreement, the prevailing party in such proceedings
shall be entitled to an award of its costs and attorneys’ fees incurred at all
court levels.
IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year
first above written.
PURCHASER: GLADSTONE LAND CORPORATION, a Maryland corporation By:
Title:
SELLER: VENETIAN ACRES, LLC By:
Louis J. Capano, Jr. Title: Authorized representative
12
--------------------------------------------------------------------------------
EXHIBIT A
LAND
LEGAL DESCRIPTION
PARCEL 1: ALL THAT PART OF THE FOLLOWING DESCRIBED LANDS LYING WESTERLY OF THE
RIGHT-OF-WAY FOR 1-95 CONVEYED TO THE STATE OF FLORIDA BY DEED RECORDED IN
OFFICIAL RECORDS BOOK 621. PAGE 2298:
DESCRIPTION OF PORTION OF SECTION 30, TOWNSHIP 38 SOUTH, RANGE 40 EAST IN MARTIN
COUNTY, FLORIDA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF SAID SECTION 30, RUN NORTH 0’15’48” EAST
ALONG THE EAST BOUNDARY LINE OF SAID SECTION 30 A DISTANCE OF 1185.28 FEET TO A
POINT; THENCE NORTH 34’00’59” WEST A DISTANCE OF 4945.73 FEET TO AN INTERSECTION
WITH THE NORTH BOUNDARY LINE OF SAID SECTION 30; THENCE SOUTH 89’35’00” WEST
ALONG SAID NORTH BOUNDARY LINE OF SECTION 30 A DISTANCE OF 2550.55 FEET TO THE
NORTHWEST CORNER OF SAID SECTION 30: THENCE SOUTH 0’00’24” WEST ALONG THE WEST
BOUNDARY LINE OF SAID SECTION 30 A DISTANCE OF 536.49 FEET TO A POINT; THENCE
SOUTH 32’33’45” EAST A DISTANCE OF 794.83 FEET TO A POINT; THENCE SOUTH
30’42’50” EAST A DISTANCE OF 1787.03 FEET TO A POINT: THENCE SOUTH 32’37’53”
EAST A DISTANCE OF 1259.59 FEET TO A POINT: THENCE SOUTH 40’46’37” EAST A
DISTANCE OF 1482.40 FEET TO A POINT; THENCE SOUTH 30’46’06” EAST A DISTANCE OF
401.54 FEET TO AN INTERSECTION WITH THE SOUTH BOUNDARY LINE OF SAID SECTION 30;
THENCE NORTH 89’51’55” EAST ALONG SAID SOUTH BOUNDARY LINE OF SECTION 30 A
DISTANCE OF 2118.56 FEET TO THE SOUTHEAST CORNER OF SAID SECTION 30.
LESS THAT PORTION OF PARCEL 1 LYING NORTH OF THE FOLLOWING DESCRIBED LINE:
COMMENCE AT THE SOUTHWEST CORNER OF SAID SECTION 30; THENCE S89’56’16“E ALONG
THE SOUTH LINE OF SAID SECTION 30 FOR 3,187.60 FEET; THENCE N30’54’11“W FOR
389.50 FEET; THENCE N40’46’37“W FOR 965.02 FEET TO THE POINT ON BEGINNING OF THE
FOLLOWING DESCRIBED LINE; THENCE N49’05’14“E FOR 493.08 FEET; THENCE N73’33’30:
E FOR 949.43 FEET; THENCE N52’33’22“E FOR 1124.59 FEET TO THE END OF SAID LINE.
PARCEL 2: DESCRIPTION OF A PORTION OF SECTION 29. TOWNSHIP 38 SOUTH, RANGE 40
EAST IN MARTIN COUNTY, FLORIDA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID SECTION 29 RUN NORTH 0’15’48” EAST
ALONG THE WEST BOUNDARY LINE OF SAID SECTION 29. A DISTANCE OF 1185.28 FEET TO A
POINT; THENCE SOUTH 34’00’59” EAST A DISTANCE OF 1432.75 FEET TO AN INTERSECTION
WITH THE SOUTH BOUNDARY LINE OF SAID SECTION 29; THENCE NORTH 89’50’13” WEST
ALONG SAID SOUTH BOUNDARY LINE OF SECTION 29 A DISTANCE OF 806.97 FEET TO THE
SAID SOUTHWEST CORNER OF SECTION 29.
PARCEL 3: DESCRIPTION OF PORTION OF SECTION 32, TOWNSHIP 38 SOUTH, RANGE 40 EAST
IN MARTIN COUNTY, FLORIDA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHWEST CORNER OF SAID SECTION 32, RUN SOUTH 89’50’13” EAST
ALONG THE NORTH BOUNDARY LINE OF SAID SECTION 32 A DISTANCE OF 806.97 FEET TO A
POINT; THENCE SOUTH 33’57’04” EAST A DISTANCE OF 5836.99 FEET TO A POINT; THENCE
SOUTH 14’36’53” EAST A DISTANCE OF 497.68 FEET TO AN INTERSECTION WITH THE SOUTH
BOUNDARY LINE OF SAID SECTION 32; THENCE NORTH 89’45’10” WEST ALONG SAID SOUTH
BOUNDARY LINE OF SAID SECTION 32 A DISTANCE OF 3151.03 FEET TO A POINT; THENCE
NORTH 30’46’06” WEST A DISTANCE OF 2069.94 FEET TO AN INTERSECTION WITH THE WEST
BOUNDARY LINE OF SAID SECTION 32; THENCE NORTH 0’17’01” EAST ALONG SAID WEST
BOUNDARY LINE OF SECTION 32 A DISTANCE OF 3533.96 FEET TO SAID NORTHWEST CORNER
OF SECTION 32.
PARCEL 4: DESCRIPTION OF PORTION OF SECTION 31, TOWNSHIP 38 SOUTH, RANGE 40 EAST
IN MARTIN COUNTY, FLORIDA. MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHEAST CORNER OF SAID SECTION 31, RUN SOUTH 89’51’55” WEST
ALONG THE NORTH BOUNDARY LINE OF SAID SECTION 31 A DISTANCE OF 2118.56 FEET TO A
POINT; THENCE SOUTH 30’46’06” EAST A DISTANCE OF 4107.02 FEET TO AN INTERSECTION
WITH THE EAST BOUNDARY LINE OF SAID SECTION 31; THENCE NORTH 0’17’01” EAST ALONG
THE SAID EAST BOUNDARY LINE OF SECTION 31 A DISTANCE OF 3533.96 FEET TO SAID
NORTHEAST CORNER OF SECTION 31.
PARCEL 5: DESCRIPTION OF PORTION OF SECTION 5, TOWNSHIP 39 SOUTH, RANGE 40 EAST
IN MARTIN COUNTY, FLORIDA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 5, RUN SOUTH 89’45’10” EAST
ALONG THE NORTH BOUNDARY LINE OF SAID SECTION 5 A DISTANCE OF 1067.77 FEET TO
THE POINT OF BEGINNING OF THIS DESCRIPTION. THENCE CONTINUING ALONG SAID NORTH
BOUNDARY LINE OF SECTION 5 SOUTH 89’45’10” EAST A DISTANCE OF 3151.03 FEET TO A
POINT; THENCE SOUTH 14’27’15” EAST A DISTANCE OF 2605.90 FEET TO A POINT; THENCE
NORTH 89’48’10” WEST A DISTANCE OF 2805.71 FEET TO A POINT; THENCE NORTH
10’22’11” WEST A DISTANCE OF 1265.19 FEET TO A POINT; THENCE NORTH 30’54’54”
WEST A DISTANCE OF 1494.88 FEET TO THE SAID POINT OF BEGINNING OF THIS
DESCRIPTION.
SAID PARCEL ALSO BEING DESCRIBED AS:
A PARCEL OF LAND LYING IN SECTION 5. TOWNSHIP 39 SOUTH. RANGE 40 EAST AND
SECTIONS 29. 30. 31 AND 32. TOWNSHIP 38 SOUTH. RANGE 40 EAST BEING A PORTION OF
PARCEL 1 AND ALL OF PARCELS 2.3.4 AND 5 AS DESCRIBED IN OFFICIAL RECORDS BOOK
1198. PAGE 1143 AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS
FOLLOWS:
COMMENCING AT THE SOUTHWEST CORNER OF SECTION 30 TOWNSHIP 38 SOUTH. RANGE 40
EAST THENCE S89’56’16“E, ALONG THE SOUTH LINE OF SAID SECTION 30 A DISTANCE OF
3187.50 FEET TO THE POINT OF BEGINNING; THENCE N30’54’11“W, A DISTANCE OF 389.05
FEET; THENCE N40’54’42“W, A DISTANCE OF 965.02 FEET; THENCE N49’05’14“E, A
DISTANCE OF 493.08 FEET; THENCE N73’33’30“E, A DISTANCE OF 949.43 FEET; THENCE
N52’33’22“E. A DISTANCE OF 1,124.69 FEET; THENCE S34’08’59“E. A DISTANCE OF
1.396.44 FEET TO AN INTERSECTION WITH THE EAST LINE OF SAID SECTION 30; THENCE
CONTINUE S34’08’59“E. A DISTANCE OF 1.432.59 FEET; THENCE S34’05’36“E, A
DISTANCE OF 5,836.99 FEET; THENCE S14’45’25“E, A DISTANCE OF 497.54 FEET TO AN
INTERSECTION WITH THE SOUTH LINE OF SAID SECTION 32; THENCE S14’37’19“E. A
DISTANCE OF 2.605.90 FEET; THENCE N89’58’14“W. A DISTANCE OF 2.805.71 FEET;
THENCE N10’31’15“W. A DISTANCE OF 1.265.19 FEET;
THENCE N31’04’35“W, A DISTANCE OF 1,495.16 FEET TO AN INTERSECTION WITH THE
SOUTH LINE OF SAID SECTION 32; THENCE N30’56’10“W, A DISTANCE OF 2,068.76 FEET
TO AN INTERSECTION WITH THE WEST LINE OF SAID SECTION 32; THENCE N30’53’20“W. A
DISTANCE OF 4.123.51 FEET TO THE POINT OF BEGINNING.
CONTAINING 28,822,474 SQUARE FEET OR 661.673 ACRES. MORE OR LESS.
SAID PARCEL BEING SUBJECT TO ANY/ALL EASEMENTS. RESERVATIONS, DEDICATIONS OR
RESTRICTIONS.
--------------------------------------------------------------------------------
EXHIBIT B
PERSONAL PROPERTY
None
14
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EXHIBIT C
DUE DILIGENCE MATERIALS
(a) Plans, drawings, specifications and engineering and architectural studies
and work (including “as built” plans and drawings, if any) with regard to the
Property that are in Seller’s possession;
(b) Any surveys of the Property obtained during the period during which Seller
has owned the Property or otherwise in Seller’s possession;
(c) Intentionally omitted;
(d) Real estate tax bills and statements for the current year and the previous
two (2) years with respect to the Property;
(e) Utility bills for the Property for the two (2) most recent complete calendar
years and the current year-to-date;
(f) Copies of insurance certificates with respect to the Property;
(g) Copies of all of the Contracts, if any, affecting the Property and any
amendments or proposed amendments thereto;
(h) Copies of any soil boring or other similar engineering reports with respect
to the Property obtained during the period during which Seller has owned the
Property;
(i) Any environmental assessment report or study with respect to the Property in
Seller’s possession;
(j) Any information in Seller’s possession or control from any governmental
agency or authority regarding the Property or adjacent properties;
(k) Copies of all notices and correspondence received from any governmental
agency or authority regarding the Property or adjacent properties; and
(l) Copies of all certificates, applications, permits or other documents related
to or evidencing Water Rights associated with the Property or any portion
thereof.
15
--------------------------------------------------------------------------------
EXHIBIT D
GENERAL ASSIGNMENT
Venetian Acres, LLC, a Florida limited liability company (the “Seller”), and
Gladstone Land Corporation, a Maryland corporation, or its designee (the
“Purchaser”).
THIS GENERAL ASSIGNMENT (this “Assignment”) is entered into as of the
of , 20 , between Venetian Acres, LLC (“Assignor”), a Florida
limited liability company, and Gladstone Land Corporation (“Assignee”), a
Maryland corporation.
1. Purchase Agreement; Defined Terms. This Assignment is being executed and
delivered pursuant to that certain Agreement of Purchase and Sale between
Gladstone Land Corporation, as Purchaser, and Venetian Acres, LLC, as Seller,
dated as of August 26th, 2013 (the “Purchase Agreement”). Any capitalized term
used but not otherwise defined herein shall have the meaning set forth in the
Purchase Agreement.
2. Assignment and Conveyance. For good and valuable consideration received by
Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor
hereby bargains, sells, conveys, grants, transfers and assigns to Assignee the
entire right, title and interest, if any, of Assignor in and to the following in
accordance with the terms and conditions of the Purchase Agreement:
i. All contracts not previously terminated at Assignee’s request,
ii. All Personal Property (as defined in the Purchase Agreement
iii. All warranties, guarantees, bonds, licenses, building permits,
certificates of occupancy, zoning certificates, and other governmental permits
and licenses to and in connection with the construction, development, ownership,
use, operation or maintenance of the Property or any part thereof, to the extent
the same are assignable; and
iv. All Water Rights.
5. Assumption. Assignee hereby assumes the obligations of Assignor under the
Contracts, in each and every case only to the extent first arising from and
after the date hereof. Assignor shall promptly notify Assignee in writing if any
claim is made against Assignor with respect to any matter which Assignee has
agreed to assume in this Assignment, specifying the nature and details of such
claim. Assignor shall cooperate fully with Assignee and its counsel and
attorneys in the defense against such claim in accordance with their judgment
and discretion, and Assignor shall not pay or settle any such claim without
Assignee’s prior written consent. No person or entity, other than Assignor,
shall be deemed a beneficiary of the provisions of this Section 5.
6. Indemnity. Assignee agrees to indemnify, defend and hold Assignor harmless
from and against any and all claims, damages, demands, causes of action,
liabilities, judgments, losses, costs and expenses (including but not limited to
reasonable attorneys’ fees) asserted against or incurred by Assignor caused by
the failure of Assignee to perform any obligation
16
--------------------------------------------------------------------------------
under the Contracts which obligation was assumed by Assignee hereunder. Assignor
agrees to indemnify, defend and hold Assignee harmless from and against any and
all claims, damages, demands, causes of action, liabilities, judgments, losses,
costs and expenses (including but not limited to reasonable attorneys’ fees)
asserted against or incurred by Assignee caused by the failure of Assignor to
perform any obligation under any of the Contracts, first arising prior to the
date hereof.
7. Power and Authority. Assignor represents and warrants to Assignee that it is
fully empowered and authorized to execute and deliver this Assignment, and the
individual signing this Assignment on behalf of Assignor represents and warrants
to Assignee that he or she is fully empowered and authorized to do so.
8. Attorneys’ Fees. If either Assignee or Assignor or their respective
successors or assigns file suit to enforce the obligations of the other party
under this Assignment, the prevailing party shall be entitled to recover the
reasonable fees and expenses of its attorneys.
9. Successors and Assigns. This Assignment shall be binding upon and inure to
the benefit of Assignor and Assignee and their respective successors and
assigns.
10. Counterparts. This Agreement may be executed in any number of identical
counterparts, any or all of which may contain the signatures of fewer than all
of the parties but all of which shall be taken together as a single instrument.
11. Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Florida
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment the day and year first above written.
ASSIGNOR Venetian Acres, LLC By:
Title:
ASSIGNEE Gladstone Land Corporation By:
Title:
17 |
289 Pa. Super. 396 (1981)
433 A.2d 509
COMMONWEALTH of Pennsylvania
v.
Derek McBRIDE, Appellant.
Superior Court of Pennsylvania.
Submitted February 23, 1981.
Filed August 7, 1981.
*397 Arthur J. King, Assistant Public Defender, Norristown, for appellant.
Ronald T. Williamson, Assistant District Attorney, Norristown, for Commonwealth, appellee.
Before SPAETH, JOHNSON and WIEAND, JJ.
WIEAND, Judge:
Where appellant has been convicted of corrupting the morals of a minor, may a court validly require, as a condition of probation, that he refrain from contact or communication with such minor? We agree with the learned trial judge that this was a proper condition of probation and affirm the judgment of sentence.
On February 14, 1980, Derek McBride entered a counseled plea of guilty to an information charging him with corrupting the morals of a minor.[1] He also pleaded guilty to *398 possession of a controlled substance with intent to deliver.[2] He was placed on probation for four years upon the conditions that he undergo psychiatric counselling and have no contact with the juvenile whose morals he had corrupted. Subsequently, appellant appeared before the court on charges that he had violated the conditions of his probation. He waived a hearing thereon and stipulated to various violations, including the commission of new offenses precipitated by a desire to contact the minor. The court thereupon entered an order of probation for a new four year period and included as conditions that appellant enter and complete the Abraxas Foundation's drug rehabilitation program and have no contact with the juvenile girl whose morals he had corrupted. Appellant then filed a petition to reconsider the sentence, asking that the court remove and vacate the conditions of probation. The trial court declined to accede to this request. On appeal, appellant argues that by directing him to have no contact with the juvenile, the court imposed an undue restriction on his liberty and violated his constitutional rights to freedom of speech and association.
A trial court which has revoked probation may modify the original probationary period by lengthening it and by adding reasonable conditions. Commonwealth v. Vivian, 426 Pa. 192, 231 A.2d 301 (1967); Commonwealth v. Johnson, 250 Pa.Super. 431, 378 A.2d 1013 (1977). See also: 42 Pa.C.S.A. § 9771(b). The Sentencing Code, at 42 Pa.C.S.A. § 9754(c)(13), provides that as a condition of probation a trial court may require a defendant to "satisfy any . . . conditions reasonably related to the rehabilitation of the defendant and not unduly restrictive of his liberty . . . ."
This broad power to impose conditions as part of an order of probation is intended to individualize the sentencing process so that an effort can be made to rehabilitate a criminal defendant while, at the same time, preserving the right of law abiding citizens to be secure in their persons and property. An order calculated to achieve this purpose *399 will necessarily impinge to some extent upon the liberties of the person who has been convicted of crime and placed on probation. Such a person "does not enjoy the full panoply of constitutional rights otherwise enjoyed by those who [have] not run afoul of the law." Barlip v. Penna. Board of Probation and Parole, 45 Pa.Cmwlth. 458, 463, 405 A.2d 1338, 1340 (1979).
In Commonwealth v. Reggie, 264 Pa.Super. 427, 399 A.2d 1125 (1979), this Court found reasonable a condition of probation which required a defendant "to keep away from juveniles and young adults." The condition in the instant case was considerably less restrictive, for it placed only one person outside the broad scope of appellant's right to associate with others. That person was the very person whose morals appellant had been convicted of corrupting.
Such a condition was certainly not unreasonable. It was a necessary condition for the rehabilitative program which the court fashioned for appellant, and it was intended to satisfy society's proper concern for protecting its children.
The judgment of sentenced is affirmed.
NOTES
[1] 18 Pa.C.S.A. § 3125.
[2] 35 P.S. § 780-113(a)(30).
|
THEATTORNEY GELVEIRAL
Q,FmXAS
Honorable Ben Atwell, Chairman Opinion No. C- 59
Revenue and Taxation Committee
House of Representatives Re: Whether margarine made
Austin, Texas from safflower oil is
exempt from taxation
under Section 2 of
Article 7057c, Ver-
Dear Mr. Atwell: non's Civil Statutes.
We have received your letter of April 2nd, in which
you request an opinion as to whether margarine made from saf-
flower 011 is exempt from taxation under Section 2 of Article
7057c, V.C.S.
You express the view that it was probably the Intention
of the Legislature in the original enactment of the tax on mar-
garine to exempt from taxation margarine which Is composed of
domestic fats or oils.
The original act in question is House Bill 32, Chapter 6,
p. 8 of the Acts of the Third Called Session of the 43rd Legis-
lature (1934), and Section 2 of that Act is Section 2 of Arti-
cle 7057c, V.C.S., reading as follows:
"Sec. 2. That in addition to the
taxes now provided for by law, each and
every wholesaler, as defined in this
Act, who is now engaged or may be here-
after engaged In his own name, or In
the name of others, or In the name of
representatives or agents in this State,
in the sale of oleomargarine as herein
defined, containing any fat and/or oil
ingredient other than oleo oil from
cattle, oleo stock from cattle, oleo
stearlne from cattle, neutral lard
from hogs, cottonseed oil, peanut oil,
corn oil, soya bean oil and/or milk
fat, shall not later than the fifteenth
day of each calendar month render sworn
statements to the State Comptroller of
all such oleomargarine sold by such
wholesaler in the State of Texas during
-286-
Honorable Hen Atwell, Page 2 Opinion No. C- 59
the preceding calendar month, and pay
an excise tax of Ten (10) Cents per
pound on all such oleomargarine so
sold as shown by such statement In
the manner and within the time here-
inafter provided." (Emphasis supplied)
Section 1.6of the above mentioned Act, the Emergency
Clause, does refer to the importance of the Act to the agri-
cultural and to the cattle industries of this State, and the
necessity for the fostering and promotion of those industries.
Webster's New International Dictionary, 2nd Edition
(1957) defines "safflower as follows: 'An old world thlstle-
like herb having large orange colored flower heads".
The question is whether oil derived from,,safflower.falls
within the above quoted Section 2 of the Act as . . . containing
any fat and/or oil Ingredient other than oleo 011 from cattle,
oleo stock from cattle, oleo stearine from cattle, neutral lard
from hogs, cottonseed oil, peanut oil, corn oil, soya bean oil
and/or milk fat, 0 . .'I.
We fall to see that 011 derived from safflower falls
within any of the above classifications, and for that reason
are of the opinion that margarine composed of such oil is not
exempt from taxation.
SUMMARY
Margarine made from safflower oil is
not exempt from taxation under Section 2 of
Article 7057c, V.C.S.
Yours very truly,
WAGGONER CARR
Attorney General of Texas
HGC:jp:pw
-287-
Honorable Ben Atwell, Page 3 Opinion No. C- 59
APPROVED:
OPINION COMMITTEE:
W. V. Geppert, Chairman
John Reeves
Bill AlIen
James N. Stofer
Pat Bailey
APPROVED FOR THE ATTORNEY GENERAL
By: Stanton Stone
-2aa-
|
IN THE SUPREME COURT OF PENNSYLVANIA
WESTERN DISTRICT
COMMONWEALTH OF PENNSYLVANIA, : No. 265 WAL 2016
:
Respondent :
: Petition for Allowance of Appeal from
: the Order of the Superior Court
v. :
:
:
DEMETRIOUS DARRON FLEMING, :
:
Petitioner :
ORDER
PER CURIAM
AND NOW, this 2nd day of November, 2016, the Petition for Allowance of Appeal
is DENIED.
Justice Mundy did not participate in the consideration or decision of this matter.
|
Order entered June 26, 2015
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-14-00595-CR
TADARROWL DERONE CARSON, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the Criminal District Court No. 7
Dallas County, Texas
Trial Court Cause No. F13-57494-Y
ORDER
This Court has before it appellant’s June 19, 2015 motion to extend time to file his brief
and to supplement the reporter’s record. Appellant states that the record filed does not contain
the reporter’s record of the April 14, 2014 pretrial hearing. Further, appellant states that a copy
of Volume 5, which is the exhibit volume, was not filed with the Dallas County District Clerk’s
office as required by Texas Rule of Appellate Procedure 34.6(h). We GRANT appellant’s
motion as follows.
We DIRECT the Clerk of this Court to provide the Dallas County District Clerk a CD
containing a copy of Volume 5 of the reporter’s record for use by the parties in preparation of
their briefs.
We ORDER Sharon Hazlewood, former official court reporter of the Criminal District
Court No. 7, to file, within THIRTY DAYS of the date of this order, the reporter’s record of the
April 14, 2014 pretrial hearing.
We ORDER appellant to file his brief within SIXTY DAYS of the date of this order.
We DIRECT the Clerk to send copies of this order to the Honorable Elizabeth Frizell,
Presiding Judge, Criminal District Court No. 7; Sharon Hazlewood, former official court
reporter; Vearneas Faggett, official court reporter, Criminal District Court No. 7; the Texas Court
Reporters Certification Board; the Dallas County Auditor; and to counsel for all parties.
/s/ CAROLYN WRIGHT
CHIEF JUSTICE
|
984 A.2d 81 (2009)
118 Conn.App. 456
STATE of Connecticut
v.
Joanne WARREN.
No. 29315.
Appellate Court of Connecticut.
Argued September 24, 2009.
Decided December 15, 2009.
*82 Lauren Weisfeld, assistant public defender, for the appellant (defendant).
Rita M. Shair, senior assistant state's attorney, with whom, on the brief, were Jonathan C. Benedict, former state's attorney, and Brian F. Kennedy, senior assistant state's attorney, for the appellee (state).
BISHOP, BEACH and FRANCIS X. HENNESSY, Js.
FRANCIS X. HENNESSY, J.
The defendant, Joanne Warren, appeals from the judgment of conviction, rendered after a jury trial, of two counts of larceny in the fifth degree in violation of General Statutes §§ 53a-119 and 53a-125a, credit card theft in violation of General Statutes § 53a-128c, four counts of forgery in the third degree in violation of General Statutes § 53a-140, four counts of criminal impersonation in violation of General Statutes § 53a-130, identity theft in the third degree in violation of General Statutes §§ 53a-129a and 53a-129d, and two counts of larceny in the sixth degree in violation of General Statutes §§ 53a-119 and 53a-125b. On appeal, the defendant claims that the trial court violated her constitutional right to an impartial, properly instructed jury by giving an improper instruction after the initial jury charge. Specifically, the defendant claims that because the court's subsequent, allegedly improper instruction stated that the written charge was only to be used as a guide, the court either muddied the jury's understanding that it was bound to accept the law as it was given by the court or, alternatively, suggested that the jury could reject the law entirely and find her guilty on some extralegal or insufficient basis. We disagree and affirm the judgment of the trial court.
*83 The jury reasonably could have found the following facts. Ellen Mallozzi, the victim, met the defendant through Jonathan Warren, the defendant's nephew. During the relevant time period, Jonathan Warren was dating Sarah Mallozzi, the victim's daughter. In March or April, 2006, Jonathan Warren introduced the defendant to the victim. From that point on, the defendant and the victim developed a friendship.
In July, 2006, the victim was planning a high school graduation party for her daughter. In anticipation of the party, the victim needed her house to be cleaned. Because of the stress associated with planning the party, and because the defendant had indicated that she wanted to make some money in light of the upcoming birthday of her boyfriend, the victim asked the defendant to clean her house. The defendant agreed. On July 18, 2006, both the defendant and her boyfriend, Brodarick Baker, arrived at the victim's house in the early afternoon to clean. The mail had been delivered to the house by the time the defendant started cleaning, and the victim had not removed it from the mailbox. Additionally, an employee for the bank responsible for issuing JC Penney credit cards testified that a gold JC Penney credit card had been mailed to the victim on July 9, 2006.
Approximately one month later, when the victim was reviewing her JC Penney credit card account statement, she noticed a number of charges for items she had not purchased. For example, on July 18, 2006, there was a charge of $379 for a ten karat gold rope chain. On July 29, 2006, the birthday of the defendant's boyfriend, there were charges for a JC Penney gift card for $400; shorts, T-shirts, pants and a pair of sneakers purchased for $66.95; and Nike footwear purchased for $42.99. After viewing these charges, the victim immediately telephoned JC Penney, cut up her credit card and threw it away. JC Penney subsequently closed the victim's account, marked it as fraudulent and suggested that she file a complaint with the police.
Following JC Penney's advice, the victim filed a complaint with the Trumbull police department. In her statement, she suggested that the police contact the defendant. The defendant admitted to the police that she had used a JC Penney gold credit card issued to the victim and that she had been signing the victim's name when making purchases. She later brought the JC Penney gold card to the police station, and she gave a full statement. Although the defendant claimed that Sarah Mallozzi had given her permission to use the credit card, Sarah Mallozzi denied granting such permission. Furthermore, the victim stated that not only had she not authorized the defendant's use of the card, she did not know of the card's existence until after she contacted JC Penney to report the disputed charges.
At trial, after the evidence was introduced, closing arguments were made and the jury was charged orally, the court stated that it was going to provide a written copy of the charge to the jury. The defendant's trial counsel, in response, requested that a copy of the charge be entered into the record as a court document. The court acquiesced and ordered the jury back into the courtroom. The court informed the jury: "I'm going to have the evidence sent back to you, the information, and I'mI'm going to send you a copy of the jury charge. But once again, this, like the information, is not evidence in the case. It is only to be used by you as a guide. The information acts as a guide; [it] is not evidence in the case. So, I will send back with the information, a copy of my jury charge so you can make references *84 to any part of thethat you deem necessary, okay."
After receiving a written copy of the charge and deliberating, the jury found the defendant guilty of all charges. She was sentenced to a term of ten years incarceration, execution suspended after five years, and five years of probation.
The defendant alleges on appeal that her constitutional right to be tried by a properly instructed jury was violated when the court instructed the jury that it was to use the copy of the written charge only as a "guide." The defendant argues that the "instruction was insufficient to assure that no injustice was done [because] the charge as a whole failed to protect the defendant from the very real danger that the jury disregarded law that it expressly was told was `only' a `guide,' and instead convicted her on some extralegal or insufficient basis." She further argues: "Viewing the charge in this case in its entirety... it is clear that by instructing the jury that the written charge was `only' a `guide,' the court at best muddied the jury's understanding that it was bound to accept the law as it was given by the court and, at worst, the court suggested that the jury could reject that law entirely. This is indisputable; the word `only' connotes `nothing more than' or `something less than,' and the term `guide' connotes something that directs; it is something that advises but is not binding." We are not persuaded.
The defendant failed to object to the instructions at trial and now seeks review under State v. Golding, 213 Conn. 233, 239-40, 567 A.2d 823 (1989).[1] Under Golding, "a defendant can prevail on a claim of constitutional error not preserved at trial only if all of the following conditions are met: (1) the record is adequate to review the alleged claim of error; (2) the claim is of constitutional magnitude alleging the violation of a fundamental right; (3) the alleged constitutional violation clearly exists and clearly deprived the defendant of a fair trial; and (4) if subject to harmless error analysis, the state has failed to demonstrate harmlessness of the alleged constitutional violation beyond a reasonable doubt. In the absence of any one of these conditions, the defendant's claim will fail." (Emphasis in original.) Id. "[T]he first two [prongs of Golding] involve a determination of whether the claim is reviewable; the second two ... involve a determination of whether the defendant may prevail." (Internal quotation marks omitted.) State v. Wright, 114 Conn.App. 448, 458, 969 A.2d 827 (2009).
The defendant has met her burden with respect to reviewability. The trial transcript clearly provides a sufficient record for review. As for the constitutional magnitude condition, the United States Supreme Court has commented that, "[t]hough the line separating the permissible jury practice from the impermissible may not be the brightest ... a line must be drawn somewhere, and the constitutional inviolability of that border must be scrupulously respected lest the purpose and functioning of the jury be seriously impaired." (Citations omitted.) Brown v. Louisiana, 447 U.S. 323, 331, 100 S. Ct. 2214, 65 L. Ed. 2d 159 (1980). Despite the *85 absence of a bright line, Connecticut jurisprudence is clear that "every claim of instructional error is not truly constitutional in nature."[2]State v. Walton, 227 Conn. 32, 64, 630 A.2d 990 (1993); see also State v. Dash, 242 Conn. 143, 151-52, 698 A.2d 297 (1997). Rather, our Supreme Court previously has "considered an instructional impropriety to be of constitutional dimension only when it has gone to the elements of the charged offense, the burden of proof or the presumption of innocence, concepts that undeniably are fundamental to the notion of a fair and impartial jury trial." State v. LaBrec, 270 Conn. 548, 557, 854 A.2d 1 (2004).
Here, the defendant alleges that the court's instruction that the jury use the copy of the written charge "only ... as a guide," negated the court's earlier oral instruction and, consequently, allowed the jury to reject the law as provided by the court. If the jury was not bound by the instruction as alleged, the court's use of the phrase "only ... as a guide" affected all portions of the charge, including those of a constitutional magnitude such as the elements of the charged offense and the burden of proof. Thus, we conclude that the second prong of Golding is met and that the defendant's claim is reviewable.
Accordingly, the resolution of the defendant's appeal turns on whether the court's instructions to the jury amounted to a clear constitutional violation that clearly deprived the defendant of a fair trial.[3] See State v. Makee R., 117 Conn. App. 191, 198, 978 A.2d 549 (2009). It is well settled that jury instructions are to be reviewed in their entirety. See State v. Collazo, 113 Conn.App. 651, 668, 967 A.2d 597, cert. denied, 293 Conn. 904, 976 A.2d 705 (2009). "When the challenge to a jury instruction is of constitutional magnitude, the standard of review is whether it is reasonably possible that the jury [was] misled." (Internal quotation marks omitted.) Id. In making this determination, "the charge to the jury is not to be critically dissected for the purpose of discovering possible inaccuracies of statement...." (Internal quotation marks omitted.) State v. Griffin, 251 Conn. 671, 714, 741 A.2d 913 (1999). Individual instructions also are not "to be judged in artificial isolation...." (Internal quotation marks omitted.) Id. Instead, "[t]he test to be applied ... is whether the charge ... as a whole, presents the case to the jury so that no injustice will result." (Internal quotation marks omitted.) Id.
In reviewing the charge as a whole, we conclude that the court's use of the phrase "only ... as a guide" in instructing the jury did not amount to a clear constitutional violation that clearly deprived the defendant of a fair trial. Before the trial commenced, the court gave preliminary instructions to the jury on procedure. The court stated that "[w]hen the arguments are completed, once again I will instruct you on the law that you will apply to the facts of the case, and then you'll go into *86 the deliberation room and deliberate.... Before you may discuss this case ... you must have heard from me the instructions on the law that you will apply to the facts as you find them to be." Following closing arguments, the court charged the jury by stating: "The function of the court and jury; it is exclusively the function of the court to state the rules of law that govern the case with instructions as to how you are to apply them. It is your obligation to accept the law as I state it. You must follow all my instructions and not single out some and ignore others; they are all equally important." In concluding the charge, the court again wanted to emphasize that "the law is given to you by the court; it is your duty to accept the law as given to you by the court. It is your duty to determine the facts."
The defendant does not take specific issue with the court's initial oral charge to the jury or with the written copy of that charge. Rather, the defendant argues that a clear constitutional violation exists due to the court's use of the phrase "only... as a guide" when it presented a copy of the written charge to the jury because the jury could have understood that to mean that it could disregard the law as previously laid out by the court. This reading by the defendant is unsustainable. We cannot review this particular instructional phrase by the court in isolation from the thirty-nine page charging document. See State v. Gonzalez, 69 Conn.App. 649, 659, 796 A.2d 1225, cert. denied, 260 Conn. 937, 802 A.2d 91 (2002). The context of the court's instruction that the written copy of the charge be used "only ... as a guide" makes clear that the court was contrasting the instructions with evidence instead of commenting on whether the jury had to follow the instructions. Moreover, despite any ambiguity surrounding the contested instructional phrase, the copy of the charge itself correctly guided the jury by stating, in multiple places, as we have discussed, that the jury was obligated to accept the law as provided by the court. Although jury instructions do serve as a guide, they are a mandatory guide, and here it is clear that the jury was bound by the instructions. Thus, after reviewing the record, we cannot say that the court's instructional phrase "only ... as a guide" created a reasonable possibility that the jury was misled.
As a result, we conclude that the jury instructions, read as a whole, did not clearly violate the defendant's constitutional rights or clearly deprive her of a fair trial as required for reversal under the third prong of Golding.
The judgment is affirmed.
In this opinion the other judges concurred.
NOTES
[1] The defendant also argues that her claim is reviewable under the plain error doctrine. See Practice Book § 60-5. The plain error doctrine, which provides a rule of reversibility, rather than reviewability, "is reserved for truly extraordinary situations where the existence of the error is so obvious that it affects the fairness and integrity of and public confidence in the judicial proceedings." (Internal quotation marks omitted.) State v. Cutler, 293 Conn. 303, 326, 977 A.2d 209 (2009). This case does not present such an extraordinary situation warranting the application of the plain error doctrine.
[2] "Indeed, it would trivialize the constitution to transmute a nonconstitutional claim into a constitutional claim simply because of the label placed on it by a party or because of a strained connection between it and a fundamental constitutional right." (Internal quotation marks omitted.) State v. LaBrec, 270 Conn. 548, 557, 854 A.2d 1 (2004).
[3] Even though we review this claim under the third prong of Golding, we note that "[w]hen the principal participant in the trial whose function it is to protect the rights of his client does not deem an issue harmful enough to press in the trial court, the appellate claim that the same issue clearly deprived the defendant of a fundamental constitutional right and a fair trial ... is seriously undercut." (Internal quotation marks omitted.) State v. Makee R., 117 Conn.App. 191, 198, 978 A.2d 549 (2009).
|
Citation Nr: 0800408
Decision Date: 01/04/08 Archive Date: 01/22/08
DOCKET NO. 06-20 986 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Manila, the
Republic of the Philippines
THE ISSUE
Entitlement to service connection for cause of death.
REPRESENTATION
Appellant represented by: Veterans of Foreign Wars of
the United States
WITNESSES AT HEARING ON APPEAL
Appellant and E.B.
ATTORNEY FOR THE BOARD
C. Chaplin, Counsel
INTRODUCTION
According to verification from the National Personnel Records
Center (NPRC) the decedent had service from December 1945 to
April 1947. He died in January 1997. The appellant seeks
surviving spouse benefits.
This matter comes before the Board of Veterans' Appeals
(Board) from a May 2005 rating decision of the Department of
Veterans Affairs (VA) Regional Office (RO) in Manila, the
Republic of the Philippines, that denied entitlement to
service connection for the cause of death.
The appellant presented testimony at a personal hearing in
July 2007 before the undersigned.
FINDINGS OF FACT
1. According to certification by an Office of the Municipal
Civil Registrar, the cause of death in January 1997 was
cardiac arrhythmia post angina, and no additional causes were
reported.
2. No competent medical evidence has been submitted or
identified to demonstrate that the decedent's death was
related to service or to a service-connected disability nor
may it be presumed to have been related to service.
3. At the time of the decedent's death, he was not service-
connected for any disability.
CONCLUSION OF LAW
The cause of the decedent's death was not related to an
injury or disease incurred in or aggravated by active
service, nor may it be presumed to have been incurred
therein. 38 U.S.C.A. §§ 1101, 1110, 1112, 5103, 5103A, 5107
(West 2002 & West Supp. 2006); 38 C.F.R. §§ 3.159, 3.303,
3.307, 3.309, 3.312 (2007).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Upon receipt of a complete or substantially complete
application, VA must notify the claimant and any
representative of any information, medical evidence, or lay
evidence not previously provided to VA that is necessary to
substantiate the claim. This notice requires VA to indicate
which portion of that information and evidence is to be
provided by the claimant and which portion VA will attempt to
obtain on the claimant's behalf. See 38 U.S.C.A. §§ 5103,
5103A, 5107 (West 2002 & Supp. 2006); 38 C.F.R. § 3.159
(2007). The notice must: (1) inform the claimant about the
information and evidence not of record that is necessary to
substantiate the claim; (2) inform the claimant about the
information and evidence that VA will seek to provide; (3)
inform the claimant about the information and evidence the
claimant is expected to provide; and (4) request or tell the
claimant to provide any evidence in the claimant's possession
that pertains to the claim, or something to the effect that
the claimant should "give us everything you've got
pertaining to your claim(s)." Pelegrini v. Principi, 18
Vet. App. 112 (2004).
Here, the RO sent correspondence in March 2005; a rating
decision in May 2005; and a statement of the case in May
2006. These documents discussed specific evidence, the
particular legal requirements applicable to the claims, the
evidence considered, the pertinent laws and regulations, and
the reasons for the decisions. VA made all efforts to notify
and to assist the appellant with regard to the evidence
obtained, the evidence needed, the responsibilities of the
parties in obtaining the evidence, and the general notice of
the need for any evidence in the appellant's possession. The
Board finds that any defect with regard to the timing or
content of the notice to the appellant is harmless because of
the thorough and informative notices provided throughout the
adjudication and because the appellant had a meaningful
opportunity to participate effectively in the processing of
the claims with an adjudication of the claims by the RO
subsequent to receipt of the required notice. As the Board
concludes below that the preponderance of the evidence is
against the appellant's claim for service connection for the
cause of death, any questions as to the appropriate effective
date to be assigned is rendered moot. There has been no
prejudice to the appellant, and any defect in the timing or
content of the notices has not affected the fairness of the
adjudication. See Mayfield v. Nicholson, 19 Vet. App. 103
(2005), rev'd on other grounds, 444 F.3d 1328 (2006)
(specifically declining to address harmless error doctrine);
see also Dingess v. Nicholson, 19 Vet. App. 473 (2006).
Thus, VA has satisfied its duty to notify the appellant and
had satisfied that duty prior to the final adjudication in a
supplemental statement of the case issued in April 2007. The
claimant received additional notice in September 2007.
However, the Board finds that the issuance of a supplemental
statement of the case is not required because no evidence was
received after the April 2007 supplemental statement of the
case. 38 C.F.R. §§ 19.31, 19.37 (2007).
In addition, all relevant, identified, and available evidence
has been obtained, and VA has notified the appellant of any
evidence that could not be obtained. The appellant has not
referred to any additional, unobtained, relevant, available
evidence. In May 2007, the appellant wrote that she had no
more evidence to submit and asked that her case be forwarded
to the Board for a decision. Thus, the Board finds that VA
has satisfied both the notice and duty to assist provisions
of the law.
The death of a veteran will be considered as having been due
to a service-connected disability when such disability was
either the principal or contributory cause of death. 38
C.F.R. § 3.312(a). The service-connected disability will be
considered the principal (primary) cause of death when such
disability, singly or jointly with some other condition, was
the immediate or underlying cause of death or was
etiologically related thereto. 38 C.F.R. § 3.312(b). The
service-connected disability will be considered a
contributory cause of death when it contributed substantially
or materially to death, that it combined to cause death, or
that it aided or lent assistance to the production of death.
It is not sufficient to show that it causally shared in
producing death, but rather it must be shown that there was a
causal connection. 38 C.F.R. § 3.312(c).
In order to be a contributory cause of death, the
debilitating effects of a service-connected disability must
have made the veteran materially less capable of resisting
the fatal disease or must have had a material influence in
accelerating death. Lathan v. Brown, 7 Vet. App 359 (1995).
Where a veteran served continuously for 90 days or more
during a period of war and a specified chronic disease, such
as cardiovascular-renal disease, became manifest to a degree
of 10 percent within one year from date of termination of
that service, the disease shall be presumed to have been
incurred in service, even though there is no evidence of the
disease during the period of service. This presumption is
rebuttable by affirmative evidence to the contrary.
38 U.S.C.A. § 1101, 1112, 1113 (West 2002); 38 C.F.R.
§ 3.307, 3.309 (2007).
If a veteran is a former prisoner of war, atherosclerotic
heart disease or hypertensive vascular disease (including
hypertensive heart disease) and their complications
(including myocardial infarction, congestive heart failure,
arrhythmia) shall be service connected if manifested to a
degree of disability of 10 percent or more at any time after
discharge or release from active service even though there is
no record of such disease during service. This presumption
is rebuttable by affirmative evidence to the contrary.
38 C.F.R. § 3.309(c).
The appellant seeks service connection for the cause of her
husband's death. She contends that his heart disease began
in service and that he had symptoms of chronic heart disease
after service. As shown on the certification by the Office
of the Municipal Civil Registrar, the cause of death was
cardiac arrhythmia post angina, and no additional causes were
reported.
At the time of the decedent's death, he was not service-
connected for any disability.
In response to a request for service medical records, NPRC
stated in February 2005 that no service medical records or
reports from the surgeon general's office were located. NPRC
indicated that any service medical records would have been
destroyed in a fire at their facility. The appellant also
submitted a copy of a September 2005 response to her inquiry
that the records were not in the files. NPRC stated that if
the records were there on July 12, 1973, they would have been
in the area that suffered the most damage in the fire on that
date and may have been destroyed.
The Board has a heightened duty to consider the applicability
of the benefit of the doubt, to assist the claimant in
developing the claim, and to explain its decision when the
veteran's medical records have been destroyed. Ussery v.
Brown, 8 Vet. App. 64 (1995). The caselaw does not lower the
legal standard for proving a claim for service connection but
rather increased the Board's obligation to evaluate and
discuss in its decision all of the evidence that may be
favorable to the appellant. Russo v. Brown, 9 Vet. App. 46
(1996).
After review of the record, entitlement to service connection
for cause of death on a direct or presumptive basis is not
shown. As discussed above, service medical records are not
available. The Board notes that in the appellant's initial
application she did not claim that the decedent's death was
related to his service. Medical records have not been
submitted regarding the decedent's heart condition. The
evidence of record does not show that the decedent developed
a heart condition in service or any cardiovascular-renal
disease that manifested to 10 percent disabling within the
first year after separation from service. In addition, the
evidence does not show, nor does the appellant contend, that
the decedent had been a prisoner of war. Therefore
entitlement to service connection for a heart condition
diagnosed as arrhythmia is not warranted on a presumptive
basis for a former prisoner of war.
A former comrade and close friend of the decedent wrote in
June 2006 that he knew that after discharge from the
Philippine Scout Army in April 1947, the decedent had a
chronic heart disease that caused his death and that his
sickness was a direct result of his service in the Army.
The appellant testified in July 2007 that she and the
decedent were married in May 1948 after he was discharged
from service. The decedent suffered for four years prior to
his death in January 1997. She was unable to recall when he
was first treated for a heart condition but it had been a
long time earlier.
The Board has carefully considered the statements of the
appellant and a friend. The Board finds that they are
competent, as lay persons, to report that as to which each
has personal knowledge. Layno v. Brown, 6 Vet. App. 465
(1994). However, they are not competent to offer a medical
opinion as to cause or etiology of the decedent's death, as
there is no evidence of record that either has specialized
medical knowledge. Routen v. Brown, 10 Vet. App. 183 (1997)
(layperson is generally not capable of opinion on matter
requiring medical knowledge); Espiritu v. Derwinski, 2 Vet.
App. 492 (1992). The statements of the appellant and a
friend are not competent medical evidence as to a nexus
between the decedent's death and his service, or to
symptomatology since service.
In conclusion, having reviewed the complete record, the Board
finds that the preponderance of the competent and probative
evidence is against the appellant's claim of entitlement to
service connection for the cause of death. There is no
probative, competent medical evidence of record linking the
decedent's death to service or to a disease or injury
incurred in service. No probative, competent medical
evidence exists of a relationship between a heart condition
and any continuity of symptomatology asserted by the
appellant. McManaway v. West, 13 Vet. App. 60 (1999) (where
there is assertion of continuity of symptomatology since
service, medical evidence is required to establish a nexus
between the continuous symptomatology and the current claimed
condition); Voerth v. West, 13 Vet. App. 117 (1999); Savage
v. Gober, 10 Vet. App. 488 (1997).
The Board finds that entitlement to service connection for a
heart disability is not shown on a direct or presumptive
basis. Therefore, the provisions of 38 U.S.C.A. § 5107(b)
are not applicable, and that service connection is not
warranted for the cause of the veteran's death. The Board
finds that the preponderance of the evidence is against that
claim and that the claim must be denied. 38 U.S.C.A. § 5107;
Gilbert v. Derwinski, 1 Vet. App. 49 (1990).
ORDER
Entitlement to service connection for cause of death is
denied.
____________________________________________
HARVEY P. ROBERTS
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
No. 19-4625
ROBERT J. BRIA, APPELLANT,
V.
ROBERT L. WILKIE,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appeal from the Board of Veterans' Appeals
(Argued December 1, 2020 Decided January 15, 2021)
Ethan F. Maron and Ryan J. McClure, who was on the brief, both of Washington, D.C.,
for the appellant.
Timothy G. Joseph, with whom William A. Hudson, Jr., Principal Deputy General Counsel;
Mary Ann Flynn, Chief Counsel; and Anna Whited, Deputy Chief Counsel, were on the brief, all
of Washington, D.C., for the appellee.
Before PIETSCH, GREENBERG, and MEREDITH, Judges.
MEREDITH, Judge: The appellant, Robert J. Bria, through counsel appeals a March 13,
2019, Board of Veterans' Appeals (Board) decision that denied entitlement to a compensable initial
disability rating for hepatitis C and to a disability rating in excess of 10% for that condition from
May 20, 2016. Record (R.) at 4-14. The Board also denied entitlement to special monthly
compensation (SMC) based on the loss of use of a creative organ. R. at 11. This matter was
referred to a panel of the Court to consider the meaning of the phrase "loss of use" in 38 U.S.C.
§ 1114(k) with respect to creative organs. The facts of this case, however, do not require us to
determine in general what may qualify as loss of use. Instead, we hold that the circumstances
alleged by the appellant—the use of a condom to prevent the sexual transmission of hepatitis C,
resulting in effective infertility—are not the type contemplated by the statute. We therefore affirm
the Board's decision.
I. BACKGROUND
The appellant served on active duty in the U.S. Army from August 1972 to August 1974.
R. at 73. He was diagnosed with hepatitis C in June 2004. R. at 1666. A VA regional office (RO)
denied his claim for benefits for that condition in February 2005, and he perfected an appeal to the
Board. R. at 1856-60, 1901, 1906-07, 1916-17. After several years of activity on the claim,
including a Board denial in October 2010, R. at 1581-90, and a Court remand in May 2012, R. at
1492-99, the Board granted the claim in July 2013, R. at 1449-63.
In October 2013, the appellant underwent a VA liver examination to determine the severity
of his hepatitis C. R. at 1427-31. The examiner stated that the appellant's "major symptomatic
condition" was late stage chronic obstructive pulmonary disease (COPD) and that he was not
receiving treatment for hepatitis C. R. at 1427. The appellant denied experiencing "any
incapacitating episodes (with symptoms such as fatigue, malaise, nausea, vomiting, anorexia,
arthralgia, and right upper quadrant pain) due to" hepatitis C in the prior 12 months. R. at 1428.
Under the heading "Remarks," the examiner wrote: "Active [h]epatitis C without signs of cirrhosis
or liver dysfunction." R. at 1430.
The RO implemented the Board's grant of benefits in November 2013, assigning a
noncompensable rating for hepatitis C effective August 4, 2004. R. at 1423-26. The appellant,
through current counsel, filed a Notice of Disagreement with the assigned rating. R. at 1304-05.
VA medical records dated between March 2014 and December 2015 reflect complaints of
nausea and vomiting unrelated to his food intake, R. at 524 (Mar. 2014), 1250 (June 2014), 383-84
(Dec. 2015); declining endurance accompanied by increasing fatigue, R. at 1006 (Oct. 2014); and
weight loss, R. at 810 (July 2015), 384 (Dec. 2015). Of note, an October 2014 VA treatment
record reflects the appellant's report of increased bloating "that is causing numbness in the
epigastric region and pain along the flanks," but the examiner noted that he did "not complain of
diarrhea, vomiting, or anorexia." R. at 1028. The following month, the appellant reported to his
medical provider that he experienced intermittent bloating and abdominal pain, R. at 948, but the
examiner stated that the appellant's pain and bloating was more likely caused by his "recently
completed gastric emptying study," the results of which were abnormal, R. at 949. The examiner
further noted that the appellant "denie[d] any symptoms relevant to liver disease," including
jaundice, edema, ascites, hematemesis, melena, and hepatic encephalopathy. Id.
At a VA liver examination in May 2016, the examiner found signs of intermittent fatigue,
malaise, and anorexia, R. at 164, but the appellant denied experiencing any incapacitating episodes
in the prior 12 months, R. at 165. In October 2016, VA increased the appellant's disability rating
to 10%, effective May 20, 2016, the date of the most recent VA examination. R. at 158-62.
2
Through current counsel, the appellant appealed to the Board. R. at 94-101. In his Substantive
Appeal, the appellant argued that the symptoms noted in the May 2016 examination report, which
VA determined warranted a higher disability rating, "could not have manifested on the day of [the]
examination," and therefore "a compensable evaluation is warranted throughout the period on
appeal." R. at 95. He also cited October 2014 and December 2015 VA treatment records to
demonstrate that his condition had worsened before May 2016. R. at 95-96. Finally, the appellant
requested SMC for loss of use of a creative organ, arguing that his hepatitis C required him to wear
a condom during intercourse to protect his partner and that "[c]ondom use effectively precludes
procreative sex." R. at 96. In an attached affidavit, the appellant stated that he used a condom to
prevent the transmission of hepatitis C and that he had "refrained from unprotected sexual
intercourse since June 2013." R. at 98. The appellant's partner also submitted an affidavit stating
that they use a condom when engaged in sexual intercourse. R. at 99.
In the March 2019 decision on appeal, the Board denied entitlement to a compensable
disability rating for hepatitis C prior to May 20, 2016; to a rating in excess of 10% thereafter; and
to SMC based on the loss of use of a creative organ. R. at 4-14. This appeal followed.
II. ANALYSIS
A. SMC
1. The Parties' Arguments and the Board's Decision
The appellant first contends that the Board misapplied the law regarding SMC based on
the loss of use of a creative organ. Appellant's Brief (Br.) at 5. Specifically, he asserts that the
Board erroneously required that his loss of fertility be directly caused by his hepatitis C and did
not allow for the possibility of "an additional link in the causal chain, i.e., condom use." Id. The
Board's decision, he argues, violates Payne v. Wilkie, 31 Vet. App. 373 (2019). Id. at 7-10. He
also argues that 38 U.S.C. § 1114(k) permits the award of SMC for any impairment of sexual
function that is the result of a service-connected disability. Id. at 10-14.
The Secretary counters that the appellant "fails to point [to] any evidence of record that he
is infertile, that he has lost a testicle, or that he cannot achieve an erection," and therefore he has
failed to carry his burden of demonstrating that the Board misapplied the law. Secretary's Br. at
5. The Secretary urges the Court to adopt for the purposes of section 1114(k) the definition of
"loss of use" that the Court established in Jensen v. Shulkin for the purposes of 38 U.S.C.
3
§ 2101(a)(2)(B)(i), regarding the loss of use of both lower extremities: "a deprivation of the ability
to avail oneself of the anatomical region in question." 29 Vet. App. 66, 78 (2017); Secretary's Br.
at 8-9. Under that definition, the Secretary argues, the Board properly denied entitlement to SMC
because the appellant's hepatitis C "has not deprived him of the ability to have procreative sex,"
Secretary's Br. at 9; rather, the appellant can simply "remove the condom and have procreative
sex, thereby removing any potential impairment to his fertility," id.
With respect to the appellant's request for SMC, the Board stated:
SMC is available for loss of use of a creative organ. In most circumstances, [it] is
applied to situations like erectile dysfunction, loss of one or both testicles, or loss
of one or both ovaries. The [appellant] does not argue, and there is no evidence,
that he suffers from erectile dysfunction as a result of his service-connected
hepatitis C, that he is unable to achieve an erection, or that he has been rendered
infertile as a result of his service-connected disability. While the Board
acknowledges the contention that the [appellant] must use a condom during
intercourse, there is no evidence or argument that, if he did not, [] he would be
unable to conceive a child as a result of his service-connected hepatitis C. Absent
such a showing, the use of a condom alone does not rise to the level of loss or loss
of use of a creative organ. SMC is therefore not warranted.
R. at 11 (citation omitted).
2. Statutory Interpretation of Section 1114(k)
Congress has provided that SMC is payable to a veteran who, as the result of a service-
connected disability, has suffered the "loss of use" of a "creative organ[]." 38 U.S.C. § 1114(k).
In our recent decision in Payne, the Court held that, "[b]ecause Congress did not explicitly include
. . . limitations [on qualifying service-connected disabilities] when drafting section 1114(k), the
Court presumes that it did not intend to limit potential entitlement to SMC(k) only to veterans with
specific service-connected disabilities." 31 Vet. App. at 384. The Court also held that "the plain
text of section 1114(k) does not . . . preclude a theory of entitlement [to SMC(k)] based on a multi-
link causal chain between the service-connected disability and the anatomical loss or loss of use
of one or more creative organs." Id. at 385. Therefore, the causal chain on which the appellant's
claim is based (i.e., his service-connected hepatitis C causes him to use a condom which results in
effective infertility) may not be foreclosed if it results in loss of use of a creative organ.1 That, in
1
Given the Court's holding that the appellant has not demonstrated error in the Board's conclusion that he
has not suffered the loss of use of a creative organ, we need not decide whether use of a condom may serve as an
intermediate step in the causal chain between a service-connected disability and such a loss of use.
4
these circumstances, turns on whether section 1114 requires a disability of the creative organ to
establish loss of use, a question the Court has not had occasion to consider.2 Accordingly, we
begin, as always, with the statutory language. McGee v. Peake, 511 F.3d 1352, 1356 (Fed. Cir.
2008); see Williams v. Taylor, 529 U.S. 420, 431 (2000).
"The statute's plain meaning is derived from its text and its structure." McGee, 511 F.3d
at 1356; see Gardner v. Derwinski, 1 Vet. App. 584, 586 (1991) ("Determining a statute's plain
meaning requires examining the specific language at issue and the overall structure of the
statute."), aff'd sub nom. Gardner v. Brown, 5 F.3d 1456 (Fed. Cir. 1993), aff'd, 513 U.S. 115
(1994). The "plain meaning must be given effect unless a 'literal application of [the] statute will
produce a result demonstrably at odds with the intention of its drafters.'" Gardner, 1 Vet. App. at
586-87 (quoting Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571 (1982)); see Roper v.
Nicholson, 20 Vet. App. 173, 180 (2006), aff'd, 240 F. App'x 422 (Fed. Cir. 2007). In assessing
the language of a statute, courts review the overall statutory scheme "'so that effect is given to all
its provisions, so that no part will be inoperative or superfluous, void or insignificant, and so that
one section will not destroy another unless the provision is the result of obvious mistake or error.'"
Roper, 20 Vet. App. at 178 (quoting 2A NORMAN J. SINGER, SUTHERLAND STATUTES AND
STATUTORY CONSTRUCTION § 46:06 (6th ed. 2000)).
The first question in statutory interpretation is always "whether Congress has directly
spoken to the precise paulamacias@example.net." Chevron, U.S.A., Inc. v. Nat'l Res. Def. Council, Inc.,
467 U.S. 837, 842 (1984). "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. The interpretation of a statute is a question of law that the Court reviews de novo,
without deference to the Board's interpretation. See Butts v. Brown, 5 Vet. App. 532, 539 (1993)
(en banc).
2
In Jensen, the Court considered the meaning of the phrase "loss[] or loss of use" as it appears in 38 U.S.C.
§ 2101(a)(2)(B)(i) and 38 C.F.R. § 3.809(b)(1) (pertaining to specially adapted housing), 29 Vet. App. at 68, for
disabilities "due to the loss, or loss of use, of both lower extremities such as to preclude locomotion without the aid of
braces, crutches, canes, or a wheelchair," 38 U.S.C. § 2101(a)(2)(B)(i). The Court held that "loss of use" means "a
deprivation of the ability to avail oneself of the anatomical region in question," there, the lower extremity. Jensen,
29 Vet. App. at 78. Because the Court in Jensen considered the meaning of "loss of use" in a different context, its
definition is informative but not controlling, particularly in light of our colleagues' statement in that case that "loss of
use" is "a general term, one that can readily accept additional specificity in various circumstances," explaining that
"[a]djacent modifiers and, in the case of SMC, regulatory efforts[,] create that specificity." Id.
5
For several reasons, we conclude that the "text and . . . structure" of section 1114(k),
McGee, 511 F.3d at 1356, make clear that the ability of the creative organ to function must be
diminished in order to constitute a "loss of use of . . . [a] creative organ[]."3 38 U.S.C. § 1114(k).
Therefore, the Board did not err in finding that a personal choice to use a condom, even when done
with the intention of preventing the spread of disease, does not alone result in loss of use of a
creative organ.
First, section 1114 is part of chapter 11 of title 38, U.S. Code, which is titled
"Compensation for Service-Connected Disability or Death." Subchapter II begins with section
1110, which provides that, "[f]or disability," compensation will be paid "as provided in this
subchapter" when certain conditions are satisfied. 38 U.S.C. § 1110. Section 1114 of that
subchapter in turn provides that, "[f]or the purposes of section 1110"—i.e., for the purposes of
paying compensation for disability—the listed rates will apply. Subsection (k) then sets forth the
rate of compensation where a veteran, "as the result of service-connected disability, has suffered
the anatomical loss or loss of use of one or more creative organs." 38 U.S.C. § 1114(k) (emphasis
added). Notably, that subsection later provides that, "in the event the veteran has suffered one or
more of the disabilities heretofore specified in this subsection," a higher rate of SMC is warranted.
Id. (emphasis added). In that regard, although subsection (k) references generically a "service-
connected disability" as the beginning of the causal chain, no specific service-connected conditions
are thereafter listed. See Payne, 31 Vet. App. at 384 (noting that subsection 1114(k) "does not
specify the types of service-connected disabilities" that may result in compensation under that
subsection). Accordingly, the phrase "disabilities heretofore specified" must refer to the specific
conditions enumerated in subsection (k), which includes "loss of use of . . . [a] creative organ[]."4
The placement of section 1114 and the wording of subsection (k) thus clearly indicate that SMC(k)
3
Nothing in our opinion suggests that the cause of the diminishment must be physical rather than
psychological.
4
The Court notes that, in April 2000, VA's Office of General Counsel (OGC) considered whether VA could,
via rulemaking, compensate service-connected mastectomies under section 1114(k). VA Gen. Couns. Prec. 2-00
(Apr. 3, 2000). The OGC concluded that "VA may not by rulemaking designate additional injuries or conditions for
which it will pay k-rate SMC, beyond those specified in section 1114(k), even if it finds that the loss involved is
comparable to the losses involved in the conditions for which Congress has authorized k-rate SMC." Id. at 2 (emphases
added).
6
compensates for disabilities of some kind and, as relevant here, that it must be a disability "of . . .
[a] creative organ[]." 38 U.S.C. § 1114(k).
A "disability" for the purposes of chapter 11 requires "functional impairment," which
impacts the "'ability of the body as a whole, or of the psyche, or of a system or organ of the body
to function under the ordinary conditions of daily life.'" Saunders v. Wilkie, 886 F.3d 1356, 1363
(Fed. Cir. 2018) (quoting 38 C.F.R. § 4.10 (2017)); see 38 U.S.C. § 1110. At a minimum, then,
the plain language of section 1114(k) conveys that the ability of the creative organ to function
must be diminished in order to warrant compensation. See Wait v. Wilkie, 33 Vet. App. 8, 15
(2020). This conclusion is further buttressed by the other circumstances Congress specifically
listed in section 1114 as warranting SMC, which are conditions affecting specific parts of a
veteran's body or of his or her psyche. See 38 U.S.C. § 1114(k) (including—in addition to the
anatomical loss or loss of use of a creative organ—the anatomical loss or loss of use of one foot,
one hand, both buttocks; blindness in one eye; "complete organic aphonia with constant inability
to communicate by speech"; deafness of both ears; the anatomical loss of 25% or more of tissue
from a single breast or both breasts in combination due to mastectomy; and treatment of breast
tissue with radiation5), (l) (providing SMC for anatomical loss or loss of use of both feet or one
hand and one foot, as well as blindness in both eyes), (m) (providing SMC for the anatomical loss
or loss of use of both hands, or of both legs with factors preventing natural knee action with
prostheses in place; of one arm and one leg with factors preventing natural elbow and knee action
with prostheses in place; and blindness in both eyes with only light perception), (n) (providing
SMC for the anatomical loss or loss of use of both arms with factors preventing natural elbow
5
The Court notes that, when Congress ultimately proposed adding mastectomies to the list of disabilities
compensated under section 1114(k), VA's Under Secretary for Benefits offered the following:
Special monthly compensation is currently authorized for certain anatomical losses or losses of use
for which the rating schedule, which is based solely on impairment of earning capacity, is considered
inadequate for compensation purposes. The statute recognizes that the loss of a hand or foot, for
example, or loss of a creative organ, involves loss of bodily integrity which may negatively affect
self-image and precipitate considerable emotional distress.
The service-connected radical or modified-radical mastectomies covered by [the proposed
legislation] involve loss of bodily integrity and associated emotional trauma to a degree that is at
least comparable to the removal of a single testicle, for example, for which special monthly
compensation is currently payable regardless of its effect on a veteran's procreative ability and
regardless of whether the veteran is still of procreative age. As a matter of simple equity, these
mastectomies warrant equal compensation for the veterans who undergo them.
S. REP. NO. 106-397, at 55 (2000) (emphases added).
7
action with prostheses in place; the anatomical loss of both legs with factors that prevent the use
of prosthetic appliances; the anatomical loss of one arm and one leg with factors that prevent the
use of prosthetic appliances; the anatomical loss of both eyes; and blindness without light
perception in both eyes).
Additionally, the structure of section 1114 indicates that more severe disabilities are
compensated at a higher level of SMC. See 38 U.S.C. § 1114(k)-(n); Breniser v. Shinseki,
25 Vet. App. 64, 68-69 (2011). Tellingly, under subsection (k), loss of use of a creative organ is
compensated at the same level as anatomical loss of a creative organ. This suggests not only that
Congress contemplated that the loss of use of a creative organ that warrants SMC(k) would be
comparable in severity to the anatomical loss of a creative organ, 6 but also that the focus of
subsection (k) is on the level of function, or absence of function, of the creative organ.
In sum, we find that the text and structure of section 1114(k) require that, to establish a
"loss of use of . . . [a] creative organ[]," there must be diminished function of the creative organ.
38 U.S.C. § 1114(k). To the extent that, as discussed below, this resolves the current dispute, "that
is the end of the matter." Chevron, 467 U.S. at 842.
3. Application
As noted above, the appellant contends that compensation under section 1114(k) is
warranted because "service-connected [h]epatitis C causes him to refrain from sex without
7
condoms, and condom use precludes procreative intercourse." Appellant's Br. at 10.
Alternatively, he avers that, even if condom use does not constitute a loss of fertility, he would
nevertheless be entitled to SMC(k) because reliance on condoms due to hepatitis C is itself "an
6
In that regard, the Court notes that the VA Adjudication Procedures Manual directs an adjudicator as
follows: "When a VA examiner finds that there is [erectile dysfunction] or other sexual dysfunction, SMC(k) is
established even though . . . the [v]eteran had a vasectomy prior to the development of the [loss of use] of a creative
organ, as vasectomies may be reversible while [loss of use] is not." VA ADJUDICATION PROCEDURES MANUAL, M21-1
(M21-1), pt. III, subpt. iv, ch. 4, § I.3.b (emphasis added).
7
The Court will not address the appellant's arguments first raised in his reply brief, see Reply Br. at 1-5, and
reiterated at oral argument, see Oral Argument at 8:27-9:01, 12:32-13:15, 15:20-:30, 17:07-:39,
http://www.uscourts.cavc.gov/oral_arguments_audio.php, that his creative organ is impaired because it is capable of
transmitting disease. See Carbino v. Gober, 10 Vet. App. 507, 511 (1997) (declining to review argument first raised
in appellant's reply brief), aff'd sub nom. Carbino v. West, 168 F.3d 32, 34 (Fed. Cir. 1999) ("[I]mproper or late
presentation of an issue or argument . . . ordinarily should not be considered."); see also Untalan v. Nicholson,
20 Vet. App. 467, 471 (2006); Fugere v. Derwinski, 1 Vet. App. 103, 105 (1990). The Court notes, however, that
although he was represented by current counsel below, the appellant does not contend or point to evidence reflecting
that he raised this theory of entitlement before the Agency, nor does he contend that it was reasonably raised by the
record. See R. at 96 (June 2017 Substantive Appeal, filed through current counsel, contending that "[c]ondom use
effectively precludes procreative sex").
8
impairment of normal sexual function." Id. at 11. The Secretary, on the other hand, maintains that
SMC(k) is not warranted here because the appellant does not suffer from a "medical impairment,
injury, or disease to [his] creative organ." Secretary's Br. at 9; see id. at 5 ("[T]here is no evidence
that there is anything wrong with [the a]ppellant's creative organs."). Specifically, he contends
that the appellant "is capable of having [] sex without a condom and procreating," id. at 8; his
"hepatitis C has not deprived him of the ability to have procreative sex," id. at 9; and, "[c]onsistent
with the Board's finding, [he] can remove the condom and have procreative sex, thereby removing
any potential impairment to his fertility," id. (citing R. at 11).
Although the appellant appears to contend that use of a condom constitutes a change in his
sexual "function," the essence of his argument is that SMC(k) may compensate a veteran for a
change in behavior purportedly resulting from a service-connected disability. See, e.g., Reply Br.
at 4 ("[The appellant] retains the physical capacity for unprotected intercourse, but chooses to
refrain from unprotected intercourse."). However, from the above discussion, it is clear that
Congress intended SMC(k) to compensate for, generally, physical or mental impairment resulting
from a service-connected disability and, specifically with respect to loss of use, for the
diminishment of the functional ability of a creative organ that is comparably as severe as
anatomical loss. In that regard, the appellant does not challenge the Board's findings that "there is
no evidence[] that he suffers from erectile dysfunction . . . . , that he is unable to achieve an
erection, or that he has been rendered infertile." R. at 11. Nor did he in his principal brief argue
or point to evidence reflecting that hepatitis C results in any other type of diminishment in the
ability of his creative organs to function or that his condition results in any mental impairment, for
example, loss of libido.8 See R. at 11. Because the plain language of section 1114(k) makes clear
that SMC(k) is not warranted in the absence of any impairment of his creative organ, the Court
cannot conclude that the appellant has demonstrated that the Board erred in finding that "use of a
condom alone does not rise to the level of loss or loss of use of a creative organ." R. at 11.
Accordingly, the Court need not address the appellant's remaining arguments regarding his
entitlement to SMC(k).
8
We note that the M21-1 reflects that SMC(k) is available for the diagnosed conditions of impotence and
loss of libido, among other conditions. See M21-1, pt. III, subpt. iv, ch. 4, § I.3.b.
9
B. Disability Ratings
The appellant argues that the Board provided inadequate reasons or bases for denying
entitlement to a compensable disability rating for hepatitis C prior to May 20, 2016, and to a rating
in excess of 10% thereafter because the Board did not fully address the arguments he raised below
and relied on the May 2016 VA examination, which he avers is inadequate, to deny higher
disability ratings. Appellant's Br. at 16-20. The Secretary disputes these arguments and urges the
Court to affirm the Board's decision. Secretary's Br. at 12-19. Notably, the Secretary asks the
Court to decline to consider the appellant's argument regarding the adequacy of the May 2016 VA
medical examination because the appellant did not raise that challenge below, despite being
represented by current counsel. Id. at 16-17.
The Board is tasked with determining the proper disability rating in the first instance. See
Hensley v. West, 212 F.3d 1255, 1263 (Fed. Cir. 2000) (stating that "appellate tribunals are not
appropriate fora for initial fact finding"); see also 38 U.S.C. § 7261(c) ("In no event shall findings
of fact made by the Secretary or the [Board] be subject to trial de novo by the Court."). The Board's
determination of the proper disability rating is a finding of fact that the Court reviews under the
"clearly erroneous" standard of review. See 38 U.S.C. § 7261(a)(4); Buckley v. West, 12 Vet. App.
76, 81 (1998). A finding of fact is clearly erroneous when the Court, after reviewing the entire
evidence, "is left with the definite and firm conviction that a mistake has been committed." United
States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948); see Gilbert v. Derwinski, 1 Vet. App. 49, 52
(1990). As with any material issue of fact or law, the Board must provide a statement of the
reasons or bases for its determination "adequate to enable a claimant to understand the precise
basis for the Board's decision, as well as to facilitate review in this Court." Allday v. Brown,
7 Vet. App. 517, 527 (1995); see 38 U.S.C. § 7104(d)(1); Gilbert, 1 Vet. App. at 56-57.
1. Adequacy of the May 2016 VA Medical Examination
To begin, the Court will not address the appellant's argument, raised for the first time to
the Court, that "the May 2016 VA examination report is insufficient for the Board to reach a fully
informed evaluation" and should have been returned. Appellant's Br. at 19. There is a
longstanding recognition of "the importance of issue exhaustion with respect to administrative
tribunals" because "'orderly procedure and good administration require that objections to the
proceedings of an administrative agency be made while [the agency] has opportunity for correction
in order to raise issues reviewable by the courts.'" Scott v. McDonald, 789 F.3d 1375, 1377 (Fed.
10
Cir. 2015) (quoting United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 37 (1952)). Within
the context of the VA system, the Court must apply a balancing test to determine whether the
doctrine of issue preclusion should be invoked: "'The test is whether the interests of the individual
weigh heavily against the institutional interests the doctrine exists to serve.'" Id. at 1378 (quoting
Maggitt v. West, 202 F.3d 1370, 1377 (Fed. Cir. 2000)). However, the Court is not required "to
. . . address procedural arguments when the [appellant] fails to raise them before the Board." Id.
at 1381.
The appellant has been represented by current counsel since at least August 2014. See R. at
1304-05. In his Substantive Appeal, the appellant through counsel offered arguments related to
the proper disability ratings for his condition and to SMC, but he did not challenge the adequacy
of the May 2016 VA medical examination. See R. at 95-96. Because the appellant failed to raise
this issue below, thus depriving the Agency of the opportunity for correction and failing to raise
an issue reviewable by this Court, see Scott, 789 F.3d at 1377, the Court, applying the balancing
test of Maggitt, will not exercise its discretion to review the issue raised for the first time here. See
Dickens v. McDonald, 814 F.3d 1359, 1361-62 (Fed. Cir. 2016) (affirming the Court's invocation
of the doctrine of issue exhaustion where the appellant failed to raise a procedural argument to the
Board).
2. Reasons or Bases
The appellant's hepatitis C is evaluated under 38 C.F.R. § 4.114, Diagnostic Code 7354.
Under that diagnostic code, a noncompensable rating is warranted where the condition is
nonsymptomatic, while a 10% rating is warranted where it results in "[i]ntermittent fatigue,
malaise, and anorexia[;] or[] incapacitating episodes (with symptoms such as fatigue, malaise,
nausea, vomiting, anorexia, arthralgia, and right upper quadrant pain) having a total duration of at
least one week, but less than two weeks, during the past 12-month period." 38 C.F.R. § 4.114,
Diagnostic Code 7354 (2020). A 20% rating requires "[d]aily fatigue, malaise, and anorexia
(without weight loss or hepatomegaly), requiring dietary restriction or continuous medication[;]
or[] incapacitating episodes . . . having a total duration of at least two weeks, but less than four
weeks, during the past 12-month period." Id. To warrant a 40% rating, the claimant's hepatitis C
must result in "[d]aily fatigue, malaise, and anorexia, with minor weight loss and hepatomegaly[;]
or[] incapacitating episodes . . . having a total duration of at least four weeks, but less than six
weeks, during the past 12-month period." Id. A 60% rating is warranted where the condition
11
results in "[d]aily fatigue, malaise, and anorexia, with substantial weight loss (or other indication
of malnutrition), and hepatomegaly[;] or[] incapacitating episodes . . . having a total duration of at
least six weeks during the past 12-month period, but not occurring constantly." Id. Finally, a
100% rating is warranted where the condition results in "[n]ear-constant debilitating symptoms
(such as fatigue, malaise, nausea, vomiting, anorexia, arthralgia, and right upper quadrant pain)."
Id. An "incapacitating episode" is "a period of acute signs and symptoms severe enough to require
bed rest and treatment by a physician." Id. at Note 2.
The appellant contends that the Board failed to fully address an argument that he raised in
his Substantive Appeal, namely, that "the May 2016 VA examination report is itself evidence that
the symptoms of fatigue, malaise, and anorexia [on which his 10% rating is based] pre-dated
May 20, 2016." Appellant's Br. at 17; see R. at 95. The appellant argues that the examiner's
conclusion is necessarily based on his review of records showing symptoms that warrant a 10%
rating earlier than the date of the examination. Appellant's Br. at 17.
In the decision on appeal, the Board acknowledged the appellant's argument and
specifically reviewed the October 2014 and December 2015 treatment records that the appellant
identified in his Substantive Appeal. R. at 8. The Board found, however, that "[t]he evidence of
record . . . simply does not support a finding that the [appellant's] increase in disability was
factually ascertainable prior to the assigned effective date of the stage of May 20, 2016." Id. The
Board explained that the appellant's VA treatment records "primarily show treatment for
symptomatology due to [his COPD], gastroesophageal reflux disease (GERD)[,] and swallowing
disorder," and did not show "that he exhibited the symptomatology necessary for an increased
rating" for hepatitis C. Id. In that regard, the Board summarized numerous treatment records and
concluded that none of them indicated that the examiners attributed his reported symptoms to
hepatitis C. R. at 8-9. The Board therefore found no evidence to support increasing the appellant's
disability rating for either period on appeal. R. at 9-10.
The Court concludes that the appellant has not carried his burden of demonstrating
prejudicial error in this regard. See 38 U.S.C. § 7261(b)(2) (requiring the Court to "take due
account of the rule of prejudicial error"); Shinseki v. Sanders, 556 U.S. 396, 409 (2009) (holding
that the harmless-error analysis applies to the Court's review of Board decisions and that the burden
is on the appellant to show that he or she suffered prejudice as a result of VA error). His argument
consists of summaries of the May 2016 examination report, the argument in his Substantive
12
Appeal, and the Board's decision, Appellant's Br. at 16-17; a statement that the Board should have
addressed "why the VA examiner's report is not itself evidence that the symptoms pre-date May 20,
2016," id. at 17; and an assertion that he was prejudiced by the Board's error because his ability to
understand the Board's decision is hindered, id. Missing from his argument, however, is reference
to any evidence showing that the symptoms he points to are attributable to hepatitis C or, assuming
such evidence exists, an explanation of how those symptoms satisfy the requirements for a higher
disability rating.
The appellant next argues that the Board's determination that the symptoms he reported
throughout the appeal period were related to his COPD or GERD is an impermissible medical
conclusion. Appellant's Br. at 18-20; see Colvin v. Derwinski, 1 Vet. App. 171, 172 (1991) (finding
that the Board is prohibited from "provid[ing] [its] own medical judgment in the guise of a Board
opinion"), overruled on other grounds by Hodge v. West, 155 F.3d 1356 (Fed. Cir. 1998). Contrary
to the appellant's argument, however, the Board did not reach a medical conclusion. Instead, the
Board reviewed the medical treatment records and summarized their contents, including whether
the medical provider attributed the appellant's reported symptoms to hepatitis C. See R. at 8-9.
The Board then weighed that evidence against the appellant's assertions that his symptoms were
more severe throughout the appeal period than reflected in the assigned disability ratings. R. at
10. It is the Board's responsibility to weigh the evidence in the first instance, and the Court may
only overturn the Board's conclusion in that regard if the appellant demonstrates that it was clearly
erroneous. See Washington v. Nicholson, 19 Vet. App. 362, 369 (2005); Owens v. Brown,
7 Vet. App. 429, 433 (1995). The appellant has not carried that burden here.
The Court acknowledges the appellant's citation to a March 2014 VA internal medicine
note reflecting that his abdominal pain was "[l]ikely from cirrhosis and known hemangioma in
[the] liver." R. at 521; Appellant's Br. at 19. The Court also notes that the Board did not expressly
discuss this record. See R. at 7-10. The appellant, however, has not demonstrated that the Board's
failure to explicitly account for this evidence is prejudicial to him, again arguing only that the
Board's inadequate reasons or bases hinder his ability to understand the decision. Appellant's Br.
at 20; see 38 U.S.C. § 7261(b)(2); Sanders, 556 U.S. at 409.
The appellant raises no other challenges to the Board's decision regarding the proper
disability rating for hepatitis C for the periods on appeal. The Court will therefore affirm that
portion of the Board decision.
13
III. CONCLUSION
After consideration of the parties' pleadings, a review of the record, and hearing oral
argument, the Board's March 13, 2019, decision is AFFIRMED.
14
|
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 1 of 25
UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
LEADERS OF A BEAUTIFUL STRUGGLE
et al.,
Plaintiffs,
No. 20-cv-929-RDB
v.
BALTIMORE POLICE DEPARTMENT
et al.,
Defendants.
PLAINTIFFS’ REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF THEIR
MOTION FOR A PRELIMINARY INJUNCTION
Brett Max Kaufman* David R. Rocah (Bar No. 27315)
Ashley Gorski* American Civil Liberties Union Foundation
Alexia Ramirez* of Maryland
Nathan Freed Wessler* 3600 Clipper Mill Road, Suite 350
Ben Wizner* Baltimore, MD 21211
American Civil Liberties Union Foundation T: (408)248-3688
125 Broad Street, 18th Floor F: (408)248-3688
New York, NY 10004 thansen@example.com
T: (408)248-3688
F: (408)248-3688
thansen@example.com
thansen@example.com
thansen@example.com
thansen@example.com
thansen@example.com
*
pro hac vice Counsel for Plaintiffs
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 2 of 25
TABLE OF CONTENTS
TABLE OF AUTHORITIES .......................................................................................................... ii
INTRODUCTION ........................................................................................................................... 1
ARGUMENT .................................................................................................................................. 1
I. The BPD’s wide-area aerial surveillance system goes far beyond the surveillance
approved in decades-old Supreme Court cases, and it is unconstitutional. ......................... 1
II. Plaintiffs have standing to challenge the BPD’s collection of their location
information ........................................................................................................................ 11
A. Plaintiffs have standing to raise their Fourth Amendment claim. ......................... 11
B. Plaintiffs have standing to raise their First Amendment claim. ............................ 12
III. Plaintiffs will suffer irreparable harm as a result of the BPD’s wide-area
aerial surveillance system, and the balance of equities and public interest
weigh in their favor. .......................................................................................................... 17
CONCLUSION ............................................................................................................................. 18
i
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 3 of 25
TABLE OF AUTHORITIES
Cases
ACLU v. Clapper,
785 F.3d 787 (2d Cir. 2015) .......................................................................................... 11, 13, 14
Blum v. Yaretsky,
457 U.S. 991 (1982) .................................................................................................................. 12
California v. Ciraolo,
476 U.S. 207 (1986) ................................................................................................................... 2
Carpenter v. United States,
138 S. Ct. 2206 (2018) .......................................................................................................passim
Centro Tepeyac v. Montgomery Cty.,
722 F.3d 184 (4th Cir. 2013) ..................................................................................................... 18
Clapper v. Amnesty International USA,
568 U.S. 398 (2013) ............................................................................................................ 14, 16
Commonwealth v. Almonor,
120 N.E.3d 1183 (Mass. 2019).................................................................................................... 5
Commonwealth v. Estabrook,
38 N.E.3d 231 (Mass. 2015)........................................................................................................ 5
Commonwealth v. McCarthy,
No. SJC-12750, 2020 WL 1889007 (Mass. Apr. 16, 2020) ...................................................... 11
Conner v. Donnelly,
42 F.3d 220 (4th Cir. 1994) ....................................................................................................... 12
Cooksey v. Futrell,
721 F.3d 226 (4th Cir. 2013) ..................................................................................................... 13
Davison v. Randall,
912 F.3d 666 (4th Cir. 2019) ..................................................................................................... 13
Dep’t of Commerce v. New York,
139 S. Ct. 2551 (2019) .............................................................................................................. 14
Donohoe v. Duling,
465 F.2d 196 (4th Cir. 1972) ..................................................................................................... 16
ii
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 4 of 25
Florida v. Riley,
488 U.S. 445 (1989) .................................................................................................................... 2
Giovani Carandola, Ltd. v. Bason,
303 F.3d 507 (4th Cir. 2002) ..................................................................................................... 18
Hassan v. City of New York,
804 F.3d 277 (3d Cir. 2015) ...................................................................................................... 15
Kyllo v. United States,
533 U.S. 27 (2001) ...................................................................................................................... 7
Laird v. Tatum,
408 U.S. 1 (1972) ................................................................................................................ 15, 16
Local 1814, Int’l Longshoremen’s Ass’n, AFL-CIO v. Waterfront Comm’n of N.Y. Harbor,
667 F.2d 267 (2d Cir. 1981) ...................................................................................................... 15
Mills v. D.C.,
571 F.3d 1304 (D.C. Cir. 2009)................................................................................................. 17
Monsanto Co. v. Geertson Seed Farms,
561 U.S. 139 (2010) .................................................................................................................. 14
Rodriguez v. Robbins,
715 F.3d 1127 (9th Cir. 2013) ................................................................................................... 18
Smith v. Maryland,
442 U.S. 735 (1979) .................................................................................................................. 10
State v. Muhammad,
451 P.3d 1060 (Wash. 2019) ....................................................................................................... 5
Susan B. Anthony List v. Driehaus,
573 U.S. 149 (2014) .................................................................................................................. 12
Tatum v. Laird,
444 F.2d 947 (D.C. Cir. 1971)................................................................................................... 15
United States v. Carpenter,
819 F.3d 880 (6th Cir. 2016) ....................................................................................................... 8
United States v. Gaskins,
690 F.3d 569 (D.C. Cir. 2012)..................................................................................................... 6
iii
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 5 of 25
United States v. Gramlich,
551 F.2d 1359 (5th Cir. 1977) ..................................................................................................... 6
United States v. Johnson,
480 F. App’x 835 (6th Cir. 2012) ................................................................................................ 6
United States v. Jones,
565 U.S. 400 (2012) ............................................................................................................ 3, 4, 6
United States v. Karo,
468 U.S. 705 (1984) .................................................................................................................... 8
United States v. Knotts,
460 U.S. 276 (1983) .................................................................................................................... 3
United States v. Moore-Bush,
381 F. Supp. 3d 139 (D. Mass. 2019).......................................................................................... 6
Wikimedia Found. v. NSA,
857 F.3d 193 (4th Cir. 2017) ..................................................................................................... 14
WV Ass’n of Club Owners & Fraternal Servs., Inc. v. Musgrave,
553 F.3d 292 (4th Cir. 2009) ..................................................................................................... 17
Young v. Owens,
577 F. App’x 410 (6th Cir. 2014) ................................................................................................ 6
Statutes
42 U.S.C. § 1983 ............................................................................................................................. 9
Other Authorities
Br. of United States, United States v. Carpenter
(No. 16-402), 2017 WL 4311113 (Sept. 25, 2017) .................................................................... 6
Jay Stanley, ACLU, The Dawn of Robot Surveillance: AI, Video Analytics, and Privacy
(June 2019) ................................................................................................................................. 8
Jay Stanley, Baltimore Aerial Surveillance Program Retained Data Despite 45-Day Privacy
Policy Limit, ACLU Free Future Blog (Oct. 25, 2016) ............................................................... 9
iv
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 6 of 25
INTRODUCTION
The BPD offers a handful of arguments in defense of the constitutionality of its wide-area
aerial surveillance program, but none of them defeat Plaintiffs’ showing that they are entitled to
an injunction. The BPD contends that its surveillance is no different—less intrusive, even—than
the aerial surveillance allowed by the Supreme Court in cases involving fleeting and targeted
observations without advanced equipment. It argues that other Supreme Court cases have
established that no one enjoys a reasonable expectation of privacy in any of their public
movements. And it asserts that the Supreme Court’s decision in Carpenter v. United States, 138
S. Ct. 2206 (2018), has nothing to say about those cases, or the BPD’s system, either. None of
that is correct. Indeed, it is not Plaintiffs’ reading of Carpenter that is expansive—it is the BPD’s
program.
The BPD has also challenged Plaintiffs’ standing under both the Fourth and First
Amendments, but its ongoing, long-term apprehension of information about their whereabouts
clearly suffices as an Article III injury. That injury will inflict irreparable harm on Plaintiffs, and
the balance of equities and the public interest both favor Plaintiffs’ requested injunction.
For the reasons laid out in Plaintiffs’ earlier brief and those that follow, the Court should
stop this program.
ARGUMENT
I. The BPD’s wide-area aerial surveillance system goes far beyond the surveillance
approved in decades-old Supreme Court cases, and it is unconstitutional.
The BPD rests the legal defense of its mass surveillance program on three pillars, none of
which can bear the weight.
First, the BPD maintains that under several 1980s Supreme Court cases, “[a]erial
photography and surveillance is not a search” under the Fourth Amendment. Defs.’ Br. 12; see
1
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 7 of 25
id. at 12–14 (discussing California v. Ciraolo, 476 U.S. 207 (1986); Dow Chemical Co. v. United
States, 476 U.S. 227 (1986); and Florida v. Riley, 488 U.S. 445 (1989)). Plaintiffs have already
explained why those cases do not support the BPD’s proposition, or bless its program: they
involved targeted, transitory, short-term aerial observations of single targets with basic
equipment or the naked eye. See Pls.’ Br. 15–17. Still, the BPD insists that those cases
“squarely” reach the widespread, persistent, long-term surveillance they intend to deploy over
Baltimore. Defs.’ Br. 14.
They don’t. The BPD’s surveillance is not “far less intrusive” than the surveillance in
those cases. Id. It is true that the simple observations authorized in those cases included views of
private or semi-private areas. But the same is true of the BPD’s program, which will capture 90
percent of the city, including yards and curtilage. See Pls.’ Br. 6, 16 n.46; see also Ciraolo, 476
U.S. at 214 (explaining that surveillance using “future electronic developments” would pose a far
different case than a passing aerial observation from navigable airspace with the naked eye
(quotation marks omitted)). Moreover, the BPD’s claim that, unlike in those prior cases, it will
not be engaging in surveillance of “specific, targeted, and identified individuals and/or
properties” or “us[ing it] to track movements of specific individuals or vehicles,” Defs.’ Br. 14,
is both false and beside the point. It is false because capturing such movements is the program’s
explicit goal and means of operation. See Pls.’ Br. 6–9. And it is irrelevant because none of those
cases involved tracking, over time, of anyone or anything at all; they dealt with fleeting
observations of static geographic locations.
Second, the BPD suggests that the Supreme Court has endorsed a “general axiom” that
“[o]bservation of public movements is not a search” under the Fourth Amendment. Defs.’ Br. 14;
2
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 8 of 25
see id. at 14–16 (discussing United States v. Jones, 565 U.S. 400 (2012); United States v. Knotts,
460 U.S. 276 (1983)). But even before Carpenter, it wasn’t so.
In Knotts, police warrantlessly tracked a criminal suspect’s transport of a canister of a
chemical used to make illicit drugs, using both visual surveillance and a beeper hidden inside the
canister. See 460 U.S. at 278–79. In upholding the surveillance, the Court explained its view that
“[a] person travelling in an automobile on public thoroughfares has no reasonable expectation of
privacy in his movements from one place to another.” Id. at 281. But that conclusion was
explicitly and narrowly cabined—it applied only to movements “from one place to another,” id.,
during what the Carpenter Court later characterized as “a discrete ‘automotive journey,’” 138 S.
Ct. at 2215 (quoting Knotts, 460 U.S. at 285); see id. at 2220 (“[T]his case is not about ‘using a
phone’ or a person’s movement at a particular time.” (emphasis added)). And the Knotts Court
foresaw the problem addressed in Jones (and, later, Carpenter), warning that if law enforcement
ever did manage, in the distant future, to implement “dragnet type law enforcement practices,”
there would be “time enough then to determine whether different constitutional principles”
applied. 460 U.S. at 284.1
Thirty years later, in Jones, that time finally arrived—and the Court “found that different
principles did indeed apply.” Carpenter, 138 S. Ct. at 2215. While the Jones Court’s majority
opinion relied on a property-based theory to conclude that the police’s use of a GPS device to
track a vehicle for 28 days was a Fourth Amendment search, five Justices agreed in concurring
opinions that longer-term location tracking “‘impinges on expectations of privacy’—regardless
whether those movements were disclosed to the thansen@example.com.” Id. (quoting Jones, 565 U.S. at
1
While Plaintiffs highlighted this critical observation from Knotts, see Pls.’ Br. 14, the BPD’s
brief ignores it.
3
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 9 of 25
430 (op. of Alito, J., concurring), and citing id. at 415 (op. of Sotomayor, J., concurring)). So
when the BPD insists that, “[i]n essence, the Knotts Court held that public visibility eliminates
the reasonable expectation of privacy,” or that “[t]he visibility of the object is dispositive as to
whether a ‘search’ occurred,” Defs.’ Br. 15, it is overstating things considerably.
Third, the BPD argues that the logic of Carpenter does not reach its wide-area aerial
surveillance program. See id. at 16–21. Again, it is wrong.
The BPD acknowledges that the Carpenter Court based its holding—that the
government’s warrantless acquisition of a compendium of cell-site location information was an
unreasonable Fourth Amendment “search”—on its concern about “the breadth of the information
the government could obtain about an individual’s movement for a long period of time.” Id. at
16. But the BPD still says its program is different.
For one, the BPD argues that the location information its program will collect about
every Baltimorean is so fleeting that Carpenter doesn’t reach it. See id. at 18. But that attempt to
paper over the gravity of Defendants’ proposed surveillance is not credible, either factually or
legally. The BPD does not dispute that its cameras will capture a 45-day rolling log of all
Baltimoreans’ movements, and it acknowledges that its planes will scan the ground for 12 hours
a day. See id. at 5, 18. While Defendants might prefer that this Court focus on the daily 12-hour
window, the reality is that the BPD’s planes will be aloft for more than 80 hours each week,
weather permitting, and that the BPD will have 45 days’ worth of aggregated data at a time. This
time frame plainly exceeds the 7 days’ worth of location information at issue in Carpenter.
4
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 10 of 25
While the program may not literally be round-the-clock surveillance, people do not reasonably
expect constant monitoring during daylight hours with good weather, either.2
Of course, the record in Carpenter dictated the focus of its holding. There, two batches of
location information were at issue—127 days obtained from one source, and seven days
requested from another.3 See 138 S. Ct. at 2217 & n.3. In holding that collecting seven days of
location data is a search, the Court did not hold, or even suggest, that collection of location data
over a shorter period shorter would evade Fourth Amendment protection. Indeed, multiple
courts, before and after Carpenter, have held that much shorter collections of location
information deserve protection. See, e.g., State v. Muhammad, 451 P.3d 1060, 1072–73 (Wash.
2019) (holding that a single ping of cell-phone location information is a Fourth Amendment
search requiring a warrant); Commonwealth v. Almonor, 120 N.E.3d 1183, 1197 (Mass. 2019)
(same); see also, e.g., Commonwealth v. Estabrook, 38 N.E.3d 231, 237 & n.11 (Mass. 2015)
(holding, pre-Carpenter, that police could acquire up to only six hours of historical cell-site
location information without triggering a search under the state analogue to the Fourth
Amendment).4 Those rulings make sense. As Justice Sotomayor pointed out in Jones, “even
2
There is at least some factual question whether the BPD’s planes will end up flying more than
12 hours per day, thansen@example.com. Ross McNutt, the President of Persistent Surveillance
Systems, suggests as much. See Defs.’ Br. 3 (citing Declaration of Ross T. McNutt, PhD.
(“McNut Decl.”) ¶ 5 (attached as Exhibit A to Defs.’ Br.)). But that is not a limitation in the
BPD’s contract, which does include a representation that the BPD’s cameras are “sensitive
enough to capture images at night with ambient City lighting.” BPD/PSS thansen@example.com.
3
But see Carpenter,138 S. Ct. at 2266–67 (Gorsuch, J., dissenting) (pointing out that the
government only actually received, and viewed, two days of the defendant’s location information
from the second source).
4
The BPD has argued that it is relevant that under the contract, the BPD’s surveillance system is
not authorized to engage in real-time surveillance, or even capable of doing so. See Defs.’ Br. 4.
But the Carpenter Court emphasized that the use of location tracking to amass reams of
historical data is especially problematic, because its function is to generate “retrospective” data
5
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 11 of 25
short-term monitoring” of location using advanced technologies implicates society’s reasonable
expectations of privacy by threatening to reveal “a wealth of detail about . . . familial, political,
professional, religious, and sexual associations” and thereby “alter[ing] the relationship between
citizen and government in a way that is inimical to democratic society.” 565 U.S. at 415–16
(Sotomayor, J., concurring).
As a result, the BPD’s arguments that “shorter collection” (by which it means 12 hours
straight, with each block of time considered separately) “is permissible,” Defs.’ Br. 18, and that
its program “will not, indeed cannot, capture continuous activities of individuals,” id. at 20
(citing McNutt Decl. ¶ 14), are, constitutionally speaking, beside the point. As are the pre-
Carpenter cases holding that weeks of different types of surveillance were permissible. See id. at
18–19. In Carpenter, the government made the same argument, using the same cases. See Br. of
United States at *56–57, United States v. Carpenter (No. 16-402), 2017 WL 4311113 (Sept. 25,
2017). The Court was not persuaded.5
that can be indefinitely mined by law enforcement—granting it access to a virtual time machine.
138 S. Ct. at 2218.
5
Only one of the cases the BPD cites actually involved anything close to longer-term, round-the-
clock surveillance; and even there, it is impossible to tell from the opinion in the case the extent
to which the suspect was continuously tailed. See United States v. Gramlich, 551 F.2d 1359 (5th
Cir. 1977). The BPD’s other examples involved surveillance of one or more stationary
locations—an exercise that is far less invasive and resource-intensive than tailing a suspect on
the move. See Young v. Owens, 577 F. App’x 410, 412 (6th Cir. 2014) (store); United States v.
Gaskins, 690 F.3d 569, 574 (D.C. Cir. 2012) (multiple static locations); United States v. Johnson,
480 F. App’x 835, 837 (6th Cir. 2012) (residence). And, as Plaintiffs have noted, the logic of
cases approving extended surveillance of single locations, through pole cameras or otherwise,
has been cast into serious doubt by Carpenter. See Pls.’ Br. 16 n.46 (citing United States v.
Moore-Bush, 381 F. Supp. 3d 139, 149 (D. Mass. 2019) (holding that a “home occupant would
not reasonably expect” eight months of surveillance with a pole camera); see also Carpenter,
138 S. Ct. at 2219 (“Unlike the nosy neighbor who keeps an eye on comings and goings,
[advanced surveillance technologies] are ever alert, and their memory is nearly infallible.”).
6
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 12 of 25
The BPD also insists that its program is untouched by Carpenter because it captures only
“dots,” Defs.’ Br. 1—by which it means people—which are not identifiable in a way the Fourth
Amendment cares about. As Plaintiffs have pointed out, the Carpenter Court rejected a similar
argument. See Pls.’ Br. 18. Unlike the information the BPD plans to log, the location information
at issue in Carpenter was blunt, rather than precise, requiring analysts to draw inferences about a
suspect’s precise location and activities. See id. at 13 n.43. Nor was the information in Carpenter
automatically associated with an identifiable person; instead, it was tied to a phone number. The
fact that an analyst may need to consult other sources of information to derive a person’s identity
is not an investigatory step that “insulates” a search under the Fourth Amendment. Carpenter,
138 S. Ct. at 2218 (quoting Kyllo v. United States, 533 U.S. 27, 36 (2001)); see Pls.’ Br. 18.6
And besides, the Supreme Court has now made repeatedly clear that courts evaluating the uses of
surveillance technologies against the Fourth Amendment cannot close their eyes to technological
developments that will render those capabilities quaint. See id. at 2218 (citing Kyllo, 533 U.S. at
34–36). As Plaintiffs have pointed out, more advanced technologies are already available from
the BPD’s private partner in this surveillance program, and are just a tweak of contractual
language away from becoming reality. See Pls.’ Br. 18–19.
Relatedly, the BPD argues that its program will not create an “easily prepared
individually identifiable record,” Defs.’ Br. 18, and that it will not be “possible to stitch imagery
together to track the same subject day after day,” id. at 4–5 (citing McNutt Decl. ¶ 14). In order
to do that, it says, analysts would have to spend hours analyzing footage. But even if this process
6
See also Pls.’ Br. 17–18 (discussing study finding that just four location points can be used to
specifically identify 95 percent of individuals).
7
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 13 of 25
is—for now, at least, given the rapid spread of video analytics software7—somewhat more
resource-intensive than what was at issue in Carpenter, that process was not automated, either;
law enforcement could not simply pull up a Google Map of the suspects’ whereabouts using cell-
site location information alone. See United States v. Carpenter, 819 F.3d 880, 885 (6th Cir.
2016) (describing investigator’s steps to render location records meaningful). Moreover, as the
BPD’s contract describes, a central purpose of its wide-area aerial surveillance is to enable
identification through the use of its other surveillance technologies, like automatic license-plate
readers and ground security cameras. See Pls.’ Br. 7–8, 18. And, of course, people who return
home at night and leave again in the morning will have put—by virtue of simply existing in the
day-to-day grind—their specific movements at the BPD’s fingertips.
The BPD’s other attempts to cast Carpenter aside also fail. The BPD argues that its
surveillance will not capture Baltimoreans’ movement inside private spaces, see Defs.’ Br. 17–
18—but while certain Supreme Court cases have highlighted the Fourth Amendment’s
heightened protections inside the home, see, e.g., United States v. Karo, 468 U.S. 705 (1984)
(not cited at all in Carpenter), the Carpenter Court was focused not on private but public space,
and “a person’s expectation of privacy in his physical location and movements” generally. 138 S.
Ct. at 2215.8 Next, the BPD maintains that the location information at issue in Carpenter was
7
See Jay Stanley, ACLU, The Dawn of Robot Surveillance: AI, Video Analytics, and Privacy
(June 2019), https://www.aclu.org/sites/default/files/field_document/061119-robot_
surveillance.pdf (describing how video analytics capabilities can be used, among other things, to
automatically alert authorities based on often-unexplainable algorithmic decision making).
8
The BPD’s argument on this point also ignores that its surveillance system will undoubtedly
track activities inside of private yards or other areas of curtilage protected by the Fourth
Amendment, in addition to Baltimoreans’ movements to such private spaces. See Pls.’ Br. 16
n.46; see also Karo, 468 U.S. at 716 (“We cannot accept the Government’s contention that it
should be completely free from the constraints of the Fourth Amendment to determine by means
of an electronic device, without a warrant and without probable cause or reasonable suspicion,
8
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 14 of 25
“unique[]” because cell phones are “omnipresent.” Defs.’ Br. 17. But the Carpenter Court’s
observation that the use of a cell phone is so “indispensable to participation in modern society,”
138 S. Ct. at 2220, applies with even greater force to the ability to simply move about in public.
See Pls.’ Br. 13.
And the BPD’s argument that it, as opposed to its private partner, only receives some
data, rather than the entire 45-day log, is immaterial twice over. First, the initial collection of this
information is “state action” attributable to Defendants under 42 U.S.C. § 1983, see Pls.’ Br. 11
n.41, a point the BPD does not expressly dispute. And second, the procedures that govern how
the BPD receives and handles location information are not relevant to whether a “search” has
occurred, but only to whether that search is reasonable under the Fourth Amendment.9 (As
Plaintiffs have explained, the AIR program’s collection is not. See id. at 19–28.10)
whether a particular article—or a person, for that matter—is in an individual’s home at a
particular time.” (emphases added)).
9
Curiously, Mr. McNutt claims in his declaration that the ACLU, one of the organizations
representing Plaintiffs in this case, has provided “input” that factored into the privacy policies
reflected in the BPD’s contract. See McNutt Decl. ¶ 18. That is a claim Mr. McNutt has been
making for years, and it is simply untrue. See Jay Stanley, Baltimore Aerial Surveillance
Program Retained Data Despite 45-Day Privacy Policy Limit, ACLU Free Future Blog (Oct. 25,
2016), https://www.aclu.org/blog/free-future/baltimore-aerial-surveillance-program-retained-
data-despite-45-day-privacy-policy (explaining that Mr. McNutt’s claim that the “State and
National ACLU” helped “develop” his privacy policies “could [not] be further from the truth”).
As the ACLU’s Mr. Stanley writes, “McNutt asked to meet with me, I agreed, and told him what
I thought the insoluble privacy problems were with wide-area surveillance. He may have taken
account of my feedback in formulating his policy, and we can’t stop him from citing that
feedback in its formation, but nobody should think that we are okay with this approach to law
enforcement.” Id.
10
The BPD does not argue that its warrantless wide-area aerial surveillance program should be
analyzed under the special-needs doctrine. See Pls. Br. 19–24. As a result, the program is per se
unconstitutional if the Court agrees that the bulk collection of Baltimoreans’ location information
is a Fourth Amendment “search.”
While the BPD floats the possibility that it might, after all, end up asking for warrants
before accessing some of its evidence packages as part of this program, see Defs.’ Br. 23, it does
so notwithstanding the absence of a single contract term or prior public assurance to that effect.
9
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 15 of 25
Finally, the BPD effectively says privacy in public is already a dead letter in Baltimore
City. See Defs.’ Br. 21. Plaintiffs dispute that. See, e.g., LBS Decl. ¶¶ 10–16; Bridgeford Decl.
¶¶ 10–16; James Decl. ¶¶ 5–8. Moreover, the Carpenter Court understood that other surveillance
of public space was in effect, yet it still ruled as it did. In any event, the Fourth Amendment’s
protections cannot be breezily cast aside by claiming that an onslaught of privacy invasions
renders public expectations of privacy inert.11
In the end, though the BPD likens its program to surveillance that law enforcement was
routinely conducting forty years ago, its system is far different from anything that has ever come
before. And it is hardly an “expansive[]” reach, Defs.’ Br. 16, to understand the Supreme Court’s
digital-privacy decisions over the past decade as forming a bulwark against precisely this type of
comprehensive mass surveillance system. Just as Chief Justice Roberts warned in Carpenter, this
kind of surveillance “gives police access to a category of information otherwise unknowable.”
138 S. Ct. at 2218. Far from providing a mere “technological assist,” Defs.’ Br. 16, it removes
practical checks that have ensured Fourth Amendment protection of individual privacy since the
Founding, and would open the door to “a too permeating police surveillance.” Carpenter, 138 S.
Ct. at 2214 (quotation marks omitted). That is why the BPD is wrong to suggest that “[i]f it
would be constitutionally permissible for a law enforcement officer to surveil an individual
during daylight hours on foot, then it must too be constitutional for the officer to do so using the
AIR program.” Br. 16. The BPD’s system does not track just one person; it tracks everyone,
11
Cf. Smith v. Maryland, 442 U.S. 735, 740 n.5 (1979) (“For example, if the Government were
suddenly to announce on nationwide television that all homes henceforth would be subject to
warrantless entry, individuals thereafter might not in fact entertain any actual expectation [of]
privacy regarding their homes, papers, and effects. . . . [But i]n such circumstances, where an
individual’s subjective expectations had been ‘conditioned’ by influences alien to well-
recognized Fourth Amendment freedoms, those subjective expectations obviously could play no
meaningful role in ascertaining what the scope of Fourth Amendment protection was.”).
10
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 16 of 25
efficiently and comprehensively. See Commonwealth v. McCarthy, No. SJC-12750, 2020 WL
1889007, at *5 (Mass. Apr. 16, 2020) (approving of limited surveillance by automatic license-
plate readers, but warning that “we imagine Massachusetts residents would object were the
police continuously to track every person’s public movements by traditional surveillance
methods, absent any suspicion at all”).
The public can decide for itself whether the BPD’s surveillance system is sufficiently
“dystopian” or “Orwellian” to earn those labels, or not. Defs.’ Br. 16, 9. What matters here, and
to this Court, is that it is prohibited by the Fourth Amendment.
II. Plaintiffs have standing to challenge the BPD’s collection of their location
information.
A. Plaintiffs have standing to raise their Fourth Amendment claim.
The BPD argues that Plaintiffs lack standing to bring their Fourth Amendment claim
because “they have not shown that data capturing their individual movements will be reviewed
by BPD, or that BPD would have any way of identifying them specifically.” Defs.’ Br. 22.
Plaintiffs have already addressed the latter argument above. As to the former, the BPD ignores
Plaintiffs’ central Fourth Amendment claim: the collection of Plaintiffs’ location data is a Fourth
Amendment “search.” It is also a distinct Article III injury, regardless of whether this Court
determines that the collection violates the Fourth Amendment on the merits. See, e.g., ACLU v.
Clapper, 785 F.3d 787, 801–03 (2d Cir. 2015) (holding that plaintiffs had standing under Fourth
and First Amendment to challenge the National Security Agency’s bulk collection of telephone
records, even absent subsequent government review of those records).
Moreover, that the BPD’s private partner will initially collect this data is not important,
as that collection will plainly be attributable to the BPD under Section 1983. See Pls.’ Br. 11
n.40. The AIR program involves the explicit delegation and direction of policing functions to
11
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 17 of 25
PSS through a contract signed by a final policymaker—the Baltimore Police Commissioner. See
id. (citing cases). As a result, there is an incredibly “close nexus” between PSS and the BPD, and
PSS is “exercis[ing] powers that are traditionally the exclusive prerogative of the state.” Conner
v. Donnelly, 42 F.3d 220, 224 (4th Cir. 1994) (quotation marks omitted); see also Blum v.
Yaretsky, 457 U.S. 991, 1003–05 (1982) (explaining that the state can be held “responsible for a
private decision” where it has provided “significant encouragement” to the private actor). The
BPD has made no argument to the contrary. Accordingly, PSS’s activities through the AIR
program are attributable to Defendants and constitute state action under Section 1983.
The BPD also errs in contending that Carpenter helps its standing argument because “the
Court did not prohibit the cell phone providers from collecting CSLI.” Defs.’ Br. at 22. The cell
phone providers in Carpenter were not operating as extensions of the government; they had not
signed contracts through which the government directed them to collect all cell phone users’
location information. Indeed, that made Carpenter a much more difficult case than this one.
B. Plaintiffs have standing to raise their First Amendment claim.
The BPD does not dispute the merits of Plaintiffs’ First Amendment claim, effectively
conceding the likelihood of its success. See Defs.’ Br. 23–27. Rather, the BPD’s only argument
is that Plaintiffs lack standing to challenge the AIR program’s violation of their First
Amendment rights. The BPD is mistaken.
To establish standing to redress harm under the First Amendment, a plaintiff must show
the ordinary elements required by Article III: injury-in-fact, a sufficient causal connection
between the injury and the conduct complained of, and a likelihood that the injury will be
redressed by a favorable decision. See Susan B. Anthony List v. Driehaus, 573 U.S. 149, 157–58
(2014). But several circuits, including the Fourth, have “held that ‘standing requirements are
12
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 18 of 25
somewhat relaxed in First Amendment cases,’ particularly regarding the injury-in-fact
requirement.” Davison v. Randall, 912 F.3d 666, 678 (4th Cir. 2019) (quoting Cooksey v. Futrell,
721 F.3d 226, 235 (4th Cir. 2013)). The sole dispute here is whether Plaintiffs are likely to
succeed in establishing injury-in-fact to support their First Amendment claim. For the reasons
below, it is plain that Plaintiffs have established cognizable injuries.
First, by collecting information about virtually all of Plaintiffs’ associations through the
AIR program, the BPD’s program will impair Plaintiffs’ First Amendment rights. This collection
of sensitive information is an injury sufficient to establish standing. See, e.g., ACLU v. Clapper,
785 F.3d at 802 (holding that the government’s mass collection of plaintiffs’ metadata implicated
their “interests in keeping their associations and contacts private,” thus conferring standing to
assert a First Amendment violation). In the course of their work and daily lives, Plaintiffs meet
with myriad groups and individuals, and many of these associations are private and sensitive.
LBS Decl. ¶ 13; Bridgeford Decl. ¶¶ 12, 15; James Decl. ¶ 8. The AIR program substantially
impairs Plaintiffs’ First Amendment rights because it exposes virtually all of their associations to
government monitoring and scrutiny.
Second, if the AIR program is allowed to proceed, Plaintiffs will be forced to take several
measures to protect the privacy of their associations from the BPD’s surveillance. For example,
LBS will “alter[] the means by which [they] travel” and the “timing of certain meetings,” thus
diverting resources from other organizational work. LBS Decl. ¶ 13. Similarly, Ms. Bridgeford
will “shift most of [her] outreach and conversations to be over the phone, over social media, or
over email, which will severely impact the nature and quality of the inherently personal and
sensitive work” that she does through Ceasefire. Bridgeford Decl. ¶ 15. It is well-established that
these harms confer standing. See, e.g., Dep’t of Commerce v. New York, 139 S. Ct. 2551, 2565
13
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 19 of 25
(2019) (recognizing that an organization’s “diversion of resources” in response to a defendant’s
actions is an injury-in-fact sufficient for standing); Wikimedia Found. v. NSA, 857 F.3d 193, 211
(4th Cir. 2017) (holding that where an organization alters its means of communication in
response to the threat of surveillance, it suffers a First Amendment injury).
Citing Clapper v. Amnesty International USA, 568 U.S. 398 (2013), the BPD contends
that protective measures taken in response to fear of surveillance are “categorically insufficient”
to establish standing for a First Amendment claim. Defs.’ Br. 26. But Amnesty stands for no such
thing. In fact, in Amnesty, the Supreme Court expressly recognized that a plaintiff may establish
standing by showing that it took protective measures to mitigate the harms of government
surveillance. See 568 U.S. at 414 n.5. Although the plaintiffs in Amnesty had taken such steps,
the Court concluded that their measures were insufficient because the risk of surveillance there
was an entirely “hypothetical future harm.” Id. at 401. Here, unlike in Amnesty, the AIR
program’s mass collection is in no way “hypothetical”—it is, in fact, imminent—and it is
undisputed that Plaintiffs will be subject to it. Accordingly, Plaintiffs’ protective measures are
sufficient to establish standing for their First Amendment claim. See id. at 414 n.5; Monsanto
Co. v. Geertson Seed Farms, 561 U.S. 139, 154–55 (2010).12
Third, the BPD’s program will chill Plaintiffs and the individuals they associate with,
burdening Plaintiffs’ political advocacy and community engagement. LBS Decl. ¶¶ 12–16;
Bridgeford Decl. ¶¶ 11–13, 15–16; James Decl. ¶¶ 5–8. Defendants assert that chilling effects
cannot serve as a basis for Plaintiffs’ standing, Defs.’ Br. 25, but that is incorrect, see, e.g.,
Wikimedia, 857 F.3d at 211 (citing ACLU v. Clapper, 785 F.3d at 802) (recognizing that where
12
Moreover, Plaintiffs Bridgeford and James have established a substantial risk that the AIR
program will develop individualized reports on them and their activities. See Bridgeford Decl.
¶ 10; James Decl. ¶ 6.
14
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 20 of 25
the government collects a plaintiff’s information, a “chilling effect” is created at that point,
providing a basis for First Amendment standing); see also, e.g., Local 1814, Int’l
Longshoremen’s Ass’n, AFL-CIO v. Waterfront Comm’n of N.Y. Harbor, 667 F.2d 267, 270–72
(2d Cir. 1981) (recognizing that the government’s collection of information about associational
information results in First Amendment chill).
Contrary to the BPD’s claim, Defs.’ Br. 25, Plaintiffs’ specific allegations of chill are
nothing like the allegations rejected by the Court in Laird v. Tatum, 408 U.S. 1 (1972), in which
the plaintiffs challenged an Army surveillance program on First Amendment grounds. In Laird,
the plaintiffs alleged that they were “chilled by the mere existence, without more, of a
governmental investigative and data-gathering activity.” Id. at 10 (emphasis added). Notably, the
plaintiffs presented “no evidence of illegal or unlawful surveillance activities,” id. at 9 (quoting
Tatum v. Laird, 444 F.2d 947, 953 (D.C. Cir. 1971))—presumably because the “principal sources
of information” for this surveillance program were “the news media and publications in general
circulation,” id. at 6. The plaintiffs also failed to explain the “precise connection between the
mere existence of the challenged system and their own alleged chill,” and “cast considerable
doubt on whether they themselves are in fact suffering from any such chill.” Id. at 13 n.7. In
holding that the plaintiffs had failed to establish standing, the Laird Court emphasized that its
conclusion was “a narrow one,” based on the record before it. Id. at 15.
Unlike the plaintiffs in Laird, Plaintiffs here have not merely alleged that the BPD’s
program chills their First Amendment rights; rather, they have presented extensive “evidence of
illegal or unlawful surveillance activities.” Id. at 9; see supra Part I; see also Hassan v. City of
New York, 804 F.3d 277, 292 (3d Cir. 2015) (holding that Laird was inapplicable where
plaintiffs challenged surveillance on both due process and First Amendment grounds). Moreover,
15
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 21 of 25
the harms to Plaintiffs here flow from more than the “mere existence” of the AIR program,
Laird, 408 U.S. at 10; they flow from the certainty that Plaintiffs and their associations will in
fact be subject to this comprehensive surveillance, see Amnesty, 568 U.S. at 417 n.7. Unlike in
Laird, Plaintiffs have explained why the government’s collection of information about them and
their associations is imminent, and why this collection will objectively chill and burden their
First Amendment activity. LBS Decl. ¶¶ 12–16; Bridgeford Decl. ¶¶ 10–16; James Decl. ¶¶ 5–8.
This chill is due in part to the breadth and intrusiveness of the BPD’s program, which goes far
beyond the Army’s targeted collection of news articles. Laird, 408 U.S. at 6.13
The BPD’s reliance on Donohoe v. Duling, 465 F.2d 196 (4th Cir. 1972), is similarly
misplaced. See Defs.’ Br. 26. In Donohoe, as in Laird, the plaintiffs claimed that the exercise of
their First Amendment rights was “chilled by the mere existence, without more,” of a
government surveillance activity. 465 F.2d at 202 (quoting Laird, 408 U.S. at 10). Moreover, the
defendants in Donohoe “denied that any of the plaintiffs had been inhibited in the exercise of
their First Amendment rights by any action on their part; and no plaintiff testified to the
contrary.” Id. at 199. Here, in contrast, Plaintiffs have attested to concrete and specific First
Amendment injuries flowing from the BPD’s program. The BPD has not denied the existence of
these injuries or their traceability to the program; it has only challenged their legal sufficiency.
See Defs.’ Br. 23–27. For the reasons above, the law is clear that these injuries—the program’s
collection of Plaintiffs’ private associational information, the Plaintiffs’ protective measures, and
the concrete chilling effects—are each plainly sufficient to establish Plaintiffs’ standing.
13
Defendants also err in suggesting that Plaintiffs must establish that their chill is the result of
“regulat[ion]” by the BPD. Defs.’ Br. 24. No such requirement exists. See Wikimedia, 857 F.3d
at 211 (holding that a plaintiff challenging government surveillance—which did not involve
direct regulation of the plaintiff—adequately alleged First Amendment chill).
16
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 22 of 25
III. Plaintiffs will suffer irreparable harm as a result of the BPD’s wide-area aerial
surveillance system, and the balance of equities and public interest weigh in their
favor.
The BPD is also wrong when it argues that Plaintiffs are not entitled to an injunction of
the BPD’s program.
First, if permitted to proceed, the BPD’s AIR program will cause irreparable harm to
Plaintiffs. The BPD’s system and collection of images amounts to continuous, warrantless mass
surveillance, which violates Plaintiffs’ Fourth and First Amendment rights. See supra Parts I–II.
This violation of constitutional rights establishes manifest, irreparable harm. See WV Ass’n of
Club Owners & Fraternal Servs., Inc. v. Musgrave, 553 F.3d 292, 298 (4th Cir. 2009); Mills v.
District of Columbia, 571 F.3d 1304, 1312 (D.C. Cir. 2009).
Second, the balance of equities weighs heavily in favor of an injunction. Plaintiffs will
suffer significant, irreparable harm in the absence of an injunction as the BPD compiles video of
their daily movements. The BPD, on the other hand, faces little if any injury from its issuance.
The BPD claims that it will be injured by the possibility that the “window of this opportunity” to
test the AIR Program with philanthropic support may close. Defs.’ Br. 30. The assertion that
funding will not be available for the BPD’s wide-area aerial surveillance program after this Court
has had the opportunity to evaluate the Program’s constitutionality is entirely speculative, and it
is not supported by any evidence in the record.14 Furthermore, even if that claim proves true, the
loss of the ability to test a likely unconstitutional program does not tip the balance of equities in
14
The BPD also argues that data collected while Baltimoreans are under orders to stay at home,
due to the COVID-19 pandemic, will meaningfully inform its decision whether to make the AIR
program a permanent part of city life because crime has continued despite those orders. See
Defs.’ Br. 6 n.6. But that argument conflates a hypothetical showing that the program reduced
crime during a period of social distancing with a showing that the program reduces crime in
ordinary social circumstances. See Pls.’ Br. 34.
17
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 23 of 25
Defendants’ favor. The Fourth Circuit has recognized that government officials are not harmed
by the issuance of a preliminary injunction that prevents the state from implementing a likely
unconstitutional practice. See Centro Tepeyac v. Montgomery Cty., 722 F.3d 184, 191 (4th Cir.
2013) (quoting Giovani Carandola, Ltd. v. Bason, 303 F.3d 507, 521 (4th Cir. 2002)); see also
Rodriguez v. Robbins, 715 F.3d 1127, 1145 (9th Cir. 2013).
Finally, preliminarily enjoining the BPD’s wide-area aerial surveillance program is
manifestly in the public interest. Defendants have characterized this final factor as an inquiry
into which party has more accurately understood the wishes of the Baltimore community.
However, as Defendants concede, “[t]he injunctive relief analysis is not a popularity contest.”
Defs.’ Br. 29. The public-interest inquiry is not about whether the majority of Baltimoreans favor
the BPD’s wide-area aerial surveillance program. Instead, it is about whether the public interest
favors granting preliminary injunctive relief until this Court can rule on the constitutionality of
the BPD’s aerial surveillance system. It is undeniably in the public’s interest to have their
constitutional rights protected. See Bason, 303 F.3d at 521 (finding that “upholding
constitutional rights surely serves the public interest”).
CONCLUSION
For the foregoing reasons and those in Plaintiffs’ prior memorandum, this Court should
enjoin Defendants’ AIR program—specifically, by prohibiting the BPD from collecting or
accessing any images of Baltimoreans through wide-area aerial surveillance.
18
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 24 of 25
April 17, 2020 Respectfully submitted,
Brett Max Kaufman* /s/ David R. Rocah
Ashley Gorski* David R. Rocah (Bar No. 27315)
Alexia Ramirez* American Civil Liberties Union Foundation
Nathan Freed Wessler* of Maryland
Ben Wizner* 3600 Clipper Mill Road, Suite 350
American Civil Liberties Union Foundation Baltimore, MD 21211
125 Broad Street, 18th Floor T: (408)248-3688
New York, NY 10004 F: (408)248-3688
T: (408)248-3688 thansen@example.com
F: (408)248-3688
thansen@example.com
thansen@example.com
thansen@example.com
thansen@example.com
thansen@example.com
*
pro hac vice Counsel for Plaintiffs
19
Case 1:20-cv-00929-RDB Document 31 Filed 04/17/20 Page 25 of 25
CERTIFICATE OF SERVICE
I hereby certify that on the 17th day of April, 2020, I electronically filed the foregoing
Plaintiffs’ Reply Memorandum in Support of Their Motion for a Preliminary Injunction with the
clerk of the Court by using the CM/ECF system, which will send a notice of electronic filing.
/s/ David R. Rocah
David R. Rocah (Bar No. 27315)
American Civil Liberties Union Foundation
of Maryland
3600 Clipper Mill Road, Suite 350
Baltimore, MD 21211
T: (408)248-3688
F: (408)248-3688
thansen@example.com
|
943 P.2d 593 (1997)
1997 OK 93
EMPLOYERS MUTUAL CASUALTY COMPANY, as Subrogee of Jannette Embry, Appellant,
v.
James MOSBY, Dennis Childers, and Country Mutual Insurance Co., d/b/a County Companies Insurance Group, Appellees.
No. 85967.
Supreme Court of Oklahoma.
July 8, 1997.
Galen L. Brittingham, Nelson J. Christiansen, Atkinson, Haskins, Nellis, Boudreaux, Phipps & Brittingham, Tulsa, for Appellant, Employers Mutual Casualty Company.
L. Richard Howard, Thomas E. Baker, Daniel, Baker & Howard, Tulsa, for Appellee, James Mosby.
HARGRAVE, Justice.
SUMMARY OF FACTS AND PROCEDURAL HISTORY
¶ 1 On May 16, 1992 Jannette Embry (insured) was involved in an automobile collision with James Mosby (tortfeasor) who was driving a car owned by Dennis Childers (owner). The insured notified both the owner's liability carrier, Country Companies Insurance Group, and the insured's UM carrier, Employers Mutual Casualty Company (insurer). The latter paid the insured $12,000.00 on November 5, 1993 in settlement of her claim for uninsured motorist coverage.
¶ 2 On February 8, 1994 the liability carrier, Country Companies, offered to settle the subrogation claim for the owner's policy limit of $10,000.00. The insurer "accepted" the offer six months later on August 22, 1994, at which time the liability carrier refused to *594 pay because it claimed the two-year statute of limitations had run on the underlying tort claim.
¶ 3 The insurer then brought this action for breach of contract based on the February offer and the August acceptance. The insurer also alleged that the limitations period did not begin to run until November 5, 1993, the day that it paid the insured and acquired its subrogation rights. An estoppel theory was also alleged.
¶ 4 The tortfeasor, owner, and liability carrier moved for dismissal, arguing that the claim was time-barred. The trial court dismissed the action, and the insurer sought reconsideration. The trial court sustained the motion to reconsider. The liability carrier asserted that the insurer's August 22, 1994, acceptance letter was actually a counter-offer because it contained terms and conditions not made in the original offer, and hence no contract was formed, and no breach of contract. The trial court again dismissed the action finding the claim to be time-barred. The insurer appealed.
¶ 5 Insurer, Employers Mutual, argued before the Court of Civil Appeals that the three year statute of limitations for breach of oral contract was applicable and thus, the trial court was in error to dismiss their subrogation action. The Court of Civil Appeals affirmed, holding that "the underlying cause of action . . . . determines the applicable statute of limitations."[1] The court further held that:
Here, the event underlying Employers' cause of action is the automobile accident. Action for negligence must be brought within two years from the date the cause of action accrued. 12 O.S.1991 § 95(3). Appellant did not bring an action within that two year limit.[2]
¶ 6 The dispute on appeal deals with the appropriate statute of limitations regarding a subrogated UM claim. The Court of Civil Appeals opinion in the present matter is in conflict with holding of the Court of Civil Appeals in the unpublished case Northland Insurance Companies v. Nance, (No. 83,084 April 12, 1994). However, the present case is in conformity with the published case of Farmers Insurance Co. v. Estate of Stark., 924 P.2d 798 (Okla.App.1996). [Certiorari Denied] We specifically overrule the Court of Civil Appeals' holding in Northland.
¶ 7 In Northland the Court of Civil Appeals held that a three year statute of limitation would apply under a similar fact pattern. The Court of Civil Appeals cited Uptegraft v. Home Insurance Co., 662 P.2d 681 (Okla. 1983), for the proposition that a UM insurer's obligation to pay under the policy is not dependent on the insured's right to sue the tortfeasor.[3] The Northland court reasoned that the action was one arising from contract, giving the subrogee a three-year period in which to sue, based on a non-written agreement. The Northland court concluded that a subrogated action may be brought, by the party subrogated, against the alleged tortfeasor within three years as an action on an express or implied contract, not in writing. *595 12 O.S.1991 § 95. However, the court reached this conclusion based on the statement: "The subrogation rights of the uninsured motorist carrier are of the conventional sort: it arises, if at all, from the contractual obligation to the insured." Northland v. Nance, (Not for Publication), No. 83,084, at page 4 (Okla.App., April 12, 1994). In Farmers Insurance Co. v. Estate of Stark., 924 P.2d 798 (Okla.App.1996), the Court of Civil Appeals disagreed with the aforementioned statement in Northland v. Nance. The Stark court opined:
[T]his analysis overlooks the fact that the purported tortfeasor was not a party to the insurance contract. The rights between the insurer and its insured arise from contract, but any rights against the tortfeasor, whether those of the insured plaintiff or rights gained by the insurer through subrogation, are not based on contract.
924 moseslee@example.net.
¶ 8 A subrogee does not obtain a longer limitations period based merely on the fact that it did not gain its subrogation rights at the same time that its insured's claim accrued. A subrogee steps into the shoes of the plaintiff "subject to all legal and equitable defenses which the [tortfeasor] may have against the [plaintiff]." Moore v. White, 603 P.2d 1119, 1121 (Okla.1979) See also, Niemeyer v. U.S. Fidelity & Guaranty Co., 789 P.2d 1318, 1322 (Okla.1990). A subrogee acquires no rights greater than those of the party whose claim it has paid. United States v. Munsey Trust Co., 332 U.S. 234, 242, 108 Ct. Cl. 765, 67 S. Ct. 1599, 1603, 91 L. Ed. 2022 (1947).
¶ 9 A claim obtained through subrogation is simply not subject to the normal rule of accrual of a cause of action. The subrogee steps into the shoes of its claimant and takes the claim subject to defenses based on the date of accrual to the claimant. Insurer's claim in the present matter is based upon an automobile accident, an action for negligence. Actions for negligence must be brought within two years from the date the cause of action accrued. 12 O.S.1991 § 95(3)[4]. The cause of action upon which this action is based did not begin to run on November 5, 1993, the date insurer settled its claim with Embry, but began to run on May 16, 1992, the date of the accident. It is immaterial whether Employers either "accepted" or "counter offered." Employers' claim was time barred before August 22, 1994.
CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; ORDER OF THE TRIAL COURT AFFIRMED.
¶ 10 SUMMERS, V.C.J., and HODGES, LAVENDER, ALMA WILSON and WATT, JJ., concur.
¶ 11 KAUGER, C.J., and SIMMS and OPALA, JJ., concur in part and dissent in part.
NOTES
[1] Citing: Chandler v. Denton, 741 P.2d 855 (Okla.1987).
[2] The Court of Civil Appeals further stated:
We reject the theory that the contract statute of limitations is applicable. In Uptegraft v. Home Insurance Co., 662 P.2d 681 (Okl.1983), the Court held that a five year written statute of limitations applies in an action by an injured person against his or her UM insurer. The Uptegraft Court found such an action to be ex contractu, "because it is a promise by the insurer to pay its own insured ... we are dealing here with an agreement to indemnify the insured for injuries caused by another ... the recovery of the insured is ultimately based upon the policy without which no liability could be imposed upon the insurer for the tort of another." In contrast, in this case, there is no contract between Employers and Insurance Co.
[3] The Northland court's reliance upon Uptegraft v. Home Insurance Co., 662 P.2d 681 (Okla. 1983), is misplaced. The holding in Uptegraft applied only between the uninsured motorist carrier and their insured. The uninsured motorist carrier did not want to pay its coverage to its insured because the statute of limitation had run on the underlying tort. This Court held that a five year statute of limitations was provided for actions on written contracts, and since there was a valid written contract for uninsured motorist insurance, a five year statute of limitation would apply. The failure of the insured to commence an action against the uninsured tortfeasor did not ipso facto discharge the insurer from liability.
[4] This statute reads:
Civil actions other than for recovery of real property can only be brought within the following periods, after the cause of action shall have accrued, and not afterwards:
* * * * * *
Third: within two (2) years: an action for trespass upon real property; an action for taking, detaining or injuring personal property, including actions for the specific recovery of personal property; an action for injury to the rights of another, not arising on contract, and not hereinafter enumerated; an action for relief on the ground of fraud-the cause of action in such case shall not be deemed to have accrued until the discovery of the fraud.
|
Confidential treatment requested under 17 C.F.R. §§ 200.80(b)(4) and 230.406.
The confidential portions of this exhibit have been omitted and are marked
accordingly. The confidential portions have been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Request.
--------------------------------------------------------------------------------
Exhibit 10.2
AMENDED AND RESTATED LICENSE AGREEMENT
This Amended and Restated License Agreement (“Agreement”) is effective as of
May 27, 2009 (“Effective Date”), and is amended and restated as of the 3rd day
of July, 2012 (the “Restatement Date”) between Echo Therapeutics, Inc., a
corporation existing under the laws of the State of Delaware, having its
principal place of business at 8 Penn Center, 1628 JFK Blvd, Suite 300,
Philadelphia, Pennsylvania 19103 (“Licensor”), and Ferndale Pharma Group, Inc.,
a corporation existing under the laws of the State of Michigan, having its
principal place of business at 780 West Eight Mile Road, Ferndale, Michigan
48220 (“Licensee”).
RECITALS
A. Licensor is engaged in the business of research,
development, production and commercialization of transdermal medical devices and
pharmaceuticals, with emphasis on (i) transdermal continuous glucose monitoring
(tCGM) systems for use in clinical settings and by people with diabetes and (ii)
transdermal drug delivery technologies;
B. Licensor has developed and is commercializing the Prelude
Technology (as defined below);
C. Licensor has developed Know-How (as defined below) relating to the
Prelude Technology; and
D. Subject to the terms and conditions of this Agreement,
Licensee desires to obtain from Licensor an exclusive license under the Patents
(as defined below) and the Know-How in order to develop, have developed,
assemble, use, market, have marketed, sell and have sold, and export the
Products (as defined below) within the scope of the Field (as defined below) and
in the Territory (as defined below);
NOW, THEREFORE, in consideration of the mutual promises herein contained, it is
agreed as follows:
1.
Definitions.
“50% Royalty” has the meaning given in Section 6.2.
“510(k) Clearance” means approval, authorization or 510(k) medical device
clearance from the United States FDA for the Device or the Products.
“Affiliate” means any company, corporation, firm, partnership or other entity
that controls, is controlled by or is under common control with the party in
question. As used in this definition, the term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a party, whether through ownership of voting
securities, by contract, or otherwise.
“Available Product Opportunity” means a combination of lidocaine and Azone TS™.
“Clearance” means any approvals (including pricing and reimbursement approvals),
licenses, registrations or authorizations of any federal, state or local
regulatory agency, department, bureau or other governmental entity, necessary
for the marketing and commercial sale of the Device or Products in the Field in
the Territory.
“Commercially Reasonable Efforts” means, with respect to the efforts to be
expended by a party to achieve any objective, the reasonable, diligent efforts
to accomplish such objective as a similarly situated party in the medical device
industry would normally use to accomplish a similar objective under similar
circumstances, with a product at a similar stage in its development or product
life and of similar market potential.
“Commercial Sale” means a commercial sale of the Products to a non-Affiliate
third-party within the scope of the Field in the Territory.
-1-
--------------------------------------------------------------------------------
“Confidential Information” means, with respect to a party, all information of
any kind whatsoever, and all tangible and intangible embodiments thereof of any
kind whatsoever, which is disclosed by such party to the other party and is
marked, identified or otherwise indicated to be confidential at the time of
disclosure to the other party. Notwithstanding the foregoing, Confidential
Information of a party shall not include information which the other party can
establish by written documentation (a) to have been publicly known prior to
disclosure of such information by the disclosing party to the other party,
(b) to have become publicly known, without fault on the part of the other party,
subsequent to disclosure of such information by the disclosing party to the
other party, (c) to have been received by the other party at any time from a
source, other than the disclosing party, rightfully having possession of and the
right to disclose such information, (d) to have been otherwise known by the
other party prior to disclosure of such information by the disclosing party to
the other party, or (e) to have been independently developed by employees or
agents of the other party without access to or use of such information disclosed
by the disclosing party to the other party.
“Contract Year” has the meaning given in Section 6.2.
“Defense Action” means a lawsuit or claim that arises out of Licensee’s practice
of the composition or method of preparing the composition as set forth in one or
more of the claims of the Patents.
“Device” means the mechanical skin ablation device developed using the Prelude
Technology meeting the description and specifications provided in Schedule B,
including the embedded software and charging stand described in Schedule B. For
clarity, “Device” does not include Licensor’s transdermal continuous glucose
monitoring (tCGM) system, currently known as the Symphony® tCGM System, or any
components thereof.
“European Community” means all of the countries in Europe listed in Schedule E.
“FDA” means the United States Food and Drug Administration.
“Field” means the temporary disruption of the outer layer of the skin prior to
the application of topical anesthetic or analgesic cream, for local dermal
anesthesia or analgesia prior to a needle insertion or IV procedure.
“Final Patent Refusal” means a final, non-appealable denial or refusal (not
subject to re-examination) to issue a patent in a certain country by that
country’s patent reviewing body.
“Improvements” means any replacements, improvements or modifications to the
Device or Product Components in each case in the Field.
“Know-How” means trade secret and other know-how rights in all information and
data that is not generally known (including, but not limited to, information and
data regarding formulae, procedures, protocols, techniques and results of
experimentation and testing), which is necessary or useful to use, develop,
sell, or seek Clearance for the Products for use in the Field.
“Joint Inventions” means inventions, discoveries, know-how, trade secrets, and
other information, that are made jointly by the parties in the course of the
performance of this Agreement.
“Joint Patents” means any and all patents claiming Joint Inventions.
“Net Sales” means the gross amounts or cash equivalents actually received by
Licensee or its Affiliates, subsidiaries, Sublicensees or assigns for the
Products (including where such is received for the Device or Product Components
individually) during the term of this Agreement less amounts directly
attributable to: (i) rebates actually paid or taken (including government
rebates such as Medicaid chargebacks or rebates), administrative fees in lieu of
rebates paid to managed care and similar institutions, chargebacks and
retroactive price adjustments for the Products; (ii) refunds, credits or
allowances actually granted upon claims, rejections or returns of such sales of
the Products, including recalls, regardless of the party requesting the claim,
rejection, or return; (iii) separately itemized freight, postage, packaging,
shipping, and insurance charges actually incurred by Licensee for delivery of
the Products; (iv) taxes (but not income taxes on sales), duties, or other
governmental charges levied on or measured by the invoiced amount for the
Products, and actually paid by Licensee; and (v) normal and customary trade,
quantity and cash discounts and allowances actually allowed for the Products.
-2-
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“Option” has the meaning given in Section 2.4.
“Option Period” has the meaning given in Section 2.4.
“Patents” means the patents and patent applications identified on attached
Schedule A, including (i) all patent applications which are renewals, divisions,
continuations, continuations-in-part, substitutions, or additions of the patents
listed on Schedule A, (ii) all foreign counterparts of the patents listed on
Schedule A, and (iii) all patents, including reissues, re-examinations and
extensions which may issue on any of the preceding.
“Prelude Technology” means Licensor’s proprietary technology known as the
Prelude® SkinPrep System that is intended to temporarily disrupt the outer layer
of the skin for the purpose of administering, among other things, a topical
anesthetic or analgesic and accelerating the time to onset for topical
anesthetic or analgesic drugs including, but not limited to, lidocaine.
“Product Components” means, collectively, an abrasive tip, a reference electrode
ring, Benzalkonium Chloride for skin preparation, and topical 4% lidocaine
cream.
“Products” means the Device and the Product Components assembled in a kit.
“Recipient” means the party receiving Confidential Information.
“Sublicense Consideration” means payments made by a Sublicensee, such as
up-front license fees, maintenance fees, milestone fees, and minimum unearned
royalties; but excluding all earned running royalties (since earned running
royalties on Licensee’s Net Sales are payable to Licensor pursuant to Section
6.2).
“Sublicensee” means any party, other than an Affiliate, that obtains a right to
develop, have developed, assemble, use, market, have marketed, sell, have sold,
distribute, and export the Products pursuant to Section 2.3 by entering into an
agreement or arrangement with Licensee. “Sublicense” shall be construed
accordingly.
“Sublicensee Breach” means a breach by a Sublicensee of the payment obligations
affecting Licensor or any other material terms and conditions of a sublicense
that would constitute a breach of the terms and conditions of this Agreement if
such acts were performed by Licensee.
“Territory” means the United States and its territories and possessions, Canada,
Mexico, Australia, New Zealand, Switzerland, the countries of the European
Community and the countries of South America.
“Total Claim Amount” means all amounts expended by Licensor and/or Licensee in
connection with any third party claim of infringement or misappropriation in a
Defense Action, including, but not limited to, attorney fees and legal costs,
and/or a royalty or other amount that must be paid to a third party as a result
of a final claim or judgment or settlement.
“Trademarks” means the trademarks set forth on the attached Schedule C.
2. Grant of License; Sublicenses; Licensee’s Right of First Refusal;
Improvements; Licensor’s Supply and Sale of Certain Goods to Licensee.
2.1 Subject to the terms and conditions of this Agreement,
Licensor grants to Licensee the exclusive right and license under the Patents,
and the Know-How to develop, have developed, assemble, use, market, have
marketed, sell and have sold, and export the Products, within the scope of the
Field in the Territory.
-3-
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2.2 Licensee may use the Trademarks solely as necessary to use,
offer for sale, sell, lease and/or export the Products in accordance with the
terms and conditions of this Agreement. Licensee acknowledges that all use of
the Trademarks pursuant to this Agreement must be in accordance with Licensor’s
policies and must meet Licensor’s quality standards. Licensee understands and
agrees that its use of the Trademarks does not create any right, title or
interest in or to the use of the Trademarks and that all such use and goodwill
associated with the Trademarks will inure to the benefit of Licensor. Except as
expressly permitted by Licensor in writing, Licensee shall not adopt nor attempt
to register any trademark, trade name or service mark which is confusingly
similar to the Trademarks. In addition to the Trademarks, Licensee, in
Licensee’s sole discretion, may use other trademarks to use, offer for sale,
sell, lease and/or export the Products in accordance with the terms and
conditions of this Agreement. Licensee shall be responsible for developing and
registering trademarks for the Products, and shall own all such
trademarks. Licensee shall not be obligated to use the Trademarks, but may do
so in its sole discretion and otherwise in accordance with the terms and
conditions of this Agreement.
2.3 Licensee shall have the unconditional right to grant a
Sublicense subject to the following conditions:
2.3.1 In each such Sublicense, the Sublicensee will be permitted to
grant further Sublicenses, and so forth for further sub-tier sublicenses, but
only on the condition that any such Sublicense will be subject to the terms and
conditions of the license granted to Licensee under this Agreement, including
payments to Licensor of royalties and other fees set forth in Section 6 based
upon consideration paid by any further Sublicensee for any such further
Sublicense.
2.3.2 Licensee will forward to Licensor, within thirty (30) days
following its execution, a fully executed, complete and accurate copy of each
Sublicense granted under this Agreement. Licensor’s receipt of such Sublicense
will not constitute a waiver of any of Licensor’s rights or Licensee’s
obligations under this Agreement. Each such Sublicense shall be treated as the
Confidential Information of Licensee.
2.3.3 Each Sublicense will contain a right of termination by
Licensee in the event of a Sublicensee Breach. In the event of a Sublicensee
Breach, and if after a reasonable opportunity to cure as provided in any such
Sublicensee’s Sublicense, such Sublicensee fails to cure such Sublicensee
Breach, then Licensee will terminate the Sublicense unless Licensor agrees in
writing that such Sublicense need not be terminated. Such Sublicensee Breach
and termination of a Sublicensee’s Sublicense will not affect the term of
Licensee’s license hereunder or the Sublicense of any non-breaching Sublicensee.
2.3.4 Upon termination of this Agreement for any reason, all
Sublicenses will be assigned to Licensor, and Licensor will have no greater
duties or lesser rights under such Sublicenses than Licensor has under the
Agreement.
Licensee shall have the sole discretion to determine the
financial and other terms on which any Sublicenses shall be granted under this
Agreement; however, no such Sublicense shall alter any obligation owed by
Licensee to Licensor under this Agreement.
2.4 For a period of twelve (12) months from the Restatement
Date (the “Option Period”), Licensor grants to Licensee the right of first
negotiation (“Option”) to obtain an exclusive license to develop, have
developed, assemble, use, market, have marketed, sell and have sold, and import
and export all products that fall within the definition of Available Product
Opportunity. Whether to exercise such Option is solely at the discretion of
Licensee, but if Licensee does exercise the Option, Licensee must exercise the
Option within the Option Period by written notice of exercise and payment of a
[**] Option fee. Upon exercise of the Option, the parties will exclusively
negotiate the terms of the exclusive license for a period of ninety (90) days.
If the parties fail to enter into the exclusive license within such ninety (90)
day period, Licensee will have no further rights to the Available Product
Opportunity and Licensor will have the right to license it to any other third
party. The Option fee shall be paid at the time of Licensee’s exercise of the
Option and shall be fully creditable against any subsequent license fee due for
such technology under the terms of the agreed to license.
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** Echo Therapeutics, Inc. has requested confidential treatment of this
competitive and financial information, the disclosure of which could result in
competitive harm.
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2.5 Any Improvements made by or for Licensor during the term of
this Agreement shall be deemed included within the scope of the licensed rights
(i.e. for the Field in the Territory) under this Agreement without any
additional consideration on the part of Licensee.
2.6 Promptly following the Effective Date, Licensor shall
disclose to Licensee all Know-How and assist Licensee in the use of all such
Know-How to enable Licensee to perform its obligations under this Agreement. In
addition, Licensor shall make available to Licensee during the term of this
Agreement, at Licensor’s expense, upon reasonable notice and during normal
business hours, the reasonable assistance of Licensor’s employees who are
knowledgeable about the Know-How in order to facilitate Licensee’s efforts to
develop and commercialize the Products in accordance with the terms and
conditions of this Agreement.
2.7 In consideration for the sums paid pursuant to this
Agreement, Licensor shall not, during the term of this Agreement, conduct, fund,
license or participate in the development, distribution or commercialization in
any country in the Territory, of any product that competes with the Products
within the scope of the Field in the Territory. Notwithstanding the foregoing,
the restrictions in this Section 2.7 shall not apply to any product relating to
Licensor’s Symphony or AzoneTS-based technologies, as identified on attached
Schedule D (“Retained Technologies”).
2.8 Licensee shall notify Licensor of the occurrence of the
first Commercial Sale of the Products in a country no later than ten (10) days
after such sale.
2.9 Exclusively for the purposes of this Agreement, Licensor
shall supply all of Licensee’s requirements of the Devices, the abrasive tips
and the reference electrode rings pursuant to the terms and conditions of a
Supply Agreement to be negotiated in good faith and executed by the parties
subsequent to the Effective Date of this Agreement. Licensee, at Licensee’s
cost and expense, shall supply and/or have supplied the Benzalkonium Chloride
for skin preparation and the topical 4% lidocaine cream.
3. Representations and Warranties.
Licensor represents and warrants to Licensee that as of the Effective Date:
3.1 Licensor is the exclusive owner or licensee of all rights
to the Patents, the Trademarks and the Know-How, has the right to grant this
exclusive license to Licensee, and has not granted to any other person, firm or
corporation any right, license, shop right, or privilege to the Patents, the
Trademarks or the Know-How within the scope of the Field in the Territory.
3.2 Other than the Patents, Licensor has not (i) filed, or
caused to be filed, any pending patent applications based on or claiming the
Prelude Technology for use in the Field, or (ii) obtained in its name or caused
to be obtained in the name of others any letters patent based on or claiming the
Prelude Technology for use in the Field.
3.3 By execution of this Agreement, Licensor does not violate
any other agreements, rights or obligations existing between Licensor and any
other person, firm, corporation or other entity.
3.4 To Licensor’s knowledge, there are no existing or
threatened actions, suits or claims pending against Licensor with respect to
Licensor’s right to enter into and perform its obligations under this Agreement.
3.5 Licensor is not aware of any third party intellectual
property rights that are infringed by the Patents, the Trademarks or by the
Prelude Technology.
3.6 Licensor has disclosed to Licensee all the information in
Licensor’s possession or control concerning side effects, injury, toxicity or
sensitivity reaction and incidents associated with the use of the Prelude
Technology in the Field, whether or not obtained from any clinical or
non-clinical studies.
3.7 This Agreement is a legal and valid obligation binding upon
Licensor and enforceable in accordance with its terms.
-5-
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Licensee represents, warrants and covenants to Licensor that:
3.8 Licensee shall use Commercially Reasonable Efforts to
develop or have developed and commercialize the Products in the
Territory. Without limiting the generality of the foregoing, Licensee shall use
Commercially Reasonable Efforts to (i) obtain necessary Clearances for the
Products in the Territory, and (ii) manufacture or have manufactured, market and
sell the Products to meet market needs in the Territory.
4. The Patents and Inventions.
4.1 Subject to the terms and conditions of this Agreement, all
right, title and interest, in and to the Patents vests solely in Licensor.
Licensor shall have the right, in its discretion, to file, prosecute and
maintain all Patents in the Territory at its sole expense during the term of
this Agreement. Licensor shall pay all expenses in connection with its filing,
prosecution and maintenance of the Patents in the Territory.
4.2 Subject only to the rights expressly granted to the other
party hereunder, each party retains its entire right, title and interest in and
to any inventions, discoveries, know-how, trade secrets, and other information
made or developed solely by such party and/or its consultants in the course of
the performance of this Agreement (“Sole Inventions”), and shall have the right,
but not the obligation, at its own expense, to file, prosecute and maintain any
patents claiming its Sole Inventions in all countries of the world.
4.3 Both parties shall jointly own any and all Joint
Inventions, provided, however, that Licensor shall be granted an exclusive
fully-paid, royalty free license to any and all Joint Inventions that are based
on, related to or in any way incorporate the Patents and/or the Prelude
Technology. Licensor and Licensee shall designate one of them to be responsible
for filing, prosecuting and maintaining any and all Joint Patents. All costs and
expenses of filing, prosecuting, maintaining, defending and enforcing such Joint
Patents will be borne equally by both Licensor and Licensee. The party
designated to perform patenting activities shall seek the comments of the other
party and shall keep the other informed of the progress of such prosecution by
providing quarterly status reports and copies of all correspondence between
their patent counsel and the patent offices of the countries where such
applications were filed. Such other party shall reasonably assist the party
designated in the prosecution of Joint Patents, including, without limitation,
by executing any necessary powers of attorney. Each party shall provide the
other party with quarterly written updates on its commercialization efforts
under any Joint Patents. Each party shall notify the other party of any
infringement of a Joint Patent known to such party and, if it takes action to
enforce a Joint Patent, it shall provide the other party with quarterly updates
on the status of its enforcement efforts.
4.4 Licensor shall not, during the term of this Agreement,
abandon the Patents in any country in the Territory without first consulting
with Licensee and considering in good faith Licensee’s position for such
abandonment.
4.5 Licensor may conspicuously mark all Devices with the word
“Prelude®” and shall include the words “This product is patented by Echo
Therapeutics, Inc. and distributed under license by Ferndale Pharma Group, Inc.
[or the name of an Affiliate of Licensee, as directed by Licensee]”, or such
alternate wording as the parties may agree upon from time to time.
5. Information; Confidentiality.
5.1 Licensor shall, upon request and to the best of its
ability, furnish to Licensee and/or its nominees, copies of all information and
documents in Licensor’s possession which are reasonably necessary to
commercialize the Products within the scope of the Field in the Territory.
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5.2 During the term of this Agreement, and for a period of
seven (7) years following the expiration or earlier termination hereof, each
party shall maintain in confidence all Confidential Information disclosed by the
other party, and shall not use, disclose or grant the use of the Confidential
Information, except on a need-to-know basis to those Affiliates, directors,
officers, employees, consultants, clinical investigators, contractors,
Sublicensees, distributors, permitted assignees, partners, investors, or
advisors, to the extent such disclosure is reasonably necessary in connection
with such party’s activities as expressly authorized by this Agreement. To the
extent that disclosure is authorized by this Agreement, prior to disclosure,
each party shall obtain agreement of any such person or entity to hold in
confidence and not make use of the Confidential Information for any purpose
other than those permitted by this Agreement. Each party shall notify the other
promptly upon discovery of any unauthorized use or disclosure of the other
party’s Confidential Information.
5.3 Except as otherwise provided in Section 5.2 above, neither
party shall disclose any terms or conditions of this Agreement to any third
party without the prior written consent of the other party.
5.4 The confidentiality obligations contained in this Section 5
shall not apply to the extent that the Recipient is required (a) to disclose
information by law, order or regulation of a governmental agency or a court of
competent jurisdiction, provided that the Recipient shall provide written notice
thereof to the other party and sufficient opportunity to object to any such
disclosure or to request confidential treatment thereof, (b) to disclose
information for purposes of compliance with applicable rules and regulations of
the United States Securities and Exchange Commission or any exchange upon which
Licensor is listed at the time of disclosure, or (c) to disclose information to
any regulatory authority for purposes of obtaining a Clearance for the Products.
6. License Fees, Sublicense Consideration, Milestone Payments and
Payment of Royalties.
6.1 Licensee has paid to Licensor a license fee of Seven
Hundred Fifty Thousand Dollars ($750,000) on the Effective Date. Licensee shall
pay to Licensor (i) a milestone payment of Seven Hundred Fifty Thousand Dollars
($750,000) within ninety (90) days of Licensee’s receipt of a copy of the FDA’s
written grant of the 510(k) Clearance and (ii) the “License Fee” listed
alongside each country on Schedule E (“License Fees”) attached hereto within
ninety (90) days following the issuance of Clearance in such
country. Additionally, Licensee shall pay to Licensor the following milestone
payments based on aggregate Net Sales of Product Components:
Aggregate Net Sales
Milestone Payment Amounts
$[**]
$[**]
$[**]
$[**]
$[**]
$[**]
$[**]
$[**]
** Echo Therapeutics, Inc. has requested confidential treatment of this
competitive and financial information, the disclosure of which could result in
competitive harm.
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6.2(a) Royalty payments due to Licensor shall be equal to: (i)
for all Net Sales in a Contract Year up to $[**], [**] percent ([**]%) of all
Net Sales of the Product Components within the scope of the Field in the
Territory, and (ii) for all Net Sales in a Contract Year over $[**], [**]
percent ([**]%) of all Net Sales of the Product Components within the scope of
the Field in the Territory; however, where a Licensor patent application has
received a Final Patent Refusal, all such royalty payments from sales in such
country shall be reduced by one-half (the “50% Royalty”). Notwithstanding the
foregoing, if a Product has market exclusivity or similar commercial protection
granted by a regulatory authority in a Territory in which there is a Final
Patent Refusal, then the 50% Royalty shall not be applicable until the market
exclusivity period has expired. Regardless of the amount of Net Sales for such
year, Licensee shall pay a minimum annual royalty to Licensor for Licensee’s
sales of Products in the United States for each Contract Year in the U.S. as set
forth below.
Contract Year
Minimum Annual Royalty
1
$[**]
2
$[**]
3
$[**]
4
$[**]
5 – 10
$[**]
Licensee shall pay a Minimum Annual Royalty to Licensor for Licensee’s sales of
Products in the other countries of the Territory for each Contract Year in such
country pursuant to Schedule E hereof.
With respect to each country of the Territory, Year 1 of the Minimum Annual
Royalty obligation for such country shall commence on the date of the first
Commercial Sale in such country and each of the nine (9) successive 12-month
periods shall represent Years 2-10 (each, a “Contract Year”). For the avoidance
of doubt, Licensee shall not be required to pay any minimum royalties with
respect to any country of the Territory until such time as a the Product has
been commercialized in such country.
Such minimum annual royalty amounts shall not be construed as a limitation in
any way on the annual royalty payment due from Licensee to Licensor, it being
understood that the royalty in any Contract Year for Net Sales for any country
shall not exceed the higher of (a) the applicable royalty amount as described in
this Section 6.2 (i.e., [**]% and/or [**]% of Net Sales, as the case may be), or
(b) the minimum royalty for that Contract Year for such country. If the royalty
actually due under this Agreement based on Net Sales is less than the applicable
annual minimum royalty, Licensee shall pay Licensor, no later than thirty (30)
days after the end of the preceding 12-month period, the applicable annual
minimum royalty amount to meet its obligations in this Section
6.2(b) If Licensee does not pay Licensor the minimum annual
royalty amount in any Contract Year, then Licensor shall have the right to
terminate this License Agreement upon thirty (30) days prior written notice to
Licensee. For purposes of clarity, Licensee's failure to pay quarterly
royalties based upon actual sales of the Products shall be considered a material
breach of this Agreement.
6.3 With respect to the United States Licensee shall pay to
Licensor [**] percent ([**]%) of all Sublicense Consideration. With respect to
any other country of the Territory Licensee shall pay to Licensor [**] percent
([**]%) of all Sublicense Consideration received for that country that is in
excess of the milestone license fee previously paid for that country set forth
in Schedule E hereof.
6.4 Licensee shall keep accurate records of all sales of
Products, shall render written statements thereof to Licensor within thirty (30)
days after the end of each Contract Year quarter during the term of this
Agreement, and shall pay to Licensor with each such statement the amount of all
royalties earned during the corresponding Contract Year quarter. For purposes
of clarity, Licensee shall make quarterly royalty payments based upon actual Net
Sales of the Products in such quarter. The written statements will provide
details of Net Sales by Products and by package, including reasonable detail as
to the computation of the Net Sales during such quarter. The written statements
shall be mailed (via certified mail, return receipt requested) to Licensor at
the addresses indicated above. Licensee shall impose the same reporting
requirements upon its Sublicensees, except that the information shall be
determined within twenty (20) days from the end of each Contract Year quarter so
that Licensee may pay the royalties earned on sales by Sublicensees
simultaneously with Licensee’s royalties. Payment of royalties and license fees
shall be made by wire transfer, in U.S. Dollars, in accordance with wire
transfer instructions provided to Licensee, or in such other manner as the
parties may agree in writing.
** Echo Therapeutics, Inc. has requested confidential treatment of this
competitive and financial information, the disclosure of which could result in
competitive harm.
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6.5 Upon expiration of all of the Patents, or if all of the
Patents shall be determined by the final, non-appealable order of a court or
courts of competent jurisdiction to be invalid (either, a “Patent Default”),
notwithstanding the term in Section 8.1, Licensee shall continue to have all
rights under this Agreement, but shall only have the obligation to pay Licensor
the 50% Royalty on sales of Product Components made after the date of expiration
or invalidity covered only by the Patents expired or invalidated.
6.6 Once per calendar year during the term of this Agreement,
Licensor shall have the right to have Licensee's books and records audited by an
accountant of Licensor's choosing to ascertain the accuracy of Licensee's
reports. Such audits shall be scheduled within thirty (30) days following
delivery of notice by Licensor to Licensee and shall be performed during
Licensee's normal business hours and shall be conducted in a manner that does
not interfere unreasonably with Licensee's business. In the event that any
audit determines that the reported Net Sales was less than ninety-five percent
(95%) of actual Net Sales for the period in question, Licensee agrees to pay the
additional royalties, plus a late fee equal to 1½% per month of the amount of
all royalty payments that were not accurately and timely made, and the actual
cost of such audit. If any audit determines that the reported Net Sales was not
less than ninety-five percent (95%) of actual Net Sales for the period in
question, Licensee agrees to pay the additional royalties (if any), plus a late
fee equal to 1½% per month of the amount of all royalty payments that were not
accurately and timely made (if any); however, the actual cost of such audit
shall be paid by Licensor.
7. Product Development and Regulatory Approval; Commercialization.
7.1 Licensee shall be responsible for all Product development
fees and costs, and for all FDA and regulatory filings, in the
Territory. Licensee shall obtain all required authorizations from all
governmental bodies and regulatory agencies relating to Licensee’s marketing,
sale and distribution of the Products within the scope of the Field in the
Territory. Licensee and Licensee’s Sublicensees shall be solely responsible for
obtaining and securing all such required authorizations, and Licensee shall have
the final decision-making authority with respect to all aspects of the required
authorizations of the Products.
7.2 Licensee shall be responsible for commercializing the
Products within the scope of the Field in the Territory. Decisions regarding
matters such as advertising and promotion shall be the sole responsibility of
Licensee, provided however that Licensee’s commercialization activities shall be
consistent and in compliance with governmental authorizations for the Products
and with the terms of this Agreement.
7.3 Licensee shall set prices for Products in the Territory and
shall obtain all governmental pricing approvals as may be required. Licensee
shall also be responsible for distribution of the Products within the scope of
the Field in the Territory.
7.4 Licensee will prepare or have prepared all Promotional
Materials. Any placement, use or distribution of Promotional Materials which
contains any Trademark or any reference to Licensor shall be subject to
Licensor’s prior written approval, which approval shall not be unreasonably
withheld or delayed. Licensee shall submit to Licensor for approval drafts of
all Promotional Materials, prior to use. Licensor shall promptly evaluate
Promotional Materials submitted to it by Licensee and shall use reasonable
efforts to approve or disapprove such Promotional Materials in writing within
ten (10) business days after receipt. Any submission which is not revised or
disapproved in writing by Licensor within a fifteen (15) business day period
shall be deemed approved. Printing of Promotional Materials in advance of
receiving Licensor’s written approval is done at Licensee’s own risk. Licensee
shall have no such obligation with respect to any of Licensee’s Mark(s).
Licensee shall provide to Licensor two (2) samples of all printed Promotional
Materials.
7.5 Licensor shall be responsible for all product development
as such development relates to the Device, the abrasive tip, and the reference
electrode ring. As set forth in Section 7.1 above, Licensee shall be
responsible for all Product development fees and costs.
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8. Term and Termination.
8.1 This Agreement and the rights and licenses granted hereunder
shall commence on the Effective Date and, unless earlier terminated pursuant to
this Agreement, shall extend on a country-by-country basis until the later of
(i) the tenth anniversary of the first Commercial Sale within the scope of the
Field in such country or (ii) expiration of the last to expire of the Patents in
such country. Notwithstanding the foregoing, upon the expiration of the term,
Licensee shall have a paid-up license and shall continue to have all rights
under this Agreement, but shall have no obligation to pay Licensor any further
royalties on sales of the Products.
8.2 Upon any material breach or default under this Agreement,
the non-breaching party may terminate this Agreement by providing thirty (30)
days’ written notice to the breaching party. Said termination shall become
effective at the end of such thirty (30) day period unless, during such period,
the breaching party cures such defect or default.
8.3 Any party may immediately terminate this Agreement if a
party is adjudicated a bankrupt or becomes insolvent, or enters into a
composition with creditors, or if a receiver is appointed for it.
8.4 Upon termination of this Agreement for any reason, (a)
Licensee shall fully account for, and pay to, Licensor all royalties within
sixty (60) days of such termination; (b) Licensee shall immediately transfer to
Licensor (i) copies of all information, reports, submissions and data relating
to the Products and generated during the term of this Agreement, and (ii) all
rights which Licensee may have gained under this Agreement; and (c) all rights
and licenses granted to Licensee pursuant to this Agreement shall immediately
terminate. Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party of any obligation which accrued prior
to the effective date of such termination.
8.5 Notwithstanding Section 8.4, upon termination of this
Agreement for any reason, Licensee and its Sublicensees, Affiliates,
distributors, agents and wholesalers shall, without restriction, and in their
sole discretion, have the right to market and sell Products remaining in their
inventory for a total of one hundred eighty (180) days after receipt of notice
of termination. Any and all royalty payments due Licensor shall be made
pursuant to Section 6.
9. Patent Enforcement.
9.1 Infringement of Patents by Third Party. Licensor, at its
own expense, shall have the first option to police the Patents for use in the
Field in the Territory against infringement by other parties within the
Territory, but Licensor shall, when practicable, notify Licensee in writing
twenty (20) days before filing any suit. This right to police includes the
right to institute and prosecute an action or proceeding to abate such
infringement and to resolve such matter by settlement or otherwise at Licensor’s
expense and through counsel of its selection. Licensor has full authority to
settle on such terms as Licensor determines, except that Licensor shall not
reach any settlement whereby it provides a license for future activities to a
third party under the Patents for use in the Field in the Territory without the
consent of Licensee, which consent Licensee can withhold for any
reason. Licensee shall provide reasonable assistance to Licensor with respect
to such actions, but only if Licensor reimburses Licensee for out-of-pocket
expenses incurred in connection with any such assistance rendered at Licensor’s
request or reasonably required by Licensee and if Licensor notifies Licensee,
when practicable, in writing twenty (20) days before filing any suit. Licensee
retains the right to participate, with counsel of its own choosing and at its
own expense, in any action under this Section 9.1.
If Licensor exercises its option to police the Patents pursuant to this
Section 9.1, Licensor shall retain one hundred percent (100%) of any recovery or
settlement received after reimbursement of Licensee’s out-of-pocket expenses
incurred under this Section 9.1.
-10-
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If Licensor does not exercise its option to police the Patents under this
Section 9.1, Licensee shall have the option, but not the obligation, to so
police the Patents for use in the Field within the Territory, and Licensee may
withhold up to fifty percent (50%) of the payments otherwise thereafter due
during the course of any such litigation to Licensor under this Agreement under
the following terms. Licensee may apply the amounts withheld to pay Licensee’s
out-of-pocket litigation expenses, including reasonable attorneys’ fees. If
Licensee recovers damages in the patent litigation, the award shall be applied
first to satisfy Licensee’s unreimbursed expenses and legal fees for the
litigation, next to reimburse Licensor for any payments under this Agreement
which are past due or were withheld pursuant to this Section 9.1, and then to
reimburse Licensor for any other unreimbursed expenses and legal fees for the
litigation. The remaining balance shall be divided equally between Licensor and
Licensee.
Notwithstanding the foregoing, Licensor and Licensee each has the right
to institute and prosecute a separate additional action or proceeding against a
third party if Licensor or Licensee determines that it has suffered damages as a
result of the alleged infringement.
9.2 Infringement of Third Party Rights. If Licensor and/or its
Affiliates, or Licensee, its Affiliates, Sublicensees, distributors or other
customers are sued or threatened with suit by a third party alleging
infringement of patents or other intellectual property rights that are alleged
to cover the manufacture, use, sale, importation, exportation or distribution of
one or more Products, the sued or threatened party shall promptly notify the
other in writing and provide a copy of the lawsuit or claim. Licensor and
Licensee shall each be permitted at all times to defend itself, through counsel
of its own choice.
If a Defense Action arises, Licensor shall in each instance have the
first option to control the defense in any such claim or suit. Within ten (10)
calendar days of learning of the claim or suit, Licensor shall provide notice to
Licensee of whether or not it will control the defense of such claim or
suit. If Licensor exercises its option to control the Defense Action, Licensee
shall fully cooperate with Licensor in the defense of any such suit. Licensor
shall keep Licensee timely informed of material developments in the defense of
such claim or suit. If Licensor does not exercise its option to control the
Defense Action, Licensee shall control the Defense Action, and Licensor shall
fully cooperate with Licensee in the defense of any such suit. Licensee shall
keep Licensor timely informed of material developments in the defense of such
claim or suit. The Total Claim Amount expended by each of Licensor and Licensee
shall be shared equally (subject to the below limitation on quarterly royalty
payments) by Licensor and Licensee. Licensee shall deduct royalty payments
otherwise due to Licensor under this Agreement to account for Licensor’s share
in the Total Claim Amount. Notwithstanding the foregoing, if amounts are paid
in response to a Defense Action, (i) Licensor shall at no time be paid royalty
amounts less than 6% of Net Sales, regardless of the amounts paid in
satisfaction of the Total Claim Amount, and (ii) Licensee's sole means of
collecting Licensor's share of the Total Claim Amount shall be through the
reduction of royalties otherwise due to Licensor from Licensee.
The terms of this Section 9.2 shall not apply to or affect Licensor’s or
Licensee’s indemnity obligations per Section 10.
9.3 In the event any party learns of facts that might
reasonably result in a lawsuit involving the Patents, the Trademarks, the
Products and/or this Agreement, or in the event any party is sued for matters
involving the Patents, the Trademarks, the Products and/or this Agreement, such
party shall promptly notify all other parties to this Agreement.
-11-
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10. Indemnity. Licensee shall defend, indemnify and hold Licensor
(and its directors, officers, medical and professional staff, employees and
agents) and their respective successors, heirs and assigns harmless from and
against all costs, liabilities, damages, expenses, and losses (including
reasonable attorney fees and costs) incurred through claims, suits, actions,
demands, or judgments of third parties against Licensor based on, or arising out
of, (a) Licensee’s breach of any representation, warranty, covenant or
obligation in this Agreement, (b) the clinical development, regulatory
development, marketing, manufacture, use, sale and/or export of the Device or
the Products by Licensee, (c) the clinical development, regulatory development,
marketing, use, sale and/or export of any Device or the Products by Licensee, or
(d) the exercise of the licenses granted under this Agreement. Licensor shall
defend, indemnify and hold Licensee and its directors, officers, medical and
professional staff, employees and agents and their respective successors, heirs
and assigns harmless against all costs, liabilities, damages, expenses, and
losses (including reasonable attorney fees and costs) incurred through claims,
suits, actions, demands, or judgments of third parties against Licensee based
on, or arising out of, (a) Licensor’s breach of any representation, warranty,
covenant or obligation in this Agreement, or (b) the development (excluding
clinical and regulatory development), use, and/or manufacture of any Device or
any Product Component manufactured by Licensor. Nothing herein is intended to
relieve any party from liability for its own act, omission or negligence. No
party shall have any liability to another party for consequential damages of the
other party. Notwithstanding the above, the indemnity obligations provided here
extend to the parties only and no right shall be established or inferred to
benefit any third person.
11. Insurance. Licensee shall, throughout the term of this Agreement,
obtain and maintain at its own cost and expense from a qualified insurance
company licensed to do business in the Territory product liability insurance in
such amounts as is customary in the industry, but in no event less than
$2,000,000. Such product liability insurance shall name Licensor as an
additional named insured. Within thirty (30) days of receiving written request,
Licensee agrees to furnish Licensor with a certificate of insurance evidencing
such coverage, and in no event shall Licensee manufacture, distribute, or sell
the Products prior to obtaining such insurance. Licensor shall, throughout the
term of this Agreement, obtain and maintain at its own cost and expense from a
qualified insurance company licensed to do business in the Territory standard
comprehensive general liability insurance. Within thirty (30) days of receiving
written request, Licensor agrees to furnish Licensee with a certificate of
insurance evidencing such coverage. Notwithstanding the foregoing, Licensor’s
obligation to maintain such insurance shall extend for five (5) years beyond the
date that Licensor entirely ceases distributing and selling products. Licensor
shall provide notice to Licensee if and when Licensor intends on terminating any
such insurance policy.
12. Notices. Any notice required by this Agreement must be in writing
and sent to an executive officer at the appropriate party’s address first
written above (or to another address designated by the party to receive such
notice) by registered mail or by an internationally-recognized courier service,
in either case with a signature proof of receipt.
13. Assignment. The parties shall not have the right to assign this
Agreement, or any rights or obligations granted hereunder without the prior
written consent of the other party (such consent not to be unreasonably
withheld). An assignment shall not release the assignor or affect the rights of
the non-assigning party against the assignor. Notwithstanding the foregoing,
provided the assigning party remains liable for all its obligations under this
Agreement, Licensee and Licensor may assign any of their respective rights
and/or delegate any of its duties to their respective Affiliates.
Notwithstanding the foregoing, any party may transfer its rights and delegate
its duties under this Agreement in connection with its merger, acquisition or
consolidation with another person or firm, provided that such person or firm
shall first have agreed with Licensor and Licensee in writing to perform the
transferring party’s obligations and duties hereunder.
14. Bankruptcy. All rights and licenses granted under or pursuant to
this Agreement by Licensor to Licensee are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to
"intellectual property" as defined under Section 101(52) of the Bankruptcy Code.
The parties agree that Licensee, as a licensee of such rights under this
Agreement, shall retain and may fully exercise all of its rights and elections
under the Bankruptcy Code. The parties further agree that in the event of the
commencement of a bankruptcy proceeding by or against Licensor under the
Bankruptcy Code, Licensee shall be entitled to a complete duplicate of, or
complete access to, as appropriate, any such intellectual property and all
embodiments of such intellectual property, and same, if not already in its
possession, shall be promptly delivered to Licensee (i) upon any such
commencement of a bankruptcy proceeding upon written request therefor by
Licensee unless Licensor elects to continue to perform all of its obligations
under this Agreement, or (ii) if not delivered under (i) above, upon the
rejection of this Agreement by or on behalf of Licensor upon written request
therefor by Licensee.
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15. Binding Effect. This Agreement shall inure to the benefit
of and be binding upon the parties and their respective heirs, representatives,
successors and permitted assigns, but nothing contained in this paragraph shall
be deemed to grant a right to make assignments other than as is above provided.
16. Governing Law; Jurisdiction. Any and all disputes, controversies,
differences or claims arising from or related to this Agreement, or the
interpretation, making, performance, breach or termination thereof or
transactions conducted pursuant to the rights and duties granted by this
Agreement shall be governed by and interpreted in accordance with the laws of
the State of Delaware, excluding Delaware’s conflict of laws
principles. Neither party shall commence any litigation against the other
arising out of this Agreement or the termination of this Agreement except in a
court located in the State of Delaware. Each party consents to jurisdiction
over it by and exclusive venue in such a court.
17. Complete Agreement. This Agreement, including its attached
exhibits, contains the entire agreement between the parties regarding its
subject matter, and supersedes all previous agreements and negotiations,
including, but not limited to the License Agreement entered into by the parties
as of the Effective Date.
18. Amendment. None of the terms of this Agreement shall be amended
or modified except in a writing signed by both parties.
19. Counterparts. This Agreement may be executed in counterparts, and
each counterpart shall be deemed an original hereof.
20. Waiver. No failure of a party to take any action or assert any
right hereunder shall be deemed to be a waiver of such right in the event the
continuance or repetition of the circumstances giving rise to such right.
21. Cumulative Remedies. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any right and remedies
otherwise available at law or in equity.
22. Headings. Article and section headings in this Agreement are
included for convenience of reference only, and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
23. Independent Contractor Relationship. Licensor and Licensee shall
act solely as independent contractors and nothing in this Agreement shall be
construed to create a partnership or joint venture, principal/agent,
employer/employee or other fiduciary relationship. No party has the power or
authority to act for, bind or commit any other party in any way. No party is
authorized to make any statement, claims, representation or warranties, or to
act on behalf of another party, except as specifically authorized in writing by
the other.
24. Survival of Sections. Sections 2.1-2.7 (inclusive), 3, 4.2, 6,
8.4, 8.5, 9, 10, 12, 13, 15, 16, 17, 18, 19, 21, 23 and 24 shall survive
termination or expiration (as the case may be) of this Agreement and shall
remain in full force and effect. The provisions of this Agreement which do not
survive termination or expiration hereof (as the case may be) shall nonetheless
be controlling on, and shall be used in construing and interpreting the rights
and obligations of the parties hereto with regard to any dispute, controversy or
claim which may arise under, out of, in connection with, or relating to this
Agreement.
25. Severability. In the event that any one or more of the provisions
contained in this Agreement or in any other agreement or instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any other such agreement or instrument
and such invalid or unenforceable provision shall be construed by limiting it so
as to be valid and enforceable to the maximum extent compatible with, and
possible under, applicable law.
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26. Use of Name. Licensor and Licensee shall consult with each other
before issuing any press release or otherwise making any public statements with
respect to this Agreement and the transactions contemplated hereby and shall not
issue any such press release or make any such public statement except as they
may mutually agree and except as required under Federal securities laws or other
laws applicable to Licensor and Licensee. Neither party shall use the name of
the other party in any advertising, promotional or sales literature, or in any
other form of publicity without prior written consent obtained from the other
party in each case, which consent shall not be unreasonably withheld.
27. Third Party Beneficiaries. This Agreement confers no benefits, rights, or
remedies on any individual, entity, or other person who is not a party to this
Agreement.
[SIGNATURE PAGE FOLLOWS]
-14-
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IN WITNESS WHEREOF the parties have caused this Agreement to be executed as of
the Effective Date.
ECHO THERAPEUTICS, INC.
/s/ Patrick T. Mooney
By:Patrick T. Mooney
Its: CEO
ECHO THERAPEUTICS, INC.
/s/ Kimberly Burke
By: Kimberly Burke
Its: General Counsel
FERNDALE PHARMA GROUP, INC.
/s/ Michael Burns
By: Michael Burns
Its: President
-15-
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SCHEDULE A
THE PATENTS
“Skin Permeation Device for Analyte Sensing or Transdermal Drug Delivery”
Patents Granted
Country
Patent No.
Date Issued
Expires
AT
E 499.967
9/26/11
4/25/2008
AU
2008245585
1/19/12
4/25/2028
BE
2,152,358
6/7/11
4/25/2028
DK
DK/EP2152358
6/27/11
4/25/2028
GR
GR 3075105
5/30/11
4/25/2028
HK
1,140,709
12/5/11
4/25/2028
HR
P20110396
8/4/11
4/25/2028
HU
2,152,358
8/17/11
4/25/2028
IE
2,152,358
6/24/11
4/25/2028
LT
2,152,358
9/26/11
4/25/2028
NO
NO/EP2152358
7/18/11
4/25/2028
NZ
580997
12/5/11
4/25/2028
RU
2435616
12/10/11
4/25/2028
SK
E 9561
9/5/11
4/25/2028
TR
TR201105270 T4
4/25/2028
EP
2152358
3/2/11
National patents in all designated countries:
Bulgaria, Switzerland and Liechtenstein, Cyprus, Czech Republic, Germany,
Estonia, Spain, Finland, France, United Kingdom, Iceland, Italy, Luxembourg,
Latvia, Monaco, Malta, Netherlands, Poland, Portugal, Romania, Sweden and
Slovenia,
Applications Pending
Country
Serial No.
Date Filed
US
12/110,034
04/25/08
BR
PI 0810969-9
10/27/09
CA
2,685,423
12/14/09
CN
200880020556
4/25/08
-16-
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SCHEDULE B
THE PRODUCTS
The abrader described in US Patent Application No. 29/392,348 entitled “Abrasion
Device with Reference Ring and Abrasive Tip.”
Product Components:
- an abrasive tip;
- a reference electrode ring;
- Benzalkonium Chloride for skin preparation; and
- topical 4% lidocaine cream.
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SCHEDULE C
THE TRADEMARKS
Trademark
Country
Application No.
Prelude
United States
77/732,793
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SCHEDULE D
RETAINED TECHNOLOGIES
1. Licensor’s proprietary wireless, needle-free, transdermal continuous
glucose monitoring system known as the Symphony® tCGM System.
2. Licensor’s proprietary AzoneTS™ platform-based drug products, with
the exception of a combination of lidocaine and Azone TS™.
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SCHEDULE E
LICENSE FEES
Country of Territory
License Fee*
Year 1 Minimum
Annual Royalty**
Germany
$ [**]
$ [**]
France
$ [**]
$ [**]
United Kingdom
$ [**]
$ [**]
Italy
$ [**]
$ [**]
Spain
$ [**]
$ [**]
Netherlands
$ [**]
$ [**]
Belgium
$ [**]
$ [**]
Sweden
$ [**]
$ [**]
Switzerland
$ [**]
$ [**]
Austria
$ [**]
$ [**]
Canada
$ [**]
$ [**]
Mexico
$ [**]
$ [**]
Brazil
$ [**]
$ [**]
Argentina
$ [**]
$ [**]
Chile
$ [**]
$ [**]
Australia
$ [**]
$ [**]
With respect to each Country of Territory in the above table, the Minimum Annual
Royalty set forth in the above table shall increase in successive years as
follows:
Year 2 = Year 1 Minimum Annual Royalty x [**]
Year 3 = Year 1 Minimum Annual Royalty x [**]
Year 4 = Year 1 Minimum Annual Royalty x [**]
Years 5-10 = Year 1 Minimum Royalty x [**]
** Echo Therapeutics, Inc. has requested confidential treatment of this
competitive and financial information, the disclosure of which could result in
competitive harm.
|
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
BRIAN EASTER, :
: Case No. 2:17-cv-00197
Plaintiff, :
: JUDGE ALGENON L. MARBLEY
v. :
: Magistrate Judge Jolson
BEACON TRI-STATE STAFFING, INC., et al., :
:
:
Defendants. :
OPINION & ORDER
I. INTRODUCTION
This matter is before the Court on Plaintiff’s Motion for Attorneys’ Fees and Costs. (Doc.
125.) The parties have entered into a confidential settlement agreement requiring the Court to
determine the appropriate amount of fees and costs to be awarded within a range of $137,500 and
$337.500. For the reasons set forth below, the Court GRANTS Plaintiff’s Motion and awards
$337,500 in attorneys’ fees and costs.
II. BACKGROUND
On March 7, 2017, following the termination of his employment, Plaintiff Brian Easter
initiated this action against his employer, Defendants Beacon Tri-State Staffing, Inc. and C*MAC
Transportation, LLC, alleging violations of the Family Medical Leave Act (“FMLA”) and
asserting a claim of Age Discrimination. (See Doc. 1.) On October 17, 2017, Plaintiff amended
his Complaint to add a claim of Associational Disability Discrimination under Ohio law. (See
Doc. 29.) Plaintiff later stipulated to the dismissal of his Age Discrimination claim, and the Court
1
dismissed his Associational Disability Discrimination claim on summary judgment, leaving the
parties to resolve the remaining FMLA claims during settlement negotiations.
Although the parties were able to resolve the claims underlying this case, they were unable
to agree on the amount of attorneys’ fees and costs that should be awarded to Plaintiff. The parties,
therefore, fashioned their settlement agreement to allow the Court to award an appropriate fee
amount within a range of $137,500 at the bottom end and $337,500 at the top end. The matter is
now ripe for resolution.
III. LAW & ANALYSIS
The starting point for a determination of reasonable attorneys’ fees and costs is the Lodestar
method: “multiplying the number of hours reasonably spent on the case by an attorney times a
reasonable hourly rate.” Miller v. Food Concepts Int’l, LP, 2017 WL 524 7542, *2 (S.D. Ohio
Nov. 13, 2017) (Marbley, J.) (quoting Moore v. Freeman, 355 F.3d 558, 565 (6th Cir. 2004)). The
resulting amount may then “be adjusted upwards or downwards, as the district court finds
necessary under the circumstances of the particular case.” Id. (quoting Moore, 355 crodriguez@example.net.
The party seeking a fee award must submit evidence supporting the hours worked and the rates
claimed. Id.
Here, Plaintiff attests that he has accumulated a total of $345,415,62 in attorneys’ fees and
costs. He, therefore, requests that the Court award an amount of $337,500, which is the ceiling of
the parties’ agreed-upon range. Defendants, on the other hand, maintain that an appropriate
amount would be the floor of the agreed-upon range -- $137,500.
A. Reasonable Hourly Rates
The first step in the Lodestar analysis is to determine whether Plaintiff’s counsel has
proffered a reasonable hourly billing rate for their services. Though Defendants do not challenge
2
the reasonableness of the rates requested here, the Court addresses them briefly below. In doing
so, the Court is guided by the following instructions:
In determining a reasonable hourly rate, the appropriate rate . . . is not necessarily the exact
value sought by a particular firm, but is rather the market rate in the venue sufficient to
encourage competent representation. The market rate is the rate that lawyers of comparable
skill and experience can reasonably expect to command within the venue of the court of
record.
Miller, 2017 WL 5247542, at *3.
1. Attorney Jason Starling
Attorney Jason Starling seeks a billable rate of $350 per hour. Mr. Starling has over ten
years of labor and employment litigation experience, having graduated from Indiana University’s
Maurer School of Law in 2007, and having spent the entirety of his career at the law firms of Baker
& Hostetler, LLP; Porter, Wright, Morris, & Arthur, LLP; and Willis, Spangler, Starling. Notably,
an Ohio state court previously found that Mr. Starling’s billing rate of $350 per hour was
reasonable considering his education, skill, and experience. (See Doc. 125-7.) This Court will
agree. See Miller, 2017 WL 5247542, at *3 (“In making its determination, the court may consider
a party’s submissions, awards in analogous cases, state bar association guidelines, and its own
knowledge and experience from handling similar cases.) (internal quotations and citation omitted).
2. Attorney John Camillus
Attorney John Camillus seeks a billable rate of $425 per hour. Mr. Camillus has over
seventeen years of legal experience, having graduated from Yale Law School in 2002, clerked for
Chief Judge R. Guy Cole, Jr. of the United States Court of Appeals for the Sixth Circuit, and
practiced at two prominent law firms, Jones Day and Cooper & Elliot, LLC, before forming his
own practice in 2010. Based on Mr. Camillus’ breadth of experience, the Court finds his standard
billing rate of $425 per hour more than reasonable. See Hadix v. Johnson, 65 F.3d 532, 536 (6th
3
Cir. 1995) (“In the case of private attorneys . . . where an attorney requesting fees has well-defined
billing rates, those rates can be used to help calculate a reasonable rate for a fee award.”).
3. Paralegals Alynnah Satterfield and Phoebe Heffron
Finally, Paralegals Alynnah Satterfield and Phoebe Heffron seek a billable rate of $150 per
hour. Both Ms. Satterfield and Ms. Heffron are college graduates and have completed paralegal
training programs. Recognizing that paralegals are an integral part of any legal team, the Court
finds their billable rate of $150 per hour reasonable. See Cleveland Area Bd. of Realtors v. City of
Euclid, 965 F. Supp. 1017, 1020 n.4 (N.D. Ohio 1997) (“Paralegal time, like attorney time, is
measured in comparison to the market rate, if the prevailing practice in the area is to bill paralegal
time separately at market rates.”).
B. Hours Reasonably Expended
Having concluded that Plaintiff’s counsel’s billing rates are reasonable, the next step is to
determine the reasonableness of the hours expended in this case. In determining the hours
reasonably expended, “[t]he question is not whether a party prevailed on a particular motion or
whether in hindsight the time expenditure was strictly necessary to obtain the relief requested.
Rather, the standard is whether a reasonable attorney would have believed the work to be
reasonably expended in pursuit of success at the point in time when the work was performed.”
Miller, 2017 WL 5247542, at *6 (quoting Wooldridge v. Marlene Indus., 898 F.2d 1169, 1173 (6th
Cir. 1990)). Attorneys seeking fees must “maintain billing records that are sufficiently detailed to
enable courts to review the reasonableness of the hours expended on the case” and “should exercise
billing judgment with respect to hours worked.” Id. (quoting Imwalle v. Reliance Med. Prods.,
Inc., 515 F.3d 531, 552 (6th Cir. 2008)).
4
Importantly, “[t]he Court need not achieve auditing perfection.” Id. (quoting Fox v. Vice,
563 U.S. 826, 838 (2011)) (internal quotations omitted). Indeed, “[t]here is no precise rule or
formula for making these determinations.” Id. (quoting Hensley v. Eckerhart, 461 U.S. 424, 436
(1983)). Additionally, in lieu of line-by-line reductions, the Court “may implement an across-the-
board reduction by a certain percentage” and may “take into account [its] overall sense of a suit,
and . . . use estimates in calculating and allocating an attorney’s time.” Id. (internal quotations and
citations omitted).
Here, Plaintiff seeks renumeration in the following amount:
Timekeeper Rate Hours Total Fees
Attorney Jason Starling $350 per hour 860.20 hours $301,070
Attorney John Camillus $425 per hour 38.40 hours $16,320
Paralegal Alynnah Satterfield $150 per hour 7.90 hours $1,185
Paralegal Phoebe Heffron $150 per hour 8.00 hours $1,200
Litigation Costs $25,640.62
TOTAL: $345,415.62
Defendants present four reasons why the Court should not award the above-requested amount:
(1) Plaintiff advanced unsupportable claims in his Complaint; (2) Plaintiff only recovered part of
the relief originally sought; (3) Plaintiff’s counsel pursued a litigation strategy designed to generate
exorbitant billing hours; and (4) Plaintiff did not prevail on any claim in his Complaint, as this
case resulted in a settlement. The Court will address each of Defendants’ arguments, in turn,
below.
5
1. Unsupportable Claims
Defendants’ first contention is that Plaintiff unnecessarily prolonged this case with
unreasonable settlement demands based, in part, on advancing unmeritorious claims. Defendants
specifically refer to Plaintiff’s Age Discrimination claim, which was later dismissed voluntarily,
and his Associational Disability Discrimination claim, which the Court dismissed on summary
judgment. Defendants maintain that absent pursuing these claims, Plaintiff would have had a more
realistic starting point for settlement negotiations, and the case could have settled much earlier.
The Court, however, finds Defendants’ arguments unpersuasive.
To begin, Plaintiff attests that he brought the claim for Age Discrimination based on how
he learned his employment had been terminated. According to Plaintiff, he learned he was fired
by finding a new, younger employee sitting in his truck when he crodriguez@example.net. It was not until
after he had the opportunity to conduct discovery that Plaintiff shifted his theory of liability away
from Age Discrimination and to violations of the FMLA. Consistent with that, Plaintiff notified
Defendants that he would no longer be pursuing his Age Discrimination claim. (See Doc. 129-2.)
This was done prior to the parties submitting cross-motions for summary judgment. The Court,
therefore, cannot conclude that Plaintiff advanced this claim in bad faith.
Nor can the Court conclude that Plaintiff acted in bad faith by pursuing the Associational
Discrimination claim. Although the Court dismissed this claim on summary judgment, the
arguments that Plaintiff raised in support were far from frivolous. Accordingly, the Court finds
no justification to reduce Plaintiff’s attorneys’ fees and costs award on this basis.
6
2. Partial Success
Next, Defendants argue that Plaintiff’s attorneys’ fees award should be reduced to account
for the fact that he failed on two of the four claims enumerated in his Complaint. The Court
disagrees.
“[C]alculating the Lodestar amount does not end the inquiry on an attorney fee application
because an award based on the total number of hours reasonably expended on the litigation might
result in an excessive amount if the claimant achieved only partial success.” Robinson v. Hilton
Hosp., Inc., 2008 WL 11455040, *6 (S.D. Ohio Sept. 30, 2008) (citing Imwalle, 515 F.3d at 553).
But to be clear, “[t]he Lodestar amount may be adjusted downward if plaintiff achieved only partial
success and the claims on which plaintiff failed to prevail were unrelated to the claims on which
she succeeded, or where plaintiff failed to achieve a degree of success that justifies the fees
requested.” Id. (citing Hensley, 461 461 U.S. at 435) (emphasis added). “When claims are based
on a common core of facts or are based on related legal theories, for the purpose of calculating
attorneys[’] fees they should not be treated as distinct claims, and the cost of litigating the related
claims should not be reduced.” Imwalle, 515 F.3d at 554 (quoting Thurman v. Yellow Freight Sys.,
90 F.3d 1160, 1169 (6th Cir. 1996)); see Robinson, 2008 WL 11455040, at *6 (“Where plaintiff
has presented distinctly different claims for relief based on different facts and legal theories, fees
are not awarded for work on an unsuccessful claim.”).
Here, Plaintiff’s claims are interrelated and share a common set of facts, such that it would
be improper to reduce his attorneys’ fees award by the amount it cost to litigate his dismissed
claims. Plaintiff’s FMLA and Associational Disability Discrimination claims were all predicated
on the theory that he was fired for taking time off from work to care for his terminally-ill father.
Certainly, the same evidence used to support the FMLA claims was used to support his
7
Associational Disability claim. And, with respect to his Age Discrimination claim, Plaintiff
stipulated to its dismissal before the parties engaged in and incurred the costs of extensive
litigation.
The Court also finds that Plaintiff achieved a degree of success that justifies his attorneys’
fees award. Plaintiff reached a settlement agreement for the alleged violations of the FMLA that
compensated him near the top end of what he would have been able to crodriguez@example.net.
Accordingly, the Court finds no justification to reduce Plaintiff’s attorneys’ fees and costs award
on this basis. See Robinson, 2008 WL 11455040, at *8 (“There is no precise rule or formula for
making a determination as to the degree of success obtained by a prevailing party. Such a
determination is left to the discretion of the trial court.”) (internal citations omitted).
3. Litigation Strategy
Defendants’ third argument for reducing Plaintiff’s attorneys’ fees award is that counsel
for Plaintiff took unnecessary depositions and submitted excessively long briefs that ran up the
cost of litigation. Defendants maintain that Plaintiff deposed eleven witnesses, several of whom
provided duplicative information or information of limited value. Defendants, however, only point
to the deposition of Raymond Switala as an example. See United States v. Stewart, 628 F.3d 246,
256 (6th Cir. 2010) (“Issues adverted to in a perfunctory manner, unaccompanied by some effort
at developed argumentation, are deemed waived.”) (internal quotations and citation omitted).
Additionally, Defendants note that Plaintiff submitted an 80-page opposition brief, including 359
pages of exhibits, in response to Defendants’ Motions for Summary Judgment.
Here, the Court finds that Defendants’ arguments are misplaced. First, regarding the
deposition of Raymond Switala, Plaintiff explains that Mr. Switala was the supervisor to whom
Plaintiff reported his call-off on August 16, 2020. Considering whether Plaintiff provided
8
Defendants adequate notice of an FMLA-qualifying event was a key issue in this case, Mr.
Switala’s testimony was relevant to the litigation. Second, with respect to the length of Plaintiff’s
opposition brief, it is unclear why this would signal excessive, unnecessary effort on Plaintiff’s
part. To the contrary, Plaintiff had to oppose two Motions for Summary Judgment, that raised
separate and distinct arguments, in a single brief. It should, therefore, be expected that Plaintiff’s
response would exceed the typical length of an opposition brief. Accordingly, the Court finds no
justification to reduce Plaintiff’s attorneys’ fees and costs award on this basis.
4. Settlement vs. Victory
Finally, Defendants argue that, because this case resulted in a settlement or compromise, it
would be improper to award Plaintiff nearly one-hundred percent of his attorneys’ fees and costs.
This argument, however, ignores the fact that the parties agreed to limit the possible range of
attorneys’ fees that Plaintiff could recover in light of the settlement agreement. In other words,
Defendants’ concerns have already been taken into account. Accordingly, the Court finds no
justification to reduce Plaintiff’s attorneys’ fees and costs award on this basis.
In sum, Defendants have not presented any arguments justifying an across-the-board
reduction of Plaintiff’s attorneys’ fees and costs award. And, after reviewing the documents
submitted in this case, the Court finds sufficient evidence to support the rates Plaintiff’s counsel
claims and the hours they represent to have worked. The Court, therefore, awards Plaintiff a total
of $337,500 in attorneys’ fees and costs.
9
IV. CONCLUSION
For the reasons stated herein, the Court GRANTS Plaintiff’s Motion for Attorneys’ Fees
and Costs and awards an amount of $337,500.
IT IS SO ORDERED.
/s/ Algenon L. Marbley___
ALGENON L. MARBLEY
CHIEF UNITED STATES DISTRICT JUDGE
DATED: January 27, 2020
10
|
115 F. Supp. 2d 1172 (2000)
Casimer LEBEAU and Vernon Ashley, on behalf of themselves and all other persons similarly situated, Plaintiffs,
v.
UNITED STATES of America, Defendant.
No. Civ. 99-4106.
United States District Court, D. South Dakota, Southern Division.
September 29, 2000.
*1173 John M. Grossenburg, Winner, SD, Charles Rick Johnson, Johnson, Eklund, Nicholson, Peterson & Fox, Gregory, SD, for plaintiff.
Jan L. Holmgren, United States Attorney's Office, Sioux Falls, SD, for defendant.
James E. McMahon, Boyce, Murphy, McDowell & Greenfield, Sioux Falls, SD, Bertram E. Hirsch, Great Neck, NY, for interested party, Sisseton-Wahpeton Sioux Tribe, Spirit Lake Tribe, and Sisseton-Wahpeton Sioux Counsel of the Assiniboine and Sioux Tribes.
MEMORANDUM OPINION AND ORDER ON MOTIONS
PIERSOL, Chief Judge.
Pending before the Court are motions to intervene and to dismiss filed by The Sisseton-Wahpeton Sioux Tribe, the Spirit Lake Tribe and the Sisseton-Wahpeton Sioux Council of the Assiniboine and Sioux Tribes (collectively referred to herein as "the Tribes"). (Docs.11, 12.) Plaintiffs and the defendant filed briefs in response to the motions to intervene and dismiss and the Tribes filed a reply brief. For the reasons set forth below, the Court will grant the Tribes' motion to intervene for the sole purpose of seeking dismissal of this action under Fed.R.Civ.P. 19 and will deny the Tribes' motion to dismiss. This action will proceed among the plaintiffs and the defendant.
I. Background
This action was filed by the plaintiffs to challenge the constitutionality of a recently enacted law which has the effect of diminishing by at least 28.3995% the funds appropriated by Congress in 1968, plus accumulated interest, and apportioned in 1972 for the benefit of plaintiffs and others similarly situated to satisfy a final judgment entered by the Indian Claims Commission[1] relating to the United States' breach of two treaties[2] involving approximately 27 million acres of land ceded to the United States by the Sisseton and Wahpeton Sioux Tribes in the 19th century. See Pub.L. No. 105-387, 112 Stat. 3471 (codified at 25 U.S.C. § 1300d-21 et seq.). Pursuant to the Act of June 19, 1968 Congress appropriated nearly $6 million to satisfy the judgment entered by the Indian Claims Commission (hereinafter referred to as "the Judgment Fund"). Pub.L. No. 90-352, 82 Stat. 239. In the Act of October 25, 1972 ("the 1972 Act"), Congress apportioned 25.0225% of the nearly $6 million Judgment Fund for distribution to Sisseton and Wahpeton Mississippi Sioux Tribe lineal descendants (hereinafter referred to as "lineal descendants") who were not members of the tribes listed in the 1972 Act but could trace lineal ancestry to tribal members listed on rolls acceptable to the Secretary of the Interior. Pub.L. No. 92-555, 86 Stat. 1168 (codified at 25 U.S.C. § 1300d, et seq.). Plaintiffs are lineal descendants who have been determined to be eligible to share in the distribution pursuant to the 1972 Act, but who to this day have not received any distribution of funds under the 1972 Act. The lineal descendants' share was originally $1,469,831.50 and was estimated in October 1998 to be approximately $15.2 million. S.Rep. No. 105-379 (1998).
*1174 In an action filed in the Montana district court in 1987, the Tribes challenged the validity of the portion of the 1972 Act which apportions 25.0225% of the Judgment Fund to the lineal descendants. Sisseton-Wahpeton Sioux Tribe v. United States, 686 F. Supp. 831 (D.Mont.1988) ("Sisseton-Wahpeton I") (subsequent history omitted). The Montana District Court held that the plaintiff Tribes' claims were barred by the statute of limitations, finding that the Tribes had waited nearly fifteen years to challenge Congress' apportionment of the Judgment Fund. Id. at 834, 837-38. The Ninth Circuit Court of Appeals agreed the Tribes' claims regarding the lineal descendants' share of the Judgment Fund were time-barred. Sisseton-Wahpeton Sioux Tribe v. United States, 895 F.2d 588, 597 (9th Cir.), cert. denied, 498 U.S. 824, 111 S. Ct. 75, 112 L. Ed. 2d 48 (1990) ("Sisseton-Wahpeton II"). On remand for consideration of the possibility of amending the complaint, the Montana District Court granted summary judgment to the United States and the Ninth Circuit again affirmed the denial of relief to the Tribes. Sisseton-Wahpeton Sioux Tribe v. United States, 90 F.3d 351, 356 (9th Cir.), cert. denied, 519 U.S. 1011, 117 S. Ct. 516, 136 L. Ed. 2d 405 (1996) ("Sisseton-Wahpeton III"). During the pendency of the Tribes' claims in the federal court system, the lineal descendants did not receive any of the funds apportioned to them by the 1972 Act. In 1994, individuals claiming to be lineal descendants eligible to share in the Judgment Fund brought an action contending they were not given notice of the Judgment Fund and seeking to share in the 25.0225% apportioned to the lineal descendants pursuant to the 1972 Act. See Loudner v. United States, 108 F.3d 896 (8th Cir.1997). The Eighth Circuit ruled that the plaintiffs' claims in Loudner were not time-barred, id. at 903-04, and the Secretary of the Interior is currently in the process of determining how many additional lineal descendants will share in the Judgment Fund apportioned to the lineal descendants, see Loudner v. United States, 108 F.3d 896 (D.S.D.1995) (on remand).
In 1998, Congress enacted the Mississippi Sioux Tribes Judgment Fund Distribution Act of 1998 ("the 1998 Act"), which is the subject of the present action. Pub.L. No. 105-387, 112 Stat. 3471 (codified at 25 U.S.C. § 1300d-21 et seq.). Pursuant to the 1998 Act, the Tribes will receive at least 28.3995% of the lineal descendants' share of the Judgment Fund apportioned to the lineal descendants in the 1972 Act if a final judgment is not entered in favor of one or more lineal descendants in this action. 25 U.S.C. §§ 1300d-23(a)(1), 1300d-26, and 1300d-27. If a final judgment is entered in favor of one or more lineal descendants in this action, the Tribes will not receive a distribution under the 1998 Act, and the lineal descendants will receive the share of the Judgment Fund apportioned to them in the 1972 Act. 25 U.S.C. § 1300d-27(e).
The Tribes seek to intervene in this action for the limited purpose of filing a motion to dismiss for failure to join necessary and indispensable parties pursuant to Rule 19 of the Federal Rules of Civil Procedure. The Tribes contend they are necessary parties pursuant to Rule 19(a) and they cannot be joined as parties herein because of their sovereign immunity. The Tribes contend the United States cannot adequately represent their interests in this action in light of the government's dual trust obligations to the Tribes and the plaintiffs and in light of the past opposition to the Tribes' claims in Sisseton I, Sisseton II, and Sisseton III, supra. The Tribes contend they are indispensable parties under Rule 19(b) and this action must, therefore, be dismissed.
The plaintiffs contend that the Court should allow the Tribes to intervene only for the limited purpose of defending the validity of the 1998 Act and should deny the Tribes' motion to dismiss under Rule 19. Plaintiffs assert that if the constitutional attack as to the validity of the 1998 Act is dismissed pursuant to Rule 19, the *1175 plaintiffs should be allowed to proceed with a cause of action for damages against the United States based on the United States' breach of its trust obligations to the lineal descendants under the 1972 Act.
The United States does not oppose the Tribes' motion to intervene, but the United States contends granting the Tribes' motion to dismiss would deprive plaintiffs of any opportunity to challenge the validity of the 1998 Act even though Congress sought to assure that right to the lineal descendants. The United States contends it adequately represents the interest of the absent Tribes in this action and that the Tribes are, therefore, not necessary and indispensable parties in this action. Citing Babbitt v. Youpee, 519 U.S. 234, 117 S. Ct. 727, 136 L. Ed. 2d 696 (1997) and Hodel v. Irving, 481 U.S. 704, 107 S. Ct. 2076, 95 L. Ed. 2d 668 (1987), the United States asserts that lawsuits in which individuals allege Congress has acted in violation of their constitutional rights commonly proceed in the absence of tribes who have an interest in the litigation. Both the Tribes and the United States have the same interest in defending the constitutionality of the 1998 Act, according to the United States, which is the primary reason asserted by the United States for denying the Tribes' motion to dismiss pursuant to Rule 19.
II. Decision
The Tribes seek to intervene in this action for the sole purpose of filing a motion to dismiss for failure to join necessary and indispensable parties. Joinder of necessary and indispensable parties is governed by Rule 19 of the Federal Rules of Civil Procedure, which states in part:
Joinder of Persons Needed for Just Adjudication
(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 the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (i) as a practical matter impair or impede the person's 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 the claimed interest.....
(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 the person 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.
The Court must first inquire whether an absent person is a "necessary" party pursuant to Rule 19(a). If the absent person is not necessary as defined in Rule 19(a), the Court ends the inquiry, denies the motion to dismiss for failure to join an absent person and proceeds with the action. Gwartz v. Jefferson Memorial Hosp. Ass'n, 23 F.3d 1426, 1428 (8th Cir.1994). However, if the Court determines an absent person is a necessary party and the absent person may not be joined pursuant to Rule 19(a), then the Court must determine, pursuant to Rule 19(b), whether the action should proceed among the parties before it, or should be dismissed. Rochester Methodist Hosp. v. Travelers Ins. Co., 728 F.2d 1006, 1016 (8th Cir.1984).
*1176 The first inquiry is whether the Tribes are "necessary" parties pursuant to Rule 19(a). The Court concludes complete relief could be granted as between plaintiffs and the defendant herein. Plaintiffs seek a declaration that the 1998 Act is unconstitutional. The 1998 Act specifically provides that if a judgment is entered in favor of one or more lineal descendants in an action challenging the constitutionality or validity of distributions under the 1998 Act, then the provisions allowing distribution to the Tribes of at least 28.3995% of the lineal descendants' share of the Judgment Fund do not apply and the 1972 Act governs. See 25 U.S.C. § 1300d-27(e)(1). Therefore, if the Court were to enter a judgment in favor of the plaintiffs in this case, the matter would be settled and, contrary to the Tribes' assertion, the Tribes would not have a valid claim to share in the lineal descendants' portion of the Judgment Fund. Conversely, if the Court were to enter a judgment in favor of the defendant in this case, the Tribes would be entitled to distribution as set forth in the 1998 Act. See 25 U.S.C. § 1300d-23. The Court concludes, therefore, that the Tribes are not necessary parties under Rule 19(a)(1) because complete relief can be accorded among the plaintiffs and the defendant in the absence of the Tribes. Fed.R.Civ.P. 19(a)(1); see, e.g., Shermoen v. United States, 982 F.2d 1312, 1317 (9th Cir.1992), cert. denied, 509 U.S. 903, 113 S. Ct. 2993, 125 L. Ed. 2d 688 (1993) (holding that complete relief could be accorded among the parties absent the Tribes at issue because if the challenged act was found to be unconstitutional, the individual Indian plaintiffs would receive all the relief for which they prayed).
Although the Tribes are not necessary parties pursuant to Rule 19(a)(1), the Court must consider whether the Tribes are necessary parties pursuant to Rule 19(a)(2). The Tribes claim an interest relating to the subject of this action because they will receive a significant portion of the lineal descendants' share of the Judgment Fund if a final judgment is not entered in favor of one or more lineal descendants in this action. The Tribes further contend they have an interest in preserving their sovereign immunity.
Even if an absent person claims an interest relating to the subject of the action, the person is not a necessary party under Rule 19(a)(2) unless such person is so situated that disposing of the action in the person's absence may "(i) as a practical matter impair or impede the person's 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 [the absent person's] claimed interest." Fed.R.Civ.P. 19(a). As to the inquiry under Rule 19(a)(2)(i), the Court does not conclude that disposition of this action in the absence of the Tribes will, as a practical matter, impair or impede the Tribes' abilities to protect their interests in this action. The United States is currently defending the validity of the 1998 Act in this action. (See Answer by United States, Doc. 7.) Although the United States may not advance every argument the Tribes would like to make, the United States has expressed the willingness to advance all legitimate arguments to defend the validity of the 1998 Act despite any past arguments asserted by the United States that the Tribes were not entitled to any portion of the lineal descendants' share of the Judgment Fund.
The Tribes contend that because the United States owes a trust obligation to the plaintiffs, the United States will not adequately represent the interests of the Tribes. The Court disagrees that the existence of a trust obligation to the plaintiffs would prevent the United States from adequately representing the interests of the Tribes in defending the constitutionality of the 1998 Act in this lawsuit. In Babbitt v. Youpee, the Supreme Court did not express any concern about the United States's ability to adequately represent the interests of the absent tribes in defending the constitutionality of an act challenged by individual Indians. 519 U.S. 234, 236-45, *1177 117 S. Ct. 727, 136 L. Ed. 2d 696. In Babbitt, the individual Indian plaintiffs alleged that section 207 of the Indian Land Consolidation Act, Pub.L. No. 97-459, 96 Stat. 2519 (codified, as amended, 25 U.S.C. § 2206) ("ILCA") violated the Fifth Amendment by authorizing the taking of real property without just compensation. 519 U.S. at 236-37, 117 S. Ct. 727. The amended section of the ILCA at issue in Babbitt provided that certain fractional interests in Indian lands held by individual Indians would transfer, or "escheat," to the tribe upon the death of the owner of the interest. 25 U.S.C. § 2206; Babbitt, 519 U.S. at 236-37, 117 S. Ct. 727. In Babbitt, the Supreme Court upheld the decisions by the Ninth Circuit Court of Appeals and the Montana District Court holding the amended section was unconstitutional. 519 U.S. at 237, 117 S. Ct. 727; Youpee v. Babbitt, 67 F.3d 194 (9th Cir. 1995); Youpee v. Babbitt, 857 F. Supp. 760 (D.Mont.1994).
Prior to the decision in Babbitt, supra, a previous version of the ILCA was declared unconstitutional by the Supreme Court and the Eighth Circuit. Hodel, 481 U.S. at 718, 107 S. Ct. 2076; Irving v. Clark, 758 F.2d 1260 (8th Cir.1985). Neither the Supreme Court nor the Eighth Circuit expressed any concern pursuant to Rule 19 about the United States' ability to adequately represent the absent tribes in defending the ILCA from a constitutional challenge by individual Indian plaintiffs where the law resulted in the tribes receiving significant property that was previously granted to the individual Indian plaintiffs' ancestors. The Court finds the present case closely analogous to the factual setting in Babbitt, 519 U.S. at 236-45, 117 S. Ct. 727 and Hodel, 481 U.S. at 706-18, 107 S. Ct. 2076, wherein any trust obligation the United States may have owed to the individual Indian plaintiffs did not prevent the United States from adequately representing the interests of the absent tribes. It is interesting to note that in Hodel, the Tribes' present counsel filed a brief for the Sisseton-Wahpeton Sioux Tribe as amicus curiae urging reversal of the Eighth Circuit's decision finding the law unconstitutional and apparently did not advocate that the case should be dismissed under Rule 19 by arguing that the United States was unable to adequately represent the interest of the absent tribe in light of a conflicting trust obligation to the individual Indian plaintiffs therein. 481 U.S. at 706, 107 S. Ct. 2076.
The Tribes' attempt to distinguish Babbitt, supra, and Hodel, supra, by contending those cases did not involve a Rule 19 defense and the property interests in those cases had not vested in any tribe and may never have vested. Although the Supreme Court, the Ninth Circuit, the Eighth Circuit and the Montana District Court did not explicitly address the issue of whether the absent tribes were necessary and indispensable parties requiring dismissal under Rule 19 because the absent tribes enjoined sovereign immunity and could not be joined in the cases discussed above, the Court will assume the implications of Rule 19 were considered in those cases. See e.g., Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 111, 88 S. Ct. 733, 19 L. Ed. 2d 936 (1968) (stating that a reviewing court has an independent duty to raise sua sponte the issue of whether an absent person is a necessary and indispensable party which requires dismissal of the action). The Ninth Circuit has repeatedly raised Rule 19 issues in cases where the parties have not raised the issue in the district court. See UOP v. United States, 99 F.3d 344, 347 (9th Cir. 1996) (sua sponte raising concerns regarding joinder pursuant to Rule 19 where the parties did not raise the issue in the district court and the district court did not rule on the issue); Pit River Home & Agric. Coop. Ass'n v. United States, 30 F.3d 1088, 1099 (9th Cir.1994) (holding the Ninth Circuit may consider whether an absent person is an indispensable party to the pending litigation although the district court did not rule on the issue); CP Nat'l Corp. v. Bonneville Power Admin., 928 F.2d 905, 911 (9th Cir.1991) (same). The Ninth Circuit sua sponte raised the issue *1178 of failure to join indispensable parties both before and after its decision in Youpee, 67 F.3d at 195-200, lending support to the Court's conclusion that, although not expressly ruled upon, the issue of whether the Tribes were necessary and indispensable parties was considered by the Ninth Circuit in Youpee.
The Tribes further contend the Supreme Court's decisions in Babbitt, supra, and Hodel, supra, are distinguishable because "the law at issue in those cases dealt with the universe of tribes and with property interest that, unlike those in the case at bar, had not vested in any tribe and, depending on devise and descent choices, might never vest in any tribe. In other words, the tribal interests in those cases do not possess the constitutional dimension of the interests of the Tribes in the susan64@example.org." (The Tribes' Reply Brief, Doc. 30 at 12, n. 5.) The Court disagrees. The Tribes cannot credibly argue that their interests under Pub.L. No. 105-387 have "vested," because the Tribes will not receive a distribution under Pub.L. No. 105-387 if final judgment is entered in favor of one or more lineal descendants in this action. See 25 U.S.C. § 1300d-27(e). The Court finds that Babbitt, 519 U.S. at 236-45, 117 S. Ct. 727, and Hodel, 481 U.S. at 706-18, 107 S. Ct. 2076, compel a finding that the Tribes are not necessary parties in this action. Based upon the above discussion, the Court holds that disposition of the instant case in the absence of the Tribes would not, as a practical matter, impair or impede the Tribes' ability to protect their interests in this action. See Fed.R.Civ.P. 19(a)(2)(i).
The Tribes argue they are necessary parties under Rule 19(a)(2)(ii) because absent their involvement in this action, the United States will be subject to inconsistent obligations in light of the United States' trust obligations to both the plaintiffs and the Tribes. Under the rationale advanced by the Tribes, the United States will have inconsistent obligations regardless of whether the Tribes are parties to this action. The Tribes are essentially arguing that the United States is violating its trust obligations to the plaintiffs by seeking to defend the constitutionality of the 1998 Act in this lawsuit, and that because of the trust obligations to the plaintiffs the United States will not make all arguments which would favor the Tribes. If the Court were to accept the Tribes' argument regarding inconsistent obligations, the United States would rarely, if ever, be able to defend any statute enacted by Congress if it involves claims adverse to any particular individual Indian or Indian tribe. Cf. Babbitt, 519 U.S. at 236-45, 117 S. Ct. 727 (United States defended the validity of the Indian Land Consolidation Act against individual Indian plaintiffs' constitutional challenges); Hodel, 481 U.S. at 706-18, 107 S. Ct. 2076 (same). Pursuant to the Tribes' argument, the United States will have inconsistent obligations whether or not the Tribes are parties to this lawsuit. Therefore, disposing of this action among the plaintiffs and the defendant will not leave the United States with inconsistent obligations by reason of the Tribes' claimed interest as set forth in Rule 19(a)(2)(ii).
Based upon the above discussion, the Court concludes that the Tribes are not "necessary" parties as defined in Rule 19(a). However, even if the Tribes were necessary parties under Rule 19(a), the Court holds that "in equity and good conscience" this action should proceed among the plaintiffs and the defendant in the absence of the Tribes. It appears that the Tribes are entitled to sovereign immunity and thus cannot be joined in this action. See Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S. Ct. 1670, 56 L. Ed. 2d 106 (1978) (stating that Indian tribes possess the common-law immunity from suit traditionally enjoyed by sovereign powers, subject to the superior and plenary control of Congress). Rule 19(b) provides that if a necessary person cannot be joined as a party, the Court must evaluate whether the absent person is indispensable considering the four factors listed in Rule 19(b).
*1179 The first factor to consider is to what extent a judgment rendered in the Tribes' absence might be prejudicial to the Tribes or to the plaintiffs and defendant. The Tribes initially argue, in connection with the analysis under Rule 19(a), that a judgment in favor of the lineal descendants would not bind the Tribes. (Tribes' Brief, Doc. 13 at 5.) The Court disagrees with the Tribes' argument because Congress specifically provided that if a final judgment is entered in favor of one or more lineal descendants in an action challenging the 1998 Act, then the 1972 Act would govern and the Tribes would not receive a distribution under the 1998 Act. See 28 U.S.C. § 1300d-27(e)(1). Therefore, a judgment rendered in the absence of the Tribes would be prejudicial to them. The Tribes' interests are not, however, unprotected in this action because the United States seeks to have the 1998 Act upheld against plaintiffs' constitutional challenge. See, e.g., United States ex rel. Steele v. Turn Key Gaming, Inc., 135 F.3d 1249, 1251-52 (8th Cir.1998) (holding that the absent tribe would not be prejudiced where the tribe's interests were the same as the plaintiff's interests). Congress recognized the likelihood that one or more of the lineal descendants would seek to challenge the 1998 Act, and Congress provided the result if such a challenge succeeded. See 25 U.S.C. § 1300d-27(e)(1). In Babbitt, 519 U.S. at 236-37, 117 S. Ct. 727, and Hodel, 481 U.S. at 716-18, 107 S. Ct. 2076, it was clear that a judgment rendered in the absence of the Oglala Sioux Tribe would be prejudicial to the tribe because a holding in favor of the plaintiffs (individual tribal members) providing that the escheat provision of the ILCA was unconstitutional would result in the Oglala Sioux Tribe not receiving the escheatable interests under the ILCA. Despite the potential prejudice to the Oglala Sioux Tribe, none of the Courts considering Babbitt and Hodel, supra, expressed any concern about the United States' ability to represent the absent tribe's interest in the individual Indians' challenge to the ILCA.
The second factor under Rule 19(b) is to what extent the prejudice to the Tribes could be lessened or avoided by the shaping of relief. The Court agrees with the Tribes' assertion that if Pub.L. No. 105-387 is declared unconstitutional or otherwise invalid, there are no measures the Court could take to lessen the prejudice of such a disposition to the Tribes. Congress, however, recognized that such a disposition could occur, and explicitly stated the 1972 Act would govern in the event a final judgment was entered in favor of one or more lineal descendants. See 25 U.S.C. § 1300d-27(e)(1).
The third factor to consider under Rule 19(b) is whether a judgment rendered in the Tribes' absence will be adequate. As stated by the Court in connection with the analysis under Rule 19(a) regarding the "complete relief" inquiry and under the first factor to consider under Rule 19(b), the Court concludes a final judgment in favor of the plaintiffs in this action would be adequate to defeat the distributions to the Tribes under the 1998 Act. See 25 U.S.C. § 1300d-27(e)(1).
The fourth factor in determining whether an absent person is indispensable under Rule 19(b) is whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder. The Tribes acknowledge that absent a legislative amendment to Pub.L. No. 105-387, plaintiffs may not have an adequate remedy if this action is dismissed. The plaintiffs have been waiting for almost thirty years to receive money that was apportioned to them under the 1972 Act. The Tribes successfully delayed any distribution to the plaintiffs during the pendency of Sisseton I, Sisseton II, and Sisseton III, supra, during which time the Tribes have had the use of their portion of the Judgment Fund. Moreover, Congress recognized the potential constitutional implications of enacting the 1998 Act and Congress further recognized the lineal descendants would likely challenge the validity of the 1998 Act. See 25 U.S.C. § 1300d-27. The Court concludes the *1180 fourth factor weighs heavily in favor of a finding that the Tribes are not indispensable parties in this action because the plaintiffs would not have an adequate remedy to challenge the constitutionality of the 1998 Act if this action is dismissed.
Citing decisions from the Ninth Circuit, the Tribes contend that their interest in preserving their sovereign immunity outweighs plaintiffs' interest in litigating their claim that the 1998 Act is unconstitutional or otherwise invalid. See Clinton v. Babbitt, 180 F.3d 1081, 1090 (9th Cir.1999); Pit River, 30 F.3d at 1102-03; Quileute Indian Tribe v. Babbitt, 18 F.3d 1456, 1460-61 (9th Cir.1994); Shermoen v. United States, 982 F.2d 1312, 1317-18 (9th Cir.1992); Confederated Tribes of Chehalis Indian Reservation v. Lujan, 928 F.2d 1496, 1499-1500 (9th Cir.1991); Fluent v. Salamanca Indian Lease Authority, 928 F.2d 542, 548 (2nd Cir.), cert. denied, 502 U.S. 818, 112 S. Ct. 74, 116 L. Ed. 2d 48 (1991); Enterprise Management Consultants, Inc. v. United States ex re. Hodel, 883 F.2d 890, 894 (10th Cir.1989); Wichita and Affiliated Tribes of Oklahoma v. Hodel, 788 F.2d 765 (D.C.Cir.1986); Lomayaktewa v. Hathaway, 520 F.2d 1324 (9th Cir.1975), cert. denied, 425 U.S. 903, 96 S. Ct. 1492, 47 L. Ed. 2d 752 (1976). All of the cases cited by the Tribes in support of the argument that their sovereign immunity outweighs the plaintiffs' interest in litigating their claim either involved conflicting claims asserted by various tribes in relation to Indian lands or claims related to contracts, leases or agreements to which the absent tribes were parties. Clinton, 180 F.3d at 1083-86 (tribal members sought to challenge, on equal protection principles, the terms of proposed leases with an absent tribe pursuant to an agreement entered into by the absent tribe); Pit River, 30 F.3d at 1092-94, (group of Indian families sought a declaration that they were the beneficial owners of a certain piece of real property despite the Secretary of the Interior's declaration that the absent tribe was the beneficial owner); Quileute, 18 F.3d at 1457-59 (intertribal dispute concerning governance of reservation lands); Shermoen, 982 F.2d at 1314-17 (intertribal conflict regarding profits from reservation land); Confederated Tribes, 928 F.2d at 1497-99 (intertribal conflict where plaintiffs were seeking to challenge the United States' continuing recognition of the absent tribe as the sole governing authority for a reservation); Fluent, 928 F.2d at 543-45 (lessees of tribal lands sought to compel the absent tribe, as lessor, to renew their leases for up to ninety-nine years); Enterprise Management, 883 F.2d at 893 (party to a bingo management contract with an absent tribe sought to obtain validation of the contract under 25 U.S.C. § 81); Wichita, 788 F.2d at 767-68 (intertribal conflict regarding proceeds from Indian land); Lomayaktewa, 520 F.2d at 1324-25 (tribal members sought to void lease entered into by absent tribe).
An additional case cited by the Tribes in support of the argument that a necessary party's sovereign immunity outweighs the plaintiffs interest in litigating his claim involved a tribe seeking to obtain validation of a compact with the State of Kansas regarding gambling operations on the tribe's reservation where the Supreme Court of Kansas had held the compact was not approved by an official empowered to do so under state law. Kickapoo Tribe of Indians v. Babbitt, 43 F.3d 1491, 1493-97 (D.C.Cir.1995). In Kickapoo it was determined that the State of Kansas could not be joined due to its sovereign immunity and that as a party to the compact at issue it would be prejudiced by a judgment therein. 43 susan64@example.org. Moreover, the United States could not represent the State's interests in light of the United States' trust obligations to the plaintiff tribe. Id. at 1499.
The Court concludes the instant case is distinguishable from all of the cases cited by the Tribes in support of their argument that the Tribes' sovereign immunity outweighs the lineal descendants' interest in litigating their claim. In this case, unlike the cases cited by the Tribes, the *1181 United States is in a position to adequately protect the interests of the Tribes in defending the validity of the 1998 Act. The United States was in a similar position in Babbitt, 519 U.S. at 236-245, 117 S. Ct. 727 and Hodel, 481 U.S. at 706-718, 107 S. Ct. 2076, wherein the Supreme Court, the Ninth Circuit and the Eighth Circuit did not find it necessary to raise any Rule 19 issues or question the United States' ability to represent the interests of the absent tribe.
The ultimate inquiry under Rule 19(b) in determining whether an absent person is indispensable, is "whether in equity and good conscience the action should proceed among the parties before it." The plaintiffs are lineal descendants who have waited nearly thirty years to receive their share of the Judgment Fund apportioned to them in 1972. See 25 U.S.C. §§ 1300d-3, 1300d-4; Sisseton-Wahpeton Sioux Tribe, 90 F.3d at 355 (stating the Secretary of the Interior had determined the lineal descendants were eligible to receive a $746.00 share of the Judgment Fund); Loudner, 108 F.3d at 898-900 (reciting history of the 1972 Act and stating that as of 1997 the Secretary had not distributed the lineal descendants' share of the Judgment Fund). The Tribes have received their portion of the Judgment Fund as apportioned in the 1972 Act. See 25 U.S.C. § 1300d-4. The Tribes' actions in initiating and pursuing lawsuits from 1987 to 1996 resulted in plaintiffs not receiving any distribution under the 1972 Act, at least during the pendency of those lawsuits. The Tribes now seek to prevent the lineal descendants from litigating their claim that the 1998 Act violates their Fifth Amendment rights by taking a significant portion of their share of the Judgment Fund and distributing it to the Tribes. Considering all of the factors listed in Rule 19(b) and based upon the above discussion, the Court finds equity and good conscience dictate that the validity of the 1998 Act be decided in this action among the plaintiffs and the defendant, and that the Tribes are not indispensable parties herein. The Court concludes the Tribes are not necessary and indispensable parties pursuant to Rule 19 and this action will proceed among the plaintiffs and the defendant. Accordingly,
IT IS ORDERED:
1. That the Sisseton-Wahpeton Sioux Tribe, the Spirit Lake Tribe and the Sisseton-Wahpeton Sioux Council of the Assiniboine and Sioux Tribes' Motion to Intervene, Doc. 11, is granted for the sole purpose of allowing the moving Tribes to seek dismissal of this action under Rule 19 of the Federal Rules of Civil Procedure.
2. That the Sisseton-Wahpeton Sioux Tribe, the Spirit Lake Tribe and the Sisseton-Wahpeton Sioux Council of the Assiniboine and Sioux Tribes' Motion to Dismiss Pursuant to Rule 19, Doc. 12, is denied.
3. That the Sisseton-Wahpeton Sioux Tribe, the Spirit Lake Tribe and the Sisseton-Wahpeton Sioux Council of the Assiniboine and Sioux Tribes are not joined as parties to this action.
NOTES
[1] Sisseton and Wahpeton Bands or Tribes, et al. v. United States, 18 Ind.Cl.Comm. 526-a (1967).
[2] The Sisseton and Wahpeton Sioux Tribes ceded approximately two million acres of land to the United States by the Treaty of Prairie du Chian of July 15, 1830 (7 Stat. 328) and approximately 25 million acres of land by the Treaty of Traverse des Sioux of July 23, 1851 (10 Stat. 949). See Sisseton-Wahpeton Sioux Tribe v. United States, 686 F. Supp. 831, 833 (D.Mont.1988) (subsequent history omitted).
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582 S.W.2d 242 (1979)
ILLINOIS EMPLOYERS INSURANCE COMPANY OF WAUSAU and Employers Mutual Liability Insurance Company of Wisconsin, Appellants,
v.
Shorty Ray LEWIS, Appellee.
No. 8263.
Court of Civil Appeals of Texas, Beaumont.
May 17, 1979.
Rehearing Denied May 31, 1979.
*243 Mark T. Price, Houston, for appellants.
Joe H. Tonahill, Jasper, for appellee.
CLAYTON, Justice.
Plaintiff filed this suit in the court below seeking to set aside an award for worker's compensation by the Industrial Accident Board. Defendants, Illinois Employers Insurance Company of Wausau and Employers Mutual Liability Insurance Company of Wisconsin, appeal from a default judgment entered by the trial court pursuant to Tex. R.Civ.P. 168 and 215a(c) awarding plaintiff compensation in the sum of $31,477.44 plus $3,696.90 in medical benefits.
Defendants' first five points of error complain of the trial court's action in granting plaintiff's motion to strike defendants' pleadings because of the failure to answer plaintiff's written interrogatories.
Plaintiff filed his petition on June 6, 1978. Defendants (by counsel other than counsel representing defendants at time of rendition of judgment) filed their original answer on July 1, 1978. On July 7, 1978, plaintiff filed his Request for Admissions of Fact and his written interrogatories in the District Clerk's office. Defendants' answer to the Request for Admissions was filed July 17, 1978. The written interrogatories were not served upon defendants' counsel until July 14, 1978. Pursuant to Tex.R. Civ.P. 168, the answers to such interrogatories were not due to be filed until August 14, 1978. On August 4th, ten days before the due date for filing answers to the interrogatories, the court set the case for trial for August 29th. On August 16th, the District Clerk sent a letter to defendants' counsel stating the attorney for plaintiff had requested this case be placed on the non-jury docket for August 29 and stating further that plaintiff's counsel advised he would be ready for trial at that time. Plaintiff had previously asked for a jury trial and had paid a jury fee. On August 21, defendants forwarded to the District Clerk the proper jury fee deposit.
On August 21, plaintiff filed his reply to defendants' motion for continuance wherein he stated, "the plaintiff has submitted Interrogatories to the defendant[s].... These should be answered by the defendant[s] in ample time prior to the trial date of August 29th." This statement was made seven days after the due date for filing such answers. No complaint for late filing was made at this time.
On August 28, defendants filed their motion in opposition to the withdrawal of the case from the jury docket. Plaintiff's motion for sanctions pursuant to Tex.R.Civ.P. 168 and 215a was filed on August 28th, one day prior to the trial date. On August 29th, plaintiff and his counsel and defendants' counsel appeared before the court, and plaintiff presented and urged his motion for *244 sanctions. The statement of facts contains no testimony from any witness on this day. It reflects only discussions and statements of counsel. At this hearing, defendants' counsel stated that the interrogatories "were served upon Mr. Willard Tinsley, who was the attorney of record for the defendants on August 14, 1978.... Upon it being called to my attention they had not been answered ... Mr. Tinsley is out of the country, has been for some time.... I immediately set forth my own investigative efforts in order to get the information necessary to prepare answers to written interrogatories." The court did not rule upon the motion at that time but reset it for Friday of that week (September 1).
Defendants filed their answers to the written interrogatories approximately fifteen minutes before the court resumed the hearing on September 1. When the hearing was resumed, plaintiff offered in evidence the written interrogatories, plaintiff's request for admissions and defendants' answers thereto, medical records of Buna Medical Center, plaintiff's deposition, plaintiff's petition, and plaintiff's answers to defendants' written interrogatories, and then requested the court to grant the motion for sanctions. Defendants then called to the attention of the court that defendants' answer to the interrogatories had been filed. The court granted the motion for sanctions, ordered that defendants' answer be stricken and default judgment "will be entered for the plaintiff. The amount of default judgment will be taken under advisement by the court until such time as the court has had opportunity to read the deposition and the other instruments." Whereupon defendants excepted to the ruling and demanded a trial by jury on the "damage issue, at least the compensation." This request was denied.
We believe it is significant to point out that the defendants' answer to plaintiff's request for admissions of facts admitted that plaintiff was an employee of McDonald Lumber Company on January 2, 1978; that he was accidentally injured while working for such employer on said date, while in the course of his employment; that his employer and defendants had actual notice of such accidental injury within thirty days from date of injury; that notice of injury and claim for compensation was duly and timely filed with the Industrial Accident Board; that if such notices were not timely filed good cause existed for failure to so file and that all conditions precedent to the acquisition of jurisdiction of the court had been fully complied with by the plaintiff. Defendants further admitted all requests necessary to the establishment of plaintiff's wage rate. These admissions, and others, contained in the request, covered the same subject matter as those inquired about in the written interrogatories. In view of these admissions, plaintiff was in a position to proceed to trial with only the burden of proving the extent and duration of his injuries.
Tex.R.Civ.P. 168 provides:
"If a party, except for good cause shown, fails to serve answers to interrogatories... the court ... may, on motion and notice, make such orders as are just, including those authorized by paragraph (c) of Rule 215a."
Tex.R.Civ.P. 215a(c) provides for the imposition of penalties including striking of the pleadings, depriving a party of his grounds for relief or his defense or enter a judgment by default, or make such other order with respect thereto as may be just.
Tex.R.Civ.P. 168 and 215a are designed to give the trial court an expeditious procedure for insuring the effectiveness of pretrial discovery. The authorized sanctions are not intended to be arbitrary and exclusive, but flexible and plural, vesting in the trial court broad discretion to fashion a remedy which will secure compliance with its orders and deter future non-compliance. Dow Chemical Co. v. Benton, 163 Tex. 477, 357 S.W.2d 565 (1962); Firestone Photographs, Inc. v. Lamaster, 567 S.W.2d 273 (Tex.Civ.App.Texarkana 1978, no writ); Plodzik v. Owens-Corning Fiberglas Corp., 549 S.W.2d 52 (Tex.Civ.App.Austin 1977, no writ); Pena v. Williams, 547 S.W.2d 671 (Tex.Civ.App.San Antonio 1977, no writ).
*245 The office of sanctions is to secure compliance with the discovery rules, not to punish erring parties. Ebeling v. Gawlik, 487 S.W.2d 187 (Tex.Civ.App.Houston [1st Dist.] 1972, no writ); Robison v. Transamerica Insurance Co., 368 F.2d 37 (10th Cir. 1966).
The choice of the appropriate sanctions is for the trial court rather than the appellate court, and, as long as such sanctions are within the authority vested in the trial court, they will not be overturned unless they constitute a clear abuse of discretion. U. S. Leasing Corp. v. O'Neill, Price, Anderson & Fouchard, Inc., 553 S.W.2d 11 (Tex.Civ.App.Houston [14th Dist.] 1977, no writ).
The application of the sanction of depriving a party of the right to present his grounds for relief or his defense, thereby subjecting him to the rendition of a default judgment against him, is a harsh remedy, and the court's action in refusing to apply such sanctions will stand in the absence of a showing of abuse of discretion. Hankins v. Haffa, 469 S.W.2d 733, 738 (Tex.Civ.App. Amarillo 1971, no writ).
Under the facts stated above, the action of the trial court in granting plaintiff's motion for sanctions, wherein it was ordered that defendants' answer be stricken and default judgment entered against them, was clearly an abuse of its discretion. Moreover, the granting of such sanctions has been held to be a clear abuse of discretion when the answers to the interrogatories were on file with the court at the time the sanctions were imposed. Young Companies, Inc. v. Bayou Corp., 545 S.W.2d 901 (Tex.Civ.App.Beaumont 1977, no writ).
We have found no cases, and none have been cited, authorizing a trial court to strike a defendant's pleadings and enter a default judgment for the plaintiff for the failure to answer interrogatories in the absence of a refusal to comply with an order of the court compelling the filing of such answers.
In every case cited by the parties in their briefs, wherein such sanctions have been upheld, there had been a previous order entered by the court compelling the defaulting party to comply with the discovery rules. See Henson v. Citizens Bank of Irving, 549 S.W.2d 446 (Tex.Civ.App.Eastland 1977, no writ); Rainwater v. Haddox, 544 S.W.2d 729, 731 (Tex.Civ.App. Amarillo 1976, no writ); Pena v. Williams, supra; Plodzik v. Owens-Corning Fiberglas Corp., supra; Eberling v. Gawlik, supra; U. S. Leasing Corp. v. O'Neill, Price, Anderson & Fouchard, Inc., supra; Hankins v. Haffa, supra; Young Companies, Inc. v. Bayou Corp., supra.
Tex.R.Civ.P. 168 and the sanctions authorized by Tex.R.Civ.P. 215a(c) do not literally require a party to obtain an order compelling answers to interrogatories before moving for sanctions against an adverse party. However, in view of the harsh penalties provided in Rule 215a(c) we hold that it is incumbent upon a party to file a motion to compel answers to interrogatories, to obtain a court order thereon and to show a refusal or failure to comply with such court order before a court is authorized to grant a motion for sanctions and impose the specific penalties authorized by Rule 215a(c).
Defendants next complain of the trial court's action in refusing them a trial by jury on the issue of damages. As previously stated, the plaintiff had demanded a jury and paid the required jury fee. At plaintiff's request the case was removed from the jury docket and placed on the non-jury docket. Upon being so informed, defendants paid a jury fee and objected to the withdrawal from the jury docket and requested a jury trial on the issue of damages or compensation.
Tex.R.Civ.P. 220 provides that, when a party has paid the fee for a jury trial, he shall not be permitted to withdraw the cause from the jury docket over the objection of the parties adversely affected. Defendants objected to the withdrawal from the jury docket and paid a jury fee after notice of such withdrawal. They objected to such procedure at the time of trial and *246 demanded a jury on the trial of the issue of damages. Under these circumstances, the court was not authorized to remove the cause from the jury docket. Rainwater v. Haddox, supra; White Motor Co. v. Loden, 373 S.W.2d 863, 865 (Tex.Civ.App.Dallas 1963, no writ). Moreover, Tex.R.Civ.P. 243 provides that "if the cause of action is unliquidated or be not proved by an instrument in writing, the court shall hear evidence as to damages and shall render judgment therefor, unless the defendant shall demand and be entitled to a trial by jury...." (Emphasis supplied.)
The judgment by default did not dispense with the necessity for evidence of plaintiff's unliquidated damages. Tex.R. Civ.P. 243; Morgan Express, Inc. v. Elizabeth-Perkins, Inc., 525 S.W.2d 312, 314 (Tex. Civ.App.Dallas 1975, writ ref'd); Rainwater v. Haddox, supra. Upon an inquiry into the amount of unliquidated damages after a default judgment, the defendant has the right to be present, to interpose objections to testimony offered by plaintiff's witnesses and to cross-examine them in order that, by the exclusion of improper evidence, a proper judgment may be rendered on competent and sufficient evidence. Rainwater v. Haddox, supra; Maywald Trailer Co. v. Perry, 238 S.W.2d 826 (Tex.Civ.App.Galveston 1951, writ ref'd n. r. e.).
Under the provisions of Tex.R.Civ.P.220 and 243, defendants' having objected to plaintiff's withdrawal of the case from the jury docket, and demanded a jury and paid the jury fee, the court was not authorized to deny defendants a jury trial on the issue of damages. This point is sustained.
In view of our disposition of this appeal, we deem it unnecessary to discuss the other points of error urged by defendants.
The judgment of the trial court is reversed, and the cause is remanded.
REVERSED and REMANDED.
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This is an appeal from a judgment of the Circuit Court of St. Louis County in favor of defendant J. Fred Ellis in an action upon a promissory note of which defendant was indorser. The note was for the principal sum of $14,750. The note was dated at Springfield Missouri, June 18, 1920. It was payable in 120 days from date. C.W. Rogers was the maker. The American Savings Bank of Springfield and defendant J. Fred Ellis were the payees. Defendant Ellis indorsed the note for the accommodation of the maker Rogers, before the latter delivered it to the bank and received payment of the named consideration. Plaintiffs as the legal holders and owners of the note by assignment of the American Savings Bank sued defendant indorser for the balance claimed to be due, namely $10,604.50.
The defendant, by answer, admitted that he signed and indorsed the note and its predecessor. He pleaded in discharge of his liability that his signature was procured by fraud and misrepresentation; that the time of payment of the note was extended without defendant's knowledge or consent; that either the time of payment of the note sued on was further extended or it was paid by the acceptance by the American Savings Bank from Rogers of two notes, one for $10,000 and one for $4,750; that the note was paid by the maker, C.W. Rogers; that usury was charged upon the note, of all of which *Page 454
plaintiffs, as president and cashier respectively of the American Savings Bank had knowledge and to the doing of all which they were parties. Plaintiffs assign as errors the refusal of the trial court to give a requested instruction in the nature of a directed verdict for plaintiffs, none of the defenses having been made out by defendant; the refusal to give five requested instructions withdrawing from the consideration of the jury the issues of fraudulent procurement of defendant's signature, payment and extensions of time of payment. They also charge error in the giving on behalf of defendant of instructions submitting these issues, for the like reason namely, absence of substantial evidence. The trial court gave an instruction withdrawing the issue of usury. It thus appears that the question for our decision is whether there was substantial evidence offered in support of the submitted defenses to sustain the verdict of the jury in favor of defendant.
[1] I. Defendant's answer and the undisputed evidence shows that the note sued on, dated June 18, 1920, was a renewal of a note for a like amount, namely $14,750, dated December 18, 1919, executed by C.W. Rogers, payable six months after date to the order of defendant, J. Fred Ellis, indorsed by him and then discounted by Rogers with the American Savings Bank. It is not disputed that, at and before December 18, 1919, and thereafter until the State Finance Department closed the bank in November, 1923, plaintiff, John Aven, was president and plaintiff Bert Ellis, was cashier of the bank. It is also conceded that, at the times of the indorsement of the mentioned notes, defendant J. Fred Ellis was in the life insurance business; that he lived at Mountain Grove near Springfield, Missouri, that he frequently visited Springfield and that he did business with the American Savings Bank. Defendant Ellis knew the plaintiffs for a long time, the plaintiff Bert Ellis for thirty-five years. Plaintiff Ellis was best man at the wedding of defendant Ellis. They were not related.
On December 18, 1919, the date of the execution of the first note, both plaintiffs and defendant testified, defendant Ellis entered the bank and found plaintiffs there in the company of C.W. Rogers whom defendant had not met before. Defendant Ellis visited the bank that day in response to a suggestion of plaintiff Ellis. When defendant Ellis entered the bank, he testified, plaintiffs introduced him to Rogers and then they took him to the directors' room and urged him to indorse Rogers' note for $14,750. Defendant testified concerning this conference with plaintiffs in the directors' room; "First one talked then the other, about this man sitting out in front: `This man sitting out in front is worth over $300,000; owns two *Page 455
banks, one in Picher, Oklahoma, one in Perrin, Texas. Now, this is a deal that you might be interested in. It is a deal that you can't go back home and talk about to "Ade."' That is my wife. `Ada' is her name, but that is what we call her. They told me about his Buffalo, Missouri, holdings. They told me that he owned a lot of property in Buffalo, Missouri. (Colloquy omitted.)
"Q. What did Mr. Aven say now to you? A. This man owns property at Buffalo, Missouri. That is in Dallas County. He owns the two banks. He owns property in Baxter Springs, Kansas, that they knew about, that the rent income was over $700 a month. They knew, he said, over $300,000 was his worth. They had made him a prior loan there in the bank, but his balance now due on it was only $4,000. However, they had $24,000 of security for that four. This $24,000 of security consisted of notes and deeds of trust that they had investigated in and around Buffalo, Missouri, that they knew were good. Now, the man wants some more money. He wants to borrow $14,750. And that, added to the four made a loan too big for the bank. This $14,750 would be too big a note for the bank unless it was done in a three-cornered way; and they wanted to make me that note, me sign it on the back and appear, as it does appear, the indorser. Now, that is how I came to sign the note."
These representations are substantially the same as the allegations in the answer charged to have been made, to have been false, to have been known to plaintiffs to be false, and to have been relied upon by defendant, at the times of the indorsement of both notes. Defendant Ellis also testified that, at this conference, plaintiff Aven, president of the American Savings Bank, said to defendant: "`This man is this kind of banker: Of course, he could borrow this money out of his own bank, but he is the kind of banker that won't borrow money out of his own bank.' He didn't tell me at that time that Rogers was connected with a bank that had been closed. He didn't tell me what he was getting this money for. He needed the money and wouldn't borrow it out of his own bank because he was the kind of banker that didn't want his own paper in his own bank. I didn't know at the time that Rogers had a closed bank at Picher, Oklahoma. I didn't know that the collateral they told me they had $24,000 worth of collateral, was borrowed in order that he might open a closed bank. Mr. Ellis was present at the time Mr. Aven was talking."
Both plaintiffs (Bert Ellis in his testimony in chief) testified that, at the time of Rogers' presence in Springfield on December 18, 1919, Rogers was heavily interested in a National Bank at Picher, Oklahoma, which bank had been closed. Rogers had made a previous visit to Springfield to procure funds necessary to open his national bank. On that occasion, upon the testimony of plaintiffs and of Rogers, the plaintiffs and Rogers went to Kansas City, where the plaintiffs *Page 456
aided Rogers in borrowing $20,000. For this service the plaintiffs had charged Rogers $5,000. When Rogers returned to Springfield, Missouri, December 18, 1919, it was for the purpose of procuring $11,000 additional funds, the money which had been obtained in Kansas City not having been a sufficient addition to the assets to cause the national bank examiner to authorize the reopening of the closed csmall@example.net. Before defendant J. Fred Ellis arrived in the bank on the morning of December 18, 1919, or had any knowledge of Rogers or of his mission, the plaintiffs, by the testimony of plaintiff Bert Ellis, had talked to Rogers about what they personally would charge him for causing the bank of which they were the chief officers to lend him $11,000. They did in fact charge him $3,750, being the difference between the principal of the note, $14,750 and $11,000, the amount given to Rogers. And this commission charge, Rogers testified, he and plaintiffs agreed upon before defendant was mentioned in the transaction. While the issue of usury arising out of the commission of $3,750, charged and paid, was withdrawn by the court, that transaction, admitted by plaintiffs, was testimony going to the proof of fraud in the procurement of defendant's indorsement of the note. It is true that plaintiffs testified that they paid to defendant about ten days after the indorsement of the first note, $1,000 as defendant's share of the commission; that defendant bargained with Rogers for this commission, and also concerning the collateral which Rogers was to pledge; that defendant had full knowledge of the closed bank at Picher, Oklahoma; that plaintiffs did not confer with defendant about his indorsement of the note, and that they did not make the representations charged. But the contrary testimony of defendant on all these points and of Rogers on some of them which were within his knowledge, presented issues of fact for the determination by the jury.
Without further narrative of the evidence on this point, we state that, in our opinion, defendant upon the case made, was entitled to have submitted to the jury the issue of fraud. A tendency of the courts, pertinent to this assignment and to the two next succeeding ones, is stated in 26 Corpus Juris, 1144, and quoted with approval in Monsanto Chemical Works v. American Zinc, Lead S. Co. (Mo.), 253 S.W. 1006, l.c. 1009: "The tendency of modern decisions is not to extend but to restrict the rule requiring diligence, and similar rules, such as caveat emptor
and the rule granting immunity for dealer's talk, and to condemn the falsehood of the fraud feasor rather than the credulity of his victim."
[2] II. Plaintiffs complain that the failure of defendant Ellis to repudiate his agreement to endorse Rogers' note upon discovery of *Page 457
Rogers' financial condition and his failure to return the consideration of $1,000 bars his defense of fraud.
This assignment disregards defendant's testimony that he did not receive $1,000 in payment for his indorsement of the note. It ignores the testimony of Rogers that he did not agree to pay defendant $1,000 as plaintiffs allege, to become his indorser. Surely defendant should not be held to the duty to repay $1,000 upon plaintiffs' controverted testimony that he received that sum for indorsing the note. But, if we assume as true plaintiffs' testimony that defendant agreed with Rogers to indorse the note in consideration of $1,000, that was an independent agreement separate from the contract with the bank evidenced by the note in suit. And Rogers, not plaintiffs, by their own evidence, paid the money out of the loan of $14,750 made by the bank. In the circumstances defendant may set up against the plaintiffs fraud practiced by them in discharge of his liability to them as holders of the note, without refunding the one thousand dollars. [Pioneer Stock Powder Co. v. Goodman, 201 S.W. 576.] Any right to a refund, which might exist, was personal to Rogers and was of no avail to plaintiffs. Defendant's agreement to indorse was almost simultaneous with his actual indorsement of the note. This is not an action in equity in which defendant sought affirmative relief. His defense of fraud was not lost to him merely because he did not assert it until plaintiffs, as assignees of the American Savings Bank, sued him upon the note. Upon the only occasion that appellants gave sign to defendant that they looked to him upon his indorsement, namely when plaintiff Fred Ellis wrote a letter to defendant in December, 1924, defendant in effect disavowed liability. For these considerations we rule against plaintiffs their objection that defendant did not repudiate his agreement to indorse the note and that he did not refund $1,000 which plaintiffs allege was a consideration for defendants' signature of the note.
[3] III. Neither do we see merit in the assignment that the representations concerning which defendant testified were merely expressions of opinion and therefore not fraudulent misstatements of fact. Expressions as to values of property and as to the financial worth of persons sometimes may be opinions and again they may be statements of fact. We are of opinion that in this case the statements were of facts under the rule stated in Finke v. Boyer, 331 Mo. 1242, 56 S.W.2d l.c. 375, and cases and authorities there cited. It is safe to say that bankers, of all men, make it their business to have factual knowledge of the worth of those who borrow from them and of the value of property that enters into their computation of the financial standing of those with whom they deal. It is also true that to bankers in an especial sense is attributable the rule stated by *Page 458
Pomeroy (2 Pom. Eq. Juris. (35 Ed.), sec. 878, and quoted in Stonemets v. Head, 248 Mo. 243, 154 S.W. 108, l.c. 114): "`There is still another and perhaps more common form of such misrepresentation. Wherever a party states a matter, which might otherwise be only an opinion, and does not state it as the mere expression of his own opinion, but affirms it as an existing fact material to the transaction, so that the other party may reasonably treat it as a fact, and rely and act upon it as such, then the statement clearly becomes an affirmation of fact within the meaning of the general rule, and may be fraudulent misrepresentation. The statements which most frequently come with this branch of the rule are those concerning value.'"
[4] IV. The first extension of payment of the note sued upon is alleged to have been made on February 7, 1921, for the period ending February 18, 1921. If it was indeed an extension it is not disputed that defendant did not agree to it. And the law is settled that, in such circumstances, he was no longer liable. The major facts in evidence are that the note sued upon bears this indorsement: "Interest indorsement, February 7, 1921, $1,418.82 to February 18, 1921." The note was dated June 18, 1920. Plaintiff Bert Ellis on the witness stand calculated the interest at 8% per annum from date to February 18, 1921, a period of eight months, to be $786.64. Obviously, therefore, a payment of $1,418.82, if applied wholly to interest would cover the interest from the date of the note, June 18, 1920, to August 30, 1921, a period of one year and seventy-three days. But Bert Ellis testified it was his understanding with Rogers, at the time of the payment of $1,418.82 on February 7, 1921, that $750 was to be applied to principal, and the balance $686.82, to interest for a little over seven months. Plaintiff Ellis also stated that he gave oral instructions to that effect to the note teller through the assistant cashier. However, the ledger sheet reflected the payment of $1,418.82 as a credit wholly to interest. The note, sued upon and offered in evidence by plaintiffs, showed the like application of the credit. The petition did not recite an application to principal of any part of the payment of $1,418.72. Plaintiffs' given instruction on the measure of debt reflects the application of the whole sum of $1,418.82 to interest.
A further fact, bearing on the question of extension is that the note in suit, dated June 18, 1920, and offered in evidence, bore the words originally: "Due October 18, 1920." These words were delineated and after them were written the words: "Due February 18, 1921." Plaintiff Bert Ellis, cashier of the American Savings Bank, at the time of these transactions, and, by his testimony, a frequent scrutinizer of notes due the bank, read these notations of due dates into the *Page 459
record. He contented himself with the statement that he did not make the erasure and change, and that he did not know the author.
A last fact on this phase of the case is that Rogers, the maker of the note and the payer to the American Savings Bank of $1,418.82 on February 7, 1921, testified as follows concerning a conversation with Cashier Ellis at the time of the payment: "Q. Did you have any conversation with Bert Ellis at that time about extending the note? A. Yes, we did. They were crowding on the note a little bit; that is, they were being crowded a little at the bank, the way they explained it to me, and they wanted to keep the note a future-due note instead of past-due. It seemed as though the bank examiner was howling on past-due notes and they wanted future-due paper.
"Q. Detail all the conversations that you had there with Bert Ellis with reference to this interest payment? A. That is about all there is to it. He just was extending the note up for —
"MR. FINLEY: Now, I object to that as a conclusion.
"THE COURT: That may be stricken out. What did he say? That is proper testimony: What did he say? A. He just said by making that payment we would get the note in shape and it would be a future-due note, instead of a past-due note, to carry in his case."
Upon this evidence we do not hesitate to rule that the trial court correctly decided to submit to the jury the question whether the transactions of February 7, 1921, operated to postpone the date of payment.
We are quite ready to follow the decisions of this court, cited by plaintiffs, holding that a promise of extension upon a note, in order to discharge a surety thereon, must be such as will prevent the holder from bringing an action against the principal; and the taking of interest in advance will not constitute such a promise. [Hosea v. Rowley, 57 Mo. 357; Coster v. Mesner,58 Mo. 549; St. Joseph Fire Marine Insurance Co. v. Hauck,71 Mo. 465.] But the facts here go beyond the facts in those cases, and are sufficient to authorize a submission to the jury of the issue of extension upon the authority of those cited cases.
[5] V. A further defense which defendant pleaded in discharge of his liability as an indorser and which the court submitted to the jury was based on the fact that American Savings Bank, without the knowledge or consent of defendant accepted two notes dated June 16, 1922, for the principal sums of $10,000 and $4,750, respectively, payable on demand to its order and executed by C.W. Rogers as maker, and that the bank also accepted two like notes dated June 9, 1923, in renewal of the first two notes. The sum of each pair of these notes equals the principal of the note sued on, namely, $14,750. Defendant *Page 460
pleads that the American Savings Bank received and accepted these two notes either in payment of or in extension of the time of payment of the indorsed note. While the smaller of the two notes is not fully exhibited in the abstract of the record, all witnesses agree that certain collateral which secured the indorsed note, namely a diamond and what is called the Martin note for $7,000, became the collateral of the smaller note for $4,750. Plaintiffs contend that these two smaller notes were collateral of the indorsed note, that there is no evidence that the bank took them in payment or extension of the indorsed note, and therefore that these smaller notes did not discharge defendant from his liability.
The only testimony of C.W. Rogers concerning the making of the two notes was as follows: "Q. Now, later, state to the jury whether or not you executed two new notes, one for $10,000 and one for $4,750 on account of this transaction. A. I did." Plaintiff Bert Ellis testified that the $14,750 loan was excessive in the American Savings Bank. "In other words, under the law we couldn't loan one individual that amount of money; so we sought some convenient way of carrying it to try to avoid criticism from the State Banking Department; and we had Mr. Rogers loan — to execute collateral notes; one of $10,000, and one of $4,750, that we might carry it in some way that would avoid criticism." His further testimony emphasized and enlarged the contention of plaintiffs that these two notes were collateral to the note sued upon.
Plaintiffs, in support of their contention that the two notes for $10,000 and $4,750 did not discharge the note for $14,750, urge as an applicable Missouri rule that, in order to make a renewal note effective as payment of the original note there must be present a special agreement to that effect. [Citizens Bank of New Franklin v. Gaines, 278 S.W. 784.] This court stated the doctrine in the old case of Appleton v. Kennon, 19 Mo. 637, 641, in the words: "The accepted note or bill must, by the agreement of the parties, be taken expressly as payment, otherwise it is but payment sub modo; it is not an extinguishment or satisfaction of the debt until the note be paid; then it becomes a full payment and discharge. The parties must intend at the time, that the receipt of the note of such third person shall be a payment, shall extinguish the debt, or it will be a conditional payment; that is, a payment when the note is paid."
Under the undisputed evidence, the American Savings Bank received the proceeds of the two smaller notes, whether they were collateral to or in discharge of the note in suit. On January 31, 1923, the American Savings Bank acting through plaintiffs who then were its president and cashier respectively sold to the Farmers' Bank of Fairplay for $20,000, five notes aggregating $19,315. One of these was *Page 461
the Rogers note for $10,000. The Savings Bank received the purchase price. If the two Rogers notes were collateral, the sale of the $10,000 note was under the power of sale contained in the contract of pledge appended to the note in suit. Any other sale of collateral would be conversion. [The Southworth Company v. Lamb, 82 Mo. 242; Tennant v. Union Central Life Insurance Co.,133 Mo. App. 345, 122 S.W. 755, l.c. 759.] The amount derived from the sale of the $10,000 note as collateral was, pro tanto,
a payment of the note in suit. But that payment was not credited — a circumstance which, with others to be noted is evidence of that intent of payment of the original note mentioned in Appleton v. Kenyon. If the $10,000 note was not sold as collateral but as the absolute property of the American Savings Bank in which Rogers as pledgor had no right of property, the sale was evidence of the payment of the note in suit. The evidence indicates that the bank received $10,000 from the sale of this note.
After the American Exchange Bank closed in November, 1923, and plaintiffs ceased to be its officers, the new management permitted plaintiffs to sell to another bank the $4,750 note together with other notes in order to obtain $28,000 to be used in the reorganization of the closed bank. The collateral upon the principal note, namely the Martin note and the diamond, went as collateral with the $4,750 note. The bank to which the latter note was transferred in time foreclosed the collateral of the $4,750 note and applied the proceeds to the payment of the note for $4,750, reducing the amount due on that note to $76. We cannot determine precisely from the record what sum the closed American Savings Bank received for the $4,750 note as it was part of an unspecified batch for which a total of $28,000 was obtained. But the reduction of the amount due on it to $76, by the sale by the purchasing bank of its collateral gives a measure of the value which the savings bank received. If the sold note was collateral, it, like the note for $10,000 could have been sold by the bank only under the power of sale contained in the contract of pledge appended to the note in suit. And, upon such sale, the proceeds should have been credited promptly as a payment, pro tanto, upon the principal note. The fact that no such credit was made at the time is a circumstance, as in the case of the $10,000 note, which goes to show that the $4,750 note also was sold as the absolute property of the bank, received with the intent that it was in part payment of the note in suit.
In the middle of the year 1925 plaintiffs induced Mr. Viles, then president of the American Savings Bank, to indorse upon the note in suit credit of payment of $4,125, the proceeds of sale of the Martin note. And plaintiffs at the trial indorsed upon the note in suit a further credit of $600 derived from the sale of the pledged diamond. *Page 462
The only justification of this transfer of credits from the $4,750 note to the $14,750 note was upon plaintiffs' theory that the former was collateral to the latter. Under this state of the facts and the law it would seem that it makes small difference in dollars and cents whether plaintiffs are right in their contention that the two notes for $10,000 and $4,750 were merely collateral to the note in suit or whether defendant is right in stating that there was evidence tending to show that the two notes in fact were given and taken in payment of the note in suit. Both notes, short $76 were paid. This is especially true if we take into account the payment on February 7, 1921, by Rogers to the American Savings Bank of $1,418.82, of which payment we have taken notice.
But there was evidence tending to support the defense of payment of the note in suit by the two smaller notes of equal total amount. The books of account of the American Savings Bank so indicated. In addition W.W. Viles, a stockholder, who became president of the bank after it was reorganized, testified that he was present during the examination of its assets by the Finance Department following the suspension of the bank in November, 1923. The plaintiffs also attended the examination. The note in suit was not found nor mentioned during that process. The only note of the Rogers series remaining in the bank was the one for $4,750. When Mr. Viles became president he had recourse to all instruments and evidences of debt in the bank. But he did not discover the note in suit. In fact he first heard of that note sometime in 1925 when plaintiff Bert Ellis brought it to him and requested Mr. Viles to indorse upon it the credit of $4,125 realized from the sale of the Martin note, part of the collateral pledged with the $4,750 note and originally pledged with the note for $14,750. The absence of the note from the American Savings Bank during the closed period of reorganization beginning in November, 1923, and ending in January, 1924, and thereafter during Mr. Viles' presidency until plaintiff Ellis brought in the note in the middle of 1925 cannot be explained except on some theory consistent with the payment of that note by the two notes of smaller amounts.
In State Bank of Wellston v. Hafferkamp, 315 Mo. 465,287 S.W. 331, l.c. 335, RAGLAND, J., in searching for the intent of the parties in the delivery of certain notes, whether as payment or as collateral of preexisting notes (the case here) observed: "The fact of foremost importance is that the bank never surrendered the Hafferkamp notes, but retained them in its possession and at all times treated them as live and subsisting obligations." In this case there is substantial evidence that at least from the time the American Savings Bank closed in November, 1923, until the middle of 1925, when plaintiff *Page 463
Ellis produced the note for a notation of credit by Mr. Viles, the new president, the note in suit was not in the possession of the bank nor was there any color of its ownership by the bank. And the record is devoid of any evidence of transfer by the bank to the plaintiffs, save by the indorsement hereinafter mentioned.
It is true plaintiff Ellis testified that the note in suit was in the bank at all times up to the day that Ellis requested Mr. Viles to credit the payment mentioned. But the testimony merely raised a question of fact between Ellis and Viles. Besides; plaintiff Ellis testified that the two notes for $10,000 and $4,750 took their places in the working files of the bank when they came in and the note for $14,750 thereupon was laid aside. And, he testified, when he looked up the note in 1925, for the purpose of having Mr. Viles to enter a credit upon it, plaintiff Ellis found the big note where discarded, inactive papers were kept. In the case of Citizens Bank of New Franklin v. Gaines, 278 S.W. 784, the Kansas City Court of Appeals held it to be some evidence of payment of one note by another that the note which defendant alleged had been paid "was placed on a `sticker' file and put among other discarded papers of the bank."
Further evidence that the note in suit was out of the bank in 1925 and since the bank closed temporarily in November, 1923, and the note had been paid by the smaller notes, so far as the bank was concerned is that, by the testimony both of plaintiff Ellis and President Viles, the latter, at the request of the former, not only credited upon the note in suit the payment of $4,125, but he also indorsed the note without recourse on the bank and delivered the note to Ellis. This he did for no consideration except the promise of plaintiffs to pay the balance of $76 due on the $4,750 note. This procedure on the part of President Viles is consistent with his testimony that plaintiff Ellis brought in the note to him for these indorsements. But it is contrary to human experience that Mr. Viles, president of a bank for nothing by way of return, would part with the possession and ownership of a thing of value — and that thing a promissory note for $14,750.
It is also true that plaintiffs in rebuttal put in evidence a letter dated August 18, 1925, written by Rogers to plaintiff Ellis stating his recollection to be that he executed the two smaller notes as collateral for the large note. But that letter bears intrinsic evidence that it was written by request in preparation for the action upon the note which was about to be brought, and also that it was inspired by the hope that plaintiff Ellis would go with Rogers to court in Oklahoma where Rogers had troubles of his own incident to the failure of the National Bank of Picher, heretofore mentioned.
The foregoing and other circumstances in evidence cause us to rule *Page 464
that the question whether the note in suit was paid by the two smaller notes was for the jury.
VI. There are other assignments of error. One goes to the issue of payment by a transfer of certain land in Buffalo, Dallas County, by Rogers, the maker of the note in suit, to plaintiffs. Another assails defendant's Instruction 9. A third is based upon the refusal of the court to discharge the jury on account of argument of defendant's counsel. We have examined these assignments and do not find in them reversible error.
We are of opinion that the case was fairly tried and that the judgment should be affirmed. It is so ordered. Cooley andWesthues, CC., concur. |