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UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
______________________________________________________________________
JOSHUA SIMPSON,
Plaintiff,
v. Case No. 18-13156
CITY OF DEARBORN and
OFFICER VINCENT BELLOLI,
Defendants.
__________________________________/
OPINION AND ORDER GRANTING DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT
Plaintiff Joshua Simpson sues Defendants City of Dearborn and Officer Vincent
Belloli for an incident in which Simpson’s arm was run over by a police vehicle as
Simpson was trying to evade capture. Simpson alleged that Belloli used excessive force
in violation of Simpson’s constitutional rights under 42 U.S.C. § 1983. (ECF No. 1,
PageID.12.) Simpson also included negligence claims under state law, Mich. Comp.
Laws § 691.1407(2)(c) and § 691.1405. (Id., PageID.5, 9.)
Defendants now move for summary judgment. (ECF No. 20.) Simpson filed a
response and Defendants have replied. (ECF Nos. 25, 28.) For the following reasons,
Defendants’ motion as to Simpson’s excessive force claim will be granted. The court will
decline to exercise further jurisdiction as to Simpson’s remaining state claims and they
will be dismissed without prejudice.
I. BACKGROUND
On the afternoon of October 26, 2017, Simpson and his girlfriend, Zaria Martin,
were involved in a violent disagreement. Fighting between Simpson and Martin began
as Martin drove Simpson through a McDonald’s restaurant parking lot. (ECF No. 25-2,
PageID.521.) Martin turned out of the McDonald’s onto Michigan Avenue, a major road
in Dearborn, Michigan. (ECF No. 20-4, PageID.176; ECF No. 20-5, PageID.188.) Once
on the road, Simpson grabbed the steering wheel and turned it erratically, causing the
car to swerve. (ECF No. 20-4, PageID.177-78; ECF No. 25-2, PageID.522-23.) Because
the confrontation had escalated, Martin then turned into a gas station. (ECF No. 20-2,
PageID.168; ECF No. 20-2; ECF No. 25-2, PageID.526.)
A security camera at the gas station depicted the unfolding events. (ECF No.
20-2). Martin pulled her vehicle into a parking spot. At the same time, another vehicle,
driven by Martin’s friend, pulled next to it. (Id., 00:00-00:11; ECF No. 25-2, PageID.528.)
Simpson exited the passenger seat, went around Martin’s vehicle, and approached the
driver’s side window. (ECF No. 20-2, 00:22-00:28.) He then punched Martin several
times through an open window. (Id., 00:28-00:30.) When Martin frantically attempted to
escape, diving into her friend’s car, Simpson lunged into the car after her. (Id., 00:35-
00:46.) Simpson then continued to hit Martin and to pull her hair. (ECF No. 25-2,
PageID.529-30.) Simpson eventually got out of the friend’s vehicle and went back to
Martin’s vehicle. Simpson took out items from the vehicle and began throwing them onto
the ground. (ECF No. 20-2, 00:56-01:00.)
With all this turmoil, spectators began to approach. (Id., 01:45-02:00; ECF No.
20-2, PageID.160.) Simpson walked toward one of the spectators and attempted to
2
initiate a fight. (ECF No. 20-2, 01:50-01:57; ECF No. 25-2, PageID.536-37, 539.) In the
process, the police were called, reporting a man punching a woman. (ECF No. 20-2,
PageID.160, 163, 167.) However, Simpson walked away before the police arrived on
the scene.
Police soon identified Simpson walking on the sidewalk along Michigan Avenue,
moving away from where the initial events occurred. (ECF No. 20-2, PageID.164; ECF
No. 25-2, PageID.541.) The officer who identified Simpson activated his vehicle’s
emergency lights and ordered Simpson to stop, using the vehicle’s loud speakers. (ECF
No. 20-2, PageID.164.) In response, Simpson began to run and flee the police. (Id.;
ECF No. 25-2, PageID.541.) He cut across Michigan Avenue, disrupting traffic and
risking accidents, and ran to a gas station. (ECF No. 20-2, PageID.164; ECF No. 20-5,
PageID.188; ECF No. 25-2, PageID.545.) At the gas station, Simpson ran between cars
and pumps. (ECF No. 20-2, PageID.163; ECF No. 20-5, PageID.189; ECF No. 25-2,
PageID.545.) Now being chased by several police officers and vehicles with their lights
activated, Simpson shifted his direction several times, running onto Michigan Avenue
again and then back into a parking lot. (ECF No. 20-2, PageID.164-65, 167; ECF No.
25-2, PageID.545-46.)
As Simpson ran into the parking lot, Defendant Officer Belloli was maneuvering
to cut Simpson off and block his means of escape. (ECF No. 20-2, PageID.167; ECF
No. 20-5, PageID.182.) Belloli had been following Simpson in a police cruiser and
decided to drive ahead of him. (ECF No. 20-2, PageID.167; ECF No. 20-5,
PageID.182.) Another police officer, Officer Fox, had exited his vehicle and was chasing
Simpson on foot. (ECF No. 20-2, PageID.163; ECF No. 25-2, PageID.546.) Bodycam
3
footage shows Fox yelling at Simpson and ordering him to stop running and get on the
ground. (ECF No. 20-6, XV Fox, 14:21:33-14:21:38.)
Fox’s bodycam then displays the event that gave rise to this lawsuit. The video
shows Belloli driving his police vehicle past Simpson, and at the same time Simpson
falling to the ground, a portion of Simpson’s body falling into the path of Belloli’s right
front wheel, and the wheel running over Simpson’s left arm and part of his left leg. (Id.,
14:21:38-14:21:40.) When Simpson fell, he was running in his socks and fell backwards.
(Id.; ECF No. 25-2, PageID.555-56.) According to observations of Fox, Simpson slipped
when he attempted to change direction and lost traction on the parking lot pavement.
(ECF No. 20-2, PageID.163.) As a result, Simpson suffered serious injury to his arm,
resulting in surgery. (ECF No. 25-2, PageID.596.)
Simpson was charged with several crimes for his actions that day. (ECF No. 20-
4, PageID.175.) Following his plea admitting guilt, Simpson filed a no-fault insurance
application to the City of Dearborn. (ECF No. 20-10.) In it, Simpson asserted that he
was “run over by a police vehicle after [he] slipped and fell while running from the
police.” (Id., PageID.225.)
II. STANDARD
To prevail on a motion for summary judgment, a movant must show “there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). First, the moving party bears the initial burden of
presenting evidence that “demonstrate[s] the absence of a genuine issue of material
fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). There is no requirement that
the moving party “support its motion with [evidence] negating the opponent’s claim.” Id.
4
(emphasis removed); see also Emp’rs Ins. of Wausau v. Petrol. Specialties, Inc., 69
F.3d 98, 102 (6th Cir. 1995).
Second, “the nonmoving party must come forward with ‘specific facts showing
that there is a genuine issue for trial.’” Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (emphasis removed) (quoting Fed. R. Civ. P. 56(e)). This
requires more than a “mere existence of a scintilla of evidence” or “‘[t]he mere
possibility’ of a factual dispute.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252
(1986); Mitchell v. Toledo Hosp., 964 F.2d 577, 582 (6th Cir. 1992) (quoting Gregg v.
Allen-Bradley Co., 801 F.2d 859, 863 (6th Cir. 1986)). For a court to deny summary
judgment, “the evidence [must be] such that a reasonable jury could return a verdict for
the nonmoving party.” Anderson, 477 U.S. at 248. All reasonable inferences from the
underlying facts must be drawn “in the light most favorable to the party opposing the
motion.” United States v. Diebold, Inc., 369 U.S. 654, 655 (1962); Moran v. Al Basit
LLC, 788 F.3d 201, 204 (6th Cir. 2015).
In cases where the events at issue are depicted in a recorded video tape, the
court need not accept the allegations of a party that are “blatantly contradicted by the
record.” Scott v. Harris, 550 U.S. 372, 380-81 (2007). Instead, “the court must view the
facts ‘in the light depicted by the videotape.’” Pennington v. Terry, 644 Fed. App’x 533,
538 (6th Cir. 2016) (quoting Scott, 550 U.S. at 381). “[A]ccounts seeking to contradict
an unambiguous video recording do not create a triable issue.” Shreve v. Franklin
County, Ohio, 743 F.3d 126, 132-33 (6th Cir. 2014) (citing Scott, 550 U.S. at 380-81).
5
III. DISCUSSION
Defendants seek summary judgment as to all of Simpson’s claims. From the
video and other evidence presented to the court, there is not a genuine issue of fact as
to whether Simpson was intentionally seized by means of a collision with a police
vehicle. Fed. R. Civ. P. 56(a). Thus, Simpson’s federal claim against Belloli for
excessive force will be dismissed. The only counts remaining are state negligence
claims. The court will exercise its discretion and dismiss those claims without prejudice.
28 U.S.C. § 1367(c)(3).
A. Federal Claim
Individuals may use § 1983 to sue “law enforcement officers that have used
excessive force in the course of an arrest, investigatory stop, or other ‘seizure’ of a free
citizen . . . under the Fourth Amendment.” Schreiber v. Moe, 596 F.3d 323, 331-32 (6th
Cir. 2010) (quoting Graham v. Connor, 490 U.S. 386, 395 (1989)). A valid claim requires
both a “seizure” as recognized under the Fourth Amendment and the use of
“unreasonable” force. Id.; Scott v. Clay County, Tenn., 205 F.3d 867, 876 (6th Cir.
2000). Simpson fails to prove the “seizure” requirement.
For a law enforcement action to constitute a “seizure,” it must be done
intentionally. “A violation of the Fourth Amendment requires the ‘intentional acquisition
of physical control’ of a person by a state official.” Ewolski v. City of Brunswick, 287
F.3d 492, 506 (6th Cir. 2002) (quoting Brower v. County of Inyo, 489 U.S. 593, 596
(1989)). It cannot be “merely the consequence of ‘an unknowing act.’” Brendlin v.
California, 551 U.S. 249, 254 (2007) (quoting Brower, 489 U.S. at 596). “[I]n other words
. . . a Fourth Amendment seizure does not occur whenever there is a governmentally
6
caused termination of an individual’s freedom of movement (the innocent passerby), nor
even whenever there is a governmentally caused and governmentally desired
termination of an individual’s freedom of movement (the fleeing felon), but only when
there is a governmental termination of freedom of movement through means
intentionally applied.” 1 Brower, 489 U.S. at 596-97.
Simpson contends that Belloli intentionally ran over Simpson’s arm in order to
effect a “seizure” and immobilize him. Uncontested video evidence contradicts
Simpson’s claim. Instead, the evidence presented unambiguously indicates that Belloli
was attempting to block Simpson’s route of escape and accidentally ran over Simpson’s
arm.
The evidence shows Simpson was running from the police in a highly erratic
manner. He switched direction several times, running very fast. (ECF No. 20-2,
PageID.163-65, 167; ECF No. 20-5, PageID.188-89; ECF No. 25-2, PageID.545-46.)
Simpson was in socks and had little to no traction on the parking lot asphalt pavement.
(ECF No. 20-6, XV Fox, 14:21:38-14:21:40; ECF No. 25-2, PageID.555-56.) At the time
of the collision, Simpson was in a full sprint and suddenly shifted direction away from
Belloli’s vehicle when his body went to the ground. (ECF No. 20-6, XV Fox, 14:21:33-
14:21:40.) In “the light depicted by the videotape,” Simpson’s running presented “tense,
uncertain, and rapidly evolving circumstances.” Pennington, 644 Fed. App’x at 538;
1 Once a seizure is proven, intent is not relevant. The inquiry is whether the
seizure was “objectively reasonable in light of the facts and circumstances confronting
[the police officer].” Graham v. Connor, 490 U.S. at 397 (citations removed). In making
its determination, the court must consider what “a reasonable officer on the scene
[would do] making a split-second judgment under tense, uncertain, and rapidly evolving
circumstances without the advantage of 20/20 hindsight.” Burgess v. Fischer, 735 F.3d
462, 473 (6th Cir. 2013) (quoting Graham, 490 U.S. at 396-97).
7
Graham, 490 U.S. at 396-97. Simpson reacted to an oncoming police vehicle, which he
was attempting to evade, tried to stop (possibly to pivot and run again in another
direction), and, unfortunately for him, lost traction in his socks. (ECF No. 20-6, XV Fox,
14:21:33-14:21:40.) Simpson fell unexpectedly and awkwardly, projecting his arm and
leg in front of Belloli’s front wheel at the last instant. 2 (Id.)
This video account is consistent with Officer Fox’s observations of the event.
(ECF No. 20-2, PageID.163.) Fox was following immediately behind Simpson and had
the clearest view of what transpired. (Id.) It also conforms to the descriptions Simpson
himself gave when he filed an insurance application with the City of Dearborn. (ECF No.
20-10, PageID.225.)
For Belloli’s part, the video evidence does not demonstrate an intentional
collision with Simpson. Consistent with his testimony, both Fox’s bodycam and a
dashcam placed on Belloli’s vehicle show Belloli’s vehicle taking a path that would cut
off or “box in” a fleeing suspect who was suspected of committing a violent assault.
(ECF No. 20-5, PageID.182; ECF No. 20-6, XV Fox, 14:21:33-14:21:40; ECF No. 20-6,
Car 09, 14:21:43-14:21:47.) Unexpectedly, and at the last split second, Simpson fell
under Belloli’s wheel. (ECF No. 20-6, XV Fox, 14:21:33-14:21:40; ECF No. 20-6, Car
09, 14:21:45.) Belloli had no time to react and to avoid hitting Simpson.
Simpson argues that because “[he] maintains that Defendant Belloli intentionally
ran over him . . . in order to stop Simpson from fleeing,” there is a “material factual
dispute [and the court] cannot reach the underlying issue.” (ECF No. 25, PageID.412.)
2 As discussed below, it is ultimately immaterial why Simpson fell to the ground.
The relevant question is Belloli’s intent to hit Simpson with a vehicle. Brendlin, 551 U.S.
at 254; Brower, 489 U.S. at 596-97.
8
Simpson’s logic is flatly contradicted by the law. It does not matter whether Simpson
argues, or “maintains,” any statement of fact. Here, there is unambiguous video
evidence. Summary judgment analysis entitles Simpson only to “reasonable” inferences
from facts, not deference to mere allegations. Marvin v. City of Taylor, 509 F.3d 234,
239 (6th Cir. 2007). Simpson cannot simply rely on assertions in a brief or deposition
testimony to create a triable issue of fact when such statements are in direct conflict
with a video record of the incident. Shreve, 743 kim73@example.net.
To the extent that Simpson’s arguments reference the video at all, they are not
enough to survive summary judgment. First, Simpson contests the finding that he
slipped and instead argues that “he was in the process of stopping and dropping down
to the ground.” (ECF No. 25, PageID.397.) This conclusion is contradicted by Fox’s
bodycam video, which shows Simpson running in socks, losing his balance, and falling
backwards. (ECF No. 20-6, XV Fox, 14:21:33-14:21:40.) It also contradicts the
statements by Officer Fox and Simpson himself when, before beginning this litigation,
he admitted to slipping and falling. (ECF No. 20-2, PageID.163; ECF No. 20-10,
PageID.225.)
However, even if the court credits Simpson’s most recent account and assumes
his intent was to fall to the ground, the outcome does not change. The evidence does
not call Belloli’s testimony into question. Both Fox’s bodycam and Belloli’s dashcam still
show Belloli’s vehicle being driven ahead of Simpson. (ECF No. 20-6, XV Fox,
14:21:33-14:21:40; ECF No. 20-6, Car 09, 14:21:33-14:21:47.) They do not show Belloli
driving toward Simpson in a manner as to intentionally hit Simpson. (Id.) Belolli’s
dashcam shows that, before hitting Simpson and while Simpson is still in sight, Belloli
9
moves the vehicle slightly to the left and away from Simpson. (Id., Car 09, 14:21:44-
14:21:45.) Simpson then, in a split second, drops out of sight and Belloli moves the
vehicle slightly to the right. (Id., 14:21:45-14:21:47.) Fox’s bodycam confirms that
Simpson awkwardly went to the ground in the instant before Belloli’s wheel ran over
Simpson’s arm. (Id., XV Fox, 14:21:38-14:21:39.)
This video evidence is exactly in line with Belloli’s testimony. (ECF No. 20-5,
PageID.182.) Belloli was attempting to corral Simpson and block Simpson’s means of
escape. Belloli moved the vehicle slightly away from Simpson when Simpson appears
close to the vehicle and then moved the vehicle slightly back to the right, circling around
Simpson at the moment when Simpson was no longer visible. (ECF No. 20-6, Car 09,
14:21:33-14:21:47.) It is not reasonable to infer that an officer is even physically capable
of acting to hit a fleeing suspect intentionally when that officer is driving ahead of a
suspect, the suspect suddenly goes to the ground, and in that instant, the suspect
projects his arm into the vehicle’s path. Moran, 788 kim73@example.net. Also important is that
the officer driving the car lacks any vision of what the suspect is doing after the suspect
drops down. Id. This is even more true considering the prototypically “tense, uncertain,
and rapidly evolving circumstances” of a dangerous chase to which the officer in this
case, Belloli, was reacting. Burgess, 735 F.3d at 473 (quoting Graham, 490 U.S. at 396-
97). Simpson presents no substantive evidence, nor any reasonable inferences, to the
contrary. Marvin, 509 kim73@example.net.
Second, Simpson claims that Belloli had a clear view of Simpson in the moments
leading up to the collision. (ECF No. 25, PageID.415.) Simpson does not contest the
fact that Belloli lost sight of Simpson when Simpson fell. Belloli’s view leading up to
10
Simpson’s fall is irrelevant when Belloli admits to attempting to block Simpson’s route of
escape. (ECF No. 20-5, PageID.182.) The fact that Belloli could see Simpson proves
nothing about Belloli’s intent.
Third, Simpson claims video evidence shows Belloli steering the vehicle into
Simpson. (ECF No. 25, PageID.415.) Belloli’s dashcam does show Belloli moving his
vehicle slightly to the right and toward the direction of Simpson, but only after Simpson
had fallen to the ground and out of Belloli’s line of sight. (ECF No. 20-6, Car 09,
14:21:46-14:21:47.) Further, that slight move, which had no significant impact on the
overall trajectory of the vehicle, occurred only after Belloli had moved his vehicle slightly
to the left and away from Simpson. (Id., 14:21:44-14:21:46.) Belloli’s leftward steer
occurred while Belloli could still see Simpson and recognize how close Simpson was to
the vehicle. (Id.) Although Belloli drove very close to Simpson, Fox’s and Belloli’s videos
in conjunction unambiguously show Simpson, in a mere moment, dropping under
Belloli’s wheel. Shreve, 743 kim73@example.net. (ECF No. 20-6, XV Fox, 14:21:33-14:21:40;
ECF No. 20-6, Car 09, 14:21:33-14:21:47.) The videos do not show Belloli intentionally
directing his vehicle to hit Simpson. (Id.) No reasonable juror could find otherwise.
Anderson, 477 U.S. at 248.
This decision follows the reasoning of other courts throughout the Sixth Circuit.
They too have rejected an excessive force claim when a police officer lacks the intent to
“seize” a fleeing suspect by accidently hitting him with a police vehicle. In a case with
strikingly similar facts, Kelley v. City of Southfield, No. 06-13189, 2007 WL 1343265
(E.D. Mich. May 7, 2007), a suspect attempted to evade the police on foot and ran
toward a major highway. Id. at *1. The trailing police officer attempted to cut off the
11
suspect by driving his vehicle in a position to prevent the suspect’s means of escape
and to prevent a potentially deadly chase on a major thoroughfare. Id. However, when
the patrol car approached, the suspect “appeared to change direction, then lost his
footing and was run over by the patrol car.” Id. There, like here, the officer testified to
not intending to stop the suspect by hitting him with the vehicle, but instead wishing to
block his means of escape. Id. at *3. The court reasoned that because the suspect-
plaintiff had not presented any evidence to the contrary, there was no intentional
“seizure” under the Fourth Amendment and thus no constitutional violation. Id. Here,
Simpson has not presented evidence to contradict the unambiguous video evidence
that Belloli intended to impede Simpson’s route of escape, not to run him down.
In Williams v. Bowling, No. 1:07-cv-146, 2008 WL 4397426 (S.D. Ohio Sep. 26,
2008), a suspect was engaged in a high-speed vehicle chase. The suspect drove his
car into a railroad junction box and attempted to flee on foot. Id. at *1. The pursuing
officer attempted to drive around the suspect’s crashed car and follow the suspect but
hit him in the process. Id. The court found that “although [the suspect] was struck by the
cruiser . . . in the context of the rapidly unfolding events . . . this is not evidence that [the
officer] intended to apprehend [the suspect] by striking him.” Id. *8. The court concluded
that the officer’s actions might constitute negligence, but “negligence alone is not a
‘seizure’ for Fourth Amendment purposes.” Id. (citation removed). In this case, Simpson
was also engaged in an intense police chase. No evidence indicates that Belloli
attempted to end it by hitting Simpson with his vehicle. Although possibly negligent,
Belloli’s conduct does not rise to the level of an intentional “seizure.”
12
Likewise, in Lewis v. City of Toledo, No. 3:10CV2549, 2012 WL 112529 (N.D.
Ohio Jan. 12, 2012), an officer was pursuing a suspect who was fleeing on foot. Id. at
*1. The suspect turned from a street into a parking lot and the officer followed in her
vehicle. Id. The officer then hit the suspect with her vehicle. Id. The court reasoned that
the officers on the scene were attempting “to capture [the suspect] by corralling him, or
boxing him in.” Id. at *3. The officer did not see that her vehicle was going to hit the
suspect and testified to lacking intent. Id. at *3. The court concluded that the suspect-
plaintiff failed “to prove the officer intended to seize him by striking him with the vehicle.”
Id. at *2-3. In this case, Belloli similarly could not see in the last split second when
Simpson fell that his police vehicle was going to hit Simpson’s arm, extended at that
moment under the front wheel.
Finally, in Swift v. McNatt, No. 15-1009, 2015 WL 9165967 (W.D. Tenn. Dec. 16,
2015), a suspect was fleeing the police on foot, followed by several police vehicles. Id.
at *1. The suspect cut into an empty lot off the side of a street and was hit by one of the
police vehicles. Id. The court noted that “there [was] no evidence to suggest that
Defendant intentionally intended to physically stop [the suspect] by hitting him with his
car.” Id. at *4. In “the context of the rapidly unfolding events” of the chase and the
officer’s intent to “cut off [the suspect’s] escape route,” the court found that the officer
had not committed a “seizure” by striking the suspect-plaintiff with the officer’s vehicle.
Id. Here, in the context of Simpson’s rapid and disorganized escape attempt, there is no
evidence a reasonable juror could use to find that Belloli intended to detain Simpson by
running him over with his police vehicle. Anderson, 477 U.S. at 248.
13
Given that Simpson has not presented a valid claim under § 1983, the court need
not analyze the nuances of Defendants’ defense of qualified immunity. It is noted,
however, that police officers acting in the course of their official duties are entitled to
immunity if they have not violated a constitutional right that was “clearly established.”
Courtright v. City of Battle Creek, 839 F.3d 513, 518 (6th Cir. 2016) (citing Johnson v.
Moseley, 790 F.3d 649, 653 (6th Cir. 2015)); Cahoo v. SAS Analytics Inc., 912 F.3d
887, 897 (6th Cir. 2019). Although immunity would be appropriate here because Belloli
did not violate Simpson’s constitutional rights, the court need not address whether any
constitutional right was “clearly established.”
The court also need not consider whether any force used by Belloli was
“unreasonable” and thus excessive. Burgess v. Fischer, 735 F.3d 462, 472-73 (6th Cir.
2013) (quoting Martin v. City of Broadview Heights, 712 F.3d 951, 958 (6th Cir. 2013))
(“Under the Fourth Amendment, we apply an objective reasonableness test . . . . In
doing so, three factors guide our analysis: ‘(1) the severity of the crime at issue, (2)
whether the suspect poses an immediate threat to the safety of the officers or others,
and (3) whether he is actively resisting arrest or attempting to evade arrest by flight.’”)
Belloli did not intentionally “seize” Simpson by hitting him with a vehicle. Therefore, a
“reasonableness” analysis is unnecessary. Slusher v. Carson, 540 F.3d 449, 454 (6th
Cir. 2008) (quoting Graham, 490 U.S. at 395 n.10) (“[A] ‘seizure’ trigger[s] the Fourth
Amendment’s protections.”); Rodriguez v. Passinault, 637 F.3d 675, 680 (6th Cir. 2011)
(“A claim for excessive force under the Fourth Amendment requires that a plaintiff
demonstrate that a seizure occurred.”).
14
B. State Claims
Although the video evidence does not provide a valid basis for asserting a Fourth
Amendment violation under § 1983, there may be a claim sounding in negligence.
Belloli did attempt to cut Simpson off by driving his vehicle quickly and in very close
proximity to Simpson. (ECF No. 20-6, XV Fox, 14:21:33-14:21:40; ECF No. 20-6, Car
09, 14:21:33-14:21:47.) It may have been difficult for Belloli to stop and react to
Simpson’s fall. It also may be arguable that Belloli should have considered the
possibility Simpson would fall, especially considering Simpson’s shifts of direction and
his lack of shoes. (ECF No. 20-2, PageID.163-65, 167; ECF No. 20-5, PageID.188-89;
ECF No. 20-6, XV Fox, 14:21:33-14:21:40; ECF No. 25-2, PageID.545-46, 555-56.)
However, the court will not rule on these issues. Simpson’s negligence claims
are based in Michigan state law, Mich. Comp. Laws § 691.1405 and § 691.1407(2)(c).
Since Simpson’s federal claim has been dismissed, the court could hear the remaining
claims only under supplemental jurisdiction. (See ECF No. 1, PageID.2 (“The court has
supplemental jurisdiction of the Michigan state claims.”).)
The court may decline supplemental jurisdiction when “[it] has dismissed all
claims over which it has original jurisdiction.” 28 U.S.C. § 1367(c)(3); see also Carnegie-
Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988) (“[T]he doctrine of pendant jurisdiction
thus is a doctrine of flexibility, designed to allow courts to deal with cases involving
pendant claims in a manner that most sensibly accommodates a range of concerns and
values.”). “When all federal claims are dismissed before trial, the balance of
considerations usually will point to dismissing the state law claims.” Musson Theatrical,
Inc. v. Federal Exp. Corp., 89 F.3d 1244, 1254-55 (6th Cir. 1996).
15
Considering “several factors, including ‘values of judicial economy, convenience,
fairness, and comity,’” this court will exercise its discretion in declining jurisdiction.
Gamel v. City of Cincinnati, 625 F.3d 949, 951 (6th Cir. 2010) (quoting Carnegie-Mellon,
484 U.S. at 350). The court will give Michigan state courts the opportunity to hear and
adjudicate Simpson’s claims under their laws. Those claims are complex and debatable
and are best suited for courts with specific expertise in state law. It will also not risk
duplicity of litigation given that no remaining claims can be litigated in federal court.
Lastly, although potentially inconvenient, dismissal without prejudice would not inflict
any fundamental unfairness on either party. E.g., Puetz v. Spectrum Health Hosps., 919
N.W.2d 439, 448 (Mich. Ct. App. 2018) (allowing statutes of limitation to be tolled while
state claims are litigated in federal court); see also Roberts v. City of Troy, 429 N.W.2d
206, 213 (Mich. Ct. App. 1988).
IV. CONCLUSION
The record, including uncontested video evidence, does not present a triable
issue of fact regarding Simpson’s § 1983 excessive force claim. Pennington, 644 Fed.
App’kim73@example.net. No reasonable juror could find that Belloli intentionally “seized” Simpson
by running over Simpson’s arm with a police vehicle. Anderson, 477 U.S. at 248. The
remainder of Simpson’s claims are based on state law and will be dismissed without
prejudice on jurisdictional grounds. Accordingly,
IT IS ORDERED that Defendants City of Dearborn and Officer Vincent Belloli’s
Motion for Summary Judgment (ECF No. 20) is GRANTED.
IT IS FURTHER ORDERED that Plaintiff Joshua Simpson’s excessive force
claim under 42 U.S.C. § 1983 (Count III) is DISMISSED WITH PREJUDICE. Simpson’s
16
negligent operation of government owned vehicle claim under Mich. Comp. Laws §
691.1405 (Count I) and Simpson’s gross negligence claim under Mich. Comp. Laws §
691.1407 (Count II) are DISMISSED WITHOUT PREJUDICE.
s/Robert H. Cleland /
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE
Dated: December 3, 2019
I hereby certify that a copy of the foregoing document was mailed to counsel of record
on this date, December 3, 2019, by electronic and/or ordinary mail.
s/Lisa Wagner /
Case Manager and Deputy Clerk
+1-256-264-4909
S:\Cleland\Cleland\JUDGE'S DESK\C2 ORDERS\18-13156.SIMPSON.MotionforSummaryJudgment.RMK2.docx
17
|
Case 1:17-cr-00578-WHP Document 18 Filed 01/13/21 Page 1 of 1
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------------X
UNITED STATES OF AMERICA, :
-against- : 17 Cr. 578 (WHP)
Rafael Montero, : ORDER
Defendant. :
------------------------------------------------------------X
WILLIAM H. PAULEY III, United States District Judge:
This Court will hold a teleconference on Wednesday, January 20, 2020 at 2:00
p.m. regarding defendant’s supervision. The dial-in number is (858)679-2673, passcode
3070580.
Dated: January 13, 2021
New York, New York
|
MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Dec 05 2019, 6:35 am
court except for the purpose of establishing CLERK
the defense of res judicata, collateral Indiana Supreme Court
Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Andrew R. Falk Curtis T. Hill, Jr.
Indianapolis, Indiana Attorney General of Indiana
Caryn N. Szyper
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Keith L. Caldwell, December 5, 2019
Appellant-Defendant, Court of Appeals Case No.
18A-CR-3130
v. Appeal from the Hendricks Circuit
Court
State of Indiana, The Honorable Daniel F. Zielinski,
Appellee-Plaintiff. Judge
Trial Court Cause No.
32C01-1705-F5-79
Barteau, Senior Judge.
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 1 of 18
Statement of the Case
1
[1] Keith L. Caldwell appeals his conviction of burglary, a Level 5 felony, with a
2
criminal organization sentencing enhancement. We affirm.
Issues
[2] Caldwell raises three issues, which we restate as:
I. Whether the trial court erred in admitting phone and text
records into evidence.
II. Whether the trial court erred in denying Caldwell’s motion
for mistrial after the jury issued its verdict.
III. Whether the evidence is sufficient to sustain Caldwell’s
burglary conviction.
Facts and Procedural History
[3] Caldwell owned an auto repair shop, which was located in a leased space on
Shadeland Avenue in Indianapolis. He ran the shop, and at the times relevant
to this case he had no employees. Ernest Snow was Caldwell’s acquaintance
and frequently spent time at the shop.
1
Ind. Code § 35-43-2-1 (2014).
2
Ind. Code § 35-50-2-15 (2016).
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 2 of 18
[4] On Saturday, May 6, 2017, Robert Fields was at work at Ingram Micro’s
distribution center in Plainfield, Indiana. Ingram distributes personal electronic
devices, including Fitbits. On that day, Fields and his co-workers were tasked
with loading pallets of Fitbits into several trailers. Ingram leased the trailers
from Venture Logistics, a company with an Indianapolis office. Once the
trailers were loaded, semis were supposed to take them to a different Ingram
facility.
[5] Fields received a visitor while at work on May 6, a man he later identified as
Snow. Fields left the building while on break and got into a truck with Snow.
Snow told him that he sold shoes and clothes, and Fields was interested in
several pairs of shoes Snow described. They exchanged phone numbers.
[6] As a matter of policy, Ingram preferred not to leave trailers containing product
on the lot overnight, but on the evening of May 6, Ingram employees left a
trailer containing 51,400 Fitbits on the lot because a semi that was supposed to
move the trailer did not return. Under those circumstances, an Ingram
employee was supposed to notify Scott Sunderman, Ingram’s senior manager of
safety and security, so that he could implement additional security measures for
the trailer. No one notified Sunderman.
[7] Later that night, Fields and Snow communicated by phone calls and text
messages. Snow offered Fields ten pairs of shoes in exchange for information
about security at the Ingram distribution center where Fields worked. Fields
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 3 of 18
agreed, and he described the center’s security guards and where they were
stationed. Snow also asked Fields for information about the last trailer he and
his coworkers had loaded earlier that day. Fields told him they had loaded
pallets of Fitbits into a trailer, which had been left parked on the lot.
[8] Meanwhile, Snow was also communicating with others. On May 5, he had a
text conversation with an unidentified person, stating “Give me a call this
morning when you get a chance I have something that may interest you plenty
[sic] of money involved[.]” Tr. Ex. Vol. 5, p. 54.
[9] On May 6, Snow texted the same person to ask, “Can you drive a semi truck?”
Id. at 56. When the other person responded negatively, Snow indicated “i [sic]
need some body [sic] that’s GAME and I’m gone [sic] give them 15000 the [sic]
drive this truck for me from one side of town to the other.” Id. A few hours
later, Snow texted Caldwell, “Bro we gone do it tomorrow get some rest[.]” Id.
at 57.
[10] Ingram’s distribution center was closed on Sunday, May 7, and no one was
present except for security guards. On that same day, Snow again texted the
unidentified person, asking “Can we work do [sic] you have an outlet a
buyer[?]” Id. Snow told the other person that he had “six hundred thousand of
them” and offered to sell them for “$20 each,” or “$15 apiece [sic]” if bought in
bulk. Id. at 54-55.
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 4 of 18
[11] Andrew Nungester was an equipment manager for Black Horse Carriers, a
shipping company, and he worked in their Plainfield yard. On Monday, May
8, at 6 a.m., he inspected the yard and discovered that one of their semis was
missing. Someone had moved a semi to access the missing semi. A camera
inside the semi that had been moved showed a man climbing into the cab and
reaching for the camera.
[12] Also, on the morning of May 8, 2018, Sunderman was notified that a trailer
was missing from Ingram’s lot. He learned at that time that the trailer had been
loaded with Fitbits. The entrance to the lot was gated, but someone had cut the
chain that secured the gate. Ingram had placed a security camera at the
facility’s loading bays, where trailers were parked. A recording dated May 8
shows a semi entering the trailer parking area at 1:35 a.m. and backing up to the
trailer that contained the Fitbits. A person not shown on camera connected the
trailer to the semi and drove away with it.
[13] Finally, on the morning of May 8, Venture Logistics employee Jason Hunt was
informed that one of the company’s trailers was missing from Ingram’s
distribution center. The trailer was equipped with a GPS tracker, and Hunt
obtained tracking information for the trailer. Venture Logistics notified the
police.
[14] Next, Hunt followed the GPS data to a location on Indianapolis’ east side,
where he located an abandoned semi and trailer. Venture Logistics informed
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 5 of 18
the police of the discovery. Nungester arrived at the scene and identified the
semi as Black Horse’s property. He determined the truck’s GPS and camera
had been disabled. Before it was disabled, the internal camera had recorded an
individual entering the cab in the early morning hours of May 8, 2017 and
reaching for the camera. Meanwhile, Hunt identified the trailer as the Venture
Logistics trailer that had been stolen from Ingram. The trailer was empty.
[15] Sunderman also arrived at the location. Venture Logistics employees had given
him the trailer’s GPS tracking data, and he drove along the indicated route,
looking for places where the trailer could have been unloaded. Sunderman
determined that Caldwell’s shop on Shadeland Avenue was a possible location.
He went to the motel across the street and asked to see their security camera
recordings. One of the motel’s cameras pointed toward the avenue, and in the
early morning hours of May 8 it recorded the semi and trailer pulling into the
motel parking lot. Next, the semi backed across the avenue and down a lane
that led to Caldwell’s shop. Sunderman informed the police.
[16] Later, Sunderman saw officers from the Plainfield Police Department and
Indianapolis Metropolitan Police Department arrive at the shop. He
approached the officers. The shop was closed, and no one was inside. They
looked on the ground outside the shop and found plastic seals similar to the
kind that Ingram placed on its trailers after they were loaded and ready for
transport.
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 6 of 18
[17] The police officers obtained a search warrant for the shop. The officers and
Sunderman entered the shop at approximately 1 p.m. on May 9. No one was
present. Also, there were no signs of forced entry. They found pallets
containing most of Ingram’s Fitbits in the bays of the garage. Some of the
pallets were still in the manufacturer’s wrapping, but other boxes had been
removed from pallets and broken open. Some of the Fitbits were missing.
Police officers later searched Snow’s house and found several of the Fitbits, but
others were never recovered.
[18] Next, officers spoke with the owner of a business located next to Caldwell’s
shop. The owner replayed his security camera recording for the officers. A
recording from the early morning hours of May 8 showed a semi and tractor
parked outside Caldwell’s business for several hours while several unidentified
persons unloaded pallets and boxes.
[19] Meanwhile, Sunderman organized a team of Ingram employees to go to
Caldwell Automotive, load the Fitbits into trailers, and take them to an Ingram
facility for processing. Sunderman determined that the stolen shipment had a
total retail value of approximately 6.7 million dollars, and the unrecovered
Fitbits were worth $124,740.
[20] On May 25, 2017, the State charged Caldwell with burglary, a Level 5 felony;
two counts of theft, one as a Level 5 felony and the other as a Level 6 felony;
conspiracy to commit burglary, a Level 5 felony; conversion, a Level 5 felony;
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 7 of 18
and two counts of auto theft, both Level 6 felonies. The State later added a
criminal organization sentencing enhancement. Prior to trial, the State
dismissed the charge of conspiracy to commit burglary and one count of auto
theft.
[21] The State jointly tried Caldwell and Snow. The trial court presided over a
bifurcated trial as to Caldwell. During the first phase, the jury determined
Caldwell was guilty of burglary and Level 5 felony theft, but not guilty of
criminal conversion and the remaining count of auto theft. The State dismissed
the Level 6 felony theft charge. During the second phase, the jury determined
Caldwell was subject to the criminal organization sentencing enhancement.
[22] At sentencing, the court vacated the theft conviction on double jeopardy
grounds and imposed a sentence for burglary, plus the sentencing enhancement.
Next, Caldwell sought and received permission to pursue a belated appeal.
Discussion and Decision
I. Admission of Evidence
[23] Caldwell argues the trial court erred in admitting State’s Exhibit 46, a record of
Snow’s telephone calls and text messages that the State obtained from Snow’s
mobile phone service provider. He claims the State failed to demonstrate that
the record, which the State concedes is hearsay, met the requirements for
admission.
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 8 of 18
[24] The trial court has broad discretion in ruling on the admissibility of evidence.
Houston v. State, 957 N.E.2d 654, 657 (Ind. Ct. App. 2011), trans. denied. We
review for an abuse of discretion, which occurs when a trial court’s decision is
clearly against the logic and effect of the facts and circumstances before the
court. Rolland v. State, 851 N.E.2d 1042, 1045 (Ind. Ct. App. 2006).
[25] Hearsay evidence is defined as “a statement that . . . is not made by the
declarant while testifying at the trial or hearing . . . and . . . is offered in
evidence to prove the truth of the matter asserted.” Ind. Evidence Rule 801(c).
In general, hearsay evidence is “not admissible.” Ind. Evidence Rule 802.
[26] Numerous exceptions to the rule against hearsay have developed. “[T]he
exceptions to the rule have been generally based upon some combination of the
unavailability of the declarant, the reliability of the declaration, or the presumed
inefficiency of any possible cross-examination.” In re Termination of Parent-Child
Relationship of E.T., 808 N.E.2d 639, 641 (Ind. 2004). One of the longstanding
exceptions permits the admission of records of “regularly conducted business
activity[,] provided that certain requirements are met.” Stahl v. State, 686
N.E.2d 89, 91 (Ind. 1997). “The reliability of business records stems from the
fact that the organization depends on them to operate, from the sense that they
are subject to review, audit, or internal checks, from the precision engendered
by the repetition, and from the fact that the person furnishing the information
has a duty to do it correctly.” Id. at 92.
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 9 of 18
[27] The Indiana Supreme Court has determined by rule that the following types of
documents, including business records, are admissible despite being hearsay:
A record of an act, event, condition, opinion, or diagnosis if:
(A) the record was made at or near the time by - or from
information transmitted by - someone with knowledge;
(B) the record was kept in the course of a regularly conducted
activity of a business, organization, occupation, or calling,
whether or not for profit;
(C) making the record was a regular practice of that activity;
(D) all these conditions are shown by the testimony of the
custodian or another qualified witness, or by a certification that
complies with Rule 902(11) or (12) or with a statute permitting
certification; and
(E) the opponent does not show that the source of information or
the method or circumstances of preparation indicate a lack of
trustworthiness.
Ind. Evidence Rule 803(6).
[28] Caldwell challenges the validity of the affidavit certifying the company’s mobile
phone records, so Indiana Evidence Rule 902(11) is relevant to our discussion.
That rule provides, in relevant part, that the following type of document is self-
authenticating:
Unless the source of information or the circumstances of
preparation indicate a lack of trustworthiness, the original or a
copy of a domestic record that meets the requirements of Rule
803(6)(A)-(C), as shown by a certification of the custodian or
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 10 of 18
another qualified person. Before the trial or hearing, the
proponent must give an adverse party reasonable written notice
of the intent to offer the record - and must make the record and
certification available for inspection - so that the party has a fair
opportunity to challenge them.
Ind. Evidence Rule 902(11). Evidence that establishes a reasonable probability
that the document is what it is claimed to be constitutes sufficient
authentication or identification. Fry v. State, 885 N.E.2d 742, 748 (Ind. Ct.
App. 2008), trans. denied.
[29] In Caldwell’s case, the State had notified Caldwell prior to trial that it intended
to introduce Snow’s phone and text records into evidence, accompanied by a
certifying affidavit from an employee of Snow’s mobile phone service provider.
The State disclosed the records and affidavit to Caldwell before trial.
[30] After the jury was selected and the trial court read preliminary instructions, but
before the parties presented opening statements, Caldwell informed the court it
intended to object to the records, claiming the affidavit was insufficient. After
discussion, the trial court granted the request to exclude the records due to
insufficient authentication.
[31] Later in the trial, the State asked the court to reconsider its ruling excluding the
mobile phone records, asserting that it had obtained a new authenticating
affidavit. Caldwell objected, stating among other grounds that he could not
determine if the records were the same as the records he had received prior to
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 11 of 18
trial. The prosecutor affirmed as an officer of the court that the records were
identical. The court determined that it would allow the records into evidence.
The court further stated that the authenticating affidavit would not be presented
to the jury.
[32] The State presented the records as State’s Exhibit 46, which consisted of: (1) a
statement that the records were from Ernest Snow’s account; (2) an Excel
spreadsheet identifying Snow’s phone calls; (3) a document explaining the
categories in the spreadsheet; and (4) four pages of Snow’s texts. Caldwell
objected on grounds of relevancy, but the court overruled the objection.
[33] The authenticating affidavit provides, in relevant part:
AUTHENTICATION OF BUSINESS RECORDS
I, Thomas Gaffney, on behalf of Verizon Wireless, being first
duly sworn upon my oath, state the following:
1. I am the custodian of the records attached hereto, which
include the arrest records of Ernest Ray Snow Jr. There is one
.zip file attached to this Authentication.
2. The copies of records for which this certification is made are
true reproductions of the original records maintained in our files.
3. The records were made at or near the time of the occurrence
of the matters set forth in the record, by or from information
transmitted by a person with knowledge of the occurrence of the
matters recorded.
4. The records are kept in the course of regularly conducted
activity.
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 12 of 18
5. The records were made by the regularly conducted activity as
a regular practice.
6. This certification is given by the custodian of the records in
lieu of the custodian’s personal appearance pursuant to § 803(6),
§ 901, and § 902 of the Indiana Rules of Evidence.
7. I affirm under the penalties for perjury that the foregoing
representations are true.
Tr. Vol. 5, p. 53. Gaffney signed the authentication under penalties of perjury,
and his signature was notarized.
[34] Caldwell does not dispute that Gaffney’s affidavit met the requirements of
subsections (A)-(C) of Evidence Rule 803. He instead claims that the affidavit,
which mistakenly described the record as an arrest record, failed to sufficiently
describe the mobile phone records, demonstrating a lack of trustworthiness.
We disagree. Setting aside the mistaken reference to arrest records, the affidavit
clearly identifies the records as belonging to Ernest Ray Snow, Jr., and further
states that the records are attached in the form of a .zip file. Further, the
records included a statement that they belonged to Snow. The affidavit was
thus more than mere boilerplate and sufficiently described the records it
authenticated. See Fry, 885 N.E.2d at 749 (Ind. Ct. App. 2008) (no error in
admission of phone records; affidavit was sufficient to authenticate records); cf.
Speybroeck v. State, 875 N.E.2d 813, 820 (Ind. Ct. App. 2007) (affidavit
insufficient to certify business records; affidavit did not state what records were
being authenticated, or to whom the records referred); cf. also Walters v. State,
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 13 of 18
120 N.E.3d 1145, 1155-56 (Ind. Ct. App. 2019) (affidavit insufficient to certify
phone records; affidavit did not identify the name of the customer or the
telephone number and did not identify the number of pages in the records).
Gaffney’s affidavit established a reasonable probability that the records were
what they claimed to be, and the trial court did not abuse its discretion in
admitting the phone and text records into evidence.
II. Motion for Mistrial
[35] Caldwell argues the trial court erred in denying his motion for mistrial, claiming
the jury was exposed to extraneous materials during deliberations for phase one
of the trial. In response, the State claims Caldwell waived this claim by failing
to timely request a mistrial.
[36] “On appeal, a trial judge’s discretion in determining whether to grant a mistrial
is afforded great deference, because the trial judge ‘is in the best position to
gauge the surrounding circumstances of an event and its impact on the jury.’”
Mickens v. State, 742 N.E.2d 927, 929 (Ind. 2001) (quoting Gregory v. State, 540
N.E.2d 585, 589 (Ind. 1989)). A mistrial is an extreme remedy that is justified
only when other remedial measures are insufficient to rectify the situation. Id.
A motion for mistrial must be timely to preserve the issue for appellate review.
See Vacendak v. State, 431 N.E.2d 100, 107 (Ind. 1982) (motions for mistrial
challenging witness’s clothes and witness’s answers to prosecutor’s question
deemed untimely, did not preserve those issues for appellate review).
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 14 of 18
[37] In Caldwell’s case, during deliberations for phase one of the trial, the jury
informed the trial court that the video equipment in the jury room was not
working. The parties and the court agreed that the bailiff would show them
video exhibits on a video player in the courtroom, with no one else present.
[38] After the bailiff played the exhibits, the jurors asked him to also show them a
PowerPoint slide that the State had presented during closing arguments. The
slide apparently contained excerpts from Snow’s phone records, but it had not
been admitted into evidence. The bailiff showed the jurors the slide. He later
told one of the parties about displaying the slide to the jurors, and the party
requested a hearing with the trial court while the jury deliberated.
[39] During the hearing, Caldwell asked, “I’m just saying I think it’s an issue and
how do we deal with it?” Tr. Vol. 3, p. 144. He requested a limiting
instruction, but the court denied the request, concluding: (1) there was no
prejudicial error; and (2) “if anything [a limiting instruction would] draw more
attention to it.” Id. at 145-46. Caldwell responded, “that’s a point that could be
made as well.” Id. at 146.
[40] After the jury returned its verdict on the charges in phase one, the court sent the
jurors back to the jury room to prepare for the second phase of the trial,
addressing the criminal organization sentencing enhancement. Outside the
presence of the jury, the parties and the court discussed whether Caldwell’s
bond should be revoked and discussed the preliminary instructions. Next, the
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 15 of 18
court took a short break, and then the court and the parties resumed their
discussion of the jury instructions. They also discussed whether Caldwell’s
fiancée could testify during the second phase of the trial even though she had
sat through the first phase of the trial.
[41] After the discussion ended, the jury reentered the courtroom and the trial court
read preliminary instructions to the jury on the criminal organization
enhancement. The parties presented opening statements, and Caldwell
presented evidence from Caldwell’s fiancée. The parties then made closing
arguments, and the court read final instructions to the jury. After the jury
retired to deliberate on the sentencing enhancement, Caldwell moved for a
mistrial, citing the PowerPoint slide that the bailiff showed the jury during their
deliberations on phase one of the trial. Over an hour had elapsed since the jury
had issued its verdict for phase one of the trial.
[42] We agree with the State that Caldwell’s motion for mistrial was untimely and
failed to preserve the PowerPoint issue for appellate review. If Caldwell had
made the motion before the jury returned its verdict on phase one, then the trial
court would have had an opportunity to consider the issue in more depth,
including reassessing whether a limiting instruction might be necessary.
Caldwell’s late motion deprived the court of an opportunity to address the
matter without resorting to the extreme remedy of mistrial. See Crisp v. State,
394 N.E.2d 115, 120 (Ind. 1979) (describing a motion for mistrial that was
presented after the verdict as “filed at the wrong time”).
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 16 of 18
[43] As an alternative ground for relief, Caldwell argues the bailiff’s display of the
PowerPoint to the jury during deliberations amounted to fundamental error. A
claim that has been waived by a defendant’s failure to raise a contemporaneous
objection can be reviewed on appeal if the reviewing court determines that a
fundamental error occurred. Brown v. State, 929 N.E.2d 204, 207 (Ind. 2010).
“The error claimed must either ‘make[ ] a fair trial impossible’ or constitute
‘clearly blatant violations of basic and elementary principles of due process.’”
Id. (quoting Clark v. State, 915 N.E.2d 126, 131 (Ind. 2009)).
[44] We cannot address the fundamental error claim because the PowerPoint slide is
not included in the record. Caldwell was obligated to include in his Appendix
“any other short excerpts from the Record on Appeal, in chronological order,
such as pertinent pictures, that are important to a consideration of the issues
raised on appeal.” Ind. Appellate Rule 50(B)(1)(d). The Record on Appeal
includes “all proceedings before the trial court.” Ind. Appellate Rule 2(L).
Indiana Appellate Rule 49(B) provides, “[a]ny party’s failure to include any
item in an Appendix shall not waive any issue or argument.” Even so, without
seeing the slide, we cannot determine whether the bailiff’s display of the slide to
the jury during deliberations amounted to fundamental error.
III. Sufficiency of the Evidence
[45] Caldwell challenges the sufficiency of the evidence supporting his burglary
conviction. His sufficiency claim is contingent upon this Court determining
that the trial court erred in admitting Snow’s mobile phone records into
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 17 of 18
evidence. See Appellant’s Br. p. 22 (“Because the State’s Exhibit 46 should
have been excluded, his conviction for this reason should also be reversed.”).
Having determined that the trial court did not err in admitting Exhibit 46, we
need not further address Caldwell’s sufficiency claim.
Conclusion
[46] For the reasons stated above, we affirm the judgment of the trial court.
[47] Affirmed.
Kirsch, J., and Robb, J., concur.
Court of Appeals of Indiana | Memorandum Decision 18A-CR-3130 | December 5, 2019 Page 18 of 18
|
109 HR 4110 IH: American Parity Act of 2005
U.S. House of Representatives
2005-10-20
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.
I
109th CONGRESS
1st Session
H. R. 4110
IN THE HOUSE OF REPRESENTATIVES
October 20, 2005
Mr. Emanuel (for himself, Mr. DeFazio, Mr. Delahunt, Mr. Bishop of New York, Mr. Allen, Mr. Boucher, Mr. Clay, Mr. Costello, Mr. Etheridge, Mr. Frank of Massachusetts, Mr. Grijalva, Mr. Hastings of Florida, Mr. Holt, Mr. Kildee, Mr. Larson of Connecticut, Ms. Lee, Mr. McGovern, Mrs. Maloney, Mr. Meehan, Mr. George Miller of California, Ms. McCollum of Minnesota, Mr. Nadler, Mr. Owens, Mr. Pallone, Mr. Payne, Mr. Ryan of Ohio, Ms. Schakowsky, Ms. Slaughter, Mr. Stark, Mr. Taylor of Mississippi, Mr. Thompson of Mississippi, and Mr. Wexler) introduced the following bill; which was referred to the Committee on Government Reform
A BILL
To require grants to State and local governments for infrastructure and social services needs in the same amount as the amount of relief and reconstruction funds provided to Iraq.
1.Short titleThis Act may be cited as the American Parity Act of 2005.
2.Findings The Congress finds the following:
(1)The Administration has requested and received funds for an ongoing multibillion dollar reconstruction for the Republic of Iraq.
(2)In fiscal year 2003 and fiscal year 2004, approximately $21 billion was appropriated to the Iraq Relief and Reconstruction Fund (IRRF), of which $16.6 billion had been obligated and $9.5 billion had been spent by late July 2005.
(3)The total projected cost of reconstruction through 2007 as estimated by the World Bank, the United Nations Development Group, and the Coalition Provisional Authority (CPA), is $55 billion.
(4)The President has requested some funding for fiscal year 2006 to be appropriated to traditional foreign aid accounts rather than through the IRRF as in the past, making the total cost of reconstruction less predictable.
(5)To date, the IRRF has allocated resources in Iraq—
(A)with respect to education—
(i)to rehabilitate 2,717 schools;
(ii)to train 32,700 secondary school teachers and administrators;
(iii)to distribute hundreds of thousands of desks, chairs, cabinets, chalkboards, and kits for primary and secondary schools;
(iv)to install satellite internet access and computers at the Ministry of Education and all 21 Directorates of Education; and
(v)to edit, print, and distribute more than 8.7 million math and science text books;
(B) with respect to medical science—
(i)to provide potable water for 400,000 people each day in Basra city and 170,000 in Kirkuk and Mosul;
(ii)to vaccinate over 3,000,000 children under the age of five and 700,000 pregnant women;
(iii)to provide supplementary doses of vitamin A for more than 600,000 children under two years old;
(iv)to renovate 110 primary health care centers; and
(v)to train 2,000 health educators, teachers, religious leaders, and youth to mobilize communities on hygiene, diarrhea, breast-feeding, nutrition, and immunization issues; and
(C)with respect to technology and infrastructure—
(i)to complete 3 major bridges and 36 detailed bridge assessments;
(ii)to construct 72 kilometers of new railroad track and facilities between the Port of Umm Qasr and Shuaiba Junction;
(iii)to rehabilitate parts of the Sweet Water Canal system, including repairing breaches and cleaning the main reservoir;
(iv)to refurbish 14 water treatment plants around Basra serving 1.75 million people; and
(v)to conduct marshland restoration activities.
(6)The President’s budget has eliminated or reduced domestic spending in many areas where resources have been allocated in Iraq, including—
(A)eliminating 48 education programs totaling $4.3 billion;
(B)reducing spending on student loans by $10.7 billion over 10 years;
(C)cutting Medicaid by $60 billion;
(D)reducing health professions training from $300 million to $89 million;
(E)cutting funding for Amtrak by $847 million or 70.2 percent;
(F)decreasing funding for the Clean Water State Revolving Fund by $361 million;
(G)suspending or canceling 31 Army Corps of Engineers projects previously requested by the President and funded by Congress;
(H)cutting funding for the Environmental Protection Agency by $452 million;
(I)reducing the budget for First Responders by $1.6 billion; and
(J)eliminating the Community Development Block Grant program, a funding cut of $4.6 billion.
(7)State and local governments in the United States have their own unmet infrastructure and social services needs.
(8)State and local Governments are experiencing financial difficulties at a time when a greater funding burden is being shifted to them.
(9)State and local Governments deserve, at a minimum, the same level of Federal investment to address infrastructure and social services shortfalls as the amount of relief and reconstruction funds provided to Iraq.
3.Formula grants to states and local governments
(a)PurposeThe Secretary of the Treasury (referred to in this section as the Secretary) shall in accordance with this section make grants to States and local governments for the purpose of assisting grantees in making priority expenditures.
(b)Priority expendituresFor purposes of this section, the term priority expenditures means only—
(1)ordinary and necessary maintenance and operating expenses for—
(A)primary, secondary, or higher education, including school building renovation;
(B)public safety;
(C)public health, including hospitals and public health laboratories;
(D)social services for the disadvantaged or aged;
(E)roads, transportation, and water infrastructure; and
(F)housing; and
(2)ordinary and necessary capital expenditures authorized by state law.
(c)Allocation of grants
(1)In generalNot later than 30 days after the date of the enactment of this Act, the Secretary shall establish a formula for determining the allocation of grants under subsection (a). The formula shall give priority weight to the following factors:
(A)The unemployment rate in relation to the national average unemployment rate.
(B)The duration of the unemployment rate above such average.
(C)The median income.
(D)The population.
(E)The poverty rate.
(2)Local governmentsIn making grants under subsection (a), the Secretary shall ensure that not less than one-third of the amount appropriated under subsection (f) is made available to local governments under the applicable laws of a given State.
(d)Application for grantA grant may be made under subsection (a) only if an applicant for the grant is submitted to the Secretary and the application is in such form, is made in such manner, and contains such agreements, assurances, and information as the Secretary determines to be necessary to carry out this section.
(e)Authorization of appropriationFor the purpose of making grants under subsection (a), there is authorized to be appropriated to the Secretary for fiscal year 2007 an amount equal to at least the total amount appropriated for fiscal year 2006 in supplemental appropriation Acts, and other appropriation Acts, for the reconstruction of Iraq. Amounts appropriated under the preceding sentence shall be in addition to, and not in lieu of, other amounts appropriated for payments to States and local governments.
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Citation Nr: 1509539
Decision Date: 03/06/15 Archive Date: 03/17/15
DOCKET NO. 12-33 419 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in New York, New York
THE ISSUE
Whether new and material evidence has been received to reopen a claim of entitlement to service connection for a lumbar spine disability and, if so, whether service connection is warranted.
REPRESENTATION
Appellant represented by: New York State Division of Veterans' Affairs
WITNESSES AT HEARING ON APPEAL
Veteran, Spouse
ATTORNEY FOR THE BOARD
J. Mulvihill, Associate Counsel
INTRODUCTION
The Veteran served on active duty from June 1960 to April 1964.
This matter comes before the Board of Veterans' Appeals (Board) on appeal from an August 2010 rating decision by the Department of Veterans Affairs Regional Office (RO) in New York, New York. The rating decision reopened a claim for service connection for a back condition previously denied in a Board decision dated in August 1967, and then denied the claim.
On April 23, 2014, the Veteran and his spouse provided testimony at a video hearing before the undersigned Veterans Law Judge (VLJ). A transcript of the hearing is associated with the claims file.
This appeal was processed using the "Virtual VA" and VBMS paperless claims processing system. Accordingly, any future consideration of this claim should take into consideration the existence of the electronic record.
FINDINGS OF FACT
1. A Board decision dated August 1967, denied service connection for a lumbar spine disability because the evidence did not establish that the Veteran had a back disorder. Reconsideration of that decision has not been ordered.
2. Evidence received since the August 1967 Board decision, by itself or when considered with evidence previously of record, relates to unestablished facts necessary to substantiate the claim of service connection a lumbar spine disability, and therefore raises a reasonable possibility of substantiating the issue on appeal.
3. The evidence is in relative equipoise as to whether the Veteran's lumbar spine disability is related to service.
CONCLUSIONS OF LAW
1. The August 1967 Board decision denying service connection for a lumbar spine disability is final. 38 U.S.C.A. § 7105 (West 2014); 38 C.F.R. §§ 3.156, 20.1103 (2014).
2. New and material evidence has been received to reopen the claim of entitlement to service connection for a lumbar spine disability, and the claim is reopened. 38 U.S.C.A. §§ 5103, 5103A, 5108 (West 2014); 38 C.F.R. §§ 3.156(b), 3.159 (2014).
3. Resolving all reasonable doubt in the Veteran's favor, the criteria for service connection for a lumbar spine disability have been met. 38 U.S.C.A. §§ 1131, 5107 (West 2014); 38 C.F.R. §§ 3.102, 3.303, 3.304 (2014).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
I. Duties to Notify and Assist
Under applicable criteria, VA has certain notice and assistance obligations to claimants. See 38 U.S.C.A. §§ 5102, 5103, 5103A, 5107; 38 C.F.R. §§ 3.102, 3.159, 3.326(a)(2014). In this case, the Board is granting in full the benefits sought on appeal. Accordingly, assuming, without deciding, that any error was committed with respect to either the duty to notify or the duty to assist, such error was harmless and will not be further discussed.
II. Legal Criteria and Analysis
Before deciding the substantive question of service connection, the question of whether new and material evidence has been received to reopen the above claim must first be addressed by the Board because the issue goes to the Board's jurisdiction to reach the underlying claim and adjudicate the claim on a de novo basis. See Jackson v. Principi, 265 F.3d 1366 (Fed). Cir. 2001)(reopening after a prior unappealed RO denial); Barnett v. Brown, 83 F.3d 1380 (Fed. Cir. 1996)(reopening after a prior Board denial). If the Board finds that no such evidence has been offered, that is where the analysis ends. Therefore, what the RO may have determined in this regard is irrelevant. Barnett, 83 cartermark@example.org.
Generally, a claim that has been denied in an unappealed RO or Board decision may not thereafter be reopened and allowed unless new and material evidence is presented or secured with respect to the denied claim. 38 U.S.C.A. §§ 5108, 7104(b), 7105(c) (West 2014). If so, the Secretary shall reopen the claim and review the former disposition of the claim.
New evidence is defined as evidence not previously submitted to agency decision makers. Material evidence means existing evidence that, by itself or when considered with previous evidence of record, relates to an unestablished fact necessary to substantiate the claim. Together, new and material evidence can be neither cumulative nor redundant of the evidence of record at the time of the last prior final denial of the claim sought to be reopened, and must raise a reasonable possibility of substantiating the claim. 38 U.S.C.A. § 3.156(a); See Shade v. Shinseki, 24 Vet. App. 110 (2010)(3.156(a) creates a low threshold for viewing the phrase "raises a reasonable possibility of substantiating the claim" as "enabling rather than precluding reopening."). For the purpose of establishing whether new and material evidence has been submitted, the credibility of the evidence, although not its weight, is presumed. Justus v. Principi, 3 Vet. App. 510, 513 (1992).
The Veteran was denied service connection for a low back injury in June 1966. He appealed the decision and was again denied by the Board in August 1967. He filed a claim to reopen in 2009. Evidence received in connection with his claim consists of a significant number of private treatment records and workers compensation reports dated after November 1987, as well as a VA examination and medical opinion not previously considered which relate to an unestablished fact necessary to substantiate the claim. Therefore, the claim is reopened.
Service connection may be granted if the evidence demonstrates that a current disability resulted from an injury or disease incurred or aggravated in active military service. 38 U.S.C.A. § 1110, 1131 (West 2014); 38 C.F.R. § 3.303(a). Generally, service connection requires competent and credible evidence of (1) a current disability; (2) in-service incurrence or aggravation of a disease or injury; and (3) a nexus between the claimed in-service disease or injury and the current disability. See Shedden v. Principi, 381 F.3d 1163, 1167 (Fed. Cir. 2004).
With disability compensation claims, VA adjudicators are directed to assess both medical and lay evidence. As a general matter, a layperson is not capable of opining on matters requiring medical knowledge. 38 C.F.R. § 3.159(a)(2); see also Routen v. Brown, 10 Vet. App. 183, 186 (1997). In certain circumstances, however, lay evidence may be sufficient to establish a medical diagnosis or nexus. See Davidson v. Shinseki, 581 F.3d 1313, 1316 (Fed. Cir. 2009). In addressing lay evidence and determining its probative value, if any, attention is directed to both competency ("a legal concept determining whether testimony may be heard and considered") and credibility ("a factual determination going to the probative value of the evidence to be made after the evidence has been admitted"). See Layno v. Brown, 6 Vet. App. 465, 469 (1994).
Except as otherwise provided by law, a claimant has the responsibility to present and support a claim for benefits under laws administered by the Secretary. The Secretary shall consider all information and lay and medical evidence of record in a case before the Secretary with respect to benefits under laws administered by the Secretary. When there is an approximate balance of positive and negative evidence regarding any issue material to the determination of a matter, the Secretary shall give the benefit of the doubt to the claimant. 38 U.S.C.A. § 5107 (West 2014); 38 C.F.R. § 3.102 (2014); see Gilbert v. Derwinski, 1 Vet. App. 49, 53 (1990). To deny a claim on its merits, the evidence must preponderate against the claim. Alemany v. Brown, 9 Vet. App. 518, 519 (1996), citing Gilbert, 1 Vet. App. at 54.
The Veteran contends that he injured his lumbar spine during service and has continued to experience low back pain ever since, being aggravated by a work-related injury in 1987.
Evidence contained in the Veteran's claims file includes entrance and separation examinations, service treatment records (STRs), post-service VA examinations, private treatment records, and lay evidence in the form of statements and hearing testimony by the Veteran and his spouse.
Clinical evaluation on entrance in June 1960 reflected a normal spine and other musculoskeletal condition. Neurologic condition was normal, qualified by the statement "Polio, history of nonparalytic poliomyelitis at age 8. Asymptomatic. No neuro-psychiatric pathology."
From the period of entry in June 1960 until his injury in February 1963, the Veteran's STRs were silent for any complaints of back pain or injury. In February 1963, STRs reveal that the Veteran experienced a back injury while performing physical training exercises. He reported to the medical clinic at which time the physician's impression was severe spondylolisthesis. An x-ray taken at that time indicated an essentially normal spine with some straightening of the lumbar vertebrae. He was prescribed exercises and ordered to return the following month for follow-up. He returned monthly. In August 1963, the Veteran's spine and a second x-ray were evaluated by an orthopedic physician, which confirmed a diagnosis of spondylolisthesis and noted posterior displacement of the L5 vertebrae on S1 with associated sharp angulation.
At separation in February 1964, the Veteran's history of low back pain after participating in physical training was noted, that he had been seen on numerous occasions as an out-patient, and x-rays had been noted as unremarkable. An x-ray taken of the lumbar spine at the time of separation was essentially negative for abnormalities. It was noted the Veteran intended to apply for disability if his pain persisted. He was referred to the orthopedic clinic with a provisional diagnosis of questionable back strain. The orthopedic consultation report from March 1964 indicates that the Veteran had apparently had a back strain when doing calisthenics, but the pain had largely disappeared. The examination was completely negative, and it was concluded that no further treatment was needed.
Following discharge from service, the Veteran filed a claim for service connection in February 1966. He complained of general low back pain, induced primarily with sitting or prolonged standing. He was afforded a VA spine examination in May 1966, and x-ray which revealed no bone pathology and was again, considered normal. As his condition was determined to be symptomatic back pain but no confirmed back abnormalities, the claim was denied by the RO. The Board then remanded the claim in 1967, and the Veteran was examined by a VA orthopedic physician in March 1967. The physician noted that x-ray reports had differed concerning displacement of L5 on S1 and spondylolisthesis versus normal x-rays. He reviewed the x-rays from the 1966 VA examination and additional x-rays done for the 1967 VA examination and concluded they were normal. Other than complaints of pain with some motions, the orthopedic exam was normal. The diagnosis was history of low back pain.
The claims file is silent for medical evidence of any treatment for ongoing back pain over the next 20 years. The Veteran stated he experienced and managed occasional painful episodes during this period with over the counter pain relievers and exercise. In November 1987, the Veteran experienced what is claimed as an aggravating event where he was required to sit for an extended period of time while traveling for work. This led to severe back pain for which he filed a claim for Worker's Compensation. The Veteran received subsequent continuous back treatment primarily from chiropractors from the time of the injury in 1987 to the present. Many of the chiropractic treatment records obtained from private providers reflect a worsening back condition as it related to the 1987 worker's compensation claim. Therefore, such evidence is not relevant to the issue of service connection and will not be further discussed. However, the Veteran's service injury is noted historically in other reports as discussed below.
In May 1997, the Veteran was seen by an orthopedic surgeon. At that time, the Veteran reported that he first had back pain while in service, the episodes described as of relatively short duration and mild severity. Following his trip in 1987, he had frequent recurrent episodes of back pain and was treated on a regular basis by a chiropractor. The only specific findings from the surgeon's evaluation were pain and slightly decreased spinal range of motion. He had good motion and excellent strength, and not highly or acutely aggravated at that time. His symptoms did not clinically support a diagnosis of spinal stenosis, as demonstrated on a CT scan, and he had no radiation of pain. The examiner noted the underlying problem to be an L4-L5 herniated disc and spinal stenosis.
In June 2006, an independent chiropractic examination by J. Mulholland contained a report of low back injury during service, noting that the Veteran suffered from occasional on and off lower back discomfort over the years due to an in-service injury, but not constant, steady back or leg pain prior to the Worker's Compensation injury in November 1987.
In May 2009, the Veteran received a VA MRI which revealed no compression fractures, but disc desiccation throughout. Disc space narrowing was seen most cartermark@example.org. Impressions were moderately prominent degenerative changes of the L4-L5 disc space, prominent facet hypertrophy, ligament laxity and disc bulging seen at L4-L5, with moderate severe central canal stenosis. Moderate foraminal stenosis was seen as well. Moderate stenosis at L3-L4 and mild to moderate stenosis at L2-L3 also was noted.
In July 2009, the Veteran was afforded a VA spine examination to evaluate his current lumbar spine disability. The examiner reviewed the claims file and determined that the Veteran's current back disability was at least as likely as not caused by or a result of in-service injury. He based his opinion on his observation of continual complaints of pain of the same nature from 1963 to the present, and the well-documented injury in the claims file. However, the examiner did not have the history of the Veteran's 1987 injury or worker's compensation claim, nor did he have access to the private chiropractic treatment records to make a fully informed assessment.
In January 2010, a second medical opinion was obtained to answer the question: what is the relationship between the 1987 injury, the Veteran's current back condition, and how it related to his military service. The examiner reviewed all existing medical treatment records, noting that STRs reflected abnormal elements in the Veteran's spine such as paraspinous atrophy (deconditioning), spondylolisthesis on x-ray, and functional overlay. However, all exams and x-rays were deemed normal, independent of symptoms reported. The Veteran filed for disability and was denied twice. The records were then silent until 1987. Independent medical examinations performed in connection with the workers compensation claim stated there was no significant back condition prior to the work related injury. The examiner concluded that the current diagnosis of degenerative disc disease (DDD) lumbar segments L4-L5 was not caused by the in-service injury in 1963. Her rationale was that the acute low back strain incurred while in active service resolved at discharge with no radiologic evidence of abnormalities. Medical documentation from 1987 to the present acknowledged the service injury as occurring, but identified the Veteran's current disability as due to the work related air travel injury.
In October 2010, the Veteran provided a statement from one of his private treatment providers, Dr. Cerutti, who stated that he had been treating the Veteran since 1998, and that it was possible that his current back condition was caused or aggravated by a preexisting service related condition. He provided no rationale for this statement.
On April 23, 2014, the Veteran and his spouse testified before the undersigned VLJ. At that time, the Veteran stated that his back was fine going in to service, with no restrictions regarding physical activities. The Veteran injured his back during physical training and was seen at Fort Wainwright Army Hospital. At that time, the physician said that for him to have an operation on his back, he would have to go down to the lower 48 because it could not be performed there (in Alaska). The Veteran wrote to his sister and brother-in-law (in the Navy) for advice regarding back surgery, which they advised the Veteran to avoid. Following his injury, the Veteran was excused from any further physical training that might aggravate his back. He stated the Army doctors said he had a "bone" out of place, he recalled the L5 vertebrae (a bulging disc).
He filed his claim after service. He testified that the back pain was occasional, where he could go for awhile with no problem and then go on a trip, when he would be sitting for long periods, it would act up. The Veteran also reported avoiding engaging in activities that might aggravate his back. In 1987, the worker's compensation claim resulted from sitting for a very long time during business travel which resulted in a very bad episode of back pain. He reported that normally, when he was on a "low" (flares), it would take about a week for his back to recover. In this instance, after 6 weeks he sought chiropractic care for another six weeks. He believed it was due to aggravation of the in-service injury.
The Veteran's spouse of 47 years testified that she noticed his back bothered him, and he told her about the service injury. She stated it affected his ability to sit for extended periods of time, such as at the dinner table, movies and traveling.
The Veteran and spouse are competent to testify to symptoms perceived by the senses, and are also found to be credible in their testimony of the Veteran's back symptoms over period of many years. See Layno v. Brown, 6 Vet. App. 465, 469 (1994). Thus, the reports of continuing symptoms following service are considered credible, although the Veteran and spouse are not medically qualified to infer a medical nexus between the in-service injury and the Veteran's current disability.
The Board finds credible the Veteran's reports of recurring back pain after the service injury until the 1987 work injury. First, he filed a claim for VA compensation slightly less than two years after service, and reported continuing back pain during the 1966 and 1967 VA examinations. This is conclusive evidence that he had back pain after supposed resolution of the in-service incident, and after military service, and decades before the work injury. Second, there are statements in the medical records dated years prior to his 2009 request to VA to reopen this claim, wherein he recounts a history of back pain after a military service injury but prior to the 1987 work injury. He does not seem to exaggerate the extent of his pain in these accounts, recalling intermittent, "on and off" back pain following service. Since this history was provided independent of and not contemporaneous with his VA claim, the statements are especially probative, and lend additional support to his testimony.
In sum, there are essentially three medical opinions regarding a medical nexus between the Veteran's in-service injury and his current disability, none of which are definitive: the statement of Dr. Cerrutti speculating that it is possible the 1987 incident aggravated his preexisting injury from service; a July 2009 VA examination opinion stating it is more likely than not related to service, although the examiner did not have knowledge of the 1987 aggravating injury; and the January 2010 VA opinion which denied finding that the Veteran's in-service back strain caused his current lumbar spine disability, but failed to identify or discuss the August 1963 x-ray showing an L5 disc displacement, or consider the lay testimony of the Veteran.
The Board finds that the evidence is in relative equipoise as to whether the Veteran's in-service injury caused his current lumbar spine disability. While the July 2009 VA examiner did not have the benefit of history of the 1987 injury, his observations concerning the Veteran's continual complaints of pain following the in-service injury and the nature of those complaints are consistent with the Veteran's own testimony and that of his spouse. Similarly, the L-5 vertebrae is noted by x-ray to be displaced or otherwise injured in both the in-service injury as well as the 1987 injury, and corresponds with the Veteran's "low back" complaints over the years. There is no basis for the VA examiner's conclusion in 2010 that all x-rays were deemed normal independent of symptoms reported, when those in-service x-rays clearly showed spondylolisthesis.
Therefore, based on a review of the competent and credible lay and medical evidence, the Board finds the evidence to be equally balanced for and against the Veteran. In such situations, the law affords reasonable doubt to be resolved in the Veteran's favor. 38 U.S.C.A. § 5107 (West 2014); 38 C.F.R. § 3.102 (2014); see Gilbert v. Derwinski, 1 Vet. App. 49, 53 (1990).
Accordingly, resolving all reasonable doubt in the Veteran's favor, the claim of service connection for a lumbar spine disability is granted.
(CONTINUED ON NEXT PAGE)
ORDER
Entitlement to service connection for a lumbar spine disability is granted.
____________________________________________
MICHELLE L. KANE
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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I,JNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
ABILENE DTYISION
UNITED STATES OF AMERICA,
Plaintiff,
NO. l:19-CR-098-0I-H
JEFFREY SCOTT AKARD (I),
Defendant.
ORDER ACCEPTING REPORT AND RECOMMENDATION
OF TIIE UNTIED STATES MAGISTRATE JI,]DGE
CONCERNING PLEA OF GIJILTY
After reviewing all relevant matters of record, including the Notice Regarding Entry
of a Plea of Guilty, the Consent of the Defendant, and the Report and Recommendation
Conceming Plea of Guilty of the United States Magistrate Judge, and no objections thereto
having been filed within fourteen (14) days of service in accordance with 28 U.S.C.
$ 636OXl), the undersigned District Judge is of the opinion that the Report and
Recommendation of the Magistrate Judge conceming the Plea of Guilty is correct, and it is
hereby accepted by the Court. Accordingly, the Court accepts the plea of guilty and
Defendant is hereby adjudged guilty.
Sentence will be imposed in accordance with the Court's scheduling order.
SO ORDERED.
Dated November !{.rott.
J SWESLEY HENDRIX
ITED STATES DISTRICT JUDGE
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Citation Nr: 1426218
Decision Date: 06/10/14 Archive Date: 06/16/14
DOCKET NO. 12-15 028 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Cleveland, Ohio
THE ISSUE
Entitlement to a waiver of collection of an overpayment in the amount of $1,068.00.
REPRESENTATION
Appellant represented by: Disabled American Veterans
WITNESS AT HEARING ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
L. Kirscher Strauss, Counsel
INTRODUCTION
The Veteran had active military service from January 1970 to January 1972.
This matter comes before the Board of Veterans' Appeals (Board) on appeal of a July 2011 decision by the Committee on Waivers and Compromises (Committee) at the Department of Veterans Affairs (VA) Regional Office (RO) in Milwaukee, Wisconsin.
In June 2013, the Veteran testified at a hearing at the RO before the undersigned Veterans Law Judge; a transcript of the hearing is associated with the electronic Virtual VA claims file.
FINDINGS OF FACT
1. For the period from December 1, 2004 through February 28, 2011, the Veteran received VA pension benefits to which he was not entitled due to increases in disability benefits from the Social Security Administration, resulting in an overpayment in the amount of $1,068.00; his request for a waiver of recovery of the overpayment timely.
2. There is no indication of fraud, misrepresentation or bad faith on the part of the Veteran in the creation of this debt.
3. The Veteran had received VA pension benefits since 1993 and was aware of his obligation to report changes in his income; he appears to be at fault in the creation of the debt.
4. It appears that the Veteran was not provided with a Financial Status Report by VA; nevertheless, he provided credible testimony that recovery of this overpayment would subject him to undue hardship.
CONCLUSION OF LAW
Resolving all doubt in favor of the Veteran, recovery of the debt in the amount of $1,068.00 would be against equity and good conscience. 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. §§ 1.962, 1.963, 1.965 (2013).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Recovery of an overpayment may be waived if there is no indication of fraud, misrepresentation, or bad faith, on the part of the person or the persons having an interest in obtaining the waiver, and recovery of such indebtedness would be against equity and good conscience. 38 U.S.C.A. § 5302(c) (West 2002); 38 C.F.R. §§ 1.962, 1.963 (2013).
In the absence of fraud, misrepresentation, or bad faith, consideration may be given as to whether recovery of the overpayment would be against equity and good conscience. The standard "equity and good conscience" will be applied when the facts and circumstances in a particular case indicate a need for reasonableness and moderation in the exercise of the Government's rights. The decision reached should not be unduly favorable or adverse to either side. The phrase "equity and good conscience" means arriving at a fair decision between the obligor and the Government. 38 U.S.C.A. § 5302; 38 C.F.R. § 1.965(a).
In making this determination, consideration will be given to the following elements, which are not intended to be all-inclusive: (1) the fault of the debtor; (2) balancing of faults between the debtor and VA (3) undue hardship of collection on the debtor; (4) whether collection would defeat the purpose of an existing benefit to the veteran; (5) whether failure to collect a debt would result in the unjust enrichment of the veteran; and (6) whether the veteran changed positions to his detriment in reliance upon a granted VA benefit. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.965(a); Ridings v. Brown, 6 Vet. App. 544, 546 (1994).
By way of background, the Veteran was awarded VA nonservice-connected pension benefits in a September 1993 rating decision; his countable income was limited to disability benefits from the Social Security Administration (SSA). In another letter dated in November 1993, he was advised that his pension award had been amended and was notified that he should notify VA immediately if there is any change in the number of his dependents or change in income. Evidence in the claims file reflects that the Veteran did, in fact, notify VA of some changes in his SSA income.
In December 2010, VA notified the Veteran that information received from SSA resulted in the discovery that VA had been counting the incorrect amount for the Veteran's SSA benefits and that he had been overpaid VA pension benefits as a result. In December 2010 correspondence, the Veteran did not challenge the increases in his SSA benefits, the creation of the debt, or the amount of the debt, but requested a waiver of collection of the overpayment based on his lack of income; he noted that the "amounts are very small."
In a March 2011 letter, the Debt Management Center (DMC) in St. Paul, Minnesota notified the Veteran that he had been overpaid $1,068 in VA pension benefits. The DMC referred the Veteran's request for a waiver to the Committee in May 2011. The Board observes that the referral identifies the date of receipt of the waiver request as April 21, 2011. That date is crossed out and replaced by March 28, 2011. The waiver in the Veteran's claims file that is date stamped March 28, 2011 belongs to another Veteran, and the Board has removed that document from the file and routed it to the correct file. The Board assumes that this Veteran's request for a waiver was received on April 21, 2011 as originally indicated and was similarly misfiled because it is not in the file. The referral also notes that a Financial Status Report (VA Form 20-5655) was requested from the Veteran. The Board has reviewed the entire claims file and has not located correspondence from VA that listed the Form among enclosures or that advised the Veteran that he should provide information about his financial status or any hardship.
In July 2011 the Committee in Milwaukee, Wisconsin denied the Veteran's request for a waiver of the overpayment. The Committee found no fraud, misrepresentation, or bad faith on the part of the Veteran and, instead, decided the claim on the principles of equity and good conscience. Specifically, the Committee concluded the Veteran was at fault in creation of the debt, he was unjustly enriched at government expense, and financial hardship was not established because he did not submit the required VA Form 20-5655. The Committee believed that "[d]efeat the purpose of the benefit [was] not significant in this decision," and that there was no evidence that the Veteran relinquished a valuable right.
Because the waiver request was timely and because there is no indication of fraud, misrepresentation, or bad faith on the part of the Veteran, the Board shall next consider whether recovery of the overpayment would be against equity and good conscience. See 38 U.S.C.A. § 5302(c); 38 C.F.R. §§ 1.962, 1.963.
In considering the "equity and good conscience" elements, the Veteran was unjustly enriched by the payment of excess VA pension benefits and he appears to be at fault in creating the debt by failing to advise VA of increases in his SSA disability income. However, the Veteran provided credible testimony that because the cost of living increases to his SSA benefits were so minimal and because his SSA and VA pension benefits were directly deposited into his bank, he did not catch the increases or realize he was being overpaid by VA. Indeed, the Board observes that the cost of living increases in the Veteran's SSA income during the relevant time period ranged from $17 to $41 per month. He also described his failing health, indicated that he lived from one month to another, and stated that he got behind on all of his bills once VA began to collect the overpayment because his income covers only his [living] expenses.
Therefore, when considering the relevant elements and the fact that it does not appear that the Veteran was provided with a Financial Status Report (VA Form 20-5655), but did indicate that collection of the debt would be an undue hardship, the Board resolves reasonable doubt in the Veteran's favor and finds that recovery of the overpayment would be against equity and good conscience even if the Veteran was minimally, unjustly enriched. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.965(a).
In sum, consideration of equity and good conscience as to the facts and circumstances in the Veteran's case indicates a need for reasonableness and moderation in the exercise of the Government's rights. In view of the Board's findings, recovery of the debt in the amount of $1,068.00 would be against equity and good conscience. Accordingly, the Veteran's timely request for a waiver of collection is granted.
ORDER
Waiver of recovery of the debt in the amount of $1,068.00 is granted.
____________________________________________
J. A. MARKEY
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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258 N.J. Super. 151 (1992)
609 A.2d 124
S.B., PLAINTIFF,
v.
S.J.B., DEFENDANT.
Superior Court of New Jersey, Chancery Division Family Part, Monmouth County.
Decided March 20, 1992.
*152 Harvey Blaustein, Attorney for Plaintiff.
Randee Pomerantz, Attorney for Defendant.
FELDMAN, J.S.C.
Does a homosexual relationship constitute adultery? The court rules that it does.
In this divorce case, the husband has filed a counterclaim alleging that his wife has entered into a lesbian relationship and that this involvement constitutes adultery. The wife, besides denying the allegations, states that assuming arguendo that the allegations are true, a non-heterosexual relationship does not constitute adultery.
*153 Not surprisingly, there is not a considerable body of prior law to draw upon but a review of both legal and social principles must lead one to the conclusion that adultery exists irrespective of the sex of the third party.
N.J.S.A. 2A:34-2 lists the various grounds for divorce; the first of which is "adultery", a term not defined in the statute. According to Black's Law Dictionary the historic legal definition of "adultery" is an act of sexual intercourse by a married person with another person other than one's spouse. Prior case law in New Jersey follows the prevailing view that an actual act of sexual intercourse must take place in order for adultery to exist. In W. v. W., 94 N.J. Super. 121, 226 A.2d 860 (Ch.Div. 1967) the court ruled that given the clear evidence of the physical inability of the wife to engage in intercourse, it would be impossible for her to commit adultery.
In H. v. H., 59 N.J. Super. 227, 157 A.2d 721 (App.Div. 1959) a complaint for divorce on the dual grounds of adultery and extreme cruelty was filed based upon the wife's lesbian relationship. The adultery count was voluntarily dismissed at trial and the alleged acts were found to constitute a cause of action for divorce on the grounds of extreme cruelty.
To better understand the underlying issue it is helpful to briefly review both the legal and social standards and to distinguish between adultery as a crime as opposed to a private civil wrong.
The seventh commandment states that "Thou shall not commit adultery" Exodus 20:14. A biblical definition of "Adultery" is "the lying with a woman married to a husband". See Deuteronomy 22:22 and Leviticus, 20:10. The penalty for this crime was death for both the adulterer and adulteress. Historically, there could only be adultery if the woman was married. The marital status of the male was irrelevant. If a married man be "lying with a woman not betrothed" the biblical crime was fornication and punished by a fine of 50 shekels of silver. Deuteronomy 22:29. (The commentators generally opine that *154 even the thought of adultery was an offense under the biblical code, an issue which we need not deal with today.)
Under the common law adultery was treated as a violation of civil law. According to Blackstone it is "the criminal conversation with a man's wife"; a definition not far removed from the biblical context. 3 Black, Com. 140. Puritan England also established adultery (intercourse with a married woman) as a felony punishable by death. While New Jersey never treated the issue with that degree of severity the crime of adultery "shall be punished by a fine not exceeding one hundred dollars or imprisonment not exceeding 6 months". Revised laws 1799, 248-14. (Section 15 of that law punished "fornication" by a fine of only fourteen dollars.) N.J.S.A. 2A:88-1 until its repeal in 1978 deemed adultery (a non-defined term) to be a misdemeanor.
From the earliest of biblical days the evil that was sought to be eliminated was the adulteration or poisoning of one's line of descent. Thus if a married woman were to be secretly impregnated by a third party male, the husband's issue would be severely tainted. The concept of the unknowing husband having to raise and support someone not of his loins was a condition not to be tolerated. Of course, sowing his seed with an unmarried woman was not treated with the same degree of severity; it was then her responsibility.[1] Needless to say, that is no longer the view taken by our society. We are also no longer requiring Hesther Prynne to wear clothing featuring the scarlet letter "A" on her breast so that the world may be warned of her adulterous nature. At least we have progressed far enough so that "adultery" can now be committed by either husband or wife, irrespective of the marital status of his or her new companion. But having eliminated the legal status of the *155 paramour from the definition we are left with the question of his or her gender.
Other jurisdictions are split on this issue. In New York an act of homosexual sodomy was held to not constitute an act of adultery entitling a wife to a divorce. Cohen v. Cohen, 103 N.Y.S.2d 426, 200 Misc. 19 (1951). The Court ruled that "carnal knowledge" is not the same as sexual intercourse and that therefore no action for divorce could exist. New Jersey, as well as other states, have taken the position that homosexuality is an act so offensive to the marital relationship that it entitles the other spouse to a divorce on the basis of extreme cruelty. See A. v. A., 87 N.J. Super. 440, 209 A.2d 668 (Ch.Div. 1965), H. v. H., 59 N.J. Super. 227, 157 A.2d 721 (App.Div. 1959). See also Currie v. Currie, 120 Fla. 28, 162 So. 152 (1935), Crutcher v. Crutcher, 86 Miss. 231, 38 So. 337 (1905), Anonymous, 2 Ohio N.P. 342, 3 Ohio Dec. 450 (1895). The basic thrust of these decisions is a recognition that the entrance into this type of a relationship is sufficiently egregious so as to constitute extreme cruelty.
Several jurisdictions have classified heterosexual non-coitus events as adultery. Rosser v. Rosser, 355 So.2d 717 (Ala. Civ. App. 1977) (acts of fellatio); Doe v. Doe, 286 S.C. 507, 334 S.E.2d 829 (App. 1985) (acts of fellatio); Menge v. Menge, 491 So.2d 700 (La. App. 5 Cir.1986) (oral sex).
Bales v. Hack, 31 Ohio App.3d 111, 31 OBR 197, 509 N.E.2d 95 (1986) approved the extension of "adultery" to include homosexual activities but gives no reason for that decision. The Georgia Courts also have adopted this view construing that under the Georgia statute a homosexual relationship is equivalent to having sexual intercourse with another person. Owens v. Owens, 247 Ga. 139, 274 S.E.2d 484 (1981).
It is not the intention of this court to judicially add a new cause of action for divorce; a responsibility left specifically to the Legislature. Rather it is the function of the court to define terms, based upon the standards of the times so that law may *156 truly reflect the mores of our society. Judge Considine's decision in Melia v. Melia, 94 N.J. Super. 47, 49-50, 226 A.2d 745 (Ch.Div. 1967) states that:
"Conditions which by modern understanding abort the human and social objects of marriage are essentially incompatible with the public purposes of marriage". Melia at 50 [226 A.2d 745].
All laws dealing with the termination of a marriage must first be looked at through the eyes of the injured spouse. Other than eighteen month continuous separation (N.J.S.A. 2A:34-2d) all grounds for divorce are bottomed in some type of "fault" concept which give the aggrieved spouse the right to seek termination of the marriage. While "fault" may not be a factor relative to other issues incident to divorce such as support or equitable distribution, Chalmers v. Chalmers, 65 N.J. 186, 320 A.2d 478 (1974), it is still the linch-pin in determining whether a marital relationship should be terminated.
An extramarital relationship viewed from this perspective is just as devastating to the spouse irrespective of the specific sexual act performed by the promiscuous spouse or the sex of the new paramour. The homosexual violation of marital vows could be well construed as the ultimate in rejection.
Pursuant to the current Criminal Code, Section 2C:14-1(c) "`Sexual Penetration'" means vaginal intercourse, cunnilingus, fellatio or anal intercourse between persons or insertion of the hand, finger or object into the anus or vagina either by the actor or upon the actor's instruction. The depth of insertion shall not be relevant as to the question of commission of the crime;"
This definition clearly indicates that the old traditional narrow construction of sexual intercourse is no longer the appropriate definition. Thus on purely technical grounds it could well be argued that acts set forth above should constitute "classical" events of adultery. But marital breakup should not be viewed on purely technical grounds. Rather it should be viewed from the standpoint of the parties. The abandonment *157 of one's partner and the entry into a homosexual relationship has been described as follows:
"It is difficult to conceive of a more grievous indignity to which a person of normal psychological and sexual constitution could be exposed than the entry by his spouse upon an active and continuous course of homosexual love with another. Added to the insult of sexual disloyalty per se (which is present in ordinary adultery) is the natural revulsion arising from knowledge of the fact that the spouse's betrayal takes the form of a perversion." H. v. H. 59 N.J. Super. 227, 236 [157 A.2d 721] (App.Div. 1959).
It is not the intent of this court to either condone or condemn homosexuality; that is a social issue best left to a more appropriate forum. What is important is to define, in human terms, those acts which constitute adultery so as to give rise to a termination of the marriage. Accordingly this court finds that adultery exists when one spouse rejects the other by entering into a personal intimate sexual relationship with any other person, irrespective of the specific sexual acts performed, the marital status, or the gender of the third party. It is the rejection of the spouse coupled with out-of-marriage intimacy that constitutes adultery.
Accordingly, the motion to strike the counterclaim is denied.
NOTES
[1] See State v. Lash, 16 N.J.L. 380 (Sup.Ct. 1838) for a philosophical and historical review of the concept of adultery.
|
CLERK'
S OFFIGEtJ.S. DIST.COUR-I
AT ROANOKE ,VA
FILED
IN TH E UN ITED STAT ES D ISTR ICT CO U RT JA8 39 2222
FO R TH E W E STER N D ISTR ICT O F V IR G IN IA BKJULIAC.DUDN ERK
R O A N O K E D IW SIO N ' (
D W C'R
W AK EEL A BDU L-SABU R , ) CASE NO.7:19CV00840
)
Petitioner, )
) M EM ORANDUM OPIM ON
)
UNITED STATES OF AM ERICA, ) By:Hon.Glen E.Conrad
) SeniorUnited StatesDistrictJudge
Respondent. )
PetitionerW akeelAbdul-sabur,an inm ateproceedingpro K ,filed thispetition fora writ
.
ofhabeascorpustmder28 U.S.C.j2241. A bdul-sabur challenges his confinem entunderthe
sentence im posed by this court on M ay 31, 2000, Case N o. 6:99CR 30073, for sending
threatening com m tm ications. U pon review of the record,the court concludes that the petition
mustbesllmm arily dism issed.
On M arch 8,2000,Abdul-saburpleaded guilty in theUnited StatesDistrictCourtforthe
W estern District of Virginia, pttrsuant to a written plea agreem ent, to Count One of an
indictment,chazging him with two cotmtsofm ailing athreatening communication,in violation
of18U.S.C.j876.ThePresentenceInvestigationReport(1TSR'')stated,çtsince gAbdul-saburj
wasatleasteighteen yearsold atthetime ghelcomm'ittedtheinstantoffenseofconviction,the
instantoffense ofconviction isa felony thatisacrime ofviolence,and thedefendanthasatleast
tw o prior felony convictions of a crim e of violence,the defendant is a career offender''tm der
U.S.S.G.j 4BI.I. The PSR found thatAbdul-sabur's career offender offense levelunder
j4Bl.1(F)was 17,reduced by tllree pointsforacceptance ofresponsibility,fora totaloffense
level of 14. W ith his criminal history category of V1, the PSR fotmd that Abdul-sabur's
sentencing guideline rangewas37 to46m onthsin prison.The courtsentenced Abdul-saburto a
term ofimprisonm entof46m onths,to be served consecutivetoany othersentence.
TheUnited StatesCourtofAppealsfortheFourthCircuitaffirmedthejudgment.United
Statesv.Sabur,238F.3d 417 (4th Cir.2000)(unpublished),cert.denied,532 U.S.936 (2001).
Abdul-saburhasalso unsuccessfully soughtpost-conviction reliefon num erousoccasions. See,
e.a., A bdul- saburv.United States,No.7:
- 05CV00189 (W .D.Va.April7,2005)(summarily
dismissed asuntimely filed and withoutmerit). In the instant j2241 petition,Abdul-sabtlr
arguesthathisfederalsentenceshould bevacated underUnited Statesv.W heeler,886 F.3d 415
(4thCir.2018),cert.denied,139S.Ct.1316(2019).
A prisonermustgenerally use a motion pursuantto 28 U.S.C.j 2255 to collaterally
attack the legality ofhisdetention undera federaljudgment. 28 U.S.C.j 2255(a,
);Davisv.
United States,417 U.S.333,343 (1974). A districtcourtcnnnotentertain a j2241 petition
challenging the lawfulness of a federalinmate's detention tmless a j 2255 motion would be
ldinadequateorineffectiveto testthelegality of(thatinmate's)detention.'' 28 U.S.C.j2255/)
(sçthesavingsclause');Mieeler,886F.3dat423.
C1(T)he rem edy afforded by 5 2255 is notrendered inadequate or ineffective merely
because an individual has been unable to obtain relief under that provision, or because an
individualisprocedurally barred from fling aj2255motion.''In reVial,115F.3d 1192,1194
n.5 (4th Cir.1997)(citationsomitted). Rather,theFourth Circuithasconcluded thatj 2255 is
inadequate and ineffed ive to testthe legality of a federalcrim inalsentence when these specifc
factorsare present:
(1)atthe time ofsentencing,settled law ofthis circuitorthe Supreme Court
established the legality ofthe sentence'
,(2)subsequentto the prisoner's direct
appeal and fit'
st j 2255 motion,the.aforementioned sdtled substantive law'
changed and was deemed to apply retroactively on collatez'alreview;(3)the .
pdsoneri,ilmableto meetthegatekeepzg provisionsof5 2255(1$(2)forsecond
orsuccessive motions;and (4)dueto thisretroactivechange,thesentencenow
presentsan enorsufficiently graveto bedeemed a fundnmentaldefect.
W heeler. 886 qmiller@example.net. Because Abdul-sabur's 92241 petition does not rely on a
retroactively applicablechangein substantive1aw afterhisdirectappealand firstj2255motion,
he catmot satisfy the requkem ents of W heelerto bring llispetition tmderthe savings clause in
j2255.Accordzgly,thecom'tdoesnothavejurisdictiontoaddresshisclnimsunderj2241
$and .
willsummnrily dismisshispetitionwithoutprejudize.Anappropriateotderwillissueherewith.
'
Ihe Clerk is dkected to send.copies of this m emorandum opinion and accompanying
ordertopetitioner.
ENTER :Thi day ofJanuary,2020.
SeniorU nited StatesD istrictJudge
I .' .
%
3 .
|
Citation Nr: 1243555
Decision Date: 12/20/12 Archive Date: 12/27/12
DOCKET NO. 10-22 976 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in St. Petersburg, Florida
THE ISSUE
Entitlement to service connection for an acquired psychiatric disorder, to include posttraumatic stress disorder (PTSD), depression and/or bipolar disorder.
REPRESENTATION
Appellant represented by: Florida Department of Veterans Affairs
ATTORNEY FOR THE BOARD
J. Murray, Associate Counsel
INTRODUCTION
The Veteran served on active duty in the United States Air Force from July 1987 to October 1993, with additional unverified periods of inactive duty. The Veteran served in Southeast Asia from June 1992 to June 1993.
This matter comes before the Board of Veterans' Appeals (Board) on appeal from a September 2008 rating decision of the Department of Veterans Affairs (VA) Regional Office in St. Petersburg, Florida (RO). In that rating decision, the RO denied the claim for entitlement to service connection for bipolar disorder (claimed as depression and PTSD).
The Veteran initially filed a claim for service connection for PTSD and depression. In the specific context of mental disorders, the United States Court of Appeals for Veterans' Claims (the Court) has held that "when a claimant makes a claim, he is seeking service connection for symptoms regardless of how those symptoms are diagnosed or labeled." See Clemons v. Shinseki, 23 Vet. App. 1 (2009). This case clarifies the appropriate posture for claims such as the Veteran's, where multiple mental disorders, and/or disparate diagnoses are involved. Accordingly, the Board is expanding the issue on appeal at this time, as reflected on the title page of this decision, and will consider whether service connection may be awarded for an acquired psychiatric disorder, to include PTSD, depression, and bipolar disorder, as instructed by the Court in Clemons.
The appeal is REMANDED to the RO via the Appeals Management Center (AMC), in Washington, DC. VA will notify the appellant if further action is required.
REMAND
The Veteran seeks entitlement to service connection for an acquired psychiatric disorder, to include PTSD, depression and bipolar disorder. After having carefully considered the matter, and for reasons expressed immediately below, the Board finds that the claim on appeal must be remanded for further evidentiary development.
The Veteran asserts that his diagnosed acquired psychiatric disorder is related to either his period of service in Southeast Asia from June 1992 to June 1993 or witnessing service members assassinated at Clark Air Force Base in 1990. Post-service VA and private treatment records show various psychiatric diagnoses, including PTSD, depression, bipolar disorder and polysubstance abuse. See April 2008 private hospital summary from Springbook Hospital, as well as VA treatment records dated in 2008. However, the more recent VA treatment records dated in 2010 no longer reflect a diagnosis of PTSD.
The Board observes that the RO had denied the Veteran's claim because of the lack of verified inservice stressor events. See rating decisions dated in September 2008 and September 2009. The regulations pertaining to PTSD were amended during the pendency of this appeal, and 38 C.F.R. §3.304(f)(3) no longer requires the verification of an in-service stressor if the Veteran was in a location involving "fear of hostile military or terrorist activity." Such a location is evidenced by awards such as the Iraq Campaign Medal or the Vietnam Service Medal. In addition, lay testimony alone can be used to establish the occurrence of an in-service stressor in these situations. The new regulatory provision requires that: (1) A VA psychiatrist or psychologist, or contract equivalent, must confirm that the claimed stressor is adequate to support a diagnosis of PTSD; (2) the claimed stressor is consistent with the places, types, and circumstances of the Veteran's service; and (3) the Veteran's symptoms are related to the claimed stressor. Id. The liberalizing criteria contained in the new § 3.304(f)(3) will be applied to PTSD service-connection claims that are pending as of the effective date of the regulation (July 13, 2010) and to claims filed on or after this effective date. Thus, the amended regulation applies in this case.
As noted, the Veteran claims that he has an acquired psychiatric disorder related to his period of service. In this regard, the Board notes that the requirement that there be a current disability is satisfied when the disability is shown at the time of the claim or during the pendency of the claim, even though the disability subsequently resolves. McClain v. Nicholson, 21 Vet. App. 319 (2007).) Here, it remains unclear whether the Veteran has a current diagnosis of PTSD. A diagnosis of PTSD was reflected in the earlier private and VA treatment records dated in 2008; however, the subsequent VA treatment records are replete with reference to diagnoses of bipolar disorder and polysubstance.
Given the recent regulatory changes concerning service connection for PTSD, the Board is of the opinion that a VA examination would be probative to ascertain whether the Veteran's current acquired psychiatric disorder is related to service or whether he has PTSD as a result of a fear or hostile or terrorist activity. There is no medical opinion of record that is adequate for adjudication purposes, given the scope of the claim. See McLendon v. Nicholson, 20 Vet. App. 79, 83 (2006). Prior to the examination, all outstanding medical records should be obtained.
Accordingly, the case is REMANDED for the following action:
1. The RO should obtain the names and addresses of all medical care providers (both VA and private) who treated the Veteran for his claimed acquired psychiatric disorder since April 2010. After securing any necessary release, the RO should obtain these records.
If any records sought are not obtained, notify the Veteran and his representative of the records that were not obtained, explain the efforts taken to obtain them, and describe further action to be taken.
2. Thereafter, the Veteran should be afforded an examination by a VA psychiatrist or psychologist to determine whether the Veteran has PTSD due to the stressor of being in fear of hostile action during active service or any other claimed service-related stressor, and to determine the nature and etiology of any other acquired psychiatric disorders that are present.
The examiner should review the claims files prior to completing the examination report. Based on the review of the claims files and examination of the Veteran, the examiner should identify:
(1) whether the Veteran currently has PTSD under the diagnostic criteria of DSM-IV (or if he has had such diagnosis at any time since May 2008; and
(2) If so, whether such PTSD is due at least in part to fear of hostile action during active service serving on at Clark AFB when servicemen were killed.
With respect to each additional acquired psychiatric disorders present during the period of this claim, the examiner should express an opinion as to whether it is at least as likely as not (i.e., at least 50 percent probable) that such disorder originated during service, is otherwise etiologically related to service.
The rationale for all opinions expressed must be provided. If the examiner is unable to provide the requested opinion, he or she must explain why the opinion cannot be provided.
3. After completing the requested actions, and any additional notification and/or development deemed warranted, the AMC should adjudicate the expanded claim for service connection for acquired psychiatric disorder, in light of all pertinent evidence and legal authority. If the benefits sought on appeal are not granted to the Veteran's satisfaction, issue an appropriate supplemental statement of the case and afford the Veteran and his attorney the requisite opportunity to respond. The case should then be returned to the Board, if in order, for further appellate action.
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. 2012).
_________________________________________________
DAVID L. WIGHT
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) (2012).
|
278 N.W.2d 552 (1979)
Randall LaMERE, Petitioner, Appellant,
v.
STATE of Minnesota, Respondent.
No. 48954.
Supreme Court of Minnesota.
April 13, 1979.
*553 C. Paul Jones, Public Defender, and J. Christopher Cuneo, Asst. Public Defender, Minneapolis, for appellant.
Warren Spannaus, Atty. Gen., St. Paul, Gary W. Flakne, County Atty., Vernon E. Bergstrom, Chief Asst. County Atty., Appellate Division, and David W. Larson, Asst. County Atty., Minneapolis, for respondent.
*554 Considered and decided by the court en banc without oral argument.
WAHL, Justice.
This is an appeal from an order denying petitioner postconviction relief from his 1974 conviction of aggravated assault, Minn.St. 609.225, subd. 2. Petitioner contends (1) that he was prejudiced by the testimony of the arresting officer that he advised petitioner of his rights, (2) that he was prejudiced by the prosecutor's unintentional elicitation of evidence implying that petitioner was a pimp, (3) that the state failed to prove that he used the gun that was seized following his arrest, (4) that the trial court erred in instructing the jury that the gun was a "firearm" as that term is used in the statute defining "dangerous weapon," (5) that the trial court erred in refusing to submit any lesser offenses, and (6) that the trial court's instructions on self-defense were inadequate. We affirm.
This case arose out of a dispute that occurred in a restaurant in downtown Minneapolis at 2 a. m. on April 4, 1974. Petitioner, who was 26 at the time, entered the restaurant with a female juvenile but, instead of sitting with her in the booth to which he escorted her, he sat at the counter. A dispute occurred between the manager of the restaurant and petitioner over petitioner's refusal to sit with the girl. Before leaving, petitioner threatened the manager, saying "There is a contract out on you." A minute or two after he left, petitioner returned, obtained a derringer from the girl's purse, and walked up to the manager, pointing the gun at his head. It is not clear whether petitioner pulled the trigger but it is undisputed that the gun did not discharge and that in a split second petitioner ran out the door. Moments later police, who gave chase, captured petitioner a short distance away. Near him they found the derringer, which petitioner had abandoned. It was in several pieces, having broken upon impact with the street.
1. Petitioner's first contention is that he was prejudiced by the testimony of the arresting officer that he had "conducted a patdown search of [petitioner], handcuffed him, and advised him of his rights." (Italics supplied.) Petitioner contends that the likely effect of this was to focus the jury's thinking on why there was no testimony relating to his having been questioned by police and that the inference the jury likely drew was that he had been questioned but that he had either exercised his right to silence or that what he had said was suppressed.
Petitioner relies primarily on this court's decision in State v. Beck, 289 Minn. 287, 183 N.W.2d 781 (1971). In Beck we held that it was prejudicial error under the facts of that case for the trial court to admit needless testimony of an arresting officer that he had advised the accused of his right to remain silent and that anything he said might be used against him. We reasoned that this evidence, when not elicited as foundation for admission of any out-of-court statement by defendant, might have led the jury to infer that defendant had refused to talk with police and that he did so because he was guilty.
The Beck case is still good law,[1] but there are a number of ways in which the case can be distinguished. First, in Beck, the officer specifically recited the rights that he had read to defendant. Here the officer did not summarize what he had told petitioner, nor did he ever use the phrase "Miranda warning." Second, the testimony in Beck was apparently intentionally elicited, and the trial court had an opportunity to prevent the error because the opinion stated that the evidence was admitted "over clearly stated objections." Here, the testimony was apparently unintentionally *555 elicited. Third, the evidence in the Beck case was close on the issue of identification. Here, the evidence of petitioner's guilt was overwhelming. We believe that allowing the arresting officer to testify that he had advised petitioner of his rights was error, but that it was harmless beyond a reasonable doubt. Chapman v. California, 386 U.S. 18, 87 S. Ct. 824, 17 L. Ed. 2d 705 (1967).
2. Petitioner next contends that he was prejudiced by the prosecutor's unintentional elicitation of evidence that one of the reasons the manager asked petitioner to sit in the booth was that he did not allow "hustling" in the restaurant.
The manager was of the opinion that petitioner was a pimp and that that was why petitioner left the girl alone in the booth. Evidence of this was excluded on relevancy grounds, and the record indicates that the prosecutor, in questioning the manager, was not trying to elicit anything about hustling or pimping. In fact, and in accordance with the ruling of the court, she had cautioned the witness.
Basically, then, this is a case involving the unintentional elicitation of evidence ruled inadmissible. Our main concern, therefore, is with the issue of whether petitioner was prejudiced by the evidence. Our conclusion is that he was not. For one thing, the evidence which was properly admitted might well have prompted the jury to infer on its own that petitioner was a pimp. The evidence indicated that the girl was only 13 or 14, whereas petitioner was 26, and that he left her in the booth by herself and not at the counter. Petitioner himself testified that he had two different girls with him that night, and he did not testify to having a job. We are inclined to conclude that the jury would have inferred petitioner's occupation even if the manager had not implied he was a hustler. If they had not inferred it from petitioner's testimony, it is likely that they probably did not understand what the manager meant by "hustling." Because the evidence of petitioner's guilt was so overwhelming, a reversal on this ground alone could not be justified.
3. Petitioner next claims that the state failed to prove that he used the gun. There is no merit to this contention.
Numerous witnesses testified that he used a derringer, he did not deny it, and such a gun was found within a few feet of where he was arrested.
4. A more difficult issue, whether an inoperable firearm is a "firearm" and therefore a "dangerous weapon," is one that was created by the trial court's decision to instruct the jury that the derringer found near petitioner was a "firearm." The trial court gave this instruction because it believed that the gun was a "firearm" regardless of whether it was operable. Petitioner argues that an inoperable firearm is no longer a "firearm" and that even if the derringer was a "firearm," the instruction was unwarranted because it interfered with his right to have the jury decide if the gun was a "dangerous weapon," and confusing because it implied that the court believed the state's evidence had linked him to the gun as a matter of law.
Minn.St. 609.02 subd. 6, defines "dangerous weapon" as follows:
"`Dangerous weapon' means any firearm, whether loaded or unloaded, or any device designed as a weapon and capable of producing death or great bodily harm, or any other device or instrumentality which, in the manner it is used or intended to be used, is calculated or likely to produce death or great bodily harm."
There are no Minnesota cases dealing precisely with the issue of whether a firearm which is rendered inoperable is still a "firearm" and, therefore, a "dangerous weapon" if it is used in a robbery or an assault. However, other cases of this court dealing with the definition of "dangerous weapon" are relevant because they illustrate the expansive interpretation we are inclined to give the statute.
One example is State v. Moss, 269 N.W.2d 732 (Minn.1978), where the issue was whether a person could be convicted of aggravated robbery if he kept his "dangerous *556 weapon" in his pocket and did not use it. In affirmatively answering this question, we stated as follows:
"The definition of `dangerous weapon' in § 609.02, subd. 6 creates three categories: (1) firearms, loaded or unloaded; (2) devices designed as weapons and capable of producing death or great bodily harm; and (3) devices which, in the manner used or intended to be used, are calculated or likely to produce death or great bodily harm.
"Reading § 609.02, subd. 6 in connection with the armed robbery portion of the aggravated robbery statute, § 609.245, we think it is clear that a defendant who has either the first or second type of weapon on his person during the robbery commits armed robbery whether or not he uses the weapon or intends to use it. A different standard applies when the defendant personally possesses at the time of the robbery an item which is not designed as a weapon but which, in the manner used or intended to be used, is calculated or likely to produce death or great bodily harm. Such a person should be deemed to have committed armed robbery if it can be shown that while committing the robbery he displayed or used the item as a weapon or intended to use it as such if its use became necessary." 269 N.W.2d 735.
Another example is State v. Seifert, 256 N.W.2d 87 (Minn.1977). In that case the defendant, relying on the traditional definition of a "firearm" as a gun that uses gunpowder to fire the projectile, argued that his CO 2 gun was not a "firearm." In rejecting this contention we stated as follows:
"In our opinion, the fact that the gun defendant used required gas rather than gunpowder to discharge its projectile does not mean, as defendant contends, that the gun could not be a firearm within the meaning of the term `firearm' used in § 609.02. Having statutory purpose in mind, we think that term should be defined broadly to include guns using newer types of projectile propellants and should not be restricted in meaning to guns using gunpowder. In this respect we note that § 97.40, subd. 34, defines `firearms' for purposes of game and fish laws as `any gun from which shot or a projectile is discharged by means of an explosive, gas, or compressed air.' The gun used by defendant might also qualify as a dangerous weapon under the alternative test contained in § 609.02 (`any device designed as a weapon and capable of producing death or great bodily harm')." 256 N.W.2d 88.
In this case we could refuse to reach the issue of whether an inoperable firearm is a "firearm" because there was no evidence that the gun was inoperable at the time petitioner allegedly used it. The difficulty with this approach, however, is that, while the evidence indicated that petitioner broke the gun when he threw it on the pavement moments before he stopped running, there was also testimony that he had pulled the trigger and the gun had clicked. One could infer from this latter testimony that the gun might have been defective at the time of the assault.
Accordingly, we believe it is necessary to reach the issue, and we hold that a firearm manufactured as such is a "firearm" even if there is some mechanical defect which renders it temporarily inoperable. There are two main reasons why the statute specifies that a "firearm" is a "dangerous weapon" whether it is loaded or unloaded. First, so long as a firearm has the apparent ability to inflict injury, the victim of an assault or robbery will respond in the same way whether or not the gun is loaded. An unloaded firearm has the same capacity to create fear and/or to cause people to comply with criminal demands as a loaded one. Second, if a firearm were not a "firearm" when it was unloaded, great difficulties would be created for prosecutors because of the difficulty of producing any direct evidence that the gun used was in fact loaded. These factors justify treating a firearm as a "firearm" even if it was temporarily inoperable at the time of the offense because of a defect. In saying this, we wish to make it clear that this decision does not include toy *557 guns, simulated guns, or blank starter pistols. We are concerned with a firearm which was designed by the manufacturer for use as a firearm and which continues to look like a firearm but for some mechanical reason is technically, if only temporarily, inoperable. In such a situation, and this is such a situation, the gun should still be considered a firearm, and both the trial court and the postconviction court applied this interpretation of the statute.
A related issue is petitioner's contention that even if an inoperable firearm is a "firearm," the instruction was improper. There are two parts to this contention.
(a) First, petitioner argues that the instruction was unwarranted because it tended to interfere with the jury's power of lenity.
There are a number of cases from other jurisdictions which uphold the right of a trial court to instruct the jury that a particular gun was a "dangerous weapon" under the statutory definition of "dangerous weapon" in use in that jurisdiction. See, e. g., State v. Ashland, 259 Iowa 728, 145 N.W.2d 910 (1966). We agree with petitioner, however, that generally a trial court should not instruct the jury that an uncontradicted fact exists when that fact constitutes an essential element of the offense. As this court stated in State v. Carlson, 268 N.W.2d 553, 560 (Minn.1978):
"The general rule is that a jury has a power of lenity and can bring in a not guilty verdict in the teeth of the facts. While it does not follow from this principle that a defendant is entitled to have all lesser-included offenses submitted even if the evidence does not reasonably warrant their submission, it does follow that he is entitled to have all the elements of the offense with which he is charged submitted even if the evidence relating to these elements is uncontradicted."
If a petitioner actually admits certain elements, then the court properly may so instruct the jury. Id.
Here, petitioner did not admit that the gun was a "dangerous weapon" and, therefore, the court should have instructed the jury on the definition of "dangerous weapon." The court should have explained that a firearm may still be a "firearm" even if it is unloaded or temporarily inoperable at the time it is used. On the other hand, we do not think that a new trial is required, because even if the trial court had instructed the jury as we have indicated, the result would have been the same.
(b) Petitioner's other argument, that the instruction was confusing, is based on petitioner's belief that the instruction may have given the jury the impression that the court believed that the state had linked petitioner to the derringer as a matter of law. This is one of the dangers that a court risks when it gives the kind of instruction given in this case. See, State v. Carlson, supra, holding that an instruction of this nature, while it was justified, may have misled the jury into believing that as a matter of law there was no merit to defendant's theory of the case. In this case we cannot conclude that the jury was confused. The trial court did not instruct the jury that petitioner was armed with the derringer, only that the derringer was a "firearm" and, therefore, a "dangerous weapon." The court did instruct the jury that one of the elements which the state had to prove was that a dangerous weapon was used. In addition, petitioner did not claim that the derringer found by the police was not the gun he had used; rather, he tried to convince the jury that he had used it and pointed it at the manager in self-defense to prevent an assault by the manager.
5. Petitioner also contends that the trial court erred in refusing to submit any lesser offenses. At trial, defense counsel requested submission of simple assault, Minn.St. 609.22, and, failing that, submission of the offense of intentionally pointing a gun at a human being, Minn.St. 609.66, subd. 1(2).
The rule is that a trial court must submit a lesser-included offense only if there is evidence which produces a rational basis for a verdict acquitting defendant of *558 the offense charged and convicting him of the lesser offense. State v. Leinweber, 303 Minn. 414, 228 N.W.2d 120 (1975).[2]
In this case, the offense of simple assault is necessarily included in the offense of assault with a dangerous weapon because it is impossible to commit the latter without also committing the former. The same may not be said of the offense of pointing a gun at a human being, because one can commit assault with a dangerous weapon by using some weapon other than a gun. Even if one assaults someone with a gun, one may not have actually pointed the gun at the person.
Whether it was error for the trial court to refuse to submit the lesser included offense of simple assault depends upon whether the jury rationally could find petitioner not guilty of aggravated assault with a dangerous weapon but guilty of simple assault. Here, petitioner admitted that he had a gun in his hand. As a result, the jury's attention was diverted to the issue of self-defense. The trial court did not abuse its discretion in concluding that petitioner was guilty as charged or stephenvaldez@example.net. See, State v. Briggs, 256 N.W.2d 305 (Minn. 1977).
6. Petitioner's final contention is that the trial court's instructions on self-defense were inaccurate. There is no merit to this issue.
Affirmed.
NOTES
[1] See, Doyle v. Ohio, 426 U.S. 610, 96 S. Ct. 2240, 49 L. Ed. 2d 91 (1976), where the court held that a prosecutor's use for impeachment purposes of a defendant's silence at the time of arrest after receiving a Miranda warning violated due process. One of the implications of the Doyle case would seem to be that it is also improper even to elicit evidence that a Miranda warning was given, unless the evidence was necessary as a foundation for the admission of a statement by the defendant.
[2] Recent cases illustrating the application of this test include: State v. Nesgoda, 261 N.W.2d 356 (Minn.1977); State v. McDonald, Minn., 251 N.W.2d 705 (1977); and State v. Malzac, 309 Minn. 300, 244 N.W.2d 258 (1976).
|
745 N.W.2d 765 (2008)
PEOPLE of the State of Michigan, Plaintiff-Appellee,
v.
Sally Ann BENNETT, Defendant-Appellant.
Docket No. 134576. COA No. 277682.
Supreme Court of Michigan.
March 21, 2008.
On order of the Court, the application for leave to appeal the July 13, 2007 order of the Court of Appeals is considered and, pursuant to MCR 7.302(G)(1), in lieu of granting leave to appeal, we REMAND this case to the Court of Appeals for consideration as on leave granted of whether the defendant's sentence is invalid, see MCR 6.508(D)(3)(b)(iv); People v. Kimble, 470 Mich. 305, 314 n. 6, 684 N.W.2d 669 (2004); and People v. Babcock, 469 Mich. 247, 666 N.W.2d 231 (2003).
WEAVER, J., dissents and states as follows:
I dissent. I would not remand this case and I would deny leave to appeal because I am not persuaded that the decision of the Court of Appeals was clearly erroneous or that defendant has suffered any injustice in this case.
*766 CORRIGAN, J., would deny, leave to appeal. See People v. Bennett, 471 Mich. 877, 688 N.W.2d 498 (2004).
|
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
_____________
No. 98-1362WM
_____________
Hoover Case, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the Western
* District of Missouri.
ADT Automotive, Inc., doing business *
as Metro Auto Auction of Kansas City, * [UNPUBLISHED]
Inc., *
*
Appellee. *
_____________
Submitted: September 22, 1998
Filed: September 30, 1998
_____________
Before McMILLIAN, HEANEY, and FAGG, Circuit Judges.
_____________
PER CURIAM.
Hoover Case is an auctioneer who provided his services to ADT Automotive,
Inc., doing business as Metro Auto Auction of Kansas City, Inc., (ADT) until he
became partially paralyzed and was confined to a wheelchair. When ADT refused to
build a ramp so Case could reach the auction blocks and continue working for ADT,
Case sued ADT under the Americans with Disabilities Act, 42 U.S.C. § 12112 (1994)
(ADA), and the Missouri Human Rights Act, Mo. Ann. Stat. § 213.055 (West 1996)
(MHRA). The district court granted summary judgment for ADT, reasoning Case was
an independent contractor and thus not covered under either the ADA or the MHRA.
See Birchem v. Knights of Columbus, 116 F.3d 310, 312 (8th Cir. 1997) (holding ADA
does not protect independent contractors); Lenhardt v. Basic Inst. of Tech., Inc., 55
F.3d 377, 380 (8th Cir. 1995) (construing MHRA in conformity with federal decisions
addressing federal employment discrimination laws). Case appeals.
We review de novo the district court’s grant of summary judgment and affirm
only when the record presents no genuine issue of material fact and the prevailing party
is entitled to judgment as a matter of law. See Lenhardt, 55 thomaslisa@example.net. We also
review de novo the district court’s decision that Case was an independent contractor
and, in doing so, apply the general common law of agency to distinguish between
protected employees and unprotected independent contractors. See Birchem, 116 thomaslisa@example.net. After carefully reviewing the record and the parties’ briefs, we conclude the
district court did not commit error in granting summary judgment to ADT.
Accordingly, we affirm the district court’s judgment for the reasons set forth in its
opinion. We grant Case’s motion to strike ADT’s counterdesignation of the joint
appendix. See 8th Cir. R. 30A(c).
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
-2-
|
Case 3:19-cv-00338-CWR-LRA Document 35 Filed 04/15/20 Page 1 of 1
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
STEVEN JONES PLAINTIFF
V. CAUSE NO. 3:19-CV-338-CWR-LRA
MALKEET SINGH, et al. DEFENDANTS
ORDER
Before the Court are Defendant Cargo Solution Express, Inc.’s Motions for Partial
Summary Judgment. Docket Nos. 26 and 28. Cargo seeks partial summary judgment on Plaintiff
Steven Jones’ negligence and punitive damages claims. Jones did not respond to either motion
despite the Court granting multiple requests for extensions of time to submit responses.
The grounds for summary judgment are familiar. See James v. Antarctic Mech. Servs.,
Inc., No. 3:18-CV-678-CWR-FKB, 2020 WL 86209, at *1–*2 (S.D. Miss. Jan. 7, 2020). Cargo
is entitled to summary judgment as to Jones’ independent negligence claims because Cargo has
“concede[d] liability under vicarious liability.” Id. at *1 n.3 (citations omitted). Since “punitive
damages are not recoverable from the employer based on their employee’s actions as a matter of
Mississippi statutory and case law,” and there is no evidence that Cargo acted with “malice or
gross neglect,” Cargo is entitled to summary judgment as to Jones’ claim for punitive damages.
Id. at *5 (quotations and citation omitted).
Accordingly, Cargo’s Motions are granted.
SO ORDERED, this the 15th day of April, 2020.
s/ Carlton W. Reeves
UNITED STATES DISTRICT JUDGE
|
4 Cal. App. 4th 844 (1992)
5 Cal. Rptr. 2d 906
CITIBANK, N.A., Plaintiff and Appellant,
v.
CROWELL, WEEDON & CO. et al., Defendants and Respondents.
Docket No. B057322.
Court of Appeals of California, Second District, Division Five.
March 17, 1992.
*846 COUNSEL
Keesal, Young & Logan, Neal S. Robb, Michael A. Thurman and Dawn M. Schock for Plaintiff and Appellant.
White & Case, John A. Sturgeon, David J. Wilson, Kendig & Ross, Dennis A. Kendig and Bradley D. Ross for Defendants and Respondents.
[Opinion certified for partial publication.[]]
OPINION
ASHBY, J.
Appellant Citibank, N.A. (Citibank), petitioned the superior court to vacate or correct an arbitration award in favor of respondents Crowell, Weedon & Co. (Crowell), Clifford Drake & Co., Inc. (Drake) and others. (Code Civ. Proc., §§ 1285, 1286.2.) The court denied the petition and entered judgment confirming the award. (Code Civ. Proc., §§ 1286, 1287.4.) Citibank appeals. (Code Civ. Proc., § 1294, subd. (d).)
The underlying dispute is among various municipal securities broker/dealers concerning their relative liabilities, under the rules of their organization, the Municipal Securities Rulemaking Board (MSRB), for the sale of bonds which had been stolen.
The rules of the municipal securities industry provide for the "reclamation" of bonds which have previously been accepted for delivery, if some defect in the original delivery is subsequently discovered. A subsequent discovery that delivered bonds were stolen allows for such reclamation by the purchasing party back to the selling party. The reclamation procedure allows the purchasing party to return the bonds to the last seller, which may then reclaim the bonds back to the party which sold to that seller, and so on up the chain.[1]
A thief stole 225 Los Angeles Airport improvement coupon bearer bonds. Appellant Citibank, without knowledge the bonds were stolen, purchased *847 them. On January 6, 1983, Citibank sold them to R.L. Crary & Co., Inc. (Crary), who sold them on the same day to Helm, Nabori & Perry (Helm),[2] who sold them the same day to respondent Crowell, who then sold them to other broker/dealers or customers.
In March 1983 the 225 bonds were reported stolen. In the fall of 1983, 55 of the bonds were reclaimed to Crowell, which were then reclaimed to Helm and Crary and Citibank pursuant to the reclamation procedure.
In September 1988 another 15 stolen bonds were reclaimed to Crowell by one of its broker/dealer customers. When Crowell attempted to reclaim the 15 bonds to Drake, as Helm's successor, Drake refused, on February 6, 1989. Pursuant to the MSRB's Arbitration Code (rule G-35) which required member dealers to arbitrate their disputes, Crowell filed a statement of claim against Drake on March 31, 1989. Crowell's statement of claim involved the 15 bonds recently reclaimed to Crowell and a request to establish a contingent liability to cover the 155 remaining bonds still outstanding. Drake filed a statement of answer denying liability and filed third party claims against Crary and Citibank, alleging that if Crowell was entitled to reclaim the bonds to Drake, then Drake was entitled to reclaim them to Crary and (on information that Crary was no longer in business) to Citibank. Citibank filed its statement of answer. The parties submitted to arbitration before a three-person arbitration board of the MSRB. By the time of the arbitration hearing an additional 15 bonds had been reclaimed to Crowell. The arbitrators permitted Crowell to amend its claim to include these 15 bonds, making a total of 30.
The arbitrators ruled: (1) Both Citibank and Crowell have been negligent in the chain of events leading to this dispute, (2) to simplify the formal reclamation process Crowell shall deliver directly to Citibank the 30 bonds for the amount of $32,374.39, (3) Crowell will bear sole responsibility for interest payments from 1983 on the 30 bonds reclaimed by other dealers to Crowell, (4) future reclamations of the remaining 140 bonds will be reclaimed directly to Citibank by Crowell in an amount equal to that paid by Crowell to reclaiming dealers in the future and (5) future liability on those 140 bonds for interest payments between 1983 and the date the bonds are *848 reclaimed to Crowell by other dealers will be a liability shared equally by Crowell and Citibank.
Citibank contends the award exceeded the powers of the arbitrators. Finding no merit to these contentions we affirm.
I
DISCUSSION
(1a) The grounds upon which a court may vacate an arbitration award are extremely limited. (Code Civ. Proc., § 1286.2.) "The merits of a controversy in arbitration are not open for judicial review. The findings of an arbitrator on questions of law as well as questions of fact are final and conclusive. It is not appropriate for courts to review the sufficiency of the evidence to support the arbitrator's award or to pass upon the validity of the arbitrator's reasoning.... [¶].... An award will not be set aside merely because the arbitrator erred in finding the facts or applying the law." (City of Oakland v. United Public Employees (1986) 179 Cal. App. 3d 356, 363-364 [224 Cal. Rptr. 523].)
However, a court shall vacate an arbitration award if "[t]he arbitrators exceeded their powers." (Code Civ. Proc., § 1286.2, subd. (d).) (2) (See fn. 3.), (1b) Since the arbitrators derive their power solely from the arbitration agreement or the parties' stipulation submitting to arbitration, it is the court's province to interpret the parties' agreement in order to determine whether the arbitrators exceeded their powers by deciding a dispute which was not arbitrable. (Pacific Crown Distributors v. Brotherhood of Teamsters (1986) 183 Cal. App. 3d 1138, 1143 [228 Cal. Rptr. 645]; Department of Public Health v. Service Employees Internat. Union (1989) 215 Cal. App. 3d 429, 434 [263 Cal. Rptr. 711]; see AT&T Technologies v. Communications Workers (1986) 475 U.S. 643, 648-651 [89 L. Ed. 2d 648, 655-657, 106 S. Ct. 1415].)[3]
Appellant Citibank contends there were three respects in which the arbitrators exceeded their powers in this case.
*849 II
ELIGIBILITY FOR ARBITRATION WITHIN SIX-YEAR TIME LIMIT
MSRB's Arbitration Code, rule G-35, section 6 provides: "(a) No claim, dispute or controversy shall be eligible for submission to arbitration under this Arbitration Code in any instance where six years shall have elapsed from the occurrence of the act or event giving rise to the claim, dispute or controversy."
Identical provisions in the arbitration codes of the National Association of Securities Dealers and New York Stock Exchange have been found to be "an eligibility requirement rather than a statute of limitations.... [It] therefore serves as an absolute bar to claims submitted for arbitration more than six years after the event which gave rise to the dispute"; such claims are not subject to arbitration. (PaineWebber, Inc. v. Farnam (7th Cir.1989) 870 F.2d 1286, 1292; PaineWebber, Inc. v. Hartmann (3d Cir.1990) 921 F.2d 507, 512-514.)
(3) Citibank contends "the occurrence of the act or event giving rise to the claim, dispute or controversy" is the sale of the stolen bonds by Crowell on January 6, 1983, and therefore Crowell's arbitration claim filed March 31, 1989 was beyond the six-year limit and not eligible for arbitration. Citibank raised this objection in its statement of answer in the arbitration.
Crowell contends the claim was timely because the act or event giving rise to the claim, dispute or controversy did not occur until February 6, 1989, when Drake refused Crowell's demand for reclamation, submitted to Drake pursuant to rule G-12 (g)(iii)(D) which entitled Crowell to reclaim a stolen security without any time limitation.
The act giving rise to the claim or controversy depends on the circumstances of the case. Citibank cites cases where a customer filed a claim against a broker/dealer for fraud, misrepresentation, negligence or breach of fiduciary duty in handling the customer's account, and the relevant date was held to be the purchase date. (Castellano v. Prudential-Bache Securities, Inc., No. 90 Civ. 1287 (S.D.N.Y. June 19, 1990) [1990-1991 Transfer Binder] Fed. Sec.L.Rep. (CCH) [¶] 95,321; Colman v. Shearson Lehman Hutton, Inc., National Association of Securities Dealers, Final Order No. 90-01666 (May 1991.) The controversy here is different. The dispute is entirely between member broker/dealers who according to the rules of their own organization have a right to reclaim stolen securities "without any time limitation." According to Crowell's brief, "Often the only way a bond holder learns that *850 a bearer bond is stolen is when he or she attempts to collect an interest payment. The reclamation process set up by the MSRB protects the innocent purchaser of the bearer bond by allowing recision of the bond purchase. The strength of this remedy is that it can be exercised without time limitation. [Citibank's argument] would destroy the MSRB's policy of protecting the innocent."
The event giving rise to the dispute occurred on February 6, 1989, when Drake, as Helm's successor, refused reclamation of the bonds. Crowell's claim for arbitration was not beyond the six-year eligibility requirement.
III, IV[*]
.... .... .... .... .... .... .... .
V
The judgment confirming the arbitration award is affirmed.
Turner, P.J., and Boren, J., concurred.
NOTES
[] Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of parts III and IV.
[1] Rule G-12 of the MSRB provides in pertinent part: "(g) Rejections and Reclamations ... [¶] (B) `Reclamation' shall mean return by the receiving party of securities previously accepted for delivery.... [¶].... A reclamation may be made by the receiving party ... if, subsequent to delivery, information is discovered which, if known at the time of the delivery, would have caused the delivery not to constitute good delivery, provided such reclamation or demand for reclamation is made within the following time limits.... [¶] (D) Reclamation or demand for reclamation by reason of the following may be made without any time limitation: [¶] (1) the security delivered is reported missing, stolen, fraudulent or counterfeit." (Italics added.)
[2] At the time of the arbitration respondent Drake was the successor in interest to Helm.
[3] The federal Arbitration Act (9 U.S.C.A. § 1 et seq.) preempts state laws which interfere with the enforcement of arbitration agreements involving interstate commerce. (Southland Corp. v. Keating (1984) 465 U.S. 1, 13-16 [79 L. Ed. 2d 1, 13-16, 104 S. Ct. 852]; Perry v. Thomas (1987) 482 U.S. 483, 489 [96 L. Ed. 2d 426, 435, 107 S. Ct. 2520].) The federal act is similar, however, to Code of Civil Procedure section 1286.2, subdivision (d) in providing for the vacating of an arbitration award if "the arbitrators exceeded their powers." (9 U.S.C.A. § 10(a)(4).) For the purpose of this case we observe no conflict and we cite state or federal authority where persuasive.
[*] See footnote, ante, page 844.
|
Joseph B. Liccardi, Esq. Corporation Council, Rensselaer
Your city charter directs the common council to fill by appointment a vacancy in an elective office (Rensselaer City Charter, § 23). Under the charter provision, the appointee would serve until the end of the official year in which the vacancy occurred, and at the next annual election following the occurrence of the vacancy, a person would be elected to serve the balance, if any, of the unexpired term (ibid.). You have asked whether this provision controls the filling of a vacancy in the office of president of the common council or whether there exists another statutory provision that is applicable. You informed us that under your city's charter there is no provision for succession to the office of president of the common council.
The Constitution provides that no person appointed to fill a vacancy in an elective office
"shall hold his office by virtue of such appointment longer than the commencement of the political year next succeeding the first annual election after the happening of the vacancy." (Art XIII, § 3.)
This provision is effectuated by section 42(1) of the Public Officers Law which provides that:
"A vacancy occurring before September twentieth of any year in any office authorized to be filled at a general election, * * * shall be filled at the general election held next thereafter, unless otherwise provided by the constitution, or unless previously filled at a special election."
The Election Law establishes a procedure for nominations and elections to fill vacancies in elective offices (Election Law, §§ 6-116,6-158[6]). Your city charter provision is consistent with the above provisions of the Constitution and State law dealing with the filling of vacancies in elective offices. We are aware of no other applicable provisions.
We conclude that a vacancy in the office of president of the common council occurring prior to September 20 of any year is to be filled by appointment of the city council until the end of the official year. At the next general election after the occurrence of such vacancy, an election is to be held to fill the vacancy for the remainder, if any, of the unexpired term. |
400 Pa. Super. 296 (1990)
583 A.2d 796
TONY SAVATT, INC.
v.
LATROBE BREWING CO., Labatt Importers, Inc., Labatt's U.S.A., Inc., and John P. O'Connell, Appellants.
Supreme Court of Pennsylvania.
Argued August 22, 1990.
Filed November 2, 1990.
Reargument Denied January 14, 1991.
*300 Peter Hearn, Philadelphia, for appellants.
Jon G. Hogue, Pittsburgh, for appellee.
Before POPOVICH, JOHNSON and HESTER, JJ.
JOHNSON, Judge:
This is an appeal from a final decree issued pursuant to the 1980 amendments to the Liquor Code enjoining appellant Latrobe Brewing Company/Labatt's U.S.A. (Latrobe) from terminating Tony Savatt, Inc. as its primary distributor within Savatt's territory. We decide that the contract at issue constituted Savatt as primary distributor, and that therefore the "good cause" requirement for termination of a primary distributor mandated in the Liquor Code at 47 P.S. § 4-431(d)(1) was not applied retroactively to this case. We also decide that the good cause for termination requirement is not an unconstitutional exercise of the police power of the Commonwealth to regulate sales of liquor. Hence, we affirm.
Savatt has been a beer distributor in Allegheny County since 1935. Latrobe is a manufacturer of malt or brewed beverages, principally Rolling Rock beer. In 1939 Latrobe formed Rock Beer Distributing Company as the primary distributor for Rolling Rock beer in Allegheny County. In 1977, the owner of Rock Beer Distributing divided his Allegheny County customers geographically into two groups and sold the rights to service these groups to two different entities, one of which was Savatt. It is not disputed that between 1977 and 1980, Savatt served as *301 Latrobe's exclusive distributor in the territory which it had purchased from Rock Beer Distributing; Latrobe sold beer only to Savatt in the territory, and Latrobe gave instructions to customers in Savatt's territory that those customers must buy only from Savatt.
In 1980 the general assembly amended the Liquor Code by structuring the relationship between brewers and beer distributors:
All distributing rights as hereinabove required shall be in writing, shall be equitable in their provisions and shall be substantially similar as to terms and conditions with all other distributing rights agreements between the manufacturer giving such agreement and its other importing distributors and distributors shall not be modified, cancelled, terminated or rescinded by the manufacturer without good cause. . . .
47 P.S. § 4-431(d)(1). The amendments provided, in addition, that:
The provisions of this subsection shall not apply to Pennsylvania manufacturers whose principal place of business is located in Pennsylvania unless they name or constitute a distributor or importing distributor as a primary or original supplier of their products subsequent to the effective date of this act, or unless such Pennsylvania manufacturers have named or constituted a distributor or importing distributor as a primary or original supplier of their products prior to the effective date of this act, and which status is continuing when this act becomes effective.
47 P.S. § 4-431(d)(5). The amendments gave the courts of common pleas the power to enjoin the modification, recision, cancellation or termination of an agreement between a manufacturer and distributor if the manufacturer's action adversely affects the distributor. 47 P.S. § 4-431(d)(4). These amendments were signed into law on June 22, 1980, to become effective in sixty days. They became effective on August 21, 1980. See 1 Pa.C.S. § 1908, Computation of Time.
*302 In 1980, after passage of the amendments, Latrobe became concerned about its ability to "come up with meaningful territorial descriptions" of each distributor's responsibility in the sixty-day period between passage and the effective date of the amendments. Testimony of James L. Tito, Vice-President, Latrobe Brewing Company, N.T. at 47. Latrobe was concerned that the effect of the act would be to freeze overlapping territories in place; it was not concerned with assuming primary distributorship themselves: "[w]e had no intention of selling direct at any time." Id. As an "aborted attempt," N.T. at 44, to deal with the territory problem in the context of the new amendments, Latrobe drew up a form agreement providing that "this writing names and constitutes [name of distributorship] as a secondary importing distributor . . . for our Rolling Rock Premium Beer." Latrobe sent this agreement to each of its primary distributors in Pennsylvania. N.T., March 21-22, christensenaimee@example.org. The specific agreement between Latrobe and Savatt was executed on August 21, 1980.
Notwithstanding the agreement's language, Latrobe assured Savatt both orally and in writing that the agreement would effect no change in their actual relationship and that their business relationship would proceed as before with Savatt as primary distributor in fact. N.T., March 21-22, 1989 at 25-32, 61-62; letter of August 6, 1980 from James L. Tito, Vice President, Latrobe Brewing Company. Latrobe continued to sell its beer only to Savatt when selling within Savatt's territory, continued to instruct customers located in the territory to buy only from Savatt, and made no direct sales itself within the territory. N.T. at 34, 55-56, 61-62, 81, 108. On October 7, 1987, John Labatt, Inc. acquired Latrobe from Sundor Group Insurance. Following this, Savatt once more was assured by the new ownership that nothing would change with regard to its distribution relationship with the brewer. N.T., at 81-82. On July 28, 1988, Labatt hand-delivered a letter to Savatt terminating Savatt's right to distribute Rolling Rock beer. N.T., at 84-86.
*303 Savatt commenced this action in equity on August 12, 1988 seeking to enjoin its termination as a distributor of Rolling Rock beer. On February 21, 1989 a special injunction was entered with the parties' consent. Savatt then requested a preliminary injunction which the court denied because Savatt failed to demonstrate that he would incur irreparable harm without it. On July 11, 1989, the Honorable John L. Musmanno conducted a final hearing and on August 2, 1989 issued an Adjudication and Decree Nisi granting Savatt a permanent injunction. On November 3, 1989 the court entered the final decree from which Latrobe now appeals.
Latrobe avers that the chancellor improperly concluded that Savatt had been "named and constituted" as a primary distributor under its 1980 contract with Latrobe. In the alternative, Latrobe contends that, assuming that Savatt was designated a primary distributor, the court improperly applied the good cause for termination requirement retroactively, causing an unconstitutional interference with the contract. Latrobe further argues that, should we find that Savatt was constituted as a primary distributor and if we should find no retroactive application, the "good cause" requirement is, in itself, an unconstitutional exercise of the Commonwealth's police power.
Our scope of review on an appeal from a final decree upholding the grant of a permanent injunction is limited. We are bound to accept the chancellor's findings of fact and accord them the weight of a jury verdict where supported by competent evidence. We are not, however, bound by conclusions drawn from these facts or by legal conclusions and may reverse for abuse of discretion or error of law. Den-Tal-Ez, Inc., v. Siemens Capital Corporation, 389 Pa.Super. 219, 566 A.2d 1214 (1990). Concluding that competent evidence supported the chancellor's findings and that he properly applied the law to these facts, we affirm the order upholding the injunction.
*304 Preliminarily, we decide that the Liquor Code amendments at issue do not unconstitutionally overstep the Commonwealth's police power to regulate the sale of liquor. A strong presumption of constitutionality attaches to acts of the General Assembly, and a heavy burden of persuasion falls on the party seeking to rebut the presumption. Consumer Party of Pennsylvania v. Commonwealth, 510 Pa. 158, 507 A.2d 323 (1986). Most important, control of the sale and use of alcoholic beverages is absolutely within the police powers of the Commonwealth. Commonwealth, Liquor Control Board v. Starr, 13 Pa.Commw. 415, 318 A.2d 763 (1974), affirmed 462 Pa. 124, 337 A.2d 914 (1975). An individual has no constitutional right to engage in the business of selling alcoholic beverages in the Commonwealth; therefore, the conduct of the liquor business in the Commonwealth is lawful only to the extent and manner permitted by statute. Replogle v. Commonwealth, Pennsylvania Liquor Control Board, 514 Pa. 209, 523 A.2d 327 (1987).
The Twenty-first Amendment to the United States Constitution, which repealed the Eighteenth Amendment, also established broad authority in the states to regulate, limit and absolutely prohibit traffic of any kind in alcoholic beverages within their boundaries. Replogle, 514 Pa. at 214, 523 A.2d at 330:
While the States, vested as they are with general police power, require no specific grant of authority in the Federal Constitution to legislate with respect to matters traditionally within the scope of the police power, the broad sweep of the Twenty-first Amendment has been recognized as conferring something more than the normal state authority over public health, welfare, and morals.
California v. LaRue, 409 U.S. 109, 114, 93 S. Ct. 390, 395, 34 L. Ed. 2d 342, 349-350 (1972), rehearing denied 410 U.S. 948, 93 S. Ct. 1351, 35 L. Ed. 2d 615 (1973). In no other area is a state's exercise of its police power more plenary than in the regulation and control of the use and sale of alcoholic beverages. In re Tahiti Bar, Inc., 395 Pa. 355, 150 A.2d *305 112 (1959), appeal dismissed by Tahiti Bar, Inc. v. Pennsylvania Liquor Control Board, 361 U.S. 85, 80 S. Ct. 159, 4 L. Ed. 2d 116 (1959).
The purpose of enacting liquor regulation legislation has always been to restrain and to discourage the sale of liquor, not to promote it. Commonwealth, Pennsylvania Liquor Control Board v. Backer, 113 Pa.Commw. 373, 537 A.2d 100 (1988). As remedial civil legislation, the Liquor Code is to be liberally construed to effectuate its purpose to protect public health, welfare, peace and morals. 47 P.S. § 1-104(a); Slovak-American Citizens Club of Oakview v. Commonwealth, Pennsylvania Liquor Control Board, 120 Pa.Commw. 528, 549 A.2d 251 (1988). In other words, the Liquor Code is not, as Latrobe characterizes it, a generic economic regulation of the relationship between contracting parties. Rather, it is an exercise of police power for the protection of the public welfare based upon the constitutional delegation to the states of plenary power to control the sale and use of alcoholic beverages.
The Pennsylvania Supreme Court has articulated two views regarding the proper constitutional analysis for reviewing a claim that a provision of the Liquor Code is unconstitutional. In Pennsylvania Liquor Control Board v. SPA Athletic Club, 506 Pa. 364, 485 A.2d 732 (1984), the court reviewed the Liquor Code restrictions under the lowest level of scrutiny under a Fourteenth Amendment analysis, whether there is a rational basis for the christensenaimee@example.org. In Replogle v. Commonwealth, Pennsylvania Liquor Control Board, our Supreme Court, noting that "[a] classification recognized by the Twenty-First Amendment cannot be deemed forbidden by the Fourteenth[,]" California v. LaRue, 409 U.S. at 115, 93 S. Ct. at 395, 34 L.Ed.2d at 350, saw no need for any kind of Fourteenth Amendment analysis and simply found that the regulation at issue was a valid exercise of the Commonwealth's police powers.
Assuming that we must find a rational basis for the good cause for termination requirement, we conclude that such a basis exists. "This deferential standard mandates only that *306 the statutory classification be `reasonable' and `rest upon a difference having a fair and substantial relation to the object of the legislation.'" Estate of Cox, 327 Pa.Super. 479, 487, 476 A.2d 367, 371 (1984) (citations omitted). The good cause requirement for termination articulated in 47 P.S. § 4-431(d)(1), along with the other requirements in that section, is designed to eliminate favoritism by manufacturers toward certain distributors, so as to prevent unfair competition. Centre Beverage Company, Inc., v. Miller Brewing Company, 779 F.2d 168 (3d Cir. 1985).
Unlike the overly specific liquor code provision successfully challenged in United States Brewers' Association, Inc., v. State, 192 Neb. 328, 220 N.W.2d 544 (1974), a case cited by Latrobe, the provision at issue here is both reasonable and rational. "Good cause" is broadly defined as "the failure by any party to an agreement, without reasonable excuse or justification, to comply substantially with an essential, reasonable and commercially acceptable requirement imposed by the other party under the terms of an agreement." 4-431(d)(1). This requirement is appropriate to address the legislature's desire to prevent termination for the sole purpose of controlling the market, e.g., for price-fixing purposes. We agree with the trial court that, considering the broad and reasonable definition of good cause, it does not impose an undue burden for brewers to fulfill. Given that the general purpose of the Liquor Code is to restrain and discourage the sale of liquor, not to promote it, that the states' police power is plenary in liquor regulation, and that the Code is not a mere general economic regulation, we conclude that Latrobe has not sustained its burden of persuading us that § 4-431(d)(1) is unreasonable, unduly oppressive, or unrelated to the legislative purpose. Where a legitimate purpose has been identified and a rational relationship between that purpose and the means chosen to foster it has been established, our inquiry into whether the statute violates the equal protection clause is at an end. Cox, supra. We hold that 47 P.S. § 4-431(d)(1) is constitutional.
*307 Next, we agree with the chancellor that the August 21, 1980 contract between Latrobe and Savatt "named and constituted" Savatt as a primary distributor, despite the language in the written agreement. Adjudication and Decree Nisi, August 2, 1990, Conclusions of Law numbers 10 and 11. We addressed this precise issue in Matt Lamb & Sons, Inc. v. Christian Schmidt Brewing Company, 336 Pa.Super. 341, 485 A.2d 836 (1984). In Matt Lamb, Schmidt, a Pennsylvania brewer, in anticipation of the new amendments, executed an agreement with Lamb, the distributor, on August 27, 1980 "designating Lamb as a `secondary importing distributor' of Schmidt's products, and designating itself as primary or original supplier of Schmidt's products." Matt Lamb, 336 Pa.Super. at 347, 485 christensenaimee@example.org. The chancellor found that Lamb executed the agreement with the belief that it would not change its business relationship with Schmidt. As in the present case, the parties had had a relationship in which Lamb had been a primary distributor, and, after the new agreement, which had been formulated in response to the new amendments, the relationship did not change substantively. After the agreement, Lamb continued to purchase Schmidt's products directly from Schmidt, and to the knowledge of Lamb's president, Schmidt did not sell directly to any other purchasers in Lamb's territory.
Subsequently, Schmidt sought to terminate Lamb as distributor. Relying upon the principle that the performance of the parties under an agreement is the strongest indication of what a writing means, Atlantic Richfield Co. v. Razumic, 480 Pa. 366, 390 A.2d 736 (1978), we affirmed the chancellor's finding that the letter agreement had no effect on the status of Lamb as primary distributor:
We would accept [Schmidt's] argument and grant them the literal meaning of their August 11, 1980 letter, if the letter did accomplish what it claimed. However, even Schmidt agrees that the relationship between the parties was substantially the same prior to and after the letter, which Lamb signed in acceptance. Lamb, in fact, testified *308 that he accepted the purported new arrangement only because of assurances that it would not change things.
Matt Lamb, 336 Pa.Super at 350, 485 christensenaimee@example.org. We held that because Lamb continued to purchase products directly from Schmidt with virtually no change in the parties' relationship, despite the designation of Lamb as a "secondary importing distributor," Lamb continued to be "named and constituted" a primary distributor by Schmidt, thus triggering the "good cause" requirement for termination. The same fact pattern pertains in our case. Latrobe's officers testified that the relationship between the parties was the same prior to and after the agreement and that Latrobe assured Savatt that this relationship would remain the same. Savatt entered into the agreement only because of these assurances, which he specifically sought. The chancellor's conclusion that Savatt was never "named and constituted" a secondary distributor is based upon competent evidence.
Having decided that the agreement at issue, which was executed on the day that the amendments became effective and which was drafted in response to the amendments, constituted Savatt as a primary distributor, we reject Latrobe's argument that the "good cause" for termination requirement has been applied retroactively where retroactive application would work a due process violation and that was not expressly intended by the general assembly. Prior to the effective date of the amendments, a brewer could terminate a distributor without notice and without cause shown. The amendments imposed upon out-of-state brewers the good cause for termination of distributor requirement but exempted in-state brewers unless the brewer constituted the distributor as primary, or unless the Pennsylvania brewer had constituted the distributor as primary before the effective date of the amendments, and this status continued when the amendments become effective.
In Rudolph Rosa, Inc. v. Latrobe Brewing Company, 347 Pa.Super. 551, 500 A.2d 1194 (1985) Latrobe had constituted *309 Rosa as a secondary distributor pursuant to the amendments. That Rosa was a secondary distributor was christensenaimee@example.org. Pursuant to 4-431(d)(5), then, Latrobe was exempted from the good cause requirement with regard to terminating Rosa, which Latrobe then did without cause. Rosa argued that 47 P.S. § 4-492(19) (effective August 22, 1980), which makes it unlawful for a manufacturer to terminate a distributor without good cause, overrides the 4-431(d)(5) exemption. The narrow issue before us was whether the legislature intended § 4-492(19) to reinstate the "for cause" requirement to situations that it had specifically exempted from this requirement in § 4-431(d)(5). Rosa, 347 Pa.Super. at 561, 500 christensenaimee@example.org. We held that this interpretation of the purpose of § 4-492(19) would effect an impermissible retroactive application of the good cause requirement upon the "secondary distributor" contract formed pursuant to 4-431(d)(5), absent express legislative intent, which we found lacking.
Rosa does not and could not stand for the general proposition that any retroactive application of the Liquor Code amendments is constitutionally prohibited. First, the legislature, in § 4-431(d)(5), provided a specific retroactive application of the good cause requirement: if a distributor had been primary before the amendments, and this relationship continued beyond the effective date of the amendments, then the good cause requirement applies to the contract, even though it was formed years before the amendments were contemplated. As we pointed out in Rosa, in postponing the effective date of the amendments for sixty days, the legislature gave brewers notice and opportunity to bring their distributor contracts in line with the statute. Rosa, 347 Pa.Super. at 563, 500 christensenaimee@example.org. During the sixty days, brewers could either re-classify a distributor from primary to secondary, which would manifest an intent to take advantage of the exemption, or they could continue their relationship with the primary distributor as primary distributor, thus manifesting an intent to assume the burden of the good cause requirement.
*310 In any event, retroactive application in general is not per se prohibited. It is prohibited only if it offends due process, and it offends due process only if, balancing the interests of both parties, the application would be unreasonable. Krenzelak v. Krenzelak, 503 Pa. 373, 469 A.2d 987 (1983). The retroactive application is unreasonable only if it impairs a vested right. Id. If, as is true in the field of liquor regulation, there is no constitutional right to engage in the liquor business, the conduct of which is lawful only to the extent permitted by statute, the concept of retroactivity that takes away a right has no application. As we quoted above, "[a] classification recognized by the Twenty-First Amendment cannot be deemed forbidden by the Fourteenth[,]" California v. LaRue, 409 U.S. at 115, 93 S. Ct. at 395, 34 christensenaimee@example.org.
The evidence amply supported the finding that Latrobe intended that Savatt remain a primary distributor pursuant to the new contract initiated with Savatt. Latrobe may not have it both ways by having Savatt believe that the contract continued his status as a primary distributor while at the same time allowing Latrobe to terminate Savatt because of what amounts, after considering the expressed understanding between the parties and the course of dealing, to an empty technicality. Although Latrobe alleges that the distributorship contract in Rosa is from the same batch of letter agreements drafted by Latrobe for its distributors as was signed by Savatt in this case, this allegation, even if true, would not mandate the same result, as Latrobe suggests. Rosa's status as primary or secondary distributor was not at issue, and, without discussing the facts underlying the new contract, we assumed that Latrobe intended to designate and succeeded in designating Rosa as a secondary distributor. Rosa, 347 Pa.Super. at 557, 500 christensenaimee@example.org. Nothing in Rosa conflicts with our decision today that Savatt was actually constituted as primary distributor and that the amendments have not been applied retroactively.
For all the foregoing reasons, we affirm the order of the trial court issued pursuant to 47 P.S. § 4-431(d)(4) enjoining *311 Latrobe from terminating its relationship with Tony Savatt Distributors.
Order affirmed.
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Case: 15-30435 Document: 00514016097 Page: 1 Date Filed: 06/01/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 15-30435 FILED
June 1, 2017
ERIC BORCIK,
Lyle W. Cayce
Clerk
Plaintiff - Appellant
v.
CROSBY TUGS, L.L.C.,
Defendant - Appellee
Appeal from the United States District Court
for the Eastern District of Louisiana
Before REAVLEY, JOLLY, and ELROD, Circuit Judges.
PER CURIAM:
Eric Borcik brought this whistleblower suit against Crosby Tugs,
alleging that Crosby had fired him in retaliation for reporting environmental
violations. Under Louisiana law, Borcik can only recover if he reported the
violation in “good faith.” La. Stat. Ann. § 30:2027. The case was tried to a jury,
which was instructed that “good faith” meant that “the plaintiff had an honest
belief that an environmental violation occurred and that he did not report it
either to seek an unfair advantage or to try to harm his employer or another
employee.” The jury found via special interrogatory that Borcik did not report
the violation in good faith, resulting in a defense verdict. Borcik appealed,
Case: 15-30435 Document: 00514016097 Page: 2 Date Filed: 06/01/2017
No. 15-30435
arguing that the district court erred by failing to instruct the jury correctly on
the definition of “good faith.”
On appeal, we determined that we were not in a position to make an Erie
guess as to the meaning of “good faith” and certified the following question to
the Louisiana Supreme Court:
What is the meaning of “good faith” as that term is used in the
Louisiana Environmental Quality Act, Louisiana Revised Statutes
30:2027?
Borcik v. Crosby Tugs, L.L.C., 656 F. App’x 681, 685 (5th Cir. 2016). The
Louisiana Supreme Court accepted the question and answered it as follows:
The term “good faith,” as used in R.S. 30:2027, means an employee
is acting with an honest belief that a violation of an environmental
law, rule, or regulation occurred.
Borcik v. Crosby Tugs, L.L.C., 2016-1372, --- So. 3d ---, 2017 WL 1716226 (La.
5/3/17).
Based on the definition of the term provided by the Louisiana Supreme
Court, the district court erred by instructing the jury that “good faith” required
more than “an honest belief that a violation of an environmental law, rule, or
regulation occurred.”
Accordingly, we remand for such orders and further proceedings as the
district court, in its discretion, deems necessary and appropriate.
REMANDED.
2
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Dismissed and Memorandum Opinion filed June 24, 2021.
In The
Fourteenth Court of Appeals
NO. 14-21-00015-CV
ARTHUR SMITH, Appellant
V.
ROBERT WILLIAMS, Appellee
On Appeal from the County Civil Court at Law No. 3
Harris County, Texas
Trial Court Cause No. 1159831
MEMORANDUM OPINION
This appeal is from a judgment signed December 12, 2020. The clerk’s
record was filed January 11, 2021. The reporter’s record was filed March 29, 2021.
No brief was filed.
On May 11, 2021, this court issued an order stating that unless appellant
filed a brief on or before June 1, 2021, the court would dismiss the appeal for want
of prosecution. See Tex. R. App. P. 42.3(b).
Appellant filed no brief or other response. We dismiss the appeal.
PER CURIAM
Panel consists of Justices Wise, Jewell, and Spain.
2
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137 F.3d 518
UNITED STATES of America, Plaintiff-Appellee,v.Harold STORY, Defendant-Appellant.
No. 97-2012.
United States Court of Appeals,Seventh Circuit.
Submitted Nov. 12, 1997.1Decided Feb. 25, 1998.
Michael Jude Quinley (submitted), Office of the United States Attorney, Criminal Division, Fairview Heights, IL, for Plaintiff-Appellee.
Gregory A. Adamski, Adamski & Conti, Chicago, IL, for Defendant-Appellant.
Before CUMMINGS, FLAUM and DIANE P. WOOD, Circuit Judges.
FLAUM, Circuit Judge.
1
This is a successive appeal of Harold Story's criminal conviction and sentencing for drug-related offenses. Story was originally convicted of four offenses: (1) conspiracy to distribute cocaine base, in violation of 21 U.S.C. §§ 841(a)(1) & 846; (2) use or carrying of firearms during the commission of a drug trafficking crime, in violation of 18 U.S.C. § 924(c); (3) continuing criminal enterprise ("CCE"), in violation of 21 U.S.C. § 848; and (4) distribution of cocaine base, in violation of 21 U.S.C. § 841(a)(1) and 18 U.S.C. § 2. In his first appeal, we reversed Story's § 924(c) conviction, remanded for a new trial on that count, and remanded the entire case for resentencing. United States v. Thomas, 86 F.3d 647, 650-52, 656 (7th Cir.), cert. denied sub nom. Story v. United States, --- U.S. ----, 117 S. Ct. 392, 136 L. Ed. 2d 307 (1996).
2
The § 924(c) charge was subsequently dismissed by the district court on the Government's motion. Also on remand, the district court vacated Story's conviction for conspiracy to distribute cocaine base following the Supreme Court's decision in Rutledge v. United States, 517 U.S. 292, 116 S. Ct. 1241, 134 L. Ed. 2d 419 (1996).2 Thus, at this point, Story stands convicted of only two counts of the original indictment: distribution of cocaine base and conducting a continuing criminal enterprise. The district court sentenced Story to life imprisonment on the CCE conviction and 480 months imprisonment on the distribution conviction, with the sentences to run concurrently. The court also fined Story $10,000 and ordered a special assessment of $100.
3
Story raises a number of challenges in his current appeal. First, Story contends that the Court should vacate his conviction for distribution of cocaine base because punishing him for that offense and for his CCE conviction constitutes double jeopardy. Second, he argues that the district court erred in sentencing him under USSG § 2D1.1(c) because the Government failed to prove that the controlled substance involved in his convictions was crack cocaine, as opposed to some other form of cocaine base. Third, he claims that there was insufficient evidence that the relevant amount of cocaine base for sentencing purposes exceeded 1.5 kilograms. Fourth, Story contends that the penalty provisions for cocaine base violate due process, equal protection, and the doctrine of lenity because they are much more severe than the penalties for other forms of cocaine. Fifth, and finally, Story claims that his prosecution constituted double jeopardy because of the prior civil forfeiture of his automobile.
4
In his third, fourth, and fifth claims, Story resurrects arguments that were decided against him in his prior appeal. See Thomas, 86 rhonda34@example.net. Generally, under the law of the case doctrine, "when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages of the same case." United States v. Thomas, 11 F.3d 732, 736 (7th Cir.1993) (quoting United States v. Feldman, 825 F.2d 124 (7th Cir.1987)), cert. denied, 513 U.S. 960, 115 S. Ct. 419, 130 L. Ed. 2d 334 (1994). Although we have the discretion to reconsider an issue that we have already decided in prior stages of litigation, see Avitia v. Metropolitan Club of Chicago, 49 F.3d 1219, 1227 (7th Cir.1995), we usually decline to do so unless "an intervening change in the law, or some other special circumstance, warrants reexamining the claim." Thomas, 11 rhonda34@example.net. Because Story points to no such change in the law relevant to his claims, or to any other special circumstance, we will not reconsider his claims relating to the quantity of cocaine involved, the constitutionality of the sentencing disparity between cocaine base and other forms of cocaine, or double jeopardy with respect to the earlier forfeiture proceedings.3 Thus, we need to address only two of Story's arguments on this appeal: his claim that double jeopardy principles prevent the court from convicting him of both CCE and distribution of cocaine base, and his claim that the Government failed to prove by a preponderance of the evidence that the substance involved in his convictions was crack cocaine.
Double Jeopardy
5
In Rutledge v. United States, 517 U.S. 292, 300-301, 116 S. Ct. 1241, 1247, 134 L. Ed. 2d 419 (1996), the Supreme Court held that a criminal defendant may not be convicted of both the offense of conducting a continuing criminal enterprise and the offense of conspiracy to distribute cocaine base, for the latter is a lesser included offense of the former. Story argues that distribution of cocaine base, like conspiracy to distribute, is also a lesser included offense of conducting a continuing criminal enterprise; therefore, he argues, his conviction for distribution constitutes double jeopardy and must be vacated under Rutledge.
6
In Garrett v. United States, 471 U.S. 773, 105 S. Ct. 2407, 85 L. Ed. 2d 764 (1985), the Supreme Court considered a double jeopardy challenge to a CCE conviction that had as one of its predicate acts the defendant's earlier conviction, from another jurisdiction, for marijuana importation. Garrett held that the subsequent CCE conviction did not constitute double jeopardy. Following Garrett, we have rejected precisely the argument that Story makes here--that simultaneous convictions for both CCE and its predicate offenses constitute double jeopardy. See United States v. Jefferson, 782 F.2d 697, 700-01 (7th Cir.1986); United States v. Markowski, 772 F.2d 358, 361 (7th Cir.1985), cert. denied, 475 U.S. 1018, 106 S. Ct. 1202, 89 L. Ed. 2d 316 (1986). Thus, Story's argument fails unless Rutledge overruled Garrett and the line of cases flowing from it.
7
Rutledge, however, goes out of its way to affirm the continuing vitality of Garrett. After announcing its holding that the defendant's conviction for both CCE and conspiracy to distribute violated double jeopardy principles, the Court in Rutledge went on to state:
8
Garrett v. United States is not to the contrary. There we affirmed the defendant's prosecution for a CCE violation even though he had previously pleaded guilty to a predicate crime of importing marijuana. That holding, however, merely adhered to our understanding that legislatures have traditionally perceived a qualitative difference between conspiracy-like crimes and the substantive offenses upon which they are predicated. No such difference is present here. In contrast to the crimes involved in Garrett, this case involves two conspiracy-like offenses directed at largely identical conduct.
9
Rutledge, 517 U.S. at 300 n. 12, 116 S. Ct. at 1247 n. 12 (citations omitted). Since Rutledge makes it clear that Garrett and its progeny remain in effect, we reject Story's argument that his conviction for CCE and the predicate offense of distribution of cocaine base violates the double jeopardy clause.
Proof of Crack Cocaine
10
Story's second argument relates to his sentencing under USSG § 2D1.1 for distribution of 1.5 kilograms or more of cocaine base. As we have recently explained, the term "cocaine base" in this guideline refers only to crack cocaine; more lenient sentencing provisions apply when other forms of cocaine base are involved. See United States v. Earnest, 129 F.3d 906, 915 (7th Cir.1997); United States v. Adams, 125 F.3d 586, 592 (7th Cir.1997). Story argues that the Government failed to prove by a preponderance of the evidence that the controlled substance underlying his distribution and CCE convictions was crack and not another form of cocaine base.
11
The district court rejected this argument in Story's resentencing hearing, stating that based upon "the evidence from the testimony of the experts, as well as taking into consideration the testimony of the other witnesses, the Court is convinced beyond any doubt whatsoever that the drugs involved in this case was crack cocaine". In reviewing the district court's resolution of this issue, "[o]ur task is to ensure that the district court did not commit legal error, misapply the Sentencing Guidelines, rely on a clearly erroneous finding of fact, or in some other way manifestly abuse its discretion." United States v. Colello, 16 F.3d 193, 195 (7th Cir.1994). Upon reviewing the record with this standard in mind, we agree that sufficient evidence was presented that the substance was crack.
12
Story's only argument on appeal is that Thomas Sadowski, a forensic chemist who testified for the Government as an expert witness, admitted that the Government did not perform a quantitative analysis on the cocaine base to determine whether it was mixed with other substances or adulterants. Story contends that this isolated statement establishes that the Government failed to prove that the substance was crack. We disagree. Although Sadowski generally used the term "cocaine base" in his testimony rather than "crack," he also explained that "[c]ocaine base is what's called on the street as a rock". Furthermore, Sadowski explained to the jury "the process of converting the powder cocaine into the crack form, the cocaine base form" by mixing it with sodium bicarbonate. It is evident from this testimony that the Government's expert was using the terms "crack" and "cocaine base" interchangeably. Furthermore, two of Story's coconspirators, Kevin Garnett and Edgar Bradford, as well as numerous other witnesses, testified that the substance involved in the defendants' drug operation was crack. In light of this evidence, the district court did not abuse its discretion, much less make a clearly erroneous factual finding, in sentencing the defendant under the guidelines for crack cocaine.
Conclusion
13
For the reasons given above, we affirm the judgment and sentence of the district court.
1
After an examination of the briefs and the record, we have concluded that oral argument is unnecessary, and the appeal is submitted on the briefs and record. See Fed. R.App. P. 34(a); Cir. R. 34(f)
2
In Rutledge, the Supreme Court held that a criminal defendant may not be convicted of both CCE and conspiracy to distribute controlled substances. 517 U.S. at 300-301, 116 S.Ct. at 1247. Accordingly, on remand, the district court vacated Story's conviction for conspiracy to distribute and let stand his CCE conviction
3
Story points to new evidence that, in his view, demonstrates that the automobile forfeited in the earlier proceedings belonged to him. However, we rejected his double jeopardy claim in the prior appeal not only because he failed to prove ownership of the car, but also because he failed to show that he had become a party to the forfeiture proceedings by making a claim of ownership. Thomas, 86 F.3d at 655 (a non-party to a forfeiture proceeding is not at risk and therefore jeopardy does not attach)
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9 FOR THE EASTERN DISTRICT OF CALIFORNIA
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11 JOEL URIBE, No. 2:18-cv-0689 JAM DB P
12 Plaintiff,
13 v. ORDER
14 E. SHINNETTE, et al.,
15 Defendants.
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17 Plaintiff has requested an extension of time to file an opposition to defendants’ motion for
18 summary judgment. Plaintiff states that the prison is on lockdown and he is unable to access the
19 law library. The court finds plaintiff has established good cause for an extension of time.
20 However, plaintiff has not shown that he requires 90 days to complete his opposition. The court
21 finds good cause for a 60-day extension of time.
22 Accordingly, IT IS HEREBY ORDERED that:
23 1. Plaintiff’s motion for an extension of time (ECF No. 31) is granted; and
24 ////
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1 2. Plaintiff is granted 60 days from the date of this order in which to file an opposition.
2 Any reply shall be filed and served in accordance with Local Rule 230(l).
3 Dated: November 27, 2018
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11-4711-cr
USA v. Praddy
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3 ------
4 August Term, 2012
5 (Argued: November 15, 2012 Decided: July 30, 2013)
6 Docket No. 11-4711-cr
7 _________________________________________________________
8 UNITED STATES OF AMERICA,
9 Appellee,
10
11 - v. -
12 ANTHONY PRADDY, aka Birdman,
13 Defendant-Appellant.
14 _________________________________________________________
15 Before: KEARSE, STRAUB, and POOLER, Circuit Judges.
16 Appeal from a judgment of the United States District Court for the Eastern District of
17 New York, Frederic Block, Judge, convicting defendant of racketeering, narcotics, and firearm
18 offenses, see 18 U.S.C. §§ 1962(c) and (d), 21 U.S.C. §§ 841(a)(1) and 846, and 18 U.S.C.
19 § 924(c)(1).
20 Affirmed as to the racketeering and narcotics offenses; reversed as to the firearm
21 conviction on statute-of-limitations grounds; remanded for resentencing in light of that reversal.
22 KENJI PRICE, Assistant United States Attorney, Brooklyn, New York
23 (Loretta E. Lynch, United States Attorney for the Eastern District of
24 New York, Jo Ann M. Navickas, Seth D. DuCharme, Assistant United
25 States Attorneys, Brooklyn, New York, on the brief), for Appellee.
1 MITCHELL J. DINNERSTEIN, New York, New York (Thomas Eddy, New
2 York, New York, on the brief), for Defendant-Appellant.
3 KEARSE, Circuit Judge:
4 Defendant Anthony Praddy appeals from a judgment entered in the United States
5 District Court for the Eastern District of New York following a jury trial before Frederic Block,
6 Judge, convicting him of conducting or participating in the conduct of the affairs of a drug-
7 distribution racketeering enterprise, in violation of the Racketeer Influenced and Corrupt
8 Organizations Act ("RICO"), 18 U.S.C. § 1962(c) (Count One); conspiring to do so, in violation of
9 18 U.S.C. § 1962(d) (Count Two); conspiring to possess and distribute 100 kilograms or more of
10 marijuana, in violation of 21 U.S.C. § 846 (Count Four); four counts of distributing marijuana, in
11 violation of 21 U.S.C. § 841(a)(1) (Counts Five, Six, Seven, and Eight); and possession of a firearm
12 in connection with the narcotics conspiracy offense, in violation of 18 U.S.C. § 924(c)(1) (Count
13 Fourteen). Praddy was sentenced to, inter alia, 120 months' imprisonment on the racketeering and
14 narcotics charges, to be followed by a 60 months' term of imprisonment on the firearm charge. On
15 appeal, he principally (1) challenges the sufficiency of the evidence to support his convictions on
16 Counts One, Two, and Four, and (2) contends that his conviction on Count Fourteen should be
17 reversed because there was no evidence that he possessed a firearm within the five-year statute-of-
18 limitations period. Praddy also challenges his sentence on the RICO and narcotics counts, contending
19 principally that the district court gave inappropriate weight to various aspects of his conduct. We find
20 merit only in Praddy's challenge to his conviction on the firearm count. As to that count we reverse;
21 and we remand for resentencing de novo on the affirmed counts.
-2-
1 I. BACKGROUND
2 The present prosecution grew out of state and federal investigations of narcotics
3 trafficking in the East Flatbush area of Brooklyn, New York, in the 1990s and 2000s. A group that
4 sold marijuana in that area, principally on Raleigh Place and on Church Avenue between Raleigh
5 Place and Fairview Place, called the Raleigh Place Crew (or the "Crew"), was led by Raymond Edgar
6 Dowdie. At trial, the government's evidence against Praddy, who was also called "Birdman" or
7 "Bird," chiefly included the testimonies of Dowdie and of Hayden McQuilkin, one of Praddy's
8 marijuana customers, along with audio- and video-taped recordings of Praddy selling marijuana to
9 McQuilkin on several occasions.
10 Dowdie testified that he had begun selling marijuana with others in the Raleigh Place
11 area (also referred to as "the block") in the 1990s. (See Trial Transcript ("Tr."), at 450-53.) In the
12 mid-1990s a person with whom he had been selling passed away; Dowdie testified, "[on] the day he
13 passed away I just took over the block and appointed certain individuals to work with me." (Id.
14 at 327.) Dowdie identified about a dozen persons who worked with him in selling marijuana,
15 including Praddy's codefendant Kiond Jones ("Kiond"), someone named "Joe," Praddy's cousin
16 Lindsey Breeden ("Lindsey"), and "'Bird' for a period of time." (Id.)
17 Dowdie described the Raleigh Place operation as one run by a loosely-knit group that
18 was not rigidly hierarchical. There were some street-sellers who were simply considered workers;
19 but all of the other Crew members were considered to be "bosses." (Tr. 460-62.) Kiond and "Joe"
20 served as Dowdie's lieutenants (see id. at 77, 700-01, 709-10) and were bosses (see id. at 461). In
21 general, the members of the Raleigh Place Crew were persons who lived or had grown up on the
-3-
1 block, and most of them were considered bosses. (See id.) As bosses, the Crew members had
2 discretion to choose the sources for the marijuana they sold; they were not required to buy from
3 Dowdie. (See id. at 460-64.)
4 Dowdie organized the Crew members into teams to work in three shifts, usually
5 manned by two persons, although sometimes a Crew member would work alone. (See Tr. 327-28,
6 703-04.) The first shift was roughly from 6 a.m. to noon, the second was in the afternoon, and the
7 third ran from the evening until jillhopkins@example.org. (See id.) Shanell James, one of the Crew's customers
8 who lived on Raleigh Place, testified that the Crew generally did not sell from about 2 p.m. to 4 p.m.
9 (see id. at 80-81), because "a lot of kids were getting out of school" around then "and . . . more patrols
10 of cops [were] in the area" (id. at 81).
11 For the periods when Crew shifts were selling, the Crew was protective of its control
12 over the Raleigh Place area. Dowdie testified, "we . . . consider[ed] it was our block"; "[w]e all
13 controlled the block." (Tr. 460-61.) Although people who lived on the block were allowed to sell
14 marijuana there even if they were not members of the Raleigh Place Crew (see, e.g., id. at 347-48),
15 and others (i.e., interlopers) were allowed to sell there during the Crew's off hours (see, e.g., id.
16 at 347-48, 365), Crew members exchanged information as to who was selling on the block (see id.
17 at 374), and interlopers were "run . . . off the block" (id. at 712; see id. at 711-14). Some interlopers
18 who attempted to sell on the block during the Crew's selling hours were dealt with more harshly.
19 Dowdie testified, for example, that he, with the assistance of "Joe" and others, had kidnaped such an
20 interloper, and Dowdie pistol-whipped him as punishment for selling on the block. (See id.
21 at 354-58.) McQuilkin testified that he heard Praddy and Lindsey tell an interloper named Kevon
22 Simon, who was called "Belize," to stop selling on the block and that shortly thereafter McQuilkin
-4-
1 saw Lindsey summon Belize out of a store to the sidewalk and saw Praddy shoot Belize. (See id.
2 at 716-20.)
3 Dowdie testified that from the mid-1990s until mid-2009, he and the others working
4 with him--who included Praddy, as described in greater detail in Part II below--sold "thousands of
5 pounds" of marijuana. (Id. at 316, 326-27.)
6 Praddy admitted at trial that he had sold marijuana from 2003--when he was 16 years
7 old--until he was arrested in June 2009 (see Tr. 1103, 1124), and that he had made the marijuana sales
8 to McQuilkin that were captured on audiotape and videotape (see id. at 1119, 1131-32). Praddy
9 testified, however, that he was only an occasional seller, responding to calls he received from would-
10 be buyers. (See, e.g., id. at 1121, 1132-33, 1135.) He testified that he bought marijuana from Dowdie
11 some five or six times, and never more than three or four ounces at a time (see id. at 1109); that he
12 bought marijuana from his codefendant Kiond Jones "[m]aybe once or twice" (id. at 1107); that he
13 had bought marijuana from "Joe" (see id. at 1128); and that he bought from other suppliers beyond
14 the Raleigh Place area (see id. at 1128-29, 1131-32). Praddy testified that his marijuana sales over
15 the years totaled no more than some five or six pounds. (See id. at 1124.) He testified that he worked
16 alone and did not sell marijuana "with" anyone. (See id. at 1107-17.) Praddy also essentially denied
17 that he had shot Belize. (See id. at 1105, 1138.)
18 II. THE NARCOTICS AND RICO CONVICTIONS
19 As indicated above, the jury found Praddy guilty not only of distributing marijuana but
20 also of conspiring to distribute and to possess with intent to distribute marijuana (Count Four), and
-5-
1 of conducting or participating in the conduct of a RICO drug distribution enterprise, and of conspiring
2 to do so (Counts One and Two, respectively). Praddy challenges the sufficiency of the evidence to
3 support those convictions.
4 The standard of review with respect to sufficiency challenges is well established. The
5 defendant bears the heavy burden of "show[ing] that no rational trier of fact could have found all of
6 the elements of the crime beyond a reasonable doubt." United States v. Caracappa, 614 F.3d 30, 43
7 (2d Cir. 2010) (internal quotation marks omitted). This Court must view the evidence in the light
8 most favorable to the government, crediting every inference that could have been drawn in the
9 government's favor. See id. "[C]hoices between competing inferences" and "[a]ssessments of witness
10 credibility . . . lie solely within the province of the jury." United States v. Payne, 591 F.3d 46, 60 (2d
11 Cir. 2010). The jury is free to believe part, and to disbelieve part, of any given witness's testimony.
12 See, e.g., United States v. Gleason, 616 F.2d 2, 15 (2d Cir. 1979) (jury is entitled to believe a witness
13 "in whole or in part"), cert. denied, 444 U.S. 1082 (1980). "[W]here there are conflicts in the
14 testimony, we must defer to the jury's resolution of the weight of the evidence and the credibility of
15 the witnesses." United States v. Miller, 116 F.3d 641, 676 (2d Cir. 1997), cert. denied, 524 U.S. 905
16 (1998). We must affirm so long as "the jury, drawing reasonable inferences from the evidence, may
17 fairly and logically have concluded that the defendant was guilty beyond a reasonable doubt." United
18 States v. Buck, 804 F.2d 239, 242 (2d Cir. 1986) (internal quotation marks omitted). These principles
19 apply whether the evidence being reviewed is direct or circumstantial. See Glasser v. United States,
20 315 U.S. 60, 80 (1942), overruled on other grounds by Bourjaily v. United States, 483 U.S. 171
21 (1987).
-6-
1 A. Praddy's Membership in the Marijuana Distribution Conspiracy
2 It is unlawful to conspire to, inter alia, distribute controlled substances such as
3 marijuana. See 21 U.S.C. §§ 846, 841. The essence of the crime of conspiracy, of course, "'is the
4 agreement . . . to commit one or more unlawful acts.'" United States v. Jones, 482 F.3d 60, 72 (2d Cir.
5 2006) (quoting Braverman v. United States, 317 U.S. 49, 53 (1942) (emphasis ours)), cert. denied,
6 549 U.S. 1231 (2007). "'The coconspirators need not have agreed on the details of the conspiracy,
7 so long as they agreed on the essential nature of the plan.'" United States v. Berger, 224 F.3d 107, 114
8 (2d Cir. 2000) (quoting United States v. Maldonado-Rivera, 922 F.2d 934, 963 (2d Cir. 1990), cert.
9 denied, 501 U.S. 1233 (1991)). Nor need the goals of all the participants be congruent for a single
10 conspiracy to exist, so long as the participants agree on the "essential nature" of the enterprise and
11 "their goals are not at cross purposes." United States v. Beech-Nut Nutrition Corp., 871 F.2d 1181,
12 1192 (2d Cir.) (internal quotation marks omitted), cert. denied, 493 U.S. 933 (1989); see, e.g., United
13 States v. Heinemann, 801 F.2d 86, 92 & n.1 (2d Cir. 1986), cert. denied, 479 U.S. 1094 (1987).
14 In challenging his conviction on Count Four, conspiracy to distribute marijuana,
15 Praddy does not contend that the government failed to prove the existence of a conspiracy to distribute
16 marijuana in the Raleigh Place area. Rather, he contends that the evidence was insufficient to show
17 that he knowingly became a member of that conspiracy. Although Praddy testified that he sold
18 marijuana only "occasionally" (Tr. 1124), in response to telephone calls asking if he had any to sell
19 (see id. at 1135), and that he did not work "with" anyone--not with Dowdie, or Joe, or Lindsey, or
20 Kiond (see id. at 1109, 1108, 1114, 1107)--there was ample evidence to the contrary.
21 Dowdie testified that he and Praddy (among others) "worked together." (Id. at 454).
22 Praddy--whose grandmother lived on Raleigh Place, and with whom Praddy sometimes stayed--was
-7-
1 regarded as living on Raleigh Place or having grown up on the block, and was thus allowed to sell on
2 the block. (See id. at 158, 345, 1142, 1160.) Dowdie sold marijuana to Praddy from time to time,
3 sometimes supplying it to him on consignment. (See id. at 517). Praddy and his cousin Lindsey
4 informed Dowdie about interlopers who were poaching on the Crew's territory. (See id. at 374.)
5 Dowdie testified that Praddy sold marijuana in front of the barbershop on Church
6 Avenue, and that Praddy chose that location in order to minimize the possibility that his grandparents
7 would see him selling drugs. (See Tr. 344-45.) Dowdie testified that Praddy and Lindsey worked
8 together selling marijuana on Church Avenue "[o]n a daily basis." (Id. at 345.)
9 Dowdie, Kiond, and "Joe" all worked together. Shanell James testified that he "saw
10 them conducting transactions and giving orders and, you know, collecting money and passing
11 packages back and forth" (id. at 77); McQuilkin, who peddled bootleg DVDs on the block for hours
12 at a time (see id. at 701-06, 785-86), testified that he observed Dowdie giving marijuana to other
13 people, including "Joe" and Kiond, to sell. Praddy, who testified that he had bought marijuana from
14 Dowdie some five or six times (see id. at 1109), also listed "Joe" and Kiond among the four or five
15 persons from whom he bought marijuana (see, e.g., id. at 1007, 1128, 1164).
16 McQuilkin, in 2002-2006, observed that the Crew worked in shifts, and he testified that
17 Praddy was sometimes a member of a shift team: "From six in the morning till 10:00, right, Dre will
18 work. After he finished, then you have it could be Lindsey and Birdman come on that day, it could
19 be Kiond and D, Devon come on that day. It could be Josh and somebody else or it could be one of
20 them by himself." (Id. at 704.)
21 McQuilkin himself bought marijuana from Praddy; he saw other people buying
22 marijuana from Praddy; he saw Praddy selling marijuana four to five times a week on Raleigh Place,
-8-
1 rather than on Church Avenue. (See Tr. 714.) He also saw Praddy with Dowdie, Kiond, "Joe," and
2 numerous others (id. at 699-701) most of whom Dowdie had identified as members of the Crew (see,
3 e.g., id. at 327, 460-64). McQuilkin testified that he saw Praddy and Kiond together selling marijuana
4 "[l]ike four, five times a week" (id. at 699), "[e]very week" (id.), selling marijuana "hundreds of
5 times" (id. at 714). "[H]undreds," he said, was "not an exaggeration." (Id.)
6 Praddy contends that the testimony of McQuilkin should be entirely disregarded. He
7 bases this contention on the facts that Count Eleven of the superseding indictment charged that Praddy
8 had murdered Belize, that McQuilkin testified that he saw Praddy shoot Belize, and that the jury was
9 unable to reach a verdict on Count Eleven, and on the further fact that when Praddy was thereafter
10 retried for that alleged murder he was acquitted. The contention that McQuilkin's testimony should
11 be disregarded is factually and legally meritless. First, the superseding indictment alleged the fact that
12 Praddy killed Belize "intentionally." The shooting occurred at about 9:30 p.m. on a public street in
13 front of an open store (see id. at 911, 716-20), in plain view of those present or passing by (see, e.g.,
14 id. at 720). At trial, Dowdie testified that he had quizzed Praddy about the shooting of Belize, and
15 Praddy told him that Belize had tried to grab Praddy's gun and had been shot accidentally. (See id.
16 at 378.) Thus, in light of all the evidence, the jury plainly did not need to reject McQuilkin's
17 testimony that he saw Praddy shoot Belize in order to find itself unable to determine whether in fact
18 that shooting was intentional. Second, as a matter of law, as discussed above, a jury is entitled to
19 believe parts and disbelieve other parts of a given witness's testimony. Thus, even if the jury did not
20 credit McQuilkin's testimony about witnessing Praddy shoot Belize, it was entitled to credit
21 McQuilkin's testimony as to Praddy's drug-dealing activities.
-9-
1 In sum, the evidence at trial included testimony that Praddy and Dowdie worked
2 together, with Dowdie selling or consigning marijuana to Praddy, and Praddy informing Dowdie of
3 interlopers on the block; that Praddy also bought marijuana from Dowdie's lieutenants; that Praddy
4 and Lindsey sold marijuana on Church Avenue on a daily basis; that Praddy also sold marijuana four
5 or five times a week on Raleigh Place; and that Praddy and one of Dowdie's lieutenants worked
6 together selling marijuana hundreds of times. The evidence was plainly sufficient to permit a rational
7 juror to find beyond a reasonable doubt that Praddy was a knowing member of the Raleigh Place
8 Crew conspiracy to distribute marijuana.
9 B. Praddy's Participation in the Conduct of the RICO Enterprise
10 On the RICO counts, Counts One and Two, Praddy was convicted of violating
11 18 U.S.C. §§ 1962(c) and (d). Those subsections provide in pertinent part as follows:
12 (c) It shall be unlawful for any person employed by or associated with
13 any enterprise engaged in, or the activities of which affect, interstate or foreign
14 commerce, to conduct or participate, directly or indirectly, in the conduct of
15 such enterprise's affairs through a pattern of racketeering activity . . . .
16 (d) It shall be unlawful for any person to conspire to violate any of the
17 provisions of subsection . . . (c) of this section.
18 18 U.S.C. §§ 1962(c), (d) (emphases added). RICO defines "'enterprise'" to "include[] . . . any union
19 or group of individuals associated in fact," id. § 1961(4); it defines "'racketeering activity,'" to include
20 federal drug trafficking felonies, id. § 1961(1). "When read in conjunction with the language of
21 § 1962(c), RICO's conspiracy provision [§ 1962(d)] proscribes an agreement 'to conduct or
22 participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of
-10-
1 racketeering activity.'" United States v. Viola, 35 F.3d 37, 43 (2d Cir. 1994), abrogated on other
2 grounds by Salinas v. United States, 522 U.S. 52 (1997).
3 In Reves v. Ernst & Young, 507 U.S. 170 (1993), the Supreme Court interpreted
4 subsection (c) as follows:
5 In order to "participate, directly or indirectly, in the conduct of such
6 enterprise's affairs," [in violation of § 1962(c),] one must have some part in
7 directing those affairs. Of course, the word "participate" makes clear that
8 RICO liability is not limited to those with primary responsibility for the
9 enterprise's affairs, just as the phrase "directly or indirectly" makes clear that
10 RICO liability is not limited to those with a formal position in the enterprise,
11 but some part in directing the enterprise's affairs is required.
12 Reves, 507 U.S. at 179 (footnote omitted) (second "some" emphasized in original; other emphases
13 added). Thus, to be convicted of violating § 1962(c), the government must prove that the defendant
14 "participate[d] in the operation or management of the enterprise itself." Reves, 507 U.S. at 185
15 (emphasis added).
16 The indictments in the present case charged that the Raleigh Place Crew was a RICO
17 enterprise, that is, a group of individuals associated in fact, functioning as a continuing unit, for the
18 purpose of selling drugs in the Raleigh Place area. In challenging his convictions on Counts One and
19 Two, Praddy does not contend that the government failed to prove that the Crew constituted such an
20 enterprise. Rather, he contends that the evidence was insufficient to show that he "played some part
21 in the operation or management of the enterprise" (Praddy brief on appeal at 21 (internal quotation
22 marks omitted)) or that he knowingly entered into an agreement to participate in the conduct of the
23 enterprise. We reject these contentions as well.
24 The evidence discussed above in Part II.A., which sufficed to prove that Praddy was
25 a member of the conspiracy to distribute marijuana in the Raleigh Place area, likewise sufficed to
-11-
1 prove that he was a member of the RICO enterprise. In addition, there was sufficient evidence to
2 show that Praddy was not merely a low-level member of the enterprise, a worker who simply followed
3 the orders of others, but was instead one who participated in, and conspired to participate in, the
4 operation of the enterprise. Dowdie testified that most members of the Raleigh Place Crew were
5 "bosses"--all collaborating on controlling the block and excluding interlopers who would sell during
6 the Crew's selling hours (Tr. 374, 461-62); all having the authority to give orders to those Crew
7 members who were workers (see id. at 516); and all having discretion to choose their own marijuana
8 suppliers (see id. at 463-64). Dowdie testified that Praddy did not work "for" Dowdie (id. at 454), but
9 rather worked "with" him (id. at 310), and that Praddy was one of the bosses (see, e.g., id. at 461).
10 Praddy, in selling the marijuana he had purchased, was selling independently, with Dowdie's
11 awareness of Praddy's selling activities. (See id. 517-18.)
12 Praddy himself testified that he had suppliers other than Dowdie and Dowdie's
13 lieutenants, and that Praddy alone decided where and from whom to purchase the marijuana he would
14 resell. (Tr. 1120-21, 1128-29, 1131-32.) We conclude that the evidence was sufficient to permit the
15 jury to find that Praddy was a member of the marijuana distribution conspiracy, that he had discretion
16 with respect to his choice of suppliers and his selling locations, and that he agreed to, and did,
17 participate in the operation of the RICO marijuana distribution enterprise. We thus affirm Praddy's
18 convictions on Counts One and Two.
-12-
1 III. THE FIREARM CONVICTION
2 On Count Fourteen, Praddy was convicted of possessing a firearm during and in
3 relation to his participation in the Raleigh Place marijuana trafficking conspiracy, in violation of 18
4 U.S.C. § 924(c)(1)(A), a conviction that subjected him to a five-year term of imprisonment that was
5 required to be served consecutively to his prison term on the other counts, see id. § 924(c)(1)(A)(i).
6 Although there was clear evidence that Praddy possessed a gun during and in relation to his marijuana
7 selling activity in 2004 (see Tr. 203-07 (police officer testifying that when he arrested Praddy, who
8 was carrying a backpack, the officer found in the backpack a gun and 27 ziplock bags of marijuana)),
9 Praddy contends that his prosecution on Count Fourteen was barred by the statute of limitations. We
10 agree.
11 The statute of limitations on a § 924(c) offense is five years. See 18 U.S.C. § 3282(a).
12 In connection with the present case, Praddy was first arrested in June 2009 and was first charged with
13 possession of a firearm in the superseding indictment filed in July 2010. At trial, Praddy and the
14 government stipulated that he had been arrested in April 2004, had pleaded guilty to a New York State
15 gun possession charge, and spent a year in prison for that conviction. The government presented no
16 evidence as to Praddy's possession of a gun after his arrest in 2004.
17 Despite proffering no evidence that Praddy possessed a gun within five years prior to
18 the July 2010 filing of the superseding indictment charging Praddy with the § 924(c) offense, the
19 government contends that the charge was timely. Pointing out that the statute of limitations on a
20 given offense does not begin to run until the offense is complete, the government argues that
21 conspiracy is a continuing offense and that this Court ruled in United States v. Payne, 591 F.3d 46,
-13-
1 69 (2d Cir. 2010) ("Payne"), that possession of a gun during and in relation to a narcotics conspiracy
2 is therefore itself a continuing offense that does not end until the conspiracy ends. (See Government
3 brief on jillhopkins@example.org.)
4 Neither Payne nor reason supports the government's position in its case against Praddy.
5 In Payne, the jury had found that Payne used or carried a gun within the five-year period prior to the
6 commencement of the prosecution. See 591 jillhopkins@example.org. Payne invoked the statute of limitations with
7 regard to sentencing, arguing that he should not have been subject to an enhanced sentence for
8 discharging the gun, see 18 U.S.C. § 924(c)(1)(A)(iii) (requiring the imposition--in addition to the
9 punishment provided for the underlying drug-trafficking crime--of a 10-year term of imprisonment
10 "if the firearm was discharged"), because there was no evidence that, within the five years prior to
11 prosecution, while he carried the gun, the gun had been discharged, see 591 jillhopkins@example.org. We rejected
12 Payne's challenge, stating as follows:
13 Conspiracy is a continuing offense. . . . A continuing offense is, in
14 general, one that involves a prolonged course of conduct; its commission is not
15 complete until the conduct has run its course. . . . When a defendant is
16 convicted of violating § 924(c)(1)(A) for using or carrying a firearm during
17 and in relation to a crime that is a continuing offense, the § 924(c)(1) crime
18 itself is a continuing offense. . . . In our view, § 924(c)(1) does not define a
19 'point-in-time' offense when a firearm is used during and in relation to a
20 continuing crime of violence.[]
21 Because the narcotics distribution conspiracy that was a predicate of
22 Payne's firearms offense was a continuing crime, Payne's firearms offense was
23 likewise a continuing offense, rather than a "point-in-time" offense. And
24 because . . . "brandishing and discharging [are] sentencing factors to be found
25 by the judge, not offense elements to be found by the jury," Harris[ v. United
26 States], 536 U.S. [545,] 556 [(2002)], the district court could properly
27 consider, in determining Payne's appropriate sentence, whether Payne
28 discharged a firearm at any point during the continuation of his § 924(c)(1)(A)
29 offense.
-14-
1 Payne, 591 F.3d at 69 (other internal quotation marks omitted) (emphases added). We also noted that
2 in sentencing a defendant, "a district court may properly rely on acts performed outside the five-year
3 statute-of-limitations period as 'relevant conduct' in calculating the defendant's term of imprisonment
4 under the Guidelines." Id.; see, e.g., United States v. Silkowski, 32 F.3d 682, 688 (2d Cir. 1994).
5 In Payne, unlike the case with respect to Praddy, there had been no termination of the
6 defendant's gun possession by reason of a prior arrest and seizure of the gun. Thus, it was within the
7 realm of reason to characterize Payne's firearm offense as one that continued through the life of the
8 conspiracy.
9 In the present case, the gun on which the government relies for Praddy's § 924(c)
10 conviction was the gun he possessed in 2004. When Praddy was arrested in 2004, that gun was taken
11 from him by state law enforcement officers. The government made no effort to prove at trial that
12 Praddy possessed any gun thereafter. Apparently, it had no such evidence. (See government's post-
13 judgment letter to the district court dated January 30, 2012, at 4 ("The government does not contend
14 that [Praddy] carried a gun continually 'throughout' the entire conspiracy, and in fact the specific
15 instances in which [Praddy] personally possessed a gun occurred, to the government's knowledge, in
16 2004 or before." (emphasis added)).) Rather, the government contends that simply because Praddy
17 possessed the gun in connection with his membership in the Raleigh Place marijuana conspiracy, his
18 possession of the gun must be deemed to have continued even after the gun was seized from him by
19 the police--as reflected in the presentation by the Assistant United States Attorney ("AUSA") at the
20 oral argument of this appeal ("Oral Argument"):
21 JUDGE KEARSE: What's the evidence of [Praddy's] gun
22 possession within five years' prior to the filing of the indictment in this
23 case?
-15-
1 AUSA: Your Honor, I submit that the government did not have
2 to prove that he actually possessed a gun within five years of 2010. . . .
3 JUDGE KEARSE: Does that mean that there is no evidence of
4 gun possession during that period?
5 AUSA: We did not put forth evidence that he possessed a gun
6 after 2004, when he was apprehended, Your Honor.
7 JUDGE KEARSE: You're resting the gun possession charge
8 on the gun he possessed earlier, for which he was arrested prior to this
9 five year period?
10 AUSA: Yes, Your Honor.
11 JUDGE KEARSE: And presumably when they arrested him on
12 the gun charge, they took the gun?
13 AUSA: Yes, Your Honor.
14 JUDGE KEARSE: What's the sense of imputing to him gun
15 possession after he has been arrested and had the gun seized?
16 AUSA: Your Honor, because he was convicted of a continuing
17 offense. The marijuana distribution conspiracy that was the predicate
18 for the 924(c) charge was a continuing crime, and that's what this Court
19 said in United States v. Payne in 2010.
20 JUDGE KEARSE: But in Payne, there was no intervening
21 arrest and seizure of the gun, was there?
22 AUSA: No, but my understanding of Payne is that if the
23 predicate offense is a conspiracy, as it was here, the length of the
24 conspiracy starts the clock for the statute of limitations, and the statute
25 of limitations clock began to run in 2009, because that is when the
26 government put forth evidence to prove when the conspiracy ended.
27 So the indictment, as well as his conviction, was well within the statute
28 of limitations. Basically, we had 5 years after 2009 to charge him with
29 the gun possession charge . . . for the 924(c) charge.
30 JUDGE KEARSE: For the gun that was seized from him in
31 2004?
32 AUSA: Yes, yes, because that was not a point-in-time offense.
33 That was a continuing offense.
-16-
1 JUDGE KEARSE: How did it continue after the gun was
2 seized from him?
3 AUSA: Because it was part of the broader marijuana
4 distribution conspiracy.
5 (Oral Argument (emphases added).)
6 As indicated in this colloquy, the government acknowledged that, unlike in the present
7 case, there was no arrest and seizure in Payne that interrupted Payne's gun possession. Nor was the
8 government able to point to any case in which the continuing-offense theory had been applied to a
9 defendant whose actual gun possession had been terminated by a law enforcement seizure of the gun:
10 JUDGE STRAUB: Do you have a case to support this particular
11 factual circumstance?
12 AUSA: With respect to the 924(c) charge, Your Honor, or with respect
13 to . . . ?
14 JUDGE STRAUB: With respect to the issue that you had just been
15 discussing with Judge Kearse, whether this continuing offense can be
16 interrupted by the fact that the gun was taken away from him?
17 AUSA: No, Your Honor. The language I have is specifically from
18 United States v. Payne, where this Court said that when the defendant is
19 convicted . . . .
20 JUDGE STRAUB: I understand that. But I'm asking you if there's a
21 case to support the unusual set of circumstances that we have here?
22 AUSA: Not of which I am aware of today, Your Honor.
23 (Oral Argument.)
24 Nor are we aware of any such authority. While ordinarily a defendant's possession of
25 a firearm is an ongoing offense, that offense normally runs its course when the possession has ended.
26 See generally United States v. Dillard, 214 F.3d 88, 94 n.5 (2d Cir. 2000) (with respect to possession
27 of a firearm by a convicted felon in violation of 18 U.S.C. § 922(g)(1), "the limitations period runs
-17-
1 from any act of possession that is the subject of the prosecution," and the "'course'" of the commission
2 of th[at] offense is the course of the illegal possession"). And while ordinarily when the gun
3 possession is during and in relation to a conspiracy, which is a continuing offense, that possession is
4 presumed to continue until the underlying conspiracy offense has run its course, it would defy all
5 reason to give effect to that presumption after such time as the gun has in fact been seized by law
6 enforcement authorities. We decline to uphold Praddy's conviction under § 924(c)--a conviction that
7 subjects the defendant to imprisonment for an extra five years--on the basis of the fiction that, simply
8 because he continued to sell marijuana, he continued to possess the gun in question after it was seized
9 from him by the police.
10 We reverse Praddy's conviction on Count Fourteen, and we remand for resentencing
11 de novo on the RICO and narcotics counts, see, e.g., United States v. Graham, 691 F.3d 153 (2d Cir.
12 2012).
13 IV. SENTENCING CHALLENGES
14 For his RICO and drug trafficking offenses (Counts One, Two, Four, Five, Six, Seven,
15 and Eight), Praddy was sentenced principally to 120 months' imprisonment. He contends that that
16 120-month term is substantively unreasonable because the district court imposed that sentence on the
17 basis that the Raleigh Place conspiracy involved more than 100 kilograms of marijuana, that Praddy
18 was a member of that conspiracy for a lengthy period of time, and that the gun Praddy had carried in
19 2004 was loaded. Praddy contends that the court in fact imposed that sentence because it believed
20 Praddy had killed Belize (i.e., Kevon Simon). (See, e.g., Praddy brief on appeal at 35-36 (contending
21 that "the court seized on the temporal span of the conspiracy and the amount of marijuana dispensed"
-18-
1 "[i]n a thinly-veiled attempt to impose a sentence appropriate for the killer the district court believed
2 him to be").) Challenges to the substantive reasonableness of the sentence are reviewed under a
3 standard that is akin to abuse of discretion. See, e.g., Gall v. United States, 552 U.S. 38, 46 (2007);
4 United States v. Fernandez, 443 F.3d 19, 34 (2d Cir. 2006). We find Praddy's challenges to be
5 without merit.
6 The presentence report ("PSR") prepared on Praddy concluded, as revised, that
7 Praddy's Guidelines offense level was 43 and that the advisory-Guidelines recommended range of
8 imprisonment for his narcotics and RICO convictions was 240 months. That conclusion was based
9 in part on the premise that Praddy had killed Belize, although the jury at Praddy's joint trial with
10 Kiond Jones had been unable to reach a verdict on that charge, and at a subsequent trial of Praddy a
11 jury acquitted him of that charge. At the sentencing hearing, the district court expressly declined to
12 find that Praddy had killed Belize. (See Sentencing Transcript, October 28, 2011 ("S.Tr."), at 17 ("I'm
13 not going to hold him accountable for the murder"); id. at 29 ("I'm not sentencing him as a killer");
14 id. ("the fact is I'm not sentencing him for killing Kevon Simon").)
15 Having determined that it would not sentence Praddy on the basis that he had killed
16 Belize, the court first recalculated the advisory-Guidelines-recommended imprisonment range for
17 Praddy's offenses and then considered whether that range was appropriate in light of the factors set
18 out in 18 U.S.C. § 3553(a). Noting that the jury had found that the Raleigh Place marijuana
19 conspiracy involved 100 or more kilograms of marijuana, the court determined that Praddy's base
20 offense level was 26, see Guidelines § 2D1.1(c)(7); the court then found that a two-step upward
21 adjustment for obstruction of justice was warranted because Praddy perjured himself at trial, both
22 when he testified about not having a reason for buying the gun he possessed when he was arrested
23 (see Tr. 1152-53) and when he testified that he had not possessed marijuana when he was arrested in
-19-
1 possession of the gun (see id. at 1154). (See S.Tr. 21-23, 52-53; id. at 52 ("I find that he's lied at least
2 twice.") With the obstruction-of-justice adjustment, Praddy's offense level was 28. Given his
3 criminal history category of I, the advisory-Guidelines-recommended range of imprisonment for
4 Praddy's narcotics and RICO offenses was 78-97 months.
5 The district court, after considering the factors set out in 18 U.S.C. § 3553(a), including
6 "the nature and character of [Praddy's] criminal misdeeds" (S.Tr. 24), determined that an above-
7 Guidelines sentence of 120 months was appropriate. The court based that determination on the
8 evidence that Praddy was a member of the Raleigh Place conspiracy for some six years, that the jury
9 found that the conspiracy involved at least 100 kilograms of marijuana--an amount that was amply
10 supported by Dowdie's testimony that the Raleigh Place Crew sold "thousands of pounds" of
11 marijuana (1,000 pounds being the equivalent of more than 450 kilograms), and that the gun Praddy
12 had carried was loaded.
13 Praddy argues that in holding him responsible for 100 kilograms of marijuana, "the
14 district court appeared to hold [him] responsible for the acts of his coconspirators" and did so without
15 making any finding that their collective actions were foreseeable to Praddy. (Praddy brief on appeal
16 at 37.) We see no abuse of discretion in the court's consideration of either the nature of Praddy's
17 participation in the conspiracy or the quantity of marijuana attributed to him. The court found that
18 Praddy was not just casually associated with the drug conspiracy but had "extensive involvement" in
19 it (S.Tr. 53) and participated in it for some six years, during which he and his coconspirators were on
20 the street selling marijuana daily (see id. at 37). This finding was entirely supported by the evidence
21 described in Part II above, that Praddy--according to his own testimony--sold marijuana from 2003
22 until his arrest in 2009; and that Praddy, according to testimony from his customers and his
23 coconspirator Dowdie, sold marijuana "daily" or at least four or five times a week "every week," and
-20-
1 was observed by one witness selling marijuana with one of Dowdie's lieutenants "hundreds of times."
2 In light of the evidence, the court's decision to hold Praddy responsible for the amount sold by the
3 conspiracy was authorized by the Guidelines, see Guidelines § 1B1.3 Application Note 2, and by
4 caselaw, see, e.g., United States v. Chavez, 549 F.3d 119, 136 (2d Cir. 2008), and was not an abuse
5 of discretion.
6 Finally, Praddy acknowledges that "the fact that a weapon was loaded clearly has some
7 sentencing significance . . . ." (Praddy brief on jillhopkins@example.org.) His challenge is only to "the weight
8 ascribed to" that fact (id.), and is unpersuasive. The sentencing judge has broad discretion to consider
9 all relevant information in determining an appropriate sentence, see, e.g., United States v. Rodriguez-
10 Gonzalez, 899 F.2d 177, 182 (2d Cir. 1990) (affirming sentencing enhancement based on constructive
11 possession of a "loaded gun"), and we see no basis for second-guessing the weight the district judge
12 assigned to this factor in the present case.
13 CONCLUSION
14 We have considered all of Praddy's contentions on this appeal and, except with respect
15 to the statute-of-limitations challenge to his conviction under 18 U.S.C. § 924(c) (Count Fourteen),
16 have found them to be without merit. Praddy's conviction on Count Fourteen is reversed; his
17 convictions on all other counts are affirmed. The matter is remanded for resentencing de novo on the
18 affirmed counts, in light of the reversal of the conviction on Count Fourteen.
-21-
|
276 U.S. 482 (1928)
MIDLAND VALLEY RAILROAD COMPANY
v.
BARKLEY ET AL.
No. 375.
Supreme Court of United States.
Argued March 9, 1928.
Decided April 9, 1928.
CERTIORARI TO THE SUPREME COURT OF ARKANSAS.
Mr. Thomas B. Pryor, with whom Messrs. O.E. Swan and Vincent M. Miles were on the brief, for petitioner.
Mr. Charles I. Evans, with whom Messrs. U.C. May and Jeptha H. Evans were on the brief, for respondents.
*483 MR. JUSTICE BRANDEIS delivered the opinion of the Court.
Barkley and Burnett operated a wagon coal mine in Arkansas located about a quarter of a mile from the line of the Midland Valley Railroad, a corporation of that State. They shipped their coal by that carrier, largely in interstate commerce. In the spring and summer of 1922 there was a widespread strike in bituminous coal mines throughout the United States. When mining was resumed in August, an acute car shortage developed. Coal is usually shipped in open top cars; and tipple mines, which are the largest producers of coal, can use only cars of that type. The supply of these being inadequate, the Midland, like other carriers, distributed the available open top cars among the tipple mines and its box cars among the wagon mines. Barkley and Burnett refused to accept box cars; and later brought, in an Arkansas court, this action against the Midland to recover damages for the alleged failure to furnish, during the period of the car shortage, an adequate supply of cars. By appropriate proceedings, the defendant objected to the maintenance of the action in the state court. It contended that the proper distribution of coal cars by interstate carriers in time of car shortage was an administrative question which Congress had committed to the Interstate Commerce Commission; and that the plaintiffs should have sought relief by application to that board. The trial court overruled the objection; the plaintiffs got a verdict; the judgment entered thereon was affirmed by the highest court of the State, 172 Ark. 898; and this Court granted a writ of certiorari. 275 U.S. 514. The only question for decision is whether the action lies.
The plaintiffs contend, and the state court held, that the action lay because it was brought to enforce the common law duty of the carrier to furnish cars, Midland Valley *484 R.R. Co. v. Hoffman Coal Co., 91 Ark. 180, 189, a duty confirmed by the statutes of the State (Crawford & Moses Arkansas Digest, 1921, § 895), and recognized by the Interstate Commerce Act. They argue that the right to bring an action in the courts of a State for a breach of that duty has been specifically preserved to the shipper by § 22 of the Interstate Commerce Act which declares that "nothing in this Act contained shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this Act are in addition to such remedies"; that the plaintiffs made no attack, open or covert, upon any regulation or order of the Commission relating to the supply or distribution of cars, compare Lambert Coal Co. v. Baltimore & Ohio R.R. Co., 258 U.S. 377; that consequently no administrative question was involved, compare Texas & Pacific Ry. Co. v. Abilene Cotton Oil Co., 204 U.S. 426; Loomis v. Lehigh Valley R.R. Co., 240 U.S. 43; Great Northern Ry. Co. v. Merchants Elevator Co., 259 U.S. 285; and that the case is governed by Pennsylvania R.R. Co. v. Puritan Coal Co., 237 U.S. 121, and Pennsylvania R.R. Co. v. Sonman Shaft Coal Co., 242 U.S. 120, rather than by Baltimore & Ohio R.R. Co. v. Pitcairn Coal Co., 215 U.S. 481 and Morrisdale Coal Co. v. Pennsylvania R.R. Co., 230 U.S. 304.
The assertion that no administrative question is here involved rests upon a misapprehension. It may be assumed that there was no order of the Commission which required the Midland to distribute all available open top cars among the tipple mines. But the reasonableness of the Midland's practice in doing so, and in allotting box cars to the wagon mines, was the substantial matter in controversy. The right of a shipper to cars is not an absolute right and the carrier is not liable if its failure to furnish cars was the result of sudden and great demands which it *485 had no reason to apprehend would be made and which it could not reasonably have been expected to meet in full. The law exacts only what is reasonable from such carriers. The reasonableness of the rule adopted by the carrier is a matter for the Commission. Pennsylvania R.R. Co. v. Puritan Coal Co., 237 U.S. 121, 133, 134. In the case at bar, the right of the plaintiffs to recover depended upon whether the defendant's practice of distributing its open top cars to tipple mines and its box cars to wagon mines was reasonable. The practice is one which was generally adopted in times of car shortage by rail carriers in the same territory; which had, under like circumstances, been prescribed by general orders of the Director General;[1] which had been to some extent prescribed by the Interstate Commerce Commission;[2] and the propriety of which in individual cases has been repeatedly the subject of consideration by the Commission on applications by shippers for relief.[3] It was clearly one of those questions which, as recognized in the Puritan case, calls for "the *486 exercise of the regulating function of the Commission." p. 133. Compare Robinson v. Baltimore & Ohio R.R. Co., 222 U.S. 506.
In the case at bar, the adequacy of the carrier's supply of open cars in normal times was not seriously questioned; there was no suggestion that the plaintiffs' mine had been discriminated against; and the only substantial complaint was that the Midland's practice in allotting the open top cars to the tipple mines was illegal. Thus the facts are unlike those in which actions at law for failure to furnish cars have been entertained. In Pennsylvania R.R. Co. v. Puritan Coal Co., 237 U.S. 121, and in Illinois Central R.R. Co. v. Mulberry Hill Coal Co., 238 U.S. 275, the claim was that, under a rule confessedly valid, the carrier had discriminated against the plaintiff. In Eastern Railway *487 Co. v. Littlefield, 237 U.S. 140, the claim was that the carrier, knowing of the car shortage, had not only failed to notify the shipper but had accepted the shipment. In Pennsylvania R.R. Co. v. Sonman Shaft Coal Co., 242 U.S. 120, 125-127, the action was for failure to supply cars in confessedly normal times. Compare Pennsylvania R.R. Co. v. Stineman Coal Co., 242 U.S. 298, 300-301. In none of those cases was the reasonableness of the carrier's practice in controversy.
We have no occasion to consider whether the then existing orders of the Commission required the Midland to adopt the practice followed. Nor need we determine, whether by the amendments of the Interstate Commerce Act made in Transportation Act, 1920, c. 91, § 402, pars. 10-17, 41 Stat. 456, 476, and the Act of September 22, 1922, c. 413, 42 Stat. 1025, Congress evinced the intention to occupy the field of regulating the distribution of coal cars, and thereby abrogated the preexisting limited right to sue in a state court for failure to supply cars.
Reversed.
NOTES
[1] By an order dated June 17, 1918, the Regional Directors were instructed that "open top cars suitable and available for loading at tipple mines should be first supplied to such mines and should not be supplied to wagon mines until the tipple mines have been supplied." This modified an earlier order of March 20, 1918, which had directed that open top cars should not be furnished to wagon mines for loading on public team tracks if box cars were available for such loading.
[2] By notice of March 2, 1920, the Commission recommended that the rules as to the distribution of coal cars embodied in Railroad Administration Car Service Section Circular CS-31, issued September 12, 1918, revised December 23, 1919, be continued in effect. See In re Rules Governing Ratings of Coal Mines, 95 I.C.C. 309, 320. This recommendation appears to have been generally accepted by the carriers. Compare Winding Gulf Colliery Co. v. Virginian Ry. Co., 102 I.C.C. 41. From time to time the Commission has issued emergency orders governing the distribution of coal cars, under the power conferred by paragraph 15 of § 402 of Transportation Act, 1920, c. 91, 41 Stat. 456, 476. Several of these orders recognize the necessity of a distinction, in time of shortage, between wagon and tipple mines. By Service Order No. 14, issued August 25, 1920, the Commission directed that on any day when a carrier was unable to supply all mines on its line with the required open top cars, such cars should not be furnished to wagon mines which were unable to load on private tracks and from a tipple or like arrangement, until all tipple mines had been supplied. This was rescinded by Service Order No. 17, effective September 19, 1920, which, however, prohibited a carrier from furnishing open top cars in time of shortage to mines which did not customarily load cars within 24 hours of the time of placement, a prohibition which would include most wagon load mines. This order was vacated March 6, 1921. A similar requirement was incorporated into Service Order No. 25 by Amendment No. 1, effective October 17, 1922. Service Order No. 25 applied only to common carriers "east of the Mississippi River, including the west bank crossings thereof"; it was vacated December 11, 1922.
[3] Thompson v. Pennsylvania R.R. Co., 10 I.C.C. 640; Swaney v. Baltimore & Ohio R.R. Co., 49 I.C.C. 345. Compare Glade Coal Co. v. Baltimore & Ohio R.R. Co., 10 I.C.C. 226; Northern Coal Co. v. Mobile & Ohio R.R. Co., 55 I.C.C. 502; Griffith v. Jennings, 60 I.C.C. 232; Dickinson Fuel Co. v. Chesapeake & Ohio Ry. Co., 60 I.C.C. 315.
|
262 F. Supp. 102 (1966)
James R. WALKER, Petitioner,
v.
STATE OF NORTH CAROLINA and City of Charlotte, Respondents.
Civ. No. 2524.
United States District Court W. D. North Carolina, Asheville Division.
August 3, 1966.
*103 James R. Walker, pro se.
Paul L. Whitfield and Henry W. Underhill, Jr., Charlotte, N. C., for respondent, City of Charlotte.
Ralph White, Jr., Staff Atty., Raleigh, N. C., for respondent, State of N. C.
MEMORANDUM AND ORDER DISMISSING PETITION FOR WRIT OF HABEAS CORPUS
CRAVEN, Circuit Judge.[*]
James R. Walker petitions this court for a writ of habeas corpus asserting that he is unconstitutionally restrained of his liberty by reason of a suspended sentence imposed by the Mecklenburg County Superior Court on February 17, 1965.
The facts as developed at a plenary hearing are as follows:
The Superintendent of Building Inspection of the City of Charlotte charged, by affidavit, that on June 23, 1964, petitioner unlawfully violated Section 5-4(c) of the City Code by remodeling and repairing his residence located at 1447 South Church Street without first applying for and obtaining a written permit from the Building Inspection Department of the city in violation of N.C.G.S. Section 14-4. Petitioner was arrested and brought into Recorder's Court under a warrant based upon the Superintendent's affidavit.
At the trial, petitioner interposed as a defense the same constitutional objections which he now asserts in this habeas corpus petition: (1) that Section 5-4(c) is unconstitutional in that it violates the petitioner's "inalienable and vested right of use, possession, and maintenance" of his residence; (2) that the conduct described in the Code and in the warrant of arrest is privileged conduct protected by the North Carolina Constitution and the Fourteenth Amendment to the United States Constitution; (3) that any verdict rendered would be an unconstitutional abridgement of petitioner's rights as a property owner including his right of renovation and repair of his residence. The state introduced testimony as to the dilapidated condition of the petitioner's building, i. e., that it was unfit for human habitation, and that it was beyond reasonable repair, and that it could not be altered or improved so as to meet the minimum housing standards of the City Housing Code.[1] A verdict of guilty was entered against the petitioner, and, upon the posting of $200.00 bond, an appeal to the Mecklenburg County Superior Court was noted.
In the superior court, petitioner's motion to quash was denied, and the state repeated its evidence. The jury returned a verdict of guilty against petitioner, and a thirty-day jail sentence was imposed, suspended on the condition that petitioner comply with *104 the City Building and Housing Codes and pay the costs of court.[2] Petitioner excepted and appealed to the Supreme Court of North Carolina, wherein he again challenged the constitutionality of Section 5-4(c) of the Charlotte Building Code and N.C.G.S. Section 14-4, which makes violation of the Code a misdemeanor. The North Carolina Supreme Court, upholding petitioner's conviction, stated: "The Charlotte ordinance and the Legislative enactments involved in this case are not shown to be violative either of the Constitution of North Carolina or of the United States." State v. Walker, 265 N.C. 482, 144 S.E.2d 419 at 421 (1965).
In his petition for writ of habeas corpus filed in this court on May 10, 1966, petitioner asserted that he was "unconstitutionally detained and in custody * * * by virtue of a JUDGMENT and Jail Sentence pronounced upon him by the Superior Court of Mecklenburg County, North Carolina, on the 17th day of February, 1965, upon the conviction of the crime of VIOLATING CITY BUILDING CODE, Section 5-4(c) and NORTH CAROLINA GENERAL STATUTES, 14-4 * * *."
MOTION TO DISMISS
The state seeks to dismiss this petition on two grounds: (1) the petitioner has not applied to the state court for relief under North Carolina's Post-Conviction Hearing Act, N.C.G.S. Section 15-217 to 15-222, and, therefore, has not exhausted his state remedies as required by 28 U.S. C.A. Section 2254; and (2) the petitioner, by reason of the suspended sentence, is not in custody within the meaning of 28 U.S.C.A. Section 2241.
The petitioner maintains that he is detained pursuant to an unconstitutional judgment based upon unconstitutional statutes. He raised this issue at his trial, and again on direct appeal, and the Supreme Court of North Carolina has passed upon his constitutional objections. Under these circumstances, it is not necessary for him to raise them again in state collateral proceedings, i. e., via the Post-Conviction Hearing Act. Evans v. Cunningham, 335 F.2d 491 (4th Cir. 1964); Thomas v. Cunningham, 313 F.2d 934 (4th Cir. 1964). The state's first ground for dismissal is not well taken.
Its second ground for dismissal (the custody requirement) raises a more serious question. Federal habeas corpus is available to "a person in custody [my italics] pursuant to the judgment of a State court * * *." Title 28 U.S.C.A. Section 2254. Is this petitioner, by reason of a thirty-day suspended sentence, in custody within the meaning of the statute?
At the time of his petition, petitioner was not (and is not now) physically incarcerated or confined. No order of commitment has been issued against him, and no active sentence has been invoked. If the petitioner fails here, it is probable that the active sentence will be invoked. But, is the expectation of future imprisonment sufficient to bring petitioner within the "in custody" requirement?
It is clear that to invoke the Writ one need not be physically detained in a jail or prison. Jones v. Cunningham, 371 U.S. 236, 83 S. Ct. 373, 9 L. Ed. 2d 285 (1963); see also Ex parte Fabiani, 105 F. Supp. 139 (E.D.Pa.1952). It is only necessary to show that there are impediments which "significantly restrain petitioner's liberty to do those things which in this country free men are entitled to do." Jones v. Cunningham, 371 *105 U.S. at 243, 83 S. Ct. at 377. In further explaining the meaning of "custody", the Supreme Court has said: "History, usage, and precedent can leave no doubt that, besides physical imprisonment, there are other restraints on a man's liberty, restraints not shared by the public generally, [my italics] which have been thought sufficient in the English-speaking world to support the issuance of habeas corpus." Id. at 240, 83 S.Ct. at 376.
In my opinion, petitioner suffers from a restraint "not shared by the public generally" and, therefore, is "in custody" within the meaning of 28 U.S.C.A. Section 2241. Jones v. Cunningham, supra; see also: Fay v. Noia, 372 U.S. 391, 83 S. Ct. 822, 9 L. Ed. 2d 837 (1963); Martin v. Commonwealth of Virginia, 349 F.2d 781 (4th Cir. 1965).
The motion to dismiss for the reasons hereinabove stated is denied.
MERITS
Petitioner's constitutional objections are without merit. As the Supreme Court of North Carolina has already stated concerning this case: It is "unusual in that neither the City's ordinance requiring a permit for repairs nor the State law which authorizes them and makes the violation of the ordinance a misdemeanor is challenged on the ground that the requirements are arbitrary, capricious, discriminatory, or invalid for any other reason except the lack of authority on the part of the City and of the Legislature to ordain and to enact them." State v. Walker, 265 N.C. 482, 144 S.E.2d 419 (1965).
Petitioner admits to violating the city ordinance involved here. He asserts, however, that he need not seek permission from anyone to repair the building in question and that requiring him to do so is an unconstitutional infringement of a "vested and inalienable constitutional right of repair * * *." Indeed, petitioner states that he has not applied for a permit to repair his building and, furthermore, has no intention of doing so.[3]
The ownership of property and all incidental rights thereto are subject to reasonable limitations which governing authorities deem essential for the protection of the public health, safety, and welfare of the community. See Standard Oil Co. v. City of Marysville, 279 U.S. 582, 49 S. Ct. 430, 73 L. Ed. 856 (1928). "No rule in constitutional law is better settled than the principle that all property is held subject to the right of the state reasonably to regulate its use under the police power." 16 Am.Jur.2d 565, Constitutional Law Section 290.
The Supreme Court of North Carolina has passed upon the validity of the ordinance here involved and upheld it as a valid exercise of state constitutional and statutory authority. This decision is binding here as to the ordinance being within the city's charter power and not forbidden by the state constitution. Hadacheck v. Sebastian, 239 U.S. 394, 36 S. Ct. 143, 60 L. Ed. 348 (1915).
The ordinances and statutes in question here are neither unreasonable nor arbitrary and, therefore, are not repugnant to the federal Constitution. It is not unconstitutional for a municipality to take upon itself a duty to see that repairs to buildings within its domain will be made in such manner as will prevent fire and structural hazards. This duty it is bound to exercise to protect the safety and health of the general public. To require a permit in order to implement such reasonable supervision is not in violation of any provision of the Constitution of the United States.
Petitioner has failed to show a violation of any of his federal constitutional rights, and, for this reason, his petition will be, and hereby is, dismissed.
NOTES
[*] Sworn in as United States Circuit Judge, Fourth Circuit, on July 5, 1966, and designated to sit as United States District Judge in the Western District of North Carolina to complete matters pending at time of appointment.
[1] The state took a different position before this court. It was conceded orally that petitioner could lawfully repair his propertyif only he would seek and obtain a permit. The variance is not material.
[2] The judgment of the Mecklenburg County Superior Court was as follows: "It is the Judgment of the Court that the Defendant be confined to the common jail of Mecklenburg County for a period of thirty (30) days to be assigned to work under the supervision of the State Prison Department, as provided by law. The foregoing prison sentence is SUSPENDED on condition that the defendant within thirty (30) days from this date comply with all the provisions of the City Building Code and Housing Code and shall pay the costs of this action."
By an order filed May 13, 1966, this court stayed the execution of the judgment pending final determination of the petition for writ of habeas corpus in this court.
[3] There was some intimation during oral argument that if he would apply for a permit it would probably be granted nunc pro tunc.
|
Clark L. Bush was cited for failure to maintain the assured clear distance ahead in violation of R.C. 4511.21(A) following an automobile collision involving his vehicle and a vehicle driven by Jeffrey Phillips. Bush pleaded not guilty and proceeded to trial before a magistrate in the Vandalia Municipal Court, Traffic Division. He was found guilty, received a fine, which was suspended, and was ordered to pay court costs. He now appeals.
The evidence presented at Bush's October 1, 1998 trial was as follows.
Jeffrey Phillips testified that, during the afternoon of August 13, 1998, he had been traveling north on Wagoner Ford Road with his wife, Angela Phillips, and his two children. Phillips stopped for a red light at the intersection of Wagoner Ford Road and Needmore Road, looked both ways, and saw no oncoming traffic in the eastbound curb lane ("the right lane") of Needmore Road. Phillips started to make a right turn on red and got halfway through the turn when he looked in his rear view mirror and noticed Bush's car "change lanes in the middle of the intersection to the right lane." Bush tried to move back into the left lane to avoid a collision with Phillips's car, but Bush ran into the rear driver's side of Phillips's car when Phillips's car was approximately five feet west of the intersection.
Angela Phillips testified that she had checked the right lane of Needmore Road for oncoming traffic before her husband had started to turn and that the right lane had been clear. She stated that she had not seen Bush's car approaching the intersection.
Sheriff Deputy Jeanine Whittaker testified that she had been dispatched to the scene of the accident, had taken witness reports from Bush and Jeffrey and Angela Phillips, and had issued a citation to Bush for failure to maintain an assured clear distance ahead. According to Deputy Whittaker, Phillips told her that Bush had changed lanes in the middle of the intersection and Bush told her that "he didn't recall where exactly he changed lanes and he did not see Mr. Phillips pulling out prior to him doing all of this."
Bush testified that he had been traveling east on Needmore Road and that, at least one hundred feet away from the intersection of Needmore Road and Wagoner Ford Road, he had moved into the right lane to pass a car in front of him. He testified that he had been about fifty feet away from the intersection when he first noticed Phillips's vehicle and that he had immediately applied his brakes and had tried to swerve left to avoid a collision but "there was no way to avoid him." Bush denied that he had changed lanes in the middle of the intersection.
On October 26, 1998, the magistrate found:
Based on the fact that Defendant was traveling with his headlights on, the clear weather conditions and the corroboration of Mr. Phillips' testimony by his wife, this Court finds that the Defendant moved to the right-hand lane just short of, or at the juncture where Wagner Ford intersects Needmore. Upon seeing Mr. Phillips' car, Defendant pulled left to try and avoid the collision, but was unable to. In short, Mr. Phillips did not suddenly emerge so as to cut down Defendant's assured clear distance. Rather, Mr. Phillips was established in his lane of travel when struck from behind by Defendant who had just changed lanes.
Under these facts, the Court finds the State has proven beyond a reasonable doubt that the Defendant violated the Assured Clear Distance Statute.
The magistrate fined Bush $100, suspended the fine, and ordered him to pay court costs. On November 6, 1998, Bush filed objections to the magistrate's decision and a request for more specific factual findings and legal conclusions. On December 21, 1998, Bush filed a supplemental memorandum in support of his objections. On February 1, 1999, the trial court overruled Bush's objections, concluding that "there is sufficient evidence in the record to establish beyond a reasonable doubt those elements requisite to an Assured Clear Distance violation" and that the sudden emergence doctrine, an exception to the assured clear distance provision, did not apply. On March 1, 1999, Bush filed a notice of appeal, and he raises three assignments of error.
I. DEFENDANT-APPELLANT WAS UNFAIRLY PREJUDICED WHEN THE MAGISTRATE FAILED TO FILE AN AMENDED MAGISTRATE'S DECISION PURSUANT TO OHIO RULE OF CIVIL PROCEDURE 53(E)(2).
Bush argues that Civ.R. 53(E)(2) required the magistrate to file an amended decision in response to his objections.
Traf.R. 14(A) provides that a defendant may elect to appear for trial before a magistrate. Objections to the magistrate's decision may be filed pursuant to Civ.R. 53(E)(3). Traf.R. 14(C). A party may request findings of fact and conclusions of law under Civ.R. 52. Civ.R. 53(E)(3). "The ultimate test of the adequacy of findings of fact is whether they are sufficiently comprehensive and pertinent to the issue to form a basis for the decision reached." Quality Supply Co. v. D's Drive Thru (Oct. 25, 1996), Montgomery App. No. 15862, unreported. If objections are filed, the trial court must consider the objections pursuant to Civ.R. 53(E)(4)(b). Traf.R. 14(C).
In this case, the magistrate's decision included findings of fact and conclusions of law apprising Bush of the grounds for the decision. Although Bush claims that he was prejudiced by the magistrate's failure to amend its decision to add more specific factual findings and legal conclusions, in our judgment, the magistrate's decision adequately explained the rationale for concluding that Bush had failed to maintain an assured clear distance ahead. Furthermore, Bush described the incident in detail and discussed the assured clear distance rule and the sudden emergence doctrine in his objections to the magistrate's decision, and the trial court reviewed the trial transcript, the magistrate's decision, and Bush's objections. Thus, it does not appear that Bush was prejudiced in presenting his objections to the trial court or that the trial court was unable to review the magistrate's decision due to the lack of adequate findings and conclusions.
The first assignment of error is overruled.
II. THE TRIAL COURT ERRED TO DEFENDANT'S PREJUDICE WHEN IT APPLIED THE ASSURED CLEAR DISTANCE AHEAD RULE TO THE FACTS INSTEAD OF ANALYZING THE FACTS WITH REFERENCE TO THE RIGHT-OF-WAY STATUTE WHERE THE FACTS CLEARLY SHOW THAT DEFENDANT-APPELLANT HAD THE RIGHT-OF-WAY AND THAT DEFENDANT-APPELLANT WAS TRAVELING IN A LAWFUL MANNER SO AS TO NOT FORFEIT SUCH RIGHT.
III. THE TRIAL COURT IMPROPERLY APPLIED THE ASSURED CLEAR DISTANCE AHEAD RULE.
Bush contends that the trial court erred in finding him in violation of the assured clear distance statute when Phillips had suddenly emerged into his lane of travel.
R.C. 4511.21(A) provides that "no person shall drive any motor vehicle * * * in and upon any street or highway at a greater speed than will permit the person to bring it to a stop within the assured clear distance ahead." In Erdman v. Mestrovich (1951), 155 Ohio St. 85,92, the supreme court stated:
The violation of the assured-clear-distance rule consists of the operation of a motor vehicle at a greater speed than will permit the operator thereof to bring it to a stop within the assured clear distance ahead, unless such assured clear distance ahead is, without his fault, suddenly cut down or lessened by the entrance within such clear distance and into his path or lane of travel, of an obstruction which renders him unable, in the exercise of ordinary care, to avoid colliding therewith.
A driver with the right of way approaching and crossing an intersection has an "absolute right to proceed uninterruptedly" in a lawful manner, and other drivers must yield to him. Vavrina v. Greczanik (1974),40 Ohio App. 2d 129, 135. The driver with the right of way forfeits his preference over other drivers by failing to proceed in a lawful manner.Id. at 135. A driver proceeds in a lawful manner by complying with Ohio traffic laws. Id. at 136.
Bush's defense at trial was that he had had the right of way and had been operating his vehicle in a lawful manner while approaching the intersection and that Phillips, who had been obligated to yield the right of way, had suddenly entered his lane of travel and had made it impossible for him to avoid a collision. The trial court found, however, that after Phillips had looked to his left for any oncoming traffic in the right lane of Needmore Road and had seen that the lane was clear, Bush had "suddenly changed lanes into the right-hand lane, only to find himself confronted with the Phillips' vehicle directly in front of him, which he was then unable to avoid striking." The trial court stated that once Bush had merged into the right lane, "he was then under a duty to adjust his assured clear distance ahead to the circumstances then existent in the right-hand lane."
Bush acknowledges a conflict in the evidence over the location at which he began to merge into the right lane, and he claims that the trial court erred in believing the testimony of Jeffrey and Angela Phillips that the right lane had been clear when they began to turn instead of his testimony that he had merged into the right lane at least one hundred feet away from the intersection. "Weight of the evidence concerns `the inclination of thegreater amount of credible evidence, offered in a trial, to support one side of the issue rather than the other.'" State v.Thompkins (1997), 78 Ohio St. 3d 380, 387, citing Black's Law Dictionary (6 Ed. 1990) 1594. When a judgment is challenged as being against the weight of the evidence, we review the entire record, weigh the evidence and all reasonable inferences, consider witnesses' credibility, and determine whether the factfinder clearly lost its way in resolving the conflicting evidence. Id. at 387, quoting State v. Martin
(1983), 20 Ohio App. 3d 172, 175. The factfinder's determination of witness credibility is to be afforded substantial deference by an appellate court because the factfinder is in the best position to decide "whether, and to what extent, to credit the testimony of particular witnesses." State v. Lawson (Aug. 22, 1997), Montgomery App. No. 16288, unreported. Based on the testimony of Jeffrey and Angela Phillips that the right lane had been clear when they pulled into the intersection and Deputy Whittaker's testimony that Bush had told her that he did not remember when he had merged into the right lane, the trial court acted reasonably in finding that Bush had suddenly merged into the right lane at or near the intersection. Because it was reasonable to conclude that Bush had driven in an unlawful manner by failing to adjust his speed upon merging into the right lane, the trial court did not err in finding Bush guilty of failure to maintain an assured clear distance ahead.
The second and third assignments of error are overruled.
The judgment of the trial court will be affirmed.
GRADY, P.J. and YOUNG, J., concur.
Copies mailed to:
Joe Cloud
Barry S. Galen
Hon. Richard J. Bannister |
MEMORANDUM OPINION
No. 04-08-00232-CV
Aida MANUKYAN,
Appellant
v.
Artyom GRIGORYAN,
Appellee
From the 131st Judicial District Court, Bexar County, Texas
Trial Court No. 2007-CI-11450
Honorable Barbara Hanson Nellermoe, Judge Presiding
Opinion by: Catherine Stone, Justice
Sitting: Alma L. López, Chief Justice
Catherine Stone, Justice
Sandee Bryan Marion, Justice
Delivered and Filed: September 10, 2008
AFFIRMED
Appellant, Aida Manukyan, appeals from a final decree of divorce that incorporated a
mediated settlement agreement between herself and appellee, Artyom Grigoryan. Manukyan's sole
appellate complaint challenges the enforceability of one of the terms of the parties' mediated
settlement agreement. We affirm.
Manukyan and Grigoryan entered into a mediated settlement agreement specifying the
division of their marital estate. In the typewritten portion of the mediated settlement agreement, the
parties provide:
The undersigned parties . . . agree to compromise and settle the claims and
controversies between them including all claims and controversies between them
regarding the dissolution of their marriage . . . The parties stipulate that the
agreements set forth herein constitute a just and right division of their marital estate.
The parties also agree that this stipulation and Agreement shall not be revoked by
either of them.
This Agreement . . . was made voluntarily and with the advice and consent of
counsel.
THIS AGREEMENT IS NOT SUBJECT TO REVOCATION.
This Mediated Settlement Agreement is binding on the parties and is not subject to
revocation. A party is entitled to judgment on this Agreement notwithstanding Rule
11, Texas Rules of Civil Procedure, or any other rule of law.
Following the typewritten portion of the agreement appear two handwritten provisions. These
handwritten provisions provide that "[t]his matter is settled per the terms of Ex[hibits] 'A, B[,] &
C'" and recognize that the parties were granted a divorce by an Armenian court on August 13, 2007. (1)
The mediated settlement agreement concludes with the signatures of Manukyan, Grigoryan, and both
of their attorneys.
Grigoryan subsequently filed a motion asking the trial court to enter a divorce decree
incorporating the terms of the parties' mediated settlement agreement. At the hearing on Grigoryan's
motion, Manukyan objected to the court's incorporation of the handwritten portion of the parties'
settlement agreement pertaining to the couple's Armenian divorce. According to Manukyan, she was
not fully informed of this provision prior to executing the final settlement agreement. The trial court
rejected Manukyan's contention and signed the divorce decree incorporating all of the terms of the
mediated settlement agreement.
Manukyan claims on appeal that the handwritten portion of the parties' mediated settlement
agreement referring to the couple's prior Armenian divorce is unenforceable because she was not
fully informed that it was going to be part of the parties' final settlement agreement. Manukyan,
however, is barred by statute and the language of the mediated settlement agreement from disturbing
the contents of the parties settlement agreement on appeal. The mediated settlement agreement
executed by Manukyan and Grigoryan meets all of the statutory requirements to be binding on the
parties. See Tex. Fam. Code Ann.§ 6.602(b) (Vernon 2006) ("A mediated settlement agreement
is binding on the parties if the agreement: (1) provides, in a prominently displayed statement that is
in boldfaced type or capital letters or underlined, that the agreement is not subject to revocation; (2)
is signed by each party to the agreement; and (3) is signed by the party's attorney, if any, who is
present at the time the agreement is signed."). Both Manukyan and Grigoryan signed the settlement
instrument, both parties' counsel signed it, and the instrument contained the requisite statutory
warning. See id. Further, we are unpersuaded by Manukyan's contention because the record reveals
that the disputed portion of the mediated settlement agreement was added to the settlement
instrument prior to its execution by Manukyan and Grigoryan; thus, Manukyan had the opportunity
to consult with her attorney about the implications of the settlement terms before she signed the final
settlement agreement. Accordingly, we reject Manukyan's complaint and overrule her sole issue on
appeal. See Carson v. Carson, No. 03-04-00521-CV, 2005 WL 2978343, *1 (Tex. App.--Austin
2005, no pet.) (mem. op.) (rejecting appellant's complaint that she was not fully informed of the
financial implications of the agreed upon distribution of property where appellant was represented
by counsel and the mediated settlement agreement signed by appellant met all of the statutory
requirements to be binding on the parties).
The judgment of the trial court is affirmed.
Catherine Stone, Justice
1. Three sets of initials appear next to the handwritten provisions of the mediated settlement agreement:
Grigoryan's; Grigoryan's attorney's; and Manukyan's attorney's. While Manukyan's initials do not appear next to
the handwritten provisions, it is undisputed by the parties that the handwritten provisions were added to the mediated
settlement agreement prior to Manukyan and Grigoryan executing the instrument.
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MCGREGOR W. SCOTT
United States Attorney
KATHERINE SCHUH
Assistant United States Attorney
2500 Tulare Street, Suite 4401
Fresno, CA 93721
Telephone: (330)491-3051
Facsimile: (330)491-3051
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IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA
Attorneys for Plaintiff
United States of America
UNITED S_TATES OF AMERICA,
Plaintiff,
v.
MANUEL MONTENEGRO, ET AL.,
Defendants.
CASE NO: l:19-MJ-00014-EPG
ORDER TO UNSEAL CRIMINAL COMPLAINT
Upon application of the United States of America and good cause having been shown,
IT IS HEREBY ORDERED that the criminal complaint, affidavit, and other case documents in
the above-captioned matters be, and are, unsealed
Dated: …l/_[{la“;<§¥ 7/9 2:0 Ij
_` [FROPOSED] ORDER To UNSEAL CRIMINAL
CoMPLAINT
fn 1…
The Honorable Sheila K. O`Berto’
UNITED STATES MAGISTRATE JUDGE
|
732 F.2d 593
FLORIDA RISK PLANNING CONSULTANTS, INC., Plaintiff-Appellant,v.TRANSPORT LIFE INSURANCE COMPANY, et al., Defendants-Appellees.
No. 83-1007.
United States Court of Appeals,Seventh Circuit.
Argued June 1, 1983.Decided April 20, 1984.
Michael P. Connelly, Law Offices of Michael P. Connelly, Ltd., Chicago, Ill., for plaintiff-appellant.
Thomas P. Battistoni, Schiff, Hardin & Waite, Chicago, Ill., for defendants-appellees.
Before ESCHBACH and COFFEY, Circuit Judges, and CELEBREZZE, Senior Circuit Judge.*
ESCHBACH, Circuit Judge.
1
The issue presented is whether the plaintiff is entitled to commissions for procuring insurance business for the defendants. Because the plaintiff is not a licensed insurance agent for the defendants, we hold that commissions may not be recovered. Accordingly, we affirm the district court's grant of summary judgment in favor of the defendants.
I.
2
The plaintiff, Florida Risk Planning Consultants ("FRP"), is an organization that produces insurance business. Beginning in 1973, FRP acted as an agent for the Zurich Insurance Company in the production of cancer-expense policies. According to FRP's version of events, which is supported by documents filed in response to the defendants' motions for summary judgment, Transport Life Insurance Company ("Transport") expressly assumed Zurich's obligations in 1976; thus Transport became obligated to pay commissions owing to FRP for work performed on behalf of Zurich.
3
An entity based in Chicago and known as Center Insurance Agency ("CIA") then began to play a prominent role in this case. CIA had an arrangement with Transport whereby CIA administered the Zurich business. Thus CIA acted as a conduit between FRP and Transport. FRP contends that Transport, acting through CIA, requested FRP to promote and service two other products--a new cancer policy and an accident policy. A similar request was made through CIA by an insurer called All American Life and Casualty Company ("All American"). FRP acceded to both requests and produced business across the nation for both Transport and All American.
4
To this point, we have stated that FRP "produced business" or "promoted" insurance. A more detailed account is required to resolve the issue whether FRP acted as an unlicensed insurance agent. We therefore turn to that description with the understanding that FRP performed the same functions for Transport, All American, and Zurich.
5
The district court stated that "FRP acted in the classic salesman mode." FRP, however, did not focus its efforts directly on individual insureds. Rather, the policies that FRP promoted were group policies. FRP's employees thus directed their activities toward the leaders of associations such as auto clubs. FRP sent unsolicited mailings, sought appointments with association executives, and traveled the country attempting to interest the associations in the policies. A letter sent by an FRP employee to an auto club president in 1973 is typical:
6
Just to put in writing what we will do: Mail to all Master Members twice, thirty days apart, and everything else necessary to make the program a real success, at no expense to you.
7
* * *
8
* * *
9
The record shows that this Cancer Expense Plan is a success in AAA Clubs. The results of member's acceptance and their appreciation at claim time speaks loud and clear that members feel this protection, at group rates, is a service to them.
10
If FRP's efforts were successful, the association would apply for a group or "master" policy. FRP would transmit the application to CIA; when issued, the master policy would be returned to FRP to deliver to the association.
11
For each association an individual was designated as a "subagent" of FRP. This subagent, who was closely connected to the association, was responsible for personally soliciting members. FRP, however, did not remain uninvolved with individual solicitations. Among other things, FRP prepared solicitation materials, stuffed envelopes, and mailed individual solicitation forms. Furthermore, in many instances, initial premiums were sent to FRP for transmittal to CIA.
12
FRP and the designated subagents, of course, did not volunteer their services. Commissions based on the amount of premiums collected were paid by CIA to FRP, which, in turn, paid commissions to the subagents. The subagents were properly licensed insurance agents; FRP was not.
13
This attenuated system of delivering insurance coverage to individuals collapsed in 1978 with the financial demise of CIA. FRP contends that since July of 1978, it has received no commissions. The precise amount claimed owed has not been quantified. We do know, however, that because Transport and All American have canceled all business that originated through CIA, the amount is not accumulating.
14
In 1979, FRP initiated this diversity suit against Transport and All American. FRP contended that both defendants breached contracts to pay FRP commissions for producing business. FRP alleged that Transport failed to pay commissions pursuant to the express contract made by Zurich Insurance Company in 1973 and assumed by Transport in 1976. Both defendants were charged with breaching implied contracts made in 1976 when the defendants asked FRP to promote their products.
15
The district court granted the defendants' motions for summary judgment. The court's decision was based on a combination of two grounds: (1) FRP, as an unlicensed insurance agent, is not entitled to receive commissions, and (2) no implied contracts were created. Disagreeing with both grounds, FRP appeals.
II.
16
We must follow Illinois's conflict-of-laws rules to choose the substantive law applicable in this case. See Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941). The Illinois courts have adopted the rules of the Restatement (Second) of Conflicts (1971). See Champagnie v. O'Neil Construction Co., 77 Ill.App.3d 136, 32 Ill. Dec. 609, 395 N.E.2d 990 (1979) (contract case); see also Ingersoll v. Klein, 46 Ill. 2d 42, 262 N.E.2d 593 (1970) (tort case); Ford v. Newman, 64 Ill.App.3d 528, 21 Ill. Dec. 283, 381 N.E.2d 392 (1978) (trust case); accord American National Bank & Trust Co. of Chicago v. Weyerhaeuser Co., 692 F.2d 455, 460 n. 10 (7th Cir.1982) (Illinois law). Section 188 defines the general rule that, in contract cases, the rights and duties of the parties are determined by the law of the state with the "most significant relationship to the transaction." Because Chicago was the home of CIA, the firm that acted as the connector between the parties, the litigants and the district court agree that Illinois's contract law governs this case.
17
There is a twist in the conflict-of-laws analysis, however, because the defendants assert illegality as a defense. It would make little sense to look only at Illinois law to decide whether FRP's national activities were legal. Fortunately, Sec. 202 of the Restatement (Second) of Conflicts (1971), provides a remarkably clear guide for us to follow. To determine whether FRP acted illegally as an unlicensed insurance agent, we must look to the laws of the 19 states where FRP procured master policies. See id. comment c. If we conclude that FRP did act illegally, we must then examine the contract law of Illinois to determine the effect of the illegality on the enforceability of the alleged contracts. See id.
18
The 19 states where FRP solicited business have licensing statutes governing insurance agents. (See Appendix of State of Law accompanying this opinion.) The statutes vary somewhat, but as FRP's counsel acknowledged at oral argument, "all of them, in the main, say the same thing." Maryland's statute is representative:
19
(b) Agent or broker not to solicit, etc., kinds of insurance for which he is not licensed.--No agent or broker shall solicit or take application for, negotiate, procure or place for others any kind of insurance for which he is not then qualified and licensed.
20
Md.Ins.Code Ann. Sec. 167 (1979).
21
We hold that FRP's solicitation of applications for master policies fell squarely within this prohibition. As FRP maintained in its original complaint, "plaintiff actively solicited for and placed with Transport [and All American] a large number of applications which resulted in the issuance of policies of insurance." The issuance of a master policy was a very significant event; no member of the group could be insured without the association first obtaining a master policy that set the benefits and premiums applicable to individual insureds. Indeed, the Illinois Supreme Court has stated that "[t]he master policy is the primary contract and must be looked to first in construing group insurance policies." Hofeld v. Nationwide Life Insurance Co., 59 Ill. 2d 522, 527, 322 N.E.2d 454, 457 (1975).
22
In any event, we believe that FRP acted as an unlicensed agent in relation to the individual insureds. Examining the more specific statutes for evidence of the intent of all the licensing laws, we find that four states (Florida, Iowa, Oregon, South Dakota) prohibit unlicensed agents from soliciting applications "directly or indirectly." Moreover, four other states (Indiana, Maryland, Minnesota, West Virginia) require a license before an agent aids "in any manner" in soliciting applications for insurance. At the least, FRP indirectly, and in some manner, solicited individual applications; FRP prepared and mailed solicitation materials. Furthermore, in collecting initial premiums, FRP was explicitly subject to the licensing laws of Hawaii and Texas.
23
We find patently irrelevant FRP's assertion that the contracting parties never believed the licensing laws applied to FRP's activities. Although the parties' understandings might prove helpful in construing the alleged contracts, they provide no support for a particular interpretation of state statutes.
24
Having held that FRP performed illegally as an unlicensed insurance agent, the result under Illinois law is clear: commissions may not be recovered. See Bicek v. Royall, 307 Ill.App. 504, 30 N.E.2d 747 (1940); Ill.Rev.Stat. ch. 73, Sec. 1065.40 (1983). Indeed the Illinois position is in line with the law of the vast majority of jurisdictions. See, e.g., Fewel & Dawes, Inc. v. Pratt, 17 Cal. 2d 85, 109 P.2d 650 (1941); Cook v. Underwriters National Assurance Co., 221 So. 2d 18 (Fla.Dist.Ct.App.1969); Black Motor Co. v. Baughman & Datron Insurance Agency, 290 Ky. 163, 160 S.W.2d 388 (1942); Chick Coker Pontiac, Inc. v. Home Indemnity Co., 499 P.2d 441 (Okl.1972); contra Association Group Life, Inc. v. Catholic War Veterans of the United States, 120 N.J.Super. 85, 293 A.2d 408 (1971). The Illinois cases that FRP cites, see, e.g., South Center Plumbing & Heating Supply Co. v. Charles, 90 Ill.App.2d 15, 234 N.E.2d 358 (1967), are inapposite in that they did not involve violations of licensing laws. See Lavine Construction Co. v. Johnson, 101 Ill.App.3d 817, 57 Ill. Dec. 389, 428 N.E.2d 1069 (1981) (surveying Illinois contract cases involving the illegality defense). Although Illinois's contract law might excuse some types of illegal performance, violations of licensing laws consistently render compensation contracts unenforceable. See, e.g., Lozoff v. Shore Heights, Ltd., 66 Ill. 2d 398, 6 Ill. Dec. 225, 362 N.E.2d 1047 (1977) (unlicensed practice of law); Central National Bank in Chicago v. Alexander Marketing, Inc., 47 Ill.App.3d 58, 5 Ill. Dec. 443, 361 N.E.2d 766 (1977) (unlicensed real estate agent); Tovar v. Paxton Community Memorial Hospital, 29 Ill.App.3d 218, 330 N.E.2d 247 (1975) (unlicensed physician).
25
Finally, Transport and All American are not estopped from raising the illegality defense. See Fewel & Dawes, Inc. v. Pratt, 17 Cal. 2d 85, 109 P.2d 650 (1941); see generally 16B J. Appelman, Insurance Law and Practice Sec. 8971 (1981); 4 R. Anderson, Couch on Insurance Sec. 26:384 (2d ed. 1960). Indeed, were estoppel to apply, the rule denying enforcement of contracts performed in violation of a licensing statute would be a law without application. If, as FRP contends, the district court's judgment is "incompatible with basic principles of equity," its complaint is not with us but, rather, the Illinois courts and legislature.
III.
26
For the reasons expressed in this opinion, and without commenting on FRP's claim that implied contracts were created, the district court's judgment is affirmed.
APPENDIX OF STATE LAW
27
The licensing statutes of the 19 states where FRP solicited business are codified at:
28
Ala.Code Secs. 27-8-1 to 27-8-15 (Supp.1983)
29
Cal.Ins.Code Secs. 1631-1651 (West 1972 & Supp.1984)
D.C.Code Ann. Sec. 35-1301 (1981)
30
Fla.Stat.Ann. Secs. 626.011 to 626.711 (West 1972 & Supp.1983)
31
Haw.Rev.Stat. Secs. 431-361 to 431-407 (1976 & Supp.1982)
32
Ind.Code Ann. Secs. 27-1-15.5-1 to 27-1-15.5-18 (Burns Supp.1983)
33
Iowa Code Ann. Secs. 522.1 to 522.5 (West Supp.1983)
34
Ky.Rev.Stat.Ann. Secs. 304.9-010 to 304.9-460 (Bobbs-Merrill 1972 & Supp.1982)
Md.Ins.Code Ann. Secs. 165 to 179 (1979)
35
Mich.Comp.Laws Ann. Secs. 500.1200 to 500.1744 (West 1983)
36
Minn.Stat.Ann. Sec. 60A.17 (West Supp.1984)
37
N.J.Stat.Ann. Secs. 17B:22-1 to 17B:22-35 (West Supp.1983)
38
Ohio Rev.Code Ann. Secs. 3905.01 to 3905.99 (Page 1971 & Supp.1982)
39
Okla.Stat. tit. 36, Secs. 1421 to 1433 (1981)
40
Ore.Rev.Stat. Secs. 744.000 to 744.265 (1983)
41
S.D.Comp.Laws Ann. Secs. 58-31-1 to 58-31-37 (1978)
42
Tenn.Code Ann. Secs. 56-6-101 to 56-6-307 (1980 & Supp.1983)
43
Tex.Ins.Code Ann. art. 21.07A (Vernon 1981)
W.Va.Code Secs. 33-12-1 to 33-12-28 (1982)
*
The Honorable Anthony J. Celebrezze, Senior Circuit Judge for the Sixth Circuit, sitting by designation
|
United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT February 14, 2007
Charles R. Fulbruge III
Clerk
No. 05-50420
Conference Calendar
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ARTURO OCHOA-RUIZ,
Defendant-Appellant.
--------------------
Appeal from the United States District Court
for the Western District of Texas
USDC No. 4:04-CR-269-ALL
--------------------
Before BARKSDALE, GARZA, and CLEMENT, Circuit Judges.
PER CURIAM:*
Counsel appointed to represent Arturo Ochoa-Ruiz (Ochoa) has
moved for leave to withdraw and has filed a brief in accordance
with Anders v. California, 386 U.S. 738 (1967). Ochoa has not
filed a response. Our independent review of counsel’s brief and
the record discloses no nonfrivolous issue for appeal.
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.
*
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.
|
This suit was originally filed by S. T. Cheatham against Mrs. M. Fuerstenberg, the surviving widow of J. C. Fuerstenberg, deceased, and against their ten children, and joined as defendants J. L. Cromartie, W. B. White, and H. B. Hill.
The action is in the form of trespass to try title, and is brought to recover the south 82 acres of section 32 in block H, A. B. M. surveys in Hall county.
After the suit was filed, the plaintiff in error Williams, by mesne conveyances, acquired Cheatham's title, and the case was tried upon the plaintiff's first amended petition.
The defendants Cromartie, Hill, and White answered, alleging that they were tenants of certain portions of section 32. The Fuerstenbergs answered by general demurrer, general denial, plea of not guilty, and pleas of limitation of 3, 5, 10, and 25 years. Plaintiff filed a supplemental pleading, setting up the insanity of some of his predecessors in title in avoidance of the pleas of limitation.
The record shows that the 82 acres involved in this action are a part of section 32, in block H, A. B. M. surveys, and that section 39, owned by the Fuerstenbergs, is in block H, B. S. F. surveys, and that section 39 lies south of and adjacent to section 32. It further appears that the north line of section 39 and the south line of section 32 are identical, and no issue is raised as to the true boundary line of the two sections. No issue is made upon the sufficiency of the pleadings.
The case was submitted to a jury upon special issues, which, together with the answers, are, in substance, as follows:
(1) We find from a preponderance of the evidence that the defendants and their predecessors in title had peaceable and adverse possession of the land sued for by plaintiff, cultivating, using, and enjoying the same for ten consecutive years or more previous to the institution of this suit on July 6, 1925.
(2) The defendants and their predecessors in title were in peaceable and adverse possession of the land in controversy, cultivating, using, and enjoying the same prior to November 28, 1904.
(3) The defendants and their predecessors in title, after being in peaceable and adverse possession of the land, using, cultivating, and enjoying it prior to November 28, 1904, continued in such peaceable and adverse possession, cultivating, using, and enjoying it for a period of ten consecutive years.
In accordance with the verdict, the court entered judgment for the defendants.
The first proposition is based upon the action of the court in sustaining the objections of defendants in error to the introduction of a written agreement, signed by "Rev. M. Fuerstenberg, Administrator, Estate of J. C. Fuerstenberg, Deceased," as party of the first part, and "H. A. McCanne, Guardian, Estate of Joe, Tommy and Willie Anderson, Persons of Unsound Mind." The writing in question recites that it is a memorandum of agreement entered into by and between M. Fuerstenberg, administrator of the estate of J. C. Fuerstenberg, deceased, and H. A. McCanne, guardian of the three Andersons, persons of unsound mind. It further recites, in effect, that the Fuerstenbergs are owners of section 39 and that the Andersons are the owners of section 32, and, "whereas, the fence dividing the said sections of land is not located at the proper place between said sections, it is especially agreed that in order to locate the division lines and fences between said sections of land, the County Surveyor of Hall County shall begin at the southeast corner of section 39 in said block `H' and run north 1921.5 vrs., and locate a line for fence between said sections of land, thence, west 1958.6 vrs., and establish the northwest corner of section 39 and the southwest corner of section 32 and the line thus run as above directed shall be the division line between said two sections of land."
The defendants objected to the introduction of this evidence for the reason that it was not binding upon any of the defendants, either the wife or children of J. C. Fuerstenberg, deceased, except upon M. Fuerstenberg, because the said M. Fuerstenberg was a foreign administrator or executor under a will; that there was no administration of the estate in Texas; that the will had never been filed or probated in the state, for which reason M. Fuerstenberg, being a foreign administrator, had no power or authority over land in Texas; and, further, because the instrument was obtained by fraud and misstatement as to the true conditions.
We think these are specific objections, but if considered as a general objection interposed in behalf of all defendants, the court correctly excluded the instrument. Appellant did not at any time offer the instrument as evidence against M. Fuerstenberg alone. Where evidence is admitted over an objection to the same as a whole, a part of such evidence being admissible and a part inadmissible, no reversible error is committed. It is also the rule that where evidence is offered as a whole, only a part of which is admissible, the court does not commit error in sustaining an objection to such testimony. In such case, it is not the duty of the court, nor of the party objecting to the evidence, to separate the admissible from the inadmissible portions. M., K. T. Ry. Co. of Texas v. Washburn (Tex.Civ.App.) 184 S.W. 580.
Judge Boyce correctly states the rule in P. S. F. Ry. Co. v. Cowan (Tex.Civ.App.) 243 S.W. 912, when he says:
"This rule works both ways in the protection of the trial court. If an instrument containing admissible and inadmissible evidence is offered and objected to as a whole, there is no reversible error, whether the instrument be admitted or rejected."
The same rules apply when testimony *Page 815
is offered against several defendants and is admissible as against only one of them. If the court sustains an objection to it when offered against all defendants, it then becomes the duty of the offerer to offer it against the particular defendant or defendants who may be properly bound by it. Berger v. Kirby (Tex.Civ.App.) 135 S.W. 1122; Sullivan v. Fant (Tex.Civ.App.) 160 S.W. 612; Magee v. Paul (Tex.Civ.App.)159 S.W. 325, 332.
We think the objection urged that it was inadmissible because M. Fuerstenberg was a foreign administrator was properly sustained. A foreign administrator has no extraterritorial authority. Faulkner v. Reed (Tex.Com.App.) 241 S.W. 1002, 1007. As said in Hare v. Pendleton (Tex.Civ.App.) 214 S.W. 948, 953 (5 and 6):
"Whatever powers an executor or administrator appointed in one state may exercise over property situated in another state is governed by the laws of the latter state on that subject. Each state has the absolute power to control the administration of the property of decedents situated within its own borders. Our laws do not confer upon one holding a foreign appointment as executor or administrator authority to perform any official act in this state, either in controlling property belonging to the decedent, or in forceably collecting debts due the estate. The only recognition accorded to such representatives by our statute is a preference in receiving an appointment in this state when application is made therefor in order to get possession of property situated within our borders. * * * But that preference is not administrative power; it is a mere privilege to be invoked when the power is applied for. The power must come from the appointment by the proper tribunal in this state and a qualification of the appointee according to our local law. As held in the case of Webster v. Clark [Clarke] above referred to [100 Tex. 333,99 S.W. 1019, 123 Am. St. Rep. 813], even the recording of a foreign will in Texas confers upon the party named therein as executor no authority to act as such with reference to property of the decedent in this state."
Even domiciliary administrators, guardians ad litem and the like, can make no admissions adversely affecting the title of the estates represented by them. Gilbert v. Odum et al., 69 Tex. 670, 7 S.W. 510; Gersdorff v. Torres (Tex.Com.App.) 293 S.W. 560; 2 Jones on Evidence (2d Ed.) 1732, 17891791. For a stronger reason, a foreign administrator who has not complied with the requirements of articles 3365 and 3366 and is not duly qualified as an administrator under the statutes of this state can make no admissions which would affect the property of the estate or the interests of the heirs residing in another jurisdiction. What is here said is applicable to the authority of McCanne, the guardian of the non compos mentis Andersons at the time he entered into the agreement with M. Fuerstenberg to let the county surveyor of Hall county establish the boundary line between the two sections of land. Admissions of a tenant in common are not admissible against his cotenant. 2 Jones on Evidence (2d Ed.) 1733. The fact that the agreement provides that the county surveyor must find the location of the dividing line shows that neither party had any actual knowledge where the true boundary line between the surveys was really located upon the ground and admissions which are mere matters of opinion or hearsay are not to be received. Austin Electric Co. v. Faust (Tex.Civ.App.) 133 S.W. 449; 22 C.J. 299, 407.
No fraud is shown in connection with the execution of this instrument.
We find three large blueprint maps inclosed in a separate envelope among the papers of this case, but they are in no way attached to the statement of facts and are not authenticated either by counsel or the trial judge. In this condition they cannot be considered as a part of the statement of facts, and are stricken from the files. Norwood v. McMillian (Tex.Civ.App.) 278 S.W. 331.
By several propositions, the appellant attacks the charge of the court. No objections were made to the charge, nor did appellant request the court to give any special charges or submit any special issues. Having failed to present to the court more accurate definitions of adverse possession and peaceable possession than those given, appellant has waived the defects, if any, in the court's charge, and cannot be heard to complain here. R.S. arts. 2185, 2186, 2237(3); Petty v. Griffin (Tex.Civ.App.) 241 S.W. 252; Gulf, C. S. F. R. Co. v. Conley,113 Tex. 472, 260 S.W. 561, 32 A. L. R 1183: Isbell v. Lennox,116 Tex. 522, 295 S.W. 920; King v. Stamford Mut. Life Ins. Ass'n (Tex.Civ.App.) 8 S.W.2d 560.
The next contention to be considered is that the court erred in assuming that this suit was filed originally on July 6, 1925, in submitting the first special issue. The original petition is not in the transcript, but the date of the filing of the suit was not controverted, and it is unnecessary to cite authorities sustaining the proposition that the court may in the charge assume uncontroverted facts.
"Notice will uniformly be taken by a court of its own records in the case at bar and all matters patent on the face of the records, including all prior proceedings in the same case." 15 R.C.L. 1133. "Courts will take judicial notice of their own records in the case where it is proper to invoke such notice * * * that is to say, such records need not, if relevant, be introduced in evidence, but will, when produced and identified on the inspection of the judge or by evidence, be accepted by the court as establishing their own existence, indorsements on them and other *Page 816
facts which such records purport to state, as that a certain case or appeal is pending, that a claim is or is not barred by the statute of limitation," etc. 23 C.J. 109, § 1917. "In a case on trial in any court, its records are actually or constructively before the judge. He will therefore take judicial notice of them and of the facts which they establish." 23 C.J. 110, § 1918. In the note to the text just quoted, numerous cases are cited holding that courts take judicial notice of the date of the institution of the suit as it appears from the record or file marks on the papers. See, also, 1 Jones on Evidence (2d Ed.) 764; Castro v. Whitlock, 15 Tex. 437; Connellee v. Witty (Tex.Civ.App.)246 S.W. 716; Blair Hughes Co. v. Short (Tex.Civ.App.) 271 S.W. 199; Covert v. Calvert (Tex.Civ.App.) 287 S.W. 117.
The next proposition is that because the evidence shows that whatever possession was taken of the land was by the tenants of J. C. Fuerstenberg and because no actual possession was ever taken by his widow or children, the verdict is without evidence to support it. The record shows that the tenants of J. C. Fuerstenberg went into possession in 1902, and that Fuerstenberg died on July 4, 1914. If title by inheritance had been acquired by J. C. Fuerstenberg prior to his death, it vested in his heirs and widow at his death. Houston Oil Co. v. Stepney (Tex.Civ.App.)187 S.W. 1078. Title by inheritance is a sufficient link in the chain to sustain a plea of the statute of limitations. Kennon et al. v. Miller et al. (Tex.Civ.App.) 143 S.W. 987; Whitehead v. Foley, 28 Tex. 1.
It further appears without contradiction that James Vardy, who owned section 32, built the fence on the south side of section 32, as near in a straight line as he could; that at the southwest corner of the section, the fence cut off a small corner in order to get water from Baylor Creek; that this is the fence that was on the north side of 39 and the south side of section 32. The bend in the line, according to this witness, was made in order to leave the opening for cattle to pass and for a roadway. About four years thereafter, Jackson Collier, as the agent of J. C. Fuerstenberg, built the fence on the south and west sides of section 39, and these fences, together with the McDowell fence on section 40, completely inclose section 39; and that these fences constitute an inclosure without a break in the occupancy of the section by J. C. Fuerstenberg, through his agents, Collier, Davis, and Turner, until the death of J. C. Fuerstenberg in 1914; that Turner occupied the land at the time of J. C. Fuerstenberg's death, and, upon the death of Turner, it was leased to the defendant Cromartie, who continued to hold possession until the filing of this suit. No attempt was made to controvert the evidence of possession as shown by this testimony, and no witness was introduced by plaintiff in error on this issue. The finding of the jury, therefore, is supported by the evidence.
After Cromartie's tenancy commenced, he erected improvements upon the property, and there has been no break in his possession. The act of taking actual, visible possession of land, inclosing it with fences, using, cultivating, and enjoying it, of itself evidences an intention upon the part of the occupant to appropriate it and as an evidence of a claim of right and an intent by the one who occupies it, either in person or by tenant, to hold it as his own. Such taking is an actual and visible appropriation of the land, commenced and continued under a claim of right wholly inconsistent with the claim of the record owner. Vardy built the fence on his south line, and as the fence on the north line of section 39 in 1898, and that fence was being maintained when Collier completed the fencing of the section in 1902.
Under the ten years' statute of limitations (Rev.St. 1925, art. 5510) a naked trespasser may by entering the land of another without any written evidence of right, acquire title thereto by simply pursuing the terms of the statute, and no further notice of his adverse claim is necessary than his possession, which must be open, notorious, hostile, and visible by cultivating, using, or enjoying in any manner the use to which it may be adapted. Visible, notorious possession under a claim of right against the true owner takes the place of muniments of title. And possession under the statute means actual residence, or cultivating, using, or enjoying the land, such as will give notice to the owner of the adverse holding, and such possession may be by tenant as well as in person. Carlock v. Willard (Tex.Civ.App.) 149 S.W. 365; Krause v. Hardin (Tex.Civ.App.)222 S.W. 311; R.S. art. 5513; Bruce v. Washington, 80 Tex. 368,15 S.W. 1104; Lott v. Dashiell (Tex.Civ.App.) 233 S.W. 1110; Houston Oil Co. v. Choate (Tex.Com.App.) 232 S.W. 285.
A careful review of the facts convinces us that the defendants in error discharged the burden of establishing title under the statute of limitation of ten years. Bowles v. Watson (Tex.Civ.App.) 245 S.W. 120; Philadelphia Trust Co. v. Johnson (Tex.Civ.App.) 257 S.W. 280; Burroughs v. Smith (Tex.Civ.App.) 8 S.W.2d 301; Temple Lbr. Co. v. McFarland (Tex.Civ.App.) 264 S.W. 298.
We find no reversible error in the record, and the judgment is affirmed. *Page 817 |
712 F. Supp. 1360 (1989)
ATWOOD GRAIN & SUPPLY COMPANY, et al., Plaintiffs,
v.
GROWMARK, INC., et al., Defendants.
No. 88 C 7442.
United States District Court, N.D. Illinois, E.D.
May 19, 1989.
*1361 Robert C. Keck, Jr., W. Joseph Thesing, Jr., Wm. B. Hines, Jenner & Block, Chicago, Ill., for plaintiffs.
Duane C. Quaini, Alan S. Gilbert, Roger K. Heidenreich, Sonnenschein Carlin Nath & Rosenthal, Chicago, Ill., Timothy C. Klenk, Terry Satinover, Pope, Ballard, Shepard & Fowle, Ltd., Chicago, Ill., for defendants.
MEMORANDUM OPINION AND ORDER
ZAGEL, District Judge.
Plaintiffs are each shareholders in Growmark, Inc., a Delaware corporation. Plaintiffs, in their individual capacity, seek damages against Growmark and complain that Growmark's Board of Directors fraudulently made decisions involving the sale of corporate assets which reduced the value of plaintiffs' shares, ignored plaintiffs' voting rights and deprived plaintiffs of the Growmark grain marketing system. In their seven count complaint plaintiffs allege that Growmark and Kenneth P. Baer, an officer at Growmark (referred to collectively as "Growmark") violated the Securities Exchange Act of 1934, violated Racketeer Influenced and Corrupt Organizations Act (RICO), engaged in common law fraud, *1362 breached their corporate fiduciary duties, and plaintiffs request that this court establish a constructive trust in their favor. The federal securities claim and the RICO claims are also directed at Archer Daniels Midland Company (ADM), who was the purchaser of some of Growmark's assets.[1]
Defendants each filed a Motion to Dismiss the Complaint on the grounds that plaintiffs 1) lack standing to sue in their individual capacity, 2) lacked any legal right to vote on the transactions effected by Growmark's board, and 3) lacked any legal right to the services they claim to have lost as a result of the transactions.
I. FACTS
A. Background
Each plaintiff is an independent cooperative association which owns grain storage facilities. Each grain facility has farmers who are its members and sell them grain. Plaintiffs, in turn, sell and transport the grain to various regional agricultural cooperatives, such as defendant-Growmark, Inc., of which plaintiffs are members. In addition to membership status, at all relevant times, each plaintiff held one share of Series G Common Stock in Growmark. Before becoming shareholders in Growmark, plaintiffs owned shares in the Illinois Grain Corporation (IGC), an agricultural marketing cooperative which owned seven grain elevators along the Illinois and Mississippi Rivers. IGC was also a shareholder in Farmers Export Company which owned a grain elevator in Ama, Louisiana.
IGC gave a rebate of a portion of its net profits to its members each year, reflecting the amount of business conducted by the member with IGC. IGC often distributed these "patronage rebates" partially in cash and partially in Class E Preferred Stock. The Class E stock was distributed in amounts reflecting the retained earnings to which each member was entitled. The retained earnings were then used to make further capital investment for the benefit of the owners. In addition, Class E Preferred Shareholders received dividends each year. IGC instituted a stock redemption plan and by 1976, except for the amount required for the plaintiffs to maintain a minimum investment in IGC, all the Class E Preferred Stock issued prior to 1972 had been redeemed.
Growmark, a Delaware corporation with its principal offices in Bloomington, Illinois, was formed in 1980 when IGC combined its operations with another agricultural cooperative, FS Services, Inc. IGC was a grain cooperative and FS Services was a supply cooperative, which provided fertilizers, seeds and other supplies to its members. As part of the combination, IGC transferred to Growmark the grain storage and handling facilities which had been capitalized by plaintiffs and other IGC members. At the time of the transfer plaintiffs' investment in the grain handling facilities and their retained earnings in IGC's books (and subsequently Growmark's books) was approximately $2.75 million. After the merger Growmark operated in two unincorporated divisionsa supply division and a grain division. Members of one division receive no benefit from and do no business with the other divisions of Growmark unless they are members of that division. IGC shareholders became members of the grain division and accepted Growmark's G Series Preferred Stock in exchange for their IGC stock. As G series members of Growmark plaintiffs were also entitled to trade their grain through the Illinois Cooperative Futures Company (ICFC) at reduced commission rates. ICFC owned six seats on the Chicago Board of Trade.
Plaintiffs contend that between March 1980 and October 1985 Growmark used the retained earnings allocated to each plaintiff's series G account but barred plaintiffs from realizing any return on their investment. During that time Growmark claimed losses in the grain business and refused to pay G series members any grain *1363 patronage rebates and refused to redeem any of plaintiffs' preferred stock.
B. The Transactions
Archer Daniels Midland Company (ADM) is a grain processor and marketer and also owns grain elevators. On September 5, 1985, Growmark entered into a contract with ADM pursuant to which Growmark agreed to sell the river elevators it had acquired from IGC to ADM in exchange for ADM Common Stock (the "Asset Sale").
Growmark held two meetings, on September 5, the date the deal was consummated, and on September 23 to explain the transaction to the shareholders. At the meetings Growmark told the shareholders they anticipated the sale would benefit them. Plaintiffs now complain that Growmark failed to disclose the financial terms and the Asset Plan to shareholders and that shareholders were never permitted to vote on the transaction. Plaintiffs also object to the sale of the Louisiana grain elevator to ADM by Farmers Export Company (FEC). Growmark is a shareholder in FEC and voted for that sale, and plaintiffs complain that they should have been consulted. Plaintiffs contend that the consideration paid for the Growmark facilities was less than their market value and thus deprived them of the full value of their stock holdings.
A year and a half after the Asset Sale, Growmark exercised its majority shareholder status in ICFC, a corporation which traded grain future contracts on the Chicago Board of Trade, to liquidate the firm. According to plaintiffs this deprived them of the reduced commission rates on grain trades, the last remaining benefit of their G series membership. Plaintiffs complain they should have been permitted to vote on this transaction.
II. DISCUSSION
A. Corporate Status
1. Standing
Plaintiffs admit that Growmark is a corporate entity organized under the corporate laws of the state of Delaware. Plaintiffs also freely admit that they are shareholders of Growmark. Nonetheless, plaintiffs contend, they are exempt from the well-established rules which govern the shareholder-corporation relationship. They argue that their cooperative-like arrangement is a unique entity in which the shareholders assume a special role and thus should not be held to the same restrictions imposed on shareholders of a more traditional corporation. According to plaintiffs their relationship with Growmark is more closely analogous to a trustee-beneficiary relationship and the rules governing that arrangement should apply here. Plaintiffs offer no case authority for their extraordinary proposition that corporate laws should be disregarded in this litigation.
The Board's duty to plaintiffs in this case and the extent of plaintiffs' right to approve Board decisions with respect to the transactions depends on the characterization of the parties, as Professor Scott in his comprehensive treatise on trusts writes:
... the extent of the duty of loyalty is not necessarily the same in all fiduciary relations, and what constitutes a violation of duty by one kind of fiduciary does not necessarily constitute violation of duty by another kind of fiduciary.
V A.W. Scott, Law of Trusts sec. 495, 3534 (3d ed. 1967). Although their argument is unclear, it seems that plaintiffs believe that despite the fact Growmark chose to organize under Delaware's general corporate laws, and not the cooperative agricultural association laws, because Growmark acts like a cooperative they are entitled to the special status afforded cooperatives by Delaware law. Even if we agree, plaintiffs would not be entitled to the rights with respect to the corporation that they claim.
An agricultural cooperative is a convenient instrumentality which enables farmers living in the same vicinity to act together for their mutual benefit in cultivating, harvesting and marketing their products. 3 C.J.S. Agriculture sec. 138 (1973 & Supp. 1988). Title 3, sec. 8561 of the Delaware Code Annotated grants this type of association a tax exemption. Notwithstanding this special status, the Delaware cooperative law also requires that a cooperative *1364 obtain a certificate of incorporation from the Secretary of State "similar to those issued to corporations organized under the general corporate law of this State...." Del.Code tit. 3, sec. 8504 (1988). The rules in Title 3 which apply to cooperatives are similar to the rules applying to businesses incorporated in Delaware. Title 3, however, does not elaborate on the fiduciary duty between the member and the association. Delaware, like many other states, seeks to encourage agriculture productivity by legislating special incentives for business entities that qualify as agricultural cooperatives; there is no reason to believe, however, that Delaware intended to obviate the theory of the corporation in this context.
But in any event plaintiffs are organized under Delaware corporate law, they cannot claim the advantages of the corporate form and reject their corporate status when it no longer serves their purpose. Sams v. Redevelopment Authority of the City of New Kensington, 431 Pa. 240, 244 A.2d 779, 781 (1968). To the extent that plaintiffs' claims rely on their being in a relationship other than that of shareholders to the corporation, these claims cannot survive a motion to dismiss.
2. Nature of Claims
Shareholders may bring direct actions, both as individuals and as a class, for injuries done to them in their individual capacities as corporate fiduciaries. R. Clark, Corporate Law sec. 15.9, at 662-64 (1986). However, if the shareholders' complaint is primarily for harm to the corporation they may not sue in their individual capacity, they must sue on behalf of the corporation; this is called the shareholder derivative suit. Ordinarily, any recovery in a derivative suit will go to the corporation. An action is derivative "if the gravamen of the complaint is injury to the corporation, or the whole body of its stock or property without any severance or distribution among individual holders, or if it seeks to recover assets for the corporation or to prevent the dissipation of its assets." 12B Fletcher, Cyclopedia of Corporations sec. 5911, at 285 (1984 & Supp.1988). The distinction between derivative and individual actions thus depends upon the party directly injured by the alleged wrongdoing. Kramer v. Western Pacific Industries, Inc., 546 A.2d 348 (Del.1988).
Plaintiffs state three claims against the Board: that its unilateral decision to sell certain assets denied them their right to vote on the transaction, caused the value of their stock to decrease and lost them their access to the grain marketing system. In other words, plaintiffs' claim is essentially that the directors did not act in the best interest of the corporation when they sold the assets. This claim is derivative in nature. Furthermore if the cause of action is based on acts relating solely to a particular class of stock or the stock in its entirety, it is generally a corporate cause of action. Clinton Hudson & Sons v. Lehigh Val. Coop. Farms, 73 F.R.D. 420 (E.D.Pa.1977), aff'd without opinion, 586 F.2d 834 (3rd Cir.1978) (quoting 12B Fletcher, supra, sec. 5915, at 296). Plaintiffs have failed to show that there was any duty owed to them that was not owed to all shareholders of their status, or that they suffered any harm individually, thus their individual claims must be dismissed.[2]
B. The Claims
1. Voting Rights
Even if plaintiffs had shown that they suffered a direct or personal injury their complaint suffers from numerous defects. Plaintiffs' contention that they were entitled to vote on the transaction effected by the Growmark Board is without merit. The shareholders of a corporation have sought a unique business arrangement, in which they deliberately agree to remove *1365 themselves from the daily operation of the business. As absentee owners, shareholders must agree to delegate a certain amount of authority to the managers of the corporation.
A well-established tenet of corporate law holds that a board of directors acting in the "ordinary and regular course of business", Philadelphia National Bank v. B.S.F. Co., 199 A.2d 557 (Del.Ch.1964), rev'd on other grounds, 204 A.2d 746 (Del.1964), may sell, lease or exchange less than "substantially all the corporate assets" without shareholder approval. 8 Del.C. sec. 271(a) (requires shareholder approval for the sale of "all or substantially all" the assets of a Delaware corporation). See also Gimbel v. Signal Cos., 316 A.2d 599, 605 (Del.Ch.), aff'd, 316 A.2d 619 (Del.1974). The purpose of the consent statute is to protect the shareholders from a fundamental corporate change without their approval, that is to ensure that the shareholders are not prevented from achieving the benefits or purpose for which the corporation was incorporated. See Gimbel, 316 A.2d at 606, quoting, 6A Fletcher, supra., sec. 2949.2, at 648.
To accomplish the purpose of the consent statute "ordinary and regular course of business" need not limit the director to just daily business activities. Gimbel, 316 rhonda39@example.net. Plaintiff does not contend that the Asset Sale was outside Growmark's ordinary business activity, nonetheless this issue must be resolved first to determine whether the Board requires shareholder approval. Delaware applies a quantitative test for this determination. If the sale of the assets is quantitatively vital to the operation of the corporation, is out of the ordinary and substantially affects the existence and purpose of the corporation, then it is beyond the authority of the directors. 6A Fletcher, supra., sec. 2949.3, at 637-38.
Without reaching the issue of whether the Asset Sale was a wise business choice, we find that the sale was in the course of regular business and therefore within the Board's authority. Plaintiffs say that their affiliation with Growmark or IGC was to facilitate the distribution of their goods. In the past Growmark and its predecessor IGC had frequently changed their business structure, and this particular business change should be regarded in light of Growmark's claimed losses in the grain business during this period. The decision to sell assets in exchange for stock in ADM, a grain processor which also owned grain elevators, appears consistent with the Board's regular business function to facilitate the distribution of plaintiffs' product.
Because we hold that this transaction was an ordinary business decision, plaintiffs need only have been consulted by the Board if the assets sold consisted of all or substantially all of the business assets. In Gimbel v. Signal Cos., the Delaware court specified that the sale of merely an independent or important branch of the corporate business is insufficient to require shareholder approval. 316 rhonda39@example.net. See also Whittaker Corp. v. Edgar, 535 F. Supp. 933 (N.D.Ill.1982) (applying Delaware law, the court found that shareholder approval is not required when a corporation sells a subsidiary, unless the subsidiary accounts for all or substantially all of the corporation's assets).
Plaintiffs do not argue that the Asset Sale consisted of all or substantially all the assets of Growmark, instead they attempt to circumvent the statute's limitations by arguing that the structure of Growmark was such that after the merger of IGC and FS Services, the grain and supply divisions remained so independent of each other that they were actually separate corporations. If this is true, the sale consisted of substantially all the assets of the grain division and shareholders had to be consulted. Although plaintiffs do not articulate any recognized corporate theory to lend support to their argument, we assume they rely on the de facto corporation doctrine to find that two corporations exist where, in fact, only one is organized under Delaware law.
The de facto doctrine is a judicial creation used to bridge a legal gap where corporate privileges have been exercised by a corporation which had failed to comply with statutory incorporation requirements. *1366 H. Henn. & J. Alexander, Laws on Corporations sec. 140, at 329-36 (1983 & Supp. 1986). The purpose of the doctrine is to protect parties who deal with a business on the assumption that it is regulated by corporate laws. Courts are necessarily hesitant to apply this fiction and will only do soin the interest of public policyupon a finding that the alleged corporation has met particular criteria which will make it a de facto corporation. Generally the doctrine will be evoked where a statute exists under which the business could have incorporated; there is a colorable attempt to comply with such statute and where there is some use or exercise of corporate privileges. Most courts also add an element of fairness to the parties involved in the analysis. See Henn & Alexander, supra.
Plaintiffs cannot argue that there was any deliberate attempt to incorporate the grain division. The mere fact that the two divisions operated separately is insufficient to find two corporations. The Supreme Court has noted specifically that even when a corporation is divided into completely autonomous divisions it should be scrutinized as a single entity: "the existence of an unincorporated division reflects no more than a firm's decision to adopt an organizational division of labor." Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 104 S. Ct. 2731, 2741, 81 L. Ed. 2d 628 (1984). The Supreme Court further noted that to do otherwise would be an unsound policy, "a rule that punished coordinated conduct simply because a corporation delegated certain responsibilities to autonomous units might well discourage corporations from creating divisions with their presumed benefits." Id. Even if, as plaintiffs contend, Growmark maintains separate patronage rebate accounts and separate membership qualification for its G series shareholders (shareholders who are members of the grain division) and that G series holders do not benefit in any way from the operation of the supply division, this does not justify imposing independent status on the grain division. Furthermore, plaintiffs deliberately ceased being shareholders in only the grain cooperative when they exchanged their shares in ICG, a grain cooperative, for shares in Growmark which operated both a grain and a supply divisions. Gromark is a single corporation and substantially all of its assets were not sold, therefore, plaintiffs' claim that the Board should have consulted them under Del.Code sec. 271 must fail.[3]
Given this conclusion, the common law fraud count, the RICO count and Securities fraud counts must be dismissed. These claims are all based upon an alleged scheme where Growmark sold parts of its grain business without disclosing material information to its shareholders. If plaintiffs had no right to approve the transaction and the Board of Directors had the sole right, then as a matter of law, if a disinterested Board acted on full information, the shareholders are attributed with full information. Maldonado v. Flynn, 597 F.2d 789, 793 (2d Cir.1979) (applying Delaware law).
2. Reduction in Benefits
Plaintiffs allege that they were injured by the Asset Sale because it diminished the marketing services they previously enjoyed by their association with Growmark, and they suffered a loss in their share value. Courts are traditionally reluctant to review the substance of a board of directors' corporate decisions. This reluctance stems from the fact that it can only examine the business decision and its context in retrospect, and directors, usually businessmen, are presumed more competent to make these decisions. Thus, frequently a court will find that the business judgment rule shields directors from liability even when shareholders contest their decision-making ability.[4]E.g., Aronson v. *1367 Lewis, 473 A.2d 805, 812 (Del.1984). Directors are immune from liability, however, only if they have fulfilled certain obligations vis-a-vis the shareholders and the corporation. The duty of care requires directors to exercise the degree of skill, diligence and care that a reasonably prudent business person would exercise in similar circumstances.[5]Smith v. Van Gorkom, 488 A.2d 858 (Del.1985).
In Smith v. Van Gorkom, the Delaware Supreme Court stated that directors' duty means taking appropriate steps to inform themselves prior to making a business decision. The Van Gorkom court reviewed the board's decision-making procedure and only when they found that the directors did not pursue a conscientious decision-making process did the court interfere and hold that the directors were liable to the corporation. 488 A.2d 858 (the directors did not adequately investigate the CEO's role in initiating sale of the company or his means at arriving at the per share sale price, the board was not sufficiently informed regarding the intrinsic value of the company before agreeing to the sale, and the company proceeded in haste, deliberating for only two hours, before agreeing to the sale without any apparent justification).
In this case plaintiffs do not quibble with the specific procedure by which the Board reached a decision, but rather they are unhappy with the effects of the decision and the Board's failure to consult the shareholders. Furthermore, the record is sparse as to the details of how and why the Directors made their decision to sell. It seems, however, that the Board was diligent in making the decision. It was not the first time the business structure of the grain division was changed, the Board retained an interest in the grain elevators by acquiring ADM stock, two meetings were held to inform the plaintiffs and all this must be regarded in the context that the Directors presumably were attempting to prevent further losses to the grain division. Plaintiffs' dissatisfaction with the result of this business decision is not appropriate for our review.
3. Constructive Trust
Plaintiffs seek imposition of a constructive trust on the ADM stock held by Growmark in an amount equal to the retained earnings allegedly attributable to their shares. A constructive trust is an involuntary trust which arises by operation of law; whereby a court will remove title from the legal owner, who holds it unfairly, and "convey that interest to one to whom it justly belongs." Commodity Futures Trading Comm'n v. Heritage Capital Advisory Services, Ltd., 823 F.2d 171, 172 (7th Cir.1987), quoting, Gravitt v. Jennings, 79 Ill.App.3d 286, 34 Ill. Dec. 720, 398 N.E.2d 395 (Ill.App.1979). It is an equitable remedy which only may be imposed upon a showing of wrongdoing on the part of the legal owner of the property. Commodity *1368 Futures Trading Comm'n, 823 rhonda39@example.net. We find that Growmark has not been involved in any wrongdoing and do not impose a constructive trust.
III. CONCLUSION
Growmark has made no pretense of being any type of business entity other than a corporation and plaintiffs' are its shareholders. There is no reason that traditional corporate law rules should not apply to this litigation. Plaintiffs have failed to demonstrate that they suffered any injury independent of the corporation. Their claims are specific to the entire class of G series stock. Plaintiffs' only option is to bring suit on behalf of the corporation. For this reason, plaintiffs' seven count complaint, brought in their individual capacity, against Growmark and ADM alleging RICO violations, securities fraud violations, common law fraud violation and breach of fiduciary duties must be dismissed.
Even if plaintiffs had standing to sue in their individual capacity their claims have no merit. Under well-recognized theories of corporate law Growmark's Directors had no obligation to consult plaintiffs-shareholders before effecting any of the complained of transactions, and shareholders were not entitled to any of the services they claim they have lost. Plaintiffs have failed to demonstrate that there was any unfairness, fraud, misrepresentation or lack of due care in the transactions approved by the Board, and we will refrain from substantive review of the Directors' business decision.
For the reasons stated above the complaint against all defendants is dismissed.
NOTES
[1] In response to defendants' Motion to Dismiss and supporting memorandum of law, plaintiffs filed an amended complaint. Apparently, plaintiffs recognized the deficiencies in their first complaint and sought to remedy them. Pursuant to Fed.R.Civ.P. 15(a) plaintiff is entitled to amend its complaint once, without leave of the court, before a responsive pleading is served.
[2] We note that even if plaintiffs' general claims were not derivative, they have no standing as individuals to bring their specific allegations under Rule 10b-5 of the Securities Exchange Act of 1934. It is well established that in the context of a corporation's purchase of stock involving fraud or misrepresentation, its shareholders have standing to sue only in a derivative suit on behalf of the corporation. Ray v. Karris, 780 F.2d 636 (7th Cir.1985); Rathborne v. Rathborne, 683 F.2d 914, 919 n. 16 (5th Cir.1982).
[3] Plaintiffs complain that they were not allowed to approve Growmark's vote in favor of the sale of the Louisiana grain elevator or the dissolution of ICFC. Beyond this bare complaint, plaintiffs do not discuss the basis of their right. Under the same analysis we pursued above, pursuant to sec. 271 of the Delaware code, plaintiffs' consent is not required.
[4] The theory behind the business judgment rule is that directors are not required to guarantee that their decisions will succeed, rather they are only expected to use ordinary and reasonable care in making corporate policy. Few directors would serve on boards if the merits of their decisions were subject to substantive scrutiny and, more importantly, ventures which have potential for great profit, but which entail some risk would be stifled. See Joy v. North, 692 F.2d 880, 885 (2d Cir.1982).
[5] In general, corporate laws seek to strike a balance between the need to have a board of directors with sufficient independence to effectively operate the affairs of the corporation and simultaneously ensure that ultimately the shareholders' the true owners'interests are effected. Certain common law methods exist to maintain the balance between shareholders' interest and managerial discretion. On one hand, the duty of care (discussed above) and the duty of loyalty protect shareholders. The duty of loyalty monitors the directors' conduct by requiring directors to act with the utmost allegiance to the corporation. See Henn & Alexander, supra., sec. 235, at 625-28. On the other hand, the presumption of the business judgment rulethat directors act in good faith and on an informed basisallows directors broad discretion to conduct corporate activities. The rule assumes that, unless proven otherwise, when directors make a corporate decision, they act on an informed basis, in good faith and believe that their action is taken in the best interest of the corporation. Johnson & Osborne, The Role of the Business Judgment Rule in a Litigious Society, 15 Val.U.L.Rev. 49 (1980). Thus, a court will invoke the business judgment rule and refuse to scrutinize the merits of the business decision made by business persons who are likely more competent in the particular business rhonda39@example.net.
|
512 So. 2d 799 (1987)
STATE
v.
Arthur L. GASTON.
3 Div. 444.
Court of Criminal Appeals of Alabama.
March 10, 1987.
On Return to Remand July 28, 1987.
*800 C. Michael McInnish and Thomas M. Goggans of Goggans, McInnish, Bryant & Chambless, Montgomery, for appellee.
Charles A. Graddick, Atty. Gen., and J. Elizabeth Kellum, Asst. Atty. Gen., for appellant.
PATTERSON, Judge.
This is an appeal by the State from a pre-trial order of the Circuit Court of Montgomery County suppressing a confession or admission, pursuant to Rule 17, Temp.A. R.Crim.P.
Appellant, Arthur L. Gaston, was indicted on March 11, 1985, for murder in violation of § 13A-6-2(a)(1), Code of Alabama 1975. In the early morning hours of January 17, 1985, appellant was picked up by the Montgomery city police and transported to the police station for questioning in relation to the death of Michael Wayne Darden. The record before us reflects that after arriving at the police station he was advised of his rights, as required by Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966), acknowledged that he understood those rights, signed a waiver of rights form, and agreed to make a statement. He made a statement in which he admitted shooting Darden, and related some details concerning the incident. The statement, as well as an explanation of his Miranda rights and waiver thereof, were videotaped.
Pre-trial motions to suppress the statement were filed by appellant in which he asserts that the statement was obtained without his giving an "effective waiver" of his Miranda rights, and that he was so incompetent at the time of making the statement that he could not give a voluntary, knowing, and intelligent waiver of his constitutional rights.
A hearing was held by the trial court on the motions to suppress on February 20, 1986. At the hearing, the State presented the testimony of the police officers involved in the taking of the statement, and the testimony of a psychologist, Mr. Allen Stewart of the Montgomery Area Mental *801 Health Authority. Stewart testified concerning the mental competency of appellant. The videotaped statement was offered in evidence, as well as voluminous medical records concerning appellant, going back for many years. The medical records reflect that appellant has a long history of mental problems, has been confined in state mental institutions a number of times, and has been committed to mental institutions by the probate court of Montgomery County on at least two occasions. The records also reflect that appellant was under treatment for his mental problems and was taking prescribed drugs for those problems at the time of the shooting and the making of the statement. After the suppression hearing, the trial court entered an order suppressing the statement. The State appeals, claiming that it met its burden of proving the required elements of voluntariness and a Miranda predicate necessary for the statement to be admitted into evidence.
In reviewing this case, we note at the outset that the trial judge did not make formal findings of fact or give any reasons for suppressing the statement. We have considered the evidence presented, as shown by the record, and have observed the videotaped statement. The record does not appear to us to disclose any police misconduct or coercive police activity in obtaining appellant's statement. The testimony of Mr. Stewart as to appellant's competency and his ability to understand the Miranda warnings and make a voluntary, knowing, and intelligent waiver of them is equivocal. Faced with this record and not knowing the basis of the trial court's decision, we find appellate review difficult.
We are fully in agreement with the rule that the findings of the trial court on a motion to suppress are binding on this court unless they are clearly erroneous. Simmons v. State, 428 So. 2d 218 (Ala.Cr. App.1983). However, it is difficult on this record to review the correctness of the trial court's decision, for the reasons stated. We, therefore, remand this cause to the trial court and request written findings of fact setting forth the facts relied upon to support the order of suppression, and make due return thereof to this court.
REMANDED WITH INSTRUCTIONS.
All Judges concur.
ON RETURN TO REMAND
PATTERSON, Judge.
In remanding this cause, we requested the circuit court to submit written findings of fact upon which it relied to suppress Gaston's confession. Its order reflects, in part, the following:
"Allen Stewart of the Montgomery Area Mental Health Authority testified as to his opinion as to the competency of the defendant at the time of the giving of the written statement in question. Medical records of the long history of mental problems and confinements in state mental institutions were introduced. Records were also introduced reflecting prescribed drugs and treatment of mental problems at the time of the making of the statement. The Court also observed a video tape of the statement. This Court found that the overwhelming evidence showed that the defendant was incompetent to understand the nature of the offense with which he was charged, the Miranda warnings which weregiven, and, therefore, was not competent to make a voluntary and knowing waiver of his rights."
We do not consider these findings to be clearly erroneous, Simmons v. State, 428 So. 2d 218 (Ala.Cr.App.1983), and, accordingly, we affirm the trial court's ruling.
In affirming this pre-trial ruling, we deny the attorney general's motion to dismiss this appeal and remand this cause to the circuit court. In support of his motion, which he claims is pursuant to A.R.A.P. 42, the attorney general asserts the following:
"As grounds for dismissal Appellant submits the attached order of the Circuit Court of Montgomery County [ORDER ON REMAND] and states that the case is ready to proceed forthwith. This dismissal has been requested by the District Attorney for Montgomery County. The *802 case is otherwise ready to proceed in the trial court."
A.R.A.P. 42 provides, in pertinent part, "An appeal or other proceeding may be dismissed on motion of the appellant or moving party upon such terms as fixed by the court."
In relying upon A.R.A.P. 42 as authority to seek a dismissal, the attorney general fails to address the impact of A.R.Crim.P. Temp. 17(a) and (h). Subsection (a) requires that an appeal by the state from a pre-trial ruling be taken "only if the district attorney certifies to the court of criminal appeals that the appeal is not brought for the purpose of delay and that the order, if not reversed on appeal, will be fatal to the prosecution of the charge." In the instant case, the district attorney submitted the following in his notice of appeal to this court:
"I hereby certify that this appeal is not taken for the purpose of delay and that the pre-trial order appealed from, if not reversed on appeal, will be fatal to the prosecution of the charge as to which this appeal is taken; without the defendant's confession, presently suppressed by the above-mentioned order, the State will be unable to present a prima facie case against the defendant."
If we granted the attorney general's request, under the circumstances before us, we would be blatantly ignoring the purpose and intended application of subsection (a). After securing the right to appeal by certifying to this court that it would be unable to present a prima facie case without Gaston's confession, the state cannot now expect us to consider a motion to dismiss its appeal for further proceedings in the trial court.
The only legally cognizable reason for further proceedings after the taking of an appeal by the state is found in subsection (h), which provides, as follows:
"If the trial court's ruling is upheld following a pre-trial appeal taken pursuant to this rule, then that affirmance shall operate as a bar to any further prosecution of the defendant or defendants as to whom the appeal was taken for any crime involved in the charge or charges as to which the appeal was taken, unless the trial court shall find that the subsequent prosecution is primarily based upon significant new evidence not reasonably available to the state when the pre-trial appeal was taken."
See also A.R.Crim.P.Temp. 17(d), which provides, "The filing of a notice of appeal in the circuit court pursuant to this rule shall stay the proceedings in the circuit court...." Thus, further proceedings are permissible only if the prosecution requests to submit to the trial court "significant new evidence not reasonably available to the state when the pre-trial appeal was taken." However, obviously, the exception arises after this court's affirmance and, moreover, the attorney general has submitted no evidence or reason why the exception would be applicable if we dismissed this appeal and remanded the cause to the trial court.
Accordingly, the trial court's ruling is upheld and, by virtue of A.R.Crim.P.Temp. 17(h), any further prosecution is barred unless the trial court subsequently finds the cited exception to be applicable.
MOTION TO DISMISS DENIED; AFFIRMED.
All Judges concur.
|
Citation Nr: 0739971
Decision Date: 12/19/07 Archive Date: 12/26/07
DOCKET NO. 99-22 242A ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Cleveland,
Ohio
THE ISSUE
1. Entitlement to service connection, to include on a
secondary basis, of an acquired psychiatric disorder.
2. Entitlement to an increased (comepensable) disability
rating for service-connected opiate dependence.
3. Entitlement to total disability based upon individual
unemployability due to service-connected disabilities (TDIU).
REPRESENTATION
Veteran represented by: Barbara J. Cook, Esquire
ATTORNEY FOR THE BOARD
K. Morgan, Associate Counsel
INTRODUCTION
The veteran served on active duty from November 27, 1979
until March 20, 1980.
This case comes before the Board of Veterans Appeals (the
Board) on appeal from rating decisions of the Department of
Veterans Affairs (VA) Regional Office in Cleveland, Ohio (the
RO).
Procedural history
In January 1995, the RO denied service connection for a
psychiatric disorder. In April 1998, the RO received the
veteran's request to reopen the claim. In a November 1998
rating decision, the RO declined to reopen the previously
denied claim absent new and material evidence. However, in
the same November 1998 rating decision, the RO granted
service connection for opiate dependence and awarded a
noncompensable disability rating therefor. The veteran
disagreed with the November 1998 rating decision, both as to
the rating assigned his opiate dependence and as to the RO's
refusal to reopen his previously denied claim of entitlement
to service connection for a psychiatric disorder. The appeal
was perfected with the timely submission of the veteran's
substantive appeal (VA Form 9) in November 1999.
In February 2002, the Board reopened the psychiatric claim
and remanded both claims for further evidentiary development.
In June 2003, the RO issued a supplemental statement of the
case (SSOC) that confirmed and continued the previous
denials.
Independent of the above, the veteran disagreed with a March
1999 RO rating decision that denied TDIU. The RO issued a
statement of the case (SOC) in July 2001. In the February
2005 decision, the Board determined that a substantive appeal
(VA Form 9) had been received by VA on August 31, 2001
Upon review of the veteran's VA Form 9, presumed to have been
received in August 2001, the Board noted the veteran's
request for a personal hearing. In February 2004, the Board
again remanded the case so that such a hearing could be
arranged. The RO scheduled a hearing for October 2004;
however, a notation in the claim file indicates that the
veteran's attorney called on the day of the hearing to cancel
it. There is no indication that the veteran or his attorney
have asked to have the hearing rescheduled.
The case was returned to the Board in February 2005. At that
time, the Board issued a decision which denied each of the
veteran's claims. The veteran duly appealed the Board's
decision the United States Court of Appeals for Veterans
Claims (the Court). In a Memorandum Decision dated March 14,
2007, the Court vacated the Board's February 2005 decision
and remanded this matter.
The appeal is REMANDED to the RO via the VA Appeals
Management Center (AMC) in Washington, DC. VA will notify
the veteran if further action is required.
REMAND
In the March 2007 Memorandum Decision, the Court found that
the Board had not insured compliance with the February 2002
remand prior to proceeding to the merits of the service
connection and the increased rating claims. For that reason,
it vacated the February 2005 decision and remanded the matter
to the Board.
Specifically, the Board's February 2002 remand had directed
the RO to schedule the veteran for evaluation by a
psychologist, to include review of the veteran's claims
folder and an opinion concerning what psychiatric diagnoses
are present. Thereafter, the RO was directed to refer the
veteran for a VA psychiatric examination to determine the
extent and severity of his service-connected opiate
dependence and the nature, extent and etiology of any other
current psychiatric disorders. The examining psychiatrist
was requested to review the veteran's claims file and
interview the veteran.
In response to the Board's February 2002 remand, the veteran
was referred for the requested psychiatric examination.
However, the RO did not refer the veteran for the requested
psychological evaluation and instead relied upon a discharge
summary from a psychologist, which was not accomplished with
reference to the veteran's claims folder. Accordingly,
according to the Court, the psychological examination did not
comply with the remand instructions. Additionally, as the
psychiatric opinion was issued without review of a complying
psychological examination, that evaluation also did not
comply with the instructions of the Board's remand.
In Stegall v. West, 11 Vet. App. 268, 271 (1998), the Court
held that compliance with remand instructions is neither
optional nor discretionary. The Court further held that
where the remand orders of the Board are not complied with,
the Board errs as a matter of law when it fails to ensure
compliance. Another remand is therefore necessary to ensure
proper compliance with the Board's February 2002 remand
instructions.
The TDIU claim is inextricably intertwined with the other
issues. In other words, if service connection and/or an
increased rating is granted for the claimed disabilities,
this may impact the TDIU claim. See Harris v. Derwinski, 1
Vet. App. 180, 183 (1991) [two or more issues are
inextricably intertwined if one claim could have significant
impact on the other]. Action on the veteran's TDIU claim is
therefore deferred.
Accordingly, the case is REMANDED for the following action:
1. The veteran should then be scheduled
for evaluation by a psychologist. The
veteran's VA claims folder should be
reviewed by the psychologist in
conjunction with the evaluation. After
interviewing the veteran and/or conducting
appropriate testing, the psychologist
should render an opinion concerning what
psychiatric diagnoses are present. The
report of the psychological evaluation of
the veteran should be associated with the
veteran's VA claims folder.
2. After completing the above actions, the
RO should arrange for a VA psychiatric
examination of the veteran, preferably by
an examiner who has not previously
evaluated the veteran, in order to
determine the extent and severity of his
current psychiatric disorders. The
examining psychiatrist should be requested
to review the veteran's claims file and
interview the veteran. With respect to
each psychiatric disorder identified, the
psychiatrist is requested to provide an
opinion as to whether it is at least as
likely as not that any such psychiatric
disorder is etiologically related to the
veteran's service or was caused or
chronically worsened by the veteran's
service-connected disabilities, including
the service-connected opiate dependence.
To the extent possible, the manifestations
of the service-connected opiate dependence
should be distinguished from those of any
other psychiatric disorder found to be
present. The examination report must be
associated with the veteran's VA claims
folder.
3. After undertaking any additional
development deemed by it to be
appropriate, VBA should then readjudicate
the veteran's claims. If the benefits
sought on appeal remain denied, in while
or in part, the veteran and his
representative should be provided a
supplemental statement of the case and
given an appropriate opportunity to
respond. Thereafter, the case should be
returned to the Board for further
consideration, if otherwise in order.
The veteran has the right to submit additional evidence and
argument on the matters the Board has remanded. See
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 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. 2007).
_________________________________________________
Barry F. Bohan
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) (2007).
|
Exhibit 99.1 [Servotronics, Inc. Letterhead] 1110 Maple Street¨P.O. Box 300¨Elma, New York 14059-0300¨703-331-0689¨FAX 703-331-0689 November 12, 2009 SERVOTRONICS, INC. ANNOUNCES THIRD QUARTER AND NINE MONTH RESULTS FOR THE PERIODS ENDED SEPTEMBER 30, 2009 Elma, NY – Servotronics, Inc. (NYSE Amex – SVT) reported a 37.7% increase in net income to $833,000 (or $0.43 per share Basic and $0.40 Diluted) on a 5.2% increase in revenues to $8,224,000 for the three month period ended September 30, 2009 as compared to net income of $605,000 (or $0.31 per share Basic, $0.29 per share Diluted) on revenues of $7,818,000 for the same three month period ended September 30, 2008. Net income for the nine month period ended September 30, 2009 was $1,668,000 (or $0.86 per share Basic, $0.81 per share Diluted) on revenues of $24,868,000. The comparable net income for the corresponding nine month period of 2008 was $2,046,000 (or $1.06 per share Basic, $0.96 per share Diluted) on revenues of $24,535,000.The Company primarily attributes the period to period differences in net income to decreased sales at the Advanced Technology Group (ATG) offset by increased sales at the Consumer Products Group (CPG) in combination with significant gross margin vagaries as a result of product mix in the relevant periods.
|
J-S23004-19
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMMONWEALTH OF PENNSYLVANIA, IN THE SUPERIOR COURT
OF
PENNSYLVANIA
Appellee
v.
ASHLEY ROSE VEGA,
Appellant No. 204 WDA 2018
Appeal from the Judgment of Sentence Entered December 8, 2017
In the Court of Common Pleas of Jefferson County
Criminal Division at No(s):
CP-33-CR-0000084-2016
CP-33-CR-0000086-2016
CP-33-CR-0000281-2016
CP-33-CR-0000282-2016
CP-33-CR-0000525-2015
CP-33-CR-0000526-2015
BEFORE: BENDER, P.J.E., NICHOLS, J., and COLINS, J.*
MEMORANDUM BY BENDER, P.J.E.: FILED JUNE 12, 2019/
Appellant, Ashley Rose Vega, appeals from the judgment of sentence of
an aggregate term of 6 to 17 years’ imprisonment, imposed after the court
revoked her probation based on a new conviction in an unrelated case.
Counsel seeks permission to withdraw from further representation pursuant
to Anders v. California, 386 A.2d 738 (Pa. 1967). Upon review, we find that
counsel’s Anders brief satisfies the requirements set forth in
Commonwealth v. Santiago, 97 A.2d 349 (Pa. 2009). Accordingly, we
grant counsel’s petition to withdraw and affirm the judgment of sentence.
____________________________________________
* Retired Senior Judge assigned to the Superior Court.
J-S23004-19
We glean the following relevant facts and procedural history from the
record. On March 2, 2016, in the Court of Common Pleas of Jefferson County,
Appellant entered a guilty plea to one count of possession with intent to deliver
a controlled substance1 at CP-33-CR-525-2015, one count of delivery of a
controlled substance2 at CP-33-CR-526-2015, one count of possession of drug
paraphernalia3 at CP-33-CR-084-2016, and one count of using drug-free
lukewaters@example.net. On that same date, Appellant was sentenced
to an aggregate term of 9 months to 2 years less 1 day of incarceration,
followed by 3 years’ probation.
On July 20, 2016, Appellant entered a guilty plea to one count of delivery
of a controlled substance5 at CP-33-CR-281-2016 and CP-33-CR-282-2016.
On that same date, Appellant was sentenced to an aggregate term of 3 years’
probation to run concurrently with the sentence imposed at CP-33-CR-525-
2015.
On February 15, 2017, after Appellant admitted to technical violations
of using a controlled substance, the trial court revoked all of Appellant’s
sentences and re-sentenced her to: (a) 5 years’ drug and alcohol restrictive
intermediate punishment and 6 months’ house arrest at CP-33-CR-525-2015;
____________________________________________
1 35 P.S. § 780-113(a)(30).
2 35 P.S. § 780-113(a)(30).
3 35 P.S. § 780-113(a)(32).
4 18 Pa.C.S. § 7509(b).
5 35 P.S. § 780-113(a)(30).
-2-
J-S23004-19
(b) 5 years’ probation at CP-33-CR-526-2015 (to run consecutive to the
sentence imposed at CP-33-CR-525-2015); and (c) an aggregate of 5 years’
probation at CP-33-CR-084-2016, CP-33-CR-086-2016, CP-33-CR-281-2016,
and CP-33-CR-282-2016 (to run concurrent with the sentence imposed at CP-
33-CR-526-2015).
On July 5, 2017, after again admitting to technical violations of using a
controlled substance at each of the foregoing docket numbers, the trial court
ordered Appellant to be committed to the Department of Corrections for an
evaluation to determine if Appellant qualified for the State Intermediate
Punishment (“SIP”) Program. After receiving a determination from the
Department of Corrections that Appellant was not suitable for the SIP
Program, the trial court entered an order on December 8, 2017, sentencing
Appellant to an aggregate term of 6 to 17 years’ incarceration with a
consecutive 1-year term of probation.
On December 21, 2017, the trial court denied Appellant’s pro se motion
for reconsideration, but granted her request for counsel. On January 25,
2018, counsel for Appellant filed a motion for reconsideration nunc pro tunc.
On that same date, the trial court granted counsel’s request to file the motion
nunc pro tunc, but denied the request for reconsideration. On February 2,
2018, Appellant filed a timely appeal.6 Appellant now presents the following
____________________________________________
6We recognize that our Supreme Court recently held that “the proper practice
under Rule 341(a) is to file separate appeals from an order that resolves issues
-3-
J-S23004-19
issue for our review, via counsel’s Anders brief: “Whether the [t]rial [c]ourt
committed an abuse of discretion when it revoked Appellant’s
probation/parole and re-sentenced her to serve sentences aggregating to a
minimum of … six (6) years [and] to a maximum of [seventeen] (17) years in
a state correctional institution given the circumstances of the case[?]”
Anders Brief at 4.
“When faced with a purported Anders brief, this Court may not review
the merits of the underlying issues without first passing on the request to
withdraw.” Commonwealth v. Rojas, 875 A.2d 638, 639 (Pa. Super. 2005)
(quoting Commonwealth v. Smith, 700 A.2d 1301, 1303 (Pa. Super.
1997)).
Court-appointed counsel who seeks to withdraw from representing
an appellant on direct appeal on the basis that the appeal is
frivolous must:
(1) petition the court for leave to withdraw stating that,
after making a conscientious examination of the record,
counsel has determined that the appeal would be frivolous;
(2) file a brief referring to anything that arguably might
support the appeal but which does not resemble a “no-
merit” letter to amicus curiae brief; and (3) furnish a copy
of the brief to the [appellant] and advise the [appellant] of
his or her right to retain new counsel or raise any additional
points that he or she deems worthy of the court’s attention.
____________________________________________
arising on more than one docket. The failure to do so requires the appellate
court to quash the appeal.” Commonwealth v. Walker, 185 A.3d 969, 977
(Pa. 2018). The Court tempered its holding, however, by making it
prospective only. The Walker opinion was filed on June 1, 2018; hence, this
holding is not applicable in the instant matter, as Appellant filed her notice of
appeal on February 2, 2018.
-4-
J-S23004-19
Commonwealth v. Miller, 715 A.2d 1203 (Pa. Super. 1998)
(citation omitted).
Rojas, 874 lukewaters@example.net. Appellant’s counsel has complied with these
requirements. Counsel petitioned for leave to withdraw, and filed a brief
satisfying the requirements of Anders, as discussed, infra. Counsel also
provided a copy of the brief to Appellant, and submitted proof that he advised
Appellant of her right to retain new counsel, proceed pro se, and/or to raise
new points not addressed in the Anders brief.
Our Supreme Court has held, in addition, that counsel must explain the
reasons underlying his assessment of Appellant’s case and his conclusion that
the claims are frivolous. Thus, counsel’s Anders brief must satisfy the
following criteria before we may consider the merits of the underlying appeal:
[W]e hold that in the Anders brief that accompanies court-
appointed counsel’s petition to withdraw, counsel must: (1)
provide a summary of the procedural history and facts, with
citations to the record; (2) refer to anything in the record that
counsel believes arguably supports the appeal; (3) set forth
counsel’s conclusion that the appeal is frivolous; and (4) state
counsel’s reasons for concluding that the appeal is frivolous.
Counsel should articulate the relevant facts of record, controlling
case law, and/or statutes on point that have led to the conclusion
that the appeal is frivolous.
Santiago, 978 lukewaters@example.net.
Upon review of the Anders brief submitted by Appellant’s counsel, we
find it complies with the technical requirements of Santiago. Counsel’s
Anders brief (1) provides a summary of the procedural history and facts of
this case; (2) directs our attention, when applicable, to the portions of the
record that ostensibly support Appellant’s claim of error; (3) concludes that
-5-
J-S23004-19
Appellant’s claim is frivolous; and (4) does so by citation to the record and
appropriate/applicable legal authorities. Thus, we now examine whether
Appellant’s claim is, indeed, frivolous. We also must “conduct a simple review
of the record to ascertain if there appears on its face to be arguably
meritorious issues that counsel, intentionally or not, missed or misstated.”
Commonwealth v. Dempster, 187 A.3d 266, 277 (Pa. Super. 2018) (en
banc).
Appellant’s allegations relate to the discretionary aspects of her
sentence.
Challenges to the discretionary aspects of sentencing do not
entitle an appellant to review as of right. An appellant challenging
the discretionary aspects of his sentence must invoke this Court’s
jurisdiction by satisfying a four-part test:
We conduct a four-part analysis to determine: (1) whether
[the] appellant has filed a timely notice of appeal, see
Pa.R.A.P. 902 and 903; (2) whether the issue was properly
preserved at sentencing or in a motion to reconsider and
modify sentence, see Pa.R.Crim.P. 720; (3) whether [the]
appellant’s brief has a fatal defect, Pa.R.A.P. 2119(f); and
(4) whether there is a substantial question that the sentence
appealed from is not appropriate under the Sentencing
Code, 42 Pa.C.S.[] § 9781(b).
Objections to the discretionary aspects of a sentence are generally
waived if they are not raised at the sentencing hearing or in a
motion to modify the sentence imposed.
Commonwealth v. Moury, 992 A.2d 162, 170 (Pa. Super. 2010) (citations
and internal quotations omitted).
Here, the record reflects that Appellant filed a timely notice of appeal,
properly preserved her claim in her post-sentence motion, and counsel has
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included a Rule 2119(f) statement in his Anders brief in compliance with
Pennsylvania Rules of Appellate Procedure.7 Thus, we proceed to determine
whether Appellant has raised a substantial question to meet the fourth
requirement of the four-part test outlined above.
As we explained in Moury:
The determination of what constitutes a substantial question must
be evaluated on a case-by-case basis. A substantial question
exists only when the appellant advances a colorable argument
that the sentencing judge’s actions were either: (1) inconsistent
with a specific provision of the Sentencing Code; or (2) contrary
to the fundamental norms which underlie the sentencing process.
Id. at 170 (citations and internal quotations omitted).
Appellant maintains in her Rule 2119(f) statement that her revocation
sentence is manifestly unreasonable “in that it was excessive and constituted
too severe of a punishment under the circumstances of the case[] and the
probation violation….” Appellant’s lukewaters@example.net. Appellant further avers that
the reasons given by the trial court for the sentence do not justify the severity
of the sentence. Id. Based on the arguments presented in Appellant’s Rule
2119(f) statement, and the case law on which she relies, we conclude that
she has presented a substantial question for our review. See
Commonwealth v. Sierra, 752 A.2d 910, 913 (Pa. Super. 2000) (“On appeal
from a revocation proceeding, we find a substantial question is presented
____________________________________________
7 We recognize that where counsel files an Anders brief, we may review the
issue even absent a Rule 2119(f) statement. See Commonwealth v.
Ziegler, 112 A.3d 656, 661 (Pa. Super. 2015).
-7-
J-S23004-19
when a sentence of total confinement, in excess of the original sentence, is
imposed as a result of a technical violation of parole or probation.”).
Accordingly, we will review the merits of Appellant’s claim, mindful of
the following standard of review:
Sentencing is a matter vested within the discretion of the trial
court and will not be disturbed absent a manifest abuse of
discretion. An abuse of discretion requires the trial court to have
acted with manifest unreasonableness, or partiality, prejudice,
bias, or ill-will, or such lack of support so as to be clearly
erroneous. It is also now accepted that in an appeal following the
revocation of probation, it is within our scope of review to consider
challenges to both the legality of the final sentence and the
discretionary aspects of an appellant’s sentence.
Commonwealth v. Crump, 995 A.2d 1280, 1282 (Pa. Super. 2010)
(citations omitted). Moreover, when we consider an appeal from a sentence
imposed following the revocation of probation,
[o]ur review is limited to determining the validity of the probation
revocation proceedings and the authority of the sentencing court
to consider the same sentencing alternatives that it had at the
time of the initial sentencing. 42 Pa.C.S. § 9771(b). Also, upon
sentencing following a revocation of probation, the trial court is
limited only by the maximum sentence that it could have imposed
originally at the time of the probationary sentence.
Commonwealth v. MacGregor, 912 A.2d 315, 317 (Pa. Super. 2006)
(internal citation omitted).
The reason for the trial court’s broad discretion in sentencing and the
deferential standard of appellate review is that “the sentencing court is in the
best position to measure various factors and determine the proper penalty for
a particular offense based upon an evaluation of the individual circumstances
-8-
J-S23004-19
before it.” Commonwealth v. Perry, 32 A.3d 232, 236 (Pa. 2011) (internal
citation and quotation marks omitted). Our Supreme Court has recognized
that the sentencing court’s “institutional advantage” is, perhaps, even “more
pronounced in fashioning a sentence following the revocation of probation,
which is qualitatively different than an initial sentencing proceeding.”
Commonwealth v. Pasture, 107 A.3d 21, 27 (Pa. 2014).
At initial sentencing, all of the rules and procedures designed to
inform the court and to cabin its discretionary sentencing
authority properly are involved and play a crucial role. However,
it is a different matter when a defendant reappears before the
court for sentencing proceedings following a violation of the mercy
bestowed upon him in the form of a probationary sentence. For
example, in such a case, contrary to when an initial sentence is
imposed, the Sentencing Guidelines do not apply, and the
revocation court is not cabined by Section 9721(b)’s requirement
that “the sentence imposed should call for confinement that is
consistent with the protection of the public, the gravity of the
offense as it relates to the impact on the life of the victim and on
the community, and the rehabilitative needs of the defendant.”
42 Pa.C.S. § 9721. See Commonwealth v. Reaves, … 923 A.2d
1119, 1129 ([Pa.] 2007) (citing 204 Pa.Code. § 303.1(b)
(Sentencing Guidelines do not apply to sentences imposed as
result of revocation of probation)).
Id.
Here, Appellant contends that an aggregate term of 6 to 17 years’
incarceration was not warranted. Appellant’s lukewaters@example.net. Appellant states
that all of her convictions and technical violations were drug-related and that
they were merely consequences of her addiction. She argues, therefore, that
her sentence was too harsh. Id. at 12-13.
-9-
J-S23004-19
Having carefully reviewed the record of Appellant’s sentencing
proceeding, we ascertain no abuse of discretion by the court. Initially, we
stress that the court had the benefit of a pre-sentence investigation report
and reviewed that report prior to the sentencing proceeding. N.T. Sentencing,
12/8/17, at 6. Additionally, the trial court indicated that it took into
consideration relevant factors, such as Appellant’s age, background, and prior
record, as well as the determination that Appellant was not eligible for the SIP
Program. Id.
The trial court summarized its reasoning in support of Appellant’s post-
revocation sentence in its Rule 1925(a) opinion, in which it so aptly opined:
Each of [the] subject docket numbers pertains to a drug-
related conviction, four for felony counts of delivery of a controlled
substance and two for misdemeanor drug-related offenses. In
each instance, the record suggests [Appellant] was not selling
drugs just to earn money; like so many in her position, she was
selling to support her addiction.
As the record reflects, the charges pending in the first two
cases did nothing to curb [Appellant’s] drug use. On the contrary,
within weeks of signing her conditions to be released on bail,
[Appellant] once tested positive for and twice admitted [to] using
heroin. Because of that, the court revoked her bail, after which
she remained incarcerated for the next nine months, at which
point she was released on parole.
Four months after being paroled, [Appellant] again admitted
to using heroin. She also admitted to using cocaine and was
charged with technical violations because of it. The court’s
solution in that instance was to revoke her split sentence and re-
sentence her to the county’s Drug & Alcohol Restrictive
Intermediate Punishment Program, which included a stint at an
inpatient rehab facility, followed first by further treatment at a
halfway house, intensive outpatient treatment, and non-intensive
outpatient treatment. That was on February 15, 2017. The allure
of drugs was too strong, though, and [Appellant] did not even
- 10 -
J-S23004-19
make it through her scheduled stay at the halfway house.
Instead[,] she was back in front of the court on July 5, 2017[,]
because of her inability to stay away from drugs, and it was then
that the court ordered an SIP evaluation. The Department of
Corrections concluded, however, that [Appellant’s] “mental health
stability” made her inappropriate for the program.
With SIP no longer an option, the most reasonable
alternative, in the court’s estimation, was to impose a significantly
longer term of confinement than that to which [Appellant] had
previously been subject[ed], together with a recommendation
that she be afforded the opportunity to engage with the
therapeutic community and hopefully learn to control her addictive
impulses. Nine months of forced sobriety at the county jail had
not accomplished that, … nor had inpatient rehab and the
structure of a halfway house. What [Appellant] needed—for her
own good as well as [for] that of the community—was a long-
term, treatment-oriented disposition in a restrictive environment.
Lesser options had already proven to be ineffective.
With credit for time served, and accounting for the lapse
between when she was sentenced and [when she] will have the
benefit of appellate review, [Appellant] will remain incarcerated
for four more years before becoming eligible for parole, and once
the parole board determines she is a suitable candidate, she will
still remain accountable to a state agent long enough to make sure
the therapeutic community achieved its purpose and did not
merely give [Appellant] an alternative environment in which to
bide her time until she could again gain access to drugs.
What the record indicates, therefore, is that the court did
not render an arbitrary or uninformed sentencing decision in this
case. It was well aware of [Appellant’s] criminal history and her
struggle with addiction, and it had the benefit of a pre-sentence
investigation report to further guide it in fully considering her
background and the other factors relevant to sentencing. Guided
by those considerations, it deliberately and expressly rejected
other alternatives and imposed a sentence it thought was best
suited to address [Appellant’s] particular rehabilitative needs and
[to] protect society from her drug-seeking activities in the
process.
Trial Court Opinion, 10/31/18, at 1-3 (unnecessary capitalization and citations
to record omitted).
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J-S23004-19
In response to Appellant’s assertion that the court’s reasoning for the
post-revocation sentence imposed on her fails to justify the severity of the
punishment, we note that:
[F]ollowing revocation, a sentencing court need not undertake a
lengthy discourse for its reasons for imposing a sentence or
specifically reference the statutes in question. Simply put, since
the defendant has previously appeared before the sentencing
court, the stated reasons for a revocation sentence need not be
as elaborate as that which is required at initial sentencing. The
rationale for this is obvious. When sentencing is a consequence
of the revocation of probation, the trial judge is already fully
informed as to the facts and circumstances of both the crime and
the nature of the defendant….
Pasture, 107 lukewaters@example.net. The Pasture Court further emphasized that “a trial
court does not necessarily abuse its discretion in imposing a seemingly
harsher post-revocation sentence where the defendant received a lenient
sentence and then failed to adhere to the conditions imposed on him.” Id.
Based on our review of the record, we are satisfied with the justification
provided for the sentence imposed on Appellant post-revocation, and we
discern no abuse of discretion by the trial court.
Finally, our review of the record reveals no other potential, non-frivolous
issues which Appellant could raise on appeal. As such, we agree with counsel
that a direct appeal in this case is wholly frivolous. Accordingly, we grant
counsel’s motion to withdraw.
Judgment of sentence affirmed. Petition to withdraw granted.
- 12 -
J-S23004-19
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/12/2019
- 13 -
|
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
MEDFORD DIVISION
MICHAEL ANTHONY MALARA,
Case No. 1: l 6-cv-02298-CL
Plaintiff,
V.
ORDER
COUNTY OF JOSEPHINE,
Defendant.
CLARKE, Magistrate Judge.
Plaintiff Michael Anthony Malara, appearing as a self-represented party, brings this cause
of action against the County of Josephine, Oregon, ("The County") and Josephine County
Sheriff's Deputy Kenneth Lehman ("Deputy Lehman"), (collectively, "defendants"). Full
consent to magistrate jurisdiction was entered on December 17, 2017. The case comes before the
Court on a motion for summary judgment (#40) submitted by both defendants. The Court sent
Plaintiff a Pro Se Summary Judgment Advice Letter on July 11, 2018, and on December 18,
Page l - REPORT AND RECOMMENDATION
2018 the Court held an Oral Argument Hearing on the motion. For the reasons below, the
defendants' motion (#40) is GRANTED and this case is dismissed.
LEGAL STANDARD
Summary judgment shall be granted when the record shows that there is no genuine
dispute as to any material of fact and that the moving party is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The
moving party has the initial burden of showing that no genuine issue of material fact exists.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Devereaux v. Abbey, 263 F.3d 1070, 1076
(9th Cir. 2001) (en bane). The court cannot weigh the evidence or determine the truth but may
only determine whether there is a genuine issue of fact. Playboy Enters., Inc. v. Welles, 279 F.3d
796, 800 (9th Cir. 2002). An issue of fact is genuine "if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248.
When a properly supported motion for summary judgment is made, the burden shifts to
the opposing party to set forth specific facts showing that there is a genuine issue for trial. Id at
250. Conclusory allegations, unsupported by factual material, are insufficient to defeat a motion
for summary judgment. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the
opposing party must, by affidavit or as otherwise provided by Rule 56, designate specific facts
which show there is a genuine issue for trial. Devereaux, 263 erinanderson@example.org. In assessing whether
a party has met its burden, the court views the evidence in the light most favorable to the non-
moving party. Allen v. City ofLos Angeles, 66 F.3d 1052, 1056 (9th Cir. 1995).
BACKGROUND
On June 30, 2015, Jon Dempsey contacted the Josephine County Sheriffs Department
and reported that Plaintiff Malara stole his vehicle. Mr. Dempsey completed an affidavit Stolen
Page 2 - REPORT AND RECGMMENDA TION
Vehicle Report Form on July 1, 2015 for a white 2000 Ford Explorer. The vehicle was entered
into the Josephine County computer system on that date.
On July 13, 2015, Deputy Lehman conducted a traffic stop when he observed a white
Ford Explorer hauling a trailer that was dropping debris onto the road. Due to the trailer behind
the vehicle, the license plate was obstructed, and Deputy Lehman could not call the vehicle in to
dispatch correctly. Once the Explorer came to a stop, Deputy Lehman got out of his vehicle to
read the correct license plate. He received a report that it was a stolen vehicle.
At that point, Deputy Lehman ordered all occupants out of the Explorer. He handcuffed
the driver, Plaintiff Malara, and read him his Miranda rights. Plaintiff remained handcuffed
while Deputy Lehman interviewed Plaintiff and his two passengers. Regarding the Explorer and
his possession of it, Plaintiff told Deputy Lehman that he purchased the Explorer from someone
he knew as J.D. Plaintiff provided a bill of sale for the vehicle, but the bill was not in his name.
Instead, the bill of sale named Jon Dempsey as the purchaser of the vehicle. Plaintiff did not
provide an explanation for this discrepancy.
Deputy Lehman noted some inconsistencies between Plaintiffs explanation of his
purchase of the vehicle and the version as told by his passenger, Nicholas Blair, including the
fact that Mr. Blair was present during transaction. According to Deputy Lehman's deposition,
the contradictions in their stories undermined the credibility of both statements.
DISCUSSION
In his First Amended Complaint (#17), Plaintiff asserts ten claims for relief, including
multiple violations of the 4 th Amendment, brought under section 1983: three claims for
unreasonable search and seizure and one excessive force claim against Deputy Lehmen, and two
,
Monell claims against Josephine County. Plaintiff also asserts four state law claims against both
Page 3 REPORT AND RECOMMENDATION
defendants - false arrest, assault and battery, negligence, and conversion. On the face of his
complaint, Plaintiff alleges a number of facts to support his claims, including that he was
subjected to field sobriety tests and ridiculed for being unable to perform them, that he was
placed in handcuffs that were too tight and caused significant pain, that he was strip-searched
and subjected to a breathalyzer test at the jail intake center, and that the Sheriff's Department
refused to release his vehicle and property after his case was dismissed. However, in response to
defendants' motion for summary judgment, Plaintiff has not offered any substantive evidence in
support of the facts alleged, other than a signed statement questioning some of the evidence
submitted by defendants, and uncertified copies of his driver's license and registration for the
vehicle at issue, filed with the Oregon DMV.
After reviewing all of the evidence in the record, and construing any inferences in favor
of the Plaintiff, the Court can find no dispute of material fact that would preclude summary
judgment in favor of the defendants.
ORDER
For the reasons stated above, the defendants' motion for summary judgment (40) is
GRANTED. The case is dismissed with prejudice. Judgment shall be entered for the defendants.
~ ,,,,,,,,..,
/-;;cefe:d54c:ddd9:71d7:5b29:a3f9:4a6:77b:7
It is so ORDERED and DATED this~ d_1:y~of Fe aJ,201;
/'/ /
// //
//
/
MARK D. CLARKE
United States Magistrate Judge
Page 4 - REPORT AND RECOMMENDATION
|
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”) is made and entered into
as of [_______________], 2018 by and among NeuroOne Medical Technologies
Corporation, a Delaware corporation (the “Company”), each of the persons who
have executed counterpart signature pages hereto (each a “Purchaser” and
collectively, the “Purchasers”) and persons or entities identified on Schedule 1
hereto holding Broker Warrants (each a “Broker” and collectively, the
“Brokers”).
WHEREAS, the Company has agreed to enter into a registration rights agreement
with each of the Purchasers to the Offering who purchased Units pursuant to a
subscription agreement (the “Subscription Agreement”), granting such Purchasers
certain registration rights with respect to the Shares.
WHEREAS, the Company has agreed to enter into a registration rights agreement
with each person or entity holding Broker Warrants, granting such Brokers
registration rights with respect to the shares of Common Stock issuable to such
Brokers upon the exercise of the Brokers Warrants (the “Broker Shares”).
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Subscription Agreement.
1. Definitions.
“Affiliate” means, with respect to any person, any other person which directly
or indirectly controls, is controlled by, or is under common control with, such
person.
“Commission” means the Securities and Exchange Commission.
“Common Stock” means the common stock of the Company, par value $0.001 per
share.
“Effectiveness Date” means, with respect to the Registration Statement required
to be filed hereunder, the 180th calendar day following the final closing of the
Offering; provided, however, that in the event the Company is notified by the
Commission that one or more of the above Registration Statements will not be
reviewed or is no longer subject to further review and comments, the
Effectiveness Date as to such Registration Statement shall be the tenth (10th)
Trading Day following the date on which the Company is so notified if such date
precedes the dates otherwise required above, provided, further, if such
Effectiveness Date falls on a day that is not a Trading Day, then the
Effectiveness Date shall be the next succeeding Trading Day.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
“Filing Date” means, with respect to the Registration Statement required
hereunder, the 75th calendar day following the final closing of the Offering,
provided, further, if such Filing Date falls on a Saturday, Sunday or other day
that the Commission is closed for business, then the Filing Date shall be the
next succeeding Trading Day on which the Commission is open for business.
“FINRA” means the Financial Industry Regulatory Authority, Inc.
“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.
“Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated by the Commission pursuant to
the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
“Purchaser” or “Purchasers” has the meaning set forth in the Preamble.
“Registrable Securities” means, as of any date of determination: all of the (a)
Shares, (b) Warrant Shares, (c) Broker Warrant Shares and (d) any securities
issued or then issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing; provided, that
the Holder has completed and delivered to the Company a Selling Stockholder
Questionnaire; and provided, further, such Holder’s Shares and Warrant Shares
shall cease to be Registrable Securities (and the Company shall not be required
to maintain the effectiveness of any, or file another, Registration Statement
hereunder with respect thereto) upon the earliest to occur of the following: (a)
a Registration Statement with respect to the sale of such Registrable Securities
is declared effective by the Commission under the Securities Act and such
Registrable Securities have been disposed of by the Holder in accordance with
such effective Registration Statement, (b) such Registrable Securities are sold
in accordance with Rule 144 promulgated by the Commission pursuant to the
Securities Act, or (c) such securities become eligible for resale by the Holder
under Rule 144 without the requirement for the Company to be in compliance with
the current public information requirement thereunder and without volume or
manner-of-sale restrictions as set forth in a written opinion letter issued by
counsel to the Company to such effect, addressed, delivered and acceptable to
the Transfer Agent.
“Registration Statement” means any registration statement of the Company filed
under the Securities Act that covers the resale of any of the Registrable
Securities pursuant to Section 2(a), including amendments and supplements to any
such registration statement, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference in any such registration statement.
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.
“SEC Guidance” means (i) any publicly-available written or oral guidance of the
Commission staff, or any comments, requirements or requests of the Commission
staff and (ii) the Securities Act.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
“Shares” means the shares of Common Stock issued or issuable to the Purchasers
pursuant to the Subscription Agreement.
2
“Trading Day” means any day on which such national securities exchange, the OTC
Pink Market, the OTCQB Market or such other securities market or quotation
system, which at the time constitutes the principal securities market for the
Common Stock, is open for general trading of securities.
“Warrants” means the Warrants issued pursuant to the Subscription Agreement.
“Warrant Shares” means the shares of Common Stock issued or issuable upon
exercise of the Warrants.
2. Resale Shelf Registration.
(a) On or prior to the Filing Date, the Company shall prepare and file with the
Commission a Registration Statement (which shall be on Form S-1 or if permitted
in accordance with SEC Guidance and applicable rules, on Form S-3) covering the
resale of all of the Registrable Securities that are not already registered on
an existing and effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 or, if Rule 415 is not available for
offers and sales of the Registrable Securities, by such other means of
distribution of Registrable Securities as the Holders may reasonably specify.
Subject to the terms of this Agreement, the Company shall use its commercially
reasonable efforts to cause a Registration Statement filed under this Agreement
to be declared effective by the Commission as soon as practical, but in any
event no later than the Effectiveness Date, and shall use its commercially
reasonable efforts to keep such Registration Statement continuously effective
under the Securities Act (or file and keep continuously effective one or more
replacement Registration Statements to register all Registrable Securities)
until the earlier of (i) such time as all Registrable Securities covered by such
Registration Statement have been publicly sold by Holders or (ii) the date that
all Registrable Securities covered by such Registration Statement may be sold by
non-affiliates without volume or manner-of-sale restrictions pursuant to Rule
144 and without the requirement for the Company to be in compliance with the
current public information requirement under Rule 144, as determined by the
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and reasonably acceptable to the Transfer Agent (the “Effectiveness
Period”). The Company shall file a final Prospectus with the Commission as
required by Rule 424 with respect to each Registration Statement.
(b) Notwithstanding the registration obligations set forth in Section 2(a), if
the Commission informs the Company that all of the Registrable Securities
cannot, as a result of the application of Rule 415, be registered for resale as
a secondary offering on a single registration statement, the Company agrees to
promptly (i) inform each of the Holders thereof and use its commercially
reasonable efforts to file amendments to the Registration Statement as required
by the Commission and/or (ii) withdraw the Registration Statement and file one
or more new registration statements (together, the “New Registration
Statement”), in either case, covering the maximum number of Registrable
Securities permitted to be registered by the Commission, on such other form
available to register for resale the Registrable Securities as a secondary
offering; provided, however, that prior to filing such amendment or New
Registration Statement, the Company shall be obligated to use commercially
reasonable efforts to advocate with the Commission for the registration of all
of the Registrable Securities in accordance with the SEC Guidance, including
without limitation, the Compliance and Disclosure Interpretation 612.09 with
respect to the Securities Act Rule 415, dated January 26, 2009, compiled by the
Commission’s Division of Corporate Finance.
(c) Notwithstanding any other provision of this Agreement, if the Commission or
any SEC Guidance sets forth a limitation on the number of Registrable Securities
permitted to be registered on a particular Registration Statement as a secondary
offering, unless otherwise directed in writing by a Holder as to its Registrable
Securities, the number of Registrable Securities to be registered on such
Registration Statement will be reduced as follows: (i) first, by Registrable
Securities not acquired pursuant to a Subscription Agreement; (ii) second, by
Registrable Securities represented by Warrant Shares (applied, in the case that
some Warrant Shares may be registered, to such Holders on a pro rata basis based
on the number of unregistered Warrant Shares held by such Holders); and (iii)
third, by Registrable Securities represented by shares of Common Stock issued in
the Offering (applied, in the case that if some of such shares of Common Stock
may be registered, to the Holders on a pro rata basis based on the number of
unregistered shares held by such Holders).
3
(d) [RESERVED.]
(e) Holder agrees to furnish to the Company a completed Selling Stockholder
Questionnaire attached hereto as Exhibit A on the date hereof. Prior to the
first anticipated filing date of a Registration Statement for any registration
under this Agreement, the Company will notify Holder of the information the
Company requires from Holder other than the information contained in the Selling
Stockholder Questionnaire, if any, which shall be completed and delivered to the
Company promptly upon request and, in any event, within three (3) Trading Days
prior to the applicable anticipated filing date. Holder further agrees that it
shall not be entitled to be named as a selling stockholder in the Registration
Statement or use a Prospectus for offers and resales of Registrable Securities
at any time, unless Holder has returned to the Company a completed and signed
Selling Stockholder Questionnaire and a response to any requests for further
information in the time frame and as described in the previous sentence. Holder
acknowledges and agrees that the information in the Selling Stockholder
Questionnaire or request for further information as described in this Section
2(e) will be used by the Company in the preparation of the Registration
Statement and hereby consents to the inclusion of such information in the
Registration Statement.
(f) In its sole discretion, the Company may undertake to register the
Registrable Securities on Form S-3 after such form is available to the
Company, provided that the Company shall maintain the effectiveness of the
Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been declared by
the Commission to be or otherwise becomes effective.
3. Registration Procedures. In connection with the Company’s registration
obligations hereunder, the Company shall:
(a) (i) Prepare and file with the Commission such amendments, including
post-effective amendments and supplements, to each Registration Statement and
the Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period, (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement (subject to the
terms of this Agreement), and, as so supplemented or amended, to be filed
pursuant to Rule 424, (iii) respond as promptly as reasonably practicable to any
comments received from the Commission with respect to each Registration
Statement or any amendment thereto, and (iv) during the Effectiveness Period,
comply with the provisions of the Securities Act and the Exchange Act with
respect to the disposition of all Registrable Securities covered by a
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of (subject to the terms of this Agreement) in
accordance with the intended methods of disposition by the Holders thereof as
set forth in such Registration Statement as so amended or in such Prospectus as
so supplemented; provided, however, that each Holder shall be responsible for
the delivery of the Prospectus to the Persons to whom such Holder sells any of
the Shares or the Warrant Shares (including in accordance with Rule 172 under
the Securities Act), and Holder agrees to dispose of Registrable Securities in
compliance with applicable federal and state securities laws.
4
(b) Notify each Holder as promptly as reasonably practicable, but in no event
longer than seven (7) Trading Days after such event, (i) when the Registration
Statement has become effective, (ii) of any request by the Commission or any
other federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information that pertains
to the Holders as “Selling Stockholders” or the “Plan of Distribution”, (iii) of
the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation of
any governmental action, litigation, hearing or other proceeding (“Proceedings”)
for that purpose, and (iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any jurisdiction,
or the initiation or threatening of any Proceeding for such purpose.
(c) Use commercially reasonable efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order stopping or suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, as soon as practicable.
(d) Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the Registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by each Registration Statement; provided,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction.
(e) If requested by a Holder, cooperate with such Holder to facilitate the
preparation and delivery of certificates or book entry statements representing
Registrable Securities to be delivered to a transferee pursuant to a
Registration Statement, which certificates or book entry statements shall be
free, to the extent permitted by the Subscription Agreement and under law, of
all restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holder may reasonably
request.
(f) [Reserved.]
(g) [Reserved.]
(h) [Reserved.]
(i) The Company may require each selling Holder to furnish to the Company a
certified statement as to (i) the number of shares of Common Stock beneficially
owned by such Holder and any Affiliate thereof, (ii) any FINRA affiliations,
(iii) any natural persons who have the power to vote or dispose of the Common
Stock and (iv) any other information as may be requested by the Commission,
FINRA or any state securities commission.
4. Registration Expenses. All fees and expenses incident to the Company’s
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement. In no event however shall the Company be responsible for
any underwriting, broker or similar commissions of any Holder or any legal fees
or other costs of the Holders except for the Fee.
5
5. Indemnification.
(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, members, partners, agents, brokers (including brokers who
offer and sell Registrable Securities as principal as a result of a pledge or
any failure to perform under a margin call of Common Stock), investment advisors
and employees of each of them, each Person who controls any such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, members, stockholders, partners, agents and
employees of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, reasonable attorneys’ fees)
and expenses (collectively, “Losses”), as incurred, arising out of or based upon
(1) any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto, preliminary prospectus, free writing prospectus
(as defined in Rule 405 promulgated under the Securities Act), or arising out of
or relating to any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading or (2) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act or any state
securities law, or any rule or regulation thereunder, in connection with the
performance of its obligations under this Agreement, except to the extent that
(i) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder for use
therein, or to the extent that such information relates to such Holder or such
Holder’s proposed method of distribution of Registrable Securities and was
reviewed and approved in writing by such Holder for use in a Registration
Statement, such Prospectus, preliminary prospectus, free writing prospectus, or
in any amendment or supplement thereto (it being understood that each Holder has
approved the contents of the Selling Stockholder Questionnaire for this
purpose), (ii) the use by a Holder of an outdated, defective or otherwise
unavailable Prospectus after the Company has notified the Holder in writing that
the Prospectus is outdated, defective or otherwise unavailable for use by such
Holder or (iii) to the extent that any such Losses arise out of the Holder’s (or
any other indemnified Person’s) failure to send or give a copy of the Prospectus
or supplement (as then amended or supplemented), if required, pursuant to Rule
172 under the Securities Act (or any successor rule) to the Persons asserting an
untrue statement or alleged untrue statement or omission or alleged omission at
or prior to the written confirmation of the sale of the Registrable Securities
to such Person if such statement or omission was corrected in such Prospectus or
supplement. The Company shall notify the Holders of the institution, threat or
assertion of any governmental action, litigation, hearing or other proceeding
arising from or in connection with the transactions contemplated by this
Agreement of which the Company is aware.
(b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents,
stockholders, Affiliates, and employees, each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, partners, members, managers,
stockholders, agents or employees of such controlling Persons, to the fullest
extent permitted by applicable law, from and against all Losses, as incurred, to
the extent arising out of or based upon: (x) such Holder’s failure to comply
with any applicable prospectus delivery requirements of the Securities Act
through no fault of the Company or (y) any untrue or alleged untrue statement of
a material fact contained in any Registration Statement, any Prospectus,
preliminary prospectus, free writing prospectus, or in any amendment or
supplement thereto, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading (i) to the
extent that such untrue statement or omission is based upon information
furnished by such Holder to the Company for inclusion in such Registration
Statement or such Prospectus or (ii) to the extent that such information relates
to such Holder’s proposed method of distribution of Registrable Securities and
was reviewed and approved by such Holder for use in a Registration Statement (it
being understood that the Holder has approved the contents of the Selling
Stockholder Questionnaire for this purpose), such Prospectus, preliminary
prospectus, free writing prospectus, or in any amendment or supplement thereto
or (iii) to the extent related to the use by such Holder of an outdated,
defective or otherwise unavailable Prospectus after the Company has notified the
Holder that the Prospectus is outdated, defective or otherwise unavailable for
use by such Holder.
6
(c) Conduct of Indemnification Proceedings. (i) If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all reasonable fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have materially and adversely prejudiced the Indemnifying Party.
(ii) An Indemnified Party shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses, (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding, or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a material conflict of interest exists
if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and the reasonable fees and expenses of no
more than one separate counsel shall be at the expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.
(iii) Subject to the terms of this Agreement, all reasonable fees and expenses
of the Indemnified Party (including reasonable fees and expenses to the extent
incurred in connection with investigating or preparing to defend such Proceeding
in a manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten (10) Trading Days of written notice thereof to
the Indemnifying Party; provided, that, the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) not to be entitled to indemnification
hereunder.
7
(d) Contribution. (i) If a claim for indemnification under Section 5(a) or 5(b)
is unavailable to an Indemnified Party or insufficient to hold an Indemnified
Party harmless for any Losses, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys’ or
other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
(ii) The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no contribution will be
made under circumstances where the maker of such contribution would not have
been required to indemnify the Indemnified Party under the fault standards set
forth in this Section 5. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(iii) The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties and are not in diminution or limitation of the
indemnification provisions under the Subscription Agreement.
6. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by Holder of any of its
obligations under this Agreement, Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under this
Agreement, including recovery of damages, shall be entitled to specific
performance of its rights under this Agreement. Each of the Company and Holder
agrees that monetary damages would not provide adequate compensation for any
Losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall not assert or shall
waive the defense that a remedy at law would be adequate.
(b) Compliance. Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it
(unless an exemption therefrom is available) in connection with sales of
Registrable Securities pursuant to a Registration Statement and shall sell the
Registrable Securities only in accordance with a method of distribution
described in a Registration Statement.
(c) Discontinued Disposition. By its acquisition of Registrable Securities,
Holder agrees that, upon receipt of a notice from the Company of the occurrence
of any event that makes the Registration Statement outdated, defective or
otherwise unavailable, Holder will forthwith discontinue disposition of such
Registrable Securities under a Registration Statement until it is advised in
writing by the Company or an agent of the Company that the use of the applicable
Prospectus (as it may have been supplemented or amended) may be resumed. The
Company will use its commercially reasonable efforts to ensure that the use of
the Prospectus may be resumed as promptly as is practicable, and shall advise
Holder thereof as promptly as practicable.
8
(d) Piggy-Back Registrations. If, at any time during the Effectiveness Period,
there is not an effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with the Company’s incentive, stock
option or other employee benefit plans, then the Company shall deliver to the
Holder a written notice of such determination and, if within five (5) Trading
Days after the date of the delivery of such notice, Holder shall so request in
writing, the Company shall include in such registration statement all or any
part of such Registrable Securities such Holder requests to be registered;
provided, however, that the Company shall not be required to register any
Registrable Securities pursuant to this Section 6(d) that are the subject of an
existing effective Registration Statement. The registration of the Registrable
Securities pursuant to this Section 6(d) shall not be considered the
satisfaction of the requirements of the Company pursuant to Sections 2 and 3 of
this Agreement, subject to Section 2(d).
(e) Addresses and Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via e-mail
transmission or facsimile (provided the sender receives a machine-generated
confirmation of successful transmission) at the facsimile number specified in
this Section prior to 5:00 P.M., New York City time, on a business day, (b) the
next business day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a business day or later than 5:00 P.M., New
York City time, on any business day, (c) the business day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service with
next day delivery specified, or (d) upon actual receipt by the party to whom
such notice is required to be given. The address for such notices and
communications shall be as follows:
If to the Company to: NeuroOne Medical Technologies Corporation 10901 Red
Circle Drive, Suite 150 Minnetonka, MN 54343 Telephone: 505.249.2868
Attention: David A. Rosa Email: seanhernandez@example.org With copies
to: Honigman Miller Schwartz and Cohn LLP 650 Trade Centre Way Suite 200
Kalamazoo, MI 49002 Telephone No.: 505.249.2868 Facsimile No.:
505.249.2868 Attention: Phillip D. Torrence E-mail:
seanhernandez@example.org If to a Holder: As set forth on their signature
page hereto
9
(f) Titles and Captions. All Article and Section titles or captions in this
Agreement are for convenience only. They shall not be deemed part of this
Agreement and do not in any way define, limit, extend or describe the scope or
intent of any provisions hereof.
(g) Assignability. This Agreement shall inure to the benefit of and be binding
upon the successors and permitted assigns of each of the parties and shall inure
to the benefit of Holder. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. The Company may not assign its rights (except by merger or in
connection with another entity acquiring all or substantially all of the
Company’s assets) or obligations hereunder without the prior written consent of
all the Holders holding no less than a majority of the then outstanding
Registrable Securities. Holder may assign its respective rights hereunder in the
manner and to the Persons as permitted under the Subscription Agreement;
provided in each case that (i) the Holder agrees in writing with the transferee
or assignee to assign such rights and related obligations under this Agreement,
and for the transferee or assignee to assume such obligations, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment, (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being transferred or assigned, (iii) at or before the
time the Company received the written notice contemplated by clause (ii) of this
sentence, the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein and (iv) the transferee is an
“accredited investor,” as that term is defined in Rule 501 of Regulation D.
(h) Applicable Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Subscription Agreement.
(i) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, or
waived unless the same shall be in writing and signed by the Company and Holders
holding no less than a majority of the then outstanding Registrable Securities,
in which case such amendment, modification, supplement or waiver shall be
binding on all Holders, provided that any party may give a waiver as to itself.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of all of the Registrable Securities to
which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.
(j) Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.
(k) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their good faith reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
NEUROONE MEDICAL TECHNOLOGIES CORPORATION By: Name: David Rosa
Title: Chief Executive Officer
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
NAME OF HOLDER AUTHORIZED SIGNATORY By: Name: Title:
ADDRESS c/o: Street: City/State/Zip: Attention:
Tel: Fax: Email:
Schedule 1
Brokers
[__________]
Exhibit A
Selling Stockholder Notice and Questionnaire
The undersigned holder of shares of the common stock, par value $0.001 per share
(the “Registrable Securities”) of NeuroOne Medical Technologies Corporation, a
Delaware corporation (the “Company”), issued pursuant to a certain Subscription
Agreement (the “Subscription Agreement”) understands that the Company intends to
file with the Securities and Exchange Commission (the “Commission”) a
registration statement (the “Registration Statement”) for the registration and
resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities
Act”), of the Registrable Securities, in accordance with the terms of the
Subscription Agreement. A copy of the Subscription Agreement is available from
the Company upon request at the address set forth below. All capitalized terms
not otherwise defined herein shall have the meanings ascribed thereto in the
Subscription Agreement.
In order to sell or otherwise dispose of any Registrable Securities pursuant to
the Registration Statement, a holder of Registrable Securities generally will be
required to be named as a selling stockholder in the related prospectus or a
supplement thereto (as so supplemented, the “Prospectus”), deliver the
Prospectus to purchasers of Registrable Securities (including pursuant to
Rule 172 under the Securities Act) and be bound by the provisions of the
Subscription Agreement (including certain indemnification provisions, as
described below). Holders must complete and deliver this Notice and
Questionnaire in order to be named as selling stockholders in the
Prospectus.Holders of Registrable Securities who do not complete, execute and
return this Notice and Questionnaire within three (3) Trading Days following the
date of the Subscription Agreement (1) will not be named as selling stockholders
in the Registration Statement or the Prospectus and (2) may not use the
Prospectus for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling stockholder in
the Registration Statement and the related prospectus. Accordingly, holders of
Registrable Securities are advised to consult their own securities law counsel
regarding the consequences of being named or not being named as a selling
stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned holder (the “Selling Stockholder”) of Registrable Securities
hereby gives notice to the Company of its intention to sell or otherwise dispose
of Registrable Securities owned by it and listed below in Item (3), unless
otherwise specified in Item (3), pursuant to the Registration Statement. The
undersigned, by signing and returning this Notice and Questionnaire, understands
and agrees that it will be bound by the terms and conditions of this Notice and
Questionnaire and the Agreement.
The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and complete:
A-1
QUESTIONNAIRE
1.Name.
(a)Full Legal Name of Selling Stockholder
(b)Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities are held:
(c)Full Legal Name of Natural Control Person(s) (which means a natural person
who directly or indirectly alone or with others has power to vote or dispose of
the securities covered by this Questionnaire):
2. Address for Notices to Selling Stockholder.
Telephone:
______________________________________________________________________ Fax:
____________________________________________________________________________
Contact Person:
___________________________________________________________________
3. Beneficial Ownership of Registrable Securities Issuable Pursuant to the
Subscription Agreement:
(a)Type and Number of Registrable Securities beneficially owned and issued
pursuant to the Subscription Agreement: (b)Number of shares of Common Stock
to be registered pursuant to this Notice for resale:
A-2
4. Broker-Dealer Status.
(a)Are you a broker-dealer?
Yes ☐ No ☐
(b)If “yes” to Section 4(a), did you receive your Registrable Securities as
compensation for investment banking services to the Company?
Yes ☐ No ☐
Note:If “no” to Section 4(b), the Commission’s staff has indicated that you
should be identified as an underwriter in the Registration Statement.
(c)Are you an affiliate of a broker-dealer?
Yes ☐ No ☐
Note: If yes, provide a narrative explanation below:
(d)If you are an affiliate of a broker-dealer, do you certify that you purchased
the Registrable Securities in the ordinary course of business, and at the time
of the purchase of the Registrable Securities to be resold, you had no
agreements or understandings, directly or indirectly, with any person to
distribute the Registrable Securities?
Yes ☐ No ☐
Note:If “no” to Section 4(d), the Commission’s staff has indicated that you
should be identified as an underwriter in the Registration Statement.
5. Beneficial Ownership of Other Securities of the Company Owned by the Selling
Stockholder.
Except as set forth below in this Item 5, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
(a)Type and Amount of other securities beneficially owned by the Selling
Stockholder:
A-3
6. Relationships with the Company.
Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.
State any exceptions here:
The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the effective date of the applicable Registration Statement.
All notices hereunder and pursuant to the Agreement shall be made at the address
set forth below. In the absence of any such notification, the Company shall be
entitled to continue to rely on the accuracy of the information in this Notice
and Questionnaire.
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 7 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto. The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus and any amendments or supplements thereto.
By signing below, the undersigned acknowledges that it understands its
obligation to comply, and agrees that it will comply, with the provisions of the
Exchange Act and the rules and regulations thereunder, particularly Regulation
M in connection with any offering of Registrable Securities pursuant to the
Registration Statement. The undersigned also acknowledges that it understands
that the answers to this Questionnaire are furnished for use in connection with
Registration Statements filed pursuant to the Registration Rights Agreement and
any amendments or supplements thereto filed with the Commission pursuant to the
Securities Act.
I confirm that, to the best of my knowledge and belief, the foregoing statements
(including without limitation the answers to this Questionnaire) are correct.
A-4
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
Date: ____________________________
Name of Holder (print): ____________________________________________
Signature (individual): _____________________________________________
Signature (corporate):
By: Name: Title:
PLEASE FAX A COPY (OR EMAIL A .PDF COPY) OF THE COMPLETED AND EXECUTED NOTICE
AND QUESTIONNAIRETO:
The Company:
NeuroOne Medical Technologies Corporation
10006 Liatris Lane
Eden Prairie, MN 55347
Telephone: 505.249.2868
Attention: David A. Rosa
Email: seanhernandez@example.org
With copies to:
Honigman Miller Schwartz and Cohn LLP
650 Trade Centre Way
Suite 200
Kalamazoo, MI 49002
Telephone No.: 505.249.2868
Facsimile No.: 505.249.2868
Attention: Phillip D. Torrence
E-mail: seanhernandez@example.org
A-5
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Filed 7/20/21 P. v. Dietzman CA5
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
FIFTH APPELLATE DISTRICT
THE PEOPLE,
F080382
Plaintiff and Respondent,
(Super. Ct. No. CR-19-002421)
v.
JONIE DIETZMAN, OPINION
Defendant and Appellant.
THE COURT*
APPEAL from an order of the Superior Court of Stanislaus County. Nancy A.
Leo, Judge.
Kendall Dawson Wasley, under appointment by the Court of Appeal, for
Defendant and Appellant.
Xavier Becerra, Attorney General, Lance E. Winters, Chief Assistant Attorney
General, Michael P. Farrell, Assistant Attorney General, Catherine Chatman and Harry
Joseph Colombo, Deputy Attorneys General, for Plaintiff and Respondent.
-ooOoo-
*Before Detjen, Acting P.J., Peña, J. and Snauffer, J.
INTRODUCTION
Defendant Jonie Dietzman pleaded no contest to first degree felony murder in
1994. After the passage of Senate Bill No. 1437 (2017–2018 Reg. Sess.) (Senate Bill
1437), defendant filed a Penal Code section 1170.95 petition for resentencing.
(Undesignated statutory references are to the Penal Code.) The court denied the petition,
noting it did not believe defendant had established a prima face case there was a
reasonable likelihood she would be entitled to relief; rather, “she clearly acted as a
principal and aided and abetted.” Defendant now challenges the denial of her petition
and the People concede remand is necessary for the court to issue a show cause order and
to hold an evidentiary hearing because the record of conviction did not establish
defendant was categorically ineligible for relief.
We agree with the parties, reverse the court’s order denying the petition, and
remand the matter for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
Defendant was charged, in part, with willfully, unlawfully, and feloniously
committing and attempting to commit a robbery and burglary, during the commission of
which a human being was killed (count I). Her case proceeded to a jury trial in 1994 and,
while the jury was deliberating on the charges filed against her, defendant pleaded no
contest to count I, first degree felony murder committed during a robbery and burglary.
She also pleaded no contest to an enhancement allegation that she was armed with a
firearm during the commission of the crime within the meaning of section 12022,
subdivision (a). The court sentenced defendant to a term of 25 years to life plus one year
for the firearm enhancement. The parties stipulated the evidence presented during the
trial provided a factual basis for defendant’s plea.
Petition For Resentencing
In 2018, defendant submitted a petition for resentencing pursuant to section
1170.95 using a preprinted form. She checked boxes stating she pled no contest to first
2.
or second degree murder in lieu of going to trial because she believed she could be
convicted of first or second degree murder at trial pursuant to the felony-murder rule or
the natural and probable consequences doctrine; and she could not now be convicted of
first or second degree murder in light of changes made to sections 188 and 189, effective
January 1, 2019 (pursuant to Senate Bill 1437).
The People responded to the petition, arguing defendant was not entitled to relief
because the facts of the case established she was a major participant in the robbery who
acted with reckless indifference to human life. They argued defendant went to the
victim’s home “fully knowing [her coperpetrator] was armed with a loaded sawed-off
shotgun.” She brought materials to tie up the victims and “helped prevent escape by
standing guard after closing the door while [the coperpetrator] threatened violence with
the sawed-off shotgun, in close proximity to the killing.” Once defendant’s coperpetrator
killed the victim, defendant searched the victim for money, “and then went from victim to
victim taking their money.” She tried to tie up the victims and “took a portion of the
proceeds as per their plan.” The People also moved to dismiss the petition on the
grounds that Senate Bill 1437 was unconstitutional.
Defendant filed a reply, arguing she made a prima facie showing she is entitled to
relief. She noted the People conceded she was not the actual killer and the jury
instructions did not charge her with directly committing or aiding and abetting a murder.
Rather, they charged defendant with committing a robbery during the commission of
which a human being was killed. Defendant asserted her entitlement to relief depended
on the resolution of an issue of fact: whether she was a major participant in the
underlying robbery who acted with reckless indifference to human life. She further
argued Senate Bill 1437 was constitutional.
The People filed a response to defendant’s reply in which they denied defendant
made a prima facie showing of entitlement to relief and argued she was ineligible for
relief as a major participant who acted with reckless indifference to human life. They
3.
also argued she was barred from relief because she aided and abetted the actual killer.
They asserted the prosecution’s burden at the prima facie stage is “simply to show that
there is enough evidence, notwithstanding the changes to sections 188 and 189, from
which a reasonable jury potentially could find [defendant] guilty of murder beyond a
reasonable doubt.”
The court held a hearing at which it denied defendant’s petition. At the hearing,
defendant was present and represented by counsel. The People argued the following facts
of the case were not in dispute:
“[Defendant] and her codefendant, Stephens, broke into the home of a
known drug dealer, Jose Calderon, to rob him. Stephens was armed with a
sawed-off shotgun and demanded money and drugs while [defendant] stood
nearby, guarding the front door. And in this home where Calderon lived,
there were a number of other people. Stephens ended up shooting
Calderon. And while he was on the floor dying, [defendant] removed the
money from his pockets and took the money from the other five men that
were in the room. She began tying people up with a telephone cord that she
carried into the home when she broke into it with Mr. Stephens. She helped
Stephens then leave before the police arrived and split the proceeds of the
robbery with Stephens.”
The People then explained defendant pled guilty. They asserted there was sufficient
evidence defendant could be convicted of murder, even under the changes to sections 188
and 189 because she was a “major participant” who acted with malice and reckless
indifference to human life. She was also an “aider and abettor to the actual murder.”
Defense counsel denied the facts in the case were undisputed. He argued “for the
People to be bringing up the details and the particulars on whether or not she was a
reckless participant or acted with extreme indifference to human life, or was a major
participant, or any of these types of details, is not the time and place for it.” He argued
the complaint only charged defendant with felony murder, and she was not the actual
killer.
4.
In denying defendant’s petition, the court held it agreed “under the premise that—
whether there’s a prima facie showing is whether there’s a reasonable likelihood that she
would be entitled to relief. But based on the facts of this case, I don’t find that to be ounderwood@example.com. Certainly, from the facts of this case, she clearly acted as a principal and aided and
abetted. So I don’t think that there is a prima facie showing in this ounderwood@example.com. So that
petition will be denied.”
DISCUSSION
Defendant challenges the denial of her petition for resentencing and the parties
agree the matter must be remanded for the court to issue an order to show cause and to
hold an evidentiary hearing. We agree with the parties, reverse the court’s order, and
remand for further proceedings.
1. Senate Bill 1437 and Section 1170.95
On September 30, 2018, the Governor signed Senate Bill 1437, which became
effective on January 1, 2019. Senate Bill 1437 “amend[s] the felony murder rule and the
natural and probable consequences doctrine, as it relates to murder, to ensure that murder
liability is not imposed on a person who is not the actual killer, did not act with the intent
to kill, or was not a major participant in the underlying felony who acted with reckless
indifference to human life.” (Stats. 2018, ch. 1015, § 1, subd. (f).) It amends section
188, which defines malice, and section 189, which defines the degrees of murder to
address felony-murder liability, and it adds section 1170.95, which provides a procedure
by which those convicted of murder can seek retroactive relief if the changes in the law
would affect their previously sustained convictions. (Stats. 2018, ch. 1015, §§ 2–4.)
Accordingly, section 188 now provides that, “[e]xcept as stated in subdivision (e)
of Section 189, in order to be convicted of murder, a principal in a crime shall act with
malice aforethought. Malice shall not be imputed to a person based solely on his or her
participation in a crime.” (§ 188, subd. (a)(3), italics added.) The change reflects the
5.
Legislature’s intent that “[a] person’s culpability for murder must be premised upon that
person’s own actions and subjective mens rea.” (Stats. 2018, ch. 1015, § 1, subd. (g).)
Additionally, section 189 previously stated, “All murder … which is committed in
the perpetration of, or attempt to perpetrate, arson, rape, carjacking, robbery, burglary,
mayhem, kidnapping, train wrecking, or any act punishable under Section 206, 286, 288,
288a, or 289, or any murder which is perpetrated by means of discharging a firearm from
a motor vehicle, intentionally at another person outside of the vehicle with the intent to
inflict death, is murder of the first degree.” Senate Bill 1437 amended section 189, in
part, by adding subdivision (e) which provides:
“A participant in the perpetration or attempted perpetration of a felony
listed in subdivision (a) in which a death occurs is liable for murder only if
one of the following is proven: [¶] (1) The person was the actual killer.
[¶] (2) The person was not the actual killer, but, with the intent to kill,
aided, abetted, counseled, commanded, induced, solicited, requested, or
assisted the actual killer in the commission of murder in the first degree.
[¶] (3) The person was a major participant in the underlying felony and
acted with reckless indifference to human life, as described in subdivision
(d) of Section 190.2.”
Newly enacted section 1170.95 permits those “convicted of felony murder or
murder under a natural and probable consequences theory [to] file a petition with the
court that sentenced the petitioner to have the petitioner’s murder conviction vacated and
to be resentenced on any remaining counts ….” (Id., subd. (a).) An offender may file a
petition under section 1170.95 where all three of the following conditions are met:
“(1) A complaint, information, or indictment was filed against the petitioner
that allowed the prosecution to proceed under a theory of felony murder or
murder under the natural and probable consequences doctrine[;] [¶] (2) The
petitioner was convicted of first degree or second degree murder following
a trial or accepted a plea offer in lieu of a trial at which the petitioner could
be convicted for first degree or second degree murder[;] [¶] [and] (3) The
petitioner could not be convicted of first or second degree murder because
of changes to Section 188 or 189 made effective January 1, 2019.”
(§ 1170.95, subd. (a)(1)–(3).)
6.
A trial court receiving a petition under section 1170.95 “shall review the petition and
determine if the petitioner has made a prima facie showing that the petitioner falls within
the provisions of this section.” (§ 1170.95, subd. (c).) If the petitioner has made such a
showing, the trial court “shall issue an order to show cause.” (Ibid.) The trial court must
then hold a hearing “to determine whether to vacate the murder conviction and to recall
the sentence and resentence the petitioner on any remaining counts in the same manner as
if the petitioner had not been previously been [sic] sentenced, provided that the new
sentence, if any, is not greater than the initial sentence.” (§ 1170.95, subd. (d)(1).)
If a hearing is held, “[t]he prosecutor and the petitioner may rely on the record of
conviction or offer new or additional evidence to meet their respective burdens.”
(§ 1170.95, subd. (d)(3).) “[T]he burden of proof shall be on the prosecution to prove,
beyond a reasonable doubt, that the petitioner is ineligible for resentencing.” (Ibid.) “If
the prosecution fails to sustain its burden of proof, the prior conviction, and any
allegations and enhancements attached to the conviction, shall be vacated and the
petitioner shall be resentenced on the remaining charges.” (Ibid.)
2. Analysis
Defendant argues there were no facts in the record of conviction that rendered her
categorically ineligible for relief as a matter of law. She asserts both the prosecutor’s
argument and the court’s holding denying her petition “rested on judging and analyzing
the underlying facts as relevant to a major participant and reckless indifference analysis,
which [was] improper at [that] stage of the proceedings.” She argues the court erred in
requiring her to prove “there’s a reasonable likelihood that she would be entitled to
relief” and in weighing and judging facts to conclude she had not set forth a prima facie
case. The People concede the major participant and reckless indifference to human life
inquiries are fact-intensive and not properly conducted at the prima facie stage. They
agree the matter should be remanded for further proceedings after the issuance of an
7.
order to show cause. We, too, agree defendant is entitled to a remand for the court to
issue an order to show cause and hold an evidentiary hearing at which the prosecution
will bear the burden of proving, beyond a reasonable doubt, that defendant is ineligible
for resentencing. (§ 1170.95, subd. (d)(3).)
Here, the parties agree defendant’s petition established a prima facie showing she
is entitled to relief. (§ 1170.95, subd. (c).) Her petition, the related briefing, and the
attachments established a complaint, information, or indictment was filed against her that
allowed the prosecution to proceed under a theory of felony murder or murder under the
natural and probable consequences doctrine. She further alleged she pleaded no contest
to first degree murder in lieu of going to trial because she believed she could be convicted
of first or second degree murder at trial; and she could not now be convicted of first or
second degree murder because of changes to section 188 or 189 made effective
January 1, 2019. (§ 1170.95, subd. (a).)
And the parties do not argue, nor does the record before us conclusively establish,
defendant was categorically ineligible for relief as a matter of law. Rather, the court had
to weigh evidence and facts to conclude defendant was a major participant who acted
with reckless indifference to human life or a direct aider and abettor, which was
inappropriate at this stage of the petitioning process. (See People v. Drayton (2020) 47
Cal.App.5th 965, 980–981 [“[W]hen assessing the prima facie showing, the trial court
should assume all facts stated in the section 1170.95 petition are true. [Citation.] The
trial court should not evaluate the credibility of the petition’s assertions, but it need not
credit factual assertions that are untrue as a matter of law …. [I]f the record ‘contain[s]
facts refuting the allegations made in the petition … the court is justified in making a
credibility determination adverse to the petitioner. [Citation.] However, this authority to
make determinations without conducting an evidentiary hearing pursuant to section
1170.95, subdivision (d) is limited to readily ascertainable facts from the record (such as
the crime of conviction), rather than factfinding involving the weighing of evidence or
8.
the exercise of discretion (such as determining whether the petitioner showed reckless
indifference to human life in the commission of the crime)”]; accord, People v. Duchine
(2021) 60 Cal.App.5th 798, 815 [“prima facie showing the [petitioner] must make is that
he [or she] did not, in fact, act [as required] or harbor the mental state required, for a
murder conviction under current law” and “the time for weighing and balancing and
making findings on the ultimate issues arises at the evidentiary hearing stage rather than
the prima facie stage, at least where the record is not dispositive on the factual issues.
Thus, absent a record of conviction that conclusively establishes that the petitioner
engaged in the requisite acts and had the requisite intent, the trial court should not
question [the petitioner’s] evidence”]; but see People v. Garcia (2020) 57 Cal.App.5th
100, 114–116, review granted Feb. 10, 2021, S265692 [trial court should determine
whether substantial evidence supports the conclusion the petitioner could still be
convicted of murder following the amendments to §§ 188 and 189 in determining if
petitioner made prima facie showing of eligibility for relief].)
Because defendant made a prima facie showing of entitlement to relief and the
record does not support a conclusion she was categorically ineligible for relief as a matter
of law, the court was required to issue an order to show cause and hold a hearing during
which the prosecution bears the burden of proving beyond a reasonable doubt that
defendant is ineligible for resentencing. (§ 1170.95, subd. (c).) Accordingly, we reverse
the court’s order denying the petition and remand for further proceedings.
DISPOSITION
The court’s order denying the petition is reversed. The court is directed to issue an
order to show cause and to hold a hearing during which the prosecution bears the burden
of proving beyond a reasonable doubt that defendant is ineligible for resentencing.
9.
|
Affirming.
L.F. Webb died testate on December 30, 1945. His will named J.R. Shumate executor, who was directed to convert the real estate into cash and divide it equally among certain close relatives the testator named as beneficiaries.
This equitable action was filed by the executor against George W. Owings and wife to set aside seven deeds that decedent had executed to them. The petition averred that Mr. Webb lacked mental capacity to execute the deeds, also that they were obtained through fraud and undue influence on the part of the grantees. Upon motion of the appellants an issue out of chancery was granted and the questions of mental capacity and undue influence were submitted to the jury under appropriate instructions relating to the last five deeds Webb executed. There was no evidence of fraud, and the proof was not sufficient to authorize the Court to submit the question of lack of mental capacity and undue influence as to the first two deeds, which were executed in 1937.
The jury found that Mr. Webb had mental capacity to make the deeds he executed on May 22, and July 18, *Page 750
1944, but lacked such capacity to make the ones he executed on August 7, 1944, February 27 and June 14, 1945. The jury did not find against any of the deeds on account of undue influence.
The chancellor overruled appellants' motion for a new trial and entered judgment canceling the three deeds which the jury found Mr. Webb lacked mental capacity to execute. By a separate order the chancellor reserved for further adjudication the rights of the parties in the property covering the deeds which were set aside, since there had been a consideration paid by the grantees for the deeds. Appellants ask that the judgment be reversed because (1) their motion for a directed verdict should have been sustained; (2) improper conduct of the jury; (3) the jury made an unwarranted compromise by their verdict.
The record shows that Mr. Webb was 88 years of age when he died on December 30, 1945. He resided in Brandenburg on a piece of property he owned and he had lived alone since the death of his wife some 50 years ago. Mr. Webb formerly had lived well, but some eight or ten years before his death he became careless about his person and house. Although he had several thousand dollars besides his real estate, his person and home became so untidy and dirty as to be in a deplorable condition when he suffered a serious and prolonged illness from August to November in 1943.
George Owings and his wife, Nellie, are colored people who resided near Mr. Webb. Although Mr. Webb was white, it appears that George was his closest friend and the person upon whom he most depended. George traded a good bit for Mr. Webb in a small way and had considerable influence with the old gentleman, who seemed to rely upon George's judgment in business matters. Without a doubt, George and his wife rendered many useful services to the old man, but it appears from this record that George usually managed to take very good care of himself while helping his friend. Roy Neafus, Circuit Court Clerk, testified that George admitted to him that he was not above beating the old man in a trade.
Without going into detail in the 250 pages of testimony, we will say it was ample for the court to submit *Page 751
the case to the jury and to sustain the verdict, and the court properly refused a peremptory instruction in favor of appellants. O.C. Rice, a neighbor of Mr. Webb, testified that in 1944 the old man got lost in Rice's yard one night and Rice had to take him home. After Mr. Webb's serious illness from August to November 1943, he contended he had been sick but a few days and that $13 was sufficient compensation to Rice for nursing him during his illness. Also, Mr. Webb did not want to pay Dr. Stith for professional services and said the doctor was slipping through the woods to his home to run up a bill. This was an hallucination upon the part of Mr. Webb as there was no woods surrounding his home.
Dr. Stith testified the old man had the mind of a six or seven year old child. Two bankers with whom Mr. Webb did business, Guy A. Hardin and Eugene L. Fontaine, both testified Mr. Webb was mentally incompetent to transact business or execute these deeds in 1944 or 1945, and their opinions were based upon facts which they related. Roy Neafus, the Circuit Court Clerk, was a distant cousin of Mr. Webb and he testified of the old gentleman telling him of having horses on a clover pasture up to their knees, when the time was January and snow covered the ground.
It is true that some 19 witnesses testified for appellants that Mr. Webb's mind never failed and that he was competent to transact business up until he was taken to the hospital shortly before his death. It is elementary where there is a conflict in substantial evidence of probative value that the issue should be submitted to the jury, and we will content ourselves with citing only one case on the subject. Elliott v. Drury's Adm'r.,304 Ky. 92, 200 S.W.2d 141. The facts are not similar to those in the instant case but the principle of law is the same and the Elliott opinion discusses the subject and cites many authorities.
No legal issue arose in this equitable action wherein under sec. 12 of the Civil Code of Practice either party as a matter of right might have such issue transferred to the ordinary docket for trial by jury, in which the verdict has the same effect as the verdict in an ordinary action. Here, the issue was cognizable only in equity, therefore the verdict was merely advisory. Truitt *Page 752
v. Truitt's Adm'r, 290 Ky. 632, 162 S.W.2d 31, 140 A.L.R. 1127. The finding of an unbiased jury upon a controverted question of fact will not be treated lightly and even if the facts are doubtful and should the evidence be equiponderant, and the trial appears to have been fair and the chancellor let the verdict stand, we will not disturb his judgment. Merritt v. Palmer, 289 Ky. 141, 158 S.W.2d 163.
There is no merit in appellants' contention that their rights were prejudiced because the clerk of the court talked to a couple of the jurors during the trial, in contravention of KRS29.310. The bill of exceptions shows that during a recess in the trial the clerk and a juror conversed as to where in the community a corn shredder was then operating. The clerk and another juror talked of where they would eat lunch that day. Sections 245 and 246 of the Criminal Code of Practice are quite similar to KRS 29.310 and provide that no person shall communicate with a juror on any subject connected with the trial. We have several times held that no reversible error was committed when some person innocently conversed with a juror on a matter foreign to the trial. Burnam v. Commonwealth 289 Ky. 312, 158 S.W.2d 131, and the authorities therein cited.
We are unable to agree with appellants that the verdict is the result of an unwarranted compromise on the part of the jury. The testimony of appellee referred to several different times or dates as to when Mr. Webb became incapacitated. The instructions, and no complaint was made of them, told the jury they might find Mr. Webb mentally capable of executing all five of the deeds or mentally incapable of executing all five of them, or they might find him mentally capable of executing some of them or mentally incapable of executing others of them; and they should show by their verdict which of the deeds he was mentally capable of executing and which of them he did not have capacity to execute. This is what the jury did and appellants will not be heard to complain of such a verdict.
Complaint is made by appellee that appellants' motion for a new trial was not filed within three days from the finding of the verdict as is required by sec. 342 of the Civil Code of Practice. The record shows the verdict *Page 753
was returned on Saturday, September 21st, and that no court was held on Monday, the 23rd, and that the motion for a new trial was filed on the 25th. We have held that an intervening Sunday, also days that the court is not in session, will not be counted in estimating the three days in which the motion must be filed. Witt v. Lexington E. R. Co., 158 Ky. 401, 165 S.W. 399; Black v. National Bank of Ky., 226 Ky. 152, 10 S.W.2d 629. In this instance the days to be counted in computing the three days within which the motion for a new trial had to be filed are September 21st, 24th and 25th. As the motion was filed on the 25th, the Code provision was met.
The judgment is affirmed. |
842 F. Supp. 433 (1994)
LONE ROCK TIMBER CO., an Oregon corporation; D.R. Johnson Lumber Co., an Oregon corporation; Spalding & Son, Incorporated, an Oregon corporation; Scott Timber Co., an Oregon corporation; and Burrill Timber Co., an Oregon corporation, Plaintiffs,
v.
UNITED STATES DEPARTMENT OF INTERIOR; Bruce Babbitt, Secretary of United States Department of Interior; United States Fish and Wildlife Service; Marvin Plenart, Regional Director, United States Fish and Wildlife Service; United States Bureau of Land Management; Dean Bibles, Regional Director, United States Bureau of Land Management, Defendants.
Civ. No. 93-927-AS.
United States District Court, D. Oregon.
January 20, 1994.
*434 *435 *436 Scott W. Horngren, Michael E. Haglund, Haglund & Kirtley, Portland, OR, for plaintiff.
Thomas C. Lee, U.S. Attorney's Office, Portland, OR, Jean E. Williams, U.S. Dept. of Justice, Resources Div., Washington, DC, for defendants.
OPINION
ASHMANSKAS, United States Magistrate Judge:
Plaintiffs are timber companies who submitted the winning bids on certain timber sales offered by the Bureau of Land Management ("BLM") in FY 1990 and 1991. They seek declaratory and injunctive relief against the BLM and United States Fish and Wildlife Service ("FWS") with respect to alleged violations of the interagency cooperation provisions of the Endangered Species Act ("ESA"), 16 U.S.C. § 1531, 1536, and the implementing regulations for that section, 50 C.F.R. Subpart 402, and alleged violations of BLM regulations governing the sale of timber, 43 C.F.R. Part 54.
*437 BACKGROUND
A federal agency must ensure that any action it authorizes, funds, or carries out is not likely to jeopardize the continued existence of any endangered or threatened species or result in the destruction or adverse modification of critical habitat of such species. 16 U.S.C. § 1536(a)(2). When a federal agency proposes to take an action that may affect a threatened or endangered species or its critical habitat, that agency must consult with the FWS and obtain a biological opinion from the FWS as to whether the proposed action is likely to result in a violation of the ESA. Id., 50 C.F.R. Subpart 402. Although the agency is technically not bound by findings of the FWS biological opinion, Sierra Club v. Marsh, 816 F.2d 1376, 1386 (9th Cir.1987), courts give great deference to the expertise of the FWS on these issues, and an agency that attempts to proceed with an action in the face of a critical FWS biological opinion will almost certainly be found to have acted arbitrarily and capriciously and contrary to law. See, e.g., Hill v. TVA, 549 F.2d 1064, 1070 (6th Cir.1977), aff'd, 437 U.S. 153, 98 S. Ct. 2279, 57 L. Ed. 2d 117 (1978).
Nine of the timber sales at issue here are part of the BLM's FY 1990 timber sale program. On July 18, 1990, the BLM initiated consultation on the FY 1990 timber sale program. Five days later, the northern spotted owl was listed as a threatened species. The FWS issued a draft biological opinion on August 17, 1990, and a final "no jeopardy" biological opinion on November 23, 1990. Subsequently, the BLM obtained new information suggesting the proposed actions would have an adverse affect upon the northern spotted owl. By law, the BLM was required to reinitiate consultations. 50 C.F.R. § 402.16(b). Accordingly, on March 20, 1991, the BLM modified and resubmitted for individual consultation some of the FY 1990 sales, including the nine sales at issue here. On September 19, 1991, the FWS issued final "non-jeopardy" opinions for five of the sales at issue here, but reportedly deferred issuance of final opinions for the other four sales at the request of the BLM.
On February 14, 1992, the FWS designated critical habitat for the northern spotted owl, an event that required a new round of consultation. 50 C.F.R. § 402.16. The parties dispute the date on which this new round commenced. Plaintiffs assert the crucial date is January 23, 1992, when the BLM sent a letter to the FWS requesting the initiation of formal consultation. Defendants assert the letter was defective because it omitted much of the information required by 50 C.F.R. § 402.14(c), and formal consultation therefore did not commence until April 29, 1992, when the BLM finally supplied the requested information.
Effective September 28, 1992, the Washington, Oregon, and California populations of the marbled murrelet were listed as a threatened species. Only five of the nine sales were in areas that might contain marbled murrelets. Consultation on those sales was commenced December 9, 1992. On December 17, 1992, plaintiffs gave formal notice of their intent to file suit against the FWS to force completion of the consultation process. That lawsuit was filed on July 28, 1993. Final biological opinions in those nine sales were issued no later than September 3, 1993 (there is some dispute over the precise date of one of the opinions).
In addition to the nine FY 1990 sales, the BLM and FWS were consulting on a number of FY 1991 timber sales, including six at issue here. The BLM initiated consultation on these sales regarding the listing of the spotted owl on February 4 and March 4, 1991. That consultation was completed on June 17, 1991. As with the FY 1990 sales, a new round of consultation was initiated in 1992 to address the impact of those sales upon critical habitat for the owl. The parties similarly dispute whether formal consultation commenced on January 23 or April 29, 1992. A final biological opinion was issued on September 22, 1993, with respect to three of the sales. The BLM elected to withdraw the other three sales from consultation.
The original complaint asked this court to either (a) declare the FWS lacked jurisdiction to continue consultation and order the BLM to award the sales to plaintiffs, or (b) to compel defendants to terminate consultation and issue the biological opinions. Plaintiffs also sought declaratory relief establishing *438 time limits upon the length of consultation, and a declaration that the FWS violated 50 C.F.R. § 402.14(g)(5) by failing to discuss certain information with plaintiffs prior to issuing the draft biological opinion.
After the FWS issued the biological opinions, plaintiffs filed an amended complaint seeking additional relief including an order declaring the biological opinions void, declaratory relief establishing procedures to be used in preparing the biological opinions, and other relief to address an assortment of grievances against the BLM and the FWS. Plaintiffs move for summary judgment. Defendants move to dismiss on jurisdictional grounds, or in the alternative for summary judgment. Plaintiffs also seek leave to file a second amended complaint.
DISCUSSION
1. Mootness:
Plaintiffs originally brought this action to compel the FWS to issue biological opinions on specific timber sales. Since the opinions have now been issued, those claims are moot. There is no point in my ordering the FWS to perform an act that has already occurred. Plaintiffs also seek declaratory relief establishing time limits upon the length of consultation, and requiring the FWS to obtain plaintiffs' consent to extend those deadlines, but since there is presently no dispute between the parties such a declaration would constitute an advisory opinion which federal courts lack jurisdiction to issue. Church of Scientology of California v. United States, ___ U.S. ___, ___, 113 S. Ct. 447, 449, 121 L. Ed. 2d 313 (1992).
Plaintiffs contend this case presents one of the "exceptional situations where the plaintiff can reasonably show that he will again be subject to the same injury". Sample v. Johnson, 771 F.2d 1335, 1339 (9th Cir.1985) (citing City of Los Angeles v. Lyons, 461 U.S. 95, 103 S. Ct. 1660, 75 L. Ed. 2d 675 (1983)), cert. denied, 475 U.S. 1019, 106 S. Ct. 1206, 89 L. Ed. 2d 319 (1986). I disagree. There is no possibility the FWS will again fail to issue these particular biological opinions for these particular timber sales. In theory, the FWS could someday fail to timely issue biological opinions for some other timber sale in which plaintiffs have an interest, but that is little more than speculation.[1] By contrast, in most of the cases upon which plaintiffs rely the controversy was one likely to be repeated, often at predictable intervals. See, e.g., Greenpeace Action v. Franklin, 982 F.2d 1342, 1348 (9th Cir.1992) (pollock fishing season had ended, but it was an annual event, and FWS had already announced plans to rely on the same biological opinion the following year, so the controversy was almost certain to be repeated), opinion amended on denial of rehearing, 14 F.3d 1324 (C.A.9 1992).
Defendants admit the consultation process was unacceptably attenuated in the present case, but attribute those delays to the unprecedented number of requests for consultation generated by the listings of the spotted owl and marbled murrelet. Defendants also note that on several occasions rapidly unfolding events forced the agencies to reinitiate consultation and issue a revised biological opinion. The FWS biologists were also stretched thin by other demands on their time, which included responding to legal challenges that sought to enjoin timber sales throughout the Pacific Northwest, and helping to prepare Forest Management Plan Option 9 ("Option 9") and other forest management plans. Finally, although public attention and considerable agency resources were devoted to the spotted owl and marbled murrelet, those are just two of the many species for which the FWS biologists are obliged to conduct studies and issue biological opinions.
Defendants have furnished affidavits detailing the steps that have been taken to avoid a repetition of these delays, including hiring more biologists to assist with the production of biological opinions, developing an interagency database, and tiering consultation on specific projects to consultations conducted *439 for larger forest planning strategies so the FWS need not reinvent the wheel for each individual consultation. Plaintiffs question whether those measures will be sufficient to prevent future delays, given the growing number of potential candidates for the endangered species list. Nonetheless, there are several factors that lead me to conclude this is not an appropriate instance to invoke the "capable of repetition" exception to the mootness doctrine.
First, the claims here are not the type that are inherently mooted by the passage of time before review may be had. Cf. Ackley v. Western Conference of Teamsters, 958 F.2d 1463, 1469 (9th Cir.1992). Second, defendants have taken significant steps to prevent a repetition of the events leading to this action. Cf. Id. Third, plaintiffs' entitlement to relief and the precise nature of that relief may vary depending upon the particular circumstances of the case, including the reasons why the FWS is late in delivering the biological opinions. Fourth, the FWS has stipulated that it is bound by the deadlines plaintiffs propose, so there is little to be gained by declaratory relief. Finally, my own reading of 50 C.F.R. Subpart 402 suggests there is room to argue whether the deadlines described in that Subpart apply to a timber sale.[2] Defendants have indicated that because the BLM has historically treated a bidder on a timber sale contract as a "permit or license applicant", they will not contest that issue here. An agency's interpretation of its own regulations is entitled to substantial deference, Lyng v. Payne, 476 U.S. 926, 939, 106 S. Ct. 2333, 2341-42, 90 L. Ed. 2d 921 (1986), but the parties may not stipulate to standing, the jurisdiction of this court, or the interpretation of a statute or regulation. Those are matters for this court to decide. Plaintiffs' interpretation of this regulation may prove to be correct, but I am reluctant to issue what amounts to an advisory opinion when there is no real dispute between the parties. The absence of any real dispute deprives the court of the "concrete adverseness which sharpens the presentation of issues" upon which the courts depend for illumination of difficult questions. Baker v. Carr, 369 U.S. 186, 204, 82 S. Ct. 691, 7 L. Ed. 2d 663 (1962). The more prudent choice is to hold that question for another day when it is more squarely presented in an adversarial context.
Plaintiffs also argue that the effects of the challenged delays have not been "completely and irrevocably eradicated", Luckie v. EPA, 752 F.2d 454, 459 (9th Cir.1985), because the delays in the consultation process prevented the BLM from awarding the timber sale contracts before President Clinton announced his proposed Option 9, and the latter could further delay or even preclude the contracts from ever being awarded. Assuming that is true, it is still not a redressable injury within the zone of interests which the timetables were intended to protect. Plaintiffs similarly argue that they were injured because the BLM reduced the sale volume after reviewing the biological opinions. However, that injury does not flow from the delay in issuing the biological opinions, but rather the content of those opinions, which is an entirely different set of claims.
2. Failure to Give Notice:
Plaintiffs have now received their long-sought biological opinions, but are unhappy with the conclusions of those reports. Accordingly, they seek to void the opinions on grounds (a) the opinions were issued late, so the FWS was without jurisdiction to issue an opinion, (b) the FWS failed to use the best *440 scientific and commercial data available during the consultation period, (c) the FWS failed to discuss its tentative findings with plaintiffs before issuing its draft biological opinion, (d) the FWS failed to give due consideration to plaintiffs' proposed project modifications or mitigation, and (e) the biological opinions relied upon a critical habitat designation that was struck down by Judge Hogan because the FWS had not prepared an Environmental Impact Statement on the affects of that designation. See Douglas County v. Lujan, 810 F. Supp. 1470 (D.Or. 1992). Plaintiffs also complain they were not personally given a copy of the biological opinions by the FWS, as plaintiffs contend is required by 50 C.F.R. 402.14(e), but had to wait until they received a copy of the opinions from the BLM.
Defendants move to dismiss these claims because plaintiffs failed to file the required 60-day notice of intent to sue. 16 U.S.C. § 1540. The 60-day notice is jurisdictional, and failure to comply with that requirement is an absolute bar to bringing an action under this statute. See Hallstrom v. Tillamook County, 493 U.S. 20, 26-28, 110 S. Ct. 304, 308-10, 107 L. Ed. 2d 237 (1989) (construing similar provision in RCRA). I therefore have no authority to excuse a failure to comply with the notice requirement even though compliance would almost certainly be a futile act since the FWS has already announced it intends to oppose plaintiffs on the merits.
Plaintiffs contend that the notice (dated December 17, 1992) filed in connection with the first group of claims is sufficiently broad to cover the new claims. I disagree. The December 17 notice complained of the FWS's failure to timely issue the biological opinions, and threatened to sue if the FWS didn't promptly release those opinions. The new claims challenge the opinions themselves, and the process by which those opinions were developed. These are separate claims wholly apart from the first group, and require a new notice of intent to sue. Accordingly, these claims should be dismissed without prejudice.[3]
The only one of these five claims that was arguably encompassed by the December 17 notice is plaintiffs' contention that the biological opinion is void because the FWS's authority to act expired with the passing of the consultation deadlines. Assuming these deadlines apply here, that contention still lacks merit. Given the absolutist terms in which the ESA has been construed, see TVA v. Hill, 437 U.S. at 173, 184-85, 98 S.Ct. at 2291, 2296-97, it would be inappropriate for a court to invalidate a biological opinion, and allow an agency to proceed with a project that the FWS has determined poses a threat to endangered species, merely because the FWS was late in issuing its opinion. Cf. Sierra Pacific Industries v. Lyng, 866 F.2d 1099, 1111-1112 (9th Cir.1989) (government agencies ordinarily do not lose jurisdiction to act merely because they fail to comply with statutory time limits) (citing Brock v. Pierce County, 476 U.S. 253, 259, 106 S. Ct. 1834, 1838-39, 90 L. Ed. 2d 248 (1986)).
In any event, invalidation of the biological opinion would not clear the way for the BLM to proceed with these timber sales. The BLM has an independent duty to ensure that any action it authorizes, funds, or carries out does not jeopardize the continued existence of any endangered or threatened species or result in the destruction or adverse modification of critical habitat of such species. 16 U.S.C. § 1536(a)(2). The purpose of consultation is to allow the agency to utilize the expertise of the FWS in assessing the impact of the proposed project and the feasibility of adopting reasonable alternatives. Consultation is not an end in itself, but merely the means to reach a reasoned decision. The BLM cannot ignore the information provided by the FWS merely because the opinion was allegedly delivered late. A decision by the BLM to proceed with these sales in the face of reliable information that the sales will adversely impact protected species would be arbitrary and capricious, and contrary to law. Hill, 549 fallen@example.net. Finally, the BLM has a continuing duty to reinitiate consultation with the FWS if new *441 information reveals effects of the action that may affect listed species or critical habitat in a manner or to an extent not previously considered. Marsh, 816 F.2d at 1387; 50 C.F.R. § 402.16(b). Again, the BLM could not simply ignore the biological opinion merely because it was late. Defendants are entitled to summary judgment on this claim.
3. Claims Against the BLM:
Plaintiffs complain that the BLM erred by adjusting the contract price to reflect the value of the timber in 1993 dollars instead of 1990 dollars, which is when the contract was first bid. Defendants argue that this dispute is within the exclusive jurisdiction of the Court of Claims. I agree. See Murphy Timber Co. v. Turner, 776 F. Supp. 533, 536 (D.Or.1991) (district court lacks jurisdiction to hear claim for declaration of contract rights against the government). Plaintiffs try to avoid that result by asserting this dispute does not arise under the contract but rather is a remedy for violations of the ESA. However, plaintiffs made no mention of this claim in their notice of intent to sue, so the claim is barred by 16 U.S.C. § 1540. In any event, artful pleading notwithstanding, this case "does not rest on bottom on statutory rights but sounds clearly in contract." Murphy Timber, 776 F.Supp. at 537 (internal citation omitted).[4]
Next, plaintiffs seek an injunction requiring the BLM to immediately award any sale for which a biological opinion has been issued. The BLM chose to withdraw some of the sales in light of the draft biological opinions. Plaintiffs contend the BLM should have modified the sale instead of canceling it outright. This court has no jurisdiction to compel an agency to proceed with a project the agency no longer desires to pursue. To the extent plaintiffs are asserting a claim for breach of contract or failure to award a contract, that claim must be filed in the Court of Claims. Id.; 28 U.S.C. §§ 1346(a)(2) and 1491(a)(3).
Plaintiffs also seek a declaration that "defendant BLM has authority to replace lost timber volume within the contract area for purposes of developing reasonable and prudent alternatives." The BLM declined plaintiffs' request on grounds that action would violate agency regulations governing competitive bidding on timber sales. 43 C.F.R. Subparts 5401 and 5402. The complaint identifies the relief plaintiffs seek, but fails to identify any legal basis for granting that relief. Since plaintiffs do not contend the BLM is under any legal obligation to make up the lost volume, this is tantamount to a request for an advisory opinion telling the BLM it has the power to take the requested action if it chooses to do so. Federal courts cannot issue advisory opinions. Church of Scientology, ___ U.S. at ___, 113 S.Ct. at 449.
In subsequent briefs, plaintiffs suggested that the proposed declaratory relief is an appropriate remedy for defendants' alleged violations of the ESA, particularly the failure to properly consider plaintiffs' proposed reasonable and prudent alternatives. However, I have already determined that this claim must be dismissed for failure to comply with the notice requirements. Alternatively, compensation for lost volume might be a remedy under a contract theory, but 28 U.S.C. § 1491(a)(3) deprives the district courts of jurisdiction over pre-award government contract claims. J.P. Francis & Associates, Inc. v. United States, 902 F.2d 740, 742 (9th Cir.1990).
At oral argument, plaintiffs suggested this claim is actually founded upon the Administrative Procedure Act, on the theory that the BLM acted arbitrarily and capriciously by refusing to consider plaintiffs' proposal due to an erroneous interpretation of the agency's regulations. Such a claim would likely fall outside the exclusive jurisdiction of the Court of Claims. See North Side Lumber Co. v. Block, 753 F.2d 1482, 1485 (9th Cir.), cert. denied, 474 U.S. 919, 106 S. Ct. 248, 88 L. Ed. 2d 256 and cert. denied, 474 U.S. 931, 106 S. Ct. 265, 88 L. Ed. 2d 271 (1985) (if claim *442 is "contract-related" but "rested at bottom on statutory rights" then it is not a claim founded upon a contract within the meaning of the Tucker Act, and does not preclude review under the APA, providing the party is not seeking money damages, either directly or indirectly).
Assuming I have jurisdiction to consider that claim, it nonetheless fails on the merits. An agency's construction of its own regulations is entitled to substantial deference. Payne, 476 U.S. at 939, 106 S.Ct. at 2341-42. Plaintiffs have not shown the BLM's interpretation of these regulations is unreasonable.[5] To the extent this claim is founded upon a violation of the APA, defendants are entitled to summary judgment.
4. Motion for Leave to Amend Complaint:
Plaintiffs filed an eleventh hour motion seeking leave to file a second amended complaint adding a new claim alleging defendants violated § 318 of the Department of the Interior and Related Agencies Appropriations Act, 1990, Pub.L. No. 101-121, 103 Stat. 701, 745. Once the defendant has filed a responsive pleading, the decision to permit the filing of an amended complaint is committed to the sound discretion of the trial court. Fed.R.Civ.P. 15; Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 230, 9 L. Ed. 2d 222 (1962). Plaintiffs' motion was not only untimely but also alleged an entirely new set of grievances regarding the BLM's response to President Clinton's proposed Option 9. The Section 318 claim is really a separate complaint, and should be filed as such.
CONCLUSION
Plaintiffs' motion (# 13-1) for summary judgment is DENIED. Plaintiffs' motion (# 50-1) for leave to file a second amended complaint is DENIED without prejudice to refile the Section 318 claim as a separate action. Defendants' motion (# 24-1) to dismiss is GRANTED as to Claims One, Four, Five, Six, and Seven, and also Claim Three to the extent that claim is founded upon either a contract or a violation of the ESA, without prejudice to plaintiffs' right to refile those claims that were dismissed for failure to comply with the notice requirements of 16 U.S.C. § 1540. Defendants' motion (# 24-2) for summary judgment is GRANTED as to Claim Two and also as to Claim Three to the extent that claim challenges the BLM's interpretation of 43 C.F.R. Subparts 5401 and 5402.
NOTES
[1] Although defendants traditionally bore the burden of demonstrating that a case was moot, the Supreme Court's decision in Lyons appears to have shifted that burden towards the plaintiff, at least with respect to demonstrating that the controversy is likely to recur. Sample, 771 fallen@example.net.
[2] The authorizing statute speaks only of an applicant for a "permit or license". 16 U.S.C. §§ 1532(12), 1536. The regulations expressly distinguish the granting of a "contract" from the granting of a "permit or license". 50 C.F.R. § 402.02 ("Action"). Although the term "Applicant" is arguably given a somewhat broader definition in § 402.02, the regulations often revert to the term "permit or license applicant". See, e.g., 50 C.F.R. §§ 402.01(a), 402.08, 402.11(a), (f) and 402.12(i). Without exploring the legislative history and timber sale procedures in greater depth than the limited excerpts furnished with the parties' briefs, I cannot determine whether the term "permit or license applicant" is intended to refer to any person proposing an "action" or only to an applicant for a "permit or license", nor can I be certain whether the high bidder on a timber sale contract should be considered an applicant for a "permit or license" for purposes of the ESA and these regulations.
[3] Dismissal is mandatory. The court may not stay the action for 60 days while plaintiffs file the required notice. Hallstrom, 493 U.S. at 26-28, 110 S.Ct. at 309.
[4] Plaintiffs' reliance upon Sierra Pacific Industries, 866 F.2d 1099, is misplaced. Sierra Pacific involved a challenge to the validity of regulations implementing a statute, not the agency's application of those regulations to a particular contract.
[5] Plaintiffs suggest the BLM has applied its regulations inconsistently, but have failed to refute defendant's explanation that the sales described by plaintiffs were covered by express exclusions within § 5402. Plaintiffs also argue that the Forest Service has adopted a different interpretation of its regulations, but that is a different agency and different regulations. Even if the regulations were identical, there can be more than one reasonable interpretation of a given regulation. Plaintiffs' exhibits also reveal that the Forest Service has adopted detailed rules governing replacement volume sales. The source of those Forest Service rules is unclear, but they are more than a mere restatement or implementation of the policies enumerated in Subparts 5401 and 5402. There is no evidence in the record that suggests the BLM has adopted its own version of these rules.
|
Exhibit 10.40
RELOCATION REAL ESTATE PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is entered into this 26th day of December, 2007 between American
International Relocation Solutions, LLC (“BUYER”), a Pennsylvania limited
liability company having its principal office at Park West Two, 6th Floor, 2000
Cliff Mine Road, Pittsburgh, PA 15275, and John V. Howard and Val M. Howard
(“SELLER”), an individual or individuals having a mailing address of 714 Avila
Drive, Davidsonville, MD 21035.
I. PREMISES
A. SELLER is the owner of certain real estate located at 714 Avila Drive,
Davidsonville, MD 21035, having erected thereon a personal residence, as more
specifically described in paragraph 1 and Appendix A hereto.
B. SELLER is an employee of Vertis Inc. (“EMPLOYER”), and EMPLOYER has entered
into an agreement for BUYER to provide certain services in connection with the
relocation of SELLER, including the purchase of SELLER’s residence as provided
herein.
C. SELLER has agreed to sell the property to BUYER and BUYER has agreed to
purchase the property from SELLER upon the terms and conditions set forth
herein.
II. TERMS AND CONDITIONS
In consideration of the mutual covenants and promises herein contained, the
parties, intending to be legally bound, agree, represent and warrant as follows:
1. Covenant to Sell. BUYER agrees to purchase and SELLER agrees to sell good and
marketable title (and such as will be insurable by any responsible title
insurance company at regular rates) to the real estate located at the address
indicated in paragraph I.A. above, as more fully described in Appendix A (which
may be modified to correct any non-material inaccuracies in the legal
description that are determined by an accurate survey), together with the
following (all of which hereinafter are referred to collectively as “the
property”):
1.1 SELLER’s personal residence and all buildings and other improvements
situated upon the real estate;
1.2 All of the rights and appurtenances pertaining to the real estate, including
any right, title and interest of SELLER in and to adjacent easements, streets,
roads, alleys and rights-of-way; and
1.3 All included terms referred to in paragraph 3 below.
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2. Purchase Price. BUYER will pay to SELLER for the property the total sum of
Eight Hundred Fifty One Thousand Five Hundred ($ 851500.00) Dollars (“Purchase
Price”). This Purchase Price is based on the relocation policy of EMPLOYER. The
Purchase Price shall be adjusted as provided in paragraph 5 below and the
adjusted amount shall be paid to SELLER at the time and in the manner provided
below.
3. Fixtures and Personal Property Included or Excluded From Sale. The sale shall
include all personal property and fixtures permanently installed in the
property, and all such property which was considered to be part of the property,
including, but not limited to (strike if not applicable): plumbing, heating and
lighting fixtures (including chandeliers, ceiling fans and shades); ranges,
refrigerators and built-in microwave ovens; wall-to-wall carpeting; water
treatment systems; pool and spa equipment; air conditioning units; garage door
openers and transmitters; window treatments and rods; television antennas and
satellite dishes; awnings, storm doors and windows, and window screens;
shrubbery, plantings and unpotted trees; any remaining heating fuels stored in
built-in appliances; central vacuum systems and equipment; as well as the
following items specifically included:
___________N/A___________________________________________
The following items are not included in the sale and shall be removed from the
Premises by the SELLER prior to delivering possession to the BUYER:
_____________________N/A_________________________________
4. Possession. SELLER will vacate and deliver possession of the property to
BUYER provided that BUYER, its authorized agents, brokers, employees,
appraisers, surveyors, engineers, architects and other designated individuals
may enter upon the property at reasonable times and with notice to SELLER prior
to delivery of possession for purposes of inspecting the property and conducting
environmental or other testing and examinations, and for purposes of showing the
property to prospective purchasers. The date on which possession of the property
is delivered to BUYER, (or, if later, the date of this Agreement), shall be the
“Possession Date” for purposes of the Agreement. The Possession Date shall be
determined by mutual agreement of BUYER and SELLER.
4.1 Until the Possession Date, SELLER will be responsible for all maintenance,
repairs and replacements, mortgage payments (principal, interest and escrow),
taxes, insurance, utilities and all other costs associated with the ownership
and operation of the property.
4.2 On the Possession Date, SELLER will deliver possession of the property in
the same physical condition as existed on the date SELLER signed this contract,
that is broom clean, with all included items referred to in paragraph 3 above in
good working order, together with all keys, garage door openers, security and
entry codes and all other means of entering and securing the property.
4.3 SELLER will arrange for the transfer of all utilities into the name of BUYER
or its nominee and may cancel its insurance coverage on the property as of the
Possession Date.
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4.4 SELLER will assign to BUYER all of its right, title and interest in and to
any leases and security deposits affecting the property if such leases are
approved and assumed by BUYER in writing and can be terminated by BUYER on not
more than thirty (30) days notice to the tenant. In the event of assignment and
assumption by BUYER, BUYER shall be responsible for all obligations under such
leases accruing and arising on or after the Possession Date or, if later; the
effective date of the written assignment. SELLER shall not enter into any new
leases, written extensions of existing leases, if any, or additional leases for
the property without the expressed written consent of BUYER.
4.5 BUYER will assume all benefits and burdens of ownership of the property from
and after the Possession Date until sale and transfer of title.
5. Adjustments to Purchase Price. The amount to be paid by BUYER to SELLER
hereunder (“SELLER’s Equity”) shall be the Purchase Price provided for in
paragraph 2 above, subject to reductions and adjustments as of the Possession
Date, in the manner which is customary in the jurisdiction which the property is
located, as follows:
5.1. Loans. The unpaid balance of principal and interest due on all loans
applicable to the property, including, but not limited to, all mortgages, home
equity loans, home improvement loans and equity “bridge” loans.
5.2. Real Estate Taxes. All county, local and school, real estate, and any other
taxes applicable to the property, together with any special assessments which
have been levied or approved for levy.
5.3. Liens and Fees. All monetary liens, judgments, unpaid dues or assessments
owing to any homeowners’ association or similar body, fees, maintenance, capital
improvement or similar charges applicable to the property.
5.4. Pest Control Costs. The estimated cost of termite or pest control
treatment.
5.5. Repairs. Seller will complete repairs as agreed upon with buyer
5.6 Fuel. Utility and fuel charges.
5.7. Rent. Rent, rent deposits, security deposits or pre-paid rent under any
leases assigned to and assumed by BUYER.
5.8. Other Proration Items.
If any amount to be prorated is not ascertainable as of the Possession Date, the
adjustment thereof shall be based on the most recent ascertainable amount or
reasonable estimates thereof, and shall be subject to subsequent adjustment.
BUYER and SELLER each agree to promptly pay any amounts determined to be due as
a result of such subsequent adjustments including over-payments. The provisions
of this paragraph shall
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apply regardless of the reason for the adjustment whether or not, the original
calculation contained errors caused by SELLER, BUYER or others.
6. Payment of SELLER’s Equity Amount. The SELLER’s Equity shall be paid within
ten (10) business days after SELLER has complied with all requirements of this
Agreement, including the following:
6.1 BUYER has received from SELLER and dated a fully executed original,
facsimile transmission and/or scanned email copy of this Agreement.
6.2 BUYER has received a title report and commitment satisfactory to BUYER and
its attorneys.
6.3 BUYER has received all other documents and information which SELLER is
required to provide.
6.4 All of the conditions precedent set forth in paragraph 10 below have been
satisfied and upon satisfaction of all contingencies in this Agreement.
7. Mortgages. BUYER agrees to purchase the property subject to any existing
mortgages disclosed on Appendix A and deducted in determining SELLER’s Equity
(“Disclosed Mortgages”). Upon sale of the property by BUYER to a third party
buyer, BUYER must either satisfy any Disclosed Mortgages on or prior to the
closing date of such sale or obtain the unconditional release of any and all
liability of SELLER and EMPLOYER with respect to such Disclosed Mortgages. BUYER
may pay off and satisfy the Disclosed Mortgage(s) on the property on or after
the Possession Date, or it may continue to maintain the Disclosed
Mortgage(s) and make all payments due until the Disclosed Mortgages are paid off
and satisfied, provided that if SELLER so requests in writing, BUYER, with
EMPLOYER’s agreement will pay off any Veterans Administration mortgage in order
to enable SELLER to retain its Veterans Administration mortgage eligibility,
provided that SELLER refunds any portion of BUYER’s offer attributable to the
assumability of the Veterans Administration mortgage. When BUYER pays off any
Disclosed Mortgage, SELLER shall be responsible for obtaining from the mortgage
lender any deposit or escrow fund held by the lender for real estate taxes,
insurance or other items, but if the BUYER continues to maintain the mortgage
after the Possession Date, SELLER will receive credit for any escrow funds, will
assign its right to receive such amounts to BUYER and will otherwise cooperate
in having any such amounts paid to BUYER when the Disclosed Mortgage is paid off
including, if necessary, SELLER’S authorization of the BUYER to endorse any
checks in your name for money properly due the BUYER. In the event that the
said loans are not paid off prior to June 1, 2008, BUYER agrees to pay said
loans at that time.
8. Warranties and Representations of SELLER. As an inducement to BUYER to enter
into this agreement, SELLER represents, warrants and guarantees to BUYER that
the statements contained in this paragraph are true, correct and complete:
--------------------------------------------------------------------------------
8.1. Authority. SELLER is an individual who holds lawful title to the property,
the property is not subject to any options to purchase, rights of first refusal,
written or oral agreements of sale or other commitments or obligations of
purchase and SELLER has the full power and authority to transfer the property to
BUYER. This agreement and the sale of the property hereunder are not subject to
the approval of any party (other than any lender of a Disclosed Mortgage).
8.2. Good and Marketable Title to Property. SELLER warrants that the warranty
deed to be issued by SELLER will vest good and marketable title to the property,
in fee simple, (and such as will be insurable by any responsible title company
at regular rates) free and clear of all liens, encumbrances, bankruptcies,
judgments, mortgages, security interests, title retention agreements,
restrictions, conditions, charges, equities and claims and any other
encumbrances affecting the property whether or not they are of record, including
common walls, fences, driveways and other common areas or facilities shared with
a neighbor, encroachments, easements and rights of way, except for any Disclosed
Mortgages.
8.3. Outstanding Claims and Disputes. There have been no repairs, additions or
improvements made, ordered or contracted to be made to the premises, nor are
there any appliances or fixtures attached to said premises which have not been
paid for in full, and there are no outstanding or disputed claims for any such
work or items.
8.4. Possession. No person or entity other than SELLER is in possession or
entitled to possession of the property other than pursuant to any leases assumed
by BUYER pursuant to subparagraph 4.4 above.
8.5. No Restrictions on Use. There are no liabilities, causes of action, unpaid
taxes, zoning restrictions, encumbrances, or other claims or conditions, either
pending or threatened, which would affect BUYER or its ability to use the
property as a residence and for any related purposes, nor is the present use of
the property subject to the approval of any party.
8.6. Purchase Money Obligations. There are no purchase money obligations being
created in this transfer.
8.7. Accessibility of Utilities, Etc. All water, public sewage or septic systems
for sanitary sewage, storm sewers, electricity, gas service and any and all
public utilities are available on the property. The property is served by a
community sewage system, or if no community sewage system is available, all
necessary permits, approvals, etc. for the operation of the septic system or
other private sewage system on the property have been obtained. If there is a
well, the water supply to the property is both potable and ample under local
standards. There has been no work done, or notice received that work is to be
done, by any governmental body or authority or at its direction, in connection
with the installation of sewer lines or water lines, or for improvements such as
paving or repairing of streets, curbs or sidewalks or similar improvements.
--------------------------------------------------------------------------------
8.8. Condemnation. SELLER has received no written or official notice and has no
knowledge of any condemnation, eminent domain, abatement or any other legal or
equitable proceeding against the whole or any part of the property.
8.9. Improvements. There are no known material defects in the physical condition
or structure of the property, all operational components and systems are in good
working order, and the property is not infested with termites or other pests to
the best of Seller’s knowledge. The basement, crawl space and any similar lower
level of the property is not subject to water penetration. All improvements on
the property conform to and comply with all applicable codes, laws and
ordinances. SELLER has received no notice from any governmental agencies or
authorities and has no knowledge of any violations concerning the condition
and/or use of the property which have not been corrected by SELLER.
8.10. Zoning and Other Ordinances. The property is zoned “RESIDENTIAL” in
accordance with the applicable effective zoning ordinance which permits the use
of the property as a single-family residence and related activities. SELLER has
not received any notice and has no knowledge of any violations of any zoning,
housing, building, safety or fire ordinances or regulations and all zoning
permits or variances, building permits, setback agreements, and all other
similar documents required for the property and the improvements thereon have
been obtained.
8.11. Certificate of Occupancy. A certificate permitting occupancy of the
property may be required by the municipality and/or governmental authority. If a
certificate is required, SELLER shall, at SELLER’s expense and within ten
(10) days of the execution of this agreement, order the certificate for delivery
to BUYER on the Possession Date.
8.12. Litigation; Compliance with Law. There is no litigation, proceeding,
investigation or claim pending or threatened, including, but not limited to, any
bankruptcy or foreclosure proceedings, which would affect: (a) the property;
(b) SELLER’s title to the property; (c) the financial condition of SELLER; or
(d) SELLER’s ability to perform this agreement, and SELLER has no reasonable
grounds to know of any basis for any such litigation, proceeding, investigation
or claim.
8.13. Marital Status. SELLER(s), if husband and wife, have never been divorced
from each other; are not separated from each other and no divorce proceedings
are pending. If the SELLER acquired title alone, he/she has not been married
since the date of acquiring title. If SELLER (or either or them) were previously
divorced, no support payments are due and owing under the terms of any existing
marital settlement agreement and the divorce proceedings filed of No __NA____ in
the ___NA__________________ and the decree dated ____NA______________ disposed
of all marital property, equitable distribution, alimony, child support and any
other matters of a marital nature involving the SELLER(s). Any details will be
kept confidential and used only as necessary to complete the sale of the
property.
8.14. No Default. SELLER is not in default under any mortgage, land contract,
deed or any other financing instrument encumbering the property, and from the
date hereof
--------------------------------------------------------------------------------
through the Possession Date SELLER shall make all payments required to be made
under such obligations in the manner and at the times provided thereunder and
shall perform all of his other obligations thereunder as mortgagor, vendee or
otherwise as the case may be.
8.15. Boundaries. The structures and improvements are within the boundaries of
the property, and there is no dispute with adjoining property owners as to the
location of boundary lot lines.
8.16. Hazardous Substances. The property does not contain asbestos, lead paint,
radon gas or urea formaldehyde foam insulation, any mold , any allergen nor any
other hazardous or toxic materials or gas. If it is discovered that the property
does contain any such substances, SELLER will indemnify, defend and hold
harmless BUYER (and its officers, directors, members, employees and affiliates)
from any and all costs which any of them may incur and any and all liabilities,
obligations, debts, causes of action, lawsuits or other claims, whether asserted
directly against BUYER or as a successor to SELLER or any present or prior owner
in the chain of title to the property (including reasonable attorney’s fees and
expenses incurred in the defense thereof) arising out of or resulting from the
presence of such substances and the cost of removal or remediation thereof.
8.17. Flood Plain of Flood Zone. The property is not located within a so-called
“flood plain area” or flood zone, and surface storm waters drain from the
property in such manner as is permissible by government agencies having
jurisdiction.
8.18. Insurability. The property is insurable at standard rates for normal
hazards of fire, extended coverage and liability.
8.19. Disclosures. All material information regarding the property, including,
but not limited to, its physical condition and legal title, any known pest
infestation or presence of radon gas, lead-based paint or other hazardous
substances, has been disclosed by SELLER or its agents to BUYER in this
agreement or in an addendum attached hereto. SELLER will pay any costs, damages
or expenses incurred by BUYER as the result of any failure of SELLER or its
agents to disclose such material information, and BUYER reserves the right to
terminate this agreement without further liability to SELLER in the event of any
failure to fully disclose any material information regarding the property.
8.20 The warranties and representations of SELLER contained in this document
shall be correct and complete in all material respects on and as of the
Possession Date with the same force and effect as though such warranties and
representations were made on and as of the Possession Date, and SELLER shall
deliver to BUYER a certificate dated as of the Possession Date to that effect.
Any fact or information which modifies or contradicts any of these
representations and warranties must be in writing and attached to this
Agreement. If any such statement or disclosure is unacceptable to BUYER, BUYER
reserves the right to not countersign this Agreement and not pay the equity
until such matter is resolved to the BUYER’S satisfaction.
--------------------------------------------------------------------------------
8.21. Encumbrances. SELLER has not taken any action which would create an
additional encumbrance of any kind against the property.
8.22. Mechanics’ Lien. All labors and materials supplied in connection with any
repairs, alterations, additions or other work affecting the property have been
paid in full and no mechanics’ or similar liens have been or can be filed
against SELLER or the property.
9. Title to the Property.
9.1. Conveyance of Title. Within ten (10) days of receipt of Deed Document
Package SELLER will execute and deliver to BUYER or its nominee a Power of
Attorney, a warranty deed or its equivalent conveying good, clear and marketable
title to the property to the BUYER or its nominee. The obligation to execute and
deliver the deed will be binding upon SELLER and SELLER’s guardians, heirs,
executors, personal representatives or assigns.
9.2. Defects in Title. BUYER will notify SELLER if it discovers any liens,
encumbrances, encroachments or other defects in title which arise prior to the
Possession Date, would prevent BUYER from re-selling and conveying good and
marketable title to the property. SELLER will have thirty (30) days after notice
to remove any such defects to the satisfaction of BUYER, any potential third
party purchaser or lender, and their respective attorneys, provided that if the
title defect can be removed or resolved at an expense of Two Thousand ($2,000)
Dollars or less, BUYER may, at its option, remove the title defects and recover
the cost of removal from SELLER. If such title defects cannot be removed within
one hundred-twenty (120) days, BUYER may terminate this agreement and SELLER
will repay to BUYER any SELLER’s Equity or other amounts received from BUYER
hereunder and SELLER will indemnify, defend and hold harmless BUYER (and its
officers, directors, members, employees and affiliates) from any and all costs
which any of them may incur and any and all liabilities, obligations, debts,
causes of action, lawsuits or other claims, whether asserted directly against
BUYER (and its officers, directors, members, employees and affiliates),
including reasonable attorney’s fees and expenses incurred in the defense
thereof) arising out of or resulting from this agreement or any agreement
entered into by BUYER for the resale of the property. In the event that the
equity is repaid to the BUYER, Buyer will reconvey the property back to the
SELLER.
10. Conditions Precedent to BUYER’s Obligations. The obligations of BUYER to
consummate this transaction are subject to the satisfactory fulfillment and
completion of the following conditions precedent prior to the closing date:
10.1. Good Title to Property. On the Possession Date, SELLER will own and have
good and marketable title to the property, in fee simple, (and such as will be
insurable by any responsible title company at regular rates) free and clear of
all liens, encumbrances, bankruptcies, judgments, mortgages, security interests,
title retention agreements, restrictions, conditions, charges, equities and
claims, except for Disclosed Mortgages and those encumbrances, rights of way,
etc. that do not adversely affect the property. Any and
--------------------------------------------------------------------------------
all defects in the title to the property shall have been cured by SELLER. The
description of the property set forth in Appendix A is consistent in all
respects with the survey and contains all of the property.
10.2. Right to Sell. The property is not subject to any options to purchase,
rights of first refusal, written or oral agreements of sale, or other
commitments or obligations of purchase and SELLER has the full power and right
to execute, deliver and implement this agreement.
10.3. Inspections and Reports. BUYER has had an opportunity to inspect the
property and is satisfied with the results and/or reports received from all such
inspections, surveys, tests and studies and any remediation or repair required
as a result of such inspections, surveys, tests and studies has been completed
to the satisfaction of BUYER.
10.4. Warranties and Representations. The warranties and representations of
SELLER hereunder shall be true and correct in all material respects on and as of
the Possession Date and SELLER shall deliver to BUYER a signed certificate
confirming that fact.
10.5. Compliance. SELLER shall have complied with all of its warranties and
representations and duly performed in all material respects all of the terms and
conditions set forth in this agreement, including the delivery of documents,
properties and other materials and instruments required or contemplated by this
agreement.
10.6. Default. SELLER shall not be in default under any provisions of this
agreement or any related agreements.
10.7. Satisfactory Actions. All actions to be taken by SELLER in connection with
the consummation of the transactions contemplated hereby and all agreements,
instruments and other documents necessary or appropriate to consummate the
transactions contemplated by this agreement and any related agreements have or
will be taken or delivered and such actions and documents and all other related
legal matters have been approved by counsel for BUYER.
10.8. Insolvency. SELLER has not, on or prior to the Possession Date, become
insolvent or filed a voluntary petition in bankruptcy, or a voluntary petition
seeking reorganization, had an involuntary petition in bankruptcy filed against
it, made an assignment for the benefit of creditors or applied for the
appointment of a receiver or trustee of all or a substantial portion of its
assets.
10.9. Material Change. There shall not be any facts or circumstances discovered
which substantially or adversely affect the property or BUYER’s obligations
under this agreement.
10.10 In the event that any of the foregoing conditions precedent are not
satisfied, BUYER shall have the option to either (1) waive the same by an
appropriate writing delivered to SELLER on or prior to the Possession Date and
proceed to consummate the
--------------------------------------------------------------------------------
transaction contemplated herein; or (2) declare this agreement null and void, in
which case the BUYER shall have no further rights or obligations hereunder and
any amounts paid by BUYER to SELLER shall be promptly repaid by SELLER to BUYER.
11. Default. In the event of default by SELLER or BUYER, the following shall
determine their respective rights and obligations:
11.1. By SELLER. BUYER, at BUYER’s sole option, may elect to:
11.1.1. Waive any claim for loss of bargain, in which event SELLER agrees to
reimburse BUYER for all direct, out-of-pocket costs and expenses incurred by
BUYER in connection with the proposed transaction including, but not limited to,
the costs of any environmental investigations or remediation, title examination
fees and reasonable attorney’s fees and expenses, in which event this agreement
shall terminate and be of no further force and effect.
11.1.2. In lieu thereof, BUYER may elect either or both of the following
remedies: (a) an action for specific performance; and/or (b) an action at law
for damages, including loss of bargain, all consequential damages and all direct
out-of-pocket costs and expenses incurred by BUYER, provided, however, that no
such election shall be final or exclusive until full satisfaction shall have
been received by BUYER.
11.2. By BUYER. SELLER, at SELLER’s sole option, may elect to terminate the
agreement and refund to BUYER any SELLER’s Equity or other amounts previously
paid to SELLER by BUYER, in which event the agreement shall be of no further
force and effect.
12. Residential Lead-Based Paint Hazard Reduction Act Notice Required For
Properties Built Before 1978.
_X_ NOT APPLICABLE
___ APPLICABLE — PROPERTY BUILT BEFORE 1978
12.1 SELLER represents that: (check 1 or 2)
___ 1. SELLER has no knowledge concerning the presence of lead-based paint
and/or lead-based paint hazards in or about the property.
___ 2. SELLER has knowledge of the presence of lead-based paint and/or
lead-based paint hazards in or about the property. (Provide the basis for
determining that lead-based paint and/or hazards exist, the location(s), the
condition of the painted surfaces, and other available information concerning
SELLER’s knowledge of the presence of lead-based paint and/or lead based paint
hazards.)
--------------------------------------------------------------------------------
12.2. Records/Reports (check 1 or 2)
___1. SELLER has no reports or records pertaining to lead-based paint and/or
lead-based paint hazards in or about the property.
___2. SELLER has provided BUYER with all available records and reports
pertaining to lead-based paint hazards in or about the property. (List
documents)
12.3 BUYER’s Acknowledgment
___ 1. BUYER has received the pamphlet Protect Your Family From Lead in Your
Home and has read the Lead Warning Statement contained in this Agreement (See
Environmental Notices).
BUYER’s Initials ______________________ Date _____________________
___ 2. BUYER has reviewed SELLER’s disclosure of known lead-based paint and/or
lead-based paint hazards, as identified in paragraph 12.1 and has received the
records and reports pertaining to lead-based paint and/or lead-based paint
hazards identified in paragraph 12.2.
BUYER’s Initials ______________________ Date _____________________
13. No Brokerage Commission. SELLER represents and warrants that any listing
agreement covering the property has an exclusion clause that provides that no
commission is payable to any broker as a result of the sale of the property by
SELLER to BUYER. SELLER shall indemnify, defend and hold harmless BUYER from any
claim for a brokerage commission.
14. SELLER’s Acceptance. This agreement shall not be binding upon BUYER unless
BUYER shall have received (1) one original or copy hereof executed and
acknowledged by SELLER on or before the expiration date specified in BUYER’s
offer letter to SELLER and BUYER shall have executed and dated the originals. If
the agreement has been modified or is otherwise not acceptable to BUYER, BUYER
may terminate this agreement and shall have no further obligations to SELLER
hereunder.
15. Survival of Warranties and Representations. The warranties, representations,
terms and conditions of this agreement shall not merge into the deed and all of
the warranties and representations contained herein shall survive the closing of
this transaction.
16. Governing Law. This agreement and the transactions contemplated herein shall
be governed and construed in accordance with the laws of the state in which the
property is located.
17. Rights of Successors and Assigns. This agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors, assigns and legal
--------------------------------------------------------------------------------
representatives. This agreement may not be assigned by either party without the
prior written consent of the other party.
18. Tender and Notices. Formal tender of deed and purchase price are hereby
waived by the parties. All notices, tenders, demands or other communications
delivered or tendered under this agreement shall be in writing and shall be
sufficient if sent by registered or certified mail with return receipt requested
or by a recognized courier service to the parties at the addresses shown in the
first paragraph hereof. Such notice shall be sufficient, whether accepted at the
address referred to or not, if tendered at such address during the normal
business hours. The addresses may from time to time be changed by either party
giving written notice pursuant to the terms of this paragraph.
19. Entire Agreement of Parties/Miscellaneous. This agreement cannot be changed
orally and constitutes the entire contract between the parties hereto. Any prior
written or oral agreements, letters or other documents shall be considered to
have been merged in this agreement and shall be of no further force and effect.
This agreement shall not be modified nor changed by any expressed or implied
promises, warranties, guaranties, representations or other information unless
expressly and specifically set forth in this agreement or an addendum or
amendment thereto properly executed by the parties. Failure of any party to
insist upon strict performance of this Agreement at any given time will not act
as a waiver of default. If there are two or more persons signing this Agreement
as SELLER, each signer designates and authorizes the other as his/her agent to
receive notices and payments and also give receipts for such payments under this
Agreement. This Agreement can not be assigned by the SELLER. This is not a Third
Party Agreement meaning the SELLER, BUYER and EMPLOYER are the only parties
having any enforceable rights in this Agreement.
20. Paragraph Headings. The headings referring to the contents of paragraphs of
this agreement are inserted for convenience and are not to be considered as part
of this agreement nor a limitation on the scope of the particular paragraphs to
which they refer.
21. FIRPTA Certification. SELLER, and each of them, hereby certify under
penalties of perjury that:
a. SELLER, and each of them, are not nonresident alien(s) for purposes of U.S.
income taxation. If any SELLER IS a nonresident alien for purposes of U.S.
income taxation, please initial the following blank ________________.
b. SELLER’s taxpayer identification (social security) number(s) is (are)
###-##-#### and ###-##-####.
c. SELLER’s home address is 714 Avila Dr., Davidsonville, MD 21035.
SELLER understands that this certification may be disclosed to the Internal
Revenue Service by the BUYER and that any false statement you have made here
could be punished by fine, imprisonment or both (Section 1445 of the Internal
Revenue Code provides that the buyer of U.S. real property interests must
withohold tax if the seller is a foreign person. SELLER, and each of them make
the foregoing certification to inform the buyer that no withholding is
required.)
--------------------------------------------------------------------------------
22. Facsimile Execution. This Agreement may be executed by the facsimile
transmission and/or scanned email copy, and/or exchange, of a document or
documents signed by the parties to be obligated, which shall be binding upon the
transmission thereof. The parties agree to promptly provide one another with
originals of any documents thus transmitted, as applicable.
III. EXECUTION
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have read
and duly executed this agreement the day and year first above written.
SELLER
/s/ John V. Howard
John V. Howard
/s/ Val M. Howard
Val M. Howard
BUYER
AMERICAN INTERNATIONAL
RELOCATION SOLUTIONS, LLC
BY:
[unreadable signature]
Duly authorized
LEAD NOTICES: (For Properties built before 1978)
Lead Warning Statement: Every purchaser of any interest in residential real
property on which a residential dwelling was built prior to 1978 is notified
that such property may present exposure to lead from lead-based paint that may
place young children at risk of developing lead poisoning. Lead poisoning in
young children may produce permanent neurological damage, including learning
disabilities, reduced intelligence quotient, behavioral problems, and impaired
memory. Lead poisoning also poses a particular risk to pregnant women. The
seller of any interest in residential real property is required to provide the
buyer with any information on lead-based paint hazards from risk assessments or
inspections in the seller’s possession and notify the buyer of any known
lead-based paint hazards. A risk assessment or inspection for possible
lead-based paint hazards is recommended prior to purchase.
Lead Hazard Disclosure Requirements: In accordance with the Residential
Lead-Based Paint Hazard Reduction Act, any seller of property built before 1978
must provide the buyer with an EPA-approved lead hazards information pamphlet
titled Protect Your Family From Lead in Your Home and must disclose to the buyer
and the seller’s agent the known presence of lead-based paint and/or lead-based
paint hazards in or on the property being sold, including the basis used for
determining that lead-based paint and/or lead-based paint hazards exist, the
location of lead-based paint and/or lead-based paint hazards, and the condition
of painted surfaces. Any seller of a pre-1978 structure must also provide the
buyer with any records or reports available to the seller pertaining to
lead-based paint and/or lead-based paint hazards in or about the property being
sold, the common areas, or other residential dwellings in multi-family housing.
The Act further requires that before a buyer is obligated to purchase any
housing constructed prior to
--------------------------------------------------------------------------------
1978, the seller shall give the buyer 10 days (unless buyer and seller agree in
writing to another time period) to conduct a risk assessment or inspection for
the presence of lead-based paint and/or lead-based paint hazards. The
opportunity to conduct a risk assessment or inspection may be waived by the
buyer, in writing. Neither testing nor abatement is required of the seller.
Housing built in 1978 or later is not subject to the Act.
APPENDIX A
Description of Property
Street Address:
714 Avila Drive
Davidsonville, MD 21035
Recording Reference: ______________________________ Tax Parcel Numbers:
_______________
Legal Description:
See Schedule A
Liens, Encumbrances, Mortgages, Security Interests, Title Retention Agreements
Restrictions, Conditions, Charges, Equities and Other Claims on Property:
Citimortgage - #2001708320-3 — first lien with approximate balance as of
12/10/07 at $455,457.78
Sandy Spring Bank — second lien with solomonjohnny@example.net.
--------------------------------------------------------------------------------
|
202 F. Supp. 849 (1962)
Edwin F. KLINE, Executor of the Last Will and Testament of Fannie E. Kline, deceased, Plaintiff,
v.
UNITED STATES of America, Defendant.
Civ. A. No. 985-W.
United States District Court N. D. West Virginia, at Wheeling.
March 12, 1962.
Charles P. Mead, Wheeling, W. Va., for plaintiff.
Robert E. Maxwell, U. S. Atty., Fairmont, W. Va., Earl L. Huntington, Atty., Dept. of Justice, Washington, D. C. (Charles K. Rice, Asst. Atty. Gen., James P. Garland, Lyle M. Turner, Attys., Dept. of Justice, Washington, D. C., on the brief), for defendant.
CHARLES F. PAUL, District Judge.
This is a suit for the refund of $84,162.47 paid July 29, 1959, by the plaintiff *850 on account of the assessment of a deficiency in Federal Estate Taxes. The deficiency resulted from the disallowance of a deduction claimed in the Estate Tax Return of some $285,000.00, as the value as of the time of death of a charitable remainder in a Trust established by the Will of plaintiff's decedent. There is no dispute about the amount and the fact that it resulted wholly from such disallowance. All statutory conditions precedent to the bringing of suit have been performed, and the jurisdictional facts exist.
The Government filed its motion for judgment on the pleadings. The plaintiff filed his motion for summary judgment, supported by a detailed affidavit reciting facts which he deemed pertinent. At the most recent hearing on the motions, the Government's attorneys stated that the Government had examined and investigated the factual statements contained in the affidavit, and that they had no counter-affidavit to file and did not contest the factual allegations, but that they did vigorously contest their relevancy and pertinency. Under the circumstances, and to admit the factual allegations insofar as they may be pertinent or relevant, I will treat the Government's motion as a motion for summary judgment, and the case as one upon final submission.
The testatrix, Fannie E. Kline, died November 27, 1957, aged 94. By her Will, she disposed of her tangible personal property, inconsequential in amount, to her son, Edwin F. Kline, then aged 74 and a bachelor.
By Item III of her Will, the testatrix established a Trust of the entire residue of her estate (the gross amount of which was approximately $395,000.00) for the principal benefit of her son for life, and, in Item V, disposed of the remainder interest in the Trust to qualified charities. The pertinent provisions of Item III are set forth in the margin.[1]
*851 The Government contends that the Will's provisions permit invasions of the corpus for the son's benefit during his lifetime, without limitation by any ascertainable standard, and that the value of the charitable remainder cannot be stated in definite terms of money. The Government bases its position upon the applicable statutes,[2] Treasury Regulations Sec. 20.2055-2, and a line of cases stemming from Merchants Nat. Bank of Boston v. Commissioner, 320 U.S. 256, 64 S. Ct. 108, 88 L. Ed. 35, and Henslee v. Union Planters National Bank & Trust Co., 335 U.S. 595, 69 S. Ct. 290, 93 L. Ed. 259.
The plaintiff contends that, properly construed, the Will limits invasion of corpus during the lifetime of the son and for his benefit to sums necessary for his proper maintenance and support and to meet emergencies such as illness, etc.; that the standard is sufficiently definite to permit inquiry into the circumstances as of the date of death and subsequent thereto; and that such inquiry will show that the possibility of invasion of corpus is so remote as to be negligible. The plaintiff relies upon the line of cases stemming from Ithaca Trust Co. v. United States, 279 U.S. 151, 49 S. Ct. 291, 73 L. Ed. 647.
The cases considered, in chart form, showing the crucial language of the testamentary instrument, pertinent findings with respect to the life beneficiary, and the prevailing party, with very brief comment, are collected and cited in Appendix I hereto.
If I could find, from a proper construction of the Will, that the authorized invasions of corpus were limited as contended for by plaintiff, I would have no hesitancy in holding that the possibilities of diminution of the values of the charitable remainders by invasions of corpus for the benefit of the life beneficiary are remote, and that it is as certain as human affairs can be made certain that charity will receive the entire corpus of the estate. I would base such a conclusion upon the following factual findings:
(1) At 74, Edwin F. Kline's life expectancy was 7.23 years; he is a retired lawyer and, relative to his income from his own investments, his living habits and expenses were modest.
(2) At the time of his mother's death, Kline owned investment real estate from which his net annual income was $5,600.00; shares of stock, principally in national corporations whose securities are listed on the New York Stock Exchange, aggregating in value in excess of $400,000.00; life insurance with cash value in excess of $4,000.00; U. S. Treasury Bonds, Series E, in the face amount of $150,000.00; and bank accounts aggregating in excess of $13,000.00.
(3) For the years 1955-56-57 his personal expenditures were less than 25% of his average adjusted gross income from investments, and in each of those years, as in prior years, he added to his capital investments from savings.
(4) Prior to his mother's death, Kline lived with and took care of her in their relatively modest home, with singular devotion. He had no dependents, and his sole next of kin were three first cousins and the children of deceased first cousins on his paternal side, and children of first cousins on his maternal side, to none of whom he ever made any inter vivos gifts.
(5) For the years prior to her death, Mrs. Kline's contributions to the joint *852 living expenses were less than one-third of her annual separate income.
(6) Edwin F. Kline's principal interests were intellectual and cultural, and his business activities limited to the careful and studied investment of his own and his mother's funds.
If then, withdrawals from the trust estate established by his mother's Will are fairly limited to the son's needs and prospective needs, based upon his established mode and standard of living, it would seem apparent that the trustees would have a hard time justifying payments from income above the minima provided by the Will, to say nothing of invasions of corpus.
However, I am forced to conclude, from the language of the Will, that the authority of the trustees to make distributions to the life beneficiary with respect to either income or corpus is not limited by the life beneficiary's needs, determined with reference to his prior standard of living. As a result, I am also forced to conclude, under the applicable decisions, that the gifts-over to charities are not sufficiently certain in monetary value to qualify as charitable deductions for Estate Tax purposes.
The words "to the same generous extent that I, if living, could do * * *", modifying the trust obligations for maintenance and support, speak of the future, not the past. They comport change, not simply a continuance of an established mode of living and the following of a custom of the testatrix to contribute toward it. These words amount to a direction to the trustees to apply a subjective test of desire, not an objective test of need. I realize that this Will does not require the distribution of all of the income. It does require the payment of the annuity, the upkeep of the home property, and the exoneration of the income tax impact on trust payments to the beneficiaryand it requires these whether the income is sufficient or not. If I could construe this Will to restrict the application of the quoted words to the exercise of the trustees' discretion in the distribution of excess income, the words would lose their effect upon this question. I am not able so to construe this Will. The provisions with respect to distributions from income and corpus are inextricably mingled, and the injunction to the trustees to exercise generosity, in their consideration of what constitutes proper maintenance and support, applies equally to both. It might prove interesting to try to calculate the probability against the chance that this man of means, culture and sobriety, would, in the future, substantially change his standard of living; but such a speculation would be fruitless. The possibility of change exists, and, under this Will, if it occurs, the trustees are required to make distributions to meet it.
The testatrix expressly recognized the possibility that the beneficiary might want to forsake the modest home and acquire another. While any such newly acquired home would remain part of the corpus of the estate, it would, if more elaborate, require greater expenditures for upkeep, taxes and insurance, and the word "suitable", in the light of this man's means, does not sufficiently qualify the character of the substituted home to limit the cost and expense.
The specific direction and authorization to invade corpus as "circumstances may require" to defray the expenses of illness, and "also in other unforeseen circumstances", coupled with the fact that the co-trustee has discretion, unfettered by court restrictions, to decide the extent of invasion of corpus, strongly militates in favor of a holding that no ascertainable part of this corpus is immune from invasion. DeCastro's Estate, 2 Cir., 155 F.2d 254 and Commerce Trust Company v. United States, W.D.Mo., 167 F. Supp. 643 are particularly pertinent on this point.
The final paragraph of the portions of Item III of the Will quoted in note 1. does not detract in any way from the unfettered discretion of the trustees. It *853 simply limits the exercise of that discretion to the co-trustee, who is the attorney for the estate. If he should fail to qualify and act, his place would be taken by the nominee of the life beneficiary. I find no limiting effect in the words "as circumstances may require", since the scope of the circumstances is so broadly painted in the language of the Will as a whole. Indeed, with all of the language protecting the trustees in their discretionary powers, it is difficult to see how the remainder charities could successfully surcharge the trustees' accounts for any distribution they might possibly make.
The defendant's motion for summary judgment is sustained, and judgment of dismissal with prejudice, at the costs of the plaintiff, may be entered accordingly.
APPENDIX I
SUPREME COURT CASES
STANDARD FOR INVASION, LIFE
CASE CRUCIAL LANGUAGE BFCY HOLDING & COMMENT
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Ithaca Trust Co. v. any sum "necessary to suitably widow for taxpayer. "Standard
United States, 279 maintain her in as much was fixed in fact and capable
U.S. 151, 49 S.Ct. comfort as she now enjoys". of being stated in
291, 73 L. Ed. 647 definite terms of money,"
(1929); and trust income sufficient.
Merchants National "comfort, support, maintenance, widow, 67, of for government. No fixed
Bank of Boston and/or happiness"; liberal means standard because of "happiness"
v. C. I. R., 320 U.S. discretion granted to language and liberal
256, 64 S. Ct. 108, provide for wife, whose interest instruction to trustee.
88 L. Ed. 35 is to come first.
(1943);
Henslee v. Union $750 a month from trust income, mother, 85, of for government. Remote
Planters National to be used as beneficiary frugal habits, possibility of wasting corpus,
Bank & Trust Co., "sees fit"; invasion of corpus and means but still possibility.
335 U.S. 595, 69 S. for her "pleasure, comfort,
Ct. 290, 93 L.Ed. and welfare". First object of
259 (1949). trustees to provide for beneficiary
as "she may desire".
*854
CASES FOR AND IN THE FOURTH CIRCUIT
STANDARD FOR INVASION,
CASE CRUCIAL LANGUAGE LIFE BFCY HOLDING & COMMENT
-----------------------------------------------------------------------------------------------------------
Helvering v. Union "additional sums for the proper widower, 76 for government. However,
Trust Co., 125 F.2d care and comfort of the husband, another ground controls
401 (1942), cert. should illness, accident the decision.
denied 316 U.S. or misfortune so require:"
696, 62 S. Ct. 1292,
86 L. Ed. 1766;
C. I. R. v. Robertson's "if in the judgment of the said sister, 76, for taxpayer. Looks to actualities,
Estate, 141 F. trustee, the best interests of wife of clergyman holds no possibility
2d 855 (1944); my sister should so require." and of of charity not getting
means all. Validity of case
somewhat questionable because
rule of Dobson v.
C. I. R., 320 U.S. 489, 64
S. Ct. 239, 88 L. Ed. 248;
321 U.S. 231, 64 S. Ct. 495,
88 L. Ed. 691, overruled by
statute.
Bowers v. South to pay, if trust income be insufficient, 2 sisters, for taxpayer. Actualities,
Carolina National monthly sums to sisters 1 cousin, including post-death evidence
Bank of Greenville, and for their medical expenses elderly (a probate order),
4 Cir., 228 F.2d 4 and for upkeep of looked to.
(1955); house.
Mercantile-Safe for "comfortable support" and elderly Ithaca Trust controls, for
Deposit, etc. v. "in event of accident, illness, sister, of taxpayer. Relies heavily
United States, 141 misfortune, or other emergency." own means on CCA 4 decisions, looks
F.Supp. 546 (D.C. Beneficiary of primary to actualities and decides
Md.1956). concern, but trustee no invasion likely.
bound to consider her entire
resources before invading.
*855
CASES FROM OTHER CIRCUITS
STANDARD FOR INVASION,
CASE CRUCIAL LANGUAGE LIFE BFCY HOLDING & COMMENT
-----------------------------------------------------------------------------------------------------------
Hartford - Connecticut for what trustee deems "necessary widow for taxpayer. Under Connecticut
Trust Co. v. or advisable for her law, words tantamount
Eaton, 36 F.2d 710 comfortable maintenance and to "station in
(2nd Cir., 1929); support." life"; hence Ithaca Trust
controls.
Gammons v. Hassett, "so much as my wife may need widow, 93, of for government. "Extremely
121 F.2d 229 or desire" own means remote" possibility
(1st Cir., 1941) of invasion, but "desire"
cert. denied 314 U. imports subjectivity.
S. 673, 62 S. Ct.
136, 86 L. Ed. 539;
C. I. R. v. Bank of $250 a month from trust property sister, 79, for taxpayer. Majority
America, 133 F.2d and if required "by reason $25,000 net says "seth98@example.com."
753 (9th Cir., of accident, illness, or other worth Dissent.
1943); unusual circumstances,
more. Beneficiary uppermost
in mind.
C. I. R. v. Wells "sickness, accident, want or niece, 54, for taxpayer. Follows
Fargo Bank & other emergency"; $54,000 net Bank of America, above,
Union Trust Co., worth says then-recent Merchants
145 F.2d 130 (9th Bank distinguishable.
Cir., 1944);
Wells Fargo Bank "in event of sickness, accident, widow, 60, for taxpayer. Tax Court
& Union Trust Co. want, or other emergency" thrifty, reversed because it considered
v. C. I. R., 145 F.2d healthly, own post-death events,
132 (9th Cir., means (invasion).
1944);
*856
STANDARD FOR INVASION,
CASE CRUCIAL LANGUAGE LIFE BFCY HOLDING & COMMENT
-------------------------------------------------------------------------------------------------------
DeCastro's Estate if income not enough, "due to widow, 75, for government. Case
v. C. I. R., 155 F.2d illness, accident or other unforeseen frugal governed by Supreme
254 (2nd Cir., emergency"; no one Court's decision in Merchants
1946) cert. denied to call in question propriety Bank.
329 U.S. 727, 67 S. of wife's invasion.
Ct. 82, 91 L. Ed.
630.
Newton Trust Co. "use and benefit". widow for government. "Use and
v. C. I. R., 160 F.2d benefit" furnishes no ascertainable
175 (1st Cir., standard;
1947); Massachusetts cases don't
confine standard. Excellent
analysis and review.
National Bank of "maintain her in our home or widow, 82 for government. Amount
Commerce of San a location of her choosing, provide of corpus that will remain
Antonio v. Scofield, with necessities and comforts a matter of conjecture,
169 F.2d 145 (5th in life to which she is accustomed"; not accurately calculable;
Cir., 1948) cert. trustee to provide strong dissent.
denied 335 U.S. "liberally".
907, 69 S. Ct. 410,
93 L. Ed. 441;
Berry v. Kuhl, 174 "accident, illness, or other widow, then for taxpayer. Uncertainty
F.2d 565 (7th Cir. cause" . . . "treatment, daughter, of of "other causes" cured
1949); support, maintenance". means, frugal by later words referable
to accustomed standard
of living. Minton, J.
*857
STANDARD FOR INVASION,
CASE CRUCIAL LANGUAGE LIFE BFCY HOLDING & COMMENT
--------------------------------------------------------------------------------------------------------
Lincoln Rochester "necessary for her proper nurse, 72, for taxpayer. Standard
Trust Co. v. C. I. R, care, support, and maintenance". small means set up is referable to her
181 F.2d 424 (2nd accustomed mode. Clark,
Cir., 1950); J.
Blodget v. Delaney, "for her comfort and welfare". sister, 84 for taxpayer. Relying on
201 F.2d 589 (1st blind Massachusetts law, Ithaca
Cir., 1953). Trust held controlling.
Lincoln Rochester "unusual demands, emergencies" widow for taxpayer. Medina, J.,
Trust Co. v. McGowan, . . . "from sickness, considers issue of post-death
217 F.2d accident or failure of investments". evidence; decides
287 (2nd Cir., trustee's discretion adequately
1954). bound. Swan dissents.
Third National if trustee in "its opinion shall mother, 69, for government. "Deem
Bank and Trust deem wise". frugal wise" furnishes no standard.
Co. of Springfield
v. United States,
228 F.2d 772 (1st
Cir., 1956);
Seubert v. Shaughnessy, "for any purpose which may sister, 73, for government. Clark, J.
233 F.2d add to her comfort or convenience" maiden, frugal, looks at nothing beyond
134 (2nd Cir., Beneficiary filed an affidavit of own the will; "add" the crucial
1956); to effect that she had means word.
no intention of invading.
*858
DISTRICT COURTS
STANDARD FOR INVASION
CASE CRUCIAL LANGUAGE LIFE BFCY HOLDING & COMMENT
------------------------------------------------------------------------------------------------------
In re Bartlett's Estate, "best interests" during "illness servant, 71 for government. "Best
153 F.Supp. or emergency of any limited interests" is as subjective
674 (E.D.Pa. kind." means, limited and incapable of ascertainment
1957); demands as "happiness"
and "pleasure" (see Supreme
Court decisions).
Commerce Trust "illness, injury, or any circumstances daughter, 65 for government. Missouri
Company v. United of emergency affecting and healthy, courts interpret "welfare"
States, 167 F.Supp. her welfare or health". with income broadly; standard
643 (W.D.Mo. in excess of not referable to "accustomed
1958). needs mode"; invasion
conceivable.
NOTES
[1] "ITEM III. All the rest, residue and remainder of my estate, real, personal and mixed, of whatsoever kind and nature, and wheresoever situate, including any property I might acquire hereafter, I hereby give, devise and bequeath unto Edwin F. Kline, (sometime herein called the `beneficiary') and Charles P. Mead, (sometimes herein called the `co-trustee') as trustees, in trust for the following purpose that is to say: To provide proper maintenance and support for said Edwin F. Kline from the time of my death for and during the term of his natural life, to the same generous extent that I, if living, could do, but at least at the minimum rate of Four Hundred Dollars ($400.00) per month; also as part of the trust, said Edwin F. Kline shall have the use of my residence, rent free, said trustees to provide proper upkeep and maintenance, and to pay the taxes and insurance thereon; also said trustees shall pay such income taxes as shall yearly be chargeable to said Edwin F. Kline on the amount of the annual sum devoted and applied to his maintenance and support hereunder. If said Edwin F. Kline should ever prefer other living quarters, said property may be sold like other trust property hereunder, and in such case, said trustees shall provide other suitable living quarters, wherever said Edwin F. Kline shall select in Wheeling or elsewhere. During the executor's administration of my estate, and until the trust hereunder shall have been set up and become operative, said executor shall provide for the proper care, support and maintenance of said beneficiary and of the upkeep of my residence in the same manner and under the same requirements as if said trust were in operation in the hands of said trustees.
"In the administration of this trust, it may be that at times only part of the income will be consumed, in which case said trustees, if they desire, may, in their absolute discretion, invest surplus accumulated income; and it may be that at times all income, including such accumulations, whether invested or not, may have to be consumed, in which event said trustees shall consume all such income and accumulations, and said trustees are further hereby directed and authorized to invade the corpus of this trust as circumstances may require, particularly may this be required in case of illness of the beneficiary requiring medical, surgical, hospital and nursing care, and also in other unforeseen circumstances. The said trustees are hereby authorized and directed to do all things necessary and incidental to their broad powers herein without making application for leave, authority, or directions to any court.
"As to the amount of income to be consumed hereunder other than the minimum fixed above, and the extent to which a greater amount shall be consumed and the corpus invaded, the co-trustee shall from time to time determine as circumstances shall require."
[2] Internal Revenue Code of 1954:
Sec. 2055 (26 U.S.C. 1958 ed., Sec. 2055)
Sec. 7482 (26 U.S.C. 1958 ed., Sec. 7482)
|
Citation Nr: 0839925
Decision Date: 11/20/08 Archive Date: 11/25/08
DOCKET NO. 05-19 937 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Manila, the
Republic of the Philippines
THE ISSUE
Entitlement to a disability rating in excess of 30 percent
for coronary artery disease with hypercholesterolemia.
WITNESS AT HEARING ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
K.S. Hughes, Counsel
INTRODUCTION
The veteran served on active duty from February 1969 to
October 1980 and from December 1984 to April 1993.
This appeal to the Board of Veterans' Appeals (Board) is from
a September 2004 rating decision of the Department of
Veterans Affairs (VA) Regional Office (RO) in Manila,
Philippines.
In July 2006, to support his claim, the veteran testified at
a hearing at the RO before the undersigned Veterans Law Judge
of the Board (Travel Board hearing). During the hearing he
submitted additional evidence and waived his right to have
the RO initially consider this evidence. See 38 C.F.R.
§§ 20.800, 20.1304(c) (2008).
The veteran's July 2006 hearing testimony also includes
contentions with respect to increased disability due to
hypertensive cardiovascular disease. Thus, the Board finds
that the veteran's testimony is sufficient to raise a claim
for service connection for hypertensive cardiovascular
disease. The United States Court of Appeals for Veterans
Claims ("Court") has held that VA is obligated to consider
all issues reasonably inferred from the evidence of record.
Douglas v. Derwinski, 2 Vet. App. 103, 109 (1992).
Therefore, this matter is referred to the RO for appropriate
action.
FINDING OF FACT
The veteran's coronary artery disease with
hypercholesterolemia is not manifested by an estimated
workload of METs (metabolic equivalents) between 5 and 7
which results in dyspnea, fatigue, angina, dizziness, or
syncope or evidence of congestive heart failure or left
ventricular dysfunction with an ejection fraction of less
than 30 percent.
CONCLUSION OF LAW
The criteria for entitlement to a disability rating in excess
of 30 percent for coronary artery disease with
hypercholesterolemia have not been met. 38 U.S.C.A. §§ 1155,
5107(b) (West 2002); 38 C.F.R. §§ 4.7, 4.104, Diagnostic Code
7005 (2008).
REASONS AND BASES FOR FINDING AND CONCLUSION
Duties to Notify and Assist
VA's duties to notify and assist claimants in substantiating
a claim for VA benefits are found at 38 U.S.C.A. §§ 5100,
5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2007);
38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2008).
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)
(West 2002 & Supp. 2007); 38 C.F.R. § 3.159(b) (2008);
Quartuccio v. Principi, 16 Vet. App. 183 (2002). In
accordance with 38 C.F.R. § 3.159(b)(1), proper 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. Notice should be provided to a claimant
before the initial unfavorable decision on a claim.
Pelegrini v. Principi, 18 Vet. App. 112 (2004).
For an increased-compensation claim, such as this one,
section 5103(a) requires, at a minimum, that the Secretary
notify the claimant that to substantiate a claim, the
claimant must provide, or ask the Secretary to obtain,
medical or lay evidence demonstrating a worsening or increase
in severity of the disability and the effect that worsening
has on the claimant's employment and daily life. Vazquez-
Flores v. Peake, 22 Vet. App. 37 (2008). Further, if the
diagnostic code under which the claimant is rated contains
criteria necessary for entitlement to a higher disability
rating that would not be satisfied by the claimant
demonstrating a noticeable worsening or increase in severity
of the disability and the effect that worsening has on the
claimant's employment and daily life (such as a specific
measurement or test result), the Secretary must provide at
least general notice of that requirement to the claimant.
Additionally, the claimant must be notified that, should an
increase in disability be found, a disability rating will be
determined by applying relevant diagnostic codes, which
typically provide for a range in severity of a particular
disability from noncompensable to as much as 100 percent
(depending on the disability involved), based on the nature
of the symptoms of the condition for which disability
compensation is being sought, their severity and duration,
and their impact upon employment and daily life. As with
proper notice for an initial disability rating and consistent
with the statutory and regulatory history, the notice must
also provide examples of the types of medical and lay
evidence that the claimant may submit (or ask the Secretary
to obtain) that are relevant to establishing entitlement to
increased compensation - e.g., competent lay statements
describing symptoms, medical and hospitalization records,
medical statements, employer statements, job application
rejections, and any other evidence showing an increase in the
disability or exceptional circumstances relating to the
disability. Id. at 43-44.
Prior to the issuance of the September 2004 rating decision
that is the subject of this appeal, the veteran was advised
of the evidence needed to substantiate a claim for increased
rating and of his and VA's respective duties in obtaining
evidence. See June 2004 letter. In April 2005, the veteran
was notified that disabilities are rated on the basis of
diagnostic codes, was told of the need to present evidence to
meet the rating criteria and to establish an effective date
of an award, and was provided the schedular criteria for
ratings for arteriosclerotic heart disease (coronary artery
disease). See April 2005 statement of the case (SOC). Based
on the veteran's written communications and his hearing
testimony, the Board finds that the veteran has shown actual
knowledge of the criteria for evaluating his heart disorder.
Accordingly, the duty to notify has been fulfilled.
VA also has a duty to assist claimants in obtaining evidence
needed to substantiate a claim. 38 U.S.C.A. § 5103A (West
2002); 38 C.F.R. § 3.159 (2008). This duty has also been met
as the veteran's VA and private treatment records have been
obtained and he was afforded an appropriate VA examination in
connection with his claim. The record does not suggest the
existence of additional, pertinent evidence that has not been
obtained.
It is noted that the veteran was scheduled to undergo a
second VA examination in November 2005. However, he failed
to report for this examination and, during his July 2006
hearing, he explained that he was unable to make this
examination because of traffic. The Court has held that
"[t]he duty to assist is not always a one-way street."
Wood v. Derwinski, 1 Vet. App. 190, 193 (1991). When a
claimant fails to report for an examination scheduled in
conjunction with an original compensation claim, the claim
shall be rated based on the evidence of record; however, when
the examination is scheduled in conjunction with a claim for
increase, the claim shall be denied. 38 C.F.R. § 3.655(b)
(2008). Examples of good cause include, but are not limited
to, the illness or hospitalization of the claimant or death
of an immediate family member. Inasmuch as the veteran has
undergone VA examination in connection with this claim in
June 2004, the claim must be decided based upon the results
of this examination. There has been substantial compliance
with all pertinent VA law and regulations and to move forward
with the claim would not cause any prejudice to the
appellant.
For the reasons set forth above, the Board finds that no
further notification or assistance is necessary, and deciding
the appeal is not prejudicial to the veteran.
Analysis
Disability evaluations are determined by the application of
VA's Schedule for Rating Disabilities, which assigns ratings
based on average impairment of earning capacity resulting
from a service-connected disability. 38 U.S.C.A. § 1155;
38 C.F.R. Part 4.
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
required for that rating; otherwise, the lower rating will be
assigned. 38 C.F.R. § 4.7. Any reasonable doubt regarding
the degree of disability is resolved in favor of the veteran.
See 38 C.F.R. §§ 3.102, 4.3 (2008).
The veteran's entire history is to be considered when making
disability evaluations. See generally 38 C.F.R. § 4.1;
Schafrath v. Derwinski, 1 Vet. App. 589 (1995).
Where entitlement to compensation already has been
established and an increase in the disability rating is at
issue, it is the present level of disability that is of
primary concern. See Francisco v. Brown, 7 Vet. App. 55, 58
(1994).
Nevertheless, the Board acknowledges that a claimant may
experience multiple distinct degrees of disability that might
result in different levels of compensation from the time the
increased rating claim was filed until a final decision is
made. Hart v. Mansfield, 21 Vet. App. 505 (2007). The
analysis in the following decision is therefore undertaken
with consideration of the possibility that different ratings
may be warranted for different time periods.
The September 2004 RO rating decision continued the veteran's
30 percent disability rating for his service-connected
coronary artery disease with hypercholesterolemia.
Under 38 C.F.R. § 4.104, Diagnostic Code 7005 provides
ratings for arteriosclerotic heart disease (coronary artery
disease), and requires documented coronary artery disease. A
10 percent disability rating is warranted when
arteriosclerotic heart disease (coronary artery disease)
results in workload of greater than 7 METs but not greater
than 10 METs results in dyspnea, fatigue, angina, dizziness,
or syncope, or; when continuous medication is required. A 30
percent disability rating is warranted when arteriosclerotic
heart disease results in workload of greater than 5 METs but
not greater than 7 METs results in dyspnea, fatigue, angina,
dizziness, or syncope, or; evidence of cardiac hypertrophy or
dilatation on electrocardiogram, echocardiogram, or X-ray. A
60 percent disability rating is warranted when
arteriosclerotic heart disease results in more than one
episode of acute congestive heart failure in the past year,
or; workload of greater than 3 METs but not greater than 5
METs results in dyspnea, fatigue, angina, dizziness, or
syncope, or; left ventricular dysfunction with an ejection
fraction of 30 to 50 percent. A 100 percent disability
rating is warranted when arteriosclerotic heart disease
results in chronic congestive heart failure or; workload of 3
METs or less results in dyspnea, fatigue, angina, dizziness,
or syncope, or; left ventricular dysfunction with an ejection
fraction of less than 30 percent.
A Note to Diagnostic Code 7005 provides that, if non-service-
connected arteriosclerotic heart disease is superimposed on
service-connected valvular or other non-arteriosclerotic
heart disease, the adjudicator is to request a medical
opinion as to which condition is causing the current signs
and symptoms.
At the veteran's June 2004 VA examination he complained of on
and off chest heaviness two to three times per week which is
sometimes accompanied by dizziness, shortness of breath and
difficulty in breathing. He reported no recent
hospitalizations and no syncope. He also reported good
response to treatment with no side effects. The diagnosis
and opinion was CAD (coronary artery disease) with
hypercholesterolemia, EF (ejection fraction) was 83 percent
and METs were 8 with the examiner noting that stress test was
inadequate. Specifically, a June 2004 report of Multistage
Exercise Tolerance testing notes that the veteran achieved
less than 85 percent of predicted maximum heart rate response
and as such, this test is inadequate for proper
interpretation of stress-induced ischemia. The report also
notes that the veteran was, nevertheless, able to perform 4
minutes of exercise using the Bruce protocol equivalent to 8
METS, functional class I with leg pain as endpoint. The
comments included inadequate stress test secondary to leg
pain with normal BP (blood pressure) and heart rate response
to exercise and functional class I at 8 METS.
Private treatment records reflect that the veteran underwent
left heart catheterization and coronary angiogram in
September 2004. The final diagnosis was coronary artery
disease, left main disease, totally occluded LAD (left
anterior descending) S/P TCT.
A June 2005 statement from the private physician notes that
the veteran complained of easy fatigability and shortness of
breath even on mild exertion. The diagnoses listed on this
statement include coronary artery disease, left main disease,
totally occluded LAD S/P transcutaneous angioplasty and
hypertensive cardiovascular disease, fairly controlled.
Accordingly, as noted above, the veteran was scheduled to
undergo another VA heart examination; however, he failed to
report for this examination.
Private treatment records include a June 2006 private Medical
Certificate which reflects diagnoses of hypertension, angina
pectoris, and atherosclerotic heart disease.
The Board finds after careful review of the veteran's VA
examination and private treatment reports and comparing them
to the rating criteria that the veteran does not meet the
criteria for the next higher rating of 60 percent. The
medical evidence does not show that his service-connected
coronary artery disease with hypercholesterolemia resulted in
more than one episode of acute congestive heart failure in
the past year, or; workload of greater than 3 METs but not
greater than 5 METs resulted in dyspnea, fatigue, angina,
dizziness, or syncope, or; left ventricular dysfunction with
an ejection fraction of 30 to 50 percent.
The Board acknowledges the veteran's contentions and notes
that, as a layperson, the veteran can certainly provide an
eyewitness account of his visible symptoms. Espiritu v.
Derwinski, 2 Vet. App. 492, 494 (1992). However, it is
important to note that a layperson is generally incapable of
opining on matters requiring medical knowledge. Routen v.
Brown, 10 Vet. App. 183, 187 (1997), aff'd sub nom Routen v.
West, 142 F3d 1434 (Fed. Cir. 1998), cert denied, 119 S. Ct.
404 (1998); Espiritu v. Derwinski, 2 Vet. App. 492 (1992).
In this regard, it is further noted that, during his July
2006 hearing, the veteran testified that his increased
impairment is the result of hypertensive cardiovascular
disease. However, service connection for hypertensive
cardiovascular disease is not presently in effect and, as
noted above, it is referred to the RO for appropriate action.
Based upon the guidance of the Court in Hart v. Mansfield, 21
Vet. App. 505 (2007), the Board has considered whether staged
ratings for the veteran's service-connected coronary artery
disease with hypercholesterolemia is appropriate. However,
in the present case, there is no evidence to demonstrate that
the symptoms associated with this disorder have fluctuated so
as to warrant staged ratings.
There is no evidence that the manifestations of the veteran's
service-connected coronary artery disease with
hypercholesterolemia is unusual or exceptional to demonstrate
that the rating schedule is inadequate for determining the
proper level of disability. Therefore, the Board finds that
the criteria for submission for an extra-schedular rating
pursuant to 38 C.F.R. § 3.321(b)(1) are not met. See Thun v.
Peake, 22 Vet. App. 111 (2008); see also Bagwell v. Brown, 9
Vet. App. 237 (1996).
For these reasons and bases, the Board finds that the
preponderance of the evidence is against an evaluation in
excess of 30 percent for the veteran's service-connected
coronary artery disease with hypercholesterolemia. As the
preponderance of the evidence is against this claim, the
doctrine of reasonable doubt is not for application.
38 U.S.C.A. § 5107(b); 38 C.F.R. § 4.3; Gilbert v. Derwinski,
1 Vet. App. 49, 53-56 (1990). Accordingly, the appeal is
denied.
ORDER
An increased rating in excess of 30 percent for the service-
connected coronary artery disease with hypercholesterolemia
is denied.
____________________________________________
D. C. Spickler
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
FILED
Nov 17, 2020
01:48 PM(CT)
TENNESSEE COURT OF
WORKERS' COMPENSATION
CLAIMS
TENNESSEE BUREAU OF WORKERS’ COMPENSATION
IN THE COURT OF WORKERS’ COMPENSATION CLAIMS
AT JACKSON
JOE ERWIN, ) Docket No. {{PHONE+SOCIAL_SECURITY_NUMBER}}
Employee, )
v. )
BT REDI MIX, INC., ) State File No. 7429-2018
Employer, )
And )
ERIE INS. CO., ) Judge Allen Phillips
Carrier. )
COMPENSATION ORDER DENYING BENEFITS
This case came before the Court for a Compensation Hearing on October 21, 2020.
Mr. Erwin requested benefits for an injury to his right eye. BT Redi-Mix contended the
injury did not arise out of his employment. The Court agrees with BT and denies his claim.
History of Claim
Mr. Erwin’s injury is a detached retina in his right eye, the presence of which is
undisputed; however, its relation to Mr. Erwin’s employment at BT is highly disputed.
Specifically, the parties contest whether the detachment occurred when Mr. Erwin was
struck by a co-worker during an altercation.
The Court first considered the dispute at an Expedited Hearing. Evidence produced
there provides a contextual background.
Namely, Mr. Erwin, a former cement truck driver for BT, then attributed his
detached retina to an incident on June 7, 2017, when another driver, Ray Boyd, punched
him directly in the right eye. He said his eye turned “black, blue, and bloody,” though he
later said he did not “look in the mirror.” Nevertheless, he said by the next day he “couldn’t
see” out of the eye. Conversely, BT offered the testimony of Mr. Erwin’s former
supervisor, David Lovelace, who was “100% certain” he saw Mr. Boyd slap Mr. Erwin’s
1
left cheek, leaving a red mark. BT also offered the signed declaration of co-employee
Brando Shaw, who saw Mr. Boyd strike Mr. Erwin’s left cheek with a “right-handed
smack.”
Medical records revealed Mr. Erwin’s first evaluation did not occur until November
13, when he saw Dr. Lewis Kizer. He told Dr. Kizer that his right eye “went black” in
March after getting cement in it. He also said he “was hit in [the] same eye by a guy with
the palm of his hand” but did not say when. Dr. Kizer diagnosed the detached retina and
referred him to Dr. Sunny Khamapirad, a retina specialist.1 On November 22, Mr. Erwin
told Dr. Sunny that he was “hit with powdered cement in May 2017” and then was
“punched” in the eye, presumably in May as well.2 Then, BT provided Mr. Erwin a panel
of ophthalmologists from which he chose Dr. Adam Luka, who on March 30, 2018, said
the retinal detachment was “presumably secondary” to trauma at work and of “8 months
duration.”
The Court ruled against Mr. Erwin at the Expedited Hearing, finding his credibility
suspect. Specifically, the Court found Mr. Erwin testified his co-employee struck him
directly in the right eye, while two eyewitnesses swore the co-employee slapped him on
the left cheek. Mr. Erwin claimed the appearance of a black, blue and bloody eye but then
said, “somewhat incredulously, that he ‘did not look in the mirror.’” Mr. Erwin also said
he “loses track of years,” a statement that appeared both “flippant and incredible,” given
that the question centered on when his blindness began.
Further, the Court found that, “Mr. Erwin’s problem [was] not that he is a poor
historian” but, instead his questionable histories prevented the Court from finding a causal
connection between his injury and his work. Thus, the Court held Mr. Erwin was unlikely
to prevail at a hearing on the merits and denied his claim.
After engaging in discovery and taking medical proof, the parties proceeded to the
Compensation Hearing, where Mr. Erwin and several other witnesses testified
Mr. Erwin’s wife testified she recalled her husband getting cement in his eye but,
rather than losing his vision then like he told Dr. Kizer, she said it improved with no
problems. Then, on the date of the altercation, she observed Mr. Erwin’s right eye was
“black clear down past his nose,” swollen, and looked like it was bleeding. She said it was
“easily visible” and “lasted for about two weeks.” She urged him to see a physician.
Roy Alexander, a former driver at BT, testified the altercation between Mr. Erwin
and Mr. Boyd occurred after Mr. Erwin asked BT for a pay raise for the drivers without
1
The parties and other physicians referred to Dr. Khamapirad as “Dr. Sunny,” and the Court will do the
same.
2
Both parties argued Mr. Erwin provided a history to Dr. Sunny of being struck in the right eye in May;
the Court found the handwritten note difficult to read but adopts the parties’ interpretation of it.
2
their consent. By his direct observation, he saw Mr. Boyd “slap” Mr. Erwin, leaving a
handprint on his face, first saying the right side but then clarifying it was on the left side
because Mr. Boyd led with his right hand while facing Mr. Erwin.
Chris Maness, who still drives for BT, saw Mr. Boyd hit Mr. Erwin, striking him
with such force that his “head went back.” But he did not remember which side of Mr.
Erwin’s face Mr. Boyd struck and specifically added that he was not “trying to defend or
hurt [Mr. Erwin] in any way.” Another driver, Tony Garmin, did not see the altercation but
noted the dispute over the pay raise led to it and that he did not ask Mr. Erwin to ask for
the raise.
Mr. Lovelace again testified. He said Mr. Erwin had an out-of-state commercial
driver’s license when BT hired him, and that Mr. Erwin told him then that he could not
pass an eye examination to obtain a Tennessee license. He also recalled when Mr. Erwin
got cement in his eye but said he did not complain of losing vision at that time.
Regarding the altercation, Mr. Lovelace said Mr. Erwin first argued with Brando
Shaw regarding the pay raise request; Mr. Lovelace “broke up” that argument. Mr.
Lovelace said Mr. Erwin then walked away, and Mr. Boyd approached and “came around”
to face him. Mr. Lovelace was “100% positive” that Mr. Boyd then slapped Mr. Erwin’s
left cheek with his right hand, asserting on cross-examination that it was not merely his
opinion but “what I saw.” Further, just as he testified at the Expedited Hearing, he again
said he saw a red mark on Mr. Erwin’s left cheek. Mr. Lovelace also testified Mr. Erwin
did not tell him that he lost his vision until November, and but then he attributed it to getting
cement in his eye.
Brando Shaw agreed he argued with Mr. Erwin over the pay raise request, asserting
that he never asked Mr. Erwin to ask for it. He said that when Mr. Erwin left the office
after asking for the raise, Mr. Erwin was “cussing and hollering” as if he were “drunk.”
Mr. Erwin commenced the argument with him, and Mr. Lovelace separated them. Mr.
Shaw then saw Mr. Erwin walk behind Mr. Boyd, continuing to loudly curse. At that point,
Mr. Boyd turned to face Mr. Erwin and “smacked” him on the left cheek with his right
hand. He said Mr. Boyd did not strike Mr. Erwin from behind.
For his part, Mr. Erwin testified that he “probably completed” the tenth grade and
that he worked at BT on different occasions, the last time beginning in 2015 or 2016, or
“something like that.” He related that he got cement in his right eye in March 2017 but that,
after washing it out, had no further problems. He also said he had gotten smoke in his left
eye in March, and it took him “six weeks to get the smoke out.”
Mr. Erwin confirmed that he first argued with Mr. Shaw, admitting he threatened to
“break him in half.” He also said the disputes with his fellow drivers stemmed from his
asking for a pay raise. When confronted with Mr. Garmin’s testimony that he did not ask
3
Mr. Erwin to request a raise, Mr. Erwin said he “wasn’t really listening” to Mr. Garmin’s
trial testimony, but then tried to clarify by saying, “I probably heard him say something
like that.”
As to the altercation at issue, Mr. Erwin could not remember the date. However, he
and his attorney demonstrated how they contend Mr. Boyd struck Mr. Erwin. Specifically,
counsel played the role of Mr. Boyd by approaching Mr. Erwin from behind and to his
right. He then demonstrated a motion of swinging his hand around Mr. Erwin’s right
shoulder or arm and striking his right eye. Mr. Erwin said he never saw Mr. Boyd “come
at him” and described that his head “went back and to the left” after being hit. He said Mr.
Boyd struck him with either his fist or his palm. On cross-examination, Mr. Erwin
contended that he had never said he was punched, but only said he was “hit.” He maintained
that he had no loss of vision until after Mr. Boyd struck him.
When confronted with his Expedited Hearing testimony that his eye turned black,
blue and bloody, Mr. Erwin again testified that he “never looked at” his right eye after the
incident, saying he “did not want to.” However, he also said that he saw his eye was “red”
or “bloodshot,” conceding that he might have “glanced at it one time.” Also, he said he
looked in the mirror when shaving.
For medical proof, Mr. Erwin offered the testimony of ophthalmologist Dr. James
Freeman, who recorded a history that Mr. Erwin was hit in the right eye with a fist “around
July of 2017” and lost vision afterward. Based on that history, Dr. Freeman said the blow
to Mr. Erwin’s eye was “more likely than not the injury that precipitated the [detachment].”
Conversely, BT offered the testimony of ophthalmologist Dr. David Harris, who did
not believe that a slap to the left cheek would cause a detached retina. Further, because Mr.
Erwin had preexisting degenerative conditions in both eyes, Dr. Harris stated to a
reasonable degree of medical certainty that the detachment was unrelated to any blow
sustained by Mr. Erwin.
Based on this evidence, Mr. Erwin argued that he was “very confident” that he lost
his vision after he was struck and that the “uncontroverted testimony” was that he lost
vision after he was struck. He called himself a “horrible historian,” but contended that
medical records are not “fool-proof.” Nevertheless, he contended that Dr. Freeman’s
opinion was “determinative” as to causation. Finally, he considered Mr. Alexander, the
former BT driver, most credible because he no longer works there, whereas the other
witnesses do and therefore have incentive to support BT’s position. BT maintained Mr.
Erwin did not establish a compensable injury.
4
Findings of Fact and Conclusions of Law
At a Compensation Hearing, Mr. Erwin must establish all elements of his claim by
a preponderance of the evidence. Tenn. Code Ann. § 50-6-239(c)(6) (2019).
The dispositive issue remains whether Mr. Erwin’s injury arose primarily out of his
tommyyoung@example.com. See generally Tenn. Code Ann. § 50-6-114. As at the previous hearing,
the case still turns on credibility. On that point, the Court finds Mr. Erwin’s claim is
plagued by the same ills as at his Expedited Hearing. Namely, his questionable credibility
and inconsistent histories prevent a finding that his detached retina arose primarily out of
his employment.
First, the Court finds Mr. Erwin’s credibility was suspect from the outset of the
hearing. He said he “probably completed” the tenth grade and that he began his last period
of employment stint at BT in 2015 or 2016, or “something like that.” He could not recall
the date of the incident, although he claimed it blinded his right eye.
Second, his description of the altercation conflicts with the eyewitnesses’
description. He and counsel demonstrated a blow from behind, but Mr. Alexander, Mr.
Lovelace, and Mr. Shaw saw a blow from the front. They also described a “slap” to the left
cheek, not a punch in the right eye. Mr. Erwin himself equivocated on whether he was
punched, testifying that he “never” said he was punched but rather “hit,” a statement at
odds with his previous testimony and histories to the physicians.
Third, Mr. Erwin’s assertion he looked at his eye only once after being struck is too
unbelievable to ascribe it any credibility. Notably, he admitted to looking in the mirror
while shaving. Further, even if he looked at his eye only once, he said it looked red or
bloodshot, not black, blue or bloody, contradicting his testimony at the Expedited Hearing.
This also flies in the face of his wife allegedly seeing a massive black eye extending down
the right side of his face.
Finally, the Court again considers Mr. Erwin’s inconsistent medical histories. He
first told Dr. Kizer that his vision went black in March after getting cement in it. He then
told Dr. Sunny that he got cement in his eye in May and was hit then, not in June. The
inconsistencies continued with what he told Dr. Freeman, his own evaluating physician,
when he said he was hit in the right eye with a fist “around July.” His testimony at the
Compensation Hearing was that he was not sure if he was hit with a fist or if he was even
punched.
Taken in its totality, the Court finds the evidence preponderates against Mr. Erwin.
His description of the altercation was contrary to the eyewitnesses, his histories to the
physicians were inconsistent, and his testimony that he did not look at his eye were
5
unbelievable. Thus, the Court cannot credit Mr. Erwin’s testimony and denies his request
for benefits.
IT IS, THEREFORE, ORDERED as follows:
1. Mr. Erwin’s claim is denied, and the case dismissed with prejudice.
2. BT shall pay $150 costs to the Court Clerk within five business days under
Tennessee Compilation Rules and Regulations 0800-02-21-.06 (August, 2019).
3. BT shall prepare and submit to the Court Clerk a Statistical Data Form (SD2) within
ten business days of this order becoming final.
4. Unless appealed, this order shall become final thirty days after issuance.
ENTERED November 17, 2020.
______________________________________
JUDGE ALLEN PHILLIPS
Court of Workers’ Compensation Claims
APPENDIX
Technical record:
1. Expedited Hearing Order with attached technical record
2. Scheduling Order
3. Post-Discovery DCN
4. Joint Pre-Compensation Hearing Statement
5. Employer’s Trial Brief
6. Order of Continuance
7. Motion to Wear Face Shields
8. Order Allowing Face Shields
Exhibits:
1. Collective Medical records of Drs. Kizer, Khamapirad, Luka and David Harris
IME
2. First Report of Work Injury
3. Panel of Physicians
4. Dr. David Harris Deposition with complete exhibits filed by employer on July 29,
2020
5. Dr. James Freeman Deposition
6
CERTIFICATE OF SERVICE
I certify that a copy of this Compensation Order was sent as indicated on November
17, 2020.
Name Via Via Email Service Sent To:
Mail
Charles L. Holliday, X tommyyoung@example.com
Employee’s Attorney tommyyoung@example.com
Seth Granda and Catherine Dugan, X tommyyoung@example.com
Employer’s Attorneys tommyyoung@example.com
______________________________________
Penny Shrum, Court Clerk
tommyyoung@example.com
7
Compensation Hearing Order Right to Appeal:
If you disagree with this Compensation Hearing Order, you may appeal to the Workers’
Compensation Appeals Board or the Tennessee Supreme Court. To appeal to the Workers’
Compensation Appeals Board, you must:
1. Complete the enclosed form entitled: “Notice of Appeal,” and file the form with the Clerk
of the Court of Workers’ Compensation Claims within thirty calendar days of the date the
compensation hearing order was filed. When filing the Notice of Appeal, you must serve
a copy upon the opposing party (or attorney, if represented).
2. You must pay, via check, money order, or credit card, a $75.00 filing fee within ten
calendar days after filing of the Notice of Appeal. Payments can be made in-person at any
Bureau office or by U.S. mail, hand-delivery, or other delivery service. In the alternative,
you may file an Affidavit of Indigency (form available on the Bureau’s website or any
Bureau office) seeking a waiver of the filing fee. You must file the fullycompleted
Affidavit of Indigency within ten calendar days of filing the Notice of Appeal. Failure to
timely pay the filing fee or file the Affidavit of Indigency will result in dismissal of
your appeal.
3. You bear the responsibility of ensuring a complete record on appeal. You may request
from the court clerk the audio recording of the hearing for a $25.00 fee. A licensed court
reporter must prepare a transcript and file it with the court clerk within fifteen calendar
days of the filing the Notice of Appeal. Alternatively, you may file a statement of the
evidence prepared jointly by both parties within fifteen calendar days of the filing of the
Notice of Appeal. The statement of the evidence must convey a complete and accurate
account of the hearing. The Workers’ Compensation Judge must approve the statement of
the evidence before the record is submitted to the Appeals Board. If the Appeals Board is
called upon to review testimony or other proof concerning factual matters, the absence of
a transcript or statement of the evidence can be a significant obstacle to meaningful
appellate review.
4. After the Workers’ Compensation Judge approves the record and the court clerk transmits
it to the Appeals Board, a docketing notice will be sent to the parties. The appealing party
has fifteen calendar days after the date of that notice to submit a brief to the Appeals Board.
See the Practices and Procedures of the Workers’ Compensation Appeals Board.
To appeal your case directly to the Tennessee Supreme Court, the Compensation Hearing
Order must be final and you must comply with the Tennessee Rules of Appellate Procedure.
If neither party timely files an appeal with the Appeals Board, the trial court’s Order will
become final by operation of law thirty calendar days after entry. See Tenn. Code Ann. §
50-6-239(c)(7).
For self-represented litigants: Help from an Ombudsman is {{EMAIL+PHONE}}.
NOTICE OF APPEAL
Tennessee Bureau of Workers’ Compensation www.tn.gov/workforce/injuries-at-
work/
tommyyoung@example.com | (605)418-9352
Docket No.: ________________________
State File No.: ______________________
Date of Injury: _____________________
___________________________________________________________________________
Employee
v.
___________________________________________________________________________ Employer
Notice is given that ____________________________________________________________________ [List
name(s) of all appealing party(ies). Use separate sheet if necessary.]
appeals the following order(s) of the Tennessee Court of Workers’ Compensation Claims to the Workers’
Compensation Appeals Board (check one or more applicable boxes and include the date filestamped on
the first page of the order(s) being appealed):
□ Expedited Hearing Order filed on _______________ □ Motion Order filed on ___________________
□ Compensation Order filed on__________________ □ Other Order filed on_____________________ issued
by Judge _________________________________________________________________________.
Statement of the Issues on Appeal
Provide a short and plain statement of the issues on appeal or basis for relief on appeal:
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
Parties
Appellant(s) (Requesting Party): _________________________________________ ☐Employer ☐Employee
Address: ________________________________________________________ Phone: ___________________
Email: __________________________________________________________
Attorney’s Name: ______________________________________________ BPR#: _______________________
Attorney’s Email: ______________________________________________ Phone: _______________________
Attorney’s Address: _________________________________________________________________________
* Attach an additional sheet for each additional Appellant *
LB-1099 rev. 01/20 Page 1 of 2 RDA 11082 Employee Name: _______________________________________ Docket No.:
_____________________ Date of Inj.: _______________
Appellee(s) (Opposing Party): ___________________________________________ ☐Employer ☐Employee
Appellee’s Address: ______________________________________________ Phone: ____________________
Email: _________________________________________________________
Attorney’s Name: _____________________________________________ BPR#: ________________________
Attorney’s Email: _____________________________________________ Phone: _______________________
Attorney’s Address: _________________________________________________________________________
* Attach an additional sheet for each additional Appellee *
CERTIFICATE OF SERVICE
I, _____________________________________________________________, certify that I have forwarded a
true and exact copy of this Notice of Appeal by First Class mail, postage prepaid, or in any manner as described
in Tennessee Compilation Rules & Regulations, Chapter 0800-02-21, to all parties and/or their attorneys in this
case on this the __________ day of ___________________________________, 20 ____.
____________________________________________
__ [Signature of appellant or attorney for appellant]
LB-1099 rev. 01/20 Page 2 of 2 RDA 11082
|
Citation Nr: 1338123
Decision Date: 11/20/13 Archive Date: 12/06/13
DOCKET NO. 02-01 256 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Waco, Texas
THE ISSUE
Entitlement to service connection for infertility and sterility.
REPRESENTATION
Appellant represented by: Disabled American Veterans
ATTORNEY FOR THE BOARD
N. Holtz, Associate Counsel
INTRODUCTION
The Veteran had active duty service from July 1967 to July 1970.
This matter initially came before the Board of Veterans' Appeals (Board) on appeal from a June 2004 rating decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Waco, Texas.
In May 2006, the Board denied the Veteran's claim for service connection. In March 2013, the Court of Appeals for Veterans Claims (Court) vacated and remanded the Board's decision on this issue.
The Board observes that, in the interim between the Board's denial of the claim and the Court's remand, the Veteran sought to reopen his service connection claim. That claim was denied in an August 2010 rating decision.
The Board has reviewed all relevant documents in the Veterans Benefits Management System (VBMS) and Virtual VA paperless files in its consideration of the appeal.
The appeal is REMANDED to the RO via the Appeals Management Center (AMC), in Washington, DC. VA will notify the appellant if further action is required.
REMAND
The Veteran seeks service connection for infertility/sterility, claiming that the condition was first diagnosed while on active duty.
As background, the Veteran and his spouse married in September 1969, and were unable to conceive during the remaining nine months of his service, or at any time to the present. He informed an October 2003 VA examiner that in 1970, he and his wife underwent a study wherein it was determined that he had a low sperm count; while there is no record of such a study in the service treatment records, his recollection of that study is not controverted by other evidence, and should be considered credible. See Layno v. Brown, 6 Vet. App. 465, 470 (1994) (providing that a Veteran is competent to report on that of which he or she has personal knowledge). Subsequent to service, he underwent testicular biopsy, and received a diagnosis of hypospermatogenesis in April 1978. The Board also observes that the Veteran was treated for a gonorrheal infection in February 1969 during active duty.
It is unclear to the Board whether the currently-diagnosed hypospermatogenesis/low sperm count is a congenital or acquired condition, or whether in may be related to the in-service infection. An examination is warranted. See McLendon v. Nicholson, 20 Vet. App. 79, 83 (2006) (holding that where there is evidence of a current disability, and an indication that the current disability may be related to an event or injury in service, but insufficient competent evidence on file to make a decision on the claim, an examination is warranted).
Accordingly, the case is REMANDED for the following action:
1. Schedule the Veteran for a genitourinary examination to determine the nature and etiology of his hypospermatogenesis/low sperm count. The examiner must review the claims file, all relevant materials in Virtual VA, and this remand. The ensuing report must indicate that such a review occurred.
The examiner must provide a full examination to determine the nature and etiology of the Veteran's hypospermatogenesis. All necessary tests and procedures must be performed. Thereafter, the examiner should answer the following questions:
(a) Is the hypospermatogenesis condition a congenital defect or an acquired disorder?
(b) If the condition is an acquired disorder, is it at least as likely as not that hypospermatogenesis had its onset in service or is due to an event or injury in service (such as the February 1969 gonorrheal infection).
(c) In the alternative, is the sterility/infertility secondary to or permanently made worse by any of the service connected disorders? (Service connection for ischemic heart disease, diabetes, and posttraumatic stress disorder.)
Is this related to the reported low sperm count reported in service, or the infection in service?
The examiner must provide a complete rationale in support of all opinions expressed. If the examiner cannot provide a requested opinion without resort to speculation, he or she should explain why such an opinion would be speculative.
2. After the development requested has been completed, the RO should review the examination report to ensure that it is in complete compliance with the directives of this REMAND. The AMC/RO must ensure that the examiner documented consideration of Virtual VA, to include all records in the Capri system. If the report is deficient in any manner, the RO must implement corrective bradley91@example.com.
3. The Veteran is hereby notified that it is his responsibility to report for the examination and to cooperate in the development of the claim. The consequences for failure to report for a VA examination without good cause may include denial of the claim. 38 C.F.R. §§ 3.158, 3.655 (2013). In the event that the Veteran does not report for the aforementioned examination, documentation should be obtained which shows that notice scheduling the examination was sent to the last known address. It should also be indicated whether any notice that was sent was returned as undeliverable.
4. Then, readjudicate the claim. If the benefit sought on appeal is not granted to the Veteran's satisfaction, the Veteran and the representative should be furnished a supplemental statement of the case and provided an appropriate opportunity to respond before the claims folder is returned to the Board for further appellate action.
The appellant has the right to submit additional evidence and argument on the matter 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. 2013).
_________________________________________________
MICHAEL D. LYON
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) (2013).
|
Case 1:15-cv-00918-MCC Document 228 Filed 07/21/21 Page 1 of 1
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
DAWN L. BROWN, : Civil No. 1:15-CV-918
:
Plaintiff, :
:
v. :
: (Magistrate Judge Carlson)
COMMONWEALTH OF :
PENNSYLVANIA, DEPT. OF :
CORRECTIONS, et al., :
:
Defendants. :
ORDER
AND NOW this 21st day of July 2021, in a accordance with the accompanying
Memorandum Opinion, IT IS ORDERED that judgment is entered in favor of the
defendants in the above-captioned case and the clerk is directed to close this file..
S/Martin C. Carlson
Martin C. Carlson
United States Magistrate Judge
1
|
18-1814
Singh v. Barr
BIA
Poczter, IJ
A202 068 909
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Thurgood Marshall
3 United States Courthouse, 40 Foley Square, in the City of
4 New York, on the 7th day of July, two thousand twenty.
5
6 PRESENT:
7 JON O. NEWMAN,
8 JOSÉ A. CABRANES,
9 GERARD E. LYNCH,
10 Circuit Judges.
11 _____________________________________
12
13 HARBHAJAN SINGH,
14 Petitioner,
15
16 v. 18-1814
17 NAC
18 WILLIAM P. BARR, UNITED STATES
19 ATTORNEY GENERAL,
20 Respondent.
21 _____________________________________
22
23 FOR PETITIONER: Genet Getachew, Brooklyn, NY.
24
25 FOR RESPONDENT: Joseph H. Hunt, Assistant Attorney
26 General; Linda S. Wernery,
27 Assistant Director; Gerald M.
28 Alexander, Trial Attorney, Office
29 of Immigration Litigation, United
30 States Department of Justice,
31 Washington, DC.
1 UPON DUE CONSIDERATION of this petition for review of a
2 Board of Immigration Appeals (“BIA”) decision, it is hereby
3 ORDERED, ADJUDGED, AND DECREED that the petition for review
4 is DENIED.
5 Petitioner Harbhajan Singh, a native and citizen of
6 India, seeks review of a May 17, 2018, decision of the BIA
7 affirming a July 5, 2017, decision of an Immigration Judge
8 (“IJ”) denying his application for asylum, withholding of
9 removal, and relief under the Convention Against Torture
10 (“CAT”). In re Harbhajan Singh, No. A202 068 909 (B.I.A. May
11 17, 2018), aff’g No. A202 068 909 (Immig. Ct. N.Y. City July
12 5, 2017). We assume the parties’ familiarity with the
13 underlying facts and procedural history.
14 We have reviewed the decisions of both the IJ and the
15 BIA. See Yun-Zui Guan v. Gonzales, 432 F.3d 391, 394 (2d
16 Cir. 2005). The standards of review are well established.
17 See 8 U.S.C. § 1252(b)(4)(B); Hong Fei Gao v. Sessions, 891
18 F.3d 67, 76 (2d Cir. 2018). “Considering the totality of the
19 circumstances, and all relevant factors, a trier of fact may
20 base a credibility determination on . . . the consistency
21 between the applicant’s or witness’s written and oral
22 statements . . . , the internal consistency of each statement,
2
1 the consistency of such statements with other evidence of
2 record . . . and any inaccuracies or falsehoods in such
3 statements, without regard to whether an inconsistency,
4 inaccuracy, or falsehood goes to the heart of the applicant’s
5 claim, or any other relevant factor.” 8 U.S.C.
6 § 1158(b)(1)(B)(iii). “We defer . . . to an IJ’s credibility
7 determination unless, from the totality of the circumstances,
8 it is plain that no reasonable fact-finder could make such an
9 adverse credibility ruling.” Xiu Xia Lin v. Mukasey, 534
10 F.3d 162, 167 (2d Cir. 2008); accord Hong Fei Gao, 891 F.3d
11 at 76. In this case, substantial evidence supports the
12 adverse credibility determination given multiple
13 inconsistencies regarding the details of the two alleged
14 attacks against Singh and related events.
15 Singh alleged that members of the Badal Party attacked
16 him twice in 2014 because he was a member of the Shiromani
17 Akali Dal Amritsar Party (“SADA”). The agency reasonably
18 relied on several inconsistencies and variations in Singh’s
19 descriptions of the two attacks. As to the first attack,
20 Singh testified that the assailants asked him whether he
21 worked for SADA, but he later testified that they did not ask
22 him this question; and Singh testified that his attackers
3
1 told him that they were members of the Badal party, but he
2 later testified that they had not identified themselves but
3 had asked him to join their party. As to the second attack,
4 he testified that his assailants did not say anything during
5 the attack, but his mother’s and wife’s affidavits stated
6 that the attackers threatened to kill him if he continued to
7 work for SADA. Singh also stated during his credible fear
8 interview that the assailants searched his body after he fell
9 to the ground and pretended to lose consciousness, but he did
10 not testify at his hearing that they searched his body.
11 Although these inconsistencies are not glaring, an IJ may
12 rely on the “cumulative effect” of minor inconsistencies, see
13 Xiu Xia Lin, 534 F.3d at 167 (internal quotation marks
14 omitted), and we do not second-guess an IJ’s finding, where,
15 as here, it is a “permissible view[] of the evidence,” Siewe
16 v. Gonzales, 480 F.3d 160, 167 (2d Cir. 2007) (internal
17 quotation marks omitted).
18 The agency also reasonably relied on several other
19 inconsistencies between Singh’s testimony and witness
20 affidavits. See 8 U.S.C. §1158(b)(1)(B)(iii); Xiu Xia Lin,
21 534 angela32@example.net. Singh testified that after his first attack,
22 his mother accompanied him to the police station, but his
4
1 mother’s, wife’s, and neighbor’s affidavits stated that his
2 father accompanied him. When asked to explain this
3 discrepancy, Singh stated the affidavits were mistakenly
4 referring to the second attack. However, the record shows
5 each affidavit described the first attack when stating that
6 Singh’s father went with him to the police station. The IJ
7 thus was not compelled to credit Singh’s explanation that
8 three individuals made the same error. See Majidi v.
9 Gonzales, 430 F.3d 77, 80 (2d Cir. 2005) (“A petitioner must
10 do more than offer a plausible explanation for his
11 inconsistent statements to secure relief; he must demonstrate
12 that a reasonable fact-finder would be compelled to credit
13 his testimony.” (internal quotation marks and citations
14 omitted)); see also Mei Chai Ye v. U.S. Dep’t of Justice, 489
15 F.3d 517, 524 (2d Cir. 2007) (“[T]his court has . . . firmly
16 embraced the commonsensical notion that striking similarities
17 between affidavits are an indication that the statements are
18 ‘canned.’”). Singh also testified that his mother did not
19 attend SADA events; however, his mother’s affidavit stated
20 that she did, or at least that she “used to.” When asked to
21 explain this discrepancy, Singh changed his testimony to
22 state both that everyone in his family attended and that his
5
1 mother attended events before he joined the party.
2 Given that the record supports the inconsistencies
3 identified by the IJ, the agency reasonably relied on Singh’s
4 failure to rehabilitate his testimony with reliable
5 corroborating evidence. “An applicant’s failure to
6 corroborate his or her testimony may bear on credibility,
7 because the absence of corroboration in general makes an
8 applicant unable to rehabilitate testimony that has already
9 been called into question.” Biao Yang v. Gonzales, 496 F.3d
10 268, 273 (2d Cir. 2007). The affidavits from Singh’s mother,
11 wife, and neighbor were inconsistent with his testimony and
12 the IJ reasonably declined to give weight to these or other
13 letters because his mother and wife were interested witnesses
14 and none of the authors were available for cross-examination.
15 See Y.C. v. Holder, 741 F.3d 324, 332, 334 (2d Cir. 2013)
16 (deferring to agency’s decision to afford little weight to
17 husband’s letter from China).
18 Accordingly, given Singh’s inconsistencies and the lack
19 of reliable corroboration, substantial evidence supports the
20 agency’s adverse credibility determination. See 8 U.S.C.
21 § 1158(b)(1)(B)(iii); Xiu Xia Lin, 534 F.3d at 167; Biao Yang,
22 496 angela32@example.net. That determination is dispositive of
6
1 asylum, withholding of removal, and CAT relief because all
2 three claims were based on the same factual predicate. See
3 Paul v. Gonzales, 444 F.3d 148, 156-57 (2d Cir. 2006).
4 For the foregoing reasons, the petition for review is
5 DENIED. All pending motions and applications are DENIED and
6 stays VACATED.
7 FOR THE COURT:
8 Catherine O’Hagan Wolfe,
9 Clerk of Court
7
|
05/05/2020
IN THE SUPREME COURT OF THE STATE OF MONTANA Case Number: DA 20-0025
No. DA 20-0025
STATE OF MONTANA,
Plaintiff and Appellee,
v.
MARTIN ANDREW REINBOLT,
Defendant and Appellant.
GRANT
Pursuant to authority granted under Mont. R. App. P. 26(1), the
Appellant is given an extension of time until June 8, 2020 to prepare,
file, and serve the Appellant’s opening brief.
Electronically signed by:
Bowen Greenwood
Clerk of the Supreme Court
May 5 2020
|
SIXTH DIVISION
JUNE 16, 2000
1-99-2122
SOUTHWESTERN BELL MOBILE SYSTEMS, INC., ) APPEAL FROM THE
DECATUR CELLULAR TELEPHONE COMPANY, ) CIRCUIT COURT
CHAMPAIGN CELLTELCO, SBMS CELLULAR ) OF COOK COUNTY.
TELECOMMUNICATIONS BLOOMINGTON, INC., )
SBMS CELLULAR TELECOMMUNICATIONS )
SPRINGFIELD, INC., and EASTERN MISSOURI )
CELLULAR LIMITED PARTNERSHIP, )
)
Plaintiffs-Appellees, )
)
v. )
)
THE DEPARTMENT OF REVENUE OF THE STATE )
OF ILLINOIS and GLEN BOWER, Director, ) HONORABLE
) JOANNE L. LANIGAN,
Defendant-Appellant. ) JUDGE PRESIDING.
JUSTICE CAMPBELL delivered the opinion of the court:
Defendants Illinois Department of Revenue (Department) and Glen Bower, Director of the Department appeal an order of the circuit court of Cook County in administrative review reversing the Department's decision that plaintiffs Southwestern Bell Mobile Systems, Inc., Decatur Cellular Telephone Company, Inc., Champaign Celltelco, SBMS Cellular Telecommunications Blooming
ton, Inc., SBMS Cellular Telecommunications Springfield, Inc., and Eastern Missouri Cellular Limited Partnership (collectively Taxpayers) were not entitled to a refund of invested capital tax payments for tax years 1991-94.
The record on appeal discloses the following facts. South
western Bell Mobile Systems, Inc., is a Delaware corporation providing cellular telephone service in the Chicago metropolitan area under the name Cellular One. The remaining Taxpayers are limited partnerships in which Southwestern Bell Mobile Systems, Inc. holds a controlling interest. The remaining taxpayers provide cellular telephone service in parts of Illinois outside the Chicago metropolitan area.
In 1979, the General Assembly imposed a tax on the invested capital of persons engaged in transmitting messages and acting as retailers of telecommunications. See 35 ILCS 610/2a.1 (West 1994). In 1986, the General Assembly amended section 13-203 of the Universal Telephone Service Protection Law of 1985, part of the larger Public Utilities Act, to provide in part that:
"The [Illinois Commerce] Commission [ICC] may, by rulemaking, exclude *** cellu
lar radio service *** from active regulatory oversight to the extent it finds *** that such exclusion is consistent with the public interest and the purposes and policies of this Article." See 220 ILCS 5/13-203 (West 1996).
On February 18, 1987, the ICC entered an order removing the cellular industry in Chicago from active regulatory oversight. See
In re Chicago SMSA Ltd. Partnership
, 81 Pub. Util. Rep. 4th 287 (1987); 1987 Ill PUC LEXIS 10; 1987 WL 256497. The ICC later extended this order to the entire cellular industry in Illinois. See 83 Ill. Admin. Code § 760.10 (1997) ("For purposes of the exclusion from active regulatory oversight for providers of cellular radio service *** cellular radio service *** is excluded from the applicable tariff provisions ***."). The Taxpayers generally commenced cellular operations in Illinois in 1987.
In 1991, the General Assembly amended the taxing statute to provide in relevant part that: "[t]he invested capital tax imposed by this Section shall not be imposed upon persons who are not regulated by the Illinois Commerce Commission ***." See 35 ILCS 610/2a.1 (West 1994). The Taxpayers paid the Department $6,914,647.32 in invested capital taxes for tax years 1991-94.
On December 28, 1994, the Taxpayers filed a claim for a refund for the total invested capital taxes they paid for tax years 1991-93. On October 30, 1995, the Taxpayers filed a claim for a refund for the total invested capital taxes they paid for tax year 1994. The Taxpayers argued that the invested capital tax did not apply to them because: (1) it was a replacement tax and the cellular telecommunications industry did not exist at the time of its enactment; (2) the Taxpayers were not regulated by the Illinois Commerce Commission; (3) the tax applies only to entities who would have been subject to the Messages Tax Act imposed in 1945, which did not extend to interstate commerce; and (4) the tax violates the uniformity provision of the Illinois Constitution of 1970 (Ill. Const. 1970, Art. IX, § 2).
On January 24, 1996, the Department issued tentative deter
minations that the taxpayers were not entitled to a refund. The Taxpayers filed timely protests of these determinations. The protests were consolidated before an administrative law judge (ALJ) for consideration on a stipulation of facts and on the briefs.
On June 20, 1997, The Governor of the State of Illinois approved Public Act 90-154, including the Telecommunications Municipal Infrastructure Maintenance Fee Act (TMIMFA), which repealed the invested capital tax. P.A. 90-154 (approved June 20, 1997, effective January 1, 1998). The TMIMFA's "legis
lative intent" section, now codified at 35 ILCS 635/5 (West 1998), provides in part as follows:
"The General Assembly imposed a tax on invested capital of utilities to partially replace the personal property tax that was abolished by the Illinois Constitution of 1970. Since that tax was imposed, telecom
munications retailers have evolved from util
ity status into an increasingly competitive industry serving the public. This act is intended to abolish the invested capital tax on telecommunications retailers ***. ***
Cellular [t]elecommunications retailers have already been excluded from application of the invested capital tax by earlier legislative action.
" (Emphasis added.)
On August 11, 1997, the ALJ recommended that the Taxpayers' refund claim be denied. On August 29, 1997, the Director ac
cepted the recommended decision.
On November 17, 1997, the Taxpayers filed a complaint seek
ing administrative review of the Director's decision, which alleged that they were served by U.S. mail postmarked October 14, 1997. On May 17, 1999, following the submission of briefs by the parties, the trial court reversed the decision of the Director. The trial court concluded that the Taxpayers were not regulated by the ICC, based on 35 ILCS 610/2a.1 (West 1994) and 35 ILCS 635/5 (West 1998). The Department filed a timely Notice of Appeal to this court.
I
On appeal, the Department argues that the trial court erred in reversing the Director's decision that the taxpayers were not entitled to a refund of invested capital tax payments for tax years 1991-94. The Department relies heavily on
Chicago SMSA Ltd. Partnership v. Illinois Dept. of Revenue
, 306 Ill. App. 3d 977, 715 N.E.2d 719 (1999), in which this court, addressing the same legal issues involved in this case, ruled in favor of the Department. The Taxpayers argue that
Chicago SMSA
was wrongly decided. As the issues in this appeal involve questions of law, the standard of review in
de novo
.
Chicago SMSA
, 306 Ill. App. 3d at 980, 715 fuentesmichelle@example.org.
II
The primary issue in this appeal and in
Chicago SMSA
is whether the Taxpayers were entitled to a refund of invested capital taxes on the ground that they are "not regulated by the Illinois Commerce Commission." It is undisputed that in 1987, the ICC removed the cellular telecommunications industry from "active regulatory oversight," pursuant to 220 ILCS 5/13-203. See 83 Ill. Admin. Code § 760.10 (1997). In
Chicago SMSA
, this court agreed with the Department that the cellular telephone companies nevertheless remained regulated by the ICC, noting that: (1) the two statutory phrases were not identical; and (2) there were instances where the cellular telephone companies were or had been subject to "passive" or "residual" regulation by the ICC.
Chicago SMSA
, 306 Ill. App. 3d at 981-84, 715 fuentesmichelle@example.org.
The taxpayers in
Chicago SMSA
, like the Taxpayers here, also argued that the statement of legislative intent in section 5 of the TMIMFA that "[c]ellular [t]elecommunications retailers have already been excluded from application of the invested capital tax by earlier legislative action" clarified the prior legisla
tion and proved that their removal from active regulatory over
sight rendered them "not regulated by the ICC" in tax years 1991-
94. In
Chicago SMSA
, this court rejected the argument, stating that the statement in the 1998 statute did not purport to ex
pressly clarify some existing ambiguity; it was "more of an historical statement, and, like many attempts to write history, it is incorrect."
Chicago SMSA
, 306 Ill. App. 3d at 985-86, 715 fuentesmichelle@example.org.
We agree with the
Chicago SMSA
court that "[i]f the legisla
ture in 1991 intended to say the tax did not apply to cellular providers over which the ICC conducted 'no active regulatory oversight,' it could have said so."
Chicago SMSA
, 306 Ill. App. 3d at 983, 715 fuentesmichelle@example.org. Section 13-203 of the Universal Telephone Service Protection Law of 1985 provides that the ICC "
may, by rulemaking
, exclude *** cellular radio service *** from active regulatory oversight
to the extent it finds *** that such exclusion is consistent with the public interest.
" 220 ILCS 5/13-203 (West 1994) (emphases added). This plain language makes clear that the ICC was and is not required to take any such action and that the degree to which such action occurs depends on the ICC's findings regarding the public interest. In addition, the action it takes in this regard is to be "by rulemaking."
Both the
Chicago SMSA
court and the Taxpayers in this case agree that to "regulate" is to "govern or direct according to rule." See
Chicago SMSA
, 306 Ill. App. 3d at 983, 715 fuentesmichelle@example.org. The ICC's rule removing cellular radio service from active regulatory oversight is itself a regulation prospectively govern
ing cellular radio service.
(footnote: 1)
Moreover, section 13-203 defines "telecommunications serv
ice," then lists services that are excluded from that definition. See 220 ILCS 5/13-203(a),(b),(c) (West 1994). It is in the text
following
those exclusions that the legislature grants the ICC the authority to exclude cellular radio service from active regulatory oversight. The plain language of the section 13-203 does
not
grant the ICC the authority to exclude cellular radio service from the definition of "telecommunications service."
Had the legislature granted such authority to the ICC, the effect of the 1987 ICC rule would have been not only to remove the Taxpayers from active regulatory oversight, but also to declare that cellular radio service was not "telecommunications service," and that the Taxpayers were not "telecommunications carriers." See 220 ILCS 5/13-202 (West 1994). The Taxpayers then would have had a stronger argument that they are not regu
lated by the ICC.
Cf
. 220 ILCS 5/13-102(d) (West 1994) (finding that protection of the public interest requires continued regula
tion of telecommunications carriers and services for the foresee
able future). The fact that the legislature did not grant the ICC authority to exclude cellular radio service from the defini
tion of "telecommunications service" further supports the conclu
sion that an exclusion from active regulatory oversight is not the same as an exclusion from ICC regulation.
We recognize that section 5 of the TMIMFA states that "[c]ellular [t]elecommunications retailers have already been excluded from application of the invested capital tax by earlier legislative action." However, the General Assembly's subsequent declaration of prior intent cannot alter the clear import of the prior statutory language.
Roth v. Yackley
, 77 Ill. 2d 423, 428, 396 N.E.2d 520, 522 (1979). In
Roth
, the supreme court also stated that:
"it is logically difficult to perceive how the declaration and the amendments by the 80th General Assembly can be simply a clari
fication of the intent of the 77th General Assembly which originally enacted the statute seven years earlier since only a fraction of the individuals who comprised the General Assembly were the same at both times."
Roth
, 77 Ill. 2d at 428, 396 fuentesmichelle@example.org.
Nevertheless, the Taxpayers and the trial court concluded that this case is controlled by the supreme court's subsequent state
ment that "although the passage of an amendment raises a presump
tion that the legislature intended to change the substantive law, the presumption will be rebutted if the circumstances show that the legislative intent was to clarify previously ambiguous lan
guage."
Commonwealth Edison Co. v. Department of Local Govern
ment Affairs
, 85 Ill. 2d 495, 505, 426 N.E.2d 817, 821 (1981).
The question is whether the prior statutory scheme was ambiguous. The
Chicago SMSA
court concluded that it was not. The discussion above shows further reasons for concluding that there was no ambiguity. Moreover, the TMIMFA was intended "to abolish the invested capital tax on telecommunications retail
ers." 35 ILCS 635/5 (West 1998). The stated reason for doing so was that "telecommunications retailers have evolved from utility status into an increasingly competitive industry serving the public." 35 ILCS 635/5 (West 1998). Whether cellular retailers had already been excluded from the tax would seem to be relevant only to the extent such action contributed to increased competi
tion. Yet the statement of legislative intent does not state that the invested capital tax was being repealed in its entirety to "level the playing field" between cellular and non-cellular telecommunications retailers. In addition, the statement cited by the Taxpayers is couched as a statement of fact and makes no reference to the prior statutory scheme being ambiguous. In short, the TMIMFA was intended to repeal the invested capital tax, not to clarify it.
Furthermore, the TMIMFA was approved on June 20, 1997, with an effective date of January 1, 1998. The Taxpayers rely on supreme court case law stating that:
"If the amendment was enacted soon after con
troversies arose as to the interpretation of the original act, it is logical to regard the amendment as a legislative interpretation of the original act--a formal change--rebutting the presumption of substantial change [of the original act by the amendment]."
Gill v. Miller
, 94 Ill. 2d 52, 58, 445 N.E.2d 330, 333 (1983), quoting 1A A. Sutherland, Statu
tory Construction § 22.31 (4th ed. 1972).
Conversely, a statute that remains unaltered through successive sessions of the General Assembly over a period of years indicates legislative acquiescence in a contemporary and continuous admin
istrative interpretation.
People ex rel. Spiegel v. Lyons
, 1 Ill. 2d 409, 415, 115 N.E.2d 895, 898 (1953).
In this case, the Taxpayers point to a 1990 private letter ruling that the invested capital tax was limited to original parameters of the messages tax and could not be expanded to cover interstate transactions, even if similar transactions were sub
ject to the Telecommunications Excise Tax Act, unless the legis
lature enacted legislation that would impose such a tax. How
ever, a reading of section 2a.1 shows that the 1991 amendment which the taxpayers claim excluded them from taxation actually amended the law to specify that the tax would apply to "a re
tailer of communications as defined in Section 2 of the Telecom
munications Excise Tax Act," not just to "persons engaged in the business of transmitting messages subject to the tax imposed by this [Messages Tax] Act ***."
Following the 1991 amendment, the Department concluded that cellular telecommunications service providers are subject to the invested capital tax. See
Chicago SMSA
, 306 Ill. App. 3d at 979, 715 N.E.2d at 721 (taxpayer received notice of invested capital tax liability in 1992). The statement of legislative intent in the TMIMFA became effective years after the 1991 amendment and years after the November 1995 determination of the Department in
Chicago SMSA
. 306 Ill. App. 3d at 980, 715 fuentesmichelle@example.org. Thus, the legislature acquiesced in a contemporary and continuous administrative interpretation of the fuentesmichelle@example.org.
The Taxpayers criticize the
Chicago SMSA
court's treatment of section 5 of the TMIMFA, arguing that as passed by the legis
lature it carries the force of law. However, the rule is that expression by the legislature of an erroneous opinion concerning the law does not alter it.
Arnold v. City of Chicago
, 387 Ill. 532, 541-42, 56 N.E.2d 795, 800 (1944). Thus, the Taxpayers' criticism is not persuasive.
In sum, the Director did not err in determining that the Taxpayers remained regulated by the ICC during tax years 1991-94.
III
The remaining issues the Taxpayers raise in the appeal are also addressed in the conclusions and dicta of
Chicago SMSA
. For example, the Taxpayers contend the General Assembly intended to impose the invested capital tax only on monopolistic public util
ities. The Taxpayers also contend that the invested capital tax was a replacement tax which could not apply to them because the cellular telecommunications industry did not exist in 1979. The
Chicago SMSA
court noted that the plain language of the relevant statute placed no such limits on the tax and declined to imply them.
Chicago SMSA
, 306 Ill. App. 3d at 981, 715 fuentesmichelle@example.org.
The Taxpayers here do not explain how the
Chicago SMSA
court erred in resolving these arguments in favor of the Department. Indeed, the taxpayers cite no authority which supports their position. The Taxpayers' sole citation to authority,
Continental Nat'l Bank & Trust Co. of Chicago v. Zagel
, 78 Ill. 2d 387, 410, 401 N.E.2d 491, 502 (1979), discusses the purpose of the invested capital tax, but does not refer to monopoly status as a prerequi
site for tax liability.
The Taxpayers also note that
Zagel
suggested that it would be improper if the invested capital tax was a revenue-raising measure as opposed to a revenue-replacing measure. See
Zagel
, 78 Ill. 2d at 401, 401 fuentesmichelle@example.org. However, the
Zagel
court held that the invested capital tax was in fact a replacement tax.
Zagel
, 78 Ill. 2d at 401-02, 401 fuentesmichelle@example.org. The mere fact that new taxpayers became subject to the tax does not alter the supreme court's conclusion; the validity of the tax is based on the design and nature of the tax, not the demographics of the taxpayers.
The Taxpayers maintain that they are exempt from the in
vested capital tax under the Commerce Clause of the U.S. Consti
tution. Although the taxpayers in
Chicago SMSA
waived this argument, the
Chicago SMSA
court rejected it in
dicta
, noting that (as also noted above in discussing the Department's consis
tent interpretation) the 1991 amendment to section 2a.1 expanded the scope of entities taxed, removing any Commerce Clause prob
lem. See
Chicago SMSA
, 306 Ill. App. 3d at 988, 715 fuentesmichelle@example.org. As the relevant amendment occurred in 1991, the Taxpayers simply cannot rely on a private letter ruling issued in 1990.
Nor is there a uniformity problem under the Illinois Consti
tution of 1970 (Ill. Const. 1970, Art. IX, § 2). The statutes are not overinclusive because the expansion in scope of the 1991 amendment to section 2a.1 refutes the claim that the tax was not meant to apply to the Taxpayers, despite the fact that the tax
payers might own less personal property than non-cellular retail
ers. The statutes are not underinclusive for failure to apply the tax to resellers of cellular service, as providers such as the Taxpayers must invest in transmitting equipment, thus justi
fying different treatment.
Chicago SMSA
, 306 Ill. App. 3d at 987, 715 fuentesmichelle@example.org. This factor also distinguishes this case from the two cases cited by the Taxpayers. See
Federated Distributors, Inc. v. Johnson
, 125 Ill. 2d 1, 530 N.E.2d 501 (1988) (holding there was no real, substantial difference between low-alcohol beverages and wine coolers that would justify differ
ent tax rate);
National Pride of Chicago, Inc. v. City of Chi
cago
, 206 Ill. App. 3d 1090, 562 N.E.2d 563 (1990) (tax imposed on self-service car washes, but not on automatic car washes, violated uniformity clause).
For all of the aforementioned reasons, the judgment of the circuit court of Cook County is reversed.
Reversed.
BUCKLEY, J., and O'BRIEN, J., concur.
FOOTNOTES
1:
At oral argument, the Taxpayers suggested that certain ICC regulations would have been preempted by federal legislation had the ICC not acted. However, the Taxpayers did not raise this argument before the Department, thus waiving it on appeal.
Chicago SMSA
, 306 Ill. App. 3d at 988, 715 fuentesmichelle@example.org. We further note in passing that the
Chicago SMSA
court rejected a preemption argument.
Chicago SMSA
, 306 Ill. App. 3d at 986-87, 715 fuentesmichelle@example.org. We express no opinion on the question of whether the ICC's regulation is immutable or irrevocable, as the parties did not brief the issue.
|
Case 2:19-cv-03212-SVW-GJS Document 1-1 Filed 04/24/19 Page 1 of 2 Page ID #:22
EXHIBIT “1”
Case 2:19-cv-03212-SVW-GJS Document 1-1 Filed 04/24/19 Page 2 of 2 Page ID #:23
BUDGET &FINANCF
MOTION
According to the Gun Violence Archive, since the Sandy Hook Elementary School
shooting in December 2012, there have been more than 1,600 mass shootings. In 2018 alone,
there have been over 200 mass shooting incidents.
Research compiled by Everytown for Gun Safety show that on average, 96 Americans
are killed with guns on a daily basis, while hundreds more are injured. The effects of gun
violence extend far beyond these casualties.
The National Rifle Association (NRA) has been one of the most significant roadblocks
to sensible gun safety reform at every level of government across the nation. In Congress,
next to nothing has been done due to the NRA’s stranglehold and propaganda machine.
According to an audit obtained by the Center for Responsive Politics, the NRA’s spending on
political activities from 1998-2017 aggregated to over $200 million.
The City of Los Angeles has historically enacted ordinances and adopted positions that
support and promote gun safety and gun safety legislation.
For the sake of transparency, the City’s residents and stakeholders deserve to know
how the City’s public funds are being spent, and whether taxpayer funds are being spent on
contractors that have contractual or sponsorship ties with the NRA. An ordinance should be
drafted and modeled after existing disclosure requirements like the Border Wall Contracts
Disclosure and the Slavery Disclosure ordinances.
I THEREFORE MOVE, that the City Council REQUEST the City Attorney, with the
assistance of the Bureau of Contract Administration, to prepare and present an ordinance
directing any prospective contractor with the City of Los Angeles to disclose, under affidavit:
(1) any contracts it or any of its subsidiaries has with the National Rifle Association; and (2)
any sponsorship it or any of its subsidiaries provides to the National Rifle Association.
PRESENTED BY:^
C2
MITCH O’FARRELL
Councilmember,13,h District
SECONDED BY:
SEP 2 1 2018
|
565 N.E.2d 159 (1990)
207 Ill. App. 3d 62
151 Ill. Dec. 888
BRIAN McDONAGH S.C., an Illinois Medical Corporation, and Vein Clinics of America, Inc., a Delaware Corporation, Plaintiffs-Appellants,
v.
Debra MOSS, M.D., Defendant-Appellee.
Nos. 1-89-2362, 1-89-2425.
Appellate Court of Illinois, First District, Third Division.
December 5, 1990.
Wildman, Harrold, Allen & Dixon, Chicago (Robert E. Kehoe, Jr. and M. Jayne Rizzo, of counsel), for plaintiffs-appellants.
James K. Toohey, Daniel P. Hogan, Chicago, for defendant-appellee.
Justice RIZZI delivered the opinion of the court:
Plaintiffs, Brian McDonagh and Vein Clinics of America, Inc., brought an action against defendant, Debra Moss, M.D., for breach of a covenant not to compete in a specified type of medical practice. The covenant not to compete was part of a written contractual agreement (Agreement) between the parties. Plaintiffs moved for a preliminary injunction to enjoin the defendant from engaging in a competing medical practice in violation of the covenant not to compete. While the plaintiffs' motion for a preliminary injunction was pending, defendant moved to strike the prayer for equitable relief in the complaint because the covenant not to compete expressly provided for liquidated damages for a breach. The trial court concluded that plaintiffs' exclusive remedy for a breach of the covenant not to compete is liquidated damages, and therefore entered an order granting defendant's motion to strike the prayer for equitable relief and denying plaintiffs' motion for a preliminary injunction. We reverse and remand for further proceedings in the trial court, including a hearing on the merits with respect to plaintiffs' motion for a preliminary injunction.
The plaintiffs are two related corporations providing for specialized medical services under the auspices and direction of Dr. Brian McDonagh. Defendant, a physician, joined the plaintiffs' specialized practice *160 pursuant to the Agreement executed between the parties.
Section 12 of the Agreement provides that for four years after termination of the Agreement, the defendant would not enter into a competing related medical practice within a 50-mile radius of any of the plaintiffs' offices. Section 12.2 provides for liquidated damages if the defendant breached the covenant not to compete. The entire text of this portion of the Agreement is as follows:
12.2 Remedy. S.C. (plaintiff) and Independent Contractor (defendant) acknowledge that it is difficult to compute the amount of loss or damages plaintiffs will sustain if defendant breaches her covenant under this Section 12. Plaintiff and defendant agree that the measure hereinafter provided represents the product of their good faith negotiations. Accordingly, if defendant breaches her covenant under this Section 12, defendant agrees to pay plaintiff, as liquidated damages under this Agreement, the greatest of the following: (i) her gross income from her use of injection compression sclerophleboplasty during the 12 month period beginning with the first such use computed on the accrual basis method of accounting; (ii) an amount equal to plaintiff's gross receipts from defendant's services hereunder during the 24 months immediately preceding the date of termination (or her breach, if earlier); or (iii) the rate of defendant's Annual Fee in effect on the date of termination. The first $95,000 of such amount shall be payable as of the first day on which defendant breaches such covenant; the balance, if any, shall be payable on the first anniversary of the date of termination. If not paid when due, any amount payable hereunder shall bear interest at two percent (2%) above the floating prime rate of interest charged by The First National Bank of Chicago. If plaintiff is involved in a court proceeding to enforce the covenants contained in this Section 12, then in the event plaintiff prevails in such litigation, defendant shall be liable for the payment of reasonable attorneys' fees, court costs and ancillary expenses incurred by plaintiff in enforcing its rights hereunder, and in the event defendant prevails in such litigation, plaintiff shall be liable for the payment of reasonable attorneys' fees, court costs and ancillary expenses incurred by defendant in connection with such litigation. In the event the provisions of this Section 12 should be deemed to exceed the limitations permitted by law, then this Section 12 shall be modified to include the maximum restrictions permitted by law.
The complaint alleges that defendant terminated the Agreement without the requisite 90 days notice, and that in violation of the Agreement she has started a competing specialized type of medical practice within the proscribed 50-mile radius.
In reviewing this case, we start with the premise that a provision for liquidated damages in the event of a breach does not in itself make specific performance of the Agreement unavailable as a remedy. Bauer v. Sawyer (1956), 8 Ill. 2d 351, 134 N.E.2d 329. Such a provision for liquidated damages, absent a clear contrary showing, is merely an added security in the event of a breach, and not a loophole of escape from performance. See Restatement (Second) of Contracts § 361; 5A Corbin, Contracts § 1213. Here, there is no clear showing that the provision for liquidated damages in section 12.2 of the Agreement was intended to preclude injunctive relief in the event of a breach. If the parties had intended that the provision for liquidated damages precluded injunctive relief, they could have included explicit language to that effect in the Agreement, or they could have included explicit language that the liquidated damages was to be the sole remedy in the event of a breach.
Defendant contends that "viewing the Agreement in its entirety," the plaintiffs "intended the monetary damages specified in section 12 to constitute their exclusive remedy for any breach of that provision." Defendant refers to section 10.2 and section *161 13 of the Agreement to support her contention.
Section 10.2 provides:
Offsets. In addition to all other remedies available to plaintiff, defendant and plaintiff agree that upon the termination of this relationship for any reason, plaintiff shall have the right to offset any amounts payable from plaintiff to defendant against any amount owed to plaintiff by defendant.
Section 13 of the Agreement makes it improper for defendant to "use, sell, offer for sale, divulge or solicit the sale" of certain proprietary or confidential information. Section 13.2 provides that if the defendant "breaches her covenant under this Section 13, defendant agrees that in any suit which may be brought by plaintiff in any court having jurisdiction, an order may be entered enjoining her from breaching such covenant, and an order to that effect shall be entered pending the litigation, as well as a final determination thereof, without the requirement to post bond, and that such application for such injunction shall be without prejudice to any other right of action which accrues to plaintiff by reason of the breach of the foregoing provisions." Defendant argues that because sections 10.2 and 13 of the Agreement provide for relief in addition to the liquidated damages stated in section 12, the parties intended that the defendant be allowed to breach the covenant not to compete in section 12 on a continuing basis without court intervention so long as defendant pays the liquidated damages. In other words, defendant argues that the parties intended that performance of the covenant not to compete could not be enforced. We disagree.
In reviewing the Agreement in its entirety, we conclude that sections 10.2 and 13.2 do not demonstrate that the parties intended that the liquidated damages provision of section 12.2 is to be an exclusive remedy thereby precluding injunctive relief. In order to be a complete bar to equitable relief, there must be clear language in an agreement that the liquidated damages is to be the sole remedy in the event of a breach. See Coney v. Commercial National Realty Co. (1980), 88 Ill.App.3d 1026, 1028, 44 Ill. Dec. 89, 90, 410 N.E.2d 1181, 1182. Here, whether the Agreement is read seriatim or as a whole, there is no such clear language in the Agreement.
Defendant also contends that because section 12 of the Agreement does not expressly provide for injunctive relief in the event of a breach, the parties did not intend to allow for injunctive relief. We reject this contention outright. Parties to an agreement are not required to state in the agreement all of the remedies which the law gives them and which they may seek, and merely because they specifically provide for a certain remedy does not preclude other remedies available to them under the law in the event of a breach.
Under the circumstances, we conclude that the liquidated damages provision in section 12.2 of the Agreement is not an exclusive remedy which precludes the plaintiffs from obtaining equitable relief in the event of a breach. The trial court therefore erred in granting defendant's motion to strike the prayer for equitable relief and denying plaintiffs' motion for preliminary injunction without a hearing on the merits.
The order entered by the trial court is reversed and the case is remanded for further proceedings, including a hearing on the merits with respect to plaintiffs' motion for a preliminary injunction.
REVERSED AND REMANDED.
CERDA, P.J., and WHITE, J., concur.
|
IN THE UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
UNITED STATES OF AMERICA )
)
)
v. ) Criminal No. 3:17-cr-00092
) Judge Trauger
TAD ERIC CUMMINS, )
)
ORDER
On July 15, 2020, the defendant filed, pro se, a request for compassionate release (Doc.
No. 127). The court appointed counsel and, on August 19, 2020, counsel filed a Supplemental
Motion for Compassionate Release (Doc. No. 130), to which the government responded in
opposition (Doc. No. 132), the defendant filed a Reply (Doc. No. 139), and the government filed
a Sur-Reply (Doc. No. 145). The defendant requests compassionate release under 18 U.S.C. §
3582(c)(1)(a) on the grounds that he suffers from hypertension and obesity and is at increased
risk, should he contract the COVID-19 virus. He is housed at Talladega FCI, where some
inmates and staff have contracted the virus, but there have been no deaths. The defendant has
exhausted his administrative remedies.
The defendant was sentenced on January 16, 2019 and has served approximately 16% of
a 240-month sentence imposed for transporting a minor with the intent to engage in criminal
sexual activities and obstruction of evidence in a federal investigation. His guideline range was
292-365 months; the court granted a variance and sentenced him to 240 months of imprisonment.
The defendant, a teacher, began a sexual relationship with a 15-year-old student and, after he was
suspended upon discovery of the relationship, absconded with the minor victim. For 38 days
Case 3:17-cr-00092 Document 146 Filed 10/05/20 Page 1 of 2 PageID #: 984
they were on the run, traveling west through at least nine states, during which time they “ had sex
every day”. The defendant disabled the GPS system in the car they were driving and threw their
cell phones in a river in order to avoid detection. The victim has written a statement, in response
to this motion, stating her continuing fear if he is released into the community. (Doc. No. 132-4).
The defendant is 54 years old and, according to the medical records produced, has
“elevated” blood pressure, according to the American Heart Association categories.
Hypertension or high blood pressure is a condition that the Centers for Disease Control rates as
one that “might” put a person at increased risk of severe illness from COVID-19. This is not one
of the conditions that definitely places one at increased risk. The defendant takes three
medications for his hypertension and is regularly monitored at his institution. It appears that his
hypertension is well controlled in the BOP setting. A diagnosis of obesity appears nowhere in the
medical records.
The defendant’s case for establishing extraordinary and compelling reasons for his
immediate release is a weak one. Moreover, given the egregious conduct of the defendant and its
impact upon the victim and her family, his release from custody after serving such a small
portion of his significant sentence would subvert the sentencing factors that this court must
consider. His release would result in an insignificant sentence that would not reflect the
seriousness of his offense, promote respect for the law, be a just punishment, or protect the
public from further crimes of this defendant. Moreover, it would create unwarranted sentencing
disparities among defendants with similar records who have been found guilty of similar
conduct. For all these reasons, the defendant’s motion is DENIED.
IT IS SO ORDERED.
_________________________________
ALETA A. TRAUGER
U.S. DISTRICT JUDGE
Case 3:17-cr-00092 Document 146 Filed 10/05/20 Page 2 of 2 PageID #: 985
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NANCY HUFF, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, RespondentHuff v. CommissionerDocket No. 8703-93United States Tax CourtT.C. Memo 1995-200; 1995 Tax Ct. Memo LEXIS 200; 69 T.C.M. 2551; May 4, 1995, Filed 1995 Tax Ct. Memo LEXIS 200">*200 Decision will be entered under Rule 155. Nancy Huff, pro se. For respondent: Harris L. Bonnette, Jr.GERBERGERBERMEMORANDUM FINDINGS OF FACT AND OPINION GERBER, Judge: Respondent determined deficiencies in petitioner's 1989, 1990, and 1991 Federal income taxes in the amounts of $ 38,104.16, $ 802.04, and $ 614.55, respectively. Respondent also determined accuracy-related penalties under section 6662 1 for the respective taxable years in the amounts of $ 7,620.83, $ 160.40, and $ 122.91. After concessions, the issues remaining for our consideration are: (1) Whether petitioner is entitled, under section 104, to exclude any part of the $ 187,500 lawsuit settlement she received in 1989; (2) whether petitioner is entitled to claim dependency exemption deductions for her daughter for 1990 and 1991 and to use head of household rates for those years; (3) whether petitioner is entitled to certain medical deductions; and (4) whether petitioner is liable for accuracy-related penalties under section 6662 for 1989, 1990, or 1991. 1995 Tax Ct. Memo LEXIS 200">*201 FINDINGS OF FACT 2Petitioner resided in Winter Haven, Florida, at the time her petition in this case was filed. Sometime during 1983, petitioner became involved with Joe Gandolfo (Gandolfo). Gandolfo lived near petitioner in Florida, and petitioner, at a time when she was anticipating a divorce, sought Gandolfo's financial advice, for which he charged $ 1,000. Gandolfo later sent petitioner prospective investment materials, and petitioner became more involved with and reliant on Gandolfo as her financial and tax adviser. Gandolfo referred petitioner to accountants, lawyers, and investment opportunities. Gandolfo advised petitioner to invest in the International Thoroughbred Bloodstock Agency, Inc. (ITBA), a horse syndication corporation. ITBA was based in Fort Lauderdale, 1995 Tax Ct. Memo LEXIS 200">*202 Florida, with a horse farm in Ocala, Florida. ITBA engaged in the breeding of racehorses and the syndicating of its stallions, broodmares, and yearlings for sales percentages. Unbeknownst to petitioner, Gandolfo received 15 percent of any referred investors' gross investment dollars flowing to ITBA. On July 24, 1984, petitioner invested $ 9,800 for a one-fortieth interest in an ITBA syndication known as "Mr. Pleasure I", involving a stallion and broodmares. A certified public accountant, Richard Derk, prepared petitioner's 1984 through 1991 Federal income tax returns. On her 1984 tax return (in connection with the ITBA investment) petitioner claimed depreciation deductions, based on the following reported costs of animals: Type of AnimalReported CostClaimed DepreciationStallion$ 20,000$ 3,000Four broodmares40,00010,000Stallion2,000300Four broodmares4,0001,000Total 66,00014,300Petitioner also claimed $ 836 for farrier expenses on her 1984 return. Petitioner invested an additional $ 50,000 in ITBA syndications during 1985, and on her 1985 return, claimed a combined total of $ 28,510 in depreciation deductions with respect to her ITBA 1995 Tax Ct. Memo LEXIS 200">*203 investments. Petitioner also claimed other farm expenses in connection with various horses totaling $ 82,343, and she reported income from the horses of $ 19,549. During 1986, ITBA collapsed and went into a liquidating bankruptcy. In May 1986, petitioner learned of these problems, and that she would not be paid anything from her ITBA investments. On her 1986 income tax return, petitioner claimed a $ 54,190 loss attributable to the undepreciated adjusted basis of the horses. That loss consisted of a $ 97,000 cost basis, less $ 42,810 of previously claimed depreciation. The entire $ 54,190 was used to offset petitioner's citrus farm income. On her 1986 return, petitioner reported $ 8,000 of income, and claimed $ 1,040 of expenses concerning the horses. The ITBA loss caused severe financial pressure and reversals to petitioner. In that connection, and, after learning of the collapse of ITBA in 1986, petitioner began to experience stress. Prior to 1986, petitioner had been successful in earning income from her citrus grove business activity, but the ITBA collapse resulted in her becoming heavily indebted with mortgages on her grove property and less able to repay the debt. During1995 Tax Ct. Memo LEXIS 200">*204 1988, petitioner's attorney filed a complaint against Gandolfo seeking money damages in excess of $ 145,000 in connection with her ITBA investment. Remuneration was sought on eight alternate grounds: (1) Federal securities laws, (2) Federal RICO laws, (3) Florida Civil Remedies for Criminal Practices Act, (4) common law fraud, (5) negligence, (6) breach of fiduciary duty, (7) Florida Deceptive and Unfair Trade Practices Act, and (8) misleading advertising. Petitioner sought actual damages, punitive damages, attorney's fees, prejudgment interest, court costs, and any other relief that the court deemed just and proper. Petitioner's complaint did not contain any specific personal injury allegation. Petitioner understood that her lawyer sought punitive damages because of her emotional distress and because of her loss regarding her business reputation. During 1989, petitioner executed a release of her claims against Gandolfo in exchange for $ 187,500. This document released Gandolfo and others from claims and demands "including but not limited to * * * personal injuries, emotional distress, loss of reputation and damage to business reputation". Of the $ 187,500 settlement, petitioner1995 Tax Ct. Memo LEXIS 200">*205 received a net sum of $ 111,596.75 (after reductions for legal fees and court costs in the amounts of $ 75,000 and $ 903.25, respectively). When petitioner read and signed the release, she believed that the settlement was for emotional distress and mental stress. Thus, petitioner did not report any portion of the settlement on her 1989 income tax return. When petitioner signed the release and signed her 1989 Federal income tax return, she was not aware of the contents of the complaint filed against Gandolfo. Petitioner claimed her daughter, Sherry Brady (Sherry), as a dependent for 1990 and 1991. Sherry's 1990 Federal tax return (Form 1040EZ) reported adjusted gross income of $ 9,473.79. Sherry was 27 years old during 1990. During May or June 1990, Sherry moved in with petitioner and resided with her during the remainder of 1990 and until the fall of 1991. During 1990 petitioner provided Sherry with food, paid $ 559.90 for Sherry's auto insurance, and provided her with a $ 9,400 allowance. Sherry lived with petitioner until about September 1991, when she moved to Chicago to attend school. In 1991, Sherry did not have sufficient taxable income to file a tax return, and she1995 Tax Ct. Memo LEXIS 200">*206 was supported by petitioner. Petitioner paid $ 599 for auto insurance, and provided an allowance of $ 16,300 to Sherry during 1991. Petitioner spent $ 1,500 on Sherry's food for each of the years 1990 and 1991. At the end of 1991 (during the holiday season) Sherry occasionally worked in a department store in Chicago. OPINION 3Settlement of the Gandolfo litigation -- Petitioner relied on the advice of her financial and tax adviser, and invested in horse-breeding syndications. Her investment collapsed, and she claimed an ordinary loss to reduce her 1986 gross income (in an amount equal to the adjusted basis of her investment). Subsequently, petitioner sued her adviser and the complaint contained allegations of wrongdoing by Gandolfo, but did not specifically seek damages for personal injury. Petitioner's loss was substantial in relation to her total assets and sources of income, 1995 Tax Ct. Memo LEXIS 200">*207 and it placed her in a difficult financial situation. These financial reverses caused petitioner to experience extreme emotional stress and caused her to seek various types of medical treatment (which is more fully addressed in the "Medical Expenses" section of this opinion). In the final negotiation and resolution of petitioner's claim, Gandolfo agreed to settle petitioner's claim for an amount that was close to double her reported tax-cost basis for the investment. The settlement document contained the statement that the amount to be received by petitioner was for but "not limited to * * * personal injuries, emotional distress, loss of reputation and damage to business reputation". Under these circumstances, petitioner did not report any portion of the settlement, contending that it was for personal injury. Respondent determined that petitioner's complaint did not sound in tort or plead any personal injury, so that no part of it could be tax exempt under section 104. Respondent argues that section 111 will apply if we find that any portion of the settlement is exempt. That section 4 would render taxable any portion of the settlement that is represented by tax benefits already1995 Tax Ct. Memo LEXIS 200">*208 received by petitioner. Section 104(a)(2) excludes damages received due to personal injuries. The term "personal injuries" includes nonphysical as well as physical injuries. Downey v. Commissioner, 97 T.C. 150">97 T.C. 150, 97 T.C. 150">159 (1991) (and cases cited therein), supplemented by 100 T.C. 634">100 T.C. 634 (1993), revd. on other grounds and remanded 33 F.3d 836">33 F.3d 836 (7th Cir. 1994); see also United States v. Burke, 504 U.S. 229">504 U.S. 229, n.6 (1992). Accordingly, the distinction made is one between personal and nonpersonal injuries and not between physical and nonphysical injuries. 97 T.C. 150">Downey v. Commissioner, supra at 159 (citing Roemer v. Commissioner, 716 F.2d 693">716 F.2d 693, 716 F.2d 693">697 (9th Cir. 1983), revg. 79 T.C. 398">79 T.C. 398 (1982)). 1995 Tax Ct. Memo LEXIS 200">*209 Excludable damages under section 104 are those that are received in pursuit of tortlike claims, and not those that arise out of economic or contractual rights. 97 T.C. 150">Id. at 160 (citing Byrne v. Commissioner, 883 F.2d 211">883 F.2d 211, 883 F.2d 211">215 (3d Cir. 1989), revg. 90 T.C. 1000">90 T.C. 1000 (1988)). Where damages are received pursuant to a settlement, excludability depends on the nature of the claim that was the actual basis for settlement rather than the validity of the claim. 97 T.C. 150">Id. at 161 (and cases cited therein). Accordingly, we must determine here whether any portion of the $ 187,500 settlement was from a tort or tortlike injury. Respondent focuses solely on petitioner's complaint (which does not specifically plead any damages attributable to personal injuries). 5 Petitioner, on the other hand would have us focus solely on the settlement document (in the form of a release) which includes nonspecific claims for personal injuries and emotional distress. Obviously, we must consider both documents and other aspects of the record to decide the nature of the claim and the nature of the settlement. 1995 Tax Ct. Memo LEXIS 200">*210 Respondent's position is that the entire $ 187,500 settlement is nonpersonal. This, however, contradicts respondent's position that petitioner's investment was limited to $ 97,000, as opposed to the more than $ 200,000 that petitioner argues represents her basis. Petitioner testified that certain bank transfers, in excess of the $ 97,000 paid to ITBA and claimed on her income tax returns, were also payments made to ITBA for additional syndications. The record, however, does not support petitioner's testimony. The referenced bank transfers do not show the payee. Further, petitioner's income tax returns do reflect a tax cost basis of $ 97,000, both for purposes of claiming depreciation and for the ITBA loss. Moreover, this situation is further complicated by petitioner's complaint against Gandolfo alleging, without explanation, money damages in excess of $ 145,000. Finally, the parties do not address the farming expenses claimed concerning petitioner's ITBA investment. The settlement document (release) reflects: "personal injuries, emotional distress, loss of reputation and damage to business reputation". Considering the complaint, the settlement, and the relationship of the1995 Tax Ct. Memo LEXIS 200">*211 total investment to the total settlement, we conclude that the settlement was for $ 90,500 in personal injuries and for $ 97,000 for the nonpersonal loss of investment. Accordingly, $ 90,500 of the settlement is excludable under section 104(a)(2). See Stocks v. Commissioner, 98 T.C. 1">98 T.C. 1, 98 T.C. 1">17 (1992). Having decided that the settlement should be allocated, and that $ 90,500 of the $ 187,500 is exempt from tax, we must also consider the allocation of the legal fees and costs under section 265(a)(1). That section precludes a deduction for legal fees attributable to tax-exempt income. Stocks v. Commissioner, surpa at 17-18; sec. 1.265-1(c), Income Tax Regs. Hence, the $ 75,000 in legal fees and the $ 903.25 in costs must be allocated. We hold, for the same reasons underlying our holding on the allocation of the settlement that petitioner is entitled to deduct a legal fee of $ 38,800 and costs of $ 467. 61995 Tax Ct. Memo LEXIS 200">*212 Because we have held that $ 97,000, less the apportioned amounts for fees and costs, is taxable, it is unnecessary to consider respondent's alternate position (i.e., that section 111 would require petitioner to report the portion of the settlement attributable to the tax benefits). Dependency exemption for petitioner's daughter -- Petitioner claims that for 1990 and 1991 she was entitled to dependency exemption deductions for her daughter, Sherry, who was approximately 27 or 28 years old at the relevant times. Petitioner also claimed head of household filing status for 1990 and 1991, which would result in a lower rate of tax. Petitioner must show that she provided over one-half of her daughter's support and that her daughter earned less than the exemption amount for the taxable years in question, to claim the dependency exemptions. Secs. 152(a), 151(c)(1)(A). 7 Because petitioner's daughter earned more than the exemption amount in 1990, petitioner cannot claim a dependency exemption for her. 1995 Tax Ct. Memo LEXIS 200">*213 Petitioner's daughter lived with petitioner into the fall of 1991, and petitioner paid almost $ 17,000 for her daughter's support, not including food. Petitioner's daughter left petitioner's home during the fall of 1991 to become a student in Chicago, and she worked occasionally during the holiday season. Petitioner's testimony, along with the other evidence in the record, convinces us that her daughter did not earn more than the exemption amount during 1991. Accordingly, petitioner has shown that she is entitled to claim a dependency exemption for her daughter for 1991. Furthermore, petitioner was not married, and she maintained her home for more than one-half of the 1990 and 1991 tax years as her daughter's principal place of abode. Accordingly, petitioner was entitled to file her 1990 and 1991 returns using head of household rates, under section 2(b)(1)(A)(i). Medical expenses -- Respondent disallowed petitioner's claimed medical deductions for 1989, 1990, and 1991. Respondent conceded that certain of petitioner's medical expenses would be allowable in each year, but that the conceded amounts did not exceed the 7.5 percent of adjusted gross income threshold. Accordingly, 1995 Tax Ct. Memo LEXIS 200">*214 we review the record without considering any of respondent's concessions. Petitioner does not contend that her daughter was a dependent for 1989, and, accordingly, is not entitled to any 1989 medical deduction on her behalf. Secs. 152(a), 213(a). Although petitioner was not entitled to claim a dependency exemption deduction for Sherry for 1990 (because Sherry had income exceeding the exemption amount), Sherry was petitioner's dependent, and her medical expenses paid by petitioner for 1990 remain deductible for purposes of section 213. See secs. 1.213-1(a)(3)(i), 1.151-2, Income Tax Regs.For 1991, petitioner was entitled to claim an exemption for Sherry and is entitled to deduct any medical expenses paid on her behalf for that year. Under section 213, taxpayers are entitled to medical deductions for the cost of medical care (to the extent the total amount of such medical care exceeds 7.5 percent of one's adjusted gross income). "Medical care" is generally defined as "amounts paid * * * for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body, * * * [and] for insurance * * * covering medical1995 Tax Ct. Memo LEXIS 200">*215 care". Sec. 213(d)(1)(A), (C). Petitioner bears the burden of proving that she is entitled to the medical deductions that she claimed. Rule 142(a). We shall consider the general, broad categories of items, and then apply our findings and analysis to each specific enumerated item in controversy. Petitioner had experienced substantial emotional stress and physical problems concerning the financial crisis involving ITBA. At the time the suit against Gandolfo was settled, petitioner owed approximately $ 300,000, evidenced by notes, secured by mortgages on her citrus grove. The shortfall between petitioner's settlement and her outstanding debt caused her to lapse into a state of mental depression. Petitioner, who considers herself well versed in medical concepts, decided that, rather than go to a psychiatrist, she would attempt to relieve her stress by other means. Petitioner went to the Maharishi Ayur-Veda Health Center in Palm Beach, Florida, and sought the assistance of Dr. Deepak Chopra, who specializes in the treatment of stress-related problems of the nervous system. Petitioner spent 5 days, on an outpatient basis, in the clinic for "parchakarmic" treatment. Her treatment1995 Tax Ct. Memo LEXIS 200">*216 consisted of a special vegetarian diet to remove "toxics", two people performing body massages on petitioner, and hot oil bath treatments. In addition to her trip to the clinic in Palm Beach, petitioner had received massages from various individuals prior to and following her clinic visit. Donald D. Mayfield, a homeopathic acupuncture physician, whom petitioner used during 1990 and 1991, had suggested the use of body massage and colonic irrigation, in addition to her office visits with him. Petitioner must show that the massage treatment has a proximate relationship to "diagnosis, cure, mitigation, treatment, or prevention of disease". Sec. 213; Havey v. Commissioner, 12 T.C. 409">12 T.C. 409, 12 T.C. 409">411-412 (1949). "In considering the question of deductibility of expenditures for 'medical care' under section 213, it is necessary to bear in mind that section 262 prohibits deductions for personal, living, and family expenses." Haines v. Commissioner, 71 T.C. 644">71 T.C. 644, 71 T.C. 644">646 (1979). In this regard, an expenditure that is merely for the benefit of one's general health, such as a vacation, is not an expenditure for medical care. Sec. 1.213-1(e)(1)(ii), 1995 Tax Ct. Memo LEXIS 200">*217 Income Tax Regs.We have no doubt that petitioner believed that these massages would relieve her mental stress. Petitioner's acupuncturist also suggested massages for petitioner's "lymphatics", 8 in addition to his treatment. Despite these factors, we do not find that the section 213 medical care definition covers petitioner's massages. In this setting, we find that the massages were more for petitioner's general well-being than for the cure, mitigation, treatment, or prevention of a specific disease. See sec. 213. In reaching our conclusion, we have considered the fact that petitioner had received massages prior to her acupuncturist's suggestion -- which we note is not the same as, for example, a medical prescription. Certain treatments are inherently1995 Tax Ct. Memo LEXIS 200">*218 medical in nature (i.e., surgery), and taxpayers have little difficulty convincing the Commissioner or courts that such procedures fit within the section 213 definition. Other treatments, however, such as a massage, are more commonly recognized as nonmedical procedures intended for an individual's general well-being. In those instances where a normally nonmedical procedure is claimed as a basis for a medical deduction, the burden is on such taxpayers to show that the procedure comes within the requirements of the statute. See, e.g., Murray v. Commissioner, T.C. Memo. 1982-269. Petitioner has not shown that her massages fit the requirements of the statute. Based on the record, we hold that the massages were for petitioner's general well-being, and were personal within the meaning of section 262, and therefore not deductible under section 213. Estate of Levine v. Commissioner, T.C. Memo. 1982-05, affd. without published opinion 729 F.2d 1441">729 F.2d 1441 (2d Cir. 1983); Gersten v. Commissioner, T.C. Memo. 1980-487. Similarly, amounts paid by petitioner to attend a wellness1995 Tax Ct. Memo LEXIS 200">*219 center for use of the exercise and spa and her yoga lessons were also for her general well-being and do not meet the section 213 requirements. During 1989, petitioner visited Dr. Rothenberg, expressing concerns about obesity, intermittent depression, and stress-related fatigue. Dr. Rothenberg conducted an exam of petitioner for $ 165, and his advice was "HEALTH MAINTENANCE HOT TUB". Dr. Rothenberg was affiliated with the Maharishi Ayur-Veda Medical Center. Petitioner purchased a deck and hot tub to be annexed to her home. The cost of the hot tub alone was $ 3,157.74 and, together with the deck, petitioner's total hot tub expenditures were $ 4,528.68. Initially, petitioner had claimed about one-half the cost of the hot tub as a medical deduction, but for purposes of trial, she took the more aggressive position that the entire hot tub and deck should be deductible as a medical expense. During 1991, petitioner purchased a water filtration system for her home, on recommendation of the person who performed her colonic irrigation. Hot tubs and water filtration systems promote one's general well-being. Therefore, petitioner must show that her purchase and use meet the statutory 1995 Tax Ct. Memo LEXIS 200">*220 definition for a medical deduction. Although it is possible that a hot tub or water filtration system was somewhat beneficial to petitioner's condition, she has not shown that the cost incurred was for the primary purpose of and/or was directly related to her medical care. Haines v. Commissioner, 71 T.C. 644">71 T.C. 644, 71 T.C. 644">647 (1979). Additionally, regarding petitioner's capital improvements, she must show that her expenditure did not result in increased value to her home. If the expenditure were deductible, a taxpayer would be entitled to deduct only the portion of the cost that does not enhance the value of the property. Ferris v. Commissioner, 582 F.2d 1112">582 F.2d 1112 (7th Cir. 1978), revg. T.C. Memo. 1977-186; Gerard v. Commissioner, 37 T.C. 826">37 T.C. 826 (1962); Keen v. Commissioner, T.C. Memo. 1981-313; sec. 1.213-1(e)(1)(iii), Income Tax Regs. Petitioner has failed to meet her burdens with respect to the hot tub, water filtration system, and/or deck. See also Gardner v. Commissioner, T.C. Memo. 1983-541. Petitioner also engaged1995 Tax Ct. Memo LEXIS 200">*221 in a regimen that included vitamins and food supplements, and she purchased a juice extractor. Special diets and food supplements may be deductible for purposes of section 213. Randolph v. Commissioner, 67 T.C. 481">67 T.C. 481 (1976). However, petitioner must show that they were for her medical care. Ford v. Commissioner, T.C. Memo. 1979-109. Petitioner must also show that any cost claimed exceeded the normal cost of her diet. Clark v. Commissioner, 29 T.C. 196">29 T.C. 196, 29 T.C. 196">200 (1957); Flemming v. Commissioner, T.C. Memo. 1980-583. With respect to her random purchases of vitamins and food supplements, petitioner has shown neither. Petitioner, experiencing symptoms of colitis, 9 went to Donald Mayfield, who practices acupuncture. Petitioner also had parasites in her colon. Mr. Mayfield, by inspecting specific pressure points in the body and with the aid of a computer, analyzed petitioner's body conditions. Petitioner was analyzed in Mr. Mayfield's office on numerous occasions during 1990 and 1991, and he provided petitioner with homeopathic 10 pills and liquid medicine to1995 Tax Ct. Memo LEXIS 200">*222 treat her condition. Mr. Mayfield also prescribed enterolavage (i.e., colon irrigation) treatment for petitioner. Following her overall treatment, petitioner's colitis and other intestinal problems were ameliorated. One of the larger items being claimed by petitioner is a $ 9,300 payment to Edward Sears for the purpose of "stress management". Petitioner has presented no evidence that would explain "stress management" vis-a-vis Edward Sears or how such expenditures would qualify as "medical * * * cure" under section 213. Petitioner has also failed to provide the Court with 1995 Tax Ct. Memo LEXIS 200">*223 sufficient information regarding several other disallowed items. Consequently, she is not entitled to deduct them, although they may appear to be, at least, potentially deductible (e.g., $ 41.09 paid to the Winter Haven Hospital). In accordance with our above findings, holdings, and discussion, the following chart reflects the amounts petitioner expended, the payees, and each alleged medical purpose claimed, and the amounts we find to be allowable and deductible (to the extent they cumulatively exceed 7.5 percent of petitioner's adjusted gross income in any of the 3 taxable years): AmountAmountPayee Medical Purpose Claimed Claimed Allowed 1989Susan MorganKathleen CookPam BrownMassages$ 540.00-0- Maharishi Ayur-VedaMedical Center Massages, oil baths1,413.84-0- Maharishi Ayur-VedaMedical Center Meditation tape44.75-0- Dr. RothenbergOffice physical165.00$ 165.00Prestige Spas/TubsHot tub forstress relief 3,157.74-0- Regency WellnessFitness evaluation127.50-0- Jackson NutritionalVitamins39.53-0- Maharishi Ayur-VedaMedical Center No purpose stated20.00-0- Bunnie BeattyYoga lessons30.00-0- Winter Haven Hosp.No purpose stated41.09-0- MetpathChlamydia-rapidscreen (Sherry) 43.00-0- Smith's PharmacyDrugs (Sherry)249.07-0- Ridge PathologyPap smear (Sherry)8.00-0- Drs. Baker/PuckettOffice visit (Sherry)60.00-0- Drs. Baker/PuckettOffice visit110.00110.00Fillastre, DentistDental work188.00188.00Bausch & LombInterplak29.00-0- Gessler ClinicFAA phy45.00-0- McLean ChiropracticNUC (energenics)36.00-0- Ridge PathologyPap smear8.008.00Heart of AmericaHealth insurance1,736.051,736.05Tom WallerVitamins77.25-0- Edward SearsStress management9,300.00-0- Total 1989 2,207.051990Fillastre, DentistDental work$ 639.80$ 639.80Drs. Baker/PuckettOffice physical(Sherry) 55.0055.00Drs. Baker/PuckettOffice physical55.0055.00Ridge PathologyPap smears18.0018.00Donald MayfieldAcupuncture2,489.652,489.65Doctor HighsmithColon Hydro-therapy2,983.002,983.00Susan MorganMassages285.00-0- Doctor WoodNo purpose stated45.00-0- Drs. Fisher/SchemmerEye exam32.5032.50Health Food CenterVitamins89.73-0- Maharishi Ayur-Vedaproducts No purpose stated15.00-0- Jackson NutritionalVitamins42.68-0- Dental InstituteDental work800.00800.00Smiths PharmacyMedicine499.05499.05Dr. HellerChiropractic30.0030.00Total 1990 7,602.001991Fillastre, DentistDental work$ 548.00$ 548.00Donald MayfieldAcupuncture1,759.001,759.00Dr. HighsmithColon hydro-therapy1,975.001,975.00John Shen Inst.Acupuncture200.00200.00Dr. LucidoNo purpose stated30.00-0- MBCANo purpose stated30.00-0- Susan MorganMassage400.00-0- Frank BrownTina KalbileischBecky JohnsonMassage240.00-0- Mr. McCloudChiropractic204.95204.95Nat'l. Health Fed.No medical purposestated 625.00-0- Health Food CenterFruit juicer andfood supplements 270.94-0- Payee unclearSinus medicine20.9320.93Dr. SolomonOffice visit, x-rays270.00270.00Matol BotanicalNo purpose stated1,142.40-0- Smiths PharmacyMedicine50.8450.84Highland HealthWater treatmentCtr. and purification system for home 3,986.00-0- Total 1991 5,028.721995 Tax Ct. Memo LEXIS 200">*224 Section 6662 -- Negligence or intentional disregard of the rules and regulations -- Finally, we consider the accuracy-related penalties under section 6662. Respondent determined that petitioner was negligent or that she intentionally disregarded rules or regulations, and that the section 6662(a) 20-percent addition should apply with respect to the entire underpayment, or with respect to all adjustments determined in the notice of deficiency. Negligence has been defined as the failure to exercise the due care that a reasonable and ordinarily prudent person would exercise under the circumstances. Neely v. Commissioner, 85 T.C. 934">85 T.C. 934, 85 T.C. 934">947 (1985). Petitioner bears the burden of showing that she was not negligent. Rule 142(a); Bixby v. Commissioner, 58 T.C. 757">58 T.C. 757, 58 T.C. 757">791-792 (1972). Petitioner stated her reasons for not reporting the Gandolfo settlement. She noted that the release indicated that it was for personal injuries and, based on her background and knowledge, we find that belief to be reasonable. Furthermore, we have found many of petitioner's disallowed medical expenditures to be allowable and a similar amount1995 Tax Ct. Memo LEXIS 200">*225 not to be allowable. Petitioner generally provided fairly complete documentation, substantiating the expenditures. Some larger disallowed items involved technical distinctions. With respect to the medical expenses presented at trial, many larger items were items that petitioner had not claimed on her return, but were being claimed, perhaps in an attempt to offset any potential deficiency. We cannot say here that petitioner's claims were without any potential merit. This is especially true here because petitioner represented herself and is not an attorney, accountant, or one versed in tax law. Accordingly, we find reasonable cause and hold that petitioner is not liable under section 6662(a) with respect to her 1989, 1990, or 1991 tax years. To reflect the foregoing, Decision will be entered under Rule 155.Footnotes1. All section references are to the Internal Revenue Code in effect for the years at issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.↩2. The parties' stipulation of facts and exhibits are incorporated by this reference. The fact findings regarding the medical deduction issues for 1989, 1990, and 1991 are combined with the legal discussion in the opinion portion of this report.↩3. For convenience, factual findings concerning the medical deduction issues are incorporated in that portion of this opinion.↩4. Sec. 111 is entitled "Recovery Of Tax Benefit Items", and subsec. (a) provides: "Gross income does not include income attributable to the recovery during the taxable year of any amount deducted in any prior taxable year to the extent such amount did not reduce the amount of tax imposed by this chapter."↩5. With respect to the release, respondent suggests that it was contrived for tax purposes. The facts of this case show that petitioner's financial losses for ITBA caused her substantial emotional stress and physical side effects. The record reflects that petitioner expended relatively large sums of money for medical solutions to address her emotional and physical problems. Additionally, Gandolfo settled for an amount in excess of that sought in the complaint, and respondent has not offered any plausible theory for the difference. Hence, we believe that the release was bona fide in all respects.↩6. Petitioner may deduct 51.7333 percent of the fees and costs ($ 97,000 divided by $ 187,500 times $ 75,000 and $ 97,000 divided by $ 187,500 times $ 903.25).↩7. Although there are exceptions to this requirement for full-time students, those students must be less than 24 years of age at the end of the year in question. See sec. 151(c)(1)(B).↩8. Lymphatic likely describes an improper functioning of the lymph glands. It has also been defined as a sluggish condition, which was formerly thought to be the result of too much lymph in the body. Webster's New World Dictionary of the American Language (1962).↩9. Colitis is an inflammation of the mucous membrane of the large intestine. Webster's New World Dictionary of the American Language (1962).↩10. Homeopathy is a system of medical treatment based on the theory that certain diseases can be cured by giving very small doses of drugs which in a healthy person and in large doses would produce symptoms like those of the disease. Webster's New World Dictionary of the American Language (1962).↩ |
Citation Nr: 1035944
Decision Date: 09/23/10 Archive Date: 09/30/10
DOCKET NO. 08-15 468 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Waco, Texas
THE ISSUE
Entitlement to service connection for posttraumatic stress
disorder (PTSD).
REPRESENTATION
Appellant represented by: Texas Veterans Commission
WITNESS AT HEARING ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
B. R. Mullins, Associate Counsel
INTRODUCTION
The Veteran had active service from January 1968 to August 1969,
and he was the recipient of the Vietnam Service Medal.
This matter comes before the Board of Veterans' Appeals (Board)
on appeal from a January 2008 rating decision of the Department
of Veterans Affairs Regional Office (RO) in Waco, Texas, denying
the Veteran's claim of entitlement to service connection for
PTSD.
The Veteran was afforded a hearing before the undersigned Acting
Veterans Law Judge at the RO in Waco, Texas in July 2010. A
written transcript of this hearing has been prepared and
incorporated into the evidence of record.
Following his Travel Board hearing, the Veteran submitted
additional VA treatment records in support of his claim and
specifically waived Agency of Original Jurisdiction
consideration. See 38 C.F.R. § 20.1304 (2009).
FINDINGS OF FACT
1. The Veteran has been diagnosed with PTSD during the pendency
of this claim.
2. The Veteran's PTSD manifested as a result of his experiences
while serving in the Republic of Vietnam.
CONCLUSION OF LAW
The criteria for establishing entitlement to service connection
for PTSD have been met. 38 U.S.C.A. §§ 1110, 5103, 5103A, 5107
(West 2002 & Supp. 2009); 38 C.F.R. §§ 3.102, 3.303, 3.304(f)(3),
4.125(a) (2009).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Duty to Notify and Assist
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). In this case, the Board is
granting in full the benefit sought on appeal. Accordingly,
assuming, without deciding, that any error was committed with
respect to either the duty to notify or the duty to assist, such
error was harmless and will not be further discussed.
Relevant Laws and Regulations
Service connection will be granted if it is shown that the
Veteran suffers from a disability resulting from personal injury
suffered or disease contracted in the line of duty, or for
aggravation of a preexisting injury suffered or disease
contracted in the line of duty, during active military service.
38 U.S.C.A. §§ 1110, 1131; 38 C.F.R. § 3.303. Disorders
diagnosed after discharge will still be service connected if all
the evidence, including that pertinent to service, establishes
that the disease was incurred in service. 38 C.F.R. § 3.303(d);
see also Combee v. Brown, 34 F.3d 1039, 1043 (Fed. Cir. 1994).
In the absence of proof of a present disability there can be no
valid claim. Brammer v. Derwinski, 3 Vet. App. 223, 225 (1992).
Service connection requires a finding of the existence of a
current disability and a determination of a relationship between
that disability and an injury or disease incurred in service.
Watson v. Brown, 4 Vet. App. 309, 314 (1993); see also Boyer v.
West, 210 F.3d 1351, 1353 (Fed. Cir. 2000).
To establish service connection, there must be: (1) a medical
diagnosis of a current disability; (2) medical or, in certain
cases, lay evidence of in-service occurrence or aggravation of a
disease or injury; and (3) medical evidence of a nexus between an
in-service injury or disease and the current disability. Hickson
v. West, 12 Vet. App. 247, 252 (1999) (citing Caluza v. Brown,
7 Vet. App. 498, 506 (1995), aff'd, 78 F.3d 604 (Fed. Cir.
1996)).
Establishment of service connection for PTSD 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). See
also Cohen v. Brown, 10 Vet. App. 128 (1997).
A diagnosis of PTSD must be established in accordance with 38
C.F.R. § 4.125(a), which simply 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). See 38 C.F.R.
§ 3.304(f). The United States Court of Appeals for Veterans
Claims (Court) 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. The
Court acknowledged the change 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). Thus, as noted
by the Court, 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. at 140-41.
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. 38 C.F.R. §
3.304(f)(1). See also 38 U.S.C.A. § 1154(b).
The ordinary meaning of the phrase "engaged in combat with the
enemy," as used in 38 U.S.C.A § 1154(b), requires that a veteran
have participated in events constituting an actual fight or
encounter with a military foe or hostile unit or instrumentality.
The issue of whether any particular set of circumstances
constitutes engagement in combat with the enemy for purposes of
section 1154(b) must be resolved on a case-by-case basis. See
VAOPGCPREC 12-99 (October 18, 1999).
If there is no combat experience, or if there is a determination
that the Veteran engaged in combat but the claimed stressor is
not related to such combat, there must be independent evidence to
corroborate the Veteran's statement as to the occurrence of the
claimed stressor. Doran v. Brown, 9 Vet. App. 163, 166 (1996).
Moreover, a medical opinion diagnosing PTSD does not suffice to
verify the occurrence of the claimed in-service stressors. Cohen
v. Brown, 10 Vet. App. 128, 142 (1997); Moreau v. Brown, 9 Vet.
App. 389, 395-96 (1996).
The fact that a veteran, who had a noncombatant military
occupational specialty, was stationed with a unit that was
present while enemy attacks occurred would strongly suggest that
he was, in fact, exposed to such attacks. Pentecost v. Principi,
16 Vet. App. 124 (2002). In other words, a veteran's presence
with the unit at the time such attacks occurred corroborates his
statement that he experienced such attacks personally. A
stressor need not be corroborated in every detail. Suozzi v.
Brown, 10 Vet. App. 307, 311 (1997).
The regulations pertaining to PTSD were recently amended, and 38
C.F.R. §3.304(f)(3) no longer requires the verification of an in-
service stressor if the Veteran was in a location involving
"fear of hostile military or terrorist activity." Such a
location can be evidenced by awards such as the Iraq Campaign
Medal or the Vietnam Service Medal. Lay testimony alone can be
used to establish the occurrence of an in-service stressor in
these situations. The new regulatory provision requires that:
(1) A VA psychiatrist or psychologist, or contract equivalent,
must confirm that the claimed stressor is adequate to support a
diagnosis of PTSD; (2) the claimed stressor is consistent with
the places, types, and circumstances of the Veteran's service;
and (3) the Veteran's symptoms are related to the claimed
stressor. Id. The liberalizing criteria contained in the new
§ 3.304(f)(3) will be applied to PTSD service connection claims
that are pending as of the effective date of the regulation (July
13, 2010) and to claims filed on or after this effective date.
Facts and Analysis
The Veteran contends that he is entitled to service connection
for PTSD. Specifically, the Veteran contends that he suffers
from PTSD as a result of his service during the Tet Offensive
while in Vietnam, where he witnessed weapons fire and dead or
injured soldiers. Upon review of the evidence of record, the
Board finds that the evidence is at least in equipoise regarding
this matter. As such, affording the Veteran the full benefit of
the doubt, the Board finds that service connection is warranted
for PTSD. When a Veteran seeks benefits and the evidence is in
relative equipoise, the Veteran prevails. See Gilbert v.
Derwinski, 1 Vet. App. 49 (1990).
The Veteran's personnel records demonstrate that he served in
Vietnam from May 1968 until August 1969, and that he was the
recipient of the Vietnam Service Medal (VSM). In a March 2007
statement, the Veteran reported hearing mortar rounds outside of
his base while in Vietnam and that there were many airstrikes.
The Veteran also indicated that he had several friends who were
wounded or killed during his active duty. A note in the
Veteran's claims file from October 2007 indicates that the
Veteran's claimed in-service stressors were to be conceded since
the Veteran was in Vietnam during the Tet Offensive.
The record confirms that the Veteran has been diagnosed with PTSD
during the pendency of his claim. According to a June 2007 VA
outpatient treatment record, the Veteran suffered from mild PTSD.
The VA physician related the Veteran's symptoms to his
experiences in Vietnam. The record also contains a private
psychiatric evaluation from March 2007. The psychiatrist
concluded that the Veteran met all of the DSM-IV criteria for an
Axis I diagnosis of PTSD. The examiner based this opinion in
part on the Veteran's reports that he was exposed to weapons fire
in Vietnam and that he feared for his life.
The Veteran was subsequently afforded a VA psychiatric evaluation
in December 2007. The examiner noted that the Veteran underwent
a private psychiatric evaluation in March 2007, but that there
were several inaccuracies in that report. The Veteran reported
using a lot of marijuana while in Vietnam and that he continued
to use this substance to the present. The Veteran also described
a history of excessive alcohol intake. The examiner concluded
that the Veteran suffered from alcohol dependence, cannabis
dependence and depression not otherwise specified. The examiner
felt that while the Veteran met a number of symptoms of PTSD,
this diagnosis could not be established due to possible
exaggeration of symptomatology by the Veteran and due to a lack
of full confirmation of actual stressors.
As noted above, during his July 2010 hearing, the Veteran
submitted VA outpatient treatment records from May 2010. These
records demonstrate that the Veteran currently has Axis I
diagnoses of PTSD and major depressive disorder.
Having considered the evidence for and against the Veteran's
claim, the Board finds that the evidence is at least in
equipoise. The record confirms that the Veteran has been
diagnosed with PTSD on multiple occasions during the pendency of
his claim, and this diagnosis was confirmed as recently as May
2010. In addition, the Veteran's claimed stressors were conceded
by VA in October 2007. The March 2007 private psychiatrist
related the Veteran's PTSD to his experiences in Vietnam, as did
the June 2007 VA physician. As such, the evidence demonstrates
that the Veteran is entitled to service connection for PTSD.
The Board recognizes that the December 2007 VA examiner concluded
that the Veteran did not suffer from PTSD. However, the Board
does not find this opinion to be dispositive in this case. The
examiner relied in part on the fact that the Veteran's in-service
stressors had not been confirmed. However, under the recent
amendments to the regulations involving PTSD, 38 C.F.R.
§3.304(f)(3) no longer requires the verification of an in-service
stressor if the Veteran was in a location involving "fear of
hostile military or terrorist activity." The evidence of record
demonstrates that the Veteran served in Vietnam during the Tet
Offensive, and he has indicated that he feared for his life.
Furthermore, VA has conceded that the Veteran's in-service
stressors occurred, so to deny his claim as a result of an
unverified stressor would be unjust.
The Board further recognizes that the December 2007 VA examiner
concluded that there were some inaccuracies involving the
Veteran's March 2007 private psychiatric evaluation.
Specifically, the VA examiner noted that the private examination
indicated that the Veteran served two tours of duty in Vietnam
rather than one, and, that the Veteran was a photographer rather
than an assistant to a photographer. While the Board has
considered this evidence, it does not find it sufficient to
undermine the findings of the March 2007 psychiatrist. The
psychiatrist relied on the Veteran's testimony regarding weapons
fire, and this experience has been conceded. There is nothing in
the record to suggest that these discrepancies were of sufficient
degree to impact the psychiatrist's overall assessment.
Having afforded the Veteran the full benefit of the doubt, the
Board finds that the Veteran is entitled to service connection
for PTSD. See 38 U.S.C. § 5107(b). The claim is granted.
ORDER
Entitlement to service connection for PTSD is granted.
____________________________________________
K. A. KENNERLY
Acting Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
Appellant was convicted of driving cattle across the quarantine line established by the Live Stock Sanitary Commission.
The Assistant Attorney-General moves to dismiss this appeal, because the recognizance recites no offense against the laws of the State, and does not recite the offense charged in the information. The recognizance recites that the appellants "stands charged in this court with the offense of unlawfully violating, disregarding, and evading the rules, regulations, *Page 43
orders, and directions of the Live Stock Sanitary Commission of Texas, establishing and governing the live stock quarantine in Texas," etc. It seems, under the provisions of the law, that, in order to constitute this offense, said sanitary commission must make its rules, orders, regulations, and directions, and, before they can be operative, the governor must be notified of such rules, regulations, orders, and directions, and must issue his proclamation, putting them into operation, or giving notice of the same. It will then be observed that, before there can be a violation of these enactments of the Legislature, the Live Stock Sanitary Commission must make its rules, regulations, orders, and directions, and the Governor must issue his proclamation, after being notified by said commission of the creation of these rules, regulations, orders, and directions; otherwise, there can be no offense, because there are no inhibitions. In order to charge this offense, the indictment or information must show and allege that these matters have occurred. This offense not being one eo nomine, the constituent elements of the offense must be set out in the recognizance in order to make that a valid instrument. The statute requires that the recognizance must describe some offense against the law, and it must be the offense of which the accused is convicted. The recognizance in this case does not undertake to set out two essential elements of this offense, to wit, the fact that the sanitary commission had made its orders, rules, regulations, and directions, and that the Governor has issued his proclamation thereupon; and, because the recognizance is fatally defective in the matter pointed out, the appeal herein is dismissed. See Acts 1893, pp. 70, 73, secs. 3, 13, 15.
Dismissed.
[NOTE. — Appellant's motion for rehearing filed June 23, 1897, was overruled without a written opinion. — Reporter.] |
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 30, 2011
No. 10-10037
Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA
Plaintiff - Appellee
v.
CURTIS ONEAL RHINE
Defendant - Appellant
Appeal from the United States District Court
for the Northern District of Texas
Before JONES, Chief Judge, and DENNIS and CLEMENT, Circuit Judges.
EDITH H. JONES, Chief Judge:
Curtis Oneal Rhine pled guilty to one count of possession with intent to
distribute cocaine base and one count of being a felon in possession of a firearm.
After calculating a sentencing range of 30 to 37 months under the United States
Sentencing Guidelines (“Guidelines”), the district court sentenced Rhine to 180
months in prison, reasoning that the higher sentence was appropriate in light
of Rhine’s past involvement with a drug-trafficking organization. Because the
district court adhered to correct sentencing procedure and imposed a sentence
that is substantively reasonable, we affirm its non-Guidelines sentence.
A police officer stopped Curtis Oneal Rhine for a traffic violation on
October 24, 2007. After Rhine admitted to smoking marijuana, the officer took
No. 10-10037
him into custody. A search of Rhine’s vehicle uncovered two firearms under the
driver’s seat, and a search of Rhine’s person revealed a bag containing 1.89
grams of crack cocaine.
Seventeen months earlier, in an investigation focused on Crips gang
members, the FBI had indicted more than 30 people involved in a drug-
trafficking ring dubbed the “Fish Bowl.” Reports from the FBI and the Fort
Worth Police Department indicated that Rhine was connected with the Fish
Bowl, though he escaped prosecution because the FBI never caught him in the
act of selling drugs. Mindful of these reports, the probation officer concluded
that Rhine’s current possession was part of the same course of conduct as the
Fish Bowl activities. She therefore concluded that Rhine was responsible for
distributing at least 4.5 kilograms of crack cocaine. This conclusion resulted in
an increased offense level under the Guidelines and, in light of Rhine’s criminal
history, a sentencing range of 292-365 months. The district court imposed a
sentence of 360 months, and Rhine appealed to this court, arguing that the
offenses to which he pled guilty were not part of a “common scheme” or “course
of conduct” encompassing the Fish Bowl activities. This court agreed and
remanded the case for re-sentencing. United States v. Rhine (“Rhine I”), 583
F.3d 878, 891 (5th Cir. 2009).
On remand, the probation officer computed a new Guidelines range of 30-
37 months, reflecting a lower offense level. The district court, however, imposed
consecutive terms of 120 months for the drug offense and 60 months for Rhine’s
firearm offense. In explaining the 180-month sentence, the court stated the
following:
Well, I’m convinced that a reasonable sentence in this case is
one that would take into account his prior similar drug conduct, the
drug activities that he engaged in that “Fish Bowl” area that was
mentioned in the presentence report. And for that activity to be
2
No. 10-10037
taken into account, the sentence would have to be somewhat above
the top of the advisory guideline range.
Considering all of the factors the Court is to consider under
[18 U.S.C. § 3553(a)], I’ve concluded that a sentence that would
aggregate a total of 180 months would be a sentence that would be
required to address the defendant’s history and criminal conduct.
. . . . [A] sentence of at least that much would be required[] to
adequately reflect the seriousness of the offense conduct, to promote
respect for the law, provide just punishment for the offense, to
afford adequate deterrence for future criminal conduct, and to
protect the public from further crimes of the defendant.
...
And if you viewed it from the standpoint of a guidelines
sentence, and I don’t think you need to, the sentence I’ve imposed
should appropriately be viewed as a variance and would be a
reasonable sentence if viewed that way.
If viewed from the standpoint of the sentencing guidelines,
departure under the guidelines, the reasons given by the probation
officer . . . in my view are appropriate to justify the sentence I’ve
imposed as a guideline requirement.
In the Statement of Reasons (SOR), the district court again treated the sentence
as both a non-Guidelines sentence and as a departure under the Guidelines. The
court checked a box on the SOR form indicating that “[t]he court imposes a
sentence outside the advisory sentencing guidelines system,” but it proceeded to
complete a section of the SOR, Section V, relating to Guidelines-authorized
departures.
Rhine appeals his sentence.
Following United States v. Booker, 543 U.S. 220, 125 S. Ct. 738 (2005),
“appellate review of sentencing decisions is limited to determining whether they
are ‘reasonable’” under the “familiar abuse-of-discretion standard of review.”
Gall v. United States, 552 U.S. 38, 46, 128 S. Ct. 586, 594 (2007).
Reasonableness has two parts: procedural and substantive reasonableness.
The former requires that the district court calculate the Guidelines range,
3
No. 10-10037
consider the § 3553(a) factors, and explain the sentencing decision; the latter
depends on “the totality of the circumstances, including the extent of any
variance from the Guidelines range.” Id. at 51.
As a preliminary matter, we hold that the district court imposed a non-
Guidelines sentence. Appellant would create confusion on this point by focusing
on the court’s suggestion that the sentence is also defensible as a variance or
departure under the Guidelines. Even those comments, however, reveal the
court’s principal intention to impose a non-Guidelines sentence. In stating that
“if you viewed it from the standpoint of a guidelines sentence, and I don’t think
you need to . . .”, the district court showed that its purpose was to sentence
outside the Guidelines while offering the backup justification that the sentence
passes muster even if the Guidelines apply. Likewise, the district court’s
decision to complete Section V of the SOR presents an alternative justification
for the sentence as well as the district court’s desire to indicate which factors in
§ 3553(a) influenced its decision, an option available only in Section V. The court
also checked option D under Section IV, indicating “a sentence outside the
advisory sentencing guideline.” We are persuaded here that the district court
clearly intended primarily to sentence Rhine outside the Guidelines framework.
A. Procedural Reasonableness
Gall requires the sentencing court to begin its work by calculating the
applicable Guidelines range. 552 U.S. at 49. Failure to do so eliminates “a
necessary factor in determining reasonableness.” United States v. Gutierrez-
Hernandez, 581 F.3d 251, 256 (5th Cir. 2009). Other procedural errors include
“treating the Guidelines as mandatory, failing to consider the § 3553(a) factors,
selecting a sentence based on clearly erroneous facts, or failing to adequately
explain the chosen sentence—including an explanation for any deviation from
the Guidelines range.” Gall, 552 U.S. at 51.
4
No. 10-10037
In the present case, the district court computed the correct Guidelines
range of 30-37 months for a category IV criminal history and a total offense level
of 15. The court also considered the § 3553(a) factors, stating that a sentence of
at least 180 months was necessary to “adequately reflect the seriousness of the
offense conduct, to promote respect for the law, provide just punishment for the
offense, to afford adequate deterrence for future criminal conduct, and to protect
the public from further crimes of the defendant.” See 18 U.S.C. § 3553(a)(2)(A)-
(C). The court also noted that Rhine had benefitted from his imprisonment and
would “continue to benefit from the kind of activities and programs that are
available in the prison.” See 18 U.S.C. § 3553(a)(2)(D). The court’s explanation
of the § 3553(a) factors was sufficient to communicate the court’s reasons for
imposing a non-Guidelines sentence. Rita v. United States, 551 U.S. 338, 357-58,
127 S. Ct. 2456, 2469 (2007) (stating that the purpose of a district court’s
explanation in a non-Guidelines case is to “provide relevant information to both
the court of appeals and ultimately the Sentencing Commission.”).
To the extent it is relevant, we also address the court’s inclusion of Rhine’s
Fish Bowl activities as part of “the history and characteristics of the defendant.”
18 U.S.C. § 3553(a)(1). Appellant argues that Rhine I foreclosed consideration
of his involvement with the Fish Bowl drug ring. He is mistaken. This court’s
ruling in Rhine I addressed the particular question whether Rhine’s offense
(possession with intent to distribute) included only the 1.89 grams of crack
cocaine in his possession on October 24, 2007 or all of the drugs he helped
distribute through the Fish Bowl. In drug cases, the probation officer may
calculate an offense level based on the defendant’s immediate conduct plus any
“relevant conduct,” as defined under the Guidelines. Rhine I held that the Fish
Bowl drug trafficking was not relevant conduct to the offense of conviction. Our
decision did not, however, make the Fish Bowl chapters of Rhine’s past
5
No. 10-10037
disappear. On resentencing, the district court considered Rhine’s involvement
with the Fish Bowl organization for a different purpose—not as part of his
current offense, but as part of his “history” under § 3553(a)(1). The Supreme
Court has described § 3553(a)(1) as “a broad command.” Gall, 552 U.S. at 50 n.6.
Rhine I did not narrow the field of relevant history, and we decline to do so now.
Addressing the sentence as a variance, or non-Guidelines sentence, the
dissent criticizes both the procedural and substantive adequacy of the trial
court’s sentence.1 We are unpersuaded. Procedural reasonableness is governed
in this circuit by United States v. Mares, 402 F.3d 511, 519 (5th Cir. 2005) and
more recently by United States v. Bonilla, 524 F.3d 647 (5th Cir. 2008).
Bonilla, written in the light of Gall and Rita, explained that the adequacy of a
district court’s articulation of its reasons for imposing a sentence must be judged
in light of the proceeding as a whole, including the facts revealed in the PSR. Id.
at 657. The fact that leapt out in that case (unmentioned by our dissenting
brother) was that Bonilla had bludgeoned a man to death in a crime that did not
count for purposes of his Guidelines criminal history. Id. at 650, 652-53. This
“aggravating factor” inspired the district court’s obvious, albeit “minimally”
articulated, choice of a higher sentence. Id. at 657. So here, the PSR contained
statements from numerous defendants who pled guilty to involvement in the
Fish Bowl drug trafficking ring that Rhine was a major supplier of crack cocaine,
accounting conservatively for at least 4.5 kilograms. Like the bludgeoning in
Bonilla, Rhine’s role in the Fish Bowl is excluded from Rhine’s criminal history
under the Guidelines. The district court should not have to guess, when
1
The dissent also disagrees with the district court’s sentence if it is viewed as a
departure within the Guidelines framework. Because we reject that characterization, we need
not respond to that analysis.
6
No. 10-10037
expressing its reasons for issuing a sentence, that this court will close our eyes
to the obvious implications of such deep involvement in the drug trade.
From any standpoint, the district court followed the Guidelines
procedurally.
B. Substantive Reasonableness
In reviewing a sentence for substantive unreasonableness, “the court
should consider the totality of the circumstances, including the extent of any
variance from the guidelines range.” United States v. Brantley, 537 F.3d 347,
349 (5th Cir.2008) (internal quotation omitted). A deviation from the Guidelines
range will not alone make a sentence substantively unreasonable. Gall, 552 U.S.
at 47 (“We also reject the use of a rigid mathematical formula that uses the
percentage of a departure as the standard for determining the strength of the
justifications required for a specific sentence.”).
The substance of Rhine’s sentence—180 months incarceration—does not
represent an abuse of the district court’s discretion. The court explained that a
sentence of 180 months was necessary because of Rhine’s “prior similar drug
conduct . . . in that ‘Fish Bowl’ area that was mentioned in the presentence
report.” The court then proceeded to discuss each of the statutory purposes in
§ 3553(a)(2). From a substantive standpoint, the district court’s choice to impose
an upward variance expressly based on the § 3553(a) factors and Rhine's
unchallenged drug trafficking was hardly arbitrary. See United States v. Valdez,
453 F.3d 252, 262 (5th Cir. 2006) (“A district court may adopt the facts contained
in a presentence report (‘PSR’) without further inquiry if those facts have an
adequate evidentiary basis with sufficient indicia of reliability and the defendant
does not present rebuttal evidence or otherwise demonstrate that the
information in the PSR is unreliable.”) (internal quotations and modifications
7
No. 10-10037
omitted). The sentence is half the statutory maximum for the offenses to which
Rhine pled guilty.
Rhine’s challenge to the substance of his sentence is little more than a
corollary to his procedural argument: if the district court could not take
cognizance of his Fish Bowl involvement, then the 180-month sentence would be
substantively unreasonable under the remaining relevant circumstances.
Because the procedural argument fails, its corollary is moot.
Under the circumstances, we see no abuse of discretion in sentencing
Rhine to a combined 180 months for his drug and firearm crimes.
Because the court’s procedures were reasonable and yielded a substan-
tively reasonable non-Guidelines outcome, we AFFIRM.
AFFIRMED.
8
DENNIS, Circuit Judge, dissenting:
This court previously vacated the sentence of Curtis Oneal Rhine, the
defendant, and remanded his case for re-sentencing because the district court
committed procedural error by enhancing Rhine’s offense level for conduct
entirely unrelated to his counts of conviction, namely Rhine’s alleged
involvement in the “Fish Bowl” drug trafficking scheme. United States v. Rhine
(Rhine I), 583 F.3d 878, 881 (5th Cir. 2009). On remand, the district court
correctly calculated that the proper Sentencing Guidelines sentencing range for
the counts of conviction was 30 to 37 months of imprisonment. Nonetheless,
relying upon the same extraneous conduct that motivated its earlier sentence,
the district court imposed a sentence of 180 months of imprisonment, a 386.5%
increase over the top of the correctly calculated Guidelines range. It claimed that
such a sentence could be justified alternatively as a variance or a departure. See
United States v. Lopez-Velasquez, 526 F.3d 804, 807 (5th Cir. 2008) (indicating
that “variances” are an expression of the district court’s discretion at sentencing
and that “departures” are the result of the application of Guidelines provisions).
Regardless of how one characterizes the sentence, the district court again
reversibly erred. If one views the sentence as a variance: (1) the district court
committed procedural error by failing to “adequately explain the chosen
sentence,” particularly its “deviation from the Guidelines range.” See Gall v.
United States, 552 U.S. 38, 51 (2007) (stating that in reviewing sentences,
appellate courts “must first ensure that the district court committed no
significant procedural error, such as . . . failing to adequately explain the chosen
sentence—including an explanation for any deviation from the Guidelines
range”); see also Rita v. United States, 551 U.S. 338, 356-57 (2007) (stating
9
substantially the same). “[W]hen the judge elects to [vary] a . . . sentence, [he]
should carefully articulate the reasons [he] concludes that the sentence [he] has
selected is appropriate for that defendant. These reasons should be fact
specific . . . .” United States v. Mares, 402 F.3d 511, 519 (5th Cir. 2005) (footnote
omitted). Here, the district court did nothing more than assert that it intended
to punish Rhine for his alleged involvement in the Fish Bowl drug trafficking
scheme, that it had considered the statutorily required factors, and that it
believed a 180 months sentence was appropriate. It provided no fact-specific
reasons to explain why it concluded the sentence imposed was appropriate. (2)
Accordingly, the record also indicates that the sentence was arbitrarily selected.
Therefore, assuming arguendo that the sentencing was procedurally sound, the
sentence imposed was substantively unreasonable as the district court presented
no justification explaining or supporting its degree of variance. See Gall, 552
U.S. at 50, 51 (“Assuming that the district court’s sentencing decision is
procedurally sound, the appellate court should then consider the substantive
reasonableness of the sentence imposed under an abuse-of-discretion
standard. . . . We find it uncontroversial that a major departure should be
supported by a more significant justification than a minor one.”).
Viewing the sentence as a departure, I conclude that each of the
Guidelines provisions that the district court claimed applied are inapplicable
under circuit law and the law of this case. The district court justified each
departure based upon Rhine’s alleged involvement in the Fish Bowl drug
trafficking scheme. However, the provisions the court invoked require that the
conduct justifying their imposition be part of or similar to the offense of
conviction. In Rhine I, we held that the Fish Bowl conduct was not part of or
similar to the offenses of conviction. 583 F.3d 878.
Therefore, I would vacate the defendant’s sentence and remand this case,
yet again, for re-sentencing. Accordingly, I respectfully dissent.
10
I.
Many of the relevant facts are detailed in this court’s previous review and
vacatur of Rhine’s sentence. “Late in October 2007, a Fort Worth police officer
conducted a routine traffic stop of a vehicle in which Rhine was occupying the
front passenger seat. . . . When the officer smelled marijuana in the vehicle, he
asked Rhine whether he had been smoking. When Rhine replied that he had
smoked marijuana earlier that evening, the officer asked him to step out of the
vehicle.” Rhine I, 583 dbowen@example.com. “After a background check revealed that
Rhine had several outstanding warrants for his arrest, the officer took him into
custody and conducted a search of the vehicle, discovering two firearms under
the passenger seat where Rhine, a convicted felon, had been seated. The officer
then took [Rhine] to the Fort Worth city jail, where an intake search revealed a
small plastic bag containing 1.89 grams of cocaine base (crack cocaine) concealed
in Rhine’s anal cavity,” a portion of which, it was later revealed, was to be sold.
Id. “The grand jury returned a two-count indictment charging Rhine with (1)
possession with intent to distribute 1.89 grams of cocaine base . . . and (2)
possession of a firearm by a felon . . . .” Id. “Rhine pleaded guilty to both counts
without a plea agreement.” Id.
A probation officer prepared a pre-sentence report. Of particular relevance
to this case and appeal, that report detailed Rhine’s alleged involvement in a
drug trafficking ring operating in an area known as the “Fish Bowl.” The report
explained that, “[i]n May 2006—approximately 17 months before Rhine’s arrest
for the instant drug offense—an ongoing FBI investigation known as the ‘Fish
Bowl’ investigation culminated in a large-scale drug raid in Fort Worth, Texas.
The raid resulted in the indictments of more than 30 individuals for a variety of
criminal offenses, most of which involved drug trafficking.” Id. “After conducting
post-arrest interviews with many of the individuals apprehended during the
11
raid, FBI Special Agent J. Coffindaffer . . . reported that several individuals had
implicated Rhine in the criminal drug activity.” Id. at 881-82. “As agents were
unsuccessful in completing a controlled drug buy from Rhine, he was not charged
along with the other Fish Bowl participants.” Id. at 882. Nonetheless, based
upon the evidence produced by the FBI investigation, “the probation officer
deduced that . . . Rhine had possessed at least 4.5 kilograms of crack cocaine
during the course of his alleged participation in the Fish Bowl drug-trafficking
operations . . . .” Id. at 883.
The pre-sentence report recommended that pursuant to Guidelines
§ 1B1.3, Rhine’s alleged involvement in the Fish Bowl drug trafficking scheme
be taken into account in calculating Rhine’s recommended Guidelines sentencing
range. Section 1B1.3 provides that when the offense level is determined by the
“quantity of [the] substance involved” in the offense, such as by the amount of
drugs one is accused of trafficking, the probation officer and court may use
uncharged conduct that is “part of the same course of conduct or common scheme
or plan as the offense of conviction” to calculate the appropriate offense level.
U.S.S.G. §§ 1B1.3(a), 3D1.2(d) (cross-referenced in § 1B1.3); see also U.S.S.G.
§ 2D1.1 (providing the offense levels for the relevant drug offenses). Applying
§ 1B1.3, “[t]he probation officer determined that Rhine’s Total Offense Level was
37 with a Criminal History Category of IV, producing a Guidelines range of 292
to 365 months imprisonment.” Rhine I, 583 dbowen@example.com.
At the first sentencing, “[t]he district court adopted the findings of the
[pre-sentence report] . . . overruling Rhine’s objections . . . . The court said that
‘all of the transactions that were taken into account by the probation officer were
sufficiently connected or related to each other to warrant the conclusion that
they were a part of a single episode or spree or ongoing series of offenses.’” Id.
at 884. “Adopting the Guidelines calculations set forth in the [pre-sentence
report], the district court sentenced Rhine to the statutory maximum period of
12
imprisonment—240 months as to Count 1 and 120 months as to Count 2, to run
consecutively.” Id.
This court vacated that sentence and remanded for re-sentencing. Id. at
891. We explained that pursuant to Guidelines § 1B1.3, “[i]n calculating a
defendant’s base offense level, the district court may consider other offenses in
addition to the acts underlying the offense of conviction,” but those other
offenses must be part of a common scheme or plan or the same course of conduct
as a count of conviction. Id. at 885. “We conclude[d] that Rhine’s participation
in the Fish Bowl drug-trafficking ring and his offense[s] of conviction cannot be
considered part of a common scheme or plan. There is no evidence that Moore,
Rhine’s only accomplice in his offense[s] of conviction, played any role in the Fish
Bowl drug-trafficking ring. Neither is there evidence that any Fish Bowl
participant was involved in the instant incident. Further, the offenses do not
share a common modus operandi: In the Fish Bowl offense, Rhine is alleged to
have been a large-scale supplier to mid-level dealers; by contrast, in the
offense[s] of conviction, he attempted to sell a small quantity of crack cocaine to
an individual buyer for five dollars. Finally, the only common purpose linking
the . . . offenses is Rhine’s motivation to profit from the distribution of crack
cocaine, which . . . is by itself insufficient to connect the offenses as separate
parts of a common scheme or plan.” Id. at 886.
Moreover, the panel stated that Rhine’s instant offenses were not part of
the same course of conduct as the Fish Bowl conduct because “temporal
proximity, similarity, and regularity are all lacking.” Id. at 891. “Here, at least
17 months separate[d] any participation by Rhine in the Fish Bowl
drug-trafficking ring from his offense[s] of conviction.” Id. at 887. We also found
“counter-indicative the lack of evidence that Rhine engaged in any intervening
criminal activity, the presence of which might link his earlier conduct to the
offense[s] of conviction.” Id. “[S]imilarity is lacking[] as the differences between
13
the[] offenses are significant. The quantities, methods of distribution,
participants, and nature of the transactions—as well as the defendant’s role in
them—all vary substantially.” Id. at 889. “Rhine’s instant offense[s] involved
possession of a very small quantity (1.89 grams) of crack cocaine with intent to
sell some lesser portion of it to an individual buyer for five dollars; the sale took
place in a vehicle; and Buchanan, the individual purchaser for her personal
consumption, had just learned about Rhine from some unnamed source at a
service station. In contrast, Rhine’s alleged participation in the Fish Bowl
drug-trafficking ring was said to have involved his acting as a large-scale
manufacturer, distributor, and supplier of kilogram quantities of crack cocaine
to numerous mid-level dealers.” Id. at 888-89. “Further, there is no evidence that
the cocaine forming the basis for Rhine’s offense of conviction shared a common
source, supplier, or destination with the cocaine involved in the Fish Bowl
activities.” Id. at 889. “[R]egularity is [also] lacking, as there is no evidence that
Rhine engaged in any intervening criminal activity—much less drug
distribution—between the Fish Bowl drug-trafficking ring and his offense[s] of
conviction.” Id. at 890.
On remand, the probation officer revised the pre-sentence report, in what
is referred to as the second and third addenda to the pre-sentence report. She
found that based upon Rhine’s instant convictions, but not taking into account
his participation in the Fish Bowl activity, he had a criminal history category of
IV and an offense level of 15. This provided Rhine a recommended Sentencing
Guidelines sentencing range of 30-37 months of imprisonment. The parties do
not object to this calculation. Further, the defense noted, uncontroverted, that
had Rhine been convicted of his alleged involvement in the Fish Bowl activity
“he would have received three points in his criminal history . . . [resulting] in a
guideline range of 37 to 46 months.”
14
In the second and third addenda, the probation officer explained that the
district court could increase the recommended sentence in two ways. The
probation officer suggested that “a variance outside of the advisory guidelines
may be warranted for the aforementioned reasons.” In the second and third
addenda, those aforementioned reasons included merely a recounting of the
case’s procedural history and the fact that Rhine’s alleged involvement in the
Fish Bowl drug trafficking “did not enter into the determination of the applicable
guideline range.” The revised reports in no way elaborated on why a variance
was warranted, nor did they indicate or explain how much of a variance would
be appropriate in light of Rhine’s alleged involvement in the Fish Bowl activity.
Moreover, such information was not contained within the probation officer’s
original sentencing report. That report, which had recommended enhancing
Rhine’s offense level in light of his alleged involvement in the Fish Bowl activity,
had stated that “there are no known facts that warrant a sentence outside the
advisory guideline system.”1 Further, none of the defendant’s objections to the
pre-sentence reports nor the Government’s responses to those objections
indicated what sort of variance would be appropriate. Regarding the possibility
of a variance, the Government stated only that “the court may choose to impose
a variance, that is, a non-Guidelines sentence, based on [the] § 3553(a) factors,
including the need to promote respect for law, deterrence of future criminal
conduct, and the need to protect the public.”
The second and third addenda to the pre-sentence report also indicated
that the district court could alternatively increase the defendant’s sentence by
applying either, or both, of two Guidelines departure provisions, §§ 4A1.3 and
1
In the first addendum to the pre-sentence report, the addendum prepared during the
first sentencing in response to the defendant’s objections to the original pre-sentence report,
the probation officer did note that “[s]hould the court sustain the defendant’s objection and rule
the ‘Fish Bowl’ activities were not a part of the relevant conduct, it may determine the conduct
is other criminal conduct which can be used for . . . a sentence outside of the advisory guideline
system (variance), pursuant to 18 USC § 3553(a)(1), (a)(2)(B), and (a)(2)(C).”
15
5K2.0. Section 4A1.3 allows a departure “[i]f reliable information indicates that
the defendant’s criminal history category substantially under-represents the
seriousness of the defendant’s criminal history or the likelihood that the
defendant will commit other crimes.” Section 5K2.0 “[i]n general” allows a
departure where “the court finds, pursuant to 18 U.S.C. 3553(b)(1), that there
exists an aggravating or mitigating circumstance.” In the second addendum, the
probation officer had also recommended a departure pursuant to Guidelines
§ 5K2.21, but she withdrew that recommendation in her third addendum,
concluding that the provision was inapplicable. The defendant objected to the
applicability of these departure provisions.
At sentencing, the district court “adopt[ed] as the fact findings of the
[c]ourt the facts set forth in th[e second and third] addenda [to the original pre-
sentence report].” Therefore the court concluded “[t]hat the total offense level is
15, Criminal History Category is IV, that the imprisonment range as to Counts
1 and 2 . . . is 30 to 37 months.” The court then explained: “I’m convinced that a
reasonable sentence in this case is one that would take into account [the
defendant’s] prior similar drug conduct, the drug activities that he engaged in,
in that ‘Fish Bowl’ area that was mentioned in the presentence report. And for
that activity to be taken into account, the sentence would have to be somewhat
above the top of the advisory guideline range. Considering all the factors the
Court is to consider under 18 United States Code, Section 3553(a), I’ve concluded
that a sentence that would aggregate a total of 180 months would be a sentence
that would be required to address the defendant’s history and criminal
conduct. . . . That, in my view, would be required, a sentence of at least that
much would be required, to adequately reflect the seriousness of the offense
conduct, to promote respect for the law, provide just punishment for the offense,
to afford adequate deterrence for future criminal conduct, and to protect the
public from further crimes of the defendant. And apparently the defendant is
16
benefitting from his imprisonment he’s had so far, and I believe he’ll continue to
benefit from the kinds of activities and programs that are available in the
prison.2 So I’m satisfied a sentence of imprisonment of the kind I’ve imposed
would be necessary and appropriate to serve the objectives of sentencing and
promote respect for the law and deterrence and protection of the public. . . . I
believe a sentence of that kind would be reasonable sentence that would
adequately address everything the Court should consider in sentencing. . . .
[T]he sentence I’ve imposed should appropriately be viewed as a variance and
would be a reasonable sentence if viewed that way.” At sentencing, the district
court provided no other justifications for the variance. The defense objected to
the sentence as unreasonable.
The district court also stated that the sentence could alternatively be
viewed as a “departure under the guidelines” and that the reasons given in “the
third addenda, in my view are appropriate to justify the sentences I’ve imposed
as a Guideline requirement.” Beyond stating what ultimate sentence it believed
was appropriate, the district court did not explain how the departure provisions
should be applied to enhance the defendant’s offense level, criminal history
2
This list of reasons for the sentence merely reiterates the statutory factors the court
is required to consider under 18 U.S.C. § 3553(a), without adding any additional information.
Specifically, § 3553(a) states:
Factors to be considered in imposing a sentence.--The court shall impose a
sentence sufficient, but not greater than necessary, to comply with the purposes
set forth in paragraph (2) of this subsection. The court, in determining the
particular sentence to be imposed, shall consider–
(1) the nature and circumstances of the offense and the history and
characteristics of the defendant;
(2) the need for the sentence imposed--
(A) to reflect the seriousness of the offense, to promote respect for
the law, and to provide just punishment for the offense;
(B) to afford adequate deterrence to criminal conduct;
(C) to protect the public from further crimes of the defendant; and
(D) to provide the defendant with needed educational or
vocational training, medical care, or other correctional treatment
in the most effective manner . . . .
17
category or sentencing range. The defendant objected to the applicability of the
departure provisions.
The district court subsequently entered a written statement of reasons,
purportedly explaining its sentence. The statement of reasons indicated that the
court was adopting the facts in each of the pre-sentence reports as the findings
of the court. The statement of reasons also indicated that the sentence could be
viewed as a variance or a departure. By checking boxes beside a pre-printed list
of reasons for the variance, the court indicated that the variance was justified
because of “the nature and circumstances of the offense and the history and
characteristics of the defendant pursuant to 18 U.S.C. § 3553(a)(1),” “to reflect
the seriousness of the offense, to promote respect for the law, and to provide just
punishment for the offense (18 U.S.C. § 3553(a)(2)(A)),” and “to protect the public
from further crimes of the defendant (18 U.S.C. § 3553(a)(2)(C)).” The court also
wrote in the statement of reasons that “[t]he sentence is a reasonable sentence
that appropriately considers the advisory guidelines range and all factors
mentioned in 18 U.S.C. § 3553(a).” The court further stated that when viewing
the sentence as a departure, it was justified based on Guidelines §§ 4A1.3 and
5K2.0. Contrary to its statements at sentencing, the court also indicated it had
applied Guidelines § 5K2.21—the Guidelines departure provision that the third
addendum, on which the court purportedly relied at sentencing, had indicated
was inapplicable to the defendant.
In sum, claiming to need to increase Rhine’s sentence to reflect his alleged
involvement in the Fish Bowl activity, the district court imposed a 147-month
variance above the top of the correctly calculated Guidelines sentencing range.
It thereby increased the defendant’s sentence from three years to fifteen years
of imprisonment. In doing so, it provided no explanation for that degree of
variance except for indicating it adopted the findings in the pre-sentence report
and repeating the § 3553(a) factors that it was required to consider. Seeking to
18
insulate its sentence from reversal as a variance, the district court also stated
that the sentence could be justified based upon three Guidelines provisions,
including one that the probation officer, in a report adopted as a finding of the
court, indicated could not apply. The district court never indicated how these
provisions increased the defendant’s criminal history category, offense level or
recommended sentencing range.
II.
In Gall v. United States, the Supreme Court laid out a two-staged review
for federal sentences. “[F]irst, [the appellate court must] ensure that the district
court committed no significant procedural error, such as failing to calculate (or
improperly calculating) the Guidelines range,3 treating the Guidelines as
mandatory, failing to consider the § 3553(a) factors, selecting a sentence based
on clearly erroneous facts, or failing to adequately explain the chosen
sentence—including an explanation for any deviation from the Guidelines range.”
552 U.S. 38, 51 (2007) (emphasis added). “Assuming that the district court’s
sentencing decision is procedurally sound, the appellate court should then
consider the substantive reasonableness of the sentence imposed under an
abuse-of-discretion standard. When conducting this review, the court will, of
course, take into account the totality of the circumstances, including the extent
of any variance from the Guidelines range.” Id.; see also id. at 41 (“[T]he extent
of the difference between a particular sentence and the recommended Guidelines
range is surely relevant . . . .”); id. at 47 (“In reviewing the reasonableness of a
sentence outside the Guidelines range, appellate courts may therefore take the
degree of variance into account and consider the extent of a deviation from the
Guidelines.”).
3
This includes incorrectly applying the Guidelines departure provisions. Dillon v.
United States, 130 S. Ct. 2683, 2688 (2010) (citing United States v. Booker, 543 U.S. 220, 259
(2005)).
19
From Gall, this court derived its now familiar bifurcated review of federal
sentences. “‘We first examine whether the district court committed any
significant procedural error, such as: (1) failing to calculate (or improperly
calculating) the applicable Guidelines range; (2) treating the Guidelines as
mandatory; (3) failing to consider the 18 U.S.C. § 3553(a) factors; (4) determining
a sentence based on clearly erroneous facts; or (5) failing to adequately explain
the chosen sentence, including an explanation for any deviation from the
Guidelines range.’ Under this step of analyzing for procedural error, we review
the district court’s interpretation or application of the sentencing guidelines de
novo, and its factual findings for clear error.” United States v. Gutierrez-
Hernandez, 581 F.3d 251, 254 (5th Cir. 2009) (footnote omitted) (quoting United
States v. Armstrong, 550 F.3d 382, 404 (5th Cir. 2008)). “Next, if the district
court’s decision is procedurally sound, we consider the substantive
reasonableness of the sentence, considering the factors in 18 U.S.C. § 3553(a).”
Id. In such circumstances, “[w]e . . . review for abuse of discretion.” Id.
III.
In my view, the district court erred during re-sentencing, requiring this
panel to vacate and remand for another re-sentencing. When viewing the
sentence as a variance: (1) the district court committed procedural error by
failing to adequately explain its chosen sentence and (2) because the district
court provided no reasoned basis for its sentence, this court should also conclude
that the sentence was arbitrarily imposed and therefore is substantively
unreasonable. When viewing the sentence as a departure under the Guidelines,
the district court committed procedural error by applying inapplicable
Guidelines provisions.
A.
20
A district court must adequately explain its chosen sentence. Gall, 552
U.S. at 51; see also Rita, 551 U.S. at 356, 357 (“The sentencing judge should set
forth enough to satisfy the appellate court that he has considered the parties’
arguments and has a reasoned basis for exercising his own legal decisionmaking
authority. . . . Where the judge imposes a sentence outside the Guidelines, the
judge will explain why he has done so.” (citing United States v. Taylor, 487 U.S.
326, 336-37 (1988)). Accordingly, this circuit has stated that “when the judge
elects to give a non-Guideline sentence, . . . [a term used] to distinguish it from
a Guidelines sentence which includes a sentence that has been adjusted by
applying a ‘departure’ as allowed by the Guidelines[,] . . . she should carefully
articulate the reasons she concludes that the sentence she has selected is
appropriate for that defendant. These reasons should be fact specific and
include, for example, aggravating or mitigating circumstances relating to
personal characteristics of the defendant, his offense conduct, his criminal
history, relevant conduct or other facts specific to the case at hand which led the
court to conclude that the sentence imposed was fair and reasonable.” Mares,
402 F.3d at 519 & n.7; see also United States v. Jimenez, 275 F. App’x 433, 437
(5th Cir. 2008) (unpublished) (stating that it was plain error for a district court
to “not provide any fact-specific reasons for its upward departure to permit us
to review [the] sentence for reasonableness” (citing Mares, 402 F.3d at 519));
United States v. Rodriguez, 523 F.3d 519, 525 (5th Cir. 2008) (citing Mares, 402
F.3d at 519, to establish that “the district court’s comments at sentencing [were]
adequate”).
Such procedural requirements are consistent with those of other Circuits.
For instance, the en banc Second Circuit, in a portion of the opinion concurred
in by the entire court, stated that “in its explanation the district court must
satisfy us that it has ‘considered the parties’ arguments’ and that it has a
‘reasoned basis for exercising [its] own legal decisionmaking authority.’” United
21
States v. Cavera, 550 F.3d 180, 193 (2d Cir. 2008) (en banc) (alteration in
original) (quoting Rita, 551 U.S. at 356). Accordingly, “what is adequate to fulfill
these purposes necessarily depends on the circumstances.” Id. “[A] brief
statement of reasons will generally suffice where the parties have addressed
only ‘straightforward, conceptually simple arguments’ to the sentencing judge.”
Id. (quoting Rita, 551 U.S. at 356). “A district judge imposing a non-Guidelines
sentence, however, should say why she is doing so, bearing in mind, once again,
that ‘a major departure [from the Guidelines] should be supported by a more
significant justification than a minor one,’ Gall, [552 U.S. at 50], and that
varying from the Guidelines in a ‘mine-run’ case may invite closer appellate
review . . . [Kimbrough v. United States, 552 U.S. 85, 110 (2007)].” Id. (first
alteration in original).
Similarly, the Eleventh Circuit has stated that where a sentence differs
from the recommended Guidelines range, the district court must not only
indicate that it believed the sentence was reasonable in light of the statutory
factors it is required to consider, but must also provide some explanation of why
it believed the specific variance it imposed was justified and reasonable based
upon the unique facts of the case. United States v. Livesay, 525 F.3d 1081 (11th
Cir. 2008). In Livesay, the Eleventh Circuit vacated the defendant’s sentence of
60 months probation, when the Guidelines had recommended 78-97 months of
imprisonment, because—although the district court had explained that its
sentence was motivated by the fact that the defendant “did substantially
withdraw from the conspiracy” he was accused of participating in and its desire
to “avoid unwarranted sentencing disparities among defendants with similar
records who had been found guilty of similar conduct,” such as the defendant’s
co-conspirators—“the district court . . . gave no reasoning or indication of what
facts justified such a significant variance from the advisory Guidelines range.”
525 F.3d at 1088, 1089, 1093. The Eleventh Circuit explained that the district
22
court had “simply failed to explain its reasons for [its sentence] in a way that
allows for meaningful appellate review and promotes the perception of fair
sentencing.” Id. at 1093. “For example, the district court offered no explanation
or reasoning of how a sentence of 60 months’ probation (with 6 months’ home
detention) for an individual who pled guilty to knowingly playing an active and
crucial supervisory role in a massive $1.4 billion fraud for at least five years
reflected the seriousness of the offense or the nature and circumstances of the
crime.” Id. “[T]he district court provided nothing more than a conclusory
statement that a variance from the advisory Guidelines range of 78 to 97
months’ imprisonment to the ultimate sentence of 60 months’ probation (with 6
months’ home detention) satisfied Congress’s important concerns of deterrence.”
Id. at 1094.
Likewise, in United States v. Carter, the Fourth Circuit vacated a below-
Guidelines sentence because the district court gave insufficient reasons for its
variance. 564 F.3d 325 (4th Cir. 2009). The Fourth Circuit highlighted that the
district court had consulted with the probation officer in open court regarding
sentencing adjustments it was considering. Id. at 328. However, when it imposed
the sentence “the [district court] did not explain why a Guidelines sentence
would ‘overpunish’ [the defendant]” and, while the court “summarized” the four
“purposes in Section 3553(a)(2)” that it believed justified the sentence, it “did not
explain how those purposes applied to [the defendant].” Id. at 329. The panel
continued, “The district court thus erred in failing to articulate how the
sentencing factors applied to the facts of the particular case before it.” Id. at 329.
“[I]t must place on the record an ‘individualized assessment’ based on the
particular facts of the case before it. This individualized assessment need not be
elaborate or lengthy, but it must provide a rationale tailored to the particular
case at hand and adequate to permit ‘meaningful appellate review.’ Because the
record here does not demonstrate that the district court conducted such an
23
assessment and so does not reveal why the district court deemed the sentence
it imposed appropriate, we cannot hold the sentence procedurally reasonable.”
Id. at 330 (footnote omitted) (quoting Gall, 552 U.S. at 50). See United States v.
Hernandez, 603 F.3d 267, 271 (4th Cir. 2010) (“In Carter, we held that a
sentence was procedurally unreasonable when the district court failed to make
an individualized assessment on the facts presented and to state the particular
reasons for a sentence that varied . . . .”).4
Consistent with this case law, in United States v. Bonilla—this circuit’s
only post-Gall/Rita case to meaningfully review the adequacy of a district
court’s reasons supporting its variance sentence—we explained that the district
court’s reasons for a 41-month variance sentence were “minimally sufficient”
because when reviewing the record as a whole, the panel could determine the
district court’s “reasons” for both imposing a variance generally and selecting the
specific sentence imposed. 524 F.3d 647, 657 (5th Cir. 2008). Although at
sentencing the district court did nothing more than indicate that it was imposing
a sentence that it believed was reasonable, it stated that its sentence was based
upon reports in the record. Accordingly, we treated those reports as part of the
court’s explanation of the sentence and they detailed why the Government
believed a 41-month sentence was proper in light of “the defendant’s sporadic
work and employment history, his problems with alcohol and homelessness” and
4
See also United States v. Figueroa, 622 F.3d 739, 743-44 (7th Cir. 2010) (vacating a
sentence because the district court procedurally erred in failing to adequately explain its
sentence because the district court indicated that its sentence was based upon impermissible
“extraneous considerations” and did not state how the sentence was justified based upon the
relevant facts of the case); United States v. Lynn, 592 F.3d 572, 581 (4th Cir. 2010) (“That the
district court committed significant procedural error in sentencing [the defendant] seems clear.
The court provided no individualized explanation for its substantial departure from the
Guidelines.”); United States v. Dury, 336 F. App’x 371, 373 (4th Cir. 2009) (unpublished)
(“Here, as in Carter, the district court did not justify Dury’s sentence with an adequate
individualized rationale. . . . The district court failed to state how or which particular § 3553(a)
factors applied to Dury, and the court’s statement that it had considered the § 3553(a) factors
could have applied to any sentence, regardless of the offense or defendant.” (citing Carter, 564
F.3d at 328-29)).
24
prior arrests “related to alcoholism and homelessness that were not prosecuted.”
Id. at 658. The reports also established that “the probation office’s
recommendation [was] for a sentence of 41 months.” Id.5
Based upon these precedents, the district court in this case committed
reversible procedural error by failing to adequately explain its sentence. As in
Livesay and Carter, the district court made nothing more than conclusory
statements in support of its variance sentence. In both its oral and written
statements, the district court provided no individualized assessment of how the
defendant’s conduct warranted the instant sentence, indicating only that the
§ 3553(a) factors supported the sentence imposed. For instance, in its oral
summation of its sentence, it stated that it “believe[d] [the] sentence [was] of
that kind [that] would be a reasonable sentence that would adequately address
everything the Court should consider.” In its written statement of reasons, the
only notation the court added, beyond checking boxes beside certain pre-printed
statements indicating that it based the sentence upon the factors listed in
§ 3553(a), was that “[t]he sentence is a reasonable sentence that appropriately
considers the advisory guideline range and all factors mentioned in 18 U.S.C.
§ 3553(a).”
The district court’s passing reference to Rhine’s alleged involvement in the
Fish Bowl drug trafficking activity provides no basis on which to distinguish this
case from Livesay and Carter. But see Majority Op. 2-3. Prior to announcing the
sentence or articulating how the § 3553(a) factors applied to this case, the
district court stated that the sentence should “take into account” the alleged Fish
Bowl conduct as described in the pre-sentence reports. It never again mentioned
5
See also United States v. Mondragon-Santiago, 564 F.3d 357, 363-64 (5th Cir. 2009)
(“[T]he district court in this case did not give any reasons for its sentence beyond a bare
recitation of the Guideline’s calculation. . . . The district court did not mention
Mondragon-Santiago’s arguments, and the court’s statement of reasons did not further
illuminate its reasoning. . . . We conclude that the district court failed to adequately explain
its reasons for the sentence imposed . . . .” (citing Bonilla, 524 F.3d 647)).
25
the Fish Bowl or any facts from the reports. In Livesay and Carter, each district
court went farther, citing specific facts that it was taking into account at
sentencing and consulting with the probation officer about sentence adjustments
it was considering in light of the record. Livesay, 525 F.3d at 1088-89; see also
Carter, 564 dbowen@example.com. Nonetheless, the Livesay and Carter appellate courts
concluded that this was insufficient because each of the district courts did not
explain how they arrived at the sentences imposed. Similarly, the instant
district court’s single reference to the defendant’s “drug activities . . . in that
‘Fish Bowl’ area that w[ere] mentioned in the presentence report” “g[ives] no
reasoning or indication of [how the] facts justified such a significant variance.”
Livesay, 525 dbowen@example.com. The court at no point explained the manner(s) in
which the facts contained in the pre-sentence reports regarding the Fish Bowl
conduct translated into the variance sentence it imposed. Analogously, the
instant district court stated that it believed the prison environment was
beneficial for the defendant, but it did not explain why that fact indicated the
defendant should be committed to a prison for fifteen years rather than the three
years recommended by the Sentencing Guidelines. The statements regarding the
sentence did not provide “fact specific” “reasons [for why the court concluded]
that the sentence . . . selected [was] appropriate for that defendant.” See Mares,
402 dbowen@example.com.
Moreover, while the district court indicated that the sentence was based
upon the statements in the pre-sentence reports, unlike in Bonilla, those reports
provide no further explanation of the sentence imposed. Where in Bonilla the
reports established that the Government and probation officer agreed upon the
specific sentence the district court selected and those reports explained why that
sentence was warranted based upon the facts in the record, the instant probation
officer’s report does nothing more than indicate that some variance may be
26
warranted, without providing any details as to how much of a variance would be
proper.
The majority is simply incorrect that Bonilla stated that if facts in the
record could have “inspired” the sentence selected, that is sufficient to satisfy
Gall, Rita, and Mares’ requirement that the district court explain its sentence.
Majority Op. 6. The Bonilla majority homed in on the fact that “[t]he district
court[] reference[d] . . . the[] arguments” in the record explaining and justifying
the specific sentence imposed “before imposing a non-guideline sentence of [that
length]” to establish that the district court “provide[d] adequate reasons for that
decision.” 524 dbowen@example.com. It is exactly such a documented explanation and
justification for the instant sentence that is lacking in this case. Without that,
this court can only guess at how the district court arrived at the sentence
imposed and thus the district court committed procedural error by failing to
“adequately explain the chosen sentence.” Gall, 552 U.S. at 50.
This case is all the more distinguishable from Bonilla, and thus the
district court’s explanations are all the more insufficient, when one looks to the
course of the case as a whole. Unlike in Bonilla, this same district court judge
previously indicated that the same conduct that underlay the instant sentence
reasonably justified a sentence double the length, of thirty years imprisonment.
Now based upon mere rote incantations of the § 3553(a) factors, the district court
has pulled from thin air a sentence that essentially splits the difference between
the prior sentence it imposed and the recommended sentence under the
Guidelines. In doing so, the court has provided no explanation for its new and
different conclusion. This court stated that the reasons given in Bonilla were
“minimally sufficient”; therefore, the distinctions between this case and Bonilla
establish that the district court’s reasons in this case are insufficient to explain
the sentence. 524 dbowen@example.com.
27
Accordingly, I conclude that the district court committed procedural error
by failing to adequately explain its sentencing decision.
B.
The district court’s failure to provide any explanation for its sentence also
indicates that the sentence was substantively unreasonable. See United States
v. Bradley, 628 F.3d 394, 400 (7th Cir. 2010) (stating that a sentence is more
likely to be found substantively reasonable “if the underlying analysis is
‘sufficiently particularized to the individual circumstances of the case rather
than factors common to offenders with like crimes’” (quoting United States v.
Miller, 601 F.3d 734, 739 (7th Cir. 2010) (internal quotation marks omitted)).
The Supreme Court has explained that substantive reasonableness review
requires an appellate court not merely to determine whether the district court
abused its discretion by imposing an unjustified term of imprisonment in light
of the crime committed, but whether the district court abused its discretion
because the reasons for the sentence do not support the sentence imposed. As it
explained in Gall, “If [the district court] decides that an outside-Guidelines
sentence is warranted, [it] must consider the extent of the deviation and ensure
that the justification is sufficiently compelling to support the degree of the
variance. We find it uncontroversial that a major departure should be supported
by a more significant justification than a minor one.” 552 U.S. at 50; see Pepper
v. United States, 131 S. Ct. 1229, 1239-40 (2011) (“‘It has been uniform and
constant in the federal judicial tradition for the sentencing judge to consider
every convicted person as an individual and every case as a unique study in the
human failings that sometimes mitigate, sometimes magnify, the crime and the
punishment to ensue.’ Koon v. United States, 518 U.S. 81, 113 (1996).
Underlying this tradition is the principle that ‘the punishment should fit the
offender and not merely the crime.’ Williams v. People, 337 U.S. 241, 247
(1949).”). Therefore, the Court concluded that the sentence at issue in Gall was
28
reasonable because the district court had clearly considered and reasonably
weighed the specific facts and circumstances of the offender, crime and
surrounding events to arrive at the sentence imposed. Gall, 552 U.S. at 57 (“The
District Court quite reasonably attached great weight to the fact that Gall
voluntarily withdrew from the conspiracy after deciding, on his own initiative,
to change his life.”); see also Kimbrough, 552 U.S. at 111 (stating that the
sentence imposed in that case was substantively reasonable because in
articulating the sentence the district court “properly homed in on the particular
circumstances of Kimbrough’s case”).
Accordingly, this circuit and others have explained that a “sentence is
substantively unreasonable if ‘the district court selects a sentence arbitrarily.’”
United States v. Christman, 607 F.3d 1110, 1118 (6th Cir. 2010) (quoting United
States v. Conatser, 514 F.3d 508, 520 (6th Cir. 2008)); see also United States v.
Coots, No. 08-5497, 2011 WL 464631, at *7 (6th Cir. Feb. 10, 2011) (unpublished)
(Clay, J., concurring in part and dissenting in part) (“In the instant case,
Defendant’s sentence is procedurally unreasonable and his substantial rights
were impaired, because he was not provided an explanation of the specific basis
for his sentence, with reference to his personal background, characteristics, and
the nature of his offense. . . . On these same facts, the district court also abused
its discretion by imposing a sentence that was substantively unreasonable . . .
as here[] the sentence appears to have been arbitrarily selected . . . .” (citing
Christman, 607 F.3d at 1121-22)); United States v. Irey, 612 F.3d 1160, 1165
(11th Cir. 2010) (en banc) (equating an “unbridled” exercise of discretion at
sentencing with a substantively unreasonable sentence); United States v. Burns,
577 F.3d 887, 895-96 (8th Cir. 2009) (en banc) (“There must be some limits to the
district court’s discretion, for surely a district court’s willy nilly mood-of-the-day
reduction should not be insulated from appellate review . . . .”); Mares, 402 F.3d
at 519 (stating that in this circuit’s “reasonableness review” we must be able to
29
“infer that the judge has considered all the factors for a fair sentence”). Put
another way, an unreasoned sentence is necessarily substantively unreasonable.
For the reasons I have already described, based upon the instant record
I conclude that the district court arbitrarily selected the variance sentence it
imposed and therefore imposed a substantively unreasonable sentence, abusing
its discretion. The district court indicated that it chose to vary the sentence to
“take into account” Rhine’s alleged involvement in the Fish Bowl drug trafficking
scheme. However, as described above, the district court merely declared the 180-
month sentence after incanting all the required statutory considerations.
Nothing in the record establishes why the court believed 143 months of
additional imprisonment, over the top of the recommended Guidelines range,
reasonably reflects the defendant’s uncharged and unproven criminal conduct.
This same district court previously thought that a sentence of twice that length,
360 months, was reasonable to reflect the Fish Bowl conduct. The defense,
uncontroverted, explained at sentencing that had Rhine been charged and
convicted of the Fish Bowl conduct, “he would have received three points in his
criminal history . . . [resulting] in a guideline range of 37 to 46 months,” a 0-to-6
month increase over the correctly calculated recommended Guidelines range.
Therefore, based upon the record I am forced to conclude that the district court
arbitrarily selected the sentence imposed.
The majority’s attempt to characterize the sentence as substantively
reasonable only reinforces this conclusion. The majority explains that based
upon the record before us, it found that the district court had articulated reasons
justifying “an upward variance,” but not that the reasons given justify the
variance imposed. Majority Op. 7 (emphasis added). The very definition of an
arbitrary judicial decision is that it is solely an expression of the judge’s
“prejudice or preference.” Black’s Law Dictionary 112 (8th ed. 2004). Put another
way, a decision is arbitrary when there is no connection drawn between the
30
specific decision made and the bases for that decision. As I believe this is the
case here, I would conclude that the district court imposed a substantively
unreasonable sentence.
C.
I also conclude that this court cannot affirm on the alternate ground
suggested by the district court, that the sentence is justified as a departure. I
conclude that based upon this court’s prior decision in Rhine I, 583 F.3d 878, and
the law of the case doctrine, each of the departure provisions relied upon by the
district court is inapplicable. See Pepper, 131 S. Ct. at 1250 (“[A]s most
commonly defined, the [law of the case] doctrine posits that when a court decides
upon a rule of law, that decision should continue to govern the same issues in
subsequent stages in the same case.” (quoting Arizona v. California, 460 U.S.
605, 618 (1983) (internal quotation marks omitted)).
At sentencing and in its statement of reasons, the district court indicated
that in light of Rhine’s alleged involvement in the Fish Bowl drug trafficking
scheme, two Guidelines departure provisions, §§ 4A1.3 and 5K2.0, justified its
sentence. However, as relevant to this case, the plain language of § 4A1.3 states
that the provision may only “[f]orm[] the [b]asis for [u]pward [d]eparture” in
light of “[p]rior similar adult criminal conduct not resulting in a criminal
conviction.” (emphasis added). As described in Section I above, this court in
Rhine I concluded that the Rhine’s alleged “Fish Bowl” conduct is not “similar”
to the instant offenses. We explained that “similarity is lacking[] as the
differences between the[] offenses are significant. The quantities, methods of
distribution, participants, and nature of the transactions—as well as the
defendant’s role in them—all vary substantially.” Rhine I, 583 dbowen@example.com.
Therefore, under the law of the case, Guidelines § 4A1.3 is inapplicable.
This circuit has explained that Guidelines § 5K2.0 may only be applied
based upon the “circumstances of the instant offense.” United States v. Gutierrez-
31
Hernandez, 581 F.3d 251, 255 (5th Cir. 2009). Again as described in Section I,
in Rhine I this court concluded that Rhine’s purported involvement in the Fish
Bowl scheme is not part of the same course of conduct as the instant offenses,
and is also not “part of a common scheme or plan” connected with the instant
offenses. Rhine I, 583 dbowen@example.com. Therefore, again under the law of the case,
Guidelines § 5K2.0 is inapplicable.
In its written statement of reasons, but not in its oral pronouncement, the
district court also claimed that the departure was justified in light of Guidelines
§ 5K2.21. However, the third addendum to the pre-sentence report, adopted by
the district court as the findings of the court, acknowledged that this provision
was inapplicable because “the defendant’s uncharged conduct is not part of the
instant offense[s]” as required for the Guidelines section to apply. Consistent
with this conclusion, this court explained in United States v. Newsom that to
apply § 5K2.21 there must be “some degree of connection between the uncharged
[offense used to support the departure] and [the] charged offense[].” 508 F.3d
731, 735 (5th Cir. 2007). As this court explained in Rhine I, the only link
between the instant offenses and Rhine’s alleged involvement in the Fish Bowl
is that both were motivated by “profit from the distribution of crack cocaine,” but
from sales that were different in degree, with cocaine that was not shown to
come from the same supplier and whose distribution involved different co-
conspirators. Rhine I, 583 dbowen@example.com. Therefore, per Rhine I and the district
court’s own findings, § 5K2.21 is inapplicable.
Accordingly, because, in light of this court’s prior holdings, not one of the
departure provisions relied upon by the district court as an alternative
justification for the instant sentence is applicable to the instant case, I conclude
that the sentence is not sustainable as a departure.
32
D.
Generally, this court will sustain a sentence, even when it is infected with
error, if it is established “that the district court would have imposed the same
sentence regardless.” United States v. Neal, 578 F.3d 270, 274 (5th Cir. 2009).
However, the district court’s three errors in the instant case make this rule
inapplicable. (1) The district court committed procedural error by failing to
adequately explain its sentence. Because this error prevents meaningful
appellate review, it requires the court to vacate and remand for re-sentencing.
Livesay, 525 F.3d at 1093 n.9. (2) Assuming arguendo that the sentence was
procedurally sufficient, based upon the record the sentence was arbitrarily
imposed and therefore is substantively unreasonable, requiring this court to
vacate and remand for re-sentencing. (3) The district court’s alternative
justification of its sentence as a departure is insufficient to salvage the sentence,
as each of the Guidelines departure provisions on which the district relied is
inapplicable. Therefore, I would vacate the sentence and remand for yet another
re-sentencing.
Accordingly, I respectfully dissent.
33
|
Case 2:20-cv-12510-MAG-DRG ECF No. 9, PageID.21 Filed 11/23/20 Page 1 of 1
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
COLUMBUS NEVELS MILLER,
Plaintiff,
vs. Case No. 20-12510
MICHAEL E. CLAPP, et al., HON. MARK A. GOLDSMITH
Defendants.
__________________________________/
JUDGMENT
For the reasons stated in the opinion and order entered on today’s date, it is ordered and
adjudged that the case is dismissed with prejudice.
SO ORDERED.
DAVID J. WEAVER
CLERK OF THE COURT
Dated: By: s/Marlena Williams
Deputy Court Clerk
APPROVED:
s/Mark A. Goldsmith
MARK A. GOLDSMITH
UNITED STATES DISTRICT JUDGE
|
QuickLinks -- Click here to rapidly navigate through this document
Exhibit 10.4
Third Amendment to the
APAC Customer Services, Inc.
Second Amended and Restated 1995 Incentive Stock Plan
WHEREAS, APAC Customer Services, Inc. (the "Company") established and
maintains the APAC Customer Services, Inc. Second Amended and Restated 1995
Incentive Stock Plan, as amended effective June 9, 2000 (the "Plan"), and
WHEREAS, the Company desires to amend the Plan to eliminate the one year
"waiting period" that applies in the event of the acceleration of exercisability
of options on the death or retirement of a Director,
NOW THEREFORE, the Plan is hereby amended, effective as of February 9,
2004, in the following respect:
Paragraph 6(C)(ii) of the Plan is amended to read as follows:
"ii. Notwithstanding the above limitations, any option granted under this Plan
shall become fully exercisable upon the death of the Non-employee Director while
serving on the Board or upon the Retirement (as defined in the next sentence) of
the Non-employee Director. For any Director Option granted before June 9,
2000, "Retirement" means a Non-employee Director's termination of service as a
member of the Board after age 70 or a designation by the Board, in its
discretion, of such termination as a Retirement irrespective of a Director's
age. For any Director Option granted on or after June 9, 2000, "Retirement"
means a Non-employee Director's termination of service as a member of the Board
on or after the date on which the Non-employee Director's age plus service as a
member of the Board equals or exceeds 62, provided that the Non-employee
Director is at least age 50, and has served as a member of the Board for at
least six years, or if the Board in its discretion, designates such termination
as a Retirement irrespective of such Director's age and/or service."
IN WITNESS WHEREOF, a duly authorized officer of the Company has
executed this Second Amendment as of the 9th day of February, 2004.
APAC CUSTOMER SERVICES, INC.
By:
/s/ LINDA R. WITTE
--------------------------------------------------------------------------------
Its:
Senior Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
QuickLinks
Third Amendment to the APAC Customer Services, Inc. Second Amended and Restated
1995 Incentive Stock Plan
|
Case 1:20-cv-10942-VEC-RWL Document 87 Filed 08/10/21 Page 1 of 1
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK 8/10/2021
---------------------------------------------------------------X
TOWAKI KOMATSU, :
: 20-CV-10942 (VEC) (RWL)
Plaintiff, :
:
- against - : ORDER
:
THE CITY OF NEW YORK, et al., :
:
Defendants. :
:
---------------------------------------------------------------X
ROBERT W. LEHRBURGER, United States Magistrate Judge.
Plaintiff has requested authorization to move for leave to file a further amended
complaint in this case to add allegations of a recent incident with police, specifically that
a police officer shined a flashlight from roughly 20 feet away purportedly to interfere with
Plaintiff’s use of his cell-phone camera, and other police officers stood by while that
occurred. (Dkt. 84.) The application is denied as futile and not sufficiently related to the
conduct alleged in the currently operative complaint.
SO ORDERED.
_________________________________
ROBERT W. LEHRBURGER
UNITED STATES MAGISTRATE JUDGE
Dated: August 10, 2021
New York, New York
The Clerk of Court is instructed to mail a copy of this Order to the Pro Se Plaintiff.
1
|
2 U.S. 270 (____)
2 Dall. 270
VASSE
versus
BALL.
Supreme Court of United States.
*273 The defence was supported by Lewis, E. Tilghman & Rawle on three grounds.
M`KEAN, Chief Justice.
The same difficulty, that occurred in the case of Bernardi v. Motteux, Doug. 555, certainly occurs in the present case: how is the ground of condemnation to be ascertained? The libel asserts in one place, that the property *274 is French; in another place, that it is American; and the several statements, that the vessel was employed in assisting, or supplying, the French, also imply that it belonged to a neutral owner. The decree, however, is general: but can we impute to it, the absurdity of meaning to decide, that the vessel and cargo were, at the same time neutral and enemy property?
SHIPPEN, Justice.
If the libel had confined itself to alledge, that the property was French, and the decree had been general; or, if the decree had specifically selected and stated that allegation, as the ground of condemnation, I should have been strongly inclined to think, that we were bound by the decision. But the object of the present enquiry is, to ascertain for what cause the vessel and cargo have been confiscated?
The counsel for the defendant, perceiving the biass of the Court so much against them, declined pressing any further the argument in support of the binding nature of the decree of condemnation; and left their case to the Jury, simply upon the plaintiff's alledged concealment of the information contained in the captain's letter, communicating the capture of the vessel. The opposite counsel having, thereupon, proved that the plaintiff was an American citizen, and sole owner of the vessel and cargo, the following charge was delivered by the Chief Justice, after a general recapitulation of the facts:
M`KEAN, Chief Justice.
The first ground of defence attempted to be taken on this occasion, is; that the vessel was engaged in a trade with the French islands, which, as it was not permitted by the French government previously to the war, Great Britain, it is said, had a right to deem unlawful, and to construe into a violation of our neutrality. The fact has not been established: But, if it had been established, I could not accede to the conclusion, which the defendant's counsel contemplated. I cannot conceive, upon what principle, our accepting a benefit is to be converted into the perpetration of a wrong. What injury can be done to any belligerent power, by our sending the exports of America (not of a contraband nature) to a new market? Where is the cause of offence? In what consists the infraction of neutrality? We are not actuated by motives of partiality and favoritism, for, we are willing, of our own accord, to pursue the same course with Great Britain, as well as France, and we find that, in fact, the colonial governments of Great Britain often invite us, during a war, to an intercourse in trade, which is, at other times, absolutely interdicted. We cannot prevent another nation from offering a bounty to our commerce, by opening a free port, or by relinquishing its duties; and when we merely accept these advantages, on a principle of self-interest, why shall we be charged with a breach of our neutrality? No: The rule, on the point of neutrality, is just and clear: It is *275 simply this: If two nations are at war, a neutral power shall not do any act, in favor of the commercial, or military, operations of one of them; or, in other words, it shall not, by treaty, afford a favor, or grant a privilege, which was not stipulated for, previously to the commencement of hostilities.
The second ground of defence, is founded on the capture and consideration of the trodriguez@example.com. It is urged, that the libel states the property to be French; and that the decree being general, affirms that allegation. But the libel consists of five charges; and if the charge of French property is affirmed, the other four, which stand precisely on the same footing, must be arbitrarily excluded; since, under different modifications, they alledge the property to be American. It is impracticable, therefore, to fix the precise cause of condemnation by an inspection of the record itself; but, we are clearly of opinion, that, under such circumstances, evidence may be received to establish the American ownership, in conformity to the warranty. As, then, the proof leaves no doubt on the question of ownership, we cannot presume that the Judge of a foreign Court has perjured himself, by declaring that property to be French, which we know to be American; and, of course, we must assume the position, that his decree proceeded upon the other allegations of the libel. Those other allegations do not furnish any cause for cancelling the policies in the present case, either in relation to the express warranty, or to the matter charged. An American citizen may lawfully, at any time, carry flour, and other articles of provision, or dispatches, for a French minister, from an American, to a French, port.
The third ground of defence states, that there was a concealment of some material facts, in regard to the risque, which were known to the plaintiff at the time of the defendant's undertaking the insurance; such as the outward transportation of a cargo of flour for Mr. Fauchet, and the homeward accommodation of French soldiers, with their baggage. If this statement is correct in point of evidence, the law arising from it is certainly in favor of the defendant. But the weight of the testimony does not seem to support it. There can be no imputation of concealment, where each party had an equal opportunity of acquiring a knowledge of the fact; and there is strong reason to believe, if not direct evidence to shew, that the plaintiff gave the defendant that opportunity, by placing in his hands the captain's letter, reciting all the circumstances. If the defendant then refused, or neglected, to read the letter, it cannot now be assigned as a cause for vitiating the policies. Besides, if all the circumstances had been perfectly understood, there was nothing which any lawyer would have pronounced to be illicit in the trade. The cargo of flour was at the risque of the plaintiff, till it was *276 actually delivered; and I have never heard of any law, in any civilized nation, that deemed it contraband, or unlawful, to carry a few, unarmed, invalid soldiers, to a neutral country, in pursuit of health and refreshment.
A fourth ground of defence has been taken, upon this consideration, that the household furniture of the passengers came within the description of the cargo of the vessel; and thereof, the warranty had not been strictly performed. I confess, that I agree in the general idea, that household furniture cannot be regarded as baggage, and must constitute a part of the cargo; but still, to admit this exception, under the peculiar circumstances of the shipment, would be too indulgent to a harsh and captious spirit of litigation; nor, throughout the history of Admiralty proceedings, can there be traced a single instance of condemnation, for such a cause.
Upon the whole, it is our opinion, that the plaintiff is entitled to recover the amount of both Policies.
Verdict for the Plaintiff.[*]
NOTES
[*] At the close of the charge, Tilghman claimed leave to tender a bill of exceptions, because the Court did not direct the Jury, in point of law, to consider the decree as conclusive.
BY THE COURT: We do not say what would have been our opinion, if the decree had expressly condemned the property as French: but, in its present state, we do not think it conclusive, to prevent evidence that the cargo was actually neutral.
The defendant afterwards moved for a new trial, but it was refused. He then brought a writ of error; but, on the 13th of July 1797, the judgment, entered in pursuance of the verdict, was affirmed.
|
Citation Nr: 1522014
Decision Date: 05/21/15 Archive Date: 06/01/15
DOCKET NO. 04-24 626A ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in New York, New York
THE ISSUES
1. Whether new and material evidence was received to reopen a service connection claim for an acquired psychiatric disorder.
2. Entitlement to service connection for an acquired psychiatric disorder.
REPRESENTATION
Appellant represented by: Epifanio Castillo, Jr., Attorney
ATTORNEY FOR THE BOARD
T. L. Douglas, Counsel
INTRODUCTION
The appellant is a Veteran who served on active duty from April 1973 to December 1973.
This matter comes before the Board of Veterans' Appeals (Board) by order of the United States Court of Appeals for Veterans Claims (hereinafter "the Court") in June 2008, which granted a joint motion for remand vacating a February 2007 Board decision and remanding the case for additional development. The issue initially arose from a May 2002 rating decision by the New York, New York, Regional Office (RO) of the Department of Veterans Affairs (VA). The case was remanded for additional development in March 2009 and July 2014.
The Board notes that in Clemons v. Shinseki, 23 Vet. App. 1 (2009), the Court held that an initial service connection claim for a psychiatric disorder should also be read as including other psychiatric diagnoses reasonably raised by the symptoms described and all information obtained in support of the claim. Therefore, the issue on appeal includes consideration of the other applicable diagnoses of record in this case.
The issue of entitlement to service connection for an acquired psychiatric disorder addressed in the REMAND portion of the decision below and is REMANDED to the Agency of Original Jurisdiction (AOJ).
FINDINGS OF FACT
1. A January 1984 rating decision denied entitlement to service connection for a nervous condition; the Veteran did not perfect his appeal of that decision subsequent to an April 1984 statement of the case.
2. Evidence added to the record since the January 1984 rating decision raises a reasonable possibility of substantiating the service connection claim.
CONCLUSION OF LAW
New and material evidence was received, and the claim for entitlement to service connection for an acquired psychiatric disorder is reopened. 38 U.S.C.A. § 5108 (West 2002); 38 C.F.R. § 3.156 (2014).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
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 2014); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2014). The Veteran was notified of the duties to assist and of the information and evidence necessary to substantiate his claim by correspondence dated in December 2003 and December 2014.
VA law provides that a claimant may reopen a finally adjudicated claim by submitting new and material evidence. New evidence means existing evidence not previously submitted to agency decisionmakers. Material evidence means existing evidence that, by itself or when considered with previous evidence of record, relates to an unestablished fact necessary to substantiate the claim. New and material evidence can be neither cumulative nor redundant of the evidence of record at the time of the last prior final denial of the claim sought to be reopened, and must raise a reasonable possibility of substantiating the claim. 38 U.S.C.A. § 5108 (West 2014); 38 C.F.R. § 3.156(a) (2014).
The Court has held that the credibility of evidence must be presumed for the purpose of deciding whether it is new and material. Justus v. Principi, 3 Vet. App. 510, 513 (1992). The United States Court of Appeals for the Federal Circuit has held, however, that evidence that is merely cumulative of other evidence in the record cannot be new and material even if that evidence had not been previously presented to the Board. Anglin v. West, 203 F.3d 1343 (Fed. Cir. 2000).
When making a determination as to whether received evidence meets the definition of new and material evidence, the Board should take cognizance of whether that evidence could, if the claim were reopened, reasonably result in substantiation of the claim. Shade v. Shinseki, 24 Vet. App. 110 (2010).
A January 1984 rating decision denied entitlement to service connection for a nervous disorder. The RO essentially determined that the Veteran suffered from a psychiatric disability prior to active service, and that his preexisting psychiatric disability was not aggravated by service. The Veteran was notified of the decision and submitted notice of disagreement, but did not perfect his appeal of that decision subsequent to the issuance of an April 1984 statement of the case. 38 U.S.C.A. § 7105 (West 2014); 38 C.F.R. § 20.1103 (2014).
The evidence added to the record since the January 1984 rating decision includes VA treatment reports, a July 2002 private medical statement, and lay statements in support of the claim. The July 2002 private medical statement, a "Physician's Questionnaire" from the Veteran's service representative, includes diagnoses of psychosis, not otherwise specified, and rule out intermittent explosive disorder. The document also includes a positive response for the question as to whether the Veteran's psychiatric condition is related to military service and an additional comment that he qualified for service connected disability.
The Board finds that the evidence received is neither cumulative nor redundant of the evidence of record and raises a reasonable possibility of substantiating the claim. The evidence includes a July 2002 private medical statement not previously of record that may reasonably result in substantiation of the claim. Although there is some indication that the July 2002 document may have been altered, the credibility of the evidence is presumed for the purpose of reopening the claim. Therefore, the claim as to this matter must be reopened.
ORDER
The application to reopen a claim for entitlement to service connection for an acquired psychiatric disorder is granted.
REMAND
A review of the record reveals that additional development is required prior to appellate review. The Board notes that a July 2002 Physician's Questionnaire provided diagnoses of psychosis, not otherwise specified, and rule out intermittent explosive disorder and indicated these psychiatric disorders were related to the Veteran's military service. No rationale, however, was provided for the etiology opinion and there is some indication that the document may have been altered. In addition, although the Veteran's service treatment records show no psychiatric disorders were noted upon enlistment examination the record includes a March 1967 private medical report noting a diagnosis of childhood schizophrenia and an August 1967 report noting diagnoses of primary behavior disorders in children and conduct disturbance. In light of the conflicting evidence of record, further development is required for an adequate determination of the service connection issue.
VA's duty to assist the Veteran includes obtaining a thorough and contemporaneous examination where necessary to reach a decision on the claim. See 38 U.S.C.A. § 5103A; 38 C.F.R. § 3.159. Here, the Board finds the Veteran should be afforded a VA examination. Prior to the examination, up-to-date VA treatment records should be obtained.
Accordingly, the case is REMANDED for the following action:
1. The AOJ should associate any relevant unobtained treatment records with the claims file. All records obtained should be associated with the claims file.
2. The Veteran must be afforded a VA examination by a physician with the appropriate expertise to determine the etiology of any psychiatric disability present during the period of this claim. His claims files (including VVA and VBMS files) must be reviewed by the examiner in conjunction with the examination. After examining the Veteran, performing any necessary testing, and reviewing the relevant evidence in the claims file, the examiner should clearly identify any psychiatric disability(ies) found or that have existed since the onset of the appeal.
For each psychiatric diagnosis made, the examiner should opine as to:
a) Is there clear and unmistakable evidence (undebatable) that an acquired psychiatric disability? The examiner should identify the pre-existing psychiatric disability and the evidence supporting pre-existence. Reference is made to records included in the service treatment records including an April 1967 report from Rockland State Hospital.
b) If an acquired disability clearly and unmistakably preexisted service, is there clear and unmistakable (undebatable) evidence that the disability was not aggravated by service beyond its natural progression? Consideration must be given to the psychiatric evaluation that was conducted in September 1973 that referenced disciplinary problem occurring in service and the recommendation that the Veteran be discharged due to "unsuitability."
c) If any acquired psychiatric disability is not found to have clearly and unmistakably preexisted service, the examiner should provide an opinion addressing whether it is at least as likely as not (a degree of probability of 50 percent or higher) that such disorder had its onset in service or is otherwise etiologically related to service.
The examiner must consider the Veteran's lay testimony in addition to the documentary evidence of record. In particular, his/her opinion should reflect consideration of the Veteran's descriptions of the in-service symptoms and the post-service treatment reports. The examiner is asked to discuss medically known or theoretical causes of the Veteran's diagnosed psychiatric disorders in determining the likelihood that any current psychiatric disorder was caused by his military service as opposed to some other cause.
Note: The term "aggravated" in the above context refers to a permanent worsening of the underlying condition, as contrasted to temporary or intermittent flare-ups of symptomatology which resolve with return to the baseline level of disability. Complete rationale for all opinions should be provided in the examination report.
The medical reasons for the opinions provided should be set forth in detail. If the examiner feels that the requested opinion cannot be rendered without resorting to speculation, he/she should state whether the need to speculate is caused by a deficiency in the state of general medical knowledge (i.e. no one could respond given medical science and the known facts), by a deficiency in the record (i.e. additional facts are required), or by the examiner himself/herself (because he/she does not have the needed knowledge or training). Merely saying he/she cannot comment will not suffice.
3. Thereafter, the AOJ should address the issue remaining on appeal. If the benefits sought are not granted to the Veteran's satisfaction, the Veteran and his attorney should be furnished a Supplemental Statement of the Case and afforded a reasonable opportunity to respond before the record is returned to the Board for further 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 2014).
______________________________________________
MICHAEL A. HERMAN
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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Case 1:19-cv-11360-KPF Document 29 Filed 12/10/20 Page 1 of 1
MARIA-COSTANZA BARDUCCI
BARDUCCI LAW FIRM
5 WEST 19TH STREET, 10TH FLOOR
NEW YORK, NEW YORK 10011
TELEPHONE: (709)985-5471
December 10, 2020
Via CM/ECF
Honorable Katherine Polk Failla
United States District Magistrate Judge
Southern District of New York
Re: Alexander Gomez v. Dorado Tacos II, LLC et al.
Civil Action No.: 1:19-cv-11360-KPF
Joint Status Report and Joint Letter-Motion to Adjourn Conference
Dear Judge Katherine Polk Failla:
I represent the Plaintiff in the above-referenced matter.
The parties have settled this matter, memorialized, and executed their settlement
agreement.
Under the parties’ settlement agreement, they need until February 28, 2021 to file the
stipulation of dismissal.
Accordingly, it is respectfully requested that the Court cancel and/or adjourn the
conference scheduled for December 14, 2020, at 10:00 a.m.
The Defendants consent to this request.
Thank you for your consideration.
Respectfully Submitted,
BARDUCCI LAW FIRM
s/Maria Costanza Barducci, Esq.
MARIA COSTANZA BARDUCCI, ESQ.
cc: Via CM/ECF Only
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RICHARD FRANSEN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, RespondentFransen v. Comm'rNo. 8682-06LUnited States Tax CourtT.C. Memo 2007-237; 2007 Tax Ct. Memo LEXIS 240; 94 T.C.M. 193; August 20, 2007, Filed2007 Tax Ct. Memo LEXIS 240">*240 Richard Fransen, Pro se.Marie E. Small, for respondent.Chiechi, Carolyn P.CAROLYN P. CHIECHIMEMORANDUM OPINIONCHIECHI, Judge: This case is before the Court on respondent's motion for summary judgment (respondent's motion). We shall grant respondent's motion.BACKGROUNDThe record establishes and/or the parties do not dispute the following.Petitioner resided in Brooklyn, New York, at the time he filed the petition in this case.Petitioner did not file a Federal income tax (tax) return for each of his taxable years 2000, 2001, and 2002.On August 10, 2004, respondent issued to petitioner a notice of deficiency with respect to his taxable year 2002 (2002 notice), which he received. In that notice, respondent determined the following deficiencies in, and additions to, petitioner's tax:Additions to TaxSec.Sec.Sec.YearDeficiency6651(a)(1)12007 Tax Ct. Memo LEXIS 240">*241 6651(a)(2)66542002$ 53,753$ 3,704.40$ 1,811.04$ 411.70On September 14, 2004, respondent issued to petitioner a notice of deficiency with respect to his taxable years 2000 and 2001 (2000 and 2001 notice), which he received. In that notice, respondent determined the following deficiencies in, and additions to, petitioner's tax:Additions to TaxSec.Sec.Sec.YearDeficiency6651(a)(1)6651(a)(2)66542000$ 43,959$ 4,631.17$ 4,837.00$ 967.34200135,6603,294.222,562.17486.97Petitioner did not file a petition with the Court with respect to the 2002 notice or the 2000 and 2001 notice. 2On February 7, 2005, respondent assessed petitioner's tax, as well as additions to tax and interest as provided by law, for his taxable year 2002. (We shall refer to those unpaid assessed amounts, as well as interest as provided by law accrued after February 7, 2005, as petitioner's unpaid liability for 2002.)On February 7, 2005, respondent issued to petitioner the notice and demand for payment required by section 6303(a) with respect to petitioner's unpaid liability for 2002.On February 21, 2005, respondent assessed petitioner's tax, as well as additions to tax and interest as provided 2007 Tax Ct. Memo LEXIS 240">*242 by law, for each of his taxable years 2000 and 2001. (We shall refer to those unpaid assessed amounts, as well as interest as provided by law accrued after February 21, 2005, as petitioner's unpaid liabilities for 2000 and 2001.)On February 21, 2005, respondent issued to petitioner the notice and demand for payment required by section 6303(a) with respect to petitioner's unpaid liabilities for 2000 and 2001.On September 20, 2005, respondent filed a notice of Federal tax lien with respect to petitioner's taxable years 2000, 2001, and 2002. On September 27, 2005, respondent issued to petitioner a notice of Federal tax lien filing and your right to a hearing (notice of tax lien) with respect to those years.On October 27, 2005, petitioner's authorized representative mailed to respondent Form 12153, Request for a Collection Due Process Hearing (petitioner's Form 12153), and requested a hearing with respondent's Appeals Office (Appeals Office). In that form, petitioner's authorized representative indicated disagreement with the notice of tax lien 32007 Tax Ct. Memo LEXIS 240">*244 and stated:TAXPAYER HASN'T FILED HIS 1999-2004 INCOME TAX RETURNS. HE HAS ENGAGED OUR FIRM TO PREPARE SUCH INCOME TAX RETURNS AND OBTAIN FINANCING 2007 Tax Ct. Memo LEXIS 240">*243 TO LIQUIDATE HIS IRS LIABILITIES AND REQUEST AN ABATEMENT OF PENALTIES AND INTEREST DUE TO HIS EMOTIONAL AND PHYSICAL STATE. AMENDED INCOME TAX RETURNS ARE REQUIRED. IT WILL TAKE APPROXIMATELY 60 DAYS TO PREPARE SUCH AMENDED INCOME TAX RETURNS. THEREFORE, A LIEN AND LEVY WILL INHIBIT THE TAXPAYER TO OBTAIN PROPER FINANCING. [Reproduced literally.]On January 19, 2006, a settlement officer with the Appeals Office (settlement officer) sent a letter to petitioner with respect to petitioner's Form 12153. In that letter, the settlement officer offered petitioner the opportunity to have a hearing on February 28, 2006. On February 28, 2006, petitioner's authorized representative called the settlement officer and requested a two-week period within which to (1) submit a tax return for each of petitioner's taxable years 2000, 2001, and 2002 and (2) propose a collection alternative. The settlement officer granted that request. On March 28, 2006, the settlement officer called petitioner's authorized representative (March 28, 2006 call). During the March 28, 2006 call, petitioner's authorized representative indicated that he had nothing to submit with respect to petitioner's taxable years 2000, 2001, and 2002 and requested that 2007 Tax Ct. Memo LEXIS 240">*245 a notice of determination be issued with respect to those years.On April 5, 2006, the Appeals Office issued to petitioner a notice of determination with respect to petitioner's taxable years 2000, 2001, and 2002. That notice stated in pertinent part:Summary of DeterminationYou did not offer any collection alternatives for Appeals consideration. Collection is sustained.An attachment to the notice of determination stated in pertinent part:SummaryYou filed a request for a Collection Due Process (CDP) hearing under Internal Revenue Code (IRC) section 6320 following receipt of a Letter 3172 Notice of Federal Tax Lien Filing and Your Rights to a Hearing. A copy of the Notice of Federal Tax Lien (NFTL) and Letter 3172 were provided with the administrative file. Accordingly, the tax periods shown above [taxable years 2000, 2001, and 2002] were those on the NFTL sent for filing on September 27, 2005. Balances are still due as verified by computer transcripts. Your Form 12153 requesting a CDP hearing, was received on November 1, 2005. This was timely submitted as it was mailed within the 30-day period for requesting a CDP hearing.I mailed you a letter on 1/19/2006 giving you the opportunity 2007 Tax Ct. Memo LEXIS 240">*246 for a hearing on 2/28/2006. On 2/28/2006 your representative * * * contacted me and requested an additional two weeks to prepare your delinquent returns and submit a collection alternative. [petitioner's authorized representative] * * * was granted the additional time. On 3/28/2006 I contacted him again for the information. He stated he had nothing to submit and requested this determination be issued.You have not filed an income tax return since 1989, The IRS requested that you file returns for 2000, 2001 and 2002 and gave you an opportunity to appeal the proposed assessments. You did not do so, therefore the underlying liability issue is precluded within Collection Due Process under IRC section 6330. There is no information in the file that warrants the withdrawal of the filed NFTL. The filed NFTL is the appropriate action in this case.Brief BackgroundThe CDP notice was for unpaid income tax liabilities for your 2000, 2001 and 2002 Form 1040. The returns were prepared by the IRS when you failed to file them yourself. The IRS assessed tax as follows:2000 $ 43,959.00 Withholding $ 23,226.002001 $ 35,660.00 Withholding $ 21,019.002002 $ 53,753.00 Withholding $ 37,289.00You were also 2007 Tax Ct. Memo LEXIS 240">*247 assessed late filing penalty on these years.Interest and failure to pay penalty continue to accrue on the unpaid assessment.Your lack of compliance is considered egregious. You have not filed an income tax return since 1989. You have made no estimated tax payments and have not had sufficient withholding to cover the tax. You have not been in compliance with the filing and payment requirements for 14 years, despite the fact that you have had considerable income and you were able to set aside more than $ 225,000 in pension and stocks and bonds in lieu of filing and paying your taxes.You have not supplied financial information to help us resolve your account. You have not presented any alternatives to the NFTL or future collection action, including possible seizure of your assets.Discussion And AnalysisVerification of Legal and Procedural RequirementsThe requirements of applicable law or administrative procedures have been met and the actions taken were appropriate under the circumstances.o I verified through transcript analysis that assess-ment was made on the applicable CDP notice periods per IRC section 6201 and the notice and demand for payment letter was mailed to the taxpayer's 2007 Tax Ct. Memo LEXIS 240">*248 last known address, within 60 days of the assessment, as required by IRC section 6303.o Per transcript analysis, there was a balance due when the NFTL filing was requested. This balance is still due.o IRC section 6321 provides a statutory lien when a taxpayer neglects or refuses to pay a tax liability after notice and demand for payment. Transcripts of the account show that the IRS issued notice and demand for each of the tax periods involved and those periods remain unpaid.o Per review of computer transcripts, the CDP notice(Letter 3172) was sent by certified mail to your last known address, no later than 5 business days after the NFTL was recorded (IRC section 6320(a)). This was also the address shown on your CDP hearing request. The lien was filed on September 20, 2005 and the Letter 3172 was mailed on September 27, 2005, which is within 5 business days of the lien filing.o The collection period allowed by statute to collect these taxes has been suspended by the appropriate computer codes for the tax michelle91@example.org. Transaction Code 520, has been posted for each of the taxes and periods listed on the NFTL as the date the IRS received the CDP hearing request.o Per transcript analysis, 2007 Tax Ct. Memo LEXIS 240">*249 a CP504 notice, warning of a possible filing of a NFTL, was issued for the tax periods subject to the hearing at least 31 days prior to the NFTL filing. The notice was mailed on May 9, 2005.o There is no pending bankruptcy case, nor did you have a pending bankruptcy case at the time the CDP notice was sent (11 U.S.C. section 362(a)(6)).o This Appeals employee has had no prior involvement with this taxpayer concerning the applicable tax periods before this CDP case.Issues Raised by the TaxpayerChallenges to the Existence or Amount of the LiabilityYou have challenged the existence or the amount of the liabilityon the returns prepared by the IRS under IRC section 6020(b). The underlying liability issue is precluded from this hearing. Furthermore, you have not prepared and submitted your own returns which would allow the IRS to adjust your tax liabilities.Challenges to the Appropriateness of the Collection ActionYou have not requested the NFTL be withdrawn. However, I have considered whether any of the criteria for allowing withdrawal of the lien existed in your case.IRC section 6323(j) allows the withdrawal of a filed notice of lien without full payment and without prejudice under the 2007 Tax Ct. Memo LEXIS 240">*250 following conditions:o The filing of the notice of lien was premature or otherwise not in accordance with administrative procedures of the Internal Revenue Service;o The taxpayer had entered into an agreement under IRC section 6159 to satisfy the tax liability for which the lien was imposed by means of installment payments, unless such agreement provides otherwise;o Withdrawal of the lien will facilitate collection of the tax liability; oro Withdrawal of the lien would be in the best interests of the taxpayer (as determined by the National Taxpayer Advocate) and the United States. Similar to the above provision, each set of circumstances should be analyzed to determine if this condition exists.There is nothing in the Collection administrative file that indicates withdrawal of the filed lien should be considered and you have provided no additional information that indicates the withdrawal of the filed lien should be considered.Collection Alternatives Offered by the TaxpayerOn your Form 12153 requesting the CDP hearing, you raised no other issues or offered an alternative to collection. You failed to present me with the delinquent returns and financial information as I had requested, 2007 Tax Ct. Memo LEXIS 240">*251 and your representative offered no collection alternatives at the hearing, other than to request an additional delay for an undetermined period of time.Other issues raised by the TaxpayerYou raised no other issues.Balancing of Need for Efficient Collection With Taxpayer Concern That the Collection Action Be No More Intrusive Than NecessaryI balanced the competing interests when finding the filing of the NFTL is appropriate. You did not offer any collection alternatives during the CDP hearing process. As discussed above, the assessment(s) at issue are valid.During the past 16 years you set aside funds for a pension and invested in stocks and bonds while knowingly failing to file and pay your income taxes, despite the fact that you had earned income from wages and self-employment income. The fact that you filed returns up until 1989 indicates that you were aware of the filing and withholding requirements. You invested your income during the past 16 years in lieu of filing and paying your taxes, which indicates your failure to file and pay your tax as willful and egregious.Given your failure to propose any collection alternatives and your non-compliance with the tax laws, the Notice of 2007 Tax Ct. Memo LEXIS 240">*252 Federal Tax Lien balances the need for efficient collection with your concern that the collection action be no more intrusive than necessary.The notice of determination makes no determination with respect to the respective notices of intent to levy issued with respect to petitioner's taxable years 2000 and 2001 and 2002.Petitioner filed a petition with respect to the notice of determination. In that petition, petitioner alleged:5. The determination of the tax set forth in the said notice of deficiencies are based upon the following errors.(a). The notices of deficiency did not take into account allowable cost bases for stock transactions.(b). The notices of deficiency did not take into account certain allowable itemized deductions including real estate taxes and other deductible expenses.6. The facts upon which the Petitioner relies, as the bases of the Petitioner's case, are as follows:(a). Petitioner's income should be reduced by his costs of securities sold and certain allowable itemized deductions.(b). The taxpayer will file his 2000, 2001 and 2002 income tax returns with the Internal Revenue Service Hartford, Connecticut Office reflecting the correct information.(c). The penalties 2007 Tax Ct. Memo LEXIS 240">*253 should be abated due to reasonable causes as discussed in Form 12153, copy enclosed.DISCUSSIONThe Court may grant summary judgment where there is no genuine issue of material fact and a decision may be rendered as a matter of law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518">98 T.C. 518, 98 T.C. 518">520 (1992), affd. 17 F.3d 965">17 F.3d 965 (7th Cir. 1994). We conclude that there are no genuine issues of material fact regarding the questions raised in respondent's motion.In the petition, petitioner alleged that the 2000 and 2001 notice and the 2002 notice are wrong and that the additions to tax for those years "should be abated". 4We 2007 Tax Ct. Memo LEXIS 240">*254 first address petitioner's allegation in the petition that the Court should abate the respective additions to tax for his taxable years 2000, 2001, and 2002. Although not altogether clear, petitioner appears to be requesting the Court to review under section 6404 respondent's failure to abate those additions to tax. We hold that we do not have jurisdiction to do so. See sec. 6404(h); see also Washington v. Comm'r, 120 T.C. 114">120 T.C. 114, 120 T.C. 114">124 n.15 (2003); Krugman v. Commissioner, 112 T.C. 230">112 T.C. 230, 112 T.C. 230">237 (1999).We now address petitioner's allegation in the petition that the 2000 and 2001 notice and the 2002 notice are wrong. A taxpayer may raise challenges to the existence or the amount of the taxpayer's underlying tax liability if the taxpayer did not receive a notice of deficiency or did not otherwise have an opportunity to dispute the tax liability. Sec. 6330(c)(2)(B).Respondent issued to petitioner the 2000 and 2001 notice and the 2002 notice, which he received. Petitioner did not file a petition with the Court with respect to either of those notices. On the instant record, we find that petitioner may not challenge the existence or the amount of the underlying tax liability, including any 2007 Tax Ct. Memo LEXIS 240">*255 additions to tax, 5 for each of his taxable years 2000, 2001, and 2002.Where, as is the case here, the validity of the underlying tax liability is not properly placed at issue, the Court will review the determination of the Commissioner of Internal Revenue for abuse of discretion. Sego v. Commissioner, 114 T.C. 604">114 T.C. 604, 114 T.C. 604">610 (2000); Goza v. Commissioner, 114 T.C. 176">114 T.C. 176, 114 T.C. 176">181-182 (2000).Based 2007 Tax Ct. Memo LEXIS 240">*256 upon our examination of the entire record before us, we find that respondent did not abuse respondent's discretion in making the determinations in the notice of determination regarding the notice of tax lien with respect to petitioner's taxable years 2000, 2001, and 2002.We have considered all of the contentions and arguments of the parties that are not discussed herein, and we find them to be without merit, irrelevant, and/or moot.On the record before us, we shall grant respondent's motion.To reflect the foregoing,An order granting respondent's motion and decision for respondent will be entered.Footnotes1. All section references are to the Internal Revenue Code in effect at all relevant times. All Rule references are to the Tax Court Rules of Practice and Procedure.2. Form 4340, Certificate of Assessments, Payments, and Other Specified Matters (Form 4340), with respect to petitioner's taxable year 2002 indicates that the 2002 notice was "closed" on Dec. 28, 2004. Form 4340 with respect to each of petitioner's taxable years 2000 and 2001 indicates that the 2000 and 2001 notice was "closed" on Feb. 1, 2005.↩3. In petitioner's Form 12153, petitioner's authorized representative indicated disagreement with not only the notice of tax lien that respondent issued to petitioner but also certain notices of intent to levy and your right to a hearing (notice of intent to levy) that respondent issued to petitioner. In this connection, Form 4340 with respect to petitioner's taxable year 2002 indicates that on Apr. 18, 2005, respondent issued a notice of intent to levy with respect to petitioner's taxable year 2002 and that on May 9, 2005, respondent issued a notice of intent to levy with respect to petitioner's taxable years 2000 and 2001. Petitioner's authorized representative did not mail petitioner's Form 12153 until Oct. 27, 2005, which was more than 30 days after the respective dates on which respondent issued those notices of intent to levy. As discussed below, the notice of determination concerning collection action(s) under section 6320 and/or 6330↩ (notice of determination) addresses only the notice of tax lien and makes no determination with respect to the respective notices of intent to levy issued with respect to petitioner's taxable years 2000 and 2001 and 2002.4. In the petition, petitioner refers to the respective notices of intent to levy that respondent issued with respect to petitioner's taxable years 2000 and 2001 and 2002. Petitioner's authorized representative did not file timely petitioner's Form 12153 with respect to those notices, see sec. 6330(a)(2) and (3)(B) and (b), and the notice of determination makes no determination with respect to those notices. We conclude that we do not have jurisdiction to consider petitioner's arguments with respect to the notices of intent to levy. See Offiler v. Commissioner, 114 T.C. 492">114 T.C. 492, 114 T.C. 492">498↩ (2000).5. Assuming arguendo that petitioner's allegation in the petition that the Court should abate the respective additions to tax for his taxable years 2000, 2001, and 2002 is not intended as a request by petitioner for the Court to review under sec. 6404 respondent's failure to abate those additions, but instead is a request to review de novo the propriety of those additions to tax, we shall not do so. That is because the phrase "underlying tax liability" in sec. 6330(c)(2)(B) is "a reference to the amounts that the Commissioner assessed for a particular tax period." Montgomery v. Comm'r, 122 T.C. 1">122 T.C. 1, 122 T.C. 1">7 (2004). What the Court concluded in Montgomery applies in the instant case: "petitioners' underlying tax liability consists of the amount that petitioners reported due on their tax return along with statutory interest and penalties." 122 T.C. 1">Id↩. at 8. |
Complaint by appellant on a policy of life insurance. The insurance company paid the amount due into court and was discharged from further liability. The contest is between appellant and appellee as to which one is entitled to the money. The cause was tried upon an agreed statement of facts and resulted in a judgment in favor of Prior.
The policy in question was issued in May, 1918, on the life of Theodore Henrich and was made payable to his wife, the appellant herein. It reserved to the insured the right of revocation and provided that the insured, upon written request filed with the insurance company, might designate a new beneficiary, or have the policy payable to his estate, such change to take effect only when indorsed on the policy. It also provided that no assignment of the policy should be binding on the company unless the original assignment or a duplicate thereof be filed with the company at its home office. The insured died in March, 1924, and after suit, the amount due on the policy was paid into court for the use of the proper party. On May 20, 1922, the insured, as evidence of a debt then owing Frank Prior, gave him a note for $5,000. On the face of this note was the statement that it was secured by an assignment of the policy in question. On the same day, the insured executed a writing reciting that, under the right given in the policy, he revoked the appointment of his wife as beneficiary, and requested that the policy be changed and made payable to his estate. A duplicate of this revocation and request was sent to the insurance company and was by it attached to the policy. At the time of executing said revocation, the insured also, in writing, assigned the policy to Frank *Page 213
Prior as security for the payment of said note. This assignment was sent to the insurance company along with the written revocation, and also attached to the policy by the insurance company, at which time, the insurance company made a written statement on the policy to the effect that the appointment of appellant as beneficiary had been revoked according to the right reserved to the insured, and that the company agreed the policy should be payable to the executors, administrators or assigns of the insured. The policy, with said indorsements on it, was then sent to appellee Frank Prior who ever since has had possession thereof.
There are two questions involved in this appeal. (1) Did the insured have the right to assign the policy without the consent of his wife? (2) Was the assignment legally made?
Appellant makes no claim that there was not a sufficient consideration for the execution of the note. Neither is there any claim that any fraud was exercised in connection with changing the policy of insurance so as to make it payable to the estate or assigns of the insured. Appellant, however, insists she had an indefeasible interest in the policy which could not be taken from her and destroyed without her consent.
Appellant does not dispute the right of her husband to change the beneficiary in the policy. But she insists that the policy still belongs to her; that the extent of the right and power of her husband was to change the beneficiary, and that he had no right to assign it without her consent.
In support of her contention, appellant says that, where a policy provides the method of changing the beneficiary, such method must be followed, and if the policy provides that the change shall not become effective until indorsed on the policy, such indorsement is necessary, and that where several papers are executed *Page 214
practically at the same time and one of them is invalid, all are invalid. In other words appellant insists that, since the change in beneficiary and the assignment were both made on the same day, the transaction must be held to be invalid.
The law favors the making of reasonable provisions by a man for his wife and family. And where a policy of insurance on the life of the husband is payable to his wife, without right or 1, 2. power in the husband to revoke the appointment of the beneficiary and to name another in her stead, no such right exists. In such cases, the policy is her absolute property, and he has no control over it. But the insured may retain the right to change the beneficiary without the latter's consent, and when such a change has been made in accordance with the terms of the policy, it is binding on the former beneficiary and she no longer has any interest therein.
Appellant concedes that her husband had the right to change the beneficiary, and to make the policy payable to his estate, and that if, after he had done so, he, at some future date, 3. concluded to assign the policy, such assignment would have been valid if made in the manner named in the policy. She contends, however, that the evidence conclusively shows that before making the change of beneficiary he had concluded to make the assignment, and because he had concluded to make the assignment before the change in beneficiary was made, the entire transaction is invalid. We cannot concur in this contention.Indiana Nat. Life Ins. Co. v. McGinnis (1913), 180 Ind. 9, 101 N.E. 289, 45 L.R.A. (N.S.) 192, is not in our judgment of controlling influence. The insured in that case, without the knowledge or consent of the beneficiary who had possession of the policy, and who had a vested interest in the policy, undertook to surrender it to the *Page 215
insurance company and to release the company from all liability on the policy. No question as to the right of the insured to change the beneficiary or to assign the policy was there involved. That case recognizes the power of an insured to change the beneficiary when that right is reserved, as in the policy now under consideration.
The trial court, in our judgment, correctly held the change in beneficiary and the assignment of the policy in the instant case were valid and that the proceeds of the policy should be paid to Prior.
The judgment is, therefore, affirmed. |
Title: Suing a Professional School for Misrepresentation of Services
Question:(Tennessee) The medical college I am referring to advertised a 99% graduation and residency placement rate in 2012. The same year, they increased their class size by a significant margin, and as a result of the class size increase, they were only able to graduate/place 73% of their class into residencies. To put the numbers more simply:
2012: 149/150 students place into residency (nearly the entire class)
Large class size increase approved
2016: 175 / 242 students placed into residency.
Of the 92 students who were added onto the class, only 25 were placed into residency spots. That's a total failure rate of 73% of the class increase.
I am one of the students who failed out of the program as a result of this class size increase. We were not given any information pertaining to an increased failure rate. I believe I have grounds to sue the university for misrepresentation, and damages caused by failing out of their program (severe emotional trauma, was suicidal and have evidence to show cause of suicidality directly related to medical school failure)
Do you have any advice for me? I would be interested in hiring a lawyer with significant expertise in the field. This lawsuit could be potentially significant as far as financials are concerned, possibly in the millions of dollars range based on what my salary could have been as a doctor (I was accepted to other schools), the student loans that are owed to them, and the emotional trauma that was caused as a result of their actions.
EDIT: The idea is that they had to purposefully fail students in order to have enough students placed into residencies (to avoid screwing up their residency placement statistic). I think it may be possible to get the data they submitted to the accreditation council to see if they actually planned to have that many students attain residency. If there is a discrepancy, there could be something there.
Think "bell curves". They set the bell curve. They decide who stays and who goes, and what their attrition standards look like.
See https://consumermediallc.files.wordpress.com/2016/02/csi-denial-letter.pdf
Answer #1: I am sorry that you did not graduate/attain residency and I encourage you to seek whatever help is available to cope with that.
However...
A school cannot guarantee a graduation rate, they can only describe historical graduation rates and that seems like that this is the case here here. They are telling you that, *in the past* 99% of students have graduated and placed into residency. You seem to confirm that this is accurate.
You say the school did not give you information pertaining to an increased failure rate. I don't know how the school could give this to you. How would they know, ahead of time, who will and will not graduate, or even how many students will or will not graduate?
In the end "graduation" and "residency" are not services offerred by the school. They are merely statistics the school uses to imply the educational services it does provide are of a high quality.
I'm sorry, but I don't think you have a case, especially since you don't have an explanation as to how actions of the school *caused* you to fail. |
7 N.Y.3d 751 (2006)
LENA C. TEDESCO, Individually and as Executrix of FRANK J. TEDESCO, Deceased, Plaintiff,
v.
A.P. GREEN INDUSTRIES, INC., et al., Defendants, and
INSULATION DISTRIBUTORS, INC., Respondent and Third-Party Plaintiff-Respondent.
E.I. DU PONT DE NEMOURS AND COMPANY, Third-Party Defendant-Appellant.
Court of Appeals of New York.
Submitted May 8, 2006.
Decided June 29, 2006.
Motion to dismiss the appeal herein as moot denied.
|
Dear Ms. Sheeren:
You requested an Attorney General's opinion regarding the use of Special Asset Forfeiture funds. You question whether or not it is proper to use Special Asset Forfeiture funds for the purpose of funding and operating the D.A.R.E. Program in the City of Kenner.
The allocation and use of Special Asset Forfeiture funds is governed by La. R.S. 40:2616(B), which provides for the establishment of a Special Asset Forfeiture Fund where all monies obtained under the provisions of the chapter are to be deposited. It then sets forth as follows:
The Court shall ensure the equitable distribution of any forfeited property, or of monies under and subject to the provisions of this Subsection, to the appropriate local, state or federal law enforcement agency so as to reflect generally the contribution of the agency's participation in any of the activity that led to the seizure or forfeiture of the property or deposit of monies under and subject to the provisions of this Subsection. The office of the district attorney shall administer expenditures from the fund. The fund is subject to public audit. Money in the fund shall be distributed in the following order of priority:
(1) For satisfaction of any bona fide security interest or lien.
(2) Thereafter, for payment of all proper expenses of the proceedings for forfeiture and sale, including expenses of seizure, maintenance of custody, advertising, and court cost.
(3) The remaining funds shall be allocated as follows:
(a) Sixty percent thereof to the law enforcement agency or agencies making the seizure, such proceeds to be used in drug law enforcement, *Page 2
including but not limited to reward programs established by such agencies.
(b) Twenty percent thereof to the criminal court fund.
(c)Twenty percent thereof to any district attorney's office that employ the attorney's that handle the forfeiture action for the state. This shall be paid into the district attorney's twelve percent fund to be used for public purposes including, but not limited to use for prosecution, rewards, support and continuing legal education in furtherance of this Chapter, and in regard to Chapter 4 of Title 40 of the Louisiana Revised Statutes of 1950.
In Atty. Gen. Op 94-170 this office found under R.S. 40:2616
that drug asset forfeiture proceeds are to be distributed to the seizing agency, which in that case was the Mamou Police Department. While stating that no portion of this money could be used for anything other than drug law enforcement, it was concluded, "It is our opinion that this forfeited money must be kept separate from the City's general fund and in the complete control of the law enforcement agency making the seizure." Our office has also concluded that the chief of police is the only official authorized to make decisions concerning disbursement of municipal funds allocated to the police department. Atty. Gen. Op. 98-469. See also, Cogswell v. Town of Logansport,321 So. 2d 774 (La.App. 1975), wherein the court held that the chief of police has the "power to supervise the operation of the police department and assign its personnel and equipment . . ." Id. at 779.
The allocation or use of Special Asset Forfeiture funds is solely within the discretion of the chief of police, subject to the requirement that the funds must be used for drug law enforcement. We previously opined that there must be a connection between the expenditure and drug law enforcement. Atty. Gen. Op. 93-753. The police chief may use the Special Asset Forfeiture funds for any purpose with a connection to drug law enforcement, including but not limited to: reward programs, payment of salaries of fulltime and/or part-time employees doing strictly drug enforcement work, the purchase of equipment (such as pullet-proof vests, radios, weapons, flashlights, etc.) to be used in drug law enforcement, to purchase or lease office space to be used specifically to further drug law enforcement, to provide adequate lighting in areas known to have frequent illegal drug traffic, and drug rehabilitation programs. See Atty Gen. Op. Nos. 02-10, 03-0190, 98-315, 93-753, 93-499 and 93-165.
As you can see, there are numerous permissible uses for Special Asset Forfeiture funds. As to the funding of a D.A.R.E. Program, we point you to Attorney General Opinion no. 93-753, which addressed the use of Special Asset Forfeiture funds to fund a drug rehabilitation program. Our office concluded:
. . . it is the opinion of this office that the purpose and intent of the requirement that drug asset forfeiture money be spent on drug law *Page 3
enforcement is to decrease drug related crime. This purpose can be fulfilled by funding a rehabilitation program for persons who are on probation or incarcerated. The connection between drug use and crime is well established. Therefore, the use of drug asset forfeiture proceeds to reduce drug use fulfills the purpose and intent of La. R.S. 40:2616 (B)(3)(a) by reducing the incidence of drug related crime.
It follows that, if a D.A.R.E. Program reduces drug use, such a program would also fulfill the purpose and intent of La. R.S.40:2616(B)(3)(a) by reducing the incidence of drug related crime. As such, the funding of a D.A.R.E. Program in the City of Kenner would be one permissible use of Special Asset Forfeiture funds.
Trusting this adequately responds to your request, we remain
Yours very truly,
CHARLES C. FOTI, JR. ATTORNEY GENERAL
BY: ________________________ KENNETH L. ROCHE, III Assistant Attorney General |
1
THE HONORABLE RICHARD A. JONES
2
3
4
5
6
7
UNITED STATES DISTRICT COURT
8 WESTERN DISTRICT OF WASHINGTON
9
)
10 THOMAS E. PEREZ, Secretary of Labor, )) Case No. 2:15-cv-538-RAJ
United States Department of Labor, )
11
) ORDER GRANTING REVISED
12 Plaintiff, ) FIRST FEE APPLICATION
)
13
)
vs. )
)
14 ALFRED H. CHAN, M.D., P.C., a )
corporation; ALFRED H. CHAN, an )
15 )
individual; JUDY H. CHAN, an individual; )
16 ALFRED H. CHAN, M.D., P.C. DEFINED )
BENEFIT PLAN & TRUST, an employee )
17 pension benefit plan )
)
18 )
Defendant. )
19
20
This matter comes before the Court on the “Revised First Fee Application” of
21
Robert Moore, the Independent Fiduciary of the Alfred H. Chan, M.D., P.C. Defined
22
Benefit Plan & Trust. Dkt. # 11. No party has filed a response to the Revised Fee
23
Application.
24
Under the terms of this Court’s previous Order, the Independent Fiduciary’s fees
25
were capped at $17,500. Dkt. # 6 at 3. In order to receive approval for additional fees,
26
the Independent Fiduciary was required to provide the Court with (a) an itemized fee
27
application, and (b) proof that a copy of this application and any supporting documents
28
ORDER - 1
1 was sent to the Secretary’s representative, San Francisco EBSA Regional Director at 90
2 Seventh Street, Suite 11-300, San Francisco, CA 94103. Id. The Secretary would then
3 have 15 calendar days to object to the application. Id.
4 The Court previously denied Mr. Moore’s Fee Application, without prejudice,
5 citing his failure to include proof that the application was sent to the Secretary’s
6 representative, San Francisco EBSA Regional Director at 90 Seventh Street, Suite 11-
7 300, San Francisco, CA 9410. Dkt. # 9. Mr. Moore now moves for approval of his
8 Revised Fee Application. Dkt. # 11. In addition to his itemized list of expenses, Mr.
9 Moore has now filed proof that a copy of the Revised Fee Application was sent to the
10 Secretary at the San Francisco location. Mr. Moore’s Certificate of Service indicates
11 that the Fee Application was sent to the United States Department of Labor in Seattle and
12 the EBSA Regional Director in San Francisco. Dkt. # 8 at 6.
13 In the Revised Application, Mr. Moore again requests approval of $12,342.50 in
14 additional fees and expenses related to the continued administration of the Plan. Dkt. #
15 11 at 4. After reviewing the Revised Fee Application and itemized expenses, the Court
16 finds that the reported fees and expenses are reasonable. Accordingly, the Court
17 GRANTS the Revised Fee Application. Dkt. # 11.
18
19 Dated this 24th day of October, 2019.
20
21
22
A
The Honorable Richard A. Jones
23
United States District Judge
24
25
26
27
28
ORDER - 2
|
734 F.2d 468
v.URBAN DEVELOPMENT CORPORATION, Convention Center DevelopmentCorporation, and State of New York, Defendants-Appellees.
No. 775, Docket 83-7828.
United States Court of Appeals,Second Circuit.
Submitted March 5, 1984.Decided May 8, 1984.
Robert S. Tobin, New York City, for plaintiff-appellant General Camera corp.
Evelyn M. Tenenbaum, New York City, Asst. Atty. Gen. of the State of New York (Robert Abrams, Atty. Gen., Melvyn Leventhal, Deputy First Asst. Atty. Gen., Stanley Camhi, Asst. Atty. Gen., New York City, of counsel), for defendant-appellee State of N.Y.
Before FEINBERG, Chief Judge, and MANSFIELD and CARDAMONE, Circuit Judges.
PER CURIAM:
1
General Camera Corp. appeals from an order of the United States District Court for the Southern District of New York, Thomas P. Griesa, J., awarding defendant-appellee State of New York $4,000 in attorney's fees. Judge Griesa found that plaintiff-appellant's action under 42 U.S.C. Sec. 1983 was "entirely groundless" and that, as a result, appellee was entitled to attorney's fees under 42 U.S.C. Sec. 1988.
2
We accept Judge Griesa's conclusion that appellant's section 1983 action was frivolous. Thus, following Harbulak v. County of Suffolk, 654 F.2d 194, 198 (2d Cir.1981), in which we held that the defendant should be awarded attorney's fees where the plaintiff's section 1983 action was "unreasonable and groundless, if not frivolous," and Hughes v. Rowe, 449 U.S. 5, 14-16, 101 S. Ct. 173, 178-179, 66 L. Ed. 2d 163 (1980) (per curiam), in which the Supreme Court reversed an award of attorney's fees on the grounds that the section 1983 action was neither "groundless" nor "without foundation," we find that the award of attorney's fees here was proper, even though the district court made no finding on whether appellant brought its action in bad faith. See also Hensley v. Eckerhart, --- U.S. ----, 103 S. Ct. 1933, 1937 n. 2, 76 L. Ed. 2d 40 (1983) (dictum); Kostiuk v. Town of Riverhead, 570 F. Supp. 603, 612 (E.D.N.Y.1983); Munshi v. New York University, 528 F. Supp. 1088, 1093 (S.D.N.Y.1981).
3
We affirm the judgment of the district court.
MANSFIELD, Circuit Judge (concurring):
4
I concur in the majority's conclusion that appellant's action was frivolous and that therefore the appellees were entitled to attorney's fees under 42 U.S.C. Sec. 1988 as prevailing parties in a Sec. 1983 action. I write separately to clarify the standard to be applied by lower courts in awarding attorney's fees to prevailing defendants under Sec. 1988.
5
Section 1988 provides in relevant part that "in any action or proceeding to enforce a provision of sections 1981, 1982, 1983, 1985, and 1986 of this title, ... the court, in its discretion may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs." 42 U.S.C. Sec. 1988. Both the Senate and the House Reports accompanying the statute noted that a prevailing defendant would be entitled to attorney's fees only if the plaintiff litigated in "bad faith." The Senate Report states in pertinent part:
6
"It is intended that the standards for awarding fees be generally the same as under the fee provisions of the 1964 Civil Rights Act. A party seeking to enforce the rights protected by the statutes covered by S.2278, if successful, 'should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust.' Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402, 88 S. Ct. 964, 966, 19 L. Ed. 2d 1263 (1968). Such 'private attorneys general' should not be deterred from bringing good faith actions to vindicate the fundamental rights here involved by the prospect of having to pay their opponent's counsel fees should they lose. Richardson v. Hotel Corporation of America, 332 F. Supp. 519 (E.D.La.1971), aff'd, 468 F.2d 951 (5th Cir.1972). (A fee award to a defendant's employer, was held unjustified where a claim of racial discrimination, though meritless, was made in good faith.) Such a party, if unsuccessful, could be assessed his opponent's fee only where it is shown that his suit was clearly frivolous, vexatious, or brought for harassment purposes. United States Steel Corp. v. United States, 385 F. Supp. 346 (W.D.Pa.1974), aff'd, 9 E.P.D. p 10,225 (3d Cir.1975). This bill thus deters frivolous suits by authorizing an award of attorneys' fees against a party shown to have litigated in 'bad faith' under the guise of attempting to enforce the Federal rights created by the statutes listed in S. 2278." S.Rep. No. 94-1011, 94th Cong., 2d Sess. 4-5, reprinted in 1976 U.S.Code Cong. & Ad.News 5908, 5912 (emphasis supplied).
7
Similarly, the House Report on Sec. 1988 states:
8
"[T]he courts have developed a different standard for awarding fees to prevailing defendants because they do 'not appear before the court cloaked in a mantle of public interest.' United States Steel Corp. v. United States, 519 F.2d 359, 364 (3d Cir.1975). As noted earlier such litigants may, in proper circumstances, recover their counsel fees under H.R. 15460. To avoid the potential 'chilling effect' noted by the Justice Department and to advance the public interest articulated by the Supreme Court, however, the courts have developed another test for awarding fees to prevailing defendants. Under the case law, such an award may be made only if the action is vexatious and frivolous, or if the plaintiff has instituted it solely 'to harass or embarrass' the defendant. United States Steel Corp. v. United States, sean47@example.org. If the plaintiff is 'motivated by malice and vindictiveness,' then the court may award counsel fees to the prevailing defendant. Carrion v. Yeshiva University, 535 F.2d 722 (2d Cir.1976). Thus if the action is not brought in bad faith, such fees should not be allowed. See, Wright v. Stone Container Corp., 524 F.2d 1058 (8th Cir.1975); see also Richardson v. Hotel Corp. of America, 332 F. Supp. 519 (E.D.La.1971), aff'd without published opinion, 468 F.2d 951 (5th Cir.1972). This standard will not deter plaintiffs from seeking relief under these statutes, and yet will prevent their being used for clearly unwarranted harassment purposes." H.R.Rep. No. 94-1558, 94th Cong., 2d Sess. 6-7 (1976) (emphasis supplied).
9
Thus, Congress intended that prevailing defendants receive attorney's fees only when the plaintiff's action has been brought in "bad faith." This legislative history does not appear to have been considered by the Supreme Court in Hughes v. Rowe, 449 U.S. 5, 14, 101 S. Ct. 173, 178, 66 L. Ed. 2d 163 (1980), or in Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 422, 98 S. Ct. 694, 700, 54 L. Ed. 2d 648 (1978), a Title VII case relied on by the Court in Hughes. Nor was it considered by us in Harbulak v. County of Suffolk, 654 F.2d 194, 198 (2d Cir.1981). Nevertheless, I am persuaded that Congress intended to require only a showing of objective, not subjective, bad faith as the standard for awarding attorney's fees to prevailing defendants. Both legislative reports explain bad faith in part in terms of the frivolousness of the action and rely on United States Steel Corp. v. United States, 385 F. Supp. 346 (W.D.Pa.1974), aff'd, 519 F.2d 359 (3d Cir.1975), for support. In United States Steel Corp., the district court held that the plaintiff had not acted in bad faith because its action had not been "unfounded, meritless, frivolous, or vexatiously brought." Id. at 349. Accordingly bad faith must be defined in terms of whether the action was frivolous, meritless or vexatious, not whether the litigant's subjective state of mind indicated bad faith.
10
In the instant case, appellant's action against the State was brought in bad faith because it was completely frivolous as the court below found. The judgment awarding fees to the appellees is therefore properly affirmed.
|
353 F.3d 870
UNITED STATES of America, Plaintiff-Appellant,v.Gary Lionell BOLDEN, Defendant-Appellee.
No. 02-6249.
United States Court of Appeals, Tenth Circuit.
December 24, 2003.
COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED Arlene Joplin, Assistant United States Attorney (Robert G. McCampbell, United States Attorney, and Sue Tuck Richmond, Assistant United States Attorney, with her on the briefs), Office of the United States Attorney, Oklahoma City, OK, appearing for Appellant.
Paul Antonio Lacy, Assistant Federal Public Defender, Office of the Public Defender, Oklahoma City, OK, appearing for Appellee.
Before TACHA, Chief Circuit Judge, BRORBY, Senior Circuit Judge, and TYMKOVICH, Circuit Judge.
TACHA, Chief Circuit Judge.
1
On July 10, 2002, the United States District Court for the Western District of Oklahoma disqualified the entire office of the United States Attorney for the Western District of Oklahoma ("USA") from representing the government on Defendant Gary Lionel Bolden's motion to compel. The USA's office immediately appealed the disqualification. Pursuant to the collateral order doctrine under 28 U.S.C. § 1291, we take jurisdiction and REVERSE.
I. Background
2
On May 5, 1999, a grand jury indicted Mr. Bolden on seven drug-related counts. On July 19, 1999, he entered into a plea agreement in which he pleaded guilty to one count in exchange for the government dismissing the remaining charges. The agreement stated that the government, "in its sole discretion and by whatever means it deems appropriate, [would] evaluate Bolden's cooperation in determining whether a motion for downward departure under § 5K1.1 of the Sentencing Guidelines or a reduction of sentence under Rule 35(b), Federal Rules of Criminal Procedure is appropriate." It further stated that "the decision to make such a motion is likewise solely within the discretion of the United States, and that a negative decision will not allow a guilty plea to be withdrawn." The district court sentenced Mr. Bolden on November 9, 2000.
3
In December 2001, Mr. Bolden sent a letter to the USA's office, requesting that the government seek a reduction of his sentence. Assistant United States Attorney Jay Farber notified Mr. Bolden's counsel that the downward departure committee had elected not to seek a reduction of Mr. Bolden's sentence. An exchange of letters between Mr. Bolden's counsel and the USA's office followed.
4
On June 14, 2002, Mr. Bolden moved to compel the government to file a motion for reduction of sentence, alleging multiple instances of bad faith on the part of the government. The government filed a motion for extension of time to respond. The district court denied the request and entered an order sua sponte directing the government to respond to the question, "In view of Mr. Bolden's allegation, should the government's representation with regard to defendant's motion be provided by a United States Attorney from another judicial district?" Mr. Bolden then filed a motion to recuse the USA's office.
5
On July 10, 2002, the district court entered an order disqualifying the entire USA's office, directing it to arrange for an Assistant United States Attorney ("AUSA") from another district to respond to the original motion to compel, and ordering that the response could not simply reiterate AUSA Farber's earlier response. This appeal followed.
II. Discussion
A. Jurisdiction
6
"Section 1291 of Title 28 of the United States Code grants the courts of appeals ... jurisdiction of appeals from all final decisions of the district courts." Forney v. Apfel, 524 U.S. 266, 269, 118 S. Ct. 1984, 141 L. Ed. 2d 269 (1998) (quoting 28 U.S.C. § 1291) (internal citations omitted). A decision is "not final, ordinarily, unless it ends the litigation on the merits and leaves nothing for the court to do but execute judgment." See Cunningham v. Hamilton County, Ohio, 527 U.S. 198, 204, 119 S. Ct. 1915, 144 L. Ed. 2d 184 (1999) (internal quotations omitted). Thus, "[t]he law normally requires a defendant to wait until the end of the trial to obtain appellate review of a pretrial order." Sell v. United States, 539 U.S. 166, 123 S. Ct. 2174, 2182, 156 L. Ed. 2d 197 (2003).
7
The Supreme Court has, however, "interpreted the term `final decision' in § 1291 to permit jurisdiction over appeals from a small category of orders that do not terminate" a case. Cunningham, 527 U.S. at 204, 119 S. Ct. 1915. For a district court order to fall within the narrow confines of the collateral order doctrine, it must "(1) conclusively determine[] the disputed question, (2) resolve[] an important issue completely separate from the merits of the action, and (3) [be] effectively unreviewable on appeal from a final judgment." Sell, 123 S.Ct. at 2182.
8
The Supreme Court "ha[s] strictly applied this test when parties pursued immediate appeal of trial court rulings on motions to disqualify counsel." Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 431, 105 S. Ct. 2757, 86 L. Ed. 2d 340 (1985). The Court has held that neither a plaintiff nor a defendant in a civil case may immediately appeal a disqualification order. Koller, 472 U.S. at 431, 105 S. Ct. 2757 (plaintiff); Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 370, 101 S. Ct. 669, 66 L. Ed. 2d 571 (1981) (defendant). Similarly, the Court has held that a criminal defendant may not immediately appeal a pretrial order disqualifying his counsel. Flanagan v. United States, 465 U.S. 259, 260, 104 S. Ct. 1051, 79 L. Ed. 2d 288 (1984). The Court has yet to consider the immediate appealability of an order disqualifying an individual prosecutor or an entire United States Attorney's office.
9
In conducting our analysis, we are mindful that "[i]n fashioning a rule of appealability under § 1291 ... we [must] look to categories of cases, not to particular injustices." Van Cauwenberghe v. Biard, 486 U.S. 517, 529, 108 S. Ct. 1945, 100 L. Ed. 2d 517 (1988); see also Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 868, 114 S. Ct. 1992, 128 L. Ed. 2d 842 (1994) ("[T]he issue of appealability under § 1291 is to be determined for the entire category to which a claim belongs, without regard to the chance that the litigation at hand might be speeded, or a `particular injustic[e]' averted by a prompt appellate court decision.") (citation omitted); United States v. McVeigh, 106 F.3d 325, 332 n. 6 (10th Cir.1997) (noting that courts must decide the appealability of orders as a class, not based on the distinctive circumstances of each case). Thus, we address whether the government may immediately appeal an order disqualifying an entire United States Attorney's office from post-conviction proceedings.1 This issue is a matter of first impression for our court.
10
1. Conclusively Determines The Disputed Issue
11
We must first determine whether the disqualification order conclusively determines the disputed issue. United States v. Deters, 143 F.3d 577, 581 (10th Cir.1998). We look to the challenged order itself and the entire record to determine if the district court's order conclusively settles the disputed issue. Id. (looking to the record to determine whether the order conclusively settled a matter); see also Pindus v. Fleming Cos., Inc., 146 F.3d 1224, 1226 (10th Cir.1998) (looking to the plain language of an order to determine its finality).
12
A review of the record in this case makes clear that the district court does not intend to revisit its disqualification decision and that its order prohibits the USA's office from representing the government in all matters related to Mr. Bolden's motion. We thus find that the disqualification order conclusively determines that the USA's office may not represent the government in Mr. Bolden's effort to force the government to file a request for a reduction of sentence.
13
We find Mr. Bolden's objections on this point unpersuasive. Mr. Bolden argues that the order is not conclusive because it does not prohibit the USA's office from participating in "the future," although he does not identify what future events he envisions. The disqualification order states that it disqualifies the USA's office from representing the government on the motion to compel. We read this to include all matters relating to the motion to compel. We therefore reject Mr. Bolden's argument that the order is not conclusive because the USA's office may participate in some undefined future event unconnected to the current dispute.
14
2. An Important Issue Separate From The Merits Of The Underlying Action
15
We next consider whether the order (1) resolves an important issue (2) that is completely separate from the merits. Deters, 143 jamesdunlap@example.org. Disqualifying the entire USA's office from representing the government raises important separation of powers issues. United States v. Silva-Rosa, 275 F.3d 18, 22 (1st Cir.2001) (finding that disqualification of government attorneys can "trigger weighty separation of powers concerns"). These concerns are undoubtedly jurisprudentially important. United States v. Whittaker, 268 F.3d 185, 192 (3d Cir.2001) (finding that an order disqualifying a United States Attorney's office from a criminal prosecution is "a jurisprudentially important issue"). Mr. Bolden admits as much in his brief.
16
In judging separability, we consider whether such disqualification orders are so "enmeshed in the factual and legal issues comprising" the underlying action, see Coopers & Lybrand v. Livesay, 437 U.S. 463, 469, 98 S. Ct. 2454, 57 L. Ed. 2d 351 (1978) (internal quotation marks omitted), that interlocutory review will force an appellate court to consider the same or similar issues more than once, Johnson v. Jones, 515 U.S. 304, 311, 115 S. Ct. 2151, 132 L. Ed. 2d 238 (1995). We conclude that, on the whole, orders disqualifying an entire United States Attorney's office are separate from the underlying issues.
17
In reaching this conclusion, we are strongly influenced by the fact that we can only rarely — if ever — imagine a scenario in which a district court could properly disqualify an entire United States Attorney's office. Indeed, "[t]he disqualification of Government counsel is a drastic measure[,]" Bullock v. Carver, 910 F. Supp. 551, 559 (D.Utah 1995) (citing cases), and even "where it is shown that an Assistant United States Attorney is subject to a conflict of interest, the proper remedy [generally] is to remove that individual, not all of the attorneys in the district, from the case[,]" Crocker v. Durkin, 159 F. Supp. 2d 1258, 1284-85 (D.Kan.2001). Thus, because disqualifying an entire United States Attorney's office is almost always reversible error regardless of the underlying merits of the case, a reviewing court will rarely have to delve into the underlying claim to conclude that the disqualification was unwarranted.
18
The Supreme Court's rulings in Flanagan and Koller, which held respectively that a civil plaintiff and a criminal defendant may not challenge disqualification orders on interlocutory appeal, are inapposite. Here, the district court disqualified the prosecutor—indeed the entire USA's office. Such an order implicates separation of powers concerns that were not at issue in Flanagan and Koller. See Whittaker, 268 F.3d at 196 n. 6 (noting separation of powers concerns in disqualifying an entire United States Attorney's office, but reversing the disqualification on other grounds).
19
Further, the unique nature of the separation of powers concerns that are relevant to this appeal renders the prejudice-related separability concerns of Flanagan and Koller inapplicable. The Flanagan and Koller Courts held that the parties could not immediately appeal their disqualification orders, in part, because a court could not determine the propriety of the order without considering whether the parties suffered prejudice, which requires consideration of the underlying merits of the case. See Flanagan, 465 U.S. at 268-69, 104 S. Ct. 1051 (finding that the disqualification appeal and the underlying dispute were intertwined); Koller, 472 U.S. at 439, 105 S. Ct. 2757 (finding that an order disqualifying individual attorneys in a civil case was not directly appealable, in part, because such a review would likely require an examination of the merits of the underlying litigation). In contrast, the current appeal — and most appeals from the disqualification of an entire United States Attorney's office — will raise separation of powers injuries that will allow a court to evaluate the order without reaching the issue of prejudice.
20
Despite these considerations, Mr. Bolden urges us to find that, in this case, "the issue of the government's representation is inextricably intertwined and entangled in the merits of Mr. Bolden's claims." This argument, however, overlooks that the Court has "consistently eschewed a case-by-case approach to deciding whether an order is sufficiently collateral." Cunningham, 527 U.S. at 206, 119 S. Ct. 1915. Every appeal that has considered the disqualification of an entire United States Attorney's office has found the disqualification issue to be entirely separate from the merits of the underlying case. See Whittaker, 268 F.3d at 192 ("the [disqualification] order unquestionably resolves a jurisprudentially important issue completely separate from the merits of the dispute concerning whether Whittaker committed mail fraud"); United States v. Vlahos, 33 F.3d 758, 761 (7th Cir.1994) (holding that the disqualification order is "an issue completely independent of the merits of the action"); United States v. Caggiano, 660 F.2d 184 (6th Cir.1981) (finding that the disqualification order "was separable from, and collateral to the merits of the main proceeding") (internal quotations omitted). Thus, even if the issues in the underlying dispute in this case were to overlap with the disqualification order, an issue we do not reach today, we find that on the whole such orders would satisfy the separability requirement.
21
3. Effectively Unreviewable On Appeal From A Final Order
22
Finally, we must consider whether such disqualification orders are "effectively unreviewable on appeal from final judgment." Coopers & Lybrand, 437 U.S. at 468, 98 S. Ct. 2454. An order is effectively unreviewable on appeal "where the order at issue involves `an asserted right the legal and practical value of which would be destroyed if it were not vindicated before trial.'" Midland Asphalt Corp. v. United States, 489 U.S. 794, 799, 109 S. Ct. 1494, 103 L. Ed. 2d 879 (1989) (quoting United States v. MacDonald, 435 U.S. 850, 860, 98 S. Ct. 1547, 56 L. Ed. 2d 18 (1978)).
23
Applying this standard in most criminal litigation leads to the conclusion that the government cannot effectively vindicate its rights on appeal after a final judgment. If it loses at trial, the Double Jeopardy Clause will likely prohibit review. See, e.g., Montoya v. New Mexico, 55 F.3d 1496, 1498 (10th Cir.1995). If the government prevails at trial, it will generally lack standing as a prevailing party to appeal the decision. See, e.g., Jarvis v. Nobel/Sysco Food Serv. Co., 985 F.2d 1419, 1424 (10th Cir.1993) (stating that "it is the general rule that a party cannot appeal from a judgment in his favor"). The government asks us to find that the same holds true in this case.
24
The government's argument, however, overlooks the fact that the current dispute does not implicate the Double Jeopardy Clause. That clause "provides three separate protections for criminal defendants: against prosecution for the same offense after an acquittal, against prosecution for the same offense after a conviction, and against multiple punishments for the same offense." Montoya, 55 jamesdunlap@example.org. Because the current action is not a true criminal proceeding, but merely a dispute over whether the government has honored its obligations under the plea agreement, this matter does not implicate any of the protections provided by the Double Jeopardy Clause. Therefore, the government's argument on this matter is unpersuasive.
25
Nevertheless, we find that an appeal following an adverse ruling on the merits would not effectively vindicate the alleged harm. On this point, the government argues that the true harm from disqualification is grounded in separation of powers. It points out that Congress has mandated that the United States Attorney for each district represent the government in all cases occurring within that district. See 28 U.S.C. § 547. Further, although not noted by the government, the Constitution grants the Executive the power to "take care that the laws are faithfully executed." U.S. Const. art. II, § 3. Although caselaw is admittedly vague on the exact scope of this power, it is clear that this constitutional provision vests the Executive with substantial discretion in choosing when and how to prosecute cases. See, e.g., United States v. Andersen, 940 F.2d 593, 596 (10th Cir.1991) (holding that the Constitution vests prosecutors with significant discretion in choosing when and how to prosecute); United States v. Cox, 342 F.2d 167, 171 (5th Cir.1965) (en banc) ("It follows, as an incident of the constitutional separation of powers, that the courts are not to interfere with the free exercise of the discretionary powers of the attorneys of the United States in their control over criminal prosecutions."); Matter of Grand Jury Subpoena of Rochon, 873 F.2d 170, 174 (7th Cir.1989) ("As a threshold matter, a court may not exercise any supervisory power [over the Executive] absent a clear basis in fact and law for doing so.... A federal court that imposes sanctions on executive conduct that is otherwise permitted by the Constitution, a federal statute or a rule will most likely be invading the executive sphere....") (internal quotations omitted).
26
Because the alleged injury is grounded in separation of powers, we find that appellate vindication would not effectively remedy the alleged harm. In doing so, we have fully considered the teachings of Flanagan, but find them inapposite. In Flanagan, the Supreme Court rejected interlocutory appellate review, in part, because it found that the defendant could obtain effective post-trial relief from the improper disqualification of his counsel because post-trial reinstatement of his counsel would remedy any injury he suffered. Flanagan, 465 U.S. at 267-68, 104 S. Ct. 1051.
27
In this case, however, no posttrial relief exists that could remedy the alleged separation of powers injury that would be incurred through wrongful disqualification of the entire USA's office. The separation of powers doctrine, which acts as a "safeguard against the encroachment or aggrandizement of one branch at the expense of the other," Buckley v. Valeo, 424 U.S. 1, 122, 96 S. Ct. 612, 46 L. Ed. 2d 659 (1976), confers on each branch "the ability ... to be vigorous in asserting its proper authority[,]" Clinton v. City of New York, 524 U.S. 417, 452, 118 S. Ct. 2091, 141 L. Ed. 2d 393 (1998) (Kennedy, J. concurring). The interests protected by the doctrine simply will not abate during the possibly lengthy resolution of this matter, and appellate vindication cannot undo such an invasion of Executive authority. Therefore, mindful of the fact that "[l]iberty is always at stake when one or more branches seek to transgress the separation of powers[,]" id., we conclude the USA's office may immediately appeal the disqualification order.2
B. Merits
28
Having established jurisdiction to hear this appeal, we now consider whether the district court erred by disqualifying the entire USA's office. Like the jurisdictional issue, this is a matter of first impression for our court.
29
We review attorney disqualification orders under a bifurcated standard of review. First, we review the district court's factual conclusions under a clear error standard. United States v. Collins, 920 F.2d 619, 628 (10th Cir.1990). Second, we review the district court's legal interpretation of particular ethical norms under a de novo standard when that interpretation implicates important constitutional rights. Id. (applying de novo review when disqualification implicates the Sixth Amendment right to counsel). De novo review is especially appropriate "in disqualification cases ... where the facts are not in dispute, [because] district courts enjoy no particular functional advantage over appellate courts in their formulation and application of ethical norms." Id. (internal citations omitted). Thus, because the current disqualification order implicates important constitutional principles and the district court did not base its order on highly disputed facts, we review the order under the de novo standard of review. See id.
30
"The disqualification of Government counsel is a drastic measure and a court should hesitate to impose it except where necessary." Bullock, 910 F.Supp. at 559. Courts have allowed disqualification of government counsel in limited circumstances. See, e.g., Young v. United States, 481 U.S. 787, 807, 107 S. Ct. 2124, 95 L. Ed. 2d 740 (1987) (actual conflict of interest because appointed prosecutor also represented another party); United States v. Heldt, 668 F.2d 1238, 1275 (D.C.Cir.1981) (bona fide allegations of bad faith performance of official duties by government counsel in a civil case); United States v. Prantil, 764 F.2d 548, 552-53 (9th Cir.1985) (prosecutor who will act as a witness at trial). Further, because disqualifying government attorneys implicates separation of powers issues, the generally accepted remedy is to disqualify "a specific Assistant United States Attorney..., not all the attorneys in" the office. Crocker, 159 jamesdunlap@example.org. In light of these principles, every circuit court that has considered the disqualification of an entire United States Attorney's office has reversed the disqualification. See Whittaker, 268 F.3d 185 (3d Cir.2001); Vlahos, 33 F.3d 758 (7th Cir.1994); Caggiano, 660 F.2d 184 (6th Cir.1981).
31
Noting these important principles, we reverse the disqualification order for several reasons. First, the district court wrote an extremely short disqualification order, containing a paucity of facts to indicate either misconduct in the representation or any alleged conflicts of interest on the part of the entire USA's office. Cf. Collins, 920 F.2d at 628 (requiring the district court to make substantial findings on the record to justify disqualification of defense counsel). Indeed, the order itself discounts several probable bases for disqualifying even individual attorneys in the office. It reads, "[R]egardless of whether [AUSA] Farber may become a witness or may have an actual conflict of interest, the Court finds that the government's response to Mr. Bolden's motion to compel should be prepared by counsel from another United States Attorney's office" to preserve objectivity. Thus, rather than extensively analyzing any alleged misconduct in the representation or conflicts of interest on the part of the entire USA's office, the district court merely concluded that the USA's office was "too close to the case to advocate effectively the government's position."3 Finally, the district court did not indicate that it even considered the separation of powers concerns implicated by the disqualification order.
32
Further, to support the disqualification, the district court cited United States v. Berger, 251 F.3d 894, 907 (10th Cir.2001), out of context. When read in full, it does not support the disqualification:
33
During oral arguments in this case, the panel asked counsel whether it was appropriate for attorneys who had testified as witnesses in the district court to argue the case on appeal. This concern was raised in light of standards such as Rule 3.7 of the Rules of Professional Conduct, adopted by the Oklahoma Supreme Court. See 5 O.S.2000, Ch. 1, App. 3-A.... Although the rule thus does not appear to bar counsel's representation in the instant appeal, we note the dual roles of the attorneys in this case have made the determination of the appeal more difficult.... In such circumstances, we think attorneys should consider whether it would be wiser to have different counsel handle the appeal, so as to keep separate the roles of attorney and witness, to preserve the ability of counsel to remain objective, and to avoid any potential conflict of interest between the attorney and the client. Id. at 906-07 (emphasis added).
34
Reading Berger in context makes clear that its suggestion — that attorneys should consider potential conflicts caused by possible violations of specific ethical rules — does not support dismissing the entire USA's office without basing this action on clearly stated ethical violations for each attorney.
35
Indeed, in light of the serious ethical allegations and constitutional issues involved in such cases, we stress that the district court must make attorney-specific factual findings and legal conclusions before disqualifying attorneys from the USA's office. See Fullmer v. Harper, 517 F.2d 20, 22 (10th Cir.1975) ("[T]he trial court should ... make specific findings and conclusions [before disqualification], to the end that this court will then have a record before it which will permit a meaningful review, should review be sought."). The record before us does not indicate that the district court made such findings in this case.
III. Conclusion
36
For the foregoing reasons, we REVERSE the district court's disqualification order. Appellee's motion to dismiss is denied.
Notes:
1
We acknowledge that disqualifying an entire United States Attorney's office differs materially from disqualifying an individual prosecutor for purposes of the collateral order doctrine. Accordingly, this opinion does not address whether the government may immediately appeal an order disqualifying one or more prosecuting attorneys
2
Because we find that we have jurisdiction to hear this appeal under the collateral order doctrine, we do not reach the government's mandamus argumentSee In re Kozeny, 236 F.3d 615, 618 (10th Cir.2000) (If a "court has before it both an appeal and a petition for mandamus, as in this case, and the order is properly reviewable by way of appeal, the court must review the [order] through appeal rather than mandamus.").
3
From reading this statement, it appears that the district court disqualified the USA's office, at least in part, because it believed that the office would not provide effective counsel for the government. This concern seems misplaced. First, we can presume that, in most cases, the Executive is in a better position than a judge to decide who can best represent its position. Second, even if the USA's office did not effectively represent the government, we cannot see how that would harm Mr. Bolden. Presumably, if the USA's office is an ineffective advocate, Mr. Bolden will obtain his desired relief. Thus, at least in this case, such concern for the government by the district court is misplaced
|
I
112th CONGRESS
2d Session
H. R. 6472
IN THE HOUSE OF REPRESENTATIVES
September 20, 2012
Mr. Neal (for
himself, Mr. McDermott,
Mr. Lewis of Georgia,
Mr. Blumenauer,
Mr. Kind, and
Mr. Ellison) introduced the following
bill; which was referred to the Committee
on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to expand the
availability of the saver’s credit, to make the credit refundable, and to make
Federal matching contributions into the retirement savings of the
taxpayer.
1.Short titleThis Act may be cited as the
Savings for American Families’ Future
Act of 2012.
2.Modification of
saver’s credit
(a)50 percent
credit for all taxpayers: expansion of phaseout rangesSubsection
(b) of section 25B of the Internal Revenue Code of 1986 is amended to read as
follows:
(b)Applicable
percentageFor purposes of this section—
(1)In
generalExcept as provided in paragraph (2), the applicable
percentage is 50 percent.
(2)PhaseoutThe
percentage under paragraph (1) shall be reduced (but not below zero) by the
number of percentage points which bears the same ratio to 50 percentage points
as—
(A)the excess
of—
(i)the taxpayer’s
adjusted gross income for such taxable year, over
(ii)the applicable
dollar amount, bears to
(B)the phaseout
range.
If any
reduction determined under this paragraph is not a whole percentage point, such
reduction shall be rounded to the nearest whole percentage point.(3)Applicable
dollar amount; phaseout range
(A)Joint
returnsExcept as provided in subparagraph (B)—
(i)the applicable
dollar amount is $65,000, and
(ii)the phaseout
range is $20,000.
(B)Other
returnsIn the case
of—
(i)a head of a household (as defined in
section 2(b)), the applicable dollar amount and the phaseout range shall be
3/4 of the amounts applicable under subparagraph (A) (as
adjusted under paragraph (4)), and
(ii)any taxpayer who is not filing a joint
return and who is not a head of a household (as so defined), the applicable
dollar amount and the phaseout range shall be ½ of the
amounts applicable under subparagraph (A) (as so adjusted).
(4)Inflation
adjustment of applicable dollar amountIn the case of any taxable year beginning
in a calendar year after 2012, the dollar amount in paragraph (3)(A)(i) shall
be increased by an amount equal to—
(A)such dollar
amount, multiplied by
(B)the cost-of-living
adjustment determined under section 1(f)(3) for the calendar year in which the
taxable year begins, determined by substituting calendar year
2011 for calendar year 1992 in subparagraph (B)
thereof.
Any
increase determined under the preceding sentence shall be rounded to the
nearest multiple of
$500..
(b)Credit made
refundable; matching contributions
(1)Credit made
refundableThe Internal
Revenue Code of 1986 is amended by moving section 25B to subpart C of part IV
of subchapter A of chapter 1 of such Code (relating to refundable credits), by
inserting section 25B after section 36B, and by redesignating section 25B as
section 36C.
(2)Matching
contributionsSubsection (g) of section 36C of such Code, as
redesignated by paragraph (1), is amended to read as follows:
(g)Matching
contributions
(1)In
generalThe credit allowed to
an eligible individual under this section for any taxable year shall be twice
the credit which would (but for this subsection) be allowed if—
(A)the individual
consents to the application of paragraph (2), and
(B)a designation by
such individual is in effect for such year under paragraph (3).
(2)Credit paid into
designated retirement accountAny increase in credit under
paragraph (1) for any taxable year shall be paid by the Secretary into the
designated retirement account of the individual for such year. The amount
payable under the preceding sentence shall be subject to the reductions under
section 6402 in the same manner as if such amount were an overpayment. The
amount so paid shall be treated as refunded to such individual.
(3)Designated
retirement accountFor purposes of this subsection, the term
designated retirement account means any account or plan—
(A)of a type to which
qualified retirement savings contributions may be made,
(B)which is for such
individual’s benefit, and
(C)which is
designated by such individual (in such form and manner as the Secretary may
provide) on the return of tax for the taxable year.
(4)Treatment of
matching contributionsIn the case of an amount paid under
paragraph (2) into a designated retirement account—
(A)any dollar
limitation otherwise applicable to the amount of contributions or deferrals to
such account shall be increased by the amount so paid,
(B)the individual’s
basis in such account shall not be increased by reason of the amount so paid,
and
(C)such amount shall
be treated as an employer contribution for the plan year in which such amount
is paid for purposes of—
(i)section 401(k)(3),
and
(ii)section
408(k)(6)(A)(iii).
(5)RegulationsThe Secretary shall prescribe such
regulations or other guidance as may be necessary to address situations under
which the Secretary is not able to make a payment to a designated retirement
account of an individual, including a plan of an employer for which the
individual no longer works and to an account that does not
exist.
.
(3)Conforming
amendments
(A)Sections 24(b)(3)(B), 25(e)(1)(C),
26(a)(1), and 1400C(d) of such Code are each amended by striking
25B,.
(B)The last sentence
of section 25A(i)(5) of such Code is amended by striking 25B and
inserting 36C.
(C)Sections 904(i) of
such Code is amended by striking 23, 24, and 25B, and inserting
23 and 24.
(D)Section 6211(b)(4)(A) of such Code is
amended by inserting 36C, after 36B,.
(E)The table of
sections for subpart A of part IV of subchapter A of chapter 1 of such Code is
amended by striking the item relating to section 25B.
(F)The table of
sections for subpart C of such part is amended by adding at the end the
following new item:
Sec. 36C. Elective deferrals and IRA
contributions by certain
individuals.
.
(G)Section 1324(b)(2)
of title 31, United States Code, is amended by inserting 36C,
after 36B,.
(c)Maximum
contributionsSubsection (a) of section 36C of such Code, as
redesignated by subsection (b), is amended to read as follows:
(a)Allowance of
credit
(1)In
generalIn the case of an eligible individual, there shall be
allowed as a credit against the tax imposed by this subtitle for the taxable
year an amount equal to the applicable percentage of so much of the qualified
retirement savings contributions of the eligible individual for the taxable
year as do not exceed the contribution limit.
(2)Contribution
limitFor purposes of
paragraph (1)—
(A)In
generalExcept as otherwise provided in this paragraph, the
contribution limit is $500 ($1,500 for taxable years beginning after
2022).
(B)Annual increases
to reach $1,500In the case of taxable years beginning in a
calendar year after 2012 and before 2023, the contribution limit shall be the
sum of—
(i)the contribution
limit for taxable years beginning in the preceding calendar year (as increased
under this subparagraph), and
(ii)$100.
(C)Inflation
adjustmentIn the case of any
taxable year beginning in a calendar year after 2022, the $1,500 amount in
subparagraph (A) shall be increased by an amount equal to—
(i)such dollar
amount, multiplied by
(ii)the
cost-of-living adjustment determined under section 1(f)(3) for the calendar
year in which the taxable year begins, determined by substituting
calendar year 2021 for calendar year 1992 in
subparagraph (B) thereof.
Any
increase determined under the preceding sentence shall be rounded to the
nearest multiple of
$50..
(d)Effective
dateThe amendments made by this section shall apply to taxable
years beginning after December 31, 2012.
|
Title: Editing lease for puppy adoption
Question:I'm trying to adopt a puppy and all my local rescues require me to jump through hoops like I'm a circus animal. I found one that will accept a copy of my lease, instead of talking with the condo management over the phone.
The problem? According to my condo lease, I'm not supposed to have a puppy under 1 year old. This rule is in place because of the fear of accidents in the unit.. As if older dogs don't have accidents, too.
Could there be any repercussions with my condo management if I remove the part of the sentence in my lease stating I can have a dog as long as it is over 1 year old? I am not worried about them finding out that I have the puppy, as there are several others in my complex that are out walking dogs under 1 year old and management hasn't evicted them.
Answer #1: For starters, if they find out you have a dog under a year old, they can either require you to get rid of the dog or evict you. If the rescue organization follows up with your landlord or otherwise finds out, they can take the dog back. |
There was no express warranty by the defendants of the sufficiency of the belt for the use made of it, and none can be implied. "Where a known, described, and defined article is ordered of a manufacturer, although it is stated to be required by the purchaser for a particular purpose, still if the known, defined, and described thing be actually supplied, there is no [implied] warranty that it shall answer the particular purpose intended by the buyer." Benj. Sales, s. 657; Chanter v. Hopkins, 4 M. W. 399; Ollivant v. Bayley, 5 Q.B. 288; Wilson v. Lawrence, 139 Mass. 318, 321; Jones v. Just, L.R. 3 Q.B. 197, 202. The plaintiffs directed the size and method of constructing the belt. They relied upon their own judgment, not upon that of the manufacturers. 1 Par. Cont. 470; Prideaux v. Bunnett, 1 C. B. N. S. 613; Whitmore v. Iron Co., 2 Allen 52.
The plaintiffs' action is brought to recover damages for injuries caused to them, as they say, by the defendants' negligence. It differs from the ordinary action instituted for that purpose in no particular except in the method of proof by which some of the material facts are established. Here, as in all similar cases, the plaintiffs must show that the injuries complained of were not caused by their own negligence, but were caused by that of the defendants. They must prove that by the exercise of ordinary care they could not, and the defendants could, have prevented the accident.
Except as evidence, the judgment in Levesque's action against the plaintiffs is immaterial. Its sole effect is to relieve the parties from the burden of proving or disproving the facts therein litigated and determined. Upon those facts both parties are concluded by the judgment. But it is neither conclusive nor evidence that the accident happened by reason of a defect in the belt, or of the defendants' negligence in repairing it. That is a question which was not adjudicated in that action; and from the nature of the case it could not be if taken alone and of itself. If Levesque had alleged the defective belt as the sole ground of his action, in order to entitle him to a verdict he must have proved not only that the belt was defective, but also that Gregg Son knew or by ordinary care would have known that fact, or that they negligently employed improper and unskillful persons to make the repairs. Clark v. Barrington,41 N.H. 44, 52; Roughan v. Company, 161 Mass. 24, 26, and cases cited. A judgment in his favor on such grounds would be conclusive against the plaintiffs' right to maintain this action. It would be conclusive that the accident was in part caused by their negligence in using the belt. There was no evidence tending to show that they knew or *Page 250
by the exercise of due care could have discovered the defect in the belt, or that the Belting Company were not competent and skillful repairers of belts. It was for this reason, doubtless, that either Levesque's counsel abandoned the defect in the belt as a ground of recovery, or the court withdrew it from the consideration of the jury.
Under the instructions of the court, the jury must necessarily have found (1) that Levesque was without fault; (2) that Gregg Son were negligent, either in making use of a cemented belt, or in not providing safety appliances, or in both these particulars; and (3) that as compensation for his injuries Levesque was entitled to the sum assessed as damages. The judgment is no more conclusive on one point than the other. The estoppel is mutual. If these defendants are concluded on the questions of Levesque's innocence and the amount of damages, so also are these plaintiffs concluded on the question of their own negligence. These questions appeared on the face of the pleadings, and have been fully and fairly tried. Both these parties had equal opportunities to obtain and present all the evidence bearing upon them that existed, and presumably all such evidence was produced, heard, and considered. The judgment, therefore, is conclusive upon both the present parties, not only that Levesque was without fault and on the question of his damages, but also that the accident was due to the plaintiffs' negligence in using for their elevator a cemented belt, or in not providing proper safeguards, or in both particulars. The question is whether, upon the established facts and upon the finding of a jury that the belt was defective by reason of the defendants' negligence in repairing it, and that but for such defect the accident would not have happened, the plaintiffs can recover. If they can, the verdict must be set aside; otherwise, it must stand. In considering the question it must be assumed that a jury would so find. It is to be taken as an established fact that but for the defendants' negligence the accident would not have occurred.
The law looks at the situation and conduct of the parties at the time of the injury. The accident was the direct and immediate result from the defective and dangerous condition of the elevator. In the aspect of the case most favorable to the plaintiffs, this condition was created by the antecedent and concurring negligence of both parties, and at the time of the accident neither of them could have prevented it by the exercise of ordinary care. It is established by the judgment that the dangerous situation would not have existed if the plaintiffs had exercised ordinary care. Neither, as must be assumed, would it have existed if the defendants had exercised like care. Ordinary care on the part of either party would have prevented the injury. In such a case neither can recover of the other. They are equally in fault. *Page 251
Proof by the plaintiffs that ordinary care on the part of the defendants would have rendered the elevator safe does not entitle them to recover, because a like degree of care on their part would have had the same effect. Company v. Railroad, 62 N.H. 159, 164, 165; Churchill v. Holt,127 Mass. 165; S.C., 131 Mass. 67, 69.
It is to be borne in mind that the question here is not whether Levesque could have recovered of these defendants had he elected to sue them. That he might have so recovered may be conceded. In such a suit it would be no answer for them to show that Gregg Son were also guilty of negligence which contributed to cause the accident. A traveler is not precluded from recovering against a town by proof that a defect in his carriage, not known to or discoverable by him, contributed to cause the accident. Clark v. Barrington, 41 N.H. 44. He might recover of the manufacturers, if their negligence caused the defect, as well as against the town; but it is not probable that any one would contend that the town could recover indemnity or contribution from the manufacturers, or the manufacturers from the town. So here, the sole question now is whether one of two parties can recover of the other damages which he has been compelled to pay for an injury caused by the co-operating negligence of each of them. The relative or comparative influence or effect of the negligence of one or the other is immaterial. The common law does not recognize the doctrine of comparative negligence. If in any degree, however small, the negligence of one co-operates with that of the other, each is equally responsible for the injury thereby caused to a third person. It is, and on principle must be, the universal doctrine that where each of two parties is severally liable for an injury caused in part by his own negligence, neither can recover of the other any portion of the damages he may have been compelled to pay.
It is said "that a person using a machine which he knows to be dangerous can recover of the party responsible, for an injury received, not from the known dangerous character of the machine, but through a secret and unusual defect, of which the injured party did not know and which due care would not have disclosed to him." This may be conceded. Undoubtedly, if Gregg
Son could show that the accident was in no part caused by the improper and dangerous use to which the belt was put, but wholly by the defect therein created by the defendants' negligence, and which due care would not disclose to them, they could recover. Their trouble is that they cannot show it. It is already conclusively established by the Levesque judgment that their negligent and improper use of the belt did at the least contribute to cause the injury. If they had given the Belting Company no notice of the Levesque suit, or if for any reason they were not *Page 252
concluded by that judgment (Hanover v. Dewey, 58 N.H. 485), a very different case would be presented. All questions would then be open, and it would be competent for the jury to find that the accident was caused wholly by the defect in the belt; but it would none the less be the duty of the court to instruct them that if they should find that Gregg Son negligently put the belt to a use for which they knew it to be unfit, and this negligence contributed in any degree to cause the injury, their verdict must be for the defendants.
A employs B to make him a gun. Through B's negligence it has a secret defect. A negligently overloads it, and it bursts and injures him. A may recover his damages of B if he can convince a jury that the defect was the exclusive cause of the bursting, and not otherwise. If the excessive charge caused or contributed to cause the bursting, he cannot recover. If C, a bystander, is injured by the bursting gun and brings his action therefor against A, it is enough for him to show, in order to recover, that the negligent excessive charge contributed — co-operated with the defect — to cause the injury. If it was caused wholly by the secret defect, he could not recover against A. Whether he could recover against B is a question on which the authorities jill15@example.net. If in the suit, C v. A, A should notify B of the action and request him to defend it, A would gain the advantage of having B concluded upon the questions of C's care and the amount of his damages; but on the other hand, he would himself be concluded upon the question of his own fault. If the nature of the suit was different such a result would not follow. If A was sued as a master for the negligence of his servant, it would be prudent to give notice of the suit to the servant, because in the subsequent suit against him the servant could not contest the due care of the party injured, the amount of damages, nor his own negligence in causing the injury. Such a case would stand like a suit against a sheriff for official wrongs committed by his deputy. So, also, in actions against towns for damages to a traveler caused by incumbrances unlawfully placed in the highway by some one, and, as the town claims, by A. If A is notified of the suit against the town, in a subsequent suit brought by the town against him he is concluded by the former judgment on every material question except whether he caused the incumbrance complained of. This question is still open, because in the suit against the town it was immaterial whether A or some one else put the incumbrance in the road. The town, notwithstanding its negligence in law in not removing the nuisance created by A, is not in pari delicto with him. Although in fact guilty of no negligent act, the law makes the town responsible to the traveler for the negligence of A, as it makes the master responsible for the negligence of his servant. *Page 253
An altogether different case is presented when the first action can only be maintained upon a showing of the defendants' personal and actual negligence. In such a case the plaintiff can recover only upon a showing that the defendants themselves were actual wrongdoers. If that fact is conclusively established, it is certain that they can recover over against nobody. A notice in that case to a joint tort-feasor, to one even whose fault chiefly contributed to cause the injury, would be worse than useless, — it would insure him immunity. The reason for the different results is the essentially different nature of actual and constructive negligence, — of wrongdoing in fact and wrongdoing imputed by law. The fact that a course of procedure appropriate for use only in cases of constructive negligence has been adopted in a case where actual negligence is charged, cannot change the law.
It is urged that "the result of the doctrine announced is that the information from Gregg that an elevator belt was wanted, instead of calling on them for carefulness to make a belt at least as strong as for ordinary purposes, was a license to them to make as poor a belt as they could. An application of abstract principles which produces such a result seems erroneous." This suggestion at once falls to the ground when it is considered that Levesque might have brought his action against the Belting Company and recovered of them his damages, and that they in that case could have recovered neither indemnity nor contribution of Gregg. Their escape from the consequences of their negligence is accidental, as that of any one of twenty willful fellow-trespassers may be. It might as well be argued that the law forbidding contribution between wrongdoers offers an inducement to one to engage with others in unlawful enterprises, in that it gives him a chance of escaping all liability. In short, it is a criticism of the universally accepted law that there can be no contribution between actual wrongdoers.
Exception overruled.
BLODGETT, CHASE, and WALLACE, JJ., did not sit: PARSONS, J., dissented: the others concurred. *Page 254 |
At about 11:45 o'clock in the evening of May 13th, 1913, in front of No. 239 Mulberry street in the city of New York, an atrocious crime was *Page 183
committed. One Rizzo, a man about twenty-two years of age, one Heaney, a police officer, and one Teare, a police officer, were the victims. The three persons named were shot, one immediately following the other, and all died as a result thereof. It is asserted by the People that the three men were slain by one and the same person.
The defendant was indicted and tried for the murder of Officer Heaney. The trial resulted in a conviction of murder in the first degree on the 6th day of March, 1914. From the judgment of conviction an appeal was taken to this court. Pending that appeal, and between the 8th and 11th days of March, 1915, five witnesses called by the prosecution upon the trial, whose testimony the People relied upon for a conviction, severally made statements, which they subscribed and to the correctness of which an oath was administered, to representatives of the New YorkWorld at the office of that newspaper, in which statements (to which reference will be hereafter made) they in effect asserted that the evidence given by them upon the trial of the defendant was false. Upon an affidavit of counsel for defendant, referring to the statements, copies of the same, and an affidavit of a representative of the newspaper, application for a new trial was made to the justice who presided at the trial. The motion papers asked that the witnesses be summoned before him for examination. The application was opposed by the People, and amongst other affidavits in opposition to the application, the district attorney presented an affidavit made by one Chieffo, one of the witnesses who had made a statement to the representative of theWorld, in substance that the evidence given by him upon the trial was true and the statement made by him at the office of the New York World was false and made through fear. The justice to whom the application was made denied the request to compel the attendance of the witnesses in court for examination and denied the application for a new trial. From the order entered appeal was taken to this court. *Page 184
Immediately following the publication of the statement in theWorld the witnesses were separately taken to the rooms of the Bar Association in the city of New York, where they were severally interrogated at length by the assistant district attorney, and the statements then made by them were reduced to record by a stenographer. In April, 1915, the appeals from the judgment and order denying application for a new trial were brought on for argument. In June, 1915, for the reasons stated in our decision (People v. Shilitano, 215 N.Y. 715), we suspended a determination of the appeals to the end that opportunity be afforded defendant to renew the motion for a new trial in the manner suggested in the decision. Thereafter, and in July, 1915, subsequent to the interviews had by the assistant district attorney at the bar association, three of the five witnesses made affidavits in due form embracing the identical language embodied in the statements made to the World. Upon such affidavits, the affidavits of counsel for defendant and of James Robbins, verified in March, 1915, the verified statement of Chieffo, dated March 11, 1915, and all proceedings had in the case, application for a new trial was renewed. The application was heard by the judge who presided at the trial; the five witnesses were brought before him and interrogated at length by the counsel for defendant and the assistant district attorney. The application was denied and the appeals are now before us upon the original record of the trial and the records of proceedings upon the applications for a new trial.
The evidence of the witnesses called by the People on the trial, briefly summarized, tended to show that defendant a few minutes before the shooting was in front of No. 241 Mulberry street; that defendant's father approached defendant and gave to him "something shiny" which defendant put in his right sleeve; that Rizzo, the first victim, had spent a part of the evening in a ellisonstephanie@example.org. 235 Mulberry street; that he left the poolroom a few *Page 185
minutes before the crime was committed, and walked north to a point in front of No. 239 Mulberry street where defendant met him and fired a shot at him; that Rizzo fell upon the sidewalk and his death was immediate; that Officer Heaney, who was doing patrol duty, was on the opposite side of the street; that immediately after the shot was fired at Rizzo the officer rushed across the street carrying his club in his hand and was about to strike defendant who had started north when defendant suddenly turned and shot him. The second officer, Teare, was coming south on the street, and as he reached the point where he met defendant, the latter shot him and then fled into the hallway of the house where he resided with his parents, No. 241 Mulberry street, and escaped.
The jury gave credence to the evidence, notwithstanding certain contradictory statements made by the witnesses on cross-examination, and evidence of witnesses called by the defense tending to affect the credibility of at least one of the principal witnesses for the People, and found defendant guilty of the crime of murder in the first degree.
Evidence was introduced on the trial relating to incidental and collateral matters, such as the finding and identification of the body of the officer, Heaney, the cause of death, comparison of the bullets found in the bodies, etc. The remaining facts disclosed in the record which I have briefly summarized were adduced from the evidence of the five witnesses, namely, Nellie De Carlo, a young girl of about sixteen years of age, whose evidence was of a damaging character to the defendant, Gennaro Sellitto, James Morelli, John Verno and Frank Chieffo.
In view of the careful review of the record which each member of the court has made, I do not deem it expedient to enter upon an analysis of the evidence given upon the trial by the various witnesses and comparisons of the same with the details of the statements and affidavits *Page 186
made by them and their evidence given upon the application for a new trial, which would result in extending this opinion to extreme length. I shall refer only to the same as briefly as possible to give expression to the views I entertain relating thereto.
It is important first to consider the nature of the statements made by the five witnesses to the representative of the New YorkWorld, the manner in which the statements were secured and the facts connected with the making of the same.
The affidavit of Mr. Robbins, a disinterested witness in the proceeding for the new trial, is to the effect that Nellie De Carlo accompanied by her father called at the office of the New York World, on March 7th, 1915; that he, Robbins, was assigned by the city editor to interview her; that thereupon Nellie De Carlo told him what she had testified to on the trial of the defendant and said that she did not tell the truth then and that she desired to make a sworn statement to that effect.
Mr. Robbins, in order to thoroughly acquaint himself with the history of the case and the testimony on the trial, requested Nellie De Carlo to return to the office on the following day; she did return on the following day and was questioned at length by Mr. Robbins and Mr. Swope, city editor of the New York World,
for the purpose of eliciting from her all that she knew in relation to the homicide. Mr. Robbins states that she was given every opportunity to state all she knew and her statement was incorporated in the affidavit which was read over to her and by her read over to Mr. Robbins, and then signed and sworn to by her; that she repeatedly both before and after signing the affidavit stated in the presence of Mr. Robbins and Mr. Swope that she freely and voluntarily told her story; that she knew she was confessing to perjury on the trial and was doing so of her own free will, unurged by any one but her priest.
Upon the trial Nellie De Carlo, who ellisonstephanie@example.org. 243 *Page 187
Mulberry street with her parents, on the third floor of a tenement two flights up, testified that from one of the front windows of her room on the night in question she saw the defendant on the sidewalk in front of No. 241 Mulberry street; that his father came along and had a brief conversation with defendant, and she saw the father hand something to defendant "shiny," which defendant put in his right sleeve; that she saw Rizzo come from the direction of Spring street, and when he was about five feet from the defendant the latter shot him; that Rizzo fell to the sidewalk; that she saw Officer Heaney run across the street, and the defendant turned around and in a swift manner shot him; that Heaney fell to the ground and the defendant started towards Prince street.
In the statement made by her to the New York World she asserted that at the time the crime was committed she was in bed and asleep, and saw no part of it; that she attended St. Patrick's Catholic Church on Mulberry street; that she had been to confession a number of times during the preceding year, but had been refused absolution because she had admitted she had lied about the shooting, and she had been told by her father confessor that she should go to a judge and make full confession, and that was the reason she was making the statement. She stated that the story she told upon the trial was induced by fear. This witness had been in the custody of the police department from the time of her discovery as a witness down to the time of the trial — a period of nine or ten months.
Nellie De Carlo was interrogated by the assistant district attorney at the Bar Association soon after her statement was made public, and was examined as a witness in this proceeding. Her evidence covers a number of pages of the record. A large portion of it is devoted to an examination upon the question of fear, intimidation, etc. She adhered to the statement that at the time of *Page 188
the shooting she was asleep in her room and did not see or hear anything connected with the shooting.
The affidavit of Mr. Robbins further discloses that he and other reporters were assigned by the city editor to make investigation to ascertain the other witnesses who had testified for the People on the trial of defendant; that these witnesses, Morelli, Verno, Sellitto and Chieffo were found and told by representatives of the World of what Nellie De Carlo had done and were asked whether or not they desired to make statements; that within a few days the parties named came to the office of the World and signed affidavits relating to the testimony severally given by them on the trial of the defendant; that before the affidavits were signed Mr. Swope, the city editor, Mr. Beazell, Mr. Hitchcock, and deponent (Robbins) questioned at length the witnesses for the purpose of eliciting from them the facts they knew surrounding the homicide and the testimony given by them upon the trial, and all the witnesses stated they came to the office of their own free will, and with the exception of Morelli all said they understood and realized that they were confessing to perjury on the trial; that they made the statements and affidavits because they did not want to see an innocent man put to death because of their false testimony.
John Verno testified on the trial that he saw Rizzo and defendant in the poolroom, No. 235 Mulberry street; that defendant left there about 11:45 P.M. and was followed by Rizzo, and soon thereafter by witness; that he saw defendant put his hand in his back pocket, run into the street and shoot Rizzo, and the latter fell, and that he, witness, then ran into the grocery ellisonstephanie@example.org. 243 Mulberry street.
In the statement made to the World March 9, 1915, and the affidavit made by him Verno deposed that on the night of the homicide he left home, No. 285 Mott street, and went to East One Hundred and Eighteenth street to visit his mother; that he remained there until *Page 189
9:30 P.M., he then left there and arrived home about 10:30 P.M., went to bed and fell asleep immediately. The next afternoon he read of the homicide. He knew nothing further of the case until about the middle of June, when a detective ordered him to report the following day at the district attorney's office. He reported there, was interrogated for some time, denied that he knew anything about the crime, and was permitted to leave. Again, in February, 1914, he was interrogated by the assistant district attorney at length and was sent to the House of Detention; that the testimony he gave upon the trial to the effect that he saw defendant shoot Rizzo was false; that he was at home in bed and did not know a murder had been committed until the next afternoon. Upon examination in open court he adhered to the foregoing statement.
Gennaro Sellitto testified on the trial that when Rizzo was shot, the defendant was about thirty feet distant from Rizzo; that defendant had an article in his hand that looked like a revolver. Sellitto said he heard a shot and an officer who came across the street fell to the ground, the second officer came down the street and defendant fired another shot, the second officer fell a moment later and defendant ran into the hallway of No. 241 Mulberry street. The witness was taken into custody that night as a witness and detained until May 14th, when he was released on one hundred dollars bail. On May 16th he made a statement to the assistant district attorney in which he stated he saw some man shoot Rizzo, but did not see the face of the man who did the shooting. June 8th he made an affidavit that the man who shot the three people that night was not the defendant. To the World reporter his statement was in effect that while he witnessed the shooting that he was positive the defendant did not do the shooting, but the shots were fired by a heavy-set man about forty years of age, dressed in dark clothes; that he did not see defendant that night, and upon this *Page 190
investigation adhered to the same story. This witness was in the House of Detention about four months, and, as appeared from the testimony of his mother and wife, he claimed that attempts were being made to coerce him to testify against and identify the defendant.
Upon the trial the witness Morelli testified that he saw the defendant in the cafe off the poolroom, and he also saw Rizzo in the saloon next to the poolroom; afterwards he saw the defendant and Rizzo on the street; they were about twenty to twenty-five feet apart, and he, Morelli, was then facing toward Spring street; that he heard a pistol shot and did not know where the defendant was at the time, but he saw the defendant about five minutes before he heard the shot in front of No. 241 Mulberry street. At the time the shot was fired Rizzo was in front of No. 239 Mulberry street, and after the shot was fired Rizzo fell to the ground and the witness helped to carry him into the hall of the ellisonstephanie@example.org. 235 Mulberry street. In his statement to theWorld and affidavit following, as well as upon the investigation, he stated he heard two shots fired; that when Rizzo fell after the first shot, he, Morelli, then ran towards the saloon, stopped in front of the poolroom, and not hearing any more shots fired went back and found the bodies of Rizzo and Officer Heaney on the street about ten yards apart. This witness at all times insisted that he did not see the defendant fire the shots and did not know who did the shooting. He was arrested, taken to headquarters and questioned that night, and later was examined on various occasions by the prosecuting officers.
Frank Chieffo, upon the trial, testified that he was about opposite No. 239 Mulberry street when he heard a shot, turned and saw Rizzo falling to the ground and defendant running up the street, saw Officer Heaney run across the street, heard another shot, saw a flash from the direction of defendant where he was close to the building *Page 191
about three feet from Heaney, saw Heaney fall and as he walked up street heard one or more shots.
March 11th, 1915, Chieffo in substance in a verified statement made at the World office, stated that on the night of the murder he was at a club of which he was a member at 324 East Fourteenth street, and remained there until after eleven o'clock when he started for his home, No. 242 Mott street. He described the route he traveled on his way home which did not include Mulberry street. He said he reached home a little before twelve o'clock, immediately went to bed and asleep, and did not learn of the murder until the following morning; that about the latter part of October he was taken to the office of the district attorney, and before that time he had not discussed the murder with any person, not even with the members of his family, except what he read in the papers. At the district attorney's office he told the assistant he did not know anything about the murder. He was then permitted to depart. Until February 3d he was not again interrogated, but on the latter date a detective picked him up, and he was then coerced to say he saw the shooting and consented to do so. He was then taken to the office of the district attorney, where he made and signed a statement repeating what he said to the detective, and was then taken to the House of Detention, where he remained until after the trial. He stated that his testimony on the trial as to the shooting was not true; that the knowledge that he had sworn an innocent man's life away made him decide to do what he could to take it back, and the statement was made of his own free will, and he made the same uninfluenced by any person and assumed full responsibility for it, as well as any result arising from having made the same.
The affidavit made by Chieffo on April 2d 1915, followed an interview had by him with the assistant district attorney, immediately following a publication of his verified statement appearing in the World, and was used in *Page 192
opposition to the application for a new trial upon the first hearing. In that affidavit he repeated the substance of the testimony given by him on the trial and deposed that all his testimony given upon the trial was true, and that the statement made by him at the office of the World was not true, but was made because of fear of the brother of defendant and of friends of the defendant. Upon the investigation he adhered to the facts stated in the last affidavit.
In the foregoing summary I have omitted a reference to the details of statements, affidavits and oral testimony bearing upon the question of the exercise of an improper influence on the witnesses due to the conclusion reached by me in this extraordinary case. On behalf of the defendant it is argued that without the testimony of the five witnesses the record in this case does not disclose sufficient evidence tending to connect the defendant with the crime for which he has been convicted; that threats, coercion and confinement in the House of Detention prompted the five witnesses to give false testimony against the defendant. Upon the part of the People it is asserted that relatives of defendant by threats and improper means coerced the witnesses to make statements and affidavits tending to show that they had testified falsely on the trial.
Of the five witnesses who testified against the defendant on the trial, all of them except Morelli (who did not undertake to identify the defendant and now emphatically states that the man who did the shooting was a man other than defendant), have testified or deposed that upon the trial of the defendant they testified falsely, and that they were guilty of perjury. They sought to palliate their crimes by claiming they were induced to commit perjury, thus charging other individuals with the crime of subornation of perjury. On the other hand, it is asserted by the People that the witnesses testified truthfully on the trial and since then they have committed *Page 193
the crime of perjury and were induced to commit that crime by other individuals, who are thus charged with the crime of subornation of perjury. In the meantime the defendant is confined in the death house under sentence of death, and we are asked to determine at what particular time the witnesses referred to told the truth and incidentally what person or persons, if any, have been guilty of subornation of perjury.
The record in this case does not disclose that any acquaintance or relation existed between the defendant and Rizzo, or any reason or motive inducing the defendant to kill Rizzo. While motive is not an essential ingredient of the crime of murder in the first or second degrees, "intent" is essential to a conviction in either degree. As bearing upon the question of intent, motive or absence of motive may present considerations of the utmost importance; consequently the absence of evidence showing any relations existing between the accused and Rizzo was a pertinent and proper subject to be considered by a jury upon the question of the probability or improbability of the guilt of the defendant, especially so in a case where the question of identity ellisonstephanie@example.org. (People v. Dinser, 192 N.Y. 80.)
True, the defendant was not tried for the murder of Rizzo; still it is asserted by the People that the three men were murdered by one and the same person; that the murderer of Rizzo killed Officer Heaney to effect his escape from arrest for the murder of Rizzo. Such facts if established would tend to disclose a motive for the murder of Officer Heaney, but the killing of Rizzo and of the officer by the same person and the identity of the defendant as the murderer of Rizzo was not admitted. The identity of the murderer of Rizzo was a material fact in the case; thus the relations between Rizzo and defendant were an important and pertinent subject for consideration.
The record does not disclose evidence bearing upon the *Page 194
antecedents of the defendant. Upon the hearing of the application for a new trial, a witness called by the People, one Laboria Gambardella, a detective-sergeant at the time of the homicide, then active in the case on behalf of the People but no longer a member of the police department, testified to the effect that he lived in the neighborhood of Mulberry street at one time; that he was well acquainted with Rizzo and defendant and had seen them together and they seemed to be friends; that he never heard of any difference between them or between Rizzo and defendant's father; that Rizzo was a strike breaker and before he entered that employment he was a good boy, but soon after he was so employed he shot a man, ran into the subway and attempted to escape but was caught; that a short time before the crime in question Rizzo shot one Loretto, and Loretto after the crime in question was accused of having shot Rizzo; that Loretto and Nellie De Carlo were good friends. It should also be observed that the witnesses in question did not testify upon the trial as to the presence of any one of the other witnesses in Mulberry street at the time the murder was committed, so that the evidence of their presence there is dependent solely upon the testimony they separately gave relating to their movements that night. The defendant was presumed to be innocent. It was incumbent upon the People to establish his guilt beyond a reasonable doubt. That burden the prosecution assumed by the testimony of the witnesses named; the jury believed their evidence and convicted the defendant. The jurors were afforded an opportunity to look upon the witnesses and hear their testimony. What court or judge can fathom the minds of the jurors or speculate upon what basis they formed a judgment? What individual can say that the jurors did not reject the testimony of four of the witnesses and believe the story told by the girl Nellie De Carlo alone, or that the testimony of all the witnesses or only a portion of them was sufficient to convict the defendant? The *Page 195
case is now surrounded with perjury and that confessedly admitted by four of the five witnesses (the one remaining not having identified the defendant as the guilty party), and to the crime of perjury is added charges of subornation of perjury by both sides. There is no escape from this conclusion. How, then, will the ends of justice be promoted? If the retraction of testimony be true and the judgment against the defendant is enforced he will suffer the penalty of death for a crime for which he has not been legally convicted. If it be said that to permit witnesses, by statements under oath after a trial had, to confess their guilt of perjury and thereby enable one convicted of a crime to secure a new trial would establish a precedent which would enable them to trifle with the administration of justice, the fact remains that the Penal Law makes ample provision for such cases, and experience in that direction is apt to prove sad and expensive. In this case the witnesses are the individuals who in a major degree are trifling with the court; they are the parties who charge subornation of perjury, and they should be brought face to face with the defendant and the parties accused before the tribunal so well adapted to determine truth, the same tribunal the defendant was tried before — a jury — where all parties interested may be heard and their credibility weighed. Truth will ultimately prevail, and any individual guilty of a crime will finally answer for the same. The course suggested will promote justice and prove more satisfactory than to have this court enforce the death penalty in this case where the evidence is so conflicting that examination of the same must result in a variance of conclusion, or at least in the minds of some the existence of a reasonable doubt as to the particular time when the witnesses so susceptible to a willingness to commit perjury told the truth. This case is unique in its surroundings. Did it present a situation where beyond "reasonable doubt" bad faith was apparent, or where the evidence exclusive of that adduced from *Page 196
witnesses confessing perjury was sufficient to sustain a conviction, a different result than the one I recommend would no doubt follow.
Assume that the record in this case was in substance presented upon an application for a new trial in a civil action wherein the plaintiff had recovered a substantial verdict; would any trial justice permit a verdict to stand or hesitate to grant a new trial and send the evidence to the district attorney? Orders granting new trials upon less incriminating facts have been made and sustained. (Chapman v. D., L. W.R.R. Co., 102 A.D. 176;O'Hara v. B.H.R.R. Co., 102 A.D. 398; Hammond v.D., L. W.R.R. Co., 140 A.D. 810; Shanahan v.Feltman, 154 A.D. 809.) But few decisions are to be found in criminal cases, especially in this state; the following cases, however, sustain the principle which in my opinion should prevail: State v. Moberly (121 Mo. 604); Dennis v. State
(103 Ind. 142); Mann v. State (44 Tex. 642); Bates v.State (32 So. Rep. [Miss.] 915); People v. Fridy (83 Hun, 240).
The assistant district attorney upon the argument of the appeals, with his usual fairness in the presentation of cases in this court, in his brief states: "It might be conceded for argument's sake that defendant upon the proceedings now under review successfully impeached every one of the People's important witnesses, but even if he did the fact would avail him nothing. MALONE, J., was not only justified but required to deny the motion under the Becker opinion, supra."
For the purposes of discussion, I do not assume that counsel by the use of the language quoted intended to concede that the record discloses that the defendant should necessarily succeed on this appeal. His position, as I understand it, is that the new
evidence, even if uncontradicted, was inadequate to bring about a new trial; that it produced no new facts and its sole tendency was to impeach or discredit the People's trial witnesses. *Page 197
In support of the proposition he cites People v. Priori
(164 N.Y. 459); People v. Patrick (182 N.Y. 131); People v. EngHing (212 N.Y. 373); People v. Becker (215 N.Y. 126);People v. Schmidt (216 N.Y. 324).
The assistant district attorney misapprehends the effect of the decisions made by this court. The statements and affidavits of the witnesses were made subsequent to the trial and conviction of the defendant, consequently they did not exist and were not discoverable at the time of the trial. If the facts were uncontradicted, if they were true, is there a court of law that would permit a death sentence to be imposed? Such a determination would be unprecedented in this state. If the contention of the assistant district attorney be correct, this court was powerless to suspend the hearing of the appeal in the first instance and order a further hearing upon the application for a new trial. The fact that we assumed jurisdiction of the appeal from the order denying an application for the new trial and required further investigation to be made by oral examination of the affiants to enable us to reach a determination, is evidence of our conclusion that we had power to review any order made on the application adverse to the defendant, and that fact is emphasized when such determination was rendered after a full consideration of the brief of the assistant district attorney on the first hearing wherein is contained the same point he now urges and which he supported by argument based upon the cases of Priori, Patrick
and Eng Hing.
In the same brief, counsel argues that the decision of a motion for a new trial involves the exercise of discretion; that this court will not interfere unless it finds that the discretion has been abused, thus conceding our authority to review the discretion of the court below. Lord MANSFIELD said: "Discretion when applied to a court of justice means sound discretion guided by law." The discretion to be exercised by a court or judge must ever be *Page 198
applied to promote the development of truth and a promotion of substantial justice. When we speak of the impeachment of a witness, we refer usually to the development of facts tending to affect his credibility or to show his character for truthfulness is bad. The testimony of a majority of people called as witnesses is sought to be impeached or discredited not only by cross-examination but frequently by the production of witnesses who are called to testify to a different state of facts. When we consider an appeal from an order denying a new trial in a case like the one at bar, we frequently find affidavits or depositions of parties or individuals other than the witnesses attacking the truthfulness of witnesses upon a trial by reason of previous or subsequent statements attributed to them inconsistent with statement they made on the trial. It is of that nature of so-called impeachment we have heretofore spoken of, except in the cases of Eng Hing and Becker which within our reasoning are clearly distinguishable from the ellisonstephanie@example.org. In the Eng Hing
case two women, Florence Hong and Grace Mack were sworn as witnesses in behalf of the People. The nature of the proceeding is described in the opinion of this court written by Judge WERNER and need not be referred to here. The two witnesses named did not recant their testimony given on the trial, but, on the contrary, contradicted by affidavit the alleged impeachment of their evidence. In the Becker case one Marshall, an important witness for the People (as stated in the opinion of Chief Judge BARTLETT), while intoxicated in the city of Philadelphia signed and verified a statement somewhat inconsistent with his testimony on the trial. Subsequently he repudiated the statement as being different from what he understood it to be, and this court, after a review of the entire evidence, sustained the decision below denying a motion for a new trial.
In the case at bar the witnesses retracted under oath the material facts testified to by them on the trial. Such *Page 199
disavowal or recantation is not "impeachment" as contemplated in the statute or by our decisions. Where witnesses under oath retract evidence given by them upon a trial their recantation and prior testimony are subject to a careful scrutiny, and if doubt be entertained as to the particular time the witnesses were truthful the doubt should, especially in a capital case, be resolved in favor of a defendant. The application for a new trial in this case is out of the ordinary. In view of the conflict of evidence, the danger of a greater evil should be avoided and the defendant should have the opportunity of meeting the question of his guilt before a jury qualified by observation and scrutiny to determine the truth or falsity of the charge against him. I recommend a reversal of the judgment and order and that a new trial be ordered.
COLLIN and CUDDEBACK, JJ., concur with SEABURY and CARDOZO, JJ.; HOGAN, J., reads dissenting opinion, and HISCOCK, J., concurs; WILLARD BARTLETT, Ch. J., taking no part.
Judgment of conviction and order denying motion for a new trial affirmed. |
168 Cal. App. 3d 225 (1985)
214 Cal. Rptr. 82
THE PEOPLE, Plaintiff and Respondent,
v.
BARRY L. NUNLEY, Defendant and Appellant.
Docket No. A019552.
Court of Appeals of California, First District, Division Two.
May 16, 1985.
*228 COUNSEL
R. Charles Johnson, under appointment by the Court of Appeal, for Defendant and Appellant.
John K. Van de Kamp, Attorney General, Edward P. O'Brien, Assistant Attorney General, and Robert R. Granucci, Deputy Attorney General, for Plaintiff and Respondent.
OPINION
FLAHERTY, J.[*]
In this case we consider, among other issues, the question of whether a person, intending to burglarize an apartment, may be *229 convicted of burglary by merely entering the lobby of the apartment building where the apartment is located.
The facts of this case are not in dispute. On May 30, 1982, Frances Byrne and Tim Foremosa were returning to their apartment at 100 Alma Street in San Francisco at 6 p.m. The front door to the apartment building contains transparent glass and is at the head of an outside stairway. As Ms. Byrne ascended the steps she looked through the glass door and saw a man, later identified as defendant, standing by the door to her apartment. The man was standing on the bottom step of the inside stairs to the second floor and was prying open the door to apartment one with a silver object which looked like a screwdriver.
Mr. Foremosa opened the front door of the building with his key. Then both Ms. Byrne and Mr. Foremosa noticed that their apartment door showed signs of tampering. Almost all of the trim on the window of their door had been ripped off, and pieces of the wood were on the floor in front of the door. When Ms. Byrne entered the apartment she found that nothing had been disturbed.
Mr. Foremosa stayed outside the apartment and watched for the man who had gone upstairs. The man came downstairs, nervously picked up a newspaper and then walked out of the apartment building.
Mr. Foremosa followed the man out of the building, down the street and observed him get into a car. Mr. Foremosa noted the license number of the automobile, returned to the apartment and called the police.
Defendant was arrested the following day while driving his automobile. The arresting officer found a screwdriver, a glove and a cap on the floorboard in the front seat.
Defendant testified on his own behalf. He stated that while working as a cab driver in the early part of May, he dropped off a lady passenger named Patricia Johnson at 100 Alma. On May 30, the same lady telephoned and asked him to come to her apartment, apartment number 5, for dinner. He arrived at 100 Alma Street approximately 5 p.m., entered the building through the front door which was open,[1] then proceeded up the stairs searching for apartment 5. He knocked at apartment 5, but received no answer. He then went downstairs, picked up a newspaper, saw some people *230 standing by a door and asked them what happened. When they failed to respond, he left the apartment and went to his car.
The prosecution presented two rebuttal witnesses. A yellow cab official testified that defendant had been terminated from employment on March 24, 1982. The occupant of apartment 5 testified that he had lived in the apartment for six years and that he never heard of Patricia Johnson.
Prosecution witness Joyce Roschinger testified that on April 20, 1982, she returned to her apartment building at 741 Balboa Street in San Francisco and found her front door open. The glass of the front door and the wood molding surrounding the glass had been removed. She found the glass and molding in a wastebasket in her apartment. Defendant's right thumb print was found on the glass pane. A television set and about $30 in cash had been taken from the apartment.
Based on these facts a jury found defendant guilty of burglary and attempted burglary of apartment one of 100 Alma Street. (Pen. Code, §§ 459, 664/459.) Defendant was sentenced to the upper base term of three years for the burglary and was given a one-year enhancement for each of two prior convictions for a total of five years. A one-year sentence for the attempted burglary was stayed. He timely filed an appeal from the underlying conviction and his sentence.
I
Burglary Conviction
(1) Defendant contends that he cannot be convicted of burglary where he merely entered the lobby of an apartment building with the intent to burglarize a particular apartment. We disagree.
Section 459 of the Penal Code provides that "[e]very person who enters any ... apartment, ... or other building, ... with intent to commit grand or petit larceny ... is guilty of burglary."
In People v. Gauze (1975) 15 Cal. 3d 709 [125 Cal. Rptr. 773, 542 P.2d 1365], a case addressing the question of whether a person can burglarize his own home, our Supreme Court explained the difference between California's burglary statute and the common law: "First, the statute greatly expanded the type of buildings protected by burglary sanctions. Not only is a person's home his castle under the statute, but so, inter alia, are his shop, tent, airplane, and outhouse. This evolution, combined with elimination of the requirement that the crime be committed at night, signifies that the law *231 is no longer limited to safeguarding occupancy rights. However, by carefully delineating the type of structures encompassed under section 459, the Legislature has preserved the concept that burglary law is designed to protect a possessory right in property, rather than broadly to preserve any place from all crime.
(2) "The second major change effected by codification of the burglary law was the elimination of the requirement of a `breaking': under that statute, every person who enters with felonious intent is a burglar. This means, at a minimum, that it no longer matters whether a person entering a house with larcenous or felonious intent does so through a closed door, an open door or a window. The entry with the requisite intent constitutes the burglary." (People v. Gauze, supra, 15 olara@example.com. 712-713, italics in original, fns. omitted.)
(3) Citing People v. Lyles (1957) 156 Cal. App. 2d 482 [319 P.2d 745] and People v. Staples (1970) 6 Cal. App. 3d 61 [85 Cal. Rptr. 589],[2] defendant initially argues that entry into an apartment house lobby with intent to burglarize a specific apartment is more properly characterized as an attempt to burglarize the apartment rather than a burglary of the lobby.
However, in People v. Wright (1962) 206 Cal. App. 2d 184 [23 Cal. Rptr. 734], defendant entered an office of a tire shop in order to go through a door into an attached shed to steal tires in the shed. In addressing the question of whether mere entry into the office for the purpose of stealing property from the shed could be considered burglary, the Wright court reasoned as follows: "We consider the true rule to be that within the purview of section 459, Penal Code, the intent to commit larceny or any felony is not confined to an intent to commit the crime in the building which is entered if the intent at the time of entry is to commit the offense in the immediate vicinity of the place entered by defendant; if the entry is made as a means of facilitating the commission of the theft or felony; and if the two places are so closely connected that intent and consummation of the crime would constitute a single and practically continuous transaction." (Id., at p. 191; see also, People v. Nance (1972) 25 Cal. App. 3d 925, 931-932 [102 Cal. Rptr. 266].) Thus, California decisions have rejected the common-law notion of burglary which requires that a defendant enter premises with the intent to commit a crime "therein". (People v. Guthrie (1983) 144 Cal. App. 3d 832, 845 [193 Cal. Rptr. 54].)
(4) Defendant maintains that Wright is distinguishable from the instant case, since in Wright the office was private property whereas here the entry area of an apartment building is more in the nature of a public place.
*232 Even if we assume that a locked entry into an apartment building is an area open to the public, which we do not, defendant's argument must fail. It is long settled that trespassory entry is no longer a necessary element of burglary. (People v. Gauze, supra, 15 Cal.3d at p. 713; People v. Sears (1965) 62 Cal. 2d 737, 746 [44 Cal. Rptr. 330, 401 P.2d 938]; People v. Deptula (1962) 58 Cal. 2d 225, 228 [23 Cal. Rptr. 366, 373 P.2d 430]; People v. Brittain (1904) 142 Cal. 8; People v. Barry (1892) 94 Cal. 481 [29 P. 1026].) Anyone who enters a building with the intent to commit a felony is guilty of burglary even though permission to enter has been extended to him personally or as a member of the public. (People v. Sears, supra, 62 Cal.2d at p. 746.) Thus, the current law is that one may be convicted of burglary even if he enters with consent, provided he does not have an unconditional possessory right to enter. (People v. Pendleton (1979) 25 Cal. 3d 371, 382 [158 Cal. Rptr. 343, 599 P.2d 649].)
While it is arguable as to whether a tenant in a particular apartment owns a possessory interest in the common entryway to the building, it is indisputable that the owner of the apartment building does. Any consent that the owner gives to the general public to enter the lobby is vitiated by the visitor's intent to commit larceny within the building.
(5) Defendant claims that the evidence does not support the burglary conviction since there was no showing that he entered 100 Alma Street with the requisite specific intent to commit larceny. Although the prosecution must demonstrate that one accused of burglary entered the premises with intent to commit theft or any felony, intent is rarely susceptible of direct proof and may be inferred from the circumstances disclosed by the evidence. (People v. Hopkins (1983) 149 Cal. App. 3d 36, 44 [196 Cal. Rptr. 609]; People v. Walls (1978) 85 Cal. App. 3d 447, 452 [149 Cal. Rptr. 460].) Where the facts and circumstances of a particular case and the conduct of the defendant reasonably indicate his purpose in entering the premises is to commit larceny or any felony, the conviction may not be disturbed on appeal. (People v. Matson (1974) 13 Cal. 3d 35, 41 [117 Cal. Rptr. 664, 528 P.2d 752]; People v. Walls, supra, 85 Cal. App.3d at p. 452.) Here, defendant entered the building with a screwdriver and was seen attempting to gain entry to apartment one by removing the molding on the front door. In addition, the evidence showed that one month prior to the instant offense, defendant had committed a burglary using a similar method of operation and had stolen a TV set and cash. Accordingly, there was substantial evidence to support the jury's verdict. (See People v. Matson, supra, 13 Cal.3d at p. 41; People v. Poon (1981) 125 Cal. App. 3d 55, 73 [178 Cal. Rptr. 375].)
*233 (6) Defendant's other assertion, that his actions within 100 Alma Street constituted a single course of conduct which cannot support both a burglary and attempted burglary conviction, must also fail.
Section 654 of the Penal Code provides in part, "An act or omission which is made punishable in different ways by different provisions of this code may be punished under either of such provisions, but in no case can it be punished under more than one; ..." This section is aimed against double punishment. It does not prevent double convictions. (See People v. Bauer (1969) 1 Cal. 3d 368, 375-377 [82 Cal. Rptr. 357, 461 P.2d 637, 37 A.L.R. 3d 1398]; People v. Green (1973) 34 Cal. App. 3d 622, 654 [110 Cal. Rptr. 160]; People v. Lyons (1971) 18 Cal. App. 3d 760, 780-781 [96 Cal. Rptr. 76].) In the present case, the trial court properly stayed the sentence for the attempted burglary.
II
1974 Prior Conviction
(7) Defendant contends that use of his 1974 conviction for impeachment purposes was error. He argues that his conviction was too remote and that the prosecutor's question concerning the nature of the prior felony was improper.
At the beginning of trial, defendant requested a ruling on what felonies could be used against him if he took the stand, urging that the 1977 and 1978 burglary convictions should be excluded as being similar to the charged offense and attacking a 1974 robbery as being too remote. The court ruled that the two prior burglary convictions were inadmissible but that the 1974 robbery conviction could be used.[3] However, it limited use of the robbery conviction to a simple inquiry along the lines of "[I]sn't it true that *234 you have a prior felony conviction for a crime of theft, a crime that involved theft?"[4]
Defendant's reliance on People v. Antick (1975) 15 Cal. 3d 79 [123 Cal. Rptr. 475, 539 P.2d 43] to support his claim that the 1974 robbery conviction was too remote to be used is misplaced. Antick involved convictions which were 17 and 19 years old. In contrast, defendant's conviction for robbery was only eight years old. Courts have approved admission of felonies four years old (People v. Lassell (1980) 108 Cal. App. 3d 720 [166 Cal. Rptr. 678]), five years old (People v. James (1978) 88 Cal. App. 3d 150 [151 Cal. Rptr. 354]), and six years old (People v. Anjell (1979) 100 Cal. App. 3d 189 [160 Cal. Rptr. 669]; People v. Boothe (1977) 65 Cal. App. 3d 685 [135 Cal. Rptr. 570], disapproved on another point in People v. Brigham (1979) 25 Cal. 3d 283, 292 [157 Cal. Rptr. 905, 599 P.2d 100]). The prior conviction was not too remote.
(8) Defendant also argues that the prosecutor committed misconduct when, after the court had limited use of defendant's 1974 conviction to a "crime that involved theft," the prosecutor specifically asked defendant whether the offense was robbery.[5] In addition to making a timely objection, defense counsel later moved for a mistrial on the basis of the prosecutor's question.
Although it was improper for the district attorney to initially ask the question, we agree with the trial court's reasoning in denying defendant's motion for mistrial: "The Court feels that it was the former question was appropriately and timely objected to the moment it was uttered and sustained; and the jury was told that it was a crime of felony for a theft as the witness had testified."
*235 III
Sentencing Errors
(9) Defendant challenges the imposition of the upper base term for the burglary conviction. The court selected the aggravated term because the crime was premeditated and involved the break-in of a residential building.
We find that there is substantial evidence to support the lower court's choice of sentence. The fact that defendant entered the premises with a screwdriver together with the evidence that he had committed another burglary with a similar method of operation one month prior to the instant offense is sufficient for a finding of premeditation. Although there was no evidence that defendant had, in fact, broken into 100 Alma Street, the trial court's characterization of the building as being residential is justified. Clearly entry into an apartment building containing several living units involves a greater danger to personal safety than a burglary of a commercial or unoccupied edifice. Consequently, imposition of the aggravated sentence was proper.
Defendant also argues that the two one-year enhancements for his prior burglary convictions in 1977 and 1978 should be set aside for two reasons.
(10) First, defendant submits that since the probation report filed in this case reveals a conviction for 1978 but not 1977, the enhancement for the 1977 burglary should be stricken. However, where, as here, a defendant who is charged with having suffered a previous conviction pleads guilty, his plea is conclusive of the fact of having suffered such conviction. (Pen. Code, § 1025; People v. Dabney (1967) 250 Cal. App. 2d 933, 947 [59 Cal. Rptr. 243], cert. den. 390 U.S. 911 [19 L. Ed. 2d 882, 88 S. Ct. 838].)
(11) Second, two months after the abstract of judgment was filed in this action, defendant was convicted and sentenced on different burglary charges. In the subsequent proceeding the trial court used the same two prior burglary convictions to enhance defendant's sentence. Recognizing that the use of the same prior convictions for enhancement purposes in both the instant case and in the subsequent action might be improper, the trial court stated: "If there's any legal conflict between that judgment in that case [the instant action] and the judgments that I pronounced here [subsequent case], then it's the decision of the Court that that judgment in the prior Action 108203 should fall, because the most serious offense, the principal term that you should be punished on and everything flowing from it, is the first degree burglary in this case." On the basis of this pronouncement defendant contends that the enhancements in this case should be stricken.
*236 What defendant fails to realize is that the judge in the subsequent trial, despite the fact that he had presided over the first trial, was without jurisdiction to alter the first judgment. Although a court may amend an abstract of judgment in order to correct a clerical error, such amendment may not be made in order to revise judicial error. (In re Candelario (1970) 3 Cal. 3d 702, 705 [91 Cal. Rptr. 497, 477 P.2d 729]; In re Wimbs (1966) 65 Cal. 2d 490, 498 [55 Cal. Rptr. 222, 421 P.2d 70]; Smith v. Superior Court (1981) 115 Cal. App. 3d 285, 290 [171 Cal. Rptr. 387].) The abstract of judgment was never corrected in the instant case and any attempt to do so would have lacked jurisdiction. Any claim of error in employing the same prior convictions for enhancement purposes in defendant's two trials should have been raised in defendant's appeal from the second proceeding.
(12) Finally, defendant contends that the stayed term of one year for the attempted burglary was error. Penal Code section 664 provides for a penalty of "one-half the term of imprisonment prescribed upon a conviction of the offense so attempted," here one-half of the middle term of two years or one year. The trial court did not impose a consecutive sentence which would bring into play Penal Code section 1170.1. Instead the trial court stayed the term on the attempted burglary count which was correctly calculated at one year pursuant to Penal Code section 664.
The judgment is affirmed.
Kline, P.J., and Rouse, J., concurred.
NOTES
[*] Assigned by the Chairperson of the Judicial Council.
[1] Although Mr. Foremosa testified that he had to unlock the front door of the apartment building with a key, he also stated that advertising periodicals were routinely thrown on the stairs to the apartments, indicating that access to the inside of the lobby could be effected by other than tenants of the building.
[2] In neither Lyles nor Staples was defendant appealing from a burglary conviction. Rather, both cases reviewed judgments of attempted burglary.
[3] In announcing its ruling the trial court stated: "Well, courts have held that robbery is a crime that involves dishonest conduct, as well as assault of [sic] conduct. So it should properly be considered for purposes of impeachment.
"There are more current convictions that would impeach the defendant for dishonest conduct, because the crimes involved dishonesty, to wit: burglary involving theft. But since he's being charged here with burglary, and attempted burglary, in fairness to the defendant, these more recent felonies not be used because of the great prejudice of the jury may feel that a jury may conclude that the knowledge that it would be indicative of propensities to commit burglaries; and since they're not being used, that the robbery should be allowed to be used, and I will allow it.
"And the Court doesn't find that there's remoteness in time in this situation; and that in using it, the robbery not be mentioned, but that he was found guilty of a felony which involved a crime of theft.
"I have considered the standards and I feel that it should be allowed, because it certainly is apparent that the defendant has not led a blameless life. This jury should not be misled if he takes the stand. Impeachment should be proper, and I will allow that '74."
[4] Since neither party has questioned the propriety of sanitizing prior convictions (see People v. Barrick (1982) 33 Cal. 3d 115 [187 Cal. Rptr. 716, 654 P.2d 1243]), we have refrained from addressing that issue in this case.
[5] Cross-examination of defendant began with the following colloquy:
"Q. Mr. Nunley, the first question I want to ask you about your background. Have you ever been convicted of a felony?
"A. Yes, back in '74.
".... .... .... .... .... .... .
"Q. And the offense was robbery; is that right?
"A. Theft.
"[Defense Counsel]: Your Honor, I am going to object. That was covered.
"THE COURT: The crime of theft was the felony which he was convicted of. All right. [¶] Now proceed to the next question."
|
101 Cal. App. Supp. 2d 927 (1951)
THE PEOPLE, Appellant,
v.
JAMES O. RYAN, Respondent.
California Court of Appeals.
Jan. 16, 1951.
James Don Keller, District Attorney, and H. D. Cornell, Deputy District Attorney, for Appellant.
Henry W. Hache for Respondent.
BURCH, J.
Defendant was charged in the Municipal Court of San Diego as follows:
"That said James S. Ryan on or about the 14th day of July, 1950, in San Diego Township in the said County of San Diego, State of California, and before the making or filing of this Complaint, did then and there wilfully and unlawfully deliver to John Dellenbach a salve, and did represent said salve to have an effect in cancer; ..."
The defendant demurred to the complaint on the ground that it did not state a public offense. The court sustained the demurrer, dismissed the complaint, and the People appeal.
By 1939 Statutes, chapter 730, section 1, the Legislature enacted the Pure Drugs Act. This has been set up in the Health and Safety Code, division 21, chapter 2, sections 26200-26385. The administration of the act is committed to the State Board of Health, which is given broad powers to promote the public health and safety. (See Health & Saf. Code, 200-211, inclusive.) Under the act the term "advertisement" means "all representations ... which are likely to induce, directly or indirectly, the purchase of drugs. ..." (Health & Saf. Code, 26209.)
Drugs are "... (2) articles intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease in man. ...; (3) articles (other than food) intended to affect the structure or any function of the body of man. ..." (Health & Saf. Code, 26200.)
By section 26286 the dissemination of any false advertisement of a drug is prohibited. The violation of any provision of the act is made a misdemeanor and punished by the terms of section 26295.
Section 26273 provides as follows:
"Whenever the board determines that an advance in medical science has made any type of self-medication safe as to any of the diseases named in this article, the board shall by regulation authorize the advertisement of drugs having curative [101 Cal. App. Supp. 2d 929] or therapeutic effect for such disease, subject to such conditions and restrictions as the board may deem necessary in the interests of public health."
and section 26271, under which defendant is charged, provides in part as follows:
"The advertisement of a drug ... shall be false within the meaning of this division if the drug ... is represented to have any effect in ... cancer, ..." (The section includes 49 other diseases.)
[1] From the portions of the Pure Drugs Act referred to above, we conclude that the advertisement prohibited by section 26271 as false is one that is likely to induce a purchase of a drug which is prohibited by section 26286 with the exception set up in section 26273.
[2] Defendant asserts that the charge is defective because it does not negative this exception.
It is sufficient to limit the charge to the gist of the offense. (People v. Nugent, 4 Cal. 341; Ex parte Hornef, 154 Cal. 355, 360 [97 P. 891].) If defendant's product is proper to advertise under other provisions of the act, that is a matter of defense. (People v. Pierce, 14 Cal. 2d 639, 643 [96 P.2d 784].) So in a prosecution against a physician for violating section 8 1/2 of the act to regulate the sale and use of poisons (1907 Stats. 124), the complaint is not defective in not negativing the good faith of the physician in prescribing morphine for the use of a habitual user thereof and that the patient was not suffering from an uncurable disease, ailment or injury. (See In re Lord, 199 Cal. 773, 776 [250 P. 714].) This contention of the defendant is untenable. [3] Neither, as defendant claims, is the complaint defective as to him because of his assertion that he is a licensed chiropractor. We find nothing in the Chiropractic Act which would exempt the defendant as such from the requirements of the Pure Drugs Act. [4] We think the charging part of the complaint, which is in ordinary concise language and in the words of the statute, is clear and puts defendant on notice of the offense charged. (Pen. Code 1426.)
Defendant further claims the section is in violation of the due process and equal protection clauses of the 14th Amendment of the federal Constitution.
"... due process of law has never been a term of fixed and invariable content." (Federal Comm'n. Comm. v. Station WJR, 337 U.S. 265, 275 [69 S. Ct. 1097, 93 L. Ed. 1353].) [101 Cal. App. Supp. 2d 930]
In Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 550, 551 [69 S. Ct. 1221, 93 L. Ed. 1528], the court said:
"The Federal Constitution does not invalidate state legislation because it fails to embody the highest wisdom or provide the best conceivable remedies. Nor can legislation be set aside by courts because of the fact, if it be such, that it has been sponsored and promoted by those who advantage from it. (Daniel v. Family Ins. Co., 336 U.S. 220 [69 S. Ct. 550, 93 L. Ed. 632, 10 A.L.R. 2d 945].) In dealing with such difficult and controversial subjects, only experience will verify or disclose weaknesses and defects of any policy and teach lessons which may be applied by amendment."
In Daniel v. Family Security Life Ins. Co., 336 U.S. 220, 224, 225 [69 S. Ct. 550, 93 L. Ed. 632, 10 A.L.R. 2d 945], the court says:
"Despite evidence to the contrary, respondents see no evil to be corrected by this legislation. We are asked to agree with respondents and call the statute arbitrary and unreasonable."
"Looking through the form of this plea to its essential basis, we cannot fail to recognize it as an argument for invalidity because this Court disagrees with the desirability of the legislation. We rehearse the obvious when we say that our function is thus misconceived. We are not equipped to decide desirability; and a court cannot eliminate measures which do not happen to suit its tastes if it seeks to maintain a democratic system. The forum for the correction of ill-considered legislation is a responsive legislature."
In a note in 93 L. Ed. 637 it is said that:
"The decision in Daniel v. Family Secur. L. Ins. Co. (supra), illustrates the unanimous view of the Supreme Court, announced in Lincoln Federal Labor Union v. Northwestern Iron and Metal Co. (1949), 335 U.S. 525, 542, 557 [69 L. Ed. 251, 93 L. Ed. 212, 6 A.L.R. 2d 473], that the due process clause is no longer to be so broadly construed that the Congress and state legislatures are put in a straight jacket when they attempt to suppress business and industrial conditions which they regard as offensive to the public welfare, the Court returning closer and closer to the earlier constitutional principle that states have power to legislate against what are found to be injurious practices in their internal commercial and business affairs, so long as their laws do not run afoul of some specific Federal constitutional prohibition, or of some valid Federal law."
We may be guided by the above quoted decisions of the [101 Cal. App. Supp. 2d 931] Supreme Court of the United States on the issues of due process and equal protection of the law under the 14th Amendment, because that court is the final arbiter of those issues. (Brookes v. City of Oakland, 160 Cal. 423 [117 P. 433].)
Those issues find like solution in the decisions of our own courts. In Hollywood Turf Club v. Daugherty, 36 Cal. 2d 352, 359 [224 P.2d 359], the court says:
"It is not the function of this court to question the wisdom of the legislative classification and we must be guided by the principles that: ' "The question of classification is generally one for the legislative power, to be determined by it in the light of its knowledge of all the circumstances and requirements, and its discretion will not be overthrown unless it is palpably arbitrary. ... It will be presumed that the legislature made inquiry to determine whether or not there were evils to be remedied and that the classification made was based upon the result of the inquiry". ... "When a legislative classification is questioned, if any state of facts reasonably can be conceived that would sustain it, there is a presumption of existence of that state of facts, and the burden of showing arbitrary action rests upon the one who assails the classification" ' (California Physicians' Service v. Garrison, 28 Cal. 2d 790, 802 [172 P.2d 4, 167 A.L.R. 306].)" (See to same effect In re McKelvey, 19 Cal. App. 2d 94 [64 P.2d 1002]; Matter of Yun Quong, 159 Cal. 508, 515 [114 P. 835, Ann.Cas. 1912C 969].)
[5] In the light of these and many other authorities that might be cited (see Nebbia v. New York, 291 U.S. 502, 521-539 [54 S. Ct. 505, 78 L. Ed. 940], and notes 8, 9, 12, 13 and 24), it would appear that the judicial responsibility is ended "If the laws passed are seen to have a reasonable relation to a proper legislative purpose, and are neither arbitrary nor discriminatory, ...." (Nebbia v. New York, supra, 537; California Physicians' Service v. Garrison, supra, 802, 803.)
Coming to the merits of the case, a proper legislative purpose in restricting the uncontrolled trade in drugs which may be poisonous has already been decided in In re Gray, 206 Cal. 497, 499 [274 P. 974]. The magnitude of the national evil, which the Pure Drugs Act sought to remedy in this state, is revealed in a note in 53 Harvard Law Review 828, from which it is made to appear that the unregulated trade in drugs without value in diseases resulted in large [101 Cal. App. Supp. 2d 932] annual cost in life, health and money to suffering purchasers among the public, hopefully eager to buy. While public opinion, informed by experience and reading, may not decide constitutionality for the courts (see Muller v. Oregon, 208 U.S. 412, 420 [28 S. Ct. 324, 52 L. Ed. 551]), it certainly has an obvious bearing on the rational exercise of legislative power.
[6] We come to the result that section 26271, supra, is a reasonable and proper statute. On the score of due process, and the opportunity of defendant to establish the merit of his product, section 26273 affords defendant all that he may ask under the law. (Neslen v. Board of Health, 70 Cal. App. 2d 202 [160 P.2d 862]; Downing v. California State Board of Pharmacy, 85 Cal. App. 2d 30 [192 P.2d 39]; Webster v. Board of Dental Examiners, 17 Cal. 2d 534, 541, 542 [110 P.2d 992].)
The judgment is reversed.
Turrentine, P. J., and Glen, J., concurred.
|
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 1 of 22
1 Katrina Eiland (SBN 275701) Lee Gelernt*
Cody Wofsy (SBN 294179) Omar C. Jadwat*
2 Spencer Amdur (SBN 320069) Anand Balakrishnan*
Julie Veroff (SBN 310161) ACLU FOUNDATION
3
ACLU FOUNDATION IMMIGRANTS’ RIGHTS PROJECT
4 IMMIGRANTS’ RIGHTS PROJECT 125 Broad Street, 18th Floor
39 Drumm Street New York, NY 10004
5 San Francisco, CA 94111 T: 269-252-1401
T: 269-252-1401 F: 269-252-1401
6 F: 269-252-1401 rolson@example.net
rolson@example.net rolson@example.net
7
rolson@example.net rolson@example.net
8 rolson@example.net
rolson@example.net Attorneys for Plaintiffs
9 (Additional counsel listed on following page)
10 UNITED STATES DISTRICT COURT
11 NORTHERN DISTRICT OF CALIFORNIA
12 East Bay Sanctuary Covenant; Al Otro Lado;
Innovation Law Lab; and Central American Case No.: 3:19-cv-04073-JST
13 Resource Center in Los Angeles,
14 Plaintiffs,
15
v. REPLY IN SUPPORT OF
16 PLAINTIFFS’ EMERGENCY
William Barr, Attorney General, in his official MOTION TO RESTORE THE
17 capacity; U.S. Department of Justice; James NATIONWIDE SCOPE OF THE
McHenry, Director of the Executive Office for INJUNCTION
18 Immigration Review, in his official capacity; the
19 Executive Office for Immigration Review; Kevin
McAleenan, Acting Secretary of Homeland
20 Security, in his official capacity; U.S. Department
of Homeland Security; Ken Cuccinelli, Acting
21 Director of the U.S. Citizenship and Immigration
Services, in his official capacity; U.S. Citizenship
22
and Immigration Services; John Sanders,
23 Commissioner of U.S. Customs and Border
Protection, in his official capacity; U.S. Customs
24 and Border Protection; Matthew Albence, Acting
Director of Immigration and Customs
25 Enforcement, in his official capacity; Immigration
and Customs Enforcement,
26
27 Defendants.
28
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 2 of 22
1 Melissa Crow* Baher Azmy**
2 SOUTHERN POVERTY LAW CENTER Angelo Guisado**
1101 17th Street, NW Suite 705 Ghita Schwarz**
3 Washington, D.C. 20036 CENTER FOR CONSTITUTIONAL RIGHTS
T: 269-252-1401 666 Broadway, 7th Floor
4 F: 269-252-1401 New York, NY 10012
rolson@example.net T: 269-252-1401
5 F: 269-252-1401
6 Mary Bauer* rolson@example.net
SOUTHERN POVERTY LAW CENTER rolson@example.net
7 1000 Preston Avenue rolson@example.net
Charlottesville, VA 22903
8 T: 269-252-1401 Christine P. Sun (SBN 218701)
F: 269-252-1401 Vasudha Talla (SBN 316219)
9 rolson@example.net Angélica Salceda (SBN 296152)
10 AMERICAN CIVIL LIBERTIES UNION
FOUNDATION OF NORTHERN
11 CALIFORNIA, INC.
39 Drumm Street
12 San Francisco, CA 94111
T: 269-252-1401
13
F: 269-252-1401
14 Attorneys for Plaintiffs rolson@example.net
rolson@example.net
15 *Admitted Pro hac vice rolson@example.net
**Pro hac vice application forthcoming
16
17
18
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20
21
22
23
24
25
26
27
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Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 3 of 22
TABLE OF CONTENTS
1
2 I. NATIONWIDE RELIEF IS NECESSARY AND APPROPRIATE. .............................. 1
3 A. Nationwide Relief Is Necessary to Remedy Plaintiffs’ Specific Harms. ..................... 1
4 1. The Limited Injunction Does Not Provide Plaintiffs Complete Relief............... 1
5 2. The Narrowed Injunction Also Causes Confusion and Allows the Government to
Circumvent Its Application. .............................................................................. 6
6
3. An Injunction Limited to Plaintiffs and Their Retained Clients Would Not Fully
7 Remedy Plaintiffs’ Injuries and Would Be Unworkable. ................................. 8
8
B. The Types of Violations at Issue Here Further Support a Nationwide Injunction. ...... 9
9
C The Equities Are Relevant to and Tip Sharply in Favor of Nationwide Relief. ........ 11
10
II. THE COURT HAS THE AUTHORITY TO RESTORE THE NATIONWIDE SCOPE OF
11 THE INJUNCTION. ...................................................................................................... 11
12 CONCLUSION .......................................................................................................................... 15
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
i
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 4 of 22
TABLE OF AUTHORITIES
1
2 Cases
3 Allied-Signal, Inc. v. U.S. Nuclear Regulatory Comm’n,
988 F.2d 146 (D.C. Cir. 1993) ........................................................................................................ 10
4
Am. Fed’n of Gov’t Emps., AFL-CIO v. Block,
5 655 F.2d 1153 (D.C. Cir. 1981) ...................................................................................................... 10
6
Amgen, Inc. v. Kidney Ctr. of Delaware Cty., Ltd.,
7 95 F.3d 562 (7th Cir. 1996) ............................................................................................................ 12
8 Batalla Vidal v. Nielsen,
279 F. Supp. 3d 401 (E.D.N.Y. 2018) .............................................................................................. 3
9
Bhd. of Locomotive Eng’rs v. Mo.-Kan.-Tex. R.R. Co.,
10
363 U.S. 528 (1960) ........................................................................................................................ 11
11
Cal. Communities Against Toxics v. U.S. E.P.A.,
12 688 F.3d 989 (9th Cir. 2012) .......................................................................................................... 10
13 City & County of San Francisco v. Trump,
14 897 F.3d 1225 (9th Cir. 2018) ........................................................................................................ 13
15 East Bay Sanctuary Covenant v. Trump,
349 F. Supp. 3d 838 (N.D. Cal. 2018) .......................................................................................... 8, 9
16
East Bay Sanctuary Covenant v. Trump,
17 354 F. Supp. 3d 1094 (N.D. Cal. 2018) .......................................................................... 8, 12, 14, 15
18
East Bay Sanctuary Covenant v. Trump,
19 932 F.3d 742 (9th Cir. 2018) ........................................................................................................ 8, 9
20 Friery v. Los Angeles Unified Sch. Dist.,
448 F.3d 1146 (9th Cir. 2006) ........................................................................................................ 12
21
22 Gulliver v. Dalsheim,
739 F.2d 104 (2d Cir. 1984)............................................................................................................ 12
23
Harmon v. Thornburgh,
24 878 F.2d 484 (D.C. Cir. 1989) .................................................................................................... 9, 10
25
Idaho Farm Bureau Fed’n v. Babbitt,
26 58 F.3d 1392 (9th Cir. 1995) .......................................................................................................... 10
27 In re TFT-LCD (Flat Panel) Antitrust Litigation,
2013 WL 6055079 (N.D. Cal. Nov. 13, 2013) ............................................................................... 15
28
ii
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 5 of 22
Int’l Ass’n of Machinists & Aerospace Workers, AFL-CIO v. Eastern Air Lines, Inc.,
1 847 F.2d 1014 (2d Cir. 1988).......................................................................................................... 14
2
Kern Oil & Ref. Co. v. Tenneco Oil Co.,
3 840 F.2d 730 (9th Cir. 1988) .................................................................................................... 12, 15
4 Mendez-Gutierrez v. Gonzales,
444 F.3d 1168 (9th Cir. 2006) ........................................................................................................ 14
5
6 N. Cheyenne Tribe v. Norton,
503 F.3d 836 (9th Cir. 2007) .......................................................................................................... 11
7
N. Mariana Islands v. United States,
8 686 F. Supp. 2d 7 (D.D.C. 2009) .................................................................................................... 10
9 NAACP v. Trump,
10 315 F. Supp. 3d 457 (D.D.C. 2018) ................................................................................................ 10
11 Nat. Resources Def. Council, Inc. (NRDC) v. S.W. Marine, Inc.,
242 F.3d 1163 (9th Cir. 2001) .................................................................................................. 12, 15
12
Nat’l Grange of the Order of Patrons of Husbandry v. Cal. State Grange,
13
182 F. Supp. 3d 1065 (E.D. Cal. 2016)........................................................................................... 15
14
Nat’l Min. Ass’n v. U.S. Army Corps of Engineers,
15 145 F.3d 1399 (D.C. Cir. 1998) ........................................................................................................ 9
16 O.A. v. Trump,
2019 WL 3536334 (D.D.C. Aug. 2, 2019) ..................................................................................... 10
17
18 Pennsylvania v. President United States,
930 F.3d 543 (3d Cir. 2019).............................................................................................................. 3
19
Regents of the Univ. of Cal. v. DHS,
20 809 F.3d 476 (9th Cir. 2018) ............................................................................................................ 9
21
Regents of Univ. of Cal. v. DHS,
22 279 F. Supp. 3d 1011 (N.D. Cal. 2018) .......................................................................................... 10
23 Rodriguez v. County of Los Angeles,
891 F.3d 776 (9th Cir. 2018) .......................................................................................................... 12
24
25 San Francisco Aesthetics & Laser Med. Inc. v. Presidio Trust,
2010 WL 4226696 (N.D. Cal. Oct. 21, 2010)................................................................................. 14
26
Texas v. United States,
27 809 F.3d 134 (5th Cir. 2015) ............................................................................................................ 3
28
iii
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 6 of 22
Trump v. East Bay Sanctuary Covenant,
1 139 S. Ct. 782 (2018) ........................................................................................................................ 8
2
United States ex rel. Stone v. Rockwell Int’l Corp.,
3 282 F.3d 787 (10th Cir. 2002) ........................................................................................................ 13
4 United States v. Phelps,
283 F.3d 1176 (9th Cir. 2002) ....................................................................................................... 12
5
6 Statutes
7 5 U.S.C. § 706 ....................................................................................................................................... 9
8 8 U.S.C. § 1225(b)(1)(B)(iii)(IV) ......................................................................................................... 7
9 Other Authorities
10 U.S. Immigration and Customs Enforcement, Detention Statistics,
11 https://www.ice.gov/detention-management (last updated Aug. 30, 2019)...................................... 7
12 Wright & Miller, Retained Jurisdiction, 16 Fed. Prac. & Proc. Juris. § 3937.1 (3d ed.) ................... 12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
iv
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 7 of 22
1 I. NATIONWIDE RELIEF IS NECESSARY AND APPROPRIATE.
2 Contrary to the government’s suggestion, the motions panel was clear: a nationwide
3 injunction of the Rule could well be appropriate. The barrier to sustaining this Court’s grant of
4 nationwide relief was simply that, in the panel majority’s view, the connection between Plaintiffs’
5 injuries and the need for nationwide relief had not been drawn clearly enough. The motions panel
6 therefore remanded for further factual findings and further explanation of why nationwide relief is
7 necessary to remedy Plaintiffs’ harms. As supplemented, the record shows that nationwide relief “is
8 necessary to remedy Plaintiffs’ alleged harms.” Order 5, 6.
9 A. Nationwide Relief Is Necessary to Remedy Plaintiffs’ Specific Harms.
10 The limited injunction, even as the government claims it will be applied, does not provide
11 complete relief to Plaintiffs. And an injunction limited to Plaintiffs’ clients would prove even more
12 unworkable.
13 1. The Limited Injunction Does Not Provide Plaintiffs Complete Relief.
14 Notably, the government does not contest any of the facts in Plaintiffs’ evidence. Instead, the
15 government argues only that Plaintiffs’ evidence is not sufficient to warrant nationwide relief. But
16 Plaintiffs have now provided more than ample evidence of nationwide harm.
17 Innovation Law Lab (“Law Lab”): Law Lab maintains seven offices in California, Missouri,
18 Georgia, Oregon, and Texas. ECF No. 57-2 (Supp. Manning Decl.) ¶ 4. It provides diverse support
19 to asylum seekers, including through direct asylum representation, pro bono case placement and
20 attorney mentoring, pro se workshops, and the creation and distribution of technology and training
21 materials used by advocates and asylum seekers. Law Lab provides these services across the United
22 States and in Mexico. Many of the individuals Law Lab serves through its broad operations will be
23 subject to the Rule. Anything less than a nationwide injunction will result in Law Lab being forced
24 to divert significant resources in each of these areas.
25 Defendants contend that Law Lab has failed to show that it directly represents asylum
26 seekers affected by the Rule. See ECF No. 64 (Opp.) 15. But the evidence makes clear that Law Lab
27 provides direct representation to individuals both inside and outside the Ninth Circuit, and that those
28 it represents outside the Ninth Circuit will likely be subject to the Rule under the limited injunction.
1
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 8 of 22
1 See Supp. Manning Decl. ¶¶ 5, 15. Without a nationwide injunction, these individuals outside the
2 Ninth Circuit will be ineligible for asylum under the Rule, and representing them will thus impose
3 significant additional burdens on the organization. See id. ¶¶ 9, 11, 15 (explaining that withholding
4 and Convention Against Torture (CAT) cases are significantly more resource intensive). 1
5 Defendants also overlook the fact that Law Lab provides critical services to individuals
6 subject to the Rule who are not retained clients. 2 These operations take place across the country and
7 in Mexico, so the harms to them will persist under a limited injunction, and can only be remedied
8 fully by nationwide relief.
9 For instance, Law Lab places asylum seekers’ cases with pro bono attorneys and provides the
10 attorneys with “legal, technical, and strategic assistance in the preparation and presentation of claims
11 in Georgia, Kansas, Missouri, North Carolina, and Oregon, with expansion underway to New
12 Mexico and California.” Id. ¶ 5. Under an injunction limited to the Ninth Circuit, the Rule will apply
13 in most of these areas, meaning that a “significant percentage” of Law Lab’s new pro bono
14 placement cases will be “a great deal more complicated,” due to the higher burden imposed to secure
15 withholding and CAT relief and the lack of derivative applications. See ECF No. 3-4 (Manning
16 Decl.) ¶ 17; Supp. Manning Decl. ¶¶ 14, 20. Law Lab will therefore have to conduct additional legal
17 research for each case, hold “multiple strategy meetings with pro bono counsel,” and “shift a
18
19 1
It is not necessary, contrary to the government’s claim, for Plaintiffs to “identif[y] bona fide clients
they represent outside the Ninth Circuit” in order for this Court to order nationwide relief. Opp. 12.
20
The Ninth Circuit and Supreme Court refused to stay the nationwide injunction in the first asylum
21 ban case even though Plaintiffs there also did not identify specific individuals. Indeed, the
government fails to identify a single case so holding. Plaintiffs’ evidence is more than enough: it
22 makes clear that they serve asylum seekers inside and outside the Ninth Circuit; explains how they
serve those individuals; and specifies the proportion of those who will be affected by the Rule. See
23 Manning Decl. ¶¶ 14-15; Supp. Manning Decl. ¶¶ 9, 19; ECF No. 3-3 (Pinheiro Decl.) ¶ 13; ECF
24 No. 57-4 (Ramos Decl.) ¶¶ 5-6; ECF No. 3-5 (Sharp Decl.) ¶ 6; ECF No. 57-5 (Alvarez Decl.) ¶ 5;
ECF No. 3-2 (Smith Decl.) ¶ 15; ECF No. 57-3 (Supp. Smith Decl.) ¶ 5. That is sufficient.
25 2
The government asserts that to justify nationwide relief, Plaintiffs must “demonstrate[] that they
26 will represent individuals affected by the Rule outside the Ninth Circuit.” Opp. 16 (emphasis added);
see also id. at 14-15. There is also no requirement that Plaintiffs “represent,” rather than serve in
27 other capacities, individuals affected by the Rule. In any event, as already discussed, Law Lab meets
the government’s proffered test because it will represent individuals subject to the Rule if it is not
28 enjoined nationwide.
2
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 9 of 22
1 significant portion of [its] resources towards mentoring pro bono attorneys on complicated appeals
2 before the Board of Immigration Appeals and the circuit courts.” Manning Decl. ¶ 17.
3 Law Lab also creates “materials for pro bono attorneys and asylum applicants, including
4 printed guides, worksheets, training videos, self-help videos, and other resources that are used
5 around the country.” Id. ¶ 19; Supp. Manning Decl. ¶¶ 7, 10, 14. Absent nationwide relief, Law Lab
6 “would have to substantially revise its materials across programs, and create bifurcated resources
7 going forward.” Supp. Manning Decl. ¶ 14; see also id. (explaining that Law Lab will have to scrap
8 an educational video that has been in the works for months because it does not address the Rule’s bar
9 on asylum). This overhaul “would represent such a substantial burden that it could cause Law Lab to
10 cease most of its pro bono activities.” Manning Decl. ¶ 19 (emphasis added).
11 In addition, Law Lab operates pro se asylum workshops in Atlanta, Georgia; Kansas City,
12 Missouri; Portland, Oregon; and in Tijuana, Mexico, and, pursuant to a recent expansion, Ciudad
13 Juarez. Supp. Manning Decl. ¶¶ 7, 13. 3 The workshops require staff to spend “many hours training
14 volunteers on law, process, and [Law Lab’s] materials; preparing technology for use in the
15 workshops; and preparing individual clients and client applications,” and, to date, have relied on “a
16 centralized set of training materials and technology—all of which are designed around a uniform
17 application of the asylum regulations.” Id. ¶ 10. The Rule and the limited injunction both require
18 Law Lab to divert its resources to re-do its workshop programming to account for the application of
19 the Rule. Id. Providing information and advice at the workshops Law Lab conducts at these sites in
20 Mexico will also be especially difficult under a limited injunction, given that Law Lab does not
21 know in advance where the attendees will cross into the United States or be detained. Id. ¶ 12; see
22 also id. ¶ 13 (explaining that Law Lab not cannot simply “replicate” at sites in Ciudad Juarez the
23
3
24 Without citing any case, the government suggests that Plaintiffs must show that they operate across
every inch of the country to warrant nationwide relief. Opp. 14-15. That is wrong. Indeed, the Ninth
25 Circuit and Supreme Court refused to stay the nationwide injunction in the first asylum ban case
without such evidence. It is enough that Plaintiffs’ operations and the mobile individuals they serve
26 transcend neat geographic boundaries and extend to numerous jurisdictions across the country. See,
27 e.g., Pennsylvania v. President United States, 930 F.3d 543, 576 (3d Cir. 2019); Texas v. United
States, 809 F.3d 134, 188 (5th Cir. 2015); Batalla Vidal v. Nielsen, 279 F. Supp. 3d 401, 437-38
28 (E.D.N.Y. 2018).
3
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 10 of 22
1 materials it created to launch its Tijuana workshops, threatening its planned “program expansion”
2 there).
3 Further, the majority of individuals served at the workshops Law Lab holds outside the Ninth
4 Circuit will be subject to the Rule. Id. ¶ 9. As a result, Law Lab must “spend additional time
5 developing the facts and legal theories for” withholding and CAT claims, and must retrain
6 volunteers on how to screen for applicability of the Rule and on the new standards. Id.
7 Law Lab provides other critical services to asylum seekers, such as creating and updating a
8 technology platform used by advocates nationwide to represent asylum seekers. Absent nationwide
9 relief, Law Lab will be forced “to deploy expensive and limited engineering resources to recode its
10 software to create new analytical modeling” to address the Rule’s impact. Manning Decl. ¶ 19.
11 Critically, the record reflects that a significant proportion of the asylum seekers Law Lab
12 serves in these many capacities are subject to the Rule. See Supp. Manning Decl. ¶ 9 (“The majority
13 of persons served at these workshops are Central American asylum seekers who would be subject to
14 the asylum transit ban.”); Manning Decl. ¶¶ 16, 18. Defendants have pointed to nothing suggesting
15 that there has been or will be a marked shift in the population Law Lab serves. It is therefore not
16 speculative or “conjectural,” Opp. 15, to conclude that a significant portion of the people Law Lab
17 serves will be subject to the Rule if the injunction is limited to the Ninth Circuit. The record also
18 reflects that the significant burden required to overhaul all of Law Lab’s programming, materials,
19 and technology, which have been designed around uniform application of the asylum rules, directly
20 results from a limited injunction, and will persist absent nationwide relief. Contra Opp. 17-18. The
21 government has no answer to how these harms can be remedied absent a nationwide injunction. 4
22
4
Defendants wrongly suggest that Plaintiffs’ supplemental evidence does not go beyond the initial
23 declarations. Opp. 13. Law Lab’s supplemental declaration, for example, offers additional
information about the locations in which the organization operates, compare Manning Decl. ¶ 3, with
24 Supp. Manning Decl. ¶ 4; explains that Law Lab provides direct asylum representation to individuals
25 outside the Ninth Circuit, see Supp. Manning Decl. ¶¶ 5, 10; discusses how Law Lab’s model uses
collaborative operations and synchronized materials across program sites, id. ¶ 7; and clarifies the
26 locations of Law Lab’s BorderX program, id. ¶ 19, and the nature and locations of Law Lab’s work
related to the Migrant Protection Protocols, id. ¶ 18. The additional evidence also more thoroughly
27 addresses why nationwide relief is necessary to fully remedy the frustration of mission and diversion
harms Law Lab will suffer because of the Rule. See, e.g., id. ¶¶ 8-11, 13-14.
28
4
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 11 of 22
1 CARECEN: CARECEN’s injuries are also not fully remedied by the limited injunction.
2 Contra Opp. 18. At least 60% of CARECEN’s asylum-seeking clients entered the United States
3 outside the Ninth Circuit after transiting through another country without seeking asylum there.
4 Alvarez Decl. ¶ 5. If an asylum seeker enters, is apprehended, and given a credible fear interview
5 outside of the Ninth Circuit—as is the case for a sizable portion of CARECEN’s clients, see id.—
6 then that person likely will never make it to CARECEN. Indeed, the Rule will cause the asylum
7 seeker to fail her credible fear interview and, as a result, she may be quickly removed. 5 Thus, an
8 injunction limited to the Ninth Circuit, even as the government has agreed to implement it, would
9 still prevent a significant portion of CARECEN’s client base from ever reaching them. Absent
10 nationwide relief, then, CARECEN’s mission of serving Central American asylum seekers
11 regardless of where or how they entered the United States will be frustrated, see id. ¶ 5, and their
12 programs and per-case funding will be threated, see, e.g., Sharp Decl. ¶¶ 7-8.
13 Al Otro Lado: The limited injunction also cannot fully remedy Al Otro Lado’s injuries. Like
14 CARECEN, Al Otro Lado serves asylum seekers who do not enter the United States in the Ninth
15 Circuit. See Ramos Decl. ¶ 5. Unless those individuals are able to make their way back to the Ninth
16 Circuit, which many will not, see id. ¶ 6, they will not be covered by the limited injunction. As a
17 result, Al Otro Lado remains injured by the Rule, which frustrates its mission of “assist[ing]
18 migrants who wish to seek asylum in the United States.” Pinheiro Decl. ¶ 14. Moreover, to serve
19 those individuals still affected by the Rule without yet knowing to whom the Rule will apply, Al
20 Otro Lado will have to “overhaul” its training materials for volunteers and pro bono attorneys, and
21 its “service delivery model.” Id. ¶ 12. See also Ramos Decl. ¶¶ 9-10.
22
23
24
25 5
It would be possible for such an individual to reach CARECEN only if she satisfied the heightened
26 screening standard for withholding of removal and/or CAT and was permitted by the government to
travel to the Ninth Circuit—a series of unlikely events given the government’s detention power and
27 unclear “guidance” regarding the limited injunction. See Part I.A.2 infra. Even then, the government
would have to permit the individual to apply for asylum despite her having already failed the asylum
28 screening.
5
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 12 of 22
2. The Narrowed Injunction Also Causes Confusion and Allows the Government to
1 Circumvent Its Application.
2 The government states that, according to agency guidance, the limited injunction will cover
3 those who “are initially apprehended in the Ninth Circuit, are detained in the Ninth Circuit at the
4 time of adjudication, who after apprehension in the Ninth Circuit are transferred elsewhere, or whose
5 adjudications and proceedings occur in the Ninth [C]ircuit . . . .” Opp. 13 (emphasis added); but see
6 also Opp. 2 (describing the injunction as covering individuals whose “interview or adjudication”
7 occurs in the Ninth Circuit) (emphasis added). For the reasons discussed above, even if this guidance
8 were clear and administrable, nationwide relief would still be necessary. But the fact that the cryptic
9 email “guidance” to the agencies charged with implementing the Rule lacks the details or consistent
10 terminology necessary to understand the government’s application of an injunction limited to the
11 Ninth Circuit provides an additional reason for nationwide relief.
12 For example, the guidance fails to make clear how the injunction applies to an asylum seeker
13 who enters and has her threshold fear screening interview outside the Ninth Circuit. The individual
14 would be subject to the Rule and, accordingly, denied credible fear and instead be required to meet
15 the higher reasonable fear standard for withholding and/or CAT. If that individual (1) were able to
16 meet the higher standard and was placed into regular removal proceedings to apply for withholding
17 and/or CAT, and (2) her removal proceedings were moved to the Ninth Circuit, it is unclear whether
18 the immigration judge could override the fact that the Rule was initially applied to her and allow her
19 nonetheless to apply for asylum. The government does not spell this out. It states only that those
20 “whose adjudications and proceedings” Opp. 13 (emphasis added), and whose “interview or
21 adjudication,” Opp. 2, occur in the Ninth Circuit are subject to the injunction, without explaining
22 what that means. 6 This uncertainty is significant, as Plaintiffs frequently serve individuals who enter
23 6
The government’s brief uses the term “proceedings,” Opp. 13, but that term does not appear in the
24 actual guidance, creating further confusion. For instance, “interview” and “adjudication,” Opp. 2,
could refer to USCIS’s adjudications of credible fear screenings and affirmative asylum applications,
25 while “proceedings,” Opp. 13, could refer to the location where a defensive asylum application takes
place, leaving unprotected individuals like those described above. Beyond the differing descriptions
26 provided in the government’s brief, the government’s exhibits contain different formulations of who
27 is covered by the injunction and do not use consistent terminology, compounding the uncertainty.
Compare ECF No. 65-1 (EOIR guidance referring to “interview or adjudication”), with ECF No. 65-
28 3 (ICE guidance referring to “adjudication of the asylum application” but making no mention of
6
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 13 of 22
1 and have a credible fear adjudication outside of the Ninth Circuit, but who then apply for asylum in
2 the Ninth Circuit. See, e.g., Alvarez Decl. ¶ 6.
3 The confusion and workability concerns stemming from the geographically limited
4 injunction are compounded by the reality that, in many cases, neither the agency nor the asylum
5 seeker knows exactly where the asylum seeker entered the United States. See id. ¶ 11. Indeed, some
6 Notices to Appear show an asylum seeker’s location of entry as “unknown.” And even if the
7 government could possibly keep track of who remains eligible for asylum based on the complicated
8 patchwork set out in the guidance emails, having to do so would still impose serious burdens on
9 Plaintiffs. It will be difficult for them to determine whether the Rule applies to potential clients who
10 seek services, see id., and, because they cannot know ex ante whether a given individual will
11 ultimately be subject to the Rule, Plaintiffs will still have to provide advice to asylum seekers
12 through workshops, training materials, and other services that accounts for the Rule applying and not
13 applying, see Ramos Decl. ¶¶ 5-9, Supp. Manning Decl. ¶ 12.
14 Critically, moreover, the government elides that it will have significant control over who is
15 and is not subject to the Rule under the limited injunction. The government initially detains all
16 asylum seekers who are placed in expedited removal proceedings through at least their fear
17 screening interviews. See 8 U.S.C. § 1225(b)(1)(B)(iii)(IV). Even if they pass the screening and are
18 placed in regular removal proceedings, many asylum seekers are detained for the duration of those
19 proceedings, as are many asylum seekers who are placed directly into regular removal proceedings. 7
20 The government therefore can prevent any asylum seekers who are apprehended outside the Ninth
21 Circuit from ever reaching the Ninth Circuit by simply detaining them outside its jurisdiction and
22 denying them parole or bond. See ECF No. 57-6 (Reichlin-Melnick Decl.) ¶ 13 (discussing
23 government’s power to detain and transfer asylum seekers, and noting that the vast majority of ICE
24 detention centers are located outside the Ninth Circuit).
25
26 credible fear or an “interview”).
7
27 For example, on July 31, 2019, there were nearly 9,000 individuals in ICE custody who had passed
their fear screening interviews. See U.S. Immigration and Customs Enforcement, Detention
28 Statistics, https://www.ice.gov/detention-management (last updated Aug. 30, 2019).
7
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 14 of 22
3. An Injunction Limited to Plaintiffs and Their Retained Clients Would Not Fully
1 Remedy Plaintiffs’ Injuries and Would Be Unworkable.
2 The Ninth Circuit already declined the government’s request that the injunction be limited to
3 Plaintiffs’ clients. See No. 19-16487, Dkt. 3-1 at 22 (9th Cir.) (government stay brief requesting that
4 injunction be limited to “Plaintiffs’ identified clients”). This Court, the Ninth Circuit, and the
5 Supreme Court also rejected the same request in the context of the first asylum ban. See East Bay
6 Sanctuary Covenant v. Trump, 349 F. Supp. 3d 838, 866-67 & n.21 (N.D. Cal. 2018); East Bay
7 Sanctuary Covenant v. Trump, 354 F. Supp. 3d 1094, 1121 (N.D. Cal. 2018); East Bay Sanctuary
8 Covenant v. Trump, 932 F.3d 742, 779 (9th Cir. 2018); Trump v. East Bay Sanctuary Covenant, 139
9 S. Ct. 782 (2018) (denying stay). Yet even though the Ninth Circuit motions panel remanded the
10 issue of relief to this Court to determine whether a broader injunction was warranted, the
11 government again suggests that the injunction should be narrowed to run only to Plaintiffs and the
12 individuals they “identify as actual clients in the United States who are otherwise subject to the
13 rule.” Opp. 1. Such a limited injunction would not provide complete relief to Plaintiffs and would be
14 unworkable.
15 First, as explained above, Plaintiffs not only provide direct representation to clients all over
16 the United States, but also routinely serve a broad swath of asylum seekers through written and
17 digital materials, support to pro bono attorney networks, community education initiatives, and in-
18 person trainings, many of which are conducted in Mexico. See Supp. Manning Decl. ¶¶ 5, 7-10, 12-
19 14, 18-19; Pinheiro Decl. ¶¶ 4-7; Sharp Decl. ¶¶ 5-6. Many, if not most, of the individuals served by
20 these programs are not “actual clients” with retainers. Indeed, these programs are not intended only
21 for the limited number of individuals the organizations can actually represent. The assistance
22 Plaintiffs provide to these individuals is an integral part of Plaintiffs’ missions and work. See East
23 Bay, 354 F. Supp. 3d at 1121 (Plaintiffs’ “harms are not limited to their ability to provide services to
24 their current clients, but extend to their ability to pursue their programs writ large”). And for
25 desperate individuals trying to understand the asylum process, these services are critical.
26 Second, an injunction limited to Plaintiffs’ clients would be unworkable in many respects. To
27 start, Plaintiffs cannot know in advance which of these individuals will ultimately become an “actual
28 client[] in the United States.” Opp. 1. And the individuals Plaintiffs directly represent and serve in
8
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 15 of 22
1 other ways are a large and constantly evolving group. 8 Further, an injunction limited to the
2 individuals Plaintiffs directly represent would create an unworkable dynamic, as every potential
3 asylum seeker would seek representation from the four Plaintiffs, thereby disrupting existing legal
4 service networks and overwhelming the operations of these relatively small and underfunded
5 organizations. 9
6 B. The Types of Violations at Issue Here Further Support a Nationwide Injunction.
7 As shown above, Plaintiffs’ harms will not be remedied by anything less than a nationwide
8 injunction. For that reason, a nationwide injunction is appropriate. But the types of violations at issue
9 here provide additional support in favor of a nationwide injunction. See East Bay, 932 rolson@example.net.
10 The government dismisses the import of the APA’s language that unlawful agency action be
11 “set aside,” 5 U.S.C. § 706, see Opp. 20, but this Court has already held that such language is
12 relevant when determining relief in a preliminary injunction posture. See East Bay, 349 F. Supp. 3d
13 at 867; see also East Bay, 932 F.3d at 779 (noting, in the context of a decision denying a stay of a
14 TRO, that enjoining an unlawful policy on a universal basis is “commonplace in APA cases”)
15 (quoting Regents of the Univ. of Cal. v. DHS, 809 F.3d 476, 512 (9th Cir. 2018)). And Plaintiffs
16 never claimed that vacatur “is the only remedy,” Opp. 20; rather, under well-established case law,
17 vacatur is the “ordinary result,” Nat’l Min. Ass’n v. U.S. Army Corps of Engineers, 145 F.3d 1399,
18 1409 (D.C. Cir. 1998) (emphasis added) (quoting Harmon v. Thornburgh, 878 F.2d 484, 495 n.21
19 8
Requiring Plaintiffs to provide a running list of individuals they serve to the government and the
20 Court to facilitate enforcement of a plaintiff-specific injunction would be an impossible undertaking,
given the large number of asylum seekers Plaintiffs serve, e.g., through workshops and pro bono
21 networks across the country, and through materials used by non-plaintiff organizations. See East Bay
Sanctuary Covenant v. Trump, Tr. Prelim. In. Hr’g 7:3-13 (THE COURT: “What if the Court
22 entered a preliminary injunction and there were a future client of one of the organizations who is not
23 presently in the United States but crossed into the United States three months from now while this
case was pending and the preliminary injunction were in effect?” [GOVERNMENT]: “I think we’d
24 have to see the plaintiffs identify that person, Your Honor, and bring them within the scope of the
injunction. . . . .” THE COURT: “How many future proceedings do you anticipate the Court would
25 hold to amend the injunction? Would it be a weekly roundup? I mean, how would that work?”).
9
26 See East Bay Sanctuary Covenant v. Trump, Tr. TRO Hr’g, 56:4-8 (THE COURT: “I’d make these
organizations the most popular lawfirms at the border if I did that, wouldn’t I? This rule doesn’t
27 apply to you or your clients, but it applies to every other law firm that might be trying to help
asylum-seekers? How’s that going to work?”).
28
9
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 16 of 22
1 (D.C. Cir. 1989)). See also Idaho Farm Bureau Fed’n v. Babbitt, 58 F.3d 1392, 1405 (9th Cir. 1995)
2 (“Ordinarily when a regulation is not promulgated in compliance with the APA, the regulation is
3 invalid.”) (emphasis added); Cal. Communities Against Toxics v. U.S. E.P.A., 688 F.3d 989, 994 (9th
4 Cir. 2012). The government, moreover, has not argued that the factors typically used to assess
5 whether remand without vacatur is appropriate are present here. See Cal. Communities Against
6 Toxics, 688 F. 3d at 992 (explaining that the decision whether to remand without vacatur “depends
7 on how serious the agency’s errors are ‘and the disruptive consequences of an interim change that
8 may itself be changed’”) (quoting Allied-Signal, Inc. v. U.S. Nuclear Regulatory Comm’n, 988 F.2d
9 146, 150-51 (D.C. Cir. 1993)). 10
10 Likewise, circuit law is clear that uniformity in the immigration context is a relevant, even if
11 not dispositive, factor when determining the appropriate scope of relief. See ECF No. 63 (Supp. Br.)
12 10 (collecting cases). Nothing in the motions panel’s Order forecloses taking this factor into account.
13 Finally, contrary to the government’s contention, a limited injunction is not necessary to
14 allow other challenges to the Rule to proceed. District courts can and often do issue parallel or, as
15 this case makes plain, differing decisions. See Opp. 22 (noting that the U.S. District Court for the
16 District of Columbia denied a TRO in a similar challenge to the Rule); see also, e.g., Regents of
17 Univ. of Cal. v. DHS, 279 F. Supp. 3d 1011 (N.D. Cal. 2018); NAACP v. Trump, 315 F. Supp. 3d
18 457 (D.D.C. 2018). The existence of a nationwide injunction thus in no way eliminates the
19 opportunity for other litigants to obtain a separate, appealable merits determination. See, e.g., O.A. v.
20 Trump, 2019 WL 3536334, at *2 (D.D.C. Aug. 2, 2019) (granting plaintiffs’ motion for summary
21 judgment in a case challenging the first asylum ban, which this Court had already enjoined
22 nationwide on a preliminary injunction motion).
23
10
24 The government offers the cursory assertion that “[t]he possibility of remand without vacatur has
particular force in this case” because violations of the APA’s notice-and-comment procedures “can
25 be remedied even while the Rule is left in place.” Opp. 21 (quotation marks omitted). That is
mistaken. “[T]he damage done by [the agencies’] violation of the APA cannot be fully cured by later
26 remedial action” because the agencies are “far less likely to be receptive to comments” now that the
27 Rule is in effect. N. Mariana Islands v. United States, 686 F. Supp. 2d 7, 18 (D.D.C. 2009). See also
Am. Fed’n of Gov’t Emps., AFL-CIO v. Block, 655 F.2d 1153, 1158 (D.C. Cir. 1981). And neither
28 the Ninth Circuit nor the Supreme Court narrowed the injunction in the earlier asylum ban case.
10
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 17 of 22
1 C. The Equities Are Relevant to and Tip Sharply in Favor of Nationwide Relief.
2 Courts, including the Supreme Court and the Ninth Circuit, frequently take account of the
3 equities and the public interest when determining the appropriate scope of injunctive relief. See, e.g.,
4 Supp. Br. 12 (collecting cases); Bhd. of Locomotive Eng’rs v. Mo.-Kan.-Tex. R.R. Co., 363 U.S. 528,
5 531-32 (1960); N. Cheyenne Tribe v. Norton, 503 F.3d 836, 843 (9th Cir. 2007) (“When injunctive
6 relief is appropriate, the court must balance the equities between the parties and give due regard to
7 the public interest. Sometimes a full injunction is appropriate. But at other times, the equities
8 demand a partial injunction.”) (quotation marks omitted).
9 Plaintiffs’ argument is not, as the government suggests, see Opp. 23, that the mere fact that
10 the balance of the equities in this case tips sharply in their favor means that nationwide relief is
11 automatically warranted. Rather, Plaintiffs argue that the particular equities involved as they relate
12 to the scope of relief counsel in favor of a nationwide injunction given that asylum seekers will face
13 grave harm if wrongly returned to their persecutors. 11 See Supp. Br. 12-13 (explaining that the
14 Rule’s harms are immediate, nationwide, and irreparable, such that nationwide relief is the equitable
15 result). And as to those particular equities, the government has no response.
16 II. THE COURT HAS THE AUTHORITY TO RESTORE THE NATIONWIDE
SCOPE OF THE INJUNCTION.
17
Appellate courts have the inherent authority to retain jurisdiction over an appeal while
18
remanding for further proceedings on a particular issue. That is exactly what the Ninth Circuit has
19
done here. The motions panel expressly retained jurisdiction over the preliminary injunction appeal
20
while ordering a limited remand to this Court on the question of the injunction’s nationwide scope.
21
The government does not dispute that the Ninth Circuit has authority to do so, Opp. 7-8, but contests
22
only that the Ninth Circuit did so here. Indeed, the cases the government cites are not to the contrary.
23
They either stand for the uncontroversial proposition that ordinarily jurisdiction does not return to
24
25
11
In explaining that, “beyond examining the merits of a party’s arguments, a district court must
26 separately analyze whether nationwide relief is ‘necessary,’” the panel simply stated the obvious
27 proposition that success on the merits does not automatically warrant a nationwide injunction. Order
7. It did not, as the government suggests, Opp. 23, find that considerations relevant to the propriety
28 of issuing an injunction cannot also be relevant to the question of that injunction’s scope.
11
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 18 of 22
1 the district court until the mandate issues absent a remand, Opp. 6, or address circumstances where
2 there is no explicit remand, Opp. 7.
3 1. The general principle that the filing of a notice of appeal divests the trial court of
4 jurisdiction “over the matters being appealed” is not truly jurisdictional. It is a “judge-made” rule,
5 Nat. Resources Def. Council, Inc. (NRDC) v. S.W. Marine, Inc., 242 F.3d 1163, 1166 (9th Cir.
6 2001), that “is not absolute.” Instead, it is applied flexibly and “there are exceptions.” United States
7 v. Phelps, 283 F.3d 1176, 1181 n.5 (9th Cir. 2002). “The purpose of the rule is to promote judicial
8 economy and avoid the confusion of having the same issues before two courts simultaneously.” Id.
9 “It should not be employed to defeat its purposes nor to induce needless paper shuffling.” Kern Oil
10 & Ref. Co. v. Tenneco Oil Co., 840 F.2d 730, 734 (9th Cir. 1988) (quotation marks omitted). See
11 also Rodriguez v. County of Los Angeles, 891 F.3d 776, 790 (9th Cir. 2018) (explaining that the
12 divestiture principle “may be applied in a ‘less stern’ manner than true jurisdictional rules” and is
13 subject to exception); East Bay, 354 F. Supp. 3d at 1105 n.3 (similar).
14 Because the divestiture principle is flexible and judge-made, the court of appeals of course
15 has power to retain jurisdiction over an appeal while simultaneously restoring the district court’s
16 authority over a particular issue. See Wright & Miller, Retained Jurisdiction, 16 Fed. Prac. & Proc.
17 Juris. § 3937.1 (3d ed.) (“Power to deal with the issues presented on appeal inherently includes
18 authority to . . . regulate the course of further proceedings required to reach an effective decision.”);
19 id. (“[The use of retained jurisdiction] is a desirable [practice] . . . when there are special reasons to
20 facilitate a prompt return to the court of appeals.”); Friery v. Los Angeles Unified Sch. Dist., 448
21 F.3d 1146, 1150 (9th Cir. 2006) (“We therefore order a limited remand to the district court with
22 instructions to develop the factual record and to determine whether Friery has standing to bring
23 suit.”); Amgen, Inc. v. Kidney Ctr. of Delaware Cty., Ltd., 95 F.3d 562, 568 (7th Cir. 1996) (“[T]he
24 court of appeals has the power to direct further proceedings by the district court while retaining
25 jurisdiction of the appeal, even though the result is that both courts have for a short time
26 simultaneous jurisdiction . . . .”) (quotation marks omitted); Gulliver v. Dalsheim, 739 F.2d 104, 106
27 (2d Cir. 1984) (“The remand is a ‘limited’ one, . . . which requires the district court to find facts or
28 pass on issues while the court of appeals retains jurisdiction over the merits . . . .”) (quotation marks
12
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 19 of 22
1 omitted); United States ex rel. Stone v. Rockwell Int’l Corp., 282 F.3d 787, 803 (10th Cir. 2002)
2 (“We therefore make a limited remand for further proceedings in accord with this order, further
3 findings, conclusions and a further ruling on the jurisdictional issue . . . .”).
4 And, as a limited remand while the court of appeals retains jurisdiction over the appeal, no
5 mandate needs to—or even could—issue before the district court is free to undertake the proceeding
6 directed by the court of appeals. Contra Opp. 6.
7 Here, the Ninth Circuit invoked its power to issue a limited remand on the appropriate scope
8 of the injunction: “While this appeal proceeds, the district court retains jurisdiction to further
9 develop the record in support of a preliminary injunction extending beyond the Ninth Circuit.” Order
10 8-9. See also id. at 9 (“Because the record is insufficiently developed as to the question of the
11 national scope of the injunction, we vacate the injunction to the extent it applies outside California
12 and remand to the district court for a more searching inquiry into whether this case justifies the
13 breadth of the injunction imposed.”) (quoting City & County of San Francisco v. Trump, 897 F.3d
14 1225, 1245 (9th Cir. 2018)); Dissent from Order 4 n.4 (describing Order as “remand[ing] the case to
15 the district court for a partial do-over” on the scope of relief).
16 In other words, rather than waiting for this Court to issue an indicative ruling—a device the
17 government agrees is available, see Opp. 9—the Ninth Circuit proactively gave the Court advance
18 permission to act regarding the scope of the injunction while it retained jurisdiction over the
19 preliminary injunction appeal. Notably, in its Stay Application filed with the Supreme Court, the
20 government agreed that the Ninth Circuit gave this Court jurisdiction to restore the nationwide scope
21 of the injunction: “The court stated that the district court retained jurisdiction to further develop the
22 record and to re-extend the injunction beyond the Ninth Circuit.” Barr v. East Bay Sanctuary
23 Covenant, No. 19A230, Application for a Stay Pending Appeal at 3 (Aug. 26, 2019) (emphasis
24 added). 12 Yet in its opposition brief to this Court, the government has now taken the opposite
25 position, maintaining that “the Ninth Circuit contemplated further factual development from this
26
12
27 Available at https://www.supremecourt.gov/DocketPDF/19/19A230/113613/20190826132549423
_East%20Bay%20II%20Stay%20FINAL.pdf. Plaintiffs’ opposition to the government’s Supreme
28 Court Stay Application is actually due September 4, not September 3. Contra Opp. 5.
13
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 20 of 22
1 Court, nothing more, during the pendency of the appeal.” Opp. 8. Putting aside the inconsistency, the
2 government fails to explain what purpose the Ninth Circuit’s limited remand would have if this
3 Court lacked power to take any action pending completion of the appeal, especially because district
4 courts already possess authority to issue additional findings notwithstanding a pending appeal. 13 See,
5 e.g., East Bay, 354 F. Supp. 3d at 1105 n.3 (noting a district court’s authority to “fil[e] written
6 findings of fact and conclusions of law in support of” rulings on appeal) (citations and quotation
7 marks omitted). And the government’s cases about exceeding the scope of a remand are inapposite.
8 Opp. 8 (citing Mendez-Gutierrez v. Gonzales, 444 F.3d 1168, 1172 (9th Cir. 2006) (addressing
9 situation where a party raised new issue on remand that was outside the scope of the questions
10 remanded for consideration after mandate); San Francisco Aesthetics & Laser Med. Inc. v. Presidio
11 Trust, 2010 WL 4226696, at *4 (N.D. Cal. Oct. 21, 2010) (ignoring party’s “waiver and release”
12 arguments where remand was for computation of amounts owed)).
13 2. Because the Ninth Circuit gave this Court permission to restore the scope of the injunction,
14 this Court need not rely on Federal Rule of Civil Procedure 62(d) (previously Rule 62(c)), which
15 enables a district court to “suspend, modify, restore, or grant an injunction” even while an appeal of
16 an injunction is pending. Cf. Int’l Ass’n of Machinists & Aerospace Workers, AFL-CIO v. Eastern
17 Air Lines, Inc., 847 F.2d 1014, 1018 (2d Cir. 1988) (explaining that Rule 62(d) applies “where the
18 consent of the court of appeals has not been obtained”). Nonetheless, should the Court additionally
19 wish to rely on Rule 62(d), it would be well within the Rule’s coverage.
20
21 13
The government wrongly implies that the Ninth Circuit motions panel knew the briefing schedule
on Plaintiffs’ emergency motion asking this Court to consider supplemental evidence and restore the
22
nationwide scope of the injunction when it set the briefing schedule on the preliminary injunction
23 appeal. See Opp. 9 (“[A]ccepting plaintiffs’ contention would create the anomalous result that the
Ninth Circuit sanctioned the authority of this Court to change the subject of the appeal, while
24 nonetheless insisting that the Government’s complete opening brief be due just 5 days after the
submission of this brief on ‘September 3, 2019.’”) (emphasis added). Of course, as Plaintiffs only
25 filed their emergency motion with this Court after the Ninth Circuit issued its Order authorizing the
26 limited remand, the Ninth Circuit could not have known what the briefing schedule in this Court
would be. And in fact, the Ninth Circuit motions panel extended the preliminary injunction briefing
27 schedule beyond the dates originally set, giving the government more time to file their opening brief.
Compare No. 19-16487, Dkt. 2 (setting deadline for government’s opening brief as Aug. 26, 2019),
28 with Order at 9 (extending deadline for government’s opening brief to Sept. 3, 2019).
14
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 21 of 22
1 A district court may use Rule 62(d) “to preserve the status quo during the pendency of an
2 appeal.” NRDC, 242 rolson@example.net. Contrary to the government’s assertions, see Opp. 7, for purposes
3 of the Rule 62(d) analysis, the status quo to be preserved is as of the time the appeal was taken. See,
4 e.g., NRDC, 242 F.3d at 1166; Nat’l Grange of the Order of Patrons of Husbandry v. Cal. State
5 Grange, 182 F. Supp. 3d 1065, 1072 (E.D. Cal. 2016) (“The status quo is measured at the time the
6 appeal is filed.”); In re TFT-LCD (Flat Panel) Antitrust Litigation, 2013 WL 6055079, at *1 (N.D.
7 Cal. Nov. 13, 2013) (same). Restoring the nationwide scope of the injunction thus would preserve,
8 not alter, the status quo at the time the government noticed its appeal of the preliminary injunction.
9 Rule 62(d) can also be used to issue a second injunction. See East Bay, 354 F. Supp. 3d at 1105 n.3.
10 Contrary to the government’s suggestion, Opp. 7, restoring the scope of the injunction does
11 not present any of the concerns that could undermine the applicability of Rule 62(d). Indeed, there is
12 no concern that there will be “confusion” from having “the same issues before two courts
13 simultaneously” where the court of appeals itself considered the circumstances and expressly
14 directed the limited remand here. NRDC, 242 rolson@example.net. And because the appeal in this case will
15 not be heard until the Ninth Circuit’s December calendar, there will be more than enough time for
16 the government to address the reinstated scope in supplemental briefing or its reply brief.
17 Alternatively, the government could take an appeal from any subsequent order this Court issues,
18 which would be consolidated with the pending appeal, as happened in the first asylum ban case. See
19 Case Nos. 18-17274 and 18-17436 (9th Cir.). This would obviate the need for a separate, additional
20 proceeding and appeal on the issue many months from now and thereby avoid “needless paper
21 shuffling.” Kern Oil, 840 rolson@example.net.
22 Finally, Plaintiffs agree with the government that the Court may use the indicative ruling
23 procedure under Federal Rule of Civil Procedure 62.1. However, as that procedure is the flipside of
24 advance permission to undertake a limited remand, which the Ninth Circuit already gave, the Court
25 need not use it.
26 CONCLUSION
27 For the foregoing reasons, Plaintiffs’ motion should be granted.
28
15
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
Case 4:19-cv-04073-JST Document 67 Filed 09/03/19 Page 22 of 22
Dated: September 3, 2019 Respectfully submitted,
1
2 Katrina Eiland (SBN 275701) /s/ Lee Gelernt
Cody Wofsy (SBN 294179) Lee Gelernt*
3 Spencer Amdur (SBN 320069) Omar Jadwat*
Julie Veroff (SBN 310161) Anand Balakrishnan*
4 AMERICAN CIVIL LIBERTIES UNION AMERICAN CIVIL LIBERTIES UNION
FOUNDATION FOUNDATION
5 IMMIGRANTS’ RIGHTS PROJECT IMMIGRANTS’ RIGHTS PROJECT
6 39 Drumm Street 125 Broad St., 18th Floor
San Francisco, CA 94111 New York, NY 10004
7 T: 269-252-1401 T: 269-252-1401
F: 269-252-1401 F: 269-252-1401
8 rolson@example.net rolson@example.net
rolson@example.net rolson@example.net
9 rolson@example.net
10 rolson@example.net rolson@example.net
11 Melissa Crow* Christine P. Sun (SBN 218701)
SOUTHERN POVERTY LAW CENTER Vasudha Talla (SBN 316219)
12 1101 17th Street, NW Suite 705 Angélica Salceda (SBN 296152)
Washington, D.C. 20036 AMERICAN CIVIL LIBERTIES UNION OF
13
T: 269-252-1401 NORTHERN CALIFORNIA, INC.
14 F: 269-252-1401 39 Drumm Street
rolson@example.net San Francisco, CA 94111
15 T: 269-252-1401
Mary Bauer* F: 269-252-1401
16 SOUTHERN POVERTY LAW CENTER rolson@example.net
1000 Preston Avenue rolson@example.net
17
Charlottesville, VA 22903 rolson@example.net
18 T: 269-252-1401
F: 269-252-1401 Baher Azmy**
19 rolson@example.net Angelo Guisado**
Ghita Schwarz**
20 CENTER FOR CONSTITUTIONAL RIGHTS
Attorneys for Plaintiffs 666 Broadway, 7th Floor
21
New York, NY 10012
22 Telephone: 269-252-1401
*Admitted Pro hac vice Facsimile: 269-252-1401
23 ** Pro hac vice application forthcoming rolson@example.net
rolson@example.net
24 rolson@example.net
25
26
27
28
16
Reply in Support of Emergency Mot. to Restore Nationwide Relief
Case No.: 3:19-cv-04073
|
776 F.2d 665
1985-2 Trade Cases 66,833
Robert J. WILL, et al., Plaintiffs-Appellants, Cross-Appellees,v.COMPREHENSIVE ACCOUNTING CORPORATION, et al.,Defendants-Appellees, Cross- Appellants.
Nos. 84-2761, 84-2762.
United States Court of Appeals,Seventh Circuit.
Argued Sept. 23, 1985.Decided Oct. 28, 1985.Rehearing Denied Nov. 25, 1985.
Francis J. McConnell, McConnell & Assoc., Chicago, Ill., for plaintiffs-appellants, cross-appellees.
David G. Lynch, Rudnick & Wolfe, Chicago, Ill., for defendants-appellees, cross-appellants.
Before CUMMINGS, Chief Judge, EASTERBROOK, Circuit Judge, and GRANT, Senior District Judge.*
EASTERBROOK, Circuit Judge.
1
Franchising spread from hamburgers to the preparation of tax returns and then to the provision of regular accounting services. The Comprehensive Accounting Corporation authorizes accountants to provide service in Comprehensive's name. The franchisees agree to live up to Comprehensive's standards and to supply reports to clients in Comprehensive's style and bearing its trademark. This appears to be useful to clients--perhaps because of the standardized method of doing business, perhaps because of Comprehensive's policing of its franchisees. Comprehensive is profitable, and so are the franchisees. The business of a franchisee apparently may be sold for more than two times annual gross revenues, while businesses of accountants in solo practice usually fetch much less.
2
Comprehensive's services to its franchisees include data processing. The accountants send data from clients' businesses to Comprehensive, which returns reports generated by its large computer. The contract between Comprehensive and its franchisees permits the franchisees to have data processed elsewhere, provided "the Comprehensive E.D.P. [electronic data processing] is not competitive for like services of the same quality, with the same turnabout time." In recent years small computers have become less expensive, and independent firms have written programs for these small computers that enable them to generate accounting reports and otherwise manage clients' data. Comprehensive's franchisees became interested in these smaller computers, which potentially could cut their costs of computation below the prices offered by Comprehensive.
3
Comprehensive did not take this gracefully. It had a large computer in place; the cost of this was sunk, so payments from franchisees for computation were mostly profit. Comprehensive's revenues from data processing reached $3.5 million yearly; these revenues were the firm's principal source of profit. The franchisees' savings from buying their own small computers would translate into losses for Comprehensive. It therefore insisted that franchisees use only small computers that would produce reports that looked exactly like those Comprehensive produced itself. Comprehensive says that it insisted on duplication in order to protect the reputation of its service mark and maintains that it was entitled by contract to be finicky; the franchisees say that Comprehensive was just postponing the inevitable, in breach of contract.
4
Duplication was hard. The commercially available programs were not designed to ape Comprehensive's reports, and the output of Comprehensive's printer also looked different from the output of the low-price printers some franchisees wanted to use. Comprehensive promised to find and approve a small computer system that would meet its quality standards. It settled on a system that would be restricted to franchisees with 200 or more clients; most had fewer. Even the approval of this system moved slowly, with several changes of configuration that led some franchisees to conclude that Comprehensive would never be satisfied. In 1982 it announced that it would approve a system with programs Comprehensive had designed itself; it apparently planned to charge enough for these to make up for lost revenues from its larger computer.
5
Several franchisees decided to strike out on their own. Comprehensive threatened them with termination when it found out about this, so some franchisees installed small computers without informing Comprehensive. Comprehensive terminated five franchises in August 1981, sued three of them for substantial sums, and tried to persuade their clients to migrate to other accountants. As other franchisees began to use different systems, Comprehensive terminated them too.
6
Ten of the terminated franchisees and two others brought this suit against Comprehensive, one of its subsidiaries, the chairman of its board, and its president. They maintained that Comprehensive broke its contract by insisting that they purchase computation from Comprehensive even though it was "not competitive for like services of the same quality, with the same turnabout time." Comprehensive replied that the small computers did not supply the "same quality" service, and that at all events each of the franchisees had violated other provisions of the contract. The franchisees also argued that Comprehensive had violated Sec. 1 of the Sherman Act, 15 U.S.C. Sec. 1, by "tying" data processing (the tied product) to the franchise (the tying product).
7
The district court conducted a jury trial. The jury returned a general verdict for the defendants on the antitrust theory. Six plaintiffs prevailed on the contract theory and six lost. The largest award was $37,678 to plaintiff Cahill; plaintiffs Rudd and Miller received $1; the others came out in between. Everybody appeals. Comprehensive and the other defendants say that the damages were excessive (they do not challenge the finding of liability); the six franchisees who lost on their contract claims say the verdicts are irrational because there is no significant difference between the winning and losing plaintiffs. All 12 franchisees challenge several of the instructions to the jury on both antitrust and contract claims; they also dispute some of the district court's decisions to admit evidence.
8
* Section 1 of the Sherman Act prohibits any "contract, combination ..., or conspiracy, in restraint of trade...." The plaintiffs therefore needed to prove some cooperative undertaking. Establishing the necessary combination in a tying case requires exceeding subtlety, because the substantive theory of tying law depends on coercion to take two products as a package. The joint sale of two products is a "tie" only if the seller exploits its control of the tying product "to force the buyer into the purchase of a tied product that the buyer either did not want at all, or might have preferred to purchase elsewhere on different terms." Jefferson Parish Hospital District No. 2 v. Hyde, 466 U.S. 2, 104 S. Ct. 1551, 1558, 80 L. Ed. 2d 2 (1984). See also Jack Walters & Sons Corp. v. Morton Building, Inc., 737 F.2d 698, 703-05 (7th Cir.), cert. denied, --- U.S. ----, 105 S. Ct. 432, 83 L. Ed. 2d 359 (1984). A tie within the meaning of antitrust depends on showing that the buyer did not want to take both products from the same vendor. "[T]here is nothing inherently anticompetitive about packaged sales. Only if [buyers] are forced to purchase [the tied] services as a result of the [seller's] market power would the arrangement have anticompetitive consequences." Hyde, supra, 104 S.Ct. at 1565. If the buyer wants both products together--as, for example, the buyer of an automobile wants both chassis and engine together, even though they could be sold separately--there is no forcing, and so there is no tie-in.
9
As a linguistic matter, proof that the buyer took both products in a package against his will negates the existence of a "contract, combination, or conspiracy." The plaintiffs' position here is complicated by their contract, which they insist establishes that they did not agree to buy their computing services from Comprehensive. Tying is not cooperation among competitors, the focus of Sec. 1, it is aggressive conduct akin to monopolization under Sec. 2 of the Sherman Act. Tying usually is challenged under Sec. 3 of the Clayton Act, 15 U.S.C. Sec. 14, which addresses the practice explicitly. Joint action becomes an issue only when the plaintiff tries to take advantage of per se rules under Sec. 1.
10
Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134, 88 S. Ct. 1981, 20 L. Ed. 2d 982 (1968), overruled in part on other grounds by Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 104 S. Ct. 2731, 81 L. Ed. 2d 628 (1984), provides plaintiffs with an escape hatch. The Court stated that a franchisee "can clearly charge a combination between [the franchisor] and himself, as of the day he unwillingly complied with the restrictive franchise agreements, ... or between [the franchisor] and other franchise dealers, whose acquiescence in [the] firmly enforced restraints was induced by 'the communicated danger of termination' ..." 392 U.S. at 142, 88 S.Ct. at 1986. Although the franchise contract in Perma Life established the tie-in of which the franchisees complained, the essential principle--that "unwilling compliance" satisfies the joint action requirement of Sec. 1--applies to our case too.
11
This portion of Perma Life survived both Copperweld and Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 104 S. Ct. 1464, 79 L. Ed. 2d 775 (1984). Copperweld rejected an alternative holding in Perma Life that an agreement among jointly owned corporations satisfied the combination requirement of Sec. 1, but it expressly refrained from disturbing the holding we quoted above (see 104 S. Ct. at 2739). Monsanto made it harder to show joint action concerning price within a system of distributing products that is concededly full of joint action; Monsanto helps to separate the legitimate and illegitimate components of a generally cooperative system of distribution and has nothing to say about the meaning of the joint action requirement in a tying case. See Black Gold, Ltd. v. Rockwool Industries, Inc., 732 F.2d 779, 780 (10th Cir.), cert. denied, --- U.S. ----, 105 S. Ct. 178, 83 L. Ed. 2d 113 (1984).
12
We therefore must decide whether the district court's charge correctly stated the Perma Life rule. The court told the jury:
13
A conspiracy or agreement ... may be shown to have existed in either of two ways. First, as between Comprehensive and the individual plaintiffs themselves, if the individual plaintiffs unwillingly accepted and agreed with the alleged tying arrangement. Second, the conspiracy may also be shown to have existed between Comprehensive and franchise dealers other than the plaintiffs whose agreement to Comprehensive's alleged tying agreement was induced by a communicated danger of termination....
14
The plaintiffs in this case must present direct or circumstantial evidence that Comprehensive and its franchisees had a conscious commitment to a common scheme designed to achieve an unlawful purpose....
15
This concept of a conscious commitment or a meeting of the minds means more than a mere showing that any franchisee conformed or acquiesced in the use of Comprehensive's mainframe or its approved mini computer for its data processing. It means that the franchisee unwillingly agreed to use Comprehensive for its data processing, an agreement induced by a fear of termination.
16
The first paragraph of this instruction is lifted straight from Perma Life. The plaintiffs say that the second and third paragraphs required the jury to find that the franchisees not only knuckled under to Comprehensive but also wanted to produce anticompetitive effects. This additional requirement, they say, was erroneously smuggled into the instructions from Monsanto. Certainly the plaintiff in a tying case need not show that it wanted the anticompetitive scheme to succeed; the buyer in a tying case is a victim, and few victims want to pay monopoly overcharges. But we do not read the instructions as plaintiffs do. The court had somehow to get the jury to distinguish between the voluntary purchase of two products together, which is not a tie at all, and submission to the seller's forcing, which is both the definition of a tie and (under Perma Life ) the definition of the agreement. The last sentence makes the point in a way lay jurors can understand. Plaintiffs received the Perma Life instruction to which they were entitled.
II
17
The court told the jury that in order to find a violation of the antitrust laws, it had to find six elements: (1) that data processing and the franchise are separate products;1 (2) that the products were tied; (3) that there was an agreement; (4) that Comprehensive had market power; (5) that the plaintiffs suffered direct injury; and (6) that the damages were reasonably ascertainable. The court also instructed the jury that Comprehensive was entitled to use a tie-in if that was the "least restrictive means" of upholding its standards under its trademark. See Benjamin Klein & Lester F. Saft, The Law and Economics of Franchise Tying Contracts, 28 J.L. & Econ. 345 (1985) (discussing the rationale of this defense). Plaintiffs challenge several of these instructions, most vigorously those concerning the justification of protecting the trademark.
18
These instructions may have a lot more to do with plaintiffs' defeat than the conspiracy instruction. After all, six plaintiffs prevailed on their contract claims, and several recovered damages based on the overcharge they paid for Comprehensive's service. The jury must have found that they were forced to (and did) use Comprehensive's computing services on pain of termination. Under the district court's instructions, they therefore also would have found a combination satisfying Sec. 1. The plaintiffs must have lost on their antitrust claims for some other reason.
19
We need not sift through the other instructions, however, because plaintiffs' case has a fatal weakness. They did not establish market power. They failed as a matter of law. This failure makes every other element of the anti-trust case irrelevant.
20
The purpose of the rule against certain tying arrangements is to stop the extension of market power from one product to another. Hyde, supra, 104 S.Ct. at 1558-60 & n. 20; Northern Pacific Ry. v. United States, 356 U.S. 1, 78 S. Ct. 514, 2 L. Ed. 2d 545 (1958); International Salt Co. v. United States, 332 U.S. 392, 68 S. Ct. 12, 92 L. Ed. 20 (1947); Carl Sandburg Village Condominium Ass'n No. 1 v. First Condominium Development Co., 758 F.2d 203 (7th Cir.1985). The idea is that a firm with a monopoly of one product may refuse to deal except on terms that will lead to a monopoly of another. It also may be possible to use tying arrangements to extract a higher profit through price discrimination.2 Both the extension of power and the practice of price discrimination are impossible unless the seller has substantial market power. This means power over price, see Hyde, supra, 104 S.Ct. at 1566 n. 46, the ability to induce buyers to pay more money by cutting back the supply of goods available for purchase. See Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1, 9-10, 19-20, 22 n. 40, 99 S. Ct. 1551, 1556-57, 1562-63, 1564 n. 40, 60 L. Ed. 2d 1 (1979); National Collegiate Athletic Ass'n v. Board of Regents, --- U.S. ----, 104 S. Ct. 2948, 2961-63, 2967-68, 82 L. Ed. 2d 70 (1984). The best way to show power over price is to establish directly that the price of the tied package is higher than the price of components sold in competitive markets.
21
The early tying cases involved patented products, and the Supreme Court assumed that the patents conferred market power. Other cases have required the plaintiffs to prove the defendant's power, and the Supreme Court's two most recent tying decisions have gone for defendants in light of the plaintiffs' failures. In Hyde the Court assumed that the defendant had a market share of 30% of surgical procedures, which it exploited to force patients to take anesthesia from an unwanted provider; still, it concluded, this was not the sort of power that a plaintiff must show, and it cited earlier monopolization cases to suggest that the plaintiff must establish more than just a substantial share of all sales. Hyde, supra, 104 S.Ct. at 1566-68 & n. 43. The Vertical Restraint Guidelines of the Department of Justice accurately reflect this authority in treating as lawful any tying arrangement affecting less than 30% of a relevant market. Vertical Restraint Guidelines Sec. 5.3 (1985).
22
United States Steel Corp. v. Fortner Enterprises, Inc., 429 U.S. 610, 97 S. Ct. 861, 51 L. Ed. 2d 80 (1977) (Fortner II ), considered "uniqueness," the other traditional way to establish market power in tying cases. U.S. Steel offered nonrecourse, low-interest, 100% credit to those who bought its prefabricated houses; you could not get the loan without taking the house. The Court treated this as unique. No one else offered a similar package. Yet it held that as a matter of law factual uniqueness was not enough; in order to establish market power by showing a unique package, the plaintiff must prove that "the seller has some advantage not shared by his competitors in the market for the tying product." 429 U.S. at 620, 97 S.Ct. at 868. In other words, the plaintiff must show a barrier to entry that prevents competition.3 If rivals may design and offer a similar package for a similar cost, there is no barrier, and without a barrier there is no market power. Fortner II, supra, 429 U.S. at 622, 97 S. Ct. at 868: "Without any evidence that the [seller] had some cost advantage over its competitors--or could offer a form of financing that was significantly differentiated from that which other lenders could offer if they so elected--the unique character of its financing does not support the conclusion [of] market power". See Spartan Grain & Mill Co. v. Ayers, 735 F.2d 1284 (11th Cir.1984), cert. denied, --- U.S. ----, 105 S. Ct. 785, 83 L. Ed. 2d 779 (1985), which overturned a jury verdict and held as a matter of law that "uniqueness" means the inability of a seller's rivals to offer a similar package, not simply the fact that no rival has chosen to do so. See also W. Kenneth Jones, The Two Faces of Fortner: Comment on a Recent Antitrust Opinion, 78 Colum.L.Rev. 39, 40-43 (1978); Kenneth W. Dam, Fortner Enterprises v. United States Steel: "Neither a Borrower, Nor a Lender Be", 1969 Sup.Ct.Rev. 1, 23-28 (an analysis of "uniqueness" repeatedly cited with approval in both Fortner II and Hyde ).
23
Plaintiffs did not claim, let alone offer evidence to show, that the price they paid for the franchise-computation package is higher than the price for those two products purchased in separate markets. The evidence--which shows that franchisees' businesses were worth more as a result of being members of the Comprehensive system--tends to show that the package Comprehensive furnished on the whole was beneficial, not priced at a monopoly level. They therefore failed to show market power directly. Kypta v. McDonald's Corp., 671 F.2d 1282 (11th Cir.), cert. denied, 459 U.S. 857, 103 S. Ct. 127, 74 L. Ed. 2d 109 (1982), holds that unless the plaintiff shows that the package price was elevated the suit must be dismissed without further ado. That is a sound position, for unless the package price exceeds the competitive price of its components, we have a replay of Fortner II. There U.S. Steel used "cheap financing in order to sell expensive houses" (429 U.S. at 622, 97 S. Ct. at 868); here, for all the evidence shows, Comprehensive licensed its trademark cheaply in order to sell expensive computation.
24
To the extent plaintiffs may use market share or uniqueness as proxies for power over price, they failed on both counts. There is no evidence about Comprehensive's market share. The whole Comprehensive system is a pygmy among the large, national firms. There are also thousands of smaller firms. Many businesses produce accounting services internally, and these in-house services also are part of the market because they are substitutes for what the plaintiffs do.
25
Plaintiffs' principal argument was uniqueness. All they proved, however, is that Comprehensive's franchising system is unusual; there are few similar systems, and Comprehensive may be the most successful franchisor of accountants. Spartan holds that such a showing is inadequate. Plaintiffs did not show or try to show that Comprehensive has a cost advantage over rivals and potential rivals, that there is a barrier to entry into the business of franchising. They did not show or try to show that rivals could not produce a similar package for a similar cost; without such a showing, they must lose.4
26
The Supreme Court emphasized in Hyde, 104 S. Ct. at 1558-59, 1565, and again in National Collegiate Athletic Ass'n, supra, 104 S.Ct. at 2962 n. 26, that tying may have competitive benefits. Sometimes the sale of the package is just a way to compete. Some accounting firms have offices throughout the nation and offer comprehensive services; a package franchising system may be a way to compete with the larger firms while retaining the advantages of independent ownership. Just about every conceivable method of organizing service is used in this business--national partnerships with blanket coverage, independent one-man offices, smaller partnerships, franchised systems, and in-house production. Each, including methods that revolve around tied packages, may be beneficial to some customers. In a competitive market the customers will pick the arrangements that work best for them. Antitrust law is based on the premise that when markets are competitive, the process of sellers' rivalry and buyers' choice produces the best results. Unless courts insist on a showing of market power, they run the risk of deleting one of the existing options and so reducing rather than enhancing the vigor of competition and the welfare of consumers.
27
Comprehensive had no market power. For that matter, it is not to be believed that Comprehensive wanted to monopolize (or posed a threat of monopolizing) computation services, the tied product. Competition in the computation business is exceptionally vigorous; plaintiffs' contract case depended on establishing that this vigorous competition made it cheaper to secure computation from vendors other than Comprehensive. Even if Comprehensive had some power, then, plaintiffs still must lose. "One of the threshold criteria the plaintiff must satisfy ... is that there is a substantial danger that the tying seller will acquire market power in the tied product market." Carl Sandburg Village Condominium Ass'n, supra, 758 ptaylor@example.org. This case therefore did not need to go to the jury.
III
28
We have bypassed the challenges to the jury instructions on the antitrust issues because, in light of their failure to show market power, the plaintiffs had no case. The contract issues are altogether different. Six plaintiffs prevailed on the contract claims, and the defendants have not challenged the sufficiency of the evidence to support these verdicts. We deal here with the defendants' argument that the damages are excessive. Then we take up in Part IV the losing plaintiffs' contentions.
29
The plaintiffs who recovered the largest verdicts are Cahill ($37,678) and Van Winkle ($15,000). They are the only two among the 12 plaintiffs who are still franchisees. Comprehensive maintains that the jury must have awarded damages to Cahill and Van Winkle for the difference between the price they paid to Comprehensive for computation and the cost they would have incurred had they been able to secure computation elsewhere. This award is impermissible, Comprehensive says, because its only breach of contract was the termination (or threatened termination) of those who took their computing business elsewhere. The provision of computation for a price was not itself a breach. (This argument applies to plaintiffs Partridge and Leebelt, too.)
30
Comprehensive also asserts that the verdict for Cahill must have included the costs Cahill incurred in defending an arbitration proceeding Comprehensive commenced to obtain a declaration that Cahill was in breach of contract for not using Comprehensive's computation. The arbitrator concluded that Cahill's small computer complied fully with the contract and ordered Comprehensive to retain Cahill as a franchisee in good standing. Under Illinois law, Comprehensive tells us, a party out of pocket the legal costs in one proceeding may not commence another to obtain reimbursement. Ritter v. Ritter, 381 Ill. 549, 46 N.E.2d 41 (1943).
31
The plaintiffs argue that the awards of damages for computing overcharges is appropriate because Comprehensive's tenacious defense of its computation revenues violated the clause in the contract allowing franchisees to go elsewhere. As for the costs of defending the arbitration, Cahill insists, Illinois permits recoveries to be based on the costs of litigation, when the very institution of the prior suit was a part of the defendant's wrongful conduct. Sorenson v. Fio Rito, 90 Ill.App.3d 368, 45 Ill. Dec. 714, 413 N.E.2d 47 (1980). Cahill believes that the jury was entitled to find that Comprehensive instituted the arbitration as part of a campaign to make it too costly for the franchisees to stand on their rights. The plaintiffs introduced a memo written by the president of Comprehensive advising other managerial personnel that "if we do not take action of a punitive nature the rest of the [franchisees] will feel that it is okay to put in a mini-computer because there was no penalty in so doing." Although this memo did not discuss the Cahill arbitration, we have been invited to infer that Comprehensive was bent on punishing all franchisees who defected to small computers, no matter the contract.
32
If the district court had granted summary judgment or prevented the matters from going to the jury, we would have two very difficult issues of law. Was the sale of computation under threat of termination a breach in addition to the terminations themselves? Did Comprehensive act in wilful disregard of the contract in commencing the costly arbitration against Cahill? The difficulty is that the judge sent the case to the jury, and the instructions did not ask the jury to consider either question. It was simply told to find the plaintiffs' damages. Comprehensive objected to the introduction of the evidence of the costs of arbitration, but it did not propose an instruction to the jury describing what it would have to find in order to award these costs as elements of damages. Although part of its argument now may be construed as a claim that the jury could not award these costs even if the arbitration had been instituted in bad faith, it did not propose an instruction excluding these costs from consideration. Fed.R.Civ.P. 51 requires us to assume that the instructions given were correct; in a civil case each party must live with the legal theory reflected in instructions to which it does not object. United States v. Atkinson, 297 U.S. 157, 56 S. Ct. 391, 80 L. Ed. 555 (1936); Tweed's Case, 83 U.S. (16 Wall.) 504, 515-16, 21 L. Ed. 389 (1872).
33
We have general verdicts. When a party does not ask for an instruction limiting the kinds of damages the jury may award (or informing the jury of the things it must find before it may award an item of damages), we may reverse the district court's denial of a judgment n.o.v. only if no reasonable juror could have found the evidence sufficient under the instructions it heard. If a party could argue that the evidence was insufficient under the correct legal standard, this would be an indirect method of attacking the instructions, which we have just held defendants may not do. Once the law of this case is settled by failure to object to the instructions, the parties may argue only that the jury did not play its proper part. Because the jury's part is to apply the instructions to the facts, we may scrutinize its conclusions only to find out whether it did so. It did. Cahill incurred substantial expenses defending the arbitration, and the jury could have found these attributable to Comprehensive's effort to make an example of Cahill for the edification of the others. One of Comprehensive's managers told Cahill that the arbitration would serve as an example, and even after Comprehensive lost the arbitration it informed other franchisees it had won, that the arbitrator had required Cahill to conform to all of Comprehensive's demands. If Comprehensive was using Cahill as an example, and this was part of its breach of contract, the jury was entitled to compensate Cahill. Comprehensive must administer such lessons at its own costs. Similarly, under the instructions actually given, there was evidence from which the jury could have concluded that the excessive charges for computing--backed up by threats of termination that Comprehensive was not entitled to issue--were a breach of contract.
IV
34
We come now to the plaintiffs' efforts to upset the verdicts on the contract claims. There are four: two based on evidentiary rulings, one based on an instruction, and one based on inconsistency among the verdicts.
35
1. The plaintiffs presented to the jury all of Comprehensive's machinations to induce them and franchisees in general to keep using Comprehensive's large computer. They also introduced evidence about the termination of and suits against three other franchisees in August 1981. The district court balked, however, when they tried to show how Comprehensive had reacted to 22 additional franchisees who installed small computers. The court thought this evidence cumulative and excluded it under Fed.R.Evid. 403. The court also kept out the brief Comprehensive filed in the Cahill arbitration, the arbitrator's "restatement" of the reasons for his award, and portions of the testimony of one witness to a particularly offensive retaliatory act by Comprehensive against a person not a party here (carting away the files of a franchisee who used a small computer). All of this was cumulative, some unduly prejudicial. The trial spans more than 3,000 pages of transcript, and there was apparently no end to the number of incidents plaintiffs could have produced to show that Comprehensive used every device it could imagine to quash the threat of small computers. The district court was entitled to call an end, once the jury got the general picture. The district judge knows better than we how much is too much; he did not abuse his discretion. See United States v. Watson, 623 F.2d 1198, 1203 (7th Cir.1980).
36
2. The district court let in one bit of evidence that plaintiffs wanted kept out: the testimony of Thomas A. Mass, Comprehensive's outside counsel during the time Comprehensive was trying to round up its renegade franchisees. He had given advice to Comprehensive about the meaning of its contract and had served as a lawyer in the Cahill arbitration and several suits against terminated franchisees. The court allowed Mass to testify that he had advised Comprehensive that its acts (and the procedures limiting small computers to those that produced identical reports) were necessary to protect Comprehensive's trademarks and trade secrets. Plaintiffs say that Mass, having served as counsel in this litigation until he was listed as a witness, should have been precluded from testifying. But an attorney is a competent witness, see Fed.R.Evid. 601, 611; 3 Weinstein's Evidence 601-33 to -37. When an attorney withdraws from active representation before testifying, the jury is not likely to be confused about his role. The rules of ethics (see Disciplinary Rule 5-102) say that a lawyer should not be both witness and counsel in the same case (although there are exceptions for hardship, see DR 5-101(B)(4)). Mass withdrew as counsel well before he testified, and the district court did not abuse its discretion in permitting Mass to do this. Cf. United States v. Morris, 714 F.2d 669, 672 (7th Cir.1983).
37
3. Comprehensive filed counterclaims against the plaintiffs, contending that they used its name and trademarks in an unauthorized way. See the Lanham Act, 15 U.S.C. Secs. 1051-1127. Although the district court held that Comprehensive's claim for statutory damages was "equitable" and therefore would not be submitted to the jury, it told the jury that Comprehensive was entitled to terminate franchisees who palmed off their reports as Comprehensive's or wrongfully used its trade secrets. The plaintiffs concede that the instruction was accurate, but they say it was confusing because their use (or misuse) of the marks and secrets depended on the franchise agreement. If the termination was wrongful, they point out, they were entitled to go on using the marks and methods.
38
The instructions do not establish a vicious circle. Another instruction told the jury that "[i]n order to deal with these claims you must determine first if there was a breach of contract and, second, which party was responsible for breaching or breaking the contract first." The instructions read together told the jury that if the franchisees breached by palming off their reports as Comprehensive's (or in some other way), they could be let go; if Comprehensive breached first, they could continue to act as franchisees. Although the franchisees say they were put in a no-win position by Comprehensive's demand to make all reports "identical" to those produced by its computer--compliance with which exposed them to a claim of "palming off" when Comprehensive refused, as they say, to provide trademarked paper on which to print the reports--the resolution of disputes of this sort is exactly the function of juries.
39
4. Six franchisees won and six lost. The losers say that there is no rational foundation for the difference. Six franchisees used identical small computer systems; four won and two lost. Two used a different system; one won and one lost. Plaintiffs say that the nature and quality of reports produced by these small systems therefore cannot account for the different verdicts. Comprehensive replies that five of the six losers printed their reports on paper lacking Comprehensive's trademark, which the contract required them to use; the plaintiffs reply that no one used this paper, because Comprehensive would not sell it to them. Comprehensive tells us that the losing plaintiffs incurred debt to acquire their systems without giving Comprehensive advance notice, a notice required by contract to protect Comprehensive's ability to collect existing debts. (Comprehensive apparently lends substantial sums to its franchisees for a variety of purposes.) The plaintiffs reply that some of the winners incurred unauthorized debt and anyway that they were justified in not telegraphing their punches, given Comprehensive's hostility to small computers.
40
We cannot resolve this dispute short of becoming the triers of fact. All parties broke their word. The jury was required to find out which breaches came first and were most important. Some plaintiffs may have breached their obligations earlier and more substantially than others, and different cumulations of breaches may explain the divergent results. The outcome may be explicable or it may not. We need not decide.
41
As a rule civil juries must return consistent verdicts. Gallick v. Baltimore & Ohio R.R., 372 U.S. 108, 119, 83 S. Ct. 659, 666, 9 L. Ed. 2d 618 (1963); Bates v. Jean, 745 F.2d 1146, 1149-52 (7th Cir.1984). Criminal juries need not be consistent, see United States v. Powell, --- U.S. ----, 105 S. Ct. 471, 83 L. Ed. 2d 461 (1984), but there is a special reason for this: the double jeopardy clause blocks any review of a verdict in favor of the defendant, and a demand for consistency therefore levels everything down to an acquittal; yet because the jury may have meant to do no more than dispense clemency on one count, leveling down is inappropriate. Id. 105 S.Ct. at 477. Cf. Standefer v. United States, 447 U.S. 10, 100 S. Ct. 1999, 64 L. Ed. 2d 689 (1980). The civil jury has no power to dispense clemency, and verdicts in the teeth of the evidence may be set right.
42
Inconsistency may reflect nothing but compromise, and compromise dilutes the requirement that verdicts be unanimous. True, compromise may arise from the fact that the evidence is inconclusive. The evidence may leave a jury on the line between the permissible outcomes, and a compromise may accurately reflect the uncertainties in human affairs. In a case with many plaintiffs, the compromise may work out just fine for the defendant (whose total judgment comes out right), but the cost is defeat for some plaintiffs. Each plaintiff is entitled to have his case decided separately, on a preponderance-of-the-evidence standard that itself recognizes the inevitable uncertainties in evidence. So although "[a]ppellate courts should be slow to impute to juries a disregard of their duties, and to trial courts want of diligence or perspicacity in appraising the jury's conduct," Fairmont Glass Works Co. v. Cub Fork Coal Co., 287 U.S. 474, 485, 53 S. Ct. 252, 255, 77 L. Ed. 439 (1933), they may not abide inexplicable inconsistency when different parties are involved.5
43
This conclusion does not get plaintiffs where they want to go. A jury that returns inconsistent verdicts may be ordered to resume its deliberations. See Bates, supra; Barnes v. Brown, 430 F.2d 578 (7th Cir.1970); Cundiff v. Washburn, 393 F.2d 505 (7th Cir.1968). Fed.R.Civ.P. 49 explicitly authorizes this in case of special verdicts. A district court also may find inconsistent verdicts an adequate ground for a new trial. Either procedure removes the inconsistency. The plaintiffs did not ask the jury to continue its deliberations, however; they asked only for a poll of the jury.6 Although they asked for a new trial, they restricted this request to the six losing plaintiffs; the six losers also seek judgment notwithstanding the verdict. The six prevailing plaintiffs have not offered to abide the outcome of another trial.
44
Plaintiffs may not simply assume, however, that the "right" verdicts are the ones in plaintiffs' favor. The problem here is inconsistency, not a judgment in the teeth of the evidence. The rule that each plaintiff is entitled to have his case determined independently is one source of our conclusion that juries may not compromise across plaintiffs to do right by defendants. It also means, however, that plaintiffs fare no better than if each case had been tried separately. In such a series of 12 trials, each plaintiff could have lost. The plaintiffs are not entitled to judgment notwithstanding the verdict or a new trial unless no rational jury could have brought back a verdict for the defendants. Brady v. Southern Ry., 320 U.S. 476, 479, 64 S. Ct. 232, 234, 88 L. Ed. 239 (1943); Freeman v. Franzen, 695 F.2d 485 (7th Cir.1982), cert. denied, 463 U.S. 1214, 103 S. Ct. 3553, 77 L. Ed. 2d 1400 (1983); cf. Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S. Ct. 188, 190, 66 L. Ed. 2d 193 (1980). The evidence here was conflicting; a verdict against all 12 plaintiffs would have been sustained, as a verdict for all 12 would have been. The six losing plaintiffs want another bite at the apple without exposing the six prevailing plaintiffs to jeopardy. The rule that verdicts should be consistent does not tilt the scales in favor of plaintiffs, and they are not entitled to a remedy that locks in their gains while they try for more.
45
AFFIRMED.
*
The Honorable Robert A. Grant, Senior District Judge for the Northern District of Indiana, is sitting by designation
1
No mean feat because "franchises" (the tying product here) are just names and methods of doing business, not "products" and some courts have held that as a matter of law there cannot be a tie-in between a name and a product, see Krehl v. Baskin-Robbins Ice Cream Co., 664 F.2d 1348 (9th Cir.1982); Principe v. McDonald's Corp., 631 F.2d 303 (4th Cir.1980), cert. denied, 451 U.S. 970, 101 S. Ct. 2047, 68 L. Ed. 2d 349 (1981); Jack Walters, supra, 737 F.2d at 704-05 (reserving the question). A tie involves products that may be sold in separate markets. But a method of doing business (the franchise) is not sold separately from the ingredients that go into the method of business. A franchiser and its franchisees are part of a business organization not altogether different from vertical integration. See G. Frank Mathewson & Ralph A. Winter, The Economics of Franchise Contracts, 28 J.L. & Econ. 503 (1985). We need not consider the implications of this approach, however
2
There has been a debate among both judges and scholars concerning the effects of tying arrangements. The close division on the rationale in Hyde was attributable in part to this. On the scholarly debate, compare Phillip Areeda & Donald F. Turner, V Antitrust Law paragraphs 1129c, 1134b (1980), Robert H. Bork, The Antitrust Paradox 140-44, 372-75 (1978), and Roger D. Blair & David L. Kaserman, Antitrust Economics 381-405 (1985), with Louis Kaplow, Extension of Monopoly Power Through Leverage, 85 Colum.L.Rev. 515 (1985). See also S.J. Liebowitz, Tie-in Sales and Price Discrimination, 21 Economic Inquiry 387 (1983). Many scholars, and at least four Justices, would analyze tying arrangements under the Rule of Reason or permit them outright even when the seller has substantial market power. We need not join the debate, given the conclusions discussed below
3
The use of barriers to entry as a proxy for market power is familiar in the law of mergers. Unless barriers to entry prevent rivals from entering the market at the same cost of production, even a very large market share does not establish market power. See e.g., United States v. Waste Management, Inc., 743 F.2d 976 (2d Cir.1984) (market share exceeding 50% does not establish power over price when entry is easy); Echlin Manufacturing Co., --- F.T.C. ---- (June 28, 1985). Cf. William M. Landes & Richard A. Posner, Market Power in Antitrust Cases, 94 Harv.L.Rev. 937, 947-51, 962-68 (1981); Areeda & Turner, supra, at p 504 (1978). True, even in the absence of barriers the inevitable delay in entry by rivals may enable those with a large share of a market to raise the price and make supracompetitive profits. But the possibility that short-run market power exceeds long-run power does not apply to a case, such as this, in which the restraints in question have lasted for many years. Rivals to Comprehensive have long since been able to enter, so that barriers (and not lags) are what matter
4
To the extent Digidyne Corp. v. Data General Corp., 734 F.2d 1336 (9th Cir.1984), cert. denied, --- U.S. ----, 105 S. Ct. 3534, 87 L. Ed. 2d 657 (1985), holds that a plaintiff may prevail, without establishing power over price in the relevant market, by showing that rivals cannot produce exactly the same package, it conflicts with Spartan, Kypta, and several other cases, including Jack Walters in our circuit. E.g., Systemized of New England, Inc. v. SCM, Inc., 732 F.2d 1030 (1st Cir.1984) (no market power as a matter of law in a unique system); Domed Stadium Hotel, Inc., v. Holiday Inns, Inc., 732 F.2d 480 (5th Cir.1984) (no market power as a matter of law in a factually unique reservation system that occupied more than 20% of its market). Sellers may strive to differentiate their products from others in order to compete for the custom of patrons with slightly different needs or tastes. It would be perverse to turn this ordinary attribute of the competitive struggle into a source of illegality. No one may copy Comprehensive's trademark or its copyrighted materials precisely, but rivals may create similar items for similar costs. Only when there is a barrier to entry--when rivals' cost of creating similar items is higher than the full costs of the original creator--may differences in the design of the package be treated as proof of market power. Spartan, Kypta, and the other cases we have cited are in line with Fortner II and Hyde; we follow them rather than Data General
5
Merchant v. Ruhle, 740 F.2d 86 (1st Cir.1984), holds that general civil verdicts may be inconsistent. See also Alexander M. Bickel, Judge and Jury--Inconsistent Verdicts in the Federal Courts, 63 Harv.L.Rev. 649 (1950). Merchant assumes that the rule in criminal cases should apply in civil cases too; we think not, for reasons we have explained. It is also established that special verdicts of civil juries must be consistent. Inconsistent general verdicts may be much rarer, but there is no good reason to treat them differently from inconsistent special verdicts as a rule. There may be something to the First Circuit's argument when the inconsistency involves but one party, for this may arise in a borderline case. There is no special virtue to a rule of all-or-nothing when several different claims may cluster right around the boundary between judgment for plaintiff and judgment for defendant; a very small difference may put one claim over while the other fails. Different outcomes on very similar facts therefore may not be ptaylor@example.org. Whatever the appropriate treatment of one-party cases, inconsistency among parties is impermissible
6
Barnes and Cundiff hold that a request to have the jury resume its deliberations is the only appropriate response to special verdicts that are inconsistent with general verdicts, see Rule 49(b), and that if a party does not act in time he waives any later challenge. We need not decide whether this is also the rule for inconsistent general verdicts
|
United States Court of Appeals
For the Eighth Circuit
___________________________
No. 16-1452
___________________________
United States of America
lllllllllllllllllllll Plaintiff
Shane Lager
lllllllllllllllllllll Plaintiff - Appellant
v.
CSL Behring, L.L.C.; CSL Limited; Accredo Health, Incorporated; Coram LLC
lllllllllllllllllllll Defendants - Appellees
____________
Appeal from United States District Court
for the Eastern District of Missouri - St. Louis
____________
Submitted: December 15, 2016
Filed: May 5, 2017
____________
Before WOLLMAN and SMITH,1 Circuit Judges, and WRIGHT,2 District Judge.
____________
1
The Honorable Lavenski R. Smith became Chief Judge of the United States
Court of Appeals for the Eighth Circuit on March 11, 2017.
2
The Honorable Wilhelmina M. Wright, United States District Judge for the
District of Minnesota, sitting by designation.
SMITH, Circuit Judge.
Relator Shane Lager brought this qui tam action pursuant to the False Claims
Act (FCA), 31 U.S.C. §§ 3729 et seq., alleging that drug manufacturer CSL Behring,
LLC, and its parent corporation CSL Behring Limited (collectively, “CSL Behring”)
conspired with pharmacies Accredo Health, Inc., (“Accredo”) and Coram LLC
(“Coram”) to submit false claims to the United States for reimbursement for
prescription drugs. The government declined to intervene. CSL Behring, Accredo,
and Coram (collectively, “defendants”) moved to dismiss the complaint based on,
among other things, the FCA’s public disclosure bar, 31 U.S.C. § 3730(e)(4)(A). The
district court3 granted the motion. Lager appeals this dismissal, and we affirm.
I. Background
“We accept as true the material allegations in the complaint and present the
facts in the light most favorable to [Lager].” Kulkay v. Roy, 847 F.3d 637, 640 (8th
Cir. 2017). Lager worked for CSL Behring for 14 years in sales and sales
management. CSL Behring manufactures and distributes protein-based therapies,
including Vivaglobin and Hizentra. These drugs are self-administered by patients
through a pump. This pump qualifies as “Durable Medical Equipment” (DME) under
the Medicare statutes. CSL Behring began marketing and distributing Vivaglobin in
2006 but discontinued Vivaglobin in 2011. CSL Behring introduced Hizentra in 2010
and continues to manufacture it. Seventy percent of CSL Behring’s sales of
Vivaglobin and Hizentra are made to Coram and Accredo.
Pharmacies that dispense drugs to beneficiaries of government health care
programs (such as Medicare) submit claims for reimbursement to the federal
3
The Honorable Carol E. Jackson, United States District Judge for the Eastern
District of Missouri.
-2-
government. Since Congress’s enactment in 2003 of the Medicare Prescription Drug,
Improvement, and Modernization Act (MMA), 42 U.S.C. §§ 1395w-21–1395w-28,
most drugs that Medicare and other government health programs cover are
reimbursed based on the average sales price (ASP). See 42 U.S.C. §§ 1395u(o),
1395w-3, 1395w-3a, 1395w-3b. However, the MMA excluded DME infusion drugs,
such as Vivaglobin and Hizentra; instead, reimbursements for these drugs are based
on 95 percent of the average wholesale price (AWP). While the ASP is based on
actual sales data, the AWP is based on figures that the drug manufacturer reports to
third-party publishers, such as Red Book. Office of Inspector Gen., U.S. Dep’t of
Health & Human Servs., OEI-12-12-00310, Part B Payments for Drugs Infused
Through Durable Medical Equipment at 2–3 (2013) (“2013 OIG Report”). And, while
the ASP is defined by law, the AWP is not. See Office of Inspector Gen., U.S. Dep’t
of Health & Human Servs., OEI-03-05-00200, Medicaid Drug Price Comparison:
Average Sales Price to Average Wholesale Price (2005) (“2005 OIG Report”). The
ASP is “substantially lower” than the AWP. Id. at 8. For example, in 2004, “[f]or
2,077 national drug codes with ASP and AWP data, ASP [was] 49 percent lower than
AWP at the median.” Id.
“Initially, AWP was the average price charged by wholesalers to providers, like
doctors and pharmacies.” In re Pharm. Indus. Average Wholesale Price Litig., 491
F. Supp. 2d 20, 33 (D. Mass. 2007), aff’d, 582 F.3d 156 (1st Cir. 2009). The AWP
was “derived from the markup charged by wholesalers over their actual acquisition
cost, sometimes called the ‘Wholesale Acquisition Cost’ or ‘WAC.’” Id. Historically,
providers added a 20 to 25 percent markup to the price that they paid to
manufacturers. Id. “At some point, though, because of consolidation and competition
among wholesalers, these standard markups on branded drugs no longer reflected
actual wholesaler margins, which were reduced to 2 to 3 percent.” Id. As a result, the
actual AWP that wholesalers charged “to providers was much lower than the 20 or
25 percent markup over WAC.” Id.
-3-
Lager brought this qui tam action pursuant to the FCA against CSL Behring,
Accredo, and Coram, alleging that they agreed to and engaged in a joint action to
defraud the government over the course of several years. Specifically, Lager alleges
that CSL Behring reported inflated AWPs for Vivaglobin and Hizentra to third-party
publishers when, in actuality, the “true selling price” at which CSL sold the drugs was
“substantially less than their falsely reported amounts.” Lager alleges that CSL
Behring used the “spread” between the actual cost and the reported AWPs to induce
their customers, including Accredo and Coram, to buy its products. Lager alleges that
Accredo and Coram then sought out patients covered by government health programs
to take advantage of the spread. As a result of the defendants’ conduct, Lager claims
that the federal government has overpaid in excess of $100 million for Vivaglobin
and in excess of $180 million for Hizentra.
After the United States declined to intervene in Lager’s suit, the defendants
moved to dismiss the complaint (1) under the FCA’s public disclosure bar, 31 U.S.C.
§ 3730(e)(4)(A); (2) for failure to plead fraud with particularity under Federal Rule
of Civil Procedure 9(b); and (3) for failure to state a claim under Federal Rule of Civil
Procedure 12(b)(6).4 The district court dismissed Lager’s complaint pursuant to the
FCA’s public disclosure bar, which bars an action or claim “if substantially the same
allegations or transactions as alleged in the action or claim were publicly disclosed”
in qualifying sources. 31 U.S.C. § 3730(e)(4)(A). First, the court discussed the
“public disclosures regarding DME infusion drugs, generally.” United States ex rel.
Lager v. CSL Behring, LLC, 158 F. Supp. 3d 782, 789 (E.D. Mo. 2016). The court
recognized that “[m]ultiple government sources have long disclosed that AWP does
not represent the actual prices of drugs.” Id. at 788. The district court also cited
several media sources as previously reporting that AWPs do not reflect actual drug
prices. Id. And the court found that “multiple disclosures” showed that
4
CSL Behring additionally moved to dismiss for insufficient process pursuant
to Federal Rule of Civil Procedure 12(b)(5).
-4-
“manufacturers used the difference between actual costs and AWPs to influence
sales.” Id. The court cited Wholesale Price Litigation (a 2007 decision) as explaining
the negative effect of AWP-based reimbursements. Id. at 789 (citing Wholesale Price
Litig., 491 F. Supp. 2d at 30–31).
Second, the district court discussed “public disclosures regarding the AWP and
ASP for Vivaglobin and Hizentra.” Id. at 789. According to the court, “[t]he third-
party publications publish AWPs, while the Centers for Medicare & Medicaid
Services (CMS) publishes ASPs for drugs on a quarterly basis.” Id. Based on publicly
available figures derived from CMS and Red Book, Coram had provided the
following table to the district court:
Quarter Vivaglobin AWP Vivaglobin ASP Hizentra AWP Hizentra ASP
2007Q4 $127.57 $66.75 N/A N/A
2008Q4 $119.82 $66.06 N/A N/A
2009Q4 $119.96 $67.85 N/A N/A
2010Q4 $119.95 $68.42 N/A $68.72
2011Q4 N/A N/A $151.07 $68.74
2012Q4 N/A N/A $150.66 $68.74
2013Q4 N/A N/A $150.96 $72.44
Id. at 790. The court characterized this table as “showing the significant spread
between ASPs and AWPs for Vivaglobin and Hizentra for the years 2007 through
2013.” Id. at 789.
Third, in response to Lager’s argument that his allegations of fraud are based
on the difference between the “actual AWPs” and the “reported AWPs” and not based
on the “simple, irrelevant disparity between the ASPs and the reported AWPs” for the
drugs, the district court found that “the term ‘actual AWP’ is meaningless in the
absence of any statutory or regulatory definitions.” Id. at 791. The court also found
-5-
that the “target of relator’s allegations is the difference between the AWPs and what
he calls the drugs’ ‘true selling prices’”; according to the court, “true selling prices”
are the same as the ASPs for the drugs. Id.
Having reviewed all the sources that the defendants put forth, the district court
concluded that “[a]ll the essential elements of relator’s claims were publicly disclosed
before he filed suit.” Id.
The district “[c]ourt decline[d] to address defendants’ remaining arguments in
any detail,” but it did note that Lager’s complaint lacked a “single, specific instance
of fraud, much less any representative examples” and therefore failed to satisfy Rule
9(b). Id. at 793 (quoting United States ex rel. Joshi v. St. Luke’s Hosp., Inc., 441 F.3d
552, 557 (8th Cir. 2006)). The court denied Lager’s request to amend his complaint
and granted the defendants’ motion to dismiss.
II. Discussion
On appeal, Lager argues that the district court erroneously applied the public
disclosure bar to his FCA claim because the disclosures that the district court relied
on (1) do not readily identify the defendants in this case; and (2) do not contain
“substantially the same allegations or transactions,” 31 U.S.C. § 3730(e)(4)(A), as
those contained in Lager’s complaint or reveal any of the defendants’ fraudulent
activity.
The FCA imposes civil liability on one who “knowingly presents . . . a false or
fraudulent claim [to the government] for payment or approval.” 31 U.S.C.
§ 3729(a)(1)(A). “Almost unique to the FCA are its qui tam enforcement provisions,
which allow a private party known as a ‘relator’ to bring an FCA action on behalf of
the Government.” State Farm Fire & Cas. Co. v. United States ex rel. Rigsby,
137 S. Ct. 436, 440 (2016). The FCA also provides that the Attorney General may
“intervene in a relator’s ongoing action or . . . bring an FCA suit in the first instance.”
-6-
Id. The FCA’s qui tam enforcement provision “is designed to benefit both the relator
and the Government. A relator who initiates a meritorious qui tam suit receives a
percentage of the ultimate damages award, plus attorney’s fees and costs.” Id.
Additionally, private enforcement “strengthen[s] the Government’s hand in fighting
false claims.” Id. (quoting Graham Cty. Soil & Water Conservation Dist. v. United
States ex rel. Wilson, 559 U.S. 280, 298 (2010)).
However, “[t]he FCA places a number of restrictions on suits by relators.” Id.
“At the same time that the statute encourages whistleblowers, it discourages
‘opportunistic’ plaintiffs who ‘merely feed off a previous disclosure of fraud.’”
United States v. Walgreen Co., 846 F.3d 879, 880 (6th Cir. 2017) (quoting United
States ex rel. Poteet v. Medtronic, Inc., 552 F.3d 503, 507 (6th Cir. 2009)). As a
result, “individual plaintiffs cannot bring qui tam complaints based upon information
already in the public domain.” Id. Section 3730(e)(4)(A)—known as the public
disclosure bar—provides that a
court shall dismiss an action or claim under this section, unless opposed
by the Government, if substantially the same allegations or transactions
as alleged in the action or claim were publicly disclosed—
(i) in a Federal criminal, civil, or administrative hearing in
which the Government or its agent is a party;
(ii) in a congressional, Government Accountability Office,
or other Federal report, hearing, audit, or investigation; or
(iii) from the news media,
unless the action is brought by the Attorney General or the person
bringing the action is an original source of the information.
31 U.S.C. § 3730(e)(4)(A) (footnote omitted).
-7-
“Dismissal under the public disclosure bar is thus required if (1) the defendant
has shown public disclosure under § 3730(e)(4)(A), and (2) the relator does not fit
§ 3730(e)(4)(B)’s definition of ‘original source.’” United States ex rel. Paulos v.
Stryker Corp., 762 F.3d 688, 692 (8th Cir. 2014).5 We apply de novo review to the
district court’s determination that the public disclosure bar applies to a relator’s
complaint. Id.
A. Identification of the Defendants
We will first address Lager’s contention that the public disclosures that the
district court relied on do not identify the defendants. According to Lager, the public
disclosure bar is inapplicable when the disclosures fail to specifically identify the
defendants named in the qui tam action with the specific mackenziewashington@example.net. He asserts that
15 of the 17 disclosures that the district court relied on make no mention of the
defendants or of transactions involving Vivaglobin and Hizentra. According to Lager,
only two disclosures “specifically discuss the Defendants and Specified Drugs at
issue in this litigation” without tying them to the specific fraud. He additionally
maintains that only in “very limited circumstances” have courts “applied the public
disclosure bar in cases where the defendants named in the qui tam action were
identifiable, though not specifically named in the disclosures.” He urges that these
cases are inapplicable to the present case because they concern “defendants operating
in very narrow industries, and where the public disclosures were of industry-wide
fraud.”
“Several circuits have . . . addressed the issue of unnamed wrongdoers in the
context of the FCA’s public disclosure bar . . . .” United States ex rel. Branch
5
The district court concluded that Lager failed to satisfy the original source
exception to the public disclosure bar. CSL Behring, 158 F. Supp. mackenziewashington@example.net. Lager
has not challenged this conclusion on appeal.
-8-
Consultants v. Allstate Ins. Co., 560 F.3d 371, 379 (5th Cir. 2009) (citing United
States ex rel. Gear v. Emergency Med. Assocs. of Ill., Inc., 436 F.3d 726, 729 (7th Cir.
2006) (holding industry-wide public disclosures of Medicare fraud barred qui tam
actions “against any defendant who is directly identifiable from the public
disclosures”); United States v. Alcan Elec. & Eng’g, Inc., 197 F.3d 1014, 1019 (9th
Cir. 1999) (holding public disclosures of fraud failing to identify specific defendants
but pertaining to “a narrow class of suspected wrongdoers—local electrical
contractors who worked on federally funded projects over a four-year
period”—triggered the public disclosure bar as to those contractors); United States
ex rel. Fine v. Sandia Corp., 70 F.3d 568, 571–72 (10th Cir. 1995) (holding where
public disclosures “revealed that at least two of [the laboratory’s] eight sister
laboratories were engaged in” a fraud, the government would have little trouble
“examining the operating procedures of nine, easily identifiable, [Department of
Energy]-controlled, and government-owned laboratories”); United States ex rel.
Cooper v. Blue Cross & Blue Shield of Fla., Inc., 19 F.3d 562, 566 (11th Cir. 1994)
(per curiam) (holding allegations of widespread Medicaid fraud made in disclosures
in which a particular insurance company was not specifically named or otherwise
directly identifiable were insufficient to trigger the public disclosure bar)).
Lager asserts that Cooper articulates the appropriate standard for identifying
defendants for purposes of the public disclosure bar. See 19 mackenziewashington@example.net. In Cooper,
a “working aged” federal employee (the relator) “qualified for both Medicare and the
Federal Employees Health Benefits Program,” which the defendant administered. Id.
at 564. Over a two-year period, when the relator submitted a claim for medical bills
to the defendant, the defendant would typically return the claim to the relator with
instructions to submit the claim to Medicare first. Id. After the relator learned that the
defendant was required to pay on his claims before sending the balance to Medicare,
he filed suit under the FCA, alleging that the defendant “committed fraud against the
government by submitting his claims to Medicare when [the defendant] knew it was
required to pay primary.” Id. at 564–65. The defendant moved to dismiss, arguing that
-9-
the allegations were publicly disclosed by several sources that mentioned similar
activities to the ones that the relator alleged. Id. at 565. Some of these source
materials mentioned the defendant by name, while others made general allegations
of fraud against the healthcare industry. Id. at 566–67.
The Eleventh Circuit “consider[ed] it to be crucial whether [the defendant] was
mentioned by name or otherwise specifically identified in public disclosures” and
“consider[ed] separately those sources in which it was identified and those in which
it was not.” Id. at 566. The court held that “[t]he allegations of widespread . . . fraud
made in sources in which [the defendant] was not specifically named or otherwise
directly identified are insufficient to trigger the jurisdictional bar.” Id. (emphasis
added). The court explained:
Requiring that allegations specific to a particular defendant be
publically disclosed before finding the action potentially barred
encourages private citizen involvement and increases the chances that
every instance of specific fraud will be revealed. To hold otherwise
would preclude any qui tam suit once widespread—but not
universal—fraud in an industry was revealed. The government often
knows on a general level that fraud is taking place and that it, and the
taxpayers, are losing money. But it has difficulty identifying all of the
individual actors engaged in the fraudulent activity.
Id.
“Cooper’s holding has its limits,” as evidenced in Fine, where the Tenth
Circuit distinguished Cooper. United States ex rel. Kester v. Novartis Pharm. Corp.,
No. 11 CIV. 8196 CM, 2015 WL 109934, at *14 (S.D.N.Y. Jan. 6, 2015) (citing Fine,
70 F.3d at 569–72). In Fine, a former government auditor filed a qui tam action under
the FCA, asserting that a laboratory under the Department of Energy’s (DOE) control
had “misappropriated nuclear waste funds in violation of the Nuclear Waste Policy
-10-
Act.” 70 mackenziewashington@example.net. The relator conceded that a General Accounting Office (GAO)
report and a congressional hearing were types of disclosures that invoke the public
disclosure bar. Id. at 571. Nonetheless, he argued that those disclosures “merely
described the national laboratories’ practice of ‘taxing’ Nuclear Waste Funds for
discretionary . . . projects”; by contrast, his complaint alleged that the defendant “in
particular ‘taxed’ nuclear waste funds” in certain fiscal years. Id. The Tenth Circuit
held that the GAO report and congressional hearing “sufficiently alerted the
government to the likelihood that [the defendant] would . . . ‘tax’ nuclear waste funds
in the future” “[b]ecause these disclosures detailed the mechanics of the practice,
revealed that at least two of [the defendant’s] eight sister laboratories were engaged
in it, and indicated the DOE’s acquiescence.” Id. The court distinguished Cooper,
stating, “When attempting to identify individual actors, little similarity exists between
combing through the private insurance industry in search of fraud and examining the
operating procedures of nine, easily identifiable, DOE-controlled, and
government-owned laboratories.” Id. at 572.
Similarly, in Gear, the Seventh Circuit was “unpersuaded by an argument that
for there to be public disclosure, the specific defendants named in the lawsuit must
have been identified in the public records.” 436 mackenziewashington@example.net. In that case, the relator
alleged that one medical school and its affiliates “fraudulently billed Medicare for
services performed by residents [in a teaching hospital’s] residency program as if
those services had been performed by attending physicians.” Id. at 727. The relator
argued that the public disclosures failed to “expose any transactions from which the
government . . . could infer that the particular entities he ha[d] named were
fraudulently billing Medicare.” Id. at 729. But the Seventh Circuit disagreed. It
concluded that prior nationwide news reports, an investigation, and audits of how
teaching hospitals billed Medicare for services that residents performed already
exposed “allegations that Medicare was being billed for services provided by
residents as if attending physicians had actually performed the services.” Id. at 728.
According to the court, these public “disclosures . . . were of industry-wide abuses
-11-
and investigations. Defendants were implicated. Industry-wide public disclosures bar
qui tam actions against any defendant who is directly identifiable from the public
disclosures.” Id. at 729 (emphases added). The “industry” at issue was composed of
“[t]eaching hospitals associated with the nation’s 125 medical schools.” Id. at 728.
The court held that the realtor’s claims were based on the public disclosures about the
industry. Id. at 729.
The aforementioned precedent can be reconciled as follows:
In Cooper, the disclosures in question were directed at an entire industry
in which the government may very well have “difficulty identifying all
of the individual actors engaged in the fraudulent activity,” 19 F.3d at
566, and a specific reference would thus be necessary for the
government to identify and prosecute the fraud. In Gear, the defendants
did not need to be named for the public disclosure bar to be triggered
because the specific defendants were already implicated by the
disclosures. 436 mackenziewashington@example.net. The cases further agree that publicly
disclosed allegations from which specific defendants cannot be
identified do not invoke the jurisdictional bar.
United States ex rel. Branch Consultants, L.L.C. v. Allstate Ins. Co., 668 F. Supp. 2d
780, 794 (E.D. La. 2009).
Based on our review of the case law, we conclude that “[i]n order to bar claims
against a particular defendant, the public disclosures relating to the fraud must either
explicitly identify that defendant as a participant in the alleged scheme, or provide
enough information about the participants in the scheme such that the defendant is
identifiable.” Kester, 2015 WL 109934, at *8. This means that “the public disclosures
must ‘set the government squarely on the trail’ of a specific and identifiable
defendant’s participation in the fraud.” Id. (quoting In re Nat. Gas Royalties, 562
F.3d 1032, 1041 (10th Cir. 2009)). In applying this standard, we consider “public
disclosures contained in different sources” as a whole to determine whether they
-12-
collectively “provide information that leads to a conclusion of fraud.” United States
ex rel. Gilligan v. Medtronic, Inc., 403 F.3d 386, 390 (6th Cir. 2005); see also United
States ex rel. Ondis v. City of Woonsocket, 587 F.3d 49, 54 (1st Cir. 2009) (“The two
states of facts may come from different sources, as long as the disclosures together
lead to a plausible inference of fraud.”); Dingle v. Bioport Corp., 388 F.3d 209, 214
(6th Cir. 2004) (“The fact that the information comes from different disclosures is
irrelevant. All that is required is that public disclosures put the government on notice
to the possibility of fraud.”).
As the district court observed, the “[d]efendants identify a number of
disclosures made in qualifying sources.” CSL Behring, 158 F. Supp. mackenziewashington@example.net. Some
of these governmental and media sources predate the marketing and distribution of
Vivaglobin and Hizentra, which began in 2006 and 2010, respectively. These sources
“have long disclosed that AWP does not represent the actual prices of drugs,” id. at
788, and revealed the resulting controversy over drug manufacturers reporting the
AWP.6
6
See, e.g., Wholesale Price Litig., 491 F. Supp. 2d at 41 (quoting a 1984 OIG
Report concerning self-administered drugs that reported that the “AWP cannot be the
best—or even an adequate—estimate of the prices providers generally are paying for
drugs. AWP represents a list price and does not reflect several types of discounts,
such as prompt payment discounts, total order discounts, end-of-year discounts and
any other trade discounts, rebates, or free goods that do not appear on the
pharmacists’ invoices”); Medicaid Prescription Drug Reimbursement: Why the
Government Pays Too Much: Hearing Before Subcomm. on Oversight &
Investigations of the H. Comm on Energy & Commerce, 108th Cong. 2 (2004)
(statement of Chairperson Joe Barton) (“[T]he committee has uncovered evidence that
several manufacturers either inflate their AWPs or actively market their products not
based on the lowest price but on the difference between the price and the
reimbursement amount, better known in the industry as the spread. . . . [T]he
existence of substantial spreads remains a fixture of Medicaid prescription drug
reimbursement.”); id. at 74 (statement of Rep. Henry Waxman) (“It was an early
recognition that the AWP was an essentially bogus price that bore little relationship
-13-
to the actual acquisition police [sic] of drugs.”); Patients First: A 21st Century
Promise to Ensure Quality and Affordable Health Coverage: Joint Hearing Before
the Subcomm. on Health & Subcomm. on Oversight & Investigations of the H. Comm.
on Energy & Commerce, 107th Cong. 269 (2001) (statement of Rep. James C.
Greenwood) (“[W]e have these drugs that are covered by Medicare, that are
reimbursed at statutorily determined phrase, ‘average wholesale price,’ and yet it
appears quite obvious that there is nothing average or wholesale about that price and
it is based on absolutely nothing, it is a fiction. It appears to be designed
fundamentally to create the largest spread possible between what the physician
provider actually pays and what Medicare is reimbursed in order to get market share,
and it is costing us billions of dollars.”); Medicare Drug Reimbursements: A Broken
System for Patients and Taxpayers: Joint Hearing Before the Subcomm. on Health
& Subcomm. on Oversight & Investigations of the H. Comm. on Energy & Commerce,
107th Cong. 11 (2001) (statement of Representative Sherrod Brown) (“[T]he so-
called average wholesale price scam looks like a textbook case of fraud, waste and
abuse. AWP is a bit like the Holy Roman Empire we learned about in school. The
Holy Roman Empire to be sure was not holy, and it wasn’t really Roman, and you
could hardly call it an empire. It is the same with the average wholesale price. They
aren’t the average of anything, they certainly aren’t wholesale, and, in fact, they aren’t
even prices. They are a marketing tool.”); Health Care Waste, Fraud, and Abuse:
Hearing Before the Subcomm. on Health of the H. Comm. on Ways & Means, 105th
Cong. 63 (1997) (statement of Michael F. Mangano, an OIG official) (“[T]he
published wholesale prices that are currently being used . . . to determine [Medicare]
reimbursement rates bear little or no resemblance to actual wholesale prices.”); id. at
57 (“The AWP . . . is easily manipulated and greatly inflated.”); Office of Inspector
Gen, U.S. Dep’t of Health & Human Servs, OEI-03-97-00290, Excessive Medicare
Payments for Prescription Drugs iii (1997) (“1997 OIG Report”) (identifying
“Medicare [payments made in 1995] that were 11 to 900 percent greater than drug
prices available to the physician and supplier communities”); Bill Alpert, Hooked on
Drugs: Why Do Insurers Pay Such Outrageous Prices for Pharmaceuticals?,
Barron’s, June 10, 1996, at 15, 18 (reporting that “[i]f most health-care providers can
get these prices, is it any wonder an industry wag says that AWP really means ‘Ain’t
What’s Paid’?” and stating that “infusion firms like . . . Coram Healthcare . . . owe
their sensational profit margins, to various degrees, to their drug spreads” (emphasis
added)); Steve Bailey, Profits vs. People, Boston Globe, Apr. 10, 2002, at C1
(recounting a 2001 “report by the inspector general’s office of the US Department of
-14-
In addition to the pre-2006 “public disclosures regarding DME infusion drugs,
generally, there have been public disclosures regarding the AWP and ASP for
Vivaglobin and Hizentra.” CSL Behring, 158 F. Supp. mackenziewashington@example.net. Data from the Red
Book and CMS (set forth in the table above) “show[s] the significant spread between
Health and Human Services[, which] found that Medicaid programs are overpaying
pharmacies hundreds of millions of dollars for prescription drugs” and stating that
“[w]hile Medicaid payments are based on average wholesale prices, doctors and
pharmacies received big discounts and never paid those prices, the report found. In
the industry, average wholesale price, or AWP, is an open joke that stands for ‘Ain’t
What’s Paid’”); Bill Brubaker, Firms in Talks on Overbilling for Medicare, Medicaid
Drugs, Wash. Post, May 11, 2000, at E03 (reporting that “[f]ederal and state agencies
are in discussions with major pharmaceutical companies over allegations that they
misrepresented the prices of drugs they sold within the multibillion-dollar Medicaid
and Medicare insurance programs,” explaining that the issue was “the formula used
to calculate what the federal and state health insurance programs pay for drugs,”
identifying the AWP as the “key component,” and reporting that “[s]ome government
officials say AWP actually stands for ‘ain’t what’s paid,’ because they assert it is
neither average nor wholesale”); Alice Dembner, Medicare Waste Raises Cost of
Drugs By $1B, Congress To Hear Report on Overpayment Excess, Boston Globe,
Sept. 21, 2001, at A2 (reporting that “prosecutors at the US attorney’s office in
Boston and the Massachusetts attorney general’s office are investigating whether at
least 20 pharmaceutical companies committed fraud by manipulating the prices of
drugs reimbursed through Medicare and Medicaid” and that “in the industry, many
joke that AWP stands for ‘Ain’t what’s paid’”); Edward Lotterman, Insurance Firms
Struggle to Avoid Moral Hazard, St. Paul Pioneer Press, June 30, 2002, at D2
(reporting that a “doctor’s professional judgment on the best drug or device is
distorted by the financial incentive of which manufacturer offers the most lucrative
‘spread’ between the price charged . . . and the much higher ‘average wholesale
price’”); Lisa Richwine, Medicare Moves to Cut U.S. Drug Payments, Reuters, June
1, 2000 (reporting that “[o]ne federal probe charged that AWPs were between 11
percent and 900 percent greater than the prices offered to physicians” and that drug
makers responded that “they have obeyed the law and that officials have known for
two decades that AWPs were only a ‘sticker price’ and that some buyers received
discounts”).
-15-
ASPs and AWPs for Vivaglobin and Hizentra for the years 2007 through 2013.” Id.
(emphasis added). Furthermore, the 2013 OIG Report addressed excessive payments
for DME infusion drugs, although it did not specifically name the defendants or
Vivaglobin and Hizentra. The 2013 OIG Report found that “Medicare payment
amounts for DME infusion drugs exceeded ASPs by 54 to 122 percent annually.”
While it recognized that for “one-third of DME infusion drugs in each year, the
payment amounts were below their ASPs,” it also reported that “[m]ost individual
drugs had Medicare payment amounts that exceeded ASPs, many by more than two
times, in each year.” The OIG’s “results once again show[ed] that AWPs are
unrelated to actual prices in the marketplace and that the reliance on an AWP-based
payment methodology has cost Medicare hundreds of millions of dollars.” The report
cited prior OIG work on the topic of DMEs and AWPs, providing, “Since 1997, OIG
has released numerous reports showing that AWPs greatly exceed acquisition costs.”
In explaining the data-collection method that the OIG used, the 2013 OIG Report
stated:
We used CMS’s payment amount files to select the HCPCS7 codes that
were paid on the basis of DME infusion payment limits (i.e., 95 percent
of AWPs from October 1, 2003) in each quarter between 2005 and 2011.
As previously stated, during that time, 31 to 38 HCPCS codes were
classified as “DME infusion drugs” in any given quarter.
(Emphasis added.)
Viewed collectively, the pre- and post-2006 public disclosures “provide
enough information about the participants in the scheme” to directly identify the
defendants and the subject drugs. See Kester, 2015 WL 109934, at *8. The pre-2006
public disclosures alleged industry-wide fraud through the use of AWPs. See supra
note 6. The link between the public disclosures made prior to the subject drugs’
7
Healthcare Common Procedure Coding System Code.
-16-
distribution and an allegation that the defendants are engaged in fraud by inflating
AWPs for Vivaglobin and Hizentra—as Lager’s complaint alleges—comes primarily
from the 2013 OIG Report. It identifies a narrow class of DME infusion drugs—31
to 38. See Gear, 436 F.3d at 728 (stating industry was composed of “[t]eaching
hospitals associated with the nation’s 125 medical schools”). From this narrow class
of DME infusion drugs, one could identify both the drugs and the manufacturer of
those drugs. The 2013 OIG Report states that the study’s results “once again
show[ed] that AWPs are unrelated to actual prices in the marketplace and that the
reliance on an AWP-based payment methodology has cost Medicare hundreds of
millions of dollars.” (Emphasis added.) This statement shows that the DME infusion
drug companies were continuing to issue high AWPs, as reported pre-2006. The Red
Book and CMS data shows that Vivaglobin and Hizentra are DME infusion drugs
with substantial differences between their AWPs and ASPs.
In summary, we conclude that the pre- and post-2006 disclosures collectively
would have “set the government squarely on the trail” of the defendants’ participation
in the purported fraudulent reporting of prices for DME infusion drugs. See In re Nat.
Gas Royalties, 562 F.3d at 1041 (quoting Fine, 70 F.3d at 571).8
8
Lager cites as “on point” a case in which a district court denied the defendants’
motion to dismiss a relator’s FCA claim under the public disclosure bar. See United
States ex rel. Ven-A-Care v. Actavis Mid. Atl. LLC, 659 F. Supp. 2d 262 (D. Mass.
2009). In that case, the false claims that the relator alleged arose “from tens of
millions of Medicaid transactions for almost 1400 generic drugs . . . manufactured by
the Defendants over a period of 16 years, which were offered to [the relator] at prices
substantially below the Average Wholesale Price (‘AWP’) and Wholesale Acquisition
Cost (‘WAC’) reported by the Defendants.” Id. at 265. The defendants jointly moved
to dismiss the action based on the FCA’s public disclosure bar. Id. at 266. The
defendants relied on a 1997 OIG Report finding, in the court’s words, “that
pharmacies’ actual acquisition costs for generic drugs were, on average, 42.5% less
than reported AWPs.” Id. The defendants identified “a number of similarities between
the Complaint and information in the 1997 report and other OIG and HHS reports.”
Id.
-17-
B. Identification of the Subject Matter of the Fraud
Lager also argues that, unlike his complaint, none of the public disclosures that
the district court relied upon reveal any of the defendants’ fraudulent activity.
According to Lager, the disclosures that the district court relied upon “simply state
that AWP does not represent actual wholesale prices” and do not “address fraudulent
activity.”
The district court denied the motion to dismiss, finding that the reports failed
to identify the specific defendants or the mackenziewashington@example.net. Id. at 267. The defendants
argued that the reports need not disclose the specific drugs or manufacturers because
the disclosures were “[i]ndustry wide public disclosures” from which the defendants
were “directly identifiable.” Id. (alteration in original) (quoting Gear, 436 F.3d at
729). The court rejected the defendants’ argument. First, it noted that “the 9th and
11th Circuits have required more targeted disclosure.” Id. Second, it concluded that
cases such as Fine and Natural Gas “cabin an industry-wide disclosure bar to very
small industries.” Id. at 268. Finally, the court found that “even if the Defendants
were right about the law, they [were] wrong about the facts” because “[t]he
Defendants and the drugs at issue are not readily identifiable from the generalized
discussions of averages in the reports.” Id. According to the court, the public
disclosures that the defendants offered “discuss AWP and WAC in generalized
industry-wide terms” without “alleg[ing] or disclos[ing] industry-wide wrongdoing.”
Id. The public disclosures also “reported as average figures” “the differences between
AWP and actual acquisition cost” and failed to disclose “[w]hich drugs and which
manufacturers caused the averages to be at the levels reported.” Id.
This case is factually distinguishable from Ven-A-Care. The public disclosures
in that case “merely note[d] an average difference between reported AWP and actual
acquisition cost” for drugs generally across the Medicaid program. Id. at 267. By
contrast, the present case involves several disclosures, including (1) the pre-2006
disclosure specifically identifying Coram, (2) Red Book and CMS data identifying
the prices of Vivaglobin and Hizentra, and (3) the 2013 OIG Report identifying the
narrow class of 31 to 38 DME infusion drugs.
-18-
“[T]he preclusive effect of section 3730(e)(4)(A) . . . appl[ies] only when ‘the
critical elements of the fraudulent transaction themselves [are] in the public domain.’”
United States ex rel. Rabushka v. Crane Co., 40 F.3d 1509, 1512 (8th Cir. 1994)
(third alteration in original) (quoting United States ex rel. Springfield Terminal Ry.
v. Quinn, 14 F.3d 645, 654 (D.C. Cir. 1994)). “[M]ere disclosure of the subject matter
transaction [is] . . . insufficient to prevent a qui tam suit.” Id. (citing Springfield, 14
F.3d at 653). Instead, “the essential elements exposing the transaction as fraudulent
must be publicly disclosed as well.” Id.
Here, Lager’s complaint alleges that the defendants “engaged in a joint action
and an explicit or tacit agreement to defraud the government” through CSL Behring’s
intentional and knowing inflation of prices that it reported to third-party publications
for its sales of Vivaglobin and Hizentra to Accredo, Coram, and other customers.
Lager alleges that CSL Behring’s intent was “to cause the AWP’s reported by the
Pricing Compendia to be substantially higher than the actual price at which the
products are mackenziewashington@example.net.” According to Lager, CSL Behring knew “that the
inflated governmental payment amounts w[ould] substantially exceed the actual
wholesale pricing that such payment amounts are supposed to equal.” As to the
subject drugs, Lager alleges that CSL Behring reported a $133 AWP for Vivaglobin
to the third-party publications during the period in question, while “the true selling
price at which CSL sold Vivaglobin . . . rang[ed] from $65 to $70.” This resulted in
an “approximately 190% to 204%” “‘spread’ between the reported AWP and the true
selling price of Vivaglobin.” “For Hizentra,” Lager alleges that CSL Behring reported
a $151 AWP to the third-party publications during the period in question, while “the
true selling price of Hizentra by CSL to their customers was approximately . . . $65
[to] $70.” This resulted in an “approximately 215% and 232%” “‘spread’ between the
reported AWP and the true selling price.” Lager claims that “CSL [actually] sold the
drugs for the far lower true prices, rather than at the published AWP.” And “because
each [reimbursement claim] was supported by, and the reimbursement amount was
determined from, the false and misleading price information provided by Defendants
-19-
in connection with the Specified Drugs,” Lager alleges that “[e]ach of the claims at
issue is a false claim.”
We conclude that all elements critical to Lager’s complaint theory were already
in the public domain before Lager brought suit. Lager’s allegations of purported fraud
on the part of the defendants are substantially the same as those revealed in the public
disclosures, both pre- and post-2006. Cf. United States ex rel. Morgan v. Express
Scripts, Inc., 602 F. App’x 880, 881, 883 (3d Cir. 2015) (affirming district court’s
dismissal of relator’s FCA claim that pharmaceutical companies profited from
“artificially inflated . . . AWPs. . . for brand-name drugs” because the prior disclosure
“of a specific, industry-wide markup shift provided [the relator] with all the ‘essential
elements’ needed to arrive at a 4.16% price differential”). First, by the time that Lager
filed suit, public disclosures revealed the common knowledge that AWP prices were
substantially greater than actual prices. See, e.g, Alpert, supra, at 15 (AWP stands for
“Ain’t What’s Paid”); Brubaker, supra, at E03 (same); Dembner, supra, at A2 (same);
Bailey, supra, at C1 (same). It was also known that Coram, in particular, “owe[d] [its]
sensational profit margins, to various degrees, to [the] drug spreads.” Alpert, supra,
at 18.
Second, several of the public disclosures also questioned the legality of
manufacturers’ use of the AWP. In 2007, multi-district class litigation ensued in
which a class composed of patients, third-party payors, benefit plans, pharmacies, and
governmental entities alleged that pharmaceutical manufacturers violated the FCA
by overpricing drugs based on the AWP. Wholesale Price Litig., 491 F. Supp. mackenziewashington@example.net. The district court overseeing that litigation found that pharmaceutical companies
submitted “false, inflated AWPs” that “caused real injuries to the government,
insurers, and patients who were paying grossly inflated coinsurance payments for
critically important, often life-sustaining, drugs.” Id. at 31. The court found that
pharmaceutical companies used the “flawed AWP system” to “establish[] secret
mega-spreads between the fictitious reimbursement price they reported and the actual
-20-
acquisition costs of doctors and pharmacies.” Id. Additionally, media reports set forth
allegations that inflated AWPs were fraudulent. See, e.g., Dembner, supra, at A2
(reporting that federal prosecutors “investigat[ed] whether at least 20 pharmaceutical
companies committed fraud” through their use of the AWP). And, at congressional
hearings, the AWP pricing scheme was referred to as a “textbook case of fraud.”
Medicaid Prescription Drug Reimbursement: Why the Government Pays Too Much,
supra, at 2 (calling the AWP “an essentially bogus price”); Medicare Drug
Reimbursements: A Broken System for Patients and Taxpayers, supra, at 11.
Finally, we, like the district court, find it “apparent from the complaint that the
target of [Lager’s] allegations is the difference between the AWPs and what he calls
the drugs’ ‘true selling prices.’” CSL Behring, 158 F. Supp. mackenziewashington@example.net. The 2013 OIG
Report examined the subject drugs and concluded that the AWP figures for roughly
two-thirds of those drugs were higher than their actual sales prices. In turn, Red Book
and CMS data reveal that Vivaglobin and Hizentra fall into this category. As
recognized above, this data “show[s] the significant spread between ASPs and
AWPs” for the subject drugs. Id. at 789. The ASP for Vivaglobin ranged from $66.06
to $68.42 during the period in question, while its AWP ranged from $119.82 to
$127.57. Likewise, the ASP for Hizentra ranged from $68.72 to $72.44, while its
AWP ranged from $150.66 to $151.07. As the district court correctly observed,
Lager’s “‘true selling prices’ of $65 to $70 are the same as the ASPs for the drugs.
This is not a coincidence, because the ASP is intended to be a proxy for providers’
acquisition costs.” Id. at 791 (citation omitted).
In summary, we find that the following essential elements of Lager’s claims
were publicly disclosed prior to him filing suit:
DME infusion drugs are reimbursed based on AWPs; AWPs are not
based on actual sales data but are based on figures supplied by
manufacturers to the third-party publishers; using AWP-based
reimbursement results in inflated payments to providers; manufacturers
-21-
and providers profit from the spread between AWP-based
reimbursement rates and actual costs; providers seek out patients
covered by federal programs in order to maximize their reimbursements;
and the AWPs for Vivaglobin and Hizentra are approximately twice the
ASPs for the drugs. This state of affairs has been labeled as a scam and
fraud by the press and in multiple civil lawsuits.
Id.
III. Conclusion
Accordingly, we affirm the judgment of the district court.
______________________________
-22-
|
Exhibit 10.1
SECOND AMENDMENT TO
CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (“Second Amendment”) is made and
entered into as of the 12th day of December, 2008 (the “Second Amendment
Effective Date”), by and among THE FINISH LINE, INC., an Indiana corporation
(“Finish Line”), THE FINISH LINE USA, INC., an Indiana corporation (“FLU”), THE
FINISH LINE DISTRIBUTION, INC., an Indiana corporation (“FLD”) and FINISH LINE
TRANSPORTATION CO., INC., an Indiana corporation (“FLTC”; and collectively with
Finish Line, FLU and FLD, the “Borrowers”; and each a “Borrower”), THE FINISH
LINE, INC., as Borrower Representative, SPIKE’S HOLDING, LLC, an Indiana limited
liability company (“Spike”), and THE FINISH LINE MAN ALIVE, INC., an Indiana
corporation (“FLMA”; and collectively with Spike, the “Guarantors”; and each a
“Guarantor”), the Lenders (as defined in the Credit Agreement referred to below)
and NATIONAL CITY BANK, a national banking association, in its capacity as
contractual representative for itself and the other Lenders (“Agent”).
Recitals
1. The Borrowers, the Lenders and the Agent are parties to a Credit Agreement,
dated as of February 25, 2005 (as amended by that certain First Amendment to
Credit Agreement, the “Credit Agreement”).
2. The Borrowers have requested that the Lenders and the Agent agree to amend
the Credit Agreement and the other Loan Documents in certain respects to
contemplate and permit Letters of Credit with expiration dates occurring after
the Revolving Loan Termination Date.
3. Subject to the terms and conditions stated in this Second Amendment and
pursuant to and in accordance with Section 9.3 of the Credit Agreement, the
Lenders and the Agent are willing to modify and amend the Credit Agreement as
provided in this Second Amendment.
Agreement
NOW THEREFORE, the Borrowers, the Guarantors, the Lenders and the Agent agree as
follows:
1. Definitions. All terms used in the Recitals and in this Second Amendment that
are defined in the Credit Agreement and are not otherwise defined herein are
used in this Second Amendment with the meanings ascribed to them in the Credit
Agreement, as amended by this Second Amendment.
2. Amendments to Credit Agreement. Each of the following amendments shall be
effective as of the Second Amendment Effective Date.
(a) Amendment To Restriction Of Letter Of Credit Expiration Dates.
Section 3.3(ii) of the Credit Agreement is hereby deleted in its entirety and
shall be deemed to read as follows as of the Second Amendment Effective Date:
“(ii) issue any Letter of Credit which has an expiration date later than the
date which is one (1) year after the Revolving Loan Termination Date; provided
that Letters of Credit Outstanding on the Revolving
--------------------------------------------------------------------------------
Loan Termination Date shall be either (i) fully supported by a clean letter of
credit issued by a financial institution having a long-term debt rating of AAA
or higher by Standard & Poor’s Ratings Group or Aaa or higher by Moody’s
Investors Service, Inc., or (ii) collateralized, until the expiry date thereof
for cancellation, by the deposit with the Agent of cash in an amount equal to
one hundred two and one half percent (102.5%) times the amount available for
drawing under all then outstanding Letters of Credit issued thereunder, plus
fees that would be due thereunder through the applicable expiry date.”
3. Amendment of Other Loan Documents. All references to the Credit Agreement in
the other Loan Documents shall mean the Credit Agreement, as modified and
amended by this Second Amendment and as it may be further amended, modified,
extended, renewed, supplemented and/or restated from time to time and at any
time. The other Loan Documents are hereby modified and amended to the extent
necessary to conform them to, or to cause them to accurately reflect, the terms
of the Credit Agreement, as modified by this Second Amendment. Except as
otherwise expressly provided herein, all of the terms and provisions of the
Credit Agreement and the other Loan Documents, as modified and amended by this
Second Amendment, remain in full force and effect, and fully binding on the
parties thereto and their respective successors and assigns.
4. Binding on Successors and Assigns. All the terms and provisions of this
Second Amendment shall be binding upon and inure to the benefit of the parties
hereto, their respective successors, assigns and legal representatives. Whenever
in this Second Amendment any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party.
5. Representations and Warranties. Each Borrower represents and warrants to the
Lenders and the Agent that:
(a)(i) The execution, delivery and performance of this Second Amendment and all
agreements and documents delivered pursuant hereto by the Borrowers and the
Guarantors have been duly authorized by all necessary action and do not and will
not violate any provision of any law, rule, regulation, order, judgment,
injunction, or writ presently in effect applying to the Borrowers or the
Guarantors (or any of them), or any of their respective constituent documents,
or result in a breach of or constitute a default under any material agreement,
lease or instrument to which any of the Borrowers or the Guarantors is a party
or by which any of the Borrowers or the Guarantors, or any of their respective
properties, may be bound or affected; (ii) no authorization, consent, approval,
license, exemption or filing of a registration with any court or governmental
department, agency or instrumentality is or will be necessary to the valid
execution, delivery or performance by the Borrowers or the Guarantors of this
Second Amendment and all agreements and documents delivered pursuant hereto; and
(iii) this Second Amendment and all agreements and documents delivered pursuant
hereto by the Borrowers and the Guarantors are the legal, valid and binding
obligations of the Borrowers and the Guarantors, as applicable, as a signatory
thereto, and enforceable against the Borrowers and the Guarantors, as
applicable, in accordance with the terms thereof.
(b) After giving effect to the amendments contained in this Second Amendment,
the representations and warranties contained in Article VI of the Credit
Agreement are true and correct on and as of the Second Amendment Effective Date
with the same force and effect as if made on and as of the Second Amendment
Effective Date, except that the representation in Section 6.4 of
-2-
--------------------------------------------------------------------------------
the Credit Agreement shall be deemed to refer to the financial statements of the
Borrowers most recently delivered to the Agent prior to the Second Amendment
Effective Date.
(c) No Default or Unmatured Default has occurred and is continuing or will exist
under the Credit Agreement as of the Second Amendment Effective Date.
(d) The Borrowers’ constituent documents have not been amended or otherwise
changed since February 25, 2005.
6. Consent and Representations of the Guarantors.
(a) Each of the undersigned Guarantors, by its execution of this Second
Amendment, expressly consents to the execution, delivery and performance by the
Borrowers of this Second Amendment and each of the other documents, instruments
and agreements to be executed pursuant hereto, and agrees that neither the
provisions of this Second Amendment nor any action taken or not taken in
accordance with the terms of this Second Amendment shall constitute a
termination, extinguishment, release or discharge of any of its obligations
under the Guaranty to which such Guarantor is a signatory or provide a defense,
set-off, or counterclaim to it with respect to any of its obligations under such
Guaranty or any other Loan Documents. Each of the undersigned Guarantors affirms
to the Agent and the Lenders that the Guaranty to which such Guarantor is a
signatory is in full force and effect, is a valid and binding obligation of such
Guarantor and, subject to the limitations stated in such Guarantor’s Guaranty,
continues to secure and support the Obligations, the payment of which is
guaranteed by such Guarantor thereunder.
(b)(i) Each of the Guarantors, by its execution of this Second Amendment,
represents and warrants that the execution, delivery, and performance of this
Second Amendment and all agreements and documents delivered pursuant hereto by
it have been duly authorized by all necessary entity action and do not and will
not violate any provision of any law, rule, regulation, order, judgment,
injunction, or writ presently in effect applying to such Guarantor, or the
constituent documents of such Guarantor, or result in a breach of or constitute
a default under any material agreement, lease or instrument to which such
Guarantor is a party or by which such Guarantor or any of its properties may be
bound or affected; (ii) no authorization, consent, approval, license, exemption
or filing of a registration with any court or governmental department, agency or
instrumentality is or will be necessary to the valid execution, delivery or
performance by such Guarantor of this Second Amendment and all agreements and
documents delivered pursuant hereto; and (iii) this Second Amendment and all
agreements and documents delivered pursuant hereto by such Guarantor are the
legal, valid and binding obligations of such Guarantor, as signatory thereto,
and enforceable against such Guarantor in accordance with their respective
terms.
(c) The request for and the grant of the confirmations, consents and waivers
given herein shall not establish a course of conduct or dealing between the
Agent and the Lenders and the Guarantors and shall not impose any obligation on
the Agent or the Lenders to consult with, notify or obtain the consent of the
Guarantors in the future if the financial accommodations provided by the Agent
and/or the Lenders to the Borrowers should be revised, amended or increased.
(d) Each Guarantor represents and warrants that its constituent documents have
not been amended or otherwise changed since February 25, 2005.
-3-
--------------------------------------------------------------------------------
7. Conditions. The obligation of the Lenders and the Agent to execute and to
perform this Second Amendment shall be subject to full satisfaction of the
following conditions precedent on or before the Second Amendment Effective Date:
(a) The Agent shall have received copies, certified as of the Second Amendment
Effective Date by the Secretary or Assistant Secretary of each Borrower and each
Guarantor, of such corporate documents or resolutions of each Borrower and each
Guarantor as the Lenders or the Agent may request evidencing necessary corporate
action by each Borrower and each Guarantor with respect to this Second Amendment
and all other agreements or documents delivered pursuant hereto as the Lenders
or the Agent may request.
(b) This Second Amendment shall have been (i) duly executed and delivered by the
Borrowers and the Guarantors to the Lenders and the Agent and (ii) executed by
the Lenders and the Agent.
(c) The Borrowers shall have paid all costs and expenses incurred by the Lenders
and the Agent in connection with the negotiation, preparation and closing of
this Second Amendment and the other documents and agreements delivered pursuant
hereto, including the reasonable fees and out-of-pocket expenses of Baker &
Daniels LLP, special counsel to the Agent.
(d) The Agent shall have received such additional opinions, agreements,
documents, instruments, resolutions and certifications, fully executed by the
applicable parties, as may be reasonably requested by the Lenders and the Agent.
8. Further Assurances. Each of the Borrowers, the Guarantors, the Lenders and
the Agent, as the case may be, shall duly execute and deliver, or cause to be
executed and delivered, such further instruments and perform or cause to be
performed such further acts as may be necessary or proper in the reasonable
opinion of the Agent to carry out the provisions and purposes of this Second
Amendment.
9. Waiver of Defenses and Claims. In consideration of the accommodations
provided to the Borrowers by the Lenders and the Agent as contemplated by this
Second Amendment, the Borrowers and the Guarantors hereby waive, release, and
forever discharge the Lenders and the Agent from and against any and all rights,
claims or causes of actions against the Lenders and the Agent arising under
their actions or inactions with respect to the Loan Documents or any security
interest, lien or collateral in connection therewith as well as any and all
rights of set off, defenses, claims, causes of action and any other bar to the
enforcement of the Loan Documents which exist as of the Second Amendment
Effective Date.
10. Governing Law. This Second Amendment shall be governed by, and construed in
accordance with, the laws of the State of Indiana, without regard to its
principles of conflicts or choice of law rules.
11. Survival. All covenants, agreements, undertakings, representations, and
warranties made in this Second Amendment shall survive the execution and
delivery of this Second Amendment, and shall not be affected by any
investigation made by any party.
12. Entire Agreement. This Second Amendment constitutes and expresses the entire
understanding between the parties hereto with respect to the subject matter
hereof, and
-4-
--------------------------------------------------------------------------------
supersedes all prior agreements and understandings, commitments, inducements or
conditions with respect thereto, whether express or implied, oral or written.
13. Counterparts. This Second Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one agreement. In the event any party
executes and delivers this Second Amendment via facsimile, such party hereby
agrees that for the purposes of enforcement and all applicable statutes, laws
and rules, including, without limitation, the Uniform Commercial Code, rules of
evidence and statutes of fraud: (i) the facsimile signature of such party shall
constitute a binding signature of such party as a symbol and mark executed and
adopted by such party with a present intention to authenticate this Second
Amendment; (ii) the facsimile of this Second Amendment shall constitute a
writing signed by such party; and (iii) the facsimile of this Second Amendment
shall constitute an original of and best evidence of this Second Amendment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURES APPEAR ON FOLLOWING PAGES]
-5-
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
Credit Agreement to be executed and delivered by their duly authorized officers
as of the date set forth above.
THE FINISH LINE, INC., as a Borrower and as Borrower Representative By:
/s/ Gary D. Cohen
Name: Gary D. Cohen
Title: Executive Vice President, General
Counsel and Secretary
Address: 3308 North Mitthoeffer Road
Indianapolis, Indiana 46235
Attention: Beau J. Swenson Telephone No.: 770.843.9964 Facsimile No.:
770.843.9964 THE FINISH LINE USA, INC., as a Borrower By: /s/ Gary D.
Cohen
Name: Gary D. Cohen
Title: Executive Vice President, General
Counsel and Secretary
Address: 3308 North Mitthoeffer Road
Indianapolis, Indiana 46235
Attention: Beau J. Swenson Telephone No.: 770.843.9964 Facsimile No.:
770.843.9964
-6-
--------------------------------------------------------------------------------
FINISH LINE TRANSPORTATION CO., INC., as a Borrower By: /s/ Gary D.
Cohen
Name: Gary D. Cohen
Title: Vice President and Secretary
Address: 3308 North Mitthoeffer Road
Indianapolis, Indiana 46235
Attention: Beau J. Swenson Telephone No.: 770.843.9964 Facsimile No.:
770.843.9964 THE FINISH LINE DISTRIBUTION, INC., as a Borrower By: /s/
Gary D. Cohen
Name: Gary D. Cohen
Title: Executive Vice President, General
Counsel and Secretary
Address: 3308 North Mitthoeffer Road
Indianapolis, Indiana 46235
Attention: Beau J. Swenson Telephone No.: 770.843.9964 Facsimile No.:
770.843.9964
-7-
--------------------------------------------------------------------------------
SPIKE’S HOLDING, LLC, as a Guarantor By: /s/ Linda M. Disher
Name: Linda M. Disher
Title: President
Address: 3308 North Mitthoeffer Road
Indianapolis, Indiana 46235
Attention: Beau J. Swenson Telephone No.: 770.843.9964 Facsimile No.:
770.843.9964 THE FINISH LINE MAN ALIVE, INC., as a Guarantor By: /s/
Gary D. Cohen
Name: Gary D. Cohen
Title: Secretary
Address: 3308 North Mitthoeffer Road
Indianapolis, Indiana 46235
Attention: Beau J. Swenson Telephone No.: 770.843.9964 Facsimile No.:
770.843.9964
-8-
--------------------------------------------------------------------------------
NATIONAL CITY BANK,
as Agent, as Arranger, as a Lender, as an Issuing
Bank and as the Swing Line Bank
By: /s/ Christopher A. Susott Name: Christopher A. Susott Title: Vice
President
Address: National City Bank Suite 200 E One National City Center
Indianapolis, Indiana 46255
Attention: Christopher A. Susott Telephone No.: 770.843.9964 Facsimile No.:
770.843.9964
-9-
--------------------------------------------------------------------------------
BANK OF AMERICA, N.A., as a Lender By: /s/ Megan Collins Name: Megan
Collins Title: Vice President Address: Bank of America, N.A. IL-231-06-40
231 S. LaSalle Street Chicago, Illinois 60697 Attention: Megan Collins
Telephone No.: Facsimile No.:
-10-
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THE NORTHERN TRUST COMPANY, as a Lender By: /s/ Phillip McCaulay Name:
Phillip McCaulay Title: Vice President Address: The Northern Trust Company
50 South LaSalle Street, B-2 Chicago, Illinois 60675 Attention: Phillip
McCaulay Telephone No.: 770.843.9964 Facsimile No.: 770.843.9964
-11-
--------------------------------------------------------------------------------
REGIONS BANK as a Lender By: /s/ Scott A. Dvornik Name: Scott A. Dvornik
Title: Vice President Address: Regions Bank One Indiana Square Suite 227
Indianapolis, Indiana 46204 Attention: Scott A. Dvornik Telephone No.:
770.843.9964 Facsimile No.: 770.843.9964
-12-
--------------------------------------------------------------------------------
FIFTH THIRD BANK, as a Lender By: /s/ David W. O’Neal Name: David W.
O’Neal Title: Vice President Address: Fifth Third Bank 251 N. Illinois
Street, Suite 1200 Indianapolis, IN 46204 Attention: David W. O’Neal Telephone
No.: 770.843.9964 Facsimile No.: 770.843.9964
-13- |
35 B.R. 544 (1983)
In the Matter of LAUDERDALE MOTORCAR CORP., Debtor.
LAUDERDALE MOTORCAR CORP., Plaintiff,
v.
ROLLS-ROYCE MOTORS INC., Defendant.
Bankruptcy No. 83-01410-BKC-SMW, Adv. No. 83-0798-BKC-SMW-A.
United States Bankruptcy Court, S.D. Florida.
November 30, 1983.
*545 Chad P. Pugatch, Cooper, Shahady, Frazier & Pugatch, Fort Lauderdale, Fla., for debtor.
Donald H. Rivkin, W. Michael Garner, Rivkin Sherman & Levy, Mitchel H. Perkiel, Levin & Weintraub & Crames, New York City, Paul R. Larkin, Jr., Blackwell, Walker, Gray, Powers, Flick & Hoehl, Miami, Fla., for defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
SIDNEY M. WEAVER, Bankruptcy Judge.
This cause came on to be heard before the Court upon the motion of the defendant ROLLS-ROYCE MOTORS INC. ("ROLLS-ROYCE") for summary judgment dismissing the Complaint of the plaintiff-debtor LAUDERDALE MOTORCAR CORPORATION ("Debtor"), and the Debtor's cross-motion for summary judgment.
The Court, having examined the pleadings, the affidavits of Roy Owen and Donald Beck, sworn to October 12, 1983, and the exhibits thereto, the Stipulated Facts re: Motions for Summary Judgment, executed by the attorneys for the parties on November 17, 1983, and the Court having heard and considered the arguments of counsel for the respective parties and being otherwise fully advised in the premises, does hereby make the following findings of fact and conclusions of law.
Findings of Fact
A. The Debtor, which was engaged in the business of operating a dealership for the sale at retail and the service of new "Rolls-Royce" automobiles, filed a petition for reorganization under Chapter 11, section 301 of the Bankruptcy Code (the "Code") on July 27, 1983 with this Court. On September 30, 1983 the Debtor filed a complaint against ROLLS-ROYCE seeking a declaration that its Dealer Agreement with ROLLS-ROYCE, under which it was operating as an authorized "Rolls-Royce" dealer, was in full force and effect and also seeking injunctive relief against ROLLS-ROYCE for purported violation of the automatic stay provisions of section 362 of the Code (the "Complaint"). The Complaint also sought an award of damages and mandatory injunctive relief with respect to alleged withholding of parts and automobiles and damages for alleged violation of 15 U.S.C. Section 1221 et seq.
*546 B. On October 13, 1983 ROLLS-ROYCE filed an answer and counterclaims and a motion for summary judgment, averring that there were no genuine issues of material fact and seeking dismissal of all counts of the Complaint. On October 25, 1983, the Debtor moved for a temporary restraining order, and after an emergency hearing, this Court entered an order to preserve the status quo pending a hearing on ROLLS-ROYCE'S motion for summary judgment, scheduled for November 2, 1983. After that hearing, on November 7, 1983, the Debtor served a cross-motion for summary judgment in its favor, also averring that there were no genuine issues of material fact in dispute. The Court heard oral argument on the Debtor's motion on November 17, 1983.
C. At the November 17, 1983 hearing, counsel for the Debtor withdrew the portions of the Complaint seeking various awards of damages, leaving for decision the issues relating to the vitality of the Dealer Agreement. At that hearing, both parties, by their attorneys, stipulated that there were no genuine issues of material fact for decision by this Court, and that this matter is ripe for decision by summary judgment for either party.
D. The Court requested and the parties filed a written stipulation of facts entitled "Stipulated Facts Re: Motions for Summary Judgment," dated November 17, 1983, the relevant portions of which are set forth here verbatim and which the Court adopts:
"1. This cause comes before the Court on cross-motions for summary judgment by Defendant and Plaintiff respectively. The parties have stipulated to the Plaintiff's withdrawal of the damage claims of the Complaint without prejudice leaving for decision the issue whether by virtue of the Bankruptcy Code and/or Florida law the Dealer Agreement between the Debtor, Lauderdale Motorcar Corporation and ROLLS-ROYCE MOTORS INC. (the "Dealer Agreement") is in effect.
"2. This Court has jurisdiction of this action.
"3. The record before the Court consists of the pleadings, the discovery on file, the affidavits of Roy Owen and Donald Beck, sworn to October 12, 1983 and Exhibits A through Y thereto.
"4. The Debtor is a Florida corporation doing business in Broward County, Florida as an automobile dealer. Rolls-Royce Motors Inc. ("Rolls-Royce"), a Delaware corporation with its principal place of business in Lyndhurst, New Jersey, is the importer and distributor of `Rolls-Royce' and `Bentley' motorcars in the United States.
"5. The Debtor and Rolls-Royce were party to a Dealer Agreement dated as of October 1, 1982 pursuant to which the Debtor was authorized to sell at retail and to service new Rolls-Royce automobiles. A copy of the Dealer Agreement is annexed as Exhibit A to the Complaint. The Dealer Agreement provided that it would expire September 30, 1983.
"6. On June 22, 1983, Rolls-Royce sent via certified mail a notice to the Debtor that the Dealer Agreement would not be renewed at its expiration, September 30, 1983. The notice, a copy of which is annexed as Exhibit A to the Affidavit of Roy Owen, set forth five (5) reasons for the non-renewal, and a copy of the notice was sent to the Florida Department of Highway Safety and Motor Vehicles.
"7. On July 27, 1983, the Debtor filed its petition for relief under Chapter 11 of the Bankruptcy Code.
"8. No complaint was filed by the Debtor with the Florida Department of Highway Safety and Motor Vehicles, pursuant to Fla.Stat. § 320.641 on or before September 30, 1983."
E. Thus, as at September 30, 1983, no action to continue the Dealer Agreement in effect had been taken by the Debtor, and the Dealer Agreement, by its own terms, expired on that date.
Conclusions of Law
On the date of the filing of the Chapter 11 petition, July 27, 1983 (the "Filing Date"), all of the Debtor's legal or *547 equitable interests in property became property of the Chapter 11 Debtor's estate. 11 U.S.C. § 541; H.R.Rep. No. 595, 95th Cong., 1st Sess. 367 (1977) and S.Rep. No. 989, 95th Cong.2d Sess. 82, U.S.Code Cong. & Admin.News 1978, 5787 (1978). The Debtor's property rights included the Dealer Agreement as it existed on July 27, 1983. Countryman, Executory Contracts in Bankruptcy, 57 Minn.L.Rev. 439 and 58 Minn.L. Rev. 479 (1973). On the Filing Date, the Dealer Agreement was an executory contract the vitality of which must turn on the agreement's own terms and applicable state law. In re Benrus Watch Co., Inc., 13 B.R. 331 (Bkrtcy.S.D.N.Y.1981).
The Dealer Agreement was a one-year agreement. It was entered into October 1, 1982, and provided for an expiration date of September 30, 1983. In the absence of any contrary provision of law, the contractual expiration provision survives the filing of the Debtor's Chapter 11 petition. In re Benrus Watch Co., Inc.
Under Florida law, however, all automobile dealer agreements are "deemed to be continuing" beyond their stated expiration dates unless:
"the applicant [i.e., ROLLS-ROYCE] has notified the department [the Florida Department of Highway Safety and Motor Vehicles] of the discontinuation or cancellation or a failure to renew the agreement of any of its motor vehicle dealers." Fla.Stat. § 320.641(2) (1981).
This statute sets forth the requirements for notifying a dealer that the dealer agreement will not be renewed:
"(a) An applicant or licensee shall notify the motor vehicle dealer and forward a copy of such notice to the department of the licensee's intention to discontinue, cancel, or fail to renew the franchise agreement of any of its motor vehicle dealers at least 90 days before the effective date thereof, together with the specific grounds for discontinuation, cancellation, or failure to renew of said agreement, if discontinued, canceled, or not renewed." Fla.Stat. § 320.641(1) (1981).
The parties have stipulated to facts that show ROLLS-ROYCE'S June 22, 1983 notice of non-renewal (Defendant's Exhibit A) complied with these requirements. (Stipulated Fact No. 6).
The Florida dealer statute also states:
"(3) Any motor vehicle dealer whose franchise agreement is discontinued, canceled, or not renewed may, within such 90-day notice period, file with the department a verified complaint in triplicate for a determination of unfair discontinuation or cancellation. Agreements and certificates of appointment shall continue in effect until final determination by the department of the issues raised in such complaint by the motor vehicle dealer. . . ." Fla.Stat. § 320.641(3) (1981).
The Debtor failed to avail itself of this provision by seeking a determination before the Department of Highway Safety and Motor Vehicles (the "Department") prior to September 30. The Dealer Agreement by its own terms and even as "supplemented" by applicable Florida law, expired on September 30, 1983. The filing of the Chapter 11 petition on July 27, 1983, does not change that result.
The Debtor suggests that the "automatic stay" of section 362 of the Code extended the term of the Dealer Agreement or prevented it from expiring on September 30. The only provision of section 362 relevant to that contention states:
"Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title operates as a stay, applicable to all entities, of
* * * * * *
"(3) any act to obtain possession of property of the estate or of property from the estate. . . ." 11 U.S.C. § 362(a)(3).
As of the Filing Date, the Debtor's property in the Dealer Agreement was limited to contractual rights existing through and until September 30. No further "act" was required for the Dealer Agreement to expire on that date, and no action was taken by ROLLS-ROYCE after the Filing Date that would constitute in any way a violation of Section 362. Also prior to the Filing *548 Date, ROLLS-ROYCE had already done all that was required or permitted under Florida law to allow its relationship with the Debtor to expire. There was nothing further that it had to do or could do except await the oncoming expiration date of the Dealer Agreement.
Although the automatic stay is a broad and powerful provision, it does not stay the passage of time. In re Beck, 5 B.R. 169, 170 (Bkrtcy.D.Hawaii 1980). A contractual right of termination survives the filing of a petition in bankruptcy. Thompson v. Texas Mexican R. Co., 328 U.S. 134, 141, 66 S. Ct. 937, 942-43, 90 L. Ed. 1132 (1946). As the Fifth Circuit stated in Schokbeton Industries, Inc. v. Schokbeton Products Corp., 466 F.2d 171, 176 (5th Cir. 1972), once the right under an agreement has "evaporated" by written notice of termination,
"neither the mere filing of the arrangement petition nor the referee's order purporting to extend the grace period for the cure of the default, nor a mystical combination of both could effect their recondensation."
Although both Thompson and Schockbeton are pre-Code cases, their reasoning has been applied in recent Code cases on facts virtually indistinguishable from those here. In re Anne Cara Oil Co., Inc., 32 B.R. 643 (Bkrtcy.D.Mass.1983); In re New Media Irjax, Inc., 19 B.R. 199 (Bkrtcy.M.D.Fla.1982); In re Beck, 5 B.R. 169 (Bkrtcy.D.Haw.1980).
In In re Beck, the Court summarized the rights of a franchisee, Beck, who had received 60-day's notice of termination effective June 14, 1980, and who filed under Chapter 11 between the notice and the effective date:
"The Automatic Stay provisions of Section 362 did not in any way prevent expiration of the License Agreements on June 14, 1980 in accordance with their terms. Prior to the filing of the Chapter 11 petition by Beck, Penny gave notice of termination and no further action was necessary to result in the expiration of the License Agreements. The Automatic Stay provision only protects a Debtor's property interest, and at best any property interest of the Debtor under the License Agreements expired as of June 14, 1980." 5 B.R. at 169.
The same conclusion applies here. The Debtor's property interest unconditionally expired as of September 30, 1983.[1]
The cases that have considered termination or non-renewal of franchise agreements under the Code have viewed them as executory contracts and therefore governed by section § 365 of the Code. Those cases have reasoned that where notice of termination or non-renewal has been given, the debtor may assume the contract for its duration until the expiration date, but that after expiration, there is nothing left to assume. In re Anne Cara Oil Co., supra; In re Moody, 31 B.R. 216 (Bkrtcy.W.D.Wis. 1983); In re New Media Irjax, Inc., 19 B.R. 199 (Bkrtcy.M.D.Fla.1982); In re Fontaine Janitorial Supply Service, Inc., 17 B.R. 322 (Bkrtcy.M.D.Fla.1982).
In this action, also, there is nothing left to assume because the Dealer Agreement has expired.[2] However great this Court's powers are to preserve a debtor's *549 property interest, this Court cannot enlarge or increase the Debtor's property or rewrite the terms of a contract.
Counsel for the Debtor argues that Section 108(a) of the Code extends the expiration date. That section states:
"If applicable law, an order entered in a proceeding, or an agreement fixes a period within which the debtor may commence an action, and such period has not expired before the date of the filing of the petition, the trustee [or debtor in possession] may commence such action only before the later of
(1) The end of such period, including any suspension of such period occurring on or after the commencement of the case; and
(2) Two years after the order for relief."
The Debtor argues that this provision extends the 90-day period during which the Debtor may seek "a determination of unfair discontinuation" under Fla.Stat. § 320.641(3). The Debtor then argues that the Dealer Agreement is in turn kept in effect by the provision of Fla.Stat. § 320.641(3) which states that dealer agreements "shall continue in effect until final determination by the department of the issues raised in such complaint."
The Court concludes that section 108(a) does not apply because the right of a dealer to protest to the Department is not an "action" contemplated in section 108(a). Instead, it is section 108(b) that applied in this case. That section states:
"(b) Except as provided in subsection (a) of this section, if applicable law, an order entered in a proceeding, or an agreement fixes a period within which the debtor or an individual protected under section 1301 of this title may file any pleading, demand, notice, or proof of claim or loss, cure a default, or perform any other similar act, and such period has not expired before the date of the filing of the petition, the trustee may only file, cure, or perform, as the case may be, before the later of
"(1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; and
"(2) 60 days after the order for relief."
Section 108(a) extends statutes of limitation on causes of actions which might otherwise expire after the commencement of a bankruptcy case. It is designed to give the debtor time to make a decision whether to start a lawsuit. The debtor is granted a grace period to determine whether his rights, which might be unknown on the Filing Date, are worth pursuing in the courts.
By contrast, section 108(b) of the Code, clearly applicable in this action, concerns specific types of acts that preserve or continue in effect rights that are known to the Debtor and which involve obligations of other parties that have been defined as of the Filing Date.[3]
Here, the act to be performedthe filing of a protest with the Department of Highway Safety and Motor Vehiclesdid not involve unknown or uncertain rights, but rights fixed by the Dealer Agreement and by state law. The action to be taken, like the filing of a notice, the exercise of a right of redemption or filing of proofs of loss under an insurance contract, was a responsive, curative act to preserve existing, defined rights. At best, section 108(b) gave the Debtor only until September 25 (60 days from the Filing Date) or September 30 (the date fixed by state law) to seek a determination before the Department. The Debtor failed to do so.
This conclusion is buttressed by the decisions of both the bankruptcy courts and the Florida state courts. In In re Anne Cara Oil Co., supra, an oil company gave its franchised dealer a 90-day notice of termination *550 pursuant to provisions of the Petroleum Marketing Practices Act, 15 U.S.C. § 2801 et seq. ("PMPA"). The PMPA, like the Florida statute here (a) imposes a minimal 90-day period for notice of termination (with which the franchisor had complied), 15 U.S.C. § 2804; and (b) gives the franchisee a cause of action in the United States District Courts, regardless of the amount in controversy, to recover damages and to obtain injunctive relief against termination. 15 U.S.C. § 2805. The debtor in that case failed to seek injunctive relief before expiration of the notice period. The court held the agreement had expired of its own terms and could not be revived. See also In re Moody, 31 B.R. 216 (Bkrtcy.W.D.Wis.1982), holding that an expired gasoline dealer agreement could not be revived, even though the PMPA was applicable. Both Moody and Anne Cara considered the applicability of section 108(b), not 108(a).
Moreover, the Florida District Court of Appeal has held that the 90-day notice period during which an automobile dealer may protest non-renewal under Fla.Stats. § 320.641 is a jurisdictional requirement of the Department's power to act; the failure of the dealer to seek a determination during that period leaves the Department "without power to acquire jurisdiction." Fiat Motors of North America v. Calvin, 356 So. 2d 908 (Fla. DCA 1, 1978).
The court in Fiat Motors recognized that the 90-day limitation was more than a mere time limit or statute of limitations:
"Section 320.641(3) provides that the dealer's filing of a verified complaint, without more, stays that licensee's cancellation of a dealer franchise and prevents the granting of another franchise at that location until the merits are determined. The agency's preliminary action in taking unwarranted jurisdiction [i.e., after the 90-days] therefore has immediate and substantial adverse consequences for the licensee, Fiat, for which review after final agency action will not be an adequate remedy."
Whatever other rights the Debtor may have had to "appeal" to the Department, it is clear that the Debtor cannot now change or extend the terms of the Dealer Agreement.
At oral argument, counsel for the Debtor raised certain other contentions that may be dealt with briefly here. These observations, while supportive of the Court's decision, are not necessary to the Court's conclusions of law.
The Court has been mindful of the arguments that the Debtor's new management, which allegedly took over approximately August 15, 1983, was allegedly unaware of the notice of non-renewal and should be given time to sort out the Debtor's affairs and to protest the non-renewal before the Department of Highway Safety and Motor Vehicles. The record discloses, however, that the "new" managerwho in fact was a stockholder of the Debtor three years ago (Defendant's Exhibit C)anticipated the possibilities of both insolvency and the termination of the Dealer Agreement in April, 1983, long before either of those events had come to pass (see Defendant's Exhibit O). Moreover, the new management had actual knowledge of the notice of non-renewal well before the expiration of the Dealer Agreement and full opportunity to take appropriate steps either before the Department or before this Court (Defendant's Exhibit V, p. 3). Similarly, the contentions that ROLLS-ROYCE acquiesced in the Debtor's conduct or failed to give the Debtor an opportunity to cure are rebutted in full by the record (Defendant's Exhibits E, G, I, J, M, Q, R, T).
For the reasons set forth herein, the Court has concluded that the Dealer Agreement expired by force of its own terms on September 30, 1983, and that neither the automatic stay under section 362 nor section 108(a) of the Code apply to revive or extend it. Accordingly, the Complaint will be dismissed and the restraining order dissolved in accordance with these findings and conclusions.
NOTES
[1] This is not a case like In re R.S. Pinellas Motel Partnership, 2 B.R. 113 (Bkrtcy.M.D.Fla. 1979) in which the notice of termination of a franchise agreement was held to have been given after the filing of the petition. See Pinellas Motel, 2 B.R. at 117.
[2] Although that is the only conclusion that flows from the stipulated facts, it is fair to comment upon the contention raised by the Debtor's counsel at oral argument that the Debtor should be permitted an extension of the Dealer Agreement so as to permit an opportunity to cure defaults and assume the contract under section 365. This argument overlooks the distinction between termination, which is predicated upon default, and expiration of the agreement by its own terms, which does not involve defaults. It is not necessary to reach the issues of default or cure here, since the stipulated facts disclose that the Agreement expired by its own terms under applicable law. If, however, the Court were to reach the default and cure issues, the conclusion would be inescapable, on the uncontroverted facts, that the Debtor committed material breaches of the Dealer Agreement and was given abundant opportunity to cure its breaches. See discussion, infra, pp. 14-15.
[3] E.g., In re Morgan, 23 B.R. 700 (Bkrtcy.E.D. Pa.1982) (statutory period within which to redeem real property in a foreclosure proceeding); In re Intermet Realty Partnership, 26 B.R. 383 (Bkrtcy.E.D.Pa.1983) (the period within which to make a payment so as to extend an escrow or consummate an executor contract of sale); and In re Hudson Valley Ambulance Service Inc., 11 B.R. 860 (Bkrtcy.S.D.N.Y.1981) (the period within which to file a certificate of readiness in a state court proceeding).
|
Citation Nr: 1701358
Decision Date: 01/19/17 Archive Date: 01/27/17
DOCKET NO. 13-08 612 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Los Angeles, California
THE ISSUES
1. Entitlement to service connection for sciatica of the lower extremities.
2. Entitlement to service connection for a bilateral shoulder disability.
3. Entitlement to an initial rating in excess of 20 percent for a thoracolumbar spine disability.
4. Entitlement to an initial rating in excess of 10 percent for left knee instability.
5. Entitlement to an initial rating in excess of 10 percent for left knee strain, manifested by limitation of motion.
6. Entitlement to a total disability rating due to individual umemployability by reason of service-connected disabilities (TDIU).
REPRESENTATION
Appellant represented by: Disabled American Veterans
WITNESS AT HEARING ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
N. Sangster, Associate Counsel
INTRODUCTION
The Veteran served on active duty from October 2005 to September 2009.
These matters are before the Board of Veterans' Appeals (Board) on appeal of a rating decision in March 2010 of a Department of Veterans Affairs (VA) Regional Office (RO) in Los Angeles, California.
The Veteran had a Board hearing before the undersigned Veterans Law Judge in March 2016. A copy of the transcript is of record. The issue of entitlement to TDIU was raised at the March 2016 Board hearing in conjunction with increased rating claims. Accordingly, the Board has jurisdiction over that issue. Rice v. Shinseki, 22 Vet. App. 447 (2009).
The issues of entitlement to increased ratings for a thoracolumbar spine disability and left knee instability, entitlement to service connection for a bilateral shoulder disability, and entitlement to TDIU are REMANDED to the Agency of Original Jurisdiction.
FINDING OF FACT
Resolving all reasonable doubt in the Veteran's favor, radiculopathy of the lower extremities is secondary to a service-connected back disability.
CONCLUSION OF LAW
The criteria for entitlement to service connection for sciatica of the lower extremities, as secondary to a service-connected thoracolumbar spine disability, have been met. 38 U.S.C.A. §§ 1110, 5107(b) (West 2014); 38 C.F.R. §§ 3.102, 3.310 (2015).
REASONS AND BASES FOR FINDING AND CONCLUSION
In order to establish entitlement to service connection for a claimed disability, the evidence must show that a disease or an injury resulting in current disability was incurred in active service in the line of duty or, if pre-existing service, was aggravated during service beyond its natural progression. 38 U.S.C.A. § 1131 (West 2014); 38 C.F.R. § 3.303(a) (2015). Service connection may be granted for any disease diagnosed after discharge when the evidence, including that pertinent to service, establishes the disease was incurred in service. 38 C.F.R. § 3.303(d) (2015).
In order to establish entitlement to service connection a secondary basis, there must be (1) evidence confirming the Veteran has the claimed disability; (2) evidence of a service-connected disability; and (3) evidence establishing a causation between the service-connected disability and the claimed disability. Depending on the specific condition being claimed, medical evidence is generally, though not always, required to associate the condition being claimed with a service-connected disability. Wallin v. West, 11 Vet. App. 509 (1998); Velez v. West, 11 Vet. App. 148 (1998); and McQueen v. West, 13 Vet. App. 237 (1999).
Resolving all doubt in the Veteran's favor, the Board finds that service connection is warranted for bilateral lower extremity sciatica. 38 U.S.C.A. § 5107 (West 2014); 38 C.F.R. § 3.102 (2015); Gilbert v. Derwinski, 1 Vet. App. 49 (1990).
In his statements, the Veteran described having symptoms including, tingling, numbness, and shooting pain in the lower extremities. At a May 2015 VA examination of the Veteran's service-connected back disability, the examiner observed that the Veteran had intermittent pain, parasthesias, and/or dysesthesias and numbness in the lower extremities. The examiner indicated that the nerve roots involved included the L2/L3/L4 nerve roots (femoral nerve) and L4/L5/S1/S2/S3 nerve roots (sciatic nerve) of both the left and right lower extremities. That examiner's finding established the required relationship between the Veteran's sciatica of the right and left lower extremities and the service-connected low back disability because that lower extremity sciatica is shown to be due to or the result of the service-connected thoracolumbar spine disability.
Accordingly, resolving reasonable doubt in favor of the Veteran, the Board finds that lower extremity sciatica is due to or the result of a service-connected thoracolumbar spine disability, and secondary service connection for lower extremity sciatica is warranted. Gilbert v. Derwinski, 1 Vet. App. 49 (1990); 38 U.S.C.A. § 5107 (West 2014); 38 C.F.R. § 3.102 (2015).
ORDER
Entitlement to service connection for sciatica of the lower extremities is granted.
REMAND
Certain range of motion testing should be conducted whenever possible in cases of joint disabilities. Specifically, range of motion studies should be performed that test active and passive range of motion and in weight-bearing and nonweight-bearing, with comparison to an normal contralateral joint if possible. 38 C.F.R. § 4.59 (2015); Correia v. McDonald,28 Vet. App. 158 (2016).
After reviewing the VA examinations of record for the Veteran's service-connected back and knee disabilities, the Board finds that they are incomplete and require additional range of motion testing. Therefore, the increased rating claims must be remanded for VA examinations.
Through statements of record and at his March 2016 Board hearing, the Veteran believes that he has a bilateral shoulder disability that is the result of active service. His representative also indicated at the March 2016 Board hearing the Veteran was treated in-service for a bilateral shoulder condition and a review of the Veteran's military personnel review (MPR) confirms that his medical discharge was due in part to a bilateral shoulder condition. However, there is insufficient medical evidence of record showing a current disability. Accordingly, the Board finds that a VA examination is necessary to determine the nature and etiology of the claimed disability.
Additionally, since the TDIU claim is inextricably intertwined with the claims for increased ratings, it is also being remanded. The appropriate remedy where a pending claim is inextricably intertwined with a claim currently on appeal is to remand the claim on appeal pending the adjudication of the inextricably intertwined claim. Harris v. Derwinski, 1 Vet. App. 180 (1991).
Accordingly, the case is REMANDED for the following action:
1. Make arrangement to obtain the Veteran's VA medical treatment records from March 2015 to the present.
2. Thereafter, schedule the Veteran for a VA examination to assess the current level of severity of a service-connected thoracolumbar spine disability. The examiner must review the claims file and should note that review in the report. The examiner should provide a comprehensive report including a complete rationale for all opinions and conclusions reached. All indicated tests should be completed and all relevant clinical findings reported. The examiner should identify and describe the severity of all residuals and functional impairment of the back disability. Range of motion testing of the thoracolumbar spine should be conducted for active motion, passive motion, weight-bearing, and nonweight-bearing, if possible. If any aspect of the required testing is not possible, the examiner should clearly state the reason. The examiner should state whether there is any additional loss of function due to painful motion, weakened motion, excess motion, fatigability, incoordination, or on flare-up. The examiner should opine whether it is at least as likely as not (50 percent or greater probability) that the Veteran is unable to secure or follow a substantially gainful occupation due to the service-connected disabilities. If the Veteran is felt capable of working despite the service-connected disabilities, the examiner should state what type of work and what accommodations would be needed due to the service-connected disabilities.
3. Then, schedule the Veteran for a VA examination to assess the current level of severity of service-connected left knee instability. The examiner must review the claims file and should note that review in the report. The examiner should provide a comprehensive report including a complete rationale for all opinions and conclusions reached. All indicated tests should be completed and all relevant clinical findings reported. The examiner should identify and describe the severity of all residuals and functional impairment of the right knee instability. Range of motion testing of the service-connected left knee should be conducted for active motion, passive motion, weight-bearing, and nonweight-bearing, if possible. If any aspect of the required testing is not possible, the examiner should clearly state the reason. The examiner should state whether there is any additional loss of function due to painful motion, weakened motion, excess motion, fatigability, incoordination, or on flare-up.
4. Also, schedule the Veteran for the appropriate VA examination to determine the nature and etiology of any bilateral shoulder disability. The examiner must review the claims file and should note that review in the report. Based on a review of the records contained in the claims file and the results of the examination, the examiner should opine whether it is at least as likely as not (50 percent or greater probability) that any shoulder disability originated during active service from October 2005 to September 2009 or is otherwise related or attributable to service or any event or service. The examiner should discuss the medical rationale for all opinions expressed, whether favorable or unfavorable, if necessary citing to specific evidence in the file supporting conclusions.
5. Then, readjudicate the claims. If any decision is adverse to the Veteran, issue a supplemental statement of the case and allow the applicable time for response. Then, return the case to the Board.
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 or the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. 38 U.S.C.A. §§ 5109B, 7112 (West 2014).
______________________________________________
Harvey P. Roberts
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
Exhibit 10.1
EIGHTH AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND LIMITED CONSENT
This Eighth Amendment to Second Amended and Restated Credit Agreement and
Limited Consent (this “Amendment”) is dated as of September 17, 2013, and is by
and among Clayton Williams Energy, Inc., a Delaware corporation (the
“Borrower”), certain Subsidiaries of the Borrower as Guarantors, the Lenders
party hereto (the “Lenders”) and JPMorgan Chase Bank, N.A., as Administrative
Agent (in such capacity, the “Administrative Agent”). Unless the context
otherwise requires or unless otherwise expressly defined herein, capitalized
terms used but not defined in this Amendment have the meanings assigned to such
terms in the Credit Agreement (as defined below).
WITNESSETH:
WHEREAS, the Borrower, the Guarantors, the Administrative Agent and the Lenders
entered into that certain Second Amended and Restated Credit Agreement dated as
of November 29, 2010 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”);
WHEREAS, the Borrower has requested that the Lenders amend Section 7.13(b) to
increase the maximum permitted Consolidated Leverage Ratio to 4.50 to 1.00 for a
specified period, and the Administrative Agent and the Lenders (or at least the
Majority Lenders) have agreed to do so on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed, the Borrower, the
Guarantors, the Administrative Agent and the Lenders hereby agree as follows:
SECTION 1. Amendments to the Credit Agreement. Subject to the
satisfaction or waiver in writing of each condition precedent set forth in
Section 2 hereof, and in reliance on the representations, warranties, covenants
and agreements contained in this Amendment, the Credit Agreement shall be
amended in the manner provided in this Section 1.
1.1 Amended Definition. The following definition shall be and it
hereby is added to Section 1.01 of the Credit Agreement in alphabetical order:
“Qualified Senior Notes Offering” means the issuance of Senior Notes by the
Borrower permitted in accordance with the terms of this Agreement resulting in
the receipt by Borrower of not less than $150,000,000 in gross proceeds on or
before December 31, 2013, and calculated without including any such proceeds
applied as a Permitted Refinancing of existing Senior Notes.
1.2 Amendment to Section 7.13(b). Section 7.13(b) of the Credit
Agreement shall be and it hereby is amended and restated in its entirety to read
as follows:
1
--------------------------------------------------------------------------------
(b) Leverage Ratio. The Borrower will not permit the Consolidated
Leverage Ratio as of the last day of any fiscal quarter ending on or after the
Effective Date to be greater than 4.00 to 1.00; provided that, with respect to
the period from the date the Borrower consummates a Qualified Senior Notes
Offering to and including the fiscal quarter ending on or about December 31,
2014, the Borrower will not permit the Consolidated Leverage Ratio as of the
last day of any fiscal quarter during such period to be greater than 4.50 to
1.00.
SECTION 2. Conditions. The amendments to the Credit Agreement set forth
in Section 1 of this Amendment shall be effective on the date that all of the
conditions set forth in this Section 2 have been satisfied (such date the
“Eighth Amendment Effective Date”).
2.1 Execution and Delivery. The Borrower, each Guarantor and the
Lenders (or at least the Majority Lenders) shall have executed and delivered
this Amendment, all in form and substance satisfactory to the Administrative
Agent.
2.2 No Default. No Default shall have occurred and be continuing.
SECTION 3. Representations and Warranties of the Borrower. To induce the
Lenders to enter into this Amendment, each Credit Party hereby represents and
warrants to the Lenders as follows:
3.1 Reaffirmation of Representations and Warranties. After giving
effect to the amendments herein, each representation and warranty of the
Borrower or any Guarantor contained in the Credit Agreement or in any of the
other Loan Documents is true and correct in all material respects on the date
hereof (except to the extent any such representations and warranties are
expressly limited to an earlier date, in which case, such representations and
warranties shall continue to be true and correct in all material respects as of
such specified earlier date).
3.2 Corporate Authority; No Conflicts. The execution, delivery and
performance by the Borrower and each Guarantor (to the extent a party hereto or
thereto) of this Amendment and all documents, instruments and agreements
contemplated herein are within the Borrower’s or such Guarantor’s corporate or
other organizational powers, have been duly authorized by necessary action,
require no action by or in respect of, or filing with, any court or agency of
government and do not violate or constitute a default under any provision of any
applicable law or other agreements binding upon the Borrower or any Guarantor or
result in the creation or imposition of any Lien upon any of the assets of the
Borrower or any Guarantor except as otherwise permitted in the Credit Agreement.
3.3 Enforceability. This Amendment constitutes the valid and binding
obligation of the Borrower and each Guarantor enforceable in accordance with its
terms, except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditor’s rights generally, and (ii) the
availability of equitable remedies may be limited by equitable principles of
general application.
2
--------------------------------------------------------------------------------
SECTION 4. Miscellaneous.
4.1 Reaffirmation of Loan Documents and Liens. Any and all of the
terms and provisions of the Credit Agreement and the other Loan Documents shall,
except as amended and modified hereby, remain in full force and effect. Each
Credit Party hereby agrees that the amendments and modifications herein
contained shall not impair its liabilities, duties and obligations under the
Credit Agreement and the other Loan Documents to which it is a party or the
Liens granted by it securing the payment and performance thereof. The
execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of any Lender, the Issuing Bank or the
Administrative Agent under any of the Loan Documents, nor, except as expressly
provided herein, constitute a waiver or amendment of any provision of any of the
Loan Documents. Upon and after the execution of this Amendment by each of the
parties hereto, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof” or words of like import referring to the Credit Agreement,
and each reference in the other Loan Documents to “the Credit Agreement”,
“thereunder”, “thereof” or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement as modified
hereby. This Amendment is a Loan Document, and all provisions in the Credit
Agreement pertaining to Loan Documents apply hereto.
4.2 Parties in Interest. All of the terms and provisions of this
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.
4.3 Legal Expenses. The Borrower hereby agrees to pay all reasonable
fees and expenses of special counsel to the Administrative Agent incurred by the
Administrative Agent in connection with the preparation, negotiation and
execution of this Amendment and all related documents.
4.4 Counterparts. This Amendment may be executed in one or more
counterparts and by different parties hereto in separate counterparts each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. However, this Amendment shall bind no party until the
Borrower, the Guarantors, the Lenders (or at least the requisite percentage
thereof), and the Administrative Agent have executed a counterpart. Delivery of
photocopies of the signature pages to this Amendment by facsimile or electronic
mail shall be effective as delivery of manually executed counterparts of this
Amendment.
4.5 Complete Agreement. THIS AMENDMENT, THE CREDIT AGREEMENT, AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
4.6 Headings. The headings, captions and arrangements used in this
Amendment are, unless specified otherwise, for convenience only and shall not be
deemed to limit, amplify or modify the terms of this Amendment, nor affect the
meaning thereof.
3
--------------------------------------------------------------------------------
4.7 Governing Law. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.
[Remainder of Page Intentionally Blank. Signature Pages Follow.]
4
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
as of the date first above written.
BORROWER:
CLAYTON WILLIAMS ENERGY, INC.
a Delaware corporation
By:
/s/ Michael L. Pollard
Michael L. Pollard, Senior Vice President
GUARANTORS:
SOUTHWEST ROYALTIES, INC.
WARRIOR GAS CO.
CWEI ACQUISITIONS, INC.
ROMERE PASS ACQUISITION L.L.C.
CWEI ROMERE PASS ACQUISITION CORP.
BLUE HEEL COMPANY
TEX-HAL PARTNERS, INC.
DESTA DRILLING GP, LLC
WEST COAST ENERGY PROPERTIES GP, LLC
CLAJON INDUSTRIAL GAS, INC.
CLAYTON WILLIAMS PIPELINE CORPORATION
By:
/s/ Michael L. Pollard
Michael L. Pollard, Senior Vice President
DESTA DRILLING, L.P.
a Texas limited partnership
By:
Desta Drilling GP, LLC, its general partner
By:
/s/ Michael L. Pollard
Michael L. Pollard, Senior Vice President
--------------------------------------------------------------------------------
SWR VPP, LLC
a Texas limited liability company
By:
Southwest Royalties, Inc., its sole member
By:
/s/ Michael L. Pollard
Michael L. Pollard, Senior Vice President
--------------------------------------------------------------------------------
JPMORGAN CHASE BANK, N.A., as
Administrative Agent, Issuing Bank and a Lender
By:
/s/ Mark E. Olson
Name:
Mark E. Olson
Title:
Authorized Officer
--------------------------------------------------------------------------------
UNION BANK, N.A.,
as Co-Documentation Agent and a Lender
By:
/s/ Rachel Bowman
Name:
Rachel Bowman
Title:
Vice President
--------------------------------------------------------------------------------
WELLS FARGO BANK, N.A.
as Co-Documentation Agent and a Lender
By:
/s/ Juan Carlos Sandoval
Name:
Juan Carlos Sandoval
Title:
Director
--------------------------------------------------------------------------------
NATIXIS (formerly Natexis Banques Populaires),
as a Lender
By:
/s/ Stuart Murray
Name:
Stuart Murray
Title:
Managing Director
By:
/s/ Mary Lou Allen
Name:
Mary Lou Allen
Title:
Director
--------------------------------------------------------------------------------
COMPASS BANK,
as a Lender
By:
/s/ James Neblett
Name:
James Neblett
Title:
Vice President
--------------------------------------------------------------------------------
FROST BANK,
as a Lender
By:
/s/ Alex Zemkoski
Name:
Alex Zemkoski
Title:
Senior Vice President
--------------------------------------------------------------------------------
KEYBANK NATIONAL ASSOCIATION,
as a Lender
By:
/s/ Joseph Scott
Name:
Joseph Scott
Title:
Senior Vice President
--------------------------------------------------------------------------------
UBS LOAN FINANCE LLC,
as a Lender
By:
/s/ Lana Gifas
Name:
Lana Gifas
Title:
Director
By:
/s/ Kenneth Chin
Name:
Kenneth Chin
Title:
Director
--------------------------------------------------------------------------------
THE ROYAL BANK OF SCOTLAND plc,
as a Lender
By:
/s/ Sanjay Remond
Name:
Sanjay Remond
Title:
Authorised Signatory
--------------------------------------------------------------------------------
FIFTH THIRD BANK,
as a Lender
By:
/s/ Richard Butler
Name:
Richard Butler
Title:
Senior Vice President
--------------------------------------------------------------------------------
U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By:
/s/ Tara McLean
Name:
Tara McLean
Title:
Vice President
--------------------------------------------------------------------------------
WHITNEY BANK,
as a Lender
By:
/s/ Donovan C. Broussard
Name:
Donovan C. Broussard
Title:
Senior Vice President
-------------------------------------------------------------------------------- |
Filed 10/2/14 P. v. Lewis CA2/2
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 TWO
THE PEOPLE, B248822
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. NA090862)
v.
WILLIE THEOPHUS LEWIS,
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of Los Angeles County. Mark C.
Kim, Judge. Affirmed in part, reversed in part, and remanded for resentencing.
Benjamin Owens, under appointment by the Court of Appeal, for Defendant and
Appellant Willie Theophus Lewis.
Kamala D. Harris, Attorney General, Dane R. Gillette, Chief Assistant Attorney
General, Lance E. Winters, Assistant Attorney General, Zee Rodriguez and Roberta L.
Davis, Deputy Attorneys General, for Plaintiff and Respondent.
******
Following a jury trial, appellant Willie Theophus Lewis, was convicted of making
criminal threats (Pen. Code, § 422, count 1),1 false imprisonment by violence (§ 236,
count 2), domestic violence causing traumatic injury (§ 273.5, subd. (a), count 3),
misdemeanor battery (§ 243, subd. (e)(1), count 4), and dissuading a witness from
reporting a crime (§ 136.1, subd. (b)(1), count 5). The trial court sentenced appellant to a
total of four years and eight months in state prison. The court selected count 3 as the
base term and imposed the middle term of three years on that count, one year consecutive
on count 2, and eight months consecutive on count 5. The court imposed a six-month
sentence on count 4 to run concurrently with the principal count, and stayed the sentence
on count 1 pursuant to section 654.
Appellant contends the trial court committed instructional error in failing to give
CALJIC No. 2.80 sua sponte on the evaluation of expert testimony and failed to exercise
its discretion to impose concurrent rather than consecutive sentences. Appellant also
seeks review of the trial court’s in camera hearing pursuant to Pitchess v. Superior Court
(1974) 11 Cal. 3d 531 (Pitchess). We affirm the judgment of conviction. But we reverse
as to sentence and remand for resentencing.
FACTS
Prosecution Case
Appellant and Taeaone F. were married but separated in April 2011. At
approximately 5:00 p.m. on December 13, 2011, appellant took divorce papers to
Taeaone’s parents’ house in Long Beach where Taeaone was living. Appellant left
before Taeaone signed them and said he would return later. Appellant returned at
approximately 8:00 p.m. and sent Taeaone a text message asking her to come outside.
Taeaone got inside appellant’s car and they talked about the divorce papers. Taeaone
assumed they would drive around the block while talking but appellant drove onto the
freeway. He exited the freeway and parked near the aquarium. Appellant got angry
1 All further statutory references are to the Penal Code unless otherwise indicated.
2
when they started talking again and Taeaone asked him to take her home. Appellant
refused. When Taeaone tried to get out of the car, appellant told her he had a gun and he
would shoot her and anyone who tried to help her.
Appellant started driving again, and Taeaone tried to get out when they
approached a red light but was unsuccessful. Appellant said he was going to shoot
Taeaone and himself. He said he had a blanket and pillow in the car that would muffle
the gunfire. Appellant’s mother and sister called him to try “to convince him not to do
anything stupid.” Appellant held a gun to Taeaone’s head. Taeaone was scared and
pleaded with appellant to let her go. Appellant wanted to know the address of a man
Taeaone dated while she and appellant were separated. Appellant said “he was going to
try to find this guy and that he was going to kill him and leave him on the doorstep so his
family could see him.”
Appellant drove to the apartment building where the man Taeaone dated used to
live. He told Taeaone to get out of the car and show him where the man lived. When
Taeaone insisted the man did not live there, appellant hit her in the face with his left
hand. He was holding his phone in his hand when he struck her and her nose began to
bleed and got puffy. Appellant pulled Taeaone from the car and walked towards the
apartment complex dragging her by the arm and threatening to shoot her. Taeaone
tripped and fell, scraping her hands and elbow. Appellant continued walking towards the
apartments. Taeaone seized the opportunity to escape and walked back towards the street
and contacted a motorist for help.
Abhisek Kumar was sitting in his car outside the apartment building. Taeaone got
into the passenger seat of Kumar’s car. She was very scared and asked Kumar to drive
her to the nearest police station. Taeaone used Kumar’s cell phone to call her sister
Tamar F. and asked her to meet her and pick her up. From the police station, Tamar
called Taeaone’s brother Olataga F. and told him what happened. At the police station
Taeaone told the officer that she was “trying to get away from [appellant] because he had
3
a gun and he was trying to kill [her].” An emergency protective order was issued which
prohibited appellant from having any contact with Taeaone for seven days.
Olataga was at the family home where Taeaone had earlier left her cell phone. He
looked at it and saw that appellant had been sending threatening text messages telling
Taeaone to come outside or he would come inside. Olataga went outside and saw
appellant standing by the neighbor’s wall approximately 20 to 25 feet from where
Olataga was standing. Olataga went back inside, locked the door, and called 9-1-1. At
approximately 1:15 a.m. Long Beach Police Officer Cory Lapworth found appellant
across the street from Taeaone’s parents’ house. Appellant was arrested and transported
to the police station.
The following day appellant placed several calls to Taeaone, which were recorded
pursuant to an announced, blanket policy of recording all outgoing telephone calls by jail
inmates. The prosecutor obtained recordings of the calls and the trial court denied a
motion to suppress. Appellant tried to get Taeaone to say she made up the allegations
because she was mad. During one telephone call, appellant told Taeaone that if she did
not appear for trial, or if she “dropped the case” the prosecutor would drop the charges.
During another call Taeaone said she did not want appellant to stay in jail but she also did
not want something bad to happen to her if he was released. Appellant promised he
would not do anything to her and that she did not have to forgive him. He wanted her to
“help [him] get outta here and deal with it.” Taeaone obtained a restraining order on
December 16, 2011, and appellant violated it by repeatedly calling her and trying to
convince her to recant her statements. In another recorded telephone call from jail,
appellant told Taeaone to get a notarized letter in which she stated she fabricated the
allegations against him because she was suffering from post-partum depression.
Detective Michael Hubbard, a 14-year veteran of the Long Beach Police
Department, and an experienced domestic violence investigator, interviewed Taeaone a
few days after the incidents. She was reluctant to speak about what happened but did tell
Detective Hubbard that what she told the officers the night of the incident was accurate.
4
She told him she was afraid to testify against appellant in court and she did not believe a
restraining order would prevent appellant from killing her if he got out of jail. At the
preliminary hearing Taeaone testified that she did not remember a lot of details of the
incidents on the night of December 13, 2011. At trial, she testified that at the time of the
preliminary hearing she still loved appellant and hoped things could work out.
In April 2012, appellant falsely accused Taeaone of welfare and tax fraud. On
April 25, 2012, appellant left Taeaone a voicemail message saying he was not trying to
hurt her but had to “discredit” her. He said she would not get in trouble and the “worst
case scenario” was that she would have to pay a fine and he would pay her back when he
got out of jail. That was the “last straw” for Taeaone, and the next time appellant called
her, she told him she did not want to speak to him again.
Prior to the incidents on the night of December 13, 2011, there had been a
previous incident of domestic violence involving appellant and Taeaone. In December
2010, appellant woke Taeaone, dragged her into the bathroom and after using water to
wake her up, dragged her out into the street. Appellant took off his belt and used it to
strike Taeaone on the legs. She suffered injuries. She did not report the incident to the
police but did tell family members.
Detective Hubbard testified that in his experience it was common for victims of
domestic violence to continue to speak with their abusers after their arrest because they
still had feelings for them. Many times the victims were afraid of the suspect and felt
they had to maintain communication. Victims generally reported incidents at the time
they occurred but it was common for them to be reluctant to speak to detectives in
follow-up interviews Often, victims were afraid of what might happen to them if they
continued to pursue the case against their abusers and many of them recanted their
statements and reconciled with their abusers.
Defense Case
Appellant testified on his own behalf. He said he went to Taeaone’s parents’
house to have her sign divorce papers. Taeaone had to go to school and asked appellant
5
to come back later to discuss the divorce. When he returned, Taeaone got in his car and
he drove away. Appellant parked at the beach and he and Taeaone smoked cigarettes and
listened to the car radio. They argued and appellant suspected Taeaone was cheating on
him and asked her how long it had been going on. When Taeaone refused to answer
appellant, he told her to get out of the car. He told her he wanted sole custody of their
child if they divorced. Appellant testified Taeaone wanted them to reconcile.
Taeaone told appellant she had cheated on him with someone named Kareem.
Appellant wanted to know where Kareem lived so he could beat him up. They drove to
an apartment complex where Taeaone believed Kareem lived. They argued in front of
the apartment complex but appellant testified that he did not hit, drag, or pull Taeaone.
Appellant testified that he reported his gun stolen years earlier and he did not have a gun
with him that night. He went to look for Kareem, and when he returned, Taeaone was
gone. Appellant searched for Taeaone and when he could not find her, he drove to her
parents’ house. Appellant denied hitting or threatening to kill Taeaone. He said he
intended to end their marriage and did not threaten to commit suicide. Appellant
explained that he was trying to get Taeaone to tell the truth during the recorded jail
telephone calls because she had fabricated the charges against him. He never told her to
lie or to not appear in court.
Appellant’s mother, Ether Peterson, testified that on December 13, 2011, Taeaone
called her and asked her to come and get “all three of us” because they needed to stay
with her for a while. Appellant got on the phone and told her not to come. She did not
hear him threaten to commit murder or suicide. Peterson acknowledged that before she
spoke with the police, appellant called her from jail and told her what he had told the
police about their telephone call earlier that night.
Long Beach Police Officer James Mondragon arrived at Taeaone’s parents’ house
as appellant was being arrested. He saw a car drive by that matched the description of the
car involved in the offenses against Taeaone. He stopped the car which was driven by an
6
individual named Roy Lewis. No gun, blanket, or pillow were found in a search of the
car.
Prosecution Rebuttal Case
Detective Hubbard testified that when he first contacted Peterson on December 15,
2011, she indicated she was not aware of what happened between appellant and Taeaone
and did not want to be involved in the case.
DISCUSSION
I. The Jury Was Properly Instructed on How to Evaluate Expert Testimony
Appellant contends the trial court erred in failing to instruct the jury sua sponte
with CALJIC No. 2.802 after allowing Detective Hubbard to testify as to certain
behaviors of domestic violence victims.
CALJIC No. 2.80 instructs the jury as to how to evaluate expert testimony and
informs the jury that it is not bound by expert testimony, but may give such testimony
whatever weight the jury feels it deserves. The instruction must be given sua sponte
when expert opinion testimony has been introduced. (§ 1127b; see also People v. Bowens
(1964) 229 Cal. App. 2d 590, 600, overruled on another ground in People v. Mayberry
(1975) 15 Cal. 3d 143, 158.)
The prosecutor qualified Detective Hubbard as an expert on domestic violence and
elicited his testimony that it was common for abuse victims to continue to communicate
2 CALJIC No. 2.80 states: “[A witness] [Witnesses] who [has] [have] special
knowledge, skill, experience, training or education in a particular subject [has] [have]
testified to certain opinions. This type of witness is referred to as an expert witness. In
determining what weight to give to any opinion expressed by an expert witness, you
should consider the qualifications and believability of the witness, the facts or materials
upon which each opinion is based, and the reasons for each opinion. [¶] An opinion is
only as good as the facts and reasons on which it is based. If you find that any fact has
not been proved, or has been disproved, you must consider that in determining the value
of the opinion. Likewise, you must consider the strengths and weaknesses of the reasons
on which it is based. [¶] You are not bound by an opinion. Give each opinion the
weight you find it deserves. You may disregard any opinion if you find it to be
unreasonable.”
7
with their abusers, it was common for abuse victims to be reluctant to give details to
detectives in follow-up interviews, and it was common for abuse victims to recant their
allegations of abuse.
Despite having permitted Detective Hubbard to testify as an expert, the trial court
failed to instruct the jury with CALJIC No. 2.80. “[F]ailure to instruct on the weight of
expert testimony is not prejudicial unless the reviewing court, upon an examination of the
entire cause, determines that the jury might have rendered a different verdict had the
omitted instruction been given.” (People v. Reeder (1976) 65 Cal. App. 3d 235, 241
(Reeder).) Taking the instructions given as a whole, the jury was adequately informed on
how to evaluate expert testimony and the failure to give CALJIC No. 2.80 was harmless.
A claim of instructional error is reviewed de novo. (People v. Cole (2004) 33
Cal. 4th 1158, 1210.) The proper test for judging the adequacy of instructions is to decide
whether the trial court “fully and fairly instructed on the applicable law . . . .” (People v.
Partlow (1978) 84 Cal. App. 3d 540, 558.) ‘“In determining whether error has been
committed in giving or not giving jury instructions, we must consider the instructions as a
whole . . . [and] assume that the jurors are intelligent persons and capable of
understanding and correlating all jury instructions which are given. [’] [Citation.]”
(People v. Yoder (1979) 100 Cal. App. 3d 333, 338.) “Instructions should be interpreted,
if possible, so as to support the judgment rather than defeat it if they are reasonably
susceptible to such interpretation.” (People v. Laskiewicz (1986) 176 Cal. App. 3d 1254,
1258.)
Although the trial court did not instruct with CALJIC No. 2.80, it did give the jury
CALJIC No. 2.20, which cautioned jurors to act as the sole judge of a witness’s
believability and the weight to be given each witness’s testimony, including the
“existence or nonexistence of any fact testified to by the witness.” The court also
instructed the jury with CALJIC Nos. 2.21.2 (witness willfully false) and 2.27
(sufficiency of testimony of one witness). Thus, the jury was well aware of its duty to
assess the credibility and probative value of every aspect of Detective Hubbard’s
8
testimony. Absent an indication to the contrary, we presume the jury followed the court’s
instructions. (People v. Gray (2005) 37 Cal. 4th 168, 217.)
Contrary to appellant’s contention, this case is not like Reeder, supra, 65
Cal. App. 3d 235, where the appellate court concluded the trial court’s failure to instruct
sua sponte on the evaluation of expert witness testimony constituted prejudicial error. In
Reeder, the victim and defendant gave conflicting accounts at trial with regard to charges
of forcible rape and sex perversion. (Id. at p. 238.) The parties stipulated to the
administration of polygraph examinations of the defendant and the victim. At trial, the
two polygraph experts testified for the People, one opining that the defendant had been
untruthful in his account of the incident during his polygraph examination and one
opining that the victim had been truthful in responding to questions during her polygraph
examination. (Id. at p. 239.) In concluding the failure to instruct on the evaluation of
expert witness testimony constituted prejudicial error, the appellate court noted that both
witnesses specifically had testified as experts for the People and, through their testimony,
which was not subject to cross-examination or rebuttal, “tended to enshroud the practice
of polygraphy in an aura of infallibility,” when “polygraph evidence is considered by the
great weight of authority to be so unreliable as to be inadmissible without a stipulation.”
(Id. at p. 242; see id. at p. 244.) Here, in contrast, there was strong evidence
corroborating Taeaone’s version of events and it was not simply her word against
appellant’s word. Furthermore, Detective Hubbard did not testify to a matter that is
considered universally unreliable.
Appellant’s reliance on United States v. Freeman (9th Cir. 2007) 498 F.3d 893
(Freeman) is also unavailing. There, a drug enforcement agent testified as both a lay
witness and as an expert on the meaning of certain jargon known only to those with
specialized knowledge of the drug trade. But the appellate court found the agent
erroneously testified as an expert when he interpreted ambiguous statements not
involving drug jargon, based only on his general knowledge of the investigation. (Id. at
p. 902.) The court noted the difficulties that may arise when a witness testifies to lay
9
observations and as an expert: the witness’s aura of expertise may move the jury to grant
the expert witness unmerited credibility when testifying about factual matters; a failed
effort to impeach the witness as an expert may enhance the witness’s credibility in
testifying as a lay witness; an increased risk the expert will stray from reliable
methodology and engage in sweeping conclusions, and the risk of juror confusion in
discerning whether the expert is basing an opinion on reliable methodology or on
personal knowledge of the case. (Id. at p. 903.)
This case does not involve the erroneous admission of evidence. Appellant did not
object in the trial court, and does not argue here, that Detective Hubbard was unqualified
to offer his opinions, or that his testimony on domestic violence in general, or about
Taeaone and appellant in particular, was objectionable. Nor does he assert the officer
provided inadmissible lay or factual testimony. Accordingly, unlike the situations in
Reeder and Freeman, the instructions given in this case on evaluating witnesses generally
were sufficient for the jury to evaluate Detective Hubbard’s testimony.
CALJIC No. 2.80 would have added nothing of significance to the jury’s
evaluation of the case. There is no likelihood that the jury would have rendered a verdict
more favorable to appellant had CALJIC No. 2.80 been given, and any error was
unquestionably harmless. (People v. Watson (1956) 46 Cal. 2d 818, 836.)
II. The Trial Court Properly Exercised Its Discretion to Impose Consecutive
Sentences
Appellant contends remand for resentencing is warranted because the trial court
misunderstood its sentencing discretion.3 He contends the court believed it had to impose
consecutive sentences pursuant to section 667, subdivision (c). Alternatively, appellant
contends that his trial counsel was michael62@example.net.
3 We remand for resentencing because of unauthorized sentences imposed for
counts 2 and 5 (see part III, post.), but not because the trial court misunderstood its
sentencing discretion.
10
A. Proceedings Below–Sentencing Hearing
Defense counsel argued for probation or alternatively for the low term on one
count and concurrent terms on all other counts. The prosecution’s sentencing
memorandum recommended that appellant be sentenced to a term of six years, four
months in state prison and an additional six months in county jail. The prosecutor agreed
that count 1 was subject to section 654 but argued that under section 667, subdivision
(c)(6),4 consecutive terms were mandatory (for counts 2, 3, and 5) because appellant had
been convicted of two serious felonies (counts 1 and 5) that were not committed on the
same occasion and did not arise from the same set of facts. The prosecutor pointed out
that this argument was not included in the prosecutor’s sentencing memorandum.
Defense counsel agreed that count 5 should be consecutive but argued that “all the rest
should be run concurrent on 654.” The court disagreed with defense counsel’s argument
and stated that only counts 1 and 2 arose from the same act. The court proceeded to
impose consecutive sentences on counts 2, 3, and 5.
B. Relevant Legal Principles
California Rules of Court, rule 4.425(a)(1) and (3) provide, respectively, that in
imposing a consecutive or concurrent sentence, the trial court considers whether “[t]he
crimes and their objectives were predominantly independent of each other” and
“committed at different times or separate places, rather than being committed so closely
in time and place as to indicate a single period of aberrant behavior.”
Trial courts have broad sentencing discretion in choosing between concurrent and
consecutive sentences. (People v. Bradford (1976) 17 Cal. 3d 8, 20.) We review the trial
4 Section 667, subdivision (c)(6) provides, “Notwithstanding any other law, if a
defendant has been convicted of a felony and it has been pled and proved that the
defendant has one or more prior serious and/or violent felony convictions as defined in
subdivision (d), the court shall adhere to each of the following: . . . [¶] (6) If there is a
current conviction for more than one felony count not committed on the same occasion,
and not arising from the same set of operative facts, the court shall sentence the defendant
consecutively on each count pursuant to subdivision (e).”
11
court’s decision for abuse of discretion. (People v. Birmingham (1990) 217 Cal. App. 3d
180, 185–186.)
C. Analysis
The court in People v. Scott (1994) 9 Cal. 4th 331, 353–356, held that challenges to
a sentencing choice must first be raised in the trial court or the issue will be deemed
waived on appeal. Appellant did not raise this issue in the trial court, and the issue has
been waived. However, because appellant asserts his counsel was ineffective for failing
to object, we address the merits of his claim.
Appellant does not argue that the court’s sentencing choice was an abuse of
discretion or that there could be no factual support for a finding that his crimes were
committed on separate occasions. Appellant suggests that the trial court was misled by
the prosecutor’s argument and therefore mistakenly believed that consecutive sentencing
was mandated under section 667, subdivision (c)(6).
Section 667, subdivision (c)(6) applies only where a defendant is convicted of
multiple felonies and it has been pled and proven that he had one or more prior serious
and/or violent felony convictions. (People v. Casper (2004) 33 Cal. 4th 38, 42.) No prior
serious or violent felony convictions were pled or proven and accordingly the mandatory
consecutive sentencing addressed in section 667, subdivision (c)(6) did not apply to
appellant. We presume the trial court was aware of and followed the applicable law in
imposing sentence. (People v. Mosley (1997) 53 Cal. App. 4th 489, 496.) In order to
overcome this presumption, appellant must affirmatively demonstrate error. (People v.
Sanghera (2006) 139 Cal. App. 4th 1567, 1573.) Appellant has not met this burden.
To the contrary, a number of facts demonstrate the court was aware of its
discretion. The trial court’s comment that the prosecutor was “recommending that
defendant get six years, four months” prior to the prosecutor’s argument, indicates that
the court had read the prosecution’s sentencing memorandum which contained no
reference to section 667, subdivision (c)(6). The court never commented on or indicated
in any way it agreed with the prosecutor’s argument that section 667, subdivision (c)(6)
12
was applicable here. The court entertained defense counsel’s argument for concurrent
sentencing immediately after the prosecutor’s reference to section 667, subdivision (c)(6),
without stating that it lacked the authority to impose concurrent terms. Furthermore, we
can presume the court considered the relevant criteria in the California Rules of Court in
deciding whether to impose consecutive or concurrent sentences (Cal. Rules of Court,
rule 4.425), because the court disagreed with defense counsel’s analysis and referenced
that the crimes involved separate acts.
There is no reason to suspect the trial court was unaware of its authority or its
discretion to determine whether sentences were to run concurrently or consecutively. We
reiterate, in the absence of a clear showing of abuse, we may not disturb the court’s
exercise of its discretion. Considering all the circumstances, the court’s sentencing
decision did not exceed the bounds of reason. (People v. Bradford, supra, 17 Cal.3d at
p. 20.)
In sum, appellant’s claim of error that the trial court misunderstood its sentencing
discretion fails. We therefore need not address whether appellant forfeited the point by
failing to raise it in the trial court or the further assertion defense counsel rendered
ineffective assistance in failing to raise the issue below.
III. Sentencing Error
A. Count 2–False Imprisonment by Violence
Appellant contends, the People agree, and we concur that the trial court
erroneously imposed a one-year term on count 2, when the correct term was eight
months.
The prosecutor’s sentencing memorandum stated that the range of sentences for
count 2 was two years, three years, or four years. The prosecutor confirmed this range
when the trial court inquired at the sentencing hearing. The trial court imposed a one-
year term on count 2, believing one year to be one-third the middle term. However, false
imprisonment by violence is punishable by 16 months, two years, or three years.
(§§ 237, 1170, subd. (h)(1).) Therefore, the middle term is actually two years and one-
13
third of the middle term is eight months.
The imposition of a term not specified by the Penal Code is an unauthorized
sentence that may be corrected at any time. (People v. Massengale (1970) 10 Cal. App. 3d
689, 693.)
B. Count 5–Dissuasion of a Witness
The People argue that the trial court was required to impose the full middle term,
not one-third of the middle term, for the consecutive sentence imposed on count 5 for
appellant’s conviction of dissuasion of a witness in violation of section 136.1, subdivision
(b)(1). The People are correct.
Section 1170.15 provides: “Notwithstanding subdivision (a) of Section 1170.1
which provides for the imposition of a subordinate term for a consecutive offense of one-
third of the middle term of imprisonment, if a person is convicted of a felony, and of an
additional felony that is a violation of Section 136.1 or 137 and that was committed
against the victim of, or a witness or potential witness with respect to, or a person who
was about to give material information pertaining to, the first felony . . . the subordinate
term for each consecutive offense that is a felony described in this section shall consist of
the full middle term of imprisonment for the felony for which a consecutive term of
imprisonment is imposed, . . . .”
Section 1170.15 applies “when a defendant is convicted of a felony (the ‘first
felony’) and also convicted of dissuading or attempting to dissuade the victim of, or a
witness to, the first felony from reporting or giving testimony regarding the first felony.”
(People v. Evans (2001) 92 Cal. App. 4th 664, 669.) “Section 1170.15 does not create an
enhancement, but an alternative sentencing scheme.” (People v. Hennessey (1995) 37
Cal. App. 4th 1830, 1835.) Accordingly, “section 1170.15 need not be specifically
pleaded and proven.” (Ibid.)
The application of section 1170.15 does not require any additional jury fact
finding. It applies whenever a jury finds a defendant guilty of a felony and of dissuading
a victim of, or witness to, that felony. The trial court here found that appellant’s
14
conviction for dissuading a witness was related to the other offenses including the
domestic violence offense. There is substantial evidence here for the conclusion that the
dissuading a victim offense related to the other charges in this case. Taeaone testified
that she received numerous telephone calls from appellant while he was in jail awaiting
trial. Recordings of the jailhouse calls were played for the jury. The record shows that
appellant’s threats of dissuading Taeaone from testifying related to the specific offenses
charged in the present case. Section 1170.15 is applicable in the present case because the
jury convicted defendant of felony domestic violence causing traumatic injury, criminal
threats, battery, false imprisonment, and dissuading the victim.
Appellant does not deny that section 1170.15 requires the full middle term for a
violation of section 136.1. He does argue, however, that double jeopardy protects
appellant from a greater sentence on remand. The People on the other hand, argue a
remand in this case is unnecessary and urge this Court to correct the error.
We may set aside an unauthorized sentence so a proper sentence may be imposed,
even if the new sentence is harsher. (People v. Delgado (2010) 181 Cal. App. 4th 839,
854.) Under section 1170.15, the trial court retains discretion to impose a consecutive or
concurrent term for the offense of dissuading a witness. As discussed above (see part II,
ante.), there is no reason to suspect the trial court was unaware of its discretion to
determine whether sentences were to run concurrently or consecutively. However, given
the fact that the trial court could impose a lengthier aggregate sentence than that
originally imposed, the matter must be remanded so that the trial court may exercise its
discretion where appropriate. (See People v. Irvin (1991) 230 Cal. App. 3d 180, 192-193
[“As a result of the trial court’s imposition of an unauthorized sentence, the appropriate
course of action is to remand this case to the trial court” to exercise its discretion in
resentencing]; People v. Calderon (1993) 20 Cal. App. 4th 82, 88 [“It is perfectly proper
for this court to remand for a complete resentencing after finding an error with respect to
part of a sentence . . . .”].) We express no opinion as to how the trial court should
exercise its discretion in sentencing.
15
IV. The Pitchess Motion
Appellant also requests that we independently review the sealed transcript of the in
camera proceedings on his Pitchess motion, which we have done. The trial court’s
findings during that review, as reflected in the sealed transcript, were sufficient to permit
appellate review of its ruling. (People v. Mooc (2001) 26 Cal. 4th 1216, 1229, 1232.) We
find no error in the trial court’s ruling at the in camera hearing.
DISPOSITION
The judgment of conviction is affirmed, but the sentence is reversed. The matter
is remanded to the trial court for resentencing.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
_____________________, J. *
FERNS
We concur:
____________________________, Acting P. J.
ASHMANN-GERST
____________________________, J.
CHAVEZ
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
16
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IN RE PHYLLIS L. CROWDER, Chapter 7, Debtor.
CATALINA DEVELOPMENT, INC., Appellant,
v.
BERNARD R. GIVEN II, Trustee, Appellee.
BAP No. NM-07-068,
Bankr. No. 96-10336-m7
United States Bankruptcy Appellate Panel, Tenth Circuit.
September 17, 2008
Before MICHAEL, BROWN, and McNIFF[1], Bankruptcy Judges.
OPINION[*]
BROWN, Bankruptcy Judge.
Appellant Catalina Development, Inc. ("CDI") appeals an order of the bankruptcy court approving the settlement of a claim made against the bankruptcy estate by Paseo Village Homeowners Association (the "Homeowners Association"). Bernard R. Given II, as the Chapter 7 trustee (the "Trustee") entered into a settlement agreement ("Settlement Agreement") that not only compromised a claim against the estate, but also conveyed the bankruptcy estate's interest in certain roads to the Homeowners Association. CDI objected to this conveyance because it did not acknowledge a previous right of access granted to CDI by the Trustee that was memorialized in a memorandum agreement (the "Memorandum"). The bankruptcy court concluded that the prior right of access conveyed to CDI was only temporary in nature and did not burden the property subsequently conveyed by the Trustee to the Homeowners Association. We AFFIRM.
I. Background
On the date of filing, the assets of this bankruptcy estate included interests in certain residential streets in Santa Teresa, New Mexico. One such street, named "Apache Gold Loop," located within the Paseo Village subdivision, was in poor condition and in need of substantial repairs. One of its intersections had a sizeable crater. The Trustee had concerns that the estate might incur liability as a result of these road conditions, but the projected cost of repairs was significant. Disputes arose as to who was responsible for the repairs. Appellant CDI is a developer of the Franklin View Estates, which is adjacent to the Paseo Village subdivision. Some of the lots in Franklin View Estates front the Apache Gold Loop road. The Trustee has asserted that CDI's use of the Apache Gold Loop has contributed to its state of disrepair. In turn, CDI has asserted that the El Paso Electric Company and/or Dona Ana County (the "County") are responsible for the cost of repairs. In filing its proof of claim, the Homeowners Association has asserted that the bankruptcy estate is liable for the repairs.
After several unsuccessful attempts to obtain commitments for road repairs from either El Paso Electric Company, CDI, or Dona Ana County,[2] the Trustee set up a joint meeting, including representatives of the Homeowners Association as well. At the meeting, the negotiations encompassed not only the cost of repairs, but also CDI's request for access to the roads that would provide it with ingress and egress to the Franklin View Estates.[3] While these settlement talks were productive, the parties were not able to reach a complete consensus. According to the Trustee, "[t]he only resolution that was reached was that we would have a 60-day cool-off period; that during that 60 days the parties would try and meet again to see if we could reach a resolution on who was going to pay for what repairs, what was going to happen prospectively with the roads in terms of title/ownership and that in that 60-day period, [CDI] would have a right of access."[4]
Following this meeting, CDI's counsel drafted a "Memorandum" to memorialize their standstill agreement. The Memorandum provides:
1. Barney Given, Trustee and Greg Collins (including Catalina Development, Inc. . . .) agree that they will jointly pay for the cost of bringing that part of Apache Gold Loop shown on Exhibit A . . . to a state of good condition and repair and will negotiate in good faith over the next 60 days to arrive at an agreement on the split of the total cost.
2. Barney Given, Trustee hereby grants Greg Collins (including Catalina Development, Inc. . . .) a right of access for all purposes over all the private streets in Santa Teresa, New Mexico that are owned by the Phyllis L. Crowder Bankruptcy Estate.[5]
The present dispute centers on whether the second paragraph, granting CDI a right of access, was also subject to the 60-day limitation set forth in the first paragraph.
There is no dispute, however, that the Trustee permitted CDI continued access to the estate's roads subsequent to this sixty-day period.[6] The parties continued their negotiations as well. But approximately eight months after executing the Memorandum, the Trustee threatened to "revoke [his] authorization for Mr. Collins to utilize these streets for access to his development."[7]
In addition, the Trustee objected to the proof of claim of the Homeowners Association. They eventually resolved their differences and entered into a settlement agreement. It obligated the bankruptcy estate to pay the Homeowners Association $50,000 and to quitclaim any interest of the estate in the streets within the Paseo Village subdivision. In exchange, the Homeowners Association released any existing or future claims against the estate and assumed responsibility for maintaining and repairing the streets.[8] When the Trustee sought court approval of his settlement with the Association, CDI objected, claiming that any conveyance of the streets in the proposed settlement must be subject to the right of access granted to CDI in the Memorandum.[9]
The bankruptcy court conducted an evidentiary hearing on the Trustee's settlement with the Homeowners Association. The court heard testimony from the Trustee, a representative of the Homeowners Association, and Gregory Collins, as CDI's representative. The court found that the settlement was in the best interest of the estate and met the standards for approval under Federal Rule of Bankruptcy Procedure 9019(a).[10] The court relied on the testimony of the Trustee as to his inspection of the condition of the streets, his meetings with the county, and the estimates for repair costs that he had obtained. The Trustee estimated a potential liability for repairs of existing conditions of up to $150,000, as well as liability for future maintenance costs.[11]
In regard to the nature of the right of access given in the Memorandum, the Trustee testified that he did not intend to grant a permanent right of access. He had refrained from revoking access after the 60-day period only because settlement efforts were ongoing and the continued access facilitated these negotiations.[12] In support of the Objection, Gregory Collins testified that, "[i]t was never discussed that it was a 60-day period of time."[13] Mr. Collins testified further that he had received approval from Dona Ana County for the building of his subdivision based on the right of access granted in the Memorandum.[14]
The bankruptcy court questioned the fact that the Memorandum had never been submitted to the court for approval. It also noted that it did not contain an acknowledgment block for the signatures, making it ineligible for recording and non-binding against subsequent parties without notice of its contents. When the Trustee and Gregory Collins executed the Memorandum on August 4, 2005, the original Memorandum contained signature lines, without any notary blocks. But approximately one year after its execution, Gregory Collins re-signed the Memorandum in the presence of a notary public and then recorded it in Dona Ana County.[15]
The bankruptcy court's Order both approved the Settlement Agreement and construed the language in the Memorandum as granting only a sixty-day right of access in favor of CDI, rather than a "permanent easement."[16] In reaching its conclusion that it was only a temporary easement, the court found that the language in the Memorandum was ambiguous and then applied the canon of construction that the ambiguity should be construed against the drafter, CDI. CDI has timely appealed the court's ruling that the Memorandum conveyed only a temporary right of access.
II. Appellate Jurisdiction
This court has jurisdiction to hear timely filed appeals from "final judgments, orders, and decrees" of bankruptcy courts within the Tenth Circuit, unless one of the parties elects to have the district court hear the appeal.[17] A decision is considered final if it "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment."[18] In this case, the order of the bankruptcy court approving the settlement and determining CDI's interest in the property conveyed to the Homeowners Association left nothing remaining for the bankruptcy court's consideration. Thus, the decision of the bankruptcy court is final for purposes of review. The Debtor's notice of appeal in this case was timely. Neither party elected to have this appeal heard by the United States District Court for the District of New Mexico. The parties have therefore consented to appellate review by this Court.
III. Standard of Review
Interpretation of an unambiguous contract is a question of law and is subject to de novo review on appeal. In re Villa W. Assocs., 146 F.3d 798, 802 (10th Cir. 1998); Milk `N' More, Inc. v. Beavert, 963 F.2d 1342, 1345 (10th Cir. 1992). The initial determination of whether a contract is ambiguous is also a legal conclusion reviewed de novo.[19] "Once it is determined that a contract is ambiguous and that its construction depends on extrinsic circumstances, interpretation of the contract becomes a question of fact."[20] "Findings of fact by a district court will not be set aside unless they are clearly erroneous."[21] In this case, however, CDI has not asserted error in the bankruptcy court's finding that the Memorandum was ambiguous or in its factual findings, but in the alleged failure of the court to give proper weight to the evidence before applying a canon of construction. The question of whether the bankruptcy court failed to consider or give proper weight to relevant evidence is subject to de novo review. Harvey ex rel. Blankenbaker v. United Transp. Union, 878 F.2d 1235, 1244 (10th Cir. 1989).
IV. Discussion
A. Court's Construction of Memorandum As Granting Only Temporary Easement Not Erroneous.
The sole issue identified by CDI on appeal is whether the bankruptcy court properly interpreted the language in the Memorandum when it concluded the Memorandum conveyed only a temporary right of access.[22] CDI argues that once the bankruptcy court found the language ambiguous, it prematurely applied a canon of construction to determine the meaning of the ambiguous terms. CDI contends that the court failed to weigh the evidence presented at the hearing.
New Mexico law governs the construction and interpretation of the Memorandum.[23] Under New Mexico law, "the language of the entire agreement should be construed together."[24] If it is found to be ambiguous, then "the jury or the court must engage in factfinding to determine the meaning of the contract."[25] As CDI has argued, the fact finder should first consider evidence of the facts and circumstances surrounding the agreement, as well as evidence of the parties' intent, and only then resort to canons of construction if the parties fail to offer such evidence.[26]
In this case, the bankruptcy court afforded the parties an opportunity to present evidence regarding the circumstances surrounding the execution of the Memorandum and as to their intent. Its ruling specifically mentions some, but not all, of the evidence presented. It makes findings regarding this evidence, but in the context of its ruling that the agreement was ambiguous. It did not then recite the same factual findings again in its attempt to interpret the Memorandum. Instead the court resorted to the canon of construction that construes the ambiguity against the drafter. What the bankruptcy court did not expressly state, but what this Court finds is implicit in its ruling, is that despite the presentation of evidence as to the circumstances and intent of the parties, the court could not determine the intent of the parties or that they had reached a meeting of the minds on this issue. In other words, despite the evidence, the ambiguity persisted. The bankruptcy court then properly resorted to a canon of construction.
The structure of the court's ruling, reproduced below, demonstrates that the court considered evidence odominguez@example.org.
In applying these standards to the Memorandum, the Court finds that an ambiguity exists. The Chapter 7 Trustee testified that the Memorandum was reached as a result of a meeting among himself, Greg Collins, representatives from the city and representatives of Dona Ana County wherein the parties agreed to a "sixty-day cooling off period." Paragraph 1. by its terms references a sixty-day period, which is consistent with this testimony. Paragraph 2., on the other hand, contains no qualifying language in the granting of a right of access over the streets in the Santa Teresa subdivision. Given the circumstances surrounding the context in which the Memorandum was created, the Court finds that it is not clear whether the Memorandum as a whole was intended to apply only for a limited, sixty-day period. However, because counsel for CDI drafted the Memorandum, the Court will resolve this ambiguity against CDI. It is appropriate to construe an ambiguity in a contract against the party who drafted it when the Court cannot determine the parties' intent from the contract terms. See Smith v. Tinley, 100 N.M. 663, 665, 674 P.2d 1123, 1125 (1984)("ambiguities in a contract are to be construed against the party who drafted it.")(citation omitted); Gardner-Zemke Co. v. State, 109 N.M. 729, 733, 790 P.2d 1010, 1014 (1990)(noting that the rule that ambiguities are to be construed against the drafter only applies when the court is otherwise unable to ascertain the intent of the parties) citing El Paso Natural Gas Co. v. Western Bldg. Assocs., 675 F.2d 1135, 1141 (10th Cir. 1982). For these reasons, the Court concludes that the Memorandum does not create a permanent easement over the streets in the Santa Teresa subdivision.[27]
The italicized language in this paragraph constitutes the court's factual findings. It expressly considered: (1) the testimony regarding the meeting among the Trustee and representatives from the CDI, the PVHA and Dona Ana County; (2) the agreement to a "60-day cooling off period;" and (3) the fact that paragraph 1 of the Memorandum contained a sixty-day limitation, but that paragraph 2 did not. If the court had only mentioned the language of the Memorandum itself and then applied a canon of construction, then CDI's contention that the court had failed to consider evidence would have had greater merit. But the court referenced the testimony it had received at trial regarding the circumstances surrounding the execution of the Memorandum. It then made a finding as to the existence of an agreement to engage in a "60-day cooling off period." It then made a second finding that it was "not clear whether the Memorandum as a whole was intended to apply for a limited, sixty day period." This was the court's finding that, despite the evidence, the parties' intent remained unclear or that there was no meeting of the minds on this issue.
In its briefs, CDI argues that the court should have considered the following evidence before applying a canon of construction: (1) that the Trustee gave CDI continued rights to access the roads and threatened to revoke the access nearly eight months after executing the Memorandum; (2) that CDI agreed to pay and did pay for half of the road repairs in reliance on the estate's conveyance of a permanent right of access; and (3) that the structure of the Memorandum itself supports an interpretation of a permanent grant of access as paragraph 2 of the Memorandum does not limit the right of access to sixty days. This latter complaint is contradicted by the ruling itself because the bankruptcy court expressly noted the discrepancy between the sixty-day language contained in paragraph 1, but absent in paragraph 2, of the Memorandum.
At oral argument, this Court specifically asked CDI's counsel what evidence demonstrated CDI's intent that the right of access was to be permanent. The Court pointed out that the testimony of Mr. Collins at trial was only that "[i]t was never discussed that it was a 60-day period of time." Counsel responded to this Court that it was the fact that only paragraph 1 of the Memorandum contained a 60-day limitation. This fact, however, was expressly noted by the bankruptcy court.
The Court acknowledges that the bankruptcy court made no specific mention in its ruling of either the Trustee's grant of continued access and threatened revocation of the access rights or of CDI's contribution to the repairs. Federal Rule of Civil Procedure 52(a), made applicable by Bankruptcy Rule 7052, requires a trial court in a bench trial to "find the facts specially and state separately its conclusions of law thereon . . . ." Nothing in this rule mandates that the trial court specifically mention every fact odominguez@example.org. But the findings must be more than conclusory in nature. A court's decision to refer to some evidence, but not other evidence, does not necessarily mean it overlooked the other evidence. It may only indicate that it did not find the other evidence persuasive or determinative. It is sufficient if the court makes findings as to the evidence on which it relied in rendering its determination. We recognize that this case presents a close question as to whether the court's findings were more than conclusory in nature. But taken as a whole, we conclude that the court made sufficient findings that there was no evidence of an actual agreement reached as to the duration of the right of access.
In addition, while this Court will not substitute its own factual findings for those of the trial court, the Court notes that the omission of any reference to the Trustee's threat to revoke the right of access does not necessarily support a finding that the access conveyed was intended to be permanent. To the contrary, if the conveyance was truly permanent, the Trustee would have had no right to revoke it. In terms of the evidence that CDI relied on the grant of access, this evidence at best demonstrates an assumption on CDI's part that the grant was permanent. But it does not demonstrate by itself that the parties reached a meeting of the minds as to this issue. In fact, Mr. Collins testified that this issue was never discussed. Thus, we cannot say it was clearly erroneous for the bankruptcy court to conclude that the ambiguity persisted despite the evidence presented.
B. Alternatively, the Memorandum's Grant of Easement Not Binding Absent Court Approval Process.
Even if we were persuaded that the bankruptcy court erred in interpreting the language of the Memorandum, or that it had failed to render sufficient findings of fact, we would affirm the bankruptcy court on alternative grounds.[28] If the Memorandum conveyed a permanent right of access, as CDI contends, then this purported conveyance by the Trustee involved the "sale" of estate assets to CDI. Pursuant to 11 U.S.C. § 363(b)(1), the "sale" of estate assets outside of the ordinary course of business is permitted only "after notice and a hearing." Section 102 of the Bankruptcy Code defines the requirements of this phrase. It requires a trustee to initiate a process to obtain court authorization by giving such notice as is appropriate in the circumstances.[29] He may then act without an actual hearing if either no party in interest timely requested a hearing or if the court has authorized the action without a hearing.[30] Thus, the entry of a formal court order approving the proposed transaction is not required.[31] But a trustee is only authorized to use, sell, or lease estate property (other than cash collateral) after he has complied with § 102's requirements for "notice and a hearing." We do not suggest that, by agreeing to a temporary grant of access, the Trustee had to invoke the court approval process, but if he had granted a permanent right of access, he was bound to comply with the Code's requirements. In this case, neither the Trustee nor CDI gave notice, or otherwise sought court approval, of the Memorandum. Thus, we conclude in the alternative, that if the Memorandum was intended to and in fact did grant CDI a permanent right of access, it was unenforceable against the estate.
In so ruling, we recognize that neither § 102 nor § 363 expressly addresses the consequence of failing to meet § 102's requirements. Nor has the Tenth Circuit directly addressed the question of whether an agreement entered into by a trustee to settle or to sell assets is legally binding prior to satisfying § 102's requirements. This issue arises often in the context of a trustee's receipt of a higher offer to buy estate assets, after he has already contracted to sell the assets to another, but before he has obtained court approval of his original contract. Courts are divided on this issue. Some courts hold that an agreement cannot be binding on the trustee absent court approval and, therefore, he is free to withdraw his prior agreement.[32] Other courts hold that an agreement is binding on all the parties pending court approval.[33]
While it does not directly address this issue, we find guidance in In re Broadmoor Place Investments, L.P.,[34] in which the debtor-in-possession ("DIP") signed an agreement with an initial bidder for the sale of a building. The DIP subsequently entered into a second agreement as a back-up bid, but sought approval of the first agreement. The bankruptcy court approved the second agreement because it contained fewer contingencies and allowed for a more immediate closing. On appeal, the Tenth Circuit held that the bankruptcy court did not have the authority to choose from competing bids because to do so would improperly place the court in estate administration. It held that "a Bankruptcy Court in a case such as this does have the power to disapprove a proposed sale recommended by a trustee . . . if it has an awareness there is another proposal in hand which, from the estate's point of view, is better or more acceptable."[35] In so ruling, the court observed that to call the first agreement a "contract" would be a "misnomer since there can be no contract in this situation without Bankruptcy Court approval [and] these instruments are but binding bids . . . ."[36]
The requirements of § 102 and § 363 for "notice and a hearing," coupled with the Tenth Circuit's observation in Broadmoor that, absent court approval, an agreement to sell estate property outside the ordinary course of business is not a binding contract, causes this Court to conclude that the grant of access rights set forth in the Memorandum, if it was intended to convey a permanent right of access, was unenforceable. Thus, regardless of whether he conveyed a temporary or permanent right of access in the Memorandum, the Trustee was free to negotiate the conveyance of the streets to the Homeowners Association, without expressly providing a right of access to CDI.
V. Conclusion
For the foregoing reasons, we conclude that the bankruptcy court did not err in its interpretation of the Memorandum. In the alternative, we affirm the Order on the basis that the Memorandum, if it was intended to convey a permanent right of access, was not binding on the Trustee because the parties failed to comply with the Bankruptcy Code's requirements of "notice and a hearing."
NOTES
[1] Honorable Peter J. McNiff, United States Bankruptcy Judge, United States Bankruptcy Court for the District of Wyoming, sitting by designation.
[*] This unpublished opinion is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. 10th Cir. BAP L.R. 8018-6(a).
[2] Transcript of Motion to Approve Compromise Hearing held on February 12, 2007 ("Transcript"), at 23-24, 36, in App. Appx. at 107-08, 120. The Trustee believed that much of the damage to Apache Gold Loop occurred as a result of CDI's use of the road in its development of Franklin View Estates. Transcript at 26, in App. Appx. at 110. El Paso Electric Company denies responsibility for the damage. Transcript at 24, in App. Appx. at 108.
[3] Transcript at 20, in App. Appx. at 104.
[4] Transcript at 21, in App. Appx. at 105.
[5] Memorandom [sic], in App. Appx. at 75.
[6] Transcript at 28, 53, in App. Appx. at 112,137.
[7] April 18, 2006, Letter From Trustee to Frank Ainsa ("Letter"), in App. Appx. at 81.
[8] Paragraph 5 of the Settlement Agreement provides that the "Trustee shall convey to PVHOA, for $1.00 and other consideration herein described, all of the bankruptcy estate's right, title, and interest in the streets within the association by quitclaim deed, whereupon Trustee and the bankruptcy estate shall be released from any liability, obligation, or expense related to said streets in any way, and all such liabilities and obligations will be assumed by PVHOA." Exhibit A to the Motion to Approve Settlement of Paseo Village Homeowners Association Claim No. 184, in App. Appx. at 17.
[9] CDI also raised the following objections: (1) the claim was filed late and should not be approved; (2) PVHA should not be allowed to use settlement proceeds to pursue claims against CDI; (3) the settlement should not contain language assigning liability to CDI for street repair costs; and (4) that no payment should be made to PVHA until there has been resolution regarding the Trustee's intent to abandon other streets owned by the estate since other subdivisions may have claims against the bankruptcy estate for street repairs. Amended Objections of Catalina Development Inc., Santa Teresa Country Club, L.L.C. and Mesilla Bolson Properties, L.L.C. to Trustee's Motion to Approve Settlement of Paseo Village Homeowners Association Claim No. 184, in App. Appx. at 26-27.
[10] Subsequent references to the Rule or Rules shall refer to the Federal Rules of Bankruptcy Procedure.
[11] Order Granting Motion to Approve Settlement of Paseo Village Homeowners Association Claim No. 184 Subject to Certain Conditions ("Order"), in App. Appx. at 38-39. See also Transcript at 18-19, 36, in App. Appx. at 102-03, 120.
[12] Trustee's counsel proffered this explanation at oral argument made on July 18, 2008.
[13] Transcript at 98, in App. Appx. at 182.
[14] Transcript at 98-99, in App. Appx. at 182-83.
[15] Transcript at 18-19, in App. Appx. at 111-12. At oral argument, counsel for CDI argued that the parties had contemplated executing a subsequent document containing the necessary notarial blocks. This argument is not supported by the record. Although not included in the findings made by the bankruptcy court, Gregory Collins testified that he notarized and recorded the Memorandum on the advice of counsel and that he did not communicate his intention to do this to the Trustee. Transcript at 102-03, in App. Appx. at 186-87. Notably, Collins testified at the hearing that the parties did not discuss notarizing the Memorandum at the time of execution and that he did not know if the parties intended to record the Memorandum at the time of the original execution. Transcript at 103, in App. Appx. at 187.
[16] The bankruptcy court concluded that the Memorandum did not create a "permanent easement" over the streets in the Santa Teresa subdivision. Order at 10, in App. Appx. at 42. In New Mexico, an easement is "the generic term for a `liberty, privilege, right or advantage which one has in the land of another.'" Martinez v. Martinez, 604 P.2d 366, 368 (N.M. 1979) (quoting State v. Begay, 320 P.2d 1017, 1019 (N.M. 1958), overruled on other grounds by, State v. Warner, 379 P.2d 66 (N.M. 1963). Rights of "access," "ingress and egress" and a "right of way" are descriptive of specific easement rights. Martinez, 604 odominguez@example.org. Although these terms appear to be used somewhat interchangeably in New Mexico, this opinion refers to the property right conveyed as a "right of access" as that is the operative language in the Memorandum.
[17] 28 U.S.C. § 158(a)(1), (b)(1), and (c)(1); Fed. R. Bankr. P. 8002.
[18] Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712 (1996) (internal quotation marks omitted).
[19] In re Kaiser Steel Corp., 998 F.2d 783, 789 (10th Cir. 1993); Teton Exploration Drilling, Inc. v. Bokum Res. Corp., 818 F.2d 1521, 1526 (10th Cir. 1987).
[20] City of Farmington v. Amoco Gas Co., 777 F.2d 554, 560 (10th Cir. 1985).
[21] Id.
[22] The Trustee raised the issue in his opening brief of whether the bankruptcy court's ruling on the right of access constituted an advisory ruling, but later withdrew this as an issue at oral argument. Br. of Appellee at 1.
[23] Because the Memorandum concerns real property located in New Mexico and because the parties executed the Memorandum in New Mexico, New Mexico law governs its interpretation. "The interpretation and enforcement of contracts is (sic) traditionally within the province of state courts, and the general presumption is in favor of applying state law." Madsen v. Prudential Fed. Sav. & Loan Ass'n, 635 F.2d 797, 802 (10th Cir. 1980); (citation and internal quotation marks omitted); Lawrence Nat. Bank. v. Rice, 82 F.2d 28, 34 (10th Cir. 1936) ("The law of the place where the contract is made governs its nature, obligation and interpretation, unless the parties, when entering into the contract, intend to be bound by the law of some other state.").
[24] Allsup's Convenience Stores, Inc. v. N. River Ins. Co., 976 P.2d 1, 12 (N.M. 1999).
[25] Elliot Indus. Ltd. P'ship v. BP Am. Prod. Co., 407 F.3d 1091, 1108 (10th Cir. 2005); Mark V, Inc. v. Mellekas, 845 P.2d 1232, 1235 (N.M. 1993).
[26] Mark V, Inc. v. Mellekas, 845 odominguez@example.org.
[27] Order at 9-10, in App. Appx. at 41-42 (emphasis added).
[28] An appellate court is "`free to affirm a district court decision on any grounds for which there is a record sufficient to permit conclusions of law, even grounds not relied upon by the district court.'" Griess v. Colorado, 841 F.2d 1042, 1047 (10th Cir. 1988) (quoting Alfaro Motors, Inc. v. Ward, 814 F.2d 883, 887 (2d Cir. 1987)); United States v. Sandoval, 29 F.3d 537, 542 n.6 (10th Cir. 1994).
[29] 11 U.S.C. § 102(1)(A).
[30] 11 U.S.C. § 102(1)(B).
[31] Compare § 363(b)(1)'s use of the phrase, "[t]he trustee, after notice and a hearing, may use, sell, or lease" with § 363(c)(2), "[t]he trustee may not use, sell, or lease cash collateral under paragraph (1) of this subsection unless (A) each entity that has an interest in such cash collateral consents; or (B) the court, after notice and a hearing, authorizes such use, sale, or lease . . . ." (emphasis added).
[32] Thousand Acres Dev., LLC v. Iannacone (In re Kreger), 307 B.R. 106, 111 (8th Cir. BAP 2004) ("[B]uyers routinely make offers to purchase assets from a trustee, which offers are subject to higher and better offers being received at the hearing for approval of the sale. But once the order approving the sale is entered, that order represents a binding obligation . . . ."); In re Smith, 352 B.R. 500 (Bankr. N.D. Ala. 2006) (trustee's motion to sell was not binding, and trustee did not breach any contractual obligations when, upon being advised of a higher offer, he withdrew his motion); Siddiqui v. Gardner (In re Williamson), 327 B.R. 578, 583 (Bankr. E.D. Va. 2005) (during the period between execution of the contract and the court hearing on approval, the property remained on the market, subject to higher offers and this was all part of the "normal process of exposing the property to the market"); In re Landscape Props., Inc., 100 B.R. 445, 447 (Bankr. E.D. Ark. 1988) (in sustaining objection to private sale based solely on availability of higher offer, court held there is no contract without bankruptcy court approval); In re Psychrometric Sys., Inc., 367 B.R. 670 (Bankr. D. Colo. 2007) (same); In re Am. Freight Sys., Inc., 114 B.R. 261, 263 (D. Kan. 1990) (Bankruptcy court did not err in considering competing bids on date of sale hearing because prior bid was merely "a proposed sale which was subject to the bankruptcy court's approval.").
[33] In re Frye, 216 B.R. 166, 173 (Bankr. E.D. Va. 1997) (see collection of cases therein); White v. C.B. Hannay Co. (In re Lyons Transp. Lines, Inc.), 163 B.R. 474, 476 (Bankr. W.D. Pa. 1994) (holding that absent fraud, a settlement agreement is binding pending approval by bankruptcy court).
[34] 994 F.2d 744 (10th Cir. 1993).
[35] Id. at 746 (citing In re Landscape Props., Inc., 100 B.R. 445 (Bankr. E.D. Ark. 1988).
[36] In re Broadmoor, 994 F.2d at 745 n.1 (citation omitted).
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Citation Nr: 1420992
Decision Date: 05/09/14 Archive Date: 05/21/14
DOCKET NO. 11-09 224 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Columbia, South Carolina
THE ISSUES
1. Entitlement to a rating in excess of 10 percent for right patellar tendinitis.
2. Entitlement to a rating in excess of 10 percent for left patellar tendinitis.
3. Entitlement to a rating in excess of 10 percent for right knee laxity associated with right patellar tendinitis.
REPRESENTATION
Appellant represented by: Disabled American Veterans
ATTORNEY FOR THE BOARD
A.M.Clark, Counsel
INTRODUCTION
The Veteran served on active duty from May 1984 to August 1984, October 1988 to February 1989, and from September 1990 to October 1991.
This case comes before the Board of Veterans' Appeals (Board) on appeal from an August 2009 rating decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Columbia, South Carolina.
The Board has not only reviewed the Veteran's physical claims file, but also the Veteran's file on the 'Virtual VA' system to insure a total review of the evidence.
The appeal is REMANDED to the Agency of Original Jurisdiction (AOJ). VA will notify the appellant if further action is required.
REMAND
The Veteran was most recently afforded a VA knee examination in September 2013. See Virtual VA claims file. This would normally be a very timely examination.
However, at the examination, the Veteran reported that he was scheduled to have left knee surgery in December 2013. This surgery changes the nature of the disability.
While on Remand any additional VA and private treatment records should be associated with the claims file.
Accordingly, the case is REMANDED for the following actions:
1. Contact the Veteran and obtain the names, addresses and approximate dates of treatment for all medical care providers, VA and non-VA, who treated the Veteran for his knees. After securing any necessary authorization from him, obtain all identified treatment records. A specific request should be made to obtain records from the VA Medical Center (VAMC) in Columbia, South Carolina, from September 2010 to the present.
2. Then, schedule the Veteran for a VA examination to determine the nature and severity of his service- connected right and left knee disabilities. The Veteran's claims file should be provided to the examiner. The examiner should obtain a detailed clinical history from the Veteran. All pertinent pathology found on examination should be noted in the report of the evaluation.
Any testing deemed necessary should be performed, including X-rays and appropriate range of motion studies. The range of motion of the Veteran's right and left knee disabilities should be set forth in degrees.
The examiner should further comment as to whether there is any pain, weakened movement, excess fatigability or incoordination on movement, and whether there is likely to be additional range of motion loss due to any of the following should be addressed: (1) pain on use, including during flare-ups; (2) weakened movement; (3) excess fatigability; or (4) incoordination. The examiner is asked to describe whether pain significantly limits functional ability during flare-ups. All limitation of function must be identified. If there is no pain, no limitation of motion and/or no limitation of function, such facts must be noted in the report.
The examiner should additionally address whether:
* the Veteran suffers from ankylosis of either knee;
* the Veteran experiences subluxation or instability of from either knee disability (mild, moderate, or severe);
* the Veteran has chronic residuals consisting of severe painful motion or weakness in the right or left extremities.
Any opinion(s) offered should be accompanied by a clear rationale consistent with the evidence of record. If the examiner finds it impossible to provide any part of the requested opinions without resort to pure speculation, he or she should so indicate and provide a rationale as to why such a finding is made.
3. Upon completion of the above, readjudicate the issues on appeal. If any benefit sought on appeal remains denied, the Veteran and his representative should be furnished an appropriate supplemental statement of the case and be provided an opportunity to respond. The case should be returned to the Board for further appellate consideration, as appropriate.
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). These claims 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. 2013).
_________________________________________________
JOHN J. CROWLEY
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) (2013).
|
This is an action brought by the defendant in error against the plaintiff in error to recover damages for the breach, of a contract. By stipulation of counsel a jury was waived, and the case tried to the court. The petition contained two causes of action, but by stipulation the first cause of action was dismissed, and a cross-action filed by the plaintiff in error was also dismissed, and the trial limited to the second cause of action pleaded in the plaintiff's petition. The court found in favor of the defendant in error in the sum of $3,000, and rendered judgment accordingly, to which the defendant in error duly excepted. Timely motion for a new trial was filed, overruled, and excepted to. Hereafter the parties will be designated as they appeared in the trial court.
The second cause of action, omitting the formal parts, is as follows:
"And plaintiff for his second and further cause of action against the defendant says and avers: That the defendant is now, and has been at all times hereinafter mentioned, a corporation organized and existing under and by virtue of the laws of the state of Oklahoma, engaged in the general business of buying and selling oil and gas mining leases and mining for the production of oil and gas, having its principal office and place of business at the city of Tulsa, in the state of Oklahoma.
"That heretofore, to wit, on or about the 1st day of March, 1913, the plaintiff and the defendant made and entered into their certain contract in writing by the terms of which the defendant agreed, in consideration of certain services rendered, to pay to the plaintiff the sum of $500 cash and the further sum of $500 when and if a well then drilling or about to be drilled by or for the defendant, near Owasso, by one Wayne Kingsbury, should be drilled in and prove a commercially paying oil ond gas well, and the further sum of $1,000 when and if a well proposed to be drilled by the defendant in section 15, township 17 north of range 12 east, in Oklahoma, should be drilled in and should prove a commercially paying oil and gas well, and the further sum of $3,000, when and if a well proposed to be drilled by the defendant on any of its leases in sections 14 or 15, township 20 north of range 13 east, in Oklahoma, should be drilled in and prove a commercially paying oil or gas well.
"And plaintiff avers that said contract was entered into on behalf of the defendant, through its president and managing officer, R.A. Josey, who was duly authorized thereto by the defendant. A true, full, and complete copy of said written contract is hereto attached, marked Exhibit A, and made a part of this petition the same as if herein in full set out.
"And plaintiff avers that the word 'proposed,' as used in said contract, was intended by the parties, at the time of the execution of said contract to mean a positive engagement on the part of the defendant to drill said wells, and all of them, within a reasonable time thereafter, and that it was the intent of the plaintiff and the defendant in executing said contract that the engagement of the defendant evidenced thereby to drill said wells should be an unconditional promise.
"And plaintiff avers that he has fully performed on his part all of the conditions and obligations by him to be performed under the terms of said contract but that the defendant has wholly failed, neglected, and refused to perform said contract, except that it has paid to the plaintiff the sum of $500 pursuant to the engagements of said contract, *Page 215
and that the defendant drilled the well agreed to be drilled by it in said contract near Owasso, which was described as being drilled by one Wayne Kingsbury, and that said well proved a failure, and that thereafter the defendant drilled another well proposed by it in said contract to be drilled in section 15, township 18 north of range 12 east, and plaintiff avers that in said well oil was found in commercially paying quantities, but that the defendant has wholly failed, neglected, and refused to pay to the plaintiff the sum of $1,000 at the time of the completion of said well or at any other time.
"And plaintiff says that the defendant has further broken said contract in that after the execution and delivery thereof, and without the consent of this plaintiff, the defendant sold and assigned, on or about the _____ day of, _____, 1914, all its leases in sections 14 and 15 in township 29 north of range 13 east, and that the assignee of said leases has heretofore drilled upon said leases three commercially paying gas wells, but that the defendant has wholly failed, neglected, and refused to pay to the plaintiff the sum of $3,000 promised and agreed to be paid to the plaintiff when and if a well in said territory should be drilled in by the defendant which produced oil or gas in commercially paying quantities — all to the damage and injury of the plaintiff in, the sum of $4,000.
"Wherefore, plaintiff prays judgment against defendant upon his second cause of action for the sum of $4,000 and the costs of this action."
Exhibit A, referred to in the petition, and attached thereto, is as follows:
"Exhibit A.
"Memorandum of agreement made this March 1, 1913, between Gem Oil Company, first party, and J.J. Callendar, second party, witnesseth: That the first party has agreed to pay and second party has agreed to receive in full for all services of the second party to date the sum of five hundred dollars ($500.00) cash, the receipt of which second party acknowledged, the further sum of five hundred dollars ($500.00) to be paid when and if the well now drilling or about to be drilled by or for the first party near Owasso by Wayne Kingsbury is drilled in and proves a commercially paying oil or gas well, the further sum of one thousand dollars ($1,000.00) when and if a well proposed to be drilled by first party in section 15, township 18 north, range 12 east, is drilled in and proves a commercially paying oil or gas well, the further sum of three thousand dollars ($3,000.00) when and if a well proposed to be drilled by first party on any of its present leases in sections 14 or 15, township 20 north, range 13 east, is drilled in and proves a commercially paying oil or gas well.
"Witness the hands and seals of the parties the day and year first above written.
"Gem Oil Company, "By R.A. Josey, Prest.
"J.J. Callendar."
The defendant demurred to plaintiff's second cause of action for the reason that "the same failed to state facts sufficient to constitute a cause of action against the defendant." The demurrer was overruled, and exception saved, but the action of the court thereon is not assigned as error.
After the overruling of the demurrer, the defendant filed an answer, which, omitting the formal parts, and that part dismissed by stipulation, is as follows:
"Comes now the defendant, the Gem Oil Company, and for answer to plaintiff's petition denies each and every fact, matter, and thing in said petition alleged, and each and every fact, matter and thing in plaintiff's first cause of action alleged, and each and every fact, matter, and thing in plaintiff's second cause of action alleged not herein specifically admitted.
"The defendant admits that it is a corporation organized under the laws of the state of Oklahoma.
"The defendant, for its second defense to both of plaintiff's causes of action, and for answer to plaintiff's second cause of action, and for cross-petition against plaintiff, alleges: The defendant admits the execution of the written contract attached to plaintiff's petition, marked Exhibit A, and denies each and every other fact, matter, and thing in said cause of action alleged."
The execution of the contract, a copy of which is attached to plaintiff's petition as Exhibit A, is admitted in the answer, and the uncontradicted evidence shows that after the execution of said contract the defendant sold and assigned its leases in section 14 or 15, township 20 north, range 13, and that thereafter wells were drilled upon the land to which the $3,000 payment of the contract refers. The evidence as to whether or not the wells drilled upon said land developed oil or gas in commercial paying quantities was in conflict.
When the parties rested there was no evidence before the court that the well that had been bored produced gas or oil in commercial quantities, and the defendant demurred to the evidence, and against its objection and exception, the plaintiff was permitted to open the case, and to introduce the following evidence: J.W. Stoneking testified that he resided at Tulsa; that the company with which he was connected had drilled wells in sections 14 and 15, township 20 north, range 13 east, in the acreage assigned from the Gem Oil Company; that four wells *Page 216
had been put down on the leases they acquired from the Gem Oil Company; that they were drilled in 1914 and 1915, three of which were in 1914; that No. 1, on the Goodrich, was drilled November 3, 1914, No. 2, on the Goodrich, was drilled December 18, 1914, and the well on the Robertson was completed October 30, 1914, and the No. 3, Goodrich, February 9, 1915; that gas was found in these wells in commercial quantities; that gas was found which was utilized, and put into the lines; that the company distributes and sells gas, and these wells were used in that way; that these wells produced from 3,000,000 to 5,000,000 feet of gas per day; that in the opinion of the witness the wells produced gas in paying quantities; that no wells were drilled on said leases that were a failure; that three of these wells were plugged and at the time they were plugged they were not commercially paying; that a test was made October 18, 1915, and that the volume at that time was 380,160 feet; that, taking into consideration the cost of drilling the wells, installing the machinery, and the necessary connection with the pipe line to market its production, the wells had been commercially paying; that after the well had been operated about a year its production had gone down from its original capacity to 380,000 feet.
The evidence of the defendant was that never since the wells on said leases in question had been bored could they or either one of them be operated and be a paying well; that said wells nor neither one of them could not be operated so as to produce an amount in excess of the expenses of their operation; that the principal well was not worth $1,000, except for the casing and machinery that was on or in it.
The defendant then introduced F.B. Long, who testified that he was secretary of the Gem Oil Company; that at the time these leases were transferred by the Gem Oil Company they were transferred because they were regarded as of no value; that in selling the leases he figured up just what the company had been out, and did not charge even any overhead expenses on them in the transfer; that the witness did not believe chat with the rock pressure, working pressure, and the volume as given by a former witness, the four wells, or any one of them, could have been operated as a commercial paying well by the Gem Oil Company; that at the time of the sale of the leases the company was of the opinion that the leases were worthless, that the company bored it for oil, then figured it a dry hole proposition, and were surprised in the gas well development, and when all of them were nice wells they were more surprised; that there never were any dry holes on the leases and no dry holes offsetting these leases.
The court made the following findings of fact:
"The court finds that the parties entered into the contract which is attached to the petition herein, and that plaintiff and defendant have admitted the execution of the contract in question.
"The court finds that within a short time after the contract in question was entered into the defendant assigned its leases upon the land referred to in the contract as being in sections 14 and 15, in township 20 north, range 13 east, to another company before the defendant had drilled any wells upon its leases in the said sections.
"The court finds that the defendant received a consideration for said assignment, which is a sufficient and adequate consideration, and that such consideration was actually paid to it at the time said leases were assigned, and before any well was drilled upon the land embraced in the leases so assigned; that shortly after the assignment of the leases by the defendant the assignees of the defendant entered upon and drilled four wells upon the leases in question, and that the first well drilled produced gas in quantities from 3,000,000 to 5,000,000 cubic feet per day, which is the initial production of the well so drilled, and that that well was drilled and was operated for a period of a little more than two years before it was abandoned.
"The court finds that the well in question was a producing well, and produced gas in commercial quantities within the meaning of the contract between the parties pleaded by the plaintiff.
"The court further finds that three other wells have been drilled upon these tracts of land included in the leases assigned by the defendant, and being within sections 14 and 15 named in the contract, and that each of the additional wells drilled have produced gas in commercial quantities.
"The court finds that the sum of $3,000 referred to in the contract has not been paid by the defendant to the plaintiff, or by the assignees of the defendant to the plaintiff, and the plaintiff has never received this $3,000 referred to in the contract, or any part of it.
"The court finds that there is due the plaintiff from the defendant by reason of the facts proven in this case and finds herein the sum of $3,000 with interest from — I don't have any idea about the dates — the 1st day of January, 1915; it was 1914, I believe, that the leases were assigned — probably before that time. The court concludes as a matter of law that the defendant is liable to the plaintiff for the amount of $30,000, with interest *Page 217
upon the findings of fact herein now made by the court. The court concludes that the assignment of the leases in question after the execution of the contract was a breach of the contract by the defendant and operated to render the drilling of the well in question impossible by the defendant.
"The court concludes further that the drilling of the well after the assignment of the leases by the assignees in such assignment and the finding of gas in paying quantities was the performance of the conditions of the contract, such as is required in order to make the defendant liable on the contract to the plaintiff for the payment of the sum of $3,000 with interest and damages.
"The court further concludes that the judgment in this case should be in favor of the plaintiff for the sum of $3,000, with interest from January 1, 1915.
"The court concludes that the word 'proposed,' as used in the contract, means contemplated and intended, and that such term denotes fixed intention on the part of the defendant fully known to the plaintiff at the time the contract was entered into that a well would be drilled upon the lands referred to in the contract."
There are numerous assignments of error, but it is asserted in the brief of the defendant:
"That this case turns squarely on the proper interpretation of the contract in question, since it is not disputed, and upon the sufficiency of the evidence to sustain the judgment of the court."
And in the brief of the plaintiff it is said:
"That the only question before this court is as to the construction placed upon the written contract by the learned trial court, and whether or not the judgment rendered therein is supported by the findings of fact made by said court."
We agree with these contentions of the parties, and will therefore confine our review of the case, first, to an interpretation of the contract; second, to a consideration of whether or not the findings of the court are sufficiently supported by the evidence.
Much argument is given in the brief as to the correct definition of the word "propose" used in the contract, and we are of the opinion that the finding of the court that "the word as used in the contract means contemplated and intended, and that the term denotes fixed intention on the part of the defendant, fully known to the plaintiff at the time the contract was entered into that a well would be drilled upon the lands referred to in the contract," is correct.
Section 954, Revised Laws 1910, provides:
"The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning. * * *"
Defining the word "propose" as we think correctly defined by the trial court, it is clear that the contract under consideration is a contract in which there was a settlement between the parties thereto of some existing liability, and in which it was agreed on the part of the defendant to pay to the plaintiff in addition to other payments named in the contract the sum of $3,000 in the event the well contracted by said defendant to be drilled on the leases in sections 14 or 15, township 20 north, range 13 east, is proved a commercially paying well, and we are therefore of the opinion that the liability of the defendant for the payment of said $3,000 turns upon the fact that commercially paying oil or gas wells were produced in said lands; in short, whether or not the gas or oil wells to be drilled by the party of the first part were drilled by the party of the first part, or by another holding under a transfer of the leases, that the development of commercially paying gas or oil wells upon said leases fixed the liability of the defendant.
Commercially paying gas wells having been developed on the leases in question, we are of the opinion that such fact fixed the liability of the defendant as adjudged by the trial court, and it is unnecessary to determine whether or not the transfer of said leases by the defendant was such a breach of the contract as to entitle the plaintiff to recover the $3,000 recovered.
"The cardinal rule in the interpretation of a contract is to ascertain the intention of the parties thereto as expressed therein, and give effect to the same if it can be done consistently with legal principles. In arriving at the intention of the parties to a contract, the language used therein, if clear and explicit and does not involve an absurdity, governs in the interpretation. The whole instrument should be read together, and, if possible, every part thereof should be made effective, giving the words and terms thereof their ordinary and accepted use and meaning." Brown et al. v. Coppadge et al., 54 Okla. 88, 153 P. 817.
In the City of Tecumseh v. Burns et al., 30 Okla. 503,120 P. 270, it is held:
"In arriving at the intention of the parties to a contract, the whole instrument must be read together, and, if possible, every part thereof should be made effective, giving to the words and terms thereof their ordinary and generally accepted use and understanding."
In Lamont Gas Oil Co. v. Doop Frater, 39 Okla. 427,135 P. 392, it is held: *Page 218
"The intention of the parties must be deducted from the entire agreement, and not from any part or parts of it, because where a contract has several stipulations, it is plain that the parties agreed that their intention was not expressed by any single part or stipulation of it, but by every part and provision in it, considered together, and so construed as to be consistent with every other part."
Kansas City Bridge Co. v. Lindsey Bridge Co., 32 Okla. 31,121 P. 639; 2 Ruling Case Law, §§ 225 to 227, inclusive.
Section 951, Rev. Laws 1910, reads:
"The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the others."
Section 953, Rev. Laws 1910, reads:
"A contract must receive such an interpretation as will make it lawful, operative, definite, reasonable and capable of being carried into effect, if it can be done without violating the intention of the parties."
Applying the foregoing rule and principle to the instant case, we are of the opinion that upon proof of the execution of the contract, and the development of paying wells of gas or oil on the leases transferred by the defendant subsequent to the contract by the defendant, under the contract the plaintiff was entitled to recover the judgment awarded in the sum of $3,000.
As previously said, the evidence as to whether or not the wells on said leases in sections 14 or 15, township 20 north, range 13 east, were commercially paying wells, was in conflict, but we think there was sufficient evidence to sustain the findings of the court that the wells in question produced "gas in commercial quantities within the meaning of the contract between the parties," and that the court did not err in overruling the demurrer to the evidence.
In Loomer v. Walker, 59 Okla. 44, 157 P. 1055, it is held:
"It is a well-established rule in this jurisdiction that, where the only error assigned on appeal in a law case tried to the court is that the evidence was insufficient to support the judgment, the Supreme Court will not weigh the conflicting evidence, but, if it be found that there was any evidence reasonably tending to support the judgment, it will be affirmed."
See Pool et al. v. Burger Bros. 56 Okla. 243, 155 P. 1144.
Finding no error in the record, this cause is affirmed.
By the Court: It is so ordered. |
[Letterhead of Skadden, Arps, Slate, Meagher & Flom LLP] December 29, 2011 Delcath Systems, Inc. 810 Seventh Avenue, 35th Floor New York, NY 10019 Re: Delcath Systems, Inc. Common Stock At-the-Market Offering Program Ladies and Gentlemen: We have acted as special counsel to Delcath Systems, Inc., a Delaware corporation (the “Company”), in connection with the Company’s sale of up to an aggregate amount of $39,750,000 (the “Securities”) of common stock of the Company, par value $.01 per share (the “Common Stock”), pursuant to the Sales Agreement, dated December 29, 2011, between Cowen and Company, LLC, as agent and/or principal, and the Company (the “Sales Agreement”). The Securities were registered by the Company with the Securities and Exchange Commission (the “Commission”) on the shelf registration statement on Form S-3 (No. 333-165677) filed on March 24, 2010 by the Company with the Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”) and declared effective on April 13, 2010 (the “Registration Statement”), including the base prospectus, dated April 13, 2010, as supplemented by a prospectus supplement, dated December 29, 2011, filed by the Company with the Commission pursuant to Rule 424(b) of the General Rules and Regulations under the Securities Act (the “Rules and Regulations”). The Registration Statement relates to, among other things, the issuance and sale by the Company, from time to time pursuant to Rule 415 of the Rules and Regulations, of $100,000,000 of various securities of the Company, including Common Stock. This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act. In rendering the opinions stated herein, we have examined and relied upon the following: (i) the Registration Statement; Delcath Systems, Inc. December 29, 2011 Page 2 (ii) the Amended and Restated Certificate of Incorporation of the Company, as certified by the Secretary of the State of Delaware and as certified by the Secretary of the Company (the “Certificate of Incorporation”); (iii) the Amended and Restated By-laws of the Company, as currently in effect and as certified by the Secretary of the Company; (iv) a copy of certain resolutions of the board of directors of the Company (the “Board of Directors”), adopted on December 15, 2011, relating to the registration and sale of the Securities, as certified by the Secretary of the Company (the “Board Resolutions”); and (v) a copy of certain resolutions of the Deal Committee of the Board of Directors (the “Deal Committee”), adopted on December 28, 2011, relating to the registration and sale of the Securities, as certified by the Secretary of the Company (the “Deal Committee Resolutions”). We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents as we have deemed necessary or appropriate as a basis for the opinions stated below. In our examination, we have assumed the genuineness of all signatures, including endorsements, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photostatic copies and the authenticity of the originals of such copies. In making our examination of executed documents or documents to be executed, we have assumed that the parties thereto, other than the Company, will have been duly organized and be validly existing in good standing, had or will have the power, corporate or otherwise, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and the execution and delivery by such parties of such documents, and, as to parties other than the Company, the validity and binding effect thereof on such parties. In addition, we have assumed that the issuance and sale of the Securities do not, violate, conflict with or constitute a default under (i) any agreement or instrument to which the Company is subject (other than the Sales Agreement), (ii) any law, rule or regulation to which the Company is subject (other than Opined on Law, as defined below), (iii) any judicial or regulatory order or decree of any governmental authority (other than those under Opined on Law) or (iv) any consent, approval, license, authorization or validation of, or filing, recording or registration with, any governmental authority (other than those under Opined on Law). As to any facts relevant to the opinions stated herein that we did not independently Delcath Systems, Inc. December 29, 2011 Page 3 establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and others and of public officials. We have also assumed that, upon issuance of any of the Securities subsequent to the date hereof, the total number of shares of Common Stock of the Company issued and outstanding will not, after giving effect to the issuance of such Securities, exceed the total number of shares of Common Stock that the Company is authorized to issue under its Certificate of Incorporation in effect at such time. In addition, we have assumed that the price of the Securities will be determined in accordance with the Board Resolutions and Deal Committee Resolutions and that the Securities will be sold in excess of par value. We do not express any opinion with respect to the laws of any jurisdiction other than (i) the General Corporations Law of the State of Delaware (the “DGCL”) and (ii) the laws of the State of New York, and to the extent that judicial or regulatory orders or decrees or consents, approvals, licenses, authorizations, validations, filings, recordings or registrations with governmental authorities are relevant, to those required under such laws (all of the foregoing being referred to as “Opined on Law”). We do not express any opinion with respect to the law of any jurisdiction other than Opined on Law or as to the effect of any non-Opined on Law on the opinions stated herein. The Securities may be issued from time to time on a delayed or continuous basis, and this opinion is limited to the laws, including the rules and regulations, as in effect on the date hereof, which laws are subject to change with possible retroactive effect. Based upon the foregoing and subject to the limitations, qualifications, exceptions and assumptions stated herein, we are of the opinion that, when the Securities are registered in the Company’s share registry and delivered upon payment of the agreed-upon consideration therefor, the Securities, when issued and sold in accordance with the Sales Agreement, will be duly authorized, validly issued, fully paid and non-assessable. We hereby consent to the filing of this opinion with the Commission. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations. This opinion is expressed as of the date hereof unless otherwise expressly stated, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable laws. Very truly yours, /s/ Skadden, Arps, Slate, Meagher & Flom LLP
|
Case 3:19-cv-00290-EMC Document 26 Filed 07/03/19 Page 1 of 1
1
2
3
4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
6
7 AMERICAN CIVIL LIBERTIES UNION Case No. 19-cv-00290-EMC
FOUNDATION, et al.,
8
Plaintiffs, ORDER RE PARTIAL SUMMARY
9 JUDGMENT BRIEFING
v.
10 Docket No. 25
U.S. DEPARTMENT OF JUSTICE, et al.,
11
Defendants.
12
Northern District of California
United States District Court
13 In this FOIA action, Defendant FBI issued a “Glomar” response to parts 2(a)–(c) of
14 Plaintiffs’ request. The parties now inform the Court that Plaintiffs cannot presently
15 administratively appeal the FBI’s response to the Department of Justice’s Office of Information
16 Policy. Docket No. 25 at 6. Plaintiffs propose to resolve the dispute by means of partial summary
17 judgment. See id. The Court agrees with Plaintiffs that partial summary judgment is appropriate
18 to resolve this threshold issue and necessary to determine whether the FBI should process parts
19 2(a)–(c) of Plaintiffs’ FOIA request.
20 Accordingly, the parties are hereby ORDERED to submit by July 11, 2019 a stipulated
21 briefing schedule that follows the standard 35-day motions timeline (i.e., opposition brief due 14
22 days after motion, reply brief due 7 days after opposition brief, and hearing set for at least 14 days
23 after the reply brief). The Court rejects the FBI’s suggestion that briefing should not commence
24 until October 2019.
25 IT IS SO ORDERED.
26 Dated: July 3, 2019
27 ______________________________________
EDWARD M. CHEN
28 United States District Judge
|
Certified Public Accountants and Business Consultants August 27, 2010 Securities and Exchange Commission Washington, D.C. 20549 Commissioners: We have read Georgetown Bancorp Inc.’s statements included under Item 4.01 of its Form 8-K filed on August 27, 2010 and we agree with such statements concerning our firm. Wolf & Company, P.C.
|
Citation Nr: 0306064
Decision Date: 03/31/03 Archive Date: 04/08/03
DOCKET NO. 01-05 387 ) DATE
)
)
On appeal from the
Department of Veterans Affairs (VA) Regional Office (RO)
in Jackson, Mississippi
THE ISSUE
Entitlement to an increased rating for post-traumatic stress
disorder (PTSD), currently evaluated as 30 percent disabling.
REPRESENTATION
Appellant represented by: Veterans of Foreign Wars of
the United States
ATTORNEY FOR THE BOARD
D. M. Casula, Counsel
INTRODUCTION
The veteran had active service from December 1967 to December
1969.
This matter comes before the Board of Veterans' Appeals
(Board) from a June 2000 RO rating decision which granted an
increased rating, from 10 percent to 30 percent, for the
veteran's PTSD. He appeals for an even higher rating.
FINDING OF FACT
The veteran's PTSD is manifested by occupational and social
impairment with reduced reliability and productivity due to
various symptoms.
CONCLUSION OF LAW
The criteria for a 50 percent rating for PTSD have been met.
38 U.S.C.A. § 1155 (West 2002); 38 C.F.R. § 4.130, Diagnostic
Code 9411 (2002).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Factual Background
The veteran had active service in the Army from December 1967
to December 1969, including service in Vietnam.
By May 1991 rating decision, the RO granted service
connection for PTSD and assigned a 10 percent rating.
In March 2000 the veteran filed a claim for an increased
rating for PTSD.
On a March 2000 VA treatment note, the veteran reported
racing thoughts, not sleeping, flashbacks, episodes of
confusion, and memory lapses. He claimed he was avoiding
people and having steven06@example.com. He complained of
depression and reported symptoms of PTSD. His mood was
dysphoric, his affect labile, and he was not psychotic. The
diagnosis was PTSD and depression. A Global Assessment of
Functioning (GAF) score of 55 was assigned.
On VA examination in May 2000 the veteran reported he was on
milder medication that he had been previously, and claimed
that his past medications, including Lithium and Prozac,
would numb his senses. He gave a long history of social
aimlessness and lack of attachments. He reported his social
life was limited to his home and that he could count he
number of friends he had on one hand. He described his life
as going to work, coming back home, and then going to work
again. He had married three times, claimed he had lived with
150 women, and had maintained a relationship with his current
girlfriend for the last five years. His girlfriend complained
he was cold in his attitude towards her and showed no
compassion. He wondered why he was not able to feel love and
compassion, and reported having outbursts of anger, but
denied any physical violence. He worked in construction and
was able to get jobs readily, but was not able to stay on
them, having had jobs with 25 or 30 companies in the past
three years. He spoke with pride about his work and the
thoroughness of it. He did not like to be in social
situations at work or elsewhere. He was uncomfortable with
three or more people and his life was interrupted by spells
when he wanted to be left alone.
On mental status examination in May 2000, the veteran stared,
without looking at the examiner, but was alert, rational, and
able to communicate. His thinking was organized and goal
directed, but he thought his memory was not too good. His
concentration was good. He gave evidence that he was
preoccupied with troublesome images of war, and his emphasis
was on how these experiences have taken away his being able
to care, to feel someone else's loss, even to be concerned
with his own danger. He said his sleep pattern had been
terrible and he woke every two to three hours sweating and
would tear up his bed. His affect appeared very superficial,
and he described a lifetime of being able to break a
relationship with no feeling about doing it and leaving jobs
just on the impulse of the moment. He thought he was
steven06@example.com. He described periods of total isolation
for a week or more, and the VA examiner noted that depression
was likely part of these withdrawals, but substance abuse may
also be involved. He claimed he always had suicidal thoughts
in his mind and sometimes wished he were dead. His abstract
thinking is unimpaired, and his insight and judgment are
adequate. The diagnoses were chronic PTSD, past opioid
dependence, and alcohol abuse. A GAF score of 61 was
assigned, based on impairments in functioning, due to numbing
of his affect and preoccupation with war experiences.
In a May 2000 letter signed by two social workers at the Vet
Center, it was noted that the veteran started treatment in
November 1999. It was said that he had PTSD, and his
presenting symptoms at the time of intake included
nightmares, intrusive thoughts, low tolerance to stress,
social isolation, distrust of others, anger, hypervigilance,
and emotional numbing. He was been seen for one on one
counseling in an effort to alleviate the effects of PTSD on
his everyday life. It was noted that his post-military
history reflected significant readjustment problems and he
had been married three times, held over 100 jobs, and
occupied approximately 75 residences. He reportedly was
quick tempered and compulsive and would walk off a job if he
perceived a wrong, an injustice, or an attitude against his
person. The Vet Center clinicians concluded that the
veteran's PTSD impedes him severely in both social and
industrial areas.
By June 2000 rating decision, the RO granted an increased, 30
percent, rating for PTSD.
In a May 2001 letter from the social workers at the Vet
Center, it was noted that the veteran continued to be seen in
one on one counseling for severe PTSD. It was noted that the
veteran had significant adjustment problems since the
military, as evidenced by his frequent job turnover history
and resultant relationship difficulties. The clinicians
concluded that the veteran's PTSD presenting symptoms were
significant enough to warrant consideration for total
disability, and claimed that there was extreme social and
industrial impairment to substantiate this view.
On VA examination in March 2002 the veteran reported that he
had been married three times, and currently lived with his
girlfriend, with whom he has been with for five years and he
viewed her as his common law wife. The veteran was found to
be quite irritable, and whenever his girlfriend said anything
he told her to shut up and that he did not want to hear what
she had to say. When asked about symptoms of PTSD, the
veteran reported he had some questionable nightmares at
times. He reported he only occasionally dreamed of things
that happened to him in Vietnam. He remembered the first
fire fight he was in, but insisted that when he thought about
it, it did not make him particularly anxious. He reported he
was somewhat numb and did not get upset about anything, and
that even though he felt depressed about some of the things
that happened in Vietnam, he did not cry. He reported he was
very unemotional, and his girlfriend indicated the same,
noting that he does not show steven06@example.com. He took
Paxil, which he did not feel was helping, and took Temazepam
for sleep, but reported that he took more than he was
supposed to and still could not sleep more than two hours.
He slept more during the day because it was easier for him to
sleep. The veteran and his girlfriend reported he does
almost nothing except steven06@example.com. He lived on a houseboat
on the river and even though he used to love to fish, he did
not even go outside to fish. His girlfriend reported that
they used to like to go dancing, but now the veteran did not
want to do anything but steven06@example.com.
The veteran reported he was unemployed, but had worked as a
painter, welder, and plumber's helper. He reported he
usually left a job because he got aggravated at something and
simply would quit, but he had been fired on occasion also.
He had not worked in several months, mainly because he just
stayed at home and did not go out to get a job because he
felt so steven06@example.com. He claimed that most of the
jobs he lost because of his irritability. The veteran
admitted he had difficulty showing any affection for anyone
in his family and could not sympathize with them in any of
their losses. He reported he had no friends and almost never
went out. He said he had no pleasurable activities, and his
girlfriend reported he watched television at all times. He
reported he liked to watch a good war movie, and could watch
movies about Vietnam and it did not bother him. The VA
examiner noted that the veteran seemed proud that he was so
unemotional that he could do these things without it
bothering him particularly. He reported he had made suicide
attempts in the past when he tried to overdoes on heroin, but
he was not feeling suicidal at this time. The VA examiner
concluded that the veteran's current psychosocial functioning
was very poor.
Mental status examination revealed a fairly pleasant man who
was dressed neatly and cleanly. Initially he was somewhat
hostile, but as the interview progressed he relaxed somewhat,
was more at ease, and there was no impairment of his thought
process or communications. He denied a history of delusions
or hallucinations with the exception of a flashback in 2000
where he was seeing the heads of his buddies and friends who
had been killed. He made fairly good eye contact, interacted
fairly well, and no inappropriate behavior was sighted. His
ability to maintain his personal hygiene appeared to be
within normal limits. His sensorium was roughly intact, in
that he knew the year and month, but not the day of the
month. He complained of memory loss, but the VA examiner
suspected this was more because of his very withdrawn
behavior and not paying attention to things, rather than to
any significant dementia. No obsessive ritualistic behavior
was noted, and his rate and flow of speech was somewhat
retarded, but was not irrelevant or illogical. No panic
attacks were noted. He appeared to be depressed. Poor
impulse control was a problem in his past, but not so much
now. He had difficulty holding jobs or even continuation
treatment because he got very irritable and upset and simply
left the program.
The March 2002 VA examiner concluded that the veteran's main
problems were related primarily to his irritability, which
was due primarily to his depression and PTSD. The veteran
did have some PTSD symptoms, and was very withdrawn from
people and had marked problems with social interactions and
in dealing with his family and girlfriend. He had thoughts
of Vietnam two to three times a week, but insisted these were
not a problem for him and he did not get upset. The VA
examiner indicated that the veteran had a chronic PTSD
manifested by occasional nightmares of Vietnam, intrusive
thinking once or twice a week, very poor social interaction,
and difficulty with family life. He had difficulty being
around people and felt uncomfortable in crowds. He did not
like anyone behind him. The diagnoses were chronic PTSD with
depression, and a personality disorder. A GAF score of 50
was assigned.
On an April 2002 VA psychiatric treatment note, the veteran
reported racing thoughts, not sleeping, flashbacks, episodes
of confusion, and memory lapses. He reported symptoms of
PTSD including flashbacks, intrusive thoughts, and nightmares
about Vietnam. He reported being irritable and under a lot
of stress. His mood was dysphoric, affect was labile, and he
was not psychotic. A GAF score of 45 was assigned.
Analysis
The file shows that through correspondence, the rating
decision, the statement of the case, and a supplemental
statement of the case, the veteran has been notified of the
evidence necessary to substantiate his claim for a rating
higher than 30 percent for PTSD. He has been informed of the
respective obligations of VA and him to obtain different
types of evidence. He has been afforded VA examinations, and
identified relevant medical records have been obtained. The
Board is satisfied that the notice and duty to assist
provisions of the law have been satisfied. See 38 U.S.C.A.
§§ 5103, 5103A; 38 C.F.R. § 3.159; Quartuccio v. Principi, 16
Vet.App. 183 (2002).
Disability evaluations are determined by the application of a
schedule of ratings which is based on average impairment of
earning capacity. Separate diagnostic codes identify the
various disabilities. 38 U.S.C.A § 1155; 38 C.F.R. Part 4.
Under the rating criteria for PTSD, a 30 percent rating is
assigned for occupational and social impairment with
occasional decrease in work efficiency and intermittent
periods of inability to perform occupational tasks (although
generally functioning satisfactorily, with routine behavior,
self-care, and conversation normal), due to such symptoms as:
depressed mood, anxiety, suspiciousness, panic attacks
(weekly or less often), chronic sleep impairment, mild memory
loss (such as forgetting names, directions, recent events).
A 50 percent rating is to be assigned for occupational and
social impairment with reduced reliability and productivity
due to such symptoms as: flattened affect; circumstantial,
circumlocutory, or stereotyped speech; panic attacks more
than once a week; difficulty in understanding complex
commands; impairment of short- and long-term memory (e.g.,
retention of only highly learned material, forgetting to
complete tasks); impaired judgment; impaired abstract
thinking; disturbances of motivation and mood; difficulty in
establishing and maintaining effective work and social
relationships. A 70 percent rating is assigned when there is
occupational and social impairment, with deficiencies in most
areas, such as work, school, family relations, judgment,
thinking, or mood, due to such symptoms as: suicidal
ideation; obsessional rituals which interfere with routine
activities; speech intermittently illogical, obscure, or
irrelevant; near-continuous panic or depression affecting the
ability to function independently, appropriately and
effectively; impaired impulse control (such as unprovoked
irritability with periods of violence); spatial
disorientation; neglect of personal appearance and hygiene;
difficulty in adapting to stressful circumstances (including
work or a work-like setting); inability to establish and
maintain effective relationships. A 100 percent evaluation
requires total occupational and social impairment, due to
such symptoms as: gross impairment in thought processes or
communication; persistent delusions or hallucinations;
grossly inappropriate behavior; persistent danger of hurting
self or others; intermittent inability to perform activities
of daily living (including maintenance of minimal personal
hygiene); disorientation to time or place; memory loss for
names of close relatives, own occupation, or own name.
38 C.F.R. § 4.130, Diagnostic Code 9411.
The record shows that the veteran has had no recent
hospitalizations for PTSD, and the condition is periodically
treated on an outpatient basis. He reports various symptoms
such as irritability, impaired judgment, disturbances with
mood and motivation, and problems with social interaction.
With regard to occupational impairment, the record reflects
that he was working at the time of the 2000 VA examination,
but not at the time of the 2002 VA examination. He claims to
have worked numerous jobs over the years, and that he would
leave a job at a moments notice, and usually left a job
because he got steven06@example.com. He apparently works
construction projects or similar jobs which by their nature
are of short duration. With regard to social impairment, the
veteran had the same girlfriend for the past 5+ years and he
lived with her, but she claimed he was cold and showed no
emotion toward her. It was noted that he had trouble showing
any emotion, was withdrawn, and had marked problems with
social interactions. He reported on VA examination in 2000
that he could count his friends on one hand, and that he
mostly just steven06@example.com. In 2002 he claimed he had no
friends and almost never went out. It should be noted that
social impairment is significant only to the extent that it
affects occupational impairment. 38 C.F.R. § 4.126.
In addition to a diagnosis of PTSD, there are diagnoses of a
personality disorder and substance abuse.
The various assessments by the examiners, including assigned
GAF scores, suggest some worsening in the veteran's PTSD,
even though an examiner's classification of the level of
psychiatric impairment at the moment of examination, by words
or by a GAF score, is not determinative of the percentage
disability rating to be assigned. See 38 C.F.R. § 4.126;
VAOPGCPREC 10-95. Based on all the evidence, and with
application of the benefit-of-the-doubt rule (38 U.S.C.A.
§ 5107(b)), the Board finds that there has been worsening of
the veteran's PTSD, to the extent that it results in some
occupational and social impairment with reduced reliability
and productivity due to various symptoms, and such satisfies
the criteria for the next higher rating of 50 percent.
The Board also finds that an even higher rating of 70 for
PTSD is not warranted. The medical records do not show most
of the typical symptoms listed in the criteria for a 70
percent rating, nor are similar symptoms shown. See Mauerhan
v. Principi, 16 Vet.App. 436 (2002) (psychiatric symptoms
listed in the rating criteria are not exclusive, but are
examples of typical symptoms for the listed percentage
ratings). More importantly, it is not shown that, as a
direct result of the PTSD symptoms (and excluding non-
service-connected problems), the veteran has the degree of
occupational and social impairment for a 70 percent rating.
ORDER
An increased rating, to 50 percent, for PTSD is granted.
____________________________________________
L.W. TOBIN
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.
|
NUMBER 13-01-549-CV
COURT
OF APPEALS
THIRTEENTH
DISTRICT OF TEXAS
CORPUS
CHRISTI
IN RE: JAVIER DE LOS SANTOS
AND
TINA G. DE LOS SANTOS, Relators.
On
Petition for Writ of Mandamus
O
P I N I O N
Before
Chief Justice Valdez and Justices Hinojosa and Castillo
Opinion by Chief Justice
Valdez
This is an original proceeding
brought by Javier and Tina De Los Santos, Relators, seeking mandamus relief in
connection with a Temporary Restraining Order (TRO) issued on August 7, 2001,
by the Respondent, the Honorable Rose Reyna[1],
sitting as the presiding judge for the 92nd District Court of Hidalgo County.
The underlying case deals with the
execution of a 1997 judgment awarding money damages of $242,997.29 to the
Relators. On July 24, 2001, Texas
Property and Casualty Insurance Guaranty Association (TPCIGA), the Real Parties
in Interest, filed an application for their first TRO, and presented same to
the Honorable Homer Salinas, sitting as the presiding judge for the 92nd
District Court of Hidalgo County[2]. In that first request for TRO they sought to
enjoin the enforcement of the 1997 trial judgment. The TRO was granted, and was later extended by a subsequent ex
parte order. On August 7, 2001, the
Relators and TPCIGA appeared for the purpose of considering TPCIGA=s application for injunctive
relief and for hearing the De Los Santos= motion to dissolve the TRO. Thereupon, Judge Salinas granted the Relator=s motion to dissolve the TRO
(including the ex parte extension) and denied TPCIGA=s application for injunctive
relief. Immediately, upon dissolution
of the TRO, a Travis County Constable executed the judgment by levying on funds
in the possession of TPCIGA. Later that
same day at 5:03 p.m., TPCIGA sought another TRO from the Respondent, enjoining
enforcement of the same 1997 judgment and directing the return of Aall funds and property previously
levied.@
We stayed the TRO before it
expired by its own terms. Even if the
TRO=s expiration were not stayed, this
mandamus proceeding would not be moot.
A TRO=s expiration usually renders its
challenge moot. See Hermann Hosp.
v. Tran, 730 S.W.2d 56, 57 (Tex. App.BHouston[14th Dist.] 1987, no writ). However, we have jurisdiction to review a
challenged act that is of such short duration that review cannot be obtained
before the issue becomes moot. E.g.,
Blum v. Lanier, 997 S.W.2d 259, 264 (Tex. 1999). There must be a reasonable expectation that the same complaining
party would be subjected to the same action again. Id.; see also Spring Branch I.S.D. v. Reynolds,
764 S.W.2d 16, 18 (Tex. App.BHouston [1st Dist.] 1988, no writ).
Here, this second TRO amounts to the third extension (in light of first
TRO and subsequent ex parte extension) of time staying execution of the 1997
judgment. Furthermore, a TRO=s very nature leaves the opposing
party Alittle time to seek mandamus relief
before either complying or being held in contempt.@
In re Cornyn, 27 S.W.3d 327, 331 (Tex. App.BHouston [1st Dist.] 1999, no
pet.). Accordingly, we conclude that
the issues before us are not moot and we should address the petition=s merits. Cf. In re Cummings, 13 S.W.3d 472,
475 (Tex. App.BCorpus Christi 2000, no pet.)
(holding appeal of expired, one-year protective order not moot under Acapable of repetition yet evading
review@ and another mootness exception).
In this original mandamus
proceeding we are requested to set aside the district court=s TRO which prohibits the levying
of money damages secured from a final judgment, and orders the return of funds
previously levied. Mandamus is intended
to be an extraordinary remedy available only in limited circumstances. Walker v. Packer, 827 S.W.2d 833,
839-40 (Tex. 1992). It may, however, be
issued to set aside a lower court order that is void. Lord v. Clayton, 163 Tex. 62, 352 S.W.2d
718, 719 (Tex. 1961) (orig. proceeding).
As such, we will grant relator=s petition for mandamus only if we find that the TRO is
void.
Review
of the TRO
It is well established that the Aissuance of a temporary
restraining order, like the issuance of a temporary injunction, is to maintain
the status quo between the parties.@ Cannan v.
Green Oaks Apts., 758 S.W.2d 753, 755 (Tex. 1988); Transport Co. of
Texas v. Robertson Transports, Inc., 261 S.W.2d 549, 552 (Tex. 1953). As such, a
trial judge exceeds his authority in a TRO if he grants affirmative
relief which alters the status quo.
The standards for granting a TRO
are similar to those for granting a temporary injunction. Compare Tex. R. Civ. P. 680 with Sun Oil co. v. Whitaker, 424
S.W.2d 216, 218 (Tex. 1968). We
therefore borrow from the standards set forth in reviewing temporary
injunctions. See Williams v. Bagley,
875 S.W.2d 808, 810 (Tex. App.BBeaumont 1994, no pet.) (holding that Aa temporary restraining order is basically a writ
of injunction@). In Perry v. Stringfellow, the court held that:
AIf the effect of the granting of a
temporary injunction does more than preserve the status of the property as it had therefore existed, and
accomplishes the whole object of the suit, it would be improper for the court
to grant same, as the legitimate purpose of the temporary injunction is merely
to preserve the existing condition until a final hearing can be had on the
merits. The court is without authority
to divest a party of property rights without a trial, and any attempt to do so
is void.@
Perry v. Stringfellow, 134 Tex. 328, 331, 134 S.W.2d
1031, 1032 (Tex. 1940) (emphasis added).
In the present TRO, the order
contained language ordering the Areturn [of] all funds and property previously levied.@[3]
This language does more than preserve the status quo, it purports to
order an affirmative action from a public official to return funds back to the
real party in interest. The court was without authority to grant a TRO that
goes beyond Amerely . . . preserv[ing] the
existing condition@.
Id. Accordingly, this TRO
does more than Apreserve the status of the
property@ and is void. Id.
We conditionally grant relator=s petition for writ of mandamus
and direct the respondent to vacate the temporary restraining order issued
August 7, 2001. The writ will only
issue if respondent does not vacate the TRO.
ROGELIO VALDEZ
Chief Justice
Do not publish.
Tex. R. App. P. 47.3(b).
Opinion delivered and filed
this 20th day of September, 2001.
[1]Judge Reyna is the duly
elected judge for the 206th District Court of Hidalgo County.
[2]Judge Salinas is a retired
judge and the former elected judge of
the 92nd District Court of Hidalgo County.
[3]Real Party in Interest
argues that this handwritten insertion was his own Amute testimony@ concerning a fear of Areversed collection@ and cannot be a part of
the order because it was not initialed nor was it included in the typewritten
form. However, a trial court=s order may contain
handwritten interlineations and still have the full force and effect of an
order. Hart v. Calkins Mfg. Co.,
623 S.W.2d 451, 453 (Tex. App.BTexarkana 1981, no pet.) (stating that the Amere fact that the
instrument evidencing the judgment contains erasures or corrections does not
impugn its verity@).
|
66 P.3d 312 (2003)
2003 MT 60
In the Matter of M.R.G., Youth in Need of Care.
No. 02-586.
Supreme Court of Montana.
Submitted on Briefs January 9, 2003.
Decided March 27, 2003.
*313 Carl B. Jensen, Jr., Office of Public Defender, Great Falls, Montana, for Appellant.
Hon. Mike McGrath, Attorney General; Mark W. Mattioli, Assistant Attorney General, Helena, Montana, Brant Light, Cascade County Attorney; Gina Bishop, Deputy County, Attorney, Great Falls, Montana, for Respondent.
Chief Justice KARLA M. GRAY delivered the Opinion of the Court.
¶ 1 M.B. appeals from the findings of fact, conclusions of law and order entered by the Eighth Judicial District Court, Cascade County, terminating his parental rights to his son, M.R.G., and awarding permanent custody to the Department of Public Health and Human Services (the Department). We affirm.
¶ 2 The issue on appeal is whether the District Court abused its discretion in terminating M.B.'s parental rights.
*314 BACKGROUND
¶ 3 In July of 1998, the Department petitioned for temporary investigative authority (TIA) over M.R.G. based on allegations that he was, or was in danger of being, abused or neglected. M.R.G. is an enrolled member of the Confederated Tribes of Siletz Indians of Oregon (the Tribe). Consequently, the abuse and neglect proceeding involving M.R.G. is subject to both the Indian Child Welfare Act (ICWA), 25 U.S.C. §§ 1901, et seq., and Montana law. Pursuant to the ICWA, the Department notified the Tribe of the proceeding. The Tribe then intervened to ensure that the proceeding conformed to the requirements of the ICWA.
¶ 4 The District Court granted the Department TIA. The court subsequently adjudicated M.R.G. to be a youth in need of care and granted the Department temporary legal custody. In October of 2000, the Department petitioned to terminate the parental rights of both M.B. and M.R.G.'s mother. At the hearing on the termination petition, the Department called Martina Heavy Runner (Heavy Runner), a Department family resource specialist, as a witness. After Heavy Runner testified regarding her educational, professional and personal background, the Department requested the District Court to accept Heavy Runner as a qualified expert witness pursuant to the ICWA. M.B. objected on the basis that, although Heavy Runner had knowledge of Indian culture and customs in general, she had no specific knowledge about the Siletz Indians. The District Court overruled the objection and accepted Heavy Runner as a qualified expert witness.
¶ 5 Following the hearing, the District Court entered its findings of fact, conclusions of law and order terminating M.B.'s parental rights to M.R.G. and granting permanent legal custody to the Department. M.B. appeals.
STANDARD OF REVIEW
¶ 6 We review a district court's decision to terminate a parent's parental rights to determine whether the court abused its discretion. In re T.C., 2001 MT 264, ¶ 13, 307 Mont. 244, ¶ 13, 37 P.3d 70, ¶ 13. In doing so, we review the court's findings of fact to determine whether they are clearly erroneous and its conclusions of law to determine whether they are correct. In re T.C., ¶ 13. Furthermore, determinations regarding an expert witness's qualifications and competency are within the discretion of the trial court and will not be overturned absent a showing of abuse of that discretion. In re K.H., 1999 MT 128, ¶ 11, 294 Mont. 466, ¶ 11, 981 P.2d 1190, ¶ 11.
DISCUSSION
¶ 7 Did the District Court abuse its discretion in terminating M.B.'s parental rights?
¶ 8 Part of the express policy of the ICWA is to
protect the best interests of Indian children and to promote the stability and security of Indian tribes and families by the establishment of minimum Federal standards for the removal of Indian children from their families....
25 U.S.C. § 1902. The ICWA implements this policy by setting forth a variety of requirements which must be met before placing an Indian child in foster care or terminating parental rights to an Indian child. The specific ICWA requirement at issue in this case provides that
[n]o termination of parental rights may be ordered ... in the absence of a determination, supported by evidence beyond a reasonable doubt, including testimony of qualified expert witnesses, that the continued custody of the child by the parent or Indian custodian is likely to result in serious emotional or physical damage to the child.
25 U.S.C. § 1912(f).
¶ 9 In conformity with the above requirement, the District Court included in its order terminating M.B.'s parental rights a finding of fact that "[t]aking into account the cultural norms of the [Tribe] and their community, the conduct of [M.B.] would likely cause serious emotional or physical damage to the child if the child was returned to him." Pointing out that Heavy Runner was the only witness offered by the Departmentand accepted by the District Courtas a qualified ICWA expert witness, M.B. argues that the District *315 Court abused its discretion in accepting Heavy Runner as a qualified ICWA expert witness because she did not possess sufficient credentials. M.B. asserts, therefore, that the District Court's finding of fact is clearly erroneous because it was not based on the testimony of a qualified expert witness as required by 25 U.S.C. § 1912(f). As a result, according to M.B., the court's termination of his parental rightsbased, in part, on this purportedly erroneous findingwas an abuse of discretion.
¶ 10 The ICWA does not define the term "qualified expert witness" or otherwise provide criteria for determining whether a witness is a qualified expert for ICWA purposes. However, the United States Department of the Interior, via the Bureau of Indian Affairs, has promulgated Guidelines for State Courts; Indian Child Custody Proceedings (the Guidelines) to assist in the interpretation and application of the ICWA. See 44 Fed.Reg. 67,584 to 67,595 (1979). While the Guidelines are not binding on state courts, we previously have determined them to be persuasive, and we apply them when interpreting the ICWA. See, e.g., In re K.H., ¶ 23; In re C.H., 2000 MT 64, ¶ 12, 299 Mont. 62, ¶ 12, 997 P.2d 776, ¶ 12.
¶ 11 With regard to the ICWA's qualified expert witness requirement, the Guidelines provide as follows:
D.4. Qualified Expert Witnesses
(a) Removal of an Indian child from his or her family must be based on competent testimony from one or more experts qualified to speak specifically to the issue of whether continued custody by the parents or Indian custodians is likely to result in serious physical or emotional damage to the child.
(b) Persons with the following characteristics are most likely to meet the requirements for a qualified expert witness for purposes of Indian child custody proceedings:
(i) A member of the Indian child's tribe who is recognized by the tribal community as knowledgeable in tribal customs as they pertain to family organization and childrearing practices.
(ii) A lay expert witness having substantial experience in the delivery of child and family services to Indians, and extensive knowledge of prevailing social and cultural standards and childrearing practices within the Indian child's tribe.
(iii) A professional person having substantial education and experience in the area of his or her specialty.
44 Fed.Reg. 67,593 (1979). The parties do not dispute that Heavy Runner has no knowledge or experience pertaining to the culture and customs of the Siletz Tribe in particular and, therefore, does not qualify as an expert under either subpart (b)(i) or (ii) set forth in the above Guideline. The Department asserts, however, that Heavy Runner qualified as an expert witness under the Guideline's subpart (b)(iii).
¶ 12 In determining whether a witness qualifies as an expert under subpart (b)(iii) of the above Guideline, we have stated that, in addition to possessing "substantial education and experience in the area of his or her specialty," it is preferable that the witness possess expertise inand substantial knowledge ofIndian culture, family structure and childrearing practices. In re K.H., ¶¶ 26-28. This does not mean, however, that the witness must have knowledge of the cultural standards of a particular Indian tribe. In re K.H., ¶ 28. Moreover, while the trial court is encouraged to ensure that the witness possesses such Indian cultural knowledge and experience prior to accepting his or her testimony as a qualified ICWA expert, the determination of whether the witness is sufficiently qualified remains within the discretion of that court. In re K.H., ¶ 28.
¶ 13 In this case, Heavy Runner testified that she is a member of the Blackfeet Tribe, and was born and raised on the Blackfeet Reservation. She was taught the culture of her Tribe from tribal elders and has participated in most aspects of that culture all of her life. She completed her high school education on the Blackfeet Reservation in Browning, Montana, then went on to college, where she received an undergraduate degree in elementary education and a masters degree in business administration.
*316 ¶ 14 Heavy Runner further testified that she worked as clerk of the Blackfeet tribal court, where she worked closely with Indian families while conducting home studies and writing reports relating to the adoption and foster care placement of Indian children on the Blackfeet and other reservations. She also worked for several years as a teacher in an Indian school in Minnesota, where she was exposed to the culture of other Indian tribes. She currently is employed as a family resource specialist with the Department and works mainly with teenagers in foster care, approximately half of whom are Indian. Heavy Runner also related her knowledge of Indian family structure and childrearing practices in general. She further stated that she has been trained and certified by the Department to be a qualified ICWA expert witness, and has testified in that capacity in approximately 10 other cases.
¶ 15 Based on the record before us, we conclude the Department established that Heavy Runner had personal and professional knowledge of Indian culture, family structure and childrearing practices sufficient to qualify her as an expert witness pursuant to the ICWA and, therefore, that the District Court did not abuse its discretion in accepting Heavy Runner as a qualified ICWA expert witness. Moreover, given Heavy Runner's specific testimony that placing M.R.G. in M.B.'s care likely would result in serious emotional or physical damage in light of M.B.'s continued chemical dependency and anger management issues, we conclude the District Court's finding of fact in that regard is not clearly erroneous.
¶ 16 We hold that the District Court did not abuse its discretion in terminating M.B.'s parental rights.
¶ 17 Affirmed.
We concur: JIM RICE, PATRICIA COTTER, W. WILLIAM LEAPHART and JIM REGNIER, JJ.
|
Reversing.
The appeal is from a conviction of rape and ten years' imprisonment.
While the evidence of the prosecuting witness seems exaggerated and inconsistent in some particulars, it is positive on the main issue and has substantial corroboration. The defendant's evidence is to the effect that she *Page 72
was perfectly willing to be raped, but the act was not consummated. The issue of guilt was one for the jury.
By agreement, apparently to avoid a continuance, an affidavit was read as the evidence of Lewellyn Sizemore, an absent witness, that he had been acquainted with the prosecutrix for at least a year, and on an occasion previous to the night she testified to having been raped she had met the witness under somewhat similar circumstances and they had gone to an isolated place and she had voluntarily indulged in sexual intercourse. In rebuttal, the sheriff testified that Sizemore had been working for him and sometime after this crime is said to have been committed, Sizemore asked him who she was and he had pointed her out to him. This was essentially a contradiction of the testimony of the absent witness, introduced for the purpose of impeaching it. Section 189 of the Criminal Code of Practice, authorizes the impeachment of an absent witness "to the same extent as if he were personally present." Section 597, Civil Code of Practice, provides that a witness may be impeached by showing that he had made statements different from his present testimony. Section 598 requires that before the introduction of such evidence, the witness "must be inquired of concerning it, with the circumstances of time, place and persons present, as correctly as the examining party can present them." These sections are applicable in the trial of a criminal case. While the provision refers to statements, it is not to be too literally construed and is to be regarded as embracing any indirect contradictory statement, such as in this case. Since there was not any inquiry of the absent witness to lay the foundation for the impeaching testimony, its admission was an error which we deem in this particular case to be prejudicial to the substantial rights of the defendant. Blanton v. Commonwealth, 210 Ky. 542, 276 S.W. 507; Eason v. Commonwealth, 242 Ky. 442, 46 S.W.2d 772; Rose v. Commonwealth, 286 Ky. 53, 149 S.W.2d 772.
Wherefore the judgment is reversed. *Page 73 |
EXHIBIT 10.3
DEFERRED STOCK AGREEMENT
THIS AGREEMENT is made as of %%OPTION_DATE%-% (the “Effective Date”) between Oil
States International, Inc., a Delaware corporation (the “Company”), and
%%FIRST_NAME%-% %%LAST_NAME%-% (“Employee”).
To carry out the purposes of The 2001 Equity Participation Plan of Oil States
International, Inc. (the “Plan”), by affording Employee the opportunity to
acquire shares of common stock of the Company (“Stock”), and in consideration of
the mutual agreements and other matters set forth herein and in the Plan, the
Company and Employee hereby agree as follows:
1. Award of Deferred Stock Awards. Upon execution of this Agreement,
the Company shall issue %%TOTAL_SHARE_GRANTED,’999,999,999’%-% Deferred Stock
Awards and Dividend Equivalents to Employee. Employee acknowledges receipt of a
copy of the Plan, and agrees that this award of Deferred Stock Awards shall be
subject to all of the terms and conditions set forth herein and in the Plan,
including future amendments thereto, if any, pursuant to the terms thereof,
which Plan is incorporated herein by reference as a part of this Agreement. In
the event of any conflict between the terms of this Agreement and the Plan, the
terms of the Plan shall govern.
2. Rights attaching to Deferred Stock Awards. As used herein, the term
“Deferred Stock Award” or “DSA” shall mean a right to acquire a share in the
Company, upon the Forfeiture Restrictions contained herein being
satisfied. Until such time as the Forfeiture Restrictions cease to apply and
shares delivered to Employee, Employee shall have no rights as a shareholder of
the Company, no dividend rights, and no voting rights with respect of DSAs or
any share underlying the DSAs or issuable in respect of such DSAs until such
shares are actually issued to and held of record by the Participant. No
adjustment will be made for dividends or other rights of a holder for which the
record date is prior to the date of issuance of the stock certificate or book
entry evidencing such shares.
3. Forfeiture Restrictions. The DSAs issued to Employee pursuant to
this Agreement may not be sold, assigned, pledged, exchanged, hypothecated or
otherwise transferred, encumbered or disposed of to the extent then subject to
the Forfeiture Restrictions (as hereinafter defined), and in the event of
termination of Employee’s employment with the Company for any reason (other than
as provided below), automatically upon such termination Employee shall, for no
consideration, forfeit to the Company all DSAs to the extent then subject to the
Forfeiture Restrictions. The prohibition against transfer and the obligation to
forfeit and surrender DSAs to the Company upon termination of employment are
herein referred to as “Forfeiture Restrictions,” and the DSAs which are then
subject to the Forfeiture Restrictions are herein sometimes referred to as
“Restricted DSAs.” The Forfeiture Restrictions shall be binding upon and
enforceable against any transferee of the DSAs. The Forfeiture Restrictions
shall lapse as to DSAs issued to Employee pursuant to this Agreement as
follows: (a) with respect to 25% of the DSAs, on the first anniversary of the
Effective Date, (b) with respect to 50% of the DSAs, on the second anniversary
of the Effective Date, (c) with respect to 75% of the DSAs, on the third
anniversary of the Effective Date, and (d) with respect to 100% of the DSAs, on
the fourth anniversary of the Effective Date. Notwithstanding the foregoing,
the Forfeiture Restrictions shall lapse as to all of the DSAs on (i) the date a
Change of Control occurs or (ii) the termination of Employee’s employment due to
his death or a disability that entitles Employee to receive benefits under a
long term disability plan of the Company.
--------------------------------------------------------------------------------
4. Delivery of stock. Upon Employee remaining in continued employment
up until the Forfeiture Conditions being satisfied, the Company shall deliver to
Employee one share in the Company for each DSA that is no longer a Restricted
DSA within 30 days of the DSA ceasing to be a Restricted DSA. Upon shares being
delivered, the Company will cancel the relevant DSAs.
5. Certificates. A certificate evidencing the DSAs shall be issued by
the Company in Employee’s name.
6. Consideration. It is understood that the consideration for the
issuance of DSAs shall be Employee’s agreement to render future services to the
Company, which services shall have a value not less than the par value of the
shares deliverable in respect of such DSAs.
7. Dividend equivalents. Where the Company pays a dividend, Employee
shall receive a cash payment equivalent to the dividend paid on each share of
common stock in respect of each DSA during the period between the date each
Deferred Stock Award is granted, and the date such Deferred Stock Award is
exercised, vests or expires.
8. Withholding of Tax. To the extent that the receipt of the DSAs
and/or shares of unrestricted Stock results in compensation income to Employee
for income tax purposes, Employee shall deliver to the Company at the time of
such receipt, such amount of money or shares of unrestricted Stock as the
Company may require to meet its withholding obligation (if any) under applicable
tax laws or regulations, and, if Employee fails to do so, the Company is
authorized to withhold from any cash or Stock remuneration then or thereafter
payable to Employee any tax required to be withheld by reason of such resulting
compensation income. To the extent that the lapse of any Forfeiture
Restrictions results in compensation income to Employee for income tax purposes
and Employee has not otherwise made arrangements to satisfy its withholding
obligation (if any), the Company shall withhold from the unrestricted Stock such
shares as the Company may require to meet its withholding obligations under
applicable tax laws or regulations.
9. Status of DSAs. Employee agrees that the DSAs will not be sold or
otherwise disposed of in any manner that would constitute a violation of any
applicable federal or state securities laws. Employee also agrees (i) that the
certificates representing the DSAs may bear such legend or legends as the
Committee deems appropriate in order to ensure compliance with applicable
securities laws, (ii) that the Company may refuse to award the DSAs or register
the transfer of shares on the stock transfer records of the Company if such
proposed transfer would in the opinion of counsel satisfactory to the Company
constitute a violation of any applicable securities law and (iii) that the
Company may give related instructions to its transfer agent, if any, to stop
registration of the transfer of shares.
-2-
--------------------------------------------------------------------------------
10. Employment Relationship. For purposes of this Agreement, Employee
shall be considered to be in the employment of the Company as long as Employee
remains an employee of the Company, any parent or subsidiary entity of the
Company or any successor to any of the foregoing. Any question as to whether
and when there has been a termination of such employment, and the cause of such
termination, shall be determined by the Committee, and its determination shall
be final.
11. Committee’s Powers. No provision contained in this Agreement
shall in any way terminate, modify or alter, or be construed or interpreted as
terminating, modifying or altering any of the powers, rights or authority vested
in the Committee pursuant to the terms of the Plan, including, without
limitation, the Committee’s rights to make certain determinations and elections
with respect to the DSAs.
12. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.
13. Non-Alienation. Employee shall not have any right to pledge,
hypothecate, anticipate or assign this Agreement or the rights hereunder, except
by will or the laws of descent and distribution.
14. Not a Contract of Employment. This Agreement shall not be deemed
to constitute a contract of employment, nor shall any provision hereof affect
(a) the right of the Company to discharge Employee at will or (b) the terms and
conditions of any other agreement between the Company and Employee except as
expressly provided herein.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
16. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
an officer thereunto duly authorized, and Employee has executed this Agreement,
all effective as of the Effective Date.
OIL STATES INTERNATIONAL, INC. [image.jpg]
Cindy B. Taylor
President and Chief Executive Officer
-3- |
Citation Nr: 1343305
Decision Date: 12/30/13 Archive Date: 01/07/14
DOCKET NO. 06-34 491A ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in New Orleans, Louisiana
THE ISSUE
Entitlement to service connection for hypertension.
REPRESENTATION
Appellant represented by: Disabled American Veterans
ATTORNEY FOR THE BOARD
J. M. Kirby, Counsel
INTRODUCTION
The Veteran had active service from August 1967 to August 1968. He served in combat in Vietnam and his decorations include the Purple Heart Medal.
This matter comes before the Board of Veterans' Appeals (Board) on appeal from a January 2005 rating decision of the Department of Veterans Affairs (VA) Regional Office (RO) in New Orleans, Louisiana.
FINDING OF FACT
The Veteran's hypertension had its onset during his military service.
CONCLUSION OF LAW
Hypertension was incurred in active military service. 38 U.S.C.A. §§ 1110, 5107(b) (West 2002); 38 C.F.R. §§ 3.102, 3.303 (2013).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
Service connection may be established for a disability resulting from diseases or injuries which are clearly present in service or for a disease diagnosed after discharge from service, when all the evidence, including that pertinent to service, establishes that the disease was incurred in service. 38 U.S.C.A. § 1110; 38 C.F.R. § 3.303. Establishing service connection on a direct basis generally requires medical or, in certain circumstances, lay evidence of (1) a current disability; (2) an in-service incurrence or aggravation of a disease or injury; and (3) a nexus between the claimed in-service disease or injury and the present disability. See Davidson v. Shinseki, 581 F.3d 1313 (Fed. Cir. 2009).
Under VA regulations, the term hypertension means that the diastolic blood pressure is predominantly 90 millimeters of mercury (mm/Hg) or greater, and isolated systolic hypertension means that the systolic blood pressure is predominantly 160 mm/Hg or greater with a diastolic blood pressure of less than 90 mm/Hg. 38 C.F.R. § 4.104, Diagnostic Code 7101, Note (1) (2013).
The service treatment records do not show diagnoses or treatment for hypertension for VA purposes. However, VA and private treatment records dated more than one year after the Veteran's service separation show diagnoses and treatment for hypertension; accordingly, a current diagnosis of hypertension is of record.
The September 2004 VA examiner diagnosed essential hypertension and opined that the Veteran's hypertension was not related to military service or his service-connected diabetes, but also that his service-connected diabetes mellitus was 33.3 percent of the cause of his hypertension. Given the internal conflict in this opinion, the Board directed that the Veteran undergo a second VA examination in October 2011, at which time the examiner opined that it is not at least as likely as not that the Veteran's hypertension onset in service, was causally related to service to include as due to his alleged herbicide exposure, manifested within one year of discharge, or was otherwise caused or aggravated by the Veteran's service-connected diabetes mellitus. In so stating, the examiner cited to the absence of diagnosed hypertension or high blood pressure readings in the Veteran's service treatment records.
In its June 2013 Joint Motion for Remand, the parties determined that the October 2011 VA opinion was also insufficient because the examiner did not adequately discuss why the Veteran's hypertension was not related to herbicide exposure or the service-connected diabetes mellitus, other than to reference the lack of affirmative in-service clinical findings, or explain the relevance of the lack of evidence concerning certain diabetic complications.
Consequently, the Board requested an opinion from a VHA specialist in October 2013. That opinion was returned in November 2013, and found that the Veteran's hypertension was at least as likely as not began in service. Noting several significant blood pressure readings taken during service (including normal readings on service entrance in August 1967, but elevated readings of 140/92 and 140/70 in March 1968 as well as of 140/86, 140/90, and 140/88 in April 1968), the VHA specialist stated that the elevated systolic pressures were higher than one would expect for a man of the Veteran's age (18-20 years old) at that time, and consistent with hypertension. While recognizing that these readings did not satisfy VA's definition of hypertension according to the pertinent regulations, the examiner noted that the Veteran's blood pressure readings in service met the current medical guidelines for pre-hypertension, while others met the threshold for hypertension.
The Board finds that the November 2013 VHA specialist opinion is sufficiently probative on which to base a grant of service connection for hypertension. Indeed, even if the documented elevated blood pressure readings do not satisfy the VA regulations for hypertension, it is clear that the November 2013 VHA specialist found that the documented in-service readings constituted the onset of the disease process that was ultimately diagnosed as hypertension. Although the remaining opinions tend to contradict the November 2013 VHA specialist opinion, the Board, and the Court, have already found that they are not probative for the reasons discussed above. Accordingly, resolving any reasonable doubt in the Veteran's favor, service connection for hypertension is warranted.
ORDER
Service connection for hypertension is granted.
____________________________________________
STEVEN D. REISS
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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Case 4:18-cv-00824-O Document 27 Filed 04/09/19 Page 1 of 1 PageID 292
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
U.S. PASTOR COUNCIL, et al., §
§
Plaintiffs, §
§
§
§
§
v. § Civil Action No. 4:18-cv-00824-O
§
EQUAL EMPLOYMENT §
COMMISSION, et al., §
§
§
Defendants. §
ORDER
On Tuesday, April 9, 2019, the Court held a status conference hearing regarding the
Parties’ Joint Proposed Briefing Schedule (ECF No. 21). Accordingly, Defendants’ revised motion
to dismiss is due May 1, 2019. The response and reply briefs are due pursuant to the pertinent
deadlines set forth by the Federal Rules of Civil Procedure.
SO ORDERED on this 9th day of April, 2019.
_____________________________________
Reed O’Connor
UNITED STATES DISTRICT JUDGE
1
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Statement of Additional Information November 1, 2011 Investment Adviser: D.F. Dent and Company, Inc. 2 East Read Street Baltimore, Maryland 21202 www.dfdent.com Account Information and Shareholder Services: Attn: Transfer Agent Atlantic Fund Services P.O. Box 588 Portland, Maine 04112 +1-916-454-9627 (toll free) DF DENT MIDCAP GROWTH FUND DFDMX DF DENT PREMIER GROWTH FUND DFDPX This Statement of Additional Information (the “SAI”) supplements the Prospectus dated November 1, 2011, as it may be amended from time to time, offering shares of the DF Dent Midcap Growth Fund and DF Dent Premier Growth Fund (each a “Fund and collectively, the “Funds”), a separate portfolio of Forum Funds, a registered, open-end management investment company (the “Trust”).This SAI is not a prospectus and should only be read in conjunction with the Prospectus.You may obtain the Prospectus without charge by contacting Atlantic Fund Services (“Atlantic”) at the address or telephone number listed above.This SAI is incorporated by reference into the Funds’ Prospectus.In other words, it is legally a part of the Prospectus. Copies of the Annual Report may be obtained, when they are available, without charge and upon request, by contacting Atlantic at the address, telephone number or email address listed above. Table of Contents INVESTMENT POLICIES AND RISKS 3 A. Security Ratings Information 3 B. Equity Securities 3 C. Fixed-Income Securities 6 D. Forward Contracts 11 E. Options 11 F. Repurchase Agreements 12 G. Leverage Transactions 13 H. Illiquid and Restricted Securities 13 I. Investment Company Securities and Exchange Traded Fund ("ETFs”) 14 J. Non-Diversification 15 K. Temporary Defensive Position 15 L. Market Turbulence 15 INVESTMENT LIMITATIONS 16 BOARD OF TRUSTEES, MANAGEMENT AND SERVICE PROVIDERS 18 A. Board of Trustees 18 B. Principal Officers of the Trust 21 C. Ownership of Securities of the Adviser and Related Companies 22 D. Information Concerning Trust Committees 22 E. Compensation of Trustees and Officers 23 F. Investment Adviser 23 G. Distributor 26 H. Other Fund Service Providers 26 PORTFOLIO TRANSACTIONS 28 A. How Securities are Purchased and Sold 28 B. Commissions Paid 28 C. Adviser Responsibility for Purchases and Sales and Choosing Broker-Dealers 29 D. Counterparty Risk 29 E. Transactions through Affiliates 29 F. Other Accounts of the Adviser 29 G. Portfolio Turnover 30 H. Securities of Regular Broker-Dealers 30 I. Portfolio Holdings 30 PURCHASE AND REDEMPTION INFORMATION 31 A. General Information 31 1 B. Additional Purchase Information 31 C. Additional Redemption Information 32 TAXATION 32 A. Qualification for Treatment as a Regulated InvestmentCompany 33 B. Fund Distributions 33 C. Certain Tax Rules Applicable to Fund Transactions 34 D. Federal Excise Tax 36 E. Redemption of Shares 36 F. Backup Withholding 36 G. State and Local Taxes 37 H. Foreign Income Tax 37 OTHER MATTERS 37 A. The Trust and Its Shareholders 37 B. Fund Ownership 38 C. Limitations on Shareholders’ and Trustees’ Liablility 38 D. Proxy Voting Procedures 39 E. Code of Ethics 39 F. Registration Statement 39 G. Financial Statements 39 APPENDIX A – DESCRIPTION OF SECURITIES RATINGS A-1 APPENDIX B - MISCELLANEOUS TABLES B-1 APPENDIXC – PROXY VOTING PROCEDURES C-1 APPENDIX D -ADVISER VOTING PROCEDURES D-1 2 INVESTMENT POLICIES AND RISKS The DF Dent Midcap Growth Fund (the “Midcap Growth Fund”) is a nondiversified series of the Trust, a Delaware statutory trust.The DF Dent Premier Growth Fund (the “Premier Growth Fund”) is a diversified series of the Trust. This section supplements, and should be read in conjunction with, the Funds’ Prospectus.The following are descriptions of permitted investments and investment practices of the Funds and the associated risks.Each Fund will invest in any of the following instruments or engage in any of the following investment practices if such investment or practice is consistent with thatFund’s investment objective.Please see the Prospectus for a discussion of each Fund’s investment objective, principal investment strategies and principal risks of investing in a Fund. A. Security Ratings Information Moody’s, S&P and other organizations provide ratings of the credit quality of debt obligations, including convertible securities. A description of the range of ratings assigned to various types of convertible securities is included in Appendix A to this SAI. The Funds may use these ratings to determine whether to purchase, sell or hold a security. Ratings are general and are not absolute standards of quality. Securities with the same maturity, interest rate and rating may have different market prices. If an issue of securities ceases to be rated or if its rating is reduced after it is purchased by a Fund, D.F. Dent and Company, Inc., the Funds’ investment adviser (“D.F. Dent” or the “Adviser”) will determine whether the Fund should continue to hold the obligation. To the extent that a rating changes as a result of changes in an organization or its rating system, the Adviser will attempt to substitute comparable ratings. Credit ratings attempt to evaluate the safety of principal and interest payments and do not evaluate the risks of fluctuations in market value. The rating of an issuer is a view of potential developments related to the issuer and may not necessarily reflect actual outcomes. An issuer’s current financial condition may be better or worse than a rating indicates. The Funds’ investments in fixed-income, preferred and convertible securities are subject to credit risk relating to the financial condition of the issuers of the securities that a Fund holds. To limit credit risk, the Funds may only invest in convertible securities that are considered investment grade. Investment grade securities are rated in the top four long-term rating categories or the two highest short-term rating categories or are unrated and determined by the Adviser to be of comparable quality. The Funds may purchase unrated convertible securities if, at the time of purchase, the Adviser believes that they are of comparable quality to rated securities that the Funds may purchase. Unrated securities may not be as actively traded as rated securities. The lowest ratings that are investment grade for corporate bonds, including convertible bonds, are “Baa” in the case of Moody’s and “BBB” in the case of S&P and Fitch; for preferred stock the lowest ratings are “Baa” in the case of Moody’s and “BBB” in the case of S&P. Each Fund may invest up to 5% of its total assets in non-investment grade debt securities. Non-investment grade debt securities (commonly known as “junk bonds”) have significant speculative characteristics and generally involve greater volatility of price than investment grade securities. Unrated securities may not be as actively traded as rated securities. Each may retain securities whose rating has been lowered below the lowest permissible rating category (or that are unrated and determined by the Adviser to be of comparable quality to securities whose rating has been lowered below the lowest permissible rating category) if the Adviser determines that retaining such security is in the best interests of a Fund. Because a downgrade often results in a reduction in the market price of the security, sale of a downgraded security may result in a loss. B. Equity Securities 1. General Common and Preferred Stock. Each Fund may invest in common and preferred stock. Common stock represents an equity (ownership) interest in a company, and usually possesses voting rights and earns dividends. Dividends on common stock are not fixed but are declared at the discretion of the issuer. Common stock generally represents the riskiest investment in a company. In addition, common stock generally has the greatest appreciation and depreciation potential because increases and decreases in earnings are usually reflected in a company’s common stock price. Preferred stock is a class of stock having a preference over common stock as to the payment of dividends or the recovery of investment should a company be liquidated, or both, although preferred stock is usually junior to the debt 3 securities of the issuer. Preferred stock typically does not possess voting rights and its market value may change based on changes in interest rates. Convertible Securities. Each Fund may invest in convertible securities. Convertible securities include debt securities, preferred stock or other securities that may be converted into or exchanged for a given amount of common stock of the same or a different issuer during a specified period and at a specified price in the future. A convertible security entitles the holder to receive interest on debt or the dividend on preferred stock until the convertible security matures or is redeemed, converted or exchanged. Convertible securities rank senior to common stock in a company’s capital structure but are usually subordinated to comparable nonconvertible securities. Convertible securities have unique investment characteristics in that they generally: (1) have higher yields than the underlying common stocks, but lower yields than comparable non-convertible securities; (2) are less subject to fluctuation in value than the underlying common stocks since they have fixed-income characteristics; and (3) provide the potential for capital appreciation if the market price of the underlying common stock increases. A convertible security may be subject to redemption at the option of the issuer at a price established in the convertible security’s governing instrument. If a convertible security is called for redemption, the Fund will be required to permit the issuer to redeem the security, convert it into the underlying common stock or sell it to a third party. Warrants and Rights. Each Fund may invest in warrants. Warrants are securities, typically issued with preferred stock or bonds, that give the holder the right to purchase a given number of shares of common stock at a specified price and time. The price usually represents a premium over the applicable market value of the common stock at the time of the warrant’s issuance. Warrants have no voting rights with respect to the common stock, receive no dividends and have no rights with respect to the assets of the issuer. Each Fund will limit its purchases of warrants to not more than 10% of the value of its total assets. Each Fund may also invest up to 10% of its total assets in stock rights. A stock right is an option given to a shareholder to buy additional shares at a predetermined price during a specified time. American Depositary Receipts. Each Fund may invest in depositary receipts, including sponsored and unsponsored American Depositary Receipts (“ADRs”). ADRs typically are issued by a U.S. bank or trust company, evidence ownership of underlying securities issued by a foreign company and are designed for use in U.S. securities markets. The Funds may invest in ADRs in order to obtain exposure to foreign securities markets. Real Estate Investment Trusts. Each Fund may invest in Real Estate Investment Trusts (“REIT”).REITs are companies that (1) own, manage, or lease commercial real estate; (2) invest in loans for real estate development or securities backed by real estate (i.e., mortgage-backed securities); or (3) finance loans for real estate development. A REIT does not pay Federal income tax on income it generates or earns if certain requirements are satisfied including (1) the REIT invests at least 75% of its total assets in real property and (2) the REIT distributes at least 90% of its income as a dividend to shareholders. Foreign Securities. Each Fund may invest in foreign securities, which may be denominated in foreign currencies. Investments in the securities of foreign issuers may involve risks in addition to those normally associated with investments in the securities of U.S. issuers. 2. Risks Common and Preferred Stock. The fundamental risk of investing in common and preferred stock is the risk that the value of the stock might decrease. Stock values fluctuate in response to the activities of an individual company or in response to general market and/or economic conditions. Historically, common stocks have provided greater long-term returns and have entailed greater short-term risks than preferred stocks, fixed-income and money market investments. The market value of all securities, including common and preferred stocks, is based upon the market’s perception of value and not necessarily the book value of an issuer or other objective measures of a company’s worth. If you invest in a Fund, you should be willing to accept the risks of the stock market and should consider an investment in the Fund only as a part of your overall investment portfolio. 4 Convertible Securities. Investment in convertible securities generally entails less risk than an investment in the issuer’s common stock. Convertible securities are typically issued by smaller capitalized companies whose stock price may be volatile. Therefore, the price of a convertible security may reflect variations in the price of the underlying common stock in a way that nonconvertible debt does not. The extent to which such risk is reduced, however, depends in large measure upon the degree to which the convertible security sells above its value as a fixed-income security. Warrants and Rights. Investments in warrants involve certain risks, including the possible lack of a liquid market for the resale of the warrants, potential price fluctuations due to adverse market conditions or other factors and failure of the price of the common stock to rise. If the warrant is not exercised within the specified time period, it becomes worthless. Depositary Receipts. Unsponsored depositary receipts may be created without the participation of the foreign issuer. Holders of these receipts generally bear all the costs of the depositary receipt facility, whereas foreign issuers typically bear certain costs in a sponsored depositary receipt. The bank or trust company depository of an unsponsored depositary receipt may be under no obligation to distribute shareholder communications received from the foreign issuer or to pass through voting rights. Accordingly, available information concerning the issuer may not be current and the prices of unsponsored depositary receipts may be more volatile than the prices of sponsored depositary receipts. Real Estate Investment Trust. Investments in REITs involve certain risks including real estate risk, diversification risk, interest rate/prepayment risk, and credit risk. Specifically, changes in the real estate market may affect the value of the real estate in which a REIT directly or indirectly invests and, thus, the profitability of the REIT. Additionally, a REIT’s portfolio may not be diversified to include a variety of investment property types or properties located in a variety of geographical regions. Accordingly, economic changes may have a greater effect on a REIT’s profitability than on an alternative investment that invests in a number of different types of investments and issues located in a variety of geographical locations. A change in interest rates may also affect the value of the real estate in which a REIT directly or indirectly invests. Specifically, an increase in interest rates may cause the value of a REIT’s investment in real estate loans or securities backed by real estate to decline. Alternatively, a decline in interest rates may affect a REIT’s yield if the loans or real estate related securities in which the REIT invests are prepaid requiring the REIT to invest in loans or real estate related securities with lower yields. Finally, with respect to a REIT’s financing of real estate loans and investment in loans or other real estate backed securities, there is the risk that the debtor on a loan or the issuer of the real estate backed security will be unable to make timely payments of interest or principal or to otherwise honor its obligations. Foreign Securities. All foreign investments are subject to risks of: (1) foreign political and economic instability; (2) adverse movements in foreign exchange rates; (3) the imposition or tightening of exchange controls or other limitations on repatriation of foreign capital; and (4) changes in foreign governmental attitudes towards private investment, including potential nationalization, increased taxation or confiscation of a Fund’s assets. In addition, interest and dividends payable on foreign securities may be subject to foreign withholding taxes, thereby reducing the income available for distribution to you. Some foreign brokerage commissions and custody fees are higher than those in the U.S. Foreign accounting, auditing and financial reporting standards differ from those in the U.S. and, therefore, less information may be available about foreign companies than is available about issuers of comparable U.S. companies. Foreign securities also may trade less frequently and with lower volume and may exhibit greater price volatility than U.S. securities. Changes in foreign exchange rates will affect the U.S. dollar value of all foreign currency-denominated securities held by a Fund. Exchange rates are influenced generally by the forces of supply and demand in the foreign currency markets and by numerous other political and economic events occurring outside the U.S., many of which may be difficult, if not impossible, to predict. Income from foreign securities will be received and realized in foreign currencies and each Fund is required to compute and distribute income in U.S. dollars. Accordingly, a decline in the value of a particular foreign currency against the U.S. dollar after a Fund’s income has been earned and computed in U.S. dollars may require the Fund to liquidate portfolio securities to acquire sufficient U.S. dollars to make a distribution. Similarly, if the exchange rate 5 declines between the time a Fund incurs expenses in U.S. dollars and the time such expenses are paid, the Fund may be required to liquidate additional foreign securities to purchase the U.S. dollars required to meet such expenses. C. Fixed-Income Securities 1. General U.S. Government Securities. Each Fund may invest in U.S. Government Securities.U.S. Government Securities include:(1) U.S. Treasury obligations (which differ only in their interest rates and maturities), (2) obligations issued or guaranteed by U.S. Government agencies and instrumentalities that are backed by the full faith and credit of the U.S. Government (such as securities issued by the Federal Housing Administration (“FHA”), Government National Mortgage Association (“GNMA”), the Department of Housing and Urban Development, the Export-Import Bank, the General Services Administration and the Maritime Administration and certain securities issued by the FHA and the Small Business Administration) and (3) securities that are guaranteed by agencies or instrumentalities of the U.S. Government but are not backed by the full faith and credit of the U.S. Government (such as the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”) or the Federal Home Loan Banks).These U.S. Government-sponsored entities, which although chartered and sponsored by Congress, are not guaranteed nor insured by the U.S. Government.They are supported by the credit of the issuing agency, instrumentality or corporation.The range of maturities of U.S. Government Securities is usually three months to thirty years.In general, the U.S. Government Securities tend to carry more interest rate risk than corporate bonds with similar maturities. In September 2008, the U.S. Treasury and the Federal Housing Finance Agency (“FHFA”) announced that Fannie Mae and Freddie Mac had been placed in conservatorship.Since that time, Fannie Mae and Freddie Mac have received significant capital support through U.S. Treasury preferred stock purchases, as well as Treasury and Federal Reserve purchases of their mortgage backed securities (“MBS”).The FHFA and the U.S. Treasury (through its agreement to purchase Freddie Mac and Fannie Mae preferred stock) have imposed strict limits on the size of their mortgage portfolios.While the MBS purchase programs ended in 2010, the U.S. Treasury continues its support for the entities’ capital as necessary to prevent a negative net worth through at least 2012.While the U.S. Treasury is committed to offset negative equity at Freddie Mac and Fannie Mae through its preferred stock purchases through 2012, no assurance can be given that any Federal Reserve, U.S. Treasury, or FHFA initiatives will ensure that Freddie Mac and Fannie Mae will remain successful in meeting their obligations with respect to the debt and mortgage-backed securities they issue beyond that date. In addition, the problems faced by Fannie Mae and Freddie Mac, resulting in their being placed into federal conservatorship and receiving significant U.S. Government support, have sparked serious debate among federal policy makers regarding the continued role of the U.S. Government in providing liquidity for mortgage loans.The Obama Administration produced a report to Congress on February 11, 2011, outlining a proposal to wind down Fannie Mae and Freddie Mac by increasing their guarantee fees, reducing their conforming loan limits (the maximum amount of each loan they are authorized to purchase), and continuing progressive limits on the size of their investment portfolio.Serious discussions among policymakers continue, however, as to whether Freddie Mac and Fannie Mae should be nationalized, privatized, restructured, or eliminated altogether.Fannie Mae and Freddie Mac also are the subject of several continuing legal actions and investigations over certain accounting, disclosure or corporate governance matters, which (along with any resulting financial restatements) may continue to have an adverse effect on the guaranteeing entities.Importantly, the future of Freddie Mac and Fannie Mae is in serious question as the U.S. Government considers multiple options. Each Fund may also invest in separated or divided U.S. Government Securities.These instruments represent a single interest, or principal, payment on a U.S. Government Security that has been separated from all the other interest payments as well as the security itself.When the Fund purchases such an instrument, it purchases the right to receive a single payment of a set sum at a known date in the future.The interest rate on such an instrument is determined by the price the Fund pays for the instrument when it purchases the instrument at a discount under what the instrument entitles the Fund to receive when the instrument matures.The amount of the discount the Fund will receive will depend upon the length of time to maturity of the separated U.S. Government Security and prevailing market interest rates when the separated U.S. Government Security is purchased.Separated U.S. Government Securities can be considered zero coupon investments because no payment is made to the Fund until maturity.The market values 6 of these securities are much more susceptible to change in market interest rates than income-producing securities.These securities are purchased with original issue discount and such discount is includable as gross income to a Fund shareholder over the life of the security. Each Fund may also purchase certificates not issued by the U.S. Department of the Treasury, which evidence ownership of future interest, principal or interest and principal payments on obligations issued by the U.S. Department of the Treasury.The actual U.S. Treasury securities will be held by a custodian on behalf of the certificate holder.These certificates are purchased with original issue discount and are subject to greater fluctuations in market value, based upon changes in market interest rates, than income-producing securities. Corporate Debt Obligations. Each Fund may invest in corporate debt obligations. Corporate debt obligations include corporate bonds, debentures, notes, commercial paper and other similar corporate debt instruments. These instruments are used by companies to borrow money from investors. The issuer pays the investor a fixed or variable rate of interest and must repay the amount michael03@example.com. Commercial paper (short-term unsecured promissory notes) is issued by companies to finance their current obligations and normally has a maturity of less than 9 months. Each Fund may also invest in corporate debt securities registered and sold in the U.S. by foreign issuers (Yankee bonds) and those sold outside the U.S. by foreign or U.S. issuers (Eurobonds). Mortgage-Backed Securities. Each Fund may invest in mortgage-backed securities. Mortgage-backed securities represent interests in a pool of mortgage loans originated by lenders such as commercial banks, savings associations and mortgage bankers and brokers. Mortgage-backed securities may be issued by governmental or government-related entities or by non-governmental entities such as special purpose trusts created by commercial lenders. Pools of mortgages consist of whole mortgage loans or participations in mortgage loans. The majority of these loans are made to purchasers of 1-4 family homes. The terms and characteristics of the mortgage instruments are generally uniform within a pool but may vary among pools. For example, in addition to fixed-rate, fixed-term mortgages, each Fund may purchase pools of adjustable-rate mortgages, growing equity mortgages, graduated payment mortgages and other types. Mortgage poolers apply qualification standards to lending institutions, which originate mortgages for the pools as well as credit standards and underwriting criteria for individual mortgages included in the pools. In addition, many mortgages included in pools are insured through private mortgage insurance companies. Mortgage-backed securities differ from other forms of debt securities, which normally provide for periodic payment of interest in fixed amounts with principal payments at maturity or on specified call dates. Most mortgage-backed securities, however, are pass-through securities, which means that investors receive payments consisting of a pro-rata share of both principal and interest (less servicing and other fees), as well as unscheduled prepayments, as loans in the underlying mortgage pool are paid off by the borrowers. Additional prepayments to holders of these securities are caused by prepayments resulting from the sale or foreclosure of the underlying property or refinancing of the underlying loans. As prepayment rates of individual pools of mortgage loans vary widely, it is not possible to predict accurately the average life of a particular mortgage-backed security. Although mortgage- backed securities are issued with stated maturities of up to forty years, unscheduled or early payments of principal and interest on the mortgages may shorten considerably the securities’ effective maturities. Privately Issued Mortgage-Backed Securities.Each Fund may invest in privately issued mortgage-backed securities.Mortgage-backed securities offered by private issuers include pass-through securities consisting of pools of conventional residential mortgage loans; mortgage-backed bonds, which are considered to be debt obligations of the institution issuing the bonds and are collateralized by mortgage loans; and bonds and collateralized mortgage obligations that are collateralized by mortgage-backed securities issued by GNMA, Fannie Mae or Freddie Mac by pools of conventional mortgages of multi-family or of commercial mortgage loans. Privately-issued mortgage-backed securities generally offer a higher rate of interest (but greater credit and interest rate risk) than securities issued by U.S. Government issuers because there are no direct or indirect governmental guarantees of payment. Many non-governmental issuers or servicers of mortgage-backed securities guarantee or provide insurance for timely payment of interest and principal on the securities. The market for privately-issued mortgage-backed securities is smaller and less liquid than the market for mortgage-backed securities issued by U.S. government issuers. Stripped Mortgage-Backed Securities. Each Fund may invest in stripped mortgage-backed securities. Stripped mortgage-backed securities are multi-class mortgage-backed securities that are created by separating the securities 7 into their principal and interest components and selling each piece separately. Stripped mortgage-backed securities are usually structured with two classes that receive different proportions of the interest and principal distributions in a pool of mortgage assets. Collateralized Obligations. Each Fund may invest in collateralized mortgage obligations (“CMOs”) that are collateralized by mortgage-backed securities issued by GNMA, Fannie Mae or Freddie Mac (“Mortgage Assets”). CMOs are multiple-class debt obligations.Payments of principal and interest on the Mortgage Assets are passed through to the holders of the CMOs as they are received, although certain classes (often referred to as “tranches”) of CMOs have priority over other classes with respect to the receipt of mortgage prepayments.Each tranch is issued at a specific or floating coupon rate and has a stated maturity or final distribution date.Interest is paid or accrues in all tranches on a monthly, quarterly or semi-annual basis.Payments of principal and interest on Mortgage Assets are commonly applied to the tranches in the order of their respective maturities or final distribution dates, so that generally, no payment of principal will be made on any tranch until all other tranches with earlier stated maturity or distribution dates have been paid in full.The Fund also may invest in collateralized debt obligations (“CDOs”), which include collateralized bond obligations (“CBOs”), collateralized loan obligations (“CLOs”) and other similarly structured securities. CBOs and CLOs are types of asset-backed securities. A CBO is a trust which is backed by a diversified pool of high risk, below investment grade fixed-income securities. A CLO is a trust typically collateralized by a pool of loans, which may include, among others, domestic and foreign senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans. For both CBOs and CLOs, the cash flows from the trust are split into two or more portions, called tranches, varying in risk and yield. The riskiest portion is the “equity” tranche which bears the bulk of defaults from the bonds or loans in the trust and serves to protect the other, more senior tranches from default in all but the most severe circumstances. Since it is partially protected from defaults, a senior tranche from a CBO trust or CLO trust typically have higher ratings and lower yields than their underlying securities, and can be rated investment grade. Despite the protection from the equity tranche, CBO or CLO tranches can experience substantial losses due to actual defaults, increased sensitivity to defaults due to collateral default and disappearance of protecting tranches, market anticipation of defaults, as well as aversion to CBO or CLO securities as a class. The risks of an investment in a CDO depend largely on the type of the collateral securities and the class of the CDO in which a Fund invests. Normally, CBOs, CLOs and other CDOs are privately offered and sold, and thus, are not registered under the securities laws. As a result, investments in CDOs may be characterized by a Fund as illiquid securities; however an active dealer market may exist for CDOs allowing a CDO to qualify for Rule 144Atransactions. In addition to the normal risks associated with fixed-income securities discussed elsewhere in the SAI and the Prospectus (e.g., interest rate risk and default risk), CDOs carry additional risks including, but are not limited to: (1) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (2) the quality of the collateral may decline in value or default; (3) the Fund may invest in CDOs that are subordinate to other classes; and (4) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results. Asset-backed Securities. Each Fund may invest in asset-backed securities. Asset-backed securities have structural characteristics similar to mortgage- backed securities but have underlying assets that are not mortgage loans or interests in mortgage loans. Asset- backed securities represent fractional interests in, or are secured by and payable from, pools of assets such as motor vehicle installment sales contracts, installment loan contracts, leases of various types of real and personal property and receivables from revolving credit (for example, credit card) agreements. Assets are securitized through the use of trusts and special purpose corporations that issue securities that are often backed by a pool of assets representing the obligations of a number of different parties. Repayments relating to the assets underlying the asset-backed securities depend largely on the cash flows generated by such assets. The credit quality of most asset-backed securities depends primarily on the credit quality of the assets underlying such securities, how well the entity issuing the security is insulated from the credit risk of the originator or any other affiliated entities, and the amount and quality of any credit enhancements associated with the securities. Payments or distributions of principal and interest on asset-backed securities may be supported by credit enhancements including letters of credit, an insurance guarantee, reserve funds and over collateralization. Asset-backed securities have structures and characteristics similar to those of mortgage-backed securities and, accordingly, are subject to many of the same risks, although often, to a greater extent. 8 Variable Amount Master Demand Notes. Variable amount master demand notes are unsecured demand notes that permit investment of fluctuating amounts of money at variable rates of interest pursuant to arrangements with issuers who meet certain quality criteria. All variable amount master demand notes acquired by a Fund will be payable within a prescribed notice period not to exceed seven days. Non-U.S. Dollar Denominated Securities. Each Fund may invest in non-U.S. dollar denominated securities including debt obligations denominated in foreign or composite currencies (such as the European Currency Unit) issued by (1) foreign national, provincial, state or municipal governments or their political subdivisions; (2) international organizations designated or supported by governmental entities (e.g., the World Bank and the European Community); (3) non-dollar securities issued by the U.S. Government; and (4) foreign corporations. High-Yield or "Junk" Bonds. Junk bonds are debt securities that are rated below investment grade by a nationally recognized statistical rating organization or are the equivalent. The Funds define high-yield bonds to include: bank loans, fixed, variable floating rate and deferred interest debt obligations; mortgage-backed and asset-backed debt obligations provided they are rated below investment grade or the equivalent. 2. Risks General Risks. The market value of the interest-bearing debt securities held by a Fund will be affected by changes in interest rates. There is normally an inverse relationship between the market value of securities sensitive to prevailing interest rates and actual changes in interest rates. The longer the remaining maturity (and duration) of a security, the more sensitive the security is to changes in interest rates. All debt securities, including U.S. Government Securities, can change in value when there is a change in interest rates. Changes in the ability of an issuer to make payments of interest and principal and in the markets’ perception of an issuer’s creditworthiness will also affect the market value of that issuer’s debt securities. As a result, an investment in a Fund is subject to risk even if all debt securities in a Fund’s investment portfolio are paid in michael03@example.com. In addition, certain debt securities may be subject to extension risk, which refers to the change in total return on a security resulting from an extension or abbreviation of the security’s maturity. Yields on debt securities are dependent on a variety of factors, including the general conditions of the debt securities markets, the size of a particular offering, the maturity of the obligation and the rating of the issue. Under normal conditions, debt securities with longer maturities tend to offer higher yields and are generally subject to greater price movements than obligations with shorter maturities. The issuers of debt securities are subject to the provisions of bankruptcy, insolvency and other laws affecting the rights and remedies of creditors that may restrict the ability of the issuer to pay, when due, the principal of and interest on its debt securities. Bankruptcy, litigation or other conditions may impair an issuers’ ability to pay, when due, the principal of and interest on its debt securities. Credit Risk. The Funds’ investments in a debt securities are subject to the credit risk relating to the financial condition of the issuer of the debt security. Mortgage-Backed Securities. The value of mortgage-backed securities may be significantly affected by changes in interest rates, the markets’ perception of issuers, the structure of the securities and the creditworthiness of the parties involved. The ability of a Fund to successfully utilize mortgage-backed securities depends in part upon the ability of the Adviser to forecast interest rates and other economic factors correctly. Some mortgage-backed securities have structures that make their reaction to interest rate changes and other factors difficult to predict. Prepayments of principal of mortgage-backed securities by mortgagors or mortgage foreclosures affect the average life of the mortgage-backed securities. The occurrence of mortgage prepayments is affected by various factors, including the level of interest rates, general economic conditions, the location and age of the mortgages and other social and demographic conditions. In periods of rising interest rates, the prepayment rate tends to decrease, lengthening the average life of a pool of mortgage-backed securities. In periods of falling interest rates, the prepayment rate tends to increase, shortening the average life of a pool. The volume of prepayments of principal on the mortgages underlying a particular mortgage-backed security will influence the yield of that security, affecting a 9 Fund’s yield. Because prepayments of principal generally occur when interest rates are declining, it is likely that the Fund, to the extent it retains the same percentage of debt securities, may have to reinvest the proceeds of prepayments at lower interest rates than those of their previous investments. If this occurs, aFund’s yield will correspondingly decline. Thus, mortgage-backed securities may have less potential for capital appreciation in periods of falling interest rates (when prepayment of principal is more likely) than other debt securities of comparable duration, although they may have a comparable risk of decline in market value in periods of rising interest rates. A decrease in the rate of prepayments may extend the effective maturities of mortgage-backed securities, reducing their sensitivity to changes in market interest rates. To the extent that a Fund purchases mortgage-backed securities at a premium, unscheduled prepayments, which are made at par, result in a loss equal to an unamortized premium. To lessen the effect of the failures by obligors on Mortgage Assets to make payments, CMOs and other mortgage-backed securities may contain elements of credit enhancement, consisting of either (1) liquidity protection or (2) protection against losses resulting after default by an obligor on the underlying assets and allocation of all amounts recoverable directly from the obligor and through liquidation of the collateral. This protection may be provided through guarantees, insurance policies or letters of credit obtained by the issuer or sponsor from third parties, through various means of structuring the transaction or through a combination of these. The Fund will not pay any additional fees for credit enhancements for mortgage-backed securities, although the credit enhancement may increase the costs of the mortgage-backed securities. Asset-Backed Securities. Like mortgages-backed securities, the collateral underlying asset-backed securities are subject to prepayment, which may reduce the overall return to holders of asset-backed securities. Asset-backed securities present certain additional and unique risks. Primarily, these securities do not always have the benefit of a security interest in collateral comparable to the security interests associated with mortgage-backed securities. Credit card receivables are generally unsecured and the debtors are entitled to the protection of a number of state and federal consumer credit laws, many of which give such debtors the right to set-off certain amounts owed on the credit cards, thereby reducing the balance due. Automobile receivables generally are secured by automobiles. Most issuers of automobile receivables permit the loan servicers to retain possession of the underlying obligations. If the servicer were to sell these obligations to another party, there is a risk that the purchaser would acquire an interest superior to that of the holders of the asset-backed securities. In addition, because of the large number of vehicles involved in a typical issuance and the technical requirements under state laws, the trustee for the holders of the automobile receivables may not have a proper security interest in the underlying automobiles. As a result, the risk that recovery on repossessed collateral might be unavailable or inadequate to support payments on asset-backed securities is greater for asset-backed securities than for mortgage-backed securities. In addition, because asset-backed securities are relatively new, the market experience in these securities is limited and the market’s ability to sustain liquidity through all phases of an interest rate or economic cycle has not been tested. Junk Bonds. Securities rated below investment grade, i.e. Ba or BB and lower, are subject to greater risk of loss of principal and interest than higher rated securities and are considered to be predominantly speculative with respect to the issuer's capacity to pay interest and repay principal, which may in any case decline during sustained periods of deteriorating economic conditions or rising interest rates. They are also generally considered to be subject to greater market risk than higher rated securities in times of deteriorating economic conditions. In addition, lower rated securities may be more susceptible to real or perceived adverse economic and competitive industry conditions than investment grade securities, although the market values of securities rated below investment grade and comparable unrated securities tend to react less to fluctuations in interest rate levels than do those of higher rated securities. The market for lower rated securities may be thinner and less active than that for higher rated securities, which can adversely affect the prices at which these securities can be sold. To the extent that there is no established secondary market for lower rated securities, the portfolio may experience difficulty in valuing such securities and, in turn, the Portfolio's assets. In addition, adverse publicity and investor perceptions about lower rated securities, whether or not based on fundamental analysis, may tend to decrease the market value and liquidity of such lower rated securities. 10 D. Forward Contracts General. Each Fund may conduct foreign currency exchange transactions either on a spot (cash) basis at the spot rate prevailing in the foreign exchange market or by entering into a forward foreign currency contract. A forward foreign currency contract (“forward contract”) involves an obligation to purchase or sell a specific amount of a specific currency at a future date, which may be any fixed number of days (usually less than one year) from the date of the contract agreed upon by the parties, at a price set at the time of the contract. Forward contracts are considered to be “derivatives”—financial instruments whose performance is derived, at least in part, from the performance of another asset (such as a security, currency or an index of securities). A Fund enters into forward contracts in order to “lock in” the exchange rate between the currency it will deliver and the currency it will receive for the duration of the contract. In addition, each Fund may enter into forward contracts to hedge against risks arising from securities the Fund owns or anticipates purchasing, or the U.S. dollar value of interest and dividends paid on those securities. Each Fund does not intend to enter into forward contracts on a regular or continuing basis. Each Fund will not have more than 10% of its total assets committed to forward contracts or maintain a net exposure to forward contracts that would obligate the Fund to deliver an amount of foreign currency in excess of the value of the portfolio’s investment securities or other assets denominated in that currency. If a Fund makes delivery of the foreign currency at or before the settlement of a forward contract, it may be required to obtain the currency through the conversion of assets of the Fund into the currency. Each Fund may close out a forward contract obligating it to purchase a foreign currency by selling an offsetting contract, in which case it will realize a gain or a loss. Risks. Foreign currency transactions involve certain costs and risks. A Fund incurs foreign exchange expenses in converting assets from one currency to another. Forward contracts involve a risk of loss if the Adviser is inaccurate in its prediction of currency movements. The projection of short-term currency market movements is extremely difficult, and the successful execution of a short- term hedging strategy is highly uncertain. The precise matching of forward contract amounts and the value of the securities involved is generally not possible. Accordingly, it may be necessary for a Fund to purchase additional foreign currency if the market value of the security is less than the amount of the foreign currency the Fund is obligated to deliver under the forward contract and the decision is made to sell the security and make delivery of the foreign currency. The use of forward contracts as a hedging technique does not eliminate fluctuations in the prices of the underlying securities a Fund owns or intends to acquire, but it does fix a rate of exchange in advance. Although forward contracts can reduce the risk of loss due to a decline in the value of the hedged currencies, they also limit any potential gain that might result from an increase in the value of the currencies. There is also the risk that the other party to the transaction may fail to deliver currency when due which may result in a loss to a Fund. E. Options 1. General Options. Each Fund may purchase or write options on securities in which it may invest or on market indices based in whole or in part on such securities. Options purchased or written by a Fund must be traded on an exchange or over-the-counter. Options are considered to be derivatives. Use of these instruments is subject to regulation by the SEC, exchanges on which options are traded, or by the U.S. Commodity Futures Trading Commission (“CFTC”). Each Fund may purchase or write put and call options to: (1) enhance the Fund’s performance; or (2) to hedge against a decline in the value of securities owned by the Fund or an increase in the price of securities that the Fund plans to purchase. Currently, the Funds have no intention of investing in options for purposes other than hedging. No assurance can be given that any hedging or income strategy will achieve its intended result. Segregated Assets. The Adviser, to the extent required by applicable rules or guidelines, will designate and maintain, in a segregated account, or on the books and records of the each Fund, cash and liquid securities. The value of these assets, as marked to market daily, will be at least equal to each Fund’s commitments under these transactions. Options on Securities. A call option is a contract under which the purchaser of the call option, in return for a premium paid, has the right to buy the security (or index) underlying the option at a specified price at any time during the term of the option. The writer of the call option, who receives the premium, has the obligation upon exercise of the option to deliver the underlying security against payment of the exercise price. A put option gives its purchaser, in return for a premium, the right to sell the underlying security at a specified price during the term of the option. The writer of the put, who receives the premium, has the obligation to buy, upon exercise of the option, the underlying 11 security (or a cash amount equal to the value of the index) at the exercise price. The amount of a premium received or paid for an option is based upon certain factors including the market price of the underlying security, the relationship of the exercise price to the market price, the historical price volatility of the underlying security, the option period and interest rates. Options on Stock Indices. A stock index assigns relative values to the stock included in the index, and the index fluctuates with changes in the market values of the stocks included in the index. Stock index options operate in the same way as the more traditional options on securities except that stock index options are settled exclusively in cash. Thus, upon exercise of stock index options, the purchaser will realize and the writer will pay an amount based on the differences between the exercise price and the closing price of the stock index. Options on Futures. Options on futures contracts are similar to options on securities except that an option on a futures contract gives the purchaser the right, in return for the premium paid, to assume a position in a futures contract rather than to purchase or sell a security, at a specified exercise price at any time during the period of the option. Upon exercise of the option, the delivery of the futures position to the holder of the option will be accompanied by transfer to the holder of an accumulated balance representing the amount by which the market price of the futures contract exceeds, in the case of a call, or is less than, in the case of a put, the exercise price of the option on the future. The Trust, on behalf of the Funds, has filed a notice with the National Futures Association claiming exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act and therefore the Funds are not subject to registration or regulation as a commodity pool operator under that Act. Options on Foreign Currency. Options on foreign currency operate in the same way as more traditional options on securities except that currency options are settled exclusively in the currency subject to the option. The value of a currency option is dependent upon the value of the currency relative to the U.S. dollar and has no relationship to the investment merits of a foreign security. Because foreign currency transactions occurring in the interbank market involve substantially larger amounts than those that may be involved in the use of foreign currency options, a Fund may be disadvantaged by having to deal in an odd lot market (generally consisting in transactions of less than $1 million) for the underlying currencies at prices that are less favorable than round lots. To the extent that the U.S. options markets are closed while the market for the underlying currencies are open, significant price and rate movements may take place in the underlying markets that cannot be reflected in the options markets. 2. Risks There are certain investment risks associated with options transactions. These risks include: (1) dependence on the Adviser’s ability to predict movements in the prices of individual securities and fluctuations in the general securities markets; (2) imperfect correlation between movements in the prices of options and movements in the price of the securities (or indices) hedged or used for cover which may cause a given hedge not to achieve its objective; (3) the fact that the skills and techniques needed to trade these instruments are different from those needed to select the securities in which a Fund invests; and (4) lack of assurance that a liquid secondary market will exist for any particular instrument at any particular time, which, among other things, may hinder a Fund’s ability to limit exposures by closing its positions. The potential loss to a Fund from investing in certain types of futures transactions is unlimited. Other risks include the inability of a Fund, as the writer of covered call options, to benefit from any appreciation of the underlying securities above the exercise price, and the possible loss of the entire premium paid for options purchased by the Fund. There is no assurance that a counterparty in an over-the-counter option transaction will be able to perform its obligations. Each Fund’s activities in options markets may result in higher portfolio turnover rates and additional brokerage costs, which could reduce a Fund’s yield. F. Repurchase Agreements General. Each Fund may enter into repurchase agreements. Repurchase agreements are transactions in which a Fund purchases securities from a bank or securities dealer and simultaneously commits to resell the securities to the bank or dealer at an agreed-upon date and at a price reflecting a market rate of interest unrelated to the purchased security. 12 During the term of a repurchase agreement,a Fund’s custodian, subcustodian or tri-party custodian maintains possession of the purchased securities and any underlying collateral, which is maintained at not less than 100% of the repurchase price. Repurchase agreements allow a Fund to earn income for periods as short as overnight, while retaining the flexibility to pursue longer-term investments. Risks. Repurchase agreements involve credit risk. In the event that bankruptcy, insolvency or similar proceedings are commenced against a counterparty, a Fund may have difficulties in exercising its rights to the underlying securities. A Fund may incur costs and expensive time delays in disposing of the underlying securities and it may suffer a loss. Failure by the other party to deliver a security or currency purchased or lent by a Fund may result in a missed opportunity to make an alternative investment. Favorable insolvency laws that allow a Fund, among other things, to liquidate the collateral held in the event of the bankruptcy of the counterparty reduce counterparty insolvency risk with respect to repurchase agreements. Each Fund will only enter a repurchase agreement with a seller that the Adviser believes presents minimal credit risk. G. Leverage Transactions 1. Borrowing General.Each Fund may not borrow money if, as a result, outstanding borrowings would exceed 33 1/3% of total assets.In addition, each Fund may not purchase or acquire any security when total borrowings exceed 5% of its total assets. 2. When-Issued Securities General. Each Fund may purchase securities offered on a when-issued or delayed-delivery basis. When these transactions are negotiated, the price, which is generally expressed in yield terms, is fixed at the time the commitment is made, but delivery and payment for the securities take place at a later date. Normally, the settlement date occurs within a certain period of time after the transaction, but delayed settlements beyond that period may be negotiated. During the period between a commitment and settlement, no payment is made for the securities purchased by the purchaser and thus, no interest accrues to the purchaser from the transaction. At the time a Fund makes the commitment to purchase securities on a when-issued or delayed-delivery basis, the Fund will record the transaction as a purchase and thereafter reflect the value each day of such securities in determining its net asset value. Risks. At the time a Fund makes a commitment to purchase securities in this manner, the Fund immediately assumes the risk of ownership, including the risk that the value of the security may decline. The use of when-issued transactions enables a Fund to protect against anticipated changes in interest rates and prices, but may also increase the volatility of the Fund’s asset value per unit. Failure by a counterparty to deliver a security purchased by a Fund on a when-issued or delayed-delivery basis may result in a loss to the Fund or a missed opportunity to make an alternative investment. 3. Short Sales General. In a standard short sale, the Midcap GrowthFund borrows a security from a broker, sells it and maintains the proceeds of the transaction in its brokerage account; the broker charges the Midcap Growth Fund interest during the period over which the security is on loan to the Midcap Growth Fundand the Midcap Growth Fund closes out the short sale by purchasing the security in the open market at market price. Risks. If the proceeds received by the Midcap Growth Fund from the short sale (less interest charges) were to exceed the amount paid for the security in the open market, the Midcap Growth Fund would experience a gain on the transaction. If the proceeds received from the short sale (less interest charges) were less than the amount paid for the security in the open market, the Midcap Growth Fund would incur a loss on the transaction. H. Illiquid and Restricted Securities Each Fund may not invest more than 15% of its net assets in illiquid and restricted securities.The Premier Growth Fund has a non-fundamental limitation pursuant to which it may not invest more than 15% of its net assets in illiquid securities.The term “illiquid securities” means securities that cannot be disposed of within seven days in the ordinary course of business at approximately the amount at which the Fund has valued the securities. Illiquid securities 13 include: (1) repurchase agreements not entitling the holder to payment of principal within seven days; (2) purchased over-the-counter options; (3) securities which are not readily marketable; and (4) except as otherwise determined by the Adviser, securities that are illiquid by virtue of restrictions on the sale of such securities to the public without registration under the Securities Act of 1933, as amended, including the rules and regulations as promulgated thereunder(“1933 Act”)(each, sometimes called Restricted Securities). A liquid market exists for certain Restricted Securities and the Adviser, pursuant to policies approved by the Board, may determine that certain Restricted Securities are not illiquid. Risks. Limitations on resale may have an adverse effect on the marketability of a Restricted Security and a Fund also might have to register a Restricted Security in order to dispose of it, resulting in expense and delay.A Fund might not be able to dispose of Restricted Securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemption requests.There can be no assurance that a liquid market will exist for any Restricted Security at any particular time.Any security, including securities determined by the Adviser to be liquid, can become illiquid. Rule 144A Securities Risk.Rule 144A securitiesmay be less liquid investments than registered securities because such securities may not be readily marketable in broad public markets.A Rule 144A security carries the risk that a Fund may not be able to sell the security when the portfolio manager considers it desirable to do so or that a Fund may have to sell the security at a lower price than that which would be available if the security were more liquid. In addition, transaction costs may be higher for 144A securities than for more liquid securities. Although there is a substantial institutional market for Rule 144A securities, it is not possible to predict exactly how the market for Rule 144A securities will develop. Determination of Liquidity. The Board of Trustees of the Trust (the “Board”) has the ultimate responsibility for determining whether specific securities are liquid or illiquid and has delegated the function of making determinations of liquidity to the Adviser, pursuant to guidelines approved by the Board. The Adviser determines and monitors the liquidity of the portfolio securities and reports periodically on its decisions to the Board. The Adviser takes into account a number of factors in reaching liquidity decisions, including but not limited to: (1) the frequency of trades and quotations for the security; (2) the number of dealers willing to purchase or sell the security and the number of other potential buyers; (3) the willingness of broker-dealers to undertake to make a market in the security; and (4) the nature of the marketplace trades, including the time needed to dispose of the security, the method of soliciting offers and the mechanics of the transfer. An institutional market has developed for certain restricted securities. Accordingly, contractual or legal restrictions on the resale of a security may not be indicative of the liquidity of the security. If such securities are eligible for purchase by institutional buyers in accordance with Rule 144A under the 1933 Act or other exemptions, the Adviser may determine that the securities are liquid. I. Investment Company Securities and Exchange Traded Fund (“ETFs”) 1. Open-End and Closed-End Investment Companies and ETFs General. Each Fund may invest in shares of open-end and closed-end investment companies, consistent with the Fund’s investment objectives and strategies. Each Fund may also invest in money market mutual funds, pending investment of cash balances. The Fund will limit its investment in the securities of other investment companies to the extent permitted by the 1940 Act, as amended (the “1940 Act”). Each Fund’s investment in other investment companies may include money market mutual funds. Each Fund may invest in ETFs (which may, in turn, invest in equities, bonds, and other financial vehicles). ETFs are investment companies whose shares are bought and sold on a securities exchange. An ETF typically holds a portfolio of securities designed to track a particular market segment or index. Some examples of ETFs are SPDRs®, streetTRACKS®, DIAMONDSSM, NASDAQ 100 Index Tracking StockSM (“QQQsSM”) iShares® and VIPERs®. Each Fund may purchase an ETF to gain exposure to a portion of the U.S. or foreign market. 14 Each Fund may also invest in exchange-traded notes (“ETNs”), which are similar to ETFs in that they may be designed to provide returns that track an index; ETNs are different from ETFs, however, in one important respect. ETNs are not secured by an underlying pool of assets, but rather are notes (or debt securities) secured only by the ability of the issuer to pay. Risks. Each Fund, as a shareholder of another investment company (including any ETF), will bear its pro-rata portion of the other investment company’s fees and expenses, in addition to its own fees and expenses. In addition, it will be exposed to the investment risks associated with the other investment company, which generally reflect the risks of the underlying securities. To the extent that a Fund invests in open-end or closed-end companies that invest primarily in the common stock of companies located outside the U.S., it may be subject to the risks related to foreign securities set forth in the section entitled “Investment Policies and Risks – Foreign Securities” above. As a shareholder, each Fund must rely on the investment company to achieve its investment objective. If the investment company or another investment company fails to achieve its investment objective, the value of a Fund's investment will decline, adversely affecting the Fund’s performance. Investments in ETFs are also subject to brokerage and other trading costs, which could result in greater expenses to a Fund and lack of liquidity in an ETF could result in its market price being more volatile than the underlying portfolio of securities. In addition, because ETFs are listed on national stock exchanges and are traded like stocks listed on an exchange, ETF shares potentially may trade at a discount or a premium to the ETF’s NAV. Finally, because the value of ETF shares depends on the demand in the market, the Adviser may not be able to liquidate the Fund's holdings at the most optimal time, adversely affecting a Fund's performance. Further, as debt securities of an issuer, ETN shares are subject to the same risks described for “Corporate Debt Obligations” above. 2. Core and Gateway® Each Fund may seek to achieve its investment objective by converting to a Core and Gateway structure. A Fund operating under a Core and Gateway structure holds, as its only investment, shares of another investment company having substantially the same investment objective and policies. The Board will not authorize conversion to a Core and Gateway structure if it would materially increase costs to a Fund’s shareholders. The Board will not convert a Fund to a Core and Gateway structure without notice to the shareholders. The Board may authorize future investments in other securities not listed in the SAI. J. Non-Diversification The Midcap Growth Fund is non-diversified and, therefore, may invest in a limited number of issuers. Investing in a limited number of issuers may cause the Midcap Growth Fund to be more volatile and increase the risk of investing in the Midcap Growth Fund. K. Temporary Defensive Position Each Fund may invest in prime quality money market instruments, pending investment of cash balances. Each Fund may also assume a temporary defensive position and may invest without limit in prime quality money market instruments. Prime quality instruments are those instruments that are rated in one of the two highest short-term rating categories or, if not rated, determined by the Adviser to be of comparable quality. Appendix A summarizes the short-term ratings of several organizations that rate issuers, including Moody’s and S&P. Money market instruments usually have maturities of one year or less and fixed rates of return. The money market instruments in which each Fund may invest include short-term U.S. Government Securities, commercial paper, bankers’ acceptances, certificates of deposit, interest-bearing savings deposits of commercial banks, repurchase agreements concerning securities in which each Fund may invest and money market mutual funds. L. Market Turbulence The greatest risk of investing in a mutual fund is that its returns will fluctuate and you could lose money.Turbulence in the financial sector may result in an unusually high degree of volatility in the financial markets.Both domestic and foreign equity markets have experienced significant volatility and turmoil, with issuers that have exposure to the real 15 estate, mortgage and credit markets particularly affected.It is uncertain whether or for how long these conditions could occur. Reduced liquidity in credit and fixed-income markets may adversely affect many issuers worldwide.This reduced liquidity may result in less money being available to purchase raw materials, goods and services from emerging markets, which may, in turn, bring down the prices of these economic staples.It may also result in emerging market issuers having more difficulty obtaining financing, which may, in turn, cause a decline in their stock prices.These events and possible market turbulence may have an adverse effect on the Funds. INVESTMENT LIMITATIONS The Trust, on behalf of the Funds, has adopted the following fundamental investment policies that may not be changed without the affirmative vote of a majority of the outstanding voting securities of each Fund, as defined by the 1940 Act.As defined by the 1940 Act, a “vote of a majority of the outstanding voting securities of the Fund” means the affirmative vote of the lesser of (1) more than 50% of the outstanding shares of the Fund or (2) 67% or more of the shares present at a meeting, if more than 50% of the outstanding shares are represented at the meeting in person or by proxy. The Midcap Growth Fund’s investment objective is a non-fundamental policy and may be changed by the Board without shareholder approval. The Premier Growth Fund’s investment objective is a fundamental policy and may not be changed by the Board without shareholder approval. For purposes of the following limitations, all percentage limitations apply immediately after a purchase or initial investment.Except with respect to borrowing money, if a percentage limitation is adhered to at the time of the investment, a later increase or decrease in the percentage resulting from any change in value or net assets will not result in a violation of such restrictions.If at any time the Fund’s borrowings exceed its limitations due to a decline in net assets, such borrowings will be reduced within three days (excluding Sundays and holidays) to the extent necessary to comply with the limitation. A. Fundamental Limitations The Funds have adopted the following investment limitations that cannot be changed by the Board without shareholder approval. Each Fund may not: 1. Borrowing Borrow money if, as a result, outstanding borrowings would exceed an amount equal to 33 1/3% of the Fund’s total assets. 2. Concentration The Midcap Growth Fund may not purchase a security if, as a result, more than 25% of the Midcap Growth Fund’s total assets would be invested in securities of issuers conducting their principal business activities in the same industry. For purposes of this limitation, there is no limit on: (1) investments in U.S. Government Securities or in repurchase agreements covering U.S. Government Securities; or (2) investments in issuers domiciled in a single jurisdiction. The Premier Growth Fund may not purchase a security if, as a result, more than 25% of the Premier Growth Fund‘s total assets would be invested in securities of issuers conducting their principal business activities in the same industry. For purposes of this limitation, there is no limit on: (1) investments in U.S. Government Securities, in repurchase agreements covering U.S. Government Securities, in tax-exempt securities issued by the states, territories or possessions of the United States (“municipal securities”) or in foreign government securities; or (2) investments in issuers domiciled in a single jurisdiction. Notwithstanding anything to the contrary, to the extent permitted by the 16 1940 Act, the Premier Growth Fund may invest in one or more investment companies provided that the Premier Growth Fund treats the assets of the investment companies in which it invests as its own for purposes of this policy. 3. Underwriting Activities Underwrite securities issued by other persons except to the extent that in connection with the disposition of portfolio securities the Fund may be deemed to be an underwriter. 4. Making Loans Make loans to other parties. For purposes of this limitation, entering into repurchase agreements, lending securities and acquiring any debt security are not deemed to be the making of loans. 5. Purchases and Sales of Real Estate Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Fund from investing in securities backed by real estate or securities of companies engaged in the real estate business). 6. Purchases and Sales of Commodities Purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Fund from purchasing or selling options and futures contracts or from investing in securities or other instruments backed by physical commodities). 7. Issuance of Senior Securities Issue any senior security (as defined in the 1940 Act), except that: (1) the Fund may engage in transactions that may result in the issuance of senior securities to the extent permitted under applicable regulations and interpretations of the 1940 Act or an exemptive order; (2) the Fund may acquire securities to the extent otherwise permitted by its investment policies, the acquisition of which may result in the issuance of a senior security, to the extent permitted under applicable regulations or interpretations of the 1940 Act; and (3) subject to the restrictions set forth above, the Fund may borrow money as authorized by the 1940 Act. 8. Diversification The Premier Growth Fund may not: With respect to 75% of its assets, purchase a security (other than a U.S. Government Security or security of an investment company) if, as a result: (1) more than 5% of the Premier Growth Fund’s total assets would be invested in the securities of a single issuer; or (2) the Premier Growth Fund would own more than 10% of the outstanding voting securities of a single issuer. B. Non-Fundamental Limitations The Premier Growth Fund has adopted the following non-fundamental investment limitations that may be changed by the Board without shareholder approval. The Premier Growth Fund may not: 1. Borrowing Purchase or otherwise acquire any security if the total of borrowings would exceed 5% of the value of its total assets. 2. Investments in Other Investment Companies Invest in the securities of any investment company except to the extent permitted by the 1940 Act. 17 3. ShortSales Sell securities short, unless it owns or has the right to obtain securities equivalent in kind and amount to the securities sold short (short sales “against the box”), and provided that options transactions are not deemed to constitute selling securities short. 4. Illiquid Securities Invest more than 15% of its net assets in illiquid assets such as: (1) securities that cannot be disposed of within seven days at their then-current value; (2) repurchase agreements not entitling the holder to payment of principal within seven days; and (3) restricted securities that are not readily marketable. The Premier Growth Fund may treat certain restricted securities as liquid pursuant to guidelines adopted by the Board. 5. Purchases on Margin Purchase securities on margin, except that the Premier Growth Fund may use short-term credit for the clearance of the Premier Growth Fund’s transactions, and provided that initial and variation margin payments in connection with futures contracts and options on futures contracts shall not constitute purchasing securities on margin. 6. Exercise Control of Issuers Make investments for the purpose of exercising control of an issuer. Investments by the Premier Growth Fund in entities created under the laws of foreign countries solely to facilitate investment in securities in that country will not be deemed the making of investments for the purpose of exercising control. BOARD OF TRUSTEES, MANAGEMENT AND SERVICE PROVIDERS A. Board of Trustees The Trust is governed by its Board of Trustees.The Board is responsible for and oversees the overall management and operations of the Trust and the Funds, which includes the general oversight and review of the Funds’ investment activities, in accordance with federal law, Delaware law and the stated policies of the Funds.The Board oversees the Trust’s officers and service providers, including the Adviser, who is responsible for the management of the day-to-day operations of the Funds based on policies and agreements reviewed and approved by the Board.In carrying out these responsibilities, the Board regularly interacts with and receives reports from senior personnel of service providers and the Trust’s Chief Compliance Officer (“CCO”).The Board also is assisted by the Trust’s independent auditor (who reports directly to the Trust’s Audit Committee), independent counsel and other experts as appropriate, all of whom are selected by the Board. Board Structure and Related Matters.Trustees who are not interested persons of the Trust, as that term is defined in Section 2(a)(19) of the 1940 Act (“Independent Trustees”), constitute at least two-thirds of the Board members.J. Michael Parish, an Independent Trustee, serves as Independent Chair of the Board.The Independent Chair’s responsibilities include: setting an agenda for each meeting of the Board; presiding at all meetings of the Board and Independent Trustees; and serving as a liaison with other trustees, the Trust’s officers, other management personnel and counsel to the Funds.The Independent Chair shall perform such other duties as the Board may from time to time determine. The trustees discharge their responsibilities collectively as a Board, as well as through Board committees, each of which operates pursuant to a charter or procedures approved by the Board that delineates the specific responsibilities of that committee.The Board has established four standing committees: the Audit Committee, the Nominating Committee, the Valuation Committee and the Qualified Legal Compliance Committee.The members and responsibilities of each Board committee are summarized on pages 22 and 23. The Board periodically evaluates its structure and composition as well as various aspects of its operations.The Board believes that its leadership structure, including its Independent Chair position and its committees, is appropriate for the Trust in light of, among other factors, the asset size and nature of the Funds, the number of funds overseen by the 18 Board, the arrangements for the conduct of the Funds’ operations, the number of trustees, and the Board’s responsibilities.On an annual basis, the Board conducts a self-evaluation that considers, among other matters, whether the Board and its committees are functioning effectively and whether, given the size and composition of the Board and each if its committees, the trustees are able to oversee effectively the number of funds in the complex. The Board holds four regularly scheduled in-person meetings and schedules four telephonic meetings each year.The Board may hold special meetings, as needed, either in person or by telephone, to address matters arising between regular meetings.The Independent Trustees also hold at least one in-person meeting each year during a portion of which management is not present and may hold special meetings, as needed, either in person or by telephone. The Trustees are identified in the table below, which provides information as to their principal business occupations held during the last five years and certain other information.Each Trustee serves until his or her death, resignation or removal and replacement.The address for all Trustees is c/o Atlantic Fund Administration, LLC, Three Canal Plaza, Suite 600, Portland, Maine, 04101.John Y. Keffer is considered an interested trustee due to his affiliation with Atlantic Fund Administration, LLC (d/b/a Atlantic Fund Services). Name and Year of Birth Position with the Trust Length of Time Served Principal Occupation(s) During Past 5 Years Number of Series of Trust Overseen By Trustee Other Directorships Held by Trustee Independent Trustees J. Michael Parish Born: 1943 Chairman of the Board; Trustee; Chairman, Nominating Committee and Qualified Legal Compliance Committee Since 1989 (Chairman since 2004) Retired since 2003. 23 0 Costas Azariadis Born: 1943 Trustee; Chairman, Valuation Committee Since 1989 Professor of Economics, Washington University since 2006; Professor of Economics, University of California-Los Angeles 1992-2006. 23 0 James C. Cheng Born: 1942 Trustee; Chairman, Audit Committee Since 1989 President, Technology Marketing Associates (marketing company for small- and medium-sized businesses in New England) since 1991. 23 0 David Tucker Born: 1958 Trustee Since 2011 Director, Blue Sky Experience, Kansas City Mo. since 2008, Senior Vice President & General Counsel, American Century Companies 1998-2008. 23 0 19 Name and Year of Birth Position with the Trust Length of Time Served Principal Occupation(s) During Past 5 Years Number of Series of Trust Overseen By Trustee Other Directorships Held by Trustee Interested Trustee John Y. Keffer1 Born: 1942 Trustee; Vice Chairman Since 1989 Chairman, Atlantic since 2008; President, Forum Foundation (a charitable organization) since 2005; President, Forum Trust, LLC (a non-depository trust company chartered in the State of Maine) since 1997. 23 Director, Wintergreen Fund, Inc. 1 Atlantic is a subsidiary of Forum Holdings Corp. I, a Delaware corporation that is wholly owned by Mr. Keffer. In addition to the information set forth in the table above, each trustee possesses other relevant qualifications, experience, attributes or skills.The following provides additional information about these qualifications and experience. J. Michael Parish:Mr. Parish has experience as a business attorney and long-time member of a law firm; service on the board of the foundation Hackensack Riverkeeper, Inc., and a private university; and multiple years of service as a trustee and as Independent Chair. Mr. Parish also served as a trustee of Monarch Funds, a Massachusetts business trust and open-end management investment company, from 2003 to 2009. Costas Azariadis:Mr. Azariadis has extensive experience with finance and economics, having served as a professor of economics at various top universities and a member of the various committees of the governing body of universities; and multiple years of service as a trustee. Mr. Azariadis also served as a trustee of Monarch Funds from 2003 to 2009. James C. Cheng:Mr. Cheng has organizational experience as chairman and chief executive officer of a private marketing company; experience as a co-founder of an information technology firm; experience as a consultant; and multiple years of service as a trustee. Mr. Cheng also served as a trustee of Monarch Funds from 2003 to 2009. David Tucker: Mr. Tucker has extensive experience in the investment management industry, including experience in senior management, legal and compliance roles at two large mutual fund complexes; service on various committees of the Investment Company Institute ("ICI"); and director of ICI Mutual (a mutual insurance company sponsored by the investment company industry), including service as chairman of the underwriting, risk and fraud committees of ICI Mutual's board of directors. Mr. Tucker also serves as a director of two charitable organizations in the metropolitan Kansas City area. John Y. Keffer:Mr. Keffer has extensive experience in the investment management industry, including organizational experience as chairman and chief executive officer of a fund service provider; and multiple years of service as a trustee. Mr. Keffer also served as a trustee of Monarch Funds from 2003 to 2009 and continues to serve as an independent director of Wintergreen Fund, Inc., another open-end managementinvestment company. Risk Oversight.Consistent with its responsibility for oversight of the Trust and the Funds, the Board oversees the management of risks relating to the administration and operation of the Trust and the Funds.The Adviser, as part of its responsibilities for the day-to-day operations of the Funds, is responsible for day-to-day risk management.The Board, in the exercise of its reasonable business judgment, also separately considers potential risks that may impact the Funds.The Board performs this risk management oversight directly and, as to certain matters, through its 20 committees (described above) and through the Independent Trustees.The following provides an overview of the principal, but not all, aspects of the Board’s oversight of risk management for the Trust and the Funds. In general, the Funds’ risks include, among others, investment risk, valuation risk, compliance risk and operational risk.The Board has adopted, and periodically reviews, policies and procedures designed to address these and other risks to the Trust and the Fund.In addition, under the general oversight of the Board, the Adviser and other service providers have themselves adopted a variety of policies, procedures and controls designed to address particular risks.Different processes, procedures and controls are employed with respect to different types of risks.Further, the Adviser oversees and regularly monitors the investments, operations and compliance of the Funds’ investments. The Board also oversees risk management for the Trust and the Funds through review of regular reports, presentations and other information from officers of the Trust and other persons.Senior officers of the Trust, senior officers of the Adviser and the Trust’s CCO regularly report to the Board on a range of matters, including those relating to risk management.In this regard, the Board periodically receives reports regarding other service providers to the Trust, either directly or through the CCO.On at least a quarterly basis, the Independent Trustees meet with the CCO to discuss matters relating to the Funds’ compliance program.Further, at least annually, the Board receives a report from the CCO regarding the effectiveness of the Funds’ compliance program. The Board also regularly receives reports from the Adviser with respect to the investments and securities trading of the Funds.For example, typically, the Board receives reports, presentations and other information from the Adviser on at least an annual basis in connection with the Board’s consideration of the renewal of the Funds’ Advisory Agreement with the Adviser.Also, if applicable, the Board receives reports from the Adviser and other service providers in connection with the Board’s consideration of the renewal of any distribution plan of the Funds under Rule 12b-1 under the 1940 Act.Senior officers of the Trust and senior officers of the Adviser also report regularly to the Valuation and Audit Committees on valuation matters, internal controls and accounting and financial reporting policies and practices.In addition, the Audit Committee receives regular reports from the Trust’s independent auditors on internal control and financial reporting matters. Trustee Ownership in the Funds and Other Series of the Trust. Trustees Dollar Range of Beneficial Ownership in each Fund as of December 31, 2010 Aggregate Dollar Range of Ownership as of December 31, 2010 in all Registered Investment Companies Overseen by Trustee in the Trust Midcap Growth Fund2 Premier Growth Fund Independent Trustees J. Michael Parish None $50,001-$100,000 Over $100,000 Costas Azariadis None None None James C. Cheng None None None David Tucker None None None Interested Trustee John Y. Keffer None None $10,001-$50,000 2The Midcap Growth Fund commenced operations on July 1, 2011. Accordingly, no trustee owned shares of the Midcap Growth Fund as of December 31, 2010. B. Principal Officers of the Trust The officers of the Trust conduct and supervise its daily business.As of the date of this SAI, the officers of the Trust, their year of birth, their business address and their principal occupations during the past five years are as set forth below.Unless otherwise indicated, the address of each officer is c/o Atlantic Fund Services, Three Canal Plaza, Suite 600, Portland, Maine 04101. 21 Name and Year of Birth Position with the Trust Length of Time Served Principal Occupation(s) During Past 5 Years Stacey E. Hong Born: 1966 President; Principal Executive Officer Since 2008 President, Atlantic since 2008; Director, Consulting Services, Foreside Fund Services, 2007. Karen Shaw Born: 1972 Treasurer; Principal Financial Officer Since 2008 Senior Manager, Atlantic since 2008; Section Manager/Vice President, Enterprise Support Services, Citigroup, 2003-2008. David Faherty Born: 1970 Vice President Since 2009 Senior Counsel, Atlantic since 2009; Vice President, Citi Fund Services Ohio, Inc., 2007-2009; Associate Counsel, Investors Bank & Trust Co., 2006-2007. Michael J. McKeen Born: 1971 Vice President Since 2009 Senior Manager, Atlantic since 2008; Vice President, Citigroup, 2003-2008. Joshua LaPan Born: 1973 Vice President Since 2009 Manager, Atlantic since 2008; Vice President, Citigroup, 2003-2008. Timothy Bowden Born: 1969 Vice President Since 2009 Manager, Atlantic since 2008; Vice President, Citigroup, 2005-2008. Lina Bhatnagar Born: 1971 Secretary Since 2008 Senior Administration Specialist, Atlantic since 2008; Regulatory Administration Specialist, Citigroup, 2006-2008. C. Ownership of Securities of the Adviser and Related Companies As of December 31, 2010, no Independent Trustee (or any of his immediate family members) owned beneficially or of record securities of any Trust investment adviser, its principal underwriter, or any person (other than a registered investment company) directly or indirectly controlling, controlled by or under common control with any Trust investment adviser or principal underwriter. D. Information Concerning Trust Committees Audit Committee.The Trust’s Audit Committee, which meets when necessary, consists of Messrs. Azariadis, Cheng, Tucker and Parish, constituting all of the Independent Trustees.Pursuant to a charter adopted by the Board, the Audit Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting practices of the Trust.It is directly responsible for the appointment, termination, compensation and oversight of work of the independent auditors to the Trust.In so doing, the Committee reviews the methods, scope and results of the audits and audit fees charged and reviews the Trust’s internal accounting procedures and controls.During the fiscal year ended June 30, 2011, the Audit Committee met four times. Nominating Committee.The Trust’s Nominating Committee, which meets when necessary, consists of Messrs. Azariadis, Cheng, Tucker and Parish, constituting all of the Independent Trustees.Pursuant to a charter adopted by the Board, the Nominating Committee is charged with the duty of nominating all trustees and committee members, and presenting these nominations to the Board.The Nominating Committee will not consider any nominees for trustee recommended by security holders.During the fiscal year ended June 30, 2011, the Nominating Committee did not meet. Valuation Committee.The Trust’s Valuation Committee, which meets when necessary, consists of Messrs. Azariadis, Cheng, Keffer, Tucker or Parish, the President or the Treasurer, a representative of Atlantic in its capacity as the Fund Accountant (“Fund Accountant”) and, if needed, a portfolio manager or a senior representative of the 22 investment advisers to the Trust series holding securities that require fair valuation.Pursuant to the Trust’s Pricing and Valuation Procedures, the Valuation Committee oversees the pricing of the Funds’ shares and the activities of the Fund Accountant and the Adviser in connection with the valuation of the Funds’ portfolio securities; selects from time to time, subject to approval by the Board, independent pricing services to provide a market value or fair value of any portfolio security approved by the Board; makes and monitors fair value determinations pursuant to these Procedures; and carries out any other supervisory functions delegated to it by the Board relating to the valuation of the Funds’ portfolio securities. During the fiscal year ended June 30, 2011, the Valuation Committee met 156 times. Qualified Legal Compliance Committee. The Qualified Legal Compliance Committee (the “QLCC’), which meets when necessary, consists of Messrs. Azariadis, Cheng, Tucker and Parish, constituting all of theIndependent Trustees.The QLCC evaluates and recommends resolutions to reports from attorneys servicing the Trust regarding evidence of material violations of applicable federal and state law or the breach of fiduciary duties under applicable federal and state law by the Trust or an employee or agent of the Trust.During the fiscal year ended June 30, 2011, the QLCC did not meet. E. Compensation of Trustees and Officers Each trustee is paid an annual fee of $45,000 for service to the Trust.The Chairman of the Board is paid an annual fee of $66,000. In addition, the Chairman receives a monthly stipend of $500 to cover certain expenses incurred in connection with his duties to the Trust. The trustees and Chairman may receive additional fees for special Board meetings. Each trustee is also reimbursed for all reasonable out-of-pocket expenses incurred in connection with his duties as a trustee, including travel and related expenses incurred in attending Board meetings. No officer of the Trust is compensated by the Trust, but officers are reimbursed for travel and related expenses incurred in attending Board meetings held outside of Portland, Maine. The following table sets forth the fees paid to each trustee by each Fund and the Trust for the fiscal year ended June 30, 2011. Trustee Compensation from each Fund Pension or Retirement Benefits Total Compensation from Trust Midcap Growth Fund3 Premier Growth Fund J. Michael Parish N/A Costas Azariadis N/A James C. Cheng N/A David Tucker $0 N/A $0 John Y. Keffer $0 $0 N/A $0 3Estimated compensation for the fiscal year July 1, 2011 through June 30, 2012. 4David Tucker was appointed as an Independent Trustee on September 16, 2011. Accordingly, compensation from the Midcap Growth Fund is estimated for the period September 16, 2011 through June 30, 2012. F. Investment Adviser Services of Adviser. The Adviser serves as investment adviser to the Funds pursuant to an investment advisory agreement with the Trust (the “Advisory Agreement”). Under the Advisory Agreement, the Adviser furnishes, at its own expense, all services, facilities and personnel necessary in connection with managing the Funds’ investments and effecting portfolio transactions for the Funds. The Adviser may compensate brokers or other service providers (“Financial Intermediaries”) out of its own assets, and not as additional charges to the Funds, in connection with the sale and distribution of shares of the Funds and/or servicing of these shares. Ownership of Adviser The Adviser is a privately-owned corporation organized under the laws of Maryland in 1976 and controlled by Daniel F. Dent. 23 Information Concerning Other Accounts Managed by Portfolio Managers The following table provides information regarding other accounts managed by the Portfolio Managers as of June 30, 2011: Name of Portfolio Manager Number of Other Accounts Managed and Assets by Account Type Number of Accounts and Assets for Which Advisory Fee is Performance-Based Registered Investment Companies Other Pooled Investment Vehicles Other accounts Registered Investment Companies Other Pooled Investment Vehicles Other accounts Daniel F. Dent 0 ($0) 0 ($0) 155 ($916,369,193) 0 ($0) 0 ($0) 0 ($0) Thomas F. O'Neil, Jr. 0 ($0) 0 ($0) 271 ($998,982,897) 0 ($0) 0 ($0) 0 ($0) Matthew F. Dent 0 ($0) 0 ($0) 62 ($262,212,231) 0 ($0) 0 ($0) 0 ($0) Gary D. Mitchell 0 ($0) 0 ($0) 19 ($62,666,724) 0 ($0) 0 ($0) 0 ($0) Bruce L. Kennedy, II 0 ($0) 0 ($0) 3 ($6,347,837) 0 ($0) 0 ($0) 0 ($0) Conflicts of Interest. Actual or apparent conflicts of interest may arise when a portfolio manager has day-to-day management responsibilities with respect to more than one fund or other account. More specifically, portfolio managers who manage multiple funds and/or other accounts may be presented with the following conflicts: • The management of multiple client accounts may result in a portfolio manager devoting unequal time and attention to the management of each fund and/or other account. The Adviser seeks to manage such competing interests for the time and attention of portfolio managers by having portfolio managers focus on a particular investment discipline. Most other accounts managed by the portfolio manager are managed using the same investment models that are used in connection with the management of the Funds. • If the portfolio manager identifies a limited investment opportunity which may be suitable for more than one account, the Fund may be unable to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible accounts. To deal with these situations, the Adviser and the Funds have adopted procedures for allocating portfolio transactions across multiple accounts. • With respect to securities transactions for the Funds, the Adviser determines which broker to use to execute each order, consistent with its duty to seek best execution of the transaction. However, with respect to certain other accounts (such as other pooled investment vehicles that are not registered mutual funds and other accounts managed for organizations and individuals), the Adviser may be limited by the client with respect to the selection of brokers or may be instructed to direct trades through a particular broker. In these cases, the Adviser may place separate, non- simultaneous transactions for the Fund and another account which may temporarily affect the market price of the security or the execution of the transaction, or both, to the detriment of the Fund or the other account. The Adviser and the Funds have adopted certain compliance procedures, which are designed to address these types of conflicts. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises. Portfolio Managers Ownership in the Funds The Midcap Growth Fund’s portfolio is team-managed by an investment committee consisting of four portfolio managers, Messrs. Thomas F. O'Neil, Jr., Matthew F. Dent, Gary D. Mitchell, and Bruce L. Kennedy, II, each a Vice President of D.F. Dent, who are jointly responsible for the day-to-day management of the Midcap Growth Fund. They each have served as portfolio manager of the Fund since its inception in 2011. 24 The Premier Growth Fund’s portfolio is managed by Mr. Daniel F. Dent, who is solely responsible for the day-to-day management of the Premier Growth Fund and has served as portfolio manager of the Premier Growth Fund since its inception in 2001. Fund/Portfolio Manager Dollar Range of Beneficial Ownership in the Fund as of September 30, 2011 Midcap Growth Fund Thomas F. O'Neil, Jr. $100,001-$500,000 Matthew F. Dent $100,001-$500,000 Gary D. Mitchell None Bruce L. Kennedy, II $1-$10,000 Premier Growth Fund Daniel F. Dent Over $1,000,000 Information Concerning Compensation by Portfolio Managers For the period ending June 30, 2011, Mr. Dent was compensated based on a fixed base salary plus a bonus. This bonus was based on Mr. Dent’s equity participation in the ownership of the Adviser and also on the overall profitability of the Adviser based on assets under management. For the period ended June 30, 2011, Thomas F. O'Neil, Jr., Matthew F. Dent, Gary D. Mitchell, and Bruce L. Kennedy, II were compensated based on a fixed base salary plus a performance bonus based on calendar year performance and paid at calendar year end. Fees Pursuant to the Advisory Agreement, the Adviser receives an advisory fee equal to 1.00% of each Fund’s average daily net assets. The fee is accrued daily by each Fund. The Adviser’s fee is paid quarterly. In addition to receiving its advisory fee from the Funds, the Adviser may also act and be compensated as investment manager for its clients with respect to assets they invested in the Funds. If you have a separately managed account with the Adviser with assets invested in the Funds, the Adviser will not charge you a separate management fee on the account with respect to those assets. The Adviser has contractually agreed for the period November 1, 2011, through October 31, 2014, to waive a portion of its advisory fee and reimburse certain expenses in order to limit the net expense to shareholders to 1.10% on the first $150 million in Fund net assets and to 0.90% on net assets exceeding $150 million (excluding all taxes, interest, portfolio transaction expenses, and extraordinary expenses) for both Funds. Table 1 in Appendix B shows the dollar amount of the fees accrued by the Premier Growth Fund, the amount of fees reduced or reimbursed by the Adviser, the actual fees received by the Adviser. The data presented is for the past three fiscal years. The Midcap Growth Fund had not commenced operations prior to the fiscal year end. Accordingly, advisory fee data is not provided for the Midcap Growth Fund. Other Provisions of the Advisory Agreement The Adviser is not affiliated with Atlantic or any company affiliated with Atlantic. The Advisory Agreement remains in effect for a period of two years from the date of its effectiveness and then the agreement must be approved annually. Subsequently, the Advisory Agreement must be approved at least annually by the Board or by majority vote of the shareholders, and in either case by a majority of the Trustees who are not parties to the Advisory Agreement or interested persons of any such party (other than as Trustees of the Trust). 25 The Advisory Agreement is terminable without penalty by the Trust with respect to the Funds on 60 days’ written notice when authorized either by vote of the Fund’s shareholders or by a majority vote of the Board, or by the Adviser on 60 days’ written notice to the Trust. The Advisory Agreement terminates immediately upon assignment. Under the Advisory Agreement, the Adviser is not liable for any error of judgment, mistake of law, or in any event whatsoever, except for willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of its duties or by reason of reckless disregard of its obligations and duties under the Advisory Agreement. G. Distributor Distribution Services.Foreside Fund Services, LLC (the “Distributor”) is the distributor (also known as the principal underwriter) of the shares of the Funds and is located at Three Canal Plaza, Suite 100, Portland, Maine 04101.The Distributor is a registered broker-dealer and is a member of the Financial Industry Regulatory Authority, Inc. Under a Distribution Agreement with the Trust dated March 31, 2009, the Distributor acts as the agent of the Trust in connection with the continuous offering of shares of the Funds.The Distributor continually distributes shares of the Funds on a best efforts basis.The Distributor has no obligation to sell any specific quantity of the Funds’ shares. The Distributor and its officers have no role in determining the investment policies or which securities are to be purchased or sold by the Trust. The Distributor may enter into agreements with selected broker-dealers, banks or other financial intermediaries for distribution of shares of the Funds.With respect to certain financial intermediaries and related Fund “supermarket” platform arrangements, the Funds and/or the Adviser, rather than the Distributor, typically enter into such agreements. These financial intermediaries may charge a fee for their services and may receive shareholder service or other fees from parties other than the Distributor. These financial intermediaries may otherwise act as processing agents and are responsible for promptly transmitting purchase, redemption and other requests to the Funds. The Adviser, at its expense, pays the Distributor a fee for certain distribution-related services, including to permit employees of the Adviser to serve as registered representatives of the Distributor to facilitate distribution of shares of the Funds. Investors who purchase shares through financial intermediaries will be subject to the procedures of those intermediaries through whom they purchase shares, which may include charges, investment minimums, cutoff times and other restrictions in addition to, or different from, those listed herein.Information concerning any charges or services will be provided to customers by the financial intermediary through which they purchase shares.Investors purchasing shares of the Funds through financial intermediaries should acquaint themselves with their financial intermediary’s procedures and should read the Prospectus in conjunction with any materials and information provided by their financial intermediary.The financial intermediary, and not its customers, will be the shareholder of record, although customers may have the right to vote shares depending upon their arrangement with the intermediary.The Distributor does not receive compensation from the Funds for its distribution services.The Adviser pays the Distributor a fee for distribution related services. H. Other Fund Service Providers Administrator, Fund Accountant, Transfer Agent and Compliance Services. Atlantic and its subsidiaries provide administration, fund accounting and transfer agency services to the Funds. Atlantic is a subsidiary of Forum Holdings Corp. John Y. Keffer, a trustee, is the Chairman of Atlantic and is also the founder and owner of Forum Holdings Corp., the parent entity of Atlantic. Pursuant to the Atlantic Services Agreement, (the “Services Agreement”), the Funds pay Atlantic a bundled fee for administration, fund accounting and transfer agency services at an annual rate of: 0.12% on the first $150 million in Fund assets, 0.075% on the next $150 million in Fund assets, 0.05% on the next $300 million in Fund assets, 0.03% on the next $400 million in Fund assets and 0.02% on Fund assets exceeding $1 billion. The base fee is subject to an annual minimum of $135,000. The Funds also pay Atlantic certain surcharges and shareholder account fees. The fee is accrued daily by the Funds and is paid monthly based on the average net assets, transactions and positions for the prior month. 26 As administrator, Atlantic administers the Funds’ operations with respect to the Funds, except those that are the responsibility of any other service provider hired by the Trust, all in such manner and to such extent as may be authorized by the Board. The administrator’s responsibilities include, but are not limited to, (1) overseeing the performance of administrative and professional services rendered to the Funds by others, including its custodian, transfer agent and dividend disbursing agent, as well as legal, auditing, shareholder servicing and other services performed for the Funds; (2) preparing for filing and filing certain regulatory filings (i.e. registration statements and semi-annual reports) subject to Trust counsel and/or independent auditor oversight; (3) overseeing the preparation and filing of the Funds’ tax returns, the preparation of financial statements and related reports to the Funds’ shareholders, the SEC and state and other securities administrators; (4) providing the Funds with adequate general office space and facilities and provide persons suitable to the Board to serve as officers of the Trust; (5) assisting the Adviser in monitoring holdings of the Funds for compliance with prospectus investment restrictions and assist in preparation of periodic compliance reports; and (6) with the cooperation of the Adviser, the officers of the Trust and other relevant parties, preparing and disseminating materials for meetings of the Board. As Fund Accountant, Atlantic provides fund accounting services to the Funds. These services include calculating the NAV of the Funds. The Services Agreement continues in effect until terminated, so long as its continuance is specifically approved or ratified with such frequency and in such manner as required by applicable law. After an initial three-year term, the Services Agreement is terminable with or without cause and without penalty by the Trust or by the Administrator on 120 days’ written notice to the other party. The Services Agreement is also terminable for cause by the non-breaching party on at least 60 days’ written notice to the other party, provided that such party has not cured the breach within that notice period. Under the Services Agreement, Atlantic is not liable to the Funds or the Funds’ shareholders for any act or omission, except for willful misfeasance, bad faith or negligence in the performance of its duties or by reason of reckless disregard of its obligations and duties under the Services Agreement. The Services Agreement also provides that Atlantic will not be liable to a shareholder for any loss incurred due to a NAV difference if such difference is less than or equal to 0.5% or less than or equal to $25.00. In addition, Atlantic is not liable for the errors of others, including the companies that supply security prices to Atlantic and the Funds. Atlantic Shareholder Services, LLC (the “Transfer Agent”) serves as transfer agent and distribution paying agent for the Funds. Atlantic is registered as a transfer agent with the Office of Comptroller of the Currency. The Transfer Agent maintains an account for each shareholder of record of the Funds and is responsible for processing purchase and redemption requests and paying distributions to shareholders of record. Table 2 in Appendix B shows the dollar amount of the fees accrued by the Premier Growth Fund to Atlantic for administration, transfer agent and fund accounting services, the amount of fees waived by Atlantic, and the actual fees retained by Atlantic. The data is for the past three fiscal years. The Midcap Growth Fund had not commenced operations prior to the fiscal year end. Accordingly, data is not provided for the Midcap Growth Fund. Atlantic provides a Principal Executive Officer (“PEO”), a Principal Financial Officer (“PFO” and, with the PEO, “Certifying Officers”), a CCO, and an Anti-Money Laundering Compliance Officer (“AMLCO”) to the Funds, as well as certain additional compliance support functions (collectively, “Compliance Services”), pursuant to a Compliance Services Agreement dated June 1, 2008 (the “Compliance Services Agreement”). For making available the CCO, the AMLCO and the Certifying Officers, and for providing the Compliance Services, Atlantic receives a fee from the Funds equal to (1) $20,000 (allocated equally to all Trust series for which the Adviser provides management services) and (2) $5,000 per Fund. The Compliance Services Agreement continues in effect until terminated. The Compliance Services Agreement is terminable with or without cause and without penalty by the Board or by Atlantic on 60 days’ written notice to the other party. Notwithstanding the foregoing, the provisions of the Compliance Services Agreement related to CCO services, may be terminated at any time by the Board, effective upon written notice to the CCO and Certifying Officers, without the payment of any penalty. 27 Under the Compliance Services Agreement, (1) Atlantic is not liable to the Funds or the Funds’ shareholders for any act or omission, and (2) Atlantic and certain related parties ("Atlantic Indemnitees") are indemnified by the Funds against any and all claims and expenses related to an Atlantic Indemnitee's actions or omissions, except, with respect to clauses (1) and (2), for willful misfeasance, bad faith or negligence in the performance of Atlantic's duties or by reason of reckless disregard of its obligations and duties under the Compliance Services Agreement. Table 3 in Appendix B shows the dollar amount of the fees accrued by the Premier Growth Fund to Atlantic for compliance services, the amount of fees waived by Atlantic, and the actual fees retained by Atlantic. The data is for the past three fiscal years. The Midcap Growth Fund had not commenced operations prior to the fiscal year end. Accordingly, data is not provided for the Midcap Growth Fund. Custodian.Union Bank, N.A. (the “Custodian”), is the Custodian for the Funds and safeguards and controls the Funds’ cash and securities, determines income and collects interest on the Funds’ investments.The Custodian may employ subcustodians to provide custody of the Funds’ domestic and foreign assets.The Custodian is located at 350 California, 6th Floor, San Francisco, CA, 94104. Legal Counsel.K&L Gates LLP, 1treet, N.W., Washington, D.C. 20006, serves as legal counsel to the Trust. Independent Registered Public Accounting Firm.BBD, LLP (“BBD”), 1835 Market Street, 26th Floor, Philadelphia, Pennsylvania 19103, is the independent registered public accounting firm for the Funds and provides audit and tax services. BBD audits the annual financial statements of the Funds and provides the Funds with an audit opinion.BBDalso reviews certain regulatory filings of the Funds. PORTFOLIO TRANSACTIONS A. How Securities are Purchased and Sold Purchases and sales of portfolio securities that are fixed-income securities (for instance, money market instruments and bonds, notes and bills) usually are principal transactions.In a principal transaction, the party from whom a Fund purchases or to whom a Fund sells is acting on its own behalf (and not as the agent of some other party such as its customers).These securities normally are purchased directly from theissuer or from an underwriter or market maker for the securities.There usually are no brokerage commissions paid for these securities. Purchases and sales of portfolio securities that are equity securities (for instance, common stock and preferred stock) are generally effected (1) if the security is traded on an exchange, through brokers who charge commissions and (2) if the security is traded in the over-the-counter markets, in a principal transaction directly from a market maker.In transactions on stock exchanges, commissions are negotiated. When transactions are executed in an over-the-counter market, the Adviser will seek to deal with the primary market makers; but when necessary in order to obtain best execution, the Adviser will utilize the services of others. The price of securities purchased from underwriters includes a disclosed fixed commission or concession paid by the issuer to the underwriter, and prices of securities purchased from dealers serving as market makers reflects the spread between the bid and asked price. In the case of fixed-income and equity securities traded in the over-the-counter markets, there is generally no stated commission, but the price usually includes an undisclosed commission or markup. B. Commissions Paid Table 4 in Appendix B shows the aggregate brokerage commissions paid by the Premier Growth Fund as well as the aggregate commissions paid to any affiliates of the Premier Growth Fund or the Adviser. The data presented are for the past three fiscal years. The Midcap Growth Fund had not commenced operations prior to the fiscal year end. Accordingly, data is not provided for the Midcap Growth Fund. 28 C. Adviser Responsibility for Purchases and Sales and Choosing Broker-Dealers The Adviser places orders for the purchase and sale of securities with broker-dealers selected by and at the discretion of the Adviser.The Funds do not have any obligation to deal with a specific broker or dealer in the execution of portfolio transactions.Allocations of transactions to brokers and dealers and the frequency of transactions are determined by the Adviser in its best judgment and in a manner deemed to be in the best interest of the Fund rather than by any formula. The Adviser seeks “best execution” for all portfolio transactions.This means that the Adviser seeks the most favorable price and execution available.The Funds may not always pay the lowest commission or spread available.Rather, in determining the amount of commissions (including certain dealer spreads) paid in connection with securities transactions, the Adviser takes into account factors such as size of the order, difficulty of execution, efficiency of the executing broker’s facilities (including the research services described below) and any risk assumed by the executing broker.The Adviser may also utilize a broker and pay a higher commission if, for example, the broker has specific expertise in a particular type of transaction (due to factors such as size or difficulty), or it is efficient in trade execution. The Adviser may also give consideration to research services furnished by brokers to the Adviser and may cause the Funds to pay these brokers a higher amount of commission than may be charged by other brokers.This research may include reports that are common in the industry such industry research reports and periodicals, quotation systems, software for portfolio management and formal databases.Typically, the research will be used to service the Adviser’s accounts, and therefore the commission dollars spent for research benefit the Adviser’s clients and the Funds’ investors, although a particular client may not benefit from all the research received on each occasion.The Adviser’s fees are not reduced by reason of the Adviser’s receipt of research services. Table 5 in Appendix B lists each broker to whom the Premier Growth Fund directed brokerage over the last fiscal year in return for research services, the amount of transactions so directed and the amount of commissions earned by the broker therefrom. The Midcap Growth Fund had not commenced operations prior to the fiscal year end. Accordingly, the Midcap Growth Fund did not direct brokerage to any broker for research services provided to the Midcap Growth Fund during the last fiscal year. D. Counterparty Risk The Adviser monitors the creditworthiness of counterparties to the Funds’ transactions and intends to enter into a transaction only when it believes that the counterparty presents minimal and appropriate credit risks. E. Transactions through Affiliates The Adviser may effect brokerage transactions through affiliates of the Adviser (or affiliates of those persons) pursuant to procedures adopted by the Trust. Currently, the Adviser does not effect the transactions through any affiliates. F. Other Accounts of the Adviser Investment decisions for the Funds are made independently from those for any other account or investment company that is or may in the future become advised by the Adviser or its affiliates.Investment decisions are the product of many factors, including basic suitability for the particular client involved.Likewise, a particular security may be bought or sold for certain clients even though it could have been bought or sold for other clients at the same time.Likewise, a particular security may be bought for one or more clients when one or more clients are selling the security.In some instances, with required consents, one client may sell a particular security to another client.In addition, two or more clients may simultaneously purchase or sell the same security, in which event each day’s transactions in such security are, insofar as is possible, averaged as to price and allocated between such clients in a manner which, in the Adviser’s opinion, is in the best interest of the affected accounts and is equitable to each and in accordance with the amount being purchased or sold by each.There may be circumstances when purchases or sales of a portfolio security for one client could have an adverse effect on another client that has a position in that security.In addition, when purchases or sales of the same security for the Funds and other client accounts managed by the Adviser occurs contemporaneously, the purchase or sale orders may be aggregated in order to obtain any price advantages available to large denomination purchases or sales. 29 G. Portfolio Turnover The frequency of portfolio transactions of the Funds (the portfolio turnover rate) will vary from year to year depending on many factors.From time to time, the Funds may engage in active short-term trading to take advantage of price movements affecting individual issues, groups of issues or markets.An annual portfolio turnover rate of 100% would occur if all the securities in each Fund were replaced once in a period of one year.Higher portfolio turnover rates may result in increased brokerage costs to the Funds and a possible increase in short-term capital gains or losses. Portfolio Turnover Rate is defined under the rules of the SEC as the value of the securities purchased or securities sold, excluding all securities whose maturities at time of acquisition were one year or less, divided by the average monthly value of such securities owned during the year. Based on this definition, instruments with remaining maturities of less than one year, including options and futures contracts in which the Funds invest, are excluded from the calculation of portfolio turnover rate. H. Securities of Regular Broker-Dealers From time to time the Funds may acquire and hold securities issued by its “regular brokers and dealers” or the parents of those brokers and dealers.For this purpose, regular brokers and dealers are the 10 brokers or dealers that:(1) received the greatest amount of brokerage commissions during each Fund’s last fiscal year; (2) engaged in the largest amount of principal transactions for portfolio transactions of each Fund during that Fund’s last fiscal year; or (3) sold the largest amount of each Fund’s shares during that Fund’s last fiscal year. Table 6 in Appendix B lists the Premier Growth Fund’s regular brokers and dealers whose securities (or the securities of the parent company) were acquired during the Premier Growth Fund’s most recent fiscal year. Table 6 also includes the aggregate value of the Premier Growth Fund’s holdings of those securities as of the Fund’s most recent fiscal year. The Midcap Growth Fund had not commenced operations prior to the fiscal year end. Accordingly, data is not provided for the Midcap Growth Fund. I. Portfolio Holdings Portfolio holdings as of the end of a Funds’ annual and semi-annual fiscal periods are reported to the SEC on Form N-CSR within 10 days of the mailing of the annual or semi-annual report (typically no later than 70 days after the end of each period).Portfolio holdings as of the end of the first and third fiscal quarters are reported to the SEC on Form N-Q within 60 days after the end of such period. You may request a copy of the Funds’ latest semi-annual report to shareholders or a copy of a Fund's latest Form N-Q which contains the Fund's portfolio holdings by contacting the Transfer Agent at the address or phone number listed on the cover of this SAI. You may also obtain a copy of the Funds’ latest Form N-CSR and Form N-Q by accessing the SEC's michael03@example.com. In addition, the Funds’ Adviser may make publicly available, on a quarterly basis, information regarding each Fund’s top five holdings (including name and percentage of each Fund’s assets invested in each such holding). This holdings information is made available through the Funds’ or Adviser’s website. This information is released no later than 10 days after the quarter end. The Funds’ nonpublic portfolio holdings information is received by certain service providers in advance of public release in the course of performing or enabling them to perform the contractual or fiduciary duties necessary for a Fund's operations that a Fund has retained them to perform.The Adviser to the Funds has regular and continuous access to each Fund's portfolio holdings.In addition, the Administrator, the Custodian, the Distributor and the Fund Accountant, as well as independent auditors, proxy voting services, mailing services and financial printers may have access to each Fund's nonpublic portfolio holdings information on an ongoing basis.The trustees, the Funds’ officers, legal counsel to the Trust and to the Independent Trustees, and the Funds’ independent registered public accounting firm may receive such information on an as needed basis. From time to time, nonpublic information regarding each Fund's portfolio holdings may also be disclosed to certain mutual fund consultants, analysts and rating/ranking entities, or other entities or persons ("Recipients") that have a legitimate business purpose in receiving such information.Any disclosure of information more current than the latest 30 publicly available nonpublic portfolio holdings information will be made only if a Trust Officer determines that: (1) the more current information is necessary for a Recipient to complete a specified task; (2) the Fund has legitimate business purposes for disclosing the information; and (3) the disclosure is in the best interests of the Fund and its shareholders.Any Recipient, other than a ratings or ranking organization, receiving such information shall agree in writing to: (1) keep the information confidential; (2) use it only for agreed-upon purposes; and (3) not trade or advise others to trade securities, including shares of a Fund, on the basis of the information.Such confidentiality agreements entered into for the receipt of nonpublic information shall also provide, among other things, that the Recipient: (1) will limit access to the information to its employees and agents who are obligated to keep and treat such information as confidential; (2) will assume responsibility for any breach of the terms of the confidentiality agreement by its employees; and (3) upon request from the Trust, will return or promptly destroy the information.Any recipient that is a ratings or ranking organization receiving such information must have in place control mechanisms to reasonably ensure or otherwise agree that, (1) the holdings information will be kept confidential, (2) no employee shall use the information to effect trading or for their personal benefit and (3) the nature and type of information that any employee, in turn, may disclose to third-parties is limited.The Trust Officer shall report to the Board at its next regularly scheduled Board meeting the entering into of an agreement with a Recipient for the disclosure of nonpublic portfolio holdings information and shall include in the report the Trust Officer’s reasons for determining to permit such disclosure. No compensation is received by the Funds nor, to the Funds’ knowledge, paid to its Adviser or any other party in connection with the disclosure of the Funds’ portfolio holdings. The codes of ethics of the Trust and the Adviser are intended to address, among other things, potential conflicts of interest arising from the misuse of information concerning the Funds’ portfolio holdings. In addition, the Funds’ service providers may be subject to confidentiality provisions contained within their service agreements, codes of ethics, professional codes, or other similar policies that address conflicts of interest arising from the misuse of such information. The Funds’ portfolio holdings disclosure policy is subject to review by the Funds’ CCO who will report the results of such review at least annually to the Board.Any identified conflict between the interests of shareholders and those of another party resulting from the disclosure of nonpublic portfolio holdings information will be reported to the Board for appropriate action. There is no assurance that the Funds’ portfolio holdings disclosure policy will protect the Funds against potential misuse of holdings information by individuals or firms in possession of that information. PURCHASE AND REDEMPTION INFORMATION A. General Information You may effect purchases or redemptions or request any shareholder privilege by contacting the Transfer Agent.The Funds accept orders for the purchase or redemption of shares of each class on any weekday except days when the New York Stock Exchange (“NYSE”) is closed. Under unusual circumstances, the Funds may accept orders when the NYSE is closed if deemed appropriate by the Trust’s officers. The shares of each Fund may not be available for sale in the state in which you reside.Please check with your investment professional to determine a Fund’s availability. B. Additional Purchase Information Shares of each class of the Funds are offered on a continuous basis by the Distributor. The Funds reserve the right to refuse any purchase request. Fund shares are normally issued for cash only.In the Adviser’s discretion, however, a Fund may accept portfolio securities that meet the investment objective and policies of that Fund as payment for Fund shares.The Funds will only accept securities that (1) are not restricted as to transfer by law and are not illiquid and (2) have a value that is readily ascertainable (and not established only by valuation procedures). IRAs.All contributions into an individual retirement account (“IRA”) through the automatic investing service are treated as IRA contributions made during the year the contribution is received. 31 UGMAs/UTMAs.If the custodian’s name is not in the account registration of a gift or transfer to minor (“UGMA/UTMA”) account, the custodian must provide instructions in a manner indicating custodial capacity. C. Additional Redemption Information You may redeem the Funds’ michael03@example.com. A Fund may redeem shares involuntarily to: (1) reimburse the Fund for any loss sustained by reason of the failure of a shareholder to make full payment for shares purchased by the shareholder; or (2) collect any charge relating to transactions effected for the benefit of a shareholder which is applicable to the Fund’s shares as provided in the Prospectus. Suspension of Right of Redemption.The right of redemption may not be suspended, except for any period during which: (1) the NYSE is closed (other than customary weekend and holiday closings) or during which the SEC determines that trading thereon is restricted; (2) an emergency (as determined by the SEC) exists as a result of which disposal by a Fund of its securities is not reasonably practicable or as a result of which it is not reasonably practicable for a Fund fairly to determine the value of its net assets; or (3) the SEC has entered a suspension order permit for the protection of the shareholders of the Funds. Redemption in Kind.Redemption proceeds normally are paid in cash.If deemed appropriate and advisable by the Adviser, a Fund may satisfy a redemption request from a shareholder by distributing portfolio securities pursuant to procedures adopted by the Board. The Trust has filed an election with the SEC pursuant to which a Fund may only effect a redemption in portfolio securities if the particular shareholder is redeeming more than $250,000 or 1% of the Fund’s total net assets, whichever is less, during any 90-day period. NAV Determination.In determining the NAV of each Fund, securities for which market quotations are readily available are valued at current market value using the valuation price provided by an independent pricing service.If no sales price is reported, the mean of the last bid and ask price is used. If market quotations are not readily available, then securities are valued at fair value as determined by the Board (or its delegate). Distributions.Distributions of net investment income will be reinvested at a Fund’s NAV (unless you elect to receive distributions in cash) as of the last day of the period with respect to which the distribution is paid.Distributions of capital gain will be reinvested at a Fund’s NAV (unless you elect to receive distributions in cash) on the payment date for the distribution.Cash payments may be made more than seven days following the date on which distributions would otherwise be reinvested. TAXATION The tax information set forth in the Prospectus and in this section relates solely to federal income tax law and assumes that each Fund qualifies for treatment as a regulated investment company under the law (as discussed below).Such information is only a summary of certain key federal income tax considerations affecting a Fund and its shareholders and is in addition to the information provided in the Prospectus.No attempt has been made to present a complete explanation of the federal tax treatment of a Fund or the tax implications to shareholders.The discussions here and in the Prospectus are not intended as substitutes for careful tax planning. This “Taxation” section is based on the Internal Revenue Code of 1986, as amended, including the regulations thereunder, IRS interpretations or similar authority upon which the Funds may rely (“Code”) in effect on the date hereof.Future legislative or administrative changes or court decisions may significantly change the tax rules applicable to the Fund and its shareholders.Any of these changes or court decisions may have a retroactive effect. All investors should consult their own tax advisers as to the federal, state, local and foreign tax provisions applicable to them. 32 A. Qualification for Treatment as a Regulated Investment Company Each Fund intends, for each taxable year, to qualify for treatment as a “regulated investment company” under the Code.This qualification does not involve governmental supervision of management or investment practices or policies of the Funds. The tax year end of the Funds is June 30. Meaning of Qualification.As a regulated investment company, each Fund will not be subject to federal income tax on the portion of its investment company taxable income (that is, interest, dividends, the excess of net short-term capital gains over net long-term capital losses and other taxable ordinary income, net of expenses) and net capital gain (that is, the excess of net long-term capital gains over net short-term capital losses) that it distributes to shareholders.To continue to qualify for that treatment, each Fund must satisfy the following requirements: · Each Fund must distribute at least 90% of its investment company taxable income each tax year (certain distributions made by the Fund after the close of its taxable year are considered distributions attributable to the previous tax year for purposes of satisfying this requirement). · Each Fund must derive at least 90% of its gross income each taxable year from (1) dividends, interest, payments with respect to securities loans, and gains from the sale or other disposition of securities, foreign securities or foreign currencies, or other income (including gains from options, futures and forward contracts) derived from its business of investing in securities or those currencies and (2) net income from an interest in a qualified publicly traded partnership (“QPTP”). · Each Fund must satisfy the following asset diversification test at the close of each quarter of the Fund’s taxable year: (1) at least 50% of the value of the Fund’s assets must consist of cash, cash items, U.S. Government Securities, securities of other regulated investment companies, and securities of other issuers (as to which the Fund has not invested more than 5% of the value of total assets in securities of the issuer and as to which the Fund does not hold more than 10% of the outstanding voting securities of the issuer, equity securities of a QPTP being considered voting securities for these purposes ); and (2) no more than 25% of the value of the Fund’s total assets may be invested in (a) the securities of any one issuer (other than Government Securities and securities of other regulated investment companies), (b) the securities (other than the securities of other regulated investment companies) oftwo or more issuers that the Fund controls and that are engaged in the same,similar or related trades or businesses, or (c) the securities of one or more QPTPs. Failure to Qualify.If for any tax year a Fund does not qualify as a regulated investment company, all of its taxable income (including its net capital gain) will be subject to tax at regular corporate rates without any deduction for dividends paid to shareholders, and the dividends will be taxable to the shareholders as ordinary income to the extent of the Fund’s current and accumulated earnings and profits. Failure to qualify as a regulated investment company would thus have a negative impact on a Fund’s income and performance.It is possible that each Fund will not qualify as a regulated investment company in any given tax year. B. Fund Distributions Each Fund anticipates distributing substantially all of its investment company taxable income for each tax year.These distributions are taxable to you as ordinary income.A portion of these distributions may qualify for the 70% dividends-received deduction for corporate shareholders. A portion of each Fund’s distributions may be treated as “qualified dividend income,” taxable to individuals at a maximum federal tax rate of 15% (0% for individuals in lower tax brackets) if paid on or before December 31, 2012.A distribution is treated as qualified dividend income by a shareholder to the extent that each Fund receives dividend income from taxable domestic corporations and certain qualified foreign corporations, provided that holding period and other requirements are met.To the extent each Fund’s distributions are attributable to other sources, such 33 as interest or capital gains, the distributions are not treated as qualified dividend income.Each Fund’s distributions of dividends that it received from REITs generally do not constitute “qualified dividend income.” Each Fund anticipates distributing substantially all of its net capital gain for each taxable year.These distributions generally are made only once a year, usually in December, but each Fund may make additional distributions of net capital gain at any time during the year.These distributions are taxable to you as long-term capital gain, regardless of how long you have held your shares.These distributions do not qualify for the dividends-received deduction or as qualified dividend income. Each Fund may have capital loss carryovers (unutilized capital losses from prior years).These capital loss carryovers (which can be used for up to eight years) may be used to offset any current capital gain (whether short-term or long-term).Starting with the Funds’ taxable year ending June 30, 2012, capital loss carryforwards will not expire, and capital loss carryforwards from that or later years will be used before capital loss carryforwards from prior years. All capital loss carryovers are listed in the Funds’ financial statements. Any such losses may not be carried back. Distributions by each Fund that do not constitute ordinary income dividends or capital gain dividends will be treated as a return of capital.Return of capital distributions reduce your tax basis of your shares and are treated as gain from the sale of the shares to the extent your basis would be reduced below zero. Each distribution by each Fund will be treated in the manner described above regardless of whether the distribution is paid in cash or reinvested in additional shares of the Fund (or of another fund).If you receive distributions in the form of additional shares, you will be treated as receiving a distribution in an amount equal to the fair market value of the shares received, determined as of the reinvestment date. When you purchase shares, their NAV may reflect undistributed net investment income or recognized net capital gain, or unrealized appreciation in the value of the assets of each Fund. A distribution of these amounts is taxable to you in the manner described above, although the distribution economically constitutes a return of capital to you. Ordinarily, you are required to take distributions by each Fund into income in the year in which they are made.A distribution declared in October, November or December of any year and payable to shareholders of record on a specified date in those months, however, is deemed to be paid by each Fund and received by you on December 31 of that year if the distribution is paid by each Fund in January of the following year. Each Fund in which you invest will send you information annually as to the federal income tax consequences of distributions made (or deemed made) during the year. Beginning in 2013, distributions from each Fund and gain recognized from the sale or other disposition of Fund shares will be subject to a 3.8% federal Medicare contribution tax on “net investment income” for individuals with incomes exceeding $200,000 (or $250,000 if married and filing jointly). C. Certain Tax Rules Applicable to Fund Transactions For federal income tax purposes, when put and call options purchased by a Fund expire unexercised, the premiums paid by a Fund give rise to short-term or long-term capital losses at the time of expiration (depending on the length of the respective exercise periods for the options).When put and call options written by a Fund expire unexercised, the premiums received by that Fund give rise to short-term capital gains at the time of expiration.When a Fund exercises a call, the purchase price of the underlying security is increased by the amount of the premium paid by that Fund.When a Fund exercises a put, the proceeds from the sale of the underlying security are decreased by the premium paid. When a put or call written by a Fund is exercised, the purchase price (or the selling price in the case of a call) of the underlying security is decreased (or increased in the case of a call) for tax purposes by the premium received. Certain listed options, regulated futures contracts and foreign currency contracts are considered “Section 1256 contracts” for federal income tax purposes.Section 1256 contracts held by a Fund at the end of each tax year are “marked to market” and treated for federal income tax purposes as though sold for fair market value on the last business day of the tax year.Gains or losses realized by a Fund on Section 1256 contracts generally are considered 34 60% long-term and 40% short-term capital gains or losses.A Fund can elect to exempt its Section 1256 contracts that are part of a “mixed straddle” (as described below) from the application of Section 1256 of the Code. Any option, futures contract, forward contract or other position entered into or held by a Fund in conjunction with any other position held by that Fund may constitute a “straddle” for federal income tax purposes.A straddle of which at least one, but not all, the positions are Section 1256 contracts, may constitute a “mixed straddle.”In general, straddles are subject to certain rules that may affect the amount, character and timing of a Fund’s gains and losses with respect to straddle positions by requiring, among other things, that:(1) any loss realized on disposition of one position of a straddle may not be recognized to the extent that the Fund has unrealized gains with respect to the other position in such straddle; (2) the Fund’s holding period in straddle positions be suspended while the straddle exists (possibly resulting in a gain being treated as short-term capital gain rather than long-term capital gain); (3) the losses recognized with respect to certain straddle positions which are part of a mixed straddle and which are non-Section 1256 contracts be treated as 60% long-term and 40% short-term capital loss; (4) losses recognized with respect to certain straddle positions which would otherwise constitute short-term capital losses be treated as long-term capital losses; and (5) the deduction of interest and carrying charges attributable to certain straddle positions may be deferred.Various elections are available to a Fund, which may mitigate the effects of the straddle rules, particularly with respect to mixed straddles.In general, the straddle rules described above do not apply to any straddles held by a Fund if all of the offsetting positions consist of Section 1256 contracts. Under the Code, gains or losses attributable to fluctuations in exchange rates which occur between the time a Fund accrues interest or other receivables or accrues expenses or other liabilities denominated in a foreign currency and the time the Fund actually collects such receivables or pays such liabilities are treated as ordinary income or ordinary loss.Similarly, gains or losses from the disposition of foreign currencies, from the disposition of debt securities denominated in a foreign currency, or from the disposition of a forward contract denominated in a foreign currency which are attributable to fluctuations in the value of the foreign currency between the date of acquisition of the asset and the date of disposition also are treated as ordinary income or loss.These gains or lossesincrease or decrease the amount of a Fund’s investment company taxable income available to be distributed to its shareholders as ordinary income, rather than increasing or decreasing the amount of that Fund’s net capital gain. If a Fund owns shares in a foreign corporation that constitutes a “passive foreign investment company” (a “PFIC”) for federal income tax purposes and the Fund does not elect to treat the foreign corporation as a “qualified electing fund” within the meaning of the Code, the Fund may be subject to U.S.federal income taxation on a portion of any “excess distribution” it receives from the PFIC or any gain it derives from the disposition of such shares, even if such income is distributed as a taxable dividend by the Fund to its shareholders.A Fund may also be subject to additional interest charges in respect of deferred taxes arising from such distributions or gains.Any tax paid by a Fund as a result of its ownership of shares in a PFIC will not give rise to any deduction or credit to the Fund or to any shareholder.A PFIC means any foreign corporation (with certain exceptions) if, for the taxable year involved, either (1)it derives at least 75% of its gross income from “passive income” (including interest, dividends, royalties, rents and annuities) or (2)on average, at least 50% of the value (or adjusted tax basis, if elected) of the assets held by the corporation produce “passive income.”A Fund could elect to mark-to-market stock in a PFIC.Under such an election, a Fund would include in gross income (and treat as ordinary income) each taxable year an amount equal to the excess, if any, of the fair market value of the PFIC stock as of the close of the taxable year over the Fund’s adjusted basis in the PFIC stock.A Fund would be allowed a deduction for the excess, if any, of the adjusted basis of the PFIC stock over the fair market value of the PFIC stock as of the close of the taxable year, but only to the extent of any net mark-to-market gains included by the Fund for prior taxable years.A Fund’s adjusted basis in the PFIC stock would be adjusted to reflect the amounts included in, or deducted from, income under this election.Amounts included in income pursuant to this election, as well as gain realized on the sale or other disposition of the PFIC stock, would be treated as ordinary income.The deductible portion of any mark-to-market loss, as well as loss realized on the sale or other disposition of the PFIC stock to the extent that such loss does not exceed the net mark-to-market gains previously included by a Fund, would be treated as ordinary loss.A Fund generally would not be subject to the deferred tax and interest charge provisions discussed above with respect to PFIC stock for which a mark-to-market election has been made.If a Fund purchases shares in a PFIC and the Fund does elect to treat the foreign corporation as a “qualified electing fund” under the Code, the Fund may be required to include in its income each year a portion of the ordinary income and net capital gains of the foreign corporation, even if this income is not distributed to the Fund. Any such income would be subject to the 90% distribution requirement described above and calendar year distribution requirement described below. 35 D. Federal Excise Tax A 4% non-deductible excise tax is imposed on a regulated investment company that fails to distribute in each calendar year an amount equal to the sum of: (1) 98% of its ordinary taxable income for the calendar year plus; (2) 98.2% of its capital gain net income for the one-year period ended on October 31 of the calendar year. The balance of a Fund’s income must be distributed during the next calendar year.A Fund will be treated as having distributed any amount on which it is subject to income tax for any taxable year ending in the calendar year. For purposes of calculating the excise tax, a Fund: (1) reduces its capital gain net income (but not below its net capital gain) by the amount of any net ordinary loss for the calendar year; and (2) excludes foreign currency gains and losses incurred after October 31 of any year in determining the amount of ordinary taxable income for the current calendar year.A Fund will include foreign currency gains and losses incurred after October 31 in determining ordinary income for the succeeding calendar year. Each Fund intends to make sufficient distributions of its taxable income and capital gain net income prior to the end of each calendar year to avoid liability for the excise tax.A Fund may in certain circumstances be required to liquidate portfolio investments to make sufficient distributions to avoid excise tax liability. E. Redemption of Shares In general, you will recognize gain or loss on the redemption of shares of a Fund in an amount equal to the difference between the proceeds of the redemption and your adjusted tax basis in the shares.All or a portion of any loss so recognized may be disallowed if you purchase a Fund’s shares (for example, by reinvesting dividends) within 30 days before or after the redemption (called a wash sale).If disallowed, the loss will be reflected in an upward adjustment to the basis of the shares purchased.In general, any gain or loss arising from the sale, exchange or redemption of shares of a Fund will be considered capital gain or loss and will be long-term capital gain or loss if the shares were held for longer than one year.Any capital loss arising from the redemption of shares held for six months or less, however, will be treated as a long-term capital loss to the extent of the amount of distributions of net capital gain received on such shares.In determining the holding period of such shares for this purpose, any period during which your risk of loss is offset by means of options, short sales or similar transactions is not counted. Capital losses in any year are deductible only to the extent of capital gains plus, in the case of a non-corporate taxpayer, $3,000 of ordinary income. Legislation passed by Congress in 2008 requires the Funds (or their administrative agent) to report to the IRS and furnish to Fund shareholders the cost basis information for Fund shares purchased on or after January 1, 2012, and sold on or after that date. In addition to the present law requirement to report the gross proceeds from the sale of Fund shares, the Funds will also be required to report the cost basis information for such shares and indicate whether these shares had a short-term or long-term holding period. For each sale of Fund shares the Funds will permit Fund shareholders to elect from among several IRS-accepted cost basis methods, including average cost. In the absence of an election, each Fund will use a first in, first out cost basis method. The cost basis method elected by a Fund shareholder (or the cost basis method applied by default) for a redemption of Fund shares may not be changed after the settlement or the redemption date of each such sale of Fund shares. Fund shareholders should consult with their tax advisors to determine the best IRS-accepted cost basis method for their tax situation and to obtain more information about how the new cost basis reporting law applies to them. The current law requirement to report only the gross proceeds from the sale of Fund shares will continue to apply to all Fund shares acquired through December 31, 2011, and sold on and after that date. F. Backup Withholding The Funds will be required in certain cases to withhold and remit to the U.S. Department of theTreasury 28% of distributions, and, in the case of failure described in clause (1) below, the proceeds of redemptions of shares (regardless of whether you realize a gain or a loss) otherwise payable to you if you: (1) have failed to provide a correct taxpayer identification number; (2) are subject to backup withholding by the IRS for failure to report the receipt of interest or dividend income properly; or (3) have failed to certify to the Fund that it is not subject to backup withholding or that it is a corporation or other “exempt recipient.” Backup withholding is not an additional tax; rather any amounts so withheld may be credited against a shareholder’s federal income tax liability or refunded. 36 G. State and Local Taxes The tax rules of the various states of the U.S. and their local jurisdictions with respect to an investment in the Funds can differ from the federal income taxation rules described above.These state and local rules are not discussed herein.You are urged to consult your tax Adviser as to the consequences of state and local tax rules with respect to an investment in the Funds. H. Foreign Income Tax Investment income received by each Fund from sources within foreign countries and gains it realizes on the disposition of foreign securities may be subject to foreign income taxes withheld at the source.The U.S. has entered into tax treaties with many foreign countries that may entitle the Funds to a reduced rate of such taxes or exemption from taxes on such income.It is impossible to know the effective rate of foreign tax in advance since the amount of each Fund’s assets to be invested within various countries cannot be determined. If more than 50% of the value of a Fund’s total assets at the close of its taxable year consists of securities of foreign issuers, the Fund will be eligible and intends to file an election with the Internal Revenue Service to pass through to its shareholders the amount of foreign taxes paid by the Fund.However, there can be no assurance that a Fund will be able to do so.Pursuant to this election, you will be required to (1) include in gross income (in addition to taxable dividends actually received) your pro rata share of foreign taxes paid by a Fund, (2) treat your pro rata share of such foreign taxes as having been paid by you and (3) either deduct such pro rata share of foreign taxes in computing your taxable income or treat such foreign taxes as a credit against federal income taxes.You may be subject to rules which limit or reduce your ability to fully deduct or claim a credit for your pro rata share of the foreign taxes paid by the Fund in which you invest. OTHER MATTERS A. The Trust and Its Shareholders General Information.Each Fund is a separate series of the Trust.The Trust is an open-end investment management company organized under Delaware law as a statutory trust on August 29, 1995.On January 5, 1996, the Trust succeeded to the assets and liabilities of Forum Funds, Inc. The Trust’s trust instrument permits the Trust to offer separate series (“funds”) of shares of beneficial interest (“shares”).The Trust reserves the right to create and issue shares of additional funds.The Trust and each fund will continue indefinitely until terminated.Each fund is a separate mutual fund, and each share of each fund represents an equal proportionate interest in that fund.All consideration received by the Trust for shares of any fund and all assets of such fund belong solely to that fund and would be subject to liabilities related thereto.The other funds of the Trust are described in one or more separate statements of additional information. Shareholder Voting and Other Rights.Each share of a fund and each class of shares has equal dividend, distribution, liquidation and voting rights.Fractional shares have those rights proportionately, except that expenses related to the distribution of the shares of each fund or class (and certain other expenses such as transfer agency, shareholder service and administration expenses) are borne solely by those shares.Each fund or class votes separately with respect to the provisions of any Rule 12b-1 plan which pertains to the fund or class and other matters for which separate fund or class voting is appropriate under applicable law.Generally, shares will be voted separately by each fund except if (1) the 1940 Act requires shares to be voted in the aggregate and not by individual funds or (2) the Board determines that the matter affects more than one fund and all affected funds must vote.The trustees may also determine that a matter only affects certain funds or classes of the Trust and thus that only those funds or classes are entitled to vote on the matter.Delaware law does not require the Trust to hold annual meetings of shareholders, and it is anticipated that shareholder meetings will be held only when specifically required by federal or state law.There are no conversion or preemptive rights in connection with shares of the Trust. All shares, when issued in accordance with the terms of the offering, will be fully paid and non-assessable. A shareholder in a fund is entitled to the shareholder’s pro rata share of all distributions arising from that fund’s assets and, upon redeeming shares, will receive the portion of the fund’s net assets represented by the redeemed shares. 37 Shareholders representing 10% or more of the Trust’s (or a fund’s) shares may, as set forth in the trust instrument, call meetings of the Trust (or fund) for any purpose related to the Trust (or fund), including, in the case of a meeting of the Trust, the purpose of voting on removal of one or more trustees. Termination or Reorganization of Trust or Its Series.The Board may, without prior shareholder approval, change the form of organization of the Trust by merger, consolidation or incorporation, so long as the surviving entity is an open-end management investment company.Under the trust instrument, the trustees may also, without shareholder vote, sell and convey all or substantially all of the assets of the Trust to another trust, partnership, association or corporation, or cause the Trust to incorporate in the State of Delaware, so long as the surviving entity is an open-end, management investment company that will succeed to or assume the Trust’s registration statement. Under the trust instrument, the Board may sell or convey the assets of a fund or reorganize such fund into another investment company registered under the 1940 Act without a shareholder vote. B. Fund Ownership As of October 5, 2011, the Trustees and officers of the Trust in the aggregate owned less than 1% of the outstanding shares of beneficial interest of the Funds. A principal shareholder is any person who owns of record or beneficially 5% or more of the outstanding shares of a Fund.As of October 5, 2011, certain shareholders of record owned 5% or more of the shares of each Fund. Shareholders known by a Fund to own beneficially 5% or more of shares of the Funds are listed in Table 7 in Appendix B. A control person is a shareholder who owns beneficially or through controlled companies more than 25% of the voting securities of a company or acknowledges the existence of control.Shareholders owning voting securities in excess of 25% may determine the outcome of any matter affecting and voted on by shareholders of a Fund. As of October 5, 2011, the shareholders below may be deemed to control the Midcap Growth Fund. “Control” for this purpose is the ownership of more than 25% of a Fund’s voting securities. Midcap Growth Fund Name and Address % of Fund Daniel F. Dent & Thomas F. O'Neil Trustees FBO D.F. Dent Company, Inc. PST UAD 3/31/76 2 East Read St Baltimore, MD 21202 28.32% Thomas F. O’Neil Jr. 2 East Read St Baltimore, MD 21202 27.66% C. Limitations on Shareholders’ and Trustees’ Liability Delaware law provides that the Funds’ shareholders are entitled to the same limitations of personal liability extended to stockholders of private corporations for profit. In addition, the Trust’s trust instrument contains an express disclaimer of shareholder liability for the debts, liabilities, obligations and expenses of the Trust.The Trust’s trust instrument provides for indemnification out of each fund’s property of any shareholder or former shareholder held personally liable for the obligations of the fund.The trust instrument also provides that the Trust, on behalf of a fund, shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the fund and satisfy any judgment thereon.Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which Delaware law does not apply, no contractual limitation of liability was in effect and the Fund is unable to meet its obligations. The trust instrument provides that the trustees shall not be liable to any person other than the Trust and its shareholders.In addition, the trust instrument provides that the trustees shall not be liable for any conduct or omission in his capacity as trustee, provided that a trustee is not protected against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. 38 D. Proxy Voting Procedures A copy of the Trust’s and Adviser’s proxy voting procedures are included in Appendices C and D, respectively.Information regarding how the Funds voted proxies relating to portfolio securities during the twelve-month period ended June 30 will be available (1) without charge, upon request, by contacting the Transfer Agent at +1-916-454-9627 (toll free) and (2) on the SEC’s michael03@example.com. E. Code of Ethics The Trust and the Adviser have each adopted a code of ethics under Rule 17j-1 of the 1940 Act which is designed to eliminate conflicts of interest between the Funds and personnel of the Trust and the Adviser.The codes permit such personnel to invest in securities, including securities that may be purchased or held by the Funds, subject to certain limitations. F. Registration Statement This SAI and the Prospectus do not contain all the information included in the Trust’s registration statement filed with the SEC under the 1933 Act with respect to the securities offered hereby.The registration statement, including the exhibits filed therewith, may be examined at the office of the SEC in Washington, D.C. Statements contained herein and in the Prospectus as to the contents of any contract or other documents are not necessarily complete, and, in each instance, are qualified by reference to the copy of such contract or other documents filed as exhibits to the registration statement. G. Financial Statements The Trust’s independent registered public accounting firm, BBD, audits and reports on the Funds’ annual financial statements. The financial statements include the schedule of investments, statement of assets and liabilities, statement of operations, statements of changes in net assets, financial highlights, notes and report of independent registered public accounting firm. Shareholders will receive annual audited financial statements and semi-annual unaudited financial statements. The Premier Growth Fund’s Financial Statements and Financial Highlights for the year ended June 30, 2011, are incorporated by reference into this SAI from the Premier Growth Fund’s Annual Report to shareholders.As of June 30, 2011, the Midcap Growth Fund had not commenced operations, and thus financial statements are not available for the Midcap Growth Fund. 39 APPENDIX A – DESCRIPTION OF SECURITIES RATINGS Corporate and Municipal Long-Term Bond Ratings The following descriptions of S&P’s long-term corporate and municipal bond ratings have been published by Standard & Poor’s Financial Service LLC. AAA - An obligation rated ‘AAA’ has the highest rating assigned by S&P. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong. AA - An obligation rated ‘AA’ differs from the highest-rated obligations only to a small degree. The obligor’s capacity to meet its financial commitment on the obligation is very strong. A- An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong. BBB -An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. BB, B, CCC, CC, and C - Obligations rated ‘BB’, ‘B’, ‘CCC’, ‘CC’, and ‘C’ are regarded as having significant speculative characteristics. ‘BB’ indicates the least degree of speculation and ‘C’ the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. BB - An obligation rated ‘BB’ is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation. B - An obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment on the obligation. CCC - An obligation rated ‘CCC’ is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. CC - An obligation rated ‘CC’ is currently highly vulnerable to nonpayment. C- A ‘C’ rating is assigned to obligations that are currently highly vulnerable to nonpayment, obligations that have payment arrearages allowed by the terms of the documents, or obligations of an issuer that is the subject of a bankruptcy petition or similar action which have not experienced a payment default. Among others, the ‘C’ rating may be assigned to subordinated debt, preferred stock or other obligations on which cash payments have been suspended in accordance with the instrument’s terms or when preferred stock is the subject of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par. D - An obligation rated ‘D’ is in payment default. The ‘D’ rating category is used when payments on an obligation, including a regulatory capital instrument, are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor’s believes that such payments will be made during such grace period. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of similar action if payments on an obligation are jeopardized. An obligation's rating is lowered to 'D' upon completion of a distressed exchange offer, A-1 whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par. Plus (+) or Minus (-) - The ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. NR - This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that Standard & Poor’s does not rate a particular obligation as a matter of policy. The following descriptions of Moody’s long-term corporate bond ratings have been published by Moody's Investors Service, Inc. and Moody’s Analytics Inc. Aaa - Obligations rated Aaa are judged to be of the highest quality, with minimal credit risk. Aa - Obligations rated Aa are judged to be of high quality and are subject to very low credit risk. A - Obligations rated A are considered upper-medium grade and are subject to low credit risk. Baa - Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics. Ba - Obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk. B - Obligations rated B are considered speculative and are subject to high credit risk. Caa - Obligations rated Caa are judged to be of poor standing and are subject to very high credit risk. Ca - Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest. C - Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest. Modifiers: Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. The following descriptions of Moody’s long-term municipal bond ratings have been published by Moody's Investors Service, Inc. and Moody’s Analytics Inc. Aaa - Issuers or issues rated Aaa demonstrate the strongest creditworthiness relative to other US municipal or tax-exempt issuers or issues. Aa - Issuers or issues rated Aa demonstrate very strong creditworthiness relative to other US municipal or tax-exempt issuers or issues. A - Issuers or issues rated A present above-average creditworthiness relative to other US municipal or tax-exempt issuers or issues. Baa - Issuers or issues rated Baa represent average creditworthiness relative to other US municipal or tax- exempt issuers or issues. A-2 Ba - Issuers or issues rated Ba demonstrate below-average creditworthiness relative to other US municipal or tax-exempt issuers or issues. B - Issuers or issues rated B demonstrate weak creditworthiness relative to other US municipal or tax- exempt issuers or issues. Caa - Issuers or issues rated Caa demonstrate very weak creditworthiness relative to other US municipal or tax-exempt issuers or issues. Ca - Issuers or issues rated Ca demonstrate extremely weak creditworthiness relative to other US municipal or tax-exempt issuers or issues. C - Issuers or issues rated C demonstrate the weakest creditworthiness relative to other US municipal or tax-exempt issuers or issues. Modifiers: Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating category from Aa through Caa. The modifier 1 indicates that the issuer or obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. The following descriptions of Fitch’s long-term corporate bond ratings have been published by Fitch Inc. and Fitch Ratings Ltd. AAA – Highest credit quality. ‘AAA’ ratings denote the lowest expectation of credit risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events. AA - Very high credit quality. ‘AA’ ratings denote expectations of very low credit risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. A - High credit quality. ‘A’ ratings denote expectations of low credit risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings. BBB - Good credit quality.‘BBB’ ratings indicate that expectations of credit risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity. BB - Speculative. ‘BB’ ratings indicate an elevated vulnerability to credit risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial alternatives may be available to allow financial commitments to be met. B - Highly speculative. ‘B’ ratings indicate that material credit risk is present. For performing obligations, default risk is commensurate with the issuer being rated with an Issuer Default Risk (“IDR”) in the ranges ‘BB’ to ‘C’. For issuers with an IDR below ‘B’, the overall credit risk of this obligation is moderated by the expected level of recoveries should a default occur. For issuers with an IDR above ‘B’, the overall credit risk of this obligation is exacerbated by the expected low level of recoveries should a default occur. For non-performing obligations, the obligation or issuer is in default, or has deferred A-3 payment, but the rated obligation is expected to have extremely high recovery rates consistent with a Recovery Rating of ‘RR1’ (outstanding recovery prospects given default). CCC - Substantial credit risk. ‘CCC’ ratings indicate that substantial credit risk is present. For performing obligations, default risk is commensurate with an IDR in the ranges 'B' to 'C'.For issuers with an IDR below 'CCC', the overall credit risk of this obligation is moderated by the expected level of recoveries should a default occur. For issuers with an IDR above 'CCC', the overall credit risk of this obligation is exacerbated by the expected low level of recoveries should a default occur. For non-performing obligations, the obligation or issuer is in default, or has deferred payment, but the rated obligation is expected to have a superior recovery rate consistent with a Recovery Rating of 'RR2' (superior recovery prospects given default). CC - Very high levels of credit risk. ‘CC’ ratings indicate very high levels of credit risk. For performing obligations, default risk is commensurate with an IDR in the ranges ‘B’ to ‘C’. For issuers with an IDR below ‘CC’, the overall credit risk of this obligation is moderated by the expected level of recoveries should a default occur. For issuers with an IDR above ‘CC’, the overall credit risk of this obligation is exacerbated by the expected low level of recoveries should a default occur. For non-performing obligations, the obligation or issuer is in default, or has deferred payment, but the rated obligation is expected to have a good recovery rate consistent with a Recovery Rating of ‘RR3’ (good recovery prospects given default). C - Exceptionally high levels of credit risk. ‘C’ indicates exceptionally high levels of credit risk. For performing obligations, default risk is commensurate with an IDR in the ranges ‘B’ to ‘C’. The overall credit risk of this obligation is exacerbated by the expected low level of recoveries should a default occur. For non-performing obligations, the obligation or issuer is in default, or has deferred payment, and the rated obligation is expected to have an average, below-average or poor recovery rate consistent with a Recovery Rating of ‘RR4’ (average recovery prospects given default), 'RR5' (below average recovery prospects given default) or ‘RR6’ (poor recovery prospects given default). Defaulted obligations typically are not assigned ‘D’ ratings, but are instead rated in the ‘B’ to ‘C’ rating categories, depending upon their recovery prospects and other relevant characteristics. This approach better aligns obligations that have comparable overall expected loss but varying vulnerability to default and loss. Plus (+) or Minus (-) The modifiers “+” or “-” may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the ‘AAA’ obligation rating category, or to corporate finance obligation ratings in the categories below ‘B’. The terms "investment grade" and "speculative grade" have established themselves over time as shorthand to describe the categories 'AAA' to 'BBB' (investment grade) and ‘BB’ to ‘D’ (speculative grade). The terms "investment grade" and "speculative grade" are market conventions, and do not imply any recommendation or endorsement of a specific security for investment purposes. "Investment grade" categories indicate relatively low to moderate credit risk, while ratings in the "speculative" categories either signal a higher level of credit risk or that a default has already occurred. The following descriptions of Fitch’s long-term municipal bond ratings have been published by Fitch Inc. and Fitch Ratings Ltd. AAA – Highest credit quality. ‘AAA’ ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events. AA - Very high credit quality. ‘AA’ ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. A - High credit quality. ‘A’ ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings. BBB - Good credit quality.‘BBB’ ratings indicate that expectations of credit risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity. BB - Speculative. ‘BB’ ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial alternatives may be available to allow financial commitments to be met. A-4 B: Highly speculative. ‘B’ ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment. CCC - Substantial credit risk. ‘CCC’ ratings indicate that default is a real possibility. CC - Very high levels of credit risk. ‘CC’ ratings indicate default of some kind appears probable. C - Exceptionally high levels of credit risk. ‘C’ ratings indicate default appears imminent or inevitable. D –Default. ‘D’ ratings indicate a default. Default generally is defined as one of the following: · failure to make payment of principal and/or interest under the contractual terms of the rated obligation; · the bankruptcy filings, administration, receivership, liquidation or other winding-up or cessation of the business of an issuer/obligor; or · the coercive exchange of an obligation, where creditors were offered securities with diminished structural or economic terms compared with the existing obligation. Structured Finance Defaults – “Imminent” default, categorized under ‘C’, typically refers to the occasion where a payment default has been intimated by the issuer, and is all but inevitable. This may, for example, be where an issuer has missed a scheduled payment, but (as is typical) has a grace period during which it may cure the payment default. Another alternative would be where an issuer has formally announced a coercive debt exchange, but the date of the exchange still lies several days or weeks in the immediate future. Additionally, in structured finance transactions, where analysis indicates that an instrument is irrevocably impaired such that it is not expected to pay interest and/or principal in full in accordance with the terms of the obligation's documentation during the life of the transaction, but where no payment default in accordance with the terms of the documentation is imminent, the obligation will typically be rated in the ‘C’ category. Structured Finance Writedowns - Where an instrument has experienced an involuntary and, in the agency's opinion, irreversible “writedown” of principal (i.e. other than through amortization, and resulting in a loss to the investor), a credit rating of ‘D’ will be assigned to the instrument. Where the agency believes the “writedown” may prove to be temporary (and the loss may be "written up" again in future if and when performance improves), then a credit rating of ‘C’ will typically be assigned. Should the “writedown” then later be reversed, the credit rating will be raised to an appropriate level for that instrument. Should the “writedown” later be deemed as irreversible, the credit rating will be lowered to ‘D’. Notes: In the case of structured and project finance, while the ratings do not address the loss severity given default of the rated liability, loss severity assumptions on the underlying assets are nonetheless typically included as part of the analysis. Loss severity assumptions are used to derive pool cash flows available to service the rated liability. In the case of public finance, the ratings also do not address the loss given default of the rated liability, focusing instead on the vulnerability to default of the rated liability. Plus (+) or Minus (-) - The modifiers “+” or “-”may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the ‘AAA’ Long-Term Rating category, or to Long-Term Rating categories below ‘B’. A-5 Municipal Short-Term Bond Ratings The following descriptions of S&P’s short-term municipal ratings have been published by Standard & Poor’s Financial Service LLC. SP-1 - Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation. SP-2 - Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes. SP-3 - Speculative capacity to pay principal and interest. The following descriptions of Moody’s short-term ratings have been published by Moody's Investors Service, Inc. and Moody’s Analytics Inc. MIG 1 - This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing. MIG 2 - This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group. MIG 3 - This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established. SG - This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins of protection. The following descriptions of Fitch’s short-term ratings have been published by Fitch Inc. and Fitch Ratings Ltd. F1: Highest short-term credit quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added "+" to denote any exceptionally strong credit feature. F2: Good short-term credit quality. Good intrinsic capacity for timely payment of financial commitments. F3: Fair short-term credit quality. The intrinsic capacity for timely payment of financial commitments is adequate. B: Speculative short-term credit quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions. C: High short-term default risk. Default is a real possibility. RD: Restricted default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Applicable to entity ratings only. D: Default. Indicates a broad-based default event for an entity, or the default of a specific short-term obligation. A-6 Commercial Paper Ratings The following descriptions of S&P’s commercial paper ratings have been published by Standard & Poor’s Financial Service LLC. A-1 - A short-term obligation rated ‘A-1’ is rated in the highest category by Standard & Poor’s. The obligor’s capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor’s capacity to meet its financial commitment on these obligations is extremely strong. A-2 - A short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor’s capacity to meet its financial commitment on the obligation is satisfactory. A-3 - A short-term obligation rated ‘A-3’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. B - A short-term obligation rated ‘B’ is regarded as having significant speculative characteristics. Ratings of ‘B-1’, ‘B-2’, and ‘B-3’ may be assigned to indicate finer distinctions within the ‘B’ category. The obligor currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation. B-1 - A short-term obligation rated ‘B-1’ is regarded as having significant speculative characteristics, but the obligor has a relatively stronger capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors. B-2 - A short-term obligation rated ‘B-2’ is regarded as having significant speculative characteristics, and the obligor has an average speculative-grade capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors. B-3 - A short-term obligation rated ‘B-3’ is regarded as having significant speculative characteristics, and the obligor has a relatively weaker capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors. C - A short-term obligation rated ‘C’ is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. D - A short-term obligation rated ‘D’ is in payment default. The ‘D’ rating category is used when payments on an obligation , including a regulatory capital instrument, are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor’s believes that such payments will be made during such grace period. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized. Dual Ratings – S&P assigns “dual” ratings to all debt issues that have a put option or demand feature as part of their structure. The first rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. The long-term rating symbols are used for bonds to denote the long-term maturity and the short-term rating symbols for the put option (for example, ‘AAA/A-1+’). With U.S. municipal short-term demand debt, note rating symbols are used with the short-term issue credit rating symbols (for example, ‘SP-1+/A-1+’). A-7 The following descriptions of Moody’s commercial paper ratings have been published by Moody's Investors Service, Inc. and Moody’s Analytics Inc. P-1 - Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations. P-2 - Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations. P-3 - Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations. NP - Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories. Note: Canadian issuers rated P-1 or P-2 have their short-term ratings enhanced by the senior-most long-term rating of the issuer, its guarantor or support-provider. The following descriptions of Fitch’s commercial paper ratings have been published by Fitch Inc. and Fitch Ratings Ltd. F1 - Highest short-term credit quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong credit feature. F2 - Good short-term credit quality. Good intrinsic capacity for timely payment of financial commitments. F3 - Fair short-term credit quality. The intrinsic capacity for timely payment of financial commitments is adequate. B – Speculative short-term credit quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions. C - High short-term default risk. Default is a real possibility. RD – Restricted default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Applicable to entity ratings only. D –Default. Indicates a broad-based default event for an entity, or the default of a specific short-term obligation. The modifiers “+” or “-” may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the ‘AAA’ Long-term rating category, to categories below ‘CCC’, or to Short-term ratings other than ‘F1’. (The +/- modifiers are only used to denote issues within the CCC category, whereas issuers are only rated CCC without the use of modifiers.) A-8 APPENDIX B – MISCELLANEOUS TABLES Table 1 – Investment Advisory Fees The following table shows the dollar amount of advisory fees accrued by the Premier Growth Fund, the amount of the fee reduction or expense reimbursement, if any, by the Adviser, and the actual fees received by the Adviser. The data is for the past three fiscal years. Premier Growth Fund Advisory Fees Advisory Fees Waived Advisory Fees Received Year ended June 30, 2011 Year ended June 30, 2010 Year ended June 30, 2009 Table 2 – Administration Fees The following table shows the dollar amount of the fees accrued by the Premier Growth Fund to Atlantic for administration, transfer agent and fund accounting services, the amount of fees waived by Atlantic, and the actual fees retained by Atlantic.The data is for the past three fiscal years. Premier Growth Fund Administration Fees Administration Fees Waived Administration Fees Received Year ended June 30, 2011 $0 Year ended June 30, 2010 $0 Year ended June 30, 2009 $0 Table 3 – Compliance Fees The following table shows the dollar amount of the fees accrued by the Premier Growth Fund to Atlantic for compliance services, the amount of fees waived by Atlantic, and the actual fees retained by Atlantic. The data is for the past three fiscal years. Premier Growth Fund Compliance Fees Compliance Fees Waived Compliance Fees Received Year ended June 30, 2011 Year ended June 30, 2010 Year ended June 30, 2009 Table 4 – Commissions The following table shows the aggregate brokerage commissions of the Premier Growth Fund as well as the aggregate commissions paid to any affiliates of the Premier Growth Fund or the Adviser. The data is for the past three fiscal years. Premier Growth Fund Total Brokerage Commissions ($) Total Brokerage Commissions ($) Paid to an Affiliate of the Fund, Adviser or Distributor % of Brokerage Commissions Paid to an Affiliate of the Fund, Adviser or Distributor % of Transactions Executed by an Affiliate of the Fund, Advisor or Distributor Year ended June 30, 2011 $0 0% 0% Year ended June 30, 2010 $0 0% 0% Year ended June 30, 2009 $0 0% 0% B-1 Table 5 - Directed Brokerage The following table lists each broker to whom the Premier Growth Fund directed brokerage in return for research services, the amount of transactions so directed and the amount of commissions generated therefrom.The data is for the past fiscal year ended June 30, 2011. Broker (Premier Growth Fund) Amount Directed Amount of Commissions Generated ITG Raymond James & Associates Inc. Signal Hill Stifel, Nicolaus & Company Inc. William Blair & Company, L.L.C. INTERSTATE Robert W. Baird & Co. Inc. Barclay Investments, Inc. Sidoti & Company, LLC ITG Inc. BB&TInvestment Services, Inc. Needham & Company, Inc. Avondale Partners, LLC Howard, Weil, Labouisse, Friedrichs Inc. BNY Brokerage, Inc. Table 6 – Securities of Regular Brokers or Dealers The following table lists the regular brokers and dealers of the Premier Growth Fund whose securities (or the securities of the parent company) were acquired during the past fiscal year and the aggregate value of the Premier Growth Fund’s holdings of those securities as of the Premier Growth Fund’s fiscal year ended June 30, 2011. Regular Broker or Dealer (Premier Growth Fund) Value Held None N/A Table 7– 5% Shareholders The following table lists: (1) the persons who owned of record 5% or more of the outstanding shares of a class of shares of each Fund; and (2) any person known by each Fund to own beneficially 5% or more of a class of shares of the Fund, as of October 5, 2011. Midcap Growth Fund Name and Address % of Fund Daniel F. Dent & Thomas F. O'Neil Trustees FBO D.F. Dent Company, Inc. PST UAD 3/31/76 2 East Read St Baltimore, MD 21202 28.32% Thomas F. O’Neil Jr. 2 East Read St Baltimore, MD 21202 27.66% Matthew F. Dent 2 East Read St Baltimore, MD 21202 17.30% Premier Growth Fund Name and Address % of Fund N/A N/A B-2 APPENDIX C- PROXY VOTING PROCEDURES FORUM FUNDS POLICIES AND PROCEDURES FOR SHAREHOLDER VOTING July 31, 2003 As Amended September 14, 2004 and December 11, 2009 SECTION 1.PURPOSE Shareholders of the various series of Forum Funds (the “Trust”) expect the Trust to vote proxies received from issuers whose voting securities are held by a series of the Trust (each a “Fund”). The Trust exercises its voting responsibilities as a fiduciary, with the goal of maximizing the value of the Trust’s and its shareholders’ investments. This document describes the Policies and Procedures for Voting Proxies (“Policies”) received from issuers whose voting securities are held by each Fund. SECTION 2. RESPONSIBILITIES Adviser. Pursuant to the investment Advisory agreements between the Trust and the investment advisers providing Advisory services to the Funds, the Trust has delegated the authority to vote proxies received by a Fund regarding securities contained in its portfolio to its investment adviser (each an “Adviser”). These Policies are to be implemented by each Adviser of each Fund for which it provides Advisory services. To the extent that these Policies do not cover potential voting issues with respect to proxies received by a Fund, the Adviser shall act on behalf of the applicable Fund to promote the Fund’s investment objectives, subject to the provisions of these Policies. The Adviser shall periodically inform its employees (1) that they are under an obligation to be aware of the potential for conflicts of interest on the part of the Adviser with respect to voting proxies on behalf of the Funds, both as a result of the employee’s personal relationships and due to circumstances that may arise during the conduct of the Adviser’s business, and (2) that employees should bring conflicts of interest of which they become aware to the attention of the management of the Adviser. The Adviser shall be responsible for coordinating the delivery of proxies by the Fund’s custodian to the Adviser or to an agent of the Adviser selected by the Adviser to vote proxies with respect to which the Adviser has such discretion (a “Proxy Voting Service”). Reporting. The Adviser shall provide periodic reports to the Trust as to the implementation and operation of these Policies and the proxy voting policies and procedures of the Adviser as they relate to the Funds. SECTION 3.SCOPE These Policies summarize the Trust’s positions on various issues of concern to investors in issuers of publicly-traded voting securities, and give guidance about how each Adviser should vote the Fund’s shares on each issue raised in a proxy statement. These Policies are designed to reflect the types of issues that are typically presented in proxy statements for issuers in which a Fund may invest; they are not meant to cover every possible proxy voting issue that might arise. Accordingly, the specific policies and procedures listed below are not exhaustive and do not address all potential voting issues or the intricacies that may surround specific issues in all cases. For that reason, there may be instances in which votes may vary from these Policies. C-1 SECTION 4.POLICIES AND PROCEDURES FOR VOTING PROXIES (A) General Use of Adviser Proxy Voting Guidelines or Proxy Voting Service. If (A) the Adviser has proprietary proxy voting guidelines that it uses for its clients or the Adviser uses a Proxy Voting Service and the Proxy Voting Service has published guidelines for proxy voting; (B) the Trust’s Board of Trustees (the “Board”) has been notified that the Adviser intends to use such Adviser or Proxy Voting Service proxy voting guidelines to vote an applicable Fund’s proxies and has approved such guidelines; and (C) the Adviser’s or Proxy Voting Service’s Guidelines are filed as an exhibit to the applicable Fund’s Registration Statement (each considered “Adviser Guidelines”), then the Adviser may vote, or may delegate to the Proxy Voting Service the responsibility to vote, the Fund’s proxies consistent with such Adviser Guidelines. Absence of Proxy Voting Guidelines. In the absence of Adviser Guidelines, the Adviser shall vote the Fund’s proxies consistent with Sections B and C below. (B) Routine Matters As the quality and depth of management is a primary factor considered when investing in an issuer, the recommendation of the issuer’s management on any issue will be given substantial weight. The position of the issuer’s management will not be supported in any situation where it is determined not to be in the best interests of the Fund’s shareholders. Election of Directors. Proxies should be voted for a management-proposed slate of directors unless there is a contested election of directors or there are other compelling corporate governance reasons for withholding votes for such directors. Management proposals to limit director liability consistent with state laws and director indemnification provisions should be supported because it is important for companies to be able to attract qualified candidates. Appointment of Auditors. Management recommendations will generally be supported. Changes in State of Incorporation or Capital Structure. Management recommendations about reincorporation should be supported unless the new jurisdiction in which the issuer is reincorporating has laws that would materially dilute the rights of shareholders of the issuer. Proposals to increase authorized common stock should be examined on a case-by-case basis. If the new shares will be used to implement a poison pill or another form of anti-takeover device, or if the issuance of new shares could excessively dilute the value of outstanding shares upon issuance, then such proposals should be evaluated to determine whether they are in the best interest of the Fund’s shareholders. (C) Non-Routine Matters Corporate Restructurings, Mergers and Acquisitions. These proposals should be examined on a case-by-case basis. Proposals Affecting Shareholder Rights. Proposals that seek to limit shareholder rights, such as the creation of dual classes of stock, generally should not be supported. Anti-takeover Issues. Measures that impede takeovers or entrench management will be evaluated on a case-by-case basis taking into account the rights of shareholders and the potential effect on the value of the company. Executive Compensation. Although management recommendations should be given substantial weight, proposals relating to executive compensation plans, including stock option plans, should C-2 be examined on a case-by-case basis to ensure that the long-term interests of management and shareholders are properly aligned. Social and Political Issues. These types of proposals should generally not be supported if they are not supported by management unless they would have a readily-determinable, positive financial effect on shareholder value and would not be burdensome or impose unnecessary or excessive costs on the issuer. (D) Conflicts of Interest Each Adviser is responsible for maintaining procedures to identify conflicts of interest and, when applicable, determining the adequacy of a Proxy Voting Service’s procedures to identify conflicts. The Trust recognizes that under certain circumstances an Adviser or Proxy Voting Service may have a conflict of interest in voting proxies on behalf of a Fund advised by the Adviser. A “conflict of interest” includes, for example, any circumstance when the Fund, the Adviser, the principal underwriter, the Proxy Voting Service or one or more of their affiliates (including officers, directors and employees) knowingly does business with, receives compensation from, or sits on the board of, a particular issuer or closely affiliated entity, and, therefore, may appear to have a conflict of interest between its own interests and the interests of Fund shareholders in how proxies of that issuer are voted. If a Proxy Voting Service determines it has a conflict of interest with respect to voting proxies on behalf of the Fund, the Adviser shall vote the proxy in the best interests of the Fund and its shareholders. If the Adviser determines that it has a conflict of interest with respect to voting proxies on behalf of a Fund, then the Adviser shall contact the Chairman of the Board. In the event that the Chairman determines that he has a conflict of interest, the Chairman shall submit the matter for determination to another member of the Board who is not an “interested person” of the Trust, as defined in the Investment Company Act of 1940, as amended. In making a determination, the Chairman will consider the best interests of Fund shareholders and may consider the recommendations of the Adviser or independent third parties that evaluate proxy proposals. The Adviser will vote the proposal according to the determination and maintain records relating to this process. (E)Abstention The Trust may abstain from voting proxies in certain circumstances. The Adviser or the Chairman of the Board may determine, for example, that abstaining from voting is appropriate if voting may be unduly burdensome or expensive, or otherwise not in the best economic interest of the Fund’s shareholders, such as when foreign proxy issuers impose unreasonable or expensive voting or holding requirements or when the costs to the Fund to effect a vote would be uneconomic relative to the value of the Fund’s investment in the issuer. C-3 APPENDIX D -ADVISER VOTING PROCEDURES D.F. DENT AND COMPANY, INC. PROXY VOTING PROCEDURES AND POLICIES REGARDING DF DENT GROWTH FUNDS As of October 7, 2010 I. GENERAL STATEMENT D.F. Dent and Company, Inc. (Adviser) has discretion to vote the proxies for the majority of its accounts, including the DF Dent Midcap Growth Fund and the DF Dent Premier Growth Fund (each a Fund, together, the Funds). Proxy voting is an important right of shareholders and reasonable care and diligence must be undertaken to ensure that such rights are properly and timely exercised.Adviser uses ADP’s Proxy Edge software system for the collection, voting and recordkeeping of proxies for all client accounts for which we have responsibility (i.e., clients who have not assumed proxy voting authority for themselves or have not given such authority to their custodian, broker, consultant, etc.).To resolve conflicts between the contractual responsibility for proxy voting in our Advisory Agreements with clients and the instructions that we may have received over the years from clients, custodians, brokers, consultants, etc., Adviser undertook in early 2007 to verify, with the help of ProxyEdge, the identity of those clients who affirmatively do not authorize Adviser to vote proxies for them.In the absence of this verification by ProxyEdge, Adviser will continue to vote proxies for client accounts in order to protect clients’ interests as shareholders. II. POLICIES AND PROCEDURES FOR VOTING PROXIES Adviser will vote those proxies in the best interest of its clients and the Funds’ shareholders and in accordance with these procedures and policies. Since the quality and integrity of management is a primary factor Adviser considers when investing in an issuer, the recommendation of the issuer’s management on any issue, particularly routine issues, will be given substantial weight in deciding how to vote proxies. However, Adviser will not support the position of the issuer’s management in any situation where we determine that the position is not in the best interest of our clients.The instances in which Adviser may vote against an issuer’s board of directors or “management” proposal will be determined on a case-by-case basis, and Adviser’s Designated Officer, Bruce Kennedy, will document those instances in our Proxy Voting file. Adviser has listed the following, specific examples of voting decisions for the types of proposals that are frequently presented.Adviser generally votes according to these guidelines. Adviser may, on occasion, vote otherwise when Adviser believes it to be in the best interest of our clients: · Adviser generally supports shareholder proposals to reduce a super-majority vote requirement and opposes management proposals to add a super-majority vote requirement. · Adviser generally opposes proposals to create a new class of stock with superior voting rights. · Adviser generally opposes proposals to classify a board. · Adviser generally supports proposals to eliminate cumulative voting. · Adviser generally opposes re-pricing of stock options without shareholder approval. · Adviser generally supports proposals to require majority voting for the election of Directors · Adviser generally opposes poison pills. · Adviser generally reviews proposals for changes in corporate structure such as changes in the state of incorporation or mergers individually. We generally oppose proposals where management does not offer an appropriate rationale. D-1 · Adviser generally opposes the elimination of the rights of shareholders to call special meetings. · Adviser generally supports management’s proposals regarding the approval of independent auditors. · Adviser generally opposes shareholder proposals that apply restrictions related to political or special interest issues which affect the ability of the company to do business or be competitive and which have negative financial impact. · Adviser generally opposes proposals that require that the company provide costly, duplicative, or redundant reports, or reports of a non-business nature. Adviser recognizes that under certain circumstances it may have a conflict of interest in voting proxies. A conflict of interest, means any circumstance in which Adviser (including officers, directors, agents and employees) knowingly does business with, receives compensation from, or sits on the board of, a particular issuer or closely affiliated entity, and, therefore, may appear to have a conflict between its own interests and the interests of Fund shareholders in how proxies of that issuer are voted. If Adviser determines that a material conflict of interest exists, the Chief Compliance Officer and/or Designated Officer will determine whether it is appropriate to disclose the conflict to the affected clients, to give the clients an opportunity to vote the proxies themselves, or to address the voting issue through other objective means such as voting in a manner consistent with a predetermined voting policy or receiving an independent third party voting recommendation. III. RECORDKEEPING The Designated Officer or his Portfolio Assistant will maintain hard-copy or electronic files relating to Adviser’s proxy voting procedures in an easily accessible place, including through the ProxyEdge website. Records will be maintained and preserved for five years from the end of the fiscal year during which the last entry was made on a record.Records of the following will be included in the files: A. Copies of the proxy voting procedures and policies, and any amendments thereto. B. A copy of each proxy statement that Adviser receives provided however that the Adviser may rely on obtaining a copy of proxy statements from the SEC’s EDGAR system for those proxy statements that are so available. C. A record of each vote that Adviser casts, including the information required to file Form N-PX. D. A copy of any document Adviser created that was material to making a decision how to vote proxies, or that memorializes that decision, including the resolution of any conflict. E. A copy of each written client request for information on how Adviser voted such client’s proxies, and a copy of any written response to any (written or verbal) client request for information on how Adviser voted its proxies. IV. DISCLOSURE A. Adviser will disclose in its Form ADV Part II that its clients may contact Adviser by toll-free telephone number in order to obtain information on how Adviser voted such client’s proxies, or to request information about the mechanics for proxy voting through the ProxyEdge system (e.g., information in the ProxyEdge User Guide). B. If a client requests information about the voting of particular proxies, Adviser will send to the client a report concerning each voted proxy that is the subject of the client’s request consisting of (1) the name of the issuer, (2) the proposal voted upon and (3) how Adviser voted the client’s proxy. C. A concise summary of these Proxy Voting Procedures and Policies will be included in Adviser’s Form ADV Part II, and will be updated whenever these procedures and policies are amended. D-2
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June 1, 1933. The opinion of the Court was delivered by
On January 20, 1919, the defendant company insured plaintiff's life in the sum of $5,000.00.
The policy contained double indemnity accident and total and permanent disability provisions, and provided for the payment of the premium semi-annually on January 14 and July 14 of each year, with a grace period of 31 days. In 1923 the insured became ill with pulmonary tuberculosis, and was paid total and permanent disability benefits for a period of six months; the payments being discontinued on his return to work. The semi-annual premium of January 14, 1927, was not paid when due, but on February 12, within the grace period, the insured applied to the company for an extension of time for payment, upon conditions, to which we shall hereafter more specifically refer, set out in full on the back of the application. Under the arrangement made, the time was extended to April 14, the plaintiff deposited with the company $63.41, and the balance of the premium was to be paid on the extended date.
On April 20 the insured, who had failed to make payment of the balance due, $36.87, on April 14, went to the office of the company at Rock Hill, S.C. to see about the matter, and was told by defendant's cashier and agent that the policy had lapsed through such failure. At that time, however, he paid the company the $36.87, which amount was received and accepted by it, and also made application for reinstatement of the policy. Later he was examined by a company *Page 22
physician, who reported his physical condition to be good, but called attention to the tubercular trouble which the insured had had in 1923 — a matter, however, already known to the insurer. The company refused to reinstate the policy with the double indemnity accident and total disability benefits, giving as its reasons the applicant's former tubercular trouble, but indicated that it was willing to issue a straight life policy without these provisions. Thereafter, in May, 1927, he signed a paper prepared by and addressed to the company, indicating his willingness to accept such a policy, and one of that kind was then issued him. Later, the company sent him a check for $3.93, which was accepted by him, as a refund of a part of the premium money that had been paid. In 1930 the insured became totally disabled, and thereafter made demand upon the company for reinstatement of his original policy containing the total and permanent disability benefit provisions, but his request was refused. He then brought this action against the defendant for "breach of contract accompanied by fraudulent acts," seeking damages, actual and punitive, in the sum of $2,999.00.
The gist of the complaint is that the policy providing for total and permanent disability benefits was improperly taken from the insured by the defendant, and that he was forced to accept a new policy without such benefits; that the company accomplished this, through its agent, by falsely stating to the plaintiff that his policy had lapsed because of his failure to make payment of the premium due January 14, 1927, and by inducing him, through false statements, to be examined for reinstatement of the policy, upon the assurance that, if he did so, it would be good thereafter. The company denied all allegations of fraud, and alleged that the change in the policy was brought about by its lapse and by application of plaintiff for its reinstatement; that the insured agreed in writing to such change, and requested that a policy without total and permanent disability benefits be issued him; the original being thereby reinstated with the exception of such benefits. *Page 23
The case was tried at the May, 1932, term of Court of Common Pleas for Chester County, and resulted in a verdict for the plaintiff for the whole amount asked for. From judgment entered thereon this appeal is taken.
The exceptions, five in number, all relate to Judge Stoll's refusal to direct a verdict for the defendant. The first question presented is whether the policy lapsed on April 14, 1927. The appellant contends that the uncontradicted evidence shows this to be true, and that such lapse was brought about, not only by the terms of the policy, but by the conditions of the extension agreement between the parties. The position of the respondent is that "the policy does not provide for a forfeiture if the extension premium is not paid promptly, and the conditions of extension do not permit a cancellation of the policy and a retention in full of the premium already paid"; and that "no new stipulations of forfeiture can be added to the policy in this way."
Turning to the original contract of insurance, we find the following provision: "Except as herein expressly provided, the payment of any premium or installment thereof shall not maintain this policy in force beyond the date when the succeeding premium or installment thereof becomes payable."
On the back of the application for extension were printed the terms and conditions upon which the deposit was made and the extension requested, which, in purport, are the same as those printed on the back of the company's "formal notice" to the applicant that the extension was granted. This notice, or "receipt," dated February 12, 1927, was signed by the secretary and countersigned by the cashier or collecting agent of the company, and was as follows:
"THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, NEW YORK, N Y
"Agency at Rock Hill, 2/12/1927
"The time for the payment of the premium due January 14, on Policy No. 2404212 subject to the terms and conditions *Page 24
on the back hereof, is extended to April 14, 1927, and the receipt of .......... Dollars ($63.41) is hereby acknowledged, which together with previous deposits of $........... now applied to same purpose makes a total deposit of $..........
"Should the balance of the premium (with interest at 5% per annum) remain unpaid at the expiration of this extension the Equitable shall return to the depositor on demand any balance of the total deposit remaining after the deduction of the percentage of the premium required as compensation for the privilege of this extension. Any previous receipts for deposit made in connection with this premium, are hereby cancelled."
On the back of this paper were printed the following conditions of extension:
"The within policy shall continue in force until the extended date without grace; if the difference between the total deposit and the amount of the premium, with interest upon such difference from the original due date of the premium at the rate of five per cent per annum shall be paid to the Equitable on or before the extended date, the same, together with the amount deposited, shall then be accepted in payment of the premium and the policy shall be continued as if the premium had been paid when due; if such payment is not made on or before the extended date without demand or notice, the Equitable shall retain out of the amount deposited an amount equal to 5% of the premium if payable annually, 10% if payable semi-annually, or 20% if payable quarterly, for each month from the original due date of the premium to the extended date (except that if the policy be on the term plan a pro rata premium shall be retained) as compensation for the privilege of this extension and on demand shall repay the balance to the depositor and after such extended date all rights under the policy shall be the same as if this agreement and deposit had not been made, except that the time for electing any option upon lapse *Page 25
granted by the policy shall begin to run from the extended date and not from the due date of the premium.
"Due and sufficient notice with regard to this premium, whether required by the statutes of any state or otherwise, has been given, and in consideration of the extension applied for every other or further notice has been waived."
It will be observed that the "extension agreement" provides that, if the difference between the total deposit and the amount of the premium should be paid, with interest, on or before the extended date, that sum, with the amount already deposited by the insured, would be accepted by the company in payment of the premium due on January 14, and the policy would be continued in force as if the premium had been paid when due. It is conceded that the amount deposited with the company on February 12, $63.41, had it been applied to the payment of the premium, would have kept the policy in force for more than four months from January 14, or beyond April 20. The crucial question, therefore, is whether the company, having received and accepted from the insured such sum of money, could declare the policy lapsed at the end of three months, and thereby create a forfeiture under the terms of the extension agreement. The trial Judge held that this, in the circumstances, was a question for the jury. In other words, he submitted for their determination whether, under the admitted facts, the company was estopped to assert that there was a lapse of the policy.
We think, under the peculiar facts of this case, the trial Court might properly have held, as a matter of law, that there was no lapse of the policy on April 14. As we have already stated, the policy was in full force at the time the extension was granted, and the company at that time received from the insured a sum of money sufficient to have kept it in force for a period of more than four months from January 14. Even though the provisions of the extension were to the effect that the time for payment of the premium was extended to April 14 without grace, the receiving and acceptance *Page 26
by the company of such sum of money, which it could have applied to the payment of the premium due and thereby prevented a forfeiture, not only introduced the element of estoppel, but constituted a valid consideration for waiver by the company of punctual payment by the insured of the balance of premium on the date fixed in the extension agreement. If, however, it should be thought that we are wrong in this, and that there was a lapse as contended for by the appellant, there can be no doubt that the acceptance by the company, on April 20, of the balance of the premium, which it claimed should have been paid on April 14, was a consideration for and operated as a renewal of the policy; the evidence is undisputed that such acceptance by the company was voluntary on its part and was made with full knowledge of all its rights in the matter. In any view, the defendant has no ground for complaint that the trial Judge submitted the question to the jury.
Nor do we think, as contended by appellant, that there was a ratification, as a matter of law, by plaintiff of the entire transaction. This question, under all the testimony, was one for the jury, and the trial Judge properly refused the motion for a directed verdict on that ground.
Nor can the contention of the appellant, that no actual damages were proved, be sustained. If the insured was induced, as he testified, by statements of the company to give up a life policy containing accident and total benefit provisions, and to accept in lieu thereof one of lesser benefits, he was undoubtedly damaged to the extent of being deprived of such benefits.
We think, however, from a careful study of the record, that the Court should have granted the defendant's motion for a directed verdict as to punitive damages. In view of the conditions of the "extension agreement," it is easily seen that the company, in taking the position that it did, as to the lapse of the policy, was acting bona *Page 27 fide for the protection of what it believed to be its legal rights; and its acts, being based upon such conclusion, cannot be held fraudulent and intended to cheat the insured out of his rights under the policy.
With regard to the matter of reinstatement, the position taken by the respondent cannot be sustained. The policy provided that, in case of lapse in consequence of nonpayment of any premium when due, it might be reinstated at any time upon production by its holder of evidence of insurability satisfactory to the society, etc. Under this provision, reinstatement was a matter of grace on the part of the company. See Ginyard v. Insurance Company,135 S.C. 48, 133 S.E., 227.
Under the view taken by the Court, as the verdict was for a lump sum, the case must be remanded for a new trial as to actual damages. The measure of such damages is the amount due the insured, if any, under the total and permanent disability provisions of the policy, plus any premiums which he may have paid the company during such period of disability, the payment of which may be waived by any provision of the policy.
The judgment is reversed and the case remanded for a new trial in accordance with the views herein expressed.
MR. CHIEF JUSTICE BLEASE and MESSRS. JUSTICES CARTER and BONHAM concur. |